The Contributions of Information Technology in the Operations of Banks in Nigeria

The Contributions of Information Technology in the Operations of Banks in Nigeria

CHAPTER ONE

1.1 INTRODUCTION

BACKGROUND TO THE STUDY

Information technology has already become the nervous system of banks worldwide. 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. To properly place themselves in favorable 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 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 innovatively. The reason for this is the fact that in the future, banking transactions would be conducted in cyberspace.

1.2 STATEMENT OF THE PROBLEM

Generally, the banking industry in Nigeria has witnessed 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 systems, and generally high levels of automation and computerization. Given the expansions, the following are enumerated by the researcher as the problems associated with the banks: –

a. Lack of integrated computer database in the Nigerian banks.

b. Failure of banks to share ideas about new break though, in IT world, they rather use it as a competitive advantage.    

c. Incessant downtimes experienced by most banks

d. 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 their counterparts across the world.

The research would serve as the frontier of knowledge to the bank staff, customers, investors, and management about the future of banks about the new information techniques which facilitate 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 is an industry that touches the lives of everybody, if not as an employee, then as one that benefits from its services. On the other hand, IT refers to the new technology of gathering, storing, manipulating, and transferring information.

This study will be of use to the following: –

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 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 a frontier for further research on the re-engineering of the industry with and of IT.

1.6 STATEMENT OF HYPOTHESIS

Hypothesis I  

H1: Application of IT is responsible for the increase in productivity of FBN Plc.

Ho: Application of IT is not responsible for the increase in productivity of FBN Plc

Hypothesis II 

H1: Application of IT affects the profitability of the Bank

Ho: Application of IT does not affect the profitability of the Bank

Hypothesis III                                

H1: Information Technology applications improve customers the satisfaction with the Bank.

Ho: Information Technology application does not improve customers the satisfaction with the Bank.

1.7 PLAN OF THE STUDY

This project work is divided into five chapters.

Chapter one deals with the background to the study, statement of the problems, objective of the study, the significance of the study, the scope of the study, and definition of terms.

Chapter two is dedicated to the literature review. It covers the legislations of banks, the origin of banks in Nigeria, the problem of IT in Nigerian banks, 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 used.

Chapter four looks into the history of the 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

– Information technology: Is the study or use of the electronic process for storing information and making it available.

– Information: it consists of data that have been retrieved, processed, interpreted, and understood by the end-user.

– Internet: 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 bills, 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 circuits and used as payment instruments for numerous financial schemes.

– E-Banking: Refers to trading electronically over the electronic network through the network.

– Networking: A communication between individual computer systems that otherwise maintain a degree of autonomy.

– Online banking: This allows access to the bank’s web, it gives room for transfers from one account to another and access to the states of customers’ accounts from their doorstep.