The Effect of Computerized Accounting Systems on the Performance of Banking Industries in Nigeria
Chapter One
OBJECTIVES OF THE STUDY
The purpose of this study is to identify the effect of computerized accounting systems on the performance of banking industries in Nigeria.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
BANKING IN NIGERIA
As a result of the increased demand for customers deposits, Nigeria banks especially the new generation banks, have realized the importance of good and prompt customers services. Also due to the fact that some customers lost their deposits in the erstwhile technically-insolvent or 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 where they would be served promptly, preferable in a pleasant courteous and friendly environment. Thus, they have started looking at the level of service and professionalism of the banks before depositing their funds. Proximity to the banks is no longer the issue, safety and the level of service with regards to quality, speed and efficiency has become the major imperative [Alu, 2002].
Idowu, P. [2000] asserted that on the part of the banks, they have realized that one way in which they can provide quality service is through the use of technology. Hence, there is a growing rate of adopting new technologies in Nigeria banking operations.
Moreover, there is growing evidence that customers have started associating quality of service in a bank with the bank possession of an online, real time system. In fact possession of such a system is now judged to be the sine qua non of a high quality banking service in Nigeria. So far a bank to be perceived as providing high quality service that banks has to have an Information Technology [IT] system, which it uses to deliver services to customers in a more timely, friendly and considerate manner at no extra cost to the customers.
THE APPLICATION OF COMPUTER TO BANKING OPERATION
The introduction and application of the computer based system in banking operation is a recent development which evolved a system, which gathers analysis and processes information suing electronic data processing equipment. The issue of the computer based system cannot be dealt with in isolation without mentioning information technology.
Information Technology [IT] can be defined as the modern handling of information by electronic means which involves its access, storage, processing, and transportation or transfer and delivery. [Ige, 1995].
According to Goddy Nwosu, writing for the Populi bank news letter of African Continental bank Ltd.
“The greatest innovation that many banks have to tackle this centre is the introduction of computer” what could be regarded as the computer revolution in the banking industry. Still talking on the computer revolution in banking industry Ray Vine a senior general manger of Barclays bank of the United kingdom [1984] asserts that with the quiet revolution that by the end of the century, new technology would have brought o end the branch network system in the United Kingdom as we know it today, this new technology he called the computer”. So many writers have attributed this quiet revolution to the inefficiency of manual operation, the rising cost of manual operations, the complexity involved in the use of manual information storage of paper work.
Clifford, G. [1984] states that, the rising cost and ever increasing volume of paper work have forced banks in the wealthy countries of the world to mechanize their services and make use of machinery to try and replace the old style.” In many banks, the clerical workload was boring and monotonous in nature and therefore becomes a labour of administrative drudgery. When automation and computer were first introduced into banking. It was seen as a way of helping out but it has gradually developed a momentum of its own and banks are now struggling to meet up with automated banking at the same time making sure that it does not destroy the individual of the banks or their relationship with their customers.
The computer as already defined is an electronic device which stores information. According to “Populi bank news letter of African Continental Bank Limited [page 28] writing on the impact of computers asset that “computer has the ability to increase transmission, processing and reproduction speeds”.
In analyzing the impact of computer to our banks an economist Akinsanya O. a principal computer manager for West African Examination Council on the myths and realities of computer” [page 4] state that “computer has started having a positive impact on the economic development of Nigeria”. It is therefore obvious that computer is relevant to the development of Nigeria economy.
CHAPTER THREE
RESEARCH METHODOLOGY
The purpose of this research work is to expose the impact of computer in processing accounting information in Nigeria commercial banks, thus this chapter deals purely on how the researcher carried but the research work and the instruments used.
RESEARCH DESIGN
Research Design is concerned with the fundamental question of how the subject matter of the study will be brought into scope of when and how they will be applied within the limits of the researcher. Research according to Osuala, [1987] is simply the process of aiming at dependable solution to roblems through the planned and systematic collection, analysis and interpretation of data. Design on its own is used in statistical sense to refer to the property of statistical analysis necessary to prepare data for interpretation [Ikeagwu, 1998].
This research work is designed to interpret and report on the impact of computerization of accounting information processes in commercial banks with the view to stress the significance and effect of the computer in bank operations. The work is based on recent findings in the survey conducted and those of historical research from several documents.
AREA OF STUDY
The area of study was First bank of Nigeria Plc 131 Broad Street and Lagos branch. A study was also carried out at the Enugu branch at 3 Garden Avenue. This was in the bid to acquire regional view of respondents as to the issue of computerization of the bank.
POPULATION
Population could be defined in terms of elements, sampling units, extent and time. For this research work, the target population for the investigation was carried on mostly staffs of First bank of Nigeria Plc, who are in one way or the other directly connected with the use of computers in two major branches used for the study at 3 Garden Avenue, Enugu and 131 Broad Street Lagos. They are 60 in number.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter deals with the presentation and analysis of data collected from the respondents by way of questionnaire administered by the researcher.
From the presented data below, it is deducted that thirty-five [35] respondents representing 58% of the 60 respondents that filled and returned the questionnaire were male, while the remaining 25 [twenty-five] were females. 97% [ninety-seven] of the total respondents were staff while the remaining 3% were non-staff of the bank.
CHAPTER FIVE
SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION
This chapter will discuss and highlight the findings of the research work and their implications. It will not discuss the issue of computers in processing of accounting information in the banking sectors as one might want to do considering how far the developed nations have gone in that aspect. That is not the object of this research work. This research work was carried out to find and determine just how far computerization has carried the banking sector in Nigeria using First bank of Nigeria Plc as a case study.
Its major objective being to find out what effects computers have had no our banking system especially the accounting information and if any, to what extent. It is hoped that the work will also serve as a source of materials for further research in this area of investigation.
SUMMARY OF FINDINGS
Findings on this research work were based on the analysis of information gathered from the type of questionnaire administered.
Emphasis, however was placed on variables relevant to the topic under consideration. The authenticity of this research is validated by the fact that the bank used for this research is well computerized.
From the results, it was evident that in spite of this short coming, computers have given rise to better storage of information and a greater efficiency in the rendering to services to customers in the banking sector of the nation. Computers have reduced the daily workload in banks a great deal. What this implies is that with the introduction of computer in banking, it is expected to increase effectiveness, efficiency and reduction in the running cost of operation/staff welfarism in the long run as all this are possible with the minimum amount of work put in by each individual staff.
As mentioned earlier, there are short comings found in Nigerian Bank operations with computers such as:
- Inadequate trained personnel to handle the computer
- Lack of locally made parts and incompetent engineer to undertake the machine repairs and
- Due to lack of pre-installation planning, computers installed in some banks have been found inadequate for the numerous operations of
- Most banks fail to extend computer services to their branches, they computerize only their main branches. This is not productive, as the impact of the branches of the bank cannot be ignored in assessing the overall bank
- Frequent breakdown in transmitting area network program, occasioned by epileptic supply of
- On line and off line problems and subsequent systems
- Slow processing speed of computers and lack of commitment by computer operators.
RECOMMENDATIONS
From the analysis of the annual report of various banks, there is a clear indication that banks which have imbibed the computer culture are making greater returns in their transactions. Thus, it would be a worthy cause for banks which are yet to tap the benefits of computerization to learn from the financial reports of these other banks. Take the First bank of Nigeria Plc which is among the most capitalized bank in Nigeria as stipulated by the Nigeria Stock Exchange weekly report [Dec. 1998] edition. This is as a result of its total paid up capital, its persistent increase in returns due to proficiency in computerized services and efficiency bank management. Based on the researcher‟s findings, the following are recommended:
- Computer Information: there is need for attention to be paid to computerliteracy by bank Courses on modern computer and information technology should be encouraged. Also staff needs to be informed on computer processes and just how it affects the “conventional” banking. This will lead to greater appreciation by the customers.
- Personnel Training: as has already mentioned in this research work that lack of trained personnel is one of the banes of the computerization of the banking sector in Nigeria. Bank should therefore engage in personnel training so as to turn out staff that are more efficient and trained with experience to handle these equipment.
- Increased Computer Services: it would pay banks to subject a lost more banking functions to computer application. Some of these computer services include modern telecommunication and information technologies which includes: telephones, ATM, facsimile, local area network, computer system, MLCR [Magnetic Link Character Recognition], Very Small Aperture Terminal [VSAT], Electronic Fund Transfer and Wireless radiophone, etc. These new banking innovations should be introduced and encouraged to facilitate better banking
RECOMMENDATIONS FOR FURTHER RESEARCH
The original use of computers in accounting focused on automating the record keeping functions, manual books were replaced by computer “books” thus, computer made accounting functions faster, less expensive and more accurate.
However, this research work could not exhaustively discuss all the problems militating against the full usage of computers in processing Accounting Information. The researchers do suggest that further research should be carried out in this area.
CONCLUSION
The study was carried out to determine to what extent computers have affected the processing of accounting information in the Nigerian banking business; with the First bank of Nigeria Plc as a case study. The main aim being to find out whether the computer has had any effects on the banking sector and if so, to what extent it has gone and to give recommendations which have been made based on the findings of the research carried out.
Based on the research work, I hereby conclude that;
- Computerization has made bank workless burdensome and has improved the efficiency of bank
- Computerization of accounting information has led to efficiency information
- Computers have led to an increase in the bank deposit
- Computers have not contributed to a reduction in the cost of running bank
- Computerization of accounting information has improved the speed of services to
- Banks should append their computer personnel to highly reputable computer engineering firms for proper training to reduce the cost of maintenance and
- Information on the effects of the computer in banking ought to be intensified
BIBLIOGRAPHY
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