BDO is the country's largest bank as of September 30, 2012 in terms of total resources, capital, customer loans, total deposits and assets under management (BDO Website Profile). As of first quarter of 2013, BDO financial stability institution still led in most areas measuring the bank competitiveness based industry rankings. In terms of percentage growths: Assets Market Share increased by 16%, Net Loans and Receivables 19%, Deposits 17% and Total Capital Accounts 77% (Consolidated Published Statement Corporate Governance 1st Quarter of 2013). International publication has named BDO Capital and Investment Corp. (BDO Capital) the best domestic investment bank in the Philippines in the recently concluded The Asset Triple A Country Awards 2012 Southeast Asia (FOREIGN publication The Asset). BDO was also named as Best Trade Finance Banks 2013 (NEW YORK, December 19, 2012 ' Global Finance magazine).
However, despite prestige awards and leading financial rankings, BDO has not been competitive lacks when it comes customer service . To date, it has not yet received any recognition of being the best when it comes to the category of customer quality service in customer financial transaction services. Based on a 2001 poll of 300 bank clients in Metro Manila conducted by New York-based Audits and Surveys Worldwide (ASW) for Business World year, a huge percentage of bank clients unsatisfied about the services from banks were in the area of personalized service, accessibility and technology. Also, sought after were convenience of customer and accessibility of payment transactions strong branch presence nationwide, and a large network of automated teller machines. In this aspect of E-banking, BDO has still to play catch up : until now the leading financial in Philippine commercial banks ranking industry is BPI having (2176) automated machines and Metro Bank (831) Operating branches nationwide. One of the E-banking areas through which BDO is starting to be competitive is in its tie up with schools for tuition fee payment systems with accredited billers of these schools.
E banking is one of the newest services that BDO is expanding through different target customers. One of the recent BDO E Banking activities was to provide bills of payment in different schools. BDO targeted those that are capable and qualified to have an account in BDO, these are the popular Universities and Colleges located in Metro Manila that customers -students, parents or other educational financers can do payment transaction through BDO E Banking. E banking is still on the process of improvements and there are no specific studies yet for the target customers of local banks that emphasize E banking satisfaction for adopting services that they can provide for their potential customers. Most of the existing customers of the local banks get used to traditional way of e banking like going to the branch do over the counter payment than use ATM machine and online banking. Like traditional school institutions that get used of payment transactions of going to school personally during enrolment. The rapid growth of school technology infrastructure has led to the increased availability and use of computers in schools. Schools facilities were further enhance with online computerization. All of the students, faculty and staff of the school today have access to computers and the Internet. While modernization arises, schools invest and give a lot of effort to adopt the best they can offer to enhance the standard of education, progress of learning and students convenience with school services and facilities. Educational institutions were introduced with different advancement for their traditional system. Schools learned how to use wireless online transaction facilities through internet access, school create websites for virtual marketing and information of the institutions. Now, even paying tuition fee can be done online. Wherein, payers just need to use their school institutions affiliated Banks websites that are accredited billers of paying enrolment through internet of E Banking online.
Accredited School Institutions Billers
BANCO De Oro Unibank, Inc. (BDO) affiliated E banking payment transaction with different College Schools in Metro Manila . Through the help and effort of BDO Transaction Banking Group (TBG) they succeed to operate the said E banking Services for these Accredited College School Institutions Billers: Colegio De San Juan De Letran (CSJL), San Sebastian College and St. Scholastica College providing access to its payment collection system wherein all students and parents can conveniently pay their tuition via more than 700 BDO branches nationwide; 1,300 automated teller machines; internet banking, phone banking; and credit or debit cards. Institutions of higher learning are investing heavily in new facilities'student unions, dining facilities, residence halls, and the like'that address the non-academic side of campus life. They rarely serve just one purpose; more often than not, they offer a variety of physical spaces where students can eat, socialize, network, study, and relax. This is partly due to the need for cost effectiveness, but it's also driven by a desire to integrate the academic with the social, a holistic approach that has been gaining favour with academicians in recent years (Badly 2013). Many institutions are constructing facilities beyond their ability to fund the construction without relying very heavily upon public financing or private donors,' said an engineer with a state building authority in the South. 'While it is laudable for an institution to try to provide the most attractive and competitive facilities in order to attract students, the added cost burden on tuition and fees often prices the cost of attendance beyond the reach of most students. 'If students have a more positive experience while they're in school, whether it's due to better housing or campus.amenities, it leads to stronger alumni ties,' says David Quenemoen of Southerland, Houston.
Benefits to BDO and Accredited School Biller
Customer satisfaction awareness is very essential for any organization. If the customers are not aware they can never be satisfied and the organization can never achieve its ultimate goal of emphasizing the benefits services they offer to give them the service quality that they deserve. This research goal is to determine the service quality of adopting BDO E-banking along with different influencing factors involved in customer's awareness and their satisfaction of traditional college schools that just started to adopt this kind of virtual transactions of payments online. The study findings provided useful information which will be helpful for the Banco De Oro providing e-banking services on how they can improve their company's strategic position for longer period of time through satisfying customers in their affiliated schools. At the same time, school institutions will have more reasons to value facilities they provide and give quality of service that educational financer deserves, that believes and invests learning in their institutions. Therefore this study will focus with accredited college school Institutions level of satisfactions of adopting BDO E banking payment transactions.
1.2 Statement of the Problem
This study aimed to analyze the service quality and satisfaction of respondents in paying tuition through BDO E Banking as accredited billers of their respective school in terms of the following criteria:
Specifically, it will try to answer the following questions:
1. What is the demographic profile of the respondents?
1.3. College Course
1.4. College Year Level
1.5. Sources of Educational Fund
1.6. Level of Income of Educational Financer
1.7. Banking Relationship in BDO
1.8. BDO E-banking User since
1.9. Advertising tools used in BDO E-banking Service for Customer Awareness
1.10. Current BDO E banking services used by Accredited Billers
2. How do respondents evaluate the services quality of BDO E banking transaction of BDO E banking transaction of payment in terms of the following four factors of service quality dimensions, namely:
2.1. Tangible Dimension
2.2. Reliability Dimension
2.3. Responsive Dimension
2.4. Assurance Dimension
2.5. Empathy Dimension
3. Are the accredited billers satisfied in paying school tuition fees through BDO E Banking?
4. Are there relationships between (1) service quality (in terms of its four dimensions)and(2)customer satisfaction?
5. Is there relationship of demographic profile of accredited billers paying tuition fee in BDO E Banking with factor dimensions of service quality and customer satisfaction?
The results of the study can identify factors/areas that should be improved and could be developed to enhance school institution and E-banking services with their payment transaction.
1.3. Research Aims
Large institutions of financial services such as transactions compete in the marketplace with variety of products offered therefore service quality becomes a primary competitive weapon (Stafford, 1996). The banking industry is highly competitive, banks do not only compete among themselves but also with other companies both local and foreign (Kaynak/Kucukemiroglu,1992). This study will focus on the E-banking service being provided by BDO with School Institutions with regards to payment of tuition fees, specifically on the assessment by the accredited billers of such service.
This study will benefit BDO as my employer and me as BDO employee and MBA student of Colegio San Juan De Letran. BDO and school institutions are both service sectors that are open minded with great innovations for the sake of giving the best service that can provide better for their customers.
Services of both types of financial institutions are the main factor of their existence that affects impact of customer satisfaction. These two types of business institutions depends and compete with the unstoppable innovation and modernization of the business world. This research paper will make them further understand the value of customers adopting and adjusting with such service changes. To avoid conflict with their valued customers and enhance the standards of service quality to meet their customer expectations at their best. Therefore, the research aims to understand the main factors that affect customer satisfaction and propose a model that would support decision makers enhance the quality of service.
1.4. Research Objectives
The study's research objectives are presented below:
1. To determine the demographic profiles of paying tuition fee customersof the participating schools in BDO E banking service;
2. To evaluate the importance of BDO E banking in terms of the factors affecting service quality dimension in paying tuition fee based on the experience of paying tuition fee customers of the participating schools;
3. To determine the effect of e-banking on customer satisfaction in so far as these customers are concerned;
4. To determine the relationship of (1) the service quality dimensions and (2) customer satisfaction of these customers with BDO E Banking services. Based on the results, to recommend ways to improve and enhance BDO E banking service.
II. Review of Related Literature, Theoretical Framework and Research Framework
E Banking: An Overview
The banking industry is now using the new communication media which is the internet to offer the best services to the customers. Electronic Banking includes now modern and virtual transaction like Mobile banking, Phone Banking and Internet Banking. The competitions of financial institution through standing of customer service satisfactions are uncertain when it comes to the modernization of E banking services. According to Barwise and Farley (2005) Electronic banking experienced explosive growth and has transformed traditional practices in banking. Customers and clients of the banks don't need to go to branches nor Automated Machines just to transact their finances. They can just browse internet then go to banks website anytime they want to transact their bills. Publisher of Global Finances, Joseph Giarraputo says 'The Internet has transformed the way many consumers and most businesses bank. The continuing improvements in Internet offerings represented by this year's entries show that more significant Internet banking developments are still ahead of us.' Since local banks just recently adopt electronic banking virtually, the competition arises in local banks. Financial Institutions take advantage of making strategies using technology a way of gaining prospect customers for E banking services. Further potential customers have a lot of choices as they compare banks innovation of Online Services. So it is becoming difficult for the banks to acquire expected number of customers. Therefore, as a condition of acquiring new customers and maintaining existing customers, e-banking organizations need to be seriously concerned about the customers' value in order to build customer's loyalty to reduce customer defections.
According to Daniel (1999) Electronic Banking is the delivery of banks' information and services by banks to customers to different delivery platforms that can be used with different terminal devices such as a personal computer and a mobile phone with browser or desktop software, telephone or digital television. Pikkarainen et al (2004) define internet banking as an internet portal, through which customers can use different kinds of banking services ranging from bill payment to making investments. With the exception of cash withdrawals, internet banking gives customers access to almost any type of banking transaction at the click of a mouse (De Young, 2001). The use of the internet as a new alternative channel for the distribution of financial services has become a competitive necessity instead of just a way to achieve competitive advantage with the advent of globalization and fiercer competition (Flavi??n et al, 2004; Gan and Clemes, 2006). Some research indicated that Banks use online banking as it is one of the affordable way of channels to be delivered for banking services (Pikkarainen et al, 2004). Such service saves the time and money of the bank with an additional benefit minimizing the likelihood of committing errors by bank tellers (Jayawardhena and Foley, 2000). According to Robinson (2000) internet banking services enables banks establish and extend further their relationship with the customers. Tuchilla (2000) believes that there are other many advantages to banks offered by online banking such as mass customization to suit the likes of each user, innovation of new products and services, more effective marketing and communication at lower costs . While Jayawardhena and Foley (2000) indicated that development of non-core products such as insurance and stock brokerage as an expansion strategy, improved market image, better and quicker response to market evolution. Wise and Ali (2009) argued that many banks want to invest in Automated Machines (ATM's) to reduce branch expense since customers prefer to use than going to branch for over the counter transactions. As one of the electronic instruments, ATM's impact increases the volume of customer transactions. The value of the service quality significantly affects the increase of customer satisfaction. The increase interprets into improvement of the customer loyalty that in result in higher customer retention and growing organization value. Internet banking is a cheap delivery channel and a way to increase sales. E banking services has become one of the most significant factors in the business world today.
Customer Satisfaction for E banking
Shailey Minocha (2003) indicated that E-banking relies on customers, particularly on customers awareness of meeting their demands and expectations that are becoming challenging because of the growth of electronic online services. According to Shailey The Total Customer Experience includes all stages of a customer's interaction with an E-Commerce environment, such as the delivery of the service or product on schedule. Besides, the speed, product features availability, and reasonable service fees and charges, as well as the bank's operations management factor are critical to the success of the e-banks. From the previous research, it was found that perceived service quality strongly influence customers. The essence of service quality is the ability to deliver what the customer needs and expects. Other research of Shailey (2003) believes that customer satisfaction has a positive influence in using E-Banking. Though, It is also critical on how customer acquire the service quality provided by those E banking organizations.
Relationship Customer Satisfaction and Service Quality
Researchers believe that Satisfaction is the evaluation of products or services taking into consideration of their expectations (Service Quality and Customer Satisfaction: Kotler and Armstrong 2012). Other studies suggest service quality leads to customer satisfaction (Gilbert and Veloutsou (2006). In achieving a high level of customer satisfaction, most researchers like studies of Lee et al. (2000); Sulieman (2011) and Buttle (1996) that a high level of service quality should be delivered by the service provider as service quality is normally considered an antecedent of customer satisfaction. As service quality improves, the probability of customer satisfaction increases. Clems (2008) believes that the quality was just only one of many dimensions on which satisfaction was based, satisfaction should be also considered as one prospect influential factor on future quality perceptions. Empirical studies show that the quality of service offered is related to overall satisfaction of the customer. Reliability, Tangibility and empathy positively related with customer satisfaction (Jamal and Anastasiadou 2009). A researcher found that reliability, tangibility, responsiveness and assurance have significant and positive relationship with customer satisfaction and Empathy was found to have a significant and negative effect on customer satisfaction (Sulieman 2011). Furthermore, Ravichandran (2010) indicates that the responsiveness is the only significant dimension of service quality that affects the satisfaction of customers positively.
Lee (2005) believes that consumers worldwide have become more quality conscious therefore customers' requirements for higher quality service have been increased. Service sectors like banks are shuold be responsible to provide excellent services to their customers in order to have sustainable competitive advantage. In spite of the criticality of service quality to businesses measuring service quality causes difficulties to service providers, as of the unique characteristics of services: intangibility, heterogeneity, inseparability and perish ability noted by Douglas & Connor (2003). In sight of this, Parasuraman (1985-1988) developed Servqual Model services that need a distinctive framework for quality clarification and measurement. It is the most preferred model for measuring service quality in the service industry.
2.2. Theoretical Framework
Service quality Model
The closest model for this research and applied model by most industries in measuring service quality is the SERVQUAL Model created by Parasuraman (1988). The Model proposed five dimensional perceived service quality that that affects customer satisfactions such as Tangibles, Reliability, Responsiveness and Assurance. These are the main parts and instruments needed for measuring the service quality.
Fig.1 J. Sci. Res., 13 (Research in Contemporary Business Finance and Wealth Management): 12-17, 2013
For the relevance of customer satisfaction and service quality, Wilson (2008) have been more precise about the meaning and measurements of this relationship. It stated that satisfaction and service quality have certain things in common, but satisfaction generally is a broader concept, whereas service quality focuses specifically on dimensions of service.
Servqual Five Dimensions:
It is the visible physical appearance of facilities, equipments, personnel and other document materials (Parasuraman 1985). According to Ananth (2011) study specify that the tangibility in Bank Institution referred to their modern equipment, facility, employees appearance and visual appealing materials.
According to Parasuraman (1988) Reliability relies on handling customers services problems that performs services for the first time. the performance should be provided in the given time to be fulfilled. Moreover, researcher Yang (2004) stated that reliability is the most important factor in services. That reliability should consists of accurate order fulfillment, record, quote, billing, calculation of commissions and fulfill services promise.
Parasuraman (1985) believes that responsiveness is the willingness or readiness and timeliness of employees to provide service. According to Kumar (2009) It is an understanding of the needs and wants of the customers, operates in a convenient hours, staff individual attention given to customers and problems and transaction of customers secured safety .
Caring and individual attention the firm provides its customers that's how Parasuraman (1985) defines Empathy. It involves giving customers individual attention and employees who understand the needs of their customers and convenience business hours. Furthermore, Empathy referred on a private sector banks as giving individual attention, convenient operating hours, personal attention, best interest in heart and understand customer's specific needs (Ananth 2011).
It is knowledge and courtesy of employees and their ability to inspire trust and confidence Parasuraman (1985). Other banks assurance means the polite and friendly staff, provision of financial advice, interior comfort, eases of access to account information and knowledgeable and experienced management team (Sadek 2010).
2.3. Research Framework
Fig.2 Research Conceptual Framework
This section summarizes the review of related literature compiled as the Model Framework to bring out the contributions significantly related for study's conceptual framework. The research framework is the connection between model framework and conceptual framework. Model framework illustrated the relationship towards SERVQUAL factor dimensions: Tangibles, Responsiveness, Reliability, Assurance, Empathy and Customer satisfaction -The most famous model of service quality was proposed by Parasuraman et al. (1985, 1988). The conceptual framework is connected to model framework below that shows the flow of this study. The input of the study will be the demographic profile of the respondents that will qualify the criteria to answer the questionnaire. This will be evaluated through the process of statistical treatment as a result of analyzing and determining level of service quality and customer Satisfaction of paying tuition through BDO E banking adopted by accredited school billers.
If customers agree that they are satisfied and give the reasons for satisfaction as service quality of the school tuition fee payment transaction in BDO E-banking services then a conclusion could be drawn that service quality has a significant relationship with customer satisfaction and with service quality dimensions. Based on these, the research hypotheses were on the fact that service quality dimension had significant relationship with customer satisfaction and service quality with conceptual framework. The hypotheses will be:
H1: Customer satisfaction has significant relationship with Service quality dimensions
H2: Service quality has significant relationship with service quality dimensions
H3: Customer satisfaction has a significant relationship with service quality
H4: There is a significant relationship between customer satisfactions in Payment transaction of Accredited Billers College School Institutions towards factors of service quality dimension.
H5: There is significance difference between College School Institutions and BDO E banking towards payment transaction services of paying tuition fee.
III. Research Methods
In order to obtain information about service quality factor dimensions and customer satisfaction a survey will be conducted at a sample of the general consumer population. In the questionnaire the questions are adopted from previous research revised to fit the study's requirements.
Target respondents are the main of accredited college school billers of BDO E-banking (students /parents/individual paying tuition fee) representing the accredited schools of adopting BDO E banking payment transactions that experiences E-banking services.
The accredited college school billers of BDO E-banking will be conducted at this places: Collegio De San Juan De Letran (CSJL), San Sebastian College and St. Scholastica College.
To obtain the information about service quality of factor dimensions and customer satisfaction a survey will be conducted by a questionnaire. The questions are adopted from previous research revised to fit the study's requirements. The respondents will be asked to answer given questionnaire. The result of which will be ranked and rated to generate the data needed.
3.5. Statistical Procedure
The survey questionnaire will be designed and distributed to target respondent randomly. A convenience sampling will be employed wherein the subjects are selected because they are easiest to recruit considered selecting subjects. It will be also purposive sampling technique corresponding specific respondents related to the topic. Service quality will be measured by implementing the five dimensions of the 'SERVQUAL' instrument: each dimensions followed by questions. The 5-point Likert -scale is used for all responses with (1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree, 5 = strongly agree).
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