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The financial services sector is becoming more technology-driven. Even in other sectors of the economy, technology is impacting on the way things must be done.

Before the advent of electronic age, banks used to be defined by their physical presence (Accad, 2001). Now, Information technology, particularly the internet has redefined the business of banking all over the world and with particular reference to Nigeria. Information technologies (IT) have also become the digital nervous system of banking operation. This is because the business of banking is no longer perceived as merely the generation of deposit liabilities and the creation of liquid assets, but rather the generations, storage, manipulation communication and application of financial information (Woherem, 2000). It is perceived as an instrument for engendering competitive advantage in enterprises as it promotes greater efficiency and effectiveness in financial transactions. This is the reason why Holloway (1995) assorts that, an increasingly important component of banks’ technological focus is the personal computer. From risk management to commercial and consumer lending and from employment training to product development and delivery, personal computer are being used as a tool to re-engineer the bank. In many instances Local Area Networks (LANs) and Wide Area Networks (WANs) are facilitating the process, enabling the bank employees to access and use information in a more timely and efficient fashion. The First Direct Bank in the U.K. provides comprehensive banking services to about 900.000 customers with just staff strength of less than two dozen. This feat is achieved through the use of IT.

It shows that banks today can operate in a more effective and efficient manner, with a lean number of staff, through the aid of technology.

According to frenzied (1996:104) IT is now used to automate most of the processes in the banking industry of the more developed parts of the world; to drive delivery processes; and to encapsulate many banking products. Technology in baking has proven to be one of the major success stories of this century, as technologies such as Automated Teller machine (ATM), LANs and WANs, Credit cards, Electronic point of sale systems, smart cards, Debit card, charge cards, Electronic Document interchange (EDI) systems, Image systems, Integrated Banking system (IBS), and client information filing (CIF)systems are now being routinely used by many banks to ensure a more efficient and effective operation and delivery of their products and service to customers. From all Indications, the applications of IT in all banking operations will intensify and spread in this 21st century.

Globally, the financial services sector has been quick to embrace the information technology particularly internet an alternative delivery channel. In developed parts of the world, retail and corporate customers can review and transact on their accounts, get information about shares and execute trades, receive and pay bills, buy various forms of insurance and obtain credit cards, mortgages and other loan facilities, all through the internet.

Information technology has already become the nervous system of banks the world over. In this study, the researcher will concentrate on information technology in contemporary banking with particular emphasis on Nigeria banking sector. Nigeria banks will become uncompetitive if they do not have the means to deliver their banking services online and in real-time across all their branches within the country and abroad, if they do not have the backbone telecommunications infrastructure in the form of broadband local and wide area networks, if they were not able to communicate and trade globally with the rest of the world through cyberspace, and if they do not invest comprehensively in IT and training of their IT personnel. According to Woherem (1997:88), Nigeria banks since the 1980s have generally performed very well in their investment profile and use of IT systems compared to the rest of the industrial sector of the country. However a lot still needs to be done in the sector to catch be relevant in the globalized banking playing field of the 21st century.


The advent of information technology in the operations of the commercial banks in Nigeria among other sectors has brought about several noticeable developments;most bank branches at present are equipped with main core banking applications supported by a central computer system. Island-wide ATM networks are also linked to branches and run on separate software applications. Banks are also equipped with ‘intranets’ providing much functionality along with e-mail facilities to branches. Internet banking, SMS banking and phone banking are also being provided as value added services. Credit card usage is also popular among customers. Branches are initiating the issue of credit cards and debit cards (ATM cards). Also it is the branch that attracts customers for Internet banking access. They are also using word processing software, spreadsheet applications and Internet for day to day operations in addition to the use of core banking applications. This however brings about its attendant problems; banks are spending huge sums of monies in acquiring ICT competence as well as investing huge amounts in foreign currency for hardware, software and soft skills. Also they invest money to train bank staff and maintain and retain the group of knowledge workers, the question now is do the banks gain the expected return on expenditure? Have they achieved the maximum value for the money spent? Do they have a specific plan to collect the return? Also, does the bank prepare its entire staff to accept ICT challenges and innovations ahead? These and other issues have make banking business in Nigeria more difficult resulting in most bank not being able to meet with their financial obligation to their customers.


1.3       Objectives of the Study.

Thus the researcher is faced with accomplishing the following tasks:

  1. To determine the impact of technological advancement on bank performance.
  2. To identify the role of ICT in improving banks customer service delivery as well as customer satisfaction.
  • To identify the role of ICT on bank competitiveness in Nigeria.


1.4       Research question.

To properly evaluate the objectives of this study, it becomes pertinent to ask some relevant research questions as follows:

  1. To what extent does technological advancement impact on bank performance?
  2. How has ICT improved banks customer service delivery as well as customer satisfaction?
  • How has ICT enhanced bank competitiveness in Nigeria?


1.5       Research Hypothesis.

Ho1.     Technological advancement does not significantly and positively impact on bank performance.

Ho2.     ICT have not significantly and positively improved banks customer service delivery as well as customer satisfaction.

Ho3.     ICT have not significantly and positively enhanced bank competitiveness in Nigeria.



The research work covers the role information technology plays on the banking operations of commercial banks in Nigeria. Specifically, the information in this research work is limited to happenings in the First Bank of Nigeria. Emphasis is laid on activities in the First Bank of Nigeria Regional Office Okpara Avenue Enugu, Agbani Road branch and New Heaven branch, both at Enugu. The period of the study focused on 2002-2011.



In our days and age, we have seen that the organizations that excel most are the ones that is able to transform accurate information, whether it is from customers or from knowledge of their product into forms that benefit their customers. The speed at which organization process information and effectively deliver the output of them processing to their customers, will determine their market share. Thus this study will help banks realize that the one way they can provide quality service and capture high percentage of technology.

To the customers (users of banking services), this study will help them start looking it the level of services and professionalism of the banks before depositing their funds. Proximity of the bank will no longer be the issue; safety and level of the service, with regard to quality, speed and efficiency will become their major imperative. Moreover, the study will equally help individuals/corporate bodies be very much acquainted with services/transactions that are obtainable in technologically driven banks, entering into explanations that may seem trite and unnecessary to those familiar with particular fields. Hence, there is need for creation of frequently used symbols sub-unit.


There have been many papers in the past on IT in Nigerian banking industry, but they were based mainly on guess estimates, resulting in subjecting conclusion. There has been little attempt to base the statements of IT performance in the industry on objective data derived from an empirical study through rigorous analysis of data. This poses a great constraint.

Moreover, it was not easy carrying out a survey on some selected banks and companies and getting down financial experts to express their expert opinion on limiting factor as the writer has to meet up with other academic demands.