Adoption of Information and Communication Technology Essay

AbstractNigerian banking industry has become highly ICT-based and is reaping the benefits of technical revolution as evidenced by its application in most of its operations. The objective of this stem was to determine if the Nigerian banks watch failed or succeeded in the adoption and employ of ICT (see instrument panel 2.1). An evaluation of the adoption and consumption of ICT infrastructures from the periods between grades 2000 to 2008 intimated steady proceeds. It is presumed that as of today, the Nigerian banks may father attained their ICT potentials in their operations, though with some ch eitherenges. The paper concludes that the adoption of ICT has influenced the content and quality of banking operations. This paper recommends that investment funds in information and communication technology should form an primary(prenominal) component in the oerall system of banking operators to ensure effective operations.Keywords info, Communication, engine room, Banking & Indu stry.INTRODUCTION randomness and Communication engineering (ICT) is the automation of processes, controls, and information production victimization computers, telecommunications, software and other(a) gadget that ensure melted and efficient running of activities. It is a term that largely covers the coupling of electronic technology for the information shoots of a line of business at all trains. ICT has surpassed the affair of support improvements or alone electronic data processing its fields of applications are slightly global and unlimited. Its devices in particular the Internet and fashionrn computer email facilities have further strengthened early modernizations like the telephone and fax. Other ICT devices acknowledge data recognition equipment, particularory automation hardware and dishs, telecomputing and teleconferences using real time and online system (Adeoti, 2005).The application of information and communication technology concepts, techniques, policies a nd implementation strategies to banking attend tos has become a subject of fundamental importance and concerns to all banks and indeed a prerequisite for local and global competitiveness. selective information and Communication Technology (ICT) directly affects how managers decide, how they plan and what products and services are offered in the banking industry. It has continued to change the way banks and their corporate relationships are organized worldwide and the variety of innovative devices available to enhance the speed and quality of service delivery.Harold and Jeff (1995) contend that pecuniary service providers should modify their handed-down operating(a) practices to remain viable in the 1990s and the decades that follow. They claim that the most signifi green goddesst flaw in the banking industry 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. Co nsidering ICT to ensure banks survival, Woherem (2000) claimed that only banks that overhaul the whole of their hire and delivery systems and apply ICT to their operations are likely 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 within 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 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 meet Central Bank of Nigerias (CBN) re detonating deviceisation fund requisite for operation. Until then, most of the banks operated paper based systems at inception and later adjusted at the dawn of ICT revolution.In recent times, ICT, which basically involves the use of electronic gadgets especially computer s for storing, analyzing and distributing data, is having a dramatic influence on to the highest degree all aspects of individual lives and that of the national economy the banking field inclusive. The increasing use of ICT has allowed for integration of different economical 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, ICT usage especially in the banking sector, has considerably ameliorate, up to now though it may not have been as high as those observed for advanced countries (Adeoti, 2005 Adeyemi, 2006).The use of ICT in the banking sector became of interest to this study out-of-pocket 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 every economy that intends to experience meaningful growth because it m akes arrangements that bring borrowers and lenders of financial resource together and more expeditiously 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 stripped-down capital base of 25 billion naira for commercial banks), are pursued with a view to making the sector realize its objectives in advancing the economy (CBN, 2006). It is expect that the impact of these reforms sequel be enhanced with the use of ICT because it will create some form of competitive advantage and improve banking services through with(p) the adjust and capacity in their transactions. In other words, it will change the nature of banks services in terms of quality which will culminate in great service delivery and productivity.This is in tandem with the findings make by Adeoti (2005) that the use of inform ation technology has the ability of improving the competitiveness of Nigerian manufacturing industries. In fact, ICT has had an impact on the Banking Industry as its emergence allows banks to apply credit-scoring techniques to consumer credits, mortgages or credit cards. Hence, products that used to be highly dependent on the banks evaluation of its customers have promptly become more standardized. Other examples of ICT impact on the Banking Industry include the change magnitude process efficiency, which can reduce exists in banks.This has alike 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 believe increasingly on income from fees services rather than interest rate spreads. Fees charged for services include typical banking activities like payment transactions, safe custody and deem administration. Data stor age 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 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 after defining what ICT is, clearly established that to remain viable in the live age as financial concerns, banks must adopt ICT. In the succeeding sections, the paper will review relevant 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 will be made.LITERATURE REVIEWThe Concept of ICT and a Perspective in Nigerian BanksTechnology can be referred to as the application of knowledge for the instruction 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, networks, and multimedia applications (Frenzel, 1996). It came into use in the late 1980s regenerate 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 somewhat 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 teleconfere nces using real time and online system (Adeoti, 2005). It is a concept that is having a remarkable effect on almost 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 part 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 ontogeny 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 bank was in 1892 (then African Banking Corporatio n). However, there 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 list 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 leading to a rapid change in the sector. Some of the banks were char acterized 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 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 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 processes of mergers, acquisition and the stock market (C BN, 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 good 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 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 get highly ICT-based and because of its inter-sectoral link, it appears to be reaping most of the benefits of revolution in technology, as c an 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 presently 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 contented alternatives to cash and cheque for making transactions. Such new practices have led to the development of a truly global, seamless and Internet enabled 24-hour business of banking.ICT revolution both in terms of innovation rate, speedy 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 alter Teller Machine ( automated teller machine), electronic Fund 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 speedy operations and enhanced productivity (Adeoti, 2005 Ovia, 2005).Though there may be littler 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 . right off banks can provide comprehensive services to their customers by making them adit their accountings 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. alike 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 shoesThe ICT culture in Nigerian economy can be s charge to be on the increase. Nigeria is the largest Internet 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 Unions (ITU) benchmark of 1% (Ndukwe, 2005). This phenomenon has helped banks keep substantial information on-line which reduces the cost of merchandising 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 mesh and on-line real time banking facilities which has improved the scope of Nigerian banking. It has aided transfer of funds from one location 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 accounts by calling 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 Services Automated Payment Systems, Automated Delivery Channels.In the compend 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 rag Internal Network SMS spiffy Substitution 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 rece nt literature will form the basis for evaluation of ICT adoption success or otherwise, and informs its inclusion in this seminar paper.TABLE 2.1SURVEY information 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 memory access 27% 88% 91%2 Internal Network Wire based 68% 82% 92% receiving set 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 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- work, as this is the main channel for e-banking. The general a vailability of Internet allows for the analysis of overall ICT-readiness in the Banking Industry. The Table shows that 91% of Banks study in Nigeria have access to the lucre 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 get together 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 (LAN) 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 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 alert Instant notification 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 examine in Nigeria use SMS-Alert, except some of the Micro-finance Banks. It was an ICT infrastructure that recorded no patronage between year 2000 and 2002.Substitution of posta l 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 increasingly being utilize for especially non-legal counterbalance 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 style 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 transactions all have to be managed. Depending upon its n ature 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 might be able to attract the segments among consumers who previously were not addicted 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 authenticati on 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 class-conscious 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 neediness 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 acceptation ON BANKING INDUSTRYMany researchers have agreed on some benefits that accrue 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 sec 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, snuff it 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). Enhanced competitive advantage. Researche s 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 Services (DIBS) of Diamond Ba nk 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 challenges 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 growing on perfu nctory 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, travel 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 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 reissue 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 some challenges. ChallengesThe automation of banking operations is really posing challenges to the Consumers, the banks themselves and Regulatory/Supervisory politics 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. Ineffectiveness of telecommunication service providers and epileptic supply 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 to a ccess 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 reside in country 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 million farmers (Olatunji, 2013) is one warning 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 regulatory provisions to protect th e consumer of the products/services. Fraud So much 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 confidential information from the system if security measures are weak to checkmate unauthorized violation 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).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 integrating in Nigeria. Selected Papers for 46th Annual Conference, Nigerian sparing 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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