Available online at wiww.sciencedirect.com ~ @ eth cont ScienceDirect Procedia Ske Computer Science ELSEVIER rosea Computer Scene 183 (2021) 4-848 ‘www aleve comlocuefproosdia 10th Intemational Conference of Information and Communication Technology (ICICT-2020) IT governance and E-banking in GCC listed banks Yousif Alansari* and Abdalmuttaleb M. A. Musleh Al-Sartawi>* “Ani Unite Rank, Manama, Kingdom of Bahrain "Aha Univers, Manama, Kingdom of Bahrain Abstract ‘The current study simed to test ifthe IT govemance positively directed the e-banking services of the GCC registered banks, ‘Accordingly, the needed data was collected form $7 GCC registered banks and the indexes of IT governance and e-banking were used to test the study model. The findings indicate that the level of e-banking was 77% and positively linked with the IT governance applied by the banks. Accordingly, the study recommends that the regulators to encourage banking sector 10 apply ‘more e-banking applications and tools and to suppor the banks through effectively applying the eybersecurity laws in GCC. © 2021 The Authors. Published by Elsevier B.V. ‘This isan open acvess article under the CC BY-NC-ND licen Peer-review under responsibility ofthe scientific eommitteeo ‘Technology. Kesworde: IT Governance; Corporate Governance; P-Banking e (hip:ereativecommons.ongflicenses*by-ne-nd4.0/) 10th Intemational Conference of Information and Communication (Listed Barks 1. Introduction Information Technology (IT) governance has significantly become prominent in businesses and organizations ‘because of the enhancement in the information and telecommunication technology. IT governance become an asset for any organization and considered as a key for success and generating profits, Intellectual capital and workforce are important drivers for the way IT Governance is adopted and implemented (Al-Sartawi, 2020d and Aasi et al., 2014). By applying IT governance, banks and other financial institutions (FIs) can achieve their mission and “objectives effectively. As such, FIs need to ensure that IT systems and business strategies are in continuous alignment, The recent advancements in technology has revolutionized the conventional banking processes and methods, For example, as banking services are available 24/7, working hours as well as physical branches are no longer deemed significant * Comesponding author Tel; 19738231777 fax: 19731729008, Email address: anasatawi@owoalcom/ameslhahliaedu bb 1877-0500 © 2021 The Authors. Published by Fever BLY. This ie an open accre article ander the CC BY-NC-ND licens (hip /eativecommons orlivensessby-ne-nd/4.0/) Peetreviow under responsibilty of the sintic committer of the 10th International Conference of Information and Comasnication ‘Technology 1011046) proc. 2021.05.008Yousif Aansart eal. Procedin Computer Sclence 183 (2021) 844-868 sas ‘The rapid changes in technology increased the pressures and the competition between the banks to provide high quality services to its demanding customers which makes online banking an important solution that can serve the ‘customers and increase the banks’ value at the same time (Al-Sartawi, 2019 and Tandon et al, 2016). The current sludy tries to analyse whether the IT governance applied by the GCC registered banks can enhance and control the e-banking services they provided (o the customers. The second and the third parts of this study will discuss the Titerature and the methods. Finally, the fourth part will be for conclusions. 2, Literature Review ‘There is no doubt thatthe world is witnessing massive changes in the Fields of technology and information, Its assumed that no other domain changes as fast as the information technology domain. The shifts witnessed inthis ‘domain crested more dependency on IT facilities almost in all domains of life and businesses. This is probably attributed to the fact that increased dependence on IT enhances excellence, quality, efficiency, and effectiveness (Al- Sartawi, 2018b and Singh et al, 2015). Using computers in processing, sorting, classifying data through hardware software, networking, Internet, or Intellectual Capital is considered as IT (Al-Sertawi, 20206). ‘The banking sector has been extremely and dynamically impacted by IT. Information technology is the most significant asset, since without IT there will be a myriad of poor decisions which might eventualy lead to business failure. With technology banks can expands its services, products, and delivery channels. Services that are directly sxtributed to the usage of IT inthe banking contexts include online banking, mobile banking, and internet banking Further to that, Information Technology stands behind enabling the banking industry to address the various challenges that have been posed by new economy (Al-Sartawi, 2018c). The most recent improvements and enhancements made in the banking sector are atributed Information technology since it plays @ huge role in reducing the time needed for each transaction and inereasing the trust in financial systems, processes, transactions of the banks (Al-Sertaw, 20182) Most of all, IT facilitated the processes of fund transference and minimized the cost incurred in such transferences (Dangolania2011). Al-Sartawi and Sanad (2019) and Huang, etal, 2011 reported that governance and IT govemance played a vital role in enhancing the e-banking services and products through applying key factors for controlling the activities such as cybersecurity, privacy, and other risk issues. And they mentioned that that familiarity of the customers with IT govemance and the COBIT assurance seal bas positively influenced the customers’ trust in internet banking. Furthermore, Al-Sartawi, (2020) and Musbtaque, et al, 2015, argue that curently banks depend greatly onthe performance of Information Technology and its infrastructure to produce the efficient and effective services as well as to survive the extremely competitiveness the banking industry. In lieu of such changes, banks tend to prioritize IT govemance and take full value of it. As IT helps the various departments, banks thus need to align IT with the core functions ofthe bank and other departments ofthe bank is erucal. Another ‘threat to banks not including competitors is risk. Since, ita threat to both IT’ and the banks, itis the role of IT {governance to identify IT-related risks, mitigate them and manage the performance of IT. Several frameworks are available to banks t help them govern the IT, which can also be introduced to support and guide the technicians ‘who run and control the IT in their respective banks. Al Hila et al, (2017), Sanad and Al-Sartawi (2016) and Al Sartawi (2015) reported that IT govemance and good governance can help banks in conducting management functions such as planning, organizing, controlling, support and delivery, acquisition, and employment of e-banking. 3. Methodology and Data Analysis 3.1. Methodology ‘The GCC stock markets websites and GCC banks websites for 57 registered banks was used to gather the data, Moreover, the researchers used IT governance and E-Banking indexes along with financial data to test the association between the variables: LOBi~ BO ~ 1 ITGi+ 2B_SZi +f3L_BankSZi + P4Lugi +PSAgei + ci wo846 Yousif Mansa et al. Procedia Compuer Sconce 183 (2021) 844-868 Where: LOBY%: Level of online-Banking; ITG%: IT Govemance measured as the percentage of the board ‘members within IT background; B_SZ: Board size; L_ BankSZ: Bank size measured by natural logarithm of the total assets; Lvg%: Leverage measured by Total liabilities! Total Assets; Age: Firm age as the difference between the year of foundation and the current year; ci: Ear. 3.2, Data Analysis: The internal and extemal validity of the checklist was tested by using Cronbach's Alpha. The reliable test was 74.7% for all the items used in the checklist which is indicate that the checklist is valid, and we can depend on it t0 ‘measure the LOB. Furthermore, the researcher used the natural logarithm for the variables to overcome the problem ‘of nonnormally distributed data. Moreover, the Multi-collincarity shows that the V.LF was less than10 which shows that the model can be used for the analysis. The data analysis -Table 1- indicates that the average size of the ban $79537112.2, which indicate that the GCC listed banks has the ability to invest more in technology and provide the latest onfine banking services to their customers. In addition, the leverage was between 0.13 to 0.91, which indicates that the banks can attract more investors for its reputation internationally, Moreover, the table reports that a mean of 8.95 is the bank’s board member size which is between S and 14, It means that the size of the bord is suitable and will enhance the level of corporate governance applied as claimed by Al-Sartawi, (2020a), and Harris and Raviv (2008). Finally, the average of technology for providing services to the eustomers (e-banking) was 77%. Table |, Descriptive Statistics Vurnbiee Minimum Maman Mews Stand Deviation se ST SSB IS —TSIORTHIS —TOSHTITED —TSRISCOGRA Leverage ston oot oo 02172 Bank Age v1 os 35068 19786 BoardSizc 57S 6 895 2709 mG ° 04 0.1668 01062 Lo. 37 ost 099 on 00746 ValidN (istwise) $7 Based on the above analysis, we can conclude that the level of e-banking and IT governance are relatively high in GCC listed banks. Table 2 indicates a strong connection among IT governance and electronic banking provided by GCC registered banks. Moreover, it shows that IT governance and the firm age has a positive relationship with the LOB, However, the study indicates that the size of board has negatively impacted the e-banking because it need more resources and acquire more assets which means the more e-banking applied will increase the cost and it will ‘effect on their own profit and benefit which makes them not willing to pay more to have more of LOB facilites furthermore, the more number of board members will reduce the power of members with IT background and it will ‘effect on decreasing the investments in technology and performing e-banking services. Moreover, the study revealed that the size of the bank has a positive relationship with LOB. This is similar to the findings of Al-Sartawi et al., (2017) and Yap ct al., (2011) studies which concluded that the large board size often leads to a wider range of data and information duc the experience and knowledge they have, Moreover, the table demonstrated that the bank age positively enhances the LOB. Which means that the older banks will invest more in the technology to attract ‘customers and compete in the market,Yousif Mansa eal. Procedia Compuer Sconce 183 (2021) 844-868 87 “Table 2. Muti Regression Analysis Findings ies a Tae Se ie Osa aH Tas Boar Size 031 0.208 os ani Size oss ost asia Leverage 0208 ss 012s Bank Age ozs ane 03 R 0341 ® 0316 Adjusted 02s Std Error ofthe Estate 36 Sie Osi 4, Conclusion and Recommendation The importance of IT governance to the banks in expanding their business and providing better services to reach the customer satisfaction has taken a substantial part of literature. The noticeable inerease and advancement of electronic banking is a reason of targeting this segment along with the current booming of digital banking. This study will provide a guidance to the board of director of the banks to take the advantage of e-banking to expand to ‘new markets This study used the multi-tegression analysis to analysis the data. The analysis shows appropriate level of IT governance and online banking by GCC registered banks. Moreover, the study shows that IT governance and the firm age has a positive relationship with the LOB. 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