ICT AND NIGERIAN BANKS REFORMS: ANALYSIS OF ANTICIPATED IMPACTS IN SELECTED BANKS Osabuohien, Evans S.C., Economics & Development Studies Department, Covenant University, Ota, Ogun State, Nigeria
Banking has become highly ICT based and due to its inter-sectoral link, it is reaping the benefits of technological revolution as evidenced by its application in most of its operations. The study carried out empirical analysis of the anticipated role ICT has in enhancing the operations of selected Nigerian banks in the light of current reforms. Primary data was employed, which was analyzed using cross-tabulations and regression technique built on the framework of technical progress. Factors such as bankers’ age, educational qualification, computer literacy and type of ICT gadgets, were found to influence banks’ degree of ICT usage, while ICT impacts significantly the speed of banking operations, productivity and profitability. The need for the banks to regularly train their workers, and procure quality ICT gadgets, which will enhance efficiency, etc, was stressed. This is crucial in the sector’s current reforms where attention is focused on the ability of banks to attract and retain customers, which is mainly feasible through efficient service delivery that depend, to a large extent, on the use of ICT. INTRODUCTION
In recent times, Information Communication Technology (ICT), which basically involves the use of electronic gadgets especially computers for storing, analyzing and distributing data, is having a dramatic influence on almost all aspects of individual lives and that of the national economy- the banking sector inclusive. The increasing use of ICT has allowed for integration of different economic units in a spectacular way. This phenomenon is not only applicable to Nigeria but other economies of the world, though the level of their usage may differ. In Nigeria, ICT usage especially in the banking sector, has considerably improved, even though it may not been as high as those observed for advanced countries (Adeoti, 2005; Adeyemi, 2006). The use of ICT in the banking sector became of interest to this study due to the significant role it plays in the economy. It helps in stimulating economic growth by directing funds to economic agents that need them for productive activities. This function is very vital for any economy that intends to experience meaningful growth because it makes arrangements that bring borrowers and lenders of financial resource together and more efficiently too than if they had to relate directly with one another (Adam, 1998; Ojo, 2007). In essence, the banking sector acts as a bridge that connects lenders and investors in the economy. Hence, the need for reforms in the sector initiated by the Federal Government via the instrumentality of the Central Bank of Nigeria-CBN. The bank reforms (especially the recapitalization that specifies a minimum capital base of 25 billion naira for commercial banks), are pursued with a view to making the sector realize its objectives in advancing the economy (CBN, 2006). It is expected that the impact of these reforms will be enhanced with the use of ICT because it will create some form of competitive advantage and improve banking services through accuracy and efficiency in their transactions. In other words, it will change the nature of banks’ services in terms of quality which will culminate in greater service delivery and productivity. This is in tandem with the findings made by Adeoti (2005) that the use of information technology has the ability of improving the competitiveness of Nigerian manufacturing industries. - 67 -
Global Journal of Business Research, Vol.2, No.2, 2008 Osabuohien, E.S.C. From the above discourse, this paper seeks to carry out an empirical analysis on the anticipated role of ICT in enhancing the operations of selected Nigerian banks in the light of current reforms in the sector....