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EFFECT OF SAFE-TOKEN ADOPTION ON CUSTOMER SATISFACTION OF BANKS IN NIGERIA
ABSTRACT
Technology has been adopted all over the globe which has brought significant changes in the way of business operations are been carried out. Thisstudy investigated the effect of safe-token adoption on customers‟ satisfactionof banks operating in Nigeria. The objectives of this study are to determine the effect perceived ease of use, perceived usefulness and perceived trust of safe-token technology on customer satisfaction. Questionnaires were distributed using quota and purposive sampling. A total of 427copies of questionnaire were used for analysis. PLS-SEM path modelling was employed to process the data. Three hypotheses were developed in alternate form and resultssupported the hypotheses. Findings show that perceived usefulness, perceived ease of use and perceived trust of safe-token positively influence customer satisfaction. It is recommended that banks should provide need to pay attention to design a user-friendly interface allowing consumers to feel free of mental effort when using the safe-token.
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study ———————————————————————–1
1.2 Statement of the Research Problem ———————————————————3
1.3 ResearchQuestions —————————————————————————–6
1.4 Research Objectives—————————————————————————–6
1.5 Research Hypotheses —————————————————————————7
1.6 Significance of the Study ———————————————————————–7
1.7 Scope of the Study ——————————————————————————-8
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction—————————————————————————————–9
2.2 Concept of Customer Satisfaction ————————————————————-9
2.3 Importance of Customer Satisfaction in banking——————————————11
2.4 Measurement of Customer Satisfaction——————————————————12
2.5 Concept of perceived usefulness of technology———————————————13
2.6Concept of perceived ease of use of technology———————————————14
2.7 Concept of perceived trust of technology—————————————————-15
2.8 Review of Some Related Empirical Studies————————————————-16
2.9Theoretical Framework————————————————————————-24
2.9.1 The expectation confirmation theory———————————————————-24
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction—————————————————————————————-26
3.2 Research design————————————————————————————26
3.3 Population and Sample Size of the Study—————————————————–26
3.4 Sampling Technique——————————————————————————28
3.5 Source and Method of Data Collection——————————————————–28
3.6 Measurement of Variables of the Study——————————————————-28
3.7Validity and Reliability of the instrument—————————————————-29
3.7.1 Factor Loadings———————————————————————————–29
3.8 Technique of Data Analysis———————————————————————-31
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction—————————————————————————————–32
4.2 Response Rate————————————————————————————–32
4.3 Preliminary Analysis——————————————————————————33
4.3.1 Missing Values————————————————————————————33
4.3.2 Assessment of Outliers—————————————————————————34
4.3.3Multicollinearity Test—————————————————————————-34
4.4 Demographic Statistics—————————————————————————35
4.5 Descriptive Statistics of Variables of the Study———————————————37
4.6 Assessing Model Fit——————————————————————————-39
4.7 Test of Hypotheses——————————————————————————–41
4.8 Discussion of Findings—————————————————————————-43
4.9 Implications of the Study————————————————————————44
4.9.1Theoretical Implications————————————————————————-44
4.9.2 Managerial Implications————————————————————————-45
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary——————————————————————————————–46
5.2 Conclusion——————————————————————————————-47
5.3 Recommendations———————————————————————————47
5.4 Limitations of the Study————————————————————————–48
5.5 Suggestions for Further Study——————————————————————48
References———————————————————————————————–49
Appendices———————————————————————————————-61
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 platformmanywhere 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?
1.4 Objectives of the Study
The main objective of this study is to examine the influence of safe-token adoption on satisfaction of deposit money banks customers, while the specific objectives are:
i. To determine the effect of perceived ease of use of safe-token on deposit money bank customer satisfaction
ii. To examine the effect of perceived usefulness of safe-token on deposit money bank customer satisfaction
iii. To determine the effect of perceived trust of safe-token on deposit bank customer satisfaction.
1.5 Research Hypotheses
The present study tested the following hypotheses which have been stated in alternate form: H01: Perceived ease of use of safe-token has no significant effect on customer satisfaction of deposit money banks in Nigeria.
H02: Perceived usefulness of safe-token has no significant effect on customer satisfaction of deposit money banks in Nigeria.
H03: Perceived trust of safe-token has no significant effect on customer satisfaction of deposit money banks in Nigeria.
1.6 Significance of the Study
One of the major contributions of this study to the body of knowledge is to examine how the adoption of safe token has affected customer satisfaction. Other studies related to this study focused on other technologies other than the safe token technology. This study therefore fill this knowledge gap by studying how safe token technology impacts customer satisfaction.
This serves as a major contribution to the body of knowledge theoretically.
The findings of this study will be of benefit of the banks considering that customer satisfaction plays an important role in today‟s global and highly competitive business environment which they operate. The greater the level of customer satisfaction, the more the loyalty of customers to a bank and less probability to switch to other service providers, which indicates banks‟ profitability as satisfied customers make repeat purchase and become the brand advocates. Thus banks that apply the recommended approach that is derived from results of this study will be able to satisfy customers better. Policy makers will also be guided on what should be emphasized by banks in the cause of procuring and developing new technologies to satisfy customers and serve them better. Bank customers that are yet to adopt the safe-token will become more enlightened about the level of satisfaction other customers have derived from the use of the device and hence will stimulate their adoption.
Generally, customers tend to evaluate the outcome of the encounter of other customers about a particular act before deciding whether to perform the act or not. If they discover that the adopters of safe-token are satisfied, others will want to adopt the safe-token as well in order to enjoy the satisfaction that comes with the adoption. For researchers, the study will help them uncover critical areas in the customer satisfaction process that many researchers were not able to explore. Thus, a new approach and ideas on ensuring customer satisfaction will be arrived at. This research will also add to the existing knowledge.
1.7 Scope of the Study
The study focused on all deposit money banks customers‟ inSabonGari axis of Zaria metropolis, Kaduna State as a result of the fact that the deposit money banks are situated there, and due to the fact that this research is a cross sectional research, the research is carried out in 2017 and data was collected within a period of three weeks. The researcher has decided to obtain data in Zaria metropolis because the adoption of the safe-token device is believed to be pronounced among customers‟ who are literates, and Zaria has a good number of knowledge and literate people (Dudley, 2012). The geographical coverage of this study is the customers of all Deposit Money Banks in Zaria who are using safe-token within the period which the data was collected.
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