AN APPRAISAL OF THE IMPLICATION OF ELECTRONIC BANKING IN NIGERIA BANKS
CHAPTER ONE
INTRODUCTION
THE STUDY’S BACKGROUND
Prior to the advent of the modern banking system, banking operations were performed manually, which slowed transaction settlement. This manual system entails manually posting transactions from one ledger to another.
Figures or money counting that should have been done by computers or electronic machines were computed and counted manually, which was not 100 percent accurate, resulting in human errors. Most banks then use only one computer to process transactions, which reduces the sluggishness of banking transactions.
In comparison to developed countries, Nigeria has been slow to adopt electronic banking. In the early 2000s, Nigeria implemented an electronic banking system. During the implementation of electronic banking systems, the use of raw cash was said to have bred corruption through the “cash and carry syndrome,” which some politicians associated with the rapid movement of Ghana-must-go” bags. According to some analysts, such bags are a major source of corruption because dubious individuals seek to bribe their way out of being checked in some sensitive areas or places in a corrupt society.
Checks show that some staff in establishments such as the national boundary commission, for example, are yet to receive their salaries for the previous months as efforts to electronically transfer salaries into their accounts have failed, according to Ibrahim (2015).
“One bank will tell you that it has transferred your salaries, but the ostensible recipient bank will tell you that it has not received anything, leaving you even more perplexed,” says John, I. (2015). While acknowledging the system’s initial hiccups, Olekah (2015) advises stakeholders not to be discouraged because such “teething problems” are normal.
According to James (2015), a banker, in the Vanguard annual report, “we should not destroy electronic-banking by focusing on the negative aspects; instead, we must strive to perfect it.” Mathew S. (2015), a worker, says in his report to the Vanguard annual report on banks and cards that the government should have done its homework “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.” It’s a good idea to understand what e-banking is all about at this point.
M. Anyawaokoro claims that (2015). The application of computer technology to banking, particularly the payment (deposit transfer) aspects of banking, is defined as electronic banking. He also defined electronic banking as a banking system with an electronic communication network that allows for same-day credit and debit transfers of funds between member institutions of a clearing system.
According to Clive, W. (2017) in his Academic dictionary of banking, electronic banking is defined as a type of banking in which funds are transferred between financial institutions through the exchange of electronic signals rather than the exchange of cash, cheques, or other negotiable instruments.
According to Omotayo, G. (2015), electronic banking is a system in which funds are transferred between accounts using computerized on-line/real-time systems rather than written cheques. According to Edit, O. (2014) in the International Journal of Investment and Finance, electronic banking is defined as a system in which transactions are settled electronically using electronic gadgets such as ATMs, POS terminals, GSM phones, and V-cards, among others, handled by e-holders, bank customers, and stake holders.
1.2 PROBLEMS STATEMENT
As previously stated, there is a delay in the payment of cheques, which leads to the adoption of an electronic banking system. Adoption of electronic banking, which was supposed to make banking transactions easier, instead caused problems for customers. Most people complain about wasting time in banks.
This happens when there is a power outage in a bank, causing the operation to slow down. Another issue that has emerged is that banks do not have backup information to fall back on in the event of a computer failure.
In order to invest in electronic banking, the country will need a large amount of financial resources in computer technology, which is obviously in short supply in Nigeria due to the high level of poverty. The availability of infrastructure facilities such as electricity and telecommunication networks is required for the efficient operation of electronic payment systems; however, power supply fluctuates and there are still constant failure links in networks.
Banks have been developing and introducing payment cards for their customers, as well as deploying ATM cards, since the early 2000s. However, usage was low due to a lack of interconnectivity, i.e. a switching platform to connect the ATMs for card holders.
1.3 THE STUDY’S OBJECTIVES
The purpose of this research is to assess the extent of electronic payment in banking activities and to identify the various types of electronic banking.
The researcher will also assess the major issues associated with the development of Nigeria’s electronic banking system, as well as potential solutions to these issues.
The impact of electronic banking on bank profitability will also be evaluated. There are various types of electronic banking used in Nigerian banks; the researcher wishes to assess the impact of these e-payment systems on the banking industry as well as the impact of electronic banking on the Nigerian economy.
1.4 QUESTIONS FOR RESEARCH
The following questions were designed to elicit information from respondents:
What are the various types of electronic payments, and how prevalent are they in banking activities?
How far can e-banking improve or improve banking services?
What are the major issues associated with the development of Nigeria’s electronic banking system?
What are the solutions to the issues that have arisen as a result of the development of e-banking?
What impact has e-payment had on banking activities?
In the following chapter, the research will attempt to find answers to these questions.
1.5 THE STUDY’S IMPORTANCE
Electronic banking is a welcome development in our economy today, and its societal impacts are enormous, so this research is significant in many ways. It will reveal the advantages and disadvantages of electronic banking. It will encourage banks and other economic agents to automate their operations. Knowledge of electronic banking will be expanded. It not only adds to our understanding of electronic banking, but it also serves as a reference for future research in this field.
1.6 STUDY OBJECTIVES
This study looks at the economic implications of electronic banking in Nigerian banks, as well as the various payment and electronic systems used by banks. The researcher will base this work on all deposit money banks in Nigeria, but specifically on Diamond Bank.
1.7 STUDY LIMITATIONS
Time is an important factor for the researcher because this type of research requires a significant amount of time for data collection, but it was not allotted to carry out the research, distribution, collection, and analysis of questionnaires. Furthermore, the school system has made it difficult for students to go out in search of information by not granting them leave. Some banks kept information from students who wanted it in order to keep the bank’s secrecy, making it difficult for students to gather information for their research. Finally, while finance was the most limited factor, the researcher had to travel to the sampled organization to interview some of the managers and supervisors.
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AN APPRAISAL OF THE IMPLICATION OF ELECTRONIC BANKING IN NIGERIA BANKS
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