Information Technology is the modern trend in the banking sector today, it's very imperative for banks to access its impact on 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 g1oba1ization of the bank.


The main research instruments used are questionnaires and personal interview for staff and customers of the bank. The simple frequency percentage was adopted as the statistical measure and hypothesis testing was analyzed using chi-square.


The study revealed that Information Technology has tremendously improved growth and performance of the Nigerian Commercial banks. Information Technology has lead 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, it should support and loan money to local IT firms 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.



1.1     Background Information

1.2     Statement of the Research Problem

1.3     Objective of the Study

1.4     Scope of the Study

1.5     Limitation of the Study

1.6     Significance of the Study



2.1     Introduction

2.2     Information Technology Concept

2.3     Evolution of information Technology

2.4     Development of Information Technology in Banking Industry

2.5     Computer Technology in Banking Industry

2.6     Information Technology in Growing Nigerian Financial Market

2.7     Benefits of Applying Information Technology

2.8     Challenges Facing the Application of Information Technology

In Nigerian Banks

2.9     Historical Background of united Bank for Africa (UBA) Plc



3.0     Introduction

3.1     Research Design

3.2     Population and Sample

3.3     Method of Data Collection

3.4     Method of Data Analysis

3.5     Hypothesis of the Study




4.1     Introduction

4.2     Classification and Analysis of Responses




5.1     Summary

5.2     Conclusion

5.3     Recommendations









Globalization has made the world one big family and we all are part of it.  In Nigeria, during the pre-colonial era, there is always an interaction which starts mostly from trading activity which enables 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 he acquired at the exchange of such coins and paper notes.


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 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 evolution and recent developments in information and communication technology has come to shape the way organizations operate and do business. The emergence of the World Wide Web (i.e internet) and mobile telephony i.e. telecommunication system is the driving force behind this development. Consequently manual and traditional forms of doing business are suddenly becoming outdated for the sophisticated technology that is based on automation and interconnection of computers and other electronic devices vide electronic communication. For instance, ledger books, paper invoice, printed materials and business trips are being replaced with online billing and payments, elaborate website with product information and real-time teleconferencing across continent and time zones.


Information technology has radically changed how banking is done all over the world, the volume and speed of banking transaction has improved tremendously as a result of quantum growth in information technology which has created business opportunities for banks. The positive impact of information communication technology ICT on the global criteria, especially improved revenue corroborates with the findings of Laudon, and Laudon, (1991) that studied the entire cash flow of most fortune 500 companies and linked their success to Information System. They concluded that Information Technology directly affects how managers decide, how they plan and what products and services are produced.


Harold and Jeff (1995) contend that financial service providers should modify their traditional operating practices to remain viable in the 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.


The quest for survival, global relevance, maintenance of existing market share and sustainable development has made exploitation of the many advantages of Information communication technology (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 operations and the resultant effects.


Information Technology (IT) is the automation of processes, controls, and information production using computers, telecommunications, software and ancillary equipment such as automated teller machine and debit cards.


It is a term that generally covers the harnessing of electronic technology for the information needs of a business at all levels.

Nigeria banks since 1980s have performed better 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. The study, however pointed out that whilst most of the banks in the west and other parts of the world have at least one PC per staff, Nigerian banks are lagging seriously behind, with only a PC per capital ratio of 0.18, Woherem (2000).


Information and Communication Technology (ICT) is the modem handling of information- by electronic means which involves access to, storage of, processing, transportation or transfer and delivery (Ige, 1995). It refers to the convergence of the computer and telecommunication system in a seamless flow of information around the world. The fusion of computer and telecommunication and their uses in obtaining relevant and purposeful management information system is the main thrust of information technology. It is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a micro-electronic based combination of computing and telecommunications. The focus of ICT is on telecommunication and computerization. It implies the convergence of computing and communication (Telecommunication) technologies and its uses or application for global Internet, Intranet, Extranet, World Wide Web (www), Visual reality, Cyberspace-the New Digital Mentality and Culture (Uwaje, 2000). Communication Technology comprises the physical devices and software that link (connect) various computer hardware components and transfer data from one physical location to another. Connectivity has facilitated the use of electronic delivery channels. Distances and geographical locations are no longer barriers to financial transactions.


Electronic fund transfer has also been variously designed to case international transfer of money. In 1977, the international payment system known as SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) became operational. SWIFT enables user banks to use electronic mode to transfer international payments, statements and other banking messages. In Nigeria, first Bank's Western Union, Monogram of United Bank for Africa among others performs international funds transactions.


Information technology is the term which generally covers the use of electronic technology for the information needs of a business at all levels. It has made it possible for banks to:


1.       Improve in service delivery with the availability of online, real-time transactions.

2.       Funds transfer will be faster, more accurate and cheaper in charges.

3.       Capacity to process large volume of transactions which will require lower administrative cost.

4.       Reduction of cash transactions with long term prospects of minimal cash handling.

Information technology application by bank IS centered on customer's service.


Bank now responds to customers for balance on their account, statement of account and account activity enquiries. The work of front office teller (cashier) is at minimal (ATM) Banks are able to serve customers outside the ban king hall 24 hours a day, 7 days a week. Merchant customers are able to make local and international business transactions online real-time; they allow online payment via online, telephone or mobile payment medium (Interswitch, etranzact etc), with this payment switch, the merchant account holder's customers can make payment for goods and services without necessarily seeing the business merchant in person.


Competition has become stiff; banks now do things in different ways. Bank that has concentrated its activities in the old media can invest in the new media by recognizing its activities especially if it finds out, albeit painfully that it is losing ground to those competitors utilizing sophisticated technology.


This is the reaction Bertelman (a leading German company) early in year 2000 when it found out that its main internet partner (AOL) decide to merge with Time Warner. Bertelsmann decided to float a Bertelsmann. E­commerce Group to sell all consumer product produced by Bertelsmannn. E-Group to consumer via the internet. In the same vein, banks now merge and bigger banks acquire smaller ones to serve better with wider coverage.


According to Odubanjo (2000), Nigeria banks are responding albeit at a snail speed to the information technology revolution enveloping the universe. The deregulation of the banking sector in Nigeria in 1986 brought far-reaching transformation through computerization and improved bank service delivery. The watershed in the computerization of the Nigerian financial sector started with the changing policy environment enumerated with Structural Adjustment Programme (SAP) 1986.


Competition especially with new product has indeed become more intense and it had practically come to a point where commercial banks continuously come up with something unique to sustain their increasingly sophisticated customer's need or lose them.

Competition is "bound to be increasingly stiffer as Gates (1999) had envisaged more changes in business which includes the banking business in the next few years than it had experienced in the last 50 years.


The operational efficient of commercial bank will eradicate most abnormal situation in the banking sector like long queue, delay in transaction, safety and security and call for healthy competition among banks to bring about satisfaction to customers.



The advent of information technology in banking operations can be regarded as revolutionary. It has brought about noticeable changes in the way and manner banks are operated and in no small way improve customers' services. Yet some observers and banks practitioners have complained of its negative effect on customer service, bank fraud, money transfer to untraceable offshore accounts, among other challenges. Yet how ICT is operated in a typical market environment like Alaba International Market has not been well explored. Hence this study tends to fill this gap by contributing how ICT is operated in this area of the country’s economy.



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 information 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 modem 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 in 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 findings.



The research work centers on 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 PLC. Emphasis is laid on activities in the United Bank for Africa PLC, Muritala Muhammed Way and University of florin branches, both at florin. The period of the study is to be focused on 2004-2010.



The limitations of this research work are the constraints encountered in the use of questionnaires for generating data information. Bank customers often find the efficiency of the operational system of the bank in different ways or perspectives; hence, it is not possible to determine the exact level of differences between belief and practice in the banking operation.


The bank staffers were 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 or data from these groups of people, I had to exercise a lot of patience.


Also, due to time and financial capability, we were not able 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, Muritala Muhammed Way, florin and University of Ilorin blanch of United Bank of Africa PLC Branches.



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 the priority of the government most especially during the democratic 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 sector 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. Also, 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 operation as they face evolving revolution are being confronted with increasingly sophisticated customer base compelling them to offer today what their customers would be expecting tomorrow. 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 the global and domestic financial industry. It also helps prepare banks repositioning towards meeting the challenges imposed by global banking.


The study 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 policies.


Finally the research work will contribute to knowledge in the academic field and serve as a source of reference to researchers who would carry out research on similar study in the future.








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