E-Banking As A Tool For Enhancing Customer’s Satisfaction In The Banking Sector

Introduction

1.1 Background of the Study

Banks play an important role in the development of any society, be it social or economic. This has drawn the attention of several scholars from different fields to investigate the role of banks and their contributions towards the development process of the economy. According to Olorunmolu (2009), banks provide services that help to enhance business activities by granting loans, overdraft, money transfer, deposit, and withdrawal among others to their customers. Over the years, the statutory functions of banks have become more complex owing to their dynamic and highly competitive business environment and the ever-increasing demand and number of their customers. Therefore, to remain afloat, several banks resort to customer-oriented services to enhance efficient and effective customer services. It is worthyof note that, the business of banking is no longer perceived merely as the conventional generation of deposits, liabilities and creation of liquid assets, but the generation, storage, communication and application of financial information with the aim of achieving customer satisfaction (Irechukwu, 2000). To achieve this several banks have adopted the electronic banking system for better service delivery to their customers. Electronic banking has been defined by Shahriari (2014) as the automated delivery of new and traditional banking products and services directly to customers through electronic and interactive communication channels. E-banking is of paramount importance in meeting user expectations. Oliver cited in Mwinga (2014:13) defined Customer satisfaction in the context of consumption as “the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with the customer‟s prior feelings about the consumption experience”. In other words, customer satisfaction reflects a post-purchase evaluation of a product quality given pre-purchase expectation.

In a bid to achieving customer satisfaction, banks employ different strategies such as physical decentralization of branches around population/commercial areas, making them accessible to customers, and have also taken advantage of Information Communication Technology (ICT). ICT has introduced a number of new systems in all aspects of business activities and banks have not failed to explore this in their desire for customer satisfaction. One of the systems that have come along with ICT is electronic banking, otherwise known as e-banking.

With the provision of e-banking services in virtually all the banks in Nigeria, aimed at decongesting the banking hall and providing a convenient and satisfactory services, customers still experience delayed services. It takes hours to effect a simple transaction and the hall is always full of customers waiting to either pay in or withdraw money from their accounts. The situation is even worse during festive periods or when workers‟ salaries and other emoluments are paid to workers at the end of each month which has become a norm within Nigeria. Woherem (2000) observed that although, the adoption of e-banking by banks has made some changes in time consumption in banks, the changes do not reflect the accurate service that is expected from the banks. Some customers see banking activities in Nigeria as time consuming or wasting.

1.2 Statement of the Problem

Technology improvement in the banking sector has given rise to E-banking service which gives customers absolute control over their account in terms of receipt and payment (Sathiyavany and Shivany, 2015). In modern banking context, electronic banking (hereinafter referred as E-banking) is a growing research concern for the enhancement of banking service management. And, E-banking comprises three noticeable features which are self-service technology, absence of human interface and modernization of operations (Fuentes-Blasco et al., 2010). The growth of online transaction value is from N36.49 trillion to N49.35 trillion between 2018/2019 (Odutola, 2019). Also, the payment volume through online transaction platform is rising, for which NIBSS Instant pay are recorded growing from 308.41 million to approximately 504.16 million (increase 63.5 percent) for the same period (Odutola, 2019 2019). Prior studies focused on E-Banking service quality (Pakurár, 2019), E-commerce and Banking performance (Salami and Ogbeta, 2014), mobile banking (Adewoye, 2013) and consumer shopping behaviour (Ulaikere, Abikhia, Adefulu and Ajike, 2020). According to Gustafsson et al. (2005), satisfied customer is accpeted to have positive behaviour of a using either a product or service. Despite the rapid growth of electronic banking by banks in Nigeria, banks are still facing the challenges of improving customer satisfaction. Yet, we do not fully understand how electronic banking service quality enhances the satisfaction of customer, especially in the Nigerian context. Therefore, the study intends to narrow the gap by uncovering how the e-banking service quality influence the level of customers’ satisfaction.

1.3 Objective of the Study

Generally, this study is designed to examine e-banking as a tool for enhancing customer’s satisfaction in the banking sector (a case study of unity bank PLC). To achieve this, the study will specifically;

Assess the availability of e-banking services at unity bank Plc.

Find out the level of customers knowledge of electronic banking products.

Ascertain level of e-banking services utilization by customers of unity bank.

Find out the qualities of e-banking services that influences customers satisfaction.

Identify the challenges which negatively affects customers’ satisfaction in the use of e-banking services.

1.4 Research Question

The study will be guided by the following question;

What are the e-banking services available at unity bank Plc?

What is the level of customers knowledge of electronic banking products?

What is the level of e-banking services utilization by customers of unity bank?

What are the qualities of e-banking services that influences customers satisfaction?

What are the challenges which negatively affects customers’ satisfaction in the use of e-banking services?

1.5 Research Hypothesis

Ho: The utilization of e-banking services has no significant impact on customers’ satisfaction.

Ha: The utilization of e-banking services has a significant impact on customers’ satisfaction.

1.6 Significance of the Study

The Nigerian financial sector has evolved over the past decades as fintech companies have emerged as well as digital currencies. This new development has drastically changed the financial sector as competitiveness is on the increase. As mentioned above, e-banking services has the potential to retain customers, hence this study will revitalize the need for service improvement and the constant offering of quality service to customers in the banking industry, which must not be treated with laxity if customers must be retained.

Additionally, subsequent researchers will use this study as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to e-banking as a tool for enhancing customer’s satisfaction in the banking sector.

1.7 Scope of the Study

The scope of this study is to appraise e-banking as a tool for enhancing customer’s satisfaction in the banking sector. The study will specifically delve into assessing the availability of e-banking services at unity bank Plc, finding out the level of customers knowledge of electronic banking products, ascertaining level of e-banking services utilization by customers of unity bank, finding out the qualities of e-banking services that influences customers satisfaction, and identifying the challenges which negatively affects customers’ satisfaction in the use of e-banking services. The study will be carried out at unity bank Plc. in Asaba, Delta State.

1.8 Limitation of the Study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing to the nature of the discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. More so, the choice of the sample size was limited as few respondent were selected to answer the research instrument hence cannot be generalize to other secondary schools. However, despite the constraint encountered during the research, all factors were downplayed in other to give the best and make the research successful.

1.9 Definition of Terms

Electronic Banking

Electronic banking has been defined by Shahriari (2014) as the automated delivery of new and traditional banking products and services directly to customers through electronic and interactive communication channels.

Quality Service:

This is a comparison of perceived expectations of a service with perceived performance.

Customer Satisfaction:

This is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities

1.10 Organization of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, abnd selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.