ABSTRACT

As Information Technology is vital in banking today, it becomes imperative for banks to realize its impact on operational performance in order to justify capital investments. The objective of this work is to examine how the adoption of Information Technology affects the operations of commercial banks in terms of effectiveness, efficiency, competitiveness, customer base and globalization of the bank. The research methodology involved reviewing the existing network design of the investigating bank and comparing it with the proposed network design solution. The design and simulation results of work revealed that Information Technology led to increase customer satisfaction, improved operational efficiency, reduced transaction time, better competitive edge, reduced the running cost  and ushered in swift response in service delivery. The study recommended that Banks will have to first develop a comprehensive distribution system that will enable customers to touch them at multiple points. Banks must also create performance measurement systems to assure the mix products and services they offer are beneficial to both the customer and the bank. They must determine whether to deploy new technologies themselves or with other service providers. Nevertheless, technology alone will not solve issues or create advantages. This technology needs to be integrated in an organization, with the change management issues linked to people resisting new concepts and ideas. It also needs to support a clearly defined and well communicated business strategy.

 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

          The term ICT is also used to refer to the convergence of audio-visual and telephone networks with computer networks through a single cabling or link system, (Feridun, 2009). There are large economic incentives (huge cost savings due to elimination of the telephone network) to merge the telephone network with the computer network system using a single unified system of cabling, signal distribution and management.

          However, ICT has no universal definition, as "the concepts, methods and applications involved in ICT are constantly evolving on an almost daily basis". The broadness of ICT covers any product that will store, retrieve, manipulate, transmit or receive information electronically in a digital form, e.g. personal computers, digital television, email, robots. For clarity, Zuppo provided an ICT hierarchy where all levels of the hierarchy "contain some degree of commonality in that they are related to technologies that facilitate the transfer of information and various types of electronically mediated communications". Skills Framework for the Information Age is one of many models for describing and managing competencies for ICT professionals for the 21st century, (Cantoni, 2015).       

          The 21^st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past, (Feridun, 2009). Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous.

          Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations (Baker, 1990). The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a direct marketing and accountable customer service environment and new, streamlined business processes. Consistent management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace.

          Case studies have shown that effective and efficient use of Information Technology (IT) helps to distinguish between business equivalents. For example, IT was an important distinction between banks that were doing well in the mid-1980s as compared to those that was less profitable Matt (2007). Hence the need to survive, for global relevance, to maintain existing market share and sustainable development has called for the exploitation of IT and its many advantages. In the banking industry, a list of IT products that have been adopted range from teller printers, Automated Teller Machines (ATMs), smart cards, Magnetic Ink Character Reader (MICR). A list of IT services also includes internet banking, mail, telephone banking, and mobile banking. Accounting for a greater  percentage of what could be regarded as IT in banks is its internetworking. This internetworking refers to the internet, extranet and intranet and interbank networking.

          Intranet exists in branches such that transactions taking place in a branch is only accessible in that branch alone. For example, a branch has a VPN of 10.108.108.0 and another has a VPN of 10.103.103.0. A transaction taking place at 108  networks is exclusively for that network, it cannot be seen from the 103 network. Extranet exists such that a customer is not restricted to the branch he opened his account. He could bank anywhere since  such information is made securely available within the bank regardless of its network. Internet is the unsecured channel wherein both the secured intranet and extranet exists. Here, every other information aimed for the public is made available since they are not confidential. This research work aims at providing Nigerian banks with a better IT solution with respect to its network design, architecture and deployment; to examine how IT affects the operations of banks regarding their effectiveness, efficiency, competitiveness, performance, customer base and globalization; to review the bank’s existing network and provide a workable solutions to the existing  network.

1.2 STATEMENT OF THE PROBLEM

          ICT has also created problems and challenges to organizations and individuals alike -- as well as to society as a whole. The digitization of data, the expanding use of high-speed internet and the growing global network together have led to new levels of crime, where so-called bad actors can hatch electronically enabled schemes or illegally gain access to systems to steal money, intellectual property or private information or to disrupt systems that control critical infrastructure. ICT has also brought automation and robots that displace workers who are unable to transfer their skills to new positions. And ICT has allowed more and more people to limit their interactions with others, creating what some people fear is a population that could lose some of what makes it human.

1.3 OBJECTIVES OF THE STUDY

The objectives this study are stated as follows:

a.     To investigate the availability of ICT facilities in the bank sector.

b.     To investigate the impact of ICT in the banking sector.

c.      To evaluate the challenges of ICT usage in the banking sector.

d.     To know the extent of ICT impact in the banking industry.

1.4     RESEARCH QUESTIONS

1. Are ICT facilities readily available in financial institution?

2. Has ICT improved the efficacy of the banking sector?

3. What are the constraints to effective utilization of information communication and technology as a change agent for the banking sector?

4. To what extend has ICT impact in the banking sector?

1.5 SCOPE OF THE STUDY

          This study on the challenges of ICT and its implication for the 21^st century was carried out in some selected organization. The researchers decided to limit this study to Skye Bank Auchi because of travelling to other organization outside Auchi and more importantly, the difficulty of combining the study with class work.

1.6 SIGNIFICANCE OF THE STUDY

          More than most other industries, banks and financial institutions rely on gathering, processing, analyzing and providing information in order to meet the needs of customers. Given the importance of information in banking, it is not surprising that banks were among the earliest adopters of automated information processing technology. The visible benefits of IT in day-to-day banking in Nigeria are quite well known. There’s ‘Anywhere Banking’ through Core Banking Systems, ‘Anytime Banking’ through new, 24/7/365 delivery channels such as Automated Teller Machines (ATMs), and Net and Mobile Banking. In addition, IT has enabled the efficient, accurate and timely management of the increased transaction volume that comes with a larger customer base. It has also facilitated the movement from class banking to mass banking. One of the important and significant parts of Information Technology as far as banking is concerned is the concept of Mobile Banking. This feature is used by most of us in our daily lives but still some of us are still unaware about how much importance does this have in our lives.

1.8 LIMITATION FO THE STUDY

           In carrying out this study, a number of constraints were encountered.

          Firstly, sufficient data posed hindrance due to shortage of textbooks and journals as the few textbooks available in the library were borrowed and not returned immediately.

          Secondly, some copies of the questionnaires were not returned by the respondents. This limited the number of responses which the researcher had hoped to work within the project.