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Topic Description



Multidimensional knowledge acquisition in banking is the portfolio of diversified competencies and skills needed for effective and timely banking services and operations obtainable in international standard best practices in banking. According to Uzor (2010), one of the Central Bank of Nigeria (CBN) guideline policies to commercial banks in Nigeria is adoption of the International Financial Reporting Standard (IFRS) latest December 2010. The CBN is so adjourning Nigeria Commercial Banks to adopt broad knowledge in international accepted best practices in banking. The portfolio of competencies and skills in banking beside time and savings deposit routine services include the knowledge of banking as financial partner in progress with the government towards nation building and development of economic sectors like agricultural sector, industrial sector, education sector infrastructural development, and job creation through loan financing or good–will competitive gesture. Because banks are the medium to effect desirable changes in the real sectors, it is important for the Central Bank of Nigeria to show how its policy changes will stimulate economic growth and development across sectors and industries (Uzor, 2010). The need for changes in the banking sector which is a service industry ought to be driven by discovery of new opportunities in the banking sector that are not warranted by new developments in a number of sectors in the real economy are not going to be much beneficial (Uzor, 2010). Banks are servants to the nation economy (Uzor, 2010).

Keke (2010) quoted Monetary Credit Foreign Trade and Exchange Policy guidelines for fiscal years 2010/2011 say, “The banks should continue to pursue its developmental role vigorously in 2010/2011 fiscal year by supporting specific programs/projects in view of the persistent demand-supply gap in financing the real sectors (example agricultural sector). Improving access to finance by Micro, Small and Medium Enterprises (SMES) is necessary to generate employment and moderate inflation”. Monetary policy circular number 38 2010 edited banks infrastructural finance. Infrastructural development remains grossly inadequate relative to the nation’s requirement due to lack of funds. To improve financing of infrastructure development, the bank shall in 2010/2011 fiscal year in collaboration with stakeholders launch an infrastructural finance policy and development strategy to support the country’s development as well as make Nigeria attractive to the private sector and foreign direct investment. There is gross capacity under-utilization in bank portfolio of services and activities as have been offered by Nigerian banks since 1999-2009 compared with some international giant banks in both developed and developing countries of the world.  Using break-even point analysis or profit and loss analysis (which is an economic analytical technique used to study the relationship between the total costs, total revenues and total profit or loss over the whole range of stipulated output level) to analyze the capacity utilization efficiency of Nigerian banks. Nigerian banking industry is discovered to be operating on financial benefit and not on wealth creation and economy development value based. The strength of Nigerian banking industry has been on short term or immediate financial return of extant services on time, demand and savings deposits. The wealth creation services like sectoral economic projects such as commercial agricultural projects financing, industrial development financing (micro, small, medium and large enterprises); youths development support schemes (like youths financial empowerment and training initiatives, youth facilitation and awareness programme on skills opportunities and acquisition which will add value to human – capital development and societal development) Health developmental projects like provision of clean drinking water such as borehole water projects or schemes which is a goodwill competitive advantage issue. Support scholarship education projects for the indigent or active poor families children and thus reducing their societal insecurity risk of being crime operators like armed robbery, kidnapping, assassination and ritual killing;


The zone for maximum benefits through time, demand and savings deposits occupies the benefits banks derived from fixed deposits, currents and savings account deposits. This zone is within – capacities underutilization of bank facilities, manpower, and materials. This zone is also known as red ocean zone with so much competition, and low competitive values. This is the zone where many banks are scrambling for few society wealthy individuals or corporate bodies to open account mainly fixed deposits in their respective bank. This zone has immediate or short – term benefits.


It is also a zone of very poor leadership and management team with less vision, low creativity, weakness in business adventure, poor innovative mind, lack of multidimensional knowledge portfolio in banking services, operations and activities. The unsaturated blue ocean zone of wealth creation embodies banking services and activities tailored to wealth duplication and high long–run/continuous projects and multiple benefits. Multidimensional knowledge in banking portfolio in this zone include sectoral developmental projects like various commercial agricultural projects, industrial development financing like cottage, micro, small, medium even large scale industries. These projects create employment wealth or money benefit which will also go back to the banks as time/and demand and savings deposits, empowers the idle youths and also reduce the rate of bank armed-rubbery and bankers kidnapping cases.


The social responsibility or goodwill gesture of this zone like provision of clean drinking water, clinics and health facilities, school facilities and education scholarship opportunities for the active poor families in the society will create a friendly environment of operation and service to the banks in Nigeria society. Multidimensional knowledge acquisition in banking embraces the full capacity banking knowledge or portfolio of competencies and skills in banking in the two zones (Zone A and B) in the non-linear breakeven points model in figure 2.1 in chapter two. Giant or big international reputable banks are operating in this full capacity utilization.

Value-Based Management (VBM) Concept, Red and Blue Ocean Management Strategy and Business Intelligence Approach are the management theoretical frameworks or philosophies on which this study anchored.


Value-Based Management Concept: Value-Based Management is the approach that ensures that organizations are run consistently on value (Alabi, 2010). Value-Based Management usually seeks to maximize shareholders’ value always and every time. It consists of three major components: creating value strategy, managing for value (through corporate governance, change management, organizational culture, communication and leadership), measuring value (valuation).


The reason for Value Management is that Value becomes imperative in managing because of its many and wide-ranging effects. Some of these wide-ranging effects of value management are provision of returns or profits, productivity enhancement, growth accelerations, innovativeness, knowledge enlargement or increase and diversification of services, operations, and cooperation portfolio. Management for value requires that values must first be created, before it can be appropriately managed. Value-Based Management shoulders on value-based innovation and leadership style of the operators. Blue Ocean Strategy (BOS) is as stated by Kim and Mauborgne (2005) a management strategy which align business or organization environment to blue nature of an ocean which is a state of many untapped opportunities, unsaturated activities and innovative/creative opportunities.


The Blue Ocean Strategy illustrates the high growth and profits an organization can generate by creating new demands in an uncontested market space or a “Blue Ocean”, than by competing head – to – head with other competitors for known customers in an existing industry “Red Ocean”.


Blue ocean strategy – Kim and Mauborgue (2005) say, “If an organization is already in red ocean, that is a business situation where almost all the competitors share good knowledge of the competitive games, a firm can cross over to the blue ocean where competitive games are unknown and where there is no competitors to be battling with by observing these six paths:

Look across alternate industries, look across strategic groups within the industry, look across chain of buyers, look across complementary products and service offerings, look across functional or emotional appeal to buyers, look across time (Kim and Mauborgne (2005).


According to Goran (2006) Business Intelligence (BI) is an approach to Key Business Factors (KBF) in the banking industry. Goran Radonic stressed that, “banks operate in one of the most dynamic environments: new markets are being opened, new products are being launched, new competitors enter market that were previously reserved only for banks, new regulatory requirements are being imposed, and new customer needs are being identified. Rapid external changes and high pressures affect banking operators with immediate impact on development of banking Information Technology (IT) system. Continues innovation and launch of new products with ever shortened life cycle has led to development of many non or loosely connected applications making banks IT a heterogeneous collection of system and data”. The Banking industry is, and will be more oriented towards the selling of new products that will impact rapid economic development and growth on its business environment than towards traditional services such as holding deposits and offering of high interest loans. That makes a modern bank’s employee more a salesman than a traditional banker. Armed with a timely and accurate information, a modern banker knows all about his or her customer and all the banker’s services that would be appealing to that particular customer, as well as the profitable and risk-acceptable for the bank. Girish (2001) stressed that, “Having a strategy to leverage modern information technology to gain an operation efficiency, enhance customer service, raise productivity and profitability, the banking industry is becoming less focused on its core business of holding deposits and giving loans, and more on managing information.

From the theoretical base points of this study especially with reference to Value-Based Management Concept, Blue Ocean Management Strategy and Business Intelligence Approaches in banking, also synchronizing these theoretical framework with New Model banking of Central Bank of Nigeria, common factor is deductible, that is vision, innovation and creativity is the hallmark of modern banking. This will position banking industry as a strong instrument of economic development and growth of the host country beside its routine services of holding deposits and offering of loans; this is the philosophy of multidimensional knowledge acquisition in banking industry as a competitive advantage. A giant bank is a bank that stands with the full portfolio of competencies and skills in modern banking services, products and operations.

The level of achievement of a man is the level of knowledge he has. Knowledge is the battleground on which the hope of established enterprise must rest. They have potentially very large advantages. A clear advantage is the knowledge that established firms have in the practice of finance. They are fully capable of delivering everything from transactional services to highly complex products. They have large investments in terms of both system and staff who are able to assess risk patterns. This is probably the key necessity for long-term success in financial services (Anthony, 2000). Banks can compete with knowledge and information in a number of areas:

Competing for new customers, extending the relationship with current customers and extending “wallet share”, reducing risk by better understanding behaviour to reject or de –select potential problems, providing more efficient customer services and best advice, to support multiple delivery channels (Anthony, 2000).

Multidimensional Knowledge acquisition as a competitive advantages in Nigeria banking industry will center on knowledge of various competencies, opportunities, services and operations in the portfolio of banking firms which make some world known big banks to be giants in banking industry as stated by Arua (2007), such banks like Standard Bank of South Africa, ABSA, Nedbank, Investec and First Rand of South Africa these Banks control over 87.4% the banking industry total assets as of December 2004 in South Africa; Royal Bank of Canada, Toronto-Domino Bank Group, Scotia Nova Bank, Canadian Imperial Bank of commerce, Bank of Montreal  and the National Bank of Canada control over 90% of the total industry’s assets in Canada. In Switzerland, the United Bank of Switzerland and the Credit Swisse control over 50% of total balance sheet of banks. In Italy we have Intesa BCI, San Paolo IMI, Unicredito, Bank dei Paschi di Sierna and Bank Lombard control over 51% of the industry’s assets by the end of 2000. In United Kingdom we have HSBC, the Royal Bank of Scotland, Barclays Bank, the HBO and Loyds TSB Group dominate the United Kingdoms banking arena. In Dutch, we have ABN Amro, Rabo Bank and ING Bank control 90% of total bank assets.


Competitive Advantage of multidimensional knowledge acquisition in the Nigeria commercial banking industry was conceived by the researcher after having closer look into the services and products of Nigerian banks and having also studied academic works done on Nigerian commercial banks’ activities by previous researchers. The researcher identified poor knowledge of diversified international  accepted best practices banking as a major contributing factor to instability in financial growth, unsatisfactory customers’ services, state of poor capital and assets base, non international  standard performance qualities rating, low funding contribution to  economic sectors and many other pitfalls in Nigeria banks. Acquisition of proper knowledge of these portfolio of competencies in banking services menu will create a competitive advantage or superiority edge for a banking firm in the Nigeria banking industry.

Commercial banks services and operations globally have gone beyond “time, demand and savings deposits” activities to other competencies of bank portfolio which will contribute positively to national economy at the same time create more wealth opportunities for the commercial banks. When the sectoral economy is developed, the profit or wealth proceed of such development will still go back to the commercial banks for saving as excess profit and indirectly returning money and quickening rapid growth in finance and expansion of the operating bank. Knowledge of banking services portfolio affect treasury management. Majority of the Nigerian banks apply poor treasury management technique which lead to illiquidity and assets/ liabilities mismatch.

The portfolio of knowledge in banking services and operations include ethical standard behaviour in banking job. Abuses of public trust by stakeholders of a banking firm will end the individual bank on a short life span. The practice whereby some management staff loan money fraudulently on selfish interest basis as against lending on acceptable banking principles is unacceptable. Some banks in Nigeria are operating at a loss due to non-performing loans. Most times the management of such banks take into account the interest on non-performing loans. The loan officers should have sound knowledge on customers profile and their respective business venture before issuing out loans to avoid issues of bad debts.

The problem of poor fundamental banking knowledge among majority of employees in Nigerian commercial banks is now an issue of concern as many of these banks’ employees have no knowledge of banking from their education degree qualification. The present attitude of Nigerian banks employing graduates of all disciplines including pure sciences, humanity and education based disciplines only to expose them to few weeks/months intensive bank training and only to end up producing novice bankers who cannot deliver appropriate bank services nor add to banking service or product innovation and creativity. Their level of knowledge and contribution to bank services is on the instruction given to them by their immediate supervisors who also have poor diversified knowledge in banking. An employee of no seasoned knowledge, no vision, no creativity and no innovation is equivalent to a robot. Thus the study focus on the topic; competitive advantage of multidimensional knowledge acquisition in Nigerian banking industry.


The thrust of this study is the competitive advantage of Multidimensional knowledge acquisition in the Nigerian banking industry as a yardstick for performance enhancement. To this end, the objectives of the study are:

  1. To ascertain the extent to which the level of improvement in international standard performance rating of Nigerian banks is enhanced by multidimensional acquisition of banking knowledge.
  2. To determine whether acquisition of diversified banking knowledge is compatible with the quality of services Nigerian banks offer to the satisfaction of customers.

iii.      To evaluate the impact of adequate multidimensional knowledge acquisition on financial strength, robustness and competitiveness of a bank.

  1. To determine the rate of Nigerian banks financial contribution to industrial sector growth in Nigeria through diversified knowledge acquisition in banking.
  2. To determine the extent to which financial support of Nigerian banks to commercialization of agricultural sector of Nigeria economy is enhanced by acquisition of multidimensional knowledge in banking.
  3. To determine the degree to which the social infrastructural development services of the Nigerian banking firms can be facilitated by the acquisition of multidimensional banking knowledge.


  1. To what extent does multidimensional acquisition of banking knowledge enhance level of international standard performance rating of Nigerian banks?
  2. Is acquisition of diversified knowledge in banking compatible with the quality of services Nigerian banks offer to satisfaction of customers?

iii.      Has adequate multidimensional banking knowledge acquisition among Nigerian banks any positive impact on financial strength, robustness and competitiveness?

  1. How sufficient is the rate of financial contribution to industrial sector growth in Nigeria through diversified banking knowledge in the Nigerian commercial banks?
  2. To what extent is the level of financial support of Nigerian banks to commercialization of agricultural sector of Nigeria economy enhanced by acquisition multidimensional knowledge in banking?
  3. To what degree will the acquisition of multidimensional banking knowledge facilitate the social infrastructural development services of the Nigerian banking firms?


The hypotheses of the study are as follows:

HO1: Level of improvement in international banking standard performance rating is not greatly enhanced by multidimensional knowledge acquisition among Nigerian banks.