ELECTRONIC BANKING TECHNOLOGY IN NIGERIA: THE END OF THE
SECOND DECADE OF THE 21ST CENTURY
--- OTEI, 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. To reduce traditional or branch banking as much as 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 the introduction of mobile
phones to Nigeria. About a decade later, Nigerians are still struggling with
accepting electronic banking technology; and research scholars have 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 customer disinterest resulting in 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 was clear that the
research methodology did 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 started 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 those
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 is obtained in the more
advanced economies of the world.
To address this anomaly, a survey was conducted towards the end of the first
decade of the 21st century along this dimension, which was an outcome of my
Ph.D. thesis. The study resulted in 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 are to be done
irrespective of their age and level of education. As such, it is not a function of
age or educational level, but purely situational. The survey was therefore able to
redirect the ruling thought more logically. 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 piece of evidence was the sudden rise in the use of the POS terminal
for financial operations as a result of the recent Lekki toll gate shootings in
Lagos, Nigeria on the 20th of October, 2020. The #ENDSARS protest which
took place in Nigeria barely a few months ago but culminated in the unscrupulous
shootings of the protesters, and concomitant hijack of the protest by hoodlums
resulted in a vandalization of so many public and private properties, including
banks. This led to the 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, research interest must
be focused more on enhancing customers' willingness to use several electronic
banking technologies in Nigeria, to increase the rate of adoption within the
nearest future.