Impact of Technological Innovations on Customers in an Emerging Banking Industry in Ghana

Without continuous technological innovations in today’s highly digital world, it will be extremely difficult for banks to remain relevant within the competitive landscape. Bank customers are also becoming very sophisticated and their demands drive the direction of these technological innovations. Whilst banks derive efficiency from these innovations, customers are however impacted with convenience and transaction costs offered by these innovative services and electronic activities. This study sought to understand the impact of these electronic banking services on customer satisfaction and related transaction cost.

Drawing on the customer satisfaction model - SERVQUAL and the conventional economic efficiency theory, this paper employed the chi-square analysis to investigate customer satisfaction and the associated cost of electronic banking services with specific reference to banking customers in Ghana. Whilst the study concluded that there is a significant relationship between customer satisfaction and technological innovations in the Ghanaian banking industry, it was revealed that the costs associated with technological innovations in banking have also increased transactions costs to the disadvantages of customers. This increase could be attributed to the high cost of investment made by the banks, low level of technology adoption and customer education in the technological innovations.

The findings of the study have important policy implications for banks. First, banks need to have closer collaboration with the target segment of customers in developing new electronic products and services. This is to ensure that these products meet the needs, delight, attract and retain customers. Secondly, to avoid customer attrition as a result of high cost of electronic banking transactions, banks need to employ effective pricing strategies such as offering bundle fees to customers consuming multiple electronic banking services. This means that the banks must focus on innovation, disruptive technology and automation, with the ultimate aim of increasing profitability and at the same time satisfying its customers.