The Impact of ICT on Productivity within the Nigerian Banking Sector

Introduction

Background

The Banking industry is considerably one of the largest industries in Nigeria providing employment for an estimated twenty two thousand people nationwide and generating 9% of the annual GDP of the country. Nigeria is considered to be one of the fastest growing telecommunications nations in Africa, investing heavily in ICT and related information technology Chiemeke et al (2006). One of its major investors has been the banks, however with their major investments the use of ICT has arguably had an effect on efficiency and has made operations faster nevertheless there has been no major evidence that indicates that they have increased productivity, productivity been an important factor for banks and other organizations as it can help drive economic and organizational growth and most importantly help organization increase their profit.

This study delves into the realms of the banking industry in Nigeria in an attempt to discover the impact of the use of ICT has had on productivity. This study will incorporate primary and secondary research in an attempt to determine if the use of ICT has improves productivity in the banking industry and also to get a better understanding of the industry or not and their ICT practices. The outcome will be a set of recommendations aimed at suggesting possible ways to use ICT to improve productivity. This study aims at informing and advising the people in the Nigerian Banking industry considering the how use of ICT can be further used to improve productivity as well as academics who seek to broaden their insight of the industry in such light. The research and discussion will be condensed to a set of recommendations.

Reason for Research Topic

The motivation behind conducting this research into the impact the use of ICT has on productivity in the Nigerian banking industry comes from the lack of such research in the region as a series of similar studies have been carried out in other developed countries. Nigerian is often regarded as the giant of Africa more so they are said to be highest investors in the use of Information communication technology in Africa, the use of ICT has no doubt contributed to the growth of the various industries in the country however there is no direct knowledge as to if the use of ICT has increased productivity in the banking industry, thus the purpose of this study is to investigate the impact of the use of ICT in the Nigerian banking industry on productivity.

 Study Aim and Objectives

The aim of this study project is to answer the question “does the use of ICT improve productivity in banking in Nigeria”. In order to meet this aim, this study seeks accomplish the following objectives, identify

• If the use of I.C.T improved productivity in Nigerian banking industry
• How can ICT be used effectively to impact productivity.
• The benefits of ICT in banking.
• The problems of ICT in banking.

Project Constraints

In the course of writing this dissertation a few constraints where met as predicted in the project initiation document, this constraints include:

• Access to information: facts and information where needed and they couldn’t be gotten off the internet as such they had to be physically collected from the office of the central bank of Nigeria and relayed back via email.
• Falling ill: in the process of writing this project the author fell ill two times living the project unattended to for a total of three weeks
• Lack of prior knowledge: the author had no prior adept knowledge of the points that will be discussed in this study as such the author had to carry out extensive research and reading so as to broaden the gap of knowledge.

Study Methodology

Literature Review

A full review of literature will be given, which will set the scene gives a general overview of the banking industry, the use of ICT and productivity, however it later goes on to give a more information of the Nigerian banking industry which is the subject of this study and its challenges in regards of the use of ICT and how they in turn affect productivity.

Primary Research

A survey will be carried out to help determine the impact ICT has on productivity in Nigeria. A survey is a popular strategy used in business and management research. Surveys are often carried out through the use of a questionnaire as the data is standardised and allows for easy comparison and they allow the collection of a large amount of data from a sizeable population in a highly economical way (Saunders, Lewis and Thornhill, 2003). All the data acquired in this survey was through the use of a questionnaire issued to certain employees in a number of banks. Having completed the primary research a number of analysis tools and techniques were used to analyse the information, an overview of the tools and techniques used is in chapter 4.

The banks that were involved in this study are based in Nigeria. In the course of research for this study the author discovered there has been little or no study on the research in this topic in this region of the world compared to the UK and other European countries as such the author decided to use the Nigerian banking industry as the centre of research.

The survey questions are to be spread to as many banks as possible with the hope of getting responses from 15 of the 25 banks in the country; however the survey questions will be spread amongst a minimum of two branches per bank including the headquarters of those banks; however there is no certainty that it will be spread in that order as the survey is online, and also there is no assurance that there be a 100% response rate. The survey should take about 2weeks considering the various factors that may pose challenge and an 80% response rate are expected.

Case study approach

A case study is defined as “a strategy for carrying out research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence”, (Robson, 2002). In summary the case study strategy will help guide and gain knowledge and rich understanding of the primary research carried out in this study.

Case study strategy has the ability to generate answers to the various questions such as ‘why’, ‘what’ and ‘how’; however a good case study can enable the challenge of an existing theory and provide a good source for new hypothesis (Saunders, Lewis & Thornhill, 2003).

Survey research

Introduction

This study is based on an investigation into the impact of ICT on productivity in the banking industry. For the purpose of this study no particular bank was the sole focus of the research as information from one source will not be enough to assess the extent as such for this study the survey will be carried out using a number of different banks with the aid of a questionnaire which includes both qualitative and quantitative data.

Method of Research

In conducting primary research a number of activities can be used such as questionnaires, interviews, tests and documentary analysis, but for the purpose of this research the questionnaire method was the only method chosen as it is cheaper, faster, has a larger response base and can cover a lot of ground compared to other methods.

Qualities of a Good Research Question

In carrying out a survey it is important that the questions asked are the right questions and the survey is well structured else it provides inaccurate information which will affect the credibility of the result of the survey. Punch (1998) gives a number of criteria that will help in creating good research questions, these criteria’s include:

• Clear: The questions should be easy to understand and unambiguous.
  Specific: The concept should be clear enough to connect the data to the indicators.
  Answerable: There should be a clear view of what data is required to answer the question and how such data will be obtained.
  Interconnected: The questions must be related to each other in some meaningful way, rather than be unconnected.
  Substantively relevant: The questions should be interesting and worthwhile questions for investment of research effort.

Punch (1998) further states that questions that do not possess this qualities are generally bad research questions, as they are unclear and not specific enough, Punch (1998) also states two problems that often occur in building questionnaires, they include value judgement and causation, as such in building the questionnaires such characteristics and problems will be avoided.

Structure of Survey

The survey is divided into two sets one for each set of people. The first questionnaire seeks information on the benefits, problems, impact of ICT products on productivity and the impact of ICT measures on productivity, however the questionnaire itself is structured into 6 major sections which seek a particular kind of information which include

• Demographic information
• Information on current level of ICT investment.
• Information on ICT benefits in general to the bank,
• Information on the negative effect of ICT on productivity to the bank.
• Information on the impact of IT measures on productivity.
• Information on the impact of a number of specific ICT tools and their impact on productivity.

The second section of the questionnaire seeks information on ICT input and output measures and the impact of ICT measures on productivity, it is divided into 5 sections which include:

• Demographic information,
• Information on the impact of ICT on bank outputs.
• Information on the impact of ICT on bank input.
• Information on the impact of IT measures.
• Information on the impact of ICT on financial services.

Design of Questionnaire

In designing this questionnaire, a number of questions where adopted and adapted from other questionnaires and articles found in the course of research, a few questions were also developed in completing the questionnaire.

The questionnaire is an online based and in designing these questionnaires two types of questions where adopted; open and rating questions, Saunders et al. (2003) describes these questions as:

• Open Question: These questions are used in questionnaires when the author is uncertain of the participant’s response, such as in explanatory research.
• Rating Questions: This type of question is used to collect opinion data, a common example is the Likert scale in which it gets the participants opinion how strongly they agree or disagree with a statement. The Likert scale uses a 5 point rating scale which ranges from strongly agree to strongly disagree, Saunders et al (2003).

Terminologies used in Questionnaire

A number of terminologies were used in this questionnaire such as Productivity, IT inputs, IP outputs and IT measures. In order not to confuse the participants or make them fill inaccurate information due to the lack of understanding of the terms, the terminologies mentioned above were well defined and explained in the portion which acts as the introduction to the survey.

Method of Distribution

The method for distribution used in this study is via email as the survey itself is online. This was chosen over paper distribution as it saved the cost of transportation and also the time it will take to get back the forms, scan them analyse and go through the various scanned document, and finally as bank employees constantly have easy access to the internet, it will be easy to access and complete. A message will be written in the email sent; the message will essentially act as a cover letter that describes the purpose of the survey.

Pretesting the Questionnaire

Having completed the design of the questionnaire was tested out on a small group to see if the questions are clear and understandable. Robson (2002) states that pretesting a questionnaire is good as it helps check if the questions are clear, simple, unambiguous and if they do not meet those criteria’s the participants involved in the test should give their thoughts and opinions as to what questions aren’t clear and how they could be made clear. The amount of time taken to complete the questionnaire, this feedback will be used to further improve the structure of the questionnaire

Changes Made as a result of Pretesting

Pre-testing feedback was mostly positive. The people involved in the pre testing where satisfied with the length of the questionnaire based on its purpose, however most people where of the impression that the questionnaire can be completed by the general public, as such at the top of the questionnaire a change was made where it was stated who was qualified to answer the questionnaire. The only major negative comment was on the last set of questions in the second questionnaire, the comment was that the question was not clear and easy to understand enough and as a result of that the questions where rephrased.

Intended Participants of Survey

This survey, compared to most others, does not seek information from the general public, it seeks information from certain employees of the bank as they will be the most capable in answering questions accurately as information is made readily available to them. These employees include:

• IT Manager
• Finance Manager

The first aspect of the questionnaire seeks information on the benefits, problems, impact of ICT products on productivity and the impact of ICT measures on productivity as such the IT manager or any other person at that capacity will be the most suitable to answer such question. The second section of the questionnaire seeks information on ICT input and output measures and the impact of ICT measures on productivity, as such this portion of the questionnaire can only be completed by the Finance manager or any other person at in such capacity as the information will be made readily available to them. In completing the questionnaire the participants will have to state their roles or positions in the organisation to make sure the information is gotten form the person most adequate to answer it.

Ethics of a Questionnaire

A major concern of people who are involved in surveys is giving their information to a third party as such information can be gathered and misused. The questionnaires will therefore be carried out in anonymity as participant’s identity will not be revealed and the questionnaire will adhere to the data protection act and several other ethical standards that might be put in place.

Final Version

Having completed and made changes to the questionnaire the links where distributed by emails.