CHAPTER ONE
INTRODUCTION
Background to the Study
Britannia Concise Encyclopedia (1995) defined Bank as a financial institution authorized to provide variety of financial services, including customer and business loans (generally short term), checking service, credit cards and saving accounts. A bank is a financial institution authorized by its charter to perform certain functions (Osuala 2001). The bank is a financial institution set-up purposely for safekeeping of money, valuable goods and documents like wills and gold. It collects surplus funds from the general public, safeguards them and makes them available to the true owner when required and loans out fund (at interest) to those who need them (Obi 2002). In a nutshell, a bank is an institution engaged in safekeeping of monies, issuing drafts, and giving loans on interest to those who are in need of such.
The statutory functions of bank become more complex because of the complex nature of business activities and the increase in demand and number of customers, as well as the competitive nature of banking industry. (Irechukwu 2000). This made the bank to look inward to customer oriented services which will enhance efficient and effective customer services, Again, the business of banking is no longer perceived as merely the generation of deposit, liabilities and creation of liquid assets, but rather the generation, storage, manipulation, communication and application of financial information.
Traditional banking is characterized by physical decentralization with branches scattered around populated areas to give customers easy geographical access. The physical banks also serve to assure customers that their bank has substantial resources and can guarantee the security of their saving- (Loekeft and Rifter (1997). Information technology has however, also penetrated the banking sector.
Information technology, according to Woherem (2000), is perceived as an instrument for engendering competitive advantage in the Enterprises as it promotes greater efficiencies and effectiveness in financial transactions. The important to of information technology is to enable enterprises to develop more effective and efficient
operational and management process.
technological innovations into our lives.
been introduced is Electronic banking.
(E- banking) (Ainin 2005).
Thus, the information age has brought many One of the advanced technologies that have E- Banking is a process of transacting banking operations electronically. It is a process of using electronic devices in carrying out banking operations. E banking does away with most visits to the bank. It is a state-of-the-art-service that is just beginning to take off among banking customers especially in Yobe state. Indeed E-banking has the major potential for future development as it allows customers to do most of the things they do at the bank like make balance enquiries, payment, transfer of funds, pay bills over the internet. It also offers banking services outside of normal opening hours. In fact, it has effectively “opened” banks for business twenty-four hours a day, seven days a week (Rubino 2000).
E-banking has become increasingly prevalent, employed by financial institutions in Yobe state to reduce costs associated with having personnel, serve customers physically, shorten processing period increase speed, improve the flexibility of business transactions and provide better services for all (Shin and Fang 2004). E-banking services being rendered by commercial banks in Yobe state include online/internet banking, E-payment, Automated Teller machines (ATMs), personal computer (PC) Flash card/Telephone banking, Electronic fund transfer, Email, among others. These services in the banking sector are rendered to customers.
A customer is any one who makes buying decision of product or services from an individual or organization. Osuala (1998) explained that a customer is one who makes the actual purchase decision. Service is at the heart of the business of banking. E-banking has played, is playing and will continue to play a major role in the delivery of quality service in the banking industry- (Irechukwu 2000) Financial institutions have used e-banking to aggressively and innovatively create the requisite competitive advantage and dramatically improve the quality of service delivery to their customers. It does mean that the success of any business is dependent on the customers’ satisfaction with the products or services.
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