CHAPTER ONE
BACKGROUND OF THE STUDY
1.0 INTRODUCTION
In recent times, Information Technology (IT), which basically involves the use of electronic gadgets especially computers for storing, analyzing and distributing data, is having a dramatic influence on almost all aspects of individual lives and that of the national economy- the banking sector inclusive. The increasing use of IT has allowed for integration of different economic units in a spectacular way. This phenomenon is not only applicable to Nigeria but other economies of the world, though the level of their usage may differ. In Nigeria, IT usage especially in the banking sector, has considerably improved, even though it may not been as high as those observed for advanced countries (Adeoti, 2005; Adeyemi, 2006).
The use of IT in the banking sector became of interest to this study due to the significant role it plays in the economy. It helps in stimulating economic growth by directing funds to economic agents that need them for productive activities. This function is very vital for any economy that intends to experience meaningful growth because it makes arrangements that bring borrowers and lenders of financial resource together and more efficiently too than if they had to relate directly with one another (Adam, 1998; Ojo, 2007). In essence, the banking sector acts as a bridge that connects lenders and investors in the economy. Hence, the need for reforms in the Central Bank of Nigeria-CBN.
The banking industry is one of the critical sectors of the economy whose contribution to the pace of development and economic growth cannot be fully quantified. Changes in today’s modern world reveal that the preponderance of natural factors cannot equip the banking sector fully to grapple with the exigencies of global completion. According to Hanna (1994), information, flexibility and fast response are the key new factors for coping with global competition and information communication technology plays a critical role in these areas for the purposes of quality enhancement. Antholt (1993) has declared that information is just as important as a production factor like land, labor and capital.
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