The Impact Of Computer To Modern Banking In Nigeria (A Case Study Of Zenith Bank Int’l Plc And First Bank Nigeria Plc Owerri)

The Impact Of Computer To Modern Banking In Nigeria (A Case Study Of Zenith Bank Int’l Plc And First Bank Nigeria Plc Owerri)

Abstract

This research work is on the Impact of Computer to Modern Banking in Nigeria. A case study of Zenith Int’l Bank Plc and First Bank of Nigeria Plc.

In advanced economies, technology has played a significant role since 1060’s. The role of computer in the financial world and other spheres of life cannot be over-looked and this has made it inevitable as the whole world has been turned into a global village. But in developing economies on the other hand, technology has relatively been poorly deployed in computer services.

In Nigeria, deregulation of the banking industry in 1986 saw banks deploying technology as the chief competitive weapon to achieve significant market shares in the crowded banking industry. This brings a good decision on the other leas to effective performance of managerial functions, which should in turn lead to the attainment of the organization’s goals.

The research used both primary and secondary data from findings. It was observed that about 90% of the banks in Nigeria has improved and agreed that computerization has lead to affective bank performance and have also reduce the cost of running bank services.

In trying to state the impact and problems related to computer in the banking industry, the researcher observed that some problems faced by these banks are; inefficient planning, fraud, errors, irregular functioning of telecommunication facilities etc, and recommend that;

1. Proper awareness and orientation should be made with regards to illiterate bank customers who are still novice to computer innovations.
2. The computer department should be manned by people of good integrity and sound knowledge of computer to reduce fraud in the banks.
3. There should be adequate power supply to fasten and improve operation and also reduce cost of running bank services.

Table Of Content

Preliminary Page(s)

• Title Page
• Approval Page
• Dedication
• Acknowledgement
• Abstract
• Table of Content

Chapter One

1.0 Introduction

• 1.1 General Overview
• 1.2 Statement of Problems
• 1.3 Objectives of the Study
• 1.4 Significance of the Study
• 1.5 Research Questions
• 1.6 Statement of Hypothesis
• 1.7 Scope of the Study
• 1.8 Limitations of the study
• 1.9 Definition of Terms

Chapter Two

2.0 Literature Review

• 2.1 Background of the study
• 2.2 Evolution of Computer Technology
• 2.2.1 Definition of Computer
• 2.2.2 Types of Computer
• 2.3 Evolution and Development of Nigerian Banking System
• 2.4 Future of Computer in Nigeria Banking System
• 2.5 Problems Associated with the use of Computer
• 2.6 Computer Related Fraud in the Banking Industry
• 2.6.1 What is Computer fraud
• 2.6.2 Forms of Computer Fraud
• 2.7 Impact of Computer in Nigeria Banking Operation
• 2.8 Summary of the Chapter
• References

Chapter Three

3.0 Research Methodology

• 3.1 Research Design
• 3.2 Sources of Data
• 3.3 Method of data Collection
• 3.4 Population Size
• 3.5 Sample size
• 3.6 Techniques for Data Analysis

Chapter Four

4.0 Data Presentation and Analysis

• 4.1 Data presentation
• 4.2 Data Analysis
• 4.3 Analysis of Hypothesis

Chapter Five

5.0 Summary, Conclusion and Recommendations

• 5.1 Summary of findings
• 5.2 Conclusion
• 5.3 Recommendation
• Bibliography
• Appendices

Chapter One

1.0 Introduction

1.1 General Overview

In advanced economies, technology has played a key role since 1960’s. The role of computer in financial world and other spheres of life cannot be over-emphasized or, be over-looked and this has made it inevitable as the whole world has been turned into a global village. But in developing countries on the other hand, technology has relatively been poorly deployed in customer services.

Nevertheless, bank even in the strategic role of technology driven services, played in the efficient and cost effective service delivery. Investments in innovative banking technology worldwide have therefore grown exponentially in past decade.

In Nigeria, deregulation of the baking industry in 1986 saw banks deploying technology as the chief competitive weapon to achieve significant market shares in the crowded banking industries (Aduba, 1997). This brings a good decision on the other hand leads to effective performance of managerial functions which should in turn lead to the attainment of the organization’s goal. The vital ingredients for effective information apart from accuracy must also include uniformity, timeliness, reliability, clearness and must be promptly transmitted to the recipient and same time must be relevant to the area of specification.

Therefore, this presentation reviews the enabling environment for technology driven bank services in making effective planning, organization and implementation of the policies of the organization. Introduction of computer networks similarly created a new banking culture that granted customer flexibility in services delivery through wider choice of transaction outlet give bank’s networks of branches.

Electronic banking system was an innovation into the banking industry. It was introduces to ease the problem of;

1. Casting delay in transaction
2. Clearing
3. Transfer of fund
4. Accuracy in information from one location to the other

It can be seen that before the introduction of computer in the banking industry, a lot of problems were faced in processing transaction in various sections of the bank, but with computerization, all these problems have been reduced or eased off. The system has been embraced worldwide because it is easier and convenient for both the sender and receiver. This has made banks like Zenith Bank, Intercontinental Bank, Diamond Bank joined suit with First Bank Nigeria Plc in giving Western Union Money Transfer services to people within Nigeria.

Computerization or electronic banking has even helped in introducing electronic cards known as pay cards (Credit and Debit Cards). This was introduced to avoid the risk of carrying cash around. This electronic card is loaded with any amount in alternative to physical cash with ease. The electronic pay card has gone a long way in its establishment because people now prefer it to holding physical cash. Infact computer has come to stay and has become a vital part in our society because it has the capacity of extending men’s power to perform mental tasks and provide imagination services.

1.2 Statement Of Problems

Before the introduction of computer in banking operation, the banking industry was faced with a lot of problems that made some people to lost interest and confidence in them (banks). These problems are as follows;

1. Delay in responses and services delivery time
2. Improper handling, storing and keeping of date and records
3. Inaccuracy/errors in data entries and interests computations.
4. Transmission of fund from one place to another.
5. Cash holding movement
6. Delays in clearing cheque
7. Poor monitoring of accounts leading to fraud

In order to eradicate or minimize al these problems, and foster confidence in banking industry, computerization was introduced to overcome all these problems and build confidence back into the industry and the people. (Anderson, 1979)

1.3 Objective Of The Study

The aim of this study is to examine the importance of application of computer to banking operations with regards to efficiency, profitability, effectiveness of computer operation to the realization of the set goals in the banks and economy as a whole.
Also this study or research will enable us to know the various problems that have been associated with banking industry and its operation can be averted or reduced through modern technology computerization.

1.4 Significance Of The Study

Computers have replaced the crude mechanical and manual system of recording, analyzing and typing of banking information. New greater qualities of data can be processed at greater speed and accuracy.

1.5 Research Questions

In order to properly address this issue, the following questions were formulated to investigate and analyze the responses of the people on the impact of computerization in the banking industry. The questions are;

1. To what extent is our society aware of electronic banking?
2. How has electronic banking improved the quality of banking in our society?
3. Do you think the benefit of computer justifies the cost?
4. Do you think that the introduction of computer/electronic banking has rendered some people jobless?
5. What are the reactions of Nigerians to the computerization of banks?
6. Has globalization any impact on the economy and future problem?
7. Has the computerization of banking industry contributed to the increase in banking performances and efficiency in term of profit?
8. Has the computerization of the Nigerian banking industry led to time saving in bank services and transactions?

1.6 Statement Of Hypotheses

Hypothesis I

• Ho: The computerization of banking industry has not contributed the increase in banking performances and efficiency in terms of profit.
• Hi: Computerization of banking industry has contributed to the increase in banking performances and efficiency in terms of profit

Hypothesis II

• Ho: Computerization of Nigerian banking industry has not led to time saving in bank services and transactions.
• Hi: Computerization of the Nigerian banking industry has led to time saving in banking services and transactions.

1.7 Scope Of The Study

The Scope of this study is on the assessment of impact of the computer on banking operations. This tends to provide enabling environment for technology driven bank services in making effective planning, organization and implementation of the policies of the organization through computer.

Introduction of computer networks similarly created a new banking culture that granted customer flexibility in services delivery through wider choice of transaction outlet given banks networks of branches.

However, Zenith Bank Int’l Plc and First Bank Nigeria Plc will be studied to particularly appreciate the performances and problems encountered by these organizations.

1.8 Limitation Of The Study

An investigation of this kind is faced with several limitations such as;

Time Constraints:

This pose a serious problem to the research since the project is expected to be completed within a space of time.

Poor financing:

Financing this project has been a trying experience for the researcher because of the poor economic condition in the country. The researcher was unable to travel to many places of interest in order to get comparable data or information for this research work.

Natural Factor such as (Rainfall) hindered the researcher’s movement in her bid to distribute the questionnaires to respondents.

Not having access to some relevant data that would promote or improved the existing quality of this work due to poor audience by respondents, unreliable statistics and bias information from respondents.

1.9 Definition Of Terms

Computer:

According to Opara et al (2006:66), computer is an electronic device that is capable of solving problems by accepting data, performing prescribed operations on the data accepted and supplies the results of those operations.

Automated Teller Machine (ATM):

Is cash disposer that is designed to enable customer enjoy banking services without necessarily going into contact with bank cash teller.

Bank:

Is a financial institution where money and other valuable items are kept for safe custody.

Book Keeping:

This involves keeping records of all financial transactions

E-Banking:

This is a natural fall out of intense competition to the financial markets. It also poses new challenges for country authorities in regulating and supervising financial system and in designing and implementing microeconomics policy.

Customer Services:

This unit is always at the entrance as not to course inefficiency. Its main function is to open records and guide the customers on their enquiry.

Fraud:

A method of illegally getting money from someone often by using clever and complicated methods.

Hardware:

This is the computer components, that is the computer itself and other devices.

Management:

The act or skill of directing and organizing the work of a company or organization.

Program:

A set of instruction given to a computer to make it perform an operation.

Chapter Five

5.0 Summary, Conclusion And Recommendation

5.1 Summary Of Findings

This study was able to examine how the volume of banking transaction increases with growing need for more management decisions and that the manual system method of data processing is too slow and expensive, thereby demanding for a more refined method and then the advent of the computer.

This study has tries to focus on the influence of computerization on banking industry in Nigeria because banks and other organizations throughout the world are growing increasingly dependent on computer and communication technologies in order to improve efficiency, productivity and competitiveness. The banks are paying careful attention towards the implementation of terminal systems. They are determining to arrive at an agreement on EFT (Electronic Fund Transfer) system that will be acceptable entirely by themselves and the public in general.

Chapter one of this study tries to feature the introduction of the subject matter, with reference on the major roles of Nigeria financial services as it talked about the reasons and the implementation of computer in banking Industry.
In chapter two, the researcher made effort to view previous literature, which is the background of the study, the evolution of computer system, classification and components of a computer system. The chapter also discussed about the traditional banking, the need and uses of computer in the Nigerian banking industry, future of computer in Nigeria banking system, problems associated with the use of computer, computer fraud and finally the impact of computer in the banking industry.

Chapter three discussed the various methods through which data was sourced and also analyzed. From the survey, it was observed that a proportion of the respondent banks are partially computerized in this operation in order to meet customers’ demands.

From the analysis of findings, the researcher discovered that few have gone full or completely computerized, while most are in the making. Although these computerized banks still need information security so as to continue being in the system. It is clear that the uses of computer for baking operations have revolutionalized and improved profitability, efficiency and effectiveness in bank services.

The findings vindicate the followings;

1. Computerization has led to effective bank performances in Nigeria; also have reduces the cost of running bank services.
2. It has helped to speed up services to customers thereby saving time.
3. It has made work less burdensome
4. And finally, the benefits of computer has justifies the cost.

5.2 Conclusion

The aim of this research work is to find out whether those banks using computer offer better services to their customers that those that are not using computers. And the responses gathered proved that those that are computerized offer better services to their customers than non-computerized banks.

From the study, it was observed that the introduction of data processing system in financial institutions especially banks, has resulted to increase in efficiency, effectiveness and productivity.

However, the advent of computer in banking industry had its problems. Fraud and forgery that had been linked only to manual system have become widespread in the automated process. It may be advisable to begin to plan now, in order to adequately anticipate its impact and implication for policy formation.

With the discovered finding, the researcher has concluded that computerization has brought about new innovations and greater efficiency in banking profession.

5.3 Recommendations

With regards to the result of the study, the following recommendations are suggested.

1. Proper awareness and orientation should be made with regards to illiterate bank customers who are still novice to computer innovations.
2. There should be arrangement of workshop and seminars for bank staff that are using computers to upgrade their systems and acquire the most recent discoveries in computer technologies.
3. There should be adequate power supply to fasten and improve operation and also reduce cost of running bank services.
4. The computer department should be manned by people of good integrity, with sound knowledge of computer to reduce fraud in the banks.
5. Banks’ management should encourage the use of on-the- job training to stimulate and educate their staff on the application of computer device as this will not only lead to efficiency and profitability but also specialization.
6. The supervisory authority CBN should provide statutory framework for banks with external auditors to report, especially any inspection of banks.

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