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Impact Of Internet Banking On Customer Satisfaction

Chapter one of Impact Of Internet Banking On Customer Satisfaction



Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is also defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products or its services (ratings) exceeds specified satisfaction goals (Farris, Paul W And yet another definition of customer satisfaction is it refers to the extent to which customers are happy with the products and/or services provided by a business. Further definition of customer satisfaction is it is a term generally used to measure a customer’s perception of a company’s products and/or services. It’s not a straight forward science however, as customer satisfaction will vary from person to person, depending on a whole host of variables which may be both psychological and physical. The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale (Westbrook, 1980).

Technology is making a tremendous impact upon banks in general and the financial services sector is no exception. The application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamentals importance and concerns to all banks and indeed a prerequisite for local and global competitiveness in banking industry. As a result of this technological improvement business environment in financial sector is extremely dynamic and experience rapid changes and demands banks to serve their customer through the use of internet. The evolution of internet banking started from the use of Automatic Teller Machine (ATM) and Finland is the first country in the world to have taken a lead in internet banking (Mishra,R. and Kiranmai,2009). Internet banking has been widely used in developed countries and in developing economies; however, the spread of internet banking is much limited. Today, almost all banks are adopting internet banking as a means of enhancing service quality of banking services. They are providing internet banking to their customers to increase customers‟ satisfaction in banking service (Shittu, 2010). Customers in Nigeria are late adopters of the Internet and its applications with regards to internet baking.

However, issues like machine out of order, machine out of cash, no printing statements, cards get blocked, frequent breakdown of ATM service, unreliability of ATM service, lack of sufficient technicians in all bank who solve breakdown of ATM machine, lack of sufficient alternative system which substitute ATM service for the customer when temporary problem happen in the machine, lack of convenience of internet-bank service, lack of mobile banking service, lack of reliable Tele-banking , lack of credit card service, under-development of technological infrastructure, low level of relevant knowledge creation and innovation, interruption of network, lack of suitable and regulatory frame work for e-commerce, resistance to changes in technology among customers and service providers as result of fear of risk, lack of fair distribution of internet banking service in all over Nigeria. All these has created doubts in the minds of customers thereby affecting their level of satisfaction.


The introduction of internet banking in to the banking sector is to bring customer satisfaction there by to enhance the banks‟ profitability. Unless this technology bring increase customer satisfaction than the traditional brick and mortar branches customer may perceive as the same as different branches rather than a new means of delivery channels. Daniel (1999) and Mols (1998) described that compared to ordinary banking system; internet banking is providing the competitive advantage by lowering the cost and providing best satisfaction of customer needs. The old age people are generally shy of use of ATM because of perceived risk of failure, complexity, security, and lack of personalized service (Moutinho, 2000). Applegate (1996) also described the benefit of internet banking from customer point of view; convenient and valuable source to deal with funding because it provides convenience to access account throughout the day that is access is not limited to banking operation hours and available around the clock. This study is analyzing the impact of internet banking on customer’s satisfaction.


The following are the objectives of this study:

1.  To examine the components of internet banking in Nigeria.

2.  To examine the impact of internet banking on customer’s satisfaction.

3.  To determine the factors limiting the use of internet banking by Nigerians.


1.  What are the components of internet banking in Nigeria?

2.  What is the impact of internet banking on customer’s satisfaction?

3.  What are the factors limiting the use of internet banking by Nigerians?


The following are the significance of the study:

1.  Outcome of this study will be a useful guide for the managements of banks in Nigeria at determining the impact of internet banking on customer satisfaction.

2.  This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic


This study on the impact of internet banking on customer satisfaction will cover all the components of internet banking with a careful examination of its impact on customer’s satisfaction.


Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work


Daniel, E. (1999). Provision of electronic banking in the UK and Republic of Ireland. International Journal of Bank marketing. 17(2), 72-82

Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance.Upper Saddle River, New Jersey: Pearson Education, Inc

Mishra R. and J. Kiranamai. (2009). E-banking: A case of India. Icfai University, Journal of publication Administration.Vol.5, No.1, pp.55-65.

Mols, N.P. (1998). The behavioral consequence of PC banking. International Journal of bank marketing 16(5), pp.195-201.

Moutinho, L. and Smith, A.(2000). Modeling bank customer satisfaction through mediation of attitudes towards human and automated banking, International Journal of bank marketing,Vol.18 No.3,pp.124-134.

Shittu Olorunsegun. (2010).The impacts of electronic banking in Nigeria banking  system

Westbrook, Robert A. (1980). “A Rating Scale for Measuring Product/Service Satisfaction,” Journal of Marketing, pp.68-72


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