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