ASSESSMENT OF THE IMPACT OF E-BANKING SERVICES ON CUSTOMER

SATISFACTION

CASE STUDY OF CRDB BANK AT MBULU BRANCH (MANYARA)

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ASSESSMENT OF THE IMPACT OF E-BANKING SERVICES ON CUSTOMER
SATISFACTION

CASE STUDY OF CRDB BANK AT MBULU BRANCH (MANYARA)

By

Costantino Martin Hotay

A Research Report Submitted to the School of Business in Partial Fulfillment of the

Requirement for Award of Bachelor Degree of Business Administration in marketing
management (BBA-MKT) of Mzumbe University
2020

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 CERTIFICATION

We, the undersigned, certify that we have read and hereby recommend for acceptance by the
Mzumbe University, a research report entitled; the impact of e-banking services on
customer satisfaction: A case study of CRDB Bank at Mbulu branch (Manyara), in partial
fulfilment of the requirements for award of the degree of Bachelor of Business
Administration in Marketing (BBA-MKT) of Mzumbe University

_____________________________
Major Supervisor

________________________________
Internal Examiner

Accepted for the Board of school of business (SOB)

_________________________________________________________________

DEAN: SCHOOL OF BUSINESS

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4
 DECLARATION AND COPYRIGHT

I, Costantino Martin Hotay, hereby declare that this research report is my own original work
and that it has not been presented and will not be presented to any other university for similar
or any other degree award.

Signature_______________________________

Date____________________________________

This research report is a copyright material protected under the Berne Convention, the
copyright Act 1999 and other international enactments, in that behalf, on intellectual property,
it may not be produced by any means in full or in a part, except for the short extracts in fair
dealings, for the research or private study, critical scholarly review or discourse with an
acknowledgment without permission of Mzumbe University, on behalf of the author.
©Costantino Martin Hotay
All rights reserved
2020

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 ACKNOWLEDGEMENT

My first and foremost thanks go to the Almighty God for giving me the health, strength
and courage to pursue my studies and conducting this research study from the beginning
to the end.

My sincere gratitude goes to my Supervisor, Dr. Hawa P. Tundui who guided me from
proposal writing to the final report. Her criticism, invaluable patience, intellectual
guidance and support helped me not only to accomplish this study but also to come up
with the expected standards. Sincerely, she deserves all kinds of credits.

Many thanks should also go to all CRDB Bank staff who participated fully in this study
for their support during data collection. I extent my sincere thanks to all respondents at
CRDB Bank Mbulu Branch who participated in this research for their valuable time
spent in answering the questionnaires and giving answers in the course of questionnaire
and interview.

Also, many thanks go to my classmates whom from time to time were helpful in whatever
I asked, they were very corporative.

I also thank my parents and guardians for supporting me morally and spiritually during
the whole period of my studies and during the research study. Their encouragement,
advice and support enabled me to put in many efforts which enabled me to conclude the
study successfully.

I also wish to thank management and staff of Mzumbe University for their continued
assistance in one way or another.

My sincere appreciation goes to all those who I may not have mentioned by name but
who nevertheless inspired me and contributed in one way or another to make this
research possible.

May the almighty god reward and bless them all.

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 DEDICATION

This work is dedicated to my parents and all my relatives who from one way to another
have always been giving me courage and support, this work is the results of their efforts.

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 ABRAVIATIONS

ACA - Agriculture Credit Agency

NDCA - Nation al Development Credit Agency

NCB - National Cooperative Bank

TRDB - Tanzania Rural Development Bank

NBC - National Bank of Commerce

DANIDA - Danish International development Agency

ATMs - Automatic Teller Machines

QR - Quick Response

IVR - Voice Response

WAP - Wireless Application Protocol

PDA - Personal Digital Assistant ()

e-Cheque - Electronic Cheque

IM or E-marketing - Internet marketing

CRM - Customer relationship Management

MNE - Multi National Enterprises

FDI - Foreign Direct Investment

SIM-banking - Subscriber Identity/Identification Module Banking

M-pesa - Mobile Pesa

IT - Information Technology

LDCs - Least Developed Country

LTD - Limited

C.E.O s - Chief Executive Officers

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 ABSTRACT

The purpose of this study was to discuss the impact of e-banking services on customers
satisfaction. The study was guided by the following specific objectives, to examine the quality
of e-banking services provided by banks, to examine the contribution of e-banking services on
effectiveness and efficiency of service delivery and to examine challenges of traditional
banking imposed by e-banking services.

Convenience sampling were used during the study to select a sample of 40 respondents, in
which they were provided questionnaires in order to reveal the impact of e-banking service on
customers satisfaction. Data collection was done through the use of questionnaire, interview in
which they were used during the study. Data analysis was based on descriptive statistics and
presented in tables and percentages.

The findings show that customers are satisfied with the services that offered by CRDB Bank at
Mbulu district through the sample size of few people representing a very diverging population.
e-banking services increased transaction speed increased, and also could save valuable time.
The quality of services provided also appeared to be pleasant to customers. With a number of
challenges, e-banking services are contributing so much towards customer satisfaction in
Mbulu district. The organization should allocate resources properly and should put limitation
on the issue of increased price because some of the customers complained about it. Lastly
organization should provide favorable policies to the clients in order to make them easy and
free to purchase the product.

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 TABLE OF CONTENTS
CERTIFICATION...........................................................................................................................iii
DECLARATION AND COPYRIGHT.................................................................................................iv
ACKNOWLEDGEMENT.................................................................................................................v
DEDICATION...............................................................................................................................vi
ABRAVIATIONS..........................................................................................................................vii
ABSTRACT.................................................................................................................................viii
INTRODUCTION...........................................................................................................................1
1.1 Introduction..........................................................................................................................1
1.2 Background of the Organization...........................................................................................1
1.3 Background of the study.......................................................................................................3
1.5 Objectives of the Study.........................................................................................................6
1.5.1 The General Objective of the Study...................................................................................6
1.5.2 Specific Objectives of the Study.........................................................................................6
1.6 Research Questions..............................................................................................................7
1.6.1 Significance of the study....................................................................................................7
1.7 The scope of the study..........................................................................................................7
CHAPTER TWO............................................................................................................................8
LITERATURE REVIEW...................................................................................................................8
2.1 Introduction..........................................................................................................................8
2.1 Definitions of key terms........................................................................................................8
2.3. Theoretical Review...............................................................................................................8
2.4 Empirical literature review..................................................................................................15
2.4.1 A studies in developing countries....................................................................................15
2.4.2 A studies in developed countries:....................................................................................16
2.5 Research Gap......................................................................................................................17
2.6 Conceptual Framework.......................................................................................................17
CHAPTER THREE........................................................................................................................21
RESEARCH METHODOLOGY......................................................................................................21
3.1 Introduction........................................................................................................................21
3.2 Research Design..................................................................................................................21
3.3 Unity of inquiry...................................................................................................................21
3.4.1 Population and sample size..........................................................................................21
3.4.2. Sampling Technique........................................................................................................22
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3.5.1 Primary data....................................................................................................................22
3.5.2 Secondary data................................................................................................................23
CHAPTER FOUR.........................................................................................................................24
PRESENTATION AND DISCUSSION OF FINDINGS.......................................................................24
4. 0. Introduction......................................................................................................................24
4.1 Response Rate....................................................................................................................24
4.2 Respondents’ demographics...............................................................................................24
4.2.1 Composition of respondents by gender...........................................................................24
Table 4.1 Composition of respondents by gender....................................................................24
4.2.2 Composition of respondents by age................................................................................25
Table 4.2 Composition of respondents by age..........................................................................25
4.2.3 Composition of respondents by marital status................................................................26
4.2.4 Composition of respondents by level of education..........................................................26
4.2.5.Occupation of the respondents.......................................................................................27
4.2.6. Composition of respondents by work experience...........................................................28
4.3 Examinining the quality of e-banking services provided by CRDB bank in customers
satisfaction................................................................................................................................29
4.4 Examining the e-banking service effectiveness on customer satisfaction at CRDB bank.. . .31
SUMMARY, CONCLUSION AND RECOMMENDANTIOS..............................................................34
5.0 Introduction.....................................................................................................................34
5.1 The summary of the findings..............................................................................................34
5.1.2 Examining the e-banking service effectiveness on customer satisfaction at CRDB bank. 35
5.1.3 The challenges of traditional banking imposed by e-banking services.............................37
5.2 Conclusion...........................................................................................................................38
5.3 Recommendations:.............................................................................................................39

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 LIST OF TABLES

Table 4.2 Composition of respondents by age...........................................................................27

Table 4.3 Composition of respondents by marital status........................................................... 28

Table 4.4 Composition of respondents by level of education....................................................29

Table 4.4: Occupation of the respondents..................................................................................30

Table 4.6 Composition of respondents by work experience......................................................31

Table 3.1 Population and sample size

LIST OF FIGURES

Figure 2.1: Conceptual frame work

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 CHAPTER ONE
INTRODUCTION
1.1 Introduction

This chapter of research report covers background of the organization, background of the
study, statement of the problem, general and specific objectives of the study, research
questions and significance of the study.

1.2 Background of the Organization

CRDB Bank PLC is an African bank and a leading financial service provider in Tanzania with
current present in Tanzania and Burundi, East Africa. The Bank was established in 1996 and
was listed on The Dar es salaam stock of exchange (DSE) in June ,2009. Over the years,
CRDB bank has grown to become the most innovative and preferred financial service partner
in the region. Supported by a robust portfolio and uniquely tailored products. CRDB bank
remain the most responsive bank in the region. CRDB Bank PLC provides a wide range of
products which suits the needs of different segments in the market, from the top the bottom of
the pyramid such as; deposit products, loans and advance value-added services (internet
banking, sim banking, bank cards i.e. debit and credit, premier banking service and agency
banking service), fund transfers, treasury products (money market and foreign exchange
trading), insurance service, micro finance services and trade finance products. CRDB Bank has
three subsidiaries namely CRDB Microfinance Ltd that deals with Microfinance services,
CRDB Insurance Brokers Ltd. that offers a range of insurance brokerage services and products
and CRDB Bank Burundi S.A. which is the first overseas subsidiary in the neighboring
country of Burundi as part of the regional expansion plan in East Africa. CRDB Bank is the
first and only bank in the zone to co-brand its debit card known as “TemboCard” with major
renowned international cards platforms Visa, MasterCard and Union Pay international
CRDB Bank PLC maintained its position as the largest commercial bank in Tanzania,
commanding 23%of total deposits and 20% of total assets in the market and it has more than
28,000 shareholders. The table below show the ownership of shares

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 Table 1.1: list of Shareholders as of 2017

Name Shared Held %

Danida Investment Fund 548,067,648 21.0
Parastatal Pension Fund 260,882,095 10.0
CDC Group Plc/Re: IFC/AfCap 130,692,741 5.0
Aunali F. Rajabali and Sajjad F. Rajabali 107,655,562 4.1
LAPF Pension Fund 58,077,549 2.2
Kimberlite Frontier Master Africa Fund LP RCKM 100,641,213 3.9
National Social Security Fund-Uganda 100,000,000 3.8
Duet Africa Opportunities Master Fund IC 37,583,840 1.4
Hans AingayaMacha 32,764,200 1.3
National Health Insurance Fund 32,040,040 1 1.2

Western Zone Tobacco Cooperative Union (WETCU) 30,000,000 1.1

CMG Investment Limited 29,330,971 1.1
Mehar Singh Virdi 25,164,028 1.0

Shareholders Owning Shares above 1% 1,492,899,887 57.2

Less than 1% 1,118,938,697 42.8
Grand Total 2,611,838,584 100.0
Source: Investor’s presentation ppt 2017

The current organization structure of the bank is a result of comprehensive overhead of its
predecessors the organization structure is highly decentralized and designed to make the bank
more customer oriented and able to be responsive in timely manner in meeting its customer’s
needs who are widely scattered in Tanzania. CRDB Bank organizational structure is made up
of the Managing Director assisted by the Deputy Managing Director who is heading the
following departments; Department of Finance and Administration, Department of Retail
Clients and Marketing, Department of Credit, Department of Internal Audit, Treasury
Department, Department of International Banking & Institutional Clients, Department of
Operations, Secretariat Department, and Department of Human Resource

CRDB Mbulu branch was opened in 2015 with 4 employees as of the end of February
2020. CRDB Bank up to this time serves approximately 5000 customers. Mbulu branch
is located at center of the Mbulu town in Manyara and most people have not yet
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adopted e-banking services, therefore only 4000 customers use e-banking
approximately. The following is a list of e-banking services ATMs, App banking, SIM-
banking, internet banking and QR. Almost whole customers use ATMs, while SIM-
banking was the second followed by other e-banking services and QR is the least used
service with a record of 3 customers.

1.3 Background of the study

The rapid changes in business operations in contemporary times in the form of

technological improvement require banks in Nigeria to serve their customers
electronically. Traditionally, banks have been at the forefront of harnessing
technology to improve their products and services. The banking industry and its
environment in the 21st century is highly complex and competitive and therefore the
need for information and communication technology to take center stage in the
operations of banks (Stevens, 2002).

Electronic banking is critical in the transformation drive of banks in areas such as

products and services and how they are delivered to customers. Thus, it is seen as a
valuable and powerful tool in the development, growth, promotion of innovation, and
enhancing the competitiveness of banks (Gupta, 2008; Kamel, 2005). Given the
significant role of electronic banking in the developmental drive of banks, information
technology has been found to lead to an improvement in business efficiency and
service quality and hence attract customers as well as retain them Kannabiran &
Narayan, (2005).

According to Chang, (2003), Electronic banking contributes significantly to the

distribution channels of banks such as automated teller machine (ATM), Phone –
banking, Tele-banking, PC-banking, and now internet banking (Chang, 2003).
Besides, transfer of funds, viewing and checking savings account balances, paying
mortgages, paying bills and purchasing financial instruments and certificates of
deposits processes have improved significantly as a result of internet banking
(Mohammed et al., 2009). This implies that Electronic banking has resulted in
efficiency in service delivery in the banking sector because customers can transact
business from one side of the country to another and from both long and short
distances.

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Online customers proved more loyal and profitable than regular customers. In October
2001, Bank of America customers executed a record 3.1 million electronic bill
payments, totaling more than $1 billion. In 2009, a report by Gartner Group estimated
that 47 percent of U.S. adults and 30 percent in the United Kingdom bank online
Batchelor, (2017).

According to Mia & Rahman, (2007), since the late 1990s E-Banking has developed
from virtual insignificance to tens of millions of users worldwide. However, E-
Banking is the product of different generations of electronic transactions.

E-Banking is widely used in, among other places, the Nordic countries. In 2001, E-
Banking was used by more than 25% of the population in Norway, Sweden, and
Finland, and by 15%of the population in Denmark (OECD, 2001). In 2004, E-Banking
usage in Denmark had grown to 45% (Statistics Denmark, 2004). Jeevan (2000) notes
that with rigid controls giving way to deregulation, banks are gearing up their
communications infrastructure to obtain a competitive edge from E-Banking, which is
fast becoming a reality in India. Nair (1999) points out that E-Banking is fast
becoming a strategic necessity for most commercial banks, as competition increases
from private banks and NBFIs Mia & Rahman, (2007)

According to the “E-Commerce beyond 2000”, the banking and finance sector has
been a rapid adopter of E-Commerce because its products could easily be virtualized
and the product had priority over the place (NOIE, 2000). Yerkes (1998) observes that
banks can generate revenue through increased account access fees, and benefit from
promotional opportunities to cross-sell products such as credit cards and loans Mia &
Rahman, (2007).

Mia & Rahman, (2007) observed that banks initially promoted their core capabilities,
such as products, channels, and advice, through the Internet, Yerkes (1998) argues
that, due to the relative newness of this rapidly growing industry, banks, as well as
consumers, had serious concerns about the security of Internet access to client
accounts, which was the biggest challenge (Denny 2000). The advances in Internet
security and the advent of relevant protocols such as Integration, OFX, SET, etc. have
put banks in perspective again as financial intermediaries and facilitators of complete
commercial transactions via electronic networks and especially via the Internet
(Stamoulis, 2000).

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Consumers are increasingly looking for services they can access from a single-entry
point. As Denny (2000) observes, awareness of competition has motivated banks to
move aggressively in seeking alliances and establishing joint ventures to maintain
their claim to this part of the E-Commerce infrastructure. Like there are alliances in
the ATM network, Group Network, Money Mia & Rahman, (2007)

This is also creating segmentation of networks where the customers of these networks
sometimes unable to access others’ networks. Seitz and Stickel (1998) note that
consumer behavior in banking changed partly as a result of changes in the amount of
spare time available to individuals. Mobility, independence of time and place, and
flexibility have become keywords in consumer banking Mia & Rahman, (2007).

Mia & Rahman, (2007) quoting Timmers (2000) supports this view, highlighting the
key features of the Internet – such as 24hour availability, almost immediate access,
and the absence of physical borders. Indeed, the Internet has been one of the key
drivers in promoting E-Commerce in the banking sector (Jeevan, 2000). The
opportunities for banks in the Internet arena are varied (Stamoulis, 2000). Despite this
plethora of opportunities, threats to the e-banks abound. One major threat to banks is
the “Internet-only” virtual banks. With US$ 2 million, one can set up a fully-
functional, Internet Only bank and provide payment services on the Internet.

Other scholars argued that electronic banking has transformed traditional banking
practices to the extent that it has been found to create a paradigm shift in marketing
practices resulting in a positive performance in the banking sector (Gonzalez, 2008;
Maholtra & Singh, 2007). This shows that the delivery of an efficient and quality
service is facilitated by information technology. Similarly, Christopher et al. (2006)
indicated that electronic banking provides an important channel to sell products and
services of banks and is perceived to be a necessity for banks to be successful.
Therefore, service quality and efficiency in the banking industry has increased
tremendously worldwide in the world due to the integration of information technology
into banking operation. The present study seeks to investigate the extent to which the
electronic banking concept has impacted customer satisfaction in Commercial Banks.

1.2 Statement of the problem

Customers in Tanzania are late adopters of the Internet and its applications with
regards to internet banking. However, issues like machine out of order, lack of

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sufficient alternative system which substitutes ATM service when temporary problem
happen in the machine, and innovation, resistance to changes in technology among
customers and service providers as result of fear in risk creates doubts in the minds of
customers thereby affecting their level of satisfaction. However, the bank met with
complaints from customers as regards, malfunctioning Automated Teller Machines
(ATMs), network downtime, online theft and fraud, non-availability of financial
service, payment of the hidden cost of electronic banking like Short Message Services
(SMS), for sending an alert, mandatory acquisition of ATM cards, non-acceptability
of Tanzanian cards for several international transactions amongst others (Kagita,
2013). Also lack of skilled staff, low internet penetration, low bank account financing
capacity, and lack of timely delivery of physical goods Jalal Nabi & Marzooq, (2011

To address these challenges CRDB bank competed (organized resources) to attract

their customers in different ways by providing convenient, accessible, and acceptable
services to their customers. One of the most important of these services is the
electronic services that have contributed significantly to increase the distance between
customers and the bank Almazari & Siam, (2008).

Electronic banking in CRDB was adopted to improve their service delivery, decongest
queues in the banking hall, enable customers to withdraw cash 24/7, aid international
payment and remittance, track personal banking transactions, request for an online
statement, or even transfer a deposit to a third-party account. The efforts influence
CRDB bank to have ambitious to understand its impact on customer satisfaction.

Therefore, this study is aimed to finding out the impact of e-banking services on
customer satisfaction, CRDB, Mbulu branch-Manyara-Tanzania.

1.5 Objectives of the Study

This section is composed of the objectives of the study. It is divided into two sections
namely the general objective that draws its focus on the main purpose of the study.
Specific objectives in the subsection elaborate on the specified purposes of the study.

1.5.1 The General Objective of the Study.

The general objective of this study is to examine the impact of e-banking on

customers satisfaction and taking CRDB bank as a case study

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1.5.2 Specific Objectives of the Study

i. To examine the quality of e-banking services provided by CRDB banks on

customer satisfaction
ii. To examine the contribution of e-banking services on effectiveness and
efficiency of service delivery
iii. To examine challenges of traditional banking imposed by e-banking services.

1.6 Research Questions

i. How the quality of e-banking services creates customer satisfaction?

ii. What are the contributions of e-banking services on effectiveness and
efficiency of service delivery into banks?
iii. What are challenges of traditional banking imposed by e-banking services?

1.6.1 Significance of the study

This research report will provide new knowledge and information concerning e-
banking in fill the research gap as stated in this report. Hence it can provide
background for various scholarly and professional works;

This research report will be used as reference by other researchers who will be
interested in studying e-banking and its influence on customers in the near future as
the research gap emerges about e-banking.

This report can be used to provide background information that will help banks and
customers to understand e-banking and assist the bank during renovations to meet
customer demands.

1.7 The scope of the study

The research study was centered in Manyara region. Manyara region is located at the
north of Tanzania. It has the population of over three million people as per census of
2012. It is one of the growing regions in Tanzania. The case study of this research is
CRDB Bank Mbulu Branch. The population of this study is comprised of employees
and customers of CRDB Bank at Mbulu branch. The sample space of 40 respondents

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was included in providing information to the researcher’s questionnaire and interview
thesis, 4 employees and 36 customers of CRDB bank.

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 CHAPTER TWO
LITERATURE REVIEW

2.1 Introduction

This chapter covers the sections such as theoretical review, empirical review and the
conceptual framework.
The theoretical literature review centers its focus on the theories and other important
concepts explaining e-banking and its impacts to customer satisfaction. The empirical
part discusses findings from prior researches and publications of other scholars and
professionals attempted to study the subject matter.

2.1 Definitions of key terms

Customer satisfaction; Customer satisfaction is defined as a measurement that

determines how happy customers are with a company’s products, services, and
capabilities. Customer satisfaction information, including surveys and ratings, can help
a company determine how to best improve or changes its products and services. An
organization’s main focus must be to satisfy its customers. This applies to industrial
firms, retail and wholesale businesses, government bodies, service companies,
nonprofit organizations, and every subgroup within an organization (ASQ, 2018)

E-banking; Electronic banking is a form of banking in which funds are transferred

through an exchange of electronic signals rather than through an exchange of cash,
checks, or other types of paper documents. Transfers of funds occur between financial
institutions such as banks and credit unions. They also occur between financial
institutions and commercial institutions such as stores. Whenever someone withdraws
cash from an automated teller machine (ATM) or pays for groceries using a debit card
(which draws the amount owed to the store from a savings or checking account), the
funds are transferred via electronic banking (Encyclopedia, 2020).

2.3. Theoretical Review

Theoretical literature review refers to the review of relevant theories and concepts
related to the study from books or other different scholarly materials relevant to the
research problem being investigated under the study.

2.3.1. Innovation Diffusion Theory

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This theory postulated by Roger (1983) explains individuals’ intention to adopt a
technology as a modality to perform a traditional activity. The critical factors that
determine the adoption of an innovation at the general level are the following: relative
advantage, compatibility, complexity, tri-ability and observe-ability. Many banks have
found it advantageous to adopt ICT in their operation in order to improve their
efficiency. This is achieved through development of websites and mobile applications
that suit the customer needs. Customers are therefore able to access their accounts
anywhere as long as they are connected to the internet.

This theory is concerned with how a new technological idea, artifact or technique, or
new use of an old one, migrates from creation to use. According to IDT, technological
innovation is communicated through particular channels, over time, among the
members of a social system. The stages through which a technological innovation
passes are: knowledge (exposure to its existence, and understanding of its functions);
persuasion (the forming of a favorable attitude to it); decision (commitment to its
adoption); implementation (putting it to use); and confirmation (reinforcement based
on positive outcomes from it) Arnaboldi & Claeys, (2008). In the same way, internet
banking has been enhanced due to cyber threats and fraud. Early users generally are
more highly educated, have higher social status, are more open to both mass media
and interpersonal channels of communication, and have more contact with change
agents. Mass media channels are relatively more important at the knowledge stage,
whereas interpersonal channels are relatively more important at the persuasion stage.

Various E-banking Services

United Bank, (2018) several banks provide Card Banking Services through ATM &
POS. the banks have started rendering MASTERCARD Card and VISA services and
have also finalized arrangements to start offering China Union Pay card service soon
offers Debit Cards (i.e. Hiber Card) and can use these cards for withdrawal of cash
and shopping from customers’ accounts through any of ATM and POS placed at
convenient locations. Thus, employees of any esteemed organization will have full
access to banks’ Electronic Payment services (ATM & POS).

Banks provide SMS and Internet Banking services to customers. For example, the
state of the art Hibir Mobile and Hibir Online Banking services area 24 hours link to
account information with a view of all customers’ banking transactions that enables
customers to access details on dealings regarding current, saving and overdraft
10
accounts, loan particulars, Letter of Credit, Checkbook status, exchange rate value of
foreign currencies and many other relevant details to keep a customer abreast of all
his/her financial demands he/she has with a bank, 24/7United Bank, (2018).

Moreover, using new upgraded Online Banking Services customers can transfer funds
from one of their accounts to another or to other Bank customer’s accounts, effect
local remittances, set standing instructions on certain recurrent transactions and
upload bulk payments such as salary of employees. Online Banking Service will
enable a customer to access and print a bank statement free of charge (real-time)
without coming to any branch United Bank, (2018).

United Bank, (2018) citing Hibir Online and Hibir Mobile services the followings are
common e-banking services offered; Balance Enquiry, Mini Statement, Viewing
Forex Rate, Fund Transfer, Fund Transfer to Own account (s) in United Bank, Fund
transfer to Other person’s accounts in United Bank, Local Remittance from an
account, Recurrent Payments (standing instruction), Viewing loan balance, Loan
Repayment Amount and LC’s Outstanding, Cheque Stop Payment Request, Cheque
Book Request, Cheque Status Request, Utility Payment, PIN management and
authorization, Bulk payment, Branch or ATM location information, Account alerts,
security alerts, and reminders, and Balance and Transaction notifications.

Forms of e-banking:

Automated teller machines (ATM): An automated teller machine or automatic teller

machine (ATM) is an electronic computerized telecommunications device that allows
a financial institution’s customers to directly use a secure method of communication
to access their bank accounts, order or make cash withdrawals (or cash advances using
a credit card) and check their account balances without the need for a human bank
teller UK Essays, (2018).

Tele banking: By dialing the given Telebanking number through a landline or a

mobile from anywhere, the customer can access his account and by following the
user-friendly menu, entire banking can be done through Interactive Voice Response
(IVR) system UK Essays, (2018).

Smart card: A smart card usually contains an embedded 8-bit microprocessor (a kind
of computer chip). The microprocessor is under a contact pad on one side of the card.
Think of the microprocessor as replacing the usual magnetic stripe present on a credit
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card or debit card. The microprocessor on the smart card is there for security. The host
computer and card reader actually “talk” to the microprocessor. The microprocessor
enforces access to the data on the card. The chips in these cards are capable of many
kinds of transactions UK Essays, (2018).

Debit card: Debit cards are also known as checks cards. Debit cards look like credit
cards or ATM (automated teller machine) cards, but operate like cash or a personal
check. Debit cards are different from credit cards. While a credit card is a way to “pay
later,” a debit card is a way to “pay now.” When you use a debit card, your money is
quickly deducted from your checking or savings account UK Essays, (2018).

SMS banking: Short Message Service (SMS) is the formal name for content
informing. SMS banking allows clients to make simple transactions to their bank
accounts by sending and getting text messages.

Point of Sale (POS): is inventive electronic money transferring system that allows the
customers of banks to pay for their purchases by their ATM and credit card at any
POS enabled retailer.

Online banking: Online banking or internet banking is banking services that allows
customers to conduct financial transactions on a secure website operated by their retail
or virtual bank, credit union or building society. Online banking offers features such
as bank statement, electronic bill payment, fund transfer, loan applications and
transaction and account aggregation that allow users to monitor all of their account in
one place.

Mobile banking: Mobile banking (M-banking) or Wireless Application Protocol

(WAP) is a term used for performing balance checks, account transactions, payments,
money transfer etc. via the mobile device such as the mobile phone, or Personal
Digital Assistant (PDA). Mobile banking is most often performed via SMS or
accessing the internet through the mobile phone, mobile device or through special
programs downloaded to the mobile device.

E-cheque: according to UK Essays, (2018) an e-Cheque is the electronic version or

representation of paper cheque. An e-Cheque is a method of transacting money online
offered by online payment companies such as PayPal. E-Cheques are similar to
normal cheques in that they are a legal document requesting the transfer of money
from one account to another. Also, much like a normal cheque, they require manual
12
clearing to complete the transaction which means they do not reach their destination
as fast as a faster payment or debit card payment would. We do not offer an e-Cheque
facility (Natwest Support Centre, 2017)

Other forms of electronic banking: UK Essays, (2018) provides extra forms of e-

banking which are; Direct Deposit, Electronic Bill Payment, Electronic Check
Conversion, Cash Value Stored, Etc.

Core capacities for banking services provider

According to (Hyde, 2015) to continually improve the performance of e-banking

services, several core-capacities are critical: Planning new IT infrastructure,
enhancing transaction security, providing value-added content, delivering
differentiated services, managing customer relationships. The retention and expansion
of relationships with relative older and lower IT awareness customers (Wu et al.,
2005)

Features of electronic banking:

Easy Electronic Fund transfer facility, Better efficiency in Customer relationship

management, Making the Payments of bills like electricity, telephone bills, and mobile
recharge, It introduces virgin & innovative banking products & services, It can view
of balance of accounts and statements, E-banking can bring doorstep services, Balance
and transaction history search, Transaction history exports, Order mini statements,
Mobile banking, Pay anyone payments Multi Payments, and SMS banking services
(Shikher, 2018).

Shortcomings of e-banking

Traditional Banking Habits

Despite the benefits of online banking, 49 percent of American adults do not

participate in it at all. This happens mainly because traditional banking is what many
people are used to and it can take time for them to break habits. So, online banking
marketers should focus on ways to convince traditional banking users to start using
online banking services. These marketing efforts should specifically highlight the
numerous benefits of online banking. They need to show people how online banking
can solve traditional banking problems more efficiently (having to actually go to bank
branches higher fees (Beers, 2019)
13
Security

Security is one of the most significant challenges for online banking marketers. This is
because, in the past, if a robber was going to steal a person’s bank savings, he or she
would have to break into the bank vault, and make a daring escape with the money.
This was an extremely difficult prospect and involved a lot of danger and risk. With
online banking, cyber criminals simply need to ascertain certain personal information
to break into a person’s account and steal their money. It can be done anonymously,
and involves significantly less physical danger than in the past. In fact, in the U.K. in
2015, roughly 130 million British pounds were stolen from online bank accounts
through fraud. So, security is still a major issue for online banks, and their customers.
Marketing professionals in the online banking sector need to focus on demonstrating
and explaining the security of online banks to overcome this challenge (Agarwal,
2019).

Transaction Difficulty

It can be significantly more difficult and time consuming to deposit or withdraw

money from an online bank. Not only do online banks often have fewer ATM’s than
their traditional counterparts, but it also can simply take longer amounts of time for
deposits to be processed and put into a bank account. For example, it takes roughly 3-
5 days for deposits to show up in accounts for PayPal, one of the largest online banks.
This is an issue that online banking marketers will most likely struggle with, until
online banks speed up their transaction times (Beers, 2019).

Technical Issues

Because online banks rely so heavily on their online platforms, this means that they
can generate substantial losses if their systems crash or if there are bugs in their code.
A single technical issue that causes a bank to be down for a day could cost the bank
millions in losses. It can also wreak havoc for the bank customers who may not be
able to make payments or conduct transactions during the time that the site is down.
54 percent of consumers now use a mobile banking app. So, it is a key not just for
banks to have their online platforms running smoothly, but also, their mobile app. loss
of funds or data due to a crash is something that can be very worrisome for bank
customers. So, marketers should prioritize alleviating this worry by explaining how
account funds will not be lost if technical issues occur (Beers, 2019).

14
Small Budgets

Many startups have to operate on shoestring marketing budgets before they grow to a
larger size. Obviously, this can be a major challenge. If your marketing budget is
small, then you need to focus on the priority expenses. The inbound marketing
strategies of creating a search engine optimized website, making accounts for all of
the biggest social media networks (Facebook, LinkedIn, Twitter, etc.) and starting a
blog should all be prioritized. On your website, you should also have an option to
allow visitors to join your mailing list. Furthermore, a good PPC campaign can be a
very good investment for your company. In fact, businesses make an average of $3 on
every $1.60 they spend on Ad words (Agarwal, 2019)

Internet Banking Security Issues

Passwords

The key to protecting your Internet banking account is protecting your password.
Using a strong password -- one that contains mixed-case letters, numbers, and even
symbols if the bank allows it -- will decrease the likelihood of a hacker cracking the
password and gaining access to your account. You should also ensure that the
password to access your company’s accounts is not the same as any other password
you use, since not every site maintains the same level of security a bank does. If a
hacker manages to steal a password from an insecure site, he can access any account
that password unlocks Kazmeyer, (2016).

Phishing

One of the primary methods a hacker gains access to account information is through
phishing, or tricking the victim into giving up the information voluntarily. A hacker
might send an e-mail or even call, pretending to be a representative of the bank and
informing you about some irregularities with your account. All you need to do to sort
things out is to provide your password or other account information to verify your
identity. If you ever receive a communication that appears to be from your bank and
requests this type of information, contact your bank by phone immediately. Do not
give out account information to a caller, and do not click any links provided in any e-
mails that claim to be from your bank. You should also ensure that any employees
with access to the company’s accounts follow the same procedures Kazmeyer, (2016).

15
Key loggers

Key loggers are malware programs that record keystrokes and other data, allowing a
hacker to capture your password as you enter it. Maintaining up-to-date antivirus
suites on your company computers can prevent these malicious programs from
gaining a foothold, and setting up your network’s firewall to monitor outgoing traffic
can help you determine when an infection occurs. Many key loggers and viruses use
email to travel from computer to computer, so adding anti-virus protection to your
company’s email server can help filter out these attacks Kazmeyer, (2016).

Two-Factor Authentication

If your bank offers two-factor authentication, adopting the technology is a great way
to keep your account information safe. Two-factor authentication requires a second
code when logging into your account, either provided by an electronic token, or via
message sent to a registered cell phone or other device. The extra layer of security
renders your password useless to a hacker without the accompanying code Kazmeyer,
(2016).

2.4 Empirical literature review

2.4.1 A studies in developing countries

Nupur (2010) performed an analysis on the electronic banking and the satisfaction
level of customers in Bangladesh. The researcher selected a sample size of 250
respondents to collect the data. The researcher used SERVQUAL model to measure
the association among the level of customer satisfaction and electronic banking. The
observation showed that a relationship exists between the electronic banking services
and customer satisfaction level. The main dimensions examined are reliability,
empathy, responsiveness and assurance which results in adequately satisfying the
customers, whereas, the tangibles dimension does not have any link to customer
satisfaction.

Farooqui & Rajani, (2017) Analysis on E-Banking Issues & Challenges stated that E-
banking has gained the momentum in the Indian context. Most of the banks have
implemented E-banking facilities which are beneficial to both i.e., banks and the
customers. Though there are many challenges and hurdles in the smooth
implementation of E-banking system in India but at the same time E-banking is
16
having a bright future. The use of ATMs, Debit and Credit has become a good source
of usage of information technology and has paved a way for Digitalization.

As analyzed by Santouridis et al., (2009) empirically investigate the internet banking

in Greece by examining the customer satisfaction and the quality of electronic banking
services. The researchers have used SERVQUAL model to measure the electronic
banking services. From the results, they observed that the dimensions of assurance,
responsiveness and reliability have a significant and positive impact on customer
satisfaction level. In their study, reliability is found to have the most strong and
highest impact on customer satisfaction and recommended that the dimensions which
do not have association with level of customer satisfaction needs to be improved by
the banking sector.

Sadeghi and Hanzaee (2010) have investigated the factors of customer satisfaction in
the usage of internet banking services in Iran. The study has been conducted to
determine the factors which examine the customer satisfaction with the services of
electronic banking. The researcher reveals that reliability, design of the website,
image, accuracy and impression of the management of bank are found to have the
most significant impact on the satisfaction level of customers. The variables of
privacy and security also have an impact on customer satisfaction, but its impact is
very least.

Ahmad and Al-zu‟bi (2011) performed a research related to how the functionality of
electronic banking is related to the consequences of customer satisfaction. The
research has been done by considering banks of Jordan. Through the random sampling
technique, the sample size chosen by the researchers is 185. It has been found that the
variables which include privacy, accessibility, design, convenience, content and
security has been emerged to have a significant influence on the customer satisfaction

2.4.2 A studies in developed countries:

Kazmeyer, (2016) analysis on Security Issues Relating to Internet Banking provided

that banking via the Internet is an easy way to monitor your business’s finances,
allowing you to view payments and deposits on demand. This easy access to financial
accounts makes Internet banking a common target for hackers and other online
criminals, however. Understanding the security issues relating to Internet banking can
help you keep both your personal and business accounts safe from intruders.
17
The analysis of Hyde, (2015) on e-banking: review of literature shows that the mostly
used e-banking services are inter account transfer, payment to other personal account,
transfer to credit card account, recharge mobile phones, standing order transactions,
savings, current and fixed deposit account application and debit/credit card. No doubt
studies reveal that e-banking reduces time in transactions as well as crowd in the
banks. One can easily sit at home or at cyber to have transfer of money, recharge of
vouchers, making FD’s, etc. Few banks have offered full-service online banking
successfully.

Banks have not only provided e-banking facility to the customers but also increased
the satisfaction level of customers. In India, people are still not fully aware of
advantages of e-banking but those who are tech savvy are using e-banking
successfully. There was a time when customers used to go the bank, Insurance
companies, and railway station for various purposes and used to stand in long queue
for hours and hours but now many people prefer e-banking to save time, energy, fuel,
money etc. Important thing is that people need to be technically sound so that they can
use e-banking facility properly. Banks should also generate trust in the minds of
customers that e-banking is safe Hyde, (2015).

2.5 Research Gap

Fernandez, (2016) argues that the research gap is a problem in a particular field which
has not been addressed. The real context is not the research gap but one that will
surely indicate or lead you to the problem. The most researchers have conducted a
research about the issues of e-banking but they have not generalized the conclusions
on the findings in the worldwide. Most of research findings show on specific
objectives in specific organization toward the roles and applicability of e-banking on
least developed countries and developed nations, the backwardness and its impact to
customer satisfaction, also different researchers have not well investigated on the
impact of e-banking services to customers’ satisfaction in Manyara, Tanzania.

Therefore, due to these reasons, a researcher interested to assess the impacts of e-

banking on the satisfaction of customers citing CRDB Bank Mbulu branch (Manyara,
Tanzania).

18
2.6 Conceptual Framework

Adom, (2018) defined a conceptual framework as a structure which the researcher

believes that it can explain well the natural progression of the phenomenon studied.
According to him, in a statistical perspective, the conceptual framework describes the
relationship between the main concepts of a study. From the figure 2.1 below show
the relationship between independents variables i.e. Service quality (accessibility,
communication, security and employees’ competence), and effectiveness (Transaction
time, speed and operation cost) and dependent variable (Customer Satisfaction).
Below is the conceptual framework which shows the impacts of e-banking on the
satisfaction of the customers citing on CRDB bank Manyara, Tanzania.

19
Figure 2.1: Conceptual frame work
Independent variables Dependent Variables

Service quality

 Security
 Accessibility
 Communication
 Employees’ competence

CUSTOMER SATISFACTION

Service effectiveness

 Transaction time reduced

 Speed and efficiency
 Operation costs reduced

Source: Researcher data, (2020)

Definitions and measurements of variables

service quality

Service Quality defined as comparison between expectations and performance

(perceived) values of the service. A business with high service quality will meet or
exceed customer expectations whilst remaining economically competitive. Evidence
from empirical studies suggests that improved service quality increases profitability
and long-term economic competitiveness. Improvements to service quality may be
achieved by improving operational processes; identifying problems quickly and
systematically; establishing valid and reliable service performance measures and
measuring customer satisfaction and other performance outcomes. In this study the
researcher asses the service quality provided by the CRDB bank basing on the security,
accessibility, communication and employee’s performance and show their relationship
with customer satisfaction.

Communication means both informing customers in a language they are able to

understand and also listening to customers. A company may need to adjust its language
20
for the varying needs of its customers. Information might include for example,
explanation of the service and its cost, the relationship between services and costs and
assurances as to the way any problems are effectively managed. If the bank
communication system was well improved led to the customer satisfactions

Employees competence is the possession of the required skills and knowledge to

perform the service. The researcher asses the competence of employees who serving
customer by asking customer about how they respond during e-banking and when
customer faced a problem. The competence of. employees create customer satisfaction
and trust of the bank services

Security is the physical safety of the customer or privacy of client information, Are the
customer records of transaction kept confidential in the bank system? And the customer
account is free from web crimes? If there was a security in using e-banking system
customer can be satisfied and if the system was not secured it led to dissatisfaction.

Access refer to the approachability of the service area or ascertain how does it easy to
visit the service organization by the customers when they want to get services. On the
other hand, it refers to easiness of customer to access organization services at any time.
A researcher assessed whether the bank customers have an access to the services
available at any time through internet and anywhere. The accessibility of bank service
creates customers satisfactions.

service effectiveness

The Service Effectiveness team is responsible for ensuring there are robust systems and
processes in The Service Effectiveness team is responsible for ensuring there are robust
systems and processes in place that support services to deliver high quality, safe and
effective services. In assessing the services effectiveness, the researcher deals with the
transaction time, speed and efficiency as well as the cost of operation. This was also
important in assessing customer satisfaction in e-banking services.

21
Measurement of the variables

Service quality was measured in security, accessibility, communication and

employee’s competence and all these variables was measured using 5-point scale
which are very high, high, average, low and very low. All these variables show the
relationship with customer satisfactions.

Service effectiveness is measured based on time spend by individual customer to make

transaction, speed and efficiency of service and operation cost in obtaining e- banking
services. The measurement of effectiveness uses the 5point scale which are Very high,
high, average, low and very low.

22
 CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction

This chapter covers research design, Unity of inquiry, Population and sample size
Sampling Technique, Data Collection Methods, and Data Analysis.

3.2 Research Design

This research was set in a case study design, which aimed at assessing the impact of e-
banking services on customer satisfaction particularly CRDB Bank Mbulu branch -
Manyara. The motivation for adopting a case study in this research were due to the
advantages of using a case study such as:

i. It is a fairly exhaustive method which enabled the researcher to study deeply

and thoroughly different aspects of the research questions.
ii. It is flexible in respect to data collection methods.
iii. It saves costs in terms of both time and money.

3.3 Unity of inquiry

Kothari (2004) suggests that Unity of inquiry represents the object that are observed
and about which information is systematically collected within the study. The study
was conducted at CRDB bank client and customer and the researcher picked few
respondents and all samples provided sufficient information for data collection.

3.4.1 Population and sample size

In assessing the impact of e-banking service on customer satisfactions, the population

includes CRDB bank employees and customers and from the population a sample size
was selected to represent the whole population.
Based on the above population, the budget and time constraints, by subjective
judgment of the researcher the sample of 40 respondents was selected to represent the
overall population.

23
The distribution of the sample size and population is shown in the table below.

Table 3.1 Population and sample size

NO Types Respondents Sample

1 Workers of CRDB Bank 4
2 Customers of CRDB Bank 36
Summation 40
Source: researcher 2020

3.4.2. Sampling Technique

In this study the researcher uses the convenience sampling where a sample was
selected based on judgments. The researcher picked respondents showing willingness
to give information, competent in e-banking services, complying with time limit and
target involved. A researcher uses convenience sampling not just because it is easy to
use but also has other research advantages like it allow the researcher to obtain basic
data and trends regarding his study without the complications of using a randomized
sampling.

3.5 Data collection methods

Both primary and secondary data collection methods were used in obtaining relevant
data involving Questionnaires, Documentary sources, Participatory Observations and
interviews. Due to the topic’s sensitivity, reliability, limited resources and finances,
these methods were used in the study.

3.5.1 Primary data

Primary data include data which is collected for the first time by the researcher.
Primary data was collected through the means of questionnaires, interviews and
observations. In observation, the researcher was observed events that happening at the
organization of case study (CRDB bank at Mbulu Branch). Participation through
observation enabled the researcher to share experiences by not merely observing what
is happening but also feeling it (Gill and Johnson, 2002:144). Also, the researcher uses
questionnaires to 40 people in the sample size and interviewed several workers as he
observes events happening at the organization. The questionnaire and interview thesis
are prepared in simple and easy language so it was easily understood.

24
3.5.2 Secondary data

The secondary data was obtained through reading different books, journals, articles,
papers, going through the internet, BOT annual reports, CRDB Bank reports, and
newspapers. The advantage of secondary data is that they are much less expensive and
permanent data. However, the researcher uses secondary data in supporting argument,
increasing knowledge about the topic of study and to show the relevance of primary
data.

3.6 Data Analysis

The data after being collected were analyzed in both quantitative and qualitative
methods by drawing up the SPSS and project its results. Data was analyzed and then
was presented in form of tables and percentage. The information or data was given in
form of words and this qualitative method was used so as to give more elaboration
about the problem and to create better understanding as respondents’ perception was
required.

3.6.1. Descriptive Statistics

Generally, data was analyzed using the Statistical Package for Social Science (SPSS)
software. Descriptive data analysis was employed in the analysis of the demographic
or biodata information. The statistics computed include frequency distribution and
percentages. For this study, descriptive data analytical approaches were employed to
analyze the variables related to service quality (security, accessibility, communication
and employee’s competence) and effectiveness (transaction time, speed and efficiency
and operation cost) of e-banking services. The analyzed statistics included frequency
distribution and percentages for each of the variable of interest.

25
 CHAPTER FOUR
PRESENTATION AND DISCUSSION OF FINDINGS

4. 0. Introduction
This chapter involves presentation and discussion of findings on the assessment of the
impact of e- banking service on customer satisfaction. The case study of CRDB bank
Mbulu branch.

4.1 Response Rate

During data collection, self-administered questionnaires were distributed to a mixed
category of employees of CRDB Bank Mbulu Branch and customers. All of 40
respondents were contacted and respond to the questions accurately (i.e. 100%)

4.2 Respondents’ demographics

The personal information of the respondents collected together with the respondents’
answers were gender, age, education level, marital status, official position, and their
work experience.

4.2.1 Composition of respondents by gender

The researcher asked a question on gender of the respondents. The researcher wanted
to prove reports that more men have bank accounts than women, for proving the
reviews the researcher wanted to ask the subscribers and employees the composition of
gender.The results are presented in table 4.1 below.

Table 4.1 Composition of respondents by gender

Frequency Percent
Valid Male 23 57.5
Female 17 42.5
Total 40 100

Source: The researcher Data 2020

The findings show that composition of respondents a valid sample size of 40 CRDB
Bank employees/customers had 23 respondents who were males rating 57.5%. and 17
respondents were females which make it 42.5% is of all respondents.

26
As gender affects personal experience and view of issues, the ratio of females to males
in this research is able to provide balanced views and opinions of respondents on the
study since both sides were given almost equal chance in the study. Since this study
provides an improvement the gender gap is not big.

4.2.2 Composition of respondents by age

The researcher asked a question on the age of respondents basing on employment laws
and regulations from 18 years old to 60 years old of retirement. Respondents below 18
years couldn’t be valid as per this questionnaire research’s study case. And the results
are presented below in Table 4.2

Table 4.2 Composition of respondents by age

Frequency Percent
Valid 18-30 7 17.5
31-40 9 22.5
41-50 11 27.5
51-60 10 25
61 and above 3 7.5
Total 40 100.0

Source: the researcher’ data 2020

From the valid sample size of 40 respondents 7 people are young men and women
between 18 and 30 which comprise 17.5% of all respondents.

Respondents who are matured as of the age of 31 to 40 were 9 which make it 22.5%.
The other group of matured people as of the age between 41 to 50years comprised of
11 respondents which make it 27.5%.

Respondents aged between 51 and 60 carries the frequency of 10 respondents at the

percentage of 25%. The age of 61 and above had 3 respondents who basically CRDB
Bank was making 7.5% of all respondents.
These findings display had respondents ranging from 18 years of age to above 60
years; however, the study assumes that most respondents above 61 years of age are not
prone to technological tools and hence fear the change and resist the change.

The findings show that most respondents however are young at the age between 41
years and 50 years at the rate of 27.5% followed by people of age from 51 to 60 years

27
rating 25% which insures that CRDB Bank’s e-banking motivated respondents who
actively use e-banking services.

Hence respondents’ opinions and views are therefore from a sample size with the
majority of them being matured since most members of the sample size possesses
enough age which signifies stable mind and matured character.

4.2.3 Composition of respondents by marital status

The researcher had interest on the marital status of the employees and customers of
CRDB bank and the results are presented in the table 4.3 below

Table 4.3 Composition of respondents by marital status

Frequency Percent
Valid Single 10 25
Marred 12 30
Widow 7 17.5
Divorced 6 15
Separated 5 12.5
Total 40 100.0

Source: the researcher’s data 2020

The findings show that 10 respondents out of the sample space being CRDB Bank
employees and customers are single which presents 25%. Married respondents were 12
out of the total of 40 respondents which make it 30%. Widowed respondents were 7
which make it 17.5%. Divorced respondents were 6 rating 15% of all respondents.
Respondents with separated status were 5 at the percentage of 12.5%

Therefore, the composition of respondents in this study at least 50% of respondents did
not have marriage and family life experience hence provided personalized view of
opinions while 75% of respondents were living in their own families hence they were
expected to provide a wider view of opinions which resulted into balanced opinions.

4.2.4 Composition of respondents by level of education

The researcher wanted to know the levels of education of the respondents, the level of
education has influence on adoption, motivation and success of e-banking activities,

28
starting from communication languages, technical terms and procedures with
communication skills. Therefore, the researcher wanted to know the levels of education
of employees and customers of CRDB bank Mbulu branch. The results are presented in
the table 4.4 below

Table 4.4 Composition of respondents by level of education

Frequency Percent
Valid Primary school 7 17.5
Secondary school 11 27.5
Advanced level 3 7.5
Undergraduates 6 15
Graduates 7 17.5
Post graduate 6 15
Others 0 0
Total 40 100.0

Source: The researcher’s data 2020

The findings indicate that 7 respondents out of 40 respondents had primary school
education, making 17.5%. 11 respondents had secondary school education; it makes
27.5% of all respondents. Respondents with advanced level education carried 7.5% by
the number of 3 respondents. There were a class for respondents with non-classified
level of education level, 6 respondents had undergraduate education, and it makes 15%
of all respondents. 7 respondents out of 40 respondents had bachelor degree, making
17.5%. Respondents with postgraduate education carried 15% by the number of 6
respondents.

This implies that all respondents are literate having the majority having attended at
least a collage, with the sample space representation of 76% of all respondents. This
signifies that respondents have educated and professional views on the subject matter
e-banking and its impacts on customer satisfaction.

4.2.5.Occupation of the respondents

The researcher wanted to know the occupations of most customers, since the money
flow of an individual is one among the influence on decision to bank or not to bank.
The results are brought below.

29
Table 4.5: Occupation of the respondents

Frequency Percent
Valid Not employed 2 5.0
Employed 17 42.5
Self employed 21 52.5
Total 40 100.0

Source: Field Data (2020)

Table 4.4 above tends to show the respondents occupation can affect them decision
whether to bank or not bank. In this study the research findings revealed that 52.5%
were self-employed, 42.5% were employed while 5.0% were not employed through the
results can help the researcher to identify that the occupation of respondents matters
since the large number of employed and self-employed can identify that they can be
able to understand the factors for of e-banking considerably and under their
satisfaction.

The findings show that the respondents represented well the population since the
location of the branch is situated in Mbulu where few people had made progress in
high schools and universities.

4.2.6. Composition of respondents by work experience

The researcher was interested in experience of the respondents by years they started
involving themselves with NSSF either as workers or subscribers as of the days of
filling the questionnaire or experience of the respondent regarding his/her current
official position. Since theories say that companies which employ workers with higher
experience in computer are likely to perform better than new members in the industry,
the researcher wanted to prove the theories.
The results are presented in the table 4.6 below

30
Table 4.6 Composition of respondents by work experience

Frequency Percent
Valid 1 year to 10 years 20 50
11 years to 20 years 12 30
21 years to 30 years 6 15
31 years to 40 years 2 5
41 years and above 0 0
Total 40 100.0

Source: The researcher Data 2020

Respondents who are involved with banking industry for between 1 year and 10 years
were 20 at the percentage of 50%. Respondents with the experience of between 11
years and 20 years were 12 rating 30%. Respondents with experience between 21 years
to 30 years are 6 rating 15% of all respondents. Respondents with experience between
31 years and 40 years are 2 which make the percentage of 5%. The class of respondents
with the experience of 41 years and above had had no respondents.

The findings show a good number of respondents who responded on the research
questionnaire had good experience of between 1 year to 20 years, and they were rating
80%. ‘Ceteris paribus’ this experience is very important and motivated to learn and use
e-banking technologies.

4.3 Examinining the quality of e-banking services provided by CRDB bank in

customers satisfaction

The researcher asked the respondents on the quality of e-banking services provided by
CRDB bank in customer satisfaction. However, the researcher provided the service
quality dimensions i.e. security, accessibility, communication and employees
competence in service delivery to the customers and the results are discussed below.

31
 Table 4.7 Examining the quality of e-banking services provided by CRDB

S/N DESCRIPTIO A B C D E TOTAL

N

quality of e- F % F % F % F % F % F %
banking
services
1 Security 34 85 6 15 0 0 0 0 0 0 40 100
2 Accessibility 40 100 0 0 0 0 0 0 0 0 40 100
3 Communication 33 82.5 7 17.5 0 0 0 0 0 0 40 100
4 Employees’ 34 85 6 15 0 0 0 0 0 0 40 100
competence

Where,

A=Very high, B=High, C= Average D=Low, E=Very low

Source: The researcher’data. 2020

Security

Regarding the issue of security 34 respondent out of 40 respondent i.e 85% say that
security was very high and 6 repondents i.e 15% say that the security was high. This
shows that CRDB bank provides secured e-banking service for 100% and customers
were satisfyied with the security service provide by the bank.

Accessibility

Regarding the access of e-banking service to customers all 40 respondent i.e 100% say
that the accessibility of service was very high. This means that the customers of CRDB
bank have an access of e-banking service at any time and any where without any
complications and all customers were satisfyied.

Communication

Regarding the issue of comunication the results shows that 33 respondent 82.5% say
that rate of comunication was very high while 7 respondents i.e 17.5% say that the rate
of communication was high.This shows that CRDB bank provide the right information

32
 to their customers at a right time and the customers were satisfied when they are using
e-banking service.

Employees competence

Regarding the issue of eployees compentence in provision of e-banking services 34

respondents i.e 85% say that the competence of employees was very high and 6
repondents i.e 15% say that the employees competence was high. This shows that the
customers of CRDB bank was served by the compentent people in e-banking and
customers were satisfyied.

4.4 Examining the e-banking service effectiveness on customer satisfaction at CRDB

bank.

The researcher asks the respondents about the effectiveness of e- e baking service as it
was provided by CRDB bank clients and how they are satisfied in term of time spend
for making transaction, speed and efficiency of service provided and operation cost
during transaction. A researcher wants to know whether the customers satisfied with e-
banking services in term of effectiveness. The result was shown bellow

Table 4.8 Description of e- banking serivice effectiveness on customer satisfaction.

S/N DESCRIPTION A B C D E TOTAL

Service F % F % F % F % F % F %
effectiveness
1 Transaction time 34 85 6 15 0 0 0 0 0 0 40 100
reduced
2 Speed and 40 100 0 0 0 0 0 0 0 0 40 100
efficiency
3 Reduction in 6 15 19 47.5 15 37.5 0 0 0 0 40 100
operation cost

Source: The researcher’s Data 2020

4.4.1 Transaction time reduced

Regarding the transaction time reduction 34 respondents i.e. 85% say that the time
spend in making transaction was reduced at very high rate while 6 respondents i.e. 15%
say that the reduction in transaction time has high. This shows that the customer before

33
e- banking spend more time to make transaction but now they spend very few minuses
to make transactions.

34
?????//

4.4.2 Speed and efficiency

Regarding the speed and efficiency of e- banking service 40 respondents i.e. 100%
agrees that the speed and efficiency were very high during e-banking service. This
means that the CRDB bank provide the e-banking service efficiently and at very high
speed compared to the past in traditional banking service this was due to the
improvement in technologies.

4.4.3 Reduction in operation costs

Regarding the cost of operation reduction, the 6 respondents i.e. 15% say the cost
reduction was very high, 19 respondents i.e. 47.5% say that the cost reduction was high
while 15 respondents i.e.37.5% say that the operation cost reduction was average. The
results show that cost of operation was reduced at some extent and customers satisfied
somehow.

4.5 Challenges of traditional banking imposed by e-banking services

The researcher asked the respondents on what respondents consider to be the

challenges of traditional banking imposed by e-banking services. However, the
researcher established guidelines for respondents and the results are discussed below.
The results are presented in the following table:

Table 4.9 challenges of traditional banking imposed by e-banking services.

S/N DESCRIPTION A B C D E TOTAL

Challenges of e- F % F % F % F % F % F %
banking services
1 Increased 21 52.5 12 30 7 17. 0 0 0 0 40 100
transaction
5
charges
2 Cyber theft threat 20 50 14 35 6 15 0 0 0 0 40 100
3 Wrong 17 42.5 `23 57.5 0 0 0 0 0 0 40 100
destination
transactions
4 Literacy 33 73.3 6 15 1 2.2 0 0 0 0 40 100
requirement
35
Source: The researcher’s Data 2020

Whereby:

F=Frequency, %=Percentage while A=strongly Agree, B=Agree, C=Neutral,

D=Disagree, E=strongly disagree

4.5.1 Increased transaction charges:

21 respondents i.e. 52.5% strongly agreed that increased transaction charges among
major challenges CRDB Bank encounters provision of e-banking services. Also 30% of
respondents agreed that Increased transaction charges is one among major challenges
CRDB Bank,while 17.5%were neither agreed nor disagreed.

4.5.2 Cyber theft threat:

50% of respondents strongly agreed that Cyber theft threat is one among major
challenges CRDB Bank customers encounters during e-banking service consumption.
Also 35% of respondents agreed that Cyber theft threat is one among major challenges
CRDB Bank customers encounters during e-banking services consuption. While 15%
of the respondents were neither agreed nor disagreed.

4.5.3 Wrong destination transactions:

42.5% of respondents strongly agreed that Wrong destination transactions is one

among major challenges CRDB Bank customers encounters during e-banking services.
Also 57% of respondents agreed that Wrong destination transactions is one among
major challenges CRDB Bank customer encounters during e-banking services.

4.5.4 Literacy requirement

33 respondents i.e. 73.3% strongly agreed that Literacy requirement is one among
major challenges CRDB Bank customers encounters during e-banking services. Also
15% of respondents agreed that Literacy requirement is one among major challenges
CRDB Bank customers encounters during e-banking services use. While 2.2%
respondent were neither agreed nor disagreed.
36
37
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDANTIOS

5.0 Introduction

This chapter presents the summary of the key data findings, conclusion drawn from the
findings highlighted and the researcher’s recommendations for further research.

5.1 The summary of the findings

The general objective of this study was to assess the impacts of e-banking on the
customers satisfaction in banking industry of Tanzania citing CRDB Bank Mbulu
branch. The sample size of 40 respondents comprising employees and customers of
CRDB Bank was proven as valid and their contributions brought up data in
representing the whole population. The findings show that e-banking services have
more contribution on customer satisfaction in CRDB bank in Mbulu, Manyara-
Tanzania.

5.1.1 In examining the quality of e-banking services provided by CRDB bank on

customer satisfaction:

In examining the quality of e-banking services provided by banks on customer

satisfaction, the researcher provided the following basic security; accessibility,
communication, and employees competence.

During assessment of security in service quality the average of 85% of respondents

suggested that service quality in security of service offered by CRDB Bank was very
high in which the average of 15% of respondent argued that security offered by CRDB
Bank in provision of e- banking service was high.

In assessing the service quality in accessibility of e- banking services the average of

100% of respondents suggested that service quality in term of accessibility of service
offered by CRDB Bank was very high. This shows that customers were satisfied with
accessibility of e- banking services since customer may acceess service any time at any
where.

In examining the service quality in communication system, the average of 82.5% of

respondents suggested that service quality in communication system in e-banking

38
service at CRDB Bank was very high in which the average of 17.5% of respondents
argued that communication system on service offered by CRDB Bank was high. This
shows that the customers of CRDB bank were get informed during service delivery
hence they satisfied.

During assessment of service quality on employee’s competence the average of 85% of

respondents suggested that service quality on employee’s competence during service
delivery to customers was very high in which the average of 15% of respondents
argued that employees competent during service offering by CRDB Bank was high.
This shows that cutomers of e-banking was served by competent employees and they
are satisfied

Santouridis et al., (2009) in examining the customer satisfaction and the quality of
electronic banking services. Using SERVQUAL model to measure the electronic
banking services, from observed that the dimensions of assurance, responsiveness and
reliability have a significant and positive impact on customer satisfaction level.

Since IDT admits that many banks have found it advantageous to adopt ICT in their
operation in order to improve their efficiency, with the compliance to Santouridis et al.,
(2009) the average of 88.9% of respondents can prove that customers are satisfied with
the quality.

5.1.2 Examining the e-banking service effectiveness on customer satisfaction at CRDB

bank

In examining the e-banking service effectiveness on customer satisfaction, the

researcher provides the following basic i.e. transaction time, speed and efficiency and
reduction in cost of operation and how they have an impact on customer satisfaction.

In examining service effectiveness the researcher provided the following cotributions

as most placing service of e-banking in banking industry of Tanzania; Transaction time
reduction, Speed and efficiency, and reduced operation. The average of 88.7% agreed
that most remarkable service effectiveness of e-banking into banking excellence are as
listed abaove.

Kazmeyer, (2016) in analyzing security Issues Relating to Internet Banking provided

that banking via the Internet is an easy way to monitor your business’s finances,
allowing you to view payments and deposits on demand.
39
Also, IDT is concerned with the manner in which a new technological idea, artifact or
technique, or a new use of an old one, migrates from creation to use. According to IDT,
technological innovation is communicated through particular channels, over time,
among the members of a social system Arnaboldi & Claeys, (2008).

Therefore, customers at the average of 86.7% are conscious of the contributions of e-

banking services and its usefulness in their daily financial tasks hence satisfied at this
point.

?????????????????????????????

40
5.1.3 The challenges of traditional banking imposed by e-banking services.

In examining the challenges of traditional banking imposed by e-banking services the

researcher provided two different questions to employees who were also part of bank
customer and customers;

The researcher provided the following challenges as most placing challenges of e-

banking in banking industry of Tanzania to customers; Increased transaction charges,
Cyber theft threat, literacy requirements, and wrong transaction destination. The
average of 78.9% of respondents representing customers agreed that most remarkable
contributions of e-banking into traditional banking excellence are as listed abaove.

Farooqui & Rajani, (2017) stated that E-banking has gained the momentum in the
Indian context. Most of the banks have implemented E-banking facilities which are
beneficial to both i.e., banks and the customers. Though there are many challenges and
hurdles in the smooth implementation i.e. theft threats, heavy investments and technical
skills requirements of E-banking system in India but at the same time E-banking is
having a bright future.

IDT provides that, internet banking has been enhanced due to cyber threats and fraud.
Early users generally are more highly educated, have higher social status, are more
open to both mass media and interpersonal channels of communication, and have more
contact with change agents Arnaboldi & Claeys, (2008).

The empirical study adds challenges to the study while respondents proves the threats
of the challenges on customer satisfaction through promising prosperity in the industry.

41
5.2 Conclusion

Electronic banking is a major revolution in the banking industry, after a long run of
banking activities through traditional banking the 1990s has observed the trends in
application of digital tools in traditional banking, however the changes and revolutions
have been happening till today and expected to see many more changes in digital
banking since internet banking, crypto currency and online currency exchange are
happening, while some countries such as Tanzania are backing out, digital currency
and internet banking looks like they are becoming the future of banking.

In examining how customer value rises as impact of e-banking services; the level of
customer satisfaction in banking industry in this era of e-banking revolution however
depend on various issues such as technology and the quality of technological tools the
customer and bank uses, however for banks physical infrastructures such as ATMs
customers’ value has been rising the more ATMs increase and cash availability into the
machines increase the satisfaction of customers since money is made available close to
their locations, customers of CRDB Mbulu branch apart from ATMs they also use
actively SIM-banking which allows them to use their mobile phones in accessing
services.

In examining the quality of e-banking services provided by banks; quality of services

through e-banking at CRDB Bank is appreciated since the majority faces very few
obstacles, few cyber theft cases available, few transaction incomplete transaction cases,
and few delays in transaction results feedback cases. This means that people transact
without worries and meet their needs and expectations.

In examining the contribution of e-banking in effectiveness and efficiency of service

delivery in banking industry of Tanzania; the researcher found out that e-banking was a
well contributing feature on new banking industry. E-banking services contributions
draw its importance into the field of banking since they enhance s, reduce transaction
time, reduce bank’s transaction time, reduce bank’s operation costs, increases speed
and efficiency and also contribute to a significant increase of bank customers.

In examining the challenges of traditional banking imposed by e-banking services; e-

banking is prone to so many changes now and latter, hence its prone to a growing
industry (technology), utilizes both internet and mechanical technologies, challenges of
traditional banking imposed by e-banking also are prone to changes, however as of this
42
research the researcher has found the following challenges to be the most pressing
challenges; Increased transaction charges, Cyber theft threat, literacy requirements,
wrong transaction destination.

5.3 Recommendations:

In this section the researcher brings his own opinions for the future of the study. Basing
on the research objectives and questions the researcher tells in brief what is supposed to
be done.

5.3.1 The service quality of e-banking services provided by bank on customer

satisfaction:

In oder to maximize the customer value in CRDB Bank through the provision of e-
banking services, the researcher recommends the bank to pay attention on the quality of
service that their customers use, location where they are, security issues ,good flow of
information and employees competence, hence it is very important to improve service
quality in order to create customer delight and good service quality can attract new
customers hence loyalty. Customer of Mbulu branch needs quality e-banking service
that casatisfy customers and delight since most of them were reluctant in adopting
ebanking due to the security issue,cost of transaction and fear of incompent employees
because were few in number and it was difficult to deliver qulity service on time.

5.3.2 The e-banking service effectiveness on customer satisfactions at CRDB bank

The researcher recommends that the speed and efficiency of e-banking to be improved
and also cost of service acquisition must be reduced in order to increase the enrollment
of more customers because some of the customers are cost sensitive as cost was high
they run to other competitors this can maintain the customers and may attract other new
customers.

5.3.4 The challenges of traditional banking imposed by e-banking services.

For the aim of minimizing challenges and increase the capacity of CRDB Bank to tacle
the challenges, CRDB Bank such as the way it has managed to higher a board of highly
qualified members and highly qualified employees, it is important for CRDB Bank to
hire an international experts with full experience on the feedbacks and bring in more

43
products and feautures which will solve the problems, and move safely to e-banking
services.

5.4 Recommendation for further study.

E-banking is a very wide study; hence the researcher successfully covered impact of e-
banking services on customer satisfaction. The researcher recommend that further
studies can be taken to examine the technologies used in e-banking, also there is a need
to study what is the percentage of Tanzanians are benefiting from e-banking while also
cyber theft in Tanzania and its impacts on banks performance, can be studied.

44
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2020, from ASQ: https://asq.org/

Bank Theories. (2015, March). Historical Background Of Bank. Retrieved January 11,
2020, from Bank Theories: http://www.banktheories.com/

Batchelor, B. (2017, september 26). The History of E-Banking. Retrieved february 04,
2020, from bizfluent: https://bizfluent.com/

Dhananjay & Chandra, D. B. (2015, August 03). The Electronic Banking Revolution in
India. Retrieved December 29, 2019, from Journal Of Internet Banking and
Commerce: http://www.icommercecentral.com

Encyclopedia. (2020, January 30). Electronic Banking. Retrieved february 22, 2020,
from Encyclopedia: https://www.encyclopedia.com/

Farooqui & Rajani, A. F. (2017). E-Banking Issues & Challenges. Journal of Business
and Management (IOSR-JBM) , 31-39.

Goldfeder, P. (2019, October 24). The banking revolution: Adapt or be left behind.
Retrieved December 28, 2019, from bank innovation: https://bankinnovation.net

Graham & Sharma, A. W. (2014). Electronic Banking: The Next Revolution in

Financial Access? India : MicroSave .

Hyde, A. M. (2015). E-BANKING: REVIEW OF LITERATURE. Prestige e-Journal

of Management and Research .

Jalal Nabi & Marzooq. (2011). Evaluating the Impacts of Online Banking Factors on
Motivating the Process of E-banking. Journal of Management and Sustainability , 1(1),
32-42.

Kazmeyer, M. (2016). Security Issues Relating to Internet Banking. Retrieved

December 21, 2019, from yourbusiness.azcentra: https://yourbusiness.azcentral.com/

Maitha, M. W. (2010). the effects ofe-banking in commercial banks in kenya in

promoting international business.

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Mekkaoui & Riquelme, H. E. (2009). internet banking customer satisfaction and online
services attributes.

Mia & Rahman, H. M. (2007). E-Banking: Evolution, Status and Prospect. Dhaka:
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Technology Essay. Retrieved january 18, 2020, from UK Essays:
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 APPENDICES:

QUESTIONNAIRES

Dear respondent,

My name is Costantino Martin Hotay, a third (3rd) year student at Mzumbe University
(MU) Main campus, pursuing Bachelor of Business Administration in Marketing
(BBA-MKT). You are kindly requested to respond to these questionnaires to help me
to accomplish the study topic of “the impacts of e-banking on customers satisfaction”.
The information given here will only be confidential and for academic purpose and not
otherwise. I thank you in advance for your time, cooperation, suggestions in
completion and return of these questionnaires may God bless you. You do not need to
write your name.

SECTION A: RESPONDENT PROFILE

(Please Tick [√] the most appropriate alternative/s)

1. What is your gender/ sex? 2. Which of the following categories best

Male describe your age?
Female 18-30
31-40
41-50
51-60
61 and above

3. What is your highest level of education 4. For how long have you been working at
attained? the organization?
Primary level 1 year to 10 years
Secondary level 11 years to 20 years
Advanced level 21 years to 30 years
31 years to 40 years
Undergraduate
41 years and above
Graduate
Post graduate
Others please specify…………………...

47
5. Marital status

a) Single
b) Marred
c) Widow
d) Divorced
e) Separated
6. Respondent’s Occupation
a) employed
b) self employed
c) not employed

7. Assessing the contribution of e-banking in effectiveness and efficiency of service

delivery into banks?

A B C D E
Very high Average Low Very
high Low

Contribution of e-banking

Transaction time reduction

Speed and efficiency
Operation cost reduced

8. Assessing the challenges of traditional banking imposed by e-banking services

A B C D E
Very high Average Low Very
high Low
Challenges of e-banking services

Increased transaction charges

Cyber theft threat
Wrong destination transactions
Literacy requirement

48
9. Please indicate the level to which you agreed with service quality in the following
statements regarding to customer satisfaction on a 5point Likert scale 1 (Very high) to
5 (very low). Tick (√) to the appropriate box once.

S/N Statement Very High Average Low Very

high low
1 How are you satisfied with the
services offered by the bank?
2 At what extent you satisfied with
the information about e-banking
and are they available?
3 At what extend are you able to
access bank service?

4 At what extend you satisfied with

the security of the bank?

5 At what extend employees in

provision of service were
competent and willing to
continue using the e-banking
services?

49