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AN APPRAISAL OF IMPACT OF ELECTRONIC BANKING IN
ZENITH BANK NIGERIA PLC, KANO
ABSTRACT
Electronic
banking is simply operating the banking system through the internet and it
signifies both global public network and a family of technologies. In Nigeria,
the banking industries are basically on-line at real time with web site which
is restricted only to information and also it restricts most of their dealings
to e’banking via the internet and not internet banking proper, effective cash
management via e’banking on the other involves managing the motives of a firm
in order to maximize cash availability and internet income in any idle fund via
e’banking for efficiency and effective purposes, e’banking helps quicken the
technology in recent globalization, but not withstanding, there are still risk
involve in e’banking but such is properly under control which was why the banks
restricted e’banking transaction within themselves with proper protocols to
check, with this in place customers are highly satisfied and the banking
sectors well fitted.
TABLE OF CONTENTS
Title Page
Declaration
Approval
page
Dedication
Acknowledgment
Table of
Contents
CHAPTER ONE
1.1
Background of the study
1.2
Statement of the problem
1.3
Objectives of the study
1.4
Significance of the study
1.5
Research Questions/Hypothesis
1.6
Scope of the study
1.7
Limitation of the study
1.8
Definition of terms
CHAPTER TWO
LITERATURE REVIEW
2.1
Introduction
2.2
History of banking
2.2.1Background
2.2.2History of
banking in Nigeria
2.3
Conventional banking procedures
2.3.1Transfer of
Bank draft
2.3.2Telegraphic
transfer
2.4
The Clearing System
2.5
Electronic banking (e’banking)
2.5.1Electronic
banking products
CHAPTER THREE
3.1
Introduction
3.2
Re-statement of hypothesis
3.3
Population of the study
3.4
Sampling technique
3.5
Sample sizes
3.6
Methods of data collection
3.7
Methods of data analysis
CHAPTER FOUR
4.1
Data analysis and interpretation
4.2
Table and sources of survey
4.3
Test of hypothesis
4.3.1Hypothesis I
4.3.2Hypothesis II
4.3.3Hypothesis III
CHAPTER FIVE
5.1
Summary and findings
5.2
Conclusion
5.3
Recommendation
Bibliography
Questionnaire
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The rapidly unfolding development
within the information technology in recent times has led to resurgent calls
for monies towards an effective cash management through Electronic banking
(i.e. E-Banking). In the last few years, within the banking industry in Nigeria several
commercial products have designed by banks to improve the qualities of services
provided to customer. These products were also designed to meet the
increasingly sophisticated needs of finance managers in a cross section or
organizations operating in different sectors of the economy.
In recent years, these have been an
evolution from paper transfer system and ordinary procedural cash management to
an electronic transfer system and more secured and sophisticated cash
management. There has been introduced, an increased sophistication in computer
applications to cash management and in electronic funds transfer.
It is the responsibility of the
finance manager to ensure proper management of a company’s account receivable
and payable amongst other tasks. Improper management of these two important
variables could result in losses arising from inability to take interest
because of too early payments. Overdraft and loan interest charges could be
incurred because of unnecessary working capital borrowings. The task faced with
the finance manager is accelerating collections and showing a disbursement
which is increasingly being done electronically.
The advert of financial innovations
such as electronic transfer in the payment system and more recently, the
launching of internet banking have transformed the worlds into a global village
linked with electronic impulses. Companies are usually offered discounts if
payments for certain goods and services are made within a specified period
according to the terms of credit.
Similarly, no discount is been
attracted when companies pay outside this period and this discount loss can
cost the company substantial income when aggregated over an annual period.
Companies also have to collect proceeds of sales quickly within the allowed
time frame to provide working capital. Failure to do so can lead to working
capital shortages prompting the company to borrow from banks at high interest
rates to fill the gap between sales and collection of proceeds.
Between 1989 and 1995, several banks
have acquired the means to make payment very quickly and transfer funds very
quickly to cities in Nigeria
within a few minutes of the request. However, the concept of electronic money
was introduced in 1996 when the Federal Government through CBN gave approval to
All States Trust Bank Ltd. To offer a financial product known as the ESCA smart
card, an electronic purse. Subsequently, others followed. These innovations,
which are still at a relatively early stage of development have the potential
to challenge the predominant role of cash for making small value payments and
makes retail transactions easier and cheaper for finance managers. This is an
invaluable tool of it provides an enhanced cash management capability and use
of electronic funds transfer has resulted in greater economization of money
balances.
In an attempt to elucidate on the use
of Electronic Banking in cash management, this write-up traces the history of
commercial banks and origin of Electronic Banking, provides an in-depth
treatise of conventional banking. It goes further to examine the role of
Electronic banking in cash management, the advantages and obvious concerns
about security of funds.
1.2
STATEMENT OF THE PROBLEM
Financial management is a key to the
growth of any business perspective of the size and geographical spread of the
firm. As business conqueror their immediate environment and spread to other
towns and cities, it becomes more difficult to exercise control over the
finances of the firm. There is the need to deliver funds to locations where it
is needed and collect excesses from some other locations across the country. A
number of problems abound in the Cash Management Service Department of any
organization in Nigeria,
such problems include the following:
a.
Delay
in collecting receivables and effecting disbursement without considering
interest and discounts that could be earned.
b.
Inefficiency
in funds transfer from one town or region to another.
c.
Ineffective
handling or the increasing volume, complexity, competitiveness, customer
sophistication and globalization or financial services.
d.
Misrepresentatives,
misappropriation, and misunderstanding the significance of an effective cash
management through Electronic Banking.
e.
How
to change the concept that technology remains as imported commodity, which
continues to depend on the availability of foreign exchange for its
consumption.
f.
Why
many banks have not been able to automate their operations.
g.
How
effective is the use of Electronic Banking in cash management?
h.
What
services does Electronic Banking that makes it applicable to cash management?
i.
Task
and related misappropriation in organizational management as a result of
E-Banking.
Nevertheless, solutions to these
numerous problem will to a large extent, explain the roles of Electronic
Banking in Cash Management.
1.3
OBJECTIVES OF THE STUDY
The main objectives of this research
work are:
1. To highlight the important task of
the finance manager.
2. To show the essence of Electronic
Banking as an effective mean of cash management and their products.
3. To prevent a review of the
conventional banking procedure in cash management and the implication of the
source of every fund to the company. Hence the cost benefit.
4. To show the importance of cash
management in collection and disbursement as it affects discounts, interest and
loan/advance charges and the implication and recommendation computer to the aid
of management.
5. To take into cognizance the modus
operandi, and limitation of conventional banking procedure, which serve as a
launching pad for the introduction of electronic banking.
1.4
SIGNIFICANCE OF THE STUDY
This work will go a long way to
benefit:
a. Researchers who wish to have ideas as
to the various measure or strategies that might be employed in effective cash
management through Electronic Banking.
b. This research work will also expose
some likely problems encountered implementing measures/strategies embarked upon
in an effective cash management through Electronic Banking.
c. It will provide a frame work or
reference to practitioners either in academics or in the business world as will
as to bankers, accountants and investors.
d. It will go further to some as a
foundation for researchers who may wish to further their research in this
field.
1.5
RESEARCH HYPOTHESIS
The hypothesis of the study are been
formulated and will be based on the objective of the study such as;
1. Ho: If
appropriate skills are not developed in Management
Information System (MIS),
then there will be poor performance.
HI: If appropriate skills are developed
in Management Information System (MIS), there will be excellent performance and
employee efficiency.
2. Ho: When banks
do not acquire the necessary advanced technology, they will lose customer’s
confidence and will not be efficient and effective.
HI: When banks acquire the necessary
advanced technology, they will gain
customer’s confidence and will be efficient and effective.
3. Ho: When effective control measures are
not backed by complementary measures such as; passwords, protocols, encryptions
e.t.c. fraudulent activities can not be checked.
HI: When effective control measures are
backed by complementary measures such as passwords, protocols and encryptions,
fraudulent activities can be checked and controlled.
1.6
SCOPE OF THE STUDY
This topic of study is towards an
effective cash management through Electronic banking. Problems and prospects, a
Case Study of Zenith International Bank Plc. Therefore the research covers the
problems, objective of the effective Cash Management through Electronic banking
as well as the significance of it, limitations or possible problems and
consequences, solutions and authentic recommendations.
1.7
LIMITATIONS OF THE STUDY
The limitations of this research work
are catalogued below:
1. The practice of approving project
topics at the end of the first semester by the department does not allow enough
time for proper research, and this was a great constraint to the researcher.
2. This study was carried out without
the required expert skills by the researcher in computing to venture into a
topic of this nature which is very technical.
3. Hesitation on the part of the
respondents to divulge valuable information was also a constraining factor.
1.8
DEFINITION OF TERMS
Account: The
recording in the ledgers of the financial transactions that occur and the use
to which the records are put, their analyses and interpretation. Hence it shows
the receipts, the expenditure and outstanding balances.
Bank: A
financial house coordinating the applicable to finance recording account deposits
and withdrawals of a customer. The bank sends a statement to its customer at
agreed regular intervals.
Bills of Exchange: An unconditional order in writing, addressed by one person to exchange
another, signed to whom it is addressed to pay on demand, or at a fixed or
determinable future time, a sum certain in money to, or to the order of a
specified person or bearer.
Book-Keeping: This
is the actual record making phase of Accounting.
Cash: Consist
of the firms holding of currency and demand deposit, with demand deposit being
the most important for most firms. It is an Asset and a scene resource which
must be conserved and earn a reasonable return for the company.
Cash Management: Involves controlling the investment in current assets, which involves
managing the movies of a firm in order to maximize cash availability and
interest income in any idle funds.
Clearing House: The clearing house committee of Nigeria Clearing Bank situated in the
premises of CBN in Lagos
and some other cities. Representatives of each of the clearing banks attend
there each business day to exchange bills of exchange and cheques, etc. drawn
upon each other and settle for them.
Computer: An
electronic device designed to store and process large of data at high speed.
Input is by paper, punch cards, and magnetic disc. Output is by high-speed
printers or visual display unit. “Most customers’ account in the banks is kept
in the money stores of computers and updated daily”.
Credit Cards:
This is an electronic device that has the potential to challenge the
predominant role of cash for making small value payment and makes retail
transaction easier and cheaper for customers and merchants.
Electronic Banking: This is simply operating the banking system through the interact and the
internet signifies both “global public network and a family of technologies,
thus, a pivotal element of electronic commerce.
Encryption: Widely
used as a specify measures to protect internet messages. This technique make
use of keys to encode and decide messages e.g. Kerberos and Digital Encryption
Standard (DES), RSA and PAP.
Information Technology: This is nothing but a department made up of a units. The
software, hardwares and operations unit. These units though are separated but
work as a team to ensure that the common goal of excellent service delivery is
achieved.
Online: This
means that there is an active connection between two computers or between a
terminal and a host computer.
Modem: (Modular-demodulator).
This is simply a device that takes message from the computer. It converts data
in the computer memory from digital to analogue format so that data can be
transformed over public or private telephone lines. The MODEM performs the
reserve conversion when data gets to the other computer.
Protocols: Is
a tag greed format or structure of data exchange between two computers. If the protocols
used by both computers are not the same, data cannot be transformed
effectively.
Password: This
is the word or a significant identification word, known to only the user to
access information or process information on the system. It is a security
measure.
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