ELECTRONIC BANKING AS AN AID TO COMMERCIAL

BANK
OPERATIONS IN NIGERIA

BY

OLASOPE TOSIN
BF/2008/110

DEPARTMENT OF BANKING AND FINANCE,

FACULTY OF MANAGEMENT AND SOCIAL
SCIENCES, CARITAS UNIVERSITY, AMORJI-NIKE ENUGU,
ENUGU STATE,

AUGUST, 2013

TITLE PAGE

ELECTRONIC BANKING AS AN AID TO COMMERCIAL BANK

OPERATIONS IN NIGERIA

BY

OLASOPE TOSIN
BF/2008/110

BEING A PROJECT REPORT PRESENTED TO THE DEPARTMENT OF

BANKING AND FINANCE, FACULTY OF MANAGEMENT AND SOCIAL
SCIENCES, CARITAS UNIVERSITY, AMORJI-NIKE ENUGU, ENUGU
STATE, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
AWARD OF BACHELOR OF SCIENCE (B.Sc) DEGREE IN BANKING AND
FINANCE

ii

APPROVAL PAGE
This research was read and approved for meeting the requirements is
recommended for the award of Bachelor of Science (B.Sc) Degree in
Banking and Finance, Caritas University, Amorji-Nike, Enugu State.

_____________________

________________

Nsofor E.S. Mr. Okafor I.G

(Project Supervisor)

(Head of Department)

iii

CERTIFICATION
I, Olasope Tosin, an undergraduate student of Banking and Finance with
the Registration Number BF/2008/110, have submitted this project report
for the award of the Degree of Bachelor of Science (B.Sc) in Banking and
Finance. The work embodied in this project report is my original work and
has not been submitted in part or full for any other Degree or Diploma in
this University or any other Institution.

______________

___________

Olasope Tosin

Date

We certify that this project report has been successfully defended and
accepted for the award of the Degree of Bachelor of Science (B.Sc) in
Banking and Finance.

______________

___________

Nsofor E.S Date

(Project Supervisor)

______________

___________

Mr. Okafor I.G.

Date

(Head of Department)
______________

___________

Dr. Onwumere J.U.J

Date

(External Examiner)

iv

DEDICATION
With much gratitude to Almighty God for sparing my life to see this day,
his love, mercies and kindness for giving me strength and seeing me
through in all my endeavors. To him I owe all thanks. I dedicate this whole
work of study to the entire members of my family, whose love and
guidance has put me in this present position. They stood by me and I
stood tall! What more could I ask for?

ACKNOWLEDGMENT
My sincere and utmost gratitude goes to Almighty God on whose favour
and blessings, I have completed this study at Caritas University, Enugu.
I must express my appreciation to Nsofor, E.S, my supervisor, whose
enthusiasm for this work, encouragement, support and constructive
criticisms made, even the most difficult challenge feasible.
My endless appreciation also goes to my Head of Department Mr I.G.
Okafor and my Departmental lecturers, Prof. F.O. Okafor, Dr. S.M. Takon,
Mr. M.C. Ezeamama, and Mr. A.O. Nwadiubu, for their help and
encouragement in my academic pursuit.
Even in a hurry, I will not forget to appreciate my loving parents for their
endless support and seeing me through in this work; there are no words
that can express my heartfelt gratitude for laying down a solid foundation
for my education and ensuring that my dream of being well educated
turns into a reality. Special thanks to both of you for your love, blessings,
support and prayers.

vi

ABSTRACT
This study focuses on Electronic banking as an aid to commercial bank
operation. The main objective of this work is to identify how electronic
banking aids commercial banks in carrying out their daily activities. In
other to achieve this, primary data which exist inform of questionnaire
and oral interviews and secondary data inform of journals, articles and
books were used. Three hypotheses were formulated and analyzed with
simple percentage and Chi-Square statistical methods. Results show that
poor staff orientation, poor infrastructures and high cost of adoption are
factors that affect the effectiveness of electronic banking in aiding
operations in commercial banks. IT recommends that banks should
carryout more seminars and training for staffs to enlighten them on being
computer literate and on the use of electronic banking and also put in
place the appropriate facilities for its effectivity.IN conclusion the study
reveals that electronic banks plays a major role in aiding of operations of
commercial banks through execution of transactions at faster rate and
enhancing banks profitability and effectiveness.

vii

TABLE OF CONTENT
Cover Page -

Title Page

ii

Approval Page
Certification

Dedication
Acknowledgmen
ts

iv

Abstract
Table of
Contents
CHAPTER ONE:
INTRODUCTION
Background of the
1.1 Study
Statement of the
1.2 Problem
Objectives of the
1.3 Study
Research
1.4 Questions

vi
vi
i

1.5

Limitation of the Study Definition of

1.9 Terms
CHAPTER TWO: REVIEW OF RELATED
LITERATURE

2.1

1.6
1.7

Research Hypotheses
Scope of the
Study
Significance of the
Study

1.8

Theoretical Study

viii

iii

2.1.1 Meaning of Electronic

Banking
Origin of Electric
2.1.2 Banking
2.1.3 Benefits of e-banking
Component of e2.1.4 banking

2.1.5 Problems of e-banking

2.1.6 Solution to e-banking

2.1.7 Empirical Process of the Literature

6
-

9
1
0
1
0
Techniques of Analyses based on Key Research
CHAPTER THREE: RESEARCH
3.5 Analyses4.4 Questions
METHODOLOGY
Test of
CHAPTER FOUR: DATA PRESENTATION AND
4.5 Hypotheses
3.1 Research Design
Data
Sources of the
4.1 Presentation
3.2 Data
Population of the
4.1.2 Data Analyses
3.3 Study
Analyses of Key Research Question to Bank
i
4.2 Staf
x
3.4 Sample Size
Analyses based on data received from bank
4.3 customers
-

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

5.1
5.2
5.3

Summary of
FindingsConclusion
s
Recommendatio
ns
Bibliograp
hy
Appendix

38

38

39

40

46

LIST OF TABLES
Distribution of Respondents by
Tale 4.1
Gender
Table 4.1.2 Distribution of Respondents by
Age
Table 4.1.3 Distribution of Respondents According
to
Educational
Qualification
Table 4.1.4 Distribution of Respondents according
to

18

19

19

Working Experience
Table 4.1.5 Distribution of Respondents according to Position
held
Table 4.2.1 Ofering of E-banking
Services
-

20

Table 4.2.2 Electronic Banking Service Ofered Table

Difficulty in Assessing E-banking
4.2.3
Services
Table
Challenges of Electronic Banking
4.2.4
Table 4.2.5: E-banking replacing the Physical
Banking
Table 4.2.6 Efficiency of E-banking to its increasing of bank
services Table 4.2.7 Increased banks
profitability
Table 4.3.1 Distribution of Respondents by
Gender
Distribution of Respondent
Tale 4.3.2 Age
Table 4.3.3 Distribution of Respondents
according
Educational
Qualification
Table 4.4.1 Knowledge of Electronic
Banking
Table 4.4.2 Improved Service
Delivery
Table 4.4.3 Reduction of Waiting Time Experience in the
Banks

21

22

23

23

xi

20
21

24
-

24

25

25

26

27

27

28

Table 4.4.4 Use of E-banking

Products

28

29

Bank Operation
Table 4.4.7 Negative impact between Staf Orientation on Ebanking Table 4.4.8 Negative impact of poor infrastructural
facilities
on commercial bank
operations
-

29

Table 4.4.5 How often

Table 4.4.6 Negative Impact of E-banking on
Commercial

xii

30

31

CHAPTER ONE
INTRODUCTION
1.1

Background of the Study

The Nigerian banking industry has witnessed a lot of changes since the
mid 1980s and this is reflected in the increased volume and complexity of
operations, increased innovations and varieties in product and services
delivery.
These development have not only been technologically driven, but have
influenced more technological advances.
Information technology, which is the foundation of modern electronic
banking, through desktop computers and terminals, provide tools for
delivery of new products and innovations characterized by Automated
Teller Machines (ATM) and Credit Cards. Information technology (IT),
through electronic banking, is rapidly changing how banking is done all
over the world.
E-service is becoming more important, not only in the area of
determination of success or failure of electronic commerce (Yang, 2001),
but also in the provision of customers with superior experience with
respect to the interactive flow of information.
Recently, however, technology has had remarkable influence on the
growth of service delivery options (Dabhollear and Bagozzi, 2002).
According to (Dabhollear, 2000) he claims that when the customer is in
direct contact with the technology, there is a greater control such as with
internet banking.

However, if the absence of direct contact such as with telephone banking,

it is assumed that there is less perceived control by the customer during
this transaction. He suggests that direct contact with such technology
gives the customer a feeling of great control. He also goes on to say that
internet banking allows customers to perform task at time and places
convenient for them.
(Ovia, 1997, p.2) states that the new technology has created an unparallel
wired economy, transferring money from point A to point B using bits and
bytes through satellite transponders, fibre optic cables or regular
telephone lines.
The installation of customer friendly technology, such as Automated Teller
machines and internet banking service, as a means of delivering
traditional banking service, has become common as a way of maintaining
customer loyalty and increasing market shares. This technology is used by
banks to meet the competitive challenges posed by online banks as well
as a method of reducing the cost of producing services that were once
delivered exclusively by bank personnel (Joseph and Beatriz, 1997;
Akinyele, 2007).
Millions of Naira is being spent on information technology by bank, making
the use of electronic banking expensive, yet it is still suited in Nigeria
where transport, telecommunication and energy is inefficient and
inefective, hampering the movement of goods and service. The
willingness of banks to take up efficiency seeking technology depends just
as much on internal factors like cost of adoption and ownership of
infrastructure like telecommunication.

Al-Haari and Tony, (2006) describes that service equality impact on

customer satisfaction which in turn afects the financial performance of
the banks.
2

1.2

The Statement of the Problem

Since the inception of the use of electronic banking product in the late
1980s, banks have not made their presence felt much and this is arising
as a result of problems associated with the use of electronic banking
which includes:
1. Cost of ownership and Adoption: Cost of ownership or acquiring
electronic banking by the banks tend to e very expensive, as it
entails the acquisition of computers and telecommunication gadgets
which are usually brought from overseas, making the bank spend
more on the shipment and installation of these gadgets by the
experts, as a result, most banks could not aford E-banking.
2. Poor Orientation: The lack of knowledge about the use of the
computer by employees can also be said, as most bank stafs are
not computer literate which serves as a perquisite for e-banking
operation.
3. Lack of Infrastructure: The poor condition of power supply in the
country

as

well

as

the

unavailability

of

property

installed

telecommunication system are said to be great setbacks in the use

of electronic banking.
1.3

The Objectives of the Study

The main objective of these study includes the following:

1. To identify the extent to which cost of installation of e-banking has
impacted on banks operation.
2. To examine the extent to which staf orientation to e-banking has
aided commercial bank operations.

3. To examine the impact of infrastructural facilities on e-banking

operation in commercial bank.
1.4

Research Questions
1. How has the high cost of adoption and ownership of electronic
banking afected commercial bank operations?
2. To what extent is the orientation of staf on e-banking accountable
for commercial bank operation?
3. In what way can commercial banks improve on infrastructures of
electronic banking?

1.5

Research Hypotheses
1. High cost of electronic banking does not have a negative impact on
commercial bank operation.
2. There exist negative impacts between staf orientation on electronic
bank and commercial bank operations.
3. Poor infrastructural facilities do not have a negative impact on
commercial bank operation.

1.6

Scope of the Study

The scope of the research is limited to Enugu State. The commercial banks
in Enugu States are selected, namely:
1. First Bank of Nigeria Plc
2. Guarantee Trust Bank
3. United Bank of Nigeria

1.7

Significance of the Study

It is hoped that the finding and recommendation in this study would

include:
1. For customers: increased convenience, reduction in risk of cash
related crimes, access to credit and cheap access to banking
service.
2. For Corporations: Better access to capital due to shorter payment
processing times, increased efficiency of payment process and
accounting, reduced revenue leakage and efficiency in treasury
management.
3. For Government: increased tax collection, increased economic
growth.
4. For Banks: Efficiency through electronic payment processing,
reduced cost of operation and increased banking penetration.
1.8

Limitation of the Study

The study of this nature cannot be carried out without difficulties in the
process. One of the major limitations encountered in this work is the
scarcity of data and material; another is the problem of finance. A study of
this nature would require a lot of financial commitment in the area of the
researcher moving around and also in the area of the questionnaire
distribution.
1.9

Definition of Terms

ATM: Automated Teller Machine.

IT: Information Technology
E-banking: Electronic Banking

CHAPTER TWO
2.1

Theoretical Study

2.1.1 Meaning of Electronic Banking

The Oxford Learners Dictionary defines electronic banking as something
that is operated and based on electronics; it then goes further to define it
as a science and technology of electronic phenomena, devices and system
as in computer, radio, etc. It can therefore be deduced that the meaning
of electronic banking is the banking business which is carried out using
electronic devices and systems or done electronically so as to provide a
speedy and accurate financial service.
2.1.2 Origin of Electronic Banking
According to Anibuze (2006), electronic banking started in the mid 1980s
with technology drive product which has influenced more technological
advances. He further stated that what used to be termed electronic data
process has been transformed into electronic banking through information
technology.
Anibueze emphasized that this change in technology reflects on
equivalent transformation to use of computer from the use of paper flow
bringing about a reduction in the unit cost and replacement of the manual
process of writing with computer processing todays focus on electronic
product and service delivery. All these being in line with todays modern
international banking climate.

2.1.3 Benefits of E-banking

According to Aleen Greenspan (2007), the expected benefit of e-banking
consists of
the following, in the following order:
1. Improve customer service: Electronic banking enables banks provide
new, faster and better service to its customers, thereby, bringing up
the banks to international standards and enhancing competition
amongst the banks. These can be in the form of file transfer,
signature verification within minutes, etc.
2. Reliability of transaction: Electronic banking helps to ensure
accurate and timely transactions unlike when done manually, which
is prone to human errors that can cause setbacks.
3. Satisfy: Electronic banking technology ensures the safety of bank
dealing with its customers. Unsafe banking practice can cause huge
looses to the bank practice can cause huge looses to the bank,
especially in the cause of misrepresentation of account owners. This
banking technology (electronic banking) prevents this through its
signature verification preventing unauthorized access into the
computer.
4. Redundancy of Storage Space: Electronic banking technology helps
to reduce the use of files which are archaic, thereby, reducing use of
storage space.
The use of file could lead to loss of vital information about bank customers
either by mutilation or easy and unauthorized access to file and also
misplacement of important documents. This can be prevented through
storage of information in hard drive, diskettes and compact disc.

2.1.4 Component of E-banking

The electronic banking relies on a number of component or processor. The
following list includes many of the potential components seen in a typical
institution.
1. Website design and hosting
2. Firewall administration
3. Security management
4. Internet banking service
5. Automated decision system support
All these components work together to deliver e-banking service; each
component represents a control to consider. Through a combination of
intervals and outsourced solutions, management has many alternatives
when determining the overall system configuration for the various
component of the e-banking system.
However, the research presents only two variations.
Finally, one or more technology service providers can host the e-banking
application and numerous network components. In this configuration, the
institution service provider host the institution website, internet banking
server, firewall and intrusion detection system.
While the institution does not have to manage the daily administration of
these component system, its management and board remains responsible
for the contents performance and security of the e-banking system.
Secondly, the institution can host all, or a large portion of its e-banking
system, internally. In this case, a provider is not between the internet

access and financial

8

institution cote processing system. Thus, the institution was the day
to day
responsibility of system administration.
2.1.5 Problems of E-banking
The following problems can be seen to be faced by e-banking according to
Ernest
and Fadiya (2002). They include:
1. Power: The situation of power must be improved to accommodate
the smooth operation of financial activities.
2. Literacy: As noted, the literate rate in Nigeria is still low especially in
the Northern part of the country. Hence, business people prefer to
keep this money in their own vault while their banks are scattered
all over the country.
3. Prevalence: Another major concern would be the risk involved
because if the process is rushed and the economy looses confidence
in the system due to high level of fraudulent activities, it would be
devastating to the economy of the country (Nigeria).
4. Infrastructure deficit: The financial infrastructure in Nigeria is not
adequate to carry the load of a cashless society, ATM points of load
of sale system, mobile banking and other mediums have to be
dramatically expanded to touch, at least, 40% of the whole
economy before any meaningful efect can be felt.
2.1.6 Solution to E-banking
Addressing the problems associated with the e-banking, every bank
must take

consideration of the following recommendations:

1.

Adequate and well functioning infrastructural facilities must be in

place, more especially, the issue of electricity must be tackled by
the government to facilitate the usage of e-banking.

2.

To encourage Nigerians to patronize such services; the cost

should not be too high.

3.

Collective and individual analysis should be made of the various

e-banking channels to determine relative impact on the economy.

4.

Efective regulatory measures must be implemented at the

domestic and international level.

5.

There must be clear cut intention to purse either inflation

targeting goals or economic growth and development goals.

6.

The Central Bank must redesign its monetary policy framework in

such a way to recognize the efect of reduced production of
currency notes.

2.1.7 Empirical Process of the Literature

Olorunleke (2010) carried a study on technology and service quality in
banking industry: An empirical study of various factors in electronic
banking service. The research work was carried out through a cross
section survey design which questioned respondents on e-banking
services. The population of study mainly constituted of customers of
Oceanic Bank within Lagos and its environs. The respondents were
customers of banks using e-banking services (internet banking, mobile
banking and ATM). The data collected was analyzed by use of frequency,
percentage, mean and correlation analysis. The finding revealed that
secure

services

was

the

most

important

dimension,

followed

by

convenient location of ATM,

10

efficiency (not need to wait ability to setup accounts so that the

customers can perform transactions immediately).
Alewoye (2007), researched on the impact of information technology
investment on banking operations in Nigeria. The study was carried out
mainly on 10 insured pre-merger banks within the South-Western
geographical zone of Nigeria in which 8 banks were selected from Lagos
via a purposive sampling technique while 2 banks (old generation and new
generation banks) were picked from outside Lagos. The study developed a
production function of the form in line with Cobb Douglas function. This
was used to determine the nature of relationship between investment and
firms I.T productivity and profitability. Data for the study was essentially
from the financial reports of the selected banks, covering a period of 5
years. Questionnaires and scheduled interviews were administered on
head of system units and engineers in the selected banks. Two-stage leas
squares, ordinary least square and analysis of variance were used to
determine the nature of the relationship between I.T investments and
productivity, I.T investment and profitability. Results showed that while I.T
investment made positive contributions to gross marginal output and net
marginal output, I.T capital made zero and perhaps negative contribution
to output. However, investment in I.T labour was associated with a high
increase in the output of the banks given its elasticity values which were
104.189144 and 2.304. However, I.T investment made zero contribution to
and not significant to banks profit. Findings indicate that I.T investment
have increased productivity but have not resulted in supernormal business
profitability, rather, there were some evidence of small or negative impact
on profitability. It was concluded that while

11

modeling techniques used need to be improved, these results were

consistent with economic theory.
Idowu (2002), Alu (2002) and Adagun (2002) carried out a study on
Efect of
Information technology on the growth of Banking Industry in Nigeria. In
this study, the impact of I.T on banking industry in Nigeria is described. A
questionnaire was employed to collect data from customers at five major
banks in Nigeria on the extent to which customers believe that it exerts an
impact on banking services. The result of the study clearly indicates that
I.T has contributed immensely to the growth of banking industry in
Nigeria.
Audu (2010), carried out research on Efect of Electronic Banking
Facilities, Employment Sector and Age-group on Customers Choice of
Banks in Nigeria. In this study, both descriptive and inferential statistics
were used. The results show that no significant relationship between
electronic banking facilities and customers choice of banks and also on
the other hand, there exist a relationship, it was recommended that
management of Nigerian Commercial Banks should find the relevant
factors that are considered important by customers of various age group
of appropriately segmenting the target market.
Aboyade (2005) carried out research on Information and Communication
Technology in Nigeria: Revolution or Evolution. The paper emphasizes
that for the survival and relevance of higher education institutions in
Nigeria, ICT should be declared an institutional priority with adequate
funding and support. It finally concluded tremendous advancement in

computer technology and telecommunication as well as resultant radical

changes and advances in the techniques of data and
12

information processing storage and retrieval in Nigeria within a decade is

no doubt a revolution.
Ernest (2002) and Fadiya (2002) carried out a study on Cashless Banking in
Nigeria:

Challenges, Benefits and Policy Implications. In this study, he evaluated

the policies of Central Bank of Nigeria as well as profered valuable
recommendations on the execution of cashless banking in Nigeria. The
study presented significant recommendations: availability of sufficient and
well functioning infrastructural facilities, regular assessment of the
performance of cashless banking channels, inclusion, the shift towards a
cashless Nigeria seems to be beneficial though it comes with high level of
concerns over security and management of cost saving, resulting from its
implementation.
Agboola (2003) carried out study on Information Technology, Bank
Automation and Attitude of Workers in Nigerian Banks. The study
examines the attitude of workers to the application of information
technology recruitment and training of staf. The use of questionnaires
was adopted and response from 42 employees from six selected banks
revealed that application of information technology has far reaching efect
on personnel requirements.

13

CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1

Research Design

The study focuses on electronic banking as an aid to commercial banking

operations in Nigeria. The study made use of primary and secondary data
inform of questionnaire and interview in order to ascertain how electronic
banking aid the operation of commercial banks in Nigeria.
3.2

Source of the Data

The researcher made use of both primary and secondary sources of data
in gathering information for the study.
The primary sources of data collected by the researcher was through the
use of
1. Questionnaires
2. Oral and face to face interview
Secondary data exists inform of journals, articles, textbooks and
publications
3.3

Population of the Study

The population used in this study covers the staf of three selected banks
operating in Enugu. The population selected was designed to obtain
adequate and diverse view pertaining electronic banking and how it aids
operations of commercial banks in Nigeria. Oral interview was used to
ascertain the number of stafs in the selected banks which totaled to 117
staf as shown below:

14

First Bank Plc

50

United Bank of Africa

40

Guarantee Trust

27
117

Source: Field Survey,

2013
3.4

Sample Size

The statistical formula applied to determine the sample size of the study
is
n

N
1 + (Ne)

Where

n = Sample
size
N=
Population
I = constant
e = Sample error (5%)

(Yamani 1964 as in Onwumere

2005:120)
n=

117
1 + 117 (0.05)

n=

n=

= 90

It was on the sample size of 90 that questionnaires distribution was based.

15

3.5

Technique of Analyses

The data collected were analyzed with chi-square and percentages to

ascertain the impact of electronic banking on commercial banks
operation.
Response from the questionnaire would be analyzed and tested using chi2

square (X ) at 5% of significance.

16

CHAPTER FOUR
DATA PRESENTATION AND ANALYSES
4.1

Data Presentation

This section of the research is to test the data collected based on electronic
banking
as an aid to commercial bank operations in Nigeria.
Bank

Number

of Number

questionnaires returned

Number not Percentage

returned

First Bank

30

26

34

UBA

30

26

34

Guarantee

30

25

32

90

77

13

100

Data Analyses

4.1.2

Analysis of data is based on the returned questionnaires.

In calculation chi-square, the level of significance is given as 5% or 0.05
with degree of freedom in the contingency table given by.
DF = (R 1) (C 1)
Where
R = the number of row
C = the number of column
2

To calculate chi-square (X ) the formula is

17

 = (Oi - i)

i
Where

= Summation
Oi = Observed value
i = Expected frequency

To get the expected value , the following formula is used:

i =

The data analysis likewise was based on the answer to key research
questions received from the various bank stafs. The key questions will ne
analyzed by the use of simple percentage analysis base don data from
bank staf.
A total of 90 questionnaires were used in the study and distributed to 3
banks while 77 were returned answered, 13 were lost. However, the
analysis

of

the

questionnaires

will

be

based

on

the

returned

questionnaires.
77 questionnaires using simple percentage and hypothesis testing will be
done using chi-square.
Presentation of Demographic Characteristics
Tale 4.1

Distribution of Respondents by Gender

Gender

Frequency

Percentage

Male

12

64

Female

65

36

Total

77

18

100

The above table shows that 12% of the respondents are male while 5% of
them are
female, thus, there are more of male than females.
Table 4.1.2 Distribution of Respondents by Age
Age

Frequency

Percentage

20 30

25

25

31 40

25

46

41 50

37

29

77

100

51 and above
Total
Source: Field Survey,
2013

The above table shows that 25% of the respondent are between the age
bracket of 20 30 years, 46% shows that they are 31 40 years, 29% of
them fall within the ages of 41 50years. Therefore, this goes to show
that there were more respondents between ages 31 40years.
Table 4.1.3 Distribution
of

According to
Respondents Educational

Qualification
Qualification
HND/Bs.C/BA
MSC/MBA/MA
Ph.D
Total
Source: Field Survey,
2013

Frequency
10
32
35
77

Percentage
79
11
10
100

The above shows that the respondent holding a Ph.D have 5% while
majority of 79% of the respondents have HND/Bs.C/BA, 11% of the
respondents have MSC/MBA/MA.

19

Table 4.1.4

Distributio
n
of Respondents according to Working
Experience

Number of Years

Frequency

Percentage

1 5

27

25

6 10

25

46

1
1 15

25

29

1
6 - 20

77

100

Total
Source: Field Survey, 2013

The above information shows that 25% of the respondents have a work
experience from 1-5yrs, 46% of them have worked from 6 10years, while
29% of them have worked for 11 15uears, therefore a majority of the
respondents have worked between 6 10years.
Table 4.1.5 Distribution of Respondents according to Position held
Position

Frequency

Percentage

Branch

27

36

Head of Acct/Admin

25

32

Supervisor

25

32

Total

77

100

Source: Field Survey,

2013
From the above table it can be deduced that 36% of the respondents are
branch managers, 32% are held of account/admin, while the others 32%
are supervisors. Therefore, majority of the questionnaires were answered
by the branch managers.

20

4.2

Analyses of Key Research Questions to Bank Staffs

The analysis of data collected will be based on the response from the
returned
questionnaire from the bank staf.
Question 6: Does your bank offer electronic banking service
Table 4.2.1 Offering of E-banking Services
Options

Frequency

Percentage

Yes

77

100

No

77

100

Total
Source: Field Survey,
2013

From the above, it can be deducted, that the banks visited ofer electronic
banking
services.
Question 7: What Electronic Banking Product is your bank
Associated with?
Table 4.2.2 Electronic Banking Service Offered
Decision

Frequency

Percentage

Electronic purse

Internet banking

22

PC banking

13

11

ATM

24

61

Telephone banking

18

21

77

100

Others (specify)
Total
Sources: Field Survey,
2013

21

From the above analysis 7% of the banks are associated with internet
banking, 11% of the banks ofer PC banking, 61% of them are associated
with the use of ATM, 21% ofers telephone banking, overall, the majority
of the banks ofered make use of ATM as an e-banking product.
Question 8: Most Customers find it difficult to access E-banking
services e.g. ATM
Table 4.2.3 Difficulty in Assessing E-banking Services
Decision

Frequency

Percentage

Strongly agree

25

11

Agree

25

75

17

14

77

100

Undecided
Disagree
Strongly disagree
Total
Source: Field Survey,
2013

The table shows that 11% of the respondents strongly agree that most
banks customers find it difficult to access e-banking services e.g. ATM
75% of the respondent agreed to the question while 14% of the
respondent completely disagreed.

22

Question 9: What are the Challenges of Electronic Banking

Table 4.2.4 Challenges of Electronic Banking
Decision
Technology

Frequency
35

Percentage
46

Manpower

25

18

Security

17

36

Total

77

100

Source: Field Survey,

2013
The above information shows that 46% of the respondents are of the view
that technology is a major challenge facing e-banking in Nigeria, 18% are
of the opinion that manpower is a major challenge and 36% are of a
diferent view that security is the major challenge facing e-banking in
Nigerian environment.
Question 10: E-banking has been able to replace the Physical
Branch Banking
Table 4.2.5: E-banking replacing the Physical Banking
Decision

Frequency

Percentage

Strongly agree

55

39

Agree

12

61

Undecided

Disagree

Strongly disagree

77

100

Total
Source: Field Survey,
2013

23

The table above shows that 39% of the respondents strongly agree that Ebanking has been able to replace the physical branch banking while 61%
of the respondents agree to the above question.
The Adoption of E-banking his lead to the
increased
efficiency in the Banking
Services
Efficiency of E-banking to its increasing of bank
services

Question 11:

Table 4.2.6
Decisio
n

Frequency

Percentage

Strongly agree

25

64

Agree

25

25

Undecided

13

11

Disagree

14

14

Strongly
disagree

77

100

Total
Source: Field Survey, 2013
Question 12:
profitability

Electronic banking has increased banks

Table 4.2.7 Increased banks profitability

Decision

Frequency

Percentage

70

39

Agree

61

Undecided

Disagree

Strongly disagree

77

100

Strongly agree

Total
Source: Field Survey,
2013

24

From the above table, 39%of the respondents strongly agree that ebanking has increased banks profitability while 61% of the respondents
agreed that e-banking has increased banks profitability.
4.3

Analysis based on data received from banks customers

A total of 20 questionnaires were distributed to 20 bank customers while

17 have returned with 3 missing, the analysis of the data will be based on
the returned questionnaires.
Presentation of Demographic Characteristics
Table 4.3.1 Distribution of Respondents by Gender
Gender

Frequency

Percentage

Male

40

57

Female

37

43

Total

77

100

Source: Field Survey,

2013
The above information shows that 57% of the respondents are male 43% of
them
are female thus, there are more males than female.

25

Tale 4.3.2 Distribution of Respondent Age

Age

Frequency

Percentage

20 30

35

30

31 40

25

43

41 50

17

10

77

100

51 and above
Total
Source: Field Survey,
2013

The above table shows that 80% of the respondents are between the age
of 20 30 years, 10% of them are between the age bracket of 31 40
years while the remaining 10% of them are between 41 50years.
Therefore, we have more respondent between the age bracket 20 30
years.

Table 4.3.3

Distribution of Respondents
Qualificatio
n

Qualification

according
Educational

Frequency

Percentage

SSCE/GCE

25

17

OND/NCE

25

13

MSC/MBA

13

Ph.D

Total

77

100

B.Sc/BA

Source: Field Survey, 2013

26

The above table shows that 17% of the respondent hold a SSCE/GCE
certificate, 3% of the respondent have OND/NCE, 61% of the respondent
have B.Sc/BA/HND, 13% of the respondent have B.Sc/BA/HND, 13% of the
respondents have MSC/MBA degrees while non of the respondents have a
Ph.D.
4.4

Analysis based on Key Research Questions

The analysis of data collection is based on the response from returned

questionnaires.
Question 13:

Do you know about Electronic Banking

Table 4.4.1 Knowledge of Electronic Banking

Options

Frequency

Percentage

Yes

77

100

No

77

100

Total
Source: Field Survey,
2013

The table above shows that 100% of the respondents know about ebanking.

27

Question 14: E-banking has led to improved service deliver in

your bank

Table 4.4.2

Improved Service Delivery

Decision

Frequency

Percentage

Strongly agree

10

53

Agree

67

47

Undecided

Disagree

Strongly disagree

77

100

Total
Source: Field Survey,
2013

The table above shows that 53% of the respondents strongly agree that Ebanking has led to improved service delivery in banks while 47% of the
respondents agree to the above question.

28

Question 15:

E-banking has led to the Reduction of Waiting

time
Experience of waiting time

Table 4.4.3

Reduction of Waiting Time Experience in the Banks

Decisio
n

Frequency

Percentage

Strongly agree

40

57

Agree

25

40

Undecided

12

77

100

Disagree
Total
Source: Field Survey, 2013

From the above, 57% of the respondents strongly agree that e-banking
has lead to the reduction in waiting time experience in banks. 40% of the
respondents agree to the above question while 3% of the respondent
undecided.
Question 16:

Have you been making use of E-banking products

Table 4.4.4 Use of E-banking Products

Options

Frequency

Percentage

Yes

77

100

No

77

100

Total
Source: Field Survey,
2013

The above information shows that 100% of the respondents have been

making use
of E-banking products very often 37% and 7% less often.

29

Question 17:

If yes, how often?

Table 4.4.5 How often

Decisio
n

Frequency

Percentage

Very often

30

56

Often

25

37

Less often

22

Not at all

77

100

Total
Source: Field Survey, 2013

From the above table, 50% of the respondents strongly agree to the
question while 20% agree, 20% are undecided and 10% disagree to the
above question.
Question 18: High Cost of Electronic Banking does have a
Negative Impact on Commercial Bank Operation

Table 4.4.6

Decisio
n
Strongly agree
Agree
Undecided
Disagree

Impact of E-banking
Negative on
Operatio
n

Commercial
Bank

Frequency
50

Percentage
50

10

20

20

10

10

Strongly
disagree
Total

77

100

Source: Field Survey,

2013

30

From the above table, 20% of the respondents strongly agree to the
question, while 20% agree, 40% are undecided and 20% disagree of the
above question.

Question 19:

Negative Impact does exist between staff

Orientation on
Electronic Banking

Table 4.4.7

Negative impact between Staff Orientation on Ebanking

Decisio
n

Frequency

Percentage

Strongly agree

40

20

Agree

10

20

Undecided

20

40

Disagree

20

Strongly
disagree

77

100

Total
Source: Field Survey, 2013

From the table above, 20% of the respondents strongly agree to the
question, while 20% agree, 40% are undecided and 20|% disagree to the
above question.

31

Question 20:

Table 4.4.8

Poor infrastructural facilities do have a negative

impact
on commercial bank
operations.
Negative impact of poor infrastructural
facilities on
commercial bank operations

Decisio
n

Frequency

Percentage

Strongly agree

40

20

Agree

10

20

Undecided

20

40

Disagree

20

Strongly
disagree

77

100

Total
Source: Field Survey, 2013
4.5

Test of Hypothesis

Hypothesis 1:
H0: High cost of electric banking does not have a negative impact on
commercial bank operation.
H1: High cost of electric banking does have a negative impact on
commercial bank operation.

32

Decision

Frequency

Percentage

Strongly agree

50

50

Agree

10

20

20

10

10

77

100

Undecided
Disagree
Strongly disagree
Total

Response option

Oi

Oi i

(Oi - i)2

(Oi - i)
i

Strongly agree

50

15.
4

34.6

1197.16

77.738

Agree

10

15.
4

-5.4

29.16

1.8935

Undecided

15.
4

-8.4

70.56

4.5231

Disagree

10

15.
4

-5.4

29.16

1.8935

Strongly disagree

15.
4

-15.4

237.16

15.203

Total

77

To determine the critical value of X

101.2511

X = (Oi - i)

i
Where

X = chi-square value
Oi = observed frequency
33

i = expected frequency
= summation sign
Level of significance = 0.05
Degree of Freedom = (R 1) (C 1)
(5 1) (2 1)
41=4
The calculated leave is 101.2511 while the critical value X
0.05. Chi-square table is 9.49. The calculated value of X
the table value X
2

(X

for 4.dF at

is higher than

> X ).

Decision
2

X computed is 101.2511 and is greater than the chi-square table value at

5% level of significance using four (4) degree of freedom (v) which is 9.49,
based on the decision rule, we reject the null hypothesis.
In other words, we access the alternative hypothesis H1, which states that
high cost of electronic banking does have a negative impact on
commercial bank operation.
Hypothesis 2
H0: Negative impact does not exist between staf orientation on electronic
banking.

H0: Negative impact does exist between staf orientation on electronic

banking.

34

Decision

Frequency

Percentage

Strongly agree

40

20

Agree

10

20

Undecided

20

40

Disagree

20

Strongly disagree

77

100

Total

Oi

Oi i

(Oi - i)2

(Oi - i)
i

40

15.
4

24.6

605.16

39.296

Agree

10

15.
4

-5.4

29.16

1.894

Undecided

20

15.
4

-4.6

21.16

1.374

Disagree

15.
4

-8.4

70.56

4.581

Strongly disagree

15.
4

-15.4

237.16

15.203

Total

77

Response option

Strongly agree

To determine critical value of X

2

X = (Oi - i)
i

62.348

Where

X = Chi-square value
Oi = Observe frequency

35

i = Expected frequency
= summation
Level of significance = 0.05
D.F = (R 1) (C - 1)
1=(5 1) (2 1)
2=4 1
3=4
2

The calculated value is 62.348 where the critical value X for 4d.F at 0.05
2

chi-square table is 9.49. The calculated value of X is higher than the table
value X

(X

>X )

Decision
2

X computed as 62.348 and is greater than the chi-square table value at

5% level of significance using four (4) degree of freedom (v) which is 9.49,
based on the decision rule, we reject the null hypothesis.
In other words, we access the alternative hypothesis H1 which States that
negative impact does not exist between staf orientation on electronic
banking.
Hypothesis 3:
H0: Poor Infrastructure Facilities does not have a negative impact on
commercial bank operation.
H1: Poor Infrastructure Facilities does have a negative impact on
commercial bank operation.

36

Decision

Frequency

Percentage

Strongly agree

40

20

Agree

10

20

Undecided

20

40

Disagree

20

Strongly disagree

77

100

Total

Response option

Oi

Oi i

(Oi - i)2

(Oi - i)
i

Strongly agree

40

15.
4

24.6

605.16

39.296

10

15.
4

-5.4

29.16

1.894

Undecided

20

15.
4

-4.6

21.16

1.374

Disagree

15.
4

-8.4

70.56

4.581

Strongly disagree

15.
4

-15.4

237.16

15.203

Total

77

Agree

To determine the critical value of X

2

X = (Oi - i)

i
Where

X = Chi-square value

62.348

Oi = Observe frequency

37

i = Expected frequency
= summation
Level of significance = 0.05
D.F = (R 1) (C - 1)
1=(5 1) (2 1)
2=4 1
3=4
2

The calculated value is 62.348 where the critical value X for 4d.F at 0.05
chi-square table is 9.49. Based on the decision rule, we reject the null
hypothesis.
In other words, we accept the alternative hypothesis H1 which states that
poor infrastructural Facilities does have a negative impact on commercial
bank operation.

38

CHAPTER FIVE
SUMMARY OF THE FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
5.1

Summary of the Findings

This study was carried out in order to assess electronic banking as an aid
to commercial banking operation. The general introductory aspect sheeds
more light on the essentials of electronic banking. Many literature and
academic publication from diferent authors on e-banking products were
used in the course of this research. The researcher, based on the analysis
of returned questionnaires, evidence was shown that electronic banking
plays a major role in aiding of commercial bank operations in Nigeria, as it
goes a long way in improving banks efficiency and competitiveness so
that the existing and potential customers can benefit from a greater
degree of convenience in efecting transactions.
5.2

Conclusions

Based on the summary of the major findings, the following conclusions

were drawn:
1. Through e-banking transactions are typically profound and executed
at a faster rate.
2. The efectiveness of e-banking has enhanced banks profitability
and efective
3. The electronic banking guidelines introduced by the CBN strongly
helped in efective e-banking system. Withdrawals can be done
anywhere at anytime using any ATM machine, customers cannot
withdraw more than some certain amount to the allow other
customers have access to cash and money can be transferred from

one place to another through electronic means.

39

4. Electronic banking has improved the banker/customer relationship

by rendering efective services throughout the week as customers
can now have assess to their accounts outside working hours to
make withdrawals to attend to their needs.
5.3

Recommendations

In view of the finding from the research work, the following ways were
recommended through which e-banking can aid commercial banking
operations in Nigeria:
1. All banks should utilize information technology to render services
that meet the genuine need of customers and if there is a change in
the customers lifestyle, the bank should change along rapidly.
2. Given that e-banking facilities depend largely on electric power
supply, it becomes difficult to maintain computer and other
information technology equipment used by the bank. Hence, the
government

and

private

sector

investment

should

focus

on

improvement that would complement the current power supply.

3. All bank should ensure that seminars and workshops are carried out
regularly to enlighten the staf in the banks on the advantages of
being computer literate and as well as training of the stafs on how
to make use of the computer.
4. Proper infrastructures should be put in place by the banks to ensure
the

efectiveness

of

electronic

telecommunication and power.

40

banking

which

includes

5. Banks should conduct appropriate risk analysis and due diligence

prior to selecting an e-banking service provider.
6. Regulatory authorities like the Central Bank of Nigeria (CBN) must
stipulate to follow to avoid making Nigerian banks became a
dumping ground for outdated technological infrastructures.

41

BIBLIOGRAPHY
Adewoye, J. O. (2007). Impact of Information Technology Investment on
Banking Operation in Nigeria. International Business Management 1
(4): 70-78.
Agboola, A. A. (2003). Information Technology, Bank Automation and
Attitude of Workers in Nigerian Banks. Journal of Social Science 7
(3):215-222.
Audu, A. (2010). Efect of Electronic Banking Facilities Employment Sector
and age group on customer choice of bank in Nigeria. Journal of
Interest Banking and Commerce. Vol.15,No 1.
Alangrenen, S. (2007). The Age of Turbulence: Adventures in a New
World.
Al-Hawari, M. and Tony, W. (2006). The Efect of Automated Service
Quality on Australian Bank Financial Performance and the Mediating
Role of Customer Satisfaction. Market Int. Plann 24:127 147.
Anibueze, (2006). Banking Practice in Nigeria. Lagos: Hiymark Educational
Publisher.
Dabhollear, P. A. (2000). Technology in Service Delivery Implication for
Self Service and Service e-support. Bevely Hills, California: Sage
Publications.
Dabhollear, P. A. and Bagozzi, R. (2002). An Attitudinal Model of
Technology based self service. Journal on Academic Market Science.
30: 184-201.
Ernest, S. and Fadiya, B. Cashless Banking in Nigeria: Challenges, Benefits
and Policy implication. European Scientific Journal, June Edition, Vol.8,
No.12.
Idowu, P. A. (2002). The Efect of Information Technology on the Growth of
Banking Industry in Nigeria. Journal of Social Science Vol.12:18-20.
Joseph, A. and Beatriz, J. (1997). Service Quality in Education: A Student
Perspective. Qual Assurance, Education 5:15 21.
Ogunsola, L. A. and Aboyade, W. A. (2005). Information and
Communication Technology in Nigeria Revolution or Evolution.
Journal of social Science, 11 (1): 7-14.
Oloranleke, K. (2010). Technology and Service Quality in Banking Industry.
International Business Management 4 (4): 209-221.
Ovia, J. (1997). New Technologies and Performance Enhancement.
International Business Journal, Vol. 2: 17-20.
Yang, Z. (2001). Consumer Perception of Service Quality in Internet based
Electronic Commerce. Proceedings of the EMAC Conference, May 8
11, Beignes, p.110 120.

42

APPENDIX
QUESTIONNAIRE FOR BANK STAFF
Instruction: Please Tick in the Appropriate Box
1. What is your sex?
1. Male
2. Female
2. What is your age (in years)?
1. 20- 30
2. 31 40
3. 41 50
3. What is your level of education?
1. HND/BSC
2. MSC/MBA/MA
3. Ph.D
4. What is your work experience (in years)
1. 1- 5
2. 6 10
3. 11 15
4. 16 20

5. What is your position?

1. Branch Manager
2. Head of Account
43

c. Supervisor
6. Does your bank ofer e-banking services?
1. Yes
2. No
7. What e-banking product is your basic associated with?
1. Electronic purse
2. Internet banking
3. PC banking
4. ATM
8. The development of e-banking in Nigeria is very low
1. Strongly agree
2. Agree
3. Undecided
9. E-banking does improve the banker/customer
relationship
1. Strongly agree
2. Agree
3. Undecided
10. E-banking has been able to replace the physical branch
banking

1. Strongly agree
2. Agree
3. Undecided
4. Disagree
5. Strongly disagree
11. E-banking has increased bank profitability

44

1. Strongly agree
2. Agree
3. Undecided
4. Disagree
5. Strongly disagree
12. Such increase efficiency has led to overall cost reduction for bank
1. Strongly agree
2. Agree
3. Undecided
4. Disagree
5. Strongly disagree
13. The adoption of e-banking his contributed to improvement of bank
services?

1. Strongly agree
2. Agree
3. Undecided
4. Disagree
5. Strongly disagree
14. E-banking has increased back profitability
1. Strongly agree
2. Agree
3. Undecided
4. Strongly disagree
5. Disagree
15. Nigerian banks lack the infrastructural?
45

1. Yes
2. No

46