Thursday, February 28, 2019
Adoption of Information and Communication Technology Essay
AbstractNigerian banking exertion has change by reversal extremely ICT-based and is reaping the benefits of expert revolution as evidenced by its drill in most of its trading trading operations. The objective of this write up was to determine if the Nigerian banks pay off failed or succeeded in the acceptation and practice of ICT (see fudge 2.1). An evaluation of the stick withion and hire of ICT al-Qaidas from the periods in the midst of long time 2000 to 2008 indicated steady growth. It is pre centre of attenti unriv anyedd that as of now, the Nigerian banks whitethorn begin attained their ICT potentials in their operations, though with any(prenominal)(a) ch aloneenges. The story concludes that the word sense of ICT has influenced the content and quality of banking operations. This report card recommends that enthronization in information and dialogue engineering science should form an important comp adeptnt in the overall schema of banking operators to master effective operations.Keywords nurture, Communication, applied science, Banking & persistence.INTRODUCTIONInformation and Communication engineering (ICT) is the mechanization of processes, controls, and information production consumption computers, telecoms, softw be dodging and other gadget that ensure smooth and efficient running of activities. It is a term that largely transits the union of electronic applied science for the information needs of a business at all directs. ICT has surpassed the division of support attends or scarcely electronic entropy processing its fields of diligences are slightly global and unlimited. Its devices especially the profit and modern computer e chain weapons facilities have further streng whereforeed early modernizations like the teleph wizard and fax. early(a) ICT devices hold data science equipment, situationory automation hardware and go, telecomputing and teleconferences using real time and online dust (Adeoti , 2005).The application of information and communication technology concepts, techniques, policies and implementation st countgies to banking operate has take a subject of fundamental importance and electric shocks to all banks and indeed a prerequisite for local and global private-enterprise(a)ness. Information and Communication Technology (ICT) instantaneously affects how managers decide, how they plan and what products and redevelopments are offered in the banking industry. It has continued to change the means banks and their corporate relationships are organized valet de chambrewide and the variety of innovative devices functional to enhance the speed and quality of service legal transfer.Harold and Jeff (1995) contend that fiscal service providers should modify their conventional operating practices to remain feasible in the mid-nineties and the decades that follow. They claim that the most signifi hindquarterst shortcoming in the banking industry today is a wide spread failure on the spark off of aged(a) management in banks to grasp the importance of technology and incorporate it into their strategical plans accordingly. Considering ICT to ensure banks survival, Woherem (2000) claimed that sole(prenominal) banks that overhaul the whole of their payment and delivery systems and slang ICT to their operations are likely to survive and prosper in the sensitive millennium.He advices banks to re-examine their service and delivery systems in order to by rights position them at bottom the frame attain of the dictates of the dynamism of information and communication technology. The banking industry has witnessed tremendous changes linked with the developments in ICT over the years. Nigerian banks have undergone changes in their operations since the consolidation process of 2005, when some banks were forced to merge with others to go by Central Bank of Nigerias (CBN) recapitalisation fund necessary for operation. Until then, most of the b anks operated paper based systems at inception and latterlyr adjusted at the break of day of ICT revolution.In recent times, ICT, which basically involves the call of electronic gadgets especially computers for storing, analyzing and distri thoing data, is having a dramatic influence on almost all aspects of individual lives and that of the subject economy the banking orbit inclusive. The increasing physical exertion of ICT has allowed for integration of different scotch units in a spectacular way. This phenomenon is non only applicable to Nigeria only when other economies of the world, though the level of their recitation may differ. In Nigeria, ICT usage especially in the banking sector, has considerably change, til now though it may not have been as high as those observed for advanced countries (Adeoti, 2005 Adeyemi, 2006).The defecate of ICT in the banking sector became of interest to this study due to the significant role it plays in the economy. It helps in stimu lating economic growth by tell funds to economic agents that need them for productive activities. This function is very lively for each economy that intends to experience meaningful growth because it functions arrangements that bring borrowers and lenders of monetary resource together and more efficiently too than if they had to relate this instant with one another (Adam, 2005 Ojo, 2007).In essence, the banking sector acts as a dyad that connects lenders and investors in the economy. The bank reforms (especially the recapitalization that specifies a borderline capital base of 25 billion naira for commercialised banks), are pursued with a view to fashioning the sector realize its objectives in advancing the economy (CBN, 2006). It is expected that the daze of these reforms get out be enhanced with the use of ICT because it leave create some form of matched advantage and improve banking services through the true and efficiency in their transactions. In other words, it get out change the reputation of banks services in terms of quality which will culminate in greater service delivery and productivity.This is in tandem with the findings made by Adeoti (2005) that the use of information technology has the ability of improving the competitiveness of Nigerian manufacturing industries. In fact, ICT has had an collision on the Banking sedulousness as its emergence allows banks to support credit-scoring techniques to consumer credits, mortgages or credit cards. Hence, products that utilize to be highly dependent on the banks evaluation of its customers have now turn over more standardized. Other examples of ICT impact on the Banking Industry allow the gaind process efficiency, which can scale down costs in banks.This has also produced changes in the structure of bank income. As a emergence of increased competition that has lowered margins in change operations (the banks traditional business), banks have diversified their sources of income an d rely more and more on income from fees services rather than interest rate spreads. Fees charged for services involve typical banking activities like payment transactions, safe custody and account administration. info storage and retrieval is another wonderful innovation brought into the Banking Industry, where specialized software is take upd to create database to be manipulated by Database Management Software (DBMS).A single database created could be used for several purposes within the system in order to eliminate data redundancy. From the above discourse, this paper seeks to determine whether or not the adoption of ICT enhances the operations of Nigerian banks.To achieve this, the introductory part of this paper afterward defining what ICT is, distinctly established that to remain viable in the current age as financial concerns, banks must adopt ICT. In the succeeding sections, the paper will review relevant literary works and identify the types of ICT homes used in Ba nks the benefits and effects of ICT on banking industry will be discussed, after which an evaluation of its achievement or failure will be done then, the conclusion and recommendations will be made.LITERATURE go overThe Concept of ICT and a Perspective in Nigerian BanksTechnology can be referred to as the application of knowledge for the execution of a presumptuousness task. It entails skills and processes necessary for carrying out activities (works) in a given context, while ICT encompasses computer systems, telecommunication, networks, and multimedia applications (Frenzel, 1996). It came into use in the late 1980s replacing prior terms like electronic Data Processing (EDP), Management Information System (MIS), although the latter terms are still in use (Frenzel, 1996). ICT has transcended the role of support services or only electronic data processing its fields of applications are somewhat global and unlimited. Its devices especially the profit through the World Wide Web (ww w) and modern computer email facilities have further strengthened early innovations like the echo and fax.Other ICT devices include data recognition equipment, factory automation hardware and services, tele-computing and teleconferences using real time and online system (Adeoti, 2005). It is a concept that is having a scarce effect on almost entire aspects of the human endeavours. This connotes that it involves the application of principles to engage physical share in achieving an intended goal. The convergence of computer and telecommunication after slightly four decades of applying computers to routine data processing, mainly in information storage and retrieval, has created a bare-assed development where information has become the engine of growth around the world.This development has created catch-up opportunities for developing countries such as Nigeria to attain desired levels of development without necessarily reinventing the wheels of economic growth. This new(a) techn ology has brought remote-reaching revolution in societies, which has tremendously transformed most business (banking) scenes (Ovia, 2005). With reckon to the banks in Nigeria, the first established bank was in 1892 (then African Banking Corporation). However, on that point was no banking legislation until 1952 when three foreign banks (Bank of British West Africa, Barclays Bank, and British and French Bank) and two indigenous banks (National Bank of Nigeria and African Continental Bank) were established, with a total number of 40 separatees (Iganiga, 1998). As at 1988, the Nigerian banking system consisted of the CBN, 42 commercial banks and 24 merchant banks (Iganiga, 1998 Adam, 2005).From 1970, the banking sector grew significantly in terms of number and coverage as a way out of increase in economic activities. However, amongst 1970 and 1985, the growth of the sector was relatively decompress due to predominant government regulations but the period 1986-2000 witnessed a phe nomenal growth of the sector as a result of the financial deregulating policy, that is the Structural Adjustment Program-SAP of 1986 (Iganiga, 1998). This brought about the liberalization of bank licence lead to a quick change in the sector. Some of the banks were characterized by paper oriented methods, rather than technological based systems and this resulted to slow pace of their operations vis--vis their employees productivity cum command operation.The use of computers and other ICT gadgets in their operations were limited. This was one of the precedents adduced by Ojo (2007) as factors responsible for the Nigerian financial sector malaise. To mitigate the shocks experienced in the system, the Federal Government of Nigeria came up with the financial sector reforms through the CBN. The policy thrust on bank reforms encompasses the sum of the variations that occur in the direction of a comprehensive banking system.The bank reforms agenda, among others, specify a minimum capi tal base of 25 billion naira for the commercial banks that took effect in celestial latitude, 2005 (Diamond Bank, 2005 CBN, 2006). This has reduced the number of commercial banks in Nigeria from 89 to 25, which was done via the processes of mergers, acquisition and the stock market (CBN, 2006 Ige, 2007). The major aim was to repair Nigerian banks vibrant and resilient, clothed with efficiency and financial strength to put one across contingent shocks, thereby instilling public confidence as head as global relevance (Soludo, 2004).ICT and Nigerian Banking welkinThe revolution in ICT has made the banking sector changed from the traditional mode of operations to presumably divulge ways with technological innovation that improves efficiency. ICT can enhance efficiency via its use and in recent times banks have been encouraged by the rapid decline in the price of ICT gadgets. This has perhaps increased the bank level of ICT usage (Ovia, 2005).The increase top executive have also be traceable to business purlieu that became relatively flexible to accommodate new forms of technological change as a result of reforms in the country. Banking is becoming highly ICT-based and because of its inter-sectoral link, it appears to be reaping most of the benefits of revolution in technology, as can be seen by its application to almost all areas of its activities (Akinuli, 1999).It has coarseened the scope of banking practices and changed the nature of banking as well as the competitive environment in which they operate. A b driveway opening has been experienced around the world for banks and they are currently pickings due advantage of these innovations to provide improved customer services in the face of competition and faster services that enhance productivity (Akinuli, 1999 Ovia,2005). expert advancement facilitates payments and creates convenient alternatives to cash and cheque for making transactions. Such new practices have led to the development of a truly glo bal, seamless and meshwork enabled 24-hour business of banking.ICT revolution both in terms of innovation rate, bustling operation, and cost per unit (portraying reduction in average total and marginal costs) has made a good number of banks embrace the use of ICT infrastructure in their operations (Akinuli, 1999). The technological innovation that is being witnessed currently in the Nigerian banking sector is possible of impacting on the banks mode of transactions especially in their payment systems.The payment systems are made feasible by ICT gadgets such as automated Teller mould (ATM), electronic strain Transfer (EFT), Clearing House Automated Payments (CHAPs), Electronic Purse (E-PURSE), Automated Cheque Sorter (ACS) and Electronic and Transfer at Point of Sale (EFTPOS), which have made transactions easy and convenient. This phenomenon is capable of bringing about agile operations and enhanced productivity (Adeoti, 2005 Ovia, 2005).Though there may be little interruptions at times due to network failures, which may make customers inefficient to carry out transactions at that point in time. This little shortcoming is not in any way corresponding to the days when banking halls were characterized by long queues mainly as a result of delays in the traditional banking operations. Now banks can provide comprehensive services to their customers by making them approach their accounts via online services.These instruments have an edge over the traditional payment instruments because it is safer, more efficient, convenient and cost effective. Before the introduction of these ICT services in the banking industry, manual processing of documents were in use. The bankers were made to cope with this heavy task, and the process made business transactions minimal. Besides several feverish procedures, people had to contend with, banks customers were inevitably made to clear several hours in the congested banking halls in carrying out their transactions (Ovia, 20 05). The present situationThe ICT last in Nigerian economy can be said to be on the increase. Nigeria is the largest net subscriber in Africa with about 100,000 Internet users as at 2000, which was estimated to have grossly increased (Balancing Act, 2007). It has also been observed that Nigerias telecommunication density had remarkably increased by more than 2,550% from 0.35% in 1992 to 9.3% in 2004, thereby greatly exceeding the International Telephone federations (ITU) benchmark of 1% (Ndukwe, 2005). This phenomenon has helped banks keep certain information on-line(a) which reduces the cost of marketing their products.Being a competitive tool, it enhances the creation of customized services, reduces the cost of operation, and improves productivity as well as profitability. More interestingly, almost all the banks in Nigeria have internet and on-line real time banking facilities which has improved the scope of Nigerian banking. It has aided transfer of funds from one spatia l relation to another without any involvement of facial transactions thereby cut down the incidence of loss of funds to stealing and the likes. another(prenominal) recent one is the telephone banking technology that allows customers to have transactions on their accounts by occupational group a particular telephone number, through voice activation, and using a tone pad. All of these improve the comfort of banking transactions.THE TYPES OF ICT SUBSTRUCTURES USED IN BANKSOvia (2005) opined that ICT adoption will improves three critical domains which are efficiency, quality, and transparency in any organisation. Agboola (2001) discussed the dimensions in which automation in the banking industry manifest in Nigeria. They include Bankers Automated Clearing serve Automated Payment Systems, Automated lecture Channels.In the analysis done by Alawode and Kaka (2008) on ICT infrastructures used in Nigerian banks betwixt the periods of 2000 to 2008, found a proportionate increase in adopti on and use. The specific ICT infrastructural use within year 2000 to year 2008 include Internet feeler Internal Network SMS insomniac Substitution of postal Mail ICT Security Measures certificate and Automated Payment System. The tabular showing of the ICT structures and the analysis are presented below. This analysis and other recent literature will form the foothold for evaluation of ICT adoption success or otherwise, and informs its cellular inclusion in this seminar paper.TABLE 2.1SURVEY DATA OF SOME SELECTED BANKS IN NIGERIA AND THEIR ingestion IN SOME ICT INFRASTRUCTURESSerialnumbers ICT infrastructures Percentage of Nigeria Banks that use a particular ICT infrastructure within year2000 to year 2008. 2000 2002 2003 2005 2006 20081 Internet Access 27% 88% 91%2 Internal Network Wire based 68% 82% 92% Wireless 08% 19% 28%3 SMS Alert NIL 22% 98%4 Substitution of Postal mail 18% 38% 88%5 ICT Security measures 62% 81% 94%6 Authentication 33% 76% 85%7 Automated PaymentS ystem 1% 28% 87%Source Alawode and Kaka (2008)Internet Access An important indicator of the general uptake of Information and Communication Technology (ICT) in the Banking Industry relates to the use and availability of Internet. Internet access is a precondition for e-Business, as this is the main channel for e-banking. The general availability of Internet allows for the analysis of overall ICT-readiness in the Banking Industry. The Table shows that 91% of Banks studied in Nigeria have access to the internet within year 2006 and 2008, While 27% and 88% from year 2000 to 2002 and from year 2003 to 2005 respectively. The drastic change that occurred from 27% to 88% from year 2000 to 2002 and from year 2003 to 2005 respectively was as the result of ICT awareness competitive products introduced by some the so called new generation banks.Virtually all other banks also braced up to satisfy their customers and there was general improvement in the services and products of Banking Industry. Use of Internal Network The application of networks is a vital part of an effective ICT-enabled system, which is especially true in the case of banks with a branch network. Local Area Network (local area network) may also be seen as a basic indicator of the minimum infrastructure required to enable companies to conduct e-banking at a substantial level. Wire-based LAN is currently the dominating technology. The survey shows that 92% banks surveyed use wire-based LAN from year 2006 to 2008.The fact that LAN is a relatively low-tech and intimately attainable ICT solution, would to some extent explain the wide coverage of this technology from year 2000 to 2008. Wireless LAN is a relatively new technology in the Banking Industry, and is used to permit bank employees to access network resources from approximately any convenient location. The fact that, wireless LAN is relatively new technology accounts for its low percentage uptake in Banking Industry. Use of SMS bracing Instant notif ication of transactions made was another innovation brought by ICT through the use of smart phone in conjunction with the internet facility in the Banking Industry. Virtually all banks studied in Nigeria use SMS-Alert, except some of the Micro-finance Banks. It was an ICT infrastructure that preserve no patronage amidst year 2000 and 2002.Substitution of postal mail The Banking Industry is currently being renewed in many areas. One of these areas relate to the digitalization of one time paper-based processes. Electronic mail is increasingly being applied for especially non-legal equaliser like account statements, marketing and sales. More than 80% banks surveyed have substituted electronic mail with old postal mail within year 2006 to 2008. This outcome shows that, efficiency gains from electronic mail are yet to be reaped and indicates that the Industry is a bit fragmented in its uptake of electronic mail as means of communication. ICT security measures The security issue is o f special concern in the Banking Industry, as banking is highly based on trust from its customers.Hence, the take a chance of hackers, denial of service attacks, technological failures, breach of privacy of customer information, and opportunities for travesty created by the anonymity of the parties to electronic transactions all have to be managed. Depending upon its nature and scope, a breach in security can seriously damage public confidence in the stability of a financial institution or of a nations entire banking system. Hence, by introducing the appropriate security measures and putting security concerns at ease, the BI great power be able to attract the segments among consumers who previously were not inclined to use e-banking. Furthermore, it is also in the banks own interest to improve security, as digital fraud can be costly both in financial losses, and in terms of the damage it does to the brand of the bank in question.Authentication The common concern among users of e -banking is related to the authentication of users and data connections. The use of digital signatures is not as common as PIN codes or encryption, and reason is the fact that digital signature is relatively new technology. The research even shows that none of the studied banks uses digital signature as the form of authentication, but the up-take in other types of authentication is generally high, up to 85% within the year 2006 and year 2008.Automated Payment System Devices used in Automated Payment Systems include Automatic Teller Machine (ATM) and Electronic Funds Transfer. ATM still ranked higher in its spread than Electronic Funds Transfer, Low rate of spread of this technology might be due to cost, fear of fraudulent practices and lack of facilities necessary for their operation. just now generally speaking, the adoption of Automated Payment System increased dramatically. The table shows the increase from 28% to 87% within the range of 3-years.BENEFITS OF ICT ADOPTION ON BANKI NG INDUSTRYMany researchers have agreed on some benefits that pass to ICT adoption and use in the banking industry. These include among others Enhanced operational efficiency. The use of ICT in the banking industry enhances the operational efficiency of the banks (Madueme, 2009). For example, the use of SMS alert, an ICT infrastructure that recorded no patronage among Nigerian banks between year 2000 and 2002, has presently aided instant notification of transactions. Improved quality of service delivery. Many researchers (Ikechukwu, 2000 Madueme, 2009 Fenuga & Oladejo, 2010) endorse that the application of ICT to banking operations has undoubtedly enhances the quality of customer service delivery in the banks.The uses of ICT-based payment systems such as Automatic Teller Machine (ATM) and Electronic Funds Transfer have actually improved the service delivery of Nigerian banks to its customers. For example, a money transfer transaction that used to take me days to transact has been reduced to a matter of few minutes. For a case in point, last week, I sent money to my brother through UBA bank and before I got to the gate after the transaction, I got a call from him confirming that his account was credited through a message alert. Increase in customer comfort. This benefit derives from the one above.According to Fenuga and Oladejo (2010), the adoption and use of ICT in the banking industry has increased customers satisfaction due to improved quality of banking services. Referring to the above case of personal experience, it is authoritative that customer satisfaction has markedly increased as a result of adoption and application of ICT in Nigerian banks. Improved profit slaying. Another important benefit of the adoption and use of ICT in the banking industry has to do with improved profit margin.Many studies (Baba & Harker, 1997 Ikechukwu. 2000 Madueme, 2009 and Oladejo & Adereti, 2010) have shown significant and positive correlativity between ICT adoption a nd profitability of organisations. Increase in market shares. When ICT is successfully adopted and applied to banking operations, the overall performance of the banks is improved and this manifest in the corresponding increase in market shares, profitability and other indicators of performance (Oladejo & Adereti, 2010). Enhanced competitive advantage. Researches by Ikechukwu (2000) and Oladejo and Adereti, 2010 have lent credence to the fact that application of ICT to the operations of the banks has boosted their operational efficiency and brought about greater competitive advantage in the industry.EFFECTS OF ICT ON BANKING INDUSTRYAgboola (2001) studied the impact of computer automation on the banking services in Lagos and discovered that Electronic Banking has tremendously improved the services of some banks to their customers in Lagos. The study was only restricted to the commercial nerve centre of Nigeria and concentrated on only six banks. He made a comparative analysis betwee n the old and new generation banks and discovered variation in the rate of adoption of the automated devices. Aragba-Akpore (1998) wrote on the application of information technology in Nigerian banks and pointed out that ICT is becoming the backbone of banks services regeneration in Nigeria.He cited the Diamond Integrated Banking Services (DIBS) of Diamond Bank restrain and Electronic Smart Card Account (ESCA) of All States Bank expressage as efforts geared towards creating sophistication in the banking sector. Ovia (2000) discovered that banking in Nigeria has increasingly depended on the deployment of Information Communication Technology and that the ICT budget for banking is by far larger than that of any other industry in Nigeria. He contended that on-line(a) system has facilitated Internet banking in Nigeria as evidenced in some of them launching websites.He found also that banks now offer customers the tractability of operating an account in any branch irrespective of which branch the account is domiciled. Cashless transactions were made possible in our society of today. The moving company of the economy (Banking Industry) is now well positioned to meet-up with the new challenges from the costumers, competitors and even from the nations economy with right tool in their hand to reach inexhaustible point of success. The Industry is now growing on daily basis with respect to new innovations that are coming out in the world of technology.EvaluationThe banking business in Nigeria today can be assessed as being highly ICT based. The analysis of Alawode and Kaka (2008) ICT infrastructures used in some selected banks between year 2000 to year 2008 as earlier presented in table 2.1 clearly indicate the steady growth of ICT application in Nigerian Banks. Internet access usage, for example, rose from 27% between years 2000-2002 to 91% between years 2006-2008. SMS Alert that was nonexistent between the periods of 2000-2002 rose from nowhere to 98% between years 2006-2008. Similarly, Automated Payment System that was barely 1% between years 2000-2002 rose dramatically to 28% in years 2003-2005 and sky rocketed to 87% between years 2006-2008.The research, which provided the above analysis, is over 5 years old now. Considering the rate of growth reported in the analysis, it is unambiguous that most of the infrastructures may have reached their full potential. Drawing from above background, one could reasonably accept Akinulis (1999) viewpoint when he observed then that it appears Nigerian banks were reaping most of the benefits of revolution in technology, as can be seen by its application to almost all areas of its activities.Adeoti (2005), Ovia (2005) and Osabuohein (2008) in separate remarks corroborate the fact that the technological innovation witnessed in Nigerian banking sector is possible of impacting on the banks mode of operations especially in their payment systems. It is indeed unequivocal to state that ICT adoption in Nigerian banks has broadened the scope of banking practices and changed the nature of banking as well as the competitive environment in which they operate. Such new practices have led to the development of a truly global, seamless and Internet enabled 24-hour business of banking. In summary, the adoption of ICT in Nigerian banks can be said to be a success though not without some challenges.ChallengesThe automation of banking operations is really pose challenges to the Consumers, the banks themselves and Regulatory/Supervisory authorities in Nigeria. Among the issues concerned are Infrastructural deficiencies It is clear that the use of ICT in the banking industry require minimum level or basic infrastructure such as electricity, telecommunication and motorable roads. Yet all these remain great challenges even as they feature as manifestos in all political campaigns. Ineffectiveness of telecommunication service providers and epileptic append of electricity have often times cost people to spend days suffering to recover trapped cards in ATMs.For example, there was a day my friends card got trapped for only God knows the reason, but on a Saturday when the banks staff could not be accessed to recover neither the card nor alternatively withdraws money at UBA Aliade road branch. He had to wait until Monday morning to recover his card. Whatever his purpose for wanting(p) to access money must have been defeated. Consumer Awareness and capacity A major challenge of ICT banking to many illiterate and semi-literate population of the country who domiciliate in rural areas is lack of awareness of how the systems work and their inability to access the services which mostly exist in cities and high populated work areas or institutions.Access to ATM and GSM Telephones There are inadequate banking facilities to cover for the growing population of Nigerians who can access the services. Many households are unable to afford terminals and all accessories required for operating in tod ays banking system. The recent Federal governments 60 billion naira telephone project for 10 million farmers (Olatunji, 2013) is one exemplification that majority of Nigerians are too poor to afford a telephone, a necessary associate for accessing ICT banking services. Consumer Protection Another major challenge of adoption of ICT is the absence of statutory or regulatory provisions to protect the consumer of the products/services. Fraud So overmuch fraud has been reported within and outside banks due to ICT adoption.The high icon of the system to fraudsters, hackers and other criminally minded persons who could access, retrieve and utilize mystic information from the system if security measures are weak to checkmate unauthorized intrusion is another challenge to the authorities. Systems Operational Risks Bank IT rests on computers and telecommunications which could be susceptible to system failure, internal manipulations and inconsistent regulatory policies (Etim, 2000).Conclu sionConcerns about ICT role in attaining effectiveness, efficiency and productivity were raised in the late 1980s. Since then a large number of studies have emerged both at the industry and firm level that have substantially improved our judgement of the relationship between ICT and firm performance. This paper has clearly defined what ICT is and presented a review of relevant literature to aid understanding of the historical antecedents or reforms that necessitated its adoption in Nigerian banks by assessing the benefits and effects, and the journey so far.The paper further evaluated the success of ICT adoption as well as addresses the challenges it has pose to banks, consumers of services and supervising authorities. The paper concludes that the adoption of ICT has influenced the content and quality of banking operations positively. From all indications, ICT presents great potential for business process reengineering of Nigerian Banks. It is insistent for bank management to int ensify investment in ICT products to facilitate speed, convenience, and immaculate services, or otherwise lose out to their competitors.RecommendationThis paper recommends that investment in information and communication technology should form an important component in the overall strategy of banking operators to ensure effective performance.ReferencesAdam, J.A. (2005). Banking Sector Reforms The indemnity Challenges of Banks Consolidation in Nigeria. Selected Papers for 46th Annual Conference, Nigerian frugal Society, August 23-25. Adeoti, J.O (2005). Information Technology Investment in Nigerian Manufacturing Industry The Progress So Far. Selected Papers for the 2004 Annual Conference, Ibadan Nigerian Economic Society, 213-244. Adeyemi, K.S (2006). Banking Sector Consolidation in Nigeria Issues and Challenges. Union Digest, 9(3&4) June (http//www.unionbankng.com/adeyemi.pdf). Agboola, A. A. (2006). 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