Impact Of Purchasing Of Banking Services In Competitive Environment
In a competitive banking environment, the purchasing of banking services holds significant ramifications for both consumers and financial institutions. The decision-making process of consumers regarding which banking services to procure directly influences market dynamics and profitability for banks. Customers are increasingly discerning, prioritizing factors such as convenience, cost-effectiveness, and the breadth of service offerings when selecting a banking provider. Consequently, banks are compelled to enhance their service portfolios, streamline operational processes, and invest in innovative technologies to remain competitive. This dynamic fosters a symbiotic relationship wherein consumer preferences drive product innovation and operational efficiency, ultimately shaping the competitive landscape. Effective marketing strategies, personalized customer experiences, and robust digital infrastructure are paramount for banks seeking to attract and retain clientele amidst intense competition. Additionally, the purchasing behavior of consumers serves as a barometer for assessing market trends and identifying areas for strategic growth and differentiation within the banking sector. As competition continues to intensify, the ability of banks to adapt to evolving consumer preferences and deliver superior value propositions will be instrumental in securing market relevance and sustaining competitive advantage.
The banking environment is rapidly changing and banking operation to have assumed a new dimension completion is common and customers needs and desire are becoming highly sophisticated hence the need for good purchasing strategies so as to survive. The researcher will collect both the primary and secondary data, the secondary data shall include textbook, journals, reports, old research and other relevant materials, while the questionnaire will be used for collection of primary data. The information collected shall be analyzed using sample percentage and the hypothesis tested with the use of chi-square. The result of the study showed that the failure in the banking industry was a result of banks, not meeting the needs of customers. Banks in Nigeria are sold to be as competitive as the counterpart abroad, but the environment do not abhor the survival and growth of banks. The researcher finally recommended that bank should not only be market driven but should also endeavour to research into the need of customers, make their services relevant and create the necessary awareness for their services.
Title Page
Approval Page
Dedication
Acknowledgement
Abstract
Table of Contents
CHAPTER ONE
1.0 Introduction
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Statement of Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitation of the Study
1.9 Definition of Terms
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
2.2 Concept of Purchasing
2.3 Post Reform of Purchasing Strategies in Bank
Service Delivery in Nigeria
2.4 Bank Service
2.5 Purchasing Strategies of Some Banks
2.6 Needs of Purchasing Banks Services
2.7 Method of Purchasing Bank Service (Purchasing Mix)
2.8 Purchasing Segmentation
2.9 Basic Problem in Purchasing Banking Services
2.10 Government Regulation in The impact of purchasing of banking Services
CHAPTER THREE
3.0 Research Design and Methodology
3.1 Introduction
3.2 Research Design
3.3 Sources/Methods of Data Collection
3.4 Population and Sample Size
3.5 Sample Technique
3.6 Reliability of Measuring Instrument
3.7 Method of Data Analysis
CHAPTER FOUR
4.0 Presentation and Analysis of Data
4.1 Introduction
4.2 Presentation of Data
4.3 Analysis of Data
4.4 Test of Hypothesis
4.4 Interpretation of Results
CHAPTER FIVE
5.0 Summary, Conclusion and Recommendation
5.1 Introduction
5.2 Summary of Findings
5.3 Conclusion
5.4 Recommendation
Reference
Appendix
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Nigeria economy got in power till 1986 a highly regulated economy with local, state and federal government owing a large value proportion of the national economy.
However, with the introduction of Structural Adjustment Programme (SAP) in August 1986. The national economy was deregulated and most of the control were abolished while the price mechanisms system or the market force system was introduced to determine the price of goods and services. Before the introduction of the Structural Adjustment Programme (SAP), the banking industry, like other sector of the economy was owned largely and controlled by the government.
The sector was dominated by those referred to as the Big four i.e. Union Bank, Afribank, UBA and First Bank. However with deregulation of the economy brought about the Structural Adjustment Programme (SAP), many private participants entered the industry. The competition brought by those banks offered some basic services some of the service offered by bank are receiving deposit of customers, collecting cheques of customers drawn on themselves. From this traditional function developed other services referred to as services banking. It is a related banking services and now banking activities.
A list of services offered by banks include acceptance and safe keeping of deposits and other valuable, granting of loans and overdraft to customers, transfer of funds business services foreign exchange services, money creation, cashing credit facility, project financing service funds transfer outside and within Nigeria, letter of credit and foreign currency domiciliary account etc.
Finally, these services benefit both the provide (Bank and the receive customers) as well as the economy without them bank cannot be in business and the economy will not grow individuals and corporate activities will also be hampered. It is based on these facts that bank services become very vital even before the advent of modern banking activities.
1.2 STATEMENT OF PROBLEMS
i. To present the level of competition in the banking industry calls for strategies that will win the customer over.
ii. To understand what is purchasing what are services and how banks market their products called services. These are some of the areas this research emphasis much on.
iii. Ways bank can survive and have a sustainable share of market, it must be able to properly and profitable market it products.
iv. To also understand at the end of this research why banks are struggling to stay afloat in the turbulent business environment.
1.3 OBJECTIVES OF THE STUDY
To examine the purchasing strategies employed by bank in retaining existing customers and attracting new ones.
To critically examine the various financial services offered by banks to measure the effectiveness of the purchasing activities employed by the banks also the objective that are intended to be achieved.
To inquire into the cause of negative perception on the bank by the public.
1.4 RESEARCH QUESTION
1. Did the post reform competitive create any impact in the impact of purchasing of banking services?
2. Does purchasing have any negative effect on banking services?
3. What can the impact of purchasing of banking services contribute to the development of there industry?
1.5 STATEMENT OF HYPOTHESIS
Strategies purchasing activities lead to higher profit for an organisation.
Competition among banks lead to better quality of services.
1.6 SIGNIFICANCE OF THE STUDY
i. The research work is in partial fulfilment for the requirement for the award of Higher National Diploma (HND) in Purchasing.
ii. The study will help open up the new possible avenue for further researcher, which will help to widen the knowledge of research.
iii. The study will give the researcher as well as the public an insight on the issues, problems and prospect of Purchasing of banking in Nigeria.
1.7 SCOPE OF STUDY
As Anyanwu (200) point out, a researcher is not expected to cover a discipline in the course of his study in line with this statement, this research work would not cover every thing on this topic, but specially on the relevant aspect of the impact of purchasing of banking service and the post reform of purchasing strategies in bank services delivery in Nigeria.
This study will examine the various purchasing strategies employed by some selected banks. The focus is on Nigeria banks and the study does not attempt to do comparative analysis of Nigeria banks and banks in other countries.
1.8 LIMITATION OF THE STUDY
There is no human successful endeavour without constraints. The limitation for this study include.
Financial and time constraints which restrained free movement round the study areas in order to make adequate interviews, observation and assembling of secondary data.
The uncooperative attitude of some staff and customers of the selected banks by with drawing information needed.
The uncooperative attitude o some staff and customers of the selected banks by with drawing information needed.
If we lack the secondary data required for this work it will make the research work difficult.
1.9 DEFINITION OF TERMS
The researcher employed simple English for easy understanding of the terms phrases few terms can still be defined.
Purchasing Strategies: Those strategies employed by firms and organisation to attract customer to there product and services.
Arm Chair Banking: This is a period where bankers seat and wait for customers to come and patronize them they don’t hunt for customers.
Customer Satisfaction: This happen when the customer is pleased with the various services rendered by the bank.
Deregulation: To allow a particular sector or allow the market forces to determine price in the market or a particular industry.
Purchasing: This is getting the right goods and service to the right people at the right place at the right time and with the right communication and promotion.
Bank: An institution corporate recognised by a country’s highest monetary authority government business determined by that monetary authority or government.
Banking Business: Is a business of receiving deposit on current account, savings account or other similar account or paying or collecting cheques drawn by or paid in by customers or provision of finance.
Impact Of Purchasing Of Banking Services In Competitive Environment:
Purchasing banking services in a competitive environment can have a significant impact on both individual consumers and businesses. The banking industry is highly competitive, with numerous banks and financial institutions vying for customers’ business. Here are some key impacts of purchasing banking services in such an environment:
Variety of Options: In a competitive banking environment, customers have access to a wide range of banking services and products. This means that individuals and businesses can choose services that best meet their specific needs, whether it’s checking accounts, savings accounts, loans, or investment products.
Lower Costs: Competition among banks often leads to lower fees and interest rates for customers. Banks may offer better terms and incentives to attract and retain customers, ultimately resulting in cost savings for consumers and businesses.
Innovation: Competition drives innovation in the banking sector. Banks are constantly developing new products and services to stay ahead of their competitors. Customers benefit from these innovations, which can include online and mobile banking features, digital payment solutions, and enhanced security measures.
Customer Service: Banks strive to provide better customer service in a competitive environment. They are more inclined to address customer complaints, improve response times, and enhance the overall customer experience to retain and attract clients.
Tailored Solutions: Competition encourages banks to offer more personalized and tailored solutions. They may analyze customer data to provide customized financial advice and recommendations, which can help individuals and businesses better manage their finances.
Higher Quality Services: To remain competitive, banks invest in improving the quality of their services. This can manifest in improved online and mobile banking platforms, enhanced fraud protection, and faster transaction processing.
Accessibility: In a competitive environment, banks expand their branch and ATM networks to make their services more accessible to customers. This means more convenient locations for in-person transactions and a broader network of ATMs for fee-free withdrawals.
Financial Inclusion: Competition can also drive banks to reach underserved populations and offer financial services to those who were previously excluded. This contributes to greater financial inclusion and helps more people access banking services.
Risk Management: Banks in competitive environments may become more vigilant in risk management to maintain their reputation and attract customers. This can lead to improved financial stability and security for customers.
Mergers and Acquisitions: In highly competitive markets, some banks may merge or acquire smaller institutions to gain a competitive edge. This can lead to changes in service offerings, terms, and customer experiences.
Regulation and Consumer Protection: Government regulators often closely monitor competitive banking environments to ensure fair practices and protect consumers. This oversight can provide additional safeguards for customers.
While competition in the banking industry can yield many benefits for consumers and businesses, it’s essential for individuals and organizations to carefully evaluate their options and choose banking services that align with their specific financial goals and needs. Additionally, understanding the terms, fees, and conditions associated with banking services is crucial to making informed decisions in a competitive environment.