1.1 BACKGROUND TO THE STUDY
Nigerian banks in the
face of increasing competition are currently facing enormous challenges which
have made survival increasingly difficult. To survive and be successful
providers of financial services, it is extremely important that the present
environment should go with a new management order which will offer the customer
satisfaction and make better business performance. It is evident that today
customers have increasingly become so enlightened and aware of their importance
that ignoring them in search for competitive advantage can be suicidal for
banks. Therefore, banks must brace up to the challenges in a bid to provide an
effective customer service.
operations in Nigeria started in 1892 when African Banking Corporation opened
its first branch in Lagos to finance the shipping business of Elder Dumpster
and Company which was operating steamship services between Liverpool and the
West African coast. The Bank of British West Africa took over the activities of
the African Banking Corporation in 1893 (now First Bank of Nigeria Plc). In
1917, Barclays Bank (now Union Bank of Nigeria Plc) was established. Shortly
year, many more Banks were established; some of which are the British and
French Bank (now United Bank for Africa Plc) established in 1949, the
Industrial and Commercial Bank established in 1929, National Bank of Nigeria
Plc established in 1933, the Agbonmagbe Ban (now Wema Bank) established in
1945, Nigeria Penny Bank established in 1940, Nigeria Farmer and Co-operative
Bank Plc established in 1947 and so on. (Okoh, S. E. and Unugbro, A. O. 2003).
1930’s and 1940’s witnessed some bank failures which led to the setting up of
the Patron’s Commission of 1948 which formed the bedrock of the Banking
Ordinance of 1952. Even since then, commercial banks dominated the financial
system and constituted the largest group in the financial sector. On the
attainment of independence in 1960, there were twelve (12) banks with a total
of 160 offices. There was a rapid growth in the 70’s and by 1977, there were 19
banks with 492 branches. By 1987, the number of commercial banks had grown to
48 with 1714 branches. (Nwankwo, 1991).
independence banking industry has grown tremendously and serves the greater
proportion of the general public. With the liberalization of bank license in
1980, a more competitive environment and efficiency in the banking system was
promoted. The federal government budget of 1986 which introduced economic
recovery was subsequently articulated into the Structural Adjustment Programme
(SAP) was a deliberate response to distortion which has been prevalent in the
Nigerian economy since the “oil boom” of the 70’s. The reform process of this
programme led to the introduction of measure and instruments to deregulate the
practice of banking. With this, new banking techniques and range of products
offered to enhance economics efficiency and effective resources allocation
introduced through service driven competition resulted in product introduction
and adoption. With regard to the above development, individual banks have to
carve a niche themselves and decide the kind of customer, prices of their
product/services appropriating as well as promote such services in various ways
that the target will be aware of what is in offer. This concept of customer
service must be given priority since the era of arm chair banking is over
1.2 STATEMENT OF THE PROBLEM
The relevance of the
customer in every business organization cannot be overemphasized having known
that the customer is the lifeblood of every business survival. The researcher
wishes to look into the following problems:
The problem of
effective customer services in the banking industry.
encountered by bankers in determining the needs and wants of a customer.
The problem of
methods adopted by banks in meeting the individual needs of their customers.
1.3 OBJECTIVES OF THE STUDY
following are the objectives of this study:
examine the factors influencing customer’s loyalty in the Nigerian banking
determine the effect of bank location on customer’s loyalty.
examine the relationship between customer care and customer loyalty.
1.4 RESEARCH QUESTIONS
are the factors influencing customer’s loyalty in the Nigerian banking
is the effect of bank location on customer’s loyalty?
is the relationship between customer care and customer loyalty?
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study are as
To provide effective
customer services to the banking public.
To enhance economic
efficiency and effective resource allocation in the Nigeria banking industry.
To increase effects
towards positive customer loyalty in the banking industry.
1.7 SCOPE/LIMITATIONS OF THE STUDY
study was carried out within the Benin-Banking environment with specific
inference to Union Bank Plc, First Bank Plc, Guaranty Trust Bank Plc and
Oceanic Bank Plc. The above mentioned banks represent two old generation banks
and two new generation banks in the banking industry.
LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the
efficiency of the researcher in sourcing for the relevant materials, literature
or information and in the process of data collection (internet, questionnaire
Time constraint- The researcher will
simultaneously engage in this study with other academic work. This consequently
will cut down on the time devoted for the research work
G. (1998), "Bank to the future", Internet Magazine,
Jim (1991); “Payment System and Financial Innovations. A paper presented at the
Annual Policy Conference, Nov. 2002.
and Unugbro A.S (2003).The Impact of Electronic Banking on Human Resources
Performance in the Nigerian Banking Industry. International Journal of Economic
Development Research and Investment Vol.
3, No 2. Pp 61-69.