Electronic Banking in Nigeria: Problems and Prospects

 

 

by Iloh Mmesoma

It is an unequivocal fact that on daily basis the world experiences new inventions, innovative ideas and technological advancement and these inventions spread across various continents of the world including Africa.

Electronic Banking today is one out of the thousands of technologically advancement paving ways in Africa especially Nigeria. It has made banking easier and as a matter of fact created mobile service for bank users. Electronic Banking is however a critical variable with national standard improving capacities and posses several advantages:

ADVANTAGES

·        Expenditure monitoring: the advent of electronic banking has helped immensely in the aspect of expenditure monitoring in regards to customer monetary consumption. This however improves prudence and adequate recording capabilities of the customer in other to know where to draw the line in regards to spending. Spending rates previously unrecorded by customers can now been recorded through electronic banking. It is also evident to know that some banking application go extra miles to give diagrammatic representation of how expenditure was made at a particular period of time.

 

·        It is economizing : considering the fact that on daily basis people spend large amount of money purchasing fuel (even at unstable price rates) for their vehicles and jumping from one bus to another shows that electronic banking is however a more prudent means of money transaction. The money supposed to run those transportation expenses if saved will be of positive value to the customer.

 

·        Barrier of Location: electronic banking has however assisted to curb the dependence of customers of certain locations of banks in other to engage in their transactions. One can cross his legs at home and make transfer and reception of huge amount of money even without stepping his foot at a bank next door or waking up early in other to avoid overcrowding at the bank. Electronic banking by this undoubtedly reduces congestion at bank locations.

 

·        Time saving: Electronic banking saves the time of both the customer and the time of the banking officials. Hours spent engaging in rigorous and stressful transaction processes at the bank can be saved and used for something meaningful and beneficial. Thus, electronic banking has the tendency to encourage multitasking which is a positive working variable.  

·        Efficient International transaction systems: Electronic banking has however made the world a global village. Through electronic banking, transaction can be made between people living in Nigeria and other foreign counterparts at the twinkle of an eye without the stress of going to the bank and standing on long queues before being attended to. Also, in the aspect of trade, through electronic banking you can pay for products purchased in other countries thus making Nigeria rub shoulders with other countries in global market participation.

 

·        Relief Industrial: through the advent of electronic banking organizations and industries no longer need to stress themselves getting business associates money to the bank. Just by clicking few buttons on the computer or electronic gadgets huge amount of money can be received and transferred between organization and other organization or organization and employees. This method has enabled banks to minimize the cost of labor and the cost of supply by making the customers to handle certain transactions by themselves instead of the banking officials handling it. This is an industrial benefit for banks in Nigeria.

 

·        Mobility: Electronic banking has helped to make banking at ones finger tips. Customers can receive alerts; make transaction local, national and international at the shortest time. This however has curbed the rigidity associated with manual banking.

DISADVANTAGE

 

Although electronic banking can be said to be a positive development as far as Nigeria is concern, it also has its own loop holes which if critically examined will lead to utmost technological and National growth.

 

·        Fraud: This is however a termite that has eaten deep into the fabrics of the electronic sector. People now pose who they are not to withdraw other people’s money while some others hack into people’s account and transfer their money to their own account without the owner’s consent.

 

·        Hackers: Banks now suffer the risks of being attacked by internet hackers who withdraw bank owned money for their own personal use and in turn put the innocent ones put in charge of overseeing the money at the risk of losing their jobs.

 

·        Unemployment: electronic banking has made human labour less and thus has reduced employment because the bank authorities believe that if the computers can and customers can do the transactions on their own then there is no need to employ staffs to do such work. This however consciously and subconsciously reduces employment

 

·        Poor internet connection: This is another disadvantage of electronic banking, a developing country such as Nigeria is faced with the problem of poor internet connection which is actually the power house of any electronic banking activity and so in a case where the internet connection is poor there is bound to be transaction failures and sometimes in case of money transfer one can get debit alert without the receiver confirming the transaction. 

 

 

SOLUTIONS

 

·        Quality Internet security Service: This is however one of the areas which Nigeria’s electronic service is facing a setback. If there can be good and quality internet security service then there is a certainty of having more electronic banking users. Those in charge of the security aspect should try to pull resources together to see that a strong security electronic banking system is put in place.

 

·        Anti-hack systems: Introduction and implementation of anti hack systems to Nigerian Banks will go a long way to improving electronic banking system in the country. Proper alert system should also be attached to accounts of customers in case of illegal or unauthorised access.

 

·        Apprehended fraudsters should also be made to face the law in other to discourage others in the business or who harbor the thought of venturing into it. If adequate punishment is meted out to deviants then electronic banking has a higher possibility of being embraced by many.

 

·         Public enlightenment: The Nigerian public needs to open their eyes to the activities of fraudsters. Banks should notify their customers to take necessary precautions. The government should also create more awareness on the techniques used by fraudsters. This can be done by making use of the radio and television. This will keep Nigerians at an alert.

 

·        Recruitment of Qualitative Staffs: In recruiting and employing staffs to occupy such sensitive positions such as internet banking, credible and loyal individuals should man the position in other to avoid leaking official secrets or siphoning of funds belonging to individuals and organization.  Also, selection should be made based of qualification and not favouritism in other to achieve positive output.