Brand Equity and Customer Satisfaction of E-Banking Account Holders of Commercial Banks in Nairobi City County, Kenya.
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Date
2025-11
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Kenyatta University
Abstract
Customer satisfaction in e-banking in Kenya has been on the decline despite scholarly research contributions. In 2015 customer satisfaction in e-banking was approximately at 64%, in 2016 trust was at 78% with only 13% reporting an experience with some form of online fraud attempts while using e-banking platforms. Unfortunately, in 2017 satisfaction in e- banking dropped to 50% and trust to 66.7% while in 2020 satisfaction in e-banking was a meagre 33%. The study aimed at establishing the effect of brand equity on customer satisfaction of e-banking account holders of commercial banks in Nairobi City, Kenya. The specific objectives of the study was to establish the effect of brand awareness, perceived quality and brand associations on customer satisfaction of e-banking account holders in commercial banks in Nairobi City, Kenya. The study also assessed the mediating effect of customer trust and the moderating effect of customer demographics on brand equity and customer satisfaction. The study was anchored on Aaker’s brand equity model which was complemented by; the signalling theory, expectancy value and disconfirmation paradigm theory guided the study. The research philosophy was positivism with descriptive and explanatory research design. This was because positivism allowed for quantifying of qualitative data, explanatory allowed for examination of causal relationships, while descriptive allowed comparisons of study variable’s response by the study population. The study context was Nairobi County which has 564 bank brand branches, allowing access to variety of customer demographics and all bank tiers. The target population was 66,315,699(Central Bank of Kenya, 2021), with Nairobi accounting for 40% hence 26,040,000 account holders from commercial banks in Nairobi, of which 99.5% were subscribers of e-banking. Sampling took the form of stratified, disproportionate stratified and random sampling techniques. A sample of 400 respondents was selected. Primary data was used and collected using questionnaires disseminated using a survey monkey application and/or electronic mail with questions on a 5- and 10-point Likert scale. Content and construct validity was examined, by a pilot test and use of confirmatory factor analysis with a loading of 0.6. Reliability of the research instrument was determined by Cronbach’s’ Alpha coefficient, which yielded 0.960, 0.7 been excellent reliability. Qualitative data was analysed through content analysis. Quantitative data was analysed using descriptive and inferential statistics. To ascertain assumptions of multiple linear regressions diagnostic tests for normality, outliers, linearity, multicollinearity and homogeneity of variance were conducted. Simple linear and multiple linear regression were conducted to assess the relationships between independent, mediating, moderating and dependent variables. The hypotheses were tested using a P-value <0.05 to assess statistical significance while value of adjusted R2 measured amount of variation in customer satisfaction that was explained by brand equity variables. The relationship between brand equity on customer satisfaction of e-banking account holders in commercial banks in Nairobi City County, was found to be statistically significant at 5% significance level. In addition, customer demographic variable; income had a moderating effect on the relationship between brand equity and customer satisfaction while customer trust had a statistically significant mediating effect on the relationship between brand equity and customer satisfaction at 95% confidence level. The study concluded that brand equity has a positive and statistically significant effect on customer satisfaction of e- banking account holders in commercial banks in Nairobi City County. The Banks and CBK as the regulator can use the findings of this study to formulate brand equity related policies that enhance customer satisfaction of e-banking account holders in commercial banks in Nairobi City County. The study contributes to the pool of knowledge and suggests research gaps realized from findings and makes recommendations on possible research areas.
Description
A Thesis Submitted to the School of Business in Partial Fulfillment of the Requirements for the Award of Degree of Doctor of Philosophy in Business Administration (Marketing) of Kenyatta University. November, 2025
Supervisor
Reuben Njuguna
John Mutinda