The Impact of Internet Banking System on Nigeria Banking Environment

The Impact of Internet Banking System on Nigeria Banking Environment

This chapter will cover such area as the meaning of internet system, origin of internet banking, meaning of internet banking, meaning of computers are relevance of computer to internet banking, some internet banking products and its relevance to internet banking solution to the internet banking problems and their inferences.

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The Internet system is one of the products of electronic system, which has being defined in so many ways by some specialists in electronics

AWE (1998:7) in a newspaper publication gave the following definitions of what Internet is.” The internet is a collection of computer network and millions of users who share a compatible means for interacting with one another to exchange information”

“The internet is a global network of computers” Internet is a worldwide or network which freely exchange data. Computer network is basically a bunch of computer hooked up together to communicate.

Olorutoba (1997:12) Apart from the grave, the Internet is the greatest equalizer on earth, the world Internet is the abbreviated simply as the net. He further stated if more than 2 or more people each have a computers to telephone lines, then we have net work of computers which we can connect each other to obtain information or just talk. If one hundred people or more in Enugu have their computers connected to host compete acting as an administrator we can call such an arrangement of local network (LAN)

The host computer can become a depository for information, files and software accessible to all of us. We usually call such arrangement a bulletin. Board services (BBS) now marine thousand of small and large LANS and BBS all over the world connected through their host computes the form a massive network that huge network in the internet.

Oloruntoba then gave the definition of the internet as the linking of millions of computer with each other through the telephone systems like a spiders web to achieve instant global communication. He further stated the Internet development came from man’s innate desire for instant communication in the past. They used all sort of personal carriers to carry messages from one place to another through different terrains. In those days telegrams were transmitted in more code through the telegraphs system in our post offices. The development of telegraphs, telephone personal compute, fax and modern are all chain-links leading to that desire to have instant and inhabited communications with fellow human beings on matters how far away they may be.

AWE in this conclusion said that today the Internet means business


According to Oloruntoba (1992:14) Internet banking started in the mid 1980,s with technology driven products that has influenced more technological advances.

He further stated that what used to be termed electronic data processing has transformed into Internet banking through information technology

Oloruntoba emphasized that this changes in technology reflects on equivalent transformation of the use of the computer form automation of paper to reduction in unit cost, the replacement of manual with computer processing today focus on internet product and services delivery. All these being in line with today’s modern international banking climate.


Awe tied to define Internet as a worldwide network or networks, which freely exchange data. Internet is used to describe the network of thousands of small network around the world.

So it can then deduced from the above definition the meaning of internet banking business operated or carried out using the internet devices and systems or none electrically so as to produced speedy and accurate financial services efficiently.


A lot of definitions of what a computer is can be found in the in the literature as the following:

Osadebe *(1990:4) says the word computer is used to refer to a variety of devices ranging from advanced calculating machine to large electrical data processing system in order words a computer will rightly be defined as a device that accept data then performs mathematical operations that manipulate or change the data and finally produces results from the data.

Dixon (1991:2) defined computer as a calculating aid with the capacity to operate at very high speed to store data to perform arithmetic operations and compare values.

Dummer (1994:9) says the computer is a any device capable of automatically accepting data applying a sequence processes.

Bo china (1990:5) a computer as a data process or that can perform substantial operations without intention by a human operation during the run. . Our aim of giving these various definitions is to enable us attempt at formulating a general purpose definition of a computer also to know if the computer is an electronics its common features and how its aids internet banking.


French  (1991:16) gave the relevance of computer to Internet banking as

I        Data Security: This is the protection of data in internet banking computer is a vital tool to ensure adequate security of data in some situation of the loss of data e.g. in the files security method used during up dates .In other situations data security will be concerned with preventing the menace modification of data e g due to access by unauthorized persons.

Ii       Computer conference area: Internet banking computer aids in the speedy transaction of banking business. This is able through the Internet

iii      Pay roll production: The computer facilitate internet banking through the effective creation  of the pay roll for the workers and other creditors  so the log in the wheel is speedy pay roll  production is eradicated which is characterized by manual ,pay roll production which produces pay roll in weeks and months


The Internet banking products to be discussed includes the e-mail, e- mail to fax, the www, union value card and union e-links, elect

Basic Internet services:

This services which the bank stand to enjoy while using the Internet:

i)       Data security: This is the protection of data in internet banking essential a store and forward       services meaning the networks that send and receives mail do not necessarily communicate with each other directly. Mails are transferred from one network to another until it finally reaches its destination. The delivery time ranges from second to a day.

ii)      E-mail to fax: According to oloruntoba (1997:26) this is a supplementary service to the e-mail service. It is designed to enable a subscriber send e- mail messages to those who have no e- mail facility but have fax facilities.

iii       World wide  web :oloruntoba  says this services is one which anyone with information  or goods to sell advertise or give away could place that information in a place  called website .Those indeed of such information will then use special software called the browser  to link up with the website and read  or down load any information they want. A Wed site is a special graphical data bank created on a host compute. The website is given a unique name and address as well.

iv)     Chart: According to Awe, this is a system that permits real time typed conversations among Internet users. Charting is an easy way to meet people from all over the world who share your interests.

Telnet: According to Awe, this is a basic Internet service, which allows you to physically access remove computer as if they were local to you. To use telnet, you must have the Internet address of the remote computer and a valid user name add password that logs you into the remote computer as if it were your local machine.

iv)              FTP file transfer protocol is the standard protocol for copying file computer to computer on the Internet similar to telnet, FTP allows you to access remote machines. However where telnet allows you free access to the power of the remote machine FTP limits you to operations such as sending and retrieving information.

v)                Usenet News Group: News groups are for interactive discussions on specific topics with contributions from all over the world. Net news can be thought of as a form of public email. People who share common interests can talk about their favorite topic in an open forum. Net News is quite for popular as it can also provide access information from experts on various fields around the world.


With greatly improved technological break through, Internet has been

Further enhanced with the introduction of Internet banking.

According to Ovia (1998:20) in a newspaper publication he said that

“Internet banking will increasingly become a major distribution channel of

Banking services and products by the turn of the next millennium”. It would

Help to encourage customers to become more familiar and comfortable with

Electronic payment system, as well as hold the promise to substantially

Reduced cost of banking transaction. Internet banking and other new

Products that are being propelled by information technology have the tails

Of revolutionizing old patterns of conducting business in the banking


While financial institutions are aggressively and seriously focusing on

How they can use Internet technology to deliver traditional banking service

And create new ones, there is wide spread ignorance within the banking

Community as to how secured and sate the system is.

So in conclusion, banks stand to gain more when connected to the Internet’s in terms of the benefits. Their customers stand to gain from and thus the CBN examiners have a great role to play in supporting the proliferation of information technology in the delivery of banking products and services.



The union bank value card is version of credit card. This card are used to effect payment for goods and services on credit that is the holder pays for the goods with the cards which are an equivalent of cash. These cards are made up of different amounts to have the name of the holder on it with a secret number known to him alone.

According to Dezie (1998:15) “the value card enables the holder to carry large amount or sums of money around conveniently without fear. The most interesting thing about the union bank value card is that these cards can be obtained by even union bank customers”. The only problem with the cards is that they are not widely known. Few people are using them and the services out that accept these cards are few.


These are multi-purpose Internet banking product offered by

Union bank. The different asset will now be discussed:-

1)      Money Transfer: Dozie (1998:16) say the transfer of money from point A to B works electronically through the RIA EXPRESS, VIGO and DIBS.These have resulted in turning the actual money into bits and bytes through satellite fiber optic cable. Transferring money from anywhere outside the country or account does these transfer. The money transferred to Nigeria is taken to the branch where the recipient resides and a form of identification is filled.

2) Payment and Withdrawal of money: The DIBS and easy cash  (union bank) enables customer’s payments and withdrawals from any branch of the banks other than the branch been operated by the customer. This is made through the local area network (LAN) and wide access network (WAN), which enables global communication and connections to the host compute at the banks head office in Lagos and effective telephone lines. A cashier at a local branch through his computer and telephone can access the account number and branch code, the n the value of the his account or balance is known, the payment and withdrawal can be affected. Business customers of account holders of the bank can receive payment due to him through any branch of the bank and receives the payment through his local branch as the payment is made through his account number.


Ovia (1998:22) agreed that there are benefits accounting to the adopting and use of Internet banking he gave as:

1) Fast retrieval of account balances from the customers chosen location.

2) Fast and efficient funds transfer

3) Account transaction history

4) Enhancing the ordering of banks statement quick

Ovia further stated that with the collaborative efforts of the financial institutions and the CBN regulators immense knowledge would be a acquired in this fast expanding banking products that are emerging as a result of information technology .It is safe to conclude that information technology enhances the efficiency of financial services and in effect demands strategies alignment with our business goals Ovia (1998:22)


In spite of the improved banking services made possible by the numerous Internet banking products and despite the allure of new technology, Internet banking is still characterized by some problems.

Ovia (1998:22) gave some problems as high cost of information technology in Nigeria ,inadequate infrastructure facilities ,like poor telecommunication network and the millennium bomb .

Ndubisi (1997:16) in his own contribution gave some of the problems as the countries economic development depreciation of the currency, incessant power failure and lack of awareness .Let us now discuss some of this problem in details


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  1. thanks

  2. ishaq tasiu says:


  3. Obisanya Kikelomo says:

    If I pay money into ur account can I get full chapter 1 to 5
    on: The Impact of Internet Banking System on Nigeria Banking Environment. (A Case Study of GTBank of Nigeria)

    • articles says:

      Yes you will receive all the chapters in your email. For further information, contact us on 07033378184

  4. Urewuji Becky C. says:

    pls solve this……. the aid of internet in the 21st generation banking industry………. i dont have an email …….. my whats app number 07035373788 .

    1) Abstract
    2) Introduction
    3) Discussion on the topic
    4) Reference

  5. pls i need a project , the impact of internet banking using uion bank as a study

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