Evaluation Into The Nature Problems And Prospects Of The New Products Developed In The Banking Industry
(A Case Study Of First Bank Plc, Enugu, Nigeria)
The banking industry is continually evolving, with the development of new products aimed at enhancing efficiency, accessibility, and customer experience. While these innovations present opportunities for growth, they also pose challenges. The introduction of advanced technologies, such as blockchain and artificial intelligence, raises concerns about security and privacy. Additionally, the rapid pace of digitalization may leave certain demographics behind, exacerbating issues of financial inclusion. Furthermore, regulatory compliance becomes a critical consideration as new products emerge, requiring the industry to navigate complex legal frameworks. Despite these challenges, the prospects for new banking products are promising, as they have the potential to streamline processes, reduce costs, and cater to evolving customer needs, ultimately fostering a more resilient and responsive banking ecosystem. Success will depend on the industry’s ability to address these challenges effectively and build trust among stakeholders.
This research studied the evaluation into the Nature, problem and prospect of the New product developed in the banking industry from 1990-2003.
In this research work, the researcher choosed four of the products and measures the extent to which they have been able to satisfy the customers. The product selected are, SMART CARD, INTERNATIONAL MONEY TRANSFER, EDUCATIONAL SCHEME AND INTEGRATED NET WORK TRANSACTION.
Data for this research were collected though questionnaire and interviews by bank customers and the review of existing literature on the topic using simple random procedure and the descriptive method of research. The data so collected were analysed using the simple percentage and the formulated hypothesis were tested with chi-square (X2) method.
Some of the findings are, the nature of the new product ca be measured in terms of accessibility, speed, timeliness, simplicity and reliability. Customers who patronize this products are mainly those who want money transfer both locally and internationally. Customers derived high level of satisfaction from the New products. Inadequate infrastructural level in our banking industry and high cost of installing them contributed to the problems of the New Products.
Based on the findings, the following were recommended, that banks should come together and establish a common data communication satellite to minimize constant problems.
A parallel organization that was supplying electricity in competition with NEPA should be allowed to evolved so that an efficient supply of electricity can be ensured.
Finally, since this study alone cannot be exhaustive of this vital subject, it is recommended for further studies.
ii Title page
iii Approval page
iv Dedication
v Acknowledgement
vi Abstract
viii Table of contents
CHAPTER ONE
1.1 Background of the Study 1
1.2 Statement of the Problems 2
1.3 Objective of the Study 2
1.4 Research Questions 3
1.5 Research Hypotheses 4
1.6 Significance of the Study 4
1.7 Scope, Limitations and Delimitation 6
1.8 Definition of Terms 8
Reference 10
CHAPTER TWO
Review of Related Literature 11
2.1 New Products for Effective Banking Operation 12
2.2 The Nature of the New Products in the Banking Industry 12
2.3 Information Technology 15
2.4 Globalization of Banking Industry 17
2.4 The Concept of Universal Banking 19
2.5 Prospects and Problems of the New Products in the Nigeria 20
2.6 The Review of Other Related Completed Research Work 24
2.7 Summary and Justification 25
Reference 27
CHAPTER THREE
3.0 Research Design and Methodology 28
3.1 Research Design 28
3.2 Area of Study 28
3.3 Population 28
3.4 Sample and Sampling Techniques 29
3.5 Instruments of Data Collection 29
3.6 Method of Data Presentation 29
3.7 Method of Data Analysis 30
Reference 33
CHAPTER FOUR
4.1 Data Presentation and Analysis 34
4.2 Questionnaire Presentation and Analysis 34
4.3 Test of Hypotheses 44
CHAPTER FIVE
Findings, Recommendation and Conclusion 51
5.1 Summary of findings 51
5.2 Recommendation 52
5.3 Conclusion 53
5.4 Suggestion for Further Research 53
Bibliography 54
BACKGROUND OF THE STUDY
The history of banking in Nigeria dates back to pre-independence period, then the establishment of banks was motivated by the urge on the part of government to inculcate banking culture in the people and the desire of the people themselves to fund a means of making financial intermediation easy.
In the recent times, between 1990-2003 a lot of techniques are sued by banks to facilitate customers services and customers satisfaction which has led to the introduction of the New Products developed in the Banking industry. These new products developed in the banking industry today revolve around electronic banking and information technology.
As a result of this, the researcher seeks to study the nature, problems and prospects of the New products developed in the banking industries between 1990-2003.
1.2 STATEMENT OF THE PROBLEMS
This research is designed to find out the Nature, problems and prospects of the New Products developed in the banking industry between 1990-2003.
Therefore, the statement of the problem in the research work remain this to what extent has the New Product in the banking industry today been able to meet customers satisfaction. In looking at the statement of the problem, one needs to bear in mind that some customers come to the bank for certain needs that are peculiar to their own circumstances while some come for reasons that could be general. The ability of these new products in the banking industry is to meet customers needs ad facilitate their satisfaction determine their efficiency.
1.3 OBJECTIVES OF THE STUDY
In view of the problems identified, this will achieve the following objectives:
1. To identify the nature of the New products services delivery strategies in our banks.
2. To find out if the New products develop by banks is convenient to customers.
3. To find out if these New products developed by banks satisfy customers needs.
4. To find out if fund transfer is one of the prospects new products developed by banks.
5. To find out if inadequate infrastructural level is among, the problems of the New products, in the banking industry.
1.4 RESEARCH QUESTIONS
1. What is the nature of the New products and services delivery strategies in our banks?
2. Is new products developed in the banking industry convient for customers?
3. Could these products satisfy customers needs.
4. Is fund transfer one of the prospects of the
1.5 RESEARCH HYPOTHESES
The following hypotheses are drawn from the study using will (Ho) and alternative hypothesis (H1).
1. Ho: New Products development has not increased banks profitability.
H1: New product development has increased banks profitability.
2. Ho: The acceptability of New product by customers is not dependent on Awareness.
H1: The acceptability of New product by customers is dependent on Awareness.
3. Ho: New product development by banks has not increased customers patronage.
H1: New product development by banks has increased customers patronage.
1.6 SIGNIFICANCE OF THE STUDY
This study will be capable of widening Academics by acting as a guide for future researchers. Therefore bank constitute themselves into a very powerful, instrument for fostering Economic development. Bank customers today expect a lot from their banks. Banking nature is no longer just about safety of funds and increased returns on investment from their bank as well as efficient, fast and personalized service which meet their needs.
At the end of this research, the following group of people such as the bank customers bank, govt. general public and future researchers should stand to benefit from it.
1. BANK CUSTOMERS: They will be exposed to the idea of the new developed product in the banking industry as to clear their minds to the nature prospects and problems of the new product.
2. GOVERNMENT: It will act as a starting point in arousing government policy in support of the new product developed in the bank industry which will facilitate economic development.
3. BANKS: It will help the bank to improve on their services rendered to the customers, as well as efficient fast and personalized services which meet their needs.
4. GENERAL PUBLIC: This will further encourage savings for more investment and creation of job opportunities for the timing population.
5. FUTURE RESEARCHERS: This study above cannot be exhaustive of this virtual subject. So, it is hoped that the findings and recommendations will appeal to the luguistive minds of the readers and other students as to spur them to take further studies in this area.
1.7 SCOPE, LIMITATIONS AND DELIMITATIONS OF THE STUDY
The scope of this study is limited to the nature, problems and prospects of the new products developed in the banking industry. It runs across the various lines of the bank customers.
Being conducted by the banking industry in particular. Both primary and secondary data were collected and used in arriving at the findings and conclusion.
There are the major limitations of the study, because of lack of finance, time, inadequate data and attitude of some respondents.
1. Due to score resources, the researcher could not cover all the sections of the banking industry, on the new product developed in the banking industry.
2. Inadequate secondary data on the activities of the banking industry on the nature, problems and prospects of the new product developed.
3. death of literature of the area of the banking operation.
4. tight schedule and ignorant of most managing directors of the banks, interview and resulted in very brief tie allocated to the researcher during contact with them.
This researcher deems it necessary for the researcher to visit all the banks constituting the new product developed in the banking industry but because of time and finance at the disposal of the researcher, only a sample of respondents cutting across the various lines of the business is being conducted.
1.8 DEFINITION OF TERMS
The following definition of terms will help those who are experts in the field to understand certain technological jargons used in this research.
1. NATURE: The basic qualities or character of thing.
2. PROBLEM: A thing that is difficult to deal with or understand or a question to be solved.
3. PROSPECT: The chances of being successful (Hernbey 1999).
4. BANKS: A bank is any institution licensed to carryout business of banking, and they are characterized by acceptance of deposit and facilitating withdrawal, equipment leasing, by discounting on the type of bank. (Ukemenam 2000).
5. BANK CUSTOMERS: These are people or organization who have accounts with banks and carryout financial transactions with the bank (Iloh 2002)
6. NEW PRODUCTS: These are products that are introduced newly into the banking industry to enhance or facilitate bank services to both customers and bankers (Edemodu 1998).
7. UNIVERSAL BANKING: This is a concept or banking policy under which every bank is free to determine the type of banking transaction they can engage in or a situation whereby a commercial merchant banks are free to engage in any conventional activities of the either (Orjih 2001).
8. C.B.N.: Central Bank of Nigeria also known as the Apex regulatory bank for Nigeria Financial System (Ukemenam 2000).
Evaluation Into The Nature Problems And Prospects Of The New Products Developed In The Banking Industry:
Evaluating the nature, problems, and prospects of new products developed in the banking industry is crucial for understanding their impact on financial institutions, customers, and the broader economy. Here’s a comprehensive analysis:
Nature of New Products in Banking:
- Digitalization: New banking products are predominantly digital, leveraging technology to offer innovative solutions. These include mobile banking apps, online account management, and virtual wallets.
- Fintech Integration: Banks are increasingly partnering with fintech companies to create new products. These collaborations result in offerings like peer-to-peer payment platforms and robo-advisors.
- Customization: Personalization is a key trend, with banks tailoring products to individual customer needs. This includes personalized savings plans and investment portfolios.
- Blockchain and Cryptocurrency: Some banks are exploring blockchain technology and cryptocurrencies to streamline cross-border payments and offer crypto-related services.
Problems with New Banking Products:
- Cybersecurity Risks: As banking becomes more digital, the risk of cyberattacks and data breaches increases. Protecting customer data is paramount.
- Regulatory Challenges: Regulatory bodies often struggle to keep up with the rapid pace of innovation in banking. New products may face legal and compliance hurdles.
- Customer Trust: Customers may be hesitant to adopt new banking products due to concerns about data privacy and security.
- Legacy Systems: Banks with outdated infrastructure may find it challenging to integrate new products seamlessly, leading to operational inefficiencies.
Prospects for New Banking Products:
- Enhanced Customer Experience: New products aim to simplify banking, making it more convenient for customers. This can lead to higher customer satisfaction and loyalty.
- Cost Efficiency: Automation and digitalization can reduce operational costs for banks, potentially leading to lower fees and better interest rates for customers.
- Financial Inclusion: Innovative products can extend banking services to underserved populations, improving financial inclusion.
- Competitive Advantage: Banks that embrace innovation can gain a competitive edge in the market, attracting tech-savvy customers.
- Diversified Revenue Streams: New products can open up new revenue streams beyond traditional banking services, such as fees from payment processing or investment management.
- Global Reach: Digital products can help banks expand their reach beyond domestic markets, targeting international customers.
Evaluation Methodologies:
- Customer Feedback: Conduct surveys and gather feedback from customers to assess their satisfaction with new products.
- Performance Metrics: Analyze key performance indicators (KPIs) such as adoption rates, customer acquisition costs, and profitability.
- Risk Assessment: Evaluate the security and regulatory compliance of new products to mitigate potential risks.
- Market Research: Monitor competitors and market trends to understand how new products fit into the broader industry landscape.
- Financial Analysis: Assess the impact of new products on the bank’s financials, including revenue growth and cost savings.
- Long-Term Viability: Consider the scalability and sustainability of new products in a rapidly changing financial landscape.
In conclusion, new products in the banking industry have the potential to transform the way customers access and manage their finances. However, they also come with challenges related to security, regulation, and customer trust. A comprehensive evaluation should consider both the advantages and potential pitfalls of these innovations to inform strategic decision-making by banks and regulators.