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1.1     Background to the Study

Banking in Nigeria from the beginning has always been a simple business; consumers saved their money with banks and received their financial services from banks. When customers open savings account, they received passbook from the bank with which the account would be operated; and when it is a current accounts, they received cheque books for the same purpose. Today, the banking industry has moved into an era of menu-driven ultra-robust specialized software programs called banking applications. These applications can carry out virtually all banking functions relying heavily on information collection, storage, transfer and processing The application of electronic banking products/services to banking operations has become a subject of fundamental importance and concerns to all banks operating within Nigeria and indeed a condition for local and global competiveness (Ezeoha, 2006; Ikechukwu, 2000). The recent consolidation exercise in Nigerian banking sector has drawn the attention of many banks to application of various technological devices in promoting/achieving better customer service delivery that guaranteed customer satisfaction that translates into increase profitability and higher return on investment.

The success of electronic banking, as agued by many researchers, depends probably on bank service quality, customer preferences and satisfaction. Recent studies found that consumer behavior is changing partly because of more spare time. The way of use of financial services is characterized by individuality, mobility, independence of place and time, and flexibility (Seitz and Stickel, 2004). Historically, banks have taken the attitude that they will provide customers with the services and products that they, the banks, wish to provide. Buyer power, as evidenced by the increase in wealth and sophistication of the most profitable customers, now dictates that such customers will determine with whom they will bank, which products they will use, what pricing they will accept and which delivery channels they choose to use. Banks not recognizing these requirements could rapidly lose between 30-50% of their customers, especially the most profitable customers including the ‘magic’ top10%. It has been proven that the least profitable clients will be the least likely to move. Banks are therefore being forced to adopt a strategy towards their customers that is focused on buyer driven desires. In order to survive both from domestic and the increasing level of global cross-border competition, banks need to change their process of servicing their customers. Firstly, to capture and retain the most profitable customers and secondly to redirect unprofitable customers into service channels which can limit the costs and maximize potential revenues (Mols, 1998).

E-Banking gives customers the opportunity to access banking services from the comfort of their homes and offices and also be able to do most of the transactions which would have been done in the banking halls. With the use of personal computer (PC) or even mobile phone with an internet connection, customers are able to carry out transactions such as cash withdrawals, payments of utility bills, transfers from one account to the other, viewing and printing of statements as well as request for cheque books on their traditional accounts

Timothy (2012) is of the opinion that customer’s satisfaction holds the potential for increasing an organization’s customer base, increase the use of more volatile customer mix and increase the firm’s reputation. Consequently, obtaining competitive advantage is secured through intelligent identification and satisfaction of customer’s needs better and sooner than competitors and sustenance of customer’s satisfaction through better products/services. Technology is then essential in providing faster and more efficient services to customers. Technology acquisition must be based on actual needs and the proven ability to deliver customer – friendly solutions. But with globalization, Nigerian banks have no choice but to adopt electronic banking services to enhance effective service delivery that transcends to customer satisfaction, if they really want to stay in the business race, let alone be profitable (Madueme, 2009). But it should be realized that electronic banking services is a brain child of Information and Communication Technology (ICT) that made it possible for service providers and their customers in developing economies to enjoy a good semblance of the services enjoyed in the developed societies. Electronic banking services have afforded banks the opportunities to impress customers which encourage them to keep coming back. Today, it would be difficult to see any bank in the country that does not render one form of electronic banking service or the other, even banks in the most remote parts of the world.

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