e-banking practices and customer satisfaction – in...
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E-BANKING PRACTICES AND CUSTOMER SATISFACTION – IN THANJAVUR DISTRICT,
TAMILNADU : AN EMPIRICAL STUDY
Thesis submitted to the Bharathidasan University for
the award of the degree of
DOCTOR OF PHILOSOPHY IN COMMERCE
By
S.P. DHANDAYUTHAPANI
Under the guidance of
Dr. M. SELVACHANDRA, M.Com., M.B.A., M.Phil., Ph.D., Associate Professor,
Post-graduate and Research Department of Commerce, A.D.M. College for Women (Autonomous),
Nagapattinam – 611 001.
BHARATHIDASAN UNIVERSITY
TIRUCHIRAPPALLI – 620 024.
MAY – 2012
Dr. M. SELVACHANDRA, M.Com. M.B.A., M.Phil., Ph.D., Associate Professor and Research Advisor in Commerce, A.D.M. College for Women (Autonomous), Nagapattinam 611 001, Tamilnadu, India Email : [email protected] Mobile : +91 98426 39030
Date :
CERTIFICATE
This is to certify that the dissertation entitled “E-BANKING PRACTICES
AND CUSTOMER SATISFACTION – IN THANJAVUR DISTRICT OF
TAMILNADU : AN EMPIRICAL STUDY” submitted to Bharathidasan
University, Tiruchirappalli in partial fulfillment of the requirements for the award of
the degree of Doctor of Philosophy in Commerce is a record of original research
work carried out by Mr. S.P. DHANDAYUTHAPANI, under my supervision and
guidance and the thesis has not formed the basis for the award of any
Degree/Diploma/ Associateship /Fellowship or similar title to any candidate of any
university.
(M. SELVACHANDRA)
DECLARATION
I hereby declare that the thesis entitled “E-Banking Practices And
Customer Satisfaction – In Thanjavur District, Tamilnadu : An Empirical
Study” submitted to Bharathidasan University, Tiruchirappalli in partial fulfillment
of the requirements for the award of the degree of Doctor of Philosophy in
Commerce is a record of original research work done by me under the supervision
and guidance of Dr. M. SELVACHANDRA , M.Com., M.B.A., M.Phil., Ph.D.,
Associate Professor, Post-graduate and Research Department of Commerce,
A.D.M. College for Women (Autonomous), Nagapattinam 611 001, TamilNadu and
that the thesis has not formed the basis for the award of any
Degree/Diploma/Associateship/Fellowship or other similar title.
Signature of the Candidate
(S.P. DHANDAYUTHAPANI)
ACKNOWLEDGEMENT
At the outset let me prostrate and express my heartfelt gratitude to the Lord
Almighty who motivated and stood by my side to accomplish this noble task.
I express my deep sense of gratitude to my guide and supervisor,
Dr. M. SELVACHANDRA, Associate Professor in Commerce, A.D.M. College
for Women (Autonomous), Nagapattinam. Whose constant and valuable guidance
made the study possible in spite of her extremely busy academic pursuits; she
always spared time for me. In fact, she has created in me a life-long impression by
this unstinted kindness, affectionate guidance, critical comments, valuable
suggestions, advice and noble generosity. But for this support and encouragement,
the present work would not have seen in the light of the day.
My sincere thanks are due to Dr. A. SivakamaSundari, M.A., M.Phil.,
Ph.D., Principal, A.D.M. College for Women (Autonomous), Nagapattinam,
Dr. S. Mythili, Head, Department of Commerce and other faculty members of the
Department of Commerce, A.D.M. College for Women (Autonomous),
Nagapattinam.
I am grateful to Dr. S. Arunachalam, Principal, Trinity College for Women,
Namakkal for his association with the Doctoral committee and also for his valuable
advice at different stage of the entire study.
My sense of gratitude to Prof. S. Pandian, Prof. S. Kanakasundaram, Prof.
S. Selvaraj, Department of Commerce, Govt. Arts College (Autonomous),
Kumbakonam for their initiation and continuous support to execute this study.
It is my duty to thank Prof. R Indirajith, Assistant Professor of Commerce,
Thiru. Vi.Ka. Govt Arts College, Tiruvarur and Mrs. K.R. Mahalaxmi, Assistant
Professor of Management Studies, Anna University of Technology, Tiruchirappalli
for their contribution to completion of this study in time.
I am very thankful to Mrs. S. Bharathi Sivashanmugam, Govt Girls’ Higher
Secondary School, Kumbakonam. Despite her tight schedule compelling
preoccupations, she thoroughly read the manuscript and contributes valuable
suggestion in finalizing the script.
I convey my heartfelt thanks to my beloved parents
Mr. & Mrs. Parmasivam Seethalakshmi for their regular support and
encouragement of my achievements.
I am grateful to my beloved wife Mrs. R. Rubika, and my brothers
Mr. S.P. Santhanam, S.P. Sivasubramaniam, S.P. Ambi Annamalai, and my
sisters Mrs. M. Suseela Mohan, Mrs. P. Prema Jawahar, Mrs. P. Ananthai
Balaji and Mrs. P. Sundrai Jawahar has helped me to become what I am today.
I am thankful to Mr. R. Ravikumar, Advocate, Mrs. S. Sumathi,
Headmistress, for their active comments and encouragement for the successful
completion of this work.
I extend my special thanks to my family members, R.J. Dhivahar,
R.J. Sivaram, M. Lakshmipriya, M. Vishnupriya, B. Abirami, B. Krishna
M.J. Jagadish, P.S. Padmapriya and P.S. Shivadarshini for their immense help to
execute the work in time.
(S.P. DHANDAYUTHAPANI)
CONTENTS
PAGE
Declaration
Certificate
Acknowledgement
List of Tables
List of Figures
CHAPTER
I RESEARCH DESIGN AND EXECUTION 1
OF THE STUDY
II REVIEW OF LITERATURE 24
III E-BANKING SCNEARIO IN INDIA 63
IV AWARENESS AND CUSTOMER SATISFACATION 115 ON E-BANKING SERVICES – AN ANALYSIS
V PROBLEMS IN E-BANKING SERVICES 176
VI SUMMARY OF FINDINGS, SUGGESTIONS AND 189 CONCLUSIONS
BIBLIOGRAPHY
QUESTIONNAIRE
LIST OF TABLES
Table No.
Title Page. No.
3.1 Branches and ATMs of State Bank of India 98
3.2 Branches and ATMs of ICICI Bank 113
4.1 Sex wise distribution of Respondents 117
4.2 Age wise distribution of Respondents 117
4.3 Educational qualification of the respondents 118
4.4. Occupation of the respondents 119
4.5 Income size of the respondents 120
4.6 Utilization of E-Banking services 121
4.7 Duration of using E-Banking services 123
4.8 Customer satisfaction towards accessibility of e-banking services
124
4.9 Customer satisfaction towards convenience of e-banking services
126
4.10 Customer satisfaction towards privacy of e-banking services 127
4.11 Customer satisfaction towards security of e-banking services 128
4.12 Customer satisfaction towards design of e-banking services 130
4.13 Customer satisfaction towards content of e-banking services 131
4.14 Customer satisfaction towards speed of e-banking services 132
4.15 Customer satisfaction towards fees and charges of e-banking services
133
4.16 Overall mean score 134
4.17 Customer satisfaction towards ATM services 137
4.18 Customer satisfaction towards Internet Banking services 141
4.19 Customer satisfaction towards Mobile Banking services 145
4.20 Customer satisfaction towards overall of E-Banking services 150
4.21 Customer satisfaction private and public sector between Banks (ANOVA)
153
4.22 Inter Correlation Matrix of Customer satisfaction - ATMs 155
4.23 Inter Correlation Matrix of Customer satisfaction – Internet Banking
156
4.24 Inter Correlation Matrix of Customer satisfaction – Mobile Banking
157
4.25 Sex and Customer satisfaction level of ATMs 158
4.26 Sex and Customer satisfaction level of Internet Banking 159
4.27 Sex and Customer satisfaction level of Mobile Banking 160
4.28 Age and Customer satisfaction level of ATMs 161
4.29 Age and Customer satisfaction level of Internet Banking 162
4.30 Age and Customer satisfaction level of Mobile Banking 163
4.31 Education and Customer satisfaction level of ATMs 164
4.32 Education and Customer satisfaction level of Internet Banking 165
4.33 Education and Customer satisfaction level of Mobile Banking 166
4.34 Occupation and Customer satisfaction level of ATMs 167
4.35 Occupation and Customer satisfaction level of Internet Banking 168
4.36 Occupation and Customer satisfaction level of Mobile Banking 169
4.37 Income and Customer satisfaction level of ATMs 170
4.38 Income and Customer satisfaction level of Internet Banking 171
4.39 Income and Customer satisfaction level of Mobile Banking 172
4.40 Chi-square test result on ATM services 173
4.41 Chi-square test result on Internet Banking services 174
4.42 Chi-square test result on Mobile Banking services 175
5.1 Problems faced by ATMs users 183
5.2 Problems faced by Mobile Banking users 185
5.3 Problems faced by Internet Banking users 188
LIST OF FIGURES
Figure No.
Title Page No.
4.1 Usage of E-Banking services 122
4.2 Overall mean score 135
4.3 Customer satisfaction level of ATMs 140
4.4. Combined customer satisfaction level of internet Banking 144
4.5 Combined customer satisfaction level of Mobile Banking 149
4.6 Combined customer satisfaction level of E-Banking services 152
1
CHAPTER –I
DESIGN AND EXECUTION OF THE STUDY
Introduction
The banking scenario in India in the post liberalization and deregulated
environment has witnessed sweeping changes. The tremendous advances in
technology and the aggressive infusion of information technology had brought in a
paradigm shift in banking operations. For the banks, technology has emerged as a
strategic resource for achieving higher efficiency, control of operations,
productivity and profitability. For customers, it is the realization of their
‘Anywhere, Anytime, Anyway’ banking dream. This has prompted the banks to
embrace technology to meet the increasing customer expectation.
Technology to start with is a business enabler and now has become a
business driver. The banking institutions cannot think of introducing a financial
product without information technology support be it customer service,
transactions, remittances, audit, marketing, pricing or any other activity in the
banks. Information Technology plays an important role not only to complete the
activity with high efficiency but also has the potential to innovate and meet the
future requirements. Information Technology has therefore introduced new
business paradigms and is increasingly playing a significant role in improving the
services in banking industry.
In the above backdrop it becomes imperative to dwell on the evolution of
Information Technology in banks before embarking on the various aspects of
e-banking. Information Technology came into picture as early as in the 1980’s in
banking industry through the Rangarajan Committee recommendations and banks
have given utmost importance to the technology since the last 25 years.
The Reserve Bank of India is constantly pursuing the banks from 1980’s to
2
introduce computerization at branch level and to improve the quality of customer
service through technology.
E-Banking implies performing basic banking transaction by customers
round the clock globally through electronic media. Alternatively electronic
banking can be defined as “delivery of bank’s services to a customer at his office
or home by using electronic technology and this has resulted in conceptualization
of virtual banking”. In traditional banking, the customer has to visit the branch of
the bank in person to perform the basic banking operations viz., account enquiry,
fund transfer and cash withdrawal. The brick and mortar structure of a bank is
essential to perform the banking functions.
On the other hand, E-Banking enables the customers to perform the basic
banking transactions by sitting at their office or at homes through PC or LAPTOP.
The customers can access the bank’s website for viewing their account details and
perform the transactions on account as per their requirements. Thus, today’s
banking is no longer confined to branches. Customers are being provided with
additional delivery channels which are more convenient and are cost effective to
the banks. This has resulted in shrinking of geographical boundaries, easy reach to
the clientele, reliable and secure services. The E-Banking services include
Automated Teller Machine, Plastic Card Currency, Internet Banking and
Electronic Clearing Services.
Definition of the e-Banking
The concept of electronic banking has been defined in many ways. Daniel
(1999) defines electronic banking as the delivery of banks' information and
services by banks to customers via different delivery platforms that can be used
with different terminal devices such as a personal computer and a mobile phone
3
with browser or desktop software, telephone or digital television. Pikkarainen et al
(2004) define internet banking as an "internet portal, through which customers can
use different kinds of banking services ranging from bill payment to making
investments". With the exception of cash withdrawals, internet banking gives
customers access to almost any type of banking transaction at the click of a mouse
(De Young, 2001). Indeed the use of the internet as a new alternative channel for
the distribution of financial services has become a competitive necessity instead of
just a way to achieve competitive advantage with the advent of globalization and
fiercer competition (Flavián et al, 2004; Gan and Clemes, 2006). Banks use online
banking as it is one of the cheapest delivery channels for banking products
(Pikkarainen et al, 2004). Such service also saves the time and money of the bank
with an added benefit of minimizing the likelihood of committing errors by bank
tellers (Jayawardhena and Foley, 2000). Robinson (2000) believes that the supply
of internet banking services enables banks to establish and extend their relationship
with the customers. There are other numerous advantages to banks offered by
online banking such as mass customization to suit the likes of each user,
innovation of new products and services, more effective marketing and
communication at lower costs (Tuchilla, 2000), development of non-core products
such as insurance and stock brokerage as an expansion strategy, improved market
image, better and quicker response to market evolution (Jayawardhena and Foley,
2000). Wise and Ali (2009) argued that many banks want to invest in ATMs to
reduce branch cost since customers prefer to use them instead of a branch to
transact business. The financial impact of ATMs is a marginal increase in fee
income substantially offset by the cost of significant increases in the number of
customer transactions. The value proposition however, is a significant increase in
the intangible item "customer satisfaction". The increase translates into improved
customer loyalty that in result in higher customer retention and growing
organization value. Internet banking is a lower-cost delivery channel and a way to
4
increase sales. Internet banking services has become one of the most important
factors in the business economy today.
Customer Satisfaction
Before proceeding further, it is best that one fully understands the
definition of the phrase ‘Customer Satisfaction`. The phrase does not only express
a happy customer, but rather complex than that. Customer satisfaction is actually a
term most widely used in the business and commerce industry. It is a business term
explaining about a measurement of the kind of products and services provided by a
company to meet its customer’s expectation. To some, this may be seen as the
company’s key performance indicator (KPI).
In a competitive marketplace where businesses compete for customers,
customer satisfaction is seen as a key differentiator and increasingly has become a
key element of business strategy. There is a substantial body of empirical literature
that establishes the benefits of customer satisfaction for firms. It is well established
that satisfied customers are key to long-term business success (Kristensen et al.,
1992; Zeithami et al., 1996; McColl-Kennedy and Scheider, 2000). It also defined
as a global issue that affects all organizations, regardless of its size, whether profit
or non-profit, local or multi-national. Companies that have a more satisfied
customer base also experience higher economic returns (Aker and Jocobsson,
1994; Bolton, 1998; Yeung et al., 2002).
Consequently, higher customer satisfaction leads to greater customer
loyalty (Yi, 1991; Anderson and Sulivan, 1993 Boulding et al., 1993) which in turn
leads to higher future revenue (Fornell, 1992; Bolton, 1998). For that matter, many
market leaders are found to be highly superior-customer-service orientated. They
have been rewarded with high revenue and customer retention as well. For that
5
matter, organizations in the same market sector are compelled to assess the quality
of the services that they provide in order to attract and retain their customers.
Apparently, many researchers conceptualize customer satisfaction as an
individual’s feeling of pleasure (or disappointment) resulting from comparing the
perceived performance or outcome in relation to the expectation (Oliver, 1981;
Brandy and Robertson, 2001; Lovelock, Patterson and Walker, 2001). There are
two general conceptualizations of satisfaction here, namely, the transaction-
specific satisfaction and the cumulative satisfaction (Boulding et al., 1993; Jones
and Suh, 2000; Yi and La, 2004). Transaction-specific satisfaction is the
customer’s very own evaluation of his or her experience and reaction towards a
particular service encounter (Cronii and Taylor, 1992; Boshoff and Gray, 2004).
This reaction is expressed by the customer who experiences a product or service
for the first time. Meanwhile, cumulative satisfaction refers to the customer’s
overall evaluation of the consumption experience to date (Johnson, Anderson and
Fornell, 1995); an own accumulation of contacts with services provided them from
day-to-day. It is from this accumulation that customers establish a personal
standard which is used to gauge service quality. However, in general, it is agreed
that customer satisfaction measurement is a post-consumption assessment by the
user, about the products or services gained (Churchill and Surprenant, 1982;
Yuksel and Rimmington, 1988).
Service Quality
Without any doubt, service quality is very important component in any
business related activity. This is especially so, to marketer a customer’s evaluation
of service quality and the resulting level of satisfaction are perceived to affect
bottom line measures of business success (Lacobucci et al.,1994). Customer
expectations are beliefs about a service that serve as standards against which
6
service performance is judged (Zrithaml et al., 1993); which customer thinks a
service provider should offer, rather than on what might be on offer (Parasuram et
al., 1988). To some, service quality can also be defined as the difference between
customer’s expectations for the service encounter and the perceptions of the
service received.
According to the service quality theory (Oliver, 1980), it is predicted that
customers will judge that quality as ` low` if performance does not meet their
expectations and quality as `high` when performance exceeds expectations.
Closing this gap might require toning down the expectations or heightening the
perception of what has actually been received by the customer (Parasuraman et al.,
1985). According to Gronroos (1982), perceived quality of a given service is the
result of an evaluation process since consumers often make comparison between
the services they expect with perceptions of the services that they receive. He
concluded that the quality of service is dependent on two variables: Expected
service and Perceived service. Quality spells superiority or excellence (Taylor and
Baker, 1994) (Zeithaml, 1988), or, as the consumer’s overall impression of the
relative inferiority / superiority of the organization and its services (Bitner and
Hubbert, 1994; Keiningham et al., 1994-95). Consumer behavioural intentions are
also influenced by the standards of service quality (Bitner, 1990; Cronin and
Taylor, 1992, 1994; Choi et al., 2004).
Perceptions Vs Satisfaction:
Customer satisfaction could be satisfaction with the quality of
product/service, the nature of relationship, the price/performance ratio of a
product/service, and the ability of the product/service to meet customer's
expectations (Brown.C, 1998). While perception of service quality is considered
more long-term (Parasuraman.A et al, 1988), satisfaction is more transaction-
7
specific and transitory, and service quality is considered a predecessor of
satisfaction (Dick. et al, 1994). Therefore, it is clear that perceived service quality
and satisfaction are closely related. However, the difference between the two can
be seen by the fact that a consumer can be satisfied with a specific service, but at
the same time may not feel that the range of services was of high quality. Using a
similar example, Storbacka et al (1994) explored this aspect as: "a customer could,
therefore, respond on a questionnaire that a particular bank is of high quality, even
if this did not mean this customer was satisfied with using the bank. It might have
too high interest rates on loans or it might not fit the customer's preferences for
some other reason". Sohail.M.S et al (2008) measured the quality of service from
customers' perspective. With an enormous growth in i-banking, they discussed how
banks can be competitive by providing quality services. Results were based on a
factor analysis identifying three factors that influence users' evaluation of service
quality of internet banking services. These factors were labeled as "efficiency and
security", "fulfillment" and "responsiveness".
Customer Satisfaction in Retail Banking
Customer satisfaction and service quality are inter-related. The higher the
service quality, the higher is the customer satisfaction. Many agree that in the
banking sector, there are no recognized standard scales to measure the perceived
quality of a bank service. Thus, competitive advantage through high quality service
is an increasingly important weapon to survive. Measuring service quality seems to
pose difficulties to service providers because of the unique characteristics of
services: intangibility, heterogeneity, inseparability and perishability (Bateson,
1985). Because of these complexities, various measuring models have been
developed for measuring perceptions of service quality (Gro¨nroos, 1983; 1990;
Parasuraman et al., 1985; 1988;, 1991; Stafford, 1996; Bahia and Nantel, 2000;
Aldlaigan and Buttle, 2002). The SERVQUAL model of Parasuraman et al. (1988)
8
proposes a five-dimensional construct of perceived service quality: tangibles;
reliability; responsiveness; assurance; and empathy – with items reflecting both
expectations and perceived performance. Service quality has become an important
research topic because of its apparent relationship to costs (Crosby, 1979),
profitability (Buzzell and Gale, 1987; Rust and Zahorik, 1993; Zahorik and Rust,
1992), customer satisfaction (Bolton and Drew, 1991; Boulding et al., 1993),
customer retention (Reichheld and Sasser, 1990), and positive word of mouth.
Factors affecting e-banking practices
Accessibility
Accessibility defines as the ability of users to access information and
services from the web is dependent on many factors. These include the content
format; the user's hardware, software and settings; internet connections; the
environmental conditions and the user's abilities and disabilities (Godwin-Jones
2001; Hackett and Parmanto, 2009). The term "web accessibility" generally relates
to the implementation of website content in such a way as to maximize the ability
of users with disabilities to access it. For example, providing a text equivalent for
image content of a web page, allows users with some visual disabilities access to
the information via a screen reader. The techniques and approaches that create
more accessible web pages for people with disabilities also address many other
access issues such as download speed and discoverability (Godwin-Jones 2001;
Hackett et al, 2004; Hackett and Parmanto, 2009).
Convenience
E-banking provides higher degree of convenience that enables customers to
access internet bank at all times and places. Apart from that, the ease of access of
computers is perceived as a measure of relative advantage (Daniel, 1999, Black et
al, 2001; Polatoglu and Ekin, 2001; Gerrard and Cunningham, 2003). Johnston
9
(1995) revealed that there are some service quality determinants that are
predominantly satisfiers and others that are predominantly dissatisfiers with the
main sources of satisfaction being attentiveness, responsiveness, care and
friendliness. The main sources of dissatisfaction are integrity, reliability,
responsiveness, availability and functionality.
According to Ainscough and Luckett (1996), the provision of customer
interactivity is an important criterion that attracts users in the delivery of e-
banking. Gerrard and Cunningham (2003) also identify other factors of paramount
importance in ensuring the success of e-banking, i.e. the ability of an innovation to
meet users' needs using different feature availability on the web site. For instance,
the provision of interactive loan calculators, exchange rate converters, and
mortgage calculators on the web sites draw the attention of both users and non-
users into the bank's web site. A UK study uncovered five key service quality
attributes, such as security related issues, convenience, speed and timeliness of the
service, and product variety/diverse features (White and Nteli, 2004).
Privacy
Customers have doubts about the trust ability of the e-bank's privacy
policies (Gerrard and Cunningham, 2003). Trust has striking influence on user's
willingness to engage in online exchanges of money and personal sensitive
information (Friedman et al, 2000; Wang et al, 2003). Privacy is an important
dimension that may affect users' intention to adopt e-based transaction systems.
Encryption technology is the most common feature at all bank sites to secure
information privacy, supplemented by a combination of different unique
identifiers, for instance, a password, mother's maiden name, a memorable date, or a
few minutes of inactivity automatically logs users off the account. Besides, the
Secure Socket Layer, a widely-used protocol use for online credit card payment, is
10
designed to provide a private and reliable channel between two communicating
entities; the use of Java Applet that runs within the user's browser; the use of a
Personal Identification Number, as well as an integrated digital signature and
digital certificate associated with a smart card system (Hutchinson and Warren,
2003).
Security
Assurance about security relates to the extent to which the web site
guarantees the safety of customers` financial and personal information, an area
which has witnessed a proliferation of research interest (Kimery and McCord,
2002; Miyazaki and Krishnamurthy, 2002). Security can be assured by providing a
privacy statement and information about the security of the shopping mechanisms
and by displaying the logos of trusted third parties. For example, displaying trusted
third party logo guarantees a certain level of security protection and has been
shown to significantly influence how consumers regard the trustworthiness of e
vendors (Jiang et al, 2008). Internet banking was made possible by the creation of
Web browsers. In this mode of online banking, consumers do not have to purchase
additional software (all they need is the browser), store any data on their computer,
backup any data, or wait for software upgrades or new versions (Kolsaker and
Payne, 2002; Dong-Her et al, 2004). All transactions occur on a secure server of a
bank via the internet. The bank has all of the required data and software to execute
the transactions. Customers go the bank's Web site, log in, and then take advantage
of the bank's internet services. Typical bank services are account access and
review, transfers of funds between accounts, bill payment, and then a widening
variety of new services and products. Security plays an important role in internet
banking and so there are several protocols for internet security of encrypted data
packets (Kolsaker and Payne, 2002; Dong-Her et al; 2004). Customers are not
aware of the encryption, however, only certain versions of popular internet
11
browsers are acceptable to some banks due to their security limitations (Kolsaker
and Payne, 2002; Dong-Her et al; 2004).
Design
The goal of aesthetic design is to make a web site visually attractive and
enjoyable. Proctor et al (2002, 2003) discussed content preparation in a broad
sense and identified its four aspects: knowledge elicitation, information
organization and structure, information retrieval, and information presentation.
During design, and prior to implementation, it is strongly recommended that users
of different ages, and with a range of capabilities and limitations be engaged to
trial the new service and provide feedback. Financial institutions should test
accessibility of their customer websites with both automated tools and user
accessibility trials.
Content
Jayawardhena and Foley (2000) and Pikkarainen et al (2004) claim that
content on online banking on the web site is one of the factors influencing online-
banking acceptance. On the other hand, quality designs, graphics or colours and the
propensity to portray good image of the bank would enhance efficient use of
navigation. In the context of internet banking, there is a growing body of research
that has looked at influences on customer satisfaction. Jayawardhena and Foley
(2000) illustrated that such web site features as speed, web site content and design,
navigation, interactivity and security all influence user satisfaction whereas
Broderick and Vachirapornpuk (2002) found that the level and nature of customer
participation had the greatest impact on the quality of the service experience and
issues such as customers' zone of tolerance, the degree of role understanding by
customers and emotional response potentially determined, expected and perceived
service quality.
12
Yang and Fang (2004) found that ease of use and usefulness are important
factors in evaluating online service quality. Earlier Doll and Torkzadeh (1988)
identified five quality dimensions that have an impact on “end-user” satisfaction in
an online environment: content, accuracy, format, ease of use, timeliness. Thus, it
is hypothesized that content has positive effect on customer satisfaction.
Speed
Hoffman and Novak (1996) find that there is a significant correlation
between download speed and user satisfaction. Speed of download depends on the
nature of the site downloaded content, the computing hardware and method of
connection used to download information (Jayawardhena and Foley, 2000). Most
sites demonstration is small snapshots, and some users have to download the
program in order to view the demonstration. Most people perceive downloading
may import unwanted viruses, and consume hard disk space. Very often, slow
response time after any e-interaction leads to a delay of service delivery and makes
consumers unsure about whether or not the transaction is completed (Jun and Cai,
2001). Johnston (1997) illustrates that certain actions, such as increasing the speed
of processing information and customers, are likely to have an important effect in
terms of pleasing customers; however other activities, such as improving the
reliability of equipment, will lessen dissatisfaction rather than delight customers
and suggests that it is more important to ensure that the dissatisfiers are dealt with
before the satisfiers.
Fees and Charges
Service quality attributes in e-banking industry are important since human-
internet interaction is the main service delivery and communication channel.
Offering high quality services to satisfy consumers' needs, at lower costs, are
potential competitive advantage of e-banking. Some studies show that e-banking
13
has successfully reduced operating and administrative costs (Devlin, 1995; Siriluck
and Speece, 2003). Cost savings have helped e-based banks offer lower or no
service fees, and offer higher interest rates on interest-bearing accounts than
traditional banks (Gerlach, 2000; Jun and Cai, 2001).
Statement of Problem
The Indian Banking Industry has undergone radical changes due to
liberalization and globalization measures undertaken since 1991. Today, Indian
Banking Industry is one of the largest in the world. There has been a great surge in
efficient customer services. A highly satisfied and delighted customer is a very
vital non-financial asset for the banks in the emerging Information Technology era.
The curtsey, accuracy & speed are like a crown factors for a bank.
Indian banking has come a long way from being a sleepy business
institution to a highly proactive and dynamic entity. This transformation has been
largely brought about by large scale liberalization and economic reforms that have
allowed banks to explore new business opportunities rather than generating
revenues from conventional streams such as borrowing and lending. Economic
reforms and the entry of private players have seen nationalized banks revamp their
services and product portfolios to incorporate new, innovative customer-centric
schemes. Hence, Indian banking has finally woken up to the surging demands of
the ever-discerning Indian consumer.
Nowadays, due to the increase in competition, customer satisfaction is
considered to be the most important thing in banking services. Customer service is
the primary end of any bank. A customer always wants something and expects that
the bank should come up to the level to fulfill those needs. Service quality is about
meeting customers’ needs and requirements, and how well the service level
14
delivered matches customer expectations. Service quality in banking implies
consistently anticipating and satisfying the needs and expectations of customers.
Over the last decade India has been one of the fastest adopters of
information technology, particularly because of its capability to provide software
solutions to organizations around the world. This capability has provided a
tremendous impetus to the domestic banking industry in India to deploy the latest
technology, particularly in the Internet banking and e-commerce arenas.
The revolution of information technology has influenced almost every facet
of life, among them is the banking sector. The introduction of electronic banking
has revolutionized and redefined the ways banks were operating. As technology is
now considered as the main contribution for the organizations’ success and as their
core competencies. So the banks, be it domestic or foreign are investing more on
providing on the customers with the new technologies through e-banking.
E-banking is a major invention that has changed the business of banking.
World over banks are reorienting their strategies towards new opportunities offered
by e-banking. The recent trend shows that most ‘brick and mortar’ banks are
shifting from a ‘product-centric’ model as they develop their new e-banking
capabilities. PC banking, mobile banking, ATM, electronic funds transfer, account
to account transfer, paying bills online, online statements and credit cards are the
services provided by banks. Also the feature which is commonly unique to internet
banking includes importing data into personal accounting software. Some online
banking platforms support account aggregation to allow the customers to monitor
all of their accounts in one place whether they are with their main bank or with
other institutions. Banking through internet is considered as a complimentary
delivery channel for the services rather than a substitute for the brick and mortar
15
banking branches. e-banking has increased the competition among the banks and
both domestic and foreign banks are offering more and more modern ways of
e-banking.
Today banking industry has undergone a sea change. The main work of
Bank employees is to provide quality information (which is consistent with all
branches and direct access channels like ATMs, Phone Banking, Mobile Banking
and Net Banking) at the branch at customer finger tips. Online banking (or Internet
banking) allows customers to conduct financial transactions on a secure website
operated by their bank. E-banking services are delivered to customers through the
Internet and the web using Hypertext Markup Language (HTML). In order to use
e-banking services, customers need Internet access and web browser software. One
of the main concerns of e-banking is security. Without great confidence in security,
customers are unwilling to use a public network, such as the Internet, to view their
financial information online and conduct financial transactions. Some of the
security threats include invasion of individuals' privacy and theft of confidential
information. Banks with e-banking service offer several methods to ensure a high
level of security.
The banking industry in India like many other financial services industries
is facing a rapidly changing market, new technologies, economic uncertainties,
fierce competition, and more demanding customers; and the changing climate has
presented an unprecedented set of challenges. In the current circumstances a
question arises whether the customers are satisfied or not and what are the
elements of retail banking in general e-banking in particular which lead to the
satisfaction or dissatisfaction of customers. The knowledge of current levels of
satisfaction and, in particular, the primary factors of satisfaction are beneficial to
16
those in the industry, thereby allowing them to focus and further strengthen the key
areas that lead to highly satisfied customers.
E-banking services not only can create new competitive advantages,
perhaps, but also can improve their relationships with customers for banks.
Obviously, e-banking can offer better services required by corporations and
individuals, it could be a strategic niche no matter for banks or their customers.
Conceivably, how to implement e-banking successfully is becoming a critical
management issue.
Determining factors affecting customer satisfaction with e-banking is an
essential part of a bank's strategy formulation process in an emerging economy like
India. It has become imperative for both public and private sector banks to perform
to the best of their abilities to retain their customers by catering to their explicit as
well as implicit needs. Many a times it happens that the banks fail to satisfy their
customer which can cause huge losses for banks. Therefore, the main purpose of
the study is to know the e-banking services provided by the banks in the study area
and this research study makes an attempt to analyze the overall satisfaction of the
customer regarding the e-banking transactions in the public and private sector
banks in Thanjavur district of Tamilnadu.
Scope of the study
With the advent of liberalization policy and RBI’s easy norms several
public, private and foreign banks have entered in Indian banking sector which has
given birth to cut throat competition amongst banks for acquiring large customer
base and market share. Banks have to deal with many customers and render
various types of services to its customers and if the customers are not satisfied with
the services provided by the banks then they will defect which will impact
17
economy as a whole since banking system plays an important role in the economy
of a country, also it is very costly and difficult to recover a dissatisfied customer.
Since the competition has grown manifold in the recent times it has become a
Herculean task for organizations to build loyalty, the reason being that the
customer of today is spoilt for choice.
Retaining customers is a financial imperative for Indian banks, especially
as attracting new customers is considerably more expensive than for comparable,
traditional, bricks-and-mortar stores. Understanding how or why a sense of loyalty
develops in customers remains one of the crucial management issues of the present
day. In increasingly competitive markets, being able to build loyalty in consumers
by increasing their satisfaction is seen as the key factor in winning market share
and developing sustainable competitive advantage.
Banking industry worldwide is offering various options, financial products
and services to enhance customer satisfaction. Innovative ways for information
technology are used to provide services. Undoubtedly e-banking is the
technological wonders and is gaining popularity. E-banking is regarded as pulse of
the nation. It is important for banks to encourage customers to use e-banking.
Banks-trusted business service providers, have the opportunity to leverage their
existing relationships to provide full range of high quality trusted internet business
services to their customers.
In India, there is less number of studies being conducted to identify how
effectively the online channels are used by banking industry to increase customer
satisfaction. Hence, this study throws light on the e-banking services provided by
the banks in the study area and this research study makes an attempt to analyze
how banks are attracting the various customers and how the customers are satisfied
18
with the e-banking services provided by the banks. This study will be helpful to
draw up further policy for improving customer satisfaction with e-banking
practices and act as a secondary data for further research.
Research Objectives
The following are the specific objectives of the research objectives
1. To analyze the present e-banking scenario in India.
2. To study the extent of awareness and the usage of e-banking services in the
study area.
3. To ascertain the customer’s satisfaction regarding various e-banking
services provided by public and private sector banks and
4. To test the following hypothesis
H1: Accessibility, Convenience, Privacy, Security, Design, Content, Speed and
Fees and Charges have positive relationship with customer satisfaction.
H 2: The public and private sector banks customers have similar satisfaction with
e-banking practices.
H3: The demographic variables (sex, age, occupation, income, educational
qualifications and types of account) have not influenced the customer satisfaction
with e-banking practices in public sector and private sector banks.
Research methodology
In a view to precede the research in a systematic way the following
research methodology has been used. By means of obtaining detailed opinion of
the customers, this research falls under the category of descriptive research. This
study was conducted as a survey that examined customers’ satisfaction with
e-banking practices in public and private sector banks located in Thanjavur District
of Tamilnadu.
19
Area of the study
Thanjavur District is one of the 32 districts of the state of Tamilnadu, in
southeastern India. Its headquarters is Thanjavur. According to the 2011
census Thanjavur district has a population of 2,402,781, roughly equal to the
nation of Kuwait or the US state of New Mexico. This gives it a ranking of 185th
in India (out of a total of 640). The district has a population density of 691
inhabitants per square kilometer (1,790 /sq mi). Its population growth rate over the
decade 2001-2011 was 8.42 per cent and a literacy rate of 82.72 per cent. Due to
vast amount of potential growth, more number of public and private sector banks
are established their branches in this district and there is intense competition
prevailed between public and private sector banks to enhance their customer base.
It is presumed that the large number of customers aware of the e-banking services
because of high literacy rate in this district. Hence, this district is purposively
selected by the researcher to analyze the customer satisfaction with e-banking
services provided by the banks.
Population:
The population defined for this study was limited to customer using
e-banking services of public and private sector banks in Thanjavur district of
Tamilnadu. The present study covers bank branches for those bank groups
working in the Thanjavur district only.
Sample size
In Thanjavur district almost, all the major banks have branches in this
district. As it was felt that it would useful to attempt a comparative study among
public and private sector banks. One public and one private sector bank having the
largest network of branches in the district were identified. The similarly of two
banks from e-banks have been identified. In the district, public sector banks, SBI
20
has large number branches (15 branches) as compared to other public sector banks.
Similarly, among private sector banks located in the district, ICICI bank has large
number of Branches (5) as compared to other private sector banks. Two branches
from each bank viz., Kumbakonam and Thanjavur selected as sample.
In Thanjavur and Kumbakonam branches of State Bank of India, there are
15,975 and 14,257 customers. In the same branches of ICICI bank there are
12,257 and 13,250 customers. The sample size was calculated to guarantee a
sufficient number of respondents in each bank branch. Thus, the following formula
has been used to estimate the population sample size (The Survey System, 2007):
t² * p * (1-p) Minimum Sample Size (n) = –––––––––––––
m² Where:
n = required sample size (minimum size)
t = Confidence level at 95% (standard value of 1.96)
p = Estimated fractional population of subgroup
m = Margin of error at 5% (standard value of 0.05)
As per the formula, the required sample size is 382 customers, therefore,
206 customers from SBI and 176 customers from ICICI Bank were selected as
sample. Out of 206 samples in SBI, 109 and 97 samples were chosen from
Thanjavur and Kumbakonam branches. Similarly, out of 176 samples in ICICI
bank 85 and 91 samples were selected from Thanjavur and Kumbakonam branches
of ICICI bank on the basis of proportionate to the total population.
These samples are selected on the basis of Convenience sampling method.
The reasons of using this sampling type are twofold. First, it offers an easy way to
21
obtain the raw data for the further analysis. Second, it saves times and costs since
the respondents can be randomly selected.
Data Collection
The present study is of analytical and exploratory nature. Accordingly, the
use is made of primary and secondary data. The primary data is collected with the
help of pre-tested structured questionnaires from a sample of 369 respondents (253
and 116 respondents from one public and one private sector bank) of selected
branches of SBI and ICICI Bank from Thanjavur district. The branches and
respondents are selected with the help of convenience sampling method.
The survey questionnaire measured eight dimensions of e-banking service
quality and its effect on customer satisfaction. A five point likert scale ranging
from strongly agree to strongly disagree was adopted as the scale for the statements
in the questionnaire and method of data collection was through personal mode. The
survey questionnaire has been designed using 29 statements related to service
quality dimensions i.e. Accessibility, Convenience, Privacy, Security, Design,
Content, Speed and Fees and Charges. Each statement in the questionnaire has
positively worded. Reliability of the questionnaire was tested using Cronbach’s
alpha reliability test.
Pilot Testing of Instrument
Researchers strongly recommend pilot testing of the instrument. A sample
of 50 customers was used, in the pilot testing, to validate the instrument. To
validate the results empirically, appropriate reliability and validity tests of the
measurement were taken. Indeed, reliability refers to the instrument’s ability to
prove consistent results in repeated uses, whereas validity refers to the degree to
which the instrument measures the concept the researcher wants to do. This
22
provides confidence that the empirical findings accurately reflect the proposed
constructs (Flynn et al., 1994). The reliability coefficient (Cronbach’s alpha)
values for the eight areas Accessibility (0.840), Convenience (0.784), Privacy
(0.913), Security (0.965), Design, (0.780); Content (0.701);, Speed (0.798); and
Fees and Charges (0.791) were found to be within limits for further analysis.
None of the reliability alphas is below the cutoff point of 0.60, which is generally
considered to be the criterion for demonstrating internal consistency of new scales
(Nunnally and Bernstein, 1994).
Statistical Analysis
The statistical tests used in the analysis of data includes, Simple Percentage,
ANOVA, Chi-square test, t-test, correlation analysis, factor analysis, and regression
analysis. SPSS (Statistical Package for Social Sciences) version 16.0 was used to
compute and analyze the data.
Limitations of the Study
The study has some limitations, these limitations that need to be
acknowledged and addressed regarding the present study.
1. The study is restricted to commercial banks located in Thanjavur district
only.
2. The study is based on the opinion survey of customers. But, the opinion
expressed may differ according to time and situation.
3. The findings of the study can’t be generalized as the study is made covering
a limited area namely, Thanjvaur district of Tamilnadu.
23
Chapter Scheme
The following chapter scheme has been adopted:
Chapter I describes the Design and execution of the study, which includes,
objectives, the methodology used to collect data, sample parameters, and
limitations. Chapter II provides a detailed review of earlier studies carried out in
the area of customer satisfaction. Chapter III has been devoted to the discussion of
e-banking scenario in India. Chapter IV analyses the awareness and customers
satisfaction with e-banking service provided by the public and private sector banks
in the study area. Chapter VI contains the summary, major findings, suggestions,
conclusions and the scope of future research.
24
CHAPTER – II
REVIEW OF LITERATURE
There have been a lot of studies conducted in the field customer satisfaction
towards banking services both at national and international level. Some of the
previous related research studies are given below.
International Studies
Arne Floh Horst Treiblmaier1 investigated the importance of antecedents of
online loyalty such as trust, quality of the Web site, quality of the service and
overall satisfaction. Rather than investigating which factors drive customers to use
online banking instead of offline banking, his study addresses the problem of how
to keep customers online and loyal to a specific supplier. A survey among more
than 2,000 customers of an Austrian online bank was conducted and a structural
equation modeling approach was used to gain important insights into how
customer retention in the online banking business can be ensured. Satisfaction and
trust were identified as important antecedents of loyalty. Additionally, the
moderating role of consumer characteristics (gender, age, involvement, perceived
risk and technophobia) was supported by the data.
Ahasanul Haque, et.al,2 their study investigated the factors determining the
Malaysian banking consumers’ perception on e-banking transactions. A research
framework was developed to testify the statistical relationships among consumer
1 What keeps the e-banking customer loyal? a multigroup analysis of the moderating role of consumer characteristics on e-loyalty in the financial service industry, Journal of Electronic Commerce Research, Vol 7, No.2, 2006.
2 Electronic Transaction of Internet Banking and its Perception of Malaysian online Customers, African Journal of Business Management Vol.3 (6), pp. 248-259, June 2009
25
perceptions on e-banking transaction. Factor analysis was performed to extract and
decide on the number of factors underlying asset of measured variables of interest.
Structural equation model (SEM) was tested to anticipate the effects of the
explanatory variables. This study showed that only protected transaction, have
significant impact on consumers’ perception about e-banking security, followed by
service quality and regulatory frame work issues. This study offered an insight into
e-banking in Malaysia, which has not previously been investigated and at the same
time, statistical tests significance makes this study a potential cornerstone for
future research.
Kari Pikkarainen, et.al,3 their study aims to test and validate the End-User
Computing Satisfaction (EUCS) model in order to investigate online banking users'
satisfaction with the service. A survey (n=268) was carried out using convenience
sampling. An exploratory factor analysis followed by a confirmatory factor
analysis run in LISREL 8.7 is used to test the validity of the model in an online
banking context. The survey results support three constructs (content, ease of use,
accuracy) from the original model, indicating that the modified EUCS model
labeled EUCS2 can be utilized in analyzing user satisfaction with online banking
among private customers. Findings of the study indicate that banks could improve
end-user computing satisfaction with online banking by concentrating on the three
constructs obtained from the analyses. Moreover, the results indicate that banks
can increase satisfaction of online banking services by personalizing the service,
allowing easier and more convenient use experience.
3 "The measurement of end-user computing satisfaction of online banking services: empirical evidence from Finland", International Journal of Bank Marketing, Vol. 24 Iss: 3, pp.158 – 172
26
Nath, Ravi and Schrick Paul,4 examined bankers' views on providing
banking services to customers using the web in Unites States. Specifically, it
addresses issues such as the strategic need for Internet banking, its effect on
customer-bank relationships, and customers' experiences in Internet banking. Data
collected from 75 banks show that most banks do not yet offer full-fledged Internet
banking. However, most have plans to do so. Furthermore, bankers see Internet
banking as a strategic opportunity that can reduce transaction costs, enhance
customer service, increase the customer base and improve cross-selling
opportunities. Also, Internet banking is perceived more favorably by banks that
offer it compared to those that do not.
Mohammed Hossain and Shirley Leo,5 the purpose of their study is to
evaluate the service quality in retail banking in the Middle East in general, and
Qatar in particular, based on different levels of customers’ perception regarding
service quality. This is an analytical study based mainly on the primary data
collected through a scientifically developed questionnaire. The questionnaire have
been personally administered on a sample size of 120, chosen on a convenient
basis from four Qatari banks, i.e. Qatar National Bank, Doha Bank, Qatar
International Islamic Bank, and Arab Bank. The questionnaire has been designed
on the basis of the study of previous scholars such as Berry et al., Parasuraman et
al., Zeithaml and Bitner, and Stafford. The result indicates that customers’
perception is highest in the tangibles area and lowest in the competence area. They
suggested that, in order to achieving higher levels of quality service in retail
banking, banks should deliver higher levels of service quality and in the present
4 Bankers' Perspectives on Internet Banking, e-Service Journal 1.1, Fall 2001
5 Customer perception on service quality in retail banking in Middle East: the case of Qatar, International Journal of Islamic and Middle Eastern Finance and Management Vol. 2 No. 4, pp. 338-350, 2009
27
context customers’ perceptions are highest in the level of infrastructure facilities of
the bank, followed by timing of the bank, and return on deposit. Owing to the
increasing competition in retail banking, customer service is an important part and
bank managers should be rethinking how to improve customer satisfaction with
respect to service quality.
M. Sadiq Sohail and Balachandran Shanmugham,6 examined the current
trends in the e-commerce revolution that has set in motion in the Malaysian
banking sector and reports on an empirical research that was carried out in
Malaysia to study the customers’ preference for electronic banking and the factors,
which they considered influenced the adoption of electronic banking. Results based
on the analysis of data relating to 300 respondents indicate that while there is no
significant differences between the age and educational qualifications of the
electronic and conventional banking users, some differences exists on other
demographic variables. Analysis further revealed that accessibility of Internet, a
wareness of e-banking, and customers’ reluctance to change are the factors that
significantly affected the usage of e-banking in Malaysia.
R. A. Gbadeyan7 examines the customers’ choice of banks is influenced by
the quality of e–banking services provided. Stratified sampling was used; while the
survey Instrument was a developed Questionnaire comprising open ended and
Likert type of questions. The Likert type questions have a 4 point scale (indicating
1 = very comfortable and 4 = uncomfortable) divided into two (2) sections:
6 E-banking and customer preferences in Malaysia: An empirical investigation, Information Sciences Vol.150, Issues 3-4, pages 207-217, 2003.
7 Customers’ Preference For E – Banking Services: A Case Study Of Selected Banks In Sierra Leone, Australian Journal of Business and Management Research Vol.1 No.4 [108-116] | July-2011.
28
personal details and customers’ e-banking preference in Sierra Leone. The
instrument contained 36 items and was administered to about 400 respondents,
while 360 completed and returned their Questionnaire. The statistical techniques
used for the analysis were the Chi–Square and correlation. The Chi–Square
analysis revealed that the quality of e–banking services offered by banks have
significant influence on their customers at 95%, degree of freedom. He
recommends that various measures should be put in place to ensure more security
such as installation of encrypted software, verification system of customer’s
identification cards, frequent change of password, examining test questions and
using mixed password such as the use of alphanumeric amongst others. The study
concludes that e –banking has become important phenomenon in the banking
industry and it will continue as more progress and innovations are made in
information technology
Huam Hon Tat and Khalil Md Nor,8 their study investigates predictors of
intention among current users to continue using the services. Questionnaires were
distributed to 210 residents in Klang Valley, Malaysia, of whom 204 (97.1%)
responded to the survey. The findings demonstrated that, among the predictors
tested, trust was found to be the strongest predictor of intention to continue using
Internet banking, followed by compatibility and ease of use. Recommendations to
Internet banking service providers and discussions for future study are provided.
8 Predictors of Intention To Continue Using Internet Banking Services: An Empirical Study of Current Users, International Journal of Business and Information, Volume 3, Number 2, December 2008.
29
Booi Hon Kam and Hernan Riqulme,9 they examined a sample of
Australian Internet Banking users based on their frequency and length of usage.
The results showed that as customers become more acclimatized to Internet
Banking, they use these services more often. Further, daily and frequent Internet
Banking users are more pleased with "ease of use" and "aesthetics" and tend to use
Internet Banking more for electronic fund transfer and foreign exchange
transactions than the less frequent users. The findings suggested that banks need to
develop more customized services since there are distinct market segments with
different banking requirements.
Lim Yik Ming,10 in his study he developed and empirically tested a
conceptual model of the impact of internet banking service quality on customer
satisfaction and behavioral intentions. Based on the relevant literature review, a
questionnaire was designed and administered to 300 users of internet banking in
Mauritius. The findings revealed that customers' perceptions are consistently lower
than their expectations and the most dissatisfied dimension was reliability. It was
further found that reliability and security was perceived as the most important
dimensions in internet banking transactions that influences satisfaction and
behavioral intentions. Customer satisfaction was found to mediate the relationship
between customer behavioral intentions.
9 An exploratory study of length and frequency of internet banking usage, Journal of Theoretical and Applied Electronic Commerce Research, Volume 2 Issue 1, April 2007
10 The Impact Of Internet Banking Service Quality On Satisfaction And Behavioral Intentions, International Journal of Business and Information, Volume 3, Number 2, December 2008.
30
Asma Mobarek11 pointed out that the banks' external environment,
including globalization and deregulations, have made the banks highly
competitive. Banks find it difficult to compete on price, and need to look at other
ways to retain customers. As customers become more sophisticated, it becomes
banks essential to consider the use of technology to respond to their continuously
changing requirements. After conducting this research, it is clearly seen that
delivery channels are lacking in meeting the demands of the customer by not
making them aware of e-banking and using obsolete or not too up-to-date
technology. The problem statement is solved. The hypotheses are tested and show
that there is a relationship between age group, occupation type and some aspects of
e-banking. The responses obtained for the acceptance of the electronic age were
unanimous as the banking industry strongly feels that it must adapt to the
electronics age if they are to move with time and customer demands and not be left
behind. The author would thus conclude that banks should drown themselves in all
the intricacies regarding e-banking to determine ways that will affect the customers
in Botswana and use it to their maximum benefit.
Marvin E. Gonzalez12 developed a case study that considers both external
and internal service management issues and subsequent service innovations based
on the framework of quality function deployment (QFD). The application of the
customer window quadrant (CWQ) and the action plan matrix in the analysis of
customer and service elements constitute a different approach for QFD. Some
benefits and disadvantages of the QFD process were discussed as compared to
extant service quality and customer paradigms. Finally, suggestions and directions
11 E-Banking Practices and Customer Satisfaction - A Case Study in Botswana, 20th Australasian Finance & Banking Conference 2007 Paper
12 Customer satisfaction using QFD: an e-banking case, Managing Service Quality, Vol. 14 Iss: 4, pp.317 – 330, 2008.
31
are offered for future applications, with particular interest in the e-bank service
management issues.
Jau-Shyong Wang13 emphasized that the numerous Vietnamese banks have
launched online banking services to offer improved service to existing customers
and attract new ones. However, on-line banking was new to most people in
Vietnam, and rates of adoption of on-line banking. His study focuses on this issue
and attempts to identify the determinants of customer intention to use online
banking. A research framework based on the DeLone and McLean Information
System Success (D and M IS) model for assessing website quality and the
literature on brand credibility was developed to identify the factors that can affect
customer intention to use online banking. This study uses customers of the
financial industry in Vietnam as subjects and collects 164 valid questionnaires.
Partial Least Squares (PLS) method is applied in the investigation. The analytical
results indicate that brand credibility can affect customer intention to use online
banking.
Mohammad Khurram Manzoor14 examined the impact of e-banking on the
profitability of Pakistani banks, in particular. His study covers twelve banks across
Pakistan. The study is qualitative in nature which examines different objectives
which determine the performance of banks mainly in terms of profitability. It also
discussed the effect of customers’ literacy on provision of services from banks’
perspective. It also discussed the basic motive of banks to adopt e-banking
services. The study was done through taking interviews from the managers of these
13 Drivers of customer intention to use online banking: An empirical study in Vietnam, African Journal of Business Management Vol.3 (11), pp. 669-677, November, 2009
14 The Impact of E-Banking on the Profitability of Banks: A Study of Pakistani Banks, Information Management and Business Review Vol. , No. 12 , pp. 52- 58, 2010
32
banks. The results showed that e-banking has increased the profitability of banks; it
has enabled the banks to meet their costs and earn profits even in the short span of
time. The illiteracy of customers is not regarded as a major impediment in
provision of their products and services. For banks, the main motive to adopt
e-banking is to increase their clientage and to retain their customers. The
profitability of banks has augmented in transitioning to e-banking medium.
Kesseven Padachi, et al.,15 their study analyzed the factors that influence
the adoption of internet banking for the case of the emerging African economy of
Mauritius. Results based on the analysis of data relating to 200 respondents
indicate that the mostly used services are inter account transfer, payment to other
personal account, transfer to credit card account, recharge mobile phones among
others. Comparing demographic variables of the internet banking users to the non-
internet banking users, the analysis also reveals that there is no significant
difference between the two groups of users with respect to age group and the
education level of the respondents. This is however not the case for the mean
monthly income. Using factor analysis to identify the factors affecting the adoption
of internet banking in Mauritius, it was found that the most significant factor is
ease of use and that other important elements featured reluctance to change, trust
and relationship in banker, cost of computers, internet accessibility, convenience of
use, and security concerns. Further analysis using cross tabulations suggested
important statistical relationship between awareness, access to Internet facility,
length of banking relationship, people working in the Internet banking/finance
sector, education level in the category ‘post graduate’ and also income group with
the usage of internet banking.
15 Analyzing the Factors that Influence the Adoption of Internet Banking in Mauritius, Proceedings of the 2007 Computer Science and IT Education Conference
33
Dr. Ala`Eddin Mohd Khalaf Ahmad,16 the purpose of his study is to
explore the adoption of e-banking functionality and investigates the impact of e-
banking on the outcomes of customer satisfaction within the Jordanian
Commercial Banks. A purposive sampling technique was employed to recruit 179
customers representing the desired range of demographic characteristics (e.g.
gender, age, and computer use), previous internet experience levels and product-
related knowledge. This research showed that adoption of e-banking (accessibility,
convenience, security, privacy, content, design, speed, fees and charges) had a
positive effect on Jordanian Commercial Bank customers' satisfaction and loyalty
Cheolho Yoon17 investigated the antecedents of customer satisfaction with
online banking in China, and explores the effects of experience on the relationships
between the antecedents and customer satisfaction. Based on prior research, the six
antecedents of customer satisfaction - ease of use, design, speed, security,
information content and customer support service - are proposed, and the effects of
experience on the relationships between these and customer satisfaction are
analyzed using a structural multi-group (a high-experience group and a low-
experience group) model. The results showed that design, speed, security,
information content, and customer support service have a significant influence on
customer satisfaction in the high-experience group or the low-experience group,
but ease of use does not have a significant influence on customer satisfaction in
either of the groups. Also, the results relating to the influence of the level of
customer experience reveal that the effects of design, security, speed and
16 E-banking Functionality and Outcomes of Customer Satisfaction: An Empirical Investigation, International Journal of Marketing Studies Vol. 3, No. 1; February 2011
17 Antecedents of customer satisfaction with online banking in China: The effects of experience, Journal of Computers in Human Behavior Volume 26 Issue 6, November, 2010.
34
information content on customer satisfaction were significantly higher in the high-
experience group, whereas the effect of customer support service on customer
satisfaction was significantly higher in the low-experience group.
Lin Ching Tsung and Jung-Yu Lai,18 their study attempts to explore what
factors affect corporate customer satisfaction with e-banking (CCSEB) which is
one surrogate variable of success of e-banking services. Based on a survey of 178
respondents collected from Taiwan companies, the results support that
environmental, organizational, and globalization factors will affect customer
satisfaction with e-banking significantly. Furthermore, there exist a reciprocal
relationship between customer satisfaction and post-usage favorite behavior.
Durkin, Mark,19 he adopted a quantitative methodology and examined
customer communication preferences when interacting with their bank, with a
particular focus on Internet banking registration. The customer satisfaction
questionnaire was issued to over 2,000 retail customers. Through regression
analysis the key predictors that indicate whether or not customers will register as
Internet banking users were identified. Twenty-five senior branch bank managers
were then asked to rank the same set of issues to ascertain what they felt to be the
key influencers to customer registration for Internet banking. The similarities and
differences between the two sets of findings are identified and the managerial
implications for the case bank's marketing strategy discussed.
18What factors drive corporate customer satisfaction with e-banking services, http://aisel.aisnet.org/pacis2008/84
19 On e-banking adoption: from banker perception to customer reality, Journal of Strategic Marketing, Volume 15, Numbers 2-3, May 2007 , pp. 237-252(16)
35
Shih-Chih Chen and Huei-Huang Chen20 examined the consumer satisfaction and the
long-term usage intention of SSB. In the proposed model, four dimensions of
Technology Readiness (TR) (including optimism, innovativeness, discomfort and
insecurity) influence a consumer's continuance intention through the mediation of
satisfaction. The research model was evaluated using web-based survey data
collected from 388 users about their perceptions of SSB. Overall, the results
revealed that the effects of optimism and innovativeness are very important, but
that discomfort and insecurity do not influence an individual's satisfaction and
behavioural intention towards the continued use of SSB.
Ilias Santouridis21 investigated internet service quality and its impact on
customer satisfaction in the banking context. Internet service quality is
operationalized by adopting an instrument, which is based on SERVQUAL and
consists of six dimensions, namely assurance, quality of information,
responsiveness, web assistance, empathy and reliability. The field research, which
resulted in 184 valid questionnaires, was conducted among internet banking
customers in Greece, a country with relatively low internet penetration rate. The
findings confirm, to a great extent, the validity of the instrument and highlight the
above average performance of service quality delivered by Greek banks via the
internet. All quality dimensions are proved to be antecedents of overall customer
satisfaction, with reliability having the most significant impact. Furthermore,
quality of information is a crucial dimension driving the customer intentions for
internet banking future usage. Finally, familiarization-related dimensions, such as
20 The empirical study of customer satisfaction and continued behavioural intention towards self-service banking: technology readiness as an antecedent, International Journal of Electronic Finance 2009 - Vol. 3, No.1 pp. 64 - 76
21 Internet service quality and customer satisfaction: Examining internet banking in Greece, Total Quality Management & Business Excellence Volume 20, Issue 2, 2009.
36
empathy and web assistance, play a very important role in customers’ willingness
to recommend the service to other people.
Lo Liang Kheng22 pointed out that the emergence of new forms of banking
channels such as Internet Banking, Automated Teller Machines (ATM), phone
banking and also maturing financial market and global competition have forced
bankers to explore the importance of customer loyalty. Therefore, studies need to
focus on the changing role of the banking system and its dynamic financial market.
The underlying model of SERVQUAL (Parasuraman et al., 1988) with five
dimensions was used by his research to evaluate the impact of service quality on
customer loyalty among bank customers in Penang, Malaysia with customer
satisfaction mediating these variables. The findings showed that improvement in
service quality can enhance customer loyalty. The service quality dimensions that
play a significant role in this equation are reliability, empathy, and assurance. The
findings indicate that the overall respondents evaluate the bank positively, but still
there are rooms for improvements.
Padachi K.23 analyses the factors that influence the adoption of internet
banking for the case of Mauritius, the future IT-hub of Africa. Results based on the
analysis of data relating to 200 respondents indicate that the mostly used services
are inter account transfer, payment to other personal account, transfer to credit card
account, recharge mobile phones among others. Comparing demographic variables
of the internet banking users to the non-internet banking users, the analysis also
revealed that there is no significant difference between the two groups of users
22 The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia, International Journal of Marketing Studies Vol. 2, No. 2; November 2010
23 Investigating into the factors that influence the adoption of internet banking in Mauritius, Journal of Internet Business, Issue 5 - 2008 99
37
with respect to age group and the education level of the respondents. This is,
however, not the case for the mean monthly income. Using factor analysis to
identify the factors affecting the adoption of internet banking in Mauritius, it was
found that the most significant factor is ease of use and that other important
elements featured reluctance to change, trust and relationship in banker, cost of
computers, internet accessibility, convenience of use and security concerns.
Further analysis using cross tabulations suggested important statistical relationship
between awareness, access to Internet facility, length of banking relationship,
people working in the banking/finance sector, education level in the category ‘post
graduate’ and also income group with the usage of internet banking.
Ravi Kalakota24 presents a framework that provides a conceptual
understanding of electronic commerce-based financial services. The study
discussed some of the research issues that need to be addressed in this emerging
area. Systematic research on online financial services is virtually non-existent.
Most of the early work consists of anecdotal evidence from individual companies,
usually in the form of trade journal articles which have no empirical basis. Clearly
there is a need for industry-academia collaboration to understand the online
financial services area better. There is also a need to develop methods and tools for
measuring the effectiveness of these services. Traditional effectiveness measuring
methods will be of limited use in cyberspace as banks enter an era in which
financial products are treated as information commodities and banks are in
competition with non-banks to serve customers with the best bundle of
information.
24 The Impact of Cyber communications on Traditional Financial Services, University of Rochester, New York 14627, published in the www.vii.org/papers/ravi.htm
38
Sun Quan25 study use E-S-QUAL scales and D&M IS success model to
design the research model of this research. Structural equation modeling was used
to analyze the data collected from banks’ customers in China. The main findings
are as follows: 1) the research supported that the four e-SERVQUAL dimensions–
efficiency, fulfillment, system availability and privacy are the determinants of
Chinese internet banking service quality. 2) System quality, electronic service
quality and information quality all have a positive effect on customer perceived
value and customer satisfaction. 3) E-service quality has both direct effect on
customer loyalty and indirect effect on customer loyalty through customer
perceived value and customer satisfaction.
Chen, Shih-Chih and Chen, Huei-Huang26 examined consumer satisfaction
and the long-term usage intention of Self-Service Banking. In the proposed model,
four dimensions of Technology Readiness (TR) (including optimism,
innovativeness, discomfort and insecurity) influence a consumer's continuance
intention through the mediation of satisfaction. The research model was evaluated
using web-based survey data collected from 388 users about their perceptions of
Self-Service Banking. Overall, the results revealed that the effects of optimism and
innovativeness are very important, but that discomfort and insecurity do not
influence an individual's satisfaction and behavioural intention towards the
continued use of Self-Service Banking. The implications of this study are also
discussed.
25 The Relationships Among E-Service Quality, System Quality, Information Quality and Customer Loyalty: An Empirical Study of Internet Banking In China, Global Joural of Management and Business Research, Vol 10, No 7 (2010)
26 The empirical study of customer satisfaction and continued behavioural intention towards self-service banking: technology readiness as an antecedent, International Journal of Electronic Finance, Volume 3, Number 1, 30 March 2009 , pp. 64-76(13)
39
Vimi Jham and Kaleem M. Khan27 examined the survey responses of 560
bank customers who provided information regarding their satisfaction towards
financial distribution channels with respect to five banks. The study found that
there were distinctive segments within the financial market that had significantly
different levels of usage of financial distribution channels. Financial customers'
satisfaction with human tellers, automated teller machines, money transfer at the
point of sale, credit cards, debit cards, internet banking and telephone banking was
investigated, and this information was used to determine if relationships exist
between customer satisfaction and the usage of financial distribution channels.
Systematic methodology, including design and validation of questionnaire and
factor analysis were used to enhance the reliability of the findings.
Emari H. et al.,28 the main objective of their research was to determine the
dimensions of service quality in the banking industry of Iran. For this purpose, the
study empirically examined the European perspective (i.e., Gronroos’s model)
suggesting that service quality consists of three dimensions, technical, functional
and image. This research is an applied research and its strategy is casual strategy.
A standard questionnaire was used for collecting the data. Two hundred and eighty
seven customers of Pasargad Bank of Northwest were selected through cluster
sampling and were studied. The results from a banking service sample revealed
that the overall service quality is influenced more by a consumer’s perception of
technical quality than functional quality. So, the Gronroos model is a more
appropriate representation of service quality than the American perspective with its
limited concentration on the dimension of functional quality in the banking
27 Customer satisfaction with usage of banks distribution channels: an empirical investigation, International Journal of Financial Services Management 2008 - Vol. 3, No.3/4 pp. 283 - 294
28 Determining the Dimensions of Service Quality in Banking Industry: Examining the Gronroos’s Model in Iran. Trends in Applied Sciences Research, 6: 57-64.
40
industry of Iran. So, knowing the key dimensions of the quality of services in this
industry and planning for their improvement can increase the satisfaction of
customers and productivity of this industry.
Hsin-Ginn Hwang, et al.,29 their purpose of this study is to develop a
measurement instrument for customer satisfaction with internet banking (IBCS). A
web survey was used with the subjects being internet banking users of Taiwanese
banks. A total of 226 valid questionnaires were obtained with an 85% response
rate. For the development of a standardised instrument, an exploratory factor
analysis was used. The study demonstrates that all the items in the Doll and
Torkzadeh instrument for end-user computing satisfaction measures are still valid
in the context of internet banking, and that IBCS depends heavily on security and
trust considerations on the internet.
Yuan-shuh Lii,30 his study models e-loyalty includes three exogenous
variables (website quality, corporate image and perceived social presence) and two
mediating variables (satisfaction and trust). The model was empirically tested
using data collected from an online survey of Internet forums based in Indonesia.
Using structural equation modeling, the results of statistical analysis showed that
the model is an adequate fit to the data. All the causal relationships in this model
were found to be significant. He discussed some interesting results and provided
several implications for those banks which want to enhance loyalty of e-banking
customers.
29 Measuring customer satisfaction with internet banking: an exploratory study, International Journal of Electronic Finance, Volume 1, Number 3 / 2007, Volume 1, Number 3 / 2007
30 A model of customer e-loyalty in the online banking, journal Economics Bulletin, Volume (Year): 29 (2009), Issue : 2, Pages: 891-902.
41
Waleed Al-Ghaith’s31 study based on the diffusion of innovations (DOI)
theory leveraged into the online environment, investigates factors that influence
adoption and usage of e-service, especially, in Saudi Arabia. Factors were
empirically tested against data collected from 651 participants using survey
questionnaires. Perceived Complexity was found to be the most significantly
related factor affecting e-service adoption in Saudi Arabia, followed in turn by
Privacy and Compatibility. Quality of the Internet and its relative advantage also
had a notable affect on e-service usage and adoption in Saudi Arabia.
Richard Boateng and Alemayehu Molla32 explored some of the issues that
affected the key decisions that the bank made. These decisions relate to entering
e-banking, e-banking channel choice, e-banking development, enticing customers,
and managing channel conflict. The findings indicate that operational constraints
related to customer location, the need to maintain customer satisfaction and the
capabilities of the Bank's main software have been influential factors in motivating
the decision to enter electronic banking services. The bank's electronic channel
choice is influenced by the systemic competence of a software technology that the
bank acquired and the nature of the diffusion of information and communications
technology among its clientele group. Technological and human resources
capabilities together with the development of electronic transactions in the
Ghanaian market influenced the e-banking development. The sophistication of the
current e-banking services and the incremental approach followed in rolling out
e-banking appear to influence strategies to entice customers and channel conflict
issues. The study concludes by highlighting the need for African Banks to
31 Factors Influencing The Adoption And Usage Of Online Services In Saudi Arabia, The Electronic Journal on Information Systems in Developing Countries EJISDC (2010) 40, 1, 1-32
32 Developing E-banking Capabilities in a Ghanaian Bank: Preliminary Lessons, Journal of Internet Banking and Commerce, 11(2), 1-11.2006.
42
understand customers' needs; the corresponding services to offer; the resources and
partnerships required to offer it; and develop appropriate e-banking strategies that
maximize value for both customers and banks.
Zhilin Yang33 examined the moderating effects of switching costs on
customer loyalty through both satisfaction and perceived-value measures. The
results, evoked from a Web-based survey of online service users, indicate that
companies that strive for customer loyalty should focus primarily on satisfaction
and perceived value. The moderating effects of switching costs on the association
of customer loyalty and customer satisfaction and perceived value are significant
only when the level of customer satisfaction or perceived value is above average.
In light of the major findings, the article sets forth strategic implications for
customer loyalty in the setting of electronic commerce.
Chung-Hung Tsai34 made a study which integrates web quality (system
quality, information quality, and service quality), perceived interactivity (human-
message, human-human), and web outcomes (web usage, web satisfaction, and
web loyalty) to explore the e-commerce model of health websites. A survey of
1076 users of health websites was conducted to validate the proposed model. The
findings show that web quality has significantly positive effect on perceived
interactivity, web usage, and web satisfaction separately, which in turn influsence
web loyalty. This study also confirms that perceived interactivity is an important
mediator between web quality and web outcomes. This study emphasized the
33 Customer Perceived Value, Satisfaction, and Loyalty: The Role of Switching Costs, Psychology & Marketing, Vol. 21(10):799–822 (October 2004)
34 The E-Commerce Model of Health Websites: An Integration of Web Quality, Perceived Interactivity, and Web Outcomes, Journal of Networks, Vol 6, No 7 1017-1024, Jul 2011
43
importance of both web quality and perceived interactivity in the progress towards
success health websites.
Wai-Ching Poon35 the purpose of his study is to explore the determinants of
users’ adoption momentum of e-banking in Malaysia. A questionnaire with four-
point Likert scale is applied to 324 usable responses. Ten attributes are tested,
namely convenience of usage, accessibility, features availability, bank
management and image, security, privacy, design, content, speed, and fees and
charges. Results indicate that all elements for ten identified factors are significant
with respect to the users’ adoption of e-banking services. Privacy and security are
the major sources of dissatisfaction, which have momentously impacted users’
satisfaction. Meanwhile, accessibility, convenience, design and content are sources
of satisfaction. Besides, the speed, product features availability, and reasonable
service fees and charges, as well as the bank’s operations management factor are
critical to the success of the e-banks. WAP, GPRS and 3G features from mobile
devices are of no significance or influence in the adoption of e-banking services in
this study. Results also reveal that privacy, security and convenience factors play
an important role in determining the users’ acceptance of e-banking services with
respect to different segmentation of age group, education level and income level.
Rafiu Ovesola Salawu and Mary Kehinde Salawu36 evaluated the tangible
benefits of e-business as an organizational tool and its influence on banking
activities, as well as customer satisfaction practices. Cross tabulations and Chi-
square were used to analyze the data. The study revealed that there is a linear
35 Users’ adoption of e-banking services: the Malaysian perspective, Journal of Business & Industrial Marketing 23/1 (2008) 59– 69
36 The Emergence of Internet Banking in Nigeria: An Appraisal, Information Technology Journal, 6: 490-496.
44
relationship between high-level automation of banking services and improvement
in service delivery. Also, there exist a significant relationship between customer’s
choice of bank and implementation of e-business. Based on the findings, bank
managers need to be knowledgeable and apply internet technologies in their
banking activities.
Dr. Younos Vakil Alroaia, et al.,37 the aim of their study is to determine the
extent to which customer satisfaction's in the e-banking in Semnan area had
organizational and customer readiness for developing their services. One of the
most important sectors that plays key role for grasping developed condition is
banking sector. Banks like other institutions also look for augmenting their profits
and increasing their strength by expansion. The designing of bank must involve
selection of those that have sufficient success potential. Hence, from several
factors of success, the following three criteria factors have been selected-customer
satisfied; one dimensional, and product fully functional. These factors offers three
question multi criteria group extracted from a 16 norms. Also, three criteria factors
have been studied over a period of five years and important criteria for evaluating
the norms. The Analytical Hierarchy Process (AHP) has been employed to
calculate the success potential of each norm. The empirical data comprises the
longitudinal survey of the agricultural banking of the Semnan province. The study,
also, finds that product fully functional is placed as the first priority.
37 Priority Of Factors Affected On Customer's Satisfaction In The E-Banking By Using Kano Model And Analytical Hierarchy Process (A Case Of Iranian Commercial Bank), International Conference On Management (Icm 2011) Proceeding 631
45
National studies
Mohammed Sadique Khan and Siba Sankar Mahapatra,38 their study aims
at evaluating the service quality of internet banking (i-banking) services in India
from customer’s perspective. A structured questionnaire containing 44 quality
items is administered to various target groups. Seven quality dimensions, viz.
reliability, accessibility, user friendliness, privacy/security, efficiency,
responsiveness and fulfillment, are identified based on principal component factor
analysis. Demographic analysis of data reveals that gender is hardly a bias for use
and evaluation of service quality of i-banking in most of the cases across various
categories of customers. A valid mathematical model was proposed to assess the
overall service quality using regression analysis. The results showed that customers
are satisfied with quality of service on four dimensions such as reliability,
accessibility, privacy/security, responsiveness and fulfillment, but least satisfied
with the ‘user-friendliness’ dimension. The empirical findings not only prioritize
different parameters but also provide guidelines to bankers to focus on the
parameters on which they need to improve.
Geetika, Shefali Nandan,39 in her study, she pointed out that the service
quality has been viewed as a determinant of customer satisfaction. Different
dimensions of service quality have been considered by various researchers. This
study identified components of service quality of Indian Railways at railway
platforms. The study is exploratory in nature and uses factor analysis to identify
the most important factors of customer satisfaction with service quality. The
research methodology is empirical, and a survey of passengers (customers) was
conducted. The findings revealed that five factors are considered important for
38 Service quality evaluation in internet banking: an empirical study in India, Journal of Indian Culture and Business Management, Vol. 2, No. 1, 2009.
39 Determinants of Customer Satisfaction on Service Quality: A Study of Railway Platforms in India, Journal of Public Transportation, Vol. 13, No. 1, 2010.
46
determining satisfaction with railway platforms, the most important of which are
refreshments and behavioral factors. Managerial and theoretical implications were
drawn and discussed in the study, and a model was proposed.
Arpita Khare, et.al.,40 they attempts to study the role of personality in
evaluating online banking in India. The personality dimension scale developed by
Aaker and the attributes of online banking (like perceived ease of use, security and
privacy, perceived usefulness, amount of information and perceived enjoyment)
developed by Pikkarainen et al., were adapted to measure the role of personality in
online banking in India. The research findings showed that certain personality
factors – such as those who are more imaginative, reliable, intelligent, up-to-date
and charming – affect the consumers’ evaluation of online banking in India. Using
multiple regression tests, we attempted to predict the online banking attributes that
are most important for different personality types. The banks should give
importance to consumer personality while designing their websites. Personality of
the consumers can play a significant role in the success of online banking in a
developing country like India.
Arpita Khare41 studied the applicability of online banking in India and its
role in fostering relationships with customers and giving them more value. The
research was conducted on customers familiar with online banking in India, and
their perceptions about online banking were studied. The findings revealed that
customers are using the services but are skeptical about the financial transactions
and service quality dimensions.
40 Role of consumer personality in determining preference for online banking in India, Journal of Database Marketing & Customer Strategy Management 17, 174-187, 2010
41 Online banking in India: An approach to establish CRM, Journal of Financial Services Marketing 15, 176-188 (September 2010)
47
Kumbhar V. M.42 the aim of his study was to provide a preliminary
comparative investigation of the customer satisfaction in ATM service of public
and private sector banks in India. For this investigation primary data was handling
and compensation and collected from 150 respondents of public and private sector
banks through a structured questionnaire. Collected data was analyzed according to
the objectives of the present research and result of the statistical analysis indicates
that private sector banks are providing more satisfactory ATM service as compared
to public sector banks. Empirical evidences indicates that customers perception
about Efficiency, Security and Responsiveness, Cost Effectiveness, Problem
Contact service related to ATM service is low in both public and privates sector
banks (ranging between 3.00 to 3.50). Therefore both types of banks should aware
about these aspects of ATM service to enhance customers’ satisfaction.
R. K. Uppal43 made a study concerned with the problems and prospects of
e-banks in India. The study suggests some policies on the basis of perceptions of
60 selected e-bank employees regarding the various issues related to e-banking
services. The study concluded that not more then 50% of Indian bank customers
are using e-channels, these channels are not much popular among old age and
middle age persons as much as among youngsters and finally the study concludes
that the most of the customers are shifting from public sector banks to new private
sector banks or foreign banks to avail innovative and attractive services. On the
basis of these conclusions, study suggests some strategies to make the public sector
banks more competitive in the era of IT.
42 Customers’ Satisfaction In Atm Service: An Empirical Evidences From Public And Private Sector Banks In India, Management Research and Practice Vol. 3 Issue 2 (2011) Pp: 24-35, 2011.
43 E-Banking: Problems and Prospects: An Empirical Study in Punjab, Information Management and Business Review Vol. 2, No. 3, pp. 118-124, Mar 2011.
48
Dr. H. N. Ramesh,44 his study deals with the concept of service quality and
has demonstrated the model of service quality gaps; it aims to measure
customers' gap between satisfaction levels of interpretation of services and
their preferences of the interpretive service in internet banking at Indian
commercial banks. The research questions are utilized to measure the gap between
expectation and satisfaction levels of customers about quality of internet
banking. For this purpose a questionnaire with five-point Likert scale is
applied to measure customers expectation as well as satisfaction. Data was
obtained from 102 respondents and analyzed using SPSS 12 software by
employing factor analysis and multiple regressions. Results indicated that there
are significant differences between overall expectations and satisfaction levels
of customers. For practitioners, it is worth noting that customers are exclusively
concerned with the “Sufficient menu for transaction"," Variety of services readily
accessible", "Availability for business" and "Have a user-friendly system", as
important factors for them to apply internet banking. The study contains
material relevant to the internet banking industry, and implications were discussed
and recommendations were offered for improving internet banking services.
Ms.Malarvizhi.V,45 the objective of her study were to present an overview
of e-banking services offered by both public and private sector banks in
Coimbatore city; to examine the socio-economic profile of e-banking user; to study
the extent awareness and the usage of e-banking Services and to ascertain the
customer’s satisfaction about various e-banking services. The data was collected
with the help of a well-structured and pre-tested interview schedule, administered
44 Evaluation of Internet Banking Services Quality Based on Customer Satisfaction and Expectation - A Study of Indian Banks, Sinhgad Business Review, Vol. - III, Issue - I, July 2010 - Dec 2010.
45 An Analysis On The Usage Of E-Banking Services In Coimbatore City, IJBEMR, Volume 2, Issue 1 (January 2011)
49
to 100 e-banking users during the period November 2008 to January 2009. The
data collected was tabulated and analyzed by using simple percentages, Chi-square
test and Garrett ranking technique. From the findings of the study, it was revealed
that customers are satisfied with the services provided by the public sector banks
than the private sector banks. The study suggested that, customers have to be
educated in the use of every new technology. On the whole e-banking increased
operational efficiencies and reduces costs, besides giving a platform for offering
valued added services to the customer, thereby fulfilling all the essential
prerequisites for a flourishing banking industry. In a nutshell, to meet the emerging
challenges banks have to undertake a series of changes in original, structure,
functions, practices and marketing to popularize e-banking.
S. Kavitha46 pointed out that today banking industry has undergone a sea
change. Bank employees need to provide quality information at the branch at
his/her finger tips. It is also necessary that the information should be consistent
with all branches and other direct access channels like ATM’s. Phone Banking,
Mobile banking and Net banking throughout the country. The banking industry
should always adapt to the new technology today and basically make the necessary
adjustments to gain competitive advantage with other competing banks. E-banking
is one such technology and the bank which implement this technology in their
organization can definitely survive in this era of intense competition. The main
objective of his study is to identify the overall satisfaction of customer regarding
the e-banking transactions. The study also aims at knowing whether demographic
variables of the respondents have influence on customer satisfaction on E-banking.
46 Influence Of Demographic Variables On Customer Satisfaction Regarding E-Banking: An Empirical Investigation, Issues In Information Systems Volume Xii, No. 1, Pp. 436-444, 2011
50
Reeti Agarwal47 conducted the study on Customers’ perspectives regarding
e-banking in an emerging economy. The respondents were taken from the northern
part of India. The major findings depict that customers are influenced in their
usage of e-banking services by the kind of account they hold, their age and
profession, attach highest degree of usefulness to balance enquiry service among
e-banking services, consider security & trust most important in affecting their
satisfaction level and find slow transaction speed the most frequently faced
problem while using e-banking.
Jayalakshmi S.48 the main purpose of his study is to know the E-banking
services. She pointed out that the traditionally the relationship between the bank
and its customers has been on a one-to-one process. This process takes time to
complete a single transaction and may result in frauds and mistakes. Modern banks
can not depend on one-to-one process as the customers demand advanced services.
While computerization of banks tries to satisfy expectations of the customer, it also
reduces frauds and mistakes. This research study makes an attempt to analyze how
banks are attracting the various customers and how the customers are satisfied with
the services provided by the banks.
Dr. Saroj K. Datta49 investigated the factors which are affecting the
acceptance of e-banking services among adult customers and also indicates level of
concern regarding security and privacy issues in Indian context. Primary data was
47 Customers’ perspectives regarding e-banking in an emerging economy, Journal of Retailing and Consumer Services Vol.16, Issue 5, Pages 340-351, 2009,
48 E Banking –A Study with Reference to Customer Satisfaction, Advances In Management, 2009, vol. 2, issue 9
49 Acceptance of E-banking among Adult Customers: An Empirical Investigation in India, Journal of Internet Banking and Commerce, August 2010, vol. 15, no.2
51
collected from 200 respondents, above the age of 35, through a structured
questionnaire. Statistical analysis, descriptive statistics was used to explain
demographic profile of respondents and also Factor and Regression analyses were
used to know trend of internet use and factors affecting e-banking services among
adult customer in India. The finding depicted many factors like security & privacy,
trust, innovativeness, familiarity, awareness level increase the acceptance of
e-banking services among Indian customers. The finding showed that in spite of
their security and privacy concern, adult customers are willing to adopt online
banking if banks provide him necessary guidance. Based on the results of current
study, Bank’s managers would segment the market on the basis of age group and
take their opinion and will provide them necessary guidance regarding use of
online banking.
Uppal. R. K.50 made a study based on the responses of 768 customers of
public sector bank, Indian Private Sector Bank & Foreign Bank (each one from
these groups) operating in Amritsar district of Punjab and in case of fully E-bank,
(three banks, one from each bank group) have been taken into consideration. It
may be inferred that there is significant difference among three bank groups with
regard to the time customers have to spend to transact a business. The E-banks are
more efficient in regard to time factor. This is the very important factor of shifting
of potential customers in E-banks. The survey was conducted in Amritsar district
of Punjab in the month of September 2007. Chi-Square test is used to check the
level of significance difference among various bank groups and coefficient of
contingency among various bank group customers’ responses is also calculated.
50 Customer Service in Banks: Mapping Excellence in Emerging New Competitive Era, Information Management and Business Review Vol. 2, No. 5, pp. 193-202, May 2011.
52
Mathur Garima, et al.,51 they studied aims to analyze the major factors that
are contributing towards customer satisfaction in banking services. The study also
attempts to investigate any difference in the customer satisfaction of public and
private sector banks. The study revealed that Innovative services, Network,
Access, Technicalities, Behaviour, Comfort and Image are some of the factors
responsible for customer satisfaction. Results have also revealed that there is no
significant difference in the customer satisfaction of public and private sector
banks.
Pooja Malhotra and Balwinder Singh52 described the current state of
Internet banking in India and discussed its implications for the Indian banking
industry. Particularly, it seeks to examine the impact of Internet banking on banks’
performance and risk. Using information drawn from the survey of 85 scheduled
commercial bank’s websites, during the period of June 2007, the results showed
that nearly 57 percent of the Indian commercial banks are providing transactional
Internet banking services. The univariate analysis indicates that Internet banks are
larger banks and have better operating efficiency ratios and profitability as
compared to non-Internet banks. Internet banks rely more heavily on core deposits
for funding than non-Internet banks do. However, the multiple regression results
revealed that the profitability and offering of Internet banking does not have any
significant association, on the other hand, Internet banking has a significant and
negative association with risk profile of the banks.
51 Customer satisfaction in retail services: A comparative study of public and private sector banks, The Journal of Indian Management & Strategy Year : 2007, Volume : 12, Issue : 2
52 The Impact of Internet Banking on Bank Performance and Risk: The Indian Experience, Eurasian Journal of Business and Economics 2009, 2 (4), 43-62.
53
Usha Lenka, et al.,53 examined whether service quality of Indian
commercial banks increases customer satisfaction that fosters customer loyalty.
Data were collected from 350 valued customers of scheduled commercial bank
branches in Orissa (India). A questionnaire elicited information on socio–
demographic variables along with human, technical, and tangible aspects of service
quality, customer satisfaction, and loyalty. Results suggested that better human,
technical and tangible aspects of service quality of the bank branches increase
customer satisfaction. Human aspects of service quality were found to influence
customer satisfaction more than the technical and tangible aspects. Customer
satisfaction furthers customer loyalty. Increase in service quality of the banks can
satisfy and retain customers. In the Indian banking sector, human aspects are more
important than technical and tangible aspects of service quality that influence
customer satisfaction and promote and enhance customer loyalty.
Uma Sankar Mishra54 presented two structural equation models (SEMs),
one for public and another for private sector banks in India, to show the
relationship between customer satisfaction on bank services and the attributes of
the perceived service quality. Specifically, structural equation model is formulated
to explore the impact of the relationship between customer satisfaction and service
quality attributes.
53 Service Quality, Customer Satisfaction, and Customer Loyalty in Indian Commercial Banks, Journal of Entrepreneurship March 2009 vol. 18 no. 1 47-64
54 Service Quality Attributes Affecting Customer Satisfaction in Banking Sector of India, European Journal of Economics, Finance and Administrative Sciences Issue 24 (2010)
54
Sadia Samar Ali and R.K. Bharadwaj55 emphasized that the globalization
has been regarded as the standard process for success. Financial institutions are
providing better service to have competitive advantage. Banking industry
worldwide is offering various options, financial products and services to enhance
customer satisfaction. Innovative ways for information technology are used to
provide services. Undoubtedly e-banking (EB) is the technological wonders and is
gaining popularity. EB is regarded as pulse of the nation. It is important for banks
to encourage customers to use EB. Banks-trusted business service providers, have
the opportunity to leverage their existing relationships to provide full range of high
quality trusted internet business services to their customers. Their study
investigated several factors affecting adoption of EB. The prominent among these
factors are ease of use of EB followed by some reluctance of customers to change
relationship and trust in banker, cost of computers, internet accessibility and
security concerns. This study clearly revealed the segment, which are in demand
for attention of managers and researchers of EB services.
G. Kannabiran and P.C. Narayan56 discussed the experiences of a private-
sector bank in deploying Internet banking and e-commerce in India. Strategic
alignment of business and IT strategies, planning and implementation of e-banking
initiatives and management of benefits are captured, along with key contributions
to development.
55 Factor analysis approach of decision making in Indian e-banking: a value adding consumer's perspective, International Journal of Business Innovation and Research, Volume 4, Number 4 / 2010, Pages: 298 - 320
56 Deploying Internet banking and e-commerce—case study of a private-sector bank in India, Information Technology for Development Volume 11, Issue 4, pages 363–379, Autumn (Fall) 2005.
55
Rajesh Kumar Srivastava57 carried out a research to validate the conceptual
model of internet banking. The causes were identified and researched through
correcting the causative factors so that internet banking can be used by more
people. This will help the banking operations to be more cost effective. The
research is focused on what are the customer’s perceptions about internet banking
and what are the drivers that drive consumers. How consumers have accepted
internet banking and how to improve the usage rate were the focus of research area
in this study. Qualitative exploratory research using questionnaire was applied.
500 respondents were selected for study after initial screening. They were all bank
customers. The study reveals that education, gender, income play an important role
in usage of internet banking. Not much research has been done on these areas as
they were focused more on the acceptance of technology rather than on people.
The research corroborated the conceptual framework stating that if skills
can be upgraded there will be greater will to use internet banking by consumers.
Inhibitory factors like trust, gender, education, culture, religion, security, price can
have minimal effect on consumer mindset towards internet banking.
Rahmath Safeena58 determines the factors influencing the consumer’s
adoption of internet banking in India and hence investigates the influence of
perceived usefulness, perceived ease of use and perceived risk on use of IB. It is an
essential part of a bank’s strategy formulation process in an emerging economy
like India. Survey based questionnaire design with empirical test was carried out.
The results have supported the hypothesis.
57 Customer’s perception on usage of internet banking, Innovative Marketing, Volume 3, Issue 4, 2007.
58 Internet Banking Adoption In An Emerging Economy Indian Consumer, International Arab Journal Of E-Technology, Vol. 2, No. 1, January 2011
56
Kumar V.,59 investigate the linkages between business process management
(BPM) and customer satisfaction. Also, to challenge the dominance of the
customer contact perspectives on service processes and to propose a more systemic
focus on the totality of service design. The research builds on the existing work of
Maddern et al. through the use of structured equation modeling (SEM) tool. The
multiple SEM models described here provide a more robust statistical approach for
confirming/refuting the constructs found in the earlier research. This study
presented the results of an empirical analysis, based on longitudinal data from a
large UK bank on drivers of customer satisfaction. The results confirm that process
management is a critical driver of technical service quality. This suggested that
companies with reliability/dependability issues should not emphasize customer
satisfaction programs based on SERVQUAL intangibles until substantial
improvements in process design have been achieved.
Satendra Thakur60 examined the effect of service quality and customer
satisfaction on customer loyalty among the group of customers in Indian banking
industries. Data has been collected from 298 customers of the Indian banking
industries; this study is cross sectional and descriptive in nature. With the help of
the result of the study we can say that customer satisfaction is significantly and
positively related with customer loyalty customer satisfaction is also to be found
important mediator between service quality and customer loyalty.
59 Alternative perspectives on service quality and customer satisfaction: the role of BPM, International Journal of Service Industry Management Vol. 19 No. 2, pp. 176-187, 2008
60 Service Quality, Customer Satisfaction And Customer Loyalty: A Study With Special Reference To Indian Banking Industries, Indian Journal Of Marketing, Vol.40, No.5, 2010.
57
Prof. (DR.) Sultan Singh61 examined the progress of e-banking scenario
concerned with ATMs, Internet banking, Mobile banking and Credit cards and
their impact on customers’ satisfaction by analyzing the problems faced by the
customers in India. The analysis shows that among all the e-banking products,
Customer Satisfaction Level (CSL) of ATMs is highest and the number of users of
ATMs is also highest as compared to other services. Internet banking and credit
cards are at second and third position as far as CSL is concerned, but the number of
users is more in case of credit cards as compared to Internet banking. Mobile
banking is at the lowest position in terms of CSL and also in number of users.
Anubhav Anand Mishra62 postulates on the present levels of customer
satisfaction, and also tries to explore the factors that lead to customer satisfaction
in retail banking in India. Data from 100 survey respondents were collected from
one branch of one of the prominent retail banks in the city of Hyderabad. The
findings revealed that customer satisfaction, a transaction-specific attribute is
dependent on seven factors, which concur with extensive academic literature.
Devi, P Ambiga investigated the level of awareness among the customers
on the use of e-banking and their expectations from e-banking. From the findings
of the study, it was inferred that the customers are satisfied with the quality of
e-banking services. But they face technical as well as administrative and
procedural problems. Further to promote e-banking services, it is of importance
that the banks must ensure quality in customer service. 'Quality in work' and
61 E-Banking Scenario And Its Impact On Customers’ Satisfaction In India, International Journal Of Research In Commerce & Management, Volume No: 2 (2011), Issue No. 4 (April)
62 A Study on Customer Satisfaction in Indian Retail Banking, Journal of Management Research, vol.12, issue 9, 2009
58
'satisfaction of the customers' are the two key words, which must be given sternest
attention to promote a product.
Ankit Kesharwani63 using WEBQUAL scale he has made an attempt to
assess internet banking website quality in India from customers’ perspective. An
exploratory factor analysis, followed by a confirmatory factor analysis has been
applied on data collected from 593 respondents in India using an online
questionnaire. Findings demonstrate that there are some variations in WEBQUAL
dimensions in the context of internet banking services in India.
Daneshvar Poolad,64 his study deals with the concept of service quality and
has demonstrated the model of service quality gaps; it aims to measure customers
gap between satisfaction levels of interpretation of services and their preferences of
the interpretive service in internet banking at Indian commercial banks. The
research questions are utilized to measure the gap between expectation and
satisfaction levels of customers about quality of internet banking. For this purpose
a questionnaire with five-point Likert scale is applied to measure customers
expectation as well as satisfaction. Data was obtained from 102 respondents and
analyzed using SPSS 12 software by employing factor analysis and multiple
regressions. Results indicate that there are significant differences between overall
expectations and satisfaction levels of customers. For practitioners, it is worth
noting that customers are exclusively concerned with the “Sufficient menu for
transaction”,” Variety of services readily accessible”, “Availability for business”
and “Have a user-friendly system”, as important factors for them to apply internet
63 Exploration Of Internet Banking Website Quality In India: A WEBQUAL Approach, journal of Management Research, Vol. 9 No. 6, October 2010.
64 Evaluation gap of internet banking service quality by using servqual approach – an empirical study of Indian banks, Journal of Information Management Volume : 47, Issue : 5, 2010.
59
banking. The study contains material relevant to the internet banking industry, and
Implications are discussed and recommendations are offered for improving Internet
banking services.
Sunayna Khurana65 have observed a considerable growth of internet based
services. Managing service quality while using internet as a distribution channel is
a challenge for the service provider. The main objectives of this research study are
to identify the customer preferences towards online banking and to find out the
various service quality dimensions that affect customer satisfaction in internet
banking. Primary data was collected from internet banking users of public and
private banks in Hissar district with the help of a structured questionnaire. For the
collection of primary data, he confined himself only to the Hissar district. A
sample of 100 respondents who actually use internet banking was selected by
following non-probabilistic convenience sampling technique as it is appropriate for
exploratory studies. Data presentation and analysis were done with the help of
various statistical tools using SPSS. Efficiency, responsiveness, fulfillment,
privacy of personal information and easiness to use was found to be the core
service quality dimensions of internet banking.
R. K. Uppal66 explored the extent of Internet banking in Indian banking
industry. Time period taken for study is 2000-01 to 2006-07 because this period is
the eye-witness of infant condition of IT and during the same period IT became
mature. Simple statistical tools like average, standard deviation, co-efficient of
variation are used to calculate the efficiency of various bank groups providing the
65 Managing Service Quality: An Empirical Study on Internet Banking, Journal of Marketing Management, Volume : 38, Issue :7, 2008
66 Internet banking in India: Emerging risks and new dimensions, Business Administration and Management (BAM) Vol. 1(3), pp. 73-81, March 10
60
service of I-banking. On the basis of analysis, the paper concludes that the private
sector banks are on the top in providing the I-banking services to their customers
and have high profitability as compared to other bank groups under study except
foreign banks. The study also highlights the benefits of i-banking to customers as
well as to bankers and suggests some strategies with their possible solutions like to
spread awareness regarding I-banking and to increase its area and scope to enhance
I-banking services in India, particularly in rural and semi-urban areas.
Ravi Kant Sharma67 study the growth of retail lending, especially, in
emerging economies, is attributable to the rapid advances in information
technology, the evolving macroeconomic environment, financial market reform,
and several micro level demand and supply side factors. The savings rate in Asia is
another factor that may increase the attractiveness of retail banking markets. As the
emergence of customers middle class in India and China need better service quality
in the “customer centric era. Due to this, Service qualities have been important
primary competitive tool for banks to achieve success in the market place with
commonly undifferentiated services. The results of the study indicate that the
relative significance of commercial banks in the financial system in both India and
China is more or less same. The cost of intermediation by banks in India is
significantly higher than that of China. The size of the commercial banking system
of China is about eight times the size of the Indian commercial banking system.
China's banking system is quite large both in absolute and relative terms. Even
though Indian banks are beaten on size on quality parameters they are far ahead of
the Chinese counterparts because of their conservatives approach. Foreign banks in
India are relatively more significant than they are in China. McKinsey’s surveys
67 Service Quality in the Retail Banking Sector: A Study of India vs. China, Business Administration and Management (BAM) Vol. 5(7), pp. 63-69, 2009
61
of Asian Consumers show that affluent Chinese are less satisfied with the level of
Service they receive than their counter parts elsewhere in the region and that they
would switch to banks providing better service even the cost of higher fee or
intersect rates. Overall studies, India have far better service quality to their
customers as compare to Chinese retail banks
Puja Khatri and Yukti Ahuja68 compare the public sector banks and private
sector banks in terms of customer satisfaction and to study the various variables of
service quality using SERVQUAL model. The work has been carried out with the
objective of understanding the reasons of customer dissatisfaction and what are the
opportunity areas wherein these banks need to focus and strengthen their Customer
Relationship Management practices. The research work uses both the sources of
information, i.e. Primary and Secondary sources, and thereafter SERVQUAL
model has been used to identify the discrepancy in the service delivery system.
Finally the study concludes by giving some recommendations to improve in the
area where these banks do not meet the expectation of their customers.
Neha Dixit and Saroj K. Datta69 investigate on how the customers perceive
the value of Internet banking over the traditional way of banking. It identifies the
perceived service quality dimensions of self-service technology (Internet banking)
and the impact of these perceived service quality dimensions towards customer
satisfaction level in Internet banking. Primary data was collected from 250
respondents, through a structured questionnaire. Statistical analysis, descriptive
statistics and correlation were used to know the perceived service quality of
68 Comparative Study Of Customer Satisfaction In Indian Public Sector And Private Sector Banks, International Journal Of Engineering And Management Science, Vol. 1(1): 42-51, 2009.
69 Customer Perception on Internet Banking and their Impact on Customer Satisfaction & Loyalty: A Study in Indian Context, Journal of computing Volume 2, Issue 7, July 2010
62
Internet banking (IB) and level of satisfaction between customers in India. The
finding depicts many factors such as perceived value, perceived service quality;
customer satisfaction and their loyalty have significant impact on a customer
acceptance of Internet banking.
Bedi, Monica attempts to investigate the relationship between service
quality, overall customer satisfaction and behavioral intentions across public and
private banks in India. The findings indicated that service quality is a significant
determinant of customer satisfaction in Indian banking industry irrespective of
public and private sector banks. However, different dimensions of service quality
were found to be statistically significant across public and private banks. Customer
satisfaction was found to be strongly associated with propensity to recommend.
A review of the various studies on customer satisfaction towards banking
services revealed that the empirical research on E-Banking Practices
and Customer Satisfaction in Thanjavur district of Tamilnadu is not yet attempted.
The present study “E-Banking Practices and Customer Satisfaction in Thanjavur
district of Tamilnadu” attempts to fill this research gap. The results of the study
are expected to provide a practical contribution in the area of e-banking services
and in understanding customer behavior in the business-to-business financial
services industry in the global competitive scenario.
63
CHAPTER – III
E-BANKING SCENARIO IN INDIA
Introduction
Electronic banking is an umbrella term for the process by which a customer
may perform banking transactions electronically without visiting a brick-and-
mortar institution. The following terms all refer to one form or another of
electronic banking: personal computer (PC) banking, Internet banking, virtual
banking, online banking, home banking, remote electronic banking, and phone
banking. PC banking and Internet or online banking is the most frequently used
designations. It should be noted, however, that the terms used to describe the
various types of electronic banking are often used interchangeably.
Electronic banking is an activity that is not new to banks or their customers.
Banks having been providing their services to customers electronically for years
through software programmes. These software programs allowed the user’s
personal computer to dial up the bank directly. In the past however, banks have
been very reluctant to provide their customers with banking via the Internet due to
security concerns. Today, banks seem to be jumping on the bandwagon of Internet
banking. Why is there a sudden increase of bank interests in the Internet? The first
major reason is because of the improved security and encryption methods
developed on the Internet. The second reason is that banks did not want to lose a
potential market share to banks that were quick to offer their services on the
Internet.
Many of the banks like ICICI, HDFC, IndusInd, IDBI, Citibank, Global
Trust Bank (GTB), Bank of Punjab and UTI were offering E-banking services.
Based on the above statistics and the analysts’ comments that India had a high
64
growth potential for e-banking, the players focused on increasing and improving
their E-banking services. As a part of this, the banks began to collaborate with
functions online.
E-banking is defined as the automated delivery of new and traditional
banking products and services directly to customers through electronic, interactive
communication channels. E-banking includes the systems that enable financial
institution customers. Individuals or businesses, to access accounts, transact
business, or obtain information on financial products and services through a public
or private network including the Internet, Customers access e-banking services
using an intelligent electronic device.
The E-banking was firstly introduced in India by the ICICI around 1996.
There after many other banks like HDFC, IndusInd bank, IDBI, Citibank Trust
Banks, UTI, etc. followed the service. As today private and foreign bank had
started capturing the market through e-banking hence “the competition is heating
up and the lack of technology can make a bank loose a customer” so now the
public banks are breaking the shackles of traditional set-up and gearing up to face
the competition posed by the private sector counterparts.
The Global E-Banking Scenario
The banking industry is expected to be a leading player in e-business.
While the banks in developed countries are working primarily via Internet as non-
branch banks, banks in the developing countries use the Internet as an information
delivery tool to improve relationship with customers. Banks have established an
Internet presence with various objectives, most of them arousing the Internet as a
new distribution channel. Financial services, with the use of Internet, may be
offered in an equivalent quantity with lower costs to the more potential customers.
65
There may be contacts from each corner of the world at any time of day or night.
This means that banks may enlarge their market without opening new branches.
The banks in the US are using the Web to reach opportunities in three different
categories: to market information, to deliver banking products and services, and to
improve customer relationship.
In Asia, the major factor restricting growth of e-banking is security, in spite
of several countries being well connected via Internet. Access to high-quality
e-banking products is an issue as well. Majority of banks in Asia are just offering
basic services compared with those of developed countries. Still, e-banking seems
to have a future in Asia. According to McKinsey survey, e-banking will succeed if
the basic features, especially bill payment, are handled well. Bill payment was the
most popular feature, cited by 40 percent of respondents of the survey. However,
providing this service would be difficult for banks in Asia because it requires a
high level of security and involves arranging transactions with a variety of players.
In India, approximately one percent of high and middle-income group
banking customers conducted banking on the Internet in 2000 compared to 5 to 6
percent in Singapore and South Korea. In 2001, a Reserve Bank of India survey
revealed that more than 20 major banks were either offering e-banking services at
various levels or planned to do so in the near future. Some of the private banks
included ICICI Bank, HDFC Bank, IndusInd Bank, IDBI Bank, Citibank, Global
Trust Bank, Bank of Punjab and UTI Bank. In the same year, out of an estimated
0.9 million Internet user base, approximately 17 percent were reported to be
banking on the Internet. The above statistics reveal that India does have a high
growth potential for e-banking. The banks have already started focusing on
increasing and improving their e-banking services. As a part of this, the banks
66
have begun to collaborate with various utility companies to enable the customers to
perform various functions in online.
Majority of the banks in the US were offering e-banking services.
However, large banks appeared to have a clear advantage over small banks in the
range of services they offered. Some banks in the US were targeting their Internet
strategies towards business customers. Apart from affecting the way customers
received banking services; e-banking was expected to influence the banking
industry structure. The economics of e-banking was expected to favour large banks
because of economies of scale and scope, and the ability to advertise heavily.
Moreover, e-banking offered entry and expansion opportunities that small banks
traditionally lacked.
In Europe, the Internet is accelerating the reconfiguration of the banking
industry in to three separate businesses: production, distribution and advice. This
reconfiguration is being further driven by the Internet, due to the combined impact
of; the emergence of new, more focused business models, new technological
capabilities that reduces banking relationship and transaction costs and high degree
of uncertainty over the impact that new entrants will have on current business
models.
Though e-banking in the Europe is still in the evolutionary stage, it is very
clear that it is having a significant impact on traditional banking activities. Unlike
in the US, though large banks in the Europe have a competitive edge due to their
ability to invest heavily in new technologies, they are still not ready to embrace
e-banking. Hence, medium-sized banks and start-ups have an important role to
play on the e-banking front if they can take concrete measures quickly and
effectively.
67
The E-Banking Trends
Convergence is one of the clear visible trends in the banking industry.
Here, convergence does not mean offering banking, broking and insurance services
under one corporate name through the Internet. It covers different dimensions,
including channel delivery, sales, culture, back-office processes, and the
knowledge management infrastructure all being integrated via Internet. Few banks
take these different dimensions into consideration. Instead, they view convergence
purely as a product-centric development that will enable them to cross-sell
products. A strategy that does not go beyond product convergence is bound to have
some limitations. For example, imagine a situation where customer service
personnel in a so called `converged' bank is required to answer banking, brokerage,
and insurance questions coming through multiple channels including the Internet,
branches, call centers, or ATMs. This bank is unlikely to succeed since, though it
has expanded the product line, it has not made any efforts to broaden the skill sets
of the personnel who support these channels.
Effective knowledge management is the key to the e-business success of
converged banking institutions. However, this requires high level of cross-
organizational cooperation and information sharing. An effective knowledge
management system will vastly improve the institution's ability to know its
customers. Robust customer information management systems at the front-end,
coupled with efficient fulfillment processes, can enable banks to shorten the
delivery time of their products and services. Successful convergence will help
them in the development of a seamless supply chain that will be transparent to the
customers.
Another trend in e-banking is a shift of focus of banks from being product-
centric to customer-centric. Access to the Internet has put wealth management
68
decisions and demand-side technology in customers' hands, and they can dictate
the types of products and services they require. While the Internet has enabled
banks to deliver desired products/services more quickly and inexpensively, the
challenge for them is to enhance customer touch using e-channels, which is very
important for client retention.
To succeed on the Internet, banks must continually differentiate them from
their competitors, broaden their market and provide value through their products
and services. For example, Wells Fargo had shifted 1.4 million of its traditional
banking customers online within five years of the development of its transactional
website. However, the company had maintained its Internet strategy as a
complement to existing channels and had found that its e-banking customers were
more than 50 percent less likely to leave the bank than non-Internet customers. The
bank continued to enter new alliances and expanded its web offerings to maintain
its dominant position.
Finally, developing just a me-too website would not work for banks.
Several banks are creating electronic financial communities in which customers
assemble to present and pay bills while satisfying other financial and informational
needs. By bringing consumers and vendors together at one site, financial
institutions can leverage the trust, clients have in them, and act as the intermediary
to ensure billers get paid and consumers get satisfactory services. Last but not the
least, banks may conduct periodical surveys and take customer views on the
simplicity and ease of operation of their websites and other e- banking initiatives.
Indian E-Banking Scenario
As per the international report the banking transactions on a brick and
mortar banking costs around $ 1.1. While through ATM it costs around $ 0.27 and
69
just 1 percent of over the counter banking in case of Internet banking. Thus, the
Indian banking system is seeing a fabulous change in the quality of service
provided by them. Technology is the root of this change, which is implemented by
the banks’ to win more business from customers. Almost all the private sector
banks are moving towards e-enabling their existing products. HDFC Bank and
ICICI Bank have taken a lead in introducing e-banking in India.
Internet banking starts from migrating existing products and services to the
internet. This started initially with simple functions such as getting information
about interest rates, checking account balances and computing loan eligibility.
Then the services were extended to online bill payment, transfer of funds between
accounts and cash management services for corporates. Recently, banks started
setting up payment gateways for B2B and B2C transactions. This is to facilitate
payment for e-commerce transactions by directly debiting bank accounts or
through credit cards. Banks can earn a commission based income, on the
transaction or sale value resulting in higher income. This could be more than the
revenues they can generate from credit card transactions.
Private sector banks have leveraged the Internet effectively in taking away
the customers from public sector banks and significantly increased their revenue
potential. Internet banking is just one manifestation of these banks’ technological
capabilities. They have a complete automation, an electronic customer database,
real time transaction processing capabilities and the latest technological platforms.
Management of these banks is very focused in using technology as a key
competitive tool. The capability of the management is also visible in terms of their
profitability. Among the private sector banks HDFC Bank and ICICI Bank have
excellent returns on equity compared to their peers in the industry.
70
These banks commenced operations few years and have negligible excess
in terms of branches and employees. Therefore unlike most other banks around the
world, e-banking is not an added cost for them. In fact it is expected to contribute
significantly to their revenues and profits in years to come.
The distribution of banking business in India is highly skewed both
geographically and in terms of customer segment. Geographically the top 100
centers account for around 70 percent of the loans disbursed. This are expected to
account for mostly early Internet users. In terms of customer segment, key focus on
the asset side is the corporate sector. This segment accounts for a high share of
profits of banks and is likely to be an early adapter to the Internet. On the liability
side Internet banking is expected to boost customer acquisition and profitability
significantly in the top corporate segment and in the urban high/middle income
retail segments.
Apart from e-banking, future prospects of e-commerce is also strong as it is
set for explosive growth rates. For e-commerce to take off there is a need for real
time financial intermediation and there are very few banks offering this in India.
The right combination of customer relationship and technological competency is
required to dominate the financial intermediation of e-commerce. Who else than
private sector banks can provide such services? They are all set to lead the segment
with a marginal competition from foreign banks. Going forward, as the share of e-
commerce in the economy increases, these banks should be able to move up their
market share apart from generating higher fee based income.
But one does wonder what difference e-banking make with only 22 percent
of the Internet uses globally utilizing e-banking services. In India also the
penetration is less than 1 percent. It is not all win-win case for Internet banking in
71
India. A number of uncertainties surround e-banking and e-commerce ventures.
Among the others, hurdles like low Internet penetration, security issues, tax
considerations and credit issues continue to depress the growth of the segment.
Even if the government has passed the cyber laws, still there is a lack of clarity
about legislative aspects governing the sector and the effectiveness of the
administration to track & punish cybercrimes. It all depends on the ability of banks
to enter these businesses successfully.
Those banks which have already started e-banking will have to
continuously update their services to retain the potential customers since any
customer is just a click away from a competitor elsewhere. Also, one cannot afford
to depend only on Internet banking; brick and mortar will continue to play an
important role. For those, which are yet to begin, are ignoring the potential
customers by remaining away from the latest technology.
Mediums of E-Banking
The medium of e-banking services offered by the banking industry is
discussed below:
Various Products and Services
Electronic banking, also known electronic fund transfer (EFT), uses
computer and electronic technology as a substitute for checks and other paper
transactions. EFTs is initiated through devices like cards or codes that let customer,
or those customer authorize, access your account. Many financial institutions use
ATM or debit cards and Personal Identification Numbers (PINs) for this purpose.
Some use other forms of debit cards and personal Identification Numbers (PINs)
for this purpose. Some use other forms of debit cards such as those that require, at
the most, your signature or a scan. The federal Electronic Fund Transfer Act (EFT
72
Act) covers some electronic consumer transactions. Following are the electronic
medium by which services are generally provided by the banks as a part of
e-banking services.
1. Internet Banking
2. ATM (Automatic Teller Machine)
3. Phone Banking
4. Mobile Banking
5. Payment Cards (Debits/Credit Card)
All the above mediums provide services, which can be, also known as “any
time anywhere banking”. This facilitates the customer of the bank to operate their
account from any corner of the world, without visiting local or any subsidiary
branch of their banks. Efforts are made by the bank not only to provide the facility
to the customer, but also to reduce the operational cost of the bank by providing
e-banking services. So with this, banks have to employ less staff and still would be
able to deliver service to the customer, round the corner.
Internet Banking
Net banking is a web-based service that enables the banks authorized
customers to access their account information. It allows the customers to log on to
the banks website with the help of bank’s issued identification and personal
identification number (PIN). The banking system verifies the user and provides
access to the requested services, the range of products and service offered by each
bank on the internet differs widely in their content. Most banks offer net banking
as a value-added service. Net banking has also led to the emergent of new banks,
which operate only through the internet and do not exists physically, Such banks
are called “virtual” banks or “Internet Only” banks.
73
A couple of years ago, there was a belief even among bankers that
customers opening new accounts wanted the online banking facility, just to ‘feel
good’ and very few of them actually used that services. Today, bankers believe that
the trend from ‘nice to have’ is changing to ‘need to have’.
Services provided through Internet Banking
1. Account information
2. E-cheques (Online Fund Transfer)
3. Bill Payment Service
4. Requests And Intimations
5. Demat Account share trading
Account information
Account information provides summary of all bank accounts. Allow
transaction tracking which enables retrieval of transaction details based on cheque
number, transaction amount, and date. It also provide account statement and
transaction reports used on user-defined criteria. Customers can even download
and print the statement of accounts.
E-Cheques (Online Fund Transfer)
Customer can transfer funds; Transfer funds between accounts, even if they
are in having an account with the same bank anytime, anywhere, using third party
funds transfer option.
Bill Payment Service
Banks Bill Payment Service is the easiest way to manage bills. Account
holder can pay their regular monthly bills i.e. telephone, electricity, mobile phone,
insurance etc. at anytime, anywhere for free. Saves time and effort. Make bill
74
payments at customer’s convenience form their home or office. Let’s account
holders check their bill amount before it is debited form their account. No debit to
account without their knowledge. No more missed deadlines, no more loss of
interest – account holder can schedule their bills in advance, avoid missing the bill
deadlines as well as earn extra interest on their money. Track payment history – all
payments to a biller are stored automatically for future reference. No queuing up at
collection centers or writing cheque anymore. Just a few clicks and customers
account will be debited for the exact amount they ask.
Requests and Intimations
Can electronically submit a request for:
• Cheque-book
• Stop payment instructions
• Opening a fixed deposit
• Opening a recurring deposit
• Intimate for the loss of ATM card
• Register online for phone and mobile banking
• Cheque status
• Online application for debit card
• Issue a DD or a Banker’s cheque form account at special rates.
Just select the account to be debited form and give details of the amount,
location and beneficiary. The demand draft will be couriered to account holder at
their mailing address. Customers can get their applications for issuance of Letters
of Credit and Bank Guarantees processed online Book the customers Railways
Ticket Online
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Demat Account
Demat is commonly used abbreviation of ‘Dematerialisation’, which is a
process whereby securities like share, debentures are converted from the ‘material’
(paper documents) unto electronic data and stored in the computer of an electronic
Depository. A depository is a security ‘banks,’ where dematerialized physical
securities are held in custody, and form where they can be traded. This facilitates
faster, risk-free and low cost settlement.
Share Trading
In share trading a customer can buy and sell securities online without
stepping into a broker’s office. Once the shares are dematerialized then the trading
can be done from home or office. As demat account are directly linked to the
customer’s bank account, so there is no need to write cheque for the payments or to
fill up the slips to deposit the cheque. Amount for the purchase and sale of
securities is automatically debited or credited to their bank account. It also brings
the same convenience while investing in Mutual funds also hassle free and
Paperless.
ATMs
Automated Teller Machines or 24-hour Tellers are electronic terminals that
let the customer bank almost anytime. To withdraw cash, make deposits, or
transfer funds between accounts, you generally insert an ATM card and enter your
PIN. Some financial institution and ATM owners charge a fee, particularly to
consumers who don’t have accounts with transactions at remote locations.
Generally, ATMs must tell the customer they charge a fee and its amount on or at
the terminal screen before the customer completes the transaction.
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It is worth noting that, due to market saturation, overall ATM usage is
increasing while transaction volume on a per-ATM basis is now in decline.
Cash withdrawal
Withdraw up to Rs.15,000/- to Rs.40,000 per day from customer account.
Fast cash options provides the facility of withdrawing prefixed amounts. Ultra-Fast
Cash operation allows you to withdraw Rs.3000/- in one shot.
Balance Enquiry
Know customer ledger balance and available balance
Mini Statement
Get a printout of your last 8 transactions and customer current balance.
Deposit Cash / Cheques
Available at all full function ATMs, customers can deposit both cash and
cheques. Cash deposited in ATMs will be credited to the account on the same day
(provided cash is deposited before the clearing) and cheques are sent for clearing
on the next working day.
Funds Transfer
Transfer funds from one account to another linked account in the
same branch.
PIN Changes
Change the Personal Identification Number (PIN) of ATM or Debit card.
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Payments
The latest feature of ATMs is functionality can be used for payment
of bills, making donations to temples / trusts, buying internet packs, airtime
recharges for prepaid mobile phones and much more
Others
Request for a checkbook from the ATMs and concerned branch will
dispatch it such that it reaches the customer within 10 working days.
Credit Card Market in India
The card industry, which is growing at the rate of 20% per annum, is
flooded with cards ranging from gold, silver, global, smart to secure, the list is
endless. From just two players in early 80s, the industry now houses over 10 major
players vying for a major chunk of the card pie. Currently four major bishops are
ruling the card empire – Citibank, Standard Chartered Bank. HSBC and State Bank
of India (SBI). The industry, which is catering to over 3.8 million card users.
Accordingly to a study conducted by State bank of India, Citibank is the
dominant player, having issued 1.5 million cards so far. Stanch art follows way
behind with 0.67 million, while Hong Kong Bank has 0.3 million credit card
customers. Among the nationalized banks, SBI tops the list with 0.28 million
cards, followed by Bank of Baroda at 0.22 million.
The credit card market in India, which started out in 1981, is on the verge
of an unprecedented boom. Between 1987 and 2000, the market has virtually
grown to over 3.8 million cards with almost 25-30% growth in new cardholders.
The latest innovation in credit cards is the introduction of a magnetic slip in the
card for use in withdrawing cash at the automatic teller machine (ATM), of which
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about 60000 are already in existence in the world. In India also ATMs have made
late appearance, but now spreading very rapidly.
Advantages of Credit Card
The following are the advantages of credit cards: 1. The credit card holders
need not to carry either traveler’s cheques or cash with them and they are free from
the security of cash. 2. Traveling facilities are available in hotels, restaurants and
airways to the cardholders. 3. Each card holder gets insurance facility which is up
to one lakh on ordinary insurance. 4. It has become a status symbol. Railway
tickets are available on special windows. Extra charges are made by the railway
and the cancellation of tickets is also allowed and the amount is directly credited in
the bank account of the card holder. 5. The business of the card holder individuals
or institution has been because the businessmen are assured for the payment as the
transactions have been finalized on the basis of credit cards. 6. Credit cards
enhance the credit of banks and the credit of new customers and consumers is
enhanced. 7. Deposits in saving and current accounts increase. 8. Service charges
on credit card increase the profitability of banks.
Disadvantages of Credit Card
Credit cards its own disadvantages as discussed below:
1. Credit card is a contact in advance and if the card holder does not make
payment, the recovery by bank becomes difficult. 2. Card holders spend in excess
of their incomes and it poses the problem of recovery form them. 3. Bank’s
profitability is adversely affected due to increase in overdraft of cardholders and
difficulties in repayment by them.
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Future of Credit Cards
In India this facility has increased the business activities; middle and upper
middle classes are availing this facility. It has become popular and status symbol in
India hence the prospects of credit cards are bright.
Smartcards
A smartcard resembles a credit card except that it has a microchip
embedded with in it, which allows the smartcard to store information and
sometimes to even perform simple calculations. Common smartcard chips typically
holds about 8,000 bytes (characters) of information, which enables the smartcard to
perform a variety of functions such as identification , storing bank account
information an holding digital cash. A number of smartcards are on the market
today, and these are used in a wide range of applications. Mondex has received a
lot of recognition in the financial press, and several banks have already conducted
trials with its smartcard. Wells Fargo & Co., a major California bank based in San
Franscisco, will issue Mondex smartcards to all of its online banking customers,
because MasterCard International holds a 51 per cent stake in Mondex, it could
become the defect to international standard for bank-issued smartcards.
Smart Cards – The new Innovation
A smart card is a miniaturized personal computer (PC), which can be used
for a dazzling array of applications, and also as ‘digital’ cash. It contains a
microprocessor, memory and tailored software. The software security system used
for these cards is almost as foolproof as those used by nuclear establishments and
leading international banks! Smart cards can manage security procedures using
passwords and state-of-the-art encryption techniques. Further, identity traits such
as digitized photos, signatures and fingerprints being placed on the card make it
fraud-proof.
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E-money
E-money may be broadly defined as “an electronic store of monetary value
on a technical device used for making payments to undertakings other than the
issuer on a technical device used for making payments to undertakings other than
the issuer without necessarily involving bank accounts in the transaction, but
acting as a prepaid bearer instrument” (Eropean Central Bank, 1998) These
products could be classified in to two broad categories viz., A) Pre-paid stored
value card (sometimes called “electronic purse”) and B) Pre-paid software based
product that used computer networks such as internet (sometimes referred to as
“digital cash” or “network money”). The stored value card scheme typically uses a
microprocessor chip embedded in a plastic card while software based scheme
typically specialized software installed in a personal computer. The stored value
card could be of three types single-purpose card, closed-system or limited-purpose
card could be of three types single-purpose card, closed-system or limited-purpose
card and general-purpose or multi-purpose card.
The single-purpose card generally with a magnetic chip recording the
amount of fund there in is designed to facilitate only one type of transaction e.g
telephone calls, public transportation, laundry, parking facilities etc. Here, the
distinguishing point is that the issuer and the service provider (acceptor) are
identical for the cards. These cards are expected to substitute coins and currency
notes. It is important to note that the European Central Bank (ECB) has exempted
these single-purpose pre-paid cards from the purview of their policy initiatives on
e-money because of their smaller denominations as well as limited risk exposure
for customers and the financial system as a whole. The closed-system or the
limited-purpose cards are generally used in a small number of well-identified
points of sale within a well-identified location such as corporate/university
campus. ECB has recommended that these cards be subject to lighter regulations
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and be issued by credit institutions. The multipurpose card on the other hand can
perform variety of functions with several vendors’ viz., credit card, debit card,
stored value card, identifications card, repository of these cards with respect to
regulatory oversight, restrictions on issuers and their implications or monetary
policy. These cards may reduce demand for current accounts in the bank for likely
reduction in transaction costs, and prudent portfolio management.
Mobile Banking
Mobile communication devices are revolutionizing banking transactions
over wireless networks and the internet to attract and retain customers, banks need
to extend their full range of services across a wide range of mobile, wireless
devices without having an impact on their current infrastructure and delivery
channels it currently supports. Wireless networks, mobile gateways all play an
important role in bringing mobile banking strategy to the market.
Now customer bank account is now just a phone call away. Through Phone
Banking customer can:
• Check account balance.
• Check the last 5 transactions in customer account.
• Enquire on the cheque status.
• Have a mini statement faxed across to customer.
• Request for a cheque book / Account statement.
• Enquire on your fixed deposits / TDS.
• Open a fixed deposit
• Request for Demand Draft / Managers Cheques.
• Transfer funds amongst customer linked accounts
• Pay utility and HDFC Bank Credit Card bills.
• Do a stop cheque payment.
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• Report loss of your ATM /Debit Card.
• Product information.
• Enquire on the interest / Exchange rates.
Phone banking facility is available round the clock, every day, in Mumbai,
Delhi,Chennai, Kolkata, Banglore, Hyderabad, Ahmedabad, Chandigarh and Pune
E-Banking Transactions
The following are E-Banking transactions
Informational website
Informational websites provide customers access to general information
about the financial institution and its products or services. Risk issues examiners
should consider when reviewing informational websites include
• Potential access to confidential financial institution or customer
information if the website is not properly isolated from the financial
institution’s internal network;
• Potential liability for spreading viruses and other malicious code to
computers communicating with the institution’s website; and
• Negative public perception if the institution’s on-line services are disrupted
or if its website is defaced or otherwise presents inappropriate or offensive
material.
Translational Website
Transactional websites provide customers with the ability to conduct
transactions through the financial institution’s website by initiating banking
transactions or buying products and services. Banking transactions can range from
something as basic as a retail account balance inquiry to a large business-to-
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business funds transfer. E-banking services, like those delivered through other
delivery channels, are typically classified based on the type of customer they
support.
Since transactional websites typically enable the electronic exchange of
confidential customer information and the transfer of funds, services provided
through these web sites expose a financial institution to higher risk than basic
informational websites. Wholesale-banking systems typically expose financial
institutions to the highest risk per transaction, since commercial transactions
usually involve larger dollar amounts. In addition to the risk issues associated with
informational websites, examiners reviewing transactional e-banking services
should consider the following issues:
• Security controls for safeguarding customer information;
• Authentication processes necessary to initially verify the identity of new
customers and authenticate existing customers who access e-banking
services;
• Liability for unauthorized transactions;
• Losses from fraud if the institution fails to verify the identity of individuals
or businesses applying for new accounts or credit on-line;
• Possible violations of laws or regulations pertaining to consumer privacy,
anti-money laundering, anti-terrorism, or the content, timing, or delivery of
required consumer disclosures; and
• Negative public perception, customer dissatisfaction, and potential liability
resulting from failure to process third-party payments as directed or within
specified time frames, lack of availability of on-line services, or
unauthorized access to confidential customer information during
transmission or storage.
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Technology in Banking
The introduction of new technologies has radically transformed banking
transactions. In the past, customers had to come physically into the bank branch to
do banking transactions including transfers, deposits and withdrawals. Banks had
to employ several tellers to physically make all those transactions. Automatic
Teller Machines (ATMs) were then introduced which allowed people to do their
banking on their own, practically anytime and anywhere. This helped the banks cut
down on the number of tellers and focus on managing money. The Internet then
brought another venue with which customers could do banking, reducing the need
for ATMs. Online banking allowed customers to do financial transactions from
their PCs at home via Internet.
Now, with the emergence of Wireless Application Protocol (WAP)
technology, banks can use the infrastructure and applications developed for the
Internet and move it to mobile phones. Now people no longer have to be tied to a
desktop PC to do their banking. The WAP interface is much faster and convenient
than the Internet, allowing customers to see account details, transaction details,
make bill payments, and even check credit card balance.
Payment and Settlement Systems
As part of restructuring of the banking sector, special emphasis has been
accorded to improvements in payment and settlement systems. Prominent among
the measures initiated in these areas include introduction of Electronic Funds
Transfer (EFT), Real Time Gross Settlement System (RTGS), Centralized Funds
Management System (CFMS), the NDS and the Structured Financial Messaging
Solution (SFMS). The SFMS would be the backbone for all message-based
communication over the Indian Financial Network (INFINET)
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Electronic Clearing Services (ECS)
ECS (credit clearing) is a mode of payment whereby an institution makes a
large number of payments like interest, dividend, salary, pension to a large number
of investors/shareholders/employees/ex-employees and can make the payments
electronically instead of issuing paper warrants. There is no value limit for making
ECS credit payments. ECS credit is becoming very popular for crediting salaries,
pensions and vendor payments. ECS credit has received a boost on account of
CVC guidelines for prohibiting cash payments, cash transaction tax and also SEBI
guidelines on payment of dividends.
Electronic Funds Transfer (EFT)
RBI’s EFT system was a result of the Shere Committee recommendations
of 1994. EFT has been defined as the series of transactions beginning with the
remitter’s payment order to the remitting branch made for the purpose of making
payment to the beneficiary. It has been introduced by RBI to help banks offering
their customers, money transfer service from one account of any bank (including
same banks) branch, to both inter-city and intra-city. The system is an
improvement over the existing system of demand draft, mail transfers etc. as funds
are transferred on Second day.
National Electronic Funds Transfer System (NEFT)
National Electronic Funds Transfer System (NEFT) is an account, to
account funds transfer facility on the secure Structured Financial Messaging
Solution (SFMS) platform available for the networked branches of the banks.
NEFT became operational in November 2005. NEFT funds transfers are PKI
(Public Key Infrastructure) enabled and hence highly secure. It has three
settlements per day at 10:30 am, 1 pm and 3 pm. NEFT at present is available in
nearly 40 banks and over 3000 branches of banks and is expected to reach all the
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branches which are covered by Real Time Gross Settlement (RTGS). Once NEFT
is stabilized, NEFT extended would be launched to reach the branches nearby to
the networked branches so that rural facilitation of funds transfers on a T plus 1
basis is possible. NEFT like Real Time Gross Settlement (RTGS) uses the Indian
Financial Systems Code (IFSC) for routing purposes. Each branch of the
participant banks has a code which is similar to the SWIFT code.
Cheque Truncation System
Cheque Truncation means that the physical cheque is scanned at the bank
of first deposit (presenting bank) and thereafter the electronic image of the cheque
is used by the paying bank to make payment. This system will replace the physical
cheques with the electronic images throughout the clearing cycles. The famous
quote by Bill Gates that banking is vital to a healthy economy, but banks
themselves do not highlight the crucial nature of the electronic forces that are
affecting banks, more than any other financial service provider group. This
transition of business operations by banks have created new mode of operation
called e-banking.
Real Time Gross Settlement System (RTGS)
Real time gross settlement systems (RTGS) are funds transfer systems
where transfer of money or securities takes place from one bank to another on a
"real time" and on "gross" basis. Settlement in "real time" means payment
transaction is not subjected to any waiting period. The transactions are settled as
soon as they are processed. "Gross settlement" means the transaction is settled on
one to one basis without bunching or netting with any other transaction. Once
processed, payments are final and irrevocable.
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Centralized Funds Management System (CFMS)
The CFMS would enable the funds and treasury managers of commercial
banks to obtain the consolidated account-wise, centre-wise position of their
balances with all the 17 Deposit Accounts Departments (DAD) of the Reserve
Bank. The system has been tested prior to installation and phase-wise
implementation commenced from November 2001.The CFMS would enable better
funds management by constituent current account holders of the Reserve Bank
Structured Financial Messaging Solution (SFMS)
At the base of all inter-bank message transfers using the INFINET is the
SFMS. SFMS would serve as a safe, secure communication carrier built with
templates for transmission of intra and inter-bank messages in fixed message
formats, which would facilitate” Straight Through Processing". SFMS comprises
the central server in the form of a hub located at the Institute for Development and
Research in Banking Technology (IDRBT), Hyderabad and individual bank
gateways to which the branches of the banks would be connected with a provision
for banks to have multiple bank level gateways. The SFMS would provide for all
inter-bank transactions to be stored and switched at the central hub, while intra-
bank messages will be switched and stored by the bank gateway. Adequate security
in the form of smart card authentication apart from the Public Key Infrastructure
(PKI) would be an integral part of the SFMS. All these would result in the security
levels matching those of international standards.
Indian Financial Network (INFINET)
The Indian Financial Network [INFINET] is the communication backbone
for the Indian Banking and Financial Sector. All Banks, Public Sector, Private
Sector, Cooperative, etc., and the premier Financial Institutions in the country are
eligible to become members of the INFINET. The INFINET is a Closed User
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Group [CUG] Network for the exclusive use of member banks and financial
institutions. The communication backbone is based on IP VPN Layer 3 Network
with full mesh VPN network. Presently, the network is spread across 300 cities in
India.
Recent Trends in Banking Industry of India
The economy can be divided in the entire spectrum of economic activity
into the real and monetary sectors. The real sector is where production takes place
while the monetary sector supports this production and in a way is the means to the
end. People know and accept the financial system is critical to the working of the
rest of the economy. In fact, the Asian crisis of the nineties, or for that matter what
happened in Latin America and Russia subsequently and also Dubai Crisis have
shown how a fragile financial sector can wreak havoc on the rest of the economy.
Therefore the banking sector is crucial and customers want to express their views
to explore how this sector can work in harmony with the real sector to achieve the
desired objectives.
The banking sector has been immensely benefited from the implementation
of superior technology during the recent past, almost in every nation in the world.
Productivity enhancement, innovative products, speedy transactions, seamless
transfer of funds, real time information system, and efficient risk management are
some of the advantage derived through the technology. Information technology has
also improved the efficiency and robustness of business processes across banking
sector.
India's banking sector has made rapid strides in reforming and aligning
itself to the new competitive business environment. Indian banking industry is the
midst of an IT revolution. Technological infrastructure has become an
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indispensable part of the reforms process in the banking system, with the gradual
development of sophisticated instruments and innovations in market practices.
IT in Banking
Indian banking industry, today is in the midst of an IT revolution. A
combination of regulatory and competitive reasons has led to increasing
importance of total banking automation in the Indian Banking Industry.
Information Technology has basically been used under two different avenues in
Banking. One is Communication and Connectivity and other is Business Process
Reengineering. Information technology enables sophisticated product
development, better market infrastructure, implementation of reliable techniques
for control of risks and helps the financial intermediaries to reach geographically
distant and diversified markets.
The bank which used the right technology to supply timely information will
see productivity increase and thereby gain a competitive edge. To compete in an
economy which is opening up, it is imperative for the Indian Banks to observe the
latest technology and modify it to suit their environment. Not only banks need
greatly enhanced use of technology to the customer friendly, efficient and
competitive existing services and business, they also need technology for providing
newer products and newer forms of services in an increasingly dynamic and
globalize environment. Information technology offers a chance for banks to build
new systems that address a wide range of customer needs including many that may
not be imaginable today.
Emerging Issues
The following issues are emerging in IT era
1. Awareness regarding New Technology in Banks
2. High cost in E-banks
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3. Customers Confidence in e-channels
4. Hesitance aspect to use e-channels
5. To acquaint the bank customers with global bank technology
6. Capturing rural & semi urban population
7. Marketing with e-channels
8. Changing customer profile
9. Proper location of ATMs, mobile ATMs
10. Lack of IT experts.
11. Creation of proper IT related infrastructure.
Responsibilities of Banks in IT Era
The responsibilities of Indian banking sector in the information technology
era are;
1. Banks should give demo regarding the use of e-channels and e-banking
facilities by all the banks.
2. Fee charges should be transparent,
3. Win customers confidence
4. Capture rural & semi urban bank customers
5. Software in regional language
6. Spread facility of mobile banks
7. Efficient and expert IT staff in banks
8. Maximum marketing with e-channels
9. Increase in expenditure on R & D
10. Banking with smiling face
11. Spread Customer Relations Management
12. Spread social relationship marketing
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Future Area of Intensive Research
The following are the future area of intensive research should be made by
the Indian banking sector in the years to come.
1. Quality of services in partially IT and fully IT oriented banks
2. E-banks & utility services
3. Occupation wise, age wise use of e-channels
4. e-channels & per transaction cost
5. Extent of acceptance of e-channels
E-Banking Practices of the Study Unit
The e-banking practices of the study units practiced by the study units in
the study area are given below.
Profile of the State Bank of India
The origin of the State Bank of India goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2
June 1806. Three years later the bank received its charter and was re-designed as
the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-
stock bank of British India sponsored by the Government of Bengal. The Bank of
Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank
of Bengal. These three banks remained at the apex of modern banking in India till
their amalgamation as the Imperial Bank of India on 27 January 1921, later it
became State Bank of India.
Transformation Journey in State Bank of India
The State Bank of India, the country’s oldest Bank and a premier in terms
of balance sheet size, number of branches, market capitalization and profits is
today going through a momentous phase of Change and Transformation – the two
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hundred year old Public sector behemoth is today stirring out of its Public Sector
legacy and moving with an agility to give the Private and Foreign Banks a run for
their money.
The bank is entering into many new businesses with strategic tie ups –
Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile
Banking, Point of Sale Merchant Acquisition, Advisory Services, structured
products etc – each one of these initiatives having a huge potential for growth.
The Bank is forging ahead with cutting edge technology and innovative
new banking models, to expand its Rural Banking base, looking at the vast
untapped potential in the hinterland and proposes to cover 100,000 villages in the
next two years.
It is also focusing at the top end of the market, on whole sale banking
capabilities to provide India’s growing mid/large Corporate with a complete array
of products and services. It is consolidating its global treasury operations and
entering into structured products and derivative instruments. Today, the Bank is the
largest provider of infrastructure debt and the largest arranger of external
commercial borrowings in the country. It is the only Indian bank to feature in the
Fortune 500 list.
The Bank is changing outdated front and back end processes to modern
customer friendly processes to help improve the total customer experience. With
about 8500 of its own 10000 branches and another 5100 branches of its Associate
Banks already networked, today it offers the largest banking network to the Indian
customer. The Bank is also in the process of providing complete payment solution
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to its clientele with its over 21000 ATMs, and other electronic channels such as
Internet banking, debit cards, mobile banking, etc.
E-Banking Services
The SBI offers various e-banking services to its customers. Some of the
major e-banking services offered by the SBI are;
Bank offers Real Time Gross Settlement System (RTGS) & National
Electronic Fund Transfer system (NEFT) which enables an efficient, secure,
economical and reliable system of transfer of funds from bank to bank as well as
from remitter’s account in a particular bank to the beneficiary’s account in another
bank across the country.
RTGS
An electronic payment system in which payment instructions between
banks are processed and settled individually and continuously, on a real time basis,
throughout the day. Available for transaction value of Rs.2.00 lacs and above.
NEFT
Another electronic payment system in which payment instructions between
banks are processed and settled on deferred net settlement (DNS) basis at fixed
times during the day. There is no minimum or maximum stipulated transaction
value for using this facility. RTGS and NEFT systems work on all days except on
Sundays and common National Holidays across the states. These facilities are
available at all our Core Banking branches
State Bank Networked ATM Services
State Bank offers the customers the convenience of over 26,000 ATMs in
India, the largest network in the country and continuing to expand fast. This means
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that customer can transact free of cost at the ATMs of State Bank Group (This
includes the ATMs of State Bank of India as well as the Associate Banks - namely,
State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore,
State Bank of Patiala, and State Bank of Travancore) and wholly owned
subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank
ATM-cum-Debit (Cash Plus) card.
Kinds of Cards Accepted at State Bank ATMs
Besides all cards of State Bank of India, State Bank ATM-Cum-Debit Card
and State Bank International ATM-Cum-Debit Cards following cards are also
accepted at State Bank ATMs: -
1. State Bank Credit Card
2. Cards issued by other banks displaying Maestro, Master Card, Cirrus,
VISA and VISA Electron logos
3. All Debit/ Credit Cards issued by any bank outside India displaying
Maestro, Master Card, Cirrus, VISA and VISA Electron logos
State Bank ATM-cum-Debit (State Bank Cash plus) Card:
India's largest bank is proud to offer customer unparalleled convenience
viz. State Bank ATM-cum-Debit (Cash Plus) card. With this card, there is no need
to carry cash in your wallet. Customer can now withdraw cash and make purchases
anytime you wish to with your ATM-cum-Debit Card.
Features
1. Withdraw cash from over 26,000 ATMs of SBI group free and about 40000
ATMs of other banks under multi-lateral sharing viz. Andhra Bank, Axis
Bank, Bank of India, The Bank of Rajasthan Ltd. Canara Bank,
Corporation Bank, Dena Bank, HDFC Bank, ICICI Bank, Indian Bank,
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IndusInd Bank, Punjab National Bank, UCO Bank and Union Bank of India
apart from ATMs displaying Master Card/ Maestro/Cirrus logo for free up
to first 5 transactions (Financial and Non-Financial) in a calendar month
(for SB account holders).
2. Make payments for purchases by using the debit card at more than 4 lakh
shops, restaurants, shopping malls, hotels, petrol pumps and many other
outlets which display Maestro logo.
3. Recharge pre-paid mobile phones of Vodafone, IDEA, Reliance and BPL
without any charges at any State Bank ATM.
4. Recharge pre-paid mobile phones of AIRTEL of 11 Circles viz. Mumbai,
Delhi, Gujarat, M.P., U.P. (East), U.P. (West), Karnataka, Kerala, Andhra
Pradesh, Tamilnadu, and Chennai, through ATM/ SMS anywhere in India.
Fees
There is no joining fee for State Bank ATM-cum-Debit (Cash Plus) card.
Annual maintenance fee of Rs. 50/- p.a. will be recovered from the second year of
issue.
State Bank Cash Plus International Card
This is an International ATM-cum-Debit Card with which customer can
enjoy shopping at over 4 lakh establishments in India and over 10.5 Million
establishments worldwide displaying Maestro logo, wherein the amount customers
spend on their card is automatically debited to customer account. Withdraw cash
from over 26,000 ATMs of SBI group free of other banks from ATMs displaying
Master Card/ Maestro / Cirrus logo in India and more than 8,20,000 ATMs across
the globe for a nominal fee. In India, it would function as the State Bank ATM-
cum-Debit (Cash Plus) card.
Transaction Costs: - Free
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Fees
The State Bank Cash Plus International Card is available for one time
joining fee of Rs 200/-. Annual maintenance fee of Rs. 100/- p.a. will be recovered
from the second year of issue.
State Bank International ATM-Cum-Debit Card
Eligibility
All Saving Bank and Current Account holders having accounts with
networked branches and are:
• 18 years of age & above
• Account type: Sole or Joint with "Either or Survivor" / "Anyone or
Survivor"
• NRE account holders are also eligible but NRO account holders are not.
Benefits
• Convenience to the customers traveling overseas
• Can be used as Domestic ATM-cum-Debit Card
• Available at a nominal joining fee of Rs. 200/-
• Daily limit of US $ 1000 or equivalent at the ATM and US $ 1000 or
equivalent at Point of Sale (POS) terminal for debit transaction
• Purchase Protection*up to Rs. 5000/- and Personal Accident cover up to
Rs. 2,00,000/-
• Charges for usage abroad: Rs. 150+ Service Tax per cash withdrawal Rs.
15 + Service Tax per enquiry.
State Bank Classic Debit & Shopping Card
Enjoy the convenience of cashless shopping with State Bank Classic Debit
& Shopping Card and earn Freedom Rewards points on customer purchases. With
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State Bank Classic Debit & Shopping Card customers get access to their account
whenever and wherever they want. Customer can use it to purchase goods
merchant establishments and withdraw cash in India.
State Bank Gold International Debit Card
Enjoy the convenience of cashless shopping with State Bank Gold
International Debit Card and earn higher Freedom Rewards points on purchases.
With your State Bank Gold international Debit Card customers get access to their
account whenever and wherever they want. Customer can use it to purchase goods
merchant establishments and withdraw cash in India as well as across the globe.
Sbi Yuva Card
SBI Yuva Card is an International Debit Card on VISA platform,
exclusively designed for vibrant youth of India between 18-30 years of Age. The
card can be used at ATMs for cash withdrawal at all ATMs under bilateral
arrangement. It can be used for dining, shopping and traveling at POS/MEs. This
Card is available in all SBI branches free of cost. Customer can not only draw cash
at ATM but also swipe it for. This card is PIN based on ATM and signature based
at POS/MEs. This card can ‘be used for e-commerce i.e. for shopping through
internet by using VbV (Verified by VISA) certified internet websites. Funds can
also be transferred using VISA Monet Transfer facility. Using our ATMs, card
holder can also transfer funds to other VISA Debit/ Credit Cards issued by SBI or
any other Bank.
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Table 3.1
BRANCHES AND ATMs OF STATE BANK OF INDIA
Branches ATMs Per cent of offsite
to total
ATMS
Per cent of ATMs
to Branches
Rural Semi-Urban
Urban Metro-
politan Total
On-site
Off-site
Total
4,972 3,865 2,382 2,065 13,284 10,826 9,258 20,084 46.1 151.2
Source: Report on Trend and Progress of Banking in India
Table 3.1 depicts the branches and ATMs of State Bank of India. Among
the Nationalised Banks in India, State Bank of India having largest number of
branches. From the above table, we can understand State Bank of India
concentrates rural areas than Semi-urban and urban areas. ATMs percent may be
doubled in the forthcoming years.
Pre-Paid Card
State Bank Gift Card
Presenting Gifts to Employees and also to near and dear ones during festive
season or on special occasions is an integral and unique culture in India.
Traditionally, gifts have been given in the form of cash or kind. With the
advancement of Banking, Gift Cheques were introduced, allowing the beneficiary
to use the money according to their wishes. These cheques, however, are accepted
at the issuing bank branches only. The SBI Gift Card, issued in association with
VISA International, is one such product which gives the comfort of convenience
and wide acceptability.
SBI Gift Card is a Pre-paid Plastic Card supported by Magnetic-stripe
based technology. It is usable at all VISA enabled Merchant Establishments at PoS
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by signature. It is a perfect substitute for Gift Vouchers sold by many retail houses
as its use is not restricted to any particular Merchant Establishment/ Point of Sale.
State Bank Ez Pay Card
The SBI eZ-Pay card, a prepaid plastic card issued in Indian Rupees in
association with VISA international, is an ideal product for making periodical
payments. Payment of salaries to employees, who are required to work at different
locations, is generally a difficult proposition for Employers. Cards can be loaded
from a single point and the funds are available to the employees immediately. It is
suitable for disbursement of wages to blue collar workers, bonus to employees/
reimbursement of expenses to staff, periodical payment of incentives to agents/
commission to distributors
One need not be an SBI account holder for purchasing SBI eZ-Pay Card.
Any person, in individual capacity also, can obtain eZ-Pay card. The SBI eZ-Pay
card is usable at all State Bank ATMs through PIN and at Merchant
establishments/ Point of Sale through PIN/ Signature. The cardholder need not visit
any Branch to withdraw his money. Balance enquiry can be made free of charge
either through State Bank ATMs or through Internet.
State Bank Vishwa Yatra Foreign Travel Card
State Bank Vishwa Yatra Foreign Travel Card is a prepaid Foreign
Currency card that makes customers foreign trip trouble-free and convenient. It is a
Chip based Card which stores encrypted and confidential information. It offers
customers a convenient and secure way to carry cash anywhere in the world (valid
worldwide except in India, Nepal and Bhutan). State Bank Vishwa Yatra Foreign
Travel Card is available in seven Foreign Currencies viz. US Dollars (USD),
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Pound Sterling (GBP), Euro (EUR), Canadian Dollar (CAD), Australian Dollar
(AUD), Japanese Yen (YEN), Saudi Riyal (SAR) and Singapore Dollar (SGD).
Internet Banking
The Internet banking portal of SBI, enables its retail banking customers to
operate their accounts from anywhere anytime, removing the restrictions imposed
by geography and time. It's a platform that enables the customers to carry out their
banking activities from their desktop, aided by the power and convenience of the
Internet.
Using Internet banking services, customer can do the following normal
banking transactions online:
• Funds transfer between own accounts.
• Third party transfers to accounts maintained at any branch of SBI
• Group Transfers to accounts in State Bank Group
• Inter Bank Transfers to accounts with other Banks
• Online standing instructions for periodical transfer for the above
• Credit PPF accounts across branches
• Request for Issue of Demand Draft
• Request for opening of new accounts
• Request for closure of Loan Accounts
• Request for Issue of Cheque Book
Apart from these, the other salient value-added features available are:
• Utility bill payments
• Online Ticket Booking for travel by Road, Rail and Air
• SBILIFE, LIC and other insurance premium payments
• SBI and other Mutual funds Investments
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• SBI and other Credit Card dues payments
• Tax Payment – Income, Service, State Government
• Customs Duty Payment
• Online Share Trading (eZ-trade@SBI)
• Online Application for IPO
• Fee Payment to select educational institutions including IITs and NITs
Truly smart services to cover most of customer banking transactions. All
this and much more, from the customer desktop. All SBI branches are enabled for
Internet Banking.
E-Rail
Booking the customers Railways Ticket Online
The facility has been launched with effect from 1st September 2003 in
association with IRCTC. The scheme facilitates Booking of Railways Ticket
Online. The salient features of the scheme are as under:
1. All Internet banking customers can use the facility.
2. Customers are required to register on www.irctc.co.in. Customer can select their
train depending on their journey and book their ticket online.
3. On giving payment option as SBI, the user will be redirected to
onlinesbi.com. After logging on to the site you will be displayed payment
amount, TID No. and Railway reference no.
4. On selecting the payment amount customer account will be debited.
Customer will return to www.irctc.co.in . The ticket with PNR No. will be
displayed. Customer can print the ticket.
5. The ticket can be delivered or collected by the customer.
6. The user can collect the ticket personally at New Delhi reservation counter.
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7. The Payment amount will include ticket fare including reservation charges,
courier charges and Bank Service fee of Rs 10/.
8. For cancellation, the ticket to be presented over reservation counter.
9. No cash will be paid at the time of cancellation. Only cancellation ticket
will be issued. Customer account will be credited after 4 days.
10. SBI shall not be responsible for any delays or disputes regarding tickets.
RBI- EFT
Inter-bank Electronic Funds Transfer facility of the Reserve Bank of India
(RBI - EFT) is available with SBI branches in the clearing zone of Service
Branches at Kolkata, Mumbai, New Delhi and Chennai.
E-Pay
Bill Payment (e-Pay) will let customer to pay their Telephone, Mobile,
Electricity, Insurance and Credit Card bills electronically over SBI Online SBI
website. Check & Pay customer bills online, 24 hours a day, over e-Pay. Customer
even gets a Cyber Receipt for customer payments done online or scheduled over
online SBI.
If customer biller presents bills online, customer can also give SBI Auto
Pay instructions and bank will pay the bills as and when it falls due. The service is
available for select local billers at Ahmedabad, Bangalore, Bhopal, Bhuvaneshwar,
Chandigarh, Chennai,Delhi, Guwahati,Hyderabad, Kolkata, Lucknow, Mumbai,
atna,Thiruvanathapuram. The national billers like LIC, SBI Cards, SBI Life
Insurance etc. can be paid at any center across the country.
Broking Services
SBI announced that SBI Capital Markets Ltd. has expanded its retail
broking network to help investors carry out their broking transactions with
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confidence. At present the investors can buy/sell shares at both NSE and BSE
through their Retail Broking Centres in the cash market.
Magnetic Ink Character Recognition (MICR)
In MICR technology the information is printed on the instrument with a
special type of ink which is made up of magnetic material. On insertion of the
instrument in the machine, the printed information is read by the machine. MICR
system is beneficial as it minimizes chances of error, clearing of cheques becomes
easy and transfer of funds becomes faster in order to facilitate operations.
Mobile Banking
Away from home, balance enquiries can be made and/or money sent to the
loved ones or bills can be paid anytime 24x7. Mobile banking offers convenient,
simple, secure, anytime and anywhere banking.
The following functionalities are available:
1. Funds transfer (within and outside the bank)
2. Interbank Mobile Payment Services (IMPS)
3. Enquiry services (Balance enquiry/ Mini statement)
4. Cheque book request
5. Demat Enquiry Service
6. Bill Payment (Utility bills, credit cards, Insurance premium), Donations,
Subscriptions
7. Mobile Top up-M Commerce (Top up of Tatasky, BigTV, SunDirect,
DishTV, DigitalTV and Videocon d2h connections, SBI life insurance
premium)
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Book Airline/ Railway/ Bus/ Movie Tickets and Shop from Mobile
Now customers can book airline/ rail/ bus/ movie tickets and also shop
online from their mobile phone using State Bank Freedom through NGPAY
application. NGPAY application works on all java enabled phone having GPRS
connectivity. NGPAY offers a wide range of services with its merchant partners.
The facilities available are entertainment, travel, online shopping, etc.
Demat Services
SBI offers Demat services that would ensure free transferability of
securities with speed, accuracy and security. SBI is Depository Participant both
with - National Securities Depositories Limited (NSDL) and Central Depository
Services Limited (CDSL) through more than 1000 branches -
Features & Benefits
As opposed to the earlier form of dealing in physical certificates with
delays in transaction, holding and trading in Demat form has the following
benefits:
1. Account Maintenance & Safe custody: Facilitates Maintaining
Security Balance in electronic form.
2. Dematerialization: Facilitates converting physical share certificate into
electronic balances.
3. Rematerialization: Facilitates converting the electronic balances to physical
(share certificate) form.
4. Account Transfers: Facilitates delivery/receipt of electronic balances
consequent to market / off-market trades.
5. Pledge/Hypothecation: Facilitates blocking securities balance of borrowers
in favour of lenders for obtaining Loans / advances against shares.
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6. Initial Public offer: Facilitates faster and direct credit of security balances
into DP account on allotment through public issue of companies.
7. Disbursement of corporate benefits: Facilitates faster and direct credit of
security balance into DP account on account of non-monetary corporate
benefits as bonus and rights issues.
8. Security Lending: Facilitates earning extra income on your dematerialized
holdings by the way of securities lending.
9. In fact what makes scripless holding in SBI DP account most attractive is
the total ease of operation.
10. Once customers open their account, they can easily convert their physical
holdings to paperless form by surrendering their share certificate together
with a Demat request form. Thereafter, on selling / purchasing securities,
customer only need to give an appropriate instruction to effect settlement.
E-Banking Services of ICICI Bank
Profile of the Bank
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in
ICICI Bank was reduced to 46% through a public offering of shares in India in
fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal
2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock
amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative
of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution
for providing medium-term and long-term project financing to Indian businesses.
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In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group
offering a wide variety of products and services, both directly and through a
number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the
first Indian company and the first bank or financial institution from non-Japan Asia
to be listed on the NYSE.
After consideration of various corporate structuring alternatives in the
context of the emerging competitive scenario in the Indian banking industry, and
the move towards universal banking, the managements of ICICI and ICICI Bank
formed the view that the merger of ICICI with ICICI Bank would be the optimal
strategic alternative for both entities, and would create the optimal legal structure
for the ICICI group's universal banking strategy. The merger would enhance value
for ICICI shareholders through the merged entity's access to low-cost deposits,
greater opportunities for earning fee-based income and the ability to participate in
the payments system and provide transaction-banking services. The merger would
enhance value for ICICI Bank shareholders through a large capital base and scale
of operations, seamless access to ICICI's strong corporate relationships built up
over five decades, entry into new business segments, higher market share in
various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries.
ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34
billion (US$ 91 billion) at March 31, 2011 and profit after tax
Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011.
The Bank has a network of 2,546 branches and 7,440 ATMs in India,
and has a presence in 19 countries, including India.
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ICICI Bank offers a wide range of banking products and financial services
to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries in the areas of investment banking, life and
non-life insurance, venture capital and asset management.
E-Banking Services
The major e-banking services offered by the ICICI Bank limited are;
Internet Banking
The Internet banking services is available to the following type of ICICI
Bank account holders; Savings Account holders, Credit Card holders, Demat
Account holders, Loan Account holders, Joint account holders can also apply for
the ICICI bank internet banking services by submitting the filled-up Internet
Banking Form at any ICICI Bank Branch.
Online Banking Services
The customer no need of walking up to the bank branch, every time
customer needs to do their banking. As customer can do a lot of it online from
paying customers bills to transferring funds, booking your rail/air tickets,
shopping, sending a money order and doing lots more.
Funds Transfer (e -cheques)
With ICICIBank.com, transferring funds from your ICICI Bank Account is
very simple. There are various options provided online for transferring funds.
customer can choose to: transfer Funds to their own linked ICICI Bank accounts,
transfer of funds to other ICICI bank accounts anywhere in India and transfer funds
to specified non-ICICI bank accounts. With Funds Transfer on ICICIBank.com,
customer can; forget about writing out & sending cheques/ DD's or pay orders to
the payee, free themself from the worry of payment instruments getting
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lost/misplaced in transit, transact from the comfort of customers home or office
through ICICI Bank Internet Banking, transfer money to any ICICI Bank account,
anywhere in India, and transfer money to specified non-ICICI Bank accounts in
over 100 cities across India.
With Funds Transfer on iMobile, ICICI Bank iMobile application users can
now make financial transactions of up to Rs.50,000 per day for funds transfer, bill
pay and mShop. This is accordance to the new Mobile Banking guidelines issued
by Reserve Bank of India.
Transfer funds to customer own linked ICICI Bank accounts
Transfer funds instantly between any of your ICICI Bank accounts that are linked
to customer Internet Banking User ID. Transfer funds to specified Non-ICICI Bank
accounts customer can transfer funds to other bank accounts across India to any
bank which is enabled with IFSC codes. The maximum amount for NEFT
transactions is Rs 500,000.
Bill pay
To pay customer bills through the Bill Pay facility, customer need to do is
to complete a simple one time registration for each biller. No more entering billing
details every time customer pays their bills. ICICI Bank offer to customer this
facility in two modes depending on the biller:
Quick Pay
ICICI Bank Quick Pay is the easiest and smartest way to manage and pay
customer utility bills online anytime, anywhere. Customer can make all their bill
payments from the convenience of theri home/office with Quick Pay.
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Receive Funds
Customers often transfer money from non-ICICI Bank accounts to your
accounts with ICICI Bank through Cheques, Demand Drafts, Money Orders or Pay
Orders. The bank offer a unique solution, Receive Funds, which allows customer
to transfer funds into their ICICI Bank account whenever they want. Customer
could also choose to set standing instructions for recurring transfer. Register a
payer once and place a request for receiving funds. It is a simple, one-time process.
Online Prepaid Mobile Recharge
Customer can recharge prepaid mobile from the comfort of their home or
office, anytime, anywhere with Prepaid Mobile Recharge Facility on
ICICIBank.com. Now customer no longer needs to rush to the vendor for buying
recharge codes, every time your talk time runs out. Just top-up customer prepaid
mobile cards by logging in to Internet Banking on ICICIBank.com. What's more,
this service is absolutely free for all ICICI Bank Account holders.
Book ticket online
With ICICI Bank customer need not visit booking reservation centers any
more. Customer can now buy their train tickets online and pay using ICICI Internet
Banking Facility. For this ICICI Bank has tied up with IRCTC. All internet
banking customers can use this facility. No cash is paid at the time of cancellation.
Customer bank account will be credited with the ticket amount less cancellation
charges as levied by IRCTC. ICICI Bank does not levy any cancellation charges.
Pay Any Visa Credit Card
Pay Any Visa Credit Card is a revolutionary service that allows customer to
transfer money from their bank account to any other Visa Credit Card, anytime,
anywhere in India. Customer can forget cumbersome and time-consuming DDs,
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cheques and pay orders. Transact from the comfort of home or office through
ICICI Bank Internet Banking.
Mobile Banking
iMobile is ICICI Bank's mobile banking application. Easy, convenient and
secure to use, iMobile lets customer transfer funds, pay bills, book travel or movie
tickets, recharge prepaid mobile and DTH, locate an ATM, and a do lot more.
Pay Direct Tax and Indirect Tax Online:
Customer can pay their Direct / Indirect Tax through online banking
services. Customers log in to download Direct/Indirect Tax payment
acknowledgment for last three months of payments made through ICICIBank.com
from eTax challan link in Bank Accounts section.
Smart Money Order
ICICI Bank's Smart Money Order allows customer to send money anytime,
anywhere in India. Simply log on to ICICIBank.com and enter the address of the
receiver and the amount to be sent. The funds will be delivered to beneficiary's
doorstep. ICICI Bank's Smart Money Order facility has been launched in
partnership with India Post (The Department of Posts, Ministry of Communication
and Information Technology, Government of India).
Donate Online
ICICI Bank now provides customer the facility to make a difference to
India's underprivileged - online, anytime, from anywhere. Choose from over 140
NGOs that have met high standards of credibility. When customer use Give India’s
online donation platform and complete their donation, customer will immediately
receive a receipt from Give India, which can be used for tax purposes.
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Debit and Credit Card
Through ICICI debit and credit cards customer can shop, dine, travel, pay
bills directly anywhere in India with their ICICI Bank Debit and credit Card and
free themselves from the worries of standing in long queues for ATMs.
Master Card World debit card
ICICI introduced the 'ICICI Bank MasterCard World debit card', which
comes packed with comforts and conveniences. ICICI Bank World chip debit card
will entitle customer to a number of 'special discounts and conveniences and
rewards' like never before. ICICI Bank MasterCard World debit card benefits:
High withdrawal limit and transaction limit. Enjoy a high cash withdrawal limit of
Rs.1 Lac per day and transaction limit of Rs. 2 Lac per day.
Titanium Debit Card
ICICI Bank Titanium Debit Card packed with a host of benefits and special
privileges. Having this card in their wallet is like carrying bank account with
customer wherever they go. Enjoy unrestricted shopping, savings with special
discounts, higher reward points earnings and the complete security of not having to
carry large amounts of cash around with customers.
Business Debit Card
ICICI Bank Business Debit Card, packed with a host of benefits and special
privileges. With this card customer enjoy unrestricted shopping, savings with
special discounts, higher ‘Reward Points’ earnings and the complete security of not
having to carry large amounts of cash with customer.
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Woman's Debit Card
A Debit Card specially designed for the woman of today. Packed with
conveniences every woman will cherish. Avail attractive discounts for shopping,
dining and more. Customer can enjoy high withdrawal limit & transaction limit,
cash withdrawal limit of Rs.25,000 per day and POS transaction limit (w.e.f.
October 1, 2011) of Rs.35,000 per day.
HPCL Debit Card
ICICI Bank and HPCL bring to customer the HPCL Debit Card - a debit
card designed with customer convenience in mind. Customer can simply hand it
over at any HPCL pump and save fuel purchases. In fact customer can use the card
for all shopping, dining and travelling needs; so, customer spend with total control.
In addition the ICICI bank issued various credit cards with varing feature for the
benefits of its customers, they are ICICI Bank VISA Signature Credit Card, ICICI
Bank Ascent American Express Credit Card, ICICI Bank Platinum Identity Credit
Card, CICI Bank British Airways Premium Credit Card Account, ICICI Bank
British Airways Classic Credit Card Account, ICICI Bank Singapore Airlines
VISA Platinum Credit Card, ICICI Bank Instant Platinum Credit Card, ICICI Bank
Instant Gold Credit Card, ICICI Bank HPCL Platinum Credit Card, ICICI Bank
HPCL Titanium Credit Card, ICICI Bank Kingfisher Airlines MasterCard
Titanium Credit Card, ICICI Bank Kingfisher Airlines MasterCard Platinum Credit
Card and ICICI Bank Kingfisher Airlines MasterCard World Credit Card.
Demat
ICICI Bank Demat Services boasts of an ever-growing customer base of
over 16.83 lacs customer base as on 10.02.11 account holders. In ICICI continuous
endeavor to offer best of the class services to its customers the bank offer the
following features:
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E-Instructions: customer can transfer securities 24 hours a day, 7 days a
week through Internet & Interactive Voice Response (IVR) at a lower cost. Now
with "Speak to transfer", customer can also transfer or pledge instructions through
the bank customer care officer. Corporate Benefit Tracking: Track customer
dividend, interest, bonus through customer account statement. Mobile Request:
Access customers demat account by sending SMS to enquire about Holdings,
Transactions, Bill & ISIN details. Mobile Alerts: Receive SMS alerts for all
debits/credits as well as for any request which cannot be processed. Dedicated
customer care executives specially trained at bank call centre, to handle all
customer queries. Countrywide network of over 970 branches, customers are
never far from an ICICI Bank Demat Services outlet
Table 3.2
BRANCHES AND ATMs OF ICICI BANK
Branches ATMs Per cent of
offsite to total ATMS
Per cent of ATMs
to Branches
Rural Semi-Urban
Urban Metro-
politan Total
On-site
Off-site
Total
260 803 693 767 2,523 2,727 3,377 6,104 55.3 241.9
Source: Report on Trend and Progress of Banking in India
From the table 3.2, we can be inferred the association of ATMs and
Branches of ICICI Bank. It has large number of branches in semi-urban areas
compare to rural, urban and metropolitan areas.
CONCLUSION
E-banking has become a necessary survival weapon and is fundamentally
changing the banking industry worldwide. Today, the click of the mouse offers
customers banking services at a much lower cost and also empowers them with
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unprecedented freedom in choosing vendors for their financial service needs. No
country today has a choice-whether to implement E-banking or not given the
global and competitive nature of the economy. Banks have to upgrade and
constantly think of new innovative customized packages and services to remain
competitive. The invasion of banking by technology has created an information
age and commoditization of banking services.
Banks have come to realize that survival in the new e-economy depends on
delivering some or all of their banking services on the Internet while continuing to
support their traditional infrastructure. The rise of E-banking is redefining business
relationships and the most successful banks will be those that can truly strengthen
their relationship with their customers. Without any doubt, the international scope
of E banking provides new growth perspectives and Internet business is a catalyst
for new technologies and new business processes. With rapid advances in
telecommunication systems and digital technology, E-banking has become a
strategic weapon for banks to remain profitable.
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CHAPTER – IV
AWARENESS AND CUSTOMER SATISFACTION ON E-BANKING
SERVICES – AN ANALYSIS
In a constantly changing world of today, where past is replaced by dynamic
present and the old ways of doing things is no longer valid. Change is permanent
and a real. Those who are not able to keep pace with the changes are destined to
loose the race. Science and technology is changing the way financial institutions
perform their transactions. Science and technology have brought life of the people
so easier, comfortable and luxurious. These new technology brings with it not only
the potential for success, but also a never-ending series of questions regarding its
design, its value to its users, ultimate use and acceptability.
E-banking is the waves of the future. It provides enormous benefits to
consumers in terms of ease and cost of transactions, either through internet,
telephone or other electronic delivery channels. For many consumers, electronic
banking means 24-hours access to cash through an e-banking service media such
as Automated Teller Machine (ATM), internet banking, mobile banking and debit
and credit card. But electronic banking now involves many different types of
transactions. E-banking is a form of banking where funds are transferred through
an exchange of electronic signals between financial institution, rather than
exchange of cash, cheques or other negotiable instruments.
With the expansion of global Information and Communication Technology
(ICT) infrastructure and the internet, e-banking is set to play a pivotal role in the
Indian economy, skilled manpower proper software, infrastructure, cyber law are
important for the implementation of e-banking in India.
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Providing a good service quality is a major issue for banking industry.
Customer satisfaction determines the success or failure of a business. In order to be
competitive in the marketplace, banks need to satisfy their customer. Best service
quality provided would ensure a high market share and substantial return. It is
important for banks to provide e-banking service to uncover which attributes,
consumers utilized in their assessment of e-banking service quality. Therefore, the
banks need to understand the attributes that the customer use to judge service
quality.
In this context analyzing customer satisfaction on e-banking services and
drawing appropriate strategies is not only to attract new customers, but also to
retain existing ones. This chapter focuses on the overall customer satisfaction on
e-banking services by considering the variables such as Accessibility,
Convenience, Privacy, Security, Design, Content, Speed and Fees and Charges,
further the researcher has selected three e-banking service medium viz., ATM,
Internet Banking and Mobile banking to analyze the overall customers’ satisfaction
on e-banking practices.
Profile of the Respondents
The demographic backgrounds of the sample respondents in five
parameters are presented in the following tables to understand the customer
profiles i.e., gender, age, education, occupation and income.
Sex Wise Distribution of Respondents
The sex wise distribution of the sample respondents in the selected both
public and private sector bank is presented in table 4.1.
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TABLE 4.1
SEX WISE DISTRIBUTION OF RESPONDENTS
S.No Age
(Years)
No. of respondents
Public Sector Bank
% Private Sector Bank
% Total %
01 Male 128 62.14 142 80.68 270 70.68
02 Female 78 37.86 34 19.32 112 29.32
Total 206 100.00 176 100.00 382 100.00 Source: Primary data
Table 4.1 shows sex wise distribution of the respondents in the study units.
It is observed from the table that the work force in the selected public and private
sector bank consists of 71 per cent male and 29 per cent female employees. Table
4.1 also reveals that female employees constitutes significant portion in the work
force of the public sector banks when compared to private sector bank.
Age Wise Distribution of Respondents
The age wise distribution of the sample respondents is given in table 4.2.
TABLE 4.2
AGE WISE DISTRIBUTION OF RESPONDENTS
S.No Age
(Years)
No. of respondents
Public Sector Bank
% Private Sector Bank
% Total %
01 Below 25 34 16.50 21 11.93 55 14.40
02 25 – 35 41 19.90 108 61.36 149 39.01
03 35 – 45 52 25.24 28 15.91 80 20.94
04 Above 45 79 38.35 19 10.80 98 25.65
Total 206 100.00 176 100.00 382 100.00 Source: Primary data
118
Table 4.2 shows that out of 382 respondents as much as 39 per cent of the
respondents are in the age group 40 – 50 years, followed by one-fourth of the
respondents are above 60 years. About 21 per cent of the respondents are in the age
group of 50 – 60 years and 14 per cent of the respondents are less than 40 years. It
is inferred from the table that private sector bank has large number of young
customer as compared to public sector bank whereas public sector bank has large
number senior customer who are in the age group of above 50 years as compared
to private sector bank.
Educational Qualifications of the Respondents
The educational qualifications of the sample respondents in the selected
public and private sector bank are shown in table 4.3.
TABLE 4.3
EDUCATIONAL QUALIFICATIONS OF THE RESPONDENTS
S.No Educational
Qualifications
No. of respondents
Public Sector Bank
% Private Sector Bank
% Total %
01 Up to HSC 31 15.05 14 07.95 45 11.78
02 Graduate 97 47.08 83 47.16 180 47.12
03 Post Graduate 64 31.07 38 21.59 102 26.70
04 Professional 14 06.80 41 23.30 55 14.40
Total 206 100.00 176 100.00 382 100.00 Source: Primary data
Table 4.3 indicates the educational qualifications of the respondents.
About 47 per cent of the respondents are under graduate, nearly 27 per cent of the
respondents are post graduate, 14 per cent of the respondents have professional
qualifications and about 12 per cent of the respondents were studied up to higher
secondary school. It is noteworthy to mention that the professionals prefer private
sector banks than that of public sector banks in the study area.
119
Occupation of the Respondents
The occupation wise distribution of the sample respondents in the study
units is given in table 4.4.
TABLE 4.4
OCCUPATION OF THE RESPONDENTS
S.No Occupation
No. of respondents
Public Sector Bank
% Private Sector Bank
% Total %
01 Salaried 94 45.63 55 31.25 149 39.01
02 Professional 09 04.37 35 19.89 44 11.52
03 Business 52 25.24 72 40.91 124 32.46
04 Retired 32 15.53 08 04.55 40 10.47
05 Housewife 19 09.22 06 03.41 25 06.54
Total 206 100.00 176 100.00 382 100.00
Source: Primary data
It is observed from the table 4.4 that out of 382 sample respondents, as
much as 39 per cent of the respondents are salaried class followed by 32 per cent
of the respondents are business people. About 12 per cent of the respondents are
professionals and 10 per cent are retired person. It can be inferred from the table
salaried class, retired person and housewife prefer public sector bank whereas
professionals and business people prefer private sector bank for their banking
transactions.
120
Income of the Respondents
The annual income of the respondents in the selected public and private
sector bank is shown in table 4.5.
TABLE 4.5
INCOME OF THE RESPONDENTS
S.No Income ( )
No. of respondents
Public Sector Bank
% Private Sector Bank
% Total %
01 Less than
( )1 lakh 56 27.18 14 07.95 70 18.32
02 ( ).1 – 2 lakhs 72 34.95 25 14.20 97 25.39
03 ( ) 2 –3 lakhs 36 17.48 34 19.32 70 18.32
04 ( ) 3-4 lakhs 23 11.17 45 25.57 68 17.80
05 Above () 4 lakhs
19 09.22 58 32.95 77 20.16
Total 20 6 100.00 176 100.00 382 100.00
Source: Primary data
Table 4.5 shows the annual income wise distribution of the respondents.
Out of 382 respondents, one-fourth of the respondents annual income is 1-2
lakhs, as much as 20 per cent of the respondents annual income is above 4 lakhs.
The respondents who earns annual income of less than 1 lakh, 2-3 lakhs and
and 3 - 4 lakhs constitute 18 per cent each out of the total.. It is inferred from
the table the lower income group i.e., annual income is less than two lakhs prefer
public sector banks whereas middle and higher income group, i.e., annual income
2-3 lakhs and above three lakhs prefer private sector banks.
121
Utilization of E-Banking Services
The respondents’ usage of selected e-banking services in the selected
public and private sector banks is given in table 4.6.
TABLE 4.6
UTILIZATION OF E-BANKING SERVICES
Usage
Public Sector Bank Private Sector Bank
ATM Internet banking
Mobile banking
ATM Internet banking
Mobile banking
Used 206
(100.00)
89
(43.20)
156
(75.73)
176
(100.00
106
(60.23)
145
(82.39)
Not used - 117
(56.80)
50
(24.27) -
70
(39.77)
31
(17.61)
Total 206
(100.00)
206
(100.00)
206
(100.00)
176
(100.00)
176
(100.00)
176
(100.00)
Source: Primary data Note: Figure in the bracket is percentage to total
Table 4.6 exhibits usage of selected e-banking services in the public and
private sector banks in the study area. All the respondents in the public and private
sector banks have used ATM services. Out 206 respondents in the public sector
bank, about 43 per cent of the respondents have used internet banking and 57 per
cent have not used the internet banking. Nearly three-fourth of the respondents
have used mobile banking and one-fourth of the respondents have not used mobile
banking services. In case of private sector bank 60 per cent and 82 per cent of the
respondents have used internet banking and mobile banking services. It is
understood from the table more number of customers are availed e-banking
services in private sector bank as compared to public sector bank. The number of
respondents who use e-bankiing services is also shown in figure 4.1.
122
FIGURE 4.1
UTILIZATION OF E-BANKING SERVICES
206
89
156176
106
145
117
5070
31
206 206 206176 176 176
0
50
100
150
200
250
ATM Internet
Banking
Mobile
Banking
ATM Internet
Banking
Mobile
Banking
Public Sector Bank Private Sector Bank
Used Not used Total
123
Period of Use
The present scenario usage of ATMs, Internet Banking and Mobile
Banking is measured in terms of the length of the period the respondents are using
a particular service. For this purpose, time is divided into five sub-heads i.e. less
than 6 months, 6 months to 1 year, 1 to 2 years, 2 to 3 years and more than 3 years.
The period of using e-banking services provided by the banks is described in table
4.7.
TABLE 4.7
DURATION OF USING E-BANKING SERVICES
Period Public Sector Bank Private Sector Bank
ATM Internet banking
Mobile banking
ATM Internet banking
Mobile banking
Less than 6 month
22 (10.68)
09 (10.11)
48 (30.77)
10 (05.68)
13 (12.26)
18 (12.41
6 months to 1 year
29 (14.08)
11 (12.36)
52 (33.33)
23 (13.07)
16 (15.09)
22 (15.17)
1 year to 2 years
38 (18.45)
18 (20.22)
16 (10.26)
34 (19.32)
21 (19.81)
29 (20.00)
2 years to 3 years
53 (25.73)
24 (26.97)
23 (14.74)
42 (23.86)
20 (18.87)
32 (22.07)
More than 3 years
64 (31.07)
27 (30.34)
17 (10.90)
67 (38.07)
36 (33.96)
44 (30.34)
Total 206
(100.00) 89
(100.00) 156
(100.00) 176
(100.00) 106
(100.00) 145
(100.00) Source: Primary data Note: Figure in the bracket is percentage to total
Table 4.7 envisages that ATM is the oldest service in use. Out of total
respondents, maximum 31 per cent and 38 per cent respondents in public and
private sector banks are using ATM for more than 3 years. Internet banking is at
second position with 30 per cent 34 per cent users in public and private sector
banks for using internet banking for more than 3 years. Mobile banking is at third
position with 30 per cent respondents are using this service for more than three
years in private sector banks. In case of public sector bank, maximum 33 per cent
124
of the respondents are using the mobile banking for six months to one year. It can
be inferred from the table that the customers in private sector bank is very much
interested for using e-banking services as compared to public sector bank.
Customers Satisfaction
The customers’ satisfaction with e-banking services is measured in terms of
Accessibility, Convenience, Privacy, Security, Design, Content, Speed, Fees and
Service Charges.
Accessibility
Accessibility defines as the ability of users to access information and
services of e-banking are dependent on many factors. These include the content
format; the user's hardware, software and settings; internet connections; the
environmental conditions and the user's abilities and disabilities. The term
accessibility generally relates to the implementation of e-banking medium content
in such a way as to maximize the ability of users to access the information. The
customers’ satisfaction with accessibility of e-banking medium is analyzed and
presented in table 4.8.
TABLE 4.8
CUSTOMER SATISFACTION TOWARDS ACCESSIBILITY OF E-BANKING SERVICES
E-banking medium
Public Sector Bank
Private Sector Bank
Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 21.41 30.59 39.40 56.29 29.70 42.43 Internet banking
30.57 43.67 42.47 60.67 37.04 52.91
Mobile banking
24.83 35.47 36.07 51.53 30.25 43.21
Average 24.40 34.86 39.03 55.76 31.52 45.02 Source: Primary data
125
Table 4.8 shows that the average mean score obtained by all the sample
respondents for customer satisfaction in e-banking services with regard to
accessibility was 45 per cent. It was nearly 53 per cent in respect of internet
banking, 43 per cent in respect of mobile banking and 42 per cent in respect of
ATM services.
The average mean score of 35 per cent and 56 per cent was secured by the
public and private sector bank respondents for selected e-banking services. The
private sector bank respondents have secured maximum score for internet banking
services followed by ATM services, mobile bank was in the third place. There is
no significant variation in the mean score obtained by the respondents of the public
sector bank. Among the selected e-banking services, the respondents in the public
sector bank have secured lowest score for ATM Services with regard to customer
satisfaction in e-banking services. It can be inferred from the table that the private
sector bank customers have easy accessibility to use e-banking services as
compared to private sector bank.
Convenience
E-banking provides higher degree of convenience that enables customers to
access e-banking services at all times and places. Apart from that, the ease of
access of e-banking services is perceived as a measure of relative advantage.
Certain factors are considered as paramount importance in ensuring the success of
e-banking, i.e. the ability of an innovation to meet users' needs using different
feature availability on e-banking services such as the provision of interactive loan
calculators, exchange rate converters, and mortgage calculators on the screen draw
the attention of users of e-banking services. The customers satisfaction with
e-banking in relation to convenience is analyzed in table 4.9.
126
TABLE 4.9
CUSTOMER SATISFACTION TOWARDS CONVENIENCE OF E-BANKING SERVICES
E-banking medium
Public Sector Bank
Private Sector Bank
Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 09.55 27.30 16.55 47.29 12.77 36.50
Internet banking
14.90 42.57 21.18 60.51 18.31 52.32
Mobile banking
10.94 31.25 18.79 53.67 14.72 42.05
Average 11.09 31.68 18.46 52.73 14.67 41.92 Source: Primary data
Table 4.9 present that mean score secured for satisfaction level with regard
to convenience, which is highest in case of internet banking and lowest for ATMs
services. The mean score obtained for mobile banking service was 42.05 per cent.
The average mean score secured for selected e-banking services was 41.92 per
cent. The public and private sector bank respondents have obtained highest mean
score for internet banking services as compared to ATMs and other mobile
banking services. The average mean score obtained by the respondents for
selected e-banking services in public and private sector bank was 31.68 per cent
and 52.73 per cent. The respondents of public sector bank have obtained low mean
score as compared respondents of private sector banks. Therefore it can be
inferred from the table private sector banks customers have more convenience to
use e-banking services when compared to public sector banks.
Privacy
Customers may have doubts about the trustworthiness of the e-bank's
privacy policies. Trust has striking influence on user's willingness to use
e-banking services in exchanges of money and personal sensitive information.
127
Privacy is an important dimension that may affect users' intention to adopt
e-based transaction systems. Encryption technology is the most common feature at
all bank sites to secure information privacy, supplemented by a combination of
different unique identifiers, for instance, a password, mother's maiden name, a
memorable date, or a few minutes of inactivity automatically logs users off the
account. The customers’ satisfaction with regard to privacy is analyzed and
presented in table 4.10.
TABLE 4.10
CUSTOMER SATISFACTION TOWARDS PRIVACY OF E-BANKING SERVICES
E-banking medium
Public Sector Bank
Private Sector Bank
Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 16.37 40.93 24.24 60.60 20.00 50.00
Internet banking
25.30 63.25 29.31 73.28 27.48 68.71
Mobile banking
25.31 63.27 26.10 65.25 25.69 64.22
Average 21.22 53.07 26.13 65.32 23.61 59.03 Source: Primary data
Table 4.10 shows the mean score secured by the respondents for privacy.
The respondents have obtained the mean score of 59.03 percent for experiencing
privacy while using e-banking services. The maximum score of 68.71 per cent
obtained for internet banking followed by mobile banking services. The mean
score secured by the respondents for ATMs services was 50 per cent. The average
mean score of 53.07 per cent and 65.32 per cent was obtained by respondents of
public and private sector bank. The low mean score of 40.93 per cent obtained by
the public respondents for ATMs services.
128
More than 50 per cent mean score was secured by the respondents of public
sector bank for Internet banking services and mobile banking services. In case of
private sector, all the respondents have got more than 60 per cent mean score for
experiencing privacy. Therefore, it is understood from the table that all the
respondents are experienced privacy while using e-banking services except ATMs
services provided by public sector banks.
Security
Assurance about security relates to the extent to which the e-bank service
provider guarantees the safety of customers` financial and personal information.
Security can be assured by providing a privacy statement and information about
the security of the shopping mechanisms and by displaying the logos of trusted
third parties. For example, displaying trusted third party logo guarantees a certain
level of security protection and has been shown to significantly influence how
consumers regard the trustworthiness of e-vendors. The customers satisfaction in
relation to privacy is analyzed in table 4.11.
TABLE 4.11
CUSTOMER SATISFACTION TOWARDS SECURITY OF E-BANKING SERVICES
E-banking medium
Public Sector Bank
Private Sector Bank
Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 09.08 30.28 11.48 38.27 10.19 33.96
Internet banking
16.28 54.27 17.50 58.34 16.87 56.23
Mobile banking
13.16 43.87 18.47 61.57 16.05 53.49
Average 12.38 41.26 15.26 50.87 13.78 45.93 Source: Primary data
129
Table 4.11 indicates the mean score obtained by the respondents for
security while using e-banking services. The average mean score of 45.93 per cent
was secured by the both public and private sector bank respondents. The highest
score of 56.23 per cent and 53.49 per cent secured for internet banking and mobile
banking services, the lowest mean score of 33.96 per cent was obtained for ATMs
services. The respondent of both public and private sector bank was secured
lowest mean score of 30.28 per cent and 38.27 percent respectively for ATMs
services. Hence, it is inferred from the table the public and private sector bank
customers are feel security while using e-banking services except ATMs services.
Design
The goal of aesthetic design is to make a service medium site visually
attractive and enjoyable. The content preparation in a broad sense has four
aspects: knowledge elicitation, information organization and structure, information
retrieval, and information presentation. During design, and prior to
implementation, it is strongly recommended that users of different ages, and with a
range of capabilities and limitations be engaged to trial the new service and
provide feedback. The customer satisfaction of e-banking services with regard to
design is analyzed in table 4.12.
130
TABLE 4.12
CUSTOMER SATISFACTION TOWARDS DESIGN OF E-BANKING SERVICES
E-banking medium
Public Sector Bank Private Sector Bank Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 08.60 28.67 15.74 52.46 11.89 39.63
Internet banking
07.97 26.55 11.17 37.23 09.71 32.36
Mobile banking
10.11 33.70 08.81 29.37 09.49 31.62
Average 09.00 30.00 12.25 40.84 10.58 35.27 Source: Primary data
As per table 4.12, the average mean score obtained by the respondents was
35.27 per cent for design of the e-banking medium. It is noteworthy to mention
that all the respondents irrespective of bank has secured mean score less than 40
per cent for ATM, Internet banking and mobile banking services. The highest
score of 52.46 per cent was obtained by the ATM users in private sector bank.
Therefore, it can be inferred by the table that the design of the e-banking medium
is not user-friendly. The banks should redesign e-banking medium in consultation
with its customers.
Content
The content of e-banking service medium is one of the factors influencing
e- banking acceptance. On the other hand, quality designs, graphics or colors and
the propensity to portray good image of the bank would enhance efficient use of
navigation. The features such as speed, content and design, navigation,
interactivity and security all influence user satisfaction. Therefore, the customers
satisfaction with e-banking services with regard to content is analyzed in table
4.13.
131
TABLE 4.13
CUSTOMER SATISFACTION TOWARDS CONTENT OF E-BANKING SERVICES
E-banking medium
Public Sector Bank Private Sector Bank Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 14.14 40.40 16.22 46.34 15.09 43.13
Internet banking
08.71 24.88 11.41 32.60 10.17 29.06
Mobile banking
08.39 23.97 11.05 31.57 09.67 27.63
Average 11.08 31.65 13.27 37.91 12.14 34.69 Source: Primary data
Table 4.13 presents the mean score secured by the respondents for
e-banking services with regard to its content. The average mean score of 34.69 per
cent was obtained the total respondents. The lowest mean score of 29.06 per cent
was secured for mobile banking followed by internet banking services. The ATM
service users have got the mean score of 43 per cent. Table also reveals that the
respondents of both public and private sector bank have obtained the mean score of
less than 50 per cent. The public sector bank respondents have secured low mean
score as compared to respondents of private sector bank for ATMs, Internet
banking and Mobile banking services. Therefore, based on the opinion of the
respondents, it is inferred that there is poor content of e-banking services medium
is not up to the expectation of the consumer. The banks should redesign content of
the e-banking services to make the e-banking services more user-friendly.
Speed
In general, there is a significant correlation between speed of e-banking
service medium and user satisfaction. Speed of download depends on the nature of
the site downloaded content, the computing hardware and method of connection
used to download information.
132
Customers’ satisfaction with e-banking services in relation to speed of
e-bank service medium is analyzed in table 4.14.
TABLE 4.14
CUSTOMER SATISFACTION TOWARDS SPEED OF E-BANKING SERVICES
E-banking medium
Public Sector Bank Private Sector Bank Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 07.55 21.57 12.20 34.86 09.69 27.70
Internet banking
08.71 24.86 10.59 30.27 09.73 27.81
Mobile banking
10.02 28.63 11.72 33.48 10.84 30.97
Average 08.63 24.66 11.64 33.26 10.09 28.84
Source: Primary data
Table 4.14 depicts the mean score secured by the respondents for
experiencing speed while using e-banking services. Irrespective of the bank, all
the respondents have got the mean score of below 30 per cent and there is no much
variation in the mean score obtained by the respondents for ATMs, internet
banking and mobile banking services. Therefore, it is understood from table that
the respondents experiences low speed to complete their e-banking transactions.
Fees and Charges
Service quality attributes in e-banking industry are important since human-
internet interaction is the main service delivery and communication channel is
needed for offering high quality services and to satisfy consumers' needs, at lower
costs, are potential competitive advantage of e-banking. Cost savings have helped
e-based banks offer lower or no service fees, and offer higher interest rates on
interest-bearing accounts than traditional banks. Fee charged by the banks is one
133
of the variables taken for checking customer satisfaction level. If customer feels
that the fee charged by the bank is reasonable then he is satisfied and vice-versa.
Hence, the customer satisfaction with fees and charges for e-banking
services is given in table 4.15.
TABLE 4.15
CUSTOMER SATISFACTION TOWARDS FEES AND CHARGES OF E-BANKING SERVICES
E-banking medium
Public Sector Bank Private Sector Bank Combined
Mean score
Mean score (%)
Mean score
Mean score (%)
Mean score
Mean score (%)
ATM 21.72 48.27 06.88 15.28 14.88 33.07
Internet banking
22.62 50.27 05.71 12.69 13.43 29.84
Mobile banking
27.44 60.98 10.19 22.64 19.13 42.51
Average 23.88 53.06 07.71 17.13 16.01 35.59
Source: Primary data
Table 4.15 depicts the mean score obtained by the respondents for fees and
service charges charged by the e-banking service providers. The respondents has
secured the average mean score of 35.59 percent for fees charged by the banks for
using ATM, Internet banking and Mobile banking services. The internet banking
service users has secured low mean score of 29.84 per cent followed by ATMs
users; they secured the mean score of 33.07 per cent. The mobile banking service
users have secured 42.51 per cent. The public sector bank respondents have
secured the mean score of less than 50 per cent whereas private sector bank
respondents have obtained the mean score of less than 20 per cent. It is understood
from the table, the respondents are of the opinion that the e-banking service
providers have charged heavy charges for e-banking services. It is also inferred
134
from the table customers of private sector banks has to pay high cost for
transacting e-banking services as compared public sector banks.
Overall Mean Score
After considering all the elements of customer satisfaction they are
combined together to find out the overall customer satisfaction level of e-banking
services. The overall customer satisfaction level is the combination of eight
parameters i.e. Accessibility, Convenience, Privacy, Security, Design, Content,
Speed, Fees and Service charges. The overall customer satisfaction with e-banking
services is analyzed in table 4.16.
TABLE 4.16
OVERALL MEAN SCORE TOWARDS E-BANKING SERVICES
E-banking services
Public Sector Bank
Private Sector Bank Combined
Mean score
Mean score (%)
Mean score Mean score (%)
Mean score
Mean score (%)
ATM 108.43 33.88 142.70 44.59 124.22 38.82
Internet banking
131.97 41.24 150.31 46.97 141.92 44.35
Mobile banking
133.32 41.66 140.22 43.81 136.64 42.70
Average 121.82 38.07 143.75 44.92 132.41 41.38
Source: Primary data
Table 4.16 shows the overall mean score obtained by the respondents in
respect of ATMs, internet banking and mobile banking services. The average
mean score obtained by the respondents was 41.38. The maximum mean score of
44.35 per cent was secured for internet banking followed by mobile banking 42.70
per cent. The minimum mean score of 38.82 was secured by the respondents for
ATMs services. The overall mean score obtained respondents both in public and
private sector bank was less than 50 per cent. There is a small variation in the
135
overall mean score obtained by the respondents of public and private sector bank.
Therefore, it can be inferred from the table e-banking service users have low
satisfaction with e-banking services and the customer satisfaction with e-banking
services in private sector banks is better than that of public sector banks. The
overall mean secured by the respondents is also depicted in figure 4.2.
FIGURE 4.2
OVERALL MEAN SCORE TOWARDS E- BANKING SERVICES
33.88
44.5941.24
46.97
41.6643.81
38.07
44.92
0
10
20
30
40
50
ATM Internet
Banking
Mobile
Banking
Average
Public Sector Bank Mean score (%)
Private Sector Bank Mean score (%)
136
Customer Satisfaction Level
Level of satisfaction after using a particular service has been examined
using eight parameters i.e. accessibility, convenience, Privacy, Security, Design,
Content, Speed and Fees and Charges.
The level of customer satisfaction of the respondents regarding ATMs,
Internet banking and Mobile banking is assumed to be normally distributed. The
level of customer satisfaction of the respondents is divided into three categories,
i.e. below average, average and above average levels, which have been defined as
Low, Medium and High level of satisfaction respectively. The lower and upper
limits of average level have been calculated with the help of the following formula:
Lower limit of average level = Mean - 1 Standard deviation
Upper limit of average level = Mean + 1 Standard deviation
Source: Dr. A.B.Bhatnagar; Measurement & Evaluation, P. 116-120
The customer satisfaction level for various customer satisfaction factors in
respect of ATMs, Internet banking and Mobile banking services in the public and
private sector banks is shown in the following tables.
137
TABLE 4.17
CUSTOMER SATISFACTION TOWARDS OF ATM SERVICES
Customer satisfaction
Factor
No. of Respondents
Public Sector Bank Private Sector Bank Combined
Low Medium High Total Low
Medium High Total Low Medium High Total
Accessibility 72
(34.95) 86
(41.75) 48
(23.20) 206
(100.00) 65
(39.93) 72
(40.91) 39
(22.16) 176
(100.00) 137
(35.86) 158
(41.36) 87
(22.77) 382
(100.00)
Convenience 63
(30.58) 91
(44.17) 52
(25.24) 206
(100.00) 53
(30.11) 92
(52.27) 31
(17.61) 176
(100.00) 116
(30.37) 183
(47.91) 83
(21.73) 382
(100.00)
Privacy 94
(45.63) 75
(36.41) 37
(17.96) 206
(100.00) 27
17.31 96
(54.55) 53
(30.11) 176
(100.00) 121
(31.68) 171
(44.76) 90
(23.56) 382
(100.00)
Security 69
(33.50) 95
(46.12) 42
(20.39) 206
(100.00) 62
(35.23) 81
(46.02) 33
(18.75) 176
(100.00) 131
(34.29) 176
(46.07) 75
(19.63) 382
(100.00)
Design 102
(49.51) 71
(34.47) 33
(16.01) 206
(100.00) 34
(19.32) 95
(53.98) 47
(26.70) 176
(100.00) 136
(35.60) 166
(43.46) 80
(20.94) 382
(100.00)
Content 62
(30.09) 106
(51.46) 38
(18.45) 206
(100.00) 59
(33.52) 83
(47.16) 34
(19.32) 176
(100.00) 121
(31.68) 189
(49.47) 72
(18.85) 382
(100.00)
Speed 110
(53.40) 67
(32.52) 29
(14.08) 206
(100.00) 73
(41.48) 58
(32.95) 45
(25.57) 176
(100.00) 183
(47.91) 125
(32.72) 74
(19.37) 382
(100.00) Fees and Charges
61 (29.61)
93 (45.14)
52 (25.24)
206 (100.00)
127 (72.16)
37 (21.02)
12 (06.82)
176 (100.00)
188 (49.21)
130 (34.03)
64 (16.75)
382 (100.00)
Source: Primary data Note: Figure in the bracket is percentage to total
138
In public sector banks, 23 per cent of the respondents have high level of
satisfaction, about 41 per cent have medium level satisfaction and 35 per cent of
the respondents have experienced low level of satisfaction. In private sector
bank, nearly 40 per cent each have low and medium level of satisfaction and 22
per cent of the respondents have enjoyed high level satisfaction. Therefore, it can
be inferred that the customers are moderately satisfied with ATMs services
provided by the public and private sector banks with regard to accessibility.
Regarding customer satisfaction level of ATMs services in respect of
convenience, 31 per cent, 44 per cent and 25 per cent of the respondents have
low, medium and high level satisfaction in public sector bank. In case of private
sector bank, majority of the respondents have medium level satisfaction, 30
percent have experienced low level and less than one-fourth of the respondents
have high level of satisfaction. Therefore, it is understood from the table that the
customer have medium level of satisfaction with ATMs services in relation to
convenience.
In case of privacy, 46 per cent of the respondents have low satisfaction
and majority of the respondents have medium level satisfaction in public and
private sector bank in respect of privacy while using ATMs services, which
indicates that the private sector bank provide more privacy than that of public
sector bank for ATMs services users.
About 46 per cent of the respondents each in public and private sector
bank have experienced medium level of satisfaction with regard to security for
ATMs service. Therefore, it is understood that the both the private and public
sector banks have provide medium level of security to ATMs services users.
139
As far as design in ATM machines is concerned, about 50 per cent and 19
per cent have low level of satisfaction. Therefore, it is inferred from the table,
private sector bank have good user friendly design whereas in private sector bank
have poor design in ATMs machines.
Regarding content of the ATM machines, nearly 50 per cent of the
respondents both in public and private sector bank have medium level of
satisfaction, which indicates that the content is not a major obstacle for ATMs
users.
Majority of the respondents and 41 per cent of the respondents in public
and private sector bank have low satisfaction in respect of speed while using
ATMs service. Therefore, it can be inferred from the table, there is a substantial
scope to increase speed in ATM machines to facilitate speedy transaction.
About 30 per cent and 72 per cent of the respondents in public and private
sector bank have low satisfaction with fees and charges for ATMs services. It is
noteworthy to mention that the ATMs services provided by the banks have
reduced the employees cost considerably, in spites of that the banks particularly
private sector banks have charged heavily for ATMs services. The combined
Customer satisfaction level of ATMs is also exhibited in figure 4.3.
140
FIGURE 4.3
CUSTOMER SATISFACTION LEVEL OF ATMs
020406080
100120140160180200
Acc
essi
bilit
y
Con
veni
ence
Pri
vacy
Sec
urity
Des
ign
Cont
ent
Spee
d
Fees
and
Cha
rges
Customer Satisfaction Factor
No. o
f Res
pond
ents
Low Medium High
141
TABLE 4.18
CUSTOMER SATISFACTION TOWARDS OF INTERNET BANKING SERVICES
Customer satisfaction
Factor
No. of Respondents
Public Sector Bank Private Sector Bank Combined
Low Medium High Total Low
Medium High Total Low Medium High Total
Accessibility 34
(38.20) 43
(48.31) 12
(13.48) 89
(100.00) 18
(16.98) 39
(36.79) 49
(46.23) 106
(100.00) 52
(26.67) 82
(42.05) 61
(31.28) 195
(100.00)
Convenience 31
(34.83) 42
(47.19) 16
(17.98) 89
(100.00) 13
(12.26) 38
(35.85) 55
(51.89) 106
(100.00) 44
(22.56) 80
(41.02) 71
(36.41) 195
(100.00)
Privacy 14
(15.73) 33
(37.08) 42
(47.19) 89
(100.00) 08
(07.55) 29
(27.36) 69
(65.09) 106
(100.00) 22
(11.28) 62
(31.79) 111
(56.92) 195
(100.00)
Security 12
(13.48) 35
(39.33) 42
(47.19) 89
(100.00) 16
(15.09) 31
(29.24) 59
(55.67) 106
(100.00) 28
(14.35) 66
(33.85) 101
(51.79) 195
(100.00)
Design 48
(53.93) 26
(29.21) 15
(16.85) 89
(100.00) 57
(53.77) 31
(29.25) 18
(16.98) 106
(100.00) 105
(53.85) 57
(29.23) 33
(16.92) 195
(100.00)
Content 61
(68.54) 15
(16.85) 13
(14.61) 89
(100.00) 63
(59.43) 29
(27.36) 14
(13.21) 106
(100.00) 124
(63.59) 44
(22.56) 27
(13.84) 195
(100.00)
Speed 59
(66.29) 19
(21.35) 11
(12.35) 89
(100.00) 56
(52.83) 40
(37.74) 10
(09.43) 106
(100.00) 115
(58.97) 59
(30.26) 21
(10.77) 195
(100.00) Fees and Charges
22 (24.72)
47 (52.81)
20 (22.47)
89 (100.00)
88 (83.02)
14 (13.21)
04 (03.77)
106 (100.00)
110 (56.41)
61 (31.28)
24 (12.31)
195 (100.00)
Source: Primary data Note: Figure in the bracket is percentage to total
142
Table 4.18 shows the customer satisfaction with internet banking services
of public and private sector banks in the study area. Among the users of internet
banking services 48 per cent and 37 per cent of the respondents in the public and
private sector bank have experienced medium level satisfaction. About 38 per cent
in the public and 17 per cent in private sector bank have low level of satisfaction.
Nearly 13 per cent and 46 per cent in the same bank have enjoyed high level
satisfaction with internet banking services in respect of accessibility. Therefore, it
can be inferred from the table that private sector bank customers have high level
satisfaction as compared to public sector with regard to accessibility for using
internet banking services.
With regard to convenience, 35 per cent of the respondents in the public
sector bank and 13 per cent of the respondents in the private sector bank have
revealed low satisfaction. About 47 per cent and 36 per cent of the respondents
have expressed medium level of satisfaction. Further the table also exhibits that 52
per cent of the respondents in the private sector bank have experienced high level
of satisfaction as against 18 per cent in the public sector bank. Therefore, it can be
inferred from the table that the private sector bank customers have enjoyed high
level of satisfaction as compared to public sector bank in respect of convenience in
using internet banking services.
In public and private sector bank as much as 47 per cent and 65 per cent
have experienced high level of satisfaction with regard to privacy. It is understood
from the table that all the bank customers have enjoyed high level of privacy while
using internet banking services.
143
The table reveals that the nearly majority of the respondents highly satisfied
with security while using internet banking services. Therefore, it is inferred that
both the public and private sector banks provide high security for internet banking
transactions.
With regard to design, content and speed of e-banking medium of internet
banking, majority of the respondents in the public and private sector bank have
expressed low level of satisfaction. Therefore, it is inferred from the table the
design, content and speed of internet banking is not user-friendly, there is vast
amount of scope for improvement in the design, content and speed of the internet
banking.
Nearly one-fourth of the respondents in the public sector bank and 83 per
cent of the respondents in the private sector bank have reveled low level of
satisfaction with fees and charges charged by the banks. Therefore, in can be
concluded that the large number of customers in the private sector banks
dissatisfied with fees charged for internet banking services as compared to public
sector banks. The combined customer satisfaction factor is also exhibited in
figure 4.4.
144
FIGURE 4.4
COMBINED CUSTOMER SATISFACTION LEVEL OF INTERNET
BANKING SERVICES
020406080
100120140
Acce
ssib
ility
Conv
enie
nce
Priv
acy
Secu
rity
Desig
nCo
nten
tSp
eed
Fees
and
Char
ges
Customer Satisfaction Factor
No.
of R
espo
nden
ts
Low Medium High
020406080
100120140
Acce
ssib
ility
Conv
enie
nce
Priv
acy
Secu
rity
Desig
nCo
nten
tSp
eed
Fees
and
Char
ges
Customer Satisfaction Factor
No.
of R
espo
nden
ts
Low Medium High
145
TABLE 4.19
CUSTOMER SATISFACTION TOWARDS OF MOBILE BANKING SERVICES
Customer satisfaction
Factor
No. of Respondents
Public Sector Bank Private Sector Bank Combined
Low Medium High Total Low
Medium High Total Low Medium High Total
Accessibility 79
(50.64) 54
(34.62) 23
(14.74) 156
(100.00) 33
(22.76) 64
(44.14) 48
(33.10) 145
(100.00) 112
(37.21) 118
(39.20) 71
(23.59) 301
(100.00)
Convenience 84
(53.85) 51
(32.69) 21
(13.46) 156
(100.00) 26
(17.93) 68
(46.90) 51
(35.17) 145
(100.00) 110
(36.54) 119
(39.53) 72
(23.92) 301
(100.00)
Privacy 41
(26.28) 52
(33.33) 63
(40.38) 156
(100.00) 35
(24.14) 49
(33.79) 61
(42.07) 145
(100.00) 76
(25.25) 101
(33.55) 124
(41.20) 301
(100.00)
Security 55
(35.26) 62
(39.74) 39
(25.00) 156
(100.00) 42
(28.97) 58
(40.00) 45
(31.03) 145
(100.00) 97
(32.23) 120
(39.87) 84
(27.91) 301
(100.00)
Design 72
(46.15) 53
(33.97) 31
(19.88) 156
(100.00) 65
(44.83) 46
(31.72) 34
(23.45) 145
(100.00) 137
(45.51) 99
(32.89) 65
(21.59) 301
(100.00)
Content 94
(60.26) 40
(25.64) 22
(14.10) 156
(100.00) 68
(46.90) 53
(36.55) 24
(16.55) 145
(100.00) 162
(53.82) 93
(30.90) 46
(15.28) 301
(100.00)
Speed 86
(55.13) 44
(28.21) 26
(16.67) 156
(100.00) 71
(48.96) 49
(33.79) 25
(17.24) 145
(100.00) 157
(52.16) 93
(30.90) 51
(16.94) 301
(100.00) Fees and Charges
38 (24.36)
53 (33.97)
65 (41.67)
156 (100.00)
84 (57.93)
32 (22.07)
29 (20.00)
145 (100.00)
122 (40.53)
85 (28.24)
94 (31.23)
301 (100.00)
Source: Primary data Note: Figure in the bracket is percentage to total
146
Table 4.19 depicts customers’ satisfaction level with mobile banking
services. Majority of the respondents in the public sector bank and less than one-
fourth of the respondents in the private sector bank have expressed low level of
satisfaction with mobile banking services. Therefore, it can be inferred that the
customers of private sector banks easily access mobile banking services than that
of their counterpart, public sector banks.
While consider the convenience to use mobile banking services, majority of
the respondents in the public sector bank and a minimum of 17 per cent of the
respondents in the private sector bank have low level of satisfaction. Therefore, it
is understood from the table that the private sector banks customers have much
convenience for using mobile banking services as compared private sector banks.
Table reveals that most of the respondents in the public and private sector
bank have satisfied with privacy aspect while using mobile banking services.
Therefore, it is inferred from the table that the Indian banking sector provides high
degree of privacy for mobile banking users.
In security aspect of mobile banking, 40 per cent of the respondents each
have expressed medium level of satisfaction and 25 per cent and 31 per cent have
revealed high level of satisfaction. Therefore, it can be inferred that the security is
not a major factor which affect the customer satisfaction of mobile banking users.
In respect of design, content and speed, considerable portion of the
respondents have expressed low satisfaction with mobile banking services, which
indicates that there is an urgent need to adopt new design, content and high speed
by the banking sector to improve customers satisfaction.
147
Among the users of mobile banking users, majority of the respondents in
the private sector bank and one-fourth of the respondents in the public sector bank
have exposed low satisfaction level for fees and charges charged to use mobile
banking services. Therefore, it is understood from the table that the customers are
dissatisfied with the fees structure of private sector banks when compared to public
sector bank for using mobile banking services.
In nutshell, customers are moderately satisfied with ATMs services
provided by the public and private sector banks. The private sector bank customers
have high level satisfaction as compared to public sector with regard to
accessibility for using internet banking services and customers of private sector
banks easily access mobile banking services than that of their counterpart, public
sector banks.
The customer have medium level of satisfaction with ATMs services and
the private sector bank customers have enjoyed high level of satisfaction as
compared to public sector bank in respect of convenience in using internet banking
services and mobile banking services.
The customers are moderately satisfied with ATMs services provided by
the public and private sector banks and all the customers have enjoyed high level
of privacy while using internet banking services and mobile banking services. Both
the private and public sector banks have provide medium level of security to
ATMs services users. The security is not a major factor which affects the customer
satisfaction of internet banking and mobile banking users.
148
The private sector bank have good user friendly design whereas in private
sector bank have poor design in ATMs machines. The content is not a major
obstacle for ATMs users. There is a substantial scope to increase speed in ATM
machines to facilitate speedy transaction. The design, content and speed of
internet banking and mobile banking is not user-friendly, which indicates that there
is an urgent need to adopt new design, content and high speed by the banking
sector to improve customers satisfaction.
The large number of customers in the private sector banks dissatisfied with
fees charged for ATMs, internet banking and mobile banking services as compared
to public sector banks. The combined customer satisfaction level with mobile
banking services is also presented in figure 4.5
149
FIGURE 4.5
COMBINED CUSTOMER SATISFACTION TOWARDS OF MOBILE BANKING SERVICES
020406080
100120140160180
Acc
essi
bilit
y
Con
veni
ence
Priv
acy
Secu
rity
Des
ign
Con
tent
Spee
d
Fees
and
Customer Satisfaction Factor
No.
Of R
espo
nden
ts
Low Medium High
COMBINED CUSTOMER SATISFACTION TOWARDS OF E-BANKING
SERVICES
The present status of e-banking products is analyzed in all the banks with
the help of total customer satisfaction level (CSL) and total number of respondents
using these products. There are 64 statements, each carrying a maximum score of
five and minimum score of one. For all the 64 statements, the maximum score, one
can get is 320, if one strongly agrees with all the statements. Similarly the
minimum score one can get is 64, if one strongly disagrees to all the 64 statements.
Hence, the total scores very from 64 to 320.
150
TABLE 4.20
CUSTOMER SATISFACTION TOWARDS OVERALL E-BANKING SERVICES
E-banking services
Public Sector Bank Private Sector Bank Combined
Low Medium High Total Low Medium High Total Low Medium High Total
ATM 120
(58.25) 69
(33.50) 17
(08.25) 206
(100.00) 69
(39.20) 75
(42.61) 32
(18.18) 176
(100.00) 189
(49.48) 144
(37.70) 49
(12.83) 382
(100.00)
Internet banking 38
(42.70) 29
(32.58) 22
(24.72) 89
(100.00) 48
(45.28) 32
(30.19) 26
(24.53) 106
(100.00) 86
(44.10) 61
(31.28) 48
(24.62) 195
(100.00)
Mobile banking 69
(44.23) 61
(39.10) 26
(16.67) 156
(100.00) 73
(50.34) 54
(37.24) 18
(12.41) 145
(100.00) 142
(47.17) 115
(38.21) 44
(14.62) 301
(100.00) Source: Primary data
151
Table 4.20 reveals that the combined customer satisfaction level of selected
e-banking services. Out of 206 ATMs service users in public sector bank, the low
customer satisfaction level is maximum with 58 per cent respondents, 34 per cent
of the respondent got medium customer satisfaction and small portion of eight per
cent of the respondents exposed high customer satisfaction. Similarly, out of 176
respondents in the private sector bank 43 per cent have expressed medium level of
customer satisfaction, 39 percent have exposed low satisfaction
In case of internet banking services, there are 89 internet banking users in
the public sector bank, among them, 43 per cent are have low customer
satisfaction, 33 per cent have medium and one-fourth of the respondents have high
satisfaction. Likewise, there are 106 internet banking users in the private sector
bank, out of them, 45 per cent have secured low satisfaction, 30 per cent and 25 per
cent have expressed medium and high level of satisfaction.
Among the 156 users of mobile banking services in the public sector bank,
44 per cent secured low satisfaction,39 per cent expressed medium satisfaction
level and 17 per cent have enjoyed high level of customer satisfaction. Out of 145
mobile banking users in the private sector bank, 50 per cent have expressed low
satisfaction, 37 per cent have exposed medium level and 12 per cent are enjoyed
high level of customer satisfaction.
The table also reveals that dissatisfied level is highest in case of ATMs in
the public sector banks as compared to private sector banks whereas in case of
internet banking and mobile banking dissatisfied level is highest in public sector
banks when compared to private sector bank. The combined customer satisfaction
level of e-banking services is also exhibited in figure 4.6.
152
FIGURE 4.6
CUSTOMER SATISFACTION LEVEL OF E-BANKING SERVICES
189
86
142 144
61
115
49 48 44
382
195
301
0
50
100
150
200
250
300
350
400
No.
of R
espo
nde
nts
Low Medium High Total Satisfaction Level
ATM Internet banking Mobile banking
153
F-Test
F-test is applied to find out whether there is any difference in the customer
satisfaction on e-banking services between the public sector banks and private sector
banks is significant or not. The F – values calculated were compared with the table ‘F’
values (at 5% level and at 1% level) to test the significance of variation in respect of
customer satisfaction level among the customers of public and private sector banks.
The results were tabulated and interpreted in respect of overall customer satisfaction in
table 4.21.
Null hypothesis
The customers of public and private sector banks experience the same level of
satisfactions with e-banking services.
TABLE 4.21
CUSTOMER SATISFACTION BETWEEN PRIVATE AND PUBLIC SECTOR
BANKS (ANOVA)
Category SS df MS F-Value
ATMs Services and Customer Satisfaction
Between groups
150.00 1 150.00
0.094 Within groups 6389.33 4 1597.33
Total 6539.33 5
Internet banking Services and Customer Satisfaction
Between groups
48.17 1 48.17 0.4974 Within groups 387.33 4 96.83
Total 435.50 5
Mobile banking Services and Customer Satisfaction
Between groups
20.17 1 20.1667 0.0309
Within groups 2606.67 4 651.6667
Total 2626.83 5
The analysis of variance shows that the calculated value is less than the
tabulated value at 5% and 1% level of significance. The Ho is accepted. Hence, it was
154
found that the customers of public and private sector banks experience the same level
of satisfactions with reference to e-banking services.
Inter Correlation Matrix of Customer Satisfaction On E-Banking Services
In order to analyze whether there is any positive correlation between overall
customer satisfactions on e-banking services of ATMs, internet banking and mobile
banking services and the different customer satisfaction factors, a null hypotheses is
framed and tested with the help of correlation analysis, which is shown in the following
tables.
Inter Correlation Matrix of ATMs
To analyze the relationship between customer satisfaction on ATM services and
the customer satisfaction, a null hypothesis is framed and tested with the help of inter
correlation matrix.
Null Hypothesis Ho:
The customer satisfaction factors, Accessibility, Convenience, Privacy,
Security, design, Content, Speed, fees and charges has a positive significant association
with customer satisfaction on e-banking services.
The test statistic used to test the null hypothesis is
t =r
sqrt[(1—r2)/(N—2)]
155
TABLE 4.22
INTER CORRELATION MATRIX OF CUSTOMER SATISFACTIONS – ATMS (N =382)
CS F1 F2 F3 F4 F5 F6 F7 F8
CS 1.00
F1 0.82** 1.00
F2 0.51** 0.92** 1.00
F3 0.56** 0.93** 0.99** 1.00
F4 0.71** 0.99** 0.97** 0.99** 1.00
F5 0.78** 0.99** 0.93** 0.94** 0.98** 1.00
F6 0.59** 0.95** 0.99** 0.99** 0.99** 0.96** 1.00
F7 0.97** 0.66** 0.47 ** 0.34 ** 0.52** 0.61** 0.38** 1.00
F8 0.99** 0.71** 0.36 ** 0.41** 0.58** 0.97** 0.45** 0.99** 1.00
** Significant at 5% and 1% level. * Significant at 1% level.
Where;
CS = Overall customer satisfaction. F1 = Accessibility, F2 = Convenience,
F3 = Privacy, F4 = Security, F5 = Design, F6 = Content, F7 = Speed, F8 = fees and
charges.
It is understood from the Table 4.22 that there is a significant association
between overall customer satisfaction on ATMs services and customer satisfaction
factors, Accessibility, Convenience, Privacy, Security, design, Content, Speed and fees
and charges. Hence, it can be inferred that the customer satisfaction factors has a
positive significant influences on the customer satisfaction on ATMs services.
156
Inter Correlation Matrix for Internet Banking
To analyze the relationship between customer satisfaction on internet banking
services and the customer satisfaction, a null hypothesis is framed and tested with the
help of inter correlation matrix.
TABLE 4.23
INTER CORRELATION MATRIX OF CUSTOMER SATISFACTIONS – INTERNET BANKING (N =195)
CS F1 F2 F3 F4 F5 F6 F7 F8
CS 1.00
F1 -0.50 1.00
F2 -0.83 0.87** 1.00
F3 -0.97 0.22 0.68** 1.00
F4 -0.98 0.31 0.74** 0.99** 1.00
F5 0.99** -0.46 -0.84 -0.97 -0.98 1.00
F6 0.98** -0.61 -0.92 -0.91 -0.94 0.99** 1.00
F7 0.99** -0.40 -0.79 -0.98 -0.99 0.99** 0.97** 1.00
F8 0.99** -0.37 -0.77 -0.99 -0.99 0.98** 0.96** 0.99** 1.00
** Significant at 5% and 1% level. * Significant at 1% level.
Where;
CS = Overall customer satisfaction. F1 = Accessibility, F2 = Convenience,
F3 = Privacy, F4 = Security, F5 = Design, F6 = Content, F7 = Speed, F8 = fees and
charges.
Table 4.23 reveals that the factors security, design, content, speed and fees and
charges have significant positive association with the overall customer satisfaction, it
implies that these factors have influenced the customer satisfaction on internet banking
services. However the factors, accessibility, convenience, privacy and security have
negative correlation with overall customer satisfaction.
157
Inter Correlation Matrix of Mobile Banking
To analyze the relationship between customer satisfaction on mobile banking
services and the customer satisfaction, a null hypothesis is framed and tested with the
help of inter correlation matrix.
TABLE 4.24
INTER CORRELATION MATRIX OF CUSTOMER SATISFACTIONS – MOBILE BANKING (N =301)
CS F1 F2 F3 F4 F5 F6 F7 F8
CS 1.00
F1 0.93** 1.00
F2 0.90** 0.99** 1.00
F3 -0.96 -0.79 -0.75 1.00
F4 0.58** 0.84** 0.88** -0.33 1.00
F5 0.96** 0.78** 0.74** -0.99 0.33** 1.00
F6 0.93** 0.73** 0.62** -0.98 0.25* 0.99** 1.00
F7 0.93** 0.72** 0.68** -0.99 0.24* 0.99** 0.96** 1.00
F8 0.53** 0.17 0.11 -0.74 -0.38 0.75** 0.80** 0.80** 1.00
** Significant at 5% and 1% level. * Significant at 1% level.
Where;
CS = Overall customer satisfaction. F1 = Accessibility, F2 = Convenience,
F3 = Privacy, F4 = Security, F5 = Design, F6 = Content, F7 = Speed, F8 = fees and
charges.
Table 4.24 indicates that all the customer satisfaction factors such as
accessibility, convenience, security, design, content, speed, fees and charges have
positive significant association with customer satisfactions on mobile banking services.
However the factor Privacy has negative correlation with overall customer satisfaction
on mobile banking services.
158
Demographic Variables and Customer Satisfaction
The level of customer satisfaction of e-banking services in the study units in
accordance with individual demographic variables such as gender, age, education,
occupation, and income is analyzed and presented in following tables.
Sex and Customer Satisfaction Level of ATMs
The customer satisfaction level of ATMs services and sex of the respondents is
shown in table 4.25.
TABLE 4.25
SEX AND CUSTOMER SATISFACTION LEVEL OF ATMs SERVICES
Sex No. of Respondents
Low Medium High Total
Male 148
(54.82) 95
(35.18) 27
(10) 270
(100)
Female 41
(36.61) 49
(43.75) 22
(19.64) 112
(100)
Total 189
(49.48) (144)
(37.69) 49
(12.83) 382
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.25 depicts the sex and customer satisfaction on ATMs services. Out of
270 male respondents majority of them (54.82 %) have the experience of low
satisfaction. The reason for that may insufficiency currency in ATM machines and out
of services. Nearly one-third of male respondents (35.18 %) who have medium
satisfaction and 10 per cent of the total respondents have high satisfaction. It is inferred
from the table that the male customers have low satisfaction with ATMs services as
compared to female respondents in the study area.
159
Sex and Customer Satisfaction Level of Internet Banking
The sex of the respondents and their level of satisfaction with internet banking
services is shown in table 4.26
TABLE 4.26
SEX AND CUSTOMER SATISFACTION LEVEL OF INTERNET BANKING SERVICES
Sex No. of Respondents
Low Medium High Total
Male 52
(42.62) 43
(35.25) 27
(22.13) 122
(100)
Female 34
(46.58) 18
(24.66) 21
(28.76) 73
(100)
Total 86
(44.1) 61
(31.28) 48
(24.62) 195
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.26 indicates that out of 195, 86 respondents have reveled low
satisfaction with internet banking, of which 42.62 per cent male and 46.58 per cent are
female respondents. Among the respondents who have secured medium and high level
satisfaction, majority of them are male respondents. But, female respondents have high
satisfaction as compare with male respondents. It is understood from the table that the
male customers have low satisfaction as compared to their counterpart, female
customers.
160
Sex and Customer Satisfaction Level of Mobile Banking Services
Sex of the respondents and their level of satisfaction with mobile banking
services is shown in table 4.27
TABLE 4.27
SEX AND CUSTOMER SATISFACTION LEVEL OF MOBILE BANKING SERVICES
Sex No. of Respondents
Low Medium High Total
Male 96
(44.24) 84
(38.71) 37
(17.05) 217
(100)
Female 46
(54.77) 31
(36.9) 07
(8.33) 84
(100)
Total 142
(47.18) 115
(38.21) 44
(14.61) 301
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.27 shows that there were 301 sample mobile banking users. Among
them 142, 115 and 44 respondents were revealed low, medium and high satisfaction
respectively. The respondents who have exposed low, medium and high satisfaction,
majority of them are male respondents. It is inferred from the table that majority of the
male customers in the both public and private sector banks have low satisfaction with
mobile banking services.
The analyses of the customer satisfaction indicate that the most of the male
respondents have low satisfaction with selected e-banking services of ATMs, internet
banking and mobile banking.
161
Age and Customer Satisfaction Level of ATM Services
The age wise distribution of the respondents and customer satisfaction level of
ATMs is shown in table 4.28.
TABLE 4.28
AGE AND CUSTOMER SATISFACTION LEVEL OF ATM SERVICES
Age (Years) No. of Respondents
Low Medium High Total
Bellow 25 24
(43.64) 15
(27.27) 16
(29.09) 55
(100)
25 – 35 94
(63.08) 46
(30.88) 09
(6.04) 149
(100)
35 – 45 44
(55) 22
(27.5) 14
(17.5) 80
(100)
Above 45 27
(27.55) 61
(62.24) 10
(10.21) 98
(100)
Total 189
(49.48) 144
(37.69) 49
(12.83) 382
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.28 depicts the age and customer satisfaction on ATMs. About 50 per
cent of the respondents belong to the age group of 25 - 35 years has low level
satisfaction followed by the age group of above 45 years. Out of 382 respondents, 189,
144 and 49 respondents has experienced Low, Medium and High level of satisfaction
respectively. Among the respondents who have enjoyed high level of satisfaction,
nearly 30 percent of the respondents were in the below 25 years have high level of
satisfaction. Among the respondents who have enjoyed medium level of satisfaction
majority of them (62%) is in the age group of above 45. Out of 189 respondents who
have secured low satisfaction majority of them (63%) in the age group of 25 – 35.
Therefore, it can be inferred from the table that the customers in the age group of 25 -
35 years may have dissatisfied with the ATMs services provided by the banks in the
study area.
162
Age and Customer Satisfaction Level of Internet Banking Services
The customer satisfaction level of internet banking and age of the respondents is
shown in table 4.29.
TABLE 4.29
AGE AND CUSTOMER SATISFACTION LEVEL OF INTERNET BANKING SERVICES
Age (Years) No. of Respondents
Low Medium High Total
Bellow 25 21
(55.26) 11
(28.95) 06
(15.79) 38
(100)
25 – 35 40
(46.51) 24
(27.91) 22
(25.58) 86
(100)
35 – 45 05
(20.83) 13
(54.17) 06
(25) 24
(100)
Above 45 20
(42.55) 13
(27.66) 14
(29.79) 47
(100)
Total 86
(100.00) 61
(31.28) 48
(24.62) 195
(100.00) Source: primary data, figure in the bracket percentage to the total.
Regarding the internet banking services, out of 195 internet banking users, 86,
61, and 48 respondents have expressed low, medium and high satisfaction respectively.
The majority of internet users (86) fall in age group of 25 – 35. Out of them 47 per
cent, 28 per cent and 26 per cent of respondents have low, medium and high level
satisfaction respectively. Above 45 age group of people availing internet banking
followed by 25 – 35 age group. Among them 43 per cent, 28 per cent and 30 per cent
of respondents have low, medium and high level of satisfaction respectively. In the
age group if 35 – 45, 24 respondents are using Internet Banking out of them 21 per
cent, 55 per cent and 25 per cent of respondents have the experience of low, medium
and high level satisfaction respectively. It is understood from the table the customers in
the age group of 40-50 years have disgruntled with the internet banking services in the
study area.
163
Age and Customer Satisfaction Level of Mobile Banking Services
The customer satisfaction level of mobile banking and age of the respondents is
shown in table 4.30.
TABLE 4.30
AGE AND CUSTOMER SATISFACTION LEVEL OF MOBILE BANKING SERVICES
Age (Years) No. of Respondents
Low Moderate High Total
Bellow 25 21
(50) 12
(28.57) 09
(21.43) 42
(100)
25 – 35 65
(53.72) 39
(32.23) 17
(14.05) 121
(100)
35 – 45 32
(47.76) 22
(32.84) 13
(19.4) 67
(100)
Above 45 24
(33.8) 42
(59.15) 05
(7.05) 71
(100)
Total 142
(47.18) 115
(38.21) 44
(14.61) 301
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.30 reveals among the users of mobile banking services in the study
area, 46 per cent of the respondents in the age group of 25 - 45 years expressed low
satisfaction followed by 35 – 45 age group of respondents. It is noteworthy to mention
that the maximum number respondents in the age group of 25 - 35 years have low level
of customer satisfaction as compared to other age groups with e-banking services
provided by the public and private sector banks in the study area.
164
Education and Customer Satisfaction Level of ATM
The educational qualifications and customer satisfaction level of ATM in public
and private sector banks in the study area is shown in table 4.31.
TABLE 4.31
EDUCATION AND CUSTOMER SATISFACTION LEVEL OF ATM SERVICES
Educational qualifications
No. of Respondents Low Moderate High Total
Up to HSC 17
(37.78) 16
(35.56) 12
(26.66) 45
(100)
Graduate 86
(47.78) 80
(44.44) 14
(7.78) 180
(100)
Post Graduate 58
(56.86) 35
(34.31) 09
(8.83) 102
(100)
Professional 28
(50.91) 13
(23.64) 14
(25.45) 55
(100)
Total 189
(49.48) 144
(37.7) 49
(12.82) 382
(100.00) Source: primary data, figure in the bracket percentage to the total.
The table 4.31 depicts the educational qualifications and their customer
satisfaction on e-banking services of ATM service. Nearly majority of the respondents
are having low level of satisfaction, among them graduates are majority, followed by
post graduates, which indicates that the graduate and post graduate are highly
dissatisfied with the ATMs service performance of the banks in the study area.
165
Education and Customer Satisfaction Level of Internet Banking Services
The educational qualifications and customer satisfaction level of internet
banking is shown in table 4.32.
TABLE 4.32
EDUCATION AND CUSTOMER SATISFACTION LEVEL OF INTERNET BANKING SERVICES
Educational qualifications
No. of Respondents Low Moderate High Total
Up to HSC 08
(53.34) 05
(33.33) 02
(13.33) 15
(100)
Graduate 37
(48.68) 21
(27.64) 18
(23.68) 76
(100)
Post Graduate 24
(38.71) 23
(37) 15
(24.19) 62
(100)
Professional 17
(40.48) 12
(28.57) 13
(30.95) 42
(100)
Total 86
(44.1) 61
(31.28) 48
(24.61) 195
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.32 shows 86 respondents are having low level of satisfaction out of 195
internet banking service users. The respondents who are having low level of
satisfaction, 8, 37 and 24 respondents are graduate, post graduate and professionals
respectively. It can be inferred from the table graduate customers have dissatisfied with
the internet banking performances as compared other customers.
166
Education and Customer Satisfaction Level of Mobile Banking Services
The educational qualifications and customer satisfaction level of mobile
banking is shown in table 4.33.
TABLE 4.33
EDUCATION AND CUSTOMER SATISFACTION LEVEL OF MOBILE BANKING SERVICES
Educational qualifications
No. of Respondents Low Medium High Total
Up to HSC 12
(42.86) 10
(35.71) 06
(21.43) 28
(100)
Graduate 84
(57.14) 48
(32.65) 15
(10.21) 147
(100)
Post Graduate 39
(46.43) 32
(38.1) 13
(15.47) 84
(100)
Professional 07
(16.67) 25
(59.52) 10
(23.81) 42
(100)
Total 142
(47.18) 115
(38.21) 44
(14.61) 301
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.33 clearly shows that out of 142 respondents who are having low level
of satisfaction with mobile banking, majority of the respondents are graduates followed
by post graduates respondents. So, it is understood from the analysis that the graduate
customers dissatisfied with e-banking performance of the banks as compared to other
customers in the study area.
167
Occupation and Customer Satisfaction Level of ATM Services
The occupation of the respondents and customer satisfaction level of ATM in
public and private sector banks is shown in table 4.34
TABLE 4.34
OCCUPATION AND CUSTOMER SATISFACTION LEVEL OF ATM SERVICES
OCCUPATION No. of Respondents
Low Moderate High Total
Salaried 84
(56.38) 51
(34.23) 14
(9.39) 149
(100)
Professional 18
(40.91) 14
(31.82) 12
(27.27) 44
(100)
Business 64
(51.61) 52
(41.94) 08
(6.45) 124
(100)
Retired 17
(42.5) 12
(30) 11
(27.5) 40
(100)
Housewife 06
(24) 15
(60) 04
(16) 25
(100)
Total 189
(49.48) 144
(37.7) 49
(12.82) 382
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.34 shows the respondents who are salaried employees have low level of
satisfaction followed by the respondents who are running the business. A insignificant
portion of the professionals, retired employees and housewife are having low level of
satisfaction. It is inferred from the table that more number of salaried customers and
business customers are having low satisfaction with ATMs services.
168
Occupation and Customer Satisfaction Level of Internet Banking Services
The occupation of the respondents and customer satisfaction level of internet
banking services is shown in table 4.35
TABLE 4.35
OCCUPATION AND CUSTOMER SATISFACTION LEVEL OF INTERNET BANKING SERVICES
OCCUPATION No. of Respondents
Low Moderate High Total
Salaried 27
(51.93) 14
(26.92) 11
(21.15) 52
(100)
Professional 14
(43.75) 10
(31.25) 08
(25) 32
(100)
Business 38
(40) 33
(34.74) 24
(25.26) 95
(100)
Retired 05
(45.45) 02
(18.18) 04
(36.37) 11
(100)
Housewife 02
(40) 02
(40) 01
(20) 05
(100)
Total 86
(44.1) 61
(31.28) 48
(24.62) 195
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.35 shows that out of 195 internet banking users, 86 respondents were
secured low satisfaction, among them, majority are business and salaried respondents.
Out of 61 and 48 respondents who are having medium and high level of satisfaction,
the business respondents have expressed medium and high level of satisfaction with
internet banking services. It can be concluded that the salaried and business customers
are having very low satisfaction among the customers who have expressed low
satisfaction with internet banking performance.
169
Occupation and Customer Satisfaction Level af Mobile Banking Services
The occupation of the respondents and customer satisfaction level of mobile
banking is shown in table 4.36
TABLE 4.36
OCCUPATION AND CUSTOMER SATISFACTION LEVEL OF MOBILE BANKING SERVICES
OCCUPATION No. of Respondents
Low Moderate High Total
Salaried 41
(35.66) 60
(52.17) 14
(12.17) 115
(100)
Professional 14
(37.84) 12
(32.43) 11
(29.73) 37
(100)
Business 58
(57.43) 34
(33.66) 09
(8.91) 101
(100)
Retired 22
(68.75) 04
(12.5) 06
(18.75) 32
(100)
Housewife 07
(43.75) 05
(31.25) 04
(25) 16
(100)
Total 142
(47.18) 115
(38.21) 44
(14.61) 301
(100.00) Source: primary data, figure in the bracket percentage to the total.
In customer satisfaction level with mobile banking services, out of 142 low
satisfaction customers business respondents and salaried respondents are maximum.
The analysis of the customer satisfaction with mobile banking services revealed that
salaried and business customers are having very low satisfaction.
170
Income and Customer Satisfaction Level of ATM Services
The customer satisfaction level of ATM and income of the respondents is shown
in table 4.37.
TABLE 4.37
INCOME AND CUSTOMER SATISFACTION LEVEL OF ATM SERVICES
Annual Income ( ) No. of Respondents
Low Medium High Total
Less than ( )1 lakh 42
(60) 19
(27.14) 09
(12.86) 70
(100)
( ).1 – 2 lakhs 43
(44.38) 38
(39.18) 16
(16.49) 97
(100)
( ) 2 –3 lakhs 33
(47.14) 29
(41.43) 08
(11.43) 70
(100)
( )3-4 lakhs 38
(55.88) 24
(35.29) 06
(8.83) 68
(100)
Above ( ) 4 lakhs 33
(42.86) 34
(44.16) 10
(12.98) 77
(100)
Total 189
(49.48) 144
(37.69) 49
(12.83) 382
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.37 shows that income wise distribution of the respondents and their
satisfaction level with ATMs services. Out of 189 respondents, who have experienced
as low satisfaction level majority of them belongs to 1-2 lakhs income group. In this
group 144 respondents experienced as medium level satisfaction, among them, large
number of respondents belongs to above 4 lakh. 49 respondents has high level
satisfaction with ATMs services. Out of them, 1-2 lakhs income level has large
number of respondents. It is inferred from the table that the fifty per cent of the ATM
service users have low satisfaction and remaining 50 per cent have medium and high
satisfaction and there is no major variation between income and satisfaction level of the
respondents who are having low satisfaction with ATM services.
171
Income and Customer Satisfaction Level of Internet Banking Services
The customer satisfaction level of internet banking and income of the respondents
is shown in table 4.38.
TABLE 4.38
INCOME AND CUSTOMER SATISFACTION LEVEL OF INTERNET BANKING SERVICES
Income ( ) No. of Respondents
Low Medium High Total
Less than ( )1 lakh 12
(46.15) 09
(34.61) 05
(19.24) 26
(100)
( ).1 – 2 lakhs 23
(41.82) 18
(32.73) 14
(25.45) 55
(100)
( ) 2 –3 lakhs 14
(43.75) 07
(21.87) 11
(34.38) 32
(100)
( )3-4 lakhs 11
(39.28) 09
(32.14) 08
(28.58) 28
(100)
Above ( ) 4 lakhs 26
(48.15) 18
(33.33) 10
(18.52) 54
(100)
Total 86
(44.1) 61
(31.28) 48
(24.62) 195
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.38 shows out of 195 internet banking users, 86, 61, and 48 respondents
have low, medium and high level of satisfaction respectively. Among the respondents
who have low satisfaction, 48.15 per cent of the respondents’ annual income is above
4 lakhs and 43.75 per cent of the respondents’ annual income is between 2- 3 lakhs,
46.15 per cent of the respondents’ annual income is less than 1 lakhs, 41.82 per cent
of the respondents’ annual income is between 1- 2 lakhs, 39.28 per cent of the
respondents’ annual income is between 3- 4 lakhs. Out of 61 respondents who have
medium level satisfaction, majority of them have annual income of .1 – 2 lakhs and
above 4 lakhs. The respondents who have expressed high satisfaction level, 25.45 per
cent of the respondents monthly income is 2 – 3 lakhs. It is inferred from the table
that among the dissatisfied customers, the high income group has low satisfaction in
relation to internet banking performance.
172
Income and Customer Satisfaction Level of Mobile Banking Services
The customer satisfaction level of mobile banking and income of the
respondents is shown in table 4.39.
TABLE 4.39
INCOME AND CUSTOMER SATISFACTION LEVEL OF MOBILE BANKING SERVICES
Income ( ) No. of Respondents
Low Moderate High Total
Less than ( )1 lakh 21
(47.73) 16
(36.36) 07
(15.91) 44
(100)
( ).1 – 2 lakh 45
(53.57) 27
(32.14) 12
(14.29) 84
(100)
( ) 2 –3 lakh 33
(50.77) 23
(35.38) 09
(13.85) 65
(100)
( )3-4 lakh 28
(53.85) 14
(26.92) 10
(19.23) 52
(100)
Above ( ) 4 lakh 15
(26.79) 35
(62.5) 06
(10.71) 56
(100)
Total 142
(47.18) 115
(38.21) 44
(14.61) 301
(100.00) Source: primary data, figure in the bracket percentage to the total.
Table 4.39 indicates that out of 142 and 115 respondents who have low and
medium level satisfaction with mobile banking services. Among the respondents large
number of respondents belongs to the income between 1 – 2 lakhs. In this income
group more than 50% have low satisfaction with Mobile Banking services. 115
respondents have medium level of experience, majority of them (35) belongs to above
4 lakh. 44 respondents have high level of satisfaction; majority of them belongs to
3 – 4 lakh. It is understood from the table, among the dissatisfied customer, the
middle income group of the respondents i.e., annual income is in between 1 – 3 lakhs,
are highly dissatisfied with the mobile banking performance.
173
Demographic Variables and Customer Satisfactions
To analyze the relationship between demographic variables such as sex, age,
educational qualifications, occupation and income and customer satisfactions with e-
banking services, a null hypothesis is framed and tested with the help chi-square test.
The result of the chi-square test is shown in tables
Demographic Variables and Customer Satisfactions Level on ATM Services
The relationship between individual demographic variables and customer
satisfaction level on ATM services is presented in Table 4.40.
Null hypothesis
There is no relationship between demographic variables of the respondents and
their satisfaction on ATMs service performance.
TABLE 4.40
CHI-SQUARE TEST RESULT – ATM SERVICES
Demographic variable
Chi-Square Test – Value
Table value 5% level
Table value 1% level
Ho Accepted / Rejected
Significance
Sex and satisfactions 12.6 12.59 16.81 Rejected *Significant Age and satisfactions 55.6 12.59 16.81 Rejected **Significant Educational qualifications and satisfactions
26.3 12.59 16.81 Rejected **Significant
Occupation and satisfactions 30.6 15.51 20.09 Rejected **Significant
Income and satisfactions 8.72 15.51 20.09 Accepted Not
significant *Significant at 5% level; ** Significant both at 5% level and 1% level.
As per table 4.40, there is a significant relationship among the demographic
variables, sex, age, educational qualifications, occupations and customer satisfactions.
However, there is no significant relationship between income and customer
satisfactions.
174
Demographic Variables and Customer Satisfactions Level on Internet Banking
Services
The relationship between individual demographic variables and customer
satisfaction level on internet banking is shown in Table 4.41.
Null hypothesis
There is no relationship between demographic variables of the respondents and
their satisfactions on internet banking performance.
TABLE 4.41
CHI-SQUARE TEST RESULT – INTERNET BANKING SERVICES
Demographic variable
Chi-Square Test – Value
Table value 5% level
Table value 1% level
Ho Accepted / Rejected
Significance
Sex and satisfactions 2.62 12.59 16.81 Accepted Not
significant
Age and satisfactions 10.5 12.59 16.81 Accepted Not
significant Educational qualifications and satisfactions
3.79 12.59 16.81 Accepted Not
significant Occupation and satisfactions
3.44 15.51 20.09 Accepted Not
significant
Income and satisfactions 4.11 15.51 20.09 Accepted Not
significant *Significant at 5% level; ** Significant both at 5% level and 1% level.
The chi-square test result reveals that there is no significant relationship
between demographic variables, sex, age, educational qualifications, occupation and
income and customer satisfactions on internet banking performance.
175
Demographic Variables and Customer Satisfactions Level on Mobile Banking
Services
The relationship between individual demographic variables and customer
satisfaction level on mobile banking is shown in table 4.42.
Null hypothesis
There is no relationship between demographic variables of the respondents and
their satisfaction on mobile banking performance.
TABLE 4.42
CHI-SQUARE TEST RESULT – MOBILE BANKING SERVICES
Demographic variable
Chi-Square Test – Value
Table value 5% level
Table value 1% level
Ho Accepted / Rejected
Significance
Sex and satisfactions 4.62 12.59 16.81 Accepted Not
significant Age and satisfactions 19.9 12.59 16.81 Rejected *Significant Educational qualifications and satisfactions
23.00 12.59 16.81 Rejected **Significant
Occupation and satisfactions
31.9 15.51 20.09 Rejected **Significant
Income and satisfactions 19.1 15.51 20.09 Rejected *Significant *Significant at 5% level; ** Significant both at 5% level and 1% level.
Table 4.23 reveals that there is a significant relationship between the
demographic variables, age, educational qualifications occupation, income and
customer satisfaction on mobile banking, whereas there is no relationship between sex
of the respondents and customer satisfaction on mobile banking services.
176
CHAPTER – V
PROBLEMS IN E-BANKING USERS
Introduction
Banks all over the world have been effectively deploying information
technology as an innovative resource to achieve speed, efficiency, cost reduction,
customer service and competitive advantage. Technology enabled products and
delivery channels offer value to customers providing them with anywhere, anytime,
anyway banking to customers. Even in a developing country like India the banks have
realized that in order to remain competitive and provide the best services to their
customers they need to have the latest technology in place. These technological
changes have been pioneered in India by foreign sector and private sector banks but
now it is seen that the traditional banks in the public sector are also increasingly
pursuing technology. Therefore, e-banking is the wave of the future of Indian banking
sector.
Growth of e-banking in India depends on many factors, such as computer
knowledge, success of internet access, new online banking features, household growth
of internet usage, legal and regulatory framework. E-banking can offer speedier,
quicker and dependable services to the customers for which they may be relatively
satisfied than that of manual system of banking. E-banking system not only generates
latest viable return, it can get its better dealings with customers.
E-banking provides enormous benefits to consumers in terms of the ease and
cost of transactions. But it also poses new challenges for country authorities in
regulating and supervising the financial system and in designing and implementing
macroeconomic policy.
177
This chapter highlights various issues and challenges related with e-banking and
the problems of e-banking users in the study area, so that the future of e-banking can
become good asset for overall growth in the globalize world.
Issues and Challenges of E-Banking Services
In spite of the fact that electronic banking has lot of advantages, there are some
hurdles of electronic banking. The main hurdles are as follows:
Customer Skills
The customers should have strong computers and browsing skills for using the
internet banking and conducting the transactions online. Sometimes customers with the
less sufficient knowledge get confusion of how to use the electronic banking. Another
reason in customers finding difficulty in using the online banking is when the page
layout of bank website is change and then customers have to face confusion and have to
invest more time and this cause delay in conducting the online transaction.
Security Risks
Security violation can be categorized as violation with serious criminal
intention, violation by 'casual hackers' or flaws in systems design and/or set up leading
to security violation. E-banking system users still face the security risks with
unauthorized access. It is extremely important to build in non-reputability which means
that the identity of both the sender and the receiver can be attested to by a trusted third
party who holds the identity certificates. Security is an important issue in online
banking. The major security risks are as follows:
Fraud in Transactions
Nowadays the fraud is common on internet and it has a lot of effect on the
electronic banking in a number of ways.
178
Fake Bank Websites/email:
Sometimes there are emails from banks or emails from the banks managers etc
in which the title of banks or used having fake email addresses and when customers
tried to give personal details then all the necessary information is hacked by the people
who have sent these fake emails and then they might use these emails according to their
own wish.
Use of Trojan Programs
The Trojan horse programs are used by the hackers to hack the important
personal information of customers. So when the customer opens the unknown and
suspicious email address or web site, the Trojan horse will automatically install in the
computer and customers did not have any knowledge of that and when customer opens
the bank website then customer becomes a victim of hackers and they hack the account
and passwords.
Technological Issues
Following four technology issues needed to be resolved in the area of security,
privacy, authentication and divisibility:
Security: The lack of security may result in serious damages.
Privacy: Technology can become strengthening by ensuring the secrecy of sender's
personal information and by enhance the transactional security.
Authentication: Encryption may help to provide more secured transactions. The two
possible ways to verify the integrity of the message are secure Hash algorithm and
verification through a third party called Certification Authority.
Divisibility: Electronic money may be divisible into different units of currency, similar
to real money.
179
Implementation Issues
The key challenges faced by the designers of e-banking systems to deliver the
services are legacy system integration and delivery of the integrated service across
multiple channels, each with different presentation, service management and security
capabilities. The service must be tailored to the characteristics of the target device and
communications channel, ensuring optimum security and service quality on each
customer interaction.
Power Failure
Nowadays India is facing a lot of problems like power shortage and mostly
people don’t afford generators or UPS (Uninterrupted power supply) at homes and
customers are scared of conducting transactions at homes because they might loss the
money when they are doing financial transactions.
ATM Theft
The robbery of money from ATM and the robbery of money when people are
doing transaction by ATM machines also became common in India and in big cities;
these incidents happened a number of times. Now people left with conducting
transactions at the night time because they are scared of such bad incident and they can
do nothing if they need urgent money.
Risk Management
E-banking environment may have risk like:
• Vendor and Credit Risk Issues
• Security, Data Integrity, and Confidentiality
• Authentication, Identity Verification, and Authorization
• Strategic and Business Risks
• Permissibility, Compliance, and Legal Issues
• Cross Border and International Banking
180
Authentications and Legal Issues
Legal Issues mean that financial institutions should comply with all legal
requirements relating to e-banking related with appropriate disclosures and protection
of customers' data. Authentication involves confirming factors like something only the
user should know, such as password or PIN, something the user possesses, such as an
ATM card, smart-card, token; or something the user is, such as biometric characteristic
like fingerprint or iris-pattern.
Verifying and Reputation Risk
Verifying a customer's identity is also an integral part of necessary services.
Reputation risk covers ways to influence an institution's reputation like Loss of trust
due to unauthorized activity on customer accounts, Disclosure or theft of confidential
information to unauthorized parties, Failure to provide reliable service and inability of
the institutions help desk to resolve customer problems.
The ethics of e-Business focus on areas relating to the fragility of information
collected and held electronically and transferred via computer-mediated communication
like privacy and accuracy of information, ownership of information and intellectual
property with accessibility of information.
The banking industry also recognizes that the Internet must be secure to achieve
high level of confidence with consumers and businesses. Key-components that will
help to maintain high level of public-confidence in open network environment includes:
Security, Authentication, Trust, Non-repudiation, Privacy and Availability, where
security means to provide a level of logical and physical security corresponding with
the sensitivity of the information and the individual bank's risk-tolerance.
E-banking is a very natural next step but at the same time digital nature of
internet, traditional or time honored physical security is no longer relevant with any
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boundaries. The successful banks will be those which gasp these new opportunities,
using technology to deliver real-service excellence, and designing solutions not around
their products and channels, but also around their customers.
Problems in ATMs
ATM cards are a large part of the modern banking world. These cards provide a
safer way to use money from your personal account without using a check or carrying
around large amounts of cash. However, there are also potential problems associated
with ATM cards. ATM cards have become a large part of everyday banking for many
people. Because of this, ATM cards present a fairly high risk for fraud. This makes it
extremely important to keep an eye on customer transactions, save receipts, and notify
the bank immediately if there are any fishy transactions on the account.
Keeping customer ATM card information safe is largely customer
responsibility. Although most banks will refund fraudulent charges, some might charge
a fee for reports made after a certain time period. It is important to check customer
ATM balance at least once a week.
At some ATM machines, fake card readers or number pads have been placed
over the real ATM machine. When customer slides the card through one of these
machines, the information is sent to someone who reads it and can steal customer card
information. It can be nearly impossible to spot these readers.
Most ATM problems will be identifiable within 24 hours. Most banks keep
account updates in real time. If customers have an online account it is easy to check the
balance of the card every day. Resolution of a problem takes much longer. However,
most problems should be resolved in one month or less.
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In India, insufficient number of ATMs, Improper location of ATMs, not
maintaining adequate cash with full denomination, security concern, connectivity, high
fees and charges, frequent out of order of ATMs, restriction for use other cards are
some of the major problems faced by the e-banking users.
To analyze the problems faced by the e-banking services user in the study area,
all the possible problems were made known to the respondents. They were asked to
rank the reasons in the order of their importance. The ranks given by them were
quantified by using the Garrett Ranking Technique (Garrett, 1969). The formula is
given below:
n Per cent position = Σ [ (Rij - 0.5) / Nj ] × 100 …(1) j=1
Where,
Rij = Rank given for the ith item by the jth individual, and
Nj = Number of items ranked by the jth individual.
The problems faced by the ATMs users are discussed in the Table 5.1.
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TABLE 5.1
PROBLEMS OF ATMs USER (N = 382)
S.No Nature of problem Mean score Rank
01 Insufficient number of ATMs 92 I
02 Improper location of ATMs 85 III
03 Not maintaining adequate cash 76 V
04 Not maintaining denomination 64 IX
05 Security concern 68 VII
06 Poor connectivity 66 VIII
07 High fees and charges 62 X
08 Frequent out of order 87 II
09 Restriction for use other cards 72 VI
10 Long waiting time 79 IV
Source: Primary data
From table 5.1, it has been observed that the main problem faced by the ATMs
users in the study area is the insufficient number of ATMs with a mean score of 92
followed by frequent out of order with mean score of 87. Improper location and long
waiting time are the third and fourth problems. Not maintaining adequate cash
restriction of using other bank cards are the fifth and sixth problem. The seventh,
eighth, ninth and tenth problems are the security concern, poor connectivity, not
maintaining adequate denominations of cash and high fees and charges respectively. It
can be inferred from the table that all the respondents are highly dissatisfied with the
number of ATMs installed by the banks. However it is noteworthy to mention that the
respondents opined high fees and charges is the last problem of the ATMs users.
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Problems in M-Banking
Mobile banking is simplest and cost effective way to provide banking services
in India. However, at present it was not accepted by common peoples in India because
of followings reasons:
1. Less IT literacy is adversely affecting on the use of mobile phone as electronic
device for banking. They have just using mobile phones for communication.
2. Most of rural peoples have no idea about m-banking and how it is used. It is
realized that about only 3 per cent of existing customers are using m-banking
services in urban areas they have not clear idea about benefits of m-banking.
3. Continues and good quality of cellular service connectivity is not available in
the rural areas.
4. Security and trust are most important aspects of any banking service, but people
have much of doubts about its security and trustworthiness.
5. M-banking provides limited range of services it not provides deposit facility
which is essential service for the customers. If they want to deposit their money
they must go in the branch.
6. Refund service is very poor in the m-banking. If customer made some wrong
transaction and he/she sent money to wrong person by mistake the bank does
not refund that money immediately. Stipulated time for refund such money is
defined maximum 15 days.
7. Breakdown of M-banking create inconvenience for customers. Many time it
found that m-banking services are not ready to use.
8. Language used in the m-banking software is also one of the barrier, almost all
software using English as common language but rural people and less literate
unable to use this software� due to poor knowledge about English.
9. Charges on GPRS or 3G service is not cheap to use in m-banking service. It
reduces cost effectiveness of m-banking.
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10. If customers are using m-banking, they would not be able to change to a
different service provider and his phone number (it may be permanent customer
of the particular cellular service provider).
The problems faced by the mobile banking users are shown in the Table 5.2.
TABLE 5.2
PROBLEMS OF MOBILE BANKING USER (N = 301)
S.No Nature of problem Mean score Rank
01 Time consuming 69 VI
02 Poor connectivity 90 II
03 Difficult to operate 83 III
04 Language problem 95 I
05 Less IT literacy 82 IV
06 Limited range of services 80 V
Source: Primary data
Table 5.2, shows that the problems of mobile banking users in the study area.
Language problem is the major problem of e mobile banking users with a mean score
of 95 followed by poor connectivity with mean score of 83. Difficult to operate the
mobile banking, less IT literacy, limited range of services and time consuming are the
third, fourth, fifth and sixth problems of the mobile banking users in the study area.
Internet Banking Problems
The popularity of Internet banking is growing rapidly as the transactions are
becoming faster and more convenient. However, there are some serious problems
associated with Internet banking.
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Internet banking is the latest development that has added a new dimension to
banking transactions by making it more convenient, which has eliminated the long
wearisome waiting-lines. But, there are some serious problems that the customers may
encounter while banking through the Internet, due to which many still prefer to go
directly to the banks instead of availing this facility.
For carrying out Internet banking properly, a basic knowledge of computers and
the Internet is required, which limits the number of people willing to avail this facility.
Many people, who are not comfortable with computers and the Internet, often find it
difficult to use Internet banking. Therefore, for beginners, Internet banking is really
time-consuming. In addition to this, people also find a difficulty in trusting a
completely mechanized system like Internet banking, in case of financial matters. In
many instances, a simple mistake, like clicking a wrong button, may create a big
problem. And so, many individuals often keep wondering if they have properly
executed the transaction. However, this uneasiness can be avoided by printing the
transaction receipt and keeping it with oneself, until the bank statement is received.
While banking through the Internet, the customers have to be careful about the
security of your Internet bank account. The security of Internet bank account depends
to a great extent on the security of customers’ computer, password and pin number.
Any leakage of information regarding password or pin number and banking
transactions can allow computer hackers to gain access to customers bank account,
which is the most common Internet banking problem. This can lead to unauthorized and
criminal transactions being conducted without the customers knowledge. By the time
customer get bank statement and detect such transactions, it may be too late.
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In Internet banking, customer have to make sure that the banking session is
secure, as in many instances customer may encounter proxy websites. These proxy
websites can easily access customer bank account, if they can crack customer’s user
name, password or pin number. Due to such security problems, many people are
apprehensive about Internet banking.
Sometimes, Internet banking can be time-consuming and tedious, as many
websites take quite a long time to get started. Besides this, customer Internet bank
account may also take considerable time to get started. Customer may also encounter
technical difficulties and connectivity problems while conducting Internet banking
transactions. Of course, there is a customer care department in almost every bank to
look into such matters, but often customer may not be able to get the necessary
assistance due to the congestion in the computer and telephone network. On the other
hand, in normal banking, customer can simply converse with the bank officials to sort
out any problem.
However, with the advances in technology, many banks have taken the adequate
measures to ward off any problems related to the security of Internet banking.
Customers can also follow some simple precautionary measures, like not
disclosing the password and pin number to anyone, changing the password at regular
intervals and installing antivirus software to ensure security and safety of their Internet
banking transactions. Online banking tutorials are also provided by many banks to help
familiarize people with Internet banking. So, customer can avail this facility to use
Internet effectively, for making day-to-day financial transactions. The problems faced
by the internet banking users are shown in the Table 5.3.
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TABLE 5.3
PROBLEMS OF INTERNET BANKING USER (N = 195)
S.No Nature of problem Mean score Rank
01 Time consuming 65 VI
02 Poor connectivity 97 I
03 Difficult to operate 72 V
04 Language problem 73 IV
05 Less IT literacy 78 II
06 Power failure 74 III
Source: Primary data
Table 5.3, indicates the problems of the internet banking users in the study area.
Poor connectivity is the major problem of the internet banking users with a mean score
of 97 followed by less IT literacy with mean score of 78. Power failure, language
problem, difficult to operate and time consuming are the third, fourth, fifth and sixth
problems of the internet banking users in the study area. The study revealed that the
insufficient number of ATMs, language problem and poor connectivity is the major
problem e-banking users in the study area.
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CHAPTER – VI
SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION
Having made an in-depth study on topic “E-Banking Practices and Customer
Satisfaction- in Thanjavur District, Tamilnadu : An Empirical Study”, the researcher
has arrived the following major findings, suggestions and conclusion.
FINDINGS
It is evident from the study that 70.68 per cent of the respondents both in public
and private sector banks are male.
The study reveals that private sector bank has large number of respondents
(61.36 per cent) in the age group of 25-35 and the public sector bank has (38.35 per
cent) in the age group of above 45.
It is clear from the study that 47.12 per cent respondents are graduates in public
and private sector banks.
It is observed from the study that 39.01 per cent of respondents are salaried
class.
Majority of the respondents (25.39 per cent) in this study belongs to the Income
level of 1 - 2 lakhs.
Out of 206 respondents, 156 respondents are using Mobile Banking services, 89
respondents are using Internet Banking and all are using ATM services in Public sector
bank.
Out of 176 respondents, 145 respondents are using Mobile Banking , 106
respondents are using Internet Banking services and all are using ATM services in
Private sector bank.
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The study revealed that the respondents in the public sector bank have secured
lowest score (30.59 per cent) for ATM Services with regard to customer satisfaction in
e-banking services. It can be inferred from the study that the private sector bank
customers have easy accessibility to use e-banking services as compared to public
sector bank.
The respondents of public sector bank have obtained low mean score
(27.3 per cent) as compared respondents of private sector bank (47.29 per cent) with
regard to convenience. Therefore it can be inferred from the study private sector banks
customers have more convenience to use e-banking services when compared to private
sector banks.
All the respondents are experienced privacy while using e-banking services
except ATMs services provided by public sector banks.
All the respondents agrees the security measures taken by public and private
sector banks regarding e-banking services except ATM services.
The average mean score of design towards e-banking services is
30 per cent in public sector bank and 40.84 per cent in private sector bank. Therefore,
it can be inferred that the design of the e-banking medium is not user-friendly.
The study reveals that the respondents of both public and private sector bank
have obtained the mean score of 31.65 per cent and 37.91 per cent respectively, for
content of the ATMs, Internet banking and Mobile banking services. The public sector
bank respondents have secured low mean score as compared to respondents of private
sector bank. It is inferred that there is poor content of e-banking services medium.
The average mean score regarding speed of e-banking services is 24.66 per cent
in case of public sector bank and 33.26 per cent in case of public sector bank.
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Therefore, it is understood from the study that the respondents has experiences at low
level towards speed to complete their e-banking transactions.
The study revealed that the respondents are of the opinion that the e-banking
service providers have charged heavy charges for e-banking services. It is also inferred
from the study customers of private sector banks has to pay high cost for transacting
e-banking services as compared public sector banks.
Overall satisfaction of the customers shows that the e-banking service users
have low satisfaction with e-banking services and the customer satisfaction with
e-banking services in private sector banks (44.92 per cent) is better than that of public
sector banks(38.08 per cent).
The customers are moderately satisfied with ATMs services provided by the
public and private sector banks with regard to accessibility, convenience and security of
using ATMs services.
The private sector bank customers have high level satisfaction as compared to
public sector with regard to accessibility for using internet banking services.
The private sector bank customers have enjoyed high level of satisfaction as
compared to public sector bank in respect of convenience in using internet banking
services. All the bank customers have enjoyed high level of privacy while using
internet banking services.
Both the public and private sector banks provide high security in internet
banking transactions. With regard to design, content and speed of e-banking medium of
internet banking, majority of the respondents in the public and private sector banks
have expressed low level of satisfaction. Therefore, it is inferred from the study the
design, content and speed of internet banking is not user-friendly, there is vast amount
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of scope for improvement in the design, content and speed of the internet banking is
needed.
Nearly 38 per cent of the respondents in the public sector bank and 57.93 per
cent of the respondents in the private sector bank have reveled low level of satisfaction
with fees and charges charged by the banks. Therefore, it can be concluded that the
large number of customers in the private sector banks dissatisfied with fees charged for
internet banking services as compared to public sector banks.
Majority of the respondents in the public sector bank and less than one-fourth of
the respondents in the private sector bank have expressed low level of satisfaction with
mobile banking services. Therefore, it can be inferred that the customers of private
sector banks easily access mobile banking services than that of their counterpart, public
sector banks.
While consider the convenience to use mobile banking services, majority of the
respondents in the public sector bank and a minimum of 17 per cent of the respondents
in the private sector bank have low level of satisfaction. Therefore, it is understood
from the study that the public sector banks customers have much convenience for using
mobile banking services as compared private sector banks.
Study reveals that most of the respondents in the public and private sector bank
have satisfied with privacy aspect while using mobile banking services. Therefore, it is
inferred from the study that the Indian banking sector provides high degree of privacy
for mobile banking users.
In security aspect of mobile banking, 40 per cent of the respondents each have
expressed medium level of satisfaction and 25 per cent and 31 per cent have revealed
high level of satisfaction. Therefore, it can be inferred that the security is not a major
factor which affect the customer satisfaction of mobile banking users.
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In respect of design, content and speed, considerable portion of the respondents
have expressed low satisfaction with mobile banking services, which indicates that
there is an urgent need to adopt new design, content and high speed by the banking
sector to improve customers satisfaction.
Among the mobile banking users, majority of the respondents in the private
sector bank and one-fourth of the respondents in the public sector bank have exposed
low satisfaction level for fees and charges charged to use mobile banking services.
Therefore, it is understood from the study that the customers are dissatisfied with the
fees structure of private sector banks when compared to public sector bank for using
mobile banking services.
The study revealed that the customers of public and private sector banks
experience the same level of satisfactions with e-banking services.
The study shows that there is a significant association between overall customer
satisfaction on ATMs services and customer satisfaction factors, Accessibility,
Convenience, Privacy, Security, design, Content, Speed and fees and charges. Hence, it
can be inferred that the customer satisfaction factors has a positive significant
influences on the customer satisfaction on ATMs services.
The design, content, speed and fees and charges have significant positive
association with the overall customer satisfaction, it implies that these factors have
influenced the customer satisfaction on internet banking services. However the factors,
accessibility, convenience, privacy and security have negative correlation with overall
customer satisfaction.
All the customer satisfaction factors such as accessibility, convenience, security,
design, content, speed, fees and charges have positive significant association with
customer satisfactions on mobile banking services. However the factor Privacy has
negative correlation with overall customer satisfaction on mobile banking services.
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Most of the male respondents have low satisfaction with selected e-banking
services of ATMs, internet banking and mobile banking.
It is noteworthy to mention that the maximum number respondents in the age
group of 25-35 years have low level of customer satisfaction as compared to other age
groups with e-banking services provided by the public and private sector banks in the
study area.
Most of the graduate customers dissatisfied with e-banking performance of the
banks as compared to other customers in the study area. The salaried and business
customers are having very low satisfaction with e-banking services of ATMs, internet
banking and mobile banking performances in the study area.
Fifty per cent of the ATMs users have low satisfaction and remaining fifty per
cent have medium and high satisfaction and there is no major variation between income
and satisfaction level of the respondents who are having low satisfaction with ATMs
services.
Among the dissatisfied customers, the high income group has low satisfaction in
relation to internet banking performance whereas the middle income group of the
respondents i.e., annual income is in between 1 – 3 lakhs, are highly dissatisfied with
the mobile banking performance.
The study revealed that there is a significant relationship among the
demographic variables, such as sex, age, educational qualifications, occupations and
customer satisfactions. However, there is no significant relationship between income
and customer satisfactions.
There is no significant relationship between demographic variables such as sex,
age, educational qualifications, occupation and income and customer satisfactions on
internet banking performance.
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There is a significant relationship between the demographic variables such as
age, educational qualifications occupation, income and customer satisfaction on mobile
banking, whereas there is no relationship between sex of the respondents and customer
satisfaction on mobile banking services.
It has been observed that the main problem faced by the ATMs users in the
study area is the insufficient number of ATMs followed by frequent out of order.
Language problem is the major problem of the mobile banking users followed by poor
connectivity. Poor connectivity is the major problem of the internet banking users
followed by less IT literacy.
SUGGESTIONS
E–banking should be easily accessible by the users; this should be in terms of
approach or convenience, availability, understanding and suitability. It should also be
suitable for all categories of customers even the physically challenged.
It is suggested that technical problems that occur while withdrawing cash from
ATM shall be solved immediately.
E-banking service should be according to the customer expectation and
satisfaction. The bank should arrange the demonstration programs for the clients to
enjoy the services properly.
Improved Internet connectivity is very essential for the success of e-banking.
The banking industry therefore, needs to ensure regular internet connections with
sustained power supply for increasing customer satisfaction.
Customers need to be given more sustained public education and awareness
concerning the use of e–banking services such as proper maintenance of ATM cards,
how to make various online transactions without giving room for Internet fraudsters,
and ensuring more security for their online transactions.
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The banks should pay special attention to convenience by providing the
customers with electronic banking service at points which can easily be accessible.
The banks’ management should also improve their ATM systems so as to
minimize waiting time in the queue. This will improve the efficiency in the service
delivery hence boosts customer confidence.
The banks should introduce Mobile ATM services, for which a vehicle carrying
ATM with sufficient manpower should be stand and move prominent places such as
bazaar, shopping complex and people crowed important public place.
To facilitate cashless trading the banks should eliminates service tax for
purchasing goods and services through ATM cum Debit card.
Banks should also provide customers with a toll free number. This could handle
customers with complaints and general feedback about the electronic banking services.
This would not only provide a service to a customer that is free, but also provide the
bank with valuable information for future development on electronic service.
The banks should provide statements for every transaction that has been
conducted electronically. This will enable customers to verify accuracy of all
transactions including transaction confirmation.
Banks should organize seminar and conference to educate the customer
regarding uses of online banking as well as security and privacy of their accounts.
Some elder customers are hindered by lack of computer skills. They need to be
educated on basic skills required to conduct online banking. Banks must emphasize the
convenience that online banking can provide to elder people, such as avoiding long
queue.
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The banks should build customer awareness and informing the customer on uses
of e-banking services. The Reserve Bank of India and banks should plan a coordinated
campaign in partnership with the trainers and professional to educate customers for
operating e-banking medium.
The banks instruct its customer to check transaction history details and
statements regularly to make sure that there are no unauthorized transactions. Change
password or PIN and avoid using easy-to-guess passwords.
Banks should develop e-banking services software in regional language and
should use most commonly used phrases, name and shortcuts in the software.
Banks should enhance their refund facilities concerns to if wrong transactions
made by customers by mistake or if any.
Telecommunication department and cellular service providers should extend
their network coverage in rural and remote areas to facilitate them communication,
internet banking and m-banking also. The government should provide conditional
financial support to cellular service providers to extend such networks in rural areas.
Bank should offer loan for purchasing computer and mobile phone handsets to
its customers with tie up with computer and mobile handset company. It may gives
access to them via e-banking service.
The banks have to target those customers whose usage of computers, internet
and other technology products are on the higher side for promoting electronic banking
services usage.
The banks could encourage customers to use these services more frequently
through rewarding customers for conducting transactions through these electronic
channels with incentives such as reduced service charges.
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In order to create and rebuilt the trust of customer banks should take further
strong security measures from every aspect in e-banking services. Banks should also
improve and enlarge their contribution through ATM to establish a long-lasting and
continuous relationship with consumers. They should focus on significant aspects of
confidence and time alone as well as reliable procedures of ATMs and other services.
Banks should take reasonable steps, for example, advertising campaign,
seminars etc in order to get aware the society from the uses and benefits of e-banking
services.
Government should also play its role in the development of IB. Government /
Banks should reduce service charges on the transactions.
Banks should implement awareness programs to customers on how to use the
modern advanced banking technologies;
The effects of the advanced banking methods should be more visible to
customers in form of lower service charges;
The banks should train their employees to be more effective and eliminate
problems at banking points;
The banks should focus at improving security especially to eliminate threats at
ATMs and internet banking;
Banks should increase the distribution of ATMs and make them more
universally accessible to customers;
Improve and promote cellphone banking through communication mediums such as
TVs, radios, and the internet;
The banks should attempt to use more simple and accessible banking methods
while also reducing functionality problems of ATMs and
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Facilities for E- Banking should be offered to public free of charge as possible.
Bank staff to be trained to market various facilities of E- Banking with special
reference to ATM, Internet banking, Plastic cards, Online Tax Accounting System and
Real Time Gross Settlement.
The study revealed that the design of the e-banking medium is not user-friendly.
Therefore, the banks should redesign the design, content of e-banking medium, to make
the e-banking services more user-friendly.
Mobile Number Portability may be introduced to avail e-banking services, even
customer move to other banks.
CONCLUSION
To sum up, out of 206 ATMs service users in public sector bank, the low
customer satisfaction level is maximum with 58 per cent respondents, 34 per cent of the
respondent got medium customer satisfaction and small portion of eight per cent of the
respondents exposed high customer satisfaction. Similarly, out of 176 respondents in
the private sector bank 43 per cent have expressed medium level of customer
satisfaction, 39 percent have exposed low satisfaction
In case of internet banking services, there are 89 internet banking users in the
public sector bank, among them, 43 per cent are have low customer satisfaction, 33 per
cent have medium and one-fourth of the respondents have high satisfaction. Likewise,
there are 106 internet banking users in the private sector bank, out of them, 45 per cent
have secured low satisfaction, 30 per cent and 25 per cent have expressed medium and
high level of satisfaction.
Among the 156 users of mobile banking services in the public sector bank, 44
per cent secured low satisfaction,39 per cent expressed medium satisfaction level and
17 per cent have enjoyed high level of customer satisfaction. Out of 145 mobile
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banking users in the private sector bank, 50 per cent have expressed low satisfaction, 37
per cent have exposed medium level and 12 per cent are enjoyed high level of customer
satisfaction.
The study also revealed that dissatisfied level is highest in case of ATMs in the
public sector banks as compared to private sector banks whereas in case of internet
banking and mobile banking dissatisfied level is highest in public sector banks when
compared to private sector bank.
In general, E–Banking has changed the traditional patterns of bank operations.
These changes in technology, competition and lifestyles all have an impact on how
banks operate today. Actually the customer had to physically visit the bank office in
order to carry out banking operations. With the introduction of e – banking customers
are saving money and time since they don’t have to physically visit the bank office.
Every bank realizes that they must provide some kind of e – banking to their customers
in order to survive. Through e – banking, banks can better maintain the relationship
with customers because with e – banking customers tend to interact more with provided
services. It also increases the revenues of banks and can easily gain competitive
advantage through differentiation of banking services and thereby an image
improvement.
In true E -banking, any inquiry or transaction is processed online without any
reference to the branch (anywhere banking) at any time. Providing internet banking is
increasingly becoming a 'need to have' than a 'nice to have' services. Delivering
superior service quality appears to be a prerequisite for success of any service firms. As
electronic banking becomes more prevalent, now-a-days customers are evaluating
banks based more on their “high-touch” factors than on their “high-tech” factors in
most of the developing economy like India. The operationalization of customer
satisfaction in banking sector is somewhat hazy, and it should be operationalized along
the same dimensions that constitute service quality. Therefore, if the banking industry
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adopts the above mentioned recommendations made by the researcher, it will certainly
increase customer satisfaction with e-banking services.
SCOPE FOR FURTHER RESEARCH
In order to greatly contribute to the existing body of knowledge about customer
satisfaction within the banking sector in India, it is recommended that similar future
research could be conducted taking in all the states in India and with more sample
sizes; also to differentiate between public and private sector banks. Further research is
required to identify the impact of customer satisfaction on financial performance in the
banking industry as well as other service industries. Further research is required to
investigate issues related to online banking in deeper manner and what strategies should
adopt by banks by which they can enhance level of e-satisfaction and e-loyalty with
respect to online banking.
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E-BANKING PRACTICES AND CUSTOMER SATISFACTION - IN
THANJAVUR DISTRICT, TAMILNADU: AN EMPIRICAL STUDY
QUESTIONNAIRE
It is pleasure to welcome you as one of the respondents in a innovative
based study on “E-Banking Practices and Customer Satisfaction – in
Thanjavur District, Tamilnadu: An Empirical Study”. Kindly spare some of
your valuable time and fill up the enclosed set of questionnaires. The purpose of
the questionnaires is to collect data and information regarding your satisfaction
with e-banking services offered by your banks. Your whole hearted co-operation
is solicited.
Note: Kindly answer to each and every question carefully. The data and
information provided by you will be kept strictly confidential and used for
the said purpose only.
Profile of the Respondent:
Name:
Gender:
Age in years :
Educational Qualifications:
Occupation:
Monthly income (Rs.):
Residing areas:
Duration of using e-banking services:
Awareness of e-banking services:
PART – I
ACCESSIBILITY
1. e-banking services provided by the banks allows easy access to transaction
data both recent and historical.
Strongly agree Agree Neutral Disagree Strongly disagree
2. Customers can access to the details on the bank charges, the details on fund
transfer between accounts, information on competitors interest rates,
foreign exchange rates commission charged for foreign exchange, contact
details for complaints, frequently asked questions page, in addition to the
availability of search engine.
Strongly agree Agree Neutral Disagree Strongly disagree
3. e-banking service practices involves consistency of performance and
dependability.
Strongly agree Agree Neutral Disagree Strongly disagree
4. Employees of e-banking service providers possess the required skills and
knowledge to perform the service.
Strongly agree Agree Neutral Disagree Strongly disagree
5. Politeness, respect, consideration and friendliness of contact personnel.
Strongly agree Agree Neutral Disagree Strongly disagree
6. e-banking service providers making the effort to understand the customer’s
needs.
Strongly agree Agree Neutral Disagree Strongly disagree
7. Quick response and the ability to get help if there is a problem or question.
Strongly agree Agree Neutral Disagree Strongly disagree
8. Provision of caring and individualized attention to customers provided by
call centers or web administrators.
Strongly agree Agree Neutral Disagree Strongly disagree
9. e-banks provide sufficient notice to the users, and suggest alternatives for
them to complete their transactions within the closure hours in case of
urgent needs.
Strongly agree Agree Neutral Disagree Strongly disagree
10. e-banks provide power backup and data recovery system to avoid
interrupted transactions in case of power failure.
Strongly agree Agree Neutral Disagree Strongly disagree
11. Banks provide 24 hours e-based monitoring and assistance for e-banking
services that need immediate assistance.
Strongly agree Agree Neutral Disagree Strongly disagree
12. e-banks have more interpersonal interaction with customers throughout the
service delivery process which may avoid miscommunications between the
users and the service providers.
Strongly agree Agree Neutral Disagree Strongly disagree
13. e-banks provide help-desk services and online help facilities, and the
customer service officers are friendly when addressing complaints.
Strongly agree Agree Neutral Disagree Strongly disagree
14. e-banks provide customer feedback services.
Strongly agree Agree Neutral Disagree Strongly disagree
PART – II
CONVENIENCE
15. Customers can access e-banking services at anytime and anywhere
Strongly agree Agree Neutral Disagree Strongly disagree
16. There is no queue while using e-banking services.
Strongly agree Agree Neutral Disagree Strongly disagree
17. e-banking services save time as compared to conventional banking
Strongly agree Agree Neutral Disagree Strongly disagree
18. E-banks transaction is easy to use.
Strongly agree Agree Neutral Disagree Strongly disagree
19. e-banking services are user friendly.
Strongly agree Agree Neutral Disagree Strongly disagree
20. e-banking services facilities ensure access of account when abroad
Strongly agree Agree Neutral Disagree Strongly disagree
21. e-banks spend a great deal of time and money for developing e-banking
functionality to allow customers an easy and convenient way to manage their
money
Strongly agree Agree Neutral Disagree Strongly disagree
PART – III
PRIVACY
22. Confidential information is delivered safely from banks to customers.
Strongly agree Agree Neutral Disagree Strongly disagree
23. Customers’ financial information may not be passed on to other
organizations without consent of the customers.
Strongly agree Agree Neutral Disagree Strongly disagree
24. Third parties are not able to assess customers’ financial details.
Strongly agree Agree Neutral Disagree Strongly disagree
25. e-banks keep customers information private and confidential.
Strongly agree Agree Neutral Disagree Strongly disagree
26. e-banks ensure protection of personal information, risk of fraud and
financial loss.
Strongly agree Agree Neutral Disagree Strongly disagree
27. Privacy is not significant obstacles to the adoption of e-banking in India.
Strongly agree Agree Neutral Disagree Strongly disagree
28. Customers trust that their banks are more concerned about privacy issues
and will protect them.
Strongly agree Agree Neutral Disagree Strongly disagree
29. Privacy factor influences the adoption of e-banking services.
Strongly agree Agree Neutral Disagree Strongly disagree
PART – IV
SECURITY
30. Customers are satisfied with the security system of the e-banking service
providers.
Strongly agree Agree Neutral Disagree Strongly disagree
31. e-banking service providers consider security as the most important issue of e-
banking practices.
Strongly agree Agree Neutral Disagree Strongly disagree
32. e-banking service users have freedom from danger, risk and doubt about
security.
Strongly agree Agree Neutral Disagree Strongly disagree
33. e-banking service users belive that the banking infrastructure is reliable in
correcting erroneous transactions.
Strongly agree Agree Neutral Disagree Strongly disagree
34. e-banks will compensate for any losses due to security reason or
infringements.
Strongly agree Agree Neutral Disagree Strongly disagree
35. e-banking service users perceives that his bank information are secure and
that nobody can access their accounts.
Strongly agree Agree Neutral Disagree Strongly disagree
36. Security factor is prime factor for adoption of e-banking services.
Strongly agree Agree Neutral Disagree Strongly disagree
PART – V
DESIGN
37. e-banking service medium have attractive screen layout and design.
Strongly agree Agree Neutral Disagree Strongly disagree
38. e-banking service medium has flashy graphics and colour configuration.
Strongly agree Agree Neutral Disagree Strongly disagree
39. The design with appropriate use of graphical user interface is also considered as an
important determinant for using e-banking services.
Strongly agree Agree Neutral Disagree Strongly disagree
40. The design is keeping customers informed in language they can understand
and listening to them.
Strongly agree Agree Neutral Disagree Strongly disagree
41. It involves the correct technical functioning and the accuracy of service
promises (delivering when promised) and product information
Strongly agree Agree Neutral Disagree Strongly disagree
42. Ergonomic visual structure and design are particularly important for using
e-banking services.
Strongly agree Agree Neutral Disagree Strongly disagree
PART – V
CONTENT
43. e-banks provide clear, simple and understandable guidance screen ease the
ustomers to perform.
Strongly agree Agree Neutral Disagree Strongly disagree
44. e-banks provides the suitability of the information to the user’s purposes.
Strongly agree Agree Neutral Disagree Strongly disagree
45. Information credibility affects the acceptance of e-banking.
Strongly agree Agree Neutral Disagree Strongly disagree
46. Up-to-date contents of information greatly positively influences the
adoption of e-banking.
Strongly agree Agree Neutral Disagree Strongly disagree
47. e-banking services have been upgraded compared to when they first started
using the services.
Strongly agree Agree Neutral Disagree Strongly disagree
48. Appealing aesthetic content would have positive impact on drawing
potential customers’ attention.
Strongly agree Agree Neutral Disagree Strongly disagree
49. e-banks provide graphics and text on the e-banking medium to perform e-
banking transactions easily.
Strongly agree Agree Neutral Disagree Strongly disagree
PART – VI
SPEED
50. Speed of e-transactions flow is critical to user satisfaction of using e-
banking services.
Strongly agree Agree Neutral Disagree Strongly disagree
51. e-banking service medium is not frequent connection breakdown.
Strongly agree Agree Neutral Disagree Strongly disagree
52. Easy to navigate the medium due to smooth speed.
Strongly agree Agree Neutral Disagree Strongly disagree
53. Transition is efficient/no waiting time.
Strongly agree Agree Neutral Disagree Strongly disagree
54. Response speed to complaint is satisfactory.
Strongly agree Agree Neutral Disagree Strongly disagree
55. Speed of e-transactions flow is faster than traditional banking channels.
Strongly agree Agree Neutral Disagree Strongly disagree
56. The customers are highly satisfied with Promptness of the delivery of e-banking
services
Strongly agree Agree Neutral Disagree Strongly disagree
57. Willingness or readiness of employees to provide e-banking services
(timeliness of service, giving prompt service)
Strongly agree Agree Neutral Disagree Strongly disagree
PART – VI
FEES AND CHARGES
58. One of the main attributes that determines costumers’ decision on using e-
banking system is fees and charges
Strongly agree Agree Neutral Disagree Strongly disagree
59. e-banks provides customers convenience and flexibility and can be provided at a
lower cost than traditional branch banking
Strongly agree Agree Neutral Disagree Strongly disagree
60. Price of service fees is acceptable.
Strongly agree Agree Neutral Disagree Strongly disagree
61. E-banks charge with the negligible annual fee.
Strongly agree Agree Neutral Disagree Strongly disagree
62. Customers won’t terminate services even if bank charges high annual fee.
Strongly agree Agree Neutral Disagree Strongly disagree
63. If customers are to use new technologies, the technologies reasonably priced
relative to alternatives.
Strongly agree Agree Neutral Disagree Strongly disagree
64. Efficient and speedy e-banking transaction with lower transaction cost.
Strongly agree Agree Neutral Disagree Strongly disagree
65. Compared to other banks, your bank offers attractive service costs.
Strongly agree Agree Neutral Disagree Strongly disagree
66. Compared to other banks, your bank charges fairly for similar services.
Strongly agree Agree Neutral Disagree Strongly disagree
67. Compared to other banks, your bank provides more free services.
Strongly agree Agree Neutral Disagree Strongly disagree
E-BANKING – ISSUES AND CHALLENGES
Dr. M. SELVACHANDRA, S.P. DHANDAYUTHAPANI Associate Professor, Assistant Professor, Dept. Of Commerce, Dept. Of Management Studies, A.D.M. College for Women, Anna University of Technology, Nagapattinam 611 001. Tiruchirappalli 620024.
All over the world, the banking industry has undergone a intense transformation since the early 1990s. The changed operating environment for the banking sector, underpinned by globalization, deregulation and advances in information technology, has resulted in intense competitive pressure. Banks have responded to this challenge by diversifying through updating Information Technology and modernization of existing system.
E-banking is a revolution of banking sector by information technology. E-banking breaks the boundaries of business premises and banking hours. Anywhere and any time banking transactions can be made.
Though various advancements happening, problems also arising in the level of operation and management level. This paper assesses the current issues and challenges of e-banking in the aspect of security level. Because, it affects the customer satisfaction level.
E-banking security
The security is a primary issues relating to e-banking. New technologies always produce new threats and challenges to security and law enforcement agencies. Open electronic delivery channels create new security issues for banks with respect to confidentiability and integrity of information, non-repudiation of transactions authentication of users and access control.
ATM frauds
Automated Teller Machine is an electronic machine which is linked to the accounts and records of a banking institution. It allows customers to avail banking services by using Personal Identification Number (PIN), with out visiting banking premises. But there is a chance to frauds relating it may be committed both by outsiders and insiders. Frauds can happen due to the negligence on the part of the cardholder or due to lack of alertness on the part of the bank. If the card holder doesn’t follow the common precautionary measures as mentioned below, he/she is exposed to risk.
• A cheat may to through the discarded receipts or carbons to illegally find out the card number.
• A dishonest clerk makes an extra imprint from credit card or charge card for his or her personal use.
• In a “Spoofing attach”, the attacker created a misleading context to trick you into making an appropriate security relevant decision.
• Net using customers are bombered by fake e-mails, asking for personal details like user name and pass word of customers account.
• Another way of becoming a victim is Trojan Horses or malicious software programs that hide in files attached to an e-mail or downloaded from the internet and are installed on the computer. It used for identity to find the customer’s user name and password.
• Apart from that, fradusters using skimming strategy, by inserting card-swipe device that reads the information on a consumer’s ATM card. Scammers insert onto an ATM, ready to swipe information from unsuspecting customers. They take a blank card and encode all the information from an ATM card when they swipe. The skimmer catches the PIN through a small camera mounted on the ATM.
• Also, scammers insert a portable steel loop into an ATM card slot. The scammer usually approached the victim while at the machine, and poses as the person next in line.
• Some time, an unknown person contacts you claiming to be from the security department to your bank. They ask you to verify personal information of the account holder over the phone such as your birth date or your maiden name.
A sound banking system should posses some basic requirements to protect customers’ interest and faith as follows
- A fraud free culture - A tested practice code - An internal grievance redressal system - Security culture
Fraud protection guidelines
Avoidance of fraud is not only the responsibility of bank, it also part of customer. If customer follow the guidelines given below can be minimize the fraud.
Protect your ATM card as cash. Don’t write your PIN anywhere. Change the PIN frequently (at least 2 months. Don’t set PIN as 1234 or year of birth. Don’t give your information over the telephone to any one even one claiming to
be from your bank. Don’t lending your ATM card to any one. Before disposing old cards, cut them up through the account number. Carry ATM card that you anticipate you will need.
Sign your ATM cards. Keep you ATM card number and date of expiry. Never allow yourself into ATM centre while carrying your transaction. Don’t accept assistance from any one in ATM centre. Minimise your time at ATM centre. Use an ATM only where and when you feel completely comfortable.
Conclusion
From the above, we can came to conclude that security culture is need of the hour. Bankers should ensure that who is accessing what, when and why. This white color crime is not sole problem of banks alone; it is a big threat, which requires a co-ordinate and co-operative action on the part of the bank customers and the law enforcement machinery.
References
Andrea Schaechter, 2002, “Issues in Electronic Banking : An Overview”, IMF Policy Discussion
paper, No. 02/6
Bank for International settlements, Basel Committee on Banking Supervision, 2000, “Electronic
Banking Group Initiatives and White Papers”, October (Basel);
http://www.bis.org/publ/bcbs76.htm
Benjamin M. Friedman, 2000, “Decoupling at the Margin: The Threat to Monetary Policy from
the Electronic Revolution in Banking”, International Finance, Vol.3,pp261-72.
Jayant Y. Umranikar, 2006 “Banking Security”, The Indian Banker, Vol.1, No.8, pp 17-21
Khanna P.K., 2006 “Prevention of Automatic Teller Machine Fraud:, The Indian Banker, Vol.1
No.9, pp 33-37.
Saleh M. Nsouli and Connel Fullenkamp, 2001, “The Regulatory Framework for E-Banking”,
keynote address at “e-Lebanon: Banking, Payments, and ICT” conference, Beirut, Lebanon, June
6-8.
IMPACT OF GLOBALISATION ON BANKING INDUSTRY
* S.P.DHANDAYUTHAPANI
** T.PRATHEEBA
Abstract
The world is changing at a staggering rate and technology is considered to be the key driver for these changes. With the liberalization and opening up of Indian economy, new private sector banks and foreign banks came into existence and started their fully computerized services.
Internet banking is increasingly becoming a "need to have" than a "nice to have" service. Technology in banking has been used to handle greatly expanded customers ways, to reduce the real cost of handling payments, to liberate the banks from traditional constraints on time and places. This paper includes detailed online analysis of productivity, profitability, efficiency, customer satisfaction level prevailing in banking industry and measures to improve security and suggest the scope of computerization in rural/semi- urban banking sectors.
Keywords: Electronic Clearing Services (ECS), Deposit Mobilization.
INTRODUCTION
The banking system which constitutes the core of the financial sector, plays a critical role in transmitting monetary policy impulses to the entire economic system. Money and finance is an important and necessary factor for economic development. Banking industry is the blood vascular
system of our economy. It has a positive role to play in the economic development of the country as repositories of people’s savings and purveyors of credit, especially as the success of the economic development depends on the mobilization of resources and their investment in an appropriate manner. In our country, constitutionally committed to socialistic pattern of society-banks have important role to play in the reduction of regional disparities, which is an important objective of the economic planning.
HISTORICAL PERSPECTIVE OF INDIAN BANKING
The earliest Indian bank was the Bank of Hindustan set up in 1770. Then in the 19th century the Presidency banks were set up under a charter. Private banks was allowed in 1900. In 1921 these banks were amalgamated to form the Imperial Bank of India. In 1935 the Reserve Bank of India was constituted as the apex bank. Up to 1949, it was a private ownership bank, then with the passage of the Banking Regulations Act 1949, it came under Government control. State bank of India came into existence and became the Bank of the government of India in 1955 with RBI taking control of the Imperial Bank of India. State bank of India, in turn took over the shares in the private banks floated in the erstwhile princely states. Thus the first phase of nationalization of the banking
sectors took root in 1949 and culminated in the nationalization of fourteen banks in the year 1969. The independence to the first nationalization period was marked by the consolidation of the banking sector. From 566 banks in 1951, the number came down to 86 in 1971, as weaker banks were emerged with the healthier ones. The department of Banking was set up under the Ministry of Finance.
STRUCTURE OF INDIAN BANKING SYSTEM
In India though the money market is still characterized by the existence of both the organized and the unorganized segments, institutions in the organized money market have grown significantly and playing an important role. Amongst the institutions in the organized sector of the money market, commercial banks and commercial co-operative banks have been in existence for the past several decades. The regional Rural Banks came into existence since the middle of seventies. Thus with the phenomenal geographical expansion of the commercial banks and the setting up of the RRBs during the recent past, the organized sector of the money market has penetrated into the rural areas as well. Besides the aforesaid institutions which mainly served sources of short term credit to industry, trade, commerce and agriculture, a variety of specialized financial institutions have been set up in the country to cater to the specific needs of industry, agriculture and foreign trade. Some of them are commercial banks, public sector banks, private sector banks.
COMPUTERIZATION IN BANKS
Banking, a core industry of any economy should be growth oriented. Computerization is a positive step to bank growth. With the aid of computers, the bank work can be done faster. Not only the present work load can be reduced to a great extent but also the bank can expand its working area with the same manpower. The first effort of computerization and mechanization in the banking industry was drawn up in 1983-84. But the process of introducing computerization in the banking industry in India, particularly in public sector banks is very slow. There are so many difficulties inherent in nationalized banks which have hurdles in their endeavor to mechanization/automate their operations due to stiff opposition from unions for the introduction of any sort of automation fearing loss of jobs, vast network of branches largely located in rural/semi-urban areas. The main agenda of private banks is to provide better services to the customer who can afford it. Their approach can be termed as cherry picking banking, which aims at the customers. Their perceptions is also strategically different. They view the customers as financial partners rather than custodians of their customer’s money- a shift from custodianship to companionship. To achieve the goals these banks eliminated the constraint of time and distance by expanding the banking hours from eight to twenty four and reducing the distance from infinity to zero.
With the development of information technology, it has brought a revolution in the banking industry. The banks appear to be on
fast track for IT based products and services. Deregulation and Liberalization in the financial sector have stimulated financial innovations. The four major objectives of computerization in banking are
Improvement in customer service Better house-keeping Faster decision making Increase in productivity and
profitability
The virtual financial services can be categorized as Automated Teller Machines(ATM), Remote Banking Services, Remote Banking Interface, Smart Cards.
ELECTRONIC BANKING
E-banking refers to the use of technology which allows customers to access banking services electronically whether it is to pay bills, transfer funds, view accounts or to obtain information and devices. Technology in banking has been used in four major ways
To handle a greatly expanded customer ways
To reduce substantially to real cost of handling payments
To liberate the banks from the traditional constraints on time and place
To introduce new products and services
The various benefits of electronic transfer of funds are fast, safe, secure and hassle free. The Electronic Clearing Services (ECS) i.e., electronic Debit and Credit clearing services provides some advantages
Payment on due date
No more “loss in transmit” Effortless receipt No fraudulent encashment No hassle of standing in long queues No more disconnection of
telephone/electricity line Corporates can eliminate postal
delays as well as paper work and lengthy procedures
Saves cost on stationary, printing and postage
Immediate receipt and payment of dues
Appreciation from investors/customers
SURVEY OF BANKING IN INDIA
Information technology has made the banking services faster, more efficient and more economical. Its impact can be seen on the efficiency of banks, productivity, profitability, employment, psychology of customers. In India around 73% of the bank branches are located in rural and semi-urban areas. In the country as a whole, only 10% of the branches of the public sector banks are fully computerized and 22% are partially computerized. But on the other hand some new private sector banks are fully computerized and they are launching a gateway to facilitate intra-bank transfer of funds through internet. They are bringing banking services to the very door step. Recently , they have started to penetrate in semi-urban and rural sector of India. Their profits, branch network is on the increasing trend. The gap regarding the productivity, profitability and customers psychology of Internet using banks, fully computerized and
partially computerized banks isNew private sector banks have levinternet effectively in taking customers from public sector significantly increased theirpotential. Internet banking ismanifestation technology capathese banks. Most compantransferred or are in the ptransferring their payrolls to the nsector banks or foreign banks inDue to the adoption of itechnology by many banks therechanges in the psychology of theregarding banks environment.
The studies of Adhivarahan conthe number of incidents of e-fraline breaches is the highest Therefore cyber crimes in bankhave to be treated with more carpurpose, a statutory body similar fraud center” should be formedThe studies of B.Janki includes thtechnology to add value to customdevelop new products, strengmanagement, and asset liability mand improve profitability. The Bhattacharya revealed that pubbanks had the highest efficiency three categories with foreign abanks having much lower eHowever PSBs started showing aefficiency after 1987, private banno change and foreign banks shorise in efficiency.
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PRODUCTIVITY AN
Productivity can boutput per unit of a factor ogiven period. In a bankinmember constitute the mosBecause of this fact, timproving productivity hasstaff productivity alonInformation Technology isfactor which is affectingbanks. Productivity is a routput. It includes the aefficiency which has definprofitability. As bankinginfluenced by govt. policyand various other compulsions, it is difficparamaters for productivitproductivity analysis hasvarious on-line banks, fubanks and partially computsample analysis on HDFbelow.
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NALYSIS
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PROFITABILITY ANALYSIS
This analyses the profitability of banks by two major methods i.e., trend analysis and ratio analysis. The interest rates on working funds, non-interest expenditure of working funds, net profits of working funds, current deposits, saving deposits, burden ratios and other profitability ratios are measured with various banks private, public and other inter group comparisons are done among the different banks. The above discussions concludes that the profitability of selected nationalized banks, its associate banks are required to do a lot to come out of present state of affairs. The position of private sector banks is comparatively better than public sector banks. There is a good effect of computerized index on some important parameters of profitability.
SATISFACTION LEVEL OF CUSTOMERS
Customer satisfaction is the strongest foundation for the success of an organization. It determines the future cash inflows of the business. The organization has to depend on its existing as well as new customers to keep itself growing. In case customer is not satisfied and defects, there will be a loss and missing opportunity to make profit. The defection rate of the customer is a major determinant of the profitability if any business.
CONCLUSION
The Liberalization of banking sectors and Information Technology revolution is entirely changing the way banking business is done and has considerably widened the
range of products and increased the expectations and demands of the customers. Information Technology has made the banking services faster, more efficient and more economical. Its impact can be seen on the efficiency of banks, productivity, profitability, employment, psychology of customers. The gap regarding the productivity, profitability and customers psychology of internet using banks, fully computerized and partially computerized banks is widening. Managing bank profitability in economic downturns must be improved.
*Assistant Professor, Department of Management Studies, Anna University of Technology, Tiruchirappali – 24. E-mail [email protected] Mobile 9994657523
**Final Year MBA, Anna University of Technology, Tiruchirappali – 24. E-mail [email protected] Mobile 9566583885
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E-BANKING PRACTICES AND CUSTOMER SATISFACTION - AN EMPIRICAL
STUDY
S.P. DHANDAYUTHAPANI, Assistant Professor, Department Of Management Studies, Anna University Of Technology, Tiruchirappalli – 620 024, India. e-mail – [email protected]
C. THIRUMAL AZHAGAN, Assistant Professor, Department Of Management Studies, Anna University Of Technology, Tiruchirappalli – 620 024, India. e-mail – [email protected]
INTRODUCTION
In the post liberalized era, the banking sector has witnessed sweeping changes due to
aggressive infusion of information technology. For the banks, Information Technology has
emerged as a strategic resource for achieving higher efficiency, control of operations,
productivity and profitability. For customers, it is the realization of their ‘Anywhere,
Anytime, Anyway’ banking dream. This has prompted the banks to embrace technology to
meet the increasing customer expectation. Information Technology has made the banking
services faster, more efficient, and more economical. Its impact can be seen on the efficiency
of banks’ productivity, profitability, employment and psychology of customers. The Internet
is taking banks in the directions beyond other than loans and deposits. With the introduction
of Information Technology, banking in India will never be the same again.
STATEMENT OF THE PROBLEM
The Indian Banking Industry has undergone radical changes due to liberalization and
globalization measures undertaken since 1991. Today, Indian Banking Industry is one of the
largest service sectors in the world. There has been a great surge in efficient customer
services. A highly satisfied and delighted customer is a very vital non-financial asset for the
banks in the emerging Information Technology era. The courtesy, accuracy and speed are like
a crown factors for a bank. Economic reforms and the entry of private players have seen
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nationalized banks revamp their services and product portfolios to incorporate new,
innovative customer-centric schemes. Nowadays, due to the increase in competition,
customer satisfaction is considered to be the core aspect in banking services.
A customer always wants something and expects that the bank should come up to the
level to fulfil those needs. Service quality is about meeting customers’ needs and
requirements, and how well the service level delivered matches customer expectations.
Service quality in banking implies consistently anticipating and satisfying the needs and
expectations of customers. The revolution of Information Technology has influenced almost
every facet of life, among them is the banking sector. The introduction of electronic banking
has revolutionized and redefined the ways banks were operating.
As technology is now considered as the main contribution for the organizations’
success and as their core competencies. So the banks, be it domestic or foreign are investing
more in providing on the customers with the new technologies through e-banking i.e.,
Internet Banking and E-commerce.
E-banking is a major innovation that has changed the way bank conducting its
business worldwide. Banks are reorienting their strategies towards new opportunities offered
through e-banking. The recent trend shows that most ‘brick and mortar’ banks are shifting
from a ‘product-centric’ model as they develop their new e-banking capabilities. PC
banking, mobile banking, ATM, electronic funds transfer, account to account transfer, paying
bills online, online statements and credit cards are the services provided by banks. Also the
feature which is commonly unique to internet banking includes importing data into personal
accounting software.
Some online banking platforms support account aggregation to allow the customers to
monitor all of their transactions from any corner of the world. Banking through internet is
considered as a complimentary delivery channel for the services rather than a substitute for
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the brick and mortar banking branches. Thus, e-banking is a strategy to sustain competition in
both domestic and foreign banks.
E-banking services not only can create new competitive advantages, perhaps, but also
can improve their relationships with customers for banks. Obviously, e-banking can offer
better services required by corporations and individuals, it could be a strategic niche no
matter for banks or their customers. How to implement e-banking and is becoming a critical
important issue. The factors affecting customer satisfactions with e-banking is an essential
part of a bank's strategy formulation process in and it has become imperative for both public
and private sector banks to perform to the best of their abilities to retain their customers.
Many a times it happens that the banks fail to satisfy their customer which can cause
huge losses for banks. In India, there is less number of studies being conducted to identify
how effectively the online channels are used by banking industry to increase customer
satisfaction. Therefore, the main focus of the study is to examine the e-banking services and
analyze the overall satisfaction of the customers regarding the e-banking services of the
public and private sector banks in Thanjavur district of Tamilnadu, India.
SCOPE OF THE STUDY
Retaining customers is a financial imperative for Indian banks, especially as attracting
new customers is considerably more expensive. In increasingly competitive markets, to build
loyalty in consumers is the key factor in winning market share and developing sustainable
competitive advantage.
Undoubtedly e-banking is the technological wonders and is gaining popularity in
banking transactions and it is important for banks to encourage customers to use e-banking.
Banks-trusted business service providers, have the opportunity to leverage their existing
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relationships to provide full range of high quality trusted internet business services to their
customers.
Hence, this study throws light on the e-banking services provided by the banks in the
study area and this research study makes an attempt to analyze how banks are attracting the
various customers and how the customers are satisfied with the e-banking services provided
by the banks. This study will be helpful to draw up further policy for improving customer
satisfaction with e-banking practices and act as a secondary data for further research.
OBJECTIVES OF THE STUDY
The research objectives of study are:
1. To analyze the e-banking practices and services in Thanjavur District
2. To study the extent of awareness and the usage of e-banking services by customers in
the study area.
3. To ascertain the customer satisfaction on the various e-banking services provided by
public and private sector banks in Thanjavur District.
4. To identify the impact of demographic variables on customer satisfaction towards
e-banking practices.
5. To analyse the problems and prospects of e-banking services in the study area and to
test the following hypothesis:
Hypothesis:
H1: The factors-accessibility, convenience, privacy, security, design, content, speed
and fees and charges have positive relation with customer satisfaction;
H2: There is no difference in the e-banking services rendered by public sector banks
and private sector banks; and
H3: Democratic variables have no influence over the customer satisfaction on e-
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banking services.
METHODOLOGY
The study is of descriptive in nature. Survey method was used for the study to
examine the customer satisfaction towards e-banking practices and services in public and
private sector banks located in Thanjavur District of Tamilnadu. Both primary and secondary
data were used for the study.
Sampling:
Multi stage sampling technique was followed for the study. At the first stage,
Thanjavur district was purposely selected as it is a representative district of Tamil Nadu and
two main towns in the district namely, Thanjavur and Kumbakonam were selected for
indepth study. In the second stage it the two leading banks having large net work of branches
– one from public sector and another from private sector namely State Bank of India and
ICICI Banks were selected to assess their e-banking services and also, two branches, one
from Kumbakonam and another from Thanjavur were selected as sample representing each
of the two banks taken for the study.
In State Bank of India, there were 3943 in Thanjavur and 2297 customers
Kumbakonam using e-banking services, and the number of customers for ICICI bank were
1628 and 1229 in Thanjavur and Kumbakonam respectively. The sample size was calculated
to guarantee a sufficient number of respondents in each bank branch. Thus, the following
formula was used to estimate the population sample size (The Survey System, 2007):
t² * p * (1-p) Minimum Sample Size (n) = −−−−−−−−−−−
m² Where: n = required sample size (minimum size) t = Confidence level at 95% (standard value of 1.96) p = Estimated fractional population of subgroup m = Margin of error at 5% (standard value of 0.05)
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As per the formula, the required sample size is 253 customers from SBI and 116
customers from ICICI Bank. Therefore, sample size of 160 and 93 customers from SBI and
66 and 50 customers from ICICI bank in the respective branch of Thanjavur & Kumbakonam
are determined on the basis of proportionate to the total customers.
With the help of the respective bank officials a list of customer respondents using e-
banking services was prepared.
Primary data were collected with the help of pre-tested structured questionnaires from
the sample selected for the study.
MAIN FINDINGS OF THE STUDY:
Measuring customer satisfaction is paramount importance for improving service
quality and retaining customers on a long-term basis. The study demonstrates that there are
eight factors that affect satisfaction with regard to e-banking services in the study area. The
study reveals that the insufficient number of ATMs, Improper location of ATMs, not
maintaining adequate cash with full denomination, security concern, connectivity, fees and
charges, frequent out of order of ATMs, restriction for use other cards are some of the major
problems faced by the e-banking users in the study area. Customers have difficulty in
precisely defining expectations pertaining to their interaction with websites. The researcher
has given various recommendations to the Indian banking sector to improve customer
satisfactions. As such, to foster customer loyalty to a website, managers must (a) develop a
thorough understanding of how customers assess e-Service Quality, and (b) implement
systems to detect and eliminate information, design, and communication gaps. This study will
also be helpful to draw up further policy for improving customer satisfaction with e-banking
practices and act as a source for further research.
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CONCLUSION
E-banking has become a necessary survival weapon and is fundamentally changing
the banking industry worldwide. Today, the click of the mouse offers customers banking
services at a much lower cost and also empowers them with unprecedented freedom in
choosing vendors for their financial service needs. No country today has a choice-whether to
implement E-banking or not given the global and competitive nature of the economy. Banks
have to upgrade and constantly think of new innovative customized packages and services to
remain competitive. The invasion of banking by technology has created an information age
and commoditization of banking services. Therefore, E-banking has become a strategic
weapon for banks to remain profitable.
References:
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Parasuraman, A., Ziethaml, V.A. and Berry, L.L. ‘A Conceptual Model of Service Quality and its Implications for Future Research’, Journal of Marketing, 49 (Autumn 1985) 41-50
Parasuraman, A., Ziethaml, V.A. and Berry, L.L. ‘Refinement and reassessment of the SERVQUAL dimensions’, Journal of Retailing, 67 (winter 1991) 420-450
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Rathmell, J.M. Marketing in the Services Sector: Cambridge, Winthrop 1974
Shostack, G.L. ‘Breaking Free from Product Marketing’, Journal of Marketing, 41 ( April 1977) 73-80The Association of Consulting Engineers Client Guide, Thomas Telford, 1999
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TECHNOLOGICAL IMPACT ON BANKING OPERATIONS – A REAL TIME CHALLENGE
Dr. M. SELVACHANDRA, S.P. DHANDAYUTHAPANI Associate Professor, Assistant Professor, Dept. Of Commerce, Dept. Of Management Studies, A.D.M. College for Women, Anna University of Technology, Nagapattinam 611 001. Tiruchirappalli 620024.
The banking industry in the world hid, has undergone a very great transformation, since the early 1990s. The changed operating environment for the banking sector, due to by globalization, deregulation and advances in IT, has resulted the extreme competitive pressures among the banks. Banks have responded to this challenge by diversifying through organic growth of existing business as well as requisitions. This has exposed in the banking sector to newer risks and posed serious regulatory challenges. In recent days, the technology is occupying s predominant role in banking sector. Reduction of cost and quick delivery of financial services have witnessed to using the technology in banking sector. In globalization era, Indian banking industry has also been forced to switch over the business through technological modes. The concept of banking in India has drastic changes in term of a business dealing with money transactions and business related information on financial transactions. IMPACT OF IT ON BANKING PRACTICES IT has a lot of influences on banking sector. It is a key factor for developing new products and services. It helps in handling higher volumes of transactions and meeting the demands of customers’ expectations. Beyond that providing information for both management and customers in the vital part of IT as for as banking sector is concerned. CBS Banks in India has started to visualize the impacts of IT by CBS. Today, IT has been employed as a key factor for developing an appropriate product and using as a mode for delivery switch service. IT has acted as backbone to the private banking sector which they entered to the financial market, with full-fledged activity. CBS has opened up with new pleasing views for banks to offer a lot of facilities to its customers, such as anywhere banking, 24X7 banking etc. Customers are feeling free instead of their attachment with particular branch alone. They can take banking services from anywhere in the world. ANY TIME MONEY By establishing Automated Teller Machines (ATMs), banks provide any time money to its customers. For that, a plastic coded card issued with full information of customers. A separate Personal Identification Number (PIN) also given for recognize the authenticated persons of a card holder. Through this card, a customer can make mobile
recharging, retail shopping, e-ticketing, payment of LIC premium, verifying the balances, ministatement and deposit cash. ECS ECS is the correct solution for bulk and repetitive payment transactions like salary, pension, interest, commission and dividend by the organization. Through this, postal delays, wastage of stationery are reducing. Customers are also benefited by automatic reconciliation and effortless receipts. TELEBANKING Customer can get answer from Automatic Voice Recorder (AVR) for simple quires and manned phone terminals for complicated queries. MOBILE BANKING BANKET It is communication network established by RBI on the basis of recommendation of the committee headed by T.N.A. Lyre. Applications of BANKET
• Quick settlement of transactions • Improvement in customer service • Easy transfer of data to RBI • Useful in dealing of Foreign exchange
INTERNET BANKING It enables the customer do the banking from his/her home through bank’s website. Customers can avail banking products and services through PC while sitting in office or home. It is otherwise called as virtual banking. All transactions are maintained with 100% confidential. VOICE MAIL Foreign banks are offering this IT facility by touch tone telephone answering service. Customers are allowed to leave a message for the concerned desk or department, if the person is not available. MULTI APPLICATION SMART CARDS This cards heaving a chip, which store information permanently, or may be subject to charge. It able to consolidate multiple applications in a single dynamic card. This card can be functioned as an identity card, as driving card, as health card and also for other funds related purposes.
IT SERVICES FOR BANKS Part form the customers, IT offers more number of services for management of banks. The system provided that Negotiated Dealing System (NDS) for Govt securities, the Real Time Gross Settlement System (RTCGs) and the Centralized Funds Management System (CFMS) [apart from the Structed Financial Messaging System (SFMs) over the Indian Financial Network(INFINET)] and National Electronic Funds Transfer System. Improvements in programming of NDS has resulted to minimize the processing times for banks. The secured internet website has been linked to the Online Return Filing System (ORFS) using an extensible business reporting language (XBRL) structure to facilitate a single stop reporting by banks. CHALLENGES A HEAD IN IT
• Vasting challenges in technologies • Risks related to software, security, technology • Enterprises Resource Planning • Imbalance structure of various organizations
PROSPECTUS FOR IT
The following initiation may be taken for smooth offering of various services
• Internet, Intranet and Extranet • Data warehousing and Data mining • Structure data uploading and data processing • Monitoring / Generation of statement by controlling offices • Single Window System • Call centers for Customers Relationship Management
CONCLUSION IT offers incredible services to both customers and Bankers, the effectiveness and efficiency lies the way in which the banks make use of these technologies, for improving the services offered to their customers. But the other side, the success of the IT is based on customer perception on banking services. In real time customer are computer illiterate and they are unaware the new way of banking services provided using IT technology and still they wasting time in waiting lines. So this is an appropriate time for the banking people to create awareness among the customers on how to make use of these e-banking services and to enjoy its benefits. And if bankers adopts these strategies in their banking services, will be a Midas touch for the entire banking sector