Strategic information systems in the banking sector: holy grail or poison chalice

Abstract

The literature of the 1980s was full of exhortations to companies to use information technology (IT) strategically. On the whole. thn meant using IT to gain competitice advantage of one .sort or another. By the end of the decode and into the 1990s, the claims for IT were less bullish and, in some sectors, IT began to be seen as a strategic necessity rather than as a means to gaining competitive advantage. There were suggestions that the high level of IT investment in certain sectors was becoming a competitioe burden. For example, research into the strategic use of IT in the banking sector-a heavy incestor in IT in the past and recently subject to changes which have increased competition pressures—proivides evidence to support such contentions. Attempts to move from one technological technological trajectory which supported the old competitive environment to a trajectory more in line with the new customer-oriented environment have been hampered by a number of factors. It is as the banks have become caught up in the IT equivalent of the arms race Further stretching the military metaphor, we suggest that some banks have been trying to apply tactical solutions to strategic problems and might benefit from a reappraisal of their IT strategy in the changed competitive circumstances.

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