ABSTRACT

The objective of this study was to examine how Information Technology impacted on the performance of commercial banks in terms of profitability, effectiveness, efficiency, competitiveness, and customer satisfaction. The main research instruments used were questionnaire and personal interview for staff and customers of the bank. The simple frequency percentage was adopted as the statistical measure and hypothesis testing was analyzed using chi-square. Population of the study comprised of the entire First Bank in Enugu, Enugu State. Data was collected using research questionnaire. It was recommended that government should improve the electricity supply in the country, support and provide funding to local IT firms to foster local capacity, lower tariffs on the importation of information technology related equipment, and ensure that relevant agencies and regulatory bodies upgrade their own equipment as well. The private sector should invest in improving electricity supply, and banks should continuously implement customer-centred IT products and services of international standard.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The financial services sector is becoming increasingly technology-driven, and even other sectors of the economy are being reshaped by the pace of digital change. Before the advent of the electronic age, banks were largely defined by their physical branch presence. Today, information technology, and particularly the internet, has redefined the business of banking worldwide and in Nigeria specifically. Information and communication technology has become the digital nervous system of modern banking, since the business of banking is no longer perceived merely as the generation of deposit liabilities and the creation of liquid assets, but rather as the generation, storage, manipulation, communication, and application of financial information. Technology is increasingly viewed as an instrument for engendering competitive advantage in financial enterprises, as it promotes greater efficiency and effectiveness in financial transactions.

Recent empirical work continues to confirm this trend. A panel study of listed deposit money banks in Nigeria covering 2015 to 2024 examined how the adoption of mobile banking, e-banking, and Automated Teller Machine (ATM) usage affects financial performance, drawing on audited annual reports and Central Bank of Nigeria statistical bulletins (Onuorah, Oboro, & Ofanson, 2024). Similarly, a 2025 study of ten deposit money banks listed on the Nigerian Exchange Group between 2009 and 2023 found that ATM usage and agency banking, measured through Point of Sale (POS) systems, both have a statistically significant positive effect on the operational efficiency of Nigerian banks (Imam et al., 2025).

Technology in banking has continued to be one of the major transformation stories of the current decade, as digital channels such as ATMs, mobile banking applications, internet banking, agency banking through POS terminals, and increasingly fintech-driven services are now routinely used by Nigerian banks to deliver more efficient products and services to customers. A study tracing the effect of ATMs, POS terminals, and online banking transactions on Nigeria's national income similarly found a positive relationship between these electronic banking channels and economic growth (Nwankwo & Eze, 2022). From all indications, the application of digital technology across all areas of banking operations has intensified rather than slowed.

Globally, the financial services sector has continued to embrace the internet and mobile platforms as alternative delivery channels. In Nigeria, this is reflected in the rapid expansion of the fintech ecosystem: the Central Bank of Nigeria, alongside the UK Government, supported the development of a National Fintech Strategy in October 2022, intended to strengthen Nigeria's fintech environment and improve its global competitiveness as part of the broader Payment Systems Vision 2025 (TheCityUK, 2023). Nigeria has since become the largest fintech market in Africa, accounting for a significant share of the continent's fintech equity funding and transaction volumes (Chambers and Partners, 2025).

Information technology has, in this sense, already become the nervous system of banks worldwide, and this study concentrates on information technology in contemporary Nigerian banking. Nigerian banks risk becoming uncompetitive if they lack the means to deliver banking services online and in real time across branches within the country and abroad, if they lack the backbone telecommunications infrastructure in the form of broadband local and wide area networks, if they are unable to communicate and trade globally through cyberspace, and if they fail to invest comprehensively in IT and in the training of IT personnel. A recent critical evaluation of how technology enhances international banking performance, using secondary data from the Central Bank of Nigeria, the National Bureau of Statistics, and the World Bank covering 2000 to 2023, found that online banking platforms, mobile banking applications, and SWIFT systems are now widely adopted by Nigerian banks engaged in cross-border transactions, with emerging technologies such as blockchain and artificial intelligence being gradually implemented (Onuorah, Oboro, & Ofanson, 2024).

1.2 STATEMENT OF THE PROBLEM

The advent of information technology in the operations of commercial banks in Nigeria, among other sectors, has brought about several noticeable developments. Most bank branches at present are equipped with core banking applications supported by a central computer system. Nationwide ATM networks are also linked to branches and run on dedicated software applications. Banks are equipped with intranets providing functionality alongside e-mail facilities for branches. Internet banking, SMS banking, and phone banking are provided as value-added services, and credit and debit card usage is popular among customers.

This, however, brings its own attendant problems. Banks spend substantial sums acquiring ICT competence, including significant foreign currency expenditure on hardware and software, and they invest in training staff and retaining knowledge workers. A 2024 study of Nigeria's energy sector noted that inadequate infrastructure for electricity delivery, unreliable power supply, and high energy costs continue to impede the country's economic progress, with estimates suggesting losses of two to three percent of GDP annually due to inadequate power supply (Akhator, Obanor, & Adeyemi, 2024). This unreliable power situation directly affects the sustainability of ICT infrastructure that banks depend on for uninterrupted service delivery, raising the question of whether banks are achieving the expected return on their substantial ICT expenditure, and whether bank staff are adequately prepared to absorb forthcoming ICT challenges and innovations. These and related issues continue to make banking business in Nigeria more difficult, occasionally affecting banks' ability to meet financial obligations to their customers.

1.3 Objectives of the Study

The researcher is faced with accomplishing the following tasks:

i. To determine the impact of technological advancement on bank performance.

ii. To identify the role of ICT in improving banks' customer service delivery as well as customer satisfaction.

iii. To identify the role of ICT on bank competitiveness in Nigeria.

1.4 Research Question

To properly evaluate the objectives of this study, it becomes pertinent to ask the following research questions:

i. To what extent does technological advancement impact on bank performance?

ii. How has ICT improved banks' customer service delivery as well as customer satisfaction?

iii. How has ICT enhanced bank competitiveness in Nigeria?

1.5 Research Hypothesis

Ho1. Technological advancement does not significantly and positively impact on bank performance.

Ho2. ICT have not significantly and positively improved banks' customer service delivery as well as customer satisfaction.

Ho3. ICT have not significantly and positively enhanced bank competitiveness in Nigeria.

1.6 SCOPE OF THE STUDY

The research work covers the role information technology plays in the banking operations of commercial banks in Nigeria. Specifically, the information in this research work is limited to happenings in the First Bank of Nigeria. Emphasis is laid on activities at the First Bank of Nigeria Regional Office, Okpara Avenue Enugu, the Agbani Road branch, and the New Heaven branch, both in Enugu. The period of the study focused on 2002 to 2011.

1.7 SIGNIFICANCE OF THE STUDY

In our present age, the organizations that excel most are those able to transform accurate information, whether from customers or from knowledge of their own products, into forms that benefit their customers. The speed at which an organization processes information and effectively delivers the output of that processing to customers will determine its market share. Studies of e-service quality in Nigerian internet banking have found that functional quality, website quality, recovery quality, and security quality are all significantly associated with customer satisfaction, with functional quality having the strongest effect (Ighomereho, Afolabi, & Oluwakoya, 2022). This study will help banks recognize that one of the principal ways they can provide quality service and capture a high percentage of the market is through their effective deployment of technology.

To customers, or users of banking services, this study will help them evaluate the level of service and professionalism of banks before depositing their funds. Proximity of the bank branch will no longer be the primary consideration; safety and the level of service, with regard to quality, speed, and efficiency, will become the major imperative. Moreover, the study will help individuals and corporate bodies become better acquainted with the services and transactions obtainable in technologically driven banks.

1.8 LIMITATIONS OF THE STUDY

There have been many papers on ICT in the Nigerian banking industry, and recent work continues to expand this literature using more rigorous panel data and empirical methods (Onuorah, Oboro, & Ofanson, 2024; Imam et al., 2025). However, earlier studies in the area were often based mainly on estimates rather than objective data derived through rigorous analysis, posing a constraint that this study seeks to address using a combination of questionnaire and interview data. Moreover, it was not always straightforward carrying out a survey across selected bank branches and obtaining the input of banking and ICT staff while the researcher had to meet other academic demands concurrently.

REFERENCES

Akhator, P. E., Obanor, A. I., & Adeyemi, O. (2024). Energy consumption and economic progress in Nigeria: Challenges and pathways for the power sector. International Journal of Management and Human Science, 8(2), 22–43.

Chambers and Partners. (2025). Fintech 2025 – Nigeria: Trends and developments. Global Practice Guides. https://practiceguides.chambers.com/practice-guides/fintech-2025/nigeria/trends-and-developments

Ighomereho, O. S., Afolabi, T. S., & Oluwakoya, A. O. (2022). Impact of e-service quality on customer satisfaction: A study of internet banking for general and maritime services in Nigeria. Journal of Financial Services Marketing, 28, 488–501. https://doi.org/10.1057/s41264-022-00164-x

Imam, A., Yusuf, M., Bello, S., & Garba, A. (2025). Automated Teller Machine (ATM), agency banking and operational efficiency of deposit money banks in Nigeria. International Journal of Finance and Accounting, 10(3), 38–59.

Kolawole, O., Muritala, T. A., Akande, J. O., & Adekunle, A. O. (2024). Digital financial services and the performance of the quoted commercial banks in Nigeria. International Journal of Professional Business Review, 9(6), e04150. https://doi.org/10.26668/businessreview/2024.v9i6.4150

Nwankwo, C. A., & Eze, O. R. (2022). The effect of automated teller machines, point of sale terminals and online banking transactions on economic growth in Nigeria. Open Access Research Journal of Science and Technology, 4(2), 16–33.

Onuorah, A. C., Oboro, O. G., & Ofanson, C. E. (2024). Critically evaluate how technology enhances international banking performance. Economit Journal: Scientific Journal of Accountancy, Management and Finance. https://www.biarjournal.com/index.php/economit/article/view/1471

TheCityUK. (2023). Recommendations for the implementation of the National Fintech Strategy in Nigeria. https://www.thecityuk.com/media/hrnph15g/recommendations-for-the-implementation-of-the-national-fintech-strategy-in-nigeria.pdf

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