original research presentation
DESCRIPTION
service quality and core bankingTRANSCRIPT
Assessing the impact of Core Banking &
Service Quality On Customer Satisfaction
In CBE (Bishoftu Branch)
By:
Endalkachew Abebe
Background of the Study
Banking industry is marked by aggressive competition and ever-changing customer demands.
As a result, banks need to adopt themselves to the changing environment.
the growth in ICT made the world banking industry enter into new phenomena.
Application of ICT is a recent phenomena in Ethi. Many banks use different ICT like ATM, Core Banking,
Mobile Banking, and etc… that improve the service quality in order to increase customer satisfaction.
Contd… Core Banking is an integrated application that
supports real time multi-Banking and Multi-Channel strategies
It enables customers to be a customer of the bank rather than being a customer of a particular branch
enable banks to strengthen and extend their relations with credit card providers
customers will enjoy reduced waiting time and a greater choice of banking channels and services
currently there are 13 banks who have acquired CORE banking application in Eth.
Contd…
Berry et al., (1990), defined service quality as the
discrepancy between customers’ expectations or
desire and their perceptions.”
Service quality is not objectively measured
according to some technical standards but is
subjectively felt by customers and measured
relative to customer-determined standards
Contd…
Service quality is “more difficult for consumers to evaluate than product quality; this is due to a lack of tangible evidence associated with the service”
According to Philip Kotler (2005), customer satisfaction is a person's judgments of a product's perceived performance (or outcome) in relationship to expectations.
Organizational Background
established in 1942 Pioneer to introduce modern service first bank to introduce ATM in Ethiopia has more than 4 million account holdershas12,800 talented and committed
employeesis the leading African bank with assets of
Birr 155 billion as of June 30th 2012
Statements of the Problem
Satisfying customers is the major mission.As customers are satisfied - organizations
achieves higher sales, profit, market share , gain loyalty and vice versa
Nevertheless, banks in Ethiopia have little care about their customers. They use more obsolete and traditional technologies that cause dissatisfaction
Contd…
This is also true for CBEThough CBE has been providing many kinds
of banking services since its establishment in 1942, it couldn’t go further in satisfying its customers until the last decade.
The bank applied core-banking technology in 2004 E.c to integrate the services delivered in its all branch banks and to improve the quality of its services.
Contd…
The application of this technology is believed to have many contributions for the bank.
The purpose of this study was to examine the impact of core banking and service quality on customer satisfaction.
Significance of the study
important to the bank to assess whether its application of core banking service enhance the level of customer satisfaction and identifies the position of service quality at the bank.
Identifies issues related to the application of core banking and service quality and thus provide feedback to managers.
Contd...
Result of this research project can be used as a base point for further studies in the related issues.
Objectives of the study
1. General objective To assess the impact of Core Banking
and service quality on Customer Satisfaction in Commercial Bank of
Ethiopia Bishoftu Branch.
Contd…2. Specific objectives To assess the changes that comes after the
application of core banking service To identify the impact of core banking on
customer satisfaction in the banks To identify the impact of service quality on
customer satisfaction in the banks To analyze the customer satisfaction level in CBE To provide some recommendation for the bank
Research questions
What are the changes that have come after the application of core banking service?
How satisfied are customers with the application of core banking service in CBE Bishoftu branch?
How satisfied customers are with service quality in CBE Bishoftu branch?
What is the level of customer satisfaction in CBE Bishoftu branch?
What must be done to further improve the services in CBE Bishoftu branch?
Scope of the study
Delimited to the changes that come after the introduction of core banking in the bank.
the project focus area is only CBE Bishoftu branch.
Limitation of the study
Not be considered as a representative of the whole service quality of CBE; that is the generalizability of the finding and the conclusion drawn will be limited to CBE Bishoftu branch.
Moreover, since this project is designed to be completed in four months time, it may not present detailed data to the intended level.
Conceptual framework for the impact of core banking and service quality on customer
satisfaction
}→Customer
satisfaction
Core banking
Reliability
Assurance
Responsiveness
Empathy
Tangibles
Research methodology
A. Research design Descriptive-correlational form of research
design to provide solutions to the research problems
It involves gathering data that describe events and then organizes, tabulates, depicts, and describes the data collection.
A. Primary data information gathered from customers of the bank Questionnaire that have both open end and
closed end question were prepared and delivered to customers
B. Secondary Data information gathered from websites, books, and
journals, periodicals released by the bank and articles etc.
B. Types of data
C. Population of the study
current account holder =5000 saving account holder=25,00
Sub total=30,000all one time customers
D. Sample and sampling techniques
probability -stratified sampling techniques.proportion allocation method was used to
determine the sample sizen0=n*p0/N,
Contd…Based on the above formula the researcher
took a sample of20 customer from c/a =5000
100 customer from s/a=25,000
Sub total=30,000=120
all one time customers=average customer per day=1000 customer (i.e. using 10 percent of 1000 customer per day) =100
total sample size= 220 customers.
E. Method of data collection
self-administered questionnaire
F. Reliability test a questionnaire of 25 respondents was taken and
Cronbach alpha has been employed to evaluate the reliability scale of construct and dimension of each construct. Reliability scale of the overall service quality was 0.842.this means that it has high reliability
G. Method of data analysis
Descriptive statistics- Frequency, Percentage, Mean, Standard deviation
Inferential statistics-correlation and regression
analysis of data was carried out using SPSS version 20.0.
Data Analysis
Two Hundred Twenty questionnaires (220) were distributed to the respondents and out of these 210 of them were collected with a response rate of 95.5 percent.
However, only 200 responses were valid with complete answers.
Background information of Respondents
41.5 %
58.5 %39 %
33 %
18 %
10 %
28.
5 %
25 %
45 %
1.5
%
1.5 %
3.5 %
15.5 %
79.5 %
Mean & Standard deviation result
Customer satisfaction
Assurance Pearson CorrelationSig. (2-tailed) N
.877**.000200
Responsiveness Pearson CorrelationSig. (2-tailed) N
.349**.000200
Empathy Pearson CorrelationSig. (2-tailed)N
.867**.000200
Tangibility Pearson CorrelationSig. (2-tailed)N
.715**.000200
Reliability Pearson CorrelationSig. (2-tailed)N
.850**.000200
Core banking Pearson CorrelationSig. (2-tailed)N
.737**.000200
Pearson correlation
Correlation is significant at the 0.01 level (2-tailed)
Regression Analysis
Regression model for core banking
Model R R2 Adjusted R Square Std. Error of the Est.
1 .737a .543 .541 .296
Regression model for service quality model
Impact of service quality & core banking on customer satisfaction
1. Impact of core banking on customer satisfaction
Dependent Variable: customer satisfaction Source: own survey, 2013
Model Unstandardized Coefficients
Standardized Coefficients
T Sig.
(Constant)Core
banking
B Std. Error Beta
1.239.719
.202
.047.737 6.143
15.337.000.000
2. Impact of service quality on customer satisfaction
Model Unstandardized Coefficients
Standardized Coefficients
T Sig.
B Std. Error Beta
(Constant) .110 .117 .936 .351
Reliability .311 .042 .325 7.425 .000
Assurance .437 .053 .459 8.177 .000
responsiveness -.004 .021 -.006 -.202 .840
Empathy .300 .057 .302 5.275 .000
Tangibles -.072 .043 -.084 -1.687 .093
Dependent Variable: customer satisfactionSource: own survey, 2013
Analysis of open ended question
Majority of the respondent states their opinion regarding core banking service. From their suggestion it can be inferred that network problem is the big issues.
It is a major obstacle in the check clearing operations, quick transfer of fund, cash withdrawal and etc.
Temporary failures in core banking services are not corrected immediately.
Finding, Conclusion and Recommendations
1. Discussion of findings Majority (58.5 percent) are male, Majority (39 percent) aged in the range of
18-30 years, Majority (45 percent) are degree holders,& Majority (79.5 percent) of the respondents
visits the bank once in a month.
Contd…The results of the descriptive statistical
analysiscustomers were most satisfied with the
assurance (Mean=4.34) followed by reliability (Mean=4.32), empathy (Mean=4.29) and tangibility (Mean=4.26)
customers were less satisfied with responsiveness (Mean=3.83)
customers are satisfied with the application of core banking (Mean=4.28)
Correlation result
there is a positive and sig. r/s b/n: Ass. and customer satisfaction(.877**), Resp. customer satisfaction(.349**) and Emp. and customer satisfaction(.867**),
Tan. and customer satisfaction(.715**), Rel. and customer satisfaction(.850**), Core banking and customer satisfaction(.737**).
Correlation is significant at the 0.01 level (2-tailed)
Contd…
Highest relationship Ass. and customer satisfaction (.877**),
Lowest relationship Resp. and customer satisfaction (.349**)
Regression result
Reliability has a positive and significant effect on customer satisfaction
Assurance has a positive and significant effect on customer satisfaction
Responsiveness has a negative & insignificant effect on customer satisfaction.
Contd…
empathy has a positive and significant effect on customer satisfaction
tangibility has a negative and insignificant effect on customer satisfaction
core banking has a positive and significant effect on customer satisfaction
Overall regression results
Coefficient of determination-R2 is the measure of proportion of the variance of dependent variable about its mean that is explained by the independent or predictor variables
The independent variables (ser. Qual.) accounted for 87.9 percent of the variance in customer satisfaction (R2 = 0.879)
The independent variable (core banking) accounted for 54.3 percent of the variance in customer satisfaction (r2 =0.543)
Conclusion
customers of bank were satisfied by core banking and the five service quality dimensions
customers were most satisfied with the assurance dimensions of service quality
customers were less satisfied by responsiveness dimensions of service quality
Contd…
correlation result shows positive and significant relation ship between core banking and customer satisfactionall service quality dimensions and
customer satisfaction
Contd…Regression results shows that
Reliability , Assurance and Empathy
have positive and significant impact
on customer satisfactionTangibility and Responsiveness has no
positive and significant impact on customer satisfaction
core banking has positive and significant relationship with customer satisfaction
Recommendations
Reliability The bank managers should enhance reliability on
the bank by:fulfilling the service as promised, performing the service exactly at the first
time, showing a keen interest in solving
customers problems, providing the service at the promised
time and by insisting on error free record.
Contd… Empathy
One way of addressing this could be by:
treating customer with great respect,
giving individual attention to customers,
serving customers based on their specific
needs and treating customers in a friendly
manner
Contd…
The bank should create some mechanism to minimize the network problem or to find other techniques that unstop the service at the time of disconnection of the network.
Thank
you