Amount: $23.81 |

Format: Ms Word |

1-5 chapters |


Bank Name: FCMB Bank

Account Type: Savings
Account number: 7749601025

Bank Name: Access Bank

Account Type: Current
Account number: 0107807602



The banking industry of the 21st century operates in a complex and competitive environment characterized by ever-changing economic and financial environment with information and communication technology (ICT) at the center of this change. As Information Technology is vital in banking operations today, it becomes imperative for banks to realize its impact on operational performance in order to justify capital investments. The objective of this work was to examine how the adoption of Information and Communication Technology (ICT) affects the competitive performance of banking sector using independent sample t-test. Findings from the study revealed that a positive relationship exists between ICT and banks performance in Nigeria. This implies that a marginal change in the level of the investment and adoption of ICT such as (Automated Teller Machine, Web based transactions, and Mobile payments) in the banking industry resulted in a proportionate increase in the profit level. The study thus recommends that it is imperative for bank management to intensify investment in ICT products to facilitate speed, convenience, and accurate service delivery. These will make Nigerian banks to be efficient, profitable, and competitive and to cope with the changes and challenges that are the outcome of ICT controlled globalized economy.



1.1     Background to the study                 

Today’s business environment is very dynamic and undergoes rapid change as a result of technological innovation,increased awareness and demands from customers.  Business organization, especially the banking industry of 21st century operates   in  a  complex environment characterized by these changing condition and highly unpredicted economic climate.Information and communication technology(ICT) is at the  centre  of  this  global  change.  They  point  out  that  entire  cash  flow  of  most  fortunate  500  companies  is  linked  to  information.  The adoption of ICT is defined as a collective term for a wide range of software, hardware, telecommunications and information management techniques, applications and devices, that are used to create, produce, analyze, process, package, distribute, receive, retrieve, store, and transform information (Brady et al.,2002). In  essence  the  importance  of  information  and  communication  technology  banking  is  itemized   through  information  technology  industry. Effectiveservice  delivery in  information  banking  brings  about  reduced  frustration and  Improve  level  of  awareness  in  an  organization  (Ato,2004).  Information  technology  has  continued  to  change  the  way  banks  and  their  corporate  Relationship  are  organized.  worldwide  and  the  variety  of  innovation  device  available  to  enhance  the  speed  and  quality  of  service  delivery. Ezeamama,(2010): reported  that  information  and  communication  technology  refers  to  the  various   technologies  that  enhance  the  creation,  storage,  processing,  communication  and  dissemination  of  information.  It  involves  the  different  infrastructure  used  in  these  processes,  their  application  and  numerous  service,  these  infrastructure  renders. In  1978  annual  report,  the  Bank  reported  that  the  department made  steady  progress  on  its  effort  to  effectively  use  of  information  and  communication  technology (ICT)  to  improve  the  efficiency and  the  quality  of  service  delivery   on  financial  sector.  Information  and  communication  technology  is  radically  changing  all  over  the  world.  The  volume  and  speed  of  handling  transactions  has  improved  tremendously  as  a  result  of  the  growth  of information  technology  which  has  created  a  lot  of  business  opportunities.

Technology and more specifically Information and Communication Technology (ICT) are one of the resources needed in the banking sector for effective management. It has significantly improved the ability of the manager to monitor individual or team performance and it has allowed employees to have more complete information to make faster decisions.

Through Information and Communication Technology (ICT) services available to First Bank Plc Makurdi, it can now give its customers a unified access to manage their personal financial information.

The adoption of Information and Communication Technology (ICT) by this bank has increased its operational efficiencies, reduced cost through high utilization rates in the ICT environment to ensure compliance with changing time and to gain competitive advantage (Haggani A.B, 2003).

Methods of handling financial services has to change from old manual transactions and data processing to a faster, more effective and highly efficient electronic data processing and Electronic Fund Transfer (EFT) i.e. deposits, withdrawals, bills-pay-in, purchases of draft, value for cheques, third party transactions, fund transfer and inquiries are all done electronically within seconds.

The adoption of Information and Communication Technology (ICT) has also helped First Bank Plc Makurdi to keep the pace with the changing customers’ needs and market dynamics and create a competitive differentiation in products and services (Haggani A.B, 2003).

The complex nature of the banking system, its products and services have made it necessary for banks to embrace this change as quick as possible since this medium of banking has proven to be very efficient in most countries of the world( for example America) and Nigeria is no exception.

Application  of  information  and  communication  technology  is  capable  of  enhancing  optimal  performance  in  service  delivery  if  appropriately  carried  out.  Optimal  utilization  of  facilities  might  be  achieved   if  the  design  is  done  based  on  clear  understanding  of  how  the  service is  to  be  measured.  Such  measurement  include  customer’s  service  rate,  traffic  intensity and the  average  number  of  customers  in  the  queue.  All  these  assist  to  make  decisions  on  the  level  at  which  information  and  communication  technology  can  be  applied  for  an  optimal  performance  in  Banking  operation. What  prompted  this  work  was  the  various  computerization  activities  going  on  in  the  banking  sector  which  has  been  accredited  to  the  use  of  information  and  communication  technology(ICT)  in   running  of   activities  in  the banks.  The  study  has  also  been  considered  worthy among numerous  research  work  due  to  the  contribution to  the  banking  system  and  economy  at  large.   The study  is  to  look  at  the  effect which ICT  has  on  banking  sector  and  also  the  threats  it  has  created  since  the  use  of ICT which  has  been an  increase.  Also  to  find it  out  the  information  and  communication  technology  has  really  improved  the  productivity  of  the  banking  sector  compared  to  when  it was  not  being  used.  As  such  the information  technology  banking  makes  use  of  modern  satellite  communication  facilities  and  different  modes  of  transportation  technology  Banking  is  thus  high  capital – based  organisation  which  has  network being  spread  by  using  modern  sophisticated  equipment (Akunyili, 2004).


1.2     Statement of the problems 

This  Research  work  is  a  study  of  the  impact  of information  and  communication  technology(ICT)  on  the  banking  sector. Many  problems  confronting  the  banks  in  Nigeria  is  in  their  use  of  information  and  communication  technology(ICT).

One of the challenges confronting ICT in Nigeria could be classified into three classes as human, operational and technical constraints. The human constraints include physical disability, poor sight, illiteracy and ageing. The operational constraints include insecurity of funds transferred, frauds and standardization of channels. The technical constraints are centered on the lack of supporting infrastructures such as erratic electricity supply, interdependence and lack of encryption on short message system (SMS) messages (Agbada, 2008).

Other identified problems that can have an impact on the banks in the adoption of ICT can be grouped broadly as psychological and behavioral. These include consumer awareness, security, accessibility to computers, reluctance to change, the cost of adoption, and preference for personalized services among others.

Additionally, diffusion of smart card innovation needs high investment for the upgrades of ATMs and EFT/POS terminals to be capable of accepting smart cards and presumably a substantial investment in adding smart card technology for mobile computers and telephony stand to be another challenge. The implementation of smart cards for the whole Europe, according to Visa figures, requires eight billion dollars ($8 billion) investment. Although this is an affordable amount for many of the potential players, most players would only pay the entire amount if it would give them some proprietary or luck in advantage. So far, no player has felt confident enough to take a committed first mover position. This is in developed countries, what more of a developing country like Nigeria (Ovia, 2005).

Coupled with these problems is a situation where a bank issue an individual debit card that is associated with an account with a line of credit and is also an ATM debit card, the individual can perform a number of different types of transactions with the same card. The line of credit could be accessed fraudulently, where the owner has recourse under consumer credit legislation and under regulation if the fraud involves an electronic fund transfer (EFT). When automated teller machine (ATMs) or electronic point of sale (POS) terminals are used, his liability is limited under the EFTA.

The  problem  associated  with  the  study  is  to  determine the  true  position  of  the  banking  system and  what  it  should  achieve  if  it  will  align  with  the  global  Information.  This  however  becomes  a  huge  task  as  the  study  tries  to,

  1. Identify the  degree  acceptance  of  information  and  communication  technology  in  banking  sector.
  2. Examine the  contribution  of   information  and  communication  technology  to  the  growth  of  the  banking  sector.
  3. Know if  information  and  communication  technology  is  enhancing  efficiency  in  banking  sector   and  the  effects  it  will  have  on  banks  that  have  not  fully  adopted  it  in  their  banking  system.


1.3     Research Questions

  1. What is the effect OF ICT on the productivity of the banking sector?
  2. What is the impact of ICT on the Innovation of Nigerian banking sector?
  3. What is the impact of ICT on the banking sector Market Structure?
  4. What is the impact of ICT on the banking Sector Value Chain?


1.4     Objectives of the study

  • Main objective

The main objective of this study is to analyze the impact of ICT on the banking sector of Nigeria.

  • Specific objectives

The following are the specific objectives of the study

  1. To examine the effect OF ICT on the productivity of the banking sector.
  2. To examine the impact of ICT on the Innovation of Nigerian banking sector.
  3. To assess the impact of ICT on the Nigerian banking sector Market Structure.
  4. To examine the impact of ICT on the banking Sector Value Chain.


1.5     Hypothesis of the study

HO1: There is no effect OF ICT on the productivity of the banking sector.

HO2: There is no impact of ICT on the Innovation of Nigerian banking sector.

HO3: There is no impact of ICT on the Nigerian banking sector Market Structure.

HO4: There is no impact of ICT on the banking Sector Value Chain.


1.6     Significance of the study

Every organization is concerned with the best possible way of improving performance to guarantee sustainable growth that will lead to the achievement of organizational goals.

Therefore, the knowledge that would be obtained from this research will assist management of banks to appreciate the importance and use of ICT products to achieve overall efficiency and effectiveness in their operations.

This study will also benefit financial institutions in general, as it will provide the framework with which proper system upgrades can be carried out together with the adoption of computer to guarantee efficient service delivery, maximization of profit and minimization of cost.

Students of management sciences and other researchers who intend to carry out further studies will find this study as a useful reference material especially in their literature review and findings thereby helping to arrive at objective conclusions.

Finally, it is hoped that the conclusions arrived at, will assist business organisations in ICT application so as meet desired organisational goals and objectives.


1.7     Scope of the study

This study was on the impact of ICT on the banking sector. This study was limited to Guaranty Trust Bank plc, First Bank of Nigeria plc, Zenith Bank international and United Bank for Africa (UBA).


1.8     Limitations of the Study

In this study “the impact of Information and Communication Technology (ICT) on Nigerian Banks’ performance”, the research is limited by time to go that far and treat this exhaustively.

The research is also limited by secrecy of information in the bank, which requires permission of the bank’s higher authority hence most information was regarded as classified information.

This research is also limited to the impact of ICT on banks’ performance and this is due to the fact that, this is the researcher’s main concern at the moment.


1.9     Operational definition of terms


Information refers to a processed/analysed data through the computer system that informs a recipient about a situation. It is the meaning assigned to data within some context for use of data, Walters, (1992).


Data are raw, unanalysed facts, figures, events from which information can be developed. A data is a basic raw fact that can process and converted to a meaning output called information. It is the encoded representation of facts, ideas and instructions such that the representations can be processed, communicated and interpreted by computers and/or people, Walter (1992).


A computer is a programmable, multi-purpose use machine that accepts data (raw facts and figures) and processes or manipulates it into information that we can understand and utilize (Microsoft Encarta (2009).


Communication often called telecommunication allows data and information to be transmitted from one point to another electronically. It is the transfer of idea or information from data processing system to ultimate users. The ultimate purpose of communicating is to inform the recipient.


It is a term used for a direct or immediate communication link between two devices. Online links are contrasted with offline links, in which only direct communication is possible. Thus, a telephone link is online, whereas, a telegram link is offline. The term online and offline are further used to denote the difference in time between when data in input into the system and when it is processed. A computer works online if input data is processed immediately (real-time processing operating mode) and offline if there is a significant time period between input and processing time, Clems & Sachwill (1992).

Disk Storage:

This is data storage on optical or magnetic tape/disc in memory system. It is characterized by low cost and relatively fast access to data stored on it. Longley & Shain (1989). External memories such as CD ROMS, DVD ROMS, Flash drives, external hard drive etc are capable of storing and retrieving billions of information in a small portable device.


Internet is also known as the net is a massive connection of networks linking millions of computers via protocols, hardware and communication channels. It enables the automation of several tasks which have been carried out manually in the past.

Electronic Mail (e-mail):

It permits the transmission of letters, memos and other documents from one terminal or computer to another in a different office, city, state or country, Fuori and Gioia (1991). E-mail uses a central switching centre which is responsible for renting mailboxes to subscribers and- acting as the public telephone network link.  Anderson (1990). When a message is created on the sender’s system, it is addressed to a remote mailbox and it’s transmitted by telephone line or wireless network to the mailbox services operator and forwarded to the receiver.


1.10   Organization of the study

For the work to be orderly and to enhance effective flow of reading and to afford readers of this thesis better understanding of the subject matter, the entire work is to be structured and organized into five (5) main chapters dealing with a particular aspect of the subject matter.

The chapter one contains the proposal and general information about the study. It will include the general introduction, background information of the study, problem statement and objectives of the study, research question / hypothesis, scope of the study, relevance of the study, limitations and the organisation of the study.

The second chapter presents a review of literature related to the study with the view to positioning the study within other similar studies and explores available knowledge in the study area.

Chapter three shall detail out the procedure and methods that will be used to carry out the study. It will explain the entire research design and methodology to be used, the data collection method and statistical procedures used to analyze the data. Chapter four shall contain analysis done on the data collected and presents them in forms that shall be easily and readily understood by readers. This will include tables, figures, charts and narrations.

Chapter five will feature a summary of findings, conclusions and recommendations that shall be made appropriate for corrective action.