AN APPRAISAL OF IMPACT OF ELECTRONIC
BANKING IN ZENITH BANK NIGERIA PLC, KANO
ABSTRACT
Electronic
banking is simply operating the banking system through the internet and it
signifies both global public network and a family of technologies. In Nigeria,
the banking industries are basically on-line at real time with web site which
is restricted only to information and also it restricts most of their dealings
to e’banking via the internet and not internet banking proper, effective cash
management via e’banking on the other involves managing the motives of a firm
in order to maximize cash availability and internet income in any idle fund via
e’banking for efficiency and effective purposes, e’banking helps quicken the
technology in recent globalization, but not withstanding, there are still risk
involve in e’banking but such is properly under control which was why the banks
restricted e’banking transaction within themselves with proper protocols to
check, with this in place customers are highly satisfied and the banking
sectors well fitted.
TABLE OF CONTENTS
Title
Page
Declaration
Approval
page
Dedication
Acknowledgment
Table
of Contents
CHAPTER ONE
1.1
Background of the
study
1.2
Statement of the
problem
1.3
Objectives of the
study
1.4
Significance of the
study
1.5
Research
Questions/Hypothesis
1.6
Scope of the study
1.7
Limitation of the
study
1.8
Definition of terms
CHAPTER TWO
LITERATURE
REVIEW
2.1
Introduction
2.2
History of banking
2.2.1Background
2.2.2History
of banking in Nigeria
2.3
Conventional banking
procedures
2.3.1Transfer
of Bank draft
2.3.2Telegraphic
transfer
2.4
The Clearing System
2.5
Electronic banking (e’banking)
2.5.1Electronic
banking products
CHAPTER
THREE
3.1
Introduction
3.2
Re-statement of
hypothesis
3.3
Population of the
study
3.4
Sampling technique
3.5
Sample sizes
3.6
Methods of data
collection
3.7
Methods of data
analysis
CHAPTER
FOUR
4.1
Data analysis and
interpretation
4.2
Table and sources of
survey
4.3
Test of hypothesis
4.3.1Hypothesis
I
4.3.2Hypothesis
II
4.3.3Hypothesis
III
CHAPTER FIVE
5.1
Summary and findings
5.2
Conclusion
5.3
Recommendation
Bibliography
Questionnaire
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The rapidly
unfolding development within the information technology in recent times has led
to resurgent calls for monies towards an effective cash management through Electronic
banking (i.e. E-Banking). In the last few years, within the banking industry in
Nigeria
several commercial products have designed by banks to improve the qualities of
services provided to customer. These products were also designed to meet the
increasingly sophisticated needs of finance managers in a cross section or
organizations operating in different sectors of the economy.
In recent
years, these have been an evolution from paper transfer system and ordinary
procedural cash management to an electronic transfer system and more secured
and sophisticated cash management. There has been introduced, an increased sophistication
in computer applications to cash management and in electronic funds
transfer.
It is the
responsibility of the finance manager to ensure proper management of a
company’s account receivable and payable amongst other tasks. Improper
management of these two important variables could result in losses arising from
inability to take interest because of too early payments. Overdraft and loan
interest charges could be incurred because of unnecessary working capital
borrowings. The task faced with the finance manager is accelerating collections
and showing a disbursement which is increasingly being done electronically.
The advert of
financial innovations such as electronic transfer in the payment system and
more recently, the launching of internet banking have transformed the worlds
into a global village linked with electronic impulses. Companies are usually
offered discounts if payments for certain goods and services are made within a
specified period according to the terms of credit.
Similarly, no
discount is been attracted when companies pay outside this period and this
discount loss can cost the company substantial income when aggregated over an
annual period. Companies also have to collect proceeds of sales quickly within
the allowed time frame to provide working capital. Failure to do so can lead to
working capital shortages prompting the company to borrow from banks at high
interest rates to fill the gap between sales and collection of proceeds.
Between 1989
and 1995, several banks have acquired the means to make payment very quickly
and transfer funds very quickly to cities in Nigeria within a few minutes of the
request. However, the concept of electronic money was introduced in 1996 when
the Federal Government through CBN gave approval to All States Trust Bank Ltd.
To offer a financial product known as the ESCA smart card, an electronic purse.
Subsequently, others followed. These innovations, which are still at a
relatively early stage of development have the potential to challenge the
predominant role of cash for making small value payments and makes retail
transactions easier and cheaper for finance managers. This is an invaluable
tool of it provides an enhanced cash management capability and use of
electronic funds transfer has resulted in greater economization of money
balances.
In an attempt
to elucidate on the use of Electronic Banking in cash management, this write-up
traces the history of commercial banks and origin of Electronic Banking,
provides an in-depth treatise of conventional banking. It goes further to
examine the role of Electronic banking in cash management, the advantages and
obvious concerns about security of funds.
1.2
STATEMENT OF THE PROBLEM
Financial
management is a key to the growth of any business perspective of the size and
geographical spread of the firm. As business conqueror their immediate
environment and spread to other towns and cities, it becomes more difficult to
exercise control over the finances of the firm. There is the need to deliver
funds to locations where it is needed and collect excesses from some other
locations across the country. A number of problems abound in the Cash
Management Service Department of any organization in Nigeria, such problems include the
following:
a.
Delay in collecting receivables and effecting disbursement
without considering interest and discounts that could be earned.
b.
Inefficiency in funds transfer from one town or region to
another.
c.
Ineffective handling or the increasing volume, complexity,
competitiveness, customer sophistication and globalization or financial
services.
d.
Misrepresentatives, misappropriation, and misunderstanding
the significance of an effective cash management through Electronic Banking.
e.
How to change the concept that technology remains as imported
commodity, which continues to depend on the availability of foreign exchange
for its consumption.
f.
Why many banks have not been able to automate their
operations.
g.
How effective is the use of Electronic Banking in cash
management?
h.
What services does Electronic Banking that makes it
applicable to cash management?
i.
Task and related misappropriation in organizational
management as a result of E-Banking.
Nevertheless,
solutions to these numerous problem will to a large extent, explain the roles
of Electronic Banking in Cash Management.
1.3
OBJECTIVES OF THE STUDY
The main
objectives of this research work are:
1. To highlight the important
task of the finance manager.
2. To show the essence of
Electronic Banking as an effective mean of cash management and their products.
3. To prevent a review of the
conventional banking procedure in cash management and the implication of the
source of every fund to the company. Hence the cost benefit.
4. To show the importance of
cash management in collection and disbursement as it affects discounts,
interest and loan/advance charges and the implication and recommendation
computer to the aid of management.
5. To take into cognizance
the modus operandi, and limitation of conventional banking procedure, which
serve as a launching pad for the introduction of electronic banking.
1.4
SIGNIFICANCE OF THE STUDY
This work will
go a long way to benefit:
a.
Researchers who wish to have ideas as to the various measure
or strategies that might be employed in effective cash management through
Electronic Banking.
b. This research work will
also expose some likely problems encountered implementing measures/strategies
embarked upon in an effective cash management through Electronic Banking.
c.
It will provide a frame work or reference to practitioners
either in academics or in the business world as will as to bankers, accountants
and investors.
d. It will go further to some
as a foundation for researchers who may wish to further their research in this
field.
1.5
RESEARCH HYPOTHESIS
The hypothesis
of the study are been formulated and will be based on the objective of the
study such as;
1. Ho: If appropriate skills are not developed in Management
Information
System (MIS), then there will be poor performance.
HI: If appropriate skills are
developed in Management Information System (MIS), there will be excellent
performance and employee efficiency.
2. Ho: When banks do not acquire the necessary advanced technology,
they will lose customer’s confidence and will not be efficient and effective.
HI:
When
banks acquire the necessary advanced technology, they will gain customer’s confidence and will be
efficient and effective.
3. Ho: When effective control
measures are not backed by complementary measures such as; passwords,
protocols, encryptions e.t.c. fraudulent activities can not be checked.
HI: When effective control
measures are backed by complementary measures such as passwords, protocols and
encryptions, fraudulent activities can be checked and controlled.
1.6
SCOPE OF THE STUDY
This topic of
study is towards an effective cash management through Electronic banking.
Problems and prospects, a Case Study of Zenith International Bank Plc.
Therefore the research covers the problems, objective of the effective Cash
Management through Electronic banking as well as the significance of it,
limitations or possible problems and consequences, solutions and authentic
recommendations.
1.7
LIMITATIONS OF THE STUDY
The
limitations of this research work are catalogued below:
1.
The practice of approving project topics at the end of the
first semester by the department does not allow enough time for proper
research, and this was a great constraint to the researcher.
2.
This study was carried out without the required expert skills
by the researcher in computing to venture into a topic of this nature which is
very technical.
3.
Hesitation on the part of the respondents to divulge valuable
information was also a constraining factor.
1.8
DEFINITION OF TERMS
Account: The recording in the ledgers of the financial transactions
that occur and the use to which the records are put, their analyses and
interpretation. Hence it shows the receipts, the expenditure and outstanding
balances.
Bank: A financial house coordinating the applicable to
finance recording account deposits and withdrawals of a customer. The bank
sends a statement to its customer at agreed regular intervals.
Bills of Exchange: An unconditional order in writing,
addressed by one person to exchange another, signed to whom it is addressed to
pay on demand, or at a fixed or determinable future time, a sum certain in
money to, or to the order of a specified person or bearer.
Book-Keeping: This is the actual record making
phase of Accounting.
Cash: Consist of the firms holding of currency and demand
deposit, with demand deposit being the most important for most firms. It is an
Asset and a scene resource which must be conserved and earn a reasonable return
for the company.
Cash Management: Involves controlling the investment
in current assets, which involves managing the movies of a firm in order to
maximize cash availability and interest income in any idle funds.
Clearing House: The clearing house committee of
Nigeria Clearing Bank situated in the premises of CBN in Lagos and some other cities. Representatives
of each of the clearing banks attend there each business day to exchange bills
of exchange and cheques, etc. drawn upon each other and settle for them.
Computer: An electronic device designed to
store and process large of data at high speed. Input is by paper, punch cards,
and magnetic disc. Output is by high-speed printers or visual display unit.
“Most customers’ account in the banks is kept in the money stores of computers
and updated daily”.
Credit Cards: This is an electronic device that
has the potential to challenge the predominant role of cash for making small
value payment and makes retail transaction easier and cheaper for customers and
merchants.
Electronic Banking: This is simply operating the banking
system through the interact and the internet signifies both “global public
network and a family of technologies, thus, a pivotal element of electronic
commerce.
Encryption: Widely used as a specify measures to
protect internet messages. This technique make use of keys to encode and decide
messages e.g. Kerberos and Digital Encryption Standard (DES), RSA and PAP.
Information Technology: This is nothing but a department made
up of a units. The software, hardwares and operations unit. These units though
are separated but work as a team to ensure that the common goal of excellent
service delivery is achieved.
Online: This means that there is an active connection between
two computers or between a terminal and a host computer.