Impact of Internet Banking System in Nigeria Banking Environment (A Case Study of Union Bank of Nigeria 2008-2014)


This project work entitled “Impact of internet banking system in Nigeria banking environment” with particular reference to Union Bank of Nigeria. The project is divided into five chapters. The chapter one of the work covers areas such as the introduction, the background of the study, statement of the problem, significance of the study, purpose of the study, research questions and definition of terms. Chapter two contains or discusses the literature review and other functions of the topic under study. The chapter three contains. The research design and methodology sources of data collection, population and sample size, methods of investigation, scope and limitation of the study. The chapter four contains the presentation and analysis of data, analysis of the data, and interpretation of result. The chapter five which is the last chapter of the work contains the summary of findings conclusion and recommendation.



This is the methodology chapter of the chapters, it briefly explains the background of the study statement of the problem, objective of the study, research questions, statement of hypothesis, significance of the study, scope of the study, limitation of the study and definition of terms.


In Nigeria, the banking industry witnessed lots of challenges due to increase in the awareness and utilization of banking service. The staff strength and branches of most Nigeria banks in spite of this adjustment the banks cannot satisfy the demands. Some transactions were based on manual and physical present of their customers.

Modern banking system brought relief to the increased volume and complexity of banking operations and services delivery. Experimentation with banking system and electronic fund transfer gradually become part of daily transaction as arrangement were made with banks using micro computer to pay some bill owned big department stores and companies by this practices the internet becomes a services delivery mechanism of their customer has equally embraced it.

Meanwhile information technology through banking system is radically changing how banking is done all over the world and Nigeria is not an exception. The volume and speed of banking system which has created a lot of changes and business opportunities for banks, corporate banks and industries. In fact, Nigeria is believed to be the largest internet user in West African with about 100,000 internet user as at year 2000.

It was estimated to have risen to 350,000. However, the population size in Nigeria calls for accelerated sensitization on the need to embrace information technology as the prove of an enabling environment for it’s operation internet is inevitable fo the need to embrace information technology as the prove of an enabling environment for it’s operation internet is inevitable for the success of any modern banking institution since it is a competitive tool as at creates room for customer service and reduce the cost of operations, promotes profitability growth and efficient portfolio management.

The emergence of a crop to new generation banks coupled with computerization of the Nigeria banking system. Remarkably information technology is dynamic continuously coming up in new challenges for human capital development virtually every Nigeria banks claims to be having banking system and on line union bank of Nigeria Plc harbours large amount of information online and of course the marketing distribution costs. Indeed banking system has brought a greater advantage for one bank over another depending on its application, operation and service delivery.


Banks since the inception of the use of internet banking system in the rate 1980s have not made their presence felt much.

These are as the result of problems associated with the use of banking system includes the following.

  1. Nigerians poor infrastructures.
  2. Lack of security
  3. Lost of ownership and adoption
  4. Poor orientation (Illiteracy)


The first major challenge for the future of banking system is Nigerians poor infrastructure word bank data indicated that there are only 6 computers and 4 mainline telephone line per thousand people. Electricity supply is sporadic and inefficient. Most importantly, Nigeria has very low internet penetration, with less than one internet services provided for thousand people.


The second challenge is the issue of security: Resent research carried out in Africa shows that companies consider the biggest obstacle of being used the internet for financial transaction to the lack security. Many companies are concerned about the integrity of financial information that travels over the internet and would rather accept the inefficiencies and incontinences of a manual system that economy and that issue of trust in such that even cheques are not generally accepted as payment for goods and services rendered. Recently, the Nigeria market has witnessed the development of electronic purse products such as value and the smart pay cards designed to move the economy although it is hoped that they will eventually help lessen the importance of cash in our society. It is therefore clear that in such an environment, most consumers will be skeptical that a click on computer screen will result in a completed financial transaction.


Internet banking is very expensive because it entails the acquisition of computers, telecommunication gadgets. Banks spirit a lot on these products because of the exchange rate between the Naira and dollar.


So many people are still ignorant of services and benefits available to them that the use of banking system product. The benefits include that it is fast, safe and reliable.


These researchers seeks to achieve the following objective

  1. To analyze the reasons for opening bank account.
  2. To find out the reasons for preferring interest banking service.
  3. To understand the facilities mostly available the respondents and the opinion about this services.
  4. To measure the satisfaction level of the customer.


This study will try to answer the following research questions drawn from the study the research questions are as follows:

  1. How many financial product or services are computerized?
  2. Has the use of banking system helped to improve bank operation?
  3. Are banks fully or partially computerized?
  4. Has the performance of the bank being since introduction of banking system.
  5. What financial services or product exist in the financial market?
  6. What finance services or product exist in the financial market?


HI: Internet Banking increases banks profitability

H0: Internet Banking does not increases banks profitability


It is helped that the finding are recommendation of the study will include:

  1. Improved customers services.
  2. Reliability of transaction.
  3. Safety.
  4. Redundancy of storage.

Improved Customers Services

Internet banking system will enable banks provide new faster and better products, service or its customers.

Reliability of Transactions and safety

Internet banking technology ensures safety of banks dealing with its customers. Under these circumstances, banks must developed security feature for their Internet site, which adequately address their customers concern and must educate their customers.

Redundancy of Storage

Internet banking system helps to reduce the use of files, which are archive thereby reducing storage space, using of files could lead to loss of vital information about banks customers through mutilation, easy and unauthorized access to files and misplacement of important documents. This can be presented through storage of information in diskette, hard disk and bank up of important information.


The scope of this research work will be limited to the Nigeria commercial banks, union bank Plc as a case study.


This research will be limited to Nigeria commercial banks. Union bank Plc as a case study.


  • Internet banking: A quick and easy way to access your account through internet.
  • I.T: The study and the use of electronic processes and equipment to store information of all kinds, including works, numbers, pictures and abbreviation for information technology.
  • WAN: Wide Area Network a system in which computers in different places are connected usually over a large area.
  • LAN: Local area network a system in which computer in different places are connected, usually over a large area.
  • ONLINE: Controlled by or connected to a computer or to the internet.
  • HYPER LINK: A place in electronic documents on computer data base or network.
  • GLOBALIZATION: Is a World Trade.
  • WEBSITE: Where accompany has information about itself on the web.
  • ACCESS: To open a computer file in order to get or add information.
  • SEARCH ENGINE: An act of looking information in a computer database or network.
  • NETWORK: Computing a number of computing and other devices that are connected together so that equipment and information can be shared, the office network allows user to share files and software and to use a central printer LAN.
  • DISK: A device for storing information on computer with a magnetic surface that records information received in electronic form.