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CHAPTER ONE

INTRODUCTION

1.1    Background of the study

Information technology is a body of tools with the convergence of communication and computer. It is also series of machine, which can execute sequence of instructions. The sequence of instruction is a program made particularly flexible and not rigid and can be change depending on the information being processed (Goldberg, 2009). The new millennium brought with it new possibilities in terms of information access and availability simultaneously, introducing new challenges in protecting sensitive information from some eyes while making it available to others.

Today’s business environment is extremely dynamic and experience rapid changes as a result of technological improvement, increased awareness and demands Banks to serve their customers electronically. Banks have traditionally been in the forefront of harnessing technology to improve their products and services. 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 of Electronic Banking System in Nigeria today. (Stevens 2002). Assert that they have over the time, been using electronic and telecommunication networks for delivering a wide range of value added products and services, managers in Banking industry in Nigeria cannot ignore Information Systems because they play a critical impact in current Banking system, they point out that the entire cash flow of most fortune Banks are 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 Banking. The advancement in Technology has played an important role in improving service delivery standards in the Banking industry. In its simplest form, Automated Teller Machines (ATMs) and deposit machines now allow consumers carry out banking transactions beyond banking hours. With online banking, individuals can check their account balances and make payments without having to go to the bank hall. This is gradually creating a cashless society where consumers no longer have to pay for all their purchases with hard cash. For example: bank customers can pay for airline tickets and subscribe to initial public offerings by transferring the money directly from their accounts, or pay for various gods and services by electronic transfers of credit to the sellers account.

As most people now own mobile phones, banks have also introduced mobile banking to cater for customers who are always on the move. Mobile banking allows individuals to check their account balances and make fund transfers using their mobile phones. This was popularized by First Atlantic Bank (now First Inland Bank) through its “Flash me cash” product Customers can also recharge their mobile phones via SMS. E-Banking has made banking transactions easier around the World and it is fast gaining acceptance in Nigeria. The delivery channels today in Nigeria electronic Banking are quite numerous has it is mentioned here Automatic Teller Machine (ATM), Point of Sales (POS), Telephone Banking, Smart Cards, Internet Banking etc Personal computers in the Banking industry was first introduced into Nigeria by Society Generale Bank as the popular PC easy access to the internet and World Wide Web (www) and internet is increasingly used by Bank’s as a channel of delivering the products and services to the numerous customers. Virtually almost all Banks in Nigeria have a web presence; this form of Banking is referred to as Internet Banking which is generally part of Electronic Banking. The delivery of products by banks on public domain is an indication of advertisement which is known has E-Commerce.
Electronic commerce on the other hand is a general term for any type of business or commercial transaction it involves the transfer of information across the internet. E-Commerce involves individuals and business organization exchanging business information and instructions over electronic media using computers, telephones and other communication equipments. This covers a range of different types of business from consumers to retails products. However, Electronic banking as it is; is a product of E-Commerce in the field of banking and financial services. It’s offers different online services like balance enquiry, request for cheque books, recording stop payment instructions, balance transfer instructions, account opening and other form of traditional banking services. The Internet allows businesses to use information more effectively, by allowing customers, suppliers, employees, and partners to get access to the business information they need, when they need it. These services all translate to reduced cost: there are less overhead, greater economies of scale, and increased efficiency.
The internet is revolutionizing sales techniques and perceptions of leading brands, and the internet is intensifying competition in all its forms. Banking are continuing to use the internet to add value for their customers; but in order for this to work effectively - maximizing opportunities, reducing risks and overcoming problems – an E-Banking strategy is required as an impact. The growth of the Web and Internet as new channels, the growth in their use by customers, the growth in their use by customers, and the floor of companies entering the market, presents a series of key challenges to companies. It is easy and cheap to put up a website. But to create an environment delivering effective service on the Web to a significant proportion of your customer base requires an E-Banking strategy. Electronic Banking offers different online services like balance enquiry, request for cheque books, recording stop payment instructions, balance transfer instructions, account opening and other form of transitional Banking services. The impact of information Technology on service delivery in banks  cannot be overemphasis. Hence the need to investigate it impact on service delivery in UBA Kakuri branch in Kaduna.
1.2    Statement of Problem
In Nigeria, customers of banks today are no longer about safety of their funds and increase returns on their investments only. Customers demand efficient, fast and convenient services. Customers want a Bank that will offer them services that will meet their particular needs (personalized Banking) and support their Business goals for instance; businessmen want to travel without carryout cash for security reasons. They want to be able to check their balance online, find out if a cheque is cleared, transfer funds among accounts and even want to download transaction records into their own computer at work or home. Customers want a preferential treatment and full attention by their choice Bank.
All these are only achievable through the use of ICT: In line with rendering qualities and acceptable services that most Banks in Nigeria are gearing toward and investing large sum of money in information and communication Technology, expectedly such Banks services have been improved. United Bank for Africa (UBA), Zenith Bank, GT Bank (to mention few) are in the forefront in the use of IT in rendering services to their Customers (The Guardian Newspaper April 18, 2008p 21). Hence, some of the typical issues posing serious challenges on service delivery in bank are advance information technology. Banks and the entire financial sector in Nigeria have been most radically affected by these developments. This is so because information technology has become a critical business resource and its absence could result in poor decision and ultimately business failure. As such many banks and financial institutions have failed in the past due to their inability to utilize information technology in marketing their financial services as well as their operations. Today’s business environment is very dynamic and undergoes rapid changes due to technological innovation, increased awareness and increased demands from customers.
The banking industry of the twentieth century operates in a complex and competitive environment characterized by these changing conditions and highly volatile economic climate, and information and communication technology ICT) is at the centre of this global change curve (Agboola,2006). Hence the banks that will survive and complete effectively in today’s business environment must necessarily integrate ICT into its operational processes. Given this scenario, this thesis attempts a synthesis of empirical facts on the extent to which information and communication technology has informed innovations in the operational modalities and service delivery modes of banks in Nigeria and the impact of this on bank performance. It is against this background that the subject matter is seen as a problem worthy of investigation.
1.3    Objective of the study
The central objective of the study is to examine the impact of information and communication technology on customer’s service delivery. The specific objectives are:
1.           Investigate how Information and communication Technology enhances customer’s satisfaction in United Bank of Africa.
2.           Examine the benefits a customer derives from using ICT tool  in United Bank for Africa.
3.           Identify the challenges militating against ICT operation in United Bank for Africa.
1.4       Research Questions
In the study the research question below is proffered with answers;
1.      How does ICT enhance customer’s satisfaction in United Bank of Africa?
2.      What benefits do customers derive from using ICT tools in United Bank of Africa?
3.      What are the challenges militating against ICT operation in United Bank for Africa?  
1.5    Statement of Hypothesis
The stated hypotheses tested in this study;
Ho:   Information and communication Technology does not enhance bank service delivery.
HA:   Information and communication technology enhances bank customer satisfaction.
1.5    Significance of the Study
The study would enable the banks executives and indeed the policy makers of the banks and financial institutions to be aware of electronic banking as a product of electronic commerce with a view to making strategic decisions. The research is equally significant because it would provide answers to factors militating against the implementation of electronic banking in Unity Bank Plc; prove the success and growth associated with implementation of electronic banking highlight the areas of banking operations that can be enhanced via electronic banking and also be an invaluable tool for Students, Academician, institutions, Corporate managers and individuals that want to know more about electronic banking trends especially in Nigeria.
1.6    Scope of the study
In pursuance of the objective of the study; attention shall be focus on information technology in banks. In order to conduct an empirical investigation into the impact o information and communication on bank customer service delivery in united bank for Africa and will also examine the nature of ICT operation in united bank for Africa from 2007 to 2009.
1.7    Definition of terms
ATM: Automated Teller Machine: According to Peter and Sylvia (2008), an ATM combines a computer terminal, Recordkeeping system, and cash vault in one unit, permitting customers to enter a financial firm’s bookkeeping system with either a plastic card containing a Personal Identification Number (PIN) or by punching a special code number into a computer terminal linked to the financial firm’s computerized records 24 hours a day. Once access is gained into the system, cash withdrawals may be made up to pre-specified limits and balance inquiries, and bill paying may take place. Mishkin (1998) states that the wonders of modern computer technology have also enabled banks to lower the cost of bank transactions by having the customer interact with an electronic banking facility rather than with a human being. One important form of electronic banking facility is the automated teller machine (ATM), which has the advantage that it does not have to be paid over time. Furthermore, because of its low costs, ATMs can be put at locations other than a bank or its branches, further increasing customer convenience.
The low cost of ATMs has meant that they have sprung up everywhere. Although ATM was introduced in the Nigerian banking industry in early 2000, most banks embraced its use after the 2005 banks’ consolidation. Today, there is hardly any bank without the ATMs. The banks have also deployed the ATMs to other locations such as supermarkets, tertiary institutions, hospitals, hotels and so on. There is no doubt that the introduction of ATMs by banks is to reduce operation costs and to ensure that the customers are better served. But the ATM is not without challenges because there are always people out there who would want to reap where they did not sow .The infrastructures that support the machine are susceptible to abuse, misuse and failure in many ways, resulting in financial loss as a result of fraud, unauthorized use of customers personal identification number and loss of customers confidence. ATM fraud has taken an alarming proportion and most customers are now afraid to use their ATM cards. There is no doubt that there must be collusion between some bank staff and fraudsters for such frauds to succeed. This is one of the reasons customers are fret about the security of on-line transactions. While on the other hand, some customers have not helped matters because of their carelessness or fraudulent nature.
ATM Card: debit card use by banks customers in making transactions via ATM. The card is a complex circuit that process micro processors with a single chip that contains the complete arithmetic and logic unit of computers , it provide access to customers to perform balance inquiry, mini statement and cash withdrawal as well as transfers through the use of Automated teller machine. This debit card can also be used for internet online and post transactions.
Chip Card: this is a card containing one or more computer chips or integrated circuit for identification, data storage or special purpose processing used to validate personal identification numbers authorize purchase, verify account balances and store personal records.
Electronic Data Interchange (EDI): The transfer of information between organizations in machines readable form. Electronic monetary value is measured in currency units stored in electronic form on electronic device in the consumer’s possession. This electronic value can be purchase and held on the device until reduced through purchase or transfer.
Mobile Banking: this is a product that enables the bank to offer customers to access services anywhere. Customers can make their transactions anywhere such as account balance inquiry, transactions inquiry. Bill payment/electronic fund transfer. Transfer between accounts etc.
Payment System: A financial system that establishes that means for transferring money between suppliers and of fund, usually by exchanging debits or Credits between financial institutions.
Point Of Sale (POS) Machine: A Point-of-Sale machine is the payment device that allows credit/debit cardholders make payments at sales/purchase outlets. It allowed customers to perform the following services Retail Payments, Cashless Payments, Cash Back Balance Inquiry, Airtime Vending, Loyalty Redemption, Printing mini statement etc.
Smart Card: A Card with a computer chip embedded, on which financial health, educational, and security information can be stored and processed.
Transaction Alert: Our customers carry out debit/credit transactions on their accounts and the need to keep track of these transactions prompted the creation of the alert system by the Bank to notify customers of those transactions. The alert system also serves as notification system to reach out to customers when necessary information need to be communicated.
Western Union Money Transfer (WUMT): Western union Money transfer is a product that allowed people with relatives in Diaspora who may be remitting money home for family up-keep, Project financing, School fees etc. Nigerian Communities known for having their siblings gainfully employed in other parts of the world are idle markets.

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