The Effect of Agency Banking Services on Customer Satisfaction: In the case of Commercial Bank of Ethiopia

Abstract

The main objective of the study was to determine the effects of agency banking on customer satisfaction in Commercial bank of Ethiopia. Players in the financial institution sector find the study useful as they can use the findings to strategize on how they can mutually benefit from this development as opposed to being competitors of the same market segment. The researcher adopted descriptive research approach and qualitative research method to conduct the research. The study was carried out in Commercial bank of Ethiopia in Addis Ababa. The population of study consisted of the agency banking customers of agents offering agency banking in CBE. The study used a sample of 384 agency bank customers. Primary data was collected for this study by use of questionnaires. Validation was done through careful examination of the content after a pilot study. The researcher ensured that all objectives were adequately covered by cross checking the objectives and corresponding items. Data was analyzed using quantitative methods. The study used both explanatory, correlation and multiple regression analysis. The study concluded that all variables except service value i.e. service convenience, service quality and agent quality have positive effect on customer satisfaction. Furthermore, the correlation result showed that service quality has a strong and positive correlation with customer satisfaction followed by Convenience. Service value and Agent quality have a moderate correlation with customer satisfaction. Based on the above findings, the study therefore recommends there was need for agents to additionally invest in the service equipment and improve the visual appearance of the points of service and the bank should improve agents convenience parameters to keep the satisfaction level of customers by ensuring that customers to get the service near to their residence. Further, the agents should also improve the speed of service delivery and resolve transaction problems quickly, and without the need for customers to travel back to the points of service. Further, the agents must continually improve service delivery by reducing the time customers wait to be served, by improving professionalism, sense of belongingness, attractiveness and eliminating errors in financial transactions through adequate controls to keep the satisfaction level.