This research evaluates the importance of internet banking as an organizational tool and it’s influence on banking activities as well as customer satisfaction practices. It also examines the meaning of internet, it’s workability, the application of internet on banking operation, the benefits of internet banking and the challenges of internet banking. The emerging trend in internet banking in Nigeria is of global concern for one thing the Nigerian economy is a strong force in Africa. On the home front, bank frauds, forgeries, money laundry, insider abuse and erosion of public confidence constitute a set of disturbing issues in the present-day Nigerian banking system. This explains why regulation has become of paramount importance in the entire internet banking development process. It identified lapses in the existing regulations of internet banking and argues that without a comprehensive regulation and improved access to information infrastructure it might be difficult for meaningful advances to be made in this field of banking. For the banking industry to move forward technologically at a faster rate, there is need for the nation to be adequately connected to the global village provided by internet facilities.
- Background of the study
Few decade ago, banking activities were obsolete and less complicated, this is because an account holder cannot perform any transaction except he or she is on the banking floor. When customers open savings account, they received passbook from the bank with which the account would be operated; and when it is a current accounts, they received cheque books for the same purpose. Today, the banking industry has moved into an era of menu-driven ultra robust specialized software programmes called banking applications. These application is made possible with the aid of ICT or internet service provider (ISP) and this application are electronically driven. The application of electronic banking products/services to banking operations has become a subject of fundamental importance and concerns to all banks operating within Nigeria and indeed a condition for local and global competiveness. The recent consolidation exercise in Nigerian banking sector has drawn the attention of many banks to application of various technological devices in promoting/achieving better customer
service delivery that guaranteed customer satisfaction that translates into increase profitability and higher return on investment. Timothy (2012), customer’s satisfaction holds the potential for increasing an organization’s customer base, increase the use of more volatile customer mix and increase the firm’s reputation. Consequently, obtaining competitive advantage is secured through intelligent identification and satisfaction of customer’s needs better and sooner than competitors and sustenance of customer’s satisfaction through better products/services. Technology is then essential in providing faster and more efficient services to customers. Technology acquisition must be based on actual needs and the proven ability to deliver customer friendly solutions. But with globalization, Nigerian banks have no choice but to adopt electronic banking services to enhance effective service delivery that transcends to customer satisfaction, if they really want to stay in the business race, let alone be profitable (Madueme, 2009). But it should be realized that electronic banking services is a brain child of Information and Communication Technology (ICT) that made it possible for service providers and their customers in developing economies to enjoy a good semblance of the services enjoyed in the developed societies. Electronic banking services have afforded banks the opportunities to impress customers which encourage them to keep coming back. Today, it would be difficult to see any bank in the country that does not render one form of electronic banking service or the other, even banks in the most remote parts of the world.
- Statement of problem
As interesting and efficient as the internet banking is, it has it’s own challenges in an emerging economy like Nigeria. Internet banking offers a lot of opportunities to both the bank and the customers as banking can now be done at the comfort of our homes, fund transfer at our finger tips, bills payable is now a thing of the past, all these is made possible because of internet banking. However the challenges of internet banking in Nigeria has been that of unreliability of the network system that the banks used it is on this backdrop that the researcher intend to investigate the challenges posed by internet banking on commercial bank in Nigeria.
1.3 Objective of the study
The main objective of the study is to ascertain an appraisal of internet banking on commercial banks in Nigeria with emphasis on GTBank. However, for the successful completion of the study, the researcher intends to achieve the following sub-objective:
- To ascertain the challenges of internet banking in Nigeria.
- To ascertain the impact of internet banking towards customer satisfaction.
- To evaluate the relationship between internet banking and profitability.
- To ascertain the role of internet banking in the development of Nigeria banking sector.
- Research hypothesis
H0: there are no significant challenges in the adoption of internet banking in Nigeria
H1: there are significant challenges in the adoption of internet banking in Nigeria.
H0: internet banking does not have any significant impact towards customer satisfaction
H2: internet banking has a significant impact towards customers satisfaction.
- Research question
For the successful completion of the study, the following research question were formulated:
- What are the challenges of internet banking in Nigeria?
- What are the impacts of internet banking towards customers satisfaction?
- What is the relationship between internet banking and profitability?
- What is the role of internet banking in developing the Nigerian banking sector?
- Significance of the study
It is perceived that at the completion of the study, the findings will be of great importance to the management of banks as the study gives them an insight to the enormous benefit of internet banking, the study will also be of great importance to the regulators of the banking sector in curbing cyber crime, the study will also be of great importance to researchers who intend to carry out a study on a similar topic and finally the study will be of great importance to academia’s as it will add to the pool of knowledge.
- Definition of terms
The act of judging the value, condition or importance of something
Internet banking also known as on-line banking, e-banking or virtual banking is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution’s website. The internet banking system will typically connect to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services.
A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.
- Organization of the study
This research work is organized in five chapters, for easy understanding as follows, Chapter one is concern with the introduction which consist of the (overview of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study.
- Brief history of GTBank
Guaranty Bank plc also known as GTBank is a Nigerian multinational financial institution that offers Online/Internet Banking, Retail Banking, Corporate Banking, Investment Banking and Asset Management services, with it’s head office in Victoria Island, Lagos.
Guaranty Trust Bank plc was incorporated as a limited liability company licensed to provide commercial and other banking services to the Nigerian public in 1990. The Bank commenced operations in February 1991, and has since then grown to become one of the most respected and service focused banks in Nigeria.
In September 1996, Guaranty Trust Bank plc became a publicly quoted company and won the Nigerian Stock Exchange President’s Merit award that same year and subsequently in the years 2000, 2003, 2005, 2006, 2007, 2008 and 2009. In February 2002, the Bank was granted a universal banking license and later appointed a settlement bank by the Central Bank of Nigeria (CBN) in 2003.
Guaranty Trust Bank undertook its second share offering in 2004 and successfully raised over N11 billion from Nigerian Investors to expand its operations and favourably compete with other global financial institutions. This development ensured the Bank was satisfactorily poised to meet the N25 billion minimum capital base for banks introduced by the Central Bank of Nigeria in 2005, as part of the regulating body’s efforts to sanitize and strengthen Nigerian banks.
Post-consolidation, Guaranty Trust Bank plc made a strategic decision to actively pursue retail banking. A major rebranding exercise followed in June 2005, which saw the Bank emerge with improved service offerings, an aggressive expansion strategy and its vibrant orange identity.
In 2007, the Bank entered the history books as the first Nigerian financial Institution to undertake a US$350 million regulation S Eurobond issue and a US$750 million Global Depositary Receipts (GDR) Offer. The listing of the GDRs on the London Stock Exchange in July that year made the Bank the first Nigerian Company and African Bank to be listed on the main market of the London Stock Exchange.
In December 2009, Guaranty Trust Bank successfully completed the first tranche of its $200 million corporate bond targeted at increasing the depth of its operations in West Africa and Europe in the next couple of years.
In May 2011, the Bank successfully launched a US$500 million bond – the first non-sovereign benchmark bond offering from sub-Saharan Africa (outside South Africa), to the international community. The highly successful offering which matures in 2016, went further to show the international finance community’s believe in the GTBank brand.
In 2013, the Bank issued a USD 400,000,000 Euro bond at a coupon rate of 6%; the least obtained by a Nigerian company in the international capital market. The Eurobond was issued under the USD 2,000,000 Global Medium Term Note Programme which is registered under both Regulation in the United State of America and Rule 144A in the United Kingdom and sold to investors across Africa, America, Asia and Europe.
This material content is developed to serve as a GUIDE for students to conduct academic research
AN APPRAISAL OF INTERNET BANKING ON COMMERCIAL BANK IN NIGERIA (A CASE STUDY OF GTBANK)>
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