The intense competition within the banking industry has led to an ongoing pursuit of an efficient and less cumbersome banking system. This has given rise to various technological advancements such as Automated Teller Machines (ATMs), electronic banking, internet banking, and credit and debit card transactions. Many banks have invested in modern computer interconnectivity infrastructure, facilitating data and multimedia communication over the internet and extranets. Presently, banks recognize that the future of banking will increasingly rely on electronic methods for conducting transactions.

Mark (2001) defines electronic banking as a comprehensive term encompassing the processes through which customers can perform banking transactions electronically, without the need to physically visit a bank branch.

However, recent reports indicate that e-banking and the e-business environment in Nigeria face several significant challenges and issues. These include concerns about internet security and congestion, the impact of an unreliable power supply, the dominance of cash transactions in the economy, and a low level of awareness among Nigerians regarding electronic banking. The potential benefits of electronic banking may be undermined by these emerging challenges, which is why this assessment has been undertaken. Its goal is to shed light on the issues and opportunities related to electronic banking.


The Nigerian banking industry has recognized the importance of adopting electronic banking technology to expedite service delivery and enhance profitability. Despite initial reluctance, Nigerians have actively embraced electronic banking systems. The number of people using electronic banking facilities is steadily increasing daily.

As the potential of electronic banking in Nigeria expands, so do the associated challenges. Electronic banking, or e-banking, is a transformative force reshaping the banking industry, making it more competitive. While it is still in its early stages, users are already experiencing the benefits.

Online banking services include access to account information (such as balance inquiry, viewing account statements, and transaction summaries), bill payments (immediate or advanced payments to accredited billers or merchants), fund transfers, account management (enrolling or unenrolling accounts, assigning nicknames, modifying functionalities of enrolled accounts for bill payments and fund transfers), customer service (providing feedback and inquiries), customer feedback (helping the bank improve services), online loan applications, and various online tools.

Automated Teller Machines (ATMs) are undeniably convenient, but they are not without their issues. They are available 24/7 but can malfunction occasionally, causing problems such as failing to dispense money despite issuing a receipt that claims otherwise or swallowing cards. Such inconveniences can leave users stranded, especially on weekends.

Security is a significant concern in e-banking, primarily due to the increased security risks and the potential for various security breaches. These breaches fall into two categories: those with criminal intent, including fraud and theft of sensitive financial information, and those by casual hackers who may deface websites or cause denial of service. All of these threats have serious implications, whether financial, legal, or related to reputation.

A common issue with internet banking is the risk of computer hackers gaining unauthorized access to bank accounts, typically through proxy websites. These sites can exploit vulnerabilities like cracked usernames, passwords, or PIN numbers, leading to unauthorized and potentially criminal transactions without the account holder's knowledge. Slow loading times, both for websites and bank accounts, and technical difficulties and connectivity issues during online banking transactions can also be frustrating. While customer care departments exist to address such matters, congestion in computer and telephone networks can hinder the necessary assistance.

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1.3 General Objective.

The main objective of the study is to determine the prospect , challenges and growth of e banking in Nigeria.

Specific Objectives

The specific aims of the study are:

1. To explore the current practice and extent of adoption of e-banking service in Nigeria.

2. To find the benefits realized by banks in the adoption and practice of e-banking to compliment their service delivery channels.

3.     To determine the driving forces towards the adoption of e-banking service in the banking industry.

4.     To identify the growth for the adoption of e-banking service in Nigeria.

5.     To find the existing opportunities for the adoption of e-banking service in Nigeria.


This research work will be of great significance to the following class of people:

1.     This research will address the shortcomings of Electronic – banking in Nigeria banks as well as the appropriate approach to resolve them.

2      The outcome of this research work will be of tremendous benefits to operators of e-transact, students, and future researchers: These group of people will go through this work, review it and avoid the mistakes therein and then come up with a richer work.

3      This study will help to enlighten operators in the banking industry and other concerned individuals on operational efficiency of E-banking.

1.6   Research Questions

Based on the above stated objectives, the following research questions will answer:

1.     How looks like the current practices and extent of e-banking service in Nigeria?

2.     What are the benefits of adopting e-banking service from the viewpoint of the       bank?

 3.    How will e-banking affect the economic growth in Nigeria ?

4.     What are the major challenges that will affect the e-banking not to affect the growth in Nigeria?

5.     What are the existing opportunities for the adoption of e-banking service in Nigeria?


1.7   Justification of the Study

Commercial banking is undergoing rapid change, as the international economy expands and advances towards institutional and market completeness. A major force behind these developments is technology, which is breaching geographical, industrial and regulatory barriers, creating new products, services and market opportunities, and developing more information and systems-oriented business and management processes (Liaoa & Cheung, 2002). One of the products of global technological changes is the advent of E-banking. Electronic banking has become prevalent and employed by many financial institutions to reduce costs associated with having personnel serve customers physically, shorten processing periods, increase speed, improve flexibility of business transaction and provide better service in all (Shih & Fang, 2004). It has been identified as the fastest growing area for business (Aladwani, 2001) and many banks are improving on use of their electronic banking facilities to move along with global trend.

Much documentation on electronic banking services has been carried out elsewhere (Daniel and Storey, 1997; Liaoa & Cheung, 2002; Claessens et al., 2002). However, in Nigeria, there is little or no information concerning electronic banking usage. Even those commercial banks to which as started using electronic banking as connected some of its own branches. Cross bank transaction using electronic banking is a monster idea for Nigerian Commercial banks. This research tries to identify prospect and challenges of electronic. This assessment would enable the banks to render better electronic banking service to their customer, adopt new strategies to cope with challenges and meet customer needs in the use of these electronic banking facilities.

1.8 Scope of work

The studies centers on an assessment of problems and prospect of electronic banking in Nigeria.

1.9 Organization of the study

The research report is organized into five chapters: Chapter one focuses on the background of the study, problem statement, objectives and justification of the study. In chapter two, a range of literatures review capture there to gather relevant information concerning online banking. In chapter three, detail of methodology follow to achieve result outline. It is including the study design, sampling, sampling technique and data analysis. Chapter four contain results and discussion from the study supported with findings from other research works. Chapter five focuses on main findings, conclusions and recommendations of the study.