preference level of banking customers on … · preference level of banking customers on...

SAMZODHANA SAMZODHANA SAMZODHANA SAMZODHANA –––– “Journal of Management Research”“Journal of Management Research”“Journal of Management Research”“Journal of Management Research”

Vol 2Vol 2Vol 2Vol 2,,,, Issue 1Issue 1Issue 1Issue 1 March 2014March 2014March 2014March 2014

www.eecmbajournal.inwww.eecmbajournal.inwww.eecmbajournal.inwww.eecmbajournal.in

246

PREFERENCE LEVEL OF BANKING CUSTOMERS ON TRANSACTION

CHANNELS AND QUALITY OF SERVICE TO BE PROVIDED

Dr.A.K.Sheik Manzoor, Assistant Professor

Department of Management Studies, Anna University, Chennai

Abstract

The bank is a medium of money transactions. Where ever the money plays a role the role of bank

is very must. The transactions are taken place through different channels. The channels are

preferred on certain attributes of the transactions. This paper deals with the preference level on

the channel of transaction with respect to attitudes of transaction and with respect to various

services. The preference level on the quality of services to be provided is also studied. It is found

that the CHEQUE operation and ATM are predominantly preferable than internet banking and

mobile banking. Immediate attention is more preferable quality of service to be offered to the

banking customers.

Keywords: Banking, quality of services, channel of transaction, internet banking.

Introduction

The Banking sector in India has always been one of the most preferred avenues of employment.

In the current decade, this has emerged as a resurgent sector in the Indian economy. The banking

sector index has grown at a compounded annual rate of over 51 per cent since the year 2001, as

compared to a 27 per cent growth in the market index during the same period. It is projected that

the sector has the potential to account for over 7.7 per cent of GDP with over Rs.7,500 billion in

market cap, and to provide over 1.5 million jobs. Today, banks have diversified their activities and

are getting into new products and services that include opportunities in credit cards, customer

finance, wealth management, life and general insurance, investment banking, mutual funds,

pension fund regulation, stock broking services, custodian services, private equity, etc. Further,

most of the leading Indian banks are going global, setting up offices in foreign countries, by

themselves or through subsidiaries. This study is restricted to the customers with in Chennai city.

The study will be able to reveal the preferences level of transaction channels, needs, satisfaction




247

of the customers regarding the banking services, It also help banks to know whether the existing

products or services they are offering are really satisfying the customers ‘ needs.

Literature Review

Minna et al.(20031), examined financial customers regarding their usage of, and attitudes

towards, financial distribution channels. Kundu and Datta (20126).Among the various channels of

e-banking, Internet banking and mobile banking are considered to be the fastest developing

areas. In the dimensions to measure the satisfaction of the internet banking namely content,

accuracy, format, ease of use, timeliness, and safety, the safety need to be addressed by banks to

improve the user satisfaction(Rai-Fu Chen et al.(20123)) where as Ahmad jamal(2004

2) finds that

it might not be necessarily affect satisfaction levels when customers are using technology-based

self-services. Customers are being facilitated by reducing their visits in banks and they can

carryout their transactions via internet or ATM Machines instead of personally visiting the

branches (Omar(20114)). Serviceability and reliability that could influence internet banking

customer satisfaction (Ma, Z, (20125). The channel of transactions are used for The analysis

indicates that for services like shopping, fund transfer, utility bill payments, tax payments, and

balance enquiry Kundu and Datta (20126). Seranmadevi and Saravanaraj(20127) evaluates the

impact of information technology on the performance of Indian banks in terms of extended value

added services and customer satisfaction thereby. The objective of this paper is study the

preference level of customer on channel.

Research Design

This is a descriptive study tries to discover relationship between the preference level of

transaction channels on the various services and quality of services perceived among the various

age group people. Convenience sampling is used for the survey. A well-structured validated

questionnaire was personally administrated. 250 questionnaire was circulated in chennai.101

were responded.




248

Hypotheses to be tested

Ha: There is no significant association between age and the type of account holder.

Hb: There is no significant difference on the services received with reference to gender.

Hc: There is no significant difference on the mode of transaction with reference to the attitudes.

Hd: There is no significant difference on services with reference to the channel of transaction.

He: There is no significant difference among the quality of services to be provided by bankers

Data Analysis & Interpretation

Demographic details

It is interfere that 24.75% of the candidates are less than 25 years old ,22.77% of the candidates

are in between 25 to 34 years old ,21.78% of the candidates are in between 34 to 44 years ,

21.78% of the candidates are in between 45 to 54 years old and 8.91% of the candidates are

greater than 55 years old. 51.49% of the candidates are male and 48.51% of the candidates are

female. 67.33% of the respondents are having saving bank account ,16.83% people are having

current account,8.91% people are NRI account and 6.93% candidates are having fixed account.

95.05% people has cheque facility , 89.11% people has been opting ATM facility for their

transactions, 27.72% respondents are using facility and 26.73% respondents are using mobile

banking facility.

Hypothesis

Ha: There is no significant association between age and the type of account holder.

Table 1. Age and Type of Account

AGE Type of Account Total Chi- p-value

Square

Saving Current Fixed

Account Account Account NRI value

<25 15 3 3 4 25 11.245 .508

25-34 16 6 0 1 23




249

35-44 15 2 3 2 22

45-54 16 4 0 2 22

>55 6 2 1 0 9

Total 68 17 7 9 101

Hence the p-value is greater than 0.05 the null hypothesis is accepted. From the Table 1., It is

interfere that there is no significant association between age and the type of account holder. That

is the type of account the people hold is independent of the age group.

Hb: There is no significant difference on the services received with reference to gender.

Table 2. Rating of Quality of Service Provided Based On Gender

SNO Std.

Services GENDER N Mean Deviation t-value P-value

1 Immediate attention Male 52 4.48 .610 -.610

.543

Female 49 4.55 .542

2 Online service Male 52 4.12 .855 -.557

.579

Female 49 4.20 .735

3 Skill of employee Male 52 4.13 .793 .203

.840

Female 49 4.10 .823

4 Time taken for service Male 52 4.02 .828 -.624

.534

Female 49 4.12 .832




250

5 Quality of advice Male 52 3.96 .928 -1.200

.233

Female 49 4.16 .746

6 Product & service Male 52 4.08 .763

-.837 .405

details

Female 49 4.20 .763

7 Bank timing Male 52 4.33 .857 -.670

.504

Female 49 4.43 .645

8 Pamphlets Male 52 4.25 .711

-1.693 .094

Female 49 4.47 .581

Hence the p-values of all the services (SNo.1 to SNo.8 on Table 2.) is greater than 0.05 the

null hypothesis is accepted. It means that there is no significant difference on the services

received with reference to gender. That is the type of account the people hold is

independent of the age group.

Hc: There is no significant difference on the mode of transaction with reference to the

attitudes.

Table 3. Perception about the Channel of Transaction

Channel of Std.

Attitudes transaction N Mean Deviation F Sig.

Ease of usage ATM 101 4.28 b

1.031 30.202 .000

Cheque 101 4.47b

.843




251

Mobile banking 101 3.49a

.808

Internet banking 101 3.59 a

.874

Total 404 3.96 .985

Comfortability ATM 101 4.43 d

.792 50.741 .000

Cheque 101 4.50 d

.757

Mobile banking 101 3.43 c

.792

Internet banking 101 3.51 c

.890

Total 404 3.97 .947

Time saving ATM 101 4.45e

.842 33.983 .000

Cheque 101 3.88f

.886

Mobile banking 101 3.37g

.717

Internet banking 101 3.53g

.831

Total 404 3.81 .917

Security ATM 101 4.36h

.901 62.706 .000

Cheque 101 4.41 h

.885

Mobile banking 101 3.34i

.637

Internet banking 101 3.24 i

.764

Total 404 3.83 .971

a , b, c, d, e, f, g, h, I, and j -Means for groups in homogeneous subsets




252

Hence the p-value is less than 0.05 the null hypotheses is rejected at 1% significant level. It means

that there is significant difference on the channel of transaction (ATM, Cheque, Mobile Banking

and Internet banking) with reference to the attitudes(Ease of usage , comfort ability , timing and

security).

With respect to ‘Ease of Usage’, Cheque (4.47) and ATM (4.28) are represented by the

homogeneous group ‘b’ which significantly greater than the group ‘a’ (i.e) internet banking (3.59)

and mobile banking (3.49).It is perceived that the cheque and ATM is more easier to operate than

the internet banking and mobile banking.

With respect to ‘Comfortability’, Cheque (4.50) and ATM (4.43) are represented by the

homogeneous group ‘d’ which significantly greater than the group ‘c’ (i.e) internet banking (3.51)

and mobile banking (3.43).It is perceived that the cheque and ATM is more comfortable to

operate than the internet banking and mobile banking.

With respect to ‘Timing Saving’, ATM (4.45) is significantly (group ‘e’) greater than CHEQUE (3.88)

which represented by group ‘f’ which is significantly greater than group ‘g’. INTERNET BANKING

(3.53) and MOBILE BANKING (3,37) represented by group ‘g’. ATM is more TIME SAVING than

CHEQUE operation. Where as CHEQUE operation is more Time Saving than Internet Banking and

Mobile banking.

With respect to ‘SECURITY’, CHEQUE (4.41) and ATM (4.36) represented by group’h’ is

significantly greater than INTERNET BANKING (3.34) and MOBILE BANKING (3.24) represented by

group ‘i’.It is perceived that the cheque operation and ATM facility is more secure than internet

banking and mobile banking.

Hd: There is no significant difference on services with reference to the channel of transaction.

Table4. Preference of the transaction

SNo Channel of transaction Services N Mean Std. Dev. F Sig.

1 ATM Withdraw 101 3.97b 1.382 111.043 .000

Shopping 101 4.14b 1.371




253

Bill payments 101 1.77a 1.199

Insurance 101 1.57a 1.003

Money transfer 101 1.68a 1.232

Total 505 2.63 1.704

2 Cheque Withdraw 101 4.30e 1.237 39.296 .000

Shopping 101 2.39 c 1.536

Bill payments 101 3.65 d 1.268

Insurance 101 4.16e 1.046

Money transfer 101 4.22e 1.270

Total 505 3.74 1.463

3 Mobile Banking Withdraw 101 1.52f 1.083 1.402 .232

Shopping 101 1.79g 1.116

Bill payments 101 1.83g 1.141

Insurance 101 1.75g 1.144

Money transfer 101 1.60f 1.068

Total 505 1.70 1.113

4 Internet Banking Withdraw 101 1.45h .877 3.142 .014

Shopping 101 1.86hi

1.068

Bill payments 101 1.92i 1.155

Insurance 101 1.89i 1.207




254

Money transfer 101 1.82hi

1.187

Total

505 1.79 1.115

a, b, c, d, e, f, g- Means for groups in homogeneous subsets

a- Very few customers prefer ATM for the bill payment (1.77); insurance (1.57) and money

transfer (1.68).

b- Most of the customer prefer ATM for the shopping(4.14) and withdraw(3.97)

c- Rarely customer prefer CHEQUE for their shopping(2.39)

d- Very few customer prefer CHEQUE for their bill payment(3.65)

e- Most of the customer prefer CHEQUE for their withdraw(4.30), insurance(4.16), money

transfer(4.22).

f- Very few customer prefer mobile banking for their withdraw(1.52), and internet

banking(1.60).

g- Some Customer prefer mobile banking for their shopping(1.79); bill payment(1.83);

insurance(1.75).

h- Very few customer prefer internet banking for their withdraw(1.45); shopping(1.86);

money transfer(1.82).

i- Some customer prefer internet banking for their shopping(1.86); bill payment(1.92);

insurance(1.89); money transfer(1.82).

Hence the p-value of (SNo. 1and 2) is less than 0.01 the null hypotheses is rejected at 1%

significant level. It means that there is significant difference on the service (withdraw, shopping,

bill payment, insurance, money transfer) with reference to mode of transactions (ATM and

Cheque).

ATM is significantly more preferable for shopping (4.14) and withdraw (3.97) than bill payments

(1.77), money transfer (1.68) and insurance (1.57).

CHEQUE operation is significantly more preferable for withdraw (4.30), money transfer (4.22) and

insurance (4.16) which is represented by group. ‘e’ than bill payments represented by group ‘d’

where as cheque is more preferable for bill payment than Shopping is represented by group ‘c’.




255

Hence the p-value of (SNo. 4) is less than 0.05 the null hypotheses is rejected at 5% significant

level. It means that there is significant difference on the service (withdraw, shopping, bill

payment, insurance, money transfer) with reference to mode of transactions (Internet banking)

Hence mean value on the preference of internet banking for bill payment (1.92), insurance (1.89),

shopping (1.86) , Money transfer (1.82) and withdraw (1.45) is less than 2, people hardly prefer to

use the internet banking facility.

Hence the p-value of (SNo. 3) is greater than 0.05 the null hypotheses is accepted. It means that

there is no significant difference on the service ( withdraw, shopping, bill payment, insurance,

money transfer) with reference to mode of transactions Mobile Banking. From the Table 5 it is

infer that the mean value is less than 2 , people hardly prefer to avail mobile banking facility.

He: There is no significant difference among the quality of services to be provided by bankers

Table 5. Quality of Services to Be Provided By Bankers

Quality of services to be Std.

provided by BANKERS N Mean Deviation F Sig.

Immediate attention 101 4.51b .576 4.989 .000

Online Service 101 4.16a .797

Skill of employee 101 4.12a .804

Time taken for services 101 4.07a .828

Quality of advice 101 4.06a .846

Product & services details 101 4.14a .762

Bank timing 101 4.38ab

.760

Pamphlets 101 4.36ab

.657

Total 808 4.22 .772

a, b are Means for groups in homogeneous subsets




256

a- Customer where satisfied about the online service(4.16); skill of employee(4.12);

Time taken for services(4.07); quality of advice(4.06); product & services

details(4.14); bank timing(4.38); pamphlets(4.36). on services

b- Majority of customer where very satisfied about the Immediate

attention(4.51),Bank timing(4.38); Pamphlets(4.36) of services

Hence the p-value is less than 0.01 the null hypothesis is rejected at 1 % significant level. It

means that there is significant difference among the quality of services to be provided by

bankers. Bankers need to provide immediate attention to the customers which is the highest

priority in the banking services. Banking timing and pamphlets for information are the second

important quality of services to be focused to the customers.

Rest of the services namely online service (4.16), Product & services details (4.14), Skill of

employee (4.12) , Time taken for services (4.07) and Quality of advice (4.06) are also important

for the bank to offer the quality of service.

Findings

Bankers need to provide immediate attention to the customers which is the highest priority in

banking services. Based up on the data analysis customers prefer ATM for their transaction as it is

easy and don’t want to wait in banks for transaction process. To withdraw money from account

the customers prefer ATM. Majority of the customers prefer ATM for shopping purpose as it is

safety than holding cash in hand.

The bill payments are followed by cheque as it is safety to deposit to the account of the other

party. For money transfer cheque are mainly preferred. Majority of the customers prefer cheque

for their money transfer, insurance payment and for withdrawing money from the banks.

The young generation customer prefer mobile banking as it is easy and convent to them as the

use their mobile phones often. As mobile banking internet banking also used for transaction

purpose during emergency purpose like during strike and it is also used any time anywhere.




257

The banks need to provide necessary thinks required by the customers. The immediate attention

followed by time taken for service on online applicable by the users while quality of advice

displaced of products dealt /availability of application. Also office timing should be improved.

Suggestions

The bank must provide more safety to the customers who use mobile banking; internet banking;

because due to small error made by the customer there is chance for illegal transaction unknown

person may use the account of the customer. The transaction details of the customer must be

sent to the customers through phone messages. Illegal password is attempted even single time in

the transaction a message must be sent to the customer (account holder). Most of the Customer

where not aware of the mobile banking. The customer must be educated about the mobile

banking and internet banking. For their easier and convenient transaction. Proper guidance must

be given to the customer.

Conclusion

The research work focuses on the preference level on the channel of banking transactions. By

collecting the required data from the customers, The preference on the quality of services to be

provide to the banking customer is also studied.

References

1. Minna Mattila, Heikki Karjaluoto& Tapio Pento, Customer Channel Preferences in the

Finnish Banking Sector, Journal of Marketing Channels Volume 10, Issue 1,pages 41-64 ,

2003

2. AHMAD JAMAL, Retail Banking and Customer Behaviour: A Study of Self Concept,

Satisfaction and Technology Usage, Int. Rev. of Retail, Distribution and Consumer Research,

Vol. 14, No. 3, 357–379, July 2004

3. Rai-Fu Chen, Ju-Ling Hsiao and Hsin-Ginn Hwang, Measuring customer satisfaction of

Internet banking in Taiwan: scale development and validation,Total Quality Management

Vol. 23, No. 7, July 2012, 749 –767




258

4. Omar , A.B., Sultan, N., Zaman, K., Bibi, N. , Wajid, A., Khan, K., Customer perception

towards online banking services: Empirical evidence from Pakistan Journal of Internet

Banking and Commerce, Volume 16, Issue 2, August 2011

5. Ma, Z , Assessing serviceability and reliability to affect customer satisfaction of internet

banking, Journal of Software, Volume 7, Issue 7, Pages 1601-1608, 2012.

6. Kundu, S. , Datta, S.K. ,A comparative evaluation of customer perception and

satisfaction of M-banking and I-banking ,Journal of Transnational Management,

Volume 17, Issue 2, Pages 118-136,2012.

7. Seranmadevi, R., Saravanaraj, M.G., Technology@ Indian banking sector, European

Journal of Social Sciences, Volume 29, Issue 4, Pages 472-488, March 2012.

preference level of banking customers on … · preference level of banking customers on...

Documents