IMPACT OF INTERNET BANKING ON CUSTOMER SATISFACTION

1.1 Introduction

Internet Banking is a typical application in the mobile financial field. It refers to the integration of electronic money and mobile communication services through multi-industry and multiplatform cooperation between mobile telecom carriers and banking institutions (Sun et al., 2017). The Internet Banking technology is to address the problems related to bricks and mortar banks, thus queuing, and travelling over a long distance in most cases to carry out simple banking service such as checking of balance, withdrawal and transfers of money. Payment systems and mobile devices and services are crucial, and these are defining the way we live in the twenty-first century in terms of banking. Therefore, mobile payments offer a universal payment solution, thus delivering distinctive value to both consumers and merchants (Mallat, 2007).

This chapter will address the background information that motivated this study, the challenges that prompted it, its aim, and its objectives as a preface to subsequent sections of the study. Additional factors include the study's significance, scope, limitations, research questions and hypotheses, and the definition of technical terms.

1.2 Background of Study

Over the years, customer satisfaction is determined by how well a company's goods and services meet or exceed the expectations of its clients. Customer satisfaction may alternatively be defined as the proportion of total consumers, or the number of customers whose ratings of a company's goods or services surpass predetermined levels of satisfaction (Farris, Paul W. et al., 2010).

The Advent of Internet Banking constitutes a recent development in electronic banking. It facilitate the access of customer account balance, transfer of funds, SMS services , payment transaction and other businesses services through the use of mobile phones (Saleem & Rashid, 2011). The advantages attributed to the use of mobile phones include convenience derived in conducting transaction with ease anywhere, anytime. It also provides the needed security in conducting banking transaction. According to the Federal Reserve survey Internet Banking is the process of using a mobile phone to conduct banking transaction such as having access to your bank account, credit card account, or other financial account.

The service can be accessed from the bank’s web, using an application downloaded to the mobile phone, the web browser on customers mobile phone or by text messaging. The services offered include cash depositing, cash withdrawals and transfers, balance inquiry and statement of account (Jepleting et al., 2013). Internet Banking helps the bank to send messages across to all of its clients with ease and maintain good customer relationship and generate data from customers.

In general, technology is having a significant influence on banks, and the financial services industry is no different. All banks now consider the application of ICT concepts, methods, policies, and implementation strategies to banking services to be of utmost significance. It is also a must for maintaining local and international competitiveness in the banking sector. The financial industry's business climate is quite dynamic and evolves quickly as a consequence of technology advancements, which forces banks to provide online client service. The usage of automated teller machines (ATMs) marked the beginning of the growth of online banking, and Finland was the first nation to adopt a leading role in this field globally (Mishra, R. And Kiranmai, 2009).

Although it has been extensively adopted in both developed and emerging nations, online banking has not expanded as broadly. In order to improve the quality of their financial services, nearly all banks are now using online banking. Their aim is to boost customer satisfaction with financial services by offering internet banking to their clientele (Shittu, 2010). Nigerian consumers are lagging behind in utilizing the Internet and its applications, particularly in the realm of online baking.

Unfortunately, problems like malfunctioning machines, running out of cash, blocked cards, frequent breakdowns, unreliability, and a lack of technicians to fix malfunctioning ATMs, as well as a lack of adequate backup systems to provide customers with ATM service when a temporary issue arises, lack of convenience with online banking, credit card service, and mobile banking, and customer and service provider resistance to technological advancements due to risk aversion, all contribute to the uneven distribution of internet banking services throughout Nigeria. All these have created doubts in the minds of customers thereby affecting their level of satisfaction.

Therefore, in Access Bank Kafanchan Kaduna State where the research was carried out, the activities that was conducted is to examine the Impact of Internet Banking on Customer Satisfaction using Access Bank Kafanchan Kaduna State as a case study.

1.3 Statement of Problems

Investigation revealed that the goal of introducing internet banking to the banking industry is to increase consumer happiness, which will increase the profitability of the banks. Customers may view this technology as just another branch rather than as a new method of distribution if it doesn't improve customer satisfaction compared to traditional brick and mortar locations.

The changing pace of doing business and the advent of the application of technology has brought significant changes in the banking operations. The traditional banking system which was characterize with long queues in the banking halls and the application of manual processes, huge customer complaints and loss of time has long being replaced with new technologies such as the Internet Banking services. This technology has brought relieves to bank customers as much of the traditional functions of the bank can easily be accessed from the customer s mobile phone. It facilitate the access of customer account balance, transfer of funds, payment transaction and other businesses services through the use of mobile phones (Saleem & Rashid, 2011).

According to the Federal Reserve survey Internet Banking is the process of using a mobile phone to conduct banking transaction such as having access to your bank account, credit card account, or other financial account. The problem confronting the study is to examine the Impact of Internet Banking on Customer Satisfaction using Access Bank Kafanchan Kaduna State as a case study.

1.4 Aim and Objectives of Study

The aim of the study is to examine the Impact of Internet Banking on Customer Satisfaction using Access Bank Kafanchan Kaduna State as a case study. In achieving this aim, the following specific objectives were laid out as follows:

1. To determine the level customer satisfaction in Internet Banking in the study area;
2. To investigate the factors limiting the use of internet banking by Nigerians;
3. To examine the components of internet banking in Nigeria; and
4. To determine the roles of Internet Banking in enhancing customer satisfaction in Access Bank Kafanchan Kaduna State.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• What is the relevance of Internet Banking?
• What is the level of customer satisfaction in Internet Banking in the study area?
• What are the factors limiting the use of internet banking by Nigerians?
• What are the roles of Internet Banking in enhancing customer satisfaction in Access Bank Kafanchan Kaduna State?

1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: The level of customer satisfaction in Internet Banking in Access Bank Kafanchan Kaduna State is low
• H1: The level of customer satisfaction in Internet Banking in Access Bank Kafanchan Kaduna State is high

Hypothesis Two

• H0: There are no significant factors limiting the use of internet banking by Nigerians
• H1: There are significant factors limiting the use of internet banking by Nigerians

1.7 Significance of Study

The findings of this study would be helpful in guiding Nigerian bank managers in assessing how online banking affects client happiness. This study will also act as a foundation for future research in this area for other academics and researchers, and if used appropriately, it may even go so far as to offer fresh insights into the subject.

The research will create a framework that the financial industry's stakeholders may use to enhance the quality of services they provide for online banking. This study may be utilized by non-researchers to expand on their own research endeavours and will be of great use to fellow researchers seeking to learn more about it. This research adds to the body of knowledge and may help direct future investigations.

1.8 Scope of Study

The scope of this research is focused on the Impact of Internet Banking on Customer Satisfaction using Access Bank Kafanchan Kaduna State as a case study. This research will cover all the components of internet banking with a careful examination of its impact on customer’s satisfaction.

1.9 Limitations of the Study

During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:

1. Time Constraint:The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
3. Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.

1.10 Definition of Terms

Internet Banking Defined:

Internet Banking constitutes a recent development in electronic banking. It facilitate the access of customer account balance, transfer of funds, SMS services, payment transaction and other businesses services through the use of mobile phones.

Customer Satisfaction Defined:

It refers the meeting or exceeding customer expectations.