THE ROLE OF ELECTRONIC BANKING SYSTEM ON THE PERFORMANCE OF FINANCIAL INSTITUTIONS (A CASE STUDY OF SKYE BANK PLC)
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
It is an undisputable fact that banking operations in Nigeria is undergoing tremendous changes. The current trends in the development of science and technology have indeed influenced and enhanced the activities of banks and other financial institutions in Nigeria significantly.
The historical review of banking operation in Nigeria according to kyari (2012) stated clearly that “up till the second half of the 1980s, banking in Nigeria were devoid of any electronic device”. This implies that banking operations were mostly manually carried out, therefore no doubts that manual activities in banks and financial institutions were full of problem with attendant low productivity. But today, the reverse is the case.
The present unprecedented high demand for bank service by both public and private sectors of the Nigerian economy has necessitated most banks in Nigeria to embrace the introduction and adoption of computer technology. Infact, the benefit derived by the banks from this era of computer technology and electronic information age are enormous. For one, this era has opened various channels through which product and service of banks can be offered to customers within a short space of time and at a minimal cost. Again, it is capable of reducing but not erasing completely the age-long barrier in the way banks used to communicate and meet the demand of their customers.
This involve the introduction of computer technology and the electronic information devices into the banking operation in Nigeria, bankers are in better position to provide better quality service to the banking public, sustain their loyalty and offer them their products and services when and where they want them.
It is expected and hoped that the finding of this study would contribute to know the performance of financial institution on electronic banking and the other revenant issues.
Skye bank Plc has evolved into one of the top financial institutions in Nigeria, after it very seamless consolidation exercise in 2006.
It operates as a group that provides facets of financial products and services powered by a purpose built technological framework that supports the service delivery process to customers.
With a cumulative wealth of experience that spans over 50 years, Skye Bank is historically one of the oldest banks in Nigeria and West Africa. We are quoted on the Nigerian stock exchange with over 450,000 deliverse shareholders with a shareholding structure that puts no more than 5% in the control of any one individual or company.
In realization of numerous benefits which banks could derive from era of computer technology and electronic information age the Skye bank of Nigeria plc, has been forefront to embrace the electronic banking system. The research is centered on role of e-banking on the performance of financial institution.
Available records show that banks and other financial institutions were among first commercial users of electronic data processing device in their operations.
According to Adalesulu (2015) “as the volume of banking transactions increased notably cheques and related document”, it becomes apparent that the manual and accounting machines were inadequate.
This situation according to him was further escalated by the introduction and promotion of personal checking of account.
In order to solve most of their paper work problems, most banks and financial institutions have been in the forefront in adopting automated data processing equipment.
Currently, banks are developing computer system to handle domestic and international accounting operation. Banks are using computer and other electronic device extensively for personal record keeping, budgeting, commercial record money market, foreign exchange and funds transfer.
The problem involved in this study is to examine the role of electronic banking on the performance of financial institution with special reference to Skye Bank of Nigeria plc.
- To examine if electronic banking system increase productivity in the Nigeria banking system.
- To examine if electronic banking system leads to better customer Satisfaction.
- To find out if electronic banking operations encourage fraudulent practices in the Nigeria Banking System.
- To find out if electronic Banking Operation encourages redundancy which may lead to mass retrenchment.
The following research questions were formulated to enable the researcher examine issues raised in the objective of study.
- Does electronic banking system increase productivity in the Nigeria banking system?
- Does electronic banking system lead to better customer satisfaction?
- Can electronic banking operations encourage fraudulent practices in the Nigeria banking system?
- Does electronic banking operation encourages redundancy which may lead to mass retrenchment?
- SIGNIFICANCE OF THE STUDY
This study is very significant in a number of ways namely
- The study will provide information to banks and others financial institutions which have not yet embraced the modern information technology in the operation.
- It will spotlight the banking operation of the Skye Bank of Nigeria plc, since it will use the bank as a case study.
- The study will also provide awareness to the numerous banking public on the various banking service rendered by the Skye Bank of Nigeria plc.
- Moreover, it will provide a background for further education research studies.
- SCOPE AND LIMITATIONS OF THE STUDY
The study covers Skye Bank of Nigeria plc, the limitation of this study are in three main areas namely:
Finance: money required to prepared ,distributed and collect back the questionnaires from respondents was not easily available .This posed a serious hard time to the research and hence because a limiting factor to the full realization of the success of this work.
Time: the research experienced time constraint, this was due to the fact that this research work carried out alongside with academic activities and other programmes within a very short time frame. The nevertheless stool as one of the impeding factors to the full achievement of the success of this work.
Conservation of Information by the Respondents:
Most respondents were conservative regarding giving out of information required in the course of this study. And to this fact, the researcher could not have enough information for the purpose of this study. This in-turn limit the scope of the study.
1.7 Organization of the Study
This work comprises of five chapters. Chapter one gives an overview of the study, it highlights the background of the study, statement of the problem, the objectives of the study, the research questions, the significance of the study, scope and limitation of the study, organization of the study and the definition of terms.
Chapter deal with the review of related literature in this chapter effort is made in reviewing the works of renowned scholars and authors. It is the theoretical framework of this research work. Chapter three captures the research methodology, it encompasses the restatement of the research questions, design of the study chapter four focuses on Data presentation, analysis and interpretation.
