COMMERCIAL BANKING IN THIS MILLENNIUM (A CRITICAL APPRAISAL OF ITS DEVELOPMENT IN THE WORLD OF TECHNOLOGY)

1.0 Introduction

1.1 General Overview of the Study

Commercial banks are largest operators in the money market. The first commercial banks, the African Banking Corporation started operation in Lagos in 1892. It is today known as the First Bank Limited. The 30s and 40s witnessed the mushrooming of mainly undercapitalized and mismanaged indigenous banks which collapsed as suddenly the emerged. The collapse of the led to the promulgation of the banking ordinance of 1952, which was the first ever attempt to put down the conditions under which a bank can operate.

These banks carried on banking operations until 1920, when the banking of British West Africa became known as the first bank of Nigeria. This bank has this remained the first commercial bank though as the remained the first commercial bank though as the years rolled by more commercial banks have been on the increase with branches scattered all over the federation. The role of commercial banking can be linked to oil that lubricate the economy and cannot be over emphasized “indeed, the commercial banking can be linked to the oil lubricate the wheel of the economy which would have brought to a hall the entire industrial set up”. (The Nigeria enterprise banking in Nigeria march 1983).

This banking industry offers a lot of services such as the mobilization of funds, creation of credit and over all development over the years in the areas of technology in the quest of satisfying their customers. “Banking is all about competition all other competition, the ultimate aim is to win whatsoever is at stake for banks the center of attraction are people and institution. All the banks big and smaller locked in a fierce battle to win and keep their patronage through the various changes and development in the level of technology. Building and sustaining patronage takes great effort and years of consistency so for a Bank to maintain a wining streak. It must definitely have a competitive edge (Business concord Dec. 14 — 19 1998).

First bank of Nigeria plc, one of the national biggest banking group has over century concerning most laurel in its sectors in today's banking where competition is increasingly becoming intense. Banks require more than money, men, material and machine with the explanation of what this millennium and the compliance, of the computer system this millennium, most banks have complied to this and are poised to take banking into greater heights. However, there are many changes which have taken place in the banking in the area of digital banking, electronics fund transfer, credit cards, interest banking and other technological advancements. This study will cover these technologies and the banks associated with it.

With the level of technology and the banks compliance of this millennium there are future expectations from banks which they are expected to provide this also the study will uncover.

However, technology has brought about revolution in the banking industry the business of banking is to becoming more of information management. It has been enabling banks to crystallize their visions while the industry is growing rapidly much in this millennium with sophisticated level of technologies and advancement. Thus, Banks that have complied with the computer compliance programme will be sure to improve on their banking in this millennium even as they introduce more of these technologies which have ended the old banking system such as loss of money through theft, and lossing Transmit, long queues at banks, and outdated machines for inputting information. All these are gone since the introduction of new technologies by this millennium, banking will be a new innovation and taking to greater height.

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1.2 Statement of Problem

Over the years, the banking services have been manually operated even when electrically operated resulted in inefficiency, fraud and attendant loss of time of customers. Associated problem in the banking industry was loss of money by theft and loss either on Transmit or being stolen when they are carried about. The employment of inexperienced and dedicated to work are also the problems faced in the commercial banking industry over the years which banking in this millennium is poised readdress in the years ahead.

Poor level of development in the nation and the consequent infrastructural limitation in the areas of telecommunication and postal services hence relay inadequate information for proper financial analysis. Inadequate information and interaction among the financial institutions are also among the problems which the level of technology in this millennium is out to address.

However, with the banks complying to their system as meeting up with this millennium, the above problems are what it is aimed at advancement by improving the banking facilities and services to customers and the much eroded banking practice and letters of the profession.

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1.3 Objectives of the Study

The purpose of the study are as follows:

1. Carry out systematic assessment in the area of changes as regards development in the area of technology of the present and the past in the banking industry.
2. Make comparison of efficieny with the level of technology of the present and the past in the banking industry.
3. Determine whether technologies and advancement in the banking industry has been an ideal venture with regards to productivity, efficiency and development.
4. Know the impression and expectation of customers in this millennium.
5. Make the recommendation and suggestion to the authorities concerned based on the finding of this work.

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1.4 Scope of the Study

In the regard, scope of the study arose when commercial banks under review is widely scattered in various states of the federation as branches and poised difficulties in reaching all the offices and examine the necessary data needed.

Therefore, this study under examination was limited to the following banks:

1. Diamond Bank of Nigeria plc Owerri.
2. First Bank of Nigeria plc, Owerri.
3. Wema Bank of Nigeria plc Owerri.
4. Union Bank of Nigeria plc, Owerri.

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1.5 Statement of Hypothesis

1. Technological improvement in the banking sector has a significant impact on commercial banks productivity and efficiency in this millennium.
2. The use of modern technology in the banking sector enhances the profit position of the commercial banks in this millennium.
3. The cost of providing technological advancement in commercial bank is greater than the benefit derived from it.

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1.6 Significance of the Study

This study is significance because of the following:

1. It is essentially an empirical inquiry into the impact of commercial banking and its technological development in this millennium.
2. To make people understand and know that commercial banking and its technological development has been very operational for the banks.
3. This study will be of great help to customers bankers even students in management science and others for enhancement of their knowledge in the area of banking in Nigeria.
4. For people to know that in this study various technologies which have been introduced in the banking industry enhance the profit position, improving the level of bank services, increase the level of profitability of the banks and customers satisfaction all these can be seen in the area of domestic fund transfer and international fund transfer system.
5. The study will be of great important to the bankers by reducing cost because the work would have been done by many people is eliminated through this technological changes.
6. Finally, future researchers who may be writing on the same area may find this work useful for reference purposes.

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1.7 Limitation of the Study

This project is aimed at identifying the level of development of commercial banking in the world of technology in the millennium with particular references to first bank of Nigeria plc. However, limitation factor cannot be ruled out. The number of factors among them includes.

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1. Financial Constraints:

The researchers cannot attain the desired scope and depth as a result of financial handicap lack of money and high cost of materials militated against the project work.

2. Time Constraint:

The research was constrained by the time limit.

3. Transportation:

Beside, The high cost of transport prevented the researcher from visiting all the branches all over the world to gather the needed primary and secondary data.

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1.8 Definition of Terms

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1. Automated Teller Machine:

This is a facility with first bank to read tellers and cards. It is a read accessory technology. It allows cash withdrawal anytime.

2. Bank Master:

This is a banking software which has been upgraded to the year 2000 compliance version. This is a software of the computer of C.B.N to meet up with the challenges of this millennium.

3. Customer Self Service Window:

This is a technology which enables customer to access the accounts and obtain balance from their computers and cards.

4. Computer:

This is an automatic electronic device which is capable of receiving inputs, automatically process them and produce output which are made available to the ultimate users of information.

5. Electronic Smart Card Account:

This is a technology available to all state trust bank then. This card contains electronic cash which can be used as substitute for bank note, thereby erasing the problems of cash handling and its attendant risk in their entirely.

6. Electronic Fund Transfer:

This is a technology which enables customers to transact business from locations other than where the maintain accounts such as first bank western union money transfer.

7. Internet:

The internet is a computer network made up of thousand of networks worldwide which enables any computer anywhere in the world to be linked to it.

8. Money Gram:

This is UBA's fast and safe, reliable way of sending and receiving money across the globe.

9. Operation Quick Services:

This is a technology which ensures that customers are attended to within 5 to 10 minutes made possible by the development of seniors officers to cages equipped with state of art computer terminals. It is quite peculiar with union bank.

10. Millennium Bug:

This is a term which refers to the changes in the computer system a compliance to meet up the changes in the digit code of the computer in this millennium. It is called the millennium Bomb.

11. Master Card:

It is like a credit card used for buying of transaction both locally and internationally. It is peculiar with first bank of Nigeria plc.

12. Q — Management:

This is facility available in first bank to identify and signal and ideal cashier.

13. Mail Transfer:

This is an order to pay contained in a letter sent by a banker to his agent in a foreign country.

14. Demand Deposit:

This is an account held with any deposit taking institution (bank) where any or all the money is repayable on demand internet is not earned here.

15. Kitting:

A situation where a customer usually has two or more accounts at two or more different banks or branches, he draws a cheques on his account in bank A, knowing fully well that there are no funds in that accounts, and deposits cheques into his accounts with bank B.

16. Voucher:

This is a receipt or official declaration printed or written to prove that accounts are correct or that money has been paid into ones account. There are some vouchers like travelers voucher, workers voucher.

17. Over Night Loan:

This is bank reserves that are loaned from banks with excess reserve to banks with insufficient reserves. One bank borrows money and pays the overnight interest rate to another bank in order to obtain the lending banks excess reserves to hold one day deposits.

18. Drafts:

it is a means whereby a debtor settles his indebtedness with the assistance of his banker.

19. Bank Lending:

This is the transfer of resources of the bank to the various economic units of the economy through loans, overdrafts, discounting of trade bills.

20. Internet Banking:

This is modern electronic device that make it possible for an account holder to have access to his account in respective of the branch.

21. Telegram Transfer:

This involved the deposit of money within a bank for transfer to a named person in a foreign country.

22. Cheque:

This is an unconditioned order in writing drawn on a banker by the drawer, requiring the bank to pay on demand a sum certain in money to or order of a specified person or to a banker, and which does not order any act to be done in addition to the payment of money.

23. Internal Audit:

This is the mechanism that is set in motion an organization to oversee the activities of internal control, to check and defect errors, irregularities or fraud. It is an independent appraisal of the activity within the organization on the review of operation as services to the management.

24. Money Laundering:

This is the act of concealing or hiding the source of illegally gotten money from the bank by converting cash into untraceable transactions in banks.

25. Cashiering Fraud:

This is fraud committed by cashiers. Example inappropriate record of customers money.