THE IMPACT OF IMPROVED INFORMATION TECHNOLOGY ON THE QUALITY OF BANKING SYSTEM (A CASE STUDY OF UBA PLC.)

ABSTRACT

The major purpose of this research work is based on the impact of improved information technology in the Nigerian banking system. Since banks are trying to use improved technology to enhance their products and services delivery, the study will carry out enthusiastic review of available/existing related issues in which the mean, nature and impact with suggested recommendations will be included, in order to drive an overview of the subject matter under consideration.

The research will also discover several important problems of e-banking and the perception of the public and its impact.

The recommendations offered by the research as solution to the observed problem are also included.

TABLE OF CONTENTS

CHAPTER ONE

1.1     INTRODUCTION/ BACKGROUND

1.2     STATEMENT OF RESEARCH PROBLEM

1.3     PURPOSE OF THE STUDY

1.4     SIGNIFICANCE OF THE STUDY

1.5     SCOPE AND LIMITATION OF THE STUDY

1.6     RESEARCH QUESTIONS

1.7     RESEARCH HYPOTHESIS

CHAPTER TWO

LITERATURE REVIEW

2.0.    HISTORICAL BACKGROUND

2.1    TECHNOLOGY AND TRENDS IN BANKING SERVICES

2.2     ELECTRONIC BANKING AND THE COMMON BANKING PRODUCTS

2.3    TELEPHONE AND PC BANKING PRODUCTS

2.4    THE CARD SYSTEM

2.5     THE AUTOMATED TELLER MACHINE (ATM)

2.6    CHEQUEING

2.7    CHECK AND BANK TRANSFERS

2.8     PAYMENT AND SETTLEMENT SYSTEMS USED IN ELECTRONIC BANKING

2.9     BANKING SECTOR RESFORMS IN NIGERIA

CHAPTER THREE

3.0     RESEARCH METHODOLOGY

3.1       RESEARCH DESIGN

3.2       RESEARCH POPULATION

3.3       SAMPLE SIZE AND SAMPLING TECHNIQUES       

3.4       INSTRUMENT FOR DATA COLLECTION

3.5       METHOD OF DATA ANALYSIS

3.6       ADMINISTRATION

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

4.1       INTRODUCTION

4.2       ANALYSIS OF RESULT REPRESENTED

4.3       ANALYSIS FROM THE QUESTIONNAIRE

4.5       IMPACT OF E-BANKING ON SOME SPECIFIC BANKING OPERATIONS

4.6       RELEVANCE/ACCEPTANCE OF E-BANKING ON BANKING OPERATIONS

4.7       PROBLEMS FACING ELECTRONIC BANKING SYSTEMS

4.8       CUSTOMERS PERCEPTION AND ACCEPTANCE OF E-BANKING

4.8     TESTING OF HYPOTHESIS

CHAPTER FIVE

5.0       SUMMARY, RECOMMENDATION AND CONCLUSION

5.1     SUMMARY

5.2       RECOMMENDATION

5.3     CONCLUSION

REFERENCES

APPENDIX

CHAPTER ONE

1.1   INTRODUCTION/ BACKGROUND

Recently, banks’ services have shifted from the old situation and lender of money to the high technology as intensive competition has thrown so many banks of the line.

In many countries, the financial system in general and the banking sector in particular, are passing through a period of serious and substantial structural changes. All these are made possible under the combined impact of internal competition, constant changes in statutory regulation, new information trading and delivery technology, global competition pressures, fast evolving strategic objectives of banks and their existing and potential customers.

It is imperative that all banks all over the world are currently facing formidable challenges and thus losing some of their past monopolized and comparative advantages, which hitherto had consolidated their position in the financial system. The delivery channels include telephone, personal computers, and electronic system like automated teller machine (ATM), first introduced in Nigeria by Societe Generale Bank with the popularity of PC’s easy access to the internet and World Wide Web (WWW), internet is increasingly used by banks as a channel of delivering their products and services to customers.

DEFINITION OF TERMS

Some of the terminologies used in this research work are defined below:

TRADITIONAL BANKING

Traditional banking is the banking system which makes use of tally numbers and when you have to spend almost the whole day in the bank to withdraw money.

During the era of traditional banking one has to travel long distance to access account balances and you move around with high volume of cash since banks then were not online.

Between 1982 and 1986, there was an unprecedented boom in the banking industry hence, many non-banking financial institutions and finance houses surfaced as a result of government deregulation policy. In line with this the managing director/chief executive of FSB International bank plc observed that since 1986 government has licensed more new banks than at any period in the nation’s financial history.

Between 1982 and 1992, a total of 79 new commercial and merchant banks, with about 1068 branches open for business. Thus at the end of 1992, the total number of bank branches increased from 1323 in 1985 to 2391 at the end of 1992. Sequel to the high level of competition that acme in the wake of rapid expansion in the industry, many banks introduced automation in order to attract customers and to service the high competition. It became glaring that with automation the old generation banks were given stiff competition even though some customers still kept to their services (the journal of banking and finance, 1998).

CURRENT TRENDS IN BANKING

Gradually, banks started introducing new technologies into their services; hence the old method of transaction has become obsolete. Babatunde Roger, the managing director of Gulf Bank in a news magazine once declared that the banking industry in the world is electronic driven now. That if you want to stay abreast of latest development and give the best of service, you have to invest in technology. The whole world is embracing the internet and ideally this is where the future is.

ELECTRONIC BANKING

In mid-1990, the world was literally introduced to several new words that begin with an “e” followed by a “hyphen”. The “e”- prefix which is the shortening of the word electronic, has spread to many areas of human enterprise as they emerge on the internet.

Today, the “e”- prefix appears to be embedded in almost all conventional key words, from e-stamp to e-mail and from tallying to e-banking. The process of electronic banking involves digitalized signature and passport into the computer for easier verification, alongside the automated operations.

DEFINITION:

Electronic banking is a computer program that ensures that services rendered to customers are exciting and efficient and hence allows for enhancement of productivity in the banking industry in this electronic age.

FEATURES OF ELECTRONIC BANKING

HOME BANKING:

This is simply banking through the computer or PC. It allows banking operations right from the individual personal computer without necessarily going to the bank. A customer can check his/her account; receive cleared checks and interest rate on deposits as well as transfer funds among accounts just with the personal computer and the telephone line.

CREDIT CARDS:

Electronic banking has equally led to the use of credit cards rather than carrying cash all around, thus reducing the risk of transferring cash from one place to another.

ELECTRONIC FUNDS TRANSFER:

With the internet around, funds are transferred here and there, all over the world in matter of seconds. Some Nigerian Banks have capitalized on this feature and it is helping them to remain afloat. This system has been domesticated locally enabling cash transfer from one city to another. The importance of customers confidence cannot be overemphasizes in modern banking. Modern day bankers are quite different in their outlook, sharper, well educated, well trained, superbly equipped, frank and possess more authority that enable them take decision faster and communicate with their customer without wasting time.

However, some customers are still reserved about transacting business with modern bankers as they are too smart and fast and as such can be dubious. The old customers are mostly used to the old system bankers and prefer to use them than risking their investment into transaction with modern banks.

This apprehension by customers is not helped by the series of the so called “Wonder Banks” who have offered marvelous rates for deposits from customers thereby finding it difficult to pay back when depositors demand for their money. Such wonder banks where eventually thrown out of business.

1.2   STATEMENT OF RESEARCH PROBLEM

Given the dynamic nature of banking system in Nigeria, this study tends to acknowledge the impact of improved information technology on the quality of banking system with a view to proving the new system being better or otherwise to the old.

1.3  PURPOSE OF THE STUDY

The study intends to find out the impact of electronic banking against traditional banking on banking operations in Nigeria.

To determine customer patronage in e-banking system in Nigeria.

1.4   SIGNIFICANCE OF THE STUDY

This study will contribute to knowledge in various ways. It will provide answers to factor militating against the implementation of e-banking in Nigeria.

It will also prove beyond reasonable doubt that success and growth are associated with implementation of e-banking.

1.5   SCOPE AND LIMITATION OF THE STUDY

The scope of the research will be centered on the period of introduction of information technology in banking system and its effect on banks generally.

The limiting factor will be the time given by the institutions authority for the study which would not allow for an in-depth coverage of all the variables, in line with the topic and collection of such variables. Also management strategies of banks are strictly confidential.

1.6   RESEARCH QUESTIONS

The following research questions are posed for the study and answers will provide a guide for the progress of the study.

1.           What is e-banking?

2.           How do bankers perceive e-banking technology?

3.           What are the problems militating against e-banking technology?

4.           What is the relevance of e-banking to the Nigerian banking industry?

5.           What do customers feel about e-banking?

1.7   RESEARCH HYPOTHESIS

The understated hypothesis will be tested in the study:

H₀ - There is a relationship between electronic banking and       improved service delivery in the Nigerian banking system.

H₁ - There is no relationship between electronic banking and     improved service delivery in the Nigerian banking system.

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