system has become an important practice among commercial banks in Nigeria. The
introduction of this electronic banking has improve banking efficiency in
rendering services to customer, This Study aim at the impact of electronic banking on performance
in banking sector. Through the cluster sampling technique, data was collected
by means of questionnaires from 80 Zenith Bank officers and the result shows
that Zenith Bank electronic banking guidelines are in line with the CBN
electronic banking guideline. The bank has an effective electronic banking
system which has improve its customer’s relationship and satisfaction. To this
end, It is recommended that the bank information technology training programme
should be encourage among the staff of Zenith Bank, necessary legal codes
banking should be established in order to enhanced growth of the industry.
Title Page i
Table of content vi-vii
of the study 1
of Research Problem 3
of the Study 7
of the Study 8
of the Study 8
1.9 Historical Background of the Case Study 9
of Related Terms 12
2.1. Introduction 14
of Electronic Banking 17
Channels of E-banking 21
Teller Machine (ATM) 21
Sale Machine (POS) 23
Transfer of Funds 23
Entry of Nigerian Banks into Electronic Banking 23
2.5 Challenges of E-banking in Nigeria 26
Money Laundering 26
Electronically Generated Evidence 27
Consumer Protection 28
Possibility of Core Business Being Swallowed 28
Systems Operational Risks 28
2.5.7 The Regulatory Challenges 28
Banking Profitability and Efficiency 29
Customer Relationship 30
2.8 Electronic Banking Performance 31
3.1 Introduction 35
Research Design 35
Re-statement of Research Questions 36
of Research Hypotheses 36
of Study 37
of Data 38
of Data Analysis 38
3.9.1 Test of Hypotheses and Inference 38
3.9.2 Decision Rule and Justification 39
CHAPTER FOUR: DATA
ANALYSIS AND DISCUSSION OF FINDINGS
4.1. Introduction 40
and Analysis of Data 40
4.2.1. Qualification of Respondent 40
4.2.3: Cadre of Respondents 43
4.2.5: Department of Respondents 45
4.2.6 Threat to Electronic Bank 46
4.2.7: Threat Assessment 46
4.2.8: Respondent assessment of overall performance
Zenith Bank’s E-Banking System
4.3 Test of Hypothesis 61
4.3.1 Hypothesis One 61
4.3.2 Hypothesis two 63
4.3.3 Hypothesis Three 64
4.3.4 Hypothesis Four 65
of Findings 66
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary 67
5.2 Conclusion 67
5.3 Recommendations 69
of the study
The new millennium brought with it new
possibilities in terms of information access and availability simultaneously,
introducing new challenges in protecting sensitive information from some
individuals while making it available to others. Today’s business environment
is extremely dynamic and experience rapid changes as a result of technological
improvement, increased awareness and these demand Banks to serve their customers
electronically. Banks have always been in the forefront of harnessing
technology to improve their products and services.
The Banking industry of the 21st century operates
in a complex and competitive environment characterized by these changing
conditions and highly unpredictable economic climate. Information and
Communication Technology (ICT) is at the centre of this global change curve of
Electronic Banking System in Nigeria today. (Stevens 2012).
The Banking industry has over the time, been using
electronic and telecommunication networks for delivering a wide range of value
added products and services, managers in Banking industry in Nigeria cannot
ignore Information Systems because they play a critical impact in current Banking
system, they point out that the entire cash flow of most fortune Banks are
linked to Information System.
The application of information and communication
technology concepts, techniques, policies and implementation strategies to
banking services have become a subject of fundamental importance and concerns
to all Banks and indeed a prerequisite for local and global competitiveness in
the Banking sector.
The advancement in technology has played an
important role in improving service delivery standards in the Banking industry.
In its simplest form, Automated Teller Machines (ATMs) and deposit machines now
allow consumers carry out banking transactions beyond banking hours.
The internet is revolutionizing sales techniques
and perceptions of leading brands, and the internet is intensifying competition
in all its forms.
Banking sector continues to use the internet to add
value to their customers’ satisfaction; but in order for this to work
effectively - maximizing opportunities, reducing risks and overcoming problems
– an E-Banking strategy is required.
The growth of the Web and Internet as new channels,
the growth in their use by customers and the floor of companies entering the
market, presents a series of key challenges to companies. It is easy and cheap to
put up a website.
But to create an environment delivering effective
service on the Web to a significant proportion of your customer base requires
an E-Banking strategy.
Electronic Banking offers different online services
like balance enquiry, request for cheque books, stop payment instructions,
transfer instructions, account opening, payment of bills, E-statement and other
form of transitional Banking services.
1.2 Statement of Research Problem
In Nigeria, customers of banks today are no longer about
safety of their funds and increase returns on their investments only; Customers
demand efficient, fast and convenient services.
Customers want a Bank that will offer them services
that will meet their particular needs (personalized Banking) and support their
Business goals for instance; businessmen want to travel without carryout cash
for security reasons. They want to be able to check their balance online, find
out if a cheque is cleared, transfer funds among accounts and even want to
download transaction records into their own computer at work or home. Customers
want a preferential treatment and full attention by their choice Bank. All
these are only achievable through electronic Banking.
In line with rendering qualities and acceptable
services that most Banks in Nigeria are gearing toward and investing large sum
of money in information and communication Technology, expectedly such Banks
services have been improved. United Bank for Africa
(UBA), Zenith Bank, GT Bank (to mention few) are in
the forefront in the use of IT in rendering services to their Customers (The
Guardian Newspaper April 18, 2008p 21). It also seeks the challenges involved
in Electronic Banking and Best industrial practice and the approach of
implementing them in Nigeria Banking system.
1.3 Research Objectives
The main objective of this research work is to
examine impact of electronic Banking in Banking Performance on how difference
channels could enhance the delivery of consumers and retail products, and also
how Banks choose to support their Electronic
Banking component/services internally, such as
internet services provider, Internet banking software, Core banking vendor,
Managed security service provider, Bill payment provider, Credit Business and
Credit scoring company, E-Banking systems rely on a number of common components
Specifically the study objectives are to;
the prospects of electronic banking to enhance customer’s satisfaction
the impact of electronic banking on performance in banking sector
the effects of electronic banking on Bank customer satisfaction.
1V. To what
extent do banks E-banking platform comply with the CBN policy frame work.
are the challenges to effective E-banking operations.
One of the questions currently being addressed is
the impact of electronic Banking on traditional banking practices; there are
two views that are prevalent in the Market. The controversies that the internet
is a revolution that will sweep away the old practice, argument in are as
1. Does Electronic Banking give consumers much more
choices and will consumers be less inclined to remain loyal.
2. Deposits will go elsewhere because these banks will
have to fight to regain their customer base. There would be increase in their
cost of funds, making their businesses less viable.
3. Can the
portal provide momentous share of banking profits.
4. Do micro-finance banks find it difficult to evolve;
would they be able to obtain additional capital from stock market?
5. E-Banking as an Evolution than a revolution.
The following hypotheses are formulated in null
form to guide the study.
H0: Electronic banking does not have effect on customer
H1: Electronic banking has effect on customer
H0: Electronic banking does not impact on bank performance
H1: Electronic banking has positive effect on bank performance
H0: Electronic banking does not improve Bank Customer
banking improves Bank Customer relationship
H0: The Banks electronic banking platform does not
comply with the CBN policy frame work.
H1: The Banks electronic banking platform complies with
the CBN policy frame work.
of the Study
have not given much attention to the revolution occasioned by electronic banking with regard to profitability performance of
the foregoing, it is crystal clear that technology is the key driver of change.
For the change to be beneficial, the use of technology should be business
driven to meet clearly defined goals. Thus, the choice of electronic banking in
Nigerian banking system is not a mean stride. This underpins the essence of
this research work, which aims at evaluating the impact of e-banking on the
performance of Nigerian Banks.
researchers have not given much attention to this revolution occasioned by electronic
banking with regard to profitability performance of banks.
The study would enable the banks executives and
indeed the policy makers of the banks and financial institutions to be aware of
electronic banking as a product of electronic commerce with a view to making
of the Study
pursuance of the objective of the study; attention shall be focused on
electronic banking among other electronic commerce implementation. In order to
conduct an empirical investigation into the adoption of Electronic banking in
Nigeria and will also examine the nature of electronic banking operations on profitability performance of banks from 2009 to 2011.
of the Study
In view of the technicalities involved, it would be
unrealistic to assume that all necessary facts have been gathered in the
process of the study. Information gathered is limited to those accesses and
made available by the respondents and also those gathered from end users.
However, the impacts of this limitation will be reduced to the barest minimum.
1.9 Historical Background of the Case Study
Zenith Bank is one of Nigeria's largest banks. The bank currently has a
shareholder base of about one million and is the biggest tier-1 bank in
Plc was established in May 1990, and commenced operations in July of the same
year as a commercial bank. The Bank became a public limited company on June 17,
2004 and was listed on the Nigerian Stock Exchange (NSE) on October 21, 2004
following a highly successful Initial Public Offering (IPO). Zenith Bank Plc
currently has a shareholder base of about one million and is Nigeria’s biggest
bank by tier-1 capital. In 2013, the Bank listed $850 million worth of its
shares at $6.80 each on the London Stock Exchange (LSE)..
in Lagos, Nigeria, Zenith Bank Plc has over 500 branches and business offices
in prime commercial centres in all states of the federation and the Federal
Capital Territory (FCT). In March 2007, Zenith Bank was licensed by the
Financial Services Authority (FSA) of the United Kingdom to establish Zenith
Bank (UK) Limited as the United Kingdom subsidiary of Zenith Bank Plc. Zenith
Bank also has subsidiaries in: Ghana, Zenith Bank (Ghana) Limited; Sierra
Leone, Zenith Bank (Sierra Leone) Limited; Gambia, Zenith Bank (Gambia)
Limited. The bank also has representative offices in South Africa and The People’s
Republic of China.
Zenith’s Strong Growth
Zenith Bank has built a brand as a reputable,
international, financial institution, recognised for innovation, superior
customer service and performance while creating premium value for all
stakeholders. Today, the bank is easily associated with the following
attributes: Innovation, solid financial performance, stable and dedicated
management, highly-skilled personnel, leadership in the use of ICT, strategic
distribution channels and good asset quality. The key strategies used to drive
the robust growth are as follows:
delivering superior service experience to all customers;
deeper and broader relationship with all clients and striving to
understand their individual and industry peculiarities with a view to
formulating specific solutions for each segment of the customer base;
expanding the bank’s operations by adding new distribution channels and
entering into new markets where opportunities exist;
the bank’s position as a leading service provider in Nigeria, while expanding
its operations internationally in West Africa and the financial capitals of the
Ratings and Corporate Governance
Zenith Bank has consistently recorded good ratings
from both the international (Fitch Ratings, Standard & Poor’s) and local
(Agusto & Co.) rating agencies. The ratings on Zenith Bank Plc are
supported by its leading market position in all key performance indices.
Zenith Bank has consistently put in place a robust
system of corporate governance, bearing in mind the key elements of honesty,
trust, integrity, openness and accountability as well as commitment to the
organisation’s goals. To uphold strong corporate governance and transparency,
the bank adopts a robust public disclosure policy. This is to forestall
incidences of abuse, such as insider trading.
All financial information, as well as exceptional and
extraordinary events capable of influencing the public decision concerning the
bank, are approved for dissemination by the board and then related through
authorised means to the public at the same time. The release of such
information is done speedily and as often as stipulated by the regulatory
of Related Terms
Access Products – Products that allow consumers to access traditional
payment instrument electronically, generally from remote locations.
ATM Card - The Card is a complex circuits that process
microprocessors with a single chips that contain the complete arithmetic and
logic unit of computers.
Chip Card – Is a card containing one or more computers chips or
integrated circuits for identification, data storage or special purpose
processing used to validate personal identification numbers, authorize
purchases, verify account balances and store personal records.
Electronic Data Interchange (EDI) – The transfer of information between organizations
in machine readable form.
Electronic Money – Monetary value measured in currency units stored in
electronic form on an electronic device in the consumer’s possession.
Electronic Recruitment –This is an online recruitment services to all
kinds and categories of clients such as (Army, navy, police and the
Paramilitary) through customizable web portals.
Electronic Web Collection - This enables the Bank partner with Universities and
higher institutions of learning to handle Admission, Registration, Examination
Managements and Fees Collection needs.
Internet Banking- This is a product that enables the Bank leverage on
the Internet Banking System Module in-built on the new Banking Application
Mobile Banking - This is a product that offers Customers of a Bank
to access services as you go. Customer can make their transactions anywhere
such as account balance, transaction enquiries, stop checks and other customer’s
service instructions, Balance Inquiry, Account Verification, Bill Payment,
Electronic fund transfer, updates and history, Customer service via mobile,
Transfer between accounts etc.
Smart Card – A Card with a computer chip embedded, on which
financial health, educational, and security information can be stored and
Transaction Alert - The alert system also serves as notification system
to reach out to customers when necessary information need to be communicated.
Western Union Money Transfer (WUMT) - Western union Money transfer is a product that
allowed people with relatives in Diaspora who may be remitting money home for
family up-keep, Project financing, School fees etc.