THE IMPACT ICT IN MARKETING OF BANKING SERVICES (CASE STUDY OF POLARIS BANK)

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY:

Today’s business environment is very dynamic and undergoes rapid changes as a result of technological innovation, increased organizations, especially, the banking sector of the 21^st century operates in a complex environment characterized by these changing conditions and highly unpredictable economic climate. Information and communications technology (ICT) is at the centre of this global change curve. Laudon and Laudon (1991) held that manager cannot ignore information system because they play a critical role in contemporary organizations. They point out that the entire cash flow of most successful companies studied is linked to information technology.

The application of Information and communication technology (ICT), concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concern to all banks, and of course a requirement for local and global competiveness. ICT directly affects how managers decide, how they plan and what products and services are offered in the banking industry. It has continued to change the way banks and their corporate relationships are organized globally, and the variety of innovative devices available to enhance the speed and quality of service delivery.

Harold and Jeff (1995) maintain that financial service providers should upgrade their traditional operating practice to remain viable in the 1990s and the decades to come. They claim that the most influential weakness in the banking industry today is wide spread failure on the part of senior management in banks to group the importance of technology and incorporate it into their strategic plans accordingly.

Where (2000) maintained that only banks that overhaul the whole of their payment and delivery system and apply ICT to their operations are likely to survive and prosper in the 21^st Century. He therefore advised banks to properly position them within the frame work of the dictates of the dynamism of information and communication technology. The banking industry in Nigeria has witnessed overwhelming changes linked with the development in ICT over the years. The quest for survival, global relevance, maintenance of existing market share and sustainable development has made the explanation of the numerous advantages of ICT through the use of automated devices imperative in the industry.

This study shall evaluate the adoption of ICT products by the selected bank (Polaris bank.) and assess the impact of adopting these innovations on its services.

1.2       STATEMENT OF THE PROBLEM

Information and Communications Technology has become a major tool for rendering or providing competitive advantages for companies most especially banking industry, in terms of the number of computers in use and the level of telecommunication infrastructure. Thus ICT directly affects how managers decide, how they plan and what products and services are offered in the banking industry. It has continued to change the way banks and their corporate relationships are organized worldwide and the variety of innovative devices available to enhance the speed and quality of service delivery.

Oluyemiadeosun (2007) contended that ICT is progressively reducing the significance of other factors of production. Through ICT, it is now possible for countries to trade without border restriction. Therefore, as a result of anchoring their operations on ICT based delivery system, the banks with ICT services have become more profitable.

Akinlola (2006) made an evaluation of recent experience of banks and discovered that ICT has greatly affected the operations of banks. He discussed three dimensions under which ICT affects bank services, viz;

(i).        Bankers Automated clearing system

(ii).       Automated Payment system

(iii).      Automated delivery channels

His report revealed that the adoption of ICT by banks have far reaching impact, ranging from direct (such as time saving, customer’s satisfaction, error rate reduction, enhanced management decision making, improved speed of service delivery etc) to global (like competitive advantage, market segmentation, high revenue and forecasting).

Though the advantages and opportunities that ICT offers are very great and enormous, this is not without challenges. According to Oluyemiadeosun (2007), ‘fraud can likely occur more seriously in the financial industry since large amount may be easier to perpetrate electronically that the manual operation’. Fraudsters can break various security codes. Though fraud can be minimized, there could still be some elements of dishonest act. According to him, ‘another area in which the adoption of ICT has negatively affected the banking sector is the threat it poses for employees in the sector’.

Michael Dell characterizes the direct business today as different combinations of ‘face –to-face, ear-to-ear and keyboard-to-keyboard. Each has its place. Internet doesn’t replace people; it makes them more efficient by moving routers interaction to the web and enabling customers to do mere things for themselves.

While some people are of the opinion that ICT poses positive effects, others are of the view that the negative effects are more.

The problem statement of this study is therefore, to examine the impact of ICT on bank services in Polaris bank.

1.3 OBJECTIVE OF THE STUDY:

The main objectives of this study include;

(i).        To critically examine the impact of ICT on banks services

(ii).       To ascertain the impact of ICT on the general economy

(iii).      To examine customers’ perceptions with regards to the various ICT products adopted by the bank

(iv).      To serve as a useful reference material to the government, banks, organized private sector, academicians, businessmen as well as researchers.

1.4       SCOPE OF THE STUDY:

The scope of this research work is limited to the impact of ICT on bank services, especially as it relates to online banking, M-banking, ATM, Smartcards, EFT, etc.

This study is limited to Polaris bank in Calabar; it is difficult to cover other cities or areas due to limitations posed by time, money, distance and other limiting factors.

1.5       RESEARCH QUESTIONS:

A study of this magnitude is often based on some observed questions, and for the purpose of this study, the following research questions are considered.

(i).        what impact has ICT on Bank services?

(ii).       what impact has ICT on the growth and development of the economy?

(iii).      what perceptions do customers have regarding the various ICT products adopted by banks?

(iv).      How current are Nigerian banks with regards to ICT?

1.6       RESEARCH OPERATIONAL HYPOTHESES:

The following hypotheses are put forward for the purpose of this study.

Ho:      ICT has no significant impact on bank services

HI:      ICT has significant impact on bank services.

Ho:      There is no relationship between customers’ perception and ICT products adopted by the bank.

HI:      there is a relationship between customers’ perception and ICT products adopted by the bank.

1.7       SIGNIFICANCE OF THE STUDY:

Academically, this study will not only expand the frontier of knowledge in this field, but will also serve as a resourceful guide for future researchers. The significance of the study ‘the impact of ICT on Bank Services’ include;

•           The provision of useful information on bank services, establish the impact or effects of specific ICT products such as, M-banking, ATM, smart phones |Etc and to proffer or suggest solutions to the many questions surrounding ICT.

-           Serve as a guide or reference material to ICT agencies, authorities, banks, students and researchers who may like to carry out further research on the topic or related topics.

THE IMPACT ICT IN MARKETING OF BANKING SERVICES (CASE STUDY OF POLARIS BANK)

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