CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The changing business environment offers challenges and opportunities to organizations. The
changing customers’ perception of quality poses unique challenge. Excellence in quality has
become an imperative for organizational sustainability.
Prior to automation of banking services, banks conveyed their products and services to their
clients through physical bank branches (Sarlak & Asghar, 2010). However, this has changed over
the years as physical delivery of banking services is being replaced by virtual delivery
(Freedman, 2006). This transformation has been enhanced by low costs of communications,
rapid internet technological evolution, globalization, deregulation, consolidation of financial
markets and change in competitive and regulatory forces (Sarlak & Asghar, 2010). According to
Consumer Focus (2012), most of the banking technologies adopted initially consisted of
accounting and mechanical innovations of a “back office” nature which had little direct impact
on customer loyalty.
In the banking sector, the number of customers preferring to use self-service delivery systems is
on the increase. This is because effective self-service delivery systems guarantees quality
excellence and superior performance and provide increased autonomy to the customers in
executing the transactions (Lovelock, 2000). Banks are increasing their technology-based service
options to remain competitive.
According to Edegbe (2006), Computerization improves efficiency of staff in organizations, but
the impact is more on a highly motivated and satisfied staff. But, this paper is aimed at
determining the impact of automated banking practices on customers’ satisfaction in the banking
sector in Nigeria . Satisfaction is the pleasure you feel when something good happens to you or
when you do something that you wanted or needed to do or when you do something well.
Customers satisfaction can then be defined as a person’s emotional response to aspects of
services or products provided by any organization.
Customers are well informed of the market dynamism due to availability of information. They
therefore look for smarter and simpler ways of transacting hence choose those channels and
interactions that help them meet their needs fast and efficiently. Bloemer et al (2022), state that
customers have expectations before transacting with any bank and develop perceptions during
service delivery process. They compare their perceptions to the expectations in evaluation of the
service outcome.
1.2 Statement of Problem
Almost all commercial banks offer automated banking services to remain competitive, achieve
customer satisfaction and customer loyalty (Sindwani & Goel, 2015). Perceived service quality is
an important aspect in competition (Mosahab, Mahamad, & Ramayah, 2010). It affects customer
satisfaction which influences customer loyalty and in turn affects an organization’s performance
(Hallowell, 2020).
There is extensive adoption of technology by commercial banks in Nigeria which has been
necessitated by technological advancements and innovations that make it easy for customers to
transact. Technologies like mobile phones, cash dispensing machines, payments systems and
computers have greatly enhanced growth in the Kenyan banking institutions. These technologies
have assisted in preventing customers from using paper, digitizing workflows and supporting
decision making.
However, customers are always complaining regarding different issues pertaining the systems,
these complaints involve; systems failure, inaccurate account balances, failed transactions,
delayed transactions, rejection and retraction of valid cards, double deductions in withdrawals
and complicated prompted instructions to follow.
This research therefore, focused on finding out the impact of automated banking services and
bank performance. What is the relationship between automation of banking services and service
quality and how does delivering of high automated quality banking service help banks sustain a
strong relationship with their customers?
1.3 Aim and Objectives
The general objective is establish the impact of automated banking services and bank
performance. The specific objectives include;
i. To establish the range of automated banking services used in Bayelsa State.
ii. To examine the relationship between automation of banking services and bank performance
in Bayelsa State.
iii. To ascertain the level of bank performance in Bayelsa State.
1.4 Research Question
i. To what extent is the range of automated banking services used in Bayelsa State?
iv. To what extent is the relationship between automation of banking services and bank
performance in Bayelsa State?
ii. To what extent is the level of bank performance in Bayelsa State?
1.5 Significant of the Study
The study's findings will be of great importance to the shareholders and management of deposit
money banks and the central bank of Nigeria (CBN). This study will also benefit researchers
who wish to carry out a similar study, as this would serve as a guide. Lastly, the research will be
necessary for students, lecturers, and the general public who desire to seek knowledge in such
areas.
1.6 Scope of the Study
The scope of the study covers the content scope, and geographical scope. The content scope
covers literature related to bank automation services and the geographical scope cover
automation services of deposit banks in Yenagoa of Bayelsa State.
1.7 Organisation of Study
This study consist of five chapters.
Chapter one consisted of the introduction, background of the study, statement of the problem,
aims and objectives, research questions, significance of the study, definition of terms.
Chapter two, dealt with literature review; conceptual framework, theoretical framework,
empirical framework.
Chapter three, methodology had to do with the study covering research design, population etc
and results.
Chapter four, dealt with findings, data presentation, data analysis, discussion of results.
Chapter five wrapped up the summary, conclusion and recommendations.
1.8 Definition of Terms
Bank: A bank is a financial institution that accepts dposits from the public and creates a demand
while simultaneously making loans.
Services: This are actions of helping or doing work for someone.
Performance: The execution or accomplishment of work or act or function.
Automation: The use of automatic equipments in carrying out a function elctronically.
Productivity: this means output per unit of Labour input, it is the balance between all factors of
production that will give the greatest output for the smallest effort.
Sustainability: this means meeting a need without compromising the ability of future
generations to meet their own needs.