CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
The internet is the bedrock for national
development in a rapidly changing global environment, and this challenges us to
devise bold and courageous initiatives to address a host of vital
socio-economic issues such as reliable infrastructure, skilled human resources,
and other essential issues of capacity building. In addition, many banks have
installed up-to date modern computers that will enable them achieve
communication and multimedia connection on the Internet (Extranet and Intranet).
As Gates (1995) put it, the internet has already had a huge effect on business.
But its greatest impact won’t be felt until the inside and outside a company
are intimately interconnected to the internet. The study here reveals that to
achieve a successful and an effective communication, commercial banks need to
connect their computers to the internet via the use of networks such as Local Area Networks (LANs) or Wide Area
Networks (WANs), with this network put in place, bank staffs can work
simultaneously on the same document either by sending or receiving emails
internally, externally and from the rest of the world. Aig-Imoukhuede, (2003),
mentioned that to bring banking services closer to a customer and to guarantee
the opportunity to use them anytime a customer wants, the on-line-real-time
phenomenon which has been the single most important change to banking
operations over the last ten years has to be in place.
He opined that internet banking services should
be made available to customers at any time so as to bring a customer closer and
familiar with banking services. In my own view, as regard to Aig-Imoukhuede
(2003) statements, banks have installed modern internet connectivity that would
enable them achieve better communication of data, information and documents in
providing modern day banking services to the customers, this as a result has
brought more customers to patronize banks. Managers and other staffs of banks
need to be able to search and gather data from several different types of
sources, analyze them, select the relevant ones and organize them in such a
manner to allow them to make decisions based on the organized data. Ovia,
(2000), also noted that commercial banks have improved basically on the
deployment of modern internet in their banking operations, and that information
technology budget for banking is larger than that of other industries in
Nigeria. For this reason he conducted a research that on-line system has
facilitated internet banking with banks. He found out that banks now offer
smooth and flexible way of operating accounts in any branch irrespective of
where the bank or the account is domiciled. However, he said banking for
tomorrow requires more of electronic manipulation and shuffling of bits-based
money and other banking transactions, instead of paper.
However, paper based transactions are
now being replaced by electronic-based transactions due to the internet
facility. In addition to the statement above Woherem, (2000), opined that
Nigerian banks since 1980s have performed better in their investment profile
and use of internet services, than the rest of industrial sector of the
economy. The two study above provides a basis to which internet has promoted the
efficiency, processes and operation of commercial banks in Nigeria.
2.1
CONCEPTUAL FRAMEWORK
2.1.1
DEFINITION AND MEANING OF INTERNET
Internet is a global computer
network, providing a variety of information and communication facilities,
consisting of interconnected networks using standardized communication
protocols. The Internet, sometimes called simply "the Net," is a
worldwide system of computer networks - a network of networks in which users at
any one computer can, if they have permission, get information from any other
computer (and sometimes talk directly to users at other computers). It is the
automation of process, controls and information production using computers,
telecommunication, software and ancillary equipment such as Automated Teller
Machine and Debit Cards. It is a term that generally covers the harnessing of
electronic technology for the information needs of a business at all levels.
Laudon D. and Laudon J. (2001),
assert that internet deals with the physical devices and software that link
various computer hardware components and transfer data from one physical
location to another. Harold and Jeff (1995), contend that financial service
providers should modify their traditional operating practices to remain viable.
They claimed that most significant shortcomings in the banking industry today
is a wide spread failure on the part of senior management in banks to grasp the
improvement of technology (internet service) and incorporate it into their
strategic plans.
2.1.2 OVERVIEW OF INTERNET
Wirsiy and Shafack (2002) defined internet
as a broad-based term that encompasses the gathering, acquiring, organization,
packaging, storage and retrieval, dissemination of above multi-media, using a
combination of computers and telecommunications. Advancement in internet
services has brought about tremendous progress in banking sector across the
globe. This is because internet has brought about dramatic and dynamic changes
in the global system of banking. Igwe,
(2005), noted that the advent of the internet, electronic mail and personal
computers on every desk, and its application to banking have produced amazing
results. The basic existence of internet in financial institution has improved
dramatically.
Some estimates indicate that, in 1980s,
about 30 percent of all new capital investment in organizations has been in
Internet/information technology (Westland and Clark 2000). Internet to business
today is widely acknowledged, while large business have been using internet for
some time now due to improvement in it. Internet strategy has been emphasized
in different area both empirical and prescriptive research studies. In a
statement by Womboh and Abba, (2008), they believed that internet and
information technology (IT) are similar concepts that can be used
interchangeably.
2.1.3THE EVOLUTION OF INTERNET
The Internet started as
an experiment in the late 1960s by the Advanced Research Projects Agency (ARPA,
now called DARPA) of the U.S. Department of Defense. DARPA experimented with
the connection of computer networks by giving grants to multiple universities
and private companies to get them involved in the research.
In December 1969, the
experimental network went online with the connection of a four-node network
connected via 56 Kbps circuits. This new technology proved to be highly
reliable and led to the creation of two similar military networks,
MILNET in the U.S. and MINET in Europe. Thousands of hosts and users
subsequently connected their private networks (universities and
government) to the ARPANET, thus creating the initial "ARPA
Internet."
ARPANET had an
Acceptable Use Policy (AUP), which prohibited the use of the Internet for
commercial use. ARPANET was decommissioned in 1989.
By 1985, the ARPANET
was heavily used and congested. In response, the National Science Foundation
(NSF) initiated phase one development of the NSFNET. The NSFNET
was composed of multiple regional networks and peer networks (such as the NASA
Science Network) connected to a major backbone that constituted the core of the
overall NSFNET.
In its earliest form,
in 1986, the NSFNET created three-tiered network architecture. The architecture
connected campuses and research organizations to regional networks, which in
turn connected to a main backbone linking six nationally funded super-computer
centers. The original links were 56 Kbps.
The links were upgraded
in 1988 to faster T1 (1.544 Mbps) links as a result of the NSFNET 1987
competitive solicitation for a faster network service, awarded to Merit
Network, Inc. and its partners MCI, IBM, and the state of Michigan. The NSFNET
T1 backbone connected a total of 13 sites that included Merit, BARRNET, MIDnet,
Westnet, North West Net, SESQUINET, SURANet, NCAR (National Center of
Atmospheric Research), and five NSF supercomputer centers.
In 1990, Merit, IBM,
and MCI started a new organization known as Advanced Network and Services
(ANS). Merit Network's Internet engineering group provided a policy routing
database and routing consultation and management services for the NSFNET,
whereas ANS operated the backbone routers and a Network Operation Center (NOC).
By 1991, data traffic
had increased tremendously, which necessitated upgrading the NSFNET's backbone
network service to T3 (45 Mbps) links. Figure 1-1 illustrates the original
NSFNET with respect to the location of its core and regional backbones.
As late as the early 1990s, the
NSFNET was still reserved for research and educational applications, and
government agency backbones were reserved for mission-oriented purposes. But
new pressures were being felt by these and other emerging networks. Different
agencies needed to interconnect with one another.
Commercial and general-purpose
interests were clamoring for network access, and Internet service providers
(ISPs) were emerging to accommodate those interests, defining an entirely new
industry in the process. Networks in places other than the U.S. had developed,
along with interest in international connections. As the various new and
existing entities pursued their goals, the complexity of connections and
infrastructure grew.
Government agency networks
interconnected at Federal Internet eXchange (FIX) points on both the east and
west coasts. Commercial network organizations had formed the Commercial
Internet eXchange (CIX) association, which built an interconnect point on the
west coast. At the same time, ISPs around the world, particularly in Europe and
Asia, had developed substantial infrastructures and connectivity. To begin
sorting out the growing complexity, Sprint was appointed by NSFNET to be the
International Connections Manager (ICM)-to provide connectivity between the
backbone services in the U.S. and European and Asian networks. NSFNET was
decommissioned in April 1995.
The Internet Today
The decommissioning of
NSFNET had to be done in specific stages to ensure continuous connectivity to
institutions and government agencies that used to be connected to the regional
networks.
Today's Internet
structure is a move from a core network (NSFNET) to a more distributed
architecture operated by commercial providers such as Sprint, MCI, BBN, and
others connected via major network exchange points. Figure 1-2 illustrates the general form of the Internet
today.
The contemporary Internet is a
collection of providers that have connection points called POP (point of
presence) over multiple regions. Its collection of POPs and the way its
POPs are interconnected form a provider's network. Customers are
connected to providers via the POPs. Customers of providers can be providers
themselves. Providers that have POPs throughout the U.S. are called national
providers.
Providers that cover specific
regions (regional providers) connect themselves to other providers at one or
multiple points. To enable customers of one provider to reach customers of
another provider, Network Access Points (NAPs) are defined as
interconnection points. The term ISP is usually used when referring to anyone
who provides service, whether directly to end users or to other providers. The
term NSP (network service provider) is usually restricted to providers who have
NSF funding to manage the Network Access Points, such as Sprint, Ameritech, and
MFS. The term NSP, however, is also used more loosely to refer to any provider
that connects to all the NAPs.
2.1.4 INTERNET IN FINANCIAL SERVICE
DELIVERY
The
year 1980‟s witnessed the advent of telecommunication and networking as banks
began to display information technology systems as a local metropolitan and
wide area network. While many of the large banks stuck to centralized system
because of heavy investment in technology equipment, the smaller banks began to
imbibe the distribution approach which was beginning to emerge and which was
more affordable especially as it allows organizations with the flexibility of
scalable infrastructure.
2.1.5 THE CHALLENGES AND SOLUTIONS
OF INTERNET APPLICATION ON COMMERCIAL BANKS
Nigeria’s poor infrastructures have been
identified as the first major challenge in banks. Reports have it that in Nigeria, there are
only one computer and four main telephone lines per thousand people.
Also, electricity supply is sporadic and
inefficient. Most importantly, Nigeria has very low internet access with less
than one internet service provider per thousand people. The cause for such low
internet access is the ineffective implementation of its service. The
challenges being faced by Nigerian banks in their attempt to ensure a smooth
exchange of electronic data and information are:
i. The need to build a better infrastructure that
will serve as backbone for communication within the banks.
ii. The need to collaborate in sourcing for new
technological equipment that will provide common standard.
iii. The need to get better at internet system
development and operation by bank management.
iv. The need to impress by improving the present
telecommunications infrastructure.
To combat these challenges, the following
were proffered:
i. There should be government and public awareness
to attract long term investments in the telecommunication industry that provide
internet services.
ii. Emphasis should be set on the importance of
maintaining existing infrastructure and equipment (Oyedokun and Oladejo,). Morufu and Taibat, (2012) researched on banker’s
perception on internet in Nigeria purposely to find out how bankers perceive
the benefits and threats associated with internet by investigating banks
employees’ perception on internet banking and its implications on bank service
delivery. The study therefore concluded that government access to data appears
as the most important benefit and risk respectively while reduced. HR charge
high costs for services that are least important for benefits and risk
associated with internet banking. In this study, a lot of research work has to
be done in order to combat the challenges of the internet faced by commercial
banks and other financial institutions in Nigeria, there is need for banks and
the government to educate the public on the use of online and internet banking
products, to invest more into information communication technology
infrastructure and for the government to reduce tax of information
communication technology gadgets.
Singh (2002) opined that internet technology
has introduced new ways of delivering banking services and products to
customers, such as ATMs, mobile banking, online banking etc.. Hence banks have
found themselves at the forefront of technology adoption for the past two
decades. These changes and developments in the banking industry have impact on
service quality, future of the banking activities, and consequently its
continually competitive ability in the world markets since going along with
technology is one of the most important factors of economic organizations
success in general and banks in particular (Nyangosi, 2009).
2.1.6
INTERNAL NETWORK AND COMMUNICATION IN COMMERCIAL BANKS
The application of networks is a vital
part of an effective internet technology enabled system, which is especially
true in the case of banks with a branch network. Local Area Network (LAN) may also be seen as a basic indicator of
the minimum infrastructure required to enable companies to conduct internet or
electronic banking at a substantial level. Examples of the use of internal
network and communication in banking operation include:
Automated
Tell Machine: This is a type of retail banking
technology. It provides major roles by offering convenience, speedy and round
the clock service.
Automated teller machine has the
capacity to make available enquiries on balances, interest and exchange rates,
withdrawals, deposits and account transfers 24/7.
Wireless
Communication: Wireless communications networks are
networks that require no guided media like cables and fibre optics but unguided
media. They are called unguided because they need no physical device to link
the nodes together but radiate or broadcast information in many directions.
Basically, wireless communications employ the use of microwaves, satellites,
radio and infrared transmissions to transport packets of data from one location
to another.
Data
Processing: It is basically used to analyze,
summarize, and convert data into useful information. It may be automated and it
runs on a computer. Data processing can be said as the process of recording,
analyzing, sorting, summarizing, disseminating and storing data.
Teletex
and View Data: Teletext and view data are new
information systems utilizing the domestic television receiver for display
purposes. These systems have been evolved over the last six or seven years and
receivers are now becoming available for the public. It was recognized when the
first proposals were made that it would be essential to produce decoders that
could be designed into receivers with minimal additional cost and large-scale
integrated circuits have enabled this to be achieved, Mother Sole, (1979).
Telecommunication:
Telecommunication is the electronic movement of information from one location
to another. This involves setting up a computer network within the office
(intranet) or outside the office (extranet) to facilitate electronic
dissemination of information, teleconferencing and among stakeholders. Voicemails: It allowed users and
subscribers to exchange voice messages that are used to select and deliver
voice information; and to provide transactions relating to individuals,
organizations, products and services, using telephone. It is used more broadly
to denote any system of conveying a stored telecommunications voice messages,
including using an answering machine.
Computer
Network: Computer network is a group of two or more computer
systems linked together. It is also said as the interconnection of two or more
computer systems using data communication system or devices. It is the
interconnection of stand-alone of computers using networking media and devices.
There are many types of computer networks, including:
Local-area
networks: The computers are geographically close together
that is, in the same building.
Wireless
area networks: The computers are farther apart and are
connected by telephone lines or radio waves.
Campus-area
networks: The computers are within a limited geographic area,
such as a campus or military base.
Metropolitan-area
networks: A data network designed for a town or city.
Home-area
networks: A network contained within a user's home that
connects a person's digital devices.
Value
Added Network Service (VANS): It is a hosted service
offering that acts as an intermediary between business partners sharing
standards based data via shared Business Processes. It is also a private
network used by a company primarily for routing, storing and delivering
electronic data interchange (EDI) messages. Value added networks operated by
large companies for efficient supply chain management with their suppliers,
industry consortiums and telecom providers. Tele-Conferencing and Video: It is a set of telecommunication
technologies where two or more locations communicate by simultaneous two-way
video and audio transmissions. It is also known as visual collaboration.
Facsimile
Transmission (FAX): Fax is the telephonic transmission of
scanned printed material both text and images, normally to a telephone number
connected to a printer or other output device. The original document is scanned
with a fax machine or a telecopier, which processes the contents text or images
as a single fixed graphic image, converting it into a bitmap, and then
transmitting it through the telephone system Rouse, Margaret (2006).
Electronic
Data Interchange: It is simply said as
computer-to-computer exchange of business documents in a standard electronic
format among business partners.
Therefore by moving from a paper-based
exchange of business document to one that is electronic, businesses enjoy major
benefits such as reduced cost, increased processing speed, reduced errors and
improved relationships with business partners.
Electronic
Fund Transfer: It enables bank to transfer funds from
one bank to another within and outside the bank.
You can use electronic fund transfer to:
i. Have your paycheck deposited directly into your
bank or credit union checking account.
ii. Withdraw money from your checking account from
an ATM machine with a personal identification number (PIN), at your
convenience, day or night.
iii. Instruct your bank or credit union to
automatically pay certain monthly bills from your account, such as your auto
loan or your mortgage payment.
iv. To purchase groceries, gasoline and other
purchases at the point-of-sale, using a check card rather than cash.
Internet
Security: It is provided to existing and potential customers
of a commercial bank to protect privacy and security of customer or clients
while visiting and transacting business with the bank on the internet.
Internet
Banking: Banking and customers access to financial services
has transcended traditional retail banking with local branches to branch
networks, internet banking, home banking, mobile banking, to mention a few. The
emerging internet and wireless technologies have enabled the banks to carve a
niche for themselves Ayo (2009). Internet Banking services include the
following: Electronic Mail: is an
electronic means of sending and receiving mails. Its application is popular
within a network environment or through the internet. Therefore with a network
of systems, a note, letter, report, and chart can be sent from office to
another within the company.
Credit
Card: is the payment system that involves no account
debit at the end of each transaction.
Electronic
and Mobile Payment System: Electronic payment system that
works in conjunction with electronic commerce, while Mobile payment system is
used by mobile commerce.
Personal
Computer Banking (PC): allows the bank’s customers to
access information. 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 is a form of banking transaction carried out on
the internet.
There must be internet access and transaction is through a
personal computer or mobile devices.
Online Banking:-
Is a synonym to internet banking but predominantly used to reference banking
automation as against manual operations.
Mobile
Banking: has brought about ease, convenience, privacy and
security of online banking through mobile devices that neatly fit into one’s
purse or pocket based on SMS facility.
2.2 THEORETICAL FRAMEWORK
2.2.1 INTERNET REVOLUTIONS,
INFORMATION AND GROWTH
Although tremendous technological
advances took place over the past 100 years in several sectors, such as
transport, communications, electrification and medicine, recent ones are much
more comprehensive and powerful. Their salient characteristics involve
convergence and interaction of many strands of technological change, with
social consequences far more profound and far more difficult to foresee. They
fall into three basic categories or strings of technical changes: in materials,
in biotechnology and in information (Hallberg and Bond, 2000). Research has
discovered many new, innovative materials. Transport enjoys lighter materials
for fuel efficiency; health care takes advantage of dynamic images and
intelligent prosthetics; and the energy sector benefits from many new materials
as well.
The banking business is becoming highly
information technology based due to its inter-sectoral link; as it appears to
be reaping from most of the benefits of revolution in technology (Internet), as
it is seen by its application to almost all areas of its activities (Akinuli,
1999). Internet has broadened banking and
as a result of this it has changed the nature of banking in competitive environment
in which they operate or domiciled. A wide opening has therefore been
experienced around the world for banks and they are currently taking due
advantage of these innovations to provide improved customer services in the
face of competition and faster services that enhance productivity (Akinuli,
1999; Ovia,2005). Internet advancement facilitates payments and creates
convenient alternatives to cash and cheque for making transactions. Such new
practices have led to the development of a truly global, seamless and Internet
enabled 24-hour business of banking. Internet advance in payments are important due
to the fact that it will be feasible to outsource quite a number of the banks
role in the payments system. Also banks regulation can be more technologically
dependent and better focused rather than focusing on conceptual guidelines. Internet revolution both in terms of innovation rate,
speedy operation, and cost per unit (portraying reduction in average total and
marginal costs) has made a good number of banks embrace the use of Internet infrastructure
in their operations (Akinuli, 1999). In today’s
business, competition, deregulation and globalization have compelled Banks to
offer service 24 hours around the globe, whereas the significance drawback, on the
other hand, lies in its inconvenience and security factors. However, both these
factors have a significant and profound impact on banks performance and
customer service delivery. The relationship that revolves between Internet expenditures, banks performance delivery is
conditional upon the extent of network effects. If the networks are low, internet
is likely to:
i. Reduce payroll expenses.
ii. Increase market share.
iii. Increase revenue and profit.
Furthermore, in a broader perspective, (Internet),
deregulation and globalization in the banking industry could reduce the income
streams of banks and thus the strategic responses of the banks, particularly
the trend towards internal cost cutting, mergers and acquisitions are likely to
change the dynamics of the banking industry. This chapter seeks to determine if
banks have earned higher income and delivered a high quality service than in
traditional way. The main issues that can prevent consumers positively include
the convenience aspect of the service, ease of use and its compatibility with
their lifestyle.
2.2.2
CONTIGENCY THEORY
Contingency theory suggests that internet
service should be designed in a flexible manner so as to consider the
environment and organizational structure confronting an organization.
Internet systems also need to be
adapting to the specific decisions being considered. In other words, internet
systems need to be designed within an adaptive framework. Review of accounting
information system literature also indicate that most AIS studies have
incorporated contingency factors such as organizational structure, business
strategy, and environmental condition in their research model but have
neglected the influence of Internet and IT
on AIS design. Furthermore, the few studies that have examined the relationship
between AIS design and Internet/IT have defined Internet/IT in a narrow
perspective (Ismail, 2004). Similar to internet researches, these studies
viewed Internet from the technological perspective only but failed to
incorporate other perspectives of its sophistication such as informational,
functional and managerial. Hunton and Flowers (1997) suggested that a more
comprehensive AIS study is needed to explain the relationship between Internet
and accounting and its subsequent impact on organization in general and
accounting/accountants in particular. Furthermore, most of previous Internet
and AIS studies were conducted in developed countries (Ismail and King, 2005).
Very few of such studies have been
carried out in developing countries especially in the Middle East. Due to the
continuous flow of considerable amount of empirical studies which investigate
the contingency factors and accounting and/or internet usage and indicates the
importance and vitality of this theory, this study is theoretically and
empirically constituted upon contingency theory which has long been applied in
both accounting and internet system
disciplines. The contingency theory suggests that an organization's structure
is based on contextual factors such as environmental conditions, business
strategy, organizational structure, production technology, and management style
(Ismail and King, 2005).
2.2.3 BUSINESS MODELS, COMMERCE AND
MARKET STRUCTURE
The major way in which internet is
affecting work in today’s organization is by reducing the importance of
distance. In industries, the geographic distribution of work duty is changing
significantly. Therefore for instance, some software firms have found out that
they can actually overcome the tight local market for software engineers in
sending projects to India or other nations of the world where the wages are
reduced. These software are internet based and web application. Furthermore, this type of arrangements can
take advantage of the time differences so that critical projects can be worked
on. Firms today can outsource their
manufacturing to other nations of the world and rely mostly on internet to keep
marketing and distribution teams in close contact with the manufacturing
company. Internet can enable a finer division in terms of labour among
countries, which in turn affects the demand for various skills in each nation. Internet
enables various types of work and employment to be decoupled with one another.
Firms have more freedom to locate their economic activities, labour, capital,
creating greater competition among regions in infrastructure, and other
resource markets.
2.2.4
THE ERA OF MODERN BANKING IN NIGERIA
Nigerian banks especially the new
generation banks, have realized the imperative of good and prompt services.
Some customers lost their deposits in
the erstwhile technically- insolvent/distressed banks. Customers have now
become wiser, more discerning, alert and sophisticated with regards to choosing
where it is safe to put their money, and also where they will be served
promptly. Thus, they have started looking at the level of service and
professionalism of the banks before depositing their funds. Proximity to the
bank is no longer the issue: safety and the level of service, with regard to
the quality, efficiency and speed have become the major imperative. The banks
have realized that the way they can provide quality service is through the use
of modern technology. Hence, there is a growing need for adoption of internet in
the Nigerian banking operations. The new generation banks make use of internet
service to provide efficient, online and real-time services.
This therefore means that their
customers can, for the first time in the history of banking in the country go
to any part of the country where there is a branch of their bank and make
withdrawals or conduct an increasing range of other banking business. Before
the new era of banking in Nigeria, the banking industry was characterized by
inefficiency and truly frustrating service.
But today, most banks in Nigeria compete
mainly via the use of technology and the internet being the vehicle of these
technologies on the amount of time it takes to service their customers.
Services in the new generation banks now take up to 5-10 minutes to complete,
as opposed to hours of queuing in an unfriendly and uncontrolling environments.
As a result of this, banking operation in Nigeria has become internet based
delivery systems; the new generation banks have become very profitable. They
have introduced integrated banking systems, using WANs. Thus their customers do
not need to carry cash for long distances.
2.3 EMPIRICAL FRAMEWORK
2.3.1 THE GROWING NEED FOR INTERNET
Thong (1999), attempted to consolidate
the myriad of internet adoption research by developing an integrated model of internet
adoption. In the last decade, the force of internet has transformed the
business environment.
We are in the midst of a paradigm shift
from the industrial paradigm of wealth creation to the information paradigm of
wealth creation; and internet is the driving force behind these changes
(Elliot, 1992). During this same time period, the field of accounting has
undergone an extraordinary transformation relative to its use of internet in
commercial banking operation. Internet
has increased our ability to capture, store, analyze, and process tremendous
amounts of data, increased our ability to change business processes, and has
significantly impacted on the control process. The American Institute of
Certified Public Accountants (AICPA) has recognized the growing importance of the
Internet. The AICPA created the top 10 technologies process and the Information
Technology member section in the late 1980s and early 1990s. Furthermore, the
AICPA created the Certified Information Technology Professional (CITP)
designation, which is a CPA who is credentialed as a technology professional
and recognized for his or her unique ability to bridge the gaps between
business and technology. The Institute of Management Accountants (IMA) also
recognized the growing importance of internet technology. In 1990, the IMA
warned that accountants in banks who stay on the traditional accounting turf
risk being overtaken by computer experts (Seigel and Sorensen, 1999). According
to Ahamadkaleem, (2008), opined that bankers in Pakistan perceive internet banking
as a tool for minimizing inconvenience, reducing transaction costs and saving
time.
Similarly, they believe that internet banking
increases the chances of government access to public data, increases the
chances of fraud and that there is lack of information security. Madueme (2010),
researched on evaluating banking productivity and ICT using Translog production
function in Nigeria, the results showed that bank output such as loans and
other assets increased significantly to charges in expenditure on internet. The study recommended on the need to increase
investments in internet and information technology in order to increase
productivity of banks. Advancements in internet have enabled companies to use
computers to carry out activities that were previously performed manually.
Accounting systems that were previously performed manually can now be performed
with the help of internet where statements of account are being sent to
customers. Therefore, improvements in the internet have facilitated the use of
management banking procedures. Also advancement in internet has brought about
many changes and competition among banks and non-bank financial institutions
which raise concern as to why some people adopt one distributional channel and
others do not. New services are difficult to evaluate where quality of
trustworthiness dominates (Patricio, 2003). It is important to study the impact
of internet based on bankers’ perceptions and behavior (Lymperopoulos and
Chaniotakis, 2004).
Internet -based distribution channels
reduce personal contact between the service providers and the customers, which
inevitably leads to a complete transformation of traditional bank customers’
relationships (Barnes and Horwlett, 1998).
2.3.2 BRIEF HISTORY OF CASE STUDY
Sterling Bank Plc
originally incorporated in 1960 as Nigeria Acceptances Limited (NAL). The bank
was licensed as Nigeria’s first merchant bank in 1969. Consequent to the
indigenization decree of 1972, the Bank became fully government owned and was
managed in partnership with Grindlays Bank Limited, Continental International
Finance Company Illinois and American Express Bank Limited between 1974 and
1992. In 1992, the Bank was partly privatized and listed as a public company on
the Nigeria Stock Exchange (NSE).
In January 2006, as
part of the consolidation of the Nigerian banking industry, NAL Bank completed
a merger with four other Nigerian Banks namely Magnum Trust Bank, NBM Bank,
Trust Bank of Africa and Indo-Nigeria Merchant Bank (INMB) and adopted the
Sterling Bank name. The merged entities were successfully integrated and have
operated as a consolidated group ever since.
In line with the
Central Bank of Nigeria’s repeal of universal banking, Sterling Bank now
operates as a national commercial bank, disposing of holdings in subsidiaries
and affiliate companies.
In mid-2011, Sterling
Bank Plc acquired the franchise of the erstwhile Equitorial Trust Bank.
Over the years, we have
taken great strides achieving profitability and growing to 160 business offices
complemented by 3,800 alternative delivery channels nationwide.
As at December 2012,
Sterling Bank's total asset was valued at N707 billion [over US$4.61 billion].
Origins
as NAL Merchant Bank: Sterling Bank traces its origins back
to 1960, when its parent institution, NAL Bank commenced operations as
Nigeria's first merchant bank. After the indigenization decree of 1972, it
became fully government owned. From 1974 to 1992 in was managed in partnership
with Grindlays Bank Limited, Continental International
Finance Company Illinois and American
Express Bank Limited. In 1992, the bank was partly privatized and listed
as a public company on the Nigerian Stock Exchange (NSE). Eight years later, in
2000, the federal government sold its residual interest in the bank,
effectively making it a fully privatized institution.
No comments:
Post a Comment