IMPORTANCE OF SERVICE IN NIGERIA ECONOMY

The world economy is increasingly characterized as a service economy. This is primarily due to
the increasing importance and share of the service sector in the economies of most developed
and developing countries. In fact, the growth of the service sector has long been considered as an
indicator of a country’s economic progress. Economic history tells us that all developing nations
have invariably experienced a shift from agriculture to industry and then to the service sector as
the mainstay of the economy. This shift has also brought about a change in the definition of
goods and services themselves.

Service organizations vary widely in size. At one end of the scale are huge international
corporations operating in such industries as airlines, banking, insurance, telecommunications,
and hotels. At the other end of the scale are a vast array of locally owned and operated small
businesses, such as restaurants, laundries, optometrists, beauty parlors, and numerous business-
to-business services.

The service sector is going through revolutionary change, which dramatically affects the way in
which we live and work. New services are continually being launched to satisfy our existing
needs and to meet needs that we did not even know we had. Nearly fifty years ago, when the first
electronic file sharing system was created, few people likely anticipated the future demand for
online banking, website hosting, or email providers. Today, many of us feel we can’t do without
them. Similar transformations are occurring in business-to-business markets.

The Role Of the Service Economy In Development

As of 2008, services constituted over 50% of GDP in low income countries. As their economies
continue to develop, the importance of the service sector continues to grow. For instance,
services accounted for 47% of economic growth in sub-Saharan Africa over the period 2000–
2005, while industry only contributed 37% and agriculture only 16% in that same period. This
means that recent economic growth in Africa relied as much on services as on natural resources
or textiles, despite many of those countries benefiting from trade preferences in primary and
secondary goods.

As a result of these changes, people are leaving the agricultural sector to find work in the service
economy. This job creation is particularly useful as often it provides employment for unskilled workers in
the tourism and retail sectors, which benefits the poor and represents an overall net increase in
employment. The service economy in developing countries is most often made up of the following
industries: financial services, tourism, distribution, health, and education.

Services as Solutions

Firms need to understand their service and their customers to ensure that their services will be viewed
as solutions to consumer needs.
HISTORY OF THE DEVELOPMENT OF BANKS IN NIGERIA
Before the establishment of central bank of Nigeria, the West Africa currency Board (WACB) which was
founded in 1912 had been in existence and has been issuing out legal tender currency. It was however
linked automatically to the British system and could not engage in monetary management neither
where Nigeria trained to the act of monetary management. In other to eliminate this deficiency and
thereby promote the growth of money and capital market, to central bank of Nigeria was established in
1958 and it commence business on 1st July 1959 with an initial capital outlay of #3 million which was
subscribed to and wholly paid up for by the federal government of Nigeria.

The central bank of Nigeria known as Apex monetary authority through a major role in the management
of the economy with monetary policies measure up reasonable design to enhance the achievement of
nations economic objective. It facilitate economic management through its domestic and foreign
operational activities. A monetary circular issued at the beginning of each year by the central bank of
Nigeria to commercial and merchant banks includes the banking system to play a vital development role
among other things in the system as the pursue it economic objectives.

The commercial bank precedes central bank and merchant banks in Nigeria hence the awareness of
making institutionalized saving was primarily induced by the commercial banks. It form the nucleus of
the banking system., there are two broad functions performed by the commercial banks. They include.

1. The banking function which involves the creation, distribution and transfer of commercial credit
as well as deposit.

2. The savings function which comprises the mobilization of savings from surplus of the economy
and channeling of such surplus funds towards the non function unit or economy as to enhances
consumers terms and establish more capital project. To execute their retail banking activities
the banks have continued to open branch, networking the branches with computers in different
part of the country.

INDIGENOUS BANK

During the period between 1929 to 1952, numerous indigenous were founded all of them failed except
national bank of Nigeria limited which was set up in 1933. the Agbonmegbe bank limited in Nigeria
currently known as Wema bank limited was set up in 1938 followed by Africa Continental bank which
was set up in 1948 but currently restarted after been bankrupt for a while due to bad management.

MERCHANT BANK

The merchant bank was set up in 1960, which later merged with the then Nigeria Acceptance limited to
became Nal merchant bank limited. The entry of merchant bank into banking system and to bridge the
gap in the structure of credit provision by commercial banks, which favor mainly on short term lending.
The merchant bank numbered four in banking sector with a total of one hundred forty nine branches all
over Nigeria as at the end of 1995 and are mainly wholesale bankers. The merchant bank accept large
deposits usually not less than fifty thousand naira. They specialized in provision of long term loan and
engages in the business of equipment management and factoring investment including loan syndicate to
capital intensive projects. They often provide advisory and other services on managers and acquisitions,
capital reconstruction, privatization of public enterprises, and other scheme and programmes.
COMMUNITY BANK

The introduction of community bank programme was formally announced in 1990 budget speech. It is a
unit bank owned and managed by its community or group of community for providing deposit, credit
and other financial services to it members on the basis of self recognition and credit worthiness. The
reason for setting up community bank are as follows

1. To enhance rapid development or productive activities especially in the rural area of the
country.

2. to promote rural development through the extension of banking services.

3. Improving the Nigeria economic status of small scale produce both in the rural and urban
centers of the economy.

4. To improve banking habits among rural dweller and ensuring the development of integrated
national financial system.

THE ADOPTION MARKETING IN NIGERIAN BANKS WAS SLOW IN THE PAST YEARS

In the 21st century, the face of marketing has dramatically changed as new media channels are surfacing
all the time; the last fifteen years have witnessed the rise of new media channels such as iPads, iPods,
Blackberries, mobile televisions, mobile phones, Facebook, YouTube, Google, Twitter, et cetera and
these new media have not only threatened long established business models of marketing and
corporate communication strategies, but also provide ample opportunities for growth. Through new
adaptive strategies, businesses are finally giving in to new media largely promoted by the internet with
an option so interactive, economical, and convenient (Belch and Belch, 2004).

The advent of mobile television, mobile phones, and the internet, which enable customers to take a
more active role as market players and reach (and be reached by) almost everyone anywhere and
anytime has led to the belief that the traditional means of information dissemination will be a thing of
the past. With viewers now “multi-tasking”-using more than one medium at once-surfing the internet
while watching television (Belch and Belch, 2004).

Justify its adoption

Consequently, technology has empowered consumers to control their own streams of information,
entertainment, and content; where and when they want them. Therefore, media planning in “this”
future will have to change dramatically to keep up (Belch and Belch, 2004).

Specifically, across the banking world, the pace of change is rapidly accelerating and business models are
quickly evolving. Survival in this brave new world is no longer based on the size of the bank, but rather
on its ability to innovate. Most banks are investing heavily in applications for smart phones and digital
tablets that make it easy for customers to conduct a wide range of banking activities while on the go.
Some are developing interactive tools that help customers analyze their spending habits and strengthen
their money management skills. Still others are mobilizing the power of social networks to draw “fans”
to feature-rich Facebook pages that build their brands and entice consumers to share personal
information.