Professional Documents
Culture Documents
Group 5 Proposal
Group 5 Proposal
Group Assignment
PREPARED BY Id No
Submitted to:
Addis Ababa
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Table of Contents
CHAPTER ONE..........................................................................................................................................1
INTRODUCTION...............................................................................................................................1
1.1 Background of the Study...................................................................................................................1
1.2. Statement of the Problem..................................................................................................................2
1.3 Research question..............................................................................................................................4
1.4. Objective of the study.......................................................................................................................4
1.5. Scope of the Study............................................................................................................................5
1.6 Limitation of the Study......................................................................................................................5
1.7. Significance of the study...................................................................................................................5
CHAPTER TWO.........................................................................................................................................6
REVIEW OF RELATED LITERATURE...................................................................................................6
2.1 Theoretical Literature........................................................................................................................6
2.1.1 Definition of E-banking..................................................................................................................6
2.1.2 Forms of E-banking........................................................................................................................6
2.1.3. Service quality...............................................................................................................................8
2.2 Customer Satisfaction........................................................................................................................8
2.2.1 Customer satisfaction in banking....................................................................................................9
2.2.2 The Relationship between Service and Customer Satisfaction......................................................10
2.2.3 Measuring customer satisfaction...................................................................................................11
2.3 Empirical Evidences........................................................................................................................13
2.3.1 Empirical study-worldwide...........................................................................................................13
2.3.2 Empirical Studies in Ethiopia.......................................................................................................15
CHAPTER THREE...................................................................................................................................17
METHODOLOGY....................................................................................................................................17
3.1. Study designs..................................................................................................................................17
3.2. Research approach..........................................................................................................................17
3.3. Research instrument (data collection instrument)...........................................................................17
3.4. Data source and collection procedures............................................................................................18
3.5. Population of the Study...................................................................................................................18
3.6. Methods of Data Collection............................................................................................................19
3.7. Methods of data analysis.................................................................................................................19
3.8. The variables..................................................................................................................................20
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3.9. Validity of research instrument.......................................................................................................20
3.10. Ethical consideration....................................................................................................................21
References.................................................................................................................................................22
Budget...................................................................................................................................................24
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CHAPTER ONE
INTRODUCTION
Customer satisfaction is the major issue for the business that is operating in technology based
services and related services. Good customer service quality is the main factor that will
determine; in the future whether the business will survive or fail (Thompson &Bokma 2000).
Due to rapid technology change and market competition service quality becomes an increasingly
important issue .Therefore understanding a service quality issue becomes very important to
satisfy the customer (Broderick& Vachirapornpuk 2002) Information and communication
applications are paramount concerns to the banks in today’s business environment and internet
has become a major platform for all financial, banking and commercial service to their customers
with advanced software technology but they are suffering with security issues. An automated
teller machine allows a bank customer to conduct their banking transactions from almost every
other e-banking in the world. The developments of technologies have enabled organizations to
provide superior services for customers’ satisfaction (Surjadjaja et al., 2003). The availability of
several e-banking countries wide has greatly improved the quality and convenience of service
delivery. However, researchers have stated that users’ satisfaction is an essential determinant of
of success of the technology-based delivery channels (Tong, 2009; Wu & Wang, 2007). Today,
Ethiopian banks are facing challenges with stiff competition. Hence, delivering quality service
with in new technology and creating customer satisfaction will be expected of them to win this
competition.
Therefore, this research will assess the factors affect customer satisfaction and effectiveness of e-
banking service quality in the cases of Awash Bank S.C in Addis Ababa Akaki kality sub city
particularly in Tullu dimtu and Melkasheno branch.
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teams, and servicing local and international reporting needs is a major business challenge that
requires powerful information system response (Loudon, 1974; Davis and Olson, 1985).
Globalization and information technology also bring new threats to domestic business firms:
Because of global communication and management systems, customers now can shop in a
worldwide marketplace, obtaining price and quality information reliably 24 hours a day. To
become competitive participants in international markets, firms will need powerful information
and communication systems. ICT has provided new products and value added services to be
delivered using the same electronic infrastructure (Abor,2004).In order to remain competitive
edge most companies invest a lot of money in modern ICT infrastructure. A number of studies
conclude that ICT has applicable positive effects on banks productivity, banking hall transaction,
bank service delivery (Balachander et al, 2001, Yasuhru, 2003)
We tried to assess what other researchers investigated in E-Banking they tried to fill the gap in
the effect of E- Banking service on financial performance, e-banking service security and
awareness also most of the researchers tries to investigate in government banks like CBE
Commercial Bank of Ethiopia according to this we tried to fill the gap in factors affecting
customers’ satisfaction in E-banking service quality in the case of Awash Banks.
2. What is the customers’ level of satisfaction with e-banking service quality in Awash Bank
S.C?
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3. What are the major challenges in e-banking activities to satisfy customers in Awash Bank
S.C?
4. Which E-banking service quality dominantly and significantly affects customer satisfaction in
Awash Bank S.C?
The general objective of the study is to assess factors affecting customers’ satisfaction in E-
banking service quality in the case of Awash Banks.
To identify how the major e-banking service quality dimensions affect customer satisfaction in
Awash bank S.C.
1) To assess the influence of e-banking service quality on customer satisfaction in Awash bank
S.C.
2) To verify the level of customer satisfaction with e-banking service quality dimension in
Awash bank S.C.
3) To identify the types of customer using e-banking services offered by Awash bank S.C.
4) To examine Which E-banking service quality dominantly and significantly affects customer
satisfaction in Awash Bank S.C
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For this reason the scope encompasses two selected branches of Awash Bank S.C. These will
included Melkasheno and Tulu dimtu branches form the geographical scope of this study.
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CHAPTER TWO
E-banking is a form of banking service where funds are transferred through an exchange of
electronic signal between financial institutions, rather than exchange of cash, checks, or other
negotiable instruments (Kamrul, 2009). E-banking also known as electronic funds transfer
(EFT). It is simply the use of electronic means to transfer funds directly from one account to
another rather than by check or cash (Malak, 2007).The term e-banking often refers to
online/internet banking which is the use of the internet as a remote delivery channel for banking
services (Furst&Nolle, 2002, p.5). E-banking is the use of a computer to retrieve and process
banking data (statements, transaction details, etc.) and to initiate transactions (payments,
transfers, requests for services, etc.) directly with a bank or with other financial service provider
remotely via a telecommunications network (Yang, 1997). It should be noted that electronic
banking is a bigger platform than just banking via the internet.
E-banking can be also defined as a variety of platforms such as internet banking or (online
banking), TV-based banking, mobile phone banking, and PC (personal computer) banking
whereby customers access these services using an intelligent electronic device, like PC, personal
digital assistant (PDA), automated teller machine (ATM), point of sale (POS), kiosk, or touch
tone telephone (Alagheband, 2006).
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ATM
ATM is an electronic machine in a public place, connected to a data system and related
equipment and activated by a bank customer to obtain banking services without going in to the
banking hall. It allows customers to access banking services such as withdrawals, transfers,
inquiries about account balances, requests for cheque books, account statements, direct deposits,
foreign currency exchange etc. (Fenuga, 2010). Using an ATM requires an ATM card and a pass
code, often referred to as a PIN (Personal Identification Number).
Internet banking
Internet banking is conducted by completing bank transactions by directly accessing the bank
through the internet. Nowadays, internet banking customers can access many different services
online, which makes physical banks open even after office hours. Internet banking allows
customers of a financial institution to conduct financial transactions on a secure website operated
by the institution. Internet banking can be conducted either by accessing the internet with a
computer or by using a phone that has internet features (Alabar& Timothy, 2012).
POS
Point of Sale (POS) also sometimes referred to as Point of Purchase (POP) checkout is the
location where a transaction occurs. A "checkout" refers to a POS terminal or more generally to
the hardware and software used for checkouts, the equivalent of an electronic cash register. A
POS terminal manages the selling process by a sales person accessible interface. The same
system allows the creation and printing of the receipt (Shittu, 2010).
Mobile banking
Mobile banking (also known as M-Banking) is a term used for performing balance checks,
account transactions, payments, credit applications and other banking transactions through a
Mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile
banking services were offered over SMS, a service known as SMS banking. Mobile banking is
used in many parts of the world with little or no infrastructure, especially remote and rural areas.
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This aspect of mobile commerce is also popular in countries where banks can only be found in
big cities, and customers have to travel several miles to the nearest bank. The scope of offered
services may include facilities to conduct bank and stock market transactions, to administer
accounts and to access customized information (Tiwari&Buse, 2007).
In researching satisfaction, firms generally ask customers whether their product or service has
met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When
customers have high expectations and the reality falls short, they will be disappointed and will
likely rate their experience as less than satisfying (John &Joby, 2003).
Appear to be important for all firms’ satisfaction is more important for loyalty in service
industries like bank. Because even if the customers appear to be satisfied, they may look for
other bankers if they believe they might receive better service elsewhere (Reichheld, 1996) cited
in Thakur (2011). Thus the banking organizations need to know how to keep their customers.
However, keeping customers is also dependent on a number of other factors. These include a
wider range of service choices, greater convenience, better prices, and enhanced income (Thakur,
2011).
Ioanna (2002) cited in Thakur (2011) further proposed that differentiation is nearly impossible in
a competitive environment like the banking industry. Banks everywhere are delivering nearly
same services. Thus, bank management tends to differentiate their firm from competitors through
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service quality. Service quality is a crucial element which impact customers‟ satisfaction level in
the banking industry. Generally in banking, quality is a multivariable concept, which includes
differing types of convenience, reliability, services portfolio, and critically, the staff delivering
the service (Storbacka et al., 1994) cited in Thakur (2011).
Minimum price with maximum usage and profit always breeds higher level of satisfaction (Jamal
& Kamal, 2004) cited in Afsar (2010). When pricing is not suited to the needs of the customers,
dissatisfaction usually occurs. In banking industry also, the interest rates on loans and charges on
the usage of online services such as ATM machines and the processing fee is a major source of
conflict between the bank and its customers. If customers think that the charges are more than it
should become paring to their needs, they switch. Competition is now fierce in banking industry
as it has become too easy to open an account in any other bank that results switching cost to be
very minimal. But if a customer is satisfied, the loyalty injects automatically and the customer
remains with the current banker for a longer and longer period of time (Fox &Poje, 2002) cited
in Afsar (2010).
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erosion (Thakur, 2011).service quality is the key to measure e-banking user satisfaction.
Researchers have paid much attention to the close relationship between service quality and
customer satisfaction (Parasuraman et al., 1985).
Most researchers found that service quality is the antecedent of customer satisfaction (Bedi,
2010; Kumar et al., 2010; Kumar et al., 2009; Naeem and Saif, 2009; Parasuraman et al., 1988).
Quality customer service and satisfaction are recognized as the most important factors for bank
customer acquisition and retention (Jamal, 2004; Armstrong and Seng, 2000; Lassar et al., 2000).
Service quality is considered as one of the critical success factors that influence the
competitiveness of an organization. A bank can differentiate itself from competitors by providing
high quality service. Service quality is one of the most attractive areas for researchers over the
last decade in the retail banking sector (Avkiran, 1994; Stafford, 1996; Johnston, 1997; Angur et
al., 1999; Lassar et al., 2000).
According to Tse& Wilton (1988) customer satisfaction is the consumer’s response to the
evaluation of the perceived discrepancy between prior expectations and the actual performance
of the product. The service quality variables identified by (Parasuraman et al., 1994) are
reliability, responsiveness, competence, accessibility, courtesy, communication, credibility,
security, understanding and tangibility. Service quality leads to overall customer satisfaction. It
is one of the service factors contributing to customers‟ satisfaction judgments and can be
considered in multi- level and multi-dimensional (Caruana& Malta, 2002).
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Yang, Jun, & Peterson (2004) identified five online service quality dimensions (responsiveness,
reliability, competence, access and security) and their relationships with the customer
satisfaction. Wolfinbarger&Gilly (2002) observed that reliability and fulfillment are the strongest
predictors for customer satisfaction. Lui& Arnett (2000) identified five critical dimensions of
online service quality in relations to customer satisfaction in the website. Among these, the
quality of information that is relevant, accurate, timely, customized and complete are given
priority for the customer satisfaction in the online service. Johnston (1997) identified
attentiveness, responsiveness care and friendliness as the main sources of satisfactions (satisfiers)
in banking services, and integrity, reliability, availability and functionality as the main sources of
dissatisfaction. Khalil & Pearson (2007) have found that trust significantly affects attitude
towards internet banking acceptance. To encourage internet banking adoption, banks need to
develop strategies that improve the customer’s trust in the underlying technology. The other
factors include quick response, assurance, follow-up and empathy. Security, correct transaction,
customer control on transaction (personalization), order tracking facilities and privacy are other
important factors in the online service that affect the customer satisfaction. Joseph, McClure, &
Joseph (1999) investigated the influence of internet on the delivery of banking services. They
found six underlying dimensions of e-banking service quality as convenience and accuracy,
Feedback and complaint management, efficiency, queue management, accessibility and
customization. Jun &Cai (2001) identified service quality dimensions of Internet banking service
quality. These are reliability, responsiveness, competence, courtesy, credibility, access,
communication, understanding the customer, collaboration, continuous improvement, content,
accuracy, ease of use, timeliness, aesthetics, security and divers features. They also suggested
that some dimensions such as responsiveness, reliability and access are critical for both
traditional and internet banks.
Hua (2009) conducted an experiment to investigate how user’s perception about online banking
is affected by the perceived ease of use of website and the privacy policy provided by the online
banking website. In this study, it also investigates the relative importance of perceived ease of
use, privacy, and security. Perceived ease of use is of less importance than privacy and security.
Security is the most important factor influencing user’s adoption.
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Jun et al (1999) revealed reliable/prompt responses, attentiveness, and ease of use had
considerable impacts on both customers perceived overall service quality and satisfaction. It also
indicated that there is a significant positive relationship between overall service quality and
satisfaction. Yang & Jun (2002) redefined the traditional service quality dimensions in the
context of online services, and suggested an instrument consisting of seven online service
dimensions (reliability, access, ease of use, personalization, security, credibility, and
responsiveness). Joseph et al (1999) considered banking service quality with respect to
technology use, such as ATMs, telephone, and the internet and identified six dimensions. They
were convenience/accuracy, feedback/complaint management, efficiency, queue management,
accessibility, and customization.
Zeithaml et al (2000) developed SERVQUAL for measuring e- service quality. They identified
11 dimensions: access, ease of navigation, efficiency, flexibility, reliability, personalization,
security/privacy, responsiveness, assurance/trust, site aesthetics, and price knowledge.
Eithaletal(2000) developed for ensuring service quality. He identified11dimensions: access, ease
of navigation, efficiency, flexibility, reliability, personalization, security/privacy, responsiveness,
assurance/trust, site aesthetics and price knowledge.
Extensive study on service quality conducted by researchers have proposed that service quality
can be measured using the SERVQUAL instrument (Parasuraman, Berry &Zeithaml 1985,
1988). The attributes of initial SERVQUAL model were tangibles, reliability, responsiveness,
competency, courtesy, assurance, credibility, security, access, and understanding. Later reduced
these ten dimensions into five by using a factor analysis (Parasuraman et al, 1988). These five
dimensions are tangibles, reliability, responsiveness, and Empathy. The SERVQUAL instrument
provides the computed disconfirmation approach whereby the difference between a customer’s
expectation and the actual performance is calculated (Dhandabani, 2010).
Construct in Retail Banking in India. This study investigates customer satisfaction as the most
important factor behind loyalty in retail banking. Various study showed that satisfaction plays an
important role to establish loyal customer base. Their study points out that satisfaction and
loyalty relationship was critical for retail banks. Understanding the factors behind loyalty as well
as the antecedents of customer satisfaction was an important issue for academic research as well
as for marketing in financial services. The major aim of this study was to identify satisfaction as
the major factor behind customer loyalty in retail banking.
The research has been carried out through secondary research and primary research. Survey
method was used for primary research. Personal contact approach through questionnaire had The
research has been carried out through secondary research and primary research. Survey method
was used for primary research. Personal contact approach through questionnaire had been
introduced to conduct the survey. The findings reveal that satisfaction and loyalty were related to
each other. Moreover, satisfaction has a positive and direct impact on loyalty in banking. The
study was loyalty based. The study was good, but failed to study the effects of e-banking on
customer’s satisfaction. This study wants to fill a gap. Jaspal and Gagandeep (2011) conducted a
study on determinants of Customer Satisfaction. The study examines customer satisfaction had
been a common practice among banking and finance researchers over the years. The main reason
for continued interest in this area of research was the ever changing banking business
environment across the world. The objective of the present paper was to investigate the
determinants of customer satisfaction of Indian (Universal) banks. Data was collected from a
sample of 180 respondents using convenience sampling technique. Factor analysis results
revealed that responsiveness, tangibles, services innovation, reliability and accessibility,
assurance, pricing and other facilities, problem solving capability and convenient working hours
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are the main determinants of customer satisfaction. With all the potential of the study, the study
failed to incorporate the concept of e-banking and customer’s satisfaction.
Amaoko (2012) in his research on the impact of ICT on banking operations in Ghana, ICT has
contributed positively to the provision of banking services and growth of the Ghananian banking
services and growth of the Ghananian banking industry. Internet banking and e-banking is not
yet developed in Ghana. The study recommended that banks should develop user friendly
systems and applications for general population Government and banks should play a key in
enhancing ICT infrastructure, put in place incentives like tax reduction, and make PC available
and affordable for every Ghanian. Financial institutions should offer programs to reassure
customer‟s safety with regards to ICT through sensitization, workshops and support the skills be
a central monitoring unit permanently mannered by personnel to the operations of all the bank‟s
ATM‟s so that shortage of funds, occasional shut downs, seizure of electronic cards etc are
handled with dispatch. Lastly the banking institutions should also come out with more electronic
products and services to reduce the turnaround time of customers, such products will give them
the opportunity to sit at the comfort of their homes, workplaces and transact business with the
Banks.
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(Wondwossen&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.
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CHAPTER THREE
METHODOLOGY
In this study explanatory and descriptive research design will be used. Exploratory research
design refers to social research which explores a certain phenomenon with the primary aim of
understanding the phenomenon or situation and also to get clarity and define the problem at hand
clearly. As an exploratory study the researcher will aims at establishing the relationship between
electronic banking attributes and customer satisfaction. That means it will focus on the
dimensions of service quality (SERVQUAL Model), influencing customer satisfaction towards
electronic banking in Awash bank S.C will consists of reliability, responsiveness, assurance,
tangibles and empathy. Descriptive design will be used to describe the current state of e-banking
at Awash bank.
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The sections will also group into the various dimension of service quality outlined in the
conceptual framework. The sections contain reliability, responsiveness empathy, assurance, and
tangibles. The questionnaires will be structured in close-ended and opened ended type and
responses to the questions will measured on a five Likert rating scale where: Strongly Agree
(SA) = 1; Agree (A) = 2; Neutral (N) =3, Disagree (D) = 1; and Strongly Disagree (SD) = 5; will
be used. The use of Likert scale is to make it easier for respondents to answer question in a
simple way. In addition, this research instrument will have permission an efficient use of
statistics for the interpretation of data.
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1. Time and resource of the researcher.
2. E-banking service is related with machine and/or internet system and they are not biased
among the customers. In the determination of sample size, the three criteria are important to
gather the require data from sample of respondents. These included the level of precision, the
level of confidence or risk and the degree of variability in the attributes being measured that
enable the researchers to determine appropriate sample size. Therefore, by considering these
issues sample size to collect data through questionnaire for this research determined by using
(Yamane, (1967) formula.
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descriptive and inferential statistics. The general questions will analyzed by using descriptive
statistics. The descriptive statistical results will be presented by tables, frequency distributions
and percentages to give a condensed picture of the data. This will be achieved through summary
statistics, which includes the means, standard deviations values which will computed for each
variable in this study. And the e-banking concerned questions shall be analyzed using inferential
statistics; such as multiple linear regression analysis, ANOVA and analysis of variance and the
hypothesis will test using t-test. The questionnaires survey data have be analyzed by multiple
linear regression analysis, ANOVA and the value of. In analyzing the data which will gathered
from the survey (questionnaire) and reliability will primarily calculated using SPSS by
Cronbach’s Alpha, and content validity of the questionnaire will also established by reviewing
existing literature.
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Cooper, Lee G. 1988. “Market share analysis evaluating competitive marketing effective”
Kwanseigakuin University Nishinomiya-shi, Japan.
Howcroft, B., Hamilton, R. And Hewer, P. (2002): Consumer attitude and the usage and
Adoption of home-based banking in the United Kingdom.The International Journal of Bank
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Leow, Hock Bee (1999), "New Distribution Channels in banking Services. Banker’s Journal of
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Malak, J 2007, Readiness of the Palestinian banking sector in adopting the electronic banking
Negi, R. (2009). Determining customer satisfaction through perceived service quality: A study
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Worku, Tilahun ,Tafa ( 2016) . Impacts of Electronic Banking Service Quality on Customer
Satisfaction.Journal of internet Banking and Commerce.
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Budget
1 Travel 1500
3 Flash 700
7 Miscellaneous 2000
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