Adoption of Information and Communication Technology Essay Example for Free

Adoption of Information and Communication Technology EssayAbstractNigerian banking attention has give way highly ICT-based and is reaping the benefits of technological variety as evidenced by its application in most of its operations. The objective of this paper was to determine if the Nigerian banks have failed or succeeded in the bridal and office of ICT (see sidestep 2.1). An evaluation of the adoption and engage of ICT al-Qaidas from the periods among classs 2000 to 2008 indicated steady growth. It is presumed that as of today, the Nigerian banks may have reach their ICT potentials in their operations, though with some ch tout ensembleenges. The paper concludes that the adoption of ICT has influenced the content and persona of banking operations. This paper recommends that investment in information and communication locomotive room should form an main(prenominal) component in the over in all strategy of banking operators to ensure effective operations.Keywords Information, Communication, Technology, situateing manufacturing.INTRODUCTIONInformation and Communication Technology (ICT) is the automation of mental processes, controls, and information production using computers, telecommunications, software administration and early(a) gadget that ensure smooth and efficient running of activities. It is a term that largely covers the coupling of electronic technology for the information needs of a pipeline at all levels. ICT has surpassed the role of support work or only electronic data processing its fields of applications are slightly globose and unlimited. Its devices especially the net income and modern computer e office facilities have further strengthened early modernizations equal the re beseech and fax. Other ICT devices include data reference equipment, factory automation hardware and work, telecomputing and teleconferences using real time and online system (Adeoti, 2005).The application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all banks and indeed a prerequisite for local and global matchedness. Information and Communication Technology (ICT) directly affects how managers decide, how they plan and what products and services are offered in the banking industriousness. It has continued to change the way banks and their corporate relationships are organized existence round-eyed and the variety of innovative devices available to promote the speed and eccentric of service preservation.Har experient and Jeff (1995) contend that fiscal service providers should modify their traditional operating practices to remain viable in the 1990s and the decades that follow. They claim that the most signifi senst flaw in the banking effort today is a wide spread failure on the part of senior management in banks to grasp the importance of technology and incorporate it into their strategic plans accordingly. Considering ICT to ensure banks survival, Woherem (2000) claimed that only banks that overhaul the whole of their payment and talking to systems and apply ICT to their operations are standardizedly to survive and prosper in the new millennium.He advices banks to re-examine their service and delivery systems in order to properly position them indoors the framework 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 stratums. Nigerian banks have undergone changes in their operations since the consolidation process of 2005, when some banks were forced to merge with others to meet exchange Bank of Nigerias (CBN) recapitalisation fund necessary for operation. Until then, most of the banks operated paper based systems at inception and later adjusted at the dawn of ICT revolution.In new-fangled times, ICT, which basically involves the mathematical function of electronic gadgets especially computers for storing, analyzing and distributing data, is having a dramatic influence on roughly all aspects of individual lives and that of the national economy the banking sector inclusive. The increase use of ICT 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 fashion may differ. In Nigeria, ICT physical exercise especially in the banking sector, has considerably improved, blush though it may not have been as high as those discover for advanced countries (Adeoti, 2005 Adeyemi, 2006).The use of ICT in the banking sector became of interest to this study receivable 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 snappy for any economy that intends to experience meaningful growth because it makes arrangements that bring borrowers and lenders of fiscal resource together and more efficiently too than if they had to relate directly with one another (Adam, 2005 Ojo, 2007).In essence, the banking sector acts as a bridge that connects lenders and investors in the economy. The bank reforms (especially the recapitalization that specifies a minimum capital base of 25 billion naira for commercial banks), are pursued with a view to making the sector pass its objectives in advancing the economy (CBN, 2006). It is expected that the impact of these reforms en self-reliance be enhanced with the use of ICT because it will create some form of competitive utility and improve banking services through accuracy and efficiency in their transactions. In other words, it will change the nature of banks services in basis of quality which will culminate in greater service delivery and productiveness.This is in tandem with the fi ndings made by Adeoti (2005) that the use of information technology has the ability of astir(p) the competitiveness of Nigerian manufacturing industries. In fact, ICT has had an impact on the Banking attention as its emergence allows banks to apply credit-scoring techniques to consumer credits, mortgages or credit cards. Hence, products that used to be highly unfree on the banks evaluation of its customers have now become more standardized. Other examples of ICT impact on the Banking Industry include the increase process efficiency, which can mortify costs in banks.This has also produced changes in the structure of bank income. As a result of increased competition that has lowered margins in lending operations (the banks traditional business), banks have diversified their sources of income and rely progressively on income from fees services rather than interest rate spreads. Fees charged for services include typical banking activities like payment transactions, safe custody and write up administration. Data storage and retrieval is another wonderful innovation brought into the Banking Industry, where specialized software is engaged to create database to be manipulated by Database Management Software (DBMS).A single database created could be used for several inclinations deep down the system in order to eliminate data redundancy. From the higher up 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 after defining what ICT is, clearly completed that to remain viable in the current age as financial concerns, banks must adopt ICT. In the succeeding sections, the paper will review pertinent literature and identify the types of ICT infrastructures used in Banks the benefits and effects of ICT on banking industry will be discussed, after which an evaluation of its success or failure will be done then, the conclusion and recommendations wi ll be made.LITERATURE REVIEWThe Concept of ICT and a Perspective in Nigerian BanksTechnology can be referred to as the application of knowledge for the execution of a given task. It entails skills and processes necessary for carrying out activities (works) in a given context, while ICT encompasses computer systems, telecommunication, profitss, and multimedia applications (Frenzel, 1996). It came into use in the late 1980s replacing earlier 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 close to global and unlimited. Its devices especially the Internet through the World Wide Web (www) and modern computer email facilities have further strengthened early innovations like the telephone 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 remarkable effect on closely entire aspects of the human endeavours. This connotes that it involves the application of principles to engage physical component in achieving an intended goal. The convergence of computer and telecommunication after about four decades of applying computers to routine data processing, mainly in information storage and retrieval, has created a new 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 technology has brought far-reaching revolution in societies, which has tremendously transformed most business (banking) scenes (Ovia, 2005). With respects to the banks in Nigeria, the first established ban k was in 1892 (then African Banking Corporation). However, there was no banking legislation until 1952 when terce 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 consider of 40 branches (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 result of increase in economic activities. However, between 1970 and 1985, the growth of the sector was relatively slow due to predominant government regulations but the period 1986-2000 witnessed a phenomenal growth of the sector as a result of the financial deregulation policy, that is the Structural Adjustment Program-SAP of 1986 (Iganiga, 1998). This brought about the liberalization of bank licence guide to a rapid 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 general performance.The use of computers and other ICT gadgets in their operations were limited. This was one of the reasons adduced by Ojo (2007) as factors responsible for the Nigerian financial sector malaise. To mitigate the shocks go through 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 thrill of a comprehensive banking system.The bank reforms agenda, among others, specified a minimum capital base of 25 billion naira for the commercial banks that took effect in December, 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 processe s of mergers, acquisition and the stock market (CBN, 2006 Ige, 2007). The major aim was to make Nigerian banks vibrant and resilient, clothed with efficiency and financial strength to absorb possible shocks, thereby instilling public confidence as well(p) as global relevance (Soludo, 2004).ICT and Nigerian Banking firmamentThe revolution in ICT has made the banking sector changed from the traditional mode of operations to presumably better 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 might have also be attributable to business environment 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 rea ping 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 broadened the scope of banking practices and changed the nature of banking as well as the competitive environment in which they operate. A broad opening has been experienced around the world for banks and they are currently taking 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). Technological 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 global, unseamed and Internet enabled 24-hour business of banking.ICT revolution both(prenominal) in terms of innovation rate, speedy operation, and cost per unit (portraying reduction in average total and bare(a) costs) has made a good number of banks emb race 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 Machine ( automated teller machine), Electronic Fund exchange (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 speedy operations and enhanced productivity (Adeoti, 2005 Ovia, 2005).though there may be little interruptions at times due to network failures, which may make customers unable to carry out transactions at that point in time. This little shortcoming is not in any way comparable 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 access 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 onerous task, and the process made business transactions minimal. Besides several hectic procedures, people had to contend with, banks customers were inevitably made to spend several hours in the congested banking halls in carrying out their transactions (Ovia, 2005). The present situationThe ICT culture in Nigerian economy can be said to be on the increase. Nigeria is the largest Internet ratifier in Africa with about 100,000 Internet users as at 2000, which was estimated to have grossly increased (B alancing 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 external Telephone Unions (ITU) benchmark of 1% (Ndukwe, 2005). This phenomenon has helped banks keep square(p) information on-line 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 perspective to another without any involvement of facial transactions thereby reducing the incidence of loss of funds to stealing and the likes. Another recent one is the telephone banking technology that allows customers to have transactions on their account s by calling a particular telephone number, through voice activation, and using a tone pad. whole 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 ups Automated Payment Systems, Automated Delivery Channels.In the analysis done by Alawode and Kaka (2008) on ICT infrastructures used in Nigerian banks between the periods of 2000 to 2008, found a proportionate increase in adoption and use. The specific ICT infrastructural use within year 2000 to year 2008 include Internet Access Internal Network SMS Alert central of Postal Mail ICT Security Measures Authentication and Automated Payment System. The tabular presentation of the ICT structures and the analysis are presented below. This analysis and other recent literature will form the basis for evaluation of ICT adoption success or otherwise, and informs its comprehension in this seminar paper.TABLE 2.1SURVEY DATA OF SOME SELECTED BANKS IN NIGERIA AND THEIR UPTAKE 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 PaymentSystem 1% 28% 87%Source Alawode and Kaka (2008)Internet Access An important indicator of the general inlet 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 t he 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 canvass 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 episode of banks with a branch network. Local Area Network (LAN) may also be seen as a basic indicator of the minimum infrastructure required to enable c ompanies to conduct e-banking at a substantial level. Wire-based LAN is currently the dominating technology. The pile shows that 92% banks surveyed use wire-based LAN from year 2006 to 2008.The fact that LAN is a relatively low-tech and easily 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 nearly any convenient location. The fact that, wireless LAN is relatively new technology accounts for its low percentage uptake in Banking Industry. Use of SMS wonderful Instant notification of transactions made was another innovation brought by ICT through the use of smart phone in conjunction with the internet quickness 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 recorded no patrona ge between 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 formerly paper-based processes. Electronic mail is more and more being applied for especially non-legal correspondence 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 of special concern in the Banking Industry, as banking is highly based on trust from its customers.Hence, the risk of hackers, denial of service attacks, technological failures, breach of privacy of customer information, and opportunities for fraud created by the anonymity of the parties to electronic transac tions 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 ecesis or of a nations entire banking system. Hence, by introducing the appropriate security measures and putting security concerns at ease, the BI might be able to attract the segments among consumers who antecedently 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, worry of fraudulent practices and lack of facilities necessary for their operation. But 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 BANKING INDUSTRYMany researchers have agreed on some benefits that accrue to ICT adoption and use in the banking industry. These include among others deepen 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 infrastructu re that recorded no patronage among Nigerian banks between year 2000 and 2002, has currently aided instant notification of transactions. Improved quality of service delivery. Many researchers (Ikechukwu, 2000 Madueme, 2009 Fenuga Oladejo, 2010) confirm 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 satisfaction. 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 unequivocal that customer satisfaction has markedly increased as a result of adoption and application of ICT in Nigerian banks. Improved profit performance. 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 correlation between ICT adoption and 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). enhance competiti ve 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 however restricted to the commercial nerve centre of Nigeria and concentrated on only six banks. He made a comparative analysis between 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 Servic es (DIBS) of Diamond Bank Limited and Electronic Smart Card Account (ESCA) of All States Bank Limited 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 system has facilitated Internet banking in Nigeria as evidenced in some of them launching websites.He found also that banks now offer customers the flexibility 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 mover of the economy (Banking Industry) is now well positioned to meet-up with the new contends from the costumers, competitors and even from the nations economy with right tool in their hand to reach limitless point of success. The Industry is now emergence 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 obvious that most of the infrastructures m ay 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 affirmed 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 s ome challenges.ChallengesThe automation of banking operations is really posing challenges to the Consumers, the banks themselves and regulatory/Supervisory authorities in Nigeria. Among the issues concerned are Infrastructural deficiencies It is obvious 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. ineffectuality of telecommunication service providers and epileptic supply of electricity have often times cost people to spend days suffering to recover pin down 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 faculty 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 pu rpose for wanting 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 abide 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 todays banking system. The recent Federal governments 60 billion naira telephone project for 10 gazillion farmers (Olatunji, 2013) is one exemplification that majority of Nigerians are too poor to afford a telephone, a necessary accessory for accessing ICT banking services. Consumer Protection Another major challenge of adoption of ICT is the absence of statutory or regulat ory provisions to protect the consumer of the products/services. Fraud So much fraud has been reported within and outside banks due to ICT adoption.The high exposure of the system to fraudsters, hackers and other criminally minded persons who could access, retrieve and utilize confidential information from the system if security measures are weak to reduce unauthorized intrusion is another challenge to the authorities. Systems functional Risks Bank IT rests on computers and telecommunications which could be susceptible to system failure, internal manipulations and inconsistent regulatory policies (Etim, 2000).ConclusionConcerns 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 understanding 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 posed 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 imperative for bank management to intensify investment in ICT products to facilitate speed, convenience, and accurate 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 Policy Challenges of Banks Consolidation in Nigeria. Selected Papers for 46th Annual Conference, Nigerian Economic 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(34) June (http//www.unionbankng.com/adeyemi.pdf). Agboola, A. A. (2006). Electronic payment systems and Tele-banking services in Nigeria. diary of Internet Banking and Commerce, 11(3), 112-124.Agboola, A. A. (2001). Impact of Electronic Banking on Customer Services in Lagos, Nigeria. Journal of Economics and Financ, 5(12), 45-73. Akinuli, O.M. (1999). Information Technology in Nigerias Banking Industry Operational Applications, Problems and Future Challenges. CBN Bullion, 23(3), 71-75. Alawode, A. J. and Kaka, E. U. (2008 ). Information and Communication Technology (ICT) and Banking Industry. Proceedings of the 1st International Technology, Education and Environment Conference, African Society for Scientific Research (ASSR) 673-677. Aragba-Akpore, S. (1998). The Backbone of Banks Service Regeneration. Moneywatch, July 22, p23.Baba, P. and Harker, P. (1997). Examining the Contributions of Information Technology towards Productivity in United States Retail Banks. Pennsylvania Wharton School. Balancing Act, (2007). Balancing Act News Update (http//www.balancingact- africa.com/country_profile.php?id=24).CBN, (2006). Press Release. The Guardian, Vol.22 (9902), January 3, p.11.Diamond Bank, (2005). Banking Industry Report, Strategic Planning Unit, December (http//www.diamondbank.com/public/Banking%20Industry%20Report%20December%202005.pdf). Etim, S. O. (2000). Electronic Banking The Risks in the Insurance. A Paper Presented at Centre for Insurance Research Luncheon, Lagos, May 23.Fenuga, O. J. and Oladejo, R. K. (2010). The Effect of Electronic Payment on Customer Service Delivery in Nigerian Banks. International Journal of Economic Development Research and Investment, 1(1), 5-16. Frenzel, C.W. (1996). Information Technology Management, Cambridge Thomson publication Company.Harold, B. and Jeff, L. (1995). Dont Let Technology Pass You By. ABA Banking Journal, 73-81.Iganiga, B.O (1998). Contemporary Issues in Money and the Nigerian Financial System, Lagos Amfitop Books.Ige, C.S (2007). Reforms in Development. The Reformers, 2(1), 4-16. Ikechukwu, G. (2000). Enhancing the Performance of Banking Operations through set aside Information Technology in Nigerian Banking Industry. Ibadan Spectrum Books. Madueme, I. S. (2009). Impact of information technology on the ptofitability of commercial banks in Nigeria. International Journal of Business and Common marketplace Studies, 6(12), 112-121. Ojo, J.A.T. (2007). Financial Sector Maladaptation, Resource Curse and Nigerias Development Dilemma. Public Lecture, Covenant University, Ota, Ogun State, January 25. Oladejo, M. O. and Adereti, A. S. (2010). Impact of information technology on the performance of microfinance institutions in Ogun state, Nigeria. International Journal of Economic Development Research and Investment, 1(1), 44-55. Olatunji, S. (2013). FG to give rural farmers N60bn cell phones. Punch, January 3, www.punching.com/business/business economy/fg-to-give rural-farmers-n60bn-cell-phones/ Osabuoheien, E. S. C. (2008). ICT andNigerian Banks Reforms Analysis of Anticipated Impacts in Selected Banks. ball-shaped Journal of Business Research, 2(2), 67-76. Ovia, J. (2000). From Banking Hall to E-Platform. Financial Standard, January 15. P. 6. Ovia, J. (2005), Enhancing the Efficiency of the Payment System in Nigeria. CBN Bullion, 29(1), 8-18.Soludo, C.C. (2004). Consolidating the Nigerian Banking Industry to Meet the Development Challenges of the 21st Century. An Address Delivered to the picky Meeting of the Ban kers Committee, Abuja, July 6. Woherem, E. W. (2000). Information Technology in the Nigerian Banking Industry. Ibadan Spectrum.