APPRAISAL AND CHALLENGES OF INTERNET BANKING SYSTEM IN NIGERIA BANKING ENVIRONMENT

APPRAISAL AND CHALLENGES OF INTERNET BANKING SYSTEM IN NIGERIA BANKING ENVIRONMENT

Background of the Study

The application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all banks and indeed a prerequisite for local and global competitive banking. The advancement i-tech important role in improving service delivery standards in the banking industry. According to Olusegun, Ishola, & Hammed (2016), the increasingly competitive environment in the financial service market has resulted in pressure to develop and utilize alternative delivery channels. The most recently delivery channel introduced is online banking.

Conversely, online banking is otherwise refers to as electronic banking; and electronic banking, similarly is term as e-banking.  According to Ovia (2018), the evolution of e-banking dates to 1986 when the banking sector in Nigeria was deregulated. The aftereffect of this deregulation brought extensive change through computerization and enhanced bank service provision. In an effort to encourage e-banking, the government of Nigeria promoted electronic banking with which the CBN released a guideline on august 2003, having recognized that electronic banking and installments service are still at the beginning times of improvement in Nigeria. Oleka opine electronic banking is the way a bank carry out business transaction using electronic devices such as computer system, global system for mobile communication (GSM telephones, Automated Teller Machine (ATM), internet facilities etc. 

Online or electronic banking systems give everybody the opportunity for easy access to banking activities, thus promoting financial inclusion. These banking activities may include retrieving an account balance, electronic money transfers and retrieving an account history electronically.  Dawson (2018) explicitly points out the merit of E-banking to encompass speed operation, better communication, timely management, improvement of product quality and gaining competitive advantage. According to Olusegun et’al (2016), the transformation from the traditional banking to Ebanking has been a ‘leap’ change, there is however a high level of job insecurity among employees in the modern-day banking industry. In other words, the modern-day banking services place more emphasis on technological innovations to improve service delivery and high level of customers’ satisfaction; and this however no doubt increases the level of employees’ job security by rendering some skills obsolete and demanding high level of skill in promoting e-banking occasioned by information technology evolution or development. 

One of the major significance of e-banking products and services is improved efficiency and effectiveness of the operations so that transactions can be processed faster and most conveniently. Thus, it is expected to enhance customers’ services, effective distribution, improved operations, faster access to information and improved internal processes. This implies that customers’ benefit ranges from reduced frequency of going to the banking halls to handling of cash. However, despite this seemingly importance of e-banking, closer observation shows that there are still long queues seen in some banking halls even as customers still handle too much cash, problem of frequent network failure and inadequate awareness of available e-banking products and services, even as empirical evidence shows that level of understanding of a product and its commensurate benefits determines the reactions of customers to it and patronage (Balanchandler, 20117).

​​​​​​​Statement of the Problem

In the bid to catch up with global developments and improve the quality of their service delivery, Nigerian banks have no doubt invested much on technology; and have widely adopted electronic and telecommunication networks for delivering a wide range of value added products and services. However, Agboola  (2017) with the changes in business operations as a result of the internet era, there is a great concern about information security. The promise of e-banking is offset by the security challenges associated with the disintermediation of data access in Nigeria.Sometimes, the problem is even exacerbated by way of wrong debiting of account in the process of a bank customer attempting to assess his or her bank account balance. Even a lot of bank customers over the years have been defrauded because of the introduction of e-banking in the banking industry.Some members of the public have even consciously or unconsciously rescinded to the use of e- banking despite its attendant benefits. Many of the reasons are attributed to challenges of internet banking. According to Claessens,  Dem, De Cock, Preneel,  & Vandewalle, (2022) assert that the high prevalence of Internet fraud and lack of an adequate regulatory framework to protect the banks from the volatility of risks associated with Internet banking, especially at the levels of communication and transaction. Therefore, there is no contradicting the fact that the world today experiences problematic and unresolved e-banking services. Auta (2020) opined that this has seriously affected and is still affecting the process of e-banking worldwide, particularly in developing countries such as Nigeria; an indication that there are myriad of issues and challenges surrounding the application of e- banking. This has continued to elicit the reactions of many scholars with varying and often conflicting views on the fundamental issues at stake; how they can be resolved; and the importance of such resolution in the ever-changing banking system. Against these problem, the researcher delves into the study on appraisal and challenges of internet banking system in Nigeria banking environment.

​​​​​​​Objective of the Study

The broad objective of this study is focused on an appraisal and challenges of internet banking system in Nigeria banking environment.. Other specific objectives includes:

1. To examine the benefit of internet banking system in Nigeria.
2. To establish whether there are challenges associated to internet banking system in Nigeria
3. To determine the challenges of internet banking system in Nigeria
4. To establish whether the challenges associated to internet banking discourages customers usage in Nigeria banking environment..

Research Questions

1. What are  the benefit of internet banking system in Nigeria?
2. Are there challenges associated to internet banking system in Nigeria?
3. What are  the challenges of internet banking system in Nigeria?
4. Does  the challenges associated to internet banking discourages customers usage in Nigeria banking environment.?

Research Hypothesis

Ho: There are no challenges associated to internet banking system in Nigeria.

Hi: There are  challenges associated to internet banking system in Nigeria.

​​​​​​​Significance of the Study

The outcome of this study will be of immense benefit to: The management of  Bank since it will help identify most of the challenges faced by the bank as well as the complaints tabled by the customers.Solutions will then be proffered on theses identified challenges. This will go a long way to help the bank achieve its stated objectives of ‘‘unequaled customer experience’’, and in the long run increase shareholder’s wealth. The study is beneficial to  bank executives and indeed the policy makers of the bank and other financial institutions to be aware of electronic banking system as a product of electronic commerce with a view to making strategic decisions. This study will also be of benefits to the community and the society by creating awareness on the difference e-banking channels used by the banks and how they work. The Federal Government of Nigeria on the need to provide basic infrastructures that will help develop, increase the growth and use of e-banking in Nigeria.

1. 1. Scope of the Study

The scope of this study is focused on an appraisal and challenges of internet banking system in Nigeria banking environment. The study will further investigate whether challenges associated to internet banking discourages customers usage in Nigeria banking environment. The study is however delimited to Access Bank, Federal Capital Territory, Abuja.

1.8 Limitations of the Study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing that internet banking system in Nigeria banking environment.discourse is vast thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size covering only customers bankers in Access Bank, Federal Capital Territory, Abuja.. Thus findings of this study cannot be used for generalization for  other  states within Nigeria. Additionally, the researcher will simultaneously engage in this study with other academic work will impede maximum devotion to the research. Howbeit, despite the constraint  encountered during the  research, all factors were downplayed in other to give the best and make the research successful.

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