The impact of Digitalization in Gaza’s banking sector on Customer satisfaction: Considering

Palestinian national culture as a moderator variable

9 May 2021
Abstract:
The key purpose of this study is to investigate the impact of Digitalization in Gaza’s banking
sector on customer satisfaction: Considering Palestinian national culture as a moderator
variable and how does Palestinian national culture moderate the relationship between the two
variables. Whereas, an online survey was conducted to examine the study's objectives by
applying statistical systems. The results showed that most customers are satisfied with using
digital banking services, in addition to the study's findings that declared that Palestinian
national culture negatively affected the relationship between digitalization and customer
satisfaction. This research paper recommends Gaza’s banks to enhance the use of digital
banking services, direct customers to use these services instead of traditional methods, and
banks should provide customers with superior services in order to attain customer satisfaction
so they can recommend other potential customers to use the bank's digital banking services.
Keywords: Digitalization; Digital banking; Customer satisfaction; Palestinian national culture;
Banking sector in Gaza strip.

I. Introduction
Digitalization is considered as one of main factors that affects modern economy growth, since
digitalization impacts everything by taking control of your customer-experience ecosystem
through remodelling your business model to be a digital business form that can flourish the
banking sector if it was adapted well. Nowadays, traditional banking strategies are inadequate
in addressing the challenges arising from the emergence of new innovative technologies in the
financial market and the banking industry. Similarly, with how Covid-19 pandemic affected
the banking sector and thereupon digitalization has become a strategic priority for the banking
industry in the world. It is the process of moving into a digital business and the integration of
digital technologies into daily life (Gartner, 2016). The use of digital technologies improves
the ways of interaction between banks, government, and potential customers (Thalassinos &
Thalassinos, 2018). Furthermore, Digitalization has given banks more opportunities to reach
potential customers and, at the same time, has enabled them to improve their services and
enhance customer's satisfaction. Customer's satisfaction is measured by three areas: how well
banks meet their needs; the ease of doing business, and how enjoyable it is. Four objectives
were highlighted in this bachelor dissertation: to define the concept of digitalization and its
importance in the banking sector, to investigate how does the use of digitalization in the
banking sector influence customer satisfaction, to identify the benefits and obstacles of
implementing digital banking services and to examine how Palestinian national culture operate
as a moderator variable when implementing digital banking system in Gaza. In fact, the
adoption of digital banking service is increasing in Gaza Strip especially with the latest world-
wide crisis COVID-19 that remodelled businesses to operate digitally. Although It became a
superior opportunity for the banking sector to expand their operations by adopting a digital

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platform to aid their customers and this could be so by promoting this platform in a suitable
way to meet their needs during this pandemic and to generate profits instead of loss.

II. Research Review and Theoretical Framework

2.1 Digital Banking:

Digital banking is an internet-based platform in which customers can choose and use
different banking services such as making deposits and paying bills (Pikkarainen et al., 2004).
Aladwani (2001) also mentioned that digitalization means: banks can provide faster, cheaper,
easier, and reliable services to their customers. While Amit and Zott (2001) noted that
Digitalization is considered as an ongoing alteration of contemporary society and constitutes
many components of business by transforming from “analogue” to “digital” (shift from cash
to electronic money) and the facilitation of modern patterns of value creation (e.g.,
availability and transparency). However, Okiro and Ndungu (2013) announced that digital
banking technology plays an important role in improving the standards of service delivery in
the financial sector. So, the Digitalization strategy should gain a high priority by banks
considering indirect impacts from the financial crisis, changing the behaviour of customers,
and strict government regulations that require them to integrate such a strategy.
Traditionally banks have performed their businesses with customers throughout face-to-face
interactions. Nowadays, banks have increased their use of digital platforms as supplementary
channels to branch offices to offer their products and services to customers (Capgemini and
Efma, 2016). These supplementary channels enable banks to provide more personalized
services anytime and anywhere more effectively (Deutsche Bank 2015). Today, customers
are using more self-service options, which are more convenient and faster. (Vasya and
Patrick, 2006). Throughout our research we can ascertain that Digital banking services can
be: Time saving in the matter that customers can finish their transactions without physically
visiting a branch, Convenient ( as funds and payments can be transferred without queuing or
writing out cheques, real-time account balances and information are available at the touch of
a few buttons thus, making banking transactions faster, easier, and more efficient.) ,
Accessible in which Services are available seven days a week, twenty-four hours a day,
Secured and safe option ( Customers can choose their own PIN, preventing unauthorized
access to their accounts, also internet banking services reduce the need to carry large amounts
of cash.) and a mean of immediate Confirmation since Transactions are executed and
confirmed almost immediately. On the other hand, It can be also observed as: Costly due to
the fact Digital banking has certain system requirements such as accessibility to computers,
computer type, memory, screen resolution, and browsers, which might be proven to be an
additional cost to the customer in comparison with traditional banking methods or other
digital banking services , Cash availability that restrain customers from making deposits or
withdrawals when using Digital banking platforms, Security concerns that can be noted as a
threat, and Transaction issues ( Sometimes a face-to-face contact is required to complete
complex transactions and address complicated problems. and lack of personal relationships
between the customer and the bank's employee would not lead to instant feedback.)
2.1.1 Security and Privacy:
Security and privacy are considered as barriers that force customers to reconsider using
digital banking services whereas, Flavián and Guinalíu (2006) defined privacy as the ability
of individuals to manage the terms and situations under which their personal data is gathered

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and saved. This is formulated to guarantee that banking transaction records and the security
of customer's account data are not shared with any third party ((Yang and Fang, 2004; Saha
and Zhao, 2005). Also, Security is another crucial determinant in customer's willingness to
utilize the bank's digital platforms, hence Security could be defined as a technique of
protection to assure the customer's safety and to intercept hackers from violating customer's
privacy (Dixit and Datta, 2010).
2.1.2 Ease of use:
Davis (1986) mentioned that the Technology Acceptance Model (TAM) shows the power of
ease of use in technology adoption. Ease of use is defined by Davis (1989) as the degree to
which a person believes that using a specific service would be free of effort. Also, Dabholkar
et al., (1996) said that most people are concerned about ease of use to be straightforward and
effortless. Ease of use is a foremost and influential factor of customer satisfaction (Al-dweeri
et al., 2017). In addition, (Ainin et al., 2005) commented that users of online banking
continuously search for easy and smooth methods of facilitating online transactions.
2.1.3 Speed of transactions:
Electronic banking is an essential element of modern banking, this modern banking is the
reason for customer satisfaction due to the quick response, security, reliability, and speedy
transactions of modern banking services (Premalatha and Sundaram, 2012). Online banking
service helps customers to perform many transactions quickly and anytime.
Additionally, Patricio et al., (2003) stated that the speed of operations, ease of use, and
accessibility are the strong factors of customer satisfaction.
2.1.4 Usefulness:
The Technology Adoption Model of Davis showed that usefulness of any system increases its
acceptance. Davis (1989) defined Usefulness as the degree to which a person believes that
using a particular system will increase their performance. Individuals decide to use or not use
a service to the extent they believe it will help them perform their job better. Davis (1989)
popularized this idea, and it was extensively researched by Adams et al. (1992), Igbaria et al.
(1994), and Fenech (1998).
2.2 Customer satisfaction:
Customer satisfaction is a measure of how products or services meet or exceed customer
expectations. In a highly competitive market as same as the banking industry, there are various
strategies aimed at retaining, meeting or exceeding customers’ expectations.
Saha and Zhao (2005) defined customer satisfaction as a collection of results of perception,
appraisal, and psychological reactions to the consumption experience with a product or service.
It is a result of a cognitive and an effective evaluation where some consumption standard is
compared to the perceived performance. Thus, if the performance perceived is less than
expected, customers will be dissatisfied and if the perceived performance exceeds expectations
customers will be satisfied and this would lead to positive outcomes (Saha and Zhao, 2005;
Eppie, 2007). A satisfied customer tends to be loyal (Keiningham et al., 2007) takes less time,
is less sensitive to prices (Gan et al., 2006), and pays less attention to competitors advertising
(Stum and Thiry, 1991). Many researchers defined customer satisfaction, for instance, Oliver
(1980) defined customer satisfaction as the full meeting customer's expectations. While Kotler
(2000) described satisfaction as a customer's feeling of happiness or disappointment resulting
from comparing the customer's perception of product or service received with the customer
expectation. Customer satisfaction is based on meeting or exceeding the expectations of the

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customers. (Gee et. al, 2008). Based on Kotler's (2012) definition, Customer satisfaction
includes customer creation, customer maintenance, and customer retention. Kotler et. al, (2013)
also described customer satisfaction as how the customer's expectations are met.
2.2.1 Customer experience:
Customer experience is the individual and internal customer response as a result of any direct
or indirect interaction with a firm (Meyer and Schwager, 2007). It is the entire customer’s
experience that is related to the brand (Schmitt, 2010). Also, Sirapracha and Tocquer (2012)
uttered that customer experience is the outcome of customer interaction with the
organization, including the interaction with the staff, self-service technologies, and service
environment. So, businesses should formulate customer-centric strategies across all
departments of the organization, embracing technological advancement to increase the value
of its customer, get new customers, and retain the existing customers (Peppers and Rogers,
2016).
2.2.2 Customer retention:
Digital banking provides customers the possibility of enjoying banking services from the
comfort of their houses and offices. Customers can purchase goods by placing orders from the
internet, instruct their banks to pay the dealer the invoice amount involved, and the products
are delivered to the destination where the buyer wants. According to Power and Associates
(2009) customer retention is defined as the degree to which a customer shows repeat purchasing
and price tolerance behaviour to a product or service provider and possesses a positive
attitudinal and cognitive disposition. Online channels may increase customer switching costs
and retention either because of increased product utilization or because of implicit switching
costs such as those created by learning to use a new technology (Chen and Hitt, 2002).
2.2.3 Customer recommendation:
Customer recommendation can be either positive or negative with a correlation with the
customer’s satisfaction (Anderson et al., 1994). Recommendation is an influencing element
that can reduce customer alternatives, make customer’s choice easier in which in a banking
environment can be revenue collection and cost reduction, especially in customer acquisition
(Rosen and Olshavsky, 1987).
2.3 Digital Banking and Customer satisfaction:
The changing customer behaviour is often described as a major driver of digitalization,
Customers have increased the influence on the way banks operate in digitalization.
Digitalization is granting traditional banks a chance to deepen customer satisfaction and
loyalty. By using more digitalized platforms, the customers’ involvement will increase in
which will create a more loyal customer base (Nath et al., 2001). In addition, many studies
demonstrated that a bank’s profitability is associated with customer loyalty and retention
(Clemes et al., 2010). Distinctive studies on customer satisfaction and adoption of
digitalization have shown that several factors are influencing the consumer’s satisfaction and
customer retention towards digitalization in the banking sector such as security & privacy,
ease of use, speed of transactions, and usefulness. To the extent, digital banking adoption is
concerned about security, trust, and privacy issues that have been outlined as extremely
important ones from the consumer’s point of view (Benamati and Serva 2007). Additionally,
Patricio et al., (2003) stated that the speed of operations, ease of use, and accessibility are the
principal factors of customer satisfaction. Whilst Qureshi et al., (2008) recited that
usefulness, security, and privacy are the most influencing factors to accept online banking.

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On the other hand, Khan (2010) added that the low level of security and technical failures of
the banking services are strong dimensions of dissatisfaction.

2.4 Palestinian National Culture:

Palestinian National culture can be considered as a moderator variable in which banks need to
modify and adjust new digital platforms to their business models due to the changing customer
behaviour and shift in demand towards digital banking services. These cultural factors
(religion, education, language, …etc.) tend to have an influence on customer's satisfaction and
the stability of the banking industry if they were well acknowledged. Several studies indicated
that language influences customer's usage of these digital banking platforms, whereas
Palestine's and Gaza's common language is Arabic and therefore any other language used will
lead to ineffective communication and customer's dissatisfaction. On the other hand, education
plays a significant role in the adoption of digitalization considering that Palestinians (Gazans)
are well-educated and familiar with technology advancements. Moreover, there may be an
issue regarding this national cultural aspect such as: customers' business culture is "more
personal and less formal culture" where personal contact is merely face-to-face communication
in providing assistance and accessing banking transactions because of their suspicion about
digital banking services. In addition, cultural diversity, ethnicity, gender, customs, values and
traditions are said to be factors that can be measured through interaction and association.

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Research model:

Independent Variables Dependent Variables

Digitalization Customer Satisfaction

- Customer experience.
Security and Privacy
- Customer retention.

Ease of use - Customer

recommendation.
Speed of transactions

Usefulness

Palestinian National
Culture
Moderating variable
Figure (1): Research model
Source: Muluka (2015), Venkathaialam and Abdulwahab (2017).
2.5 Previous studies:
The study of El Talla et.al (2019) aimed to identify the electronic banking services in Palestine
from the customer point of view. The study results showed that there is a moderate degree of
efficiency of electronic banking services provided in the banks operating in Palestine from the
customer perspective. The study of Sulaiman and Abdelkarim (2019) aimed to investigate the
correlation between electronic banking services in Palestine and customer satisfaction. The
study results include: that there is a significant positive correlation between electronic banking
strategies and customer satisfaction, it showed that all the five independent variables (ease of
use, reliability, information security and privacy, cost and fees, and availability) have a
significant positive effect on customer satisfaction. The study of Salem et.al (2019) aimed to
identify the factors that affect Palestinian customers’ use of online banking services. The results
of the study showed that the use of online banking services is affected, respectively, by the
technological leadership, e-trust, e-loyalty, customers’ value for online personalization,
customers’ concern for privacy, and propensity of technology adoption.
The study of Pawar and Al-Raddadi (2019) aimed to investigate the relationship between the
adoption of digitization and creating competitive advantage along with customer satisfaction
in Riyadh bank. The study's results showed that there is a positive relationship between

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digitalization and customer satisfaction and creating a competitive advantage in the banking
industry, and it indicated that the level of security and privacy is a major concern for the
customers especially for users of e-banking services through the website and applications of
smartphones due to their fear of penetration of internet networks. The study of Anada et.al
(2020) aimed to examine the factors that influence the adoption of digital banking services by
retail banking customers in Oman based on the technology acceptance model [TAM]. The
result showed that awareness, web features, and perceived usefulness have a significant
positive effect on the adoption of digital banking.
The study of Muluka (2015): This study aimed to investigate the influence of digital banking
on customer satisfaction case of National Bank of Kenya Bungoma County. The findings of
this study concluded that there is a strong positive correlation between speed of transactions,
accessibility, adaptability of digital banking and customer satisfaction. And that there is a
negative significant relationship between affordability and customer satisfaction. The Study of
Venkathaialam and Abdulwahab (2017) aimed to examine the impact of digitalization of retail
banks in Malaysia on customer experience. The study findings revealed that Perceived ease of
use, Security and privacy, Customer’s attitude towards digital banking tools, digital efficacy of
customers towards digital banking tools, Government support and Customer’s perceived
behavioural control on digital banking have positive impact on customer experience while, the
perceived usefulness, Technology advancement and support and Customer’s intent of using
digital banking platform have negative impact on customer experience. The Study of Mbama
and Ezepue (2018) aimed to investigate customers’ perceptions of digital banking, customer
experience, satisfaction, loyalty, and financial performance in UK banks. The results of this
study have proven that there is a significant relationship between customer experience,
satisfaction, and loyalty. The study showed that the service quality, functional quality,
perceived value, employee-customer engagement, perceived usability, and perceived risk are
the key factors that determine customer’s experience in digital banking. Lastly, Hadid et.al
(2020) research paper scrutinised the relationship between digital banking service quality and
customer satisfaction in Malaysian banks, and to determine the key factors of digital banking
service quality and their positive effect on customers satisfaction in Malaysian Banks. Based
on the research paper's finding, major factors such as reliability, tangibility, responsiveness,
and assurance were spotted to have a significant positive influence on customer satisfaction
and loyalty while empathy had positive but insignificant relationship with the customer
satisfaction and loyalty in banking sector in Malaysia.
2.6 Gaza’s banking sector:
Gaza's banking sector used to perform in unstable political, economic, and social
environment. Therefore, there was a high risk for Gaza's banks to operate, adopt new and
digitalized technologies or even adapt with rapid technological advancements. Yet Gaza's
banking industry has grown dramatically since 1994 and plays an important role in the
economy with a positive development impact as evidenced by the increase in the number of
banks and branches and the growth of deposits and loans. Furthermore, all banks in Gaza are
regulated by the Palestinian Monetary Authority (PMA) that was established in late 1994
with the responsibility to license, supervise and monitor banks. According to PIPA, the

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banking industry in Gaza has a total number of 11 banks (5 foreign banks and 6 local banks)
with 22 branches and 15 commercial banks. During 2019, the banking industry has
experienced many continuous developments (e.g., modernizing and establishing new systems
to keep pace with global developments). Major banks relied on modern digitalized financial
systems, especially in the field of electronic payment systems and tools that contributed to
raising the efficiency of the performance of the banking sector. Banks promote various digital
services that can be in the form of: Mobile banking (launching bank mobile applications to
help customers manage and view their account information, transfer money locally and
internationally, pay bills, charge mobile phones, manage credit cards, recharge cash cards,
and countless electronic payments), diverse Bank cards, Automated Teller Machines (ATM),
SMS services, Interactive Voice Response (IVR) services and Automated Payment Services
(APS). Furthermore, Pal Pay Company regulates Palestine's banks in general and is
subsidiary of Bank of Palestine group that was constituted in 2010 as the leading platform of
electronic payments in Palestine. Pal Pay operates in the field of electronic payments and
collection of various service categories.
III. Research Design
3.1 Sample:
This study employs an online survey with design measurement of five-point Likert scale from
"strongly disagree "to "strongly agree". The study sample consists of Gaza's bank customers
who primarily and actively use the digital banking services. Whereas individuals of this
research's sample were selected by using a simple random sample as 120 questionnaires were
distributed and 100 of them were retrieved with a percentage of 83.3%.
3.2 Measures:
The Digitalization as independent factor was measured by eighteen Likert type items divided
into four dimensions (Security and privacy, Ease of use, Speed of transaction, and
Usefulness). The dependent factor Customer satisfaction was measured by thirteen Likert
type items, finally the Palestinian national culture as a moderating factor was moulded in one
dimension and consists of seven Likert type items.
IV. Findings
Table (1) shows that the results of Dimensions Analysis of Variables of the study, which
illustrates that the agreement level on these Dimensions was high. Where the means of
Digitalization dimensions represented in “Security and Privacy” (M=2.65, RII=53.0%, SD
=0.37), “Ease of Use” (M=4.09, RII=82.0%, SD =0.61), "Speed of Transaction" (M = 2.70,
RII = 54.0%, SD = 0.23), and "Usefulness" (M=3.89, RII=78.0%, SD =0.48). Whereas the
moderator variable " Palestinian National Culture" was computed with (M = 2.64, RII = 53.0%,
SD = 0.31), and the total degree of agreement on "Customer satisfaction" construct was with
(M=2.93, RII=59.0%, SD=0.26). and figure (2) displays these results in a bar chart.

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Table (1): Dimensions Analysis of Variables of the Study

Dimensions M RII % SD R

Digitalization 3.17 63% 0.28

Independent

Security and Privacy 2.65 53% 0.37 3

Ease of Use 4.09 82% 0.61 1
Speed of Transaction 2.12 42% 0.20 4
Usefulness 3.64 73% 0.43 2
Moderator Palestinian National Culture 2.64 53% 0.31
Dependent Customer satisfaction 2.93 59% 0.26
Hint: M=Mean of answers, RII=Relative Importance Index ((Mean/5) *100%), SD=Standard
Deviation, R: rank.
Figure (2)

4.1 Hypotheses Testing: In order to test our hypotheses, this study employed a statistical
package of social science (SPSS) to analyse data by Frequencies and Percentages to review
the study’s sample , Mean of answers , RII-Relative , Standard Deviation , Cronbach’s Alpha
and Correlation Coefficients through multiple Regression analysis and Regression
Coefficient that were undertaken to scrutinise " the impact of Digitalization in the banking
sector on Customer satisfaction : Considering Palestinian national culture as a moderator
variable". Moreover, Python 3 was specifically used to interpret the hierarchal linear
regression.
4.2 The correlation Coefficients:
The following tables show the correlation coefficient for all items in the dimensions of
questionnaire. The p-values (Sig.) are less than 0.05, so the correlation coefficients for all

9
other items are significant at α = 0.05, so it can be said that the items of these dimensions are
consistent and valid to be measuring what it was set to.
Table (2): Correlation coefficient for Items of “Digitalization in the banking sector on
Customer satisfaction” dimension

Digitalization
(1) Security and privacy (2) Ease of use (3 Speed of transaction
Items R Sig. Items R Sig. Items R Sig.
A1 0.271** 0.006 B1 0.774** 0.000 C1 0.655** 0.000
A2 0.467** 0.000 B2 0.683** 0.000 C2 0.454** 0.000
A3 0.432** 0.000 B3 0.821** 0.000 C3 0.324** 0.000
A4 0.627** 0.000 B4 0.659** 0.000
A5 0.347** 0.000 B5 0.600** 0.000

(4) Usefulness Customer satisfaction

Items R Sig. Items R Sig. Items R Sig.
D1 0.856** 0.000 F1 0.491** 0.000 F7 0.483** 0.000
D2 0.842** 0.000 F2 0.658** 0.000 F8 0.954** 0.000
D3 0.852** 0.000 F3 0.650** 0.000 F9 0.442** 0.000
D4 0.584** 0.000 F4 0.397** 0.000 F10 0.512** 0.000
F5 0.640** 0.000 F11 0.263** 0.006
F6 0.549** 0.000 F12 0.514** 0.000
F13 0.299** 0.003
Palestinian
National Culture
Items R Sig. Items R Sig.
E1 0.653** 0.000 E6 0.555** 0.000
E2 0.596** 0.000 E7 0.409** 0.000
E3 0.625** 0.000
E4 0.434** 0.000
E5 0.568** 0.000

*Correlation is significant at the level 0.05 (2-tailed).

4.3 Analysis:
i. First hypothesis stated that "Digitalization has significant statistical implications in
the banking sector on Customer satisfaction at level 0.05". Therefore, this
hypothesis divided into four sub-hypotheses, H1.1: The Security and Privacy has
significant statistical implications on customer satisfaction in in the Gaza strip at level
0.05, H1.2: Ease of use has significant statistical implications on customer
satisfaction in the Gaza strip at level 0.05, H1.3: The Speed of transaction has
significant statistical implications on customer satisfaction in the Gaza strip at level
0.05, H1.4: Usefulness has significant statistical implications on customer satisfaction
in the Gaza strip at level 0.05, This hypothesis was tested using regression analysis.

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 Table (3): Effect of Digitalization on Customer satisfaction.
Determination
Independent Regression Coefficients
Coefficient F Sig
Variable
B t Sig. R-square
(constant) 1.394* 4.139 0.000
0.122* 2.050 0.043
Security and privacy

0.141* 3.512 0.001

Ease of use 0.467 20.784 0.000
0.056 0.524 0.601
Speed of transaction

0.209* 3.930 0.000

usefulness

- First sub-Hypothesis: The hypothesis stated that "Security and privacy has significant
statistical implications in the banking sector on Customer satisfaction at level 0.05"., This
hypothesis was tested using regression analysis. Table (3) illustrates the result of the first sub
hypothesis, which indicates that the Regression coefficient of independent variable " Security
and privacy " was (0.122) and the significance level was 0.043 and it is less than 0.05,
accordingly we can note that there is a positive significant impact at the 0.05 level of "
Security and privacy " on Customer satisfaction.
- Second sub-Hypothesis: The hypothesis stated that " Ease of use has significant statistical
implications in the banking sector on Customer satisfaction at level 0.05". This hypothesis
was tested using regression analysis. Table (3) shows the result of the second sub hypothesis,
which indicates that the Regression coefficient of independent variable " Ease of use " was
(0.141) and the significance level was 0.001 and it is less than 0.05, so we can note that there
is a positive significant impact at the 0.05 level of " Ease of use " on Customer satisfaction.
- Third sub-Hypothesis: The hypothesis stated that " Speed of transaction has significant
statistical implications in the banking sector on Customer satisfaction at level 0.05". This
hypothesis was tested using regression analysis. Table (3) illustrates the result of the third sub
hypothesis, which indicates that the Regression coefficient of independent variable " Speed of
transaction" was (0.056) and the significance level was 0.601 and it is greater than 0.05,
therefore we can indicate that there is no significant impact at the 0.05 level of " Speed of
transaction " on Customer satisfaction.
-Forth sub-Hypothesis: The hypothesis stated that "Usefulness has significant statistical
implications in the banking sector on Customer satisfaction at level 0.05". This hypothesis
was tested using regression analysis. Table (3) illustrates the result of the four-sub
hypothesis, which indicates that the Regression coefficient of independent variable "
Usefulness " was (0.209) and the significance level was 0.000 and it is less than 0.05,
moreover we can state that there is a positive significant impact at the 0.05 level of "
Usefulness " on Customer satisfaction.

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In general, Table (3) shows the result of the main hypothesis, which indicates that the
significance level was 0.000 and it is less than 0.05, then we can say that there is a positive
significant impact at the 0.05 level of "Digitalization " on Customer satisfaction. The R-
square value 47%, indicating how Customer satisfaction was explained and accounted for by
Administrative Innovation.
ii. The second main hypothesis: The hypothesis stated that "The Palestinian National
Culture has significant statistical implications in the banking sector on Customer
satisfaction at level 0.05". This hypothesis was tested using regression analysis.
Table (4) shows the result of the first sub hypothesis, which indicates that the Regression
coefficient of moderator variable " Palestinian National Culture" was (0.231) and the
significance level was 0.006 and it is lower than 0.05, thereupon we can statistically reveal
that there is a positive significant impact at the 0.05 level of " Palestinian National Culture"
on Customer satisfaction.
Table (4): Effect of Palestinian National culture on Customer satisfaction.
Determination
Regression Coefficients
Variable Coefficient F Sig
B t Sig. R-square
(constant) 2.329 10.696 0.000
Palestinian National 0.231 2.822 0.006 0.075 7.966 0.006
Culture

iii. The third main hypothesis: the third hypothesis stated that "Digitalization has
significant statistical implications in the banking sector on Customer satisfaction
considering the moderator variable "Palestinian national culture" at level 0.05 ".
While we implemented a hierarchical regression analysis to test the hypotheses.
Table (5) exhibits the result of the third main hypothesis, which indicates that a hierarchical
regression analysis was mainly adopted. this study demonstrated that Palestinian National
Culture negatively affected the relationship between digitalization and customer satisfaction
was (0.527-) and the significance level was 0.006 and it is lower than 0.05, and in such
manner, we can specify that there is a negative significant impact at the 0.05 level.

Table (5): Result of hierarchical regression analysis for the effect of Digitalization on
customer satisfaction with moderation effect of Palestinian National culture

Step 1 Step 2 Step 3

B Sig B Sig B Sig
Constant 0.981 0.000 0.957 0.000 -3.118 0.038
Digitalization 0.618 0.000 0.610 0.000 4.015 0.000
Palestinian National 0.018 0.790 2.802 0.006
culture
Dig* NC -0.527 0.006

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4.4 Validity and Reliability:
The questionnaire was distributed to both well-known respondents with adequate expertise
and random customers' segment who use digital banking services in daily bases or even once
in a month and therefore they are considered as valid and reliable source to our study. The
researchers used Cronbach's Alpha. Cronbach's Alpha that was computed to measure the
reliability characteristic. The value computed was equivalent to (0.79) which was considered
accepted in terms of the Cronbach's Alpha; this implies that the questionnaire has an accepted
degree of reliability, therefore it is advisable to wield it to reach the desired outcomes. Person
correlation coefficients assess the construct validity and correlation coefficients between
variables of the study.
The following table summarizes the value of Cronbach's Alpha for every dimension
including the total degree of the questionnaire.

Table (6): Cronbach's Alpha Coefficient for Reliability

No. of Cronbach
Variables Constructs
items Alpha (α)
Security and Privacy 5 0.78
Independent Ease of Use 5 0.81
(Digitalization) Speed of transaction 4 0.74
Usefulness 4 0.63

Dependent Customer satisfaction 13 0.71

Moderator Palestinian National Culture 7 0.65

All items 38 0.79

V. Discussion:
This research paper aims to investigate the impact of digitalization in Gaza’s banking sector
on customer satisfaction Considering Palestinian National culture as a moderator variable.
This research study implemented a descriptive analytical methodology to describe and study
the phenomenon as it is, with clarifying and accurately analysing data through conducting an
online survey from 100 bank’s customers who use digital banking services. In addition, this
methodology aims to conclude findings that are related to reality and to enrich knowledge on
how to improve and reduce any obstacles. The study relies upon a research model that
exhibits the independent variable which is Digital Banking with its four-sub dimensions
[security and privacy, ease of use, speed of transaction, and usefulness], the moderating
variable which is Palestinian national culture, and customer satisfaction as a dependent
variable with its three sub-dimensions [customer experience, customer retention, and
customer recommendation]. The empirical results showed that there is a positive significant
influence of Digitalization on Customer satisfaction that can be supported and compared by

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several studies such as the study of Pawar and Al-Raddadi (2019), Sulaiman and Abdelkarim
(2019) and Anada et.al (2020) considering the sub dimensions stated: Security and privacy,
Ease of use, usefulness on Customer satisfaction. Whereas, this study agrees with Pawar and
Al-Raddadi (2019) in which they concluded that there is a significant impact of Security and
privacy, Ease of use and usefulness on customer satisfaction. Also, the study of Sulaiman and
Abdelkarim (2019) was consistent with our research study in terms of security and privacy
dimension, and Anada et.al (2020) in terms of usefulness. In contrast with Muluka (2015)
who indicated that there is a strong positive correlation between speed of transactions and
customer satisfaction. Digital Banking has simplified customers' financial transactions more
than standard traditional banks by speeding their transactions and therefore increased their
satisfaction towards these digital services. The results also indicated that Palestinian national
culture has a negative impact on the relationship between "Digitalization" and "Customer
Satisfaction". Since customers pinpointed that they will not use any digital banking services
if they we are not consistent with their knowledge, language, education level and so on.
Recommendations:
Based on our findings, the following are recommended:
1. Gaza’s banks should enhance the use of digital banking services, direct customers to use
these services instead of traditional methods.
2. Banks should provide customers with superior services in order to attain customer
satisfaction so they can recommend other potential customers to use the bank's digital
banking services.
3. There is a need for banks to determine which customers are more sensitive about their
age, education status, religion, values, and attempt to increase the number of these
customers.
4. Banks shall enhance customer's knowledge and awareness of the digital banking service
specially in term of speed of transaction.
5. Banks need to develop digital banking platforms that provide more security and privacy
that can boost customers transactions.

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