TABLE OF CONTENT
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF PROBLEMS
1.3 OBJECTIVES OF THE
1.4 RESEARCH QUESTION
1.5 SIGNIFICANCE OF THE
1.6 SCOPE OF STUDY
1.7 LIMITATION OF STUDY
2.0 LITERATURE REVIEW
2.2 ELECTRONIC BANKING
2.3 TYPE OF ELECTRONIC
PROBLEMS AND SOLUTIONS ASSOCIATED
2.5 NEGATIVE IMPACT OF ELECTRONIC BANKING IN NIGERIA
2.6 POSITIVE IMPACT OF ELECTRONIC BANKING IN NIGERIA
RESEARCH DESIGN AND METHODOLOGY
3.1 AREA OF STUDY
3.2 SAMPLE AND SAMPLING
3.3 INSTRUMENTS OF DATA
3.4 METHOD OF DATA
3.5 METHOD OF DATA ANALYSIS
DATA PRESENTATION, INTERPRETATION AND
4.1 DATA PRESENTATION
5.1 SUMMARY OF FINDING
1.1 BACKGROUND OF
Before the emergence of
modern banking system, banking operation was manually done which lead to a slow
down in settlement of transactions. This manual system involves posting
transactions from one ledger to another which human handles. Figures or
counting of money which should be done through computers or electronic machine
were computed and counted manually which were not 100% accurate thereby
resulting to human errors. Most bank then use only one computer in carrying out
transactions which ameliorate the sluggish nature of banking transaction.
do not embrace electronic banking early compared to developed countries.
Nigeria adopted electronic banking system in the early 2000s. During the introduction of electronic banking
system, the use of raw cash was said to have bred corruption through the “cash
and carry syndrome” usually linked with the swift movement of Ghana-must go”
bags by some politicians. Such bags as some analyst say, are a major source of
corrupt practices as dubious persons seeks to bribe their way to avoid been
checked in some sensitive areas or places in a corrupt society.
Since electronic banking started in all Nigeria banks, it
has been a woe for civil servants; checks show that some staff in
establishments such as the national boundary commission for instance, are yet
to receive their salaries for the previous months as efforts to electrically
transfer salaries into their account have failed according to Ibrahim, D.
“One bank will tell you it has transferred your salaries
but the supposed recipient bank will tell you it has not received anything
leaving you even more confused”, says John, I.
(2009). Olekah, J. (2009) while acknowledging the initial hiccups that dogged
the system, advises stakeholders against being discouraged as such “teething
problems” are normal.
James, A. (2009) a banker reported to vanguard annual
report that “we should not destroy electronic-banking by looking at the
negative aspects, we must strive towards perfecting it”. James, A. (2009) also
says that the volume of data generated by the Government ministry Agencies is
much making it a bit difficult for banks to cope, Mathew S. (2009) a worker
says in his report to vanguard annual report on banks and cards that government
should have done its home work “very well” before introducing the system, “they
plugged us into a system they were not prepared for and the result is untold
hardship visited on innocent people”.
At this juncture, is good to know what e-banking is all
According to Anyawaokoro, M. (1999). Electronic banking
is defined as the application of computer technology to banking especially the
payment (deposit transfer) aspects of banking. He also defined electronic
banking as a system of banking with an electronic communication network which
permits on-line processing of the same day credit and debit transfers of funds
between member institutions of a clearing system.
According to Clive, W. (2007) in his Academic dictionary
of banking, electronic banking is defined as a form of banking in which funds
are transferred through an exchange of electronic signals between financial
institutions, rather than an exchange of cash, cheques or other negotiable
According to Omotayo, G. (2007) defines electronic
banking as a system in which funds are moved between different accounts using
computerized on line/real time systems without the use of written cheques.
According to Edit, O. (2008) in international Journal of
investment and finance, electronic banking is defined as a system by which
transactions are settled electronically with the use of electronic gadgets such
as ATMs, POS terminals, GSM phones, and V-cards e.t.c. handled by e-holders,
bank customers, and stake holders.
1.2 STATEMENT OF
As earlier pointed out,
there is delay in payment of cheques which lead to the adoption of electronic
banking system. Adoption of electronic banking which suppose to ease banking
transactions rather resulted to woes to customer. Most people complain of time
wasted in banks. This occurs when there is power failure in banks resulting to
slow down in operation.
Another problem that emerged was that banks do not have
information backup to fall back on should there be any computer break down.
In investing in electronic banking, the country will need
a large amount of financial resources in computer technology, obviously, the
resource is in short supply in Nigeria, couple with high level of poverty. For
an efficient functioning of electronic payment system, there must be
availability of infrastructural facilities such as electricity and
telecommunication network, however, power supply fluctuates and there is still
constant failure links in networks.
Since early 2000s banks have been developing and
introducing payment cards for their customers as well as deploy ATM’s cards.
Usage was however low due to lack of interconnectivity i.e. switching platform
to interconnect the ATM’s for card holders.
1.3 OBJECTIVES OF
This research work intends to assess the extent of
electronic payment in banking activities as well as identify the various types
of electronic banking.
The researcher will also
evaluate the major problems associated with the development of electronic
banking system in Nigeria
as well as evaluate possible solutions to these problems.
The effect of electronic banking on profitability of
banks will also be assessed. There are different types of electronic banking
used in Nigeria
banks; the researcher will like to evaluate the impact of these e-payment
systems on banking industry and also assess the impact of electronic banking in
In order to get information from respondents the
following questions where formulated:
What are the various types of electronic payment and the
extent of electronic payment in banking activities?
In what extent can e-banking improve
or enhance banking services?
What are the major problems associated with the development
of electronic banking system in Nigerian?
What are the solutions to the problems associated with
the development of e-banking?
What extent has e-payment affected banking activities?
The research shall attempt to find
answers to these questions in the next chapter.
OF THE STUDY
Electronic banking in our economy today is a welcome development and also
its impacts in the society are over-whelming, so this research is significant
in so many ways.
It will expose the strength and weakness of
It will motivate
banks and other economic agents to computerize their services.
in the area of electronic banking will be advanced.
contributing to the knowledge of electronic banking, it forms a reference for
future research in this area.
1.6 SCOPE OF STUDY
This research is on economic implication of electronic banking in Nigeria banks
and also the various forms of payment and electronic systems used by banks. The
researcher will base this work on the entire deposit money banks in Nigeria but to
Diamond Bank in particular.
1.7 LIMITATION OF
Time is a major factor to the researcher as research of this kind
requires enough time in gathering of data, but it was not given to carryout the
research, distribution, collection and analysis of questionnaire.
Also the school system has made it difficult for student to go out in
search for information by not granting exeat for student. Some banks hud
information from students who desires such information in other to maintain the
banks secrecy thereby making it difficult for students to gather information
for their research.
Finally, finance was infact the most limited factor, in spite of this the
researcher have to travel out to the sampled organization to interview some of
the managers and supervisors.
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