AN EXAMINATION OF THE IMPACT OF COMMUNICATION GAPS ON CUSTOMER SATISFACTION IN NIGERIA'S BANKING SECTOR

CHAPTER ONE INTRODUCTION 1.1 Background of the Study The recent advancements in global trade and the expansion of competitive markets have led to notable economic fluctuations and intensified competition across industries (Narteh, 2013). In today’s consumer-driven environment, customers are presented with numerous options, empowering them to make informed decisions regarding their savings and purchases. As a result, the banking industry, like many others, now operates within a highly competitive landscape. Sustaining growth and maintaining a strong market position in this context hinges on the ability of banks to deliver exceptional customer service. However, due to ongoing financial reforms and the rapid adoption of advanced technologies, ensuring quality customer service has become increasingly complex in the banking sector. Malyadri and Sirisha (2015) assert that the core mission of commercial banks is to deliver prompt and efficient services as a strategy to attract and retain customers. Given that customer satisfaction is a fundamental driver of long-term business success, organizations now recognize that meeting and surpassing customer expectations is central to building a sustainable competitive advantage (Wasfi & Kostenko, 2014). Komunda and Osarenkhoe (2012) emphasize that effective customer satisfaction strategies help reduce customer attrition by serving as a safeguard against losing clientele. One such strategy is the implementation of robust mechanisms for managing customer complaints and feedback, which are increasingly becoming essential in the banking industry—not only to fulfill regulatory requirements but also to enhance service quality. Complaint and feedback management forms a key component of customer experience management, a broader strategy through which banks can refine service standards and delivery methods by actively listening to their customers (Zairi, 2000). Understanding the quality of services delivered from the customer’s perspective provides critical insights into how such services are perceived. Tumi (2005) stresses that in every customer interaction, the perception and experience of the client are vital to achieving satisfaction that exceeds mere expectations. It is not enough to fulfill the obvious needs of customers; effective service must also cater to their unspoken and less apparent expectations. Porter (2008) noted that there has been a marked rise in consumer awareness, expectations, and demand for innovation in services. Today’s customers expect not only novel products but also efficient delivery and highly responsive service. For banks to remain competitive, they must possess an in-depth understanding of customer needs and respond with high-quality service. In response, many commercial banks have attempted to institutionalize a customer-centric culture by implementing structured feedback systems and open-door policies that facilitate direct engagement between customers and senior management. To further this effort, banks have also invested in 24/7 customer support services and introduced virtual assistance features such as automated responses for common inquiries. These measures, coupled with internal structures that promote employee motivation and satisfaction at branch and digital levels, are designed to improve responsiveness and, ultimately, customer satisfaction. Nguli (2016) observes that organizations now realize that sustained growth and survival depend largely on consistently high levels of customer satisfaction. Effectively managing customer complaints is also a valuable way of gathering critical market intelligence. Such feedback allows businesses to address root causes and make improvements to their products or services (McCollough, Berry & Yadav, 2000). Ndulilo (2014) argues that complaint management is a central concern for service organizations, as poor handling can negatively affect both customer satisfaction and brand loyalty. Research by Robert-Lombard (2011) shows that the way an organization addresses customer complaints has a significant impact on its long-term performance. In the banking sector, customer dissatisfaction is frequently expressed. According to Shammout and Haddad (2014), approximately half of all consumer complaints in banking pertain to processes involved in opening, closing, or managing accounts. An additional 25% are linked to deposit and withdrawal transactions, including issues like transaction delays or unauthorized activities. Insufficient funds and associated charges, such as overdraft fees and bounced cheques, also constitute major sources of complaints. Forbes (2013) reported that 11% of customers face frustration while sending or receiving payments, while 6% experience issues related to the use of ATM or debit cards. Despite this, many banks rarely evaluate the effectiveness of their complaint resolution mechanisms. Consequently, some adopt a dismissive approach to customer concerns, especially those related to service quality—often underestimating the reputational damage this can cause. Despite growing awareness of the importance of addressing customer grievances, studies by Michel, Bowen, and Johnston (2019) reveal that overall customer satisfaction following service failures has not significantly improved. Organizations must, therefore, encourage and facilitate open communication from dissatisfied clients, as this presents an opportunity to resolve issues and rebuild relationships. Unfortunately, institutions that fail to address such concerns risk missing out on key opportunities to retain customers. It is within this context that the current study seeks to examine the impact of communication gaps on customer satisfaction within Nigeria’s banking sector. 1.2 Statement of the Problem Effective communication plays a crucial role in fostering strong relationships between banks and their customers. In the modern banking environment, communication is an essential element of customer relationship management, aimed at enhancing satisfaction, loyalty, retention, and long-term engagement. Kotler and Keller (2016) assert that poor communication with customers can lead to dissatisfaction, negative word-of-mouth publicity, and eventual customer defection to competing brands. This, in turn, diminishes profitability, patronage, and customer retention. To achieve and maintain high levels of customer satisfaction, banks must prioritize customer-centric values such as service quality, employee empowerment, shared process ownership, collaborative decision-making, and proactive client engagement. These practices not only bolster the bank’s public image but also enhance its communication effectiveness (Cross, 2018). However, one of the pressing challenges in Nigeria’s banking sector is its inability to continually upgrade the value of its services to meet customers' evolving expectations. This is particularly crucial in an industry where preferences shift rapidly and demand constant adaptation. Chiedum, Okocha, and Nwakaego (2017) observe that determining the precise variables that constitute customer satisfaction in today’s banking environment is difficult. The rapid expansion of the banking industry in Nigeria has intensified competition and raised the stakes for customer acquisition and retention. Simultaneously, banks face mounting pressures to meet elevated customer expectations, integrate mobile and digital technologies, and manage their brand perception more effectively. A critical issue undermining banks’ ability to build lasting relationships with clients is the absence of well-defined communication strategies. Baldinger and Rubinson (2016) argue that unclear or ineffective communication objectives often limit an organization’s efforts to cultivate brand loyalty. Poorly designed messages can severely hinder customer retention, as they fail to convey value or relevance. In many cases, marketing communications are focused almost exclusively on attracting new customers rather than retaining existing ones—an approach that can ultimately undermine customer satisfaction and loyalty. Moreover, organizations differ significantly in their choice of communication channels and media platforms. It is therefore essential for banks to accurately identify and address communication gaps in order to effectively reach their intended audience. Given the importance of communication in customer satisfaction and loyalty, this study is aimed at assessing the effect of communication gaps on customer satisfaction within Nigeria's banking sector. 1.3  Objectives of the Study The main purpose of this study is to examine the Impact of Communication Gaps on Customer Satisfaction in Nigeria's Banking Sector. Specifically, the study will; i.Determine the effect of bank employees' communication skills on customer satisfaction. ii.Analyze the impact of communication gaps on customer satisfaction levels in the Nigerian banking sector. iii.Evaluate the communication barriers faced by customers and banks. iv.Proffer strategies for banks to improve their communication practices and enhance customer satisfaction. 1.4 Research Questions The following questions have been prepared for the study: i.What is the effect of bank employees' communication skills on customer satisfaction? ii.How do communication gaps impact customer satisfaction levels in the Nigerian banking sector? iii.What communication barriers are faced by customers and banks? 1.5  Research Hypotheses H0: Communication gap has no significant effect on customer satisfaction in the banking sector of Nigeria. Ha: Communication gap has a significant effect on customer satisfaction in the banking sector of Nigeria. 1.6  Significance of the Study The findings of this study will provide the employees of the bank with information on more effective customer complaint procedures, which will enhance their ability to positively influence customer service and subsequently enhance their skills in managing client relationships. Implementing an improved complaint management system will additionally contribute to enhancing customer satisfaction.   Furthermore, it will help bank management to understand the effect of complaints and feedback management on customer satisfaction. This will help them in their policy formulation especially as it relates to handling customers complaints.It will also improve the services they receive from the banks through their complaints about service short-falls. Nevertheless, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the effect of communication gap on customers' satisfaction in the banking sector of Nigeria. 1.7 Scope of the study The scope of this study is boarded on the Impact of Communication Gaps on Customer Satisfaction in Nigeria's Banking Sector. Empirically, the study will  Geographically, the study will be delimited to employees in some selected banks in Lagos state. 1.8 Limitation of the study In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world. 1.9 Definition of Terms Communication:the process of exchanging information, ideas, thoughts, feelings, and messages between individuals or groups through various means such as spoken or written words, signals, gestures, or behaviors. Communication Gap: refers to a situation where there is a lack of understanding or miscommunication between parties. Customers' Satisfaction: a measure of how products and services supplied by a company meet or surpass customer expectations.  Banking Sector: comprises of financial institutions that accept deposits from the public, create credit, provide loans, and offer a variety of financial services, including wealth management, currency exchange, and safe deposit boxes.