chapter- 7 impact of e-banking on operational...
TRANSCRIPT
196
CHAPTER- 7
IMPACT OF E-BANKING ON OPERATIONAL PERFORMANCE
OF BANKS
7.1 HR in Banking
7.2 Data Base and Research Methodology
7.3 Descriptive Analysis
7.4 Kendall’s Coefficient of Concordance
7.5 Impact of E-banking on Operational Performance
7.6 Statistical Difference Between Public and Private Sector Banks in Operational
Performance
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CHAPTER VII
IMPACT OF E-BANKING ON OPERATIONAL PERFORMANCE OF BANKS
The major challenge faced by the banks is to protect the falling margins due to
the impact of competition. Falling in profit requires increase in the volume of transaction
which could be increased only by exploiting the advantages of technology and by
providing sound customer based services. So, technology upgradation is required not for
improving the functionalities of the bank but to have sound customer base. It has
changed the method of marketing, advertising, distribution, pricing, financing and cost
saving through electronic channels and products. These changes call for a dynamic,
aggressive, adaptable and changing work-force to meet the demands of customers’
relationship, product differentiation, values, reputation and regulatory prescriptions.
Further, the changes staring at the face of bankers are undergoing a rapid transformation
in response to the forces of competition, efficiency in operations, reduced operating
margins, better asset/ liability management, risk management, anytime and anywhere
banking, etc.
But the profitability of the banks and the qualitative services to the customers
could be provided only if the employees working in the banks are familiar with the usage
of technology. Because they are the people behind the scene who make possible the
required benefits to the customers and the banks. This research is an effort to see whether
e-banking has any impact on the employment needs and operational performance of
banks. The computerization of banking system has created the need for more trained
technical workers to attend both the hardware and software problems. Now the banks
require more computer analysts, software engineers, system operators, designers, data
base administrators, website designers and computer programmers. But the banks cannot
replace their whole staff to meet this requirement and they are giving the required
training to their employees so as to meet the challenges of the market. To some extent, e-
banking has dampened the employment needs also. Automated services through websites
and e-mail permit marketing of e-banking services can be provided without the need of
employees. For example, e-banking dramatically streamlines the sales process by
providing unlimited amount of information on products to customers on the websites.
With all these strategies banks should revitalize their recruitment, selection and
placement policies and developing the human resources to meet the challenges of
paradigm shift. The system of e-banking has its own pros and cons from employees’
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point of view. But for the banking as a whole it has enhanced customer services,
effective distribution, improved operations, faster access to information, and improved
internal processes which have been helpful in developing a global delivery platform.
The following aspects need to be taken into account while introducing any change
in the e-banking system:
• Rightsizing the work-force.
• Adjusting to the changing profile and needs of today’s employees.
• Ensuring customer focus with emphasis on customer-service attitude and
behaviour throughout the organization.
• Establishing employee-involvement programmes to generate a sense of
empowerment and commitment.
• Improving competitiveness through implementation of total quality management
processes.
• Incorporating information systems as an integral part of business and production
strategies.
7.1 HR in Banking
Bankers are increasingly aware of the importance of e-banking technology for
their survival, growth and operations. The technology has totally transformed the way of
business. The new situation has raised many questions like how should an HR manager
respond to the changing scenario? What is the impact of electronic banking on human
resources employed and their performance? The answers to these questions lie in the fact
that if there is any increase in ability to take decisions, their productivity , processing
time, work environment, then the banks should go ahead in adopting the electronic
banking techniques and technology. The following table presents a comparison between
old and new competencies.
Figure 7.1 Changing Competencies
Old Competencies New Competencies
1. Ability to operate in well-defined and stable environment.
Ability to operate in ill-defined and ever changing environment.
2. Capacity to deal with repetitive straightforward and concrete work process.
Capacity to deal with routine and abstract work process.
3. Ability to operate in a supervised work environment.
Ability to handle decisions and responsibilities.
4. Isolated work. Group and interactive work.
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5. Ability to operate within narrow geographical and time horizons.
Ability to operate within expanding geographical and time horizons.
This new and enhanced technology requires the behavioural adjustment in the
human resources. The training programmes and their implementation for human resource
development play an active role in adoption of e-banking modes. Training needs should
be actively involved in the total training process starting from identification of training
needs, evaluation of training aspects and the benefits of training to end users. Skill,
attitude and knowledge of human capital play an important role in determining the
competitiveness of the financial sector. The quality of human resource indicates the
ability of banks to deliver valuable services to customers. Capital and technology are
replicable but not the human capital which needs to be valued as a highly valuable
resource for achieving the required targets of the banks. So, when any new technology is
adopted by the banks, there is need to consider its impact on the employees’ needs.
7.2 Data Base and Research Methodology
The study is mainly based on the primary data collected from the employees
working in the banking sector of Punjab region confined to five districts, viz. Ludhiana,
Patiala, Jalandhar, Bathinda and Mohali with the help of a well drafted pre-tested
questionnaire. Sample of 100 employees was drawn from seven banks in all, four from
the public sector and three from the private sector. These banks include State Bank of
India, Punjab National Bank, Canara Bank, Bank of Baroda, HDFC Bank, ICICI Bank
and AXIS bank. A specifically designed questionnaire was used as tool, and bank
employees were requested to fill it during office hours. Different branches from different
regions were selected for the purpose. At least five employees from every branch were
requested to fill the questionnaire. The respondents were selected among the people
working at different levels like executive manager, assistant manager, relationship
manager, branch manager, officer, cashier, clerk, front desk executive. Some of the
employees refused to respond due to lack of time especially from the private sector
banks. Questionnaires found incomplete were rejected. So, out of 120 questionnaires
distributed to the employees, only 100 were found complete in all respects for further
analysis. Descriptive analysis was used to present the profile of respondent. It includes
average, frequency and percentage of data value for each of the variables etc. Mann-
whitney test was conducted to compare the scores of two groups. The test signifies that
two samples coming from identical population may either be based on R1, the sum of the
ranks of the values of first sample or on R2, the sum of the ranks of the values of second
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sample. If it is true that the samples have come from the same population it is reasonable
to assume that the means of the ranks assigned to the values of two samples are more or
less same. SPSS 13 and 17 version are used to analyze the required data. The results
have been presented in different section.
The present chapter studies the impact of e-banking on operational performance
taking into consideration the employees’ aspect. The reason being that with the
introduction of core banking solution, electronic fund transfer, real times gross
settlement system and electronic clearing services, there is a major change in the
methods of performing their duties and improvement in the productivity and operations.
E-banking has led to change in working hours, reduction in processing of work,
employee productivity, decision-making processes, working conditions, relationship of
employees with the bank and customers, etc. Further, centralized data base, online data
availability, any branch banking, paperless transactions and up-to date information have
led to sweeping changes in productivity and operational performance of the banks.
SECTION-A
7.3 Descriptive Analysis
Descriptive analysis and cross tabulation were carried out to present the profile of
the employees and to know the relationship different categories of employees’ profile.
Mean scores and standard deviation were also calculated for the items to know the
impact of e-banking on employees.
Employees’ Profile
Before formulating any effective research about the banking sector in India, it is
required to maintain an up to date profile information of the employees in the form of
employee based data. Last section of the questionnaire relates to the employees’ profile
covering their age, experience, education and various positions held by them in
respective banks. Such a profile provides the bank with a strong basis for designing
effective plans and programmes regarding training and HR policies of the employees.
Table 7.1
Gender Profile of Employees
Sex Frequency Valid Per cent Cumulative Per cent
Male 66 66 66
Female 34 34 100
Total 100 100
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The table reveals that the male percentage (66 per cent) for the sample is higher
than the female percentage (34 per cent) in both the public and private sector banks
under study.
Table 7.2
Age Profile of Employees
Age Frequency Valid Per cent Cumulative Per cent
Below 30 yrs. 43 43 43 30-40 yrs. 35 35 78 40-50 yrs. 20 20 98 50-60 yrs. 2 2 100 Total 100 100
Table 7.2 presents the age-wise profile of the respondent employees. As is
evident from the table as many as 43% employees are below the age of 30 years, 35%
employees fall in the age category of 30-40 years, 20% in 40-50 years whereas only 2%
fall in the age category of 50-60 years. The table reflects that majority of the employees
are below the age of 30 years in both the sectors.
Table 7.3
Educational Profile of Employees
Educational Qualification Frequency Valid Per cent Cumulative Per cent
Matric and Undergraduate 2 2 2 Graduate 23 23 25 Post-graduate 49 49 74 Professional Degree 26 26 100 Total 100 100
Table 7.3 presents the education-wise distribution of the employees. Majority of
the employees, i.e., 49% are post-graduate, 26% of them have professional degrees, 23%
are graduate, while the remaining 2% are either Matriculate or undergraduate. An
analysis of the table reveals that maximum number of employees belong to post-graduate
category.
Table 7.4
Experience Profile of Employees
Experience Frequency Valid Per cent Cumulative Per cent
Below 5 yrs. 40 40 40 5-10 yrs. 32 32 72 10-15 yrs. 13 13 85 15-20 yrs. 15 15 100 Total 100 100
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Table 7.4 presents the experience-wise distribution of the employees. As is evident
from the table as many as 40 % employees fall in the category of experience below 5
years. Another 32% employees fall in the experience category of 5-10 years, 15% in 15-
20 years category and 13% in 10-15 years category. The table reflects that majority of
the employees fall in the experience category of below 5 years.
Table 7.5
Occupational Position of Employees
Position Frequency Valid Per cent Cumulative Per cent
Executive Manager 15 15 15 Assistant Manager 15 15 30 Branch Manager 13 13 43 Clerk 22 22 65 Cashier 17 17 82 Front Desk Executive 10 10 92 Senior Officer 8 8 100 Total 100 100
Table 7.5 exhibits the occupation-wise distribution of respondents. An analysis of
the table provides that maximum number of respondents, i.e., 22% from both the public
and private sector banks under study, belong to the clerk category, whereas 17%, 13%,
10%, 8% belong to the categories of cashier, branch manager, front desk executive and
senior officer respectively. Similarly, the respondents in equal proportion, i.e., 15% each
belong to the categories of the executive manager and assistant manager.
7.4 Kendall’s Coefficient of Concordance
Kendall’s coefficient of concordance helps to determine the inter-behavioural
similarities and dissimilarities between the demographic factors and the variables chosen
for the study.
Table 7.6
Age-wise Distribution
Variables Kendall’s
Coefficient
Chi-square d.f Level of
Significance
Workload of Employees 0.483 13.528 7 Not Significant Personal Development and Relations
0.314 8.784 7 Not Significant
Processing of Transaction 0.320 8.953 7 Not Significant Convenience and Security 0.533 12.791 6 Significant*
Core Banking Solution 0.493 9.854 5 Not Significant Electronic Data Interchange 0.85 1.367 4 Not Significant Real Time Gross Settlement System
0.236 3.781 4 Not Significant
* Values are significant at 5 % level
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Table 7.6 shows the relationship between age of the employees and different
factors considered to measure e-banking impact on operational performance. Regarding
the workload of employees and the age-wise distribution, the value of chi-square is less
than the tabulated value, hence, it is not significant. This shows that irrespective of age
factor of employees, all the employees perceive that e-banking has reduced the workload,
developed inter-personal relations, made the processing of transaction speedier,
introduced core banking solution and immediate settlement of transaction. There is only
one factor where Kendalls coefficient is significant and calculated value of chi-square is
greater than tabulated value, that is, related to ‘convenience and security’. This shows
there is difference in the opinion of employees as far as security issues are concerned.
Table7.7
Experience- wise Distribution
Variables Kendall’s
Coefficient
Chi-square d.f Level of
Significance
Workload of Employees 0.729 20.413 7 Significant*
Personal Development and Relations
0.430 12.031 7 Not Significant
Processing of Transaction 0.735 17.647 7 Significant*
Convenience and Security 0.541 16.217 6 Significant*
Core Banking Solution 0.437 0.873 5 Not Significant Electronic Data Interchange 0.234 3.744 4 Not Significant Real Time Gross Settlement System
0.459 9.520 4 Significant*
* Values are significant at 5 % level
Table 7.7 reflects experience wise distribution and its impact on different
variables of operational performance. The chi-square test indicates that there is a
significant difference between employees in experience wise distribution. Regarding
workload, processing, convenience and security, real time gross settlement, chi-square
value is greater than the tabulated value. This proves that employees having different
experience also have different opinion regarding e-banking applications.
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Table 7.8
Position-wise Distribution
Variables Kendall’s
Coefficient
Chi-square df Level of
Significance
Workload of Employees 0.409 20.057 7 Significant*
Personal Development and Relations
0.281 13.792 7 Not Significant
Processing of Transaction 0.470 19.721 7 Significant*
Convenience and Security 0.222 9.344 6 Not Significant Core Banking Solution 0.324 11.333 5 Significant*
Electronic Data Interchange 0.041 1.138 4 Not Significant Real Time Gross Settlement System
0.457 16.004 4 Significant*
* Values are significant at 5 % level
Table 7.8 carries the data showing position-wise distribution of employees.
Categorically the position of employees has been divided as executive manager, assistant
manager, branch manager, clerk, cashier, front desk executive and senior officer. All the
employees have different opinion according to their position. Chi-square value is
significant in some of the variables which shows there exists a significant difference in
the opinion of employees regarding their workload, processing of transaction, core
banking solution and applicability of real time gross settlement system.
Table 7.9
Education-wise Distribution
Variables Kendall’s
Coefficient
Chi-square d.f Level of Significance
Workload of Employees 0.622 17.415 7 Significant*
Personal Development and Relations
0.320 8.953 7 Not Significant
Processing of Transaction 0.503 12.081 7 Not Significant
Convenience and Security 0.302 7.239 6 Not Significant
Core Banking Solution 0.566 11.314 5 Significant*
Electronic Data Interchange
0.155 2.474 4 Not Significant
Real Time Gross Settlement System
0.464 9.270 4 Not Significant
* Values are significant at 5 % level
Table 7.9 exhibits education-wise distribution of employees. Education-wise,
Kendall’s coefficient of concordance is significant in two out of seven variables.
Employees having less educational qualifications perceive high work load due to the
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technological advancement, whereas the employees with professional degree are able to
cope up with the electronic banking changes. Similarly, regarding core banking solution,
employees formed different opinion and in the other variables, value of chi-square is not
significant.
SECTION- B
7.5 Impact of E-banking on Operational Performance
This section carries the response data collected from the respondent employees.
Mean scores and standard deviation are calculated for different statements to find out
which key factors influenced the employees most to adopt e-banking and their impact on
operational performance.
Table 7.10
Impact of E-banking on Workload of Employees
Degree o Agreement
Statements Very
Large
Extent
Large
Extent
Not
At All
Little
Extent
Very
Little
Extent WAS
Rank
Increase in number of Hours 2 1 22 49 26 3.96 3 Increase in Decision-making Process 8 61 25 5 1 3.77 5 Division of Work 24 45 17 12 2 3.77 5 Increase in Productivity 37 42 13 7 1 4.07 1 Increase in Knowledge 29 54 13 1 3 4.05 2 Reduction in Processing Time 29 39 27 2 3 3.89 4 Team Performance 17 44 25 11 3 3.61 6 Minimization of Cost 3 19 19 38 21 3.55 7
Table 7.10 presents the impact of e-banking on workload of employees as well as
on their performance and productivity. To know this impact both positive as well as
negative statements are taken into account. A large number of employees believe that e-
banking with quick working techniques, more clarity about objectives, minimum cost
enhancement in their knowledge about the work has resulted in improving the
productivity of banks. However, employees do not agree with increase in number of
hours. There is a very little increase in working hours of their jobs. The employees
further observed that it has reduced the processing time of the transactions as no manual
work for entering and processing the data is required. The decision-making power of the
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employees has also improved to a large extent. So, as far as the workload of employees is
concerned, it has been reduced by division of work and less processing time.
Table 7.11
Impact of E-banking on Personal Development and Relations
Degree of Agreement
Statements Excellent Very
Good
Good Fair Poor
Weighted
Average
Score Rank
HR Policies of the Bank 23 35 25 15 2 3.62 4 Environment after E-banking 28 37 29 5 1 3.86 1 Training to Employees 21 30 41 7 1 3.63 3 Knowledge Upgradation 23 28 32 17 0 3.57 6 Relationship between Employee and Customer 19 36 33 10 2 3.60 5 Relationship between Employee and Employee 18 44 26 7 5 3.63 3 Guidance to Customer 16 40 31 10 3 3.56 7 Promptness in Providing Service 34 29 22 13 2 3.80 2
Table 7.11 reveals that there is a change in personal development and relations
after adoption of e-banking. Employees perceive that environment after introduction of e-
banking has improved a lot with weighted average mean score of 3.86. Secondly, it has
helped to provide prompt service (3.80) to the customers. Further employees are satisfied
with the current HR policies of the bank (3.62). The relations between employees and
customers (3.60) have further improved. The problems faced by the customers are
redressed quickly. No doubt, direct interaction with the customers has reduced
considerably, but due to quick answers to their queries the relations with them have
further improved.. Their knowledge has been continuously upgraded. So we draw the
inference that personal relations among the employees, and with the customers have been
good, and service providing has also increased due to fastest mode of e-banking.
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Table 7.12
Comparison of E-banking with Traditional Banking
Comparison Frequency Valid Per cent Cumulative Per cent
Far Better 43 43 43 Better 48 48 91 Same 9 9 100 Poor 0 0 Total 100 100
The comparison of e-banking with traditional banking has been shown in table
7.12. The response of the respondents is based upon four options, i.e., far better, better,
same, poor. No one agreed that e-banking is poor than traditional banking. However 48%
of the respondent employees believe that e-banking is better than traditional banking,
while 9% believe that they find no difference between e-banking and traditional banking.
So majority of the respondents believe that the service quality has certainly improved
with e-banking.
Table 7.13
Impact of E-banking on Processing Time of Transaction
Degree of Agreement
Statements Substantially
Increased Increased Stable Decreased
Substantially
Decreased WAS
Rank
Time Taken in Transactions Now 6 5 23 34 32 3.81 2
Responding Queries of the Customer 3 7 32 24 34 3.79 3 Complexity in Transactions 12 13 32 42 4 3.13 6 Time Taken in Making of Draft 5 6 26 23 40 3.87 1 Availability of Staff at Counter 7 13 16 34 30 3.67 4 Banking Hours 7 8 30 29 26 3.59 5 Knowledge of Staff about Bank’s Products 33 40 10 7 10 3.79 3
Table 7.13 exhibits the processing time of transactions in banks after the adoption
of e-banking. It was found that there is reduction of work in the banking activities after
e-banking. Time taken in making a draft has somehow decreased as indicated by the
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weighted average score (3.87). Further, the time taken in transactions now has decreased
gradually (3.81) as online transactions consume lesser time than manual transactions. The
knowledge of staff about bank products and responding queries to the customers has been
increased (3.79). As far as the availability of staff at counter is concerned (3.67), it has
also been decreased as customers need not to visit their branches regularly and can
transact through internet banking. Banking hours are somehow stable (3.59) after the e-
banking adoption. However complexity in the transaction (3.13) is stable which is neither
increased nor decreased. The analysis of this table shows that as far as processing time of
transactions after e-banking is concerned, there is reduction in it. As the transactions are
handled through computerized data based system, so manual work has been reduced to
the large extent.
Table 7.14
Employees Perception on Convenience and Security
Degree of Agreement
Statements
Very
large
extent
Large
extent
Not
at all
Little
extent
Very
Little
extent
Weighted
Average
Score Rank
Ease of Use 34 29 19 12 6 3.73 3 Reduction in Monotony of Work 19 42 28 11 0 3.69 4 Security and Privacy 26 45 19 7 3 3.84 1 Increase in Trust 19 49 20 11 1 3.74 2 Reduction of Risk 11 53 22 11 3 3.58 5 Job Losses 15 22 29 28 6 2.88 7 Reduced Interaction with People 11 8 21 34 26 3.56 6
Table 7.14 reflects the convenience and security impact of e-banking on the
efficiency and productivity of employees. Most of the employees perceive that the matters
regarding the problems of customer could be handled easily and fastly. Security concern
has also been sorted out with the highest average mean score of 3.84, employees can now
make online FD’s, large amount of fund transfer through real time gross settlement and
electronic fund transfer. It has increased the trust of employees to a large extent (3.74).
Employees also perceive that electronic banking has made their survival in banking sector
very easy and to a large extent, their working has become easy (3.73). Further they feel
that up to large extent there has been a reduction in their monotonous of work (3.69) as
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they perceive that working through e-banking is fast and interesting. Risk has been reduced
to a large extent as online transfer of fund is safe and secures (3.58). Interaction with the
people has not been reduced (3.56). There is no fear of job losses among employees
(2.88). In fact customers become closer to banks and their staff through fast information
processing, speedy recovery of funds and early grievances of their problems.
Table 7.15
Factors Influenced Bank to Adopt E-banking
Table 7.15 carries out the data showing the factors influenced the bank most to adopt
e-banking. Firstly, the bank employees perceive that it is the globalization in the banking
industry which influences the bank more for the e-banking adoption (4.02). Secondly, it is
the guidelines by RBI to pressurerize the bank to adopt e-banking (3.90). Thirdly, it is
competition from other banks which forced banks to adopt e-banking (3.74). Fourthly, it is
the requirement from the customer side as they want better products and services in the
banking sector (3.30). Fifthly it is the own willingness of the bank to adopt e-banking (3.16)
and cost effectiveness is at last of ranking (2.91). So it’s not the cost efficiency and reduction
but the globalization and competition and RBI instruction to follow e-banking.
Statements Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 WAS
Overall
Rank
Own Willingness of the Bank
16 20 5 10 21 28 3.16 5
Guidelines by RBI 28 12 13 24 15 8 3.90 2 Globalization in the Banking Industry
18 22 28 14 12 6 4.02 1
Competition from other Banks
12 19 30 18 12 9 3.74 3
Requirement of the Customer
10 18 12 24 24 12 3.30 4
Cost Effectiveness 28 8 6 9 12 37 2.91 6
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Table 7.16
Employees Perception on Modes E-payment
Payment
Modes
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank7 Rank 8 WAS Overall
rank
EFT 13 20 13 10 4 18 6 16 4.70 3 ECS Dr 13 7 23 9 6 10 25 7 4.47 6 ECS Cr 1 15 10 24 24 16 3 7 4.50 5 RTGS 21 3 11 23 17 5 9 11 4.62 4 EDI 4 5 6 17 19 17 20 12 3.67 8 Credit Cards
11 11 18 4 10 9 14 23 4.11 7
Debit Cards
15 26 7 6 6 11 16 13 4.76 2
ATM’s 25 12 13 8 11 4 6 11 5.11 1
Table 7.16 presents different payment modes adopted by banks after the introduction
of e-banking. The research shows that electronic banking offers number of modes for
payment. It provides fastest and effective mode of payment to the customers anywhere,
anytime. In different modes of payment, ATM is the fastest and easiest mode suitable to
customers. Because the customers can withdraw the money from ATM anytime, anywhere.
Debit cards and credit cards also play a vital role in making payments. Further electronic
fund transfer and real time gross settlement system play an important part in inter- bank fund
transfer. So ATM is the fastest mode followed by debit cards, EFT, RTGS, ECS (Cr), credit
cards and lastly EDI.
Table 7.17
Employee's Perception on Ways to Improve E-banking
Payment
Modes Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 WAS
Overall
rank
Employee Education & Staff Training
37 21 13 11 6 12 4.36 1
Gearing up Grievances
10 25 20 24 15 6 3.73 2
Simplification of Rules
17 18 21 19 10 15 3.68 3
Up to date
Infrastructure 12 21 17 20 19 11 2.93 5
Greater Trust in Staff
11 8 15 14 33 19 3.54 4
Reduction in Complexity of Software
13 7 14 11 18 37 2.75 6
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Table 7.17 exhibits suggestions to improve e-banking. The study also suggested the
methods to improve the services of electronic banking. Though every bank is making the
best efforts to provide e-banking services, still there is a need to improvement. Most of
employees feel that there should be staff training and education to tackle the complex e-
banking problems (4.36). Secondly, employees want that their grievances should be
redressed quickly(3.73), so that they can work in a cool atmosphere. Thirdly, rules should be
simplified, it means any complexity in e-banking should either be reduced or should be
clarified (3.68). Fourthly, there should be greater trust in staff (3.54) and up-to-date
infrastructure should be provided with fast going technology modes (2.93) and last rank is
given to reduction in complexity of software (2.75). So complexity does not causes much
problem but employees perceive education and training as most important one, so banks
should make efforts to provide the same to employees.
Mann -Whitney Test
Mann Whitney test is conducted to compare the rank of two statements that is
described in table no.15 and table no.17. This test has been conducted to know that both
samples are taken from the same population. Both questions are divided in to two groups.
Group 1: For factors influenced the bank more to adopt e-banking and Group 2: For
suggestions to improve e-banking by assuming that both statements have been taken
from the same sample. Z value was calculated.
Table 7.18
Ranking on the basis of Mann-Whitney Test
Rank Sum A Rank Sum B Z value
41 37 0.320
Table 7.18 depicts that the value of Z is less than 1.96 so it is significant at 5 % level
that is 0.320 by proving the assumption that both ranks are taken from the same sample of
population. Box and whisker plot by group was used to define the minimum and maximum
of rank score in two groups. Group A is having range from 291 to 402 and group B from 275
to 436. So the minimum and maximum range fall more in Group B.
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Figure 7.1
Boxplot by Group
Variable: score
Median
25%-75%
Min-Max A B
group
260
280
300
320
340
360
380
400
420
440
460
score
Categorized Histogram
Variable: score
group: A score = 6*20*normal(x, 350.5, 44.532)
group: B score = 6*20*normal(x, 349.8333, 58.5471)
score
No of obs
group: A
240
260
280
300
320
340
360
380
400
420
440
460
0
1
2
3
group: B
240
260
280
300
320
340
360
380
400
420
440
460
The above table shows the categorization of two groups by histogram. Group A has
rank scores varying from 291,316,330,374,394,402 and Group B has rank scores varying from
275,293,354,368,373,436. So both scores are equally distributed among the population.
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Table 7.19
Employees Perception on Core Banking Solution
Degree of Agreement
Statements Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
WAS Rank
Facilitate Centralized Data Base 31 24 30 6 9 3.62 5 Online Real- Time Data Availability 26 34 27 28 5 3.68 4 Any Branch Banking 31 38 27 1 3 3.93 2 Facilitative Launch of New Products 35 42 16 4 3 4.02 1 Shifting of Time Consuming Activities to Data Centre 34 35 14 8 9 3.77 3 High Load on Concentrated Branches 22 39 21 10 8 3.57 6
Table 7.19 exhibits core banking solution applicability among public and private
sector banks. The above data reveals that implementation of centralized banking solution
has emerged as one of the most cutting edge factor among the sweeping modernization
taking place in the banking sector. Large number of employees agree that e-banking
facilitates launching of new products, the reason being large number of customers possess
different modes of e-banking through tele-banking, internet-banking, phone banking and can
fulfill their requirement relating to online shopping, e-ticket booking, demat holding, interest
rate updates, share trading, buying and selling of mutual fund etc. The latest information
about all these is regularly upgraded through different modes of e-banking. Customers
through online fund transfer can transact through any branch of the bank. Besides customer
service point of view, implementation of CBS further enables the bank of a reliable
centralized data repository, which has facilitated modern technology tools like data ware
housing and data mining for business intelligence and analysis. Employees also perceive that
CBS has facilitated reliable decision support and executive information systems which
would be available on real time basis. However CBS has put a pressure on branches settled
in highly industrial areas. But the agreement of employees on major statements proves that
CBS provided the multi channel environment by interconnecting all branches of bank with
each other and by providing complete and reliable services round the clock.
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Table 7.20
Employee Perception on Electronic Data Interchange
Degree of Agreement
Statements Strongly
agree
Agree Neutral Disagree Strongly
Disagree
Weighted
score Rank
Reduces Inventory Holdings
29 45 16 7 3 3.90 1
Reduces Mailing Costs
23 43 27 1 6 3.76 3
Automatic Reconciliation of Remittance
23 40 28 8 1 3.76 3
Less Reliance on Human Interpretation
26 39 22 13 0 3.78 2
Enables Paperless Transaction
27 44 14 8 7 3.76 3
Table 7.20 carries the data showing impact of electronic data interchange on the
working environment of banks. As is shown in above table that EDI helped in converting
totally computerized based data interchange without any manual work involved in it. It has
facilitated the reduction in processing time. Employees agree with the statement that EDI
reduced inventory holding(3.90) as the data regarding customers could be kept in soft copy
form. So no file keeping record is required. Employees also agree on the term that e-
banking requires less human interpretations(3.78) and reduced the mailing cost(3.76) as
any information regarding banking products and services customers can be accessed
through websites of the bank and banks can also inform regarding any query through their
mailing address. Employees give a strong recommendation regarding this statement as this
is the most desirable benefit of e-banking that every transaction is processed through
technological modes, so no calculation is done by employees manually. It has also enabled
paperless transactions. No data record keeping in the form of papers, files is required.
Every information is stored in computers and data is recorded in form of PDF, excel and
word files and these all modes are paperless.
215
Table 7.21
Employee Perception on Real Time Gross Settlement System
Degree of Agreement
Statements
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree Mean Rank
Processing and Settlement on Real Time
30 41 20 4 5 3.87 1
Payment are Settled Transaction by Transaction
26 32 33 8 1 3.74 3
Eliminated Settlement Risk
27 31 30 10 2 3.71 4
Immediate Finality of Transaction
26 38 26 8 2 3.78 2
Settlement on FIFO Basis and Priority Wise
21 26 33 13 7 3.41 6
Immediate Credit And Transparent Pricing
28 38 18 7 9 3.69 5
Table 7.21 describes the processing of real time gross settlement system. RTGS is
primarily for online real times inter bank payment and settlement of large funds. In RTGS
processing is on real time basis (3.87). Employees give their agreement say that funds are
immediately transferred (3.78) without exposing themselves to risk. Because a lag between
the time at which information is made available to receiving banks and the time at which
settlement takes place may have important risk implications in large fund transfer systems.
Employees also give their agreement related to transaction by transaction settlement (3.74)
and risk elimination due to elimination of time lag between the statements (3.71). Further
credit is immediately transferred (3.69) with reduction in settlement risks and in a secured
manner and settlement is made on FIFO basis.
216
Table 7.22
Employee Perception on Benefits of E-banking
Degree of Agreement
Statements
Strongly
Agree
Agree Neutral Disagree Strongly
Disagree
Mean
Scores Rank
Increase in Employee Productivity
38 44 13 2 3 4.12 1
Increase in Branch Productivity
32 44 21 2 1 4.04 2
Increase in Bank Productivity
34 30 32 3 1 3.93 3
Up to Date Information
42 36 8 12 2 4.04 2
Innovation in Products And Services
28 39 17 13 3 3.76 4
Rush of Customers in Bank
26 31 19 14 10 3.49 5
Table 7.22 mentions the overall impact of e-banking on operational performance its
adoption. Employees perceive that e-banking has improved the productivity with 4.12
mean. This conclusion has been drawn on the overall basis of their development in the
form of hour’s reduction, processing time, environment improvement, change in decision
making, reduction in monotony of work, interaction with people etc. Further e-banking has
increase the productivity of the branch (4.04) by reducing rush of the customers in the
bank, facilitates centralized data base, shifting of time consuming activities to data centre,
any branch banking concept and online real time availability of data. E-banking has also
improved the bank productivity (3.93) by reducing mailing cost, inventory holding,
reduction of settlement risks, promptness in providing services etc. Employees also
perceive that e-banking provides innovation in products and services (3.76) and rush of
customers has also been reduced to the large extent.
7.6 Statistical Difference between Public and Private Sector in Operational
Performance
T-test was applied to calculate the difference between public and private sector.
This test helps to signify the statistical difference between different variables and the
scope of further improvement through their mean values.
217
Table 7.23
Sector-wise Employees’ Perception on Workload
Statements Public Private t-value p-value
Increase in no. of Hours 3.90 4.02 -0.713 0.477 Increase in Decision Making Process
3.74 3.66 0.545 0.587
Division of Work 3.70 3.84 -0.693 0.493 Increase in Productivity 4.02 4.12 -0.536 0.594 Increase in Knowledge 3.98 4.12 -0.816 0.416 Reduction in Processing Time 3.72 3.62 0.990 0.890 Team Performance 3.60 3.62 -0.100 0.920 Minimization of Cost 3.60 3.50 0.450 0.653
* Values are significant at 5 % level
Table 7.23 shows no statistical difference in any of the statement between two
sectors regarding the workload of employees in public and private sector banks.
However the mean score of private sector banks are higher than the public sector in
five out of eight statements. Insignificant difference implies that e-banking has equal
effect on the workload of employees in both the sectors.
Table 7.24
Sector-wise Employees’ Perception on Personal Development and Relations
Statements Public Private t-value p-value
HR Policies of the Bank 3.68 3.56 0.566 0.572
Environment after E-banking 3.86 3.56 1.621 0.108
Training to Employees 3.72 3.54 0.969 0.334
Knowledge up Gradation 3.54 3.60 -0.291 0.771
Relationship between Employee 3.62 3.58 0.205 0.883
and Customer
Relationship between Employee 3.64 3.62 0.098 0.922
and Employee
Guidance to Customer 3.64 3.48 0.819 0.414
Promptness in Providing Service 3.70 3.90 -0.902 0.369
** Values are significant at 5 % level
Table 7.24 represents knowledge enhancement and improvement in the
relationship with customers after e-banking adoption. Employees of both the sectors
perceive that e-banking has upgraded their knowledge, relationships and promptness in
providing the service. Regarding HR policies (3.68), environment (3.86), training to
218
employees(3.72), relationship(3.62) and guidance to customers(3.64); public sector
employees are more satisfied with e-banking adoption. This implies that public sector
banks are fastly adopting the modes of e-banking. Further public sector banks are also
giving excellent training to its employees to achieve all the efficiencies.
Table 7.25
Sector-wise Employees’ Perception on Processing of Transaction
Statements Public Private t-value p-value
Time Taken in Transaction Now 3.66 3.96 -1.342 0.182 Responding Queries of the Customer 3.56 4.02 -2.161 0.003**
Complexity in Transactions 3.30 2.96 1.579 0.115 Time Taken in Making of Draft 3.94 3.80 0.603 0.547 Availability of Staff at Counter 3.52 3.82 -5.306 0.000**
Banking Hours 3.60 3.58 4.38 0.000**
Knowledge of Staff about Banks Products
3.74 4.35 -2.416 0.017**
* *Values are significant at 5 % level
Table 7.25 displays the data regarding the processing of transactions in both
public and private sector banks. Regarding the processing of transaction, statistical
difference was found in four out of seven statements. Private sector banks are more
responsible and quick in responding the queries of customers(4.02) than public sector
banks(3.56) As regard the knowledge of staff about bank products(4.55); private sector
banks are highly satisfied with their knowledge up-gradation and perceive that e-banking
has reduced the availability of staff at counter(3.82) and has reduced the banking hours
to the large extent.
Table 7.26
Sector-wise Employees’ Perception on Convenience and Security
Statements Public Private t-value p-value
Ease of Use 3.80 4.66 -3.524 0.000**
Reduction in Monotony of Work 3.70 4.28 -3.185 0.001**
Security and Privacy 3.88 3.80 0.402 0.688 Increase in Trust 3.80 3.68 0.645 0.520 Reduction of Risk 4.12 3.58 2.878 0.004**
Job Losses 2.88 2.88 0.000 1.000 Reduced Interaction with People 3.63 3.50 0.463 0.644 ** Values are significant at 5 % level
Table 7.26 depicts that as per employee perception in three out of seven
statements, statistical difference found to be significant at 5% level. Private sector
employees perceive that e-banking services are easy to use (4.66) and has also reduced
219
the monotony(4.28). However, public sector banks have high mean score with regard to
reduction of risk in transaction(4.12) after e-banking adoption. Regarding the job losses
and interaction with the people, trust and privacy, there seems to be no statistical
difference in public and private sector banks.
Table 7.27
Sector-wise Employees’ Perception on Core Banking Solution
Statements Public Private t-value p-value
Facilitate Centralized Data Base 4.18 3.68 -5.069 0.000**
Online Real- time Data Availability 3.78 3.58 -0.909 0.365 Any Branch Banking 4.06 3.80 -1.38 0.168 Facilitative Launch of New Products 3.96 4.08 0.616 0.539 Shifting of Time Consuming Activities to Data Centre
3.74 3.80 0.239 0.811
High Load on Concentrated Branches 3.52 3.62 0.425 0.671 * *Values are significant at 5 % level
Table 7.27 reveals that the difference between item number 2,3,4,5,6 under
core banking solution is insignificant. The difference was significant at 5% level only in
one dimension namely ‘facilitating the centralized data base’ and public sector
employees seems to have more agreed upon it (4.18) in comparison to private sector
banks (3.68). In the all other dimensions, there seems to be no statistical difference.
Table 7.28
Sector-wise Employees’ Perception on Electronic Data Interchange
Statements Public Private t-value p-value
Reduces Inventory Holdings 3.92 3.88 0.200 0.842 Reduces Mailing Costs 3.74 3.78 -0.197 0.844 Automatic Reconciliation of Remittance 3.74 3.78 -0.214 0.831 Less Reliance on Human Interpretation 3.82 3.74 0.408 0.684 Enables Paperless Transaction 3.92 4.60 -2.999 0.003**
** Values are significant at 5 % level
Table 7.28 carries the data showing EDI impact on both public and private sector
banks. E-banking has facilitated centralized data base and ensured the interchanging of
data electronically which has ensured reduction of paper transaction, mailing cost, less
reliance on human interpretation etc. The difference was significant in one variable in EDI
that is e-banking has ‘ensured paperless transaction’ and private sector banks employees
are strongly agreed upon it (4.60). The employees in public sector perceived that EDI has
reduced the reliability on human interpretation (3.82) as every single and small activity is
done through computer based terminals.
220
Table 7.29
Sector-wise Employees’ Perception on Real Time Gross Settlement System
Statements Public Private t-value p-value
Processing and Settlement on Real Time 4.02 3.72 1.442 0.152 Payment are Settled Transaction by Transaction
3.88 3.60 1.452 0.149
Eliminated Settlement Risk 3.84 3.58 1.261 0.210 Immediate Finality of Transaction 3.88 3.68 1.010 0.315 Settlement on FIFO Basis and Priority Wise
3.30 3.52 -0.947 0.346
Immediate Credit and Transparent Pricing
3.60 4.40 -3.305 0.001**
** Values are significant at 5 % level
Table 7.29 depicts that as per the employees’ perception both the public and
private sector banks are performing well as far as real time gross settlement system is
concerned. It has improved the operational performance of the banks to a large extent. The
statistical difference was significant only in one statement related to the immediate credit
and transparent pricing. Private sector banks are having greater transparency in the pricing
as well as settlement and transfer of credit in the transactions.
Table 7.30
Sector-wise Employees’ Perception on Benefits of E-banking
Statements Public Private t-value p-value
Increase in Employee Productivity 4.08 4.16 -0.431 0.667 Increase in Branch Productivity 3.98 4.10 -0.713 0.477 Increase in Bank Productivity 3.78 4.08 -1.623 0.107 Up-to date Information 4.00 4.08 -0.370 0.712 Innovation in Products and Services 3.72 3.80 -0.366 0.715 Rush of Customers in Bank 3.40 3.58 -0.697 0.487 ** Values are significant at 5 % level
The data pertaining to the benefits of e-banking and their impact on the overall
working of both public and private sector banks has been presented in Table 7.30.
Employee productivity has increased more in private sector banks (4.16) than in public
sector banks (4.08). Branch productivity (4.10) is also high in private sector banks. The
impact of e-banking on the overall bank productivity (4.08), up-to-date information
(4.08), innovation in products and services (3.80), and rush of customers in the banks
(3.58); private sector banks has been greater than that of the public sector banks. This
shows that operational performance of private sector banks has improved a lot through
electronic banking and public sector banks lag behind in this regard.
221
The perception of employees regarding the strategic and operational value of
electronic banking and its impact on their working conditions and performance of the
banks has been studied. It has been observed that both public and private sector banks
are providing electronic banking services to their customers under the guidelines of the
Reserve Bank of India and to retain their customers in the competitive financial market.
The employees also believe that these services are essential for the survival and growth
of banking sector. So, it is mandatory to provide such services, and employees also feel
comfortable in this e-banking environment. This perception is supported by the fact that
a large number of employees gave supportive and positive response regarding e-banking
usage in their respective banks and its impact on banks efficiency and productivity.
From an operational perspective, the study indicates that banks have realized
significant benefits with e-banking. Firstly, e-banking lowers the transaction per cost, thus,
contributing to the cost cut and helpful in making the cost cutting policies. Secondly, e-
banking offers a lot of services to customers like debit cards, credit cards, EFT, fund
transfer, bill payment, etc. Revenue generated from such services is termed as value
addition and profit generated for the banks. Thirdly, launching of more products like
internet, ATM, mobile banking, etc. has improved the quality of service and increased the
transactions in banks. It has been due to these benefits that banks are opting e-banking
services at a large scale. The customers demand more and more new e-banking services,
making it difficult for the banks to come up to their expectations. But with the co-
operation, adoption and fast learning process of the employees, e-banking has
revolutionized the system as it is easily adaptable, more responsive and has become more
customer-oriented which, in turn, has improved the operational performance and
productivity of the banks.