Chapter 1
The Problem and Its Background
1.1 Introduction
It is now a widely held view that the world economy has entered a much more complex phase where individual national economies have become inextricably linked. In this new world economy, resources and markets have ceased to have the indelible national identity of the past. With the changes in businesses today, information technology (IT) plays a vital role in business survival. Information has become one of the main assets in information era. The efficient use of information is significant in determining the success of a certain organisation. Making awareness of information value and the ability to manage information organisation-wide will have great impact on organisation progress results. Since information is used in every feature of business and generated in every process, a centralized supervision function is needed to structure, combine and distribute it effectively and efficiently. Where the finance department monitors and manages the financial aspects of organisation and the legal department handles all legal affairs, the Information Organisation should manage this important business asset.
Actually, there are no businesses or a government agency that does not involve elements of risks. Also, there is no business venture or government that can function without management. Basically, this dissertation attempts to discuss the issues related to the role and importance of Technology in enhancing customer relationships in the Banking sector of Malta. Moreover, this paper presents the issues about management of technology in relation to the enhancement of customer relationship in banking industry. Actually, due to the fast changing and growth of technology, enhancements of relationship among consumer in different business sectors are becoming crucial. However, some argued that technology is a great tool in enhancing business relationship, but some also justified that mismanagement of the technology due to technical problems, communication problems, training and maintenance are becoming issues in banking sector (2001). According to (2001), the said failure may result into low productivity, loss of the IT inventory as well as loss of important and confidential data. In spite of these drawbacks, most of business sectors including the banking sector are still planning to implement again the said technology but there are now some considerations to the lesson learned from the past. With regards to the outcome of the study, the study focuses on the importance of technology in enhancing customer relationships in banking.
1.2 Background of the Study
Development of technology extended access to banking related services or facilities and also reduced errors and removed routine and time consuming processes. However, (2001:) states that “Whilst technology can save time and money and eliminate errors, thereby addressing certain issues associated with changing cultural and social trends, it can also minimize direct customer interaction and any associated service value to be gained.”
According to Smith (1987) technology was originally introduced by banks to reduce costs, however, it can also be targeted to enhance different functions. (1994:) stated that “Telephone banking facilities allow non-cash transactions to be carried out, which would have required a visit to the branch earlier.” Internet banking also allows customers to perform tasks when and where it is most convenient to them. In this respect, (1996:) suggests that direct contact with such technology also gives customers a feeling of greater control.
Good perceived quality occurs when expectations are met, as suggested by (2001) and (1993). Therefore, it is important that there is communication between branch staff and marketing staff so that advertising promises are met. High expectations that are not met create perceptions of a lower quality service (2001). However, according to (2000), if expectations are exceeded, long term customer loyalty and repurchase are likely to occur.
(1995) suggest that the difficulty comes in identifying individuals' motivating factors and harnessing them in the right way. No matter which service delivery channel is used, the service provider or service user relationship must be nurtured at all costs.
Customers' acceptability of IT enabled services is important. There are segments of customers who are simply not interested or ready to use technology (, 2001). While, adopters of technology-based services will tend to be convinced by ease of use and convenience ( 1989).
According to O'Donnell et al. (2002), both business banking and corporate customers place greater importance on personalized interaction than any technological interaction, rating it as either “very important” or “extremely important”. Similarly, (2001) suggest that the “old fashioned” human relationship between the bank manager and corporate customer is regarded as the natural and preferred way of doing business.
From the literature reviewed so far, it is evident that in such a competitive industry, relationships with customers have to be developed and maintained at all costs, irrespective of the service delivery channel.
1.3 Aims and Objectives of the Study
The aim of this research is to identify whether it is required to find a balance between use of technology and personal contact to service delivery and provide customers with some technological training instead of assuming that they will automatically accept and use the technology, to which extent the use of technology will enhance the service provided, and what are the customers' preferences of the different service delivery channels. This research will investigate the views of personal customers, business customers and bank staff in relation to the use of different banking technologies.
The customers are the reason why the Bank is in business, therefore, the business direction should be focused on satisfying and exceeding customers' needs and expectations. In this highly competitive industry, improved service quality and provision, with the appropriate balance between human input and technology, will enable Banks to retain customers and market share for longer.
It will be necessary to read more on methodology to understand more the research and analysis techniques. I will start working on the literature search. In the meantime, I will prepare and finalize the questionnaires so that these are sent to the respective respondents as soon as possible. The next step will be to sort, interpret and analyse the data and start drafting the dissertation.
1.4 Research Question and Sub-questions
The main question which this study will investigate is:
“To what extend does the use of Internet Banking enhance the service offering and what are the customers' preference between face-to-face and online delivery channels?”
Sub-questions:
1. What do different customers want and expect from the service delivery channel?
2. What are the customers' attitudes towards services offered online?
3. What are the perceived advantages and disadvantages of Internet Banking?
1.5 Significance of the Study
I, the researcher was presently a Bank employee within a technology-driven department. Our main contact with customers is over the telephone, via e-mail or through Internet banking. On many occasions our customers have complained that they miss that personal interaction which they used to get through their trusted relationship officer at the branch. On the other hand, the more sophisticated customers complain that the Bank has not yet adopted or fully adopted the appropriate technology to fulfill their banking exigencies, especially the younger generation, technical people and business customers which continuously use the Internet or deal with foreign banks or companies.
The banker's role is changing due to technological developments and changing needs and expectations of customers. Improved service quality and provision, with the appropriate balance between human input and technology, will enable Banks to retain customers and market share for longer.
In response to the current situation, this study will provide significant help in managing technology in bank with respect to customer relationships. This study is significant to the banking sector because it will explain how a customer relationship enhancement in banks can benefit from technology. Furthermore, it will be significant to banking sector because through this study, they will be able to analyse the perception of the customers on their customer service and thus would reflect if it’s time for them to change their approach in CRM or not. Finally, this study will be significant to future studies that will still focus on CRM with respect to technology in banks but on other areas. This study can stand as a literature that can guide future researchers in their studies.
1.6 Theoretical Framework
The theoretical framework that will be used in the study is the Input-Process-Output Model. In the IPO model, a process is viewed as a series of boxes (processing elements) connected by inputs and outputs. Information or material objects flow through a series of tasks or activities based on a set of rules or decision points ( 1997). Flow charts and process diagrams are often used to represent the process ( 1997). What goes in is the input; what causes the change is the process; what comes out is the output. ( 2001) Figure 1.1 illustrates the basic IPO model:
Figure 1.1
Input – Process – Output Model
The IPO model will provide the general structure and guide for the direction of the study. Substituting the variables of this study on the IPO model, the researcher came up with the following:
Figure 1.2
Conceptual Framework
INPUT PROCESS OUTPUT
1.7 Resources/Constraints
This study will discuss the importance of establishment of the technology in enhancing customer relationship to banking industries. The discussion shall outline the different factors affecting the success or failure of the established bank industry. It will also include cultural variables such as culture and the nature of the economy of Malta as factors affecting the persistence of banking industry.
The study intends to investigate the effects technology to CRM of banking sector in Malta. For this study, primary research and secondary research will be used. Primary research will be conducted using anonymous questionnaires that will be sent to randomly selected customers of a banking sector. The questionnaires will be used to collect quantitative data. The data will be analyzed and compiled for the correlation of the hypothesis. The data will then be presented by means of graphical representations and illustration and the difference would be highlighted. On the other hand, secondary data/resources pertaining to the current status of the performance of the banks
1.8 Chapter Assessment
This study has a broad range of topics regarding technological involvement with respect to the CRM practices of banks in Malta. Although the focus is on the perception of the respondents, other considerations such as the needs of the respondents, effect of the services provided to the customers, and other general information about satisfaction and atmosphere effect to the business are discussed. The outcome of this study is limited only to the data gathered from books and journals about technology, CRM, business setting, customer satisfaction, and quality service and from the primary data gathered from the result of the questionnaire survey and interview conducted by the researcher.
As the research was completed in a limited period of time other factors and variables are not considered. This might have an impact on the results of the study.
Chapter 2
Review of Related Literature
2.1 Overview
We cannot deny that the advancement of technology was a necessity of the current era. Businesses need to adopt and embrace new technologies to provide excellent business operation and services to their clients. The bank industry is not an exception with regards to this adaptation. With the emergence of computers and internet, communication between businesses and clients are becoming faster than before. With this regard, this part of the study, the sources will be based on the information gathered from other studies, journal articles, and books which is related to customer relationship management and information technology among banks. The information gathered will help the researcher in assessing the information gathered from primary sources and therefore will be correlated to each other regarding their conclusions. At the same time, such information from the literatures can also serve as guides for the discussions and the formulation of the conclusions.
2.2 The Role of Technology
The world is fast entering the Information Age. Transactions and information may be packaged through data. There is a disintegration of the concrete to give way to what is abstract and digital. The digital and information for that matter are equally shaping and determining the contemporary world. The business risk for a certain organisation engaged in technologically dependent business is normally greater than for one that is not. For example in banking business, business operations present a unique set of risks, including an increased reliance on technology and increased vulnerability to the rapid changes in technology. In addition, industry structures can erode rapidly because of competitions, business security issues and transforms core business structures to promote distribution by mail and remote customer service. To address such challenges, an organisation needs to develop an effective strategy. An effective strategy requires operational efficiency; within organization's information systems, this means an emphasis on information security and controls. A cost-effective business internal control system should be designed and implemented toward the goal of reduced operating expenses and therefore increased profits. Reducing operating expenses and increasing profits are critical to the success, even the continued survival, of companies heavily engaged in business.
Apparently, (1989) stated that computers and other technologies have found their way into all areas of business, industry, banking, education and government. Increasingly far-reaching information networks linking computers and databases provide important benefits, including greater staff productivity and a sharper competitive edge. The more that we expand the reach of our information networks, the more important network security becomes.
2.2.1 The Importance of Technology to Organisations
Technology has been one of the most influential factors for the expansion of an organisation as well as the living conditions of the members due to their involvement with these organisation that have use of this technology particularly to those engaged in business transactions. Because of this, the influence of technology can now be seen in several areas, which includes the living conditions that the members have chosen. In accordance to this development of progress of technology, information technology tends to become vital in business progress. With the productivity of a person as well as the importance that an organisation can give to their own information technology, it may be deduced that a person who is in charge of that area must also be able to access those information. If an organisation has a great need for the data that can be obtained through information technology, then a person may be judged based on his or her productivity and the contributions that s/he is able to give to the organisation let say in banking sector, thus the need of effective technology should be considered. In connection to this, 2002) stated that bank services may be either the result of these changes while also may be a contributing factor, as it can also affect the productivity of the organisation, which may require the information that can be gathered around the clock and from all areas around the world.
However, it must also be remembered that when discussing bank services and the role that computers and information technology plays to heighten their advantage, other issues must also be taken into consideration, which includes the spatial relations that these may have to the locals, the domestic needs that must also be considered alongside with the need for information obtainment, the characters and backgrounds of the people who are to obtain these, as well as the influence that these may have to the residents. In a study that focused on the effects of information technology to the distribution of the residential area, Gordon and Richardson (1997) have pointed out that communication has become a great factor for the living area. It was also discussed that with the greater focus on the communication-building and the improvement of the time with regards to communication-exchange, then it has come to affect the way people have managed to observe their actions as well as the consideration for other people. Moreover, it was also pointed out that with the time for communication being cut, there is also the possibility that people may demand that transportation itself become quicker, mostly because of the acceptance for the quicker communication time, and therefore may also be concentrated on transporting. It is stated that dispersion of the people may be the result of the growing population within the area, and with information technology there is the lessening need for the people who are communicating to be within geographical areas, thus freeing them to interact with others. Dispersion of the nature of the citizens is thus shown through the differences in their background, characteristics, and focus.
In addition, information technology has a great effect on the chosen area especially with the social implications of the people is echoed in the study Kim and(2002) that focused on the effects of information technology in a particular area, namely Chicago. The finding of their study, however, was contrary to the suggestions of the previous study that stated information may yield to dispersion; instead, it pointed out through evidence that it may yield centralization, especially for the users. This is because, as it was discussed, that in order to be able to provide the needed technology for information-exchange, there is also the need to centralize the space and be able to ensure that the people within the living quarters are able to receive the necessary resources that are needed from them to be able to gather the information that they need. Infrastructure plays a very important part in the needs that must be considered especially for the people who are to use these methods. It was also pointed out, however, that the finding may not simply regard geographical implications, rather with regards to the groups that are being formed and the knowledge spillage that comes from one group and into the other. Interaction and knowledge requires that the people at least have some connection with those whose information are being shared, and thus there is also the possibility of hierarchy being formed with the knowledge being passed on to those who may be of need. Moreover, it was found that it is the lower-ranked area of the city (e.g. those who belonged to a lower social class) may be more dependent in the intellectual spill-over from those who have the knowledge and does not rely on the geographical proximity of the information; meanwhile, those who are in the high-ranked area of the city are the opposite, as they give high regard for the geographical proximity of those from which the information is being given to. It is interesting – and a little disconcerting – that social class continues to play a significant part in the decision of the people with regards to the exchange of information, and thus means that such division continues to exist.
In accordance to this, L (2000) have also realized that computers have had a great impact in the decision of the people with regards to their living condition; digital communication is not anymore limited to the confines of business dealings but also includes the simple information that families may wish to retrieve in the comfort of their homes. It was acknowledged that members of teams that conduct their business may be required to work on their projects despite the time limitation in order to keep up with the continued demands that are being required of them not only by their company itself but also with the fast-paced world market. Efficiency and improvement are some of the emphasized needs of the job, thus it also requires that the workers be able gather and provide their information despite geographical boundaries. In order to give them their needs, Hong Kong, one of the busiest regions in the world when it comes to world market, has catered to the needs of the workers for them to continue to keep up to date with the findings and also be able to give their needed findings. The findings of the study shows that housing types in Hong Kong has also catered to the need for speed decision-making among contracting parties. There is the acknowledged necessity for clients, consultants, and contractors to exchange data at the fastest rate possible, and as such must also be given. Engineering then has come up with several changes over the years in order to provide the needs of the workers and their clients. Strategies with regard to the designs of the housing structure have also been improved to simultaneously cater the physical, social, economical, and technological need of the people. Standardization, however, has become a popular notion for the building owners in an effort to produce cheaper housing units that may continue to provide the people with their needs while at the same time cost less and have less time to be configured.
2.2.2 Security Issues in Technology
Microcomputers and networks have become the foundation of business life (2004). With the emergence of technological advancements in data transmission among businesses, particularly in banking sectors, the installation of a security system has become a requirement. The network operating system (NOS) is typically the first layer of security in controlling user access from a logical security perspective, especially in a distributed system. The NOS controls the user identification, authentication, authorization, and many security and permissions settings for all users and resources on the network. In user identification, the user tells the NOS who he or she is. The NOS authenticates the user by mapping user-supplied credentials, such as user IDs and passwords, to a centralized user store of networked systems. The NOS then authorizes the user to perform various functions (such as read data, change data, delete data, or execute programs) based on stored user and group settings established by the network administrator.
Although individual application-level security usually controls what functions a user can perform within applications, poorly designed or ineffective NOS controls may allow data to be manipulated outside the applications, thereby violating the confidentiality, integrity, and availability of the underlying information (2001) However, failure to consider NOS security controls may lead to unfounded reliance on the application, reconciliation, and monitoring controls. The general computer controls review should include ah assessment of the controls surrounding the NOS. Such testing would examine applicable service packs and security updates installed, system configurations, and network connections.
Moreover, unauthorized access to data is a major risk faced by enterprises. News groups, discussion forums, and best-selling books such as Hacking Exposed ( 2001) have made it relatively easy to gain unauthorized access to corporate information resources. Therefore it is imperative for organizations to keep abreast of patches, updates, and proper system settings. To ensure adequate controls at every level of the information technology infrastructure, public accounting firms and corporate internal audit divisions are increasingly hiring information technology specialists.
In this light, organizations could safeguard their data and decrease the possibility of losses and distortions during transmission by several measures. An organization could use network-monitoring software. Such software monitors the data flow and detects weak points--hardware configurations or software arrangements that are likely to cause transmission errors. Organizations could also upgrade to conditioned telecommunication lines. Because such lines are cleaner in producing less static and other encumbrances in transmission rates that can be boosted without errors, resulting in lower transmission costs. Fiber optic lines offer the most advantages in data efficiency and security; they are capable of carrying enormous volumes of data at high speeds with little or no distortion, and they are almost impossible to tap. Fiber optic lines, however, are not yet widely available. Similarly, the application of protocol controls is also required. In a typical situation, software monitors the transmission reliability by directing the receiving and sending software to acknowledge the transmission link, then agree on a transmission protocol and finally verify the accuracy of the data transmitted. Likewise, the enforcement of backup and recovery procedures is essential. No network is fail-safe. As a network design becomes more sophisticated, the probability increases that at least some part of it will fail. Backup and recovery procedures provide contingency planning for network downtime and include securing alternate network facilities, planning for alternate means of data transmission and eliminating confusion over what data were preserved in instances of transmission interruption. More importantly, the use of network access controls is deemed necessary. Determined hackers can break into almost every computer network. Any organization without access controls--passwords--is inviting trouble. Depending on the organization, passwords should be assigned to every user at various levels of the operation. In some cases, this may even mean assigning selective access to specific computer files (2001).
2.4 The Internet in Organizations
The Internet is a worldwide system of interconnected networks; it is the transport vehicle for the information stored in files or documents on another computer; it can be compared to an international communications utility servicing computers, and the Internet itself does not contain information (2001). The concept of the Internet began in the early 1970s, when applications running under different network protocols needed to communicate with one another (, 2001). A protocol is a set of conventions that communicating entities use to structure their information exchanges ( 2002). Computers connected to the Internet use protocols from a large collection of such protocols called the Transmission Control Protocol/Internet Protocol (TCP/IP) suite (, 2002).
There are currently three major divisions of the Internet--commercial, governmental, and educational—which appear in a full network host name as (2002). On the other hand, the incorporates all of the Internet services above and much more ( 2002). One can retrieve documents, view images, animation, and video, listen to sound files, speak and hear voice, and view programs that run on practically any software in the world, providing that the computer has the hardware and software to do these things (2002).
In the paper o(2002), it is believed that internet significantly affected the behavior of an individual. Moreover, (2001) show that customers’ attitudes towards using a website together with the perceived usefulness of the website information are the best indicators for predicting customers’ purchasing behavior.
According to the most frequently used definition offered by(2000), attitudes are a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. Although an attitude is a complex construct, in simple terms it represents the kind of things people like or dislike ( 2000). Attitudes towards purchase behavior are believed to be shaped by many factors such as direct experience with the product, information acquired from others, exposure to mass media etc (2001).
With this respect and to the development in banking industry, (1998), justified that there are no statistically significant differences between the propensity of males and females to use the Internet to gather information. However, (2000) argues that gender, along with education, income, race, and occupation all influence the use of Internet. Socio-demographic indicators such as education and income are significant factors for distinguishing Internet users and non-users (, 2000). In addition, (2001) argues that access to the Internet tends to be linked to affluent, educated, young and upscale individuals.
As seen in the study of different researchers (, 2000 and 2001), the Internet is already a place in itself, a platform wherein business organisations can directly market their products and services to customers and even to other businesses. The Internet paved the way to achieve easier, faster and better communications between customers and businesses (2002) which possibly create significant development and advancement of banking industry in Malta. The removal of barriers of geography, time zones and location may helped to prove that the Internet is a great facility for communication that enables companies to maximize customer relation management.
This puts the emphasis of the Internet facilitating new distribution channels for players to exchange goods and services. The Internet as a distribution channel aids in the emerging business platforms since the advent of the information age. These platforms are the business-to-consumers (B2C) and business-to-business (B2B) which in turn have created virtual consumer-centric markets and virtual business-centric markets (Eckersley, Harris & Jackson, 2003). The distribution space has sought to improve the direct marketing techniques which have considerably reduced middlemen in said business transactions.
2.4 Customer Relationship Management (CRM) in Banking
At present, bank industries are becoming more and more customer-oriented as customer demands and trends undergo multiple changes. A good business relationship between the business and its customers is now very much essential. In order to cope with this business challenge, industries are employing various mechanisms and strategies, primarily through the use of technology, particularly information technology. This integrated process is also termed as customer relationship management (CRM).
According to Boosting Consumer Satisfaction (2002, August), CRM is concentrated on the use of information technology so as to aid the organisation to stay abreast of its customers’ needs and concerns. Customer Relationship Management also helps the organisation to respond in time and appropriately to their customers’ concerns. Basically, in the present era, CRM in the banking industry needs to be integrated into a business’ operation by means of customised software or computer programs. Though several views have been used to define CRM, the rationale for its use remains the same, and that is the application of strategies to improve or enhance customer relations.
CRM requires that an organisation view customer relationships as means to learn about customers' needs and wants and how best to create, satisfy and sustain them while concomitantly helping the organisation to meet its objectives. In this manner, the financial institution is using all its resources to find other organisation that will help enhance the services that they are giving to their customer to be able to build an intimate customer relationship (1991).
On the other hand, customer relationship management has emerged as a strategy used to learn more about customers’ needs and behaviours in order to develop stronger relationships with them. It works on the fundamental tenet that the customers are at the heart business success. In general, the firm needs to value its customers based on the total value of their relationship with the company, the potential value of their relationship, the profitability of their relationship, the insights they can provide the organisation, and the influence that they wield over other customers. Through these, the organisation can have an effective customer relationship management without using any technological database or software ( 1990).
In brief, Customer relationship management not only in banking industry is a business strategy that attempts to ensure every customer interaction that is appropriate and consistent regardless of the communication channel and that CRM is a core business strategy for managing and optimising customer interactions across the public or private’s institutions’ traditional and electronic interfaces. CRM can be used to gain clearer insight and more intimate understanding of customers' behaviours and in helping to build an effective competitive advantage and its relationship to the e-business process ( 1997) and that committed customers can be viewed as company assets who are likely to be a source of favourable referrals and are more resistant to competitors' offers (1997).
2.4.1 Consumer Loyalty and Satisfaction
A better appreciation of the underlying forces that influence the loyalty of customers--particularly their attitudes and changing needs—helps the banking organisations develop targeted efforts to improve their services. Differentiating and measuring degrees of loyalty is an evolving craft. In the paper of (1994), there are several business organisations tried to measure and manage the customers' satisfaction, on the theory that increasing it would help them prosper. They also began to measure their customers' rates of defection and to investigate its root causes ( 1994). By measuring the value of the customers themselves, some organisations also identified high-value ones and became better at preventing them from defecting. These ideas are still important, but they are not enough.
Apparently, service delivery is an interactive and dynamic process, that from the consumer's point of view is much more than a passive exchange of money for a particular service. Characteristics of services often require customers to be actively involved in helping to create the service value -- either by serving themselves or by cooperating and often working collaboratively with service personnel (, 1998). In high-contact systems customers can influence the time of demand, the exact nature of the service, and the quality of service (1992). If consumers somehow become better customers -- that is, more knowledgeable, participative, or productive -- the quality of the service experience will likely be enhanced for the customer and the organisation ( 2006).
Bank Organisations that capitalise on customers' active participation in organisational activities can gain competitive advantage through greater services, enhanced operating efficiencies, positive word-of-mouth publicity, reduced marketing expenses, and enhanced customer loyalty (2006). Customers who actively participate in organisational activities can directly increase their personal satisfaction and perceptions of service quality ( 2006).
In today’s business world, the value and importance of customers is not something that should be set aside by companies. Business plans and strategies would be incomplete without paying much consideration to the customers. Customers will and should always be a part of the agenda in any business plan of any business organisations. Because of the implications for profitability and growth, customer retention is potentially one of the most powerful weapons that business organisations can employ in their fight to gain a strategic advantage and survive in today's ever increasing competitive environment (2005).
Nowadays, business organisations’ concern does not only evolve around managing finances and operations. Business organisation particularly in banking sector have realised the importance of managing reputation risk. Bank image and reputation are considered as intangible assets which are as equally important as tangible assets. These assets are founded on the banks’ relations with their customers. Integrity, transparency, and accountability are important elements in this foundation. Hence, it is important for business organisations to be able to secure this relationship by being able to keep the degree of these three elements high (2004).
Actually, customer satisfaction refers to the consumer’s positive subjective evaluation of the outcomes and experiences associated with using or consuming the product or service. Satisfaction occurs when the product has been able to meet or exceed the conceived expectations that the customer has ( 2006). Furthermore, customer satisfaction may also be considered as the measure of the high degree of quality of the product ( 2001).
Consumer satisfaction may be considered as the measure of quality of a particular product ( 2006). However, it should not be limited to the traditional concept of quality. In its traditional concept, manufacturers view quality as inherent in the product or service. Once a product or service has been delivered or sold, its quality is believed to have been established (2001). However, (2001) argued that a product’s quality still has some other dimensions that are under the manufacturer’s control. These dimensions may still be modified and enhanced even after delivery.
2.5 Chapter Assessment
With regards to the development of information technology and its progress, customer relationship issues must be carefully reviewed. In engaging with customer relationship management and the use of information technology, (2003)has cautioned against the possible problems that may be met by the business organisations, and that with the direction of businesses in the field in this era, total reliance on information technology may prove to be a weakness in these areas; centralization of the abilities and the departments of the providers may prove to be problematic and may provide countless of predicaments especially in a possible event of a breakdown of these methods. Such an event may render the bank industry into a catatonic state and provide problems to the companies, halting their businesses operations. Other problems such as this dependence must be addressed by the user in the occasion that these problems might occur; addressing these problems may also ensure the safety of their future.
The recent flow of information would definitely make business transactions easy for every individual who desires to do so. In addition, it sustains the need for systems capable of storing and handling this information. The growing impact of information and communications technology fits in with the larger transformation towards a knowledge-based society. Most professional environments are already being adapted to technology. Being able to handle e-mail and databases is necessary in the professional world. Apparently, the new vision of business as well as the developments mentioned cannot be isolated from the organisation as a whole. Basically, the source of an appropriate model of IT systems must lie with the potential to foster skills that are transferable to new situations and thereby relevant to us all in the society in which people live.
Chapter 3
Methodology
This chapter discussed the method and procedures of research used, the respondents of the study, the sampling technique, the instrument used, validation of the instrument, administration of the instrument and ethical consideration. Actually, this study aimed to evaluate the importance of technology in enhancing customer relationship in naming. Assessment on the components that make up customer relationship was also investigated, thus forming clearer conclusions on the possible actions concerning the relationship of technology and relationship with customers.
3.1 Methods of Research
The research described in this document is based on qualitative and quantitative method. The qualitative method permits a flexible and iterative approach, while the quantitative research method permits specification of dependent and independent variables and allows for longitudinal measures of subsequent performance of the research subject. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This allows investigation of important new issues and questions as they arise, and allows the investigators to drop unproductive areas of research from the original research plan.
This study used the descriptive approach. This descriptive type of research utilized the observations in the study. To illustrate the descriptive type of research, Creswell (1994) guided the researcher when he stated: “Descriptive method of research is to gather information about the present existing condition. The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena.”
The value of qualitative research can best be understood by examining its characteristics. One of the primary advantages of qualitative research is that it is more open to the adjusting and refining of research ideas as an inquiry proceeds. Also, the researcher does not attempt to manipulate the research setting, as in an experimental study, but rather seeks to understand naturally occurring phenomena in their naturally occurring states. Inductive reasoning, as opposed to deductive reasoning, is common in qualitative research, along with content or holistic analysis in place of statistical analysis ( 2002).
On the other hand, quantitative method is compatible with the study because it allows the research problem to be conducted in a very specific and set terms (1992). Besides, quantitative research plainly and distinctively specifies both the independent and the dependent variables under investigation (, 2002). It also follows resolutely the original set of research goals, arriving at more objective conclusions, testing hypothesis, determining the issues of causality and eliminates or minimises subjectivity of judgment ( 1996). Furthermore, this method allows for longitudinal measures of subsequent performance of research subjects ( 2002). Finally, it provides achieving high levels of reliability of gathered data due to i.e. controlled observations, laboratory experiments, mass surveys, or other form of research manipulations ( 1970). This study was based on surveys and statistical treatments, so basically the quantitative approach fits well with it.
3.2 Sampling Design
Random sampling is the sampling design of this study; it is the most appropriate design to use in this study since the researcher decided the sample size of the study i.e. 100 bank customers and a sample of 10 clerical and 10 managerial in the business services, and 10 clerical and 10 managerial in the private services will be chosen. This design is popular in the field of opinion research because it is done by merely looking for individuals with the requisite characteristics. Actually, the convenience of the bank to do research contributes to the eagerness of the researcher to investigate the satisfaction of its customers. To be realistic, the researcher was thinking about to pick up a local company for research which is easier to get the access/permission. Then the bank in which the researcher is working came out into the picture since it is the only one in which the researcher was familiar with. As stated, random sampling was the design of the study but the researcher was recording some classification group such as gender, age group, level of satisfaction.
3.3 Respondents of the Study
In this study, primary research and secondary research was used. Primary research was conducted using questionnaire surveys to 100 customers and a sample of 10 clerical and 10 managerial in the business services, and 10 clerical and 10 managerial in the private services. The researcher tallied, scored and tabulated all the responses in the provided survey questions. A major aim of the survey is to know the perception of the respondents regarding the importance of technology in enhancing customer relationships in Banking and other issues. The researcher conducted the survey personally with the respondents.
3.4 Instrumentation
To assess the problem at hand, the researcher prepared a questionnaire and a set of guide questions for the interview that is asked to the intended respondents. It was indicated that this will be answered with no more than 10 minutes of the respondents’ time. Furthermore, the answers was completely anonymous and confidential and if there were any particular questions the respondents do not want to answer, it was a standard that they should inform the researcher. Information or opinions will be sought from personal customers, business customers and bank employees through the use of questionnaires. The aim is to obtain data from both the service user and the service provider.
2 samples for both personal and business customers between the ages of 20 & 35 and 35 & 60 will be chosen. Both samples will then be divided equally by gender. A total of 100 questionnaires will be sent by post.
Questions will be focused on the type of transactions usually made, use of IT-based services, reasons for usage/non-usage, frequency of usage, which services are they satisfied or dissatisfied of and why, overall satisfaction of the services, extent of their awareness of new service developments, likelihood to recommend the services to others and overall relationship with the Bank.
Questionnaires to bank employees both in the business and personal services will be sent through the Bank's internal mail or via email. A sample of 10 clerical and 10 managerial in the business services, and 10 clerical and 10 managerial in the private services will be chosen.
Questionnaires will concentrate on testing whether new practices were taking customers away from the branches and type of customer feedback received on IT-based services. Ideas will be sought as to how technology could be used to enhance the Bank-customer relationships, how customers may be helped to use technology more effectively and how confident they feel in stimulating such developments.
A covering letter will accompany each questionnaire with a prepaid return envelope. This letter will provide an introduction of myself and explain the purpose of the study, provide my contact address, e-mail address and numbers, assure respondents of the confidentiality of their replies, provide the date by when a reply is required and finally, thank all respondents and invite further comments, suggestions and questions.
Further research will be carried out through consultation of books, journals and magazines. Secondary data may complement primary data collected, may confirm, modify or contradict my findings and allow to focus attention on analysis and interpretation, as suggested by (2001). Secondary data will support primary data collection to show a clearer picture of the technology's effect on the customer, banker and relationship between them.
Moreover, the distribution and collation methods that were used to manage the process ensure anonymity. The opening line was explained to them what the research is all about and how the researcher intends to regard the survey with high confidentiality. The results of questionnaire survey were presented in the tabular form with a few graphical representations. The questionnaire was shown at the appendix.
3.5 Validation of the Instrument
For validation purposes, the researcher initially submitted a sample of the set of survey questionnaires and after approval; the survey is conducted to five respondents. After the questions are answered, the researcher asked the respondents for any suggestions or any necessary corrections to ensure further improvement and validity of the instrument. The researcher again examined the content of the interview questions to find out the reliability of the instrument. The researcher excluded irrelevant questions and changed words that would be deemed difficult by the respondents, to much simpler terms.
3.6 Ethical Consideration
The data generated was used solely to understand the development of the research topic. The researcher is solely responsible for conducting the whole research process and abides all the policies regarding the organization as well as the university. The data is not transferable for any means in person or organization. The research was done according to the guidelines and rules and regulations of the university. The researcher does not belong to any professional bodies to share the outcome of the research results. The four stages of ethics in doing research are followed by the way of a good design, modes of data collection, analysis of data and for proper dissemination. Both confidentiality and anonymity was maintained of the informants who have participated or shared information in the research. There is no coercion or force to take advantage from the informants. Full voluntary guarantee was taken from the informants. Due consideration and approval was taken from the organization which is being studied. Prior objectives and motive of the research was intimated. There is no misrepresentation or misuse of the data collected from the organization. Strict confidentiality was maintained. Finally, the University for Dissemination of academic purposes might take the data collected.
3.6.1 Potential practical and empirical obstacles
The main consideration is the library facilities. The e-library of the University of Leicester is useful, however, to benefit for more relevant books, journals and literature searching, I have applied to access the library of the University of Malta. The use of the library is for reading purposes only, therefore, research can only be carried out inside the library. It will be necessary to visit the library during the week after work or on Saturdays. It may be necessary to follow up on the questionnaires and this may take more time than expected. There is potential time constraint that may affect the progress of the work. In order to minimise this risk, collection of data will start immediately in order to cope with the schedule.
3.6.2 Conceptual and theoretical problems and difficulties
“While interacting with respondents, they might not be aware of the terminology or detail of the topic of research, and they might be reluctant to ask.” ( 2002)
Respondents may have little motivation to reply or may be irritated or uncomfortable by the whole process. The language used in questionnaires will be as simple as possible so that willingness of respondents to provide correct answers to the questionnaires will not be affected.
From my 12 years of banking experience I understand and believe that improvement in technology in services offered by the Bank was necessary due to the fast increasing competitive sector and the changing needs and expectations of customers. I also believe that certain customers may need some technological training instead of the Bank assuming that they will automatically accept and use the technology. However, I'm confident that I can approach the project with an open mind and be careful not to allow my opinion/views to influence my judgement when analysing and interpreting the research results.
3.6.3 Ethics
According to and (2002), “there is the danger that business research, if not aware of ethical issues, might lose respect and credibility.”
Zikmund (2000) state that “the results should be presented in a way that they do not cause embarrassment, disadvantage or harm to any of the participants.”
Also, “Any misinterpretation of data will lead to misleading results and is ethically wrong.” (2002). I will assure respondents of the anonymity and confidentiality of this research. No names will be mentioned in the dissertation and also will do my utmost to ensure that their identities are not inadvertently revealed.
3.6.4 Position as regards to the political field
Collecting accurate data for analysis is very important. Respondents' feedback will be kept confidential and most importantly will not be divulged to the organisation/superiors.
Access to customer data required for the questionnaires will be requested from Management. Fortunately, most of the research can be done through secondary data.
Therefore, political reflection is not worrying.
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