The Effectiveness of Information Technology on Banking Services Delivery

The Effectiveness of Information Technology on Banking Services Delivery

The Commercial Banks perform the following functions as thus.

  • Acceptance Deposit: From the entire public to individuals, corporate bodies, government on their agencies; and maintaining or keeping these deposits in either the current, savings of fixed Deposit Accounts.
  • Agency Services: Involve the clearing and collection of proceeds of cheques and other instruments on behalf of their customers.
  • Provision of Credit Facilities:  For Customers by way of loans and overdrafts.

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  • Safe Custody Services:  Are facilities provided by the bank that encourage customers to bring in their valuable items e.g. will, Title Deeds, Golds and Trinkets, for safe keeping.
  • Investment Management:  Banks invariably act as investment adviser to their customers particularly in the area of buying and selling of share – i.e. Managing their investment portfolio.
  • Status Reports:  Bank generally by their practice, answer to inquire about the financial standing of their customers invariably, such inquires emanate from banks.Replies to such inquires are Couched in a way that does not damage the reputation of customers. No exaggeration is needed in a reply to a status enquiry as such may lea to litigation against the bank that gave such reply. But, it is the practice of Bankers to quite any reply on status enquiry on a without recourse basis.
  • Standing Order Services: These facilities are activated whenever a customer instructs his bank to transfer funds periodically to a named beneficiary. The Customers instruction can only be carried out it customers account is in sufficient credit to take such transfer. Otherwise, if the practice of banker to notify customers whenever there is a shortfall on their account to’ effect such transfers.
  • Executive / Trustee Services; The Banks where appointed have always acted as executors and trustees through their specialized department.
  • Provision of International Trade Services: Banks help to promote international trade by the provision of such services as; Opening of Documentary Letter of credit., Bills for collection and negotiation, Foreign Exchange e.g. Traveler cheques and foreign currencies (Anibueze 1998).
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The pattern of commercial banking in Nigeria is fashioned after the British system, which is primarily the branch banking system.

The increase in capital was necessitated by the need to ensure that banks operate on a sound capital structure, and also because of the low value of the Naria. However, despite all the changes brought into Nigerian, banking as a result of de-regulation, complaints about their observed short-comings continue to in a lecture delivered by prof. Go. Nwankwo former chairman of union Bank of Nigeria Plc, titled “Training and manpower Development in the Banking industry in the 1990’s and beyond”, on the occasion of the 10th anniversary celebrations of the financial institution training center Lagos, he identified two major problems, which have emanated from the proliferation of banks in Nigeria. The first, according to Prof. Nwankwo is the keen competition, continuing profitability and several of the banks in general; the second issue is the effective management of these institutions.

Continuing, Prof. Nwankwo State that the issue of effective management was bring addressed by monetary authorities leaded by the central bank of Nigeria through the establishment of the Nigeria deposit insurance corporation (NDIC), the abroad review of banks capital requirements and the prudential guideline others measures, according to him were the new accounting standard for Banks, the Companies and Allied matters decree 1990 (CAMD), and the banks and other financial institution decrees (BOFID) of 1991. Despite these well intentioned regulations, the issue of effective management still persists as a result of a scarcity of technical and skilled manpower, Pro. Nwankwo further asserts. He maintains that through training and manpower development in the banking industry has expanded enormously, it has not yet matched the speed at which banks are floated and the diversity, the further of the industry appears promising. (Ukemean am 2001)

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Really information technology is a part of the concept of information management. Rather, information technology seems to be minimal than information technology though it also depends heavily on network of system technology just like information management.

Banks in Nigeria were relatively few until the deregulation of the financial sector which increased the number of commercial banks to 66, with a network of branches numbering over 2500 scattered all over the country (mainly in the Urban Centres). This is given to the pattern in Britain which until recently had only about 8 major commercial banks, with more than 12,000 branches nationwide. This system is in contrast with the pattern in United States of America, which practices the unit banking system – under this system, the United States has about 15,000 unit or individual banks operating with about 2600 branches most of which are confined to only one particular state. The banks are restricted to only the states. The banks are restricted to only the states in which they are registered, and their operations depend also on  existing legislation of each states. However, they may transact business outside their state through a network of correspondent banks nation- wide.

On the whole, there is the arrangement that Nigeria is still under- banked when compared with statistics available from other countries  for instance, Britain with about 12,000 bank branches, the bank customer ratio is about 1:4000, whereas in Nigeria the ratio is put at about 1:100,000. even when compared with other developing countries such as India, Mexico, Brazil etc, the ratio of banks branches to the population is still high. As a result of this how bank density, there is a lot of pressure and burden on banks to satisfy the yarning of the populace that continually require banking services. It was probably as a result of these yearning and pressure, which prompted the federal government into de-regulating the banking sector. They did this, by not only allowing the licensing of more commercial banks but also the establishment of the community banking system and the people’s Bank in order to bring banking services nearer to every segment of the larger society.

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