Investigating Factors Affecting Central Bank Information Systems Success: The Case of the Central Bank of Mongolia

Investigating Factors Affecting Central Bank Information Systems Success: The Case of the Central Bank of Mongolia

Andree E. Widjaja, Jengchung Victor Chen, Bayarjargal Gonchig
Copyright: © 2018 |Pages: 20
DOI: 10.4018/IJTHI.2018100103
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Abstract

This article investigates the factors affecting the success of central bank information systems (IS) in Mongolia. Drawing from the DeLone and McLean (2003) IS success models and Seddon and Kiew's (1997) path model, the factors that could potentially affect the success of the external and the internal IS of the central bank of Mongolia were empirically investigated. The data analysis was conducted using a quantitative method for the external IS and a mixed method for the internal IS. This article contributes to the academic literature by integrating DeLone and McLean's (2003) IS success model with Seddon and Kiew's (1997) path model and by validating the two aforementioned models within the context of central bank information systems in a developing country. This article has also important practical contributions, particularly for the central bank of Mongolia's authorities. The results, discussions, and implications of this study are elaborated in the paper.
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Introduction

Currently, information systems (ISs) are being widely applied to support various human activities. IS applications have been extensively studied by scholars, and these applications may range from interactive social networks systems (Foth, 2006), GSM short message systems (Suomi, Serkkola, & Mikkonen, 2007), online websites (McGill & Bax, 2007; Wogalter & Mayhorn, 2008), e-government (Hujran, Aloudat, & Altarawneh, 2013), to banking IS contexts (Williamson, Lichtenstein, Sullivan, & Schauder, 2006). However, it may be argued that one of the most salient applications of ISs is in the banking industry. This is primarily because the banking industry has been considered as the major driver supporting the economic and financial activities of society, and the banking industry is also one of the largest investors in ISs (Andoh-Baidoo, Villarreal, Liu, & Wuddah-Martey, 2010).

Banks may be divided into several types, including commercial banks (privately owned), public/government banks, and the central bank (government owned). Among these categories, the central bank is regarded as the most significant bank, particularly in many developing countries, in which it plays a vital role in providing macroeconomic development and reducing poverty (Gray, 2006). Since the central bank is one of the most important policy-making institutions, their functions and processes should be highly credible, effective, and efficient. Given the fact that banking is an information-intensive business (Shih & Fang, 2006), bankers should be aware of the significance of ISs to the growth and survival of their industry (Farhoomand & Huang, 2007). For that reason, IS success factors will play a key role in determining the overall success of the central bank.

Scholars have studied banking related ISs within the context of developing countries. A handful of such prior studies relied on the Technology Acceptance Model (TAM) to investigate online banking IS acceptance (Chandio, Irani, Zeki, Shah, & Shah, 2017) and mobile banking adoption (Sharma, Govindaluri, Al-Muharrami, & Tarhini, 2017). Another prior study developed a novel theoretical framework, the so called E-Banking Adoption Model (Thanh & Thi, 2014).The majority of previous studies, for example, Internet banking (Jagannathan, Balasubramanian, & Natarajan, 2016) and core banking systems (Borena & Negash, 2016) studies, have relied heavily on DeLone & McLean’s (2003) (D&M) IS success model as their main theoretical foundation (the model will be called the D&M IS success model in the remainder of this paper). However, to the best of our knowledge, there are few such prior studies within the context of central banking in developing countries.

This study therefore is aimed toward investigating central bank IS success in Mongolia. The Central bank of Mongolia (CBM) has been declared to be an independent central bank and an official monetary authority of Mongolia since 1991. Its main goal is to ensure the stability of the nation’s economy and finances. The Central bank of Mongolia represents the economy and finances of the entire nation through its monetary and foreign exchange policies, payments, settlement systems, and banking supervision throughout the country (the official CBM website can be accessed at https://www.mongolbank.mn/eng/).

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