ELECTRONIC BANKING TECHNOLOGY IN NIGERIA: THE END OF THE
FIRST DECADE OF THE 21ST CENTURY
--- Okonkwo, Deborah Chinwendu
The rapid trend of globalization and advancement in technology has transformed
almost every aspect of life across the world generally and the banking sector is
not left out. In order to reduce traditional or branch banking as much as were
possible, banks introduced alternative systems of banking ranging from mobile
apps to other forms of internet and electronic platforms. To encourage use,
they further designed user-friendly interfaces that appeal to individuals across
the world. Towards the end of the 20th century, more advanced economies had
already gained widespread acceptance and use of electronic banking technology
even before mobile telephones were introduced into the Nigerian market. The
turn of the 21st century, specifically August 6th, 2001 saw to the introduction of
mobile phones to Nigeria. About a decade after, Nigerians are still struggling
with accepting electronic banking technology; and research scholars had been
trying over the years to find out the underlying reasons.
Unfortunately, social science scholars in Nigeria have been unable to solve this
problem of customers disinterest resulting into low adoption of electronic
banking technology. This could be attributed to the fact that they had been
replicating findings generated from advanced economies even when it is clear
that the research methodology does not suit the Nigerian context. At the end
of the 20th century, several studies on adoption had already been done in
advanced countries and had emphasized age and educational level (some others
include income), as significantly influencing customers’ adoption of electronic
banking services. At the beginning of the 21st century, social science scholars
had already starting replicating these studies within Nigeria even when the
Nigerian market was just welcoming the introduction of mobile phones. That was
rather too hasty! To worsen matters, they were even aligning findings alongside
that of their foreign counterparts. That is not the true picture of electronic
banking services adoption by Nigerian bank customers as the stage of
technological advancement in Nigeria is still a far cry from what obtains in the
more advanced economies of the world.
In order to address this anomaly, a survey was conducted towards the end of
the first decade of the 21st century along this dimension, which was actually an
outcome of my Ph.D thesis. The study resulted into striking findings that
neither age nor level of education influenced customers’ adoption of electronic
banking services in Nigeria. This refuted the prevailing stance surrounding the
situation of electronic banking services adoption in Nigeria. Most studies
previously done by other scholars in Nigeria had shown that the younger age
group is prone to accepting and using electronic banking technology than the
older age group; and that the higher the level of a person’s education, the
greater the chances of using electronic banking.
The use of the Automated Teller Machine (ATM) in Nigeria is a case in point.
Anecdotal evidence shows that bank customers are compelled to use the ATM
whenever certain transactions within stipulated financial limits were to be done
irrespective of their age and level of education. As such, it is not basically a
function of age or educational level, but purely situational. The survey was
therefore able to redirect the ruling thought in a more logical manner. While it
is not altogether faulting the standpoint that the younger and more educated
customers could use certain electronic banking services more than the older and
less educated counterparts, it is differing in its tone of finality. The emphasis
here is that the adoption or non-adoption of electronic banking services across
all categories of customers is purely situational, and not final.
Many individuals in Nigeria who possess very strong educational qualifications
have never tried or are not just willing to use electronic banking services. If
educational level is truly a core determining factor, it is expected that much
more educated individuals should be using one form of electronic banking
services in Nigeria. Surprisingly, this is not the case as many of them still
prefer banking operations done over-the-counter to alternative electronic
channels. Yet, this same category of people use the internet daily for other
purposes such as educational, recreational, social networking purposes, etc, but
neglect the use of the same internet and mobile phone for banking purposes.
Another evidence was the sudden rise in use of the POS terminal for financial
operations as a result of the recent Lekki toll gate shootings in Lagos, Nigeria
on the 20th October, 2020. The #ENDSARS protest which took place in Nigeria
barely few months ago but culminated in the unscrupulous shootings of the
protesters, and concomitant hijack of the protest by hoodlums resulted into a
vandalisation of so many public and private properties, including banks. This led
to a closure of some bank branches that were affected. Thus, many ATMs were
unusable due to the destruction. The resulting curfews placed by the
government of affected states increased the difficulty of accessing cash. Thus,
making cash deposits or withdrawals either by using the ATM or through branch
banking became more difficult. This suddenly led to the proliferation of several
Point-of-Sale (POS) stands, and therefore increased the use of POS across all
categories of individuals, whether young or old, educated or illiterate. This is
also clearly situational.
It is therefore recommended that further research be carried out by social
science scholars on demographic influences on customers’ adoption of electronic
banking services, but delineating age and educational level specifically as
mediators rather than predictor variables. Furthermore, it is important that
research interest should be focused more on enhancing customers’ willingness to
use several electronic banking technologies in Nigeria, in order to increase the
rate of adoption within the nearest future.