The effect of electronic
payment system on customer satisfaction in Nigeria banking system.
(Banking
and Finance)
CHAPTER
ONE
INTRODUCTION
1.1. Background of the Study
Today’s
business environment is extremely dynamic in nature. It has experienced rapid changes
as a result of technological improvements, increased awareness and demands for
banks services. The Banking industry of the 21st century operates in a complex
and competitive environment characterized by these changing conditions and
highly unpredictable economic climate, thus, information and communication
technology (ICT) is at the centre of this global change. Amedu (2005) asserts that banks over the time
have been using electronic and telecommunication networks for delivering a wide
range of value added products and services. Therefore, information systems
could not be ignored because they play a critical role in current Banking
system in Nigeria.
Electronic
banking is known as e-banking, virtual banking or an online Banking, it is a
service that allows customers to access their bank information, conduct
financial transactions, make deposits, withdrawals and pay bills through the
internet without having physical visit to their banks. It provides the
convenience of accessing banking facilities from the comfort of their
home/offices. (Awamleh & Fernandez, 2005).
The
concept of electronic banking system began when the first Automated Teller
Machine were instated in the 1970s. An ATM machines allowed deposits to be made
from the remote locations– a convenience for customers who otherwise would
have had to withdraw cash personally from their bank. The advantages offered by
ATM Machines quickly split over to encompass other areas of bank services,
computerizing manual system for greater efficiency and time savings. The
concept behind ATM machines gave rise to smart cards, intranets and internet
banking, electronic funds transfer {EFT}, NIBSS (Nigerian interbank settlements
system), POS {Point of Sales Service.}, Access mobile, and other electronic devices
(Ahasanul, 2010).
The
growth in the application and acceptance of internet-driven technologies means
that delivering an enhanced service is more achievable than ever before,
however it is also more complex and fraught with potential costs and risk. The
internet introduces customers to a new perception of business time as always
available and demanding an urgent and rapid response. The serves as a challenge
for managers who must to reconcile their business and their own personal
perceptions of time with the perceived reality of internet time, as the
internet has decisively shifted the balance of power to the customer.
Presently,
banks in Nigeria are adding value to their services for customer’s
satisfaction. The customers have more choices in choosing their banks because
the new age IT (Information Technology) is bringing about sweeping changes in
the banking industry, forcing them to reengineer many of their basic processes
and systems. Few of the technology-driven electronic banking services being offered
are viz. Automated teller machines ATM, Electronic Clearing Service (ECS),
electronic funds transfer (EFT), tele-banking, internet banking etc. New
technological capabilities are now being effectively used to create value and
to better manage customer relationship in Nigeria banking system. (Raji, 2010).
1.2
Statement of the problem
In
Nigeria, customers of banks seek for safety of their funds and increased
returns on their investment. Customers demand efficient, fast and convenient
services. Many customers today want banks that offer them services that will
meet their particular needs and support their business goals. For instance, a
business man wants to travel without carrying cash for security reasons. The
central bank of Nigeria has emphasized the need for banks to provide more
efficient services to their intending and potentials customers. Therefore, the
introduction of electronic banking system in the Nigerian financial industry is
expected to play an important role in the delivery of efficient and effective
services. Unfortunately, most Nigerian banks are still lagging behind in
adopting and equipping themselves with the current and sophisticated electronic
devices as a results of non availability of financial, management and human
resources, which would have given them more competitive advantages and attract
more customers to themselves. One is therefore inclined to wonder what could be
responsible for the non adoption of the present banking gadgets. Is it that the
present employees of the banks cannot make use of these advance gadgets? Or are
the gadgets too costly to be acquired by the banks? These are the questions
which this project intends to seek appropriate solution.
1.3 Objectives of the study
The main objective of this research is to appraise the
effect of electronic payment system on customer satisfaction in Nigeria banking
system. Specifically, the study will examine the following objectives:-
i. To evaluate the effects of
electronic payment system on banks customers.
ii. To
assess the impact of electronic payment system on the bank’s service delivery.
iii. To examine the effect of electronic payments on competitive
advantage of the bank.
iv. To ascertain the effect of electronic payment system on
increase in market size of the banks.
1.4 Research questions
The following
research questions were developed in order to guide the study:
i. Does
the electronic payment system enhance service delivery in the banking system?
ii. Does
the electronic payment system increase the market size of the banks?
iii. Does
the electronic payment system enhance the competitive advantage of the bank’s?
iv. Does
the electronic payment system enhance customer satisfaction of the banks?
1.5 Research hypotheses
The following hypotheses were formulated
H01: There is no relationship between electronic
payment system and banks service delivery in Nigeria banking sector
H02: There is no relationship between electronic
payments system and customer
satisfaction in Nigeria banking sector.
1.6 Significance of the study
This study will be of immense benefit to the intending
and present customers of the banks as it will open their eyes to the great
advantages of the usage of electronic banking and also to the bank, as the
introduction and selling of this product will bring about increase in the bank
customers base, increase in deposit and as tools for favorable competitions in
the industry. The research is equally significant because it would provide
answers to factors militating against the implementation of electronic banking
in the financial industry as a whole and also valuable tool for students,
academician, institutions and individuals that wants to know more about
electronic banking system.
1.7 Assumptions
of the study
The
assumptions that will guide the procedure for the study include;
i. Electronic banking was assumed to be
important means of enhancing customer satisfaction
ii. That the elements that will make up the case
study corporate with the researcher by filling and returning the questionnaires
that will be administered.
iii. That the respondents that will be selected
for the study have adequate knowledge and information about manpower planning
process.
iv. That the information that will be supplied
by the respondents will be assumed to remain constant through the period of the
study.
1.8 Scope and limitations of the study
In
terms of coverage, this study will focus on the effect of electronic payment
system on customer satisfaction in Access bank Plc.. This means that issues
relating to electronic banking will be explained. In view of the technicalities
involved, it would be unrealistic to assume that all necessary facts have been
gathered in the process of the study. Information is limited to those accesses
and made available by the respondents and also have gathered from end
users. More so, since financial
industries have many forms, the study will only be limited to access bank plc
of Nigeria. Some of the constraints are:-
i. Time constraints
The
researcher finds it difficult to go round all the bank branches due to limited
time availability, as a result of this, the data were only collected from few
banks randomly.
ii. Inadequate data
Electronic
banking is a recent developed system in
which not all banks have embraced, those that have embraced it were able to
give their information to the researcher and those that have not fully embraced
it were unable to give accurate data to researcher.
iii. Lack of funds
Due to
the nature of this work, researcher find it difficult to raise the funds needed
to carry out the research appropriately, as a result of this, few banks
branches were selected based on the available finance to enable researcher get
the needed information.