Electronic Banking and Customer Satisfaction in Banking Institutions in Kigali Rwanda

ABSTRACT This study aimed at establishing the relationship between electronic banking and customer satisfaction among banking institutions in Kigali Rwanda. It was guided by three objectives that included; i) examining the effect of ATM usage on customer satisfaction in selected Banking institutions in Kigali , Rwanda; ii) establishing how electronic funds transfer affects customer satisfaction in selected Banking institutions in Kigali , Rwanda; iii) establishing how Telephone banking affects customer satisfaction in selected Banking institutions in Kigali Rwanda. This research employed descriptive correlation research design to describe the relationship between variables. The study population was 1000 and sample size was 285 respondents. The findings revealed the following; ATM usage significantly affects customer satisfaction in selected banking institutions in Kigali Rwanda, electronic funds transfer has a significant effect on customer satisfaction in Selected banking institutions in Kigali Rwanda, and lastly, telephone banking has a significant relationship on customer satisfaction in Selected banking institutions in Kigali Rwanda. The researcher concluded that; effective ATM usage increases customer satisfaction in Selected banking institutions in Kigali Rwanda, improvement in electronic funds transfer increases customer satisfaction in selected banking institutions in Kigali Rwanda, effective telephone banking improves customer satisfaction in selected banking institutions in Kigali Rwanda and ineffective telephone banking reduces customer satisfaction, the researcher concluded that better electronic banking increases the level of customer satisfaction among banking institutions in Kigali Rwanda, and conversely infective electronic banking system reduces it. The researcher recommended that; the banking institutions in Kigali Rwanda should set up more ATM machines, this will make the customers access the services all the time, the banking institutions in Kigali Rwanda should carry out different workshops aiming at teaching their clients, hence providing them with all the knowledge and skills of using ATM machines, the banking institutions in Kigali Rwancla should provides electronic funds transfer services 24 hours, hence helping the clients to access the services all the time, the banking institutions in Kigali Rwanda should improve more on the customers’ feedback, these banks without delay should respond to clients’ problems, suggestions, and complaints immediately, the staff of the selected banking institutions in Kigali Rwanda should be able to help the customers whenever they experience any problem with electronic banking system, and it should be handled in a prompt manner, the staff of the selected banking institutions should be able to help the customers that whenever they request for any service in these banks, they render it so fast to the customers, and the researcher recommends that the banking institutions in Kigali Rwanda should use vi phone calls, e-mails and personnel visits while communicating with customers, this will also lead to the improvement in customers’ feedback.

TABLE OF CONTENTS

DECLARATION A

DECLARATION B

APPROVAL iii

DEDICATION iv

ACKNOWLEDGEMENT

ABSTRACT

TABLE OF CONTENTS vifl

~ONE ulbaq,eu, nn~sa.,un,s.~uunDu~u~ •on.ot~$.,.~,afl. 1.

1.0 Introduction 1

1.1 Background of the Study 1

1.1.2 Theoretical perspective 3

1.1.3 Conceptual perspective 4

1.1.4 Contextual perspective

1.2 Problem Statement 6

1.3 Research Objectives 7

1.3.1 General objective 7

1.3.2 Specific objectives 7

1.4 Research questions 7

1.5 Hypothesis 8

1.6 Scope of study 8

1.6.1 Geographical scope 8

VIII

1.6.2 Content scope .8

1.6.3 Theoretical scope 8

1.6.4 Time scope 8

1.7 Significance of the study g

1.8. Operational Definitions of Key Terms 9

CHAPTER T~~’O .. ..........~10

LITERATURE REVIEW 10

2.0 Introduction 10

2.1 Theoretical review 10

2.2 Conceptual Framework 11

2.3 Literature review 12

2.4 Related Studies 19

CHAPTER rHREE ME~THODOLoGy’~ 23

3.0 Introduction 23

3.lResearch Design 23

3.2 Target Population 23

3.3 Sample Size 23

3.4 Sampling Procedure 24

3.5 Data collection methods! Instruments 25

3.5.1 Questionnaires 25

3.5.2 Interviews 25

3.6 Validity and reliability of the instrument 25

ix

3.6.1 Validity .25

3.6.2 Reliability 26

3.7.1. Before the administration of the questionnaires 27

3.7.2. During the administration of the questionnaires 27

3.7.3. After the administration of the questionnaires 28

3.8 Data Analysis 28

3.10 Ethical Considerations 29

CHAPTER FOUR auauuuunoannuaononu~o,,aan~uuRaoo,ou,aau,nan 30

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 30

4.0 Introduction 30

4.1 Profile of Respondents 30

4.2 Electronic banking 32

4.3 Customer satisfaction 35

4.4 Objective one; examining how ATM usage affects customer satisfaction 38

4.5 Objective two; establishing how electronic funds transfer affects customer

satisfaction 39

4.6 Objective three; establishing how mobile banking affects customer satisfaction... 40

4.7 Relationship between electronic banking and customer satisfaction 40

4.8 Regression Analysis 42

CHAPTER FIVE DISCUSSIONS, CONLUSIONS AND RECOMMENDATIONS ~43

5.0 Introduction 43

5.1 Discussions 43

x

5.2 Conclusions 47

5.3Recommendations 48

5.4 New knowledge acquired 49

5.5 Areas for further research 49

REFERENCES 50

APPENDIX 1TRANSMITTAL LETTER FOR THE REASEARCHER 54

APPENDIX 2: TRANSMITTAL LETTER FOR THE RESPONDENTS 55

APPENDIX 3: CLEARANCE FROM ETHICS COMMITTEE 56

APPENDIX 4: INFORMED CONSENT 57

APPENDIX 5: QUESTIONNAIRE/p.ESEACH INSTRUMENT 58