The study was an exploratory study, aimed at understanding the effect of electronic banking on customer service delivery in three selected branches of three banks in Ibadan, Oyo state. Purposive sampling strategy was adopted to select 69 customers as well as 29 staff of the three selected banks. Questionnaire was used as the principal tool for the data collection. With the aid of the SPSS software the data was analyzed using basic statistical tools such as frequencies and percentages. The study among other things brought to the fore that customers prefer to transact business in the halls in spite of the long queues largely because of the difficulty associated with accessing e-banking products. The data analysis also showed that customers of the selected banks were highly aware of the various e-banking platforms available at their respective bank. The study revealed that in spite of the difficulties associated with the use of e-banking products, majority of the respondents highly patronize these services. This was particularly the case with the use of ATM machines as respondents alluded. However, ignorance on the part of the customers regarding the use of e-banking services was a huge challenge. The study, based on the findings recommended among other things that masse public (customer) education regarding the usage/ advantages of e-banking products and services should be embarked by the banks. Also, the researcher suggested that there should be a widespread citing of ATM machines around vantage points.


TITLE PAGE                                                                                                       I

CERTIFICATE                                                                                                    II

DEDICATION                                                                                                    III

ACKNOWLEDGEMENT                                                                                     IV

ABSTRACT                                                                                                         V

TABLE OF CONTENT                                                                                         VI-VII


1.1       BACKGROUND OF THE STUDY                                                            1

1.2       STATEMENT OF THE PROBLEM                                                          3

1.3       OBJECTIVES OF THE STUDY                                                                 4

1.4       RESEARCH QUESTIONS                                                                       6

1.5       RESEARCH HYPOTHESES                                                                     6

1.6       SIGNIFICANCE OF THE STUDY                                                             7

1.7       SCOPE OF THE STUDY                                                                         8

1.8       LIMITATION OF THE STUDY                                                                8

1.9       CHAPTER OUTLINE                                                                             9

1.10     DEFINITION OF RELATED TERMS                                                        11       


2.1. INTRODUCTION                                                                                       14

2.2. THE VIEW ON ELECTRONIC BANKING                                                     16

2.3. ELECTRONIC BANKING AND THE COMMON BANKING PRODUCTS                                        20

2.4  THE ENTRY OF NIGERIAN BANKS INTO ELECTRONIC      BANKING                                                    24

2.6   OPERATION OF FINANCIAL INSTITUTION                                               36

2.7   ELECTRONIC BANKING PERFORMANCE                       36


3.1       INTRODUCTION                                                                                  40

3.2       RE-STATEMENT OF RESEARCH QUESTIONS                                        40

3.3       RESEARCH DESIGN                                                                              41

3.4       RE-STATEMENT OF RESEARCH HYPOTHESES                                     41

3.5       POPULATION OF STUDY                                                                      42

3.6       SAMPLING TECHNIQUES                                                                     42

3.7       SAMPLE SIZE                                                                                       43

3.8       SOURCES OF DATE                                                                              43

3.9       METHOD OF DATA ANALYSIS                                                              43


4.1. INTRODUCTION                                                                                       45

4.2. PRESENTATION AND ANALYSIS OF DATA                                                45

4.3  TEST OF HYPOTHESIS                                                                                56

4.3 DISCUSSION OF FINDINGS                                                                        61


5.0       INTRODUCTION              



Banking has been one of the services that provide the opportunity to use the internet to enhance business transactions that engenders customer satisfaction. The term electronic banking was defined by Allen et al (2001) to mean the procurement of data or services by a bank to its clients by means of a computer. A more sophisticated service is the particular case that furnishes clients with the opportunity to get access to their accounts and execute transactions and to buy item online by means of the internet (Daniel, 2005). The use of electronic banking products or services to banking operations has turned into a subject and concerns to all banks working inside Nigeria and without a doubt a condition for domestic and global competitiveness, noted, (Ezeoha, 2006; Ikechukwu, 2000). Banks have realized that the banking of tomorrow requires more of electronic banking transactions rather than traditional banking systems. In other words, the paper based transaction is now being replaced by electronic-based transactions. Whether a bank would be successful or not rely on upon the degree to which it is putting resources into IT and utilizing it as a part of an inventive way. This territory has been noted to be a noteworthy competitive ground for banks that are working in the post-solidification time. Telephone banking, Automated Teller Machines (ATMs), internet banking, mobile banking, and network banking and many others are examples of how technology is changing traditional banking now.

In Africa, electronic banking is starting to pick up its roots over the mainland. For instance, Madueme, (2009) compose that with globalization, Nigerian banks must choose the option to embrace electronic banking services to upgrade successful service conveyance that rises above to customer satisfaction, on the off chance that they truly need to stay in the business race, not to mention be beneficial and once more, the late merging activity in Nigerian banking division has drawn the consideration of numerous banks to utilization of different mechanical gadgets in advancing/accomplishing better customer service conveyance that ensured customer satisfaction that interprets into expansion benefit and higher rate of profitability.

The competitiveness in the banking industries have called for the need to bringing on board the electronic platform into industries around the world. For example, four Thai banks chose to implement, investigate, analyze and endeavor to present Internet banking service as an intend to decrease holding up time, lapses, costs, and enhance customer service backing 1997. Their internet banking services permit clients to access and inquire about their own particular accounts and perform basic transactions by means of the Internet from their PCs at their workplace and home whenever the timing is ideal time. Additionally, so as to lower cost and keep up business sector authority, bank leaders in Iran have profited by unrivaled services quality and information technology infrastructures.

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. Technology is making a tremendous impact upon service companies 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 electronically. The evolution of e-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 e-banking (Mishra,R. and J.Kiranmai,2009). E-banking has been widely used in developed countries and in developing economies; however, the spread of e-banking is much limited. As suggested by Claessens, Glaessner and Klingebiel (2002), developing countries in general have an advantage as they can learn from the experience of advanced economies. Today, almost all banks are adopting electronic banking as a means of enhancing service quality of banking services. They are providing electronic banking to their customers to increase customers‟ satisfaction in banking service (Shittu, 2010).

The software used by banks is usually renewed on short term basis which incurs huge financial costs on banks. Capital providers expect that they would gain tremendous returns which may accrue from the project as information technology driven by the internet is adopted. Nigerian banks, in recent times, on going through annual financial reports has discovered that dividend returns are going down and other performance indicators seem to be weak contrary to shareholders’ expectations.


E-banking was adopted by banks so as to improve their service delivery, decongest queues in the banking hall, enable customers withdraw cash 24/7, aid international payment and remittance, track personal banking transaction, request for online statement, or even transfer deposit to a third party account. Despite the effort of banks to ensure that customers reap the benefits of e-banking, the bank is met with complaints from customers as regards, malfunctioning Automated Teller Machines (ATMs), network downtime, online theft and fraud, non availability of financial service, payment of hidden cost of electronic banking like Short Message Services (SMS), for sending alert, mandatory acquisition of ATM cards, non acceptability of Nigerian cards for international transaction amongst others. In spite of all these efforts little has it impacted on the behaviors of many customers and consequently the long queues and congestions exist at the banking hall in Nigeria. The question that arises from the above argument is that, why are customers still preferring being in queues and spending more hours in the banking transactions than being at their comfort zone and banking electronically?

This study is aimed at finding out the reason why these problems occur and in most cases persist, and then to make recommendations based on the outcome of the study.


The main objective of this work is to appraise the impact of electronic banking on customers’ satisfaction in Nigeria. However, the specific objectives of this work include the following:

·         Assess customers’ preference between banking in the halls and e-banking.

·         Investigate whether or not customers are aware of the electronic service products

·         Examine the benefits and challenges associated with electronic banking

·         Determine the level of customer patronage of electronic banking services


In order to get information from respondents the following questions where formulated:

·         Do customers prefer the banking halls to electronic banking?

·         Are customers aware of the existence of the various electronic banking products?

·         What are the benefits and challenges associated with electronic banking services?

·         At what level do customers patronize electronic banking services?


In order to assess the appraisal for the implementation of electronic banking on customers’ satisfaction in Nigeria, the following hypotheses are to be tested

Hypothesis One

H01: Banking halls have not significantly improved customers’ satisfaction

Hypothesis Two

H02: Electronic banking products and services have not significantly improved customers’ satisfaction

Hypothesis Three

H03: There are no benefits and challenges associated with electronic banking services.

Hypothesis Four

H04: There are no significant levels at which customers patronize electronic banking services


Electronic banking in our economy today is a welcome development and also its impacts in the society are over-whelming, so this research is significant in so many ways. It will expose the strength and weakness of electronic banking. It will motivate banks and other economic agents to computerize their services.

Knowledge in the area of electronic banking will be advanced. Apart from contributing to the knowledge of electronic banking, it forms a reference for future researches in this area. The outcome of this study will be of immense benefit to the management of the banks used as case study, since it will help identify most of the challenges faced by the banks as well as the complains table by the customers.

Solutions will then be proffered on theses identified challenges. This will go a long way to help the bank achieve its stated objectives. Closely related to the above stated point is the fact that various banks that offer electronic banking can tap on the findings of this study and determine how they can improve on electronic banking service delivery.

1.7       SCOPE OF STUDY

In investigating the impact of e-banking channels on customers’ satisfaction, three commercial banks that is Diamond, Access and First bank were chosen. The study will also see whether or not the usage is related to age, educational status and occupation. Last but not least the study will see do customer know about what e-banking means and how they see the challenges and opportunities of e-banking in the city.


According to best and Khan (1989), limitations are those conditions beyond the control of the researcher that will place restrictions on the conclusions of the study and their application to other situations. This study is, therefore, constraint by the wide area the study is supposed to have captured, shorter period for the completion of the study, and inadequate funds for this study The study as a matter of fact should have captured all the customers of major banks in Nigeria. This is, however, impractically impossible due to many factors such as a huge research team and many other factors. The researcher per the rule of the university is supposed to complete this study within one semester. This is a rule ought to be complied with strongly. This condition is beyond the control of the researcher as he is expected to present the report of this study within a relative shorter period.

One major limitation of this study is the lack of fund. The researcher as an individual student has to manage his meager income in undertaking this study. It is a known fact that there is lack of financial support for research in Africa of which Nigeria is of no exception. With the necessary research sponsorship the study could have captured a wide spectrum rather than these selected banks. This may affect the findings of this particular study especially in making general conclusions and comparing this study to similar ones with the requisite financial support.


The study is divided into five chapters. Chapter one is concern with the background to the study, statement of the problem, research question, objectives of the study, significance of the study, scope, limitation of the study and lastly how the whole study is organized. Chapter Two dealt with the literature review. This chapter examines the views of other theorists and authors about the issues under discussion as well as review of previous studies on electronic banking and customer service delivery. Chapter Three outlines the research methods the researcher employs in carrying out the study. The chapter also deals with the study area, sample size and the sample selection as well as methods of data collection, management among others. Chapter Four presented the analysis and presentation of data in this study. Chapter Five being the final chapter of this study presented the summary, conclusion and the necessary recommendations of the study which emanated from the findings of the study.




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