PROSPECTS AND CHALLENGES OF INFORMATION TECHNOLOGY IN NIGERIA BANKING SECTOR

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must stipulate standards for the banks to follow to avoid making Nigerian banking sector a dumping ground for the outdated technological infrastructure: Training and manpower development is another major problem militating against the growth of e-commerce in the country.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 21^st 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:

1. Looking at the whole versus the parts a systematic perspective.
2. Detecting and correcting errors.
3. 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:

1. Evaluate the impact of electronic banking on the operations of financial institutions in the country.
2. Examine the effect of information technology on banks customer relationship.
3. Identify barriers to efficient information technology system within a financial institution.
4. 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:

1. Does information technology contribute to the efficiency banks and bank customer relationship in Nigeria.
2. To what extent would information technology improve the fortune of banks?
3. 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:

1. 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.
2. 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.
3. 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.

REFERENCES

Beny, M.J. A; Linott, G.S (1999), Mastering Data Mining: The Art and Science of customer relationship management new York: John Wiley and Sons.

Connel F. and Saleh M. N (2004) sic puzzles in electronic money and banking” IMF working paper, IMF institute Vol. 19. PP. 5-23.

Davenport, T. H (1993), process innovation: Re-engineering work through information technology, Boston; Harvard Business School Press.

Hackathorn, R. (2003), factors for implanting Active Data Managing Business processes Research Bulleted, electrical from http://www.itressearch.com

Hammer M. Chanpy, J. (1993) Re-engineering the corporation.

Hellinger, M; Fingerhult S. (2002) “Business Activity Monitoring. EAI.

Jersy: Natalic Anderson .PP. 11-36

Marting, W. (2003) Business Performance management Efficiently.

Meets Data Warehousing EAI journal, July PP 18-21

New warehousing: Retrieved from http//www.datawarehousing.com

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