EFFECT OF
ELECTRONIC BANKING ON CUSTOMER SERVICE DELIVERY OF BANKING INDUSTRY IN NIGERIA
(A CASE STUDY
OF SELECTED BANKS)
ABSTRACT
The
study was an exploratory study aimed at understanding the effect of electronic
banking on customer service delivery in three selected branches of three banks
in the Nigeria. Purposive sampling strategy was adopted to select 69 customers
as well as 29 staff of the three selected banks. Questionnaire was used as the
principal tool for the data collection. With the aid of the SPSS windows
software the data was analyzed using basic statistical tools such as
frequencies and percentages. The study among other things brought to the fore
that customers prefer to transact business in the halls in spite of the long
queues largely because of the difficulty associated with accessing e-banking
products. The data analysis also showed that customers of the selected banks
were highly aware of the various e-banking platforms available at their
respective bank. The study revealed that in spite of the difficulties
associated with the use of e-banking products, majority of the respondents
highly patronize these services. This was particularly the case with the use of
ATM machines as respondents alluded. However, ignorance on the part of the
customers regarding the use of e-banking services was a huge challenge. The
study, based on the findings recommended among other things that masse public
(customer) education regarding the usage/ advantages of e-banking products and
services should be embarked by the banks. Also, the researcher suggested that
there should be a widespread citing of ATM machines around vantage points.
CHAPTER
ONE
1.0
INTRODUCTION
1.1
Background of the Study
Customers’
insatiability for efficient services had compelled financial institutions to
move fast to a more radical transformation of their business systems and models
by embracing Internet banking. Before the emergence of modern banking system,
bank operations were done manually which led to a slowdown in settlement of
transactions (Onodugo, 2015). In the bid to catch up with global developments
and improve the quality of their service delivery, Nigerian banks have no doubt
invested much on information and communication technology. Today, the
increasing progress in technology make the service companies like banks provide
e-banking services or online banking in order to access the competitive advantage
and dedicate much market share to themselves (Ali, Sacid, Reza, and Hamed,
2016). E-Banking has become a life line for all business drives. The strong
potential of e-banking lie in the areas of cost reduction, fast transaction and
satisfying consumer needs. However, electronic transactions through internet
banking remain a fraction of what is performed through bank branches or other
traditional methods such as counter-tellers, automated teller machines (ATMs)
or telephone banking (Bradley and Stewart, 2003.
Timothy
(2012) posits that decades back banking was a simple business; consumers were
not keeping money homes but rather saved their money and received their money
from financial institutions from banks. When customers open savings account,
they get accounts book from the bank with which the account would be operated;
and when it is a current accounts, they get check books for the comparative
reason. Today, the banking industry has moved into a time of menu-driven
ultra-generous specialized software undertakings called banking applications.
These applications can do basically every single banking capacity depending
intensely on data accumulation, stockpiling, and transfers and processing. The
use of electronic banking products and services to banking operations has
turned into a subject of key significance and concerns to all banks. In any
case, it ought to be understood, that electronic banking service came out of
Information and Communication Technology that made it feasible for service
providers and their customers in developing economies to enjoy the services
that is also enjoyed in the developed countries. Electronic banking services
have given banks the chances to inspire clients which urge them to continue
banking with them. Today, it is hard to see a bank in the nation that does not
offer one type of electronic banking service or the other, even banks in the
most remote parts of the world. Information and communications technology has
become a vital asset that has transformed many areas of life including business
and commerce.
Banking
has been one of the services that provide the opportunity to use the internet
to enhance business transactions that engenders customer satisfaction. The term
electronic banking was defined by Allen et al (2001) to mean the procurement of
data or services by a bank to its clients by means of a computer. A more
sophisticated service is the particular case that furnishes clients with the
opportunity to get access to their accounts and execute transactions and to buy
item online by means of the internet (Daniel, 1999). The competitiveness in the
banking industries have called for the need to bringing on board the electronic
platform into industries around the world. For example, four Thai banks chose
to implement, investigate, analyze and endeavor to present Internet banking
service as an intend to decrease holding up time, lapses, costs, and enhance
customer service backing 1997. Their internet banking services permit clients
to access and inquire about their own particular accounts and perform basic
transactions by means of the Internet from their PCs at their workplace and
home whenever the timing is ideal time. Additionally, so as to lower cost and
keep up business sector authority, bank leaders in Iran have profited by unrivaled
services quality and information technology infrastructures. In Africa,
electronic banking is starting to pick up its roots over the mainland. For
instance, Madueme, (2009) compose that with globalization, Nigerian banks must
choose the option to embrace electronic banking services to upgrade successful
service conveyance that rises above to customer satisfaction, on the off chance
that they truly need to stay in the business race, not to mention be beneficial
and once more, the late merging activity in Nigerian banking division has drawn
the consideration of numerous banks to utilization of different mechanical
gadgets in advancing/accomplishing better customer service conveyance that
ensured customer satisfaction that interprets into expansion benefit and higher
rate of profitability.
Banking is one service that is information
intensive and an ideal centre for successful development of e-commerce because
it provides the opportunity to use the internet and e-commerce to facilitate
quick business transactions that result in customer satisfaction (Kardaras and
Papathanassiou, 2001). E-banking can be defined as the deployment of banking
services and products over electronic and communication networks directly to
customers (Singh and Malhotra, 2004). Today, almost all the banks have adopted
e-banking as a mean of enhancing service quality of banking services. They are
providing e-banking based e-services to their customers which are called as
e-banking, internet banking or online banking etc. It brings connivance,
customer centricity, enhances service quality and cost effectiveness in the
banking services delivery and increasing customers’ satisfaction in banking
services (Vijay, 2011).
Nigerian’s
commercial banks are drastically increasing awareness of the benefits of the
internet banking as seen that there a fast growth of internet users and also
the desire of the populace to gain access to what they want when they want.
This has led Nigeria banks to offer financial services via the internet or
“internet banking” or “online banking” as they respond to the needs of bank
customers (Komwut and Nopadol, 2014). However, despite the positive
contribution of E-banking, there is negative effect of E-banking to Nigeria
populace, which has to discourage some Nigerians not to embark on E-banking
transaction (Adewoye, 2013). Ali et al. (2016) conducted a study on effects of
e-banking service quality on customers’ satisfaction and loyalty in Agricultural
Bank of Khuzestan Province (Iran). Worku, Tilahun and Tafa (2016) carried out a
study on impact electronic banking has on customer satisfaction in comparison
with traditional brick and mortar baking service, its relationship with that of
age, occupation and education, its impact on branch visits, the level of
customer understanding about e-banking and the opportunities and challenges of
e-banking.
1.2
Statement of the Problem
Existing literature posits that
electronic commerce gives competitive advantage for banks by reducing
operational cost and provides best satisfaction of customer needs. For example,
Burnham (1996) recounted that in the world of electronic commerce, it is very
important that banks should provide electronic banking services in order to
survive. Hence, most banks in
developed and some in developing parts of the world are currently offering
electronic banking services with different levels of complexity. It is normal
that banks that don't offer electronic banking services may lose their clients
to their competitors (Orr, 1999).Despite the acclaimed benefits of E-banking,
some people are generally shy to use the ATMs (Aghadale, Karimi and Abasaltian,
2015). The pace at which the internet banking technology proceeds doesn’t
match with the customers’ usage rate, even though banks are more interested in
differentiating themselves in the competitive market. So, is this the fault at
the end of the technology implementation or consumer’s perception? Worku et al.
(2016) reported in their study carried out in Nigeria that, only 47% of
customers who use electronic banking products and services are satisfied with
the quality of products and efficiency of the delivery.
Gyasi et al, (2013) acknowledge that
currently, some banks like United Bank for Africa, Merchant Bank Nigeria,
ECOBANK Nigeria, Barclays Bank Nigeria, among others have adopted internet
banking platform and a wide range of electronic products and services, some of
which allow customers to receive their monthly bank statements via e-mail, online
checking of accounts balance, online transfer of funds, the use of electronic
cash systems, and for communicating to customers on regarding bank statements,
other banks use internet banking services to allow business customers to make
inter-bank financial transactions and information sharing.
1.3
Objectives of the Study
The
general objective of this study is to find out the effect of electronic banking
on customer service delivery. Specifically, the study seeks to;
ü Assess customers‟ preference between banking in the
halls and e-banking.
ü Investigate whether or not customers
are aware of the electronic service products
ü Determine the level of customer
patronage of electronic banking services
ü Examine the benefits and challenges
associated with electronic banking
1.4
Research Questions
Ø Why do customers prefer the banking
halls to electronic banking?
Ø Are customers aware of the existence
of the various electronic products?
Ø At what level do customers patronize
electronic banking services?
Ø What are the benefits and challenges
associated with electronic banking services?
1.5
Research Hypotheses
Consequent upon the above objectives and
research questions of the study, these hypotheses were proposed for
investigation.
ü
Perceived
usefulness of technology has no significantly effect on customer satisfaction
in commercial banks in Nigeria.
ü
There
is no relationship between perceived easy to use and customer satisfaction in
commercial banks in Nigeria.
ü
Security
does not significantly influence customer satisfaction in commercial banks in
Nigeria.
1.6
Significance of the Study
Literature
on electronic banking is scarce in developing countries such as Nigeria are
scarce if not non-existing. This study, therefore, shall contribute to
knowledge and serve as source of reference in the academia. For this future
researcher can read the methodology as well as the findings of this study.
This
study seeks to help stakeholders in the banking industry identify and formulate
strategies that will promote e-banking. For example, study will be useful for
government such as Bank of Nigeria as well as non -governments like Consumer
Protection Agency in drafting policy framework on electronic banking. Here they
will be informed on the empirical challenges and benefits of electronic banking
service delivery.
The
study is also of immense significance to the bank customers and the business
world in general. Because the outcomes of the study provide evidence for banks
to improve their e-banking service delivery, the performance of banks’ customer
care units would be totally customer satisfaction and comfort driven. This will
facilitate near-perfect control of financial transactions by the customer,
hence greater customer satisfaction.
The
outcome of this study especially on security would definitely awaken both bank
management and regulatory authorities to note issues on e-fraud seriously and
take necessary measures to avert it. The Nigeria e-Fraud Forum (NeFF) will be
further encouraged through this study to reduce cybercrime and e-banking fraud,
which if not effectively checked, would totally remove public confidence from
the banking industry. This study will also make the National Assembly to see
reason to review the Cybercrime (Prohibition and Prevention) Act 2015 to
stiffen the punishment for e-fraud.
1.7
Scope of the Study
The study focus on evaluation of e-banking in
improving customer satisfaction in Nigeria: FBN, Gtbank, UBA, Zenith Bank and
Access Bank customers were surveyed. The content scope focused on perceived
usefulness of technology, perceived easy to use, Security, self-efficacy of the
user and technological facilities. The scope of the study concentrates on two major areas. This
comprises of the contextual and geographical scope of the study. Contextually,
the research will emphasize on electronic banking focusing its potential effect
on customer service delivery. There are numerous and emerging types of
electronic banking such as Automated teller machine (ATM), internet banking,
mobile phone banking, debit cards, E-switch telephone banking, SMS banking,
home banking, and network banking just to mention a few. However, four of the
numerous electronic banking has been randomly selected because of numerous
electronic banking services in Nigeria. In doing this all the existing
electronic banking services were identified and out of which those available in
Nigeria were selected from which four of them were randomly selected by making
a survey to know which ones were available to the banks chosen for the
research. After the survey SMS service, ATM services, mobile banking and
internet banking were selected. There are a lot of banks that offer electronic
banking to its customers in Nigeria; hence the study will be limited to some
chosen banks.
1.8
Limitations of the Study
According
to best and Khan (1989) „limitations are those conditions beyond the control of
the researcher that will place restrictions on the conclusions of the study and
their application to other situations. This study is, therefore, constraint by
the wide area the study is supposed to have captured, shorter period for the
completion of the study, inadequate funds for this study and bureaucratic rules
in the study settings. The study as a matter of fact should have captured all
the customers of major banks in Nigeria if not Africa. This is, however,
impractically impossible due to many factors such as a huge research team and
many other factors.
The
researcher per the rule of the university is supposed to complete this study
within one semester. This is a rule ought to be complied with strongly. This
condition is beyond the control of the researcher as he is expected to present
the report of this study within a relative shorter period. One major limitation
of this study is the lack of fund. The researcher as an individual student has
to manage his meager income in undertaking this study. It is a known fact that
there are lack of financial support for research in Africa of which Nigeria is
of no exception. With the necessary research sponsorship the study could have
captured a wide spectrum rather than the three selected banks. This may affect
the findings of this particular study especially in making general conclusions
and comparing this study to similar ones with the requisite financial support.
The
last limitation of this study is the bureaucratic procedures to be observed in
the selected institutions of study. Corporate bodies have their own laid down
rules binding workers, customers, and the general public of which the
researcher is a part. These rules or protocols cannot be broken no matter how
unfavorable they will be to the researcher. In institutions such as banks where
staff are to be interviewed certain sensitive or vital information cannot be
released to an outsider such as a researcher.
1.9 Definition of Terms
Ø E-banking:
Can be defined as the deployment of
banking services and products over electronic and communication network
directly to customer (Singh and Malhotr, 2004).
Ø Bureaucratic Means the system of official rules
and ways of doing things that a government or an organization has, especially
when these seem to be too complicated.
Ø Constraint:
Mean to force physically, by strong
persuasion or pressurizing; to compel; to oblige.
Ø Customer: A customer is the recipient of a
good, service, product or an idea - obtained from a seller, vendor, or supplier
via a financial transaction or exchange for money or some other valuable
consideration.
Ø Service delivery: A service delivery framework (SDF)
is a set of principles, standards, policies and constraints to be used to guide
the designs, development, deployment, operation and retirement of services
delivered by a service provider with a view to
offering a consistent service experience to a specific user community in a specific
business context. An SDF is the context in which a service provider's capabilities are arranged
into services.
Ø Sophisticated: Mean
make more complex or refined.
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2.
DESIGN
AND IMPLEMENTATION OF A WEB-BASED MULTICRITERIA DECISION SYSTEM FOR NYSC
DEPLOYMENT TO PLACES OF PRIMARY ASSIGNMENT
ABSTRACT
Every year many corps
members are posted to different parts of the country to serve their fatherland
for one year. The deployment of corps members to their places of primary
assignments is a much more difficult task. The camp-officials manually select
corps members and deploy them to different organizations for their primary
assignments. The manual method used is very cumbersome, time consuming, and
also prone to errors and irregularities due to human nature. Irrespective of
the time consumed in this manual deployment some of the corps members are being
deployed to where their disciplines are irrelevant to their place of primary
assignments thereby leading to their rejection and for making the service year
wasted. In this research, a web-based multicriteria decision model was designed
to considerably take care of the aforementioned problems. The multicriteria
decision system provides an automated process for posting corps members to
their places of primary assignments appropriately. The model also provide
avenue for organisations to register their request for corps online and the
corps can check their places of primary assignment from anywhere they are.
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
The National Youth Service Corps (NYSC) is a
programme that involves Nigerian graduates in the development and integration
of their country. There is no military conscription in Nigeria, but since 1973
graduates of universities and later polytechnics have been required to take
part in the NYSC programme for national service (Marenin, 1990). It was
explained that one of the expectations of the programme is that corps members
should be posted to cities and states far from their homes and states of
origin. They are expected to mix with people of other tribes, social and family
backgrounds, to learn the culture of the indigenes in the place they are posted
to. It is a way to engender unity in Nigeria, to help youths appreciate other
ethnic groupings in the country. During the period of service, there is an
"Orientation" period of approximately three weeks which is spent in a
camp away from family and friends. There is also a "passing out
ceremony" at the end of the year and primary assignment followed by one
month of vacation.
The programme also help in creating jobs
opportunity for a lot of Nigerian youths. An NYSC forum dedicated to the NYSC
members was recently built to bridge the gap amongst members serving across
Nigeria and also an avenue for corps to share job information and career
resources as well as getting loans from the National Directorate of Employment.
The NYSC programme is a programme that prepares youths to work after tertiary
education in universities, polytechnics and their equivalent. This program is
suffering a lot of setbacks such as posting a graduate of science programme to
non-science oriented place of primary assignment and like wise
other
disciplines. Some corps members, due to lack of information, do not effectively
perform their service. It is expected that this study would help to profer
solution(s) to these problems.
1.2 Statement of the Problem
Nigerian universities and polytechnics
are presently producing thousands of graduates every year. After graduation,
most students waste extra year before they go for service. NYSC presently using
manual system in their data processing; this involves the use of people, pens
and papers in records keeping. This method of data processing reveals a number
of problems which includes:
i.
Records to be
kept in are often too large, diversified and complex to be processed
manually.
ii.
Most often
some names are omitted as a result of manual processing.
iii.
Statistics of
yearly NYSC members are hardly correct as a result of manual calculations.
iv.
Students are
made to contend with missing their service year as a result of no call-up
letter.
1.3 Objective
of the Study
The main objectives
of this thesis is to develop and implement an online deployment of corps
members to their place of primary assignments using NYSC corps members-deployed
to Kaduna State as a case study. The specific objectives are to:
i. Develop a multicriteria decision deployment model for NYSC; and
ii. Implement a web-based NYSC multicriteria decision system of
deploying corps members to their places
of primary assignment for Kaduna State.
1.4 Scope of the Study
The
research work will cover among other things:
i.
NYSC
Registration
ii.
Call up
Letters
iii.
Analysis on
population of the students for NYSC posting.
1.5 Limitations of the Study
Many
factors have limited this study, some of these factors are:
i.
Time:
The time allocated to research work for this study was greatly constrained due
to intense academic activities involving the researcher.
ii.
Finance:
The major constraints for this study occurred in the form of inadequate funds.
The present high cost of material, access to a personal computer unit for
running and debugging of the application program, transportation expenses to
and fro the site of computer etc. militated against the smooth and easy
advancement of the work.
1.6 National youth service corps (NYSC)
Deployment
Every year more than 5,000 corps members are
deployed to each state for one year service. This deployment is in three (3)
batches namely batches A, B and C. Batches A and B corps members are usually
more in number while batch C corps members are fewer. Out of this number some
will relocate from the state they are deployed to another state because of
certain reasons like marital status and health condition.
The result of the interview from some NYSC
official states that there are two types of NYSC deployment of corps members.
The first type is National level deployment where qualified graduates from
institutions of higher learning are deployed to the various states they will
serve. The list of the graduates is gotten through the student affairs officer
of the institutions that is responsible for the preparation of eligible
students for service. In this type of deployment, corps members’ state of
origin, marital status and health conditions are considered before posting the
corps members. The second type is done at state level which involves deploying
corps members that are posted to the state after orientation to the places of
primary assignment. To process this second type of deployment, organisation
requests, marital status and health condition are considered.
1.7 Research Motivation
Decisions on
deploying corps members to the places of primary assignment are made by
committee constituted by NYSC zonal inspectors and mobilisation officer by considering some factors such as organisations requests, corps
discipline and qualifications, gender, tribes and marital status.
Faced with the multiple criteria (organisations
requests, corps discipline and qualifications, gender, tribes and marital
status), the deployment committee annually evaluates every corps member against
the requirement before deploying the corps members. This process is cumbersome
and time consuming. Moreover, the corps members are deployed to places that are
not relevant to their disciplines. This, for most of the time, renders their
one year service wasted. With manual processing, the deployment is bound to be
tedious, time wasting, inaccurate due to human error and at times deliberate
manipulation to achieve personal aim or to favour some friends like deploying
corps from influential people to urban centers or better places and others to
rural areas.
The problems associated with manual system of
corps members’ deployment give rise to the need for development of computerised
model that can be use to carryout the deployment process with a view to: reduce
the time it takes to process the deployment of corps members to their places of
primary assignment; have fair and impartial deployment, placement and to
minimize the incidence of rejection of corps members by organisations.
1.8 Research Methodology
A review of related
literature on recruitment, human resource management, selection and screening
processes and existing NYSC deployment manual system was done. Some of the
Zonal coordinators and camp officials were interviewed about the process of
manual method of deployment of corps members to their places of primary
assignment. A multicriteria decision model for deploying corps members to their
places of primary assignments was developed using parameters such as corps
members’ disciplines, genders and tribes among others. The parameters were
related with requests from different
organisations/institutions/company/governments to match corps members to their
respective places of primary assignments. The system was implemented using
Apache as the web server, PHP as script language, MySQL as the relational
database system with windows as operating system.
This thesis is in five chapters. Chapter one covers the background
of the study, statement of the problems, research motivation, research
objectives, research methodology and contribution of the study to knowledge. In
chapter two the existing system and related literatures on selection, e-recruitment
and human resource management information systems were reviewed. Chapter three
presented and discussed the multicriteria decision system model and design of
the new system architecture. Chapter four focused on the system implementation.
Finally, chapter five presented the conclusion, suggested recommendations and
further research.
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