The Impact of Computer in Banking Industry

1.0 Introduction

The banking industry in recent times, have been experiencing some level of growth and improvement in its operations. And this can be attributed to the impacted of computed in banking industry in Nigeria. It has help to evaluate the new and old mode of operation and how computer has helped in carrying out the works in banking in Nigeria.

However, the history of banking can be traced back to the Italian Goldsmiths, who as a result of their kind of had strong vaults were they kept peoples precious metals which later served as vaults for keeping other materials. As a result of the growth the goldsmith experienced and much customers who were patronizing their services they began to issue our receipts to their depositors which they will use at a future date to redeem their valuable properties that were in vaults. These receipts were also transferable which owners used to clear their debts. Also the goldsmiths starting issuing loans to people and all these evolved into what we call today, the banking.

Africa as a continent, have been facing some kind of financial management issues, this lead to the establishment of the African banking corporation in 1892 which was taken over by the bank of British west Africa (BBWA) in 1894. In 1920's the bank became known as standard bank of Nigeria and as a result of the indigenization decree of 1977, its name was changed to First Bank of Nigeria LTD. Making it the oldest bank in the country today.

The most significant of this change is the massive deregulation of the industry as a component programme (SAP-structural Adjustment programme) which was introduced during the regime of Mohamed Ibrahim Badamosi Babangind. The Nigerian banking system was channeled towards the British banking system, characterized by wide exchange among these branches and this is an effective linkage in Nigeria which cannot be over emphasized. Banks and its operations consist of transactions which has mainly to do with the creation of credit.

1.1 Background of the Study

By nature, banking is an industry that generates largely tangible benefits, it effects to the perception and patronage of the customers.

Similarly the services rendered by banks in Nigeria are basically the same. They depend on personally selling a lot of which they get, this helps to increase the level of services provided by bank thus affects the attractiveness of bank to its customers.

However, haven stated earlier, the banking can be said to have started during the period of Goldsmiths. At the time of safeguarding by the goldsmiths, they issued receipts to the depositors on their own which acknowledged their indebtedness and these receipts were also presented by the depositors whenever they wishes to redeem their precious metals. The African Banking Corporation was established in 1892 and it was taken over by the bank of British west Arica (BBWA) in 1894, in 1920's, this bank became known as standard bank of Nigeria and as a result of the indigenization. Decree of 1977, its name was changed to First Bank of Nigeria limited.

The massive deregulation of the industry was one of the most important /significant charge and also a component of the programme (SAP-Structural Adjustment Programme) introduced during the regime of Mohamed Ibrahim Badamosi Babagida and non bank financial institution who were licensed, this led to an increased completion in the industry with the result that it was no longer easy to differentiate the service tendered by various operations in the financial system in Nigeria.

However, the Nigerian Banking Industry is channeled towards the British Banking system characterized by the wide branch Network which spread all over the country.

Transaction then changed among these branches and there is an effective linkage in Nigeria.

Indeed, the banking industry can be linked to the oil that prelates the wheel system of machine in an industry without the lubricant, the entire industrial setup may grid to a half (Woesly Aham 1988).

The bank and its operations consist of transactions which must be processed in order to carry out with the day to day activities of the bank since the bank has mainly to do with the creation of credit.

The branch banking is one of the characteristics of Nigeria banking and the volume of information generated, necessitates the use of a good storage and retrieval system. Since the regulation in the industry requires the production of a large number of reports on a regular basis and in various forms, there is need to adopt certain method or system to quicken their services. And despite the use of cheque, there was still problem of time wastage before the customers get paid.

Be it as it may, this problem led to the fast means of processing information through computer. Also computer makes it easy to assess a large volume of information faster and more accurately. Equally, its storage capacity and ability to present data in a large range of forms aid its use by bank management and operation staff.

In recent times computers have generated a lot of controversy as to their usefulness in the final analysis, considering a place like Nigeria where the capacity for proper utilization is jeopardized with inadequate infrastructure and linkage. As a result, most banks apply their system to mere book keeping function choosing the critical advantages of computer to improve both the process of transaction, processing and information generalization.

Brief History of Fidelity Bank of Nigeria

Fidelity bank Plc began operation in 1988 as fidelity union merchant Bank limited. By 1990, it had distinguished itself as the fastest merchant bank in the country. However, to leverage the emerging opportunities in the commercial and consumer end of financial services in Nigeria, in 1999, it converted to commercial banking and changed its name to Fidelity Bank Plc. Following the issuance of a commercial bank license by CBN, the national banking regulator. It became a universal bank in February 2001, with a license to offer the entire spectrum of commercial, consumer, corporate and investment banking services.

The current enlarged fidelity Bank is the result of the merged with the former FSB international Bank Plc. And manny bank Plc. (Under the fidelity brand name) in December, 2005. Fidelity bank is today ranked amongst the top 10 in the Nigerian banking industry. With presence in all the 36 states as well as major cities and commercial centers of Nigeria, Fidelity continues to rank among Nigerians most capitalized bank, with tier-one capital of nearly one billion US dollars (USD1 Billion).

However, over the years, the banks has been reputed for integrity and professionalism. It is also respected for the quality and stability of its management likewise the staff because of the quality of training which they receive on the job as well as good schools both in Nigeria and overseas. Hence to qualify as member of team fidelity a candidate is expected to possess three vital statistics with the acronym “TAC”

1. Talent: An innate mental aptitude
2. Ambition: A desire to succeed
3. Charcter: a total quality of integrity which will guide the talent and ambition to productive ends.

The management is focused on building and maintaining a virile and respected brand that caters to the needs of its growing corporate, commercial and consumer banking clientele. For this purpose, the bank is leveraging its pedigree in investment banking (Fidelity was a merchant bank for 11yrs) and its structures and service offering for a retail populace.

Fidelity bank also enjoy the respect and partnership of a network of offshore institutions with which it has correspondent banking , confirmation lines, credit and other relationship.

These include, ANZ London, Afr – Exim bank, Cairo, Egypt, ABSA, South Africa, commercial bank, franfurt, Citibank, NA. London HSBC, USEX – in Bank, USAID etc.

1.2 Statement of the Problem

in the past, a large managerial records and book keeping was handled manually but in recent times, there has been expansion of the banking industry that huge labour force would be needed to tackle today's massive volume of book keeping hence the adoption of computer operations will be required.

Secondly, Thomas. C (1976) writes in his report in united state information service that without information, the American financial systems would form in a constant stream of paper work.

So to reduce the cumbersome of paper work in the industry, the computer operational style is needed.

Thirdly, banking computer style expressed the same view that for an individual banks, this study therefore attempts to provide answer in respect to the banks under study in the following, why should banks computerize their operation? This is more from manual to computer application in banking operation and be justified after the underlying factors regarding both mode of operation and have taken considerations.

1.3 Objectives of the Study

The study attempt to fulfill the following purpose;

1. Give an explanation why banks are using computer
2. Access or evaluate both modes of operations (Manual and computer application) by studying procedures and controls adopted in banking operations.
3. To determine whether to move banks from manual to computer application s justified in consideration of the long queues in banks.
4. Mention the prospects of computer in the banking industry.
5. Give recommendations of improving the efficiency and reducing the inefficiencies presently existing in using the computer in banking operations.

1.4 Research Questions

Having a knowledge of computer in banking industries is capable in handling a greater volume of the information than the manual styles / application. The generation of computer based system enhances the time and quality of the decision making at all level in the banking industry. At this point, various question comes across like.

1. What is the stage in the growth of banking industries in Nigeria?
2. What are the roles of computer in the economy at large?
3. What are the impacts of computer in the banking industry?

1.5 Significance of the Study

1. It allows personnel to create, update and maintain customer records.
2. It can use computers to access and manage their account, bank employees have access to information on costumer's account that can be brought up in seconds.
3. Have enhanced the accuracy of accounts that tellers and other bank personnel process. The banking software performs costumer's transaction through a centralized data record system.
4. Computer has made it easy to receive transaction from affiliated bank branches. These new hardware technologies can process more transactions than legacy banking hardware systems.
5. Some major industries have become dependent upon their automation including banking, government and the military.
6. Information were read into the main system by a punch card machine, midrange and client server hardware configurations, which are no longer than a minitoner system, can run an entire bank in.
7. Advances into wireless banking and telecommunication banking, electronic transaction which have to be performed by the bank example is the direct deposit.

1.6 Scope of the Study

This project is based on the impact of computer in banking industry in Nigeria. The study will therefore cover a case study of Fidelity bank Nigeria Plc trough problems relating to the topic are peculiar to all banks in general.

1.7 Limitation of the Study

in the research works certain constraints were encountered during the period of this project some of the restraints experienced by the researcher are given below.

Time:

This was a major constraint on the researcher during the period of the work, considering the limited time given for this research and the needed attention due to academic work that faced the researcher being an ND finalist.

Financial Constraints:

Owing to the financial difficulty prevalent in the country and its resultant increase in the prices of commodities, transportation fares, research materials, etc , the researcher did not fide it easy meeting all her financial obligations in school as a result of which the work restricted to the much affordable.

Information constraints;

Nigeria researchers have never had it easy, when it comes to obtaining necessary information relevant to their study from private organization and even government agencies. Getting the published materials on this topic mean going from one library to the other which was not easy. But some of the respondents find it difficult to furnish the research with the whole information easily. They see it as revealing the organization secrets although this problem placed limitation on the study.

During personal interview, with some respondents, the researcher experiences a lot of communication problems. Some of the respondents did not understand English language, the views of the people are important in this survey because they constitute the bank customers.

1.8 Definition of Terms

Computer:

Is an electronic device which is capable of receiving information (data) in a particular form and performing a sequence of operations in accordance with a predetermined but variable set to procedural instructions to produce a result in form of information or signals.

Program:

This is a sequence of operations in accordance with a predetermined but variable set of procedural instructions.

Machine Code:

A language which can be understood by a particular computer.

Bank:

is defined as a corporation or one who accepts money on current account and collect cheques for customers.

Sector:

A part of a particular area especially of a country's economy e.g. banking sector.

Legislation:

These are policies geared towards the regulation of banking business and other financial institution e.g. BOFIA – bank and other financial institution Act, OBN Act, etc.

Inter Mediation:

This is the process whereby financial institution and non financial institution serve as a link between the surplus unit and the deficit unit of the economy.

Data Diddling:

This involves changing data prior or during input into a computer. In other words, information is charged from the way it should be entered by operator.