ANALYSIS OF THE EFFECTIVENESS OF INFORMATION TECHNOLOGY ON BANKING SERVICES DELIVERY (A CASE STUDY OF UNION BANK ENUGU)

CHAPTER ONE

1. INTRODUCTION:

The banking industry has made significant advancements in adopting information technology (IT) for managing information and enhancing customer service delivery. Although IT is a subset of information management, it serves as a vital tool for its implementation. According to Akuwudike and Ugwu (2002), information technology involves the collection, recording, storage, processing, and communication of data, primarily through a combination of computer and telecommunication technologies.

When evaluating the effectiveness of IT in banking system delivery, its impact is undeniable. IT has streamlined operations, eliminating time wasted on simple transactions. Both bankers and customers benefit from the efficiency IT offers. However, challenges persist, affecting the effectiveness of IT for banks, customers, and the Nigerian economy at large.

1. BACKGROUND OF THE STUDY

Understanding IT’s role in banking requires exploring its foundational concepts. Akuwudike and Ugwu (2002) describe IT as a field combining computer and telecommunication technologies to manage and disseminate information. This convergence supports advanced systems, including artificial intelligence and expert systems, enabling efficient decision-making processes (Armstrong, 1993).

As Jan (1987) explains, IT facilitates extensive man-machine interactions, with tools such as internet services and expert systems revolutionizing service delivery. IT is essential to modern banking practices, but its adoption in Nigeria remains uneven across institutions.

1.2    STATEMENT OF PROBLEM

Despite advancements, many banks struggle to effectively manage their information and meet customer expectations. Increasing competition in the banking sector poses additional challenges, particularly for Union Bank Plc.

For example, branches like Union Bank on Okpara Avenue lack sufficient IT infrastructure, such as effective online banking systems. Customers face prolonged wait times due to inadequate IT solutions. Frequent network failures, referred to as “system failures,” further hinder operations, leaving customers unable to complete transactions and achieve their goals.

1.3    OBJECTIVE OF THE STUDY

This study aims to assess the effectiveness of IT in banking service delivery, specifically examining:
a. The role of IT in improving banking services.
b. Customer responses to IT tools, such as Automated Teller Machines (ATMs).
c. The impact of the internet on banking operations.
d. Challenges associated with adopting IT in banking.
e. Possible solutions to identified challenges.

1.4    THE RESEARCH QUESTION

          The study addresses the following questions:

1. How does IT affect banking service delivery?
2. Do customers respond positively to IT tools like ATMs?
3. Is the internet essential for effective banking service delivery?
4. What challenges do banks face in adopting IT for customer service?

FORMATION OF HYPOTHESIS

To analyze the effectiveness of information technology in banking services delivery the following hypothesis are formulated.

HYPOTHESIS ONE

A.      Ho:    information technology is not of any importance to the effective banking service delivery.

          Hi:     information technology is of great importance to the effective banking service delivery.

          HYPOTHESIS TWO

B       Ho:    Customer does not respond positively to the information technology items like ATM.

          Hi:     Customer respond positively to the information technology items like ATM.