Today, the advancement of mobile technologies has provided an opportunity for financial service providers in introducing new financial innovations. One of the emerging financial innovations introduced by financial providers is mobile banking or m-banking. This study evaluates the customer’s perspective of the adoption or introduction of m-banking in Nigeria. Questionnaires were administered to customers of banks to obtain their perspective on m-Banking. A sample of 100 students (customers) selected at random was employed for this study. The customer’s perception was found to be overwhelmingly positive. The most appreciated feature was ubiquity and the overview of a bank account. Fast reaction to market developments often cited as one of the most attractive features of mobile banking did not find high appreciation. Several factors including technical and security standards, regulatory and supervisory issues, and business and legal issues were found to be the main factors that might hinder mobile banking implementation in Nigeria. Connectivity and secure communication platform and encrypted messaging system were found to be the factors that would enhance mobile banking implementation in Nigeria.


Title I

Declaration II

Abstract III

Table of contents IV

List of tables VII

List of charts VIII

Abbreviations IX

Dedication X

Acknowledgment XI

Chapter One: Introduction

1.1 Background 1

1.2 Statement of the problem 3

1.3 Significance of the study 5

1.4 Objectives of the study 5

1.5 Scope of the study 6

1.6 Structure of the study 6

1.7 Limitations 6

Chapter Two: Literature Review

2.1 Scope of banking business 7

2.2 Scope of financial services 8

2.3 Scope of mobile banking 9

2.4 Services offered in mobile banking 10

2.4.1 Mobile accounting 10 Account operation 11 Account administration 12

2.4.2 Mobile brokerage 14 Account operation 15 Account administration 15

2.4.3 Mobile financial information 16 Account information 17 Market information 19

2.5 Mobile banking offers and employed mediums 19

2.5.1 Browser-based application 20

2.5.2 Messaging-based applications 21

2.5.3 Client-based applications 21

2.6 Challenges for mobile banking 22

2.6.1 Interoperability 22

2.6.2 Security 23

2.6.3 Scalability and reliability 24

2.6.4 Application distribution 24

2.6.5 Personalisation 24

Chapter Three: Methodology

3.1 Research methodology 26

Chapter Four: Analysis of Data

4.1 Introduction 28

4.2 Background information 28

4.3 Mobile banking 35

Chapter Five: Conclusions and Recommendations

5.1 Summary and conclusion 47

5.2 Recommendations 48

References 54

Questionnaires 58



1.1       Background of the Study

Technological developments particularly in the area of telecommunications and Information Technology are revolutionizing the way business is done. Electronic Commerce is now thought to hold the promise of a new commercial revolution by offering an inexpensive and direct way to exchange information and to sell or buy products and services. This revolution in the marketplace has set in motion a revolution in the banking sector for the provision of a payment system that is compatible with the demands of the electronic marketplace (Journal of Internet Banking and Commerce, 2008).

In line with global trends, the banking business in Nigeria has been undergoing tremendous changes Since independence in 1960. The first step in the evolutionary process was the gradual deregulation of the financial sector, which commenced in 1989. Then, in the 1990s the introduction of Automated Teller Machines (ATMs) was considered as the first and most visible piece of evidence of the emerging electronic banking in Nigeria (Abor, 2008). This was then followed by the introduction of Telebanking, PC-banking, and Internet-banking. The next imminent step in this evolutionary process inevitably appears to be mobile banking (M- banking).

The use of a mobile phone to conduct payment and banking transactions (M- banking) is at an early stage in a number of developing countries. Because mobile banking uses the existing rapidly expanding mobile phone infrastructure, it has the potential to be deployed rapidly and affordably to expand access to financial services among unbanked people. Access to financial services is one of the necessary ingredients to fight poverty (Otabil, 2008). Poverty alleviation is at the heart of most donor-supported programmes in Africa, and improving banking services through technology-driven initiatives could be part of pro-poor policies necessary to change the plight of the poor. A study by Bankable Frontier Associates (2006) has identified mobile banking as critical to poverty alleviation in developing countries.

In Asian countries like China, Bangladesh, Indonesia, and the Philippines, where mobile infrastructure is comparatively better than the fixed-line infrastructure, and in European countries, where mobile phone penetration is very high (at least 80% of the consumers use a mobile phone), mobile banking is likely to appeal even more (Wikipedia, 2008). This opens up huge markets for financial institutions interested in offering value-added services. With mobile technology, banks can offer a wide range of services to their customers such as doing funds transfers while traveling, receiving online updates of the stock price, or even performing stock trading while stuck in traffic.

According to the German mobile operator Mobilcom, mobile banking will be the ``killer application `` for the next generation of mobile technology (Wikipedia, 2008). In the last four years, banks across the globe have invested billions of dollars to build sophisticated Internet banking capabilities (Wikipedia, 2008). As the trend is shifting to mobile banking, there is a challenge for Chief Information Officers (CIO’s) and Chief Technical Officers (CTO) of these banks to decide on how to leverage their investments in internet banking and offer mobile banking, in the shortest possible time. However, there are several issues including the lack of adequate legal framework and security of mobile transactions which tend to hamper the continued progress of developing this sophisticated mobile banking application. Due to the issues raised in this section and the importance of mobile banking, it is important that a study is carried out to identify the prospects and challenges of mobile banking in a developing country like Nigeria.

1.2       Statement of the Problem

Banking is a centuries-old industry, yet, in a country like Nigeria, there is still a large proportion of the populations that have no bank account, or do not have any formal banking relationship, like accessing credit-loans or overdraft with any bank. It is estimated that this proportion could top 80% of the population (Otabil, 2008). But, technology, as one of the forces behind globalization, has driven mobile phone usage to impressive levels in Nigeria. There are now more mobile phone users in the country than bank account holders (Otabil, 2008). The relationship between the telecoms operators and banks could therefore drive down transaction costs and improve customer service for both industries. Customers will also benefit from efficient and effective services rendered by both the telecoms and the financial institutions.

Holding cash comes at a high price to poor people because of the risk of crime in many poor countries (Bankable Frontier Associates, 2006). Therefore appropriate financial services help poor people to access usefully large lump sums of money, which may either enable a pathway out of poverty through investment in income-generating activities (such as microenterprises) or asset creation (such as housing) or may reduce vulnerability to cashflow, as a result for example, of illness or climate conditions, mobile banking, therefore, has a major role to play in this area.

As poor people in many countries are forced to rely on informal financial services, which may be unsafe, or fringe formal financial product which may be expensive as well as unsafe, it is important that mobile banking is improved in these countries by the banks so that customers will make informed decisions about their finances. In other words, their exclusion from formal financial services has economic and social impacts which may exacerbate their poverty (Otabil, 2008). Nonor, (2009) reports that most banks in Nigeria now employ very innovative and cutting-edge technologies to offer access to their customers. One of such innovations which are fast catching up with a lot of Nigerians in the banking sector is Mobile banking, also known as M-Banking, SMS Banking, etc.

In the opinion of managers, though education of the service was limited across the country, a lot more of their customers may be willing to change the traditional banking way of queuing in banking halls to avail the convenience of mobile banking services.  It is therefore important that a study be carried out to find out the prospects and challenges of mobile banking since it may enhance the socio-economic development of Nigerians.

1.3   Significance of the Study

This study has numerous significance. Firstly, improved information communication technology (ICT) could help Nigeria leapfrog development challenges, and mobile banking through ICT could soon reflect general economic improvement among people through lower transaction costs. Secondly, it is also hoped that the results of this study will extend current knowledge on mobile banking technology. Furthermore, the study will provide deeper insight into what is needed in order for bank customers to accept this emerging technology and, thus, allow for improvement in banking strategies to attract potential users of mobile banking.

1.4   Objectives of the Study

The objectives of this study were to:

(1)   find out the perceived advantages and disadvantages of mobile banking to the customers.

(2)   find out expectations regarding the future development of mobile banking.

(3)   identify factors that may hinder its implementation in Nigeria.

(4)   identify factors that may enhance its implementation in Nigeria.

1.5   Scope of the Study

For the purpose of simplicity, this study refers to all providers of banking business and financial services as banks and does not differentiate between credit institutions and financial services institutions. Thus, all the customers of these institutions were targeted.    

1.6   Structure of the Study

This study consists of five main chapters. Chapter one dealt with the introduction to the topic, problem statement, and significance of the study. In addition, the objectives and limitations of the study were also covered here. Chapter two gave a review of relevant literature on the topic. In particular, this chapter looked at definitions, services offered in mobile banking, various mediums employed, and key challenges of mobile banking. Chapter three provided the methodology adopted for the study. It included the number of participants and their characteristics. The test, scales, interviews, or questionnaires schedules and how resulting data was analyzed. Chapter four presents the analysis of the information gathered. Conclusion of the study, a Summary, and recommendations to enable banks that are thinking of introducing mobile banking were covered in chapter five.

1.7   Limitation

Data for this study were collected from Students of the University of Uyo. This is because of the costs involved and the limited amount of resources available in collecting data from the general public.



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