Modern Technology And It’s Impact On Banks Customer Services

Project and Seminar Material for Economics

Modern Technology And It’s Impact On Banks Customer Services


Abstract


This study is on modern technology and its impact on banks customer service. The total population for the study is 200 staff of Zenith bank in Akwa Ibom State. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up accountants, customer care officers, marketers and human resource managers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


Chapter One


Introduction

1.1 Background of the Study

A powerful force drives the world towards a converging commonality, and that force is technology (Levitt, 1992). From the beginning of human era, technology has been one of the most essential and most important factors for the development of mankind (Coombs et al, 1987). During the last two hundred years, technological changes have often been related to economic growth in the form of new types of goods and services. Smith (1776) First wrote about technical changes in the form of new machines as one of the three important causes of increasing incomes more than two hundred years ago.

Modern technology can be defined as the modern handling of information by electronic means, which involves its access, storage, processing, transportation or transfer and delivery (Ige 1995). Research shows that modern technology affects financial institutions by easing enquiring, saving rime, and improving service delivery (Alu, 2002). Modern technology provides solutions to the needs of modern societies in health care delivery, library services, education, and communication networks within organizations, etc.

Some available modern technologies, which are presently used in the banking industry in Nigeria, are telephone, facsimile, telegraphy, wireless radiophone, Very Small Aperture Terminal Satellite (VSAT), and computer systems.

Inspite of these innovations, the level of banking technology remains relatives low, in terms of both international standards and local needs as in the case of linking of branches of individual banks by computer network, which has been achieved only by few banks, while interbank linkages by computer is absent. Besides, only a few banks have embraced technology based products such as automated teller machines (ATM) and other forms of electronic banking such as smart cards and electronic wallets.

These inadequacies are traceable to a number of factors such as the economy’s downturn since the early 1980’s and its subsequent sluggish growth has not provided an adequate base for sustaining modern technology advancement in the banking industry; low modern technology skills and lack of the technology base needed for fostering the growth of indigenous banking technology, supporting infrastructures such as electricity and telecommunication which are needed for the effective use of modern technology in the banking industry, have been grossly inadequate; and the existence of an uncompetitive banking industry prior to the adoption of structural reforms in 1986 did not create the necessary incentives for innovations.

However, given the aforementioned traceable inadequacies the task here is to investigate modern technology and its impact on bank’s customer services (a case study of Zenith Bank Plc from 1990 to 2006).


1.2 Statement of the Problem

The current wave in the use of modern technology to enhances services have raise various questions on the extent to which these increase affirms customer services in the Nigerian banking industry.

Although, much research have been made on modern technology in previous studies, but lack of literatures on its impact of literatures on its impact on customer services in the Nigerian banking industry points out that this problem have been addressed marginally.

The following problem associated with this study include:

  1. The need to ascertain the promptness and efficience of services as perceived by customers through the use of modern technology.
  2. The perception of customers on the ease of conducting banking transactions through the use of modern technology.
  3. The need to ascertain the effects of modern technology on the interaction between cashiers and customers.
  4. Lastly, the need to ascertain the impact of modern technology on the productivity of the bank.

1.3 Objectives of the Study

The objectives of this study is to look extensively into the impact of modern technology on bank’s customer services, among which are:

  1. To identify the use of modern technology devices in executing bank operations and decisions at faster rate and with high degree of accuracy.
  2. To determine the impact of modern technology in the operations of the banking industry.
  3. To examine the effects of modern technology on the output of bank workers to the customers
  4. To assess the impact of modern technology in reducing the time spent by customers inside the bank.
  5. To assess the impact of modern technology on the revenue earned by Nigerian banks
  6. To assess the role of modern technology on the bank’s contribution to the national income of Nigeria.

1.4 Research Hypotheses

Hypothesis One
  • HO: modern technology has no significant effect on the waiting time (customer queues) spent in Zenith Bank Plc by customers to receive bank services.
  • HI: modern technology has significant effect on the waiting time (customer queues) spent in Zenith Bank Plc by customers to receive bank services.
Hypothesis Two
  • HO: there is no impact of modern technology in the operations of the banking industry
  • HI: there is impact of modern technology in the operations of the banking industry

1.5 Significance of the Study

This study is significant because its findings should contribute to the argument on whether modern technology have an impact on bank’s customer services, at least within the Nigerian banking industry context. Policy makers will find the discussion and recommendation useful in the formulation and implementation of policies in the Nigerian banking industry.

Researchers who will work in a related topic in the future will find this study a useful guide as well as a reference point.


1.6 Scope and Limitation of the Study

The study is limited to modern technology and its impact on bank’s customer services between 1990 and 2006 (a case study of Zenith Bank Plc). The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.


1.7 Definition of Terms

Some terms used in this study but whose meaning can be misunderstood are clearly defined below:

Banking:

It is the businesses of receiving money from outside sources as deposits irrespective of the payment of interest, and the granting of money loan and acceptance of credit for the purchase of bills and cheques or the purchase and sales of securities for the amount other than or the affecting of transfer, clearing and such transaction as stipulation by the Central Bank of Nigeria (CBN) guidelines.

Banking Industry:

It is the combination or totality of all banks in Nigeria.

Customer Service:

It is any contract, whether active or passive, between a customer and a bank that causes negative or positive by a customer and this perception will be influenced to be negative or positive by the customer’s expectations of the contract having been met or disappointed.

Electronic Banking:

These are services rendered by the banks to its customers without the physical contact of both parties.

Electronic Commerce:

This simply means online buying and selling of goods and services. This sale and purchase of items including but not limited to flowers, books, magazines, newspapers, more sophisticated products and services such as buying and selling of shares of publicly quoted companies.

Modern Technology:

This is a term, which generally covers the modern handling of information by electronic means, storage, processing, transportations or transfer and delivery.


1.8 Organisation of Study

The study is organized into five chapters.

  1. Chapter one provides the introduction, statement of the problem, objectives of the study, significance of the study, scope and limitation of the study, organization of the study, research hypothesis, and definition of terms.
  2. Chapter two discusses the review of related literature.
  3. Chapter three focuses on banking in Nigeria, role of modern technology in Nigerian banking industry and internet opportunities for Nigerian banks.
  4. Chapter four is used for analysis of data, evaluation, and interpretation of findings.
  5. The study is summarized with recommendations and conclusion in chapter five.

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain modern technology and its impact on banks customer service

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of modern technology and its impact on banks customer service


5.2 Summary

This study was on modern technology and its impact on banks customer service. Six objectives were raised which included: To identify the use of modern technology devices in executing bank operations and decisions at faster rate and with high degree of accuracy, to determine the impact of modern technology in the operations of the banking industry, to examine the effects of modern technology on the output of bank workers to the customers, to assess the impact of modern technology in reducing the time spent by customers inside the bank, to assess the impact of modern technology on the revenue earned by Nigerian banks, to assess the role of modern technology on the bank’s contribution to the national income of Nigeria. The total population for the study is 200 staff of Zenith bank in Akwa Ibom State. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up accountants, customer care officers, marketers and human resource managers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

The banking industry which is the back bone of every economy is confronted with various challenges such as globalization, deregulation, competition, significant high cost of installing ICT and maintenance. The usage of ICT can lead to lower costs, but the effect on profitability remains inconclusive, owing to the possibility of ICT effects that arise as a result of consistence high demand of skilled work force, issues of increasing demand to meet customer’s expectation for customer service delivery, trustworthiness of the information system and competition in financial services. However, from the discussion whilst reviewing literature many researchers did not find ICT, for the delivery of customer service and profitable for bank’s financial performance. So there has been an arrow head among these findings on perspective of profitability and customer service delivery. While, on the same vein, other researchers found ICT channel making profitable impact on the banks that are only internet start-ups than the conventional banks transforming into click and mortar.


5.4 Recommendation

Therefore it is recommended that research be carried out to cover the whole country, civic education on the ICT awareness also they must concentrate on customer awareness and since this is the initial stage of ICT adoption they should not concentrate on profitability issues. And there is a need for bankers to invest more resources in ICT technologies to help reduce fraud as well as provide more online banking products to reduce crowding in banks and improve banking solutions. The impact of adopting other individual technologies, profitability and performance issues should also be investigated to open up and clear the way for policy and business decisions.


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