CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
Mobile banking is a unique change that has simultaneously rendered itself in pervasive ways cutting across various financial institutions and other sectors of the economy. In this 21st century, mobile banking has graduated from providing mere text messaging services to that of spurious internet banking where customers could not only view their balances and set up multiple types of alerts but also transaction activities such as fund transfers, deposit cash via the mobile phone and instruct payroll based transactions (Vaidya, 2011). Technology advancement has greatly played a vital role in improving the standards of service delivery in the financial institution sector. Gone are days when customers would line up in the banking halls waiting to pay their utility bills, school fees or any other financial transactions. They can just do this now at their convenience by using their ATM cards or through the internet from the comfort of their homes. Also due to the massive growth of the mobile phone industry most financial institution sectors have gone into the untapped opportunity and have partnered with mobile phone network providers to offer banking services to their clients. The revolution of mobile phone has changed the lives of many Africans, providing not just communications but also basic financial access in the form of phone-based money transfer and storage (Jonathan & Camilo, 2012; Demombynes & Thegeya, 2012). The high growth and penetration rates of mobile telephony that is transforming cell phones into pocket-banks in Africa is providing opportunities for countries on the continent to increase affordable and cost effective means of bringing on board a large chunk of the population that hitherto has been excluded from formal financial services for decades hence increasing their profitability . Such a transformation is of interest not only to banks and Micro Financial Institutions (MFIs) but also to governments, financial regulators as well as development partners who are providing support to improve the livelihoods and achieve sustained economic growth. Mobile banking is evolving as the new front on which banks can differentiate their service delivery. Banks and other financial services companies have an opportunity to generate new business, attract or retain customers, control costs, and gain other advantages by deploying applications for mobile phone users (Johnstone, 2010).
