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 a 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 experienced 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 offer the internet. Electronic or internet banking involves the use of the internet and electronic gadgets to offer some basic banking services such as; withdraw cash 24/7, international payment and remittance, track personal banking transactions, request for an online statement, or even transfer the 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 a 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 smartphones, 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, 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 website 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 meant 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 systems 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 the execution of transactions (Bank Indonesia, 2004; Reserve Bank of India, 2007). Since the webserver 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 into the internal network of a bank (The Office of the Comptroller of the Currency, 1999). Virus detection is also an important issue for 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 at 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 increased 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 to withdraw cash 24/7, aid international payment and remittance, track personal banking transactions, request for online statements, or even transfer deposits 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 the hidden cost of electronic banking like Short Message Services (SMS), for sending an 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:

1. What are the effects of internet banking on customer satisfaction in banks in the Buea municipality?
2. What are the effects of Automated Teller Machine (ATM) on customer satisfaction in Banks in the Buea municipality?
3. 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;

1. To establish the effect of internet banking on customer satisfaction in banks in the Buea municipality.
2. To determine the effect of automated teller machines on customer satisfaction in banks in the Buea municipality.
3. To evaluate the effect of mobile banking on customer satisfaction banks in the Buea municipality.

Further Readings

AN EVALUATION OF THE EFFECTS OF ELECTRONIC BANKING ON CUSTOMER SATISFACTION IN CAMEROON CASE STUDY: UBA BANK, LIMBE