IMPACT OF DEPOSIT MONEY BANKS' SERVICES ON CUSTOMER SATISFACTION IN NIGERIA

TOPIC IS SUITABLE FOR:

1. Department of Banking and Finance

2. Department of Business Administration

3. Department of Marketing

4. Department of Economics

TOPIC: IMPACT OF DEPOSIT MONEY BANKS' SERVICES ON CUSTOMER SATISFACTION IN NIGERIA

TABLE OF CONTENTS

Abstract

CHAPTER 1: INTRODUCTION

1.1 Background of the study

1.2 Statement of the problem

1.3 Objective of the study

1.4 Research Questions

1.5 Research hypothesis

1.6 Significance of the study

1.7 Scope of the study

1.8 Limitation of the study

1.9 Definition of Terms

CHAPTER 2: LITERATURE REVIEW

2.0 Introduction

2.1 Conceptual Framework

2.2 Theoretical Framework

2.3 Empirical Review

2.4 Gap in Literature

CHAPTER 3: RESEARCH METHODOLOGY

3.0 Introduction

3.1 Research Design

3.2 Area of the Study

3.3 Population of the Study

3.4 Sample Size and Sample Technique

3.5 Sources of Data Collection

3.6 Instrument for Data Collection

3.7 Validity of the Instrument

3.8 Reliability of the Instrument

3.9 Method of Data Analysis

CHAPTER 4: DATA PRESENTATION AND ANALYSIS

4.1 Introduction

4.2 Presentation And Analysis Of Data

4.3 Descriptive Statistics

4.4 Test of Hypothesis

4.5 Discussion of Findings

CHAPTER 5: SUMMARY, CONCLUSION, AND RECOMMENDATIONS

5.1 Summary

5.2 Conclusions

5.3 Recommendation

Reference

Appendix

ABSTRACT

This study assessed the impact of deposit money banks' services on customer satisfaction in Nigeria. The study specifically was carried out to assess the impact of mobile and internet banking on customer satisfaction, examine the effect of customer care and complaint resolution mechanisms on customer satisfaction, and evaluate the impact of service charges and fees on customer satisfaction. The research adopted the survey descriptive design, and with the aid of the Taro Yamane sampling method, the researcher selected three hundred and ninety-six (396) participants. A self-structured questionnaire was issued to the respondent, from which three hundred and eighty-one (381) responses were retrieved and validated for the study. The study made use of descriptive analysis and inferential statistics, where data from the field survey was analyzed using simple percentages, means, and standard deviations presented in frequencies and tables. A hypothesis test was conducted using the Multiple Regression Statistical Package for the Social Sciences (SPSS v.23). Findings of the study conclude that mobile and internet banking significantly enhance customer satisfaction by providing convenience and ease of use. However, the study deduced that transparent and reasonable service charges positively affect customer satisfaction. Therefore, the study recommends that deposit money banks should review their service charges and fees periodically to ensure competitiveness and fairness, aligning with customer expectations. To mention but a few.

Keywords: Impact, Customer care, Mobile banking, Service charge.

CHAPTER ONE

INTRODUCTION (Preview)

1.1 Background of the Study

The objective of any organization is to satisfy the demands and requirements of its stakeholders (Ehijiele et al., 2018). Addressing the demands and requirements of stakeholders will not only guarantee the organization's existence but also facilitate its prosperity. Customers are regarded as one of the most crucial stakeholders in every organization, since their absence significantly undermines the likelihood of organizational success (Ehijiele et al., 2018; Festus et al., 2020; Michael et al., 2020).

Customer satisfaction is a concept mostly used in the business and commerce sectors. It is a business word that describes a metric assessing the types of goods and services offered by a firm to fulfill client expectations (Babatunde, 2018; Madugba et al., 2021). This may be regarded as the company's primary performance metric. In a competitive environment where firms vie for clients, customer happiness is seen as a crucial differentiator and has increasingly become a fundamental aspect of corporate strategy (Ughulu & Agbonkhese, 2020).

Deposit money banks are created to provide financial services for profit. The fierce competition in the financial services sector poses a significant threat to the profitability of banking institutions of all sizes (Adesola & Ewa, 2020). The competitive landscape and saturation within the banking sector need a heightened customer-centric approach from banks. Consumers encounter a variety of options and are very attentive to the value of their expenditure (Okoye et al., 2018).

Banks play a crucial role in any economy by providing a range of financial services to diverse individuals. Banks provide services for individuals seeking to conserve their funds and belongings, as well as financing for new enterprises intending to invest and for established organizations hoping to develop (Esiti & Ayodele, 2020; Adesola & Ewa, 2020). This is substantial assistance in facilitating a nation's economic progress. Historically, while providing banking services, account books were issued to consumers who established savings accounts, and checkbooks were provided to those with current accounts for operational purposes (Timothy, 2012), cited by Edeh et al. (2019). Currently, the banking sector in almost every global economy has entered an era characterized by 'menu-driven ultra-generous specialized software,' known as banking apps, which greatly facilitate banks in the collection, storage, processing, and transmission of client data with efficiency (Edeh et al., 2019).

In Nigeria, deposit money banks have adopted digital transformation to enhance their competitiveness and address the evolving demands of their clientele. The incorporation of technology-driven financial services has profoundly impacted customer satisfaction, as demonstrated by studies showcasing the advantages of electronic banking systems within the Nigerian banking industry (Adesola & Ewa, 2020; Okoye et al., 2018). In light of these developments, obstacles such as inadequate network infrastructure and cybersecurity threats persist, hindering the effective implementation of these services. Nevertheless, the increasing acceptance of mobile and internet banking highlights the readiness of consumers to adopt cutting-edge banking solutions that resonate with their lifestyles and preferences.

A significant element impacting customer satisfaction in deposit money banks is the efficiency of customer service and the processes in place for resolving complaints. Financial institutions acknowledge the significance of delivering outstanding customer service to cultivate and sustain enduring relationships with their clients. Effective customer care involves timely responses to inquiries, adept resolution of complaints, and proactive engagement with customers to meet their needs. Research indicates that the caliber of customer service has a direct effect on customer loyalty and satisfaction levels (Esiti & Ayodele, 2020; Fadaka & Azeez, 2020; Edeh et al., 2019). Financial institutions that emphasize a focus on the needs and preferences of their clients are more effectively equipped to maintain their existing customer base and draw in new patrons.

A multitude of financial institutions have developed specialized customer service divisions and have implemented various communication channels, such as social media platforms, email, and call centers. The purpose of these initiatives is to improve customer experiences through the provision of prompt and effective responses to their inquiries (Chikere & Poi, 2021; Ehijiele et al., 2018). Nonetheless, challenges such as bureaucratic delays and insufficient staff training persist in obstructing the efficacy of these mechanisms.

The imposition of service charges and fees represents a crucial factor that profoundly affects customer satisfaction within deposit money banks. Clients anticipate clarity and equity regarding the fees associated with banking services (Festus et al., 2020). Unwarranted or concealed fees frequently result in discontent and undermine confidence in financial entities. Financial institutions are required to find an equilibrium between sustaining profitability and guaranteeing customer contentment through the application of fair and defensible fees (Adewoye & Olugbenga, 2018; Kolapo et al., 2021). Clear communication regarding service charges and regular assessments of fee structures are vital practices that foster customer trust and satisfaction.

In Nigeria, the matter of service charges and fees has sparked considerable debate among consumers. Numerous deposit money banks encounter scrutiny for levying substantial fees on transactions, account maintenance, and various banking services (Adejare, 2018). This has led to the intervention of regulatory bodies, including the Central Bank of Nigeria (CBN), which have established guidelines for service charges to safeguard customers against exploitative practices (Adesola & Ewa, 2020; Adejare, 2018; Gbemisola & Lucas, 2018). Although these measures have offered a degree of relief, ongoing monitoring and enforcement remain essential to guarantee adherence and promote customer satisfaction.

Deposit money banks are advancing notably in enhancing customer satisfaction by embracing digital banking solutions, refining customer care mechanisms, and implementing equitable service charges. Nonetheless, opportunities for enhancement remain, especially in tackling infrastructure issues and guaranteeing adherence to regulatory standards. This research aims to assess the influence of deposit money banks' services on customer satisfaction in Nigeria.

1.2 Statement of the Problem

The worldwide banking sector is pivotal in promoting economic growth by delivering vital financial services to people, enterprises, and governments. Nonetheless, despite significant progress in banking processes and technology, client satisfaction continues to be a critical issue worldwide. In emerging countries such as Nigeria, where deposit money banks (DMBs) are crucial for financial intermediation, achieving client happiness has become a fundamental component of their operating strategy. Researchers such as Ehijiele, Basil, and Sina (2018) assert that electronic banking developments significantly impact client satisfaction levels. Adesola and Ewa (2020) similarly emphasize the role of banking services in economic development, although the degree to which these services meet consumer expectations continues to be questioned.

Deposit money banks in Nigeria have seen substantial changes, especially with the incorporation of mobile and online banking, improved customer service, and the establishment of competitive service fees. These innovations are anticipated to enhance client experiences and satisfaction levels. Nevertheless, research conducted by Fadaka and Azeez (2020) and Ikpefan et al. (2018) demonstrates a discrepancy between client expectations and the quality of services provided by banks. Challenges such as network outages, elevated transaction costs, and ineffective complaint resolution processes consistently hinder client happiness. Moreover, Esiti and Ayodele (2020) contend that relationship marketing tactics have failed to achieve the intended results in alleviating consumer unhappiness and switching behaviours.

The Nigerian banking business is marked by fierce rivalry, as institutions attempt to maintain and grow their clientele. Notwithstanding these efforts, consumer complaints over service performance, accessibility, and expenses persistently escalate, as seen by Adejare (2018) and Eyigege and Mn (2018). These challenges pose significant enquiries about the efficacy of financial services and the sufficiency of customer-centric innovations in attaining contentment. The disparity in service quality across different banks exacerbates the situation, leading to uneven client experiences.

Understanding the fundamental aspects that influence customer satisfaction in deposit money institutions is vital due to its pivotal role in fostering loyalty and driving corporate success. Research conducted by Chikere and Poi (2021) and Oluwaseun and Amos (2021) underscores the significance of strategic innovations and efficient service delivery in improving customer experiences. Nonetheless, a thorough assessment of the influence of mobile and online banking, customer support systems, and service fees on customer satisfaction in Nigeria is absent. This research seeks to address this gap by offering empirical insights into the impact of these variables on customer satisfaction within the Nigerian banking sector.

1.3 Objectives of the study

Primarily, this study will carry out an in-depth study of the Impact of deposit money banks service on customer satisfaction in Nigeria. The specific objectives are as follows:

i.To assess the impact of mobile and internet banking on customer satisfaction in deposit money banks.

ii.To assess the impact of customer care and complaint resolution mechanisms on customer satisfaction in deposit money banks.

iii.To assess the impact of service charges and fees on customer satisfaction in deposit money banks.

Other parts of chapter one include:

1.4 Research Questions

1.5. Research hypotheses

1.6 Significance of the study

1.7 Scope of the study

1.8 Limitations Of The Study

1.9 Definition of terms

CHAPTER TWO

LITERATURE REVIEW (Preview)

This chapter critically examines relevant literature that would assist in explaining the research problem and, furthermore, recognizes the efforts of scholars who have previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps. This chapter, therefore, focuses on the deposit money banks, concept of customer satisfaction, measures of customer satisfaction, customer satisfaction in deposit money banking, etc. The chapter is sub-grouped into the following:

Conceptual Framework

Theoretical Framework

Empirical Review

Gaps in literature

CHAPTER THREE

METHODOLOGY (Preview)

Research Design: The study adopted a descriptive research design.

Population of the Study: The population of the study comprises customers of Zenith Bank Plc, Udoudoma, Uyo, Akwa Ibom State, who have active accounts with the bank.

Sample Size Determination: The study adopted the Yamane formula to determine a sample size of 396 participants.

Sampling Technique: The study employed stratified and convenience sampling techniques to select the individual respondents.

Research Instrument: The study utilized a self-developed structured questionnaire as the instrument for data collection.

Methods of Data Analysis: The collected data were analyzed using frequencies, percentages, means, and standard deviations to summarize and present the demographic characteristics of the respondents and their opinions. Inferential statistics, such as Regression Analysis, were used to test the hypotheses.

CHAPTER FOUR: RESULTS

MAJOR FINDINGS (Preview)

The analysis results were presented in tables and charts. Based on the results obtained from the analysis, the following findings are made:

i. The study found that mobile and internet banking positively and significantly impact customer satisfaction in deposit money banks, as evidenced by mean scores ranging from 3.04 to 3.27, which are above the acceptance benchmark of 2.50. This was further confirmed by the result of the corresponding hypothesis test, which showed a regression coefficient of 0.452, t-value of 10.868, and p-value of 0.000 (p < 0.05), leading to the rejection of the null hypothesis. This implies that improved convenience, accessibility, transaction speed, security, and reduced need for branch visits enhance customer satisfaction in deposit money banks.

ii. The study found that customer care and complaint resolution mechanisms positively and significantly impact customer satisfaction in deposit money banks, as evidenced by mean scores ranging from 3.12 to 3.24, which are above the acceptance benchmark of 2.50. This was further confirmed by the result of the corresponding hypothesis test, which showed a regression coefficient of 0.326, t-value of 7.647, and p-value of 0.000 (p < 0.05), leading to the rejection of the null hypothesis. This implies that prompt responses to inquiries, efficient complaint resolution, multiple customer support channels, staff professionalism, and effective complaint handling enhance customer satisfaction.

iii. The study found that service charges and fees negatively and significantly impact customer satisfaction in deposit money banks, as evidenced by mean scores ranging from 2.93 to 3.08, which are above the acceptance benchmark of 2.50. This was further confirmed by the result of the corresponding hypothesis test, which showed a regression coefficient of -0.159, t-value of -3.728, and p-value of 0.000 (p < 0.05), leading to the rejection of the null hypothesis. This implies that unreasonable service charges, inadequate transparency, and hidden fees reduce customer satisfaction and may discourage customers from continuing their banking relationships.

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

This chapter covers the following outline:

5.1 Introduction

5.2 Summary Of The Study

5.3 Conclusion

5.4 Recommendation

5.5 Contribution to Knowledge

5.6 Suggestions for Further Studies

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