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The need for this study being the impact of product development on bank performance was to determine the rate at which the performance of this product is helping the economic development an growth in the banking industry in the terms of employment, income, staff utilization and technology and serve as an advisory piece to Owns  of  banks as to how these product can be run to the benefit of the customers who patronize such  product. This research work is divided into five chapters. One deals with the introduction/background of the study, statement of problems, objectives of the study, research questions, scope of the study, significance of study, limitation of the study and delimitation of terms. Chapter four deals with presentation and interpretation of data. Chapter five deals with, summary of finding, conclusion and recommendation. For the purpose of the study, questionnaires were administered to both banks and customers.  Finally, suggestion were made to the bank on how the should establish a good management team for proper co-ordination and marketing of such products.




Title page                                                i

Approval page                                          ii

Dedication                                               iii

Acknowledgement                                     iv

Abstract                                                  v

Table of contents                                      vi




1.0  Introduction                                      1

1.1 Background of the study                            1

1.2 Statements of problems                      4

1.3 Objectives of the study                       6

1.4 Research questions                            7

1.5  Significance of the study                            9

1.6 Scope of the study                             10

1.7 Limitation of the study                       10

1.8  Definition of terms                             11




2.0  LITERATURE REVIEW                            16

2.1 Historically background of banks

operations in Nigeria                         16

2.2 New product as a business strategy             22

2.3 The nature and structure of

banks new product                             26

2.4 Stage in production process                29

2.5 factors that enhance the effectiveness

and efficiency of a new product            33

2.6 Problems indicators of bank product     35





3.0 Research methodology                              37

3.1 Introduction                                             37

3.2  Research design                                        37

3.3 Population and sampling techniques            38

3.4 Sources of data                                        38

3.5 Method of data collection instrument           41

3.6 Techniques for data analysis                       42




4.0 Data presentation and analysis                   43

4.1 Introduction                                             43

4.2 Presentation of data                                         43





5.0 Summary, conclusion and recommendation   51

5.1 Summary of findings                                         51

5.2 Conclusion                                                53

5.3 Recommendations                                      55







Over the years, it has been identify that banks form a significant part of the financial institutions of modern society, because of this structure, and influence on an economy. Banks through their basic roles of researcher mobilization and allocation fro efficient investment play a great role in economic developed of any nation.

According to Nnolin (2001) the stock in trade of banks in Nigerian in the provision of financial services like over draft  facilities, discounting bills of exchange, purchasing and selling securities etc to their customers.

There was time when banks did not see the need for providing adequate services and encourage patronage. Maybe, there was no need for such activities some year’s age, due to the fact that bankers were few and competition was very low. Today, the level of competition   between banks is increasing as in the level of financial competition and sophistication of other banking needs by customers. Olupitan (2002) pointed out the banking in Nigerian is taste becoming not only very competitive but also sophisticated.

The banking industry has zone beyond mere acceptance of deposits, and giving out loans to its customers. Banks has now indicted various new products into the industry. The stimulate is traced to the unprecedented rise in the number of banks between 1992 to 2001 which resulted into creating a very competitive banking atmosphere among banks; Olupitan (2002) also note that in the early days of banking in Nigeria. The use of banks services was limited to government, business houses and for ailment in the society. Now, in a bid to line customers to them many banks introduced new product into banking industry.

New products of commercials banks can therefore to seen in the light of various services offered by banks to the generality of the public including firms, industries, organization and the government. The product are usually service oriented, designed to facilitate financial transaction as it relates to opening accounts and mobilization of fund from the surplus unit to the deficit which in regarded as the major function banks. Although a lot of banks use new product development as a growth strategy, some dread it because of the loses they incurs. If the product fail, however, banks go into developing new product because they want to maintain their position in the industry expand sales, meet customers demand and more importantly to maintain a profit level. Diamond bank for example tool other banks by surprise when they came up with “diamond integrate banking services” a product for quick encashment of cheques in any diamond bank branch nationwide first bank also introduce “western union money transfer” a product for quick enables fund to transferred minutes from anywhere in the world. UBA (united bank for African) plc introduce into the banking industry UBA easy card.



       In the development  countries, banks were generally made financial transactions simpler them ever before, bills can easily be settled without physical cash exchanging hands funds can be transferred through electronic media in minutes. Financial deals are concluded in seconds through banks as intermediates and banking profession is given its right place in society. Bank home in Nigeria, the banking industry is becoming dynamic; banks are borrowing a leaf from their foreign counter parts by introducing some of this product into the industry.

Nigeria banks face one of their greatest challenges in the area of customers’ services. The unlimited aim of any organization is to constantly satisfy the need and wants of its customers with the right product at the right price using the right promotion and marking its available in the right place at the right time. The new product is described as the “reason d’ atre” of business enterprise. The issue there is that much interest is not given to these new products by the customer because of ignorance and the fear of high incidence of distress in banking industry. If fraction have the notion that these new product are associated with exorbitant bank changes while others are worried about the delay in banking services and the frequency cases of fraud in the banking industry.

The research therefore is propelled by the need expose customers to the various new products rendered by banks, as well as various cause of customer  poor perception of these new product.

To this end, effort world be made conduct empirical test among customers of bank’s new product of the relationship between their perception of new product of bank on are hand and the loss of patronage of new banks product on the other hand the relationship between customers disposable income and the level of patronage of new bank product on the other hand. The relationship between customers’ disposable income and the level of patronage of banking services would be revised.

Attempts will be made to identify major factors responsible for customer dissatisfaction with new bank process and also to ascertain the extent to which bank customers are assisted with near bank product offering



       The objectives of the study are;

  1. To find out how new product development is a strategy used by bank to increase profitability and market share
  2. Whether if there is any reasons for introducing into the market.
  3. To know the extent new product affects customer’s patronage.
  4. To find the important of new product in enhancing the country’s technological capabilities in banking services
  5. To ascertion extent new product affect the bank profit level
  6. To know technological area in banking as it enhances by the new products been introduce into the market.
  7. To find out factors contribution to customers dissatisfaction with new products in the bank
  8. To find out the extent customer have been banking with the bank.
  9. To find out problems customer encountered in the banking industry towards the new product.



  1. The new product strategies used by banks increase profitability and market share.
  2. Are there reasons fro introducing new produces into the banking industry?
  3. What are the means of introducing new products into the banking industry?
  4. Of what extents have new product effect customer’s patronage?
  5. What is the extents new product affects the banks profit level?
  6. What are the impacts of new product in enhancing the country technological capabilities in banking services?
  7. What are the technological areas in banking enhance by the new product introduction?
  8. What are the factors contributing to customer’s dissatisfaction with the new product in the bank?
  9. To what have customer been banking with bank
  10. What are the problems the customer encountered with banking industry about the new product?




  1. Serious though has never been given to the inductions of new products by banks in Nigeria. Therefore, information about these products will serve as an advisory piece to proprietors of banks as to how these products can be run. Whether or not to continue with one particular type of products or the other and how advertisement expenses can be reduced or increased while keeping a check on the profit margin.
  2. Also, people especially business will be better informed on what these precuts are, how it can facilities their financial transaction and how much risk is reduced through their use
  3. Further, this study will help to determine the rate at which the introduction of these new products are helping the economic development and growth in the banking industry in terms of employment, income, staff utilization and technology
  4. Finally, this will serve as a spring board to further studies on related subject thereby creating room for improvement in the banking industry one way or the other and touch the live of mankind in general.

The impact of new product in banks performance cover all those services which banks introduced to their operations which facilitates them in their transaction.  



Lack of finance and time constraint made it impossible for attainment of some facts needed for their research work.

Some of the bank officers who are in position to give information were not being to open and  free releasing or complying with the researcher.

The researcher find it difficult to go to every bank to get information for the research work compound with the time factor and finance to the researcher at times the researcher may be in the lecture room receiving lecturers which might lead not to get more information about this research work.

Despite all these problems, the researcher was able to conclude the research work with fact.



  1. BANK: A bank can be defined as a financial house established for the purpose of accepting deposits and lending out funds in addition to other serves. It can also be any person whop carries on banking business and this includes a commercial bank, acceptance house, discount house and financial institution.
  2. BANK CUSTOMER: Is the person who must have open an account with the bank and have at least one transaction on the account.
  3. COMMERCIAL BANK: It can be defined as a financial institution which deals in money and credit and which receives deposit from public, institutions and organization some of which are replaceable on demand by cheque.
  4. PERCEPTION: This is the compels process by which people receive, select, organized and interpret sensory stimulation (information relating to the product) into a meaningful picture.
  5. NEW PRODUCT: It is the modification of the evading product on innovation or a complete invention of entirely new product or concept.
  6. PROFILE LEVEL: This is defined as difference between total bank revenue and expenditures measure in naira per year.
  7. EFFICIENCY: This is the degree of effectiveness with which something is done to produce a satisfactory result without wasting resources or time.
  8. PRODUCT POSITIONING: This is the activities that are directed towards trying to create and maintain a firm intended product concept in customer mind.
  9. PRODUCT: These are those services rendered to the customer by a bank for the satisfaction of a customer. It is also a tangible attributes the are assembled into an identifiable from the customer
  10. ADVERTISMENT: This is non personal period information to create awareness to stimulate the minds of the customers to make them by the product
  11. BILL: This are the unconditional order of writing address from one person to another, sign by the person giving it requiring the person to when is address to buy at a fixed or determinable future time a sum certain in money to the order of a named person or the bearer.
  12.  SMART PAY CONSORTIUM:  This is accepted at over two locating nation wide.
  13. TRAVELLER CHEQUES: This is a kind of cheque provided and process by the bank to their customer for easy foreign trips with a basis traveling allowance (where applicable0
  14. PRODUCT LIFE STYLE: These are those processes and stages a product goes through before it is developed are launched into the mark
  15. BANK DENSITY: This is the relationship between the number of banks in an area and the total population in a geographic area. This is used to determine how the quality of a product or services would affect the density of the geographical area, if its density is low or high
  16. CURRENT ACCOUNT: This is an account where a customer credit balance is withdrawal on demand by the issue of cheques.


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