Influence of electronic banking on customer satisfaction among commercial banks in Kenya

Abstract

Customer satisfaction has been central to the operations of commercial banks and this has resulted in the institutions designing new strategies and introducing new digitalized systems to lead to operational excellence. The commercial banks have been rolling out new technologies to improve customer satisfaction and foster service provision. However, even with the high adoption rates, the Central Bank of Kenya indicated that only 56% of bank customers were satisfied with the services they received in 2022. This research sought to establish the effect of electronic banking on customer satisfaction of commercial banks in Kenya. Specifically, the research sought to establish the effect of mobile banking on customer satisfaction of commercial banks in Kenya; determine the influence of online banking on customer satisfaction of commercial banks in Kenya; to examine the effect of automated teller machines on customer satisfaction of commercial banks in Kenya. Further the study examined the moderating effect of e-banking security factors on customer satisfaction of commercial banks in Kenya. The research was grounded on the technology acceptance model and technology threat avoidance theory. The study applied a positivist research philosophy with a quantitative descriptive design utilized in the survey. The population for the study was drawn from the deposit account in any of the 39 operational commercial banks. A sample of 384 bank customers was randomly selected to participate in the study. The research employed structured questionnaires in the data collection. The research tool was piloted among 38 customers to aid in reliability and validity test of the instrument. The collected survey data was analyzed using descriptive and inferential analysis. Findings were presented using figures and tables. The correlation analysis revealed there was weak positive and significant relation between mobile banking channels and customer satisfaction among commercial banks. The study further established there was weak positive and significant effect between online banking channels and customer satisfaction among commercial banks. The analysis revealed there was a weak positive and significant relation between automated teller machine channels and customer satisfaction among commercial banks. The regression analysis revealed that there was a positive and statistically significant relation between electronic banking channels and the customer satisfaction among commercial banks in Kenya. Additionally, there was a positive and significant moderating effect of security factors on the relationship between electronic banking channels and the customer satisfaction among commercial banks in Kenya. On the first variable mobile banking channels the findings showed demonstrated a positive and significant effect between mobile banking channels and the customer satisfaction among commercial banks in Kenya. The results on the second variable demonstrated a positive and significant effect between online banking channels and the customer satisfaction among commercial banks in Kenya. On the third objective the results revealed a positive and significant effect between automated teller machines channels and the customer satisfaction among commercial banks in Kenya. Findings further showed a positive and significant effect between security and the customer satisfaction among commercial banks in Kenya. Conclusions of the study were that e-banking services have positive effects on the satisfaction of bank customers and that security guarantees increase the satisfaction of customers with e-banking services. Based on these conclusions, the study recommends that commercial banks focus on improving the usability and affordability of mobile banking application to ensure they are user-friendly and cost-effective, that banks continuously improve e-banking platforms through regular updates, and that banks expand their network and outreach to ensure seamless connectivity even in remote areas. The study further calls on banks to ensure they guarantee security of e-banking channels to increase trust and satisfaction with e-banking channels. Keywords; e-banking, mobile banking, online banking, ATM, customer satisfaction, e-banking security