Acknowledgments
First and for most I would like to thank the Almighty GOD for his unending helps and blessings to
complete my thesis, without his blessings and support I wouldn't have been write a single word.
Next I would like to express my special appreciation and thanks to my advisor, _________ for the
guidance and support in my research work. I would like to extend my appreciation to my family
members especially _______________ kind support and encouragement, and pray for the success
of my work. And I am also grateful thanks to my best friends at AwashBank who were cooperating
me on the support and encouragement. My special thanks extend AwashBank staffs to Moges
Tesfaye from Database Administrion division, W/o Wogen Mamo from System Administration
Division, Meseret Gedamu from support office division, Gelan Ketama manager of systems security,
Nurfeta Legessa director of AwashBank system development and customization and Ato Yohannes
Bekele manager of AwashBank project management office for their support during the data
collection process. I am also very thankful to all staff members of AwashBank system administration
department for the success of the research work in one way or the other.
Table of Contents
List of Figures
List of Acronyms
ATM – Automatic Machine Teller
IB – Internet Banking
IT – Information Technology
MB – Mobile Banking
POS - Point of Sale
SDA – Standard Deviation
SMS – Short Service message
VIF – Variance Inflation Factor
Abstract
The advancement of web applications and technology offers a vital benefit for business particularly
for banks. Modern Banking increasingly relies on the Internet and computer technologies to operate
their businesses and market interactions. Banks are on the way of using up-to-date technologies to
increase efficiency and effectiveness in service delivery. However, these benefits do not come
without risks for information being misused, service disrupted or any other attacks interrupting the
normal operation because of lack of insecure web application development and policy. As the
threats and security breaches are highly increasing in recent years globally specially in bank sectors,
AwashBank is not exception of that.
The main objective of this study is to assess and propose a awashbank web applications
development life cycle security. In this work, attempts were made to examine and compare the
available existing web application development life cycles, policies, standards and best practices.
This research assesses the current trends, practices and analysis with respect to international trends
in AwashBank.
By applying a mixed research method approach the study assesses the existing practices, process
and challenges of the AwashBank web applications development security issues and proposed
secured web application development life cycle framework which is workable for the AwashBank in
particular and for any web application developers in general. Finally, the researcher proposed a
workable framework that can assist the bank to develop versatile and secured web application.
The framework has both practical and theoretical contributions to the bank in particular and for
Researchers and developers in general for further similar efforts.
Keywords: Web Security, Web Application Security, Web Application Development Security
Framework, Secured Web Application development life cycle.
CHAPTER ONE
1. Introduction
1.1. Background of the Study
Information technology is highly affecting human activities and their ways of life. Advancement
in IT is changing every sector’s working practice. Banking is one of the sectors which are rapidly
evolving through IT. Due to the rapid development of IT industry, people today have hugely
recognized the importance of implementation of IT projects.
IT project management often encounter many issues, such as rapid technological upgrade, fast
changes in the environment and frequent movement of people. Banks are in a dynamic state using
information technology to meet business goals, to improve financial performance and stay on top of
the competition. Banks are facing challenges in the current environment. Customer needs and
expectations are changing rapidly and satisfaction levels decrease by operational issues like services
unavailability, interruptions and errors. Digital channel adoption is growing globally. Bank
management teams have to do more as competition continues to escalate among traditional banks as
well as ambitious new entrants (Ernst and Young, 2014).
Awash bank implemented core banking system to improve its services and promote efficiency.
In addition to core banking, AwashBank uses digital channels like mobile banking, Agency banking
and internet banking services, and cards like prepaid, amanah and debit cards.
Similarly, the bank in cooperation with Nib Bank, United Bank, Birhan Bank, Cooperative Bank
of Oromiya has established in 2012/13 a share company known as "premiere switch solutions s.c."
(PSS) and for the joint operation and management of automatic teller machines (ATM), which was
first introduced in Ethiopia in 2001, with the Commercial Bank of Ethiopia being the pioneers of
this service to the banking sector and point of sale (POS) terminals, National bank of Ethiopia
implement central E-payment switch or national switch to enable clearing of cheques and using the
ATM of any bank and use POS (point of sale). In addition to this, AwashBank is using mobile
banking, Awash Mobile and AwashBIRR plus Awash Mobile Wallet (*901#) to make any
transactions, transfer money, view balance and statements and the like.
Currently PSS integrated with EthSwitch, a centralized switch system which integrate all real-time
and online payment systems in Ethiopia. All banks in Ethiopia share resources to expand services
convenience to customers, EthSwitch is owner and operator of the National E-payment Switch
established in 2011 by all banks with 80.5 million Br following the recommended by National
Bank of Ethiopia (NBE) in order to centralize banks’ payment the aim was to bring interoperability
among banks in the country, Ethiopia, as a result clients of any Ethiopian retail banks (Switched
member banks) created chances to access services via all the ATMs in the country for cash
withdrawal, make payment via POS in any terminal and utilize cheque balancing. Awash Bank is
one of the members, due to this the bank benefited from interoperability as well as providing a
new level of convenience to Ethiopian citizens, merchants, and organization.
As per Awash Bank website, the bank provides a fully-fledged payment card services as a principal
plus member of visa international and master card, the world leader card association. The bank is
engaged in both card issuing and transaction acquiring business. Awash Bank is now issuing prepaid,
amanah and debit cards that could be used to effect payment at merchant outlets and to withdraw
cash from ATM machines installed at different location in the country.
On other hand, AwashBank uses a mobile banking system, Awash Wallet and AwashBirr, as a
mobile banking services which is a simple and convenient to use mobile banking system. Holder of
any mobile device can use the service without internet connection but availability of a mobile
network is required. It is cost free or the user is not charged by telecom operator for using the
services. It is used to inquire balance, payments (Airline ticket, DSTV, Cana+, Derash, Et-switch
bills, Ethiotelecom cards (mobile, direct line, Wifi, Postpaid, EVDO), Traffic penality, school fee
and shoppings), accounts transfer, sending money, cash out and more.
Recognizing superior value of rendering advanced technological service to customers, this study
aims to investigate the customer satisfaction and complain management or handling of the bank.
Although there are a lot of variables which contribute to the measure of customer satisfactions, this
study focused on the activities which have direct related to satisfaction and complain gained from
using ATM and Mobile Banking of Awash Bank over other services. Accordingly, the study carried
out to identify and pointing out the factors that affect the satisfaction of the ATM and Mobile
Banking and to identify the existing opportunities which have great influence for the success of
complain handling and its solutions. Therefore, the study tried to assess the customer satisfaction
and compliant handling of Automatic Teller Machine and Mobile Banking in Awash Bank.
1.2. Background of the organization
AwashBank was established by 486 founding shareholders with a paid-up capital of Birr 24.2
million and started banking operations on Feb. 13, 1995. As of end of June 2020 the number of
shareholders and its paid-up capital increased to over 4,369 and Birr 6 billion, respectively.
Likewise, as of end June 2020, our total assets reached Birr 107.3 billion with over 713 branches
found across the country, Awash Bank continues to be leading private
commercial Bank in Ethiopia. It has succeeded over 26 years in a rapidly evolving market and
economy. It is the first private bank in Ethiopia to exceed a 100 billion profit mark in the history of
Ethiopian private banks in the financial year 2021. Annual Report, 2020/21. The bank has its
vision “To be the First Choice World Class Bank”.
The bank introduces ATM and successful launch card payment system in the financial year
2012/13 through Premier Switch Solutions S.C., a company jointly established by Awash Bank,
Nib International Bank S.C and United Bank S.C. Currently, Awash Bank is using 468 (178 in Addis
Ababa, 232 in Regions and 58 Lobby) ATM machines and 680 POS terminals on its own to increase
its
outreach
both
in
and
outside
Addis
Ababa
to
improve
its
service
delivery
(https://www.awashbank.com/atm-network). The bank has also become the principal member of
Master Card, thereby enabling MasterCard holders to transact through ATM and POS terminals of
Awash Bank for their cash and payment needs. This facility was expected to increase the foreign
exchange earnings of the bank (Annual report 2012/13). As per the corporate profile on 2021, Awash
Bank has around 470 ATM and 680 POS machines for all its branches and hotels where there is
telecommunications network and supplying Points of Sale (POS) machines which accept and process
international cards such as MasterCard, VISA and China Union Pay. The bank put those machines
throughout the country. Since the bank performance has increased in different direction especially
technology-based services it strives to deliver value to its customers in the most convenient way
possible with the object of enabling them to conduct banking transaction anytime and anywhere. To
this end, Awash bank has offered different touchpoints. The major non-traditional service delivery
channels include, among others, ATMs, POS terminals, mobile banking and internet banking.
Currently, the bank is working with 17 international money transfer agents including PayPal.
The Banks ATM is available 24 hours a day, seven days a week and 365 days a year providing
service to available services on bank. ATM services are Cash Withdrawal, Balance Inquiry, Ministatement, Fund transfer between accounts attached to a single card and PIN (Personal Identification
Number) change and Unlock. ATM enables the clients of a bank to have access to their account
without going to the bank. This achieved by only the development of application using online
concepts. The implementation needs ATM machine hardware to operate or similar simulated
conditions can also be used to successfully use the developed product.
1.1. Objective
1.1.1. General Objective
The general objective of the study is to investigate customer satisfaction and compliant handling of
two self-servicing technologies ATM and Mobile Banking at Awash Bank of Ethiopia.
1.1.2. Specific objectives
The specific objectives of the study were:
 Investigation of custom usability and satisfaction regarding the two self-servicing
technologies
 Comparison of the technologies in terms of custom satisfaction during covid-19
 Comparison of the two technologies in terms of customer increment, service quality and
expansions/coverages
 Number of compliance and respective management/handling techniques for both
technologies
1.2. Statement of the problem
AwashBank, as any banks in Ethiopia, compete with other banks to attract its customers in many
ways through providing convenient, accessible and acceptable services or/and products to their
customers.
One of the most important of these services is electronic service that has contributed significantly to
enhance the distance between customers and the bank. It was adopted by the bank so as to improve
their service delivery, decongest queues in the banking hall, enable customers withdraw cash 24/7,
track personal banking transaction, request for online statement, or even transfer deposit to a third
party account.
There are several benefits of electronic banking like transferring money, collecting receivable,
paying bill, productivity gains, transaction cost reduction, customer service improvement and at the
same time establishing a means to control the overall activities on bank accounts.
Despite the effort of the bank to ensure that customers get the benefits of electronic banking, the
bank is met with complaints from customers as regards, related ATM like machine out of order,
machine out of cash, no printing statements, cards get blocked, frequent breakdown of ATM service,
payment of hidden cost of electronic banking like short message service (SMS), lack of sufficient
technicians in all bank who solve break down of ATM machine, and related to mobile banking like
mobile banking not working, failing to send validation codes when receive money from ATM, failure
of transactions, unavailability of the system, multifactor authentication lack.
This study is aimed at finding out the reason why these problems occur and in most
case persist, and then to make recommendations based on the outcome of the study.
1.3. Scope of the study
Geographically, the research focus on those selected branches of AwashBank located
in Addis Ababa region. The selected branches are chosen based research methodology because of
the extensive use of these electronic banking, ATM and Mobile Banking.
Contextually, the research emphasizes on electronic banking focusing on the satisfaction and
complain impact of these ATM and Mobile banking on customer satisfaction in Awash bank.
The study is also delimited on independent variable reliability, assurance, responsiveness, empathy
and tangibility but there are also many variables that determine dependent variable customer
satisfaction on these electronic banking.
1.4. Significance of the study
The main significance of this study is gaining satisfaction and compliance level of AwashBank
customers with respect to AwashBank ATM and Mobile banking to do required tasks a per the
findings. In addition, this research point outs the impacts of electronic banking, ATM and Mobile
banking, on customers with respect to normal operation basis. It’s also used for recommend the bank
what action should be taken in order to advance in electronic banking sector correcting customers
complains and may add value for existing knowledge areas
Generally, the study tries to show the significance of an assessment of the customer satisfaction
and complaints handling of self-service electronic technologies, ATM and Mobile banking in
Awash bank as follow;
 The study intends to make contribution through the findings which is useful source of
information for Awash Bank to review the current customer complains which need
improvements and enhancements.
 The conclusions and recommendations of the study will provide necessary suggestions that
help the bank to give attention on the customer satisfaction factors which affects the customer
interests and attractions
 It revises repetitive complains and recommends best solutions for it
 It recommends tasks have to be done to meet customer satisfaction
 It enables the bank to identify the gaps of challenges and its impact on customer satisfaction
and recommends solution has to be done
1.5. Research questions
The research has the following research questions to address the objectives of the research.
a) What are the complains the customer is raising concerning ATM usage?
b) What are the complains the customer is raising concerning Mobile Banking?
c) What are the methods used by the bank to handle customer complains?
d) What are the main consideration factors to handle customer complains?
e) What are customer satisfaction requirements concerning ATM usage?
f) What are customer satisfaction requirements concerning Mobile Banking usage?
g) How these self-service technologies used for customers to prevent them from covid-19?
1.6. Operation Definitions and Key Terms
For this study, the operational definitions for the key terms and concepts are as follows as per
AwashBank, 2021 procedure.
1.6.1 Automated Teller Machine (ATM): is unattended acceptance terminal that has
electronic capacity, accepts PIN, disburses money, and may provide balance
confirmation, fund transfers between accounts and other services.
1.6.2 AwashBank: a non-government commercial bank owned by shareholders’ bank that accepts
deposits and channels the money into lending activities.
1.6.3 Customer: shall refer to legal person or natural person with whom the bank agrees to
conduct business.
1.6.4 Customer Satisfaction: is a measure of how products and services supplied by a
company meet or surpass customer expectation. It is seen as a key performance
indicator within business.
1.6.5 E-banking: is the provision of financial banking service through electronic devices.
1.6.6 Internet Banking (IB): shall mean the internet as a remote delivery channel for
banking service through a secure website operated by the bank using access devices,
including personal computers, lap top and other intelligent devices.
1.6.7 Mobile Banking (MB): refers to the use of a Smartphone or other cellular device to
perform online banking tasks while away from your home.
1.6.8 Point-of-Sale Terminal (POS): is electronic device used for authorizing and processing
bankcard transactions at point-of-sale.
1.7. Organization of the paper
The study is presented in five chapters. The first chapter contain the introduction part of the
paper which comprises the background of the study, background of the company, statement of
the problem, basic research questions, objectives of the study, hypothesis of the research,
definition of key terms, significance of the study, and scope of the study.
The second chapter provides the relevant theoretical and empirical information obtained from
related reviewed literatures pertaining to the topic under the study.
The third chapter presents the research methodology part used to carry out the research activities.
This part of the research report comprises the type and design of the research, the participants and
samples of the study, sampling methods and procedures employed, data sources and data collection
instruments used, the data collection procedures, the data analysis and presentation methods used.
The fourth chapter show the findings, the interpretation and discussion parts of the research.
Finally, the fifth chapter contain the summary, conclusion and recommendation part of the study
report.
CHAPTER TWO
LITERATURE REVIEW
2.1 The Concept of Electronic Banking
Electronic Technologies in banking services can defined in different ways based on their
understanding of its application. Electronic banking is the term used for new age banking system
and it is also called online banking (Auta, 2010). Electronic banking uses the internet as the
delivery channel by which to conduct banking activities, for example, transferring funds,
paying bills, viewing checking and savings account balances, paying mortgages and purchasing
financial instruments and certificates of deposits (Mohammed, Siba & Sreekmar, 2009 cited
in Auta, 2010) without cash or paper money exchange between the cashier and customer.
Electronic banking is the delivery of banking services and products through the use of electronic
means irrespective of place, time and distance. Such products and services can include deposittaking, lending, account management, the provision of financial advice, electronic bill payment,
and the provision of other electronic payment products and services such as electronic money
(Dogarawa, 2005). Electronic banking is also known as the automated delivery of new and
traditional banking products and services directly to customers through electronic, interactive
communication channels (Daniel, 1999; Sathye, 1999).
2.2 Types of Self Service Electronic Technologies in Banking Sector
2.2.1 Mobile Banking
This involves the use of mobile phone for settlement of financial transactions. This is more or
less fund transfer process between customers with immediate availability of funds for the
beneficiary. It uses card infrastructure for movement of payment instructions as well as secure
SMS messaging for confirmation of receipts to the beneficiary. It is very popular and exciting to
the customers given low infrastructure requirements and a rapidly increasing mobile phone
penetration in the country. Services covered by this product include account enquiry; funds
transfer; recharge phones; changing passwords, bill payments. Even though the product is
exciting most customers are yet to fully buy into it in Nigeria, hence, both the apex bank and
other banks still have a lot to do in terms of increasing awareness of the product to the saving
populace in the country (Siyanbola, 2013).
2.2.2 ATM - Automatic Teller Machine or Electronic card
An ATM uses a physical plastic card that uniquely identifies the holder and can be used for
financial transactions on the internet. Automated Teller Machine (ATM) and Point-of Sales (POS)
terminal are used to authorize payment to the merchant or seller (James, 2009). The various
types of electronic cards include debt, credit cards; releasable cards require visiting banks for
replenishment. Debit cards are linked to local bank accounts and offer immediate confirmation of
payment. Credit cards can be used to link a customer to a credit line and can also be used for
accessing local and international networks and are widely accepted in most countries. The
underlying infrastructure and operational rules are often provided by global trusted schemes (such
as visa and master card) in addition to local lines (James, 2009).
2.2.3
Internet Banking
Internet banking refers to systems that enable bank customers to get access to their accounts and
general information on bank products and services through the use of bank‟s website, without
the intervention or inconvenience of sending letters, faxes, original signatures and telephone
confirmations (Thulani, Tofara & Langton, 2009 cited in Yahiya, 2011). Siyanbola (2013) puts
it that internet banking involves conducting banking transactions on the internet (www) using
electronic tools such as the computer without visiting the banking hall. E-commerce is greatly
facilitated by internet banking and is mostly used to effect payment. Internet banking like mobile
banking also uses the electronic card infrastructure for executing payment instructions and final
settlement of goods and services over the internet between the merchants and the customers.
Commonly used internet banking transactions in Nigeria are settlement of commercial bills and
purchase of air tickets through the websites of the merchants. Level of awareness of the advantages
of this product to the saving populace is still very low; hence, there is every room for improvement
if cashless banking would be effective as expected (Siyanbola, 2013). Funds transfer, airtime
top up, balance enquiry, password change, bill payment etc. can also be conducted on the internet
banking plat form.
2.2.4
Telephone Banking
This is the most familiar of the tele-banking devices and it allows customers to transact banking
14
business over the phone. It can be used as an alternative to the traditional branch banking or in
conjunction with it (Stan, 1997 cited in Agboola, 2001). The customer can access their accounts
using telephone lines as a link to the financial institutions computer center. Services rendered
here include account balance, transfer, change of pin etc. This product has also experienced low
patronage due to inadequate awareness and education of the customer on how to maximally use
their phone to transact simple banking operations (Siyanbola, 2013).
2.3 Service and Service Quality
Banks provide financial inter-mediation, consultancy and agency services that are diversified
with the passage of time. Services are different from goods because they are intangible as they
cannot be seen, touched or felt; perishable as we are unable to store them; inseparable because they
are attached with a service provider, and insubstantial due to heterogeneity (Parasuramanet al.
1985; Hoffman and Bateson, 2002).
Parasuraman et al. (1985) argued that evaluation of service quality is difficult as compared to
physical goods. Physical existence of goods facilitates the customers to buy them due to its
aesthetic characteristics. Services are considered as intangible because we are unable to see,
touch or feel them (Hoffman and Bateson, 2002).
Hanson (2000) suggested that service quality shows the organization's ability to meet customers'
desires and needs. So organization must improve their services to meet the customers' wants and
requirements. It is found that customers' perception of service quality is very important for
managers to compete in the market (Hoffman and Bateson, 2002).
Quality is an ability of any product to meet customers' expectations and requirements. It is a set
of features, characteristics or attributes that are required or expected by the customers. There are
several studies that found a relationship between the service quality offered by banks and its
consequences as satisfaction level among customers. It is reported that quality is observed as a
major factor in reference to customer acquisition and retention (Galloway and Ho, 1996).
Morre (1987) identified that concentration on service quality leads to differentiation that enhance
15
the competitive position of the organization for long term benefits. Service quality and customer
satisfaction became core issues for the successful survival of any service organization. Service
quality is considered very important indicator towards customer satisfaction (Spreng and
Machoy, 1996). Service quality got popularity among professionals and academia due to increased
competition. It contributes a lot to gain competitive advantage to maintain long-term relationship
with customers (Zeithmalet al.2000).
Parasuraman et al. (1985, 1988) expressed service quality as customers' evaluation between service
expectation and service performance. They compared customers' responses regarding their
perceived quality of services and their pre-purchase expectations. It is said that service quality
represents the answers to some queries like what is expected by customers? What is delivered?
Finally, is there any difference? (Woodside et al, 1989).
Asubonteng et al. (1996) defined service quality as the difference between customers' expectations
about the service before its use and their perceptions after receiving the service. Quality factors
vary from one to another in reference to the importance and their impact on the satisfaction level
of the customers. It was found that specific activities like increasing the speed of processing
information have resulted in delighted customers. Similarly, improvement in the reliability of
equipment lessened dissatisfaction (Johnston, 1997). However, it was reported that service quality
is the subjective comparison between what the customers require and what they actually get
(Gefan, 2002).
Service quality is considered an important tool for a firm‟s struggle to differentiate itself from its
competitors (Ladhari, 2008). Service quality has received a great deal of attention from both
academicians and practitioners (Negi, 2009) and service marketing literature defined service
quality as the overall assessment of a service by the customer (Eshghiet al., 2007). Duff et al
(2008) pointed out that, by defining service quality, companies will be able to deliver services with
higher quality level presumably resulting in increased customer satisfaction. Akroush (2008)
also pointed out that service quality is the result of the comparison made by customers about what
they feel service firms should offer, and perceptions of the performance of firms providing the
services. Gronroos (2007) also defined service quality as the outcome of the comparison that
consumers make between their expectations and perceptions. Customer’s expectation serves as a
foundation for evaluating service quality because, quality is high when performance exceeds
16
expectation and quality is low when performance does not meet their expectation (Athanasso
poulos et al., 2001). Perceived service is the outcome of the consumer’s view of the service
dimensions, which are both technical and functional in nature. It is very vital to note here that,
service quality is not only assessed as the end results but also on how it is delivered during service
process and its ultimate effect on consumer’s perceptions (Duncan & Elliot, 2004). Service
quality has a strong correlation with customer satisfaction, financial performance, manufacturing
costs, customer retention, customer loyalty, and the success of marketing strategy (Cronin et
al., 2000; Wong et al., 2008). Organizations operating within the service sector consider service
quality to be a strategic component of their marketing plan (Spathiset al., 2004). Through service
quality, organizations can reach a higher level of service quality, a higher level of customer
satisfaction, and can maintain a constant competitive advantage (Meuteret al., 2000).
2.3.1 Services Quality in Banking Sector
In the changing banking scenario of 21st century, the banks had to have a vital identity to
provide excellent services. Banks nowadays have to be of world-class standard, committed to
excellence in customer’s satisfaction and to play a major role in the growing and diversifying
financial sector (Guoet al., 2008). There has been a remarkable change in the way of banking in
the last few years. Customers have also accurately demanded globally quality services from banks.
With various choices available, customers are not willing to put up with anything less than the
best. Banks have recognized the need to meet customer’s aspirations. Consequently, service
quality is a critical motivating force to drive the bank up in the high technology ladder. Banking
industry is a demand driven industry, which constitute an important part of the service industry
(Newman & Cowling, 1996). Banks have to redefine their corporate image to that
emphasizes service quality since it provides many advantages to a company such as allowing the
company to differentiate itself from its competitors by increasing sales and market shares,
providing opportunities for cross selling, improving customer relations thus enhancing the
corporate image, reliability, responsiveness, credibility and communication results in the
satisfaction and retention of customers and employee, thus reducing turnover rate (Newman,
2001).
17
2.3.2 E-Banking Services
E-Banking services are banking services delivered over the Internet. The services provided by
banks over the Internet which once included only checking of accounts, have recently evolved to
include a full range of banking services. It is not rare the case nowadays, when nearly all services
accessible at the branch or by phone can be accessed on the Internet as well. The development of
technology allows banks to offer not only “branch-based” services over the Internet, but also
new added-value services which are available only online such as electronic commerce, real-time
brokerage, financial information menus, e-mail alerts and third party services (tax payment, portals
or management of electricity bills) (Centeno, 2003).
As a whole, customers’ motivation to use E-banking or Internet based banking system services
comes from a number of factors: freedom of time and space, speed, convenience, 24 hours a day
availability and price incentives (Mattila, Karjaluoto & Pento, 2002). Despite all the advantages
the Internet offers to both banks and their customers in terms of increased productivity and reduced
costs, it also hides a lot of disadvantages and challenges for the service providers. On the Internet,
the comparison between different service offerings is much easier and switching costs are lower,
which makes it easier for customers to change service providers (Santos, 2003). This, on its
behalf, posts a challenge for the banks to not only acquire new customers, but retain their existing
ones as well. To retain its customers, banks should try to make them satisfied with their services
and offerings and this can be achieved through delivering high quality services. Delivering high
quality online services requires understanding of the online service quality dimensions considered
crucial and trying to improve the quality of the services provided over the Internet, so that a
competitive advantage is gained.
E-service quality is overall customer assessment and judgment of e-service delivery in the virtual
marketplace (Santos, 2003). Businesses that have been experienced and successful in offering eservices are starting to apprehend that besides website presence and low price, the important
success or failure factors also include the electronic service quality (Yang, 2001; Zeithaml,
2002). One of the reasons for the increase importance of e-services quality is that over the Internet,
it is much easier for customers to compare different service offerings than through traditional
channels (Santos, 2003). Thus, customers of online services expect equal or higher levels of service
18
quality than the customers of traditional services (Santos, 2003).
The importance of delivering high quality e-services has been recognized by many companies,
but still there is the problem of how the quality of online services is defined, which its determinants
are and how it can be actually measured. There exist many models and methods for measuring the
quality of traditional services (Cowling & Newman, 1995; Johnston, 1995; Bahia
& Nantel, 2000; Oppewal & Vriens, 2000), but there is not that much research made on the
quality of services delivered over the Internet (Cox & Dale, 2001). Recently, there have been two
approaches to studying e-services that can be distinguished. The first approach suggests the study
of e-service quality on the basis of already existing service quality theory (Grönroos, 2000;
Zeithaml et Al., 2000). The other approach suggests the study of e-service quality through
empirical research and the development of new categories of e-services (Szymanski & Hise,
2000).
2.4 Satisfaction
Satisfaction means a feeling of pleasure because one has something or has achieved something.
It is an action of fulfilling a need, desire, demand or expectation. Every rationale customer
compares the cost (price) and benefit (utility) of any product or services. Customers compare
their expectations about specific product/services and its actual benefits. This comparison results
into three types of customers: dissatisfied customers (expectations are more than actual
performance of the service); satisfied customers (actual benefits realized from services are equal
to or more than expectations); indifferent customers (actual performance and expectation are
exactly equal).
Westbrook (1981) reported that overall satisfaction is the outcome of customer's evaluation of a
set of experiences that are linked with the specific service provider. It is observed that
organization's concentration on customer expectations resulted into greater satisfaction (Peters
and Waterman, 1982). Kotler (2000) defined satisfaction as a person's feelings of pleasure or
disappointment resulting from the comparison of product's perceived performance in reference to
expectations. Customers' feelings and beliefs also affect their satisfaction level. It is said that
satisfaction is a function of customer's belief about fair treatment (Hunt, 1991).
19
2.4.1
Customer Satisfaction
“Customer satisfaction is one of the most important issue concerning business organization of all
types, which is justified by the customer oriented philosophy and the principles of continues
improvement in modern enterprise” (Arokiasamy, 2013). The marketing concept suggests that a
satisfied buyer will be more likely to repurchase again, or at least has the intention of
repurchasing again, than those who are dissatisfied. They consider that customer satisfaction and
retention the most important long-term objectives of firms. Reichheld and Sasser (1990)
suggested that new buyers cost more to serve than repeat customer, which means that repeat
customers are benefiting a firm’s cost structure.
A firm’s primary strategic objectives are to minimize customer regress and to maximize
customer intention rates to buy, as evidenced by the recent emphasis on customer relationship
management. Thus, previously satisfied buyers may help firms both reduce marketing costs, and
develop more stable levels of sales when a large number of satisfied buyers are retained to purchase
again in the future. There are several definitions of customer satisfaction in the marketing literature.
It is generally accepted that satisfaction is a psychological state that results from consumer
experiences after consumption (Pleshko & Heiens, 1996).
According to a widely accepted conceptualization, customer satisfaction is “a customer’s postconsumption evaluation of a product or service” (Mittal & Frennea (2010). This only “occurs if
the perceived performance of a product or service meets or exceeds customers ‘prior
Expectations’ (Bearden & Teel, 1983; Oliver 1980, 2010). Thus, overall customer satisfaction with
a company’s offerings is determined by comparisons between customers’ expectations of the
company’s products or services and their perceptions of the products ‘or services’ performance
(Fornell et al., 1996; Oliver 1980, 2010).
2.4.2
Customer Satisfaction in Banking Sector
In line with Tsoukatos and Rand (2006), customer satisfaction is a key to long-term business
success. To protect or gain market shares, organizations need to outperform competitors by offering
high quality product or service to ensure satisfaction of customers. In proportion to Magesh (2010),
satisfaction means a feeling of pleasure because one has something or has achieved something. It
20
is an action of fulfilling a need, desire, demand or expectation. Customers compare their
expectations about a specific product or services and its actual benefits. As stated by Kotler &
Armstrong, (2010), satisfaction as a person’s feelings of pleasure or disappointment resulting from
the comparison of product’s perceived performance in reference to expectations. Customer’s
feelings and beliefs also affect their satisfaction level. Along with Zeithaml (2009), satisfaction
or dissatisfaction is a measure or evaluation of a product or service’s ability to meet a customer’s
need or expectations. Razaket al. (2007) also reported that overall satisfaction is the outcome of
customer’s evaluation of a set of experiences that are linked with the specific service provider. It
is observed that organization’s concentration on customer expectations resulted into greater
satisfaction. If the customers of an organization are satisfied by their services the result is that,
they will be loyal to them and consequently be retained by the organization, which is positive
for the organization because it could also mean higher profits, higher market share, and increasing
customer base (Karatepeet al., 2005). Customer satisfaction has become important due to
increased competition as it is considered very important factor in the determination of bank’s
competitiveness (Berry et al., 2002). Continuous measurement of satisfaction level is necessary
in a systematic manner (Chakravartyet al., 1996). Because satisfied customer is the real asset
for an organization that ensures long-term profitability even in the era of great competition. Cronin
et al., (2000) mentioned in their study that satisfied customer repeat his/her experience to buy the
products and also create new customers by communication of positive message about it to others.
On the other hand, dissatisfied customer may switch to alternative products/services and
communicate negative message to others. Customer satisfaction is a set of feeling or outcome
attached with customer’s experience towards any product/ service (Solomon,1998).
Hence,
organizations must ensure the customer satisfaction regarding their goods/services.
In line with Tsoukatos and Rand (2006), customer satisfaction is a key to long-term business
success. To protect or gain market shares, organizations need to outperform competitors by offering
high quality product or service to ensure satisfaction of customers. In proportion to Magesh (2010),
satisfaction means a feeling of pleasure because one has something or has achieved something. It
is an action of fulfilling a need, desire, demand or expectation. Customers compare their
expectations about a specific product or services and its actual benefits. As stated by Kotler &
Armstrong, (2010), satisfaction as a person’s feelings of pleasure or disappointment resulting from
the comparison of product’s perceived performance in reference to expectations. Customer’s
21
feelings and beliefs also affect their satisfaction level. Along with Zeithaml (2009), Satisfaction
or dissatisfaction is a measure or evaluation of a product or service’s ability to meet a customer’s
need or expectations. Razaket al. (2007) also reported that overall satisfaction is the outcome of
customer’s evaluation of a set of experiences that are linked with the specific service provider. It
is observed that organization’s concentration on customer expectations resulted into greater
satisfaction. If the customers of an organization are satisfied by their services the result is that,
they will be loyal to them and consequently be retained by the organization, which is positive
for the organization because it could also mean higher profits, higher market share, and increasing
customer base (Karatepeet al., 2005). Customer satisfaction has become important due to
increased competition as it is considered very important factor in the determination of bank’s
competitiveness (Berry et al., 2002). Continuous measurement of satisfaction level is necessary
in a systematic manner (Chakravartyet al., 1996). Because satisfied customer is the real asset
for an organization that ensures long-term profitability even in the era of great competition. Cronin
et al., (2000) mentioned in their study that satisfied customer repeat his/her experience to buy the
products and also create new customers by communication of positive message about it to others.
On the other hand, dissatisfied customer may switch to alternative products/services and
communicate negative message to others. Customer satisfaction is a set of feeling or outcome
attached with customer’s experience towards any product/ service (Solomon, 1998). Hence,
organizations must ensure the customer satisfaction regarding their goods/services
2.4.3 E-Satisfaction
The trend of customer satisfaction has become a center point in service setting and among the
marketing scholars. It is often used to evaluate the process of buying, consuming and measuring
the performance of a product or service either in the short or long run and it is therefore essential
for the responses of consumers (Liébana-Cabanillas et al., 2013). The entire teams of marketing
and management expert have displayed strong interest in the ability of organizations to go the
extra miles of meeting and exceeding the needs of customers as this will determine future purchase
behavior and repeated patronage (Musiime & Ramadhan, 2011; Yap et al., 2012). Most
importantly, the era of banking where the nature and feature of services being rendered can be
difficult to measure has ushered in new ways of satisfying the customers.
22
This is especially important in the emergence of e-banking where customers do not interact directly
with the official of the bank but the alternative channels such as website, mobile phone, Automated
Teller machine and so on (Auta, 2010; SadiqSohail & Shanmugham, 2003; Wessels & Drennan,
2010). E-banking users therefore become satisfied with the nature of service rendered if the echannel is perceived useful to achieve daily objectives and if they can easily operate the channels
with less stress (Eid, 2011; Liébana-Cabanillas et al., 2013).
2.5 Complain
In the present banking system, excellence in customer service is the most important tool for sustained
business growth. Customer complaints are part of the business life of any corporate entity. This is
more so for banks because they are service organizations. As a service organization, customer service
and satisfaction should be the prime concern of any bank. The bank believes that providing prompt
and efficient service is essential not only to attract new customers, but also to retain existing ones.
However, banks minimize instances of customer complaints and grievances through proper service
delivery and review mechanism and to ensure prompt redress of customer complaints and grievances.
The review mechanism should help in identifying short-comings in product features and service
delivery.
Customer dissatisfaction can ruin the name and image of a bank. As such, bank policy on grievance
redress is as follows:
1. Customers are to be treated fairly at all times.
2. Complaints should be raised by customers with courtesy and on time.
3. Customers should be fully informed of avenues to escalate their complaints/grievances within
the organization and their rights to alternative remedies, if they are not fully satisfied with
the response of the bank to their complaints.
4. Bank to treat all complaints efficiently and fairly as they can damage the bank’s reputation
and business if handled otherwise.
5. The bank employees must work in good faith and without prejudice to the interests of the
customer.
In order to make the bank’s mechanism more meaningful and effective, a structured system needs to
be built. Such system would ensure that the redress is just and fair. The guidelines should be made
available at all branches for the information of all employees, to ensure better customer service and
23
general awareness in the bank. Customer complaint arises due to:
1. The attitudinal aspects that deals with customers
2. 2. Inadequacy of the functions/arrangement made available to customers or gap standards of
services expected and actual services rendered.
The customer has the right to register his complaints if he is not satisfied with the service provided
by the bank. He can give his complaints in writing, orally, by telephone or through online form if
there. If the customer’s complaint is not resolved within a given time or if he is not satisfied with the
solution provided by the bank, he can approach ‘bank head office’ with his complaints or other legal
avenues for grievances redress.
2.5.1 Complain Handling Mechanisms
AwashBank complain management team on customer service is chaired by the Chief /deputy chief
of the bank which is divided into two, claim management department and contact center
department. Small complains are handled by contact center like small amounts transactions
reversals, ATM and mobile uncompleted transaction confirmations. The committee created from
both departments have the following functions:
1. It evaluates the quality of customer service received from various quarters. The committee
should also review comments on customer service.
2. The committee should be responsible in ensuring that all regulation regarding customer service
are followed by the bank. Towards this end, the committee obtain all that are necessary from the
divisional manager/regional heads.
3. The committee considers unresolved complaints/grievances referred to it by regional heads, for
which it is responsible for, and offer their advice and should also look into complaints related to
noncompliance.
4. The committee submits report on its performance to the customer service committee of the board
at quarterly intervals. Mandatory display requirements. It is mandatory for the bank to provide:
1. Appropriate arrangement for receiving complaints and suggestions.
2. The name, address, contact number and additional information of nodal officer.
3. Contact details of region of bank branch the area.
4. Code of the bank’s commitment to customers/fair practice code.
2.5.2 Resolution of grievances
The branch manager is responsible for the resolution of complaints/grievances. He is responsible for
24
ensuring the closure of all complaints received at the branches. It is his foremost duty to see that the
complaints are resolved completely to the customer’s satisfaction and if the customer is not satisfied,
then he should be provided with alternate avenues to escalate the issues. If the branch
manager feels that it is not possible at his level to solve the problem, he can refer the case to the
‘divisional office’ for guidance. Similarly, if the ‘divisional office’ finds it difficult to solve the
problem, such cases may be referred to the claim department.
2.5.3 Time frame
Complaints reveal a weak spot in the working of the bank; therefore, complaints received should be
analyzed from all possible angles. The complaint received has to be acknowledged within 24hr of a
day if possible but maximum of days of a week. If not solved within a week, after examination of
the matter, the bank finally responds or explain why they need more time to respond and shall
endeavor to do so within three weeks of receipt of the complaints. The branch
manager should try to resolve the complaints within specified time frames, decided by the bank.
Communication of the bank’s stand on any issue, as regards to the customer, is a vital requirement.
Complaints received which would require some time for examination of issues involved, should
invariably be acknowledged promptly.
The divisional office must send an action that is taken with regards to complaints received by the
head office at the end of every quarter. Interaction with customers The bank recognizes that
customers’ expectation/ requirement/grievances can be better appreciated through personal
interaction with customers by bank staff. Structured customer meetings (say once in a
quarter) will give a message to the customers that the bank cares for them and values their suggestions
for improvement in the customer service. Many of the complaints arise on account of lack of
awareness among customers about bank services and such interaction will help the customers
appreciate banking services better.
As for the bank, the suggestion from customers would be a valuable input for revising its product
and services to meet customer requirements. Sensitizing operating staff on handling complaints
Staff should be properly trained on handling complaints.
Since the bank is dealing with people, different opinion and areas of friction may arise, with an open
mind and a smile on the face, the bank should be able to win the customer’s confidence. It should be
the responsibility of the contact center, branches and claim management teams to ensure that internal
machinery for handling complaints/grievances is operated smoothly and efficiently at all levels. It
25
should give necessity of training to the staff at various levels to the all concerned departments.
2.5 Relationship Between Service Quality and Customer Satisfaction
Quality and customer satisfaction have long been recognized as playing a crucial role for success
and survival in today's competitive market. Regarding the relationship between customer
satisfaction and service quality, Oliver (1993) first suggested that service quality would be
antecedent to customer satisfaction regardless of whether these constructs were cumulative or
transaction-specific. In relating customer satisfaction and service quality, researchers have been
more precise about the meaning and measurements of satisfaction and service quality.
Satisfaction and service quality have certain things in common, but satisfaction generally is a
broader concept, whereas service quality focuses specifically on dimensions of service (Wilson
et al., 2008). Although it is stated that other factors such as price and product quality can affect
customer satisfaction, perceived service quality is a component of customer satisfaction
(Zeithaml & Bitner, 2003). As said by Wilson et al. (2008), service quality is a focused
evaluation that reflects the customer‟s perception of reliability, assurance, responsiveness,
empathy and tangibility while satisfaction is more inclusive and it is influenced by perceptions of
service quality, product price and quality, also situational factors and personal factors. The
relationship between service quality and customer satisfaction is becoming crucial with the
increased level of awareness among bank customers Demographic characteristics should be
considered by the bank managers to understand their customers (Suresh chander et al. 2002).
2.6 Empirical evidences in Electronic banking
Some related studies have been conducted by different researchers in different parts of the world.
But, there are inadequate records of studies conducted in Ethiopia on customer’s satisfactions and
complaint management of ATM and Mobile technologies in banking sector particularly on
AwashBank. Hence, the studies are briefly reviewed as below.
Philipos L. B. (2013) in his study of customer satisfaction and e-banking service in some
selected banks of Ethiopia found out that customer satisfaction in e-banking has significant
relationship with convenience, reasonable and fair fees (charges) during transaction, efficient
service of e-banking, privacy, security, reliability and responsiveness of employees to solve e26
banking service failure and these variable determined 84% customer satisfaction in e-banking.
Gardachew (2010) conducted research on the opportunities and challenges of E-banking in
Ethiopia. The aim of his study was focused on analysing the status of electronic banking in Ethiopia
and investigates the main challenges and opportunities of implementing E-banking system. The
author conducted a survey on the existing operating style of banks and identifies some challenges
of using E-banking system, such as, lack of suitable legal and regulatory frame works for Ecommerce and E- payments, political instability in neighboring countries, high rates of illiteracy
and absence of financial networks that links different banks. According to Gardachew (2010),
Opportunities offered by ICT through e-learning programs and Commitment of the governments
on development of ICT infrastructures is considered as drivers of using E- commerce and Epayment systems.
Wondwossen and Tsegai (2005) also studied on the challenges and opportunities of E-payments
in Ethiopia; their objective was studying of E-payment practices in developing countries, Africa
and Ethiopia. The authors employs interview and on site observation to investigate challenges to
E-payment in Ethiopia and found that, the main obstacles to the development of E-payments are,
lack of customers trust in the initiatives, Unavailability of payment laws and regulations
particularly for E-payment, Lack of skilled manpower and Frequent power disruption. According
to Wondwossen and Tsegai (2005), an adequate legal structure and security framework could
foster the use of E-payments, which is contradicting with the finding of the previous study.
Abenet Yohannes (2010) in his study of key factors that determine adoption of internet banking
in Ethiopia findings revealed that demographic factors including age, income, education level
and occupation have a relationship with the adoption of internet banking. In his study, the age
group 30-39 ac count s for 52 percent of internet banking users, which is relativel y
high proportion of younger users and based on his data, concluded that age has an impact on the
use of internet banking in Ethiopia. In his study findings education levels were regarded as
an influential factor in consumers‟ use of internet banking services with high education levels
being particularly significant. In the study, 81 percent of internet banking users have a higher
education level (diploma or degree), whereas only 34 percent of non-users have tertiary
education level qualification and confirmed that education levels have an impact on the use of
internet banking in this study. In the study 80% of the users were employed and concluded that
27
occupation has an impact on the adoption of internet banking. 85 percent of the study sample
agreed that internet banking enables them to manage their account better. 95 percent of users
agree that internet banking allows them to conduct transactions at any time, from any location,
with time savings being the end result. Thus internet banking eliminates time and place
constraints. The results indicated that internet banking charges are a key factor in motivating the
use of internet banking. Geeta Sharma & Surendra Malviya (2014) in his study “Internet Banking
Service Quality and Its Impact on Customer Satisfaction in Indore District of Madhya Pradesh”
mainly focus on internet banking service quality to maintain customer satisfaction. The work
attempts to develop a model based on service quality dimensions, with the purpose to investigate
impact of service quality on customer satisfaction. The main objectives of this empirical study
is to explore internet banking service quality factors and to analyze its impact on customer
satisfaction. The study found that there is a positive impact of service quality dimensions like
website ease of use, comfort, accessibility are influential factors while confidence and
responsiveness also have significant impact on satisfaction of the online customers. The
empirical results show that there is a direct relationship between internet banking service quality
dimensions and customer satisfaction in the banking industry.
Manilall Dhurup, Jhalukpreya Surujlal & Ephraim Redda (2014) in their paper “Customer
Perceptions of Online Banking Service Quality” provides an insight of customer perceptions of
technology-based banking service quality in a developing country. The results show that periodic
measurements of the levels of online banking service quality should become an integral part of
any bank`s effort and strategy in improving service quality levels.
Justus Muthuri Marete, Henry Peter Gommans & Gongera Enock George (2014) in their study
“Evaluation of E-Banking Services on Customer Satisfaction: Case of National Bank of Kenya”
provide empirical evidence regarding satisfaction of customers with e- banking and provide
recommendations. It also evaluated customer satisfaction with e-banking service at National
Bank of Kenya. The main objective of the study is to investigate e-banking web design; exploration
of e-banking customer service; assessment of e-banking assurance and examination of
preferential treatment of e-banking effect on customer satisfaction in the banking industry. It is
found that more customers were satisfied with most dimensions of e-banking service in NBK.
28
Ogunlowore Akindele John & Oladele Rotimi (2014) made “An Analysis of Electronic Banking
and Customer Satisfaction in Nigeria.” This study examines the impact of electronic banking on
satisfaction of corporate bank customers in Nigeria. The study found that there is a significant
relationship between electronic banking and customers‟ satisfaction. The paper suggests that
critical infrastructure like power; security and telecommunication should be strengthened to ensure
the application of electronic banking in Nigeria and optimum satisfaction on the part of customers.
There is a significant improvement in general banking services as a result of the introduction of
electronic banking, while the level of profit made by banks can be attributed partly to the
introduction of electronic banking. Electronic banking has help to increase banks market share.
S. Fatemeh Sakhaei Ahmad J. Afshari Ezzatollah Esmaili (2014) assesses the impact of Service
Quality on Customer Satisfaction in Internet Banking. This study attempts to investigate service
quality indexes in Internet Banking. The purpose of this research is to understand the impact of
service quality factors of Internet Banking on customer satisfaction in Iran. The paper also attempts
to evaluate the influence of service quality on customer satisfaction in Internet Banking. The study
found that the reliability has most relation and website design has least relation to customer
satisfaction.
Shankar, Sanjay in his article (2000). “Marketing of Banking Services”, discussed the necessity
of marketing of banking service such a frequent meeting with customers, marketing services to
attract NRI deposits and application of special technique etc. Karpagavalli, R. (2000). “A study
on Kisan Credit Card of Canara Bank”. Her study reveals that the validity period of the card can
be increased. The maximum ceiling of this loan per card can be increased.
Sangeetha, R. (2003) discussed in her study “Customer awareness and satisfaction regarding
services rendered by commercial bank with reference to State Bank of India and ICICI Bank”
that gender, occupation, monthly income, type of account and period of holding account with bank
is not associated with awareness level. On the other hand there is association between ages,
education quickly.
Nittala, Rajyalakshmi and Kameswari, Vijaya (2011) in their article “Service Quality and
Customer Satisfaction in State Bank of India” have suggested that several studies have been carried
29
out by various researchers of India and abroad, to find out the various service quality factors that
lead to customer satisfaction. There is a growing body of literature regarding the effect of
quality service on the functioning and success of the banks. Given the growth of services
over the past several years, there have been a variety of studies on different issues pertaining to
service quality; many researchers have recognized the need to develop measures of service quality.
Johnston (1995, 1997) examined the link between service transactions and overall satisfaction
and has found that the causes of dissatisfaction and satisfaction are not necessarily the same.
Shajahan, S. (2005) in his article “A Study on the Level of Customers' Satisfaction on Various
Modes of Banking Services in India” explained that the Indian banking industry is on a major
technological up gradation drive after having successfully absorbed the international standard in
its operating norms. The Discriminant Analysis, which emerged out of the study findings,
explicitly takes a logistic form that is typical of adoption behavior of new Internet-based banking
services, which enhances the level of satisfaction among bank customers.
Carlson, John et al (2001) in their article “Internet Banking: Market Developments and Regulatory
Issues” discuss that Internet banking is a subject receiving great attention in the banking industry
and the regulatory community. As with other areas of e-commerce, discussions about Internet
banking often proceed without reference to the actual state of market developments.
Sanmugam, A (2004) in his article “Factors determining consumer adoption of Internet Banking”
described that the rapid changes in Malaysian banking system have created a new dimension in
the banking industry with the emergence of Internet banking. The study also explores the
consumer’s adoption behavior driven by the evolution of new, banking technology in Malaysia.
The result implies that a social norm effect dominates Internet banking adoption.
Mobarek, Asma (2009) in her article “E-Banking Practices and Customer Satisfaction - A Case
Study in Botswana” cleared that Banks' external environment, including globalization and
deregulations, have made the banks highly competitive. Banks find it difficult to compete on price,
and need to look at other ways to retain customers. Sultan Singh, Ms.Komal (2009). Impact
of ATM on Customer Satisfaction (A Comparative Study of SBI, ICICI & HDFC bank) presents
the impact of ATM on customer satisfaction. This is a comparative study of three major banks i.e.
State Bank of India, ICICI bank and HDFC bank.
30
Khaled, Al-Hashash and Bahzadi, Abdulrasoul Hussain (2008) in their article “Bank's Customer
Satisfaction in Kuwait: An Exploratory Study” explained that Customer satisfaction is a significant
subject for most marketers. Their proposal project aimed to investigate customer satisfaction in the
retail banking in state of Kuwait.
In general, most of the studies are far away from Ethiopian context and yet the focus area is not
done exhaustively this study is designed to examine the impact of e-banking on the satisfaction
of customers in Private Bank, AwashBank.
2.7 Features of Independent Variables
The main construct in this study is customer satisfaction and complaint management on two selfservice technologies, ATM and Mobile Banking, as the study seeks to investigate and evaluate
these two technologies of banking service on customer satisfaction: the case of selected
AwashBank in selected branches in Addis Ababa. Based on the existing literature customer
satisfaction is looked at as a cumulative concept and hence the study will look at the selfservices of electronic technologies of banking service from respondents who have used the these
electronic banking services.
Customer Satisfaction is also conceptualized as a process of customer evaluation as they use the
Electronic Banking services, and that this evaluation is based on customer expectation and
perceived performance of the e-banking service quality. Based on Danaher and Haddrell (1996), a
disconfirmation scale was found to be the most appropriate to measure customer satisfaction based
on specific variables that constitute electronic banking structure in the delivery process including
reliability, transaction efficiency, and customer support among other variables. After a thorough
review of the literature, models and concepts the following model was formulated for the study.
Reliability is important to customer satisfaction as customers expect that services are provided
right the first time and always after that. It involves accuracy, time sensitivity and consistency.
Parasuraman et al., (1988, 2000), in their research also found that reliability consists of
dependability of a process, provision of promised services that what is advertised is actually what
one gets when they visit the website, timeliness and maintaining error free process. They also state
that reliability is one of the most important aspects of satisfaction as this encourages the customer
31
to continue using the ATM and Mobile services because they can depend on the system.
Responsibility refers to the ability to access the system and find the information they are looking
for without struggling and going through a long process. It is also referred to in terms of the quality
of information posted, the time it takes for confirmation, transactions notifications, no delay of
transaction and consistency of data. (Parasuraman et al, 2000)
Empathy and Customer support is inclusive of the marketing of the system before the client
accepts to take it up and also after the customer has acquired the service and is now using it- After
sales service. The bank should be on hand to resolve or clarify any difficulties or queries the
customers may be faced with as they use the system. This is done by having a customer care center
that customers can call into to get assistance of a services that enables the client to communicate
their issues and get timely and quality response. The availability of a ATM and Mobile services
that gives a guidance or orientation of the usage is also another way of offering customer support.
(Parasuraman et al, 2000)
Assurance and Service security describes the impression by the providers that bring forth a
sense of security and credibility. It is the freedom from risk and doubt for the customer and it
involves a system that ensures the feeling of safety in their transactions. It also provides a sense
of confidentiality where the customer knows his or her access to the system and transactions therein
are private. They are assured that ATM and Mobile systems are secure from hackers and third
party infiltration so they feel more at ease to use the system (Parasuraman et al., 2002)
Tangibility deals with the navigation ability of the ATM and Mobile systems, how the menus are
arranged is well presented and easy to navigate, the orders are easy to remember, the Menus are
straight forward and the terms of using the name are easily understandable. (Parasura et al., 1988)
Tangibility and Performance refer to product’s primary operating characteristic which is based
on functional requirement, not taste with is circumstantial preferences. Performance is the
operating quality of each Internet banking service and feature offered by each bank.
32
2.8 Conceptual Framework
Figure 2.1 Conceptual Frameworks
Conceptual Model developed for this study: Adapted from Parasuraman et al (2000 and 2002)
33
CHAPTER THREE
MATERIALS AND METHODS
This chapter tries to describes the research data sources, techniques and methodology adopted
throughout this study to meet the research objectives and to address the research questions. It
describes: the choice of particular research designs, research approach, sample and sampling
techniques, source of data collection, data collection instruments and the method of data analysis.
3.1 Research Design
Since objective of this study is to analysis the ATM and Mobile Banking technologies customer
Satisfaction and complaint handling management: the case of Awash bank, in Addis Ababa,
descriptive and explanatory type of research design is more appropriate. The study chooses the
descriptive and explanatory design because the nature of the designs is helpful in describing the
current situation of the electronic banking impact on customer satisfaction in detail and inferential
statistics help to show the direction and magnitude of the relationship.
This is therefore the research design of this study is both descriptive and explanatory type of
research design. In addition, the research design for this study is the cross-sectional field survey
method.
3.2 Research Approach
The study follows both qualitative and quantitative research as a research approach to describe
ATM and Mobile Banking technologies on customer Satisfaction and complaint handling
management: the case of Awash bank, in Addis Ababa. Mixed research approach enables to use
multiple methods of data collection and helps to generate reliable findings.
According to John (2003) states that mixed method research include quantitative and qualitative
methods that are the major approaches being used today in the social and human science with
34
their advantages and disadvantages. Employing mixed approach helped the study to neutralize
biases of applying any of a single approach as well as ways to balance the weaknesses inherent
in a single method with the strengths of the other method.
3.3 Population of the Study
AwashBank is the leading private bank in Ethiopia. Currently there are 718 branches distributed
in the country, Ethiopia. Those branches are categorized into 13 regions (North, South, East, West,
Addis Ababa (North, South, East and West), South West, Adama, Dessie, Wolaita Sodo) regions
[1] .
The study focuses on Addis Ababa (North, South, East and West) regions found in the capital city
of the country, Addis Ababa.
According to Mugenda (2008), target population is the total population that the study specifies in
his or her research. In order to undertake this study, the study select five branches from each region
totally 20 branches of AwashBank in Addis Ababa region.
The selection is random as equally distributed for each region. Therefore, customers of these
branches who are using these two technologies service are considered as target population of the
study. As of May 2022 the total numbers of these technologies users of these twenty branches are
953,287. (AwashBank, System Database Report)
3.4 Sampling Technique
For this research a purposive and simple random sampling techniques are used in this study to
come up with valid results. As the study decide whom to include as a respondent for the questions
that will be prepared to collect data and get a better chance to select right respondents is the reasons
behind selecting these sampling techniques. The study uses purposive sampling technique in the
interviews as the selected individuals are those who are responsible for the issue under
investigation and expected to have adequate knowledge. The sample size used for this research is
200 respondents who were banking customers of 20 selected AwashBank branches in
35
Addis Ababa District.
The number of branches was limited to 20 as these technologies services are offered is quite
homogenous. The branches used for the study were Addisu Gebeya, Arada Giorgis, Arat Kilo,
Amist Kilo, Sidist Killo, Finfine, Legahar, Stadium, Mexico, Nifas Silk, Bulbula, Akaki, Gurd
Sholla, Jakros, Harbu Gudo, Addis Ketema, Awtobis Tera, D’Afrique, Dejazmach Balcha Safo and
Sengatera.
The study distributes this calculated sample size to each selected branches based on proportional
ratio by dividing total ATM and Mobile Banking users of each branch to total number of ATM
and Mobile Banking users in the selected branches.
3.5 Sample Size
The sample size for the study calculated according to the formula recommended by
Yamane ‘s with 95% confidence and 5% acceptable sampling error. The formula is
presented below:
n= _
N____
1+ N (e) 2
Where,
N = is number of sample size
N = total number of study population
e = standard error = 5% at 95% confidence level
n =
123,255
1+123,255(0.05)2
= 123,255
314.14
n = 199.37 (Approximately 200 individuals)
Based on the above formula, the study has 200 respondents and gather data through questionnaire.
36
Based on the calculated sample size, the study assigns the number of respondents for each branch
proportionally. Accordingly, the table below shows the number of respondents for each selected
branches.
Table 3.1 Population and sample size
SN
Branch Name
Selected ATM and Mobile Users Number Sample Size
1
Addisu Gebeya
10
5%
2
Arada Giorgis
10
5%
3
Amist Kilo
10
5%
4
Sidist Kilo
10
5%
5
Arat Kilo
10
5%
6
Finfine
10
5%
7
Legahar
10
5%
8
Stadium
10
5%
9
Mexico
10
5%
10
Nifas Silk
10
5%
11
Akaki
10
5%
12
Gurd Sholla
10
5%
13
Bulbula
10
5%
14
Jakros
10
5%
15
Harbu Gudo
10
5%
16
D’Afrique
10
5%
17
Addis Keteme
10
5%
18
Awtobis Tera
10
5%
19
Dej. Balcha Safo
10
5%
20
Sengatera
10
5%
Total
200
100%
According to Patrick, B. (2003) the return or success rate 50% is =adequate ‘; 60% response rate
is =good ‘and 70% rate or higher is =very good ‘. This is therefore, the study uses 75% response
37
rate is expecting and remaining 25% may be non-response rate, and sample size determine at 95%
confidence level and margins of error at 5%. This is therefore, the study is go for further detail
analysis after having get more than 70% response rate.
3.6 Sources of Data
The choice of particular method of collecting data depend on the purpose of collecting data, the
information being collecting, the resource available for the research and the skill of the researcher
(Kothari,2004). In order to achieve the condition objectives, the data for this study is obtain from
both primary and secondary source. The study uses both primary and secondary data which
obtained from primary and secondary data sources.
3.6.1 Primary Data
Customers and Staffs
Primary data are helpful to get original information from the respondents to know their feelings,
opinions, attributes and perceptions towards ATM and Mobile Banking technologies on customer
satisfaction and compliant management. Therefore, primary data are collected from respondents
(customer and Staffs) which have direct participation in these technologies by distributing
questionnaires designed in the form of Likert scale and raising interviews questions. For this the
researcher used front staffs (CSO, BDM, Managers, DCO, DSR) and different level customers of
the bank of the above mentioned branches.
Database Administration Query
ATM Transactions are fetched from daily transaction of database. Failed transactions, branches,
success transactions and pending transactions are fetched from ATM database using the bank
system database query. Mobile Transactions are fetched from mobile banking database system.
Failed transactions, branches, success transactions and pending transactions are fetched from
Mobile Banking database using database query.
38
Contact Center and Claim Management Report
Complain data are collected from reports of contact center and claim management systems mainly
from database query and systems used for complain management (contact center system) and
complain management system reports. These data are mainly used as they are primary, valid and
reliable for the research.
3.6.2 Secondary Data
Secondary data; such type of data involves different sorted data made, adjusted and field by a third
party. As a result, call center reports, system and Database administration reports, annual report,
audit report and research papers on similar topics shall be used as secondary sources of data to
analyze the issue with the existing literatures.
3.7. Validity and reliability
3.7.1 Validity
Validity is referring to the extent to which an empirical adequately reflects the real meaning of the
concept under consideration. And also, it refers to the degree to which a statistical instrument
measures what it is intended to measure. It emphasizes the accuracy of a measurement instrument
(Saunders, et al; 2009).
3.7.2 Reliability
Reliability it refers to the extent to which your data collection techniques or analysis procedure
will yield consistent findings. It focuses on whether the research method and design are accurate
(Saunders, et al; 2009). The reliability test is an important instrument to measure the degree of
consistency of an attribute which is supposed to measure. It measures the internal consistency of
the item in a scale. The normal range of Cronbach’s coefficient alpha value ranges between 0-1
39
and the higher value reflects a higher degree of internal consistency. The reliability test indicates
that the extent to which the items in a questionnaire are related to each other. Cronbach ‘s alpha is
one of the most commonly accepted measures of reliability. And the most commonly accepted
value of Cronbach’s alpha is 0.70 as it should be equal to or greater than to reach internal reliability
(Eskandarpour, 2016).
The computed Cronbach is Alpha for the 26 SERVQUAL items found to be .911. This being
greater than 0.7, it shows that there is greater internal consistency of the items in the scale, and
that the research instrument used was very reliable. This is therefore, all variables are acceptable
for further analysis.
3.8 Ethical Consideration
The researcher will address the ethical issues and practices that directly and indirectly affect the
development and evaluation of the proposal as well as overall research processes. The researcher
shall take into account the following ethical activities when the study conducts the research: do
not abuse the respondents, fulfilling the promises what the researcher made to respondents,
completing the interview and questionnaires at the specified time, avoiding emotion, dishonest and
unsuited behaviors, ensuring to the respondents not to disclose their names, and personal
information. In addition, full acknowledgment of all the reference materials used in the study.
3.9 Methods of Data Analysis
After the data gathered from the respondents that are participating in ATM and Mobile banking
technologies satisfaction and compliant management analyzed both in quantitative and qualitative
terms. Quantitative data are analyzed quantitatively in frequency, percentage and mean using the
statistical application software called Statistical Packages for Social Science (SPSS) version 24.
Analyze and narrate qualitative data collected from interviews and questionnaires in terms of
providing meanings and consequences by qualitatively referring to related literatures and previous
research in similar issues using thematic analysis.
40
3.10 Descriptive Analysis
The descriptive statistical results are presented by tables, frequency distributions and percentages
to give a condensed picture of the data. This was achieved through summary statistics, which
includes the means, standard deviations values which are computed for each variable in this study.
3.11 Pearson Correlation Analysis
In this study Pearson ‘s correlation coefficient is used to determine the relationships between
independent variables which is service quality dimensions (Tangibility, reliability, responsiveness,
assurance and empathy) and dependent variable which is customer satisfaction.
3.12 Multiple Regression Analysis
Multiple regression analysis is used to investigate the effect of service quality dimensions
(Tangibility, reliability, responsiveness, assurance, and empathy) on customer satisfaction.
3.13 Regression Functions
The equation of multiple regressions on this study is generally built around two sets of variable,
namely dependent variables (customer satisfaction) and independent variables (Tangibility,
reliability, responsiveness, assurance, and empathy). The basic objective of using regression
equation on this study is to make the study more effective at describing, understanding, predicting,
and controlling the stated variables.
3.14 The operationalize of Independent Variables and Dependent Variable
1. Reliability: the ability to perform the promised service dependably and accurately on
time.
2. Responsiveness: willingness to help customers and to provide prompt services.
41
3. Tangibility: physical facilities, equipment, and appearance personnel.
4. Assurance: knowledge and courtesy of employees and their ability to convey trust and
confidence.
5. Empathy: caring, individualized attention the firm provides its customer.
6. Customer satisfaction: the customers ‘post-purchase comparison between pre-purchase
expectation and performance received.
The study measures the independent variable by using the SERVQUAL dimensions it used to
measure the gap between customers ‘expectations for excellence and their perception of the actual
service delivered. In order to improve service, you must understand customer satisfaction and
customer expectations. This can be done by asking for feedback from your customers using service
quality questionnaires, that is a 5 point Likert scale questionnaires which distribute to the targeted
respondents.
3.15 Regress Customer Satisfaction on the Service Quality Dimensions
CSCH = ß1 + ß2 Rel + ß3 Res + ß 4 Tan + ß 5 Ass + ß6 Emp + e Where
CSCH = Customer Satisfaction and Compliance Handling in Self-Service ATM and Mobile
Banking technologies,
Rel= Reliability, Res= Responsiveness, Tan= Tangibility, Ass= Assurance,
Emp= Empathy are the explanatory variables (or the repressors)
ß1 is the intercept term- it gives the mean or average effect on Y of all the variables excluded from
the equation, although its mechanical interpretation is the average value of customer satisfaction
when the stated independent variables are set equal to zero.
Β2, ß3, ß4, ß5, and ß6 refer to the coefficient of their respective independent variable which
measures the change in the mean value of customer satisfaction per unit change in their respective
independent variables and e is the error term.
42
CHAPTER FOUR
RESULTS AND DISCUSSION
This chapter tries to present the research data, analysis it and interpret it to meaningful form.
Descriptive and explanatory techniques are used to analysis data, interpret it and apply on
dependent and independent variables. It describes: the choice of particular research designs,
research approach, sample and sampling techniques, source of data collection, data collection
instruments and the method of data analysis.
4.1 Respondents, Data and Information rate
The study targeted a total number of 200 questionnaires distributed and ATM Transactions
database query results and monthly report for the month of May data, Mobile Banking
Transactions database query results and reports of the month of May of system and database
administration department and Complain report of the Months of March, April and May of call
center monthly reports (Appendix 1).
From these reports and respondents 92% or 185 questionnaires were fill and returned with valid
response. According to Patrick, B. (2003) the return or success rate 50% is =adequate ‘; 60%
response rate is =good ‘and 70% rate or higher is =very good ‘. This is therefore, the study uses
75% response rate is expecting and remaining 25% may be non-response rate, and sample size
determine at 95% confidence level and margins of error at 5%. This is therefore, the study is go
for further detail analysis after having get more than 70% response rate; therefore, the response
rate is adequate for analysis and reporting with excellent response rate. The data was analyzed
using SPSS version 24 and MS excel 2019.
4.2 Demographic Information
Demographic information, generally describe the characteristics of the respondent gender,
43
age, educational background, marital status, occupation, year of experience and types of mobile
and ATM technologies usage statistics used by customers were asked. The results obtained from
the structured questionnaires are present on the table below.
Demographic Information
Information
Total
Percentage
Gender
Male 115
62%
Female 70
38%
15-25 46
25%
25-35 73
40%
35-45 44
24%
Above 45 22
11%
Age
Education Level
Primary 0
0%
High School 5
3%
Preparatory 10
5%
Degree 130
70%
Masters and Above 40
22%
Maritus Status
Single 89
48%
Married 79
43%
Divorced 6
2%
Engaged 9
7%
Occupation
Unemployed 37
20%
Own Business 36
19%
Student 16
8.6%
Government Employee 53
28.6%
44
NGO Employee 44
23.8%
Work Experience
0-2 29
15.7%
3-5 46
24.9%
5-10 73
39.6%
Above 10 37
20%
Source: Survey
Table 4.1 Respondents Demography Information
Gender Based
AGE BASED
15-25
39%
15-25
25-35
35-45
12%
25-35
61%
Above 45
25%
24%
15-25
39%
25-35
Figure 4.1 Respondents Demography – Gender and Age based
The result obtained from demographic characteristics of the respondents shows that 61% are males
and the rest 39% are females this shows that ATM and mobile banking are largely prefer by males
than female. The majority of the respondents constitute 39%( or 73) lied in the 25-35-year age
group. The second dominant age group was the 15-25 age group, comprise 24% or (46), follow by
the 36-45-year age group with 24 %( or 44) and the respondents belongs to the last two age groups
11 %(22) from above 46 years. The result also shows more than 64 % of ATM users age ranges
from age 18–35 indicating that this banking channel is more preferred by younger societal groups.
Respondent is educational status shows: 0% (0) are Primary, High school 3% (5) diploma 5% (10),
Degree 70% (130) and masters and above have 22% (40).
45
Education Based
WORK EXPERIENCE
80
70
60
50
40
30
20
10
0
Primary
High
Tertiary
Degree
Master & Above
0-2
3--5
5--10
Above 10
Figure 4.2 Respondents Demography – Education Level and Work Experience
Marital status of the respondents was observed as 59% (212) were Single,6%(21) are Divorced,
married are 34%(124) and Widow are only 1%(3). from the above result unmarried are more
served of ATM and mobile banking service. In respect to occupation side the respondents were
the mix of salaried (30%), business person (16%), unemployed (28%), and student (26%) from
this result the salaried persons are more users of ATM and mobile banking service. Regarding the
duration service utilization,17% (60) of respondents have used ATM and mobile banking for not
more than a year, 20% (72) have used ATM and mobile banking for 2 to 3 years, 22% (81) have
used e-banking for 3 to 4 years and 41% (147) have used ATM and mobile banking for more than
5 years. This shows that numbers of electronics banking users are relatively increasing because of
COVID19. Regarding Types of E-Banking service users of ATM are 74% (267), Mobile Banking
users are 4% (16), POS users are 21% (16), and Internet Banking users are only 1% (2). the above
result shows that customers highly use ATM compared to other e-banking users so the banks prefer
to create awareness and training for their customer about other e-banking product and service to
get benefit and to meet their aim making of cashless society.
4.2 Mobile Banking Transactions Information
From Database query operated by database administrators, mobile banking and ATM transactions
are processed then converted to excel for more analysis and for graph. Mobile and ATM
transaction are processed for one month only to make the study precise and evenly distribute for
further proposing.
46
App
Channel
Provider
Success/Fail Total
Reversed AMOUNT
USSD
USSD
Tele_Birr Fail
7133
USSD
USSD
Tele_Birr Success
120258
189796338.61
AwashBirr
AwashBirr Tele_Birr Success
1213
2017437.11
AwashBirr
AwashBirr Tele_Birr failed
168
7128
168
Unpaid
110579357.79
357249.67
Total Mobile Transactions : 218248
Source: Database transactions query from Database Administration Department
AwashBirr
USSD - SMS
Fail
Success
Success
Fail
Figure 4.3 Mobile Banking Transaction (AwashBirr and USSD)
The result obtained from database query, the failure and success of both transactions for awashbirr
and ussd are more success than failure. AwashBirr success is 88% (1213) and failure is 12% (168).
USSD success is 99% (120258) and failure is 1%(1213).
4.2 ATM Transactions Information
ATM transaction is extracted from database query then converted to excel file for further
analysis. The following diagram is screenshots of draft ATM transaction for the month may.
47
Figure ATM Transactions result
The transaction used for this research is 1000 in total which processed from the month of May
starting from May 1 to May 30. The transaction extracted is incorporated all banks ATM which
AwashBank is working with (example Wegagen, BOA, CBE, CBO, DashenBank). From this
transactions, all transactions are processed successfully (either failed with reason or done as
expected).
ATM TRANSACTION OF ONE MONTH
700
576
600
500
400
300
219
190
200
100
10
8
code not defined
Insufficient
balance
5
0
Successful
Failed
unexpected
Null
From 1000 transactions, there 10 ‘ERROR CODE NOT DEFINED’ output, 190 transactions
which is ‘failed’ state, 8 transactions which is ‘INSUFFICIENT AVAILABLE BALANCE’ state
and
756
transactions
which
is
‘Successful’
‘UNEXPECTED_ERROR’.
48
state,
5
transaction
which
is
From transaction of the six months of ATM transactions, 99% is success, and 1% is failed while
8% is other issues (canceled, interrupted, insufficient balance, unexpected, not defined). This
indicate with the first result (figure above) that almost the transactions are successful which is
good for customer satisfaction.
4.3. Data Analysis
The researcher uses two type of analysis technique which are descriptive analysis to interpret
result from questionnaire using frequency table and figure by from result reflecting mean and
standard deviation and inferential technique which is Correlation and regression analyses to
check and understand the relationship and magnitude between dependent variable Customer
satisfaction and independent variable ATM and mobile banking service quality respectively.
4.4. Descriptive Analysis of Service Quality Measurements
This study used SERVQUAL model to measure the customer ‘s expectation and perception on
These both self-service electronic technologies provided by AwashBank. In this model there are
26 questions presented in relation to the service quality, reliability and compliance management
dimensions. These five dimensions are: tangibility, reliability, responsiveness, assurance and
compliance management. It used the five Liker scale to measure the performances of ATM and
Mobile banking services. The mean scores of perception of customer’s satisfaction and
compliance handling (tangibility, reliability, responsibility, empathy, and assurance) is 3.77 and
in terms of service quality attributes have been demonstrate in values angel from 3.67 to 3.88.
49
In terms of the Five dimensions the highest mean score was assurance (3.88) with standard
deviation (SD=0.96), followed by compliance response (3.79; SD =0.93), Reliability (3.74;
SD=0.92), Tangibility (3.67; SD=0.91), and assurance (3.271; SD=1.2) in ascending order.
The response of Responsiveness was however, more satisfactory relative to the other four
dimensions of service quality. Thus in addressing the e-banking service quality delivered by
AwashBank emphasis should be placed on these four dimensions (compliance response, reliability,
Tangibility, and Assurance) though there is more room for improvement in the Responsiveness
dimensions.
Missing
Mean
St. Dev
Min/Max
Empathy
185
0
3.79 3.94 .93
1/5
The Bank performs its ATM services without errors
185
0
4.0
4.0
.93
1/5
0
3.9
3.9
.71
1/5
The Bank performs its Mobile banking services without
Media
Valid
Statistical Analyzing for Variables
errors
185
Electronic banking services are performed within the
185
0
3.69 3.75 .85
1/5
185
0
4.01 4.0
.93
1/5
185
0
3.53 4.0
1.02 1/5
185
0
3.86 4.0
1.11 1/5
185
0
3.56 3.9
.97
1/5
Reliability
185
0
3.67 3.75 .91
1/5
Bank quickly respond to my requests on electronic
185
0
3.80 4.0
1/5
promised time
Bank shows deep concern in solving my problems,
related to ATM
Bank shows deep concern in solving my problems,
related to Mobile Banking
I have not had difficulties with electronic banking
services such as ATM card and Mobile banking
operations of this bank.
The electronic banking service helps in keeping records
correctly
banking service
50
.92
The Bank is quick in eliminating potential errors on
185
0
3.54 4.0
.93
1/5
185
0
3.61 3.0
.89
1/5
185
0
3.71 4.0
.90
1/5
Responsiveness
185
0
3.74 3.84 .92
1/5
Bank tells me exactly when a service will be
185
0
3.59 4.0
.85
1/5
185
0
3.87 4.0
.94
1/5
185
0
3.81 4.0
.96
1/5
185
0
3.63 3.0
.79
1/5
185
0
3.66 4.0
.99
1/5
185
0
3.90 4.0
1.01 1/5
Assurance
185
0
3.88 4.0
.96
Bank office is visually appealing for electronic
185
0
3.88 4.0
0.99 1/5
185
0
3.98 4.0
.93
1/5
There are receipts and messages for every transactions
185
0
3.78 4.0
.97
1/5
ATM and Mobile services are 24 available and
185
0
3.69 4.0
.97
1/5
both ATM and Mobile banking operations.
The ATM and Mobile banking of the bank provides
me with convenient options for reversing or adjusting
transaction
The bank‘s ATMs and Mobile banking service offers a
meaningful guarantee for customers
performed
Employees of bank have the knowledge to answer
customer questions related to ATM and Mobile
Banking
Bank employees are trustworthy about ATM and
Mobile service delivery.
The bank does not misuse my personal information
related to ATM and Mobile banking confidential.
I feel safe in my transactions with ATM and Mobile
Banking.
Information provided by the e-banking is clear and
understandable.
1/5
banking service.
The Bank has modern-looking technical equipment for
ATM and Mobile banking service.
working
51
Bank has Sufficient number of ATMs and cash limit to
185
0
3.87 4.0
.99
1/5
185
0
3.59
4.0
.85
1/5
185
0
3.87
4.0
.94
1/5
185
0
3.81
4.0
.96
1/5
The bank provides financial advices via the e-banking.
185
0
3.63
3.0
.79
1/5
The bank gives me Up to date contents for E-banking
185
0
3.89 4.0
1.0
1/5
It is quick to complete a transaction through the e-
185
0
3.98 4.0
1.0
1/5
185
0
3.99 4.0
1.0
1/5
serve its customers.
Tangibility
Bank knows to advise me what would be the most
proper Ebanking service for my specific needs.
E-banking services like Mobile and ATM do not
require a lot of effort and time to get the services.
It is easy to find what I need on the E-banking
services.
banking
These technologies used for Covid-19 preventions and
physical contacts
Level of Customer Satisfaction
Customer satisfaction is a measure of how products and services provided by a company in order
to meet or surpass customer’s expectation. The researchers, Parasuraman, Zeithaml, and Berry
(1985), proposed that when perceived service quality is higher than customer expectation, then it
will lead to improve in customer satisfaction.
For measuring the level of customer satisfaction in AwashBank, the researcher used system and
database administration department daily and monthly report, call center complain report for the
month of May and these electronic banking users within 20 branches of Addis Ababa regions. It
is also comprised a question that asked the expectation and perception level of the AwashBank
customer respondents with a statement -I am totally satisfied with the overall ATM and mobile
banking service quality of AwashBank and alternative answers of -strongly disagree, disagree,
neutral, agree and strongly agree‖. The customer ‘s response for the above mention statement is
summarize and presented in the table 4.3 below.
Table 4.4 Overall Satisfaction Items
52
Sn
Satisfactions
Mean
Std. Dev
1
I am satisfied with the E-banking service delivered by your bank.
4.0
4.0
2
I am satisfied with the bank‘s ATM service.
3.9
3.9
I am satisfied with the bank‘s Mobile Banking service.
3.69
3.75
Over all services of ATM and Mobile based banking is better than
4.01
4.0
3.53
4.0
3.86
4.0
3.56
3.9
3
traditional banking service.
4
I am satisfied by the SMS notification services of every ATM and
Mobile transactions
5
I am satisfied by these technologies banking service packages that are
provided 24hrs in a day and 7 days in a week including holiday via
ATM, and Mobile banking
6
I am satisfied by ATM and Mobile banking that make me always not
to visit bank in urgent case
7
Complains are handled carefully and get solution within considerable 4.0
4.0
time.
8
Using these technologies benefits me from physical contacts to preserve 4.0
4.0
me from covid-19 and for that I am satisfied
Source: Survey
Table
The above table exhibited that from the listed item included in the overall satisfaction variables
over all services of ATM and Mobile based banking is better than traditional banking service has
the highest mean 4.01 with the standard deviation 4.0 and the least mean scorer is I am satisfied
by ATM and Mobile banking that make me always not to visit bank in urgent case with mean 3.56
and standard deviation 3.9.
4.6 Tests of Assumptions of multiple Regression Model
Most statistical tests rely on certain assumptions about the variables used within an analysis
to ensure that the analysis is as accurate and true as possible, and therefore valid (Osborne
53
&Waters, 2002; Stevens, 2009). Assumptions are critical in statistics because if the underlying
assumptions are not valid, then the process is unreliable, unpredictable, and out of the researcher
‘s control (Stevens, 2009). This could lead the researcher to draw conclusions that are not valid or
scientifically unsupported by the data. A Multiple regression examines the relationship between a
single outcome measure and several predictor or independent variables (Jaccard, Guilamo-Ramos,
Johansson &Bouris, 2006). The assumptions of multiple regressions include the assumptions of
linearity, normality, independence of errors, and Homoscedasticity, and Collinearity which will be
discussed separately in the proceeding sections before a complete regression analysis can be
performed.
Linearity
Relationships between variables will be supposed as linear when they are consistent and directly
proportional to each other (Stevens, 2009; Tabachnick & Fidell, 2006). Violations of this
assumption may biased result in the estimates obtained from the analysis; therefore, it may not be
good to portray the accurate or true population values (Osborne & Waters, 2002;
Tabachnick&Fidell, 2006). According to Hoxx (1995), the results from the analysis will
underestimate the true relationship between the independent variables (predictor variables) and
dependent variable if the relationship is not linear.
The linearity assumption can be test through the visual examination of residual plots (Kivilu,
2003; Osborne & Waters, 2002; Stevens, 2009). A residual scatter plot is a figure that depicts
one axis for the standardized residuals and the other axis for the predicted values (Stevens, 2009).
If the linearity assumption is met, the standardized residuals will scatter randomly around a
horizontal line which represents the standardized residuals equaling zero (Stevens, 2009;
Tabachnick&Fidell, 2006). As can be seen from the figure 4.1 the data in this research met linearity
assumption.
54
Normality
Screening for normality is an important step when conducting a multiple regression as assuming
residuals are normally distributed (Stevens, 2009; abachnick&Fidell,2006). No normal
distributions that are positively or negatively skewed, contain large kurtosis, or have extreme
outliers can distort the obtained significance levels of the analysis, resulting in the standard errors
becoming biased (Osborne & Waters, 2002). Though a multiple regression is generally considering
quite robust to violations of normality, a small sample size can actually increase the seriousness
of non-normality of a distribution (Osborne & Waters, 2002).
Outliers may have stronger influence on normal distribution when the sample size is small,
whereas standard errors for both skewness and kurtosis decrease with larger samples, as there
will most likely be only minor deviations from normality (Tabachnick & Fidell, 2006).
Independence of Errors
A Multiple regression assumes that the errors, which are the residuals between the actual score
and the estimated score obtained through the regression equation, are independent and there is no
serial correlation (Stevens, 2009). Having no serial correlation between the residuals implies that
the size of the residual for one variable has no impact on the size of the residual for another
variable. Therefore, the independence assumption requires that the variables and residuals are
independent and the subjects are responding independently of each other (Stevens, 2009). The
independence assumption is a significant assumption that should be investigates prior to any
interpretation of multiple regression analysis, as violation of this assumption could hold critical
implications (Stevens, 2009). Even a slight violation of the independence assumption should take
seriously, as it can greatly increase the risk of Type I error, resulting in the risk of falsely rejecting
the null hypothesis several times greater than the level of error assumed for the test (Stevens,
2009).
The Durbin-Watson is a statistic test that can used to test for the occurrence of serial correlation
between residuals. The value of Durbin-Watson (DW) statistics ranges between 0 and 4. A Durbin
55
–Watson close to 2.0 is consistent with no serial correlation, while a number closer to 0 means
there is, probably, serial correlation. In this study, DW has the value as 1.701, which is closer to
2.0.and also The value of Durbin-Watson has lies between 1.5 and 2.5 indicates the data is not auto
correlated. Thus, there is no serial correlation between the variables that have been use in this
study.
Homodescedasticty
Homoscedasticity works with the assumption that refers to equal variance of errors across all
levels of the independent variables (Osborne & Waters, 2002). This is to mean researchers assume
that errors spread consistently across variables (Keith, 2006). This is an evident when the variance
around the regression line is the same for all values of the predictor variable.
When Heteroscedasticity is mark it can lead to distortion of the findings and weaken the overall
analysis and statistical power of the analysis, which result in an increased possibility of Type I
error, erratic and untrustworthy F-test results, and erroneous conclusions (Aguinis, Petersen, &
Pierce, 1999; Osborne & Waters, 2002).
It can be demonstrated by looking at a plot of the standardized residuals by the regression
standardized predicted value (Osborne & Waters, 2002). Particularly, scatter plots of residuals
with independent variables are the method for examining this assumption (Keith, 2006). Ideally,
residuals are randomly scattered around zero (the horizontal line) providing even distribution
(Osborne & Waters, 2002). Heteroscedasticity is indicated when the scatter is not even; fan and
butterfly shapes are common patterns of violations. Figure depicts the Homoscedasticity of the
data in this research.
Multi-Collinearity
In multiple regression model, before making a regression analysis it is important to test the multi
collinearity test. The multi-collinearity test is a test to identify a strong correlation between two or
more predictors in a regression model. This assumption can be assessed by examining tolerance
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and the variance inflation factor (VIF). And by using correlation matrix VIF values well below 10
and the tolerance statistics well above 0.2 can safely to conclude that there is no collinearity within
the data (Field,2009). And also the correlation between the independent variable lies less than 0.8
is an indicator of absence of multi-collinearity with in the data thus the model is pass both test. A
small tolerance value indicates that the variable under consideration is almost a perfect linear
combination of the independent variables already in the equation and that it should not be added
to the regression equation. A good regression model must not have a strong correlation among its
independent variables or must not have a multi-collinearity problem and that the value of variance
inflation factor (VIF) must have a value between 1 and 10 and the tolerance level should be more
than 0.2
Model
Collinearity Statistics
Tolerance
VIP
Reliability
.513
1.950
Responsiveness
.436
2.294
Assurance
.321
3.112
Tangibility
.422
2.371
Empathy
.422
2.371
Collelation Analysis
57
Pearson‘s correlation coefficient (r) measures the strength and direction of a linear relationship
between two variables. Values of Pearson‘s correlation coefficient are always between -1 and +1.
A correlation coefficient of 1 specifies that two variables are perfectly related in a positive sense;
a correlation coefficient of -1 indicates that two variables are perfectly related in a negative sense,
and a correlation coefficient of zero (0) shows that there is no linear relationship between the two
variables (Pallant, 2007). Correlation is also significant at p < 0.01 level (2-tailed), zero < r < 0.1
= little or no relationship, 0.1 < r < 0.5 = weakly related and 0.5 < r < 0.9 = strongly related (Pallant,
2007).
As it shown in the above table, each variable is perfectly correlated with itself indicating that r=1
along the diagonal of the table. The results indicate positive and significant relationship between
variables as stated here: reliability and customer satisfaction (r = 0.702, p < 0.05), responsiveness
and customer satisfaction (r = 0.587,P < 0.05), assurance and customer satisfaction (r = 0.629, P
<0.05), tangibility and customer satisfaction (r =0.548,P<0.05), empathy and customer satisfaction
(r = 0.702, p < 0.05). The finding on table further indicates that the strongest relationship is found
between reliability and customer satisfaction. All service quality dimensions such as reliability,
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responsiveness, assurance, tangibility, and empathy have a positive relationship with customer
satisfaction.
Multiple Linear Regression Analysis
Multiple linear regression analysis is a method used to examine the relationship between two
or more independent variables and one dependent variable. The aim of this analysis is to examine
the dimensions of E-Banking service quality towards the customer satisfaction in AwashBank and
to recognize which of the dimension of service quality causes the most significant effect toward
customer satisfaction in AwashBank.
Table 4.1 Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
Durbin-Watson
1
.781
.609
.604
. 46081
1.701
Predictors: (Constant), Empathy, Tangibility, Reliability, Responsiveness, Assurance
Dependent Variable: Customer Satisfaction and Compliance Handling
The R value (0.781) indicates that the presence of strong correlation between predictors and
dependent variable. Adjusted R2 is a measure of the loss of predictive power or shrinkage in
regression. The adjusted R2 indicates us how much variance in the outcome would be considered
for if the model had been derived from the source population from which the sample was taken
Adjusted R-squared is always smaller than R-squared, but the difference is usually very small
unless you are trying to estimate too many coefficients from too small a sample in the presence of
too much noise. The model summary indicated that SERVQUAL dimensions (Compliance
responsiveness, Tangibility, Reliability, Responsiveness, Assurance) explained 60.4% of the
variation in customer satisfaction and the remaining 39.6 % of the variation of customer
satisfaction was explained by factors that are not included in this model. Therefore, a further
research should be conducted to investigate the other factors that affect customer satisfaction in
AwashBank particularly Addis Ababa district. The R value (0.609) indicates that the presence of
strong correlation between predictors and dependent variable.
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Descriptive analysis of opportunities and challenges of electronic banking
Table Customers response on the opportunities of electronic banking service
From question item.1, 26% strongly agreed, 41% agreed while 17% of respondents were neutral.
More over 6% disagree and 9% strongly disagree with the result compilation. This implies that
electronic banking service provided by commercial banks saved customers time via enhancement
of speed and efficiency of the service.
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From question item.2, (31) and (40%) of respondents are strongly agreed and agreed respectively
with the question, 5% were neutral while 13% and 11 disagreed and strongly disagreed
respectively so that it can be conclude that one of the advantage of e-banking system is decreasing
the longer queue available in the banking hall of commercial banks. As per Question.3, 27.3%
strongly agreed and 45.6% agreed while 7% were neutral. More over 8.8% and 10.8% were
disagreed and strongly disagreed respectively. This consolidates the fact that although many
respondents shared mobile phones availability with various functions facilitated ATM and Mobile
banking system utilization. Some of them were undecided on the issue which indicates customers
‘lower tendency towards mobile banking. From question item 4, (25%) and (40%) of the
respondents strongly agreed and agreed respectively up on the question, 7.2 % were neutral while
13.5% and 8.8% were disagreed and strongly disagreed. Therefore, it can be concluding that many
of respondents as customers were not either mobile banking users or were not access its function
of transferring money. From question item 5, (30.7%)and (38.4%) of respondents were strongly
agreed and agreed respectively under the question, 8% were neutral when 14.4% and 8% of
respondents are disagreed and strongly disagreed. This indicated that even though may of
customers agreed on the advantage of POS made them not to carry cash during purchasing habit.
Some of them were undecided due to the researcher suggested that no awareness and habit of using
E-banking like money transfer, send money and online payment using these two electronic
technologies in the study area. From question item 6,29 % strongly agreed, 41.2% agreed while
6.9 % were neutral. Beside this 14.6%and 7.7% of respondents were disagreed and strongly
disagreed respectively. It is safe to conclude that customers became aware and alert of controlling
their financial transactions or accounts using e-banking service.
Based on the question 7, (28.7%) strongly agreed, (46%) agreed while (8.6%) are neutral with
the research question. And also to this 9.1% and 7.5% of respondents are disagreed and strongly
disagreed. This implies that customers were not informed and got awareness of the contribution
of information and communication technology research development team in making e- banking
system ease to use.
Table Customers Response On the Challenges of Electronic Banking Service
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From question 1, 27.9% of the ATM and Mobile banking users are strongly agree that are there is
highest challenge, 45.9% of the e-banking users are agree the existence of higher challenge, 7.7%
are indifferent the existence of the stated challenge and 8.3% and 9.7% of respondents are disagree
and strongly disagree respectively about the stated challenge considered to sum up 73.8% of
respondents are agree about the challenge so the bank management and the concerned organ should
give attention and make an improvement on social and cultural barrier as high challenge of ATM
and Mobile banking.
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From question 2, 17.1% of the e-banking users are strongly agreeing that are there is highest
challenge, 37.6% of the e-banking users are agree the existence of higher challenge, 12.2% are
indifferent the existence of the stated challenge and 27.1% and 5.5% of respondents are disagree
and strongly disagree respectively about the stated challenge considered to sum up 44.7% of
respondents are agree about the challenge so the bank management and the concerned organ should
give attention and make an improvement on Infrastructural barriers like Low level of internet
penetration, weak telecommunication and frequent power interruption. From question 3, 16.9%
of the e-banking users are strongly agreeing that are there is highest challenge, 43.4% of the ebanking users are agree the existence of higher challenge,9.9% are indifferent the existence of the
stated challenge and 22.1%
and 7.2% of respondents are disagree and strongly disagree
respectively about the stated challenge considered to sum up 63.3% of respondents are agree about
the challenge so the bank management and the concerned organ should give attention and make
an improvement to retain the existing customer and extract new customer on Economic factor
such as high cost of internet, low incomes and heavy investment are challenge in E-banking from
the bank perspective.
From question 4, 11.9% of the e-banking users are strongly agreeing that are there is highest
challenge, 42.6% of the e-banking users are agree the existence of higher challenge,9.9% are
indifferent the existence of the stated challenge and 22.1% and 9.4% of respondents are disagree
and strongly disagree respectively about the stated challenge considered to sum up 54.5% of
respondents are agree about the challenge so the bank management and the concerned organ should
give attention to create awareness about how to use and the benefit as well to retain the existing
customer and extract new customer on Management and banking issues like resistance to change
in technology among staffs and customers and E-banking possess risks.
From question 5, 13% of the e-banking users are strongly agreeing that are there is highest
challenge, 42.5% of the e-banking users are agree the existence of higher challenge,11.6% are
indifferent the existence of the stated challenge and 25.7% and 6.6% of respondents are disagree
and strongly disagree respectively about the stated challenge. From question 6, 15.2 % of the ebanking users are strongly agreeing that are there is highest challenge, 43.1% of the e-banking
users are agree the existence of higher challenge,11.9% are indifferent the existence of the stated
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challenge and 20.4% and 8.8% of respondents are disagree and strongly disagree respectively
about the stated challenge considered to sum up 58.3% of respondents are agree about the
challenge so the bank management and the concerned organ should work hardly to win the
confidence and trust of the customer by giving technical and developmental training about how to
use and the benefit as well as the security of their bank account transaction to retain the existing
customer and extract new customer.
4.6
Discussion of the Study
Result
The objective of the study was to assess the effect of self-service technologies ATM and
Mobile banking on customer satisfaction and customer handling. The researcher tried to assess
the effect of self-service technologies ATM and Mobile banking in the context of seven
dimensions which include (safety reliability, transaction efficiency, customer support, and
service security, ease of use, performance and service content). The findings indicate that all the
dimensions are affecting self-service technologies ATM and Mobile banking customer
satisfaction and the way compliances are handled as well. The following discussion was about
self-service technologies ATM and Mobile banking and its impact on customer satisfaction
and related factors.
Based on unstandardized coefficient all the seven dimension for self-service technologies ATM
and Mobile banking customer satisfaction coefficient are (0.200,0.197,0.190,0.104,0.103,0.100
and 0.098) ease of use, customer support, service security, service content, performance, safety
reliability and transaction respectively.
Parasurman et al, 1988, (Yang, Jun and Peterson,
2004), (Lui & Amett, 2000), (Storback et al, 1994) cited in (Thahkur, 2011) identified that ease
of use and satisfaction are critical factors on the use of self-service technologies ATM and
Mobile banking. The results are also consistent with other research findings like (Jun et al,
1999; Jannatul, 2009; Parsurman et al, 1988; Yang, Jun and Peterson, 2004, Lui & Amett,
2000) found that reliability provide higher degree of satisfaction on e- banking. Storback cited
in (Thahkur, 2011) also empirically found that self-service technologies ATM and Mobile
banking transaction efficiency and customer satisfaction have positive relationship.
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Type of account the respondents maintain with the bank was 185 (89.1%) of respondents
reported that the type of account the respondents maintain with the bank was saving account, 42
(9.3%) of the account the respondents maintain with the bank was checking account. Study
result of Million Assefa indicate that the sample respondents 96.52% of 402 respondents were
users of saving accounts and the rest 3.48% were users of current account and from the 96.52%
who use saving account all of them were ordinary saving holders. There are no sample
respondents for checking saving and other types of accounts from respondents. The interview
responses support this result of customers that is the interview result found that the bank provide
the service for ordinary saving account holders and current account holders and almost majority
of the users are ordinary saving account holders and there is no time limit set as pre condition
for customers to be e-banking users.
Respondents level of satisfaction with the self-service technologies ATM and Mobile banking
service rendered by the bank. Regarding to this 94 (43.18) respondents reported that as they
were somewhat satisfied. 38 (17.3%) of respondents reported that as they somewhat dissatisfied.
Thus, from the above information the respondents were somewhat satisfied to the level of
satisfaction with the self-service technologies ATM and Mobile banking service provided by
the banks. Regarding to this, Million indicate that
the response of customers question
which compare the satisfaction of customer between ordinary banking and electronic banking
95.02% of the 185 respondents said that self-service technologies ATM and Mobile banking
has given them more satisfaction than ordinary banking and only 4.98% said they are
dissatisfied. The responses for self-service technologies ATM and Mobile banking service
delivery channel 96.02% use ATM and 3.98% use both ATM and POS no user of internet
banking and mobile banking and other types of delivery channels. The interview responses
support the results obtained from customers that is the four branches said that the types of ebanking service delivery channels currently provided by them are ATM and POS and majority
of the users use ATM to transact and from the oral feedback they got from customers the
technology has given more satisfaction to customers.
Similarly, other studies conducted by Million Assefa, 2013 and others indicate that the level
customers satisfaction was improved or increased after using self-service technologies ATM
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and Mobile banking than ordinary banking. The result of the study is against the findings of
Ahmed B.(2005) who found Nigerian banks self-service technologies ATM and Mobile
banking customers responded the improvement of their satisfaction in self-service technologies
ATM and Mobile banking than ordinary banking. This study also disprove the findings of Belay
Deribe and Ebisa Deribie (2012) in their study of the evaluation of customer satisfaction on
bank services in Jimma Commercial bank of Ethiopia which was found from sample respondents
that indicate absence of no change the satisfaction and the benefits they got from self-service
technologies ATM and Mobile banking and ordinary banking and got best benefits and
satisfaction through e-banking service than ordinary banking. But the findings of this study is
supported by the findings of Fenuga O.J. (2010) from his study the effects of electronic
payment on customers satisfaction in Nigerian banks customers that electronic payment system
have affected customer satisfaction increment by large than ordinary banking.
Philipos L. B. (2013) in his study of customer satisfaction and self-service technologies
ATM and Mobile banking service in some selected banks of Ethiopia found out that customer
satisfaction in self-service technologies ATM and Mobile banking has significant relationship
with convenience, reasonable and fair fees (charges) during transaction, efficient service of selfservice technologies ATM and Mobile banking, privacy, security, reliability and responsiveness
of employees to solve self-service technologies ATM and Mobile banking service failure and
assessed in the context of above variable that has impact on customer satisfaction in selfservice technologies ATM and Mobile banking.
Geeta Sharma & Surendra Malviya (2014) in their study “Internet Banking Service Quality and
Its Impact on Customer Satisfaction in Indore District of Madhya Pradesh” mainly focuses on
internet banking service quality to maintain customer satisfaction. The work attempts to develop
a model based on service quality dimensions, with the purpose to investigate impact of service
quality on customer satisfaction. The main objectives of this empirical study is to explore
internet banking service quality factors and to analyze its impact on customer satisfaction .The
study found that there is a positive impact of service quality dimensions like website ease of
use, comfort, accessibility are influential factors while confidence and responsiveness also
have significant impact on satisfaction of the online customers. The empirical results show that
there is a direct relationship between internet banking service quality dimensions and customer
66
satisfaction in the banking industry.
Justus Muthuri Marete, Henry Peter Gommans & Gongera Enock George (2014) in their study
“Evaluation of E-Banking Services on Customer Satisfaction: Case of National Bank of Kenya”
provide empirical evidence regarding satisfaction of customers with e-banking and provide
recommendations. It also evaluated customer satisfaction with e-banking service at National
Bank of Kenya. The main objective of the study is to investigate e-banking web design;
exploration of e-banking customer service; assessment of e-banking assurance and examination
of preferential treatment of e-banking effect on customer satisfaction in the banking industry.
It is found that more customers were satisfied with most dimensions of e-banking service in
NBK.
Ogunlowore Akindele John & Oladele Rotimi (2014) made “An Analysis of Electronic Banking
and Customer Satisfaction in Nigeria.” This study examines the impact of electronic banking on
satisfaction of corporate bank customers in Nigeria. The study found that there is a significant
relationship between electronic banking and customers‟ satisfaction. The paper suggests that
critical infrastructure like power; security and telecommunication should be strengthened to
ensure the application of electronic banking in Nigeria and optimum satisfaction on the part of
customers. There is a significant improvement in general banking services as a result of the
introduction of electronic banking, while the level of profit made by banks can be attributed
partly to the introduction of electronic banking. Electronic banking has help to increase banks
market share.
S. Fatemeh Sakhaei Ahmad J. Afshari Ezzatollah Esmaili (2014) assesses the impact of Service
Quality on Customer Satisfaction in Internet Banking. This study attempts to investigate service
quality indexes in Internet Banking. The purpose of this research is to understand the impact of
service quality factors of Internet Banking on customer satisfaction in Iran. The paper also
attempts to evaluate the influence of service quality on customer satisfaction in Internet Banking.
The study found that the reliability has most relation and website design has least relation to
customer satisfaction.
Nittala, Rajyalakshmi and Kameswari, Vijaya (2011) in their article “Service Quality and
67
Customer Satisfaction in State Bank of India” have suggested that several studies have been
carried out by various researchers of India and abroad, to find out the various service quality
factors that lead to customer satisfaction. There is a growing body of literature regarding
the effect of quality service on the functioning and success of the banks. Given the growth
of services over the past several years, there have been a variety of studies on different issues
pertaining to service quality; many researchers have recognized the need to develop measures
of service quality.
Mobarek, Asma (2009) in her article “E-Banking Practices and Customer Satisfaction - A Case
Study in Botswana” cleared that Banks' external environment, including globalization and
deregulations, have made the banks highly competitive. Banks find it difficult to compete on
price, and need to look at other ways to retain customers. Sultan Singh , Ms.Komal (2009).
Impact of ATM on Customer Satisfaction (A Comparative Study of SBI, ICICI & HDFC bank)
presents the impact of ATM on customer satisfaction. This is a comparative study of three major
banks i.e. State Bank of India, ICICI bank and HDFC bank.
Khaled, Al-Hashash and Bahzadi, Abdulrasoul Hussain (2008) in their article “Bank's Customer
Satisfaction in Kuwait: An Exploratory Study” explained that Customer satisfaction is a
significant subject for most marketers. Their proposal project aimed to investigate customer
satisfaction in the retail banking in state of Kuwait.
In similar fashion, in this study result indicate that the majority of respondents were male sex
category. The majority of respondents were in the age category of 25-35. The majority
of respondents were at educational level of BA/BSC. The majority of the respondents were
employed individuals. This study result was supported by the study result of Vijay M. (2012)
the majority of respondents were male, the sample respondents age were 35 and below, the
occupationally which was businessmen and retired and the rest where salaried and students. This
study result also supports the result of study of Abenet Yohannes (2010) the study of key factors
that determine the adoption of internet banking in Ethiopia in which his findings revealed that
demographic factors have relationship with the adoption of internet banking in Ethiopia and also
found that the majority of the users are younger and most of the current users of internet banking
in the country are the educated who were diploma and above.
68
In contrary this study result is against the study result of Jayaraman M.et.al. (2012) in Klang
Valley, Malysia, about the study of demographic factors in adoption of retail internet banking
factors that found that there is no relationship between gender, age, education, occupation and
annual income with that of adoption of retail internet banking and only race has relationship.
Findings of the research
From the respondents’ summary respondents are satisfied with the self-services technologies (ATM
and Mobile Banking) service delivered by your bank (mean 4.0, standard deviation 4.0) which indicates
almost all are satisfied, and for questions related to ATM service and Mobile Banking service (mean 3.69
and standard deviation 3.75) indicates more less confirmation of an agreement to satisfaction to
services provided by ATM and mobile banking. Comparing trational services with comparing to these
technologies, over all the services of ATM and Mobile based banking is better than traditional banking
service (mean 4.01 and standard deviation 4.0) plus satisfaction concerning the SMS notification
services of every ATM and Mobile transactions (mean 3.53 and deviation 4.0). Respondents were asked
for the how they satisfied by these technologies banking service packages that are provided 24hrs in a
day and 7 days in a week including holiday via ATM, and Mobile banking, then the rate was high as mean
3.86 and std.deviation 4.0. Especially, at urgent cases the respondents asked how these technologies
satisfied them, ATM and Mobile banking that make them always not to visit bank in urgent case
(response rate mean 3.56 and standard deviation 3.9).
Related to complains, respondents are asked how complains are handled carefully and get solution
within considerable time (rate mean 4.0 and standard deviation 4.0). This indicate there is almost no
complain related to the level of satisfaction of ATM and Mobile Banking services but as contact center
and claim management report indicates (append II), there are some complains raised to transaction
reverse delays for those ATMs not are AwashBank ATMS, ATMs not available (not working), wrong
transactions like transferring to another account entering wrong numbers, notification messages delays.
Finally the respondents were asked how these self-service technologies, ATM and Mobile Banking services
are used for customers, staffs and management teams for benefits them from physical contacts to
preserve me from covid-19 (rate mean 4.0 and standard deviation 4.0). From the result, it can be said that
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almost all are satisfied that there is less or no physical contact during they use ATM and Mobile Banking
so that these self-service technologies saves them from covid-19.
Some branch managers said that using these technologies are very important and they are even satisfied
for that as no physical contacts, no wastage of papers, no waiting for services in branches and they are
not busy with handling customers’ requests. Some front end servants, officers, are said also adding to
branch managers’ comments that as the more usage of self-service technologies users are increasing, they
are satisfied that there is less or no physical contacts, no waiting for services, and they are not busy
servicing customers even at peak time.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
5.1
Summary of the Major Findings
The purpose of the study is assessment of the effect of e-banking service on
customer satisfaction the case of commercial banks in Addis Ababa.
Regarding the type of customers with the bank was depositor. The type of account that
respondents maintain with the bank was checking account. From the mean and standard
deviation table the respondents were somewhat neutral about the level of satisfaction by
the respondents with the E-banking service provided by the banks.
To assess the feeling of the respondents about E-banking seven dimensions were tested with
chi-square. From the data regarding safety and reliability three hypothetical statements were
designed which are E-banking performs the service right at the first time, E-banking deliver
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the service exactly as promise ,E-banking completes a task accurately. All of them are
significant for customer satisfaction, because the calculated significance value was .000
which is less than the usual statistical significant value 0.05 (P<0.05).
Regarding Transactions efficiency three hypothetical statements were designed which
are Information in E-banking is up to date, E-banking provide complete help function,
Transaction process is fast. All of them are significant for customer satisfaction, because
the calculated significance value was .000 which is less than the usual statistical
significant value 0.05 (P<0.05).
About Customer support six hypothetical statements were designed which are E-banking
contains enough services. In case of problem happened I can contact staff immediately, Ebanking contains comprehensive section to guide for common problem, E-banking process
to solve problem fast, E-banking provide knowledgeable staff to solve problem and Staff
can describe step to use and condition to use clearly. All of them are significant
for customer satisfaction, because the calculated significance value was .000 which is less
than the usual statistical significant value 0.05 (P<0.05).
Concerning Service security six hypothetical statements were designed which are Ebanking keeps accurate record of transaction, E-banking provide security for transaction
data and privacy, No problem during using E-banking service , E-banking is secure, Feel
safe when using E-banking , Can check validity and detail of past transaction every time.
All of them are significant for customer satisfaction, because the calculated significance
value was .000 which is less than the usual statistical significant value 0.05 (P<0.05).
Relating to ease of use six hypothetical statements were designed which are Easy to find
information in the E-banking system, The language in E-banking is easy to understand, The
output format is easy to read, Information and text are clear and easy to understand Ebanking system provides clear instruction, E-banking display output or transaction fast.
All of them are significant for customer satisfaction, because the calculated significance
value was .000 which is less than the usual statistical significant value 0.05 (P<0.05).
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In relation to Performance three hypothetical statements were designed which are E-banking
provide in multi-language, E-banking provide 24hours -7 days service and Allow to transfer
between bank. All of them are significant for customer satisfaction, because the calculated
significance value was .000 which is less than the usual statistical significant value 0.05
(P<0.05).
About Service content three hypothetical statements were designed which are E-banking
provides information that exactly fits needs, E-banking provides accurate information,
and E-banking provides information that trust. All of them are significant for customer
satisfaction, because the calculated significance value was .000 which is less than the usual
statistical significant value 0.05 (P<0.05).
Besides these, National poorly developed telecommunication infrastructure and Lack
of infrastructure for telecommunications, Internet and online payments impede smooth
development and improvements electronic banking operations of the bank in the city.
National bank e-banking supervision and regulation on electronic banking is very weak.
The bank faced lack of suitable legal and regulatory framework for e-banking. Ethiopian
current laws do not accommodate electronic banking except the single electronic banking
proclamation.
Within the banks employee skill gap on e-banking operations, internal network band
width limitation and telecom network are some of the obstacles in e-banking operations
From the regression result all the seven dimensions are highly significant for customer
satisfaction, the p-values for all the seven dimensions is 0.000 which is smaller than the
significant level 0.001. and also Based on unstandardized coefficient all the seven dimension
for e-banking customer satisfaction their coefficient are (0.200, 0.197, 0.190, 0.104, 0.103,
0.100 and 0.098) ease of use, customer support, service security, service content, performance,
safety reliability and transaction respectively.
5.2 Conclusion
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The purpose of the study is assessment of the effect of e-banking service on customer
satisfaction the case of selected commercial banks in Addis Ababa. To produce this study the
researcher designed seven dimensions which include safety and reliability, transaction
efficiency, customer support, service security, ease of use and performance and service content.
Under each dimension there are statements designed to describe the dimensions. The seven
dimensions were significantly affecting the level of satisfaction of customers under study.
Moreover test was done using chi-square and regression. From the descriptive statistics the study
indicate that customers are neutral about their level of satisfaction on service quality dimensions
in the banks.
In addition to this using qualitative interview for the representatives of the banks the study has
identified the following points as challenges of electronic banking operations: National poorly
developed telecommunication infrastructure and Lack of infrastructure for telecommunications,
Internet and online payments impede smooth development and improvements electronic banking
operations of the bank in the city. National bank e-banking supervision and regulation on
electronic banking is very weak. The bank faced lack of suitable legal and regulatory framework
for e-banking. Ethiopian current laws do not accommodate electronic banking except the single
electronic banking proclamation and within the banks employee skill gap on e-banking
operations, internal network band width limitation and telecom network are some of the
obstacles in e-banking operations.
Future researchers can work on effects of e-banking on customer satisfaction if the setting is
diverse, incorporating other variables which are new, customers which are using the traditional
bank services and new banks which are emerging yet couldn‟t start e-banking services to their
customers
5.3 Recommendations
Based on the information which is described above, the researcher attempted to recommend the
following possible solutions.
Easy-to-use internet banking is important for all customers so, Banks should aim to make
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their electronic banking as simple and easy to use as possible so that customers do not
perceive them as being complicated or difficult to use. This gives insights for web page
developers to design an internet banking system interface and Websites which are more
user-friendly with clear instructions for users.
Awareness creation programs has to be done redundantly on the existence of e-banking,
formal trainings should be organized by the banks for customers in order to increase
customers‟ awareness about e-banking and how to use rather than providing the card
only.
The commercial banks and other stakeholders should work on service security of
E- banking. The banks should prepare typical security technologies applicable to control
system networks such as firewall, intrusion detection and prevention.
During design, and prior to implementation of service content, it is strongly
recommended that users of different ages, and with a range of capabilities and limitations
be engaged to trial the new service and provide feedback. The banks should test
accessibility of their customer electronic banking with both automated tools and userfriendliness trials.
Banks should regularly train their workers who in turn will educate their customers
on electronic banking system and its products. This will enhance the in-depth
understanding of the products and the way they are being used. Hence more customers
with deposits will be attracted. Besides this, the bank should also organize seminars,
workshops, symposia and public lectures to bank customers and general public on the
application of information and technology with E-banking system. This will aid to
increase the use of various E-banking products
The commercial banks and other stakeholders should work on awareness creation,
conducting further research, organize symposium about E-banking safety reliability.
The banks should provide e-banking service for other types of account holders and
encourage customers to use other E-banking channels like they did on ATM.
Banks should communicate frequently with their network providers to ensure that
there is 24/7 network availability if e-banking must be improved
For the successful process of E-banking system information communication technology
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infrastructure, is a major precondition, hence, government, should assist banking sector by
investing on information communication technology infrastructure development.
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