An Empirical Study on Psychological Impact of Digitization of Retail Banking on Employees’ Efficiency & Productivity

Abstract

Purpose

The main aim of this study is to evaluate the impact of digitization of retail banking on efficiency and productivity of the employees.

Theoretical Framework

Employees’ efficiency is measured on the following four different parameters viz., Customer calls/Day, Customer visits/Day, Managed Accounts Contractibility, and Customer service hours. The impact of digitization of branch banking on employees’ efficiency is evaluated based on the pre-digitization and post digitization era. Employees’ productivity is measured on the following three different parameters viz., Unit, Value, and Revenue. The impact of digitization of branch banking on employees’ productivity is evaluated based on the pre-digitization and post digitization era.

Design/Methodology/Approach

The data for the above-mentioned parameters is gather for a three years pre-digitization period ranging from 2014-2015 to 2016-2017. Similarly, the post digitization data is gathered for three years period from 2017-2018 to 2019-2020. The pre-digitization and post-digitization averages of all the parameters of employee efficiency and productivity are compared with the help of paired t-test.

Findings

The results of paired sample t-test reveal that both the efficiency and productivity of the employees have been improved post digitization as the p-value obtained from all the parameters is found to be less than the alpha value of 0.05 (P<0.05).

Research, Practical and Social Implication

The results of hypothesis testing reveal that there is a significant impact of digitization of retail banking on efficiency and productivity of the employees. These findings help in identifying the process where digitization can be actively incorporated. This helps to ease out employee bandwidth and help them to engage in more productive work resulting in better outcome.

The study also highlights the social implications of this research, which suggests that digitization helps to reduce the excessive work pressure that bank employees are subjected to. This in turn helps in improving the mental and physical health of the employees, increasing their longitivity in the organisation and reducing employee burnout. Digitization also helps in better audit compliance.

Originality/Value

This study is a contribution to the BFSI Industry and sales domain in general, with an aim to help the organizations with a better understanding of digitization of various processes in banking and its impact on employee productivity and efficiency. It can add value to the banking system through increased employee productivity with the help of digitization.