Impact Of Inflation On Bad Debts Of Financial Institution

1.0 Introduction

1.1 Background of the Study

Every organisation, business, industry and government uses technology to convert its inputs into output to attain its organisational objectives, structures and strategic planning processes (Glover R.H, 1993). The quality of strategic planning is limited by the quality of Information and Communication Technology (ICT) available to the decision makers and executive information system. The Nigerian banking sector is not an exception. 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 Operation and 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 Kaduna, 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 Kaduna 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. Indeed, the impact of ICT has reshaped the banking industry in terms of providing and delivering effective and efficient services to enhance its operations and general Operation and performance and does not need to be overemphasised. This research work is therefore an attempt to determine the impact of Information and Communication Technology (ICT) on Nigerian Banks’ Operation and performance.

In 1957, Bank of British West Africa changed its name to Bank of West Africa (BWA). After Nigeria’s independence in 1960, the bank began to extend more credit to indigenous Nigerians. At the same time, citizens began to trust British banks since there was an ‘independent’ financial control mechanism and more citizens began to patronize the new Bank of West Africa.

In 1965, Standard Bank acquired Bank of West Africa and changed its acquisition’s name to Standard Bank of West Africa. In 1969, Standard Bank of West Africa incorporated its Nigerian operations under the name Standard Bank of Nigeria. In 1971, Standard Bank of Nigeria listed its shares on the Nigerian Stock Exchange and placed 13% of its share capital with Nigerian investors. After the end of the Nigerian civil war, Nigeria’s military government sought to increase local control of the retail-banking sector. In response, now Standard Chartered Bank reduced its stake in Standard Bank Nigeria to 38%. Once it had lost majority control, Standard Chartered wished to signal that it was no longer responsible for the bank and the bank changed its name to First Bank of Nigeria in 1979. By then, the bank had re-organized and had more Nigerian directors than ever.

In 1982 First Bank opened a branch in London, that in 2002 it converted to a subsidiary, FBN Bank (UK). Its most recent international expansion was the opening in 2004 of a representative office in Johannesburg, South Africa. In 2005 it acquired MBC International Bank Ltd. and FBN (Merchant Bankers) Ltd. Paribas and a group of Nigerian investors had founded MBC in 1982 as a merchant bank; it had become a commercial bank in 2002.

In June 2009, Stephen Olabisi Onasanya was appointed Group Managing Director and Chief Executive Officer, replacing Sanusi Lamido Sanusi, who had been appointed governor of the Central Bank of Nigeria. Onasanya was formerly Executive Director of Banking Operations & Services

1.2 Statement of Problem

Information and Communication Technology has become a potential tool in the hands of banks for sustainable growth it has revolutionized the banking industry and its advent has enormously increased the capabilities of banks as they are now able to offer wider range of services to their customers including internet banking, mobile banking and ATMs and also expand at a great rate. Despite all these innovations in the banking industry, it is highly disheartening to observe that banks are still finding it difficult to meet the expectations of their customers as regards service delivery. It is not uncommon to find long queues in banks, delay in attending to customers, inability to properly sort out transaction and customer’s general loss of trust in banks. Also, banks have found it increasingly difficult to meet up with its overall objectives and responsibilities and First Bank Plc Kaduna is not an exception. These has therefore led to the interest of the researcher to examine the impact of Information and Communication Technology (ICT) on Nigerian Banks’ Operation and performance and also to realise the significant impact ICT has had on their operations so as to guarantee their profitability and growth.

1.3 Objectives of the Study

The broad objective of this study is to identify the impact of Information and Communication Technology on the Operation and performance of Nigerian banks.

The specific objectives of the study are;

To determine if ICT has enhanced the profitability of Nigerian banks.

To know if ICT has grown/ increased the assets base of Nigerian banks.

To determine if ICT has enhanced the liquidity of Nigerian banks.

To determine if ICT has improved the service delivery of Nigerian banks.

To explore the current ICT applications in Nigerian banking industry

1.4 Research Questions

In the light of the preceding objectives, the study seeks to answer the following questions.

Has ICT enhanced the profitability of Nigerian Banks?

Has ICT grown/ increased the assets base of Nigerian banks?

Has ICT enhanced the liquidity of Nigerian banks?

Has ICT improved the services rendered by Nigerian banks?

What effect has the use of ICT-driven technologies have on customers’ patronage

1.5 Research Hypothesis

H1 Information communication technology has a direct impact on operations and Operation and performance of first bank;
H0 Information communication technology has no impact on operations and Operation and performance of first bank;

H1 Information communication technology has revolutionized the operations & business of first bank
H0 Information communication technology has not revolutionized the operations & business of first bank

1.6 Significance of the Study

The significance of this study cannot be underestimated as:

This study will examine the impact of information and communication technology (ict) on the operation of an organization

The findings of this research work will undoubtedly provide the much needed information to government organizations, communications technology sector and academia

1.7 Scope of the Study

This study will examine the impact of information and communication technology (ict) on the operation of an organization. Hence, first bank Kaduna will be use as a case study

1.8 Limitation of the Study

This study was constrained by a number of factors which are as follows:

Just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data

Financial constraint , was faced by the researcher ,in getting relevant materials and in printing and collation of questionnaires

Time factor: time factor pose another constraint since having to shuttle between writing of the research and also engaging in other academic work making it uneasy for the researcher

1.9 Definition of Terms

ICT:

Information Communications Technology