The
research recommended that government should improve the electricity supply in
the country, it should support and loan money to local IT firms to foster
importation, lower tariff on importation of Information technology related
equipment and their agencies and regulatory bodies should upgrade their equipment
as well. The private sectors should invest into improving electricity and the
banks should continuously implement customer centered.
IT products and services of international standard.
TABLE OF CONTENTS
CHAPTER ONE
1.1 Background
Information
1.2 Statement of
the Research Problem
1.3 Objective of
the Study
1.4 Scope of the
Study
1.5 Limitation of
the Study
1.6 Significance
of the Study
CHAPTER
TWO: LITERATURE REVIEW
2.1 Introduction
2.2 Information
Technology Concept
2.3 Evolution of
information Technology
2.4 Development
of Information Technology in Banking Industry
2.5 Computer
Technology in Banking Industry
2.6 Information
Technology in Growing Nigerian Financial Market
2.7 Benefits of
Applying Information Technology
2.8 Challenges Facing the Application of
Information Technology
In Nigerian Banks
2.9 Historical
Background of united Bank for Africa (UBA) Plc
CHAPTER THREE:
RESEARCH METHODOLOGY
3.0 Introduction
3.1 Research
Design
3.2 Population
and Sample
3.3 Method of
Data Collection
3.4 Method of
Data Analysis
3.5 Hypothesis
of the Study
CHAPTER
FOUR:
DATA
PRESENTATION AND ANALYSIS
4.1 Introduction
4.2 Classification
and Analysis of Responses
CHAPTER
FIVE:
SUMMARY,
CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations
References
Questionnaire
CHAPTER ONE
1.1 BACKGROUND INFORMATION
Globalization has made the world one big family and we
all are part of it. In Nigeria, during
the pre-colonial era, there is always an interaction which starts mostly from
trading activity which enables the country to exchange what it has for what it
requires. Trading was carried out among the various tribes that made up the
present Nigeria nation through the primitive methods of trade by barter system
which is the exchange of goods for services. Likewise, objects like shells,
cowries, beads, etc were adopted as means of exchange. However, as society grew
more complex, these crude methods of exchange became insufficient. Coins and
paper notes were introduced and these made it easy for any amount of goods and
services to he acquired at the exchange of such coins and paper notes.
Information Technology (IT) is a man-made resource, embracing
principally the electronic technologies of computers and telecommunications
(voice, data, and video), and comprising of both electronic hardware and
computer software. The significance of IT in today's successful organization
cannot be underestimated. It plays a major role in the success of the
organization in today's highly competitive world by providing easy and fast
means of collecting, storing, retrieving, processing, transmitting and
distributing information. There can be various other factors that determine the
success of a firm, and a firm may use various strategies to pursue the path of
success. However, fast and easy of information through the use of IT is very
important to the firm because it influences all the other success factors, and
the competitive strategies cannot be practically implemented without its
support. Therefore, no business-firm that minimizes the use of IT can attain
the topmost position in its business. This is very much true in the case of
financial institutions, which include commercial banks.
Commercial banks have a major role in the economic
development of a country. They are the major financial intermediaries between
the sources of funds and the users of funds, and their business is heavily
dependent on information related to the fund market, which includes fund
suppliers, fund users, brokers; information related to the central bank, and
Ministry of Finance directives that they have to follow; and information
related to their competitors. Besides, their business also includes providing
financial information to their customers. Hence, commercial banks are highly
information intensive, and the use of IT by them, for easy and fast means of
information collection, storage, retrieval, processing, transmission, and
distribution of information, should have extensive contribution to their performance.
The evolution and recent developments in information and communication
technology has come to shape the way organizations operate and do business. The
emergence of the World Wide Web (i.e internet) and mobile telephony i.e.
telecommunication system is the driving force behind this development.
Consequently manual and traditional forms of doing business are suddenly
becoming outdated for the sophisticated technology that is based on automation
and interconnection of computers and other electronic devices vide electronic
communication. For instance, ledger books, paper invoice, printed materials and
business trips are being replaced with online billing and payments, elaborate
website with product information and real-time teleconferencing across
continent and time zones.
Information technology has radically changed how banking
is done all over the world, the volume and speed of banking transaction has
improved tremendously as a result of quantum growth in information technology
which has created business opportunities for banks. The positive impact of information
communication technology ICT on the global criteria, especially improved
revenue corroborates with the findings of Laudon, and Laudon, (1991) that
studied the entire cash flow of most fortune 500 companies and linked their
success to Information System. They concluded that Information Technology
directly affects how managers decide, how they plan and what products and services
are produced.
Harold and Jeff (1995) contend that financial service
providers should modify their traditional operating practices to remain viable
in the 1990s and the decades that follow. They claim that the most significant
shortcoming in the banking industry today is a wide spread failure on the part of senior management in banks to grasp
the importance of technology and incorporate it into their strategic plans
accordingly.
The quest for survival, global relevance, maintenance of
existing market share and sustainable development has made exploitation of the
many advantages of Information communication technology (ICT) through the use of
automated devices imperative in the industry. This study evaluates the response
of Nigerian banks to this new trend and examines the extent to which they have
adopted innovative technologies in their operations and the resultant effects.
Information Technology (IT) is the automation of
processes, controls, and information production using computers, telecommunications,
software and ancillary equipment such as automated teller machine and debit
cards.
It is a term
that generally covers the harnessing of electronic technology for the
information needs of a business at all levels.
Nigeria banks since 1980s have performed better in their
investment profile and use of ICT systems, than the rest of industrial sector
of the economy. An analysis of the study carried out by African Development
Consulting Group Ltd. (ADCG) on IT diffusion in Nigeria shows that banks have
invested more on IT, have more IT personnel, more installed base for PCs, LANs,
and WANs and a better linkage to the Internet than other sectors of the
Nigerian economy. The study, however pointed out that whilst most of the banks
in the west and other parts of the world have at least one PC per staff,
Nigerian banks are lagging seriously behind, with only a PC per capital ratio
of 0.18, Woherem (2000).
Information and Communication Technology (ICT) is the
modem handling of information- by electronic means which involves access to,
storage of, processing, transportation or transfer and delivery (Ige, 1995). It
refers to the convergence of the
computer and telecommunication system in a seamless flow of information around
the world. The fusion of computer and telecommunication and their uses in
obtaining relevant and purposeful management information system is the main
thrust of information technology. It is the acquisition, processing, storage
and dissemination of vocal, pictorial,
textual and numerical information by a micro-electronic based combination of
computing and telecommunications. The focus of ICT is on telecommunication and
computerization. It implies the convergence of computing and communication
(Telecommunication) technologies and its uses or application for global
Internet, Intranet, Extranet, World Wide Web (www), Visual reality,
Cyberspace-the New Digital Mentality and Culture (Uwaje, 2000). Communication
Technology comprises the physical devices and software that link (connect)
various computer hardware components and transfer data from one physical location
to another. Connectivity has facilitated the use of electronic delivery
channels. Distances and geographical locations are no longer barriers to
financial transactions.
Electronic fund transfer has also been variously designed
to case international transfer of money. In 1977, the international payment
system known as SWIFT (Society for Worldwide Inter-bank Financial
Telecommunication) became operational. SWIFT enables user banks to use electronic
mode to transfer international payments, statements and other banking messages.
In Nigeria, first Bank's Western Union, Monogram of United Bank for Africa
among others performs international funds transactions.
Information technology is the term which generally covers
the use of electronic technology for
the information needs of a business at all levels. It has made it possible for banks to:
1. Improve in service delivery with the
availability of online, real-time transactions.
2. Funds
transfer will be faster, more accurate and cheaper in charges.
3. Capacity to process large volume of
transactions which will require lower administrative cost.
4.
Reduction
of cash transactions with long term prospects of minimal cash handling.
Information technology application by bank IS centered on
customer's service.
Bank now responds to customers for balance on their
account, statement of account and account activity enquiries. The work of front
office teller (cashier) is at minimal (ATM) Banks are able to serve customers
outside the ban king hall 24 hours a
day, 7 days a week. Merchant customers
are able to make local and international business transactions online
real-time; they allow online payment via online, telephone or mobile payment
medium (Interswitch, etranzact etc), with this payment switch, the merchant
account holder's customers can make payment for goods and services without
necessarily seeing the business merchant in person.
Competition has become stiff; banks now do things in
different ways. Bank that has concentrated its activities in the old media can
invest in the new media by recognizing its activities especially if it finds
out, albeit painfully that it is losing ground to those competitors utilizing
sophisticated technology.
This is the reaction Bertelman (a leading German company)
early in year 2000 when it found out that its main internet partner (AOL)
decide to merge with Time Warner. Bertelsmann decided to float a Bertelsmann. Ecommerce
Group to sell all consumer product produced by Bertelsmannn. E-Group to
consumer via the internet. In the same vein, banks now merge and bigger banks
acquire smaller ones to serve better with wider coverage.
According to Odubanjo (2000), Nigeria banks are
responding albeit at a snail speed to
the information technology revolution enveloping the universe. The deregulation
of the banking sector in Nigeria in 1986 brought far-reaching transformation
through computerization and improved bank service delivery. The watershed in
the computerization of the Nigerian financial sector started with the changing
policy environment enumerated with Structural Adjustment Programme (SAP) 1986.
Competition especially with new product has indeed become
more intense and it had practically come to a point where commercial banks
continuously come up with something unique to sustain their increasingly
sophisticated customer's need or lose them.
Competition is "bound to be increasingly stiffer as
Gates (1999) had envisaged more changes in business which includes the banking
business in the next few years than it had experienced in the last 50 years.
The operational efficient of commercial bank will
eradicate most abnormal situation in the banking sector like long queue, delay
in transaction, safety and security and call for healthy competition among
banks to bring about bet.er satisfaction to customers.
l.2 STATEMENT
OF THE RESEARCH PROBLEM
The advent of information technology in banking
operations can be regarded as revolutionary. It has brought about noticeable
changes in the way and manner banks
are operated and in no small way improve customers' services. Yet some
observers and banks practitioners have complained of its negative effect on
customer service, bank fraud, money transfer to untraceable offshore accounts,
among other challenges. Yet how ICT is
operated in a typical market environment like Alaba International Market has
not been well explored. Hence this study tends to fill this gap by contributing
how ICT is operated in this area of the country’s economy.
1.3 OBJECTIVE
OF THE STUDY
The objective of the study is to examine how the adoption
of information technology affects the operations of commercial banks in Nigeria
such as:
1. How the introduction of information
technology has influenced bank performances as well as assessing logically whether
the adoption of information system has influence on the growth and development
in the banking sector.
2. Also to find out the reason why banks
nowadays have to abandon the former ways of operations to modem banking such as
e-banking and identify the problems arising from the operational system of the
commercial banks in Nigeria.
3. To investigate into the extent of
effectiveness and efficiency in banking sectors after the introduction of
information technology.
4. To examine the modes by which commercial
banks can improve on their service delivery in order to attract depositor's
funds.
5. To access how information technology
helps in the reduction of cost and benefit in increasing the revenue profit of
the bank.
6. To access how information technology has
assisted in the enhancement of globalization of Nigeria commercial banks.
7. To access how information technology has
affected the customer base of the banks.
8. And finally
to make recommendations based on findings.
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