Thesis.miuc.ac.ke



THE EFFECT OF DIGITAL BANKING SERVICE ON CUSTOMERS SATISFACTION OF SACCOS: CASE OF WAUMINI SACCO.AUDRINE GIFT WAFULABBM/133/14/15A Research project submitted to the department of business in partial fulfillmentOf the requirements for the A ward of a degree in Bachelor of BusinessMARIST INTERNATIONAL UNIVERSITY COLLEGEA CONSTITUENT COLLEGE OF THE CATHOLIC UNIVERSITY OF EASTERN AFRICANAIROBI –KENYAJUNE -2018 DECLARATIONI hereby declare that this research project is my original work and has never been submitted in any institution of higher learning for award of degree.Signature …………………… Date ………………Student AUDRINE GIFT WAFULA BBM/133/15/16The project will be submitted for examination with an approval under university supervisor. Signature …………………… Date ……………………Supervisor LINDA KHAGULIThis project will be approved by head of department (HOD). Signature ………………… Date …………… Head of Department ELLIAB WANYANGU ACKNOWLEDGMENT I am very grateful to the almighty God for giving me good health, the strength and opportunity to do this project. I thank my lecturers and my supervisor madam Linda Khaguli who helped me to go through this project. I am deeply grateful to my class mates with whom we shared lectures and experiences. My heartfelt appreciation to my family and friends for their support, encouragement and prayers, may the good Lord bless them. ABSTRACTSacco’s have been forced to deleverage and identify alternative sources of value as a result of increased regulations and competitive challenges. This has led to the introduction of digital banking where technology is mostly embraced while carrying transactions. However, customers are still waiting for this new banking experience as a revolutionary transformation that will bring many new features, including anytime and anywhere banking, ultra-fast response times, and omnipresent advisors. This study purposed to investigate the effect of digital banking service on customer satisfaction of a Sacco case of Waumini Sacco in Nairobi. Three objectives that guided the study: To ascertain the types of digital banking tools used that affect customer satisfaction,To determine the benefits of digital banking service on customers satisfaction, To establish how accessibility to digital banking affects Customer Satisfaction. The target population for the study was Marist staff members who are customers of Waumini Sacco and descriptive survey design was done and data was collected using questionnaires that were distributed to gather primary data. Analysis was undertaken with aid of Statistical package for social science (SPSS) software where both descriptive and correlation analysis were performed to determine if there was any relation between digital banking service and customer satisfaction of waumini Sacco. The data collection was analyzed using both qualitative and quantitative methods. Quantitative data was used to obtain descriptive statistics such as frequency, percentages and standard deviation, while qualitative method was used to analyze the open ended question and descriptive statistics. Recommendations arising from the study are; in order to have faster processes in digital banking, there is need by banks to invest more on robust reliable systems to reduce incidents of failed transactions and transactional errors in ATMs, Mobile banking Sacco’s need to come up with an application that can be used to enhance digital banking which will be considered safe and private in order to boost the operations, availability and accessibility of digital banking. DEDICATION I dedicate this work to my family for their tireless effort, support and blessings during the time of writing this project, and also to my friends and teachers. God bless you.LIST OF ABBREVIATIONAbbreviation Meaning SACCO Savings and credit cooperative societyKCC Kenya cooperative creameriesKPCU Kenya planters cooperative unionHCU Horticultural cooperative unionFOSA Front office service activityMFIs Microfinance institutionsATM Automated machineFSD Financial standardSPSS Scientific Packages for Social SciencesTAM Technology Acceptance ModelDOI Diffusion of InnovationsCBK Commercial Banks in KenyaPCs Personal computersB2B Business to customerSASRA Sacco societies regulatory authorityIT Information technologyPOS Point Of SaleSMS Short message serviceICT Information and communication technologyFig FigureTable of Contents TOC \o "1-3" \h \z \u DECLARATION PAGEREF _Toc518305842 \h iiACKNOWLEDGMENT PAGEREF _Toc518305843 \h iiiABSTRACT PAGEREF _Toc518305844 \h ivDEDICATION PAGEREF _Toc518305845 \h vLIST OF ABBREVIATION PAGEREF _Toc518305846 \h viCHAPTER ONE PAGEREF _Toc518305847 \h 1INTRODUCTION PAGEREF _Toc518305848 \h 11.0 Introduction PAGEREF _Toc518305849 \h 11.1Background of the study PAGEREF _Toc518305850 \h 11.1.1 Background of Waumini Sacco PAGEREF _Toc518305851 \h 41.2 Statement of the Problem PAGEREF _Toc518305852 \h 61.3 Objectives PAGEREF _Toc518305853 \h 81.3.1 General objective PAGEREF _Toc518305854 \h 81.3.2 Specific objectives PAGEREF _Toc518305855 \h 81.4 Research questions PAGEREF _Toc518305856 \h 81.5 Significance of the study PAGEREF _Toc518305857 \h 91.6 Scope of the Study PAGEREF _Toc518305858 \h 91.7 Conceptual Frameworks PAGEREF _Toc518305859 \h 10Figure 1.0 conceptual framework PAGEREF _Toc518305860 \h 10CHAPTET TWO PAGEREF _Toc518305861 \h 11LITRATURE REVIEW PAGEREF _Toc518305862 \h 112.0 Literature review PAGEREF _Toc518305863 \h 112.1 Theoretical framework PAGEREF _Toc518305864 \h 112.1.1 Diffusion of Innovation Theory PAGEREF _Toc518305865 \h 112.1.2 Technology acceptance model PAGEREF _Toc518305866 \h 122.1.3 Marcus's Theoretical Model PAGEREF _Toc518305867 \h 132.2 Empirical review PAGEREF _Toc518305868 \h 142.2.1 Digital banking tools PAGEREF _Toc518305869 \h 172.2.3 Accessibility PAGEREF _Toc518305870 \h 192.2.4 Customer Satisfaction PAGEREF _Toc518305871 \h 212.3 Knowledge gap PAGEREF _Toc518305872 \h 23CHAPTER THREE PAGEREF _Toc518305873 \h 25RESEARCH DESIGN AND M ETHODOLOGY PAGEREF _Toc518305874 \h 253.0 RESEARCH DESIGN AND METHODOLOGY PAGEREF _Toc518305875 \h 253.1 Research Design PAGEREF _Toc518305876 \h 253.2 The target population. PAGEREF _Toc518305877 \h 263.3 Sample size and sampling technique PAGEREF _Toc518305878 \h 263.4 Data collection PAGEREF _Toc518305879 \h 263.5 Data Analysis and Procedures PAGEREF _Toc518305880 \h 27CHAPTER FOUR PAGEREF _Toc518305881 \h 28DATA ANALYSIS RESULT AND DISCUSSION PAGEREF _Toc518305882 \h 284.0 Introduction PAGEREF _Toc518305883 \h 284.1 Response Rate PAGEREF _Toc518305884 \h 284.1 Questionnaire Return Rate PAGEREF _Toc518305885 \h 284.2 Background Information PAGEREF _Toc518305886 \h 29FIGURE 4.2.1 Gender PAGEREF _Toc518305887 \h 29Source: Researcher (2018) PAGEREF _Toc518305888 \h 294.2.3 Academic qualification PAGEREF _Toc518305889 \h 30Figure 4.2.2 academic qualification PAGEREF _Toc518305890 \h 30source (Researcher 2018) PAGEREF _Toc518305891 \h 304.2.4 Knowledge about technology PAGEREF _Toc518305892 \h 30figure 4.2.3 knowledge on information technology skills source researcher(2018) PAGEREF _Toc518305893 \h 314.2.5 membership years PAGEREF _Toc518305894 \h 314.3 customer satisfaction PAGEREF _Toc518305895 \h 324.4 Accessibility PAGEREF _Toc518305896 \h 334.5 Tools used PAGEREF _Toc518305897 \h 334.5.1 Types of tools used to do banking PAGEREF _Toc518305898 \h 33Figure 4.2.4 Types of tools used PAGEREF _Toc518305899 \h 34source: Researcher (2018) PAGEREF _Toc518305900 \h 344.5.2 Other questions about the tools used PAGEREF _Toc518305901 \h 344.6 Benefits of digital banking PAGEREF _Toc518305902 \h 35figure 4.2.5 rating of the Sacco according to experience PAGEREF _Toc518305903 \h 36source: Researcher (2018) PAGEREF _Toc518305904 \h 36CHAPTER FIVE: SUMMARY, CONCLUSION AND PAGEREF _Toc518305905 \h 37RECOMMENDATIONS PAGEREF _Toc518305906 \h 375.0 Introduction PAGEREF _Toc518305907 \h 375.1 Summary of the findings PAGEREF _Toc518305908 \h 375.2 Discussions of Findings PAGEREF _Toc518305909 \h 385.3 Conclusion PAGEREF _Toc518305910 \h 395.4 Recommendation PAGEREF _Toc518305911 \h 395.6 Suggestions for Further Research PAGEREF _Toc518305912 \h 40Reference PAGEREF _Toc518305913 \h 41QUESTIONNAIRE PAGEREF _Toc518305914 \h 45LIST OF FIGURES TOC \h \z \c "Figure" Figure 1.7 Conceptual framework8Figure 4.2.1 Gender22Figure 4.2.3 Academic qualification23Figure 4.2.4 Knowledge on information technology skills24Figure 4.5.1 Type of tools used26Figure 4.7 Rating of the sacco according to expirience28LIST OF TABLESTable 4.1 Questionnaire return rate…...........................................................................................22Table 4.2.2 Type of membership..........................................................................................…......23Table 4.2.5 Membership years .............................................................................................…......25Table 4.3 Customer satisfaction………………………………………………………………...................................26Table 4.4 Accessibility…………………………………..…………………………………………………………………………..26Table 4.5.2 Other questions about the tools used …………..............................................................27 CHAPTER ONEINTRODUCTION1.0 IntroductionThis chapter contains the background of the study, statement of the problem, objectives, research questions, significant of the study, scope of the study, and conceptual framework. 1.1Background of the studyDigital banking is digitization of all the traditional banking activities and programs that historically were available to customers when physically inside of a bank branch. (Stevens 2002).Digital Banking is the application of technology to ensure seamless end-to-end processing of banking transactions or operations initiated by the client to ensuring maximum utility to the client in terms of availability, usefulness and cost. (Simpson 2002).Modern banking began in Renaissance Italy and spread gradually across Europe. Early banking centers included Florence, Hamburg, Amsterdam, and London. The first central bank, the Bank of London, was founded in 1694. The U.S. Federal Reserve was created in 1913, and the European Central Bank was created in 1998. By the time you read this, the world’s most important bank might be the Peoples Bank of China in Beijing. Banks have come a long way since the dawn of commerce, and the story of banking is still unfolding. Despite the passage of time, however, the basics of banking have remained surprisingly unchanged (Ritter & silber 1990). Recent analysis shows that over the next five years, more than two-thirds of banking customers in Europe are likely to be “self-directed” and highly adapted to the online world. In fact, these same consumers already take great advantage of digital technologies in other industries. Digital transformation will put upward of 30 percent of the revenues of a typical European bank in play, particularly in high-turnover products such as personal loans and payments and banks can remove 20 to 25 percent of their cost base by leveraging this digital shift to transform how they process and service. (Buckley, 2003) The model indicates that European retail banks that pursue a full digital transformation, pulling all improvement levers, can realize improvements in earnings before interest, taxes, depreciation, and amortization of more than 40 percent over the next five years. On front-end transformation, beyond diverting existing branch activity into digital channels, digital tools can also be used to augment frontline servicing (for example, with iPad forms rather than paper forms, or videoconference access to specialists to maximize their utilization) easily doubling staff productivity and enhancing the customer experience. ( Richard, 2009).According to economists, Kenya is considered as the leading country in digital banking due to use of M-Pesa which was launched in 2007 by Safaricom the country’s largest mobile network operator which is now used by over 17m Kenyans. M-PESA was originally designed as a system to allow microfinance-loan repayments to be made by phone, reducing the costs associated with handling cash and thus making possible lower interest rates. But after pilot testing it was broadened to become a general money-transfer scheme. (Tarkka, 2002), Once you have signed up, you pay money into the system by handing cash to one of Safaricom 40,000 agents (typically in a corner shop selling airtime), who credits the money to your M-PESA account. You withdraw money by visiting another agent, who checks that you have sufficient funds before debiting your account and handing over the cash. You can also transfer money to others using a menu on your phone. Cash can thus be sent one place to another more quickly, safely and easily than taking bundles of money in person, or asking others to carry it for you. This is particularly useful in a country where many workers in cities send money back home to their families in rural villages. Electronic transfers save people time, freeing them to do other, more productive things instead (Tarkka, 2002)SACCOS are voluntary associations where members regularly pool their savings, and subsequently members may obtain loans which they may use for different purposes. Generally, the idea behind establishment of?SACCOS is to promote savings and make credits available to the members. SACCOS are the important micro-financing institutions for mobilization of financial resources for various development activities (Alila, 1990).The history of Credit Unions (SACCOs) dates back 1870 when the first credit unions appeared in Germany. The idea then moved to North America in 1900 with European immigration. In the world, Canada, United States, Australia and Ireland have the most established movements. In most cases, these credit unions (SACCOs) are much larger than the commercial banks. In Africa, there are 28 countries with established credit unions (SACCOS). Globally there are almost 100 million individual members in 60 + countries around the world (Aduda & Kingoo 2012). Basically SACCOs derive their operation funds from the members through shares and savings (deposits) without which the SACCOs cannot grow. The concept of savings mobilization from members in most cases has been hampered by members not wishing to change ways of running their SACCOs due to cheap loans. (Oyugi, 2014) Savings mobilization for financial institutions has been described as a good strategy for effective operations. However despite realization of the demand and importance attached to this, savings mobilization has remained a challenge for many financial institutions (SACCOs included). Most SACCOs pursue a narrow savings customer base as compared to credit. Deposit taking SACCOs suffer from low savings hence end up using external borrowing which is more expensive than internal borrowing. This has impaired the growth of SACCOs and something requires to be done. (Alila, 1990).SACCOs in Kenya have developed rapidly in terms of size, structure and variety of product and services. They have transformed gradually from manual system of operations to a more open, effective and competitive system which is able to offer an extensive range of products and services. The growth in products, services and membership has led many SACCOs to digitalize their services and therefore improved productivity (Duncan & Elliot, 2004). Even though Kenya did not embrace electronic banking early compared to developed countries, this concept has gained recognition in the microfinance industry and it is considered as a means of gaining competitive advantage. 1.1.1 Background of Waumini Sacco Waumini SACCO is a Savings and Credit Co-operative Society registered in 1980 under the Co-operative environments over the course of its rich history, Waumini SACCO has since prospered. It has continued to grow in diverse membership and inclusive service offerings for individuals, corporate institutions and organized Catholic Church groups. (aumini SACCO, 2016)Today, Waumini Sacco is a leading progressive Sacco with membership of over 21,000 from over 800 Catholic institutions across 26 Catholic Dioceses in Kenya, Catholic Church Faithfuls and past employees of Catholic institutions Mzalendo. In March 2009, the Sacco responded to members banking needs by introducing the Front Office Service Activity (FOSA) to offer banking services to its members. To date the Sacco has incorporated Mobile Baking Services (M-Sacco), and currently has two FOSA banking halls (one in Nairobi HQ and one in Nakuru branch). The Sacco has set up two new branches in Nakuru and Kisii and is in the process of opening several liaison offices across the country.(Waumini SACCO, 2016)Waumini Sacco launched M-Sacco in 2014 which is an M-banking platform that enables their members to transact through their mobile phones at their convenience and comfort of their work places or homes. This solution has become a channel of choice to the members. . The Sacco primarily mobilizes Savings and Deposits and extends Credit to its members thereby empowering them economically and socially, among other range of products the Sacco intends to bring in the market include; development loans, emergency loans, and bridging loan facility. (Ademba, 2012).Satisfaction is a person’s feeling either he or she is happy or disappointed towards a product or service received, with compared to his or her expectation. In terms of online banking, customer satisfaction is concerned with service fairness and service quality provided by the Sacco to its customers. Customer satisfaction has become one of the major areas in marketing whereby all the businesses should look into. In general, there are many factors that affect customer satisfaction. These include the service quality, brand perception, perceived value, customer service and others. (Smith, 2000). Customer satisfaction is very important to all the businesses as it determines the revenue and popularity of the business. In the banking sector, high customer satisfaction will help to retain old customers, and at the same time attract new customers. When people are satisfied with the products or services provided, they will start to trust the company and then build a longer relationship with the company. In order to stay competitive in the banking sector, there must always be innovation in order to attract new customers. Digital banking is one of the innovations that can be made in order to be different from other competitors. 1.2 Statement of the Problem This study is important to customers, Sacco’s and society in general because with digital banking you don’t need a giant vault to offer financial service. Customer satisfaction is the most important factor for the long term success of any Sacco. Kenya has one of the most dynamic financial sectors in Africa with over 40 banks and over 1500 SACCOs. However, despite the wide range and the high number of financial institutions, access to financial services has been limited to urban areas of the country. (Disend 2013) A recent Financial Access study undertaken jointly by Financial Sector Deepening identified that only 22.6 percent of the total population aged 18years and above have access to formal financial services i.e. from the banks, insurance products and Sacco’s. Technology is consistently cited as one of the greatest challenges faced by microfinance institutions (MFIs) around the world. It is widely recognized that technology is invaluable for improving efficiency, accuracy, increasing outreach and reducing costs. However, mobile banking technology and Internet are scarce. ( Rosenberg, 2009).According to Previous research, whereas the future of the co-operative development in a liberalized economic environment seems bright, the challenge is how to inculcate the business virtues in the less adapted cooperatives to spread the benefits to a wider population in the country. The cooperative movement in Kenya has become a success story mainly in the areas of loans disbursement but continues to miss opportunities in the use of modern information Communication technology thus making it necessary for it to refocus and re-assess its capacity not just to mobilizing financial resources further, but also to manage them well for faster economic growth (Oyugi, 2014).According to Malhotra and Singh (2004), banking through e-banking has emerged as a strategic Resource for achieving higher efficiency, control of operations and reduction of cost by replacing paper based and labor intensive methods with automated processes thus leading to higher productivity and profitability. ATM, telephone banking and internet banking are three forms of digital banking service delivery channels that are keys to improving the financial performance of a Sacco (Cooperative Bank, 2008). Kenya has adopted the use of digital channels to deliver services. Phones and even accessing Statements online has improved services to members, increased revenues and growth in profits they face a unique challenge of connecting the branches while the available infrastructure and income per capita in the region impose severe limitations. This study therefore explored the perceived effects of digital service on customer’s satisfaction of Sacco’s. (Buckley 2003).According to muluka (2015). Digital modernization, is giving traditional Sacco’s a second chance to deepen customer Satisfaction and loyalty, driving long-term relationships and profitability with the approach also Embracing the potential to meet consumers’ expectations and bring banking back. How customers perceive their Sacco’s, the services they get from them and whether they deliver on this promises is a matter worth looking at. Digital banking channels improve customers’ access, facilitate the offerings of more services, increase customer loyalty, attract new customers, provide services offered by competitors and reduce customer attrition.Different researches have been done on mobile and internet banking impacts on financial performance in financial institutions (Amin, 2007) Research linking electronic banking service quality to financial performance of banks in Kenya. (Buckley 2003).But less has been researched on digital banking service impact in Sacco’s and customer’s satisfaction. Therefore, this study focuses on effect of digital banking in Sacco’s and we will be able to see how customers and Sacco’s benefit from digital banking or if there is any limitation on it.1.3 Objectives1.3.1 General objective To determine the effect of digital banking service on customers satisfaction of Sacco’s using Waumini Sacco as a case study.1.3.2 Specific objectivesTo acertain the types of digital banking tools used that affect customer satisfaction.To determine the benefits of digital banking service on customers satisfaction.To establish how accessibility to digital banking affects Customer Satisfaction. 1.4 Research questionsWhat are the types of digital banking tools used by customers of Waumini Sacco?What are the benefits of digital banking service on customer’s satisfaction of Waumini Sacco? What are the effects of digital banking accessibility on customer satisfaction?1.5 Significance of the study The study will be crucial to emerging financial institutions as it will provide answers to the factors against the implementation of internet banking in Kenya, prove of the success and growth associated with the implementation of internet banking and highlight the areas of banking operations that can be enhanced via internet banking. (Disend 2013) It is equally significant for bank executives and indeed the policy makers of the banks and financial institutions to be aware of internet banking as a product of internet commerce with a view to making strategic decisions. The study is also expected to give an insight on the state of digital banking as a competition to the Sacco’s in Kenya and the factors that have greatly influenced its growth. Players in the micro-finance institution sector will find the study useful as they can use the findings to strategize on how they can mutually benefit from this development. (Emmanuel and Adebayo 2011)The study will also enable customers to know the advantages they can get when using digital banking over traditional banking because digital banking makes life much easier and banking much faster for customers since it saves time, it provides banking 24/7 from any place that has internet access and also provides security and privacy to customers. Finally, the study adds to the existing literature, and is a valuable tool for students, academicians, institutions. (Amin, 2007). Corporate managers and individuals who want to learn more about mobile and internet banking.1.6 Scope of the Study This research was conducted to examine the effect of digital banking service on customer satisfaction of Sacco’s. The target population was the members or customers of Waumini Sacco at Marist international university college. 1.7 Conceptual FrameworksIndependent variable DIGITAL BANKING TOOLSMobile banking.Internet banking.ATMs Dependent variableCustomer satisfaction.customer loyaltyBenefits of digital bankingSecurityInformationAccessibilityAccessibility AvailabilityEase of useFigure 1.0 conceptual frameworkSource: Author (2017) CHAPTET TWOLITRATURE REVIEW2.0 Literature reviewThis chapter comprise of theoretical framework, other reviews and empirical review of and knowledge gap of the study. 2.1 Theoretical framework 2.1.1 Diffusion of Innovation Theory The adoption of technological innovations has been explained within several theoretical frameworks. One popular theory is the Diffusion of Innovations (DoI) theory was developed by Rogers.E.M (1962). An innovation was defined by Denning.P (2004) as:’ a transformation of practice in a community'. It essentially is an idea, practice or object that is perceived to be new by a person or adopting entity. Innovation is transmitted through diffusion and adoption. Diffusion entails communicating or spreading of the news of the innovation to the group for use of the innovation (Rogers, 1995). Rogers' diffusion of innovation theory postulate that diffusion of innovation occur as potential users become aware of the innovation, judge its relative value and make a decision.The theory consists of three components: the innovation decision process, characteristics of an innovation and adopter characteristics (Bates, Manuel and Oppenheim, 2007). The innovation decision process categorizes the steps an individual takes from awareness of an innovation, through the formulation of an attitude to the innovation, on to the decision as to whether to implement, into knowledge, persuasion, decision, implementation and confirmation. The characteristics of an innovation have an impact on the likelihood of acceptance and adoption, and also on the rate at which this process develops. These innovation characteristics can also be classified into five criteria: Compatibility, complexity, observability, relative advantage and trialibility. The socio-economic characteristics of adopters also fall under three headings: socio economic (social status, social mobility, level of education etc.), personality values (attitude to change, risk and science, empathy, intelligence, outlook and degree of fatalism, level of aspiration etc.) and communication behavior (degree of contact with change agents, degree of exposure to mass media communications, degree of opinion leadership, interconnectedness in social networks, cosmopolitan outlook, degree of social participation, tendency to seek information about innovation, and consequently a greater degree of knowledge about innovation) (Rogers, 1995; Fichman 1992; Bates, Manuel and Oppenheim, 2007; Olatokun and Igbinedion,2009). This theory can be linked to the digital banking services quality as Sacco’s need to adapt to new Use of digital services on contrary to the traditional way of operations they had long adopted. 2.1.2 Technology acceptance modelThe Technology Acceptance Model (TAM) is similar to the diffusion of innovation theory but it places more emphasis on psychological predispositions and social influences such as beliefs, attitudes and intentions. Davis (1986) developed the Technology Acceptance Model which deals more specifically with the prediction of the acceptability of an information system. The purpose of this model was to predict the acceptability of a tool and to identify the modifications which must be brought to the system in order to make it acceptable to users. This model suggested that the acceptability of an information system is determined by two main factors: Perceived usefulness and perceived ease of use. The Technology Acceptance Model postulates that the use of an information system is determined by the behavioral intention, but on the other hand, that the behavioral intention is determined by the person’s attitude towards the use of the system and also by his perception of its utility. According to Davis (1986) the attitude of an individual is not the only factor that determines his use of a system, but is also based on the impact which it may have on his performance. Therefore, even if an employee does not welcome an information system, the probability that he use it is high if he perceives that the system improve his performance at work. Sacco employees have had no option but to accept digitalization of process so that work is reduced and efficiency achieved FSD Kenya (2010). On this study, acceptability of the digital services by staff, customers and other users may vary or fail. It’s therefore important that modification that can be used be made on the digitalization of the services to aid acceptance. 2.1.3 Marcus's Theoretical Model Marcus's theoretical model of adoption developed by Marcus (1986) highlights the importance of innovative behavior and the phenomenon of others modeling themselves on this. Communication channels are a vital component in spreading this modeling behavior to other potential adopters. The range of influential factors in the take-up of innovations include: the associated 'costs' (personal and institutional), the availability of necessary 'resources' (money, equipment, training, time, prior experience and relevant skills) and the 'value' of the innovation (Bates, Manuel and Oppenheim, 2007). Kwon and Zmud (1987) defined five contextual factors that may impact on any six identified stages of digitalization namely; user community characteristic, organizational characteristics, technology characteristic, task characteristic and environmental factors. Robertson and Gatignon (1986) proposed that a variety of competitive effects in the technology consumers industry (competitive intensity, demand uncertainty, professionalism and cosmopolitanism) and within the technology supplier’s industry (level of competitiveness, reputation, Research and Development allocation, technology standardization) impact the rate and level of diffusion of high technology innovations. Other models focused on the influence of culture in the diffusion and adoption process. Both personal and organizational processes influence a culture of innovation. These organizational processes include: Management values, rewards, prohibitions, encouragement of new ideas, encouragement of risk-taking, services, support, communication channels and staff networks. An institution with these key components in place is better placed to ensure that innovations are facilitated, encouraged, accepted and diffused across its organization. In this wise, the institutional environment shapes the development of the automation initiative, its adoption and implementation. The success or failure of a new digital innovation is thus influenced by culture (Denning, 2004; Bates, Manuel and Oppenheim, 2007). Sacco’s normally consider the associated costs, the availability of necessary resources like money, training, time, skills and the value of innovation before adopting the digital services. It’s due to this that this theory is relevant to this study. Determinants of Financial Performance of Sacco’s Terence and Flevian (1989) defines performance measurement as a way of ensuring that resources available are used in the most efficient and effective way.2.2 Empirical reviewMuhammad & Mainudin (2006) assessed the performance in the context of bank of Asia to determine the relationship between digital banking service quality, customer satisfaction and financial performance. They found out that provision of high quality digital service leads to financial performance and that the use of the internet, telephone and ATM are very essential in boosting growth of customers. They also noted that bank of Asia symbolizes modern banking with innovation services because it provided online banking, ATM support, SMS and Net baking services. Hernando & Nieto (2007) analyzed the Spanish commercial banks over the period 1994- 2002 to measure the effect of adoption of a transactional website on financial performance. Their findings suggest that with a lag of one and a half years the increase in banking profitability can be significantly observed via decreases in overhead expenses with respect to staff and marketing. They also mentioned that internet banking and telephone are seen as complementary delivery channels rather than a substitute to brick and mortar branches. The greater use of Internet in retail banking however brings additional risk components to overall risk profile of the banks. The Basel committee has recognized these related risks and has issued Risk Management Principles for Electronic Banking (July 2003). It aims to promote safety and soundness of e-banking activities while preserving the necessary flexibility in implementation due to speed of change in technology. Gyamfi, Acheampong & Asamoah (2007) studied banks in Ghana for the period 2003-2007 to establish the relationship between automated service delivery and business growth. The findings were that when banks equip their employees well enough for quality service delivery a drastic shift occurs in the management and success of the banks. They found out that profit and growth are stimulated by quality service delivery that satisfies customers and employees. In their study they found out that a growing number of Banks in Ghana got to know that emphasis had to be put on service deliver, customers’ service and employees through digitalization. They also looked at service delivery and customer satisfaction to assess the corresponding impact on profitability and growth of these Banks. Sonja.(2010) analyzed Sacco’s in Uganda to determine the digital service on the growth of Sacco’s. Her findings suggested that digitalization of Sacco’s and therefore digital services lead to efficiency in running the Sacco’s, customer growth, increased transparency and generation of different accurate financial reports. Sonja noted that many Sacco’s that had no digital their operations had it rough on gaining customer loyalty and even introduction of new products and services was a challenge being that managing many products without proper digitalization was posing a great challenge. Aduda & Kingoo (2012) studied Commercial Banks in Kenya (CBK) to investigate the relationship between e-banking and performance of Kenya banking system. Specifically, the study established whether there is relationship between the dependent variable i.e., performance measured by return on assets and the independent variables: investments in e-banking, number of ATMS and number of debits cards issued to customers as proxy for e-banking. The study used secondary data. The data was collected from annual report of target banks and Central Bank of Kenya. The study used both descriptive and inferential statistics in analyzing the data. In general the study revealed that e-banking has strong and significance marginal effects on returns on asset in the Kenyan banking industry. Thus, there exists positive relationship between e-banking and bank performance. In general conclusion the electronic banking has made banking transaction to be easier by bringing services closer to its customers hence improving banking industry performance. Okiro & Ndung’u (2013) analyzed financial institutions in Kenya to establish impact of mobile and internet banking on customers satisfaction. In particular they found out that commercial banks had the highest rate of usage of internet banking among the financial institutions sampled. SACCOS were slowly adopting internet banking, while micro finance institutions have not yet adopted internet banking. The study also revealed that the most prevalent internet banking services were seeking product rate information and the use of online credit cards. They found that adoption of internet banking has enhanced performance of the banking industry due to increased efficiency, effectiveness and productivity2.2.1 Digital banking tools Literally this is banking on the mobile phone. Mobile banking is a system or platform in which customers are automatically updated on any changes in their account. These changes may come in the form of account debits and credits or any charges to the account. All it needs for mobile banking is a mobile phone with a well-functioning text messaging system. SMS banking falls under this category. This system uses short text messaging system to inform customers of their account (Chovanova, 2006).According to Essinger (1999) internet banking is: “to give customers access to their bank accounts via a web site and to enable them to enact certain transactions on their account, given compliance with stringent security checks”. Internet banking provides convenient and flexible services to customers. It enables customers to transact almost all their banking transactions online. One could check accounts, query the bank and also transfer funds to other people on different accounts, it is the most financially savvy innovative method for yielding higher profitability. Another feature of internet banking is that, it gives a 24/7 access to customers.An automated teller machine (ATM) is an electronic computerized telecommunications device that allows a financial institution's customers to directly use a secure method of communication to access their bank accounts, order or make cash withdrawals (or cash advances using a credit card) and check their account balances without the need for a human bank teller. Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts, top up their mobile phones' pre-paid accounts or even buy postage stamps. 2.2.2 Benefits of digital banking The benefits of electronic banking cannot be over emphasized. This is to say that it provides a lot of benefits both to the customer and the bank itself. To begin with a foremost benefit e-banking service is competitive branding and as well as better appreciation to the market demands. Banks that provide services are known to be leaders in technology implementation and advancement. Thus, the better image brand they enjoy. The other advantages may be measured in terms of money. The primary objective of every institution is to increase profits with which banks cannot be excluded. Many contend that E-banking can do away the hitherto laborious and less viable methods for banking. As indicated by perspectives communicated by Mols. N. P (2000) it was opined that the Internet is a revolution that will do away the old request holds much influence. The internet revolution in electronic-banking transaction is much less expensive than branch or even telephone transactions. According to Jen and Michael (2006) electronic-banking has made common open doors for banks and businesses around the world, and that is clear in the way they sort out financial transaction. Although opportunities to banks, there are various difficulties such as the innovation of IT applications, the obscuring business sector limits, rupturing modern boundaries, the passage of emerging competitors, and the development of new plans of action (Liao and Cheung 2003). Studies by Rikya (2007) and Han (2008) on the presentation of internet banking and prospects for Bangladesh presumes that the coming of advances have truly gotten data upheaval the general public and that Internet Technology is rightly viewed as the third flood of upset after the farming and mechanical unrests. The approach and adoption of the internet by businesses has uprooted the constraint of time, distance and communication making the globe really a little village. Han (2008) likewise discovered the good effect of informational technology on SME finance. SMEs that adapt e-banking are more productive that those that utilize conventional channel. According to Rotchana kitumnuai (2003) E- banking provides various benefits to both banks and customers. With electronic banking customers can check accounts, transfer money and can have access to numerous banking products and services. There is no need for Customers to visit banks to make transactions, (Cheng 2006). Electronic banking assumes a vital part in the economy helping buyers and sellers to make financial worth via the exchange of goods and services by avoiding physical contacts (Bakos, 1998). Through electronic banking, banks have the capacity to draw in versatile clients which give to a great degree huge profit by giving portable money related services. Wind.J (2001), demonstrated that numerous banks are roused to actualize E-banking by components identifying with augmenting their profit through expansion market scope. The increase use in credit card is attributable to electronic banking. Customers are able to shop worldwide without the need of carrying paper money.2.2.3 Accessibility Accessibility of digital banking has to do with the ease with which customers have access to financial tools, their accounts, ease of making payments from their accounts and access to money available in the accounts using various digital channels namely, online banking facilities, ATMs, POS terminals, mobile banking to mention but a few. Accessibility defines how these channels make a meaningful experience to the customers in terms of access to their funds, access to banking facilities and services and feedback. It determines whether customers find the products to be serving their needs when they want it, in a way that makes their banking convenient (Villers, 2012). Access to information and the ease with which consumers can share views with those they know ‘the world’ is dramatic. Good experiences can be easily shared online as can negative ones. They also eliminate the need for buildings and office equipment. In South Africa, the DRC, Zambia and Kenya for instance, mobile phone banking is taking services to remote areas where conventional banks have been physically absent. Subscribers can now open accounts, check their balances, pay their bills, transfer money, and cater for their daily basic needs. In the past 30 years, three products that are seen to have had the most impact on the world are in the ICT sector: the internet, PCs and mobile phones. Of these, the mobile phone has the highest penetration in developing countries (Ondeige , 2010) Njiru (2014) talking about access to banks with reference CBK report says 76.7% customers in the country have access to a financial institution within five-kilometer radius, compared to Uganda and Tanzania which recorded 42.7% and 31 % respectively. There has been rapid increase in access points to technological innovations, financial system and regulatory reforms, and increased competition in the market. The use of ATMs, POS terminals, Internet and mobile phone platforms have accelerated and moved closer to branchless banking. He states that in Kenya there are 65,353 access points which include bank agents, money transfer services, Sacco’s, forex bureaus, and insurers.2.2.4 Customer Satisfaction In any “business to customer” (B2C) type of environment, satisfying a customer is the ultimate goal of business. It is an important theoretical as well as practical issue for most marketers and consumer researchers because organizations sometimes do not really understand what actually goes on in customer’s mind (Fournier and Mick, 1999). The concept of customer satisfaction is equally important for service organizations, such as banks, as many of them subscribe to the fact that higher customer satisfaction will lead to greater customer loyalty (Boulding 1993) which in turn leads to future revenue. Satisfaction occurs when one gets what one needs, desires, expects, deserves or dreams to be ones entitlement. Oliver (1980) defines customer satisfaction as product performance equivalent to customer expectation. Oliver (1981) expressed satisfaction as a psychological state resulting from a process of emotional and cognitive evaluation.According to Hansemark and Albinsson (2004), satisfaction is an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfillment of some need, goal or desire. Kotler (1997) defined satisfaction as a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. Further customer satisfaction is a collective outcome of perception, evaluation and psychological reaction to the consumption experience with a product or service. Haoyer and Mach Innis (2001) expressed that satisfaction can be associated with the feelings of acceptance, happiness, relief, excitement and delight. In a competitive marketplace, where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. It can also be defined as a global issue that effects all organizations irrespective of their size, whether profit or non-profit, local or multinational companies that have a more satisfied customer base along with higher economic returns. (Boulding 1993) in turn, showed that satisfaction has a significant effect on purchase intention. For instance, if customers are satisfied with a particular service offering after its use, they are likely to engage in repeat purchase and try in building line extensions (East, 1997). The proliferate use of technological convenience offered by service providers has promoted interest in its effect on customer’s overall satisfaction and has given two more conceptualization of customer satisfaction. These are human encounter satisfaction and technological encounter satisfaction (Bitner 2000). The human encounter satisfaction, which a customer derives from an interaction with an employee of the company, plays an important role in consumer’s overall satisfaction with the services of the organization whereas technological encounter satisfaction means the satisfaction a customer derives from the interaction with the technology of the company, which plays an important role in consumer’s overall satisfaction. Therefore, it can be inferred that satisfaction is not simply an overall evaluation of a service experience, but an influence of different components of the service (Dixit and Datta, 2010). The boom of internet and electronic banking has evoked several research efforts aimed at understanding service satisfaction in relation to virtual business environment (Yang and Peterson, 2004). Thus, the unique characteristics of internet based services are extensive human- computer interactions and high level self service may imply that customers perceive satisfaction from online services differently when contrasted with their offline counterparts (Ribbink 2004). With the growing trend of information technology in banking sector, customers prefer to deal online with their bank because of the rising trend of technology effecting quality and customer satisfaction. Moreover, online banking facilitates cost-effective decision thinking and applications on the part of the e-bank’s operations and IT managers to enhance customer service quality, develops trust in customers and boosts market share in this expanding but increasingly competitive business area. It thus generates customer satisfaction and also customer commitment (Liao and Cheung, 2008). 2.3 Knowledge gapThe review of literature covers the objective and economic rationale of digital service delivery in the financial institutions where most existing theories and research work done on the field of digitalization service and especially Financial institutions across the world reveals the stringent technicalities of digitalization after the need of digital banking. The theoretical literatures touches on processes ,type benefit and technicalities, there is need to have some theories that elaborates after development automation and its adoptions what needs to be done to keep up with the pace of changing environment and customers argent needs. Empirically many studies have been done on digital service qualities and electronic banking effects on customer satisfaction of different sectors; nothing in particular has been done on this rising sector with many members, which are the Sacco sector. The study therefore sought to explore in details the effects the digital banking service quality has on competition in the challenging environments, on the business growth and satisfaction of the members of the Sacco’s in Kenya. CHAPTER THREERESEARCH DESIGN AND M ETHODOLOGY 3.0 RESEARCH DESIGN AND METHODOLOGY This chapter explained the technique and logics that the researcher used to approach the research questions. This chapter includes: research design, the target population, sample size and sampling techniques, data collection procedure and instruments data analysis. 3.1 Research Design The research study used descriptive survey and is evaluative in nature which means it describes the character and behavior of a particular population in a systematic and accurate manner. A descriptive study was done in order to ascertain and describe the characteristics of variables of interest in the situation. It’s also quantitative because it gives number of Marist staff who are members of Waumini Sacco and qualitative because it measures the value of digital service with the aim of the examines its effect on customer satisfaction and the effect of various factors that lead to customer satisfaction in digital banking like accessibility, effectiveness of tools used and security. This study was based on data gathered from customers through questionnaire and interviewing them which is a primary source. The research work will provide useful insights to Sacco’s, policy makers and researchers in framing policies that can induce customers to use digital services in banking operations with both satisfaction to them and gainful business to Sacco’s 3.2 The target population.The ultimate respondents that this research focuses on were the members of the specified Sacco that the researcher will rely on in order to complete the research study. The target population of the study was 40 Marist staff who are members of Waumini Sacco. 3.3 Sample size and sampling techniqueThere was a need to sample the population due to the large targeted group and the preferable sampling method that the researcher used was random sampling which is a probability sampling. This gave the customers equal chance to participate in giving information on what they thing about digital banking service because the sample size was 50℅ of the total population of Marist staff members who are customers of Waumini Sacco which is 20 staff members.3.4 Data collection The study used primary data because it is more focused on the area of study and it gives more reliable data. This was used to collect data on both the independent variables dependent variable. The questionnaires were administered through open and closed ended questions to target population. The respondents were provided with the questionnaires to fill. The questionnaire had two parts; there was need on information on demographic data (age, gender, membership duration).It also sought to get information regarding the independent variables which are accessibility, benefits of digital banking and digital banking tools. This data collection instrument saves time to both researcher and respondent and also cost. The questionnaires were then administered by research assistant. 3.5 Data Analysis and Procedures The data collection was analyzed using both qualitative and quantitative methods. Quantitative data was used to obtain descriptive statistics such as frequency, percentages, mode, median and standard deviation, while qualitative method was used to analyze the open ended question and descriptive statistics states Best and Khan (2007)The effect of digital banking service on customers satisfaction were examined with the help of Statistical Package for Social Science (SPSS) and specific statistical methods. CHAPTER FOURDATA ANALYSIS RESULT AND DISCUSSION4.0 Introduction This chapter discusses the interpretation and presentation of the findings. This chapter presents analysis of the data on the effect of digital banking service on customer’s satisfaction of Sacco’s licensed by SASRA in Kenya. The chapter also provides the major findings and results of the study. 4.1 Response Rate The study targeted a sample size of 20 respondents from which 15 filled in and returned the questionnaires making a response rate of 86.6%. This response rate was good and representative and conforms to Mugenda and Mugenda (1999) stipulation that a response rate of 50% is adequate for analysis and reporting; a rate of 60% is good and a response rate of 70% and over is excellent4.1 Questionnaire Return Rate Number of questionnaires Distributed Number of questionnaires returned Return Rate 20 15 86.6%Table 4.1 Source: Researcher (2018)4.2 Background InformationThe background information of was useful in contextualization of the study thus a better understanding and clarity was made from the information obtained. Figure4.2.1 shows the gender of the members in the Sacco. FIGURE 4.2.1 Gender Source: Researcher (2018)The chart above shows according to the research conducted men like to bank with Sacco’s compared to women .The figure shows that male are 70% percent and female are 30%. Type of membershipMembership typeFrequencyPercentValid PercentCumulative Percentmember1492.392.392.3board executive17.77.7Total15100.0100.0100.0Table 4.2 Type of membershipSource: researcher (2018)According to the finding, majority of the respondents are members with a percentage of 92.3% and only one board executive.4.2.3 Academic qualificationIn the research carried out in the figure below shows that according to people who were interview the majority were undergraduates followed by diplomas which means that people who does banking are educated and they know the benefits of banking with Saccos.Figure 4.2.2 academic qualification source (Researcher 2018)4.2.4 Knowledge about technologyThere was need to check the knowledge of information technology skills that the customers have was and the results were presented in figure 4.2.3 The results shows that many customers have knowledge on technology skills, there are only few who don’t understand about technology and this is 15% compared to 85% who have skills on technologyfigure 4.2.3 knowledge on information technology skills source researcher(2018)4.2.5 membership yearsThe table bellow shows the years that respondent has been customers in the Sacco and the results shows that majority of respondent have been a member for 4 years which is 30.8% of the total respondents.YearsFrequencyCumulative Percent117.72330.83461.54276.95184.6Table 4.3 membership years source researcher (2018)4.3 customer satisfactionIn the research to find out customers satisfaction the mean between two variables was the same the only difference is the standard deviation, majority of the respondent agreed that the Sacco keeps its promise to the members and also considers customers welfare though there are some who had different opinion.statementMeanStd. Deviationkeeps promises to the customers3.921.115considers customers welfare3.921.188Table 4.4 customer satisfaction source: Researcher (2018)4.4 AccessibilitySome questions were asked on accessibility to find out how digital banking is used and if its readily accessible and the responses were as shown in the tables bellow.statementNMeanStd. DeviationDifficulties in accessing banking tools152.541.050Safe to access153.621.446Table 4.4 accessibility source: Researcher (2018) According to the result from the research carried out it shows that the respondent have difficulty in accessing though its save compared to traditional banking as supported with a standard deviation of 1.446 and a mean of 3.62 which is higher compared to difficulties in accessing which has a mean of 2.54 and standard deviation of 1.050 respectively.4.5 Tools used4.5.1 Types of tools used to do bankingThe findings as presented in chart 4.5.1 indicate that mobile was the most commonly used as presented by 46.2%, this was followed by ATM cards which had 30.8%. Majority of the respondents used digital banking because they are deemed to be fast.Figure 4.2.4 Types of tools used source: Researcher (2018)4.5.2 Other questions about the tools usedApart from types of tools used there was other questions asked in order to get clear information about the instruments used by the Sacco and the results was as presented in the table bellow StatementMeanStd. DeviationThe tool are free from deficiencies3.461.391Tools used are affordable3.691.109Have knowledge and skill about the tools3.621.044Table 4.5 other questions about tools used source: Researcher (2018)In reference to the findings, the majority of the respondent indicated that tools used for digital banking by the Sacco are affordable with a mean of 3.69 and standard deviation of 1.109 and also majority have knowledge and skills about digital tools but also the results indicate that tools are not 100% free from deficiencies which means digital tools can also fail in some cases. 4.6 Benefits of digital bankingIn this section the questions where open ended questions and the responded gave their opinions without any limits and some of their opinions were: its secure to use digital banking, it operates 24/7, it save time, faster service and readily available, and also flexible. Some of the additional information was: its a financial Sacco, it encourages more members in the Sacco, it has good service and also the sale plots and they have housing. This section also asked if there is any recommendation or suggestions and majority of the respondent did not respond to this question but for the few who respondent said that the Sacco should open more branches country wide and it should improve their service and raise their interest rates to its customers. 4.7 rating of the Sacco according to experiencefigure 4.2.5 rating of the Sacco according to experience source: Researcher (2018)The chart above shows the rating of the Sacco according to the experience of the customer and it was being rated as, poor, good, average and perfect.70% of the respondent said its good, perfect was 15% and average was also 15% there was no poor rating.CHAPTER FIVESUMMARY, CONCLUSION AND RECOMMENDATIONS5.0 IntroductionThis chapter presents summary of findings, discussion, conclusions and recommendation made to the study. Suggestions for further research have been given. The chapter is organized in sub themes basing on the objectives of the study. 5.1 Summary of the findingsThe study had a response of 86.6% with more male compared to women, Majority of the Sacco customers have been a member for five years and bellow.61.5% who were the majority were undergraduates, further,84.6% of respondents had IT skills. The respondents understood what digital banking entailed. Digital banking was used because they are considered fast, 74.3% of the respondents were to a large extent satisfied with how the Sacco considers their welfare and how it’s easy to access the services On accessibility of digital banking, it was revealed that ability to transact at preferred timing was considered the most important factor while looking at accessibility. Mobile banking was the most accessible form of digital banking with 61.7% indicating to a moderate extent they could access banking services. 54.9% revealed that their bank was accessible as they could transact, pay bills and access their bank accounts. 50.8% were faced with challenges resulting to use of technology. There was an increase in accessibility of digital banking as proved by the increase in number of ATMs, mobile and internet banking. 5.2 Discussions of Findings The response rate for the study was 86.6% which according to Richardson (2005) any response rate of 50% and above is considered adequate and capable of generalization to other studies. The background information indicated the number of male exceeded that of female thus continued marginalization of women where their low incomes and salaries are used in domestic and household budgets hence most of them do not use the banking facility. Most studies still indicate Transactions could not be compared to traditional banking. The study concludes that speed of transactions has an influence of customer’s satisfaction. On accessibility, it was concluded that bank customers were aware of what entailed accessibility. The most accessible digital platform was mobile banking with a feeling that digital banking could be accessed on a moderate extent. Additionally, having the ability to bank anytime and anywhere and further check balances and access statements could be interpreted as accessibility. Use of technology was the major barrier towards accessibility as technology was changing very fast without the bank customers embracing the needed skills to cope with this new phenomenon. The study thus concludes that increase in accessibility leads to an increase in customer satisfaction. On Benefits, Digital banking was seen as fast and efficient hence adapting to their use was easy. Further from the customer’s daily transactions, it was concluded that the adaptability to the given digital banking channels was very high as presented by the daily number of transaction and years that the customers had used digital banking. Sacco customers used different digital banking channels which was an indicator of their adaptability. Most of the digital platforms of banking used were further reliable however majority of customers had failed to adapt to digital banking at one point in their lives with various reasons given for this failure. With increase in benefits of digital banking then customer satisfaction also increases. 5.3 ConclusionThis study examined the effect of digital banking service on customer’s satisfaction of Sacco’s Licensed by SASRA in Kenya mainly Waumini Sacco. The study concludes that generally digital banking services have a positive influence on the customer’s satisfaction of Waumini Sacco. The study found out that majority of the members uses internet banking services and mobile banking (M-Sacco), ATM services. Alternative delivery mechanism became available such as internet and Mobile banking reduced the dependence on the branch network as a core delivery mechanism. The use of digital banking services is becoming an important factor in the development of financial services industry, and especially Sacco’s hence impacting financial performance and customer satisfaction. The application of digital services to Sacco’s services is a subject of fundamental importance and concerns to all Sacco’s and indeed a prerequisite for local and global competitiveness in the financial sector. The advancement in technology plays an important role in improving service delivery standards in the financial sector. 5.4 Recommendation Basing on the findings as presented in chapter four of this study, the following are recommended: In order to have faster processes in digital banking, there is need by banks to invest more on robust reliable systems to reduce incidents of failed transactions and transactional errors in ATMs, Mobile banking Sacco’s need to come up with an application that can be used to enhance digital banking which will be considered safe and private in order to boost the operations, availability and accessibility of digital banking.There is further need to facilitate ICT skills so that technology can be embraced. Through a joined venture with education institutions ICT skills can be impacted through teaching individuals and cooperates on the changing world of banking technologies.There is need to carry out customer satisfaction surveys to establish how customers are adapting to technology. Suitable techniques should be devised based on what customers want and not what is convenient for a Sacco. 5.6 Suggestions for Further Research Further studies should also be done on the challenges that affect digital banking services in Sacco sector in Kenya since it is not fully employed despite previous studies showing it is beneficial in customer acquisition. A similar study should also be done in other Sacco’s to see whether it will yield the same findings as this study focused on Waumini Sacco. ReferenceAgarwal, Sanjeev, Krishna M. Erramilli and Chekitan D. Dev (2003). Market orientation and performance in service firms: Role of innovation. Journal of Service MarketingAmin, S. I. (2007). M-Banking- To Bank the "Unbanked".Aduda, J. & Kingoo, N. (2012). Journal of Finance and Investment AnalysisAlila. P & Obado,P.(1990).Co-operative credit, The Kenyan SACCOS in a historical and development?perspective.Alila P &Obado,P. (1990):Co-operative credit: The Kenyan SACCOS in a historical and development?perspective; Working paper.Alila P &Obado,P. (1990):Co-operative credit: The Kenyan SACCOS in a historical and development?perspective; Working paper.Buckley J (2003). E-service and the public sector. Managing Service Quality. Chung Hoon Park, Young Gul Kim (2003). A framework of dynamic CRM: Linking marketing with information strategy. Business Process Management JournalCo-operative bank, (2008). The effectiveness of the Sacco model as a financial service provider. Africa Technical workshop, Nairobi KenyaDavis, F. D. (1989) “The Perceived usefulness, Perceived ease of Use, and User Acceptance of information Technology?, MIS Quarterly, 13(3):319-339. Devlin, J.F. (1995). Technology and innovation in retail banking distribution.International Journal of Bank Marketing, 13, (4), 19-25. Denning, P. (2004). Building a culture of innovation. Ubiquity, Available online At: , E., and Elliott, G. (2002). Customer service quality and financial performance.Journal of Financial Services, Disend. E. (2013). Digital Banking: The Importance of Customer Satisfaction in the Digital Era. Retrieved from experience. Accessed on 03 February 2015Edet, O. (2008). Electronic Banking in Banking Industries and its Effects. International Journalof Investment and Finance.Eric Disend. (2013).The reality of consumer driven digital banking. Nairobi ISBN: 978-9966-21-204-7Emmanuel, O.S & Adebayo, A.A. (2011).ICT’s, Service Delivery and Operational Performance. An International Multidisciplinary FinancialEssinger, J. (1999). The virtual banking revolution: the customer, the bank and the Future. 1st ed. London, UK: International Thomson Business PressFlavian, C., Torres, E., and Guinaliu, M. (2004).Corporate image measurement: a further problem for the tangibilization of internet banking services. International Journal of Bank Marketing, 22 (5), 366-84.Henry M. Bwisa (2011) Entrepreneurship Theory and Practice: A Kenyan Perspective. The Jomo Kenyatta Foundation, Nairobi. ISBN 9966-22-888-8http//Lawrence S. Ritter and William L. Silber,(1990). Principles of Money, Banking & Financial Markets , 10th ed.Moutinho L, Smith A (2000). Modeling bank customer satisfaction through mediation of attitudes towards human and automated banking. International Journal of bank marketing.Mols N. P (2000). Organizing for the Effective Introduction of New Distribution Channels in Retail Banking, European Journal of Marketing.Mugenda, A. (2008). Social Science Research, Nairobi: Straight Services LimitedOyugi, I.G. (2014). The effect of automated service on financial performance of Savings and credit cooperative societies licensed by SASRA in KenyaRichard B. (2009). Measuring Organizational Performance: Towards Methodological BestTarkka, J.(2002), The Market for Electronic Cash Cards. Journal of Money, Credit and Banking, Rogers E. M. (1995) Diffusion of information, New York, The Free Press, 4th Edition. Ruyter K, Wetzels M & Kleijnen M. (2001). Customer adoption of e-service: an experimental study. International Journal of Service Industry Management.Simpson, J. (2002) The Impact of the Internet in Banking.Wind, J. (2001): Digital Marketing, Wiley Publication . New YorkAPPENDIX 1:QUESTIONAIREEffect of digital banking service on customer satisfaction, case of waumini SaccoINTRODUCTIONDear respondent, I am a student of Marist International University College a constituent college of Catholic University of Eastern Africa. I am undertaking research on effect of digital banking service on customer satisfaction. In an effort to improve on and enhance customer Satisfaction, Saccos have adopted technology to ensure you have seamless experience when transacting. This is what we refer to as digital banking experience therefore I hereby request you to take part in the success of this research by responding to the items provided in this questionnaire to the best of your knowledge. Your contribution is highly appreciated and necessary for the success of this project. I also wish to assure you that the information you give will be treated confidentially and that it is only meant for academic research. You are not required to fill any of your personal identification details.Thank you in advance.Audrine Gift WafulaResearcher.QUESTIONNAIREINSTRUCTIONTick or fill where necessarySection A: Background information1. Gender: Male Female 2. Membership years: _________________________ 3. Academic qualification: Certificate Diploma Undergraduate Postgraduate Others …………………………………4. Do you have Information on Technology Skills? Yes No 5. Type of membershipMember Board executive6. What is your understanding of digital banking? …………………………………………………………………………………………………………………..………………………………………………………………………………………………………………………Section B: Customer Satisfaction Note: indicate using the scale of (5 means strongly agree, 4 means agree, 3 means neutral, 2 means disagree 1 means strongly disagree. 54321Your Sacco keeps promises it makes to customersYour Sacco considers customer welfare when making important decision Are there any difficulties in accessing your digital banking serviceIs it safe to access you banking service at nightSection C: Digital banking tools1. Types of digital banking tools you use to do banking services.Mobile ATM cardElectronic cardsInternet2. Note: indicate using the scale of (5 means strongly agree, 4 means agree, 3 means neutral, 2 means disagree 1 means strongly disagree. 54321Do you have knowledge and skills about your banking tools?Banking tools used by your Sacco are they free from deficiencies?Section D: Benefits of digital banking1. What are some of the benefit you get when using digital banking as a customer?----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2. Any other additional information about Waumini Sacco-------------------------------------------------------------------------------------------------------……………………………………………………………………………………………3. Any recommendation or suggestion………………………………………………………………………………………..………………………………………………………………………………………….. 4. Rate the service of Waumini Sacco according to your experience Poor GoodPerfectAverage ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download