Impact of Internet Banking on Customer Satisfaction

Abstract 

Advances in technology have played a critical role in improving service delivery in the banking industry. The introduction of internet banking has significantly changed the way banks serve their customers. Today, customers can access banking services from anywhere around the world as long as they are connected to the internet. The study seeks to determine the impact of internet banking on customer satisfaction. Given the various benefits of internet banking to customers, the technology can play a critical role in enhancing customer satisfaction. The banking industr y ha s greatly embraced internet banking as a reliable tool for meeting customer needs . Internet banking is currently one of the popular services that have been created to provide reliable services to online users. However, a significant number of bank customers are skeptical and doubt that internet banking offered may not have any value to them. Therefore, it is essential to determine how internet banking has improved customer satisfaction levels . The research approach to the problem is review-based.The approach employs the review of previous studies that have different results that provide important insights into the the current research problem (Beattie & Goodacre, 2006). Therefore, review-based research provide s a better understanding of how internet banking imp acts customer satisfaction. The results of the research provide an important framework for developing effective marketing policies aimed at positioning banks competitively in the market. They indicate that internet banking improves customer satisfaction. Therefore, banks should invest in online banking in order to establish a competitive brand associated with convenience, accessibility, and efficiency. Technology can be leveraged to increase customers’ online experience and improve satisfaction. Banks seeking to improve their brands and enhance customer loyalty have to invest in the innovative and customer-centered technology. 

Impact of Internet Banking on Customer Satisfaction 

Introduction 

Technology has significantly revolutionized service delivery in the banking industry . The invention of WWW has brought more information at users’ fingertips ( Marakarkandy, Yajnik, & Dasgupta, 2017) . The use of the internet has given birth to what is known as internet banking. It is important to note that the first version of what was generally regarded as online banking started in 1981when New York City banks tried out the innovative way of doing business. Currently, the banking industries have incorporated internet banking as one of the services they provide to customers.The innovation has improved customer satisfaction ( Gupta, 2019). The factors that encourage the use of internet banking are its efficiency, speed of making transactions, availability, and convenience. Internet banking has been embraced by millions of customers from different parts of the world. Banks have been able to provide customers with convenient online services. Customers can pay bills, shop, and do more with the use of internet banking, ( Bhatt, & Bhatt, 2016) . When using internet banking, the registered account holders do not have to physically queue in their banking halls every time they want to deposit, make payments, or do any inquiry. Despite the high percentage of people using internet banking, the fact is that not all the account holders will be able to use the services offered online. An individual must register for the facility which can be done when opening an account or later. While the use and promotion of internet banking have been on the rise, the major question has always been on how it impacts the life of the customers who have already registered and are actively using it ( Hox, & Boeije, 2005) . There are also a few challenges that come with the use of internet banking. Despite the slow rate of adoption of internet banking in the early part of its history, it is clear that the practice is here to stay. The features and benefits of internet banking have evolved from its first days of history due to the various significant technological developments. The research sought to answer the question, “How does internet banking influence customer satisfaction?” Based on previous studies, internet banking could significantly help banks enhance customer satisfaction ( Gupta, 2019) . Internet banking has the potential to offer customers a lot of benefits in terms of convenience, speed, and better record keeping. As technology advances, online banking will definitely become easier and become more integrated into the lifestyles of the average consumers. 

Literature Review 

Impacts of Internet Banking on Customer Satisfaction 

Internet banking continues to shape the banking industry. Technological advances have allowed banks to enhance their internet banking offerings in order to maintain their market share in a competitive industry ( Salihu & Metin, 2017) . Banks seek to enhance the experience of their customers by leveraging technology. Internet banking influences customer satisfaction in a variety of ways. Internet banking provides a combination of customer experiences that collectively influence the overall customer satisfaction. 

A study by Salihu & Metin, (2017) , showed that internet banking improves banking services accessibility for customers. This is because customers can access their bank accounts from virtually everywhere, so long as there is internet connectivity. As a result, banks can compete favorably in the global banking industry. Through internet banking, banks can ensure that their customers access their accounts, check balances, and make payments efficiently without encountering any barriers. Additionally, bank customers can raise queries through the online platform and have them addressed in a timely manner. Through internet banking services, banks have been able to enhance customer satisfaction by easy access to banking services. 

Amin, (2016), also noted that accessibility is one of the key factors that influence customer satisfaction. Banks seeking to gain a competitive advantage should focus on improving their online banking offerings in a bid to meet or exceed customer expectations. For instance, the websites should be easy to navigate. This will allow the customers to easily understand how to go about checking balances, making payments, or transfers. As such, accessibility is critical to customer satisfaction. Internet banking technology has significantly improved customer satisfaction by facilitating easy access. 

Internet banking enables banks to develop personalized services for customers ( Bharti, 2016 ). For instance, banks can offer personalized content to their customers. Internet banking allows banks to get access to useful customer data that can be used to create personalized offerings. Customer personal and transactional data can be utilized in understanding the various needs of individual customers. It is important to realize that personalization of internet banking services allows banks to deliver such insights to customers in a more contextual manner. Besides, banks can easily anticipate customer needs through internet banking technology. This can be achieved through sales targeting. For instance, a bank can suggest an overdraft for a customer with a low balance and upcoming bills. This way, customers with low balances can benefit from the overdraft facilities offered to them ( Bharti, 2016) . On the other hand, customer with high balances can be asked to make fixed deposits and benefit from interest income. Additionally, banks can target customers who frequently visit the mortgage loan page and tailor suitable mortgage loans for them. Anticipating customer needs through mobile banking serves to enhance customer satisfaction. This is because customers can be offered personalized banking solutions. 

Internet banking provides convenience to customers ( Gunaratnam et al., 2018). It is worth realizing that convenience is an important element of customer satisfaction. Convenience allows customers to make the most appropriate decision within the shortest time. From a customer’s point of view, convenience can be seen in terms of decision, benefit, transaction, and post-benefit convenience. Decision convenience relates to how a customer can easily decide what services to utilize in bank’s website. The quicker and easier a customer can decide on what to do in a banks website implies a high level of decision convenience. Banks can achieve this by ensuring that relevant and sufficient information is available for customers on their internet banking platforms. Benefit convenience refers to ability of customers to clearly understand the various benefits of banking services indicated on a banks internet banking platforms. Banks can provide detailed statements on the benefits of their internet banking products. This will ensure that customers understand the various benefits they stand to receive from the internet banking products. 

Transactional convenience relates to how quickly customers can complete their internet transactions ( Gupta, 2019) . Through internet banking, banks are able to ensure that customers can transact quickly from wherever they are. The customers do not have to waste time walking to banking halls and making their transactions. This implies that internet banking has positively influenced customer satisfaction by facilitating transactional convenience. Post-benefit convenience refers to how effective banks can handle post-transactional issues such as records of payments and transfers. It is important to realize that internet banking has allowed customer to gain post-benefit convenience given that digital records of transactions are available. 

Internet banking has played an important role in ensuring that banks enhance customer satisfaction. This is because customers can get easy and quick access to banking services online. The can make transactions in real-time. Real-time experiences serve to enhance customer experience. Customers do not have to worry about long wait times when it comes to internet banking. 

Factors t hat Motivate Customers t o Register a nd Use Internet Banking 

There are several factors that motivate customers to register and use internet banking. Essentially, customers look out for banking services that offer the most benefits. Customers often make rational decisions regarding the type of services they use. Internet banking provides several key benefits to customers. The various factors that have motivated customers to register and use internet banking include convenience, time efficiency, and activity tracking. 

Convenience 

According to Oruç & Tatar, (2017 ), internet banking provides customers with a lot of convenience by allowing them to pay bills, access records of transactions, and make money transfers. Customers can bank from the comfort of their living rooms without necessarily visiting banking halls. Today, many banks allow their customers to deposit checks by simply taking a picture of it with their phones. Additionally, customers can access their banking information anywhere they can get access to internet connectivity. The internet banking services can be accessed through a computer or mobile device. 

Customers can pay their bills online and protect themselves from the troubles involved in writing and mailing checks. In most online banking websites, there are sections where customers can set up payees ( Oruç & Tatar , 2017 ). The information is filled out once and customers can simply choose the profiles each time they want to make payments. For customers that access bank websites on their smart phones, the apps allow them to make check deposits by simply taking a picture of the check. This implies that internet banking provides a lot of convenience to customers. Customers can also view their transactions over the internet. Through internet banking, banks ensure that customers get access to their account history from anywhere. This way, customers can identify any unauthorized transactions more easily. Additionally, customers can view pending account transactions. Customers can cancel any transaction they consider to be unauthorized. The sooner customers can check and report issues; the quicker they can be resolved. This means that customers do not have to visit bank offices in order to launch complaints as this can be resolved online. 

For customers who frequently make transfers, internet banking presents the most convenient banking platform ( Gupta, 2019). Customers can transfer money between accounts more easily. They can also check their available account balances in real-time. This ensures that customers effectively plan their finances. Interestingly, customers can make interbank transfers. Although it will take some time before such transactions can be effected, making interbank transfers online is much more convenient compared to running to the bank. 

It is also important to realize that most banks have developed mobile apps that allow customers to take advantage of mobile banking. The apps are more convenient as they allow customers to quickly check up on their accounts when they are out shopping. However, customers need to ensure that they use a secure network to access the banking services. 

Time efficiency 

A study by Kim & Prabhakar, (2004) , revealed that internet banking facilitates efficient use of time. Through internet banking, one can do a lot within a short time. A customer does not have to travel long distances in order to deposit his or her check. He or she simply has to take a snapshot of the check and have it deposited into his or her account. Additionally, several cash transfers can be done in a minutes, thanks to the advanced internet banking technology. 

Technological advances associated with mobile banking have shaped the way customers conduct their account transactions ( Samar et al., 2017) . For instance, such services as bill payments, statement acquisitions, and check deposits can be done anywhere as long as internet connectivity is available. Internet banking has significantly made banking simpler and quicker. As such, one can utilize time more efficiently. Long and tiresome trips to the banking halls can be eliminated. 

Activity tracking 

According to Marakarkandy et al., (2017), internet banking allows customers to effectively track their online transactions. Internet banking services allow customers limitless visibility of their transactions. This implies that customers can identify issues arising from recorded transactions. For instance, customers may spot unauthorized transactions. This way, they can launch complaints and have them resolved on time. Effective activity tracking is essential for ensuring account security. This is because customers can keep track of their account balances and raise red flags in case they notice any fraudulent records. 

Challenges of Using Internet Banking 

Despite the various benefits associated with internet banking, the technology has several challenges. According to Johansson, (2016) , security issues are the major challenges associated with internet banking. Compared to traditional banking, the customers’ funds are less secure. This is because cyber criminals simply need to provide certain personal information in order to break into a customer’s online account. This can be done anonymously, making the recovery process extremely difficult. Online baking frauds have significantly increased in the recent past. Cyber criminals are developing more effective strategies for carrying out online banking frauds. The problem has made some of the bank customers skeptical about using online banking facilities. 

Another challenge with internet banking is that it cannot be accessed without the availability of internet connectivity ( Ramavhona & Mokwena, 2016). Customers without internet connectivity cannot use internet banking services. As such, the services are limited to locations where internet connectivity is availability. Lack of internet connectivity is one of the major factors that have impeded the adoption and use of internet banking services. Internet banking can also be difficult to understand. For instance, adult customers may find the online platforms difficult to understand. As such, carrying out transactions can be extremely difficult, particularly for the adult customers who are less techno savvy. 

Features of Internet Banking 

Internet banking has several features that make it stand out as one of the most innovative banking platforms. Internet banking allows banks to better understand the needs of their individual customers ( Salihu & Metin, 2017 ). After identifying the needs of customers, banks offering online banking services can introduce new products and services quickly and easily. 

According to Salihu & Metin, (2017) , customers can make several transactions through internet banking. For instance, customers can make transfers between accounts. Additionally, the customers can make interbank transfers. Internet banking also allows for making payments through RTGS. It is also worth realizing that customers can create fixed deposits, order for check book, and request debit card. Payments can be made by phone or at point of sale transfer terminals. 

Internet banking has some non-transactional features. Such features include checking account balance and tracking personal bank account history ( Samar et al., 2017) . Customers can also provide feedback to banks regarding the services they receive. Banks can get access to customer feedback which can be used to further improve customer experience. The feedback plays a significant role in ensuring that banks provide competitive services. 

Research Results 

The literature review reveals that internet banking has revolutionized the banking industry. The technology has allowed banks to improve customer experiences. The combination of experiences serves to enhance customer satisfaction. The technology has enhanced customer satisfaction by improving access to banking services ( Oruç & Tatar , 2017 ). Accessibility is one of the most important aspects that influence customer satisfaction. Through internet banking, customers can access their bank accounts from virtually everywhere, so long as there is internet connectivity. Banks have ensured that their customers access their accounts, check balances, and make payments efficiently without encountering any barriers ( Kim & Prabhakar, 2004) . All these activities can be carried out from the comfort of their living rooms. As opposed to traditional banking, customers do not have to take long trips to the banking halls. Additionally, bank customers can raise queries through the online platform and have them addressed in a timely manner. They do not have to visit bank offices in order to record complaints. Internet banking has allowed banks to enhance customer satisfaction by easy access to banking services. Accessibility is a critical component of the banks’ value proposition. Banks that seek to gain a competitive advantage should focus on improving their online banking offerings in a bid to meet or exceed customer expectations. 

The research indicates that internet banking has enhanced customer satisfaction by allowing banks to develop personalized services for customers (Bharti, 2016). Today, banks are able to provide personalized offerings to their customers. Customer personal and transactional data can be utilized in understanding the various needs of individual customers. The data enables banks to suggest overdrafts for customers with a low balance and upcoming bills. On the other hand, customer with high balances can be asked to make fixed deposits and benefit from interest income. Similarly, banks can target customers who frequently visit the mortgage loan page and tailor suitable mortgage loans for them. Thus, anticipating customer needs through mobile banking serves to enhance customer satisfaction. 

Internet banking provides convenience to customers ( Gunaratnam et al., 2018). It is worth realizing that convenience is an important element of customer satisfaction. Convenience allows customers to make the most appropriate decision within the shortest time. From a customer’s point of view, convenience can be seen in terms of decision, benefit, transaction, and post-benefit convenience ( Samar et al., 2017) . Decision convenience relates to how a customer can easily decide what services to utilize in bank’s website. The quicker and easier a customer can decide on what to do in a banks website implies a high level of decision convenience. 

The findings also indicate that convenience, time efficiency, and the ability to track transactions are the major motivations behind the use of internet banking by customers. The customers like the convenience associated with online bank transactions. Internet banking allows them to make payments, check balances, deposit checks, and make transfers from the comfort of their homes. Besides, the customers use less time to do a lot of things online. On top of that, customers can easily track their account activities in real-time. However, internet banking faces the threat of insecurity ( Johansson, 2016 ). Online banking accounts are prone to fraudulent actions carried out by cyber criminals. 

Research Conclusions 

Based on the research findings, it can be concluded that internet banking has a positive impact on customer satisfaction. Internet banking provides convenience, accessibility, and efficiency to customers. By improving the overall customer experience, internet banking has enabled banks to remain competitive in the market. Internet banking has enabled banks to increase their market share by serving markets in which they do not have physical branches ( Kim & Prabhakar, 2004) . Customers can access banking services online without necessarily having to walk into any of the banking halls. Internet banking has allowed banks to compete favorably in the global banking industry. Through internet banking, banks can ensure that their customers access their accounts, check balances, and make payments efficiently without encountering any barriers ( Gunaratnam et al., 2018). Additionally, bank customers can raise queries through the online platform and have them addressed in a timely manner. Banks seeking to gain a competitive advantage should focus on improving their online banking offerings in a bid to meet or exceed customer expectations. 

Recommendations 

Banks should invest in online banking in order to establish a competitive brand associated with convenience, accessibility, and efficiency. Technology can be leveraged to increase customers’ online experience and improve satisfaction. The online banking platform has the potential to cut costs both for banks and customers. For instance, internet banking is not labor intensive and banks can make a lot of savings. On the other hand, customers can also cut the travel costs associated with visiting banking halls. Banks can further enhance customer experience by allowing them to forward complaints through the online banking platform. The issues raised should be promptly addressed to improved customer satisfaction and promote loyalty. Banks should also create awareness about security issues facing internet banking and educate their customers on how to protect their accounts. This will helps in reducing internet banking frauds. 

Conclusion 

In conclusion, it is demonstrable that internet banking enhances customer satisfaction. Internet banking promotes accessibility, convenience, and efficiency in the provision of banking services. Customers can make payments, transfers, and check balances from wherever they are. This is because customers can access their bank accounts from virtually everywhere, so long as there is internet connectivity (Samar et al., 2017). Internet banking has allowed banks to compete favorably in the global banking industry. Through internet banking, banks can ensure that their customers access their accounts, check balances, and make payments efficiently without encountering any barriers. Additionally, bank customers can raise queries through the online platform and have them addressed in a timely manner. However, security issues and lack of internet connectivity remain major impediments to the growth of internet banking. Online banks accounts are prone to attacks by cyber criminals. Besides, individuals without internet connectivity cannot access internet banking services. 

References 

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Gunaratnam, A., Konalingam, K., Ratnam, U., & Sivapalan, A. (2018). Factors Influencing on E-Banking Practices: Evidence from Sri Lanka.  Journal of Sociological Research .

Gupta, M. (2019). A STUDY OF CUSTOMER AWARENESS TOWARDS INTERNET BANKING.  Advance and Innovative Research , 86. https://www.researchgate.net/profile/Sachin_Deshmukh5/publication/335690743_IJAIR_Volume_6_Issue_1_XVIII_January_-_March_2019_2/links/5d75f4f6299bf1cb8093117f/IJAIR-Volume-6-Issue-1-XVIII-January-March-2019-2.pdf#page=97 

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Ramavhona, T. C., & Mokwena, S. (2016). Factors influencing Internet banking adoption in South African rural areas.  South African Journal of Information Management ,  18 (2), 1-8.

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Samar, S., Ghani, M., & Alnaser, F. (2017). Predicting customer’s intentions to use internet banking: the role of technology acceptance model (TAM) in e-banking.  Management Science Letters ,  7 (11), 513-524.