Customer Satisfaction on Credit Card of One Bank Ltd

Introduction

Credit is a method of selling goods or services without the buyer having cash in hand. A credit card is only an automatic way of offering credit to a consumer. Today, every credit card carries an identifying number that speeds shopping transactions. Imagine what a credit purchase would be like without it, the sales person would have to record your identity, billing address and terms of repayment.

According to Encyclopedia Britannica, “the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers.” However, references to credit cards have been made as far back as 1890 in Europe. Early credit cards involved sales directly between the merchant offering the credit and credit card and that merchant’s customer. Around 1938, companies started to accept each other’s cards. Today, credit cards allow you to make purchases with countless third parties.

In 1950, the Diners Club issued their credit card in the United States. The Diners Club credit card was invented by Diners Club founder Frank McNamara and it was intended to pay restaurant bills. A customer could eat without cash at any restaurant that would accept Diners Club credit cards. Diners Club would pay the restaurant and the credit card holder would repay Diners Club. The Diners Club card was at first technically a charge card rather than a credit card since the customer had to repay the entire amount when billed by Diners Club.

MasterCard, originally known as MasterCharge, was created by several California banks as a competitor to the BankAmericard issued by Bank of America, which later became the Visa credit card issued by Visa Inc. The original banks behind MasterCharge were United California Bank (later First Interstate Bank and subsequently merged into Wells Fargo Bank), Wells Fargo, Crocker National Bank and the Bank of California (subsequently merged into the Union Bank of California).

MasterCard is one of the major credit cards used regularly by people in the United States, second only in name recognition and worldwide billings to Visa. By marketing itself to ordinary men and women, in contrast to Visa’s efforts to capture an upper-income clientele, MasterCard is slowly chipping away at Visa’s market share in both the United States and other areas around the globe.

By the mid-70s, the U.S. Congress begin regulating the credit card industry by banning such practices as the mass mailing of active credit cards to those who had not requested them. However, not all regulations have been as consumer friendly. In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted restrictions on the amount of late penalty fees a credit card company could charge. Deregulation has also allowed very high interest rates to be charged.

The Shape of Credit Cards: Credit cards were not always been made of plastic. There have been credit tokens made from metal coins, metal plates, and celluloid, metal, fiber, paper, and now mostly plastic cards. The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York. In 1946, Biggins invented the “Charge-It” program between bank customers and local merchants. Merchants could deposit sales slips into the bank and the bank billed the customer who used the card.

Since credit card has become part of our life and becoming more and more popular I have decided to do my internship report based on this. For my report I have selected One Bank Limited’s (OBL) Credit Card.

 Introduction of Research Topic

There are a number of issuers that have already strengthened their positions in the Credit Card Market in Bangladesh. One Bank Ltd. (OBL), as one of the country’s leading bank in the backdrop of the growing demand and positive response in the market and considering the potentiality to enter into Credit Card Business. In this attempt, I have tried to study the customer satisfaction in term of the credit card attributes, fees and interest charges and issues regarding ATM booths. I am hoping that this will shed some light on the banks overall activity regarding credit card and how it can achieve the maximum market share in future.

Origin of the Study

This research paper has been prepared as a part of the BBA Program of North South University. The report titled, “A Study of Customer Satisfaction on Credit Card (MasterCard) of One Bank Ltd” is an outcome of three months’ long Internship Program at One Bank Ltd. The report topic was approved by the faculty supervisor to satisfy the organizational requirements and fulfillment of the internship program. This report has been prepared under both of their direct supervision.

Objectives of the Study

The broad objective of the study is to draw an overall view of the credit card market and then identify the prospects of OBL. The specific objectives of the study are:

• To discover the preferred attributes & satisfaction level of the clients of OBL to choose credit card
• To analyze & compare the services offered by OBL regarding Credit cards and its charges
• To identify the weakness and problems of the Credit card services and to suggest the necessary measures to improve the service quality of the Branch and the bank as a whole

Significance of the Study

The report titled “A Study of Customer Satisfaction on Credit Card (MasterCard) of One Bank Ltd.” is prepared as a requirement of the three months long internship program at One Bank Limited. Entering into a new line of business requires careful research and analysis on the market and competitors’ strategies, strengths, weaknesses etc. Under this circumstance a comparative analysis on the existing Credit Card Market would be very helpful for the bank to accumulate various data and information regarding the product/service offerings, customer bases, customers’ satisfaction level etc. and in the process help to explore opportunities and set strategies. It would be a huge boost for me to get acquainted with the credit card business. So this study is very significant for both the bank and me.

Expected Findings of the Study

Prior to all research works, there were some expected results, which are hypothesized for the evaluation of the study. The expected findings of the study were:

• To analyze the services offering and charges of OBL regarding Credit cards comparing with other banks (other credit cards) in the process of card delivery times, interest rate, merchant pricing, different fees & charges.
• Customers’ credit card selecting criteria, attitude of keeping various cards, their wants, needs that can be overcome by OBL.
• OBL’s sources of areas of improvement in the whole process of credit card business.
• Cardholders’ personal background regarding their age, income, occupation and education to evaluate their card usage pattern, habits, and other features.
• To identify the weakness and problems of the Credit card service offering of OBL.

Methodology of the Study

The whole system of data collection and analysis included the following procedures:

Sources of Data

Both primary and secondary sources of data have been used to gather the necessary information for the analyses of the study. Primary data sources are the cardholders. The secondary data sources are the organization booklets of charges and fees, application forms, credit card agreements of the card offering organizations. 

Sampling Technique Used

a)     Population:  Cardholders of “One Bank Limited” (OBL)

b)     Sampling Design & Sample Size: Currently 9 banks are providing credit card facility. Among these I have chose to do my research on the OBL credit card holders. But, as the population size of cardholders is large, it was difficult to determine a representative sample size. So, a purposive quota sampling was used for the cardholders. The total sample size was 120. The Cardholders were selected on a convenient basis for the face-to-face personal interview as well as survey.

c)     Data Administering Method: The cardholders and the issuers were personally interviewed. Due to some inconvenience and also to avoid wastage of time, some respondents were also interviewed over the telephone by making them understand the technical terms. A set of questionnaire were developed to collect all the data and information.

d)     Techniques of Data Analysis: Various quantitative approaches like frequency distribution, cumulative percentage measurement, regression analysis, Chi square test, Beta value, Significance level, Reliability test have been used for analyzing the collected data with the statistical software SPSS version 11.

Limitation of the Study

Although employees of ONE Bank were busy in works, I have obtained whole-hearted co-operation and time to make the report properly. But they were not able to give me the detailed information and documents that I would like, on the way of my study. Though, I have tried to put the best effort as far as possible, followings may be termed as the core limitations of the study:

• Limitation of Time

Due to time limit, the scope and dimension of the report has been curtailed. Even I could not spend sufficient time for my report as the internship attachment was very short.

• Insufficiency

Despite extensive use of IT infrastructure by OBL, the intranet based data is not updated and does not contain enough information to analyze the proper growth according to market economy. In addition, major strategic information is dispersed at different branches which are hardly to accumulate.

• Lack of Records

Sufficient books, publications and journals, facts and figures narrowed the scope of accurate analysis. Hence, there is a chance that the survey results might not ascertain the accurate facts.

• Fear of Disclosure

Another constraint of this report is Company’s policy of not disclosing some data and information for obvious reasons, which could be very much useful. Hence, some assumptions were made despite the hindrance of information.

 Literature Review

 Introduction

Credit is a method of selling goods or services without the buyer having cash in hand. A credit card is only an automatic way of offering credit to a consumer. Today, every credit card carries an identifying number that speeds shopping transactions. Imagine what a credit purchase would be like without it, the sales person would have to record your identity, billing address and terms of repayment.

According to Encyclopedia Britannica, “the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers.” However, references to credit cards have been made as far back as 1890 in Europe. Early credit cards involved sales directly between the merchant offering the credit and credit card and that merchant’s customer. Around 1938, companies started to accept each other’s cards. Today, credit cards allow you to make purchases with countless third parties.

In 1950, the Diners Club issued their credit card in the United States. The Diners Club credit card was invented by Diners Club founder Frank McNamara and it was intended to pay restaurant bills. A customer could eat without cash at any restaurant that would accept Diners Club credit cards. Diners Club would pay the restaurant and the credit card holder would repay Diners Club. The Diners Club card was at first technically a charge card rather than a credit card since the customer had to repay the entire amount when billed by Diners Club.

MasterCard, originally known as MasterCharge, was created by several California banks as a competitor to the BankAmericard issued by Bank of America, which later became the Visa credit card issued by Visa Inc. The original banks behind MasterCharge were United California Bank (later First Interstate Bank and subsequently merged into Wells Fargo Bank), Wells Fargo, Crocker National Bank and the Bank of California (subsequently merged into the Union Bank of California).

MasterCard is one of the major credit cards used regularly by people in the United States, second only in name recognition and worldwide billings to Visa. By marketing itself to ordinary men and women, in contrast to Visa’s efforts to capture an upper-income clientele, MasterCard is slowly chipping away at Visa’s market share in both the United States and other areas around the globe.

By the mid-70s, the U.S. Congress begin regulating the credit card industry by banning such practices as the mass mailing of active credit cards to those who had not requested them. However, not all regulations have been as consumer friendly. In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted restrictions on the amount of late penalty fees a credit card company could charge. Deregulation has also allowed very high interest rates to be charged.

The Shape of Credit Cards: Credit cards were not always been made of plastic. There have been credit tokens made from metal coins, metal plates, and celluloid, metal, fiber, paper, and now mostly plastic cards. The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York. In 1946, Biggins invented the “Charge-It” program between bank customers and local merchants. Merchants could deposit sales slips into the bank and the bank billed the customer who used the card.

Since credit card has become part of our life and becoming more and more popular I have decided to do my internship report based on this. For my report I have selected One Bank Limited’s (OBL) Credit Card.

Introduction of Research Topic

There are a number of issuers that have already strengthened their positions in the Credit Card Market in Bangladesh. One Bank Ltd. (OBL), as one of the country’s leading bank in the backdrop of the growing demand and positive response in the market and considering the potentiality to enter into Credit Card Business. In this attempt, I have tried to study the customer satisfaction in term of the credit card attributes, fees and interest charges and issues regarding ATM booths. I am hoping that this will shed some light on the banks overall activity regarding credit card and how it can achieve the maximum market share in future.

Origin of the Study

This research paper has been prepared as a part of the BBA Program of North South University. The report titled, “A Study of Customer Satisfaction on Credit Card (MasterCard) of One Bank Ltd” is an outcome of three months’ long Internship Program at One Bank Ltd. The report topic was approved by the faculty supervisor to satisfy the organizational requirements and fulfillment of the internship program. This report has been prepared under both of their direct supervision.

Objectives of the Study

The broad objective of the study is to draw an overall view of the credit card market and then identify the prospects of OBL. The specific objectives of the study are:

• To discover the preferred attributes & satisfaction level of the clients of OBL to choose credit card
• To analyze & compare the services offered by OBL regarding Credit cards and its charges
• To identify the weakness and problems of the Credit card services and to suggest the necessary measures to improve the service quality of the Branch and the bank as a whole

Significance of the Study

The report titled “A Study of Customer Satisfaction on Credit Card (MasterCard) of One Bank Ltd.” is prepared as a requirement of the three months long internship program at One Bank Limited. Entering into a new line of business requires careful research and analysis on the market and competitors’ strategies, strengths, weaknesses etc. Under this circumstance a comparative analysis on the existing Credit Card Market would be very helpful for the bank to accumulate various data and information regarding the product/service offerings, customer bases, customers’ satisfaction level etc. and in the process help to explore opportunities and set strategies. It would be a huge boost for me to get acquainted with the credit card business. So this study is very significant for both the bank and me.

Expected Findings of the Study

Prior to all research works, there were some expected results, which are hypothesized for the evaluation of the study. The expected findings of the study were:

• To analyze the services offering and charges of OBL regarding Credit cards comparing with other banks (other credit cards) in the process of card delivery times, interest rate, merchant pricing, different fees & charges.
• Customers’ credit card selecting criteria, attitude of keeping various cards, their wants, needs that can be overcome by OBL.
• OBL’s sources of areas of improvement in the whole process of credit card business.
• Cardholders’ personal background regarding their age, income, occupation and education to evaluate their card usage pattern, habits, and other features.
• To identify the weakness and problems of the Credit card service offering of OBL.

 Methodology of the Study

The whole system of data collection and analysis included the following procedures:

Sources of Data

Both primary and secondary sources of data have been used to gather the necessary information for the analyses of the study. Primary data sources are the cardholders. The secondary data sources are the organization booklets of charges and fees, application forms, credit card agreements of the card offering organizations. 

Sampling Technique Used

a)     Population:  Cardholders of “One Bank Limited” (OBL)

b)     Sampling Design & Sample Size: Currently 9 banks are providing credit card facility. Among these I have chose to do my research on the OBL credit card holders. But, as the population size of cardholders is large, it was difficult to determine a representative sample size. So, a purposive quota sampling was used for the cardholders. The total sample size was 120. The Cardholders were selected on a convenient basis for the face-to-face personal interview as well as survey.

c)     Data Administering Method: The cardholders and the issuers were personally interviewed. Due to some inconvenience and also to avoid wastage of time, some respondents were also interviewed over the telephone by making them understand the technical terms. A set of questionnaire were developed to collect all the data and information.

d)     Techniques of Data Analysis: Various quantitative approaches like frequency distribution, cumulative percentage measurement, regression analysis, Chi square test, Beta value, Significance level, Reliability test have been used for analyzing the collected data with the statistical software SPSS version 11.

Limitation of the Study

Although employees of ONE Bank were busy in works, I have obtained whole-hearted co-operation and time to make the report properly. But they were not able to give me the detailed information and documents that I would like, on the way of my study. Though, I have tried to put the best effort as far as possible, followings may be termed as the core limitations of the study:

• Limitation of Time

Due to time limit, the scope and dimension of the report has been curtailed. Even I could not spend sufficient time for my report as the internship attachment was very short.

• Insufficiency

Despite extensive use of IT infrastructure by OBL, the intranet based data is not updated and does not contain enough information to analyze the proper growth according to market economy. In addition, major strategic information is dispersed at different branches which are hardly to accumulate.

• Lack of Records

Sufficient books, publications and journals, facts and figures narrowed the scope of accurate analysis. Hence, there is a chance that the survey results might not ascertain the accurate facts.

• Fear of Disclosure

Another constraint of this report is Company’s policy of not disclosing some data and information for obvious reasons, which could be very much useful. Hence, some assumptions were made despite the hindrance of information.

 Survey Methodology

Primary data:

In order to accomplish this report I have prepared questionnaire that guided me to the conclusion of the report. The data that I have received from my questionnaire survey are my primary data.

Secondary data:

Secondary data of this report includes all the available information that is currently available regarding One Bank Limited, credit cards.

 Research model:

According to the research questions and hypotheses I have built the research model including both graphical and mathematical model. The graphical model is shown below:

1. Variables:

• Dependent variable

Major focus of my research is to find out the customer satisfaction. So, my dependent variable is customer satisfaction.

• Independent variables

In order to find out customer satisfaction, I have used three independent variables that affect the customer satisfaction.

 Credit card attributes (i.e. convenience, Security, mental satisfaction, status, loans, use of dual currency, Cash withdrawal facility, discount, payment of utility bills, interest charges, number of ATM booths, customer service, merchant coverage).

  Fees and interest rates.

  Location of the ATM booths.

 Research Design

In this segment you will find details about the research design procedures, research type, sampling method, selection procedure, questionnaire development process, and the techniques of analysis.

This Research is Conclusive

This research is a conclusive one. In the research I developed some hypothesis. Those hypotheses were based on the graphical model. Through the research I have tested the hypothesis. I have developed questionnaire to collect primary data from the specific target group. Questions and answers options are clear and specific. The moderately large samples are representative of total target market. The data analysis I have done is quantitative. I have followed formal and structure research process and meet the deadline for the research. The findings are also conclusive and these can be used as input into decision-making process.

Target Population

The target population for this research is all the credit card holders of One Bank Limited. For limitations I have only done survey on the credit card holder in DhakaCity.

Sampling Elements

The sampling element of this research is the customers who have participated in my questionnaire survey.

Extent of Sample

The extent of the sample is limited to Dhaka city. The time frame is the year 2010.

 Data Collection Method

Major portion of my data is collected through questionnaire survey. My primary method for data collection is survey, which gave me a picture of the overall level of customer satisfaction. This let me know whether the customers are really satisfied with the service that they receive from the credit cards of One Bank Limited (OBL).

I have prepared primary draft questionnaires based on my hypothesis. Whether or not the questions are valid depends on the significance of the questions related with the research questions and my hypothesis.

Sampling Technique

The ultimate goal of this report is to find out the level of satisfaction of the customers that uses the credit card of One Bank Limited (OBL) and what drive them to continue using it in future. In order to do that, I distributed my finalized questionnaire to the customers. Since, many of the respondents were participating during their regular office hours sometimes I had fill up the questionnaire for them, I had to fill up the questionnaire by myself. I had to go to the customers one by one and explain the questions to them in order to fill up the questionnaire.

Questionnaire Development

I have prepared a questionnaire to find out the specific answers for my research questions. The questionnaire sample is attached in appendix section. In the questionnaire I have demographic questions like age, sex, income range, profession. Questionnaire contains both ranking and scaling questions regarding credit card attributes, fees and interest rates and ATM booths of the OBL credit card.

 Sample Size

The survey is conducted among 120 people among both male and female.

Analysis Technique

Several statistical tools are used to analyze and interpret the findings of the research. I have built a frequency distribution table from the findings. Then the table is shown graphically; also the shape of the distribution is measured. Correlation from a regression has developed and it indicates the relation between each independent variable with dependent variable.

The research includes number of hypothesis tests (both one-tailed & two-tailed). Each has null & alternative hypothesis and have significance level for each test.  I have also used cross-tabulation, mean analysis to justify the findings in my recommendation.

Mathematical Model

Here I have expressed the mathematical model. With this model, I ran regression in SPSS software. The mathematical model is given below:

Y =α + ß₁x₁  + ß₂x₂ + ß₃x₃ + €

Customer Satisfaction = constant + ß1 (attributes) + ß2 (fees and interest rates) + ß3 (ATM booths) + error

 Here Y is the dependent variable “Customer Satisfaction”, α is constant, ß1, ß2 and ß3 are coefficients of independent variables x1,x2 and x3 and  € is representing error.

 Hypothesis

Research Problem Statement

Research Questions:

1.  Whether the attributes related to credit card (i.e. convenience, Security, mental satisfaction, status, loans, use of dual currency, Cash withdrawal facility, discount, payment of utility bills, interest charges, number of ATM booths, customer service, merchant coverage) has significant impact on customers satisfaction of One Bank Limited?

Null: “Attributes has insignificant impact on customer satisfaction.”

Alternative: “Attributes has significant impact on customer satisfaction.”

 2.      Whether fees and interest rates have significant impact on customer satisfaction of the credit card holders?

 Null: “Fees and interest rates have significant impact on customer satisfaction.”

Alternative: “Fees and interest rates have insignificant impact on customer satisfaction.”

3.      Whether location of ATM booths has significant impact on customer satisfaction of the credit card holders?

Null: “Location of ATM booths has insignificant impact on customer satisfaction.”

Alternative: “Location of ATM booths has significant impact on customer satisfaction.”

Findings and Data Analysis

In this segment of the report all findings of the survey are provided with detail analysis. This part is further divided in to two parts. In the first part I have talked about the frequency distribution of different demographic variables. In the second part I have discussed the findings from my questionnaire.

Frequency Test of Demographic Variables

Here in this part I have explained the frequency distribution of my demographic variables. The demographic variables I used in this project are age, sex, individual’s monthly income, and profession.

• Age Group

The age group was ranged from 20 to above 60 and divided into five segments. These are 20 to 25, 25-35, 35-50 and 50-60 and above 60. The frequency distribution is shown below:

 Table 2: Frequency Distribution of Age Group

All of my respondents were between ages of 25 to 60 years. There were no respondents that belonged in the age group between 20 and 25 and above 60 years. About 50% of the respondents were in the age group of between 35-50 years.

• Gender

Sex is divided into two groups, Male and Female. Frequency distribution is given below:

 Table 3: Frequency Table for Gender

An equal distribution between male and female is not equal. After I finished my survey I have found out that 96 of my respondents were male and 24 were female who had been using the OBL credit card. That means 80% of the total respondents are male and 20% of the total respondents are female.

• Profession

There are four types of profession in my questionnaire.

 Table 4: Frequency Table for Occupation

Most of my respondents were bank employee (50%) followed by businessmen (30%) and then lastly private employee (20%).

• Individual Income

For this segment we have five slabs. These are below 10K, 10K to 25K, 25K to 40K, 40K to 60K, and above 60 K. The frequency distribution is given below.

 Table 5: Frequency Table for Individual Income (Monthly)

Summary of Demographic Findings

In this section I have represented a graphical presentation of the responses of the respondents regarding the OBL credit card services. Accordingly, based on those responses I will qualify the satisfaction level of the OBL credit card holder as per the hypotheses added.

To analyze the survey result I have input the data in SPSS statistical software. I have used version 12.0 of SPSS.  Several statistical tools is used to analyze and interpreting the findings of the research by using SPSS. I have built a frequency distribution table from the findings for the variables. Then the table have shown graphically, also the shape of the distribution will be measured. Correlation from a regression has developed and it indicates the relation between each independent variable with dependent variable.

The research includes number of hypothesis tests. Each has null & alternative hypothesis and have significance level for each test.  I have also used cross-tabulation, mean analysis to justify the findings in my recommendation.

Regression Analysis

• Regression Table

Table 6: Regression Analysis

Model Summary (b)

 a  Predictors: (Constant), attributes, fees and interest rates & ATM booths

b  Dependent Variable: Satisfaction               

ANOVA (b)

 a  Predictors: : (Constant), attributes, fees and interest rates, ATM booths

b  Dependent Variable: satisfaction

Findings from the Regression Table

Adjusted R square: The value of adjusted R square is .390 which means 39% of the variance in the dependent variable can be explained through this model.

F value: This model has F value of 26.357 and significance of .000, which suggest that the model is significant.

• Regression Equation

Y =α + ß1×1  + ß2×2 + ß3×3 + €

Customer Satisfaction = constant + ß1 (attributes) + ß2 (fees & interest rates) + ß3 (ATM booths) + error

 Here Y is the dependent variable “Customer Satisfaction”, α is constant, ß1, ß2 and ß3 are coefficients of independent variables x1 (attributes), x2 (fees & interest rates) and x3 (ATM booths) and € is representing error.

So, from the regression table, I have found the following regression equation-

Customer satisfaction = -.339 + .228 (attributes) + .101 (fees & interest rates) + .411 (ATM booths) + error.

Interpretation of the Regression Equation

It means if there is one unit change in attributes customer satisfaction will change by .228 units holding fees and interest rates and ATM booths constant.  Positive beta value indicates that attributes are positively related to customer satisfaction. It means if there is one unit increase in attribute then customer satisfaction will increase by .228 unit and vice versa holding other variables constant.

If there is one unit change in fees and interest rates, customer satisfaction will change by .101 units holding attributes and ATM booths constant. Positive beta value indicates that fees and interest rate is positively related to customer satisfaction. It means if there is one unit increase in fees and interest rate then customer satisfaction will increase by .101 unit and vice versa holding other variables constant.

If there is one unit change in ATM booth, customer satisfaction will change by .411units holding attributes and fees and interest rates constant. Positive beta value indicates that service quality is positively related to customer satisfaction. It means if there is one unit increase in ATM booths then customer satisfaction will increase by .411 unit and vice versa holding other variables constant.

Analysis of Each Variable

Now I am going to discuss the variable’s reliability, significance, and findings and identify the weakness and strengths of each variable and provide recommendation for improvement of those weaknesses.

Attributes of the Credit Card

1. Reliability Test

“Reliability refers to the extent to which a scale produces consistent results if repeated measurements are made”. Basically, it measures the internal consistency of the questions that are asked under each variable. This internal consistency is measured by the value of Cronbach’s alpha. A value less than 0.60 generally indicate unsatisfactory internal consistency reliability.

Table 7: Reliability Test for Attributes

Location has Cronbach’s Alpha of .611, which is more than the minimum requirement 0.60. So, my questions under the variable location are internally consistent and reliable.

1. Regression Table

 a.   Dependent Variable: satisfaction

C.     Interpretation

The significance of attribute is .015 at 95% confidence level which is lower than 0.05. It also has quite high beta value and t-value. According to statistics, the decision rule for a t-distribution is-

Reject H_o,if t_cal >t_n-1, a/2 or t_cal < – t_n-1, a/2

Here, t_{cal = 2.479,}  a= 5%=.05, n=120, t_n-1,  a/2 = t_120,  .025= 1.960

Therefore, t_cal > t_n-1, a/2.

So, reject null hypothesis, which attribute has insignificant impact on customer satisfaction. It means location has significant impact on customer satisfaction.

D.    P-Value

P-value for location is 0.66%. It means we can reject null hypothesis at 0.66% significance level of any level above it.

E.     Beta value (coefficient of variable)

Attributes of credit card has the second highest beta value (.228) among all other variables used in this model. It suggests that it has significant impact on the dependent variable customer satisfaction. It is obvious that customers will definitely want the attributes of the credit card to be attractive and effective in order to make better use of credit card facility.

• Frequency Test of Attributes Associated with Credit Card

1. Security:

To find the response level of respondents regarding the security associated with use of credit card, I asked them a question- ‘I use credit card for security’- and I asked it in liquored scale.  The responses that I received from the survey are given in the table below.

 Table 8: Security associated with the use of credit card

1 percent of the total 120 respondents agreed that they use credit card for the sake of security. This gave them the pleasure of being secured as our streets can be hostile sometimes due to mugging. 6% of the total respondents disagreed with this statement. And 13% had no specific comment on this topic. Considering result it is safe to assume that this outcome of the question will empower my hypothesis on the credit card attributes that includes security.

2. Mental Satisfaction:

To find out the mental satisfaction level and whether or not the card holder are affected by the use of credit card I asked them a question. Which was, “I use credit card for mental satisfaction” – and I asked it in liquored scale. The responses that I received from the survey are given in the table below.

 Table 9: I use credit card for mental satisfaction

From the above figure we can see that 58% of total respondents agreed that the use of credit card gives them mental satisfaction whereas 30% disagreed with this statement. So it can be said that overall the mental satisfaction is one of those attributes that drives the credit card holders to continue use the OBL cards.

3. Bill Processing Period:

To find out the affects of bill processing period I asked this question in liquored scale, “I consider bill processing period as an important attribute”. The responses that I received from the survey are given in the table below.

 Table 10: Bill processing period as an important attribute

As you can see from the from the above table and figures 74% thought that bill processing time is an important factor in credit card use. So I can say that since the interest rates and fees varies from one package to another package and these also fluctuate based on the economic condition of Bangladesh the bill processing time is considered a very important attribute by the card holders of OBL.

• Overall satisfaction on the Attributes of Credit Card

To assess the overall effect of attributes of the credit card on the customer satisfaction of OBL we can go through the results of each questions asked to the respondents and see that most on the attributes are affecting the satisfaction level of the customers. There are few which are affecting more than others. Those attributes are convenience, personal image, security, discount facility, bill processing time, use for emergency and for short term loan. Even though the other attributes are less important to the customers it is safe to assume that with proper marketing and offer OBL’s credit card’s other attributes can also be part of this strong chain of attributes stated above.

Summary Findings on “Attributes”

      Questions regarding Attributes has Beta value of .228

      Significance (.015)

      Reliability of  0.611

Drawbacks:

Limited facility to pay utility bills

Fees & Interest Rates of Credit Card

1. Reliability Test

Table 11: Reliability Statistics

Accommodation has Cronbach’s Alpha of .667, which is more than the minimum requirement 0.60. So, my questions under the variable “fees and interest rates” are internally consistent and reliable.

1. Regression Table

 a.  Dependent Variable: satisfaction

C.     Interpretation

The significance level of fees and interest rates is .246 at 95% confidence level which is higher than 0.05. It also has lower beta value and t-value.

Again, According to statistics, the decision rule for a t-distribution is-

Reject H_o,if t_cal >t_n-1, a/2 or t_cal < – t_n-1, a/2

Here, t_{cal = 1.166,} a= 5%=.05, n=120, t_n-1, a/2 = t_{119, .}025= 1.960

Therefore, t_cal < t_n-1, a/2

And t_cal > -t_n-1, a/2

So, we fail to reject null hypothesis which is fees and interest rates have significant impact on customer satisfaction.

D.    P-Value

P-value of fees and interest rates is 12.1%. It means we can reject null hypothesis at 12.1% or any level above it.

E.     Beta value (coefficient of variable)

Fees and interest rates have the least beta value (.101) among all other variables used in this model. It suggests that it does not have significant impact on the dependent variable customer satisfaction. Customers usually expect a lower interest rates and fees on credit cards. So, it can be assumed that they require an excellent service with respect to fees and interest rates alongside great packages with different sets of offers.

• Frequency Test of Fees & Interest Rates Associated with Credit Card Use

The fees and interest rates of credit card is significantly higher than others. A bank can earn lots of profit from doing a successful credit card business. That is why I have asked few questions in order to find out whether or not my hypothesis regarding fees and interest rates as one of the independent variable of customer satisfaction is right or not.

The first question I asked in liquored scale is “The options in fees and interest rates are satisfactory”. The outcome’s frequency distribution from my survey is stated below.

 Table 12: The options in interest rates and fees are satisfactory

Above table shows that 50 out of 120 respondents are thinking this from neutral point of view. 31 percent agree with that statement and a total of 39 respondents think that the options in interest rates and fees are not satisfactory.

 Table 13: Mean of questions asked under the variable “Fees and Interest Rates”

Above table shows that half of the questions that were asked under the variable “Fees and Interest Rates” has mean value of approx.2. It suggests that most of the answers were around agree and neutral. It means customers are in between agree and neutral and if fees and interest rates are not further improved then the mean value may cross 3. Among all the questions satisfaction regarding fees and interest rates has the highest mean value (3.18) and it is followed by how frequent the offers regarding fees and interest rates been adjusted.

• Cross Tabulation of Questions asked regarding Fees & Interest Rate

In order to find out the level of satisfaction by cross referencing between different variables I have picked 3 questions and created a crosstab. The result is stated below.

How often do you use credit card?

Once a week

5

3

1

9

Once in 2 weeks

32

11

4

47

Once a month

25

14

1

40

Total

62

28

6

96

Female

How often do you use credit card?

Once a week

2

1

0

3

Once in 2 weeks

5

6

2

13

Once a month

3

4

1

8

Total 

10

11

3

24

 Table 14: Cross Tabulation of Frequency of Use, Attractive Offer and Gender

We can see from the table that males’ uses more credit card than female. We can also see that out of total 24 female 13 of them uses credit card at least once every 2 weeks. This means on an average about 54% percent of total female respondents are using credit cards once every two weeks. At the same time out of 96 men 47 (49%) men uses credit card once every two weeks. And 40 of them (42%) uses once each month.

It is quite clear that people who use the credit card more frequently want more attractive offer.  During my survey I have noticed that fewer female were using credit card compared to men. That is why the frequency should have been greater for men but the data analysis shows that females are using more credit card then men. It might be because of the safety issue associated with it or the convenience.

Summary Findings on “Fees & Interest Rate”:

      Questions regarding Fees and Interest rates has Beta value of .101

      Significance (.246)

      Reliability of 0.667

Drawbacks:

Even though I tried to find out as much as possible about the customer satisfaction with respect to fees and interest rates I think that due to lower number of credit card holders among female is something that might biased the overall survey towards men. The bank probably can create more package for female professionals to attract them to take on credit cards more. The result is pretty much consistent with my hypothesis and gives the answer I have been looking for and proves that the fees and interest rates are indeed one of the important variables that can affect the overall satisfaction of the credit card holders. In short –

(a)  More attractive offers are needed

(b)  Satisfaction level for credit card holders are not to the point where we can say OBL has done the job well

 ATM Booth’s Features Associated with Credit Card

1. Reliability Test

 Table 15: Reliability Test of Variable Service Quality

ATM booths questions’ have Cronbach’s Alpha of .850, which is more than the minimum requirement 0.60. So, my questions under the variable “ATM booths” are internally consistent and reliable.

1. Regression Table

 a  Dependent Variable: satisfaction

C.     Interpretation

The significance level of the questions with respect to ATM booths is .000 at 95% confidence level which is lower than 0.05. It also has highest beta value and t-value.

Again, According to statistics, the decision rule for a t-distribution is-

Reject H_o,if t_cal >t_n-1, a/2 or t_cal < – t_n-1, a/2

Here, t_{cal = 4.438,} a= 5%=.05, n=120, t_n-1, a/2 = t_{119, .}025= 1.960

Therefore, t_cal > t_n-1, a/2

So, reject null hypothesis that ATM booths has insignificant impact on customer satisfaction. It means customer satisfaction and ATM booths are significantly related to one another.

D.    P-Value

P-value for “ATM booths” is 0.00%. It means we can reject the null hypothesis at 0.00% significance level or any level above it.

E.     Beta value (coefficient of variable)

It has the highest beta value (.411) among all other variables used in this model. It suggests that it has the most significant impact on the dependent variable “customer satisfaction”.

• Frequency Test of ATM Booths’ Features Associated with Credit Cards

1. Number of ATM Booths as an Important Attribute:

To find out whether or not the number of ATM booths is important factor to influence the customer satisfaction I asked the credit card holder with a liquored scale question. The question was mentioned like a statement. It was, “I consider number of ATM booths as an important attributes.” The responses are analyzed and plotted graphically, below.

 Table 16: I Consider Number of ATM Booths as an Important Attribute

From the above analysis we can see that there were no responded who chose anything other than agree and strongly agree. That means every respondent consider number of total ATM booths as an important feature associated with credit card’s overall satisfaction.  100% of the respondents think that number of ATM booths is an important attribut

2. ATM Machines’ User Interface:

I also asked if the customers are satisfied with the user interface of the ATM machines. Their responses are analyzed and I have mentioned my analysis below with graphical presentation.

 Table 17: ATM Machines are User Friendly

71% of all the respondents think that the ATM machines are user friendly and easy to use. Even though 15% of the respondents think that the user friendliness is a relative thing and voted as neutral, a total of 14% think that there is some kind of problem with the ATM machines’ interface and it is hard to use. This might lead to false transaction or error while transacting.

 3. Security Arrangement of ATM Booths:

To offer better service the security service at the ATM booths are absolutely necessary. That is why I asked whether or not they are satisfied with the security service at the ATM booths or not. The result is explained below with graphical presentation.

 Table 18: Satisfied with the security arrangements of ATM booths

45% strongly agreed and 40% agreed on the statement that the security arrangements in ATM booths are satisfactory. Only 2% of all the respondents think that more could be done to ensure security.

• Cross Tabulation of Questions asked regarding ATM Booths

I am satisfied with the location of ATM booths

Total

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

 Strongly AgreeOccupation.Private Employee

0

3

1

2

2

8

  Bank employee

3

5

7

13

2

30

  Businessman

1

7

6

11

3

28

Total

4

15

14

26

7

66

AgreeOccupation.Private Employee

3

3

6

4

16

  Bank employee

2

0

4

1

7

  Businessman

4

2

2

0

8

Total

9

5

12

5

31

NeutralOccupation.Bank employee

4

2

7

3

16

 Total

4

2

7

3

16

DisagreeOccupation.Bank employee

2

2

1

2

7

Total

2

2

1

2

7

Table 19: Cross tabulation among Occupation, Satisfaction level on the location of

ATM booths & Use of credit card for security

In the above cross tabulation we compared three questions and found out what is the level of satisfaction across different variables with respect to each other. We can see that the people who uses credit card for security, are bank employees and they are not satisfied with the location of the ATM booths. They need ATM booths that are easy for them to access and also secure.

Summery Findings on ATM Booths:

      Questions regarding ATM booths has Beta value of .411

      Significance (.000)

      Reliability of 0.850

Drawbacks:

      Enough ATM booths are not available

      Bank employees are getting fewer benefits from the ATM booths than other professionals

      Unfamiliar user interface of the ATM booths can lead to transaction error

Customer Satisfaction of Credit Cards of OBL

1. Reliability Test

 Table 20: Reliability test of dependent variable – Customer Satisfaction

ATM booths questions’ have Cronbach’s Alpha of .812, which is more than the minimum requirement 0.60. So, my questions under the dependent variable “Customer satisfaction” are internally consistent.

1. Mean Test

Table 21: Mean test of question asked regarding “Customer Satisfaction”

From the table above we can see that most of the respondents are satisfied with the credit card service. In all of the questions the mean value is below 3 which means that everyone has agree with all of the statement which resonate that the customer satisfaction is there. But there is still place for improvements.

• Overall Customer Satisfaction

In order to find out the overall satisfaction of the credit card holder of OBL I asked them whether or not they are satisfied with the credit card of One Bank Ltd with a liquored question. The result is analyzed and interpreted below.

 Table 22: Overall satisfaction of credit card holders of OBL

From above we can safely say that most (77%) of the customers are satisfied with service of the credit card of OBL while 8% of the total respondents are not satisfied with this service and more can be done to improve the service.

I can point out that if more ATM booths are installed throughout the whole city with better security and better customer service that troubleshoot all kind of problem with very efficiency then the credit card of OBL will have even brighter future and the accelerated growth that it is hoping to achieve.

Recommendations

Based on the survey analysis and worked inside ONE Bank Ltd.  as an intern and observing the holistic scenario, the following recommendations can be brought to the management of the company for future betterment:

• The card delivery time should not be more than a week. But it should not be less than 5 days. Because the possibility of incorrect assessment of the creditworthiness of the applicants would be very high then (Recommendation based on face to face conversation with the card holders while surveying).
• ATM facility is an advantage for the bank to provide ATM facility to its cardholders. OBL should increase the number of its ATM booths.
• In case of determining the charges and fees the bank should follow the least price strategy, at least initially, while entering the market, to attract new or retain existing customers. The charges may be gradually increased while staying competitive in the market.
• Customers should be offered occasional gifts and discounts, which can make the credit card more attractive and keep the consumer delighted. Besides, heavy marketing and promotional campaign should be conducted to popularize the product and make people aware of the services.
• OBL should publish and widely distribute Discount booklets so that they can attract customers’ attention. Wide and effective publicity should also be given through radio, television, newspapers and periodicals. Merchants should be also put within the purview of the advertisement campaign in future. Brochures containing various terms and conditions of credit card should be published both in English and Bengali and widely circulated.
• OBL should offer training programs, particularly on credit related electronic banking frequently for the suitable, painstaking officers of Card Division because the Division being a technical sector in the Banking industry, employees working here should have sufficient knowledge about the working of the whole system. The authority should also provide off the job training programs so that the employees might be capable enough of solving any impending problem. They should set long term strategies in this regard.

• The salary structure for the employees of the Card Division should be rationalized. If the management fails to consider the issue of appropriate pay scales, there is a strong likelihood that the Bank will lose some efficient and experienced employees. The policy should be to allow competitive salary and good incentives in order attract and retain excellence in service.
• Annual charge for credit cards should be sufficiently reduced so as to discourage surrender of cards. The charge for additional cards should also be reduced.
• Card Division should endeavor to provide better service to the cardholders outside Dhaka City. To achieve this objective they may consider creating an efficient and effective Card Division in each of the Bank’s main branches in the Divisional Headquarters outside Dhaka.
• As the number of delinquent cardholders is growing day by day, Card Division should reasonably increase manpower in recovery section. They should appoint an experienced lawyer on full time basis dealing with the critical cases. Commensurate with the growing card base more employees should be appointed to shoulder the increasing work load.
• Before issuing credit cards, Card Division should meticulously verify the applicant’s income from salary, status and other required particulars because many cardholders have a tendency to furnish erroneous information in their applications.
• OBL’s direct marketing effort must be implemented more precisely and elaborately to ensure maximum market coverage both for merchant and cardholders.
• Last but not the least; industrious and worthy employees of Card Division should be suitably rewarded. This will affect them psychologically and, at the end, will make them responsive, cost-effective and efficient resulting in increased productivity.

Conclusion

The system of payment through credit card has been gaining enormous popularity throughout the world. In ASIA, the growth of Banking in this sector is highest. It has a lot of potential in Bangladesh, too, and has already made considerable inroad into our economic domain. There is still a wide scope for substantial expansion of sales of credit cards.

OBL can capture a big chunk of the business by providing such services as to satisfy customer needs. Only a better and an effective and efficient work force under a dynamic management can achieve the objective. Better people means a better organization can flourish by as much as its people allow it. It is believed that if the recommendations laid down heretofore are followed, OBL can be a hunting ground of a great many potential customers.

Moreover, it is expected that Bangladesh will experience a heavy inflow of foreign companies investing in various sectors especially in IT and Gas & Oil Exploration and processing. This will give birth to various ancillary industries and services, which will ultimately increase the purchasing power of people. This factor enhances the chance of an upcoming growing population of the community who wants convenience of not carrying cash and the use credit card is the easiest way of doing so.

BIBLIOGRAPHY

1. References: Literature  

• Malhotra, Marketing Research: An Applied Orientation, pg- 267-268, 5^th edition.
• Newbold, Carlson & Thorne, Statistics for Business and Economics, pg-811, International edition.
• Newbold, Carlson & Thorne, Statistics for Business and Economics, pg-780-781, International edition.
• Newbold, Carlson & Thorne, Statistics for Business and Economics, pg-315-317, International edition.
• Newbold, Carlson & Thorne, Statistics for Business and Economics, pg-324, International edition.
• Credit Card Brochures and Pricing guides of Different Issuers.
• Brochures and Publications of OBL products.
• Annual Report of the year 2007-08 of OBL.
• Annual Report of the year 2009-10 of OBL.

2. References: Internet Sources/Websites   

• Accessible <http://www.onebankbd.com>
• Accessible <http://www.bangladesh-bank.org>
• Accessible <http://www.mastercard.com>
• Accessible <http://www.ebl.com>
• Accessible <http://www.bankasia.com>
• Accessible <http://www.dbbl.info>