Thesis:

Influence of banks alternative channels on customer satisfaction in Kenya

Customer satisfaction in the banking sector is a key metric for assessing the caliber of services and overall interactions with financial institutions. Technology breakthroughs and changes in customer expectations have caused major changes in the banking industry in recent years. Alternative banking channels like online banking, smartphone apps, and digital payment platforms are gradually replacing or supplementing traditional banking procedures. This study aimed to investigate the influence of alternative banking channels on customer satisfaction among commercial bank customers in Kenya’s Coast region, specifically in Mombasa and Kilifi counties. The ease of access and the effectiveness of service delivery are closely related to customer v satisfaction, according to research. As digital banking has grown, customers now demand seamless, secure, and convenient experiences, and studies reveal that banks with strong digital platforms typically receive higher ratings in customer satisfaction surveys. This is because these platforms can offer 24/7 access to services, cutting down on wait times and improving convenience. The research focused on four key banking channels: Mobile Banking, Internet Banking, Agency Banking, and Automated Teller Machines (ATMs). The study adopted a descriptive research design to explore the relationships between these channels and customer satisfaction. The target population consisted of customers from various branches of KCB Bank Kenya Limited, selected through purposive and stratified random sampling techniques. Information was gathered using a combination of secondary data from consumer feedback reports and structured questionnaires. To evaluate the influence of each banking channel, multiple regression, correlation analysis, and descriptive statistics were used in the analysis. With both high unstandardized and standardized coefficients, ATM banking was found to have the most positive impact on customer satisfaction, demonstrating its crucial role in improving customer experiences. Mobile Banking also had a positive, although moderate, effect on satisfaction. In contrast, Internet Banking was found to negatively impact customer satisfaction, pointing to issues with service quality and user experience. Agency Banking had a slight negative effect, though not statistically significant. Based on these findings, the study concluded that banks should prioritize ATM services, as they are highly valued for their convenience. Enhancing Mobile Banking features could also improve customer satisfaction, while significant improvements in Internet Banking are necessary to address customer dissatisfaction. Agency Banking could benefit from better agent training to improve its effectiveness. Recommendations include investing in ATM infrastructure, enhancing mobile banking services, improving internet banking quality, and refining agency banking operations to increase customer satisfaction in Kenya’s commercial banking sector.