The effect of financial innovation on customer satisfaction: a study on banks in Ghana.

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May, 2016
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Every service provider aim at promoting customer satisfaction because of benefits that comes with it. In the banking sector where competition is very keen, the issue of customer satisfaction cannot be left out. The main aim of the study was to find the relationship between financial innovation and customer satisfaction. The two main products used as a measure of financial innovation were ATM and internet banking. Three hundred and eighty customers of all the major banks with branches in Kumasi were asked some questions on their expectation before using these products and their experience during and after using the service. Questionnaires were developed based on five service quality dimensions: Tangibility, responsiveness, reliability, privacy and ease of use. The service quality gap model was used to analysis the service quality gap among the five dimensions and it was revealed that, banks were unable to meet customers’ expected level of service but were able to provide more than 80% which is quiet remarkable. Results from the study also revealed that, among the five dimensions, customers are more concerned with reliability of service banks provide. Also Principal Component Analysis (PCA) using Varimax was adopted to extract factors used for running the regression to find the relationship between financial innovation and customer station. PCA produced four (4) and three (3) factors for ATM and internet banking respectively. The regression results revealed that, there is a positive relationship between financial innovation and customer satisfaction but there is no significant relationship between usage and satisfaction. It is recommended that, banks should conduct surveys periodically to know what customers expect from banks so that based on this information, they will be able to meet their needs. Also banks should concentrate more on the reliability of their services since that is the most important dimension.
A thesis submitted to the Department of Economics, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Science in Economics,