IMPACT OF INFORMATION TECHNOLOGY ON BANKING INDUSTRY (A CASE STUDY OF FIRST BANK PLC)

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Product Code: 00001757

No of Pages: 80

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TABLE OF CONTENT

                                                         

CHAPTER ONE

 

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

1.2      STATEMENT OF PROBLEM:

1.3     OBJECTIVE OF STUDY:

1.4     SIGNIFICANCE OF THE STUDY

1.5      STATEMENT OF HYPOTHESIS:

1.6     HYPOTHESIS FORMULATION

1.7     SCOPE AND LIMITATION

1.8    RESEARCH QUESTIONS:

1.9     HISTORICAL BACKGROUND OF FIRST BANK PLC

1.9 DEFINITION OF TERMS:

REFERENCES

CHAPTER TWO

LITERATURE REVIEW

2.0     INTRODUCTION

2.1     HISTORICAL PERSPECTIVES OF INFORMATION

          TECHNOLOGY IN NIGERIA

2.2     SOME IMPORTANT MILESTONES IN COMPUTER USAGE

IN NIGERIA.

2.3  THE COMPUTER SERVICE COMPANIES IN NIGERIA

2.4     INFORMATION TECHNOLOGY POLICY IN BANKING

INDUSTRY.

2.5     PROBLEMS OF IT IN NIGERIA

2.6     A HOME COMPUTER INDUSTRY

2.7  INFORMATION TECHNOLOGY IN BANKING

2.8     INFORMATION TECHNOLOGY IN BANKING SUPERVISION

2.9     THE ROLE OF TECHNOLOGY INVESTMENT IN BANKING

INDUSTRY

REFERENCES

CHAPTER THREE

RESEARCH METHODOLOGY

3.0     INTRODUCTION

3.1     RESEARCH DESIGN

3.2     DATA COLLECTION

3.3     INSTRUMENTS OF STUDY

3.4      LIMITATION OF DATA COLLECTION

3.5     IDENTIFICATION POPULATION AND SAMPLE SIZE:

CHAPTER FOUR

4.0     DATA ANALYSIS/ PRESENTATIONS OF FINDINGS

4.1     INTRODUCTION

4.2     ANALYSIS OF GENERAL INFORMATION RELATING

          TO THE STUDY

4.3     HYPOTHESIS TESTING

CHAPTER FIVE

5.0     SUMMARY       OF       FINDINGS, RECOMMENDATIONS          AND CONCLUSION

5.1     RECOMMENDATION

5.2     CONCLUSIONS

REFERENCES

 

APPENDIX

QUESTIONNAIRE

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

 

1.0     INTRODUCTION

Information technology sophistication is probably the most significant event in the last century. The information age has virtually succeeded in turning the whole world, into a global village, the banking industry is not an exception in Nigeria. The industry has experienced one of the most drastic improvements and sophistications in the use of hi‑tech. As we all know, banks and financial institutions are the backbone of the economy of any country. The implementation of information technology and communication networking has brought about revolution in the functioning of the banks and the financial institutions.

 

For sound implementation of information technology and communication networking in banks and financial institutions, necessary legal support is a must. Legal issues relating to electronic transactions processing in banks are very many and there was a need to address them by amending some of the existing Acts and introduction of new ones. The necessary legislative support is essential to protect the interests of the banks branches in several areas relating to electronic banking and payment system. This specification is required to establish the credibility of electronic clearing system and the electronic funds transfer scheme based on the electronic message transfer.

 

1.1     BACKGROUND OF THE STUDY

Information Technology is one of the fundamentals to the survival of any economy. It is essential and performs several functions, which cover all sectors of the state. This study explores all areas that can essentially lead to growth and development. For the purpose of our study, we dwell more on the impact of technology in banking industry and how it has enhanced the swift functional operation and accuracy in the performance of duty.

 

1.2      STATEMENT OF PROBLEM:

This research is used to find out the various problems that are encountered with information technology and its impact on the banking industry. It also provides necessary method that could be used in solving all these problems. The problems considered in this project are as follows:

1.       The problems of the data processing department.

2.       The problem of inadequate staffing or lack of qualified personnel in the country.

3.       The problem of infrastructural deficiencies.

4.       Electric power supply.

5.       Whether government policies and central banks regulation disturbs.

6.       The effectiveness of government policies on the IT sector.

7.       Whether government provides securities for the IT.

 

1.3     OBJECTIVE OF STUDY:

The objective of this project is to undertake a study on the impact of information technology on the banking sector. It is also aimed at increasing knowledge in understanding the concept, growth and development of the IT on Nigeria banking industry. Considerable effort is made to explain the possible steps that can be taken to improve the quality of services being rendered by the IT companies. This project also examines the historical background of information technology industry in Nigeria.

 

1.4     SIGNIFICANCE OF THE STUDY

This project has an overwhelming interest in the position of technology innovation in the financial services sector. In Nigeria, technology and its impact have been key areas of focus at the Federal level in recent years. This technological innovation affects not just banking, financial services and regulatory policy, but also the direction of the economy and its capacity for continued growth. I was encouraged by a notable staff of First Bank of Nigeria Pic to write on this project at this


Despite this, the project intends to educate the numerous customers, government and corporate organizations on the various services provided by different IT firms in Nigeria and how to contact them for their benefits.

 

It also establishes the claim by the banking sector on their availability and restriction of the knowledge of IT to upcoming professionals and administrators in their respective fields.

 

1.5      STATEMENT OF HYPOTHESIS:

Hypothesis is an idea put forward to establish an observation. This project tests hypothesis to establish services rendered to their customer It will test Null and Alternative hypothesis. The hypothesis will be tested as follows:

1.       To see if the services rendered by computer industry is adequate and sufficient for their customers

2.       Whether the computer industries are over regulated by the activities

          of government in rendering their services or not.

3.       Whether IT industry contributed to the growth and development of the banking sector through its numerous services.

 

1.6     HYPOTHESIS FORMULATION

In order to carry out this project some working hypothesis were developed.

These hypotheses are ideas, beliefs etc put forward by the researcher for the

purposes of helping and guiding towards achieving a reasonable conclusion.

For this project, the working hypotheses are: ‑

 

 

Alternative Hypothesis (Ha)

1.       Banking industry contributes to the economic development of the nation.

2.       Information technology improves banking services to bank customers.

 

Null Hypothesis (Ho)

(1).    Banking industry does not contribute to the economic development of the nation.

(2).    Information technology does not improve banking services to bank

customers.

 

1.7     SCOPE AND LIMITATION

The scope of this project is to analyze the impact of information technology on the banking sector, using First Bank Plc as a case study. It also appraises the numerous functions performed by the IT industry, this revolves around the head of  office  of First Bank Plc.

 

The basic day‑to‑day operations of  First  Bank Nig Plc form the core of this paper while an appraisal of the effectiveness of its operations on the Nigerian economy is examined.

Like most projects, financial and time constraints constitute the main limitations of this paper. Nevertheless, the objectives of the project is not compromised.

 

1.8    RESEARCH QUESTIONS:

1.       Has there been any significant improvement in the perception of the

          general public on information technology?

2.       How effective has the information technology in the banking sector

          affected the growth and development of Nigerian economy?

3.       Is there a wide understanding of the basic knowledge of information

          technology of the banking sector in Nigeria?

4.       Are there control measures in the information technology system?

          Are they justified? Are they effective?

5.       Are there enough financial products in the banking sector to satisfy all types of Customers while all the same time meeting the banking

          requirements?

 

1.9     HISTORICAL BACKGROUND OF FIRST BANK PLC

First Bank of Nigeria Plc, for over a century, has distinguished itself as a leading banking institution and a major contributor to the economic advancement and development of Nigeria.

 

Founded in 1894 by a shipping magnate from Liverpool, Sir Alfred Jones, the Bank commenced small operation in the office of Elder Dempster & Company in Lagos.

 

It was incorporated as a limited liability company on March 31, 1894, with head office in Liverpool. It started business under the corporate name of the Bank for British West Africa (BBWA) with a paid‑up capital of 12,000 pounds sterling, after absorbing its predecessor, the African Banking Corporation, which was established earlier in 1892. This signalled the pre‑eminent position, which the bank was to enjoy in the banking industry in West Africa. In the early years of operation, the bank recorded an impressive growth and worked closely with the colonial Government in performing the traditional functions of a Central Bank, such as issue of specie in the West African sub‑region.

 

To justify its West Africa coverage, a branch was opened in Accra, Gold Coast (now Ghana) in 1896 and another in Freetown, Sierra Leone in 1898. These marked the genesis of the bank's international banking operations. The second branch of the bank in Nigeria was opened in calabar in 1900 and two years later, services were extended to Northern Nigeria. With 364 branches as at 2005 spread throughout the Federation, the Bank maintains the largest branch network in the industry in Nigeria operations. The second branch of the bank in Nigeria was opened in Calabar in 1900 and two years later. services were extended to Northern Nigeria. With 364 branches as at 2005 spread throughout the Federation, the Bank maintains the largest branch network in the industry in Nigeria.

 

To satisfy the needs of his customers, First bank has diversified into a wide range of banking activities and services. These include Corporate and Retail Banking, Registrarship,  Trusteeship and Insurance Brokerage. In addition, as part of its strategy of progressive internationalization, in November 2002, the bank became the first financial institution in Nigeria to establish a subsidiary bank in the UK.

 

Over the years, the bank has experienced phenomenal growth. With a share capital of #55.6 million in 1980, the Banks share capital as grown up to #813 million as at 2001. The bank's total asset base was #212.0 billion while its deposit base stood at #148.3 billion as at march 2001. Also, the banks market capitalization stood at #41.55 billion i.e. #22.5k/  share as at 31st March 2001.

 

To reposition and to take advantage of opportunities in the changing environment, the Bank embarked on several restructuring initiatives. In 1957, it changed its name from Bank of British West Africa to Bank of project to revolutionize its operations in line with the dynamics of the environment.

 

FBN got listed on the Nigeria Stock Exchange  (NSE) in March 1971 and has won the NSE President's Merit Award nine times for the best financial report in the banking sector.

 

The Bank has continued to be a leader in financing long‑term development of the economy, which was demonstrated in 1947 when the first long‑term loan was advanced to the then colonial government to demonstrate its commitment to its customers and the development of the Nigerian economy, the Bank has since broadened its loan and the credit portfolios to various sectors of the economy.

 

The bank has improved tremendously judging from a number of parameters including number of branches, growth in deposit base, size of loans and advances.

 

Furthermore, its track record of profitability and reliability in sound banking has continually placed the Bank in its leadership position. In line with its mission statement to "remain true to our name by providing the best financial services possible" the Bank will consistently transform itself as it forges ahead in its second century of qualitative banking to the nation.

 

First Bank Plc is conscious of shareholders rights to full disclosure of information on developments in the Bank. It therefore, during the year they Furthermore, its track record of profitability and reliability in sound banking has continually placed the Bank in its leadership position.

 

In line with its mission statement to "remain true to our name by providing the best financial services possible" the Bank will consistently transform itself as it forges ahead in its second century of qualitative banking to the nation.

 

First Bank Plc is conscious of shareholders rights to full disclosure of information on developments in the Bank. It therefore, during the year they made conscientious efforts to inform all shareholders of major developments as they occurred. In addition to the mandatory statements sent through the Nigerian Stock Exchange on a quarterly, half yearly and yearly basis through financials, the Bank, during the year made extra efforts at increasing process transparency through organizing stakeholders' forum and press release. It also maintains an interactive website: www.firstbanknigeria.com, for access by stakeholders and the public. All these are efforts to share with the public, the broad direction and strategies of the Bank as well as to afford them opportunities of making inputs to the running of the organization.

 

The Bank, with its associates and subsidiaries has an overwhelming presence in the financial market of the economy. Apart from traditional banking operations, the group covers other aspects of the financial sector like investment banking, registrarship, insurance trusteeship, mortgages, etc.

The towering status of the Bank and its subsidiaries and associates make it the undisputed leader in the Nigerian financial services industry.

The First Bank subsidiaries are:

First Registrars Nigeria Limited

FBN Bank (UK) Limited

First Trustees Nigeria Limited

FBN (Merchant Bankers) Limited

First Trustees Nigeria Limited

FBN Insurance Brokers Limited

First Funds Limited

The FBN Mortgages Limited

Associates & Affiliates.

 

The Bank has an associate company (Kakawa Discount House) and four affiliate companies as at March 31, 2005. The affiliates are: Banque Internationale du Benin, ValuCard, Afrexim. Bank and Nigerian Interbank Settlement System. Most of the companies are performing remarkably well and making expected contribution to the Banks bottomline. Banque Internationale du Benin is being recapitalised and repositioned to ensure improved performance.

 

1.9 DEFINITION OF TERMS:

·              Information Technology: Information technology is hardware, software and communication required for information systems development and operations.

·              Information System: This refers to a system of information or more, which is needed by an organization in order to fulfill its functions and attain its end.

·              Data: The raw information we send into the computer for processing. Data is made up of letters, numbers and symbol.

·              Information: This refers to data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective actions of decisions.

·              Data processing: It is a process of converting data into information.

·              Electronic fund transfer: This is described, as a payment system in which the processing and communication necessary to effect exchange, processing and communication necessary for the production and distribution of services incidental or related to economic exchange, are dependent wholly or in larger part on the use of electronics.

·              Spreadsheet applications: These are widely used by accountants due to ease of use, powerful computational facilities and the wide range of applications to which they can be applied. Below are some of the financial uses that spreadsheet could be put to use in: cash flows, budgetary planning, investment appraisal, cost/ volume/profit analysis, budgetary control, financial statement analysis, consolidations, foreign currency conversion, tax planning.

·              Security system: This refers to computer hardware, software and procedure that are reasonable for securing unauthorized access and misuse; it also provides reasonable level of reliability and correct operation suited to perform intended functions.

·              Electronic commerce: This involves the use of alternatives to paper base methods of communication and storage of information, to facilitate electronic filling of documents with the government agencies.

·              Computer database: This means a representation of information, knowledge, facts, concepts or instructions in text, image, audio, video that are being prepared in a formalized manner or have been produced by a computer system or computer network.

·              Computer Contaminant: Refers to any set of computer instructions that are designed to modify, destroy, record, and transmit a data or program residing within a computer system or computer network.

·              Computer Virus: This means any computer instructions, information, data or programme that destroys, damages, degrades or adversely affects the performance of a computer resource or attaches itself to another the performance of a computer resource or attaches itself to another computer resource and operates when a programme, data or instructions is executed or some other event takes place in that computer resource.

·         System Design and Development: It refers to the designing and implementation of the new system to be carried out by the system analyst


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