The Impact Of Internet Banking System In Nigeria Banking Environment

Project and Seminar Topics with material for Banking and Finance

The Impact Of Internet Banking System In Nigeria Banking Environment


This project work entitled “ Impact of Internet Banking System in Nigeria Banking Environment” with particular reference to Union Bank of Nigeria. The project is divided into five chapters.

The chapter one of the work covers areas such as the introduction , the background of the study, statement of the problem, significance of the study , purpose of the study , Research question and definition nof terms.

Chapter two contains or discusses the literature review and other functions of the topic under study . the chapter three contains the research design and methodology ,sources of data collection , population and sample size, methods of investigation, scope and limitation of the study.

The chapter four contains the presentation and analysis of data , Analysis of the data , and interpretation of result. The chapter four which is the last chapter of the work contains the summary of findings conclusions and recommendation.

Table Of Content

Preliminary Page(s)

  • Title page
  • Approval page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of contents

Chapter One

1.0 Introduction

  • 1.1 Background of study
  • 1.2 Statement of problems
  • 1.3 Objectives of Research
  • 1.4 Research Question
  • 1.5 Statement of Hypothesis
  • 1.6 Significance of study
  • 1.7 Scope of the study
  • 1.8 Limitation of the study
  • 1.9 Definition of terms

Chapter Two

2.0 Literature Review

  • 2.1 Introduction
  • 2.2 Meaning of Internet Banking
  • 2.3 Origin of Internet Banking
  • 2.4 Meaning of Computer
  • 2.5 Relevance of computer to internet banking
  • 2.6 Internet banking service (internet banking products in Union bank)
  • 2.7 Benefit of internet banking
  • 2.8 Drawbacks of internet banking

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 Sources and method of Data collection
  • 3.4 Population of sample size
  • 3.5 Sampling techniques
  • 3.6 Validity and reliability of Measuring instrument
  • 3.7 Method of data analysis.

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Presentation of Data
  • 4.3 Analysis of data
  • 4.4 Test of hypothesis
  • 4.5 Interpretation of result (s)

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Introduction
  • 5.2 Conclusion
  • 5.3 Recommendation
  • 5.4 Bibliography
  • Appendix

Chapter One

1.0 Introduction

this is the methodology chapter of the chapter, it briefly explains the background othe study statement of the problem, objectives of the study , research questions, statement of hypothesis , significance of the study , scpe of the study , limitation of the study and definition of term.s

1.1 Background Of The Study

In Nigeria , the banking industry witnessed lots of challenges due to increase in the awareness and utilization of banking service. The staff strength and branches of most Nigeria banks . in spite of this adjustment the banks cannot satisfy the demands. Some transactions were based on manual and physical present of their customers.
Modern banking system brough relief to the increased volume and complexity of banking operations and services delivery.

Experimentation with banking sytem and electronic fund transfer gradually become part of daily transaction as arrangement were made with banks using micro computer to pay some bill owned big department stores and companies, by this practices the internet becomes a service delivery mechanism of their customer has equally embraced it.

Meanwhile information technology through banking system is radically changing how banking is done all over the world and Nigeria is not an exception. The volume and speed of banking system which has created a lot of changes and business opportunities for banks, corporate banks and industries. Infact Nigeria is believed to be the largest internet user in West African with about 100,000 internet users as at year 2000.
It was estimated to have risen to 350,000.

However, the population size in Nigeria calls for accelerated sensitization on the need to embrace information technology as the prove of an enabling environment for its operation internet is inevitable for the success of any modern banking institution since it is a competitive tool as at creats room for customer services and reduce the cost of operations, promotes profitability growth and efficient portfolio management.

The emergence of a crop fo new generation banks coupled with computerization of the Nigeria banking system. Remarkably information technology is dynamic continuously coming up in new challenges for human capital development virtually every Nigerian banks claims to be having banking system and on line union bank of nigeria plc harbors large amount of information on line and of course the marketing distribution costs. Indeed banking system has brought a greater advantage for one bank over another depending on its application, Operation and service delivery.

1.2 Statement Of Problems

Banks since the inception of the use of internet banking system in the rate 1980s have not made their presence felt much. These are as the result of problems associated with the use of banking system includes the following

  1. Nigerians poor infrastructures
  2. Lack of security
  3. Lost of ownership and adoption
  4. Poor orientation (illiteracy )
1. Nigerians Poor Infrastructures:

The first major challenge for the future of banking system is Nigerians poor infrastructure word bank data indicates that nigeria there are only 6 computesrs and 4 mainline telephone lines per thousand people. Electricity supply is sporadic and inefficient. Most importantly, Nigeria has very low internet penetration, with less than one internet services provided for thousand people.

2. Lack Of Security:

The second challenge is the issue of security : Resent research carried out in Africa shows that companies consider the biggest obstacle of being used the internet for financial trasaction to the lack security. Many companies are concerned about the integrity of financial information that travels over the internet and would rather accept the inefficiencies and incontinences of a manual system that economy and that issue of trst in such that even cheques are not generally accepted as payment for goods and services rendered. Recently , the Nigeria market has witnessed the development of electronic purse products such as value and the smart pay cards designded to move the economy although it is hoped that hey will eventually help lessen the importance of cash in our society. It is therefore clear that in such an environment , most consumers will be skeptical that a click on computer screen will result in a completed financial transaction.

3. Cost Of Ownership And Adoption:

Internet banking is very expensive because entails the acquisiotn of computers, telecommunication gadgets. Banks spirit a lot on these products because of the exchange rate between the Naira and dollar.

4. Poor Orientation (Illiteracy)

So many people are still ignorant of services and benefits available to them that the use of banking system product. The benefits include that it is fast, safe and reliable.

1.3 Objectives Of Research

These researchers seek to achieve the following objectives

  1. To analyze the reasons for opening bank accont
  2. To find out the reasons for preferring internet banking service
  3. To understand the facilities mostly availably the respondents and the opinion about the services.
  4. To measure the satisfaction lkevel of the customer.

1.4 Research Questions

This study will try to answer the following research questions drawn from the study the research questions are as follows:

  1. How many financial product or services are computerized?
  2. Has the use of banking system helped to improve bank operation?
  3. Are banks fully or partially computerized?
  4. Has the performance of the bank being since introduction of banking sytem
  5. What financial services or prouct exist in the financial market?
  6. What finance services or product exist in the financial market?

1.5 Statement Of Hypothesis

  • HI: Internet Banking increases banks profitability
  • Ho: Internet Banking does not increase banks profitability

1.6 Significance Of The Study

It is helped that the findings are recommendation of the study will include :

  1. Improved customers services
  2. Reliability of transaction
  3. Safety
  4. Redundancy of stroge
1. Improved Customers Services:

Internet banking system will enable banks provide new faster and better products, services for its customers.

2. Reliability Of Transactions:

Internet banking technology ensures safety of banks dealing with its customers. Under these circumstance, bans must developed features for their internet sites, which adequate address their customers concern and must educate their customers on the protecting that the internet sites provides.

3. Safety

Internet banking technology ensures safety of banks dealing with its customers, under these circumstances, banks must developed security feature for thir internet Site , which adequately address their customers concerns and must educate their customers.

4. Redundancy Of Storage:

Internet Banking systems help to reduce the use of files , which are archeive thereby reducing storage space, using of files could lead to loss of vtial information about banks customers though mutilation , easy and unauthorized access to files and misplacement of important documents. This can be presented through storage of information in diskette, hard disk and bank up of important information.

1.7 Scope Of The Study

The scope of this research work will be limited to the Nigeria Commercial banks, union banks plc as a case study.

1.8 Limitation Of Study

This research will be limited to Nigeria commercial banks , union bank plc as a case study.

1.9 Definition Of Terms

1. Internet Banking:

A quick and easy way to access your account through the internet.

2. I.T:

The study and the use of electronic processes and equipment to store information of all kinds, including workds, numbers, pictures and abbreviatin for information technology .

3. WAN:

Wide Area Network, a system in which computers in different places are connected , usually over a large area.

4. LAN:

Local area network a system in which computer in different places are connected , usually over a large area.


Controlled by or connected to a computer or to the internet.


A Place in electronic documents on computer data base or network.

7. Globalization:

is a world trade

8. Website:

Where accompany has information about itself on the web.

9. Access:

To open a computer file in order to get or add information .

10. Search Engine:

An act of looking for information in a computer database or network.

11. Network:

Computing a number of computing and other devices that are connected together so that equipment and information can be shared, the office network allows users to shre files and software and to use a central printer LAN.

12. DISK:

A device for storing information on computer with a magnetic surface that records information received in electronic form.

Chapter Five

5.0 Summary, Recommendation And Conclusion

5.1 Introduction

This chapter deals with summary of findings , recommendation and conclusion.

5.2 Summary Of Findings

The banking sector in Nigeria has a strong influence on the development of the payment sytem in paricualr 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 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 important of branch banking in Nigeria or reduce customer confidence on the banking industry from response obtained from staff of the bank studied shows that the introduction of electronic baking has rather increased customers loyalty to banks in general.

The major problem hindering the effective operation of electronic banking is the infrastcutrual deficiencies such enatic power supply, lack of government support and high change on payment terminals (POS, ATMS) etc. these problem are only peculiar to Nigeria as it known that in developed countries issues like power failure or failure link are not in existence however , the introduction of electronic banking system has also contributed significantly to bank income by way of fee or charges gotten from these services.

5.3 Conclusion

The Nigeria sytem is as old as the banking industry. Thus dynamism is manifested by the nature and quality of payment product paraded in the system. These products range from common paper money, cheque , cash to electronic payment product such as Automated teller machine (ATM) smart card telephone banking internet banking etc. with the introduction of these electronic payments products, it is expected that the volume and cost of processing cheque wll be drastically reduced or eliminated.

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 in Nigeria.

5.4 Recommendations

  1. Uninterrupted power supply
  2. Government supports
  3. Skilled manpower and computer wizard
  4. Collaboration among banks
  5. Provision and maintenance of public network.
Uninterupted Power Supply:

The government should endeavour to provide twenty four (24) hours uninterrupted power supply because without electricity these products cannot be boosted and effective , but in this country there is enatic power supply therefore all banking industry should have a standby generating power set incase of power failure , in other to cover the deficiency of power failures.

Government Supports:

In smooth functioning of the payment system the government have the major role to play, in the 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 endeavour to inform the public about the benefit derived on the payment system.

Provision And Maintenance Of Public Network;

System such as telephone , the availability of these basic infrastructure is fundamental to ht 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 operates electricity generating set to ensure reliable power supply.

Collaborating Among Banks:

Electronic payments systems as a result of its huge financial involvement requires that banks must jointly set and manage a network system such as ATM , Smartcards etc collaboration helps to spread and reduce the initial costs of setting up the electronic banking system.

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