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CHAPTER VII
CONCLUSION
7.1 INTRODUCTION
The concluding chapter presents a summary of the research work
undertaken. A comprehensive narration of context of the research, the problem,
and the research question is provided. Descriptions of how the research was
constructed and operationalized are also presented. A summary of the findings
and its implications are also provided. This chapter also includes the specific
contribution of the study to both knowledge and practice. The limitations of the
study are explained and the direction in which the research can be extended is set
7.2 SUMMARY OF THE RESEARCH
The-banking scenario in India is at cross roads and is continuously
evolving. The progress has been remarkable over the decade with the level of
competition increasing in the banking industry. In the recent years, the concept of
“business process reengineering” has entered the banking industry. Process
management offers organizations the opportunity to outperform competitors and
take market share away from competitors.
The modern banking is transforming the-banking and financial industry in
terms of the nature of core products /services and the way these are packaged,
proposed, delivered and consumed. Banks are turning to IT to improve business
efficiency, service quality and attract new customers. Technology such as
automated teller machine (ATM), phone- banking, tele-banking, PC-banking and
most recently Internet banking have changed the way the banks provide service.
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There is a growing interest in understanding the users’ experience as
modern banking is observed to be a larger concept than user satisfaction. Today
public sector and private sector banks are offering similar products and services.
The process of bank computerization was started since 1985 in public sector
banks in India. However, some private sector banks have started computerization
prior to the public sector banks in India. The banks in India are using ICT not only
to improve their own internal processes but also to increase facilities and services
to their customers.
BPR began as a private sector technique to help organizations
fundamentally rethink how they do their work in order to dramatically improve
customer service, cut operational costs, and become world-class competitors. The
force of deregulation, globalization and advancing technology have paved the way
for the growth of banking industry. In this new era banking, companies are
focusing on managing customer relationships in order to efficiently maximize
revenues. Now all banks are captivating customers through innovation.
The customers’ choice and awareness have been increasing tremendously
during this decade mainly due to the opening up of the economy, the advent of
information technology and the media revolution. As market becomes
increasingly competitive, customers have an option to choose what they want.
Customers have an option to switch banks and banks are forced to work hard on
retaining customers. The pressure is that with too many banks competing,
retaining as well as gaining new customers has become important.
Due to competition within the banking sector and the use of Information
Technology within the banks and at the customer end, BPR has led to redesigning
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the strategy in delivering quality services. However there is need to understand if
these radical changes provide the customer need. These issues raise the question
whether BPR, aimed at customer service, has really created customer satisfaction
and that leads to the following research question.
“Will modern banking facilities enabled by Business Process Re-
engineering influence the customer satisfaction among the Small Enterprises?”
Based on the research question, the research objectives are framed.
The study is focused on the small and medium enterprises of Coimbatore
city, known as the ‘Manchester of South India’, which has many textiles and
engineering industries. Coimbatore is prominent on the map of world’s
automobile industries producing ancillary parts for the manufacture of
automobiles. These industries are highly supported by the financial institutions.
Studies on BPR in banks to determine the improvement in the competitive
measures of cost management, customer service, quality and productivity are
found in the literatures (Ratinder, 2011; Adeyemi and Aremu, 2008; Chopra,
2006).
Study on e-banking initiatives in Indian public sector banks show that the
growth of productivity indicators of reengineered banking process is higher than
that of the partially computerized banks and banks following traditional mode of
operation. (Saroj and Kundu 2011; Elisha 2010) The customer’s satisfaction about
various modern-banking services is also found in the extant of literatures
(Malarvizhi.2011; Bhattacharjee 2011; Abdullah and Rozario, 2009). Studies on
comparison of public and private banks are done by Hugar and Vaz 2008; Mishra
and Jain 2007 and Uppal 2006. Satisfaction studies mostly analyze the service
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quality and use the SERVQUAL and SERVPERF scales (Vanniarajan and Nathan
2008; Khan 2007; Akter and Ghosh 2006; Saha and Zhao 2005)
The study also analyzes the perception of bank customers with respect to
traditional and modern banking. It also embraces service quality analysis to know
the customers’ satisfaction level. This analysis is based on primary data collected
through questionnaire from corporate customers. Supporting literatures in this
connection has been reviewed and a set of hypotheses framed. To test the
hypotheses, bias free data were gathered and analyzed using statistical tools. The
study area is limited to Coimbatore city. In addition, the sample framework is
chosen from the member database of CODISSIA. 1000 samples were selected
randomly. A mixed and multi mode contact was made to collect the data using a
questionnaire. A total of 540 responses were received. On screening the
responses, 33 were found incomplete and/or missing responses. Finally, only 507
valid responses were available for the further data analysis. The collected data
were first coded. The coded data were entered into a spreadsheet and properly
sorted, classified and edited. The incorrect information and missing data were
analyzed and removed if found unusable. First, the descriptive analysis was done
to calculate the frequency distribution and measure the central tendency. Then the
validity was measured using factor analysis and its reliability through Cronbach’s
alpha. Further for inferential statistics, paired t-test, regression analysis and cross
tabulation with chi square test have been done.
Indian banking industry is distinctively recognized as public sector and
private sector. Despite private banks being ahead in technology, many customers
still prefer to have their accounts in the public banks because of security reasons.
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Intense competition between banks and huge difference in the service has led to
customer switching their accounts form one bank to the other. As many as 91% of
the firms have switched banks and some firms have even switched banks more
than once.
Switching banks has become an increasingly common practice nowadays.
The reasons for this are plenty. The role of relationship between individuals and
their banks determine bank-switching behavior. The reason for changing the bank
is cited as the length of the relationship with the bank and the distance. In this
study, when choosing the bank, customers cite that the debit card facility as one of
the main reasons. Similarly, loan facility, quick service, flexibility and advanced
technology are some of the reasons for choosing a bank. Among the facilities
enjoyed in the traditional banking, the customers feel that they experienced a
personalized service. Over-draft was also cited as a facility frequently enjoyed in
traditional banking because of personal influence. However, availing various
loans and the speedy transaction were not satisfactory.
The perception on various banking features have been compared between
traditional and modern banking and the other between public and private sector
banks. To analyze the significance of the difference between the perception of
customers towards traditional and modern banking processes, after cross
tabulation a paired t-test was done. The results show that except employee
courteousness, willingness to help, all the other features were significantly
different between traditional and modern banking.
Different processes of the banking transactions were listed and tested for
the perception of the customer. An exploratory factor analysis identified three
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factors such as procedural quality, transaction quality and customer care. Similar,
factor loading is observed in traditional and modern banking.
The satisfaction of the customers on the fifteen products of modern
banking are measured. The results show that many customers are almost satisfied
with all the modern banking products.
The impact of modern banking facilities enabled by BPR on the
customer’s satisfaction among small enterprises was analyzed using the regression
analysis. The results show that customer care has the maximum impact on the
satisfaction of the customers, followed by transactional quality and procedural
quality. All factors were found to be positive and significant. The model
predictability is high for public sector banks, but the procedural quality was found
insignificant. However, for the private sector banks, all the factors were found to
significantly influence satisfaction.
The impact of modern banking features on the level of satisfaction of the
customers was analyzed for various control groups. In both, public and private
sector banks, customer care was the prominent factor that led to satisfaction level.
Transaction quality and procedural quality were found to influence satisfaction in
their respective order. However, all these factors were found to explain
satisfaction more in public banks than private banks. Among the nature of
business, the findings are more explanatory for traders than for those in
manufacturing and services. Again, customer care is the most prominent predictor
of customer satisfaction. However, for traders and services, the procedural quality
is found to be insignificant. The model is found more suitable for partnership
firms than proprietorship and private limited firms. However, the procedural
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quality is found to be insignificant for all types of organizational ownership. On
the size of the organization, the model is found to explain more of the medium
sized firms’ satisfaction influenced by the BPR enabled features of the bank. In
addition, the procedural quality was found to be insignificant for small firms.
The satisfactions of the customers who have switched bank at least twice
are found more fitting for the model. On the length of years with the bank, the
model is found to explain more about the customers who are with the bank
between 6 and 10 years. Interestingly, for customers with the same bank for more
than 11 years, the procedural quality is found to be negative and insignificant, and
transaction quality was insignificant. Considering the area of operation the model
was found to explain customers having international operations. However, in all
cases procedural quality was found insignificant.
The demographic characteristics of the customers and their influence on
the reason to change a bank or choose a bank were tested. The results show that
except for the area of operation, years with the bank, nature of business, other
demographic characteristics did not have any influence on reasons for changing or
choosing a bank. The nature of business is seen to be related only to the poor
service quality.
This study provides theoretical and practical implications for bank
managers, policy makers and academicians. From the research the study
implicates that the conceptual service quality dimensions can be analytically
understood based on the context of the study (Impact of Business process
Reengineering) as procedural quality, transactional quality and customer care. On
the influence of the service factors on the level of customer satisfaction, customer
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care was found to be an important factor in customer satisfaction in modern
banking. Transactional quality had a positive but low impact on the customer
satisfaction. However, procedural quality was found to be insignificant in public
banks.
The extant of literatures compares the service quality in public and private
sector banks or between traditional and modern banking. This study makes a three
dimensional comparison. Though a significant difference was found between
traditional and modern banking features, employee courteousness and willingness
to help were found not to vary. The study reiterates that the procedural quality,
which provides a functional quality, is less influential on the satisfaction. On the
other hand, the transactional quality of the service counter has an influence on the
customer’s satisfaction. Above all, customer care is an important factor in
customer care and the stakeholders need to create a strategy focused on customer
care to elevate the satisfaction.
The outcome of the study provides the following recommendations. The
banks are investing in IT and introducing BPR to increase the technology and the
operational efficiency. The satisfaction of the customer lies in the humane
interaction and care. Banks will require having a Customer Service Committee to
improve and recover the service failure. Customer orientation culture needs to be
imparted in the service of the banks. Human element performs an important role
in perceived service quality as well as satisfaction. Employee courteousness and
willingness to help have been found to be unchanged in traditional and modern
banking, and this needs to be continued with proper training to employees.
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Fear in use of technology in sensitive areas like fund transfer are still
existing in customers which produces a lower satisfaction in these service factors.
Proper awareness and demonstration to create trust in the-banking process need to
be provided to the customer. Customer loyalty programs, special events and
reward schemes can reduce the switching intention when a customer has been
with the bank for many years.
7.3 RESEARCH CONTRIBUTION
This study contributes towards the body of knowledge to address the
issues as identified in the knowledge gap. It contributes towards theoretical as
well as practical fronts.
7.3.1 CONTRIBUTION TO KNOWLEDGE
This study contributes to the knowledge on the impact of service quality of
the features enabled by BPR on the satisfaction of the customer. The outcome of
the study is a predictable model for customer satisfaction on service quality.
This study contributes to the analytical knowledge on the dimensions of
service quality. Contrast to the popular service quality models such as
SERVQUAL, this study has identified the service quality of BPR enabled process
as customer care, transactional quality and procedural quality.
The findings of this study highlight that the technical quality embedded in
the procedural quality has a low impact on customer satisfaction and is
insignificant in certain cases. This reiterates that the process supported by
technology becomes a commodity over a time and loses competitive advantage.
Therefore, banks need to focus on areas of customer encounter like transactional
quality and customer care.
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This study contributes to understand the difference between the traditional
banks and modern banks and how the features of modern banks produce customer
satisfaction. It also compares the service quality and customer satisfaction in
public sector banks and private sector banks.
7.3.2 CONTRIBUTION TO PRACTICE
This research is of significant importance for bank managers. Based on the
obtained results one can identify the areas that need immediate attention and make
suggestions for further improvement.
The study contributes towards understanding the customer’s perception on
various features of modern banking enabled by BPR. It highlights the need for
focus on human element in a technology-enabled services and BPR should be
targeted on areas of customer interaction.
The study helps banks to understand the importance of customer care and
to device suitable strategy like training the employees in customer service
encounters and reiterates the need for service recovery for higher satisfaction.
The study also throws light on transactional quality and the need for
quicker, safer and easier transactions. The major contribution of this study is that
the understanding of the service quality and the customer’s intention will help the
banks to design switching barriers, so that customers do not deflect. Reward
scheme, special events will increase the customer loyalty and that needs to be
focused on the customers who have been with the bank for many years.
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7.4 LIMITATIONS
A number of factors have limited the analysis of this study. Accordingly,
all measures have been taken within the study to restrict any cause that may result
in bias due to the limiting factors. The following limitations of this research work
are worth mentioning
This study is not made for a specific bank. The study covers a sample of
banks and does not include all the banks in Coimbatore.
One important limitation of this study lies in the fact that the data were
collected in a single urban city, Coimbatore. Hence the results generated from the
study may or may not be applied to other areas. This creates a limitation in
generalization of the research implications.
The survey method in small enterprises has inherent low response rate.
This limitation refers to people’s reluctance and refusal to answer the the
questionnaire. In such situations and time constraint, it is impossible to get the
required sample size. The sample has been restricted to 507 small enterprises from
selected Commercial Banks in Coimbatore.
The framework in this study was developed from the extant of literature
that were accessible. In addition, the framework was limited to understanding the
level of satisfaction in the modern banking products and facilities and how it is
influenced by the service quality of the features of modern banking. There may be
some other predictors of customer satisfaction that was perceived by bank
customers. This study did not consider them.
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7.5 FUTURE AREAS OF COMPREHENSIVE RESEARCH
Primarily, the study needs to be extended to a larger geographical area.
Replication study in various places can be done and compared with each other.
This will improve the predictability and generality of the study results.
The results of this study are based on consumers’ perceptions on the
service aspects of banking features enabled by BPR. Future research should
investigate the congruence between consumers’ employees and the senior
management of the bank. This will help the industry to understand the service
quality from the service triangle perspective and help the banks in designing an
overall strategy involving, customers and employees.
Concerning future investigations, further research must be conducted in
order to explore the difference between micro, small and medium sized
enterprises. The study can also be extended to study the similar perception in
savings account of individuals since banks have a combination of retail and
corporate accounts.
Further, researchers should also consider taking a broader view towards
identifying the components of service quality and identifying them in the other
frameworks like SERVQUAL and SERVPERF. Future studies can also consider
external components like customer expectation to identify the gap in service and
the internal components like employee satisfaction.
The impact of service quality of banks of customer satisfaction have been
studied in various context like, traditional, modern banking, public , private sector
banking, Internet and mobile-banking etc. However, the factors considered for the
study explains only a part of the variations in the customer satisfaction. For
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example, this study explains only around 30% of the outcome. Future research
may attempt to explore the “unexplored” constructs
7.6 CHAPTER SUMMARY
This chapter has provided a summary of the research work. The
contributions of the study to knowledge and practice have been discussed. The
limitations and future directions for research are also provided.
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