CHAPTER ONE 
INTRODUCTION 
1.1. Background of the study 
Mobile banking is an innovation that has progressively rendered itself in pervasive ways cutting across several financial institutions and other sectors of the economy. During the 21st century mobile banking advanced from providing mere text messaging services to that of pseudo internet banking where customers could not only view their balances and set up multiple types of alerts but also transact activities such as fund transfers, redeem loyalty coupons, deposit cheques via the mobile phone and instruct payroll based transactions(Vaidya 2011). 
The world has also become increasingly addicted to doing business in the cyber space, across the internet and World Wide Web. Internet commerce in its own respect has expanded in various innovative forms of money, and based on digital data issued by private market actors, has in one way or another substituted for state sanctioned bank notes and checking accounts as customary means of payments (Cohen 2001). 
Technology has greatly advanced playing a major role in improving the standards of service delivery in the financial institution sector. Days are long gone when customers would queue in the banking halls waiting to pay their utility bills, school fees or any other financial transactions. They can now do this at their convenience by using their ATM cards or over the internet from the comfort of their homes. Additionally due to the tremendous growth of the mobile phone industry most financial institutions have ventured into the untapped opportunity and have partnered with mobile phone network providers to offer banking services to their clients. ATM banking is one of the earliest and widely adopted retail e-banking services in Nigeria (Nyangosi et al. 2009). 
However according to an annual report by Central Bank of Nigeria its adoption and usage has been surpassed by mobile banking in the last few years (CBK 2008). The suggested reason for this is that many low income earners now have access to mobile phones. A positive aspect of mobile phones is that mobile networks are available in remote areas at a low cost. The poor often have greater familiarity and trust in mobile phone companies than with normal financial institutions.           
1.2. Statement of the general problem 
A fundamental assumption of most recent research in operations improvement and operations learning has been that technological innovation has a direct bearing on performance improvement (Upton and Kim, 1999). Strategic management in financial institutions demand that they should have effective systems in place to counter unpredictableevents that can sustain their operations while minimizing the risks involved through technological innovations. Only financial institutions that are able to adapt to their changing environment and adopt new ideas and business methods have guaranteed survival. Some of the forces of change which have impacted the performance of financial institutions mainly include technological advancements such as use of mobile phones and the internet. 
Since the beginning of e-banking Nigerian financial institutions have witnessed many changes. Customers now have access to fast, efficient and convenient banking services. Most financial institutions in Nigeria are investing large sums on money in information and communication technology (ICT). However while the rapid development of ICT has made some banking tasks more efficient and cheaper, technological advancements have their fair share of problems; for example they take a large share of bank resources, plastic card fraud particularly on lost and stolen cards and counterfeit card fraud. Thus there is a need to manage costs and risks associated with internet banking. It is crucial that internet banking innovations be made through sound analysis of risks and costs associated to avoid harm on banks performance. 
Bank performance is directly dependent on efficiency and effectiveness of internet banking and on the other hand tight controls in standards to prevent losses associated with internet banking. In order not to impair on their prosperity, financial institutions need to strike a balance between tight controls and standards in efficiency of internet banking. This is only possible if the effects of internet banking on financial institutions and its customers are well analyzed and understood. Mobile money has emerged as a strong competition to financial institutions in Nigeria. Initially cellular phones were developed to improve communication from the earlier primitive forms of communications such as smoke and drums. Financial institutions introduced ICT as an improvement to the banking channels. This has thus enabled bank customers’ access information relating to their accounts, (Tiwari, Buse and Herstatt, 2007.). In this regard mobile phone service providers have taken mobile money services deeper into the financial sector by offering a range of financial services through their networks.   
1.3. Objectives of the study 
The following would be the aims and objectives of this study 
-   To examine the impact of internet banking on organizational productivity.   
-   To examine the extent to which organizations in Nigeria make use of internet banking. 
-   To recommend better ways of improving internet banking in Nigeria.  
1.4. Research Questions 
What is the impact of internet banking on organizational productivity? 
What is the extent to which organizations in Nigeria make use of internet banking?   
1.5. Research hypothesis 
Ho: internet banking does not influence organizational productivity 
Hi: internet banking influences organizational productivity 
1.6. Significance of the study 
The study will be crucial to emerging financial institutions as it will provide answers to the factors against the implementation of internet banking in Nigeria, prove of the success and growth associated with the implementation of internet banking and highlight the areas of banking operations that can be enhanced via internet banking. It is equally significant for bank executives and indeed the policy makers of the banks and financial institutions to be aware of internet banking as a product of internet commerce with a view to making strategic decisions. The study is also expected to give an insight on the state of mobile money services as a competition to the commercial banks in Nigeria and the factors that have greatly influenced its growth. 
Players in the financial institution sector and telecommunications industry will find the study useful as they can use the findings to strategize on how they can mutually benefit from this development. Finally, our study adds to the existing literature, and is a valuable tool for students, academicians, institutions, corporate managers and individuals who want to learn more about mobile and internet banking.   
1.7. Scope and limitations of the study 
This study is restricted to the impact of internet banking on organizational productivity.   
Limitation of the study 
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview). 
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.