The Effects of E-Banking on Customer Satisfaction with a Case Study of UBA CUSTOMERS in Buea
Department: Management
No of Pages: 79
Project Code: MGT7
References: Yes
Cost: 5,000XAF Cameroonian
: $15 for International students
ABSTRACT
The
study aimed objectively to analyze the effect of e-banking on customer
satisfaction on customers of UBA Bank located in Buea municipality. With this
regard some specific objectives were developed by the researcher which includes
the following:
To
determine how transaction processing time of e-banking affects customers’
satisfaction, to investigate how the security of e-banking affects customers’
satisfaction, to analyse how the accessibility of e-banking affects customers’
satisfaction, and to find out how the cost of e-banking affects customers’
satisfaction.
This
study was based on a descriptive research design, with the use of a systematic
sampling strategy, a sample size of was 40 customers adopted. Questionnaire was
used as the principal tool for the data collection.
With
the aid of the SPSS software the data was analyzed using basic statistical
tools such as frequencies and percentages. The study brought to the fore that
customers prefer to transact business in the via e-banking methods than the hall
or counter services due to the fact that queues are long for them to be
attended to, the level of e-banking security in UBA was found to be better for
customers, with the accessibility of e-banking services, it was discovered that
customers prefer to use e-banking to the counter service because the services
are accessible easily.
And
the cost of using e-banking customers was satisfactory in relation to the
benefit archived. The data analysis also showed that customers of the selected
bank were highly aware of the various e-banking platforms available at their
bank.
The
study revealed that in spite of the difficulties associated with the use of
e-banking products, majority of the respondents highly patronize these
services. However, ignorance on the part of the customers regarding the use of
e-banking services was a huge challenge.
The
study, based on the findings recommended among other things that mass public
(customer) education regarding the usage/ advantages of e-banking products and
services should be embarked by the banks. Also, the researcher suggested that
there should be a widespread citing of ATM machines to more localities.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Electronic banking has become an integral part in the operations of any commercial banking institution in Cameroon as well as globally. The emergence of information and communication technologies over the past three decades has facilitated banking operations as well as the provision of banking services in order to suit the ever-changing needs of customers.
Electronic
banking (e-banking) has many definitions varying with different researchers, in
simple terms electronic banking can be referred to in terms of services like
internet banking (online banking), telephone banking, TV-based banking, mobile
phone banking, ATM services and offline banking (Mahdi and Mehrdad 2012).
The
Basel Committee on Banking Supervision defined electronic banking as the
provision of retail and small value banking products and services through
electronic channels as well as large vale electronic payments and other
wholesale banking services delivered electronically (BCBS, 1998).
Furthermore,
a global perspective the evolution of Electronic banking took off in the early
1980’s simultaneously with some of the major commercial banks around the world
notably, The Bank of Scotland offering Nottingham Building Society (NBS)
customers the first internet banking service in the UK and calls it “Home link”
aiding them in sending transfers and paying bills, which later on formed the
basis of electronic banking services today (Pilcher, 2012).
Whilst
in 1981 in the United States in New York four of the city’s major banks
(Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) were also
introducing the concept of electronic banking to their customers
(Gobankingrates, 2016) which paved the way for electronic banking operations in
commercial banks worldwide.
According to a statistics conducted by Bain
& Company in 2012 on the usage of electronic and mobile banking as measured
by the percentage of people in a particular country South Korea was ranked
first at the first with 47% followed by China 42% while the USA and UK are at
the seventh and eleventh position with 32% and 26% respectively of its
population undertaking electronic banking transactions.
Globalization
has also played an important role in the proliferation of electronic banking
around the world since one of the main factors of globalization on the banking
sector is increased competition, thus in order for commercial banks around the
world to stay ahead of the competition and meet up to international standards
they have to be innovative in terms of integrating electronic banking in their
operations.
Moreover,
in the United States of America, the widespread adoption of electronic banking
took hold in the early 2000’s with 80% of US offering electronic banking
services, even though customer usage was growing at a very slow pace.
The
online medium of e-banking in the US actually started to develop in 1995, when
the Maryland Presidential Bank, an American bank, allowed bank accounts to be
opened online an in mid-2004, over 17% of Americans were already using online
electronic banking service (Driga, 2014). However in 2001, institutions like
the Bank of America, Citigroup and JP Morgan had an average of 20% of their
customer base on online transactions (Online banking – Wikipedia, 2017).
According
to a statistic conducted by Pew Research Center in 2013 on digital banking 51%
of US adults use digital banking to conduct their transactions while 35% of
cell phone users bank using their mobile phones (Pew Research Center survey,
20002013).
Statistically
the total number of digital banking users in the US is expected to reach 152.7
million users by 2018 (Statista, 2017). Electronic banking operations in the US
most recently, has been transformed by the internet which serves as a new
delivery channel for banking services that benefit both the banks and customers
due to its convenience and round the clock availability.
Nevertheless, electronic banking in Cameroon is at its infancy and rapidly growing. In Cameroon, until 1997, banks were only offering services through the physical branch. Now, with the changes in the banking environment, they are also offering electronic banking services. It was only in the 1997 that the first e-banking products were introduced.
The
country now has electronic services such as Automated Teller Machines (ATMs),
SMS banking, Internet banking, Point of Sales (POS) machines, and telephone
banking (Talla, 2013). The major banks in Cameroon are also investing a
significant sum of their capital towards digital banking and digitizing their
operations in order to meet up with international standards and also to gain
domestic competitiveness.
Top
banks in Cameroon like BICEC, Afriland First Bank, SGBC and Ecobank are paving
the way in digitizing their operations and providing and providing electronic
services to their customers.
The
most widely used e-banking medium in terms of service delivery to commercial
bank customers in Cameroon is the ATM service through which customers are
issued bank cards to redraw money from their account at their convenience
without necessarily going to the teller.
Other
forms of e-baking like Online banking/Internet banking are still on a slow pace
in terms of adoption by commercial banks in Cameroon as compared to other
develop countries or developing nations. The proliferation of electronic bank
cards and the mushrooming of automatic Teller Machines (ATM) in every nook and
cranny of cities is testament to the electronic craze that grips Cameroon
(Agnes F, 2007).
Banks
in Cameroon also face fierce competition from mobile telecommunication networks
like MTN and Orange Cameroon offering Mobile Money services and also
Microfinance institutions which take a large percentage of the unbanked
economy, leading to a financial inclusion rate of 47% and the banking sector
contributing to 15% while 32% constitutes the Mobile Money services and
Microfinance institutions according to the United Nations Capital Development
Fund (UNCDF, 2014).
Before the integration of electronic banking into banking operations used to take far longer time to conduct not forgetting the extensive of man power that has to be put in to perform a task that a computer can do in seconds.
Likewise
the provision of banking services where customers will have to deal with the
brick-and-mortar of the commercial banking institution each time they need its
services. Thus commercial banks in Cameroon are investing in in digital
technologies that improve their efficiency and effective in daily operations as
well as their service provisions to customers.
Thus,
this study is simply looking at the impact of electronic banking technologies
on customers’ satisfaction of commercial banks and also bringing in the aspects
of cost and profitability, security and fast transaction in adopting e-banking
in the institution.
1.2 Statement of the
Problem
Today's
bank customers seek more than price bargains. They want useful, dependable, and
reliable technologies. Many banks in Cameroon have exponentially embraced the
use of information and communication technologies in their service provision
causing a huge competition in the banking industries.
In
response, many financial institutions are directing their strategies towards
increasing customer satisfaction and loyalty through improved service quality
as it gives competitive advantage for banks by reducing operational cost and
providing best satisfaction of customer needs.
It
is normal that banks that don't offer electronic banking services may lose
their clients to their competitors. They are providing internet banking to
their customers to increase customers‟ satisfaction in banking service. Customers
in Cameroon are late adopters of the Internet and its applications with regards
to internet baking.
However,
issues like machine out of order, lack of sufficient alternative system which
substitutes ATM service when temporary problem happen in the machine, and
innovation, resistance to changes in technology among customers and service
providers as result of fear of risk creates doubts in the minds of customers
thereby affecting their level of satisfaction.
Because
of these existing problems, this study intends to fill in the gaps by examining
the effects of e-banking on customers‟ satisfactions in the major banks on
Cameroon’s economy.
The
application of e-banking in bank transactions is now a measure that is being
adopted by almost all commercial banks in Cameroon. One of the main phenomenons
this study focused on was to address the aspect of e-banking adoption on the
cost and profitability on banking institutions.
It is certain that the primary goal of private
commercial banks in Cameroon is to maximize shareholder’s wealth, and in order
to achieve this objective, bank management must be efficient and effective in
their operations in terms of consolidating between profitability and cost.
It
has been proven that integrating e-banking in banking operations leads to
increase efficiency and speed in terms of how transactions are conducted and
service delivered thus leading to increase profitability in the long run. But
at the same time significant investment will have to be put in order to achieve
a fully integrated e-banking sector, therefore the aspect of cost also comes in
here.
Cameroonian private banks such as Afriland First Bank and Commercial Bank of Cameroon are now expanding their business to other countries around the world. In many banks throughout the world, e-banking is now the focal area of bankers because it reduces the cost of doing transactions, attracts new customers, makes transactions faster than before, creates new markets, and enhances service quality.
In Cameroon, e-banking is a new industry and
consumer acceptance and use of e-banking is still limited. There is only a
vague understanding of factors influencing consumers’ adoption of e-banking.
Very little research has been undertaken in Cameroon on factors influencing the
consumer’s adoption of e-banking (Dobdinga, 2012), hence the need for a study
of this nature.
The
following question can therefore be asked: What are the factors that influence
the adoption of e-banking in Cameroon? An understanding of how demographic
characteristics, social influences, consumer perceptions and attitudes toward
e-banking influence the adoption of e-banking will enable banks to develop
solutions and plans to attract consumers and gain a bigger market share.
Lastly,
this study will evaluate the level of application of e-banking services in bank
transactions by the commercial banking institution while also looking at the
transition from traditional banking services to digital banking and what are
the recommendations and requirements that have to be put in place to ensure a
smooth transition from traditional banking to e-banking.
1.3 Objectives of the Study
The
study will be guided by the following research objectives.
1.4.1 Main Objective
- The main objective of this study is to examine the impact of e-banking on customers’ satisfaction.
1.4.2 Specific Objectives
- To determine how the transaction processing time of e-banking affects customers’ satisfaction.
- To investigate how the security of e-banking affects customers’ satisfaction
- To analyse how the accessibility of e-banking affects customers’ satisfaction
- To find out how the cost of e-banking affects customers’ satisfaction
