ROLE OF ELECTRONIC BANKING IN DEVELOPMENT OF BANKING INDUSTRIES IN NIGERIA
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ROLE OF ELECTRONIC BANKING IN DEVELOPMENT OF BANKING INDUSTRIES IN NIGERIA
ABSTRACT
This paper examines the role of electronic banking in the development of the banking industry in Nigeria. The study investigates the impact of electronic banking on many aspects of the banking sector, including customer satisfaction, operational efficiency, financial inclusion, and overall industry growth.
Through a comprehensive review of existing literature and analysis of relevant data, the study highlights the significant contributions of electronic banking in transforming traditional banking practises and fostering the advancement of the Nigerian banking industry.
The findings underscore the importance of embracing electronic banking technologies as a means to enhance competitiveness, improve service delivery, and promote financial inclusion in the Nigerian banking sector.
The study
The main objective of this project, titled “The Role of Electronic Banking in the Development of Banking Industries in Nigeria,” is being approached with utmost seriousness. This project recognises electronic banking as a mechanism that enables the provision of banking services to a wider population segment at a reduced cost.
Furthermore, it fosters the promotion of advancements and rivalries through the provision of diverse and sophisticated products and equipment. These offerings are specifically designed to ensure utmost satisfaction for customers. Banks that fail to keep pace with the innovative environment will consequently lose their customers to more innovative and customer-centric banks.
Moreover, electronic banking facilitates transactions by providing consumers with the ability to conduct financial transactions on the bank’s website through a designated “transaction website.”
Additionally, it enables organisations to expand their consumer base beyond their local vicinity, with little barriers to entry into overseas markets.
Chapter One: The Significance of Electronic Banking in the Advancement of Banking Industries in Nigeria Introduction
1.1 Background of the Research
The introduction of financial innovations, such as smart cards, credit cards, electronic transfers in the payment system, and the recent launch of internet banking, have significantly reshaped the global landscape, connecting many regions through electronic impulses.
The introduction of electronic money in Nigeria occurred in 1990, following the approval granted by the Central Bank of Nigeria (CBN). The financial institution known as All State Trust Bank Limited provides a financial instrument referred to as a smart card. Following that, Diamond Bank engages in card playing activities.
The smart card scheme had a significant boost in February 1998, when a consortium of a licenced bank established a smart card firm in Nigeria called Smart Card Nigeria Plc.
This company was tasked with the responsibility of producing and managing cards issued by the member banks of the consortium. In the year 2000, a consortium including over 20 banks, operating under the aegis of Gen Card, commenced its operations.
These emerging inventions are now in their nascent stage of development and have the potential to disrupt the prevailing reliance on cash for conducting low-value transactions. They aim to enhance convenience and reduce costs for both customers and merchants who possess active accounts.
Nevertheless, the authors also highlighted some policy concerns about the potential impact on monetary policy and consumer systems of Central Banks.
In response to the potential impact of technology development in the domestic financial industry, the Central Bank of Nigeria initiated a commissioned study on information technology strategy in 1991.
The primary aim of this study was to enhance the effectiveness and efficiency of the Central Bank’s statutory tasks. The implementation of the product is being carried out in phases,
and both the licenced banks and the regulatory authorities have expressed their recognition of the advantages that may be obtained through the application and utilisation of information technology.
Given the aforementioned circumstances, the Central Bank Governors of the G-10 countries have initiated a series of studies pertaining to distinct matters concerning electronic banking in Nigeria.
Hence, the primary aims of this study are to investigate the function of electronic banking in Nigeria, with a specific focus on Guaranty Trust Bank (GTB) Plc located on Ogui Road in Enugu, serving as the case study.
1.2 STATEMENT OF THE PROBLEM
One of the primary challenges encountered by electronic banking in Nigeria pertains to the insufficiency of information and communication technological awareness campaigns concerning this mode of banking. In Nigeria, the internet communication is characterised by insecurity and frequent congestion.
Financial institutions in the country have additional obstacles related to internet connectivity, such as security vulnerabilities, issues with service quality, and the use of abbreviations in electronic financial transactions (Guardian newspaper, 2001). In addition to the prevailing business climate, electronic banking in Nigeria has other operational obstacles.
These challenges encompass inconsistent power supply, a prevailing reliance on cash transactions within the economy, and a limited degree of awareness among the Nigerian population (Agbada, 2008).
The primary focus of this research endeavour will be to analyse the trajectory of electronic banking in Nigeria, while also doing a thorough assessment of the associated challenges.
In my personal assessment, the following issues are identified as challenges encountered by electronic banking in Nigeria.
Before the banks began introducing E-banking products in Nigeria, there was a lack of sufficient public education regarding their usage.
a. The service provided by the providers was of substandard quality.
Many individuals exhibit a strong aversion towards utilising electronic products, instead favouring cash transactions. It is understandable that they hold this preference, given the aforementioned reason number two.
In the event that funds become immobilised within an automated teller machine (ATM), individuals are solely responsible for resolving the issue.
Many banks are unable to deliver on their promises regarding the services they claim to give in terms of electronic banking.
1.3 Objectives of the Research
The primary aim of this study is to evaluate the impact of electronic banking (E-banking) on the growth and advancement of the banking sector in Nigeria. The study has identified the following specific objectives.
The objective of this study is to assess the impact of limited awareness and understanding of information and communication technology (ICT) on the progress of electronic banking in Nigeria.
2. This study aims to evaluate the impact of inactive regulatory authorities on the hinderance of necessary logistical technical support.
The objective of this study is to determine the degree to which the inadequate availability of competent personnel hinders the progress of electronic banking in Nigeria.
The objective of this study is to examine the impact of insufficient financial support from the government and its affiliated institutions on the progress of electronic banking in Nigeria.
1.4 Research Questions
The present study has defined the following research questions.
To what degree does a lack of awareness regarding information and communication technology impede the progress of electronic banking in Nigeria?
How can regulatory organisations that are not actively engaged in their duties hinder the provision of necessary logistics and technical support?
To what extent does the inadequate availability of competent human resources hinder the progress of electronic banking in Nigeria?
The impact of insufficient financial support from governmental bodies and agencies on the advancement of electronic banking in Nigeria is a topic of inquiry.
1.5 Research Hypothesis
To ensure the proper and successful execution of this study, the following hypotheses will be empirically examined:
Hypothesis: The insufficiency of information and communication technology has a detrimental impact on the progress of electronic banking in Nigeria.
Greetings, Insufficient information and communication technology infrastructure does not impede the progress of electronic banking in Nigeria.
Hypothesis: The lack of active regulatory organisations hinders the provision of necessary logistics.
Greetings, The lack of regulatory authorities that are not actively engaged in their functions does not impede the provision of essential logistics.
Hypothesis: The lack of an adequate number of competent personnel hinders the progress of electronic banking in Nigeria.
Greetings, The absence of an adequate number of competent personnel does not impede the progress of electronic banking in Nigeria.
1.7 SIGNIFICANCE OF THE RESEARCH
This study holds significance as it aims to provide insights to operators within the banking industry, as well as other relevant individuals and organisations, regarding the implementation of electronic banking.
This study aims to identify the challenges encountered by electronic banking in the Nigerian corporate environment and propose potential strategies to address them.
1.8 Conceptual Clarification
The teller explains that the document in question is a significant piece of paper utilised within the banking sector for both depositing and withdrawing funds.
A loan refers to a financial arrangement in which an organisation or corporation borrows money from a bank in order to supplement its capital and cash reserves. Capital expenditures can be supported by both short-term and long-term financial resources.
3. Guarantors are individuals who assume responsibility on behalf of another person while creating accounts, applying for loans, and utilising other services provided by banks. The guarantor assumes the risk of repaying any outstanding debts in the event of a default.
Electronic banking refers to the use of electronic systems and technologies for conducting financial transactions, such as accessing accounts, transferring funds, and making payments, using digital platforms.
The primary focus of this study revolves around the banking industry, which has become increasingly captivating. Electronic banking, as a progressive measure, aims to provide services through electronic means in order to provide speedier service delivery to customers.
Automated Teller Machines (ATMs) are tangible assets employed by financial institutions, designed and constructed with the primary purpose of dispensing cash, facilitating mobile phone recharges, enabling fund transfers, and so forth. These machines represent a prevailing trend within the banking sector.
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