INFORMATION TECHNOLOGHY AND BANK PERFORMANCE IN NIGERIA:

A CASE STUDY OF WEMA BANK PLC.

BY

FALADE JOSHUA ADEWUNMI

(EU130303-231)

DEPARTMENT OF BUSINESS ADMINISTRATION

FACULTY OF SOCIAL AND MANAGEMENT SCIENCES,

ELIZADE UNIVERSITY, ONDO STATE,

ILARA MOKIN

NIGERIA

JULY,2019
 INFORMATION TECHNOLOGHY AND BANK PERFORMANCE IN NIGERIA:

A CASE STUDY OF WEMA BANK PLC.

BY

FALADE JOSHUA ADEWUNMI

(EU130303-231)

BEING A RESEARCH PROJECT SUMITTED TO THE DEPARTMENT OF BUSINESS

ADMINISTRATION, FACULTY OF SOCIAL AND MANAGEMENT SCIENCES, IN

PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR

OF SCIENCE (B.Sc.) DEGREE IN BUSINESS ADMINISTRATION, ELIZADE

UNIVERSITY, ILARA-MOKIN, ONDO STATE,

JULY, 2019

ii
 CERTIFICATION

This is to certify that by FALADE Joshua Adewunmi Carried out this research work under my

supervision in the department of Business Administration, Faculty of social and Management

sciences, Elizade University ILara-mokin, Ondo state, Nigeria.

………………………… …………………………

Dr. M. Omorodion Date

(Project Supervisor)

……………………………. ……………………………

Dr. Martin Omorodion signature and date

Head of Department (Business Administration)

iii
 DEDICATION

This research is dedicated to the Almighty God of all Knowledge, Strength and mercy.

iv
 Acknowledgement

Firstly, I give thanks to the Almighty God who gives me wisdom and grace to successfully

complete this project.

Also, I will ever remain grateful to my supervisor Dr Omorodion for your relentless effort in the

cause of monitoring and supervising this project work. May God in His infinite mercy bless you

(Amen).

To my lecturers in the department I say big thank you for impacting in me the knowledge I have

acquired in the cause of my stay in Elizade University. Dr Martin Omorodion (Head of Department),

and Dr Isaac Adesuyi, Dr Agbaje thank you for your fatherly advice and love. Dr Obadeyi James you

will forever remain in my heart. May God continue to replenish the source of your wisdom (Amen).

My wonderful and ever supportive friends ( Adebayo Adeshina, Oladele Omolafe ,Olamire Dabor,

Adeyosola Ambali ) in school and course mates. I say a big thank you for always being there, for the

prayers, care and love. God bless you all. (Amen)

My parents, Mr Adeyinka Falade and Deaconess Eunice Falade, thank you for everything. From

the prayers to the advice, to the motivational talks and to the love and care you have showed me,

thank you.

My siblings, Miss Oluwafunmilayo Falade, Miss Oluwabusayomi Falade, Master Adefolarin

Falade, and my uncles Mr Adedeji Falade, Mr Adegboyega Falade, Mr Adetunji Falade thank you for

all your support. I love you all.

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 TABLE OF CONTENT

Contents
CERTIFICATION ....................................................................................................................................... iii
APPROVAL ................................................................................................ Error! Bookmark not defined.
DEDICATION ............................................................................................. Error! Bookmark not defined.
ACKNOWLEDGEMENT .............................................................................. Error! Bookmark not defined.
ABSTRACT............................................................................................................................................. viii
CHAPTER ONE ......................................................................................................................................... 1
INTRODUCTION ....................................................................................................................................... 1
1.1 Background to the Study.............................................................................................................. 1
1.2 Statement of the Problem ........................................................................................................... 4
1.3 Research Questions ...................................................................................................................... 5
1.4 Objectives of the Study ................................................................................................................ 5
1.5 Hypothesis for the Study.............................................................................................................. 6
1.6 Justification for the Study ............................................................................................................ 6
1.7 Scope of the Study........................................................................................................................ 7
1.8 Operational Definition of Terms .................................................................................................. 7
1.9 Brief Profile of Wema Bank Plc. ................................................................................................... 8
CHAPTER TWO ...................................................................................................................................... 10
LITERATURE REVIEW ............................................................................................................................. 10
2.1 Review of Conceptual Literature ............................................................................................... 10
2.1.1 Development of electronic banking in Nigeria ................................................................ 13
2.1.2 Application of IT in the Nigerian Banking Industry: ..................................................... 17
2.1.3 Benefits of Electronic Banking.......................................................................................... 21
2.1.4 Risks Associated with Electronic Banking....................................................................... 24
2.1.5 Historical Development of Banking in Nigeria ................................................................ 25
2.1.6 Information Technology and Banks Performance .......................................................... 27
2.2 Review of Theoretical Literature ............................................................................................... 29
2.2.1 Innovation diffusion theory. .............................................................................................. 29
2.2.2 Technology Acceptance Theory ........................................................................................ 30
2.3 Review of Empirical Literature................................................................................................... 30
2.4 Gap in Literature ........................................................................................................................ 35
2.5 Conceptual Framework ............................................................................................................. 36
CHAPTER THREE .................................................................................................................................... 37
METHODOLOGY .................................................................................................................................... 37

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 3.1 Study Area .................................................................................................................................. 37
3.2 Research Design. ........................................................................................................................ 37
3.3 sources of Data ........................................................................................................................... 38
3.4 Population, Sample Size and Sampling Procedure.................................................................... 38
3.5 Measurement of Variables ........................................................................................................ 39
3.6 Model Specification.................................................................................................................... 40
3.7 Data Analysis Technique ............................................................................................................ 41
CHAPTER FOUR ..................................................................................................................................... 42
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA................................................................ 42
4.1. Introduction............................................................................................................................... 42
4.2. Summary Statistics .................................................................................................................... 42
4.3 Correlation Analysis ................................................................................................................... 45
4.4 Regression Result ....................................................................................................................... 46
4.5 Administered Questionnaire ..................................................................................................... 49
4.5.1 Section A: Demographic Data of the Respondents ......................................................... 49
4.5.2 Section B: Analysis of Questionnaire Items that Related to the Research
Questions Using descriptive statistics. ....................................................................................... 53
4.6 Hypotheses Testing .................................................................................................................... 60
CHAPTER FIVE ....................................................................................................................................... 61
SUMMARY, CONCLUSION AND RECOMMENDATIONS ......................................................................... 61
5.1 Summary..................................................................................................................................... 61
5.2 Conclusion .................................................................................................................................. 63
5.3 Recommendations ..................................................................................................................... 64
5.4 Limitation to the Study .............................................................................................................. 65
References ............................................................................................................................................ 66
APPENDIX .............................................................................................................................................. 72

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 ABSTRACT

Information technology has helped Nigerian banks to streamline the back-office

operations by improving both efficiency and cost reduction. Advances in technology also

influence the way banks services are delivered with the aim of making it more convenient for

customers.

The study focuses on Internal Technology and performance of Banks in Nigeria, for a

period of three (3) years (i.e. 2014 – 2016). However, the 2014-2016 period has been chosen

as it represents period of aftermath of financial sector reform in the banking subsector.

The study also used purposive sampling. The study adopted both correlation and

simple regression analysis.

The study revealed that a positive correlation existed between IT and banks

performance in Nigeria. This implied that a marginal change in the level of the investment and

adoption of IT in the banking industry resulted to a proportionate increase in the profit level in

terms of performance. The research work recommended appropriate policies must be put in

place to ensure proper monitoring and the determination of the optimum size required to attain

organizational efficiency in term of performance.

viii
 CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Globally, today’s business environment is very dynamic and experiences rapid change

as a result of creativity, innovation, technological changes and demands from customers.

Business organizations, especially the banking industry operates in a complex and competitive

environment characterized by dynamic changing conditions and highly unpredictable

economic climate condition with information and communication technology. Information has

always played a prominent role in human life but the emergence of social progress and the

vigorous development in science and technology has immeasurably increased the role of

information in every facet of human endeavour. The rapid expansion of a mass of diversified

information has born the term “information explosion”, which eventually gave rise to a

scientific approach in information and elucidation of its most characteristic properties which

has led to principal changes in interpretation of the concept of information. It was broadened

to include information exchange not only among men but also among machines as well as the

exchange of signals in the animal and plant worlds.

The pace of change brought by new technologies has had a significant impact on the

way people live, work, and play globally. Therefore, the role of IT in the banking industry has

become of paramount interest due to the significance role IT plays in the economy by

stimulating economic growth and development through the intermediation of funds to

economic agents that need them for productive use. This function is very vital for any economy

that intends to experience meaningful growth because it makes arrangement that bring

borrowers and lenders of financial resource together and more efficiently too than if they had

to relate directly with one another. (Agboola, 2001; Adeoti, 2005).

1
 The application of electronic payment and implementation of electronic devices in

banking industry has become a subject of fundamental importance and concerns to all banks

operating within Nigeria territory and indeed a prerequisite for local and global

competitiveness. It could be recalled that the recent consolidation exercise in Nigerian banking

sector has drawn the attentions of many banks to application of various technological devises

in promoting/achieving better customer service delivery that guaranteed continuous increase

in profitability and higher return on investment (Oladejo, & Akanbi, (2012). However, the rapid

growth in the global banking services has increased the pressure on the Nigerian banks for

improved productivity. The new age of banking allows customers to walk into any

computerized bank and conclude their transaction within a twinkle of an eye. In order to

enhance banking services, majority of banks especially the new generation banks have adopted

the electronic banking services to enhance their customer service delivery through the

advancement in the information technology (David-West, 2005; Balogun, 2016).

However, the roles of banking industry could not be over emphasized in any vibrant

economy because; banking and financial industry is a competitive economic sector in Nigerian

business environment. The sector plays the role of a driver in Nigerian economy that

contributed over 6.4% against a target of 10% of total gross domestic products (CBN, 2008).

Therefore, for any financial institution (bank) to stimulate economic growth and development,

it requires information technology and strategic management approach to improve its

organizational performance. The possession and the management of information is a key

activity in banking. The influence of process reengineering and innovations through IT is likely

to be bigger in banking than in other industries. Banks importantly require IT to coordinate

enormous volumes of information (David-West, 2005). Information technology (IT) is

perceived as a necessity to pursue the rationalization and cost management due to intensified

competition in the financial sector.

2
 Information technology has helped Nigerian banks to streamline the back office

operations by improving both efficiency and cost reduction. Advances in technology also

influence the way banks services are delivered with the aim of making it more convenient for

customers. For example, many bank’s branches were connected online real time (24/7). This

clearly reduces the danger of carrying cash. The banks were able to deal effectively with global

competition that offered low priced products/services with high quality service level (Balogun,

2016). Competitiveness is no longer assured for the powerful organizations of the past;

changing industry and market conditions had caused organizations to adapt to changes or die.

The pace of changes has accelerated more product and service innovations, product life cycle

has shortened and technological advancements have become more rapid; government

regulation/ political pressures compelled banks to respond accordingly. Such responses may

be minor adjustments or could entail an overhaul or revamping of an entire business process.

The financial service industry is one of the early adopters of IT (Loveman, 1994). The impact

of IT capability on firm performance has not been explicitly explained, that remains

inconclusive in the sector in general, unlike in the other sector like manufacturing sector.

Consequently, IT has now become the key elements for strengthening the

competitiveness of the national economy and improving the productivity and efficiency of both

private and government banks. However, access to and use of these technologies remains

extremely uneven. Developing countries (Nigeria inclusive) are being left behind in the

expansion of a global economy where knowledge is a key factor that drives productivity and

economic development. IT contributes to the future of developing countries, Nigeria inclusive;

underestimating their importance may ultimately reduce the gap with industrialized countries.

Most banks in the country look towards opportunities arising from the new marketplace. Also,

it is believed that there are benefits from the more pervasive and enduing impact of IT upon

3
performance of financial institutions. Banks are adopting internet-based technologies to

improve distribution efficiency so that the competitiveness of banks can be greatly enhanced.

1.2 Statement of the Problem

There are challenges confronting IT in the Nigerian banking sub-sector that could be

categorized into the followings; human, operational and technical factor constraints. The

human factor constraints consist of physical disability, poor sight, illiteracy and old age. The

operational factor constraints involve insecurity of funds transferred, frauds and

standardization of channels; while the final constraint is technical limitation that is anchored

on the lack of infrastructure such as poor power supply, and lack of encryption on short

messages system (SMS) messages. However, other identified problems that can be associated

with the banks in the adoption of IT include (but not limited to) lack of stable government

policies, weak financial sector, poor technological infrastructure, relatively small Internet and

computer penetration, level of financial illiteracy, lack of consumer awareness, poor banking

habit and reluctance to change. The extent of challenges confronting Nigerian banking sector

has thus become imperative for this current study.

Recently, developing nations are increasingly improving their technology

infrastructure. Nigeria is never an exception in investing heavily in building and technological

infrastructure. Among the areas focused on are electronic commerce, electronic banking, and

electronic learning (Oluwagbemi, Abah, & Achimugu, 2011). Despite the potential of

information technology to contribute to development, other factors, such as forming a

community of users, which is vital in order to realize potential role of information technology

and take advantage of the opportunities have not been created. In that respect, this research

work perceives the need to fill the gap to enable the much-needed framework that can help

realize the benefits of information technology on bank performance.

4
 There are number of factors that are contributing to IT problem associated with banks

performance. Studies (Loveman, 1994; Sager, 1998; Emmanuel, & Sife, 2008) have shown

that segmented internet accessibility along social class and educational capabilities is a

significant one. However, majority of internet users are often faced with challenges of slow

and fluctuating internet services both in the day time and night. It is believed that inefficiency

and inconsistency of the internet providers are highly common in developing countries. There

are, though, some changes in the global Internet, where, Europe has the highest number of

Internet users, followed by the Asia Pacific region. But the digital divide between developed

and developing nations is still wide, although some studies indicate some signs of

improvement, but at a low trend. The availability of constant internet for users is an issue for

empirical study of this nature.

1.3 Research Questions

The following research questions are considered in the study which include:

1. Is there any relationship between Information Technology (IT) and bank performance?

2. To what extent does IT improve bank performance with reference to Wema Bank PLC?

1.4 Objectives of the Study

The main objective of the study is to examine the impact of Information Technology

(IT) on the performance of banks in Nigeria: Case study of Wema Bank PLC.

The specific objectives are to:

1. examine the relationship Information Technology (IT) and bank performance.

2. ascertain the extent at which IT improves bank performance with reference to Wema Bank

Plc.

5
1.5 Hypothesis for the Study

Hypothesis 1

Ho1: There is no significant relationship between Information Technology (IT) and bank

performance.

Hi1: There is a significant relationship between Information Technology (IT) and bank

performance.

Hypothesis 2

Ho1: There are no challenges confronted by banks that used (IT) in their operations.

Hi1: There are challenges confronted by banks that used (IT) in their operations.

Hypothesis 3

Ho1: Information Technology (IT) has not improved the performance of Wema Bank PLC.

Hi1: Information Technology (IT) has improved the performance of Wema Bank PLC.

1.6 Justification for the Study

Studies (Sager, 1998; Emmanuel & Sife, 2008) have shown that information

technology is a term that encompasses all forms of technology used to create, store, exchange

and use information in its various forms (business data, voice conversations, motion pictures,

multimedia presentations etc.); and it is the technology that is driving what has often been

called “the information revolution”. Due to innovative advancements in banking technologies;

internet banking, online banking and e-banking. The IT sources have not been properly used

by customers in accessing banking products and services. Therefore, this study attempts to

provide empirical evidence on the relationship between customers of banks and ability to

access the different IT sources to enjoy modern quality service delivery.

Literatures (Lymperopoulos & Chaniotakis, 2004; Oluwagbemi et al., 2011; Balogun,

2016) have also shown that IT has influenced the performance of Nigerian banks. Several

achievements were realized in banks networking and profitability. Furthermore, employees

6
were made to cope with the demands of information technology (IT), which is common in

global banking industry. But not many studies have been conducted to evaluate if Wema banks

PLC has utilized IT efficiently. Therefore, this research work becomes highly important in

filling the existing gap.

Also, findings from this research study, which details on the impact of information

technology on performance of banks would be beneficial to stakeholders and assist

management in decision making process. For Wema Bank Plc, findings from the research work

will initiate the bank’s management to give due emphasis on how to manage the identified

variables and provides them with understanding of activities that will enhance IT usage

performance. Consequently, this study serves as reference material for policymakers, investors,

government agencies and ministries to assist in decision making process. Thus, it can further

minimize the literature gap in the area of study.

1.7 Scope of the Study

The study focuses on impact of IT on performance of Banks in Nigeria: A case study

of Wema Bank Plc., for a period of three (3) years (i.e. 2014 – 2016). However, the 2014-2016

period has been chosen as it represents period of aftermath of financial sector reform in the

banking subsector. The study shall further be limited to the review of recent and relevant

literatures on IT and bank performance as well as related theories and past researches in order

to achieve the expected objectives.

1.8 Operational Definition of Terms

- Electronic Banking: Electronic banking is the use of computers and telecommunications to

enable banking transactions to be done by computer or telephone instead of human interaction.

- Information Technology (IT): It is the delivery of banking products and services to the

customers and general public electronically through the use of electronic banking instruments

or products like Automated Teller Machine (ATM) and point of sales (POS) among others.

7
- Automated Teller Machine (ATM): ATM is a computerized telecommunications device

that provides bank customers with self-service access to their financial accounts.

- Point of Sale (POS): are varieties of services rendered through machines located at retail

establishments.

- Bank: A bank is a financial institution licensed to provide financial services by way of

receiving deposits and granting of loans. Banks may also provide financial services, such as

advisory services, currency exchange and safe custody etc.

- Financial Institutions: Financial institutions (FIs) are institutions that play an intermediary

roles between lenders and borrowers of funds, ensuring that funds are moved from the surplus

economic unit to the deficit units by means of providing banking and investment services.

Financial Institutions transfer funds in the form of loans, deposits, and investments.

- Commercial Bank: A commercial bank is a financial institution which performs the

functions of accepting deposits from the general public and giving loans for investment with

the aim of earning profit.

- Central Bank of Nigeria (CBN): The Central Bank of Nigeria (CBN) is the Central bank

and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced

operations on July 1, 1959. The major regulatory objectives include, maintain the external

reserves, promote monetary stability and a sound financial environment etc.

1.9 Brief Profile of Wema Bank Plc.

Wema Bank Plc was established in 1945 as a Private Limited Liability Company

(formally known as Agbonmagbe Bank Limited) and commencing banking operations in

Nigeria the same year as an indigenous bank. The bank became Public Limited Company

(PLC) in April 1987. Wema bank Plc was listed on the floor of the Nigerian Stock Exchange

(NSE) in 1990. On February 5, 2001, it was granted a licence to operate as a universal bank by

8
the Central Bank of Nigeria (CBN), thus allowing the Bank to provide the Nigerian public with

diverse and modern financial and business advisory services.

The choice of Wema bank Plc is borne out of the fact that is the only longest surviving

and most resilient indigenous bank in Nigeria. For several decades, the financial institution has

a fully-fledged range of value-adding banking and financial advisory services to the Nigerian

public. Precisely 2009, the Bank underwent a strategic repositioning exercise spearheaded by

a new management team that has seen its profile rise considerably which finally culminated

into its taking a sound strategic decision to operate as a commercial Bank with regional scope

particularly in Southern Nigeria; as well as Abuja in 2011. In 2015, the bank returned to being

a national bank.

9
 CHAPTER TWO

LITERATURE REVIEW

2.1 Review of Conceptual Literature

Technology can be referred to as the application of knowledge for the execution of a

given task. It entails skills and processes necessary for carrying out activities (works) in a given

context. While information technology (IT) encompasses computer systems, networks and

multimedia applications (Frenzel, 1996). IT came into use in the late 1980’s replacing earlier

terms like Electronic Data Processing (EDP), Management Information System (MIS),

although the latter terms are still in use (Frenzel, 1996). For many years, accountants, bankers,

technology specialists, entrepreneurs, and other practitioners have advocated for the

replacement of physical cash and the introduction of more flexible, efficient and cost effective

retail payment solutions in line with the global trend (Ovia; Fansan 2007). Countless

conferences and seminars have been held to discuss the concepts of cashless and “chequeless”

society as observed by Bank for International Settlement, (2005). Automation is gaining

grounds on daily basis in the world business circle. According to Ovidiu-Constantin (2009),

accounting is heavily involved in the processes of regionalization and globalization, through

adjustment and transformation of systems of national accounts into a single system and that the

current turbulence that occurs on the capital market requires rapid decisions based on

transparent accounting information available in real time. Bankers’ perceptions of the benefits

of IT have attracted the attention of many researchers, especially in recent years. Banks

normally assign their managers responsibility for the promotion of the use of electronic

channels to customers (Lymperopoulos, and Chaniotakis, 2004).

The concept of IT capability was introduced by Ross et al. (1996) and defined IT

capability as the firm’s ability to assemble, integrate and deploy IT based resources. Heijden

(2000) pointed out that the measurement of IT capability covers relationships in IT department

10
with the rest for the business. It also broadens the explanation of accepted views of

organizational IT capabilities on an organization’s information technology function.

Bharadwaj (2000) defined IT capability as the ability of a firm to mobilize and deploy IT based

resources in combination with other resources and capabilities. Those IT-based resources are

IT enabled resources, which consist of technical and managerial IT skills; intangible IT-

enabled resources; such as knowledge, assets, customer orientation and synergy- the sharing of

resources and capabilities across organizational division.

Though, financial sector appears to be a clear leader in the use of IT. Financial

institutions are one of the largest investors in IT (Gupta and Collins, 1997). Martini (1999)

while narrating the history of computer usage in banking says that the use of computers in

banking first began in the early 1950s, when the first large commercial computer was built for

Bank of America. Automated Teller Machine (ATM) (Don Wetzel developed ATM in 1973

and it was first installed at Chemical Bank in New York(Shelly et. al. (2004)), is considered

one of the most significant technological investments made by the commercial banks. ATM’s

introduced the power of computer technology to the general public and made banking

convenient for consumers (Nsouli, 2002).

Therefore, IT capabilities reflect the ability of these firms to combine resources to

promote superior performance (Amit and Shoemaker, 1993). Capability can be in form of

competence that organization demonstrates in its capability to make use of IT tools and

processes that are required to maintain market and customer information (Amit and Shoemaker,

1993). Capability can be in form of competence that ICT has transcended the role of support

services or only electronic data processing; its fields of applications are somewhat global and

unlimited. Its devices especially the internet through the World Wide Web (www) and modern

computer email facilities have further strengthened early innovations like the telephone and

fax. Other IT devices include data recognition equipment, factory automation hardware and

11
services, tele-computing and teleconferences using real time and online system (Adeoti, 2005).

It is a concept that is having a remarkable effect on almost entire aspects of the human

endeavours. This connotes that IT involves the application of principles to engage physical

component in achieving an intended goal. The convergence of computer and

telecommunication after about four decades of applying computers to routine data processing,

mainly in information storage and retrieval, has created a new development where information

has become the engine of growth around the world. This development has created catch-up

opportunities for developing countries such as Nigeria to attain desired levels of development

without necessarily ‘reinventing the wheels’ of economic growth. This new technology has

brought far-reaching revolution in societies, which has tremendously transformed most

business (banking) scenes (Ovia, 2005).

However, it is in line with the view of Moutinho, (1997) that the managers input as

delivery staff is important and that it is the manager’s responsibility to ensure that branch staff

is professional, well-trained and knowledgeable about the range of services provided by the

bank. Similarly, Aladwani (2001) highlighted faster, easier, and more reliable service for

customers, and improvement of the bank’s competitive position to be the most important

drivers of online banking among bank and IT managers. Hence, IT competence was

conceptualized to include three dimensions: IT operations, IT object and IT knowledge

(Tippins and Sohi, 2003). A high level of IT experience enables organizations to be innovative

in service delivery and cost containment strategy that would enhance performance as well as

meet customer requirement (Bhatt and Grover, 2005; Clark et al., 1997).

The task of IT capabilities for improving organizational performance was well

established in the literature. Various IT studies suggest IT capabilities provide the basis of

gaining competitive advantage and enhancing organizational performance (Bhatt and Grover,

12
2005; Santhanam and Hartono, 2003). An extensive body of IT capabilities literature agreed

that IT capabilities are resource to facilitate an effective collection and utilization of

information (e.g., Bharadwaj, 2000). Floyd and Wooldridge (1990) suggest that IT capabilities

enhance service reliability, reduce transaction errors and increase consistency in performance.

Furthermore, other observations are that IT capabilities can contribute to enhancing service

quality through better customized or individualized services, and in creating knowledge links

for identifying and sharing organizational expertise (Quinn et al., 1994).

Tippins and Sohi (2003) commented that IT capabilities, which are also known as IT

competencies, improve performance through elimination of inefficiency, reduction of long

term cost, improve service reliability and reduced transaction errors. The term IT capability is

adapted from the study conducted by Tippins and Sohi (2003). The study used IT knowledge,

IT infrastructure and IT operations among the dimensions of measuring IT capability. IT

knowledge concerns with the extent to which a firm possesses a body of technical knowledge

about objects such as computer based systems (Tippins and Sohi, 2003). IT knowledge

encompasses professional qualification, expertise and skills such as programming, systems

analysis and design, and competencies in emerging technologies. IT operations include IT

functions, coordination and interaction with user community. Hence, IT operation was

conceptualized as the extent to which organization utilizes IT to manage market and customer

information. The computer-based hardware, software and support staff were referred to as IT

objects.

2.1.1 Development of electronic banking in Nigeria

Technology innovation has influenced the performance of all Nigerian banks. In the

last ten years, tremendous achievements were achieved in banks networking, service delivery,

profitability and customers responses. Employees were made to cope with the demands of

information and communication technologies (ICT) dominated global banking industry.

13
Customers also benefited from improved networking and service delivery which inevitably

improved banks competitiveness and profitability. But despite these achievements Nigerian

banks have witnessed severe downturn in their profit and many of them have almost collapsed.

Technological innovation rests on the creative ability of human being. Man has the capacity to

use his knowledge to create new machines process and method that could enhance or improve

the quality of goods and services. Innovation is required for man to satisfy his changing needs

and cope with the demand of the changing and dynamic environment. The production of the

unusual, uncommon novel and quality, ideas and product which enable man to satisfy his need

despite his changing condition and requirements. Technology innovation is the changes in

technology that can significantly improve the organization performance, improve its process

and promote its service delivery system beyond the state of the art to produce quality goods

and services (Taylor, 1958).

Shrivastava (1984) regards IT as changes in technology that significantly improve the

performance of organization. Organizations can cope with the changing condition in its

environment through technology innovation. Organizations should employ different methods

to promote and use technology to promote its adaptability and management to the ever

changing conditions and environment in which it operates. Human beings takes the most active

part, as they are involved in producing and using technology and also in using and purchasing

product and services that are produced by organizations through the use of technology.

Man’s creativity leads to inventions which are used for innovation by organization.

Organization’s choice and purchase of technology are determined by socioeconomic

conditions. Major invention may be impeded by absence of complimentary condition to

innovation. A labour saving invention may not be immediately adopted when labour is

abundant and capital is scarce. Poor facilities and lack of finance may hinder invention and

adoption of new technology. Availability of cheap labour may hinder the use and purchase of

14
labour saving device or innovation. Many organizations attempt innovation to fulfil technical

and market requirements, to improve customer satisfaction, to improve employee performance

and to make more profit (Dauda, 1996).

Many Nigerian banks have achieved all these, but most of them have failed to sustain

these achievements. It is imperative to assess the factors that have contributed to these, and

provide enduring solutions to enable them to survive in the competitive, dynamic and turbulent

Nigerian environment. Market or the environments have to be analysed and technology

innovation that will enable Nigeria banks to satisfy and respond to market need to be

introduced. Information have to be collected and processed in a manner that organization will

benefit from its uses. Organization should ensure that it has capability, capacity and need for

technology before using or embarking on it. Employee’s skills and competence have to be

improved and management to be developed to innovate and to manage performance for

sustainability.

Kaleem & Ahmad (2008) observed that Electronic banking is the latest in the series of

technological wonders of the recent past and that ATMs, Tele-banking, Internet Banking,

Credit Cards and Debit Cards have emerged as effective delivery channels for traditional

banking products. The Government of Nigeria further promoted electronic banking with the

CBN release on August 2003. This recognizes that electronic banking and payments services

are still at the early stages of development in Nigeria. Arising from the three major roles of the

CBN in the areas of monetary policy, financial system stability and payments system oversight,

the CBN Technical Committee on IT has produced a report, which anticipates the likely impact

of the movement towards electronic banking and payments on the achievement of CBN’s core

objectives. Following from the findings and recommendations of the Committee, four

categories of guidelines have been developed as follows:

15
 i. Information and Communications Technology (ICT) standards, to address issues

relating to technology solutions deployed, and ensure that they meet the needs of

consumers, the economy and international best practice in the areas of communication,

hardware, software and security.

ii. Monetary Policy, to address issues relating to how increased usage of Internet banking

and electronic payments delivery channels would affect the achievement of CBN’s

monetary policy objectives.

iii. Legal guidelines to address issues on banking regulations and consumer rights

protection.

iv. Regulatory and Supervisory, to address issues that, though peculiar to payments system

in general, may be amplified by the use of electronic media.

The guidelines are expected to inform the future conduct of financial institutions in

electronic banking and electronic payments delivery. This landmark step provided legal

recognition of digital signatures and documents, thus reducing the risks associated with the use

of electronic banking in Nigeria. At present, all the commercial banks in Nigeria have set up

their own ATM Networks, issue debit and credit cards and have joined ATM switch Network

(Ovia 2002; Ayo, Ekong, Fatudimu, and Adebiyi 2007). According to Somoye (2008), between

1952 and 1978, the banking sector recorded forty-five (45) banks with varying minimum paid-

up capital for merchant and commercial banks. The number of banks increased to fifty-four

(54) from 1979-1987. The number of banks rose to one hundred and twelve (112) from 1988

to 1996 with substantial varying increase in the minimum capital. The number of banks

dropped to one hundred and ten (110) with another increase in minimum paid-up capital and

finally dropped from 89 as at end of 2003 to twenty-five in 2006 with a big increase in

minimum paid-up from two billion naira in January 2004 to twenty five billions in July 2004.

16
As at the end of 2010 the number of banks licensed to practise in Nigeria stood at 24

(www.cbn.ng 2011).

2.1.2 Application of IT in the Nigerian Banking Industry:

IT has contributed to the distribution channels and networking of Nigerian Banks. The

electronic delivery channels are collectively referred to as Electronic Banking. Electronic

Banking is really not one technology, but an attempt to merge several different technologies.

Information Technologies (ITs) may be viewed in different ways. The World Bank defines ITs

as the set of activities which facilitate by electronic means the processing, transmission

technologies people use to share, distribute, gather information through computers and

computer networks (Laudon and Laudon; 2001). ITs can be described as a complex varied set

of goods, applications and services used for producing, distributing, processing, transforming

information- (including) telecoms, TV and radio broadcasting, hardware and software,

computer services and electronic media (Laudon and Laudon; 2010).

Similarly, Information Communication Telecommunications (ICTs) represent a cluster

of associated technologies defined by functional usage in information access and

communication, of which one embodiment is the Internet. IT affects financial institutions by

easing enquiry, saving time, and improving service delivery. In recent decades, investment in

IT by commercial banks has served to streamline operations, improve competitiveness, and

increase the variety and quality of services provided. According to Yasuharu (2003),

implementation of information technology and communication networking has brought

revolution in the functioning of the banks and the financial institutions. It is argued that

dramatic structural changes are in store for financial services industry as a result of the Internet

revolution; others see a continuation of trends already under way.

Many banks are making huge investments in technology to maintain and upgrade their

infrastructure, in order not only to provide new electronic information-based services, but also

17
to manage their risk positions and pricing. At the same time, new off-the-shelf electronic

services such as online retail banking are making it possible for very small institutions to take

advantage of new technologies at quite reasonable costs. These developments may ultimately

change the competitive landscape in the financial services. IT facilitated the networking of

banks branches and to other banks within and outside the nation. Computerization and inter-

connection of geographically scattered stand-along banks branches and other banks at national

and global levels into one unified system in the form of a Wide Area Network (WAN) or

Enterprise Network (EN); for the creating and sharing of consolidated customer

information/records. It offers quicker rate of inter-branch transactions as the consequence of

distance and time are eliminated. Hence, there is more productivity per time period. The

customer populace as one system, there is simulated division of labour among bank branches

with its associated positive impact on productivity among the branches. Furthermore, as it

curtails customer travel distance to bank branches it offers more time for customers’ productive

activities.

Technological innovation such as the use of computer automation and electronic

banking influences speed of bank services delivery, enhanced management decision making

and saving time (Alu, 2002). Information Technology has provided self-service facilities

(automated customer service machines) from where prospective bank customers can complete

their account opening documents direct online. It assists customers to validate their account

numbers and receive instruction on when and how to receive their cheque books, credit and

debit cards (Agboola, 2001).

Thus, Technological Innovation deals with the physical devices and software that link

various computer hardware components and transfer data from one physical location to another

(Laudon and Laudon; 2001 & 2010). IT products in use in the banking industry include

Automated Teller Machine, Smart Cards, Telephone Banking, MICR, Electronic Funds

18
Transfer, Electronic Data Interchange, Electronic Home and Office Banking. Electronic

banking has tremendously improved the services of banks to their customers (Agboola, 2001).

Innovations in information processing, telecommunications, and related technologies – known

collectively as “information technology” (IT) – are often credited with helping fuel strong

growth in the many economies (Coombs et al, 1987). It seems apparent then that, technological

innovation affects not just banking and financial services, but also the direction of an economy

and its capacity for continued growth.

Information and communication technology (ICT) have always played a very important

role in human life. However, in the mid-20th century, the role of information increased

immeasurably as a result of social progress and the vigorous development in science and

technology. In addition, as (Laudon and Laudon; 2010) has pointed out, rapid expansion of a

mass of diversified information is occurring, which has received the name “information

explosion. IT products in use in the banking industry include;

 Automated Teller Machines (ATMs)

This is a combination of a computer terminal, record-keeping system and cash

vault in one unit, permitting customers to enter the bank’s book keeping system with a

plastic card containing a Personal Identification Number (PIN) or by punching a special

code number into the computer terminal linked to the bank’s computerized records 24

hours a day. The combined services of both the Automated and human tellers imply

more productivity for the bank during banking hours. Also, as it saves customers time

in service delivery as alternative to queuing in bank halls, customers can invest such

time saved into other productive activities. ATMs are a cost-efficient way of yielding

higher productivity as they achieve higher productivity per period of time than human

tellers.

19
  Telephone Banking

This is tele-banking devices which allows customers to transact banking business over

the phone. It has numerous benefits for both customers and banks. As far as the customers are

concerned, it provides increased convenience, expanded access and significant time saving. On

the other hand, from the banks’ perspective, the costs of delivering telephone-based services

are substantially lower than those of branch based services. It provides retail banking services

even after banking hours (24 hours a day) it accrues continual productivity for the bank. It

offers retail banking services to customers at their offices/homes as an alternative to going to

the bank branch/ATM. This saves customers time, and gives more convenience for higher

productivity.

 Personal Computer Banking (PC)

This allows the bank’s customers to access information about their accounts via a

proprietary network, usually with the help of proprietary software installed on their personal

computer. Once access is gained, the customer can perform a lot of retail banking functions.

The increasing awareness of the importance of computer literacy has resulted in increasing the

use of personal computers. This certainly supports the growth of PC banking which virtually

establishes a branch in the customers’ home or office, and offers 24-hour service, seven days a

week. It also has the benefits of Telephone Banking and ATMs.

 Internet Banking

This is the main vehicle for Public Access Computing (PAC). Internet offers an

excellent environment for banks to experiment with the delivery of home banking (Bill, 1996).

It has been used to develop virtual reality bank branches in the United States of America. A

prototype of this is the Electronic Courtyard developed by the Global Payment System Visa

and the US software firm Worlds Inc. It allows customers to check account balances, transfer

funds and apply for loans. It uses three-dimensional graphics to enable customers to move into

20
different rooms and communicate with virtual bank tellers, loan arrangers and financial

advisers. It uses visa remote banking subsidiary, visa interactive, to link banks with customers

and provide secure technology for the safety of account data transferred (Agboola, 2006).

 Electronic Funds Transfer at Point of Sale (EFTPoS)

It is an on-line system that allows customers to transfer funds instantaneously from their

bank accounts to merchant accounts when making purchases (at purchase points). A POS uses

a debit card to activate an Electronic Fund Transfer Process (Chorafas, 1988). Increased

banking productivity results from the use of EFTPoS to service customers shopping payment

requirements instead of clerical duties in handling cheques and cash withdrawals for shopping.

Furthermore, the system continues after banking hours, hence continual productivity for the

bank even after banking hours. It also saves customers time and energy in getting to bank

branches or ATMs for cash withdrawals which can be harnessed into other productive

activities.

2.1.3 Benefits of Electronic Banking

The performance as stated by Wheelen and Hunger (2000) is an end result of an activity

and an organizational performance is accumulated end result of all the organization’s work

process and activities. It is necessary for the management of the organizations to measure and

assess the organization performance to use organizations resources in a better way and to earn

good organization repute. Managers measure and control organization performance because it

leads to better asset management, to an increased ability to provide customer value, to improve

measures of organizational knowledge and measure of organizational performance do have an

impact on an organization’s reputation. The most frequently used organizational performance

measures include the organization efficiency (productivity), organizational effectiveness and

industry ranking (Wetherbe et. al., 1999). Efficiency is defined as “minimum utilization of

21
resources and getting maximum output” and effectiveness is “how well the job gets done”

(Robbin and Coulter, 2003).

The perceived benefits of electronic banking have been documented in recent studies,

especially Thornton and White (2001) that compared several electronic distribution channels

available for banks in United States and concluded that customer orientations towards

convenience, service, technology, change, knowledge about computing and the Internet

affected the usage of different channels. Howcroft, Hamilton, & Hewer (2002), found that the

most important factors encouraging consumers to use online banking are lower fees followed

by reducing paper work and human error, which subsequently minimize disputes as observed

Kiang, Raghu, & Hueu-Min Shang (2000).

Byers and Lederer, (2001) concluded that it was changing consumer attitudes rather

than bank cost structures that determines the changes in distribution channels; they added that

virtual banks can only be profitable when the segment that prefers electronic media is

approximately twice the size of the segment preferring street banks. Convenience of conducting

banking outside the branch official opening hours has been found significant in cases of

adoption. Banks provide customers convenient, inexpensive access to the bank 24 hours a day

and seven days a week. Moutinho et al., (1997) pointed out that each ATM could carry out the

same, essential routine, transactions as do human tellers in branch offices, but at half the cost

and with a four-to-one advantage in productivity. Agboola (2006) observed that some payments

are now being automated and absolute volume of cash transactions have declined under the

impact of electronic transaction brought about by the adoption of IT to the payment system

especially in the developed countries. Emmanuel and Sife (2008) observed that positive effects

of IT has continually been noted in business, production, education, politics, governance,

culture and other aspect of human life. This view is corroborated by Agboola (2006) and Ayo

22
(2006) that the growing rate of ICT particularly the internet has influenced at an exponential

rate, on line interaction and communication among the generality of the populace.

Highlighting the impact of IT in recent years, Rao, Metts and Mong (2003) observed

that the 1990s witness the proliferation and hyper growth of internet and internet technologies,

which together are creating a global and cost-effective platform for business to communicate

and conduct commerce. Literatures indicate the movement away from cash transactions (0via

2001, Patric Kaleem & Ahmad 2008) and in words of Agboola, (2006) the use of non-cash

payment has continued to rise with increasing value. Tellers are today equipped to issue

receipts (deposit slips) for cash deposits the service of ordering bank draft of certified cheques

made payable to third parties has also been increasingly automated (Ovia 1998;Irechukwu

2000).

A reduction in the percentage of customers visiting banks with an increase in alternative

channels of distribution will also minimize the queues in the branches as averred Thornton and

White, (2001). Increased availability and accessibility of more self-service distribution

channels helps bank administration in reducing the expensive branch network and its associate

staff overheads. Bank employees and office space that are released in this way may be used for

some other profitable ventures (Birch and Young, 1997). Yakhlef (2001) pointed out that banks

are responding to the internet differently, and that those which see the internet as a complement

and substitute to traditional channels achieved better communication and interactivity with

customers. Robinson (2000) argued that the online banking extends the relationship with the

customers through providing financial services right into the home or office of customers. The

banks may also enjoy the benefits in terms of increased customers loyalty and satisfaction

(Oumlil and Williams, 2000). However, Nancy, Lockett, Winklhofer, and Christine (2001),

viewed the same situation differently and argued that customers like to interact with humans

rather than machines. They found more possibilities for asking questions and believe that bank

23
clerks are less prone to errors. It is thus essential that any face-to-face transactions are carried

out efficiently and courteously. This increases the possibility of selling the customer another

service that they need and also promotes a good image and enhances customer loyalty

(Moutinho et al., (1997).

2.1.4 Risks Associated with Electronic Banking

Although, electronic banking provides many opportunities for the banks, it is also the

case that the current banking services provided through Internet are limited due to security

concerns, complexity and technological problems (Sathye, 1999: Mols, 1999) Hewer and

Howcroft (1999) used the term trust to describe a measure of risk. Suganthi et al., (2001)

viewed risk in the context of security concerns and risk in the context of trust in one’s bank.

Finally, a number of studies found trust and perceived risks have a significant positive influence

on commitment (Bhattacherjee, 2002; Mukherjee and Nath, 2003) and ultimately leads towards

overall satisfaction (Rexha et al., 2003). Reputation of a service provider is another important

factor affecting trust. Doney and Cannon (1997) defined reputation as the extent to which

customers believe a supplier or service provider is honest and concerned about its customers.

Tyler and Stanley (1999) argued that banks can build close and long lasting

relationships with customers only if trust, commitment, honesty and cooperation is developed

between them. Nancy et al.’s (2001) study found that customers’ complain about computer

logon times which are usually longer than making a telephone call. In addition, respondents

felt that they have to check and recheck the forms filled in online, as they are worried about

making mistakes. Frequent slow response time and delay of service delivery causes customers

to be unsure that the transaction has been completed (Jun and Cai, 2001). Min and Galle (1999)

found the disruption of information access to be a common factor related to unwillingness to

use Internet channels for commerce. Liao and Cheung (2002) found that individual

expectations regarding accuracy, security, transaction speed, user friendliness, user

24
involvement and convenience are the most important attributes in the perceived usefulness of

internet-based e-retail banking.

Lack of specific laws to govern internet banking is another important concern

for both the bankers and the customers. This relates to issues such as unfair and deceptive trade

practice by the supplier and unauthorized access by hackers. Larpsiri et al., (2002) argued that

it is not clear whether electronic documents and records are acceptable as sufficient evidence

of transactions. They also pointed out that the jurisdiction of the courts and dispute resolution

procedures in the case of using the Internet for commercial purposes are important concerns.

Disputes can arise from many sources. For instance, websites are not a branch of the bank. It

is difficult for the court to define the location of the branch and decide whether they have

jurisdiction (Rotchanakitumnuai and Speece, 2003). Other risks associated to electronic

banking are job losses, lack of opportunities to socialize and the development of a lazy society

(Black at al., 2001).

2.1.5 Historical Development of Banking in Nigeria

 Free Banking Era (1892)

Banking in Nigeria can be traced back to 1892 with the entrance of African Banking

Corporation. Okaro and Onyekwelu (2003) posit that the operations and assets of the African

banking Corporation is later taken over in 1894 by the Bank for British West Africa (BBWA)

now First Bank Of Nigeria. During this era, two other expatriate banks are established namely;

the British and French Bank of 1948, (now United Bank For Africa Plc) and the Barclays Bank

Dominion, Colonial and overseas (now Union Bank of Nigeria Plc.) Many of the indigenous

banks established during this period failed. The only surviving one till today is Agbomagbe

Bank (now Wema Bank Plc) established in 1945.

25
  Pre- central Banking Era (1952 - 1959)

This period is characterized by the coming into effect of the 1951 banking ordinance

and last until 1959. The ordinance for the time defines banks and banking business, restricts

the establishment of banks and the practice of banking to companies holding valid and dully

issued licenses. A minimum paid up capital is also stipulated for both local and foreign banks.

They fluctuate when the ordinance become fully operational in 1955. It is discovered that it

does not assist under capitalized banks and is incapable of developing the banking system nor

preventing fraudulent practices, hence the clamour for the introduction of a central bank. Such

a bank should have powers to regulate commercial banks in their activities.

Era of Banking Legislation (1959 - 1970): Nzotta (2004) opined that the establishment of the

central bank of Nigeria in 1959 gave impetus to the era of banking legislation. This

establishment led to increased banking supervision and control, and substantially curtailed the

mal-practises prevalent in the system hitherto. Subsequent amendments of the CBN Act of

1959, tightened the grip of the central bank over the commercial banking system. In 1969, the

banking law was promulgated which formed the foundation of the regulation and supervision

of the banking industry. The Act gave CBN power to regulate all aspects of the banking

industry especially the aspect of capitalization, reporting and liquidity considerations, lending

limits and reserves etc.

 Era of Indigenization (1970 - 1976)

According to Lamido (2009), the period since 1970 marks a new and fourth phase in

commercial banking evolution in Nigeria, which terminated in 1976. The key features of this

period included the socialization of the banking industry in Nigeria, which saw the federal

government and the public part-owning shares of expatriate banks to bring public indigenous

ownership to 60% of the banks shareholding in line with the indigenous enterprises promotion

Act 1972 as amended in 1977. During this period, the federal government established wholly

26
owned banks to accelerate economic developments in areas of mortgage acquisition,

agriculture, and small and medium scale industries etc. These gave birth to the Federal

Mortgage Bank Ltd, Nigerian Agricultural and Cooperative Bank, Nigerian Bank for

commerce and Industry respectively etc. The state governments were not left out as they

incorporated state development finance companies. Lamido further noted that this phase saw

the establishment of the financial system review committee, which report altered the face of

financial intermediation in Nigeria.

 The Era of Banking Distress (1992 - Date)

Balogun (2007), noted with displeasure that this era saw the emergence of illiquid and

terminally distressed banks in the system. The major cause of this was the high level of

nonperforming credits of the banks, the insider abuses and high level of fraud in the system

etc. The level of financial accommodation to banks by the regulatory bodies increased

generally. The regulatory authorities increasingly adopted holding actions as a management

option for distressed banks while others included mergers and acquisitions, revocation of

banking licenses in 1992, 1994 and 1998. Efforts were also made to reduce the level of non-

performing credits, bad lending’s, fraud and insider abuses in the banking system through

effective use of Nigerian Deposit Insurance Company and the Central Bank of Nigeria

surveillance departments.

2.1.6 Information Technology and Banks Performance

There is no doubt that commercial banks play an important role in the economic

development of any nation. The need for efficiency and effectiveness in the performances of

the banks as leading players in the financial services that the commercial banks provide a nation

cannot be overemphasized. Recent advances in the technological world giving birth to the

emergence of information and communication technology have led to remarkable changes in

the ways businesses are running in contemporary times. There are various literatures that

27
approve positive impacts of information technology on bank’s performance. But, according to

study conducted by Sullivan (2000) in Kansas USA, there is no systematic evidence that multi-

channel banks in the 10th Federal Reserve District were either helped or harmed by having

transactional web sites. These findings were among the previous findings of Sathye (2005), for

the credit unions in Australian banks for the period of 1997 to 2001, that shows electronic

banking has not proved to be yard stick for performance enhancing tool.

According to Haq (2005) banks’ existence depend on their ability to achieve economies

of scale in minimizing asymmetry of information between savers and borrowers. Today, one

of the major challenges facing the banking industry is how IT has helped banks to sustain the

economies of scale whilst shifting from bricks and mortar banking to online banking. As stated

by DeYung et al. (2005), the internet delivery channel may generate scale economies in excess

of those available to traditional distribution channels. In this context, DeYoung et al. (2005)

refer to the internet banking as a process of innovation that functions mainly as a substitute for

physical branches for delivering banking services.

According to Hernando et al., (2007), the adoption of internet as a delivery channel

involves a gradual reduction in overhead expenses. This effect is statistically significant after

one and half year of adoption. The cost reduction translates in to an improvement in banks

profitability, which becomes significant in terms of return on assets (ROA) and after three years

in terms of return on equity (ROE). The study was conducted by Eyadat et al., (2005), and

evaluated the effects of ICT on gains efficiency and banks cost in American banks between

1992 and 2000. The study showed a positive relationship between level of IT implementation

and profitability of the bank’s assets and costs reduction. However, efficiency has increased

for all American banks but the cost efficiency was less than the benefit. This point reflects the

fact that introduction of new banking services lead to increase revenues on the other hand offers

new and higher expenses.

28
2.2 Review of Theoretical Literature

Electronic commerce can be considered as a package of innovations (Zwass, 2003;

Molla, 2006); various authors have applied innovation theory to study adoption of IT

innovations (Kamal, 2006; Aguila-Obra & Padilla-Melendez, 2006; Kuan & Chau, 2001)16.

2.2.1 Innovation diffusion theory.

Rogers (1983) defined organizational innovation as the development and

implementation of ideas, systems, products, or technologies that are new to the organization

adopting it. The adoption of innovations is a process that includes the generation, development,

and implementation of new ideas or behaviors (Rogers, 1983). The innovation does not

necessarily have to be new in terms of discovery or invention; it only has to be perceived as

new by the organization (Zaltman, Duncan & Holbek, 1973). Thus, innovation diffusion theory

is well suited for researching the adoption of ecommerce in developing countries. Various

studies have classified the factors influencing innovation adoption (Kim and Galliers, 2004).

Rogers (1983) grouped the factors under characteristics of innovation. Tornatzky and Fleischer

(1990) identified three different categories of factors – organizational, technological, and

environmental factors – that influence the technological innovation decision. Kimberly and

Evanisko (1981) identified three groups of predictors of innovation: characteristics of

organizational leaders, characteristics of organization, and characteristics of environment. In

summary, four categories of factors can be found in technological innovation literature: (1)

Managerial; (2) Organizational; (3) Technological; and (4) Environmental. Researchers have

identified the following common.

29
2.2.2 Technology Acceptance Theory

The most cited theory was the Technology Acceptance Model (TAM). Davis (1989)

presented a theoretical model aiming to predict and explain ICT usage behaviour, that is, what

causes potential adopters to accept or reject the use of information technology. Theoretically,

TAM is based on the Theory of Reasoned Action (TRA). In TAM, two theoretical constructs,

perceived usefulness and perceived ease of use, are the fundamental determinants of system

use, and predict attitudes toward the use of the system, that is, the user’s willingness to use the

system. Perceived usefulness refers to “the degree to which a person believes that using a

particular system would enhance his or her job performance”, and perceived ease of use refers

to “the degree to which a person believes that using a particular system would be free of effort”

(Davis, 1989).

In these articles TAM was used in three different ways, namely to compare different

adoption models, develop extensions of TAM, or replicate the model. For example, Davis et

al. (1989) empirically compared the ability of TRA and TAM to predict and explain the

acceptance and rejection by users of the voluntary usage of computer-based technology;

Venkatesh and Davis (2000) developed and tested a theoretical extension of TAM, referred to

as TAM2, which explains perceived usefulness and usage intentions with the help of social

influence and cognitive instrumental processes, and Adams et al. (1992) replicated Davis’

(1989) study.

2.3 Review of Empirical Literature

Today’s business environment is very dynamic and undergoes rapid changes as a result

of technological innovation, increased awareness and demands from customers. Business

organisations, especially the banking industry of the 21st century operates in a complex and

competitive environment characterized by these changing conditions and highly unpredictable

economic climate. Information Technology (IT) is at the centre of this global change curve.

30
Laudon and Laudon, (1991) contend that managers cannot ignore mandate, and transaction

processing and recording. Information Technology has provided self-service facilities

(automated customer service machines) from where prospective customers can complete their

account opening documents direct online. It assists customers to validate their account numbers

and receive instruction on when and how to receive their chequebooks, credit and debit cards.

IT deals with the Physical devices and software that link various computer hardware

components and transfer data from one physical location to another (Laudon and Laudon;

2001). Confidentiality of consumer data is another important concern in the adoption of online

banking (Gerrard and Cunningham, 2003). Customers fear that someone will have unlimited

access to their personal financial information. Also, White and Nteli (2004) conducted a study

that focused on why the increase in Internet users in the UK had not been paralleled by

increases in internet usage for banking purposes. Their results showed that customers still have

concerns with the security and the safety aspects of the internet.

Berger et al., (2003) examined technological progress and its effects in the banking

industry using data collected from the banking industry in the United States over the period

1967 to 2001. The author employed multiple regression model, and the findings revealed that

improvements in costs of lending capacity due to improvements in “back – office”

technologies, as well as consumer benefits from improved “front office” technologies suggests

significant overall productivity increases in terms of improved quality and variety of banking

services.

Malhotra and Singh (2009) examined the implications of internet banking on the Indian

banking industry using information drawn from a survey of 85 scheduled commercial banks’

websites, during the period June 2007, by applying multiple linear regression models. Results

revealed however, that profitability in the banking industry while offering internet banking

does not have any significant association with their overall performance.

31
 Dos Santos et. al., (1993) empirically studied the effects of early adoption of Automated

Teller Machine (ATM) technology by banks on employee efficiency using a sample of 3,838

banks covering the period 1970 to 1979 by applying multiple regression models. The finding

revealed that the introduction of ATM technology improves the bank's performance. Akram et.

al., (2010) examined the effects of information technology (IT) on Jordanian banking industry

for the period of 2003 – 2007. The authors used a sample of 15 banks to analyse the data

obtained by applying multiple regression model and diagnostics test to check the normality and

multicollinearity problems. The results of the study indicated that there is a significant impact

on the use of IT in Jordanian banks on the market value added (MVA) earnings per share (EPS),

Return on Assets (ROA) and Net Profit Margin (NPM).

The opportunity to conduct a trial may help to convince reluctant customers as

suggested Black, Lockett, Winklhofer, & Ennew, (2001) and as such Boon and Ming (2003)

concluded that banks in Malaysia should concentrate on enhancing their operation and product

management through a mixture of branch banking and e-channels, like ATMs, phone banking

and PC banking. IT products in use in the banking industry include Automated Teller Machine,

Smart Cards, Telephone Banking, MICR, Electronic Funds Transfer, Electronic Data

Interchange, Electronic Home and Office Banking. Several authors have conducted

investigation on the impact of IT on the banking sector of the Nigeria economy. Agboola et al

(2002) discussed the dimensions in which automation in the banking industry manifest in

Nigeria. They include: (i) Bankers Automated Clearing Services: This involves the use of

Magnetic Ink Character Reader (MICR) for cheque processing. It is capable of encoding,

reading and sorting cheques. (ii) Automated Payment Systems: Devices used here include

Automatic Teller Machine (ATM), Plastic Cards and Electronic Funds Transfer. (iii)

Automated Delivery Channels: These include interactive television and the Internet. Agboola

(2001) studied the impact of computer automation on the banking services in Lagos and

32
discovered that electronic banking has tremendously improved the services of some banks to

their customers in Lagos. The study was however restricted to the commercial nerve centre of

Nigeria and concentrated on only six banks. Agboola made a comparative analysis between the

old and new generation banks and discovered variation in the rate of adoption of the automated

devices.

Kaleem and Ahmad (2008) investigated bank employees’ perceptions of the potential

benefits and risks associated with electronic banking in Pakistan. Primary sources were used

to collect the data and were analysed via frequency analysis and mean score analysis. The

results suggest that bankers in Pakistan perceive electronic banking as tool for minimizing

inconvenience, reducing transaction costs and saving time. Polatoglu and Ekin (2001) found

that low levels of email usage and a preference for doing over-the-counter transactions at bank

branches are the main reasons for not using e-banking in Turkey.

Aragba-Akpore (1998) wrote on the application of information technology in Nigerian

banks and pointed out that IT is becoming the backbone of banks’ services regeneration in

Nigeria. He cited the Diamond Integrated Banking Services (DIBS) of Diamond Bank Limited

and Electronic Smart Card Account (ESCA) of All States Bank Limited as efforts geared

towards creating sophistication in the banking sector. Ovia (2000) discovered that banking in

Nigeria has increasingly depended on the deployment of Information Technology and that the

IT budget for banking is by far larger than that of any other industry in Nigeria. He contended

that On-line system has facilitated Internet banking in Nigeria as evidenced in some of them

launching websites. He found also that banks now offer customers the flexibility of operating

an account in any branch irrespective of which branch the account is domiciled.

Oladejo & Dada (2008) investigated the impact of information technology on insurance

firm services in Nigeria. Using non-parametric statistics (Chi-square) in testing the hypothesis

formulated, the study concludes that the recent observed upsurge effectiveness and efficiency

33
in the insurance industry in Nigeria is attributable to their high investment in information

technology. Gerrard and Cunningham (2003) found a positive correlation between convenience

and online banking and remarked that a primary benefit for the bank is cost saving and for the

consumers a primary benefits is convenience. Multi-functionality of an IT based services may

be another feature that satisfies customer needs (Gerson, 1998). Researchers like Parthasamthy

and Sethi (1993), Kelly(1994), Earls et. al. (1996), O’Dell and Elliot (1999) etc. have

investigated the impact of IT on quantitative performance variable i.e. incomes/profits of the

companies and found positive impact. Whereas, Franklin (1997), Olalla (2000), Schmid et al

(2001), Zee and Han (2002) etc., have seen the increase/decrease in different qualitative

performance indicators i.e., customer satisfaction, company image, job interest of employees,

stake holders confidence, interoffice link etc. after implementation of IT and have concluded

that IT ultimately has positive impact. This study also measured the increase/ decrease in

organizational performance based upon qualitative indicators, mentioned above, for Pakistani

companies operating in banking and manufacturing sectors after implementation of IT.

Furthermore, Moutinho and Phillips (2002) found that Scottish bank managers considered

efficiency and enhancement of customer service to be two perceived advantages of Internet

banking.

Ayo, Ekong, Fatudimu, and Adebiyi (2007) conducted an investigation on the level of

adoption of IT in the Nigerian banking sector using SWOT analysis. It was found that all banks

in Nigeria offer e-banking services and about 52% of them offer some forms of other on line

banking services. They agreed with fact that Nigeria was the fastest growing telecoms nation

in Africa and the third of the world. The country had experienced a phenomenal growth from

a tele-dencity of 0.49 in 2000 to 25.22 in 2007. This trend had brought about a monumental

development in the major sector of the economy, such as banking, telecoms and commerce in

general. They concluded that all the 25 banks in Nigeria engaged the use of IT as a platform

34
for effective and efficient delivery of banking services such as electronic payment cards with

internet banking and mobile banking services gradually being introduced. Woherem (1997)

discovered that Nigeria banks since 1980s have performed better in their investment profile

and use of IT systems, than the rest of industrial sector of the economy. An analysis of the

study carried out by African Development Consulting Group Ltd. (ADCG) on IT diffusion in

Nigeria shows that banks have invested more on IT, have more IT personnel, more installed

base for PCs, LANs, and WANs and a better linkage to the internet than other sectors of the

Nigerian economy.

2.4 Gap in Literature

In summary, all the literature review regarding the impact of IT on commercial banks

performance is pointing to the fact that IT has impact on performance of commercial banks.

To the knowledge of the researcher there is no empirical studies done regarding the impact IT

has on Wema Bank Plc., as a single bank in Nigeria. Since IT in banking industry in Nigeria is

at its infant stage there is no ample empirical data on the relationship between IT and Wema

Bank Plc.’s performance in Nigeria. In general, this study is different from previous works

done by others; specifically examined challenges and risks confronting Nigerian banking sector

has thus become imperative for this current study; and benefits of information technology on

Wema Bank Plc., performance.

35
 2.5 Conceptual Framework

Source: Adopted from Porter (1985).

Conceptual Model for Information Technology and bank' performance.

36
 CHAPTER THREE

METHODOLOGY

3.1 Study Area

The main purpose of this study is to investigate the impact of information technology

(IT) on banks’ performance in Nigeria. The study area of this study is commercial banks in

Nigeria.

3.2 Research Design.

Research design is a plan specifying the methods and procedures for collecting and

analysing the required data. The choice of research design depends on objectives that the

researchers want to achieve (John, 2007). Since this study is designed to examine the impact

of IT on banks performance, a logical reasoning either deductive or inductive is required.

Deductive reasoning starts from laws or principles and generalizes to particular instance where

as inductive reasoning starts from observed data and develops generalization from facts to

theory. Besides, deductive reasoning is applicable for quantitative research whereas inductive

reasoning is for qualitative research.

As noted by Kothari (2004), explanatory research design examines the cause and effect

relationships between dependent variables and independent variables. Therefore, since this

study examined the cause and effect relationships between information and technology and

performance of banks, it is explanatory research. According to Creswell (2003), the objective

to be achieved in the study is a base for determining the research approach for the study. In

case, if the problem identified is factors affecting the outcome having numeric values, it is

quantitative research. Therefore, the researcher employed quantitative research approach to see

the regression result analysis with respective empirical literatures on the impact of IT on banks

performance. Thus, the researcher used data from 2012 to 2016 of Wema Bank Plc.

37
3.3 sources of Data

The research has relied on both primary and secondary sources of data. Primary data

was sourced from questionnaire. The required secondary data was collected from published

documents maintained by the commercial bank as obtained from annual report of Wema Bank

Plc., from 2012 to 2016. Secondary source of data retrieved and encoded information which

included newspapers, magazines, journals, textbooks and seminar papers.

3.4 Population, Sample Size and Sampling Procedure

Population is the list of elements from which the sample may be drawn (John, 2007).

Target population is all banks that engage in commercial activities and licensed by Central

Bank of Nigeria. The bank has been purposively selected based on data availability from 2012

to 2016, and the consistency of their identities between the periods. The study covers a period

of five years from 2002-2016.

Sample design deals with sample frame, sample size and sampling technique. Sampling

is a technique of selecting a suitable sample for the purpose of determining parameters of the

whole population. A sample is drawn to overcome the constraints of covering the entire

population with the intent of generalizing the findings to the entire population. As noted by

Kothari (2004), good sample design must be viable in the context of time and funds available

for the research study. Besides, judgmental sampling offers the researcher deliberately select

items for the sample concerning the choice of items as supreme based on the selection criteria

set by the researcher. According to Asika (2006), it is practically impossible to take a complete

and comprehensive study of the entire population going by nature and pattern of distribution.

Hence, a representative sample is used from the population of the study.

A non-probability sampling method is applied in some circumstances where it is not

feasible or practical to conduct random sampling. Therefore, in this research, a non-probability

38
sampling method (purposive sampling technique) has been used. The use of purposive

sampling technique is relied upon in order to solicit information that is available on the

variables of interest in this study, which is purposefully designed in the model.

Accordingly, this study employed purposive sampling technique to select the required

sample of banks from commercial banks in Nigeria. The selection criteria set by the researcher

has been Wema Bank Plc., because it constitutes major market share, one of the pioneering

banks in implementing information technology solutions and being the only indigenous bank

in the Nigerian banking sub-sector. Therefore, the sample size adopted for the research work

is Wema Bank Plc., in Akure.

3.5 Measurement of Variables

S/No Variables Measurement Expected

impact

Banks Performance - Return on assets (ROA) is a financial

ratio that shows the percentage of profit a

Dependent variable
company earns in relation to its overall

resources. It is measured in terms of net

profit to total assets.

Independent Variables

1 POS Number points of sale +

2 ATMs Number of Automated Teller Machine +/-

3 Bank branches Number of branches +

39
3.6 Model Specification

The model specification in this study is presented to determine the impact of

information technology on banks performance in Nigeria. The simple regression analysis is

adopted to determine the impact of information technology on banks performance in Nigeria.

Ordinary Least Square (OLS) is a statistical techniques that allow us to predict a score

of one variable on the basis of their scores on other variable(s). The main purpose of

simple regression is to learn more about the relationship between independent or

predictor variable and a dependent or criterion variable. Also, POS, ATM and number

of branches are regressed on the set of explanatory variables that predict bank

performance (ROA) To generalize the model for the study, regression function is stated

thus;

Yi = a + b1X1i + b2X2i + b3X3i + µi ----------------------------------. (1)

Where

Yi = the ith observation on the dependent variable,

a, b1 b2 b3 & b4 = the intercept term and slope respectively, whose values are unknown and are

to be estimated.

X1i = explanatory variable

X1i = 1, for all ‘i’

µi = the corresponding ith value of the disturbance or error term

‘i’, = the ith observation.

Thus, this study is based on the conceptual model adopted from Muhammad A. et al

(2013). Accordingly, the estimated models used in this study were modified and

presented as follow:

40
Bank Performance = a + POSX1i + ATMX2i + BRANX3i + µi -------------------. (2)

3.7 Data Analysis Technique

Creswell (2005) defined data analysis as a process which involves drawing

conclusions and explaining findings in words about a study. Simple regression analysis

has been conducted using SPSS packages to determine the exact nature of the

relationship that exist between IT, ATM and POS. Prior to the estimation of the

regression line, descriptive analysis was used to describe the behavior of the individual

variables over the period under review. The descriptive analysis was also inculcated a

brief assessment of the general external and internal variables in the country over the

period.

41
 CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

4.1. Introduction

This study aimed to investigate the impact of information technology (IT) on banks’

performance in Nigeria with a case study of Wema Bank Plc, Akure. In this chapter, the data

was presented and analysed such as summary statistics results of key variables; correlation and

regression results among variables and interpretation was made based on the results. This

chapter also presented and interpreted the findings obtained from the field on the challenges

confronted by IT with concern with the bank.

4.2. Summary Statistics

In this section, the summary statistics of each variables of the study have been

discussed. The variables included the dependent and independent variables. The dependent

variable used in this study in order to measure the bank performance was Return on Asset

(ROA) while the independent variables were bank branches, ATM and POS. Accordingly, the

summary statistics for all variables were presented in table 4.1. The descriptive table included

mean, maximum, minimum, standard deviation and observations of both of dependent and

independent variables of the study. Basically, a small standard deviation means that the values

in a statistical data set were close to the mean of the data set, on average, a large standard

deviation means that the values in the data were far away from the mean. The standard

deviation measured how concentrated the data were around the mean; the more concentrated,

the smaller the standard deviation. The general rule stated that the higher value of standard

deviation implied greater spread of data, smaller the standard deviation showed the data was

concentrated around mean.

42
 The table indicated the mean, maximum, minimum and standard deviation values of

variables. A dataset of 30 observations provided the basis for descriptive analysis. This study

had used three (3) variables for the analysis and interpretation, including one (1) dependent

variable, ROA.

As shown in the table 4.1 below, the mean value of bank ROA was around 11.75 for

sampled bank in Akure, Nigeria. It can be noticed that the bank ROA growth fluctuates between

12.3 and 19.5. This means that Wema bank has achieved 15.9 average return on asset from IT

for the period of 2012-2016. The standard deviation of the bank in terms of bank profit growth

was 4.37; this confirmed that there were lower variations of performance growth in the

commercial bank during the study period.

The mean value of POS 8.725 units; the standard deviation was 3.2, while 18 and 11 observed

as maximum and minimum values, respectively, exhibits higher dispersion larger than its mean

value. As shown in the result, there were higher differences in the bank regarding POS. This

implied that the effort of the bank to invest in POS.

The mean value of the bank ATM investment over the period under study was 4.113

with the maximum and minimum values of 34 and 25 respectively. There was a variation in

ATM towards its mean value over the periods under study with the value of standard deviation

1.24. This implied that the bank has invested more on ATM so as to be able to meet the needs

of customers to withdraw cash and carry out other financial services during and after working

hours as well as during weekends and holiday periods.

The mean value of the bank branches was 9.6 with the maximum and minimum values

of 21 and 14 respectively. There was a variation in bank branches towards its mean value over

the periods considering the value of standard deviation 3.54. This implied that the bank has

43
increased the number of branches in the study area to be able to meet the needs of customer

during the period under review.

Table 4.1: Summary Statistics – Dependent and Independent Variables

ROA ATM POS Bank

Branches

Mean 11.745810 4.11328 8.72474 9.61494

Median 11.2500 16.0000 13.0000 5.6891

Maximum 19.5000 35.0000 18.0000 21.0000

Minimum

12.2500 24.0000 11.0000 14.0000

Std. Dev.

4.3700 1.2400 3.2000 3.5404

Skewness

-0.262434 0.076004 1.994295 1.901860

Kurtosis

2.304664 1.005777 6.447008 5.818045

Jarque- 2.498301 3.16678 1.47775 3.76517

Bera

Probability 0.286748 0.001383 0.000000 0.000000

Sum 93.250 555.00 70934. 966902

Sum Sq. Dev. 37.7326 1554.43 6.71E+11 3.64E+14

Observations 30 30 30 30

Source: E-Views 9.5 Version output from financial statement of sampled bank
44
4.3 Correlation Analysis

Correlation is a way to index the degree to which two or more variables associated or

related to each other. The sample size was the key element to determine whether or not the

correlation coefficient was different from zero or statistically significant. The values of the

correlation coefficient were always between -1 and +1. A correlation coefficient of +1 indicated

that the two variables were perfectly related in a positive linear sense; while a correlation

coefficient of -1 indicated that two variables were perfectly related in a negative linear sense.

A correlation coefficient of 0, on the other hand indicated that there was no linear relationship

between two variables (Gujarati, 2004). The correlation matrix in table 4.2 below showed the

likely relationship among variables in the study. The P-value was listed in parenthesis that

showed the correlation coefficient between the dependent variables and independent variables.

Table 4.2: Correlation Matrix

ROA ATM POS BANK

BRANCHES

ROA 1.0000

ATM 0.6181* 1.0000

(0.0000)

POS 0.5392** 0.4108** 1.0000

(0.0374) (0.0114)

BANK BRANCHES 0.6952** 0.5103** 0.6303** 1.0000

(0.0298) (0.0093) (0.0422)

45
Source: Author’s Compilation from E-Views 9.5

The level of significance is denoted as **P < 0.05 and *P < 0.01. Figure in the parentheses were (P-

values)

The correlation result in Table 4.2 above showed that ATM, POS and bank branches

were positively correlated to the bank ROA. The correlation matrix in Table 4.2 produced

statistical evidence that POS has significant and positive linear relationship with ROA at 0.54

(p˂0.05) and ATM at 0.4108 (p˂0.05). While ATM was positively correlated with ROA at

0.62 (p˂0.01). Also the bank branches significantly correlated with ROA, ATM and POS at

0.695, 0.5103 and 0.6303 respectively. All were statistically significant at 5% (p˂0.05). In

general, the result had shown the evidence of linear relationship between variables, and

movements in variables were on average related to an extent given by the correlation

coefficient.

4.4 Regression Result

The regression model with the inclusion of the dependent variable were used to find the

impact of Information Technology (IT) on the performance of banks in Nigeria. A regression

model was created by adding log to the dependent and independent variables in the equation.

The regression coefficients of the independent and dependent variables showed both magnitude

and the direction of impact. Under the following regression outputs, the coefficient values may

be negative or positive; and further showed the coefficient values of each explanatory

variable’s influence on the dependent variable. P-value indicated at what percentage or

precession level of each variable was statistically significant. R2 values showed the explanatory

power of the model and in this study adjusted R2 value which took into account the loss of

degree of freedom associated with adding extra explanatory variables were inferred to see the

explanatory powers of the models.

46
 Therefore, the ROA of the bank, measured through the bank’s ATM, POS and bank

branches could be shown in table 4.3 below. Furthermore, the estimation results reported in

Table 4.3 below showed the R-squared value of 0.056785. This means that 57% of the variation

in the bank performance was explained by the explanatory variables in the model in the study;

while the adjusted R-squared value of 0.053460 was an indication that the model was a good

fit. This means 53% of variations in the bank performance were explained by adding extra

independent variable in the model. However, the remaining 47% changes in bank performance

were caused by other factors that were not included in the model. Furthermore the F-statistic

was 1.457502 and Durbin Watson (DW) value was 1.360235. The DW was close to greater

than 1 and close to 2. This showed that there was no auto-correlation. The coefficient values

of ATM, POS and bank branches were all positive; 0.261418 (p˂0.01), 0.413115 (p˂0.01) and

0.382763 (p˂0.01) respectively. Summarily, all the variables were statistically significant at

1%. Evidence from the table 4.3 showed that availability of ATM, POS and establishing more

bank branches were part of factors that explained the Commercial Bank’ performance in

Nigeria, having adopting Wema Bank Plc, Akure as a case study.

Table 4.3: Regression Result

Dependent Variable: D(ROA?)

Method: Pooled Least Squares

Date: 06/18/18 Time: 20:44

Sample (adjusted): 2012 2016

Included observations: 9 after adjustments

Cross-sections included: 8

Total panel (balanced) observations: 30

47
 Variable Coefficient Std. Error t-Statistic Prob.

C 0.612711. 4.970568 -0.466382 0.1712

LOG(ATM?) 0.261418 0.025739 -0.419416 0.0016

LOG(POS?) 0.413115 0.727363 0.248380 0.0027

LOG(Bank

Branches?) 0.382763 0.653776 0.585465 0.0006

R-squared 0.567285 Mean dependent var 20655.58

Adjusted R-squared 0.538460 S.D. dependent var 167636.2

S.E. of regression 169591.2 Akaike info criterion 26.97412

Sum squared resid 1.96E+12 Schwarz criterion 27.10060

Log likelihood -967.0684 Hannan-Quinn criter. 27.02447

F-statistic 1.457502 Durbin-Watson stat 1.360235

Prob(F-statistic) 0.012875

Source: E-Views 9.5 Version

48
4.5 Administered Questionnaire

This section explained the analysis of respondent’s demographic and data relating to

the main variables of study obtained from the copies of questionnaire administered. To examine

objective two on investigating the challenges confronted by bank on IT. Thirty (30) copies of

the questionnaire were administered to participants of the study; twenty-two (22) copies were

properly filled and returned on schedule giving a 73.3% response rate. Data analysis was

therefore based on the number of returned copies of questionnaire i.e. 22 copies.

4.5.1 Section A: Demographic Data of the Respondents

The table 4.5.1.1 below showed the distribution of respondents according to gender. 15

(68.2%) of the respondents were male, while 7 (31.8%) were female. This indicated that more

male were willing to respond to the questionnaire than the female counterpart. It also implied

that Wema Bank Plc, Akure employed more male than female staff in her workforce.

Table 4.5.1.1: Gender of Respondents

Respondents gender

Frequency Percent Valid Percent Cumulative

Percent

Male 15 68.2 68.2 68.2

Valid Female 7 31.8 31.8 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

From table 4.5.1.2 below, 7 (31.8%) of the respondents were below the age of 21years

old, 8 (36.4%) were between 21-30 years old, 4 (18.2%) were between the ages of 31-40 years

49
and 3 (13.6%) were 41 years and above. This implied that majority of the respondents were

matured enough to express meaningful opinion on the subject matter of the study.

Table 4.5.1.2: Age of Respondents

Age of respondents

Frequency Percent Valid Percent Cumulative

Percent

Below 21 years 7 31.8 31.8 31.8

21-30 years 8 36.4 36.4 68.2

31 -40 years 4 18.2 18.2 86.4

Valid
41 years and 3 13.6 13.6 100.0

above

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

In table 4.5.1.3 below, 9 (40.9%) of the total number of respondents’ possessed

HND/B.Sc. certificates, 3 (13.6%) possessed OND/NCE certificates, 5 (22.7%) possessed

WAEC/SSCE certificates, while 5 (22.7%) had professional certificates. This indicated that

most of the respondents were well educated to be able to provide informed opinion on the

study.

50
Table 4.5.1.3: Educational Qualification of Respondents

Respondents educational status

Frequency Percent Valid Percent Cumulative

Percent

WAEC/SSCE 5 22.7 22.7 22.7

HND/BSC 9 40.9 40.9 63.6

Valid OND/NCE 3 13.6 13.6 77.3

Professional 5 22.7 22.7 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.4 below showed that 8 (36.4%) of the total numbers of respondents were

single, 13 (59.1%) of the respondents were married while the remaining 1 (4.5%) of the

respondents were divorced.

Table 4.5.1.4: Marital Status of Respondents

Marital Status

Frequency Percent Valid Percent Cumulative

Percent

single 8 36.4 36.4 36.4

Married 13 59.1 59.1 95.5

Valid
Divorced 1 4.5 4.5 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

51
 Table 4.5.1.5 below showed the respondents’ working experience. 7 (31.8%) of the

respondents have had less than 1 year and between 2 to 6 years of job experience while 4

(18.2%) of the respondents had worked for 7 to 11 years as well as 12 years and above.

Table 4.5.1.5: Working Experience of Respondents

Working Experience

Frequency Percent Valid Percent Cumulative

Percent

Less than1 year 7 31.8 31.8 31.8

2-6 years 7 31.8 31.8 63.6

Valid 7-11 years 4 18.2 18.2 81.8

12 years and above 4 18.2 18.2 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.6 below showed the respondents’ level of management. 7 (31.8%) of the

respondents were within top level management; 10 (45.5%) of the respondents were within

middle level management while 5 (22.7%) of the respondents were within lower level

management. This summarily depicted that most of the respondents were within middle

management.

52
Table 4.5.1.6: Respondents’ Level of Management

Level of Management

Frequency Percent Valid Percent Cumulative

Percent

Top level Management 7 31.8 31.8 31.8

Middle level Management 10 45.5 45.5 54.5

Valid
Lower level Management 5 22.7 22.7 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

4.5.2 Section B: Analysis of Questionnaire Items that Related to the Research Questions

Using descriptive statistics.

Table 4.5.1.7 showed that information technology has the chance of data loss. 12

(54.5%) of the respondents strongly agreed with the opinion while 10 (45%) of other

respondents simply agreed that information technology has the chance of data loss.

Table 4.5.1.7: Information Technology has the chance of data loss

Information Technology has the chance of data loss

Frequency Percent Valid Percent Cumulative

Percent

Strongly Agree 12 54.5 54.5 54.5

Valid Agree 10 45.5 45.5 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.8 showed that information technology has the chance of fraud. The respondents

with 17 (77.3%) strongly agreed that information technology has the chance of fraud, 2 (9.1%)

53
of the respondents strongly agreed that information technology has the chance of data fraud,

while each of the respondents was undecided 1 (4.5%), disagreed 1 (4.5%) and strongly

disagreed 1 (4.5%) with the opinion.

Table 4.5.1.8: Information Technology has the chance of fraud

Information Technology has the chance of fraud

Frequency Percent Valid Percent Cumulative

Percent

Strongly Agree 17 77.3 77.3 77.3

Agree 2 9.1 9.1 86.4

Undecided 1 4.5 4.5 90.9

Valid
Disagree 1 4.5 4.5 95.5

Strongly Disagree 1 4.5 4.5 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.9 depicted that information technology lacks information security. 15 (68.2%) of

the respondents strongly agreed with the opinion, 3 (13.6%) of the respondents agreed that

information technology lacks information security, 2 (9.1%) of the respondents were

undecided, while each of the respondents simply disagreed 1 (4.5%) and strongly disagreed 1

(4.5%).

54
Table 4.4.1.9: Information Technology lacks information security

Information Technology lacks information security

Frequency Percent Valid Percent Cumulative

Percent

Strongly Agree 15 68.2 68.2 68.2

Agree 3 13.6 13.6 81.8

Undecided 2 9.1 9.1 90.9

Valid
Disagree 1 4.5 4.5 95.5

Strongly Disagree 1 4.5 4.5 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.10 depicted that information technology charges a high cost for services. 14

(63.6%) of the respondents strongly agreed with the opinion, 5 (22.7%) of the respondents

agreed that information technology charges a high cost for services, while each of the

respondents was undecided 1(4.5%), simply disagreed 1 (4.5%) and strongly disagreed 1

(4.5%).

Table 4.5.1.10: Information Technology charges a high cost for services

Information Technology charges a high cost for services

Frequency Percent Valid Percent Cumulative

Percent

Strongly agree 14 63.6 63.6 63.6

Agree 5 22.7 22.7 86.4

Undecided 1 4.5 4.5 90.9

Valid
Disagree 1 4.5 4.5 95.5

Strongly Disagree 1 4.5 4.5 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

55
Table 4.5.1.11 depicted that information technology has many legal and security issues. 9

(40.9%) of the respondents strongly agreed with the opinion, 8 (36.4%) of the respondents

agreed that information technology has many legal and security issues, 2 (9.1%) of the

respondents were both undecided and strongly disagreed with the opinion, while 1 (4.5%) of

the respondents simply disagreed.

Table 4.5.1.11: Information Technology has many legal and security issues

Information Technology has many legal and security issues

Frequency Percent Valid Percent Cumulative

Percent

Strongly agree 9 40.9 40.9 40.9

Agree 8 36.4 36.4 77.3

Undecided 2 9.1 9.1 86.4

Valid
Disagree 1 4.5 4.5 90.9

Strongly Disagree 2 9.1 9.1 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.12 depicted that majority of customers shy away from IT related banking services

due to security reasons. 14 (63.6%) of the respondents strongly agreed with the opinion, 3

(13.6%) of the respondents simply agreed that majority of customers shy away from IT related

banking services due to security reasons, while each of the respondents simply disagreed

2(9.1%) and strongly disagreed 2 (9.1%), while 1 (4.5%) of the respondents were undecided

on the opinion.

56
Table 4.5.1.12: Majority of customers shy away from IT related banking services due to

security reasons

Frequency Percent Valid Percent Cumulative

Percent

Strongly Agree 14 63.6 63.6 63.6

Agree 3 13.6 13.6 77.3

Undecided 1 4.5 4.5 81.8

Valid
Disagree 2 9.1 9.1 90.9

Strongly Disagree 2 9.1 9.1 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.13 showed that computer illiteracy is high among bank customers. 13 (59.1%) of

the respondents strongly agreed with the opinion, 3 (13.6%) of the respondents simply agreed

that computer illiteracy is high among bank customers, while each of the respondents were

undecided 2(9.1%), simply disagreed 2(9.1%) and strongly disagreed 2 (9.1%) on the opinion.

Table 4.5.1.13: Computer illiteracy is high among bank customers

Computer illiteracy is high among bank customers

Frequency Percent Valid Percent Cumulative

Percent

Strongly Agree 13 59.1 59.1 59.1

Agree 3 13.6 13.6 72.7

Undecided 2 9.1 9.1 81.8

Valid
Disagree 2 9.1 9.1 90.9

Strongly Disagree 2 9.1 9.1 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

57
Table 4.5.1.14 showed that poor or lack of technological infrastructure in rural areas. 14

(63.6%) of the respondents strongly agreed with the opinion, 2 (9.1%) of the respondents

simply agreed that poor or lack of technological infrastructure in rural areas, while 2(9.1%) of

the respondents were also undecided, simply disagreed 2(9.1%) and strongly disagreed 2

(9.1%) on the opinion.

Table 4.5.1.14: Poor or lack of technological infrastructure in rural areas

Poor or lack of technological infrastructure in rural areas

Frequency Percent Valid Percent Cumulative

Percent

Strongly agree 14 63.6 63.6 63.6

Agree 2 9.1 9.1 72.7

Undecided 2 9.1 9.1 81.8

Valid
Disagree 2 9.1 9.1 90.9

Strongly Disagree 2 9.1 9.1 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.15 depicted the shortage of money in ATM's during peak hours or weekends. 14

(63.6%) of the respondents strongly agreed with the statement, 4 (18.2%) of the respondents

simply agreed that there used to shortage of money in banks’ ATM's during peak hours or

weekends, 2 (9.1%) of the respondents strongly disagreed with the statement, but 1 (4.5%) of

the respondents each remained undecided and simply disagreed on the opinion.

58
Table 4.5.1.15: Shortage of money in ATM's during peak hours or weekends

Shortage of money in ATM's during peak hours or weekends

Frequency Percent Valid Percent Cumulative

Percent

Strongly Agree 14 63.6 63.6 63.6

Agree 4 18.2 18.2 81.8

Undecided 1 4.5 4.5 86.4

Valid
Disagree 1 4.5 4.5 90.9

Strongly Disagree 2 9.1 9.1 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

Table 4.5.1.16 showed the constant networks’ fluctuations. The respondents with 10 (45.5%)

strongly agreed that constant networks’ fluctuations affected bank performance, 4 (18.2%) of

the respondents strongly agreed that constant networks’ fluctuations, was one of the major

challenges of IT in Nigerian banks, while each of the respondents was undecided 3 (13.6%)

and disagreed 3 (13.6%), but 2 (9.1%) of the respondents strongly disagreed with the opinion.

Table 4.5.1.16: Constant networks’ fluctuations

Constant networks’ fluctuations

Frequency Percent Valid Percent Cumulative

Percent

Strongly agree 10 45.5 45.5 45.5

Agree 4 18.2 18.2 63.6

Undecided 3 13.6 13.6 77.3

Valid
Disagree 3 13.6 13.6 90.9

Strongly Disagree 2 9.1 9.1 100.0

Total 22 100.0 100.0

Source: Researcher’s Survey Field, 2019

59
4.6 Hypotheses Testing

Hypothesis I

The correlation coefficient (r) result showed an average positive relationship value of

0.5673 (57%) and statistically significant at 5%. Therefore there was a significant relationship

between Information Technology (IT) and bank performance.

Hypothesis II

The descriptive statistical results have shown that there were challenges confronting IT

oriented banks.

Hypothesis III

Coefficient of determination R2 = 0.567285 (56.7%) and adjusted R2 = 0.538460 (54%)

explained the variations in bank performance by the impact of information technology credit

which was significant and Durbin Watson (DW) has 1.360235 which was closed to 2. This

showed the absence of autocorrelation. Overall result was statistically significant at 1%.

Therefore, it could be concluded that Information Technology (IT) has improved the

performance of Wema Bank PLC.

60
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

Globally, there are indeed no doubts that majority of organizations including the banks

have taken the advantage of IT to enhance their operations. Today most of them have website

on the Internet in order to extend their services, provide executive services and promote quality

of service delivery. Driven by their ambitious aspirations to dominate the African financial

services landscape, and under the leadership of a dynamic and visionary management team

through information technology, Nigerian banks have been rapidly transformed from being just

a bank to a one-stop-shop financial solutions provider. The concern of IT role in attaining

effectiveness, efficiency and productivity were raised in the late 1980s. Since then a large

number of studies have emerged both at the industry and firm level that have substantially

improved the understanding of the relationship between IT and firm performance. In particular

the firm-level, studies have argued than an explanation for the so-called “productivity paradox”

can be attributed to an insufficient response of organizational changes to adapt to changing

business environment, to make better use of knowledge, technology and human resources, to

respond to new demands from suppliers and customers, and to use IT effectively. Presently,

Information technology has received great thoughtfulness across various industries and

substantial positive effect on bank’s profitability, banking transaction, patronage and quality

services delivery. As the economy of Nigeria continues to improve, following the established

path of other emerging markets; that is, increased political stability, improved government

finances, growing domestic consumer demand, high commodity prices and significant

improvement in other economic indicators, the banks in Nigeria are well positioned as a

warrant on the African renaissance success.

61
  Findings

The findings of this study revealed that a positive correlation existed between IT and

banks performance in Nigeria. This implied that a marginal change in the level of the

investment and adoption of IT in the banking industry resulted to a proportionate increase in

the profit level in terms of performance. This was confirmed by the level of the regression

coefficient result which revealed that a significant size of performance existed with the

introduction of the IT. The results in table 4.2 showed the positive correlation that existed

between variables as well as their level of significance. Furthermore, the result showed how

banks possess a high level of IT to improve efficiency practices and performance in banks to

ensure effective quality service provision and delivery. According to Milgrom and Roberts

(1990) they argued that to be successful, firms typically need to adopt IT as part of a “system”

or “cluster” of mutually reinforcing organizational approaches. The underlying argument

behind the bundling of IT and organizational performance is that it enables firms to introduce

organisational changes in the areas of re-engineering, decentralisation, flexible work

arrangements, outsourcing, team-work and customer relations. It also allows firms to produce

with greater flexibility and shortened product cycles to satisfy shifting consumer preferences.

In turn, these organizational changes were essential for realizing the full benefits of IT in every

entity.

Findings in table 4.3 showed ROA (dependent variable) of the bank was measured via

the bank’s ATM, POS and bank branches (independent variables). It showed the variation in

the bank performance explained by the independent variables in the study and with an

indication that the model was a good fit. Summarily, all the variables were statistically

significant at 1%. Findings also showed that availability of ATM, POS and establishing of

more bank branches were part of factors that explained the commercial bank’ performance in

Nigeria. The findings also showed that the impacts of IT on return on asset in commercial bank

62
in Nigeria were carefully analysed using the OLS technique. The regression result showed that

the POS, ATM and number of branches have positive effect on return on asset on commercial

bank in Nigeria. The result from the F-statistic and R-square showed that the model was stable

over the study period thus become a formidable policy reference point in banking reform

planning.

Findings also showed that information technology has the chance of data loss as

depicted in Table 4.5.1.7. Furthermore, findings in Table 4.5.1.8 showed that information

technology has the chance of fraud. Other findings showed that information technology lacks

information security as depicted in Table 4.5.1.9.

Findings have also depicted that information technology charges a high cost for

services. This could be seen in Table 4.5.1.10. While findings from Table 4.5.1.11 depicted

how information technology has many legal and security issues. From Table 4.5.1.12, findings

have shown that majority of customers shy away from IT related banking services due to

security reasons. Findings in Table 4.5.1.13 showed that computer illiteracy was high among

bank customers. The findings from Table 4.5.1.14 showed that there were serious challenges

of poor and lack of technological infrastructure development in rural areas. However, findings

from Table 4.5.1.15 depicted that was frequent shortage of money in banks’ ATM's during

peak hours or weekends. Further findings showed that one of the major challenges of IT in

Nigerian banks was the constant networks’ fluctuations as shown in Table 4.5.1.16.

5.2 Conclusion

Information technology is revolutionizing the way business is done in Nigeria. This has

resulted to changes in trade, interconnection and business transaction in the national and

international market places and set in motion a revolution in the banking sector. Banks are now

required to invest in IT for the provision of a transaction and payment systems that is

compatible with the demands of the electronically interconnected global market place. The

63
adoption of various forms of innovation has greatly influenced the content and quality of

banking operations. The technology innovation has influenced Nigerian banking industry

performance. The introduction of IT has influenced customer satisfactions. IT has increased

banks return on equity and profitability. It is apparent that IT is one of the components in the

overall strategy of banking operation. This is because it facilitates speed, convenience, and

accurate services, which would make Nigerian banks to be efficient, profitable, and competitive

and to cope with the changes and challenges that are the outcome of IT controlled globalised

economy. Also, information technology is an evolving technology especially in the developing

countries (Nigeria inclusive).

5.3 Recommendations

Based on the findings, the followings were recommended:

1. More attention has to be directed towards the use of information technology in banking

operations since the industry serve as a lubricant to the cog of the wheel of the nations’

economy.

2. Appropriate policies must be put in place to ensure proper monitoring and the determination

of the optimum size required to attain organisational efficiency in term of performance.

3. Bank must appreciate staff’s efforts and in turn ensure that their staff appreciate that

customers were assets and as such they must be attended to in time and with care through the

use of information technology facilities.

4. Information technology should be managed in such a way that they do not alienate both

customer and bank staff and also to prevent enormous risk that is associated with information

technology and be abreast with up to date technology. This will enhance their efficiency and

quality of service delivery that will ensure customers retention and productivity, which will

translate to the banks’ performance. This stance is essential especially in this era of reforms in

64
the nation’s financial sector where attention is no longer on the banks that have the required

capital. The key issue at moment is the ability of banks to retain their current customers as well

as attract potential customers. This is mainly feasible in their efficient service delivery, which

depend largely, on the premium placed on the use of IT.

5. Investment in IT should form an important component in the overall strategy of banking

operation. It is imperative for bank management to intensify investment in IT products to

facilitate speed, convenience, and accurate services. These will make Nigerian banks to be

efficient, profitable, and competitive and to cope with the changes and challenges that are the

outcome of IT controlled globalized economy.

5.4 Limitation to the Study

The research work was restricted with majorly with finance, time constraint as well as

the unwillingness of bank officials to provide necessary information to assist the gathering of

data.

65
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www.wemabank.com/

71
 APPENDIX

ROA ATM POS BANK

BRANCHES

ROA 1.0000

ATM 0.6181* 1.0000

(0.0000)

POS 0.5392** 0.4108** 1.0000

(0.0374) (0.0114)

BANK BRANCHES 0.6952** 0.5103** 0.6303** 1.0000

(0.0298) (0.0093) (0.0422)

72
 ROA ATM POS Bank

Branches

Mean 11.745810 4.11328 8.72474 9.61494

Median 11.2500 16.0000 13.0000 5.6891

Maximum 19.5000 35.0000 18.0000 21.0000

Minimum

12.2500 24.0000 11.0000 14.0000

Std. Dev.

4.3700 1.2400 3.2000 3.5404

Skewness

-0.262434 0.076004 1.994295 1.901860

Kurtosis

2.304664 1.005777 6.447008 5.818045

Jarque- 2.498301 3.16678 1.47775 3.76517

Bera

Probability 0.286748 0.001383 0.000000 0.000000

Sum 93.250 555.00 70934. 966902

Sum Sq. Dev. 37.7326 1554.43 6.71E+11 3.64E+14

Observations 30 30 30 30

Dependent Variable: D(ROA?)

Method: Pooled Least Squares

Date: 06/18/18 Time: 20:44

Sample (adjusted): 2012 2016

Included observations: 9 after adjustments

Cross-sections included: 8

73
Total panel (balanced) observations: 30

Variable Coefficient Std. Error t-Statistic Prob.

C 0.612711. 4.970568 -0.466382 0.1712

LOG(ATM?) 0.261418 0.025739 -0.419416 0.0016

LOG(POS?) 0.413115 0.727363 0.248380 0.0027

LOG(Bank Branches?) 0.382763 0.653776 0.585465 0.0006

R-squared 0.567285 Mean dependent var 20655.58

Adjusted R-squared 0.538460 S.D. dependent var 167636.2

S.E. of regression 169591.2 Akaike info criterion 26.97412

Sum squared resid 1.96E+12 Schwarz criterion 27.10060

Log likelihood -967.0684 Hannan-Quinn criter. 27.02447

F-statistic 1.457502 Durbin-Watson stat 1.360235

Prob(F-statistic) 0.012875

Respondents gender

Frequency Percent Valid Percent Cumulative

Percent

Male 15 68.2 68.2 68.2

Valid Female 7 31.8 31.8 100.0

Total 22 100.0 100.0

74
 Age of respondents

Frequency Percent Valid Percent Cumulative

Percent

Below 21 years 7 31.8 31.8 31.8

21-30 years 8 36.4 36.4 68.2

31 -40 years 4 18.2 18.2 86.4

Valid
41 years and 3 13.6 13.6 100.0

above

Total 22 100.0 100.0

Respondents educational status

Frequency Percent Valid Percent Cumulative

Percent

WAEC/SSCE 5 22.7 22.7 22.7

HND/BSC 9 40.9 40.9 63.6

Valid OND/NCE 3 13.6 13.6 77.3

Professional 5 22.7 22.7 100.0

Total 22 100.0 100.0

75
 Marital Status

Frequency Percent Valid Percent Cumulative

Percent

single 8 36.4 36.4 36.4

Married 13 59.1 59.1 95.5

Valid
Divorced 1 4.5 4.5 100.0

Total 22 100.0 100.0

Working Experience

Frequency Percent Valid Percent Cumulative

Percent

Less than1 year 7 31.8 31.8 31.8

2-6 years 7 31.8 31.8 63.6

Valid 7-11 years 4 18.2 18.2 81.8

12 years and above 4 18.2 18.2 100.0

Total 22 100.0 100.0

Level of Management

Frequency Percent Valid Percent Cumulative

Percent

Top level Management 7 31.8 31.8 31.8

Middle level Management 10 45.5 45.5 54.5

Valid
Lower level Management 5 22.7 22.7 100.0

Total 22 100.0 100.0

76
77
78
79
80
 Department of Business Administration,

Faculty of Social and Management Sciences,

Elizade University,

Ilara-Mokin, Ondo State.

Dear Sir/Ma,

INFORMATION TECHNOLOGHY AND BANK PERFORMANCE IN NIGERIA: A

CASE STUDY OF WEMA BANK PLC IN AKURE.

I am a student of the above named institution. I am carrying out a research work on the

above named topic and have selected your bank (WEMA BANK PLC, Akure) to participate in

the research work. This is a part of requirements for the award of Bachelor of Science in

Accounting.

Kindly fill the questionnaire with honesty as possible. All information provided would

be treated with confidentiality and be used for academic purpose only.

Thank you for your cooperation.

Yours faithfully,

FALADE Joshua

81
 QUESTIONNAIRE ON:

INFORMATION TECHNOLOGHY AND BANK PERFORMANCE IN NIGERIA:

A CASE STUDY OF WEMA BANK PLC

WEMA BANK OFFICIALS

SECTION A

Instruction: Please tick [√] and fill in as appropriate.

1. Gender (a) Male [ ] (b) Female [ ]

2. Age (a) Below 21 years [ ] (b) 21 – 30 years [ ] (c) 31 – 40 year [ ]

(d) 41 years and above [ ]

3. Marital Status: (a) Single [ ] (b) Married [ ] (c) Divorce [ ] (d) Widow/Widower [ ]

4. Educational Qualifications: (a) WAEC /SSCE (b) HND/B.SC [ ] (e) OND /NCE [ ] (f)

Professional [ ] (g) M.sc / M.B.A [ ]

5. Working Experience: (a) Less than 1 year [ ] (b) 2 – 6 years [ ] (c) 7 -11years [ ] (d) 12

years & above [ ]

6. Level of Management (a) Top level management [ ] (b) Middle level management [ ]

(c) Lower level management [ ]

SECTION B

Instruction: Please tick [√] as it tallies with your answer. Where, SA = Strongly Agree;

A = Agree; U = Undecided; D = Disagree; SD = Strongly Disagree

S/N Research Statement SA A U D SD

Challenges Confronted by IT Oriented Banks

82
1 Information Technology has the chance of data loss

2 Information Technology has the chance of fraud

3 Information Technology lacks information security

4 Information Technology charges a high cost for services

5 Information Technology has many legal and security issues

6 Majority of customers shy away from IT related banking services

due to security reasons

7 Computer illiteracy is high among bank customers

8 Poor or lack of technological infrastructure in rural areas

9 Shortage of money in ATM's during peak hours or weekends

10 Constant networks’ fluctuations

83
84