INFORMATION TECHNOLOGY AS A COMPETITIVE TOOL IN NIGERIA BANKING SECTOR.


Content

 

ABSTRACT

 

As the world is rapidly moving towards knowledge based economic structure and information societies which comprises of network of individuals, firms and countries that are electronically linked together and having inter-dependent relationship, there is need to exploit the means by which information technology can serve as a tool to firms and countries at large so as to have a competitive edge over others in delivering their operations.

 

This project was embarked upon to assist and support the banking industry, especially Nigeria Banking  to give due consideration to the cost and other implications of the information technology to be deployed and as well to consider the benefits, advantages and contributions of the information facilitates before its being deployed.

 

This project covers over severity percent of the total number of Nigeria Banking  Branches in Nigeria. Therefore, the research work give a good representative picture of what is obtainable in Nigeria Banking  in Nigeria.

 

The purpose of this research work is to serve as an ‘eye opener’ to the Nigeria Banking  and their branches as a whole on the importance of information technology to their banking operation and how these facilities can be used to create a competitive edge by the firms in the industry

 

TABLE OF CONTENTS

 

Title Page

Certification

Acknowledgement

Dedication

Abstract

Table of contents

 

CHAPTER ONE:      INTRODUCTION

1.1       Background of the study

1.2       Statement of problem

1.3       Objectives of the study

1.4       Formulation of research questions

1.5       Formulation of hypothesis

1.6       Research methodology

1.6.1  Sources of data

1.6.2  Sample size

1.6.3  Data presentation and analysis

1.7       Significance of the study

1.8       Scope and limitation of the study

 

CHAPTER TWO:      LITERATURE REVIEW

2.1       Overview of information technology

2.2       Historical background of information technology in Nigeria Banking

2.3       Information technology facilities of today and future.

2.3.1  Smart cards

2.3.2  Voice input

2.3.3  Handwriting recognition

2.3.4  Agents

2.3.5  Virtual reality

2.3.6  Cross platform software

2.3.7  Fibre optics

2.3.8  Wireless computers

2.3.9  The office of the future

2.3.10      Simulated work

2.3.11      Interconnected  work environment

2.3.12      Paperless office

2.3.13      The home of the future

2.3.14      Telecommuting

2.3.15      Education

2.3.16      Education

2.3.17      The internet

2.3.17.1 Electronic mail

2.3.17.2 File transfer protocol

2.3.17.3 Terminal emulation link network

2.3.17.4 News groups

2.3.17.5 Gopher

2.3.17.6 Worldwide web

2.4       Information technology as tool in enhancing the  performance of banking operations.

2.4.1  Customer services

2.4.1.1     Opening an account

2.4.1.2     Self service teller

2.4.1.3     Home of electronic banking

2.4.1.4     Customer account mandate maintenance

2.4.1.5     Stopped cheques

2.4.1.6     Reversal of erroneous entries

2.4.1.7     Opportunity management

2.4.1.8     Full online, real-time capabilities

2.4.2  Transaction processing and recording

2.4.2.1     Cash

2.4.2.2     Cheques and clearing

2.4.2.3     Fund transfer

2.4.2.4     Value dating

2.4.2.5     Rate charges

2.4.3  Risk management

2.4.3.1     Corporate risk policy and procedure

2.4.3.2     Credit risk disbursement

2.4.3.3     Limit monitoring

2.4.4  Corporate planning

2.4.4.1     Effective presentation

2.4.4.2     Service quality

2.4.4.3     Resource allocation

2.4.5  Financial controls

2.4.5.1     The chart of account

2.4.5.2     Budgeting and budgetary controls

2.4.5.3     Profit making process management

2.4.5.4     Asset and liabilities management

2.4.5.5     Statutory returns

2.4.6  Auditing and controls

2.4.5.1     Branch visit

2.4.5.2     Auchi schedules

2.4.5.3     The audit trail

2.4.5.4     System of controls

2.4.5.5     Exception reports

2.4.7 Management services

2.4.7.1.1           Human resources management

2.4.7.1.2           Compensation monitoring

2.4.7.1.3           Staff loan administration

2.4.7.1.4           Staff file

2.4.7.1.5           Tracking employee career development

2.4.7.1.6           Corporate affairs

2.4.7.1.7           Legal affairs

2.4.7.1.8           Administration

2.5    Problems of information technology in Nigeria Banking 

2.5.1          Systems downtimes

2.5.2          Lack of investment capital

2.5.3          Lack of knowledge of how to develop IT systems internally

2.5.4           Lack of internal maintenance skills or culture

2.5.5          Lack of IT management knowledge

2.5.6          The absence of IT strategies

2.5.7          The gimmicks of Vendors

2.5.8          Lack of the basic infrastructure and facilities for the exchange of information.

2.5.9          Lack of maintenance culture in Nigeria Banking  public networks

2.5.10      Unhelpful government action

2.5.11      Banks reluctance to collaborate

2.6       Competitive advantage through information technology

CHAPTER THREE   RESEARCH METHODOLOGY

3.0       Introduction

3.1   Source of data

3.1.1  Primary data

3.1.2  Secondary data

3.2    Sample size

3.3    Method of investigation

3.4       Method for data presentation and analysis

 

CHAPTER FOUR:     PRESENTATION AND ANALYSIS OF DATA

4.1       Presentation of data

4.2       Analysis of data

4.3       Testing of hypothesis

 

CHAPTER FIVE:       SUMMARY, FINDINGS, CONCLUSION

AND RECOMMENDATION

5.1       Summary

5.2       Findings

5.3       Conclusion

5.4       Recommendation

Bibliography

Appendix

 

 

 

CHAPTER ONE

1.0   INTRODUCTION

1.1   BACKGROUND OF THE STUDY

The recent advancement in information technology is bearing central to the process of socio-economic development. Information Technology offers new ways of exchanging  information and transacting business. 

 

The world is rapidly moving towards the advancement of  economic structures and information societies which comprises network of individual firm and countries that are linked electrically and having inter-dependent relationship.

 

Although information technology has become the norm for firms eager to survive competition in a stressful and turbulent environment like Nigeria. This has led to increase automation and networking of business processes (including internet connecting and deployment of corporate website). The banking sector has led this race. There are other strong reasons for investing in information technology.

The evolution of knowledge based economy is expected to result increasing, within economic enterprise, the world only succeeds to the extent that their employees can access and use information and knowledge effectively.

 

Some bank with information technology tools have positioned themselves in the market and cut a niche in quality service delivery. To enable a thorough understanding of the e-banking  model  S.W.O.T. analysis and strategies of information technology in Nigeria banking sector will be  reviewed.

 

1.2   STATEMENT OF PROBLEMS

 To understand information technology, this will serves as a competitive tool in Nigeria banking sector, the following issues will be looked into.

 

1.     Bank fails to understand that information technology is the strategy they will use to achieve their goals and objectives in this modern and dynamic economy environment.

 

2.     The cost of the information technology facilities, the bank requires huge sum of capital to acquire or import these facilities needed as competitive tools.

 

3.     Lack of expert, the bank require the services of some expert to operate some of their new technology that were introduced to the banking sector so as to compete well with their competitor.

 

4.     The maintenance of the information technology, banks find it very difficult at times to maintain this technologies because majority of  this technologies  were imported and their parts  are relatively expensive and scare.

 

1.3   OBJECTIVES OF THE STUDY

This study will be carefully carried out with the purpose of achieving the  following objectives.

 

1.     To determine the financial and operational implication of information technology as a tools in the Nigeria banking sector

2.     To determine the effectiveness and efficiency of the deployed  information technology to the Nigeria  banking sector as regards to market penetration.

 

3.     To ascertain the strength and weakness of the  banks in the development, usage and maintenance of the information technology facilities.

 

4.     To ascertain the opportunities and treats encountered by bans in the deployment, usage and maintenance of the information technology facilities.

 

1.6        SIGNIFICANCE OF THE STUDY

This study is very important as it examines the impacts and implication of information technology as a competitive tools in the Nigeria  banking sector with due consideration to strength.

 

This work will also shows the effect of information technology in the banking sector as well  as the weakness and strength that may result due to the deployed of information technology as strategic  and business models that are being mapped  and developed.

 

This study will be of importance to the bankers as it gives a focus on how to create profitable and sustainable market leadership, the academicians and student to mention, but a few.

 

1.7        SCOPE AND LIMITATION OF THE STUDY

The study will cover over 70% of the population of the  Nigeria banking sector as regards the deployment of information technology as a competitive tool.

 

The Nigeria banking sector has witnessed phenomenal changes especially since the mid 1990’s and these have manifested in the enormous volume and complexity of operations increase innovation and variety re-engineering.

 

1.4      RESEARCH HYPOTHESIS

Hypothesis 1

Ho:   Information technology does not increase the efficiency in

the management  of banks  and its services.

 H1: Information technology  increase the efficiency in the

management of banks and its services.

Hypothesis II

Ho:   The use of information Technology does not increase the

productivity of banks.

H1: The use of information technology increase the

productivity of banks.

Hypothesis III

Ho:   I.T. deployment in Bank  does not leads to increase 

in customer base.

H1:   I.T.  deployment in Bank leads to increase in customer

base.

 

 

 

1.5   FORMULATION OF RESEARCH QUESTIONS

(a)       Does the Nigeria banking sector need the deployment of information technology tools in their operations?

(b)      Does approach of tools can be deployed to create competitive strategies for the banks?

(c)       What are the strengths and weaknesses of banks in the deployment, usage and maintenance of the information technology?

(d)      What are the opportunities and treats of the deployed information technology to the Nigeria banking sector?

 

1.5   RESEARCH METHODOLOGY

The method to be adopted in the collection of data will be designed in such a way that it will give a  knowledge of what is actually happening in the Nigeria banking sector as regards to the use of information  technology as a competitive tools in on banking sector.

 

Furthermore, whether the deployment of the information technology as tool gives the banks strength and opportunities which does not expose the weakness and pose threat to the banks.

 

DEFINITION  OF KEY TERMS

Application

The use of which can information system s put, e.g. a payroll  application.

Automation

This is the word used to describe  the mechanization of industrial operations are processes.

Clearing

Is a process in which banks meet on banking days  at specific hours to exchange payment instruments, particularly drafts and cheques. The designated center where this is done is known as a clearing house.

Database

A related set of data organized by type and purpose

Electronic Mail (e-mail)

This is the use of computer network to disseminate information or even correspondent between different terminals irrespective of the distance, at a considerably high speed.

Encryption

The process of obscuring  information by modifying  it according to  a mathematical function known only to the intended recipient.

Extranet

The term used to describe a meta-network that results from the linking of Network from multiple organization.

Graphic user Interface (GUI)

A  computer shell program that represents mass storage devices, directories and files as graphical objects on a screen. A cursor driven by a pointing device such as a mouse manipulates the objects.

Information Super highway

It is amalgamation of partially existing information networks, services and end  systems such as PCs or TV- Sets. It consists o thousands of interconnected; interoperatable communication networks including terrestial andsatellite broadcasting, cable TV Network,  wired and wireless telephone system, commercial computer network services and the internet.

It is described as a system meant to deliver to all people the information they need, when they  want it and where they want it and at an affordable price.

Internet Protocol (IP)

This is the Network protocol that specifies the format for IP packets, called “datagrams” should be addressed and transmitted throughout an IP network.

Intranet

This is a privately owned (e.g. corporate) network that utilizes the open protocols and services associated with the internet, such as WWW, FTP etc, to share corporate information and improve internal communication.

ISP
This means internet service Provider. A company that provides a dial-up connections to the internet.

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