Impact of ICT and related problems on online banking in Nigerian Banks

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Assessment of the impact of Information and

Communication Technology (ICT) and related problems

on Online Banking in Nigerian Banks

Prepared By

Taufiq Hail Ghilan Al-Madhagy email:[email protected]

Contribution of the following

Emad M. Muftah akash

Salam

Denen Damian Nyakuma

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Table of Contents

Abstract ..................................................................................................................... 5

Introduction ............................................................................................................... 6

Research Problem ...................................................................................................... 7

Research Objective .................................................................................................... 7

Objectives of the Study .............................................................................................. 7

Research Questions ................................................................................................... 8

Chapter One Introduction .......................................................................................... 8

Significance of Study ................................................................................................. 8

Scope of Research ..................................................................................................... 8

Organization of the Thesis ......................................................................................... 9

1. Literature Review ......................................................................................... 9

2. Historical Background on Nigerian Banks ........................................................ 9

3. ICT in Bank industry in Nigeria ................................................................. 11

a. Global Systems for Mobile Communication (GSM) ............................. 12

b. Internet Banking ................................................................................... 12

c. Automated Teller Machines (ATM) ..................................................... 13

d. Telephone banking technology ............................................................. 13

e. Adoption of ICT integrated project ...................................................... 13

f. E-mail .................................................................................................. 13

g. Banker Automated Clearing Services ................................................... 14

Theoretical Framework ............................................................................................ 14

1. User characteristics..................................................................................... 14

2. Usage of Internet Banking (IB) ................................................................... 15

3. Security Concerns ...................................................................................... 16

4. Intermittent Services Concern ..................................................................... 16

Chapter Three Research Methodology ..................................................................... 17

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1. Sampling Design ........................................................................................ 17

2. Instrumentation .......................................................................................... 18

3. Data Collection........................................................................................... 19

4. Data Analysis ............................................................................................. 19

5. Limitation and Delimitation ........................................................................ 19

Results and discussion ............................................................................................. 20

1. The respondents’ demographic and User Characteristics ............................. 20

2. Usefulness (M) ........................................................................................... 23

3. Ease of Use (IV) ......................................................................................... 25

4. Intermittent Services Concerns (IV)............................................................ 27

5. Security Concerns (IV) ............................................................................... 30

Conclusion .............................................................................................................. 33

Reference ................................................................................................................ 34

Appendix ................................................................................................................. 37

Table 1 ........................................................................................................................................................... 15

Table 2 ........................................................................................................................................................... 23

Table 3 ........................................................................................................................................................... 25

Table 4 ........................................................................................................................................................... 27

Table 5 ........................................................................................................................................................... 30

Table 6 ........................................................................................................................................................... 33

Figure 1 Theoretical Framework .................................................................................................................... 14

Figure 2 .......................................................................................................................................................... 37

Figure 3 .......................................................................................................................................................... 37

Figure 4 .......................................................................................................................................................... 38

Figure 5 .......................................................................................................................................................... 38

Figure 6 .......................................................................................................................................................... 38

Figure 7 .......................................................................................................................................................... 39

Figure 8 .......................................................................................................................................................... 39

Figure 9 .......................................................................................................................................................... 39

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Figure 10 ........................................................................................................................................................ 40

Figure 11 ........................................................................................................................................................ 40

Figure 12 ........................................................................................................................................................ 40

Figure 13 ........................................................................................................................................................ 41

Figure 14 ........................................................................................................................................................ 41

Figure 15 ........................................................................................................................................................ 41

Figure 16 ........................................................................................................................................................ 41

Figure 17 ........................................................................................................................................................ 42

Figure 18 ........................................................................................................................................................ 42

Figure 19 ........................................................................................................................................................ 42

Figure 20 ........................................................................................................................................................ 43

Figure 21 ........................................................................................................................................................ 43

Figure 22 ........................................................................................................................................................ 43

Figure 23 ........................................................................................................................................................ 44

Figure 24 ........................................................................................................................................................ 44

Figure 25 ........................................................................................................................................................ 44

Figure 26 ........................................................................................................................................................ 45

Figure 27 ........................................................................................................................................................ 45

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Assessment of the impact of Information and Communication

Technology (ICT) and related problems on Online Banking in

Nigerian Banks

Abstract

The recent and emerging development in today’s technology has driven the business

trend to adopt these technologies to improve productivity, expandability, performance,

innovation and all aspects that increase prosperity ongoing development of new sources of

income while decreasing the costs. Banks are one of the major players of today’s business

developments, which adopt ICT in their daily activities. This Study employed quantitative

approach using an online survey of questionnaires and respondents to collect information on

ICT related problems on online banking in Nigerian Banks. SPSS was also made use of in the

analysis. The study revealed that ICT related a problem on online Banking has an impact on

banks. We try to get insight of the major factors affecting the business of banks as an impact of

adopting ICT and study the problems surrounding the use of ICT that impact the usage on

online banking services in Nigerian banks.

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Introduction

The emerging and fast growing advancement in communication and information

technology have led to changing behavior of business operations on daily bases. Banks are one

of the major sectors of business that adopted ICT and changed the nature of banking

conventional activities. The internet banking is now a must to adopt for banks in the developing

countries and it is observed that a wave of change in many developing, and specifically the

African, countries have adopted these technologies to follow the queue of the advanced

developed countries in this vital sector of business. Customers can now transfer money, access

their accounts, online shopping, get bank statement, pay their bills, and conduct other

transactions that took a long time of process in the past. Adopting ICT has brought a lot of

success stories, saved cost, brought efficiency and convenience to customers as in (Cheng, Lam

&Yeung, 2006).

Surveys conducted in the U.S during the period of 2008-2009 shows that there isn’t a

rapid increase of the users using internet banking as perceived according to the fast growing

number of users using the internet (Cheng, Lam &Yeung, 2006; eMarketer,2012; Forrester

Research, 2011).

In spite of the users of online bank services that are using these services and enjoying the

convenience, they show a great concern of leakage of their financial information and related

security issues. According to a study performed by (Edwards, 2010) showed that 51.2% of U.S.

consumers and 60.3% of Canadian online users do not trust the security of mobile banking. On

the other hand, the category that do not use online and do not trust the Internet banking services

are 21.7% of U.S. and 26.2% of Canadians. Furthermore, all categories, that trust and use or the

others not adopting online services or not trusting, trust the branch or physical banks with 84%.

As a result of these security concerns, many are reluctant to use these facilities provided by

banks(Cheng, Lam &Yeung ,Yeung, 2006); eMarketer, 2012; Edwards, 2010).

In addition to the security issues related to the impact of ICT usage by customer, the

intermittent services in Nigeria are another major factor that the adopters, of ICT facilities in

banks, suffer from and have a big concern in using such services. We noticed that there is a great

gap between adopting ICT and the issues that impact the usage and popularity of online banking

using ICT. For these reasons, the aim of our study is to investigate the factors that have negative

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impacts on online banking in Nigerian banks but focusing on the security and intermittent

service concerns.

Research Problem

The ICT on banking sector has been implemented in Nigeria since the reform of banking

sector in 2004. The migration and integration on small sized banks to become larger ones has

taken place and lots of developments on the operation of banks has benefited from the ICT in

regard to profitability, usability, performance, expansion, and many other benefits. On the other

hand, implementing ICT has suffered from intermitting services and lack of trust from wide

sector of populace to adopt online services due to security issue concerns. The gap between

using ICT and problems surrounding the obstacles of security and intermittent services has

affected the bank industry and limited the raise of number of online users in Nigeria. This gave

motivation for our study to look for the reasons of intermittent services and impact of security

issues on the usage of online banking services in Nigerian banks.

Research Objective

Objectives of the Study

The broad objective of this study is to identify Information and Communication

Technology related problems on the usage of online banking services in Nigerian banks

security and intermittent services effects on it. The specific objectives of the study are;

1. To determine the extent of ICT related factors influencing the usage of online

banking services.

2. To test the influence of security concerns that clients have on the usage of online

banking services.

3. To measure the impact of intermittent services on the online banking usage.

4. To gain insight of the impact of level of education on the usage of online banking.

5. To ascertain the contributions of ICT application process in banking usage,

popularity, and performance.

6. To determine if ICT has improved the service delivery to clients in Nigerian banks

and gained their support in utilizing the innovative e-services.

7. To determine if ICT improved the services rendered by Nigerian banks.

8. To obtain insight if ICT has an effect of the application of ICT in banking services.

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Research Questions

In the light of the preceding objectives, the study seeks to answer the following

questions.

1. What is the extent of ICT problems influencing the usage of online banking

services?

2. What are the factors influencing the usage of online banking services?

3. How do security concerns affect the online banking services usage?

4. Does the intermittent service have an impact on the online banking services?

5. What extent does ICT related problems influence bank performance?

6. Does the level of education have an impact on the online banking usage?

7. What are the contributions of ICT application process to bank performance?

8. Did ICT improved the service delivery to Nigerian banks’ clients and gained their

support in utilizing the innovative e-services?

9. Has ICT improved the services rendered by Nigerian banks?

Chapter One Introduction

Significance of Study

It is hoped that the outcome of this study will add up, or in other words, contribute to existing

studies especially with regards to the impact of ICT and related problems on online banking

as well as barriers and challenges encountered through their transition to adopting ICT.

Scope of Research

The banking industry in the whole world is on a wheel of change the covered all aspects

of bank business and changed the traditional way of bank operations. The African countries

have, in the last decade, made a jump in the reform and usage of ICT and Nigeria is one of the

major players in banking industry in Africa. Thus, in this study, we focused on the effects and

impacts of the ICT usage and the problems related to it in the bank sector in Nigeria.

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Organization of the Thesis

1. Literature Review

A survey was conducted by (Agbola, 2001) on six major banks that had been operational

for longtime, had built a wealthy experience in banking industry, had fast growth, and high level

of technology adoption in their operations. A questionnaire developed to grab the customer

satisfaction or not on services provided by banks. The study has revealed that there are number

of problems associated with banking automation on customers. The frequent system breakdown,

black-out/power failure, lack of cordial interaction with staff, and posting errors and

manipulation of figures are the major issues under focus. The findings shows that 46% of the

respondents indicate that frequent system break down is the on the first degree of concern which

can cause to loss of customer’s data and hinder them from withdrawing the urgent cash they

needed. The second in position is the power failure 29.7% which causes accessing the customer

accounts impossible and leads to huge losses in addition to inconvenient atmosphere for the

customers to remain in banks in very hot climate (Agboola, 2001)

2. Historical Background on Nigerian Banks

Formal banking is a relatively old economic activity in Nigeria, dating back to before

the emergence of the country itself as a distinct nation. While Nigeria emerged as a distinct

country in 1914 with the merger of the Northern and Southern Protectorates with the Colony

of Lagos, the first bank in the country was established in 1892. However, the industry at this

time and for some time after was largely unregulated and thus many instability and bank

failures characterized the system. However, with political independence looming in the

1950s, the government took control of the regulation of the industry bringing stability back

into the sector. This remained the situation until the late 1980s when the deregulation of the

economy that accompanied the Structural Adjustment Programme the country embarked

upon brought the sector back into public focus.

The Nigerian banking industry is regulated by the Central Bank of Nigeria (CBN).

The Nigerian banking sector has since undergone considerable reforms over the last 25 years.

Financial deregulation and economic liberalization policy of the 1980s changed the structure

of the sector from an oligopolistic, financially repressive, and highly regulated sector to one

that is deregulated and highly competitive. In 1980, there were 20 commercial banks and 6

merchant banks in Nigeria with a network of 740 and 12 branches respectively. This rose to

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30 commercial and 12 merchant banks in 1986 with 1,367 and 65 branches respectively, and

in 1991 there were 65 commercial and 54 merchant banks with 2023 and 84 branches

respectively. In the mid 90’s there was a depression that occurred in the financial system

which reduced the number to 51 commercial and 38 merchant banks in 1999 (Tella, 2006).

Further reform of the system in the late 1990s saw the removal of the commercial/

merchant bank dichotomy in favor of the adoption of the term Universal bank. By the early

2000, therefore there were 89 Universal banks in Nigeria. Another reform in the sector

occurred in 2004 / 2005 this brought the sector back under greater regulation principally in

the form of a huge increase in the regulatory capital requirement from one billion Naira to

twenty five billion Naira. This gave birth to a spate of merger and consolidation agreements

among the ICT’s Service & Operational Performance in Nigerian Banks... firms in the

industry reducing the number of the Universal banks to 25. Another round of reform of the

sector was commenced in 2010.

This involved government bailout of five of the firms in the banking industry and

restructuring of the top management of the affected banks. These were aimed at improving

corporate governance and removing some structural deficiencies perceived to be inherent in

the industry and which pose significant threat to the survival of many of the firms in the

industry. From inception up to the period of deregulation, the operation of the banks in

Nigeria were characterized by paper oriented methods rather than technological based system

with attendant slowdown in pace of operation, employee productivity and general

performance (Osabuohein, 2008). Hence, before the deregulation of the economy that took

place in the 1980s, the use of ICT in the Nigerian banking system was limited. However,

Idowu et al (2002) averred that Nigerian banks have since realized that the way in which they

can gain competitive advantage over their competitors is through the use of technology, and

this has engendered a growing rate of technology adoption in the Nigerian banking operations

(Salawu and Salawu, 2007).

Ehikhamenor (2003) noted that earlier desire for the use of ICT was characterized by

long period of inertia largely attributable to the absence of an enabling policy and

infrastructural environment. The decisive step in the incorporation of IT into banking

operation in Nigeria actually started in 1999 being a consequence of stronger government

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commitment to the development of a national IT infrastructure. Banks not only became

financiers of this initiative but also beneficiaries (Ehikhamenor, 2003). The formulation of a

National Policy on Information Technology in 2001 created further awareness on the

possibilities offered by IT and impacted positively on economic sectors with the banking

sector as a pioneer. The Nigerian banking Industry underwent major changes, reflecting a

number of underlying developments. Advancement in communication and information

technology has facilitated growth in internet banking, ATM Network, Electronic transfer of

funds and quick dissemination of information.

In Nigeria, there are 22 commercial banks, 906 Micro-finance institutions, 5 discount

houses, 5 development finance institutions, 731 bureau de change, 102 Primary Mortgage

institutions, and 82 finance companies (Luka &Frank, 2012). The Nigerian bank is under

structural reform and many changes took place in the field of information technology and

communication. These reforms has led to heal the banking industry especially after issuing new

regulation such as “the enactment of the Securitization Act to step up loan recoveries,

establishment of asset reconstruction companies, initiatives on improving recoveries from Non-

performing Assets (NPAs) and change in the basis of income recognition has raised

transparency and efficiency in the banking system .” (Luka & Frank, 2012). These reforms have

pushed the banks to adopt ICT technologies that resulted spurt in treasury income and loan

recoveries. It is worth mentioning that the central bank of Nigeria is the only entity to control

and issue all regulations of the banking sector.

3. ICT in Bank industry in Nigeria

The world of business has witnessed enormous changes in its nature due to the recent

developments in ICT and the emerging technologies that appear frequently. The rapid changes

in the business market and the hectic and fierce competition among companies have led to the

adoption of new and innovative techniques in their business to gain trust and reap the benefits.

The decrease in ICT gadgets has encouraged banks to increase ICT usage and the

business environment is becoming more and more relying on ICT. Banks has taken the

advantage of the technology developments in almost all aspects of its operations to increase

productivity, profitability, and expandability especially in era of the sever competition in

banking sector in the country.

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Continual operations around the clock are becoming feasible due to the recent

developments in payment facilities because of innovative ICT gadgets adoption. Payment

systems such as ATM, Electronic Fund Transfer (EFT), Clearing House Automated Payments

(CHAPs), Electronic Purse (E-Purse), Automated Cheque Sorter (ACS), and Electronic and

Transfer at Point of Sale(EFTPOS) has made the services much easier, faster, and at

convenience for both customers and banks. In addition regulations in banks became more

sophisticated and technology dependent and speeded up operations thus reducing the cost per

unit in banking operations [5]. In some cases there are some shortcoming of the implementation

of ICT in which bankers are unable to access their accounts or make transactions because of

intermittent of network services or power failures. On the other hand, in the past times with the

traditional banks operations, bankers has faced and struggled to cope with the long procedures

and queues of people waiting for their inquiries to be fulfilled and their service to be delivered.

The Nigerian banks have nowadays online services facilities aided to transfer funds

instantly from any location and provided safer and at convenience facilities to bankers. The

telephone banking technology is another innovative technology that improved the productivity,

comfort, and innovative way to serve customers (Osabuohien, 2008).

Nigerian society is the largest in Africa in the number of subscribers, 100,000

subscribers in 2000 and teledensity jumped from 2.55% in 1992 to 9.3% in 2004 [10,Ndukewe

2005], which helped banks to reap this advantage to market their products through the internet

and encouraged them to benefit from its online services .

a. Global Systems for Mobile Communication (GSM)

GSM has a vital role in the improvement of banks operational efficiency. Through

mobile phones, many clients can receive short messages services (sms) to get informed of the

amounts deposited or withdrawn and balances up to last two transactions (Oluwatolani,

Joshua &Philip, 2011). This saves a lot of time and effort not only for customers who were

waiting in queues in banks but also it facilitates the efficiency operations of banks to serve

more clients existing physically on banks.

b. Internet Banking

Home banking became a vital space for banks to expand its operations day and night

on anywhere any time bases. Visa’s remote subsidiary become of a major player to connect

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banks in a secure channel for the safety of money transactions. The internet transactions

required levels of security known as authentication, authorization, data integrity, and non-

repudiation as a key of four elements to provide security channel safer to use. Internet

suppliers have to encrypt all transactions between them and the client on line to make

decoding it complex to guess unless authorized (Agboola, 2001).

This facility is very cheap, fast and in hand that needs only cost of internet

connectivity and electricity (Agboola, 2001).

c. Automated Teller Machines (ATM)

ATMs are computer-based machines that are used to provide services for bank’s

clients such as cash disposal, payment for electricity/telephone/water/internet bills, as well as

give information about clients’ recent transfers or balances. In 1990, the first bank in Nigeria

to launch this service was Societe Generale Bank in its Broad Street office with name Cash

Point24 (Agboola, 2001).

d. Telephone banking technology

One way of witnessed technology advancements that were used is the telephone

banking that enables the customers to call specific numbers to use this service. This

technology uses voice activation technique and tone pad to enable customers to have

transactions of accounts at their convenience (Osabuohien, 2008).

e. Adoption of ICT integrated project

This service has been completed successfully to provide services inside and outside

the country.

f. E-mail

Electronic messaging has a great impact on the ease of communication between bank

clients and other parties. This facility has taken a lion’s share of the ICT usage in the past

decade and remains (Agboola, 2001).

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g. Banker Automated Clearing Services

During the period of 1980, banks faced a huge growth of cheque usage in Nigeria as a

result of fast strides in economic development. The clearance process faced significant delays

an lea to commission Komplex Nigeria Limited to recommend means of document

automation and it recommended Magnetic Ink Character Reader (MICR)(Agboola, 2001). It

is a device used for cheque processing (encoding) in banks. It encodes, decodes, reads, and

sorts cheques.

Theoretical Framework

Figure 1 Theoretical Framework

Each construct is described below as follows.

1. User characteristics

In our conducted study, we assumed that user characteristics have an influence on the

online services usage. We considered the education as one item to test as we have a limited

period to accomplish this study. We included three categories to test among respondents

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namely: Msc/PhD, Bsc/BA, OND/OCE, WASCE. We found that Msc/PhD has a 24% of the

respondents, 23% for the Bsc/BA, and 8% for OND/OCE. We realized that the higher

educated the person is, the more usage of the online banking he/she perform. The mean value

of 3.39 is considered a moderate level score that gives us an indication that this factor is

positively affects the online services.

H1: The user characteristics based on the level of education is positively

linked with Internet banking usage.

Item Number Percentage Mean Value

Qualification

• WASCE 0 0 3.39

• OND/OCE 4 8

• Bsc/BA 23 23

• Msc/PhD 24 24

Table 1

2. Usage of Internet Banking (IB)

Banks' operations has developed in the last two decades rapidly and the

traditional ways for dealing with customer banks have changed a lot. The employment

of ICT in the daily operations of the banks changed the nature of business process and

led to more advanced and easy to use ways to help and serve customers to fulfill their

demands as soon as possible. The usage of ICT in banking operations facilitated so

many services for the customer and bankers as well. It also cut the cost dramatically

for the banks' operations, saved a lot of time for both the banks and customers, and

lowered the transaction fees. These facilities can help beneficiaries to adopt internet

banking. Davis in his article ( Davis, 1989) explained the technology use and

technology acceptance attitudes through the Technology Acceptance Model (TAM)

using two factors namely: the perceived usefulness and perceived ease of use. Studies

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such as (Agboola, 2001,Wang, Line, and Tang,2003) showed a positive effects on

Internet banking use.

on the other hand, some studies showed that perceived ease of use affects the

perceived usefulness (Chang, and Rizal, 2010; Wang, Wang, Lin and Tang,

,2003).In this study, we have the deposit the following hypotheses.

H2: A client's perceived ease of use is positively linked with perceived

usefulness of Internet banking use.

H3: A client's usefulness is positively linked with Internet banking use.

3. Security Concerns

When it becomes to ICT devices and tools used in business, security issues

surface and create a lot of disputes and concerns as well in business financial

transactions. This issue has been the focus of many studies that covered the IT and

electronictransactions (Howcroft, Hamilton and Hewer, 2002, Grabner-krauter &

Faullant,2008;Lee, 2009; kim, Mirusmonov & Lee, 2010).

Privacy and private financial information is of big concern for everyone. When

using internet banking, people are mostly worried about this issue and has a big fear of

theft over the internet especially when they read or hear about such incidents from media

or friend. In this regard they have a negative perception on security issues concerning the

internet banking (Lee, 2009; Sayar &Wolf, 2007). Thus we hypothesized the following:

H4: A perceived security concern is negatively associated with Internet

banking use.

4. Intermittent Services Concern

As the development of the country's economic is shifting to more modern and to

follow the western trend in business, the populace are more keen to use the new and

innovative technological advances in business operations. The world has become a small

village and the internet has shorten the distances between people thus the need for more

reliable and rapid way to execute the financial transactions. Bank customers are

continually facing intermittent services while performing their transactions or using

online bank services. This issue causes a lot of inconvenience and annoyance especially

when it is urgent to perform financial operations immediately and have already relay on

that using the online services. It is sometimes shocking for the customers to have this

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situation which may cause considerable financial losses and lack of trust within business

partners. The intermittent service maybe caused by power failure on site which hider

clients to use ATM, or any other ICT gadgets, rapidly and efficiently. In addition, the

intermittent services that is primarily caused by the telecom companies is another major

issue that the bank sector is suffering from as there are no backup plans for the telecom

companies to recover in fraction of seconds. That is another issue that makes clients

hesitate and reluctant in using these innovative facilities that banks are providing as part

of their shift toward the innovative international arena in banking sector. Furthermore,

the clients may think to change to another bank if they get to know that others providing

better services. So developing new innovative gadgets and procedures in banking sector

is a key element to gain clients' satisfaction, loyalty, and trust. This change of client

attitude led us to have the following hypotheses as follows:

H5: A client's intermittent services concern is negatively associated with

Internet banking use. Therefore, we propose the following hypothesis.

H5:A client's intermittent services concern is negatively associated with


Chapter Three Research Methodology

1. Sampling Design

In our study, we used a survey instrument and constructs were measured using Likert

scale ranging from 1(Strongly disagree) to 5(Strongly agree), ordinal measurement using

yes/no selection, and interval measurement using selection ranging from 1(Always) to

5(Never).

The survey was supervised on 25 October until 4 November 2013 to groups of

Nigerian academic students and residents in Malaysia, as they are actual beneficiaries of

internet banking of Nigerian inside and outside the country. The number of participants is 51

in which we used online questionnaire, which is an easy to fill, applicable, fast, and

convenient way to gather the information in one location. We used Google form for the

purpose in which we find it practical and easy to be submitted to the respondents. The total

number of respondents is 51 and the unit used is students in different Universities in

Malaysia, lecturers, and residents.

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The percentages of respondent were calculated for each question, and then we

categorized the questionnaire into groups covering each of our variables in this study. The

mean value is used to give us the result of each variable. Graphical representation was

attached at the appendix of each question in addition to the questions on the survey. Detailed

information is presented to facilitate the analysis process in our analysis section.

We used students as our unit of measurement based on a study conducted by (Ko,

Mancha, Beebe, & Yoon) in which that justify their sample on students “ While using

student subjects is often considered as a weakness of the study, these students reported

themselves as the users of Internet banking, and, thus, we believe that they are suitable for

our study.” (2012). Demographic characteristics of the respondents collected are presented in

Tables below.

2. Instrumentation

In this study we used the quantitative method using the survey method as an

instrument. Online questionnaire was the tool used on this survey and was divided into two

sections namely: section A, where the demographic profile and usage of electronic and online

services were in question.

The second section, section B, was divided into different parts with each part has

different focus on the information that will be gained. Four questions focused on the

perceived ease of use, four questions on perceived usefulness, and five questions on the

perceived security issues, five on the perceived intermittent services and impart on the

satisfaction of clients, and nice different questions for the demographic and general-purpose

questions.

Previous studies were the base of these questions in which we adopted to suite our

purpose of this study. Previous studies such as (Cheng, Lam & Yeung, 2006; Ko, Mancha,

Beebe & Yoon, 2012; Idowu, Alu, & Adagunodo, 2002) were the main source of the adopted

questionnaire in this study. We modified the likert scale to include 5 point scale instead of 7

scale point ranging from strongly agree (1) to strongly disagree (5), and for the interval scale

ranges from always (1) to never (5), in addition to ordinal questions that take the value of

yes/no norm. We used for the analysis of the data the tools provided by the google tools in

which excel format and other graphical illustrations depicts the results gained from the

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published questionnaire. We intend to make use statistical package for social sciences (SPSS)

if the need arises and we have adequate time on our hands.

3. Data Collection

In this study, we conducted a questionnaire survey for the purpose to get insight of the

attitude of the respondents and find the real factors that affects or has an influence of the

usage of online services and other ICT technologies implemented in banks in Nigeria. for that

purpose, we created a questionnaire survey using Google online forms with all questions that

we assumed important to support our estimates of the real problems on the banking industry

in Nigeria. the Questionnaire is divided into two groups, section A and section B, and we

tried to include all aspects to clarify the real reasons behind the usage, intention to use, and

concerns of online services. The Google form provides an Excel sheet to give the details of

the results and a graphical presentation of the results obtained. In addition, we gave 12 days

of time for filling the questionnaire and used the e-mails or Facebook to spread out the

questionnaire to all possible respondents.

4. Data Analysis

In this study we conducted a questionnaire among Nigerian students and residents in

Malaysia as they are clients in those banks in Nigeria and use the facilities that those banks

offering for their clients. The questionnaire is an online tool that uses Google forms and

provides graphical results and percentages of the results acquired. The factors that we are

going to discuss are as in the following section.

5. Limitation and Delimitation

There are limitations in this study that we are going to highlight. First, we conducted

our study on a limited scope, Nigerian students and residents clients in Malaysia, of the

population that are clients of the Nigerian banks. The justification for that we have taken into

account that those are one important category of the Nigerian population and are studying

abroad, thus the need for online services is a must for them. Also studies such as (Ko,

MANCHA, BEEBE & SHIK YOON) indicated that “While using student subjects is often

considered as a weakness of the study, these students reported themselves as the users of

Internet banking, and, thus, we believe that they are suitable for our study." (2012). We

based our questionnaire on these studies and conducted our research based on the previous

studies in the field. The second limitation is the time limit in which hindered us from

collecting more data on a large scale. The third limitation, in our opinion, is that we did not

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have the opportunity to spread this questionnaire to employees in banks in which their views

will provide us with more precise data on the issues related with ICT usage and problems in

their banks and on the impact of these problems in the productivity and popularity of the

banks.

Chapter Four Research Findings

Results and discussion

The number of respondents is 51 in which we divided them into groups consisting of

the demographic characteristics, Usefulness, Ease of Use, Security concerns, and Intermittent

Services. The TAM theory is our primary framework with some adoption by adding the

Intermittent Services (IV) and Security Concerns (IV) as new independent variables. We

calculate the percentage, the number of respondents, and the mean value of each question.

We finally calculated the mean value for each variable based on the study conducted by

(Alzaza andYaakub, 2011) in which they say “The ranges of five point Likert-scales were

categorized into equal sized categories of low, moderate and high. Therefore, score of less

than 2.33 are considered low; scores of 3.67 are considered high and those in between are

considered moderate.” (2011). We, then, gained the final result of each hypothesis based on

that scale.

1. The respondents’ demographic and User Characteristics

Of the 51 respondents, 82% were male and 18% female; 22% were in the 18–25 age

groups, 43% were 26–35 in age, 24% were 36–45 in age and 12% above the age of 45. In the

qualification question, there were 23% BSc/BA, 24% MSc/PhD, and 8% OND/OCE.

Also from the table below, it is clear that more than 50% of the respondents use

internet banking at least from time to time and almost all of the respondents use other

electronic means of electronic banking, e.g. ATM, and in frequent periods.

In our analysis to the user characteristics, we found that MSc/PhD has a 24% of the

respondents, 23% for the Bsc/BA, and 8% for OND/OCE. We realized that the higher

educated the person is, the more usage of the online banking he/she perform. The mean value

of 3.39 is considered a moderate level score that gives us an indication that this factor is

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positively affects the online internet banking services. Hypothesis 1 is supported moderately

on the online internet banking services. Other demographic details can be found in Table 1.

Demographic and User

Characteristics

Number Percentage Mean Value

Gender

• Male 42 82 1.17

• Female 9 18

• total 51 100

Age

• 18-25 11 22 2.27

• 26-35 22 43

• 36-45 12 24

• above 45 6 12

Qualification

• WASCE 0 0 3.39

• OND/OCE 4 8

• Bsc/BA 23 23

• Msc/PhD 24 24

Account Type

• Current 6 12 2.27

• Savings 25 49

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Characteristics


• Current & Savings 20 39

purpose of opening the Account

• Business 16 29 2.11

• Salary 28 50

• Other 12 21

Usage of Online Services

• Yes 30 59 1.4

• No 21 41

Frequency of using Online

Services

• Always 11 22 3.07

• Often 11 22

• Sometimes 6 12

• Rarely 9 18

• Never. 14 27

ATM Usage

• Yes 49 96 1.03

• No 2 4

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Characteristics


Frequency of using ATM

• Always 24 47 1.74

• Often 17 33

• Sometimes 9 18

• Rarely 1 2

• Never. 0 0

Table 2

2. Usefulness (M)

In our review for this category, usefulness, which consists of 3 questions, we found

that 76% of respondents agree that the internet banking is a useful and fast way to do

financial tasks. The mean value of 4.17 shows this result.

In the second item of this category, the results show that 92% of the respondents

believe that internet and online banking is useful. The mean value of 4.45 reflects this fact.

The third item in this category is representing the convenience related with internet

banking which shows that 72% believe on its convenience and the mean value is 3.88 gives a

clear indication of this result.

The last item in this category is representing the benefit of shortening the geographic

distance for the financial transactions for the clients and the results specify 84% of the

respondents agree on that and the mean value is 4.27.

Mean value for this factor is 4.19 (>3.67) which is considered high level score and

indicate that most of the participants are highly agreed on perceived usefulness of online

banking; therefore it is positively affect the usage of internet banking as hypothesized in our

study.

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Usefulness (M) Number Percentage % Mean value

Internet banking enables me to

accomplish my tasks more

quickly

• Strongly disagree 1 2 4.17

• Disagree 2 4

• Neutral 9 18

• Agree 14 27

• Strongly agree 25 49

The Internet banking is useful


• Disagree 0 0

• Neutral 2 4

• Agree 16 31


Internet banking is a convenient

way to manage my finances


• Disagree 4 8

• Neutral 7 14

• Agree 19 37

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Usefulness (M) Number Percentage % Mean value


Internet banking eliminates

geographic limitation and

increases flexible in mobility.


• Disagree 4 8

• Neutral 2 4

• Agree 13 25


Table 3

3. Ease of Use (IV)

In our review for this category, ease of use, which has 4 questions, we found that the

73.5% of respondents assume that it is easy to use online banking. In the following lines, we

analyze the figures of each question.

In our second item of the questionnaire, which is of the same meaning of the previous

one, the results reflect almost the same value of 3.66, and with percentage of 69% of

agreement of its positive effect on online banking.

In the third item, we found that more than 77% agree that learning internet banking is

easy and the mean value is 4.19 indicates that this item has a positive influence of the online

banking.

In the last item, the percentage of 80% and a mean value of 4 indicates that

remembering” how to” in the online services has positive influence on the usage of internet

online services.

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From the aforementioned points, we conclude that the independent variable ease of

use is positively affecting the online banking services.

Mean value for this factor is 3.863 (>3.67) which is considered high level and indicate

that most of the participants highly agreed on perceived ease of use; therefore it is positively

affects the usage of internet banking as hypothesized in our study.

Question Items in each

Variable

Numbers Percentage % Mean Value

Ease of Use (IV)

It is easy to use Internet banking

to accomplish my banking tasks


• Disagree 2 4

• Neutral 7 14

• Agree 21 41


Internet banking is easy to use


• Disagree 6 12

• Neutral 7 14

• Agree 24 47


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Question Items in each

Variable

Numbers Percentage % Mean Value

Learning to operate Internet

banking would be easy for me


• Disagree 3 6

• Neutral 8 16

• Agree 12 24


It is easy for me to remember

how to perform tasks with

Internet banking

• Strongly disagree 2 4 4

• Disagree 3 6

• Neutral 5 10

• Agree 14 29


Table 4

4. Intermittent Services Concerns (IV)

From the figures shown in the table below, we found that a mean value of 2.57 and a

percentage 77% of the respondents believe that power failure affects the bank's ICT

operations.

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With regard of bank's performance in case of intermittent services, majority, 82% are

not satisfied with the bank’s performance with mean value of 1.82. More than 50% of the

respondents agree that with network failure their business and transactions suffers from delay

and hider them from finishing their financial operations rapidly. The results also show clearly

that more than 78% of the respondents admit that there is an intermittent services and power

failures occurrence in banks frequently and the mean value is 2.7.

On the future intention and attitude to change the banks that they are using, we found

more than 50% of the respondents believe that they can bear the continual failures, as it is the

only option to depend on in this stage of the fast growing business market, while 27% are

willing to change the bank to another. The mean value is 1.88 for this question.

Mean value for this factor is 2.084 (<2.33) which is considered a low level score;

therefore this factor has a low impact on online banking services. From these results

aforementioned, we find that our hypotheses of Intermittent Services Concerns are

negatively affecting the online Services in Banks is slightly affecting the online banking

services.

Intermittent Service

Concerns(IV)

Number Percentage % Mean Value

In case of power failure, do you

think that the Bank’s ICT

operations are affected

16 31 2.57 • Always

• Often 11 22

• Sometimes 12 24

• Rarely 3 6

• Never. 9 18

When there are intermittent

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services due to network failure,

are you satisfied with bank’s

performance?

• Yes 9 18 1.82

• No 42 82

When network failure or

intermittent services happen,

does it hinder you to finish your

financial operations rapidly?

• Yes 28 55 1.45

• No 23 45

How frequent is the power failure

or intermittent services happen

• Always 7 14 2.7

• Often 13 25

• Sometimes 20 39

• Rarely 9 18

• Never 2 4

Do you plan to change the bank

in case of repeated ICT failure

operations in the Bank

• Yes 14 27 1.88

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• No 29 57

• Other 8 16

Table 5

5. Security Concerns (IV)

Upon performing transaction over the internet, almost 49% feel secure with these

transactions and around 22% feel or have concerns regarding security over the internet. The

mean value is 2.71 in this question.

More than 52% of the respondents agree that they do not feel very safe providing

personal privacy information over the Internet Banking while 34% disagree. The mean value

is 3.17.

In addition, in answering the statement "I do not perceive the information relating to

user and Internet banking transactions as secure" around 36% of the respondents disagree and

32% agree and the mean value is 3.07.

The worries that others will use the account while using the internet has 39% agree

value, 42% disagree and the main value is 3.02.

Mean value for this factor is 2.98 (> 2.33) which is considered a moderate level score;

therefore this factor has a moderate impact on online banking services. From these results

aforementioned, we find that our hypothesis of Security Concerns is negatively affecting

the online Services in Banks with moderate effect.

From the above results, it is clear that our hypothesis of the Security concern is

supported by the results gained in this survey.

Security Concern (IV) Number Percentage % Mean Value

I would not feel safe in

making transactions over the

Internet banking. 5 12 2.71

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• Strongly disagree

• Disagree 15 37

• Neutral 12 29

• Agree 5 12


I would not feel totally

safe providing personal privacy

information over the Internet

Banking.


• Disagree 10 24

• Neutral 5 12

• Agree 15 37


I do not perceive the

information relating to user and

Internet banking transactions as

secure.


• Disagree 14 34

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• Neutral 13 32

• Agree 7 17


I’m worried to use

Internet banking because other

people may be able to access my

account.


• Disagree 13 32

• Neutral 8 20

• Agree 10 24


It is easy for me to

remember how to perform tasks

with Internet banking.


• Disagree 11 27

• Neutral 9 22

• Agree 10 24

• Strongly agree

5 12

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Table 6

Conclusion

Many banks’ clients prefer nowadays to use online banking services. The innovative

technological methods have driven the attitude of the people to use these techniques in

performing their financial transactions. It became easy, in-hand, with lower fees, and

convenient at any time and any place around the globe. These were the major advantages

over the conventional old methods of business banking transactions. Another worthwhile

In our study, we tried to focus on issues such as security and intermittent services that

are not yet investigated in research. However, customers are suffering from and no one, up to

our knowledge, has dig deeper in these issues. We turned our attention to find out the

influence of these factors on the usage of online internet banking among students and

lecturers who are users of this service in a sample of Nigerian society. The results showed

that security aspects have negative association with online banking as well as intermittent

services. In our in investigation, we also find that those users can bear these problems with

their banks, as there is no alternative way to avoid them or to have a better solution to use the

facilities of online internet banking.

On the other hand, ease of use and usefulness are clearly having positive impact on

the use of internet banking. This gives us very strong perception that most clients prefer and

like to use the online services for its advantages over the conventional and traditional way of

banking. The table below summarizes the results we found so far and compares our

hypotheses with our findings.

In conclusion, there is a need in future research to scale up the number of participants

in our sample in such investigation of the proposed issues in this research. This survey may

include variety of categories that should consist of clients and employees in banks with

different positions as well. That will give more insight of the problems from both sides, the

users and the bankers, and will help in generalize our empirical study.

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Hypotheses Results

H1: The user characteristics based on the

level of education is positively linked

with Internet banking usage.

Hypothesis 1 is supported moderately.

H2: A client's perceived ease of use is

positively linked with perceived

usefulness of Internet banking use.

Most of the participants are highly agreed on

perceived usefulness. Hypothesis is supported

highly

H3: A client's usefulness is positively

linked with Internet banking use.

Most of the participants highly agreed on

perceived ease of use and hypothesis is

supported highly according to the mean value.

H4: A perceived security concern is

negatively associated with Internet

banking use.

The mean value we reached in our survey for

this item shows moderate level score which can

be translated as a moderate negative effect of

this factor

H5: A client's intermittent services

concern is negatively associated with


Negatively affecting the online Services in

Banks is slightly affecting the online banking

services. Hypothesis is correct but slightly

influenced but by this factor.

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Appendix

Questionnaire

Dear respondents,

Kindly take some minutes of your valuable time to fill in the questionnaire with

appropriate marks/answers. This questionnaire is for the purpose of research only use. Your

feedback is highly appreciated and is ultimately confidential. Thanking you in advance for your

esteemed time and co-operation.

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Impact of ICT and related problems on online banking in Nigerian Banks

Technology

Transcript of Impact of ICT and related problems on online banking in Nigerian Banks