Study Of Customer Satisfaction In The Banking Sector

Project and Seminar Topics with material for Banking and Finance

Study Of Customer Satisfaction In The Banking Sector (Charles)


Abstract


This study was carried out to examine customer satisfaction in the banking sector using Access bank, Kubwa, Abuja as a case study. The study was specifically carried out to determine the extent the adoption of E-banking has approved customer satisfaction in the banking sector, ascertain the extent service quality influences customer satisfaction in the banking sector, determine the extent bank staff attitude influences customer satisfaction in the banking sector, and ascertain the strategies required to improve customer satisfaction in the banking sector. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of the entire staff of Access bank, Kubwa, Abuja. In determining the sample size, the researcher purposefully selected 57 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables. While the hypotheses were tested using Pearson correlation statistical tool SPSS v23. The result of the findings reveals the extent service quality influences customer satisfaction in the banking sector is high. The findings of the study further revealed that the strategies required to improve customer satisfaction in the banking sector includes: improving banking network, improving the security of the E-banking system, minimizing service charge on mobile transactions, and shaping the attitude of bank staff. Therefore, the study recommends that as the general feeling (overall satisfaction) was that banks sold poor quality services and products, banks should spare no efforts to take stock of their services and products as well as their operations in general to see where they are found wanting. This can be achieved through periodic customer satisfaction survey. To mention but few.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background of the Study

Satisfaction is a crucial concern for both customers and organisations including banks. Satisfaction is a subjective concept and therefore difficult to determine, (European Institute of Public Administration, 2008). It depends on a myriad of factors and varies from person to person as well as product to product. Some of the main concepts of satisfaction in the literature include value, quality and satisfaction. Value according to Zeithaml (1988) is the importance attached to services based on their usage and the amount paid in exchange. Quality on the other hand, is the meeting of the needs and expectations of customers, (Parasuraman et al. 1991). Oliva et al (1992), Fecikova (2004) and (ISO 2005) are of the view that satisfaction is the meeting of the needs or wants of customers. From the foregoing, it can be seen that all these concepts are the same and are used interchangeably.

Titko and Lace (2010) accentuate that the competitive power and survival of a bank lies in the degree of its customer satisfaction. Banks therefore pay particular attention to customer satisfaction, (Kattack and Rehman 2010). According to Stafford (1996), due to the fact that banks sell undifferentiated products, the only effective tool they can use to survive in the market is the quality of service. Bowen and Hedges (1993) claim that banks that offer very high quality services have a competitive advantage because the benefits of improved quality of service are large market shares, increased in profits and increased in customer retention. In addition, Zeithmal et al (1996) submit that the reputation of the banks is enhanced, new customers are captured and there is an increase in financial performance. Yeung et al (2002) on the other hand intimate that customers bring new customers to the bank through word- ofmouth and thereby reducing the cost of marketing. Sureshchandar et al (2003) think otherwise. They posit that the quality of service and satisfaction are the most important indicators of cementing the relationship between the organisation and its customers. Satisfaction does not only emanate from the services provided but also from other important factors.

Customer Satisfaction is perception of customer about a company and in relation to whether his or her expectation is met or not (Praline, 2007). Over the years a feeling of discontentment among customers and users of bank services developed gradually with regard to irregular rendering of banks statement delay in clearing and crediting changes lodged, failure to receive prior guidance and endless queues at the banking hall and numerous other frustrating and organizing experiences of customers generated dissatisfaction with the banks.

The profits declared annually by the bank generate some resentment to their customers and other uses of the service who believed nightly or through that the service they received from the banks are mostly inadequate and ineffective. Many of the bank service in Nigeria need to be received. The review should be seen as an attempt by the banks to determine the most effective approaches for satisfying customers needs. For instance, the introduction of computer technology was to enhance the quality of banking services to their customers but the rate of effective utilization of computers still remain very low.

Many banks have also introduced e-banking, value card credit card, and (ATM) debit card so as to eliminate necessary queues and facilitate easy transaction. Many banks also invested enormous capital in the construction of magnificent high head office complexes; area offices and branches to provide suitable working condition for staff and customers, and a the same time enhancing their corporate image. The impact of customer satisfaction in banking industry cannot be overemphasized, especially in the face of stiff competition, obtainable in today’s business world. Hence the need to study the subject matter: The study of customer satisfaction in the banking sector.


1.2 Statement of the Problem

The main issue being faced by the Nigerian banks is that most of them are still being driven under the operation of the outdated programs. Another issue is the lack of qualified and experienced workforce which eventually explains the low quality service delivery to their customers (Ahmida Ali, 2011). Owing to this reason, most banks have developed a method to tackle customer problems. This includes the provision of a suggestion box at the banks’ foyer or entrance and the carrying out of a survey with the aims of realizing customer satisfaction. This indicates that to hold the customers’ attention and loyalty, it is imperative for banks to set up suggestion and complaint sections like hotlines, 24-hour call services as well as online services (Ahmed Freed, 2012). In the present study, study factors including service quality, security, and customer loyalty are adopted from prior literature. Customer satisfaction is referred to as the feeling or attitude of the customer towards a certain product or service after using such product or service. It is the major result of marketing activity and it serves as a connection between different phases of customer buying behavior; for example, when customers are satisfied with a specific service following its use, they are more likely to repeat their purchase and attempt at trying out the service line extensions (East, 1997). In addition, although customer satisfaction has long been the focus of the local press, there is little evidence revealing that it plays a key role in Nigerian local banking market. The significance of customer satisfaction in banks vary from one country to another owing to reasons such as social, economic, political and technological environmental factors. Factors relating to customer satisfaction are significant in some countries but are not in others and this relates to the banking services in Nigeria.

Moreover, the research concerning service quality in the conventional financial system has been carried out by academicians in the past and hence, it is not a new aspect (Le Blanc & Nguyen, 1999).  According to Parasuraman, Berry and Zeithaml (1985), several researches reveal that service quality is an important strategy in gaining success and excellence in every organization. Similarly, Othman and Owen (2001) stated that good service quality is the basis of every organization’s success and this includes the service sector such as the financial institutions. Hence, these institutions are not only facing strong competitions from their counterparts but also from conventional financial institutions (Naser, Jamal & Al-Khatib, 1999).  Moreover, banking institutions are facing the challenge of customer satisfaction of in light of their service in several situations; impolite service at the counter, no enough employees to attend customers, busy telephone lines and limited banking times (Abdullah, 1996). This is particularly true in Nigerian, a developing country where the banking culture lacks structure. Therefore, the Nigerian banking institutions are required to expend more efforts and to carry out research to direct banking services in the attainment of customer satisfaction.


1.3  Objectives of the Study

The main purpose of this study is to investigate on the study of customer satisfaction in the banking sector. Specifically, the study will;

  1. Determine the extent the adoption of E-banking has approved customer satisfaction in the banking sector.
  2. Ascertain the extent service quality influences customer satisfaction in the banking sector.
  3. Determine the extent bank staff attitude influences customer satisfaction in the banking sector.
  4. Ascertain the strategies required to improve customer satisfaction in the banking sector.

1.4 Research Questions

The following questions have been prepared for the study:

  1. What is the extent the adoption of E-banking has approved customer satisfaction in the banking sector?
  2. What is the extent service quality influences customer satisfaction in the banking sector?
  3. What is the extent bank staff attitude influences customer satisfaction in the banking sector?
  4. What are the strategies required to improve customer satisfaction in the banking sector?

1.5 Research Hypotheses

  • HO1: There is no significant relationship between customer satisfaction and E-banking.
  • HO2: There is no significant relationship between customer satisfaction and service quality.
  • HO3: There is no significant relationship between customer satisfaction and staff attitude..

1.6 Significance of the Study

The study will be useful to players in the banking industries as well as students as they utilize the findings of this essay.

The firms in the banking industry who may wish to sue the findings as a basis for formulating policies aimed at improving customer satisfaction will really find this essay useful as they utilize the findings.

Students as well as private individual who may wish to use this essay as a reference material or a spring board to undertake their own work would find this essay really significant.


1.7 Scope of the Study

The scope of this study is boarded on the study of customer satisfaction in the banking sector. Hence, the study will be delimited to Access bank, Kubwa, Abuja.


1.8 Limitation of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed.

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.


1.9 Definition of Terms

Customer Satisfaction:

This is a measure of the extent to which a customer‘s needs are met.

Banking Sector:

This is financial intermediaries are party to a transfer of funds from the ultimate saver to the ultimate user of funds.


1.10 Organization of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter (chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on customer satisfaction in the banking sector using Access bank, Kubwa, Abuja as a case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was to examine customer satisfaction in the banking sector using Access bank, Kubwa, Abuja as a case study. The study was specifically carried out to determine the extent the adoption of E-banking has approved customer satisfaction in the banking sector, ascertain the extent service quality influences customer satisfaction in the banking sector, determine the extent bank staff attitude influences customer satisfaction in the banking sector, and ascertain the strategies required to improve customer satisfaction in the banking sector.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were staff of Access bank, Kubwa, Abuja.


5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

  1. The extent the adoption of E-banking has approved customer satisfaction in the banking sector is high.
  2. The extent service quality influences customer satisfaction in the banking sector is high.
  3. The extent bank staff attitude influences customer satisfaction in the banking sector is high.
  4. The strategies required to improve customer satisfaction in the banking sector includes: improving banking network, improving the security of the E-banking system, minimizing service charge on mobile transactions, and shaping the attitude of bank staff.

5.4 Recommendation

Based on the responses obtained, the researcher proffers the following recommendations:

  1. As the general feeling (overall satisfaction) was that banks sold poor quality services and products, banks should spare no efforts to take stock of their services and products as well as their operations in general to see where they are found wanting. This can be achieved through periodic customer satisfaction survey.
  2. Banks should make it easier for their customers especially the aged, illiterates and others (agriculture and construction workers) to access their services and products easily.
  3. More branches must be opened. Also more Automated Teller Machines (ATM) should be installed at vantage points such as stores and post offices. Internet banking should be encouraged.
  4. Customers should be given the opportunity to put forth their problems and immediate solution to be made available.

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