Software Deployment in Nigerian Banks

Only available on StudyMode
  • Download(s) : 222
  • Published : March 7, 2012
Open Document
Text Preview
The Dirty Deals between Nigerian Banks and Software Vendors

Information technology managers of many of the Nigerian banks and their collaborators smile to their various bank accounts each time they implement new banking software for their organisations. BusinessWorld Intelligent unit, in this reports, unearth the new wave of bribery and corruption among the IT departments of Nigerian banks. ………………………………………………………………….

Wherever money changes hands, crooks and embezzlers are sure to be close by. What many bankers fail to realize is that the crook or embezzler is often a colleague, a boss or even an owner. In other words, an "insider." We like to think that banks are immune to insider abuse; that bankers are pillars of the community. After all, if you can't trust a banker, whom can you trust? Of course, the vast majority of bankers can be trusted. Unfortunately, the banking industry is vulnerable to insider abuse. And it is often the most trusted employees who perpetrate the greatest fraud. The following anecdote can drive home some points: A man met a banker. Trying to establish a friendly relationship with the banker, the man said, "I used to know Mr. Jones, who was with your bank. I understand he is a tried and trusted employee...." The banker immediately assumed an air of cold unfriendliness. "He was trusted, yes; and he will be tried, too--if we're fortunate enough to find him." Fraud has been committed by bank personnel at every level, but large defalcations are generally perpetrated by experienced officers and employees who have been employed over a long term and who have gained sufficient knowledge, trust, and control over a specific area. While the majority of monetary losses in most defalcations are covered by the appropriate insurance, the risk to the bank's reputation in the community is not quantifiable and, therefore, the risk of fraud by bank personnel should be an ongoing concern.

The Old Order
Among the sharp practices that bankers have been accused of include use of customers’ names to procure foreign exchange without their consent, inappropriate and unauthorised use of foreign exchange, including outright round tripping of foreign exchange serviced from the Inter-Bank Foreign Exchange Market, (IFEM). Other forms of malpractices are falsification of accounting records, exploitation of unsuspecting customers’ ignorance to charge them excessive or unnecessary commissions, issuance of multiple financial statements, misuse of financial derivates, maintenance of high lending rates despite the lowering of the Minimum Rediscount Rate (MRR) and relaxation of other monetary policy measures. Banks were also accused of offering gratification to government officials to induce them to lodge their agencies and parastatals’ funds with them.

The New Order
But while we are taken away by the above named fraud types within the Nigerian banking sector, there is a particular one that has not been noticed and through which many bankers have become millionaires overnight. What is this type of fraud? Banking has come a long way since the days of manual ledger entries. Today, many banks worldwide have completely automated their processes, centralized their databases so that all information is available at all branches. What’s more, banks are offering their services over the internet and through one network. Available studies of Nigerian banks examine the degree of impact that the strategic application of information technology (IT) on competitive rivalry could likely have in making them domestically and globally competitive. A recent finding suggests that the variables competitive rivalry, customer acquisition/retention, cost reduction, and alliances/mergers could likely have the greatest impact on competitive advantage through the strategic application of IT in bank operation. In fact, all the Nigerian banks today are driven by IT and have become more efficient after implementing information technology into their...
tracking img