ABSTRACT
This research work was carried out to determine the
Impact of Information and Communication Technology on Banking Industry and
First Bank of Nigeria Plc. (Iganmu Branch) has been used for the purpose of
this study. A survey of (200) Two Hundred respondent were used comprising all
the middle and the top management of First Bank of Nigeria Plc. (Iganmu
Branch).
Data were generated through primary and Secondary Sources.
The Primary Data were collected through the Administration of Questionnaire
from the respondent. The Secondary Data were generated from collection of
different related Textbooks, Journals and the internet. The analysis of the
questionnaire was done using simple percentage approach and the Karl Pearson
Chi - Square Statistic to test the hypothesis.
The result of the study revealed that innovative
technologies contribute to the survival of the banking industry. It is also
shown that ICT products have effect on customer services. There is also
difference in the banking sector with the use of ICT. The adoption of ICT has
improved customer services, facilitated accurate records, provides for home and
banki.ng services, ensures convenient business hour, prompt and fair attention
and enhances faster services. From the findings it is concluded that
information and communication technology improves banks image and leads to a
wide, faster and more efficient market. It has also make work easier and more
interesting, improves the competitive edge of banks, improves relationship with
customers and assists in solving basic operational and planning problems.
TABLE OF CONTENTS
CHAPTER ONE
1.0 Introduction
1.1 Statement of the Problem
1.2 Objectives of the Study
1.3 Research Questions
1.4 Research Hypothesis
1.5 Research Methodology
1.6 Significance of the Study
1.7 Limitation of the Study
1.8 Scope of the study
1.9 Definition of Terms
1.10 Brief History of First Bank of Nigeria
References
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction
2.1 Definition of Information and communication
Technology
2.2 The use of I C T in banking Industry
2.3 I C T product use in the banking Industry
2.4 Computer Generations
2.4.1 First Generation Computer
2.4.2 Second Generation Computer
2.4.3 Third Generation Computer
2.4.4 Fourth Generation Computer
2.4.5 Fifth Generation Computer
2.5 Definition of Computer
2.6 Types of Computer
2.6.1 Digital Computer
2.6.2 Analogue Computer
2.6.3 Hybrid Computer
2.7 Classification of Computer
2.7.1 A micro Computer
2.7.2 A Super Computer
2.7.3 A mini Computer
2.7.4 A mainframe Computer
2.8 Advantages of Computer
2.9 Disadvantages of Computer
2.10 Characteristics of Computer
2.11 The New trend in Computer
2.12 The Definition of Computer
2.12.1 Types of
Computer Network
2.12.2 Local Area
Network
2.12.3 Wide Area
Network
2.12.4 Classification
of Computer Network
2.12.5 The advantages of wide Area Network
2.13 The impact of ICT on Banking Industry
2.14 Products and services offered by the first
Bank of Nig. Plc.
2.15 The First Bank farm settlement scheme
2.15.1 Guaranteed
Fund Credit (GFC)
2.15.2 Multi-channels
Agricultural finance scheme
2.15.3 First Bank
Agricultural credit to schools (FACTS)
2.15.4 National Agro
Dealer Scheme (NADS) - plus
2.15.5 GSM 102
2.15.6 Commercial
Agriculture Credit Scheme
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
3.1 Restatement of Research Hypothesis
3.2 Research Method and Design
3.3 Sample size Determination
3.4 Data Collection Method
3.4.1 Primary Sources of Data
3.4.2 Secondary Sources of Data
3.5 Research Instruments
3.6 Validity and Reliability of Instrument
3.7 Data Collection Method
3.8 Method of Data Analysis
3.9 Limitations of the Methodology References
CHAPTER FOUR: PRESENTATION AND DATA ANALYSIS
4.1 Data Analysis and Interpretation
4.2 Analysis of Response Rate
4.3 Demographic Characteristics of
Respondents
4.4 Age Distribution
4.5 Marital Status of Respondents
4.6 Distribution by Qualification
4.7 Working Experience of the Respondents
4.8 Opinion of Bank Employees toward ICT
4.9 Testing of Hypothesis
4.9.1 Innovative Technology Contribute to the
survival Banking Industry
4.9.2 The difference in the efficiency of Nigeria
Banking Industry before and after the adoption of Information and Communication
Technology
4.9.3 Does Information and Communication Technology
have effect on Customer Services
CHAPTER
FIVE: SUMMARY, FINDING AND
RECOMMEDATION
5.1 Summary of findings
5.2 Recommendation
5.3 Conclusion
5.4 Suggestion for future Studies
References
CHAPTER ONE
BACKGROUND OF THE STUDY
1.0 INTRODUCTION
Today's business environment is very dynamic and
undergoes rapid changes as a result of technological innovation, increased
awareness and demands from customers. Business organizations, especially the
banking industry of the 21st century operates in a complex and competitive
conditions and highly by these changing conditions and highly unpredictable
economic climate. Information and communication Technology is at the centre of
this global change curve. Laudon and Laudon, (1991), contend that managers cannot
ignore information systems because they play a crucial role in contemporary
organization. They point out that the entire cash flow of most fortune 500
companies is linked to information system.
The application of information and communication
technology concepts, techniques, policies and implementation strategies to
banking services has become a subject of fundamental importance and
prerequisite for local and global competitiveness. ICT directly affects how
managers decide, how they plan and what products and services are offered in
the banking industry. It has continued to change the way banks and their
corporate relationships are organized worldwide and the variety of innovative
devices available to enhance the speed and quality of service delivery.
Harold and Jeff (1995), contend that financial service
providers should modify their traditional operating practices to remain viable
in 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.
Woherem (2000), claimed that only banks that overhaul the
whole of their payment and delivery systems and apply ICT to their operations
are likely to survive and prosper in the new millennium. He advices banks to
re-examine their service and delivery systems in order to properly position
them within the framework of the dictates of the dynamism of information and
communication technology. The banking industry in Nigeria has witnessed
tremendous changes linked with the developments in ICT over the years.
The quest for survival, global relevance, maintenance of
existing market share and sustainable development has made exploitation of the
many advantages of 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 operation’s and the resultant effects.
Information Technology (IT) IS the automation of processes, controls, and information
production using computers, Tele communications, software and ancillary
equipment such as automated teller machine and debit cards (khalifa 2000). It
is a term that generally covers the harnessing of electronic technology for
information needs of a business as all levels. Irechukwu (2000) lists some
banking services that have been revolutionized through the use of ICT as
including account opening, customer account mandate, and transaction processing
and recording. Information and communication technology has provided
self-service (automated customer service machines) from where prospective
customers can complete their account opening documents direct online. It
assists customers to validate their account numbers and receive instruction on
when and how to receive cheque books, credit and debit cards.
Several authors have conducted investigation on the
impact of ICT on the banking sector of the Nigeria economy. Agboola et al
(2002) discussed the dimensions in which automation in the banking industry
manifest in Nigeria.
They include:
(i) Bankers Automated clearing services: This
involves the use of Magnetic Ink character Reader (MICR) for cheque processing.
It capable of encoding, reading and sorting cheques.
(ii) Automated payment systems: Devices used here
include Automatic teller Machine (ATM), plastic cards and Electronic funds
Transfer.
(iii) Automated Delivery channels: These include
interactive television and the internet.
Agboola (2001) studied the impact of computer automation
on the banking services in Lagos and discovered that Electronic Banking has
tremendously improved the services of some banks to their customers in Lagos. The study was however restricted to
the commercial nerve centre of Nigeria and concentrated on only six banks. He
made a comparative analysis between the old and new generation banks and
discovered variation in the rate of adoption of the automated devices.
Aragba-Akpore (1998) wrote on the application of
information technology in Nigerian banks and pointed out that IT is becoming
the backbone of banks' devices regeneration in Nigeria. He cited the Diamond
Integrated Banking Services (DIBS) of Diamond Bank Limited and Electronic Smart
card Account (ESCA) of all states Bank Limited as efforts geared towards
creating sophistication in the banking sector. Ovia (2000) discovered that
banking in Nigeria has increasingly depended on the deployment of information
technology and that the IT budget for banking is by far larger than that of any
other industry in Nigeria. He contended that on-line system has facilitated
internet banking in Nigeria as evidenced in some of them launching websites. He
found also that banks now offer customers the flexibility of operating an
account in any branch irrespective of which branch the account is domiciled.
Woherem (1997), discovered that Nigeria banks since 1980s
have perform 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.
1.1 STATEMENT OF THE PROBLEM
The Banking industry all over the world helps to promote
economic growth and development. In recognition of this important role, a lot
of effort is being put into the development of the sector. One area of such
effort is the use of information and communication technology to improved
banking services with the advent of computers and its revolution in information
processing electronic banking has become the order of the day. Electronic
banking enhances the speed and quality of service delivery and has changed
their system of banking all over the world in Nigeria. Electronic banking is
still at the infancy stage. A great deal of effort and investments are still
required to make the country relevant to the present dispensation in the
industry. Many transactions are still being done manually, the waiting time for
customers is still relatively long and the quality of service is yet to be
satisfactory to some customers.
Since the banking sector has become dependent of
information and technology, the performance enhancement of the Nigeria banks
will be best achieved through its optimal utilization. This issue of absolute
necessary is the subject of this study. Moreover, the cost of acquiring this
technology vis-a-vis its benefit is on other problem.
1.2 OBJECTIVES OF THE STUDY
The focus of this study is to determine the impact of
information and communication technology on banking service in Nigeria. The
four objectives, which are to be achieved, are to:
(1) Determine
what constitutes information and communication technology.
(2) Examine the factors responsible for the use
of information and communication technology in the banking sector.
(3) Examine the effect of information and
communication technology on banking service.
(4) Examining the effects of information and
communication technology on recruitment and training staff.
1.3 RESEARCH QUESTIONS
1. How does innovative technologies
contribute to the survival of the banking industry operations?
2. What is the difference in the efficiency
of the Nigerian banking industry before and after the adoption of information
and communication technology?
3. To what extent does information and
communication technology products have effects on customer services?
1.4 RESEARCH
HYPOTHESES
Ho: Innovative technologies does not contribute
to the survival of the banking industry operations
Hi: Innovative technologies will contribute to
the survival of the banking industry operations
Ho: There is no significant difference in the
efficiency of the Nigerian banking industry before and after the adoption of
information and communication technology.
Hi: There is significant difference in the
efficiency of the Nigerian banking industry before and after the adoption of
information and communication technology.
Ho: Information and communication technology
products will have no effects on customer services.
Hi: Information and communication technology
products will have effects on customer services.
1.5 RESEARCH METHODOLOGY
The study take a look at the impact of information and
communication technology on business organization performance and chi square
method will be used to examine the data. The data will be collected from the
first Bank of Nigeria Plc.
1.6 SIGNIFICANCE OF THE STUDY
The study is expected to provide information on various
information and communication technology devices used by banks in Nigeria and
the extent of the usage. The result of this research is expected to increase
our knowledge of information and communication technology in the banking
industry in Nigeria. The findings of the study would be of benefit to
commercial banks and the customers alike.
1.7 LIMITATION OF THE STUDY
Information and communication technology is still relatively
in Nigeria. The increasing awareness of financial and educational institution
in the field is very recent. One major limitation is that most bank staff at
the management level are not easily accessible. When they are available, the
competition in the industry makes them unwilling to disseminate information on
the topic.
1.8 SCOPE/LIMITATION
THE STUDY
This study takes a look at the impact of information and
communication technology on business organization performance.
Effort will be made to source for data from First Bank of
Nigeria Plc (Iganmu Branch).
1.9 DEFINITION
OF TERMS
BANK: Oxford Dictionary defines bank as an establishment
for the custody of money which it pays out on customers order.
BANK: The Banking decree of 1969 define a banker as any
person who transaction banking business and whose business includes acceptance
of deposits withdraw able on demand.
COMMERCIAL BANK: A bank that accepts deposits and makes
consumer commercial and real estate loans (Saunders 2002)
COMPUTER: An electronic device that on receipt of an
appropriate input is capable of processing the input according to a set of
previously supplied instructions and making the result available if desired
(Essen, 2001) Britain J.T identified two major types of computer
(1) Computer Hardware's (2) Computer software's
COMPUTER HARDWARE: Physical equipment used for input
processing and output activities in an information system (Laudon & Laudon 2001)
COMPUTER SOFTWARE: Detailed pre-programmed instructions
that control and co-ordinate the work of computer hardware (Laudon and Laudon
2001).
DATA: Raw facts representing events occurring in
organizations or the physical enrolment before they have been organized and
arranged into from that people can understand and use (Laudon & Laudon 2001).
INFORMATION: Data that have been shaped into a form that
is meaningful and useful to human beings. (Laudon & Laudon 2001)
PROCESSING: The conversion, manipulation and analysis of
raw inputs into a form that is more meaningful to human (Laudon & Laudon 2001).
DATA BASE: A group of related files (Laudon & Laudon 2001).
NETWORK: A two or more computers linked together to share
date or resources such as printer.
COMMUNICATION TECHOLOGY: Physical devices and software
that links the various pieces of hardware and transfers data one physical
location to another. Computer and communication equipment can be connected in
networks for sharing voice, data, images sound or even video (O. BRIEN 1996).
STORAGE TECHNOLOGY: Physical media and software governing
the storage or organization of data for use in an information system e.g magnetic
or optical disk or tape (O. BRIEN 1996).
1.10 BRIEF HISTORY OF FIRST BANK OF NIGERIA PLC
First Bank of Nigeria is a Nigeria Bank and Financial
Services Firm. First Bank traces its ancestry back to the first major
institution founded in Nigeria.
The Current Chairman is Dr. Ayoola Oba Otudeko, OFR. The
Bank is the largest retail lender in the nation, while most banks gather funds
from consumers and loan it out to large corporations and multinationals, First
Bank has created a small market for some of its retail clients.
At the end of August 2006, the bank had assets totaling
650 Billion Naira or $5 Billion Dollars. The Bank was also the most highly
capitalized stock on the Nigeria Stock Exchange and had about 10 Billion
outstanding shares. It has a subsidiary in the United Kingdom, FBN Bank (UK),
which has a branch in Paris. The bank also has representative offices in South
Africa and China.
The company was named the best bank in Nigeria by Global
Finance Magazine in September 2006. The firm's auditors are Akintola Williams
Deloitte & Touche (Charted
Accountants).
The firm has solid short and long term rating from Fitch
and the Global Credit Rating Company Partly due to its low exposure to
non-performing loans. The firm's compliance with financial laws has also
strengthened with Economics Financial Crimes Commission giving it a strong
rating.
PRE - INDEPENDENCE
The Bank traces its history back to 1894 and the Bank of
British West Africa. The Bank originally served the British Shipping and
Trading Agencies in Nigeria.
The Founder, Alfred Lewis Jones, was a shipping magnate
who originally had a monopoly on importing silver currency into West Africa
through his Elder Dempster Shipping Company. According to its founder, without
a bank, economies were reduced to using barter and a wide variety of mediums of
exchange, leading to unsound practices. A bank could provide a secure home for
deposits and also a uniform medium of exchange. The bank primarily financed
foreign trade, but did little lending to indigenous Nigerians, who had little
to offer as collateral for loans.
POST-INDEPENDENCE
In 1957, Bank of British West Africa changed its name to
Bank of West Africa (BWA). After Nigeria independence in 1960, the bank began
to extend more credit to indigenous Nigeria. At the same time citizens began to
trust British Banks since there was an independent financial.
In June 2009, Stephen Olabisi Onabanjo was appointed
Group Managing Director (CEO), replacing Sanusi Lamido Sanusi, who had been
Governor of Central Bank of Nigeria. Onasanya was formerly Executive Director
of Banking Operations & Services.
Today, First Bank has 300 branches network in the
industry in Nigeria. In order to diversify into a wide range of banking
activities and services e.g. Corporate and Retail Banking, Insurance Brokerage,
Money Transfers etc. Control Mechanism and more citizens began to patronize the
new Bank of West Africa.
In 1965, Standard Bank acquired Bank of West Africa and
changed its acquisition's name to Standard Bank of West Africa.
In 1969, Standard Bank of West Africa incorporated its
Nigeria operations under the name Standard Bank of Nigeria. In 1971, Standard
Bank of Nigeria listed its shares on the Nigerian stock exchange and placed 13%
of its share capital with Nigeria investors. After the end of the Nigeria Civil
War, Nigeria's Military Government sought to increase local control of the
retail-banking sector. In response, now Standard Chartered Bank reduced its
stake in Standard Bank of Nigeria to 38%. Once it had lost majority control,
Standard Chartered wished to signal that it was no longer responsible for the
bank and the bank changed its name to First Bank of Nigeria in 1979. By then,
the bank had re-organized and had more Nigerian Director than ever.
In 1982, First Bank opened a branch in London, that in
2002 it covered a subsidiary, FBN Bank (UK). Its most recent international
expansion was the opening in 2004 of a representative office in Johannesburg,
South Africa. In 2005 it acquired MBC International bank Ltd and FBN (Merchant
Bankers) Ltd. Paribas and a group of Nigerian investors had founded MBC in 1982
as a Merchant; it had become a Commercial Bank in 2002.
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