ASSESSMENT OF THE IMPACT OF ICT ON EMPLOYEES IN THE NIGERIAN BANKING SECTOR A STUDY OF FIRST BANK OF NIGERIA PLC ENUGU METROPOLIS

ABSTRACT

This research study assesses the impact of ICT on employee in the banking sector with specific reference to First-Bank of Nigeria Plc Enugu metropolis. The researcher tries to ascertain if information, communication and technology (ICT) affects employee job performance, and to formulate recommendations regarding ICT adoption. In  order to  achieve the above  objective, the following research questions were asked: Does ICT have any impact on employee job performance in the banking industry?   Has the adoption of ICT enhanced banks productivity? What is the degree of ICT adoption by Nigerian bank? Four hypotheses were advanced; (i) The adoption of ICT have no impact on employee’s job performance in the Nigerian banking sector, (ii) The adoption of ICT have no impact on bank’s operation (iii) there is a low degree of ICT adoption by the Nigerian banks, and finally the adoption of ICT has not enhanced productivity in Nigerian banks. The study uses survey research method. The case study bank was selected using simple random sampling technique together with the staff of First Bank of Nigeria plc. The findings of this study are that the adoption of ICT has impact on employees in the Nigerian banking sector and the bank’s operation, that there is a high degree of ICT adoption by Nigerian banks and, that the adoption of  ICT has enhanced banks productivity  in  Nigeria.  These  findings  made  the  researcher  to accept her four (4) alternative hypotheses and reject the null hypotheses because in both cases the calculated values of chi- square are greater than the tabulated values.

CHAPTER ONE INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Today’s business environment is very dynamic and undergoes rapid changes as a result of technological innovation, increased awareness and demands from customers. Business organization, especially the banking industry of the 21st  century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and communication technology (ICT) is at the centre of this global change curve. Laudon and Laudon 1991:80) contend that managers cannot ignore information systems because they play a critical role in contemporary organization. They point out that the entire cash flow of most fortune 500 companies is linked to information system.

The application of information and communication technology concepts, techniques policies and implementation strategies to banking services has become a subject of fundamental importance

and concerns to all banks and indeed a pre-requisite for local and global competitiveness, ICT directly affects how mangers decide, how they plan and what products and services are offered in the banking industry. It has continued to change the way banks and their  corporate  relationships  are  organized  worldwide  and  the variety of innovative devices available to enhance the speed and quality of service delivery.

Harold and Jeff (1995:73) contend that financial services providers should modify their traditional operating practices to remain viable in the 1990s and the decades that follow. They claim that the most significant short-comings in the banking industry today is a widespread failure on the part of senior management in banks to grasp the importance of technology and incorporate it into their strategic plans accordingly,. Woherem (2000:52) claimed that only banks that overhaul the whole of their payment and delivery systems and apply ICT to their operations are likely to survive and prospect in the new millennium. He advices banks to re-examine their service and delivery systems in other to properly position them within  the  framework  of   the   Dictates  of   the  dynamism  of

information and communication technology. The banking industry in Nigeria has witnessed tremendous changes linked with the developments in ICT over the years. The quest for survival, global relevance, maintenance of existing market share and sustainable development has made exploitation of the many advantages of ICT through the use of automated devices imperative in the industry. This study eradicates the response of Nigerian banks to this new trend and examines the extent to which they have adopted innovative technologies in their operations and the resultant effects.

1.2  STATEMENT OF THE PROBLEM

Nigeria  is  faced  with  enormous  problems  of  information access. These problems especially that of low telephone penetration and uneven access, appear to be insurmountable. The penetration rate in Nigeria in the twentieth century was less than one line per

1000-population.   In   spite   of   efforts   made   by   successive governments in  Nigeria to improve on the penetration rate, the country had continued to nose dive as a result of fresh challenges

in terms of building information and communication technology (ICT) related management and communication infrastructure. This has resulted in almost negative benefit, both to the economy and the society as a whole.

It is quite evident that Nigeria at present lacks innovation capacities and capabilities in information technology (IT) management and hardware maintenance. This notwithstanding, the country has been and will continue to import and use a wide range of durable consumer electronics, computers and telecommunication equipments. It must therefore begin to accumulate the capabilities to repair and maintain these vantages. Indeed, if Africa is not to be left behind in global trade and development, it must be able to master certain basic capabilities in ICT. In addition, the rate of technical obsolescence is likely to be much faster with ICT, compared with the natural technologies (such as steel, textiles and petrochemicals). The technological followers in Africa may therefore face   the   difficulty   of   sourcing   for   parts,   components   and peripherals, unless they begin to accumulate the capacity for component manufacturers.

Available technology is largely obsolete- electromechanical switching system. Presently, some countries are engaged in massive modernization efforts: Nigeria for instance, has at present, about

500,000 lines with about 160,000 lines just added through the on- going   digitalization   programme.   Technology   absorption   and masterly takes more than importation of technology, learning which demands explicit investment is a pre-requisite for building the technical and managerial capabilities. Given the foregoing, the diffusion of ICT will have widespread; albeit differentiated impact on all countries, industries and factors policy must therefore begin to look at variables such as;

–  Change in the structure of industry and services

–  Employment structure, training and manpower

–  Industrial organization and management

–   Telecommunication infrastructure and  revolution of  service delivery of existing infrastructure, especially power systems;

–   How  the  accelerating  growths  on  trade  and  long  range competitiveness and maturation of African industry.

–  Information technology supply.

These are some of the key issues, which form the focus of this study. This study also examines the impact of ICT in the light of these variables starting with the Banking industry. While the importances of other sectors are generally accepted, the Banking Industry sector has not always received as much attention. There are several reasons why a systematic study of ICT impact on the banking industry is  important. First,  because of  the  routinized character of producer of services such as the Banking and finance and others like Accounting, they are also readily programmed and therefore impacted by ICT (especially computerization). Secondly, services such as banking services have undergone tremendous technological transformation in the use of management based and information intensive technologies.

In other service sectors such as aviation industry, computerized reservation system  (CRS) has led to the  handling higher volumes of cargo, greater complexity large volumes of traffic and subsequent higher productivity, computerized signaling system in rail transport has increased safety and raised traffic volume.

There is  very little  in  terms  of  a  systematic study on the impact of ICT adoption on these factors in Nigeria. Hence the decision to examine how ICT has been adopted and diffused in the Nigeria banking industry. Issues of significant importance in ICT, especially in the area of computerization, include:

–   How services organizations like banks and management have been altered by the emergence of ICT.

–   How much of ICT is being employed in the banking services outputs, to make significant impact,

–   The  strategies  adopted  by  Nigerian  banks  to  acquire  ICT- based technologies.

–   The role and attitude of the Nigerian state in encouraging easy acquisition of ICT technologies by operating banks in the economy.

1.3  OBJECTIVES OF THE STUDY

The general objective of the study is to examine the effect and impact of the new ICT on employees in the banking industry, the study emphasis will be on computers, other information and communication technologies and selected peripherals.

The specific objectives not necessarily in order of priority are;

a) To review the literature on the emerging ICT at the global and regional levels and to highlight their implication for Africa in general and especially, Nigeria.

b) To assess the  nature of  technologies driving ICT,  required technological capabilities and capabilities available to operate, maintain and adopt systems.

c) To assess the status of ICT and the necessary technological.

d) To assess the status of ICT and the necessary technological infrastructure in Nigeria.

e) To generate systematic data on the effect and impact of ICT on employees in the Nigerian banking factor.

f)  To make recommendation based on the findings of this study as to how to enhance the impact of ICT on employee in the Nigerian banking sector.

1.4  RESEARCH QUESTIONS

To help guide us in this investment, the following research questions have been formulated by the researcher:

a) How has the adoption of ICT impacted on employees in the

Nigeria banking factors?

b) What    nature    of    technologies    driving    ICT,    required technological capabilities and capabilities available to operate, maintain and adopts systems?

c) What are the status of ICT and the necessary technological infrastructure in Nigeria?

d) How has the ICT adoption, impacted on banks operations?

e) What  is  the  nature and  the  extent of  adoption  of  ICT  by

Nigerian banks?

f)  What is the degree of utilization of the identified ICT devices in banking operations?

1.5  HYPOTHESES

The following hypotheses form the basis for carrying out this study:

Ho:  The adoptions of ICT have no impact on employees in the

Nigerian banking sector.

Hi:   The  adoptions  of  ICT  have  impact  on  employees  in  the

Nigerian banking sector.

Ho:  The adoptions of ICT have no impact on banks operation

Hi:   The adoptions of ICT have impact on banks operation

Ho:  There is a low degree of adoption of ICT by Nigerian banks.

Hi:   There  is  a  high  degree  of  adoption  of  ICT  by  Nigerian banks.

1.6  SIGNIFICANCE OF THE STUDY

This study is a thorough research into the effects of information, communication and technology (ICT) on the employees in the Nigeria baking sector with a specific reference to First Bank plc, Enugu State. The study helps to determine the measures adopted by Nigerian banks at mitigating the factors affecting Banks adoption of ICT, and its effect on the bank employees.

As such, the completion of this dissertation will provide understanding of the concepts presented so far to generate data and information that every bank in Nigeria could use in order to come up with strategies, plans and designs that will strategically position them in mitigating some of the problems affecting their low

ICT  adoption.  By  fulfilling  the  aims  that  were  stated  in  the objectives section, this study will be helpful for other researchers who  may  be  focusing  on  understanding the  concept  of  ICT  or information, communication and technology. The notable significance of this study is the possibility that other researchers may be able to use the findings in this study for future studies that will create a huge impact in society. This study’s findings can be used for other findings that might prove to be helpful in introducing changes to ICT adoption by Nigeria banks and other sectors in Nigeria.

This study is also important in the sense that it is aimed at sensitizing policy makers and planners, banking industry and the case study to have a comprehensive view of the various factors inhibiting the fast adoption of ICT in the Nigerian banking sector and in other sectors.

Through this investigation, the First Bank plc of Nigeria and other banks in Nigeria coupled with other sectors of the economy, will understand their respective shortcomings and would subsequently adopt  the  right  measures  at  enhancing  the  swift

adoption of ICT in Nigerian banks and in other sectors of Nigerian economy and this proving measures at mitigating problems to be envisaged in future.

1.7  SCOPE OF THE STUDY

This work covers the effect of ICT on employees in the Nigerian Banking industry with a specific reference to First Bank of Nigeria, plc. Enugu State, it x-rays the issues involved in information communication and technology (ICT) in Banking operations in solutions. The work lays emphasis on the following areas:

a) Information,  Communication  and  Technology  (ICT)  in  the

Banking Sector.

b) Responses of Nigerian Banks for Information Communication and Technology.

c) The extent of banks adoption of innovative technologies in their operations.

d) Degree of utilization of the identified technologies.

e) Impact of the adoption of (ICT) on Banks operations.

f)  Expectations    and    success    of    information    technology implementation in the Banking Sector.

g) The problems and challenges of ICT in the Nigerian banking industry.

1.8  LIMITATIONS OF THE STUDY

During this research work a lot of constraints and limitations were encountered, some of these constraints were usual constraints encountered during the course of  such academic exercise while some were unusual and boring.

Collections of primary data for this study were major constraints, as the researcher has to be on the field personally in all the data collection processes. All the first bank branches have to be visited to enable a comprehensive investigation to be made. Financial  constraints  also  posed  a  major  problem/  limitations

during the investigation, the researcher would have wanted to carry on the same type of investigation in a similar bank within the banking   industry   but   for   financial   constraints.   Sometimes secondary data collected were not reliable, hence they were rejected. A lot of time was spent on the selection and examination of secondary data for the study.

Limited  use  of  varied  analytical techniques due  to  size  of sample and shortness of period of investigation. Delays in filling and returning questionnaires by respondents. Lack of significant research and literature. Lack of first hand knowledge.

1.9  DEFINITION OF TERMS

Communication: The activity of process of expressing ideas and feelings or of giving people information.

Information: Facts or details about something

Technology: This is the systematic knowledge and action usually of industrial process but applicable to any recurrent activity.

Information Technology (IT): This is the automation of processes, controls, and information production using computers, telecommunications, software and ancillary equipment such as automated teller machine and debt cards.

Bankers Automated Clearing Services: This involves the use of magnetic Ink. Character Reader (MICR) for cheque processing. It is capable of encoding, rending and sorting cheques.

Automated Payment Systems: Devices used here include automatic teller machine (ATM), plastic cards and electronic funds transfer.

Automated Delivery channels: These include interactive television and the internet.

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