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Background of the Study

Developments in information communication technology has improved the operational efficiency of many organizations and revolutionized the way they conduct their businesses. Many organizations have adopted ICT in their operations with the aim of reducing operating costs and improving overall organization performance through excellent service deliver. This has provided organizations a decent chance to produce new business models and procedures in service delivery (Henderson, McGoldrick & McAdam, 2003). Recent advances in the fields of information and technology as well as knowledge management have empowered so many industries in the line of acquiring, sharing and using information (Fu et al., 2010.

Information and Communication Technology (ICT) is the computerization of procedures, controls and data generation utilizing computers, television and other electronic devices to guarantee smooth and productive running of operations (Adeoti, 2005). Financial institutions have been using ICT since the invention of computers in the early 1980’s. In the early stages, the benefits of ICT to financial institutions were limited as the technology was very expensive and not easily accessible. Advancements in ICT have seen a number of financial institutions adopt it in their operations.

 Information and communication technology adoption improves the efficiency and effectiveness in the organization in serving clients. It reduces the costs of operations besides allowing access to customers outside the branch network of a financial institution. This improves efficiency and increases sales and hence financial performance (Gerrard & Cunningham, 2003).

 Internet banking for example provides customers with access to their bank accounts through their online website to access and transact as though they were in a physical branch. The rate of adoption is high whenever customers know that their transactions are secure and that their security is not compromised. , Application of ICT has helped financial institutions in minimizing their operational costs thereby leading to improved overall financial results. This is especially realized because the ICT investment costs are capitalized and amortised over the useful life as per the institution’s policies (Dabholkar & Bagozzi, 2002).

The advancement in ICT has broadened the scope of business models creation and changed the understanding and application of distribution channels of monetary system leading to a decrease in the exchange costs and enhancement of accessibility to clients. This has seen greater adoption of ICT among financial institutions for the purposes of transaction processing. Some of the activities automated through ICT include customer enquiries, automated teller services, telephone banking, internet banking, mobile banking (for examples MTN mobile money and Orange money) among others. Investments in ICT in the financial sector enable increased efficiency and accessibility to information this improves coordination of activities within the organizational boundaries. ICT investment in the banking sector is measured according to the ICT product. ATM is one of the ICT product in the banking sector that is allows the customers to deposit cash and make withdrawals outside the banking hall (Wisniewski, 2008). ATM transactions are measured using the number of transactions per day divided by the total number of transactions per year. Electronic banking is each and every aspect of bank that you could do without visiting a branch of the specific bank physically or in person. This saves a lot of paper which otherwise was to be done by preparing physical paper (vouchers) which is a prescribed format for which is taken as a request from customers which serves as evidence. (Nammi Sai, 2017).

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 ICT in accounting (computerized 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 commercial banks.  Information technology has led to improved worker’s performance speed and accuracy and in general, has reduced the length of transaction processes and procedures.

Interconnected, global business environment, computerized accounting systems becomes the engine of growth in business organizations in today’s computerized systems. ICT therefore involves the computerization of accounting information system which is put in place so as to make decision making easy. These are accompanied with a number of benefits like speed of carrying out transactions, quick analysis timeliness, accuracy and reporting. Computerized accounting process automates the accounting process improving efficiency and cutting down costs. It tends to be more accurate, faster to use and less subject to error Dindi Genil (2013).

With a substantial increase in the volume of accounting transactions and increase in exposure to errors due to complexity of the accounting system, there was a need for a system which could store and process accounting cost with increased speed, storage and processing capacity. This led to the development and introduction of accounting software packages Ryan Valencia (2013)

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 and communication technology are highly unpredictable. Hence the rule of ICT in the banking industry become of importance to the 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 be as to the role of information and communication 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 and communication technology impact has been made on all financial institutions most especially the banking sector. This ability of business as well as the government to develop and make use of the computerized system to track and record financial transactions easily.

It is of most important that since the inception of information and communication technology (ICT), computerized accounting system makes accountants to process large amount of financial information which his process quickly through the accounting system.

Quicker processing time for individual transactions had also reduced the amount of time needed to choose out each accounting period. Transactions that would have taken an accountant 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).

Statement of the Problem


Highly dynamic operational environment among financial institutions has called on them to continuously think of ways of improving the efficiency and effectiveness in their operations for optimal financial performance results. Adoption of ICT has been used as one of the strategies to help financial institutions improve performance.

On international scene, Al-Adamat (2015) sought to establish how ICT implementation of ICT affected marketing of hotels and restaurants in the Jordan. It was established that the hotels adopted ICT to different scales and they positively affected service delivery and overall performance. Binuyo and Aregbeshola (2014) examined the impact of ICT implementation and application on overall financial 6 results of commercial bank in South Africa and established that adoption of ICT led to increased overall financial outcomes thereby positively contributing to the shareholders’ wealth. Agbesi (2013) sought to find out how adoption of  ICT affected the financial results of Unique Trust Bank and established that ICT led to higher customer satisfaction, repeat business and overall customer loyalty. These in turn improved financial results posted by the Bank. Basweti, Masese & Onsiro (2013) acknowledged the need for financial institutions to improve their customer’s knowledge and awareness on developments in ICT so as to improve their uptake. Adoption of ICT in operations led to better financial results in the financial sector in general.

The computerization of the bank’s operations and service as well as the introduction of accounting software and Automated Teller machines by some financial institutions has help in improving the financial strength of some Cameroonian financial institutions.

Information technology is an entrepreneurial as corporate resources should by managed and it greatly increase the opportunities that are available to the organization.

As a result of increased demand for customer deposits Cameroon banks especially have realized the imperative of good 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 regard to choosing where it is safe to put their money and where they would be served promptly, preferably in a pleasant and friendly environment. Thus, they have started looking at the level of service and professionalization of banks before deposing their funds. Proximity to banks has lost its value. The issue now is safety and level of service with respect to quality speed and efficiency has become of most important.

Financial Institutions 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 technologies in Cameroon banking operations. More so, there is growing evidence that customers have started associating quality of service in a bank with the bank’s possession of online real time system. It can be said possession of such system is now judged to be of a high banking quality service in Cameroon.

Research Question

The main question of this study is;

What is the effect of Information Communication Technology on the performance of financial institutions case of BICEC Bank Buea?

The specific questions here include;

  1. To what extend does internet influences the performance of financial institutions?
  2. What is the effect of e-banking on the performance of financial institutions
  3. How does automated teller machine technology influences the performance of financial institution
  4. To what extent do computers influence the performance of financial institutions?

Objectives of the Study

The main objective or purpose of this study is to investigate the effect of information communication technology on the performance of financial institutions in case of commercial banks most especially.

Furthermore, the specific objectives are as follows;

  1. To determine the effects of internet on the performance of financial institutions.
  2. To find out the challenges faced by financial institutions in the usage of computers
  3. To identify the strategies to improve e-banking in financial institutions.
  4. To identify the effects of automated teller machines technology on the performance of financial institutions.


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