Abstract

This study aimed to investigate the impact of using information technology on banking sectors in financial institutions of Buea with specific case study of NFC bank. The specific objectives were to determine the types of ICT software’s used by financial institutions in Buea, to find out the impact created by IT on banking systems in financial institutions in Buea and to identify the challenges, face by bank workers as a result of the adoption of IT.

To achieves these objectives, the study employ both quantitative research design to sample 12 employees of NCF Bank Buea using structures-questionnaire. Collected data from the field were analysed descriptively and inferentially using SPSS (25.0). Findings revealed that major information technology packages uses by NFC bank were Name of ICT package Core BankVision, Computers, Excel software, ATM, KASTLE, Avaloq Banking System and Printers. It was also revealed that information technology has been very useful to bank staff and plays a vital use in their day-to-day running of the bank’s activities.

The study also revealed that ICT has greatly changed how records are been kept and managed. The use of ICT has also been shown to be faster and more accurate and more reliable compared to the manual system of banking. It was further revealed that NFC Bank faced some key major challenges such as accountants have difficulties in working with computers and soft wares, there is a low level of understanding of the soft wares, there is temporal unemployment when soft wares are used, there is a need for expertise in installing the soft wares and cost of installing the soft wares is very high.

The study recommended that a regulatory institution should be set up in Cameroon to legislate, monitor and improve upon the acquisition and usage of ICT tools in financial and other institutions at large.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study.

This chapter starts with discussing the background of the study so as to present some insight of the issue of information technology in general and in the banks in particular. This research is based on the impact of information technology in the banking industry. NFC Bank in Buea has been chosen as the case study. In the conclusion information technology on banks has a big role to play in enhancing the effectiveness and efficiency of services.

Computer technology has led to rapid exchange of documents, research collaboration, increase office productivity and data analysis. It has also given individual economic actors a new tool for recognizing and fighting for economic and business openings. Computer technology works in the computer application and telecommunication equipment to transmit, store, retrieve and manipulate data such as ATM automatic teller machine which allows customers to complete basic transactions without the aid of a branch representative of the respective bank in question. Credit cards and debit cards can be used to access most ATMs.

Another example of information technology is telephone which is used in banking industry in order to contact their customers and obtain account balances and list of latest transactions and for transfers for example funds transferred through MTN mobile money account and orange mobile money account between a creditor and a debtor Abhishek (2017), e-banking which is the innovation of IT has become each and every aspect of bank that you could do without visiting the bank of the specific bank physically or in person. This save lots of papers which otherwise was to be done by preparing physical papers vouchers which is a prescribed format for which is taken as a request from customers which serve as evidence. Today’s business environment is very dynamic and undergoes rapid changes as a result of technical innovation, increased awareness and demand from customers. Banks use IT in accounting, computerize accounting, record of data, human resource management and research, it can be said that most banks are now aided by the use of computers.

The use of information technology devices has become a customary practice in banks. Information technology has led to improved worker’s performance speed and accuracy in general, has reduce the length of transaction processes and procedures. Interconnected, global business environment, computerized accounting systems has become the engine of growth in business organizations in todays computerized system.

IT therefore involves the computerization of accounting information system which is put in place so as to make decision making easy which are accompanied with a number of benefits like speed of carrying out transactions, quick analysis timeliness, accuracy and reporting GENIL (2013), computerized accounting process automate the accounting process improving efficiency and cutting down costs. It tends to be more accurate, faster to use and less subject to error.

The improvement in information technology have transform many firms in professional service industries but still non as much as those in the banking sector. Today’s business is very dynamic and is fast changing as a result of creativity innovation technological changes, increase in awareness and demand from customers. Many business organizations most especially the banking industry works in a complex and competitive environment which is always changing and economic climate with information technology are highly unpredictable, hence the role of IT in the banking sector have to be study because of the important role it plays in the economy by stimulating economic growth through the transferring of funds to economic agents which is needed for production. This makes the objective of this study to evaluate the role of information technology in ensuring effective and efficient delivering of services in the banking industry as a way of maximizing profit which is the objective of commercial banks it is clear that information technology impact has been made on banking.

The ability of business as well as a government to develop and make use of the computerized system to track and record financial transactions easily which is the most important since the inception of IT computerized accounting system makes it easy to process quickly through the accounting system. Quicker processing time for individual transactions had also reduce the amount of time needed to choose out each accounting period. Transactions which would have taken months or years to prepare would be done quickly and faster and thereby cutting high cost that would have resulted in preparing these reports. (COOPER, 2008).

All the benefits listed above has given a need to study the impact of information technology on banks performance in Buea Cameroon. There are two variables in this study the independent variable which is information technology will be measured using the recent innovation in IT such as the ATM card (automated teller machines) mobile money as a way of banking etc. The dependent variable is the performance of banks in buea which will be measured using profitability and efficiency.

1.2 Statement of The Problem

The computerization of the bank’s operations and services as well as the introduction of accounting software and automatic teller machines by some financial institutions has help in improving the financial strength of some banks in Buea. Information technology is an entrepreneurial corporate resource which when managed will greatly increase the opportunities that are available to the organization.

As a result of the increased demand for customer deposits in Cameroon banks especially have realized the imperative of goods and prompt customer service due to the fact that some customers lost their deposit in technically insolvent or distressed banks, customers have now become wiser, and more discerning alert with regards to choosing where they would be safe promptly, preferable in a pleasant and friendly environment. Thus they have started looking at the level of service and professionalization of banks before depositing their funds. Banks 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 technology in Cameroon Buea banking operations. More so there is growing evidence that customers have started associating quality of services in a bank with the bank’s possession of online real time systems. It can be said that possession of such systems is now judged to be of a high banking quality in Buea Cameroon. The main problem that led to this research is to find out how information technology has impacted the performance of banks in Buea municipality.

1.3 Research Questions

1.3.1 Main Question

What is the Impact of using information technology on the Performance of financial institutions of Buea, case study NFC Bank?

1.3.2 The Specific Questions

1. What are the types of ICT software used by financial institutions in Buea?
2. What is the impact created by IT on banking systems in financial institutions in Buea?
3. What are the challenges or issues, faced by bank workers as a result of the adoption of IT?

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