CHAPTER ONE

1.0       INTRODUCTION

1.1       BACKGROUND OF THE STUDY   

The objective of this research work shows how the banking services increases customer satisfaction and also boost their patronage with particular reference to FIRST BANK OF NIGERIA PLC.

However, it is used to measured the level of customer satisfaction and services rendered in the banking industry in Nigeria. As a matter of fact, many banks subscribed to the high customer satisfaction will leads to greater customer loyalty which in turn, leads to both present and future revenue. For that purpose, many organizations that resulted by having superior service quality have been found to be market leaders in terms of turnover and long term customer loyalty and retention.

Some of the banks that have given their customers banking services have recorded tremendous success and has boosted their profitability and the number of customers who patronize them.

In the face of this, evolving bend confidence reformation and restoration efforts by individual banks has improved the banking services in order to satisfy the potential customers and entice others, bank customers have become cautions discriminating chooser and to a large sophisticated.

Banking operations are becoming increasingly, customer dictated. The demand for “banking super malls” offering one stop integrated financial services is well on the rise. The ability of banks to offer clients access to several market for different classes of financial instruments has become a valuable competitive edge. Convergence in the industry to cater for the changes of demographic expectations is now more than evident. Bank assurance and other forms of cross selling and strategic alliance will soon alter the business dynamics of banks and fuel the process of consolidation for increased scope of business and revenue. The thrust on farm sector, health sector, and services offers several and investment linkages. In short the domestic economy is an increasing pie which offers extensive economic of scale that only, large banks will be in a position to tap. With the phenomenal increase in the country’s population and the increased demand for banking services, speed and customers satisfaction are going to be key differentiators for each bank to get useful feedback on their actual response time and customer service aspect of retail banking, which in turn will help them take positive steps in maintaining a competitive edge. This exercise in the context of the banking industry will give us an insight into the parameters of customer satisfaction and their measurement. This vital information will help us to build satisfaction amongst the customer’s and customer loyalty in the long run which is an integral part of any business.

1.2       JUSTIFICATION OF THE STUDY

Some of the main problems faced by customers when it comes to banking hour which are too rigid and not flexible. Usually, most banks operating hours are from Monday to Friday and begins operation from 8.30 am – 4:30pm; or as the case may be prior to this period, Nigeria banks use to commence their services beginning from 10:am in the morning while closing is at 4:00pm from Monday to Friday, but due to consumers demand, the trends changed, when the banks begins their services and some hours earlier.

Despite the practice of beginning services half an hour earlier, some banks that are positioned in shopping malls and departmental stores open up for business. Besides the banking hours, other issue customers are facing is queuing up in Nigeria banks. Standing in line for a long time at the banks is non-productive and is also waste of time. As such, most banks now have development a way to address customers problem. A suggestion box placed at the foyer or entrance another one is opinion meter in some banks or a well – conducted survey is a good start to learn about customer’s needs. For the purpose of this research work, feedback from the survey revealed the reasons that led to customers satisfaction. It was demonstrated that in order to maintain the grip on customer, many banks have now set up suggestion and complaint avenues as hotline, 24 hours call services and online services, customer cares services department. At glance, the issues in relative to banking customer’s have seen various rapid changes in the past decades.

1.3       STATEMENT OF THE PROBLEM                          

The problem being carried out can be clearly seen as the effect of quality customer satisfaction on banking services in Nigeria. The problem will look into the area in which the banks in Nigeria, make use of relevant approaches that have been used for the measurement of customer satisfaction. It also discuss different views that have been developed in relation to the transferability of satisfaction measures across industries and outlines the research questions addressed in this investigation. One of the main problems faced by customers when it comes to banking is issue of banking hours, they are too rigid. But with the establishment of new generation banks in Nigeria and the regulation

demanded by the Central Bank of Nigeria (CBN) which transformed some banks in Nigeria from arm chair banking which are very rampant for many years back.

1.4       RESEARCH QUESTION             

This area focused on questionnaire and procedure for data collection of this research work. Questionnaire can be defined as a means of obtaining, information on a number of issues such as the distributions of a group of people in terms of such factors as gender state, qualification, age, social economic status etc. It could serve to provide information for assessing certain situations such as the extent of availability of banking services and maximum satisfaction to customers by banks. It has two major types namely the fixed responses questionnaire and open end questionnaire, the most one type suitable for this research work is open end questionnaire. Open-end questionnaire is the one that asks questions which are pertinent to the topical issue and which will not give any response option for the respondents.

HYPOTHESIS QUESTION

Hypothesis is a declarative statement subject to inferential testing. It is a proposition which states what we are looking for in other words, it is a conjectural statement of relationship between variables. It is sub divided into two: alternative hypothesis represented (Hi) and null hypothesis represented as (Ho)

1.         Ho: There is no significant relationship between customer satisfaction and banking services in Nigeria

Hi: There is significant relationship between customer satisfaction and banking services in Nigerian

2.         Ho: The customer satisfaction does not enhance the profitability of banks in Nigeria

            Hi: The customer satisfaction enhance the profitability of banks in Nigeria

3.         Ho: Banking services does not play vital roles on customer satisfaction in Nigeria

            Hi: Banking services play vital roles on customer satisfaction in Nigeria

1.5       OBJECTIVE OF THE STUDY    

The objective of the study is to examine the impact of customer satisfaction on banking services. 

1.6       RESEARCH METHODOLOGY

The methodology employed in this research work is questionnaire which is the commonest means of obtaining data and by far the most frequently used instrument by most researchers.

Banker and customer relationship: Thus the relationship that exists between a banker and a customer is essentially a contractual one and it is an implied and unwritten contract. The relationship is sub-divided into two namely general and principal relationship. General relationship is basically between a banker and customer is that of debtor and creditor respectively, while principal relationship entails the banker’s rights.

Bank customer: This is a person or group of people who open account either current or time deposit and savings account with the bank. There are two types of bank namely personal or non corporate customers and corporate customers.

The right of banker to customers or how does the bank services influence the customers satisfaction are as follows:

I.       By paying cheques drawn by the customers properly, on the branch of the bank where such account is kept or any of their branch at all times, in as much sufficient funds are provided in the account. Even though automation has improved this service.

II.    To maintain secrecy in respect of their customers affairs

III. To collect proceed of cheques and orders paid to the credit of the account

IV. The bank must give reasonable notice to the customer before closing the account or terminating their relationship

V.    The bank must provide the customer with the statement of account regularly.

However, the right of customer to banker is as follows:

I.       The customer must give written instructions to the bank, if he/she seeks to withdraw his money, i.e. withdrawn of cheques.

II.    The customer must inform the bank, without delay, of any suspicious dealings on his account as may come to his knowledge through alert e.g. loss of cheque leave.

III. The customer must drawn his cheque with care and diligence and in a manner that will not facilitate fraud, forgery etc

IV. The customer must repay overdraft on demand, loan and other facilities as agreed by parties involved.

V.    The customer must pay reasonable commission and interest on borrowed funds as agreed.

Why some people choose a particular bank. The people prefer or choose a particular bank due to the following reasons:

I.       Waiting time for transaction: This entails that when customers want to make savings and withdrawals with other transactions less time-consuming by reducing the waiting time, in first bank of Nigeria the maximum waiting time is five (5) minutes for savings and withdrawals of money.

II.    Handling customer complaints: Banks handle this with courtesy and care, and investigate impartially any complaint or grievance of a customer, concerning his relations with the bank without any delay.