chapter- 5 impact of electronic banking on...

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CHAPTER- 5

IMPACT OF ELECTRONIC BANKING ON SERVICE QUALITY OF

INDIAN BANKS

5.1 Conceptual Framework

5.2 Service Quality Conceptualization and Operationalisation

5.2.1 Managing Service Quality

5.2.2 Measuring Service Quality in Banking Sector

5.2.3 Electronic Banking and Service Quality

5.3 SERVQUAL SCALE

5.4 Various Dimensions of Service Quality for Drafting Research Instrument

5.5 Items of Final Draft of the Research Instrument

5.6 Descriptive Analysis

5.6.1 Customer Profile

5.6.2 Relationship of Customer with Banks

5.6.3 Cross Tabulation in Demographic Variables

5.7 Respondents’ Opinion Regarding Different Electronic Banking Services

5.8 Exploring the Relationship between Service Quality and E-banking

5.9 Service Quality Level of Banks Using SERVQUAL Model

5.9.1 Identification of Nine Service Quality Factors

5.10 Level of E-banking Services offered by Different Banks

5.11 A Comparison of Customer Satisfaction in Public Sector and Private Sector Banks


5.11.2 Comparative Service Quality Analysis of Public and Private Sector Banks

Using SERVQUAL Model

5.11.3 Comparative Analysis of E-banking Services in Public and Private Sector

Banks

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CHAPTER-V

IMPACT OF ELECTRONIC BANKING ON SERVICE QUALITY OF

INDIAN BANKS

The bank customers play a vital role in the banking sector. They are the key

players of the banking industry and all the efforts are made by the banks to satisfy the

desirable needs of the customers. In the present chapter, an attempt has been made to get

the opinion of the bank customers regarding electronic banking services. The chapter has

been divided into four sections. Section-I deals with the conceptual framework of service

quality with its meaning, various SERVQUAL dimensions, theoretical framework and

how electronic banking has improved the quality of service in the banking sector.

Section-II deals with the demographic information of the respondents. Section-III

examined the various service quality dimensions and the customers’ satisfaction towards

electronic banking. Section-IV deals with comparative analysis of public and private

sector services to frame out an opinion as to which sector is providing qualitative and

efficient services to the customers.

SECTION-I

5.1 Conceptual Framework

Indian banking industry has suddenly witnessed a major boom. Being a

globalized market, the customers seek and demand world class products. In today’s

global market, the competitive advantage lies in delivering high quality service to the

customers. The need to achieve customer satisfaction lies in its ability to deliver better

quality products to the customers. Therefore, customer satisfaction is considered as a

pre-requisite for customer retention, loyalty and convenience which ultimately helps in

realizing the goals of profitability, market share, growth, return on investment,

productivity etc. Service quality is one of the highly debatable topic in marketing theory.

There is a wide range of literature on customer satisfaction and service quality though

both are different concepts but are closely related to each other. In order to judge the link

between two, a deep study of both concepts is required. So, the chapter strongly

emphasized on the various factors of service quality and customer satisfaction so as to

examine the relationship between service quality and customer satisfaction.

5.2 Service Quality: Conceptualization and Operationalization

Quality is a concept which requires a concern both in products as well as in

services. Various experts have defined it as “fitness for use”, “conformance to

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requirements”, “freedom from variation” etc. To market a product, quality plays a pivotal

role to sell a product. In fact, quality is considered as most important factor that influence

on the buying behavior of the customer. Now the question arises to measure quality of

service or a product. In tangible goods like products, quality can be measured by its

durability and number of defects, usage of product, packaging, handling etc. However

measuring the quality in intangible is a different one. As services are intangible so they

are very difficult to measure. Services have a lot of intangible dimensions like

communication, credibility, security, competence, reliability, responsiveness which are

qualitative by nature and their value is subjective. Service quality is an abstract and

elusive construct because of 4 unique features of services.

1. Intangibility (Bateson, 1977)

2. Heterogeneity (Booms and Bitner, 1990)

3. Inseparability (Carman & langeard, 1980)

4. Perishability(Stanton, J. William 2004)

Services are those economic activities that typically produce an intangible

product such as education, entertainment, food & lodging, transportation, insurance,

trade, government, financial, real estate, medical, repair & maintenance etc. Intensified

competition and deregulation has led many services and retail businesses to seek

profitable ways to differentiate them; one strategy that has been related to success in

these businesses is the delivery of high service quality (Rudie and Wansley 1985). So

service quality has become a significant research topic in past decade due to high

revenues, increased cross sell ratios, higher customer retention, purchasing behaviors

(Cronin and Taylor 1994) and expanded market share.

An analysis of service quality literature suggests four underlying themes:

(a) It is more difficult to evaluate than quality of tangible goods.

(b) Evaluation of quality is not made solely on the outcome service, they also involve

the evaluation of the process of service delivery (Parasuraman, Zeithamal &

Berry 1985).

(c) Service cannot be separated from the creator of service. These are created,

consumed and dispensed at the same time.

(d) Although the services are intangible but through visualization, association,

physical representation and documentation; intangibility of the services can be

improved.

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So product and service quality, customer satisfaction and company profitability

are inter-related with each other. Higher the quality level, higher will be the customer

satisfaction which support high prices and low costs which in turn will help in improving

the company’s profit.

5.2.1 Measuring the Service Quality

Service providers must understand two attributes of service quality. Firstly, the

quality is defined by the customer and not by the product seller. Secondly, customers

assess service quality by comparing their expectations to their perception of how the

service is performed. In this process, there is no guarantee that expectations will be

reasonable, nor there is any assurance that a customers’ perception of performance will

be based on more than a single experience. However to deliver better quality services to

the customers, it is required that services must be standardized and for standardizing the

quality of a service, the delivery of the service must be substituted with machines

wherever possible. For example, ATM machines, websites and mobile banking gives the

same kind of services to all the customers irrespective of any human biasness in

delivering the service and at the same time the machine will not suffer from any fatigue,

forgetfulness and stress. But if the customer is not adapt at surfing the internet, forgets

the required ATM pin number and become impatient with the branch process on a

recorded telephone answering system than the quality of the service will hamper and

inconsistent. So, despite of standardization and reliability of machines, this is one fact

that may explain why internet shopping accounts for merely 2% of the total retail sales.

So, it could be judged that although quality could be standardized by using machines but

at the same time it depends upon the customers adaptation and willingness that how

much the customer is patient, aware and satisfied with the machines in place of humans.

This is one of the reason that despite of total automation in the banking sector still

human resource play a vital role in delivering and explaining the service.

5.2.2 Measuring Service Quality in Banking Sector

Customer is the kingpin for the development of trade, industry and service sector

particularly in financial services. So, the significance of customer service in the banking

sector came to force to compete in a market driven environment. Measuring service

quality in the service sector particularly in the banking sector is more difficult than

measuring the quality of manufactured goods. The service sector as a whole is very

heterogeneous and what is heterogeneous may hold true for one service and may not

hold for another service sector. For example, the nature of banking services is very

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different provided by a hospital and hotel. In fact, in banking industry there are a variety

of services like retail banking, corporate banking, investment banking, commercial

banking, personnel banking, wholesale banking, internet banking etc. Each banking is

having a variety of services. Due to this differentiation, services in this industry could

not be standardized, moreover these services are intangible in nature which could not be

compared or seen.

The concept of customer satisfaction and service quality is interrelated with each

other. Moreover satisfaction of customer depends upon service quality and service

quality is increasingly offered as a strategy by marketers to position themselves more

effectively in the market place (Parasuraman et.al 1988; brown and Swartz 1989; Cronin

and Taylor 1992). Due to the era of e-banking quality of service has been improved a lot

as compare to traditional banking services. Internet banking, Mobile banking, automated

teller machine, electronic fund transfer has totally changed the way of providing services

by the banks. However some banks like in private sector are providing it in a very

efficient way while others are making efforts to adopt it.

5.2.3 Electronic Banking and Service Quality

As customers become more sophisticated, therefore, it becomes essential to

consider the use of technology to respond to their continuously change. Banking is an

industry highly which is highly involved with the customers. Customers in developing

economies seems to keep the “technological factors” of services as the yardstick in

differentiating good & bad services and the human factor – the employees seem to play a

lesser role in discriminating the quality of service for banks. The variation in services

offered by the banks develops the excellence for service quality. Banking is no longer

regarded as a business dealing with money transaction alone, but it also seem as a

business related to information on financial transaction (Padwal 1995). Customers

whether at the corporate level or at retail level have always been important for the banks.

As electronic banking is becoming more prevalent, so level of customer satisfaction is

also changing the scenario of technological environment.

Informational technology in form of e-banking plays a significant role in providing

better services at lower cost. Several innovative IT based service such as Automated

Teller Machine (ATM), Internet banking, Smart cards, Credit Cards, Mobile banking,

Phone banking, Anywhere-Anytime banking have provided number of convenient

services to the customer So as the service quality improves, the probability of customer

satisfaction increases. Increase satisfaction in turn increase the mutual understanding,

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customer retention and a bond of trust between customer and bank. The banks which are

providing these services at large extent to customers are more reputed in the eyes of

customers. But at the same time technology based product is different in public and

private sector banks. Bank automation and electronic banking is fast in private sector

comparative to public sector.

E-banking is an improvement over traditional banking system because it has

reduced the cost of transaction processing, improve the payment efficiency, financial

services and improve the banker-customer relationship. The relationship between e-

banking and service quality can be studied with the level of satisfaction. As the customer

satisfaction is the function of customer expectation level and service quality level

provided by the organization. E-banking plays a pivotal role in giving satisfaction to the

customers because e-banking fills the gap between the expected and perceived service

quality. So in order to fill this gap, banks should find ways of making electronic services

more accessible and by allowing the customer to verify the accuracy of the e-banking

transactions.

There are number of reasons due to which customer satisfaction due to e-banking

has improved.

1. Customer can withdraw funds, transfer funds anytime, anywhere they want.

2. Accessibility has been extended through technological development as it allows

customers to do business from their home and office.

3. It makes the banking activities and transaction very simplier to understand

4. There is no requirement of direct control with bank, as services can be operated

wherever customer wants.

5. It has reduced the waiting time of the customer; no long queue standing is required.

6. Availability of employees at all times is not required as these services are provided

24 hours a day, seven days a week.

7. Internet based services has enabled the corporate and retail customers to transact

from home, office and traveling.

8. Online fund transfer enabled the customer to transfer funds from one bank to another

or within the same bank at same time.

9. Communication, interaction between the bank and customer has been improved due

to e-banking.

On the whole we can say that e-banking has become pre-imminent method of

carrying the banking transaction and to increase the customer satisfaction. With the

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present chapter an effort has been made to analyze the impact of e-banking on customer

satisfaction with servqual dimension.

5.3 SERVQUAL Scale

For the measurement of impact of e-banking on service quality, a model named

SERVQUAL was developed by Parasuraman (1988). The model consists of ten

components. SERVQUAL provides a technology for measuring and managing service

quality (SQ). When the technology was first published, its innovators Parasuraman,

Zeithamal and Berry have further promulgated and promoted the technology through a

series of publication (Parasuraman et. al.1988; 1991(a); 1991(b); 1994). Zeithamal et. al

(1990; 1991;1993) (Buttle1995). Servqual fills a gap between what the customer expect

by way of SQ and what he is actually getting. SQ is presented as a multi dimensional

construct. In the original formulation Parasuraman et. al (1985) identified ten

components of SQ. Each dimension has further four-five dimensions

(1) Reliability involves consistency of performance and dependability. It also means that

the firm performs the service first time and honours its promises. Specifically, it involves

the following.

• Accuracy in billing

• Keeping records correctly

• Performing the service at designated time

(2) Responsiveness concerns the willingness or readiness of employees to provide

service. It involves timeliness of service.

• Mailing a transaction slip immediately

• Calling the customer back quickly

• Giving prompt service (e.g., setting of appointments quickly)

(3) Competence means possession of the required skills and knowledge to perform the

service. It involves:

• Knowledge and skill of the contact personnel

• Knowledge and skill of operational support personnel

• Research capability of the organization.

(4) Access involves approachability and ease of contact. It means :

• The service is easily accessible by telephone

• Waiting time to receive service at bank is not extensive

• Convenient hours of operation

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• Convenient location of service facility

(5) Courtesy involves politeness, respect, consideration and friendliness of contact

personnel (including receptionists, telephone operators. It includes:

• Consideration for the consumer’s property

• Clean and neat appearance of public contact personnel

(6) Communication means keeping customers informed in language they can understand

and listening to them. It may mean that the company has to adjust its language

according to different customers-increasing the level of sophistication with a well

educated customer. It involves:

• Explaining the service itself

• Explaining how much the service will cost

• Explaining tradeoff between service and cost

• Assuring the consumer that a problem will be handled

(7) Credibility involves trustworthiness, believability, honesty. It involves having the

customer’s best interests at heart contributing to credibility are:

• Company name

• Company reputation

• Personnel characteristics of the contact personel

(8) Security is the freedom from danger, risk or doubt. It involves:

• Physical safety

• Financial security

• Confidentiality

(9) Understanding involves making the effort to understand the customer’s needs. It

involves:

• Learning the customer’s specific requirement

• Providing individualized attention

• Recognizing the regular customer

(10) Tangibles include the physical evidence of the service. It includes

• Physical facilities

• Appearance personnel

• Tools or equipment used to provide the service

• Physical representation of the service, such as a plastic credit card or a bank

statement

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• Other customers in the service facility

(Modified from Buttle 1995.)

In their 1988 work these ten dimensions were reduced to five dimensions as follows

Dimensions Items in scale

(1) Reliability 4

(2) Assurance 5

(3) Tangibles 4

(4) Empathy 5

(5) Responsiveness 4

The above mentioned scale was originally developed by Parasuraman in 1985.

But in the present chapter, in order to have wide coverage of the study, the ten

dimensions are taken in to consideration. One of the dimension namely courtesy is

having only one sub dimension, so factor analysis and data reduction was not possible

for single variable. So, it was merged in to the main dimension of understanding. In

order to know the impact of electronic banking on service quality, a questionnaire has

been developed. It consists of 43 items related to service quality.

Various Dimensions of Service Quality for Drafting of Research Instrument

Reliability

1 It provides accuracy in billing.

2 It helps in keeping records correctly.

3 It performs the service at designated time.

Responsiveness

4 E-banking is very necessary for the development of new economy of India.

5 It improves the quality of customer service.

6 Response of service through e-banking is very prompt and quick.

7 Availability of service is faster in e- banking as compare to manual banking.

Competence

8 Transfer of fund is easier through E-banking.

9 E-Banking provides more punctuality, transparency, accountability.

10 Transfer of funds is faster as compared to manual banking system.

11 It is trusted by young generation.

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Access

12 E-Banking services are accessible via Internet banking, Mobile banking, EFT,

ECS, ATM.

13 Online purchase of goods and services including online payment is easier.

14 It provides convenient location of service facility(location of ATM, POS terminals)

15 It reduces the waiting time to receive the service.

Courtesy

16 It helps in better customer relationship, attracting and retaining them.

Communication

17 E-Banking explains the service itself.

18 It explains the cost of service being used.

19 It assures the customer that problem will be handled.

20 It explains the trade off between service and cost.

21 E-banking provides up to date information.

22 It also provides information for well educated customers.

23 E-banking provides effective medium of promotion of various schemes.

Credibility

24 E-banking increases the reputation of the banks.

25 It increases the believability, honesty and trustworthiness of the customers in

banks.

26 It ensures the ability to fulfill the requirement.

27 Degree of reliability involved in Interaction with customer is more in e- banking.

28 It provides unlimited network to the banks to approach customers.

Security

29 E-banking ensures physical safety of the transaction.

30 Password facility provides confidentiality to transaction.

31 It also increases the financial security.

32 Privacy can be easily maintained.

Understanding

33 It provides individualized attention to the customers.

34 It provides necessary information to the customers.

35 Website of the bank is designed according to the need of the customer.

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36 It ensures to provide necessary information to the customer.

37 E-banking learns the specific requirement of the customer.

Tangibility

38 Banks use advanced Computer/IT to serve clients.

39 E-banking provides modern looking equipment.

40 Physical representation of service through plastic card, credit and debit card is

easy.

41 E-banking provides 24 hours, 365 days a year service to customers.

42 It helps in reducing the no. of queues in the bank branches.

43 E-banking provides more physical facilities to the customers.

5.5 Items of Final Draft of the Research Instrument

S.No. Attitude Factor Item No. Total Items

1 Reliability 26,27,28 3

2 Responsiveness 29,30,31,34 4

3 Competence 13,23,24,25 4

4 Access 32,33,35,36 4

5 Courtesy 41 1

6 Communication 17,18,19,20,21,22,42 7

7 Credibility 37,38,39,40,43 5

8 Security 12,14,15,16 5

9 Understanding 7,8,9,10,11 4

10 Tangibility 1,2,3,4,5,6 6

Section-II

5.6 Descriptive Analysis

Descriptive analysis was done to present a profile of the respondents and also to

find out the mean score and standard deviation for the items in the banking SERVQUAL.


Respondents form an important component of the primary data survey. So it is

very essential that the personal profile of the respondents undergone a study. Descriptive

analysis was done to present the demographic information of the respondents .The

sample size consists of 400 respondents of various banks including public and private

sector. In order to have an effective banking policy and marketing strategy, it is required

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to study the customer profile as the customers are the milestone of banking business.

Sound banking system depends upon the sound customers having a good educational

ground and having a regular flow of income. So first section of questionnaire includes

the customer’s profile. The basic attributes of the respondents are income, age, sex,

occupation, educational qualification and other socio-demographic information. Table

5.1 to 5.7 presents a comprehensive profile of bank customers who had participated in

this research study. It can be seen from table 5.1, the sample consists of more males

(71.5%) than females (28.5%).There are more respondents who are married (62.8%) than

unmarried (37.3%). Majority of the respondents (52.5%) are in the age group of below

30 years and 27% are in the age group of 30-40 years. About 32.8% respondents are

post-graduate, 26.5% are graduates and 20.3% are having the professional degrees. This

profound that the sample is skewed towards the more educated segment of the

population. About 43.3% of the respondents are serviceman, 20.5% are businessmen

and 17.5% are professionist. 29.3% of the respondents are having the income more than

25,000 and 20% are having in between 10,000-15,000. 76.3% are having saving account

in the banks, 16.3% are having current account and 7.5% are having salary account.

Table 5.1

Gender Profile of the Customers

Gender Frequency Valid percent Cumulative Percent

Male 286 71.5 71.5

Female 114 28.5 100

Total 400

Table 5.2

Marital Profile of the Customers

Marital Status Frequency Valid Percent Cumulative Percent

Married 251 62.8 62.8

Unmarried 149 37.3 100

Total 400 100

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Table 5.3

Age Profile of the Customers

Age Profile Frequency Valid Percent Cumulative Percent

Below 30 210 52.5 52.5

30 -40 108 27 79.5

40-50 60 15 94.5

50-60 22 5.5 100

Total 400 100

Table 5.4

Educational Profile of the Customers

Education Frequency Valid Percent Cumulative Percent

Below Matric 7 1.8 1.8

Matric and Under Graduate 75 18.8 20.5

Graduate 106 26.5 47

Post Graduate 131 32.8 79.8

Professional Degree 81 20.3 100

Total 400 100

Table 5.5

Occupational Profile of the Customers

Occupation Frequency Valid Percent Cumulative Percent

Businessman 82 20.5 20.5

Serviceman 173 43.3 63.8

Professional 70 17.5 81.3

Agriculturist 21 5.3 86.5

Any other 54 13.5 100

Total 400 100

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Table 5.6

Monthly Income Profile of the Customers

Income Frequency Valid Percent Cumulative Percent

Below 10000 69 17.3 17.3

10000-15000 80 20 37.3

15000-20000 71 17.8 55

20000-25000 63 15.8 70.8

Above 25000 117 29.3 100

Total 400 100

Table 5.7

Type of Account

Type of Account Frequency Valid Percent Cumulative Percent

Saving 305 76.3 76.3

Current 65 16.3 92.5

Salary 30 7.5 100

Total 400 100

5.6.2 Relationship of Customers with the Banks

In order to investigate the relationship between e-banking and the level of

customer satisfaction, it was important to explore for how long respondents held their

accounts in the banks. Table 5.8 presents the historical perspective on the banking

relationship for the surveyed customer.

Table 5.8

History of Banking Relationship

Duration of the Banking

Relationship with the

Bank

Frequency Valid Percent Cumulative Percent

Less than 1yrs 58 14.5 14.5

1-3 yrs 104 26 40.5

3-5yrs 63 15.8 56.3

5-7 yrs 54 13.5 69.8

Above 7 121 30.3 100

Total 400 100

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The results in table 5.8 indicates that large number of respondents (30.3%) have

maintained a banking relationship with the banks for more than seven years and 26 per

cent of them have maintained such relationship between 1 to 3 years. However it could

be observed that there is relatively high degree of stability of those customers who had

maintained long term relationship with the bank they deal with. In order to retain a long

term relationship with its customers, the banks should adopt a diversified strategy by

providing them financing schemes with different portfolios, innovative banking products,

credit cards, internet banking, onsite and offsite ATMs, Mobile banking, PC banking etc.

to achieve a higher rate of growth.

5.6.3 Cross Tabulation in Demographic Variables

In order to understand relationship between demographic variables like age/sex,

education/occupation, type of account/ occupation etc, cross tabulation was carried out.

Table 5.9 to 5.15 exhibits the cross tabulation between different variables.

Table 5.9

Age/Education Wise Distribution of Customers

Educational Categories

Age

Group

E1 E2 E3 E4 E5

Total

Below 30 years

5 (71.42)

47 (62.66)

75 (70.75)

59 (45.03)

24 (29.62)

210 (52.5)

30 -40 0 (0.00)

16 (21.33)

22 (20.75)

44 (33.58)

26 (32.09)

108 (27)

40-50 2 (28.57)

4 (5.33)

9 (8.49)

21 (16.03)

24 (29.62)

60 (15)

50-60 0 (0.00)

8 (10.66)

0 (0.00)

7 (5.34)

7 (8.64)

22 (5.5)

N 7 75 106 131 81 400

N represents number of bank customer surveyed.

Note: Figures within parenthesis in this table and all the tables to follow represent

percentages while figures without parenthesis represent simple frequencies.

Table 5.9 depicts age-education wise distribution of the respondents. Age wise

respondents have been divided in to four age group, ‘below 30 years’, ‘30-40 years’, ‘40-

50 years’ and ‘50-60 years’. As is evident from the table as many as 210 (52.5%)

respondents are below the age of 30 years. Similarly, 108 (27%) fall in the age category

of 30-40 years, 60 (15%) in 40-50 years and 22(5.5%) in 50-60 years. So this shows that

the maximum category comes under the age group of below 30. Education wise the table

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reveals that majority of the respondents belongs to E3 (70.75%),E2 (62.66%) and E4

(45.03%) category are from the age group of below 30 years. A large proportion of

respondents from categories E4 (33.58%) and E5 (32.09%) belongs to 30 to 40 age

group.

Table 5.10

Age/Occupation Wise Distribution of Customers

Occupational Categories

Age

Group O1 O2 O3 O4 O5

Total

Below 30

62 (75.60)

86 (49.71)

36 (51.42)

13 (61.90)

13 (24.07)

210 (52.5)

30-40 11 (13.41)

53 (30.63)

19 (27.14)

8 (38.09)

17 (31.48)

108 (27)

40-50 8 (9.75)

27 (15.50)

10 (14.28)

0 (0.00)

15 (27.77)

60 (15)

50-60 1 (1.21)

7 (4.04)

5 (7.14)

0 (0.00)

9 (16.66)

22 (5.5)

N 82 173 70 21 54 400

Table 5.10 reveals age-wise /occupation-wise distribution of the respondents.

Occupation-wise the respondents have been divided in to five categories, i.e.,

Businessmen(O1),Serviceman(O2),Professional(O3), Agriculturist (O4), Any

Other(O5).The above table reveals that below the age group of 30, majority of the

respondents belongs to the category of businessman(75.60%), followed by O4(61.90%)

and O3 (51.42%). Further the majority of the respondents in category O4 (38.09%) and

O2 (30.63%) are in the age group of 30-40 years. 27.77 per cent of the respondents in O5

falls in the age group of 40-50 years.

Income-wise Distribution

Income-wise, the respondents surveyed have been divided into five income

groups on the basis of their family income, i.e., below Rs. 10,000, Rs.10000-15000,

Rs.15000-20000, Rs.20000-25000 and above 25000. The following table explains

income wise and education wise distribution of the respondents among such groups

respectively.

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Table 5.11

Income/ Education Wise Distribution of Customers

Educational Categories Income

E1 E2 E3 E4 E5 Total

Below10000 5 (71.42)

22 (29.33)

23 (21.69)

18 (13.74)

1 (1.23)

69 (17.25)

10000-15000 0 (0.00)

8 (10.67)

46 (43.39)

18 (13.74)

8 (9.87)

80 (20)

15000-20000 2 (28.57)

15 (20)

19 (17.92)

19 (14.50)

16 (19.75)

71 (17.75)

20000-25000 0 (0.00)

20 (26.67)

12 (11.32)

25 (19.08)

6 (7.40)

63 (15.75)

Above 25000 0 (0.00)

10 (13.33)

6 (5.66)

51 (38.93)

50 (61.72)

117 (29.25)

N 7 75 106 131 81 400

Table 5.11 explains income-education wise distribution of respondents.

Proportionately the major respondents (29.25%) belong to the income group of above

25000. Second category consist of respondents having income of Rs.10,000 to Rs.15,000

(20%), followed by Rs.15,000 to Rs.20,000(17.75%), Rs.20,000 to Rs.25,000(15.75%).

Education-wise the table reveals that 43.39 per cent of respondents from category E3

having income between Rs.10,000 to Rs.15,000.Further from category E5, 50 (61.72%)

respondents belong to the income group of above 25,000. E1 (71.42%), E2 (29.33%) and

E3 (21.69%) belong to the income below 10,000. However all the respondents from

category E1 either belong to income group below Rs.10,000 (71.42%) or Rs.15,000 to

Rs.20,000(28.57%).

Table 5.12

Income/Occupation Wise Distribution of Customers


Income O1 O2 O3 O4 O5

Total

Below10000 39 (47.56)

14 (8.09)

1 (1.42)

0 (0.00)

15 (27.77)

69 (17.25)

10000-15000 3 (3.65)

64 (36.99)

11 (15.71)

2 (9.52)

0 (0.00)

80 (20)

15000-20000 17 (20.73)

32 (18.49)

16 (22.85)

0 (0.00)

6 (11.11)

71 (17.75)

20000-25000 10 (12.19)

33 (19.07)

11 (15.71)

8 (38.09)

1 (1.85)

63 (15.75)

Above25000 13 (15.85)

30 (17.34)

31 (44.28)

11 (52.38)

32 (59.25)

117 (29.25)

N 82 173 70 21 54 400

132

Occupation wise, the above table reveals that majority of the respondents 59.25

percent in the O5 category having the income more than Rs.25,000. O4 (52.38%) and O3

(44.28%) also belong to the respondents having income above Rs.25,000. 38.09 per cent

of the respondents from O4 category belong to income group of Rs.20000 to Rs.25,000.

47.56 per cent respondents from O1 category and 27.77 per cent from O5 category are

having income below Rs.10,000.Further 36.99 per cent respondents from O2 category

are having income of Rs.10,000 to Rs. 15,000. However, all the respondents from O4

category having income of Rs.10,000 to Rs.15,000(9.52%), Rs.20,000 to

Rs.25,000(38.09%) and above Rs.25000 (52.38%).

Table 5.13

Education/ Occupation Wise Distribution of Customers


Education O1 O2 O3 O4 O5

Total

E1 5 (6.09)

0 (0.00)

0 (0.00)

0 (0.00)

2 (3.70)

7 (1.75)

E2 40 (48.78)

28 (16.18)

2 (2.85)

0 (0.00)

5 (9.25)

75 (18.75)

E3 24 (29.26)

61 (35.26)

13 (18.57)

2 (9.52)

6 (11.11)

106 (26.5)

E4 6 (7.31)

56 (32.36)

31 (44.28)

13 (61.90)

25 (46.25)

131 (32.75)

E5 7 (8.53)

28 (16.18)

24 (34.28)

6 (28.57)

16 (29.62)

81 (20.25)

N 82 173 70 21 54 400

Occupation wise table 5.13 reveals that 48.78 per cent businessmen are matric

and under-graduate. 35.26 per cent of bank customers from O2 category are graduate. In

the same category of serviceman that is O2; 32.36 per cent of the respondents are having

post graduate degree comes under the category of E4. 34.28 per cent of respondents from

O3 category having professional degree are having professional qualification also.

However, only 6.09 per cent respondents of O1 category and 3.70 per cent of O5

category comes under the category of E1 with only matric qualification.

133

Table 5.14

Sex/ Education Wise Distribution of Respondents

Educational Categories

Sex E1 E2 E3 E4 E5

Total

Male 5 (71.42)

59 (78.66)

71 (66.98)

83 (63.35)

68 (83.95)

286 (71.5)

Female 2 (28.57)

16 (21.33)

35 (33.01)

48 (36.64)

13 (16.04)

114 (28.5)

N 7 75 106 131 81 400

Table 5.14 reveals that in total 71.5 per cent respondents are males and 28.5 per

cent are females. However, proportion of male respondents are high in E5 (83.95%) and

E2 (78.66%) category. In females, the large proportion consist of E4 (36.64%) followed

by E3 (33.01%).

Table 5.15

Sex/ Occupation Wise Distribution of Customers

Occupation Categories

Sex O1 O2 O3 O4 O5

Total

Male 66 (80.48)

115 (66.47)

46 (65.71)

21 (100)

38 (70.37)

286 (71.5)

Female 16 (19.51)

58 (33.52)

24 (34.28)

0 (0.00)

16 (29.62)

114 (28.5)

N 82 173 70 21 54 400 Occupation wise, table 5.15 reveals that 80.48 per cent of male belongs to

business category, whereas all the agriculturist are male respondents. In the female

category, the major proportion was those who either belong to a service category or to a

professional category.

5.7 Respondent’s Opinion Regarding Different Electronic Banking Services

There are varieties of services offered by the banks through electronic banking.

Therefore ranking was done to judge the opinion of respondents regarding different

e-banking services.

13

4

Table 5.16

Reasons for Adoption of E-banking

(N=400)

Rea

sons

for

ado

ptio

n

Ran

k 1

R

ank

2 R

ank

3 R

ank

4 R

ank

5 R

ank

6 R

ank

7 R

ank

8

Ran

k 9

Ran

k10

WA

S

Ove

rall

Ran

king

D

etai

l Inf

orm

atio

n 76

84

51

23

28

20

32

30

8

48

6.58

2

Con

veni

ence

95

46

44

44

33

34

21

14

57

12

6.

61

1

Ris

k 30

41

30

41

56

90

10

30

28

37

5.

51

5

Cos

t 18

40

40

38

47

85

44

53

24

11

5.

56

4

Fast

est M

ode

61

23

28

42

76

53

52

33

18

14

6.03

3

Fund

s M

ovem

ent

10

18

29

56

66

66

59

37

39

20

5.14

6

Inte

rnet

Acc

ess

8 12

58

39

50

49

74

33

38

39

4.

95

7

Impr

oved

Ser

vice

18

42

27

25

33

35

47

85

58

30

4.

77

9

Any

time

Ban

king

51

42

30

27

8

10

42

41

93

56

4.87

8

Eas

y 33

40

45

19

20

9

24

49

34

127

4.46

10

Tab

le 5

.16

exhi

bits

tha

t th

ere

is a

wid

e di

verg

ence

of

cust

omer

’s o

pini

on r

egar

ding

e-b

anki

ng s

ervi

ces.

Wei

ghte

d av

erag

e sc

ore

was

cal

cula

ted

for

rank

ing

of s

ervi

ces.

It s

how

s th

at e

-ban

king

pro

vide

s co

nven

ient

way

s to

man

age

serv

ices

and

fin

ance

(6.6

1) f

ollo

wed

by

deta

iled

info

rmat

ion

in s

econ

ds(6

.58)

, fas

test

mod

e of

ser

vice

s (6

.03)

, bri

ng d

own

the

cost

of

bank

ing(

5.56

), le

ss r

isk

and

grea

ter

secu

rity

(5.5

1), q

uick

mov

emen

t of

fund

s (5

.14)

, fa

stes

t in

tern

et a

cces

s sp

eed(

4.95

),an

ywhe

re,

anyt

ime

bank

ing

(4.8

7),

redu

ced

was

ting

cos

t, in

crea

sed

flex

ibili

ty a

nd i

mpr

oved

serv

ice

(4.7

7) a

nd e

asy

to tr

ansa

ct f

rom

off

ice

, hou

se o

r w

hile

trav

elin

g(4.

46).

It c

an b

e ob

serv

ed th

at b

ank

cust

omer

fou

nd it

sui

tabl

e to

tran

sact

13

5

thro

ugh

elec

tron

ic b

anki

ng.

The

refo

re i

mpr

oved

ser

vice

s, e

asy

to t

rans

act

from

any

whe

re a

nd a

nyti

me

are

the

mai

n re

ason

s du

e to

whi

ch e

-

bank

ing

is a

dopt

ed b

y th

e cu

stom

ers.

Table 5.17

Benefits Availed Through E-banking

E-b

anki

ng S

ervi

ces

R

ank

1

Ran

k 2

Ran

k 3

Ran

k 4

Ran

k 5

Ran

k 6

Ran

k 7

Ran

k 8

R

ank

9 R

ank1

0 W

AS

O

vera

ll R

anki

ng

With

draw

al

216

64

31

17

26

15

9 2

3 17

8.

49

1

Ope

ning

of

Acc

ount

s 32

79

60

54

45

24

28

18

28

32

6.

33

3

Che

ckin

g of

Bal

ance

30

71

61

80

42

42

3

30

33

8 6.

56

2

Tra

nsfe

r of

Fun

ds

24

26

80

68

84

37

30

18

12

21

6.24

4

Onl

ine

Info

rmat

ion

24

19

38

63

62

80

57

28

13

16

5.70

6

Bill

Pay

men

t 23

35

51

32

58

88

50

29

17

17

5.

75

5

Loa

n R

ates

10

6

13

53

29

57

77

87

30

38

4.38

7

E-s

hopp

ing

4 27

38

16

29

22

81

82

74

27

4.

32

8

Impo

rt-E

xpor

t 15

31

20

11

5

29

23

63

145

58

3.67

9

Dow

nloa

ding

of

Form

s 13

42

14

15

24

8

37

38

36

173

3.54

10

136

able 5.17 shows that all electronic banking services are not equally important for the

customers, some services are very important while some are less important. The findings

shows that cash withdrawal (8.49), Checking of account balance (6.56), Opening of

account through online internet (6.33), transfer of funds (6.24), bill payment (5.75) and

online information (5.70) are the important advantages availed through e-banking.

Among the least important services are loan rates (4.38), e-shopping (4.32), import-

export trade documents (3.67) and downloading of various forms (3.54) are the less

important services for the customers. So the findings indicated that cash withdrawal

through onsite and offsite ATM’s, anywhere, anytime banking, checking of account

balance through phone and mobile banking are the major benefits creeped by e-banking

for the customers.

Section-III

5.7 Exploring the Relationship Between Service Quality and E-banking

This section deals with various dimensions of service quality studied to know

electronic banking impact on service quality. Various statistical tools are applied for the

said purpose like mean, standard deviation, factor analysis and t-test. Various dimensions

of service quality helps to clarify as to which particular factors or variables of electronic

banking has increased the level of service quality for the customers.

Mean Scores and Standard Deviation

Table 5.18 reveals the mean and standard deviation for the individual factors of

electronic banking to measure the service quality, customer satisfaction and their

response towards the different dimensions. Amongst the various dimensions, the highest

score was found for ‘transfer of fund is faster as compared to manual banking’

(competence dimension) followed by the ‘representation of service through plastic card’,

‘credit card and debit card ‘(tangible dimension) and same mean score for ‘transfer of

fund through e-banking is easier’(competence) and than by ‘bank use advanced

computer/ IT to serve clients’. Three of the four variables of responsiveness were also

ranked highest. The scores in all the dimension of communication are also high. The

lowest score was to be found regarding ‘ability to fulfill the requirement’ in credibility

dimension. The standard deviation is also low and high according to the respective mean

scores.

137

Table 5.18

Mean Scores and Standard Deviation for Individual Features of Quality,

Customer Satisfaction and Behavioural Response

Statements Dimension Mean S.D.

1. Banks use advanced Computer/IT to serve clients.

Tangibility 4.00 0.86

2. E-banking provides modern looking equipment.


3. Physical representation of service through plastic card, credit and debit card is easy.


4. E-banking provides 24 hours, 365 days a year service to customers.


5. It helps in reducing the no. of queues in the bank branches.


6. E-banking provides more physical facilities to the customers.


7. It provides individualized attention to the customers.

Understanding 3.66 0.91

8. It provides necessary information to the customers.


9. Website of the bank is designed according to the need of the customer.


10. It ensures to provide necessary information to the customer.


11. E-banking learns the specific requirement of the customer.


12. E-banking ensures physical safety of the transaction.

Security 3.67 1.02

13. It is trusted by young generation. Competence 3.86 0.87 14. Password facility provides confidentiality to

transaction. Security 3.82 1.04

15. It also increases the financial security. Security 3.84 0.90 16. Privacy can be easily maintained. Security 3.70 1.02 17. E-Banking explains the service itself. Communication 3.78 1.03 18. It explains the cost of service being used. Communication 3.72 0.85 19. It assures the customer that problem will be

handled. Communication 3.74 0.72

20. It explains the trade off between service and cost.

Communication 3.77 0.77

21. E-banking provides up to date information. Communication 3.77 0.98 22. It also provides sophisticated information for

well educated customers. Communication 3.83 0.80

23. Transfer of fund is easier through E-banking. Competence 4.02 0.84 24. E-Banking provides more punctuality,

transparency, accountability. Competence 3.77 0.94

25. Transfer of funds is faster as compared to manual banking system.

Competence 4.06 0.88

138

26. It provides accuracy in billing. Reliability 3.75 0.96 27. It helps in keeping records correctly. Reliability 3.86 0.89 28. It performs the service at designated time. Reliability 3.69 0.90 29. E-banking is very necessary for the

development of new economy of India. Responsiveness 3.97 0.95

30. It improves the quality of customer service. Responsiveness 3.90 1.02 31. Response of service through e-banking is very

prompt and quick. Responsiveness 3.71 0.98

32. E-Banking service is accessible via Internet banking, mobile banking, EFT, ECS, ATM.

Access 3.85 0.95

33. Online purchase of goods and services including online payment is easier.

Access 3.94 0.97

34. Availability of service is faster in e- banking as compare to manual banking.

Responsiveness 3.94 0.99

35. It provides convenient location of service facility (location of ATM, POS terminals).

Access 3.93 0.98

36. It reduces the waiting time to receive the service.

Access 3.87 0.88

37. E-banking increases the reputation of the banks Credibility 3.83 1.02 38. It increases the believability, honesty and

trustworthiness of the customers in banks. Credibility 3.82 0.89

39. It ensures the ability to fulfill the requirement Credibility 3.02 1.14 40. Degree of reliability involved in Interaction

with customer is more in e- banking. Credibility 3.73 0.88

41. It helps in better customer relationship, attracting and retaining them.


42. E-banking provides effective medium of promotion of various schemes.

Communication 3.87 0.76

43. It provides unlimited network to the banks to approach customers.

Credibility 3.75 0.80

5.7.1 Service Quality Level of Banks Using SERVQUAL Model

For the measurement of impact of e-banking on service quality, SERVQUAL

model developed by Parasuraman et,al.(1985) has been used. The data collected through

the questionnaire was analyzed by using factor analysis and other statistical techniques.

The first stage was to determine whether the nine dimensions could be viewed as

appropriate indicators of banking industry. The second stage was to assess the variables

underlying the various dimensions. Accordingly, 43 variables were developed to assess

the nine dimensions. This stage tests these variables as well as their relevance in

conceptualizing service quality.

The 43 service quality variables were factor analyzed to determine whether there

exists underlying dimensions of service quality. The objective of the analysis was to

summarize the information contained in the original 43 variables in to smaller sets of

139

newly correlated composite dimension or factors. Only variables with factor loading of

0.40 (Hatcher, 1994) were considered important for further analysis and data reduction

and other were excluded. Cronbach alpha and Kaiser-Meyer-Olkin (KMO) measure of

sampling adequacy and Bartlett’s test of sphercity was used to measure the reliability of

data. If the value of KMO and Cronbach alpha in any variable is greater than 0.50 than

the data will be regarded as reliable for research. The factors with eigen value equal to or

greater than one were considered significant and chosen for interpretation.

In order to conduct factor analysis on 43 variables of service quality, the various

sub dimensions has been divided into 9 main dimensions namely Access,

Communication. Credibility, Competence, Reliability, Responsiveness, Security,

Understanding, Tangibility. Each dimension consists of 4-5 sub dimensions. But all these

dimensions are not equally important for measuring the service quality in banking

industry. So, factor analysis was used to extract those factors having eighen value greater

than 1. To study the impact of e-banking on service quality and to identify the important

factors for the customers to choose e-banking, Two assumptions have been framed.

• To know the impact of e-banking on the level of customer satisfaction, all factors are

equally important.

• There is no correlation among the different factors to judge the level of customer

satisfaction.

Table 5.19

Measuring the Reliability of Data

Variables Kaiser-Meyer-

Olkin

Measure(KMO)

Bartlett’s Test of

Sphericity

(Approx.Chi-square)

d.f. Significance

Level

Access 0.507 179.659 6 0.000 Communication 0.520 171.384 21 0.000

Competence 0.663 206.790 6 0.000

Credibility 0.591 205.889 10 0.000

Reliability 0.581 74.399 3 0.000

Responsiveness 0.666 275.346 6 0.000

Security 0.666 154.181 6 0.000

Tangibility 0.742 332.709 15 0.000

Understanding 0.797 211.037 15 0.000

140

In order to know the various factors considered important for the customers, two

tests were conducted under the factor analysis to judge the reliability of data, i.e., Kaiser-

Meyer-Olkin measure of sampling adequacy and Bartlett test of sphericity. The results so

obtained were subjected to both these tests. The value of KMO statistics in all the

factors is >0.5. Hence, all the factors are not considered equally important for measuring

the service quality of e-banking. Therefore, null hypothesis is rejected. Bartlett’s test of

sphericity shows the value of Chi-square which is significant at 0.000 levels in all the

dimensions of service quality. These two tests show that the data is fit for conducting the

factor analysis.

5.9.1 Identification of Nine Service Quality Factors

Principal Component Analysis with Varimax Rotation method was employed for

extracting the factors. All the variables with their factor loadings and percentage of

variance explained by each factor are given in the following tables used on forty-three

items of service quality.

Principal Component Factor Analysis with Varimax Rotation,

Percentage of Variance Explained and factor Loadings

Nine factors have been extracted with the help of different dimensions of service quality.

The percentage of variance explained by the factors individually varies from 38.915 to

58.579 and the communalities vary from 0.460 to 0.778. All the factors have been given

appropriate names on the basis of various variables present in each case. The structure of

these nine factors is discussed below

Factor 1

Access

Table 5.20

Analysis of Customers’ Perceptions Regarding Access Dimension

S. No. Variable Factor

Loading

1. E-banking service is accessible via Internet banking, mobile banking, EFT, ECS, ATM.

0.467

2. Online purchase of goods and services including online payment is easier.

0.676

3. It provides convenient location of service facility (location of ATM, POS terminals)

0.794

4. It reduces the waiting time to receive the service. 0.659 Cronbach Alpha 0.556

Eigen value 1.740 Percentage of variance(sum of square loadings) 43.491

141

Different dimensions of ‘Access’ under e-banking were studied and four factors

have been loaded on this factor. The factor loadings of all the statements were calculated

and it has been found that the loading of all the statements is greater than 0.4, thus, all

the statements will be accepted. The Eigen value and Cronbach alpha for this factor are

1.740 and 0.556 respectively. The Eigen value of the factor was greater than one and

indicates that it fits well with the data from all the respondents on all the statements. The

analysis shows that Eigen value explains 43.49 per cent of the variance from all the

respondents and there is only one factor extracted having the factor loading closer to 1.

This shows that customers do not agree that e-banking is easily accessible through

mobile, ATM, internet banking, EFT and ECS. Convenience is having high factor

loading which is 0.79 and as such this factor is extracted and retained. It implies that e-

banking provides convenient location of service by installing the onsite and offsite

ATMs and point of sale terminals .

Factor 2

Communication

Table 5.21

Analysis of Customers’ Perceptions Regarding Communication Dimension

S. No. Variable Factor

Loading

Eigen

Value

1. E-banking explains the service itself. 0.496 1.57 2. It explains the cost of service being used. 0.676 1.34 3. It assures the customer that problem will be handled. 0.633 1.22 4. It explains the trade off between service and cost. 0.519 5. E-banking provides up to date information. 0.520 6. It also provides sophisticated information for well

educated customers. 0.698

7 E-banking provides effective medium of promotion of various schemes

0.695

Eigen value 1.57,1.34 1.22

Cronbach Alpha 0.780 Percentage of variance(sum of square loadings) 59.077

142

Table 5.22

Rotated Component Matrix of Communication Dimension

Factor 1 Factor 2 Factor 3

Explanation 0.205 0.463 0.49 Cost -0.381 0.727 -0.025 Handling 0.314 0.731 -0.008 Tradeoff 0.658 0.262 -0.135 Update -0.041 -0.137 0.707

Sophisticated 0.818 -0.137 0.096 Effectiveness -0.043 0.097 0.764

Table 5.21 shows communication factor that consisted of seven variables. The

factor loadings of all the statements were calculated and it was found that the loadings of

all the statements were greater than 0.4, and thus, all were accepted. The values of

Cronbach alpha and Eigen value so obtained suggest a good consistency of the data. The

analysis shows that the Eigen value represents 59 per cent of the variance of data. In the

three variables, Eigen values are having value greater than 1 which shows that the factor

extracted would be equivalent to three. Rotated component matrix with Kaiser

Normalization helped in data reduction. The matrix explains that the factors extracted are

the combination of how many variables. The principal component analysis under the

rotation converged into three iterations. The following three components have been

extracted.

Component 1: Sophisticated

Component 2: Cost, Handling

Component 3: Update, effectiveness.

Table 5.22 shows the factor that represents the combination of variables under

communication dimension. In the first extraction of factor loading, ‘sophisticated’ is

having highest loading i.e., 0.818 which implies that electronic banking provides

sophisticated information to well educated customers. People perceive that service of

electronic banking is more useful and valuable for educating community as large

proportion of people are involved in service sector having their own PC, laptop and

computer. So, they can get any sort of information regarding their account balance,

transfer of funds, clearing services, mobile recharging, etc. and they can get any sort of

information well in time through internet banking with the help of transactional and

143

informational websites of banks. It brings out that the benefit of E-banking is mainly

enjoyed by educated customers only

In the second Matrix, two factors are having value closer to 1, namely, ‘cost’

and ‘handling’, with 0.727 and 0.731 respectively. As e-banking explains the cost of

service as well as assurance to the customer that the problem will be handled. It means

explaining something about the service as well as giving assurance to customer as a

feedback means e-banking services are informative and helpful in data handling and cost

reduction. ‘Update’ and ‘effectiveness’ dimension is having high loading in the

interpretation of third factor. It implies that e-banking provides latest and effective

information to the customers.

Factor 3

Competence

Table 5.23

Analysis of Customers’ Perceptions Regarding Competence Dimension

S. No. Variable Factor Loading

1. Transfer of fund is easier through E-banking. .418 2. E-banking provides more punctuality, transparency,

accountability. .745

3 Transfer of funds is faster as compared to manual banking system.

.776

4. It is trusted by young generation. .750 Eigen value 1.896 Cronbach alpha .614 % of variance(sum of square loadings) 47.393

Table 5.23 reveals that competence factor consisted of four variables and each of

these variables was analyzed using factor analysis. The analysis shows that the Eigen

value represents 47.39 percentage of the variance of data. There are three variables

having value closer to 1 and above 0.7. The variables extracted were ‘Easy’, ‘Trusted’

and ‘Punctuality’. These three factors explained that the transfer of funds due to RTGS,

ECS and EFT is easier and services provided through e-banking are adequate,

accountable, faster and transparent.

144

Factor 4

Credibility

Table 5.24

Analysis of Customers’ Perceptions Regarding Credibility Dimension


1. E-banking increases the reputation of the banks. 0.713 2. It increases the believability, honesty and trustworthiness of

the customers in banks. 0.699

3. It ensures the ability to fulfill the requirement. 0.701 4. Degree of reliability involved in interaction with customer

is more in E- banking. 0.471

5. It provides unlimited network to the banks to approach customers

0.346

Cronbach Alpha 0.787 Eigen value 1.684, 1.254 Percentage of variance(sum of square loadings) 58.759

Table 5.25

Rotated Component Matrix of Credibility Dimension

Factor 1 Factor 2

Reputation 0.772 -0.343 Trustworthy 0.823 0.147 Ability -0.151 0.828

Reliability 0.582 0.364 Network 0.205 0.552

The credibility factor consisted of four variables. In this factor two variables have

Eigen values greater than 1 and as such two factors will be extracted with rotated

component matrix and Kaiser Normalization. These are:

Component 1: Reputation, trustworthy

Component 2: Ability

In the first extraction, the variables named ‘reputation’ and ‘trustworthy’ are

having high loading closer to 1. It can be inferred that e-banking services increase the

honesty, reputation and trustworthiness of the banks by providing on time and desirable

services. In the next category, there is only one factor having a loading of 0.828. The

factor so called is ‘ability’ as e-banking enhances the ability to fulfil the requirement of

the customer that was earlier not possible by brick and mortar banking.

145

Factor 5

Reliability

Table 5.26

Analysis of Customers’ Perceptions Regarding Reliability Dimension


1. It provides accuracy in billing. 0.776 2. It helps in keeping records correctly. 0.722 3 It performs the service at designated time. 0.615 Cronbach Alpha 0.699 Eigen value 1.502 Percentage of variance(sum of square loadings) 50.061

The reliability factor consisted of three variables and each of these variables was

analyzed using factor analysis. The factor loading of all the statements was calculated

and it was found that the loadings of all the statements were greater than 0.4, and thus,

all were accepted. The Cronbach alpha and Eigen values are 0.699 and 1.502

respectively which suggest a good consistency of the data. Only one factor having Eigen

value greater than 1 explained 50.61 per cent of the data. Hence, only one component is

extracted.

Component: Accuracy, Correctness

The component is a combination of two variables that is accuracy and correctness.

As e-billing is more accurate than paper billing and records are kept correctly in online

banking and can be retained for the longer period.

Factor 6

Responsiveness

Table 5.27

Analysis of Customers’ Perceptions Regarding Responsibility Dimension

S.No. Variable Factor Loading

1. E-banking is very necessary for the development of new economy of India.

0.714

2. It improves the quality of customer service. 0.724 3. Response of service through e-banking is very prompt and

quick. 0.798

4. Availability of service is faster in e-banking as compared to manual banking.

0.617

Cronbach Alpha Eigen value

0.679 2.051

Percentage of variance(sum of square loadings) 51.281

146

Table 5.27 shows the statements under responsiveness dimension. The

responsiveness factor consisted of four variables and each of these variables were

analyzed using factor analysis. The factor loadings of all the statements were calculated

and it was found that the loadings of all the statements were greater than 0.4, and thus,

all were accepted. The Cronbach alpha and Eigen value are 0.679 and 2.051 respectively

which suggest a good consistency of the data. Their is only one Eigen value explaining

51.28 per cent of the data. The component matrix shows four variables and all the

variables having value greater than 0.4. Hence, no factor can be rejected but three factors

having loading greater than 0.7 and as such the following factors will be combined.

Component: Development, quality, quickness

These three out of four factors represent that e-banking is required for the

development of economy, improve the quality of service, and bring quickness in

response. This shows that e-banking is a major factor for the growth and expansion of

banking sector and the economy as a whole by reduction of wastage and less paper

involvement in electronic transactions.

Factor 7

Security

Table 5.28

Analysis of Customers’ Perceptions Regarding Security Dimension


1. E-banking ensures physical safety of the transaction. 0.582 2. Password facility provides confidentiality to transaction. 0.752 3. It also increases the financial security. 0.687 4. Privacy can be easily maintained. 0.660 Cronbach Alpha 0.691 Eigen value 1.811 Percentage of variance(sum of square loadings) 45.271 Table 5.28 shows security dimension that consisted of four variables. The value

of Cronbach alpha and Eigen values are 0.691 and 1.811 respectively, which suggest a

good consistency of the data. Only one factor having Eigen value greater than 1

explained 45.271 per cent of the data.

One factor ‘confidence’ having loading of 0.752 shows that people are highly

satisfied with e-banking because the technology of banking is mainly operated through

password, be it internet banking or ATM processing. Password facility provides

confidentiality to all the transactions. So, much influence in security issue is of password

147

facility which provides immense help to the customers in maintaining secrecy of their

money as well as transactions.

Factor 8

Tangibility

Table 5.29

Analysis of Customers’ Perceptions Regarding Tangibility Dimension


1. Banks use advanced Computers/IT to serve clients. 0.648 2. E-banking provides modern looking equipment. 0.749 3. Physical representation of service through plastic card,

credit and debit card is easy. 0.467

4. E-banking provides 24 hours, 365 days a year service to customers.

0.706

5. It helps in reducing the no. of queues in the bank branches. 0.555 6. E-banking provides more physical facilities to the

customers. 0.572

Cronbach Alpha 0.678 Eigen value 2.335 Percentage of variance (sum of square loadings) 38.915

The tangibility factor consisted of six variables. The value of Cronbach alpha and

Eigen values are 0.678 and 2.335 respectively explaining 38.915 per cent of the data.

Only one factor having Eigen value greater than 1 explained 38.91 per cent of the data.

All the six variables have factor loadings greater than 0.4 but only those factors will be

extracted those which have loading greater than 0.7. So, with help of component matrix,

two variables are extracted.

Component: Modern equipment, Hours

Installation of new machines, change in the infrastructure of banks in a

modernized way has only been possible due to e-banking. Secondly e-banking provides

24 hours access to the banking facility. The concept of branch banking is also abolishing

due to e-banking

148

Factor 9

Understanding

Table 5.30

Analysis of Customers’ Perceptions Regarding Understanding Dimension


1. It provides individualized attention to the customers. 0.454 2. It provides necessary information to the customers. 0.478 3. Website of the bank is designed according to the need of the

customer. 0.502

4. It ensures to provide necessary information to the customer. 0.515 5. E-banking learns the specific requirement of the customer. 0.372 6. It helps in better customer relationship, attracting and

retaining them 0.730

Cronbach Alpha 0.808 Eigen Value 1.995,1.057 Percentage of variance (sum of square loadings) 50.862

Table 5.31

Rotated Component Matrix of Understanding Dimension

Factor 1 Factor 2

Attention 0.664 -0.115 Information 0.609 0.327 Need 0.693 -0.149 Assure 0.718 -0.009 Requirement 0.411 -0.451 Relations 0.062 0.852

The understanding factor consisted of six variables. The values of Cronbach

alpha and Eigen value are 0.808 and 2.335 respectively. There is only one factor having

Eigen value greater than 1 explaining 50.862 per cent of the data. ‘Courtesy’ is one of

the main dimensions. But due to having only one sub-dimension it is added in the

understanding dimension. Out of the six factors, two Eigen values are having value

greater than 1, hence, rotated component matrix is having two iterations and the factors

extracted are as follows:

Component 1- Need, Assure

Component 2- Relations

Table 5.31 reveals rotated component matrix. In the first matrix, we are having

two factors with high loadings that is ‘need’ with 0.693 and ‘assurance’ with 0.718. It

shows that e-banking suits the need of the customers and assures to provide the required

information in time. In the second matrix, only one factor is having high loading that is

149

0.852 in relations. In the next matrix, the factor extracted is only one that is ‘Relations’

because e-banking helps in improving, attracting and retaining more customers.

5.8 Level of E-banking Services Offered by Different Banks

E-banking services are offered by public and private sector banks at different

levels. Table 5.32 to 5.36 reveals the satisfaction level of respondents, awareness about

new products and services, operational problems in the existing e-banking services.

Table 5.32

Satisfaction Level of Customers Regarding E-banking Services

E-banking Services Extremely

Poor

Poor Average

Good

Very

Good

Weighted

Average

Score

Rank

Internet banking services

17 19 88 200 76 3.74 4

Mobile banking services

11 54 166 119 50 3.35 10

Phone Banking services

8 57 178 108 49 3.33 11

Home banking services

33 47 148 122 50 3.27 12

ATM facility 25 19 96 123 137 3.82 2 Credit card Facility 20 16 124 164 76 3.65 5 Debit card facility 9 23 92 185 91 3.81 3 Electronic fund transfer

6 55 99 156 84 3.64 6

Bill Payment service

32 30 131 156 51 3.41 9

Inter-Connectivity of ATM’s

3 53 141 139 64 3.52 7

Request Facility 8 22 88 176 106 3.87 1 Information of New Products and Services.

23 29 141 152 55 3.46 8

Table 5.32 mentions the level of E-banking services offered by different banks.

The various e-banking services include Internet banking, Mobile banking, Phone

banking, Home banking, ATM, Credit cards, Debit cards, Electronic Fund Transfer, Bill

Payment etc. Regarding different services customer are having different opinions.

Weighted average scores are calculated for all the services. Majority of the respondents

are satisfied with the ‘request facility’ (3.87) which means the customer can easily ask

for any sort of information and can request for pass book, account information, balance

enquiry etc. through e-banking followed by ATM facility (3.82), debit card facility

(3.81), Internet banking services (3.74), credit card facility (3.65), Electronic fund

150

transfer(3.64), Inter-connectivity of ATMs (3.52), Information of new products and

services (3.46), bill payment service(3.41), mobile banking services (3.35), phone

banking services (3.33), home banking services (3.27). The respondents’ level of

satisfaction shows that banks up to some extent are satisfying the requirement of the

customers and fulfilling their diverse needs.

Table 5.33

Awareness Among Customers’ About New Products And Services

Frequency Percent Valid Percent Cumulative Percent

Advertisement 129 32.2 32.3 32.3 Manager 67 16.7 16.8 49.0 Website 67 16.7 16.8 65.8 E-mail 51 12.7 12.8 78.5 Other Customers 63 15.7 15.8 94.3 Mobile Banking 23 5.7 5.8 100.0 Total 400 99.8 100.0

Table 5.33 shows the awareness about the banking products and services in the

customers. The majority of the respondents (32.2%) aware about e-banking products and

services from the advertisement in the newspapers, 16.8 per cent from their respective

managers and websites of the banks respectively, 15.7 per cent from the other customers,

12.7 per cent from e-mail and 5.7 per cent from the mobile banking. So the mode of

awareness could be any as the customer of today’s world is competent and aware about

the usage of e-banking through different modes of communication.

Table 5.34

Operational Problems in the Use of Modern Technology

Nature of Problem Frequency Percent Valid Percent Cumulative Percent

Server down 31 7.7 7.8 7.8 Untrained Personnel 35 8.7 8.8 16.5 Non Working of ATM 75 18.7 18.8 35.3 Deposit of Cash 49 12.2 12.3 47.5 Ignorance of People 37 9.2 9.3 56.8 Low Response of Phone Calls

34 8.5 8.5 65.3

Onsite and Offsite Location of ATM

44 11.0 11.0 76.3

Availability of Currency

50 12.5 12.5 88.8

Risk of Loss of Currency

31 7.7 7.8 96.5

Delay in Services 14 3.5 3.5 100.0 Total 400 99.8 100.0

151

Table 5.34 encounters the nature of problem being faced by the respondents with

the usage of e-banking. The major problem arising in this is regarding the ATMs. 18.7

per cent respondents says that the ATMs of the bank does not either work properly or

having the shortage of cash in it. Further the respondents agree that in ATM also the

problem of queue is not solved, people still have to stand in queue to use their ATMs and

the reason may be some time technical difficulties or slow working of the machines.12.5

per cent respondent says that availability of currency might be in the bank premises or in

the ATMs causes’ problem to them. For online deposit also, the customers have to wait

for long time in bank despite of electronic fund transfer system. Thirdly comes the

problem of depositing the cash that constitute 12.2 per cent of the total problems.

Customers can withdraw fast cash from ATM but to deposit the money they still have to

rely on bank employees. Fourthly 11 per cent respondents agree that locations of ATMs

are not adequate. Even if a large number of ATMs are being installed still the customers

have to move far off places from their home and offices for the withdrawal of money. In

rural areas number of ATMs are very less. Further 9.2 per cent respondents encounter

problem due to their ignorance regarding the use of new technological methods as their

are no training and orientation programs organized for the customers to train and inform

them about the usage of e-banking products. 8.7 per cent perceive that they are facing

some problems due to untrained personnel in the organization, 8.5 per cent of the

respondents perceive that they face the problems because of non attending of the phone

calls by the bank employees. 7.7 per cent are facing the problem due to server down and

3.5 per cent due to delay in services.

Table 5.35

Problems in E-banking Services


Yes 235 58.6 58.8 58.8 No 165 41.1 41.3 100.0

Total 400 99.8 100.0

The methods and techniques used in e-banking are quite different from

traditional banking. In the list of services mentioned above, 58.6 per cent respondents

agree that they encounter problems in e-banking services and 41.1 per cent admitted that

they have adjusted their requirements according to any problem.

152

Table 5.36

Filing of Complaint


Yes 158 39.4 39.5 39.5 No 242 60.3 60.5 100.0

Total 400 99.8 100.0

Table 5.36 reveals whether the respondents lodged complaint to the banks

or not regarding their problem. Majority (60.3%) of the respondents formed an opinion

that although they have problems in e-banking services yet they don’t complaint

regarding it to their banks. The reason may be they are not familiar with the way to file

the complaint with the bank and 39.4 per cent respondents’ complaint regarding their

problems to the banks. It could be regarding usage of internet banking, mobile banking,

ATMs etc.

Section-IV

5.11 A Comparison of Customer Satisfaction in Public Sector and Private Sector

Banks


This section deals with the results analysed to study the impact of e-banking on

level of customer satisfaction across public and private sector banks. The data collected

was analyzed according to customer use of banks in private sector and public sector.

Table 5.37 shows the sample distribution between the two banking sector as it relates to

gender, age, education, occupation, household income. In the sample, 200 respondents

each from public and private sector have been selected for the study.

Table 5.37

Characteristics of Customers’ Profile in Public and Private Sector Banks

Private Public

Gender

Male 164 124 Female 36 76 200 200 Marital status

Married 119 137 Unmarried 81 63 200 200 Age

Below 30 119 91

153

30 But Below 45 51 58 45 But Below 60 22 38 Above 60 8 13 200 200 Education

Below Matric 4 2 Matric and Under Graduate 26 49 Graduate 58 48 Post Graduate 70 60 Professional Degree 42 41

200 200 Occupation

Businessmen 42 40

Servicemen 87 86 Professional 40 28 Agriculturist 16 5 Any Other 15 41 Total 200 200 Income

Below 10000 40 27 10000-15000 44 35 15000-20000 34 39 20000-25000 29 35 Above 25000 53 64 200 200 Length of Account

Less than 1yrs 42 17 1-3 yrs 67 33 3-5yrs 38 24 5-7 yrs 22 37 Above 7 31 89

200 200 Type of Account

Saving 162 146 Current 23 42 Salary 15 12 200 200

5.11.2 Comparative Service Quality Analysis of Public and Private Sector Banks

Using SERVQUAL Model

The research examined the comparative analysis of services between public and

private sector banks. The dimension of SERVQUAL is divided into nine parts

comprising access, communication, competence, credibility, responsiveness, reliability,

154

security, tangibility and understanding. T-test was applied to calculate the mean

differences between public and private sector banks.

Factor 1

Access

Table 5.38

Sector-wise Analysis of Customers’ Perception Regarding Access Dimension

Statements Public Private t-value p-value

E-banking service is accessible via Internet banking, Mobile banking, EFT, ECS, ATM.

3.91 3.78 1.374 0.170

Online purchase of goods and services including online payment is easier.

3.87 4.01 -1.452 0.002**

It provides convenient location of service facility(location of ATM, POS terminals)

3.93 3.93 0.000 0.500

It reduces the waiting time to receive the service.

4.02 3.72 3.409 0.000**

** p-value is significant at 0.05 level.

Table 5.38 shows the statistical difference of access dimension in public and

private sector banks. In the access dimension, there is a significant gap in two services

while in other two there is no such difference. In case of online purchase of goods and

services, private sector is having 4.01 mean score and public sector with 3.87 where the

p-value is significant at 5 per cent level. This shows both public and private sector

customers agree but private sector seem to be higher beneficiary of online services of

their respective banks. Other statistical difference is in the reduction of waiting time to

receive the service. Here public (4.02) and private (3.72) sector services are different and

public sector banks are helpful in reduction of waiting time to receive the services. This

difference could be due to better time management, efficient employees and installation

of more number of ATMs. Whereas in case of internet, mobile, ECS, EFT services there

is no such significant difference found.

155

Factor 2

Communication

Table 5.39

Sector-wise Analysis of Customers’ Perception Regarding Communication

Dimension


E-banking explains the service itself.

3.87

3.68 1.856 0.064

It explains the cost of service being used.

3.61 3.83 2.618 0.995

It assures the customer that problem will be handled.

3.61 3.86 3.524 0.000**

It explains the trade off between service and cost.

3.70 3.84 1.819 0.069

E-banking provides up to date information.

3.63 3.91 2.880 0.998

It also provides sophisticated information for well educated customers

3.79 3.87 1.006 0.842

E-banking provides effective medium of promotion of various schemes

3.60 3.90 -3.811 0.000**


The communication dimension shows that customer perception in public and

private is almost same in all statements except in two statements with mean score of 3.61

and 3.60 and 3.86 & 3.90 respectively. As e-banking assures that customer problem can

be handled but private sector customers are more agreed upon it. Second statistical

difference is significant in e-banking as effective medium of promotion of various

schemes. This shows that websites of private sector banks are more customer friendly

where they can come to know about the various schemes launched by the banks. In both

these areas public sector do need to have improvement.

156

Factor 3

Competence

Table 5.40

Sector-wise Analysis of Customers’ Perception Regarding Competence Dimension


It is trusted by young generation. 3.92 3.81 1.255 0.210 Transfer of fund is easier through E-banking.

4.02 4.02 0.000 1.000

E-banking provides more punctuality, transparency, accountability.

3.78 3.77 0.107 0.915

Transfer of funds is faster as compared to manual banking system.

4.03 4.09 -0.680 0.497


Regarding the competence dimension, both the sectors are giving the same

service in this regard. Both the sector’s services are trusted by the young generation, no

hindrance in transfer of fund. In both the sectors the e-banking services are more

punctual, transparent and accountable. Although there is no statistical difference found in

two sectors but public sector (3.92) is more trusted by the young generation than private

sector (3.81). As far as the transfer of funds are concerned private sector banks (4.09) are

offering it a better way than the public sector banks (4.03).

Factor 4

Credibility

Table 5.41

Sector-wise Analysis of Customers’ Perception Regarding Credibility Dimension


E-banking increases the reputation of the banks

3.87 3.79 0.783 0.434

It increases the believability, honesty and trustworthiness of the customers in banks.

3.73 3.92 -2.138 0.003**

It ensures the ability to fulfill the requirement

2.26 3.77 -17.679 0.000**

Degree of reliability involved in interaction with customer is more in e- banking.

3.60 3.87 -3.086 0.002**

It provides unlimited network to the banks to approach customers

3.60 3.90 -3.811 0.000**

** p-value is significant at 0.05 level

Table 5.41 shows the comparison of difference between the public and private

sector in the credibility dimension. The results indicated the gap between two sectors in

four out of five statements representing ‘trustworthiness’, ‘ability to fulfill the

157

requirement’, ‘degree of reliability’ and ‘unlimited network approach’ for customers. All

the four statements are significant at 5 % level of significance and the mean score of

private sector customers is high in all statements. Customers are disagreeing with public

sector banks on the ground that their all requirements are fulfilled with the low mean

score.

Factor 5

Reliability

Table 5.42

Sector-wise Analysis of Customers’ Perception Regarding Reliability Dimension


It provides accuracy in billing. 3.71 3.80 0.937 0.349

It helps in keeping records correctly. 3.85 3.88 -0.334 0.738

It performs the service at designated time. 3.75 3.62 1.432 0.152


Table 5.42 reveals that there is no statistical difference between two sectors. The

dimension comprises of ‘accuracy in billing’, ‘keeping online records’ and ‘performing

the services’ at designated time with mean score of 3.80, 3.88 and 3.62 in private sector

respectively and 3.71, 3.85 and 3.75 in public sector. It is observed that if public sector

banks intend to enhance their service quality than they must improve the service quality

in those dimensions where the score is either too low than private sector or customers are

not satisfied with the services being provided.

Factor 6

Responsiveness

Table 5.43

Sector-wise Analysis of Customers’ Perception Regarding Responsiveness

Dimension


E-banking is very necessary for the development of new economy of India.

4.02 3.92 1.048 0.295

It improves the quality of customer service.

4.03 3.76 2.666 0.008**

Response of service through e-banking is very prompt and quick.

3.71 3.71 0.000 1.000

Availability of service is faster in e- banking as compare to manual banking.

3.76 4.12 -3.686 0.000**


158

The results in responsiveness dimension shows significant difference in two out

of four statements. Customers in both sectors agree that ‘e-banking is necessary for the

development of new economy of India’ and ‘regarding the service response through e-

banking’ with 4.02 and 3.71 mean score for public sector and 3.92 and 3.71 for private

sector. Public sector bank customers are more satisfied with the improvement of quality

service with 4.03 mean score and private sector banks customers with the availability of

service being faster in e-banking as compared to manual banking with 4.12 mean score.

Factor 7

Security

Table 5.44

Sector-wise Analysis of Customers’ Perception Regarding Security Dimension


E-banking ensures physical safety of the transaction.

3.71 3.64 0.683 0.493

Password facility provides confidentiality to transaction.

3.92 3.81 1.255 0.210

It also increases the financial security. 3.79 3.86 -0.674 0.250 Privacy can be easily maintained. 3.69 3.70 -0.097 0.922 ** p-value is significant at 0.05 level

As is evident from table 5.44 that both sector banks need to improve their

security services for e-banking. Customers wants more confidentiality for their internet

and ATM services. Both sector customers are neutral regarding their expectations from

their banks and required a further improvement.

Factor 8

Tangibility

Table 5.45

Sector-wise Analysis of Customers’ Perception Regarding Tangibility Dimension


Banks use advanced Computer/IT to serve clients. 4.01 4.00 0.116 0.907 E-banking provides modern looking equipment. 4.06 3.79 3.155 0.001**

Physical representation of service through plastic card, credit and debit card is easy.

3.96 4.08 -1.391 0.082

E-banking provides 24 hours, 365 days a year service to customers.

4.05 3.93 1.252 0.894

It helps in reducing the no. of queues in the bank branches.

3.90 3.77 1.414 0.920

E-banking provides more physical facilities to the customers.

3.60 3.86 -2.931 0.001**


159

As regards the tangibility dimension, the results indicated that in two out of six

statements both sector banks are statistically different. These two statements are

‘modern looking equipment’ and ‘more physical facilities’ to customers with 4.06 and

3.60 mean score of public and 3.79 and 3.86 of private sector. But public sector banks

are providing more modern looking equipment to its customers whereas private sector

banks are providing more physical facilities to customers. Other statements comprising

of ‘physical representation of service through plastic card, credit and debit card’,

‘reduction in the number of queues’, ‘e-banking provides 24 hours, 365 days service to

customers’ with mean score of 3.96, 3.90, 4.05 of public sector and 4.08, 3.77 and 3.93

of private sector banks in which out of three, in two services public sector banks are

having high mean score.

Factor 9

Understanding

Table 5.46

Sector-wise Analysis of Customers’ Perception Regarding Understanding

Dimension


It provides individualized attention to the customers.

3.68 3.64 0.432 0.666

It provides necessary information to the customers.

3.78 3.77 0.114 0.909

Website of the bank is designed according to the need of the customer.

3.83 3.78 0.544 0.706

It ensures to provide necessary information to the customer.

3.82 3.78 0.451 0.652

E-banking learns the specific requirement of the customer.

3.68 3.58 1.043 0.297

It helps in better customer relationship, attracting and retaining them

2.35 3.87 -17.944 0.000**


As far as the understanding dimension is concerned, private sector banks are

having low mean score than the public sector customers. For this the bank manager has

to ensure that the employees are properly trained so that they provide individualized

attention to customers to make e-banking services more to customers friendly and they

should also make efforts that customers feel safe and secure with their e-banking

transactions with the bank. Further website of the bank should be designed according to

the need of the customers.

160

The statistical difference in e-banking quality existed in following statements that related

to:

• Online purchase of goods and services including online payment is easier

(p=0.007)

• It reduces the waiting time to receive the service (p=0.000)

• It assures the customer that problem will be handled (p=0.000)

• E-banking provides effective medium of promotion of various schemes

• It increases the believability, honesty and trustworthiness of the customers in

banks (p=0.003)

• It ensures the ability to fulfill the requirement (p=0.000)

• Degree of reliability involved in interaction with customer is more in e- banking

(p=0.002)

• It provides unlimited network to the banks to approach customers. (p=0.000)

• It improves the quality of customer service (p=0.008)

• Availability of service is faster in e-banking as compare to manual banking.

(p=0.000)

• E-banking provides modern looking equipment (p=0.001)

• E-banking provides more physical facilities to the customers (p=0.001)

• It helps in better customer relationship, attracting and retaining them (p=0.000)

So there are twelve statements in which there is a difference in the quality of e-

banking services in public and private sector banks.

5.11.3 Comparative Analysis of E-banking Services in Public and Private Sector

Banks

A Comparative analysis of services has been done to examine the level of e-

banking services offered in public and private sector banks. The factors taken into

consideration provide a wide platform to the banking industry to consider the various

factors for the awareness, operational problems and satisfaction level of e-banking

services among the respondents in public and private sector banks.

161

Table 5.47

Awareness Among Customers About New Products And Services

Group 1

Private

Group 2

Public Total

Advertisement

70 (35)

55 (27.36)

125

Manager

27 (13.5)

49 (24.37)

76

Website

31 (15.5)

34 (16.91)

65

E-mail

25 (12.5)

27 (13.42)

52

Other Customer

32 (16)

30 (14.92)

62

Mobile banking

15 (7.5)

5 (2.48)

20

Total

200

200

400

Table 5.47 reveals that 70 (35 per cent) respondents of private sector and 55 (27

per cent) of public sector came to know about e-banking through advertisement, 27 (13.5

per cent) of private and 49(24 per cent) of public came to know through manager,

through websites 31(15.5 per cent) in private and 34(16.9 per cent) in public sector. So

the knowledge about e-banking services is highest through the advertisement of banks

and lowest through the mobile banking services in both public sector and private sector

banks. The knowledge through managers, websites, email and other customers comprises

a very small proportion.

Table 5.48

Operational Problems in the Use of Modern Technology

Private Public Total

Server Down

7 (3.5)

25 (12.43)

32

Untrained Personnel

17 (8.5)

18 (8.95)

35

ATM not Working Properly 39

(19.5) 37

(18.40) 76

Deposit of Cash

22 (11)

27 (13.43)

49

Ignorance

25 (12.5)

16 (7.96)

41

Not Attending Phone Call

17 (8.5)

16 (7.96)

33

Location

19 (9.5)

25 (12.43)

44

162

Availability of Currency

25 (12.5)

21 (10.44)

46

Risk of Loss of Currency

22 (11)

8 (3.98)

30

Delay in Services

7 (3.5)

7 (3.48)

14

Total 200 200 400 As regard the nature of problem is concerned, in private sector 3.5 percent

encountered it due to server down, 8.5 percent due to untrained personnel, 19.5 due to

ATM working, 25 percent for the ignorance of customer themselves, 25 percent for

availability of cash and 7 percent due to delay of services. However in the public sector

the situation is slightly different, here the customers encounters the problem due server

down (12.43 percent), ATM not working properly (18.40 percent), location of onsite and

offsite ATM (12.43 percent).The results showed that the respondents who had encounter

problem with the bank had filed the complaint against their banks. To conclude, once the

problem exists no matter how it is resolved it will influence the customer switching to

another bank.

Table 5.49

Problems in E-banking Services


Yes

127 (63.5)

104 (51.74)

231

No

73 (36.5)

96 (47.76)

169

Total 200 200 400

Table 5.49 shows that in private sector 127 (63.5 per cent) and 104 (51.4 per

cent) in public sector encounters problems in using e-banking services. Further 96(47.76

per cent) in public sector and 73(36.5 per cent) in private sector are having no problem in

rendering the services. This shows that the problems in private sector banks are high

comparative to public sector services.

Table 5.50

Filing of Complaint


Yes

64 (32)

90 (44.77)

154

No

136 (68)

110 (54.72)

246

Total 200 200 400

163

Table 5.50 shows that 64 (32 per cent) in private and 90(44 per cent) in public

sector lodged a complaint. Whereas 136(68 per cent) in private and 110(54.72 per cent)

in public sector has not raised their complaint regarding their services.

Table 5.51

Satisfaction Level of Customers’ Regarding E-banking Services

Public Private t-value p-value

Internet Banking Services 3.68 3.81 -1.358 0.175

Mobile Banking Services 3.37 3.34 0.313 0.754

Phone Banking Services 3.31 3.35 -0.428 0.668

Home Banking Services 3.35 3.19 1.485 0.138

ATM Facility 3.91 3.72 1.675 0.094

Credit Card Facility 3.78 3.51 2.747 0.006**

Debit Card Facility 3.79 3.83 -0.434 0.664

Electronic Fund Transfer 3.69 3.59 0.997 0.319

Bill Payment Service 3.59 3.22 3.545 0.000**

Inter-Connectivityof ATM’s 3.85 3.18 7.959 0.000**

Request Facility 3.85 3.18 7.634 0.000**

Information of New Products

and Services

3.43 3.50 -0.696 0.486

**p-value is significant at 0.01 level

Table 5.51 indicated that there is a significant difference in the customers’

opinion regarding different e-banking services. Although both sectors are providing good

services to their customers but out of 11 services, statistical difference was found in four

e-banking services that were in ‘credit card facility’, ‘bill payment services’, ‘inter-

connectivity of ATM’s’ and ‘request facility’. In all these four services mean scores of

public sector banks are high. However internet banking, phone banking and debit card

services of private sector banks are good with mean scores of 3.81, 3.35 and 3.83.

However it should be noted that the services are either average or good but not very

good. So both the banks should improve internet, phone, mobile, ATM, EFT, credit and

debit cards services to improve the overall quality of e-banking.

To deliver better quality services to the customers, it is required that services

must be standardized and for standardizing the quality of a service, the delivery of the

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service must be substituted with machines wherever possible. The conceptualization of

SERVQUAL instrument provided immense help in determining the level of service

quality and the expectation of customers from the banking Industry. With the help

model, banks can focus more upon delivering qualitative electronic banking services to

the customers The dimensions of service quality provided a close view regarding the e-

banking impact on service quality. A comparative analysis of both sectors shows that

there exists a significant gap in providing the services. A closer scrutiny of the results

shows that reliability, credibility, communication and access are significant predictors of

customer satisfaction in private sector banks. However security, understanding,

tangibility, competence and responsiveness are significant predictors of customers

satisfaction in public sector banks. For the greater adoption of e-banking among

customers, firstly its on the part of the banks to assure that whether they are providing

qualitative and timely e-banking services to their customers only than the level of

satisfaction can be raised. Both the banks should work in a competitive spirit with each

other to further improve the level of services.

chapter- 5 impact of electronic banking on...

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