Abstract

The purpose of this thesis is to access The Effect on effect of E-banking on customer satisfaction Limbe in the Municipality. Customer becomes a center for all banking activities due to increase competition for greater market share. Focusing on customer satisfaction has been the key to increasing service quality according to customer expectation in the banking sector. Suggested that the level of customer satisfaction is an indication of the organization has the ability to meet customer desires.

Therefore, organizations must become better in their services to meet the customers’ needs and requirements. the work is aimed at accessing the relationship that exist with E-banking and customer satisfaction The primary data was collected through questionnaires from customers of UBA LIMBE in a five likers scale ranging from strongly agree (SA) to strongly disagree (SD. Customer satisfaction is regarded as an invisible asset. As hypothesis was further tested. Finally, this research recommended much work needs to be done in the area of creating awareness of the availability of E-banking services.

CHAPTER ONE

INTRODUCTION

1.1 Background of the study  

In recent years E-banking appeal as well as its product development is rapidly growing. And the global acceptance has strongly encouraged its penetration. The success of E-banking is contingent upon reliable and adequate data communication infrastructure. Therefore, it is efficient for banks to invest  in  online transactions  through  the  creation  of networks.   However,  there  has  been  a  mix-up  between  electronic  banking  and  internet banking. The fact is that internet banking is subsumed in electronic banking. Banking has come a long way from the time of ledger cards and other manual filing systems. Most banks today have electronic systems to handle  their  daily  voluminous tasks of  information  retrieval,  storage  and processing. Irrespective of whether they are automated or not, banks by their nature  are continually  involved  in  all  forms  of information  management  on  a  continuous basis. The computer is of course an established tool for achieving a competitive edge and optimal resource allocation.  The  most obvious application  of  computers in  the banking  industry  is  in  the  area  of  customer services,  information  management  and control.

The revolution of information technology has influenced almost every facet of life, and the banking sector a lot more so. The financial service industry has recently been open to historical transformation. Electronic development (E-development) is emerging and advancing rapidly in all areas of financial intermediation and financial markets. Today we have quite a number of eE-development models that include E-finance, e-money, E-banking, E-brokering, and even E-supervision (Lustsik, 2003).

The rapid changes in business operations in contemporary times in the form of technological improvement require banks in Cameroon to serve their customers electronically. Traditionally, banks have been in the forefront of harnessing technology to improve their products and service delivery. The banking industry and its environment in the 21stcentury are highly complex and competitive, hence the need for information and communication technology to take center stage in the operations of banks (Steven, 2002). The 21st century has witnessed dramatic transformations in the financial sector as advances in information technology have created new ways of handling financial transactions through various E-banking platforms.

In recent times, electronic banking has spread rapidly all over the globe. According to Onay(2008), the increased adoption and penetration of internet has recently redefined the playground for retail banks. In Cameroon, all banks are making greater use of E-banking facilities to provide better services in order to excel in the competitive Cameroonian banking industry.  The spread of E-banking has also greatly  benefited  the  ordinary customer  in  general  and the corporate  world  in particular.

Consequently, electronic banking (E-banking)  has been the greatest  challenge to  the  banking  industry  going  by  the sophistication  and  volume  of  fraudulent balance and account activity enquiries. With signature and image verification systems, the time taken to offer typical  cashier  services  like  receiving  and paying  out  of  cash  is  minimized. Also, with the  advent  of  automated  teller machines  (ATM),  banks  are  able  to  serve customers outside the banking hall all round the clock.

All the banks considered observed that cost reduction and enhanced ability to deal with customers were drivers of extreme importance. The desire to reduce both operational and administrative costs has driven banks to the electronic world. However, cost reduction is only realizable with an increase in consumer adoption. E-banking is the use of internet and telecommunication networks to deliver automated Teller  Machines and telephone banking which are the initial cornerstones of electronic finance, the increased adoption and penetration of Internet has added a new distribution channel to retail banking: Internet/Online-banking. E-banking has gained worldwide acceptance as a new delivery channel for performing various banking transactions. It provides the opportunity to the customers to conduct banking transactions at their convenience.  Generally,  the  automation  of  banks makes  transaction  and  data  processing  very easily  accessible  for  quick  management decision making. This has led to another level of benefit which has ushered in what is today referred to as electronic banking. Electronic banking  helps  the  banks  to  speed  up  their retail  and  wholesale banking  services.  The banking  industry  believes  that  by  adopting the  new  technology, e-banking,  the  banks will  be  able  to  improve  customer  service level  and  tie  their  customers  closer  to  the bank. According to Chang, (2003) e-banking contributes significantly to the distribution channels of banks such as automated teller machine (ATM), Phone –banking, Tele-banking, PC-banking and now internet banking (Chang, 2003). In addition, transfer of funds, viewing and checking account balances, paying mortgages, paying bills and purchasing financial instruments and certificates of deposits processes have improved significantly as a result of internet banking (Mohammed, 2009). This implies that e-banking has resulted in efficiency in service delivery in the banking sector because customers can transact business from one side of the country to another and from both long and short distances.

E-banking is critical in the transformation drive of banks in areas such as products and services and the level of satisfaction customers derive in using these product and services. Thus, it is seen as a valuable and powerful tool in the development, growth, promotion of innovation and enhancing competitiveness of banks (Kamel, 2005).Given the significant role of e-banking in the developmental drive of banks, information technology has been found to lead to improvement in business efficiency and service quality and hence to attract customers and retain them (Kannabira and Narayan, 2005). This shows that the delivery of efficient and quality service is facilitated by information technology. Similarly, Christopher(2006) indicated that E-banking provides an important channel to sell products and services of banks and is perceived to be a necessity for banks to be successful. Therefore, service quality and efficiency in the banking industry has increased tremendously in Cameroon due to the integration of information technology into banking operation. The present study seeks to investigate the extent to which the e-banking concept has influenced customer satisfaction in Cameroon.

1.2 Problem statement

Cameroon has experienced stable economic growth over much of the past decade. Before the independence of the country in 1960, the banking system in Cameroon was dominated by foreign banks. After independence, foreign financial institutions were French banks, which were there to finance French investments in the country. Subsequently, the government started to involve itself in foreign banks and acquired partial ownership of BICIC, BIAO, SGBC and Credit Lyonnais. This continued until 1987 when a financial crisis occurred in the country. The crisis resulted in rising prices in Cameroon, trade deficits, and loss of evolution and health of each bank, depending on whether it was a foreign or domestically owned institution.

Many financial institutions closed while others changed ownership. Several other banks have been established in the country since then, thus an increase in the number of banks in Cameroon. With the emergence of new technology, all sectors are introducing a variety of innovative services; this is also the case with the banking sector which is now offering customers a wide range of electronic services. This has eventually increased the level of competition between banks.

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. The country now has electronic products and services such as Automated Teller Machines (ATMs), Internet banking. 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 the effect of Electronic banking on customer satisfaction.

As aforementioned, the research is therefore structured to provide answers to the following questions:

1. To what extent does E-banking service affect customer satisfaction?
2. To what extent is the level of awareness of E-banking services among customers?
3. How has the introduction of internet banking and ATMs affected customer satisfaction?

Read More: Banking and Finance Project Topics with Materials