CHAPTER ONE
INTRODUCTION
1.1 Background Of Study
The banking industry has developed from traditional “brick and mortar” to Computerized accounting system. Computerized accounting system refers to the use of the Internet as a remote delivery channel for banking services, including viewing and verifying transactions on account, Checking Balances, Printing Statements, Monitor uncredited and unpaid cheques, and many more. The service provided by banks on the Internet has evolved from simple consultation of account to a full range of banking services. Compared to the traditional form of banking, the Internet has the advantage of eliminating most of the network and software costs attached to other electronic banking innovations through the use of browsers, with the consequence that the unit cost is only a small percentage of traditional costs (Clemons and Hitt, 2000). Jones et al (2004) in their studies found that banks saved 107 times of total cost when computerized accounting system services were employed. Pennathur (2001) found that Computerized accounting system increase operational, legal, reputation risks, and increase competition thus promoting better services amongst competing banks. Computerized accounting system also allow customers to interact more intensively than before with the front office of the bank and, at the same time allow banks to centralize back office operations and increase their efficiency. It‟s day and night availability makes it so convenient for the banks‟clients.
Warri, like any third world state is not yet at the level of Western societies and therefore cannot be expected to have similar levels of banking services. A high percentageofpeopleinthestateareunbanked.Outofapopulationofabout23million, only 2.2 million people have bank accounts(Business&Finance|Tue,15 Dec 2009). This rather low patronage of banking services is attributed to the fact that a greater proportion of Warri communities are illiterates and the economy is to large extent cash based.
However, globalization and the need to upgrade services to an internationally accepted level have prompted some Warri banks to offer Computerized accounting system services. In Warri the face of banking is fast changing and focus is now on new delivery channels, to improve customer service and give way to 24 hours a day access to banking services. With computerized accounting system, customers are supposed to transact from the comfort of their homes and offices and be able to do most of the transactions which would have been done in the banking halls. Using a PC with an internet connection, they are able to transact on their traditional accounts such as cash withdrawals, Transfers from one account to the other, payments of utility bills, viewing and printing of statements, request for cheque books etc.
1.2 Problem Statement
Computerized accounting system is the latest development that has added a new dimension to banking transactions by making it more convenient and also contributes to the elimination of long wearisome queues in banking halls. Nonetheless, there are some problems which do not encourage banking through the internet and causes many customers to be physically present in the bank premises instead of taking advantage of computerized accounting system. Low broadband internet penetration, customers’ preference for traditional branches, fear of online threats/scams, lack of basic knowledge of computers and the highcostofinternetaccessibilityaresomeoftheproblemsthreateningthegrowthofcomputerized accounting systeminWarri.Unfortunatelythisnewadditionalwayofdoingbusinesscomes with risks. This study therefore seeks to look at the perceptions of banks and their customers regarding the effect of computerized accounting system innovation on banking services inWarri.
1.3 Statement of objectives
The main objective of this research paper is to assess the effect of computerized accounting system in Warri with CAL Bank, Ubaplc and Prudential bank as case study. The goal of this study is accomplished by focusing on these specific objectives.
- To identify factors influencing computerized accounting system adoption in Warri.
- To identify banking services that could be utilized with computerized accounting system of Uba plc.
- To identify factors impacting negatively on Uba plc customers’ utilization of computerized accounting system.
- To identify Uba plc perceptions of Computerized accounting system and its operational value.
1.4 Research Questions
The research questions to be addressed by this study are:
- What factors influence computerized accounting system adoption in Warri?
- What banking services can be utilized through computerized accounting system of Uba plc?
- Are there any negative factors affecting Uba plc customers’ utilization of Computerized accounting system?
- What is Uba plc perceptions of Computerized accounting system and its operational value?
1.5 Significance of Study
Mansel et al (2004) contend that “the Internet is becoming an important business tool”. However there are challenges to realize full benefits of Computerized accounting system including organizational ability to utilize the technology, management attitudes, resource constraints, and knowledge issues. According to Chircu and Kauffman (2000) as cited by Woldie et al (2008), the lack of adequate information technology infrastructure remains a critical barrier in supporting the continual growth of online commerce.
The banking industry in Warri is a service industry crucial to the growth of its economy. This research paper explores computerized accounting system services in Warri along with challenges in the provision of this service. The study further looks at how customers perceive its usefulness in relation to traditional banking services, its role in the developing Warri economy and the financial sector in general.
