IMPACT OF E – BANKING ON CUSTOMERS’S SATISFACTION IN ZENITH

BANK PLC.

BY

Yusha’u Muhammed MOHAMMED

MBA/ADMIN/07058/2010- 2011
(G10BAMP8236)

BEING A PROJECT SUBMITTED TO THE POSTGRADUATE SCHOOL OF

AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION (MBA)

DEPARTMENT OF BUSINESS ADMINISTRATION, FACULTY OF

ADMINISTRATION, AHMADU BELLO UNIVERSITY

February, 2013

1
Declaration

I declare that the work in the project report entitled “The impact of e-banking on

customer satisfaction in Zenith Bank Plc” has been performed by me in the department of

Business Administration. The information derived from the literature has been duly

acknowledged in the text and a list of references provided. No part of this project report

has been previously presented for another degree or diploma in this or any other

university.

Yusha‟u Muhammed MOHAMMED _______________ ___________

Name of Student Signature Date

2
Certification

This is to certify that this project titled “The impact of e-banking on customer satisfaction

in Zenith Bank Plc” written by Yusha‟u Muhammed MUHAMMED meets the

regulations governing the award of the degree of Master of Business Administration

(MBA) of Ahmadu Bello University, Zaria and it is therefore approved for its

contributions to knowledge, and literary presentation.

Mal. Ladan Sahnun _________ ______

Chairman, Supervisory Committee Signature Date

_________ ______
Head of Department Signature Date

__________________________ _________ ______

External Examiner Signature Date

Prof. A. A. Joshua _________0 g70.824 189.14 183.74 0.599_

3
Abstract

This study was structured to assess the impact of e-based banking transactions on
customer satisfaction at First Bank Plc. In doing this, the following null and alternative
hypothesis was formulated; that e-transaction has made negative impact on customer
satisfaction (H0) while the alternative hypothesis (H1) is that e-transaction has made
positive impact on customer satisfaction at First Bank Plc. Data was collected from a
sample population through questionnaires; the data collected from respondents was used
to test the hypothesis using the Chi-square method. The analysis made lead to the
rejection of the null in favors of the alternative hypothesis. This study has revealed that e-
transaction has an overwhelming impact on customer satisfaction. In fact, it is quite
important that banks should transcend from the most popular ATM window and focus
more on strengthening other e-banking services like transfer of funds, payment of bill
and other e-banking platforms, which shall in the near future be a critical success factor
for their continued existence and success. Apart from committing more resources in
upgrading those services there is also an attendant need for the banks to invest in
creating customer awareness on the existence of other value added e-banking services
for their utilization. Of particular importance in this drive should be the existence of
round the clock complaint handling desk that should be staffed with qualified and
courteous staff to provide efficient and responsive way-forwards to customers.

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Table of Contents

Title Page - - - - - - - - - - i

Declaration - - - - - - - - - - ii

Certification - - - - - - - - - - iii

Acknowledgement - - - - - - - - - iv

Abstract - - - - - - - - - - v

Table of contents - - - - - - - - - vi

CHAPTER ONE – INTRODUCTION

1.1 Background to the Study------------------------------------------------------------ 1

1.2 Statement of the Problem------------------------------------------------------------ 4
1.3 Objective of the Study---------------------------------------------------------------- 5
1.4 Research Questions------------------------------------------------------------------- 5
1.5 Research Hypotheses----------------------------------------------------------------- 6
1.6 Significance of the Study-------------------------------------------------------------6
1.7 Scope of the Study-------------------------------------------------------------------- 6
1.8 Definition of Terms------------------------------------------------------------------- 7

CHAPTER TWO - LITERATURE REVIEW

2.1 Introduction------------------------------------------------------------------------------- 9

2.2 Concept of E-banking and Customer Satisfaction----------------------------------- 9

2.3 Historical Development of Banking in Nigeria--------------------------------------- 12

2.4 Commercial Banking Perspective in Nigeria------------------------------------------ 13

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The growing adoption of electronic forms of payment in the country has become a

revolution that has astounded stakeholders. From less than 50,000 transactions recorded

on the Interswitch network four years ago, it has increased to over 98,000,000 per month

as at March 2009. (E-Commerce Journal, 2009).

Mitchel Elegbe, the Managing Director of Interswitch, a payment solutions platform

provider with 25 Nigerian Banks on its platform confirmed that the network has

witnessed increased transactions with the adoption of technology by Nigerians. He stated

that by March 2007, the network witnessed 13.6 million transactions, which increased

fundamentally to 51.2 million as at March 2008. Elegbe, added that in 2007, the network

recorded a growth of 276 .2 per cent with a volume of 271 million transactions worth

N430 billion across its entire network from different channels- ATMs, PoS terminals,

mobile, Internet, and bank branches using the network (E-Commerce Journal, 2008).

That Nigerians have stepped up their game is not in doubt with over 42 million cards in

circulation as against 22 million that was in circulation a year ago. A breakdown of the

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automated or not, banks by their nature are continually involved in all forms of

information management on a continuous basis. The Computer is of course an established

tool for achieving a competitive edge and optimal resource allocation.

The most obvious banking application of Computers is customer service. Computerized

banks respond immediately to requests from customers for Statement of Accounts,

Balance and Account activity enquiries e.t.c. With Signature and Image verification

systems, the time taken to offer typical cashier services like receiving and paying out of

cash is minimized. Many consumers also like the idea of not waiting in line to do their

banking, and paying their bills without shuffling papers and buying stamps.

Good customer service quality is the major issue for banks that are operating e-

transactions, which will determine whether the business will survive or fail in the future.

Maintaining effective customer service helps to build and maintain customer‟s

relationship which is the key critical success factor for e-transactions. In order to satisfy

customers‟ needs banks need to set up websites that provide quality information and

services to customers.

Based on the foregoing, the aim of this research work is to assess how the emergence of

electronic transactions i.e. e-banking, serve as a tool for enhancing customer satisfaction

at Zenith Bank PLC from both the customers and Service provider stand point.

1.3 Research Questions

i. What is the impact of e-banking on customer‟s satisfaction?

ii. What are the challenges of e-banking in Zenith Bank plc?

iii. How effective is e-banking as a tool for enhancing customers satisfaction?

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1.4 Objectives of the Study

The specific objectives of the study are to:

i. Determine the impact of e-banking on customer‟s satisfaction.

ii. Identify the challenges of e-banking in Zenith Bank plc.

iii. Assess the effectiveness of e-banking as a tool for enhancing customer‟s

satisfaction.

1.5 Research Hypotheses

This study is based on the following null hypothesis (s)

1. H0: There is no Significant Relationship between E-Banking and Customers

Relationship.

2. H0: E-Banking is an ineffective tool in enhancing customer‟s satisfaction.

1.6 Significance of the Study

This study is believed to be important and is expected to shade more light on electronic

banking and its role in enhancing customer‟s satisfaction.

The study will assist those in search of knowledge with regards to electronic banking and

will expose the benefit of electronic banking to customers.

It will also serve as the basis for further study by researchers who wish to add to existing

knowledge.

1.7 Scope of the Study

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This study covers Zenith Bank Plc.‟s e-banking system and its role in enhancing

customers satisfaction in kaduna. The study covers a time frame of five (5) years that is

from 2004 to 2009. The scope of these chapters will look at the electronic banking which

is expected to play a significant role in customer satisfaction in Zenith Bank Plc in

Nigeria.

1.8 Definition of Concepts

For the purpose of this study, the following terms mean;

Electronic Transaction - A grouping of information or data stored electronically in a

defined format that has a distinct meaning as a set.

Customer Satisfaction - is a measure of how products and services supplied by a

company meet or surpass customer expectation. It is seen as a key performance indicator

within business.

Electronic banking - it generally implies a service that allows customers to use some

form of computer to access account-specific information and possibly conduct

transactions from a remote location - such as at home or at the workplace.

Web site – a web site is a collection of web pages, images, videos or other digital assets

that is hosted on one or more web servers, usually accessible via the internet.

Internet – is a world wide, publicly accessible series of interconnected computer

networks that transmit data by packet switching using the standard internet protocol.

Product-centric - centralizing information on a particular product.

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Customer-centric - centralizing information to the individual consumer.

Intuit's Quicken - is an American software company that develops financial and tax

preparation software and related services for small businesses, accountants and

individuals. It is incorporated in Delaware and headquartered in Mountain View,

California.

Bank - a financial institution that accepts deposits and channels the money into lending

activities.

GSM - GSM (Global System for Mobile communications) is an open, digital cellular

technology used for transmitting mobile voice and data services.

Microsoft's Money - is Microsoft's personal finance software. It is designed for

computers using the Microsoft Windows operating system.

Interswitch – A private Ltd company owned by Nigeria‟s mega banks that provides on-

line, real time electronic payment systems to support automated customer transactions

from different customer touch points and transaction channels.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

There are several definitions of banks given by authorities, scholars and in some cases law

or regulations. Thus, there's no accepted definition. George, (2000) sees banking business

as a service which involves intermediation of finances through the mobilization of

services from the units generating surplus funds for lending, to promote growth and

development which in turn maximizes profit for the organisation.

Sec.16 of Banks and other financial institutions Decree 1991 (as amended) defines

banking business as “The Business of receiving deposits of current account paying or

collecting of finance or such other business as the Governor (CBN) made by order,

published by gazette.” Therefore, any organization or entity that carries out the above-

mentioned Business is referred to as BANK.

2.2 Concept of E-banking and Customer Satisfaction

Electronic banking is defined as the automated delivery of new and traditional banking

products and services directly to customers through electronic, interactive

communication channels. E-banking includes the systems that financial institution

customers, individuals or businesses, to access accounts, transact business, or obtain

information on financial products and services through a public or private network,

including the internet. E-banking is also called Internet banking, on-line banking or PC

banking. E-Banking may include ATMs, wire transfers, telephone banking, electronic

funds transfers and debit cards. Nowadays, internet banking sites process customer

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service inquiries, allow transactions from one account to another, take loan applications,

open new accounts etc. Some provide commercial services and others are full service

banks rushing to get there. In addition to the rapid deployment of electronic bank

„branches‟ an entire financial community has suddenly appeared, offering most and

financial service a customer could want. New forms of money are being coined to pay

for transactions, and untraceable payment protocols are being tested and marketed. As

fewer and fewer bank customers visit banks, more and more are using ATMs, home

banking terminals and the internet to do their financial business. This „charge‟ to the

internet is an offensive, aggressive strategy to capture a large share of the financial

services market. It is supported by speed of light, telecommunications, powerful,

inexpensive computers and secure encryption. This charge to the internet is increasing

the number of competitors in the market. Technology has introduced new ways of

delivering banking to the customer, such as ATMs and internet banking. Hence, banks

have found themselves at the forefront of technology adoption for the past three decades.

Banks began at to look at e-banking as a means to replace some of their traditional bank

functions, e-banking products/services like ATM and electronic funds transfer were a

source of differentiation of banks that utilized them. The evolution of the e-banking

industry can be traced to the early 1970s. Banks began to look at e-banking as a means

to replace some of their traditional bank functions, for 2 reasons. Firstly, branches were

very expensive to set up and maintain due to the large overheads associated with them.

Secondly e-banking product/services like ATM and electronic fund transfer were a

source of differentiation for banks that utilized them. Being in a fiercely competitive

industry, the ability of banks to differentiate themselves on the basis of price is limited.

17
Technology has introduced new ways of delivering banking to the customer, such as

ATMs and Internet banking. Hence, it is imperative for banks to align their strategies in

response to changing customers' needs and developments in technology.

Customers are not entirely satisfied with the quality of service provided by commercial

banks in Nigeria. Queuing time is considered reasonable at ATMs but too long in

banking halls. Part of the dissatisfaction of customers‟ stems from the fact that

customers are not aware and knowledgeable about the full range of e-banking services

provided by banks. The decline in the quality of banking services maybe attributed to the

fact that there has been an increase in the volume of banking transactions. It is often

reported that the grievance redressed machinery in the banks are not adequate enough to

address the issues to the full satisfaction of the customers. Therefore, this is a clear-cut

indication that commercial banks have to put in more effort into e-banking services to

improve the satisfaction of their customers. The problem presented is to identify where

the delivery channels are lacking in providing satisfaction to customers and what can be

done to resolve this problem

2.3 Historical Development of Banking in Nigeria

Banking started in Nigeria as early as 1892, in Lagos with the opening of the first

branch of the American Banking Corporation (ABC), Messrs Elder Dempster and co. A

shipping firm which was based in liver pool, England was behind its formation.

However, its interest was transferred to Elder Dempster and co., which led to the formation

of the British Bank of West Africa (BBWA), in 1983. British Bank of West Africa, was

18
registered in London as a limited liability company in March 1894 and the first branch

was opened in Lagos in the same year.

Brown (1966) Reported that 1912, the year the West African Currency Board (WCB) was

formed, there was only one bank operating in Nigeria, the British Bank of West Africa

after taken over three other Banks established earlier in Nigeria in 1917, the British Bank

of West Africa was joined by the colonial bank, which became part of Barclays, DCO in

1925. As of 1949, expatriate banks dominated the Nigerian commercial banking. This is

evidence by the establishment of the British and French Bank (now united Bank of

Africa) and the liquidation of established indigenous banks.

The banking ordinance Act was enacted in 1952 aimed at sanitizing the industry, but the

Act turned to be inadequate and inefficient. Hence the central Bank of Nigeria (CBN) was

established in 1958 to suppress and control the banks in order to regain the lost public

confidence.

1986 saw the deregulation and liberalization of the banking industry and thus, the private

participants came into the industry and more banks were established. As at the end of

1991, the total banks in Nigeria rose to 120 from 26 in 1981. As at march 2003, CBN

reported that there are 95 banks licensed in Nigeria. This is made up of the CBN, 80

commercial banks (some of which are universal), 11 merchant banks (most of which are

subsidiary of universal banks and 6 development banks).

In 2005, the CBN increase the paid up capital of banks to 25b. this is popularly known

as the Banking consolidation. Consolidation saw the emergence of 25 banks from the 89

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banks through the liquidation of 14 banks and the merging of some other banks to make

up the requirement.

In conclusion, the banking industry in Nigeria is one of the ever growing and

expanding industries, in the economy with banks declaring huge profit. Apart from the

government, it is believed to have the highest employer of labour.

2.4 Commercial Banking Perspective in Nigeria

According to The Country Studies Series a Handbook Program sponsored by the U.S.

Department of Army Nigeria's first bank, the African Banking Corporation, was

established in 1892. No banking legislation existed until 1952, at which point Nigeria had

three foreign banks (the Bank of British West Africa, Barclays Bank, and the British and

French Bank) and two indigenous banks (the National Bank of Nigeria and the African

Continental Bank) with a collective total of forty branches. A 1952 ordinance set

standards, required reserve funds, established bank examinations, and provided for

assistance to indigenous banks. Yet for decades after 1952, the growth of demand

deposits was slowed by the Nigerian propensity to prefer cash and to distrust checks for

debt settlements.

British colonial officials established the West African Currency Board in 1912 to help

finance the export trade of foreign firms in West Africa and to issue a West African

currency convertible to British pounds sterling. But colonial policies barred local

investment of reserves, discouraged deposit expansion, precluded discretion for monetary

management, and did nothing to train Africans in developing indigenous financial

institutions. In 1952 several Nigerian members of the Federal House of Assembly called

for the establishment of a central bank to facilitate economic development. Although the

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motion was defeated, the colonial administration appointed a Bank of England official to

study the issue. He advised against a central bank, questioning such a bank's effectiveness

in an undeveloped capital market. In 1957 the Colonial Office sponsored another study

that resulted in the establishment of a Nigerian central bank and the introduction of a

Nigerian currency. The Nigerian pound on a par with the pound sterling until the British

currency's devaluation in 1967, was converted in 1973 to a decimal currency, the naira

(N), equivalent to two old Nigerian pounds. The smallest unit of the new currency was

the kobo, 100 of which equaled 1 naira. The naira, which exchanged for US$1.52 in

January 1973 and again in March 1982 (or N0.67 = US$1), despite the floating exchange

rate, depreciated relative to the United States dollar in the 1980s. The average exchange

rate in 1990 was N8.004 = US$1. Depreciation accelerated after the creation of a second-

tier foreign exchange market under World Bank structural adjustment in September 1986.

The Central Bank of Nigeria, which was statutorily independent of the federal

government until 1968, began operations on July 1, 1959. Following a decade of struggle

over the relationship between the government and the Central Bank, a 1968 military

decree granted authority over banking and monetary policy to the Federal Executive

Council. The role of the Central Bank, similar to that of central banks in North America

and Western Europe, was to establish the Nigerian currency, control and regulate the

banking system, serve as banker to other banks in Nigeria, and carry out the government's

economic policy in the monetary field. This policy included control of bank credit

growth, credit distribution by sector, cash reserve requirements for commercial banks,

discount rates--interest rates the Central Bank charged commercial and merchant banks--

and the ratio of banks' long-term assets to deposits. Changes in Central Bank restrictions

21
on credit and monetary expansion affected total demand and income. For example, in

1988, as inflation accelerated, the Central Bank tried to restrain monetary growth.

The three largest commercial banks held about one-third of total bank deposits. In 1973

the federal government undertook to acquire a 40-percent equity ownership of the three

largest foreign banks. In 1976, under the second Nigerian Enterprises Promotion Decree

requiring 60-percent indigenous holdings, the federal government acquired an additional

20-percent holding in the three largest foreign banks and 60-percent ownership in the

other foreign banks. Yet indigenization did not change the management, control, and

lending orientation toward international trade, particularly of foreign companies and their

Nigerian subsidiaries of foreign banks.

At the end of 1988, the banking system consisted of the Central Bank of Nigeria, forty-

two commercial banks, and twenty four merchant banks, a substantial increase since

1986. Merchant banks were allowed to open checking accounts for corporations only and

could not accept deposits below N50,000. Commercial and merchant banks together had

1,500 branches in 1988, up from 1,000 in 1984. In 1988 commercial banks had assets of

N52.2 billion compared to N12.6 billion for merchant banks in early 1988. In FY 1990

the government put N503 million into establishing community banks to encourage

community development associations, cooperative societies, farmers' groups, patriotic

unions, trade groups, and other local organizations, especially in rural areas.

Other financial institutions included government-owned specialized development banks:

the Nigerian Industrial Development Bank, the Nigerian Bank for Commerce and

22
Industry, and the Nigerian Agricultural Bank, as well as the Federal Savings Banks and

the Federal Mortgage Bank. Also active in Nigeria were numerous insurance companies,

pension funds, and finance and leasing companies. Nigeria also had a stock exchange

(established in Lagos in 1961) and a number of stockbrokerage firms. The Securities and

Exchange Commission (SEC) Decree of 1988 gave the Nigerian SEC powers to regulate

and supervise the capital market. These powers included the right to revoke stockbroker

registrations and approve or disapprove any new stock exchange. Established in 1988, the

Nigerian Deposit Insurance Corporation increased confidence in the banks by protecting

depositors against bank failures in licensed banks up to N50,000 in return for an annual

bank premium of nearly 1 percent of total deposit liabilities. Source (www.country-

studies.com/nigeria/banking-and-finance.html).

2.5 Structure of the Nigeria Banking System

The Nigeria Banking system is made up of three regulatory authorities and the licensed

banks (Commercial, universal and specialized).

2.5.1 Regulatory Frame Work in the Nigerian Banking System

i. Companies and Allied matters Act (CAMA) 2004: This law regulates the

incorporation and liquidation of companies in Nigeria registered under the Act.

ii. Banks and other financial institution Act (As Amended) 1991: The law centralized

the function of bank licensing, regulation and supervision in the Central Bank of

Nigeria (CBN) and defined authority for appropriate action to ensure efficient and

prudent operation.

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iii. Central bank of Nigeria (CBN) Decree NO. 24 of 1999: This law repealed the

CBN A ct of 1958.lt confers upon CBN, the powers to carryout it's assigned

function as it's relate to domestic economy and external sector.

iv. Prudential Guidelines Issued by CBN: These guidelines are issued to licensed

banks and their auditors to comply with international banking practice. It is aimed at

addressing requirement for assets classification and disclosure, provisioning,

interest, accruals and off- balance sheet engagements.

v. Statements of Accounting Standard (SAS): These issue by National Accounting

Standard Board,(NASB), to provide a guide for Accounting policies and methods

that should be followed by companies (banks) in the preparation of their financial

statements relative to income recognition, balance sheet classification and many

other provisions.

vi. Foreign exchange (Monitoring and Miscellaneous Provision) Decree 1995: This

decree was promulgated to regulate the foreign exchange market to achieve

exchange rate stability.

vii. Failed banks (Recovery of Debt and Financial Malpractices in Banks) Decree No.

18 of 1994: The degree was promulgated to facilitate the prosecution of those who

contributed to the failure of banks.

viii. Guide lines on universal Banking: These guidelines were made to provide a

guide for banks that wish to become universal the guidelines became effective on 1

January 2001.

ix. E banking Guidelines: It is aimed at regulating issues regulating to information and

communication technology standard under e banking, monetary policy, legal issues

24
relating to banking regulation and customer right protection and regulatory and

supervision and e banking.

2.5.2 Regulatory Authorities in the Nigerian Banking System

The regulatory authorities are saddled with the responsibility of administering the

framework:

1. Central Bank of Nigeria (CBN)

This is the apex of regulatory authority of the Nigerian banking system. It was

established by the CBN Act of 1958 and commenced operations on 1st May 1959. The bank

promote monetary stability and a sound financial system and also responsible for

licensed banks.

2. Federal Ministry of Finance

It advises the federal government on it's fiscal operations and also interacts with the CBN

on monetary policy matters.

3. Nigeria Deposit Insurance Commission (NDIC)

The promulgation of Decree No. 24 of 15th June 1988 led to the establishment of NDIC. It

was set up to provide deposit insurance and related services for banks, aimed at promoting

confidence in the banking industry.

4. Financial Services Regulatory Committee (FSRC)

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It was set up for the purpose of coordinating the supervision of financial institutions

in the country. Membership is drawn from CBN, NAICOM, SEC. CAC and the Federal

Ministry of Finance.

5. National Accounting Standard Board (NASB)

The Board was set up to provide a guide for accounting policies and methods that should be

followed by companies (banks) in the preparation of their financial statements. The Board

since inauguration has issued 21 statement of Accounting Standards (SAS1 – SAS21).

Banks in Nigeria can be classified using different criterion. This includes period of

licensing and economic period in the country.

CBN (2001) classified banks by licensing period as follows:

a. First Generation Banks - These are banks licensed before 1960.

b. Second Generation Bank:- These are banks licensed between 1960 and 1980.

c. Third Generation Banks:- These are banks licensed between 1980 and 1998.

d. Fourth Generation Banks:- These are banks from 1998 to date.

Woherem (2000) classified banks in Nigeria by the economic period in the country

when it came into existence as follows:

a. Old Generation Banks: Banks in existence and operating before the

introduction of Structural Adjustment Programme (SAP) in 1986.

b. New Generation Banks: These are banks that came into operations after the

introduction of SAP in 1986.

2.6 Financial Services in the Nigerian Banking System

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The financial services obtainable in Nigerian banks can be looked upon in two broad

categories. These are retail Banking and whole sale Banking. 2.6.1. Retail Banking

This is usually carried out by commercial Banks the services include:

a) Acceptance of Deposits: They accept deposits from customers and keep them

using an account. This account could be Saving, Current. Time or Fixed Deposit.

The charge or pay interest depending on the type of account.

b) Lending of loans or Overdrafts: Short loans are granted to customers

depending on their agreement, interests are charged on this loan. They also allow

their customers current account only to withdraw in excess of their deposit is known

as overdraft.

c) Discounting Bills of Exchange: They collect immature Bills of Exchange and

pay the bearer the face value of crafter deducting some charges called discount) his

money before the bills of exchange matures.

d) Financing Small and Medium Scale Enterprises and Agriculture: The

government also modify a service of banks to provide finances for small and

medium scale enterprises (SME) and also agricultural finance.

e) Act as Agent of Payment: They provide service that allows the customers to

pay debt, goods or service through the bank.

They also transact in stock exchanges and international money transfers. Other services

include, risk management and control and the safe keeping of valuable materials.

2.6.2. Wholesale Banking

This is usually carried out by merchant and specialized banks. They include:

a) Financing medium and long-term project

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b) Financing International Trade transaction

c) Risk management control

d) Corporate Banking

e) Advice customers in investment decisions

f) They also specialized in dealings in stock exchanges and bills of exchange

transaction.

2.7 Origin and Operations of E-Banking

The rapid advancement in Information and Communication Technology (ICT) has had a

profound impact on the banking industry and the wider financial sector over the last two

decades and it has now become a tool that facilitates banks‟ organizational structures,

business strategies, customer services and other related functions. The recent “IT

revolution” has exerted far-reaching impacts on economies in general, and the financial

services industry in particular (Ranee, 2008).

Within the financial services industry, the banking sector was one of the first to embrace

rapid globalization and benefit significantly from IT development. The technological

revolution in banking started in the 1950s, with the installation of the first automated

bookkeeping machines at banks. This was well before the other industries became IT

perceptive. Automation in banking became widespread over the next few decades as

bankers quickly realized that much of their labor-intensive information-handling

28
processes could be automated with the use of computers. The first Automated Teller

Machine (ATM) was introduced in the USA in 1968, and it was only a cash dispenser.

The advent of ATMs helped to improve customer convenience and reduce costs

compared to services before ATMs, where withdrawing funds, accounts inquiries and

transferring money between accounts required face-to-face interaction between bank staff

and customers (Ranee, 2008).

The financial services sector has undergone historic changes in the past decade. The so

called e-developments are rapidly emerging in all areas of financial intermediation and

financial markets: we can talk about e-finance, e-money, e-banking, e-brokering, e-

insurance, e-exchanges, and even e-supervision. New information technology is

becoming the most important factor in the future development of banking, influencing

marketing and business strategies of banks. The driving forces behind the rapid

transformation of banks are radical changes in the economic environment: innovations in

information technology, renewed financial products, liberalization and consolidation of

financial markets, deregulation of financial intermediation, etc.

These and other factors make the formation of bank strategy complicated. The process is

threatened by unpredictable developments and changes in the economic environment;

and therefore, the strategies have to be flexible in order to make them adjustable to

changes. The question is no longer whether the emergence of the Internet is a threat or an

opportunity, as those who have decided to protect themselves from possible dangers

instead of using the opening opportunities, are doomed to be ousted from the market.

Electronic banking is the newest delivery channel for banking services. The definition of

e-banking varies among studies, partially because electronic banking includes several

29
types of services. Bank customers can request information and carry out most retail

banking services via a computer, television or mobile phone (Daniel, 1999). For example,

(Burr, 1996) describes it as an electronic connection between the bank and the customer

in order to prepare, manage and control financial transactions.

Electronic banking can also be defined as a variety of the following platforms:

(a) Internet banking (or online banking);

(b) Telephone banking;

(c) TV-based banking;

(d) Mobile phone banking;

(e) PC banking (offline or automatic banking).

2.8 The Concept of E-Banking

Ovia (2002), Bello (2002) and Shamsudeen (2002) states that e-banking is the delivery

of banking services and products through the use of electronic devices to customers

irrespective of place, time and distance. Bello went further to state that this form of

transaction process has transformed the cash based economy to an electronic based.

From the researcher's point of view, e-banking refers to the use of information and

communication technology to transform the aspect of banking as it relates to the

provision of services and management of customer relationship.

2.9 The Evolution of E-Banking in the Nigerian Banking System -Abdulhakeem

(2002), traced the evolution of e-banking to the approval given to All States Trust Bank

30
Limited by the CBN to offer a financial product known as ESCA – a Smart card

Electronic purse. Subsequently Diamond Bank Limited introduced a parallel product

known as Diamond Pay card.

In February 1998, a consortium of licensed banks floated a Smart card company, Smart

card Nigeria Plc. With the mandate to produce and manage cards issued by member

Banks of the consortium. Another consortium of about 30 banks under the auspices of

Gemcard introduced Smart cards into the banking system in 2000.

Many banks launched their website between 1998 and 2008 but most are for

information purpose. Recent survey of the 25 licensed banks that emerged after the

nation showed that all the banks have one form of e-banking products or service; popular

among the service is the ATM. All the 25 banks have web site.

2.10 E-Banking Products/Services in the Nigerian Banking System

CBN (2003) op.cit reported that following e-banking services are available in the Nigerian

Banking System.

Automated Teller Machines (ATM)

Cards

Telephone Banking

Personal Computer (PC) Banking

Internet Banking

2.10.1 Automated Teller Machines (ATM)

31
An ATM is a machine built into a wall with a computerized s\stem connected to the bank

that is providing it. To use, the machine a person must acquire a card called ATM card to

be issued by providers of such services. This card enables the holder to cash, make

deposits or transfer funds between accounts.

When this card is inserted a pin (personal identification number) is entered to give the

customer access to cash all day long. The ATM is popularly referred to as a cash

dispensing machine. It allows customer to withdraw cash and perform other banking

transactions at anytime of the day without going to the bank branch. They are usually

built outside banks branches, mails, stations, airports e.t.c

2.10.2 Smart Cards

Smart card is a plastic card with an embedded microchip, and with an interface that

allows it to receive power and communicate with suitable terminals. The first large scale

smartcard application was implemented in the U.S. in 1987. In 1994, Europay,

MasterCard and Visa (EMU) published Joint specifications for global microchip based

bankcard (Smartcard). As Smart card can be anyone of the following:

a) Credit card:-These are cards that give credit to holders for a specified time periods

and amounts of money. The holder does not need to have money in his/her

account to qualify for a credit card, and the bank charges interest on such credit.

Once the card holder reaches his limit for the month, purchases can no longer be

made. It usually has an expiring date.

b) Charge Card: It is similar to credit cards and allows the cardholder to

purchase goods and services up to a pre-agreed limit. Unlike credit cards,re charge

cards must be paid off in full every month.

32
c) Debit Card: Debit card allow a card holder to purchase goods and services to

whatever extent he wants as long as his bank balance covers the amount. This

means the usage of the card is prepaid.

2.10.3 Telephone/Mobile Banking

Telephone banking is a service that enables customers to access banking services through

the telephone anywhere, anytime and in whatever, manner they want. All that customer

requires is a telephone equipped with or without a fax capability. The Bank requires an

information system that is configured to respond and act on the customers instructions

initiated through the telephone. The system presents its output in the form of an

Interactive Voice Response (IVR). Where text is converted to voice (sound).

It allows link to direct connection either as private networks lines or public networks.

It allows the customer's request to account balances or make fund transfer or other

personalized customer service.

Mobile banking solution on the other hand operates over Global System for Mobile

Communication (GSM) or other digital wireless devices such as Smart phones and

communication. The technology solutions are based on the latest mobile application

technology like Wireless Application Protocol (WAP) and Short Messaging Services

(SMS).

The advantages of mobile banking includes status enquiry, access to prompt and effective

communication and billing services.

33
2.10.4 Internet Banking

Internet Banking belongs to the species of financial services variously known as home

banking, remote electronic banking, self-service banking and other names inciting that

customers do their banking at home/at work.

Internet Banking refers to a situation where customers can make use of computers

connected to the internet to have access to their bank accounts, such that they can conduct

most of their usual banking transactions over the internet. The user makes enquires and the

responses of these enquires from a computer-based system are displayed on the

computer screen and viewed by the enquirer. The result of such enquiry can be printed out

on paper or saved on the computer for future use. However, for a user to take

advantage of internet banking provided by a bank he must have all the under listed.

i. A computer system, be it a desktop, laptop or palm-top

ii. The computer system must have an internal/external modem.

iii. The user must be connected to the Internet through an Internet Service Provider

(ISP).

iv. The computer system must have enabling software needed for this internet service.

v. Finally, he must have an account with a bank operating or offering internet Banking.

2.10.5 TV Banking (t-Banking)

Turkey (2000) states that TV is the latest one of the emerging digital content and

access platform Broadcasting the TV content in digital form provides at least 6 times

capacity savings on the allocated frequency bands of the delivery medium whether it is air,

cable or satellite.

34
Aminu (2002) sees t-banking as the using of TV to access the internet without the use

computer. There will be attached to the TV, a device which will come with a

smartcard reader to enable users to load their Smartcard at home in addition to other

online services.

Considering the cost ad the number of TV users, t-banking will be able to reach every

nook and crannies of Nigeria. Though this technology is still in the preparation stage in

Nigeria, it will have great effect on service deliver when implemented.

2.11 Benefits of E-Banking to Bank and Customer

Benefits from the Banks’ Point of View

The first benefits for the banks offering Internet banking services is better branding and

faster reaction to market changes. Banks offering such services are perceived as leaders

in technology implementation, and therefore, they enjoy a better brand image.

Other benefits can be measured in monetary terms. The ultimate goal of a company is to

maximize owners‟ profit, and banks are no exception. Automated e-banking services

offer a perfect opportunity for maximizing profits. According to a survey by Booz, Allen

and Hamilton, an estimated cost providing the routine business of a full service branch in

USA is $1.07 per transaction, as compared to 54 cents for telephone banking, 27 cents for

ATM banking and 1.5 cents for Internet banking. In Nordea Bank, Finland, one online

transaction costs the bank an average of 11 US cents, compared to $1 for a transaction in

a branch. The difference in net cost in the US and Finnish banks can be explained by

smaller population in Finland and the scale effect in case of the USA (Olga, 2003).

35
In Estonia, the fee for an inland transaction concluded in a bank office is 9–12 kroons,

transaction fee in automated telephone banking is 0–6 kroons, direct debits are free of

charge, and fees for ATM and Internet banking services are 0–3 kroons (Olga, 2003).

Comparing this information with services price list allows us to conclude that the

profitability of e-channel banking services is high for banks. Regarding service fees

(income side from banks point of view), an average payment in Internet bank costs four

times less than a payment in a bank office. Regarding actual costs (costs from banks

point of view), a payment via Internet bank costs seven times less than a payment in the

office (Olga, 2003).

Benefits from Customers’ Point of View

The main benefit from bank customers‟ point of view is significant saving of time due to

the automation of banking services processing and introduction of easy maintenance tools

for managing customers‟ money. The main advantages of e-banking for corporate

customers are the following:

a. Reduced costs in accessing and using banking services.

b. Increased comfort and saving of time – transactions can be made 24 hours a day,

without direct interaction with the bank.

c. Quick and continuous access to information. It is easier for companies to check on

multiple accounts at the click of a button.

d. Better cash management. E-banking facilities speed up cash cycle and increase the

efficiency of business processes, as large variety of cash management instruments

are available on Internet. For example, it is possible to manage a company‟s short-

36
term cash via Internet banks (investments in overnight, short and long-term

deposits, commercial papers, bonds, shares and money market funds).

Private customers seek slightly different kind of benefits from e-banking. In a study on

online banking drivers Aladwani (2001) found that providing faster, easier and more

reliable services to customers were amongst the top drivers of e-banking development.

The main benefits of e-banking for private customers are as follows:

1. Reduced costs. Regarding the costs of availability and using of various banking

products and services.

2. Convenience. All banking transactions can be performed from the comfort of

one‟s home, office or any other place a customer wants.

3. Speed. Operating speed of the medium is very fast; therefore, customers can

postpone the transactions until the last minute.

4. Funds management. Customers can download their history of different accounts

and do a „what-if‟ analysis on their PC before performing any transaction on the

web. This allows better funds management.

2.12 Merits and Demerits of E-Banking in Nigeria

i. Breakdown of Geographic Barriers:

The consumer can conduct the full range of banking business with a telephone, personal

computer, or an ATM, it does not matter where the physical location of the bank is thus,

and geographic convenience would not make any difference. This will allow the

consumer to choose banking services largely on the basis of price and service efficiency

considerations.

37
ii. New Competitive Strategies for Banks:

This might make some banks choose to unite their branch distribution with other retailers

such as supermarket by using a small but high tech branch structure. This will help three

banks capture that segment of the retail market that are not ready for total e-banking

services or those who might not actively seek information about financial products.

iii. Commodization of Banking Products

With e-banking customers will not necessarily look for a "complete bundle" of banking

services from a single bank, but could bank on a product-by-product basis or as financial

services become increasingly standardized as they are already automated, perhaps on a

"commodity-by-commodity basis. Thus, there will be no big branch specialized in

being a very big large provider of all banking services.

iv. Capacity to process high volume of transactions, which will result in

monumental increase in volume of business.

v. Reduction in cash transactions with long-term prospects of minimal cash

handling.

vi. Customer relationship managements can easily be done without physical contact

with bank official.

vii. Virtual Banks: There would be no need for many branch networks with e-

banking. This is so because the customer does his transaction anywhere.

viii. Flexibility in operation and transaction.

ix. Reduction in stationary use and distribution cost; since online publication

replaced paper-based publication.

38
x. It will significantly reduce the cost of many transactions necessary to

produce and distribute goods and services.

xi. Increase in competition, making banking charges more transparent and

broadening markets for customers.

Demerits

1. Cost of Installation and Maintenance:

The installation of this system that enables the provision of e-banking services by banks is

very expensive. It cost the banks huge amount of money to deploy its own technology

individually. Considering the sophistication involved in the system and technologies

used in e-banking it need consociate and adequate maintenance. Thus, cost of

maintenance is usually very high and can increase.

2. Problem of Unemployment:

The massive deployment of electronic devices in carrying out banking services will

reduce the physical contact between banking staff and their customers.

This will reduce the needed staff strength for a bank branch and could have

implications on employment.

3. Vulnerability to failure:-

The systems deployed use in electronic banking are basically electronic and computer in

nature and cannot be solely relied upon thus, they can breakdown at anytime without any

notice.

4. Vulnerability to fraud Attack

2.13 Impediment to E-Banking in Nigeria

39
These are factors hindering the development of e-banking in Nigeria. Ovia (2002)

list some of factors to be:

1. Low density:

It is practically impossible to grow and expand the Nigerian financial market without

adequate telecommunications infrastructure. Nigeria had one of the lowest densities in the

world prior to the introduction of G.S.M. in August 2001. The teledensity was as low as 0.04

(250 people to one telephone) compared to 0.3 (3 persons to one line standard).

However, with the introduction of GSM, the teledensity is expected to rise more as an

average of 3,000 GSM lines per day are now deployed by the G.S.M. operators.

2. Low Internet Connectivity

Internet connectivity is very low, as at 2001, there were only 35 licensed Internet Service

Providers (ISP) in Nigeria. It increased to 250 as at February (2002). 2004 it increased

to 400. Even with this, it is still not accessible to many Nigerians due to its cost. In

addition, where they are available even at high cost they are not efficient.

However, many companies are expected to deploy more facilities for internet service

providers. This will bring down the price connectivity and therefore as much the ability to

be connected at cheaper price.

3. Dearth of E-work Force

Without e-work force, the expected growth and expansion of the Nigerian financial

market through the use of IT will continue to elude us. Nigeria is rated low on the UNPP

Human development report on technologies achievement index (TA1), this is largely as

result of spectacular poor human skills and technologies capacity.

40
2.14 Elements of Customer Satisfaction in Bank

The working of the customer's mind is a mystery, which is difficult to solve, and

understanding the nuances of what customer satisfaction is, a challenging task. Customer

satisfaction is a judgment by the customer, post purchase. The most popular view of

customer satisfaction in academia is that customer satisfaction is the judgment borne out

of the comparison of pre–purchase expectations with post purchase evaluation of the

product or service experience (Oliver, 1997). Customer satisfaction can result from any

dimension (whether or not it is quality related) and its judgments may arise from non-

quality issues (e.g. needs, equity, and perceptions of `fairness‟) and require experience

with the service or provider.

Customer satisfaction is the key to the profitability of retail banking and it implies the

retention of customers for the long term, which is cheaper than attracting new customers.

In the current scenario of retail banking in Nigeria particularly with banks becoming

larger and the advent of internet banking, the question arises whether the customers are

satisfied or otherwise and what are the elements of retail banking which lead to the

satisfaction or dissatisfaction of customers. The knowledge of current levels of

satisfaction and, in particular, the key determinants of satisfaction benefit those in the

industry allowing them to focus and build upon key areas that lead to highly satisfied

customers. Results highlight that in-branch factors particularly staff; branch location and

convenience are the most significant factors influencing customer satisfaction in retail

banking.

Attributes of customer satisfaction can be summarized as:

41
a. Product Quality

b. Product Packaging

c. Keeping delivery commitments

d. Price

e. Responsiveness and ability to resolve complaints and reject reports

f. Overall communication, accessibility and attitude

We cannot begin to address the customer satisfaction issue until we define the parameters

and measures clearly. Major overall satisfaction measure, consisting of four subscales:

general satisfaction (e.g. You feel happy recommending the bank to a friend); Trust (e.g.

You trust the staff at your branch to do what is best for you); Reliability (e.g. Requests

are carried out right first time); and professionalism (e.g. Staff have the knowledge to

deal with any queries you have).

It is far more difficult to measure the level of performance and satisfaction when it comes

to the intangible expectations. One of the ways to help obtain loyal customers is by

having products and services that are so good that there is very little chance that the

customer requirements will not be met. Of course one of the difficulties in understanding

the true customer requirements is that the customer can and will change them without

notice or excuse. Having a good recovery process for a dissatisfied customer is a very

vital process for any service organization (Olga, 2003).

Superior service offering and satisfaction derived from services enhance the customer

experience and result in improvements in loyalty, retention and subsequently business

performance. Studies have concluded that:

42
1. Service quality is one of the effective means in building a competitive position in

the service industry.

2. Investments in service quality, customer satisfaction and customer relationships

lead to profitability and market share.

3. High quality service and customer satisfaction often results in more repeat

purchases and market share improvements.

4. Customer satisfaction leads to customer loyalty and this leads to profitability.

5. The costs of customer acquisition are much higher than the costs of retention.

2.15 Relationship of E-Banking to Customer Satisfaction

The more consumers use online banking to handle their banking tasks, the more satisfied

they are with their bank, according to a study by Gomez, Inc. The study, "Customer

Satisfaction in Online Banking: An Exercise in Relationship Management," found that

online bankers have an average satisfaction level of 5.1 on a scale of 1 to 7, with mature

online banking consumers (over age 55) and those who use the Internet as their primary

means of banking reporting higher levels of satisfaction.

Online bankers who perform the majority of their banking tasks via the Internet are

realizing the time-savings and at-your-service availability of information that the Internet

delivers," said Moriah Campbell-Holt, lead research analyst for Gomez who co-authored

the study. Among the findings of the Gomez survey:

Almost 31 percent of online bankers with low satisfaction have considered switching

banks based on their Web experience. There is a significant lack of awareness among

online bankers about the specifics of their online banking service. For example, 50.2

43
percent of online bankers are unsure whether or not their primary bank offers online stop

payment capabilities.

"Given the high level of concern with Internet security, banks need to emphasize the

measures they have taken to protect their customer's online experience and reinforce

these messages in a clear and consistent language," said Campbell-Holt.

One of the biggest problems among consumers is lack of awareness of online banking

services. According to Campbell-Holt many online banking customers are unaware of the

full scope of their bank's offering and cannot derive benefit and value until banks give

them a good reason to bank online.

The Gomez findings show signs of hope for banks and other financial institutions who

were hoping to save money on customer service by moving services online. Research by

firms such as Cyber Dialogue and Tower Group has found that, in reality, consumers

have continued to use branch banking and other offline channels in addition to online

banking, rather than using the Internet as a replacement. The majority of U.S. households

use either two (26 percent), three (24 percent) or four (20 percent) different delivery

channels to conduct their financial services business, the Tower Group study found.

44
CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter deals with the methodology to be adopted carrying out the research. It

discusses sources of data, population, sampling procedure, method of data analysis, and

structured questionnaires.

3.2 Research Design

This is the plan or framework which guide the research methodology phase of this

research project in fact it is the framework which specifies the type of information to be

collected, the source from which the data is to be collected, the procedure through which

the data is collected, the research sample and section techniques.

This means that designing a research requires a mental plan or scheme of attack for

solving research problems in a systematic manner within the circumstances of the

researcher. However, the design of this research will be based on the field survey method.

The survey will concentrate on the study and any other relevant respondents.

According to Asika (1991) research design means the structuring of investigation aimed

at identifying variables and their relationship to one another. Akuezuilo (1990) sees

research design is essentially the plan, structure and strategy of investigation conceived

so as to obtain answers to research questions. It constitutes guidelines which direct the

researcher towards solving the research problem. Hence research design constitutes the

blue print for collection, measurement and analysis of data. For this study, the research

design is survey type of research.

45
3.3 Population of the Study

For the purpose of this study, the population constitutes the totality of the staff of the

selected organisation under study (i.e. Zenith Bank Staff and Customers). The population

sizes of this research are the staff and customers of the selected banks in Kaduna. The

population of the study is over 1500 staff for both managerial staff, senior staff and junior

staff of the branches of Zenith Bank plc and over 250,000 customers from the branches

of Zenith Bank in Kaduna metropolis which include five branches of Zenith Bank around

Kaduna Metropolis.

3.4 Sample Size and Sampling Technique

Odola (2005) asserted that a sample is a part of a population of interest that is selected for

study according to some selection scheme. A sample is a subset of the population; it

comprises some numbers selected from the population. Since sample needs to be

representative of the population, the sample was drawn from the staff (i.e. managerial

staff, senior staff, and junior staff level) and customers of the Zenith Bank Plc in Kaduna.

To determine the sample size of the study, the Yamane formula for determining sample

size was used.

Sample size for staff of Zenith Bank

n=

where:
N = Population = 1500
n = Sample Size
sig. level = Significance Level = 5% = 0.05

n=

46
n=

n=

n=

n=

n= 315.79
n= 316 approximately

The sample size for staff of Zenith Bank is three hundred and sixteen (316). The total

number of staff respondents issued questionnaire was three hundred and twenty

questionnaires (320) which represent the sample size for staff.

Sample size for customers of Zenith Bank

n=

where:
N = Population = 150,000
n = Sample Size
sig. level = Significance Level = 5% = 0.05

n=

n=

n=

n=

n=

n= 399.36
n= 400 approximately

47
The sample size for customers of Zenith Bank is four hundred (400). The total number of

customers respondents issued questionnaire was four hundred questionnaires (400) which

represent the sample size for customers. Therefore, the total sample size for this study is

720 of both staff and customer of Zenith Bank Plc., 320 staff and 400 customers.

3.5 Method of Data Collection

Data collection is one of the major tasks when undertaking a research study. This is due

to the fact that it is based upon the data collected that the answers to various research

questions raised by the researcher can be arrived at. The two basic sources of data

available are the primary and secondary sources. Obviously, in order to achieve the

objectives of this study, and to broaden our knowledge, data ought to be collected,

analyzed and appraised.

The primary method of data collection were used for this research. The data were

collected from 720 respondents with the aid of questionnaires. The secondary sources of

information were collected from literature containing detailed information about the

research elements and concepts. Other secondary sources include textbooks, Reports,

World Bank indicators, as well as other published and unpublished documents. The

reason for doing this was also to examine the accuracy, reliability and consistency of the

research hypothesis.

Questionnaire

The questions that constituted the questionnaire included those pertaining to personal

information about the respondents; number of years of experience with the bank and

other questions were based on the problem statements of the research topic. These were

48
brought forward so as to enable the respondents to answer the questions posed by the

problem statement adequately. Thus, it was possible to provide solutions to the questions

raised by the statement of the problem.

3.6 Method of Data Analysis

In this section, a test statistics which is useful in the test of hypothesis about classification

of data will be used. The test statistic is used is called chi-square. It is used to consider

hypothesis about proportions of observations under the study. The chi-square is

calculated as thus;

x2 = (fo – fe)2
fe

Where

fo = Actual or observed frequency

fe = expected frequency

The following steps are involved in calculating chi-square;

Step 1: State the Null hypothesis (H0) and the calculative hypothesis (H1)

Step 2: Calculate the test of statistic by using the formula:

x2 = (fo – fe)2
fe

Step 3: Determine the tabular value of a chosen level of significance (usually 5%)

and at (r-1)(c-1) degree of freedom.

Step 4: Compare the results in step (2) and step (3) and conclude as follows;

If the calculation value in (step 2) is greater than the tabulation value in (step 3) reject the

null hypothesis (H0) and conclude in favour of the alternative hypothesis (H1)

49
If on the other hand, the calculated (in step 2) is less than tabular value in (step 3) accept

the Null hypothesis (H0) and reject the alternative hypothesis (H1),

3.7 Justification of Method Used

In this research work questionnaire were used. The used of questionnaire will helped in

the collection of data from various people with varying opinion. Thus, many people

responded to similar questions with different opinions and views. The used of

questionnaire also gave the respondents time to think and ponder on the question before

they responded in various ways.

Above all, anonymity was guaranteed to the respondents so as to get some information,

which the researcher discovered are of great importance to this research work. The use of

some secondary sources also served as the basis upon which the information gotten from

other sources is justified.

50
CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Introduction

This chapter is concerned with the presentation, analysis, interpretation as well as test of

data collected so as to draw inferences. The questionnaires method as described earlier is

the primary source of data employed for this research work.

4.2 Data Presentation and Analysis

320 questionnaires were administered to staff and 400 customers of Zenith Bank Nig Plc.

A background of these figures indicate that three hundred and thirteen (313)

questionnaires were administered to staff and three hundred and ninety one (391)

questionnaires to customers further breakdown reveals that only seven hundred and four

(704) questionnaires were duly completed and returned while the remainder of sixteen

(16) were not received for unknown reasons. Out of this figure, three hundred and

thirteen (313) of those questionnaires represent those returned by staff of the above

mentioned bank while three hundred and ninety (391) represent those received from

customers.

51
Table 4.1: Questionnaire Administered

Questionnaire Administered Total

Staff 320 320
Customers 400 400
Total 720 720

Sources: Questionnaires Administered, 2011

Table 4.2: Questionnaire Retrieved

Questionnaire Received Total

Staff 313 313
Customers 391 391
Total 704 704

Sources: Questionnaires Administered, 2011

In table 4.1 and table 4.2 this shows the questionnaire administered and retrieved. Out of

the total 720 questionnaires were administered to the staff and customers of Zenith Bank

Nig Plc with 320 questionnaires administered to staff and 400 questionnaires

administered to customers. 313 questionnaires were retrieved from staff and 391

questionnaires retrieved from customers.

704 questionnaires out of 720 administered questionnaires were retrieved from staff and

customers which represent 97.8 percent of the total questionnaire administered were

retrieved.

Table 4.3: Respondent number of working experience or being a customer in the bank.
Staff Customer Total Percentage
1 – 3 year(s) 145 41 186 26.5

52
4 – 6 years 113 76 189 26.8
6 yrs & Above 55 274 329 46.7
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

In table 4.3, 186 respondents representing 26.5 percent have been with their bank for 1 –

3 years, while 189 respondents which represents 26.8 percent have been with their banks

for 4 – 6 years and 329 respondents representing 46.7 percent have been with their bank

for 6 years and above. This signifies that most of the respondents have been with their

banks for more than 6 years.

Table 4.4: E-banking has improved the quality of service delivery.

Staff Customer Total Percentage

Strongly Agree 116 82 198 28.1
Agree 154 253 407 57.8
Undecided 39 16 55 7.8
Disagree 2 24 26 3.7
Strongly Disagree 2 16 18 2.6
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

In table 4.4, shows that 198 or 28.1 percent of the respondents strongly agreed that the E-

banking has improved the quality of service delivery while 407 representing 57.8 percent

agreed with the statement. But 55 respondents representing 7.8 percent could not decide

on the statement, 26 respondents representing 3.7 percent and 18 respondent representing

2.6 percent disagree and strongly disagree respectively. This signifies that the E-banking

product have improved the quality of service delivery in the bank.

Table 4.5: The E-banking products meet the needs or wants of the customers.
53
Staff Customer Total Percentage
Strongly Agree 101 9 110 15.6
Agree 154 251 405 57.5
Undecided 24 15 39 5.5
Disagree 17 67 84 11.9
Strongly Disagree 17 49 66 9.4
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Table 4.5 reveals that 15.6 representing 15.6 percent of the respondents strongly agreed

that the E-banking products meet the needs or wants of the customers while 405

representing 57.5 percent agreed with the statement. But 39 respondents representing 5.5

percent could not decide on the statement, 84 respondents representing 11.9 percent and

66 respondent representing 9.4 disagree and strongly disagree respectively. This signifies

that the E-banking products meet the needs or wants of the customers.

Table 4.6: E-banking has helped in reducing time spent in the banking hall.
Staff Customer Total Percentage
Strongly Agree 0 49 49 7.0
Agree 197 218 415 58.9
Undecided 55 96 151 21.4
Disagree 47 11 58 8.2
Strongly Disagree 14 17 31 4.4
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

In table 4.6 above 49 respondents representing 7.0 percent of the respondents believe that

E-banking has helped in reducing time spent in the banking hall, 415 respondents

54
representing 58.9 percent agree with the statement, while 151 respondents representing

21.4 percent could not decide on the statement. 58 respondents representing 8.2 percent

and 31 respondent representing 4.4 disagree and strongly disagree respectively with the

statement. This implies that E-banking has helped in reducing time spent in the banking

hall.

Table 4.7: E-banking has improved efficiency in the bank‟s system operations.
Staff Customer Total Percentage
Strongly Agree 48 1 49 7.0
Agree 235 331 506 80.3
Undecided 24 46 70 10.0
Disagree 3 3 6 0.9
Strongly Disagree 3 10 13 1.8
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Table 4.7 reveals that 49 representing 7.0 percent of the respondents strongly agreed that

E-banking has improved efficiency in the bank‟s system operations while 506

representing 80.3 percent agreed with the statement. But 70 respondents representing

10.0 percent could not decide on the statement, 6 respondents representing 0.9 percent

and 13 respondent representing 1.8 disagree and strongly disagree respectively. This

signifies that E-banking has improved efficiency in the bank‟s system operations.

Table 4.8: E-banking is more reliable than the traditional banking services.
Staff Customer Total Percentage
Strongly Agree 116 82 198 28.1
Agree 154 254 408 58.0
Undecided 39 16 55 7.8
Disagree 2 23 25 3.6
Strongly Disagree 2 16 18 2.6
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

55
In table 4.4, shows that 198 representing 28.1 percent of the respondents strongly agreed

that E-banking is more reliable than the traditional banking services while 408

representing 58.0 percent agreed with the statement. But 55 respondents representing 7.8

percent could not decide on the statement, 25 respondents representing 3.6 percent and 18

respondent representing 2.6 percent disagree and strongly disagree respectively. This

signifies that E-banking is more reliable than the traditional banking services.

Table 4.9: E-banking has improves customer‟s satisfaction.

Staff Customer Total Percentage
Strongly Agree 216 163 379 53.8
Agree 48 158 206 29.3
Undecided 45 50 95 13.5
Disagree 2 18 21 3
Strongly Disagree 2 1 3 0.4
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Table 4.9 reveals that 379 representing 53.8 percent of the respondents strongly agreed

that E-banking has improves customers satisfaction while 206 representing 29.3 percent

agreed with the statement. But 95 respondents representing 13.5 percent could not decide

on the statement, 21 respondents representing 3 percent and 3 respondent representing

0.4 percent disagree and strongly disagree respectively. This signifies that E-banking has

improves customer‟s satisfaction.

56
Table 4.10: How will you rate the impact of E-banking on customer satisfaction?
Staff Customer Total Percentage
Very Effective 263 223 486 69.0
Effective 17 97 114 16.2
Not Effective 23 58 81 11.5
Undecided 10 13 23 3.3
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

In table 4.10, 486 respondents representing 69.0 percent sees the impact of E-banking on

customers satisfaction very effective, 114 respondents representing 16.2 percent sees the

impact as effective while 81 respondents representing 11.5 percent sees it as not effective

and 23 respondents representing 3.3 percent are undecided. This shows that E-banking

has a positive impact on customers‟ satisfaction.

Table 4.11: Introduction of E-banking has positively affected service delivery.

Staff Customer Total Percentage
Strongly Agree 103 22 125 17.8
Agree 153 325 478 67.9
Undecided 23 16 39 5.5
Disagree 17 21 38 5.4
Strongly Disagree 17 7 24 3.4
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Table 4.11 reveals that 125 representing 17.8 percent of the respondents strongly agreed

that Introduction of E-banking has positively affected service delivery while 478

representing 67.9 percent agreed with the statement. But 39 respondents representing 5.5

percent could not decide on the statement, 38 respondents representing 5.4 percent and 24

respondents representing 3.4 percent disagree and strongly disagree respectively. This

signifies that the Introduction of E-banking has positively affected service delivery.

57
Table 4.12: There is a Significant Relationship between E-Banking and Customers
Relationship.
Staff Customer Total Percentage
Strongly Agree 215 163 378 53.7
Agree 48 158 206 29.3
Undecided 46 50 96 13.6
Disagree 2 18 20 2.8
Strongly Disagree 2 1 4 0.6
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Table 4.12 reveals that 378 representing 53.7 percent of the respondents strongly agreed

that there is a significant relationship between E-Banking and customers‟ relationship

while 206 representing 39.3 percent agreed with the statement. But 96 respondents

representing 13.6 percent could not decide on the statement, 20 respondents representing

2.8 percent and 4 respondents representing 0.6 percent disagree and strongly disagree

respectively. This signifies that there is a Significant Relationship between E-Banking

and Customers Relationship.

Table 4.13: E-Banking is an effective tool in enhancing customer‟s satisfaction.

Staff Customer Total Percentage
Strongly Agree 117 148 265 37.6
Agree 146 108 254 36.1
Undecided 26 129 155 22.0
Disagree 19 3 22 3.1
Strongly Disagree 5 3 8 1.1
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Table 4.13 reveals that 265 representing 37.6 percent of the respondents strongly agreed

that E-Banking is an effective tool in enhancing customer‟s satisfaction while 254

representing 36.1 percent agreed with the statement. But 155 respondents representing

58
22.0 percent could not decide on the statement, 22 respondents representing 3.1 percent

and 8 respondents representing 1.1 percent disagree and strongly disagree respectively.

This signifies that E-Banking is an effective tool in enhancing customer‟s satisfaction.

4.3 Test of Hypothesis

The chi-square, denoted by the Greek letter X2 is frequently used in testing hypothesis

concerning the difference between a set of expected or theoretical frequencies.

X2 is denoted by the formula

X2 =

For the purpose of accuracy, we shall use contingency tables, which are crossed classified

tables showing the observed frequencies of a sample when there are r rows and c columns

in the table. Responses from the respondents are computed using probability rules and the

sum of expected frequencies. Here, 0.5% or 0.05 is used as level of significance and the

degree of freedom (df) given as (r – 1)(c – 1) will be used to determine the critical value

under the significant level. For the fact that we are testing the null hypothesis if the

computed X2 value is greater than the critical value under the level of significance. We

reject the hypothesis otherwise we accept it.

Hypothesis One

H0: There is no Significant Relationship between E-Banking and Customers

Relationship

H1: There is a Significant Relationship between E-Banking and Customers Relationship

Table 4.14

Staff Customer Total Percentage

59
Strongly Agree 216 163 379 53.8
Agree 48 158 206 29.3
Undecided 45 50 95 13.5
Disagree 2 18 21 3
Strongly Disagree 2 1 3 0.4
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Using the formulae: - X2 =

Table 4.15

Respondent Responses fo fe fo - fe (fo – fe)2 (fo – fe)2

fe
Strongly Agreed Staff 216 168.50 47.50 2255.85 13.39
Customer 163 210.50 -47.50 2255.85 10.72
Agreed Staff 48 91.59 -43.59 1899.92 20.74
Customer 158 114.41 43.59 1899.92 16.61
Undecided Staff 45 42.24 2.76 7.63 0.18
Customer 50 52.76 -2.76 7.63 0.14
Disagreed Staff 2 8.89 -6.89 47.50 5.34
Customer 18 11.11 6.89 47.50 4.28
Strongly Disagreed Staff 2 1.78 0.22 0.05 0.03
Customer 2 2.22 -0.22 0.05 0.02
Total 71.45

df = (r – 1)(c – 1)
r=5
c=2
df = (5 – 1)(2 – 1)

60
= (4)(1)
=4
Decision Rule

Checking the chi-square table of df = 4 under level of significance of 0.05 we will get our

critical path to be 9.488 (see appendix II).

Therefore the critical value 9.488 is less than the calculated 71.45 so we are going to

reject the null hypothesis which states that there is no Significant Relationship between

E-Banking and Customers Relationship and accept the alternative hypothesis which

states that there is Significant Relationship between E-Banking and Customers

Relationship.

Hypothesis Two
H0: E-Banking is an ineffective tool in enhancing customer‟s satisfaction

H1: E-Banking is an effective tool in enhancing customer‟s satisfaction

Table 4.16

Staff Customer Total Percentage

Strongly Agree 117 148 265 37.6
Agree 146 108 254 36.1
Undecided 26 129 155 22.0
Disagree 19 3 22 3.1
Strongly Disagree 5 3 8 1.1
Total 313 391 704 100

Source: Questionnaires Administered, 2011.

Using the formulae: - X2 =

Table 4.18

Respondent Responses fo fe fo - fe (fo – fe)2 (fo – fe)2

fe

61
Strongly Agreed Staff 117.82 -0.82 0.67 0.01 117.82
Customer 147.18 0.82 0.67 0.00 147.18
Agreed Staff 112.93 33.07 1093.69 9.68 112.93
Customer 141.07 -33.07 1093.69 7.75 141.07
Undecided Staff 68.91 -42.91 1841.56 26.72 68.91
Customer 86.09 42.91 1841.56 21.39 86.09
Disagreed Staff 9.78 9.22 84.99 8.69 9.78
Customer 12.22 -9.22 84.99 6.96 12.22
Strongly Disagreed Staff 3.56 1.44 2.08 0.59 3.56
Customer 4.44 -1.44 2.08 0.47 4.44
Total 82.26

df = (r – 1)(c – 1)
r=5
c=2
df = (5 – 1)(2 – 1)
= (4)(1)
=4

Decision Rule

Checking the chi-square table of df = 4 under level of significance of 0.05 we will get our

critical path to be 9.488 (see appendix II)

Therefore the critical value 9.488 is less than the calculated 82.26 so we are going to

reject the null hypothesis which states that E-Banking is an ineffective tool in enhancing
62
customer‟s satisfaction and accept the alternative hypothesis which states that E-Banking

is an effective tool in enhancing customer‟s satisfaction.

4.4 Summary of Findings

In the test of hypothesis for this research it is seen that the null hypothesis of the first

hypothesis was rejected which states that there are no significant relationship between E-

banking and Customer and also the null hypothesis of the second hypothesis was rejected

which state that E-banking is an effective tool in enhancing customer‟s satisfaction. This

concludes that the there is a significant relationship between E-banking and customer and

E-banking is an effective tool in enhancing customer‟s satisfaction.

The study also reveals that e-banking product have improved the quality of service

delivery in the bank. E-banking products meet the needs or wants of the customers. E-

banking has helped in reducing time spent in the banking hall. E-banking has improved

efficiency in the bank‟s system of operations. E-banking is more reliable than the

traditional banking services. E-banking has improved customer‟s satisfaction. The

introduction of e-banking has positively affected service delivery.

63
64
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

Financial services offered through the Internet are more frequently described as “virtual

banking”. This is simply because there is no physical contact between the customer and

banks‟ personnel. In fact, some market watchers are beginning to argue that such

transactions are real indeed and can no longer be described as “virtual”. Given the

overwhelming success of e-banking, banks in Nigeria are gradually embracing Internet

banking and radical changes are beginning to take place in Nigerian financial landscape.

Chapter one of this study begun with the introduction of the study which set out to assess

the impact of e-transaction as it affects customer satisfaction in Zenith Bank. Two

hypotheses (a null – which states that e-transaction has not made any impact on customer

satisfaction in Zenith Bank and an alternative – that e-transaction has impacted positively

on customer satisfaction in Zenith Bank) were formulated.

Chapter two focuses on existing literature (the work of others) in respect of this study

area. Under this chapter, the definition of concepts, the historical development of bank in

Nigeria, Commercial Banking perspective in Nigeria, Structure of the Nigerian Banking

System, . Similarly, the Financial Services in the Nigerian banking system, origin and

operations of e-transactions, the concept of e-banking, the evolution of e-banking in the

Nigerian banking system, e-banking products/services in the Nigerian banking system,

benefits of e-banking to bank and customer, merits and demerits of e-banking in Nigeria,

65
impediment to e-banking in Nigeria, elements of customer satisfaction in bank and

relationship of e-banking to customer satisfaction.

In chapter three, the research methodology used for this research work was discussed.

The research design was highlighted while the population of the study, the sample size

and sample technique which was based on random sampling - where 350 customers and

150 bank staff were selected, was discussed. Sources of data, method of data collection

and analysis techniques were areas of focus for this chapter.

In chapter four, the data collected from the field were presented and analyzed with

appropriate interpretation given. The questionnaires were further analyzed and the

hypothesis tested using Chi-square method. Chapter five summarizes all the succeeding

chapters. Here the study was summarize and conclusion is drawn and made while

recommendations were proffered.

5.2 Conclusions

Expectations have a central role in influencing satisfaction with services, and these in

turn are determined by a very wide range of factors - lower expectations will result in

higher satisfaction ratings for any given level of service quality. This would seem

sensible; for example, poor previous experience with the service or other similar services

is likely to result in it being easier to pleasantly surprise customers. However, there are

clear circumstances where negative preconceptions of a service provider will lead to

lower expectations, but will also make it harder to achieve high satisfaction ratings - and

where positive preconceptions and high expectations make positive ratings more likely.

66
Technology is undoubtedly a very important tool of every bank‟s competitive strategy. It

could draw the line between success and failure. Internet banking, which has resulted

from the blossoming Internet technology, obviously has many benefits for the financial

system. Unfortunately, Nigerian banks cannot immediately reap the digital dividend

because of poor telecommunications infrastructure.

Since Internet banking is targeted, in most cases, at the public by way of mass marketing,

users must have access to cheap, fast and easy telecommunication tools. The poor in

Nigeria are financially forbidden from participating. The roll-out of GSM cannot solve

telecommunications problem given the high cost of tariff.

In the test of hypothesis for this research it is seen that the null hypothesis which states

that there are no effective marketing strategies of banks retail products is being rejected

and the alternative hypothesis which states that there are no effective marketing strategies

of banks retail products is being accepted. This concludes that the marketing strategies of

banks in retailing their products are effective.

Other finding is that the bank has enough good retail products for the needs of customers.

The study also reveals that banks nowadays, because of competitive nature of their

service they come up with fantastic and effective marketing strategies that will position

them at an advantage over other banks. In a bid to operationalize all these marketing

strategies, the marketing department in banks have been highly consolidated and

solidified by making use of the core marketer in the department and employing other

field marketer through outsourcing arrangement.

67
Today, e-banking means developing new relationships with customers, regulatory

authorities, suppliers, and banking partners with digital age tools. For example, it requires

an understanding that customer/bank relationships will be more personalized, resulting in

novel modes of transaction processing and service delivery. This in turn calls for

substantial investment in IT platforms by bank.

This study has revealed that e-transaction has an overwhelming impact on customer

satisfaction. In fact, it is quite important that banks should transcend from the most

popular ATM window and focus more on strengthening other e-banking services like

transfer of funds, payment of bills and other e-banking platforms, which shall in the near

future be a critical success factor for their continued existence and success. Apart from

committing more resources in upgrading those services there is also an attendant need for

the banks to invest in creating customer awareness on the existence of other value added

e-banking services for their utilization.

Particular importance in this drive should be the existence of round the clock complaint

handling desk that should be staffed with qualified and courteous staff to provide

efficient and responsive way-forwards to customers. And, given the high level of concern

with internet security, banks need to emphasize the measures they have taken to ensure

confidentiality of transactions and to also protect their customers from fraud and other

attendant internet vices that their subscription may subject them to.

The quality of Web sites too has a direct and an indirect impact on both satisfaction and

trust. Banks should redesign their Web sites with a view to enhancing usability and

usefulness. Amongst the many factors that account for the perceived quality of a Web

68
site, the avoidance of downtimes seems to be extremely important to online banks.

Furthermore, based on findings I recommend making the sites easy to navigate and

giving them an uncluttered look. Sufficient information should be given on how to

conduct transactions and, most importantly, on how to get help should unforeseen events

happen.

Trust and overall satisfaction can be seen as major antecedents of e-loyalty. I would

therefore recommend that trust-building actions are paid more attention in to, focusing

for example on pay-back guarantees or quality certificates, which are seen as helpful

steps in increasing electronic customer retention. It seems obvious that the results of

many surveys suggest incorporating trust-building measures into online customer

relationships. As far as this research is concerned, the pre-eminent importance of trust

can be explained by both the core products of the financial industry, which can be seen as

the transmission and processing of highly confidential information, and trust in the

medium as such, which again stands for the bank's capability to securely transfer and

store confidential personal information. Unless customers establish personal contacts in a

bank branch, users of Internet banking in many cases do not have well-known contact

persons and must rely completely upon the capability and trustworthiness of the bank.

Therefore, the bank must build a strong brand in order to signal competence to its

customers.

Another important issue is that of continuous survey which might be an adequate

instrument for online banks to learn about their customers' attitudes. The comparatively

69
high response rate for an online survey can be taken as an indicator that customers of

Zenith Bank are actually willing to give feedback and get in touch with their supplier.

5.3 Recommendations

Electronic banking has become a necessary survival weapon and is fundamentally

changing the banking industry worldwide. Today, the click of a mouse offers bank

customers services at a much lower cost and also empowers them with unprecedented

freedom in choosing vendors for their financial service needs. No country today has a

choice-whether to implement E-banking or not given the global and competitive nature of

the economy. Banks have to upgrade and constantly think of new innovative customized

packages and services to remain competitive. The invasion of banking by technology has

created an information age and rendered banking services more appealing.

In view of the findings of this study it is concluded that electronic banking in Nigeria is

yet to create any significant impact on service delivery, which will consequently lead to

improved customer satisfaction.

Based on the findings of this research, it is recommended that:

1. Much need to be done in the area of creating awareness about the availability of

electronic banking products and services, how they operate and their benefits. Banks

should organise public exhibitions and talk shows and make products accessible to all

customers. In addition, they should improve their service delivery to justify the benefits

of electronic banking products and services. This way, customers‟ interest would be

aroused.

70
2. Banks should try to win customers‟ confidence by providing adequate security of

transaction back up of critical data files and alternative means of processing information.

They should also ensure good connectivity and power base that will enable them serve

customers faster and more conveniently. The banks should ensure that at no time should

service cease as a result of network problem

3. Government should provide adequate regulatory framework that will ensure customer

protection, and security of transaction. That way, bank customers‟ confidence in

electronic banking would be secured.

71
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Appendix I

Introduction Letter

Department of Business Administration,

Faculty of Administration,
Ahmadu Bello University,
Zaria.

Dear Sir/Madam,

I am an MBA Student in the above Department of Ahmadu Bello University, Zaria. As

one of the requirement of partial fulfillment for the award of master degree in business

administration (MBA) I am required to submit a researchable project.

In this regard, I have chosen your organisation to be one of my case study.

To enable me collect the data necessary for writing the project, I am requesting you to

please fill the attached questionnaire by simply ticking the provided boxes.

I assure you that any information collected will be used for academic purpose only, and

be strictly confidential.

Thanks for your co-operation

Researcher

75
Questionnaire
1. For how long have you been working experience or being a customer in the bank?

a. 1 – 3 years

b. 4 – 6 years

c. 6 years and Above

2. E-banking has improved the quality of service delivery.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

3. The E-banking products meet the needs or wants of the customers.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

4. E-banking has helped in reducing time spent in the banking hall.

a. Strongly Agree

76
b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

5. E-banking has improved efficiency in the bank‟s system of operations.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

6. E-banking is more reliable than the traditional banking services.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

7. E-banking has improves customer‟s satisfaction.

a. Strongly Agree

b. Agree

c. Undecided

77
d. Strongly Disagree

e. Disagree

8. How will you rate the impact of E-banking on customer satisfaction?

a. Very Effective

b. Effective

c. Not Effective

d. Undecided

9. Introduction of E-banking has positively affected service delivery.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

10. There is a Significant Relationship between E-Banking and Customers Relationship.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

78
11. E-Banking is an effective tool in enhancing customer‟s satisfaction.

a. Strongly Agree

b. Agree

c. Undecided

d. Strongly Disagree

e. Disagree

79
Appendix II

Chi-square table.

Df 0.995 0.99 0.975 0.95 0.90 0.10 0.05 0.025 0.01 0.005

1 --- --- 0.001 0.004 0.016 2.706 3.841 5.024 6.635 7.879

2 0.010 0.020 0.051 0.103 0.211 4.605 5.991 7.378 9.210 10.597

3 0.072 0.115 0.216 0.352 0.584 6.251 7.815 9.348 11.345 12.838

4 0.207 0.297 0.484 0.711 1.064 7.779 9.488 11.143 13.277 14.860

5 0.412 0.554 0.831 1.145 1.610 9.236 11.070 12.833 15.086 16.750

6 0.676 0.872 1.237 1.635 2.204 10.645 12.592 14.449 16.812 18.548

7 0.989 1.239 1.690 2.167 2.833 12.017 14.067 16.013 18.475 20.278

8 1.344 1.646 2.180 2.733 3.490 13.362 15.507 17.535 20.090 21.955

9 1.735 2.088 2.700 3.325 4.168 14.684 16.919 19.023 21.666 23.589

10 2.156 2.558 3.247 3.940 4.865 15.987 18.307 20.483 23.209 25.188

80