ABSTRACT

The purpose of this study was to evaluate the use of e-banking in selected financial institutions in Buea. The study had three specific objectives: to confirm how financial institutions function better when they use e-banking, to determine how many of the selected institutions use e-banking, and to evaluate the efficiency of e-banking in financial institutions. The study collected data from e-banking customers of Afriland First Bank, NFC Bank, and Ecobank in Buea using a self-administered questionnaire, with a total sample size of 10,000. The Statistical Package for Social Sciences (SPSS) was used to analyze the data collected. E-banking can mean the provision of information about a bank and its services via a home page on the World Wide Web (WWW). More sophisticated e-banking services provide customer access to accounts,  the ability to move their money between different accounts, and making  payments or applying for loans via e-Channels (Shah & Clarke, 2009). A financial institution (FI) is a company engaged in the business of  dealing with financial and monetary transactions such as deposits, loans,  investments, and currency exchange (Flores, 2021).  

Key words: Buea, E-banking, Financial institutions, Afriland First Bank, NFC Bank, Ecobank, Efficiency, Customer satisfaction, Customer support, Biometrics, Blockchain, Online banking apps, Mobile money, Bitcoin transactions, Statistical Package for Social Sciences (SPSS).

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background of the study

In recent years, the banking industry has been undergoing rapid changes, reflecting a number of underlying developments. The most significant has been advances in communication and information  technology, which have accelerated and broadened the dissemination of financial information while lowering the costs of many financial activities. A second key impetus for change has been the increasing competition among a broad range of domestic and foreign institutions in providing banking and related financial services.

Thirdly, financial activity has become larger relative to overall economic activity in most Economies. These developments have manifold consequences for the institutional and systemic structure of the financial sector in general and banking in particular. Directly issued securities are replacing bank deposits as a vehicle for savings. Markets for risk have emerged in which exposures to specific market or credit risks can be bought and sold separately from the underlying financial assets.

The business profile of financial institutions is also undergoing change. The service traditionally associated with banking is being offered by institutions not normally characterized as banks, while banks have gradually made forays into non-banking activities. Mergers and takeovers of smaller institutions have led to the emergence of transnational conglomerates, offering services ranging from traditional commercial banking to investment banking and insurance.

Electronic banking has become an integral part in the operations of any commercial banking institution in Cameroon as well as globally. The emergence of information and communication technologies over the past three decades has facilitated banking operations as well as the provision of banking services in order to suit the ever changing needs of customers. Electronic banking (E-banking) has many definitions varying with different researchers, in simple terms electronic banking can be referred to in terms of services like internet banking (online banking), telephone banking, TV-based banking, Mobile Phone Banking, ATM services and offline banking (Mahdi and Mehrdad 2012). The Basel Committee on Banking Supervision defined electronic banking as the provision of retail and small value banking products and services through electronic channels as well as large vale electronic payments and other wholesale banking services delivered electronically (BCBS, 1998).

Furthermore, a global perspective the evolution of Electronic banking took off in the early 1980s simultaneously with some of the major commercial banks around the world notably, The Bank of Scotland offering Nottingham Building Society (NBS) customers the first internet banking service in the UK and calls it “Homelink” aiding them in sending transfers and paying bills, which later on formed the basis of electronic banking services today (Pilcher, 2012). Whilst in 1981 in the United States in New York four of the city’s major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) were also introducing the concept of electronic banking to their customers (Gobankingrates, 2016) which paved the way for electronic banking operations in commercial banks worldwide. According to a statistics conducted by Bain & Company in 2012 on the usage of electronic and mobile banking as measured by the percentage of people in a particular country South Korea was ranked first at the first with 47% followed by China 42% while the USA and UK are at the seventh and eleventh position with 32% and 26% respectively of its population undertaking electronic banking transactions. Globalization has also played an important role in the proliferation of electronic banking around the world since one of the main factors of globalization on the banking sector is increased competition, thus in order for commercial banks around the world to stay ahead of the competition and meet up to international standards they have to be innovative in terms of integrating electronic banking in their operations.

1.2 Problem statement

The growth of Internet-based services has stimulated many financial Institutions to take advantage in providing E-banking Services to their clients. And this has overcome the huddles of frequent movements by clients to carry out transactions. These practices has led to a considerable increase in the volume of business transactions on daily bases. In this section, we seek to outline challenges faced by Banks in serving customers using E-Banking services.  And their potentials in exposing users to various types of risk especially cyber crimes(identity theft, privacy violation, theft, fraud).

The growth of internet-base services has stimulated many fraudulent practices that take advantages of some of the technology’s shortcomings (Abreu et al., 2016) These illicit practise have been most prevalent in recent years especially in the E-Banking sector (Carta et al., 2019)

Studies have shown that essential technological factors for recurrent use of technology are those capable of covering the risk associated with the use and providing security to the user (Sandal et al., 2020; Diniz et al., 2021). Therefore, when people use online services, such as E-banking, factors that undermine their confidence and willingness to use the service repeatedly become a threat, especially, when users are not careful with their credentials (login, Password)

In addition to the above, in most developing countries like Cameroon, electricity and poor internet connection are among the challenges of e-banking. Having a good knowledge of the e-banking services provided by banks (and their users) is imperative for any bank customer (Emad & Hanan, 2017). 

1.3 Research questions

Main research question:

How is e-banking applied by banks in Buea?

Specific research questions:

• How do Banks Prepare for E-Banking?
• What is the Process of the Implementation of E-Banking?
• What are the challenges by banks in the use of E-Banking?

1.4 Objective of the study

The main objective of this study is to determine the assessment of the application of e-banking in selected financial institutions in Buea. Specifically, the objective of the research goes thus:

1. To verify how financial institutions will function better while using E-Banking the system.
2. To examine how many of this institutions do carry out E-Banking.
3. The Evaluation Efficiency of E-Banking to financial institutions.

1.5; Research hypothesis

The Research hypotheses of this study are:

1. E-banking services like ATM services, Online Banking Apps, Mobile Money, Bitcoin Transactions are been perfumed by Banks in Buea
2. E-banking services like ATM services, Online Banking Apps, Mobile Money, Bitcoin Transactions are been perfumed by Banks in Buea.