The Effect Of Globalization On Banking Operation In Nigeria (A Case Study Of First Bank Nigeria Plc.)

Project and Seminar Topics with material for Banking and Finance

The Effect Of Globalization On Banking Operation In Nigeria (A Case Study Of First Bank Nigeria Plc.)


Abstract


The banking industry has witnessed landmark improvements in series delivery and the practice of banking due to globalization of banking operation. Globalization is referred to as the inter-play, cooperation and integration of various financial systems of the world via international trade, investment and distribution of vital information aimed towards the creation harmony in the world market, production process and general economy development. Globalization has a lot of impact on the banking industries. The unified world economic under has its main vehicle in international trade finance, of which key facilitator are banks and other financial institution. To ascertain the effect of globalization on banking operation his Nigerian. Questionnaire was used to get information both staff and customers of first Bank Plc. Kakuri branch, Kaduna South. The chi-square statistics techniques was used to text the hypothesis The finding of this study reveled that the globalization has a positive impact on banking operation. The banking industry cannot afford to ignore the changes globalization has brought in the banking industry in its operation.


Chapter One


1.0 Introduction

Banking in Nigeria was carried out devoid of any electronic devices until the middle of 1980s. The operations of bank were mostly manual and fraught with attendant problem of poor services delivery.

The era of new generation bank brought into the banking industry competition and need to provide quality services to the banking public.

This brought about the need for some form of automated system. Kyari (2002), acknowledged this fact when he admitted that banks began to invest in computer for basic office in automation and processing, and then later extended to provision of banking services.

This era also brought about massive installation of computer system and the introduction of the first set of electronic banking system devices such as automated teller, machine (ATM) to the banking public with the establishment of more bank in the early 1990s that led to the integration of banking system and ledger bank were replaced by computing system.

The growing need for better services made it mandatory for banking to develop faster settlements among banks that lead to the funding of Nigerian inter-settlement scheme- granting owned by banks.

The central bank in response to this also began the computerization of its system and processes. The introduction of the Magnetic Ink Character- Recording (MICR) check in the number of days it takes to clear a cheque through the Nigerian banking system.

The Magnetic Ink Character Recording (MICR) was yet to be very successful through by middle of 1990s, most banks had introduced some forms of automation or computerization in their operation.

Before financial globalization become popular, financial liberalization efficiency in the financial sector, many African countries embarked on financial liberalization reforms as part of their recommend.

Structural Adjustment Programme:

The crucial message of the financial liberalization, thesis (Mekinnum 1973), show that it is lack of competition that bring inefficiency to this sector, interest rate liberalization is a first step, but it is recognized that this alone is not likely to generate competition in the market because of the already oligopolistic nature of it.

Consequently, not only is there a need to increase the number of players in this market for which a country may be required to go beyond its own domestic boundary.

To increase the number of players there is need to remove entry restrictions, so that non- financial intermediaries as well as foreign banks can enter the market easily. In order to top a large post of savings, there is a need, not only to remove control, but also to relax laws relating to takeover and merging activities.

This implies that there is need to liberalize the external sector of the bank sector. Forced with the gravity of financial crises that occurred in several countries between 1994 and 2002, a number of questions have been raised regarding the underlying basis of financial globalization especially cross-boarder capital movement.


1.1 Background of the Study

The background of this study is to evaluate the effect of globalization in banking operation in Nigeria with particular reference to First Bank Nigeria Plc, Kaduna, Kakuri branch Kaduna South.

The specific objectives of this study are as follows:

  1. To assess the extent at which globalization has influenced services delivery in the banking sector in Nigeria.
  2. To examine how globalization has influenced banking operations in Nigeria whether positively or negatively.
  3. To examine the extent at which globalization has influenced the management of banking industry in Nigeria.

1.2 Statement of the Problem

The provision of quality services has been the major problem facing the Nigerian banking system.

The Nigerian banking customers are becoming more demanding in terms of quality services. Some of the problems facing the Nigerian banking operations are as follows:

  1. Time spent when collecting cash from the bank.
  2. It takes some days before funds can be transferred from branch of the bank to another.
  3. It takes quite some times before cheque are being cleared.
  4. Value data is not efficient in the banking sector.

All these problems need to be addressed so that banking operations could be more, efficient.


1.3 Purpose of the Study

The purpose of the study is to evaluate the effect of globalization on our banking operation in Nigeria with particular reference to First Bank Nigeria Plc, Kaduna, Kakuri branch, Kaduna South.


1.4 Significance of the Study

The study shall serve as a reference point to students of banking and finance, bank practitioners and policy formulation in banking industry.

Through this study the inefficiency that exist in the banking operation are thrown opened to the public and researchers in the discipline. It also helps to understand how globalization could bring efficiency in services delivery to customers through the introduction of modern technology into banking operations.

Through the study, one shall be able to know why First Bank Nigeria Plc, is performing better than some other Banks in Nigeria through the adoption of new technologies in its operations.


1.5 Research Questions

The study used primary data that were generated through the administration of questionnaires and oral interviews.

Sample population from staffs and customers of First Bank Nigeria Plc.

The statistical technique used in the study is chi-square (X­­­­­­­­­­­­2) and t-test was used.


1.6 Statement of Hypothesis

  • H0: Globalization of banking operations has not improved services delivery of First Bank Nigeria Plc.
  • H1: Globalization of banking operation has improved services delivery of First Bank Nigeria Plc.

1.7 Delimitation or Scope of the Study

The scope of this study is that, it focused on the effect of globalization on banking operation in Nigeria.

The study specifically examines the effect of globalization on First Bank Nigeria Plc.

The limitation of the study is that the researcher was not been able to visit all branches of the bank in the country due to financial constraints and time availability for the study.


1.8 Definition of Terms

Banking:

It is a bank business whose principle operations are concerned with the accumulation of the temporary, idle money of the public for advancing some to others for expenditure.

Bank Transfer:

Is a method of making payments in which payment made at any branch of any bank for the account of a payee with an account at any branch of the same bank or another bank.

Globalization:

Is the integration of trade relation and production, the decision across the globe by economic agents who employ investment capital and technology around to take advantage of environments where there is competition and which can manifest to a higher return


Chapter Five


5.0 Summary, Conclusion and Recommendation

5.1 Summary

The aim of this research was to find out whether or not globalization has an impact on banking operation in Nigeria.

This was done with particular reference to First bank Nigeria plc Kakuri branch, Kaduna south, one hundred and fifty questionnaire were administered in the chosen sample population, out of which fifty questionnaires were distributed to the customers of the first bank, out of this number 120 were for both staff (40) and customers (80). The questionnaires were also divided into there sections. Section A questions were personal data, while section B were for the customer of the bank and section C were to the staff of the bank.

The method of data analysis used in this research study involved the use of simple percentage ratio and chi-square (X2) statistics.

The chi-square (X2) statistics is used to test the research hypothesis after being presented in the tabular form.

The finding from the study revealed that globalization has impact positively on banking operation in Nigeria, on both the side of customer and the staff of the bank. This is shown in table 4.1.4; the introduction of technology has improved the quality of services delivery by the bank, ways of withdrawing cash from the bank.

The study of further revealed that Globalization in Banking Operation has restored confidence in the minds of their customers.

The study also show introduction of technology has enhanced the activities of the banks in term of on-line, inter-switch, western union money transfer. The result of the hypothesis shows the positive impact of globalization of banking operation in Nigeria for the sector to maximize the divided of these technologies, adequate and efficient infrastructure must be put in place. Bank should embark on public awareness driven to enlighten the public on the potentials benefits of globalization.


5.2 Conclusion

Going by the findings of this study, it can be safely concluded that even though respondents consider the introduction of ATM Card as he easiest way of withdrawing cash; it is not total free from technical problem and sometime no enough money in the machine.

The study however, revealed that the introduction of technology has improve the quality of services delivery to customers still yet the problem of time spent when collecting money from the bank has not being totally solved.

Indeed Globalization of Banking Operation have positive impact in the general activities of banks in the country, that the banking industry and the government have to create public awareness in the use of machine, and more effort should be put in by the bank to train their staff in terms of security to stop the problem of fraud by some customers and staff of banks.


5.3 Recommendation

The result of this study reveals that Globalization of Banking Operation has contributed sufficiently to bank performance in Nigeria. However, the following recommendations are made in aid of the success of global banking.

  1. The Nigerian customers will expect to have benefits of electronic revolution in its banking transactions. He will expect his bank statement to be more frequent and up to date if not on-line. In one or two state, in banks in the country today, you can now access your bank account from your office and print your statement yourself with his aid of a model technology.
  2. As we tap into the electronic banking evaluation, we expect in the years ahead to have banks develop credible credit card systems, installed unmanned cash point in streets to enable depositors have access to their funds at any time of the day and week.
  3. Banks must strive to apply information technology in their banking operation as this help management effectiveness.
  4. Government can help to make computer systems affordable through the reduction of import duties and other taxes on information technology related equipments.
  5. Deliberate effort should be made by banks to standardize their information technology, driven products for enhanced benefits to both the banks and their customers. There is no reason why such product, as ATMS should not be shared by banks the way consortium of bank share smart card technology.
  6. The central bank of Nigeria should as a matter of utmost priority be at the leading edge of information technology so as to be better positioned to encourage banks on information technology accelerating the development of the development of the information technology supporting infrastructure, electronic. This will reduce the lost of adopting technology by banks and other business concern.

Nigeria banks must adopt and pursue a global strategy in order to remain in business.

Human capital development especially in the area of information technology should be accorded priority attention by banks.


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