1.1 Introduction
Computer networking refers to the interconnection of multiple computing devices through a shared medium or channel to enable communication, data exchange, and resource sharing among users and systems (Laudon & Laudon, 2013). in the banking sector, computer networks serve as the technological backbone that supports a wide range of financial operations including electronic payments, fund transfers, customer account management, and online banking. Through networking, banks are able to create a centralized system that links their branches and service outlets, allowing for faster, more reliable, and more secure service delivery.
The Nigerian banking industry has evolved considerably over the years, with computer networking becoming a critical component of its modernization process. Before the advent of digital banking, transactions were largely manual, time-consuming, and prone to human error (Olowe, 2012). The introduction of computer networks transformed banking operations by enabling online real-time systems that link customers’ accounts to a central database accessible from any branch (Eze, 2014).
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, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background to the Study
Computer networking has become an indispensable part of modern banking operations, serving as the foundation for efficient communication, data processing, and electronic service delivery. According to Laudon and Laudon (2013), computer networking refers to the interconnection of computers and other digital devices to share data, applications, and resources within and across organizations. in the banking sector, this interconnection is essential for linking branches, facilitating online transactions, and ensuring the real-time processing of customer information. The development of computer networks has not only revolutionized how banks operate globally but has also influenced how financial institutions in developing nations like Nigeria conduct business in an increasingly digital economy.
Olowe (2012) reported that the Nigerian banking industry before the introduction of modern networking systems was largely manual, slow, and inefficient. Bank customers had to rely on paper-based transactions, which often led to long queues, delayed payments, and inaccurate record-keeping. The introduction of computer networking changed this narrative by enabling real-time inter-branch connectivity and electronic access to customer accounts. Eze (2014) asserted that the adoption of computer networks improved efficiency, enhanced customer satisfaction, and increased competitiveness among banks, particularly as the demand for electronic banking services grew rapidly across Nigeria.
However, the implementation of computer networking in Nigerian banks has not been without challenges. Adebayo (2012) stated that the country’s infrastructural limitations, including unstable electricity supply, limited broadband access, and inadequate ICT expertise, hinder the optimal functioning of computer networks. Similarly, Owolabi and Makinde (2014) affirmed that network instability, cyber insecurity, and frequent system failures are major obstacles that affect smooth banking operations. These challenges have exposed banks to financial losses, operational disruptions, and reputational risks, making it imperative to understand the balance between the relevance and the difficulties of maintaining efficient computer networks in the sector.
First Bank Nigeria Plc, being one of the oldest and most prominent financial institutions in the country, provides an ideal case study for this research. The bank, which has been at the forefront of banking innovation, experienced a significant technological transformation between 2007 and 2013 as it adopted advanced networking systems to improve its service delivery. According to Obi and Afolabi (2015), this period marked a shift from traditional banking methods to more integrated digital operations, where First Bank expanded its Automated Teller Machine (ATM) network, online banking services, and inter-branch connectivity. Nonetheless, the transition was not without issues, as system downtimes, data synchronization errors, and security breaches occasionally affected service delivery.
Omotayo (2015) contended that while Nigerian banks have made remarkable progress in adopting modern computer networking technologies, sustaining these systems requires continuous investment in ICT infrastructure, staff training, and cybersecurity measures. Therefore, understanding the relevance and challenges of computer networking within the Nigerian banking context is critical for improving efficiency, competitiveness, and customer trust. This study is set against the backdrop of assessing the relevance and challenges of computer networking in the Nigerian banking industry, with particular focus on First Bank Nigeria Plc during the period 2007–2013.
1.3 Statement of the Problem
Investigation revealed that the banking industry in Nigeria has undergone significant transformation over the past decades, particularly with the adoption of computer networking to enhance operational efficiency and service delivery. Computer networks are integral to banking operations as they facilitate faster transaction processing, secure data storage, real-time communication, and seamless coordination among different branches of a bank (Owolabi & Makinde, 2014). The relevance of computer networking is evident in its ability to improve customer satisfaction, reduce operational costs, and ensure timely access to critical financial information. However, the integration of computer networks in the Nigerian banking sector is not without challenges.
Banks, including First Bank Nigeria Plc, are increasingly dependent on network systems for core banking activities. On the one hand, these networks are expected to streamline operations and improve competitiveness, but on the other hand, they are susceptible to a range of issues including cyber threats, system downtime, inadequate infrastructure, and high maintenance costs (Adebayo, 2012).
Furthermore, network failures or breaches can result in financial loss, reputational damage, and reduced customer confidence, highlighting the fragility of over-reliance on digital systems. In addition, the period between 2007 and 2013 witnessed rapid technological advancements and regulatory reforms in the Nigerian banking industry (Obi & Afolabi, 2015). It is against this backdrop that this study seeks to investigate the relevance and challenges of computer networking in the Nigerian banking industry, with a focus on First Bank Nigeria Plc between 2007 and 2013.
1.4 Aim and Objectives of Study
The main aim of this study is to investigate the relevance and challenges of computer networking in the Nigerian banking industry with a particular focus on First Bank Nigeria Plc from 2007 to 2013.
The specific objectives of this study are:
- To examine the role of computer networking in enhancing banking operations in First Bank Nigeria Plc.
- To identify the challenges associated with the implementation and maintenance of computer networks in the bank.
- To assess the impact of computer networking on service delivery and customer satisfaction.
- To evaluate the efficiency and reliability of the existing networking infrastructure.
- To recommend strategies that will improve the effectiveness of computer networking in the banking industry.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- What role does computer networking play in enhancing the operations of First Bank Nigeria Plc?
- What are the major challenges facing the implementation and maintenance of computer networks in the bank?
- How has computer networking affected service delivery and customer satisfaction in First Bank Nigeria Plc?
- How efficient and reliable is the existing networking infrastructure in the bank?
- What strategies will help improve the efficiency and reliability of computer networking in the Nigerian banking industry?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H0: There is no significant relationship between computer networking and operational efficiency in the Nigerian banking industry.
- H1: There is a significant relationship between computer networking and operational efficiency in the Nigerian banking industry.
1.7 Significance of the Study
It is believed that at the completion of the study, the findings will serve as a useful contribution to both academic knowledge and industry practice. The research will help in identifying key networking challenges and suggesting solutions that will improve the overall performance of banks.
Furthermore, the findings of this study will contribute to understanding how computer networking influences the efficiency, productivity, and competitiveness of the Nigerian banking industry. It will also provide useful information to policymakers, bankers, and researchers interested in improving technological systems in financial institutions.
Lastly, the study will also serve as a reference point for future research on ICT integration in the banking sector and as a guide for banks seeking to strengthen their network systems and reduce technological risks.
1.8 Scope of the Study
The scope of this study covers the relevance and challenges of computer networking in the Nigerian banking industry, focusing specifically on First Bank Nigeria Plc in Lagos State. The study examines the technological operations and networking systems of the bank between 2007 and 2013, including their impact on service delivery, operational efficiency, and customer satisfaction.
1.9 Limitation 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, questionnaire and interview).
1.10 Definition of Terms
Computer Networking:
According to Laudon and Laudon (2013), computer networking refers to the interconnection of computers and digital devices through communication channels to share resources and exchange information.
Banking Industry:
Olowe (2012) defined the banking industry as a network of financial institutions that provide financial services such as deposits, loans, payments, and investments to individuals, businesses, and government bodies.
Operational Efficiency:
Eze (2014) asserted that operational efficiency refers to the ability of a business or organization to deliver services effectively while minimizing costs and maximizing productivity.
ICT (Information and Communication Technology):
Adebayo (2012) described ICT as the use of digital technology tools and systems such as computers, internet, and software to manage and process information.
Cybersecurity:
Owolabi and Makinde (2014) stated that cybersecurity is the practice of protecting computer systems and networks from theft, damage, or unauthorized access to data.
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