This study was on electronic banking and the purpose of carrying out this research was to assess the impact of electronic banking on commercial banks operations.

In the review of related literature. I covered such areas as the meaning of electronic banking, origin of electronic banking the meaning of computers, the relevance banking products and its relevance to electronic banking.

Finally, I talked on problem and solutions associated with electronic banking.

My research design was on secondary data approach based on the findings of this study conclusions and recommendation were drawn.

Finally, it is the intention of the researcher to provide a document which will apart from satisfying the academic requirement of the institute of management and technology (IMT) Enugu for the award of the ordinary national Diploma (OND) in banking and finance will also serves as a guide to prospective investors and financial institutions that may wish to invest in electronic banking.



The Nigeria banking industry has witnessed a lot of changes since the mid 1980’s and this is reflected in the increased volume and complexity of bank operations, increased innovations and varieties in product and service delivery. These development have not only been technology  driven but have influenced move technological advances.

Information technology which is the foundation of modern electronic banking through desktop computers and terminals provide the tools for delivery of new products and innovations characterized by ATM’s cash dispensers, credit and cash card, information technology through electronic banking is  radically changing how banking is done all over the would. The volume and speed of banking transactions has improved tremendously as a reject of the growth of electronic banking which has created a lot of changes and business opportunities for banks. What used to be termed electronic data processing has been transformed into electronic banking through information technology. The change in terminology reflects on equivalent transformation of the use of the computer  from automation of paper flow to reduction in unit cost the replacement of manual with computer processing to today’s focus on electronic product and service delivery which has become the underlying ethos in today’s banking with a shift in adopting to a  consumers market. Electronic banking through IT has created and unparalleled wired economy. The transfer of money from point “A” to point “B” has resulted in turning the actual money into bits and bytes through satellite, fibre optic, cable or regular telephone lines. Aladesulu (1998).

Banks waste millions of naira on information technology investment and so as a result, electronic banking is expensive but is well suited in Nigeria where transport, telecommunications and energy is still inefficient and ineffective, hampering the movement of goods and services. Yet the willingness of banks to take up efficiency seeking technologies depends just as much on internal factors like costs of adoption and ownership as on external ones like the availability of infrastructure such as telecommunication.

Despite this poor service is still the bane in the banking industry characterized by centralization of decision making red tape bureaucracy etc. electronic banking and IT is supposed to replace the customer’s file phenomena but the file still provides the basis of today’s banking. The file still travels the length and breath of the bank before decisions are made such poor delivery service has contributed to a lot of economic activity outside the bank. Aragba-Akpore (1999).

Most of “IT” systems and trainings are imported from overseas without  consideration for the peculiarities of the local environment.

Hence, according to Njokanma (1999) at an international information technology workshop on how to survive banking operations of financial institutions in the 21st century, he said that the essence of the workshop is to make their own contribution to IT development hence the need to add value to the nation by discouraging Nigerians from going abroad for such trainings which the series of workshop will offer.

‘IT’ is not considered as core business while IT managers are treated as auxiliary staff rather than innovators.

So, finally, the justification of huge investments in “IT” by the banking sector is yet to establish the much needed impact.


Banks since the inception of the use of electronic banking products in the late 1980’s have not made their presence felt much. These are as a result of problems associated with the use of electronic banking which includes.


Electronic banking is very expensive because it entails the acquisition of computers, telecommunication gadgets. Banks spend a lot on these products because  of the exchange rate between the naira and the dollar.


So many people are still ignorant of the services and  benefits available to them through the use of electronic banking products. The benefits includes that it is fast, safe and reliable.


Irregular source of power supply and unavailability of telecommunication systems are hindrances to the sources of electronic banking.


This has to do with some people’s belief that anything that has to do with  computers is evil and associated with what the Bible called the end time moves of Satan. Also here is this general fear that the introduction of computers would displace them of their jobs.


The main or primary objective of this study is:

a.       To identify the impact of electronic banking since its inception on the provision of better and efficient services to banks customers. In order to achieve the primary objective above, there are other secondary objectives whose achievement wine result in the achievement of the overall objective. These secondary objectives are:

b.       To identify the impact of electronic banking on the profitability of banks.

c.               To identify the impact of electronic banking on the timely delivery of customers services by banks.

d.              To suggest measures for improving electronic banking in Nigeria.


It is hoped that the findings and recommendations of the study will include:

i.        Improved customer service::   Electronic banking wire enable banks provide new, faster and better products and services to its customers thereby bringing up the banks to international levels and enhancing competition amongst the banks. This can take the form of funds transfer, signature verification in minutes etc.

ii.       Reliability of transaction: Electronic banking wire help to ensure accurate and timely transactions, unlike when done manually which is prone to human errors which are embarrassing and costly a times.

iii.      Safety; Electronic banking technology ensure safety of banks dealings with its customers. Unsafe banking practice can cause huge losses to the banks especially in the case of misrepresentation of account owners. The banking technology prevents this through its signature verification voice mail and prints verification and unauthorized access into the computer system.

iv.      Redundancy of storage space:Electronic banking technology  helps to reduce the use of files which are archaic thereby reducing storage space. Using files could lead to loss of vital information about bank customers through mutilation easy and unauthorized access of files and misplacement of important documents. This can be prevented through storage of information in diskettes, hard disks and back-ups of important information.

v.       Reduces redundancy of information: Duplication of information which could lead to leakage of confidential information can be reduced by electronic banking technology through storage in computer systems and preventing access to it through coding and entry password.


The scope of the research work wire be limited to the Nigerian commercial banks, using Diamond Bank Enugu as a case study.

A study of this nature cannot be carried out without difficulties in the process one major limitation I foresee in this work is the scarcity of available data and material.

Another limitation I foresee in the problem of finance. A study of this nature would require a lot of financial commitment to enable the researcher move around especially in the area of questionnaire distribution.


In a highly technical topic of this nature it is necessary to define the major operational terms so as to put the reader and the researcher in the same position.

a.       AUTOMATED TELLER MACHINE 9ATM): This is an instrument through which electronic banking is carried out. It is a technological innovation in the banking system to enhance growth of payment system.

b.       UNITERRUPTED POWER SUPPLY (UPS): This is used to provide temporary power for about 45 minutes immediately power goes off.

c.       INFORMATION TECHNOLOGY (IT) : This has to do with the use of computers in providing human ad business solutions.

d.      SIGNATURE AND PRINTS VERIFICATION: This is used to identify the authenticity of signatures and thumb prints.


It is a financial instrument which provides an unparalleled opportunity to automate a large proportion of transactions to enhance operational efficiency and cost effectiveness and ultimately seen to be able to compete with notes and corns as medium of exchange.

f.                 MICR

MICR which is an acronym for magnetic Ink character recognition is a technology used to read encoded characters on cheques, encode sequence document etc.

g.               VSAT

It is a type of technology which has enabled banks link up to their remote branches in far locations with their head officers. This is facilitated through a satellite communications network.

h.              SWIFT

This is an acronym for society for word wide inter-bank financial telecommunications and it is a network made up  of computer based system located around the word and interconnected through telephone leased lines.

i.                 LOCAL AREA NETWORKS (LANS)

They are computers and peripheral devices close together linked by communication channels such as coaxial, or fibre optic cable. LANS may be linked to other or networks by a network gateway.

j.                 WIDE AREA NETWORKS (WANS)

They are country-wide and world-wide networks often using microwave relays and satellites.


Aladesulu S.O (1998)    Automation in Banking Industry” The Punch, Sept,                                  P.19

Aragba-Akpore. S. (1999)       “IT Paramount to 21st century Banking” The                                            Guardian Aug. P. 31.

Computer Plus (1997)   IT and Electronic Banking P.10

Njokanma J. (1999)       “Network Security for Banking Inspectors and                                         Auditors” The Guardian Aug. PP. 31-35.

The Financier (1998)     The Relevance of IT for Effective Ban                                                       Management. A publication of NABAFS                                                   University of Nigerian PP. 16-17.