CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Artificial intelligence (AI) technology advancements have brought about tremendous changes in the provision of services within the international banking industry as well as the international commercial sector. The tool that is currently most popularly used among the applications of AI is the chatbot. This application simulates a conversation between two human beings in order to offer prompt answers for customer queries using voice or texts. Chatbots are currently commonly used in the banking industry and e-commerce businesses (Adeyemi & Chukwu, 2026).

The digitalization of banking services in Nigeria is becoming increasingly prevalent, driven by the growth of the Internet, mobile banking, and competition among financial organizations. Chatbots powered by artificial intelligence are employed by commercial banks via their mobile applications, websites, and social networking sites in an effort to make the customer’s life easier while simultaneously lowering operation costs. Likewise, e-commerce sites utilize chatbots extensively to facilitate shopping experience for their customers (Okoro & Ibrahim, 2025).

With all these developments, however, customer satisfaction still poses as an important factor in the Nigerian banking industry. The customers are sometimes faced with challenges of delayed feedbacks, unavailability of the system, as well as the inability of chatbots to understand difficult requests. This is particularly in cases of semi-urban settings such as Jos North in the state of Plateau. Although customers value the round-the-clock support offered by the chatbot service providers, there are some who complain about inaccuracies in responses (Bello et al., 2026). Moreover, the incorporation of chatbots in electronic commerce has enhanced service delivery but at the same time triggered issues concerning trust, privacy, and personalization. The use of chatbots by many customers in dealing with delicate issues such as transactions is rare since they prefer working with human agents. This makes it imperative to explore how the use of chatbots affects customer satisfaction in Nigeria banking and e-commerce.

1.2 Statement of the Problem

While the banking sector and the e-commerce platform in Nigeria have begun to utilize chatbot technology, customer satisfaction has remained unpredictable. Many of the clients in Jos North complain that while there are instances where the chatbots work effectively, there are other cases where they give unsatisfactory answers to the problems faced by their clients. Research findings indicate that even though chatbots increase response rate and lower workload for human customer service representatives, they have been found deficient in areas such as understanding natural language, personalization, and emotional intelligence (Ibe & Mohammed, 2025). Such weaknesses make it difficult for them to provide adequate support to customers in case of complex queries.

Moreover, challenges in accessing stable internet services and poor knowledge of using such services also limit customer satisfaction by hampering the efficiency of chatbot services within banks and e-commerce organizations (Adeyemi & Chukwu, 2026). Some customers may not be well versed with the use of such digital applications, resulting in frustration and mistrust.

The research problem of this paper is to determine the effect of chatbots on customer satisfaction at Nigerian banks and e-commerce organizations, particularly in Jos North of Plateau State.

1.3 Objectives of the Study

The primary goal of the current research work is to assess the effect of chatbot in determining customer satisfaction within the Nigerian banking and e-commerce sectors.

Secondary objectives of this study include:

1.       To determine the extent of chatbot usage among banking customers in Jos North;

2.       To determine the effect of chatbot responsiveness on customer satisfaction;

3.       To determine customers' perception of chatbot service in banking and e-commerce;

4.       To identify challenges to effective use of chatbots.

1.4 Research Questions

These research questions guide the conduct of this study:

1.       To what extent are the banking customers in the North of Jos using chatbots?

2.       How does the responsiveness of chatbots influence customer satisfaction?

3.       How do customers perceive chatbot services in banking and e-commerce?

4.       What factors inhibit the effective utilization of chatbots in these industries?

1.5 Significance of the Study

Importance of the Study

The study is important for many reasons. Firstly, the study makes an important contribution to the literature concerning the relationship between artificial intelligence and customer service delivery in emerging economies. The study will give insights into the impact of using chatbots on customer satisfaction in Nigerian banking and e-commerce industries.

Secondly, the study is important for commercial banks and e-commerce firms in need of improving their digital customer service strategy. The study findings will enable organizations to know what customers expect from them and design appropriate chatbots.

Thirdly, the study findings will be important to policy makers including the Central Bank of Nigeria in formulating guidelines for the safe and effective use of artificial intelligence in financial services. Lastly, the study can be used by other researchers working on similar research problems.

1.6 Scope of the Study

The research is confined to a geographical area of Jos North Local Government Area of Plateau State, Nigeria. The study targets customers of commercial banks and selective e-commerce customers who use chatbot systems. The research aims at finding out the effect of the chatbots on customer satisfaction, without considering other types of artificial intelligence such as biometrics and predictive analysis.

1.7 Conceptual Clarification

Chatbots: Software-based applications enabled by artificial intelligence to engage in conversation-like interaction with humans through text or speech.

Customer Satisfaction: The level at which expectations of customers have been met or surpassed by any service or product offered.

E-commerce: Electronic commerce activities where businesses carry out sales of products and services online.

Banking Industry: Businesses in banking that offer services including saving and borrowing money along with other financial transactions.

Artificial Intelligence (AI): Artificial representation of human brain functions in intelligent machines.

1.8 Theoretical Framework

The proposed research uses the Technology Acceptance Model (TAM) theory that provides an insight into how users start using new technology. As explained by TAM theory, perceived ease of use and usefulness are the major factors contributing towards the acceptance and usage of technology (Davis, 1989). For example, in the case of chatbots, customers will be encouraged to use chatbot services only when they feel convenient and useful for solving problems.

Further, Expectation Confirmation Theory (ECT) theory also provides support for the current study because it states that customer satisfaction depends on the gap between expectation and experience of service performance. Therefore, customers' satisfaction level will rise up when expectations about chatbot performance have been met or exceeded