The Effect of Banking Innovation on Customer Satisfaction in Commercial Bank of Ethiopia
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Date
2020-06
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Addis Ababa University
Abstract
This study was to examine the effect of banking innovation case study on customers of
commercial bank of Ethiopia in south Addis Ababa district. The study tests five dimensions of
innovation which is product, marketing, service, technological and process innovations whether
there is a relationship on customer satisfaction in CBE. Five research hypotheses are
constructed in the literature review. This study was intended to examine the effect of banking
innovation on customers’ customer satisfaction in Commercial Bank of Ethiopia. Particularly, it
was focused on examining the effect of banking innovation in creating customers’ satisfaction in
terms of five dimensions: namely product, marketing, service, technological and process
innovation. Both descriptive and explanatory designs with quantitative approach were employed.
Data were collected using five point scale self-administered questionnaire from 366 customers
that were sampled across 10 branches of CBE supervised under south Addis Ababa districts.
After all appropriate statistical assumptions were checked and confirmed data were analyzed
through descriptive and inferential statistical tools by the help of SPSS version 20. According to
the data, about 66% of the variation in customers’ satisfaction can be explained by the
dimensions of banking innovation. Result also shows that three of proposed dimensions of
banking innovation namely(product, marketing and technological innovation),has a positive
effect on customer satisfaction and service innovation found to have negative effect on customer
satisfaction, however process innovation found to have statistically insignificant to analyze.
Finally, it is recommended that as the management of CBE who desire to improve on customer
satisfaction should invest much of the company’s resources into product innovation, marketing
innovation and technological innovation
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Keywords
customer satisfaction, banking innovation, product