THE EFFECT OF CYBER CRIME ON E-BANKING IN NIGERIA

THE EFFECT OF CYBER CRIME ON E-BANKING IN NIGERIA

ABSTRACT

The study assessed the impact of cybercrime on  e-banking in deposit money banks in Nigeria. Specifically the study seeks to determine the impact of cybercrime on customer’s patronage of e-banking products, evaluate the impact of deposit money banks management in controlling cybercrime on e-banking products, assess ways and measures that customers can use to protect their accounts and to provide the customers with credible information as to knowhow to detect cyber fraudsters and determine the solution to the issues of cybercrimes that are related to e-banking. The adopted descriptive research design, the description research design helps to collect information in order to describe an existing phenomenon. The techniques used for the data analysis is the statistical analysis technique which cut across tabulation and chi-square are used to test the hypothesis to ensure a simple and effective understanding of data. The findings of this study have shown that cybercrime has significant impact on customer’s patronage of e-banking products as in the test of hypothesis and as confirmed in the data analysis as majority of the respondents believed that cybercrime have negative impact on the performance of e-banking in Nigeria. Finally the study recommend that customers should protect their self from phishing by not replying to any mail or test message asking for your password or pin number and making use of the fool-proof password.

CHAPTER ONE

INTRODUCTION

1. Background of the Study

The  internet  has  become  an  invaluable  tool  for  governments,  businesses,  military,  associations  and individuals especially the banking industry. This innovations  that  have  changed  the dynamics  of  banking  as  much  as  the  e-banking revolution.  Throughout  the  world,  banks  are reorganizing  their  business  strategies  to  take advantage  of  new  business  opportunities  offered by  e-banking (Shandilya, 2011).   

E-banking has been  growing  in  an unprecedented  dimension  in  line  with  the  growth in  ICT  development.  E-banking has enabled banks to overcome borders, adopt strategic outlook, and bring in new possibilities. According to Nitsure (2013), information communication  technology  has reduced the cost of processing and facilitating the transmission  of  information  leading  to  drastic changes in the banking business. It is worth noting that  e-banking  has  not  been  limited  to  advanced countries,  but  is  found  even  in  countries  with underdeveloped  e-banking  systems,  as  a  result  of the many new business opportunities offered by e- banking.

E-banking  technology  created  a  revolution  by extending  banking  hours  beyond  office  hours  and beyond  national  boundaries  (Balachandran  &Balachandher, 2010). In Nigeria, several studies on e-banking  have  been  done.  Chiemeke, Evwiekpaefe,  &Chete  (2016),  for  instance, conducted  a  pragmatic  study  on  adoption  of  e- banking where major hindering factors to Internet banking  adoption  such  as  cybercrime  and inadequate  operational  facilities,  including telecommunications  facilities  and  electricity supply, were identified.

Cyberspace is constantly evolving, so too is the threat of cyber crime on banking activities, prosperity and quality of life of the bank customer. Cybercrime  is  generally  defined  as  a  criminal  offence  involving  a  computer as  the  object  of  the  crime (hacking, phishing, spamming), or as the tool used to commit a material component of the offence (Longe, &Chiemeke, 2018).

Electronics banking in deposit money bankis saddled with so many consequences such as criminal activities, spamming, credit card frauds, ATM frauds, phishing, identify theft and other related cyber crimes. Cyber crime being the subject been talked about has indeed gone a long way in causing problems for electronic banking in deposit money banks.It is therefore pertinent to carried out this research on the impact of cybercrime on e-banking in Nigeria with particular interest to United Bank of Africa Nasarawa Branch.

1. Statement of the Problem

Crime  and  corruption  represent  a  major  concern for business executives not only in Nigeria but also in  other  parts  of  Africa.  In  Nigeria,  for  instance, the  most  serious  impediments  to  economic activities  and  business  are  crime  and  corruption which  averages  75%  and  71%  respectively (Longe, &Chiemeke, 2018): Today,  the  Internet  is  used  for  espionage and  as  a  medium  to  commit  terrorism  and transnational  crimes.  With  e-banking  gaining ground  in  Nigeria  and  other  parts  of  the world, customers  and  online  buyers  are  facing  great  risk of  unknowingly  passing  on  their  information  to fraudsters. “Hackers” get information of those who have  made  purchases  through  websites  and  then make  fake  cards,  which  they  use  with  less detection.  Absence  of  a  law  specifically  dealing with  card-related  crimes  in  Nigeria  may  be  giving thieves  a  loophole  to  operate  freely.  Despite the preventive measure put place to prevent cybercrime on e-banking in commercial banks today, there is still high rate of cyber crimes committed by fraudsters on

customer account. Therefore this study seeks to examine the impact of cybercrime on e-banking in Nigeria.

1. Objectives of the Study

The main objective of this study is to assess the impact of cybercrime on     e-banking in deposit money banks.

1. To determine the impact of cybercrime on customer’s patronage of e-banking products
2. To evaluate the impact of deposit money banks management in controlling cybercrime on e-banking products
3.  To assess ways and measures that customers can use to protect their accounts and to provide the customers with credible information as to knowhow to detect cyber fraudsters.
4. To determine the solution to the issues of cybercrimes that are related to e-banking.

1. Research Questions

The research question will be designed to help in testing of hypothesis and achieving the set objectives of the study.

The following will be the research question on the impact of cybercrime on e-banking in deposit money banks.

1. What are the impacts of cybercrime on customer’s patronage of e-banking products?
2. What are the measures or effort put in place by deposit money banks management in controlling cybercrime on e-banking products?
3. What are the ways and measures that customers can use to protect their accounts against cybercrime?
4. What are the solutions to the issues of cybercrimes on e-banking in Nigeria?

1. Statement of Hypothesis

The following hypothesis will be posted for testing:

H₀₁: Cybercrime has no significant impact on customer’s patronage of e-banking products

H_a1:Cybercrime has significant impact on customer’s patronage of e-banking products

H₀₂: Deposit money banks management has no impact in controlling cybercrime on e-banking products

H_a2: Deposit money banks management has impact in controlling cybercrime on e-banking products

H₀₃: There is no measure that customers can use to protect their accounts

H_a3: There is measure that customers can use to protect their accounts

1. Significance of the Study

This research will be of great benefit and importance to the research and other parties such as;

• All Retail Customer of the Bank: the research will assist the retail customers of the bank on how to be security conscious when using electronic by protecting themselves from phishing and never to reply to email asking for their password or pin numbers.
• Banking Institutions: This study will be significant to banking institution by providing approaches or fraud schemes that can be used to prevent fraudsters. Such approach can be the one time password to improve security upon the activation of the customer account for electronic banking and also the e-fraud prevention, improving of internal control.
• Parastatals: the study can be adopted for/to facilitate easy payment of workers/officials remuneration which serves as one of the benefit of electronic banking.
  • Scope of the Study

The scope of this study is limited to the impact of cybercrime on e- banking in deposit money banks with specific reference to United Bank for Africa, Nasarawa branch.

1. Operational Definition of Terms

Cybercrime: Cybercrime according to Douglas and Loader (2000) can be defined computer mediated activities conducted through global electronic networks which are either illegal or considered illicit by certain parties.

Electronic Banking: It is the use of computer to carryout banking transactions such as withdrawals through cash dispensers or transfers of funds at point of sale.

Phishing: is a term used where a person’s personal details are obtained by fraudsters posting as bankers, who float a site similar to that of the person’s bank. Such a person (customer) is asked to provide all personal information about him and his account details on the pretense of database up gradation. It involves using a form of spam to fraudulently gain access to peoples online banking details.

Spam: Spam is an electronic junk mail or unwanted message sent to ones email account or phone. These messages vary but are essentially commercial and annoying in their sheer volume.

Spyware: spyware is generally considered to be software that is secretly installed on a computer and takes things from it without the permission or knowledge of the user. It takes personal information, business information and secretly gives it to someone

Electronic Authentication: this is a means of verifying the identities of customer and authorizing electronic banking financial services.Account Aggregation: it is a service that gather information from many websites, present that information to the customers in a consolidation format, and in some cases, many allow customers to initial activities on the aggregate accounts.