What Is Electronic Banking

Published Date: 02 Nov 2017

INTRODUCTION

1.0 BACKGROUND OF STUDY

Today, banking is an Industry in change. It is continually becoming something new-opening new services and developing new products leading to the introduction of innovative products that transforms the manner in which business is conducted and make business environment competitive. This change in function and form is tagged as the banking revolution. The very premise on which banks survive in this competitive world is basically to constantly undergo change in line with the requirements of the customers. The banking industry is constantly responding to changes in customer preferences and needs. Increasing competition from non-bank financial institutions, changes in demographic and social trends, information technologies advances, channel strategies. The increasingly competitive environment in the financial service market has resulted in pressure to develop and utilize alternative delivery channels. In the search for sustainable competitive advantages in the competitive and technological financial service industry, banks have recognized the importance to differentiate themselves from other financial institutions through distribution channels. Among the more recent delivery channels introduced is electronic banking simply or simply e-banking.

E-banking has been defined by Pearce and Robinson (2009) as banking by which individuals transfer funds, make account balance enquiries, pay bills and manage such assets as stocks online. E-banking is also defined to include the provision of retail and small value banking products and services through electronic channels as well as large value electronic payments and other wholesale banking services delivered electronically. (BIS-EBG, 2003)

The advent of Information and Communications Technology has led to the proliferation of electronic-based banking products as an alternative channel for routing banking services to customers. The Ghanaian banking industry not to be left out in this new challenge has been undergoing rapid changes as a result of technological innovation, increased awareness and demands from customers. Most banks in Ghana are also adopting e-banking systems which are the state-of-the-art and are making huge investments in technology to maintain and upgrade their existing infrastructure in order not only to provide new electronic information based services, but also to outdo their competitors and Guarantee Trust Bank prides itself as the best in this field evidenced by their award for Best Bank in IT / Electronic Banking during the 2010 Ghana Banking Awards.

In the current competitive banking environment, customers have become more sophisticated with increase expectation of banking services. The minimum level of service they are willing to accept as adequate service has gone up and in an attempt to meet customers’ expectations banks in the financial services sector are looking for ways to improve on customer satisfaction through the use of electronic banking products to reduce the time spent by customers at the banking hall which is a major expectation of customers. Customer satisfaction for the purposes of this study can be defined is a measure of how products and services supplied by a bank meet or surpass customer expectation. The aim of this study is therefore aimed at finding out ways Guarantee Trust Bank can use its electronic banking products to improve customer satisfaction.

1.1 STATEMENT OF THE PROBLEM

Advances in information technology have had an enormous effect on the development of more flexible transactional methods and more user friendly banking services by most banks worldwide. Traditional banking methods have given way to more modern ones built on current trends in information communication technology and customer needs and demands. Traditional banking services in Ghana hitherto were plagued by long queues; high transaction cost and time wasting which in the long run have adverse effects on business activities and eventually economic improvement. Delays in checking account balances, withdrawing cash, paying for goods and services and money transfers have been attributed to the high dissatisfaction amongst consumers of banking products and services.

Despite, a number of banks in Ghana offering electronic banking services to their customers as a way of differentiation to gain competitive advantage most Ghanaians are yet to come to terms with the benefits of technological advances made in the banking industry like networking of business branches, electronic transfers and use of various cards to access funds and pay for goods and services. There is still a low patronage of electronic banking products and services that are available because customers still heavily rely on the conventional ways of banking,

Ghanaians generally do not trust electronic banking as a safe means of dealing with the banks. They still prefer to be spoken with and treated with "a feel of human touch", making the technology-customer service interfaces a most challenging endeavor.

1.2 OBJECTIVES OF THE STUDY

The study seeks to evaluate and relate the impact of electronic banking products of Guarantee Trust Bank to their customer satisfaction. Specifically, the study seeks to:

1. Find out the nature of Electronic Banking Services offered at Guarantee Trust Bank Ghana

2. To determine the extent to which the banks Electronic Banking products contribute to their customer satisfaction

3. Identify the challenges and prospects of Electronic Banking in Guarantee Trust Bank Ghana.

1.3 RESEARCH QUESTIONS

The research addressed the following questions:

1. What are the types and characteristics of Electronic Banking Services offered by Guarantee Trust Bank Ghana (GTBank)?

2. What is the contribution of Electronic Banking in satisfying GTBank customers?

3. What are the challenges and prospects of Electronic Banking Services?

1.4 SIGNIFICANCE OF THE STUDY

The purpose of this study is to provide evidence on how electronic banking has been adopted by the customers of the bank and whether or not it has improved customer satisfaction in GTBank. The outcome of the research would be used by the bank to measure their current electronic banking products vis-à-vis what satisfaction their customers derive from it. It would also highlight areas of their e-services that should be maintained, improved or discarded. Furthermore, the study will also provide banks in the industry with an insight into how electronic banking services are impacting on customer satisfaction. It can also serve as a reference material for further research work on related topics.

1.5 SCOPE AND LIMITATION OF THE STUDY

The study was conducted at selected GTBank branches in Accra. The branches are Head Office, Graphic Road, Spintex and Airport. These branches were selected because of the extensive use of E-banking facilities and provide a diverse customer base. The study involved mainly customers and staff from these branches who use the E-banking facilities or products. The study laid emphasis on the contribution of E-Banking to customer satisfaction, with special emphasis on these selected GTBank

The problem of getting most customers to answer the questionnaire willingly was envisaged. However, this would be mitigated by informing the customers of the need to improve these services with their inputs. Another limitation of the study lies in the fact that the use of the selected branches might not reflect the overall outlook of customer satisfaction situation in the entire country. Time and resource constraints also limited the study

1.6 ORGANISATION OF THE STUDY

The research report is organized into five chapters:

Chapter one focuses on the background of the study, problem statement, objectives and justification of the study. In chapter two, a range of literature on E-banking and customer satisfaction was reviewed is outlined here. Chapter three, goes into detail of methodology employed to achieve results was. It includes the study design, sampling, sampling technique and data analysis. Chapter four contained results and discussion from the study supported with findings from other research works. Chapter five then focuses on the findings, conclusions drawn and recommendations of the study.

CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

This chapter is a presentation of a wide-ranging evaluation of previous studies conducted on e-banking. A number of significant areas that will give clear understanding to this study will be offered in this chapter.

2.1 WHAT IS ELECTRONIC BANKING

Singh and Malhotra (2004) defined e-banking as the deployment of banking services and products over electronic and communication networks directly to customers. Bankersonline.com also defines E-banking as a service that allows customers to use some form of computer to access account-specific information and possibly conduct transactions from a remote location such as at home or at the workplace. Such transactions may include traditional ones, such as opening a deposit account or transferring funds among different accounts, and new banking services, such as electronic bill presentment and payment.

According to Boateng R. (2006) Significant differences exist among banks in terms of their e-banking capabilities. These differences can take two main dimensions. The first is the use of electronic channels and the second is the sophistication of banking services delivered over an electronic channel. Many established banks in developed countries began with ATMs and evolved through Personal Computer-banking, Telephone-banking, Internet-banking, TV-banking, and Mobile-banking.

In terms e-banking services sophistication, this ranges from one way information-push services where customers receive information about the bank, its products and services to information-download where customers can download (or ask in case of telephone-banking) account information and forms to full-transaction services where customers can perform most banking transactions (such as transfer between accounts, bill payment, third party payment, card and loan applications, etc) electronically (Singh and Malhotra, 2004).

2.2 BRIEF BACKGROUND TO THE EVOLUTION OF ELECTRONIC BANKING

In the world of banking, the development in information technology has had an enormous effect on development of more flexible payment methods and more- user friendly banking services. Electronic banking services are new, and the development and diffusion of these technologies by financial institutions is expected to result in a more efficient banking system. This technology offers institutions alternative or non-traditional delivery channels through which banking products and services can be delivered to customers more conveniently and economically without diminishing the existing services level.

In Sub-Saharan Africa, developments in information and communication technology are radically changing the way business is done. These developments in technology have resulted in new delivery channels for banking products and services such as Automated Teller Machines (ATMs), Telephone Banking, PC-Banking, and Electronic Funds Transfer at Point of Sale (EFTPoS)

In Ghana, the earliest forms of electronic and communications technologies used were mainly office automation devices. Telephones, telex and facsimile were employed to speed up and make more efficient, the process of servicing clients. For decades, they remained the main information and communication technologies used for transacting bank business.

Later in the 1980s, as competition intensified and the personal computer (PC) got proletarian, Ghanaian banks begun to use them in back-office operations and later tellers used them to service clients. Advancements in computer technology saw the banks networking their branches and operations thereby making the one-branch philosophy a reality. Barclays Bank

(Gh.) and Standard Chartered Bank (Gh.) pioneered this very important electronic novelty, which changed the banking landscape in the country.

Arguably, the most revolutionary electronic innovation in this country and the world over has been the ATM. In Ghana, banks with ATM offerings have them networked and this has increased their utility to customers. The Trust Bank Ghana, in 1995 installed the first ATM. Not long after, most of the major banks began their ATM networks at competitive positions. Ghana Commercial Bank started its ATM offering in 2001 in collaboration with Agricultural Development Bank. About 7 banks currently operate ATMs in Ghana. The ATM has been the most successful delivery medium for consumer banking in this county. Customers consider it as important in their choice of banks, and banks that delayed the implementation of their ATM systems, have suffered irreparably. ATMs have been able to entrench the one-branch philosophy in this county, by being networked, so people do not necessarily have to go to their branch to do some banking.

Another technological innovation in Ghanaian banking is the various electronic cards, which the banks have developed over the years. The first major cash card is a product of Social Security Bank, now Societe Generale SSB, introduced in May 1997. Their card, "Sika Card‟ is a value card, onto which a cash amount is electronically loaded. In the earlier part of year 2001 Standard Chartered Bank launched the first ever debit card in this country. Its functions have recently been integrated with the customers ATM cards, which have increased its availability to the public since a separate application process is not needed to access it. A consortium of three (3) banks (Ecobank, Cal Merchant Bank and The Trust Bank) introduced a further development in electronic cards in November 2001, called "E-Card‟. This card is online in real time, so anytime a client uses the card, or changes occur in their account balance, their card automatically reflects the change.

Though ATMs have enjoyed great success because of their great utility, it has been recognized that it is possible for banks to improve their competitive stance and profitability by providing their clients with even more convenience. Once again ICT was what saved the day, making it possible for home and office banking services to become a reality. In Ghana, some banks started to offer PC banking services, mainly to corporate clients. The banks provide the customers with the proprietary software, which they use to access their bank accounts, sometimes via the World Wide Web (WWW). This is on a more limited scale though, as it has been targeted largely at corporate clients. Ghana Commercial Bank, Ecobank (Gh.) Ltd, Standard Charted Bank (Gh.) Ltd. and Barclays Bank (Gh.) Ltd and Stanbic Bank (Gh.) are the main banks known to offer PC banking services.

Banks have recognized the internet as representing an opportunity to increase profits and their competitiveness. Currently, Ecobank Ghana Limited is offering internet banking (i-banking) in Ghana however; some have well laid plans to start. Standard Charted Bank (Gh.) Ltd. and Barclays Bank (Gh.) Ltd, also have plans for doing so in the not-too-distant future.

2.3 CHARACTERISTICS OF E-SERVICES

Service management is commonly considered more difficult and complex, because of the problems created by unique service characteristics, such as intangibility, inseparability, heterogeneity, and perishability. More specifically, a service depends to some extent on the interaction between the service provider and the customer (Rahman, 2004).

In addition to the usual characteristics of traditional services, the characteristics of eservices are influenced by the nature of the Internet as a transaction channel, with specific characteristics like quick access and transfer of information; lack of space and time barriers, ease of comparison between various objects, events or organizations; interactivity and flexibility (Chaston, 2001).

The fact that the services are delivered over the Internet creates challenges to service providers.

To begin with, the face-to-face contact between service providers and customers is missing and secondly, how the service is delivered is completely changed. When it comes to e-services, websites become crucial for communication and interaction between service providers and their customers. Consequently, the website (user-interface) decides to a large extent how the service is delivered to the customers. What the company has to offer and how the offer is presented is both evaluated by the customer. Due to the lack of personal interaction with customer contact employees, the user interface is what customers of eservices interact with, and as such it can be expected to influence their evaluation of the overall service quality Grönroos,2000).

2.4 FORMS OF ELECTRONIC BANKING PRODUCTS AND SERVICES OFFERED BY GUARANTY TRUST BANK GHANA

Guarantee Bank Ghana as a bank which prides itself as technologically driven offers various E-banking services among which include;

2.4.1 INTERNET BANKING

This is a reliable and flexible way for customers to manage their finances efficiently and conveniently. By a simple click on the internet banking button on the banks on the home page www.gtbghana.com one can have access to this platform. The features and convenience of the internet banking application include;

Account Balance& Transaction Inquiry that is checking balances and account activity. The customer can also print their statement of accounts

Own and Third Party Transfers. This allows the customer to transfer funds between their own accounts and any other GTBank customer account

Cheque confirmation. This feature allows the customer to confirm cheques issued. This are then captured in the banks data base and the said cheques honoured as and when they are presented.

Make standing orders, Bank Drafts request, and Cheque Book request can be conveniently done without going to the bank from anywhere.

To start have access to GT Banks Internet Banking the customer must first have an account at Guaranty Trust Bank. The customer can download the application form from the homepage or by visiting any branch to fill a form. The completed form can be submitted to the nearest branch office. The customer would then be profiled on the Internet Banking Service and an email welcoming them to the service will be sent to their mail box containing instructions on how to log into the service.

2.4.2 SMS BANKING

At Guaranty Trust Bank a cell phone is not just a cell phone any more. It is your account manager in your palms and can be used to monitor account activities anytime and anywhere. With GTBank’s SMS Banking, one can

View their account balance(s)

Track transactions on their account(s)

Transfer funds between customers accounts

Transfer funds to another GTBank account

The benefits of this service include safety and convenience that is it saves the customer the time and effort of going to our branches, it is cost effective, the customer can enjoy several banking services and the service is available 24 hours a day. To use this service new customer should visit a branch for an application form. A given internet banking user ID and pass-code would be used to access this service. The customer then sends an SMS to a designated number for the required service. A response would be sent to your phone providing the required instructions. Transactions can only be performed registered phones.

2.4.3 ATM BANKING SERVICES

The GTBank ATM Service is a self-service electronic channel that allows customers to access their account information from ATMs (automated teller machines) and perform basic banking transactions quickly, safely, and conveniently without visiting the banking halls. Services available include:

24 hour cash withdrawals (with daily limits set by the bank)

Account balance enquiries

Mini-statement printing (for last ten transactions)

Funds transfers (between own accounts )

PIN change (only available at Guaranty Trust ATMs)

The benefits of this service include round-the-clock access to cash, unlimited access to your account information and access to ATMs of other banks on the VISA network

2.4.4 SLIP-FREE BANKING

The Guaranty Trust Slip-free process is a service that offers convenience. It is an innovative process that takes the burden of filling withdrawal or deposit slips away from the customer thereby reducing the time customers spend in the banking hall.

2.4.5 CHINA UNION PAY CARDS

GTBank as a way of reaching out to its cherished Chinese customers configured its ATMs to accept China UnionPay Cards. Chinese residents in Ghana, travelers, students and businessmen and women with China UnionPay cards can now use any GTBank ATM at all times to withdraw cash and check their account balances

2.4.6 GUARANTY TRUST ELECTRONIC NOTIFICATION SYSTEM (GENS)

Guaranty Trust Electronic Notification System (GeNS) is a new notification system, which provides customers with details of transactions on their account(s) via electronic mail and SMS. This is an innovation in customer service delivery is available to customers free of charge. One of the benefits of this service is that it gives customers prompt knowledge of transactions on their account(s), thereby enhancing their finance management and aids them in making their business and financial decisions. Other benefits include

Customers have updated position of their accounts at any point in time.

Offers convenience and easy monitoring of account for better management of finances.

Effective fraud alert in cases of unauthorized transactions on customer account.

Saves the time and energy of making calls or visits to the bank.

Payments made by distributors of businesses can be certified even without deposit slips.

Reduce time spent confirming customers’ payments.

Reduce crowd at your premises.

Enhances transparency between the bank and its clients.

No need to logon to the website or wait for printed activity reports to learn about new deposits.

2.4.7 GUARANTY TRUST MONEY TRANSFER (GTMT)

With the advocacy of trade liberalization in the West African sub-region there is the need to transfer money between nations with ease and speed. GTBank Ghana as part of their Orange brand mantra of Convenience, Anywhere, Anytime, banking services, the bank introduced the Guaranty Trust Bank Money Transfer (GTMT).

The GTMT is a web based platform on which customers and non-customers can receive or send money from GTBank subsidiaries in Ghana, Nigeria, Sierra Leone and The Gambia. With this new solution, the public can now transfer money conveniently at trusted locations with superior service levels to all GTBank locations in the West African Sub-region. This would thus increase mobility for trade, leisure, education and personal purposes within the various countries in West Africa. Customers and the general public can now conveniently transfer money from about 144 locations with ease and speed.

2.4.8 E-ZWICH CARDS & POINTS OF SALE

All GTBank (Ghana) Limited branches are on the E-zwich platform and perform various associated functions from enrolment to card transactions. The E-zwich smartcard is a new and very secure way of handling cash based on biometric (finger print) identification. The card can be used to perform various banking and retail functions which include cash withdrawals, payments for goods and services receiving salary and wage payments, money transfers as well as making bill payments from any E-zwich Point of Sale (POS) or ATM across the country.

2.4.9 GTBANK AUTOMATED PAYMENT SYSTEM (GAPS)

GTBank Automated Payment System (GAPS) is a web-based solution that facilitates the processing of payments in batches using a secure connection over the internet. The features and benefits include the provision of an efficient means of effecting payments to contractors, vendors, suppliers, employees of companies. It is an excellent information resource providing online real-time account monitoring. It also provides instant value to GT Bank’s beneficiary account holders and also improves transaction processing time.

2.4.10 GTBANK VISA CARDS

Guaranty Trust Bank Visa Card is a range of Visa Classic and Visa Electron Chip Debit Cards tailored to suit every lifestyle. Visa Gold Card, Visa Electron International, Visa Electron Domestic and Students Discount Visa Cards are the four main types of cards offered by the bank.

Chip cards or ‘Smart cards’ are the latest technology in payment cards, making electronic payment very secure, faster and more flexible. Smart cards carry a microchip, which gives it that enhanced security feature which makes it nearly impossible to be skimmed by fraudsters. In addition, the data contained on a smart card is encrypted, preventing unauthorized access to personal account information thus giving cardholders peace of mind.

The Visa Gold Card is one of Visa International's premium cards issued to High Net worth Individuals with exclusive life styles. Gold symbolizes quality and prestige as well as Convenience and choice.

The GTBank Visa International Card is a Visa Electron chip Card issued to professionals and business executives who travel outside the country. Payment for hotel bills, air tickets and general purchases can be made by the Visa Card. This card can be used on any Visa Branded ATM or Point of Sale Terminal worldwide.

The GTBank Visa Electron Domestic Card is a debit card uniquely designed for usage only in Ghana. It is the fastest and safest way to get cash from any Visa ATM and make payment for goods and services at any merchant location displaying the Visa logo nationwide.

Students Discount Visa Card are discount cards with Visa enabled functions which allows for usage on all Visa ATMs and POS in the country. Holders of the Student Discount Card are entitled to great discounts at a number of merchant outlets including clubs, clothing shops, eateries, bus terminals, and supermarkets.

The benefits of GTBank Visa Cards include;

Its wide acceptance: Cards are accepted on over 11,000 Visa ATMs and 22million Visa Point of Sale Terminals worldwide, for payment of goods and services (excludes Visa Domestic Cards).

Greater Security: Cards are chip based with all cardholder information encrypted. A transaction can only be authorized with the correct PIN. This restricts unauthorized use of your Visa card

Convenience: Cash withdrawal and other ATM transactions can be made at any time of the day offering you 24hr access to your money

Extremely Simple: it is simpler than writing a cheque or making payment with cash

Funds Transfer: Transfer of money can be made from one GTBank Visa card to another or in between accounts if the card is linked to two or more accounts.

Record Keeping: Each purchase or withdrawal is recorded automatically on customer’s monthly bank statement, helping cardholders track and manage their expenses.

Verified by Visa (VbV)

As part of GT Bank’s quest to protect its valued customers against online fraud, a new addition to the visa family has been employed. Verified by Visa (VbV) is an online program designed to make Internet purchase transactions safer by authenticating a cardholder’s identity at the time of purchase.

VbV is to create a level of consumer trust and confidence in online shopping similar to that in the physical shopping environment, as the card cannot be used without the PIN. This means that misplaced, stolen or cloned GTBank VISA Cards with VbV cannot be used to make online purchases by anyone who does not know a cardholder’s secret VbV PIN.

To get onto the platform, registration can be done by requesting for a VbV Personal Identification Number (PIN) at any of our branches or by e-mailing [email protected] for configuration. The service is applicable to internet sites that require VbV for online payments. And the benefits of VbV include effectively improves the security of online transactions, increases consumer confidence in online purchase, reduces number of disputes and card fraud activity and protect the customer and the bank from cost of fraudulent transactions.

G-CASH

G-Cash is a service that enables the customer to transfer funds to any beneficiary throughout the country. Beneficiaries can receive cash /draft at any GT Bank’s branch locations. The features of this service are; G-Cash is a money transfer service denominated in Ghana cedis, A maximum of GHS 10,000.00 is allowed per transfer and a valid identification is required.

Benefits are; Instant access to cash nationwide, transfer of funds to family, friends and business associates, transfer of funds ahead of a domestic business trip/ holiday, eliminates the risk of travelling with cash and it is fast, reliable and convenient way of paying for goods and services.

To asses this service a customer must visit any of our branch locations nationwide. Complete the required form and add a valid identification. Hand over the completed form and ID together with the amount of money you want transfer. A designated teller would issue the customer with a receipt which must have the document number, answer to a test question and the paying branch (provided by the sender) which should be communicated to the beneficiary.

To receive money, the beneficiary visits any of our branch locations nationwide specified by the sender. And completes a claim form and adds a valid ID. The teller will then give you the money together with a copy of the receipt.

Master Card

The GTBank Debit MasterCard is an international payments card, issued in partnership with MasterCard Worldwide to enable our customers withdraw cash from over 1.5 Million Automated Teller Machines (ATMs), pay for goods and services at MasterCard labelled Point of Sale (POS) Terminals worldwide as well as make payments on the Internet

The Card is directly linked to a customer’s current or savings account thus all transactions done using this card are reflected on the account instantly in real time.

GT Bank with its strategic alliance with the world’s leader in payment brands is able to also accept other MasterCard brands including Maestro and Cirrus Cards on all its ATMs and POS terminals across the country

2.5 THE BENEFITS OF E-BANKING

There are different categories within the advantages of e-banking.

Firstly, e-banking provides convenience. This word refers to the capital, labor time and all the resources needed to make transactions. With e-banking, one can bank from any location that has an Internet connection. It is possible to work offline thanks to a bank program or personal finance software after downloading account information. Moreover, one has access to the account 24 hours a day and 7 days a week and online banking is more cost- effective for banks, which in turn results in lower fees for customers (SCN Education B.V., 2001b).

Secondly, e-banking provides confidence, which refers to the trust that parties have in the transactions that generate risks. Nowadays, all websites use up-to-date technologies, which secure all transactions and protect the privacy of both suppliers and customers. Moreover, with e-banking, the customers have control. That means that you are in command of your money, you can do what you want in little time, you can review your bill without asking an employee, and it is possible to set up electronic bill payments (SCN Education B.V., 2001b).

Finally, with e-banking, it is easy to make transactions. Indeed, through e-banking, you can see which checks have cleared, you can monitor your account in real time and make withdrawals, deposits, ATMs, debit card purchases, and you can transfer funds from one account to another (SCN Education B.V., 2001b).

2.6 DISADVANTAGES OF E-BANKING

Nevertheless e-banking has some drawbacks. Firstly, the customers have to have access to a personal computer with an Internet connection. That means that the access to the bank account depends on technology. Further on, online banking is subject to the reliability of web servers and other computers. If they crash the clients cannot access their cash (SCN Education B.V., 2001b).

Moreover, the consumers have to know how to use a computer. There are always people who do not know how to use a computer and who are afraid by new technologies i.e. old people. They prefer so far to talk face-to-face (SCN Education B.V., 2001b). Finally, if the customers ever change banks, they may have to switch software. They will have to re-enter all their old account information into a new program, which could be very time consuming (SCN Education B.V., 2001b)

Williams (2011) also outlined the following challenges with electronic banking.

Internet Connection

Not everyone enjoys the luxury of having a stable and fast Internet connection at home. Aside from having a personal computer or laptop, having stable Internet access at home is a basic prerequisite to performing electronic banking. Of course, people can always use a public computer with Internet access; however, the security of public computers is always a concern.

Computer Know-How

Conducting a successful electronic banking transaction, like paying bills online, requires basic computer skills and knowing your way around the Internet. Being computer-literate is not common to everyone especially seniors who might not have grown up using computers and this is a major disadvantage to electronic banking.

Delayed Statements

When performing online banking there is not a standard at which payments made will show up on your online bank statements; they might show up two to three days later, depending upon the bank. When banking in person, you can generally get the exact status of your bank account.

Security Concerns

One of the biggest disadvantages of doing electronic banking is the question of security. With the prevalence of key loggers, phishing emails, Trojans and other online threats, it is natural for people to be concerned with the security of their identity, funds and electronic banking transactions. Using antivirus and similar programs is not full-proof. People worry that their bank accounts can be hacked and accessed without their knowledge or that the funds they transfer may not reach the intended recipients. Although it is rare nowadays with enhanced security measures, these threats still exist.

Loss of Human Touch

Some people still value talking and interacting with bank tellers, managers and other bank clients. Electronic banking takes the majority of these "human interactions" away, leaving the banking experience as a very hands-off, impersonal process

2.8 WHO IS A CUSTOMER?

A customer is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration. Customers are generally categorized into two types: An intermediate customer or trade customer who is a dealer that purchases goods for re-sale and an ultimate customer who does not in turn re-sell the things bought but either passes them to the consumer or actually is the consumer. (www.wikipedia.org)

For a bank, a customer is a person who is utilizing one or more of the services provided by the bank. A customer is a person through whom the bank gets an opportunity to make an earning in return to the service they can provide the customer with.

Tennant (2001) iterates that in the world of customer service customers are categorized more often into two classes; an external customer of an organization is a customer who is not directly connected to that organization and an internal customer is a customer who is directly connected to an organization, and is usually (but not necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or shareholders, but the definition also encompasses creditors and external regulators.

In general terms a customer can also be defined as a person or organization that a marketer believes will benefit from the goods and services offered by the marketer’s organization (knowthis.com, 2012). As this definition suggests, a customer is not necessarily someone who is currently purchasing from the marketer. In fact, customers may fall into one of three customer groups:

Existing customers consists of customers who have purchased or otherwise used an organization’s goods or services, typically within a designated period of time. Existing customers are by far the most important of the three customer groups since they have a current relationship with a company and, consequently, they give a company a reason to remain in contact with them. Additionally, existing customers also represent the best market for future sales, especially if they are satisfied with the relationship they presently have with the organization. Getting existing customers to purchase more is significantly less expensive and time consuming than finding new customers mainly because they know and hopefully trust the organization and, if managed correctly, are easy to reach with promotional appeals

Former customers consist of those who have formerly had relations with the organization typically through a previous purchase or transaction. However, the organization no longer feels the customer is an existing customer either because they have not purchased from or transacted business with the organization within a certain time frame or through other indications. The value of this group to an organization will depend on whether the customer’s previous relationship was considered satisfactory to the customer or the organization. A former customer who felt they were not treated well by the organization will be more difficult to persuade to buy again compared to a former customer who liked the organization but decided to buy from another organization who had a similar product that was priced lower.

Potential customers the third category of customers includes those who have yet to purchase but possess what the organization believes are the requirements to eventually become existing customers.

2.9 CUSTOMER SATISFACTION

Customer satisfaction is a measure of how products and services supplied by a company meets or surpasses customer expectation. It is seen as a key performance indicator within business. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and service to service. The state of satisfaction depends on a number of both psychological and physical variables

In the consumption context as "the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with the customers prior feelings about the consumption experience (Oliver ,1980)

With the current changes in the functional orientation of banks, the purpose of banking is redefined. The main driver of this change is changing customer needs and expectations.

A comprehensive understanding of how to satisfy and delight customers can propel companies to higher and more consistent levels of satisfaction, stronger loyalty, and greater revenue. Accordingly, satisfaction and loyalty measurement must provide a system of feedback for management, dialed in on the following integral components:

Customer wants, needs, and concerns;

Relationship of the company with its customers relative to competitors; and

Impact of satisfaction and loyalty on company sales or revenue.

To provide value to customers an organization needs some essential components that reliably create customer satisfaction. They include a perfect product or service, delivered in a caring, friendly manner, on time (as defined by the customer) and with the backing of an effective problem-resolution process

2.10 BUILDING BLOCKS OF SATISFACTION

According to Kotler, the definition of customer satisfaction is 'the level of a person's felt state resulting from comparing a product's perceived performance (or outcome) in relation to the person's expectations.

Satisfaction is dependent on many factors, such as, the quality of tangible facilities; the responsiveness and empathy of staff to customer needs and requests; the consistency of the service quality; the accuracy of information provided; and the location of the facility.

Ghobadian, Speller and Jones (1994) stated that quality in a service business is a measure of the extent to which the service delivered meets the customer‟s expectations. The nature of most service is such that the customer is present in the delivery process, which means that the perception of quality is influenced not only by the service outcome but also by the service process. The perceived quality lies along a continuum. Unacceptable quality lies at one end of this continuum, while ideal quality lies at the other end.

2.11 CUSTOMER EXPECTATIONS OF SERVICES

Customer expectations are beliefs about service delivery that serve as standards or reference points against which performance is judged. Modern day customers compare their perceptions of performance with these reference points when evaluating service quality, thorough knowledge about customer expectations is therefore critical to services marketers. Knowing what the customer expects is the first and possibly most critical step in delivering good quality service.

Among the aspects of expectations that need to be explored and understood for successful services marketing are: what types of expectation standards do customers hold about services, what factors most influence the formation of these expectations, what role do these factors play in changing expectations and how can banks as a service company meet or exceed customer expectations. Being wrong about what customers want can mean losing a customer’s business when another company hits the target exactly. Being wrong can also mean expending money, time, and other resources on things that do not count to the customer. Being wrong can even mean not surviving in a fiercely competitive market."

According to Teas (1993) customer expectations can be categorized into five distinct layers namely; Ideal expectations or desires, normative ‘should’ expectations, experience based norms, acceptable expectations, minimum tolerable expectations

For the purpose of this discussion we shall concentrate on only two levels namely desired service and adequate service.

1. Desired Service is defined as the level of service the customer expects to receive, that is, the "wished for" level of performance. Desired service is a blend of what the customer believes "can be" and "should be". For example, customers who sign up for a computer dating service expect to find compatible, attractive, interesting people to date, and perhaps even someone to marry. The expectation reflects the hopes and wishes of these consumers, without which, they would probably not purchase the dating service.

2. Adequate Service is the level of service the customer will accept. Adequate service represents the "minimum tolerable expectations", the bottom level of performance acceptable to the customer, and reflects the level of service customers believe they will get on the basis of their experience with services.

According to Balaji (2002), there are other types of expectations which are value-based, comparative and normative expectations. Comparative expectations refer to the performance levels anticipated for the service derived from experiences with competing services. Normative levels of expectations are based on brand names, that is, a well known brand may be expected to perform better than one that is lesser known. On the other hand, value-based expectations depend on a "worth what is paid for" analysis, that is, the performance expectations of a service depend on its price.

2.12 THE ZONE OF TOLERANCE

Services are heterogeneous in that performance may vary across providers, across employees from the same provider, and even with the same service employee. The extent to which customers recognize and are willing to accept this variation is called the zone of tolerance as explained by Zeithaml, Berry and Parasuraman.

Figure 1: Zone of Tolerance

Desired Service

Zone of Tolerance

Adequate Service

If service drops below adequate service – the minimum level considered acceptable, customers will be frustrated and their satisfaction with the company will be undermined. If service performance is higher than the zone of tolerance at the top-end where performance exceeds desired service, customers will be very pleased and probably quite surprised as well. The zone of tolerance can be described as the range or window in which customers do not particularly notice service performance. When it falls outside the range (either very low or very high), the service gets the customer’s attention in either a positive or negative way.

2.13 CUSTOMER PERCEPTION OF SERVICES

According to the businessdictionary.com, customer perception is marketing concept that encompasses a customer's impression, awareness and/or consciousness about a company or its offerings.

Strydom, Jooste and Cant also define them as the process of receiving, organizing an assigning meaning to information or stimuli detected by the customer’s five senses.

According to ZeIthaml and Bitner (2000), customer perceptions of service are subjective assessment of actual experiences. Customers perceive services in terms of the quality of the service and how satisfied they are overall with their experiences. Quality and satisfaction are the main determinants of customer perceptions of service. In the view of Zeithaml and Bitner, customers perceive services in terms of quality of the service and how satisfied they are overall with their experiences. Perceptions are formed during service encounters or the „moments of truth‟. Service encounters are when services are produced and consumed while „moments of truth are the periods or minutes the service is encountered or produced or consumed.

As explained by Parasuraman, Berry, and Zeithaml (1991), the expected service quality may not be answered because of constraints, thus, the perceived service for customers can be different from what expected. They stated that "In short, a variety of factors – resource constraints, market conditions, and/or management indifference may result in discrepancy between management perceptions of consumer expectations and the actual specifications established for a service.

This discrepancy is predicted to affect quality perceptions of customers.

2.14 OUTCOMES OF SATISFACTION

Figure 2: Outcomes of Satisfaction

Reduced Price Sensitivity

CUSTOMER SATISFACTION

Increased Profit

Increase Revenue/ Reduced Cost

Reduced Switching to Competitors

Increased Referrals

Increased Repeat Purchase

Source: http://www.surevista.com/benefits-customer-satisfaction

Price sensitivity is defined as the consciousness of the customers to cost windows or range within which they make dealings. All the customers are always cost sensitive and concentrate basically to buy products or services at cheap rates. However, cost sensitivity of a customer substantially depends on condition of the market or the type of service been rendered them. Thus a customer who is satisfied with a service rendered them would be willing to pay any price to get the service.

Satisfied customers are also less likely to switch to competitors. They already enjoy the best thus see no need to start afresh elsewhere. This ultimately also leads to more referrals or word of mouth marketing. A satisfied customer would willingly recommend another customer to the bank based on the quality service they have been offered. They would therefore continually patronize the service which eventually translates into more revenue and reflects in the bottom line as profit.

2.15 CHAPTER SUMMARY

The chapter reviewed existing literature on related topics. It began with the meaning of electronic banking, evolution of electronic banking and types of electronic banking. This was followed by the forms of electronic banking, benefits of electronic banking, the disadvantages of electronic banking and electronic banking products in Ghana. The chapter also reviewed who a customer was, meaning of customer satisfaction, antecedents and building blocks of customer satisfaction, customer expectation of service, customer perception of service and the outcome of customer satisfaction

CHAPTER THREE

METHODOLOGY

3.0 INTRODUCTION

According to Saunders et al., (2007) research methodology is the technique and procedures used to obtain and analyze research data. This chapter discusses the processes and techniques used in carrying out the study. It also gives a description of the respondents including information on the study population, the number of respondents and how they were selected. It also provides an outline of research design and the instruments for data collection. The methods adopted in the administration of the research instrument, data collection procedure, data analysis and measures used to ensure validity of the instrument used.

3.1 RESEARCH DESIGN

The researcher used a case study design because the research was limited to only GT Bank. However, the study was a single cross-sectional since data was collected from sample population elements only once. The study was also exploratory because the researcher tried to find out which electronic banking products or services customers patronized very much and whether they were satisfied with the quality of the service being provided by the bank.

3.2 POPULATION

The population of the study is made up of all customers of four branches of GT Bank within the Accra metropolis who patronize the banks electronic products. The four branches are the Head Office, Spintex Road, Airport and the Graphic Road branches. These four branches were used for the study since they have large number of customers who use electronic banking products/services.

3.3 SAMPLE AND SAMPLING TECHNIQUE

The sample was chosen from the four branches (Head Office, Spintex Road, Airport and the Graphic Road branches). A total of three hundred (300) questionnaires were sent to the branches; thus seventy five (75) questionnaires per branch. However, not all the questionnaires were returned. Two hundred questionnaires were returned representing 90% customer response rate.

3.4 SOURCES OF DATA

Two sources of data were used in conducting the study. These are primary and secondary sources. The primary source of data was obtained through a survey. The data was obtained from a survey of seventy five customers each from the selected branches of the bank in Accra. The secondary data was obtained from the bank’s business intelligence reports.

3.5 INSTRUMENTS OF DATA COLLECTION

Two main instruments were used to collect data for the study. These are questionnaire and interview. The questionnaire was used to collect data from the banks customers within the Accra metropolis. The items were designed after carefully reviewing literature which specified variables of interest for the study. After careful scrutiny by the supervisor, the questionnaire was administered to the customers at the four branches over a period one month. Permission was earlier sought from the branch managers before administering the questionnaires.

3.6 METHOD OF DATA ANALYSIS

The study used both qualitative and quantitative analysis. Before the quantitative analysis, data collected was sorted, edited, coded and entered in the software. The analytical instrument for this study was Microsoft Excel. This software has been widely used by researchers as a data analysis technique. The interview was also recorded, transcribed and analyzed qualitatively to draw conclusions from the findings.

3.7 ORGANIZATIONAL PROFILE

Guaranty Trust Bank (Ghana) Limited, Bank of the Year for two consecutive years in 2009 and 2010, was registered in Ghana in October 2004 and obtained its universal banking license from the Bank of Ghana on 23rd February, 2006, thereby paving the way for the commencement of operations.

The Bank is a subsidiary of Guaranty Trust Bank Plc, one of the foremost banks in Nigeria with a Triple A rating; the first indigenously owned sub-Saharan bank to be quoted on the London Stock Exchange. In 2008, GTBank Plc became the first new generation indigenous African bank to obtain a banking license to carry out fully fledged commercial banking activities in the United Kingdom.

GTBank Plc, currently owns 95.72% of the issued share capital of Guaranty Trust Bank (Ghana) Limited, with Nederlandse Financierings-Maatschappij Ontwikkelingslanden N.V. (FMO) holding 2.14% and Alhaji Yusif Ibrahim, a Ghanaian business entrepreneur, holding the remaining 2.14%. Presently, Guaranty Trust Bank (Ghana) Limited’s shareholder’s funds is in excess of GHS104 million, thus, providing the Bank with a competitive advantage in terms of business capacity and the readiness to handle relatively big-ticket transactions.

Due to its consistency in building a strong, profitable and respectable brand in Ghana, GTBank within the six years of its operations in the country, has grown to become a reference point for good business practice and a role model in the financial services industry.

The Bank is built on the strengths of its staff, its structures, policies and procedures. As a principle and due to its preparedness to invest and develop the country’s human capital, all of its staff members totaling 526 are Ghanaian except three Nigerians. The Bank also has an open door policy, thus reinforcing an informal atmosphere that breeds a feeling of equality. Everyone is accessible and approachable, working in open offices alongside their colleagues. In addition, we have a flat organizational structure that engenders effective communication and prompt decision-making.