Master Thesis

Computer Science
Thesis no: MCS-2008:7
January 2008

ACCESSING E-BANKING BASED ON

RESILIENT TRANSACTION

Olowookere Sunday & Popo-ola E. Arnold

Department of Computer Science

School of Engineering
Blekinge Institute of Technology
Box 520
SE – 372 25 Ronneby
Sweden
This thesis is submitted to the Department of Computer Science, School of Engineering at
Blekinge Institute of Technology in partial fulfillment of the requirements for the degree of
Master of Science in Computer Science. The thesis is equivalent to 20 weeks of full time
studies.

Contact Information:
Author(s): Sunday Olowookere, Arnold Popo-ola
E-mail: [email protected], [email protected]

University advisor(s): Jenny Lundberg

Department of Software Engineering

Department of Computer Science Internet : www.bth.se/tek

Blekinge Institute of Technology Phone : +46 457 38 50 00
Box 520 Fax : + 46 457 102 45
SE – 372 25 Ronneby 2
Sweden
 ABSTRACT
The adoption of Electronic Banking by commercial enterprise has been in existence
since the mid 90s, much greater in number due to lower operating costs associated
with it. Electronic banking has been in the form of automatic teller machines and
telephone transactions. More recently, it has been transformed by the Internet, a new
delivery channel for banking services that benefits both customers and banks. Access
is fast, convenient, and available around the clock. Furthermore, customer’s
application for electronic banking facilities is expanding as the cost savings on
transactions over the internet are significant. The chances and threats that the internet
symbolizes is no longer news to the present day banking sector. No traditional bank
would dare face investment analysts without an Internet strategy. Moreover, business
success is not guaranteed by a detailed and thoughtful approach to the internet. The
main intention behind the commencement of electronic banking services is to
provide the customers with an alternative that is more responsive and with less
expensive options. With options just a click away, customers have more control than
ever. Their expectations are usability and real-time answers. They also want personal
attention and highly customized products and services.
This research intends to see how electronic banking has improved the efficiency and
effectiveness in the bank, take a look at the security measures on ground and also
profer a solution that can eradicate fraud in electronic banking.

Keywords: Electronic Banking, Security, Transaction, Online Banking, Service

delivery channels.

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CONTENTS
Abstract … … … … … … … … … … … … … … … … … … … …2
Table of contents … … … … … … … … … … … … … … … … … 3
Introduction … … … … … … … … … … … … … … … … … … ..5
Chapter 1: Background … … … … … … … … … … … … … … ...7
1.1 Technological Effects … … … … … … … … … … … … … ...8
1.2 Importance of Electronic Banking … … … … … … … … … ...9
1.3 Drawbacks of Electronic Banking … … … … … … … … … .10
1.4 Challenges of Internet Banking … … … … … … … … … … .11
Chapter 2: Problem definition/Goals … … … … … … … … … …13
2.1 Security … … … … … … … … … … … … … … … … … ..13
2.1.1 Customer Level Authentication … … … … … … … … ...14
2.1.2 Application Level Security Management … … … … … ...14
2.1.3 IP Level Security … … … … … … … … … … … … … 15
2.2 Legislative and Regulatory Issues … … … … … … … … … ..15
2.3 Social Cultural Challenges … … … … … … … … … … … ...15
2.4 Service Quality in Internet Banking … … … … … … … … ... 16
2.5 Trust in Web and Security Concerns … … … … … … … … ..17
2.6 Authentication in an Electronic Banking Environment … … ... 18
2.7 security Guidelines for E-Banking … … … … … … … … … 19
2.8 The beliefs of Consumers about E-Banking … … … … … … .20
2.9 Aims and Objectives of Study … … … … … … … … … … ...23
2.10 Statement of Research Hypothesis … … … … … … … … ... 23
2.11 Delimitations … … … … … … … … … … … … … … … ..24
Chapter 3: Methodology … … … … … … … … … … … … … … 25
3.1 Research Design/Process … … … … … … … … … … … … 26
3.2 Area of Study … … … … … … … … … … … … … … … ...28
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 3.3 Population … … … … … … … … … … … … … … … … ...28
3.4 Sample and Sampling Procedure … … … … … … … … … ...28
3.5 Instrument for Data Collection … … … … … … … … … … .29
3.6 Reliability and Validation of Instrument … … … … … … … .29
3.7 Methods of Data Collection … … … … … … … … … … … .30
3.8 Method of Data Analysis … … … … … … … … … … … … 31
Chapter 4: Data Analysis and Interpretation of Results … … … ...32
4.1 Choice of Interview used … … … … … … … … … … … … 32
4.2 Data Analysis … … … … … … … … … … … … … … … ...33
4.3 Analysis of Security Measures … … … … … … … … … … ..34
Chapter 5: Summary, Conclusion and Recommendation … … … .37
5.1 Summary of Findings … … … … … … … … … … … … ... ..37
5.2 Conclusion … … … … … … … … … … … … … … … … ...39
5.2 Recommendations … … … … … … … … … … … … … … .39
5.2 Future Work … … … … … … … … … … … … … … … … 42
Appendix A: Definitions … … … … … … … … … … … … … … 43
Appendix B: Table of Chi-Square Statistics … … … … … … … ...48
Appendix C: Questionnaires … … … … … … ... … … … … … ...50
Appendix D: Responses/Hypothesis Testing … … … … … … … ...54
References … … … … … … … … … … … … … … … … … … ...63

5
 INTRODUCTION
For the past two decades now, the Banking sector has chosen a new service channel
based on the progress of information technology. The perpetual responses of the
banking sector to the changes in customer preferences and needs, increasing
competition from non-banks, changes in demographic and social trends, information
technologies advances, channel strategies, and government deregulations of the
financial service sector [2]. The achievements and non achievements of many retails
banks is based upon the abilities of management to foresee and respond to such
changes in the financial marketplace. In the search for sustainable competitive
advantages in the technological financial service industry, banks have acknowledged
the value to differentiate themselves from other financial institutions through
distribution channels. This has led to the development in banks, and utilizing new
alternative distribution channels to reach their customers [3]
In addition, customer’s transaction and communication abilities have being fasten by
the developments of information technology [6]. In the early 70s, the banking sector
distribution channel started its revolution in information technology, with credit card,
the Automatic Teller Machine (ATM) and the ATM networks being unveiled. After
which the telephone banking, cable television banking came into existence in the
80s, and the progress of Personal Computer (PC) banking in the late 80s and in the
early 90s [6]. Information technology enabled electronic channels to perform many
banking functions that would traditionally be carried out over the counter [6]. The
rise of electronic payments media such as debit and credit cards has caused the value
of checks paid in the United States to fall to from about $49billion in 1995 to about
$42 billion in 2002 [5]. Furthermore, the use of paper cheque is being supplemented
step by step with electronic images, allowing the storage capacity to be high,
reducing costs and improving customer services [8].
The development of electronic banking, such as internet banking from e-commerce,
has changed the banking relationships of the personnel and that of the customer,
which has many advantages over the traditional banking delivery channels. This
includes savings cost, marketing and communications, the offering of services
regardless of geographic area, time and it increases customer base [6]. The method in
which information are being disseminated coupled with exchanges is expected to be
widely accepted in the nearest future.

6
Due to the adoption of the service channel (alternative channels such as ATMs,
Internet/Mobile Banking, etc) which are widely known, a customer is capable of
carrying out banking transactions without his physical appearance at the bank which
has made security the ultimate requirement for the success of the transaction being
carried out. It is an obligation for banks to apply a better strict security levels due to
the many kinds of threats that have being recently identify with these alternative
channels.
Although, majority of the banks presently have chosen very strict security measures
to all channels with extremely good results so far but a new two-factor authentication
to improve the strength of the security of internet and banking transactions has being
recently spoken about.

7
 CHAPTER 1: BACKGROUND
“Banks have traditionally been in the forefront of harnessing technology to improve
their products and services. They have over the time been using electronic and
telecommunication networks for delivering a wide range of value added products and
services”. The range of services and products offered by different banks vary widely
both in their contents and sophistication. E-banking provides enormous benefits to
consumers in terms of the ease and cost of transactions. However, it can be thought
of as a service that allows customers to use some forms of computer to access
account-specific information and possibly conduct transactions from a remote
location – such as at home or at the workplace. The most efficient system
architecture and advanced technologies are being used for E-banking results for the
provision of internet banking services for the financial sector which enables the
banks to carry out the their services like web banking to their customers. While over
the years developed countries like Sweden have not tapped into the freedom to
conduct routine banking transactions from the comfort and security of customer.
Electronic banking has been around for some time in the form of automatic teller
machine and telephone transactions. “More recently, it has been transformed by the
Internet, a new delivery channel for banking services that benefits both customer and
bank. Access is fast, convenient, and available round the clock, whatever the
customer’s location. Plus, banks can provide services more efficiently and at
substantially lower costs” [9]. E-banking also makes it easier for customer to banks’
services and products, can increase completion among banks, and allows banks to
penetrate new markets and thus expand their geographical reach. Some even see
electronic banking as an opportunity for countries with underdeveloped financial
systems to leapfrog developmental stages. Customer in such countries can access
services more easily from banks outside his/her own country through wireless
communication systems, which are developing more rapidly than traditional “wired”
communication networks.

Probably, the major phenomenon of the twenty first century has been electronic
communication and information technology. The technological progress is now
sufficiently well advanced for it to enable commercial transaction and non-
commercial activities which is facilitated through the use of information technology
and network technology such as the internet, intranet and extranet. Electronic
8
Banking has emerged as a significant and rapidly growing component of the world
economic exchange. Through Electronic Banking the world economic exchange has
been reduced to a tiny global village in terms of its information capacity and the
resources it holds which can be accessed by anybody from anywhere in the globe
through the use of medium of E-commerce namely the internet and some other
electronic devices.

Electronic Banking does not only encompass the way you shop over the Internet, but
also the ways you carry out banking transactions. A few years ago, banks started to
offer their service on the Internet, in addition to the traditional services in the branch.
This allowed customers, more independence in the choice where and when to bank,
as they were not bound to opening hours. Electronic Banking has revolutionized the
way business is transacted by globalizing the business enterprise. Multinationals,
small and medium scale industries no matter their geographical locations are all
beneficiaries of electronic banking. It encompasses all kind of commercial
transaction that is conducted on an electronic medium, mostly through the Internet.
E-banking links business to customers no matter their geographical location. It
allows companies to make new business contacts from different global business
alliance, test near products and services, and make market research and other
enquiries all at a minimal cost both financial and otherwise.

1.1 TECHNOLOGICAL EFFECT

Technology-based enabled service has being one of the numerous life-made easy
technologies that have evolved with time. In this type of service, technology does not
only provide a life free from troubles but also has it brought into existence a situation
whereby products try to differentiate themselves from competition through giving
services as overall packaged [44].
There have being the existence, a situation whereby the traditional distinction
between products and services are no longer expressed since the evolution of
technology-based enabled-service [45], neither is it possible to distinguish between
the firms producing products and those rendering services as most firms now offer
both [46]. Continuum of different product-service combinations is what we now have
instead of having distinction between products and services [46]. It was argued that

9
the blurring of the distinction in contrast to, as it was in the past would likely result
in gaining market competitive advantage by the firms. Technology would play a
major role in this continuum of products and services [45]. It was stressed that
technology would continue to play an important part in the delivery of services [47],
while emphasizes was laid that technology would make up a relevant component in
the customer-firm interactions [48]. The out come of it will be an addition in the
interactions of customer with technology interface. The traditional market place
interaction would be replaced by market space interaction due to this new trend [49].
This market space interaction will give rise to either technology-based assisted-
service or technology-based self-service.
Technology-based assisted-service is referred to as the service activities that are
being performed for the client by the supplier of the service, while technology-based
self-service is a situation where the client manipulates the system on his/her own to
accomplish his/her intentions. Self-service technology was referred to as
personalization [50] and self-help [51]. Presently in Sweden, technology-based self-
service is a key criterion for long-term business success which has obtained greatly a
broad adoption perhaps due to the forefront position Sweden has attained in
technological development [52].

1.2 IMPORTANCE OF ELECTRONIC BANKING

Electronic banking provides a number of advantages for both the banks and their
customers. Electronic banking has made life much easier and banking much faster
and more pleasant, for customers as well as the bank [43].

It saves time spent on queuing in the Bank.

It removes geographical limitations for small and medium size banks, thereby
paving ways for international operation without limits.

It has no time limitation i.e. banking transactions may be performed through

out the day, week and from any place they can have access to the Internet.

It provides efficient cash management for interest optimization.

It provides convenience in terms of the capital, labor time and all the
resources needed to make a transaction.
10
 It has assist banks to increase in data collection, data management, and
financial engineering that have improved the ability of potential creditors to
assess the creditworthiness of potential borrowers and to price the risk
associated with those borrowers through standardized mechanisms such as
credit scoring [38].

Taking advantage of integrated banking services bank, clients may compete

in new markets, gain access to new customers and grow their market share.

Banking technological developments make it much easier and cheaper for

customers to compare and contrast products and to establish multiple banking
connections [39], which could alter the purchasing decision making process
of the customer [40].

It provides some sought of security and privacy to customers, utilizing state-

of-the-art encryption and security technologies.

1.3 DRAWBACKS OF ELECTRONIC BANKING

Electronic banking like any other thing in life has its own draw backs. They are:

A Customer needs access to a computer with internet being connected which

signifies that the access to a customer’s account is solely dependent in
technology in the case of E-banking.

Furthermore, E-banking is subject to the dependability of other computers

and web server which means that if it is faulty, a customer can not have
access to his/her account [14].

It also means that a customer has to know how to use a computer before
he/she can carry out a transaction. There are set of people e.g. older ones who
don’t want to follow the technological trend probably being sacred and
doesn’t want to learn would prefer the traditional banking way [26].

The governmental policies that guide Internet banking operations across

international border are not efficient [41].

The services of a third party are usually required by the bank to run the online
banking services to their clients [42].

11
1.4 CHALLENGES TO ELECTRONIC BANKING

The internet E-banking being a new technology faces a problem of acceptability.

Then it has to battle with competition since competition is the driving force behind
the introduction of the Internet banking. The banking system being an oligopolistic
market (a market condition in which sellers are so few that the actions of any one of
them will materially affect price and have a measurable impact on competitors), it is
necessary for the e-bank to compete in the first place through the sub-strategy of
product-service differentiation. To enhance the product-service differentiation; the
internet should be exploited as a channel to build, maintain and develop long-term
client relationships through the ready access to a broad and increasing array of
products, service and low-cost financial shopping, rapid response to customer
inquiries, and personalized product-service innovation. Another challenge prone to
the e-banking is transaction security, due to the open nature of the Internet; this is
likely to emerge as the biggest concern among the e-banks. Since transactions risk
would create a significant barrier to market acceptance, its management and control
are crucial for business reputation and the promotion of consumer confidence as well
as operational efficiency. To safeguard this, it is imperative for the e-bank to
implement measure to protect client assets and information. The e-banking is likely
to be challenged by demographics; this can prevent some commercial banks future
access to profitable, IT-seasoned customer segments. To exploit this challenge and
increase market share, financial institutions must seek to attract and capture
computer-literate Internet users who are young and educated as early as possible to
supplying at low cost technologically innovative and sophisticated products and
services such as globally mobile banking and e-financial transactions over the
Internet. The paper submitted that greatest challenge facing internet e-retail banking
is the enhancement of consumer acceptance on the demand side [37].

Electronic banking has also brought new challenges for bank management,
supervisory and regulatory authorities.

Operational risk: Operational risk of e-banking is the central of system availability

and security to the dependability on new technology which provides services.
Security threats can be internal or external to the system, due to this, banking
12
regulators and supervisors must check that banks have the right measures in place to
secure data integrity and confidentiality. These security practices should be tested on
regular basis by technical skilled persons to analyze network vulnerabilities and
recovery preparedness. ‘The integral part of the overall management of risk needs to
include the management of the heightened operational risks and supervisors need to
include operational risks in their safety and soundness evaluations’.

Legal risk: Electronic banking carries heightened legal risks for banks. Banks has
grown geographically faster in terms of services which they render through e-
banking compared to the traditional banking method. In some cases, however, the
banks rendering these services might not be fully acquainted with laws and
regulations abiding in that area before offering such services, either with a
permission (license) or not. When this permission is not there, a virtual bank not
having adequate contact with its supervisor from the host country may find problems
adapting to the regulatory changes. As a result, virtual banks being unaware
unknowingly could go against the protection laws of a customer, including data
collection and privacy. After which, they subject themselves to losses through
lawsuits or crimes that are not prosecuted because of jurisdictional disputes. Money
laundering has being on for some time now which is being facilitated by e-banking
due to the anonymity it affords. Many countries have issued proper rules for the
identification of customers when an account is being opened.

Reputational risk: Bank’s reputation can be damaged due to violation of security

and disruptions to the availability of the system. Reputational risk is more dependent
on the reliance on electronic delivery channels which in turn increases its potentials.
For instance, a bank that offers electronic services experienced any problems that
might lead to the lost in confidence customers have for electronic delivery channels
in general, these problems can potentially affect other providers of electronic
banking services. ‘Reputational risks also stem from customer misuse of security
precautions or ignorance about the need for such precautions. Security risks can be
amplified and may result in a loss of confidence in electronic delivery channels’.

13
 CHAPTER 2: PROBLEM DEFINITIONS/GOALS

There are quite a number of problems associated with electronic banking. These
problems are more pronounced in third world countries like Nigeria where
infrastructures for electronic banking is hardly available or is out of the reach on
many businessmen or organization. Some these problems are as follows:

2.1 SECURITY

Financial institutions that provide electronic banking today have found customer’s
security as a vital issue in their day-to-day business transactions due to the fact that it
involves the internet which is inherently unsecured. Moreover, using the internet as a
medium for electronic banking, one can impersonate another person or process and
have access to other information like banking information [13]. Guttmann in his
article did argue that a high degree of security is being pursued in E-banking
transactions. None of the parties to the transaction or third parties should be able to
change or create information that is sent from the one party to the other [20]. He
further went to outline some ways to secure e-banking transactions: Firstly, the use of
cryptology which is a way to code messages and making those codes so that they
cannot be decoded by third parties. Also digital signature can be used too by
customers. Moreover, SSL (Secure Sockets Layer) that is today integrated in all
browsers such as Internet Explorer, Mozilla Firefox etc, and it allows the connections
between client and server to be more secured. SET (Secure Electronic Transaction) is
also an essential application that secures payments with Visa and Master Card [20].
Finally, firewalls and rooters are also required which allows the data to be filtered.
Firewalls stands as an obstruction between the outside Internet and the internal bank
network. He finally concluded that there should be a group that runs a daily check to
see if all is ok and to update data [20].

It is obvious that security issue that deserves the highest importance in such system
where security breaches could lead to enormous disaster. Hence, it imposes security
among these levels: Customer level authentication, Application level, IP level.

14
2.1.1 CUSTOMER LEVEL AUTHENTICATION

In E-banking, it is of great importance that all the levels should be guaranteed

security. Customer’s authentication is not left out. At the early years of banking, to
authenticate a customer, there exist a policy given by the central bank that whenever
a customer opens an account, his/her photo and signature of the customer is being
stored and processed which is then used to verify a customer. While in the present
day banking, customers can authenticate themselves by digital certificate which is
obtained from certificate authority.

2.1.2 APPLICATION LEVEL SECURITY MANAGEMENT

Many transactions happen electronically in the application level. More that one
message is required for each transaction and the message can’t be forged or reused,
which should have some desirable properties like authenticity, confidentiality,
Integrity.

Digital signature can be used to support all of these except confidentiality. It is a

protocol that has same affect as real signature and maintains the properties mentioned
above and it uses the public key cryptography [15].

Digital signature: Here, signer signs the message and this can be confirmed only by
anybody that comes from the signer, invariably, signer can not forge and the message
can never be modify while in transit. For authenticity to be ensured, the receiver can
confirm the signature and knows that the message is being sent by the sender [16].
For this operation to be successful, hash algorithm and asymmetric encryption is
being used for its operation. In digital signature, two keys are involved which are the
private and public keys. Whereby the sender signs a message with his private key
and the receiver decodes it with his public key. To avoid the instance where someone
else pretends to be authentic user because he/she has the public key, digital certificate
can be used. “A digital certificate is an electronic credit card that establishes your
credentials when doing transactions on the Web which can be gotten from a
certification authority (CA)”.

15
2.1.3 IP level security (IPSec Protocol)

IP security was initiated for securing communication across LAN, WAN and Internet.
Nowadays, many forms of attacks like packet sniffing, IP spoofing do take place
which can lead to an attacker gaining privileges to read information that is being
transmitted like user id and password information [16]. The security features are
implemented as extension headers that follow the main IP header, which means that
there are mandatory security features for IPv6 which are optional to IPv4 [15].
Authentication Header (AH) is an extension header for authentication while
Encapsulating Security Payload (ESP) header is an extension header for privacy.

Despite all measures are taken to enforce security in the above levels, fraud via
electronic banking is still at large.

2.2 LEGISLATIVE AND REGULATORY ISSUES

For a successful implementation of E-banking, National, regional and international

law, rules and regulations are its requirements. Legal support is necessary for
protecting the interests of banks and customers in various areas relating to E-banking
transactions. Some of the important issue like liability for loss whenever fraud occur,
to provide loss allocation in case of insolvency, cherub truncation, to preserve
records, prevention of fraud etc are to be cleared in the legislation.

2.3 SOCIAL CULTURAL CHALLENGES

The role of culture within the context of Information Technology has oft been
researched, given that Information Technology and in particular the Internet has been
very much synonymous with globalization [17]. More recently, it was found that
cultural differences impacts on trust and satisfaction with online bargaining [18].

Culture can be defined as ‘the collective programming of the mind, which

distinguishes one group from another. There are four major dimensions of culture,
which are power-distance, uncertainty avoidance, masculinity and individualism
[19].
16
 Power-distance is the “degree of inequality among people, which the
population of a culture considers normal” [17].

Uncertainty avoidance is the “degree to which people in a culture feel

uncomfortable with uncertainty and ambiguity” [17].

Masculinity is the “degree to which values like assertiveness, performance,

success and competition prevail over gentler qualities like the quality of life,
maintaining warm personal relationships, service, care for the weak, etc”
[17].

Individualism is the “degree to which people in a culture prefer to act as

individuals, rather than as members of groups” [17].

Although electronic banking has being on for sometime now, the confidence and
reliance, a customer has in traditional banking system will make them less likely to
adopt new technologies. New technologies will not be successful until customers are
satisfied with privacy and security aspects. It also require sometimes to earn
confidence among the customers even it is easier and cheaper than the traditional
methods.

2.4 SERVICE QUALITY IN INTERNET BANKING

There have being constant response to the changes in customer preferences and
needs in Banking Industry which has led to the increase in competition from non-
Banks, changes in demographic and social trends, Information Technologies
advances, channel strategies, and Government deregulations of the financial service
sector [2,6]. The capabilities of management to foresee and react to such changes in
the financial market place have a strong hold on the success or failure of many retail
banks. Furthermore, Information Technological developments in the banking
industry have speed up communication and transactions for customers [6]. The
evolution of electronic banking has changed the quality in the relationship between a
personal customer and the banking sector and it has many advantages over the
delivery channels of traditional banking. This includes an increased customer base,
cost savings, mass customization and project innovation, marketing and
17
communications, developments of non-core businesses and the offering of services
regardless of geographic area and time [6].

The adoption of electronic banking in New Zealand was a growing trend; the first
bank to render electronic banking services was the Auckland saving Bank (ASB) in
1996, after which Bank Direct, a subsidiary of ASB that was the first and only virtual
Bank that has no physical outlets [29]. This was followed by National Bank of New
Zealand (NBNZ) and Bank of New Zealand in late 1999. During the last quarter of
2001, there were approximately 480,000 regular internet users utilizing internet
banking facilities to conduct their banking transactions [30].

Furthermore, Financial institutions and many commercial banks have adopted

electronic banking for the past two decade because it doesn’t involve in face to face
transaction which resulted in higher quality. Some advantages of electronic banking
has makes many customer in the whole wide world received and turn better side to
electronic banking based on this following such as perceived usefulness which means
that electronic banking technology has a different services which could start from the
ordinary common Automatic Teller Machine (ATM) services and direct deposit to
Automatic Bill Payment (ABP), Electronic Transfer of Funds (EFT) and computer
banking (popularly known as PC banking). Uses of these electronic banking
technologies have tremendously grown in the western world while other like African
has been adopted more slowly. Another point is ease of use which could be explained
in the sense of learnability and understandability of user interfaces, for examples,
ease of use are password such as person names or other real words are relatively easy
for a user to recall, but they are weak from a security perspective because they are
vulnerable to dictionary attack, i.e. easy to guess [31].

2.5 TRUST IN WEB AND SECURITY CONCERNS

Phishing is a glowing issue that arises due to the increase of online banking [33]. In
computer sense, phishing is an attempt to criminally and fraudulently acquire
sensitive information, such as usernames, passwords and credit card details, by
masquerading as a trustworthy entity in an electronic communication. Phishing is
typically carried out by email or instant messaging, and often directs users to enter
18
details at a website, although phone contact has also been used [32]. Phishing is an
example of social engineering techniques used to fool users. Attempts to deal with
the growing number of reported phishing incidents include legislation, user training,
public awareness, and technical measures. In June 2005, 4% of the complaints
received were banking related [34]. Due to this, customers are afraid and don’t want
to do any transaction wit the banks over the internet and likewise the banks too
makes huge loses from this fraud.

For complete effectiveness, a bank has to possess an important characteristic which

is anonymity [20]. Once a customer finds that he/she is secure in the sense that no
one can trace his/her cash transaction, then he/she will embrace electronic banking.
Customers want to remain anonymous in relation with their payments. Recognizing
the need to be more secure, companies in general intensified efforts in this direction.
In 2003, more than 90% of the top 100 websites present a privacy policy compared
to only 43% in 1999 [20]. A privacy policy is a document that tells the consumers
about what happens to his/her information that is collected over the internet.
Questions like the reason your personal information is being collected, what is use
for, who gets to share the information and how these information is being protected,
are answered in the privacy policy [35]. Presently, a seal of approval is being given
by many independent agencies such as BetterWeb, eTrust, etc, to companies after
their privacy policies has being evaluated following some certain standards [20].
Furthermore, the European Union and others makes provisions for more laws about a
company’s privacy and they are being mandated to follow these rules. In general,
customers are advised to shop safely in the sense that all personal information (such
as address, telephone numbers, social security number, credit card numbers,
passwords, etc) are kept private, after which you can look for and read the online
privacy policy about the company in question [36].

2.6 AUTHENTICATION IN AN ELECTRONIC BANKING

ENVIRONMENT

The basic focus here is on the risks and risk management controls related to
authentication in an electronic banking environment [66]. There are a variety of

19
authentication tools and methodologies financial institutions can use to authenticate
customers, which could be the use of passwords, personal identification numbers,
digital certificate, physical devices, database comparisons and biometric identifiers.
Authentication methods that depends on more that one factor typically are more
difficult to compromise than single factor systems [66].

Authentication processes should be designed to maximize intergenerability and

should be comforted with the financial institute’s overall strategy for electronic
banking and e-commerce customer services. The risk should be evaluated in light of
the type of customer, the institution’s transactional capabilities, the sensitivity and
value of the stored information to both the institution and the customer, the ease of
using the method, and the size and volume of transactions.

Reliable customers’ authentication is imperative for financial institutions engaging in

any form of electronic banking or commerce. The risk of doing business with
unauthorized or incorrectly identified individuals in an electronic banking
environment could result in financial less and repudiate damage through fraud,
disclosure of confidential information, corruption of data or unenforceable
agreement. The success of a particular authentication tools or methodology depends
on more than the technology; it depends on appropriate policies, procedures and
control. An effective authentication method should be implemented on an enterprise-
wide basis, have customer acceptance, reliable performance, scalability to
accommodate growth, and enter operability with existing systems and future plans.
The level of authentication used by the financial institution in a particular application
should be appropriate to the level of risk on that application [66].

2.7 SECURITY GUIDELINES FOR E-BANKING

This guideline helps the bank to implements the central security in their e-banking
services based on their best practices in relation to specific risk profiles.

The Board of Directors and senior management are respectable for ensuring there is
clear director and showing visible management support for security initiatives.
20
Information security is a business responsibility shared by all members of the senior
management. Its task is to match security control to the overall needs of the business.
It is also essential in banking to confirm that a particular communication, transaction,
or access request is legitimate. Technical non-repudiation involves creating proof of
origin or delivery of electronic information to protect the sender against false denial
by the recipient that the data has been received or to protect the recipient against
false denial by the sender that the data has been sent [67].

Segregation of duties is critical to ensuring the accuracy and integrity of data and is
used to prevent the preparation of fraud by one individual. In order to minimize the
opportunities for fraud and the creation or errors, banks needs to strictly control
authorized to and access privileges.

Banker should ensure that the provision of services in any particular jurisdiction
takes into account any additional safeguard necessary to protect the customer privacy
in that jurisdiction. Plans should be developed to mount restore business operations
in the required time scales following interruption to, or failure of, critical business
processes and continue to offer a services after incidents which affect the system
operation. As part of its risk assessment prior to engaging in gross border e-banking
activities, a bank must ensure compliance with any applicable laws and regulations
of its home country as well as those of any foreign country that may assert
jurisdiction over its e-banking services [68].

According to the publication of Central Bank of Nigeria (CBN) in August 2003,

these are some of the guidelines on Electronic Banking in Nigeria [68]. The CBN
recognizes that electronic banking and payments services are still at the early stages
of development in Nigeria, Arising from the three major roles of the CBN in the
areas of monetary policy, financial system stability and payments system oversight,
the CBN Technical Committee on E-Banking has produced a report, which
anticipates the likely impact of the movement towards electronic banking and
payments on the achievement of CBN’s core objectives. Following from the findings
and recommendations of the Committee, four categories of guidelines have been
developed as follows [68]:

Information and Communications Technology (ICT) standards, to address

issues relating to technology solutions deployed, and ensure that they meet
21
 the needs of consumers, the economy and international best practice in the
areas of communication, hardware, software and security.

Monetary Policy, to address issues relating to how increased usage of Internet

Banking and electronic payments delivery channels would affect the
achievement of CBN’s monetary policy objectives.

Legal guidelines to address issues on banking regulations and consumer

rights protection.

Regulatory and Supervisory, to address issues that, though peculiar to

payments system in general, may be amplified by the use of electronic media.

The Guidelines are expected to inform the future conduct of financial institutions in
e-banking and electronic payments delivery.

SECURITY POLICY AND PRIVACY

Banks should have in place a security policy duly approved by their Boards, and
policy should address the following issues [68]:-

Basic approach to information security measures.

The ICT systems that must be protected and the reasons for such protection

Priorities of information and information systems that must be protected.

Involvement and responsibility of management and establishment of an

information security coordination division.

Checks by legal department and compliance with laws/regulations.

The use of outside consultants

Identification of information security risks and their management.

Impact of security policies on quality of service to the customers (for

example, disabling an account after three unsuccessful logins may result in
denial of service when it is done by somebody else mischievously or when
restoration takes unduly long time).
22
 Decision making process of carrying out information security measures etc.

2.8 THE BELIEFS OF CONSUMERS ABOUT ELECTRONIC

BANKING

Recently, it has being a burning issue for financial institutions and the object of
various academic studies since the adoption of electronic banking [65, 66]. Some
weight were placed on knowledge of a personnel in a banking sector and their
willingness to serve customers though speed, price and bank’s reputation seemed to
be an essential criteria for the adoption of electronic banking [69]. Convenience has
being one thing customers value most, also an increased choice of access to the bank,
and improved control over the banking activities and finances in electronic banking
[3].

Moreover, consumers considered being able to access, its functionality and low
prices being incurred for the services as very important in electronic banking. It was
maintained that customers are more concerned with privacy, time and control among
other important aspects [65]. The most essential issue for banking sectors which still
remains is the negative attitude towards the security of electronic banking. Security
concerns arise from the use of an open network: customers are afraid that their
financial information might become an open book to other people via the Internet
[65, 70]. However, it was argued that security concerns are not among the greatest
obstacles [71]. In Australia, the main barriers that were found among its consumers
for the adoption of electronic banking were: awareness of the service and benefits
were not sufficient, security concerns, usage problems, resistance to change, lack of
computer access and the cost were high [10]. The improvement of electronic banking
will basically depend on the number of persons that acquire and retain their internet
access [72]. The most essential reason for adopting internet based services is actually
each individual’s attitude towards technology itself [73]. In general, people that are
acquainted with computer and the internet are more likely to adopt electronic
banking services before those people who are not acquainted computers [74]. By
studying the beliefs of different types of consumers, new valuable information
concerning electronic banking can be obtained. In addition, studying the relationship

23
between perceptions of technology, demographic variables and Internet banking
behaviour, provides a clarification of factors affecting, for instance, the intention to
recommend internet banking to other people [75].

2.9 AIMS AND OBJECTIVE OF THE STUDY

The primary objective of this thesis work is to:

1. Ascertain if the introduction of E-banking has improve the efficiency and

effectiveness and also see how it has being able to help in the curtailment of
fraud in Banks- Zenith Bank of Nigeria.

2. Analysis of the security measures on ground and propose a solution which we

think would curtail resilient transactions such as fraud in electronic banking
to its lowest minimal if not total eradication.

2.10 STATEMENT OF THE RESEARCH HYPOTHESIS

This thesis work also tends to find solution to the following hypothesis.

1. Ho: That the introduction of E-Banking has not improve the efficiency and
effectiveness in Bank.

Ha: That the introduction of E-Banking has improved the efficiency

and effectiveness in Bank.

2. Ho: That the introduction of E-Banking has not helped the curtailment of
fraud in Banks.

Ha: That the introduction of E-Banking has helped the curtailment

of fraud in Banks.

3. Ho: That the revolution of Electronic communication and information

technology has not increase Bank profitability.

24
 Ha: That the revolution of electronic communication and information
technology has not increase Bank profitability

Where Ho stands for Null hypothesis while Ha stands Alternative hypothesis

The above hypothesis is tested using Chi-square statistical technique. Here Zenith
Bank of Nigeria, is our case study for the above research hypothesis

2.11 DELIMITATIONS

This study focuses on the various ways security measures have being taken in
electronic banking to reduce fraud in internet banking such as shopping with one’s
credit card and also the Automatic Teller Machine (ATM). Time factor, difficulty in
getting access to relevant data on the subject due to management classification of
some information as being confidential and financial constraint has been the major
delimitation to the study.

25
 CHAPTER 3: METHODOLOGY

Methodology is defined as “the analysis of the principles of methods, rules, and

postulates employed by a discipline”, “the systematic study of methods that are, can
be, or have been applied within a discipline” or “a particular procedure or set of
procedures” [53]. Methodology includes the following concepts as they relate to a
particular discipline or field of inquiry: “a collection of theories, concepts or ideas;
comparative study of different approaches; and critique of the individual methods”
[54]. There exist there (3) set of approaches to research methodology [55], which are:

Quantitative Approach: “is one which the investigator primarily uses post
positivist claims for developing knowledge (i.e. cause and effect thinking,
reduction to specific variables and hypotheses and questions, use of
measurement and observation, and the test of theories), employs strategies of
inquiry such as experiments and surveys and collects data on predetermined
instruments that yield statistical data ”.

Qualitative Approach: “is one in which the inquirer often makes knowledge
claims primarily on constructivist perspectives (i.e. the multiple meanings of
individual experiences, meaning socially and historically constructed, with an
intent of developing a theory or pattern) or advocacy/participatory
perspectives (i.e. political, issue-oriented, collaborative or change oriented) or
both. it also uses strategies of inquiry such as narratives, phenomenologies,
ethnographies, grounded theory studies or case studies. The researcher
collects open-ended, emerging data with the primary intent of developing
themes from the data”.

Mixed Method Approach: “is one in which the researcher tends to base
knowledge claims on pragmatic grounds (e.g. consequence-oriented,
problem-centered and pluralistic). It employs strategies of inquiry that
involves collecting data either simultaneously or sequentially to best
understand research problems. The data collection also involves gathering
both numeric information (e.g. on instruments) as well as text information
(e.g. on interviews) so that the final database represents both quantitative and
qualitative information”.

26
Above all these approaches, there is not a right methodology, All depends on your
topic, on some data you want to collect, on the time you want to spend on it [56]. The
most essential thing is to use a method that brings forth the data you need in order to
carry out an appropriate project.

3.1 RESEARCH DESIGN/PROCESS

A research process is required to perform tasks such as identifying the problem area,
exploring previous literature, making a case study research, gathering data and
synthesizing them as well as analyzing those data and presenting them. It necessitates
“planning, control and continuous monitoring and evaluation” [57]. As regards the
methodology, there is not a right research process, it depends always on what you
intend to derive at the end of your studies.

The general approach for the collection of data for this research work was based on
two major approaches. These are primary and secondary data collection. Our focus
was on interviews and also a method to collect secondary data over the different
websites of our banks. The primary data collection led to the use of questionnaire of
Zenith Bank Management staff in Nigeria and unstructured oral interview of Nordea
Bank, Skandinaviska Enskilda Banken (SEB), both in Sweden. The secondary data
collection was based on extracts from existing facts to support our research work.
Our research process followed this pattern:

Research problem being stated – The starting point of any research work is
the recognition of the problem area, which is very necessary, for a problem to
be well understood; it is better develop good questions. “What do I want to
find out?” is a question we must answer [58]. The entire research will be
based on this question. Difficulties can arise for other steps in the research
process if the problem area is not defined clearly [58]. Our interest was on the
impact of information technologies in the third world countries and the
security issues of electronic banking.

Case Study - This method is a way of studying social phenomenon through

the analysis of individual cases intensively. This way assumes that the case

27
 being studied is a representative of cases of a certain type so that, through
thorough analysis, generalizations may be made that can be applied to other
cases of the same type [59]. The sole reason for case study method is to
gather information from few situations that look alike to the problem situation
of the researcher [60]. When a case study is to be designed and conducted,
there exist three (3) elements that one need to consider [61], they are: the case
study being defined, the data to be collected and how to collect them is being
determined, taking a decision on how the data is being analyzed and
presented.

Data Collection – Data can be collected in different ways. Interview is one

of the most common methods used in qualitative research for all types of
business and management. There exist two (2) kinds of interview: the
structured and the unstructured interviews. Structured interviews refers to a
situation where the same questions are being ask in the same order to every
respondent while unstructured interview refers to in-depth and loosely
structured forms of interviewing [62]. Interviews can either be carried out
face-to-face or over the telephone [63]. Telephone interviews are in particular
suitable when quick information is needed from respondents in other
geographical location for instance. A major disadvantage is that the
respondent can end the interview at his/her own will without a warning or any
reason [63].

Data Analysis - Due to the use of statistical measurements in quantitative

research, data analysis and presentation is usually simpler. Tables and charts
are tools used for the presentation of data and the report can be structured
around these exhibits, while in qualitative research, it seems difficult [61].
During the analysis of qualitative information, the researcher employs an in-
depth investigation and subjectively interprets the data, in order to explain
much of the variation in the field of study [63].

3.2 AREA OF STUDY

28
The area covered in this research work was a section of Lagos State of Nigeria
(Victoria Island, Lagos Island and Surulere) customers and management of Zenith
Bank Plc both in Lagos metropolis. For convenience and practicability, a thorough
and careful examination of Victoria Island, Lagos Island and Surulere staffs were
carried out to actually review how information technology has really helped in the
delivering of goods and services to their consumers. While here in Sweden were the
management staff of Nordea Bank and SEB both in Ronneby to obtain the type of
infrastructures used for electronic banking, security measures that are being
implemented, security flaws as regards the functionality of electronic banking, the
effects of electronic banking on their customers, policies and laws governing
electronic banking, etc.

3.3 POPULATION

The saying that “no decision is wise until it yields positive results” comes to fulfill its
meaning. In the light of the above, the idea of choosing a section/segment of the
population as a result of the large Nigeria population is not out of place. The
population under consideration in this write-up includes every target and accessible
customers in Victoria Island, Lagos Island and Surulere environment capable of
providing useful, authentic and dependable data. Some bank officials were randomly
selected for this work. Also due to the closeness and being leaders of the banking
sector in Sweden, we choose Nordea Bank and SEB both in Ronneby.

3.4 SAMPLE AND SAMPLING PROCEDURE

A sample of one hundred and five (105) was made to represent the population that is
under study for the purpose of obtaining data for the research work. Based on the
data obtained from this sample, generalizations about the population were made. The
sampling procedure was based on simple random sampling. This procedure was
used because it afforded each element of the population the opportunity of having
independent and equal of being represented in the sample of one hundred and five

29
respondents/persons. It was equally easy and simple in terms of conceptualization
and application.

3.5 INSTRUMENT FOR DATA COLLECTION

For the purpose of data collection, questionnaires were designed and sent out to the
respondents to fill. For the fact that the research design was based on primary and
secondary sources of data collection, in the instruments of research employed, were
unstructured interview and use of questionnaires. For the primary source of data
gathering, face-to-face confrontation of respondents was used (questionnaires and
personal interviews).

The questions were designed in a way to facilitate respondents’ answers. The

questionnaire was made up of two sections. Section A sought bio-data of the
respondents such as sex, age, marital status, qualification, working experience etc,
while Section B is designed to obtain information from the respondents based on the
research topic. The questionnaire were equally designed and presented in a way to
carry the statement of objective and the identification being sought in this research
work.

Furthermore, the questionnaires specifically are geared towards identifying

individual knowledge in information technology and security issues on ground. By
so doing, awareness is created and uses are thus elicited.

3.6 RELIABILITY AND VALIDATION OF THE INSTRUMENT

Reliability simply means idea, that another researcher would obtain the same
findings if the study was repeated [61]. In other words, reliability is the degree to
which measures are error-free and thus yield consistent results [60]. Being well
informed about the respondents in the interview could be a way to increase the
trustworthiness and this can encourage the respondents to be more open and detailed
about the questions asked. Reliability may also be promoted if the respondents
receive a list of questions that are going to be discussed during the interview [64].

30
Validity refers to how accurately the research has been conducted. Validity can also
be referred to as “the ability of an instrument to measure what it is designed to
measure” [59]. The idea of validity refers to the quality of the data and can be
relevant to any aspect of the research process.

The questionnaire designed for this research work, in order to meet with its purpose,
i.e., measure what it was expected to measure, was subjected to a validation process.
Hence, copies of the designed questionnaires were given to experts to scrutinize.
Some criticisms and corrections were made based on the outcome of such test and
corrections before it was finally given to respondents. For the purpose of consistency,
the instrument of what questionnaires is designed to measure, the questionnaires
were tested and retested, administering them to the same group of respondents more
than once and the results remain the same.

3.7 METHODS OF DATA COLLECTION

The primary sources were questionnaire and unstructured interview.

The Questionnaire: Questionnaire was the main instrument for data collection in
this study. The questions were designed to collect relevant information needed for
the research from respondents.

Two (2) questionnaires were designed for the purpose of this work, the first
questionnaire contained questions that were framed in a way to obtain information on
the impact of information technology in the third world countries using Zenith Bank
of Nigeria as a case study, while the other was to get the infrastructures used, security
flaws of the banking sector here in Sweden (Appendix C). In other to elicit the co-
operation of the respondents and make feel comfortable without suspicious of the
researcher’s intention, it was categorically stated in the opening letter to the
questionnaire that every information furnished by the respondents for the research,
shall be used for the research purpose and such information shall be treated as strictly
as confidential. Out of the one hundred and five (105) questionnaires distributed to
the respondents, ninety (90) were returned. With this, (86%) of the respondents
returned their questionnaires while fifteen (14%) could not return theirs.

31
Unstructured Interview: This method was used to supplement and complement
the questionnaire in data collection because it provided the opportunity to explore
certain aspects, which could not be covered by the questionnaire, and also to be able
to ask questions and get replies from those who were unable to put their responses on
paper as a result of their time schedule. Likewise those who could not read and
write. The interview equally covered the top management of the organization and
correct answers to questions recovered from those concerned.

Secondary Sources: The secondary sources of data collection for this write up
include articles, journals, published official documents, magazines, textbooks, review
of relevant literature, unpublished lecture notes and browsing / surfing the internet.
These provided the background information for study.

3.8 METHOD OF DATA ANALYSIS

While percentage in tabular form was adopted in the area of Bio data and some other
questions put forward to the respondent, the statistical formulae “the Chi-square” (x2)
was used in analyzing and interpreting responses connected with the main variables
of the hypothesis. At 5% level of significance, x 2 was used in ascertaining the
validity, reliability or otherwise to test whether or not there is any relationship
between one set of variable and another.

By defining, the “Chi-square” is given by the formulae” x2 = Σ (o-e)2

e
Where o = Frequency Observed and E = Frequency Expected. The degree of
freedom (d.f) = (r-1) (c-1), where r = Number of rows, e = Number of columns;

Ho: Stands for Null Hypothesis, and HA: Stands for Alternative Hypothesis.

32
 CHAPTER FOUR: DATA ANALYSIS AND
INTERPRETATION OF RESULTS

Data Analysis and presentation of the data in quantitative research is usually more
unsophisticated based on the fact that statistical measurements are being used. Tables
and charts are used for the presentation of the data and the report can be structured
around these exhibits. While in qualitative research, it seems to be more difficult
[61]. When analyzing qualitative information, the researcher engages in an in-depth
investigation and subjectively interprets the data, in order to explain much of the
variation in the field of study [63]. The total number of questionnaire distributed the
staff of Zenith Bank of Nigeria was one hundred and five (105). The total number of
questionnaires returned was ninety (90). The remaining fifteen could not be collected
from the respondents due to the following reasons:

Ten (10) respondents admitted that they lost their questionnaires.

Five of the respondents were no longer seen after taking possession of the
questionnaire.

4.1 CHOICE OF INTERVIEW USED

Interview can be described as:

Conversations that are meaningful [76], in other words purposeful.

When two (2) person come together to produce a form of discourse [78].

“Communicative acts and processes” [77].

Within the context of the definition above, there are different types of interviews
(e.g. job interviews, research interviews, survey interviews, etc) for different
purposes, all aiming at a common goal of data collection in different situations. “The
data may be factual in generating quantitative input in a research work” [79].

For the interviews we schedule with the banks in our reach, we formed open-ended
questions that serve as an ice-breaker [80], which established a rapport between us

33
and the banks. We also negotiated the scope and range of the questions, likewise the
format.

“The types of interviews we have can being seen as the amount of structure used in
the process, arranging from structured to informal or conversational”. The degree at
which the interview is structured, must correspond to the intent of the interview [79].
We choose the unstructured type of interview. This was used to supplement and
complement the questionnaire in data collection because it provided the opportunity
for us to explore certain aspects, which were not covered by the questionnaire, and
also to be able to ask questions and get replies from those who were unable to put
their responses on paper as a result of their time schedule.

For the purpose of consistency, the instrument of what questionnaires/interviews are

designed to measure, both were tested and retested, administering them to the same
group of respondents more than once and the results remain the same.

4.2 DATA COLLECTION

Based on the interview conducted with the banks in Sweden under our reach, we
found out that they use the following security measures for their Electronic Banking
operations:

PIN Code for Credit cards: A PIN (Personal Identification Number) is a

multi-digit number unique to an individual that is associated to ones credit
card. It is usually a 4 digit number. With this, the owner of the credit card can
withdraw money from ATM and also buy things in shops.

Digipass: This is a security product which provides a strong user

authentication and e-Signatures via small security tokens carried by users. It
uses time and/or challenge based two-factor authentication.

34
 Scratch Cards: A scratch card is a one time password (or code) used for
internet banking i.e. once it is used, it no longer valid.

The above are the common security measures used in the banks interviewed here in
Sweden, moreover one still need to have good antivirus, Firewalls being installed in
the system, also the use of Secure Electronic Transaction protocol (SET). From our
research, we found out that if any of these measure is stolen or hack via the internet
along side the tool e.g. credit card, the customers stand a chance to lose his/her
money.

The responses gotten from the questionnaires we shared with the staff of Zenith Bank
of Nigeria are in Appendix D while the questionnaires which were administered are
in Appendix C.

4.3 ANALYSIS OF DATA

For the analysis of data, we choose the Chi square method. The chi-square test is a
statistical test that can be used to determine whether observed frequencies are
statistically significantly different from expected frequencies. As in other statistical
tests, we begin by stating a null hypothesis (H0: there is no significant difference
between observed and expected frequencies) and an alternative hypothesis (H1: there
is a significant difference). Based on the outcome of the chi-square test we will either
reject or fail to reject the null hypothesis.

Decision Rule

Accept the hypothesis if when calculated x2 is greater than tabulated x2 (Chi-square)

And Reject the hypothesis when calculated x2 is less than tabulated x2

35
The tabulated x2 was gotten by using the formulae Σ ((o-e)2 /e)
Significance level = 0.05

Degree of freedom = (c - 1) (r - 1)

= (4 - 1) (20 - 1)

= (3) (19) = 57

Where c, r is number of columns and rows not counting the total for columns and
rows.

From the Chi-square table in Appendix B, we found out that x2 (degree of freedom-
57 under the significance level-0.05) is 75.62 for both Hypothesis 1 and 3 while for
Hypothesis 2 is 72.15

Calculated x2 for Hypothesis 1, Hypothesis 2 and Hypothesis 3 are 321, 309. 6 and
258.2 respectively.

Hypothesis 1:

HO: That the introduction of Electronic Banking has not improved the efficiency
and effectiveness in Zenith Bank of Nigeria.

HA: That the introduction of Electronic Banking has improved the efficiency in
Zenith Bank of Nigeria.

Therefore, the hypothesis that the introduction of Electronic Banking has improved
the efficiency and effectiveness in Zenith Bank of Nigeria is accepted.

Hypothesis 2:

HO: That the introduction of E-Banking has not helped the curtailment of E-
Banking of fraud in Zenith Bank of Nigeria.

HA: That the introduction of E-Banking has helped the curtailment of fraud in
Zenith Bank of Nigeria.

Since calculated Chi-square is greater than the tabulated value, we accept HO and
reject HA. This means that the introduction of E-Banking has not helped the
curtailment of fraud in Zenith Bank Nigeria.
36
Hypothesis 3:

HO: That they revolution of electronic communication and information

technology has not increased Zenith Bank of Nigeria’s profitability.

HA: That the revolution of electronic communication and information technology

has increase Zenith Bank of Nigeria’s profitability.

Since calculated Chi-square is greater than the tabulated value, we accept Ho and
reject HA. This means that the revelation of electronic communication and
information technology has not increased Zenith Bank of Nigeria’s profitability.

Due to time factor, we choose Zenith Bank of Nigeria as the bank for our study being
among the leading banks in Nigeria. The above results can not be for sure
generalized for all the banks.

37
 CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATION

5.1 Summary of the Findings

Result of finding from the testing of the first hypotheses revealed that the Electronic
Banking has significant effect on bank efficiency and effectiveness. Through
Electronic Banking, banks and corporate bodies are able to produce information and
technical assistance online, twenty-four hours round the clock. Also, E-banking
allows customers and business to order and receive product and services safely and
securely online. Furthermore, E-banking foster managing inventory using bar code
readers from remote locations to send data to a central warehouse. Finally, E-banking
creates a medium where information and data can be received within the shortest
period of time.

Presently, in most third world countries like Nigeria, many banks have established an
advertising presence on the internet, primarily in the term of informational or
Interactive websites. They have created transactional websites. However a number of
banks that do not yet offer transactional Internet banking services have indicated on
their websites that they will offer such banking activities in the future.

Although, Internet banks offer many of the same services as traditional bank and
mortal banks, analysis view Internet banking as a means of retaining increasingly
sophisticated customers, of developing a new customer base, and of capturing a
greater share of depositor assets. A typical Internet bank site specifies the type of
transactions offered and provides information about account security, because
Internet banks generally have lower operational and transactional cost than the
traditional bank and mortal banks, they are often able to offer low-cost checking and
high yield certificates of deposit. Internet banking is not limited to a physical site;
some Internet banks exist without physical branches, for example, Telebank
(Arlington, Virginia) and Banknet, UK. Furthermore, in some cases, web banks are
not restricted to conducting transactions within national borders and have the ability
to make transactions within national borders and to make transactions involving large
amounts of assets instantaneously. According to industry analysts electronic banking
provides a variety of attractive possibilities for remote account access, including:
38
 Availability of inquiry and transaction services around the clock;

World-Wide connectivity;

Easy access to transaction data, both recent and historical; and direct
customer control of international movement of funds without intermediation
of financial institutions in customers’ jurisdiction.

Consequently, banking is a term that attempts to broadly describe today’s alternate

delivery channels. Different banks and vendors will describe this differently, but if
you are offering online banking, you can certainly say that you are “into” E-banking.

The testing of Hypothesis two shows that electronic banking has helped the
curtailment of fraud in banks.

One of the biggest challenges in the development of electronic commerce ha s been

for the banks and merchants to overcome the issues of customer identification and
account verification for online purchases. While the credit card systems have a
process in place to verify and authorized transactions, the Internet poises challenges
for merchants to not only validate that funds are available in an account, but to
positively identify that the consumer is in fact authorized to sue that account for
purchases.

Early in the life of e-commerce, this situation led to the development of SET protocol
(Secure Electrical Transactions), while the initial version of set was written in 1995,
it has yet to be implemented for a number of reasons.

In the physical world, merchants can validate the identity of the account holder by
comparing the signature on the credit card with the signature on the sales slip. But in
a virtual world, where the customer is not present, the merchant does not know if that
person is authorized to use the account number provided for the transaction. The
danger in the e-commerce environment is that without some additional controls, the
exposure to lose from fraudulent usage is exponentially greater.

The result of findings from the testing of hypothesis three revealed that electronic
banking has not increased bank profitability.

39
Electronic banking today has gone beyond arms length or kid glove, as virtually it
has become the bed rock of growth and development in financial sector of the
Nigeria economy; like most developed parts of the world.

In as much as competition is now moving from the market place to market space,
only banks that have robust technological and efficiently and effectively put them
into use will have a competitive advantage.

More so, today’s customers want to transact business at their own convenience if
possible through the comfort of their homes, hence, the need to continue to develop
the platform that will continually ensure that the customer is left satisfied with whole
lot of electronic product varieties to choose from.

From this research study it is proven that the Nigeria consumer market and the
prospects are encouraging and brighter as basically all the banks in Nigeria as of
today are information technology driven and have churned out various electronic
banking products and services to take of the convenience, loyalty and retainerships of
customers.

5.2 Conclusion

The following conclusions are reached based on the result of findings from the study:

Electronic banking has a significant effect on bank efficiency and effectiveness. This
means that the banks are now able to give better services to their customers and
timely response. This has reduced to some extent complains of customers. Before the
introduction of E-banking, customers experience has being poor in terms of time to
service customer and operational service (e.g., draft, bank transfer, manager cheque,
etc.).

Products offering has a limited range like savings, current, investment account de to
the traditional practice of banking but electronic banking has brought a lot of impact
in effectiveness and efficiency but giving room for other better hybrid products like
automated invoice settlement, bank cards, electronic standing orders etc.

40
Transaction security has also being effective since the introduction of e-banking,
immediate notification for all kinds of transaction and having the ability to any any
unauthorized transaction.

Also customers can easily get information of their Bank details online without going
physically to Bank.

However, electronic banking has not helped the curtailment of fraud in banks. People
now find various means of getting pin numbers to smart cards and how to access
people bank details online.

Also, electronic banking has not increase bank profitability. The Banks are not
making more profit due to the advent of Electronic Banking for now, rather have
spent more money to put everything place.

5.3 Recommendations.

The following recommendations are offered for policy implementations.

i. Central Bank of Nigeria should evolve a plan or policy that makes it

mandatory for all banks to set aside certain percentage of their profit on
yearly basis as budget for information technology so as to abreast of
technological development in the area of e-banking.
ii. The apex body should step up an information technology policy and
regulatory activities that will stimulate standards to adhere strictly to
implementation of information policies.
iii. The banks should continue to stay abreast of technological developments
especially in the area of application, so as to consistently develop e-products
that will meet the needs of the customer market.
More also, banks should be consistence and persistence in their manpower training
and development.

Based on the flaws of the security measures studied in this work, we recommend the
following:

41
 For a better and secured electronic banking environment, a three factor
authentication should be practiced. The third authentication is the use of
biometrics. A three-factor authentication can be implemented which is more
secured - a password to ascertain what one knows, a smartcard to ascertain
what one has, and biometric recognition (for example fingerprint or retina
scanning) to ascertain who one biologically is. As such, if passwords have
been compromised, fraudsters need to get through another two levels of
authentication to access a customers account. This would be difficult, if not
totally impossible and it will go a long way to curtail fraud in electronic
banking.

Mobile number and email should also be collected when a customer is

opening an account too. in the course of an internet transaction involving
payments or transfer of funds, before a confirmation is made i.e. the money
being withdrawn from the account, a one time password should be sent back
to either the customers email or mobile number in other to make sure that the
customer is the actual person the authorized the transaction. This can be
illustrated from the picture below.

5.4 FUTURE WORK

42
Due to time constrain, we only talked about the guide lines to be taken to enable
resilient transactions such as the curtailment of internet fraud in Electronic Banking.
For further research, the implementation of it and making a resilience system (the
ability to bounce back when an error occurs) is very much welcomed. Furthermore, a
future improvement will be the use of Bluetooth which is a wireless technology for
the provision of bidirectional communication channel with the computer. This would
not only make it easier to use, but also would make it possible to implement public
key cryptography signature so that it can be verified by anyone not only the bank.

43
 APPENDIX A: DEFINITIONS

E-Commerce is the process of conducting business on the Internet using information

technology to enhance communications and transactions with all of an organization’s
stakeholders [13].

E-Services is described as an interactive, content-centered and Internet-based

customer service, which is driven by the customer [27].

E-Tailing is a similar concept of E-services, E-tailing implies online retailing to

facilitate convenience for the customer to use services and buy products online. It is a
short form for “Electronic Retailing” [27]. E-tailing is synonymous with Business-to-
Consumer (B2C) transaction. E-tailing has resulted in the development of E-tailware,
which is a software tool for creating online catalogs and managing the business
connected with doing E-tailing. A new trend is the price comparison site that can
quickly compare prices from a number of different E-tailers and link you to them.
[28].

Electronic Banking (E-Banking) is defined to include the provision of retail and

small value banking products and services through electronic channels as well as
large value electronic payments and other wholesale banking services delivered
electronically [1]. It is considered to be a segment of E-business to the extent that
banks are involved in the management of business transactions via electronic media,
other non-banking financial products and services e.g. insurance [12].

44
 E-Commerce

Conducting business
through electronic
networks

E-Finance E-Money
Providing financial Stored value or prepaid
services through payment mechanisms
electronic channels

E-Banking Other financial services

and products
Providing banking
products & services Insurance, online
through electronic brokering, etc.
delivery channels

Internet
banking

Telephone
banking

Other electronic
delivery
channels

Source: Saleh M. N., and Andrea S. [9].

Security is the protection of asset against danger or loss. Security is simple to safety
but with emphasis to external threats [21]. In other words, security is the protection
of data against unauthorized access [4]. This is our major concern in this thesis work.

Information Security is the protection of information and information systems from

unauthorized access, use, disclosure, disruption, modification, or destruction [22].
There are three (3) key concepts which form the core principles of information
security, namely Confidentiality, Integrity and Availability (CIA) which is known as
the CIA Triad.

45
 Confidentiality Integrity

Data &
Services

Availability

Source: CIA Triad [25].

Confidentiality is the preservation of authorized restrictions on access and
disclosure, including means for protecting personal privacy and proprietary
information [22].
Integrity is the prevention against improper information modification or
destruction, and includes ensuring information non repudiation and
authenticity [22].
Availability which means ensuring timely and reliable access to and use of
information [22]. In other words, the prevention of unauthorized withholding
of information or resources [21].

Computer Security is a generic name for the collection of tools design to protect
data [4]. In other word, it is how to handle information security in the context of
computers [21].

Information Assurance is the practice of managing information-related risks. More

specifically, Information Assurance practitioners seek to protect the confidentiality,
integrity, and availability of data and their delivery systems [23].
The terms information security, computer security and information assurance are
frequently used interchangeably. They are interrelated and share the common goals
of protecting the confidentiality, integrity and availability of information; however,
there are some distinctions between them. These distinctions lie primarily in the
approach to the subject, the methodologies used, and the areas of concentration [24].

46
Internet is the network of computers through which anybody with a personal
computer which is properly connected to existing telephone or cable system that can
access several millions of people around the world.

Information Technology is “the study, design, development, implementation,

support or management of computer-based information systems, particularly
software applications and computer hardware.” IT deals with the use of electronic
computers and computer software to convert, store, protect, process, transmit and
retrieve information, securely refers to have a microprocessor interfaces or “front
ends” the host processor (the computer and terminals) with the communication
channel.

Electronic Payment System is the payment through the electronic transfer of fund,
which is automatically transferred from the account of payee to the account of the
receiver immediately after a transaction electronically.

Automatic Teller Machine is a unit installed by a bank that gives customers access
to their accounts with the insertion of a magnetic-stripe card.

Card Reader can be described as a machine with a magnetic head that can
information recorded on a magnetic-stripe card and convert it to electronic signals.

Log on means to gain access to a computer system by entering a name, password or

other appropriate commands.

Transaction is a business deal that is being negotiated or has settled.

PIN (Personal Identification Number) is a multi-digit number unique to an

individual that is used, with a card, to get money from cash point machine or to gain
access to a computer or telephone system.

Two Factor Authentication Is where your internet code is required to authenticate you as a
user in combination with your existing Client Number and password.

47
Internet Protocol version 6 (IPv6) is a network layer for packet-switched
inter-networks. It is designated as the successor of IPv4 which is the current
version of the Internet Protocol, for general use on the Internet. The main
difference is that IPv6 has a larger address space that allows greater flexibility
in assigning addresses than IPv4.

48
 APPENDIX B: TABLE OF CHI-SQUARE STATISTICS
Degree of Probability of exceeding the critical value
Freedom 0.10 0.05 0.025 0.01 0.001
1 2.706 3.841 5.024 6.635 10.828
2 4.605 5.991 7.378 9.210 13.816
3 6.251 7.815 9.348 11.345 16.266
4 7.779 9.488 11.143 13.277 18.467
5 9.236 11.070 12.833 15.086 20.515
6 10.645 12.592 14.449 16.812 22.458
7 12.017 14.067 16.013 18.475 24.322
8 13.362 15.507 17.535 20.090 26.125
9 14.684 16.919 19.023 21.666 27.877
10 15.987 18.307 20.483 23.209 29.588
11 17.275 19.675 21.920 24.725 31.264
12 18.549 21.026 23.337 26.217 32.910
13 19.812 22.362 24.736 27.688 34.528
14 21.064 23.685 26.119 29.141 36.123
15 22.307 24.996 27.488 30.578 37.697
16 23.542 26.296 28.845 32.000 39.252
17 24.769 27.587 30.191 33.409 40.790
18 25.989 28.869 31.526 34.805 42.312
19 27.204 30.144 32.852 36.191 43.820
20 28.412 31.410 34.170 37.566 45.315
21 29.615 32.671 35.479 38.932 46.797
22 30.813 33.924 36.781 40.289 48.268
23 32.007 35.172 38.076 41.638 49.728
24 33.196 36.415 39.364 42.980 51.179
25 34.382 37.652 40.646 44.314 52.620
26 35.563 38.885 41.923 45.642 54.052
27 36.741 40.113 43.195 46.963 55.476
28 37.916 41.337 44.461 48.278 56.892
29 39.087 42.557 45.722 49.588 58.301
30 40.256 43.773 46.979 50.892 59.703
31 41.422 44.985 48.232 52.191 61.098
32 42.585 46.194 49.480 53.486 62.487
33 43.745 47.400 50.725 54.776 63.870
34 44.903 48.602 51.966 56.061 65.247
35 46.059 49.802 53.203 57.342 66.619
36 47.212 50.998 54.437 58.619 67.985
37 48.363 52.192 55.668 59.893 69.347
38 49.513 53.384 56.896 61.162 70.703
39 50.660 54.572 58.120 62.428 72.055
40 51.805 55.758 59.342 63.691 73.402
41 52.949 56.942 60.561 64.950 74.745
42 54.090 58.124 61.777 66.206 76.084
43 55.230 59.304 62.990 67.459 77.419
44 56.369 60.481 64.201 68.710 78.750
45 57.505 61.656 65.410 69.957 80.077
46 58.641 62.830 66.617 71.201 81.400
47 59.774 64.001 67.821 72.443 82.720
48 60.907 65.171 69.023 73.683 84.037
49 62.038 66.339 70.222 74.919 85.351
50 63.167 67.505 71.420 76.154 86.661
51 64.295 68.669 72.616 77.386 87.968
52 65.422 69.832 73.810 78.616 89.272
53 66.548 70.993 75.002 79.843 90.573
54 67.673 72.153 76.192 81.069 91.872
55 68.796 73.311 77.380 82.292 93.168
56 69.919 74.468 78.567 83.513 94.461
49
 57 71.040 75.624 79.752 84.733 95.751
58 72.160 76.778 80.936 85.950 97.039
59 73.279 77.931 82.117 87.166 98.324
60 74.397 79.082 83.298 88.379 99.607
61 75.514 80.232 84.476 89.591 100.888
62 76.630 81.381 85.654 90.802 102.166
63 77.745 82.529 86.830 92.010 103.442
64 78.860 83.675 88.004 93.217 104.716
65 79.973 84.821 89.177 94.422 105.988
66 81.085 85.965 90.349 95.626 107.258
67 82.197 87.108 91.519 96.828 108.526
68 83.308 88.250 92.689 98.028 109.791
69 84.418 89.391 93.856 99.228 111.055
70 85.527 90.531 95.023 100.425 112.317
71 86.635 91.670 96.189 101.621 113.577
72 87.743 92.808 97.353 102.816 114.835
73 88.850 93.945 98.516 104.010 116.092
74 89.956 95.081 99.678 105.202 117.346
75 91.061 96.217 100.839 106.393 118.599
76 92.166 97.351 101.999 107.583 119.850
77 93.270 98.484 103.158 108.771 121.100
78 94.374 99.617 104.316 109.958 122.348
79 95.476 100.749 105.473 111.144 123.594
80 96.578 101.879 106.629 112.329 124.839
81 97.680 103.010 107.783 113.512 126.083
82 98.780 104.139 108.937 114.695 127.324
83 99.880 105.267 110.090 115.876 128.565
84 100.980 106.395 111.242 117.057 129.804
85 102.079 107.522 112.393 118.236 131.041
86 103.177 108.648 113.544 119.414 132.277
87 104.275 109.773 114.693 120.591 133.512
88 105.372 110.898 115.841 121.767 134.746
89 106.469 112.022 116.989 122.942 135.978
90 107.565 113.145 118.136 124.116 137.208
91 108.661 114.268 119.282 125.289 138.438
92 109.756 115.390 120.427 126.462 139.666
93 110.850 116.511 121.571 127.633 140.893
94 111.944 117.632 122.715 128.803 142.119
95 113.038 118.752 123.858 129.973 143.344
96 114.131 119.871 125.000 131.141 144.567
97 115.223 120.990 126.141 132.309 145.789
98 116.315 122.108 127.282 133.476 147.010
99 117.407 123.225 128.422 134.642 148.230
100 118.498 124.342 129.561 135.807 149.449
100 118.498 124.342 129.561 135.807 149.449

50
 APPENDIX C: QUESTIONNAIRES

QUESTIONNAIRES ADMINISTERED THE STAFF OF ZENITH BANK OF

NIGERIA.
SECTION A
PERSONAL DATA

INSTRUCTION: PLEASE TICK/FILL THE APPROPRIATE.

1. Name of Employer:

2. Sex : Male Female

3. Age: 20-25yrs 26-30yrs 31-35yrs

36-40yrs 41-45yrs 46-50yrs

51yrs and above

4. Rank/Position: Top management Senior staff

Junior Staff

5. Work Experience: under 5yrs 6-10yrs

11-15yrs 16-20yrs

51
SECTION B

INSTRUCTION

Please tick (P ) the appropriate column as it applies to your view on each item in the
questionnaire

Key

1: Strongly Agree

2: Agree

3: Disagree
4: Strongly Disagree

S/N Questionnaire 1 2 3 4

Electronic Banking has no significant effect

on Bank efficiency and effectiveness

1 Electronic banking lead to efficiency in

Banking services

2 Electronic banking foster effectiveness in

Banking services

3 Customer complaints have reduced as a result

of the introduction of e-Banking services

4 The various electronic products of E-banking

are adequate and takes care of customers needs

5 The introduction of electronic banking has

reduced staff-customers interface in service
delivery

Electronic Banking has not helped the

curtailment of fraud in Banks

6 Bank fraud is very easy through E-Banking

7 The application of electronic Banking has

helped to curtail fraud in Banks

52
 8 Fraud is easily detected through E-Banking

9 Fraudulent practices have stopped in the

Banking since the introduction of E-Banking

10 E-Banking help transparency, profitability and

accountability in Banks

Electronic Banking has not increased bank

profitability

11 The introduction of electronic banking has no

effect on banks volume of sales

12 E-Banking has helped to increase and retain

customers in the Bank

13 The level of banks profitability depends on the

degree of E-Banking services produced to the
customers

16. Please comment freely on any aspect of E-Banking based on your personal
experience which has not be covered above

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

Thank you for your time.

53
QUESTIONNAIRES ADMINISTERED TO THE STAFF OF NORDEA BANK
AND SEB OF SWEDEN
1. Does your bank offer Internet or online banking facilities to customers?

2. What year did your bank commenced the use of Internet banking?

3. What banking activities does your bank offer via online banking?

4. Will your say Internet banking has made it possible for your bank to expand their
services to other areas of operations the bank was not initially offering?

5. What are these services?

6. How the customers reacted when E-banking was introduced?

7. What percentage of customers make use of Internet banking?

8. What are the Policies governing E-banking?

9. In terms of operations and transaction costs, would you say Internet banking has
increased or decreased costs?

10. Has Internet banking facilitates customers’ data collection and management.

11. What are the infrastructures used for Internet banking?

12. Have there being any report on internet fraud?

If Yes? Give a brief detail

13. Can you give a summary of the benefits your bank derived from offering Internet
banking facilities?

14. Please comment freely on any aspect of E-banking based on your personal
experience which has not been covered above.

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

Thank you for your time.

54
 APPENDIX D: RESPONSES/HYPOTHESIS TESTING

Table 1: Questionnaire Distribution and Collection

S/N Bank Branches No. of Questionnaire No. Returned in

Distributed usable form

1 Lagos Island 35 32

2 Victoria Island 35 34

3 Surulere 35 24

Total 105 90

Table 2: Sex of Respondents

Sex No. Percentage

Male 60 67

Female 30 33

Total 90

Table 3: Age of Respondents

Age No. Percentage

0 - 25 18 20

26 - 30 30 33

36 -45 32 36

46 and above 10 11

Total 90 100

Table 4: Respondents Rank / Position

Rank / Position No. Percentage

Top Management 20 22%

Senior Staff 55 61

Junior Staff 15 17%

55
 Total 90 100

Table 5: Respondent length of service

Period of Service No. Percentage

1 – 5 Years 44 49

6 - 10 36 42

11 - 15 8 9

Total 90 100

Table 6: Whether Respondent prefers that Electronic Banking lead to efficiency in

Banking services

Response No. Percentage

Strongly agrees 60 67

Agree 20 22

Disagree 8 9

Strongly disagreed 2 2

Total 90 100

Table 7: Whether Respondent prefers that Electronic Banking foster effectiveness in

Banking services

Response No. Percentage

Strongly agrees 70 78

Agree 20 22

Disagree - -

Strongly disagreed - -

Total 90 100

Table 8: Whether Respondent supports that Customer complaints was reduced as a

result of the introduction of E-banking service

56
 Response No. Percentage

Strongly agrees 10 11

Agree 20 22

Disagree 50 56

Strongly disagreed 10 11

Total 90 100

Table 9: Whether Respondent supports that the various electronic products of E-

banking are adequate and takes care of customers needs.

Response No. Percentage

Strongly agrees 35 39

Agree 45 50

Disagree 8 9

Strongly disagreed 2 2

Total 90 100

Table 10: Whether Respondent agrees that the introduction of Electronic Banking
has reduced staff and customers interface

Response No. Percentage

Strongly agrees 10 11

Agree 30 33

Disagree 35 39

Strongly disagreed 15 17

Total 90 100

Table 11: Whether Respondent agrees that Bank Fraud is very easy through E-
Banking

Response No. Percentage

57
 Strongly agrees 60 67

Agree 22 24

Disagree 8 9

Strongly disagreed - -

Total 90 100

Table 12: Whether the application of Electronic Banking has helped to curtail fraud
in Banks

Response No. Percentage

Strongly agrees - -

Agree 5 5.5

Disagree 50 55.5

Strongly disagreed 35 39

Total 90 100

Table 13: Whether Fraud is easily dictated through E-Banking

Response No. Percentage

Strongly agrees 5 6

Agree 10 44

Disagree 40 39

Strongly disagreed 35 11

Total 90 100

Table 14: Whether fraudulent practices has stopped in the bank since the
introduction of E-Banking

Response No. Percentage

58
 Strongly agrees -

Agree -

Disagree 60 67

Strongly disagreed 30 33

Total 90 100

Table 15: Whether E-Banking helps Transparency, Profitability and Accountability.

Response No. Percentage

Strongly agrees 30 33

Agree 40 44

Disagree 15 17

Strongly disagreed 5 4

Total 90 100

Table 16: Whether the introduction of Electronic Banking has no effect on Banks
volume of Sales

Response No. Percentage

Strongly agrees - -

Agree 15 17

Disagree 45 50

Strongly disagreed 30 33

Total 90 100

Table 17: Whether E-Banking has helped to increase and retain customers in the
bank.

Response No. Percentage

Strongly agrees 60 67
59
 Agree 20 22

Disagree 5 5.5

Strongly disagreed 5 6.5

Total 90 100

Table 18: Whether Banks that are technologically inclined have retained customers
delight

Response No. Percentage

Strongly agrees 35 39

Agree 40 44.4

Disagree 15 16.6

Strongly disagreed - -

Total 90 100

Table 19: Whether Banks that introduced E-Banking have enjoyed the patronage of
customers

Response No. Percentage

Strongly agrees 30 33.3

Agree 35 39

Disagree 20 22.2

Strongly disagreed 5 5.5

Total 90 100

Table 20: Whether the level of banks profitability depends on the degree of E-
Banking services produced to the customers.

Response No. Percentage

Strongly agrees 15 16.6

60
 Agree 10 11.1

Disagree 30 33.3

Strongly disagreed 35 39

Total 90 100

Hypothesis Testing 1

Observed Expected
frequency (o) frequency (e)
S/N (o-e)2 (o-e)2/e

1 60 35 625 17.9

2 20 35 225 6.4

3 8 35 729 20.8

4 2 35 1,089 31.1

5 70 35 1,225 35

6 20 35 225 6.4

7 0 35 1,225 35

8 0 35 1,225 35

9 10 35 625 17.9

10 20 35 225 6.4

11 50 35 225 6.4

12 10 35 625 17.9

13 35 35 0 0

14 45 35 100 2.9

15 8 35 729 20.8

16 2 35 1,089 31.1

17 10 35 625 17.9

18 30 35 25 0.7

19 35 35 0 0

20 15 35 400 11.4
61
 Total 321

Hypothesis Testing 2

Observed Expected
frequency (o) frequency (e)
S/N (o-e)2 (o-e)2/e

1 60 35 625 17.9

2 20 35 225 6.4

3 8 35 729 20.8

4 2 35 1,089 31.1

5 70 35 1,225 35

6 20 35 225 6.4

7 0 35 1,225 35

8 0 35 1,225 35

9 10 35 625 17.9

10 20 35 225 6.4

11 50 35 625 6.4

12 10 35 0 17.9

13 35 35 100 0

14 45 35 729 2.9

15 8 35 1,089 20.8

16 2 35 625 31.1

17 10 35 25 17.9

18 30 35 0 0.7

19 35 35 400 0

Total 309.6

Hypothesis Testing 3
62
 Observed Expected
frequency (o) frequency (e)
S/N (o-e)2 (o-e)2/e

1 0 35 1225 35

2 15 35 400 11.4

3 45 35 900 25.7

4 30 35 25 0.7

5 60 35 625 17.8

6 20 35 225 6.4

7 5 35 900 25.7

8 5 35 900 25.7

9 35 35 0 0

10 40 35 25 0.7

11 15 35 400 11.4

12 0 35 1225 35

13 30 35 25 0.7

14 35 35 0 0

15 20 35 225 6.4

16 5 35 900 25.7

17 15 35 400 11.4

18 10 35 625 17.8

19 30 35 25 0.7

20 35 35 0 0

Total 258.2

63
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