Comparatively recent phenomena in innovations are the banking profession in Nigeria. It is a development of the electronic banking that really has taken the attention of the country banking industry. It processes data by the strategic combination of most recent employers. It aims at increasing the pace of data, processing which has being the problem of Nigeria’s banking sector since the inception of the country. Each sector of the bank involved in on-line banking is deeply connected to the complex computer network such that the account number of any customer appears on the computer of any branch. This is meant to facilitate depositing and withdrawing.
A customer can draw a cheque on any branch of the same bank any here in the country being connected by computer network. As he approaches the bank, his particulars anywhere appear through the connection of computers so that he cashes his money to go about his business. Because he can do this anytime, it is called on-line real-time banking. Due to the extensive nature of customer connection, any bank which practices on-line real-time banking has the ability to combine commercial and merchant banking as is obtainable in most part of the advanced Western World. Nigeria is still new to the system expect with the new generation banks, some of which we have chosen for a closer study of the work: Diamond Bank and Zenith Bank
DEVELOPMENT OF ON-LINE BANKING
Apart from the enhancement of internal operations, control and management, the modern information revolution has contributed in interactions with the environment in two broad ways. This is aside potential areas for future development which will be realized in no distant future. The two areas are funds transfer and telephone banking.
- Domestic Funds Transfer
- International Funds Transfer
- Domestic Funds Transfers:
The bank could fashion out means of inter-city transfers. The mode of service makes it convenient for “cash friendly” customers like traders to move large sums from one area to another. Also with the high rate of armed robbery, it is the most convenient service for suck customer.
For companies, particularly oil companies and pharmaceutical companies, such facilities would make it convenient for them to pool funds from their various up-country locations.
Some banks have gone a bit further by introducing “fund cards” like the Credit and debit cards. These are effective marketing techniques to satisfy customer needs.
INTERNATIONAL FUNDS TRANSFER
Under this service, the bank could offer:
- An integrated on-line real banking system which enables it to effect customer payment instructions of various parts of the world within 24 hours.
- In addition to (i) the bank would offer competitive market rates of interest payable from the value dates and in line with those obtainable offshore to the currency of deposit.
- Effective application of hard currency deposits towards the funding of customers’ documentary credit books, journals, equipment, raw materials, etc.
- Immediate conversion and credit of naira value to customers.
Telephone banking operations going on in the industry showed that Nigeria is rising to the challenges of today’s global financial services industry by operating in an environment of extraordinary information liquidity. Goaded by the quest to decongest their banking ha11 and provide more precise, and timely financial information to customers without their physical presence. Nigerian banks are increasingly taking to telephone banking. This is not only intended to change customers’ banking habits over time, but also their expectations.
Although it is not clear which bank pioneered it in Nigeria, tele-banking is also a function of banking software technology adopted by individual banks. The concept is spreading like bush fire.
The clamor for tele-banking is because it allows the customers access to banking services from the comfort of their bedrooms, office armchairs or with their cars in motion just by dialing a designated number of a particular bank.
Specifically the service allows the customers to check their account balances, transfer money between their own accounts in same bank and check details of transactions on their accounts. It also enables them to order for new cheque books, confirm or stop cheques and change their pass codes.
Aside the intention of saving customers’ time and effort of visiting a branch, telephone banking is also brightening customer expectations, greater efficiency and instant response to their needs. This is in addition to their electronic communication network and computing power which is growing with rapidly declining costs, showing more sophisticated changes in banking technology.
All that a customer needs to enlist for any of the services and get a fire tele-banking card is to fill out a form indicating his name and account number after which he/she would be issued with a pin number and account activated within 24 hours.
At Diamond Bank, the brand name is Diamond Dial Account (DIAI,). Customer relations manager, Mrs. Angela Olisah-Okonmah traced the dial account to the bank’s concept of the shortest service turnaround times which was why when Diamond Bank started. It made no provisions for seats for customers. But over the years, the bank’s customer base has widened with the result that more customers are increasingly seen in the banking halls. She said that studies showed that many of the customers came to the banking hall to queue just to obtain their account balances before they can issue cheques. She said that it was to reduce the frequency of customers to banking hall and reduce dissatisfaction inherent in such frequent visits that the bank introduced the Dial Account so that those who want new cheque books and balances of their account so that those who want new cheque books and balances of their account could use the tele-banking service. Specifically, she argued that Dial Account is intended to offer the customers security, low transaction, personal safety, confidentiality, control, convenience, speed and courteous service. The Dial Account which is also used for transfer between accounts, stop cheque payment order, and utility payment, reduces and most times, eliminates customers spending equal time at branches.
Similarly, at Equatorial Trust bank, telephone ban king dates back to the bank’s installation of a Compaq Proliant 7000, a faster and higher capacity server and the upgrade in application software fro111 Globus 7.2 to 9.2 and switch from At & T, Unix to UnixWare 7.1 operating system which reduced its end of day processing and improved in service turnaround time.
The bank followed this upgrade by enhancing its voice and data connectivity system at the cost of N100 million. This helped to establish the bank’s remote electronic banking system which allows customers to conduct their banking transactions from the comfort of their homes and offices 24 hours a day, seven days a week with the aid of a computer or a telephone. The bank’s acquisition of Aperts REB., a leading product in remote electronic banking software also helped it. Xpert Red consists of two parts- Xpert red PC bank and Xpert red tele-bank for PC and telephone access respectively. With the tele-bank, customers from any part of the world log on to their accounts and download information- account, cheque details among others.
Apart from that, through tele-banking, customers are able to access their accounts through telephone and obtain the needed information either by voice or their fax machines anywhere anytime.
ETB markets its tele-banking with the brand name of ETB WorldNet. Tele-banking is essentially about reducing costs through efficiency, through the ability to attend to customers who phone in instructions. Every naira saved by use of telephone rather than going to the banking hall means an extra naira for the customer.
HURDLES TO ELECTRONIC BANKING
The constraints inhibiting Nigerian banks from translating the seamless opportunities of the information technology (IT) revolution into competitive advantage in the emerging global electronic banking (e-banking) order have been identified to include:
- Lack of investment capital;
- Lack of knowledge of how to develop system internally;
- Lack of internal maintenance skills or culture;
- Lack of IT management knowledge;
- The absence of I?’ strategies;
- Systems downtimes; and
- The gimmick of vendors.
Other militating factors are absence of basic infrastructure and facilities for information exchange, unhelpful government action, reluctance among banks to collaborate and absence of maintenance culture in Nigerian public networks.
On the inability of the banks to develop IT systems internally and their maintenance culture short-comings, it was noted that “in all the banks, most of the systems in use were developed externally or are off-the-shelf banking applications. “There is a need to turn the IT departments of banks into proper computer departments by embarking upon the development of some of their system in-house and training their IT personnel. There is too much reliance on external consultants for the maintenance of the systems in Nigerian banks. In a situation where most of these banks are already suffering from lack of funds, this is unfortunate. They would save on expenditure and enhance local expertise if they embrace the do-it-yourself practice”, Wolherem said.
According to him, lack of maintenance of the public networks has often led to breakdowns in most of the equipment required for information exchange-even as he identified some government policies and decrees to be “counter-productive to the development of certain key private telecommunications projects”.
As a strategic option of moving the banking industry forward and over the inhibitive factors in areas of communication problems and challenges, he canvassed a face point agenda which must urgently implemented by the government and the stakeholders in the industry. These include that:
- Government should be sanitized about the need to formulate policies that allow for long-term investments in the telecommunications industry; and
- Emphasis should be placed on the importance of maintaining existing infrastructure and equipment.
- Other recommendations canvassed by the expert are, a reduction in import duties, tax and the time it takes IT equipment to be cleared at the customs and the need to increase awareness among the banks and the public on the advantages of IT and communications.
- BACKGROUND OF THE STUDY
Banking profession started in Nigeria as far back as 1892 with the business acumen of Elder Dempter who was a harbinger to it. His work and connection crystallized to the formation of international Bank for British West Africa, the present day first bank of Nigeria. This bank monopolized banking services in the country until 1917 when the present Union Bank was established. Many literate Nigerian started itching for a truly African Bank capitalized from African inputs. ‘Thus in 1925 LadipoSholanke said: “with words profound and heartfelt to the yeaning of my fellow country for their own bank, I make haste to submit that it was timely to think of having a truly Nigerian Bank with full participation of Nigerians which only serves as the only avenue to buttress the fact that the future of Nigeria to gain political and economic freedom is in the hands of Nigerians themselves”.
As if he was prophesying, the first true indigenous bank-National Bank of Nigeria – NBN was established in 1932. From then, precisely between 1932 and 1947, horde of indigenous banks flooded into theeconomic of Nigeria. Speaking at the inauguration of National Bank