CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
Information and Communication Technology has no doubt brought with it dramatic changes in the way businesses are conducted worldwide. In early 70’s, Smith had first noted that technological changes in form of new machines are invariably one of the three important causes of increasing incomes. Neither has this notion changed, especially in the face of the recent infusion of technological advances nor electronic commerce into commercial activities (Abor, 2005).
The Banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and Communication Technology is at the center of this global change for example, banks customers can pay for airline tickets and subscribe to initial public offerings by transferring the money directly from their account, or pay for various goods and services by electronic transfers of credit to the sellers account. As most people now own phones, banks have also introduced mobile banking to cater for customers who are always on the move. Mobile banking allows individuals to check their account balances and make fund transfers using their mobile phones (Alu, 2000).
In a competitive, complex and dynamic environment of the banking industry, the very slight differences which exist in financial services and products together with an increasingly demanding customer have led to a great transformation in the industry. The traditional product-oriented bank is becoming increasingly customer-oriented in accordance with the basic principles of relationship marketing, which focuses on customer loyalty as its main goal. Bitner (1990) considers that constant customer-oriented behaviour is a prerequisite for improving the implementation of quality in services industry. Indeed, factors such as financial products and distribution have attained similar levels of development and technology and have thus been relegated to a secondary role as reference points for distinguishing between one bank and another (Dowling and Uncle, 1997). Also, Easterby-smith, Thorper and Love (2002) argued that, given that many financial offer equivalent services. It can be stated that a customer is unlikely to be over impressed by core product attributes when all companies are providing similar offerings (Dabholker 1996).
Accordingly, the consensus among scholars is that internet has fundamentally changed the rules of the game, with its impact felt across industries (Acquah, 2006; Awad, 2000; Babaku and Boller, 1992). This raging wave is such that banks are now being forced to introduce and quickly upgrade their front-end internet applications in order to be competitively relevant.
Bahia and Nantel (2000), observed that even with the growing interest in the introduction and development of internet banking, not much research seems to have been done on the implementation of internet banking in the transition economies like Nigeria. For instance, the banking industry in Nigeria has continued to undergo thorough complex changes in recent times, such that banks now adopt several survival strategies in the face of keen competition. This advent of Electronic Banking and its attendant myriads of product development have been predicted to bring about dramatic changes in both the distribution channel structure of retail banks and the general bank performance (Dulman, 2000).
Companies in most industries assess and implement loyalty strategies and programs to make strong relationships with their customer. Certainly, the proliferation and fragmentation of media make more difficult to attract and access new customers. This will encourage more companies to try to keep current customers (Bolton 1991; Dick and Base 1994; DeRuyter 1999).
Since customers are not often satisfied, the cost of attracting a new customer is five times the cost of retaining an existing customer. Banks have to provide customer satisfaction, because it has advantages which are: it keeps away customers from competitors; can provide benefits of sustainability; reduce costs of defects and attracting new customers; increase positive word of mouth advertising and encourage continued loyalty and support to achieve this goal that is only possible through proper marketing (Oliver, 1993; and Moore, 2001). Customer loyalty to organization is subject that is influenced terms and conditions of variety and diversity inside and outside of the organization which the extent of their impacts vary according to type of organization and from organization to organization (Zeithaml and Parasuraman, 2003).
Loyalty can be defined as a customer continuing to believe that your organization’s product/service offer is their best option. It best fulfills their value proposition whatever that may be. They take that offer whenever faced with that purchasing decision. Customer loyalty can be said to have occurred if people choose to use a particular shop or buy one particular product, rather than use other shops or buy products made by other companies (Yi, 1990; Yoo and Donthy, 2001).
Based on the above discussion, it can be said that bank’s customers service online and maintaining customer loyalty through Information Technology can be considered a quite new phenomenon that has not yet received much focus.
STATEMENT OF THE PROBLEM
Information Technology has altered traditional marketing and sales activities by introducing and fostering directions between demand and supply eliminating the need of intermediaries’ intervention. Information technology has made it possible for organization to establish a customer relationship management (CRM). It is a strategy where customers can interact and maintain mutually relationships with the purpose of introducing information technology into the banking industry to enhance customer’s loyalty. It equally improved customer satisfaction and ensure customer retention by aligning business processes with technology integration. Information technology brings together lots of information about customer, customer characteristics, sales transactions, marketing effectiveness and marketing trends.
For all these benefits associated with Information and Communication Technology in the Banking sector, this study will understudy Ecobank of Nigeria Plc. and make recommendations according to the findings.
OBJECTIVES OF THE STUDY
The objectives of the study are as follows:
To find out if there is any significant relationship between Information Technology and service delivery.
To ascertain the influence of Automated Teller Machine on customer loyalty in Ecobank of Nigeria Plc.
To examine how Electronic fund transfer affects customer loyalty in the banking sector.
To find out how mobile Banking affects customers loyalty of Ecobank of Nigeria Plc branches in uyo.
Identify problems militating against quickteller implementation in Ecobank.
To suggest measures on Information Technology implementation.
RESEARCH QUESTIONS
To achieve the above objectives, the following research questions were necessary:
Is there any significant relationship between Information Technology and service delivery?
Does Automated Teller Machine have any influence on customer loyalty in Ecobank of Nigeria Plc?
Does Electronic fund transfer have any significant relationship with customer’s loyalty in Ecobank Nigeria Plc.?
Is there any significant relationship between mobile Banking and customer’s loyalty of Ecobank of Nigeria Plc.
Does mobile banking have any impact on customer’s loyalty?
Does Quickteller enhanced service delivery?