CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Internet banking, also known as online banking, e-banking or virtual banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website. Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is also defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products or its services (ratings) exceeds specified satisfaction goals (Farris, Paul W et.al.2010). And yet another definition of customer satisfaction is it refers to the extent to which customers are happy with the products and/or services provided by a business. Further definition of customer satisfaction is it is a term generally used to measure a customer's perception of a company's products and/or services. It's not a straight forward science however, as customer satisfaction will vary from person to person, depending on a whole host of variables which may be both psychological and physical.
The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale (Westbrook, 1980). Technology is making a tremendous impact upon banks in general and the financial services sector is no exception. The application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamentals importance and concerns to all banks and indeed a prerequisite for local and global competitiveness in banking industry. As a result of this technological improvement business environment in financial sector is extremely dynamic and experience rapid changes and demands banks to serve their customer through the use of internet.

1.2 Background to the Study

The evolution of internet banking started from the use of Automatic Teller Machine (ATM) and Finland is the first country in the world to have taken a lead in internet banking (Mishra,R. and Kiranmai,2015). Internet banking has been widely used in developed countries and in developing economies; however, the spread of internet banking is much limited. Today, almost all banks are adopting internet banking as a means of enhancing service quality of banking services. They are providing internet banking to their customers to increase customers‟ satisfaction in banking service (Shittu, 2010).
Customers in Sierra Leone are late adopters of the Internet and its applications with regards to internet banking. However, issues like machine out of order, machine out of cash, no printing statements, cards get blocked, frequent breakdown of ATM service, unreliability of ATM service, lack of sufficient technicians in all bank who solve breakdown of ATM machine, lack of sufficient alternative system which substitute ATM service for the customer when temporary problem happen in the machine, lack of convenience of internet-bank service, lack of mobile banking service, lack of reliable internet banking , lack of credit card service, under-development of technological infrastructure, low level of relevant knowledge creation and innovation, interruption of network, lack of suitable and regulatory frame work for e-commerce, resistance to changes in technology among customers and service providers as result of fear of risk, lack of fair distribution of internet banking service in all over Sierra Leone. All these has created doubts in the minds of customers thereby affecting their level of satisfaction.

1.3 Statement of the Problem

The introduction of internet banking in to the banking sector is to bring customer satisfaction thereby to enhance the banks’ profitability. Unless this technology bring increase in customer satisfaction than the traditional brick and mortar branches customer may perceive as the same as different branches rather than a new means of delivery channels. Most of the times in Sierra Leone, the internet banking faces down time due to our weather and the internet providers takes lots of time in solving such issues.

1.4 Objectives of the Study

The following are the objectives of this study:
 To examine the components of internet banking in Sierra Leone.
 To analyze the effectiveness of internet banking on customer satisfaction in the banking industry in Sierra Leone.
 To determine the factors limiting the use of internet banking by Sierra Leoneans.
 To investigate the effectiveness of internet banking on customer satisfaction in the banking industry in Sierra Leone.

1.5 Research Questions

The following will be the research questions to the study:
 What are the components of internet banking in Sierra Leone?
 How does the effectiveness of internet-Banking have on the satisfaction of customer in the banking industry in Sierra Leone?
 What is the impact of internet banking on customer’s satisfaction?
 What are the factors limiting the use of internet banking by Sierra Leoneans?

1.6 Significance of the Study

The following are the significance of the study:
 Outcome of this study will be a useful guide for the managements of banks in Sierra Leone at determining the impact of internet banking on customer satisfaction. Internet banking is significant due to its speed which is unmatched. Online bank sites generally execute and confirm transactions at a quicker than ATM processing speeds and it is efficient. Easier bill payments. One can easily send payments using the bank's online banking platform.
 This study is also relevant to a customer using banks product due to it improved visibility of account balances and transactions of customers and this study becomes more significant because it evaluate how banks customers can have better and greater access to their bank records, ability to synchronize an account with a mobile app.  This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.

1.7 Scope and Delimitation of the Study

This study on the impact of internet banking on customer satisfaction will cover all the components of internet banking with a careful examination of its impact on customer’s satisfaction. This study will be limited to Sierra Leone commercial bank (S.L.C.B) Ltd Freetown, Sierra Leone. The study will concentrate on the impact of internet banking on customer satisfaction in Sierra Leone. In this a year period is adopted 2016 to 2021. We hereby try to analyze the Impact of Internet Banking on Customers Satisfaction.

1.8 Organization of the Study

For this purpose, the structure of this study will be organized into five chapters:
Chapter one will focus on, the background of the study which will give a brief explanation on the research, statement of the research problems, aims and objectives to be achieved, research questions which will be answered in subsequent chapters, significance of the research and the delimitations of the research.
Chapter Two will bring out the review of related literature, view relevant literature on the subject matter.
Chapter Three will be the research methodology. This highlights the methods used in obtaining data for analysis (Methodology).
Chapter Four will analyses and present result based on the research design. As aforementioned, a presentation will be made using ratios, graphs, and tables, especially when dealing with both primary and secondary data.
Chapter Five will be the Conclusion, Recommendations, Suggestions and conclusion of findings.

1.9 Definition of Key Terms

Internet Banking: Internet banking, also known as online banking, e-banking or virtual banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website.
Customer Satisfaction: Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is also defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products or its services (ratings) exceeds specified satisfaction goals (Farris, Paul W et.al.2010). And yet another definition of customer satisfaction is it refers to the extent to which customers are happy with the products and/or services provided by a business. Further definition of customer satisfaction is it is a term generally used to measure a customer's perception of a company's products and/or services. It's not a straight forward science however, as customer satisfaction will vary from person to person, depending on a whole host of variables which may be both psychological and physical.
Bank: A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.

1.10 Summary of Chapter

This chapter gives a brief description about the background of Impact of Internet Banking On Customers Satisfaction and as well as the background of the case study which serve as the subject matter to be investigated, it also entails the problem statement that the researchers want to solved, the aim and objectives of the study, the various research questions, the significance of the study, the delimitation of the study which includes the scope, and as well as the organization of the study.