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An Assessment Of Customers’ Satisfaction On E-banking Servie In Nigeria

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Today’s financial system is the product of centuries of innovation. It started as a barter economy and has moved through various incarnations in response to limitations inherent in the evolving systems (Ajayi & Ojo, 2006). Changes will definitely continue to occur in response to social and technological advancements. This has led to a shift from the old cash handling system to cashless society, which is in vogue worldwide. The introduction of the cashless policy demands for e-banking. To this end, the world has witnessed an upsurge of electronic payment instruments meant to facilitate trade and simplify payments.

According to Burr (1996), e-banking is described as an electronic connection between the bank and their customer in order to prepare, manage and control financial transactions. It can also mean the delivery of banking services and products through the use of electronic means irrespective of place, time and distance. Such products and services can include deposit-taking, lending, account management, the provision of financial advice, electronic bill payment, and the provision of other electronic payment products and services such as electronic money. As a business tool, e-banking is rapidly transforming the world of commerce and banking, making banks faster and more efficient and allowing them to provide more personalized services to the user customer.

In the past few years, Nigerian banks and generally the financial services industry embraced electronic banking, which has been made possible by the advancements in information technology (IT). The Central Bank of Nigeria (CBN) has in recent times engaged in series of reformations aimed at both making the Nigerian financial system formidable and enhancing the overall economic performance of Nigeria so as to place it on the right path in tune with global trends (Ajayi & Ojo, 2006).

According to Sanusi (2002), the introduction of such e-payment products in Nigeria commenced in 1996 when the CBN granted All states Trust Bank approval to introduce a closed system electronic purse called ‘ESCA’. Many banks therefore launched their websites between 1998 and 2000 with a view to starting Internet banking. Recently, e-banking has become the way for the development of banking system and the role of e-banking is increasing in many countries.

A number of factors have been identified as the tonic that has driven the uptake of e-transactions in the country. One is the liberalization of the telecoms industry that brought about the GSM revolution. The spread of the technology with the benefits which has led to the nation witnessing an increased subscriber base from a million to over 60 million has driven the spread of electronic banking (Black, Lockett, Winklhofer & Ennew, 2001)
Another factor is the consolidation in the banking industry, which has renewed confidence in the sector and put more money in the hands of the banks that survived the consolidation. With more money to invest, banks now looked for creative ways through which their customers could conveniently have access to their funds 24 hours, 7 days a week, for a small fee. Competition brought about by consolidation also renewed the urge of banks to deploy the platform of technology to satisfy their customers and make things easy for them.

There is currently no bank in Nigeria that does not offer electronic banking services. It has become a viable way of doing business in the country and despite some challenges; it is a platform that has come to stay. For example, the card business according to Fust (2002), contributes as much as 30% to the bottom lines of banking institutions in developed economies. Nigerian banks have redefined themselves and now offer value added services geared at ensuring ease and convenience for their customers, reducing overheads, increasing profitability by redirecting the energy of their members of staff via moving small cash and non cash transactions to channels outside the banking halls.

There are currently 4500 ATM’s as opposed to 1060 available a year ago on the Interswitch platform while POS terminals have increased from 3300 to over 8000 (Black, Lockett, Winklhofer & Ennew, 2001).

Apart from being driven by the need for electronic services, the rise in the adoption of the electronic mode has been driven by the love of Nigerians for new things and for technology. The surprising part of this is that the uptake of technology in the nation cuts across all classes of people. Okada riders, market women and artisans make as much use of this e-payment platform as well as the upwardly mobile professionals. With the mass market in Nigeria constituting about 70% of the nation’s Gross Domestic Product (Floh & Treblmaier, 2006), the impact of deploying cards and other electronic mode of banking in the country has led to increased reach as customers can now access their accounts even at locations where their banks are not located through the electronic banking model.

The key to driving relationships between a bank and its customer lies in offering superior, consistent and convenient services driven by technology that will ensure that Nigerians become a reference point as a digitally aware and knowledgeable people in Africa.

However, consumer trust is one of the key factors and key elements of success in e-banking. One of the key factors to develop e-banking service is to attract customers’ trust and satisfaction (Khaksar & Giahi, 2009). This study therefore examined e-banking and determined the factors that influence customers’ trust in its product and services.

The number of internet users in Nigeria has increased drastically in recent years (Perumal & Shanmugam, 2004). However, many are still reluctant to leverage on e-banking in their banking transactions. The developments in the Nigerian banking industry seem not to have achieved their aims. Almost every Nigerian bank encounters similar problems in meeting customers’ expectation of customer satisfaction in their service delivery. Trust has been identified as one of the critical factor that influenced the adoption of e-banking (Suh & Han, 2002).

Generally, bank customers would feel insecure to provide their personal and financial information to the internet banking or on banks’ website, as they do not trust the site is secured enough to perform banking transactions. Related to this problem, empirical evidence implies that customers’ patronage for and reaction to a particular product depends on their level of understanding of what the product can do and what they stand to benefit there from (Balachandher, 2001). In this connection, this study tried to find out the factors that influence customers’ trust in e-banking service.


The following research questions were raised for the purpose of this study:.


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