CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Information to a modern organization is a resource that is parallel in importance to land, labour and capital. It is a very vital and priceless resource. For centuries, man has tried to collate, store, process and retrieve information, and most importantly distribute or communicate it via the fastest means. It follows, therefore, that man has tried various ways and methods to record and disseminate information in his attempt to proffer solutions to competing tasks over the centuries. Information management is increasingly recognized in contemporary scholarship as a strategic organizational asset; well-managed information has been described as a valuable, rare, and non-substitutable resource capable of generating sustained competitive advantage for firms that learn to harness it effectively (Olannye & Ndugbu, 2024).

Information technology continues to act as the driving force behind convergence and structural change across economies, organizations, and industries worldwide. Scholars note that information technologies have progressively enabled, and in many cases necessitated, a fundamental shift in how organizations create and capture value, reshaping resource orchestration processes that were once confined within the boundaries of a single firm (Faik, Oborn, Thornton & Gegenhuber, 2023). This shift has been particularly visible in knowledge-intensive sectors such as banking and finance, where digital infrastructure now underpins virtually every aspect of service delivery.

Information technology is a term which generally covers the harnessing of electronic technology for the information needs of businesses at all levels. It is a computer-based system as well as telecommunication technology for the storage, processing, and dissemination of information. It is no longer news that we are now in an information age one that is revolutionary and represents an information superhighway on which every corporate entity and profession must adopt if it is to survive in the 21st century. The world of business and governance in the information age is further complicated by concepts such as democratization, competition, deregulation, privatization, commercialization, liberalization, internationalization and computerization. This makes it impossible for an organization or country to survive and grow without information technology.

Today's business environment is very dynamic and undergoes rapid changes as a result of technological innovations, increased awareness and demands from customers. Business organizations, especially the banking sector of the 21st century, operate in a complex and competitive environment characterized by these changing conditions and a highly unpredictable economic climate. Contemporary research on digital transformation in Nigerian banking confirms that banks are increasingly compelled to adopt digital technologies to remain competitive, as these technologies streamline the flow of capital between savers and borrowers and have become central to driving operational performance and economic relevance for financial institutions (Adebayo & Okonkwo, 2023).

The adoption of information technology concepts, techniques, policies and implementation strategies in banking services has become a subject of fundamental importance and concern to all banks. This is owing to the fact that it is a prerequisite for local and global competitiveness. Information technology has directly influenced the products and services that are offered in the banking industry. It has continued to change the way banks and their corporate relationships are organized worldwide, alongside the variety of innovative devices available to enhance the speed and quality of service delivery.

Regulatory developments have further reinforced this trend in Nigeria. In March 2023, Nigeria became the first country in Africa to issue formal open banking operational guidelines, positioning the Central Bank of Nigeria as a regional leader in shaping a collaborative bank–fintech ecosystem (Iroche, 2025). This regulatory shift has coincided with a sharp rise in digital transaction activity; the total volume of mobile banking transactions in Nigeria grew from approximately 315 million in 2019 to over 10.7 billion in 2023 (Iroche, 2025), reflecting the scale of transformation that information technology has brought to the sector.

The banking industry in Nigeria has witnessed tremendous changes linked with developments in information technology over the years. Empirical evidence from recent studies indicates that the deployment of information and communication technology facilities has brought about fundamental changes in the content and quality of banking business, with a gradual and measurable rise in operational efficiency recorded as the adoption of these technologies gains wider acceptance among banking customers (Ibrahim, Yakubu & Sani, 2024). Further studies confirm that the integration of information technology in Nigerian banks has resulted in improved customer satisfaction, faster transaction processing, and measurable competitive advantage, although gaps remain in implementation quality and equipment effectiveness across the industry (Yusuf & Adeyemi, 2022).

The quest for survival, global relevance, maintenance of existing market share and sustainable development has made exploitation of the many advantages of information technology through the use of automated devices imperative in the banking industry. It is against this backdrop that this study seeks to examine the impact of information technology on the growth and development of the banking industry in Nigeria, with particular reference to United Bank for Africa Plc (UBA), First Bank of Nigeria Plc (FBN), and Zenith Bank Nigeria Plc.

1.2 STATEMENT OF PROBLEM

The Nigerian banking industry is characterized by a high degree of inefficiency and ineffectiveness in certain segments. Some banks in Nigeria render substandard and non-qualitative services to their customers, and their delivery systems remain outdated and poor in parts of the sector. Fraud and related financial crimes continue to be committed in banks and financial institutions, even as digital adoption increases. Studies have shown that while information technology adoption has reduced reliance on purely manual, ledger-based transaction processes, the pace and depth of this transition still varies considerably across Nigerian banks when compared to fully digitized banking systems in advanced economies (Adeyemi & Eze, 2023).

Also, accurate records are not consistently maintained across all banks, and prompt and fair attention is not always granted to customers. These lapses and deficiencies have contributed to the underdevelopment still experienced in parts of the Nigerian banking sector, making it difficult for the industry to fully withstand global competition from banks in developed nations. The problem, therefore, is to determine how information technology can be more effectively applied to banking operations in order to develop and improve the Nigerian banking industry.

1.3 OBJECTIVES OF THE STUDY

The objectives of this study include:

• To ascertain whether the introduction of information technology in the banking sector has enhanced efficiency in Nigerian banks.
• To evaluate the level of customer satisfaction since the implementation of information technology in Nigerian banks.
• To carry out a survey on the perception of bank employees towards the introduction of information technology in the Nigerian banking industry.
• To ascertain whether information technology has contributed to minimizing fraud and other financial crimes in the Nigerian banking sector.
• To examine the effect of information technology on the profit position of the Nigerian banking sector.

1.4 RESEARCH QUESTIONS

The research questions for this study are as follows:

• Has the introduction of information technology in banking operations enhanced the efficiency of Nigerian banks?
• Has the implementation of information technology increased the level of customer satisfaction?
• Has the rate of financial anomalies and impropriety reduced in the Nigerian banking sector since the adoption of information technology?
• Are bank employees comfortable with the introduction of information technology in the Nigerian banking industry?
• Has information technology paved the way for higher productivity in the Nigerian banking industry?
• Has the implementation of information technology improved the profit base of Nigerian banks?

1.5 HYPOTHESES OF THE STUDY

The hypotheses for this study are as follows:

NULL (Ho): The introduction of information technology in Nigerian banks does not facilitate wide and speedy service delivery. ALTERNATE (Ha): The introduction of information technology in Nigerian banks facilitates wide and speedy service delivery.

NULL (Ho): The level of customers' satisfaction has not increased since the adoption of information technology by Nigerian banks. ALTERNATE (Ha): The level of customers' satisfaction has increased since the adoption of information technology by Nigerian banks.

NULL (Ho): Information technology has not contributed positively to the efficiency and productivity of banks in Nigeria. ALTERNATE (Ha): Information technology has contributed positively to the efficiency and productivity of banks in Nigeria.

1.6 SCOPE OF THE STUDY

This study concentrates on the impact of information technology on the growth and development of the banking industry in Nigeria, with special reference to United Bank for Africa Plc (UBA), First Bank of Nigeria Plc (FBN), and Zenith Bank Nigeria Plc.

1.7 SIGNIFICANCE OF THE STUDY

The significance of this study is as follows:

• It will throw more light on how information technology has assisted Nigerian banks in meeting the high expectations of customers.
• It will unveil new products and services that information technology has provided to the Nigerian banking sector, enabling banks to maintain high levels of efficiency and productivity.
• It will reveal new customer services Nigerian banks render to their customers via information technology, ensuring that customers' needs are adequately satisfied.
• It will bring to the knowledge of the general public the new service delivery channels that information technology has introduced to the Nigerian banking industry.
• It will suggest to the government ways in which information technology can be used as a cornerstone in reforming the financial sector, aimed at increasing the speed and reliability of financial operations and strengthening the banking sector.
• It will serve as a body of knowledge to be referred to by other researchers.
• It will clearly elucidate ways in which information technology can provide the Nigerian banking sector with the wherewithal to deal with challenges in the economy.

REFERENCES

Adebayo, T., & Okonkwo, C. (2023). Digital transformation in banking: A review of Nigeria's journey to economic prosperity. ResearchGate. https://www.researchgate.net/publication/374431795

Adeyemi, S., & Eze, F. (2023). Covid-19 pandemic and ICT performance in Nigerian banks. International Journal of Entrepreneurship, Business and Creative Economy. https://journals.researchsynergypress.com/index.php/ijebce/article/download/1312/883/8957

Faik, I., Oborn, E., Thornton, P., & Gegenhuber, T. (2023). [Special issue on digital platform ecosystems]. Information and Organization, Elsevier. https://doi.org/10.1016/j.infoandorg.2023.100478

Ibrahim, M., Yakubu, A., & Sani, B. (2024). ICT adoption and operational efficiency in Nigerian deposit money banks. International Journal of Entrepreneurship, Business and Creative Economy, 4(1). https://journals.researchsynergypress.com/index.php/ijebce

Iroche, S. (2025, April 26). Nigeria's banking and financial services sector in 2030: Impact of AI and emerging technologies. Reuben Abati Online. https://reubenabati.com.ng/opinion/opinion-nigeria-s-banking-and-financial-services-sector-in-2030-impact-of-ai-and-emerging-technologies-sonny-iroche

Olannye, A., & Ndugbu, M. (2024). The role of information management in enhancing organizational resilience. APTISI Transactions on Management (ATM), 8(1), 32–39. https://doi.org/10.33050/atm.v8i1

Samuel-Ogbu, I. (2022). Digital technology and the transformation of the Nigerian banking system: The operators' perspective. CBN Economic and Financial Review, 60(4), 133–150. https://dc.cbn.gov.ng/efr/vol60/iss4/11/

Yusuf, K., & Adeyemi, R. (2022). The impact of information technology on bank performance in Nigeria. Kashere Journal of Management Sciences, Federal University of Kashere.

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