IMPACT OF INFORMATION TECHNOLOGY ON OPERATIONS OF THE COMMERCIAL BANK’S IN NIGERIA

CHAPTER ONE

1.1 BACKGROUND 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 in politics.
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 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 e-revolutions.
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.