ELECTRONIC BANKING AND THE CHALLENGES OF THE NIGERIAN BUSINESS ENVIRONMENT

BACKGROUND OF THE STUDY
Although a lot of research works has been done on the prospects and challenges of Information Technology in the banking industry, theses research works are broad based and only few are actually carried on Electronic Banking (E-banking). Modern banks now realise that only those that overhaul their payment service delivery and operations are likely to survive and prosper in the 21st century (Opara et al, 2010). This is due to pressure of globalisation, consolidation, privatisation, deregulation and rapidly changing technology (Connel and Saleh 2004). In order to properly place themselves in favourable positions for competitions and be one of those corporations to be reckoned with in the new century, banks are making use of Internet to execute mobile banking, this developed from bringing PCs together to form local and Wide Area Networks through client/server technology.

Many banks have installed modern computer inter-connectivity backbone that would enable them achieve communications of data and multimedia over Internets, Intranets and Extranets. They also realise that they have to achieve not only management/staff wide computer literacy but what could be called information literacy i.e. knowing how to locate, analyse, store and use information. All staff and managers in a modern bank need to be able to search and gather data from several types of sources, analyse them, select relevant ones and organise them in such a manner to allow them make decisions based on the organised data.

Banks of the future realises that the banking of tomorrow requires more of electronic manipulations and shuffling of bits-based money and other banking transactions, instead of paper. In other words, paper based transactions are now being replaced by electronic-based transactions e.g. the Internet. Whether a bank would be successful or not depend on the extent to which it is investing in IT and using it in an innovative manner. This area has been tip to be a major competitive ground for banks that are operating in the post-consolidation era.

What are the major issues needed to be mastered by Nigeria banks in order to compete with the rest of the world? What are the major developments and challenges in the Nigerian operating environment that are affecting the growth of electronic banking in the industry? These are some of the questions that would be addressed in the course of this study.

STATEMENT OF THE PROBLEM
Electronic banking is a driving force that is changing the landscape of the banking industry fundamentally, in particular, towards a more competitive industry. Electronic banking has blurred the boundaries between different financial institutions, enabled new financial products and services, and made existing financial services available in different packages (Agbada, 2008). But the influences of electronic banking go far beyond this.

The developments in electronic banking, together with other financial innovations, are constantly bringing new challenges to finance theory and changing people’s understanding of the financial system.

It is not surprising that in the application of electronic banking in Nigeria, the financial institutions have to face its problems. Communications over the Internet are insecure and often congested. The financial institutions would also have to contend with other Internet challenges including security, quality of service and some aberrations in electronic finance (Guardian Newspaper 2001).

Besides, the existing business environment also poses some challenges to the smooth operations of electronic banking in Nigeria. Some of these operational challenges include epileptic power supply, dominance of cash transaction in the economy, low level of awareness among Nigerians etc (Agbada, 2008). The thrust of this research work shall be to examine the trend of electronic banking in Nigeria and a critically examination of the challenges noted above.

OBJECTIVES OF THE STUDY
Some the objectives, which this research work aims to achieve are as follows:
(i) To evaluate the prospects of electronic banking in Nigerian banking industry and financial institutions;
(ii) To evaluate the impact of electronic banking on the operations of financial institutions in the country;
(iii) To examine the effect of electronic on bank-customer relationship;
(iv) To seek to examine the challenges facing the implementation of electronic banking in Nigeria;
(v) To examine the general International Experience on the study.

RESEARCH QUESTIONS AND HYPOTHESES
The study would provide answers to the following questions:
1. Does Electronic banking contribute to the efficiency and reliability of banks and banking?
2. Does Electronic banking improves bank-customer relationship and retains them to their respective banks?
3. To what extent would Electronic banking improve the fortune of banks?
4. What are the results of frequent changes and upgrading of information Technology equipments on the bank’s profitability?
5. Should all banks in Nigeria venture into Electronic banking services rather continuing with the traditional banking?
6. What are technical and operations challenges facing the adoption of electronic banking in Nigeria?

RESEARCH HYPOTHESES
The following hypotheses are formulated from the research questions above:
1. Electronic banking enhances banks profitability and efficiency.
2. Electronic banking improves bank-customer relationship.
3. Adoption of Electronic banking would enhance the fortune of the banks.
4. More banks in Nigeria are eager to join the bandwagon of other banks that provides Electronic banking services because of the merits involved.
5. The Nigerian Business environment hinders the smooth operations of Electronic banking in the country.

RESEARCH METHODOLOGY AND SOURCES OF DATA
Both primary and secondary data shall be the basis of this research work. The primary data shall be generated by means of a well-structured questionnaire instrument. The first section of the questionnaire shall be based on the personal data of the responses while the second section shall seek to ask questions that relates to the subject on the basis of the research questions.

The questionnaire to be used shall be carefully administered and a total of fifty (50) staffs of the bank would be selected, for the purpose of this study. The sampling shall be done randomly such that the respondents shall cut across the different departments in the bank. This could to some extent give a basis for generalisation. The data, which would be collected from the questionnaire, will be analysed using the simple percentage method and chi-square, goodness of fit. This would make the analysis of the data more concise and simple.

Secondary data shall also be collected from research reports, CBN Monthly reports, First Bank Annual Reports and other published materials.

SIGNIFICANCE OF THE STUDY
This study is significance because it would help to enlighten operators in the banking sector and other concerned individuals and organisation on the adoption of Electronic banking. The research shall basically identify the technical and operational challenges facing Electronic banking in Nigerian business environment and suggests ways by which they could be tackled.

SCOPE OF THE STUDY
In pursuance of the objective of the study, attention shall be focused on Electronic banking among other electronic commerce implementation. In order to conduct an empirical investigation into the adoption of Electronic banking in Nigeria, this study shall examine the nature Electronic banking operations in First Bank of Nigeria Plc.