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Topic: IMPACT OF INFORMATION TECHNOLOGY ON BANK PERFORMANCE

Ref.Code: UPW-PT-08de05554dInstitution: BENUE STATE UNIVERSITY MAKURDI

STRACT This study examined the impact of information technology on commercial Banks performance in Nigeria. The study adopts an ex-post facto research design. Descriptive statistics, correlation and regression analysis were used in the analysis of data. The student t-test statistics was further used to test the study’s formulated null hypotheses at a 5% level of significance for a two tail test. The findings of the study revealed that Information technology significantly influences the Return on assets (ROA) and the Return on equity (ROE) of commercial banks in Nigeria. The study recommends amongst others the need for more attention to be directed towards the use of Information and communication Technology in banking operations since the industry serve as a lubricant to the cog of the wheel of the nation’s economy while appropriate policies must be put in place to ensure proper monitoring and the determination of the optimum size required to attain organisational profitability and efficiency.

TABLE OF CONTENTS
Title Page - - - - - - - - - - i
Declaration - - - - - - - - - ii
Approval Page - - - - - - - - - iii
Dedication - - - - - - - - - iv
Acknowledgements - - - - - - - - v
Table of Contents - - - - - - - - vii
Abstract - - - - - - - - - - xi
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study - - - - - - 1
1.2 Statement of the Problem - - - - - - 4
1.3 Objectives of the Study - - - - - - 5
1.4 Research Questions - - - - - - - 6
1.5 Research Hypotheses - - - - - - 6
1.6 Significance of the Study - - - - - - 7
Scope of the Study - - - - - - - 8
1.8 Structure of the Study- - - - - - - 8
CHAPTER TWO: REVIEW OF RELATED LITERATURE
Introduction - - - - - - - - 10
Conceptual Framework- - - - - - - 10
The Concept of Performance- - - - - - 17
2.4 The Banking sector in Nigeria- - - - - - 19
2.5 Review of Empirical Works- - - - - - 25
CHAPTER THREE: RESEARCH METHODOLOGY
Introduction - - - - - - - - 33
Research Design - - - - - - - 33
3.3 Population of the Study - - - - - - 34
3.4 Sample Size of the study - - - - - - 34
3.5 Sources and Method of Data Collection- - - - 35
3.6 Techniques of Data Analysis- - - - - - 35
3.7 Model specification - - - - - - - 35
3.8 Definition of Variables Employed In the Model- - 36
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS
4.1 Introduction - - - - - - - - 38
4.2 Data Presentation - - - - - - - - 39
4.3 Test of Research Hypothesis- - - - - - 54
4.4 Discussion of findings - - - - - - 55
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings - - - - - - - 58
5.2 Conclusions - - - - - - - - 59
5.3 Recommendations - - - - - - - 60
5.4 Suggestions for Further Research- - - - - 61
References - - - - - - - - - 63
Appendices - - - - - - - - 65





















LIST OF TABLES
Table 4.1 Descriptive Statistics- - - - - - 43
Table 4.2 Correlations Results for Model 1 - - - 45
Table 4.3 Correlations Results for Model 2 - - - 45
Table 4.4 Model Summary for Model 1 - - - - 46
Table 4.5 Model Summary for Model 2 - - - - 48
Table 4.6 Coefficients for Model 1 - - - - - 51
Table 4.7 Coefficients for Model 2 - - - - - 52
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Business environment nowadays is very dynamic and experiences rapid changes as a result of creativity,innovation, technological changes, increased awareness and demands from customers. Business organizations,especially the banking industry of the 21st century operates in a complex and competitive environmentcharacterized by these changing conditions and highly unpredictable economic climate with Information andCommunication Technology (ICT) at the center of this global change curve (Obasan Kehinde &Agbolade,2011).
Information Technology is a branch of engineering dealing with the use of computers and telecommunications equipment to store, retrieve, transmit and manipulate data. The Information Technology Association of America has defined Information Technology as “the study, design, development application, implementation, support or management of computer-based information systems”. The term is commonly used as a synonym for computers and computer networks, but it also encompasses other information distribution technologies such as television and telephones. Information Technology is the automation of processes, controls, and information production using computers, telecommunications, software and ancillary equipment such as automated teller machine and debit cards (Khalifa, 2000).
In this rapidly evolving modern society of which we are all a part, convenience has become crucial to survive the ever increasing pace of life. (Oluwagbemi, Abah & Achimugu; 2011). A vast market has developed on the Internet, online purchasing and banking have been by-products of this growth. Many businesses have been quick to recognize and exploit the niche. The range product on-line is virtually inexhaustible and puts the Internet at the top of the list of convenience good, alongside ready-made meals. (Oluwagbemi, Abah & Achimugu; 2011).
The application of information and communication technologyconcept, techniques, policies and implementation strategies to companies is a subject offundamental importance and concerns to all companies and a prerequisite for local and global competitiveness.
Laudon and Laudon, (1991) contend that managers cannot ignore Information Systems because they play acritical role in contemporary organization. They point out that the entire cash flow of most fortune 500 Companies are linked to Information System.
ICTdirectly affects the various management functions of planning, organising and the nature of services offered inthe banking industry. It has continuously changed the way banks organised their corporate relation worldwidewith the variety of innovative devices available to enhance the speed and quality of services delivery.
Harold and Jeff (1995) contend that financial service providers should modify their traditional operating practiceto remain viable in the 1990’s and the decade beyond. Thus, ICT has emerged as a catalyst in the variousindustries of the world to aid the process and procedure required to ensure the realization of variousorganizational goals.
The role of ICT in the banking sector is of interest to this study due to the significant role it plays in theeconomy by stimulating economic growth through the intermediation of funds to economic agents that needthem for productive activities. This function is very vital for any economy that intends to experience meaningfulgrowth because it makes arrangements that bring borrowers and lenders of financial resource together and moreefficiently too than if they had to relate directly with one another (Adam, 1998; Ojo, 2007).
1.2 Statement of the Problem
The world today is shaped by the advancement in the field of Information Technology (IT). The relevance of Information Technology (IT) to the performance of financial sector of any nation (economy) cannot be overemphasized. The application of Information Technology in the banking industry has impacted positively on service delivery in terms of reducing customers waiting time and rendering convenient service to customers, operational efficiency including minimization of cost and profitability of the banks, hence resulting to higher to higher performance in terms of profitability.
In the Nigerian banking industry, information and communication technology has been adopted by virtually all the 20 banks quoted on the Nigerian stock exchange. But the application of IT in carrying out bank transactions could be adjudged to be highly inefficient. The incessant absence of internet networks during bank operation hours, non-functional ATMs found around the banks could buttress this point better. This has created a lot of doubts whether IT has in any way impacted on the performance of commercial banks.
It is from the above unflinching doubts that the researcher is poised to empirically investigate the impact of information and communication technology on the performance of Nigerian banks.
1.3 Objective of the Study
The main objective that this study seeks to achieve is to examine the impact of information technology on the performance of Nigerian banks. The specific objectives of the study include:
To investigate whether there is any significant relationship between information technology (proxied by value of ATM and WEB) and return on assets (ROA) of Nigerian banks.
To investigate whether there is any significant relationship between information technology (proxied by value of ATM and WEB) and return on equity (ROE) of Nigerian banks.
1.4 Research Questions
`In the light of the above stated objectives, the following questions are asked which if they are answered can lead to the achievement of the above stated objectives.
Is there any significantly relationship between information technology (proxied by value of ATM and WEB) and return on assets (ROA) of Nigerian banks?
Is there any significant relationship between information technology (proxied by value of ATM and WEB) and return on equity (ROE) of Nigerian banks?
1.5 Research Hypotheses
The following null hypotheses have been formulated in two places to guide the researcher in his investigation.
Ho1: There no significantly relationship between information technology (proxied by value of ATM and WEB) and return on assets (ROA) of Nigerian banks.
Ho2: There is no significant relationship between information technology (proxied by value of ATM and WEB) and return on equity (ROE) of Nigerian banks.
1.6 Significance of the Study
The study will be of immense significance to management and customers of banks.
The managers of banks would get hint on how to further deploy Information Technology to enhance profitability, operational efficiency and service delivery of their banks.
The customers would have the benefit of improved services in terms quicker and efficient service delivery.
More so, the study will be of great importance to the researcher by enabling him to get a degree.
The study will finally contribute immensely to the existing body of knowledge which can serve as a reference point to future researchers.
1.7 Scope of the Study
The scope of this study covers all the 13 commercial banks quoted on the Nigeria stock exchange. The time frame for the study shall be limited to a period of five years (i.e. from 2008-2012) during which the financial statement of the banks shall be carefully examined.
1.8 Structure of the Study
This study has been structured in to five different chapters starting with chapter one to five.
Chapter one titled introduction looks at the back ground to the study, statement of the problem, research objectives, research hypotheses, significance and scope of the st

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