Effect Of Computer Usage In Banking In United Bank For West African Plc

Project and Seminar Topics with material for Banking and Finance

Effect Of Computer Usage In Banking In United Bank For West African Plc


The impact of computer to Nigeria commercial banks especially cannot be over emphasized. Many banks have realized the used of the computer as a means of improving their chequeing transaction and of keeping necessary data on customers for loans advances and other services. These obvious advantages notwithstanding, must banks have not imbibe the computer culture. For the purpose of this study, this research sought to assess the effect of computer usage in the Nigerian banking sector using a case study of the United Bank for Africa (UBA), Enugu state. This study therefore showed the actual contribution of computers to the banking industry and the problem faced by banks, which has not gone into computerization. A good number of banks in Nigeria are computerized and consequently time wastage in banks are reduced, there is increase in banks deposit, there is better storage of information and greater efficiency in banks deposit, there is better storage of information and greater efficiency in banks services, there is reduced workload in banks. The researcher used both primary and secondary data. The primary sources will include the use of questionnaires while the secondary data will include text books, article and other important write-up in various journals. It is expected that the implementation of the findings and recommendations in this research work will improve the services rendered by banks to their various customers by increasing usage of computerized services personnel training and encouraged computer. ITC programmes to boost the activities and operations of banks aimed at enhancing and optimizing services to the customers.

Table of Content

Chapter One

1.0 Introduction

  • 1.1 Background to the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Question
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisation of the Study

Chapter Two

2.0 Literature Review

  • 2.1 Conceptual Framework
  • 2.2 Overview of Accounting
  • 2.2.1 Early Accounting
  • 2.2.2 Double Entry System
  • 2.2.3 Corporate Organization
  • 2.2.4 Accounting Future
  • 2.3 Evolution of Computer
  • 2.4 The Evolution of Commercial Banks and its Operations in Nigeria
  • 2.4.1 Historical Development of Nigeria Banking System
  • 2.4.2 Banking In Nigeria
  • 2.5 The Impact of ICT In Nigeria’s Banking Industry
  • 2.5.1 GSM Banking
  • 2.5.2 Automated Teller Machines (ATMs)
  • 2.5.3 Online Banking
  • 2.5.4 Electronic Mail
  • 2.5.5 Bankers Automated Clearing Services
  • 2.5.6 Fund Transfer
  • 2.6 The Application of Computer to Banking Operation
  • 2.7 Adoption of ICT In United Bank for Africa (UBA) Plc.
  • 2.8 Hindrance to Computer/IT Application In Nigerian Commercial Banks
  • 2.9 Theoretical Framework
  • 2.9.1 Technology Acceptance Model

Chapter Three

3.0 Research Methodology

  • 3.1 Research Design
  • 3.2 Population
  • 3.3 Sample and Sampling Technique
  • 3.4 Instrument for Data Collection
  • 3.5 Validity of the Instrument
  • 3.6 Reliability of the Instrument
  • 3.7 Method of Data Collection
  • 3.8 Data Analysis

Chapter Four

4.0 Results and Discussion

  • 4.1 Result
  • 4.2 Questionnaire for Bank Officials
  • 4.3 Questionnaire for Small Scale Industries

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • Appendix

Chapter One

1.0 Introduction

1.1 Background to the Study

Financial accounting can be defined as the process of collecting, recording, presently and analyzing and interpreting financial information for the users of financial statement [Robert, O. Igben 2007] Accounting is the language of modern business, a tool for business decision making. It is used by people associated with business, whether they are managers, owners, investors, bankers, lawyers, and accountant. It provides financial information to people inside and outside the organization who need and are authorized to have such information. A system like a computer in the most general sense of the word is a group of interrelated components that processed inputs into outputs to meet some objectives.

An accounting information system is a group of components that processes raw data into financial information to meet the purpose of these internal and external users, however, when we talk of accounting information system we invariably refer to computer assisted techniques in accounting [Warren, 1997].

The objective of financial information is to provide useful information for making economic decision. The process of recording, aggregating and summarizing the effects of historical transactions in financial statements under a specified set of rules constitutes the bulk of financial accounting. Organizations such as commercial banks need the accounting information in carrying out their operations and transaction. Fortunately, the electronic computer as an electronic device for storing and analyzing information fed into it, for calculate or for controlling machinery automatically could be used to perform commercial banking products and operations and also aids managerial decision makers in planning and controlling of various business activities [Warren, Reeve, Fess, 1997].

Accounting information poses certain qualities necessary to satisfy user’s need. Two basic qualities for general purpose accounting reports supplied to external user are:

  • Relevance
  • Reliability

It is important to realize that for the information to be of any use to management or external users, it has to be targeted at a specific decision. It is in this sense that the information may said to be relevant or pertinent to the decision. Relevance of accounting information is judged in relation to the user’s situation. Also, accounting information signifies faithfulness, constancy and trustworthiness. As stated by Mandadur R. and Maurice H in their book Accounting Information System [1976] page 9, one way of ensuring reliability in accounting information is to ensure adherence to accounting principles. Also R. W. Hilton and S. J. Swearing in perception of initial uncertainty as a detriment of information value [pg. 109-119] stipulated that ‘the value of any accounting information depends on its accuracy and its ability to reduce uncertainty”.

Accounting information is useful in all types of organizations especially the banking industry where the survival and growth of such organization depends to a large extent, on supplying effective accounting information to internal and external users. The size of an organization determines the appropriate volume and complexity of accounting information for managerial decisions in such areas as purchasing, protection, hiring, borrowing and investment. The computer was initially introduced into most corporate organizations to satisfy the efficiency concerns of processing vast amounts of accounting transaction data at the operational control level. It has proved so effective in the role that virtually no sizable organization can survive competitive pressures without using this tool called the computer. Throughout the 1970’s computer technology limited the production of accounting information to predetermined formats. The introduction of micro computers in the early 1980’s brought about rapid rise in the computer at all levels of management and contributed to the development of a new class of programs aimed specifically at meeting the needs of strategic management. Donald H. Sanders in his book “Computer in Society” assets that “that scope of today’s accounting information system is influenced by the rapid growth of information processing technology and increased complexity of business in general.

Thus, the accounting information of the foreseeable future must establish and maintain the capability for complex manipulation of vast volume of financial and non-financial data with higher speed and greater accuracy.
The enhanced power of data handing in a complex environment has altered the character of accounting system. The accounting system of the past was a little more than book-keeping which relied on electronic devices of limited capability and required a great deal of human involvement as almost every step of the process. Such an accounting information system was not able to cope with the dynamic challenged of business complexities. Its products were unable to satisfy user’s needs for planning and controlling information. The primary concern of the accounting information system was to manipulate historical data, satisfy audit needs, produce after that fact financial statement and provide preformatted reports for managerial use.

Today’s accounting information system deals with future events as well as historical data. It must produce projected financial statements as well as historical ones. It must support unanticipated managerial needs for financial information for decision making, in addition to satisfying the needs of auditors. It must develop new and efficient controls, reporting techniques and audits trials in response to the trends towards increasing public access to accounting data reports. For instance, consider the monthly statements provided to bank customers. These must incorporate detailed information about numbers transaction [ranging from cash and cheques deposit, interest charge, tax charges and withdrawal] performed in a variety of ways from a number of locations. A bank cannot survive today without providing this level of services, yet the capability to do so did not exist a few year ago.
However, the advent of the computer has some of its attendant problems. These are training of personnel and finance costs.

The evolution of E-banking dates back to 1986 when the banking sector in Nigeria was deregulated (stamolilis, 2001). The result of this deregulation brought far-reaching transformation through computerization and improved bank service delivery. Competition with new products became keen within the system while customer sophistication posed a challenge for them, hence the reengineering of processing techniques of business activities encourage the automation of financial services especially among new generation of commercial and merchant banks.

In effect, the emergence of a crop of new generation banks following the liberalization of the bank licensing motivated the introduction of high technology in the Nigeria banking system.

These new banks discovered that the evolving technology at the global level could be applied to greater advantage in the Nigerian Financial Landscape (L.O. UgwuEtal 2000). That indeed paid off for some of them as customers, who ordinarily would have found it almost impossible to leave the banks they were already familiar with for a new one that way yet to find feet, quickly noticed the difference in the available products and service delivery systems of the two categories of banks (old and new generation). The customer without hesitation opted to pay for the extra values that would satisfy the extra-personalize product services and the attendant personalized marketing.

Information and communication technology has become global tool for banking industry to reach global markets. The use of information and communication technology in banks has become a global phenomenon and every bank must be ICT compliance in other to survive in global competitive environment. The introduction of information and communication technology has change manual and traditional forms of doing business and it is being replaced by the sophisticated technology that is based on automation and interconnection of computer and other electronic devices. 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 zones (Ojokuku and Sajuyigbe, 2012). Ovia (2001) said that the banking industry has moved into an era of menu-driven ultra-robust specialized software programme called banking application and these applications can carry out virtually all banking functions relying heavily on information collection, storage, transfer and processing. Woherem and Adeogri (2000) claimed that only banks that over have the whole of their payment and delivery systems and apply information communication technology (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. Abubakar and Rasmarini (2012) observed that information and communication technology has become the heart of banking sector, which is the heart of every robust economy. The advancement in technology has played and important role in improving services delivery standards in the banking industry. In its simplest form, Automated Teller machines (ATMs) and deposit machines now allows consumer carry out banking transaction beyond banking hours. With online banking individuals can check their account balances and make payments without having to go to the bank hall. This is gradually creating a cashless society where consumers no longer have to pay for all their purchases with hard cash (Josiah and Nancy, 2012).

The bank reforms in Nigeria are pursued with a view to make the sector realize its objectives in advancing the economy (CBN 2006) as cited in Osabuohien, (2008). It is expected that the impact of these reforms will be enhanced with the use of information and communication technology (ICT) because it will create some form of competitive advantage and improved banking services through accuracy and efficiency in their transaction. In conclusion, the computer contributes to increased output, by increasing efficiency and its ability to perform predetermined tasks, faster and more accurately.

1.2 Statement of the Problem

The banking industry is one of the major contributors to the economic development of any nation in the world. However, the existing banking facilities in the country at this time cannot effectively cope with the requirements of modern banking”. The above stated problems have further resulted to sub- problems of slow banking operation, slow storage and retrieval system, time wastage and reduced customers’ patronage. Businesses need to continuously find better and fast ways to adapt to the competitive market place in order to compete in today’s high technology and fast pace environment. Learning organizations provide a framework that encourages finding better and fast ways to adapt in today’s high technology and fast paced world by:

  1. Looking at the whole pants, a systematic perspective.
  2. Detecting and correcting errors.
  3. Improving actions through knowledge, and
  4. Developing the broad skills of their work force.

These days’ computers and information processing are everywhere. Computers influence what decisions made, when decisions are made, what information is available at the point of decision and who is asked to decide. Computers and information processing affect how work is organized and how employees feel about work.

Information and computer is pervasive. The essential element of management is information processing and thus information technology systems are expected to heavily influence management and business operation and as such the main trust of this research work is to investigate the extent of this influence with special focus on modern banking operations in Nigeria. Therefore, it became very apparent and necessary for banks to search for a better method, which would seek to improve and speed up banking operations in the country.

1.3 Objectives of the Study

The aim of this study is to assess the effect of computer usage in the Nigerian banking sector using a case study of the United Bank for Africa (UBA), Enugu state. Specifically, the objectives of the study include to;

  1. To determine the impact of computer usage of the United Bank for Africa on time spent in carrying on banking transactions.
  2. To determine the impact of computer usage on the number of depositors at the bank.
  3. To examine the effect of computer usage for accounting information on efficiency in operation and accuracy of performance in banking operation.
  4. To examine the effect of computer usage on information storage in the United Bank for Africa

1.4 Research Question

The following research questions are formulated to guide this research:

  1. What is the impact of computer usage of the United Bank for Africa on time spent in carrying on banking transactions?
  2. What is the impact of computer usage on the number of depositors at the bank?
  3. What is the effect of computer usage for accounting information on efficiency in operation and accuracy of performance in banking operation?
  4. What is the effect of computer usage on information storage in the United Bank for Africa?

1.5 Research Hypothesis

  1. HO1: The computerization of United Bank for Africa has reduced time wasted in carrying on banking transactions.
  2. HO2: Computerization has led to the increase in the number of depositors at the bank.
  3. HO3: Computerization of Accounting Information has improved Efficiency in operation and accuracy of performance in banking operation.
  4. HO4: Computerization has contributed to better information storage in the bank

1.6 Significance of the Study

The essence of this study cannot be over –emphasized. An accounting system can be designed for manual or computerized operation. In either case, the basic structure remains the same.

Nowadays, the accounting systems in most business organizations are computerized, some organizations also have their information system uses the general ledger as the master file. The general ledge master file is a cluster o ledger account store in internal or external computer storage media. A computerized system uses software programmes to manipulate data entry, editing, updating records and files and periodic closing electronically. It has many advantages such as on-line data entry and inquiry, faster manipulation, timely report preparation and greater analytical ability. The study will be of great significance to many diverse groups such as Directors of companies, corporate shareholders, bankers, employees, customers, corporate shareholders, bankers, customers, government and academic community.

Furthermore, the findings of the study will be significant in the following ways

  1. It would help to evaluate the adoption of information and communication technology by Nigerian Banks in terms of its effect on banks efficiency and bank customer relationship.
  2. It would also justify the application of information and communication technology in banking service delivery in term of profitability of banks. This could be used as yardstick by banks that are yet to adopt information and communication technology in their operations;
  3. It would contribute to existing literature by identifying the major barriers to the adoption of information and communication technology in banking operation in Nigeria and suggest how to address them;
  4. It would also be an invaluable tool for students, academic, institutions and individuals that want to know more about the impact and relevance of information and communication in Nigeria banking sector.

1.7 Scope of Study

The study was conducted in United Bank for Africa (UBA), Enugu state. The content of the study will be limited to the effect of computer usage in the Nigerian banking sector using a case study of the United Bank for Africa (UBA), Enugu state.

1.8 Limitation of the Study

In the course of this study, the researcher was limited by the non-availability of adequate information and also, some respondents felt that supplying certain information was like revealing their banks secret. The scope of the study is a major limitation which constraint the research to computer application in processing of accounting information in our commercial banking industry.

1.9 Definition of Terms


IBM defines a computer as a machine that can by following a controlled sequence of instructions perform both logical and arithmetic operations with data [Leedy, 1980, pp. 31] and can also record results for either immediate or future reference.

Computer Usage:

Refers to the use of an electronic device that manipulates information, or data for storage, retrieval, and processing of data among other uses.


Refers to the adaptation of a system, device, etc. to be operated by computer. It also covers the conversion of information into a form that can be stored or processed by computer.


A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.

1.10 Organisation of the Study

This study is organized into five chapters. Chapter one included the background of the study, research problem, research objectives and questions as well as limitation of the study. Chapter two contains the literature review. Chapter three includes the methodology. Chapter Four contains the results and discussion of key findings of the study. Chapter Five finally looks at the summary, conclusions, and recommendations based on the findings.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

Findings on this research work were based on the analysis of information gathered from the type of questionnaire administered, analysis of various hypothesis and revelations by respondents interviewed. Emphasis, however was placed on those questions that are relevant to the topic under consideration. The authenticity of this research is validated by the fact that the bank used for this research is well computerized as an analysis of table 4.2 show, it is generally agreed that computerized has usually had effects on banks operations. In table 4.4 and 4.5, it could be seen that computers have increased efficiency by reducing the amount of time cost in daily transactions. Again, table 4.6 shows a distinct increase in bank deposit was attributed to the introduction of computers it follows, therefore to conclude that the positive trends associated with computerized services has reinstated customers trust in banking operations which as a result increases customers’ deposit. At this point, it is important to mention that the result of the rest hypothesis revealed that the introduction of computers has not reduced the operational cost of running a bank. This is largely due to the cost of repair and maintenance of these equipment.

In spite of this short coming, computers have given rise to better of storage of information and a greater efficiency in the rendering to services to customers in the banking sector of the nation. Computers have reduced the daily workload in banks a great deal. What this implies is that with the introduction of computer in banking, it is expected to increase effectiveness, efficiency and reduction in the running cost of operation/staff welfare in the long run as all this are possible with the minimum amount of work put in by each individual staff.As mentioned earlier, there are short comings found in Nigerian Bank operations with computers such as:

  1. Inadequate trained personnel to handle the computer equipment.
  2. Lack of locally made parts and incompetent engineer to undertake the machine repairs and maintenance.
  3. Due to lack of pre-installation planning, computers installed in some banks have been found inadequate for the numerous operations of banks.
  4. Most banks fail to extend computer services to their branches, they computerize only their main branches. This is not productive, as the impact of the branches of the bank cannot be ignored in assessing the overall bank performance.
  5. Frequent breakdown in transmitting area network program, occasioned by epileptic supply of electricity.
  6. On line and off line problems and subsequent systems failure.
  7. Slow processing speed of computers and lack of commitment by computer operators.

5.2 Conclusion

The study was carried out to assess the effect of computer usage in the Nigerian banking sector using a case study of the United Bank for Africa (UBA), Enugu state. The main aim being to find out whether the computer has had any effects on the banking sector and if so, to what extent it has gone and to give recommendations which have been made based on the findings of the research carried out.Based on the research work, the study concludes that;

  1. Computerization has made bank work less burdensome and has improved the efficiency of bank services.
  2. Computerization of accounting information has led to efficiency information storage.
  3. Computers have led to an increase in the bank deposit base.
  4. Computers have not contributed to a reduction in the cost of running bank services.
  5. Computerization of accounting information has improved the speed of services to customers.
  6. Banks should append their computer personnel to highly reputable computer engineering firms for proper training to reduce the cost of maintenance and repairs.
  7. Information on the effects of the computer in banking ought to be intensified.

5.3 Recommendation

Based on the findings of this study, the following are recommended;

Computer Information:

There is need for attention to be paid to computer literacy by bank staff. Courses on modern computer and information technology should be encouraged. Also staff needs to be informed on computer processes and just how it affects the “conventional” banking. This will lead to greater appreciation by the customers.

Personnel Training:

As has already mentioned in this research work that lack of trained personnel is one of the banes of the computerization of the banking sector in Nigeria. Bank should therefore engage in personnel training so as to turn out staff that are more efficient and trained with experience to handle these equipment.

Increased Computer Services:

It would pay banks to subject a lost more banking functions to computer application. Some of these computer services include modern telecommunication and information technologies which includes: telephones, ATM, facsimile, local area network, computer system, MLCR [Magnetic Link Character Recognition], Very Small Aperture Terminal [VSAT], Electronic Fund Transfer and Wireless radiophone, etc. These new banking innovations should be introduced and encouraged to facilitate better banking operations.

Branch Computerization:

Banks going to computerization should endeavour to go all the way, their branches should not be left out of the exercise. They should do this within the shortest possible time. Computer in the branches will in the long run yield returns for the banks.

Information Technology Compliance:

Banks should endeavour to be abreast of the modern handling of information by electronic means, which involves its access, storage, processing, transportation or transfer and delivery. Information Technology affects financial institutions by easing enquiry, saving time and improving service delivery.

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