The Impact of Internet Banking System on Nigerian’s Banking Environment

The Impact of Internet Banking System on Nigerian’s Banking Environment
The Impact of Internet Banking System on Nigerian’s Banking Environment

Abstract: This study aimed at investigating The Impact of Internet Banking System on Nigerian’s Banking Environment. The study used survey research design. A structure questionnaire such as interview and personal interview was used to collect data from a sample population of thirty five (35) staff in the selected bank, while sample size of twenty (20) was used. Three research questions and two research hypotheses were formulated to guide the study. A statistical tool of Pearson Product Moment Correlation Co-Efficient (PPMCC) was used to test the hypotheses. The result showed that independence variable, internet banking system has a significant role in the Nigerian banking environment. Consequently, findings observe that the impact of internet banking system has a significant role in the growth and development of the Nigerian banking industry.

The study therefore recommended that, banks’ customers should be educated in how to use internet product effectively and the Nigeria government should also enact laws that will govern the internet banking which will not allow unfair and descriptive trade practices by the supplier and unauthorized access by hackers.


The Impact of Internet Banking System on Nigerian’s Banking Environment



1.1     Background to the study

In Nigeria, banking industries have witnessed a lots of challenges due to the increase in the awareness and utilization of banking service, this makes the staff to strengthen and branches of most Nigerian banks in spite of the adjustments, these banks cannot satisfy the demands, some transactions become on manual and physical presence of their customers. On the other hand, banking system now brought a relief to the increase volume and complexity of banking operations and services delivering. With the experimentation of internet technology, the banking system with electronic fund arrangement were made with banks using micro-computer to pay some bills that is owned by big departmental stores, and this make various companies to become computerized, with the practice of internet services to delivering the mechanism to their customers  to embrace with it.

Consequently, this point makes Sabi (2014) to state that, the advent of internet technology in our banking environment has revolutionized the way business and services are provided by companies, and banking industry all over the world. Internet banking also provides innumerable service innovation for their customers. The technological change has brought the rapid transaction of information…with and easy way for banking products that which also enhances the customers’ access, and awareness (George and Gireeshkumar, 2012).  In the same vein, the impact of internet banking has advantages for the growth of banking industry in Nigeria and all over the world. Internet banking system has become one of the premier channels for institutions in the financial sector I conducting business. On the other hand, the speed of conduction personal and commercial activities with their customers’ increased.

The financial activities can replicate the traditional activities, which take place in a bank over the internet. This shift to online transitions, lower the operational overhead cost for the financial institutions. The reason for this cost savings is the automation of processing customers, and financial institution, banking environment will consequently take advantage of this, and that is the reasons why people now are adopting the internet banking for their safety of funds. For instance, studies have shown that, Nigeria is one of the countries that are believed to be largest internet users as at the year, 2000. The estimated to have risen to 350,000… meanwhile, information technology through banking system is radically changing how banking industry is dine all over the world, and Nigeria is not an exception.

The Impact of Internet Banking System on Nigerian’s Banking Environment

1.2     Statement of the problem

Banks since the inception of the use of internet banking system in the late 1980’s, these banks have not made their presence felt much. Consequently, here are the results of the problems associated with the use of internet banking system.  It includes the following; poor infrastructures in the Nigeria banking industry, lack of security in the Nigeria banking environment, lost of ownership and adaptation, and poor orientation (illiteracy)

Poor Infrastructure in the Nigeria Banking Environment

Poor infrastructure is one of the major challenges facing the Nigeria banking industry today. For instance, World Bank data indicated that, there are only six (6) computers and four (4) mainline telephone lines per thousand people, while electricity supply is sporadic and inefficient.  

Most importantly, Nigeria has a very low internet penetration, with not less than one internet services…provided for thousands of people.

Lack of Security in the Nigeria Banking Environment

The second challenges facing by the Nigeria banking industry is lack of security. For instance, research carried out in Africa shows that, companies considered the biggest obstacle of used by internet for financial transaction due to lack of security. No doubt, many companies are concerned about the integrity of financial information that travels over the internet…and would rather accept the efficiencies and income of a manual system that economy and issue of trust in such a way that even cheques are dare. Recently, the Nigeria marketers has witnessed the development internet purse products such as; value and the smart pay cards designed to move the economy…although, it is hoped that they will eventually help the importance of cash in the society.

Based o this, it is therefore clear that, such an environment consumers will be skeptical on a chick in computer screen will result in a computer financial transaction.

Cost of Ownership and Adaptation

Internet banking is very expensive because, is entails the acquisition of computers, telecommunication, and gadgets. In the same vein, banks spend lots on these products because of the exchange rate between the naira and dollar.

Poor Orientation (Illiteracy)

In spite the digital world today, so many people are still ignorant of services and benefits available to them with the use of internet banking products. For instance, the benefits are that, it is fast, safe and reliable services.

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Peter Hezekiah Lawson (Sir Pee). The CEO of A reputable researcher, Web Developer, ICT Instructor and a publisher of many research works in Education.