The Impact of Information Technology on Enhancing the Competitive Advantage of Banks: A Field Study on the Libyan Islamic Bank – Tripoli

Abstract

This study aimed to examine the impact of Information Technology (IT) on enhancing competitive advantage at the Libyan Islamic Bank – Tripoli. Information technology was examined through four dimensions: hardware, software, networks, and human resources, while competitive advantage was addressed through cost, quality, flexibility, and innovation. The study adopted a descriptive-analytical approach and was based on a sample of 65 respondents. Statistical techniques included means, standard deviations, Pearson correlation, and simple and multiple regression analyses.

The findings revealed a high level of information technology availability at the bank, with an overall mean of 4.22 and a relative importance of 80.5%. Software ranked first, followed by hardware, networks, and human resources. The findings also indicated high levels of competitive advantage dimensions, particularly quality, flexibility, and cost.

Pearson correlation analysis demonstrated statistically significant positive relationships between all information technology dimensions and competitive advantage. Human resources showed the strongest correlation (r = 0.733), followed by hardware (r = 0.688), networks (r = 0.662), and software (r = 0.658). Simple regression analysis further indicated that each IT dimension had a statistically significant effect on competitive advantage when examined separately.

However, multiple regression analysis revealed that only human resources and hardware maintained statistically significant direct effects on competitive advantage when all IT dimensions were entered simultaneously, whereas software and networks did not retain independent significant effects. The best explanatory model consisted of human resources and hardware, jointly explaining 68.1% of the variance in competitive advantage. Accordingly, the main hypothesis was partially accepted.

Based on these findings, the study recommends continuous development of the bank’s technological infrastructure, modernization of hardware and systems, greater investment in employee training and technical competencies, improved utilization of software and networks, and further expansion of digital banking services to strengthen the bank’s sustainable competitive advantage.