chapter- 5 impact of electronic banking on...
TRANSCRIPT
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CHAPTER- 5
IMPACT OF ELECTRONIC BANKING ON SERVICE QUALITY OF
INDIAN BANKS
5.1 Conceptual Framework
5.2 Service Quality Conceptualization and Operationalisation
5.2.1 Managing Service Quality
5.2.2 Measuring Service Quality in Banking Sector
5.2.3 Electronic Banking and Service Quality
5.3 SERVQUAL SCALE
5.4 Various Dimensions of Service Quality for Drafting Research Instrument
5.5 Items of Final Draft of the Research Instrument
5.6 Descriptive Analysis
5.6.1 Customer Profile
5.6.2 Relationship of Customer with Banks
5.6.3 Cross Tabulation in Demographic Variables
5.7 Respondents’ Opinion Regarding Different Electronic Banking Services
5.8 Exploring the Relationship between Service Quality and E-banking
5.9 Service Quality Level of Banks Using SERVQUAL Model
5.9.1 Identification of Nine Service Quality Factors
5.10 Level of E-banking Services offered by Different Banks
5.11 A Comparison of Customer Satisfaction in Public Sector and Private Sector Banks
5.11.1 Customer Profile
5.11.2 Comparative Service Quality Analysis of Public and Private Sector Banks
Using SERVQUAL Model
5.11.3 Comparative Analysis of E-banking Services in Public and Private Sector
Banks
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CHAPTER-V
IMPACT OF ELECTRONIC BANKING ON SERVICE QUALITY OF
INDIAN BANKS
The bank customers play a vital role in the banking sector. They are the key
players of the banking industry and all the efforts are made by the banks to satisfy the
desirable needs of the customers. In the present chapter, an attempt has been made to get
the opinion of the bank customers regarding electronic banking services. The chapter has
been divided into four sections. Section-I deals with the conceptual framework of service
quality with its meaning, various SERVQUAL dimensions, theoretical framework and
how electronic banking has improved the quality of service in the banking sector.
Section-II deals with the demographic information of the respondents. Section-III
examined the various service quality dimensions and the customers’ satisfaction towards
electronic banking. Section-IV deals with comparative analysis of public and private
sector services to frame out an opinion as to which sector is providing qualitative and
efficient services to the customers.
SECTION-I
5.1 Conceptual Framework
Indian banking industry has suddenly witnessed a major boom. Being a
globalized market, the customers seek and demand world class products. In today’s
global market, the competitive advantage lies in delivering high quality service to the
customers. The need to achieve customer satisfaction lies in its ability to deliver better
quality products to the customers. Therefore, customer satisfaction is considered as a
pre-requisite for customer retention, loyalty and convenience which ultimately helps in
realizing the goals of profitability, market share, growth, return on investment,
productivity etc. Service quality is one of the highly debatable topic in marketing theory.
There is a wide range of literature on customer satisfaction and service quality though
both are different concepts but are closely related to each other. In order to judge the link
between two, a deep study of both concepts is required. So, the chapter strongly
emphasized on the various factors of service quality and customer satisfaction so as to
examine the relationship between service quality and customer satisfaction.
5.2 Service Quality: Conceptualization and Operationalization
Quality is a concept which requires a concern both in products as well as in
services. Various experts have defined it as “fitness for use”, “conformance to
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requirements”, “freedom from variation” etc. To market a product, quality plays a pivotal
role to sell a product. In fact, quality is considered as most important factor that influence
on the buying behavior of the customer. Now the question arises to measure quality of
service or a product. In tangible goods like products, quality can be measured by its
durability and number of defects, usage of product, packaging, handling etc. However
measuring the quality in intangible is a different one. As services are intangible so they
are very difficult to measure. Services have a lot of intangible dimensions like
communication, credibility, security, competence, reliability, responsiveness which are
qualitative by nature and their value is subjective. Service quality is an abstract and
elusive construct because of 4 unique features of services.
1. Intangibility (Bateson, 1977)
2. Heterogeneity (Booms and Bitner, 1990)
3. Inseparability (Carman & langeard, 1980)
4. Perishability(Stanton, J. William 2004)
Services are those economic activities that typically produce an intangible
product such as education, entertainment, food & lodging, transportation, insurance,
trade, government, financial, real estate, medical, repair & maintenance etc. Intensified
competition and deregulation has led many services and retail businesses to seek
profitable ways to differentiate them; one strategy that has been related to success in
these businesses is the delivery of high service quality (Rudie and Wansley 1985). So
service quality has become a significant research topic in past decade due to high
revenues, increased cross sell ratios, higher customer retention, purchasing behaviors
(Cronin and Taylor 1994) and expanded market share.
An analysis of service quality literature suggests four underlying themes:
(a) It is more difficult to evaluate than quality of tangible goods.
(b) Evaluation of quality is not made solely on the outcome service, they also involve
the evaluation of the process of service delivery (Parasuraman, Zeithamal &
Berry 1985).
(c) Service cannot be separated from the creator of service. These are created,
consumed and dispensed at the same time.
(d) Although the services are intangible but through visualization, association,
physical representation and documentation; intangibility of the services can be
improved.
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So product and service quality, customer satisfaction and company profitability
are inter-related with each other. Higher the quality level, higher will be the customer
satisfaction which support high prices and low costs which in turn will help in improving
the company’s profit.
5.2.1 Measuring the Service Quality
Service providers must understand two attributes of service quality. Firstly, the
quality is defined by the customer and not by the product seller. Secondly, customers
assess service quality by comparing their expectations to their perception of how the
service is performed. In this process, there is no guarantee that expectations will be
reasonable, nor there is any assurance that a customers’ perception of performance will
be based on more than a single experience. However to deliver better quality services to
the customers, it is required that services must be standardized and for standardizing the
quality of a service, the delivery of the service must be substituted with machines
wherever possible. For example, ATM machines, websites and mobile banking gives the
same kind of services to all the customers irrespective of any human biasness in
delivering the service and at the same time the machine will not suffer from any fatigue,
forgetfulness and stress. But if the customer is not adapt at surfing the internet, forgets
the required ATM pin number and become impatient with the branch process on a
recorded telephone answering system than the quality of the service will hamper and
inconsistent. So, despite of standardization and reliability of machines, this is one fact
that may explain why internet shopping accounts for merely 2% of the total retail sales.
So, it could be judged that although quality could be standardized by using machines but
at the same time it depends upon the customers adaptation and willingness that how
much the customer is patient, aware and satisfied with the machines in place of humans.
This is one of the reason that despite of total automation in the banking sector still
human resource play a vital role in delivering and explaining the service.
5.2.2 Measuring Service Quality in Banking Sector
Customer is the kingpin for the development of trade, industry and service sector
particularly in financial services. So, the significance of customer service in the banking
sector came to force to compete in a market driven environment. Measuring service
quality in the service sector particularly in the banking sector is more difficult than
measuring the quality of manufactured goods. The service sector as a whole is very
heterogeneous and what is heterogeneous may hold true for one service and may not
hold for another service sector. For example, the nature of banking services is very
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different provided by a hospital and hotel. In fact, in banking industry there are a variety
of services like retail banking, corporate banking, investment banking, commercial
banking, personnel banking, wholesale banking, internet banking etc. Each banking is
having a variety of services. Due to this differentiation, services in this industry could
not be standardized, moreover these services are intangible in nature which could not be
compared or seen.
The concept of customer satisfaction and service quality is interrelated with each
other. Moreover satisfaction of customer depends upon service quality and service
quality is increasingly offered as a strategy by marketers to position themselves more
effectively in the market place (Parasuraman et.al 1988; brown and Swartz 1989; Cronin
and Taylor 1992). Due to the era of e-banking quality of service has been improved a lot
as compare to traditional banking services. Internet banking, Mobile banking, automated
teller machine, electronic fund transfer has totally changed the way of providing services
by the banks. However some banks like in private sector are providing it in a very
efficient way while others are making efforts to adopt it.
5.2.3 Electronic Banking and Service Quality
As customers become more sophisticated, therefore, it becomes essential to
consider the use of technology to respond to their continuously change. Banking is an
industry highly which is highly involved with the customers. Customers in developing
economies seems to keep the “technological factors” of services as the yardstick in
differentiating good & bad services and the human factor – the employees seem to play a
lesser role in discriminating the quality of service for banks. The variation in services
offered by the banks develops the excellence for service quality. Banking is no longer
regarded as a business dealing with money transaction alone, but it also seem as a
business related to information on financial transaction (Padwal 1995). Customers
whether at the corporate level or at retail level have always been important for the banks.
As electronic banking is becoming more prevalent, so level of customer satisfaction is
also changing the scenario of technological environment.
Informational technology in form of e-banking plays a significant role in providing
better services at lower cost. Several innovative IT based service such as Automated
Teller Machine (ATM), Internet banking, Smart cards, Credit Cards, Mobile banking,
Phone banking, Anywhere-Anytime banking have provided number of convenient
services to the customer So as the service quality improves, the probability of customer
satisfaction increases. Increase satisfaction in turn increase the mutual understanding,
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customer retention and a bond of trust between customer and bank. The banks which are
providing these services at large extent to customers are more reputed in the eyes of
customers. But at the same time technology based product is different in public and
private sector banks. Bank automation and electronic banking is fast in private sector
comparative to public sector.
E-banking is an improvement over traditional banking system because it has
reduced the cost of transaction processing, improve the payment efficiency, financial
services and improve the banker-customer relationship. The relationship between e-
banking and service quality can be studied with the level of satisfaction. As the customer
satisfaction is the function of customer expectation level and service quality level
provided by the organization. E-banking plays a pivotal role in giving satisfaction to the
customers because e-banking fills the gap between the expected and perceived service
quality. So in order to fill this gap, banks should find ways of making electronic services
more accessible and by allowing the customer to verify the accuracy of the e-banking
transactions.
There are number of reasons due to which customer satisfaction due to e-banking
has improved.
1. Customer can withdraw funds, transfer funds anytime, anywhere they want.
2. Accessibility has been extended through technological development as it allows
customers to do business from their home and office.
3. It makes the banking activities and transaction very simplier to understand
4. There is no requirement of direct control with bank, as services can be operated
wherever customer wants.
5. It has reduced the waiting time of the customer; no long queue standing is required.
6. Availability of employees at all times is not required as these services are provided
24 hours a day, seven days a week.
7. Internet based services has enabled the corporate and retail customers to transact
from home, office and traveling.
8. Online fund transfer enabled the customer to transfer funds from one bank to another
or within the same bank at same time.
9. Communication, interaction between the bank and customer has been improved due
to e-banking.
On the whole we can say that e-banking has become pre-imminent method of
carrying the banking transaction and to increase the customer satisfaction. With the
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present chapter an effort has been made to analyze the impact of e-banking on customer
satisfaction with servqual dimension.
5.3 SERVQUAL Scale
For the measurement of impact of e-banking on service quality, a model named
SERVQUAL was developed by Parasuraman (1988). The model consists of ten
components. SERVQUAL provides a technology for measuring and managing service
quality (SQ). When the technology was first published, its innovators Parasuraman,
Zeithamal and Berry have further promulgated and promoted the technology through a
series of publication (Parasuraman et. al.1988; 1991(a); 1991(b); 1994). Zeithamal et. al
(1990; 1991;1993) (Buttle1995). Servqual fills a gap between what the customer expect
by way of SQ and what he is actually getting. SQ is presented as a multi dimensional
construct. In the original formulation Parasuraman et. al (1985) identified ten
components of SQ. Each dimension has further four-five dimensions
(1) Reliability involves consistency of performance and dependability. It also means that
the firm performs the service first time and honours its promises. Specifically, it involves
the following.
• Accuracy in billing
• Keeping records correctly
• Performing the service at designated time
(2) Responsiveness concerns the willingness or readiness of employees to provide
service. It involves timeliness of service.
• Mailing a transaction slip immediately
• Calling the customer back quickly
• Giving prompt service (e.g., setting of appointments quickly)
(3) Competence means possession of the required skills and knowledge to perform the
service. It involves:
• Knowledge and skill of the contact personnel
• Knowledge and skill of operational support personnel
• Research capability of the organization.
(4) Access involves approachability and ease of contact. It means :
• The service is easily accessible by telephone
• Waiting time to receive service at bank is not extensive
• Convenient hours of operation
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• Convenient location of service facility
(5) Courtesy involves politeness, respect, consideration and friendliness of contact
personnel (including receptionists, telephone operators. It includes:
• Consideration for the consumer’s property
• Clean and neat appearance of public contact personnel
(6) Communication means keeping customers informed in language they can understand
and listening to them. It may mean that the company has to adjust its language
according to different customers-increasing the level of sophistication with a well
educated customer. It involves:
• Explaining the service itself
• Explaining how much the service will cost
• Explaining trade- off between service and cost
• Assuring the consumer that a problem will be handled
(7) Credibility involves trustworthiness, believability, honesty. It involves having the
customer’s best interests at heart contributing to credibility are:
• Company name
• Company reputation
• Personnel characteristics of the contact personel
(8) Security is the freedom from danger, risk or doubt. It involves:
• Physical safety
• Financial security
• Confidentiality
(9) Understanding involves making the effort to understand the customer’s needs. It
involves:
• Learning the customer’s specific requirement
• Providing individualized attention
• Recognizing the regular customer
(10) Tangibles include the physical evidence of the service. It includes
• Physical facilities
• Appearance personnel
• Tools or equipment used to provide the service
• Physical representation of the service, such as a plastic credit card or a bank
statement
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• Other customers in the service facility
(Modified from Buttle 1995.)
In their 1988 work these ten dimensions were reduced to five dimensions as follows
Dimensions Items in scale
(1) Reliability 4
(2) Assurance 5
(3) Tangibles 4
(4) Empathy 5
(5) Responsiveness 4
The above mentioned scale was originally developed by Parasuraman in 1985.
But in the present chapter, in order to have wide coverage of the study, the ten
dimensions are taken in to consideration. One of the dimension namely courtesy is
having only one sub dimension, so factor analysis and data reduction was not possible
for single variable. So, it was merged in to the main dimension of understanding. In
order to know the impact of electronic banking on service quality, a questionnaire has
been developed. It consists of 43 items related to service quality.
Various Dimensions of Service Quality for Drafting of Research Instrument
Reliability
1 It provides accuracy in billing.
2 It helps in keeping records correctly.
3 It performs the service at designated time.
Responsiveness
4 E-banking is very necessary for the development of new economy of India.
5 It improves the quality of customer service.
6 Response of service through e-banking is very prompt and quick.
7 Availability of service is faster in e- banking as compare to manual banking.
Competence
8 Transfer of fund is easier through E-banking.
9 E-Banking provides more punctuality, transparency, accountability.
10 Transfer of funds is faster as compared to manual banking system.
11 It is trusted by young generation.
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Access
12 E-Banking services are accessible via Internet banking, Mobile banking, EFT,
ECS, ATM.
13 Online purchase of goods and services including online payment is easier.
14 It provides convenient location of service facility(location of ATM, POS terminals)
15 It reduces the waiting time to receive the service.
Courtesy
16 It helps in better customer relationship, attracting and retaining them.
Communication
17 E-Banking explains the service itself.
18 It explains the cost of service being used.
19 It assures the customer that problem will be handled.
20 It explains the trade off between service and cost.
21 E-banking provides up to date information.
22 It also provides information for well educated customers.
23 E-banking provides effective medium of promotion of various schemes.
Credibility
24 E-banking increases the reputation of the banks.
25 It increases the believability, honesty and trustworthiness of the customers in
banks.
26 It ensures the ability to fulfill the requirement.
27 Degree of reliability involved in Interaction with customer is more in e- banking.
28 It provides unlimited network to the banks to approach customers.
Security
29 E-banking ensures physical safety of the transaction.
30 Password facility provides confidentiality to transaction.
31 It also increases the financial security.
32 Privacy can be easily maintained.
Understanding
33 It provides individualized attention to the customers.
34 It provides necessary information to the customers.
35 Website of the bank is designed according to the need of the customer.
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36 It ensures to provide necessary information to the customer.
37 E-banking learns the specific requirement of the customer.
Tangibility
38 Banks use advanced Computer/IT to serve clients.
39 E-banking provides modern looking equipment.
40 Physical representation of service through plastic card, credit and debit card is
easy.
41 E-banking provides 24 hours, 365 days a year service to customers.
42 It helps in reducing the no. of queues in the bank branches.
43 E-banking provides more physical facilities to the customers.
5.5 Items of Final Draft of the Research Instrument
S.No. Attitude Factor Item No. Total Items
1 Reliability 26,27,28 3
2 Responsiveness 29,30,31,34 4
3 Competence 13,23,24,25 4
4 Access 32,33,35,36 4
5 Courtesy 41 1
6 Communication 17,18,19,20,21,22,42 7
7 Credibility 37,38,39,40,43 5
8 Security 12,14,15,16 5
9 Understanding 7,8,9,10,11 4
10 Tangibility 1,2,3,4,5,6 6
Section-II
5.6 Descriptive Analysis
Descriptive analysis was done to present a profile of the respondents and also to
find out the mean score and standard deviation for the items in the banking SERVQUAL.
5.6.1 Customer Profile
Respondents form an important component of the primary data survey. So it is
very essential that the personal profile of the respondents undergone a study. Descriptive
analysis was done to present the demographic information of the respondents .The
sample size consists of 400 respondents of various banks including public and private
sector. In order to have an effective banking policy and marketing strategy, it is required
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to study the customer profile as the customers are the milestone of banking business.
Sound banking system depends upon the sound customers having a good educational
ground and having a regular flow of income. So first section of questionnaire includes
the customer’s profile. The basic attributes of the respondents are income, age, sex,
occupation, educational qualification and other socio-demographic information. Table
5.1 to 5.7 presents a comprehensive profile of bank customers who had participated in
this research study. It can be seen from table 5.1, the sample consists of more males
(71.5%) than females (28.5%).There are more respondents who are married (62.8%) than
unmarried (37.3%). Majority of the respondents (52.5%) are in the age group of below
30 years and 27% are in the age group of 30-40 years. About 32.8% respondents are
post-graduate, 26.5% are graduates and 20.3% are having the professional degrees. This
profound that the sample is skewed towards the more educated segment of the
population. About 43.3% of the respondents are serviceman, 20.5% are businessmen
and 17.5% are professionist. 29.3% of the respondents are having the income more than
25,000 and 20% are having in between 10,000-15,000. 76.3% are having saving account
in the banks, 16.3% are having current account and 7.5% are having salary account.
Table 5.1
Gender Profile of the Customers
Gender Frequency Valid percent Cumulative Percent
Male 286 71.5 71.5
Female 114 28.5 100
Total 400
Table 5.2
Marital Profile of the Customers
Marital Status Frequency Valid Percent Cumulative Percent
Married 251 62.8 62.8
Unmarried 149 37.3 100
Total 400 100
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Table 5.3
Age Profile of the Customers
Age Profile Frequency Valid Percent Cumulative Percent
Below 30 210 52.5 52.5
30 -40 108 27 79.5
40-50 60 15 94.5
50-60 22 5.5 100
Total 400 100
Table 5.4
Educational Profile of the Customers
Education Frequency Valid Percent Cumulative Percent
Below Matric 7 1.8 1.8
Matric and Under Graduate 75 18.8 20.5
Graduate 106 26.5 47
Post Graduate 131 32.8 79.8
Professional Degree 81 20.3 100
Total 400 100
Table 5.5
Occupational Profile of the Customers
Occupation Frequency Valid Percent Cumulative Percent
Businessman 82 20.5 20.5
Serviceman 173 43.3 63.8
Professional 70 17.5 81.3
Agriculturist 21 5.3 86.5
Any other 54 13.5 100
Total 400 100
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Table 5.6
Monthly Income Profile of the Customers
Income Frequency Valid Percent Cumulative Percent
Below 10000 69 17.3 17.3
10000-15000 80 20 37.3
15000-20000 71 17.8 55
20000-25000 63 15.8 70.8
Above 25000 117 29.3 100
Total 400 100
Table 5.7
Type of Account
Type of Account Frequency Valid Percent Cumulative Percent
Saving 305 76.3 76.3
Current 65 16.3 92.5
Salary 30 7.5 100
Total 400 100
5.6.2 Relationship of Customers with the Banks
In order to investigate the relationship between e-banking and the level of
customer satisfaction, it was important to explore for how long respondents held their
accounts in the banks. Table 5.8 presents the historical perspective on the banking
relationship for the surveyed customer.
Table 5.8
History of Banking Relationship
Duration of the Banking
Relationship with the
Bank
Frequency Valid Percent Cumulative Percent
Less than 1yrs 58 14.5 14.5
1-3 yrs 104 26 40.5
3-5yrs 63 15.8 56.3
5-7 yrs 54 13.5 69.8
Above 7 121 30.3 100
Total 400 100
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The results in table 5.8 indicates that large number of respondents (30.3%) have
maintained a banking relationship with the banks for more than seven years and 26 per
cent of them have maintained such relationship between 1 to 3 years. However it could
be observed that there is relatively high degree of stability of those customers who had
maintained long term relationship with the bank they deal with. In order to retain a long
term relationship with its customers, the banks should adopt a diversified strategy by
providing them financing schemes with different portfolios, innovative banking products,
credit cards, internet banking, onsite and offsite ATMs, Mobile banking, PC banking etc.
to achieve a higher rate of growth.
5.6.3 Cross Tabulation in Demographic Variables
In order to understand relationship between demographic variables like age/sex,
education/occupation, type of account/ occupation etc, cross tabulation was carried out.
Table 5.9 to 5.15 exhibits the cross tabulation between different variables.
Table 5.9
Age/Education Wise Distribution of Customers
Educational Categories
Age
Group
E1 E2 E3 E4 E5
Total
Below 30 years
5 (71.42)
47 (62.66)
75 (70.75)
59 (45.03)
24 (29.62)
210 (52.5)
30 -40 0 (0.00)
16 (21.33)
22 (20.75)
44 (33.58)
26 (32.09)
108 (27)
40-50 2 (28.57)
4 (5.33)
9 (8.49)
21 (16.03)
24 (29.62)
60 (15)
50-60 0 (0.00)
8 (10.66)
0 (0.00)
7 (5.34)
7 (8.64)
22 (5.5)
N 7 75 106 131 81 400
N represents number of bank customer surveyed.
Note: Figures within parenthesis in this table and all the tables to follow represent
percentages while figures without parenthesis represent simple frequencies.
Table 5.9 depicts age-education wise distribution of the respondents. Age wise
respondents have been divided in to four age group, ‘below 30 years’, ‘30-40 years’, ‘40-
50 years’ and ‘50-60 years’. As is evident from the table as many as 210 (52.5%)
respondents are below the age of 30 years. Similarly, 108 (27%) fall in the age category
of 30-40 years, 60 (15%) in 40-50 years and 22(5.5%) in 50-60 years. So this shows that
the maximum category comes under the age group of below 30. Education wise the table
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reveals that majority of the respondents belongs to E3 (70.75%),E2 (62.66%) and E4
(45.03%) category are from the age group of below 30 years. A large proportion of
respondents from categories E4 (33.58%) and E5 (32.09%) belongs to 30 to 40 age
group.
Table 5.10
Age/Occupation Wise Distribution of Customers
Occupational Categories
Age
Group O1 O2 O3 O4 O5
Total
Below 30
62 (75.60)
86 (49.71)
36 (51.42)
13 (61.90)
13 (24.07)
210 (52.5)
30-40 11 (13.41)
53 (30.63)
19 (27.14)
8 (38.09)
17 (31.48)
108 (27)
40-50 8 (9.75)
27 (15.50)
10 (14.28)
0 (0.00)
15 (27.77)
60 (15)
50-60 1 (1.21)
7 (4.04)
5 (7.14)
0 (0.00)
9 (16.66)
22 (5.5)
N 82 173 70 21 54 400
Table 5.10 reveals age-wise /occupation-wise distribution of the respondents.
Occupation-wise the respondents have been divided in to five categories, i.e.,
Businessmen(O1),Serviceman(O2),Professional(O3), Agriculturist (O4), Any
Other(O5).The above table reveals that below the age group of 30, majority of the
respondents belongs to the category of businessman(75.60%), followed by O4(61.90%)
and O3 (51.42%). Further the majority of the respondents in category O4 (38.09%) and
O2 (30.63%) are in the age group of 30-40 years. 27.77 per cent of the respondents in O5
falls in the age group of 40-50 years.
Income-wise Distribution
Income-wise, the respondents surveyed have been divided into five income
groups on the basis of their family income, i.e., below Rs. 10,000, Rs.10000-15000,
Rs.15000-20000, Rs.20000-25000 and above 25000. The following table explains
income wise and education wise distribution of the respondents among such groups
respectively.
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Table 5.11
Income/ Education Wise Distribution of Customers
Educational Categories Income
E1 E2 E3 E4 E5 Total
Below10000 5 (71.42)
22 (29.33)
23 (21.69)
18 (13.74)
1 (1.23)
69 (17.25)
10000-15000 0 (0.00)
8 (10.67)
46 (43.39)
18 (13.74)
8 (9.87)
80 (20)
15000-20000 2 (28.57)
15 (20)
19 (17.92)
19 (14.50)
16 (19.75)
71 (17.75)
20000-25000 0 (0.00)
20 (26.67)
12 (11.32)
25 (19.08)
6 (7.40)
63 (15.75)
Above 25000 0 (0.00)
10 (13.33)
6 (5.66)
51 (38.93)
50 (61.72)
117 (29.25)
N 7 75 106 131 81 400
Table 5.11 explains income-education wise distribution of respondents.
Proportionately the major respondents (29.25%) belong to the income group of above
25000. Second category consist of respondents having income of Rs.10,000 to Rs.15,000
(20%), followed by Rs.15,000 to Rs.20,000(17.75%), Rs.20,000 to Rs.25,000(15.75%).
Education-wise the table reveals that 43.39 per cent of respondents from category E3
having income between Rs.10,000 to Rs.15,000.Further from category E5, 50 (61.72%)
respondents belong to the income group of above 25,000. E1 (71.42%), E2 (29.33%) and
E3 (21.69%) belong to the income below 10,000. However all the respondents from
category E1 either belong to income group below Rs.10,000 (71.42%) or Rs.15,000 to
Rs.20,000(28.57%).
Table 5.12
Income/Occupation Wise Distribution of Customers
Occupational Categories
Income O1 O2 O3 O4 O5
Total
Below10000 39 (47.56)
14 (8.09)
1 (1.42)
0 (0.00)
15 (27.77)
69 (17.25)
10000-15000 3 (3.65)
64 (36.99)
11 (15.71)
2 (9.52)
0 (0.00)
80 (20)
15000-20000 17 (20.73)
32 (18.49)
16 (22.85)
0 (0.00)
6 (11.11)
71 (17.75)
20000-25000 10 (12.19)
33 (19.07)
11 (15.71)
8 (38.09)
1 (1.85)
63 (15.75)
Above25000 13 (15.85)
30 (17.34)
31 (44.28)
11 (52.38)
32 (59.25)
117 (29.25)
N 82 173 70 21 54 400
132
Occupation wise, the above table reveals that majority of the respondents 59.25
percent in the O5 category having the income more than Rs.25,000. O4 (52.38%) and O3
(44.28%) also belong to the respondents having income above Rs.25,000. 38.09 per cent
of the respondents from O4 category belong to income group of Rs.20000 to Rs.25,000.
47.56 per cent respondents from O1 category and 27.77 per cent from O5 category are
having income below Rs.10,000.Further 36.99 per cent respondents from O2 category
are having income of Rs.10,000 to Rs. 15,000. However, all the respondents from O4
category having income of Rs.10,000 to Rs.15,000(9.52%), Rs.20,000 to
Rs.25,000(38.09%) and above Rs.25000 (52.38%).
Table 5.13
Education/ Occupation Wise Distribution of Customers
Occupational Categories
Education O1 O2 O3 O4 O5
Total
E1 5 (6.09)
0 (0.00)
0 (0.00)
0 (0.00)
2 (3.70)
7 (1.75)
E2 40 (48.78)
28 (16.18)
2 (2.85)
0 (0.00)
5 (9.25)
75 (18.75)
E3 24 (29.26)
61 (35.26)
13 (18.57)
2 (9.52)
6 (11.11)
106 (26.5)
E4 6 (7.31)
56 (32.36)
31 (44.28)
13 (61.90)
25 (46.25)
131 (32.75)
E5 7 (8.53)
28 (16.18)
24 (34.28)
6 (28.57)
16 (29.62)
81 (20.25)
N 82 173 70 21 54 400
Occupation wise table 5.13 reveals that 48.78 per cent businessmen are matric
and under-graduate. 35.26 per cent of bank customers from O2 category are graduate. In
the same category of serviceman that is O2; 32.36 per cent of the respondents are having
post graduate degree comes under the category of E4. 34.28 per cent of respondents from
O3 category having professional degree are having professional qualification also.
However, only 6.09 per cent respondents of O1 category and 3.70 per cent of O5
category comes under the category of E1 with only matric qualification.
133
Table 5.14
Sex/ Education Wise Distribution of Respondents
Educational Categories
Sex E1 E2 E3 E4 E5
Total
Male 5 (71.42)
59 (78.66)
71 (66.98)
83 (63.35)
68 (83.95)
286 (71.5)
Female 2 (28.57)
16 (21.33)
35 (33.01)
48 (36.64)
13 (16.04)
114 (28.5)
N 7 75 106 131 81 400
Table 5.14 reveals that in total 71.5 per cent respondents are males and 28.5 per
cent are females. However, proportion of male respondents are high in E5 (83.95%) and
E2 (78.66%) category. In females, the large proportion consist of E4 (36.64%) followed
by E3 (33.01%).
Table 5.15
Sex/ Occupation Wise Distribution of Customers
Occupation Categories
Sex O1 O2 O3 O4 O5
Total
Male 66 (80.48)
115 (66.47)
46 (65.71)
21 (100)
38 (70.37)
286 (71.5)
Female 16 (19.51)
58 (33.52)
24 (34.28)
0 (0.00)
16 (29.62)
114 (28.5)
N 82 173 70 21 54 400 Occupation wise, table 5.15 reveals that 80.48 per cent of male belongs to
business category, whereas all the agriculturist are male respondents. In the female
category, the major proportion was those who either belong to a service category or to a
professional category.
5.7 Respondent’s Opinion Regarding Different Electronic Banking Services
There are varieties of services offered by the banks through electronic banking.
Therefore ranking was done to judge the opinion of respondents regarding different
e-banking services.
13
4
Table 5.16
Reasons for Adoption of E-banking
(N=400)
Rea
sons
for
ado
ptio
n
Ran
k 1
R
ank
2 R
ank
3 R
ank
4 R
ank
5 R
ank
6 R
ank
7 R
ank
8
Ran
k 9
Ran
k10
WA
S
Ove
rall
Ran
king
D
etai
l Inf
orm
atio
n 76
84
51
23
28
20
32
30
8
48
6.58
2
Con
veni
ence
95
46
44
44
33
34
21
14
57
12
6.
61
1
Ris
k 30
41
30
41
56
90
10
30
28
37
5.
51
5
Cos
t 18
40
40
38
47
85
44
53
24
11
5.
56
4
Fast
est M
ode
61
23
28
42
76
53
52
33
18
14
6.03
3
Fund
s M
ovem
ent
10
18
29
56
66
66
59
37
39
20
5.14
6
Inte
rnet
Acc
ess
8 12
58
39
50
49
74
33
38
39
4.
95
7
Impr
oved
Ser
vice
18
42
27
25
33
35
47
85
58
30
4.
77
9
Any
time
Ban
king
51
42
30
27
8
10
42
41
93
56
4.87
8
Eas
y 33
40
45
19
20
9
24
49
34
127
4.46
10
Tab
le 5
.16
exhi
bits
tha
t th
ere
is a
wid
e di
verg
ence
of
cust
omer
’s o
pini
on r
egar
ding
e-b
anki
ng s
ervi
ces.
Wei
ghte
d av
erag
e sc
ore
was
cal
cula
ted
for
rank
ing
of s
ervi
ces.
It s
how
s th
at e
-ban
king
pro
vide
s co
nven
ient
way
s to
man
age
serv
ices
and
fin
ance
(6.6
1) f
ollo
wed
by
deta
iled
info
rmat
ion
in s
econ
ds(6
.58)
, fas
test
mod
e of
ser
vice
s (6
.03)
, bri
ng d
own
the
cost
of
bank
ing(
5.56
), le
ss r
isk
and
grea
ter
secu
rity
(5.5
1), q
uick
mov
emen
t of
fund
s (5
.14)
, fa
stes
t in
tern
et a
cces
s sp
eed(
4.95
),an
ywhe
re,
anyt
ime
bank
ing
(4.8
7),
redu
ced
was
ting
cos
t, in
crea
sed
flex
ibili
ty a
nd i
mpr
oved
serv
ice
(4.7
7) a
nd e
asy
to tr
ansa
ct f
rom
off
ice
, hou
se o
r w
hile
trav
elin
g(4.
46).
It c
an b
e ob
serv
ed th
at b
ank
cust
omer
fou
nd it
sui
tabl
e to
tran
sact
13
5
thro
ugh
elec
tron
ic b
anki
ng.
The
refo
re i
mpr
oved
ser
vice
s, e
asy
to t
rans
act
from
any
whe
re a
nd a
nyti
me
are
the
mai
n re
ason
s du
e to
whi
ch e
-
bank
ing
is a
dopt
ed b
y th
e cu
stom
ers.
Table 5.17
Benefits Availed Through E-banking
E-b
anki
ng S
ervi
ces
R
ank
1
Ran
k 2
Ran
k 3
Ran
k 4
Ran
k 5
Ran
k 6
Ran
k 7
Ran
k 8
R
ank
9 R
ank1
0 W
AS
O
vera
ll R
anki
ng
With
draw
al
216
64
31
17
26
15
9 2
3 17
8.
49
1
Ope
ning
of
Acc
ount
s 32
79
60
54
45
24
28
18
28
32
6.
33
3
Che
ckin
g of
Bal
ance
30
71
61
80
42
42
3
30
33
8 6.
56
2
Tra
nsfe
r of
Fun
ds
24
26
80
68
84
37
30
18
12
21
6.24
4
Onl
ine
Info
rmat
ion
24
19
38
63
62
80
57
28
13
16
5.70
6
Bill
Pay
men
t 23
35
51
32
58
88
50
29
17
17
5.
75
5
Loa
n R
ates
10
6
13
53
29
57
77
87
30
38
4.38
7
E-s
hopp
ing
4 27
38
16
29
22
81
82
74
27
4.
32
8
Impo
rt-E
xpor
t 15
31
20
11
5
29
23
63
145
58
3.67
9
Dow
nloa
ding
of
Form
s 13
42
14
15
24
8
37
38
36
173
3.54
10
136
able 5.17 shows that all electronic banking services are not equally important for the
customers, some services are very important while some are less important. The findings
shows that cash withdrawal (8.49), Checking of account balance (6.56), Opening of
account through online internet (6.33), transfer of funds (6.24), bill payment (5.75) and
online information (5.70) are the important advantages availed through e-banking.
Among the least important services are loan rates (4.38), e-shopping (4.32), import-
export trade documents (3.67) and downloading of various forms (3.54) are the less
important services for the customers. So the findings indicated that cash withdrawal
through onsite and offsite ATM’s, anywhere, anytime banking, checking of account
balance through phone and mobile banking are the major benefits creeped by e-banking
for the customers.
Section-III
5.7 Exploring the Relationship Between Service Quality and E-banking
This section deals with various dimensions of service quality studied to know
electronic banking impact on service quality. Various statistical tools are applied for the
said purpose like mean, standard deviation, factor analysis and t-test. Various dimensions
of service quality helps to clarify as to which particular factors or variables of electronic
banking has increased the level of service quality for the customers.
Mean Scores and Standard Deviation
Table 5.18 reveals the mean and standard deviation for the individual factors of
electronic banking to measure the service quality, customer satisfaction and their
response towards the different dimensions. Amongst the various dimensions, the highest
score was found for ‘transfer of fund is faster as compared to manual banking’
(competence dimension) followed by the ‘representation of service through plastic card’,
‘credit card and debit card ‘(tangible dimension) and same mean score for ‘transfer of
fund through e-banking is easier’(competence) and than by ‘bank use advanced
computer/ IT to serve clients’. Three of the four variables of responsiveness were also
ranked highest. The scores in all the dimension of communication are also high. The
lowest score was to be found regarding ‘ability to fulfill the requirement’ in credibility
dimension. The standard deviation is also low and high according to the respective mean
scores.
137
Table 5.18
Mean Scores and Standard Deviation for Individual Features of Quality,
Customer Satisfaction and Behavioural Response
Statements Dimension Mean S.D.
1. Banks use advanced Computer/IT to serve clients.
Tangibility 4.00 0.86
2. E-banking provides modern looking equipment.
Tangibility 3.92 0.86
3. Physical representation of service through plastic card, credit and debit card is easy.
Tangibility 4.02 0.86
4. E-banking provides 24 hours, 365 days a year service to customers.
Tangibility 3.99 0.96
5. It helps in reducing the no. of queues in the bank branches.
Tangibility 3.83 0.92
6. E-banking provides more physical facilities to the customers.
Tangibility 3.73 0.89
7. It provides individualized attention to the customers.
Understanding 3.66 0.91
8. It provides necessary information to the customers.
Understanding 3.78 0.87
9. Website of the bank is designed according to the need of the customer.
Understanding 3.80 0.91
10. It ensures to provide necessary information to the customer.
Understanding 3.80 0.88
11. E-banking learns the specific requirement of the customer.
Understanding 3.63 0.95
12. E-banking ensures physical safety of the transaction.
Security 3.67 1.02
13. It is trusted by young generation. Competence 3.86 0.87 14. Password facility provides confidentiality to
transaction. Security 3.82 1.04
15. It also increases the financial security. Security 3.84 0.90 16. Privacy can be easily maintained. Security 3.70 1.02 17. E-Banking explains the service itself. Communication 3.78 1.03 18. It explains the cost of service being used. Communication 3.72 0.85 19. It assures the customer that problem will be
handled. Communication 3.74 0.72
20. It explains the trade off between service and cost.
Communication 3.77 0.77
21. E-banking provides up to date information. Communication 3.77 0.98 22. It also provides sophisticated information for
well educated customers. Communication 3.83 0.80
23. Transfer of fund is easier through E-banking. Competence 4.02 0.84 24. E-Banking provides more punctuality,
transparency, accountability. Competence 3.77 0.94
25. Transfer of funds is faster as compared to manual banking system.
Competence 4.06 0.88
138
26. It provides accuracy in billing. Reliability 3.75 0.96 27. It helps in keeping records correctly. Reliability 3.86 0.89 28. It performs the service at designated time. Reliability 3.69 0.90 29. E-banking is very necessary for the
development of new economy of India. Responsiveness 3.97 0.95
30. It improves the quality of customer service. Responsiveness 3.90 1.02 31. Response of service through e-banking is very
prompt and quick. Responsiveness 3.71 0.98
32. E-Banking service is accessible via Internet banking, mobile banking, EFT, ECS, ATM.
Access 3.85 0.95
33. Online purchase of goods and services including online payment is easier.
Access 3.94 0.97
34. Availability of service is faster in e- banking as compare to manual banking.
Responsiveness 3.94 0.99
35. It provides convenient location of service facility (location of ATM, POS terminals).
Access 3.93 0.98
36. It reduces the waiting time to receive the service.
Access 3.87 0.88
37. E-banking increases the reputation of the banks Credibility 3.83 1.02 38. It increases the believability, honesty and
trustworthiness of the customers in banks. Credibility 3.82 0.89
39. It ensures the ability to fulfill the requirement Credibility 3.02 1.14 40. Degree of reliability involved in Interaction
with customer is more in e- banking. Credibility 3.73 0.88
41. It helps in better customer relationship, attracting and retaining them.
Understanding 3.63 1.02
42. E-banking provides effective medium of promotion of various schemes.
Communication 3.87 0.76
43. It provides unlimited network to the banks to approach customers.
Credibility 3.75 0.80
5.7.1 Service Quality Level of Banks Using SERVQUAL Model
For the measurement of impact of e-banking on service quality, SERVQUAL
model developed by Parasuraman et,al.(1985) has been used. The data collected through
the questionnaire was analyzed by using factor analysis and other statistical techniques.
The first stage was to determine whether the nine dimensions could be viewed as
appropriate indicators of banking industry. The second stage was to assess the variables
underlying the various dimensions. Accordingly, 43 variables were developed to assess
the nine dimensions. This stage tests these variables as well as their relevance in
conceptualizing service quality.
The 43 service quality variables were factor analyzed to determine whether there
exists underlying dimensions of service quality. The objective of the analysis was to
summarize the information contained in the original 43 variables in to smaller sets of
139
newly correlated composite dimension or factors. Only variables with factor loading of
0.40 (Hatcher, 1994) were considered important for further analysis and data reduction
and other were excluded. Cronbach alpha and Kaiser-Meyer-Olkin (KMO) measure of
sampling adequacy and Bartlett’s test of sphercity was used to measure the reliability of
data. If the value of KMO and Cronbach alpha in any variable is greater than 0.50 than
the data will be regarded as reliable for research. The factors with eigen value equal to or
greater than one were considered significant and chosen for interpretation.
In order to conduct factor analysis on 43 variables of service quality, the various
sub dimensions has been divided into 9 main dimensions namely Access,
Communication. Credibility, Competence, Reliability, Responsiveness, Security,
Understanding, Tangibility. Each dimension consists of 4-5 sub dimensions. But all these
dimensions are not equally important for measuring the service quality in banking
industry. So, factor analysis was used to extract those factors having eighen value greater
than 1. To study the impact of e-banking on service quality and to identify the important
factors for the customers to choose e-banking, Two assumptions have been framed.
• To know the impact of e-banking on the level of customer satisfaction, all factors are
equally important.
• There is no correlation among the different factors to judge the level of customer
satisfaction.
Table 5.19
Measuring the Reliability of Data
Variables Kaiser-Meyer-
Olkin
Measure(KMO)
Bartlett’s Test of
Sphericity
(Approx.Chi-square)
d.f. Significance
Level
Access 0.507 179.659 6 0.000 Communication 0.520 171.384 21 0.000
Competence 0.663 206.790 6 0.000
Credibility 0.591 205.889 10 0.000
Reliability 0.581 74.399 3 0.000
Responsiveness 0.666 275.346 6 0.000
Security 0.666 154.181 6 0.000
Tangibility 0.742 332.709 15 0.000
Understanding 0.797 211.037 15 0.000
140
In order to know the various factors considered important for the customers, two
tests were conducted under the factor analysis to judge the reliability of data, i.e., Kaiser-
Meyer-Olkin measure of sampling adequacy and Bartlett test of sphericity. The results so
obtained were subjected to both these tests. The value of KMO statistics in all the
factors is >0.5. Hence, all the factors are not considered equally important for measuring
the service quality of e-banking. Therefore, null hypothesis is rejected. Bartlett’s test of
sphericity shows the value of Chi-square which is significant at 0.000 levels in all the
dimensions of service quality. These two tests show that the data is fit for conducting the
factor analysis.
5.9.1 Identification of Nine Service Quality Factors
Principal Component Analysis with Varimax Rotation method was employed for
extracting the factors. All the variables with their factor loadings and percentage of
variance explained by each factor are given in the following tables used on forty-three
items of service quality.
Principal Component Factor Analysis with Varimax Rotation,
Percentage of Variance Explained and factor Loadings
Nine factors have been extracted with the help of different dimensions of service quality.
The percentage of variance explained by the factors individually varies from 38.915 to
58.579 and the communalities vary from 0.460 to 0.778. All the factors have been given
appropriate names on the basis of various variables present in each case. The structure of
these nine factors is discussed below
Factor 1
Access
Table 5.20
Analysis of Customers’ Perceptions Regarding Access Dimension
S. No. Variable Factor
Loading
1. E-banking service is accessible via Internet banking, mobile banking, EFT, ECS, ATM.
0.467
2. Online purchase of goods and services including online payment is easier.
0.676
3. It provides convenient location of service facility (location of ATM, POS terminals)
0.794
4. It reduces the waiting time to receive the service. 0.659 Cronbach Alpha 0.556
Eigen value 1.740 Percentage of variance(sum of square loadings) 43.491
141
Different dimensions of ‘Access’ under e-banking were studied and four factors
have been loaded on this factor. The factor loadings of all the statements were calculated
and it has been found that the loading of all the statements is greater than 0.4, thus, all
the statements will be accepted. The Eigen value and Cronbach alpha for this factor are
1.740 and 0.556 respectively. The Eigen value of the factor was greater than one and
indicates that it fits well with the data from all the respondents on all the statements. The
analysis shows that Eigen value explains 43.49 per cent of the variance from all the
respondents and there is only one factor extracted having the factor loading closer to 1.
This shows that customers do not agree that e-banking is easily accessible through
mobile, ATM, internet banking, EFT and ECS. Convenience is having high factor
loading which is 0.79 and as such this factor is extracted and retained. It implies that e-
banking provides convenient location of service by installing the onsite and offsite
ATMs and point of sale terminals .
Factor 2
Communication
Table 5.21
Analysis of Customers’ Perceptions Regarding Communication Dimension
S. No. Variable Factor
Loading
Eigen
Value
1. E-banking explains the service itself. 0.496 1.57 2. It explains the cost of service being used. 0.676 1.34 3. It assures the customer that problem will be handled. 0.633 1.22 4. It explains the trade off between service and cost. 0.519 5. E-banking provides up to date information. 0.520 6. It also provides sophisticated information for well
educated customers. 0.698
7 E-banking provides effective medium of promotion of various schemes
0.695
Eigen value 1.57,1.34 1.22
Cronbach Alpha 0.780 Percentage of variance(sum of square loadings) 59.077
142
Table 5.22
Rotated Component Matrix of Communication Dimension
Factor 1 Factor 2 Factor 3
Explanation 0.205 0.463 0.49 Cost -0.381 0.727 -0.025 Handling 0.314 0.731 -0.008 Tradeoff 0.658 0.262 -0.135 Update -0.041 -0.137 0.707
Sophisticated 0.818 -0.137 0.096 Effectiveness -0.043 0.097 0.764
Table 5.21 shows communication factor that consisted of seven variables. The
factor loadings of all the statements were calculated and it was found that the loadings of
all the statements were greater than 0.4, and thus, all were accepted. The values of
Cronbach alpha and Eigen value so obtained suggest a good consistency of the data. The
analysis shows that the Eigen value represents 59 per cent of the variance of data. In the
three variables, Eigen values are having value greater than 1 which shows that the factor
extracted would be equivalent to three. Rotated component matrix with Kaiser
Normalization helped in data reduction. The matrix explains that the factors extracted are
the combination of how many variables. The principal component analysis under the
rotation converged into three iterations. The following three components have been
extracted.
Component 1: Sophisticated
Component 2: Cost, Handling
Component 3: Update, effectiveness.
Table 5.22 shows the factor that represents the combination of variables under
communication dimension. In the first extraction of factor loading, ‘sophisticated’ is
having highest loading i.e., 0.818 which implies that electronic banking provides
sophisticated information to well educated customers. People perceive that service of
electronic banking is more useful and valuable for educating community as large
proportion of people are involved in service sector having their own PC, laptop and
computer. So, they can get any sort of information regarding their account balance,
transfer of funds, clearing services, mobile recharging, etc. and they can get any sort of
information well in time through internet banking with the help of transactional and
143
informational websites of banks. It brings out that the benefit of E-banking is mainly
enjoyed by educated customers only
In the second Matrix, two factors are having value closer to 1, namely, ‘cost’
and ‘handling’, with 0.727 and 0.731 respectively. As e-banking explains the cost of
service as well as assurance to the customer that the problem will be handled. It means
explaining something about the service as well as giving assurance to customer as a
feedback means e-banking services are informative and helpful in data handling and cost
reduction. ‘Update’ and ‘effectiveness’ dimension is having high loading in the
interpretation of third factor. It implies that e-banking provides latest and effective
information to the customers.
Factor 3
Competence
Table 5.23
Analysis of Customers’ Perceptions Regarding Competence Dimension
S. No. Variable Factor Loading
1. Transfer of fund is easier through E-banking. .418 2. E-banking provides more punctuality, transparency,
accountability. .745
3 Transfer of funds is faster as compared to manual banking system.
.776
4. It is trusted by young generation. .750 Eigen value 1.896 Cronbach alpha .614 % of variance(sum of square loadings) 47.393
Table 5.23 reveals that competence factor consisted of four variables and each of
these variables was analyzed using factor analysis. The analysis shows that the Eigen
value represents 47.39 percentage of the variance of data. There are three variables
having value closer to 1 and above 0.7. The variables extracted were ‘Easy’, ‘Trusted’
and ‘Punctuality’. These three factors explained that the transfer of funds due to RTGS,
ECS and EFT is easier and services provided through e-banking are adequate,
accountable, faster and transparent.
144
Factor 4
Credibility
Table 5.24
Analysis of Customers’ Perceptions Regarding Credibility Dimension
S. No. Variable Factor Loading
1. E-banking increases the reputation of the banks. 0.713 2. It increases the believability, honesty and trustworthiness of
the customers in banks. 0.699
3. It ensures the ability to fulfill the requirement. 0.701 4. Degree of reliability involved in interaction with customer
is more in E- banking. 0.471
5. It provides unlimited network to the banks to approach customers
0.346
Cronbach Alpha 0.787 Eigen value 1.684, 1.254 Percentage of variance(sum of square loadings) 58.759
Table 5.25
Rotated Component Matrix of Credibility Dimension
Factor 1 Factor 2
Reputation 0.772 -0.343 Trustworthy 0.823 0.147 Ability -0.151 0.828
Reliability 0.582 0.364 Network 0.205 0.552
The credibility factor consisted of four variables. In this factor two variables have
Eigen values greater than 1 and as such two factors will be extracted with rotated
component matrix and Kaiser Normalization. These are:
Component 1: Reputation, trustworthy
Component 2: Ability
In the first extraction, the variables named ‘reputation’ and ‘trustworthy’ are
having high loading closer to 1. It can be inferred that e-banking services increase the
honesty, reputation and trustworthiness of the banks by providing on time and desirable
services. In the next category, there is only one factor having a loading of 0.828. The
factor so called is ‘ability’ as e-banking enhances the ability to fulfil the requirement of
the customer that was earlier not possible by brick and mortar banking.
145
Factor 5
Reliability
Table 5.26
Analysis of Customers’ Perceptions Regarding Reliability Dimension
S. No. Variable Factor Loading
1. It provides accuracy in billing. 0.776 2. It helps in keeping records correctly. 0.722 3 It performs the service at designated time. 0.615 Cronbach Alpha 0.699 Eigen value 1.502 Percentage of variance(sum of square loadings) 50.061
The reliability factor consisted of three variables and each of these variables was
analyzed using factor analysis. The factor loading of all the statements was calculated
and it was found that the loadings of all the statements were greater than 0.4, and thus,
all were accepted. The Cronbach alpha and Eigen values are 0.699 and 1.502
respectively which suggest a good consistency of the data. Only one factor having Eigen
value greater than 1 explained 50.61 per cent of the data. Hence, only one component is
extracted.
Component: Accuracy, Correctness
The component is a combination of two variables that is accuracy and correctness.
As e-billing is more accurate than paper billing and records are kept correctly in online
banking and can be retained for the longer period.
Factor 6
Responsiveness
Table 5.27
Analysis of Customers’ Perceptions Regarding Responsibility Dimension
S.No. Variable Factor Loading
1. E-banking is very necessary for the development of new economy of India.
0.714
2. It improves the quality of customer service. 0.724 3. Response of service through e-banking is very prompt and
quick. 0.798
4. Availability of service is faster in e-banking as compared to manual banking.
0.617
Cronbach Alpha Eigen value
0.679 2.051
Percentage of variance(sum of square loadings) 51.281
146
Table 5.27 shows the statements under responsiveness dimension. The
responsiveness factor consisted of four variables and each of these variables were
analyzed using factor analysis. The factor loadings of all the statements were calculated
and it was found that the loadings of all the statements were greater than 0.4, and thus,
all were accepted. The Cronbach alpha and Eigen value are 0.679 and 2.051 respectively
which suggest a good consistency of the data. Their is only one Eigen value explaining
51.28 per cent of the data. The component matrix shows four variables and all the
variables having value greater than 0.4. Hence, no factor can be rejected but three factors
having loading greater than 0.7 and as such the following factors will be combined.
Component: Development, quality, quickness
These three out of four factors represent that e-banking is required for the
development of economy, improve the quality of service, and bring quickness in
response. This shows that e-banking is a major factor for the growth and expansion of
banking sector and the economy as a whole by reduction of wastage and less paper
involvement in electronic transactions.
Factor 7
Security
Table 5.28
Analysis of Customers’ Perceptions Regarding Security Dimension
S. No. Variable Factor Loading
1. E-banking ensures physical safety of the transaction. 0.582 2. Password facility provides confidentiality to transaction. 0.752 3. It also increases the financial security. 0.687 4. Privacy can be easily maintained. 0.660 Cronbach Alpha 0.691 Eigen value 1.811 Percentage of variance(sum of square loadings) 45.271 Table 5.28 shows security dimension that consisted of four variables. The value
of Cronbach alpha and Eigen values are 0.691 and 1.811 respectively, which suggest a
good consistency of the data. Only one factor having Eigen value greater than 1
explained 45.271 per cent of the data.
One factor ‘confidence’ having loading of 0.752 shows that people are highly
satisfied with e-banking because the technology of banking is mainly operated through
password, be it internet banking or ATM processing. Password facility provides
confidentiality to all the transactions. So, much influence in security issue is of password
147
facility which provides immense help to the customers in maintaining secrecy of their
money as well as transactions.
Factor 8
Tangibility
Table 5.29
Analysis of Customers’ Perceptions Regarding Tangibility Dimension
S. No. Variable Factor Loading
1. Banks use advanced Computers/IT to serve clients. 0.648 2. E-banking provides modern looking equipment. 0.749 3. Physical representation of service through plastic card,
credit and debit card is easy. 0.467
4. E-banking provides 24 hours, 365 days a year service to customers.
0.706
5. It helps in reducing the no. of queues in the bank branches. 0.555 6. E-banking provides more physical facilities to the
customers. 0.572
Cronbach Alpha 0.678 Eigen value 2.335 Percentage of variance (sum of square loadings) 38.915
The tangibility factor consisted of six variables. The value of Cronbach alpha and
Eigen values are 0.678 and 2.335 respectively explaining 38.915 per cent of the data.
Only one factor having Eigen value greater than 1 explained 38.91 per cent of the data.
All the six variables have factor loadings greater than 0.4 but only those factors will be
extracted those which have loading greater than 0.7. So, with help of component matrix,
two variables are extracted.
Component: Modern equipment, Hours
Installation of new machines, change in the infrastructure of banks in a
modernized way has only been possible due to e-banking. Secondly e-banking provides
24 hours access to the banking facility. The concept of branch banking is also abolishing
due to e-banking
148
Factor 9
Understanding
Table 5.30
Analysis of Customers’ Perceptions Regarding Understanding Dimension
S. No. Variable Factor Loading
1. It provides individualized attention to the customers. 0.454 2. It provides necessary information to the customers. 0.478 3. Website of the bank is designed according to the need of the
customer. 0.502
4. It ensures to provide necessary information to the customer. 0.515 5. E-banking learns the specific requirement of the customer. 0.372 6. It helps in better customer relationship, attracting and
retaining them 0.730
Cronbach Alpha 0.808 Eigen Value 1.995,1.057 Percentage of variance (sum of square loadings) 50.862
Table 5.31
Rotated Component Matrix of Understanding Dimension
Factor 1 Factor 2
Attention 0.664 -0.115 Information 0.609 0.327 Need 0.693 -0.149 Assure 0.718 -0.009 Requirement 0.411 -0.451 Relations 0.062 0.852
The understanding factor consisted of six variables. The values of Cronbach
alpha and Eigen value are 0.808 and 2.335 respectively. There is only one factor having
Eigen value greater than 1 explaining 50.862 per cent of the data. ‘Courtesy’ is one of
the main dimensions. But due to having only one sub-dimension it is added in the
understanding dimension. Out of the six factors, two Eigen values are having value
greater than 1, hence, rotated component matrix is having two iterations and the factors
extracted are as follows:
Component 1- Need, Assure
Component 2- Relations
Table 5.31 reveals rotated component matrix. In the first matrix, we are having
two factors with high loadings that is ‘need’ with 0.693 and ‘assurance’ with 0.718. It
shows that e-banking suits the need of the customers and assures to provide the required
information in time. In the second matrix, only one factor is having high loading that is
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0.852 in relations. In the next matrix, the factor extracted is only one that is ‘Relations’
because e-banking helps in improving, attracting and retaining more customers.
5.8 Level of E-banking Services Offered by Different Banks
E-banking services are offered by public and private sector banks at different
levels. Table 5.32 to 5.36 reveals the satisfaction level of respondents, awareness about
new products and services, operational problems in the existing e-banking services.
Table 5.32
Satisfaction Level of Customers Regarding E-banking Services
E-banking Services Extremely
Poor
Poor Average
Good
Very
Good
Weighted
Average
Score
Rank
Internet banking services
17 19 88 200 76 3.74 4
Mobile banking services
11 54 166 119 50 3.35 10
Phone Banking services
8 57 178 108 49 3.33 11
Home banking services
33 47 148 122 50 3.27 12
ATM facility 25 19 96 123 137 3.82 2 Credit card Facility 20 16 124 164 76 3.65 5 Debit card facility 9 23 92 185 91 3.81 3 Electronic fund transfer
6 55 99 156 84 3.64 6
Bill Payment service
32 30 131 156 51 3.41 9
Inter-Connectivity of ATM’s
3 53 141 139 64 3.52 7
Request Facility 8 22 88 176 106 3.87 1 Information of New Products and Services.
23 29 141 152 55 3.46 8
Table 5.32 mentions the level of E-banking services offered by different banks.
The various e-banking services include Internet banking, Mobile banking, Phone
banking, Home banking, ATM, Credit cards, Debit cards, Electronic Fund Transfer, Bill
Payment etc. Regarding different services customer are having different opinions.
Weighted average scores are calculated for all the services. Majority of the respondents
are satisfied with the ‘request facility’ (3.87) which means the customer can easily ask
for any sort of information and can request for pass book, account information, balance
enquiry etc. through e-banking followed by ATM facility (3.82), debit card facility
(3.81), Internet banking services (3.74), credit card facility (3.65), Electronic fund
150
transfer(3.64), Inter-connectivity of ATMs (3.52), Information of new products and
services (3.46), bill payment service(3.41), mobile banking services (3.35), phone
banking services (3.33), home banking services (3.27). The respondents’ level of
satisfaction shows that banks up to some extent are satisfying the requirement of the
customers and fulfilling their diverse needs.
Table 5.33
Awareness Among Customers’ About New Products And Services
Frequency Percent Valid Percent Cumulative Percent
Advertisement 129 32.2 32.3 32.3 Manager 67 16.7 16.8 49.0 Website 67 16.7 16.8 65.8 E-mail 51 12.7 12.8 78.5 Other Customers 63 15.7 15.8 94.3 Mobile Banking 23 5.7 5.8 100.0 Total 400 99.8 100.0
Table 5.33 shows the awareness about the banking products and services in the
customers. The majority of the respondents (32.2%) aware about e-banking products and
services from the advertisement in the newspapers, 16.8 per cent from their respective
managers and websites of the banks respectively, 15.7 per cent from the other customers,
12.7 per cent from e-mail and 5.7 per cent from the mobile banking. So the mode of
awareness could be any as the customer of today’s world is competent and aware about
the usage of e-banking through different modes of communication.
Table 5.34
Operational Problems in the Use of Modern Technology
Nature of Problem Frequency Percent Valid Percent Cumulative Percent
Server down 31 7.7 7.8 7.8 Untrained Personnel 35 8.7 8.8 16.5 Non Working of ATM 75 18.7 18.8 35.3 Deposit of Cash 49 12.2 12.3 47.5 Ignorance of People 37 9.2 9.3 56.8 Low Response of Phone Calls
34 8.5 8.5 65.3
Onsite and Offsite Location of ATM
44 11.0 11.0 76.3
Availability of Currency
50 12.5 12.5 88.8
Risk of Loss of Currency
31 7.7 7.8 96.5
Delay in Services 14 3.5 3.5 100.0 Total 400 99.8 100.0
151
Table 5.34 encounters the nature of problem being faced by the respondents with
the usage of e-banking. The major problem arising in this is regarding the ATMs. 18.7
per cent respondents says that the ATMs of the bank does not either work properly or
having the shortage of cash in it. Further the respondents agree that in ATM also the
problem of queue is not solved, people still have to stand in queue to use their ATMs and
the reason may be some time technical difficulties or slow working of the machines.12.5
per cent respondent says that availability of currency might be in the bank premises or in
the ATMs causes’ problem to them. For online deposit also, the customers have to wait
for long time in bank despite of electronic fund transfer system. Thirdly comes the
problem of depositing the cash that constitute 12.2 per cent of the total problems.
Customers can withdraw fast cash from ATM but to deposit the money they still have to
rely on bank employees. Fourthly 11 per cent respondents agree that locations of ATMs
are not adequate. Even if a large number of ATMs are being installed still the customers
have to move far off places from their home and offices for the withdrawal of money. In
rural areas number of ATMs are very less. Further 9.2 per cent respondents encounter
problem due to their ignorance regarding the use of new technological methods as their
are no training and orientation programs organized for the customers to train and inform
them about the usage of e-banking products. 8.7 per cent perceive that they are facing
some problems due to untrained personnel in the organization, 8.5 per cent of the
respondents perceive that they face the problems because of non attending of the phone
calls by the bank employees. 7.7 per cent are facing the problem due to server down and
3.5 per cent due to delay in services.
Table 5.35
Problems in E-banking Services
Frequency Percent Valid Percent Cumulative Percent
Yes 235 58.6 58.8 58.8 No 165 41.1 41.3 100.0
Total 400 99.8 100.0
The methods and techniques used in e-banking are quite different from
traditional banking. In the list of services mentioned above, 58.6 per cent respondents
agree that they encounter problems in e-banking services and 41.1 per cent admitted that
they have adjusted their requirements according to any problem.
152
Table 5.36
Filing of Complaint
Frequency Percent Valid Percent Cumulative Percent
Yes 158 39.4 39.5 39.5 No 242 60.3 60.5 100.0
Total 400 99.8 100.0
Table 5.36 reveals whether the respondents lodged complaint to the banks
or not regarding their problem. Majority (60.3%) of the respondents formed an opinion
that although they have problems in e-banking services yet they don’t complaint
regarding it to their banks. The reason may be they are not familiar with the way to file
the complaint with the bank and 39.4 per cent respondents’ complaint regarding their
problems to the banks. It could be regarding usage of internet banking, mobile banking,
ATMs etc.
Section-IV
5.11 A Comparison of Customer Satisfaction in Public Sector and Private Sector
Banks
5.11.1 Customer Profile
This section deals with the results analysed to study the impact of e-banking on
level of customer satisfaction across public and private sector banks. The data collected
was analyzed according to customer use of banks in private sector and public sector.
Table 5.37 shows the sample distribution between the two banking sector as it relates to
gender, age, education, occupation, household income. In the sample, 200 respondents
each from public and private sector have been selected for the study.
Table 5.37
Characteristics of Customers’ Profile in Public and Private Sector Banks
Private Public
Gender
Male 164 124 Female 36 76 200 200 Marital status
Married 119 137 Unmarried 81 63 200 200 Age
Below 30 119 91
153
30 But Below 45 51 58 45 But Below 60 22 38 Above 60 8 13 200 200 Education
Below Matric 4 2 Matric and Under Graduate 26 49 Graduate 58 48 Post Graduate 70 60 Professional Degree 42 41
200 200 Occupation
Businessmen 42 40
Servicemen 87 86 Professional 40 28 Agriculturist 16 5 Any Other 15 41 Total 200 200 Income
Below 10000 40 27 10000-15000 44 35 15000-20000 34 39 20000-25000 29 35 Above 25000 53 64 200 200 Length of Account
Less than 1yrs 42 17 1-3 yrs 67 33 3-5yrs 38 24 5-7 yrs 22 37 Above 7 31 89
200 200 Type of Account
Saving 162 146 Current 23 42 Salary 15 12 200 200
5.11.2 Comparative Service Quality Analysis of Public and Private Sector Banks
Using SERVQUAL Model
The research examined the comparative analysis of services between public and
private sector banks. The dimension of SERVQUAL is divided into nine parts
comprising access, communication, competence, credibility, responsiveness, reliability,
154
security, tangibility and understanding. T-test was applied to calculate the mean
differences between public and private sector banks.
Factor 1
Access
Table 5.38
Sector-wise Analysis of Customers’ Perception Regarding Access Dimension
Statements Public Private t-value p-value
E-banking service is accessible via Internet banking, Mobile banking, EFT, ECS, ATM.
3.91 3.78 1.374 0.170
Online purchase of goods and services including online payment is easier.
3.87 4.01 -1.452 0.002**
It provides convenient location of service facility(location of ATM, POS terminals)
3.93 3.93 0.000 0.500
It reduces the waiting time to receive the service.
4.02 3.72 3.409 0.000**
** p-value is significant at 0.05 level.
Table 5.38 shows the statistical difference of access dimension in public and
private sector banks. In the access dimension, there is a significant gap in two services
while in other two there is no such difference. In case of online purchase of goods and
services, private sector is having 4.01 mean score and public sector with 3.87 where the
p-value is significant at 5 per cent level. This shows both public and private sector
customers agree but private sector seem to be higher beneficiary of online services of
their respective banks. Other statistical difference is in the reduction of waiting time to
receive the service. Here public (4.02) and private (3.72) sector services are different and
public sector banks are helpful in reduction of waiting time to receive the services. This
difference could be due to better time management, efficient employees and installation
of more number of ATMs. Whereas in case of internet, mobile, ECS, EFT services there
is no such significant difference found.
155
Factor 2
Communication
Table 5.39
Sector-wise Analysis of Customers’ Perception Regarding Communication
Dimension
Statements Public Private t-value p-value
E-banking explains the service itself.
3.87
3.68 1.856 0.064
It explains the cost of service being used.
3.61 3.83 2.618 0.995
It assures the customer that problem will be handled.
3.61 3.86 3.524 0.000**
It explains the trade off between service and cost.
3.70 3.84 1.819 0.069
E-banking provides up to date information.
3.63 3.91 2.880 0.998
It also provides sophisticated information for well educated customers
3.79 3.87 1.006 0.842
E-banking provides effective medium of promotion of various schemes
3.60 3.90 -3.811 0.000**
** p-value is significant at 0.05 level.
The communication dimension shows that customer perception in public and
private is almost same in all statements except in two statements with mean score of 3.61
and 3.60 and 3.86 & 3.90 respectively. As e-banking assures that customer problem can
be handled but private sector customers are more agreed upon it. Second statistical
difference is significant in e-banking as effective medium of promotion of various
schemes. This shows that websites of private sector banks are more customer friendly
where they can come to know about the various schemes launched by the banks. In both
these areas public sector do need to have improvement.
156
Factor 3
Competence
Table 5.40
Sector-wise Analysis of Customers’ Perception Regarding Competence Dimension
Statements Public Private t-value p-value
It is trusted by young generation. 3.92 3.81 1.255 0.210 Transfer of fund is easier through E-banking.
4.02 4.02 0.000 1.000
E-banking provides more punctuality, transparency, accountability.
3.78 3.77 0.107 0.915
Transfer of funds is faster as compared to manual banking system.
4.03 4.09 -0.680 0.497
** p-value is significant at 0.05 level.
Regarding the competence dimension, both the sectors are giving the same
service in this regard. Both the sector’s services are trusted by the young generation, no
hindrance in transfer of fund. In both the sectors the e-banking services are more
punctual, transparent and accountable. Although there is no statistical difference found in
two sectors but public sector (3.92) is more trusted by the young generation than private
sector (3.81). As far as the transfer of funds are concerned private sector banks (4.09) are
offering it a better way than the public sector banks (4.03).
Factor 4
Credibility
Table 5.41
Sector-wise Analysis of Customers’ Perception Regarding Credibility Dimension
Statements Public Private t-value p-value
E-banking increases the reputation of the banks
3.87 3.79 0.783 0.434
It increases the believability, honesty and trustworthiness of the customers in banks.
3.73 3.92 -2.138 0.003**
It ensures the ability to fulfill the requirement
2.26 3.77 -17.679 0.000**
Degree of reliability involved in interaction with customer is more in e- banking.
3.60 3.87 -3.086 0.002**
It provides unlimited network to the banks to approach customers
3.60 3.90 -3.811 0.000**
** p-value is significant at 0.05 level
Table 5.41 shows the comparison of difference between the public and private
sector in the credibility dimension. The results indicated the gap between two sectors in
four out of five statements representing ‘trustworthiness’, ‘ability to fulfill the
157
requirement’, ‘degree of reliability’ and ‘unlimited network approach’ for customers. All
the four statements are significant at 5 % level of significance and the mean score of
private sector customers is high in all statements. Customers are disagreeing with public
sector banks on the ground that their all requirements are fulfilled with the low mean
score.
Factor 5
Reliability
Table 5.42
Sector-wise Analysis of Customers’ Perception Regarding Reliability Dimension
Statements Public Private t-value p-value
It provides accuracy in billing. 3.71 3.80 0.937 0.349
It helps in keeping records correctly. 3.85 3.88 -0.334 0.738
It performs the service at designated time. 3.75 3.62 1.432 0.152
** p-value is significant at 0.05 level
Table 5.42 reveals that there is no statistical difference between two sectors. The
dimension comprises of ‘accuracy in billing’, ‘keeping online records’ and ‘performing
the services’ at designated time with mean score of 3.80, 3.88 and 3.62 in private sector
respectively and 3.71, 3.85 and 3.75 in public sector. It is observed that if public sector
banks intend to enhance their service quality than they must improve the service quality
in those dimensions where the score is either too low than private sector or customers are
not satisfied with the services being provided.
Factor 6
Responsiveness
Table 5.43
Sector-wise Analysis of Customers’ Perception Regarding Responsiveness
Dimension
Statements Public Private t-value p-value
E-banking is very necessary for the development of new economy of India.
4.02 3.92 1.048 0.295
It improves the quality of customer service.
4.03 3.76 2.666 0.008**
Response of service through e-banking is very prompt and quick.
3.71 3.71 0.000 1.000
Availability of service is faster in e- banking as compare to manual banking.
3.76 4.12 -3.686 0.000**
** p-value is significant at 0.05 level
158
The results in responsiveness dimension shows significant difference in two out
of four statements. Customers in both sectors agree that ‘e-banking is necessary for the
development of new economy of India’ and ‘regarding the service response through e-
banking’ with 4.02 and 3.71 mean score for public sector and 3.92 and 3.71 for private
sector. Public sector bank customers are more satisfied with the improvement of quality
service with 4.03 mean score and private sector banks customers with the availability of
service being faster in e-banking as compared to manual banking with 4.12 mean score.
Factor 7
Security
Table 5.44
Sector-wise Analysis of Customers’ Perception Regarding Security Dimension
Statements Public Private t-value p-value
E-banking ensures physical safety of the transaction.
3.71 3.64 0.683 0.493
Password facility provides confidentiality to transaction.
3.92 3.81 1.255 0.210
It also increases the financial security. 3.79 3.86 -0.674 0.250 Privacy can be easily maintained. 3.69 3.70 -0.097 0.922 ** p-value is significant at 0.05 level
As is evident from table 5.44 that both sector banks need to improve their
security services for e-banking. Customers wants more confidentiality for their internet
and ATM services. Both sector customers are neutral regarding their expectations from
their banks and required a further improvement.
Factor 8
Tangibility
Table 5.45
Sector-wise Analysis of Customers’ Perception Regarding Tangibility Dimension
Statements Public Private t-value p-value
Banks use advanced Computer/IT to serve clients. 4.01 4.00 0.116 0.907 E-banking provides modern looking equipment. 4.06 3.79 3.155 0.001**
Physical representation of service through plastic card, credit and debit card is easy.
3.96 4.08 -1.391 0.082
E-banking provides 24 hours, 365 days a year service to customers.
4.05 3.93 1.252 0.894
It helps in reducing the no. of queues in the bank branches.
3.90 3.77 1.414 0.920
E-banking provides more physical facilities to the customers.
3.60 3.86 -2.931 0.001**
** p-value is significant at 0.05 level
159
As regards the tangibility dimension, the results indicated that in two out of six
statements both sector banks are statistically different. These two statements are
‘modern looking equipment’ and ‘more physical facilities’ to customers with 4.06 and
3.60 mean score of public and 3.79 and 3.86 of private sector. But public sector banks
are providing more modern looking equipment to its customers whereas private sector
banks are providing more physical facilities to customers. Other statements comprising
of ‘physical representation of service through plastic card, credit and debit card’,
‘reduction in the number of queues’, ‘e-banking provides 24 hours, 365 days service to
customers’ with mean score of 3.96, 3.90, 4.05 of public sector and 4.08, 3.77 and 3.93
of private sector banks in which out of three, in two services public sector banks are
having high mean score.
Factor 9
Understanding
Table 5.46
Sector-wise Analysis of Customers’ Perception Regarding Understanding
Dimension
Statements Public Private t-value p-value
It provides individualized attention to the customers.
3.68 3.64 0.432 0.666
It provides necessary information to the customers.
3.78 3.77 0.114 0.909
Website of the bank is designed according to the need of the customer.
3.83 3.78 0.544 0.706
It ensures to provide necessary information to the customer.
3.82 3.78 0.451 0.652
E-banking learns the specific requirement of the customer.
3.68 3.58 1.043 0.297
It helps in better customer relationship, attracting and retaining them
2.35 3.87 -17.944 0.000**
** p-value is significant at 0.05 level
As far as the understanding dimension is concerned, private sector banks are
having low mean score than the public sector customers. For this the bank manager has
to ensure that the employees are properly trained so that they provide individualized
attention to customers to make e-banking services more to customers friendly and they
should also make efforts that customers feel safe and secure with their e-banking
transactions with the bank. Further website of the bank should be designed according to
the need of the customers.
160
The statistical difference in e-banking quality existed in following statements that related
to:
• Online purchase of goods and services including online payment is easier
(p=0.007)
• It reduces the waiting time to receive the service (p=0.000)
• It assures the customer that problem will be handled (p=0.000)
• E-banking provides effective medium of promotion of various schemes
• It increases the believability, honesty and trustworthiness of the customers in
banks (p=0.003)
• It ensures the ability to fulfill the requirement (p=0.000)
• Degree of reliability involved in interaction with customer is more in e- banking
(p=0.002)
• It provides unlimited network to the banks to approach customers. (p=0.000)
• It improves the quality of customer service (p=0.008)
• Availability of service is faster in e-banking as compare to manual banking.
(p=0.000)
• E-banking provides modern looking equipment (p=0.001)
• E-banking provides more physical facilities to the customers (p=0.001)
• It helps in better customer relationship, attracting and retaining them (p=0.000)
So there are twelve statements in which there is a difference in the quality of e-
banking services in public and private sector banks.
5.11.3 Comparative Analysis of E-banking Services in Public and Private Sector
Banks
A Comparative analysis of services has been done to examine the level of e-
banking services offered in public and private sector banks. The factors taken into
consideration provide a wide platform to the banking industry to consider the various
factors for the awareness, operational problems and satisfaction level of e-banking
services among the respondents in public and private sector banks.
161
Table 5.47
Awareness Among Customers About New Products And Services
Group 1
Private
Group 2
Public Total
Advertisement
70 (35)
55 (27.36)
125
Manager
27 (13.5)
49 (24.37)
76
Website
31 (15.5)
34 (16.91)
65
25 (12.5)
27 (13.42)
52
Other Customer
32 (16)
30 (14.92)
62
Mobile banking
15 (7.5)
5 (2.48)
20
Total
200
200
400
Table 5.47 reveals that 70 (35 per cent) respondents of private sector and 55 (27
per cent) of public sector came to know about e-banking through advertisement, 27 (13.5
per cent) of private and 49(24 per cent) of public came to know through manager,
through websites 31(15.5 per cent) in private and 34(16.9 per cent) in public sector. So
the knowledge about e-banking services is highest through the advertisement of banks
and lowest through the mobile banking services in both public sector and private sector
banks. The knowledge through managers, websites, email and other customers comprises
a very small proportion.
Table 5.48
Operational Problems in the Use of Modern Technology
Private Public Total
Server Down
7 (3.5)
25 (12.43)
32
Untrained Personnel
17 (8.5)
18 (8.95)
35
ATM not Working Properly 39
(19.5) 37
(18.40) 76
Deposit of Cash
22 (11)
27 (13.43)
49
Ignorance
25 (12.5)
16 (7.96)
41
Not Attending Phone Call
17 (8.5)
16 (7.96)
33
Location
19 (9.5)
25 (12.43)
44
162
Availability of Currency
25 (12.5)
21 (10.44)
46
Risk of Loss of Currency
22 (11)
8 (3.98)
30
Delay in Services
7 (3.5)
7 (3.48)
14
Total 200 200 400 As regard the nature of problem is concerned, in private sector 3.5 percent
encountered it due to server down, 8.5 percent due to untrained personnel, 19.5 due to
ATM working, 25 percent for the ignorance of customer themselves, 25 percent for
availability of cash and 7 percent due to delay of services. However in the public sector
the situation is slightly different, here the customers encounters the problem due server
down (12.43 percent), ATM not working properly (18.40 percent), location of onsite and
offsite ATM (12.43 percent).The results showed that the respondents who had encounter
problem with the bank had filed the complaint against their banks. To conclude, once the
problem exists no matter how it is resolved it will influence the customer switching to
another bank.
Table 5.49
Problems in E-banking Services
Private Public Total
Yes
127 (63.5)
104 (51.74)
231
No
73 (36.5)
96 (47.76)
169
Total 200 200 400
Table 5.49 shows that in private sector 127 (63.5 per cent) and 104 (51.4 per
cent) in public sector encounters problems in using e-banking services. Further 96(47.76
per cent) in public sector and 73(36.5 per cent) in private sector are having no problem in
rendering the services. This shows that the problems in private sector banks are high
comparative to public sector services.
Table 5.50
Filing of Complaint
Private Public Total
Yes
64 (32)
90 (44.77)
154
No
136 (68)
110 (54.72)
246
Total 200 200 400
163
Table 5.50 shows that 64 (32 per cent) in private and 90(44 per cent) in public
sector lodged a complaint. Whereas 136(68 per cent) in private and 110(54.72 per cent)
in public sector has not raised their complaint regarding their services.
Table 5.51
Satisfaction Level of Customers’ Regarding E-banking Services
Public Private t-value p-value
Internet Banking Services 3.68 3.81 -1.358 0.175
Mobile Banking Services 3.37 3.34 0.313 0.754
Phone Banking Services 3.31 3.35 -0.428 0.668
Home Banking Services 3.35 3.19 1.485 0.138
ATM Facility 3.91 3.72 1.675 0.094
Credit Card Facility 3.78 3.51 2.747 0.006**
Debit Card Facility 3.79 3.83 -0.434 0.664
Electronic Fund Transfer 3.69 3.59 0.997 0.319
Bill Payment Service 3.59 3.22 3.545 0.000**
Inter-Connectivityof ATM’s 3.85 3.18 7.959 0.000**
Request Facility 3.85 3.18 7.634 0.000**
Information of New Products
and Services
3.43 3.50 -0.696 0.486
**p-value is significant at 0.01 level
Table 5.51 indicated that there is a significant difference in the customers’
opinion regarding different e-banking services. Although both sectors are providing good
services to their customers but out of 11 services, statistical difference was found in four
e-banking services that were in ‘credit card facility’, ‘bill payment services’, ‘inter-
connectivity of ATM’s’ and ‘request facility’. In all these four services mean scores of
public sector banks are high. However internet banking, phone banking and debit card
services of private sector banks are good with mean scores of 3.81, 3.35 and 3.83.
However it should be noted that the services are either average or good but not very
good. So both the banks should improve internet, phone, mobile, ATM, EFT, credit and
debit cards services to improve the overall quality of e-banking.
To deliver better quality services to the customers, it is required that services
must be standardized and for standardizing the quality of a service, the delivery of the
164
service must be substituted with machines wherever possible. The conceptualization of
SERVQUAL instrument provided immense help in determining the level of service
quality and the expectation of customers from the banking Industry. With the help
model, banks can focus more upon delivering qualitative electronic banking services to
the customers The dimensions of service quality provided a close view regarding the e-
banking impact on service quality. A comparative analysis of both sectors shows that
there exists a significant gap in providing the services. A closer scrutiny of the results
shows that reliability, credibility, communication and access are significant predictors of
customer satisfaction in private sector banks. However security, understanding,
tangibility, competence and responsiveness are significant predictors of customers
satisfaction in public sector banks. For the greater adoption of e-banking among
customers, firstly its on the part of the banks to assure that whether they are providing
qualitative and timely e-banking services to their customers only than the level of
satisfaction can be raised. Both the banks should work in a competitive spirit with each
other to further improve the level of services.