Electronic Banking and Customer Satisfaction in Selected Banking Institutions in Mogadishu Somalia

ABSTRACT 

The study sought to assess the effect of electronic banking on customer satisfaction of Banks in Mogadishu Somalia. It was guided by three specific objectives that included; to determine the effect of ATM (Automatic teller machine) on customer satisfaction of Banks in Mogadishu Somalia, to establish the effect of electronic funds (EFT) transfer on customer satisfaction of Banks in Mogadishu Somalia and to establish the effect of mobile banking on customer satisfaction of Banks in Mogadishu Somalia. This research employed a cross-section research design to describe the variables and the questionnaire and interview guide were used as the research instruments. Descriptive statistics which were used in this study included frequencies and means and regression analysis was used to evaluate the significant effect of e-banking on customer satisfaction. The findings revealed the following: ATM (Automatic teller machine) significantly affects customer satisfaction of Banks in Mogadishu Somalia, this effect therefore implies that ATM (Automatic teller machine) highly contribute to customer satisfaction of Banks in Mogadishu Somalia, the findings revealed that there is a significant effect electronic funds (EFT) transfer has on customer satisfaction of Banks in Mogadishu Somalia, findings of this study proved a positive significant effect mobile banking has on customer satisfaction of Banks in Mogadishu Somalia. Still the conclusions were that; it is important to ensure that the ATM is established throughout the whole region of Mogadishu Somalia, effective electronic funds (EFT) transfer requires a reporting and review structure to ensure that electronic funds (EFT) transfer services are effectively identified and assessed and that appropriate controls and responses are in place and mobile banking needs an environment that is customer friendly and likely to develop on their contentment. The researcher recommended that: the commercial banks in Mogadishu Somalia should develop a good system to monitor all ATM transactions so that there is effectiveness in electronic banking and ensure to cover loopholes in the system to enhance customer satisfaction in commercial Banks, the bank managers in Mogadishu should develop an effective electronic funds (EFT) transfer system which makes electronic funds (EFT) transfer easy and flexible so as to boost customer satisfaction in commercial Banks. The study contributed to knowledge by observing with financial institutions, technologies like direct deposit, automated teller machines and credit/debit cards have been the key investments and innovation. In a clientele world, the customer is the king so if these technologies are meant to improve on service delivery and satisfaction, electronic banking acquire a better future and was still shown in the recommendations.

TABLE OF CONTENTS

DECLARATION........................................................................................ i

APPROVAL..............................................................................................ii

DEDICATION.........................................................................................iii

ACKNOWLEDGEMENTS ..........................................................................iv

TABLE OF CONTENTS ............................................................................ v

LIST OF TABLES ....................................................................................ix

ABSTRACT............................................................................................. x

CHAPTER ONE................................................................................ 1

INTRODUCTION............................................................................. 1

1.0 Introduction .................................................................................. 1

1.1 Background of the Study................................................................ 1

1.1.1 Historical Prospective............................................................... 1

1.1.2 Theoretical Perspective ............................................................ 4

1.1.3 Conceptual Perspective ............................................................ 5

1.1.4 Contextual Perspective............................................................. 6

1.2 Problem Statement........................................................................ 8

1.3 Purpose of the Study ..................................................................... 8

1.4 Research Objectives ...................................................................... 8

1.5 Research Questions ....................................................................... 9

1.6 Hypotheses ................................................................................... 9

1.7 Scope of Study .............................................................................. 9

1.7.1 Geographical Scope ................................................................. 9

1.7.2 Content Scope....................................................................... 10

1.7.3 Time Scope ........................................................................... 10

1.8 Significance of the Study.............................................................. 10

1.9. Operational Definition of Key Terms ............................................ 11

CHAPTER TWO............................................................................. 12

LITERATURE REVIEW .................................................................. 12

2.0 Introduction ................................................................................ 12

2.1 Theoretical Review ...................................................................... 12

2.1.1 Disconfirmation Theory .......................................................... 12

2.2 Conceptual Framework ................................................................ 14

2.3 Review of Related Literature ..................................................... 15

2.3.1 Effect of ATM Banking on Customer Satisfaction...................... 15

2.3.2 Effect of Electronic Funds Transfer (EFT) on Customer Satisfaction................................................ 17

2.3.3 Effect of Mobile Banking on Customer Satisfaction................... 18

2.4 Related Studies ........................................................................... 21

2.5 Research Gaps ............................................................................ 27

CHAPTER THREE..........................................................................28

METHODOLOGY ...........................................................................28

3.0 Introduction ................................................................................ 28

3.1 Research Design.......................................................................... 28

3.2 Target Population........................................................................ 28

3.3 Sample Size ................................................................................ 29

3.4 Sampling Procedure..................................................................... 30

3.5 Data Sources............................................................................... 30

3.5.1 Primary Data ......................................................................... 31

3.6 Data Collection Instruments ......................................................... 31

3.6.1 Questionnaires ...................................................................... 31

3.6.2 Interviews............................................................................. 31

3.7 Validity and Reliability of the Instrument....................................... 32

3.7.1 Validity ................................................................................. 32

3.7.2 Reliability .............................................................................. 32

3.8 Data Gathering Procedures .......................................................... 33

3.8.1. Before the Administration of the Questionnaires ..................... 33

3.8.2. During the Administration of the Questionnaires ..................... 33

3.8.3. After the Administration of the Questionnaires........................ 33

3.9 Data Analysis .............................................................................. 33

3.10 Ethical Considerations ................................................................ 34

CHAPTER FOUR............................................................................ 35

DATA PRESENTATION, ANALYSIS AND INTERPRETATION.......... 35

4.0 Introduction ................................................................................ 35

4.1 Response Rate ............................................................................ 35

4.3 Electronic Banking ....................................................................... 38

4.4 Customer Satisfaction .................................................................. 41

4.5 Effect of ATM on Customer Satisfaction in Commercial Banks in Mogadishu Somalia ...................................... 45

4.6 Effect of Electronic Funds (EFT) Transfer on Customer Satisfaction in commercial Banks in Mogadishu Somalia ............................................ 47

4.7 Effect of Mobile Banking on Customer Satisfaction in Commercial Banks in Mogadishu Somalia ...................................... 49

4.8 Multiple Linear Regression............................................................ 51

CHAPTER FIVE ............................................................................. 53

DISCUSSIONS, CONLUSIONS AND RECOMMENDATIONS............ 53

5.0 Introduction ................................................................................ 53

5.1 Discussions ................................................................................. 53

5.1.1 Discussion on the Effect of ATM on Customer Satisfaction in Commercial Banks................................................ 53

5.1.2 Discussion on the Effect of Electronic Funds (EFT) Transfer on Customer Satisfaction in Commercial Banks ........................... 55

5.1.3 Discussion on the Effect of Mobile Banking on Customer Satisfaction in Commercial Banks .......................................................... 56

5.2 Conclusions................................................................................. 57

5.3 Recommendation......................................................................... 58

5.4 Contribution to Knowledge ........................................................... 60

5.5 Limitations of the Study ............................................................... 60

5.6 Areas for Further Research........................................................... 61

REFERENCES................................................................................ 62

APPENDICES................................................................................ 70

APPENDIX I: QUESTIONNAIRE/RESEARCH INSTRUMENT .................... 70

APPENDIX II: INTERVIEW GUIDE ...................................................... 73