The Impact and Role of Information Technology in Nigeria

THE IMPACT AND ROLE OF INFORMATION TECHNOLOGY IN
BANKING DEVELOPMENT IN NIGERIA
(A STUDY OF SELECTED COMMERCIAL BANKS IN ANAMBRA STATE)
BY
FRANK KELVIN CHIADIKA
NAU/2001554388
PROJECT REPORT SUBMITTED IN PARTIAL FULFILMENT OF THE

REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE
DEGREE (B.Sc) IN BANKING AND FINANCE DEPARTMENT OF
BANKING AND FINANCE FACULTY OF MANAGEMENT SCIENCES
NNAMDI AZIKIWE UNIVERSITY, Nigeria
JUNE, 2006
APPROVAL PAGE
This is to certify that this work written by Frank Kelvin Chiadika is original and has
satisfied the standard in partial fulfillment for the award of Bachelor of Science Degree
(B.Sc.) in Banking and Finance in the Department of Banking and Finance, Faculty of
Management Sciences - Nnamdi Azikiwe University, Nigeria.
_________________________ __________________
Mr. Victor Ike Okonkwo Date
Project Supervisor
__________________________ __________________
Mr. Celestine Okaro Date
Head of Department
________________________ __________________
External Examiner Date
DEDICATION
This work is solely dedicated to the Almighty God who made it possible for me to start
and accomplish this work, and to my beloved parents, Mr & Mrs S. Chiadika for their
immense contributions towards the success of this project.
ACKNOWLEDGEMENT
My profound gratitude goes to the Almighty father who has given me the knowledge to
carry out this piece of work.
My special gratitude goes to my project supervisor, Mr. Victor Ike Okonkwo whose kind
direction and guidance made this project work a reality. May the good Lord reward him
abundantly.
My tremendous gratitude goes to my lovely parents Mr & Mrs S. Chiadika for their
tireless efforts, good advice and financial contributions, which encouraged me
throughout my stay in school. I also appreciate in a special way the contributions of
other members of my family especially my eldest sister and her husband for their
financial and moral support towards the success of this programme.
I equally recognize and appreciate the good works of my lecturers - Mr. Celestine
Okaro, Mr. U. Uloabachie, Mr. E.S. Ekezie, Dr. Steve Ibenta, Dr. Alex Mbachu, Mr. C.
Nwakoby, Mr. P. Adigwe, Lady Oge Adirika and many others.
Lastly, I thank and appreciate my good and lovely friends especially my roommates and
entire course mates for their lovely co - operations and encouragements.
ABSTRACT
This project report examined how information technology is changing the banking
arena. It shows how financial institutions and their clients' benefit from advances in the
arena. Advances in information technology has for instance led to increase space and
speed of banking transactions resulting in lower queuing by reducing customers waiting
time and improved service quality. It has also resulted in increased volume and quality
of transactions and improved staff efficiency. Advances in information technology
however have its own challenges. These problems are electricity power failure,
telecommunication failure, computer-aided fraud, lack of experts and personnel, high
cost of maintenance and training of staff. The challenges are especially in the areas of
regulations and fraud control.
The researcher instruments used were questionnaires, oral interview and personal
observations. Secondary sources of data were gathered from journals, dailies and
related textbooks and the sample size were derived from three commercial banks
located in Awka, Anambra State. The banks were:
1. United Bank for Africa Plc. (UBA)
2. Union Bank of Nigeria Plc.
3. First Bank of Nigeria Plc.
Questionnaires were administered to both the bank staff and customers in each bank.
The data generated were presented in tables, and analyzed using percentage response
and Likert - Scale of ranking.
CHI - Square (X2) were used to test the hypothesis formulated. It was found that the
use of technological equipments has enhanced the internal operation of banks in areas
such as Account updating, management of finance, Security of data, storing and
transfer of information. The external operations of services provided by the banks to
their many customers were also improved by the information technology for customers
enjoy safe, quick and easy fund transfer.
It was also found that information technology in banks has reduced the cost bank
services, customer-waiting time and increased efficiency of staff.
Technological innovations and staff training technology changes everyday, banks have
to create rooms for such changes, so that they update the services rendered to the
public by the purchases of new information system. There should be continuous
training and development programmes that must be vigorously implemented by banks
to update the skill of their staff. With the implementation of all these by banks, the
positive impact of information technology in the development of banking industries will
be realized.
TABLE OF CONTENTS
Pages
Cover page ---------------------------------------------------------------------------i
Title page-------------------------------------------------------------------------------ii
Approval page-------------------------------------------------------------------------iii
Dedication------------------------------------------------------------------------------iv
Acknowledgement----------------------------------------------------------------------v
Abstract---------------------------------------------------------------------------------vii
List of tables-----------------------------------------------------------------------------xii
CHAPTER ONE: INTRODUCTION
1.1 Background of study------------------------------------------------------------------1
1.2 Statement------------------------------------------------------------------------------5
1.3 Objectives of the study---------------------------------------------------------------6
1.4 Significance of the study -------------------------------------------------------7
1.5 Statement of hypothesis -------------------------------------------------------8
1.6 Scope and limitation of study---------------------------------------------------------8
1.7 Definition of terms----------------------------------------------------------------------9

CHAPTER TWO: LITERATURE REVIEW
2.1 Overview of the banking scene --------------------------------------------------12
2.2 Concept of computer----------------------------------------------------------------------14
2.3 Types of computer system----------------------------------------------------------------18
2.4 Characteristics and qualities of a computer -------------------------------------------18
2.5 General comments on computer installation-------------------------------------------20
2.6 Commercial application-------------------------------------------------------------------20
2.7 Role of computer in bank management-------------------------------------------------23
2.8 Some technological driven product in banking----------------------------------------27
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Sources of data------------------------------------------------------------------------------43
3.2 Sampling size and technique---------------------------------------------------------------44
3.3 Method of data collection------------------------------------------------------------------44
3.4 Validation of research instrument---------------------------------------------------------45
3.5 Method of data presentation---------------------------------------------------------------45
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Bio- Data----------------------------------------------------------------------------------------48

4.2 The impact of information technology on banking industry in Nigeria---------------49
4.3 Recent trends in information technology------------------------------------------------51
4.4 Prospects of information technology in Nigeria banking industries-------------------54
4.5 Ways of improving the relevance of information technology in Nigeria banking

industry-------------------------------------------------------------------------------------------55
4.6 Test of Hypothesis--------------------------------------------------------------------------58
4.7 Discussion of findings-----------------------------------------------------------------------60
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSIONS
5.1 Findings----------------------------------------------------------------------------------------68
5.2 Recommendations----------------------------------------------------------------------------70
5.3 Conclusions-----------------------------------------------------------------------------------72
Bibliography---------------------------------------------------------------------------------------73
Appendix: Questionnaire for both bank staff and bank customers------------------------76

LIST OF TABLES
Table No: Table Title Pages
4.1: Responses on the extent information technology has
increased the number of depositors in banks
4.2 Response on the extent information technology has
made office work of bank staff less burdensome
4.3 Response on the extent information technology has
led to more efficient storage in banks
4.4 Response on the extent some areas in banking
needs to be developed
4.5 Response on the extent information technology has led to the
introduction of electronic fund transfer
4.6 Responses on the study of bank computerization
4.7 Responses on the extent information technology has reduced
time, wastage in banks.
4.8 Responses on the extent information technology has contributed
to better planning and management of funds in banking business

4.9 Response on the extent information technology has reduced the banks
operational cost.
4.10 Contingency table on testing whether the use of information
technology has led to time reduction in banks.
4.11 Contingency table of distribution on testing whether information
technology has increased the number of depositors in banks.
4.12 Contingency table on testing whether information technology has
reduced the bank's operational cost including daily works.
4.13 Contingency table of distribution on testing whether the use of information

technology has contributed to better information storage in banks
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The industry in Nigeria was developed between 1894 - 1933 with the multinationals
commanding nearly all the equity base of the banks and close to 90% aggregate bank
deposits with the coining on stream of the indigenization enterprises promotion Decree
of 1972, Nigerians were allowed to command and control up to 60% equity in the
expatriate banks.
With the sanitization policy of the banking ordinance of 1951 which lasted to most of
the indigenous banks failed e.g. Industries and Commercial banks in 1929, Nigerian
Farmers and commercial banks in 1947 -1953, Nigeria Penny bank in 1946, thus,
mushroom banks were flushed out of the system The surviving ones were those that
had the regulatory provisions of the ordinance They are totally regarded as "old
generation banks". The industry didnt not experience any major changes in terms of
banking innovations and services delivery between 1952 to 1991 before the IMF
(International monetary Fund) compelled the Nigerian government to privatize and
deregulate banking services. This led to the springing up of different privately Pined
banks in Nigeria with full control and equity contribution by Nigerians. These banks are
expressly regarded as "The New generation Banks.
Banking today is conducted in an6 age of economic crisis, distress, fraud, hood and
misrepresentation that is the opposite of what was obtainable in early centuries when
banking was manually operated with no complexity and sophistication. During this
period of development of banking, the customers the banks served were mostly
merchants who can be served immediately without any hitch; more so, transactions
were done with truth and transparent honesty. As centuries passed by, the complexity
and sophistication in the Liking sector increased the more, hence the signal on the need
for the production of technological activities into the banking services. A clearer
manifestation of this need was seen in the 2Ist century often known as the "Age
Computer Technology". For this ("act, information is the core upon which all Ilk
activities of any business enterprises revolve. It is therefore very true that effective and
useful information system should be available to any organization fee effective decision-
making. We are now living in the age of information technology were it is very
important and abundantly clear that it is required of managers, accountants or bankers
to be vast in the use of computers and process information system, otherwise he / she
becomes obsolete and the tool for fraud unknown to him or her. Banking industry is the
most beneficiary of the contribution of technology in the economic environment in that
it is a service-oriented institution where access information is the primary ingredient for
its operations. Organizations e banks are economic units established for attaining
specific objectives, Because batiks are constantly facing competitions in the financial
market, they have to be structured in such a way that they would be constantly
informed on line relevant changes in these markets, its effects on resources and
objectives particularly, the resultant reactions to these changes.
To properly analyze every bit of information, the organization needs to employ system
that constantly be used to process, update, store, retrace and retrieve puts stored into
it. For this to be achieved, it requires the use of computers. The computer can magnify
any information, which the workers abilities cannot nil since it can receive process and
give back information. Therefore, a person's skill in using computer will enhance his or
her working ability, which imply means that a bank manager who uses computer can
attend to hundreds / thousands of customers in a lesser time than a manager without
machines. More so, subordinates who are skilled in process information and computer
techniques cannot misguide such mangers.
The new information order will create a knowledge based society were the induction
and distribution of information goods and services will dominate line world economy.
Information technology is the fourth logical revolution known to man after the
agrarians, the industrial and technological (mass production) revolutions. Today, the
information economy has taken over from fie industrial economy with information
goods and services. However deep d powerful information, national differences still
exist in the areas of national information infrastructure, enterprises culture work among
nations. This information goods and services have provided more than 60% of the
IPDSS National Product (GNP) in developed countries.
Statistics evidence and growth rate in the economy shows that the global innovations
have enabled the economies in developed areas to achieve a high level of efficiency and
productivity. However, the anti-globalization protesters from all over the world at the
world trade organization in Seattle, USA in 1999 fear that the liberalization competition
would increase economic insecurity.
A core component of information technology development change is the semi-

conductor chip, which since the early 1980s began to decrease in size and cost, and
increased steadily in capacity and complexity. Information complexity conveys the
notion of the application of microprocessor based (digital) technologies for information
handling for effective and speedy decision- making.
The information age is reviewed as (lie age of electronically wired or enabled piety (e-
society) within the context of the aspiration for living and managing life activities in a
paperless environment. The competitive foundation of the information age is the
National Information Infrastructure ( NII). NII is the rapine room while the heart of this
engine is the software.
However, the impact of technology in the modern banking in the 21st century cannot
be over - emphasized. Technology has made notable contributions in banking industries
and has become historical in recent times and a potent factor in the development of (he
entire economic environment. The aspects that are post outstanding in these areas or
landmarks are in:
1. Cash Management
2. Transfer of money through Electronic Fund Transfer ( EFT)
3. Fraud Management
4. Automated Clearing House System (ACHS)
5. Telephone Banking System
6. Automated Teller Machine (ATM)

1.2 STATEMENT OF THE PROBLEMS
The constraints of the Nigerian banking system are well known. Economic is still fragile
while supporting infrastructure is grossly inadequate. These constraints have been
largely responsible for the existing weak technological base. Consequently, technology
remains an imported commodity" which continues to depend on the availability of
foreign exchange for its consumption. The purchasing power of the Naira has also
limited the ability to import and therefore restricted access to modern technology.
Beside the incessant failures of power supply and irregular functioning of

telecommunication facilities have not provided the level of support required for
Sustained computerization and computer networking, there has also been low
information technology skill and lack of technological base needed for bring the growth
of indigenous banking technology.
Since computer is capable of performing in minutes and more efficiently tasks that
takes several man-hours, hence the first crucial problems of workers is that most
computerized systems are introduced to cut labor costs which causes redundant and
retrenchment of workers. By introducing extra coding into cheques and other
documents, they could start to offer some of integrated banking and accounting
services thereby throwing out the accountant from ilk se duties he should do.
1.3 OBJECTIVES OF THE STUDY
The purpose of this study were:
1. To identify the impact that computer has actually exerted on the banking industries
2. To discover the areas in banking services that still needs to be developed with this
recent trend of information technology.,
3. To discover and study the constraints of information technology in computerization of

study banks.
4. To evaluate the prospects of information technology in the Nigerian banking business
5. To make recommendations based on the findings in improving the relevance of

information technology in Nigerian banking industry for economic development of the
nation.
1.4 SIGNIFICANCE OF THE STUDY:
This research work will be beneficial to various interests groups on its successful
completion. Such groups are the banking industry as an integral part of a sample of
financial system; Students and other researchers in the field, which may serve as a
reference as a copy of the work will be kept in the school library for public
consumption. This study will also be of immense importance to the government,
customers and even business enterprises.
This study will be beneficial in banks as it influences the way bank services are
delivered and distributed all with the aim of making banking more convenient for the
customers. For instance, many banks in Nigeria now lave most of their branches linked
online and real-time. The implication of this is that it is now possible for people to
conveniently carry out banking operations from any of their bank, which is linked
online. This clearly reduces the needs and dangers of carrying cash and help provide
variety of services to the numerous banking public. Banks by so doing will be
performing the vital functions of resource allocation in the economy (i.e. providing a
medium of mobilizing saving and channeling saving to investment outlets).
Finally, students are going to find this study useful in their academics. This is because
this study has extensively discussed the rationale for the introduction of information
technology in banking, the various uses they are put into, and the prospects of banks
making use of this technology in their operations.
1 5: STATEMENT OF HYPOTHESIS
Ho: Computerization of banks has not reduced time wastage in the banks. Hi: The
computerization of banks has reduced time wastage in the banks. Ho: Information
technology in banking system has not increased the number of depositors in banks.
Hi: Information technology in banking system has increased the number of depositors
in banks.
Ho: Computerization has not reduced the bank operational cost including ally workloads
Hi: Computerization has reduces the bank operational cost including pbily workloads.
Ho: Information Technology has not contributed to better information rage in banks.
Hi: Information Technology has contributed to better information storage in banking

system.
1.6 SCOPE OF THE STUDY:
This work aims at finding out various usage and impact of computer technology or
information technology in banking services. A survey study was earned out using
samples from selected commercial banks in Anambra State.
1.7 LIMITATIONS OF THE STUDY:
In carrying out this study, the researcher was laced with some constraints.
Though it was difficult at the initial stage to gather materials relevant for this research
work and to comprehend the details and requirements of the topic, the researcher was
still able to make due of what she had and a tangible write up or tangible write up was
made.
More so, with the very high cost of living, due to the present economic hazards coupled
with the high rate of transportation, engaging in serious exercise of this nature
definitely posed a lot of financial problems considering that the fact that the researcher
is a student, her lean pocket was further stretched in order to get the job well done.
Despite the constraints inherent to this work, the researcher was able to gather
substantial materials to the best of nr ability and knowledge, which made the work
unhindered.
1.7 DEFINITION OF TERMS
ACHC-- Automated Clearing House System: This is a system used by banks for clearing
or exchanging cheques drawn on each other.
ATM - Automated Teller Machine: This is a self- service transaction concept that
provides ready access to cash 24 hours in day.
COMPUTER - It is an electronic device for storing and processing of data, making

calculations or controlling machinery
COMPUTERIZATION-This is the process or procedure of processing information using

computers.
E-Banking (Electronic Banking) - This means banking that exists solely on the
internet and has no physical presence for consumers / customers to interact with the
institution.
Economic Fund Transfer (EFT) - It is another product of the internet that has
allowed money to be sent by one party in a destination to another party located
differently through money transfer agent.
Hardware - A physical device that makes up the computer such a s printer, monitor,
diskette, mouse, etc
Information - This can be simply be defined as a knowledge acquired through

experience or study.
Experience or study on the other hand is procedures for data gathering.
Information Technology - This is regarded as a systemized body of tool, techniques

and infrastructure for generating, collecting, storing, processing and transmitting of
data.
Point- Sale -System (P.O.S) - This is an online system that allows customers to
transfer funds instantaneously from their bank accounts when making purchases.
Software - this includes everything in the computer that is not hardware e.g language,
written programmes, documentation, manuals etc.
Technology - This is the knowledge or use of mechanical art and applied science.
Telephone Banking/Video Tex - This is a generic term used to describe home

information retrieval systems.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 OVERVIEW OF BANKING SCENE
The banking scene has witnessed phenomenal changes especially since the mid 1980's
and these has manifested in the enormous volume and complexity of nations, increased
innovations and variety in product and service delivery, financial liberalization, growing
competition, customer sophistication and business process re-engineering. These
developments have not only been veil by technological advances but have also in turn
spawned technological development. It is therefore true to say that technology has
been the hallmark of banking developments since the last decade and will continue to
be so as well into the 21st century. The focus of this research is information technology
in the integrated form of computer and communications.
The industry in Nigeria was developed between 1894 - 1933 with the multinationals
commanding nearly all equity base of the banks and close to 90% aggregate bank
deposits with the coming on stream of the indigenization enterprise promotion Decree
of 1972, Nigerians were allowed to command up 60% equity in the expatriate bank with
the sanitizing policy of the banking ordinances of 1957 which lasted to 1954. most of
the indigenous banks failed e.g. Industry and commercial banks of 1929, Nigeria
Farmers and Community banks in 1947-1953, Nigeria Penny bank 1946, thus
mushroom banks were cleaned out of the system. The surviving ones were those that
met the regulatory provisions of the ordinance. They are today regarded as the "old
generation banks'.
The industry did not experience any major changes in terms of banking innovation or
service delivery between 1952 to 1991, before the IMF compelled the Nigerian
government to privatize and deregulate banking services. This led to the springing up of
different privately owned banks in Nigeria with full control and equity control of
Nigerians. These banks are expressly regarded as "New Generation Banks".
Before the privatization policy, was characterized with poor - customer service delivery
in terms of payment system, cash processing style, communication skills and personal
touch services. Manual banking, which ultimately leads to time wasting, was the order
of the day. The recent development in the banking industry is the technological
innovations which has helped to improve or enhance customers service delivery in
terms of improved (automated) payments system reduction in cash processing time
with the use of automated counters, improved communication network among branches
and a lot more. To appreciate the relationship between technology and banking
development, it is instructive to underscore the role of banking system. As you are in no
doubt aware that, the primary purpose of the banking system is to create and manage
financial resources and to intermediate between surplus and deficit economic units. In
the process of carrying out this fundamental role, the kiting system provides secondary
services, which includes mobilizing financial resources for investment purposes,
assisting in resource allocation, promoting the payment system and facilitating
international trade. In final analysis, the performance of the banking system is
measured not only by the number and variety of services provided but also by the
speed, efficiency and safety, which these services have provided. As already observed,
one-way of enhancing this service is by the application of technology.
The increasing volume, complexity, competitiveness, customer's sophistication of
globalization of financial services have induced a number of technological developments
in Nigeria's banking industry which includes the following
1. The introduction of computers.
2. The use of automated bank notes processing system like the CBN.
3. The introduction of the magnetic ink character recognition (MICR).
4. The setting up of the Nigerian inters bank settlement system.
5. The use of automated teller machines, smartcards, electronic cash and electronic
wallet.
6. The planned automation of the clearing system.
2.2 THE CONCEPT OF COMPUTERS
Computer is a tool or device, which is able to accept facts (data) and figures in ascribed
form, apply prescribed processes to the data, and supply the results of the processing
in a specified format as meaningful information.
The computer system is a software and firmware. Hardware is the physical machine,
which is made up of the following;
a) Input device
b) Central unit (CPU)
c) Output device
Input device is a device through which data is fed into the CPU e.g. keyboard, punch
cards, etc. CPU is a brain system in which all calculations, comparisms and controls are
done.
The CPU is made up of three main units namely :
- Control Units - This is the part of the hardware that is directed by a programme
when in operation. The control unit extracts instructions one by one 111
sequence from the share, decodes them and initiates any action that the
instruction indicates.
- Arithmetic Logical Units (ALU) this unit does not only carry out arithmetic
operations but it also performs such logical operations as comparing two items to
data in order to determine which one is larger or for identification purposes. The
data operated upon is not limited to numbers alone. They also include
alphabetical characters.
- Main Store / Memory Unit - Is part of the hardware that holds instructions, data
and intermediate results.
- Output Devices - This is a device through which information (process data) is

transmitted to the user from the CPU e.g. visual display unit printer, etc. The
organization of a sample digital computer in a tabular form is shown below:
Main Memory
Arithmetic and Logic unit (AITJ) Output
Control Units
Input
Registers
Software
Software contrasts the hardware. It refers to all that is not physical in the computer but
must work within the hardware to process data. It is the software, gives the computer
the flexibility or versatility to do whatever the user Software is defined as a set of
instruments that gives instructions written in a computer language, that directs the
computer on what to do. It could be written to handle such tasks as payroll. Software
can be classified into two namely:
a) System Software
b) Application Software
System Software - A set of soft wares that are written by system programmers usually
supplied by computer manufacturers. They interpret instructions contained in the
applications and then activate the proper hardware circuit and devices to carry out the
command.
Application Software These are programmes written specifically to solve a particular

problem in business or scientific problems e.g. spread sheets, word processor and data-
base management system.
i. Application Software - These are programmes written specifically to enable speedy
production of neat and error free documents (letters, reports etc.) using the computer.
Examples of word processor include word perfect, Ms- word e.g.
ii. Database Management System - This is for managing database of an organization.
2.3 TYPES OF COMPUTER SYSTEM
1. Analogue Computers - They are mostly used in industries to control processes such
as mixing of chemicals, making steel, etc. They cannot store data in large quantities.
2. Digital Computers - These are machines capable of performing operations on data

expressed in decimal binary or other numbering system. They can be programmed to
perform almost any business task. They are used for accounting, forecasting and other
business general purposes. They can store data in large quantities. Banks mainly use
this kind of computer. This system is peculiar to banks.
2.4 CHARACTERISTICS AND QUALITIES OF A GOOD COMPUTER
Programmers, analysts and operators who work with the computer are all aware that
there is a mystery about the computer and that it has no substitute to Human brain.
They work according to the instructions given to it by the user and as such, do not do
anything on its own hence, we say that the computer operates on "GIGO principles"-
Garbage In - Garbage Out meaning what you give to the computer, it gives you back.
The computer is becoming an integral part of our daily lives especially in banking
business. Airline reservations are made using a computer system. A cheque issued at a
local department store may require some types of computer verification. The craze for
computer and the growing awareness must not be unconnected with certain
characteristics, which distinguish it from other electronic gadgets. These are
1. Versatility - Computers just like human being s are versatile. This can be proved
since it can be adapted to perform any conceivable task. This is made possible
by the use of software. The computer can be used to prepare documents with
such ease and the same computer can be adapted to help the accountant in
budgeting and forecasting , the medical doctor in monitoring his patients
condition, the bankers in carrying out efficient banking transactions, etc. all with
the aid of computers.
2. Speed - In a matter of minutes, the computer can carry out many tasks that can
take people a lifetime to complete. Computer speed is measured in nano-seconds
(one billion of a second).
3. Reliability and Accuracy - This is where the computer edges over the humans. If
programmed or instructed correctly, computers are extremely accurate and
reliable devices.
Another type of computers that I do not really understand here is the Hybrid
computers.
- Hybrid Computers - This is the third type of computer. They can perform the
function of the two types named above. The computer is an electronic device
and has its own language, which are BASIC, FORTRAN and COBOL. Computers
are classified according to size and amount of data they are capable of
processing. They are main frames, minicomputers and micro computers.
2.5 GENERAL COMMENTS ON COMPUTER SYSTEM OPERATIONS
INSTALLATION ROOM
The room in which the computer is to operate should be such that the following rules
are adhered to:
a) Prohibition of food eating, drinking beer and smoking in the computer

room.
b) Keeping devices dust free.
c) Avoid storing papers in the computer room.
d) Computer room should be cleaned regularly
e) Keep the computer room cold enough by using air conditioning devices.
2.6 COMMERCIAL APPLICATION OF COMPUTERS
Computers are commonly applied in areas for commercial purposes. This covers the use
of computers for clerical business and administrative uses in private and public
organizations and in scientific and research purposes; for tonal computing commercial
application can be considered under routine administration.
ROUTINE ADMINISTRATION
Firms and organizations make use of computers in the planning and running of
organization. Computers are employed in the areas of computing salaries and bonus of
workers, stock recording, sales ledger, invoicing, etc. In addition, there is a definitive
link between production and purchasing sales and computer provides such link as an
integrated system. This routine task with the use of computer increases their efficiency
as well as provides grounds for expansion. A good example is the clearing banks.
Computers can be used in conjunction with other electronic equipment to in automate

the basic clerical task of the office. It is the routine nature of large Hunt of work in the
office that makes automation a necessity. Basic office in automation consists of work
processor connected to one another and to a corporate computer by means of network.
Other include personal computer (P,C,S) that can also be connected to network which
provides access to computer package or soft wares such as - word processors, spread
sheet, packages, electronic mail transfers, electronic money transfers, etc.
Furthermore, banks need computer in the area of financial planning, decision making
based on current operations and future plans. It requires information to be accurate
and timely, this comes in handy areas such as stock control, production control and
labor control, network analysis to connect or link many sectors or projects together to
facilitate coordination, also in linear programming to maximize profit and minimize cost
and finally, for the management of the company. The decision making function of the
company is handled by a specialized package known as Expert system (French 1992).
EXPERT SYSTEM
An expert system is a specialized computer package that performs the function of a

human expert. It captures the decision making process of an expert in an in attempt to
quality decisions. Expert systems are often referred to as artificial intelligence since the
human thought process is presumably programmed into computer. Golitz (1978)
characterized the benefits of expert system as:
i. Expert human expertise
ii. Improve the quality of decisions
Helps in cutting down cost.
These benefits are interrelated for example; expert systems will help banks acquire
expert knowledge, which can be made interactive with all experts themselves. Quality in
decision-making is due to improved consistency level. In developing an expert system
for a bank, detailed analysis of the banks operation rules, practices and habits of
business are required. Furthermore, functions that are deemed necessary to automatic
are included in the expert system.
The development process helps the bank in understanding its operations. A banks
expert system should be developed and integrated to its other operations in order to
improve banks performance. (Palmer, 1990).
2.7 THE ROLE OF INFORMATION TECHNLOGY IN BANK MANAGEMENT
The application of computer in banks helps in the financial management perspective.

Years back in the U K in 1979, the established what is known as it financial
management perspective (FMI). This is because the set of guidelines or codes to ensure
that the public fund is effectively managed and in rolled. Therefore, departments and
agencies can trace the use of money and estimate its effectiveness as part of the public
budgeting decisions. The banks loose great amount of money if finances are not
properly managed recorded and controlled. They face the risk of fraud by employees.
The consequences are obviously enormous. Computers in banks if effectively put into
use will be of great use in monitoring and controlling of banks operations.
Computers can assist in the considerations of transfers from different iteration unit. This
can be achieved by using a computer programme which exploits the special structure of
transfer of programmes. Programmes like that can collect and analyze the financial
management information of banks. It also reads inputs from major spreadsheet
programmes used by bankers for example, input from ( OLUS 1,2,3 and many other
inputs format) ( Adewunimi Jaiyesimi 1989 ).
FINANCIAL PLANNING SYSTEM
Financial planning consists of the use of stimulating models, statiscal analysis,

mathematical programming and forecasts. The process of stimulating a system annually
can be very time consuming and certainly subject to calculation errors. However, the
amount of data collection and computation involved are extensive and require computer
in order to solve such problems - (Golitz, 1979). For example, financial institutions are
resorting to computer models, which are based on mathematical derivations. The size
of variables and questions considered makes it difficult to solve such planning without
the aid computer. Golitz (1978) opined that the use of computers in modeling bank's
planning would provide an insight to the bank operations. Additionally, a computer
provides quick free -error so91utions to planning problems to ensure that the banks
operate profitably. However, the outcome is dependent on the quality of data supplied
top the computer. The (LP) Linear programming for example is a model designed to
help financial managers to alternative short-term financing and investment strategies.
Historically, LP model; was developed by George B. Dantzig in 1947 and published in
1951. The first computer solution of linear programme was conducted by the National
Bureau of Standards in 1952. Computerized linear programming "packages" came into
widespread use in the early 1960s with the development of mathematical programming
system (MPS).
The need for bank's strategic planning using computer has brought about radical cost of
operation, increases the bank's earnings, survive competition and improve services.
Finally, since the world today is becoming a global page village, decisions made by the
major lending institutions abroad such as the international monetary Fund (IMF) and
the World Bank, influences our economic policies here in Nigeria.
Similarly, interest rates and unemployment issues developed in some countries like
Europe and USA seem to have major impact on the Nigerian economy. Therefore, the
banking sector must envisage these factors and develop strategies to protect the local
banks. The survival of the local banks is no longer immune to this outside factors.
Nigerian banks have to understand the global environment and adopt strategies that
will lead to their continued existence. This goal is achievable by the use of computer in
solving problems banking operations. The rise of computers has led to the application
of more sophisticated and realistic models to their planning problems. Such models has
n developed for forecasting, econometric, portfolio analysis and risk management
DECISON SUPPORT SYSTEM
Expert systems tend to make decisions rather than recommend decisions as earlier
discussed. These decisions are based on set of rules with the ability to conduct
sensitivity analysis. However, OSS serves as a support system to the Management or
decision maker. It recommends decisions but allows the decision maker to choose the
part to follow. The decision maker may be influenced by his or her own cognitive
feelings, experience, intuition and environment. (Palmer D C 1990).
The introduction of DSS to some hanks has greatly influenced or rather enhanced the
quality of decisions made by managers. It also protects banks from financial losses due
to poor judgment on the part of the manager, Customer satisfaction has also improved
as the rationality in decision-making increases.
The adoption of DSS in the banking system is evident from the frequent request by
banks to revive their computer in order to adapt to their changing needs. Banks
contemplating on the adoption of DSS often worry on how to go about doing it. This is
even more troublesome to banks in developing societies like Nigeria. The shortage of
computer experts and unavailability of information such as literature on computing
makes this difficult to achieve. Often, some of the experts are detached from the
financial services industry and may be unable to bring their expertise to assist in these
areas, thereby creating need for the developing of acceptable procedure that may be
followed Nigerian banks in developing DSS.
FINANCIAL MANAGEMENT
The application of computer technology in banks helps in the financial management

perspective. Years back in the United Kingdom in 1997, they established what is known
as the Financial Management Initiative (FMI). This is a set of guidelines or code to
ensure that the public fund is efficiently managed and controlled. They face the risk of
fraud by employees.
The adoption of the financial management information system will help banks prove
their efficiency. In maintaining (lie banks, general operating policies well as the
monetary authority guidelines and policies such as ratios, special posits and reserves. It
also helps the management to solve some of their corporation affair problems,
quantitative model, operational research, etc.
2.8 SOME TECHNOLOGY DRIVEN - PRODUCT IN BANKING
The question is how well is technology to banking? According to John, B.MC company
chairman, "banking has too much of paper and people, for a long e, the paper comes in
the forms of processed cheques, deposits , slips, credit card receipts, customers
statement and so on. Banking is a labor-intensive industry with paper as a major
product. Combine these facts with the inertia of historically conservative industry and
you can see why banking has been slow in moving into the technological age. In
addition, since many customers especially older ones have grown accustomed to the
faces and papers, they are reluctant to change their banking habits. The next
generation of bank customers will be more technologically attuned.
Application of technology in banking offers opportunity for the reduction of both paper
and people. Technological innovations in banking has been manifested primarily in the
form of electronic fund transfer system (EFTS of EFT)
The basic components of EFTS are automated teller machine (ATM), point of (POS),
terminals and automated clearing houses (ACIIS). More important to rank's operating
system technology is a bank's "backroom technology" (its computer operating system).
Technology biology innovations focuses on Electronic Banking which offers an

opportunity to reduce both the paper and the people i.e. (helps to control cost) and to
generate fees. The diffusion of electronic banking tends to begin at the wholesale level
before spreading to customers. However, because customers' payment habit changes
slowly, the spread of E- banking at the retail level has been slow excerpt for AIMS. For
the past three decades now, analysts have predicted that the next decade would
witness a cashless society although we will never have an economy without cash.
Further acceptance of the bank technology in 1990s will make electronic banking by the
year 2000 a milestone.
Banks have developed the EFTS for three main reasons
1. To protect and increase market share
2. To reduce operating cost by substituting physical capital and technology for

labor.
3. To generate new revenues
The first reason frequently is associated with keeping up with the competitions whereas
the last two reasons are profit motivated.
As a new way of collecting and processing transaction related data, EFTS informs three
functions namely:
1.Fund Transfer
2. Authorization
3. Generation of information for record keeping
Compared to paper based transactions, EFT in its most efficient form offers
instantaneous verification and transfer and reduces the How of costly paper in record
keeping process. EFTS is n generic term referring to various computer-based
technologies for delivery banking services. The basic mil components of EFTS are
ATMS, ACI IS and POS systems. In addition, such services are as cash management
telephone bill payments, automatic transfer, cheque verification, cheque transaction
and home banking are part of electronic fund transfer - pictures. These EFT
components are the catalysts driving the 15 and world financing system from a paper
base to an electronic foundation.
Furthermore, e -banking, the internet in its evolving state is becoming a serious method
of business communication and data transfer. As such, banks and other financial
institutions are doing business. The internet allows banks to offer both new services
and new levels of convenience for existing services and allows the customer to interact
from any other computer capable of making the appropriate connection. Electronic
banking therefore means banking that exists solely on the internet and has no physical
presence for customers / consumers to interact with rather institution. Invariably, there
is no physical customer the computer and information systems are located in the virtual
world.
GLOBAL OR INTEGRATED BANKING
Global banking affords banks and customers the greatest flexibility to carry out muting
transactions from any branch of the bank irrespective of whether the account is
domiciled there or not. Global banking allows customers and authentification
information to be stored in a central host computer or distributed on independent
systems in every branch where account are held. Through telecommunication link each
branch can access every other branches information base. Global banking was first
developed by new generation banks attract the customer base of old generation banks.
SQL IMAGE MACHINE
A photographic and signature verification system permits the bank to automatically

store bath photographs and signatures. The new machine makes possible for
transactions to be concluded immediately.
SMART CARD
This is a computer based electronic purse, which is devised to facilitate cash

transactions without a cardholder being bothered by the inconvenience of carrying cash
about. Smart cards provides a sense of ease and security, a handy available to cash
holders to pay and relate transactions, and a means to withdraw cash from the branch
of banks involved in the consortium and having terminals.
SATELLITE COMMUNICATION AND VSAT TECHNOLOGY
Very Small Aperture Terminal Technology makes possible voice and video liking
transactions. It replaced terrestrial circuit in private networking. The deployment of
VSAT technology offers huge benefits in the areas of high network availability and
reliability as well as flexibility.
DATA PROCESSING SYSTEMS
The computer was used in obtaining up-to-date information on current records,

deposits, overdrafts, interest charges, commission on turnover (COT), past due notices,
periodic and instant customer statements. These were carried out on fried hardware
and application software platforms. Some of the processes are varied as dedicated
process and the systems are dedicated to the data processing operations.
COMPUTER - BASED SIGNATURE VERIFIER

Computer based signature verification is based on the advancement in micro -
computer graphics technology. This allows handwritings, photographs, texts mud other
complex documents formats to be scanned and digitized in the computer systems. It is
widely installed by banks to accelerate customer services especially in front line
banking.
AUTOMATED CLEARING HOUSES (ACHS)
This is practiced in developed countries of Europe, United States of America and Asia.
With this type of arrangement, clearing instruments are treated the same day of
lodgment. This is made possible through the sophisticated computerized network of all
banks and their branches.
With high improvement in the banking activities in the economy or country, this clearing
system is being gradually introduced in the Nigerian banking system.
We can therefore define Clearing according to "Clem Ndukaife Ik Nwakoby" in his book
- Banking practices and Operations in Nigeria as the "interbank presentation of cheque
and other payment instruments for settlement through a clearing house".
Finally, there used to be "intra state cheque, which was a kind of "hybrid" between the
local and "interstate" clearing cheques, but has been phased out by the CBN. The
reduction in the number of days became possible owing to approved information
communication technology (ICT) and electronic banking (E- Banking) embraced by all
banks in Nigeria.
A clearing house is a system used by banks for clearing or exchanging cheques drawn
on each other. In a traditional clearinghouse, bundles of paper cheques are exchanged.
In an ACH, computer images or types were exchanged mCWS are very efficient at
handling recurring transactions such as authorized deposits or payments.
In electronic bill, paying winch is the most efficient for recurring transactions monthly
mortgage, insurance and utility bills, payee authorizes banks to debit their accounts and
forward the payments electronically through the ACH system. Knowing exactly when
payments will be received makes the tack of corporate cash management easier. As the
opportunity cost of not using electronic bills payment (e.g. postage rates) increases, the
number of household willing to use such a system will grow.
AUTOMATED TELLER MACHINE (ATM)
As a self-service transaction process, ATM is widely accepted because it provides ready

access to cash (and other routine banking transactions) 24 hours. ATMS are convenient
because of their geographical reach, low cost of quality services and access to a
particular product - cash. The basic usually available through the third generation ATMS
include cash dispensing making deposit, loan repayments, bill paying, transfer of funds
between accounts and account balance enquiries. ATM are seen as defensive
alternatives to keeping branches open on evenings and weekly especially weekends as
well as a means of reducing teller A lines , maintaining market share and most
importantly, stabilizing and ultimately reducing teller staffing requirement and costs.
POINT OF SALE (POS) SYSTEM
A point of sale system is an online system that allows customers to transfer funds
instantly from their bank accounts to merchant accounts when making purchases. To
date, POS system has been the least successful of the three basic EFT components.
TELEPHONE / HOME BANKING ANDS VIDEO TEX
Telephone banking offers customers the capability of offering certain routine banking
operations via telephone (e.g. Bill paying). To use the telephone, bill payments /ACHS
mechanism, companies receiving payments have to designate an account where funds
are to be sent.
The development of full home blown banking requires that customers have a computer
to communicate with the bank's computer operations with the recent it development of
personal computers; the technology for this is available. The use of computers is
secured and saves the time of having to go to bank offices to out transactions. Apart
from the financial transaction, this scheme enables the customer to write to the bank
through the computer and receive replied from the banks. Nevertheless, home banking
can easily handle such Hind banking activities as balance inquiry, bill payment, stop
payment, money transfer and other special survives. Such services however, can also
be conducted via telephone without investment in a home terminal.
Fishers and others view home banking as the potential entry application of video into
the household sector. Video Tex is the generic term used to home information retrieval
system. In addition to home banking, video Tex is expected to offer electronic Tex
version of both the yellow and white pages , sports, news, whether classified
advertisement, retailers catalogue, a community bulletin board, and a host of other
services.
Finally, electronic fund transfer (EFT) is another product of the internet that has
enjoyed global acceptability. Electronic fund transfer allows money to be sent by one
party in a destination to another party located differently through money transfer agent
while the sender may have paid physical cash at the money transfer agency. The cash
does nit move physically. What moves is the information. The beneficiary often gets the
money in his local currency. The transaction happens in minutes notwithstanding the
distance between the lender and the beneficiary.
Statistical evidence and growth rate in the economy shows that the global
innovation has enabled developed economies to achieve enhanced level of efficiency

and productivity. But anti - globalization protesters from all over the world from the
World Trade Organization in Seattle, USA in 1999, fear that liberalized competition
would increase economic insecurity and foreign domination in poor world countries
(Obadina, 1999).
PROBLEMS ASSOCIATED WITH INFORMATION TECHNOLOGY
The introduction of information technology into our banking system has so many
problems such as:
POOR ELECTRICITY POWER
He supply of power from the national power from the national power authority is so
irregular that it can destroy the technological applications in the system and even make
it possible for the loss of vital information, which will plow down the effectiveness of
information technology instruments.
CRIMES COMMITED WITH USE OF INFORMATION TECHNOLOGY
Fraudsters log into telecommunication networks that are obsolete to tap into
international telephone switching in other to divert fund that belongs to others.
INADEQUATE TELECOMMUNICATION
Fraudsters log telecommunication industry is one big problem in information

technology, put fact remains that it is not effective and it is not enough for the citizenry
if not for the introduction of GSM and a second national carrier, which is now beefing
up the communication system.
LACK OF EXPERTS AND PERSONEL
Everyday, more and more information technology equipments are being produced by
the western world in which Nigeria as a nation, lack the experts and personnel to repair
these equipments as they go bad. Because of this, information technology becomes
expensive for many financial institutions to acquire.
HIGH COST OF TECHNOLOGY INSTALLATION
The financial outlay required for the installation of a nationwide network and other
computerized facilities such as ATM, Home Banking System, and EFTPOS (electronic
fund transfer at the point of sales) is enormous. The Ovation in computer industry is
also very dynamic. This is why banks ally hesitate in acquiring facilities because they
become obsolete so quickly.
CHALLENGES FACING INFORMATION TECHNOLOGY OF BANKS IN NIGERIA
Technology however creates its own challenges. This is the area of regulation fraud
control.
REGULATION
The regulatory authorities have not helped matters. In most cases, they have lagged
behind at least in technology acquisition. The banks that are supposed be regulated
have more equipments than the monetary authorities do. With poor supervision and
increased competition, some banks may be enticed into unethical practices like money
laundering all in the name of meeting profit targets. While this kind of activities may in
the short run, increase the profitability of erring banks, the position is different in the
end for it has the potential of damaging the confidence in the system, which is so
important for the development and growth in both the banking industry and the general
economy.
FRAUD
The loss of jobs due to the introduction of information technology in the banks has
resulted to colossal fraud. A remarkable example is that of the United Bank of Africa
Nigeria Plc which lost over 800 million naira to fraudsters in 1998 because the were
able to penetrate control system and defraud the bank. It is unlikely that such a
colossal loss would have happened or even gone undetected for a long time under the
manual banking system.
Other strategic challenges facing the banking industry in the face of globalization and
technological development includes the following:
i) Developing products with global acceptance
ii) Positioning to compete globally Sub regionally.
iii) Developing human resource to match world-class standard workers.

iv) Becoming proactive and dynamic in our response to change.
v) Increased capital base to compete with foreign players
vi) Proper focusing of banks
vii) Increased competition between foreign players and non - traditional rivals
(GSM) operators.
viii) Enhanced shareholders value
ix) Developing alternative channels of service delivery.
PROSPECTS OF INFORMATION TECHNOLOGY IN NIGERIAN BANKS
Information technology has advanced through use of internet technology. Internet is a

computer network made up of thousands on networks worldwide, which enables any
computer anywhere in the world to be linked to it. Any internet user has access to any
array of services such as electronic mail, file luster, vast information resources, multi
media display, shopping opportunities and most importantly, electronic banking and
finance. Banks products are marketed through the internet for banks that are linked to
the internet. Such services include payment facilities by credit cards, account
verification, online access to bank services, enlargement of bank markets without
necessarily building new offices, and potentials for full Hedged distribution channels for
banking services (Time, 1998).
Apart from helping streamline internal operation of banks, advances in

information technology has also been influencing the way bank services are
delivered and distributed all with the aim of making banks more convenient for
the customers. For instance, many banks in Nigeria now has most of their
branches linked online and real time. The implication of this is that it is now
possible for people to conveniently carry out banking operations from any branch
of their bank which is linked online. This clearly reduces the need and dangers of
associated with carrying cash. Comparing this scenario with, for instance, the
colonial days when it was not uncommon for organization to fly cash in order to
avoid paying bank charges. Perhaps, more important is the fact that the
information technology induces case of payment directly and indirectly aids
commercial transaction. For instance, online banking could fasten payments by
reducing the clearing time for cheques. This could greatly reduce the cost of
tracking payments and increase trade turnovers.
There are also other ways in which technology has influenced how banking
services are delivered and distributed. Hence, new technologies are also
beneficial to banks as they sometimes result to immense savings for banks. For
instance, electronic transaction cost only a fraction cost only a fraction of those
made in a branch. This is so because there are costs with running a branch of a
bank. Staff cost, rents, equipment and infrastructure cost. Most of the above cost
are either avoided or substantially reduced in internet banking.
In addition, advances in information technology have aided other services banks

now provide. One very successful example is the money transfer programme,
which enables Nigerians in Diaspora to send monies to families and business at
home. Such a basic service is popular m some Nigeria city especially, given the
currency conversion and exchange problems prevalent in Nigeria.
Under the scheme, technology makes it possible for such transfers to be affected and
claimed within minutes. For instance, first bank is a pioneer of this scheme. According
to its 1998/1999, annual reports and account: Quote
" The bank in February 1996, introduced into the Nigerian market the first ever
international money transfer service, in partnership with Western union financial
Services Inc. this se3rvice known as the western money union transfer service (
WIJMTS), continued to grow in leaps and bounds. It was adjusted by Western
Union Financial Services International, the largest and' most successful m Africa
and the third largest in the world during the year. To ensure the provision of our
efficient services to our numerous customers, more western union transfer
centers operating seven days a week including public holidays have been opened
in Lagos and Benin".
International success in the money transfer programme has further encouraged First
Bank to extend to local transfer.
Information technology is also making Nigerian retail banks to participate lore

effectively in the international banking area. This for instance, enables some of the
technologically up to date Nigerian retail banks to access international banking networks
in order to efficiently effect fund transfers, some of these Nigerian banks have also
joined the society for worldwide international financial Telecommunication (SWIFT).
This provides facilities for international payments and settlements through financial data
communication and processing as well as the provision of system messages and
reports.
CHAPTER THREE
3.0 RESEARCH AND DESIGN METHODOLOGY
The purpose of this study is to identify the impact of information technology and roles
in the banking industry and the various places computers were applied in bank
management in providing the needs for the customers.
The problems and prospects of information technology were also dealt with in the
study.
3.1 SOURCES OK DATA
The data for this study were obtained from both primary and secondary sources.
Primary source of data involves response from respondents based on questionnaire and
oral interviews. In addition, the researcher made personal observations.
The secondary source of data was gathered from CBN bullions, newspapers, articles,
journals, seminar papers, textbooks, magazines and otter knowledgeable persons. Data
used here were collected from:
i) CBN Benin and Enugu
ii) Diamond bank, Union bank, First bank.
iii) Nnamdi Azikiwe Universirty library
iv) Internet (website).

The sample for this research shall constitutes the selection of some commercial banks
in Nigeria. A total of three (3) commercial banks were selected in Awka in Anambra
state of Nigeria to represent the size. The banks include:
1. United bank for Africa Plc ( UBA )
2. Union bank of Nigeria Plc
3. First bank of Nigeria Plc
The researcher administered questionnaires to both the bank staff and the bank
customers in each bank. Five (5) questionnaires were administered to top rank senior
staff of this branches, on the other hand, twenty (20) questionnaires were administered
to reputable bank customers through the branch managers in each of the banks.
The choice of sample for this study was based on the following criteria:
1. The bank staff chosen must be a computer literate
2. The bank staff must at least been with the bank for a period of five years
3. The bank staff must be able to identify with the bank's balance sheet
4. The bank staff must be in a position to demarcate position before and after
computerization
5. Subjects availability
3.3 METHOD OF DATA COLLECTION
The questionnaires were delivered personally, by hand delivery by the researcher to the
branch manager of each selected commercial bank. The researcher instructed each
branch manager to distribute each of the questionnaires to five of their highest ranked
staff and twenty of their reputable bank customers who could offer the best response.
The researcher also engaged in some discussions with some senior staffs of the bank
on the information technology development of their banks. Relevant information was
obtained from the interviews the researchers had with the head of computer operations
of each selected bank.
3.4 VALIDATION OF RESEARCII INSTRUMENTS
The questionnaires were structured based on the objectives and hypothesis stated. The
researchers' supervisor helped in structuring these questionnaires to suit the objectives
of the study. The banks had clear understanding of the questionnaires asked and that
the questions asked were valid for the research and could be relied on.
3.5 METHOD OF DATA PRESENTATION AND ANALYSIS
In the presentation of data, the researcher made use of percentages in evaluating the
alternative responses to the questionnaires. The data collected were presented in tables
and analyzed using percentage responses.
In the test of hypothesis formulated, the researcher made use of CHI - square test. The
formula made use of CHI square test and it slated as follows:
X2 = (oi - ei)/ei
X2 = Chi - Square
oi = Observed Frequency
ei = Expected Frequency
SAMPLING PROCEDURE
The sample for this study was derived from the population by judgmental sample
technique. This involves delivering personally the questionnaires by the researcher
through the branch managers of each of the selected commercial banks.
The manager of each branch helped the researcher in distributing the questionnaires to
live of then high ranked and five of their lower ranked staff of the bank. This was done
by going to them individually to deliver them by the researcher, though the researcher
entertained some questions along the line by the managers and also (he staff of the
banks and which she answered correctly before she carried on with her questionnaire
distribution.
The researcher also engaged in some discussions with some senior staff of the banks
on the information technology development of their banks.
On the part of the customers, the manager also helped the researcher by directing her
to some of their reputable bank customers who could offer the best response to the
questions. By customers in this aspect, I mean a current account holder in the bank.
The researcher made her distribution to this current account holder as recommended
by the mangers because most people that were met in the bank might not be
customers with the bank. The researcher in other words, made sure that the
questionnaires were given to only certified account holders of the banks.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.0 INTRODUCTION
This chapter deals with the research questions analysis and the interpretation of the
data got. It should be noted that the primary data of this project was obtained from the
respondent's reaction and interviews with respondents. On e presented and analyzed
questions, they are those that have direct relevance the formulated hypothesis or
objectives of this study, the sample of questionnaire are made available in the
appendix.
4.1 BIO DATA
The researcher administered questionnaires to both the bank staff and the bank
customers. A total of 100 (a hundred) questionnaires were sent out but only 82 were
retrieved. According to the questionnaires retrieved, 48 of the respondents were male
and 34 were females. Fourteen (14) of the respondents were among e group whose
experience range from between one to five years. Thirty - seven (37) from the
respondent were among the group whose working experience range from between six
to ten years. Also twenty (20) of the respondents has between ten years and above
working experience, and lastly, eleven (II) fall in the category of traders (customers)
who did not indicate ay working experience.
4.2: THE IMPACT OI; INFORMATION ITX/IINOLOG Y ON BANKING
INDUSTRIES IN NIGERIA
Information technology has actually increased the number of depositors in banks. With
proper marketing of electronic services like electronic banking, automated teller
machine (A.T.M) and computerised services in the banking industry which banks
provide, has helped in generation more depositors for banks and also attracting more
depositors to banks.
Information technology has also made some impact in the banking business by making
the office work of bank staff less burdensome and more efficient. With e aid of
information technology lie computer, there is division of labor among the staff which
makes their work or job less burdensome.
Information technology in banks has also led to more efficient information storage in
banks on many ways. According to the responses from the respondents, the said banks
has had efficient information storage by employing pore competent , current and
qualified staff and they could be very current with the latest trend of information
technology, but where there is a fault in the technologies like computers, the reverse
will be the case.
In table 4.1, 4.2, and 4.3, we have the responses given by the respondents on the
impact of information technology in banking development.
Table 4.1:
Responses on the extent information technology has increased the number of

depositors in banks
Responses Number Percentages

Strongly agreed 75 91
Agreed 7 9
Disagreed - -
Total 82 100
Source: Field Survey 2004 ( See questionnaire no.8)
Table 4.2:
Responses on the extent information technology has made the office work - of banks
staff less burdensome and more efficient

Agreed 3 4
Disagreed - -
Total 82 100
Source: Field Survey 2004(See questionnaire no 11)

Table 4.3
Responses to the extent information technology has led to more efficient storage of
information in banks.

Fairly agreed 8 10
Not at all - -
Total 82 100
From table 4.1, a greater number of 90% were of the view that information technology
has increased the number of depositors in banks, 9% partially agreed while none
disagreed. In table 4.2, 96% of the respondents agreed strongly that information
technology has made office work less tedious, 4% agreed partially while non disagreed
to this.
In table 4.3, 90% of the respondents were of the opinion that information rage is made
more efficient in banks due to the application of information technology and 10% fairly
agreed to this fact while none disagreed.
4.3 RECENT TREND ON INFORMATION TECHNOLOGY
The researcher is interested in knowing I he areas in banking services that still needs to
be developed, which the respondents gave answers to as payment System, clearing and
transferring systems ( machines) telephone banking and electronic banking need to be
developed and practiced especially here in Nigeria.
Information technology has led to the introduction of Electronic Fund Transfer (EFT)
and home banking. Under EFT, we also have Automated Teller Machine (ATM), Point of
Sale and Automated clearing House (ACH), which could be developed for three reasons
- To protect and increase market share.
- To reduce the operating cost by substituting physical capital and technology for
labor
- To generate new revenues. Home banking handles some standard activities like
balance inquiry, bill payment, money transfer.
Table 4.4 and 4.5, shows the responses of the respondents on the recent trend of
information technology
Table 4.4
Responses to the know the extent some areas in banking still needs to be developed.
Responses Number Percentage

Fairly agreed 30 36
Not at all 5 6
Total 82 100
Table 4.5:
Responses to the extent information technology has led to the introduction of electronic
fund transfer, home banking

Fairly agreed 21 26
Disagreed 15 18
Total 82 100
From table 4.5, 56 % of the respondent agreed strongly that information technology
has led to the introduction of Electronic fund Transfer and home banking, 265 agreed
partially while 18% disagreed to this fact.
In table 4.4, 57% of the respondents strongly agreed that some areas in banking
industry still needs to be developed, 36% also declared their partial agreement p this
fact while 6% declared no knowledge of this fact.
4.4 PROSPECTS INFORMATION TECH NO LOG IN NIGERIA BANKING

INDUSTRIES
Many banks are fully computerized while some are not fully computerised, throughout
depends on how financially capable the bank is . Information technology has brought a
lot of competition in the banking business. A bank I is not fully computerized will always
look for a qualified and well trained staff that can handle the job effectively thereby
creating unemployment by retrenching the unqualified personnel. There is also more
customers than banks that are not fully computerized.
Has Information Technology really reduced time wasting in banks? Respondents are of
the opinion that information technology has not really educed time wasting in banks,
that they still waste more of their time in banks just as it is used to be, Hut with the
recent trend of information technology in banks, customers time wasting is supposed to
be reduced.
In table 4.6 and 4.7, the responses of the respondents on prospects of information
technology in banking industry is shown.
Table 4.6 Responses on the study of bank computerization

Fully computerized 45 55
Fairly computerized 34 41
Not at All 3 4
Total 82 100
Source: Field Survey 2004(See questionnaire no 5).

Table 4.7
Responses on the extent information technology have reduced time wasting in banks.

Very high 67 82
High 10 12
Not at all 5 6
Totals 82 100
Source; Field Survey 2004(See questionnaire no 6)
From table 4.6, out of 82 respondents, 55% agreed very high that information
technology has brought computerization in banks, 41 agreed fairly while 4% declared
not at all. It would be well agreed that the respondents agreed to a degree of their
bank services being computerized.
In table 4.7, 82% of the respondents agreed that the introduction of information
technology has reduced customers wasting time in banks. This is higher than 5 12% of
those who partially or fairly agreed to this fact and 6% of those who agreed to it.
4.5 WAYS OF IMPROVING THE RELEVANCE OF INFORMATION TECHNOLOGY

IN THE BANKING INDUSTRY.
Information technology has contributed to better planning and management of funds in

the banking system to a great extent as pointed out by the respondents. One of them is
by employing experts in the field that could handle the systems ell so as to have an
organized working system. To improve more on this, banks need to have enough
equipment for the bank staff to work with.
Also, the reduction of banks operational costs has been enhanced through formation
technology. This is so because we now have division of labor and every member of the
staff knows where he or she fit in area of socialization, thereby having more hands on
deck, which leads to a very high return at the end of each working day and the cost of
operation reduces.
In table 4.8 and 4.9, the responses on ways of improving the relevance of information
technology in Nigeria banking Industry are shown.
Table 4.8
Responses to the extent information technology have contributed to a better planning

and management of fund in banking business.

Wrongly agreed 46 56
Fairly agreed 2i 26
Disagreed 15 18
Total 82 100
Source: Field Survey 2004(See questionnaire no 9).
Table 4.9
Responses on the extent information technology has reduced the banks operational
cost including daily work loads
Substantially 14 17
Minimally 19 23
Not at all 49 60
Total 82 100
From table 4.8, 56% of the respondents strongly agreed that information technology
has brought about better planning and management of funds. 26% ere of the view that
management and planning of funds is fairly efficient while 18% disagreed.
Also in table 4.9, majority of the respondents (unto 60%) declared that bank
operational costs has not been reduced despite the avert of information technology
while 23% are of the view that it has minimally reduced cost of bank services and lastly
17% said that it has substantial reduced cost .
Information technology has been influencing the way bank services are delivered and
distributed all with the aim of making banking more convenient for the customers. For
instance, many banks in Nigeria have now most of their branches linked online and real
time. The implication of this is that it is now possible for people to conveniently carry
out banking operations from any ranch of their bank which is linked online. This clearly
reduces the need and angers of carrying cash.
Again, new technologies are also beneficial to banks as they could sometime result to
immense savings for banks for instance, electronic transactions cost only o fraction of
those made in a branch. This is because, there is cost with running a branch of a bank
staff cost, rents and equipments and infrastructure cost. These costs arc avoided or
substantially reduce in internet banking.
Information technology is also making Nigeria retail banks to participate effectively in

the international banking arena. For instance, it enables some of the technologically up
to date Nigeria retail banks to have access international banking networks in order to
efficiently affect fund transfers. Some of these Nigerian banks have also joined the
society for world wide inter - bank Financial telecommunication (SWIFT). This provides
facilities for international payments and settlement through financial data
communication and processing as well as the provision of system messages and
reports.
4.6 TEST OF HYPOTHESIS
In each test of hypothesis, contingency tables were developed for each hypothesis and
CHI SQUARE. Tools of analysis were used in each hypothesis. The researcher used 5%
level of significance as her operational assumption.
HYPOTHESIS 1
Testing whether the use of information technology has led to lime reduction in banks.
Statement of Hypothesis:
Ho: Information technology in banks has not reduced time wastage in Banks.
Hi: Information technology in banks has reduced time wastage in Banks.
Tool of analysis CHI Square
Testing the above hypothesis using CHI -Square

Technique
X2= oi - ei
ei
Where
X2 = CHI - Square
oi = observed frequency
ei = expected frequency
= Summation sign
Level of significance 5%
Degree of freedom = (R - 1) (C - 1) here
Where R = number of rows
C = number of columns
From the table, C = 3 and R = 2
difference = ( 3 - 1) (2 - 1)
= 2 x 1=2
Therefore, the table CHI Square = 5.991
Table 4.10
Contingency table on testing whether the use ol information technology has led to time
reduction in banks.
Responses oi ei oi ei (oi ei)2 (oi ei)2/ei

Very high 67 27.33 39.67 1573.71 57.58
High 10 27.33 17.33 498.63 10.99
Not at all 5 27.33 22.33 300.33 18.24
Total 82 86.81
Source: computed from table 4.7
X2 calculated value = 86.81
0.05 X2 table or critical value = 5.991
Decision Rule:
Accept Ho, if the table value is greater than the computed or calculated value, other
reject Ho and accept Hi.
i.e 5991 < 86.81
Therefore, reject Ho and accept Hi which states that information technology in banks
has reduced time wastage experienced by bank customers.
Hypothesis 2;
Testing if information technology in banks has increased the volume depositor in banks.
Statement of Hypothesis
Ho : Information technology in banks has not increased the number of depositors in
banks.
Hi : Information technology of banks has increased the number of depositors in banks

Testing the above hypothesis or data using CHI Square Technique
X2= oi - ei
ei
Where
X2= CHI square
ei = Expected frequency
= Summation sign
Level of significance = 0.05
Degree of freedom = (e - 1) (R - 1)
=Ix2=2
Therefore, the table CHI - square = 5.991
Decision Rule
Accept Ho if the critical or table value is greater than the computed calculated value,
otherwise reject Ho
Table 4.11
Contingency table of distribution on testing if information technology has increased the

number of depositors in banks
Responses Oi Ei oi - ei ( oi - ei)2 (oi - ei)2/ ei

Strongly 75 27.3 47.67 2272.42 83.15
agreed
Fairly agreed 7 27.33 -20.33 413 .31 15.12
Disagreed - 27.33 27.33 746.92 27.33
Total 82 125.6
Source: Computed from table 4.1
Decisions
Reject Ho since calculated value is greater than the tabular value , Hi is accepted which
states that information technology has led to an increase in the volume of depositors in
banks.
Hypothesis 3
Testing whether information technology has reduced the cost of banks operational cost
including daily work loads.
Statement of Hypothesis
Ho : Information technology has not reduced the bank's operational cost including daily
work loads
Hi : computerization has reduced the banks operational cost including daily. Work load
Testing the above technique or hypothesis using CHI Square
X2= oi - e
ei
X2= CHI Square
= summation sign.
Level of significance = 5%
Degree of freedom = (R - 1) (C 1)
Where R = number of rows
C = number of columns
From the table, C = 3 and R = 2
difference = (2 -1) (3 - 1)
= 1 x2 = 2
therefore, the table CHI square = 5.991
Decision Rule
Accept Ho if the table value is greater than the computed value, otherwise reject Ho.
Table 4.12
Contingency table on testing whether the information technology has reduced the
banks operational cost including daily work loads.
Responses oi ei oi - ei ( oi - ei)2 (oi - ei)2/ ei

Substantially 14 27.33 -13.33 -177.69 6.50
Minimally 19 27.33 -8.33 -69.39 2.54
Not at all 49 27.33 21.67 469.59 17.18
Total 82 26.22
Source: computed from table 4.9
Decision
Reject Ho, since the calculated value is greater than the table value. Therefore accept
Hi which states that information technology has reduced banks operational cost
including daily work load.
Hypothesis 4:
Testing whether the use of information technology has contributed to better

information storage in banks.
Statement of the Hypothesis
Ho: Information Technology has not contributed to better information technology in

banks.
Hi: information technology has contributed to better information data or storage in
banks.
Testing the data above or hypothesis using Chi - Square technique,
X2 = oi - ei
ei
Where
X2 =CHI - Square
= summation sign
Level of significance = 0.05
Degree of freedom = (C- 1) (R - 1)
= (2 - 1) (3 - 1)
=1x2-2
Therefore, the table CHI square = 5.991
Decision Rule
Accept Ho if the table value is greater than the computed or calculated value otherwise
reject Ho.
Table 4.13
Contingency table for distribution testing whether the use of information technology has
contributed to better information storage in banks.
Responses oi ei oi - ei ( oi - ei)2 (oi - ei)2/ei

Greatly 74 27.33 46.67 2 1 78.09 79.00
Partially 8 27.33 19.33 373.65 13.67
Not at all - 27.33 27.33 746.92 27.33
Total 82 120.0
Source: Computed from table 4.3
Calculated value X2 = 120.7 0.05 X2 tabular value = 5.991
Decision
Reject Ho, since the calculated value is greater than the tabular or critical value. Hi is
accepted which states that information technology has contributed to better information
storage in bank.
4.7 DISCUSSION OF FINDINGS
The researcher discovered that the use of information technology equipments have
greatly enhanced the internal operation of banks especially in the areas of account
updating and faster cooperation management.
In table 4.9, since their is a greater percentage of respondents that believed either the
reduction in banks operational cost is minimal or that there is no reduction at all. The
researcher found out that information technology has not reduced need the cost of
bank services. The reason for the reduction in bank services include competition in
industry, increase in bank transactions, improved service delivery, etc. Again, from the
personal interview the researcher conducted, she found out from the bank staff that
management of fund planning is obvious through the use of information technology
though some of the customers declared no knowledge of this fact as they do not work
in bank and their money are paid to them when needed as shown in table 4.8.
Again, from the interview conducted by the researcher in table 4.2, many customers
still insisted that they spend much time in the bank before concluding their transactions.
Nevertheless, the researcher observed that information technology has reduced the
length of time customers spend waiting for their transactions to be concluded.
Therefore, from the general finding of the researcher, the information technology has
posed a positive impact in the development of banking system.
CHAPTER FIVE
SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION
The turnaround in the banking industry over the years has been tremendous in terms of
the use of information technology in banking business transactions. It is in relation to
the quality of services rendered to customers through electronic payment system, cash
processing and handling procedures. This has led to positive changes in the
development in the banking industry as competition in the industry has also increased
tremendously.
This research work is to study the impact and role of information technology in the
banking system development in Nigerian economy. The problem and prospects of
information technology in banking system development in Nigeria. Numbers of findings
were made on the research topic, impact and role of information technology in banking
system development in Nigeria. These were all discussed in the following paragraphs.
5.1 SUMMARY OF FINDINGS
The findings of this project were based on the analysis of data collected from different
questionnaires administered to both bank staff and customers. Also oral interviews and
personal observations with some bank staff and bank customers. The researcher
discovered that the use of this technological equipments have enhanced the internal
operation of banks especially in areas such as account updating, signature verification,
retrieving management of finance, faster cooperation management decisions, security
of data and the s storing if information and information transfer Also, it has improved
the external operation of services provided by banks to their many customers.
Customers' enjoy safe, quick and easy fund transfer, geographical location irrelevant to
customers. These services are discovered to be run efficiently. The research also
discovered that there is a significant increase in the transferability of money from one
business office to another over the years. This increase has been contributed by the use
of information technology in the operation of banks. It was also discovered by the
research that computerization or technology equipment has not actually reduced the
cost of services rendered by banks to then customers. The researcher further
discovered that the use of information technology in banks has encountered some
problems, which are electricity power failure, increase in computer aided fraud by bank
staff, bank customers or both.
Furthermore, high cost of maintenance in the training of staff, high cost of information
technology equipment and accessories, lack of experts and personnel, and
unemployment was also identified as a problem facing the use of information
technology in the development of the banking system.
5.2 RECOMMENDATIONS
Based on the project report findings on the impact of information technology in the
banking development in Nigeria, the researcher hereby makes the following
recommendations.
i) INTERNAL MANAGEMENT CONTROL
With regular auditing, supervision and accountability, the problem of management of

bank fraud can be corrected if the management establishes a strict structure with
formal written policies and procedures. There is therefore need for the installation of
adequate internal security system, including warning signals and close monitoring of
staff. The issue of electricity power supply should be addressed by bank management
through the purchase of individual transformer in order to have access to full electricity
power supply rather than waste money on the purchase of hiring of generators which
will eventually add to cost of services rendered by the banks to their customers.
Management can also be able to control the internal security system and computer
fraud because of the constant supply of electricity power.
ii) CREATION OF PUBLIC ENLIGHTENMENT PROGRAMME.
Banks should go extra miles creating awareness in the type of services they offer to the
public (banking) through the use of information technology equipment so there should
be seminars, journals, publications, radio and television messages information centre on
how to use the equipment efficiently. With this enlightenment, the banking habits of
customers will increase.
iii) TECHNOLOGICAL INNOVATIONS AND STAFF TRAINING Technology changes

everyday, I he banks have to create rooms for such changes, so that they can update
(he services rendered to (he public by the purchases of new information system. There
should be continuous training and development programmes that must be vigorously
implemented by banks to update the skill of their staff and the quality of personnel that
will be facing the emerging trend in the sector. 1 here should be compulsory continuing
professional development too be organized by financial institution training centre
(FITC), Chartered institutes of bankers of Nigeria (CIBN) etc.
Furthermore, with the establishment of more banks, their survival will depend largely
on the quality of technological innovations and well qualified personnel to handle the
equipments. Blinking is a sophisticated, dynamic and competitive business that does not
require half baked manpower and obsolete equipment.
iv) BANKS /CUSTOMERS RELATIONSHIP
The management should put the view of some of the customers that are experts into
practice on how to satisfy them from the use of computerized banks, products and
those areas that need to be improved on. Management should satisfy the customers by
reacting to their views positively.
5.3 CONCLUSION
Despite the paucity of infrastructure in Nigeria, advances in information DOB technology

have been the most influential factor in Nigeria banking development for some time.
Advances in information technology has for instance led to increased pace and speed of
banking transactions resulting in lower queuing time reduced risks of banking services
and improved services quality. It has also resulted in increased volume and quality of
transactions and improved staff efficiency.
Advances in information technology have however created its own challenges. This is
especially so in the area of regulation and fund control. Perhaps, most disturbing is its
potential of facilitating the diversion of rural funds to urban areas thus making the poor
to get poorer. Unless we can avoid the realization of the above potential, the positive
impact of technology in the development of banking system in Nigeria will always be
overshadowed by this prospects or problems.
BIBLIOGRAPHY
Adeumi, D.O.H Jaiyemisi ( 1989); Computer Application in Nigeria Ibadan University

Press.
Anyanwaokoro, M. ( 1996), Banking Method and Process. Enugu, Hosanna
Bank and other Financial Institution Amendment Decree No: 25: 2000
Babangida, A. (1983) Challenges of Computerization in Banking and Finance Industries.

A conference paper at (he XI National Conference of Computer Association of
Nigeria.
Bestman, K.C (1998): A Handbook on Corporate Restructuring and the Computer,

London
Central Bank of Nigeria (1998) CBN Annual Report and Account
Collier Paul (2000): A Survey on Line finance Economist May 13 19
Ebitimi. E. Bango ( 1998): The Banking Industry in the 21st century. Business Time
September 21st
Hkpe. A. (1997) A view from the banking industry in Financial Integration and
Development in Africa (published by Organization of African Unity and the
African Economic Community).
First Bank Of Nigeria and Banking in Nigeria, The Business and Economic Report (1991)
application of modern technologies in the nineties.
First Bank of Nigeria Plc (1998/1999) . FBN Annual Report and Account.
Golitz(1990) : Handbook of Business Security: New York
Lemo Tunde (2002) Globalization and Information Technology: Challenges before

Bankers. Business Time. December 22
Nwankwo. GO (1997): The Nigerian Banking System in the 21st Century published by
chartered institute of bankers of Nigeria. January - June.
Ogbeide. F: (1999): Keeping in the Tune with Global banking Development. Business
time June 21s1.
Osadolor Victor (2002), Benefit of Information Technology. Business Times, October 3
Ogwuma. Paul. A. (1997). Bullion Publication on the Central Bank of Nigeria. Volume
21. No.4 October/ December.
Palmer D.C.M. ( 1990) . Computer Science Great Britain, Business Education Publishers.
Sinkey Joseph F. Jr. (1987) Commercial Bank Financial Services Industries. England, 4U
Edition.
Standard Trust Bank ( 1999) STB Annual Report and Account.
Union Bank of Nigeria Pic ( 1999): Annual Report and Account

QUESTIONNAIRE
Department of Banking and Finance
Faculty of Management Sciences
Nnamdi Azikiwe University,
June 20th, 2006
Dear Sir / madam,
I am a student of the Department of banking and finance in Nnamdi Azikiwe University,

Awka. I am currently conducting a research on the impact of information technology in
banking development in Nigeria. The research work is part of the programme leading to
the award of a B. Sc degree in banking and Finance.
I will sincerely appreciate your kind gesture if you would supply me with some of the
information and data needed in completing the questionnaire. Be assured that the
information and data supplied would be treated with absolute confidence.
Thanks for your co - operations.
Yours faithfully,
Frank Kelvin C.
NAU/ 2001554388
Questionnaires
Tick the appropriate column with an
1) Sex : Female ( )
: Male ( )
2) Working Experience;
Between 1- 5 years ( )
Between 5 - 10 ( )
3) Type account maintained
a) Current ( )
b) Savings ( )
c) Fixed ( )
d) Others ( )
4) For how long have you transacted with the bank
a) Between 1-3 years ( )
b) Between 4 - 10 years ( )
c) From 10 years and above ( )
5) How computerized do you consider your bank?

a) Fully ( )
b) Fairly ( )
c) Not at all ( )
6) To what extent has information technology reduced time wastage in your bank?
a) Very high ( )
b) High ( )
c) Very low ( )
7) There are some areas in the banking services that still need to be developed with
this recent trend of information technology
a) Strongly agreed ( )
b) Agreed ( )
c) Disagreed ( )
8) Information technology has increased the number of depositors in your bank.
a) Strongly agreed ( )
Please indicate in accordance with your agreement on the problems facing the use of
computers in your banks operation. The problems in tabular form.
Technology in Nigeria Banking Systems
Agreed Fairly Agreed Not at all Total

Inadequate
expertise in
both
management
and employees
of banks
Unsteady
power supply
Huge cost of
maintenance
and repair of
information
technology
gadgets
Computer fraud
Inadequate
awareness on
recent
development
inducing
unemployment
Low level of
market for
online banking
Dearth of
investment
capital

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THE IMPACT AND ROLE OF INFORMATION TECHNOLOGY IN

BANKING DEVELOPMENT IN NIGERIA

(A STUDY OF SELECTED COMMERCIAL BANKS IN ANAMBRA STATE)

FRANK KELVIN CHIADIKA

PROJECT REPORT SUBMITTED IN PARTIAL FULFILMENT OF THE

1. United Bank for Africa Plc. (UBA)

2. Union Bank of Nigeria Plc.

3. First Bank of Nigeria Plc.

Cover page ---------------------------------------------------------------------------i

CHAPTER ONE: INTRODUCTION

1.1 Background of study------------------------------------------------------------------1

1.3 Objectives of the study---------------------------------------------------------------6

1.4 Significance of the study -------------------------------------------------------7

1.5 Statement of hypothesis -------------------------------------------------------8

1.6 Scope and limitation of study---------------------------------------------------------8

1.7 Definition of terms----------------------------------------------------------------------9

2.1 Overview of the banking scene --------------------------------------------------12

2.2 Concept of computer----------------------------------------------------------------------14

2.3 Types of computer system----------------------------------------------------------------18

2.4 Characteristics and qualities of a computer -------------------------------------------18

2.5 General comments on computer installation-------------------------------------------20

2.6 Commercial application-------------------------------------------------------------------20

2.7 Role of computer in bank management-------------------------------------------------23

2.8 Some technological driven product in banking----------------------------------------27

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Sources of data------------------------------------------------------------------------------43

3.2 Sampling size and technique---------------------------------------------------------------44

3.3 Method of data collection------------------------------------------------------------------44

3.4 Validation of research instrument---------------------------------------------------------45

3.5 Method of data presentation---------------------------------------------------------------45

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Bio- Data----------------------------------------------------------------------------------------48

4.3 Recent trends in information technology------------------------------------------------51

4.4 Prospects of information technology in Nigeria banking industries-------------------54

4.5 Ways of improving the relevance of information technology in Nigeria banking

4.6 Test of Hypothesis--------------------------------------------------------------------------58

4.7 Discussion of findings-----------------------------------------------------------------------60

CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSIONS

Appendix: Questionnaire for both bank staff and bank customers------------------------76

Table No: Table Title Pages

4.1: Responses on the extent information technology has

increased the number of depositors in banks

4.2 Response on the extent information technology has

made office work of bank staff less burdensome

4.3 Response on the extent information technology has

led to more efficient storage in banks

4.4 Response on the extent some areas in banking

4.5 Response on the extent information technology has led to the

introduction of electronic fund transfer

4.6 Responses on the study of bank computerization

4.7 Responses on the extent information technology has reduced

time, wastage in banks.

4.8 Responses on the extent information technology has contributed

to better planning and management of funds in banking business

4.10 Contingency table on testing whether the use of information

technology has led to time reduction in banks.

4.11 Contingency table of distribution on testing whether information

technology has increased the number of depositors in banks.

4.12 Contingency table on testing whether information technology has

reduced the bank's operational cost including daily works.

4.13 Contingency table of distribution on testing whether the use of information

1.1 BACKGROUND OF THE STUDY

A core component of information technology development change is the semi-

2. Transfer of money through Electronic Fund Transfer ( EFT)