Abstract

Despite the stringent evaluation and monitoring strategies put in place by microfinance and banks to ensure all satisfaction of their customers as long as bank services are concerned, there are still gaps to fill as customer satisfaction is concerned. This study was conducted to investigate the impact of e-banking on customers’ satisfaction in the banking industry case of Eco bank Buea branch.

The study was built around three specific objectives/research questions, hypotheses stated in both null and alternative form. This study employed a survey research design with a total population of 50 customers of Eco Bank Buea branch.

The study also makes use of purposive sampling techniques, using a questionnaire as an instrument for data collection. The study found out that E-banking services are very expensive to use, the bank provides training sessions to train their customer as regards the use of e-banking, e-banking transactions are fast and reliable.

The results show that the p-values obtain for E-banking (0.002), security/privacy (0.001) Access to e-banking services (0.004), and for the regression coefficients are also lower than the alpha level of significance of 5% specified in SPSS for the analysis except for E-banking, security/privacy, access to e-banking service.

The study concludes that e-banking has a significate effect on customer satisfaction in the banking industry.  Hence this study recommends that the management should Increase training their customer on e-banking service by so doing it will go a long way to increase their effectiveness and efficiencies in turn high customer satisfaction.

CHAPTER ONE

INTRODUCTION

1.1 Background to Study

Telephones and Televisions are used daily by many; alongside these media the internet has become more important and useful for an increasing number of people. The internet has existed since the early 1960s but most of that time it was only accessible by the government and for scientific purposes.

By the mid-1990s, as web interfaces improved, they became available to the public and E-commerce became possible by the early 1990s when the internet was open to commercial use. E-banking on a 24/7-time scale has become very important to all its users to trace and track their transactions as they occur and to ensure their account status and stability.

Thus, it has become very important to have banks that can serve, support, and work with e-commerce companies and consumers 24/7. They provide banking services and systems that connect to e-commerce websites allowing customers to check their transactions online, allow businesses to attain their goals, and allow customers to move money around to accomplish their financial transactions.

Electronic banking, therefore, is a process by which a customer may perform banking transactions electronically without visiting a financial institution. Electronic banking (e-banking) is the newest delivery channel of banking services.

The definition of e-banking varies amongst researchers partially because electronic banking refers to several types of services through which a bank’s customer can request information and carry out most retail banking services via a computer, television, or mobile phone.

Burr, 1996, for example, describes it as an electronic connection between the bank and customer in order to prepare, manage and control financial transactions. The latest update on banking involves Digital Account Opening, P2P payments, Video Collaboration/Marketing, Cloud Computing, and Application Programming Interfaces (APIS).

Banks operate in a strategic information system environment which indicates that they are information-intensive and highly dependent on information technology as their core technology. The development in information technology has had an enormous effect on the development of more user-friendly banking services and increased the transaction and communication speed between banks and customers.

The revolution of information technology in the banking industry began in the early in1970s, with the introduction of the Automated teller machine (ATM) which was first installed by Barclays Bank in the United Kingdom (UK). ATM allows customers to deposit money, withdraw cash, request a balance, and pay bills at any time. ATM services not only provide convenience for customers but also decrease operating costs for the bank.

The next technology developed by banks was telephone banking which was firstly introduced by Seattle First National Bank in the United States (US) in the late 1970s. Telephone banking is more cost-effective than ordinary branches and the process increases customer convenience as well as expands access to a wide variety of services for customers. However electronic banking lacks visual verification and customers cannot perform self-banking services.

Internet banking emerges in the 1990s and was first launched by the Wells Fargo bank in the US. There is a wide agreement that the channel has had a substantial impact on the bank markets. From the viewpoint of the bans, internet banking helps banks to maintain economic growth through reducing the operation and fixed costs updating.

Moreover, when e-banking was introduced took steps to Implement e-banking services in the mid-1990s, many consumers worldwide were hesitant to conduct monetary transactions over the web.it took widespread adoption of e-banking over the world such as Amazon.com and eBay before the idea of e-banking become practical and adoptable in some of the society.

Electronic banking in Cameroon is fast catching up with the modernizing pace. The adaptation of Digital Account Opening, P2P payments, Video Collaboration/ Marketing, Cloud Computing, and Application Programming Interfaces (APIS) is rapidly consuming banks in Cameroon. Though it is relatively new in Cameroon the craze that it has built for the past years in most of the developed countries has made Cameroonians to acquainted with the products as a whole.

 1.2. Problem statement

The use of technology forms the backbone for better results in banking. This is articulated in the HSBC report of 2000, which stated that benefits from technology are more than three-time is cost. Today’s banking situation demands continuous innovation in order to meet the yearnings and aspirations of the ever-demanding customers. Hence banks need to roll out new products and services quickly and effectively, using the latest cutting-edge technology

In this light, E-banking was adopted by banks so as to improve their services 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 an online statement, 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, to malfunctioning of Automated Teller Machines (ATMs), Network downtown, 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, non-acceptability of Cameroonian cards for international transaction amongst others.

At the end of everything, the main problem here is: are customers really enjoying these services given the above-outlined short-comings?  Related to this problem, empirical evidence implies that customers’ patronage for and reaction to a particular product depending on their level of understanding of what the product can do and what they stand to benefit from there. In this connection, it is relevant to find out the customer’s perception of e-banking.

1.3 Research question

The main question was what the effect of E banking on customer satisfaction in the banking industry case of Eco bank Buea?

Specific Research Questions

1. What is the impact of security/privacy on customer satisfaction in the banking industry case of Ecobank Buea?
2. What is the effect of access to e-banking services on customer satisfaction in the banking industry case of Ecobank Buea?
3. What are some of the challenges faced by e-banking in the banking industry case of Ecobank Buea?

1.4 Objectives of the study

The main objective of this study was to investigate the impact of e-banking on customers’ satisfaction in the banking industry case of Ecobank Buea

Specific objectives

1. To examine the impact of security/privacy on customer satisfaction in the banking industry case of Ecobank Buea.
2. To investigate the effect of access to e-banking services on customer satisfaction in the banking industry case of Ecobank Buea?
3. To find out some of the challenges faced by e-banking service

1.5 Hypothesis

In this research study, here below are the null (Ho) and alternative (H1) hypothesis

Ho: Electronic banking has no significant effect on customer satisfaction.

H1; Electronic banking has a significant effect on customer satisfaction.