i SCHOOL OF POSTGRADUATE STUDIES UNIVERSITY OF LAGOS This is to certify that the Thesis: E-Banking Service Delivery and Customer Satisfaction in Selected Commercial Banks in Lagos State, Nigeria. Submitted to the school of postgraduate studies for the award of DOCTOR OF PHILOSOPHY is a record of original research carried out by Author’s Name …………………………. Sign………… 1st Supervisor ……………………... Sign…………………. 2nd Supervisor……………………………. Sign…………………. 1st Internal Examiner……………………….. Sign…………………. 2nd Internal Examiner………………………... Sign…………………. External Examiner…………………………….. Sign…………………. SPGS Representative…………………………… Sign…………………. ii CERTIFICATION I certify that this Thesis was carried out by Bakare, Rasaki Dayisi with matriculation number 019023274 in the Department of Business Administration, University of Lagos, Akoka, Yaba. ………………………………. ………………………. Prof. B.E.A. OGHOJAFOR Date 1st Supervisor ………………………………. ………………………. Dr. Ayo Oniku Date 2nd Supervisor ………………………………. ………………………. Prof. O.L. Kuye Date Head of Department iii DEDICATION I dedicate this thesis to Almighty Allah for his mercies on me all through the sojourn of this academic pursuit. I also dedicate this work to my parents Prince Lateef Adetola Bakare and my mother Mrs. Kehinde Bakare for their unflinching support despite being educationally uncertified.To my wife Balquis Ashabi Adetutu who permitted me to stay away from home to complete this programme and my children Aminat, Ikhmat, Balquis Ayomikun, Anjolaoluwa Soliat, Isay thank you so much. iv ACKNOWLEDGMENTS I hereby express my profound gratitude to all who have at one time or the other contributed to the successful completion of my Ph. D degree programme. My profound gratitude goes to my supervisors Prof. B.E.A. Oghojafor and Dr. Ayo Oniku for their support to get me this far. Only the good Lord can help me thank you. May I use this opportunity to thank the following people Dr. P.K.A Ladipo (PG Co- ordinator), Prof. O.L kuye (HOD),Dr. Femi Olayemi, Mr. Charles Omoera, Dr. Patrick Okonji, Miss Adedoyinsola Sonuga, Dr.Olusanya, Mr. Banatunde Akeem (coach), Dr. Sogunro,Dr. Uche Onakala, Dr. A,A Sulaimon, Dr. Akintunde, Dr. Dixon- Ogbechi, Dr. Gbadamosi, Dr. GaniyuRahIm, Dr Adekoya Sola,Mrs. Ifeoma Duru Mr Babajide Ogunmayi, MrsTashie Gladys…Alumni Executives F.C.E (T) Akoka, especially Alhaji Alaba Olalekan, Segun Adegboyega (Origin), Collins, Superintendent Dapoetc. I wish to specially appreciate Dr.Elegbede Sikrullahi for his encouragement and support…LANGBASA… You are not my colleague but a brother from another mother.To Dr. Samuel Obinna Ojogbo, Hmm... Whenever I seem tired about the whole process, you always come up with instances that will get me energised. Samoliso…I thank you. Mr. Seyi Sode (Children). You always assist whenever I get stalked with my computer set. You painstakingly sourced for materials on my behalf. All of these I cannot forget. May the good Lord be with you. To MrOlufayo Thaddeus Ojo…Thank you so much for your encouragement. To Mr. Mesike Godson Chukwuwike, I thank you for your brotherly love. To Prof. Abdul Rasheed Ojikutu,Dr Akinwale Ayanfe, Dr. Ismaila Adeleke and Dr. Laolu Oluwafemi, whenever, i bring my thesis to you, you do justice to it with immediate effect. May Almighty Allah bless you on my behalf. Dr. Adedayo Badejo, you are a true friend. You v havebeen a good friend since our undergraduate days in Ogun state University, Ago iwoye. Thank you for all your encouragement. Waranja… I give this paragraph to you to actually thank you. I cannot finish thanking you because you are one in a million. Thank you so much Special thanks goes to my friends in Friends and Family caucus…. Idris Abiodun, kay, Mr. Yinka Soremekun, all peace, Martins, Yemi Honourable and other members of friends and family. To my wonderful friends Femi kumoluga, Segun Adedeyin, Onile (bariga), Damisi… Murphy, Obanikoro keep fit club members especially wallo, Idris Alera, Dauda, Azeez Barca… To my friend in Ikorodu West All Stars football Club; Fatai Balogun, ASP Nurein Usman, Jacob Jacob, Mr. Tola Balina, Kunle Lawal (Omo Alhaja), Sola Adedeyin, Martins(Police) and others. I say thank you so much My sibblings; Late Sikiru Adebowale Bakare (RIP) Solomon and wife, Oluwatoyin Tanwa Babatunde, Lekan and his lovely wiffy. Damilola, vi TABLE OF CONTENTS Pages Title Page i Certification ii Dedication iii Acknowledgements iv- ix Table of Contents x Abstract CHAPTER ONE: INTRODUCTION 1.1 Background to the Study 1 1.2 Statement of the Problem 6 1.3 Objectives of the Study 8 1.4 Research Questions 8 1.5 Research Hypotheses 9 1.6 Significance of the study 10 1.7 Limitation of the Study 11 1.8 Delimitation of the study 11 1.9 Operational Definition of Terms 12 CHAPTER TWO: LITERATURE REVIEW 2.1 Preamble 13 2.2 Theoretical Framework of the study 13 2.2.1 Technology Acceptance Model 14 2.2.2 Diffusion of Innovation Theory 15 2.2.3 Theory of Reasoned Action 17 2.2.4 Theory of Planned Behavior 18 2.2.5 The social cognitive theory 20 2.2.6 The Unified Theory of Acceptance and Use of Technology (UTAUT) 21 vii 2.3 Conceptual Framework 23 2.4 Review of Empirical Studies 27 2.5 Service Quality 31 2.5.1 E- Banking Service Quality 33 2.5.2 Measuring Electronic Service Quality 35 2.6 Concept of Customer Satisfaction 39 2.6.1 Satisfaction Formation and Measurement 43 2.6.2 E-service quality dimensions and customer satisfaction 45 2.7 Effective Service Quality Delivery, Customer Satisfaction and Organisational Performance: Cross Functional Analysis 50 2.8 Electronic Banking: An Overview 53 2.9 E-banking delivery channels 56 2.9.1 Main Alternative E-banking channels 57 2.9.2 Categories of ATM transactions 58 2.9.3 Electronic cards 59 2.9.4 Point of Sales (POS) Terminal 60 2.9.5 Mobile Banking 61 2.9.6 Telephone Banking 62 2.9.7 Internet Banking 62 2.10 Brief History of Banking Industry in Nigeria 64 2.11 Central Bank of Nigeria and Regulatory Measures on the Use E- Delivery Channels 65 CHAPTER THREE: METHODOLOGY 3.1 Preamble 68 3.2 Research Design 68 3.2.1 Research Philosophical Perspective 69 3.3 The Study setting 69 viii 3.4 Population of the Study 70 3.5 Sampling Procedure/ Techniques 70 3.6 Sample size Determination 73 3.7 Data Collection Instrument 73 3.8 Identification and Measurement of Variables 74 3.8.1 Instrumentation 75 3.8.2 Pilot Study 77 3.9 Reliability and Validity of the instrument 77 3.10 Methods of Data Collection 79 CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS 4.1 Introduction 81 4.2 Analysis of Questionnaire (Online survey) Distribution 81 4.2.1 Gender Distribution of Respondents 82 4.2.2 Age Distributions of Respondents 82 4.2.3 Marital Distributions of Respondents 83 4.2.4 Religious Distribution of Respondents 83 4.2.5 Occupational Status of Respondents 83 4.2.6 Income Status of Respondents 83 4.2.7 Educational Status of Respondents 84 4.3 Descriptive Statistics and test of means of Research Questions 84 4.4 Testing of Hypotheses 90 4.4.1 Hypothesis One: The level of efficiency in the delivery of e- banking Services is not significantly correlated with degree of customer satisfaction 90 4.4.2 Hypothesis Two: Security and privacy of online transactions is not significantly correlated with the degree of customer satisfaction. 92 4.4.3 Hypothesis Three: Availability of e- banking delivery channels ix does not guarantee customer satisfaction. 93 4.4.4 Hypothesis Four: Prompt resolution of customer complaint does not guarantee Customer Satisfaction. 95 4.4.5 Hypothesis Five: Customer’s reliance on e-banking delivery channels is not correlated with customer satisfaction. 97 4.4.6 Hypothesis Six: customers’ perceived value of e-banking service delivery will not bring about increased satisfaction. 98 CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION, RECOMMENDATIONS AND SUGGESTIONS FOR FURTHER STUDIES 5.1 Introduction 102 5.2 Summary of Major Findings 102 5.3 Conclusion 104 5.4.1Theoretical and Managerial Implications of the Study Theoretical Implications 105 5.4.2 Managerial Implications 106-107 5.5 Contribution to Knowledge 108 5.6 Recommendations 109 5.7 Suggestions for further studies 110 References 113 Appendix x ABSTRACT The increasing availability of electronically mediated self-service technologies in the banking industry across the world and Nigeria in particular, has changed the way banks ensure satisfaction of their customers. This trend became inevitable as global financial practises revolve around online banking, hence its adoption in Nigeria thereby signalling a step in the right direction. This paradigm shift has not only provided complete functions of operations but also advanced their electronic service quality. The broad aim of this study was to investigate the effect of electronic banking service delivery on customer satisfaction in commercial banks in Lagos state, Nigeria. This study adopted cross- sectional research design using survey method as research strategy. A web- based survey instrument was used to elicit information from 217 respondents from a hidden population of bank customers using non probabilistic sampling technique. Purposive sampling was used to draw initial sample and these initial samples were used to generate other members of the final sample using chain- referral and respondent - driven mechanism concurrently to bring about validly representative findings. Pilot test was conducted to determine the reliability of the research instrument and the result showed Cronbach alpha of 0.753 while the validity of the instrument was tested through internal and external validity test by experts in the field of marketing. Eight hypotheses were tested at 5% level of significance using linear and multiple regression analysis and the results obtained showed that bank customers were satisfied with the service delivery of their banks in the conduct of banking transactions. Conclusion which arose from the findings was that banks must ensure that consistency in the effective delivery of electronic banking services is achieved. It is thus recommended that policy makers in the sector should ensure that all the dimensions in a service quality program be strictly followed and implemented effectively so that they will not be seen as only focussing on the bank’s objective of profits and gains, but must also look into satisfying the needs of the customers as well. Key word: Customer service, Electronic banking, Customer satisfaction, Service delivery, Nigeria xi 3.4 Population of the Study 70 3.5 Sampling Procedure/ Techniques 70 3.8.2 Pilot Study 77 3.9 Reliability and Validity of the instrument 77 3.10 Methods of Data Collection 79 CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS 4.1 Introduction 81