CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Information technology (IT) is a wide professional field encompassing several functions like setting up communications networks, protecting data and information, and fixing problems with computing devices (Gershon, 2022). The management of computer systems, networks, and other technical components of businesses is now commonly done by IT departments in many firms. IT professionals include computer programmers, network administrators, computer engineers, web developers, technical support among others (Digital Class, 2023).
Today, businesses cannot function and expect to remain competitive without adequate information technology systems. Some of the emerging trends that are revolutionizing the industry today include artificial intelligence, cloud computing, home and business security, blockchain, drones, and IoT. IT is a field that is constantly evolving, so those who want to stay on top must modify these innovations for their own, or other uses (ITI Technical College, 2023).
Innovation is primarily fueled by information technology, and since innovations are the future's wave, businesses cannot live without them. Many companies have benefited greatly from the digital revolution, which has also maintained their profitability. In particular, we cannot envisage the successful operation of the banking sector without IT and communication.
Information technology in the banking industry involves the application of advanced ICTs in addition to computer science to allow banks to provide better services to their customers in a safe, dependable, and cost-effective way while maintaining a competitive edge over their rivals. The importance of information technology is felt strongly in the financial sector because it gives banks a competitive edge that ultimately contributes to effective customer service (Sharma and Mittal, 2018).
Customers can now more easily track their bank accounts and daily transactions thanks to technological advancements in banking practices. E-banking provides customers with simple access to their accounts, allowing them to report any suspicious activity or unauthorized transactions carried out on those accounts. As a result, bank officers' shady practices have decreased (Offei and Nuamah-Gyambrah, 2016).
Because of the sector's technological advancement, the introduction of the cashless policy—which Edesiri and Promise (2013) refer to as the cashlite economy—was successful. This has minimized the movement of physical cash that can expose one to robberies. Additionally, it has increased revenue for the banks owing to transaction fees. The profitability of Nigerian banks has increased due to the availability of alternative channels in the country's banking system, which has decreased the need for customers to directly interact with bank employees or visit banks(Polatoglu and Ekin, 2001; Offei and Nuamah-Gyambrah, 2016).
Given the significant number of customers that many Nigerian banks have today, it would have been challenging for the quality of service to be improved with the outdated approach of "across-the-counter transaction" if not for the emergence of technological innovation. Staff members of the bank can work from home using their mobile devices, particularly when they are on vacation and their service is needed. As opposed to the 3-5 days required by the traditional banking system, online real-time has enabled inter-bank clearing possible in Nigeria within 24 hours. This e-payment and inter-bank settlement method is an attempt to bring banks in emerging nations up to date with international standards (Cherotich et al., 2015).
According to a CBN report (2020), the amount of bank checks cleared nationwide decreased by 10.8m and N5.4bn, or 7.7% and 6.9%, respectively, in 2017. In comparison to the year before, there was a significant increase in the quantity and value of payments made using e-money products like ATMs, Point of Sales (PoS), mobile devices, and online banking by 43.2% and 37.6% (1.02m and N9.13bn, respectively) in 2017 (CBN, 2020).
There were 28.99 million and N184.6 billion more web transactions in 2017 than there were in 2016, a rise of 105.8% and 39.4%, respectively. 2017 saw a 1.6% and a 45.7% (47.81m and N1.1bn, respectively) rise in the quantity and value of mobile payments compared to 2016. Comparing 2017 to 2016, electronic fund transfers on the Nigeria Inter-Bank Settlement Systems Plc (NIBSS) rose by 4.3 and 2.5% (31.03m and N14.95bn, respectively). This was solely due to customer preference for the platform over bank cheques in terms of affordability and ease of use (Ohiani, 2020).
However, the widespread exodus of IT professionals, particularly from the banking field, has escalated into a serious issue known as brain drain. Consequently, there are substantial fears expressed about the profession's prospects in the case of a prolonged emigration of professionals to other nations. For any country to continue to exist, everyone must contribute to advancing her transformational agenda (Okoro et al., 2014).
The decision to abandon Nigeria in search of "greener pastures" in Western and Asian nations is one that many professionals and skilled workers grapple with frequently and for a variety of reasons. Nigeria's tech ecosystem is battling to retain its top software engineers. Lagos, the most important of Africa's largest tech hubs, is being attacked by a massive number of highly qualified software engineers exiting the country for Europe, Canada, or Berlin.
In a brainstorming session in Lagos, the Nigerian Minister of Interior lamented over the cascading impact of brain drain, saying that Nigerians would prefer to live and die abroad rather than experience the hopelessness brought on by unemployment (Odiogor, 2013). Odiogor reported that the Minister went on by informing the perplexed audience that many Nigerians were even suffering in abroad-based prisons in their illegal search for the few scarcely available employment. This report is troubling, to say the least. The most disturbing aspect of it all is that Nigeria is quickly losing its highly skilled workforce and professionals to other nations in quest of a better future.
According to Bello (2023), they are drawn by high-paying employment opportunities, rapidly expanding career opportunities, the opportunity to work on complex issues and come up with innovative solutions, enhanced research facilities, standardized infrastructure, and a high standard of living in a country with a strong economy that will safeguard the future of their middle-income family. Their own nation suffers as a result, losing out on resources such as labor, fiscal growth, technological advancement, and human development, among other things (Adebayo, 2022).
Chukwunyem (2022) reported that Abubakar Suleiman, the Chief Executive Officer of Sterling Bank Plc, informed reporters that the industry had been hit by a departure of tech talent at a press conference held after the Bankers' Committee meeting in April 2022. As a result, bank customers across the nation have reportedly complained about the poor services provided by lenders, particularly with regard to the delays and complete failure of tech applications. Sometimes it took more than two weeks for money sent between customers to either appear in the recipient's account or be returned to the sender.
Additionally, it was said that some of the establishments were plagued by the fear of succession because the longtime staff members might not have anyone to succeed them. There have also been reports of concerns that the standard of service offered by the nation's banks may even deteriorate over the next few months.
Brain drain is a terrible wind that is sweeping through the banking sector's information technology. In light of this, this study sets out to present empirical evidence of brain drain in information technology using the banking sector in Nigeria as a case study.
1.2 Statement of the Problem
The banking sector is increasingly being crippled by the brain drain of information technology experts, which is quickly depleting the country's limited human resources (Ibeh and Idowu, 2023). And this begs for empirical proof.
1.3 Aim of the Study
The study aims to provide empirical evidence on brain drain in information technology from the banking sector in Nigeria.
1.4 Objectives of the Study
The study has the following specific objectives:
- To look into the causes of brain drain in information technology in the banking sector in Nigeria
- To investigate the effects of brain drain in information technology on banking sector in Nigeria.
- To provide empirical evidence on brain drain in information technology from the banking sector in Nigeria.
1.5 Research Questions
- What are the causes of brain drain in information technology in the banking sector in Nigeria?
- What are the effects of brain drain in information technology on banking sector in Nigeria?
1.6 Research Hypothesis
H0: There is no statistically significant difference in the effect of brain drain in information technology in banking sector in Nigeria.
Ha: There is a statistically significant difference in the effect of brain drain in information technology in banking sector in Nigeria.
1.7 Justification of the Study
The findings in this research will contribute to the literature on empirical evidence of brain drain in information technology from the banking sector in Nigeria. Moreso, the result will provide helpful resource to students, lecturers and future researchers. Ultimately, it will also help banks, policymakers and stakeholders understand the severity of the problem and take appropriate measures to address it.
1.8 Scope of the Study
The study aims to investigate this issue in the context of information technology professionals working in two selected banks in Nigeria.
