An Exploratory and Descriptive Study of Online, Offline and both Consumer Banking

An Insight into Consumer Behavior

Report On

Submitted To: Prof. GuruprasadBy: Prajakta Patil

Mayuri Negi Surbhi JindalSumit Shinde

Karthik MysoreSonia Grover

Abstract

• Study has been done in Thane, Mulund, Karjat, Ghatkopar, Kolkata, Juhu, Marine Drive.

• Age Prospect – 20 to 70• Sample Size – 360• People of age 30 - 45 preferred online services • People above age of 45 preferred offline

services

Executive Summary

• Growth of E-commerce• Cost saving • Increased customer satisfaction• Raised issues

• Kotler(1994) -Consumer behavior is the study of how people buy, what they buy, when they buy and why they buy.

• Legal and regulatory issues• Security and technology issues• Supervisory and operational

issues

IntroductionBanking Industry in INDIA• 26 public, 20 private, 43 foreign banks.• 61 regional rural banks and 90,000 credit

cooperatives.Indicators 2011 2012 2013Number of Commercials Banks 163 169 151

Number of Branches 94,019 102,377 109,811Population per Banks (in thousands)

13 13 12

OBJECTIVE

To understand the modern trend of consumer banking practices and is there any co-relation between online & offline services.To analyze the usage pattern of mostly used net banking services.HYPOTHESIS:H1: Customer preferences of using bank services are different in Tier1, Tier2, Tier3 sub citiesH2: Perceived ease of usage of banking service has no impact on their age.

LIMITS OF THE SURVEY

Sub Cities covered :Tier1- Ghatkopar, Pune,Kolkata, Nariman PointTier2-Thane,AndheriTier3-Badlapur, Karjat

SAMPLE SIZE- 360

TOOLS:

Mixed Questionnaire – whereby direct in person or (face o face) questions were asked and responses were obtained.

Research Design:

The present research is designed to study certain important consumer behavior in their banking practices i.e., online, offline or both and how it is related to the sub cities, age, marital status they belong.

 PROCEDURE• Data collected from 360 people belonging to

Tier1, Tier2, Tier3 sub cities.• Voluntary participation, importance of sincere

responses were stressed.• Initially participants filled personal data

sheet. Later, were given clear instructions on how to answer.• Clarified doubts to ensure everyone

understood procedure.• No time limit imposed.• Administration done carefully.

Proposed Developments

• Development of E-banking/ Digital banking Eg. Basel 3• Opening new bank branches in rural area -

Large Customer base. Convenient services for people like deposit

from home – Ease of use for all the account holders.

A bank that avoids "one-size-fits-all products“.• “Aadhar Jan Dhan” schemes (PMJDY) -

Financial Inclusion

METHODOLOGY

How you carried out your enquiry.

What form did your enquiry take ? Did you carry out interviews or

questionnaires, how did you collect your data ? What measurements did you make ?

To Answer this:- DATA Collection Methods Used

Survey

Primary Source

Secondary Source

Questionnaire Method• Questions:-17• Parameters:- 5• (Age, Gender, Occupation,• Perception & Online/Offline)• Total sample:-360

Literature Review

• Published Research Papers & Articles E.g KPMG.

• International Journals

RESEARCH FINDINGS1) In Tier1 Cities, it is observed that the preferences of people are in descending order i.e., highest towards (both online and offline) banking methods then offline and then online banking methods.2) In Tier 2 Cities, the same trend is observed in their preferences towards banking methods.3) In Tier 3 Cities, it is observed that the preferences of people are in descending order i.e., highest towards offline method then (both online and offline), and then towards offline banking methods.

Result findings

(i) Consumers feel that Internet banking is easier compared to conventional banking(ii) Conventional banking lacks speed especially in case of public sector banks and(iii) Ratings on various parameters are comparatively higher in case of frequent users and high-income groups.

Discussion• Problem formulation Tier 1 cities have both private sector and public sector bank functioning. The primary aim is to understand how the internet banking services are different from traditional banking services in terms of accessibility, technological awareness and time and their preference in different cities (tier2, tier3).

• Management problem 1.Internet technology holds the key for customers

banking services. 2. Customer preferences on accessing net banking

services.

• Research problem 1. To determine the customer preference on online and offline services. 2. Evaluate the usage of customer online banking services. 3. To evaluate the online banking penetration among different age groups.4. To determine the effect of parameters on banking preferences.

Conclusion:E-banking in India is at primitive stageDominated by Foreign banks and private

banksIncorporates high riskConsumers feel that Internet banking is

easier compared to conventional banking(F=89.188)

Conventional banking lacks speed especially in case of public sector banks

trust, safety and confidentiality are of paramount importance

trust is interestingly found to be a major area of concern.

Lesser variances are obtained for speed(F=13.174) and customization(F=10.167)

professionals are more frequent(6.5%) than graduates(1.6%) but less than post-graduates(9.3%)

Shockingly, Graduates(37.11%)are more towards online banking than professionals(5.6%)are.

Recommendations:• Bank of the future will need to understand

the Tech-Savvy Gen-Y customers and design products accordingly

• Focusing on building trust (F=38.932) along with safety and confidentiality.

• Use of data analytics tools to gain the insights from existing customers’ data to increase business and customer loyalty.

• Partner with multiple agencies to reach target audience (women as well men)

• Use of iOS and android platform to design better, faster and convenient delivery channels.

• Structure business model to suit Indian conditions

Bibliography• Lal R., Salu R., Asia Pacific Journal of Marketing $ Management

Review ISSN 2319-2836 Bol.1(4), December 2012 • Habib S., Research Journal of Management Sciences ISSN 219-

1171 • Vol.1(3), 20-24, October 2012 • Crisil Research Article Online Retail Feb14 • India online retail market forecast -Research and Markets

Brochure • India Retail Trends 2014 • Key Statistics- 1,2,5 – India Retail sector report 2013 – Michael

Page

Thank you!