Service Innovation Performance in Sierra Leone's Banking Sector: An Empirical Analysis

Abstract

This study investigates the innovation efficiency of Sierra Leone's banking sector, utilizing Data Envelopment Analysis (DEA) across 14 commercial banks representing 70% of the sector's total assets from 2017 to 2022. By analyzing existing financial and operational data, the study assesses performance variations and identifies disparities in innovation efficiency among these institutions. Findings indicate significant discrepancies in innovation efficiency levels, highlighting the critical role of strategic investment in technology and innovation for enhancing competitiveness and growth. This research contributes theoretically and practically to the literature on service innovation in banking in developing countries. It provides empirical evidence of the efficacy of DEA models in performance evaluation, offering benchmarks and strategic insights that could inform future policy and operational strategies. The study underscores the need for Sierra Leone banks to continually invest in innovative capabilities to maintain and enhance their competitive edge in a dynamic financial environment.