The project title is to study the impact of electronic banking on customer satisfaction in Nepal. the main aim of the study is the investigate the impact that electronic banking in Nepal has on customer satisfaction. In the era of advancement of technology and innovation, technology has taken over all the sectors including banking and financial institutions. In this case, electronic banking or online banking has made it convenient for customers to make money transfers easily and whenever required. this research work will focus on this aspect (Samar, Ghani and Alnaser 2017). It will also focus on the negative impacts of electronic banking.
The objectives of the research include:
The research questions include:
RQ1: What is the concept of electronic banking in Nepal?
RQ2: What is the concept of customer satisfaction theories and models pertaining to electronic banking in Nepal?
RQ3: What is the impact of electronic banking on customer satisfaction in Nepal?
The Concept of Electronic Banking
Science has contributed to making the world extremely progressive as well as dynamic and this has brought significant changes in several fields across the world including politics, culture, economics, society as well as the people in general (Connell 2020). In the banking sector as well as the finance sector, several researchers have stated that this change is extremely significant and immense. this is due to the utilization of computers in the banking sector in order to ensure accuracy in mathematical and financial calculations as well as the promptness in the procedures. Electronic banking has successfully made banking transfers extremely convenient, speedy as well as comfortable not only for the customers but also for the employees. With the advent of electronic banking, customers today do not require to carry checkbooks or cash all cards in order to make a transaction through the bank (Njoroge and Mugambi 2018). However, several research papers have stated that the spread of electronic banking across the world is extremely limited.
Electronic banking or internet banking is that type of banking in which monetary transactions can be conveniently carried out with the help of electronic signals and without the use of physical means like the transfer of cash, checks, or other forms of paper documents (Shaikh and Karjaluoto 2016). These transfers generally occur between financial organizations like banks as well as credit unions. Several reports have also stated that they can occur between financial organizations as well as commercial institutions like stores and shops. Electronic banking is highly dependent on computer systems that make use of telephone lines (Chaimaa, Najib and Rachid 2021). These computer systems are used for recording the transfers as well as the ownership of the financial properties and these systems are responsible for controlling as well as monitoring the methodologies that are used by consumers along with commercial institutions to access funds.
There are several aspects and objectives of electronic banking both from the client’s perspective as well as the banks’ or financial institutions’ perspectives. Electronic banking is a way of providing retail services and also declining the costs through banking networks (Larsson and Viitaoja 2017). It is also aimed at declining the costs of administration and enhancing income through compensation. Electronic banking a that expanding the services of financial institutions. It is also a way of acquiring crucial information as well as data conveniently and in a timely manner, thereby reducing cost as well as time in transactions.
Customer satisfaction can be termed as the measurement of the happiness quotient of the customers as a result of their levels of satisfaction with the products, services as well as the engagement and capabilities of the company with the customers (Aburayya et al. 2020). customer satisfaction is generally determined by surveys as well as ratings that help the brand to establish the ways in which it can enhance its positioning in the market so that it can target and impress the customer segment successfully and efficiently with the help of its products and services as well as their brand engagement activities.
One of the most important theories of customer service is Maslow’s Hierarchy of Needs. It is presented as a hierarchical ladder progressing from the basic needs to the holistic fulfillment of needs that a service or product needs to fulfill in order to be satisfied. In the first level of Maslow’s Hierarchy of Needs pyramid lies the basic physiological needs like water, oxygen, and food (Hopper 2020). In this case, the basic needs of the customers can be fulfilled by the convenient transfer of money and funds without any issues or errors on the part of the customers. The next includes the safety needs like financial security and social security. In this case, the financial institution or the banking organization can cater to the Social Security and financial security needs of the customers by enabling them several electronic banking services and facilities which can help them to secure their future with the help of their chosen banking organization. This can include mutual funds or investment opportunities provided by the financial institutions to the customers. The third need is that of love and belonging which includes kinship and comradery. in this case, this need will be fulfilled by the banking organization or the financial institution by allowing the customers several services in which they can participate. This can be in the form of easy granting of loans, high interest, or other services that can help the customers to feel comfortable with the bank or financial institution that they have chosen, and this can contribute to the feeling of belonging and transparency with the financial institution or bank. The next need is esteem needs and the last need is self actualization (Stewart, Nodoushani and Stumpf 2018). The esteem needs can be fulfilled by the bank if the electronic banking services are being carried out accurately through online banking services like debit card money transfers, credit card services, and many more. The banking sector and financial institutions must also offer services and discounts on purchases and money transfers in order to enhance their shopping experience with other brands. Therefore, in this case, the electronic banking services must fulfill all these needs in order to completely satisfy the customers. After fulfillment of all the needs, including the enhancement of opportunities as well as the absence of challenges and issues in electronic banking, customer satisfaction can be completely achieved through self actualization.
Electronic banking has a number of benefits and a positive impact on customer satisfaction. Several research reports have declared that electronic banking offers short security to the customers as it is one of the major services offered by banks, it has turned into a secured platform in the contemporary era (Alarifi, Alsaleh and Alomar 2017). Banks tend to use devices that allow encryption of data and information in order to make sure that all the sensitive and important information of the clients is secured and protected without any security breach. this provides the customers with security from the hacking of accounts as well as online frauds. The accessibility factor offered by electronic banking also contributes to customer satisfaction. As stated by several research reports even on the last day of the bill payment clients can rely on online banking without having to suffer a penalty (Wagner and Walstad 2019). This is because online transfers can be conducted from the convenience of any place and at any time of the day, and it does not require the clients physically present in the bank or financial organizations in order to transfer huge amounts of money. It is a hassle free process. One of the most convenient aspects of electronic banking is the fact that it has no hidden fees. No extra charges are demanded from the clients because of the convenience provided to them through electronic banking services (Mansour, Eljelly and Abdullah 2016). Allow the clients to monitor as well as manage their accounts closely as they do not have to visit the financial institutions or banks in order to get their hands at their recent transactions. This can be done easily using the Internet from the convenience of e-banking platforms available or can be downloaded on smartphones. Integration of all these facilities offered by electronic banking has contributed to the satisfied customer base of the financial institutions and the banking sector across the world.
However, there are several negative impacts that come with electronic banking that has hampered customer satisfaction to a great extent. Several research reports have revealed that the exchange of online as well as digital knowledge it’s not specifically limited to a particular time or place (Sefton-Green et al. 2016). It can be shared by various people all over the world, across political boundaries and geographical areas. Even though in this case, the advancement of technology has contributed to the convenience of customers, it has given rise to data hacking and data breaching, particularly known as Internet piracy (Cohen 2018). Several researchers have opined that it is a modern type of theft and it is particularly represented in several forms which include transferring money from one bank account to the other using identity theft techniques, theft of sensitive as well as confidential data, and many more.
The literature has explored in detail several concepts of electronic banking, its opportunities as well as challenges. However, less has been explored in terms of its impact on the customers. The literature has failed to explore the positive as well as negative implications of electronic banking on the satisfaction aspect of the customers, particularly in the country of Nepal. This states that the literature has mostly discussed from a customer’s perspective the advantages as well as the disadvantages of electronic banking and the convenience and efficiency that it brings to the customers. However, it is focused less on how customer satisfaction is enhanced as a result of electronic banking services offered by several financial institutions and the banking sector. Therefore the research papers of not focused on gaining detailed consumer insights or have surveyed in detail the customers who have availed their services of electronic banking from their chosen financial organizations and banks. Most of them were explained from the perspective of the bank and what they think can be beneficial for the customers. This gap will be met through this research as it will incorporate primary customer research in order to gain detailed insights into the positive and negative impacts of electronic banking on customer satisfaction among the citizens of Nepal. This research work is estimated to provide and also contribute detailed insights from a customer satisfaction perspective to the literature (McColl-Kennedy et al. 2019). That he thought questions will be fulfilled by reviewing the customer experiences and the models and theories that are followed by the brands in Nepal, particularly the financial sector in catering to the needs and requirements of their customers.
The literature review has provided an extensive account of the basic concepts of electronic banking, the concepts of customer satisfaction, and the customer satisfaction models and theories, as well as the impact of electronic banking on customer satisfaction across the world. These three themes will help contribute to answering the research questions that are extremely similar but are focused on Nepal. Understanding the impact of both was driven negatively on customer satisfaction across the world will help the researcher to understand the basis of this customer satisfaction as a result of electronic banking and how they can be influenced in Nepal using the theoretical frameworks and concepts like Maslow’s hierarchy of needs (Paudel et al. 2020). This theoretical underpinning can also be used in order to suggest recommendations for the financial sector in Nepal.
References
Aburayya, A., Marzouqi, A., Alawadhi, D., Abdouli, F. and Taryam, M., 2020. An empirical investigation of the effect of employees’ customer orientation on customer loyalty through the mediating role of customer satisfaction and service quality. Management Science Letters, 10(10), pp.2147-2158.
Alarifi, A., Alsaleh, M. and Alomar, N., 2017. A model for evaluating the security and usability of e-banking platforms. Computing, 99(5), pp.519-535.
Chaimaa, B., Najib, E. and Rachid, H., 2021. E-banking Overview: Concepts, Challenges and Solutions. Wireless personal communications, 117(2), pp.1059-1078.
Cohen, M.C., 2018. Big data and service operations. Production and Operations Management, 27(9), pp.1709-1723.
Connell, R., 2020. Southern theory: The global dynamics of knowledge in social science. Routledge.
Hopper, E., 2020. Maslow’s hierarchy of needs explained. ThoughtCo, ThoughtCo, 24.
Larsson, A. and Viitaoja, Y., 2017. Building customer loyalty in digital banking: A study of bank staff’s perspectives on the challenges of digital CRM and loyalty. International Journal of Bank Marketing.
Mansour, I.H.F., Eljelly, A.M. and Abdullah, A.M., 2016. Consumers’ attitude towards e-banking services in Islamic banks: the case of Sudan. Review of International Business and Strategy.
McColl-Kennedy, J.R., Zaki, M., Lemon, K.N., Urmetzer, F. and Neely, A., 2019. Gaining customer experience insights that matter. Journal of Service Research, 22(1), pp.8-26.
Njoroge, M.N. and Mugambi, F., 2018. Effect of electronic banking on financial performance in Kenyan commercial banks: Case of Equity bank in its Nairobi Central Business District branches, Kenya. International Academic Journal of Economics and Finance, 3(2), pp.197-215.
Paudel, U.R., Parajuli, S., Devkota, N. and Mahapatra, S.K., 2020. WHAT DETERMINES CUSTOMERS’PERCEPTION OF BANKING COMMUNICATION? AN EMPIRICAL EVIDENCE FROM COMMERCIAL BANKS OF NEPAL. Global Economy Journal, 20(04), pp.1-21.
Samar, S., Ghani, M. and Alnaser, F., 2017. Predicting customer’s intentions to use internet banking: the role of technology acceptance model (TAM) in e-banking. Management Science Letters, 7(11), pp.513-524.
Sefton-Green, J., Marsh, J., Erstad, O. and Flewitt, R., 2016. Establishing a research agenda for the digital literacy practices of young children. A White Paper for COST Action IS1410.
Shaikh, A.A. and Karjaluoto, H., 2016. On some misconceptions concerning digital banking and alternative delivery channels. International Journal of E-Business Research (IJEBR), 12(3), pp.1-16.
Stewart, C., Nodoushani, O. and Stumpf, J., 2018, July. Cultivating employees using Maslow’s hierarchy of needs. In Competition Forum (Vol. 16, No. 2, pp. 67-75). American Society for Competitiveness.
Wagner, J. and Walstad, W.B., 2019. The effects of financial education on short?term and long?term financial behaviors. Journal of Consumer Affairs, 53(1), pp.234-259.
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