Banking has come a long way from the time of ledger cards and other manual filing systems. Most banks today have electronics systems to handle their daily voluminous task of information retrieval storage and processing. Three or four decades ago, banking was a simple business; customers saved their money with banks and received their financial services from banks. When customers open an account they receive a passbook from the banks with which the account would be operated and when it is a current account, they receive cheque books for the same purpose.
Banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and Communication Technology (ICT) is at the center of this global change curve of the electronic banking system in Nigeria today (stevens; 2002) asserts that they have over the time been using electronic and telecommunication networks delivering a wide range of value added products and services. Managers in the banking industry of Nigeria cannot ignore information systems because they play a critical impact in the current banking system. They point out that the entire cash flow of most fortune banks are linked to information systems.
Today, the banking industry has moved into an era of menu- driven ultra robust specialized software programmes called banking applications. These applications can carry out virtually all banking functions relying heavily on information collections, storage, and transfer and processing (ovia, 2008).
The 21st century advancement in technology has played an important role in improving service delivery standards in the banking industry. In its simplest form, Automated teller machines (ATMs) and deposit machines now allow customers carryout banking transactions beyond banking hours.
With online banks, individuals can check their account balances and make payments without having to go to the bank hall. This is gradually creating a society where customers no longer pay for all their purchases with hard cash. For instance, bank customers can pay airline tickets and subscribe to initial public offerings by transferring the money directly from their account balances by electronic transfer of credit to the seller’s account. As most people now own mobile phones, banks have also introduced mobile banking to cater for customers who are always on the move. Mobile banking allows individuals to check their account balances and make fund transfers using mobile phones. E-banking has made banking transactions easier around the world and it is fast gaining acceptance in Nigeria. The delivery channels today in Nigeria electronic banking are quite numerous as it is mentioned here, Automated teller machine (ATM), point of sale (POS), Telephone banking, smart cards, internet banking etc. Personal computers in the banking industry were first introduced into Nigeria by society general bank as the popular PC. Easy access to the internet and the World Wide Web (www) which is generally part of electronic banking. The delivery of products by banks on public domain is an indication of advertisement which is known as electronic commerce which involves the transfer of information across the internet between individuals and business organizations using electronic media.
It is on the basis of these developments in the banking industry that the study seeks to empirically examine the impact of electronic banking on bank performance.