THE IMPACT OF ELECTRONIC BANKING ON COMMERCIAL BANKS OPERATIONS

ABSTRACT

This study was on electronic banking and the purpose of carrying out this research was to assess the impact of electronic banking on commercial banks operations.

In the review of related literature. I covered such areas as the meaning of electronic banking, origin of electronic banking the meaning of computers, the relevance banking products and its relevance to electronic banking.

Finally, I talked on problem and solutions associated with electronic banking.

My research design was on secondary data approach based on the findings of this study conclusions and recommendation were drawn.

Finally, it is the intention of the researcher to provide a document which will apart from satisfying the academic requirement of the institute of management and technology (IMT) Enugu for the award of the ordinary national Diploma (OND) in banking and finance will also serves as a guide to prospective investors and financial institutions that may wish to invest in electronic banking.

CHAPTER ONE INTRODUCTION

1.1BACKGROUND OF STUDY

The Nigeria banking industry has witnessed a lot of changes since the mid 1980’s and this is reflected in the increased volume and complexity of bank operations, increased innovations and varieties in product and service delivery. These development have not only been technology  driven but have influenced move technological advances.

Information technology which is the foundation of modern electronic banking through desktop computers and terminals provide the tools for delivery of new products and innovations characterized by ATM’s cash dispensers, credit and cash card, information technology through electronic banking is  radically changing how banking is done all over the would. The volume and speed of banking transactions has improved tremendously as a reject of the growth of electronic banking which has created a lot of changes and business opportunities for banks. What used to be termed electronic data processing has been transformed into electronic banking through information technology. The change in terminology reflects on equivalent transformation of the use of the computer  from automation of paper flow to reduction in unit cost the replacement of manual with computer processing to today’s focus on electronic product and service delivery which has become the underlying ethos in today’s banking with a shift in adopting to a  consumers market. Electronic banking through IT has created and unparalleled wired economy. The transfer of money from point “A” to point “B” has resulted in turning the actual money into bits and bytes through satellite, fibre optic, cable or regular telephone lines. Aladesulu (1998).

Banks waste millions of naira on information technology investment and so as a result, electronic banking is expensive but is well suited in Nigeria where transport, telecommunications and energy is still inefficient and ineffective, hampering the movement of goods and services. Yet the willingness of banks to take up efficiency seeking technologies depends just as much on internal factors like costs of adoption and ownership as on external ones like the availability of infrastructure such as telecommunication.

Despite this poor service is still the bane in the banking industry characterized by centralization of decision making red tape bureaucracy etc. electronic banking and IT is supposed to replace the customer’s file phenomena but the file still provides the basis of today’s banking. The file still travels the length and breath of the bank before decisions are made such poor delivery service has contributed to a lot of economic activity outside the bank. Aragba-Akpore (1999).

Most of “IT” systems and trainings are imported from overseas without  consideration for the peculiarities of the local environment.