IMPACT OF ELECTRONIC BANKING IN THE NIGERIAN ECONOMY
ABSTRACT
    The aim of this paper work is to examine the impact of electronic banking in the development of the Nigerian economy and how different channels could enhance the delivery of consumers and retail products.
    The Ordinary Least Squared (OLS) estimation technique is employed in estimating the relationship among the specified variables and across the period, the t-statistics shows that the current evaluation of electronic banking (CEEB) is individually significant in determining the impact of electronic banking in Nigeria. The relationships among the specified variables and across the period of the findings
were made, a negative relationship exists between the OPEB and cashless policy and electronic banking as it affects money laundering in Nigeria.
    Appropriate authorities are expected to closely regulate and monitor the operations of banks in the country so as to ensure rapid economic growth and development.   
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
1.1    Background to Study                        
1.2    Statement of the Research Problem                
1.3    Objective of the Study                        
1.4    Research Hypotheses                         
1.5    Scope of the Study                        
1.6    Significance of the Study                    
1.7    Limitation of the Study                        
CHAPTER TWO: LITERATURE REVIEW
2.1    Introduction                             
2.2    The view of Electronic Banking                 
2.3    Electronic Banking and the Common Banking
Products                                
2.3.1    Telephone and PC Banking Products            
2.3.2    The Card System                            
2.3.3    The Automated Teller Machine (ATM)            
2.3.4    Cheque                                 
2.4    The Entry of Nigerian Bank into Electronic Banking                                 
2.5    Threats of cyber-crimes on the Nigerian
Banking Premises                         
2.5.1    The Regulatory Challenges                 
2.5.2    Electronic Banking Profitability and Efficiency
2.5.3 Bank Customer Relationship                
2.6    Operation of financial institution                  
 CHAPTER THREE: METHODOLOGY
3.1     Introduction                             
3.2    Description of the Population of the Study        
3.3     Sampling Techniques                         
3.4     Sample Size                             
3.5    Source of Data                             
3.6    Method of Data Analysis                         
CHAPTER FOUR: DATA PRESENTSTION AND ANALYSIS
4.1     Introduction                            
CHAPTER FIVE: SUMMARY OF FINGINGS, RECOMMENDATION AND CONCLUSION
5.1     Summary of Findings                        
5.2    Recommendations                        
5.3     Conclusion                                
    Bibliography                             
    Appendix                                 
CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND OF THE STUDY
Before the emergence of modern banking system, banking operation was usually done which lead to a slowdown in settlement of transactions. This manual system involves posting transactions from one ledge to another with human hands. 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 banks then used only one computer in carrying out transactions which helped to ameliorate the sluggish nature of banking transaction.
According to David (2012), Nigeria did not embrace electronic banking early when compared to developed countries. Nigeria adopted electronic banking system in the early 2000’s. During the introduction of electronic banking system, the use of raw cash was said to have breed corruption through the cash carry syndrome” usually linked with the swift movement of “Ghana-must go” bags by some politicians. Since electronic banking started in all Nigerian  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 electronically transfer salaries into their account have failed (Ibrahim, 2009).
The banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and Communication Technology (ICT) is at the centre of this global change curve of Electronic banking system in Nigeria today. (Stevens 2002). Assert that they have over the time, been using electronic and telecommunication networks for delivering a wide range of value added products and services, managers in banking industry in Nigeria cannot ignore information systems because they play a critical impact in current banking system, they point out that the entire cash flow of most fortune banks are linked to information system the application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all banks and indeed a prerequisite for local and global competitiveness in banking.
The advancement in technology has played an important role in improving service delivery in the banking industry: In its simplest form, Automated Teller Machines (ATM’s) and deposit machines now allow consumers carry out banking, transaction beyond banking hours. With online banking, individuals can check their account balances and make payments without having to go to the bank hall. This is gradually creating a cashless society where consumers no longer have a pay for all their purchases with hard cash. For example, bank customers can pay for airline tickets and subscribe to initial public offerings by transferring the money directly from their accounts, or pay for various goods and services by electronic transfers of credit to the sellers account. As most people now own mobile phones, banks have also introduced mobile banking to cater for customers who are always on the move. Mobile banking allows individuals to check their account balances and make fund transfers using their mobile phones. This was popularized by first Atlantic Bank (now first Inland Bank) through its “flesh me cash” product customers can also recharge their mobile phone via SMS. E-Banking has made banking transaction easier around the world and it is fast gaining acceptance in Nigeria. The delivery channels today in Nigeria electronic Banking are quite numerous as it is mentioned here Automatic Teller  Machine (ATM), pointed of sales (POS) Telephone Banking, Smart Cards, Internet Banking etc. personal  computers in the Banking Industry was first introduced into Nigeria by society General Bank as the popular PC easy access to the Internet and world wide web (www) and internet is increasing products formulated or used by banks as a channel of delivering the products and services to the numerous customers. Virtually almost all Banks in Nigeria have a web presence, this form of banking is referred to as internet Banking which is generally part of Electronic Banking.
Electronic Banking has experienced explosive growth and has transformed traditional practices in banking (Gonzalez, 2008). As per prediction of Maholtra and Singh, (2007), the e-banking is leading to a paradigm shift in marketing practices resulting in high performance in the banking industry. Delivery of service in banking can be provided efficiently only when the background operations are efficient. An efficient background operations can be conducted only when it is integrated by an electronic system. The components like data, hardware, software, network and people are the essential elements of the system. Banking customers get satisfied with the system when it provides them maximum convenience and comfort, while transaction with the bank. Internet enable electronic system facilitates the operation to fetch these results.
E-banking is the term used for new age banking system. E-banking is also called online banking and it is an outgrowth of PC banking. E-banking uses the internet as the delivery channel by which to conduct banking activity. For example transferring funds, paying bills, viewing checking and savings account balances paying mortgages and purchasing financial instruments and certificates of deposits. (Mohammed, et al 2009). It is difficult to infer whether the internet tool has been applied for convenience of bankers or for the customer (convenience. But ultimately it contributes in increasing the efficiency of the banking operation as well providing more convenience to customers). Without even interacting with the bankers, customers transcat from one corner of the country to another corner.
Encyclopaedia Britannica (2010) defined e-banking as the use of computers and telecommunication to enable banking transactions to be done by telephone or computer rather than through human interaction. Some e-banking services offered banks include: electronic funds transfer for retail purchases, automatic teller machines (ATM’s), short messaging services (sms) banking and automatic payroll deposits and bill payments. Others include: home banking, whereby a parson with a personal computer can make transaction, either via a direct connection or by accessing a website. Electronic banking has vastly reduced the physical transfer of paper money and coinage from one place to another or even from one person to another. From banks perspective, technology, including e-banking is vital in six areas, augmenting profit pool, operational efficiency, customer management, distribution and reach, product innovation and efficient payment and settlement. (Kamakodi et al, 2008).
1.2    STATEMENT OF RESEARCH PROBLEM
    Due to emergency of global economy, e-banking has increasingly become a necessary component of banking strategy and a strong catalyst for economy development. In spite of the enormous advantages of online banking its volume of usage by the Nigerian banking public is still low. In Nigeria, customers of banks are no longer concern about safety of their funds and increase return on their investments. Customers demand efficient, fest and convenient services. Customers want a bank that will offer them services that will meet their particular needs (personal banking) and support their business goals. For instance, businessman wants to travel and transact business without carrying cash about for security reasons. They want to be able to check their balance online, find out if a cheque is cleared, transfer funds and even want to download translation records into their own computer at work or home. All these are only achievable through electronic banking. E-banking services covered in this study include: Mobile sms banking, online funds transfers, loan applications via the internet, online banking statements and electronic bill presentation and payments and Automated Teller Machines (ATM) cards. In line with rendering quality and acceptable services that most banks in Nigeria are gearing toward and investing large sum of money in information and communication technology, expectedly such bank services have been improved. This paper work seeks the challenge involved in electronic banking and best industrial practice and the approach of implementing them in Nigeria Banking System.
1.3    OBJECTIVES OF THE STUDY
    The aim of this paper work is the examine the impact of electronic banking in the development of the Nigerian economy and how different channels could enhance the delivery of consumers and retail products.
    Specifically the objectives of the study include;
1.    The evaluate the impact of electronic banking in the Nigerian economy.
2.    To examine whether electronic banking has improve the fortune of Nigerian Banks
3.    To examine the effects of electronic banking on the consumers.
4.    To examine whether the electronic banking guideline comply with the CBN electronic banking guideline policy.
1.4    RESEARCH HYPOTHESIS
    The following hypothesis are formulated to guide the study;
1.    Electronic banking significant impact in the Nigerian economy.
2.    The fortunes of Nigerian banks are improved by electronic banking
3.    Bank – customer relationship is improved through electronic banking.
4.    The electronic banking guideline complies with the CBN electronic banking guideline.
1.5    SCOPE OF THE STUDY
    The study will focus on electronic banking. In order to conduct an empirical investigation into the impact of electronic banking in Nigeria’s economy. We will examine the nature of E-banking in Nigerian banking system from 2007 to 2012. Also questionnaires will randomly be administered to customers from diverse employment backgrounds and students who benefits from E-banking will also be involved within (Benin City).
1.6    SIGNIFICANCE OF THE STUDY
    The study will explore the major factors responsible for e-banking in Nigeria based on respondents perception on various internet application, participants perception about e-banking and whether the user and non-user perception defers.
    It will also provide answer to facts militating against the implementation of e-banking in the policy of Nigerian banks and also be invaluable tool for students. Academician, institutions, corporate managers and individuals that want to know more about electronic banking trends in Nigeria.         
1.7    LIMITATION OF THE STUDY
    In view of the technicalities involved, it would be unrealistic to assure that all necessary facts have been  gathered in the process of the study. Information gathered is limited to those accesses and made available by the respondents and also those gathered from end users. However, the impacts of this  limitation will be reduced to the barest minimum