DIGITAL BANKING TECHNOLOGIES AND CUSTOMER SATISFACTION IN NIGERIA’S DEPOSIT MONEY BANKS (DMBS): EVIDENCE FROM PANEL DATA ANALYSIS

Abstract

Customer satisfaction and loyalty have emerged as critical drivers of success in the highly competitive banking sector. However, the dynamic nature of customer preferences, rivalry from fintech companies and other non-traditional financial service, poor customer experiences and unresolved customers' complaints have heightened the challenges commercial banks face in retaining customers and ensuring their satisfaction. Therefore, this study investigates the effect of digital banking technologies on customer satisfaction in Nigeria’s deposit money banks (DMBs). The study adopted ex-post facto research design. The population of the study consisted of 26 commercial banks in Nigeria, while 7 biggest banks in terms of customer base and customer complaints disclosure were purposively selected as the study's sample. The study employed secondary data sourced from annual reports of sampled banks between 2015 and 2023. The study employed pooled ordinary least square (POLS) regression method for the analysis. The results showed that: internet banking with (β = 0.591; p-value = 0.014) and POS banking with (β = 1.069; p-value = 0.015) have significant positive effect on customer satisfaction and loyalty; mobile banking with (β = -1.093; p-value = 0.028) has significant negative effect on customer satisfaction and loyalty; and ATM with (β = -1.816; p-value = 0.118) has insignificant negative effect on customer satisfaction and loyalty. The study concluded that internet banking, mobile banking and POS banking are major determinants of customer satisfaction in Nigeria. Therefore, the study recommended that commercial bank managers should improve mobile banking reliability, ensure regular maintenance of ATM to minimize cash shortages, and create easy channels for customers to provide feedback on digital services.