THE IMPACT OF INFORMATION TECHNOLOGY IN THE DEVELOPMENT OF BANKING INDUSTRY IN NIGERIA

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THE IMPACT OF INFORMATION TECHNOLOGY IN THE DEVELOPMENT OF BANKING INDUSTRY IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

In the post distress Banking Industry era most, if not all banks embraced the re-engineering or restructuring programmes with application of information technology as a major component of such programmes. Akingbola (2010) stated that the objectives of such engineering include enhancing safety and soundness of the system for confidence and improving the Industry’s efficiency, responsiveness, delivery and its competitiveness in International banking standards.

One of the defining characteristics of the late 20th century in the Nigerian banking industry was widespread application of information technology, it is now obvious that any bank that refuse to join the information technology train in the new millennium with either be forced to close up or be sacked out rightly by the sophisticated consumers who have a wide area of choices to make in the highly competitive banking sector. It is therefore imperative for Nigerian banks to take the information technology challenge very seriously as banking has become a global business through information technology. The 21st century holds out a bright and prosperous future as Nigerian banks begins to climb up the upward plane in the information path way.

The world has become a virtual global village with the array of developments going on in, information super high way Babajide (2010). Of course, Nigeria represents a part of this development. Assisted by the deregulation measures introduced in the 1980s, there was an astronomical increase in the number of merchant and commercial banks. The situation in Nigeria produced a somewhat interesting scenario was accentuated by be keen competition at home in view of the unprecedented upsurge in the number of banks branches. There was the need not only to innovate and become modern there was a complete need to acquire a competitive edge to stay afloat in the market, in this fact of increased market pressure to innovate, customers demand more sophisticated products and increased convenience in service delivery. The adoption of automation and electronic banking products.

1.2    STATEMENT OF PROBLEM

To adopt and implement the new information technology in the Nigeria banking industry, there are some problems facing the sector, this study attempts to view the related problems and make possible solutions and recommendations. Incessant power failure has not provided the amount of support required for sustained computerization. Inadequate infrastructure which is responsible for the existing weak technological based. Lack of trust and confidence in the new products being packaged to replace cash. Irregular functioning of telecommunication facilities has hampered computer networking The uncompetitive banking sector before 1986 did not create necessary incentives for innovations. Another major environment problem is the low level of literacy in our society.

1.3    OBJECTIVE OF THE STUDY 

This study aimed to achieving the following objectives.

. To locate how information technology is best used in the development of banking industry in Nigeria.

. To assess the contribution of information technology to the banking industry

. To show the relationship between the concept of information technology and the banking industry.

. To identify the implication of this concept to the banking industry.

. To make recommendation for effective and efficient operation of computer in developing the banking industry in Nigeria.

1.4    SCOPE AND LIMITATION OF THE STUDY

This research was limited to information technology and the development of banking industry in Nigeria which the banking Industry served as the case study for the research work. Also funds were not available to the research for extensive travels to different Banks locations for materials.

1.5    SIGNIFICANCE OF THE STUDY

The concept of information technology on the banking industry is of much concerned to all banks in Nigeria, most of the banks have gone deeply into the system and come up with evidence of its importance. A study of this nature will help the banking industry to move towards automation and electronic banking than the manual to save the cost. It will help the bank to identify and utilize their best resources in automation to promote the industry in Nigeria. It will do much to motivate most the bank to take up the challenges of improving their system. It helps pin-point the areas that need information technology system most for basic concentration. This study will also provide the necessary and valid information for future uses or researchers.

1.6   DEFINITION OF TERMS

For the purpose of clarification the following terms as used in the study are:

Information Technology: Information technology is the acquisition or collection, processing, storage and dissemination of information in whatever format textual and numerical by a system comprising human beings techniques and tools.

Automation: This is the use of automation equipments and machines to do work previously done by people.

Electronic: The operation with the aid of many small components e.g. microclups, that control and direct an electric currents.

Computerization: This is the process of using a computer to control an operation at high speed with accuracy.

Banking Industry: This is a service industry where the banking service are rendered to the customers.