CHAPTER ONE
INTRODUCTION
1.1 Backgroundto the Study
From time immemorial, information hasplayed a prominent role in human life. The emergence ofsocial progress and the vigorous development in science and technology however, has immeasurably increased the role ofinformation in every facet of human endeavour. The rapid expansion of a mass of diversified information hasborne the term “information explosion” and given rise to a scientific approach in information and elucidation of itsmost characteristic properties which has led to principal changes in the interpretation of the concept of information.It was broadened to include information exchange not only among men but also among machines as well as theexchange of signals in the animal and plant worlds. The pace of change brought by new technologies has had asignificant effect on the way people live, work, and play globally.
Today’s business environment is very dynamic and experiences rapid changes as a result of creativity,innovation, technological changes, increased awareness and demands from customers. Business organizations,especially the banking industry of the 21st century, operates in a complex and competitive environmentcharacterized by these changing conditions and highly unpredictable economic climate with electronic banking at the centre of this global change curve.
Laudon and Laudon, (2019) contend that managers cannot ignore Information Systems because they play acritical role in contemporary organizations. They point out that the entire cash flow of most fortune 500 companies is linked to the presence of robust Information Systems. The application of information and communication technologyconcept, techniques, policies and implementation strategies to banking services has become a subject offundamental importance and concern to all banks and a prerequisite for local and global competitiveness.
Harold and Jeff (2015) contend that financial service providers should modify their traditional operating practiceto remain viable. Thus, electronic banking has emerged as a catalyst in the variousindustries of the world to aid the process and procedure required to ensure the realization of variousorganisational goals.
The role of electronic banking in the banking sector became of interest to this study due to the significant role it plays in theeconomy by stimulating economic growth through the intermediation of funds to economic agents that needthem for productive activities. This function is very vital for any economy that intends to experience meaningfulgrowth because it makes arrangements that bring borrowers and lenders of financial resource together and moreefficiently too than if they had to relate directly with one another (Adam, 1998; Ojo, 2017).
Since the cost of attracting new customers is higher than the cost of retaining the existing ones, in order to be successful banks must concentrate on retaining existing customers implementing effective policies of customer satisfaction Harold and Jeff (2015).
Nowadays one of the biggest challenges for managers in the banking industry is to provide and sustain customer satisfaction, and also deal with constraints associated with electronic banking such as erratic power supply, unrealisable network design, poor connectivity, insufficient bandwidth, cost of installing Electronic banking devices and human resources development Ojo (2017).
Given the rise in technological development in the banking sector, it is therefore eminent for banks to adopt the use of electronic banking in their operations in providing financial services. It is against this background that this study seeks to investigate the impact of Electronic banking on customer satisfaction and the performance of retail banks in Nigeria.
1.2 Statement of the Problem
The relevance of Electronic banking to the performance and customer satisfaction of the banking system in Nigeria cannot be overemphasized. The application of Electronic banking in banks in Nigeria is believed to impact positively on service delivery in terms of reducing customers’ waiting time and rendering convenient services to customers, operational efficiency including minimization of cost and profitability of the banks, hence satisfied customers wouldalways come back. Banks compete to attract customers in different ways including providing convenient, accessible and acceptable services and/or products to their customers. One of the most important of these services is e-banking which has contributed significantly to increase the distance between customers and the Bank (Almazari and Siam, 2018).
E-banking is adopted to improve Banks’ service delivery, decongest banking halls, enable customers withdraw cash 24/7, aid international payment and remittance, track personal banking transactions, request for online statements, and transfer deposit to a third-party account.
However, banks in Nigeria are faced with some problems associated with electronic banking such as erratic power supply, unrealiablenetwork design, poor connectivity, insufficient bandwidth, cost of installing Electronic banking devices and human resources development. Given this unfortunate scenario; the present study seeks to assess the relationship betweenelectronic bankingand customer satisfaction in Nigerian banks.
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