The Impact of Information Technology in Banking Industry

The Impact of Information Technology in Banking Industry

In firms that are conscious of need for better information management, there is a shift from a fact and information gathering activity to a problem solving and action recommending function.  In today’s business setting a company’s need to add new dimension to it information management, predicated on the system approach to marketing management.  A marketing information technology would emphasis the continuing interaction and integration of information in decision process.

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  Information technology is an interacting continue future – oriented structure of people equipment and procedure, design to generate and process out information flow in order to aid management decision in a company’s marketing programme (Stanto 1995, 619).

Implicit in this marketing definition are several useful consideration.  One point to note is the broad system concepts of information handling.  The system starts with the determination of what data is needed.  Data here refers to statistics, opinion, feats, or predication categories or some basis for storage and Ani and Edoga (2000:74) is data relevant to the marketing manager in marketing decision.  It provides for processed with the aid of statistical analysis.  Example quantitative analytical techniques, finally, there is a provision for the store of the data and future retrieval of information of desired information.

The second point is that information technology is future oriented.  It is intender to anticipation and prevent problems as well as to solve them.  The system serve as a “prognosis” as well as “diagnosis”.  It is preventive as well as creative medicine for marketing.

Thirdly the system operate on continuing basis.  It is not a sporadic, intermittent sort of thing, finally the emphasis is on the total system in the process and not just on the analytical techniques or date processing equipment used in the process.

Marketing information technology is also, defined as a continuing and interacting, structure of people, equipment and distribute pertinent time and accurate information for use by marketing planning, implementation which a company needs usually is open and available by socially acceptable means if masses of marketing information.  Inspite of what seen to obvious need to develop a better system for management even today a significant number of firms have no marketing research department.

The need also provide facts with which to store business operation along the dynamic economic factor by making factal adjustment to control some variable leading to realization of the desired objectives.  The management to assess uncertainties and to reduce the risk in decision making (Limber, 1999, 218)

Banking Environment in Nigeria:

It was in the year 1892 that banking activities first started in Nigeria with the opening of a branch of the African banking corporation in Lagos.  The bank was incorporated in Britain, and own by Elder Dempster company, a shipping firm based in Liverpool.  The principal aim of the bank at the bank was to service British trading interest in Nigeria, such as the Royal Nigeria company and other similar companies.

Owing to the initial difficulties, the bank wound up its activities, and another bank, the bank of British West African Limited (BBWA) was established in 1894 to take over the activities of the former one.  The (BBWA) limited opened it first Lagos branch in the same year and later spread to another part of Nigeria owing to later political development in the country the bank changed its name several times and it presently known as the First Bank of Nigeria Limited (Now a public limited liability company) Plc.

The second bank to be establish in Nigeria was Bardays Bank DCO (Dominion, Colonial and Overseas), which opened it first branch in Lagos in 1917. the bank later changed its name to “UNION BANK OF NIGERIA”, and opened up branches in many parts of the country.

The two expatriate banks mentioned above were joined in 1949 by another foreign, bank, the British and French Bank (now UBA, United Bank for Africa Limited).  The above named bank took its root from another bank established by the French in o0ther West Africa countries banking scheme continued to be monopolized by foreign banks who between 1949 and 1954 tried to beat a rumored indigenous banking initiative by a pending legislation.

However, following discrimination suffered by Nigerians in the band of those foreign banks, some patriotic Nigerians grouped themselves for the purpose of banking the monopoly as a result of which the National Bank of Nigeria was founded in 1933 with the second world war coming to an end, there were increased economic activities and no less than four indigenous banks were opened during the twenty months period between May 1945 and January 1947. however, only one of these banks, Agbonmagbe Bank (now Wema Bank Plc) is the only surviving till date.  The other bank’s died prematurely, principally as a result of – how capitalization, poor management and aggressive competition by expatriate bank.  (Ukemenam 2001, P1).

As a matter of fact, between 1947 and 1952, a total of 22 banks were registered in Nigeria according to a study conducted by the CBN, but most of them went into liquidation within four years.

The period from 1892 to 1952 were regarded by CBN authorities as a period of “free – for – all banking”.  This was because, at that time, there was no licensing for banks or regulations to restrict or control their operations in Nigeria.  It was state of affairs that led to many failures and consequent losses to depositor that promoted the setting up of paton commission of inquiring to investigate the activities of banks and make recommendations. (Ukemenam 2001; P2).

As a result of the commission’s report, the first banking legislature in Nigeria was enacted and called the banking ordinance of 1952. the ordinance was to serve as an important landmark between open banking era and the modern banking in Nigeria.

Application of Information System Applied in Banking Industry:

Technological innovation affects not just banking, financial services, regulatory policy, but also the direction of the economy and its capacity for continue growth (Ferguson W, 2000; P2)

Most financial institutions rely on gathering, processing, analyzing and providing information in order to meet the needs of customers.  Giving the importance of information in banking.

It is not surprising that banks were among the earliest adopters of automated information processing technology. (Adirika and Ani 2000; 13).

The technological revolution in banking actually began in the 19500s well before it began in most other industries, when the first automated bookkeeping machine were installed at a few U.S banks.

Automation in banking became common over the following decade as bankers quickly realized that much of their labour intensive, information handling processes could be automated on the computer.

A second revolution occurred in the 1970’s with the advent of electronic payment technology.  Recognizing the importance of information security, the financial services industries during the late 1970’s and early 1980’s was also the first to implement encryption technologus on a widespread basis.  The euphoria surrounding the internet today seems very similar to that era, when the first nationwide credit and electronic fund transfers system were built.

With reference to remarks by vice chairman Roger W. Ferguson, R at the financial services conference 2000, St. Louis University, St. Louis mission, we can identify three main reason financial institutions are investing in technology.

(a)              Most financial institution anticipated reduction in operating cost through such efficiencies as the streamlining back – office processing and the elimination of error – prone manual input of data

(b)             Institutions are opportunities to serve their current customers and attract new ones by offering new products and services as well as enhancing the convenience and value of existing products and services.

(c)              With more powerful data storage and analysis technologies, institutions are able to develop and implement management system and techniques.

The Component of a Modern I.T

Every firm must organize a rich flows of information to its marketing manager.  Competitive companies study their manager information needs and design marketing information system (1915) to meet these needs.

A marketing information technology consist of people equipment and procedure to gather, sought, analyze, evaluate and distribute meded timely and accurate information to marketing decision markers (Kotler 2000: 101).

To carryout their analysis, planning implementation and control responsibility, marketing managers need information about developments and marketing environment.  The role of MIT. Is to assess the managers information and distribute their information in a timely fashion.  The information developed through internal company records marketing intelligence activities, marketing research and marketing decision support analysis Kolter (2000: 101) defined the component as follows.

1)        Interval Record System

Marketing managers rely on internal reports on workings, sales, prices, cost investor level.

The firm will just establish a reasonable simple marketing information technology. (Kotler, 1999; 316).

A marketing information technology is especially characterized by its involvement with the computer and with personnel processing quantitative analytical capabilities computer because of the masses of data to be handled.

2)        Marketing Intelligence System;

Whereas the internal record system supply result data, the marketing intelligence system supplies happening data.

A marketing intelligence system is a set of procedure and sources used by manager to obtain everyday information about development in the marketing environment.  Marketing managers collect marketing intelligence by reading books, newspapers and trade publication, talking to customer, suppliers and distribution and meeting with order company (Adirika and Ani 2000; 77).

3)        Marketing Research System

Marketing managers often commission formal marketing studies of specific problems and opportunities.  Thy may request a market survey on a product preference test, sales forecast by region or an advertising evaluation.

Kotler (2000:258) in his views, defined marketing research as a systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company.

4)        Marketing Decision Support System

MDS is a coordinated collection of data systems, tools and techniques with support software and hardware by which an organization gather and interprets relevant information from business and environment and turns it in to a basis for marketing action (little, 1998;10).

Customers are profitable which one and different treatment and which one should be eliminated.

Thirdly the growing consumer discontent often is intensified because management lacks adequate information about some aspect of its marketing programme.

Finally, the knowledge explosions information technology explosion itself fantastic management must show how to learn to cope with the abundance of information.

Fortunately, computers and others data processing equipment continue to improve, this improving management with fast inexpensive means of processing.

The Impact of Information Technology to All State Bank

The impact of current technology investment boom in the financial services sector is difficult to assess.  We know that productivity in financial services like in the rest of the service sector, is very hard to measure.  The problem is done to partly to the difficulty of measuring output accurately when the quality of service in changing as a result of such factor as greater convenience and speed and lower risk.

The evolution of I.T has brought about one of the most popular way of transferring money from abroad to any other part of the world through the Western Union money transfer.

All State Trust Bank Nigeria Plc has it branches in all the cities and local government area in Nigeria.

This I.T have helped all state trust bank in managing and coordinating useful information outside and within the bank.

It is pertinent to note that all states trust bank is one of the banks that have embraced the I.T in their banking operations.  The bank has introduced internet banking services, on – line banking services, smart – card etc. No wonder why it is one of the strongest bank in the world today.

According to MD/CEO of all states trust bank, Mr. G.C.T all, the major lesson the bank has gained from I.T in banking is that so many of its cost in banking are shared across services and even across customers.

He further hindered that the banks investments in never technologies must be made to modernize existing operations, to face competitive challenges and to meet customer expectations.

Moreover, I.T forms the basic for a re-organization of industrial society and the care of the emerging technology economic paradigm.

Information technology is capable of offering “strategic improvements in the productivity and competitiveness of virtually any economic or social activity.  Information technology is universally applicable in all business practices.

Organizational Profile:

All states trust bank of Nigeria limited was incorporated as a private limited liability company and obtained a license to carry on banking business in December 1989.  The bank’s equity is wholly hold by 32. Nigerian citizens.  Full banking operation commenced on 14th May 1990.

This mission of all states trust bank is to build a foremost financial services organization, characterized by a determined focus on customer professionalism, integrity and a commitment to distraction in the conduct of its business.

True Bank aspires to attain international standards in all aspect of its own business and eventually develop into a truly international bank whose sphere of influence extends beyond its borders.

The bank is located at 31A Opara avenue Enugu, Enugu stated their services located at all part of Nigeria with regional directors managers.

Their vision is to be an endearing organization, the achievement of which requires consistent long term superior performance on all established criteria and indices.

An organization with the reputation of bonafide integrity and professionalism and recognized as such by all its state holders.

Also an organization which provides staff with the opportunity of fulfilling their personal career goals without prejudice to current best practice.

And a market – driven organization, which remains conscious of increasingly sophisticated competition.

Finally a dynamic, diversified financial services organization.

All states trust bank is not new in banking commerce and services but of recent there have been a lot of complaints by customers about the quality of services which they render.

 

Despite their staff remain one of the most valuable asset and major source of competitive advantage.  Whilst technology and processes can be easily replicated and or adopted by others, their exceptional team, cannot whets with their unconventional but effective and interesting culture, ethics and creative approach to customer service delivery.

The bank has a well organization structure having managing director and the head and other subordinate such as the executive director, assistant general manager, senior manager and deputy manager’s.

All states trust bank of Nigeria limited has employed sixty seven employees including the plant managing directions as the cover all administrative head of the company “Bank”.

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 This article was extracted from a Project Research Work Topic “THE IMPACT OF INFORMATION TECHNOLOGY IN BANKING INDUSTRY (A CASE STUDY OF ALL STATES TRUST BANK) ENUGU.”

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