CRITICAL EXAMINATION OF ELECTRONIC BANKING SYSTEM IN NIGERIA_NURA DOGO

CHAPTER ONE
1.1. BACKGROUND OF THESTUDY
Banking in Nigeria has come a long way from the time of ledger card, and manual filling system, most banks today have electronic system to hand their daily voluminous tasks of information retrieval, storage and processing. Irrespective of whether they are automatic or not, banks in Nigeria by their nature are continually involved in all forms of information, on management in a continuous basis. Electronic banking (E - banking) is an umbrella term for the process by which a customer may Perform banking transactions electronically without visiting brick and moral institution. That is, automated delivery of new and traditional banking products and services directly to customers through electronic, interactive, Communication channels.
Thus, the following terms are form of banking system such as electronic banking outline banking. Personal computer (PC) banking and internal or online banking these are the most frequently used designations. It should be noted, however that the terms used to describe the various types of electronic banking are after used interchangeably (coin, 2004).
Recently banks have finally come to realize that the use of electronic in banking system is a means of satisfaction and patronage, cutting cost and improving services. The improvements of these services are done through the issue of effect of technology. For instance, some banks have make arrangement to look into internet satellite network such that could link their major branches all over the country there by enabling their customer to cross check balances from any of the branches right across the country. (Example of such is first bank of Nigeria Plc).
Electronics banking is “defined as the use of the technology to communicate instruction and retrieve information from a financial institution where an account is held. This service includes the systems that enable financial institution customer, individual or business to obtain information on financial product and services through public or private network", (Prakash and malik, 2008). However, electronic banking has experienced tremendous growth in many countries especially Africa and today it has transformed the traditional banking practice in Nigeria. Currently, electronic banking in Nigeria has changed the way services are delivered by the banking Sectors to their customers. Electronic banking services have lowered operating, retain customers, reduced branch traffics, and downsized the number of branch Staff, Parise, (2006). Essentially, through the use of Information Communication Technology banks now employ different channels such as online banking, mobile banking and automated teller machine (A. T. M.) to deliver their services. Report on electronic banking system in Nigeria reveals that e - payment machinery especially the card technology, is presently enjoying the highest popular rate in Nigeria banking market. According to Inter Switch's Statistics, Nigeria has over 30 million ATM cardholder who involve in over 30 billion worth of transaction on the machine every month Nigerian banks operate over 900 ATM machines across the country, [36 state and federal capital territory]. Also, to enhance effective security measures, Nigeria banks have up graded the ATM Cards from the magnetic stripe to the euro visa-master card standard, popularly known as Verve Card. This letter technological device s more fraud resistant because all the data of the customer are recorded on the chip. Hence, electronic banking system has become the main technology driven revolution in conducting financial transaction in Nigeria. Meanwhile, Nigeria banks have made huge investments in telecommunication and electronic system as useful and easy to use. Adesina and Ayo, (2010)., there are many advantages of electronic banking. It is convenient, it is not operational tinning. There are no geographical barriers and services that can be offered. Electronic banking has experienced explosive growth in the transformed traditional practice in banking. Gonzalez, (2005).

1.2 STATEMENT OF THE PROBLEMS
Investing in electronic banking system in Nigeria, the country will need a large amount of financial resources in Computer technology, the resources in short supply in Nigeria couple with high level of poverty. Jean Adam (2006) Suggest, that use of ICT require complementary investment in skill, organization and innovation investment and change entails risks and cost which might reduce bank profit. Hence there is need to use some of relative measure such as return on assets to uncover the impact of ICT investment on banking of electronic payment system, there must be availability of infrastructure facilities such as electricity and telecommunication network, however, power supply fluctuates and there is still constant failure links in network. Adoption of electronic banking which is supposed to ease banking transaction rather resulted to woe the customer. Most people complain of time wasted in banking halls. 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 feed back when there is any computer breaks down. While the rapid development of information technology has made some banking task more efficient and cheaper. Technology Investment is taking a large share of bank resources.
Another problem associated with his financial innovation is plastic card fraud, particularly on lost and stole cards and counterfeit card fraud. Banks need to manage costs and risks associated with electronic banking. It is therefore important that e - banking innovation is made by sound analysis of risks and cost associate so as to avoid harms on the bank performance. On the other hand the banks performance is directly related to efficiency and effectiveness of electronic banking. But on the other way controls and standards are needed to prevent losses associated with electronic banking.
More so, government is of great help in supporting e uses of computer in the banking industries, to make the activities of the bank faster and easier so as to bridge the gap that exist between the bank and their customer.
1.3 OBJECTIVE OF THE STUDY
The major objective of the study is to investigate the positive and negative effect of E-banking in Nigeria using a survey of bank customers in First bank of Nigeria Plc Gombe Branch as a case study-other specific objective of this study include the following;
i. To identity the problems, issues and challenge encounter in electronic banking
ii. To examine the kind of problem that customers are facing with this new development.
iii. To identity what substantial development electronic banking has brought to customers.
iv. To examine the level of customers satisfaction with the use of electronic banking.
v. To find out whether or not infrastructural facilities such as electricity and telecommunication is a barrier effective banking in Nigeria.
1.4 RESEARCH QUESTIONS
For better understanding of these research projects, the study will attempt to answer the following research questions.
i. Do bank in Gombe really encounter challenges and problems operating E-banking system?
ii. What Kind of development did banks and its customers experienced with the advent of E-banking? Does E- banking ensures customer satisfaction?
iii. Are there available and stable infrastructures to accommodate the operative of E-banking in Gombe?
iv. Does the advert of E-banking in Gombe leads to better services delivery to customers and increase banks profitability?

1.5 RESEARCHHYPOTHISIS
HYPOTHISIS ONE
Ho. There is no Significant relationship between E-banking and services delivery in banks.
Ho. There is significant relationship between E-banking and service delivery in banks.
HYPOTHISIS TWO
Ho There is no significant relationship between E-banking and profitability of banks
Ho There is significant relationship between E-banking and profitability of banks
1.6 SIGNIFICANT OF THE STUDY
The study would be very significant because it would provide answers to factors militating against the implementation of electronic banking and is a valuable tool for student, academic institution managers and individual that want to know more about electronic banking trend especially in Nigeria.
Electronic banking in our economy today is a well come development and also it impact in the society are over-whelming. So this research is significant in so many ways, it will expose strength and weakness of electronic banking, it will motivate bank and other economic agents to computerize their service, knowledge in the areas of electronic banking will be advanced. Apart from contributing to the knowledge of electronic banking, it forms a reference for future research.
1.7 LIMITATION OF THE STUDY
In pursuance of the objective of the study, attention should be focused on electronic banking among other electronic commerce implementation institutions. In order to conduct an empirical investigation into the adaptation of electronic banking in Nigeria the study will also examine the First Bank Plc. The study will give the attention on electronic banking so that the readers may understand electronic banking.
The research is faced with various limitations, such as inadequacy of information regarding house hold family violence in Nigeria. Gathering of relevant research material was also not easy.


1.8 SCOPE OF THE STUDY
The scope intend to cover the origin development and function of E - banking of First Bank Nigeria, within Gombe Metropolis.
1.9 DEFINITION OF TERMS
The following concepts have been used in the project.
(a). A.T.M: Automated teller machine allows a bank customer to withdraw cash from his accounts which debited immediately.
(b). INTEREST BANKING: These is a products that enable the bank leverage on the internet banking system module in built on the new banking application implemented by the bank to serve the internet banking needs of the customers.
(c) MOBILE BANKING: This product offers customer of a bank access service as they go customer can make their transactions anywhere, such as account balance, update and history, electronic fund transfer etc.
(d) BANK: An establishment which advance money to individuals, and receives deposits entrusted to it.
(e) COMPUTER: A machine which automatically process data in according within it and then provide the result in a useful form.
(f) COMPUTERIZATION: A process whereby some previously manual operation using card system in to a computer system.
(g) CUSTOMERS: Someone who patronıze a particular product or service uses of it either for himself or obtain it for onward transfer to person who requires it for his use.

CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 INTRODCTION
The modern banking system is a highly complex depending on the availability of human talents and sophisticated at maximum satisfaction. There is need for bank to be efficient and rendering their service so as to maintain customer and also customers, and this can only be done if the existing customer's required to clearly be one of the primary objectives of a bank, but at the same time the bank must also strive to provide satisfaction on its employees and to also increase its capital base to keep up with other banks.
These object can only met by careful planning, organizing and controlling of the banks methods of operation, profitability in the face of tough competition will only be maintained by keeping cost low, then other banks and running the bank efficiently.
Since radical changes have occurred m the global economy and business environment within which banking application of information technology must operate and these changes have improve the activities of banks generously. The introduction of electronic devices to have detailed information about the performances of the banks, well we all know that these information about what is going on in the bank can only be getting through computers. This is because the modern digital computers are the most sophisticated tool for information handling
CONCEPTUAL FRAME WORK
The definition of E-banking varies among researchers partially because electronic refers to several types of service through which a bank customer can request information and carry out most retails banking services via computers, television, internet or mobile phone Burr (1996) describe banking as an electronic connection between the bank and the customers can access their banks without having to be physically present at the bank branch. Therefore E -banking covers all these ways of banking business electronically (Mohammed, 2009) electronic banking is the provision of banking services to the customer through technology (Daniel, 1999).
The discovery of internet and what we carried electronic commerce has opened various opportunities for online trading all over the world. It has brought the market close to the customer at a relatively low cost. In purchase reduces cost compared to physical visiting or shops for purchase Adesina and Ayo, (2010) disclosed that the advent of internet, electronic commerce, communication technology and how user response to these technology has opened opportunities for many business including the financial institution.
ELECTRONIC BANKING AND THE COMMON BANKING PRODUCTS
The use of information technology in banking operations is called electronic banking it is a product of E-commerce in the head of banking and financial Service.
In what can be described as business-to-customer (B2C) which includes domains for balance acquiring. Request for cheque books, recording shop payment instructions, balance transfer instruction, account opening and other forms of traditional banking service services. Banks are also offering payment service on behalf of their customers who e- shop.
TELEPHONE AND PERSONAL COMPUTER BANKING PRRODUCTS
Card and ATM Card (automated teller machine card), while the electronic card is gaining popularity in USA and Nigeria, the Spanish financial institutions demonstrated the highest implementation and update of smart cards across Europe (Ameda, 2005). The smart card was introduced into the Nigerian market to reduce or eliminate problems of carrying cash about (Ameda, 2005). It is electronically loaded with cash values, credit card and stores information on a microchip. The microchip contains security programs: these protect transaction between individual without the needs To banks of the other third parties, also the system does not require control clearing. In addition, the system allows transfer of one value to the other hence it operates like cash.
THE AUTOMATED TELLER MACHINE (ATM)
Worldwide, the use of paper cash still remains the most widely used and acceptable means of setting financial transaction and obligation However, the proportion or cash transaction is increasingly on the decline, especially in advanced economics (Ameda, 2005). In USA, where the use of cash is still prominent competed with European countries, it represent 50 percentage or more of the total transactions. Of course, cash is a non- electronic payment method.
However, the physical carriage of cash as well as the visit to the bank branches is being reduces by the introduction of an electronic device. An ATM device allows a bank customer to withdraw cash from his accounts via a cash dispenser (machine) and the account debited immediately. A fundamental advantage is that, it needs not to be located within the banking premises. It is usually in stores, shopping malls, fuel stations etc.



AN OVERVIEW OF ELECTRONIC BANKING IN NIGERIA
Before 1998, there was Just a few dial up provider that operated slow links. For years, Nigeria telecommunication (NITEL) the parasitical monopoly dominated the whole Nigeria was just at the beginning stage. From convenience of their home and offices, these days most banks internet service which enable the customer to conduct banking transaction online.
Today majority of the Nigerian banks after online banking and real time banking services. Are E-commerce's that has developed in as E - banking. A few banks started the ATM conisation in 2003 to set up ATM across the country Nigeria is the fourth behind other countries in providing technology at an affordable cost to its population Adesina and Ayo, (2010) also maintained that the adoption of electronic banking channel such as electronic banking service delivery 1 Tact gaming grounds in Nigeria. Different E-banking channel such as electronic cards Internet banking and mobile banking service have been introduced Pakarainen ettal, (2004) highlighted two major reasons underline banking development and penetration-first bank get significant cost saving in their operation through e-banking service and secondly that banks have reduce their - branch networks and down-size the number of service staff. It was also indicated that electronic banking services delivery are the cheapest, most profitable and wealthier delivery channel for banking product. Internet banking services crucial for long term survival of banks in the world of electronic commerce.
(BURNHAM, 996). The market for internet banking has been forecast to grow extremely sharply in the next few years, affecting the competitive advantage enjoyed by traditional branch bank (Ducloux 1996, Liad shao and chan, 1996). It was also argued that internet banking would help present a potentially low alternative to brick and market branch banking (Margaret and Thompson 2000).
Nigeria direct, (2006) Anwuka (2006), Cuted in francis and Bahatunde (2000) Posted that with a population of over 150 million that is growing of a percentage rate annually, Nigeria has witnessed on increasing demand for improved services delivery and through online banking (sannes 2001) Crane and Bodies (1996) Francis and Babatunde (2009) therefore submitted that some banks in Nigeria amongst other facet of the economy. have taken advantage of the country ICT infrastructure to improve service to customers. Nigeria can be said to be threshold of a major banking revolution with net banking already been unveiled (Ovia 2001). Of all sectors in the Nigeria economy, banking stands out. Electronic banking provide the facility of assessing customers’ accounts from anywhere in the world by using a computer with internet connection, and is particular advantageous to non-residents Nigeria and high net worth individuals, having multiple banks accounts. Earlier articulated reason why internet banking was having a moderate economic impact in the country includes the fact customers of the Nigerian banks are not well trained and educated on the working of internet banking. A situation that makes transaction process via internet banking phone to error especially on part of the customer. In addition, the absence of a clearly defined legal framework for internet banking leaving banking with in adequate legal over to provide their services and poor telecommunications infrastructure all over the country are all various reasons for the in efficiencies of internet banking in the country furthermore, the fact that internet usage in the country has been abused by cybercriminals international operations. The inherent fear associated with patronizing internet banking Services in Nigeria is again reinforced by the growing evidence that world, dubious Nigerians are take web site to scoop funds on unsuspecting victims. In some cases, these crimes committed using existing banks sites.

THREATS OF CYBER CRIMES ON THE NIGERIAN PREMISES
The advance tee fraud or 419, which is one of the most popular of all internet frauds originated from Nigeria in the 1980s its developed in information technology. At introduction of computers and the internet, 419 crimes become prevalently perpetrated through the use of emails and other internet means (Amedu 2005).
The level of adoption and practice of electronic banking (especially internet banking) has remained quite insignificant, global project still remain that information technology would continue to play a revolutionary role in the development and delivery of banking products and services all over the world. In effect, it is the projection that has raised pertinent regulatory question concerning electronic banking, especially in internet fraud-infested countries like Nigeria. One issue here borders on how to handle the rising level of fraud and forget prevalent in the entire banking system, and how to make internet banking fit well in the banking structure of a country so notorious identifiable with criminal use of the internet access.

2.3 THE EFEFCT OF COMPUTERIZATION ON BANKING OPERATION
Computers were once regarded as distant ominous abstraction. In 1992, they truly become personalızed, brought down to scale so that people can hold, programmed and play with them (Aderson 1982). The bank were not left out in this revolution and this has both positive and negative effect on their operation.
A Positive effect of computerization in the area of computerization branch instead of machine existing in the mechanized braches how data entry have operates. An example of this can be first bank plc, Gombe branch, where a customer can withdraw and deposit money in any branch of the bank.

CUSTOMER SERVICES AND COMPUTER APPLICATION
The competition among banks to package and repackage products has now opened. Bank customer over whelmed with the purported Services offered by banks are now looking for these banks which not only serve their time but also offer diligent financial services punctuated by frauds, delay and other forms of business inconveniences. Udah and chris (1988).
Banking services to Customers ranges from issuing of cheque books to the giving of open credit. For further improvement in banking services cash dispose and automated teller machine (ATM) were introduced. Both of these are sophisticated machines that can be operated by both current and saving accounts holders.
According to CBN monthly digest (1996) cash dispenses are defined as machine located in the outside walls of certain banks, which enable a customer using a especial card to obtain and deposit amount of Cash at any time of the day. Ihenacho (1992) explain that automated teller machine (ATM) provide a wide range of banking system and are operated by plastic cards carrying a magnet tape-record the card holder personal data regarding his financial status. Recent development have that automated teller machine are installed in shops, filling stations of computer terminals that enable a card order to pay for goods immediately by giving payment instruction to his bank, computer after checking that the customer has sufficient funds, transfer the Sum straight into the beneficiaries bank accounts, This is a sleep rewards "cashless society" Were there would be no need to Carry around large sum of money.
According to Davis (1981) the speed and accuracy used in processing information by computers has of been achieved manually by any other devices. To teach (1972). It is expected that computerized banking System will facilitated speed and accuracy of processing transaction and reduced customer waiting time.
This has been computerized whether or not reduction of customer waiting time can be achieve through computer application in Nigeria situation, will be established into this study Ihenacho (1992) further explained that Nigerian customers are demanding the best and higher standard of service which can only facing through technology. Nigeria banks Gombe branch are fencing these challenges squally thereby enhancing computerization and technology commitment.
According to Tomeski and Haralds (1975), computerization of banking service is not only advantage to the customers but also to the individual banks. In other words it makes the operation of banks run more smoothly. The application of computer to financial matters therefore seems to present such limitless possibilities that makes writer have been speaking of a future "cashless society. It is time that it carries to a logical extreme; many steps in the money exchange can be eliminated using based system.

2.4 BENEFIT OF COMPUTERIZATION OF BANKING INDUSTRY
Apart from the customer, bank itself has great advantage since the introduction of computer to banking industry, Computer is greatly revolunazing the banks.
According to Graham (1979), Routine task such as managing payroll and calculation of customer's balance has been over to computers, Donwa (991).
State that they are of the advantage of computerizing in banks for reductions in customers waiting time since the necessary verification is done speedily. These services known as automated teller machine were used first bank of Nigeria Plc. This type of service enables the customer of the bank to make independent withdrawal of 20 hours daily non-stop serve leaving the banker to get on With other work that need to be done. Reduce work over load. Customers enjoy flexible transaction devoid of the hindrance of official closing hours, there by the customer convenience withdrawal at his/her leisure time even during weekends and public holidays.
Fredic (1983) Said that one of the benefit of computerization system is the ability to store, sort through and reprieve immerse amount of information - this is an advantage to bank because computer store up-to-date customer balance and present them on demand. Donwa further gave on example where under a network computer system, a customer can verify in Gombe his account balanced which he maintain in Lagos, a distance of over thousand kilometers. An auto link service introduced by first bank of Nigeria plc enable the customer to have direct computer linkage to his account from any of the bank branches nationwide, the customer can obtain a print out of his statement of his account from any branch as well as send e-mail to their respective account officers. The service (auto link) enables the customers to own-close statement anywhere in the country. Steward (1977), in his own contribute Computerization reduce the cast of produce because most of the Job is done by machine which helps in reducing the burden of the wages/salaries.
This is of great benefit to banks because would use the funds saved tor other projective purposes.

2.5 NEGATIVE IMPACT OF ELECTRONIC BANKING NIGERIA
Power failure and communication link, constant electric failure leads deficiencies, infrastructure such as ATMs, computer etc which slows down the rate of electronic transaction and also failure links from Nitel line which are often as a result or Surges caused by PHCN in consistent electronic power supply LACK OF COMPUTER BANKING UP As a result of lack Of computer back up when the bank System get failure there will be a loss of information about a customer, and this may lead to misappropriation of customer account. Therefore bank should have a manual back up (ledger containing all data about the customer).
LACK OF ADEQUATE INVESTMENT CAPITAL
Funds that can be used to buy new information technologies and for modernizing existing system is generally in short supply. While there are a number of modern banking applications in use, there is also integrated banking system, Nigeria has continued to experience innovations in terms of products development specifically, and there has been tremendous improvement in the speed in which funds transferred within and outside the domestic economy (international money transfer)

REDUCES EMPLOYMENT IN THE COUNTRY
Electronic banking in the country today has reduce the rate of employment the country where by most works that should be done by human are done by machine there by lead to minimum rate of employment and high rate of unemployment in the country.

HIGH CHARGES ON MACHINES
The rate of communication or charges imposed by banks is too high there by discouraging customers from using the electronic machine for exchange of transaction example of such charges are cheques on withdrawal ATMs and online transfer from one bank branch to another.
LOW PUBLIC ACCEPTANCE
Customers and public do not have trust in the machine in the sense that fraudulent personals use the system in carrying fraudulent activities, event today banks uses the machine in looting customers money from their accounts. Some customers complain that sometimes when they go for withdrawal with their ATM the machine will seize the card while their account will still be debited with un-withdrawal sum course of ratification of this problems, the customers might be discouraged because it will take a longer time or end up unsolved

INSECURITIES IN BANKS
Most electronic machines today are not secure there by making it easier for fraudulent personnel to carry out their fraudulent activities without been caught.
Due to insecurity, banks cannot prevent, stop or dictate any fraudulent activity. Computer hackers also use the system in stealing data or information by breaking of codes.

2.6 POSITIVE IMPACT OF ELECTRONIC BANKING IN NIGERIA
Speed up settlement of transaction:- Electronic banking speed up settlement of transaction either national or international level where bank stand as paying bank to the customers for settlement of transaction or debt and collection bank for the collection of payment on transaction mode.

    Date: 2026-08-02 00:00:00.000000