Abstract
On-line Banking is the newest and the least understood operational device for retail banking services due to its high degree of technicality and sophistication. It is the interest of this empirical study, which gains a thorough insight into its nature, and areas of applicability by Nigerian Banks by examining the effects of marketing variables on the marketing of banking services. The study also explores the aspects of information and communication technology (ICT). Commerce, the negotiated exchange of goods and services has been in tradition for thousands of years, but due to the invention of internet, web technologies and other electronic devices, led to e-commerce. The purpose of this study is to know the effect of e-commerce in Nigeria banks with emphasis on Guarantee trust bank. Factor analysis was used to test which of the factors has the greatest effect i.e., the main factor affecting the adoption of e-commerce in Nigeria and the result of the study shows that the major problems facing e-commerce in Nigeria are the issues of security and citizen`s income and therefore the implementation of sophisticated security measures could make a difference and change Nigerian`s mentality about e-commerce.
CHAPTER ONE
INTRODUCTION
- Background of the study
In this information era, E-commerce is pertinent in the technologically advanced world of business. It has created electronic markets and provided opportunities for businesses to reach consumers in a very direct way (Ayo, Adewoye and Oni, 2011). This is due to advancement in information and communication technology (ICT). Information and communication technology offers enormous opportunities such as storing, processing, retrieving, disseminating and sharing of information (Apulu and Latham, 2009). The continued existence of businesses in the 21st century is engendered by information and communication technology. The adoption of ICT would change the way businesses operate in this era of globalization by changing business structures, increasing competition, creating competitive advantage and changing business operations (Ongori, 2009). E-commerce is the use of the Internet for marketing, identification, payment and delivery of goods and services (Ayo et al., 2011). The upsurge in the use of internet and telecommunication facilities in the last decade considerably increased the use of e-commerce in Nigeria. The reason for this was as a result of the establishment of private telecommunication companies like MTN, GLO, and MULTILINKS among others. E-commerce revolutionized the Nigerian economy by paving the way for firms to satisfy the public and creating a path for the nation to compete globally. In Nigeria, e-commerce is largely visible in the banking industry in form of electronic banking. Latest developments in e-commerce are first witnessed in electronic banking services. This has created the impression that e-commerce can be interchangeably called “e-banking”; however, ebanking is just an aspect of e-commerce which has been widely adopted. It is widely believed that ecommerce contributed greatly to the rapid development of banking sector because it improves flow of information and increases the coordination of action. Professionalism and the zeal for market leadership brought the Nigerian banking industry and the economy at large into the euphoria of electronic banking. Following the globalization trend, ebanking is cognizant in Nigeria so as to put her banking industry on the path of global competitiveness. In recent years, the adoption of e-banking began to occur quite extensively as a channel of distribution for financial services due to rapid advances in information technology and intensive competitive banking markets (Salehi and Alipour, 2010). Having the above peculiar situation that exist in the African nation in mind, this study will give an isolated view of the degree of information and communication technology (ICT) appreciation in the Nigerian banking sector, the factors constraining such utilization and the effectiveness of the Internet utilization in the Nigerian banking services. Much as there is literature on the global experience of the Internet system, few detailed empirically based studies exist concerning Internet appreciation in Nigerian banking organizations, including the constraining factors and the efficacy of such appreciation. Although some Nigerian companies have introduced some Internet related business, few of these companies may have leveraged on their web presence to increase profitability, where others have just put up barely functional websites, without associated appreciable results (Osuagwu, 2012). According to the definition of Olatidoye (2004), E-commerce is the paperless exchange of business information using Electronic Data Interchange, electronic mail, computer bulletin board, FAX, Electronic Fund Transfer and similar technologies. The information technology industries viewed e-commerce as an electronic business application aimed at commercial transaction. It also means the conduct of business commercial communication and management through electronic data interchange and automated data connection system and according to earlier study, whether companies are doing business over the internet or not, security is a serious issue (Grant, 2001), customers engaging in e-commerce need to feel confident that their transaction are secure from prying eyes and safe from alteration, some information are critical to transaction while others mat not e.g., if a customer wants to make a purchase online or by phone, a credit card number and expiration date must be provided. Even if the customers trust the company with private information, he may not be confident in your ability to guard that information (Clauda et al., 2001; Jarvenpaa and Todd, 2017). Before e-commerce came into Nigeria, the method of transaction used is known as traditional commerce which has its origin before recorded history when our ancestor first decided to specialize their everyday activities, instead of all family units to do all jobs to make their living, they developed skills in only one of these area and traded for other needs e.g., a farmer can exchange farm product with a tool making family and so on. Eventually, this bartering method gave ways to the use of currency, making transaction easier to settle. E-commerce therefore is an extension of traditional commerce which is the facilitation of commercial transaction electronically done using EDI to send commercial document like purchase order or invoice. Later it came to include activities more precisely termed web commerce i.e., the purchase of goods and services over the World Wide Web through secure server, a special server protocol, which encrypt confidential ordering data for customer protection. Presently in Nigeria, traditional commerce is still the main method of transaction, only few people are using e-commerce. An important function of e-commerce is the handling of payment over the internet. Most e-commerce involves the exchange of some form of money for goods and services. Implementation of payment system for e-commerce is still evolving in Nigeria thus the number of proposal and implementation of payment system currently compete for dominant. Regardless of the format, e-commerce is far cheaper than the mailing of paper checks. Today, four basic ways to pay for purchase that dominate both traditional and electronic business to consumers commerce are cash, checks, credit cards, debits cards, but in Nigeria today, cash and checks are the main ways used to pay for purchase but credit card is by far the most popular form of consumer electronic payment online in the developed nation. Recent survey found that more than 80% of worldwide internet consumers purchases are paid for with credit cards and this has very limited use in Nigeria. Payment card transaction follows these general steps once the merchant receives consumer payment card information.
- STATEMENT OF THE PROBLEM
Implementing successful e-commerce service is not as easy as most people might think. Many obstacles exist and they all revolve around three major pieces of the electronic commerce puzzle-money, technology and people. Hence, there is limited research on e-commerce in developing countries particularly in Africa. Sometimes the cost of avoiding e-commerce is greater than the cost of initiating it. Web technology is still developing. Despite the global reach of e-commerce, not all country has taken advantage of ecommerce. There is a big gap in the internet and e-commerce adoption between the developed and developing country, thus creating a digital divide. Nigeria with a population of about 150 million people is a potentially lucrative market for e-commerce services. Nigeria being one the few nations in the world blessed with abundant mineral wealth, and entrepreneurial population and productive agricultural base. By virtue of size, population location is well positioned to the economic activities in Africa. E-commerce is an opportunity to use private sector to drive economic development. The banking sector has been most successful with e-commerce in Nigeria. The main obstacles that prevent developing countries from leveraging the interest are lack of adequate communication infrastructure, technical know-how and information processing about the economy and the environment. The lack of adequate banking infrastructure is also considered as one of the problems faced by developing countries in building economic solution.
- OBJECTIVE OF THE STUDY
The study has one main objective which is subdivided into general and specific objectives; the general objective is to examine the effect of e-commerce in Nigeria banks with emphasis on guarantee trust banks. The specific objective are:
- To examine the effect of e-commerce on the growth of Nigerian banks
- To ascertain if there is any significant relationship between e-commerce and bank development
- To explore the impact of e-commerce on the development of Nigerian commercial banks.
- To proffer suggested solutions to the identified problem
- RESEARCH QUESTION
The following research questions were formulated by the researcher to aid the completion of the study;
- Is there any the effect of e-commerce on the growth of Nigerian banks?
- Is there any significant relationship between e-commerce and bank development?
- Does e-commerce have any impact on the development of Nigerian commercial banks?
- RESEARCH HYPOTHESES
The following research hypotheses were formulated by the r5esearcher to aid the completion of the study;
H0: There is no significant relationship between e-commerce and bank development
H1: There is a significant relationship between e-commerce and bank development
H0: e-commerce does not have any impact on the development of Nigerian commercial banks
H2: e-commerce does have an impact on the development of Nigerian commercial banks
- SIGNIFICANCE OF THE STUDY
It is believed that at the completion of the study, the findings will be of great importance to the management of Nigerian commercial banks as the study seek to explore the effect of e-commerce in Nigerian banks, the study will also be of importance to the management of Nigerian commercial banks as the findings of the study will aid them in management decision making. The study will also be of great importance to student who intend to embark on a study in a similar topic as the study will serve as a pathfinder to further studies. Finally, the study will be useful to students teachers, academia’s and the general public as the study will contribute to the pool of existing literature on the subject matter and also contribute to knowledge.
- SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers the effect of e-commerce in Nigerian banks a study of guarantee trust bank. In the course of the study, there are some factors that limit the scope of the study;
AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
FINANCE: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.
1.8 OPERATIONAL DEFINITION OF TERMS
E-commerce
E-commerce (electronic commerce) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet.
Commercial banks
A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit
1.9 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 its 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.
