This research work was carried out to
determine the Impact of Information and Communication Technology on
Banking Industry and First Bank of Nigeria Plc. (Iganmu Branch) has been
used for the purpose of this study. A survey of (200) Two Hundred
respondent were used comprising all the middle and the top management of
First Bank of Nigeria Plc. (Iganmu Branch).
Data were generated through primary and
Secondary Sources. The Primary Data were collected through the
Administration of Questionnaire from the respondent. The Secondary Data
were generated from collection of different related Textbooks, Journals
and the internet. The analysis of the questionnaire was done using
simple percentage approach and the Karl Pearson Chi - Square Statistic
to test the hypothesis.
The result of the study revealed that
innovative technologies contribute to the survival of the banking
industry. It is also shown that ICT products have effect on customer
services. There is also difference in the banking sector with the use of
ICT. The adoption of ICT has improved customer services, facilitated
accurate records, provides for home and banki.ng services, ensures
convenient business hour, prompt and fair attention and enhances faster
services. From the findings it is concluded that information and
communication technology improves banks image and leads to a wide,
faster and more efficient market. It has also make work easier and more
interesting, improves the competitive edge of banks, improves
relationship with customers and assists in solving basic operational and
TABLE OF CONTENTS
1.1 Statement of the Problem
1.2 Objectives of the Study
1.3 Research Questions
1.4 Research Hypothesis
1.5 Research Methodology
1.6 Significance of the Study
1.7 Limitation of the Study
1.8 Scope of the study
1.9 Definition of Terms
1.10 Brief History of First Bank of Nigeria
CHAPTER TWO: LITERATURE REVIEW
2.1 Definition of Information and communication Technology
2.2 The use of I C T in banking Industry
2.3 I C T product use in the banking Industry
2.4 Computer Generations
2.4.1 First Generation Computer
2.4.2 Second Generation Computer
2.4.3 Third Generation Computer
2.4.4 Fourth Generation Computer
2.4.5 Fifth Generation Computer
2.5 Definition of Computer
2.6 Types of Computer
2.6.1 Digital Computer
2.6.2 Analogue Computer
2.6.3 Hybrid Computer
2.7 Classification of Computer
2.7.1 A micro Computer
2.7.2 A Super Computer
2.7.3 A mini Computer
2.7.4 A mainframe Computer
2.8 Advantages of Computer
2.9 Disadvantages of Computer
2.10 Characteristics of Computer
2.11 The New trend in Computer
2.12 The Definition of Computer
2.12.1 Types of Computer Network
2.12.2 Local Area Network
2.12.3 Wide Area Network
2.12.4 Classification of Computer Network
2.12.5 The advantages of wide Area Network
2.13 The impact of ICT on Banking Industry
2.14 Products and services offered by the first Bank of Nig. Plc.
2.15 The First Bank farm settlement scheme
2.15.1 Guaranteed Fund Credit (GFC)
2.15.2 Multi-channels Agricultural finance scheme
2.15.3 First Bank Agricultural credit to schools (FACTS)
2.15.4 National Agro Dealer Scheme (NADS) - plus
2.15.5 GSM 102
2.15.6 Commercial Agriculture Credit Scheme
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Restatement of Research Hypothesis
3.2 Research Method and Design
3.3 Sample size Determination
3.4 Data Collection Method
3.4.1 Primary Sources of Data
3.4.2 Secondary Sources of Data
3.5 Research Instruments
3.6 Validity and Reliability of Instrument
3.7 Data Collection Method
3.8 Method of Data Analysis
3.9 Limitations of the Methodology References
CHAPTER FOUR: PRESENTATION AND DATA ANALYSIS
4.1 Data Analysis and Interpretation
4.2 Analysis of Response Rate
4.3 Demographic Characteristics of Respondents
4.4 Age Distribution
4.5 Marital Status of Respondents
4.6 Distribution by Qualification
4.7 Working Experience of the Respondents
4.8 Opinion of Bank Employees toward ICT
4.9 Testing of Hypothesis
4.9.1 Innovative Technology Contribute to the survival Banking Industry
4.9.2 The difference in the efficiency
of Nigeria Banking Industry before and after the adoption of
Information and Communication Technology
4.9.3 Does Information and Communication Technology have effect on Customer Services
CHAPTER FIVE: SUMMARY, FINDING AND RECOMMEDATION
5.1 Summary of findings
5.4 Suggestion for future Studies
BACKGROUND OF THE STUDY
Today's business environment is very
dynamic and undergoes rapid changes as a result of technological
innovation, increased awareness and demands from customers. Business
organizations, especially the banking industry of the 21st century
operates in a complex and competitive conditions and highly by these
changing conditions and highly unpredictable economic climate.
Information and communication Technology is at the centre of this global
change curve. Laudon and Laudon, (1991), contend that managers cannot
ignore information systems because they play a crucial role in
contemporary organization. They point out that the entire cash flow of
most fortune 500 companies is linked to information system.
The application of information and
communication technology concepts, techniques, policies and
implementation strategies to banking services has become a subject of
fundamental importance and prerequisite for local and global
competitiveness. ICT directly affects how managers decide, how they plan
and what products and services are offered in the banking industry. It
has continued to change the way banks and their corporate relationships
are organized worldwide and the variety of innovative devices available
to enhance the speed and quality of service delivery.
Harold and Jeff (1995), contend that
financial service providers should modify their traditional operating
practices to remain viable in 1990s and the decades that follow. They
claim that the most significant shortcoming in the banking industry
today is a wide spread failure on the part of senior management in banks
to grasp the importance of technology and incorporate it into their
strategic plans accordingly.
Woherem (2000), claimed that only banks
that overhaul the whole of their payment and delivery systems and apply
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.
The banking industry in Nigeria has witnessed tremendous changes linked
with the developments in ICT over the years.
The quest for survival, global
relevance, maintenance of existing market share and sustainable
development has made exploitation of the many advantages of ICT through
the use of automated devices imperative in the industry. This study
evaluates the response of Nigerian banks to this new trend and examines
the extent to which they have adopted innovative technologies in their
operation’s and the resultant effects.
Information Technology (IT) IS the
automation of processes, controls, and information production using
computers, Tele communications, software and ancillary equipment such as
automated teller machine and debit cards (khalifa 2000). It is a term
that generally covers the harnessing of electronic technology for
information needs of a business as all levels. Irechukwu (2000) lists
some banking services that have been revolutionized through the use of
ICT as including account opening, customer account mandate, and
transaction processing and recording. Information and communication
technology has provided self-service (automated customer service
machines) from where prospective customers can complete their account
opening documents direct online. It assists customers to validate their
account numbers and receive instruction on when and how to receive
cheque books, credit and debit cards.
Several authors have conducted
investigation on the impact of ICT on the banking sector of the Nigeria
economy. Agboola et al (2002) discussed the dimensions in which
automation in the banking industry manifest in Nigeria.
(i) Bankers Automated clearing
services: This involves the use of Magnetic Ink character Reader (MICR)
for cheque processing. It capable of encoding, reading and sorting
(ii) Automated payment systems:
Devices used here include Automatic teller Machine (ATM), plastic cards
and Electronic funds Transfer.
(iii) Automated Delivery channels: These include interactive television and the internet.
Agboola (2001) studied the impact of
computer automation on the banking services in Lagos and discovered that
Electronic Banking has tremendously improved the services of some banks
to their customers in Lagos. The study was however restricted to the
commercial nerve centre of Nigeria and concentrated on only six banks.
He made a comparative analysis between the old and new generation banks
and discovered variation in the rate of adoption of the automated
Aragba-Akpore (1998) wrote on the
application of information technology in Nigerian banks and pointed out
that IT is becoming the backbone of banks' devices regeneration in
Nigeria. He cited the Diamond Integrated Banking Services (DIBS) of
Diamond Bank Limited and Electronic Smart card Account (ESCA) of all
states Bank Limited as efforts geared towards creating sophistication in
the banking sector. Ovia (2000) discovered that banking in Nigeria has
increasingly depended on the deployment of information technology and
that the IT budget for banking is by far larger than that of any other
industry in Nigeria. He contended that on-line system has facilitated
internet banking in Nigeria as evidenced in some of them launching
websites. He found also that banks now offer customers the flexibility
of operating an account in any branch irrespective of which branch the
account is domiciled.
Woherem (1997), discovered that Nigeria
banks since 1980s have perform in their investment profile and use of
ICT systems, than the rest of industrial sector of the economy. An
analysis of the study carried out by African Development consulting
Group Ltd. (ADCG) on IT diffusion in Nigeria shows that banks have
invested more on IT, have more IT personnel, more installed base for
PCs, LANs, and WANs and a better linkage to the internet than other
sectors of the Nigerian economy.
1.1 STATEMENT OF THE PROBLEM
The Banking industry all over the world
helps to promote economic growth and development. In recognition of this
important role, a lot of effort is being put into the development of
the sector. One area of such effort is the use of information and
communication technology to improved banking services with the advent of
computers and its revolution in information processing electronic
banking has become the order of the day. Electronic banking enhances the
speed and quality of service delivery and has changed their system of
banking all over the world in Nigeria. Electronic banking is still at
the infancy stage. A great deal of effort and investments are still
required to make the country relevant to the present dispensation in the
industry. Many transactions are still being done manually, the waiting
time for customers is still relatively long and the quality of service
is yet to be satisfactory to some customers.
Since the banking sector has become
dependent of information and technology, the performance enhancement of
the Nigeria banks will be best achieved through its optimal utilization.
This issue of absolute necessary is the subject of this study.
Moreover, the cost of acquiring this technology vis-a-vis its benefit is
on other problem.
1.2 OBJECTIVES OF THE STUDY
The focus of this study is to determine
the impact of information and communication technology on banking
service in Nigeria. The four objectives, which are to be achieved, are
(1) Determine what constitutes information and communication technology.
(2) Examine the factors responsible for the use of information and communication technology in the banking sector.
(3) Examine the effect of information and communication technology on banking service.
(4) Examining the effects of information and communication technology on recruitment and training staff.
1.3 RESEARCH QUESTIONS
1. How does innovative technologies contribute to the survival of the banking industry operations?
2. What is the difference in the
efficiency of the Nigerian banking industry before and after the
adoption of information and communication technology?
3. To what extent does information and communication technology products have effects on customer services?
1.4 RESEARCH HYPOTHESES
Ho: Innovative technologies does not contribute to the survival of the banking industry operations
Hi: Innovative technologies will contribute to the survival of the banking industry operations
Ho: There is no significant
difference in the efficiency of the Nigerian banking industry before and
after the adoption of information and communication technology.
Hi: There is significant difference
in the efficiency of the Nigerian banking industry before and after the
adoption of information and communication technology.
Ho: Information and communication technology products will have no effects on customer services.
Hi: Information and communication technology products will have effects on customer services.
1.5 RESEARCH METHODOLOGY
The study take a look at the impact of
information and communication technology on business organization
performance and chi square method will be used to examine the data. The
data will be collected from the first Bank of Nigeria Plc.
1.6 SIGNIFICANCE OF THE STUDY
The study is expected to provide
information on various information and communication technology devices
used by banks in Nigeria and the extent of the usage. The result of this
research is expected to increase our knowledge of information and
communication technology in the banking industry in Nigeria. The
findings of the study would be of benefit to commercial banks and the
1.7 LIMITATION OF THE STUDY
Information and communication technology
is still relatively in Nigeria. The increasing awareness of financial
and educational institution in the field is very recent. One major
limitation is that most bank staff at the management level are not
easily accessible. When they are available, the competition in the
industry makes them unwilling to disseminate information on the topic.
1.8 SCOPE/LIMITATION THE STUDY
This study takes a look at the impact of information and communication technology on business organization performance.
Effort will be made to source for data from First Bank of Nigeria Plc (Iganmu Branch).
1.9 DEFINITION OF TERMS
BANK: Oxford Dictionary defines bank as an establishment for the custody of money which it pays out on customers order.
BANK: The Banking decree of 1969 define a
banker as any person who transaction banking business and whose
business includes acceptance of deposits withdraw able on demand.
COMMERCIAL BANK: A bank that accepts deposits and makes consumer commercial and real estate loans (Saunders 2002)
COMPUTER: An electronic device that on
receipt of an appropriate input is capable of processing the input
according to a set of previously supplied instructions and making the
result available if desired (Essen, 2001) Britain J.T identified two
major types of computer
(1) Computer Hardware's (2) Computer software's
COMPUTER HARDWARE: Physical equipment
used for input processing and output activities in an information system
(Laudon & Laudon 2001)
COMPUTER SOFTWARE: Detailed
pre-programmed instructions that control and co-ordinate the work of
computer hardware (Laudon and Laudon 2001).
DATA: Raw facts representing events
occurring in organizations or the physical enrolment before they have
been organized and arranged into from that people can understand and use
(Laudon & Laudon 2001).
INFORMATION: Data that have been shaped into a form that is meaningful and useful to human beings. (Laudon & Laudon 2001)
PROCESSING: The conversion, manipulation
and analysis of raw inputs into a form that is more meaningful to human
(Laudon & Laudon 2001).
DATA BASE: A group of related files (Laudon & Laudon 2001).
NETWORK: A two or more computers linked together to share date or resources such as printer.
COMMUNICATION TECHOLOGY: Physical
devices and software that links the various pieces of hardware and
transfers data one physical location to another. Computer and
communication equipment can be connected in networks for sharing voice,
data, images sound or even video (O. BRIEN 1996).
STORAGE TECHNOLOGY: Physical media and
software governing the storage or organization of data for use in an
information system e.g magnetic or optical disk or tape (O. BRIEN 1996).
1.10 BRIEF HISTORY OF FIRST BANK OF NIGERIA PLC
First Bank of Nigeria is a Nigeria Bank
and Financial Services Firm. First Bank traces its ancestry back to the
first major institution founded in Nigeria.
The Current Chairman is Dr. Ayoola Oba
Otudeko, OFR. The Bank is the largest retail lender in the nation, while
most banks gather funds from consumers and loan it out to large
corporations and multinationals, First Bank has created a small market
for some of its retail clients.
At the end of August 2006, the bank had
assets totaling 650 Billion Naira or $5 Billion Dollars. The Bank was
also the most highly capitalized stock on the Nigeria Stock Exchange and
had about 10 Billion outstanding shares. It has a subsidiary in the
United Kingdom, FBN Bank (UK), which has a branch in Paris. The bank
also has representative offices in South Africa and China.
The company was named the best bank in
Nigeria by Global Finance Magazine in September 2006. The firm's
auditors are Akintola Williams Deloitte & Touche (Charted
The firm has solid short and long term
rating from Fitch and the Global Credit Rating Company Partly due to its
low exposure to non-performing loans. The firm's compliance with
financial laws has also strengthened with Economics Financial Crimes
Commission giving it a strong rating.
PRE - INDEPENDENCE
The Bank traces its history back to 1894
and the Bank of British West Africa. The Bank originally served the
British Shipping and Trading Agencies in Nigeria.
The Founder, Alfred Lewis Jones, was a
shipping magnate who originally had a monopoly on importing silver
currency into West Africa through his Elder Dempster Shipping Company.
According to its founder, without a bank, economies were reduced to
using barter and a wide variety of mediums of exchange, leading to
unsound practices. A bank could provide a secure home for deposits and
also a uniform medium of exchange. The bank primarily financed foreign
trade, but did little lending to indigenous Nigerians, who had little to
offer as collateral for loans.
In 1957, Bank of British West Africa
changed its name to Bank of West Africa (BWA). After Nigeria
independence in 1960, the bank began to extend more credit to indigenous
Nigeria. At the same time citizens began to trust British Banks since
there was an independent financial.
In June 2009, Stephen Olabisi Onabanjo
was appointed Group Managing Director (CEO), replacing Sanusi Lamido
Sanusi, who had been Governor of Central Bank of Nigeria. Onasanya was
formerly Executive Director of Banking Operations & Services.
Today, First Bank has 300 branches
network in the industry in Nigeria. In order to diversify into a wide
range of banking activities and services e.g. Corporate and Retail
Banking, Insurance Brokerage, Money Transfers etc. Control Mechanism and
more citizens began to patronize the new Bank of West Africa.
In 1965, Standard Bank acquired Bank of West Africa and changed its acquisition's name to Standard Bank of West Africa.
In 1969, Standard Bank of West Africa
incorporated its Nigeria operations under the name Standard Bank of
Nigeria. In 1971, Standard Bank of Nigeria listed its shares on the
Nigerian stock exchange and placed 13% of its share capital with Nigeria
investors. After the end of the Nigeria Civil War, Nigeria's Military
Government sought to increase local control of the retail-banking
sector. In response, now Standard Chartered Bank reduced its stake in
Standard Bank of Nigeria to 38%. Once it had lost majority control,
Standard Chartered wished to signal that it was no longer responsible
for the bank and the bank changed its name to First Bank of Nigeria in
1979. By then, the bank had re-organized and had more Nigerian Director
In 1982, First Bank opened a branch in
London, that in 2002 it covered a subsidiary, FBN Bank (UK). Its most
recent international expansion was the opening in 2004 of a
representative office in Johannesburg, South Africa. In 2005 it acquired
MBC International bank Ltd and FBN (Merchant Bankers) Ltd. Paribas and a
group of Nigerian investors had founded MBC in 1982 as a Merchant; it
had become a Commercial Bank in 2002.