Consumer Disposition on Electronic Banking & its Impact on Nigerian Economy
Introduction
Nigeria, and many other countries, has their banks and other financial institutions that play an important in the economy through serving the public and the transformation of financial products. In the generation where there is a significant innovation in terms of information and communication technologies, the financial institutions can utilize these innovations as a remarkable start in improving the efficiency and effectiveness in their products and services. The changes give rise to the establishment of effective risk management, infrastructure provision, monetary policy development and regulatory framework in the financial system.
Background and Problem Statement
The advancements in information and communication technology (ICT) have impacted positively on service delivery in the financial sector of the Nigerian economy. These developments have however not been matched with appropriate legislation/regulation to address the resultant changes in the relationships, responsibilities, liabilities and rights of the parties engaged in electronic banking (CBN, 2003a). The Central Bank of Nigeria (CBN) recognized that electronic banking and payments services are still at the early stages of development in Nigeria. But the changes already creative a great impact in the economy. However, CBN anticipates that this movement will relatively affect the consumers’ perceptions and outlook regarding the movement of the bank in the electronic banking. The CBN recognize the policies and programs that should be prioritized in order to protect the consumers and their assets. Therefore, it is suggested that the issues should be addressed to properly design a policy which is in the scope of ICT, monetary policy, legality, regulatory, and supervisory policies that can be part of the system once implemented (CBN, 2003b). Despite this positive answer of CBN in the security of the consumers, what are the consumer dispositions in the electronic banking of the banks that can obviously create an impact in the Nigerian economy?
Research Aim and Objectives
The main aim of the study is to investigate the consumer outlook in the e-banking movement of the CBN and the other Nigerian banks. In order to achievement such aim, the objectives that need to be considered. First is to determine the implementation of the e-banking system in the country. Second is to recognize the effectiveness of the informal banking system based on the consumers’ perceptions. Third is to provide the necessary information regarding the security and other enhancement methods provided by the banks to their consumers. And fourth is to identify the economic impact of the e-banking in the country in the next coming years.
Literature Review
Electronic banking or E-banking is a term applied in the banks which means that banking business is transacted using automated processes and electronic devices such as personal computers, telephones, fax machines, Internet, card payments and other electronic channels. Some banks practice electronic banking for informational purpose, some for simple transactions such as checking account balance as well as transmission of information, while others facilitate funds transfer and other financial transactions. This means that the transaction is not in personal basis and can be carried out just by facing a computer or through automated teller machines (ATMs) based on the comfort of the user (CBN, 2003a). In the continuous evolution in the Nigerian Banking, the economy observed that there is growth in the credit availability for the private sector. These growths were showed through the issuance of electronic payment systems including the issues of debit and credit cards. Furthermore, there is a recognizable improvement in the standard of living as seen in the financial products like loans, leasing, and increase in credit lines (Atuche, 2009). While recognizing the benefits that the technological changes in banking system, the Nigerian Consumer Protection Council Act also provided necessary movement for the protection and rights of the consumers who are engaged in e-banking services (CBN, 2003b).
Methodology
The applied method in the study is the use of survey and interview. The survey will be applied on the consumers who are relying or using the e-banking system. In this way, the study can determine the idea or perceptions of the consumers in the innovative movement of the Nigerian Banks. On the other hand, the interview will be held on the management of certain Nigerian Bank and will be asked regarding the regulations and policies implemented by the bank to live up the security features they offered. In addition, the managers will be asked regarding the changes created by e-banking in terms of the flow of services they offer and number of customers they created transactions per day. The information gathered will aid the study in determining the perceptions of the consumers in electronic banking.
References:
Atuche, F., (2009) The Nigerian Banking System and the Challenges of the Global Economic Crisis [Online] Available at: http://www.cenbank.org/fican/2009/Nigerian%20Banking%20System%20and%20Challenges%20of%20Global%20Economic%20Crisis.ppt [Accessed 07 September 2010]
CBN, (2003a) Report of the Technical Committee on Electronic Banking, Central Bank of Nigeria [Online] Available at: http://www.cenbank.org/OUT/PUBLICATIONS/BSD/2003/E-BANKINGRPT.PDF [Accessed 07 September 2010].
CBN, (2003b) Central Bank of Nigeria Guidelines on Electronic Banking in Nigeria [Online] Available at: http://www.cenbank.org/OUT/PUBLICATIONS/BSD/2003/E-BANKING.PDF [Accessed 07 September 2010].
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