Role Of Electronic Banking On The Growth Of Nigerian Economy

Project and Seminar Topics with material for Banking and Finance

Role Of Electronic Banking On The Growth Of Nigerian Economy


This research work is on ROLE OF ELECTRONIC BANKING ON THE GROWTH OF NIGERIAN ECONOMY using UBA Plc as a case study. The major objective of the study was to examine the relationship that exist between the adoption of electronic banking services and profitability of the Bank. The study made use of both primary and secondary sources of data collection. Quota sampling technique was used to select data necessary for this research work. The study revealed that electronic banking, despite its challenges, has led to increased efficiency in banking and its services and reduction of waiting time experienced in the banks. The findings also revealed that e-banking are inhibited by some factors which include cost of purchasing e-banking equipments, poor power supply and inadequacy in the security of transactions conducted through e-banking. The study recommends among others that, government should improve on electric power supply and development of ICT infrastructure to enhance effective e-banking services delivery in Nigeria.

Chapter One


1.1 Background of the Study

Before the emergence of modern banking system, banking operation was manually done which lead to a slowdown in settlement of transactions. This manual system involves posting transactions from one ledger to another which human handles. 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 bank then use only one computer in carrying out transactions which ameliorate the sluggish nature of banking transaction.

According to Clive, W. (2007, p.5) in his Academic dictionary of banking, electronic banking is defined as a form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, cheques or other negotiable instruments. According to Omotayo, G. (2007, p.3) defines electronic banking as a system in which funds are moved between different accounts using computerized on line/real time systems without the use of written cheques. According to Edet, O. (2008, p.1) in international Journal of investment and finance, electronic banking is defined as a system by which transactions are settled electronically with the use of electronic gadgets such as ATMs, POS terminals, GSM phones, and V-cards e.t.c. handled by e-holders, bank customers, and stake holders.

In the Nigerian monetary system, the Central Bank of Nigeria (CBN) is pursuing the cashless banking system that would see the co-existence of cash and electronic money and the policy document on cashless economy detailed out the following implications:

  1. Reduction in cash transactions to both the banks and their customers;
  2. Expansion in vault cash;
  3. Expansion in the credit creation process;
  4. Expansion in the involvement of the informal sector in the banking process. CBN (2011)

These implications follow directly from the surface of the policy but there is the need for a deeper and economic analysis of the introduction of the cashless banking or cashless economic paradigm and its attendant implications as far as the attainment of advanced economic objectives are concerned.

1.2 Statement of Problems

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.

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, coupled 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 interconnectivity 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.

The researcher will also evaluate the major problems associated with the development of electronic banking system in Nigeria as well as evaluate possible solutions to these problems.

The effect of electronic banking on profitability of banks will also be assessed. There are different types of electronic banking used in Nigeria banks; the researcher will like to evaluate the impact of these e-payment systems on banking industry and also assess the impact of electronic banking in Nigeria economy.

1.4 Research Question

In order to get information from respondents the following questions were formulated:

  1. What is the role of e-banking on the growth of Nigerian economy?
  2. What are the various types of electronic payment and the extent of electronic payment in banking activities?
  3. To what extent can e-banking improve or enhance banking services?
  4. What are the major problems associated with the development of electronic banking system in Nigerian?
  5. What are the solutions to the problems associated with the development of e-banking?
  6. To what extent has e-payment affected banking activities?
  7. What are the benefits of Bank Verification Number (BVN)?

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.

  1. It will expose the strength and weakness of electronic banking.
  2. It will motivate banks and other economic agents to computerize their services.
  3. Knowledge in the area of electronic banking will be advanced.
  4. Apart from contributing to the knowledge of electronic banking, it forms a reference for future research in this area.

1.6 Scope and Limitations of the Study

This research is on the role of electronic banking on the growth of Nigerian Economy using UBA Ikot Ekpene as a case study and also it covers the various forms of payment and electronic systems used by banks.

In the course of carrying out the study, some challenges were encountered by the researcher that stood as limitation to the study and they include:

Financial Factor:

Inadequate funds affected researcher had to travel long distances for the distribution of the research questionnaire forms.

Time Factor:

This affected the reduction in the size of the sample used for the study because the researcher had only less than two months to complete the study.

Material Factor:

Shortage of relevant material for literature review posed.

1.7 Organization of the Study

This research work is organized into five chapters.

Chapter one is concerned with the introduction of the research study and it presents the preliminaries, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

Chapter two focuses on the literature review, the contributions of other scholars on the subject matter is discussed.

Chapter three is concerned with the system analysis and design. It presents the research methodology used in the development of the system, it analyzes the present system to identify the problems and provides information on the advantages and disadvantages of the proposed system. The system design is also presented in this chapter.

Chapter four presents the system implementation and documentation, the choice of programming language, analysis of modules, choice of programming language and system requirements for implementation.

Chapter five focuses on the summary, constraints of the study, conclusion and recommendations are provided in this chapter based on the study carried out.

1.8 Definition of Terms


Business that keeps money for individual people or companies, exchanges currencies, makes loans, and offers other financial services


Using an electronic means of exchanging money instead of dealing in cash

Cashless Society:

Society that does not use cash:

A theoretical society in which consumers purchase all goods and services by credit card or electronic funds transfer, without the use of cash.

Electronic Banking:

The use of computers and related networks/devices to carry out transfers of money and other banking transactions.


A group of people who have the power to make and enforce laws for a country or area.

Chapter Five

Findings, Conclusion and Recommendations

5.1 Introduction

This chapter presents the summary of findings, conclusion and recommendations based on the results of the study.

5.2 Conclusion

Based on the findings made from the study, it is concluded that there are several impacts of electronic banking operations in Nigeria, which include the ease with e-banking facilitates, it makes work easier and more interesting, it reduces risk of carrying bulk money, it gives customer’s 24 hours access to her/his account and saves time.

E-banking has enabled some banks to provide round the clock personalized banking services to customers throughout the country but it is inhibited by certain factors which include; cost, human factor, technical constraints, operational challenges, literacy and natural factor.

Electronic banking is therefore a welcome development that is capable of transforming the banking industry for greater productivity.

5.4 Recommendations

The following recommendations have been put forward based on the findings of the study:

  1. The government should improve on power supply to facilitate effective electronic banking operations.
  2. The government and the management of Nigerian banks should consider electronic banking frauds as a matter of concern to avoid the essence of the technological innovation from being jeopardize.
  3. Workshop and seminars should be provided by banks to their customers especially on the uses of ATM card. This will help customers to keep their card and pin safety.
  4. Due consideration should be made by the government to develop ICT infrastructure for the effectiveness of e-banking services.

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