The impact of information and communication technology on customers service delivery (case study of uba plc)

Thesis Overview

<p> </p><p><b>INTRODUCTION</b><br></p><div><p>1.1<b>&nbsp; &nbsp; Background<br>of the study</b></p><p>Information<br>technology is a body of tools with the convergence of communication and<br>computer. It is also series of machine, which can execute sequence of instructions.<br>The sequence of instruction is a program made particularly flexible and not<br>rigid and can be change depending on the information being processed (Goldberg,<br>2009).</p><p>The new<br>millennium brought with it new possibilities in terms of information access and<br>availability simultaneously, introducing new challenges in protecting sensitive<br>information from some eyes while making it available to others. Today’s<br>business environment is extremely dynamic and experience rapid changes as a<br>result of technological improvement, increased awareness and demands Banks to<br>serve their customers electronically. Banks have traditionally been in the<br>forefront of harnessing technology to improve their products and services.</p><p>The Banking<br>industry of the 21st century operates in a complex and competitive environment<br>characterized by these changing conditions and highly unpredictable economic<br>climate. Information and Communication Technology (ICT) is at the centre of<br>this global change curve of Electronic Banking System in Nigeria today.<br>(Stevens 2002).</p><p>Assert that<br>they have over the time, been using electronic and telecommunication networks<br>for delivering a wide range of value added products and services, managers in<br>Banking industry in Nigeria cannot ignore Information Systems because they play<br>a critical impact in current Banking system, they point out that the entire cash<br>flow of most fortune Banks are linked to Information System.</p><p>The<br>application of information and communication technology concepts, techniques,<br>policies and implementation strategies to banking services has become a subject<br>of fundamental importance and concerns to all Banks and indeed a prerequisite<br>for local and global competitiveness Banking.</p><p>The<br>advancement in Technology has played an important role in improving service<br>delivery standards in the Banking industry. In its simplest form, Automated<br>Teller Machines (ATMs) and deposit machines now allow consumers carry out<br>banking transactions beyond banking hours.</p><p>With online<br>banking, individuals can check their account balances and make payments without<br>having to go to the bank hall. This is gradually creating a cashless society<br>where consumers no longer have to pay for all their purchases with hard cash.<br>For example: bank customers can pay for airline tickets and subscribe to<br>initial public offerings by transferring the money directly from their<br>accounts, or pay for various gods and services by electronic transfers of<br>credit to the sellers account. As most people now own mobile phones, banks have<br>also introduced mobile banking to cater for customers who are always on the<br>move. Mobile banking allows individuals to check their account balances and<br>make fund transfers using their mobile phones. This was popularized by First<br>Atlantic Bank (now First Inland Bank) through its “Flash me cash” product<br>Customers can also recharge their mobile phones via SMS. E-Banking has made<br>banking transactions easier around the World and it is fast gaining acceptance<br>in Nigeria.</p><p>The delivery<br>channels today in Nigeria electronic Banking are quite numerous has it is<br>mentioned here Automatic Teller Machine (ATM), Point of Sales (POS), Telephone<br>Banking, Smart Cards, Internet Banking etc Personal computers in the Banking<br>industry was first introduced into Nigeria by Society Generale Bank as the<br>popular PC easy access to the internet and World Wide Web (www) and internet is<br>increasingly used by Bank’s as a channel of delivering the products and<br>services to the numerous customers.</p><p>Virtually<br>almost all Banks in Nigeria have a web presence; this form of Banking is<br>referred to as Internet Banking which is generally part of Electronic Banking. The<br>delivery of products by banks on public domain is an indication of<br>advertisement which is known has E-Commerce. Electronic commerce on the other<br>hand is a general term for any type of business or commercial transaction it<br>involves the transfer of information across the internet. E-Commerce involves<br>individuals and business organization exchanging business information and<br>instructions over electronic media using computers, telephones and other<br>communication equipments. This covers a range of different types of business<br>from consumers to retails products.</p><p>However,<br>Electronic banking as it is; is a product of E-Commerce in the field of banking<br>and financial services. It’s offers different online services like balance<br>enquiry, request for cheque books, recording stop payment instructions, balance<br>transfer instructions, account opening and other form of traditional banking<br>services. The Internet allows businesses to use information more effectively,<br>by allowing customers, suppliers, employees, and partners to get access to the<br>business information they need, when they need it. These services all translate<br>to reduced cost: there are less overhead, greater economies of scale, and<br>increased efficiency.</p><p>The internet<br>is revolutionizing sales techniques and perceptions of leading brands, and the<br>internet is intensifying competition in all its forms. Banking are continuing<br>to use the internet to add value for their customers; but in order for this to<br>work effectively – maximizing opportunities, reducing risks and overcoming<br>problems – an E-Banking strategy is required as an impact.</p><p>The growth of<br>the Web and Internet as new channels, the growth in their use by customers, the<br>growth in their use by customers, and the floor of companies entering the<br>market, presents a series of key challenges to companies. It is easy and cheap<br>to put up a website.</p><p>But to create<br>an environment delivering effective service on the Web to a significant<br>proportion of your customer base requires an E-Banking strategy.</p><p>Electronic<br>Banking offers different online services like balance enquiry, request for<br>cheque books, recording stop payment instructions, balance transfer<br>instructions, account opening and other form of transitional Banking services.</p><p>The impact of<br>information Technology on service delivery in banks cannot be overemphasis. Hence the need to<br>investigate it impact on service delivery in UBA Kakuri branch in Kaduna.</p><p><b>1.2 &nbsp; &nbsp;</b><b>Statement of Problem</b></p><p>In Nigeria, customers of banks today<br>are no longer about safety of their funds and increase returns on their<br>investments only. Customers demand efficient, fast and convenient services.<br>Customers want a Bank that will offer them services that will meet their<br>particular needs (personalized Banking) and support their Business goals for<br>instance; businessmen want to travel without carryout cash for security<br>reasons. They want to be able to check their balance online, find out if a<br>cheque is cleared, transfer funds among accounts and even want to download<br>transaction records into their own computer at work or home. Customers want a<br>preferential treatment and full attention by their choice Bank. All these are<br>only achievable through the use of ICT: In line with rendering qualities and<br>acceptable services that most Banks in Nigeria are gearing toward and investing<br>large sum of money in information and communication Technology, expectedly such<br>Banks services have been improved. United Bank for Africa (UBA), Zenith Bank,<br>GT Bank (to mention few) are in the forefront in the use of IT in rendering<br>services to their Customers (The Guardian Newspaper April 18, 2008p 21).</p><p>Hence, some of the typical issues<br>posing serious challenges on service delivery in bank are advance information<br>technology. Banks and the entire financial sector in Nigeria have been most<br>radically affected by these developments. This is so because information<br>technology has become a critical business resource and its absence could result<br>in poor decision and ultimately business failure. As such many banks and<br>financial institutions have failed in the past due to their inability to<br>utilize information technology in marketing their financial services as well as<br>their operations.</p><p>Today’s<br>business environment is very dynamic and undergoes rapid changes due to<br>technological innovation, increased awareness and increased demands from<br>customers. The banking industry of the twentieth century operates in a complex<br>and competitive environment characterized by these changing conditions and<br>highly volatile economic climate, and information and communication technology<br>ICT) is at the centre of this global change curve (Agboola,2006). Hence the<br>banks that will survive and complete effectively in today’s business environment<br>must necessarily integrate ICT into its operational processes.</p><p>Given this<br>scenario, this thesis attempts a synthesis of empirical facts on the extent to<br>which information and communication technology has informed innovations in the<br>operational modalities and service delivery modes of banks in Nigeria and the<br>impact of this on bank performance. It is against this background that the<br>subject matter is seen as a problem worthy of investigation.</p><p>1.3 &nbsp; &nbsp;<b>Objective<br>of the study</b></p><p>The central<br>objective of the study is to examine the impact of information and<br>communication technology on customer’s service delivery. The specific<br>objectives are:</p><p>1. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>Investigate<br>how Information and communication Technology enhances customer’s satisfaction<br>in United Bank of Africa.</p><p>2. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>Examine<br>the benefits a customer derives from using ICT tool &nbsp;in United Bank for Africa.</p><p>3. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>Identify<br>the challenges militating against ICT operation in United Bank for Africa.</p><p>1.4 &nbsp; &nbsp; &nbsp;<br><b>Research Questions</b></p><p>In the study the research question below is proffered with answers;</p><p>1. &nbsp; &nbsp; How does<br>ICT enhance customer’s satisfaction in United Bank of Africa?</p><p>2. &nbsp; &nbsp; What<br>benefits do customers derive from using ICT tools in United Bank of Africa?</p><p>3. &nbsp; &nbsp; What<br>are the challenges militating against ICT operation in United Bank for Africa?</p><p>1.5<b>&nbsp; &nbsp; Statement of Hypothesis</b></p><p>The<br>stated hypotheses tested in this study;</p><p>Ho1: Information<br>and communication Technology does not enhance bank service delivery.</p><p>HA1: Information<br>and communication technology enhances bank customer satisfaction.</p><p>1.6<b>&nbsp; &nbsp; Significance<br>of the Study</b></p><p>The study<br>would enable the banks executives and indeed the policy makers of the banks and<br>financial institutions to be aware of electronic banking as a product of<br>electronic commerce with a view to making strategic decisions. The research is<br>equally significant because it would provide answers to factors militating<br>against the implementation of electronic banking in Unity Bank Plc; prove the<br>success and growth associated with implementation of electronic banking<br>highlight the areas of banking operations that can be enhanced via electronic<br>banking and also be an invaluable tool for Students, Academician, institutions,<br>Corporate managers and individuals that want to know more about electronic<br>banking trends especially in Nigeria.</p><p>1.6 &nbsp; &nbsp;<b>Scope<br>of the study</b></p><p>In pursuance<br>of the objective of the study; attention shall be focus on information<br>technology in banks. In order to conduct an empirical investigation into the<br>impact o information and communication on bank customer service delivery in<br>united bank for Africa and will also examine the nature of ICT operation in<br>united bank for Africa from 2007 to 2009.</p><p>1.7 &nbsp; &nbsp;<b>Definition<br>of terms</b></p><p><b><i>ATM</i></b>:<br>Automated Teller Machine: According to Peter and Sylvia (2008), an ATM combines<br>a computer terminal, Recordkeeping system, and cash vault in one unit,<br>permitting customers to enter a financial firm’s bookkeeping system with either<br>a plastic card containing a Personal Identification Number (PIN) or by punching<br>a special code number into a computer terminal linked to the financial firm’s<br>computerized records 24 hours a day. Once access is gained into the system,<br>cash withdrawals may be made up to pre-specified limits and balance inquiries,<br>and bill paying may take place. Mishkin (1998) states that the wonders of<br>modern computer technology have also enabled banks to lower the cost of bank<br>transactions by having the customer interact with an electronic banking<br>facility rather than with a human being. One important form of electronic<br>banking facility is the automated teller machine (ATM), which has the advantage<br>that it does not have to be paid over time. Furthermore, because of its low<br>costs, ATMs can be put at locations other than a bank or its branches, further<br>increasing customer convenience. The low cost of ATMs has meant that they have<br>sprung up everywhere. Although ATM was introduced in the Nigerian banking<br>industry in early 2000, most banks embraced its use after the 2005 banks’<br>consolidation. Today, there is hardly any bank without the ATMs.</p><p>The banks<br>have also deployed the ATMs to other locations such as supermarkets, tertiary<br>institutions, hospitals, hotels and so on. There is no doubt that the<br>introduction of ATMs by banks is to reduce operation costs and to ensure that<br>the customers are better served. But the ATM is not without challenges because<br>there are always people out there who would want to reap where they did not sow<br>.The infrastructures that support the machine are susceptible to abuse, misuse<br>and failure in many ways, resulting in financial loss as a result of fraud,<br>unauthorized use of customers personal identification number and loss of<br>customers confidence. ATM fraud has taken an alarming proportion and most<br>customers are now afraid to use their ATM cards. There is no doubt that there<br>must be collusion between some bank staff and fraudsters for such frauds to<br>succeed. This is one of the reasons customers are fret about the security of<br>on-line transactions. While on the other hand, some customers have not helped<br>matters because of their carelessness or fraudulent nature.</p><p><b><i>ATM Card</i></b><b>:</b><br>debit card use by banks customers in making transactions via ATM. The card is a<br>complex circuit that process micro processors with a single chip that contains<br>the complete arithmetic and logic unit of computers , it provide access to<br>customers to perform balance inquiry, mini statement and cash withdrawal as<br>well as transfers through the use of Automated teller machine. This debit card<br>can also be used for internet online and post transactions.</p><p><b><i>Chip Card</i></b><b>:</b><br>this is a card containing one or more computer chips or integrated circuit for<br>identification, data storage or special purpose processing used to validate<br>personal identification numbers authorize purchase, verify account balances and<br>store personal records.</p><p><b><i>Electronic Data<br>Interchange (EDI)</i></b><b>:</b><br>The transfer of information between organizations in machines readable form. Electronic<br>monetary value is measured in currency units stored in electronic form on<br>electronic device in the consumer’s possession. This electronic value can be<br>purchase and held on the device until reduced through purchase or transfer.</p><p><b><i>Mobile Banking</i></b><b>: </b>this<br>is a product that enables the bank to offer customers to access services<br>anywhere. Customers can make their transactions anywhere such as account balance<br>inquiry, transactions inquiry. Bill payment/electronic fund transfer. Transfer<br>between accounts etc.</p><p><b><i>Payment System</i></b>:<br>A financial system that establishes that means for transferring money between<br>suppliers and of fund, usually by exchanging debits or Credits between<br>financial institutions.</p><p><b><i>Point Of Sale (POS)<br>Machine</i></b><b>:<br></b>A<br>Point-of-Sale machine is the payment device that allows credit/debit<br>cardholders make payments at sales/purchase outlets. It allowed customers to<br>perform the following services Retail Payments, Cashless Payments, Cash Back<br>Balance Inquiry, Airtime Vending, Loyalty Redemption, Printing ministatement<br>etc.</p><p><b><i>Smart Card</i></b><b>: </b>A<br>Card with a computer chip embedded, on which financial health, educational, and<br>security information can be stored and processed.</p><p><b><i>Transaction Alert</i></b>:<br>Our customers carry out debit/credit transactions on their accounts and the<br>need to keep track of these transactions prompted the creation of the alert<br>system by the Bank to notify customers of those transactions. The alert system<br>also serves as notification system to reach out to customers when necessary<br>information need to be communicated.</p><p><b><i>Western Union Money<br>Transfer (WUMT)</i>: </b>Western union Money<br>transfer is a product that allowed people with relatives in Diaspora who may be<br>remitting money home for family up-keep, Project financing, School fees etc.<br>Nigerian Communities known for having their siblings gainfully employed in<br></p></div> <br><p></p>