The internet is perhaps one of the most useful tools to businesses and individuals in contemporary world economies. Its use has touched virtually every aspect of human endeavor including banking. Since the introduction of electronic banking, there have been challenges facing the adoption of electronic banking in Nigeria. It was in line with this that this study aims at examining electronic banking and the challenges of the Nigerian business environment. Through the cluster sampling and random sampling technique, data was collected by means of questionnaires from (45) Ecobank officers and the result were analyzed using the total scores, simple percentage method and chi-square. The hypothesis testing was done at five per cent level of significance. The result shows that Ecobank electronic banking guidelines are in line with the CBN electronic banking guideline. The bank has an effective electronic banking system which has improve its customer’s relationship and satisfaction. The Nigerian Business environment hinder the smooth operations of Electronic banking in the bank through the various challenges it posses on electronic banking. To this end, it is recommended that the bank information technology training programme should be encouraged among the staffs, and regulatory authorities must stipulate standards for the banks to follow to avoid making Nigerian Banking Sector a dumping ground for the outdated technological infrastructures.




Title Page                                                                                                                    i

Certification                                                                                                               ii

Dedication                                                                                                                  iii

Acknowledgements                                                                                                    iv

Abstract                                                                                                                       v

Table of Contents                                                                                                       vi

List of Tables                                                                                                               ix

CHAPTER ONE: INTRODUCTION                                                                   PAGES      

1.1 Background to the Study                                                                                       1-4

1.2 Statement of the Problem                                                                                      4-5

1.3 Objectives of the Study                                                                                           5-6

1.4 Statement of Research Questions                                                                           6

1.5 Research Hypotheses                                                                                               7

1.6 Significance of the Study                                                                                         7-8

1.7 Scope of the Study                                                                                                     8

1.8 Definition of Terms                                                                                                 8-11

References                                                                                                                     12-13


2.1 Introduction                                                                                                              14

2.2 The View on Electronic Banking                                                                          14-16

2.3 Nature of Electronic Banking                                                                               16-18

2.4 Development and Prospects of Electronic Banking in Nigeria                          18-20

2.5 Areas of Information and Communication Technology Deployment by Banks 20

2.5.1 Automated Payment Systems                                                                             20-21

2.5.2 Electronic Card                                                                                                    21-22

2.5.3 Automated Delivery Channels                                                                            22-23

2.5.4 Mobile Banking                                                                                                     23-24

2.5.5 Telephone Banking                                                                                                24

2.6 Benefits of Electronic Banking                                                                                25

2.7 Challenges of Regulatory On Electronic Banking in Nigeria                             26-28

2.8 Electronic Banking Competitiveness                                                                       28

2.8.1 Rivalry among Competing Parties                                                                        28

2.8.2 New Entrants                                                                                                           29

2.8.3 Suppliers                                                                                                                   29

2.8.4 Buyers                                                                                                                       30

2.8.5 Substitutes                                                                                                             30-31

2.9 The Emerging Issues in Electronic Banking                                                            31

2.9.1 Electronic Banking Profitability, Efficiency and Reliability                               31

2.9.2 Operations of Financial Institution                                                                        32

2.9.3 Bank Customers Relationship                                                                                32

2.9.4 The Regulatory Challenges                                                                                 32-34

2.9.5 Measures Taken By Banks to Address Electronic Banking Challenges             34 CBN Standards and Guidelines on ATM Operations in Nigeria                 34-36

References                                                                                                                      37-40



3.1 Introduction                                                                                                                41

3.2 Research Design                                                                                                     41-42

3.3 Population of Study                                                                                               42-43

3.4 Sampling, Procedure and Sample Size                                                                     43

3.5 Data Collection Instrument and Validation                                                        43-45

3.6 Method of Data Analysis                                                                                            45

3.7 Limitation of the Methodology                                                                                  45

References                                                                                                                          46


4.1 Introduction                                                                                                                 47

4.2 Presentation and Analysis of Data According To Research Questions            47-60

4.3 Test of Hypothesis and Inference                                                                         60-65                                                                       

4.4 Discussion of Findings                                                                                                65

Reference                                                                                                                           66


5.1 Summary of the Study                                                                                                67

5.2 Conclusion                                                                                                               67-68

5.3 Recommendations                                                                                                   68-69

5.4 Suggestions for Further Studies                                                                               69

Bibliography                                                                                                                  70-75

Appendix - Proposed Research Questionnaire                                                           76-79


Table 4.1: Academic Qualification of Respondents                                                        48

Table 4.2: Years of Working Experience with EcoBank Plc.                                        49

Table 4.3: Cadre of Respondents                                                                                      50

Table 4.4: Professional Qualification                                                                                50

Table 4.5: Department of Respondent                                                                              51

Table 4.6: Usage of Computer Technology                                                                       52

Table 4.7: Usage of Electronic Banking                                                                            53

Table 4.8: Threat to Electronic Banking                                                                           54

Table 4.9: Threat Assessment                                                                                             54

Table 4.10: EcoBank Electronic Banking System                                                             55

Table 4.11: Information Technology Program                                                                  56

Table 4.12: Customer Satisfaction Improvement                                                              57

Table 4.13: Efficiency and Reliability of Banks                                                                 58

Table 4.14: Prospect of Electronic Banking in Ecobank Plc                                            59

Table 4.15: Fortune of the Bank                                                                                          60

Table 4.16: Chi-Square Table on Bank-Customer Relationship                                       61

Table 4.17: Chi-Square Table on the CBN Electronic Banking Guideline                      62

Table 4.18: Chi-Square Table on the Nigerian Business Environment                            64











Globalization and Information and Communication Technology (ICT) took the world by storm and this has posed great challenges to the banking industry- (Garuba, 2008). Information and Communication Technology (ICT) has changed not just the business world but also the world we live in. It has changed the way things are done that today no matter what you plan to do, whether you will work with people or money, with words or numbers, technology plays an important role. In fact, it has re-defined the world order. With technological breakthrough and advances in telecommunications, speed of equipment and the use of computers, bankers can now use these same links to transmit data. This gave rise to Electronic banking which is simply the application of information technology (telecommunications and computers) to transmit data from one point to another. The electronic delivery of banking services has grown rapidly in popularity that every bank now realizes that electronic banking has become a basic element of today’s financial service delivery.

E-banking includes familiar and relatively mature electronically-based products in developing markets, such as telephone banking, credit cards, ATMs, and direct deposit. It also includes electronic bill payments and products mostly in the developing stage, including stored-value cards (e.g., smart cards/smart money) and Internet-based stored value products. E-banking in developing countries is in the early stages of development. Most banking in developing countries is still doing the conventional way. However, there is an increasing growth of online banking, indicating a promising future for online banking and Nigeria banks are taking good advantage of it.  Muniruddeen, (2007) cited in Adesina & Ayo, (2010), corroborated this submissions that the banks’ huge investment in telecommunication networks and various e-Banking services delivery could be seen as an effort towards measuring up with global standard. This is among other reasons such as increased customer demand, increased competition among banks themselves; derived minimized cost, new entrants, and better service delivery. Moreso, Schaechter (2002) argued that electronic banking has made it easier for customers to compare banks' services and products, increase competition among banks, and allows banks to penetrate new markets and thus expand their geographical reach. Some even see electronic banking as an opportunity for countries with underdeveloped financial systems to leapfrog developmental stages. Customers in such countries can access services more easily from banks abroad and through wireless communication systems, which are developing more rapidly than traditional "wired" communication networks. Prior to the introduction of electronic banking in Nigeria in the 1990’s masterminded by the new generation banks such as Intercontinental Bank, Zenith Bank, Guarantee Trust Bank etc., financial services delivery was very poor. Customers had to spend hour in long queues in the banking hall to carry out transactions either to withdraw or deposit cash into their account. This was the era of manual processing of transactions.  The old generation banks such as United Bank of Africa, First Bank of Nigeria and Union Bank of Nigeria saw themselves as lords in the financial service industry. They dictated the pace in the banking industry and being market leader with many products and services. The competition train in the banking industry has shifted to technology and intensive delivery of services which has created paradigm shift in banking services in Nigeria. Banks like First Bank, Zenith Bank, and Guaranty Trust Bank used technology as a competitive weapon and successfully became one of the largest banks in Nigeria within four years post-consolidation era. Banking service delivery was re-engineered with the introduction of technology.

Integrated Banking Solutions (IBS) was also introduced in most banks. A central server replaced all branch level and controlling office level servers. Every transaction that is taking place across any service point like a branch or ATM is recorded in the server. This new operational method helps customers to conduct normal banking transactions like deposit/withdrawal of cash from account, account transfers etc. from any branch of the twenty – five banks in Nigeria without the account being domiciled in that branch. Automated Teller Machines (ATM) are equipped to facilitate several transactions, customers can withdraw from the ATM of a bank that they don’t have an account. Other roles like account transfers, payment of bills, balance enquiry are all possible through ATM. Over 25,000 ATMs are currently in use in the country connected to Inter Switch Network. Electronic banking is gaining patronage where information from central server is made accessible to the account holder using a PIN or PASSWORD. Account statements, account transfer facilities, bill payment facilities, list of cheques to be cleared, loan facilities in form of assets, vehicle and mortgage, international bank transfer are some of the facilities given by the banks to their customers.

Technology must provide security to meet the challenges encountered by E-Banking. Virtually all software and hardware vendors claim to build secure products, but what assurance does an E-Banking have of a product’s security? E-Banking want a clear answer to the conflicting security claims they hear from vendors. How can you be confident about the security built into a product? Independent security evaluations against internationally-established security criteria provide assurance of vendors’ security claims. The growth of the Web and Internet as new channels, the growth in their use by customers, the growth in their use by customers, and the floor of companies entering the market, presents a series of key challenges to companies. It is easy and cheap to put up a website. But to create an environment delivering effective service on the Web to a significant proportion of your customer base requires an E-Banking strategy.

The purpose of the present study is to analyze major issues needed to be mastered by Nigeria banks in order to compete with the rest of the world and to show the major developments and challenges in the Nigerian operating environment that are affecting the growth of electronic banking in the industry.


Despite the growing popularity of e-banking in the world, its rate of adoption in Nigeria has been relatively slow. This has been so despite its enormous benefits. In order to make the e-banking experience more pleasurable and beneficial to bank customers, the Central Bank of Nigeria (the regulatory institution of the Nigerian banking industry) in 2003 brought out policy guidelines. However, recent studies have shown that e-banking is growing at a slow pace.

The payments and clearing system in the country is under developed. There is no central clearing system to clear debit card transactions between banks. The banking halls continue to be immersed with the long queues as people come in to collect their monthly wages or salaries. Many people have been holding large sums of money outside the banking system as a result of the ordeal one has to go through before withdrawing money or making payment. However, faced with such problems in the payment process, only a few payment solutions have been introduced so far in Nigeria to solve them. Cash still remains the most popular retail payment instrument, despite the increase in the introduction of electronic payment schemes in the country. Payment for goods and services, settling utility bills, and money transfers has been a major headache for individual and firms in Nigeria resulting in declined business activities and huge debt to most of the utility providers (Sarpong, 2003).

Besides, the existing business environment also poses some challenges to the smooth operations of electronic banking in Nigeria. Some of these operational challenges include epileptic power supply, dominance of cash transaction in the economy, low level of awareness among Nigerians etc (Agbada, 2008). The thrust of this research work shall be to examine the trend of electronic banking in Nigeria and a critically examination of the challenges noted above.


The main objective of this research work is to examine the challenges of the Nigerian business environment on the adoption and implementation of electronic banking in Nigeria banking system.

Specifically the study objectives are;

Ø  To evaluate the prospect of electronic banking in Ecobank Plc;

Ø  To evaluate the impact of electronic banking on the operations of Ecobank Plc;

Ø  To examine the effect of electronic banking on bank-customer relationship;

Ø  To examine whether the Bank electronic Banking guideline comply with the CBN electronic Banking guideline policy;

Ø  To examine whether electronic banking has improve the fortune of the Bank;


The study would provide answers to the following questions:

Ø  Does Electronic banking contribute to the efficiency and reliability of banks and banking?

Ø  Does Electronic banking improves bank-customer relationship and retains them to their respective banks?

Ø  To what extent would Electronic banking improve the fortune of banks?

Ø  What are the results of frequent changes and upgrading of information Technology equipments on the bank’s profitability?

Ø  What are technical and operations challenges facing the adoption of electronic banking in Nigeria?

Ø  Does the electronic banking guideline of the banking industry comply with the CBN electronic banking guideline?





The following hypotheses are formulated from the research questions above:

Hypothesis 1:

H1:  Electronic banking does improve bank-customer relationship in Ecobank Plc.

Hο:  Electronic banking does not improve bank-customer relationship Ecobank Plc

Hypothesis 2:

H1: The Bank electronic banking guideline does comply with the CBN electronic banking guideline.

Hο: The Bank electronic banking guideline does not comply with the CBN electronic banking guideline.

Hypothesis 3:

H1:  The Nigerian Business environment does hinder the smooth operations of Electronic banking in Ecobank Plc.

Hο:   The Nigerian Business environment does not hinder the smooth operations of Electronic banking in Ecobank Plc.


The study would enable the banks executives and indeed the policy makers of the banks and financial institutions to be aware of electronic banking as a product of electronic commerce with a view to making strategic decisions. The research is equally significant because it would provide answers to factors militating against the implementation of electronic banking in Ecobank Plc; prove the success and growth associated with implementation of electronic commerce highlight the areas of banking operations that can be enhanced via electronic banking and also be an invaluable tool for Students, Academician, institutions, Corporate managers and individuals that want to know more about electronic banking trends especially in Nigeria.


In pursuance of the objective of the study, attention shall be focused on Electronic banking among other electronic commerce implementation. In order to conduct an empirical investigation into the adoption of Electronic banking in Nigeria, this study shall examine the nature of Electronic banking operations in Ecobank Plc from 2009 to 2011.


Automated Teller Machine (ATM) - ATM is a combined computer terminal, with cash vault and record-keeping system in one unit, permitting customers to enter the bank’s book keeping system with a plastic card containing a Personal Identification Number (PIN). It can also be accessed by punching a special code number into the computer terminal linked to the bank’s computerized records (Rose, 1999)

Bio – Metrics: It is a security device that uses an element of a person’s biological make-up to confirm identification. These devices includes writing pads that detect the form and pressure of a person writing a signature, eye scanners that read the pattern of blood vessels in a person’s retina, and palm scanners that read the palm of a person’s hand. It is also the use of measurement of human features such as fingers or eyes in order to identify people

Credit Cards - This is a plastic card that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the goods or items delivered. This represents the automated capture of data about purchases against a revolving credit account, (Pierce, 2001).

Debit Cards - These were a new form of value-transfer, where the card holder after keying of a PIN, uses a terminal and network to authorize the transfer of value from their account to that of a merchant. Introduced more recently, debit together with credit cards represent the most rapidly growing method of payments in several OECD countries. (Pierce, 2001) When a payment is made through a debit card, the funds are immediately withdrawn from the purchaser's bank account.

Electronic Cheque - Electronic cheques also known as e-cheques are virtual cheques that allow consumers to use Internet in making cheque payments. The buyer fills out a form (that looks like a cheque on the screen) with the necessary information, and then clicks the "send" button. The information then goes through a computer or a transaction service, depending on which way one chooses to accept check payments.

Electronic Funds Transfer at Point of Sale (EFT/POS) - EFT/POS is an online system that involves the use of plastic cards in terminal on merchants’ premises and enables customers to transfer funds instantaneously from their bank accounts to merchant accounts when making purchases. It uses a debit card to activate an EFT process, (Chorafas, 1988). It actually comprises two distinct mechanisms: debit and credit cards.

Electronic Purses/Wallets - There are two categories of e/wallet, these are;

a) E-wallets that store card numbers and cash. It operates like having a virtual savings account where charges are made for ongoing purchases, particularly micro-payments. This category of a digital wallet is where consumers store digital cash, which has been transferred from a credit card, debit card or virtual cheque inside their e-wallets.

b) E-wallets that store card numbers. This is a virtual wallet that can store credit card and debit card information. Other information that can be stored on this card is passwords, membership cards, and health information. Some of the e-wallets make it easier for consumers to buy goods using the card.

Electronic Money – Monetary value measured in currency units stored in electronic form on an electronic device in the consumer’s possession. This electronic value can be purchased and held on the device until reduced through purchase or transfer.

Home Banking - This term is used for a variety of related methods whereby a payer uses an electronic device in the home or workplace to initiate payment to a payee. In addition to computer technology, it can be performed using the telephone and IVR2. (Chorafas 1988) “PC- Banking is a service which allows the bank’s customers to access information about their accounts via a proprietary network, usually with the help of proprietary software installed on their personal computer”. (Abor, 2004) It is used to perform a variety of retail banking tasks, and offers the customer 24-hours services.

Mobile Banking - This is a product that offers Customers of a Bank to access services as you go. Customer can make their transactions anywhere such as account balance, transaction enquiries, stop checks, and other customer’s service instructions, Balance Inquiry, Account Verification, Bill Payment, Electronic fund transfer, Account Balances, updates and history, Customer service via mobile, Transfer between accounts etc.

Payment System – A financial system that establishes that means for transferring money between suppliers and of fund, usually by exchanging debits or Credits between financial institutions.

Smart Cards - A smart card is a plastic card with a computer chip inserted into it and that store and transacts data between users. The data, in a form of value or information is stored in the card’s chip, either a memory or microprocessor. “Smart card-enhanced systems are in use today throughout several key applications, including healthcare, banking, entertainment and transportation.”

Telephone Banking - Under this mechanism, the customer transacts business by dialing a touch-tone telephone connected to an automated system of the bank. Telephone banking or telebanking is a form of virtual banking that deliver financial services through telecommunication devices. This is normally done through Automated Voice Response (AVR) technology”. (Balachandher et al, 2001).












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