1.1 Introduction
A banking system refers to the network of institutions that provide financial services such as accepting deposits, giving loans, and managing money for individuals and organizations (Mishkin & Eakins, 2018). in the modern context, a computerized banking system is defined as an automated solution that utilizes computer software and hardware to carry out core banking functions efficiently, securely, and in real time (Laudon & Laudon, 2020).
Similarly, according to Ajayi & Ojo (2006), a computerized banking system is an automated system that integrates various banking activities such as account management, deposits, withdrawals, funds transfer, and loan processing through the use of computer technologies (Ajayi & Ojo, 2006). The implementation of such systems allows banks to meet increasing customer expectations, and remain competitive in a dynamic financial environment.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitation of the study and Definition of technical terms.
1.2 Background of Study
The evolution of banking from manual ledger systems to computerized systems has significantly improved the accuracy, speed, and reliability of financial transactions. The banking sector is a critical component of any economy. Over the past few decades, the increasing need for faster and more secure banking operations has led to the adoption of information and communication technologies (ICT) in banking. The manual methods of managing customer accounts and processing transactions are no longer viable due to the large volume of data and the demand for instant financial services.
According to Laudon & Laudon (2020), the banking industry has undergone significant transformation due to the rapid advancement in information and communication technology. Traditionally, banking operations were handled manually, involving large volumes of paperwork and physical files, which were prone to errors, delays, fraud, and inefficiencies. With the growing need for secure, accurate, and fast banking services, computerization has emerged as a fundamental solution to modernize and streamline banking processes (Laudon & Laudon, 2020).
The rise of digital banking platforms, internet banking, and mobile banking has further increased the reliance on computerized systems. Customers now demand quick and secure access to banking services anytime and anywhere, which manual banking processes cannot efficiently support (Ovia, 2005). The introduction of computers in banking dates back to the 1960s in developed countries, where mainframe computers were first used to automate back-office operations such as account reconciliation and payroll processing. However, these systems were limited in functionality and accessibility. It was not until the 1980s and 1990s that commercial banks began to adopt more integrated computerized banking systems with functionalities such as electronic funds transfer (EFT), automated teller machines (ATM), and centralized databases (Laudon & Laudon, 2020).
In Nigeria and other developing countries, the adoption of computerized banking systems became more widespread in the late 1990s and early 2000s. The liberalization of the banking sector and the need for improved customer service, regulatory compliance, and operational efficiency prompted banks to invest heavily in banking technologies (Ovia, 2005). The implementation of Core Banking Applications (CBAs) enabled banks to offer services across multiple branches from a central server, thereby improving consistency and convenience for customers. Today, computerized banking systems have advanced significantly with the incorporation of internet banking, mobile banking, biometric authentication, and artificial intelligence (Ajayi & Ojo, 2006).
The challenges encountered that led to the execution of the research work is that, clients now demand quick, accurate, and seamless banking experiences needs that manual systems struggle to meet. Delays in service, limited access to account information, and lack of real-time updates are common complaints in banks that have not transitioned to digital platforms (Ovia, 2005). It is against the background that the developments of this software will support real-time data processing, which will help management in decision-making through instant access to accurate reports and transaction histories. It will also ensure consistency across multiple bank branches, enabling customers to access their accounts seamlessly from different locations.
1.3 Statement of Problem
Investigation revealed that manual systems often result in long queues, delayed transaction processing, data inaccuracies, and increased vulnerability to human error and fraud. A typical scenario in a manual banking system involves physical ledgers, paper-based account records, and face-to-face transaction processing (Ajayi & Ojo, 2006). Additionally, managing a growing customer base using such outdated methods limits a bank's ability to expand its services or operate efficiently across multiple locations.
Furthermore, manual systems lack adequate measures to prevent unauthorized access or data loss. In contrast, a computerized banking system is expected to enhance data security, automate routine tasks, and ensure the integrity and confidentiality of financial records (Laudon et al., 2020). Also, clients now demand quick, accurate, and seamless banking experiences needs that manual systems struggle to meet. Delays in service, limited access to account information, and lack of real-time updates are common complaints in banks that have not transitioned to digital platforms (Ovia, 2005).
1.4 Aim and Objectives of the Study
The aim of this study is to design and implement a computerized banking system that automates core banking operations, and fund transfers in order to improve efficiency, accuracy, and security in banking transactions.
The specific objectives of this study are:
- To develop a user-friendly interface for managing customer accounts and transactions.
- To automate banking operations such as deposits, withdrawals, and balance inquiries.
- To ensure secure storage and retrieval of customers' financial data.
- To minimize errors and delays associated with manual banking systems.
- To enable real-time transaction processing and reporting.
- To design an access-controlled system that prevents unauthorized access to sensitive banking data.
1.5 Significance of Study
The implementation of the proposed system will be highly beneficial to both financial institutions and their customers by providing an efficient and reliable solution to banking operations. It will reduce the workload on banking staff by automating repetitive and time-consuming tasks, allowing them to focus on more critical customer service functions.
Furthermore, the computerized banking system will improve the accuracy and speed of financial transactions, which will lead to greater customer satisfaction and trust in banking services. It will also enhance the security of sensitive financial information by restricting unauthorized access and providing secure data storage and backup options.
Additionally, the system will support real-time data processing, which will help management in decision-making through instant access to accurate reports and transaction histories. It will also serve as a valuable reference for software developers, students, and researchers interested in financial technology and digital transformation within the banking sector.
1.6 Scope of Study
The scope of this research study is focused on the design and implementation of a computerized banking system for Unity Bank Plc, Kaduna State Branch, with the goal of automating key banking operations such as account creation, deposit and withdrawal processing, fund transfers, and transaction history management.
1.7 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).
1.8 Definition of Terms
Banking System: A banking system refers to the network of institutions and technologies used to provide financial services such as deposits, withdrawals, transfers, and loans. In this study, it specifically relates to the structured digital platform designed to manage core banking operations efficiently (Ojo, 2019).
Computerized System: A computerized system is any process or service that has been automated using computer technology. It replaces manual procedures with software applications to improve accuracy, speed, and reliability in handling data and transactions (Adeyemi, 2020).
Account Management: This involves creating, updating, and maintaining customer records and account details in a secure and organized format. Effective account management ensures smooth and personalized banking services (Nwosu, 2021).
Database: A database is an organized collection of data stored and accessed electronically. In this project, the database is used to store customer information, transaction records, and account balances, allowing for real-time access and retrieval (Elmasri & Navathe, 2017).
Authentication: Authentication refers to the process of verifying the identity of users before granting access to the system. It ensures that only authorized individuals are allowed to view or manipulate sensitive banking information (Stallings, 2019).
Transaction: A transaction in banking is any activity that changes the financial state of an account, such as a deposit, withdrawal, or transfer. The system captures and records each transaction automatically to reduce errors and provide transparency (Olalekan, 2022).
User Interface (UI): This is the front-end part of the banking system that users interact with. It is designed to be simple and intuitive to ensure that both staff and customers can navigate the system with ease (Lazar, Feng, & Hochheiser, 2017).
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