Elizabeth
CHAPTER ONE
INTRODUCTION
1.1 Background to 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 organisations, 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) contend that managers cannot ignore information
Systems because they play a critical role in contemporary organisation. 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 prerequisite
for local and global competitiveness. ICT directly affects how managers decide,
how they plan and what products and services are offered in the banking
industry. It has continued to change the Way bank 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) contend that financial service providers should modify their
traditional operating practices to remain viable in the 1990s and the decades
that follow. They claim that the most significant shortcoming in the banking
industry today is a wide spread failure on the part of senior management in
bank to grasp the importance of technology and incorporate it into their
strategic plans accordingly. Woherem (2000) claimed that only bank that
overhaul the whole of their payment and delivery systems and apply ICT to their
operations are likely to survive and prosper in the new millennium. He advices
bank to re-examine their service and delivery systems in order 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.
Through
Information and Communication Technology (ICT) services available to Jaiz Bank
plc in Kaduna State, it can now give its customers a unified access to manage
their personal financial information. The adoption of Information and
Communication Technology (ICT) by this bank has increased its operational efficiencies,
reduced cost through high utilization rates in the ICT environment to ensure
compliance with changing time and to gain competitive advantage (Haggani, 2003).
Methods of handling financial services has to change from old manual
transactions and data processing to a faster, more impactive and highly
efficient electronic data processing and Electronic Fund Transfer (EFT) i.e.
deposits, withdrawals, bills-pay-in, purchases of draft, value for cheques,
third party transactions, fund transfer and inquiries are all done
electronically within seconds. The adoption of Information and Communication
Technology (ICT) has also helped Jaiz Bank in Kaduna State to keep the pace
with the changing customers’ needs and market dynamics and create a competitive
differentiation in products and services (Haggani, 2003).The complex nature of
the banking system, its products and services have made it necessary for bank
to embrace this change as quick as possible since this medium of banking has
proven to be very efficient in most countries of the world( for example America)and
Nigeria is no exception. Indeed, the impact of ICT has reshaped the banking
industry in terms of providing and delivering impactive and efficient services
to enhance its operations and general performance and does not need to be
overemphasized. This research work is therefore an attempt to determine the
impact of Information and Communication Technology (ICT) on Nigerian Bank
performance.
1.2 Statement of the Problem
This
study evaluates the response of Nigerian bank to this new trend of ICTs and
examines the financial performance of Jaiz bank in their operations and the
resultant impacts. Information and Communication Technology has become a
potential tool in the hands of bank for sustainable growth it has
revolutionized the banking industry and its advent has enormously increased the
capabilities of bank as they are now able to offer wider range of services to
their customers including internet banking, mobile banking and ATMs and also
expand at a great rate. Despite all these innovations in the banking industry,
it is highly disheartening to observe that bank are still finding it difficult to
meet the expectations of their customers. It is not uncommon to find long queues
in bank, delay in attending to customers. It is not common to find long queues
in banks, deley in attending to customers, inability to properly sort out
Transaction and customer’s general loss of trust in bank. Also, banks have
found it increasingly difficult to meet up with its overall objectives and
responsibilities and Jaiz Bank in Kaduna State is not an exception. These has
therefore led to the interest of the researcher to examine the impact of
Information and Communication Technology (ICT) on Nigerian Bank’ performance
and also to realize the significant impact ICT has had on their operations so as
to guarantee their profitability and growth.
1.3 Objectives of the Study
The prime objective of the study is to make an assessment of
the impact of ICT on financial performance a study of Jaiz Bank plc Kaduna
Metropolis. From this main objective, the following specific objectives have
been developed:
1)
To
assess the impact of ICT investments on profit before tax of Jaiz bank in
Kaduna Metropolis.
2)
To
assess the impact of ICT Investments on deposits and efficiency of Jaiz Bank in
Kaduna Metropolis.
3)
To
assess the relationship between ICT investment and Returns on capital employed
among Jaiz Bank in Kaduna Metropolis.
4)
To
assess the relationship between ICT investment and Returns on assets among Jaiz
bank in Kaduna Metropolis.
1.4 Research
Questions
To
provide answers to the research objectives, the researchers outline the
following questions:
1)
What
impact does ICT investments have on profit before tax of Jaiz bank in Kaduna
metropolis?
2)
What
impact does ICT investments have on deposits and efficiency of Jaiz bank in Kaduna
Metropolis?
3)
What
is the relationship between ICT investments and Returns on capital employed
among Jaiz bank in Kaduna Metropolis?
4)
What
is the relationship between ICT investments and Returns on assets among Jaiz
bank in Kaduna Metropolis?
1.4 Significance of the Study
This project will bring a new dimension to the existing pool
of knowledge and literature on the debate of the relationship between ICT and
financial performance among Jaiz bank in Kaduna Metropolis. Various researchers
in many areas of the globe have study on this area, as such many materials
exist. However, here in Nigeria, research in the area of ICT and financial
performance of Jaiz bank has not been indulged much.
This research will also help
financial institutions in Nigeria especially Jaiz bank in Kaduna metropolis to
know if the expenditures they have been incurring on ICT has any bearing on
their profit before tax and returns on assets or not, and whether there is the
need for them to continue to invest substantial amounts of money into this
area.
This research will also enable Jaiz bank in Kaduna
metropolis to know whether to continue to increase investment in ICT or not as
it seeks to find out if there is any relationship between ICT and the financial
performance of Jaiz bank in terms of the impact it will have on their return on
capital employed, deposits and efficiency of cost management.
1.5 Scope
of the Study
The population to be used for this study consisted of all Jaiz
bank in Kaduna metropolis. For the purpose of achieving the research
objectives; attention has been focused on all Jaiz bank. However, due to time
factor and resources constraints, this study will focus on only 20 selected
banks.
1.6 Limitations
of the Study
According to best and Khan (1989) limitations
are those conditions beyond the control of the researcher that will place
restrictions on the conclusions of the study and their application to other
situations. This study is, therefore, constraint by the wide area the study is
supposed to have captured, shorter period for the completion of the study,
inadequate funds for this study and bureaucratic rules in the study settings.
The study as a matter of fact should have captured all Jaiz bank
in Nigeria if not Africa. This is, however, impractically impossible due to
many factors such as a huge research team and so on.
The researcher per the rule of the university is supposed to
complete this study within one semester. This is a rule ought to be complied
with strongly. This condition was beyond the control of the researcher as he
was expected to present the report of this study within a relative shorter
period.
One major limitation of this study
was the lack of fund. The researcher as an individual student had to manage his
meager income in undertaking this study. It is a known fact that there is lack
of financial support for research in Africa of which Nigeria is of no
exception. With the necessary research sponsorship the study could have
captured a wide spectrum rather than the one selected bank. This may affect the
findings of this particular study especially in making general conclusions and
comparing this study to similar ones with the requisite financial support.
1.7 Research
Methodology
The population of the study is all
the Jaiz bank operating in Nigeria. Due to time and resources constraints, this
research will focus on only the selected Jaiz bank above. This study will use
mainly secondary data. Data has been obtained mainly from the annual reports of selected Jaiz bank. The data will cover the period
from 2015 to 2018. The study used descriptive as well as inferential statistics
in analysing the data. Analysis was carried out by making use of Statistical
Package for social scientists (SPSS). The Pearson correlation coefficient
together with regression analysis was employed to test the relationship between
the variables.
1.8 Organisation
of the Study
The study was divided into five chapters. Chapter One was
concerned with the background to the study, statement of the problem, research
question, objectives of the study, significance of the study, the organisation
of the study, scope, limitation of the study and lastly how the whole study is
organised. Chapter Two dealt with the literature review. The chapter examined
the views of other theorists and authors about the issues under discussion as
well as review of previous studies on electronic banking and customer service
delivery. Chapter Three outlined the research methods the researcher employed
in carrying out the study. The chapter also dealt with the study area, sample
size and the sample selection as well as methods of data collection, management
among others. Chapter Four presented the analysis and presentation of data in
this study. Chapter Five being the final chapter of this study presented the
summary, conclusion and the necessary recommendations of the study.
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