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Journal of Internet Banking and CommerceAn open access Internet journal (http://www.icommercecentral.com)Journal of Internet Banking and Commerce, June 2018, vol. 23, no. 2THE IMPACT OF MOBILE BANKING ON CUSTOMERSATISFACTION: COMMERCIAL BANKS OF NAMIBIA(KEETMANSHOOP)ROMARIO GOMACHABIndependent Researcher, Keetmashoop, NamibiaEmail: [email protected] FRANCO MASEKEIndependent Researcher, Keetmashoop, NamibiaAbstractTechnology is a driving force in the global age and is taking over in every way;mobile and internet banking is just a few examples of the ever developing technologyadvancements. Mobile banking is a new way of banking, as it makes it easier forconsumers to access their finances, even from rural/remote areas. For thecommercial banks to improve on the current mobile banking services they provide tothe consumers they should first find out what the expectations of consumers are andwhether they are satisfied with the current services provided by the banks. Thisstudy adopted a quantitative design to determine the factors of mobile banking thatinfluences customer satisfaction. Data was collected from a simple random sampleof 60 respondents using a self-administered structured questionnaire. Findingsuncovered that the majority of the respondents’ were FNB customers, who were/areaged below 25 years and of this respondents’, 57% were female with a high schoollevel of education; they are mostly students with an income of below N 5000,whereby they are all registered with mobile banking and were influenced by themobile banking advertisements. The results also revealed that the most frequently

JIBC June 2018, Vol. 23, No.2 - 2 -used service is airtime purchases and the least frequently used service is theallocation of funds and that mobile banking services in the Keetmanshoop bankingsector has an overall satisfaction rate of 75% is reliable, convenient, cost effective,available on different mobile networks, advertisements are encouraging, service iscompatible with mobile devices, income (social aspect of transacting) of respondentsinfluences the usability of mobile banking and mobile banking services are moresecure than branch based services.Keywords: Mobile Banking; Customer Satisfaction; Customer Expectations Gomachab R, 2018INTRODUCTIONThe introduction of mobile banking within the banking sector of Namibia hasdiversified. Banks in Namibia are offering their clients/customers to access theirfinancial accounts remotely from their mobile devices. According to Jepleting, Oscarand Bureti. “The mobile units use solar power to run a computerized transactionprocessing system that is directly linked to the home branches via global positioningsystem (GPS) and satellite”. This system opens multiple routes to the customerservice (e.g., ATM machines, telephones, Internet and mobile phones) according toAghdaie and Faghani [1]. Commercial banks in Namibia has over the yearsintroduced a variety/range of projects within the country to get their products andservices to the customers, by doing road shows, installing new Automatic TellerMachines (ATM’s), introduction of online banking, mobile banking, e-wallet servicesand many more. According to Bharti [2], “adoption of mobile-banking has receivedmore attention in recent years, because there are more phone users than computerusers in the market. Mobile services and their consumption have lately become aburning issue among information systems (IS) and marketing scholars”.FNB is the country’s leading commercial bank and according to Rukoro [3], the bankcontinues to offer a wide range of products and services through a network of 49branches, 221 ATM’s, 2050 Speed points, and full-service online and cellphonebanking across Namibia. Because of its effectiveness and reliability, mobile bankinghas been used by customers of the commercial banks (FNB, Standard Bank, BankWindhoek and Nedbank) in Namibia for more than 10 years now.The mobile banking service amongst the commercial banks in Namibia provides arange of different services which includes buying airtime, paying or buying electricity,sending money (e-wallet/blue wallet), checking your mini statement, etc. at a fee ofjust N 1, and this service is highly secured as you need to enter a password toaccess it. According to Kahandawa and Wijayanayake [4], in this cashless society,majority of people would not like to spend their valuable time at a bank branch forfinancial transactions.

JIBC June 2018, Vol. 23, No.2 - 3 -Customer satisfaction is a measure on how the services provided or supplied by anorganization meets or exceeds the expectations of a consumer. Customersatisfaction is obtained through meeting the expectations that consumers have aboutthe mobile banking service, if the expectations of the reliability, safety, ease of use,etc. is met by the service, customer satisfaction will be high (meaning moreconsumers will engage into mobile banking) and if not, it will be low (meaning moreconsumers will not engage in using mobile banking services).The introduction of mobile banking in Namibia was launched in 2007 by the FirstNational Bank of Namibia, the country’s leading commercial bank. According to TheNamibian Newspaper [5], “First National Bank Namibia (FNB) last week launched acellphone banking service which allows customers to perform banking transactionsfrom any location with cellphone reception”. Mobile banking had a revolutionaryimpact on the scope of business and how day to day transactions are carried out.Namibia has numerous commercial banks. Many customers of the commercialbanks use mobile banking on a daily basis to do transactions, such as sendingmoney to their family members, through e-wallet/blue wallet.Throughout the years some customers complaint about certain aspects such as thelack of customer service, out of service ATM’s, lack of responsiveness of the mobilebanking app, unexplainable banking charges, etc. The use of mobile banking inNamibia, makes it easier for consumers to check the balances, transfer money, etc.and they need to withdraw money from the ATM if they are transferred money and attimes the ATM’s might be out of service of the mobile banking system is off. This hasan impact on consumers as they might need the money at that time to carry out animportant transaction or to pay off a debt; this creates a low satisfaction to thecustomer. According to Kaze [6], some of the complaints about service delivery atbanking institutions include long, stagnant queues inside the bank branches and atATM machines that are often ‘out of service’ and the seemingly unexplained bankingcharges, amongst others.The researcher believes that the introduction of mobile banking improved customersatisfaction and also might have some flaws. Little has been done on understandingthe levels of customer satisfaction with mobile banking. The researcher would like tomeasure customer satisfaction by uncovering the expectations created by the banksand whether banks delivered on their promises.A number was selected of customers using mobile banking from the differentcommercial banks in Keetmanshoop and was used to find out the effect of mobilebanking on customer satisfaction. Using the factors that influence customersatisfaction developed by Jannat and Ahmed [7], we will determine the effect Mbanking has on customer satisfaction. These factors are transaction speed, security& trust, ease of use, responsiveness, convenience and cost effectiveness. As well asthe customer decision making process to determine to what extent the introduction ofmobile banking has satisfied the customers and whether their expectations were

JIBC June 2018, Vol. 23, No.2 - 4 -met.This study focused on how mobile banking provided by financial institutions has animpact on the satisfaction of customers. The researcher believes that mobile bankinghave an influence on how satisfied customers are with their financial institution. Thestudy mapped out the expectations banks create when introducing mobile banking inthe country and whether this expectations were met.In any organization, the clients are the most important people, as they play a majorrole in the success of any business. With the focus on mobile banking and customersatisfaction, this study will benefit all the customers that are using the mobile bankingservice with their specific bank. The study helped customers to put their views andrate the services provided to them; which made them happy to be able to be heard.The findings of the study had identified flaws within the mobile banking service thatmay be improved in the future by the service providers and customers will be happywhen their needs are met.The financial institutions (banks) are service providers and in order to retain clientsor make their client base larger, they should be able to keep their clients satisfied atall times. This study revealed all the positives and negatives of the mobile bankingservice provided by the banks to their clients. The flaws that have aroused fromconducting this research have been an eye opener to the banks and will motivatethem to improve their service. Improving the service will benefit the banks bycreating a larger client base and attracting new clients as well; it will also help themto engage more in satisfying the needs of clients and improve client relations.This study will benefit both the clients and banks as mentioned, but it will also helpfuture researchers. The study has discovered positives and negatives of mobilebanking services and will help future researchers understand how mobile bankingimpacted customer satisfaction in this era.LITERATURE REVIEWPrevious StudiesMobile banking service quality and customer satisfaction: In a study carried outby Amiri Aghdaie and Faghani [1], they applied the SERVQUAL model to identify therelationship between customer satisfaction and mobile banking services.Researchers examined that; reliability, empathy, responsiveness and tangibility arepositively correlated with customer satisfaction whereas assurance has no relation.This study focused on the customer satisfaction and mobile banking service qualityjust as many previous studies. The study compared to other studies, applies theSERVQUAL model, which some other previous studies does not apply. Butcompared to the studies using the same model, this study supported all theSERVQUAL factors which were not supported by other studies. The study only

JIBC June 2018, Vol. 23, No.2 - 5 -focused on the factors of service quality and ignores other factors that may haveinfluenced customer satisfaction. The study also ignored the expectations that mayhave been created by the introduction of mobile banking.Impact of Mobile Banking Services on Customer Satisfaction: The study doneby Kahandawa and Wijayanayake [4] revealed that customer satisfaction isinfluenced by usefulness, ease of use, etc. which is factors financial institutionsshould improve on, but again, it also lacked finding out the expectations and whatthe customers really wanted from the service. According to Kahandawa andWijayanayake [4], “this study shows/revealed that in mobile banking services’customer satisfaction is influenced by usefulness, ease of use, relative advantage,perception on risk and user lifestyle and current needs of customers. It brings out apositive relationship and highlights the factors which any bank or financial institutionshould focus on improving mobile banking services”. The study compared to otherstudies focuses on the factors influencing customer satisfaction and does not applyan already established model, like the SERVQUAL model. It revealed that currentneeds of customers influenced customer satisfaction, but it did not go into detail toidentify the needs/expectations of the customers.Impact of dimensions of mobile banking on user satisfaction: This study byBharti [2] showed that Effective distinctiveness, professed security, immenseefficacy, Innovative virtual environment, Enhanced Personalization and Improvedtimely updates were not associated with satisfaction related to mobile banking whileSupportive access is an important factor directly associated with user satisfactionrelated to mobile banking. This study focused on the effect of mobile banking on thesatisfaction of customers that are using the service. The study only focused onfeatures of e-banking on customer expectations and satisfaction. Compared to otherstudies, this study only looked at e-banking features and not really factors of mobilebanking. It also shows that to fulfill expectations, banks should increase mobilebanking awareness.Mobile banking and customer satisfaction: The study of Hossain and Hossain [8]showed factors that have a bigger influence on the dependent variable and thosefactors that have less influence on the dependent variable. The results of the studywill help banks put more emphasis on the most influential factors. This study adopteda simple random sampling method. The study showed that reliability andresponsiveness are important determinants of customer satisfaction. It also revealedthat the customers want the same service and quality every time they buy theservice. Compared to other studies, this study is only confined to Bangladesh’smobile banking sector and does not really have an impact on the Keetmanshoopmobile banking sector. The researcher also failed to produce a better analysis of therelationship between service quality and customer loyalty; taking little emphasis oncustomer satisfaction although it’s linked to loyalty.Factors influencing customer satisfaction of mobile banking: The study of

JIBC June 2018, Vol. 23, No.2 - 6 -Jannat and Ahmed [7] revealed that the most influential factors that have aninfluence on customer satisfaction of mobile banking of second-generation banks.From the analysis of collected data it has been revealed that; security and trust,convenience accuracy of transaction, ease of use, system availability,responsiveness, transaction speed, and cost effectiveness are the most influentialfactors for customer satisfaction. It was found that, a strong relationship existsbetween customer satisfaction and the nine independent variables. Each and everyvariable (independent) has power for customer satisfaction. Compared to theprevious studies, these nine variables also show positive relationships with thedependent variable (customer satisfaction) and it is not assured that these are theonly determinants of mobile banking. The study did not develop a model todetermine the significance of the study.Conceptual FrameworkCustomer satisfaction and mobile banking: Customer satisfaction is importantbecause it provides marketers and business owners with a metric that they can useto manage and improve their businesses. Customer satisfaction plays a major role inthe management and the profitability of a company. Most studies that have beendone, considers customer satisfaction as an important determinant for the servicesector [7]. Banks usually add new features to mobile banking apps and services, withthe hope of improving the satisfaction of customers, but customers fail to understandor use the added features and this decreases thee satisfaction of customers.According to Babrovich [9], “the majority of banks simply add new features hoping toimprove customer satisfaction. But as statistics show, users are only gettingfrustrated with the complex mobile banking functionality”.Mobile banking and customer expectations: Mobile Banking means Electronicbanking that uses mobile phone technology (or other wireless devices) to deliverelectronic financial services to customers. It has been taunted as a powerful newmarketing consumer relations method for financial services companies [10].European banks have been using mobile banking as early as 1999, while majorbanks in America only started using this banking service in 2007. At times,customers do not receive the services they expect to get from their financialinstitution’s mobile banking service and apps, which makes them furious and theirsatisfaction with the institution reduces or is hampered. According to Pilcher [11] “ adults across revealed a surprising disparity in what consumers want in a mobilebanking app versus what they actually get from their banking provider. Americans expect to be able to deposit checks and receive real-time notifications on accountactivity from their mobile banking apps. And yet that’s not what most get”.Factors of mobile banking affecting customer satisfaction: Previous studieshave identified different factors of mobile banking that affects customer satisfaction.The factors that have been frequently appearing in those studies are reliability,transaction speed, cost effectiveness, usefulness, responsiveness, security and

JIBC June 2018, Vol. 23, No.2 - 7 -trust, system availability, convenience and accuracy of transaction.According to Hossain and Hossain [8], “reliability to perform the promised servicedependency and accurately; Responsiveness willingness to help customers andprovide prompt service; Assurance knowledge and courtesy of employees and theirability to inspire trust and confidence; Empathy caring, individual attention the firmsprovide its customer”.Theoretical FrameworkDiffusion of innovations theory: Diffusion is the process by which an innovation iscommunicated through certain channels over time among the members of a socialsystem. Diffusion is a special type of communication concerned with the spread ofmessages that are perceived as new ideas [12].An innovation is an idea, practice, or object that is perceived as new by an individualor other unit of adoption. The characteristics of an innovation, as perceived by themembers of a social system, determine its rate of adoption [12].Diffusion of innovation theory is a theory that deals with change. It is the theory ofnew innovations (products, services, etc.) being tested or accepted by individuals tobe of good use in their everyday needs, etc. the theory doesn’t focus on convincingor persuading people to accept a product or service, rather than changing theproducts to satisfy the need of people.According to Robinson [13], “diffusion of Innovations takes a radically differentapproach to most other theories of change. Instead of focusing on persuadingindividuals to change, it sees change as being primarily about the evolution or“reinvention” of products and behaviors so they become better fits for the needs ofindividuals and groups. In Diffusion of Innovations it is not people who change, butthe innovations themselves”. The theory has been categorized in five levels orstages and is as follows (Figure 1).Figure 1: Diffusion of innovation theory.

JIBC June 2018, Vol. 23, No.2 - 8 -Innovators Early Adopters Early Majority Late Majority Laggards. Innovators: The adoption process begins with a tiny number of visionary,imaginative innovators. They often lavish great time, energy and creativity ondeveloping new ideas and gadgets.Early adopters: Once the benefits start to become apparent, early adoptersleap in. They are on the lookout for a strategic leap forward in their lives orbusinesses and are quick to make connections between clever innovationsand their personal needs.Early majority: Assuming the product or behavior leaps the chasm, it mayeventually reach majority audiences. Early majorities are pragmatists,comfortable with moderately progressive ideas, but won’t act without solidproof of benefits. They are followers who are influenced by mainstreamfashions and wary of fads.Late majority: They are conservative pragmatists who hate risk and areuncomfortable your new idea. Practically their only driver is the fear of notfitting in; hence they will follow mainstream fashions and establishedstandards. They are often influenced by the fears and opinions of laggards.Laggards: Meanwhile laggards hold out to the bitter end. They are people whosee a high risk in adopting a particular product or behavior. Some of them areso worried they stay awake all night, tossing and turning, thinking uparguments against it. And don’t forget they might be right! It’s possible theyare not really laggards at all, but innovators of ideas that are so new theychallenge your paradigms!Technology Acceptance ModelTechnology Acceptance Model (TAM) tries to establish a relationship and it alsodescribe the intention of users and how users are influenced by a product or service.It emphasizes the importance of perceived usefulness and ease of use in technologyadoption [14] (Figure 2).Figure 2: Technology acceptance model.TAM was formulated in an attempt to achieve these goals by identifying a smallnumber of fundamental variables suggested by previous research dealing with thecognitive and affective determinants of computer acceptance, and using TRA as atheoretical backdrop for modeling the theoretical relationships among these

JIBC June 2018, Vol. 23, No.2 - 9 -variables.The TAM model had been applied to different aspects of newly introducedtechnology, such as the dial up system, email, hospital information systems, decisionmaking systems, etc. through field studies, surveys, etc. This model has also beencompared to two other models, which is the Theory of Reasoned Action and theTheory of Planned Behavior.The Theory of Reasoned ActionThe Theory of Reasoned Action was developed by two theorists that also work withDavis on the TAM model, Martin Fishbein and Icek Ajzen. According to Hale, et al.[15], “the TRA posits that the strongest or proximal predictor of volitional behavior isone’s behavior intentions. Behavioral intentions are thought to be the result of bothan individual influence and a normative influence” (Figure 3).Figure 3: The theory of reasoned action.The Theory of Planned BehaviorThe Theory of Planned Behavior was developed by Icek Ajzen in 1985. According toAfrican Bio Services, “the theory of planned behavior (TPB) is a theory linking beliefsand behavior. The concept was developed to predict an individual’s intention toengage in a behavior at a specific time and place, including perceived behavioralcontrol” (Figure 4). The following is the TPB model:

JIBC June 2018, Vol. 23, No.2 - 10 -Figure 4: The theory of planned behavior.Source: Lee, et al. [16].SERVQUAL ModelAccording to Arlen [17], after extensive research, Zeithaml, Parasuraman and Berryfound five dimensions customers use when evaluating service quality. They namedtheir survey instrument SERVQUAL. If providers get these dimensions right,customers will hand over the keys to their loyalty. They will have received serviceexcellence. According to what’s important to them (Figure 5).The five SERVQUAL dimensions are: Tangibles-Appearance of physical facilities, equipment, personnel, andcommunication materials Reliability-Ability to perform the promised service dependably and accurately Responsiveness-Willingness to help customers and provide prompt service Assurance-Knowledge and courtesy of employees and their ability to conveytrust and confidenceEmpathy-Caring, individualized attention the firm provides its customers

JIBC June 2018, Vol. 23, No.2 - 11 -Figure 5: SERVQUAL Model.Source: Dudovskiy [18].Five Gaps of Service Quality ModelAccording to Dudovskiy [18], “customer perceptions are needed to be met andexceeded. It requires from companies to study the buyer behavior of their existingand potential customers and to devise programs and initiatives to offer superiorcustomer service”. The five gaps according to Dudovskiy [18] are as follows (Figure6): Gap between expectation of client and perception of management. In order tobe able to exceed customer expectations, and in this way to insure customersatisfaction service company management has to have a clear and accurateperception about customer expectations. A lack of such knowledge creates agap that can be one of the main reasons for service customers not beingsatisfied. Gap between perception of management and service quality specification.Even if management accurately perceive customer expectations there are stillchances of customer dissatisfaction that can be caused by the gap in planningquality of the service according to customer expectations Gap between specification of quality and the delivery of service. Anotherpotential area for customer dissatisfaction relates to the failure of efficientlyspecified quality service due to various reasons, including incompetentworkforce, and inefficient working conditions. The gap between the delivery of service and external communications. Incases where service company employees have relevant skills and willingnessto offer efficiently specified quality service, still customers may be leftunsatisfied due to external factors Gap between perceived and expected service. Lastly, one of the commoncauses for customer dissatisfaction in service sector relates to the gapbetween what customers expect from the service and what they think theyhave received.

JIBC June 2018, Vol. 23, No.2 - 12 -Figure 6: Five gaps of service quality model.The Kano modelThe Kano model was developed in 1984 by Professor Noriaki Kano, while he wasstudying the contributing factors to customer loyalty and satisfaction. The modeldeals with the minimum standards that customers expect from a service or product.The model is divided into 5 categories, namely; Excitement, Performance, Basic,Indifferent, and Reverse. From this five categories, two should be taken out andthree which would be offered. According to Verduyn [19], “the Kano Model’s mainobjective is to help teams understand, classify, and integrate these 3 maincategories of requirements into the products or services they are developing. The 5categories of customer requirements are classified depending on their ability tocreate customer satisfaction or cause dissatisfaction. Knowing what categorycustomer requirements fall into and the importance of each requirement can helpprioritize development activities and determine what to include in your offering andwhere to spend resources improving these requirements” (Figure 7).Figure 7: The Kano Model.The y-axis shows the level of satisfaction, while the x-axis shows the level ofexecution. As mentioned there are five categories of the Kano Model, which are as

JIBC June 2018, Vol. 23, No.2 - 13 -follows in detail:Performance: Simply stated, these are the requirements the customers are able toarticulate and are at the top of their minds when evaluating options. They are themost visible of the model’s requirements and the better they are performed, the moresatisfaction they bring, conversely, the worse they are performed, the moredissatisfaction they bring. The Professor originally called these “One-Dimensional”because the better you execute the more satisfaction from the customer you get.Basic: Simply stated, these are the requirements that the customers expect and aretaken for granted. When done well, customers are just neutral, but when donepoorly, customers are very dissatisfied. Kano originally called these “Must-be’s”because they are the requirements that must be included and are the price of entryinto a market.Excitement: Simply stated, these are the requirements that are unexpected andpleasant surprises or delights. These are the innovations you bring into your offering.They delight the customer when there, but do not cause any dissatisfaction whenmissing because the customer never expected them in the first place. Kano originallycalled these “Attractive or Delighters” because that’s exactly what they do.Indifferent: Simply stated, these are the requirements that the customers simplydon’t care if they are present or absent, their satisfaction remains neutral undereither circumstance.Reverse: Simply stated, these are the requirements that cause dissatisfaction whenpresent and satisfaction when absent. These are very rare but do happenoccasionally.METHODOLOGYResearch methodology is a process of applying methods of collecting and analyzingdata in a field study. A methodology according to Clough and Nutbrown [20] showshow research questions are articulated with questions asked in the field. Its effect isa claim about significance. Research design is a strategy that is used to integrate thecomponents or variables of a study, chosen by the researcher. Research designaccording to a study [21] is the plan according to which we obtain researchparticipants (subjects) and collect information from them.The study adopted a quantitative research approach to investigate the factors thataffect customer satisfaction of commercial banks offering mobile banking service totheir customers, as well as to understand the expectations customers had about theintroduction of mobile banking. Quantitative research according to Maree et al. [22] isa process that is systematic and objective in its ways of using numerical data fromonly a selected subgroup of a universe (or population) to generalize the findings tothe universe that is being studied. The study used descriptive statistics like modes,means, frequency, etc. The quantitative research approach that was applied had adescriptive design that was used to investigate whether there was a relationshipbetween the set of variables and to what extent the introduction of mobile bankinghas satisfied the customers.

JIBC June 2018, Vol. 23, No.2 - 14 -The study was carried out in Keetmanshoop on selected commercial banks MobileBanking Service using customers. Keetmanshoop according to the 2011 CensusReport had a population of 20 977 people. The targeted population for this study wascustomers of the four commercial banks in Keetmanshoop, Namibia, that arecurrently registered for mobile banking. The banks are namely; Nedbank Namibia,Standard Bank, First National Bank Namibia (FNB) and Bank Windhoek. Thesebanks were selected as they are the only commercial banks in Keetmanshoop andthey all have a large customer base.Simple random sampling was used by th

Windhoek and Nedbank) in Namibia for more than 10 years now. The mobile banking service amongst the commercial banks in Namibia provides a range of different services which includes buying airtime, paying or buying electricity, sending money (e-wallet/blu