THE IMPACT OF INFORMATION TECHNOLOGY ON BANKING OPERATIONS IN NIGERIA
ABSTRACTAs information technology is the modern trend in banking today, it’s very imperative for banks to access its impact on operational performance so as to justify if the capital invested in it is justifiable or not, analyze their problem, and profit possible solutions. The objective of this study is to examine how the adoption of information technology affects the operations of commercial banks and the effects of information technology on banks, customer relationships The main research instruments used Are questionnaires from staff 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 reward that information technology has tremendously improved the growth and performance of Nigerian commercial banks. Information technology has lead to increase customer satisfaction, improved operational efficiency, reduced transaction time, gives the bank a competitive edge. The research recommended that government should support and loan money to local firms to foster importation, the lower tariff on the importation of information technology-related equipment, and their agencies and regulatory bodies should upgrade their equipment as well and the banks should continuously implement customer-centered IT products and services of international standard. CHAPTER ONEINTRODUCTION1.1 Background of the StudyThe low productivity, profitability, and efficiency of many Nigerian banks necessitate the introduction of information technology to find solutions to the challenges of the present-day banking system.This paper has tried to assess the impact of information communication technology on the efficiency of thirteen commercial banks in Nigeria. Madueme Ifeoma Stella (2010).The banking industry is one of the critical sectors of the economy whose contribution to the pace of development and economic growth cannot be fully quantified changes in today’s modern world reveals that the importance of natural factors cannot equip the banking sector fully to grapple with the exigencies of global completion. Madueme Ifeoma Stella (2010)According to Hanna (1994) information, flexibility, and fast response are the key new factors for coping with global competition information communication technology plays a critical role in these areas for the purpose of quality enhancement.According to Hanna, information technology transforms the way people do things, increasing the amount of information available to economic agents, information intensity of processes, occupations, institutions, products, and economics. It enhances the working of markets reduces transactions and co-ordination costs within and across enterprises and institutions.Information technology has radically changed how banking is doing all over the world, the volume and speed of banking transactions have 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 on the global criteria, especially improved revenue corroborates with findings of Laudon and Laudon 2008 that studies 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.The banking industry in Nigeria has witnessed tremendous changes linked with the development in information technology over the year. In Nigeria, information technology gave birth to electronic baking. This represents benefits such as anywhere banking, anytime banking, and elongated banking hours to customers. These benefits provide comfort, convenience, and ease of use for bank transactions. Before the advent of electronic banking customers could only make transactions in the banking hall.Electronic banking has facilitated the integration of the functions of some large banks that have several branches around the country on the centralized network so that transaction can be carried out at any branch on the network without the customer being physically present in the branch Woherem (2005)1.2 Statement of the ProblemDespite the fact that the introduction of information technology in the operation of the banks in Nigeria among other sectors has brought about noticeable development but at the same time, it brings about its attendant problems, because banks still find it difficult to strictly comply with the mission statement or corporate missionHigh, the incidence of bank fraud bone information technology. This fraud ranges from ATM card fraud, internet banking fraud, email and text message fraud.1.3 Research QuestionsThis research work shall be guided by the following research question What impact does information technology have on banking operations? To what extent does information have an effect on a bank's customer relationship?1.4 Statement of HypothesisThe hypothesis to be tested in the course of this research work isNull hypothesis - (Ho) There is no relationship between the adoption of information technology and modern banking operation. (Hi) There is a relationship between the adoption of information technology and modern banking operations1.5 The Purpose of the StudyThe general purpose of this is to examine the impact of information technology on the banking sector in Nigeria specifically the study aims to: Evaluate the impact of information technology on the operations of banking institutions in Nigeria. Examine the effect of information technology on banks, customer relationships.1.6 Scope of the StudyThe focus of this study shall be on the adoption of information technology in banking operations by Nigerian banks.The researcher shall examine the electronic banking operation of United Bank for Africa (UBA) Bodija Branch Ibadan as a case study.1.7 Limitation of the StudyThe major problem that might be encountered during the course of the study is Inaccessibility of some vital information relevant for the purpose of the study because the researcher cannot be opportune to access into banking information unit to see how information is being processed.1.8 The Significance of the StudyThis study is expected to provide a better understanding of the impact of information technology on banking operations. It is expected to elaborate the present impact of information technology in banks to see the present stage of the banks and provide a better solution to the challenges been faced by banks, as this study will help reveal possible challenges facing banks in Nigeria.The outcome of this study will help to evaluate the adoption of information technology by Nigeria banks; it will also justify the application of information technology in banking service delivery in terms of profitability of banks1.9 Definition of TermsInformation is data that has been processed through the computer system. Information is processed or analyzed data that informs a recipient about a situation.Information Technology: - According to Mejabi (2008), information technology is a general term that describes any technology that helps to produce, manipulate, store communicate and or disseminate information.Data: - Data are raw facts, figures, event from when information can be developed a data is a basic raw fact that can be processed and converted to a meaningful output called informationCommunication: - It is the transfer of ideas or information from the data processing system to the ultimate user the multi-purpose of communicating is to inform the recovery.Online: - It is a term used for a direct or immediate communication link between two devices online lines are contracted with offline links in which only direct communication is possibleOffline: - This is the term used for input devices and auxiliary equipment that are under the direct control of the central processing unitDisk storage: - This is data storage on an optional or magnetic disk in-memory system. It is characterized by low cost and relatively fast access to data stored on it Longley and Shain (1998).