The Effect of Electronic Banking on Customer Satisfaction
Department: Banking and Finance
No of Pages: 53
Project Code: BFN6
References: Yes
Cost: 5,000XAF Cameroonian
: $15 for International students
Abstract
This
study was aimed at assessing the effect of electronic banking on customer
satisfaction in the banking sector of the Buea municipality.
This
study adopted a descriptive survey design and purposive sampling technique was
adopted to select a total of one hundred (100) customers of four (04) banks;
ECOBANK, BICEC, SCB and SGC.
Electronic
banking was captured using internet banking, ATMs and mobile banking and
customer satisfaction was captured using repurchase intentions and referral
intentions. Primary data was collected with the use of structured
questionnaires with an 81% response rate.
Descriptive
statistics and regression analysis were run with the use of SPSS 20.0
software. Findings revealed that
internet banking has a positive and significant effect on customer satisfaction
while both ATMs and mobile banking showed a positive and insignificant effect
on customer satisfaction.
It
was recommended that the bank should improve on the mobile apps and ATMs
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE
STUDY
In recent years the world has experience a
great advancement in technology with the vulgarization of the internet and this
has been a big tool for business enhancement. The banking sector is one of the
business sectors that take advantage of these modern facilities that offers the
internet.
Electronic
or internet banking involves the use of the internet and electronic gadgets to
offer some basic banking service such as; withdraw cash 24/7, international
payment and remittance, track personal banking transaction, request for online
statement, or even transfer deposit to a third party account.
The
swift changes in business operations in modern times require banks in Cameroon
to serve their customers electronically. This service allows customers to use
computers or any of their internet enabled devices to access account-specific
information and possibly conduct transactions from remote location such as at
home or offices quickly and successfully .
This
has breached the geographical and industrial barriers, creating new products,
services and market opportunities (Liao and Cheung, 2002). This is seen as
banks deliver their services and products better, faster, and cheaper.
It
enables customers to browse essential bank products and services seven days a
week through their personal computers or smart phones, which has gone a long
way to reducing customers waiting time for banking transactions.
E-banking
promotes paperless/cashless transactions. It comes with a number of rights,
responsibilities and fees as well.
There
is a steady increase in internet banking acceptance since the year 2000 (Liao
and Cheung, 2002).
As
Internet access exceeded 1.596 billion people globally in the first quarter of
2009, an increasing number of banks worldwide have increased their business
investments in Internet technology driven by the expectation that the internet
technology would provide better opportunities to establish a distinctive
strategic position compared to other traditional forms of banking services (Evans
and Wurster, 1997).
There
are three basic types of internet banking services, the informational,
communicative and transactional Internet banking services (Bank Indonesia,
2004; Reserve Bank of India, 2007). Informational internet banking is a basic
type of Internet banking that provides comprehensive bank products and services
information (Bank Indonesia, 2004; Reserve Bank of India, 2007).
It
provides background and history of the bank, organizational structure,
affiliated entities in the banking group and available corporate, retail and
specialized banking facilities (Bank Indonesia, 2004; Reserve Bank of India,
2007).
This
type of Internet banking does not involve any execution of transactions (Bank
Indonesia, 2004; Reserve Bank of India, 2007). The bank provides Internet users
with basic information through hyperlinks (Bank Indonesia, 2004; Reserve Bank
of India, 2007).
Although
the security risk associated with informational Internet banking services are
relatively small (The Office of the Comptroller of the Currency, 1999), the web
site can still be susceptible to unauthorized modifications. Adequate controls
must therefore be available to prevent unauthorized modifications (The Office
of the Comptroller of the Currency, 1999).
This is mean for marketing purposes only and there is no connection to the bank’s main computer system. Communicative Internet banking is the second type of Internet banking that allows customers to have some interactions with bank system such as to submit their applications and queries for different Internet banking services, but it does not allow money transactions between accounts (Reserve Bank of India, 2007).
Similar
to informational Internet banking, it does not involve execution of
transactions (Bank Indonesia, 2004; Reserve Bank of India, 2007). Since the web
server of communicative Internet banking is linked with the internal network of
a bank, it is at a higher security risk compared to informational Internet
banking services (The Office of the Comptroller of the Currency, 1999).
Adequate
controls have to be available to prevent unlawful intrusion to the internal
network of a bank (The Office of the Comptroller of the Currency, 1999). Virus
detection is also an important issue for the communicative Internet banking
services (The Office of the Comptroller of the Currency, 1999).
Transactional
Internet banking is the third type of Internet banking that allows the
customers to transfer funds, make payments, and update personal information
(The Office of the Comptroller of the Currency, 1999).
The
server and the internal network of the bank’s outsourcers pose the highest
security risk and deserve the strongest controls (The Office of the Comptroller
of the Currency, 1999). Security and safety, confidentiality and privacy issues
of the customers‟ accounts are critical.
The
accuracy and integrity of transaction records need to be ensured at all time
(Bank Indonesia, 2004; Reserve Bank of India, 2007). Traditionally, banks have
been in the forefront of harnessing technology to improve their products and
services.
1.2 STATEMENT OF THE
PROBLEM
All banks compete with each other to attract their customers in different ways through providing convenient, accessible and acceptable services or products to their customers.
One of the most important of these services is the electronic
services that have contributed significantly facilitated banking transaction
but has increase the distance between costumers and the bank.
E-banking
was adopted by banks so as to improve their service delivery, decongest queues
in the banking hall, enable customers withdraw cash 24/7, aid international
payment and remittance, track personal banking transaction, request for online
statement, or even transfer deposit to a third party account.
Despite
the effort of banks to ensure that customers reap the benefits of e-banking,
the bank is met with complaints from customers as regards, malfunctioning
Automated Teller Machines (ATMs), network downtime, online theft and fraud,
non-availability of financial service, payment of hidden cost of electronic
banking like Short Message Services (SMS), for sending alert, mandatory
acquisition of ATM cards, amongst others.
This
study is aimed at finding out the reason why these problems occur and how it
affects customer satisfaction, and then to make recommendations based on the
outcome of the study
1.3. RESEARCH QUESTIONS
The
study seeks answers to the following questions:
- What are the effects of internet banking on customer satisfaction in banks in the Buea municipality?
- What are the effects of Automated Teller Machine (ATM) on customer satisfaction in Banks in the Buea municipality?
- What are the effects of mobile banking on customer satisfaction of Banks in the Buea municipality?
1.4. RESEARCH OBJECTIVES
The
General objective of the study is to examine the effects of electronic banking
on customer satisfaction. To achieve this general objective, the following
Specific objectives are considered;
- To establish the effect of internet banking on customer satisfaction in banks in the Buea municipality.
- To determine the effect of automated teller machines on customer satisfaction in banks in the Buea municipality.
- To evaluate the effect of mobile banking on customer satisfaction banks in the Buea municipality.
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