TOPIC:
ASSESSMENT OF SHORT MESSAGE SERVICE (SMS ALERT) ON
E-PAYMENT BANKING PLATFORM.
1
Abstract
The study is centered on the assessment of short message service (SMS Alert) on
e-payment banking platform. The objectives of the study are to ascertain the
awareness and customer perception on SMS alert on e-payment in Nigeria, find
out which of the dimensions of SMS is adopted by commercial banks in Nigeria;
and examine the effects of using SMS alert on organizational performance of
commercial banks in Nigeria. The relevant literatures were reviewed as well as the
theory aspects of the literature. A survey research design was adopted for the
study while data for the study was gathered from distributed questionnaire and the
analysis was done according to the data gathered. In analyzing the data collected,
the researcher adopted the use of simple percentage. Also, their frequency tables
representing the information based on each research question. The study concluded
that customers who have subscribed to the SMS alert service considered the
service beneficial because they perceived that the service saved them time and
expenditure as well as relief them of unnecessary anxieties. It is also established
that males dominate the clientele base of banks in Nigeria as compared to females
probably due to their dominant in the formal sector compared to their female
counterparts who are mostly in the informal sector. The study recommends that
the Banking industry is therefore required to improve the use of SMS to
customers. Customer satisfaction tools may be affected if the SMS tends to
become a nuisance to the customers. Text messages which do not appear to be
clearly defined may generate a negative responses from customers rather than
what is expected to create satisfaction.
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CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The background of electronic payments can be traced back to the 1870’s when
Western Union (WU) introduced Electronic Fund Transfer (ETF). EFT is a system
of transferring money from one bank account directly to another without any
paper money changing hands. One of the most widely-used EFT programs is
Direct Deposit, in which payroll is deposited straight into an employee's bank
account. However, EFT refers to any transfer of funds initiated through an
electronic terminal, including credit or debit card, Automatic Teller Machine
(ATM), Wire Transfer done via an international banking network such as SWIFT
and Point-Of-Sale (POS) transactions. It is used for both credit transfers, such as
payroll payments and for debit transfers, Despite WU’s revolutionary on ETF,
the method of transferring money electronically remained unchanged for close to
sixty years. Then, in 1918, the Federal Reserve Bank of America began
transferring money via telegraph. With the advancement in technology, banks and
consumers became more reliant on computers to conduct transactions. The advent
of Internet has initiated an electronic revolution in the global banking sector. The
dynamic and flexible nature of this communication channel as well as its
ubiquitous reach has helped in leveraging a variety of banking activities.
Electronic payment, also known as EFT is simply the use of electronic means to
transfer funds directly from one account to another, rather than by cheque or cash.
3
In the Nigeria context, electronic -payment is effecting payments from one end to
another and through the medium of the computer without manual intervention
beyond inputting the payment data, it is the ability to pay the suppliers, vendors
and staff salaries electronically at the touch of a computer button (Agba, 2010).
The mobile banking concept was propounded and presented in Europe since 1992
and was used in 1999 with the entry of WAP (Wireless Application Protocol).The
use of mobile phone Short Messaging Service (SMS) in banking has been one of
the first applications of mobile phone in banking. SMS banking is defined as a
banking transaction through short messaging service (SMS) using mobile phone.
Previously, SMS evolved among people as a key social memo to connect with
family members, friends, and teachers. At present, SMS has evolved as a medium
of disseminating banking information to make individual contact with banks better
(Amin, 2007). SMS banking was first introduced in 2004 in Malaysia. Since then,
SMS banking has become an interesting topic of research in other countries to
establish factors that inform customers’ decision to adopt SMS banking services.
This new channel has gained much popularity in the banking industry among
customers probably due to reasons such as ease of access and use as well as usage
without any special software or hardware (Lu et al, 2003). Mobile phones have
clearly become omnipresent and a standard aspect of the daily lives of people.
Ongoing innovations in mobile finance show some potential to change the way
people conduct financial transactions by offering customers new services. Yet,
many people remain skeptical of the benefit of mobile financial services and the
4
level of security provided along with such services (Federal Reserve Board Report,
2012). Critical examination of previous studies has revealed mixed outcomes with
regards to the adoption of e-banking technologies by customers, making
customers’ willingness to subscribe to future e-banking facilities or services
inconclusive. This research therefore assesses short message service (SMS Alert)
on e-payment banking platform
1.2 Statement of problem
It is a straightforward presumption that business enterprises are adopting new
communication technology to effectively and cordially relate with their employees
and customers. One of such new communication trend is the use of business
texting – short message services (SMS). From cosy survey, this trend appears to
be used more often by businesses nowadays; and the banking sector has not been
left behind. Banks now leverage on SMS to notify customers of transactions,
products, value-added services, etc. The most common of these SMS are debit and
credit alerts. Banks also send SMS to their customers on special days such as
birthdays.
With so many products and services to communicate with their customers,
coupled with transaction notifications, the number of text messages sent by
commercial banks to their customers is increasing. Almost every day customers of
banks receive SMS alerts on their mobile phones from their respective banks.
These text messages are forms of business communication between the banks and
5
their customers. But the question here is: do these text messages contribute to their
overall organizational performance of commercial banks? Or are they merely
communicative? This research therefore assesses short message service (SMS
Alert) on e-payment banking platform
1. 3 Objectives of the study
The main objective of this study is assessment of short message service (SMS
Alert) on e-payment banking platform. The study also has the following specific
objectives:
i.
ascertain the awareness and customer perception on SMS alert on
e-payment in Nigeria
ii. find out which of the dimensions of SMS is adopted by commercial banks
in Nigeria; and,
iii. examine the effects of using SMS alert on organizational performance of
commercial banks in Nigeria.
1.4 Research Questions
The following questions will be addressed in the course of this study:
iv. What are the the awareness and customer perception on SMS alert on
e-payment in Nigeria
i.
?
6
ii. Which of the dimensions of SMS is adopted by commercial banks in
Nigeria?
iii. What are the effects of using SMS alert on organizational performance of
commercial banks in Nigeria?
1.5 Significance of the Study
This study is necessitated by the urge and the need for the research, reader and
organizations in general to understand more about short message service (SMS
Alert) on e-payment banking platform. This research will serve as reference
materials for students who will wish to conduct similar studies on this topic and
also serve as guide to corporate individuals, organization in furtherance to their
research on the subject matter.
1.6
Scope of the Study
The study is centered on the assessment of short message service (SMS Alert) on
e-payment banking platform.
1.8 Operational Definition of Terms
ATM: Automated Teller Machine (ATM) is a machine where cash withdrawal can
be made over the machine without going in to the banking hall. It also be used to
buy recharge cards, pay bills, make card less withdrawal and transfer funds. It can
be accessed 24 hours/7 days with account balance enquiry, mini account
7
statements.
Short Messaging Service (SMS): Text messaging, or texting, is the act of typing
and sending a brief, electronic message between two or more mobile phones or
fixed or portable devices over a phone network.
E-Cheque: An e-Cheque is the electronic version or representation of paper
cheque. The Information and Legal Framework on the E-Cheque is the same as
that of the paper cheques. It can now be used in place of paper cheques to do any
and all remote transactions. An E-cheque work the same way a cheque does, the
cheque writer "writes"the e-Cheque using one of many types of electronic devices
and "gives" the e- Cheque to the payee electronically. The payee "deposits" the
Electronic Cheque receives credit, and the payee's bank "clears" the e-Cheque to
the paying bank. The paying bank validates the e-Cheque and then "charges" the
check writer's account for the check.
Electronic Money: A generic name for plastic money and other forms of
e-payments such as: Smart Card/Valu cards: Smartcard is already operational in
Nigeria under the brand name of Valucard. The company (Smartcard Nigeria Plc.)
acts as settlement agent as well as Coordinate hardware and software supply.
Smartcard transactions are not yet online.
Internet Banking: Internet banking allows customers of a financial institution to
conduct financial transactions on a secure website operated by the institution,
which can be a retail or virtual bank, credit union or society. It may include of any
transactions related to online usage. Banks increasingly operate websites through
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which customers are able not only to inquire about account balances, interest and
exchange rates but also to conduct a range of transactions. Unfortunately, data on
Internet banking are scarce, and differences in definitions make cross-country
comparisons difficult.
Mobile Banking: Mobile banking (also known as M-banking, ) is a term used for
performing balance checks, account transactions, payments, credit applications
and other banking transactions through a mobile device such as a mobile phone or
Personal Digital Assistant (PDA). The earliest mobile banking services were
offered over SMS, a service known as SMS banking. Mobile banking is used in
many parts of the world with little or no infrastructure, especially remote and rural
areas. This aspect of mobile commerce is also popular in countries where most of
their population is un-banked. In most of these places, banks can only be found in
big cities, and customers have to travel hundreds of miles to the nearest bank. The
scope of offered services may include facilities to conduct, Bank and stock market
transactions, to administer accounts and to access customized information.
Mobile Payments: Although the number of transactions that can be carried out
via a cell phone are limited, they can be used to facilitate some electronic
transactions. Mobile phone manufacturers have enable their phones’ software to
allow their customers to have a bank account on their cell phones numbers and
can the funds in their accounts to carry out transactions.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Review
2.1.1 Mobile Banking
Internet and mobile technologies are increasingly being adopted and utilized in the
banking industry; this has reshaped the consumption of financial services
(Laukkanen, 2005), In this research we analyze the security of electronic banking
services with an emphasis on mobile commerce transactions with a focus on
mobile banking using mobile devices specifically cell phones. Electronic banking
is considered a way of delivering banking services through the internet to the
consumer at a reduced cost to the banking industry and improved convenience to
the customer (Pousttchi and Schurig, 2004), However there exists a low internet
connectivity in the developing countries given the costs of connection especially
in rural areas and yet banking services need to be brought closer to the population
to enhance development (Kenny, 2000). A viable solution here is mobile banking.
Here we are interested in what the implications are in the terms of security and
also in the economic viability of these technologies in developing countries.
Mobile commerce shall be defined as commercial transaction activities carried out
via communication networks that interface wireless or mobile devices. A mobile
device is a device used to connect to a mobile service for example cell phones and
Personal Digital Assistants (PDA). The high diffusion rate of mobile phones
10
coupled with the stability of mobile communication technologies have greatly
contributed to the enhancement of mobile banking solutions in the provision of
financial services in the world (Mallat et al., 2004). Mobile banking is considered
as a service that enables users to receive information regarding the status of their
accounts, to transfer among bank accounts, to facilitate stock trading and direct
payment confirmation using mobile devices.
Mobile Banking (also known as M-Banking,) is a term used for performing
balance checks, account transactions, payments etc. via a mobile device such as a
mobile phone. Mobile banking today is most often performed via SMS or the
Mobile Internet but can also use special programs downloaded to the mobile
device (Riivari, 2005). The advance of the Internet has revolutionized the way the
financial services industry conducts business, empowering organizations with new
business models and new ways to offer 24x7accessibility to their customers. The
ability to offer financial transactions online has also created new players in the
financial services industry, such as online banks, online brokers and wealth
managers who offer personalized services, although such players still account for
a tiny percentage of the industry. Over the last few years, the mobile and wireless
market has been one of the fastest growing markets in the world and it is still
growing at a rapid pace. According to the GSM Association and Ovum, the
number of mobile subscribers exceeded 2 billion in September 2005, and now
exceeds 2.5 billion (Stephan, Herstat & Cornelius, 2006) Many believe that
mobile users have just started to fully utilize the data capabilities in their mobile
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phones. In Asian countries like India, China, Indonesia and Philippines, where
mobile infrastructure is comparatively better than the fixed-line infrastructure, and
in European countries, where mobile phone penetration is very high (at least 80%
of consumers use a mobile phone), mobile banking is likely to appeal even more.
This opens up huge markets for financial institutions interested in offering value
added services. With mobile technology, banks can offer a wide range of services
to their customers such as doing funds transfer while traveling, receiving online
updates of stock price or even performing stock trading while being stuck in
traffic.
According to the German mobile operator Mobilcom, mobile banking will be the
"killer application" for the next generation of mobile technology. Mobile devices,
especially smart phones, are the most promising way to reach the masses and to
create “stickiness” among current customers, due to their ability to provide
services anytime, anywhere, high rate of penetration and potential to grow.
Shipment of smart phones is growing fast, and should top 20 million units (of over
800 million sold) in 2006 alone (Stephan, Herstat & Cornelius, 2006)
2.1.2 Concept of Short Messaging Service (SMS)
Text messaging, or texting, is the act of typing and sending a brief, electronic
message between two or more mobile phones or fixed or portable devices over a
phone network. The term originally referred to messages sent using the Short
Message Service (SMS); it has grown to include messages containing image,
12
video, and sound content (known as MMS messages. The sender of a text message
is known as a texter, while the service itself has different colloquialisms
depending on the region. It may simply be referred to as a text in North America,
the United Kingdom, Australia and the Philippines, an SMS in most of mainland
Europe, and a TMS or SMS in the Middle East and Asia. Chaffey et al, (2009)
define Short Messaging Service (SMS) generally called ‘texting’ as a form of
e-mail but it creates communication between mobile phones rather than personal
computers. Cheng et al (2009) argued that it is too fast communication service and
it delivers with in a very short time. Cheng et al (2009) explain some of the
benefits of SMS as a marketing communication tool as: high speed text message
delivery, Interactivity, More customer reach (Mass communication) and response
rate for SMS is five times more than direct postal mail.
Dickinger et al. (2004) argued that SMS marketing is very much cost effective and
the only cost which company has to bear is the cost of purchasing phone numbers
which normally goes up to 30 U.S dollars for 1000 phone numbers however this
cost seems very minor after the SMS reaches to its exact target customer.
Furthermore, Menke (2007) argued that mobile phone technology is developing
very rapidly and because of this great increase in the number of mobile users
marketers have got more opportunity to use this channel effectively for the
communication. According to Fill (2005) the financial industry can get benefits
from this SMS service as it is same as e-mail and likewise sales promotion and
brand awareness can be created by using mobile marketing. Furthermore, mobile
13
coupons for price discount can be sent through SMS for generating sales
promotion (Carter, 2004).
Text messages can be used to interact with automated systems to, for example,
order products or services, or participate in contests. Advertisers and service
providers use direct text marketing to message mobile phone users about
promotions, payment due dates, instead of using mail, e-mail or voicemail.
In a straight and concise definition for the purposes of this English Language
article, text messaging by phones or mobile phones should include all 26 letters of
the alphabet and 10 numerals, i.e., alpha-numeric messages, or text, to be sent by
texter or received by the textee.
2.2 SMS in the Banking Environment
SMS deployment in financial services closely aligns to the implementation of
mobile banking. Tower Group projects that the base of mobile banking customers
will grow from 18 million globally in 2010 to more than 53 million in 2013.
Mobile banking transactions will surge to more than 14 billion globally during the
same period. FSIs that deploy SMS strategies consistently reach three conclusions.
First, opt-in customers, by their nature, are receptive to SMS communications.
Second, FSIs can expect a reduction in call center contact once customers link
balance alerts and event notifies to their banking habits. Finally, empowering the
customer to calibrate the velocity and type of communications enhances loyalty
and retention (Woodburn, 2002). Financial institutions continue to deploy mobile
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banking and payments capabilities to a consumer base that is increasingly reliant
on mobile devices. Some financial institutions choose a particular mobile
modality to deploy mobile banking (typically mobile Web, a downloadable
mobile application, or SMS) to minimize their investment and downside exposure;
more robust programs cover multiple modalities. Regardless of the modality they
deploy initially, financial institutions eventually realize that no single mobile
banking modality best supports all users across all transactions. Tower Group
continues to recommend that financial services institutions deploy mobile banking
and payments across all available modalities, develop and deploy the mobile
capabilities most aligned with each modality, and allow their customers to select
their preferred modality based
on their individual needs and preferences. The SMS mobile banking modality has
the unique advantage of reach. The vast majority of handsets support SMS,
whereas less than half support mobile Web and even fewer support mobile
applications. This mix may change over time as advanced handsets become more
widely available, but text messaging is and will continue to be the most used
feature of a Smartphone. Further, performing mobile transactions is generally far
quicker via SMS than via modalities that require multiple navigation steps for the
consumer to find the correct Web page to execute a desired transaction (Suoranta
& Mattila, 2004)
2.3 Dimensions of Short Messaging Service (SMS)
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According to Rotimi et al (2007), there are two methods of SMS widely used by
banks. They are the PUSH and PULL.
i.
Push SMS: Push SMS is sending a message from an application (that is,
short message service (SMS) Server) to users. It is a one-way message.
That is, the message is initiated by the mobile application (in this case, the
SMS banking application). An example could be a deposit alert, which
notifies the user when a deposit is made to his/her account.
ii. Pull SMS: Pull SMS is sending a request and obtaining a reply. In pull
SMS, a user sends a request to the SMS banking application and the
application replies with the information requested. This is applicable when
a bank customer requests for his or her bank account balance via SMS.
Today, marketers use push and pull strategies when delivering text messaging to
their clients (Scharl et al., 2005).While push strategy campaign, a predominant
method, involves delivering unsolicited messages, pull strategies involve
delivering messages based on customers’ requests (e.g., based on information they
found via mobile applications or on banner ads). A study by Dickinger &
Haghirian (2004) found that 50 percent of text messages were in a push mode, 45
percent in pull and 5percent in both. Even though push strategies are more
economical to companies than that of pull strategies, customers may view the
unsolicited contents as intrusive and unwelcome (Yunos et al., 2003).
2.4 SMS Convenience Factor to Customers
16
The convenience of executing simple transactions and sending out information or
alerting a customers through text messages is often the overriding factor that
dominates over the skeptics who tend to be overly bitten by security concerns.
As a personalized end-user communication instrument, today mobile phones are
perhaps the easiest channel on which customers can be reached on the spot, as
they carry the mobile phone all the time no matter where they are. Besides, the
operation of SMS banking functionality over phone key instructions makes its use
very simple. This is quite different from internet banking which can offer broader
functionality, but has the limitation of use only when the customer has access to a
computer and the Internet. Also, urgent warning messages, such as SMS alerts, are
received by the customer instantaneously; unlike other channels such as the post,
email, Internet, telephone banking, etc. on which a bank's notifications to the
customer involves the risk of delayed delivery and response. The SMS banking
channel also acts as the bank’s means of alerting its customers, especially in an
emergency situation; e.g. when there is an ATM fraud happening in the region, the
bank can push a mass alert (although not subscribed by all customers) or
automatically alert on an individual basis when a predefined ‘abnormal’
transaction happens on a customer’s account using the ATM or credit card. This
capability mitigates the risk of fraud going unnoticed for a long time and increases
customer confidence in the bank’s information systems (Grönroos, 1994).
2.5 SMS Banking in Nigeria and Mobile Phone Usage
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The growth rate of mobile telephony in Nigeria is exceptional given that it started
in 2001 while commercial banking operations date back to the 1950’s. In fact,
over the past decade, more people in Nigeria have gained access to mobile phones
than to banking services (Ssonko, 2010). The low financial services penetration
compared with the exponential growth of mobile telephony in Nigeria is creating a
unique niche for SMS banking to develop on the continent (Ondiege, 2008). The
Nigeria Bureau of Statistics (NBS) 2012 statistical results reveal that information
and communications technology (ICT) innovations have revolutionalized the
financial sector in Nigeria resulting in novel delivery channels for financial
products and services such as automated teller machines (ATMs), cell phone
banking, personal computer (PC) banking and Internet banking. These
developments are at par with the traditional banking services in other countries
especially in the use of SMS Banking and Mobile Banking services to the extent
that the SMS banking service is being used by all the commercial banks in
Nigeria.
In Nigeria, the model is dominated by the mobile operators, regulated
by the Nigeria Communications Commission (NCC) that do most of the
marketing as well as opening up and maintaining accounts for the subscribers who
choose to register for the mobile money service (MMS). SMS usage grew by 28%
in first quarter 2010 to about 176 million messages (compared to 138 million in
fourth quarter 2009) as mobile network operators (MNOs) encourage use through
campaigns and innovative services. To comply with financial services regulation,
the MNOs have partnered with commercial banks in Nigeria supervised by
18
Central Bank of Nigeria (CBN, 2009). On the other hand, as at December 2009,
the number of bank accounts in the country was estimated at slightly over 5
million representing a 16 percent penetration.
2.6 Theoretical Framework
2.6.1 Attitude
In survey based research, the importance of attitude has been documented in many
studies (Gopi and Ramayah, 2007; Ramayah and Suki, 2006; Ramayah et al.,
2003). Specifically, attitude is meant as the evaluative effect of positive or
negative feeling of individuals in performing a particular behavior (Fishbein and
Ajzen, 1975). It is strongly asserted that, attitude and behavioral intention have
significant relationship (Gopi and Ramayah, 2007; Amin, 2007; Ramayah and
Suki, 2006; Nysveen et al., 2005; Ramayah et al., 2003). These studies indicated
that attitude is an antecedent of behavioral intention.
Gopi and Ramayah (2007) examined online trading system from a
Malaysian perspective and found that attitude and intention to use were
significantly related. This means, an increase of attitude will also lead to an
increase of intention to use for that particular system. Ramayah and Suki (2006)
examined the use of mobile personal computer among graduate students and
found that attitude had a significant relationship with intention to use. An
interesting paper written by Ramayah et al. (2003) which also produced the same
trend of result as what the first two studies did. Attitude had a positive relationship
with intention to use internet banking among Malaysian bank customers. Further,
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Amin (2007) examined the factors affecting SMS banking use among young
intellectuals in Malaysia. Further, both male and female respondents had positive
attitudes for SMS banking use. In other words, attitude was significantly
associated with SMS banking use among those students.
Amin (2007) replicated Nysveen et al.’s (2005) study in Norway. Stated
differently, Nysveen et al. (2005) examined Norwegian from mobile chat services
viewpoint and found that both male and female respondent rated attitude as an
influential determinant to indicate their intention to use mobile chat services.
Worth to mention, attitude had a fairly equal effect on intention to use. The
attitude
was
measured
on
the
basis
of
“good/bad”,
“wise/foolish”,
“favourable/unfavourable” and “positive/negative”. This study finding is
consistent to what was discovered by Amin (2007) in Malaysia.
It is strongly asserted that attitude dimension is perhaps can be extended to SMS
banking in order to explain what factors can influence the use of SMS banking.
Attitude in this present study’s context includes a bank customer’s perception on
the basis of “good idea”, “beneficial”, “wise”, “likeliness”, “best practice” as well
as “positive idea”. Yuserrie et al. (2004) addressed the importance of the attitude
dimension in explaining an individual’s use of Islamic banking products in Pulau
Pinang, Malaysia. In a similar setting of study, Lada et al. (2009) asserted that
attitude had a significant influence on one’s acceptance of halal products in
restaurants in Labuan, Malaysia. Both of these studies agree that attitude can alter
one’s intention to do a desired action as the end of such intention.
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2.6.2 Subjective Norm
This study also attempts to understand the role of social influence to explain how
this construct helps to justify one’s decision to use SMS banking. Stated
differently, this construct is also known as subjective norm as promoted by
Theory of Reasoned Action (TRA) by Fishbein and Ajzen (1975). By definition,
subjective norm can be defined as a person’s perception that most people who are
important to her or him should or should not perform the behavior in question
(Fishbein and Ajzen, 1975).
Previous studies have explored the importance of such construct in social
science studies including in banking studies (Amin et al. 2007; Nysveen et al.,
2005; Kleijnen et al., 2004). Amin et al. (2007) alone found that subjective norm
was a key predictor for mobile banking use from a Malaysian viewpoint. They
conducted a study on the basis of convenience sampling. This effort is done owing
to the fact that Bank and Financial Institutions Act (BAFIA) 1989 did not allow a
researcher to acquire bank customers’ information as well as the bank customers’
population of any given banks. In a different setting of mobile use, Nysveen et al.
(2005) examined mobile chatting usage in Norway, and found that subjective
norm or subjective norm was found to be an important driver for mobile chatting
usage among Norwegian. In supporting this, Nysveen et al. (2005) argued that
users employed mobile chatting was due to the usage demonstrated their personal
21
value as well as the influence of others on them. Similarly, in a study by Kleijnen
et al. (2004) on wireless finance in Netherlands, subjective norm was essential in
the development of peoples’ intention to use wireless finance. It seems that people
who surround an individual add value to the individual dealing with a bank. This,
however provides an impact on consumer behavior which, on the other hand,
impacting the use of wireless finance In view of these studies, it is important to
examine whether this construct is able to provide a clear direction as a key
predictor for SMS banking use. Ideally, reference groups such as family members,
friends, teachers, and bank tellers make a necessary force to encourage an
individual to perform a behavior which consistent with their identities. This is
promoted through the use of word-of-mouth (WOM), which is imparted when
someone tells about positive things about his bank to other people (Ndubisi and
Igau, 2003).
2.6.3 Perceived Security and Privacy (PSP)
This construct has been employed in several banking studies (Ndubisi and Sinti,
2006; Pikkarainen et al., 2004; Wang et al., 2003; Ramayah and Ling, 2002). The
need to add this construct is owing to the two specific reasons. Firstly, there exists
a hot issue relating to the “missing money” from a bank customer’s saving
account that has an Internet banking facility. As such, SMS banking also
encounters with this particular issue, which leads to reluctance of SMS banking
use. Secondly, there exists a strong assertion that, people still have a weak
22
understanding of managing the use of e-banking facilities at the best conduct of
practice (Pikkarainen et al., 2004; Roboff and Charles, 1998). This has on the
other hand affected their account privacy as well as the security and tendency to
be hacked by irresponsible parties. Essentially, this issue can also be found in the
context of SMS banking. There is a credibility of service/product provider (Wang
et al., 2003). Many studies have noted why this construct is important. Of these,
Ndubisi and Sinti (2006) examined internet banking perception among bank
customers in Malaysia, and found that the risk was a weak predictor because of
the assurance of the banks over the security of their internet banking. They upheld
that all the cyber banks in Malaysia promote this product as a fully secure option
with 128-bit encryption technology. Pikkarainen et al. (2004), similarly, examined
internet banking, but from Finnish perspectives. They found that perceived
credibility was found to be not significantly related to Internet banking
acceptance.
Contrary to the above studies, Wang et al. (2004) who examined internet
banking acceptance in Taiwan, found that PSP had a significant positive effect on
behavioral intention of Internet banking. In a similar trend, Ramayah et al. (2006)
examined users and non-users’ perceptions of internet banking and found that
security was a key predictor to measure internet banking use by users. The same
work by Ramayah and his colleagues also asserted the importance of PSP in
internet banking acceptance. For instance, Ramayah and Ling (2002) found that
the respondents placed security as one of the important factors when adopting
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Internet banking. Generally speaking, bank customers have the tendency to simply
avoid the use e-banking facilities if a bank disregards the need to provide proper
measures to promote the PSP of Internet banking/SMS banking use. Owing to
these studies, it is argued that people tend to utilize e-banking facilities when the
bank management prioritizes the issue of PSP.
What is more, there exist several studies which have addressed the importance of
PSP in their scope of researches (Chiu et al., 2005; Yang and Jun, 2002; Salisbury
et al., 2001). Out of these studies, Chiu et al. (2005) has employed “personal
awareness of security” in order to explain its relationship to attitude, which in turn
impacting online purchase intentions among Taiwanese. Evidently, Chiu et al.
(2005) found that the effects of personal awareness of security on online purchase
intentions were purely through attitudes indirectly, implying that attitudes were
the key consideration with respect to personal awareness of security. The
importance of PSP is further documented by Salisbury et al. (2001) and Yang and
Jun (2002) who revealed that security was the most critical concern influencing
the attitudes of internet users. It seems that bank customers have placed a greater
importance on PSP when employing e-banking facilities, which also tells us about
their attitudes toward the use of the facilities. Speaking on attitudes, many bank
customers are unwilling to give private information over the telephone or the
internet owing to their inability to control their personal data once such data
transferred to a third party (Pikkarainen et al, 2004).
24
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter will focus on research methodology which includes research design,
population of the study, sample size determination, sampling procedure, method
of data collection, validity and reliability of data instrument and method of data
analysis.
3.2 Research Design
The two common research approaches utilized by most scholars are mainly
qualitative and quantitative research approach. To achieve the objectives of this
research, the qualitative research approach is employed. Qualitative research
approach is primarily exploratory in nature. The use of qualitative research
methods allows for adequate understanding of primary reasons, motivations,
opinions, and it offers in-depth perceptions of the research problems and enabling
the development of ideas. Qualitative research methods allow for a holistic
understanding of key subjects which cannot be quantified (Sinkovics & Alfoldi,
25
2012). On the other hand, quantitative research methods employed in studies
where the problem is quantified through a generation of numerical data that can be
transformed into usable statistics. Different variables such as attitudes, opinions,
behavior are quantified by a generalization of results for a large sample; data
generalized is used to articulate facts. (DeFranzo,
2011). Taking into
consideration that the elements this research is looking for are not of quantifiable
nature, a qualitative research approach becomes the appropriate method which
will aid an deep understanding of the topic researched. Furthermore, qualitative
research approach is also employed in studies where there is inaccessibility or lack
of sufficient data. (Patton, 2010). Qualitative research methods allow the research
to enter a more natural setting as it pays attention to the situation, looking at
different things such as experiences, behaviors, words etc., the natural settings
enable the research to use cases as a source of data, thereby allow the researcher to
interpret experiences of individuals in order to discover its meanings. On other
hand quantitative research focuses specifically on number and is strictly structured
to formulate facts and generalize it from the numerical data. This qualitative
research approach attempts to understand the meaning of some phenomenon in a
context (DeFranzo 2011).
Qualitative data collection methods vary; typically, semi-structured or
unstructured practices are utilized. The most common methods of data collection
include case studies, individual interviews, participation and observations and
focus groups. The size of the samples is typically small. On the contrary
26
quantitative research methods are much more structured and the data collections
methods are commonly using surveys, longitudinal studies, questionnaires, online
polls etc. (DeFranzo, 2011).
3.3 Sources of Data
All necessary information for the success of this research project is gathered from
Stakeholders, Advisors Books and Form, Publications, Journals, Article, Google
and Textbooks.
3.4. Population and Determination of Sample
In this study the sample population is 200 respondents in the selected study area.
The population was representative because the whole population was made up of
both male and female respondents. The sample size will be determined by use of
the following formula. According to Neuman (2010), the size of a sample for a
particular study will be calculated as follows:
Where n = the required sample size
Z = is standard normal deviate at the required confidence level (1.96) at 0.05
p = is the proportion of the target population estimated to have the characteristics
being measured when one is not sure, so one takes middle ground (0.5)
q = 1-p
d is the level of statistical significance
n = n0 / (1+ (n0 - 1) /N))
27
n = 110 / (1 + (110 – 1) / 1000))
n = 110 / (1 + (109/1000))
n = 110 / (1 + 0.109)
n = 110 / 1.109
n = 99.188 (approximately 100).
Therefore n = 100 people
3.5 Sample and Sampling Technique
The purposive (also known as judgmental or subjective) sampling technique was
used in the sampling process of the population of the research. Purposive
sampling is a non-probability sampling in which the decision concerning the
individuals to be included in the sample was taken by the researcher based on the
fact that these individuals have been around long enough to have the knowledge
of the research issue and also the willingness to participate in the research. This
technique was also chosen because the sample size was quite small when
compared with probability sampling.
3.6 Instrumentation
Information on the assessment of short message service (SMS Alert) on e-payment
banking platform was collected using questionnaire. The questionnaire was used
for the purpose of data collection as the data to be collected was quantitative and
this was the most preferred instrument. A questionnaire is a document that consists
28
of a number of questions that is written or typed in a definite order or a form or set
of forms. This instrument was preferred because it up holds confidentiality, save
and on time, lack interviewer bias and enables collection of data from a large
sample and from various regions of the study. The instrument was divided into
two parts. The first part A gave the respondents demographic data while the
second Part B had closed-ended questions to enable the respondents to express
themselves in their own words.
3.7 Reliability of the Instrument
Reliability of the instrument refers to a measure of how consistent the results from
a test are. The instrument used was trial-tested in one of the sampled respondents
which are nine (9) in numbers and their responses collected. The following were
ensured during this process. All the initial conditions were kept constant and the
same test was administered to the same subjects. The respondents were then given
three weeks before the same test was administered again to the same respondents.
Correlation was done on the scores from both testing periods to determine the
coefficient of reliability. This was done on all the sub groups of the population and
it was ensured that the results were consistent hence reliability of the instrument.
In this research, the questionnaire was designed and given to three (3) experts in the
similar field of study for validation.
3.8 Instrument Validation
Validity is the extent to which differences found with a measuring instrument
29
reflect true differences among those being tested (Kothari, 2009). The researcher
ensured that the questions in the questionnaire are framed in such a way that they
bring out the answers to the research questions. Criterion-related validity relates to
the ability to predict some outcome or estimate the existence of some current
condition. The researcher will made a pre-visit to the study area in order to
familiarize oneself with the location. On the other hand Construct validity is the
degree to which scores on a test can be accounted for by the explanatory
constructs of a sound theory.
3.9 Procedure for Data Collection
The researcher will employ the services of two research assistants that will help to
distribute the questionnaire to the 100 respondents that are involved in the study.
Adequate information was provided to guide the respondents in responding to the
items in the questionnaire. The assistants also helped to retrieved completed
questionnaire.
3.10 Method of Data Analysis
In analyzing the data collected, the researcher adopted the use of simple percentage.
Also, their frequency tables representing the information based on each research
question.
30
CHAPTER FOUR
DATA PRESENTATION AND DATA ANALYSIS
4.1
Introduction
This chapter is basically about the presentation analysis and interpretation
of collected data in the course of this research and the test of hypothesis.
The analysis of data for this research work will be in a tabulated form
based on the number of questions on the questionnaire. Out of the 100
questionnaire distributed, 96 were dully filled and retrieved. The analysis
of the questionnaire distributed is stated below.
4.2 Demographic Analysis
This section contains a detailed analysis of our primary data. To facilitate
our analysis tabular formats have been adopted in which responses are
summarized and displayed. The demographic information of the
respondents are provided below to depict the basis of the study:
31
TABLE 4.1:
DEMOGRAPHIC INFORMATION OF THE
RESPONDENTS
FACTOR
FREQUENCY
PERCENTAGE
Female
37
39.5
Sex of the
Male
59
61.5
Respondents
Total
96
100
Under 25 years
8
9
Age of the
25 – 34 years
48
49.5
Respondents
35 – 44 years
28
29.5
45 & Above
11
12
Total
96
100
Christian
64
65.5
Muslim
22
24
Traditional
10
11.5
Total
96
100
Formal
11
13.5
4
5
Religion of the
Respondents
Academic Qualification Education
of the Respondents
Secondary
32
Education
Tertiary
80
81.5
96
100
Education
Total
Source: Field Survey, 2022
Table 4.1 above shows that 61.5% were males and 38.5% were females.
This point out to the fact that there is more males in pay jobs than the
female counterpart in Nigeria. The age distribution of the respondents
reveals that 9% are within Under 25 years, 49.5% are within 25-34years,
29.5% are within 35-44years while 12.5% falls within 45years and above.
This result indicates that majority of the respondent’s falls within the age
25- 34years; this is an indication that youths (between the ages of 20-40
years) constitute the greater proportion of the people (customers) who
carry out business transaction with Nigerian banks. This might be due to
their zeal to engage in work activities in order to actualize their goals and
aspirations of life. The religion of the respondents shows that 64.5% are
Christian, 24.0% are Muslim while 11.5% are traditional. Furthermore, the
educational qualifications of the respondents depicts that 13.5% have
Formal Education, 81.2% have Tertiary education while 5.3% have
secondary education. This result reveals that majority of the respondents
are HND/B.Sc (degree) holders which demonstrates that they are educated
and experience people.
33
4.3 Analysis of Results
TABLE 4.2: Perception of customers on the use of SMS in Nigerian banking
system
S/N
Question
SD
D
A
SA
Total
F (%)
F (%)
F (%)
F (%)
The use of SMS has become vital tool 13
09
11
63
96
in rendering quality banking services (13.5)
(9.4)
(11.5)
(65.6)
(100.0)
I have access to GSM and SMS 05
19
15
57
96
services
(19.8)
(15.6)
(59.4)
(100.0)
I have benefited from the utilization of 02
21
10
63
96
SMS on your mobile phone or GSM (2.1)
(21.9)
(10.4)
(65.6)
(100.0)
F (%)
1
in Nigeria
2
3
(5.2)
As a customer, i get SMS from the
34
bank on every transaction I made with
the bank
4
I use to get SMS notification of 04
07
08
77
96
technical
(7.3)
(8.3)
(80.2)
(100.0)
I receive SMS security alert from my 11
19
12
54
96
bank through SMS and I also send (11.5)
(19.8)
(12.5)
(56.3)
(100.0)
I am up-to-date on my account 10
23
08
55
96
activities through SMS alert
(24.0)
(8.3)
(57.3)
(100.0)
I mostly use SMS banking to perform 09
21
15
51
96
most of financial transaction in my (9.4)
(21.9)
(15.6)
(53.1)
(100.0)
difficulties
or
service (4.2)
up-grading from the bank
5
security report to the bank through
SMS
6
7
(10.4)
bank
8
9
I do receive SMS alert Public educa-
07
11
14
64
96
tion and awareness on social issues
(7.3)
(11.5)
(14.6)
(66.6)
(100.0)
I am satisfied with the use of SMS in
03
14
06
73
96
Nigerian banking firms
(3.1)
(14.6)
(6.3)
(76.0)
(100.0)
Source: Field Survey, 2022
Flowing from the works of Gary and Izak (2001); Hausmann-Muela (2003);
Yuji (2009) perception includes four basic variables. These are knowledge,
attitude, practice, and belief [KAPB]. From table 4.2, it is evident that 86.5% of
35
the respondents agreed that they had knowledge of the use of SMS in Nigerian
banking firms, while 13.5% indicated that they needed the knowledge. This
shows that the large number of respondents know about the use of SMS as a
strategic management tool in Nigerian banks. On the other hand, attitude is
defined in terms of access to SMS services which is product of techno- logical
advancement. Most often, attitude cannot be formed without external stimuli (in
this case GSM). It then follows that access to GSM and SMS services sheds light
on the respondents’ dimension of attitude. From the table 4.2, majority (94.8%)
of the respondents indicated that they have access to GSM and SMS services has
improved their access to SMS sent by Nigerian banks in the study area, while
only 5.2% disputed this. Practice has to do with putting into use certain object or
knowledge acquired to determine its desirability for continued utilization or
otherwise. In this study, practice is measured in the benefits associated with the
utilization of GSM and SMS services as a result of im- proved
telecommunication sector. Hence, 97.9% of the respondents claimed to have
benefitted from the utilization of GSM and SMS services, while 2.1% were
critical about the benefits associated with the GSM and SMS services.
Table 4.2 reveals the respondent’s distribution on the use of SMS in Nigerian
banking industry. The result revealed that 65.6% of the respondents confirm that
the use of SMS has become vital tool in rendering quality banking services in
Nigeria, 20.9% were of the opinion that SMS is rarely used in rendering bank
services while 13.5% strongly disagree with the assumption that SMS is a vital
36
tool in Nigerian banking industry. Hence, it can be concluded that SMS has
become vital tool in rendering quality banking services in Nigeria.
More so, majority of the respondents 80.2% stated that they always receive SMS
alert from the bank on every transaction they carry out with the bank, 15.6%
claimed that they somewhat get an SMS alert from the bank while 4.2% averted
that they do not receive SMS alert from the bank on every financial transaction
they. Nevertheless, we can infer that a majority of the respondents receive and read
SMS alert on the transaction they engage with the bank. Also, most of the
respondents 88.5% stated that the bank do send SMSes to remind them of special
events, birthday or public holidays and 89.6% were of the opinion that SMSes are
sent from their bank to notify them of technical difficulties or service upgrading
while 90.6% submitted that their banks send them SMS to alert them of sales
promotion, health tips and information about new products advertisement and
92.7% received SMSes from their banks on public enlightment or aware- ness on
recent social issues. Above all, majority of the respondents 96.9% claimed that
they are satisfied with the use of SMS as a strategic tool in Nigerian banks. To
investigate the issue further, a thirty-one year old female customer claimed to have
benefitted from the use of SMS as a strategic management tool in Nigeria Banks.
She said:
GSM technology brought the existence of SMS services in
Nigeria. The technology is good for communication.
Everybody now is using it for private and commercial
37
purposes. It has replaced and reduced the need for
travelling for shopping, visitation, information, business etc.
It does also reduce cost of living and risk associated with
travelling, I think it
is beneficial. It facilitates business
without delay across locations and that is why Nigerian
banks have been keen into the use of SMS services to
render better and convenient banking practices for their
customers. They send information about the status of their
customers’ bank ac- count, financial transaction, exchange
rate, and socio-economic condi- tion as well as health and
security alertness to their customers through SMS
(IDI/customer/GTB/Abeokuta/2022).
Also, another beneficiary, a forty year old male respondent said:
The use of SMS as a strategic management tool to achieve
desired objectives by Nigerian banks is a welcome idea. I
so much appreciate it because it keeps me update on vital
information which I needed to keep my business moving. I
get latest news on forex trading; exchange rate, fund
transfer, purchase of online products and payment of bills
like electricity, water, airtime, DStv subscription etc. I
believe that the use of SMS as a strategic business
management tool has improved my trust and confidence in
38
modern day banking system particularly Nigerian banks
(IDI/Customer/FCMB/Abeokuta/2022).
More interestingly, a sixty-nine year old female respondent, a retiree of an
insurance firm subtly expressed some remarks about the use of SMS for customer
relations in Nigerian banks and said:
Although the use of GSM in Nigeria has fast spread. Almost
every Nigerians (including children) have access to GSM
and SMS services either on their own personal phones or
the one owned by other people. Hence, the adoption and
utilization of SMS for customer relations is highly good for
businesses and organizations that aim to survive in today’s
competitive business world. This is because is the easiest
and fastest way to disseminated information and maintain
constant relationship with large number of people
(customers) without spending so much. I think the use of
SMS is also good for Nigerian banks that are becoming
strong financial institutions in the world and on Africa
continent today. Because, I get so much and better
information about my bank account, health tips, new
products, training opportunities, special events and
holidays most especially my birthday. They (Bank
management) remind and congratulate me of my birthday
39
which I so much appreciate. To be sure, I got nothing less
than 5 SMSes from my banks on my last birthday date
which really made my day interesting and motivating. In
fact, due to family and business responsibilities sometimes I
don’t remember my date but now my banks do the reminder
for me. And if I go to any of their (Bank) branches on my
birthday I do receive gifts from some of the staff who have
become my friends…(IDI/Customer/First Bank of Nigeria/
Abeokuta/2022).
Also, another respondent provided additional dimension of benefits of SMS
utilization in Nigerian banks and said:
Honestly speaking, the emergence of ICT, GSM and SMS
services in Nigerian banking sector has been a blessing
and a vital tool that make the aspiration to improve
customer’s satisfaction and patronage possible in Nigeria.
Because,
they
provide
opportunities
for
dealing
effectively with sophisticated business transactions and
customers’ relation matters. As such, the use of SMS has
given many banks an edge or competitive advantage in
areas like company’s mission, corporate im- age as well
as development of new services and products based on
SMS survey report and feedback from their customers
40
and
the
general
to
public
(IDI/Customer/Diamond/Abeokuta/2022).
From the responses above, it is evident that the use of SMS as strategic
management tool by Nigerian banks has helped to improve the level of
customer-management relationships. It has equally enhanced the rate at which
customers perceive the quality of services provided by the Nigerian banking firms.
The finding further established that prior to the adoption of mobile SMS service
which tends to notify bank customers on transactions such as withdrawal, payment
due and accounts credit information, bulk of the customers had to either go to the
bank or ask their friends to help them obtain such information from the bank. For
the majority of the customers who go to the bank for information spent an average
of NGN 50 to get to the bank. While, those customers who ask their friends to help
them obtain such information had at least been disappointed once by those friends.
However, in current dispensation, customers who subscribed to the SMS alert
service and are now receiving SMS alert on the information they need to know
from the bank on their accounts, new products and services consider SMS
beneficial to them. This could be a reason for the majority of the respondent’s to
remark the adoption SMS service in Nigerian banks a blessing and a vital tool that
make the aspiration to improve customer’s satisfaction and patronage possible.
This is unconnected with the costs and challenges associated with the use of GSM
phones and SMS services.
41
TABLE 4.3: SMS Usage and Customer-Management Relationship in Nigerian
Banking System
S/N
ITEM DETAILS
10
I believe SMS banking is
SD
D
A
SA
Total
07
(7.3)
09
(9.4)
31
(32.3)
49
(51.0)
96
(100.0)
03
(3.1)
06
(6.3)
27
(28.1)
60
(62.5)
96
(100.0)
01
(1.0)
04
(4.2)
11
(11.5)
80
(83.3)
96
(100.0)
01
(1.0)
05
(5.2)
38
(39.6)
52
(54.2)
96
(100.0)
11
(11.5)
19
(19.8)
12
(12.5)
54
(56.3)
96
(100.0)
fast and easy to use
11
I believe SMS banking is
more reliable and secure
12
I believe SMS alert can
prevent fraud and theft
13
The charges on SMS
alert by my bank is fair
14
I believe SMS alert is
timely over e-mail and
42
other banking service
Source: Field Survey 2022
Table 4.3 shows the respondent’s view on how the use of SMS in banking firms has
shaped the social relations between customers and bank staff in Nigeria. The result
revealed that 83.3% of the respondents claimed that they believe SMS alert can
prevent fraud and theft while just 5.2% disputed it. This means that majority of the
respondents admit that the use of SMS in banking firms has shaped the facet of
banking fraud in the banking industry
. Flowing from this, 62.5% of the respondents affirmed that they believe SMS
banking is more reliable and secure and use SMS to carry out business transactions
as well as to track the status of the transaction so as to ensure that it is actually done
without physically carrying money around.
This view was buttressed by the majority 56.3% who claimed that
sometimes they SMS alert is timely over e-mail and other banking service. As a
result of the quick response, 54.2.8% of the respondents avow that they believe
charges on SMS alert by my bank is fair.
To advance the investigation, a bank customer who is also a spare part dealer was
interviewed and He claimed to have been enjoying quality customer-management
relationship since the adoption of SMS in Nigerian banking firms. He said:
I must be sincere with you, I really like the way
Nigerian banks are now operating. The use of SMS as
a tool to communicate and trans- act business is of
43
great benefit to someone like me. I and my busi- nesses
have benefited so much that I hardly make phone call
for any information or assistance from the customer
care desk like before. Before now I use to call customer
care desk which often cost me so money and time
trying to seek assistance from there. At times, they
don’t pick up the call on time and when they eventually
picked one may not grab the response clearly for quick
articulation because of the incessant fluctuation of
network services. However, the situation has change so
much that what I do now is just to send an SMS and I
got
what
I
needed
at
almost
immediately.
(IDI/Customer/FCMB/Abeokuta/2022).
An interviewee also affirmed that:
The
acceptance
of
customer-management
SMS
as
relationship
a
in
tool
for
Nigerian
banking industry has significantly the level of
competence, trust and social relations existing between
bank customers and the management. For instance, in
the past, I use to nurture the notion that when
customers who came to withdraw huge amount of
money are being robbed on their way from the bank, it
44
is the bank staff who give the information about those
customers to the robbers. This assumption for a long
period did not encourage me to have any serious
interaction with bank staff particularly when I want to
withdraw or save huge among of money. But now, the
use of SMS has changed such notion about bank staff
which has significantly improved the social relations
between customers and bank staff in Nigeria
(IDI/Customer/GTB/Abeokuta/2022).
Still on how the SMS has promoted customer-management relationship, another
interviewee stated that:
The use of SMS as a strategic management tool in
Nigerian banks reduces the stress of queuing, cost of
calling and delay in response from customer care desk.
It also makes the ongoing process of Customers’
Verification exercise and the issuance of Bank
Verification Number (BVN) to bank customers in a bid
to curb fraudulent activities in Nigerian banking firms
and society at large much more easier. In the process,
SMS was used as the tool to send the BV Number to
every customer after being registered at the designated
banks for the sake of privacy and security. Also, in a
45
situation where a customer operates more than one
bank account SMS served as the tool to link the bank
account together with the same BV Number given to
the customer. In fact, it makes the BVN exercise very
easy and convenient for customers. This led to increase
customer’s satisfaction, trust and patronage in
Nigerian banking firms (IDI/Customer/First Bank of
Nigeria/Abeokuta/2022).
From the responses above, it is evident that the use of SMS in Nigerian banks has
produced positive social relations without any mixed reactions between the
respondents and bank staff. This posture is a reflection of the level of knowledge
and experience the customers has had with the use of SMS as a strategic
management tool in Nigerian banking industry. It is equally an upshot of the
advancement in mobile banking (mBanking) and electronic banking for business.
All of these have positive effects on the lives and businesses of individuals as
adduced by various scholars and confirmed by the respondents used in this study.
4.4 Discussion of Findings:
The principal thrust of this study has been to investigate assessment of SMS alert on
e-payment banking platform. The study established that customers’ perception
towards the use of SMS services has been positive. A majority of the customers
considered SMS adoption in banking firms beneficial because the service saved
46
them time and money as well as relief them of unnecessary anxieties. This finding is
a reflection of the view that consumers like to have choices in the way they
communicate with businesses and increasingly consumers are turning to SMS. The
use of SMS services to communicate information about new products, policies and
services by banks has enhances the reading habit of many young Nigerians who
uses SMS as a means for conducting business trans- actions and personal
development. The finding shows that majority of the customers who registered for
SMS services with the banks engage in constant reading of text mes- sage or SMS
that comes into their mobile phones. Aside this discovery, it was also found that
SMS play a critical part in the ongoing Customers’ Verification exercise which the
government authorized all banks in Nigeria to carry out. The majority of
respondents affirmed that after the BVN registration, SMS or text message was sent
to their (customers) mobile phones as reference check and completion of the
exercise. Considering the outcomes of this study, Nigerian banking firms are
therefore advised to improve on the use of SMS as a strategic management tool for
promoting customer- management relationships. However, there is need to ensure
that the contents of the message are well organized and structured in way that will
entice the interest of targeted customers. This is very important because
customer-management relationships may be affected if the SMS tends to become a
nuisance to the customers. Text messages which do not appear to be clearly defined
may generate a negative responses from customers rather than what is expected to
create customer loyalty, retention and satisfaction. Like- wise, unsolicited SMS or
47
text messages may disturb the customers resulting in more negative perception
about the products and services of the bank. This calls for banks to ensure that only
relevant and interesting messages are sent to the customers. In this direction factors
such as consumer permission, personalization and message content play critical
role to develop positive m-users attitude towards the reception of text messages of
SMS on their mobile phones as revealed by studies like Tripathi and Siddiqui
(2008), Khraim et. al., (2011) and Imran (2011). Moreover, the finding of this study
has point out the view that «just as food and water are essential for man’s survival
so is communication central for fostering fruitful customer-management
relationships» in a globalized world.
48
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings
The study is centered on the assessment of short message service (SMS Alert) on
e-payment banking platform. The objectives of the study are to ascertain the
awareness and customer perception on SMS alert on e-payment in Nigeria, find
out which of the dimensions of SMS is adopted by commercial banks in Nigeria;
and examine the effects of using SMS alert on organizational performance of
commercial banks in Nigeria. The relevant literatures were reviewed as well as the
theory aspects of the literature. A survey research design was adopted for the
study while data for the study was gathered from distributed questionnaire and the
analysis was done according to the data gathered. In analyzing the data collected,
the researcher adopted the use of simple percentage. Also, their frequency tables
49
representing the information based on each research question.
5.2 Conclusion
The study established that customers who have subscribed to the SMS alert
service considered the service beneficial because they perceived that the service
saved them time and expenditure as well as relief them of unnecessary anxieties. It
is also established that males dominate the clientele base of banks in Nigeria as
compared to females probably due to their dominant in the formal sector
compared to their female counterparts who are mostly in the informal sector.
Banks in this region should roll out products that are tailored towards the informal
sector to expand their clientele base. The study also found that customers’
perception of quality and value of the alert service as well as their loyalty to the
bank grossly influenced their decision to subscribe to the mobile SMS alert
service. This calls for banks in the region to invest on improving the quality of the
SMS alert platforms as well building customer loyalty since these factors enhance
customers’ subscription to the banks’ electronic services. Another perception of
customers for subscribing to the mobile SMS alert banking services was that the
service will provide them with timely and reliable alert information on payment.
5.3 Recommendations
The following recommendations were made for the study;
50
i.
The Banking industry is therefore required to improve the use of SMS to
customers. Customer satisfaction tools may be affected if the SMS tends to
become a nuisance to the customers. Text messages which do not appear
to be clearly defined may generate a negative responses from customers
rather than what is expected to create satisfaction.
ii. In order to know what customers reaction and attitude towards SMS in
banking industry, it is important to recommend to managers in the banking
industry that SMS banking emerging tool for marketing communication, it
broadens the theoretical foundations of direct marketing. Actually it is an
interesting marketing tool which can reach the target customers.
iii. On the other hand, SMS may disturb the customers resulting in more
negative perception about the products and services of the bank. Therefore,
the message must be the relevant and interesting to the customers.
Unnecessary massage should therefore be avoided. Also massages should
not be sent to customers at mid night and their account number should not
be included in the massage because of security reasons.
iv. Lastly, better procedures should be set against standards to measure the
result and its impact on customer’s attitude.
51
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56
APPENDICE
NATIONAL OPEN UNIVERSITY OF NIGERIA.
FACULTY OF ART AND SOCIAL SCIENCE ABUJA STUDY CENTRE,
DEPARTMENT OF EDUCATION
TOPIC: ASSESSMENT OF SHORT MESSAGE SERVICE (SMS ALERT) ON
E-PAYMENT BANKING PLATFORM.
Dear Respondent,
57
This questionnaire is designed to collect data on the above topic and is meant for
academic exercise as well as to aid policy formulation on the subject matter.
Kindly fill out your responses as frankly as possible and the information you
provide will be treated in confidence. Thank you for your anticipated cooperation.
Section A. Demographic characteristics of Respondents (Tick as appropriate)
1. Gender
Male [ ]
Female [ ]
2. Age Group
Under 25 [ ]
25 – 34 [ ]
35 – 44 [ ]
45 – 54 [
55 – 64 [ ]
]
3. Profession
4. Religion
Trader [ ]
Banker [ ]
Islam [ ] Christianity [ ]
5. Level of Education
Student [ ]
Traditional [ ]
No Formal Education [ ] Formal Education [ ]
Secondary School [ ] Tertiary Level [ ] Other
(specify)……………...................
Section B.
This section aim to finding out your opinions about the statements
listed below.
Please read the following statement and circle the number that best
describes your opinion on the study.
SA
A
SD
58
U
D
The use of SMS has become vital tool in rendering
quality banking services in Nigeria
I have access to GSM and SMS services
I have benefited from the utilization of SMS on
your mobile phone or GSM As a customer, i get
SMS from the bank on every transaction I made
with the bank
I use to get SMS notification of technical
difficulties or service up-grading from the bank
I receive SMS security alert from my bank through
SMS and I also send security report to the bank
through SMS
I am up-to-date on my account activities through
SMS alert
I mostly use SMS banking to perform most of
financial transaction in my bank
I believe SMS banking is fast and easy to use
I believe SMS banking is more reliable and secure
I believe SMS alert can prevent fraud and theft
The charges on SMS alert by my bank is fair
I believe SMS alert is timely over e-mail and other
banking service
59
The use of SMS in supporting my banking spirit
and prospect to quality service has been very
effective.
I am satisfied with the use of SMS in Nigerian
banking firms
60