APPLICATION OF COMPUTER TECHNOLOGY IN
COMMERCIAL BANKS IN NIGERIA
CHAPTER ONE
1.0 BACKGROUND OF THE STUDY
Commercial banking in Nigeria dated
back to 1892, when what emerged as the bank of British West
Africa (now bank of Nigeria) was established. This was
followed in 1917 by the Barclays bank now Union Bank of Nigeria.
The Nigeria banking scene was
monopolized by these two banks until 1933 when the national bank of Nigeria ltd
was established. The first successful indigenous commercials bank in the
country was established, (though in October 1992, the national deposit
insurance corporation NDIC) advised the financial firm. The bank was indebted
to the NDIC for about N1bn and has a negative asset valued at N1.8bn meaning
the liabilities of the bank was more than its assets. Prompted by the success
of the NBN Ltd after it was established. Several Nigerians made attempts to set
up commercial banking institutions between 1933 and 1951. But many failed due
to mismanagement and under capitalization. This was hardly surprising since
there were no regulation of any kind to end operations of the bank besides
there was not central bank to supervise and assist in establishing the banking
system. The banking ordinance of 1952 was the first attempt to provide a
regulatory framework for the development of a sound banking industry in Nigeria.
Commercial banks activities in the period (1959-1966) is the fact that the
central bank of Nigeria (CBN) was established at the beginning of the period
(1958)
Central
bank of Nigeria
main functions are:
i.
To
issue tender currency in the country
ii.
To
maintain external international value of the naira
iii. To promote monetary stability and
some financial structure
Central bank of Nigeria is also
charged with the responsibility for developing the money and capital market in Nigeria. The CBN
also acts as banker and financial adviser to the federal government of Nigeria
as well as banker to other banks in the country so, one can say that the establishment
of the CBN led to a continuous strengthening of banking in Nigeria and also
within a relatively short period (1959-1966)
today, there are more than 50 commercial banks in Nigeria with balances
all over the county.
Generally, commercial banks have a great
role to play and have a major impact on the economic social and political
spheres of any national, carrying out its dual debts transactions.
The role of information technology in
commercial banks can not be over emphasized. Banking basically involves
thousands of transactions that are made daily and records may be needed for references,
his as well as cross checking and records of accounts one a transaction is made
it must be recorded in a stated form such transaction includes settlement of
cheque , the provision of regular debits
and credit exchange transactions one case see that most of the banks transaction
are computerized and processing of data and computer makes it possible for
these functions to be performed accurately and fast a s computers are machines
that by their design are able to accept s tore, process and retrieve
information the main advantage of computer in performing these functions is its
speed, accuracy and large storage capacity.
Communication is very important in
banks, as the banks have to deal with their correspondents in other financial
centre, because banks can not operate in isolation. It has to keep regular
contact with its other associates and correspondents in Nigeria. All banks
receive directives regarding their operation from the central bank
communication (information) technology available includes telex, Facsimile
(Fax) electronic mail station, satellites modems etc
1.2 STATEMENT
OF PROBLEM
Computers are increasingly becoming indispensable
nowadays many tasks of home and offices that were operating manually are being
automated at a very fast pace world-wide thus, it is becoming apparent that in
whatever discipline of study or nature of employment computer is now an important tool for efficiency improvement and
precision of job or task execution but inspite of this very few researches have
so far been conducted into areas of applications
of computer and information technology in our commercial bank.
The project intends to investigate all
possible application of computer and information technology in the commercial
banking industry in nigeria. The stud intends to address the following issues:
1.
How
reliable is the use of information technology in commercial banks?
2.
How
effective and efficient has the use of information technology improve the exact
job or task execution?
3.
What
steps should be used in order to minimize paper and storage capacities of
computers?
4.
The
use of information technology is it so accurate and fast in operations?
1.3
SIGNIFICANCE OF THE STUDY
The increasing importance, which is
attached to computer and information technology in this contemporary world of
business accounts for the necessity of this study the evolution on of computers
and its increasing effects on the way we do things nowadays is important to
discuss.
i.
This
is for readers and businessmen to have insight into how far and how well
humanity has gone in applying technology to our day to day living.
ii.
It
is also to advice the bank and other industries on how the nature of their
operation would look like when computerized and to get a space for other banks
on the importance of computers in their operations in today banking.
iii.
The
study will also be valuable to both individuals for a sustainable growth and
development in business and the business at large.
1.4 OBJECTIVES
OF THE STUDY
The aim of this study is to appraise the
utilization of computer capability in the banking industry, through the
following specific objectives.
a)
To
obtain information on computer development and its trend in the banking
industry
b)
To
examine whether there is adequate utilization or not of compute in the banks
c)
To
advance policy implications and recommendations that could enhance the
prospects of this computer usage in the banking
industry
d)
To
obtain in formation on computer development ad its trend in the banking
industry.
1.5 HYPOTHESIS
The purpose of this research is to test the
hypothesis that:
Ho: The application of computer technology
to commercial banks is not an important tool for efficiency improvement and
precision of job.
H1: The application of computer technology
to commercial banks is an important tool for efficiency improvement and
precision of job.
1.6 SCOPE
OF THE STUDY
The scope of this work is limited to
computer usage in commercial banks. Since
their emergence in Nigeria
the study will be based on union bank, and it will also study the storage of information
system to be able to know information is been used step by step in a commercial
banks. The scope of this study will embrace all information technology used
in commercial banks.
1.7 LIMITATIONS
OF THE STUDY
It is important for the researcher to
state things that have put constraints in their efforts during research to
obtain materials needed for the profit.
i.
The
researcher has to take into consideration the limited time given within the
which to present the complete work.
ii.
Due
to inadequate finance, it will be difficult for researcher to personally visit
all branches of union bank.
iii.
Sourcing
of information from bank staff might not be so easy.
iv.
Inadequate
honouring of appointment by some of the people chosen for interview i.e. some
of those selected for interview do not keep to time of appointment with them.
1.8 DEFINITION
OF TERMS
Computer
– A computer is a machine
that follows instruction to process data, solve a specific problem or
accomplish a particular task.
Programme: The instruction that control a
computer when it performs a task is referred to as a programme data the term data is a symbolic
representation of facts about people, objects and places etc which are raw or undesired in their present form and need
to be transformed into a refined or desired form.
Banking: the business of taking deposits and
making loans.
Record: A set of related items or fields
performing to a particular items, unity or entity procedure: A written
description of a system flow chart:
A system analysis techniques providing a graphic presentation of procedures.