e-sRC

CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Customers are the livewire of any organization because all activities carried out by an
organisation are tailored towards meeting the expectations of customers. In fact, business
processes are integrated in such a way as to make customers satisfied. Businesses with very
high number of satisfied customers tend to perform better than those with very little number
of satisfied customers. Many organizations are aiming for high satisfaction because
customers who are averagely satisfied still find it easy to switch when a better offer comes
along, while those who are highly satisfied are much less ready to switch (David, 2010). High
satisfaction or delight creates an emotional attraction with the brand and not just a rational
preference. The result is high loyalty which in turn results to high profitability for the
organization. Customer satisfaction must be taken so seriously by organizations because
profits are tied to it. It is important organisations enjoy higher levels of customer satisfaction
as it may lead organisations to higher levels of customer loyalty.
The banking industry believes that by adopting new technology, the banks will be able to
improve customer service level and tie their customers closer to the bank (Machogu, n.d). It
is evident that Nigerian banks have benefited from global technology innovation like the
automated teller machine(ATM), mobile banking, banker automated clearing amongst others
and the introduction of such technologies have affected employee performance and customers
responses. With the help of technology, Nigerian banks have been able to reduce the waiting
time of customers to some extent (Oluwagbemi, Abah&Achimugu, 2011). These
improvements in improved service delivery and on-time response to customers have been
well documented (Dauda&Akingbade, 2011). Thus, banks that want to survive, grow and
remain relevant must offer efficient services through the aid of technology.
There have been tremendous changes in the banking industry over the years and customers
have also rightly demanded world class quality services from the banks. Customers on daily
basis always quest for the best services from their banks, and are in most cases not willing to
put up with anything less than the best. Therefore, if banks are to obtain the benefits of
investing in technology, an identification of how the technology is perceived useful,
trustworthy and ease of use by the customer is crucial.
In a report by KPMG (2016), ease of use is seen as a crucial challenge for Nigeria‟s banks
and this influences the willingness of customers to adopt technology, and it was reported that
6% of survey respondents from Nigeria reported an experience of fraud in the cause of
conducting internet banking transactions but more than half of those said it took more than
two weeks to resolve their case.Pakojwar and Uke (2014) opined that to provide customers
with safe, consistent,robust online environment to do online banking the banks should
implement best of breed technologies to authenticate customers identities when they log in, to
guarantee that their data is transmitted securely and consistently. Bank should have best
backup and contingency strategies and should formulate best security plans and practices by
using safe-token (Pakojwar&Uke, 2014)
One of the many technologies that have been introduced by banks is the safe-token, which is
the major focus of this study. The safe-token is a handheld small device that gives a customer
optimal protection against online theft, hackers and fraudsters. It is a key that grant full
access to carry out third party transfers and payments online via the internet banking platform
anywhere in the world. E-Secure Token otherwise known as Safe-token provides an
additional security feature when logging on to Internet Banking. The Safe-token provides a
“One-Time-PIN” (OTP), which should be used to access the internet banking sites, together
with username and password (Pakojwar&Uke, 2014). Each OTP is only valid for one session;
therefore the Safe-token should be used to generate an OTP with every login. To obtain login
OTP user have to switch on his Safe-token using the on and off button.
It generates a random code for every transaction thereby making it impossible for another
person to carry out online transactions from the customer‟s account. The token is one of the
latest in banking security technology which uses a 128bit data encryption to protect their
account (retrieved from www.gtbank.com). Thus, this study aims at examining how these
technologies have helped in improving the satisfaction level of customers of deposit money
banks in Nigeria, considering the fact that deposit money banks play a crucial role in ensuring
the development of the economy.
1.2 Statement of the Research Problem
Banking institutions all over the world have recognized the importance of customer
satisfaction and developing and maintaining enduring relationships with their customers as
crucial to increased business performance. At the same time, several banking institutions are
experiencing high level of customer dissatisfaction (KPMG report, 2016). This dissatisfaction
could be because of variety of reasons, which technology is one of them (Mandel
&Bhattacharya, 2013). According to a KPMG survey in October, 2016, an average of 66% of
banking customers in Africa are not satisfied. According to the survey, bank customers in
Africa are looking for more secured service from their banks, as they are increasingly willing
to switch banks if they feel they can get better service elsewhere. Further results from the
survey show that in October 2016, more than two-thirds of Nigerian bank customers admit to
have never used internet banking, that customers still seek enhanced high-quality and more
secured service and more innovation.Pakojwar and Uke (2014) similarly opined that to
provide customers with safe, consistent,robust online environment to do online banking the
banks should implement best of breed technologies to authenticate customers identities when
they log in, to guarantee that their data is transmitted securely and consistently.
Going by the report of the survey, on the increase on the part of bank customers is the
demand of delivering secured, accurate and timely transactions, 89 percent of customers say
that timeliness of transaction processing is important to their satisfaction, while 67% are not
satisfied with the speed and accuracy of transactions they do with their respective banks.
Various technologies have been adopted by Nigerian banks so as to increase the speed and
accuracy of transactions by customers. One of these technologies is the safe-token device;
bank should have best backup and contingency strategies and should formulate best security
plans and practices by using safe-token (Pakojwar&Uke, 2014). Thus, the safe-token device
is invariably adopted by banks so as to increase accuracy and speed of transactions performed
by customers, and according to the KPMG survey, customers satisfaction is tied to the speed
and accuracy of transactions they perform. It is, therefore, necessary to determine the impact
safe-token adoption has on customer satisfaction.
It has been discovered from previous literature that most studies (e.g., Hassan,
Mamman&Farouk, 2013; Hossein, 2013; Ogunlowore&Oladele, 2014, Olatoke, Ola,
Oyewole, 2014) done in the area of interest of this study have focused more on other
technologies such as ATM, mobile banking, internet banking using variables like
affordability, convenience, reliability, service quality amongst others as proxy of technology
adoption but the survey conducted by KPMG (2016) and Pakojwar and Uke
(2014)necessitated a need to establish the effect of technology adoption using perceived ease
of use, perceived usefulness and perceived trust as proxy of technology adoption. These past
studies however, focused on technologies other than the safe-token technology adoption and
their relationship to growth. To the best of the researcher‟s knowledge, no study has been
done to determine the influence of safe-token adoption on customer satisfaction.
Technology adoption has always beenproxied by perceived ease of use and perceived
usefulness of the technology adopted.The safe token is designed for only internet
transactions. It has been observed that most customers are always skeptical to perform online
transactions as they do not sometimes trust the system to perform the transactions they wish
to carry out (KPMG report, 2016).Thus, the study considers the effect the perception of bank
customers has on safe token to perform the transaction it was actually designed for. For this
reason, this study includes perceived trust as a proxy for technology adoption and determine
it influence on customer satisfaction in Nigerian banks. On the basis of this research problem,
the study addressed the following questions.
1.3 The Research Questions
The specific research questions are:
i. To what extent does perceived ease of use of safe-token affect satisfaction among
deposit money bank customers?
ii. How could the perceived usefulness of safe-token affect satisfaction among deposit
moneybank customers?
iii. How does the perceived trust of safe-token affect satisfaction among deposit money
bank customers?