SOLD BY: PROSPECTS AND CHALLENGES OF INFORMATION TECHNOLOGY IN NIGERIA BANKING SECTOR
(A Case Study of GT Bank Plc (GTB) Abuja)
ABSTRACT
This study investigated the
prospects and challenges of information technology in modern banking
operation in Nigeria with references to GT Bank and had for its
objectives the following: evaluate the impact of electronic banking on
the operations of financially institutions in the country. Examine the
effect of information technology on bank customer relationship; identify
barriers to efficient information technology system written a financial
institution. The simple percentage and the Chi-Square method were used
for the analysis. The findings show that the key factor to success in
the banking business in Nigeria is good patronage by the customers. The
customers have to be satisfied in terms of meeting their demands
properly through appropriate information channels. The customer on the
other hand have shown wide acceptance of information technology in
banking service delivery. This is evident, usually huge turnover and
increased profit declared at the end of financial year of banks. The
following were also recommendations. The banks must be focused in terms
of their needs and use the right technology to achieve goals rather
than acquiring technology of internet banking because other banks have
it. Government participation in ensuring vibrant telecommunication
industry must be visible to reduce or remove avoidance cost of
implementing e-commerce and internet banking: regulating authority like
C.B.N (Central Bank of Nigeria) must stipulate standards for the banks
to follow to avoid making Nigerian banking sector a dumping ground for
the outdated technological infrastructure: Training and manpower
development is another major problem militating against the growth of
e-commerce in the country. Government must take right IT policy by
ensuring that computer communication equipments and other IT
infrastructure to a larger extent are manufactured in the country so
that people can acquire first hand necessary money laundering, fraud and
security risks posed by net banking and e-commerce, the necessary legal
threat and security posed to net banking and e-commerce, the necessary
legal codes banking the industry must be established this will enhance
the growth of the industry.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Although a lot of research works have
been done on the prospects and challenges of information technology in
the banking industry, these research works were broad based, while a few
were actually carried out on the role of information technology in
modern banking operations.
Modern banks now realize that only those
that overhaul their payment service delivery and operations are likely
to service and proper in the 21st century. This is due to the
presence of globalization, consolidation, privatization, deregulation
and rapidly changing technological environment. In order to properly
place themselves in favourable positions for competitions and be one of
the corporations to be reckoned with in the new century, banks make use
of internet facilities to execute mobile making. This is developed by
using personal computers (PCS) to form local area networks (LAN) and
wide area networks (WAN) through client/server technology (Davenport,
1993).
Many banks have installed modern
computer interconnectivity backbone that would enable them achieve their
communications of data and multimedia over internets, intranets and
extranets.
They also realize that they have to
achieve not only management/staff will computer literacy but what could
be called information literary i.e knowing how to locate,, analyze,
store and use information.
All staff and managers in a modern bank
need to be able to search and gather data from different sources,
analyze them, select relevant ones and organize them in such a manner as
to allow informed decision making in the organization.
Banks of the future realize that the
banking and other banking tomorrow requires more of electronic
manipulations and shuffling of bits based money and other banking
transactions, instead of paper. In other words, paper base of
transactions, instead of paper. In other words, paper based
transactions, like the internet banking services (Connel and Saleh,
2004). Whether a bank would be successful or not depends on the extent
to which it invests on internet and communication technology (ICT) and
how she uses it in an innovative manner. This area has been tip to be a
major competitive ground for banks that are operating in the post –
consolidation era.
What is the trend in the use of information technology in Nigerian banking industry?
To what extent does information technology chance employees and organizations performance?
1.2 STATEMENT OF THE PROBLEM
Business need to continuously find
better and faster ways to adapt to the competitive market place in order
to complete in today’s high technology and fast paced environment.
According to Hammer and Champy (1993) learning organizations provide a
framework that encourages finding better and faster way to adapt in
today’s high technology and fast paced world by:
- Looking at the whole versus the parts a systematic perspective.
- Detecting and correcting errors.
- Improving actins through knowledge and developing the broad skills of their work force.
These days computers and information
processing are in common usage. Computers influence what decisions are
made, when decisions are made, what and who is available at the point of
decision and who is asked to decide computers and information
processing affects how work is organized and how employees fell about
work (Stephen, 2012).
From my perspective, the essential
element of management of information provision and this information
technology system are expected to heavily influence management and
business operation and as such the main thrust of this research work is
to investigate the extent of this influence with special focus on modern
banking operations in Nigeria.
1.3 OBJECTIVES OF THE STUDY
The study generally in kinds to
investigate the prospects and challenge of modern banking operations in
Nigeria, and to specifically:
- Evaluate the impact of electronic banking on the operations of financial institutions in the country.
- Examine the effect of information technology on banks customer relationship.
- Identify barriers to efficient information technology system within a financial institution.
- And from the findings make suggestions on how to make information technology system more efficient in modern banking operations.
1.4 RESEARCH QUESTIONS
This research work shall be guided by the following research questions:
- Does information technology contribute to the efficiency banks and bank customer relationship in Nigeria.
- To what extent would information technology improve the fortune of banks?
- Should all banks in Nigeria venture into electronic banking services rather than continuing with the traditional banking?
1.5 RESEARCH HYPOTHESIS
In line with objective of the study, the understated hypothesis will be tested for its validity:
H0: There is no relationship between the adoption of information technology and the modern baking operations in Nigeria.
1.6 SCOPE OF THE STUDY
Nowadays, financial originations and
other business organizations in general need to identify with the fact
that information technology system has a strategic impact on their
business. This research work shall strict contribution to this
recognition and understanding by examining the impact and trend of
information technology within the financial business sector in Nigeria.
The focus of this study shall be on the
adoption of information technology in banking operation by Nigeria
banking operations of GT Bank Plc. This study shall cover the period
since the introduction of information technology in Nigerian banking
sector to date. Information technology was introduced into Nigeria
economy upon the commencement of the electronic payment scheme in 1996.
All the various information technology related schemes introduced since
this period to date shall be examined in the course of the study.
1.7 SIGNIFICANCE OF THE STUDY
A vital component of any move towards
better business performance is an integrated information technology
infrastructure that supports an organizations internal requirements for
greater performance as well as compliance with market and industry
regulations. This study is significant in the following ways:
- It would have a direct effect on the efficiency and effectiveness of the use of information systems in the various steps of the modern banking operations.
- It would enable employees and managers who are involved in the information systems of their organization to see opportunities for improvement in the use of information technology systems thereby improvement in the use of information technology system thereby improving the organizational productivity.
- It would also be an invaluable tool for student academic, institutions and individuals that want to know more about the relevance of information technology in modern banking in Nigeria.
1.8 LIMITATION OF THE STUDY
The following limitations were encountered by the researcher in the course of carrying out this study.
Time: This has always
been a limiting factor for a research of this kind, because the
structure needs to complete his work within a specified time frame.
Data Collection: The
problems of data collection was a recurring decimal, since bank
officials were not ready to release classified data neither were they to
be found through other official sources.
Therefore, the researcher had to limit herself to the available data for this study.
Finances: Research has
always been cost intensive, as the researcher had to make various
journeys, photocopy materials and obtain official information. Thus,
whereas the need for finance abounded, it’s supply was limited.
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