ANALYSING THE IMPACT OF ELECTRONIC BANKING ON THE PAYMENT SYSTEMS AND THE INTERMEDIATION FUNCTION IN NIGERIAN BANKS

Alawiye-Adams, Adewale and Babatunde, Afolabi ANALYSING THE IMPACT OF ELECTRONIC BANKING ON THE PAYMENT SYSTEMS AND THE INTERMEDIATION FUNCTION IN NIGERIAN BANKS. Working Paper. SSRN, ABUAD.

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Abstract

Electronic Banking has made tremendous improvement on the payment function of the Nigerian Financial system on the one hand and on the intermediation function on the other. While the two functions are complementary in delivering efficient banking services, electronic banking has also aided a great departure from the traditional manual methods of service delivery methods over the last five decades. Apart from the efficiency recorded through the impact of electronic banking, other electronic features of service improvement through new products development that have been dependent on electronic banking, have facilitated a great value added banking service delivery and the level of efficiency within the industry. This additional product delivery includes internet banking, telephone banking, mobile banking, point of sale, ATM sharing through the interswitch company, accelerated local interbank settlement systems, accelerated clearing system (cheque truncation) and accelerated international settlement that hastens payments in international trade. All the above amongst others have been made possible through the impact of electronic banking on the payment systems and intermediation functions of the Nigerian banks. This is the main focus of this study. The study discovered that the Nigerian financial regulators have not done enough in sensitizing the Nigerian populace about the relevance of the impact of electronic banking functionalities and it is evident from the result of the study that the level of illiteracy and ignorance of information technology constitute a great set back to the adoption and usage of electronic banking by over 60% of the Nigerian populace. The study thereby recommend amongst other things that financial regulators should stem up sensitization activities on installation, adoption and usage of electronic banking which can only be possible through improved awareness creation among the public on information technology. Moreover, the study also recommended an increase level of technical education and improved training on information and communication technology amongst banking operators to enhance the application of the usage of electronic banking.

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