THE USE OF INFORMATION COMMUNICATION TECHNOLOGY (ICT) IN BANKING AND FINANCE SECTOR

 

THE USE OF INFORMATION COMMUNICATION TECHNOLOGY (ICT)  IN BANKING AND FINANCE SECTOR 

Today, Information Communication Technology (ICT) has become a key element in economic development and a backbone of knowledge-based economies in terms of operations, quality delivery of services and productivity of services. Therefore, taking advantage of information communication technologies (ICT) is an increasing challenge for developing countries. There is now growing evidence that Knowledge-driven innovation is a decisive factor in the competitiveness of nations, industries, organizations and firms. Organizations like the banking sector have benefited substantially from e-banking, which is one among the ICT applications for strengthening the competitiveness. This paper presents the current trend in the application of ICT in the banking industries in Nigeria and gives an insight into how quality banking has been enhanced via ICT. The paper further reveals that the deployment of ICT facilities in Banking and Finance sector has brought about fundamental changes in the content and quality of banking. This analysis and clarification of how Banks have used ICT to re-engineer their operations is detailed through literature review and observation. The use and implementation of information communication technology devices were considered in this paper. These are the uses of ICT on Banking and Finance.

 

Information Technology (I.T.) has been defined as the usage of computers , digital technology in various fields of production and service.Here in the banking sector it is used in concepts like Internet Banking , Automated Teller Machine (A.T.M) and Debit & Credit card, etc. It is a general term used for utilizing of electronic technology for business information processes at all levels. The following include some of the major uses of information technology communication in Banking and Finance sector:

1 GSM Banking

This mode of e-banking makes use of the Global System for Mobile communication (GSM) phones as the primary electronic device. GSM has improved the operational efficiency of many banks in the country. The mobile banking services basically allow customers to operate their accounts with the operating banks from mobile phones to a large extent as long as their phones and network support SMS (short messaging service). The user could be able to check account balance up to his two last transactions.

2 Automated Teller Machines (ATMs)

ATMs are a computer-controlled device that dispenses cash, and may provide other services to customers who identify themselves with a Personal Identification Number. ATM dispenses cash at any time of the day and night, unlike the traditional method where customers have to queue for a very long time in order to withdraw cash or transfer funds.

3 Adoption of the ICT Integrated Project

Banks in Nigeria have successfully completed information and communication technology integration project which enables them to communicate easily across as many employees as possible within and outside the country to deliver radically-enhanced customer-eccentric services.

4 Funds Transfer

Customers can now electronically transfer funds across the globe without any problem or delay as compared to the traditional method before the advent of information technology when funds are seriously delayed before they are delivered to the recipients.

5 On-Line Banking

With the aid of information technology, online banking provides the opportunity of paying bills and performing transactions of any kind electronically. Electronic payments can be credited or debited the same day. Customers can make payments for goods or services without necessarily coming in contact with physical cash and running the risk of handling a large amount of money.

6 Electronic Mail

Information technology has given rise to electronic mail which improves communication between individuals, external parties and the bank within or across various geographical regions or boundaries. The availability of online information provides bankers and customers with a powerful vehicle for research.

7 Bankers Automated Clearing Services

This involves the use of Magnetic Ink Character Reader (MICR) for cheque processing. It is capable of encoding, reading and sorting cheques. Also, request for cheque books or purchase of draft can be made and granted via electronic devices that are web-enabled.

Summarily, the impact of information technology in banking industries in Nigeria cannot be over-emphasized. It has provided flexible and convenient services to customers. Most current e-banking applications make use of the Internet which allows customers to obtain current account balances at any time. Customers do not need to bother themselves once money have been deposited or withdrawn from their accounts as most banks in Nigeria employs the use of short message service (SMS) to intimate customers of their balances immediately the transaction is performed.

CONCLUSION

There are indeed no doubts that majority of organizations including the banks have taken the advantage of ICT to enhance their operations. Today most of them have website on the Internet in order to extend their services globally, provide executive services and promote quality of service delivery. Driven by their ambitious aspirations to dominate the African financial services landscape, and under the leadership of a dynamic and visionary management team through information technology, Nigerian banks has been rapidly transformed from being just a bank to a one-stop-shop financial solutions provider. As the economies of Nigeria and Africa continues to improve, following the established path of other emerging markets; that is, increased political stability, improved government finances, growing domestic consumer demand, high commodity prices and significant improvement in other economic indicators, the banks in Nigeria are well positioned as a warrant on the African renaissance story.

It is expected that when the 3G network is operational, it will boost m-Commerce activities in Nigeria but may require further investment in the quality of cell phones. However, there are enormous opportunities for m-Commerce implementation in Nigeria based on the rate of growth and the diffusion of mobile devices. There is prospect for patronage but may be dependent on the available services.