EFFECT OF ELECTRONIC BANKING ON CUSTOMER SATISFACTION IN ZENITH BANK PLC

EFFECT OF ELECTRONIC BANKING ON CUSTOMER SATISFACTION IN ZENITH BANK PLC

ABSTRACT

For the past decades, there has been an increase in the adoption of e-banking usage in Nigeria catalyzed by the improvement of Information and Communication Technology in the country. The general objective of the study was to examine the effect of electronic banking on customer satisfaction in Zenith Bank Plc Keffi Branch. The specific objectives of the study include: To find out the benefits associated with e-banking usage, find out the challenges associates with e-banking usage and assess the effectiveness of e-banking services on the customer’s satisfaction among the Zenith Bank customers in Keffi. The case study research design was employed in this study for the aim of obtaining the accurate information concerning the effect of electronic banking on customer satisfaction in Zenith Bank Plc Keffi. The samples of 100 respondents were used by the researchers who were obtained through both simple random sampling as well as the purposive sampling technique. The field results have revealed that e-banking is having the number of benefits which have led to an increase in bank customers’ satisfaction. The study has revealed that e-banking services have increased the customers’ satisfaction due to the convenience and accessibility of services. The study has revealed that the e-banking technology used by Zenith Bank Plc has succeeded to meet the customers’ expectation despite the challenges hindering its effectiveness such as the poor network coverage and the low knowledge on the application of e-bank technology. The study has recommended for the improvement of the technological infrastructures used in e-banking technology by connecting stakeholders involved in the e-banking service cycle such as the network companies.

CHAPTER ONE

INTRODUCTION

1.1       Background of the study 

The rapid changes in the financial sector which has brought the modern way of doing transactions are now adopted by many financial institutions. This has been aggravated by the development of ICT technology which has brought electronic technology of conducting transaction service. The development of technology specifically the Information and Communication Technology has affected the daily operation of the  financial institutions specifically banks (George, 2021). 

The application of ICT concepts have smoothen the banking operations as well as improving the customers satisfaction. As the result of the involvement of ICT in the banking operation the industry has become more competitive which has led to the dynamic environment of accomplishing the missions and vision of the bank management. The high development of ICT in has led to the high demand of  customer services through internet services. The development of science and technology shaped the technological revolution of  the banking industry; electronic banking is no longer an option in the competitive  nature of the banking business (George, 2021). Recently, electronic banking has  adopted the number of changes which aimed at improving the level customer  satisfaction as well as well providing the customers with the best experience of  electronic banking. 

The improvement of electronic banking services such as selling and purchasing  through the special online banking transaction banking. Despite of the risks  associated with electronic banking technology, the nature of the market and economy  and the supersonic speed of globalization which makes the world the single village  through internet networking have pushed the financial institution to adopt electronic  banking which basically has simplify the banking business as well as improving the  customers experience (Balali, 2021).

The improvement of ICT which has catalyzed e-commerce and electronic banking  have changed the way the financial institutions are interacting with the customers as  most of the business are now conducted through internet. It is through e-commerce as the means of payment, financial institutions have been forced to shift from the  traditional banking system to the modern electronic banking which is less of  paperwork.  The competitive nature of the banking industry have called for the introduction of the  banking systems which attracts more customers due to capability of the electronic  banking in reducing the customer’s waiting time in line for the service. The banking transactions are now more secured due to the introduction of Transaction Processing Systems (TPSs).

Internet banking has allowed the customers to access their information directly from their mobile phones and to make transaction through the easiest way. For the financial institution, transaction processing system plays the vital role in making sure that all of the banking activities are performed effectively. Transaction processing system capture and process the detailed information necessary to update data on the fundamental operations of the financial institutions.  Electronic banking is used by the bank in making sure that all of the monetary  activities of the bank are in the right order and they are secured from any form of  fraud. Electronic banking is often used bay making sure the customer satisfaction  improved by reducing customer waiting time when they are demanding banking  services such as balance check and money transfer (Hendrickson, 2013).

The development of banking services has improved the monetary services particularly in Nigeria. For the past two decades the economic activities in the country have been growing due to the investment in Information and Communication Technology (ICT) in the banking service. The development of Science and Technology has increased the access of electronic banking all over the country hence influence the social and economic development of the country. Today is very to find the bank in the  country which is not offering the electronic banking in the country. 

The preference on the use of electronic banking has become very high due to significances of investing in the new technology which improves the performance of  the bank operations. Electronic banking is said to be the best way of customers’ satisfaction and the bank revenues. As competition in the bank industry is increasing, it is vital to come up with the new strategy of winning the competitive advantages (Alison, 2013). Using electronic banking has become the vital strategy of lowering the level of competitive as well as enhancing the competitive advantages.

It is evident that adoption of electronic banking has changed the way bank are  operating, unlike the previous traditional banking technology which limits the  bank service hours, the use of electronic banking has become the solution towards the  increase of bank working hours hence leads to the improvement of customers service  as customer can access the bank service 24/7 (Kilombo 2014). Electronic banking has allowed the interlinking business between banks and banks as well as banks with the  other financial institutions such as the mobile service companies which are now  offering the mobile banking service mostly known as mobile money services. 

In the recent years Nigeria has made the great progress in the development of banking services as the result of the introduction of electronic banking technology in the country. Convenience and accessibility of the banking services outside the bank branches is argued as the most significance factor which has led to the increase of electronic banking services demand. Nigerian banks such as UBA, FBN, Zenith Bank etc has invested hugely in the electronic banking technology for the aim of  improving the bank financial operations as well as increasing the level of customers’  satisfaction due to the quality of service especially monetary services (Kilombo,  2014).

Despite of the benefits which bank customer are obtaining from the adoption of electronic banking technology, e-banking is still not a preference to some of the  customers as there is the still a group of customers which prefer the use of traditional  banking. The security risk as well as cost of associated with using the electronic  banking technology as well as the complexity of using electronic banking technology  are said to be the reasons for the low adoption of electronic banking (Kilombo 2014).

Due to the development of e-banking services in the country there are the numbers of threats which have come along with the new technology. This has led to the introduction of the legal and government regulatory bodies to monitor the conduct of electronic banking in the country. This is for the aim of making sure that the government is getting enough revenue from the new technology of e-banking introduced in the country as well as protect the community from the risks of using e-Banking services through the introduction cybercrime laws (George, 2021).

1.2       Statement of the problem

In the olden times, customers’ demand for banking services was ambitious essentially by safety of their monies as well as interest accruing from such savings. Nevertheless, the present day customers’ demand has shifted from just safety of money to how banks deliver their services. The motive is that the present day customer requires efficient, fast and convenient services (Wisdom, 2021). Zenith Bankis one of the leading commercial bank in Nigeria, with 500 branches, over 1.6 million customers (accounts) and close to 500 ATMs.

These numerous branches coupled with its predisposition and the needs of the poor in particular have increased exponentially its customer base throughout the country. So big is the customer base of the bank that daily visits to the banks banking halls reveal long winding queues of people waiting to transact business of all kind? (Wisdom, 2021). Occasionally, many of the customers out of frustration and unnecessary delays do complain of the bank’s operations. Some customers who are in need of quick and fast service delivery leave Zenith Bank for other banks which they usually described as providing fast-track banking services. It appears operational challenges in the form of delay in service delivery made the bank unattractive to the Nigerian public. In response to this concern, the bank began automation in other to remain competitive.

The financial market has become so competitive in recent times due largely to the liberalization of the banking industry. Also due to information communication technology (ICT) advancement, the bank has ceased the opportunity to automate its processes and introduce E-banking products. The launching of e-banking system by Zenith Bank was strategy of so many target including customers; it’s enables the customers to perform different banking services from their Zenith Bank accounts 24-hours access to cash through an automated teller machine (ATM) or direct deposit of pay checks into checking or serving accounts also it provides enormous benefits to consumers in terms of ease and cost of transaction either through internet, telephone or other electronic delivery. Notwithstanding the described benefits of establishing e-banking system at Zenith Bank but dissatisfaction of customers is what attracted the desires to conduct this study. Therefore the study seeks to investigate the effect of Electronic banking on customer satisfaction in Zenith Bank Plc Keffi.

1.3       Objectives of the Study

The main objective of the study is to examine the effect of electronic banking on customer satisfaction in Zenith Bank Plc Keffi Branch.

From the general objective of the study, the researcher developed the following specific objectives of the study. 

1. To find out the benefits associated with e-banking usage among the Zenith Bank customers in Keffi.
2. To find out the challenges associates with e-banking usage among the Zenith Bank Customer in Keffi
3. To assess the effectiveness of e-banking services on the customer’s satisfaction among the Zenith Bank customers in Keffi.

1.4       Research Questions 

1. What are the benefits associated with e-banking usage among the Zenith Bank customers in Keffi?
2.  What are the challenges associates with e-banking among the Zenith Bank customers in Keffi?
3.  How effective is e-banking services on the customer’s satisfaction among the Zenith Bank customers in Keffi?

1.5       Significance of the study 

The findings of the study have provided the financial institution’s management with necessary information on how e-banking can influence customer satisfaction.  Through the study the financial institution’s managements are having the chance of understanding how customer satisfaction can improve the profitability of the institution through the implementation of e-banking. The study carries information which is crucial to the bank managements to identify the challenges associated with electronic banking and as well as to introduce the precautions on the shifting from traditional banking to electronic banking. 

The study will help the bank to identify the perception consuming public have about the electronic banking services they are providing. The satisfaction of the customer is the prime occupation of the bank, thus this study will provide evidence for the upgrading of these services. Also, the study through the examination of service quality will enable the bank judge its performance in the light of how customers judge it. It

Through the good understanding on the factors influencing the determining customer’s satisfaction on e-banking technologies, the banking institution can develop  the best strategies of implementing the mobile banking technology also to understand  the banking services customers’ perception toward the mobile banking technology. 

The study has covered the gap of knowledge existing on e-banking and customer satisfaction studies by showing how electronic banking can influence customer satisfaction. The findings of the study will be used by other researchers to develop studies on the concepts of e-banking and customer satisfaction.

1.6       Scope and limitations of the study 

The study concentrated on the impact of the electronic bank on customer satisfaction.  To archive the objectives of the study, the research focused on the broad concepts of electronic banking, customer satisfaction, customers’ awareness and perception towards e-banking, the relationship between electronic banking and customers’ satisfaction as well as risks associated to the electronic banking in Nigeria

The study demanded the most accurate information from the respondent and the high level of reliability and validity to archive that the researcher faced the limitation of obtaining respondents with the high level of understanding the concept of e-banking and customers’ satisfaction. Most of the information demanded by the research were  very confidential specifically the information from the Zenith Bank Officials hence the  researcher faced the limitation of obtaining information which is regarded as  confidential by the Zenith Bank officers.

The researcher faced the challenge of the willingness of the respondents to participate  in the study this was due to the limited time they were having for interviews and  responding to the questions of the questionnaire. In overcoming the challenge of obtaining accurate information, the researcher collected from the bank officers who are working at Zenith Bank; this was easily achieved through the use of purposive sampling techniques as well as the case study  research design.

1.7       Definition of Terms

Electronic Banking: Timothy (2012) electronic banking refers to the use of the Internet as a remote delivery channel for providing services, such as opening a deposit account, transferring funds among different accounts and electronic bill presentment and payment

Customer: A customer is a person who maintains an account with the bank. One view of this question is that a person does not become a bank customer unless and until he opens an account with a bank (Adebayo, 2013).

Customer Satisfaction: Customer satisfaction is defined as the number of customers, or percentage of total customers, whose reported experience with a firm, its products or its services (ratings) exceeds specified satisfaction goals (Farris et al., 2020).

Internet Banking: Arunachalam and Sivasubramanian (2017) content that Internet banking is where customer can access his or her bank account via the internet using PC or mobile phone and web-browser.

Automated Teller Machines (ATMs): According to Loverock (2021), Automated Teller Machines (ATM) reduces the workload of bank`s staff. ATMs reduce the work pressure on bank`s staff and avoid queues in bank premises.

Telephone Banking

Telephone Banking (Telebanking) can be considered as a form of remote or virtual banking, which is essentially the delivery of branch financial services via telecommunication devices.

Mobile Banking: Literally this is banking conducted through the use of a mobile phone. A mobile banking transaction can be an account inquiry that does not involve a payment such as checking account balance, checking credit limit, looking up transaction history.