CHAPTER
ONE
INTRODUCTION
1.1 Background
to the Study
Online
real time banking is a system allowing individuals to perform banking
activities at home via the internet. Some online are engaged in traditional
banking; enabling customers to perform all routine transactions such as account
transfers, balance, inquiries, bill payment and stop-payment request and
sometimes online loan and credit card application. Account information can be
anytime, day or night and can be done from anywhere. A few online banks update
information in real and availability time, while others do it daily.
Online
real time banking means immediate availability of deposited funds, most banks
except for a few smaller independent ones, hold funds for at least one banking
day. Basically, the money is in your account but you don’t have
access to it.
The new millennium brought with it new
possibilities in terms of their
information access and availability simultaneously introducing new challenges
in protecting sensitive information from some eyes while making it available to
others. To the business environment is extremely dynamic and experience rapid
changes as a result of technological improvement increased awareness and demand
banking to serve their customers electronically of controlling technology to
improve their product and services.
The
banking industry of the 21st century in a complex and competitive
environment is characterized by these changing condition and highly
unpredictable economic climate. Information and communication technology (ICT)
is at the centre of this global change curve in online real time banking system
in Nigeria today (Stevens 2002).
The
application of information and communication technology concept, technology,
policies and implementation strategies to the banking service has become a
subject of fundamental importance and concern to all banks and indeed a
prerequisite for local and global competitiveness banking.
The
advancement of technology has played an important role in improving service
delivery standard in the banking industry. In its simple form, Automatic teller
machines (ATM) and deposit machine now allow consumers to carry out banking
transaction beyond banking hours.
With online banking, individuals can
check their account balance and payment without having to go to the banking
hall. This gradually creates a cashless society where customers can pay for air
line ticket and subscribe to initial public offering by transferring the money
directly from their account, or pay for various goods and services by
electronic transfer of credit to the sellers account. As most people own mobile
phones, banks have also introduced mobile banking at some centers for customers
who are always on the move. Mobile banking allows individuals to check their
account balance and make transfer using their mobile phones. This was
popularized by now Skye banks through its “flash me cash” product customer can
also recharge their mobile phone via SMS. E-banking has made banking
transaction easier around the world and it is fast gaining acceptance in
Nigeria.
1.2 Statement
of the Problems
The banking sectors have been
operating manually in carrying out their operational functions. However,
research has made it possible to discover that there are better means and ways
to carry out banking operation and it makes works tedious and most times these
banks are faced with certain problems that has to do with financial transaction.
Some of these online banking problems which the bankers generally face are:
(i)
Lack of strong security system which
will prevent hackers.
(ii)
Lack of internet facilities and strong
network system.
(iii)
Unskilled customer representative.
(iv)
Improper awareness about the risk
involved in online banking.
(v)
Irregular updating of website by the
bankers to be line with the current trend.
1.3
Objective of the Study
The main objective of this study is
to know what is online real time banking operation on performance of banks in
Nigeria.
The secondary objectives are:
(i)
To determine how online banking operate
in Skye bank plc.
(ii)
To identify the problems of online
banking in Skye bank plc.
(iii)
To determine the benefit of online real
banking to the performance of
banks.
1.4 Significance
of the Study
The significant
of this study is that based on the effectiveness of this online real banking of
importance and fastness it will enhance peoples for proper business activities
in Nigeria. However, online banking
makes people to performed their businesses transactions all year round without
bordering about weekends. Finally,
It’s important to the banking sector and
generally to the society at large and it bring knowledge to the customers about
the existence of online real banking.
1.5 Scope
of the Study
This study is designed to cover the
performance of on-line real banking operations in Nigeria. The focus of this
research will concentrate on Skye Bank Plc. Kaduna State. The research work it
will cover from 2011 to 2015 which is a period of 60 months.
1.6 Research
Questions
These
studies intend to answer the following questions:
(i)
What is on-line real time banking?
(ii)
What is the impact of on-line real time
banking on the performance of Skye Bank, Kaduna?
(iii)
What are the benefits and the
disadvantages (if any) of online real time banking to the performance of bank?
Statement of Hypothesis
Hypothesis
can be defined as a tentative statement about the relationship between two or
more variables. A hypothesis is a specific testable prediction about what you
expect to happen in your study.
The following
hypothesis are formulated in null form to guide the study
H0: On-line real time banking is not
problematic in Skye Bank plc.
HI: On-line real time banking is problematic in
Skye Bank plc.
H0: On-line real time banking has no beneficial
impact in Skye Bank plc.
HI: On-line real time banking has beneficial
impact in Skye Bank plc.
HO: Adoption of on-line banking does not enhance
operating performance in Skye Bank plc.
H1: Adoption of on-line banking enhances
operating performance in kye Bank plc.
1.7 Definition of Terms
(i)
Access
product: product that allow consumers to access traditional
payment instrument electronically generally from remote locations
(ii)
ATM
card (Automated
teller machine) is a type of banking where Skye
bank customers can access their
accounts with their card and pin and check their balances, withdraw money,
Transfer, Bill payment and make
Subscriptions for their phone/handsets etc. This type of banking is a small
machine that can be found in banks and all around country depending from the
usage rate.
(iii)
Chip
card: also known as an integrated circuit (IC) card. A
card containing one or more computers chips or integrated circuit or
identification, data storage or special purpose processing use to validate
personal identification numbers of authorize purchases, verifying account
balances and store personal records.
(iv)
Internet
banking: this is a product that enables the bank leverage
and the internet banking system module in built on the new banking applications
(banks ) implemented by bank to serve the internet banking needs of the
bank’s customers.
(v)
Mobile
banking: This is a product that after customers of a bank to
access service as you go customer can make their transactions anywhere as
account balance, transaction enquiries, stop checks, and other customer’s
service instructions, balance enquiry account verification, bill payment,
electronic fund transfer, account balances, updates and history, customer via
mobile, transfer between account etc.ss
(vi)
Electronic
Web Collection: this enables the bank partner with
universities and higher institutions of learning to handle admission,
registration, examination management and fees collection needs. Electronic
admission by prospective candidate electronic school fees payment, automated
registration, and exam and result publication management.
(vii)
Smart
Card: a card with computer embedded on which financial
health, educational and security information can be stored and processed.
(viii)
Transaction
alert: our customers carry out a debit/ credit transaction
on their account and they need to keep track on these transaction prompted the
creation of alert system by the bank to notify customers of those transactions.
The alert system also serves as notification system to reach to out the
customers when necessary information need to be communicated.
(ix)
Access:
access is the ability right or permission to approach, enter, speak with, or
use admittance.
(x)
Products:
product can be defined as something produced by effort, or some mechanical or
industry processed.