EFFECT OF COMMUNICATION GAP ON CUSTOMERS' SATISFACTION IN THE BANKING SECTOR OF NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The current progress of trade and the emergence of markets have resulted in significant economic swings and intensified severe rivalry (Narteh, 2013). Currently, consumers have numerous options available to them to surpass their expectations when making saving and a purchasing decision. At the same time, competition has reached its highest point. In the current context of competitive banking, the key to achieving consistent business growth lies in providing exceptional customer service. However, providing customer service has become a difficult task in the banking industry, particularly following the reforms in the financial sector and the introduction of advanced technologies. Malyadri & Sirisha (2015) states that the primary focus of commercial banks is to offer timely and effective service in order to attract and keep new customer. Given the assumption that satisfied customers are crucial for a sustainable business, it is clear that satisfying and retaining these customers is an interactive catalyst that will systematically impact the long-term success of any enterprise in today's service-driven economy (Wasfi & Kostenko, 2014). 

According to Komunda & Osarenkhoe (2012), customer satisfaction strategy is a crucial tool that firms should use to reduce the possibility of alternatives, acting as a vaccine against this risk. Likewise, an effective approach to delighting consumers is by implementing efficient systems for managing complaints and feedback. Additionally, the management of customer complaints and feedback has become a crucial aspect of the banking business, encompassing both regulatory requirements and the need for effective customer service. Similarly, customer complaints and feedback management is a component of a broader strategy known as customer experience management. Banks can establish service standards and delivery methods by actively listening to their consumers (Zairi, 2000). 

Gaining insight into the essence of the service one offers to consumers enables a better understanding of how customers perceive the services given. Tumi (2005) asserts that in every customer service encounter, the perspective of clients plays a vital role in ensuring their satisfaction exceeds expectations. This aids in providing clients with not just what is apparent, but also satisfies a plethora of less apparent customer requirements (Tumi, 2005). 

According to Porter (2008), there has been a significant growth in customer expectations and demand for services. As consumers become more knowledgeable, they expect innovative products, efficient and dependable delivery, and highly responsive services. Consequently, in order to enhance their competitiveness, banks must comprehend the needs and expectations of their clients and fulfil them by offering exceptional services. The banks have made efforts to establish a culture that strengthens their approach for handling complaints and comments. Commercial banks have implemented an open-door policy and a technologically-driven customer feedback system, ensuring that its senior staff are easily accessible to clients. 

There is a 24/7 customer support help desk available. Commercial banks have supported their employees in creating a satisfying work environment by implementing an organisational structure that inspires and motivates them, both at the branch level and through virtual customer assistance. This includes using automated responses to address common client inquiries. This phase not only enhances job satisfaction but also fosters client happiness as a result of the prompt decision-making. Companies have come to recognise that their long-term growth and survival hinge on ensuring high levels of customer satisfaction (Nguli, 2016). 

Customer complaints and feedback management is a great means of gathering crucial market knowledge that companies should utilise to address the underlying issue and enhance their service or product (McCollough, Berry and Yadav, 2000). Ndulilo (2014) argued that complaints and their management are crucial concerns for service providers as they might potentially negatively impact customer satisfaction and loyalty. Studies have demonstrated that the manner in which a firm manages customer complaints can have a significant impact on its long-term commercial performance (Robert-Lombard, 2011). 

Frequently, customers of banks express dissatisfaction with the services they receive. According to Shammout and Haddad (2014), about 50% of consumer complaints regarding banking services are related to the process of opening, closing, or managing their accounts. An further 25% of complaints pertain to issues regarding deposits and withdrawals. Issues in this category encompass transaction holds and unauthorised transactions. Another notable area of complaints is the challenges arising from insufficient finances, which include fees for overdrawing accounts and cheques that are returned unpaid. According to Forbes (2013), approximately 11% of consumers experience frustration when sending or receiving payments, while 6% become exasperated when attempting to use their ATM or debit cards. Many banks rarely evaluate their customer complaint procedures to determine if they are properly addressing client issues. As a result, several banks adopt an indifferent attitude towards consumer complaints, particularly those connected to customer service, without realising the potential damage being done to the bank. 

Although organisations recognise the significance of handling complaints, the overall level of customer satisfaction following a failure has not shown any improvement (Michel, Bowen & Johnston, 2019). Organisations should actively promote and facilitate the expression of dissatisfaction by consumers, since this allows them to address and resolve the issue at hand, ultimately leading to client retention. Regrettably, organisations who fail to address the concerns of dissatisfied consumers are missing out on a crucial chance to regain and enhance their relationship. It is against this drop that this study will therefore carried out a survey in order to assess the effect of communication gap on customers' satisfaction in the banking sector of Nigeria.

1.2 Statement of the Problem

Efficient communication improves relationship, which is a banking industry employee  marketing strategy that prioritises customers'  retention, loyalty, satisfaction, and potentially lifelong customer relationships. Customer satisfaction is the primary determinant of an organization's success. According to Kotler and Keller (2016), if a customer is not properly attended to, it may result in discontent, leading to negative word of mouth. This, in turn, may cause customers to migrate to competitors' brands, resulting in a decrease in profit, customer turnover, patronage, and difficulties in retention. 

In order to achieve customer satisfaction, banks should prioritise customer focus, employee empowerment, process ownership, team building, and collaboration with customers. These factors contribute to improving the bank's reputation and image, as well as ensuring effective communication with valued customers (Cross, 2018). Furthermore, a major obstacle faced by the banking sector in Nigeria is the incapacity and failure to enhance the value of the services provided to its customers. This should be a continuous process as the customer's preferences and tendencies evolve over time. In the current banking environment, it has been challenging to ascertain the specific factors that define customer satisfaction (Chiedum, Okocha & Nwakaego, 2017). Moreover, the recent expansion of the banking sector in Nigeria has led to intermittent rivalry and the difficulties of acquiring and retaining esteemed customers, posing a significant burden for the industry. 

 In addition, the sector has faced issues such as elevated customer expectations, the integration of mobile technologies to streamline procedures, and the management of marketing and reputation. The issue of organisations lacking well defined communication objectives when it comes to establishing brand recognition and association can sometimes hinder the organization's efforts to cultivate client loyalty. Organisations often fail to retain client loyalty to their brand due to ineffective and unclear marketing communication objectives (Baldinger & Rubinson, 2016). The issue of inadequate message design inside a business can often have a substantial impact on customer retention. An organization's failure to develop their communication messaging effectively often results in a significant increase in customer defections. Regrettably, the majority of marketing communication messages are primarily crafted to generate or allure new customers rather than focusing on retaining existing ones. Organisations vary significantly in their selection of media and channels. Consequently, they must determine the optimal communication gap to successfully and efficiently reach their target market in the banking industry. Thus, it is in the light of these that the study seeks to assess the effect of communication gap on customers' satisfaction in the banking sector of Nigeria.

1.3  Objectives of the Study

The main purpose of this study is to assess the effect of communication gap on customers' satisfaction in the banking sector of Nigeria. Specifically, the study will;

1.Determine the effect of bank employees' communication skills on customer satisfaction.

2.Analyze the impact of communication gaps on customer satisfaction levels in the Nigerian banking sector.

3.Evaluate the communication barriers faced by customers and banks.

4.Proffer strategies for banks to improve their communication practices and enhance customer satisfaction.

1.4 Research Questions

The following questions have been prepared for the study:

What is the effect of bank employees' communication skills on customer satisfaction?

How do communication gaps impact customer satisfaction levels in the Nigerian banking sector?

What communication barriers are faced by customers and banks?

1.5  Research Hypotheses

H0: Communication gap has no significant effect on customer satisfaction in the banking sector of Nigeria.

Ha: Communication gap has a significant effect on customer satisfaction in the banking sector of Nigeria.

1.6  Significance of the Study

The findings of this study will provide the employees of the bank with information on more effective customer complaint procedures, which will enhance their ability to positively influence customer service and subsequently enhance their skills in managing client relationships. Implementing an improved complaint management system will additionally contribute to enhancing customer satisfaction. 

 Furthermore, it will help bank management to understand the effect of complaints and feedback management on customer satisfaction. This will help them in their policy formulation especially as it relates to handling customers complaints.It will also improve the services they receive from the banks through their complaints about service short-falls. Nevertheless, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the effect of communication gap on customers' satisfaction in the banking sector of Nigeria.

1.7 Scope of the study

The scope of this study is boarded on the effect of communication gap on customers' satisfaction in the banking sector of Nigeria. Empirically, the study will 

Geographically, the study will be delimited to employees in some selected banks in Lagos state.

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

1.9 Definition of Terms

Communication:the process of exchanging information, ideas, thoughts, feelings, and messages between individuals or groups through various means such as spoken or written words, signals, gestures, or behaviors.

Communication Gap: refers to a situation where there is a lack of understanding or miscommunication between parties.

Customers' Satisfaction: a measure of how products and services supplied by a company meet or surpass customer expectations. 

Banking Sector: comprises of financial institutions that accept deposits from the public, create credit, provide loans, and offer a variety of financial services, including wealth management, currency exchange, and safe deposit boxes.