CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Britannia Concise Encyclopedia (1995), defined Bank as a financial institution authorized to provide variety of financial services, including customer and business loans (generally short term), checking service, credit cards and saving accounts. A bank is a financial institution authorized by its charter to perform certain functions (Osuala, 2001). The bank is a financial institution set-up purposely for safekeeping of money, valuable goods and documents like wills and gold. It collects surplus funds from the general public, safeguards them and makes them available to the true owner when required and loans out fund (at interest) to those who need them (Obi, 2002). In a nutshell, a bank is an institution engaged in safekeeping of monies, issuing drafts, and giving loans on interest to those who are in need of such. 

The statutory functions of bank become more complex because of the complex nature of business activities and the increase in demand and number of customers, as well as the competitive nature of banking industry. (Irechukwu, 2000). This made the bank to look inward to customer-oriented services which will enhance efficient and effective customer services, Again, the business of banking is no longer perceived as merely the generation of deposit, liabilities and creation of liquid assets, but rather the generation, storage, manipulation, communication and application of financial information. Traditional banking is characterized by physical decentralization with branches scattered around populated areas to give customers easy geographical access. The physical banks also serve to assure customers that their bank has substantial resources and can guarantee the security of their saving- (Loekeft and Rifter, 1997). Information technology has however, also penetrated the banking sector. 

Information technology, according to Woherem (2000), is perceived as an instrument for engendering competitive advantage in the Enterprises as it promotes greater efficiencies and effectiveness in financial transactions. The importance of information technology is to enable enterprises to develop more effective and efficient operational and management process. Thus, the information age has brought many technological innovations into our lives. One of the advanced technologies that have been introduced is Electronic banking. (Ainin, 2005). 

E-Banking is a process of transacting banking operations electronically. It is a process of using electronic devices in carrying out banking operations. E-banking does away with most visits to the bank. It is a state-of-the-art-service that is just beginning to take off among banking customers especially in Jigawa state. Indeed, E-banking has the major potential for future development as it allows customers to do most of the things they do at the bank like make balance enquiries, payment, transfer of funds, pay bills over the internet. It also offers banking services outside of normal opening hours.  In fact, it has effectively “opened” banks for business twenty-four hours a day, seven days a week (Rubino, 2000). 

E-banking has become increasingly prevalent, employed by financial institutions in Jigawa state to reduce costs associated with having personnel, serve customers physically, shorten processing period increase speed, improve the flexibility of business transactions and provide better services for all (Shin and Fang, 2004). E-banking services being rendered by commercial banks in Jigawa state include online/internet banking, E-payment, Automated Teller machines (ATMs), personal computer (PC) Flash card/Telephone banking, Electronic fund transfer, Email, among others.  These services in the banking sector are rendered to customers. 

A customer is anyone who makes buying decision of product or services from an individual or organization.  Osuala (1998), explained that a customer is one who makes the actual purchase decision. Service is at the heart of the business of banking. E-banking has played, is playing and will continue to play a major role in the delivery of quality service in the banking industry (Irechukwu, 2000). Financial institutions have used E-banking to aggressively and innovatively create the requisite competitive advantage and dramatically improve the quality of service delivery to their customers. It does mean that the success of any business is dependent on the customers’ satisfaction with the products or services. 

In Jigawa state, E-banking services are provided by the following Commercial banks viz, First bank, Fidelity bank, Heritage bank, Skye bank, Stanbic IBTC bank, Sterling bank, Unity bank, United bank for Africa (UBA), Union bank, Eco bank, Zenith bank, Diamond bank, Guaranty Trust bank, Keystone bank, and First City monumental bank (FCMB). The success of these banks depends on the satisfaction of the customers. It is often said that understanding the motivation, expectation and desires, lay the foundations of how best to serve the customers and this can provide information on making improvements in the nature of business. 

It is expected that with the provision of E-banking by the commercial banks to the customer services that the quality of service rendered to customers would have drastically improved. Although, banks and their employees in Jigawa state claim that E-banking has improved the quality of their customer services tremendously, customers still complain about the quality of services rendered to them. The customers still believe that there is a lot to be done, if customer satisfaction is to be enhanced. According to the customers, they have not really enjoyed the benefit of E-banking, because they still spend hours in the banks for simple counter retard transactions like deposit, cash transfer and even cash withdrawal. Despite the provision of E-banking, there are lots of customer traffic or patronage in most of the commercial banks in Jigawa state.  

It is, however, disheartening to observe that even after the provision of E-banking to customer services, some problems are still prevalent, bearing in mind that the primary objectives of E-banking are to improve the quality of customer services.  

In the light of these enormous commitments on the part of commercial banks, it becomes pertinent more than ever before for them to evolve an efficient and reliable E-banking component to be able to survive and meet up with the modern banking challenges. Since the provision of E-banking to customers in Jigawa state is yet to meet the expectations and satisfaction of customers, there is, therefore, an urgent need to determine the influence of E-banking on the customer services. These will identify areas of strength and weakness in services rendered and hence yields information needed for improvement.  

1.2 Statement of the Problem 

Banks play a major role in the social, political and economic development of a community.  They provide services that help to enhance business activities by way of granting loans, shares, overdraft, money transfer, deposit, and withdrawal among others. Agene in Awoniyi (2008), reported that banking services require mathematics, manipulations, by way of calculations, receipt and payment of money to customers. Thus, making banking job, very tedious, time consuming and tiring.  Banks must think of itself as never before as buying customers’ as doing the thing that will make people continue to transact business with them. They must put in place strategies for meeting and exceeding the customer needs and expectations because today’s customers are more sophisticated and approached by many competitions (Kotler, 2001).

Della in Awoniyi (2008), observed that bank activities make too much demand on customers by spending too much time queuing up to pay in or withdraw money. These constraints among others made banks to adopt E-banking as a way of improving services to their numerous customers. E-banking services are meant to overcome the shortcoming of traditional methods of banking. E-banking services entail the use of electronic device such as computer and Internet to render or aid the services rendered by manual traditional methods of banking. 

In Jigawa state, with the provision of E-banking to customer services by banks, customers still complain of delayed services. It takes hours to effect a simple transaction and the hall is always full of customers waiting to either pay in or withdrawal money from their accounts. The situation is even worse during festive period or when workers’ salaries and other emoluments are paid to workers at the end of the month. 

Woherem (2000), stated that although, the adoption of E-banking by banks has made some changes in time consumption in banks, the changes do not reflect the accurate service that is expected from the banks. Some customers see banking activities in Jigawa state as time consuming or wanting. The problem of this study, therefore, is to determine the influence of E-banking on customer services in Jigawa state as perceived by Bank Customers.

1.3 Objectives of the Study

The major purpose of the study is to determine the influence of E-banking on the provision of customer service in Jigawa state as perceived by bank customers. 

 Specifically, the study determined: 

The extent the utilization of E-banking has influenced customer patronage through customer services provided by banks in Jigawa state.

To what extent the utilization of E-banking has influenced customers satisfaction with the customer services provided by banks in Jigawa state.

Ascertained the problems faced by banks in the provision of customer services through E-banking in Jigawa state.

1.4 Research Questions

 The following research questions are formulated to guide the study.

To what extent does the utilization of E-banking influence customers’ satisfaction with the customer services provided by banks in Jigawa state? 

To what extent do customers benefit from the provision of customer services through E-banking provided by banks in Jigawa state? 

What are the problems faced by banks in providing customers services through E-banking in Jigawa state?

1.5 Hypothesis 

The following Null hypotheses will be tested at 0.05 level of significance. 

HQ1. There is no significant difference in the mean responses of bank employees and customers on the satisfaction of E-banking to customer services provided by banks in Jigawa State. 

HQ2. There is no significant difference in the mean responses of banks’ employees and customers on benefit of E-banking on customer services provided by banks in Jigawa State. 

HQ3. There is no significant difference in the mean responses of bank employees and customers on the problems faced by banks in the provision of customer services through E-banking in Jigawa State.

1.6 Significance of the Study 

The findings of this study will be very useful to commercial banks, bank customers the central bank, ministry of commerce and industry and the society. The findings of this study would enable commercial banks, employees and employers to identify the problems confronting customers in obtaining effective and efficient customer services through e banking and how to eliminate or at least reduce such problems. This is because today’s customers would continue to patronize only the banks that would be most conversant to them in terms of easy transaction. Also, the commercial banks as the hub of the nation economy would benefit from this study as the study would enable them understand how to impress and retain their customers by providing the relevant and current information technology E-banking customer services in their banks.

The commercial banks customers would benefit from the findings of the work as the study would reveal the current component of E-banking, and how E-banking customers’ services could be used to facilitate easy and better banking operations. 

The Central Bank as the supervisory body to all the commercial banks would benefit from the study, for the study would reveals how effective and efficient E-banking customer services provided by commercial banks. Also, the study would equally reveal the problems encountered in the provision of E-banking customer services. This would enable the central bank to formulate policy to regulate, supervise and control the activities of commercial banks to provide better services to their numerous customers, hence pave way for social, political and economic development of Nigeria. 

The ministry of commerce and industry would benefit from this study as the study would invent, the current problems encountered by the commercial banks in the provision of E-banking customer services in Jigawa State.  This would enable the ministry to create a conducive enabling environment for commercial bank to operate and to give the best E-banking customers’ services to their customers in the state. 

The findings of this study would also be useful to students and researchers who may be interested in carrying out further research in this or related topic.

1.7 Scope and Limitations of the study 

The study is restricted to the influence of E-banking in the provision of customer services in Jigawa State as perceived by bank customers. The study is limited to commercial banks operating in Jigawa State. The study does not cover financial institutions other than commercial banks. The study will not assess other areas of commercial banking operations such as profitability, administration and management.

The major constraints of the study include, Attitude of the respondents, time constraint, and financial constraint. 

Attitude of the respondents: Some of the respondents were unwilling to cooperate with the researcher since they derive no financial benefit from the study. 

Time: the researcher was constrained by time; he could not visit all the places where data and information relevant to the study could be obtained.  

Financial Constraint: A lot of money is required in data collection, analysis and interpretation. The researcher is constrained financially.

1.8 Organization of the study

The research work is outlines and structured in the following chapters below:

Chapter one of the study is the introduction part which contains; the background of the study, statement of the problem, objectives of the study, research questions and hypothesis, significance of the study, scope and limitations of the study.

Chapter two of the study encompasses the literature review which includes; the conceptual literature review, theoretical literature review and empirical literature review.

Chapter three of the study deals with research methodology adopted by the researcher which includes; the research design, area of the study, population of the study, sample, sampling techniques, description of the instrument used, validation and reliability instruments, questionnaire administration and retrieval, method of data analysis.

Chapter four of the study analyze the result of data collected from respondents, the interpretations of the data, test of hypothesis and findings.

Chapter five of the study deals focuses on the summary of findings, conclusion and recommendations (or solutions).