Impact of Information Technology on the Nigerian Banking Sector

Firstly I would like to thank the Almighty Allah for giving me life, without which I would not exist. My regards go to my project supervisor Dr. Mohd Liman for his corrections and constructive criticism on the best way to handle the project. My regards go to my wife, Hajiya Rukayya Aliyu Umar B/Kudu for her role throughout this work. My hand of facilitation should also be extended to all my lecturers in the Department of Business Administration. I also wish to express my gratitude and appreciation to all the staff of Zenith Bank Nig. Plc for their co-operation during work.

My acknowledgment would be incomplete without mentioning my father’s/family role and guidance throughout my academic pursuit, Alh. Hassan Mohd Whom care and humility keep me going all along. ABSTRACT it is obvious that the advent of information technology offers banking firms a new frontier of opportunity and challenges, despite this possibilities, there are various psychological and behavioral issues such as trust, the security of internet transactions, reluctance to change and preference for a human interface which appear to impede the growth of internet banking.

Academic anxiety?
Get original paper in 3 hours and nail the task
Get your paper price

124 experts online

Consequently, the action taking by the Nigerian banking sector inappropriately utilizing (IT) determines the success of the banks. Thus the study accesses the impact of (IT) in Zenith Bank Nig. Plc Murtala Muhammad way Kano Branch from the use of a self-administered questionnaire, the result of the study shows that the impact of information technology in the bank is the huge cost-saving and the enhanced speed in carrying out the financial activities of the bank. It is found that the branch has not been very effective and efficient in delivering services to the customers.

The study, therefore, recommends among others the provision of compulsory training to all the staff in the bank to improve service delivery to the customers. ABSTRACT The researcher’s work centers on the impact of (IT) on Nig. Banking Sector (A case study of zenith bank Nig. Plc) which also takes cognizance of the statement of the general problem, the significance of the study. The researcher also acknowledges the opinions of various authors on the chosen topic with names and year clearly stated. Questionnaire & personal interviews were used in collecting the detailed information required for this research work.

Responses from various respondents were tabulated and analyzed with the aid of a simple percentage ratio for easy assessment by the researcher. Recommendations were made in line with the findings.

Chapter One Introduction

Background of the Study

Information Technology is increasingly becoming the most profound determinant of changes across work in the 21st century. This phenomenon can be understood fro the wholesale deployment of the convergence of the high-speed computers, communication apparatus, information, and data bank as well as skilled manpower, which brought about dramatic changes in all facts of life. The emergence of multi-link computer networks and the falling cost of computer and computing power have completely turnaround the way we live, work, and even the way we think.

It is now common to transfer voice data, images, and video clips across continents in a matter of seconds. The overwhelming impact of this technological explosion is also being felt in the banking industry. Implementation of information technology has completely revolutionized the banking industry, the system is fast changing from paper-based branch banks to digitalized banking service, in fact, it has already altered the internal accounting and management system of banks and its fundamentally changing the delivery system need to facilitate intersection with customers.

The deployment, according to Ghaziri (1998) has seen banks all over the world struggling to keep pace with technological solution to meet the challenges of a rapidly changing world, in this context banks with the ability to invest and integrate information technology will become dominant and command competitive edge in the global market. Like other industries in contemporary society, operators of banking are convenient that investing in the bank is critical and the future of all facets of banking depends on the impact of information technology in banking is hinged on strategic planning aimed at conciliating long-term marketing plans and position. This impact is often viewed in three dimensions. It affects the employees, customers, and bank concerned. For the banks, development in information technology allows for more efficiency and effectiveness in the delivery of banking products and services. It has therefore created new bases for competition. The information technology revolutionary in banking permits rapid access to information that is critical to business decisions, prompt delivery, and urgency of judgment required in the competitive global market.

Thus the ability to act quickly and effectively will distinguish the successful banks of the future from ones destined to fall back Harari (2000). There cannot be a more appropriate time for banks in Nigeria to ensure the sweeping information technology revolution than now. The awesome possibilities in the self- inquiring facility, remote banking, telebanking, and electronic payment system among others are high ingredients of development in the financial sector which invariably pose a positive impact for the entire economy.

Amidst all these, one cannot contemplate technology apathy in modern banking, first as it is difficult to ignore the low side of the technology revolution in the banking industry with particular reference to Zenith Bank Nigeria Plc. This studies the high and the low sides of the impact of IT banking on the development of the economy.

Statement of the Problem

The role of information technology as a factor of immense possibilities in today’s world is crucial for the survival of the modern business. It is hard, an industry that has failed to respond to the dynamic of the information technology revolution. Since the realization of the potentials of information technology as the determinant of success in the new and even the next phase of banking. It has become a matter of policy for management and stockholders to adopt the IT option in business. This explains why banks are falling over themselves in pursuing technology-based solutions to the business . Certain for banking such as, customers, services branch control, payment clearing system, international cash transfer, etc and now being integrated into the business plan in the banking system.

A midst the underlying guest for representation in new world information order, it has become part of strategic thinking for banks to win the loyalty and commitment for customers to the culture of information technology by letting them into the numerous possibility that is promised. This study is concerned about the functioning of banking vis-a-vis its utilization of information on banking technology in business formulation and operations. The following questions are, therefore, raised with a view to answering them in the course of the study. i. To what extent has the application of IT ensures the survival of the bank in Nigeria? i. How does information Technology contribute to the growth of the bank? iii. To what extent does IT contribute to the attainment of the profitability goals of the bank’s iv. Have the IT use by the bank contribute to increasing market shares?

Objectives of the Study

Generally, this study is set to examine the impact of Information Technology on the Nigerian Banking Sector with particular reference to Zenith Bank Plc, specifically, the study tries to achieve the following objectives. i. To find the extent to which the application of It ensures the survival of bank ii.

To determine if information Technology applied by banks contribute to the growth of this bank. iii. To examine whether information Technology contribute an increase in their market share. iv. To check if the information Technology application by the bank contributes to the attainment of profitability and goals of the bank?

Significance of the Study

The significance of this study on the importance of maintaining a virile information technology base in the banking sector other than the ease with which it permits generation, storage, processing, and retrieval of data, computer technology has boosted confidence in the operation of the bank sector.

Application of Information Technology (IT) has increased the capacity of the bank to beat certain constraints in the implementation of rather difficult tasks in business operations, this has further raised the level of productivity evident in quality service delivery thereby lading to higher profit margin and increasing confidence among investors and stakeholder. For the researcher, the journey of the study would lead to invaluable acquisition to knowledge from the exposure of the operation of Zenith Bank Nigeria Plc and indeed the banking industry in the information technology (IT) based society.

To the body of research in banking and Business administration, findings of the study will no doubt be an addition to the volume of literature, currently in existence. The study is also significant to large society for its commitment to unveiling the impact of information technology in banking.

Research Methodology

This chapter, as the name implies involves the population sample sampling techniques, sample size, method of data collection, method of data analysis as well as the method of data presentation.

The Population of the Study

The aim of the research is to cover the impact of information technology in the Nigeria banking sector.

Taking Zenith bank Plc as the case study The population of the study, therefore, comprised of the staff as well as customers of Zenith Bank Nigeria Plc, Kano (Murtala Mohammed way Branch).

Sampling Techniques

In the course of this study, the systematic random sampling in which every element of the population are engaged in similar activities as such has equal to being selected to respond to the questions administrated.

Method of Data Collection

Primary and Secondary sources of data have been employed in the process of conducting the research.

The primary method of data collection is the first and new information which is specifically collected through the administration of a questionnaire to the respondent which forms the basis of our data analysis and presentation. on the other hand, are data that have been collected by person or group outside the organization under study. These are data that have been pre-collected and re-recorded other than for the purpose of this research. These include textbooks, government publications, newspapers internet, which were employed from part of the literature review of this study.

Method of Data Analysis

The researcher uses a tabular form for presentation and simple percentage to analyze the data collected, and draw inferences from them.

Method of Data Presentation

In view of this study, data were presented in tabular form. This according to the researcher’s opinion is adequate for the intended purpose.

Chapter Two Introduction

As a catalyst in the process of economic growth and development, the Nigerian banking sector, had undergone some remarkable change in recent times, specifically, the information technology has brought about a dramatic change in the system.

The entire work done by heterogeneous writers, which are related to project work are revisited, to allow for increased understanding and logical conclusion. In view of this, a fact on issues related to the definition of information technology, exploitation of information technology electronic office among others would be touched.

The Concept of Information Technology

Although various authors defined information technology in different forms, it would appear that various definitions are in consensus. Each definition represents the different views on the individual author depending on his approach to the subject.

According to Learner and Trole (2010), information Technology concerns application and system for business that covers the entire business enterprises, its more than a spreadsheet and word processor program that used within a given organization. Leonard (2003:5), defines Information Technology as the technology which supports the activities involving the creation of electronic data processing together with their related method, management, and application. He said further that information technology entails the following. i. What type of network to be used in an organization? ii.

What operating system(s) an organization should be using? iii. Comparing database of customers, financial data business model, etc. iv. What type of information needed in the computer system and how such information is shared with the company v. The inter-connectivity of various field offices to ensure efficient exchange of information. vi. The use of computers to improve customer service spread up in company business and become efficient.

Information Technology Network

According to Georgia (1980), there are four (5) concepts that are applicable to information technology (IT) as follows: i.

Information technology (IT) is only the development of updating data processing devices both hardware and software. ii. Information technology is a device to assist management and specialist in undertaking their work, which is not of a routine nature. This will include electronically stored vocabularies with spelling connection facilities and the linkage of an individual work station that allows interaction and discussion. iii. Information technology process-related directly to cost-saving by the substitution of manual tasks with mechanized versions. iv.

Information technology includes the idea of artificial intelligence and involves the use of a Decision Support System (DSS) to assist decision logic. However, with the success of Automated Teller Machine (ATM) Bank had the incentive of developing new products and new delivery channels. Such as home banking via phone and personal computer. ATM Network allowed the bank to reach new customers outside the market, served by their branches, and created opportunities for greater price competition. With the help of Information Technology, what the bank delivered, and how they deliver it have changed dramatically.

DataBase and Its Application Ion Bussiness

Dandago (2001), see a database as a very important tool for modern managers. They assist in all levels in the selection, analysis, and incorporation of facts and figures required for decision making in connection with the whole range of organization activities. Databases can be defined and use as demand. The term file is used more often. However, a database means a computer program and a set of Integrated files, which constitute the corporation database. The database works best with information that is structured ins in some ways.

Their strength lies in their ability to perform rapid searches. To sort data to different sequences and to select records that meet a given set of criteria.

The Usage of DataBase in Bussiness

Typically, in a commercial organization, there are various aspects of information and their uses. Dandago (2001), listed the use of the database in business as follows:- i. The Sales/marketing department would need the information about stock representatives would need to know the detail of a given product (revision, model) and its availability which means interrogating stock level, production schedule, and so on. i. The finance Department which would incorporate the wage section needs to collect information from all other departments to be able to carry out its function. iii. The production management department would need to know the machine capacities’ availabilities of raw materials and sales. iv. The Personnel Department would need to hold particular of all employees, and their record of services including facts about staff in the sales /Production department.

Function of Database

The basic function of the database system can be categorized into two (2) main functions as follows:


The purpose of this category of the database is to cope with the requirement of data handling for activities such s payroll, selling, and production, all oriented to batch processing (ie computerized system in which the computer does several jobs and after the other without instruction between the jobs). These kinds of databases are designed to deal with large inputs of numerical data and result in many printouts.

This approach requires a specially trained staff who can ensure the correct method of data entry and who carry out extra programming if necessary.


This data is intended simply to provide information demand and to satisfy the need of many different classes of users. The objective is that an organization database should not simply reproduce schedules and historical information, but should be able to contribute effectively to management activities including planning

The Need for Database in Organization

Need for Database in an organization is very imperative in this era of computers. The database has been generally accepted in an organization because is used to examine the efficiencies arising from a non- database approach consisting of impediment programs. Master and other files for stocks, sales acquisition, and production, etc they are:

  • Duplications of inputs and efforts e. g sales cause a change in stock production level as well as affecting the purchasing requirement for raw materials
  • Data items are often duplicate. These apply in many cases to complete records in files.
  • Interrelationship of all activities and occurrences may not be fully appreciated by individual managers involved in making decisions in respect of their own units.

Electronic Banking

Richard (2001), describes electronic banking as a process by which a customer may perform banking transactions electronically. The following terms all refer to one form or another of electronic banking. Personal computer (PC) banking internet banking, virtual banking, online banking, home banking, remote electronic banking, and phone banking.

PC Banking, Internet banking, or online banking are the most frequently used designations, it should be noted, however that the terms used to describe the various types of electronic taking are often used interchangeably. In line with this, electronic banking enables the bank to provide the corporate or high-value customers with a graphic user interface (GUI) software on a PC to require about the financial transaction and account cash transfers, checkbook issues, and acquiring on rates without visiting the bank.

The technology used to promote this service is called electronic data Interchangeable (EDI). It is used to transmit business transactions in a computer-readable form between organizations and individuals in a standard form. In retail banking, the emphasis is on automation Teller Machine (ATM) Electronic Transfer Point of sales (ETPOS): The batch method, telephone banking smart card and online/offline, real-time/up and other electronic-based banking individual identification number (PIN) to treat their business which the bank relies upon.

The customers have an obligation to safeguard the card, the number, and the password to maintain confidentiality. The payment system on the cash paper electronic method of each country differs. However, the core payment system on cash paper electronic method of each country differ. However, the core payment transaction types are:

  • Cash
  • Deposit of Cash from an account
  • Credit transfer from one account to another (Cheque Direct Debit card).
  • Credit transfer from one account to another (GRO)

P. C Banking

According to Hussan (2006), PC banking is a form of online banking that enables customers to execute bank transactions from a PC via a modem. In most PC banking ventures, the bank offers the customers a proprietary to perform financial transaction from his or her home computer. The customer then deals with the bank with his or her modern, downloads data, and runs the programs that are resident on the customer’s computer. Currently, many banks offer PC Banking Systems that allows customers to obtain account balances and credit card statement, pay bills, and transfer funds between accounts.

Internal Banking

Trent (2000) defines internal banking sometimes called “Online Banking” which is an outgrown of PC Banking. Internet banking uses the internet as the delivery channel by which to conduct banking activities. For example, transferring funds, paying bills, viewing, checking and savings, account balance, paying mortgages, and purchasing financial instruments and certificates of deposits. In internet, banking customer accesses his or her account from a browser software that runs internet banking programs residents on the bank’s world-wide-web server, not on the user PC.

Data Presentation and Analysis

The data presentation and analysis were base on the homographic ethics of the respondent ie years of service, position/department respondents.


The research work assesses the impact of information technology on the Nigerian Banking Sector, Zenith Bank Plc, Murtala Mohd way Kano, it gives the general background of the study, limitations of the study, both primary and secondary data were used as a research methodology.

Related literature of the study was reviewed, conclusions and recommendations were provided at the end of the research work. The following are the major findings obtained from the data analyzed.

  • The application of information technology ensures the survival of the banks, by reducing the cost of services, increasing the level of productivity evident in quality service delivery by leading to a higher profit margin.
  • Information Technology contributes to the growth of the banks by improving their services and expanding their operational base.
  • Information technology increases the market share by reducing the number of constraints in the implementation of a different task in business operation and increase confidence among the investors and stakeholders.
  • The ability of information technology to provide huge cost-saving, convenience, ability to access remote and far areas of the world for new business, and enhanced speed in carrying out financial activities, increase the profitability and goals of the bank.
  • Information Technology has brought greater efficiency in the utilization of productive information through improved competition and innovation


The following conclusion is drawn from the findings of the study.

  • The cost of acquisition, maintenance, establishing a network and the tariffs charged are so high that even if computers, are available it is the only privilege few who can have access to the service.
  • The quality of training is also a serious constraint to the effective use of Information Technology in the bank.
  • The absence of a clearly defined legal framework for information technology, leaving banks with inadequate legal cover to provide the services.
  • Unavailability of informational infrastructure remain the main setback to the development of information technology e. g telephone line failures and electronic blackout are frequently experienced.


Based on the problem identified and the conclusion drawn the following recommendation are made.

  • The bank should provide compulsory computer literacy training for their staffs to improve the efficiency of the system.
  • The bank should incorporate into legislation to protect customers’ privacy of accounts due to the proliferation of data.
  • The bank should collaborate with the modern scientist to find out a way completely obliterating the menace of computer virus syndrome, if (IT) is to continue to be reliable to the customers.
  • The government should provide infrastructural facilities to enable the bank to make efficient and effective use of information technology.


  1. Demography of Respondents:
  • a. Male
  • b. Female
  1. Years of Service
  • a. 1 – 5 years
  • b. 6 – 10 years
  • c. 11 – 15 years
  • d. 16 – above years
  1. Position/Dept
  • a. Senior Staff
  • b. Junior Staff
  • c. Laborers
  1. Qualification of the respondents
  • a. MSC/MBA/M. ED
  • b. BSC. /HND
  • c. OND/NCE
  • d. GCE/SSCE
  1. Do Information Technology ensures the survival of the Bank?
  • a. Yes
  • b. No
  1. Does the application of information Technology contribute to the attainment of profitability and goal of the bank?
  • a. Yes
  • b. No
  1.  Does the system contribute to an increase in the market share?
  • a. Very High
  • b. High
  • c. Low
  • d. Very Low


  1. The status of information communication and technology in financial institution in Nigeria. Owojori, Anthony A.University of Ado-Ekiti, Nig. 25 August 2009.
  2. Central Bank of Nig (2000), Banking Supervision Annual, Central Bank of Nigeria, P. 36.
  3. Oyesanya Y(2004), Nigerian Internet 419 on the loose, the Nigerian Village Square, March 28 (www. Nigeriavillagesquare. com)
  4. Information technology the story? the journal of economic perspectives, Vol. 14, No. 4, pp. 3 – 22
  5. Ugwu L. O. Oyebisi T. O. , Ilori M. O and Adagunodo E. R (2000) Organisational impact of (IT) on Banking and insurance sector in Nigerian TECHNOVATION VOL. 20, No. 12.

This essay was written by a fellow student. You may use it as a guide or sample for writing your own paper, but remember to cite it correctly. Don’t submit it as your own as it will be considered plagiarism.

Need a custom essay sample written specially to meet your requirements?

Choose skilled expert on your subject and get original paper with free plagiarism report

Order custom paper Without paying upfront

Impact of Information Technology on the Nigerian Banking Sector. (2018, Jun 27). Retrieved from