CHAPTER TWO
LITERATURE
REVIEW
2.1
Introduction
In this chapter, the literature on the
role of internet in promoting the efficiency in Nigeria commercial banks will
be reviewed. Also included is the concept of Internet, theories of internet and
empirical analysis of internet as it has
been the driving force behind the rapid change in the banking sector.
2.2 Conceptual Issues
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.
2.2.1
Concept 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.
2.2.2
The 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.
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