As Information Technology is the modern trend in
banking today, it's very imperative for banks to access its impact operational
performance so as to justify if the huge capital invested on it is justifiable
or not, analyze their problem and proffer possible solutions. The Objective of
this study is to examine how the adoption of Information Technology affects the
'operations of commercial banks in terms of effectiveness, efficiency,
competitiveness, customer base and globalization of the bank. The main research
instruments used are questionnaire and personal interview for staffs and
customers of the bank. The simple frequency percentage was adopted as the
statistical measure and hypothesis testing was analyzed using chi-square. In
conclusion, the study revealed that Information Technology has tremendously
improved growth and performance of the Nigerian Commercial banks. Information
Technology has led to increase customer satisfaction, improved
operational efficiency, reduced transaction
time gives the bank a competitive edge, reduced the running cost and ushered in
swift response in service delivery. The, research recommended that Government
should improve the electricity supply in the country, they should support and
loan money to local IT rums to foster importation, lower tariff on importation
of Information technology related equipment and their agencies and regulatory
bodies should, upgrade their equipment as well. The private sectors should
invest into improving electricity and the banks should continuously implement
customer centered IT products and services of international standard.
CHAPTER ONE: INTRODUCTION
of the study
Background of United Bank for Africa (UBA) Plc
of the Research Problems
of the Study
and Limitation of the Study
of the Study
1. 9 Organization
of the Study
Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
Researches on Information Technology
of Information Technology
of Information Technology in Banking Industry
2.6 Computer technology in banking industry
Technology in growing Nigerian financial Market
Information Technology and Nigerian
of applying Information Technology
facing the application of Information
in Nigerian Banks
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research Design
3.3 Method of data collection.
3.4 Method of data analysis.
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.2 Classification and Analysis of Responses
4.3 Personal Information
Analysis and Interpretation
4.5 Hypothesis Testing
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings
of the study
Development in a country can be measured in terms
of its overall social, economic and political development. But no matter how
developed the country is, it cannot be self-sufficient, there is an everyday
urge to improve in the social relationship, economic development and politics.
In Nigeria, during the pre-colonial era, there is
always an interaction which starts mostly from trading activity which enable
the country to exchange what it has for what it requires. Trading was carried
out among the various tribes that made up the present Nigeria nation through
the primitive methods of trade by barter system which is the exchange of goods
for services. Likewise, objects like shells, cowries, beads, etc. were adopted
as means of exchange. However, as society grew more complex, these crude methods
of exchange became insufficient. Coins and paper notes were introduced and
these made it easy for any amount of goods and services to be acquired at the
exchange of such coins and paper notes.
Thus as the nature of businesses became more wide
and complex, it became very imperative for all sectors to be connected with a
modern means that would be simpler, faster and more convenient. This gave birth
to the modern day banking system using information technology. The banking
industries are now getting connected with the information technology facilities
which make banking operation, service and business activities easier, faster,
more efficient, and more effective for individuals and organizations alike to transact businesses. The impact has become far
reaching to the extent that organizations jostling for relevance in a
competitive environment cannot help but embrace the potentials of the
Information Technology (IT) is a man-made resource,
embracing principally the electronic technologies of computers and
telecommunications (voice, data, and video), and comprising of both electronic
hardware and computer software. The significance of IT in today's successful
organization cannot be underestimated. It plays a major role in the success of
the organization in today's highly competitive world by providing easy and fast
means of collecting, storing, retrieving, processing, transmitting and
distributing information. There can be various other factors that determine the
success of a firm; and a firm may use various strategies to pursue the path of success.
However, fast and easy access of information through the use of IT is very
important to the -firm because it influences all the other success factors, and
the competitive strategies cannot be practically implemented without its
support. Therefore, no business-firm that minimizes the use of IT can attain
the topmost position in its business. This is very much true in the case of
financial institutions, which include commercial banks.
Commercial banks have a major role in the economic development
of a country. They are the major financial intermediaries between the sources
of funds and the users of funds, and their business is heavily dependent on information
related to the fund market, which includes fund suppliers; fund users, brokers;
information related to the central bank, and Ministry of Finance directives
that they have to follow; and information related to their competitors. Besides, their business also includes
providing financial information to their customers. Hence, commercial banks are
highly information intensive, and the use of IT by them, for easy and fast
means of information collection, storage, retrieval, processing, transmission,
and distribution of information, should have extensive contribution to their performance.
The use of IT is widespread - from the most
developed countries through the developing countries to the least developed
countries, although the extent of overall use is directly related to the level
Commercial banks, since they are highly information
intensive, have invested in IT extensively. Even in a country like Nepal, a
developing country still at the lower rungs of the development ladder, new
banks in the near past years started their operations with computerized
systems. In Thailand, another developing country that is trying to climb on to
the developed platform, "commercial banks have computerized 'operations,
and many of their services/products are IT based. In developed countries like
the US and Canada, IT has become a necessity for financial institutions if they
want to survive in the market, and the financial institutions keep on trying to
come out with new services/products which are IT based, Pritam (2002).
Background of United Bank for Africa (UBA) Plc
United Bank of Africa (UBA) Plc is the West
Africa's largest banking and financial services group as measured by asset
base, number of customers, branch network and profitability. It provides
personal and commercial banking, wealth management services, insurance,
corporate and investment banking and
transaction processing services. The bank employs more than 17,000 staff (Core
and support) who serve their over 6 million personal, business, public sector
and institutional customers through their offices in Nigeria, Ghana, Cameroon,
Cote d' Ivoire, New York, London and the Cayman Island.
As a leading player in the African financial
services sector, the banks aspiration is to fly the flag of African excellence
within the global financial community and to be a role model to other African
The United Bank of Africa (UBA) Plc. has
largely been a Nigerian and West African Bank. As the largest financial
services company (by balance sheet size, branch network, customer base and
profitability) in West Africa and the biggest listed company in Nigeria (by
market capitalization, December 2007), the group has been recognized as a
leader within the financial services industry in the region and a key driving
force of the region's economic development. UBA now has presence in seven
African countries, spanning West, Central and East Africa, with main operations
in Nigeria and Ghana, two of the most vibrant economies of Africa.
Africa and beyond.
UBA is intensifying its efforts to extend its reach
beyond West Africa into the rest of the continent, as it pursues its vision to
be the undisputed leading and dominant financial services group in Africa.
Beyond Africa, the group's aspiration .is to be the bank of choice for all
transactions involving Africans and Africa- related businesses, wherever these
may be around the world. In addition to presence in the Cayman Islands, UBA is
the only Sub-Saharan African Bank with regulatory presence in New York (Dating
back to 1984).
With the establishment of UBA Capital (Europe) Ltd,
the Group's London-based investment banking arm regulated by the financial
services authority (FSA) , UBA became the only African' bank with dual
presence" in both New York and London. UBA Capital will be the Group's
beachhead for launching into the rest of Europe. In Asia, UBA is currently
focused on the most populous and fastest growing economy in the region-China.
UBA Group recently entered into the Memorandum
of Understanding (MoU) with
state-owned China Development Bank (CDB), China's second biggest bank, on a partnership
deal for financing long-term infrastructural projects across Africa, UBA (2007
International Institutional Investors
The exiting prospects for UBA Group have attracted
the attention of international investors seeking emerging markets
opportunities', such as the Board of Directors of the International Finance
Corporation (IFC) in March 2007. The, private sector financing arm of the World
Bank Group, granted UBA a US$50Million convertible
debenture loan as part of a US$75minillion
financing and advisory services package approved for the group. The US$50 million
inflow was converted into equity on September 30, 2007. In May 2007, the.
African Development Bank (ADB) too~ a US$50 million equity position in the UBA,
the first time it has made a direct equity investment in a private sector
organization on, the continent throughout its 43-year history. In addition, a
Global Depository Receipts (GDR) programme jointly placed and managed on the
international securities markets by JP Morgan Chase and Renaissance Capital
raised approximately US$300 million from other international institutional
investors, during UBA Group's combined rights issue and public offer in April
UBA is the clear leader in the deployment of
solutions across electronic channels in West Africa. As at 30 September 2008
it has 1,256 ATMs, 3,296 POS machines deployed. Outside of Nigeria, they had a
further 55 branches and 76 ATMs. During 2008, UBA processed 10% of the total
value of all POS transactions in Nigeria. In 2008 UBA also pioneered the
deployment of cheque deposit ATMs into the Nigerian market. In May 2009, UBA
again pioneered the first cash deposit A TM in Nigeria. These successes will be
extended to the rest of Africa.
UBA remains the only bank in Nigeria with
a full electronic platform for payroll administration for corporate clients.
Going beyond payment of salaries, corporate organizations and given a convenient, secured electronic alternative
to managing employees.
Some of the banks e-banking services include:
U-Direct, U-Mobile, EMS, Bank Collect, Pay Direct, U-Pay, SMS/E-Mail Alerts,
U-Dividend monitor, E-Dividend, Dubai Visa Solution, Etranzact, Schools Online,
UBA has maintained a consistent and solid financial
performance in its long history. They have a history of leading and pioneering
innovations, in the Nigerian financial sector. The following are
parts of the bank's landmark achievements:
UBA was the
first among international banks to be registered under Nigerian Law in 1961.
UBA is the
first Nigerian bank to offer an IPO following its listing on the Nigerian Stock
Exchange in 1971
UBA is the
only sub - Saharan African bank (ex-RSA) with a branch in USA (New York)- set
up in 1984.
UBA was the
first Nigerian Bank to introduce a Cheque Guarantee Scheme known as UBACARD in
UBA is the 1st
and only Nigerian bank to obtain a banking license in the Cayman Islands -1988.
UBA is the
only Nigerian company with a GDR programme - 1998 (1st for a Nigerian Bank as a
means of facilitating international investor interest).
Bank in Nigeria [Euro money 2000)
UBA is the 1st
Nigerian Bank to obtain a banking license in Ghana -2004.
UBA led the
consolidation in the Nigerian banking industry with merger of Standard Trust Bank
Plc and UBA in 2005.
excellent credit ratings (short and long term); Global Credit Rating (SA) AA+
and A+ in 2005
UBA was the
first to introduce the Nigerian Government Bond Index in 2006.
UBA is the
first ever Nigerian Bank to surpass the
balance sheet size (including contingents) - 2006.
UBA is the
first Nigerian Bank to enter into strategic relationship with the international
Finance Corporation! (IFC).
UBA is the
first private sector organization in Africa to benefit from a direct equity
investment by the African Development Bank.
UBA is the
first Nigerian financial institution to introduce a loyalty programme (the
Lion's Pride Reward Scheme).
Markets in collaboration with Federal Mortgage Bank of Nigeria (FMBN) was the
first bank to introduce a mortgage bond backed by securitization of black
UBA is she only Sub-Saharan
African Bank (ex-RSA) with operations in the USA (New York established since
1984) and London.
UBA is the largest
e-banking footprint in Nigeria (Inters witch 2007).
UBA is the
largest Nigerian bank by assets, deposits, and branch, ATM and customers
UBA is ranked
Number One Banklin Nigeria (Agusto & Co, 2007).
UBA is the
second highest moving Nigerian bank according to The Banker world rank (The
banker, July 2008).
OF THE RESEARCH PROBLEMS
The advent of information technology in the
operations of the commercial banks in Nigeria among other sectors has brought
about several noticeable developments but at the same time, it brings about its
The questions this research work intends to answer
are as follows:
1. How has an information technology aid banking
2. Why are banks unable to strictly comply with the mission
statement corporate mission? With information technology, some bank management
does not adequately plan to meet the services quality. For example, the required - number of customers to attended to by a
cashier within the daily working hours to guide against long queues is
neglected- this causes delay in service delivery time leading to long queues in
the banking hall.
3. Why is high incidence of bank fraud borne
This fraud ranges from ATM card fraud, internet
banking fraud, email and text message fraud, fund transfer to untraceable
offshore accounts, among others.
4. Does huge investment into information technology in banks have a
proportionate profit return?
OF THE STUDY!
The objective of the study is to examine how the
adoption of information technology affects the operations of commercial banks
in Nigeria such as;
1. How the introduction of inf01mation technology has
influenced bank performances as well as assessing logically whether the
adoption of information system has influence, on the growth and development in
the banking sector.
2. Also to find out the reason why banks nowadays have
to abandon the former ways of operations to modern banking such as e-banking
and identify the problems arising from the operational system of the commercial
banks in Nigeria.
3. To-investigate into the extent of effectiveness and
efficiency in banking sectors after the introduction of information technology.
4. To examine the modes by which commercial banks can
improve on their service delivery in order to attract depositor's funds.
5. To access how information technology helps in the
reduction of cost and benefit in increasing the revenue profit of the bank.
6. To access how information technology
has assisted if the enhancement
of globalization of Nigeria commercial banks.
7. To access how information technology has affected
the customer base of the banks.
8. And finally to make recommendations based on
1. Does the
introduction of information technology have influence on bank performances?
2. Is there any reason why banks'1owadayS have to abandon the
former ways of operations to modern banking such as e-banking?
3. Are there effectiveness and efficiency in banking sectors
after the introduction of information technology?
4. What are the modes by which commercial banks can improve on
their service delivery in order to attract depositor's funds?
5. In what way has information technology helped in reducing
the cost and benefit of the bank?
6. Does information technology assist the enhancement of
globalization of Nigeria Commercial Banks
7. Does information technology affect the customer base on the
H1: The use of new information technology leads to improvement
in banking services.
Ho: The use of new information technology does not lead
to improvement in banking services.
H1: The use of information technology gives the bank a competitive
edge over other banks in the banking industry.
use of information technology, does not give the bank a competitive edge over
other banks in the banking industry.
Hi: The use of new informational technology has
contributed to the profitability and growth of the banks
Ho: The use of new information
technology does not contribute to the profitability and growth of the bank.
AND LIMITATION OF THE STUDY
The research work covers the role information
technology plays on the banking operations of commercial banks in Nigeria.
Specifically, the information in this research work is limited
to happenings ·in the United Bank for Africa
Pic. Emphasis is laid on activities in
the United Bank for Africa Plc, in selected branches, in Lagos. The period of
the study is to be focused on 2004-2010.
The major limitations of this research work are the
constraints encountered in the use of questionnaires for generating data
information. Bank customers often find the efficiency 0 the
operational system of the bank in different ways or perspectives; hen e, it is
not possible to determine the exact level of differences between" belief
and practice in the banking operation.
The bank staffs are not ready to give out
information in any form particularly in writing as it may be required in the
case of questionnaires due to secrecy. To get information r data from' these
groups of people, it takes a long process one has to exercise a lot of
Due to time and financial capabilities, the researcher
was unable to cover all the products of the bank that has been made possible
through information technology. I limit my findings to elective banking
department in head office at Lagos and some of the branches in Lagos state.
OF THE STUDY
The banking system is required as a catalyst for a
rapid macro-economic development of other sectors of the economy; hence, its
stability should be dispensation. Going by the recent distress in banking industry in
Nigeria, the level of public confidence in the sector has dwindled and this has
led to the instability syndrome in the sec or and as such the public assurance
and confidence on efficiency in the private sector in decaying.
The major cause of this syndrome can be attributed
to the problems inherited in the banks operational system. The quest for
globalization and commercialization
has brought about innovations in technology. The digital age and the potential
threat posed by non-traditional competition which necessitates innovation has
made it inevitable for Nigerian commercial banks to improve upon their operating
as they face evolving revolution are the global and domestic financial industry.
It also helps prepare banks being confronted with increasingly sophisticated
customer base compelling them to offer today what their customers would be
Banks have to deviate from just being a profit
making bank to a more conscious customer centered institution.
This research will enable banks to identify ways of
remaining competitive in repositioning towards meeting the challenges imposed
by global banking.
Also, it is expected that the work will contribute
to the bank's future projections on strategies to be used in attracting
depositor's funds, reduce queues in the banking hall, the bank's management
Finally the research work will also be a
contribution to knowledge in academic field and serve as a source of reference
to researchers who would carry out research on similar study i the future.
Data for this research work will be collected using
two of data gathering techniques. The primary source will be facilitated
through questionnaires to be administered at random among staff and customers
of the selected bank. Information from internet, journals and articles and the
use of textbooks as well as the CBN bullion will constitute the secondary
source of data for this research work.
Also, primary data to be collected for this project
will be analyzed through the descriptive approach, while the secondary data
will be analyzed using tables, frequencies and percentages; Data to be
collected in this regard include data on bank productivity, capacity
utilization and employment size.
OF THE STUDY
This research work contains five chapters.
Chapter One contains the introduction of the study,
statement of problems, technical terms as well as the plan to objective of the
study, statement of Hypothesis, scope of the study, justification of the study,
research methodology, Operational definition of technical terms as well as the
plan to the study.
Chapter Two covers the literature review while Chapter
Three deals with research techniques and source of data.
The data gathered in Chapter Three are presented,
analysed and interpreted in Chapter Four while the Summary, Conclusions and Recommendations
of the findings were discussed in Chapter Five.
DEFINITION OF TERMS
Computer Crime: Crime actions accomplished through the use of
computer systems, especially with intent to defraud, destroy or make,
unauthorized use of computer system resources.
Computer Terminal: Any 1nput/output telecommunication links to a computer.
Data: Facts or observations about physical phenomena or business transaction.
Data Base: A collection of logically related records or files. It consolidates many
records previously stored in separate files so that a common pool of data
records serves many application
Data Processing: The execution systemic sequence of operations performed
upon data to transform it into information
Documentation: A collection of documents or information that
describes a computer- program information system or required data processing operations.
Electronic Data Processing: The use of electronic computers to process data
Electronic Mail (e-mail): The transmission, storage, and distribution of text
materials in electronic form over communication networks.
End User: People who make use of information system.
Fault Tolerant System: Computer that have multiple central processors, peripherals
and system software that are able to continue operations even if there is a
major hard ware or soft w re failure.
File: A collection of related data records treated as unit
Information: These are data place in a meaningful and useful context for an end user.
Local Area Network (LAN): LAN is a communication network that typically connects
computers, terminals a d other computerized devices within a limited physical
area such as an office building, manufacturing plant or other work sites.
Manual Systems: Systems that require continual human operation and intervention
that utilizes simple data recessing tools such as paper farms, pencils and
Master File: A file that is either relatively permanent or one that is treated as
authority in a particular jab.
Network: An inter-connected system of computers, terminals and communications
channels and device.
Online: Pertaining to equipment or devices under the control of the central processing
Output: Computer results or data that has been processed into useful information.
Programs: A set of instructions that cause a computer to perform a particular task.
Secondary Storage: Storage that supplements the primary storage of a
company system also known as AUXILLIARY STORAGE.
Software: A computer program supplied by Computer Manufacturers, independent
software companies or other computer programmers and users.
System: An arrangement which involves the handling, processing or manipulation of
resources of whatever type so as to meet objectives.
Transaction Processing System (TPS): An information system that processes data arising from the occurrence of
User-Friendly: A characteristic of human-operated equipment and
system that makes them safe, comfortable and easy to use.