ASSESSMENT OF RISK AWARENESS OF MOBILE BANKING USERS IN NIGERIA CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Mobile phones have become a tool for everyday use. They have created an opportunity for evolution of banking services to reach the previously unbanked population. Use of mobile banking has made basic financial services highly accessible to low-income people because it caters for challenges of time and distance to the nearest retail bank branches (CGAP, 2006). Mobile banking (m-banking) is an internet-based service, which enables customers to access bank accounts through mobile devices and conduct as well as complete bank-related transactions such as checking account status, transferring money and selling stocks, to mention a few (Kim, Shin and Lee, 2009). Luo Li, Zhang and Shim (2010) defined mobile banking as an innovative method for accessing banking services via a channel whereby the customer interacts with a bank using a mobile device. Mobile banking services provide ability to perform banking transactions online on portable mobile devices via the Short Messaging Service (SMS) or Wireless Application Protocol (WAP). Such provision of financial services through ICT was made possible even in low-income countries. The roll-out of mobile telephone has been rapid and has extended access well beyond already connected customers in developing countries. It has resulted in a positive social impact on poor people and communities (Porteous and Neville, 2006). Furthermore, mobile banking is a powerful way of delivering savings services to a billion people, worldwide, who have a cell phone but no bank account (Lee, Lee and Kim, 2007). It breaks down geographical constraints and also tends to offer immediacy, security and efficiency (Ondienge, 2010).
Mobile banking otherwise known as M-banking refers to the provision of banking and all forms of financial services with the help of mobile telecommunication devices such as the smart phones, androids, etc. With the continued growth of the smart phone markets, the use of digital applications to access mobile financial information is gaining popularity. There is a general consensus that the mobile devices are the most promising way to reach the masses and to create a tie-in among current customers, due to their ability to provide services anytime and anywhere; moreover, these devices have high rate of penetration and potential to grow even among the less educated. Agwu (2012) stressed that the mobile phones remain the only and most available feasible means to provide mass marketing and could serve as alternative to branch banking in Nigeria. The author further stressed that the internet has only a penetration rate of 6 percent in a population of 140 million in Nigeria but mobile technology is close to 50 percent penetration with prospects for growth. Pikkarainen et al., (2004) noted that technological development has provided opportunities for service providers to develop their services and offer customers more flexibility.
Lichtenstein and Williamson (2006) also noted that banks have launched multiple service access methods through new delivery channels like ATM, internet and mobile phones. Despite these advantages and the conveniences, the use of mobile banking services is much lower than expected in both the developed and developing economies. Agwu, (2012) stated that mobile phones and its applications are still highly under-utilized. Akturan and Tezcan (2012) stressed that the market of mobile banking still remains very small when compared to other electronic banking counterparts such as ATM; internet banking, etc. Furthermore, Iddris (2012) noted that the widespread adoption and large usage of mobile telephones did not reflect on the adoption and usage of mobile banking. However, the banks in Nigeria are racing to use this latest technology to reduce their operational costs and increase customer base (Agwu (2012). Puschel, et al., (2010) also stressed that adoption and usage of mobile banking will largely depend upon customers‟ perception of its ease of use and usefulness. However, the understanding of the underlining problems of the reasons for the low rate of mobile banking usage non preference of mobile banking services to other electronic banking applications could assist financial managers to find ways to adjust their marketing techniques and come up with the right solution to improve their mobile banking service as well as to increase the rate of mobile banking usage.
Sathye, 1999; Polatoglu and Ekin, (2001) has an impact on customer’s adoption of m-Banking. Sathye (1999) emphasized that many customers were simply unaware of internet Banking and its unique benefits. Here knowledge denotes to the customers‟ awareness of m-Banking and the benefits associated with it, and their awareness of how to perform baking transaction through m-Banking. Sathye (1999) observed that the lack of awareness about Mobile Banking and its benefits contribute to the non-adoption of Mobile Banking. Additionally, Polatoglu and Ekin (2001) indicated that the more knowledge and skills a customer possessed about Mobile Banking, the easier it was for the customer to utilize Mobile Banking. It is essential that the banks offering M-BANKING services should make the customers aware about the availability of various services and their benefits and educate them about security & privacy and risk involved in M-BANKING transaction.
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