Global Journal of Management and Business Research, A: Administration and Management, Volume 22 Issue 7

An Empirical Investigation into the Impact of Electronic Banking on the Economic Growth of Nigeria Ifeoma Maria Ihegboro Abstract- This study assesses the impact of electronic banking on economic growth in Nigeria between 2009 and 2019. To examine the impact of Automated Teller Machine (ATM), Point of Sale (POS), Web Pay and mobile banking on economic growth in Nigeria. Expost-Facto Design was adopted wherein data was guaranteed from Central Bank of Nigeria (CBN) statistically bulletin for various years 2009 and 2019. Regression analysis was employed as the major estimation method. The Auto regression Distributed Lag (ARDL) form of regression was used as a result of the advantages that it has over other forms of regression. However, the result of study showed that E-banking had signlcant impact on economic growth. Aim and MB were found to have a positive impact on economic growth while POS and WB showed negative impact. The result of the study further shows that there is a long-run relationship between e-banking and economic growth and that E-banking Granger causes economic growth. The researcher recommended that mobile banking had significant impact on the growth rate of Nigeria economy. Base on finding the study, we suggest that government should provide enabling environment improvement in internet security in order to promote economy growth in Nigeria. Keywords: e-banking, automated teller machine, point of sale, web pay. I. I ntroduction ccording to Onodugo, Ifeanyi (2015) before the emergence of Information technology financial transaction was carried out manually, this manual method involve the use of ledger cards, also the counting of money and posting of figures manually. This method is not 100 percent accurate and is therefore is prone to human error which makes the transactions inefficient and effective as errors in form of miscalculation, wrong posting and displacement of document are prone to exist. This short comings of the manual method lead to the adoption of Information technology as a model to limits the challenges of the manual method. Information technology according to (Safeena & Date 2010; Uduji, 2013) refers to the use of software, hardware, services, and the supporting infrastructures to manage and deliver information via a voice, data, and video. The introduction of IT have changed the entire business process in an unprecedented manner (Uduji, 2013). This reflect in all Author: Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Enugu Campus. e-mail: ifeoma.ihegboro@unn.edu.ng sectors of the economy including the banking sector, with the introduction of Electronic-banking. Prakash and Malik (2008) defined electronic banking as “the use of technology to communicate instructions and receive information from a financial institution where an account is held”. They went further to explain electronic banking services include the arrangement that allows hank customers access accounts, carry out business transactions, and receive information on financial products and services online. E-banking aims at innovating, developing, and strengthening the competition in the banking industry (Oluwatolani, Joshua, & Philip, 2011). The adoption of electronic banking have driven numerous changes in the banking industry starting from the distribution channels as evidenced with the introduction of automated teller machine (ATM), point of sale (POS), internet banking, mobile-banking, telephone-banking, PC-banking, etc.(Galiup, 2008). These technologies have replaced the manual based process and reduce the use of paper based payment instruments. Omotayo (2007) defines electronic banking as a system in which funds are moved between different accounts using computerized on line/real time systems without the use of written cheque. According to Edet, (2008) in international Journal of investment and finance, electronic banking is defined as a system by which transactions are settled electronically with the use of electronic gadgets such as ATMs, POS terminals, GSM phones, and V-cards e.t.c. handled by e-holders, bank customers, and stake holders. The link between financial sector and economic growth has been debated in financial and economic literatures. Growth theorists posit that a well-developed financial sector facilitates economic growth (Hicks, in Balago, 2014). while later theories Levine and Zervos (1996) argue that financial systems do not enhance economic growth rather respond economic growth. Theories however, posits that bank development of effective payment can enhance bank performance and in turn encourage economic growth. Studies by Cobb (2004) posit that electronic payments can also enhance improve financial transparency, government efficiency, encourage higher consumption and facilitating economic growth. As observed by Farrel and Saloner (1985) ebanking can reduce the operational cost of the bank as a result of speed associated with the use of A 33 Global Journal of Management and Business Research Volume XXII Issue VII Version I Year 2022 ( ) A © 2022 Global Journals