Impact of electronic banking

The new millennium brought with it new possibilities in terms of information access and availability simultaneously, introducing new challenges in protecting sensitive information from some eyes while making it available to others. Today’s business environment is extremely dynamic and experience rapid changes as a result of technological improvement, increased awareness and demands Banks to serve their customers electronically. Banks have traditionally been in the forefront of harnessing technology to improve their products and services.

The Banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and Communication Technology (ICT) is at the centre of this global change curve of Electronic Banking System in Nigeria today. (Stevens 2002). Assert that they have over the time, been using electronic and telecommunication networks for delivering a wide range of value added products and services, managers in Banking industry in Nigeria cannot ignore Information Systems because they play a critical impact in current Banking system, they point out that the entire cash flow of most fortune Banks are linked to Information System.

The application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all Banks and indeed a prerequisite for local and global competitiveness Banking. The advancement in Technology has played an important role in improving service delivery standards in the Banking industry. In its simplest form, Automated Teller Machines (ATMs) and deposit machines now allow consumers carry out banking transactions beyond banking hours.

With online banking, individuals can check their account balances and make payments without having to go to the bank hall. This is gradually creating a cashless society where consumers no longer have to pay for all their purchases with hard cash. For example: bank customers can pay for airline tickets and subscribe 1 to initial public offerings by transferring the money directly from their accounts, or pay for various gods and services by electronic transfers of credit to the sellers account. As most people now own mobile phones, banks have also introduced mobile banking to cater for customers who are always on the move. Mobile banking allows individuals to check their account balances and make fund transfers using their mobile phones. E-Banking has made banking transactions easier around the World and it is fast gaining acceptance in Nigeria.

The delivery channels today in Nigeria electronic Banking are quite numerous has it is mentioned here Automatic Teller Machine (ATM), Point of Sales (POS), popular PC easy access to the internet and World Wide Web (www) and internet is increasingly used by Bank’s as a channel of delivering the products and services to the numerous customers.

Virtually almost all Banks in Nigeria have a web presence; this form of Banking is referred to as Internet Banking which is generally part of Electronic Banking. The delivery of products by banks on public domain is an indication of advertisement which is known has E-Commerce. Electronic commerce on the other hand is a general term for any type of business or commercial transaction it involves the transfer of information across the internet. E-Commerce involves individuals and business organization exchanging business information and instructions over electronic media using computers, telephones and other communication equipments.

This covers a range of different types of business from consumers to retails products. However, Electronic banking as it is; is a product of E-Commerce in the field of banking and financial services. It’s offers different online services like balance enquiry, request for cheque books, recording stop payment instructions, balance transfer instructions, account opening and other form of traditional banking services. The Internet allows businesses to use information more effectively, by allowing customers, suppliers, employees, and partners to get access to the business information they need, when they need it.

STATEMENT OF THE PROBLEM
In Nigeria, customers of banks today are no longer about safety of their funds and increase returns on their investments only. Customers demand efficient, fast and convenient services. Customers want a Bank that will offer them services that will meet their particular needs (personalized Banking) and support their Business goals for instance; businessmen want to travel without carryout cash for security reasons. They want to be able to check their balance online, find out if a cheque is cleared, transfer funds among accounts and even want to download transaction records into their own computer at work or home.

Customers want a preferential treatment and full attention by their choice Bank. All these are only achievable through electronic Banking. In line with rendering qualities and acceptable services that most Banks in Nigeria are gearing toward and investing large sum of money in information and communication technology, expectedly such Banks services have been improved. United Bank for Africa (UBA), Zenith Bank, GT Bank (to mention few) are in the forefront in the use of IT in rendering services to their Customers (The Guardian Newspaper April 18, 2008p 21). It also seeks the challenges involved in Electronic Banking and Best industrial practice and the approach of implementing them in Nigeria Banking system.

OBJECTIVES OF THE STUDY
Service provider, Bill payment provider, Credit Business and Credit scoring company, E-Banking systems rely on a number of common components or process Specifically the study objectives are; I. To evaluate the prospects of electronic Banking in Diamond plc II. To evaluate the impact of electronic Banking in Diamond plc III. To examine whether electronic banking has improve the fortune of the Bank. IV. To examine the effect of electronic banking has it improve the fortune of the bank. V. To examine whether the Bank electronic Banking guideline comply with the CBN electronic Banking guideline policy.

STATEMENT OF RESEARCH QUESTIONS
The proposal would be addressing the following research question which are:
1. Is electronic banking cheaper than branch transaction.
2. Does electronic banking pleases the customer rather than going into the bank to make transaction.
3. Does electronic banking has any impact on the firm future prospect.
RESEARCH HYPOTHESIS
The following hypotheses are formulated in null form to guild the study.
1. Hο: Electronic banking does have prospect in diamond bank Plc Hμ: Electronic banking does not have prospect in diamond bank Plc
2. Ho: Electronic banking does impact in diamond bank Plc

Hμ: Electronic banking does not impact in diamond bank Plc 3. Ho: Adoption of Electronic banking does enhance the fortune of diamond bank Plc Hμ: Adoption of Electronic banking does not enhance the fortune of diamond bank Plc 4. Ho: Electronic banking does improve Bank Customer relationship Hμ: Electronic banking does not improve Bank Customer relationship 5. Ho: The Bank electronic banking guideline does comply with the CBN electronic banking guideline. Hμ: The Bank electronic banking guideline does not comply with the CBN electronic banking guideline

SIGNIFICANCE OF THE STUDY
The study would enable the banks executives and indeed the policy makers of the banks and financial institutions to be aware of electronic banking as a product of electronic commerce with a view to making strategic decisions. The research is equally significant because it would provide answers to factors militating against the implementation of electronic banking in diamond Bank Plc; prove the success and growth associated with implementation of electronic banking highlight the areas of banking operations that can be enhanced via electronic banking and also be an invaluable tool for Students, Academician, institutions, Corporate managers and individuals that want to know more about electronic banking trends especially in Nigeria.

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 and we will also examine the nature of electronic banking operations in DIAMOND Bank Plc from 2007 to 2010

LIMITATION OF THE STUDY
In view of the technicalities involved, it would be unrealistic to assume that all necessary facts have been gathered in the process of the study. Information gathered is limited to those accesses and made available by the respondents and also those gathered from end users. However, the impacts of this limitation will be reduced to the barest minimum.

LITERATURE REVIEW
INTRODUCTION:
Electronic banking system is a conventional banking system which stated in Nigeria in 1952; (Benjamin 2001). Since then, the industry has witnessed a lot of regulatory and institutional advances. The industry was being controlled by at most five out the 89 banks in existence before the commencement of the merger and acquisition of banks in Nigeria economy. Multiple branch systems is also one of the notable features of Nigerian Banks, with a total of 89 banks or thereabout accounting for about 3017 bank branches nationwide as at 2004. As well, the industry was faced with heavy challenges including the overbearing impact of fraud and corruption. Erosion in public confidence, a poor capital base, persistent cases of distress and failure poor asset quality and so on.

Part of the moves to resolve these lingering problems include the banking reform initiated by the Central Bank of Nigeria in June 2004, which is largely targeted at reducing the number of banks in the economy and making the emerging banks much stronger and reliable. So far, the banking reform has been a success story with 25 mega banks emerging after the recapitalization exercise which ended on 31st December, 2005 in the bid to catch up with global development and improve the quality of their service delivery. Nigerian banks have no doubt invested much on technology; and have widely adopted electronic and telecommunication networks for delivering a wide range of value added products and services.

They have in the last few years transformed from manual to automated systems. Unlike before when ledge-cards were used, today banking has been connected to information technology networks, thereby facilitating the practice of inter-banking and inter-branch banking transactions. Development domestically has the introduction of mobile telephone in 2001 and improved access to personal computers and internet service facilities have also added to the growth of electronic banking in the Nigeria banking sector.

However, whereas local banks most commonly practice real time online internet banking, the integration of customers into the process is far from been realized. Many of the reasons are attributed to the high prevalence of internet fraud and lack of an adequate regulatory framework to protect the banks from the volatility of risks associated with internet banking, especially at the levels of communication and transaction. In the main, Nigeria is globally regarded as the headquarters of Advance Fee Fraud which is perpetrate mostly via the internet (Journal of international affairs.

THE VIEW ON ELECTRONIC BANKING
The vast majority of the recent literature on electronic money and banking suffers from a narrow focus. It generally ignores electronic banking entirely and equates electronic money with the substitution of currency through electronic gadget such as smartcards and virtual currency. For example, Freedman (2000) proposes that electronic banking and electronic money consist of three devices; access devices, stored value cards, and network money. Electronic banking is simply the use of new access devices and is therefore ignored.

Electronic money then is the sum of stored value (smart) cards and network money (value stored on computer hard drives). What is most fascinating and revealing about this apparently popular view is that electronic banking and electronic money are no longer functions or processes, but devices. Within this rather narrow scope for electronic banking and electronic money, there are nonetheless many research that address one or more of the challenges facing it.

Santomero and Seater (1996), Prinz (1999), and Shy and Tarkka (2002), and many others present models that identify conditions under which alternative electronic payments substitute for currency. Most of these models indicate that there is at least the possibility for electronic substitutes for currency to emerge and flourish on a large scale, depending on the characteristic of the various technologies as well as the characteristics of the potential users.

Berentsen (1998) considers the impact that the substitution of smart cards for currency will have on monetary policy, arguing that although electronic substitutes for currency will become widespread, monetary policy will continue to work as before because this currency substitution will leave the demand for central Bank reserves largely intact.

Goodhart (2000) discusses how monetary control would work in an economy in which Central Bank currency has been partially or completely replaced by electronic substitutesCohen (2001) distinguishes between monetary control and monetary autonomy, where monetary control is the ability of the Central Bank to control monetary aggregates demand and the supply of money, while monetary autonomy is the ability of the Central Bank to influence output and prices. Cohen argues that the introduction of electronic currency substitutes will not reduce monetary control, but may reduce monetary autonomy, in other hand; Kobrin (1997) argues that electronic currency substitutes are part of a general process of technological advance and globalization that are rendering national authorities of all kinds impotent and obsolete.. electronic banking and the Common Banking Products

The use of information technology in banking operations is called electronic banking Ovia 2001 argue that Electronic banking is a product of e-commerce in the field of banking and financial services. In what can be describe as Business-to-consumer (B2C) domain for balance enquiry, request for cheque books, recording stop payment instruction, balance transfer instruction, account opening and other forms of traditional banking services. Banks are also offering payment services on behalf of their customer who shop in different e-shops. The Card System

The card system is a unique electronic payment type. The smart cards are plastic devices with embedded integrated circuit being used for settlement of financial obligations.
The Automated Teller Machine (ATM)
Worldwide, the use of paper cash still remains the most widely used and acceptable means of settling financial transactions and obligations. However, the proportion of cash transactions is increasingly on the decline, especially in advanced economics (Amedu, 2005).

Cheque
A cheque is a paper based payment instrument whose usages are still gaining ascendancy. The Automation focus on this instrument is to reduce the number of clearing days and improve on security arrangement in the course of settlement and collection. For example, in Nigeria the Central Bank of Nigeria CBN has just embarked upon online clearing and Nigeria has signified interest and signed path to this project (Johnson, 2005).

The Entry of Nigerian Banks into Electronic Banking
Electronic banking both as a medium of delivery of banking services and as a strategic tool for business development, has gained wide acceptance internationally and is fast catching up Nigeria with more and more banks entering the fray. Nigeria can be said to be the threshold of a major banking revolution with net banking having already been unveiled (Ovia, 2001).

e committed using existing bank sites.
Threats of Cyber-Crimes on the Nigerian Banking Premises
The Advances fee fraud or 419, which is one of the most popular of all internet frauds, Has its origin from Nigeria in the 1980s. Its development and spread follows the path of the developments in information technology at inception, postal letters were used as key media for committing 419 frauds. Later in the early 1990s, it became integrated into telecommunication facilities such as the telephone and fax from the late 1990s following The Regulatory Challenges

At the national level, the Nigerian government and the relevant regulatory agencies have strived to match the rapidly changing electronic banking environment with neccessary regulations and frameworks (Soludo, 2005). Earlier efforts made to this effect included the enactment of the Failed Banks (Recovery of Debts) and Malpractices in Bank Decree No. 18 of 1994, and the Money Laundering of 1995. However, as noted above, poor enforcement procedure rendered these instruments very inactive in checking the menace of financial crimes. By the late 1990s, following record growth internet and computer usage in the country, almost all the regulations guiding the banking industry, including the Banks and Other Institution Act of 1991, were lacking adequate provisions to accommodate the emerging trend. Not even a mention of electronic banking or any manner of its application was mentioned in any of those prevailing regulatory documents. The situation created a lot of gaps between the levels Bank Customer Relationship

Bank customer relationship, is just a special contract where a person entrusts valuable items with another person with an intention that such items shall be retrieved on demand from the keeper by the person who so entrust.

Thus the banker is the one who is entrusted with above mentioned valuable items, while the person who entrust the items a view to retrieving it on demand is called the customer. The relationship is based on contract. It is based on certain terms and conditions. For instance, the customer has the right to collect his deposit on demand personally or by proxy. The banker too is under obligation to pay, so long the proxy is duly authorized by the customer. The relationship is also fiducially. The terms and conditions governing the relationship should not be leaked to a third party, particularly by the banker. Also items kept should not be released to a third party without due authorization by the customer. Operation of Financial Institution

Financial institutions provide service as intermediaries of the capital and debt markets. They are responsible for transferring funds from investors to companies in need of those funds. Financial institutions facilitate the flow of money through the economy. To do so, saving are pooled to mitigate develop revenue.

RESEARCH METHODOLOGY
Introduction
This chapter will describes the techniques and procedures used by the researcher in conducting the study and accumulating the data for the study. It comprises of the description of the population of the study, sampling techniques, sample size, sources of data, method of data collection and method of data analysis and testing hypothesis. Population of Study The population to be used in this study will covers all the 40 credit officers in diamond Bank Plc. The population selected will be designed to obtain adequate and diverse views pertaining to the level and impact of electronic banking in Diamond Bank. Sampling Techniques

The technique will be use to ensure that all the segment of the population is included in the sample. The sample will be draw from the credit officers of DIAMOND BANK Plc. Sample Size
The sampling size to be used by the researcher in this study constitute (40) Diamond bank Sources of Data
The researcher will use both the primary and secondary data in the study. The primary data will be collect by the researcher through the use of questionnaire while the secondary data will be collect from CBN electronic banking guideline, annual report of Unity Bank Plc, and CBN annual report etc.

Method of Data Analysis
The study will use both descriptive and inferential statistics in analyzing the data. Also, simple frequency counts, percentages and the chi-square were used in the data analysis.

REFERENCE.

(2005). Domestic electronic payment in Nigeria: The Challenges. Central Bank of Nigeria Bullion, vol. 29, No. 1, January/March.
Bank for International Settlements (2001). Committee on Payment and Settlement System Survey of electronic money developments prepared by the Committee on Payment and Settlement Systems of the Central Banks of the
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Berentsen, A. (1998), Monetary Policy Implications of Digital Money, Kyklos, Vol. 51, pp. 89 117.
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Cohen, Benjamin J., (2001), Electronic Money: New Day or False Dawn? Review of International Political Economy, Vol. 8, pp. l97—225.
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Freedman, C., (2000), Monetary Policy Implementation: Past, Present, and Future – Will Electronic Money Lead to the Eventual Demise of Central Banking?” International Finance, Vol. 3, No. 2, pp. 211—27.

Friedman, B., (1999), The Future of Monetary Policy: The Central Bank as an Army with Only a Signal Corps? International Finance, Vol. 2, No. 3, pp. 321-38. Goodhart, Charles A. E., (2000), Can Central Banking Survive the IT Revolution? International Finance, Vol. 3, No. 2, pp. 189-209.

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