Forces leading to changes in the banking industry

Forces Leading to Changes in the Banking Industry

Forces Leading to Changes in the Banking

Since the study is carried out to investigate past event that may have contributed to changes in the banking industry, it is imperative the study will use secondary data. Secondary data as defined by Trzesniewski, Donnellan and Lucas ()

is data collected for other use other than current use. The secondary data collected are fine tuned to suit the current needs.

The key elements to be considered are the changes in the banking industry and the factors that likely triggered those changes. The factors leading to these changes may be spontaneous or induced by economic players/agents. Spontaneous factors include the recession, technological advancements and changes in tastes and preferences. Induced factors include; policy formulation and regulations and actual changes by the banking themselves to occurrences. To capture this occurrences secondary data is much suited since it captures the past events. It is also ideal since the information obtained there in specific on those occurrences. Clear cut linkages can also be drawn as opposed to gathering opinions from individuals Trzesniewski, Donnellan and Lucas ()

Secondary data ease the researchers work by lessening the background works needed. Ideally secondary data provide ready information that is collected and screened out. Secondary data however, have a pre-established degree of suitability, reliability and validity thus, a researcher will need to assess its credibility before use Trzesniewski, Donnellan and Lucas ()

Sources of data

The study will use secondary data from credible articles journals showing the trends in the banking industry. The credibility of the article and journals will be assessed by consistency and relevance in the information availed. The credibility will be assessed by the rigorous measures employed in gathering the data, the inductive analysis carried out while collecting the data and the purpose for which the data was collected. Both external and internal sources of the secondary data will be used. External sources will include government publication and journal articles. Internal sources will include specific bank publications.

Methodology for gathering data

While gathering quantitative secondary data, needs for proper documentation cannot underestimate Barzun and Graff ()

. For this reason, the data with an in depth critique of the context and recheck of the source origins. Primary purpose for which the data was collected will also be considered.

Upon checking and ascertaining the data's credibility, any inconsistencies observed will be reconciled to make the data suitable for the study's purposes. The data will also be standardized for purposed of doing the analysis intended. The data will be collected by individuals from the banks and from journals. The exercise will entail collection of the data, comparing the data and tabulation of the acceptable data into spreadsheets and analysis programs. The accuracy of secondary data is dependent highly on the sources and the accuracy of the persons collecting it Barzun and Graff ()

Chapter 4

Identification of Statistical Analysis

The statistical analysis to be used to analyze the data will be regression; which will determine the existence of a relationship between the variables used in the study. Regression analysis checks for correlation between the variables collected. It also assess whether, the independent variables can explain changes in the dependent variable. For the purposes of the study, the dependent variable will be changes in the banking industry. The independent variables will include; the technological changes, regulations instituted and the economic changes (recessions and inflation).

Further to regression analysis comparison of the changes and trends in the banking industry will be checked. This will assist in giving an in depth understanding of the occurrences and also provide more insight as to the changes. Narrations to the trends will be given to provide an understanding to the changes made in the industry. Linkages of the trends will be drawn up to help draw a clearer picture on the changes. The observed trends will be weighted upon the regression result obtained to support to the statistics obtained.

The statistical findings of the study will be pitched against the literature reviewed to give a deeper bearing on the study's outcome. The reviewed literature on top of providing a confirmation to the data and analysis results, it helps to support arguments made based on the data findings Suri and Clarke ()

. The literature reviewed will be used to determined the results authenticity and add weight to arguments made.

Statistical significance of the result will also be checked using Student-T test. This test assesses the occurrence of relationship and probabilities associated with the distribution. To carry out the test, need to determine the distribution on the tabulated data and the measures of tendencies is required Suri and Clarke ()

. The test is based on the concurrencies and it determines how much the occurrence is likely given specified circumstances. Thought the test does not show causation it is useful to check statistical significance of the relationships and their distribution.

Hypothesis tests

Hypothesis test used in the study assess the likely occurrence of the relationships. It determines whether the independent variable of the study had a part to play on the dependent variable. For the purposes on the study, the null and alternative hypothesis were carried out.

These hypotheses were: Null hypotheses 1: -- the recession significantly contributed to the changes in the banking industry; Alternate hypothesis 1: -- the recession did not contribute to significantly to the changes in the banking industry; Null hypothesis 2 -- Regulations instituted by the government significantly influenced changes in the banking sector; Alternate Hypotheses 2 -- Regulations instituted by the government did not significantly influenced changes in the banking sector; Null hypothesis 3 -- Technological advancement influenced changes in the banking industry; Alternate hypothesis 3 -- Technological advancement did not influence changes in the banking industry. The hypotheses tests were checked using the regressions results and the statistical significance given by student T test. The literature reviewed was also used as a measure of confirmation.

Chapter 5

Discussion of Potential Inferences

Based on the literature reviewed and data analyzed, it can be stated that the banking industry is one of the dynamic industry. This attribute is further attained owing to the significant part the banking industry plays in the economy. Changes in the industry are inevitable specifically owing to the diversity of grounds covered under banking. The industry is core to development and certain changes are seen as necessary to its continued existence and contribution to economic well being of the economy. Some of the changes as seen in the analysis and literature are necessary to help in it control while others are necessitated by it dire need for survival.

Influences of Policy Regulations and Controls

As the banking industry continued to evolve, greater realization on the role it participates in as far as the economy goes and the edge it gives to stability and growth are realized. Even more importance the need for protection of the key stake holder is embraced. At this juncture, the policy institutions and governing bodies have developed policies to either control the operations in the industry or ensure their continued existence. The requirements for deposit are one of the main regulations to safe guard and also control. It is expected to be seen in the data analyzed that the regulation has brought about significant adjustment in the industry Boyd, Kwak and Smith ()

. There being a guarantee to customers that banks will not go bankrupt, customers have in turn relied on banks for more than just banking services. This will be seen to have contributed immensely to the growth of the sector. Further banks will be seen as more risk averse knowing that the regulation protects them. The reserve deposit is also touted to have contributed to the merging of financial institution in the industry Avery et al.()