An Appraisal Of The Implication Of Electronic Banking Nigeria Banks (A Case Study Of Access Bank)
Electronic banking have long been recognized to play an important role in economic development on the basis of their ability to create liquidity in the economy through financial intermediation between savers and borrowers. It also offers financial services and products that accelerate settlement of transactions and in the process reduce cash intensity in the financial system, encourage banking culture, and catalyses economic growth. The central focus of this research is to examine how the economy will be affected positively on the implementation of electronic banking. This work will be discussed based on five chapters, chapter one will focus on the background of the study objectives of the study, significance, the scope of study and limitation of study. Chapter two will consider the review of other scholars and authors on the subject matter, and other conceptual issues in foreign exchange. Chapter three will focus on the research method and data collection, while presentation and analysis of data will be under chapter four. Chapter five will contain the summary, conclusion and recommendation. Based on the objective of the study the findings reveal that the role of economy will be improved if electronic banking is implemented.
1.1 Background to the Study
Electronic banking in Nigeria has overtime been viewed by many especially economists as having a lot of implications on the economy of Nigeria and especially the banking sector. Electronic banking has been playing a major role in the economy of Nigeria. This research promises to appraise the implication of electronic banking in Nigerian banks since it has been seen as being a major player in the economy.
Electronic banking have long been recognized to play an important role in economic development on the basis of their ability to create liquidity in the economy through financial intermediation between savers and borrowers. It also offers financial services and products that accelerate settlement of transactions and in the process reduce cash intensity in the financial system, encourage banking culture, and catalyses economic growth.
However, for the effective functioning of the financial system, the payment systems must be safe and efficient; otherwise they can be a channel for the transmission of disturbances from one part of the economy or financial system to others. This is why central bank have been active in promoting sound and efficient payments system and in seeking the means to reduce risks associated with the system.
Nigeria historically operated a cash-driven economy particularly in the consumer sector, however the system has witnessed improvements over the years, and particular in recent times has moved from its rudimentary level of the early years of banking business to the current state of sophistication comparable to other economies at the same level of development.
One important reason for financial liberalization and deregulation is the need to develop a good payment system which promotes an appropriate mechanism for efficiency in mobilizing and allocating financial resources in the economy. The payment system occupies an important place in the development of a country economy, infact the level of development of a countries payment system is a reflection of the state or condition of the countries economy.
It is a fact that today a good number of banks cannot use their IT (information technology) infrastructure to adequately deal with their immediate information requirements. Do such banks qualify to be called e-banks?
E-banking is about using the infrastructure of the digital age to create opportunities both local and global. E-banking enables the dramatic covering of transaction cost and the creation of new types of banking opportunities that address the barriers of time and distance. Banking opportunities are local global and immediate in E-banking
The benefit of electronic banking comprises a broad range of functions which includes;
Electronic mail (email) improves communication between individuals, external Â parties and between banks. The availability of online information provides bankers and customers with a powerful vehicle for research, banks can provide information and services on line,Â which customer can pay for and receive. Banking processes are made more efficient and cost effective by integrating other aspects of banking operations such as treasure management and financial control.
If banking functions does not require physical interaction it may drive the benefits of electronic banking.
1.2 Statement of Problems
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 inter-connectivity i.e. switching platform to interconnect the ATM’s for card holders.
1.3 Objectives of the Study
This research work intends to assess the extent of electronic payment in banking activities as well as identify the various types of electronic banking. Specifically, it aim to examine:
- The extent of automation in the payment system
- The major problem associated with the development of electronic momentary transfer system (electronic banking) in the Nigeria economy.
- The effect of electronic banking system on bank’s profitability
- The impact of various electronic payment systems on banking industry
- The impact of electronic payment system on economic activities in Nigeria
1.4 Research Question
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?
1.5 Significance 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 electronic banking.
It will motivate banks and other economic agents to computerize their services.Knowledge in the area of electronic banking will be advanced.Apart from 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 Access Bank in particular.
1.7 Limitation of Study
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 in fact 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.
Summary, Recomendation and Conclusion
5.1 Summary of Finding
The introduction of electronic banking in Nigeria has a strong influence on the development of the payment system in particular and the banking system in general. However, the introduction of the system, involves commitment of huge amount of financial resources on computer technology and telecommunication facilities, computer technology is a primary requirement for the proper functioning of the electronic monetary transfer system (EMTS)/electronic banking.
The use of computer in payment system would not reduce the importance of branch banking in Nigeria or reduce customer’s confidence on the banking industry, from responses obtained from staff of the bank studied; the introduction of electronic banking has rather increased customers loyalty to banks in general.
The major problems hindering the effective operation of electronic banking in Nigeria are infrastructural deficiencies such as erratic power supply, lack of government support and high charge on payment terminals (POS, ATMS) e.t.c. These problems are only peculiar to Nigeria as it is known that in developed countries issues like power failure or failure links are not in existence.
However, the introduction of electronic Banking System has also contributed significantly to bank income by way of fee or changes gotten from these services.
Uninterrupted Power Supply
The government should endeavor to provide 24 hours uninterrupted power supply because without electricity these products cannot be boosted and effective, but in this country there is erratic power supply, therefore all banking industry should have a standby generator incase of power failure, in other to cover the deficiency of power failure.
In smooth functioning of the payment system the government have the major role to play, in aspect of financing the payment system which require a lot of capital to maintain and also in the aspect of creating awareness the government should endeavor to inform the public about the benefits derived on the payment system.
Provision of skilled manpower and computer Wizard in operation of the payment system
Skilled manpower and computer wizard should be employed by every Bank, in other to stop, prevent fraudulent personal and hackers from manipulating the Banks data and stealing money from the Banks accounts.
Provision and maintenance of public network, system such as telephone (Nitel) the availability of these basic infrastructures is fundamental to the efficient functioning of the payments system.
Failure to maintain these infrastructures implies that the banks must be ready to provide their own communication networks and operate electronic generating sets to ensure reliable power supply.
Collaboration among banks: Electronic payment system as a result of its huge financial involvement requires that banks must jointly set and manage a network system such as ATMs v-cards etc. collaboration helps to spread and reduce the initial costs of setting up the electronic Banking system.
The Nigeria system is as old as the banking industry; this dynamism is manifested by the nature and quality of payment products paraded in the system. These products range from common paper money, cheque, cash to electronic payment Products such as Automated teller machine (ATM), SMARTCARD telephone Banking, internet Banking etc with the introduction of these electronic payments products, it is expected that the volume and cost of processing cheque will be drastically reduced or eliminated.
The C.B.N other financial authorities and banks have a role to play in enhancing the system through effective banking and momentary policies, efficiency and stability are also ensured and promoted. Furthermore, to sustain the electronic payment system, certain strategic measures must be taken to reduce negative effects of the problems identified as obstacles to the smooth functioning of the system.
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