The Effect of E-Banking On Premium and Business Customer Satisfaction

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 6

The effect of e-banking on premium and business

customer satisfaction

Background

Existing trading relationships and service provision within the financial sector are undergoing
rapid change with the development of new financial software applications. The rapidly growing
information and communication technology is knocking the front door of every organization in
the world, where Ethiopian banks would never be exceptional. Except few all banks in Ethiopia
are too late to move with technological advancement and they should clearly chart out the time
schedule for their integration and technological advancement. Some of the banks even today
do not have information websites which can help them to provide at least the information on
financial services offered by them. Many bank customers are highly dissatisfied by the
disappointing status of financial development in Ethiopia. Even the time wasted in traveling for
search of bank branches and the long waiting time to access the account is really disappointing.
This is particularly because of the poor-integration of branches of the same bank, or network
problems or other reasons the electronic banking services are usually interrupted. i.e. even
within individual banks their branches are not fully linked to each other and it is a must to
physically visit the branch in which an account has been opened and/or search the bank that
has network to get banking services.

Certainly the banking industry in Ethiopia is underdeveloped and therefore there is an all
immediate need to embark on capacity building arrangements and modernize the banking
system by employing the state of the art technology being used anywhere in the world. With a
growing number of import-export businesses, and increased international trades and
international relations, the current banking system is short of providing efficient and
dependable services and therefore all banks operating in Ethiopia should recognize the need for
introducing improved electronic banking system to satisfy their customers and meet the
requirements of rapidly expanding domestic and international trades, and increasing
international banking services.
Statement of the Problem
The use of technology forms the backbone for better results in banking. Today’s banking
situation demands continuous innovation in order to meet the yearnings and aspirations of the
ever demanding customers. Hence, banks need to roll out new products and services quickly
and effectively, using latest cutting edge technology (Augusto, 2002). One of the benefits banks
derive from electronic banking products and services delivery is improved efficiency and
effectiveness of their operations so that more transactions can be processed faster and most
conveniently, which will undoubtedly impact significantly on the overall performance of the
banks. The customers on the other hand, stand to enjoy the benefit of quick service delivery,
reduced frequency of going to banks physically and reduced cash handling, which will give rise
to higher volume of turnover. However, these developments in the Ethiopian banking industry
seem not to have achieved their aims. Queues are still seen in the banking halls, bank
customers still handle too much cash, and hardly people talk about the electronic banking
products that are available in Ethiopia. Hoffman and Novak (1996) identified speed as a major
factor influencing customer satisfaction. Other researchers have empirically found positive
relationship between e-banking speed and customer satisfaction as critical factors on the use of
this service (Hoffman and Novak, 1996; Jayewardene and Foley, 2000). In recent years there is
an increasing adoption of internet banking in the country by the Ethiopian banks. In spite of the
increasing adoption of internet banking and its relevance towards customer satisfaction in the
Ethiopian banking industry, very little empirical investigation or research has been conducted in
understanding factors of internet banking service quality that lead to premium and business
customer satisfaction. This study therefore tries to fill this empirical gap in research by
conducting a study on effect of internet banking service quality on premium and business
customer satisfaction.
Objectives of the Study
General Objective of the Study
The overall objective of this study is to assess the effect of e-banking on premium and business
customer satisfaction.
Specific Objectives of the Study
This paper will specifically attempt to investigate the relationship between e-banking and
customer satisfaction.
Research Methodology and Procedures

Study Area
The area of this study focus will be on assessing the quality of e-banking service delivery and
premium and business customers’ satisfaction.
Sampling Method and Sample Size
The populations of this study will be all customers who received premium and business
customer service. This study will use convenience sampling methods to select the sample from
the available population. The study will employ convenience sampling method because it is
actually impossible to carry on a probability sampling because there is no point in time during
which all customers are available due to different reasons and it is not possible to contact
everyone who may be sampled.
Tools of Data Collection
The methodology that will be used is based on a set of self-administered questionnaire
developed in order to gather the data, which will help us answer our objective of the study.
Sources of Data
The sources of data are both primary and secondary sources. Primary sources of data will be
gathered from respondents. Secondary sources of data will be from different books, journals,
websites and documents related with, E-Banking services and customer satisfaction.
Description of Variables and Measurements
Dependent variable: premium and business customers’ satisfaction,
Independent variable: E-banking service quality
Method of Data Analysis
The data collected from respondents through questionnaire will be analyzed by using
descriptive statistics.

Service Quality and Customer Satisfaction in Selected


Banks in Ethiopia
Nowadays, the incredible growth of the globalization is changing the way banks conduct
business with customers who are increasingly expecting higher quality of services, becoming
time saver and wanting more conveniences. However, due to services intangibility,
inseparability, heterogeneity and perishability of production and consumption, service quality
becomes hard to evaluate. It is a critical area where private sector in particular, banks should
focus on and thus, catches up the level of customer satisfaction.

Among issues that are facing banks, there are: (1) long queuing lines ahead of bank tellers; (2) it
takes days to get transfers matured (e.g., salaries, etc., from other banks) deposited on
customers’ accounts, consequently many customers’ complaints; (3) Some branches are still
using bank books; means money can only be withdrawn by the account owner, yet the practice
of using ATM is only for few branches.

On the other hand, more efforts have been put in place. Along with them we can enumerate:
(1) bank system has been networked where identification of account’s owner can be viewed by
any branch that has the right. The result is that customers can withdraw cash wherever there is
bank teller. (2) Adverts and awareness mechanisms have been multiplied to disclose about new
products and services introduced including ATM service. (3) The convenience issue has been
minimized by increasing the number of outlets and sub-branches to facilitate customers to
access their bank without problem of long distance; and working hours to continue serving
customers within weekend and night hours.

Statement of the problem

Despite the efforts provided by ….. to improve its service, there is still evidence of challenges on
quality of the service which leads to customer satisfaction once played down by maintaining
customers who are loyal to the bank and who can positively recommend it to associates.
Anderson, Fornell, and Lehmann stated that global perceptions of service quality exert a strong
influence on global perceptions of customer satisfaction with the firm that finally is made by
customer loyalty and positive word of mouth communication. The matter will be evaluated
particularly in terms of commercial banking sector where competition has knocked at the door.
The aim of this study is to examine how service quality would impact so to improve the level of
satisfaction of ……. customers.

Purpose of the study

The purpose of this study is to determine the relationship between service quality and
customers satisfaction ……..

Research objectives general objective

To determine the effectiveness of service quality on customer satisfaction in ……………….

Specific objectives

The study will be guided by the following specific objectives

1. To determine the respondent’s profile in terms of gender, type of account, education


background and banking experience
2. To determine the level of service quality in ……..
3. To determine the level of customer satisfaction in …….
4. To determine the relationship between service quality and customers’ satisfaction in
……;
5. To establish strategies to enhance customer satisfaction in ….. based on the findings of
the study.

Research Methodology Research design


The research will be descriptive and cross-sectional. The basic reason for carrying out
descriptive research is to identify the cause of something that is happening. It will use
structured instrument and, specifically designed to measure the characteristics described in the
research questions using quantitative approach. Variables of interest in a sample of subjects
will be examined once and the relationships between them will be determined. The
quantitative analysis will be used to determine the correlation between independent and
dependent variables.

Research population

The study population will be customer of ………….branches

Sample size

The sample size will be determined using the Sloven’s formula; which states as follow:

Sampling procedure

The research will use non-probability sampling technique, specifically convenience sampling
technique to collect data because it is fast, inexpensive, and easy and the subjects are readily
available. The sample of this research will be customers who are demanding service from
………..branches under study during the data collection period. The study will use convenience
sampling not just because it is easy to use, but because it also has other research advantages.
Convenience sample is usually used because it allows the researcher to obtain basic data and
trends regarding his study without the complications of using a randomized sample.

Research instrument

Questionnaire technique will be used for data collection of this study. Questionnaires will be
distributed to respondents under the researcher supervision. All respondents will be given a
questionnaire with explanation before filling in. In the measurement of independent and
dependent variables, Likert scales will be used in order to identify the respondents’ leveling on
perceived banking service through statistical techniques of correlations between dependent
variable and independent variables.

You might also like