CHAPTER ONE

INTRODUCTION

Background of the Study

The Nigeria banking industry was restructured in 2004/2005 which led to anarchy and loss of public confidence in the banking sector with an aftermath of the global financial meltdown in 2008/2009 and the nosedives of share prices. Effective customer service in banking is one of the most important ways to keep customers coming back despite of the huddles in the Nigeria banking sector. The strategies to maintain customer’s confidence includes responding to customers’ questions and complaints in a thorough and timely manner and interacting with customers through face to face meeting, telephone, mail, fax and email. Above all, bank employees are involved in some aspect of customer service. Washburn Financial Services explain that in increased competition, banks are required to become more and more customer-focused. It is very expense to get new customers than to retain old customers. Keeping customers requires customer service staff in banks to be mature and intelligence. Banking has seized to be an entirely arm chair profession largely directed by conservative men who have been stripped of initiatives. In today’s world, banking is being shaped by innovative identification of the needs of the customers. Effective customer service is the process by which an organization delivers its services or products in a way that allows the customer to access them in the most efficient, fair, cost effective and humanly satisfying and pleasurable manner possible. Therefore, the problem here is to use Queuing techniques to determine birth-death service process with a population consisting of customers in the banks either waiting for banking services or currently in the bank service. A birth occur when a bank customer arrives at the banking hall for business transactions, and a death occur when the bank customer finalizes his transaction and departs from the banking hall. In addition, to test the queuing assumption on first come first served basis. Against this backdrop, the objectives of the study are to empirically investigate the goal of Nigerian banks to meet the needs and expectations of various customers in order for them to increase their deposits and transactions leading to profitability. To outline the relevance of effective customer service to achievement of profit in banks. To list the elements of effective customer service as used in the selected banks. To rank the customer service elements in their degree of impact on the banks’ profitability. Furthermore, this study will be concerned with examining various elements of customer service developed by the banks in the last twelve years owing to competition which the bank have leveraged on to attain a profit position. Applying queuing analysis in the banking sector model is to permit forecasting of customer services on profitability, which is useful for both policy makers and the banking sector in general for formulating informed course of action. In spite of the importance of banks as financial intermediaries, customer services and profitability modeling with the application of queuing techniques has not been in the mainstream of management research in Nigeria. Analyses of the banking sector have so far focused on theoretical assessment of growth trends and sectorial behavior patterns in the industry. Discussion in those studies has, for instance, suggested a number of factors that may influence customer service in the banking sector, bank products and management. There have been no quantitative techniques model designed to measure banks customer service and its profitability and their possible linkages between the banking sector and the real sector of the economy. Since independence in Nigeria and the establishment of the Central Bank of Nigeria, no consensus has been reached by different Scholars as regards the impacts or correlations between customers services with banks profitability in Nigeria using queuing techniques.

Statement of the Problem

In Nigeria, the customer service unit is more effective in the banks than in all other organizations of the economy. Yet, the banks still have a long way to go in order to satisfy the customers of banks worldwide. The banking business today has gone beyond arm- chair banking era where the customers had to look for the banker to transact business. It is now the era of highly competitive business among banks. These financial institutions now engage in aggressive search of the customer to patronize their products and services. For effective customer service, the relationship between customer satisfaction and business performance should be taken into consideration. One of the reasons is that the relationship between customer satisfaction (as a result of service quality) and business performance is not clear. According to Zeithaml 2000, the major problem in measuring the relationship are; the time lag between measuring customer satisfaction and profit improvement, the number of other variables influencing performance such as pricing, convenience, transaction methods and system, customer care and so on should be included in the relationship because they explain the causality between satisfaction and result. However, the problems faced by banks in delivering effective services to customers include; insufficient legal system, high provisions for non-performing loans, high lending rates, poor management, political instability, high pricing of financial services, higher risks and low profitability. These have in turn affected their quality of service offered. Most times, these negative effects limit the number of prospective customers who patronize banking services. This is because a customer who has once been disappointed by a bank’s services decides to tell others not to use that same service.

Objectives of the Study

The main objective of the study is to investigate the need for improved customer services in the Nigeria banking Industry. Specifically the study intends to:

1.     Analyze the impact of improving customer service management on the performance of the banking industry. satisfaction.

2.     To investigate on ways the banking industry can improve their customer service

3.     To find out the challenges of improving the customer service of Nigeria banks

Research Question

1.     What are the impact of improving customer service management on the performance of the banking industry?

2.     What ways the banking industry can improve their customer service

3.     What are the challenges of improving the customer service of Nigeria banks

Research Hypothesis

 Ho: there is no significant impact of improving customer service management on the performance of the banking industry

Hi: there is significant impact of improving customer service management on the performance of the banking industry

Significance of the Study

The important of this study is to throw more light on some of the causes and effects of unsatisfactory counter services in the Nigerian banks which is the base of the current Nigerian banking system. The bank staff / management will also benefit from this study.

Furthermore, this study will go a long way by educating the commercial banks on how to dispense their services to their customers and also to help the average Nigerian bank customer to learn how to be patience in dealing with the bank staff and not always be in a hurry.

Finally, I hope that this work will provide basis for future research.

 Scope of the Study

This Study will be Concentrated on Union Bank of Nigeria, Enugu main branch. This Study Examines The Causes Of Poor Customer Services And Ways Of Improving It. Considering This Factors, the data and response to questionnaires were limited to staff and customer of union bank of Nigeria, Enugu.

 Limitation of the Study

The challenge of finance for the general research work will be a challenge during the course of study.  However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite this constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

Definition of terms

Customer Service: the assistance and advice provided by a company to those people who buy or use its products or services

Banking Industry:  a network of financial institutions licensed by the state to supply banking services.