Assessment Of Risk Awareness Of Mobile Banking Users In Nigeria

Project and Seminar Topics with material for Banking and Finance

Assessment Of Risk Awareness Of Mobile Banking Users In Nigeria


Internet is an important and valuable tool for many successful businesses in this 21st century thereby keeping a huge amount of information at ones’ fingertips, the introduction of Internet banking system has classically replaced most of our previous banking system. Internet banking also called online banking has helped in production growth, quick access to ones’ account, smooth and easy transactions of goods and services. Since the introduction of online banking to Nigeria, the banking sector has experienced huge development in their mode of operations and services. However, online banking system is facing some problems in financial information security. Financial information security threats are these problems which mostly affects online banking users who input their confidential financial details online. Therefore, to prevent them from been a victim of security threat (information breach), there must be proper awareness about financial information security which will help in protecting online banking users from any form of attack. In order to provide sound awareness about financial information security, a survey is carried out using questionnaires and interview to assess online banking users about their level of awareness in financial information security. From the analysis of the survey it was observed that most online banking users in Nigeria are still not aware of various attacks associated with online banking, which means the existing method of awareness are feeble

Chapter One


1.1 Background of the Study

Mobile phones have become a tool for everyday use. They have created an opportunity for evolution of banking services to reach the previously unbanked population. Use of mobile banking has made basic financial services highly accessible to low-income people because it caters for challenges of time and distance to the nearest retail bank branches (CGAP, 2006).

Mobile banking (m-banking) is an internet-based service, which enables customers to access bank accounts through mobile devices and conduct as well as complete bank-related transactions such as checking account status, transferring money and selling stocks, to mention a few (Kim, Shin and Lee, 2009). Luo Li, Zhang and Shim (2010) defined mobile banking as an innovative method for accessing banking services via a channel whereby the customer interacts with a bank using a mobile device. Mobile banking services provide ability to perform banking transactions online on portable mobile devices via the Short Messaging Service (SMS) or Wireless Application Protocol (WAP). Such provision of financial services through ICT was made possible even in low-income countries. The roll-out of mobile telephone has been rapid and has extended access well beyond already connected customers in developing countries. It has resulted in a positive social impact on poor people and communities (Porteous and Neville, 2006). Furthermore, mobile banking is a powerful way of delivering savings services to a billion people, worldwide, who have a cell phone but no bank account (Lee, Lee and Kim, 2007). It breaks down geographical constraints and also tends to offer immediacy, security and efficiency (Ondienge, 2010).

Mobile banking otherwise known as M-banking refers to the provision of banking and all forms of financial services with the help of mobile telecommunication devices such as the smart phones, androids, etc. With the continued growth of the smart phone markets, the use of digital applications to access mobile financial information is gaining popularity. There is a general consensus that the mobile devices are the most promising way to reach the masses and to create a tie-in among current customers, due to their ability to provide services anytime and anywhere; moreover, these devices have high rate of penetration and potential to grow even among the less educated. Agwu (2012) stressed that the mobile phones remain the only and most available feasible means to provide mass marketing and could serve as alternative to branch banking in Nigeria. The author further stressed that the internet has only a penetration rate of 6 percent in a population of 140 million in Nigeria but mobile technology is close to 50 percent penetration with prospects for growth. Pikkarainen et al., (2004) noted that technological development has provided opportunities for service providers to develop their services and offer customers more flexibility.

Lichtenstein and Williamson (2006) also noted that banks have launched multiple service access methods through new delivery channels like ATM, internet and mobile phones. Despite these advantages and the conveniences, the use of mobile banking services is much lower than expected in both the developed and developing economies. Agwu, (2012) stated that mobile phones and its applications are still highly under-utilized. Akturan and Tezcan (2012) stressed that the market of mobile banking still remains very small when compared to other electronic banking counterparts such as ATM; internet banking, etc. Furthermore, Iddris (2012) noted that the widespread adoption and large usage of mobile telephones did not reflect on the adoption and usage of mobile banking. However, the banks in Nigeria are racing to use this latest technology to reduce their operational costs and increase customer base (Agwu (2012). Puschel, et al., (2010) also stressed that adoption and usage of mobile banking will largely depend upon customers‟ perception of its ease of use and usefulness. However, the understanding of the underlining problems of the reasons for the low rate of mobile banking usage non preference of mobile banking services to other electronic banking applications could assist financial managers to find ways to adjust their marketing techniques and come up with the right solution to improve their mobile banking service as well as to increase the rate of mobile banking usage.

Sathye, 1999; Polatoglu and Ekin, (2001) has an impact on customer’s adoption of m-Banking. Sathye (1999) emphasized that many customers were simply unaware of internet Banking and its unique benefits. Here knowledge denotes to the customers‟ awareness of m-Banking and the benefits associated with it, and their awareness of how to perform baking transaction through m-Banking. Sathye (1999) observed that the lack of awareness about Mobile Banking and its benefits contribute to the non-adoption of Mobile Banking. Additionally, Polatoglu and Ekin (2001) indicated that the more knowledge and skills a customer possessed about Mobile Banking, the easier it was for the customer to utilize Mobile Banking. It is essential that the banks offering M-BANKING services should make the customers aware about the availability of various services and their benefits and educate them about security & privacy and risk involved in M-BANKING transaction.

Alot of progress has been made in electronic banking and financial services in developing economies. Most individuals in the cities of developing countries have relatively easy access to open bank accounts. It has become the norm for banks to provide several channels of banking services outside the banking hall such as ATM, online and mobile banking services. This enables account holders with access to such channels to use services such as paying bills, transfer money and pay for goods and services online. Despite this progress, there is a large population in developing countries without bank accounts otherwise referred to as the unbanked. Nevertheless, high penetration of mobile phones in developing countries has provided a means through which banks and other financial services can reach out to the unbanked. For instance, 89% of the people surveyed in Nigeria by the Pew research centre have either smart phones or cell phones (Pew Research Center 2015). On the other hand, 64% of Nigerians do not have access to financial services (CBN 2013). The proliferation of mobile phones in Nigeria presents a channel through which to increase access to digital financial services. Therefore, this study focuses on the assessment of risk awareness of mobile banking users in Nigeria.

1.2 Statement of the Problem

Customer awareness of M-BANKING has been considered significant to influence customers‟ attitude with respect to perceived ease of use, perceived usefulness, perceived security & privacy issues and the perceived risk. The study is expected to examine whether there is any significant relationship between the degree of awareness, perceived ease of use, perceived usefulness, perceived security& privacy, perceived risk and customers‟ attitude towards M-Banking.

During online transactions, confidential matters move from senders to the receivers, eavesdroppers might be somewhere listening to their communications, whereby breaches of privacy and access to confidential information may occur without users’ consent, some users may not be aware of the vulnerability due to inexperience or the threat is new to them so they might not know how to prevent it. Therefore, the need for up-to-date security measures is an important system that should be put into cognizant for self-protection by government, businesses and individuals. These problems necessitates the need to carry out a study on the assessment of risk awareness of mobile banking users in Nigeria.

1.3 Objectives of the Study

The general objective of this study is to examine the assessment of risk awareness of mobile banking users in Nigeria, a case study of Ota Local government in Ogun State. The specific objectives of this study include the following:

  1. To ascertain people’s awareness on mobile banking in Ota Local government in Ogun State.
  2. To find out the factors influencing the adoption of mobile banking in Ota Local government in Ogun State.
  3. To determine the awareness of people on the risk and benefits of mobile banking in Ota Local government in Ogun State.
  4. To examine the influence of cyber-crime on the risk awareness of mobile banking users in Ota Local government in Ogun State.
  5. To give suggestions on how to increase the risk awareness of mobile banking users in Ota Local government in Ogun State.

1.4 Research Questions

The relevant research questions related to this study include the following:

  1. What are people’s awareness on mobile banking in Ota Local government in Ogun State?
  2. What are the factors influencing the adoption of mobile banking in Ota Local government in Ogun State.
  3. What is the awareness of people on the risk and benefits of mobile banking in Ota Local government in Ogun State.?
  4. What is the influence of cyber-crime on the risk awareness of mobile banking users in Ota Local government in Ogun State?

1.5 Significance of the Study

Literature on electronic banking is scarce in developing countries such as Nigeria are scarce if not non-existing. This study, therefore, shall contribute to knowledge and serve as source of reference in the academia. For this future researcher can read the methodology as well as the findings of this study.

Closely related to the above stated point is the fact that various banks that offer electronic banking can tap on the findings of this study and determine how they can improve on electronic banking service delivery. This is especially so for the three individual banks being studied. They will benefit immensely on the finding of the study. They as well shall be informed by the strength and the weaknesses of the service they are providing. One major benefit to them shall come from the recommendations of the study. These recommendations if implemented by them will help them to grow their businesses. Finally, having studied electronic banking in class, the study would afford the researcher an opportunity to learn at firsthand what happens at the work environment and thus, bridge the gap between theory and practice.

1.6 Scope of the Study

The scope of the study concentrates on two major areas. This comprises of the contextual and geographical scope of the study. Contextually, the research will emphasize on electronic banking focusing its potential effect on customer service delivery. There are numerous and emerging types of electronic banking such as Automated teller machine (ATM), internet banking, mobile phone banking, debit cards, E-switch telephone banking, SMS banking, home banking, and network banking just to mention a few. However, four of the numerous electronic banking has been randomly selected because of numerous electronic banking services in Nigeria. In doing this all the existing electronic banking services were identified and out of which those available in Nigeria were selected from which four of them were randomly selected by making a survey to know which ones were available to the banks chosen for the research. After the survey SMS service, ATM services, mobile banking and internet banking were selected. There are a lot of banks that offer electronic banking to its customers in Nigeria; hence the study will be limited to some chosen banks.

1.7 Limitations of the Study

According to best and Khan (1989) „limitations are those conditions beyond the control of the researcher that will place restrictions on the conclusions of the study and their application to other situations. This study is, therefore, constraint by the wide area the study is supposed to have captured, shorter period for the completion of the study, inadequate funds for this study and bureaucratic rules in the study settings.

Chapter Five

Conclusions and Recommendation

5.1 Conclusion

This research has analysed the level of information security awareness of online banking users in Nigeria using questionnaires and interviews. The responses of the respondents helped the study to propose new methods of improving information security awareness. This research work focused on the way or method in which information security awareness can improved, and to reduce or eradicate the cases of financial information breach, using the new proposed methods of spreading information security.

Finally, the result of our survey presented above shows that existing methods of creating information security awareness is not yielding good results. Therefore there is need for our banks to intensify effort on information security awareness creation for their customers so that their existing customers will not be discouraged by attack from attackers and the new customers who are yet to adopt online banking will be encouraged too. It is in line with the need for the banks to intensify their effort that we have proposed new methods in which information security awareness creation can be improved.

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