Abstract

This study investigates how satisfaction with customer communication in the bank will influence customer satisfaction with the bank as a whole. The problem investigated is the gap between customers’ expectations of customer communication delivery and actual communications delivery to customers. The study hypothesises that there will be significant differences in the way banks deliver customer communication, from the way customers expect it to be delivered, and that satisfaction with the former will lead to customer satisfaction with the bank as a whole. The study seeks answers to three key research questions:

To what extent are banks meeting customers’ communication expectations at the bank? How satisfied are customers with communications delivery in their bank? How much does satisfaction with bank communication contribute to customers’ satisfaction with the bank as a whole? These were so as to attain the following objectives: Find out to what extent customer expectations of communications in their banks are being met;

Find out how satisfied bank customers are with customer communications in their banks, and Find out if satisfaction with customer communications contributes to their satisfaction with the bank as a whole. Findings showed that although bank customers perceived that banks were meeting their expectations of communications; customers were less satisfied with some aspects of customer communication than others.

The key areas of bank communications with which customers were most dissatisfied were found to be the speed and timeliness with which bank communications were delivered, as well as the ease of access to bank information. Findings also showed a strong association between satisfaction with customer communication, and satisfaction with the bank as a whole. The study recommends a strong focus for banks on customer communication, as a means of building customer loyalty. The research report is presented in five chapters: Introduction, Literature Review, Methodology, Data Analysis and Discussion, and Conclusion, Recommendations and Suggestions for further study. A bibliography is included, as well as an Appendix.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The banking system is facing challenges with stiff competition and advancements in technology (Uddin, Khan & Farhana, 2014), in addition to the credit crunch that is rocking the banking systems in many countries in the world. On October 25th, 2014, western media were saturated with news that twenty-four (24) European banks had not made it through financial stress tests. The credit crunch affecting western nations is not without implications on banks in Cameroon. As a result of the universal credit crisis, the degree of trust that customers hold for their financial service providers, especially banks, has been on the down turn.

Customers’ attitudes towards their bankers are tending to change by the day. Customers are faced with the choices of having to move from one banker to another, or diversify their banking activity in order to lower exposure to further financial risks. As Ernst and Young (2010) have reported, one of the most profound effects of the credit crunch is likely the staggering nosedive in the amount of trust that bank customers enjoyed previously.

Just like the economies of the West, in Cameroon’s economy, banking has suffered from the crisis of the mid 80s that resulted over a long period of structural adjustments. Many banks sank in the late 80s and during the decade that followed. This was the case of the Cameroon Bank Corporation (SBC) which had a split-winding transfer in 1989 with the transfer of compromised debt and a merger of good assets with the Commercial Bank of Credit Lyonnais (SCB-CL).

In the same year, the liquidation and closure of the Rural Development Fund (Fonadis), The Development Bank of Cameroon (BCD), Banque Paribas (Paribas), Bank of Cameroon (Cambank) and the split-winding of the Bank of Credit and Commerce Cameroon (BCCC) were discussed, with the transfer of assets at Standard Chartered Bank Cameroon (SCBC).

Given this situation, building personal relations through customer communication can be helpful. In a study by the Ernst and Young in 2010, one-third of respondents rated personal relationships as very important. In a difficult economic environment like ours, it is essential that banks maintain strong and mutually beneficial relationships with their customers. These personal relationships can only be built through communication between the banks and its customers.

The International Association of Business Communicators (IABC) Excellence Study provides evidence that there is a correlation between achieving short-term communication effects and maintaining quality long-term relationships (Dozier & Grunig, 1995). Hon & Grunig (1999) opine that good communication shapes the attitudes of both (bank) mangament and (bank) publics in this case bank customers), and keeps them in good relationship.

1.3 Problem Statement

According to Drew (1980, p. 4), research is conducted to solve problems. A problem can be likened to a question, the answer to which is the purpose of the research. Kerlinger (1973) defines a problem as an interrogative statement that establishes the relationship between two or more variables. Nachmias & Nachmias (1970) define a research problem as an intellectual stimulus that requires a response in the form of a scientific investigation. Bwisa (2008) says a research question is a gap in knowledge that needs to be filled.

The problem statement ‘‘describes the content for the study and it also identifies the general analysis approach’’ (Wiersma, 1995, p. 404), or ‘‘is the issue that exists in the literature, theory, or practice that leads to a need for the study’’ (Creswell, 1994, p. 50), and when stated effectively should answer the question as to why that particular research needs to be conducted (Pajares, 2007). The paragraphs that follow discuss the problem under investigation, and justify why the problem requires investigation.

The banking sector in Cameroon is expanding rapidly, given the sheer number of bank branches that are spreading their tentacles in every Region. Despite this, the rate of access to banks has remained low, estimated by the National Institute of Statistics (NIS) at about 8% (as cited in Mbella, G. 2010, September 9), including Micro-finance Institutions (MFIs), as compared with 100% in countries like France. In fact, a lot more of financial transactions, according to the same source, are taking place out of the formal banking confines. BEAC and COBAC have attributed this low access rate to a number of factors, including the non-response of banks to the specific needs of some customers, including communication needs.

Following growth in MFIs, competition in the banking sector and the advent of mobile money, e-banking and ICTs in service delivery in banking in Cameroon, there are indications that the rate of access to banking has improved significantly. However, the prediction that new channels of communication would change business communication may well be facing a setback in the banking sector in Cameroon.

Despite the explosive growth in newer channels of communication—Short Message Service (SMS), e-mail, Automatic Teller Machines (ATMs), Mobile Money, Visa Cards, I-Cards and Pension Cards, there remains a gap between how banks actually communicate with their customers, and how customers actually want banks to communicate to or with them.

Although the development of new media and ICTs have improved the delivery of customer service in banking and consequently improved customer satisfaction with bank services lately, such satisfaction may only be functional. It is still unclear whether such improvements have led to the ultimate aim of any customer relationship scheme— customer loyalty. Given that a few unsatisfied customers could be a dangerous threat for other undecided customers, and given the increase in the degree of competition in the financial sector in Cameroon today, it is therefore important to examine the contribution that customer communications brings to the satisfaction which customers have when they use bank services.

Moreover, studies on customer satisfaction with bank services as a whole, let alone on satisfaction with bank communications in Cameroon are rare, if any at all. Most of the existent studies in this area have been carried out in other countries like Nigeria, Ghana, India, Europe, Australia and the Americas. This study is intended to fill the blank spaces in this regard.

These problems require investigation for obvious reasons. Firstly, the effects of ineffective communications can be very costly not only to the customers, but also to the organisation, (Caldwell, 2014). Secondly, to fill the gap in research in the area of customer communications in Cameroon’s banking sector.

Thirdly, bank customers have a high stake in their banks. This stake is their money, which in quite a good number of cases, is their life savings. Knowing about the progress on their savings, and getting information about changes in bank services is therefore very important in planning not only their financial transactions, but most other aspects of their daily lives which depend on their money.

Fourthly, communications is an integral component of decision making in most organisations, including banks. Mohr & Sohi (1995) argue that in organisations, poor decisions are often attributed to a lack of information, and rarely to too much information. Moreover, banking services are not the only services provided by banks to their customers. In today’s fast changing world, getting information to customers as quick as possible has implications for business leverage, profitability and loyalty.

1.4 Research Objectives

This study seeks to attain the following objectives:

1. To find out to what extent customer expectations of communications in their banks are being met
2. To find out how satisfied bank customers are with customer communications in their banks
3. To find out if satisfaction with customer communications contributes to their satisfaction with the bank as a whole

1.5 Research Questions

The question the researcher focuses on addressing can be used for outlining the research parameters of the dissertation (Bell, 2005). Schmidt and Strickland (1998) reported that satisfaction with customer communication is one of the most important aspects often measured in satisfaction surveys. Hoang (2011) argued that communication has a direct impact on customers’ satisfaction with a service by helping them to better understand messages, and building and sustaining relationships that impact them.

Also, according to Churchill, Suprinant and Oliver (1980 as cited in Yeboa, 2013), customers gauge their satisfaction with a service by comparing the service which they received with the service they expected to receive. Based on these arguments, and based on the objectives for the study, the following research questions have been formulated to guide this study:

1. RQ1: To what extent are banks meeting customer communication expectations of their customers?
2. RQ2: How satisfied are customers with communications delivery in their bank?
3. RQ3: How much does bank communication contribute to satisfaction with the bank as a whole?

1.6 Research Hypotheses

According to Bell (2005), it is not unusual for a research project to begin with a hypothesis. According to Kelinger (1973) a hypothesis establishes the relationship between research variables through a conjectural statement or statements. Verma and Beard (1981) have stated that a hypothesis remains a tentative proposition that can only be verified through subsequent investigation. The essence of testing a hypothesis is to test the relationship expressed by the hypothesis. Denscombe (2002) stated that: ‘the possibility of proof/disproof is built into the whole notion of an hypothesis’ (p. 31). It takes the form ‘if (theory X) is true, then (under conditions Y) we might expect to find (result X)’. The hypotheses for this research include:

H1: There will be statistically significant differences between customer expectations of communication delivery, and actual delivery

H2: There will be a statistically significant association between satisfaction with customer communication and satisfaction with the bank