Monday, 29 February 2016

What Is The Role Of E-Banking In Nigeria Economy?

What Is The Role Of E-Banking In Nigeria Economy?
Any child that is given birth today would grow up one day and think this was how the financial institutions operate in the past. What we needed to tell such child is that, today’s financial system is the product of centuries of innovation. The whole economic operation started as a barter economy and has successfully moved from barter to what we have today. The development of E-banking has led Nigerians to a shift from the old cash handling system to cashless society, which is also a global practice today.

The Electronic banking system in the Nigerian society today is a welcome development and its impacts on the economy are also over-whelming which cannot be overlook. Therefore, with this article, I will talk about E-banking in relations to its roles in Nigeria.

So let start…

What Is E-banking In Nigerian Context?

E-banking can said to mean an electronic connection between the bank and their customer in order to prepare, manage, control and carry out financial transactions. It can also mean the delivery of banking services and products through the use of electronic means irrespective of place, time and distance.

When I said product, am sure you know that such products and services can be any of deposit lending, account management, the provision of financial advice, electronic bill payment, and the provision of other electronic payment products and services such as electronic money.

As a business and financial tool, e-banking is rapidly transforming the Nigeria economy into a global market standard because of the roles it plays in the business transactions.

What are the factors that necessitated the adoption of E-banking platform In Nigeria?

There is no way we will talk of the roles e-banking plays in Nigeria and its economy, that we will intentionally omit those wonderful factors that led to the enhancement of the e-banking’s adoption across the country. Below are few of them: 

  • Advancements in information technology (IT): I can still remember when I was in the primary school and early grades in my secondary school education. There was nothing like handset not to talk of other technological devices we use on a daily basis today.

      To be sincere, there would not have been anything as e-banking if there were no advancement in        information technology. Therefore, we can say the liberalization of the telecoms industry that              brought about the GSM revolution was a key factor in the introduction of e-banking in Nigeria.

  •   Consolidation of Nigerian Banks: Nobody will deny it that consolidation has renewed confidence in the banking sector and put more money in the hands of so many Nigerian banks. Now with more money in the possession of banks, banks now looked for creative ways through which their customers could conveniently have access to their funds 24 hours, 7 days a week, for a small fee and this led to e-banking.
     What Are Now The Roles Of E-banking In Nigeria?

          E-banking plays an important role in Nigeria society and on Nigeria economy. Gone are those       days when my mum will want to travel to Lagos from Kaduna to purchase her shop’s item and she    would have to travel with a huge some of money. Today, the story is completely different. The e-        banking platform has changed everything to easier, secured and accessible means.

     Here are some of the important roles E-banking plays in Nigeria
  • Breaking Down Of Geographical Barrier In Nigeria Business Environment:  Years back, one of the hindrances for local business to grow was the problem of geographical barriers. People in the local area could not conveniently carry out financial transactions because of the absence of financial institutions in their locality. 

               The presence of E-banking has successfully broken down these geographic barriers. In Nigeria            of today, consumers can now carry out any form of banking transactions with a telephone,                  personal computer, or an ATM, it does not matter where the bank is located.  This is more                    convenient and readily available whenever there is network.

  •       Reduction In The Rate People Carry Cash Around: I can still vividly remember the first time I was going to resume school in Zamfara State. Federal Polytechnic Kaura Namoda was not located in the State capital and I heard banking activities could be difficult in that place, if at all it was even available. So I had to withdraw all my cash and kept it in my pocket as the school, hostel and every other fee were to be paid in cash. This was contrary to 2011 when I got admission into University of Ilorin, where every single payment was online.

          Presently, the presence of electronic banking has now brought about reduction in cash                         transactions with long-term prospects of minimal cash handling. So nobody is going about with           much cash on the street again. 

          I think unlike before that my mum used to travel with such a huge amount of cash to Lagos in a           night bus, anyone that does that today must be queried for having a hidden agenda. 

  •       Easy And Convenient Financial Transactions: One first of January this year, I was in Lagos. My friend was some needed product in his house by a vendor. Immediately after the whole supply process, he collected their company’s account, and transferred the contract sum into the account with a short code through GTbank. 

          Honestly, that was my first time to experience it. I knew of other means of carrying out                       financial transaction on e-platform, but I never knew e-banking has grown to the level of using           short code to transfer fund without been connected to the internet. This is to explain the extent             of comfort, e-banking as brought to Nigeria and Nigerians.

        This means you can now carry out financial transaction anywhere anytime in as much as you are          with your phone even without internet. What is more convenient than this?

  • E-Banking Reduces Highway Robbery: To a greater extent, highway robbery has reduced tremendously.  Robbers no longer go on the highway in search of cash in Nigeria. The one we see are those in search of other valuables like handsets, laptops, gold and others, because they are also aware that Nigerians no longer move with cash.

        Those of them who go not peaceful go out of crime now indulge in, kidnapping, money rituals,           phone stealing and some other illegal source of money. To me this is one of the most important           role e-banking has played in Nigeria that has actually transform our highways to a more peaceful         ones.

      Despite the benefits this e-banking provided for Nigerians, it also has its own disadvantages,                though it is not within the scope of this article.

        I Hope This helps?

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