To investigate the state of IT governance in the South African banking sector - with particular reference to the Nedbank branch network at eThekwini.
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Information technology (IT) is at the core of banking operations; it is the fabric pervading everything. Banks cannot provide their products and services without relying on IT; they are completely dependent on IT. This dependence on IT is a source of significant risk because the non-availability of IT systems renders the business impotent to provide its product and services and to generate revenue. This gives rise to the paradoxical dilemma in that for banks to provide their products, services and to innovate, they are dependent on IT and this dependence is the source of significant risk. More so, banks are not merely dependent on IT for their daily operational needs but also reliant on IT to achieve their strategic goals and for overall advantageous competitive positioning and it is this irony that has banking executives, regulators and stakeholders concerned. It is well established that IT governance (ITG) is essential to the overall success of organisations. It provides a mechanism to manage the risks associated with IT as well as the ability to maximize and sustain organisational performance. Yet, given the axiomatic importance of ITG, we have seen failures of IT systems at large banking organisations resulting in huge financial losses and reputational damage; all attributed to failures in governance. More so disclosures related to these failures are opaque to non-existent; with the effectiveness of IT governance and strategic alignment being the least disclosed and transparent. The consequence of this is that we do not know the current state of IT governance nor its effectiveness at banking institutions due to the lack of transparency and disclosures in the reporting of IT failures resulting from a lapse in IT governance. Nor do we know how adequate the IT governance regime is. The externalities of banking institutions to the society at large warranted the need to understand the state of IT governance in the South African banking sector. This study investigates the state of IT governance in the South African banking sector with particular reference to the Nedbank branch network in eThekwini, a municipality in KwaZulu-Natal. Data was collected, from Nedbank branches included in the sample, using a self-administered questionnaire as the survey instrument with items developed to interrogate the state of strategic alignment and using this as a proxy for the maturity of IT governance. This approach is well established in the literature. The results of the study showed that the Nedbank branch managers in the eThekwini region of KwaZulu-Natal agreed or strongly agreed that there is significant strategic alignment at Nedbank and consequently a high degree or maturity of IT governance. The study, further, recommends that a larger study be conducted to include branches from all the provinces in South Africa and compare the results. The disparity in the gender of Nedbank branch managers was noted and it would be interesting to study whether this disparity contributed to the results and is recommended for future research.