DEFINITION OF ELECTRONIC BANKING
The term electronic banking means all day access to cash through an Automated teller machine or direct deposit of pay checks into checking or savings account. But electronic banking involves many different types of transactions, rights, responsibilities and sometimes, fees. Electronic banking can also be defined in a very simple form, it can mean provision of information or services by a bank to its customers, via a computer, television, telephone, or mobile phone.
ORIGIN OF ELECTRONIC BANKING IN NIGERIA
During the Structural Adjustment Programme (SAP) in 1986, in Babangida regime brought to an end the kind of banking services rendered by the first generation of banks in Nigeria. The SAP changed the content of banking business. Just as the number of banks increases from 40 in 1985 to 125 in 1991, the SAP provided licence to more banks which posed more threat to existing ones and the more aggressive the marketing techniques adopted by them. In the process competition among themselves, the adoption of electronic banking was put in place in order to maintain a good competitive position.
EVOLUTION OF ELECTRONIC BANKING IN NIGERIA
Banking as come from a very long way from the periods of ledger card and other manual filling system to a period of computer age. Computerization in the banking industry was first introduced in the 1970s by Society General Bank (Nigeria) Limited. Until the mid-1990, the few banks that were computerised made use of the Local Area Network (LAN) within the banks. The sophisticated ones among the banks then implemented the WAN by linking branches within cities while one or two implemented intercity connectivity using leased lines (Salawu and Salawu, 2007).
Banks have adopted technology to their operations and have advanced from very simple and basic retail operations of deposits and cash withdrawal as well as cheque processing to the delivery of sophisticated products which came as a result of keen competition in view of unprecedented increases in the number of banks and branches. There was the need to modernize banking operation in the face of increased market pressure and customers demand for improved service delivery and convenience. According to Sanusi (2002) as cited by Dogarawa (2005). The introduction of e-banking (e-payment) products in Nigeria commenced in 1996 when the CBN granted All States Trust Bank approval to introduce a closed system electronic purse. It was followed in February 1997, with the introduction of similar product called ‘Pay card’, by Diamond Bank.
CBN additionally gave permission to a number of banks to introduce international money transfer products, on-line banking via the internet, and telephone banking though on a limited scale. It must also be stated that the deployment of Automated teller machine (ATM) by some banks to facilitate card usage and enhance their service delivery. Today, nearly all banks in Nigeria make use of a website. The service or ordering bank drafts or certified cheque made payable to third parties has also been increasingly automated (Irechukwu, 2000).
CHANNELS OF ELECTRONIC BANKING PRODUCT IN NIGERIA
The revolution in the Nigerian banking system which led to the increase in paid up capital from N2 billion to N25 billion effective from 1st of January 2006. This result to liquidation of weak banks in Nigeria that could not find merger partners. The revolution brought about changes to banking operations in Nigeria with aggressive competition among various banks. Each banks came up with new products, repackaged the old ones and came up with more efficient service delivery strategies. This more efficient service delivery was made possible through investment in information and communication technology (ICT) (Sanni, 2009). The huge investment in ICT has been the backbone of electronic banking, using different distribution channels. It should be noted that electronic banking is not just banking via the Internet. The term electronic banking can be described in many ways.
Personal Computer used by customers allows the customer to use all e-banking facility at home without them going to the bank. It gives consumers a variety of services so they can move be able to move money between accounts, pay their bills, check their account balances, and buy and sell goods.
Mobile phones are used a lot for financial services in Nigeria. Banks enable their customers to conduct banking services such as account inquiry and funds transfer through the mobile telephone.