Factors influencing customer satisfaction with Kenya commercial bank agency banking in Bungoma county

Abstract

KCB Agency banking is a recent model that hopes to enhance access to financial services by allowing small-scale business operators to be engaged in banking services as satellites. This was largely as a result of pressure experienced by KCB banks to reduce operational costs and congestion experienced in its banking halls. The purpose of the study was to assess the Factors Influencing Customer Satisfaction with Kenya Commercial Bank Agency Banking in Bungoma County. In particular, the specific objectives were to establish the extent at which customer education of agency banking influences customer satisfaction, determine how service quality influences customer satisfaction, examine how agent float influences customer satisfaction and ascertain how agency banking accessibility influences customer satisfaction. The target population comprised of 120 KCB agents and approximately 1,320 customers. A sample size of 24 agents and 240 customers was chosen using cluster sampling. The Theory of Disconfirmation was adopted as postulated by Szymanski and Henard. Questionnaires and interview schedules were used as data collection instruments. Data was descriptively, summarized and presented in tables and frequencies and percentages using SPSS. Findings revealed that on objective of Customer level of education and awareness and customer satisfaction; half, (50.0%) respondents indicated to some extent that customers were aware of the existence of KCB agency banking. The overall diffusion and adoption of KCB Agency banking was 47.6% hence agency banking is clearly an innovation that requires time to reach critical mass. Concerning the objective of Service quality and customer satisfaction; 40.9% of respondents agreed that agents’ transaction methods and systems operation time influenced customer satisfaction and KCB agency banking has not effectively embraced the use of technology where 65.6% disagreed. The probability of reliability in system and its availability was half (50.0%). On objective of Agent float and customer satisfaction; 71.7% of the respondents unanimously agreed that transaction limits depend on availability of float which has a bearing on customer satisfaction. 43.4% of the respondents disagreed on the reliability of agents float hence they were not motivated enough to transact with the KCB agents and 58.7% of the respondents cited that there was no uniformity of deposits and withdrawals. KCB Agents handle customers Complaint resolution professionally by 51.0% responses. With objective of Agency banking accessibility and customer satisfaction; 54.5% cited that the agents’ outlets were accessible. The distance between the agents outlets and bank branch to customers had a little bearing or insignificant on satisfaction of the customers and an equal proportion of the respondents agreed and disagreed at 30.3% responses that they preferred doing transactions with KCB Agents than the Bank branch and 70.7% of the respondents strongly agreed that KCB Agency banking hours were adequate for the customers. The study recommends that increased marketing will significantly improve the awareness and education level on the entire process of diffusion and adoption of the agency banking. Service quality has a significant bearing on customer satisfaction and KCB bank should effectively embrace the use of Information and Communication Technology in agency banking and also ensure that their banks agents have enough float and cash to serve their customers.