.

BACKGROUND OF THE STUDY

The banking system plays a vital role in improving the national economy and represents the
backbone of
any national economy, therefore this research attempt to find the best approach to implement the
management information systems in Islamic banks and the remove the obstacles that prevent the
implementation of Management of Information Systems (MIS) in Libyan banks that include
Islamic
banking. The study selected North Africa Bank in Libya as the focus of this study.
North Africa Bank provide different types of Islamic banking such as (Islamic funding for small
projects,
finance commercial projects inside and outside Libya, granting loans for hire purchase contracts,
financing real-estates projects) and other financial banking that comply with Islamic regulations
and
Sharia law.
The current information services in North Africa Bank are not satisfactory to the management of
the bank
and to the clients as well. The senior management in this bank received many complaints from
Libyan
investors and beneficiaries in which they describe their inability to deal with bank and benefit
effectively
from the Islamic banking services offered by North Africa Bank, and they showed weak interest
to invest
due to poor quality of financial information and poor banking service.

(PDF) IMPLEMENTING MANAGEMENT INFORMATION.... Available from:

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FORMATION_SYSTEM_IN_LIBYAN_ISLAMIC_FINANCIAL_INSTITUTIONS [accessed
Aug 18 2018].

a. MIS in Banks
The measurement of success of any bank is by providing banking services with high quality
based on the
capacity of the bank to meet the requirements of the client to financial information and satisfy
these
requirements better than other competitors. The huge developments in information systems are
strategic
weapons in dealing with current conditions that are characterized by rapid changes and strong
competition
among financial institutions. Competition in the financial sector matters for a number of reasons.
The
degree of competition in the financial sector emphasizes on the efficiency of production of
financial
services, the quality of financial products and the degree of innovation (Manolis, & Winsor,
2000).
Management Information Systems (MIS) are not new to the banking sector. Since the early 80s,
banks
have been using this terminology to refer to the process of generating various reports and
analyses at the
Corporate/Head offices for their decision making for own use as well as for conveyance to
authorities in
charge of regulation.

MIS in the present context of high availability of voluminous data on electronic media at diverse
locations and on diverse platforms, has become more pertinent to banks’ decision-making
process, thanks
to the availability of new tools of technology such as data warehousing, data mining.
There are several definitions of the concept of MIS and may vary in expressions, but correlate in
the
connection and implications, actually there is no explicit agreement among most researchers and
experts
in the field of management science on one comprehensive definition for MIS.
A management information system (MIS) provides information that organizations need to
manage
themselves efficiently and effectively (Brien, 1999). Management information systems are
typically
computer systems used for managing five primary components: hardware, software, data
(information for
decision making), procedures (design, development and documentation), and people
(individuals, groups,
or organizations). Management information systems are distinct from other information systems,
in that
they are used to analyze and facilitate strategic and operational activities (Lucey, 2005)
Academically, the
term is commonly used to refer to the study of how individuals, groups, and organizations
evaluate,
design, implement, manage, and utilize systems to generate information to improve efficiency
and
effectiveness of decision making, including systems termed decision support systems, expert
systems, and
executive information systems. Management information systems (MIS), produce fixed,
regularly
scheduled reports based on data extracted and summarized from the firm’s underlying
transaction
processing systems to middle and operational level managers to identify and inform structured
and semi-
structured decision problems (Laudon , 2010).
Most management information systems specialize in particular commercial and industrial
sectors, aspects
of the enterprise, or management substructure.
.2 The importance of MIS in banks
Management Information Systems MIS is very significant and fundamental for efficient banking
service.
In many modern banks, there is a great role of Management Information system in providing
accurate
information related to customer requirement and data gathering and processing. MIS helps in
many ways
the Bank for the better result and customer satisfaction.
Most banks consider information technology (IT) as a route for service quality improvement,
while others
perceive it as a cost-effective expansion strategy (Kim and Davidson, 2004). There is a general
consensus
regarding the importance of understanding the patterns of IT adopted by bank customers
(Pikkarainen et
al, 2004), and several studies (Applegate, McFarlan and McKenney, 1999; Kim and Davidson,
2004)
emphasize that financial institutions such as banks are distinguished from other businesses in
their
reliance on IT. As early as the 1980s, Porter and Millar (1985) found that banking was one of the
most
information intensive sectors. Banks tend to use IT to improve the quality of their services,
increase
efficiency and customer satisfaction, and offer wider choices with lower costs to the customer. In
other
words, banks are using IT for competitive advantage.
The following are some of the benefits to financial institute that can be attained for different
types of
management information systems (Pant, 2007):
 Financial institutes are able to highlight their strengths and weaknesses due to the presence of
revenue reports, employees' performance record etc. The identification of these aspects can help
financial institutes to improve their business processes and operations.
 Giving an overall picture of the financial institute and acting as a communication and planning
tool
between the departments of the bank

 The availability of the customer data and feedback can help the financial institute to align their
business processes according to the needs of the clients. The effective management of customer
data
can also help the financial institute to perform direct marketing and promotion activities.
2.3 MIS in Libyan banks
Libya's centrally planned economy depends primarily upon revenues from the petroleum sector,
which
contributes practically all export earnings and over half of GDP. These oil revenues and a small
population give Libya one of the highest per capita GDPs in Africa. Since 2000, Libya has
recorded
favorable growth rates with an estimated 8.1% growth of GDP in 2006. The Government is in
the process
of preparing a financial sector reform program. Recent legislation setting corporate governance
standards
for financial institutions makes progress towards better management and greater operational
independence of public banks. Over the past two decades, the banking industry in Libya has
experienced
very significant development, which was the direct result of various factors, one of the most
important
being the implementation of new accounting information systems (AIS) and associated
technologies.
However, Libyan public banks still lack management structures supported by skills in critical
areas
like credit, investment, risk management and information services quality and control systems.
Moreover,
the majority of banks and financial institute in Libya did not apply the modern management
information
systems and are still depending on old management systems and long routine using paper works
to
organize the workflow the bank. The result was negative on clients’ perception and satisfaction
about
Libyan banks

. THE RESEARCH OBJECTIVE

1) To identify the main role of management information system MIS in banks and financial institutions.

2) To explore the factors those affect the quality of information produced by the Management

Information System MIS.

3) To identify the major obstacles those hinder the implementation of Management Information System

(MIS) in Islamic banks in general and North Africa Bank in particular

].