The Contributions Of Information Technology In The Operations Of Banks In Nigeria
1.1 Background to the Study
Information technology has already become the nervous system of banks the world wide. Banks all over the world realized that only those that overhaul the whole of their payment and services delivery systems and operations are likely to survive and prosper in this global world of technology. This is due to the pressure of globalization, consideration, deregulation and rapidly changing technology. In order to properly place themselves in favourably positions to be reckoned with in the new country, banks are making use of information technology (IT).
They realized that the banking industry requires more of electronic manipulation and shuffling of bits based money and other banking transaction instead of paper. In order words, paper-based transactions. Whether a bank would be successful or not, depends on the total to which it is investing in IT and using IT in an innovative manner. The reason for this is the fact that in the future, banking transactions would be conducted in a cyber space.
1.2 Statement of the Problem
Generally, the banking industry in Nigeria has witnessed an unprecedented growth in the past decade. Banks have expanded their branch networks at a very rapid rate and there are now far more employees, larger customers and staff databases, more robust computer system and generally high level of automation and computerization. In view of the expansions, the followings are enumerate by the researcher as the problems associated to the banks: –
- Lack of integrated computer data base in the Nigerian banks.
- Failure of banks to share ideas about new break though in IT world, they rather use it as a competitive advantage.
- Incessant downtimes experienced by most banks
- Too much reliance on external consultants for the maintenance of the systems and operations
1.3 Objective of the Study
This work is aimed at analyzing THE CONTRIBUTIONS OF INFORMATION TECHNOLOGY IN THE OPERATIONS OF BANKS IN NIGERIA to compete favorably with the counterparts across the world.
The research would serves as frontier of knowledge to the bank staff, customers, investors and management about future of banks in relations to the new information techniques which facilitates the applications of banks products and services.
1.4 The Scope of the Study
This research work focuses on the problems and prospects of IT in the banking sub-sector of the economy. With particular reference to First Bank of Nigeria Plc.
1.5 Significance of the Study
The banking industry as an industry that touches the life of everybody, if not as an employee, then as one that benefits from its services. On the other hands, IT refers to the new technology of gathering, storing, manipulating and transferring information.
This study will be of use to the followings: –
It shall enable banks management to know the variants of IT available that would increase the efficiency of online real time banking operations.
Similarly, the research shall be of importance to bank staff, is it will add to their knowledge and experience about the prospect of applying new IT for to increase their productivity.
It shall also be of importance to the existing and prospective shareholders by enabling them to know how well the bank is doing before investing their wealth in it.
Lastly, the research shall provide frontier for further research on the re-engineering of the industry with the and of IT.
1.6 Statement of Hypothesis
- H1: Application of IT is responsible for increase in productivity of FBN Plc.
- Ho: Application of IT is not responsible for increase in productivity of FBN Plc
- H1: Application of IT affects the profitability of the Bank
- Ho: Application of IT does not affects the profitability of the Bank
- H1: Information Technology application improve customers satisfaction of the Bank.
- Ho: Information Technology application does not improve customers satisfaction of the Bank.
1.7 Plan of the Study
This project work is divided into five chapters.
Chapter one deals with background to the study, statement of the problems, objective of the study, significance of the study, scope of the study and definition of terms.
Chapter two is dedicated to literature review. It covers the legislations of banks, origin of bank in Nigeria, problem of IT in Nigerian bank and prospects of IT in the future of banks in Nigeria.
Chapter three deals with the research methodology, it discusses sources of data, method of data collections research methods, techniques of data analysis and justification of the method use.
Chapter four looks into the history of first bank of Nigeria Plc. the chapter further presents, analyses and interprets data collected for the study.
Chapter five covers summary, conclusion, recommendation, limitation of the study and areas for further study.
1.8 Definitions of Terms
Is the study or use of electronic process for storing information and making it available.
It consists of data that have been retrieved, processed, interpreted and understood by the end user.
Is a computer system that allows millions of computer users around the world to exchange information.
Automated teller machines (ATM):
These are electronic terminals that allow banking almost anytime, to withdraw cash, make deposits or transfer cash/funds between accounts, of payment of utility bill and purchase of recharge cards.
Smart of Cards:
Small sized pieces of plastic devices (measuring 85.6m x 53.98 x 0.76mm) with embedded integrated circuit and used as payment instruments for numerous financial schemes.
Refers to trading electronically over electronic network through the network.
A communication between individual computer systems which otherwise maintain a degree of autonomy.
This allows the access of the bank’s web, it gives room for transfers from one account to another and access the states of customers accounts from their door step.
Summary, Conclusion and Recommendation
The banking industry in Nigeria as one of the most sensitive sector of Nigeria’s economy has undergoes stages of growth and development to be at what it is today. The development are not without problems or difficulties, but were eventually overcome with the joint efforts of the industry and government.
Notwithstanding these efforts, issue in application of information technology tend to pose yet another problem in the industry. This research work have been concerned about those problems and its prospect to address the situation. A general background into the study was presented to served as a foundation for the study. This is where the problem, objective, scope and significance of the study where all stated. The hypothesis and some definitions were all stated.
To give a theoretical background into the study, relevant literatures were reviewed as it relates to applications of recent information technology in financial institution. The development brought about a greater efficiency in the utilization of productive resources, enhanced the scope, pace and procedures of financial services.
Finally, an in-depth presentation and analysis were made as it relates to the case study. The historical background of the bank was considered. The data collected from the questionnaire administered and returned were presented and analysis. The hypothesis tested were all accepted. Based on the findings the researcher made conclusion and recommendation to the appropriate authority.
Based on the findings of the study, the following conclusions were drawn: –
- The application of information technology in the bank led a growth in the productivity. It also enhances the profitability of the bank.
- An opportunity exists for the bank to grow new products and services through e-business solutions.
- The application of IT in the bank increase the speed of operations and also the customers satisfaction.
- It was concluded that the application of IT gave an upsurge of financial malpractices, where bank and consumers suffered from the elicit acts of fraudsters whom capitalized on the new technology to perfect their act.
- It was further revealed that IT grows at a rapid pace, driving prices down and leading to a wide range of new applications in FBN Plc.
FBN Plc in an effort to meet the needs of customer 24/7 introduced a first contact. This allows customers enquire, requests, complaints, stopping payment of cheque and lots more from the comfort of their rooms via well phone.
It was revealed that benefit of application ICT in FBN Plc arise from it effective use.
In the light of the research findings, it is hoped that the following recommendation will greatly assist in the proper application of IT in the bank and the industry at large: –
- Awareness on the bank staff and the general public on the advantages on the application of IT should be creased by way of enlightenment. Campaign and through any productive means.
- Emphasis should be placed on the importance of training on existing infrastructures and equipment to enable the bank face up with the challenges posed by IT.
- Boost security and trust to enhance usage of ICT by business and customers. By implementing information security guidelines and by development a culture of security awareness.
- Foster a business environment for effective use of ICT measures should aim to reduce obstacles to organizational challenge, strengthen education and training system.
5.4 Limitation of the Study
According to Osuala (2001), research in Nigeria is characterized with the following problems; finance, illiteracy, secrecy, technology and statistics. In the course of this study not all the problems were faced by the researchers. However, the following were encountered.
The first limitation is finance, no research work can be successfully conducted without adequate finance. Hence within the available at the disposal of the researcher, the study was carried out, but much more could have been done if there were adequate finance.
Secondly, in gathering the data needed for the successful conduct of the study, the researcher was faced with series of problems, such as certain information being classified as “confidential”. As a result of this, the researcher could not lay his hands on some records which could have added value to the research.
Furthermore, as a result of the technical nature of the subject matter, the researcher could not get details of some of the IT applications as most of the information is generated from its Head office.
5.5 Areas for Further Study
There is need for further theoretical research. Such study should be carried out on application cards products as many new technologies in the industries era have created new opportunities for making banking operations easier.
Similar study should be undertaken on the role of regulatory/supervisory authorities in safeguarding the banks and the economy as a whole from the activities of fraudsters that clone cards and defraud the banks and customers.
The Contributions Of Information Technology In The Operations Of Banks In Nigeria
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