Banking on computers.

Author:Jason, Pini
Position:Nigeria - Includes related article

Pini Jason and Jato Thompson report on the rapid modernisation of Nigeria's banking system as the full force of computer technology makes itself felt.

If there is one sector of the Nigerian economy where computerisation has enjoyed a boom it is in the banking industry. Computers have made all the difference between the old style, conservative banks, and a new generation who have brought fierce competition to a sector previously marked for its sloth. Banks now compete on how long it takes them to attend to a customer, with some claiming that it takes no more than three minutes. In a country were hour-long queues had been standard, this is indeed revolutionary.

Computers are at the heart of this new efficiency and speed. The "new generation" banks, which have centred their operations around a computer-based core have already reaped handsome profits from their innovation.

Some of these banks have taken computerisation a stage further and in the process transformed traditional banking habits in the country. Dedicated Wide Area Networks (WANs) link their branches by computer making it possible for customers to cash their cheques at any of the banks' branches.

The customer is spared the risk of transferring cash physically over long distances, and the new system drastically cuts down the time taken for clearing an out-of-station cheque, which used to take up to an absurd 21 days.

The bank which blazed the trail in WAN application is Nigerian International Bank (NIB). Starting in business in the mid-1980s, it stunned the industry by posting a N10m profit after a mere six months of operation. Although some credited this extraordinary performance to NIB's foreign exchange transactions, it soon became clear that the bank's spectacular success was based on excellent customer relations.

This had been achieved through a highly efficient workforce backed up by a computer system. For example a computer link from the Lagos head office to NIB's only branch at the time, in Kano in the north, speeded up transactions considerably and helped generate enormous new business

Other banks have since followed the example of NIB. Diamond Bank Limited is one of the new generation of computerised banks in Nigeria. All its branches are linked through the Diamond Integrated System of computers.

Other banks are cottoning on fast too. But one major problem facing anyone needing a network for their operations is that networks frequently depend on the decadent and notoriously...

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