There has been a significant change in the Nigerian Banking System during the past few years.  From the turn out of such changes, it is expected the banking system will experience greater changes in years to come.

            A lot of factors have contributed to the changes experienced in the banking industry especially as it concerns electronic banking.  The move to banks recapitalisation which started in early 90’s but took effect finally in June 10, 2004 under Professor Charles Chukwuma Soludo the Central Bank of Nigeria Governor.  The few banks who survived the N25 billion capitalization now noticed that customers are no longer scared as to which bank is stronger than the other and fear of any of those banks collapsing was gone.  The banks now realized that the only way to attract and retain their customers is by excellent service delivery and introducing bank products that will make banking a lot easier and very convenient for their customers.  Some of such products are Valucard, ATM card, Mobile Banking on-line banking etc.

          Also the desire for banks to go paperless also prompted them to introduce these electronic products.  Instead of a customer coming to the bank to fill a teller or a withdrawal slip, the customer can use the ATM care on a machine.

          Banks also realized that in order to pay higher interest rates on customers accounts and still maintain a profit margin they placed fees for each of these electronic products and services being offered to their customers.  Previously the cost of these services had in effect been subsidized by low interest rates on bank deposits.  Deregulation forced banks to look at their bottom line and charge customers for such electronic products.

          The importance of technology in delivering most of these financial services cannot be over emphasized because through automation, computerized technology has enabled banks to run their business more efficiently, their customers satisfied and also realized significant savings in the cost of human labour and in the life operation of their ‘physical plant’.

          SAP earlier introduced in 1986 by the military regime is back in operation and it has affected the banking and oil servicing industries more than any other sector of the economy.  It has changed both the structure and the content of banking business.  Just as the number of banks grew tremendously in 2001, the techniques of delivering banking services and the range of products offered to customers have also changes especially with the N25 billion recapitalisation which reduced the number of banks from 87 to 25 in 2005.

          The volume of profit made by some banks increased considerably with the introduction of SAP, the reason being that in the last few years, the old banks have been challenged by the innovations in banking services being introduced by the ‘new generation banks’ as they are often referred to; in order to meet the challenging needs of their customers.  SAP also brought to an end the kind of old banking system of rendering banking services, in this new competitive environment, thus many banks are driven by survival instints in a bid to stay afloat in the turbulent business environment.  The new banks therefore pose a threat to the older banks because they are more aggressive at their marketing techniques and strategies.

          Electronic Banking can be said to be a natural fallout of the intense competition going on in the banking industry.  It came about as a result of efforts of banks to introduce automation into banking business.  Prior to the advent of electronic banking, information was processed manually and it was a very cumbersome and inefficient way of processing and storing information.  The use of computer was seen as a better option.  Automation is all about using a better means to process information.  Computer de-emphasizes manual operations applying electronic mechanization to a horde of statistical operations.  In our world today, everybody is thinking computer-electronics as more pressing of buttons on your mobile phones sends messages and images across the globe thus saving time, energy and money. 

          Electronic Banking involves the transfer of information, data, even funds from one point to another.  Its use in the banking industry for their services are fully automated such that transactions are concluded in a moment.  It involves the use of computer networks in dispensing cash and transfer of funds.  The primary objective is to replace intensive labour operations and reduce the waiting time of customers.

But to create an environment delivering effective service on the Web to a significant proportion of your customer base requires an E-Banking strategy.

Electronic Banking offers different online services like balance enquiry, request for cheque books, recording stop payment instructions, balance transfer instructions, account opening and other form of transitional Banking services.

1.2. 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.


The main objective of this research work is to examine the E-banking system in Nigeria: Demerits and Merits  on how difference channels could enhance the delivery of consumers and retails products, and also how Banks choose to support their Electronic Banking component/services internally, such as internet services provider, Internet banking software, Core banking vendor, Managed security 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 advantages and disadvantages of electronic Banking in Nigeria.

II. To evaluate how electronic banking has contributed to the development of Nigeria banking sector.

III. To examine whether electronic banking has improve the fortune of the Bank.

V. To examine whether electronic Banking guideline comply with the CBN electronic Banking guideline policy.


The following hypotheses are formulated in null form to guild the study.

1. Hο: Electronic banking does have not any impact on Nigerian banking sector.

H1: Electronic banking has a significant impact on Nigerian banking sector.

2. Ho: Electronic banking is not contributing anything good to Nigeria banking system.

H1: Electronic banking has contributed immensely to Nigeria banking system.

3. Ho: Adoption of Electronic banking does enhance the fortune of Nigeria banking system

H1: Adoption of Electronic banking has enhanced the fortune of Nigeria banking system to a greater extent.

4. Ho: Electronic banking does improve Bank Customer relationship in Nigerian banking system

H1: Electronic banking improves Bank Customer relationship in Nigerian banking system.


Since the release by CBN, August 2003 and the subsequent policy on the guideline of Electronic Banking system in Nigeria, One of the question that currently being addressed is the impact of E-banking Banking on the Nigerian banking system; there are two views that are prevalent in the Market. The controversies that the internet is a revolution that will sweep away the old order, the research questions are as follows;

1.  What are the impacts of E-banking in Nigerian economic growth?

2.  What are advantages of E-banking in Nigeria banking system?

3.  What are disadvantages of E-banking in Nigeria banking system?

4.  How has Electronic banking contributed to the economic development of Nigeria?

5.  What are the relevance of electronic banking in Nigerian banking sector?


The study would enable Nigerian banking sector, the banks executives and indeed the policy makers of the banks and financial institutions to be aware of the advantages and disadvantages of E-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 Unity 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.