Impact Of The New Products Developed In The Banking Industry
(A Case Study Of First Bank Plc Enugu State)
The introduction of new products in the banking industry has a profound impact on various stakeholders. For customers, these innovations often mean enhanced convenience, efficiency, and accessibility to financial services. New digital banking products, such as mobile banking apps or digital wallets, streamline transactions and provide greater control over personal finances. Additionally, innovative loan and investment products may offer more tailored solutions to meet individual financial goals. For banks, these new offerings can improve competitiveness, attract new customers, and increase revenue streams. However, they also pose challenges such as the need for significant investment in technology and cybersecurity measures, as well as the necessity to adapt to evolving regulatory frameworks. Overall, the continuous development of new banking products reshapes the industry landscape, driving both opportunities and challenges for all involved parties.
This research intends to study the Impact of the New Products Developed in the Banking Industry in Nigeria (1990-2003).
In this research work, the researcher chooses four of the products and measures the extent to which they have been able to satisfy the customers. The products selected are SMART CARD, INTERNATIONAL MONEY TRANSFER, EDUCATIONAL SCHEME, AND INTEGRATED BANKING NETWORK TRANSACTION.
Data for this research were collected through questionnaire and interviews by bank customers and the review of exiting literature on the topic using simple random procedure and the descriptive method of research. The data so collected were analyzed using the simple percentage and the formulated hypotheses were tested with chi-square (X2) method.
Some of the findings are the impact the new products can be measured in terms of accessibility, speed, timeliness, simplicity and reliability.
Customers who patronize the new products are majority those who want money transfer both locally and internationally. Customers clerived 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 we might have with 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 contract problems.
A parallel organization that was supplying electricity in competition with NEPA should be allowed to evolve 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 Acknowledgment
vii Table of contents
ix Abstract
CHAPTER ONE
Introduction 1
1.1 Background Of The Study 1
1.2 Statement of the Problem 1
1.3 Objectives of the Study 2
1.4 Research Question 3
1.5 Research Hypothesis 4
1.6 Purpose of the Study 4
1.7 Significance of the Study 4
1.8 Rationale / Justification 5
1.9 Scope of the Study 6
1.10 Limitations of the Study 7
1.11 Delimitation of the Study 7
1.12 Assumption of the Study 8
1.13 Definition of Terms 8
1.14 Organization / Plan Development 10
References: 12
CHAPTER TWO
Literature Review 14
Theoretical Frame Work 14
2.1.0 New Product for Effective Banking Operation 14
2.1.1 The Nature of the New Products in the Banking Industry. 15
2.1.2 Information Technology 18
2.1.3 Globalization of banking Industry 20
2.1.4 The Concept of Universal Banking 21
2.1.5 Impact of the New Products in
the Nigeria Banking Industry. 23
2.1.6 Review of Other Related Completed 27
2.1.7 Summary and Justification 28
Reference: 29
CHAPTER THREE
3.0 Research Design and Methodology 31
3.1 Research Design 31
3.2 Area of Study 31
3.3 Research Population 31
3.4 Sampling Size Determination 32
3.5 Sampling Procedure 32
3.6 Sources of Data Used 32
3.7 Location of Data 33
3.8 Method of Data Collection 33
3.9 Method of Date Analysis 34
3.10 Statistical Tools for Analysis 34
Reference: 36
CHAPTER FOUR
Data Presentation and Analysis 37
4.1 Data Analysis and Interpretation 37
4.2 Questionnaire Presentation 37
4.3 Test of Hypothesis 48
4.4 Findings 52
CHAPTER FIVE
Summary of Finding and Recommendation and Conclusions 55
5.1 Summary of Findings 55
5.2 Recommendation and Conclusion 56
5.3 Conclusion 57
5.4 Suggestion for Further Research 58
Bibliography 59
BACKGROUND OF THE STUDY
The history of the banking in Nigeria dates back to pre-independent 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 find a means of making financial inter-mediation easy.
In the recent times, between 1990-2003 a lot of techniques are used by bankers to facilities customers services and customers satisfaction which has led to the introduction of the impact of the new products developed in the banking industry. These new products developed in the banking industry today revolve around banking and information technology.
As a result of this, the researcher seeks to study the impacts of the new products developed in the banking industries between 1990-2003.
1.2 STATEMENT OF THE PROBLEM
This research is designed to find out the impact of the new products developed in the banking industry between 1990-2003.
Therefore the statement of the impact in the research work remain thus to what extent has the new products n the banking industry today been able to meet customers satisfaction! In looking at the statement of the impact, one need to bear in mind that some customers came to the bank for certain needs that are peculiar to their own circumstance while some come for reasons that could be general. The ability of this new production the banking industry if to meet customers needs and facilitate their satisfaction determines efficiency.
1.3 OBJECTIVES OF THE STUDY
In view of the impact identified this study will achieve the following objectives.
1. To identify the impact of the new products and service delivering strategies in our banks.
2. To find out if the new products developed 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 find transfer is one the prospect of the new products developed by banks.
5. To find out if adequate frastructural level is among the impacts of the new products in the banking industry.
1.4 RESEARCH QUESTION
1. What is the impact of the new products and services delivery strategies in our banks?
2. In new products developed in the banking industry convenient for customers?
3. Could those new products satisfy customers needs?
4. Is find transferring one of the prospects of the new products developed by banks?
5. Is adequate fratructural level an impact of the new products developed in the banking industry?
1.5 RESEARCH HYPOTHESIS
The following hypotheses are draw from the study using will (H0) and alternative hypothesis (HI)
1. H0: New product developed by banks has not increased Customers patronage.
HI: New products developed by banks have increased customer patronage.
2. H0: Customers did mot derive satisfaction from patronizing the new products.
HI: Customers derive satisfaction from patronizing the new products.
1.6 PURPOSE OF THE STUDY
This research is carried out for a charmed propose in order to meet the requirement for the award of higher national Diploma.
1.7 SIGNIFICANCE OF THE STUDY
This study will be capable of widening academic by acting as a guide for further researchers. Therefore constitutes themselves into a very power 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, customers demand courteous treatment from their banks as well as efficient, fast and patronized service which meet their needs.
1.8 RATIONALE / JUSTIFICATION FOR THE STUDY.
At the end of this research, the following group of people such as the bank customers, banks Government General public and future researchers should stand to benefit there from.
1. Bank Customers: They will be exposed to the idea of the new products in the banking industry as to clear their minds to the impact of the new products.
2. Government: It will as a starting point in arousing government policy in support of the new products developed in the banking industry which will facilitate economic development.
3. Bank: it will help the banks 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 if hoped that the findings and recommendations will appeal to the inquisitive minds of the readers and other students as to spur them to take further studies in this area.
1.9 SCOPE OF THE STUDY
The scope of this study is limited to the impact 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 used in arriving at the findings and conclusion.
1.10 LIMITATION OF THE STUDY
These are the major limitation of this study because of lack of finance, time, inadequate data and attitude of some respondents.
1. Due to scare resources, the researcher could not cover all the sections of the banking industry on the new products developed in the banking industry.
2. Inadequate secondary data on the activities of the banking industry on the impact of the new products developed.
3. Dearth of literature in the areas of the banking operations.
4. Tight schedule and ignorant of most managing directors of the banks, interview and resulted in the brief time allocated to the researcher during contact with them.
1.11 DELIMITATION OF THE STUDY
This research deems it necessary for the researcher to visit all the banks constituting the new products developed in the banking industry but because of time and finance at the disposal of the researcher. Only a sample of the respondents culling across the various lives of the business is being conducted.
1.12 ASSUMPTION OF THE STUDY
The following assumptions are made on this research. This research work is free of bias. The data collected is true, reliable and not fictitious because of the questions and the right person answered interviews. The information repaired by the respondents is reliable because the responded were honest in replying the questions and those who cannot give true information were excluded.
The method, which constituted systematic random procedure, is not questionable. The chi-square (X2) method used in testing hypothesis is the most appropriate one.
1.13 DEFINITION OF TERMS
The following definition of terms will help those who are not experts in the field to understand certain technological jargon used in this research.
1. Impact: The basis effect or forceful check of a thing. A.U.P. Harray’s standard learner English Dictionary 1980
2. New Products: these are products that are introduced newly into the banking industry to enhance facilitates bank series to both customers and bankers. Edemolu A. (1998).
3. BANKS: A bank is any institution licensed to carry out business of banking in Nigeria and they are characterized by acceptance of deposit and facilitating withdrawal, equipment leasing, by discounting and other financial transactions depending on the type of bank. Ukemenam. C.O. (2000).
4. Bank Customers: Are people or organizations who have account with a bank and carry out financial transaction with the bank.
5. Universal Banking: This is a concept or banking policy under which every bank is free to determine the type to banking transaction they can engage in or a situation whereby a commercial merchant banks are free to engage in any conventional activities of either. Orjih. J. (2001).
6. Banking Industry: Is a prominent member of the service sector of the Nigeria economy.
7. Developed: Something that is mature or more advanced.
1.14 ORGANIZATIONAL / PLAN DEVELOPMENT
The researcher seeks to study the impact of the new products developed in the banking industry towards achieving this, the project is divided into five chapters.
Chapter one deals with the introduction. It discusses among other things the background of the study, statement of the impact, the objectives it sets to achieve and research questions, the hypothesis to test, significance, purpose, justification etc.
Chapter two is the literature review. It is subdivided into three division- the theoretical frame work where the researcher proved that the project is relevant to he course of study, the review of related projects previously completed where the researcher reviewed the efforts to her study, the summary and justification of the literature review designed to expose the gap in knowledge which the researcher intends to fill.
Chapter three deals with the research design methodology. It discusses the procedure adopted by the researcher in carrying out the research.
Chapter four is the data presentation and analysis. It is subdivided into analysis and interpretation, questionnaires test of hypothesis findings.
Chapter five is the conclusion including summary of findings, recommendation, and suggestions for further research.
Impact Of The New Products Developed In The Banking Industry:
The development and introduction of new products in the banking industry can have a significant impact on various stakeholders, the industry as a whole, and the economy. Here are some of the key impacts of new products in the banking industry:
1. Customer Experience Enhancement: New products often aim to improve customer experiences by offering innovative features and services. This can lead to increased convenience, accessibility, and personalized solutions for customers. For example, the introduction of mobile banking apps, digital wallets, and online account management has transformed the way customers interact with their banks.
2. Increased Efficiency and Automation: New banking products often leverage technological advancements, such as artificial intelligence and automation, to streamline processes. This can lead to reduced operational costs for banks and quicker transaction processing times for customers. Chatbots and robo-advisors are examples of products that enhance efficiency by automating customer interactions and investment advice.
3. Competition and Innovation: The introduction of new products can drive healthy competition among banks to offer better services and more attractive features. This competition encourages banks to innovate and develop unique offerings, ultimately benefiting customers through improved choices and value propositions.
4. Revenue Generation: Innovative products can open up new revenue streams for banks. For instance, offering premium services, subscription-based features, or value-added products can contribute to increased revenue generation. Moreover, fintech collaborations and partnerships can provide banks with opportunities to earn fees or commissions.
5. Regulatory and Security Considerations: New banking products may also introduce new regulatory and security challenges. Regulatory authorities often need to assess and adapt to these new offerings to ensure they align with existing financial regulations and standards. Banks must also ensure the security and privacy of customer data when implementing new digital solutions.
6. Financial Inclusion: Some new banking products aim to improve financial inclusion by providing services to underserved or unbanked populations. Mobile banking, for example, has allowed people in remote areas to access financial services without the need for physical branches.
7. Disruption and Adaptation: The introduction of disruptive products, often driven by fintech startups, can challenge traditional banking models. Incumbent banks may need to adapt quickly or develop similar products to remain competitive. This adaptability can result in a more dynamic and responsive banking ecosystem.
8. Data Utilization: New products generate valuable data on customer behavior and preferences. Banks can leverage this data for targeted marketing, product improvement, and better customer segmentation. However, responsible data usage and privacy considerations are essential.
9. Economic Growth: A thriving banking industry with innovative products can contribute to economic growth by facilitating lending to businesses, supporting investments, and driving consumer spending. New financing solutions and investment products can stimulate economic activity.
10. Risk Management and Mitigation: While new products offer opportunities, they can also introduce new risks. Banks need to manage risks associated with fraud, cybersecurity, and financial stability when implementing and offering new products.
In summary, the impact of new products in the banking industry is multi-faceted. It can improve customer experiences, enhance efficiency, drive innovation, generate revenue, foster financial inclusion, and contribute to economic growth. However, careful consideration of regulatory compliance, security, and risk management is crucial to ensure that the benefits of these new products are fully realized while minimizing potential downsides.