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“CUSTOMER SATISFACTION ON INTERNET BANKING SERVICE

QUALITY”

A PROJECT REPORT SUBMITTED TO THE UNIVERSITY OF CALICUT IN


PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF
THE DEGREE OF MASTER OF COMMERCE.

SUBMITED BY,

RATHEESH K K

(CHANMCM009)

UNDER THE SUPERVISION AND GUIDANCE OF

SRI. PRADEESH. K

ASSISTANT PROFESSOR OF COMMERCE

POST GRADUATE DEPT. OF COMMERCE

GOVERNMENT COLLEGE, CHITTUR

JULY 2015

1
DECLARATION

I RATHEESH K K hereby declare that the project report titled “CUSTOMER


SATISFACTION ON INTERNET BANKING SERVICE QUALITY” is a bonafide
work done by me and is submitted to the university of Calicut in partial fulfillment of the
requirements for the award of the degree of Master of commerce. I also declare that the
report has not been submitted by me for the award of degree, diploma or other similar title
of any university.

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GOVERNMENT COLLEGE, CHITTUR
POST GRADUATE DEPARTMENT OF COMMERCE

CERTIFICATE

Certificate that is bonafide work carried out by RATHEESH K K is submitted to the


University of Calicut in partial fulfillment of the requirements for the award of the degree
of Master of Commerce.

Place: Signature

Date: Name and designation of

Supervising teacher

Counter signed by

Place: Signature of the

Date : Head of the Department

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POST GRADUATE DEPARTMENT OF COMMERCE
GOVERNMENT COLLEGE, CHITTUR, PALAKKAD KERALA-678104

(AFFILIATED TO CALICUT UNIVERSITY)

CERTIFICATE
th
Certified that RATHEESH K K 4 semester M.COM student in this department has worked
on the project titled “CUSTOMER SATISFACTION ON INTERNET BANKING
nd
SERVICE QUALITY.” for a period of 21 days from the 2 week of April 2015 under my
supervision and guidance. This has not been previously submitted for the award of any
degree, diploma or other similar title. This project is with submitting for the Degree of
Master of Commerce.

Place: Signature

Date: Name& Designation of Supervising Teacher

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ACKNOWLEDGEMENT

Every study is a learn more. It is essentially a pursuit in solitude. However, there cannot
be any action yielding results without help of others. There are many I thank in the
successful completion of this project.

First and foremost, I thank almighty God for his blessings in the successful completion
of this project.

I acknowledge my sincere and profound gratitude to our Smt. C.A.VISHALAKSHI,


Head of department of commerce, Govt. College Chittur, and other teachers of the
department for the advice and inspiration given.

I am extremely grateful to my supervising teacher Sri PRADEESH.K, Asst. Prof. of


department of commerce, Govt. College Chittur for the valuable guidance, supervision
and encouragement with enabled me to complete this project.

I express my deepest sense of gratitude to Dr. LAKSHMANAN M.P, Asst. Prof. of


department of commerce, Govt. College Chittur for his enormous help, invaluable ideas
and knowledge, advice, encouragement for the successfully completion of my research
work.

I would like to express my great thanks to all the respondents for their invaluable
support in the field work.

I convey my sincere thanks to my family and my friends for all their helps, support and
encouragement for this study.

This list is almost incomplete and I am grateful to all those who have helped me directly
and indirectly in my research work.

Place:

Date: RATHEESH K K

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CONTENTS

SL NO PARTICULARS PAGE NO

1 CHAPTER 1 8 – 14
INDRODUCTION

CHAPTER 2
2 REVIWE OF LITRATURE 15 – 22

CHAPTER 3
3 THEORETICAL FRAMWORK 23 – 37

4 CHAPTER 4 38 – 54
ANALYSIS AND INTERPRETATION

CHAPTER 5
5 FINDINGS,SUGGESTIONS AND 55 – 60
CONCLUSIONS

6 BIBLIOGRAPHY AND APPENDIX 61 – 64

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LIST OF TABLES
TABLE TABLE NAME PAGE
NO. NO.

4.1.1 Demographic profile of respondents 40


4.2.1 Mean ranks Obtained for the reason behind in using IB services 41
4.2.2 Friedman Test 42
4.3.1.1 Gender wise Estimated Marginal Means- Transaction Efficiency 42
4.3.1.2 Education Qualification wise Estimated Marginal Means- TE 42
4.3.1.3 Two-Way ANOVA – TE 43
4.3.2.1 Gender wise Estimated Marginal Means- Reliability 43
4.3.2.2 Education Qualification wise Estimated Marginal Means- 44
Reliability

4.3.2.3 Two-Way ANOVA – Reliability 44


4.3.3.1 Gender wise Estimated Marginal Means- Service Content 45
4.3.3.2 Education Qualification wise Estimated Marginal Means- SC 45
4.3.3.3 Two-Way ANOVA – SC 45
4.3.4.1 Gender wise Estimated Marginal Means- Customer Support 46
4.3.4.2 Education Qualification wise Estimated Marginal Means- CS 46
4.3.4.3 Two-Way ANOVA – CS 47
4.3.5.1 Gender wise Estimated Marginal Means- Ease of Use 47
4.3.5.2 Education Qualification wise Estimated Marginal Means- EU 48
4.3.5.3 Two-Way ANOVA – EU 48
4.3.6.1 Gender wise Estimated Marginal Means- Safety and Security 49
4.3.6.2 Education Qualification wise Estimated Marginal Means- SS 49
4.3.6.3 Two-Way ANOVA – SS 49
4.4.1 Mean ranks obtained for the problems faced by the IB Service 51
Users

4.4.2 Friedman Test 51


4.5.1 Education Qualification-wise mean ranks on Security Features of 52
IB services

4.5.2 Kruskal Wallis Test 54

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CHAPTER 1
INTRODUCTION

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INTRODUCTION

Banking sector plays a significant role in the development of an economy. The advent of
Information Technology (IT) and its convergence with communication technology have
drastically changed the landscape of banking services across the globe. Over the past few
decades, banks all over the world have been investing substantial amounts of money in IT
with the avowed objectives of improving operational efficiency, competitive position and
product innovation. The use of IT in the banking sector has contributed to the emergence of
more flexible and user friendly Self Service Banking Technologies (SSBT) to address the
rapid and changing needs of banking customers. It has changed the face of global banking
sector radically altering the manner in which customers conduct their banking transactions.
Indian banking sector too has followed the same path and the gap between Indian banks and
their counterparties in the technology advanced countries is vanishing.

The banking sector reforms initiated in India in the early 1990s revitalized the banking
sector. The private and foreign banks brought new technologies and rendered technology-
based world class quality services to customers through ATMs, credit cards, Internet
Banking, Mobile Banking. World class quality service in banking was mirage to Indian
customers and the service of private and foreign banks was a delight for them. They
received wide patronage from younger generations and emerging entrepreneurs. Gradually,
these tech-savy banks started snatching customers from public sector banks and they felt
the heat and realized that if they do not follow the path of these banks, they would be
thrown out from the banking scene within no time. Thus, the entry of new generation tech-
savy banks has resulted in a paradigm shift in the ways of banking in India and paved the
way for extensive use of IT in the banking sector.

The beginning of empowerment of banking customers for their own transactions started
with the evolution of ATMs as a delivery channel. The emergence of Self Service Banking
technologies (SSBT) such as ATM, Internet Banking, and mobile Banking ushered the
concept of anytime and anywhere banking. With the advent of internet, it becomes easy for
banks to share the databases and maintain a centralized database at a low cost. Internet
facilitated banks to create their own web pages through the web browsers even while sitting
at home. This kicked off Internet Banking way back in 1996.

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Internet Banking refers to systems that enable bank customer to get access to their accounts and
general information on bank products and services through the use of bank’s website, without
the intervention or inconvenience of sending letters, faxes, original signatures, telephone
confirmations. Pikkarainen et al., (2004) defines Internet Banking as an “Internet portal,
through which customers can use different kinds of banking services ranging from bill payment
to making investments”. Thus Internet Banking is the use of internet by banking customers for
transacting their banking transactions. In other words, it is the use of internet by bank to deliver
banking services to customers irrespective of their geographical location. It is the delivery of
traditional ‘brick and mortar’ banking services via non personal communication channel, viz.,
internet. The cost handling a banking transaction at a traditional branch is estimated to be 100
times higher than on the internet, so Internet Banking will soon expand. The main advantage of
IB for banks is that the cost per transaction is even lower than those of an ATM. This is
primarily because Internet banking as a delivery channel does not require physical
infrastructure, thus saving on prohibitive real estate costs. Thus, banks are trying to get
customers to switch over to this mode of banking.

Customer Satisfaction

Customers are the king of market and customer satisfaction becomes a major area of
marketing. Satisfaction is a person’s feeling of pleasure or disappointment resulting from
comparing a product performance (outcome) in relation to his or her expectations.
Customer satisfaction has been recognized as an important element that drives customer
retention, loyalty and post-purchase behavior of customers. It is well documented that the
measurement of customer satisfaction regarding the service quality of firms is a necessary
means by which organizations delve into the minds of its customer for useful feedback that
could form the basis for effective marketing strategy.

Banks today know better than anyone the opportunities and the risks they face in an ever
changing competitive environment. In offering e-commerce products, banks some key
advantage over potential competitors. E-commerce would create opportunities for banks to
strengthen their relationship with customers. The main purpose of the study is to gain better
understanding of the customer satisfaction measurement of Internet Banking Service
facilities users.

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STATEMENT OF PROBLEM

Customer satisfaction is a complicated mix of “hardware” (technology, product, price,


quality etc.) and “software” (attitude, responsiveness, deliverance, communication etc.).
Today’s customers are not satisfied with care and courtesy alone, they expect concern and
commitment. In this competition environment not the oldest, not the strongest and not the
first can survive, but only the “best” can survive.

The success of Internet Banking not only depends on the technology but also on the large
extend the attitude, commitment and involvement of the operating at all levels and how far the
customers reap the benefits from Internet banking services. It is crucial for banks that offer IB
services to periodically and consistently measure the satisfaction of their customers.

The purpose of this study is to examine the customer satisfaction with various service
quality dimensions.

OBJECTIVES

1) To identify the factors affecting customer satisfaction on Internet Banking


service quality
2) To evaluate the satisfaction level of Internet Banking users.
3) To examine the major problems faced by users while using Internet Banking services

4) To identify the level of trust and awareness level on the security features of
Internet Banking

SIGNIFICANCE OF THE STUDY

Internet has established its role as a powerful economic force multiplier with a new study
projecting that its contribution to India’s GDP will explode to $100 billion (Rs 5 lakh crore) by
2016. The increasing usage of internet in Kerala is evident from the fact in the previous years.
People of Kerala are becoming e-literate through ‘Akshaya’ project undertaken by Govt. of
Kerala in 2005, which imparts training to one person from one family to make people aware of
the basics and scope of IT, hands-on-skill in operating a computer and use of internet. Both
availability of access to internet and e-literacy are essential prerequisites for the adoption of
internet banking. More access to computers and the internet, the greater is the

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possibility of the use of internet banking. Similarly, the more people are becoming e-
literate, the more is the possibility of doing internet banking.

At present, public utility service providers are encouraging their customers to make
payment of their utility bills online. It is hoped that just as ATMs saw a period of inaction
before they were accepted by Indian masses, Internet Banking too would be accepted once
customers realize the possibilities and potentials of IB. However, research studies indicate
that customers’ security and risk concerns are the major inhibitors to the adoption of IB.
therefore, in order to ally the apprehensions of customers about the risk associated with the
use of IB, the providers need to educate and enlighten customers regarding the safe use of
IB by asking them to take the required precautions.

In the wake of the above, it is an opportune time to conduct a customer centric study on IB.
A review of literature revealed that a number of studies have been carried out in India and
abroad in relation to adoption, rationales and benefits of IB. However, a comprehensive
research investigating the extent of IB use, precautions taken by IB users for safe banking
over internet, awareness and trust of customers on the security features adopted by banks to
guard them against the risk of fraud, the service quality dimensions and their effect on
customer satisfaction, problems encountered by IB users during service delivery etc. Hence,
the present study is quite relevant and timely from the point of view of both academic and
banking industry.

RESEARCH METHODOLOGY

Research methodology refers to the theoretical analysis of the methods appropriate to a


field of study or to the body of methods and principles particular to a branch of knowledge.

Data sources

The study makes use of primary and secondary data. The primary data is collected from the
IB users through a structured questionnaire. Secondary data collected from various sources
like Articles, websites, Lecture books etc

Period of study

The study is conducted for a period of 21 days from 2nd week of April 2015.

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Research Instrument

A well-structured questionnaire was prepared with a view to collect information from


Internet banking Users. The questionnaire consists four parts.

1. Demographic Profile of Respondents


2. IB service Quality Dimensions
3. Problems faced by IB Users
4. Security Features available in IB

Population

Population comprises all the customers who were using Internet Banking Services in
Palakkad.

Sample size

Due to the limited period of study, only 100 customers selected as sample unit from the
population. The study is conducted on the basis of the responds of the selected sample and
findings are drawn based on their responds.

Method of sampling

Random Sampling Method is used for selecting the Sample Unit.

Type of analysis

Bi-variable analysis was done for establishing relationship among the variables under study.

Tools used for analysis

1. Friedman Test

The Friedman test is a non-parametric statistical test developed by the U.S economist
Milton Friedman. Similar to the parametric repeated measures ANOVA, it is used to detect
differences in treatments across multiple test attempts. The procedure involves ranking each
row (or block) together, then considering the values of ranks by columns. Applicable to
complete block designs, it is thus a special case of the Durbin Test.

In this study, it is used for testing the variation of the rank preference of the customers
towards the reason for using IB and the problems faced by IB users.

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2. Two-way ANOVA

In statistics, the two-way analysis of variance (ANOVA) is an extension of the one-way


ANOVA that examines the influence of two different categorical independent variables on
one continuous dependent variable. The two-way ANOVA not only aims at assessing the
main effects of each independent variable but also if there is any interaction between them.

In this study, two-way ANOVA is used to test the gender and Education Qualification wise
Satisfaction of customers on the IB service quality.

3. Kruskal-Wallis Test

The Kruskal-Wallis one-way ANOVA by ranks (named after William Kruskal and W. Allen
Wallis) is a non-parametric method for testing whether samples originate from the same
distribution. It is used for comparing two or more samples that are independent, and that
may have different sample sizes and extends the Mann-Whitney test to more than two
groups. The parametric equivalent of the Kruskal-Wallis test is the one-way ANOVA.

Here, the test is used to test the mean rank preference of users by Education Qualification
wise as to their level of trust on security features available in IB.

LIMITATIONS OF THE STUDY

1. Selected Sample is limited to 100. Hence findings cannot be generalized.


2. Respondents may be biased. So the collected data may not be reliable
3. Customers’ preferences and opinions are supposed to change from time to time

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CHAPTER 2
LITERATURE REVIEW

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Introduction:

Generally, a researcher conducts and surveys the related literature in order to review the
present status of a particular research topic. From the survey of literature, a researcher is
able to know the quantum of work already done on his research topic so far not touched, or
yet to be undertaken. The overview of literature at the national or an international level is to
be researched with the help of research reports, articles, books and other materials.
The major benefits of literature reviews are: firstly, helps the researcher in avoiding duplication
of efforts on the same research topic. Secondly, helps the researcher in adopting methodologies
used successfully by other researchers, writers and policy makers. Thirdly, suggests new
approaches in planning, organizing the investigation of research topic. Fourthly, helps to narrow
down the research problem more clearly and sixthly, assists investigators to develop firm
understandings of theoretical implications of proposed inquiries.
This study contributes to literature by focusing on the measurement of Customer
Satisfaction of Internet Banking in Western India. The aim of literature reviews is to justify,
rationale of an ensuring research study, provides an overview of historical perspectives and
to bring to the light the research trends and problems.

Rahmath Safeena et al(2011) found that banks need to highlight the benefits of IB, make
IB easy to use, and enhance IB security to improve consumers’ trust. They also need to
make the consumers aware about the system by providing them about the details of the
benefits associated with it and also ensuring security of the system. Banks can highlight
benefits such as IB conveniences in their promotional and advertising activities. The IB
interface could be made simple. Banks also need to engage in security enhancement
activities such as encryption, firewall, and user protection and authenticity.
Trust is one of the more influential factors, implying that controlling the risk of online
banking is more important than providing benefits. This finding is particularly important for
managers as they decide how to allocate resources to retain and expand their current
customer base. However, building a risk free online transaction environment is much more
difficult than providing benefits to customers.
Therefore, online banking companies need to search for risk-reducing strategies that might
assist in inspiring high confidence in potential customers. This study suggests that they should
consider focusing on the prevention of intrusion, fraud and identity theft. In addition, this study
suggests that online banking companies could develop trust-building mechanisms

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to attract customers, such as statements of guarantee, increased familiarity through
advertising, and long-term customer service. The proposed model makes an important
contribution to the emerging literature on e-commerce, especially with regard to online
banking.

Dixit N. & Datta S.K., (2010) in their study, they found that country like India, there is
need for providing better and customized services to the customers. Banks must be
concerned the attitudes of adult customers with regard to acceptance of online banking. It is
shows that adult customers are more reluctant to join new technologies or methods that
might contain little risk. It’s also important to note that some adult customers are interested
in online banking; however, they do not possess the necessary computer literacy to conduct
it. In addition banks should design the website to concern security and privacy issues. The
recommendations to the banks are that they have to increase the level of trust between
banks’ website and customers. Because customer perception on security and privacy aspect
have been seen in the literature. The importance of security and privacy for the acceptance
of internet banking has been noted in many banks study and found that people have weak
understanding of internet banking, although they are aware about risk. Banks noted that
although consumer confidence in their bank was strong yet their confidence in the
technology was weak through many studies. It is clear those adult customers are ready to
adopt online banking if banks take necessary action. There are following strategies should
be applied by banks. Banks should ensure that online banking is safe and secure for
financial transaction like as traditional banking, Banks should organize seminar and
conference to educate the customer regarding uses of online banking as well as security and
privacy of their accounts, Some elder customers are hindered by lack of computer skills.
They need to be educated on basic skills required to conduct online banking,
Banks must emphasize the convenience that online banking can provide to elder people, such as
avoiding long queue, in order to motivate them to use it, Banks must emphasize the cost saving
that online can provide to the elder people, such as reduce transaction cost by use of online
banking. Adult customer always prefers advanced technology but sometimes lack of knowledge
they are unable to access such technologies. The fact that people have positive perceptions
about online banking should be treated with great value. This is because one bad experience can
result in customer discontinuation of the E-banking service (Jun & Cai, 2001).

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Rod Michel et al (2009), Their outcome presented a model to explain how three dimensions of
internet banking service quality influence perceptions of overall internet banking service
quality, and how these overall perceptions of internet service quality influence customers’
satisfaction. All hypotheses were confirmed albeit with H3 marginally. Our results suggest that
online information system quality is a significantly stronger predictor of overall internet
banking service quality than both online customer service quality and banking service product
quality individually and when combined. The significant relationship between online customer
service quality and overall internet banking service quality indicates that the quality of customer
service is important for banks in the context of internet banking. Even in the absence of face-to-
face interactions, reliability, responsiveness, tangibles and empathy are still important to
customers. These dimensions directly affect customer perceptions of overall internet banking
service quality which influences overall customer satisfaction with the bank. Online
information system quality is also significantly related to overall internet banking service
quality perceptions. A high-performance information system enables customers to conduct
banking transactions on their own through the computer system. Without direct interaction with
bank staff, ease of use, accuracy, security, timeliness, contents and aesthetics are critical to
enhancing customer perception of overall internet banking service quality. The strong positive
association between overall internet banking service quality and customer satisfaction suggests
that when overall internet banking service quality is perceived to be high, customers are more
likely to be satisfied with their online service and consequently will be more satisfied with their
bank. Overall, the contribution that this research makes is in examining five relevant and
important constructs in one model. The research findings suggest a number of implications for
online banking services management. This includes the need for managers to acknowledge that
the provision of online service quality is an expectation of bank customers.

Khan M.S. & Mahapatra S.S., (2009), explored the service quality of internet banking
operative in India from customer’s perspective. It is observed that customers are satisfied with
the reliability of the services provided by the banks but are not very much satisfied with the
dimension ‘User friendliness’. A seven-dimension model using regression analysis is developed
for measuring the overall service quality of i-banking. The result indicates that the two
dimensions, viz. ‘Privacy/Security’ and ‘Fulfillment’ are not contributing significantly towards
the overall service quality. This is an implication that the customers feel that bankers fail in
providing the services on these two dimensions satisfactorily. It is also observed that

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the opinion of male and female of business class differs from the other classes. The I-
banking is going to be very crucial for India, having increasing percentage of younger
generation population with computer literacy. Since research on service quality in i-banking
is still in its infancy and the relevant literature is scarce, therefore the insight gained in this
study may offer a foundation for future research on self-service technology and provide
useful recommendations to the bankers for improving the i-banking services.
The limitation of this study is that the result should not be generalized, as the service
quality of i-banking has been tested in urban India. Furthermore, a small sample may not be
the representative of the whole population and hence, in future, the research can be
conducted by taking a large sample to facilitate a robust examination of the service quality
of the i-banking. The future study can also be conducted to identify the relative importance
of each dimension. The extension of this study can also include the providers (bankers)
perspective to have a better understanding of the problem domain. Validation of model and
extension of the results to other industries and also to different cultures are some of the
future directions in which the academics and the practitioners can work with to enrich the
service quality literature in i-banking.

Lio Z. & Cheung M.T., (2008), the study conclude that Internet banking to become
significantly more important in the increasingly technology and information-based global
economy. Financial institutions must therefore deliver ever-better service quality in their online
operations and products. Given that a large number of service-quality attributes can potentially
affect consumer attitudes toward Internet banking, the theory of bounded rationality suggests
that the high decision cost entailed in the pursuit of service-quality enhancement in each and
every direction would be reduced if the opportunity set is rationally made smaller. To this end,
we have proposed a framework under which service-quality attributes are reduced to a core
subset on the basis of both analytical and empirical considerations. The resulting core
framework can then be applied to decision- cost-effective and empirically prioritized
management in Internet banking, especially with regard to market development. Significant
analytical and statistical grounds exist to justify the introduction of perceived usefulness, ease
of use, reliability, responsiveness, security, and continuous improvement into the core subset.
The idea of empirically testing bounded-rational model construction can also be extended to
evaluate re-specification of the core subset in response to shifts in the business and/or
technological environment. If bank-user perceptions and preferences are found to change with
regard to certain core attributes, empirical results

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obtained in this exercise can be exploited by marketing managers to attract more customers
to online banking.

Srivastava, (2007), reveals that the perception of the consumers can be changed by
awareness program, friendly usage, less charges, proper security, and the best response to
the services offered. The study also provides the kind of correlation between different
factors. As per our basic assumptions we consider only those consumers who know how to
use Internet and have an access to Internet, and our study considered only the situation
wherein banks provide Internet banking of their colleagues or friends who surround him
using Internet banking then it may influence his decision to follow Internet banking option.

Sohail et al (2007), the results of the factor analysis in the present study produced three
dimensions. While this result reveals that “efficiency and security” is the most influencing
factor in users’ evaluation of service quality, the factor group produces a combination of
diverse measures which may be due to the highly correlated nature of service quality
dimensions. Efficiency in internet banking mainly involves download speed, which in turn
involves users in completing a transaction quickly. Findings of the present study support the
results of research by Hoffman and Novak (1996), which a significant correlation between
web site download speed and perception of superior service quality. While speed is of
concern to users, other important factors are the ease of acquiring needed information and
the organization of the information on the site itself.
Banks should strike a balance between attractiveness and speed, ensuring that there is no usage
of extensive high-resolution graphics. The role of host server is also important as this
significantly affects efficiency. Technological developments in recent times have greatly
assisted banks, as the speed of downloading has increased in Saudi Arabia. Security, which
involves protecting users from the risk of fraud and financial loss, has been another important
issue in safe use of the internet when conducting financial transactions in Saudi Arabia. A
number of studies have pointed this out as a key evaluative criterion in online services (for
example Culnan and Armstrong, 1999; Hoffman et al., 1999; Quelch and Klein, 1996). Banks in
Saudi Arabia have used numerous features to boost the confidence of online user, such as
advanced encryption technology, employing a method whereby five minutes of inactivity
automatically logs users off the account or requires users to provide a combination of different
unique identifiers. The second important factor in internet banking users’ evaluation of service
quality as identified in this study is labeled “fulfillment”. In an online context we

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include the dimensions of technical reliability under this factor. This finds support in the
work of (Zeithaml et al., 2002). The findings of this study are supported by Wolfin barger
and Gilly (2003), who found that reliability/ fulfillment ratings were the strongest predictor
of customer satisfaction and quality and the second strongest predictor of loyalty/intentions
to repurchase at a site. Reliability has also been cited as an important factor in electronic
service quality (Palmer et al., 2000). Finally, the third factor identified in this study is that
of responsiveness, which is deemed important in evaluating internet service quality.
Measurement of service quality generally for service delivery through web sites and
particularly for online banking services is in its early stages; published scholarly literature
is minimal, and hence it is difficult to make comparisons

Prabha, Divya et al, (2006), in their study analyzed the service quality perception of the
corporate customers in Coimbatore regarding the services provided by their banks. For this
study they considered both product and service based on sectors and SERVQUAL scale
based questionnaire for the survey. By this study it has been revealed that even though
customers are more satisfied with the competence and customer orientedness dimensions of
service quality, still banks need to focus upon the aspects of communication, modernization
and quickness of service
The study conducted by Man Siu, Noel Yee et al. (2005)" was an attempt to examine
customer's service quality perceptions in internet banking as well as the impact of these on
customer satisfaction and future consumption behaviour. The study was based on four
dimensions of service quality viz., credibility, efficiency, problem handling and security.
The results of the study showed that all dimensions except security are important in
determining overall service quality perceptions, credibility, problem handling and security
are important on customer satisfaction and security and efficiency are significantly
associated with future consumption behaviour. It concluded as, technically functioning
websites and quick confirmations are the essential elements in satisfying customer needs.

Siu et al, (2005), the findings from this study provide initial direction in determining the
optimum service quality attributes to focus on in evaluating Internet banking service
quality. The conceptual framework for this research is based on the dimensions proposed by
Zeithaml et al. (2000, 2002).
Four dimensions were generated in the current study, namely credibility, efficiency, security and
problem handling. Only one dimension, efficiency, was found to have remained the same

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as the original construct. New factors labeled credibility, security and problem handling
were formed. The credibility factor had the highest mean score, and this indicates that
Internet banking users are most impressed by technically functioning web sites and quick
confirmations. Bank managers need to emphasize the credibility aspect of their services. On
the other hand, the problem handling factor showed the lowest mean score, indicating that
most of the respondents disagreed that the bank would compensate them for problems their
service had created. Problem handling is related to what Zeithaml et al. (2002) describe as a
recovery dimension. In routine interactions with sites, consumers seem not to be concerned
about the availability of online customer service representatives or the compensation policy
of Internet banks.
However, when customers confront problems and questions, such dimensions would be
used in evaluating electronic service quality. Therefore, it is necessary for practitioners to
investigate present problem handling policies to identify perception gaps between
customers and management. This will help to inspire customers’ confidence in using
Internet banking services. Credibility, problem handling and efficiency have been shown to
be moderately good predictors of overall service quality. The most significant correlation
was found in the efficiency factor. The ease and speed of accessing and using a web site is a
vital factor in evaluating overall service quality. These results are consistent with those of
previous studies (Zeithaml, Parasuraman and Malhotra 2001) that efficiency is the core
dimension in electronic service quality.
This may be explained by the fact that too much information and graphics can be confusing
and would slow down transaction speed. In the case of a pure service such as Internet
banking, service quality is generally believed to be the most important determinant of
customer satisfaction. However, the results indicate that service quality dimensions have
only weak predictive power in terms of the relationship between the overall service quality
and customer satisfaction. The strongest association is with the credibility dimension. This
shows that technically functioning web sites and quick confirmations are the essential
elements in satisfying customer needs. Meeting customer expectations alone is no longer
enough. Bank managers should delight their customers by exceeding their expectations to
enhance customer satisfaction. Such a principle could be applied to technology-based
service encounters such as those in Internet banking.

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CHAPTER 3
THEORETICAL FRAMEWORK

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3.1. The Growth of Internet Banking and common products

Internet Banking is a product of e-commerce in the field of banking and financial


services. In what can be described as B2C domain for banking industry, Internet Banking
offers different online services like balance enquiry, requests for cheque books, recording
stop-payment instructions, balance transfer instructions, account opening and other forms
of traditional banking services.

Mostly, these are traditional services offered through Internet as a new delivery channel.
Banks are also offering payment services on behalf of their customers who shop in different
e-shops, e-malls etc. Further, different banks have different levels of such services offered,
starting from level-1 where only information is disseminated through Internet to level-3
where online transactions are put through. Considering the volume of business e-commerce,
particularly in B2B domain, has been generating, it is natural that banking would position
itself in an intermediary role in settling the transactions and offering other trade related
services. This is true both in respect of B2C and B2B domains.

Besides, the traditional role of financial intermediary and settlement agents, banks have
also exploited new opportunities offered by Internet in the fields of integrated service
providers, payment gateway services, etc. However, the process is still evolving and banks
are repositioning themselves based on new emerging e-commerce business models.

In B2B scenario, a new form of e-commerce market place is emerging where various
players in the production and distribution chain are positioning themselves and are
achieving a kind of integration in business information flow and processing (STP or near
STP) leading to efficiencies in the entire supply chain and across industries. Banks are
positioning themselves in such a market in order to be a part of the financial settlements
arising out of transactions of this market and providing wholesale financial services. This
needs integration of business information flow not only across the players in the supply
chain, but with the banks as well.

With the integration of business information flow and higher degree of transparency, the banks
and other financial services institutions have lost some of the information advantage they used
to enjoy and factor in to pricing of their products. However, such institutions have

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the advantage of long standing relationships, goodwill and brand, which are important
sources of assurance in a virtual market.

Banks are in fact, converting this goodwill into a business component in e-commerce
scenario in providing settlement and other financial services. Some banks have also moved
to providing digital certificates for transactions through e-markets. Banks’ strategies in B2B
market are responses to different business models emerging in e-commerce.

There is no definite answer as to which approach is appropriate. Perhaps it depends on the


type of market the bank is operating, its existing competencies and the legal and regulatory
environment. It is, however, sure that e-banking is evolving beyond the traditional limits of
banking and many new products / services are likely to emerge as ecommerce matures.

3.2 Internet Banking: The Indian Scenario:

"Use of the Internet for banking has seen a massive rise in the 2010-11 survey, taking the
overall number of bank consumers who use the Net to close 7percent of the total bank
account holders -- a seven-fold jump since 2007 -- even as for the first time in the past 13
years, branch banking has come down by a full 15 percentage points during the same period

3.2.1 The entry of Indian banks into Net Banking:

Internet banking is a medium of delivery of banking services and as a strategic tool for
business development, has gained wide acceptance internationally and is fast catching up in
India with more and more banks entering the fray. India can be said to be on the threshold
of a major banking revolution with net banking having already been unveiled. A recent
questionnaire, to which 46 banks responded, has revealed that at present, 11 banks in India
are providing Internet banking services at different levels, banks propose to offer Internet
banking in near future while the remaining 13 banks have no immediate plans to offer such
facility.

At present, the total Internet users in the country are estimated at 9 lakh. However, this is
expected to grow exponentially to 90 lakh by 2003. Only about 1percent of Internet users did
banking online in 1998. This increased to 16.7percent in March 2000. The growth potential is,
therefore, immense. Further incentives provided by banks would dissuade customers from
visiting physical branches, and thus get ‘hooked’ 90 to the convenience of arm-chair banking.
The facility of accessing their account from anywhere in the world by using a home computer

25
with Internet connection, is particularly fascinating to Non-Resident Indians and High Net
worth Individuals having multiple bank accounts.

Costs of banking service through the Internet form a fraction of costs through conventional
methods. Rough estimates assume teller cost at Re.1 per transaction, ATM transaction cost
at 45 paise, phone banking at 35 paise, debit cards at 20 paise and Internet banking at 10
paise per transaction. The cost-conscious banks in the country have therefore actively
considered use of the Internet as a channel for providing services. Fully computerized
banks, with better management of their customer base are in a stronger position to cross-sell
their products through this channel.

3.2.2 Products and services offered

Banks in India are at different stages of the web-enabled banking cycle. Initially, a bank,
which is not having a web site, allows its customer to communicate with it through an e-
mail address; communication is limited to a small number of branches and offices which
have access to this e- mail account. As yet, many scheduled commercial banks in India are
still in the first stage of Internet banking operations.

With gradual adoption of Information Technology, the bank puts up a web-site that provides
general information on the banks, its location, services available e.g. loan and deposits
products, application forms for downloading and e-mail option for enquiries and feedback.
It is largely a marketing or advertising tool. For example, Vijaya Bank provides information
on its web-site about its NRI and other services. Customers are required to fill in
applications on the Net and can later receive loans or other products requested for at their
local branch. A few banks provide the customer to enquire into his demat account
(securities/shares) holding details, transaction details and status of instructions given by
him. These web sites still do not allow online transactions for their customers.

Some of the banks permit customers to interact with them and transact electronically with
them. Such service include request for opening of accounts, requisition for cheque books,
stop payment of cheques, viewing and printing statements of accounts, movement of funds
between accounts within the same bank, querying on status of requests, instructions for
opening of Letters of Credit and Bank Guarantees etc.

With gradual adoption of Information Technology, the bank puts up a web-site that provides
general information on the banks, its location, services available e.g. loan and deposits

26
products, application forms for downloading and e-mail option for enquiries and feedback.
It is largely a marketing or advertising tool.

The race for market supremacy is compelling banks in India to adopt the latest technology
on the Internet in a bid to capture new markets and customers.

3.3 Internet Banking and its various types:

Currently, there are three basic kinds of Internet banking that are being employed in the
market place:

Information:

This is the most basic level of Internet banking. The bank has marketing information about
its products and services on a stand – alone server. This level of Internet banking service
can be provided by the bank itself or by sourcing it out. Since the server or Web site may be
vulnerable to alteration, appropriate controls must therefore be in place to prevent
unauthorized alterations to data in the server or web site.

Communication:

This type of Internet banking allows interaction between the bank’s systems and the customer. It
may be limited to electronic mail, account inquiry, loan applications, or static file updates. The
risk is higher with this configuration than with the earlier system and therefore appropriate
controls need to be in place to prevent, monitor, and alert management of any unauthorized
attempt to access bank’s internal network and computer systems. Under this system the client
makes a request to which the bank subsequently responds.

Transaction:

Under this system of Internet banking customers are allowed to execute transactions.
Relative to the information and communication types of Internet banking, this system
possesses the highest level of risk architecture and must have the strongest controls.
Customer transactions can include accessing accounts, paying bills, transferring funds, etc.
These possibilities demand very stringent security.

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3.3.1 Types of Services Available:

Net banking is a web-based service that enables the banks authorized customers to access
their account information. It allows the customers to log on to the banks website with the
help of bank’s issued identification and personal identification number (PIN).

The banking system verifies the user and provides access to the requested services, the range of
products and service offered by each bank on the internet differs widely in their content. Most
banks offer net banking as a value-added service. Net banking has also led to the emergent of
new banks, which operate only through the internet and do not exists physically, Such banks are
called “virtual” banks or “Internet Only” banks. A couple of years ago, there was a belief even
among bankers that customers opening new accounts wanted the online banking facility, just to
‘feel good’ and very few of them actually used that services.

Today, bankers believe that the trend from ‘nice to have’ is changing to ‘need to have’ .after all
it depends on how busy a person is. Services provided through Internet Banking

1) Account information

2) E-cheques (Online Fund Transfer)

3) Bill Payment Service

4) Requests and Intimations

5) Demat Account share trading.

Through Internet banking, customers can not only get account balance and see statements
of account online but they can also transfer funds, order demand drafts, pay utility bills etc.
Following types of main transactions or operations can be performed through. Internet
banking:

Account Information:

Provide summary of all bank accounts. Allow transaction tracking which enables retrieval
of transaction details based on cheque number, transaction amount, and date. Provide
account statement and transaction reports used on user-defined criteria. Customers can even
download and print the statement of accounts.

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Funds Transfer (E-Cheque):

Customer can transfer funds: Transfer funds between accounts, even if they are in different
branches’ cities Customer can also transfer funds to any person having an account with the
same bank anytime, anywhere, using third party funds transfer option.

Bill Presentment and Payment:

Banks Bill Payments is the easiest way to manage bills. A/c holder can pay their regular
monthly bills i.e. telephone, electricity, mobile phone, insurance etc. at anytime, anywhere
for free. Saves time and effort. Make bill payments at customer’s convenience form their
home or office. Lets a/c holders check their hill amount before it is debited form their
account. No debits to account without their knowledge. No more missed deadlines, no more
loss of interest – a/c holder can schedule their bills in advance, avoid missing the bill
deadlines as well as earn extra interest on their money. Track payment history – all
payments to a biller are stored automatically for future reference. No queuing up at
collection centers or writing cheque anymore! Just a few clicks and customers account will
be debited for the exact amount they ask.

Premium:

1. Online Payment for Shopping done on Internet.


2. Loan Applications.
3. Standing Instructions.
4. Request and Intimations.
5. Financial Advice.
6. Credit and Debit Cards.
7. Investment Transactions.
8. Customer Correspondence.
10. Opening Accounts.
11. Insurance.
12. Other Value Added / Premium Services etc.

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3.3.2 Mediums of E-banking: [Various products and services:]

Electronic banking, also known electronic fund transfer (EFT), uses computer and electronic
technology as a substitute for checks and other paper transactions. EFTs is initiated through
devices like cards or codes that let you, or those you authorize, access your account.

Many financial institutions use ATM or debit cards and Personal Identification Numbers
(PINs) for this purpose. Some use other forms of debit cards and personal Identification
Numbers (PINs) for this purpose. Some use other forms of debit cards such as those that
require, at the most, your signature or a scan. The federal Electronic Fund Transfer Act
(EFT Act) covers some electronic consumer transactions.

Following are the electronic medium by which services are generally provided by the banks
as a part of e-banking services.

1. Internet Banking

2. ATM (Automatic Teller Machine)

3. Phone Banking

4. Mobile Banking

5. Payment Cards (Debits/Credit Card)

All the above mediums provide services, which can be, also known as “any time any where
banking”. This facilitates the customer of the bank to operate their account from any corner of
the world, without visiting local or any subsidiary branch of their banks. Efforts are made by the
bank not only to provide the facility to the customer, but also to reduce the operational cost of
the bank by providing e- banking services. So with this, banks have to employ less staff and still
would be able to deliver service to the customer, round the corner.

3.3.3 Factors Responsible for Growth of Internet Banking:

Numerous factors including competitive cost, customer service, and demographic


considerations are motivating banks to evaluate their technology and assess their Internet
banking strategies. The challenge for national banks is to make sure the savings from
Internet banking technology more than offset the costs and risks associated with conducting
business in cyberspace.

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Marketing strategies will vary as national banks seek to expand their markets and employ
lower cost delivery channels. Examiners will need to understand the strategies used and
technologies employed on a bank-by-bank basis to assess the risk. Evaluating a bank’s data
on the use of their Web sites, may help examiners determine the bank’s strategic objectives,
how well the bank is meeting its Internet banking product plan, and whether the business is
expected to be profitable.

Competition:

Studies show that competitive pressure is the chief driving force behind increasing use of
Internet banking technology, ranking ahead of cost reduction and revenue enhancement, in
second and third place respectively. Banks see Internet banking as a way to keep existing
customers and attract new ones to the bank.

Cost Efficiencies:

Banks can deliver banking services on the Internet at transaction costs far lower than
traditional brick and mortar branches. The actual costs to execute a transaction will vary
depending on the delivery channel used. The frequently quoted Booz –Allen and Hamilton
study showed that the cost of a customer walking into the branch and using a teller is
US$1.01, where as the cost of conducting the same transaction on the Internet is only a
tenth of the cost. No doubt the ATM is considerably cheaper than a teller, but even so, the
Internet is nearly 3 times cheaper than the ATM usage.

In short, replacing a teller with an Internet channel should in theory, show a 10 fold
increase in the distribution revenue for the bank. This reason alone should be sufficient for
banks to encourage this form of distribution channel.

However, banks should use care in making product decisions. Management should include
in their decision making the development and ongoing costs associated with a new product
or service, including the technology, marketing, maintenance, and customer support
functions. This will help management exercise due diligence, make more informed
decisions, and measure the Success of their business venture.

Geographical Reach:

Internet banking allows expanded customer contact through increased geographical reach
and lower cost delivery channels. In fact some banks are doing business exclusively via the

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Internet. They do not have traditional banking offices and only reach their customers
online. Other financial institutions are using the Internet as an alternative delivery channel
to reach existing customers ads attract new customers.

Branding:

Relationship building is a strategic priority for many national banks. Internet banking
technology and products can provide a means for national banks to develop and maintain an
ongoing relationship with their customers by offering easy access to a broad array of
products and services. By capitalizing on brand identification and by providing a broad
array of financial services, banks hope to build customer loyalty, cross sell, and enhance
repeat business.

Customer Demographics:

Internet banking allows national banks to offer a wide array of options to their banking
customers. Some customers will rely on traditional branches to conduct their banking
business. For many, this is the most comfortable way for them to transact their banking
business. Those customers place a premium on person to person contact other customers are
early adopters of new technologies that arrive in the marketplace. These customers were the
first to obtain PCs and the first to employ them in conducting their banking business. The
demographics of banking customers will continue to change.

Round the Clock Access:

Internet banking services are available on 24 x 7 bases to the customers without charging
any extra cost from the customers. And one can access the bank from anywhere in the
world at one’s own convenience without owning your own PC.

Definition and features of independent variables

Reliability

Reliability is defined as the firm performs the services right the first time and the firm honors its
promises. It involves in accuracy in billing, keeping records correctly, performing the service at
the designated time. In their further research, they also find the reliability consists of providing
services as promised, dependability in handling customers’ service problems, performing
services right the first time, provide services at the promised time and

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maintaining error-free record. Furthermore, they stated reliability as the most important
factor in conventional service

Transactions Efficiency

Transaction efficiency is the ability of the customers gets in to website, find they desire
product and information associate with it, and check out with minimal of effort. Transaction
efficiency also can understand as performance of Internet banking base on some elements:
up to date information, response time, download time, complete product information,
tutorial/demonstration, and help function.

Customer Support

Customer support including before sell support and after sell supports. Before customer
make decisions, the company should give some support to attract them, let customers feel
they are at home. The relationship is like a good friend not like a business. After customers
buy the services or products, company should solve the problem that customers met or
response customers’ questions immediately and according to the problems, company can
ameliorate them. In the Internet banking industries, support is also important. Not everyone
good at the computer so they need guide how to use. And maybe someone good at
computer, but still have problems, and then they also need support. Sometimes, after
services on the internet, customers might have questions waiting to answer, so he or she
also needs support. So support is very important for customers Service

Safety and Security

Security is defined as the freedom from danger, risk, or doubt. It involves physical safety,
financial security and confidentiality. It consists of employees who instill confidence in
customers, making customers feel safe in their transactions, employees who are consistently
courteous and employees who have the knowledge to answer customer question. Moreover,
security is defined as personal and possessions safety of the customers. It is includes
confidentiality maintained by service providers.

Ease of Use

Ease of use is as the factor influencing the adoption of Internet banking, and related to an
easy-to-remember URL address, well-organized, easy in site navigability, concise and
understandable contents, terms and conditions. Performance refer to product’s primary

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operating characteristic which is based on functional requirement, not taste with is
circumstantial preferences.

Service Content

Service content is all information that provides to customers. For internet banking service,
is mean the content that bank provide to customers through website. High value-added
content is essential

How can I tell if a web page is secure?

Anytime a web page asks you for sensitive information, you need to be able to identify if
the page is secure or not. The ability to recognize a secure web connection is extremely
important as online fraud cases have increased substantially from year to year.

What exactly do we mean by "secure"?

Anytime you view web site information is sent from your computer to the web server and
from the web server to your computer. The transmission of this information is normally sent
in "plain text", meaning anyone would be able to read it should they see it. Now consider
this. Each pieces of information transmitted traverses many computers (servers) to reach its
destination.

How can I tell if a web page is secured?

There are two general indications of a secured web page:

1) Check the web page URL

Normally, when browsing the web, the URLs (web page addresses) begin with the letters
"http". However, over a secure connection the address displayed should begin with "https" -
note the "s" at the end.

2) Check for the "Lock" icon

There is a de facto standard among web browsers to display a "lock" icon somewhere in
the window of the browser (NOT in the web page display area!) For example, Microsoft
Internet Explorer displays the lock icon in the lower-right of the browser window.

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Internet banking has become an easy and convenient way to conduct financial transactions.
But like most things on the internet, the onus of a safe and secure banking experience is on
you, the user.

To make sure that you can sleep soundly at night, here are some steps as follows:

1. Never access your bank from a public computer- Always use your own PC to log in to
your account. Public information may have programs running on them that monitor your
keystrokes, which can be used by people to obtain your account password

2. Don’t fall for phishing- sometimes you might get an innocent email, apparently froim
your bank, requesting you for your account details. It’s a trap. Do not fall for it. A bank will
never ask you for your IB password, your debit card PIN number, or credit card of CVV
number,

3. Log off- Always. Never just close your browser. Follow the instructions on your bank
website to securely log off after each session.

4. Protect your Password are the key to accessing your account. Do not disclose them to
anyone, not even bank employee. Frame a password that is hard to crack – let it not be your
nick name, birthday your spouse’s or kid’s name. Use a combination of letters and numbers,
uppercase and lower case. Also, change your password often.

5. Be wary of fake websites- Always check whether the website at which you log in your
account details is genuine. There are fake websites out there that parade themselves as well-
known bank websites to procure your account details. Some of them are very convincing.
Check the address of the website carefully before typing in your password. Also check for
the 128-bit encryption seal (VeriSign) on the home page that loads up.

6. Close all other websites- before you access your account close their sites. This ensures
that your personal information is nit accessed by any other websites which could be running
some malware

Description of security features in Internet Banking

The various security features incorporated by banks to protect IB users from various risks
associated with IB are given below.

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1. VeriSign: VeriSign symbol is found on the index page of the Internet banking
website of banks, which guarantee that users are dealing with a secure website.
VeriSign is world’s leading Internet Certification Authority
2. Padlock Symbol: Padlock symbol on the internet banking screen is an indication that
the website is legitimate. There is a de facto standard among web browsers to display a
lock icon somewhere in the window of the browser. For example, Microsoft Internet
Explorer displays the lock icon in the lower right of the browser window. Double
clicking on it will display the VeriSign Certificate authenticating the site.

3. The Letter‘s’ in the URL: IB users will know that they are at a secured site when
they see https:// in the address field on the internet browser. It means that the user
name and password typed will be encrypted before sent to bank’s server. The letter
‘s’ in the URL indicate that the website is ‘secured’.
4. Virtual Keyboard: the virtual keyboard is an onscreen keyboard which provides a
mouse based alternative, for entering IB username and password, instead of using
the actual physical keyboard. A virtual keyboard prevents IB username or password
from being stolen, especially while using public computer, such as those available in
internet cafes. Public computers may have software installed over them known as
“Key logger” which stores information about the keys pressed and the pages
accessed. IB users use the mouse to enter the username and password by clicking on
the keys of the Virtual Keyboard rather than typing them using the keyboard.
5. SMS Alert: IB users receive regular SMS alerts from the bank when their account is
credited or debited. Any unauthorized transaction happened in an account is
immediately brought to the notice of IB users through SMS alerts.
6. Sign on Password Expiry: if an IB user is not changing his/her password within a
specified period of time. IB password expires as per the security policy of banks.
This security features forces IB users to change their passwords.
7. Automatic Lockout on Multiple Incorrect Password: To prevent somebody from
guessing any of the IB user’s password and getting unauthorized access to IB
account, the user ID is locked immediately in case of a specified number of (usually
3 times) wrong password entries.
8. Automatic Timeout if Account not Operated for Specified Time: to prevent an
unauthorized person from viewing someone’s net banking account in case an IB user
leave his/her computer idle, the internet session is closed in case of inactivity for a
specified period of time (usually 5 minutes).

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9. Mandatory Use of Special Characters in Password: To prevent somebody from
guessing any of the IB user’s password and getting unauthorized access to IB
account, the password should compulsorily contain a mix of alphabets, numbers and
special characters such as !@#$%^&*(){}. This security feature prohibits IB users
to use personal data as passwords such as name, address, telephone number etc.
which are easily guessable by others.

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CHAPTER 4
ANALYSIS AND INTERPRETATION

38
Analysis of Data

The result of the survey conducted as a part of the research study has been presented and
analyzed in this chapter. Analysis of data is the most skilled task in the research process.
Analysis of data means studying the tabulated material in order to determine inherent facts or
meanings. In other words the analysis means the computation of certain indices or measure or
coefficients along with searching for pattern of relationships that exist among data groups.

The analysis is presented in five parts

1. Demographic profile of respondents


2. Reasons for using IB services
3. Customer satisfaction on IB service quality
4. Problems faced by IB users
5. Level of trust on security features available in IB

Friedman Test, Two-way ANOVA and Kruskal-Wallis Test are used for making these
analyses.

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TABLE 4.1.1

DEMOGRAPHIC PROFILE OF RESPONDENTS

CATEGORY NO.OF CUMULATIVE


RESPONDANTS FREQUENCY
LESS THAN/= 25 24 24
26 TO 30 25 49
AGE 31 TO 40 25 74
GREATER THAN/= 41 26 100
GENDER MALE 64 64
FEMALE 36 100
UP TO PLUS TWO 13 13
GRADUATE 10 23
EDUCATION POST GRADUATE 70 93
QUALIFICATION PROFESSION 7 100
UNEMPLOYED 16 16
PUBLIC SECTOR 25 41
OCCUPATION PRIVATE SECTOR 32 73
BUSINESS/PROFESSION 27 100
LESS THAN/= 10000 21 21
AVERAGE 10001 TO 20000 33 54
MONTHLY INCOME 20001 TO 30000 19 73
GREATER THAN/= 30001 27 100
TYPE OF BANK A/C SAVINGS 77 77
CURRENT 23 100
LESS THAN/= 5 34 34
USAGE OF BANKING 6 TO 10 27 61
SERVICE(YRS) 11TO 15 18 79
GREATER THAN/= 16 21 100
LESS THAN/= 2 31 31
USAGE OF IB 3 TO 5 33 64
SERVICE 6 TO 8 26 90
GREATER THAN/= 9 10 100
LESS THAN/= 3 25 25
AVG MONTHLY 4 TO 7 29 54
USAGE OF IB 8 TO 10 19 73
GREATER THAN/= 11 27 100
VERY GOOD 21 21
ACCESSABILITY OF GOOD 67 88
IB AVERAGE 10 98
POOR 2 100
VERY POOR 0 100
VERY GOOD 16 16
WEBSITE GOOD 62 78
PRESENTATION AVERAGE 20 98
POOR 2 100
VERY POOR 0 100

Table 4.1.exhibit the profile of the sample respondents selected for the study. The
majority of IB users belong to the age group greater than 40. Gender wise classification
shows that out of the 100 respondents, majority (64percent) are male. As to education

40
Qualification 70 percent are post graduate and only 7 percent are professionally qualified.
From the table it can be seen that majority (32 percent) are belong to private sector
followed by business and profession. The monthly income classification of the respondents
reveals that majority of them falls under the income group 10001-20000 and almost 73
percent respondents were receiving less than 30000 as monthly income. The table shows
that 77 percent respondents having Savings bank a/c. the classification of the sample based
on the usage of IB services shows that majority of respondents are using IB for about 3 to 5
years and also, it may be seen that most of them (46 percent) using IB services for almost
8 and above times. From the table it can be seen that majority of respondents have better
perception and opinion about the accessibility of IB services and Website presentation of
Bank.

4.2 Reason for Using IB Services

Using of IB services is influenced by many factors. It might be because of speed,


convenience, transaction efficiency, user friendly characteristics etc…

Friedman test is used to test the following hypothesis.

H0: there is no significant difference in the reason for using IB services of users.
H1: there is significant difference in the reason for using IB services of users.

The test results are presented in the following table.

Table 4.2.1
Mean ranks Obtained for the reason behind in using IB services
Ranks
Mean Rank Rank
SPEED 2.25 2
CONVENIENCE 2.01 *1
TRANSACTION EFFICIENCY 2.49 3
USER FRIENDLY 3.25 4

The mean ranks obtained for the reason behind the using of IB services are stated above.
The lower the ranks, the higher will be the preference or preferable reason. As per table
given that the highest preference is given to convenience (mean rank 2.01), followed by
speed (mean rank 2.25) and transaction efficiency (mean rank 2.49).

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Table 4.2.2: Friedman Test
Test Statistics
N 100
Chi-Square 51.912
Df 3
Asymp. Sig. 0.000**
a. Friedman Test

The chi-square static provides a value of 51.912, which is significant at 5 percent


level of significance (0.000<0.05). Therefore, the null hypothesis of “no difference in the
reason for using IB services among selected users” is rejected. This indicates the variation
in the preference of users in the selection of IB services .

4.3 Customer Satisfaction on IB Service Quality

4.3.1 Two-Way Anova of Transaction efficiency (TE) by Gender and Education


Qualification

The variation of transaction efficiency with regard to gender and Education


Qualification of respondents are analyzed with Two-Way ANOVA and the output is
presented in the following tables.
Table 4.3.1.1 Gender wise Estimated Marginal Means- TE
1. GENDER
Dependent Variable: Transaction Efficiency
GENDER Mean Std. Error 95percent Confidence Interval
Lower Bound Upper Bound
Male 15.715 0.344 15.033 16.397
Female 14.864 0.405 14.059 15.669
Source: primary data
Table 4.3.1.2
Education Qualification wise Estimated Marginal Means- TE
2. Education Qualification
Dependent Variable: Transaction Efficiency
Education Mean Std. Error 95percent Confidence Interval
Qualification Lower Bound Upper Bound
Up to plus two 14.156 0.589 12.986 15.325
Graduate 14.900 0.658 13.593 16.207
Post graduate 15.593 0.257 15.083 16.102
Profession 16.511 0.787 14.948 18.074
Source: primary dat
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Table 4.3.1.3
Two-Way ANOVA – TE
Tests of Between-Subjects
Effects Dependent Variable: Transaction Efficiency
Source Type I Sum of df Mean F Sig.
Squares Square
Gender 24100.668 2 12050.334 2781.177 0.000*
Education 33.714 3 11.238 2.594 0.057
Qualification
Error 411.618 95 4.333
Total 24546.000 100
Source: primary data
*Significant at 5percent level of significance

The test of mean variation of scores for Transaction efficiency of IB among male and
female and among respondents having different Education Qualification wise by using
Two-way Anova shows that Gender-wise variation of mean scores are statistically
significant at 5 per cent level of significant (F=2781.77, DF=2 WITH P=0.00<0.05) while
Education Qualification-wise, it is not statistically significant. Table shows that male have
the high mean score i.e the high mean score for male category signifies high level of
satisfaction towards transaction efficiency of IB service.

4.3.2 Two-Way Anova of Reliability by Gender and Education Qualification


The variation of Reliability with regard to gender and Education Qualification of
respondents are analyzed with Two-Way ANOVA and the output is presented in Table
4.3.2.1, 4.3.2.2 and 4.3.3.3.

Table 4.3.2.1
Gender wise Estimated Marginal Means- Reliability
Gender
Dependent Variable: Reliability
Gender Mean Std. Error 95percent Confidence Interval
Lower Bound Upper Bound
Male 15.755 0.455 14.851 16.659
Female 15.552 0.537 14.485 16.618
Source: primary data

43
Table 4.3.2.2
Education Qualification wise Estimated Marginal Means- Reliability
Education Qualification
Dependent Variable: Reliability
Qualification Mean Std. Error 95percent Confidence
Interval
Lower Bound Upper Bound
Up to plus two 14.714 0.781 13.165 16.264
Graduate 14.000 0.872 12.269 15.731
Post graduate 15.628 0.340 14.953 16.303
Profession 18.271 1.043 16.200 20.342
Source: primary data
Table 4.3.2.3
Two-Way ANOVA – Reliablity
Tests of Between-Subjects Effects
Dependent Variable: Reliability
Source Type I Sum of df Mean Square F Sig.
Squares
Gender 24212.111 2 12106.056 1591.637 0.000*
Education 85.315 3 28.438 3.739 0.014*
Qualification
Error 722.574 95 7.606
Total 25020.000 100
Source: primary data
*Significant at 5percent level of significance

Above Tables shows the satisfaction level on reliability of IB among selected respondents
based on Gender and Education Qualification. Two way Anova is used to test the mean
variation of scores for reliability of IB services between male and female and their
Education Qualification. From the above tables, it is found that gender wise and Education
Qualification wise variations of the mean scores are statistically significant at 5 percent
level of significance (F= 1591.637, 3.739 AND DF= 2, 3 WITH P= 0.000, 0.014 < 0.05)
Table 4.3.2.1 clearly states that male have the high mean score. It implies that male are
highly satisfied with this quality dimension and Table 4.3.2.2 shows that respondents with
Professional Education Qualification have the high mean score i.e they are having high
level of satisfaction as to IB services.

44
4.3.3 Two-Way Anova of Service Content (SC) by Gender and Education
Qualification
The variation of Service Content with regard to gender and Education Qualification of
respondents are analyzed with Two-Way ANOVA and the output is presented in the
following Tables.

Table 4.3.3.1
Gender wise Estimated Marginal Means- SC
GENDER
Dependent Variable: Service Content
Gender Mean Std. Error 95percent Confidence Interval
Lower Bound Upper Bound
Male 15.397 0.399 14.606 16.188
Female 15.150 0.470 14.216 16.084
Source: primary data
Table 4.3.3.2
Education Qualification wise Estimated Marginal Means- SC
EDUCATION QUALIFICATION
Dependent Variable: Service Content
Education Mean Std. Error 95percent Confidence Interval
Qualification Lower Bound Upper Bound
Up to plus two 14.318 0.684 12.961 15.675
Graduate 13.800 0.764 12.284 15.316
POST GRADUATE 15.708 0.298 15.117 16.298
Profession 17.268 0.914 15.454 19.082
Source: primary data
Table 4.3.3.3
Two-Way ANOVA – SC
Tests of Between-Subjects Effects
Dependent Variable: Service Content
Source Type I Sum of df Mean Square F Sig.
Squares
Gender 23964.250 2 11982.125 2054.335 0.000*
Education 71.652 3 23.884 4.095 0.009*
Qualification
Error 554.098 95 5.833
Total 24590.000 100
Source: primary data
*Significant at 5percent level of significance

Above Tables shows the satisfaction level on service content of IB among selected
respondents based on Gender and Education Qualification. Two way Anova is used to test the

45
mean variation of scores for service content of IB services between male and female and
their Education Qualification. From the above tables, it is found that gender wise and
Education Qualification wise variations of the mean scores are statistically significant at 5
percent level of significance (F= 2054.335, 4.095 AND DF= 2, 3 WITH P= 0.000, 0.009 <
0.05) Table 4.3.3.1 clearly states that male have the high mean score. It implies that male
are highly satisfied with this quality dimension and Table 4.3.3.2 shows that respondents
with Professional Education Qualification have the high mean score i.e. they are having
high level of satisfaction as to IB services.

4.3.4 Two-Way Anova of Customer Support (CS) by Gender and Education


Qualification

The variation of Customer support with regard to gender and Education


Qualification of respondents are analyzed with Two-Way ANOVA and the output is
presented in the following Tables.

Table 4.3.4.1
Gender wise Estimated Marginal Means- CS

GENDER
Dependent Variable: Customer support
Gender Mean Std. Error 95percent Confidence Interval
Lower Bound Upper Bound
Male 14.486 0.452 13.590 15.383
Female 13.989 0.533 12.931 15.047
Source: primary data
Table 4.3.4.2

Education Qualification wise Estimated Marginal Means- CS

EDUCATION QUALIFICATION
Dependent Variable: Customer support
Education Mean Std. Error 95percent Confidence Interval
Qualification Lower Bound Upper Bound
Up to plus two 13.943 0.775 12.405 15.481
Graduate 13.500 0.865 11.782 15.218
POST GRADUATE 14.686 0.337 14.017 15.356
Profession 14.822 1.035 12.766 16.877
Source: primary data
46
Table 4.3.4.3
Two-Way ANOVA – CS
Tests of Between-Subjects
Effects Dependent Variable: Customer Support
Source Type I Sum of df Mean Square F Sig.
Squares
Gender 21176.293 2 10588.147 1413.600 0.000*
Education 17.138 3 5.713 0.763 0.518
Qualification
Error 711.569 95 7.490
Total 21905.000 100
Source: primary data
*Significant at 5percent level of significance

The test of mean variation of scores for Customer Support quality of IB among male and
female and among respondents having different Education Qualification wise by using
Two-way Anova shows that Gender-wise variation of mean scores are statistically
significant at 5 per cent level of significant (F=1413.6, DF=2 WITH P=0.00<0.05) while
Education Qualification-wise, it is not statistically significant. Table shows that male have
the high mean score i.e. the high mean score for male category signifies high level of
satisfaction towards customer support quality of IB service.

4.3.5 Two-Way Anova of Ease of Use (EU) by Gender and Education Qualification

The variation of Ease of Use with regard to gender and Education Qualification of
respondents are analyzed with Two-Way ANOVA and the output is presented in the
following tables.
Table 4.3.5.1
Gender wise Estimated Marginal Means- EU
GENDER
Dependent Variable: Ease of Use
Gender Mean Std. Error 95percent Confidence Interval
Lower Bound Upper Bound
Male 16.305 0.422 15.467 17.143
Female 15.601 0.498 14.612 16.589
Source: primary data

47
Table 4.3.5.2
Education Qualification wise Estimated Marginal Means- EU
EDUCATION QUALIFICATION
Dependent Variable: Ease of Use
Education Mean Std. Error 95percent Confidence Interval
Qualification Lower Bound Upper Bound
Up to plus two 14.733 0.724 13.296 16.171
Graduate 15.500 0.809 13.895 17.105
POST GRADUATE 16.057 0.315 15.431 16.682
Profession 17.521 0.967 15.601 19.441
Source: primary data
Table 4.3.5.3
Two-Way ANOVA – EU
Tests of Between-Subjects Effects
Dependent Variable: Ease of Use
Source Type I Sum of df Mean Square F Sig.
Squares
Gender 25704.694 2 12852.347 1965.500 0.000*
Education 39.103 3 13.034 1.993 0.120
Qualification
Error 621.202 95 6.539
Total 26365.000 100
Source: primary data
*Significant at 5percent level of significance

The test of mean variation of scores for Ease of Use of IB among male and female and among
respondents having different Education Qualification wise by using Two-way Anova shows that
Gender-wise, variation of mean scores are statistically significant at 5 per cent level of
significant (F=1965.5, DF=2 WITH P=0.00<0.05) and Education Qualification-wise, it is not
statistically significant. Table shows that male have the high mean score i.e the high mean score
for male category signifies high level of satisfaction towards Ease of Use of IB service.

4.3.6 Two-Way Anova of Safety and Security (SS) by Gender and Education
Qualification

The variation of safety and Security with regard to gender and Education Qualification of
respondents are analyzed with Two-Way ANOVA and the output is presented in the
following tables.

48
Table 4.3.6.1
Gender wise Estimated Marginal Means- SS
GENDER
Dependent Variable: Safety and Security
Gender Mean Std. Error 95percent Confidence Interval
Lower Bound Upper Bound
Male 16.431 .421 15.595 17.266
Female 16.356 .497 15.370 17.342
Source: primary data
Table 4.3.6.2

Education Qualification wise Estimated Marginal Means- SS


EDUCATION QUALIFICATION
Dependent Variable: Safety and Security
Education Mean Std. Error 95percent Confidence Interval
Qualification Lower Bound Upper Bound
Up to plus two 15.518 .722 14.085 16.951
Graduate 14.400 .806 12.799 16.001
POST GRADUATE 16.946 .314 16.323 17.570
Profession 18.709 .965 16.794 20.624
Source: primary data
Table 4.3.6.3
Two-Way ANOVA – SS
Tests of Between-Subjects Effects
Dependent Variable: Safety and Security
Source Type I Sum of df Mean Square F Sig.
Squares
Gender 27689.141 2 13844.570 2128.883 .000
Education 103.055 3 34.352 5.282 .002
Qualification
Error 617.805 95 6.503
Total 28410.000 100
Source: primary data
*Significant at 5percent level of significance

Table 4.3.6.1, 4.3.6.2, 4.3.6.3 shows the satisfaction level on safety and security of IB
among selected respondents based on Gender and Education Qualification. Two way Anova is
used to test the mean variation of scores for safety and security of IB services between male and
female and their Education Qualification. From the above tables, it is found that gender wise
and Education Qualification wise variations of the mean scores are statistically significant at 5
percent level of significance (F= 2128.883, 5.282 AND DF= 2, 3 WITH P= 0.000,

49
0.002 < 0.05). Table 4.3.6.1 clearly states that male have the high mean score. It implies
that male are highly satisfied with this quality dimension and Table 4.3.6.2 shows that
respondents with Professional Education Qualification have the high mean score i.e they
are having high level of satisfaction as to IB services.

4.4 Problems Faced by Users while Using Internet Banking Services

Following are the commonly founded problems faced by the users while using IB services.

1. Inability to login/operate the account


2. Account temporarily locked by bank
3. Transaction failed but amount is deducted
4. Money lost without knowledge
5. Low speed
6. Connection problems due to server errors
7. Personal information leaked out
8. Inadequate customer support from bank employee
9. Transaction details missing
10. Lengthy procedure to complete transaction
11. Inability to get One Time Password due to network error
12. Delay in getting new password in place of present

Friedman test is used to find out the major problems faced by the users among the selected
sample based on their perception and experience and test the following hypothesis too

H0: there is no difference in the perception on the problems faced by the IB users while
using IB service

H1: there is difference in the perception on the problems faced by the IB users while using
IB service

50
Table 4.4.1

Mean ranks obtained for the problems faced by the IB Service Users

RANKS
MEAN RANK RANK
Inability to login of a/c 6.38 6
Account temporarily locked 7.05 8
Transaction failed and amount 7.12 9
Money lost without 8.39 12
Low speed 4.61 1
Connection problems 4.64 2
Personal information leaked 8.02 11
Inadequate customer support 6.66 7
Transaction details missing 7.14 10
Lengthy procedure 6.29 5
Inability to get one time 5.72 3
Delay in getting new 6.02 4

The mean ranks obtained for the problems faced by the users while using of IB services are
stated above. The lower the ranks, the higher will be the major problem. As per table given that
the highest or major problem faced by the users is Low Speed (mean rank 4.61), followed by
Connection Problems (mean rank 4.64) and Inability to get One Time Password
(mean rank 5.72).

Table 4.4.2: Friedman Test


a
Test Statistics
N 100

Chi-Square 135.868

Df 11

Asymp. Sig. 0.000*

a. Friedman Test

The chi-square static provides a value of 135.88, which is significant at 5 percent level of
significance (p = 0.000<0.05). Therefore, the null hypothesis of “no difference in the perception
on the problems faced by users while using IB services” is rejected. This indicates the variation
in the preference or perception on the problems faced by the IB users .

51
4.5 Level of Trust towards the Security Features of IB

Following are the security features available in Internet banking

1. VeriSign
2. Padlock Symbol (PS)
3. Letter ‘s’ in the URL
4. Virtual Keyboard (VK)
5. SMS/Email Alert
6. Sign on Password Expiry (SPE)
7. Automatic Lockout on Multiple Incorrect Password (ALMIP)
8. Automatic timeout if a/c not operated for specific time (ATIANOST)
9. Mandatory use of special characters in password (MUSCP)
10. Address bar turning green (ABTG)

Kruskal Wallis test is used to find the level of trust and to test the following hypothesis

H0: There is difference in the perception on the security features of IB among users having
different Education Qualification

H1: There is no difference in the perception on the security features of IB among users
having different Education Qualification

Table 4.5.1
Education Qualification-wise means ranks on Security Features of IB services

RANKS
QUALIFIACTION N MEAN RANK
Up to plus two 13 46.85
VeriSign Graduate 10 52.00
Post graduate 70 50.61
Profession 7 54.07
Up to plus two 13 51.96
Padlock symbol Graduate 10 47.75
Post graduate 70 50.61
Profession 7 50.64
52
Up to plus two 13 49.92
THE LETTER 's' IN THE Graduate 10 48.00
URL Post graduate 70 49.49
Profession 7 65.29
Up to plus two 13 59.38
Virtual keyboard Graduate 10 32.40
Post graduate 70 52.81
Profession 7 36.71
Up to plus two 13 59.27
Sms/email alert Graduate 10 51.40
Post graduate 70 50.11
Profession 7 36.79
Up to plus two 13 49.81
Sign on password expiry Graduate 10 52.65
Post graduate 70 48.59
Profession 7 67.79
Up to plus two 13 42.04
Automatic lockout on multiple Graduate 10 65.10
password incorrect Post graduate 70 48.29
Profession 7 67.50
Up to plus two 13 48.08
Automatic timeout Graduate 10 55.80
Post graduate 70 49.36
Profession 7 58.79
Up to plus two 13 41.69
Mandatory use of special Graduate 10 51.95
characters in password Post graduate 70 51.09
Profession 7 58.86
Up to plus two 13 56.62
Address bar turning green Graduate 10 54.10
Post graduate 69 49.05
Profession 7 41.21
Source: primary data

53
Table 4.5.2: Kruskal Wallis Test

Chi-Square
LETTER
's' IN
THE SMS/EMAIL
VERISIGN PS URL VK ALERT SPE ALMIP ATIANOST MUSCP ABTG
Chi- .409 .141 2.155 8.423 3.749 3.420 7.918 1.266 2.369 1.820
Square
Df 3 3 3 3 3 3 3 3 3 3
Asymp. 0.938 0.986 0.541 0.038** 0.290 0.331 0.048** 0.737 0.499 0.611
Sig.
a. Kruskal Wallis Test
b. Grouping Variable: QUALIFIACTION
Source:PrimaryData
*Significant at 5 percent level of significance

The Education Qualification wise mean rank table shows that users with professional Education
Qualification have the better perception and high level of trust on all the security features available
in IB except Virtual Keyboard, SMS alert, Automatic Lockout on Multiple Incorrect Password. All
hypothesis except related to Virtual keyboard, Automatic Lockout on Multiple Incorrect Password
(ALMIP) are not rejected as the P values are 0.038 and 0.048. As related to hypothesis, other
security features are rejected as the P values are 0.938, 0.986, 0.541, 0.290, 0.331, 0.737, 0.499 and
0.611 (P>0.05)

Therefore it can be concluded that based on Education Qualification wise, there is significant
difference among IB users in relation to level of trust on security features – Virtual Keyboard and
Automatic Lockout on Multiple Incorrect Password.

54
CHAPTER 5
FINDINGS, SUGGESTIONS AND CONCLUSION

55
FINDINGS
1. Demographic profile of the Selected IB Users

The majority of IB users belong to the age group greater than 40. Gender wise classification
shows that out of the 100 respondents, majority (64 percent) are male. As to Education
Qualification 70 percent are post graduate and only 7 percent are professionally qualified.
From the table it can be seen that majority (32 percent) are belong to private sector
followed by business and profession. The monthly income classification of the respondents
reveals that majority of them falls under the income group 10001-20000 and almost 73
percent respondents were receiving less than 30000 as monthly income. The table shows
that 77 percent respondents having Savings bank a/c. the classification of the sample based
on the usage of IB services shows that majority of respondents are using IB for about 3 to 5
years and also, it may be seen that most of them (46 percent) using IB services for almost
8 and above times. From the table it can be seen that majority of respondents have better
perception and opinion about the accessibility of IB services and Website presentation of
Bank.

2. Reason for Using IB Service

Out of the different factors that motivate the customer to use the IB service, Convenience
factor is most considered. The mean rank variation of all the motivating factors or reasons
is statistically significant in the output of Friedman test (P=0<0.05). Lowest mean rank is
highly preferred. Here convenience factor has the lowest mean rank (2.01), followed by
speed (2.25).

3. Customer Satisfaction on IB Service Quality Dimensions

3.1 Transaction Efficiency

The satisfaction level in respect of IB’s transaction efficiency among selected users shows
that Majority of respondents are highly satisfied with this quality dimension. Gender wise,
male respondents are highly satisfied. The mean score variation of the respondents is
statistically validated at 5percent level of significance by applying two way anova
(P=0<0.05).

56
3.2 Reliability

The satisfaction level in respect of Reliability of IB service among selected users shows that
Majority of respondents are highly satisfied with this quality dimension. Gender wise, male
respondents and Education Qualification wise, respondents with professional Education
Qualification are highly satisfied. The mean score variation of the respondents is statistically
validated at 5percent level of significance by applying two way anova (P=0.00, 0.014<0.05).

3.3 Service Content

The satisfaction level in respect of Service Content of IB service among selected users shows
that Majority of respondents are highly satisfied with this quality dimension. Gender wise,
male respondents and Education Qualification wise, respondents with professional Education
Qualification are highly satisfied. The mean score variation of the respondents is statistically
validated at 5percent level of significance by applying two way anova (P=0.00, 0.009<0.05).

3.4 Customer Support

The satisfaction level in respect of Customer Support Quality of IB among selected users
shows that Majority of respondents are satisfied with this quality dimension. Majority of
them are not satisfied with Online Customer service representative availability. Gender
wise, male respondents are highly satisfied. The mean score variation of the respondents is
statistically validated at 5percent level of significance by applying two way anova
(P=0<0.05).

3.5 Ease of Use

The satisfaction level in respect of Ease of Use of IB among selected users shows that Majority
of respondents are highly satisfied with this quality dimension. Gender wise, male respondents
are highly satisfied. The mean score variation of the respondents is statistically validated at 5
percent level of significance by applying two way anova (P=0<0.05).

3.6 Safety and Security

The satisfaction level in respect of Safety and Security feature of IB service among selected
users shows that Majority of respondents are satisfied with this quality dimension. Gender
wise, male respondents and Education Qualification wise, respondents with professional
Education Qualification are highly satisfied. The mean score variation of the respondents is

57
statistically validated at 5 percent level of significance by applying two way anova (P=0.00,
0.002<0.05).

4. Problems Faced by the IB Users

The mean ranks obtained for the problems faced by the users while using of IB services
shows that the highest or major problem faced by the users is Low Speed and Connection
Problems due to Server Error. Friedman test is used for this purpose. The lower the ranks,
the higher will be the major problem where mean rank of Low Speed is 4.61, followed by
Connection Problems (mean rank 4.64) and Inability to get One Time Password (mean
rank 5.72).

5. Level of trust of customers on Security Features available in IB


• Majority of respondents are not aware of VeriSign security and Padlock Symbol security.

• The Education Qualification wise mean rank table shows that users with professional
Education Qualification have the better perception and high level of trust on all the security
features available in IB except Virtual Keyboard, SMS alert, Address bar turning to green.
Kruskal-Wallis used for this purpose. As a result, it is observed that based on Education
Qualification wise, there is significant difference among IB users in relation to level of trust
on security features – Virtual Keyboard and Automatic Lockout on Multiple Incorrect
Password.

58
SUGGESTIONS

1. Respondents are dissatisfied with online customer service representative. So there is


a need to rectify the online connectivity of the customer service representative. Most
of the bank does not have online service representative or inexperienced online
service representative. Those who do not have online customer service
representative need to be hire trained and energetic employees. Its lead to
promptness in problem solving of a respondents at the time of occurrence of
problem, which make customer more satisfied.

2. Safe and security features of webpage need to be improved because most of the
respondents feel that Internet Banking is not safe and secure. People are so much
conscious about the security measures whether it might provide privacy and security
for the information that entered.

3. Out of the mentioned problems, it is founded that Low Speed and Connection
problem due to server errors are the major problems faced by Users. Therefore
banks need to take corrective measures to improve their server efficiency.

4. Banks has to conduct various awareness programs in order to improve the level of
awareness and knowledge of customers about the functioning of IB and its attributes.

59
CONCLUSION

The results of this research indicated that transaction efficiency, ease of use, service content
are important determinants of customers’ satisfaction with internet banking. However,
privacy and security problems, low speed and connection problems due to server errors are
the main/major problems faced by the IB users. It indicates that as cost and time customers
spent on internet banking increases, customers’ satisfaction will decrease. Therefore, this
paper suggests certain policy implications for the banking industry. Thus, the proposed
model can be of help in planning efforts towards increasing consumers’ satisfaction. By
improving these factors, bank management may increase adoption and satisfaction among
internet bank users. These also imply initiating appropriate actions to enhance basic
facilities and improve privacy and security on internet banking. This in essence will
improve business transaction and thus increase overall customer satisfaction.

Although the use of IT is expected to lead to a favorable impact on bank performance, the
banks need performance measures which are related to customers to improve their
performance and minimize waste of productive customers. The way forward therefore, is
for the banks to increase awareness about the use of this technological tool to help them
capture relevant and timely information for decision making. Managing e-banking demands
analytical ability and attention to details, for the satisfactory performance of this system,
these determinants should be mixed in their right prescription to get high quality internet
banking and incorporate newer ideas. There is needed to make concerted efforts towards
operational efficiency of internet banking.

60
BIBLIOGRAPHY
BUGHIN J (2004), “The Success of Internet Banking: an economic investigation of its
pattern of diffusion within Western Europe”
MD. MAHTAB ALAM (2010), “Customers satisfaction Measurement of Internet Banking”
RANGSAN NOCHAI (2010), “The Impact of Internet Banking Service on Customer
Satisfaction in Thailand: A Case Study in Bankok”
MINJOON JUN, SHAOHAN CAL, “The Key Determinants of Internet Banking Service
Quality: a Content Analysis”
M E DODDARAJU, “A Study on Customer Satisfaction towards Public and Private Sector
Banking Service”
NAKANJAKKO LYDIA, “Electronic Banking and Customer Satisfaction- Case Study:
Centenary Bank”
MOHSIN ZAFAR, ARSHAD ZAHEER, “Impact of Online Service Quality on Customer
Satisfaction in Banking Sector”
ITORO MOSES IKOH, “Determinants of Customer Satisfaction with Internet Banking
Services”

BOOKS
“Banking with Technology” – R.K. Uppal
“Commercial Banks in India: Growth, challenge and strategies”- Benson Kunjukunju

WEBSITES
www.shodhganga.inflibnet.ac.in
www.isaet.org
www.ijstr.org
www.researchgate.net
www.scribd.com
www.aicit.org
www.academia.edu
www.investopedia.com
www.wikipedia.com

61
APPENDIX

QUESTIONNAIRE

CUSTOMER SATISFACTION ON INTERNET BANKING SERVICE


QUALITY
PART - I

(Please choose your answer by a tick mark [√])

1. Age : ………… years

2. Gender : Male Female

3. Education Qualification : Up to +2 Graduate


PG Profession
4. Occupation : Unemployed Job in Public sector
Job in Pvt Sector Business/ profession

5. Average Monthly Income : Rs …………………….

PART – II
6. Type of your bank account

Saving Current Recurring


7. How long have you been using banking services : …….. (years)
8. How long have you been using Internet Banking Service : …….. (years)

9. How many times on an average you use Internet Banking Services in a month : …….

(times)
10. Reasons for using IB Service (please rank the following based on your experience)

a) Speed b) Convenience

c) Transaction Efficiency d) User friendly


11. How do you feel about the accessibility of IB Services?

Excellent Good Average Poor Very Poor


62
12. What is your opinion about the Website presentation of your bank?
Excellent Good Average Poor Very Poor

13. Given below are set of statements that are related to your feeling of experience/ Satisfaction on the Internet Banking Services of
the bank. Indicate your extent of agreement or disagreement with each statement by a tick mark [√] to the appropriate answer.
[5] Highly Satisfied, [4] Satisfied, [3] Neutral, [2] Dissatisfied, [1] Highly dissatisfied

IB Service Quality Dimensions 5 4 3 2 1


13.1 Transaction Efficiency
13.1.1) Speed of Transaction
13.1.2) Server efficiency during transaction
13.1.3) Provide complete help function
13.1.4) Can check the validity and details of past records every
time
13.2 Reliability
13.2.1) Perform the service right at the first time
13.2.2) Deliver the service exactly as promised in Ads
13.2.3) Message about completion of transaction
13.2.4) A/c statement through SMS/Email (download facility)
13.3 Service Content
13.3.1) Availability of up to date information
13.3.2) Provide information that exactly fit needs
13.3.3) Provide adequate information about the product
13.3.4) Provide information that trust
13.4 Customer Support
13.4.1) Informing customer about new and important
information
13.4.2) Contains comprehensive FAQs (frequently asked
Questions) section to guide
13.4.3) Promptness of bank response at the time of occurrence
of problems
13.4.4) Online customer service representative availability
13.5 Ease of Use
13.5.1) Easy to find required information
13.5.2) Clarity of information and text used
13.5.3) Availability of multiple language
13.5.4) Provide step by step instruction and guidelines
13.6 Safety and Security
13.6.1) Keep accurate and error free records
13.6.2) Warning signals in website
13.6.3) Confirmation message immediately after transaction
13.6.4) Password and Lock facility

63
14. The following table outlines some of the problems that you might have faced in the
course of using of IB. Please indicate the frequency of each of the following problems
faced as [1] Very High, [2] High, [3] Medium, [4] Low, [5] Very Low

Problems faced by the IB users 1 2 3 4 5


14.1) Inability to login/operate the account
14.2) Account temporarily locked by bank
14.3) Transaction failed but amount is deducted
14.4) Money lost without my knowledge
14.5) Low speed
14.6) Connection problems due to server errors
14.7) Personal information leaked out
14.8) Inadequate customer support from bank employee
14.9) Transaction details missing
14.10) Lengthy procedure to complete transaction
14.11) Inability to get One Time Password due to network
error
14.12) Delay in getting new password in place of present

15. The following are the security features available in Internet Banking. Please mark a score of 1-3 depending on your level of
trust towards the security features. If you are not aware of any of them, please mark a tick [√] in the column ‘not aware’

[3] Most trusted, [2] Average, [1] Low trusted, [0] Not aware

Security Features 3 2 1 0
15.1) VeriSign
15.2) Padlock Symbol
15.3) The letter ‘s’ in the URL (e.g. https//onlineshop.com)
15.4) Virtual Keyboard
15.5) SMS/E-mail Alert
15.6) Sign on Password Expiry
15.7) Automatic lockout on multiple incorrect password
15.8) Automatic timeout if a/c not operated for specified time
15.9) Mandatory use of special characters in password
15.10) The address bar turning green

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