ABSTRACT
This study evaluated
the contribution of information, communication and technology (ICT) on banking
performance. My main objective of the study is to ascertain whether the
adoption of ICT in Zenith Bank has led to increase in the profitability of the
Bank and to determine whether the adoption of ICT in Zenith Bank has led to
improved customer services. I adopted Expo-factor Research design. Data was
generated from responses from various respondents which were distributed among
respondents. It tried to determine whether the adoption of ICT in Zenith Banks
had led to improved customers services. In pursuance of this, the chi-square
mode was used. The method of data collection includes the primary and secondary
data.My findings is that the adoption of ICT in Zenith Bank operations is
positive and significant and that ICT application has positively and
significantly improved the profits of Zenith Bank Plc. The Recommendations is
that as the customer of organizational being, managers must ensure that they
identify the need of customer and develop appropriate product/services to meet
such needs. This is so because this study has shown that there is a strong
relationship between the level of ICT and customer satisfaction. That is, if perceived
quality of ICT is high and efficient in delivering high quality service,
customers are bound to be satisfied, have a positive word-of-mouth about the
organization, make more referrals, which may culminate to more profit for the
bank and Evidently, ICT is at the core of customer satisfaction in the
industry. That is to say, Bank customers are satisfied only when the services
offered are effective and high through ICT deployment and utilization. The
implication is that various banks transactions are conducted faster and more
conveniently, customers services are upgraded, are made available worldwide.
CHAPTER
ONE
INTRODUCTION
1.1 Background to the Study
Information has
always played a prominent role in human activities. The robust development in
science and technology has immeasurably increased the role of information in
every facet of human endeavor. The rapid expansion of a mass of diversified
information has given birth to the term “information explosion” and a rise to
the scientific approach in information management and in the interpretation of
the concept of information.
The concept has been
broadened to include information exchanges not only among men but also among
machines as well as the exchange of signals in the animal and plant worlds. The
pace of change brought by new technologies has had significant effect on the
way people live, work, and play globally.
Today’s business
environment is very dynamic and experiences rapid changes as a result of
creativity, innovation, technological changes, increased awareness and demands
from customers. Business organizations, 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 with
Information and Communication Technology (ICT) at the centre of this global
change curve.
According to Harold
and Jeff (2005), financial service providers must modify their traditional
operating practice to remain viable in the 21st century and the
decades beyond. Thus, ICT has emerged as a catalyst in the various industries
of the world to aid the process and procedure required to ensure the
realization of various organizational goals.
Indeed, the explosive
growth in Information and Communication Technology (ICT) have narrowed digital
divide and turned business sphere to electronic world (e-World). Specifically,
technological innovations have led credence to global transformation of
operational dimension of traditional banks over a decade ago. Internet
technology has brought about a paradigm shift in banking operations to the
extent that banks embrace internet technology to enhance effective and
extensive delivery of wide range of value added products and services.
Consequently, Nigerian banks, especially the commercial banks, recognized
electronic banking to be the most effective means of distinguishing themselves
from other competitors by investing in sophisticated technology (Auta, 2010).
In the last few
years, Nigerian banks have been witnessing tremendous success in the delivery
of a wide range of value added products and services through e-banking and
there have been evidences of increasingly acceptance of ICT applicationby banks
in Nigeria (Ayo, 2010).
Globally, several
studies exist on the application of ICT in banking and its impact bank
performance. However, some of these studies provided mixed evidences.
1.2 Statement of the
Problem
Information and Communication
Technology (ICT) has become a very important aspect of today’s Banking and
financial services delivery in Nigeria in particular and the world at large.
The competitive nature of banking business has necessitated the emphasis now
placed on ICT. In the developed societies, ICT is generally believed to have
dramatic influence and is seen as continually determining the competitive
nature of virtually all business. In
Nigeria, the application of ICT to banking operations has become a subject of
concern to all banks operating in the country and indeed, a prerequisite for global
competitiveness.
As a basic
prerequisite in the development of banking business, customer satisfaction
holds the potential for increasing an organization’s customer base, increase in
the use of more volatile customer mix and increase in firm’s reputation. The
consolidation exercise in Nigerian banking sector has left customers with a
wide range of choice for products and services.
Study by Keremati
(2007) has shown significant and positive correlation between ICT and customer
satisfaction and profitability. Although, the Nigerian banking industry is
relatively slow in the adoption and utilization of ICT.
In view of this, this
study seeks among other things to access the contribution of ICT on banking
sector performance in Nigeria using Zenith Bank as case study.
1.3 Objectives of the
Study
The broad objective
of the study is to access the contribution of ICT banking sector performance in
Nigeria. Other specific objectives
include:
(a)
To access the extent Zenith Bank has adopted ICT in their operations
(b)
To determine whether the adoption of ICT in Zenith Bank has led to improved customer services
c)
To ascertain whether the adoption of ICT in Zenith Bank has led to
increase in the profitability of the
Bank
1.4 Research Questions
The following
research questions have been designed to elicit the desired response to achieve
the objectives of the study:
(a)
To what extent has Zenith Bank adopted ICT in her operations?
(b)
Has the adoption of ICT in Zenith Bank led to improved customer
services?
(c)
How has the adoption of ICT in Zenith Bank led to improved
profitability for the Bank?
1.5 Research
Hypotheses
The following
hypotheses were formulated and tested by the study:
Ho1: Adoption of ICT in Zenith Bank operations is
not positive and significant
Hi: Adoption of ICT in Zenith Bank operations is
positive and significant
Ho2: ICT adoption has not positively and
significantly improved customer service in
Zenith Bank Plc
Hi: ICT application has positively and significantly
improved customer services in Zenith Bank
Ho3: ICT
application has not positively and significantly improved theprofits of Zenith
Bank Plc
Hi:ICT application has positively and significantly
improved profitability in Zenith Bank
1.6 Significance
of the Study
The study will be of immense benefit to several
groups of people both in the Nigerian banking
sector and the academics.
a)
Bank
Management: First, the study will be of relevance to board
members, bank management and staff in the banking sector in Nigeria espacially, for Zenith Bank. The aim of every bank is to
achieve maximum level of returns on investment at the lowest possible cost and to secure a larger market share. The adoption
of ICT is vital to the attainment of such goal.
b) Bank Customers and other stakeholders:
customers, shareholders, employees and other stakeholders in the banking sector
will benefit from the result of the study, in the sense that if the banks
deploy ICT in their operations, it will impact positively on the quality of
services rendered by the banks and the rate of returns on investment.
c) Industry Watchers and Analyst: Furthermore,
the outcome of this research is also expected
to be of significance to industry watchers and analyst. This group of people will
utilize the platform of this study in their analysis on ICT use in the Nigerian banking sector. Similarly, the general
public, through the findings of this research, will be better informed onICT
use in the Nigerian banking sector.
1.6 Scope of the Study
The research focused
on the contributions of ICT on banking sector performance in Nigeria. The researcher made use of Zenith Bank as one
of the foremost new generation banks in Nigeria. The Bank has branches in Enugu metropolis
with a large customer base. The work
focused on the staff and selected customers of the bank in Enugu
metropolis.
1.7 Limitation of the
Study
The researcher
encountered some problems in the course of carrying out the research work. The first of these problems is lack of
funds. This constraint limited the scope
of the work. Time too was a constraint as the researcher was combining the
research with academic work both of which required a great of deal of time.
1.8 Profile of Zenith
Bank Plc
Zenith Bank Plc as
one of the foremost new generation’s Banks in Nigeria has operated for over two
decade. In other words, the Bank has
grown older and with maturity comes wisdom from which the Bank makes decisions
now largely influenced by customers’ best interest. Zenith Bank is reputed for its turnaround
time in service delivery which the Bank pursues with great passion, energy and
enthusiasm. Zenith Bank has a pool of
professionals that are constantly encouraged to display their creativity, which
would translate into greater wealth creation for customers.
As Nigeria improves
its Information Technology (IT) infrastructure (telecom modernization) and
celebrates GSM roll-out, Zenith Bank leading edge in IT makes the Bank one of
the few that are well positioned to join the international Bank community in
the next generation of E-Banking services.
This is further enhanced by the bank’s sophisticated credit risk
modeling and operational risk management system that seek to create a blend
that not only grows customers’ business but strengthens it. The Bank’s credit management system stresses
rational procedures and transparency.
Zenith Bank is one Bank that sees technology as an enabler and as a
generator of new opportunities while at the same time mindful of the disruptive
power of digital revolution by its forward thinking and bench-marking of trends
in technology with practical delivery on a highly automated platform that makes
the bank unique.
In essence, Zenith
Bank’s strength lies on its professional and highly dedicated workforce, its
cutting IT infrastructure and quality of its management team. The bank’s leadership assets are manifested
in the ability of its managers to combine strands of knowledge to create fast
action value for the customers. The
bank’s leadership combines vision with precision; using creativity, skills and
ideas to expand their business reach into the lives of the customers by helping
them fulfill their needs with speed and dedication.
The bank’s weakness
lies in the external environment which is marked by unstable macro-economic environments, dearth of
skilled manpower; uncertainty in political circles and insecurity of lives and
properties. Threats to the bank comes
from stifling competition from first generation and other emerging banks; the
global financial crisis, the capital market crash which saw banks including
Zenith lose some substantial sums in margin facilities and recently, the crisis
in the Nigerian banking system which is assuming alarming and contagion effect
even for healthy banks like Zenith.
However,
Zenith Bank is leveraging on opportunities offered by expanded CBN corridor,
the proposed deregulation of the downstream sector of the oil & gas which
will see Zenith playing significant roles in downstream facilities and other
consortia arrangements. ================================================================
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