CH1APTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Information to a modern organization is a resource that is parallel in importance to land, labour and capital. It is a very vital resource. Information therefore, is data that have been processed into meaningful and usable form, and it contains knowledge that reduces uncertainty in a particular situation (Senn, 2015). A powerful force drives the world towards a converging commonality, and that force is technology (Levitt, 2012). From the beginning of the world technology has being one of the most essential and important factors for the development of mankind (Coombs et al, 2014). During the last two hundred years, technology changes have often been related ‘to economic growth in the form of new types of goods and services.

 It is a computer- based system as well as telecommunication technology for storage, processing, and dissemination of information, (Princhard and Cole 2007). It is no longer news that we are now in information age that is revolution and an information superhighway on which every corporate entity and profession must adopt if it is to survive in the 21st century. The world of business and governance in the information age is further complicated by such concept such as democratization, competition, deregulation, privatization, commercialization, liberalization, internalization and computerization. This makes it impossible for an organization or country to survive and grow without information technology.

Today’s business environment is very dynamic and undergoes rapid changes as a result of technological innovations, increased awareness and demands from customers. Business organizations, especially the banking sector of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Laudon and Laudon, (2011), contend that managers cannot ignore information technology it because R plays a critical role in the advancement of contemporary organization.

The adoption of information technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all banks. This is owing to the fact that it is a prerequisite for local and global competitiveness. Information technology has directly influence the products and services that are offered in the banking industry. It has continued to change the way banks and their corporate relationship are organized worldwide and the variety of innovative devices available to enhance the speed and quality of service delivery. The banking industry in Nigeria has witnessed tremendous changes linked with the developments in information technology over the years. The quest for survival, global relevance, maintenance of existing marketshare and sustainable development has made exploitation of the many advantages of information technology through the use of automated devices imperative in the banking industry. It is against this backdrop that this study seeks to examine the impact of information and communication technology on the operational performance of some selected deposit money banks.

1.2 STATEMENT OF PROBLEM

The Nigerian banking system saddled with the responsibilities to deliver all the required banking and other financial services that are approved by law to its customomers : indiduals, corporate bodies ,agencies of both government and non-governmental. These responsibilities had brought about several studies to ascertain the impact of banks in delivering its obligation to its consumer and customers. Such as studies includes ariyo (2006),Dabo(2007)and sani(2010)they which all these studies either reported on banks performance after consolidation ,orthe performance of the banks in relation the economic growth and or the recapitalization exercise on banks performance.

This study focuses its problems on information teleology adoption and its efficiency on banks in delivering its services. With the reformation exercise of 2005 banks were mandated to adopt and improve on information technology usage in order to achieve surveillance and effective and prompt delivery in its activities.  The problem arises as to how information and communication technology has impacted on operational performance of financial institutions. An empirical investigation on banks.

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1.3 OBJECTIVES OF THE STUDY

The aim of study is to examine the impact of information and communication technology on the operational performance of some selected deposit money banks in Nigeria.

The specific objectives of this study include:

        i.            To assess the impact of the introduction of information and communication technology on the performance of financial institutions.  

      ii.            To evaluate the level of customers’ satisfaction on the implementation of information and communication technology in Nigerian banks.

    iii.            To identify the impact of information technology on the profit-position of Nigerian banking sector.

1.4 RESEARCH QUESTIONS

The research questions for this study are as follows:

        i.            To what extent does the introduction of information and communication technology impact on the efficiency of Nigerian banks?

      ii.            How does implementation of information and communication technology in Nigerian banks affects the level of customers’ satisfaction?

    iii.            How does information and communication technology affect the profit-position of Nigerian banking sector?

1.5 HYPOTHESES OF THE STUDY

The study will postulate the following null Hypotheses

Ho1: there is no significatcsnt impact of information technology on the performance of financial institutions in nigeria

Ho2: There is no significant impact of information and communication technology on bank customers’ satisfaction in Nigeria.

Ho3: There is no significant effect of information technology on the profit position of Nigerian banking sector.

1.6 SCOPE OF THE STUDY

The research work is titled impact of information and communication technology on the performance of financial institutions. The study will be limited to three selected deposit money banks in Nigeria. The variables of the study are the information and communication technology and the performance of Banks as the independent and dependent variables respectively. The study will cover the period of (5) years, that is, 2010-2015.

1.7 SIGNIFICANCE OF THE STUDY

This study will throw more light on how information technology has assisted Nigerian banks in meeting up with the high expectations of customers; unveil new products and services information technology has provided to Nigerian banking sector which had enabled them to maintain high level of efficiency and productivity; reveal new customer services Nigerian banks renders to their customers via information technology in order to ensure that customers’ needs are adequately satisfied.

Furthermore, it will bring to the knowledge of the general public the new service delivery channels information technology has introduced to Nigerian banking industry; suggest to the government ways in which information technology can be used as a cornerstone in reforming the financial sector which is aimed at increasing the speed and reliability of financial operations, and equally to strengthen the banking sector.

Moreover, it will serve as a body of knowledge to... be referred to by other researchers and clearly elucidate ways in which information technology can provide the Nigerian banking sector with the wherewithal to deal with challenges in the economy.

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