34

CHAPTER-II

OBJECTIVES AND METHODOLOGY OF THE STUDY

The main objective of this chapter is to present the objectives, need and

significance of the study and explain the methodology followed in analyzing

Customer satisfaction towards E-Banking services and products in commercial

banks with special reference to SBI and ICICI banks in Chennai. It also

presents the Survey of literature on the E-Banking services for identifying the

research gap.

II.1 STATEMENT OF THE PROBLEM

The Banks (Public and Private) have been facing fierce competition due to

the entry of foreign banks. The application or use of technology for the

qualitative transformation in the process of banking service is necessary and

quite natural, since the market is competitive and the customers are receptive.

Consumerism has taken a new shape. The needs and requirements of the

customers are developing and expanding very fast. In this complex and fast

changing environment, the only sustainable competitive advantage for banks

(Both public and private sector) is to give the customer an optimum blend of

technology and traditional services. Hence meeting the competition and the

customer requirements are the priorities of both public and private sector

banks.

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II.2 OBJECTIVES OF THE STUDY

1. To study the nature, growth and extent of I.T. based products and

services in the selected banks.

2. to analyse the customer preferences and satisfaction levels towards

various Information Technology based products and services of SBI

and ICICI banks;

3. to make a comparative study between SBI and ICICI banks on customer

satisfaction towards selected I.T. based products and services.

4. to analyse the demographic/ socio economic factors influencing the

customer level of satisfaction towards I.T. based products and services;

5. to examine the gaps for the various security measures in respect of the

marketing of various I.T. products by commercial banks; and finally,

6. to offer suitable suggestions for the Policy makers and Bankers.

HYPOTHESIS

1. Customer satisfaction does not defer on the basis of computerized

services, core banking services, ATM services, internet banking services

and mobile / SMS services.

2. There is no significant difference between SBI and ICICI banks with

respect to customer satisfaction towards I.T. based services.

3. The demographic variables (age, occupation, sex, income level,

educational qualification and type of accounts) have not influenced the

customer satisfaction towards I.T.based products and services.

36

II.2 BANKS CHOSEN FOR THE STUDY

The study has been carried out on the customers satisfaction towards

Information Technology based products and services of SBI and ICICI banks,

the largest and leading banks in public sector and private sector representing in

India.

II.3 STATE BANK OF INDIA

State Bank of India is the largest public sector bank in India in terms

of profits, assets, deposits, branches and employees. The origin of the State

Bank of India began with the establishment of Bank of Calcutta on 2nd June

1806, later it was called as Bank of Bengal, when it was registered during the

year January 27, 1809, after 3 years of its inception. It was privileged as the

first ever joint stock bank of the British India under the sponsorship of the

Government of Bengal.

After a long gap, on 25th April 1840, Bank of Bombay and on 1st

1843, Bank of Madras were established. These three banks dominated the

Indian financial market, until they were amalgamated to form the imperial

Bank of India on 27th January 1921. In 1956 the Reserve Bank of India, based

on the recommendations of All India rural credit survey committee, an Act was

passed in the Parliament of India in May 1955. As a result, the State Bank of

India was established on 1st July 1955. Later on, the State Bank of India

(subsidiary banks) Act was passed in 1959. The Act enabled the State Bank of

India to make the eight former State-associated banks as subsidiaries.

The total assets of the bank reaches 323.0 billion in US $ by 2010

with the equity of 19 billion in US $ during the same year. The organization

has earned a revenue of Rs.1,33,851 crore (US $ 29.71 billion) during the year

2010. The profit of the organization reaches Rs.11,733 crore or 2.6 billion in

US $ during the year 2010 with the 2,00,299 employees in the organization.

37

The corporate centre of State Bank of India is located in Mumbai.

The bank has as many as 14 local head offices and 57 zonal offices located at

major cities throughout India. It is recorded that State Bank of India has about

13,500 branches, well net worked to cater that the needs of their customers. In

Chennai alone it has around 106 branches at different places of the city. It

provides easy access to money to its customers through more than 12244

ATMs in India, (SBI 2010). The Bank also facilitates the free transaction of

money at the ATM of State Bank group, which includes State Bank of India as

well as the associate banks, (SBI 2010).

II.4. ICICI (Industrial Credit and Investment Corporation of India) Bank

The Industrial Credit Investment Corporation of India Limited was

incorporated during 1955 at the initiative of World Bank, the Government of

India and representatives of Indian industry. The objective of ICICI bank was

mainly creating a developed financial institution for providing medium and

long term project for financing Indian businesses. In 1994, ICICI established a

banking corporation as a banking subsidiary. Later, it was renamed as ICICI

Bank Ltd. and found a separate legal entity. It has undertaken normal banking

operation, as taking deposits, credit cards, car loans, etc.

In 2001, ICICI acquired Bank of Madura (established in 1943). In

2002, some reforms took place through the merger of ICICI, ICICI personal

financial services Limited and ICICI Capital Services Limited into ICICI Bank

after adopting legal and regulatory formalities and approvals. In addition, ICICI

Bank bought Shimla and Darjeeling branches of Standard Charted Banks. The

bank is expanding in overseas markets by having their subsidiaries in various

countries.

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ICICI banks equity shares listed in India on Bombay Stock Exchange

and the National Stock Exchange of India Ltd. and its American Depository

Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). It is a

major banking and financial services organization in India. It is the largest

private sector bank in India by market capitalization and the second largest

overall in terms of assets. Bank has the total assets of 108.7 billion U.S $ at

March 30th 2010.

The bank has received an operating income of Rs.6578.64 crore (US

$ 46 billion) during the year 2010 and profit earned for the same year ended

after tax is 1.08 US $. The headquarters of ICICI bank in India is located in

Mumbai. The bank has around 60 branches in Chennai city with 74056

employees all over India. The bank also has a network of 2016 branches (as on

31st March 2010) and about 5219 ATMs in India and in Chennai city there are

around sixty branches, (ICICI 2010)

Both State Bank of India and ICICI offer a wide range of banking

products and financial services to corporate and retail customers through a

variety of delivery channels in the areas of personal banking, NRI banking and

corporate banking. In order to optimize the advantage of reforms to

profitability and to sustain customer satisfaction, both the banks (SBI and

ICICI) understood the significance to improve the quality of products and

services to meet the emerging needs of customers, not only to the present, but

also to the potential consumer demands. Hence the use of technology becomes

essential as an effective support input to provide services which are now

becoming information intensive and for quick and efficient services.

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II.5 RESEARCH METHODOLOGY

The methodology of the study is based on the primary data collected

through well-framed and structured questionnaires to elicit the well-considered

opinions of both SBI and ICICI bank customers who operate different type of

accounts. Simple Random Sampling method has been used to collect the

responses from the bank customers. The study has been conducted in two

stages, with a preliminary pilot study followed by the main study.

Study Area and Period

The study has been conducted among the customers of State Bank of

India and ICICI bank having their branches in Chennai city. The pilot study is

conducted during the period 1st July to 31st July 2012 while the main study was

conducted during the period 15th August to 31st October 2012.

Sampling Technique

The personal judgment method is employed for the selection of

banks, where two banks are chosen for the study. Each of the SBI and ICICI

banks has different number of branches in Chennai City. Therefore, care was

taken to ensure selection of customers from each bank in a fairly proportionate

manner. Simple Random Sampling method has been used to select the

respondents from the bank customers. The study has been conducted in two

stages, with a preliminary pilot study followed by the main study.

40

Pilot Study

Questionnaire to Bank Customers

The pilot study is completed with the distribution of the

questionnaire to 50 customers belonging to different branches of SBI and ICICI

bank. The responses from the customers to the statements in the questionnaire

exhibited Cron-bach alpha value 0.901, and hence it is statistically significant

to identify the bank customers’ perceptions on the selected technological

banking services. The pilot study indicated that the customers are finding a few

technical natured questions, difficult to comprehend and give their responses to

them. Hence, these questions are removed to prepare a fully refined

questionnaire for the main study.

Sampling Procedure

There are a total 98 number of branches existing for both SBI and ICICI

banks in Chennai city during the study period. Out of the 98 branches 53

branches are from the SBI and the remaining 45 branches belong to the ICICI.

1/3 of the total branches are taken in to the consideration for the study with

help of Simple random sampling method.

TABLE 2.1 TABLE REVEALS SAMPLING PROCEDURE

BANKS

TOTAL BRANCHES EXISTING IN

CHENNAI CITY DURING THE

STUDY PERIOD

BRANCHES TAKEN INTO

CONSIDERATION FOR THE STUDY

No. OF CUTOMERS AVIALING E- BANIKG

SERVICES FROM THE BRANCHES

CONSIDERED FOR THE STUDY

SBI

53

17

29,567

ICICI

45

17 30,331

TOTAL

98

34

59,898

41

Table 2.1reveals that total numbers of 59,898 customers are availing E-

banking services from the branches of both SBI and ICICI banks considered for

the Study. Based on the Pilot study results 600 questionnaires were prepared.

This figure represents 1% of the total universe.

In the second stage the 600 questionnaires were equally distributed to

the customers of SBI and ICICI bank. The number of responses collected after

consistent follow up was 575. The remaining 25 customers failed to return their

filled in questionnaires. Out of these 575, only 546 are found to be totally in

order, suitable for data analysis work. Out of 546 questionnaires, 267 responses

are obtained from SBI and remaining 279 from ICICI bank. Therefore, the

exact sample size for this study collected through the questionnaire is 546.

Questionnaire design and scale development

After completing the review of literature related to the study,

questionnaires has been drafted to bank customers on the selected technology-

driven services soliciting their responses in three different scales.

The first scale is the Bipolar scale (e.g. Yes / No type), the second one is

multiple choice type, the third one is statements in Likert's 5-point scale. Also,

a questionnaire is designed with five major divisions, each division containing

a mixture of different types of questions depending upon the responses required

from bank customers and on the selected technology-driven services soliciting

their responses in two different scales. The first scale is Bipolar scale (e.g.

Yes/No type), and the second one is statements in Likert's 5-point scale.

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II.6. DATA ANALYSIS

The primary data collected through the questionnaires were analysed

using the SPSS V-15 (Statistical Package for Social Sciences) computer

packages. The statistical tools used for data analysis based on the data

enumerated from the questionnaires are as follows:

1. One sample t-test has been exploited to elicit the opinion of

customers on various aspects of technology-driven services offered

by SBI and ICICI bank.

2. Percentage Analysis has been used to establish the contribution of

variables in both the optional and bi-polar type questions raised in

the questionnaires.

3. Paired normalised t-test has been applied to compare the SBI and

ICICI bank customers’ opinions on the desirable and available level

of service quality in respect of the selected technological services.

4. One-way analysis of variance (ANOVA) has been applied to

determine the influence of demographic variables on different

perceptions of customers on the technological services studied.

5. Chi-square test has been applied to determine the existence/non-

existence of association between the various demographic variables

and the availment, frequency of preference, levels of satisfaction

derived from the technology-driven services taken up for the study.

6. Factor Analysis by principal component method has been applied to

reduce the number of suggestions made by ATM customers for

improving the services into three major meaningful factors.

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7. K-Means Cluster Analysis and Discriminant Analysis have been

applied to group the bank customers into three different clusters

based on the levels of satisfaction derived by them from ATM,

Internet, Tele/Mobile/ SMS banking services.

8. Multiple Regression Analysis has been applied to estimate the

influence of SBI and ICICI bank customer’s behaviour and opinions

on the level of satisfaction derived by them from the various

facilities offered by ATM/Internet banking services.

LIMITATIONS OF THE STUDY

First the limitation related to this study is that the study is conducted

only on two sample banks, so the results cannot be generalized.

Secondly, the study has considered only the influence of I.T. based

products and services on customer satisfaction, but not on the loyalty of

customers (Customers behavioral intentions towards the bank in the future).

Third, the results obtained through the study relate to only those

respondents, chosen through simple random sampling and since the profile of

the sample is not a model of actual market share of different public and private

sector banks in India.

Fourth, the study is conducted mainly with the help of primary data,

which suffers from biased-ness and lack of interest among the sample

customers.

Fifth the study is unable to address all possible product classes and

possible service classes.

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II. 7. REVIEW OF LITERATURE INTRODUCTION

The strategic focus of the banks changed from the production

oriented to customer oriented. Hence the customers’ satisfaction is

indispensable in the organization. Research studies reveal that informational

technology instrument in bank is an important and deploy felt necessity. Based

on the above facts many government and non-government agencies, as well as

individual academicians and practioners undertook various studies.

II.7.1.TECHNOLOGY ADOPTION, PRODUCTS AND SERVICES

OFFERED

Johri and Jauhari (2010)1 also analyse the “importance of

technology and issues emerging from this technology”. According to them,

technology is emerging as a key-driver of business in the financial services

industry. The advancement in computing and telecommunication has

revolutionalised the financial industry and banking on the net is fast catching

on. As e-commerce gets transformed into m-commerce with the increasing use

of technologies like WAP, banking business is in for a major overhaul.

_________________ 1 Johri and Jauhari (2010) “Impact of Technology upgradation on the functioning of banks”–Journal of Banking information technology and management –vol.8,p.56.

45

Husain (2010)2 highlights the importance of “Information technology in

various sectors”. In introducing any new technology or system, various

organizational, financial and functional problems are faced in the initiative

stage. People are generally, reluctant to accept a new system, howsoever

beneficial it may be. Such various issues as are involved in computerization

have been critically and vividly discussed.

Balaji (2011)3 is of the view that “Information and information technology

are the key drivers of the information age”. The information age has ushered

in a knowledge-based industrial revolution. The business in this era is

networked and uses information technology to survive in a highly competitive

environment.

Rao (2010)4 explains the role of “Information technology in the financial

services industry”. Technology is bringing about important evolutionary

changes in the investment industry, giving portfolio managers greater control

of their activities and even more time to spend on developing insights into the

stock they own.

______________________ 2Husain (2010) “Impact of Technology upgradation on the functioning banks” – Journal of Banking information technology and management – vol.8 1, p.55.

3Balaji (2011) “Impact of Technology upgradation on the functioning of banks”-Journal of Banking information technology and management- vol.91, p.58.

4Rao (2010) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology and management – vol.8, no.8, p.58.

46

Roger (2011)5 analyses the importance of “Universal banking in India”.

Globalization, liberalization and deregulation of financial markets in many

developed and developing countries have resulted in increased dis-

intermediation and have made commercial banks vulnerable to interest rate

risk. The developments in information technology and telecommunications are

allowing an international pooling of financial resources, thereby spreading the

risk across more than one market.

Vageesh (2010)6 highly appreciates the “NPSBs which have adopted

information technology”. The NPSBs with their state-of-the-art technology

and grandiose plans to make inroads into e-banking are now dealing with the

stock markets. Banks like HDFC and ICICI are foraying into net banking

which offers great convenience to the customers on the one hand and results in

lower transaction costs for the banks on the other.

Suno Brinda Paik’s (2008)7 has provided information on the heading “Racing

toward a new horizon in banking”. He has vividly presented his opinion.

Multiple services he says have taken the place of single transactions in banking

industry. Stepping up training and development, establish a performance,

improving employee benefits and accelerate virtual customer’s service. When

the above services are accelerated in a uniquely diversed population, then

customers of sophisticated knowledge on banking transactions would be the

outcome.

____________________ 5Roger (2011) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology and management - vol.8 – No.1, p.58. 6 Vageesh (2010) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology-vol.8-No.1,p.5. 7 SunoBrindra Paik’s(2010) “Impact of Technology up gradation on the functioning of banks”-Santa Monica,vol.75.iss.9,Sep.p.28.

47

Evan Mannakee (2009)8 has expressed his opinion in his abstract titled

“Customer focused technology improved the banks business”. He has

voiced out that the better way to help the organization would be a proper mix

of technology with customer service. It is the task of the banks to look forward

to customer needs and to actively position the products and services to fulfill

the customer requirements.

Deena Amatev and Mr. Coy (2010)9have expressed their mind in

their extract titled “Fleet Helps Customers do it my way on line”. The two

authors have expressed a positive attitude towards the enhancement of

customer service. Banking organizations, they say, should go beyond home-

banking (traditional functions like opening of accounts, funds transfer, balance

enquiries, bills payment and making proper investment). The two authors

stated that customers should get to know how to explore the web sites to create

awareness of on line products and services.

____________________ 8Evan Mannakee (2011) Marketing News, Chicago, Vol.31 issue 23 Nov.10,2010,pp. 14,15 9Deena Amatev and Mr. Coy (2000) Bank system and technology. New York, Vol.37, Issue 2, Feb.2000,pp. 39,40.

48

Bhasin (2009)10 has analysed the impact of “Information technology on the

banking sector”. Information technology has revolutionized the various

aspects of our life. It has transformed the repetitive and overlapping systems

and procedures into simple single key pressing technology resulting in speed,

accuracy and efficiency of conduction business. The computerization of banks

has provided a major push for enabling them to enter the newer activities. The

banking industry has prepared itself and is strongly emerging to play a major

supplementary role in nurturing e-commerce applications.

Vgur Yavas and Mahmond M Yasin (2011)11 are the two authors who have

produced their opinion on the title “Enhancing organizational performance

in banks: A Systematic approach”. The banking industry is facing a business

challenge for survival and success in a turbulent environment. They need to

adopt a proactive approach. It needs to also face its competitions by improving

service quality, enhancing accessibility and responding to customer demands.

Service delivered to customers should be of high quality. All these challenges

faced and improved can bring customer satisfaction, employee satisfaction with

fewer consumer complaints. A case study proved how a bank can benefit in

lowering costs, enhancing productivity, responding to customer demands,

reducing complaints and improving customer satisfaction.

_________________________ 10Bhasin (2006) “Impact of Technology upgradation on the functioning of banks” - Journal of Banking information technology and management - vol.8 – 54. 11 Vgur Yavas and Mahmond M Yasin (2001) – Journal of services marketing, p5, 6/7 – Academic Research Library, p.444.

49

Diane Brandy (2010)12 has given his observation under the title “Why Service

Stinks”. Due to wide and increasingly rare customer service, the service gap

between top customers and all the rest would be affected. This is because of

radical new business models created by advanced technology which extends to

alter the whole dynamics of customer service. No doubt banks do the best to

enhance their reputation by means of personal touch. They provide ample

choices and options to cater to the needs of the customers and community.

Janaki.B (2010)13 analyzes in his article “How technology is influencing

employees productivity”. There in need to use technology to improve

operating efficiency and customers’ services. Harnessing employee technology

synergy is crucial for boosting productivity and reaching out to the huge base

of retail customers, who are also dispersed in rural and semi-urban areas.

Komath et al., (2008)14 have made a deeper study on “The challenges and opportunities faced by the Indian Banking sector”. There were a number of issues on it but the salient features out of the responses of the issues were encouraging. It was found that entering into new business, new markets and delivering customer’s service was immense. The new changes enhanced the forces of competition. The potential available in the employees should be utilized for good achievement. Indian banks have adapted to the changing environment. ______________________

12Diane Brandy (2002) Business Week, New York Industrial Technology Edition, Issue 3704 Oct.23 2002, pp.118-128. 13Janaki.B (2006) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology and management – vol.8 – p.54. 14Komath.K.V, Kohli.S.S, Shency.P.S, Ranjana Kumar, Nayak.RM, Kuppuswamy.P.T and Ravichandran.N (2003) Viklipa Volume: 28 No.3 – July – Sep. 2003 – pp.8-10.

50

Tessler Franklin N, Mejarland Scholle Sawyer (2008)15 are the authors who

have expressed their opinion on “Online Banking Made Easy”. The use of

online services, for bank and credit card accounts, helps to save time by

allowing the transfer of transactions directly. It is via the programs’ Direct

Connect feature of downloading and importing files from the bank’s web site.

The user needs to know how to process it. He needs to register with the bank

to obtain customer ID and password and also the account name Paperless

payments made electronically are a great benefit and is appreciated for its

quickness and accuracy.

Bauerlein et al., (2010)16 have given their information on “Online banking

service for Human Touch” which is the title given by the authors. Their

abstract narrates the efforts of Banks and Banking of United States – America

Corp (Bof A). They describe the human touch to the online banking services.

Live chat possibilities are available in many banks that easily provide answers

to the customers’ questions and sell more of their products. Pop up messages to

customers’ inquiries help to lead to live-chat sessions with bank employees.

____________________ 15Tessler Franklin N, Mejarland Scholle Sawyer (2005) Macworld: Aug.2005, Vol. 21, Issue 8, p76-77. 2p. 2 colour.

16Bauerlein, Valerie, Canns. Ann and Sidel Rohin (2006) ‘Wall Street Journal – Eastern edition, 7/6/2006 Vol.248, issue 4, p. D1-D2 2, p.1.

51

Marcel van Birgelen et al., (2008)17have carried their research on “Multi-

channel Service Retailing”. A number of retailers are adopting multichannel

services and it appears to be on the rise. A study was made on clients of a large

retail bank to investigate the channel performance satisfaction. The result was

for routine services. Behavioural intentions are most strongly influenced by

satisfaction with office-related performance factors. For non routine service,

satisfaction with service employee performance is the most significant driver of

intentions.

Wileox and Melynda Dovel (2009)18 have given their abstract titled, “On line

banking beats standing in bank lines”. They have expressed on the use of

online banking services that United States focuses on. On line banking is

preferable as all banking can be done even without setting foot inside a branch

office. It is easier as all transactions, even to order cheques, verify the

encashed cheques, apply for mortgage, take loan, by C.Ds and investment

products can be performed. It is expected that with lower costs, the pure

internet banks can pay better rates on deposits. Therefore on the internet one

can, not only fetch higher rates but also save time without waiting for long.

Awareness to receive and pay bill on online, trading stocks, loans or car loans

are now on the increase.

Bhunia (2010)19 explains the “Future of internet”. According to him, some

people are predicting the death of the internet due to burgeoning traffic.

However, no signs of this are in evidence even as the number of internet users

has grown exponentially. In fact, the numerous services have improved with

enhanced technologies and superior interfaces.

_____________________ 17Marcel van Birgelen, Ad de Jong and Ko de Ruytr (2006) ‘Journal of Retailing, 82 (4, 2006) 367-377. 18Wileox, Melynda Dovel (1999) ‘Kiplinger’s Personal Finance Magazine Jun.99 Vol.53 Issue 6, p. 21. 19Bhunia (2006) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology and management.

52

II.7.2.CUSTOMER’S PREFERENCE OF PRODUCTS AND SERVICES

Darkin Mark et al., (2011)20 are the authors who have given their

abstract to their findings in “On E-Banking adoption : from banker

perception to customer reality”. It is well accepted that cost can be reduced

and service reliability improved when the role of technology in a service

organization is increased. It is equally important to retain banking to adopt e-

banking, making customers understand. About 2,000 retail customers were

issued questionnaires to examine and study customer communication

preferences and satisfaction. Internet banking users were identified and bank

managers involved were asked to ascertain what they felt to be the key

influences to customer registration for internet banking.

Platt Steven Keith and Chebat Jean-Charles (2008)21 have

collected the information on “Do DCNS make a difference”. They found it to

be effective in stimulating consumer message awareness, Good consumer

response to DCN proved consumer acceptance. DCN helped to increase

customer satisfaction. The impact of DCN enhanced branch productivity.

Finally one can conclude that DCN can enhance branch transaction processing

thereby reducing cost of labour.

__________________ 20Darkin Mark, Donnell.O, Aodheen, Mullholl and Gywyeth, Grove, Joseph (2007) ‘Journal of strategic Marketing; May 2007, Vol.15, Issue 2/3, p237-252, 16 p 7 charts’ 21Platt Steven Keith and Chebat Jean-Charles (2008) “ABA Banking Journal: May 2008, Vol.100, issue 5, p 44-46, 3 p1 colour DCN (Digital Communication Network)

53

Uppal .R.K. and Harminder Karur Guliani (2009)22 have made a study on

the “Emerging Challenges in Indian Banking” to enhance efficiency and

productivity as the major objectives of banking in India. Increasing levels of

competition have placed various demands on banks. This demanding

environment has exposed banks to various challenges. Technology has posed

new challenges and new issues have started cropping which is going to throw

problems in the near future. Foreign banks and the new private sector banks

have adapted themselves to the changes in the technology, whereas the public

sector and private sector banks have not been able to keep pace. Based

implementation is one of the significant challenges. Therefore the Indian

banking sector is passing through challenging, yet exciting times.

Ludhari, Riadh (2009)23 is the author who has expressed his opinion

under the title “Assessment of the Psychometric properties of SERVQUAL

in the Canadian banking”. Canadian Bank customers were targeted to study

their performance. SERVQUAL was the instrument used for assessing bank

service in the Canadian banking. It was a continuous evaluation of their

service. The result highlighted that response and empathy are the most

important dimensions of service quality in the Canadian banking context.

Findings show that the service provided by the employees is the largest

contribution to bank customer satisfaction.

_________________ 22Uppal .R.K. and Harminder Karur Guliani (2009)- “Professional Banker” – ICFAI University Press. 23Ludhari, Riadh (2009) Journal of Financial Services Marketing June 2009, Vol. 14, Issue 1, p. 70 -82 13p, 193.

54

Rajesh Kothari and Narendra Sharma (2010)24 have expressed their opinion

on the title ‘Defining and measuring the effect of service quality in selection

of a mutual fund in Indian context’. Familiarity of a brand is important to the

success of any marketing mix in services. A familiar and trustworthy name is

essential to success in the markets. Mutual fund companies need to consider

banking issues. Analysis of mutual fund in India, helped to identify that high

familiarity with corporate brand is more influential than any other factor. So

advertising can help for a better recall and awareness and then add value

towards perceived service quality for mutual fund in India.

Clifford (2006)25 studies the impact of “Information technology on

the financial services”. Due to the introduction of information technology, the

roles of banks, mutual funds and insurance companies are changing. The banks

will never be the same again. The dimensions of their business are fast

changing in the new economy.

Sona Sarg (2000)26has inferred the following and cited under the title

“Thoroughly Modern Mutuals”. According to the author, modern customers

instead of traditional banking products prefer access to web-based banking,

mutual funds, stock trading and financial planning services. Banks growth is

attributed to a thorough team approach to banking policies and strategic

technology planning. It is through customer service and new products and

services that the image of mutuality is enhanced.

________________ 24Rajesh Kothari and Narendra Sharma (2010) Journal of Services Research, Vol.9, No.2 Oct (2009- March 2010) – vol.8, no.1, p.54.

25Clifford (2006) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology and management.-vol, no.2,p.43. 26Sona Sarg (2000) Community Banker Washington, Vol.9, Issue 10, Oct. 2000, pp.18-22.

55

Orr, Bill (2000)27 imparts his views in the abstract titled “One pioneer who

didn’t get hammered”. It is his expression from the examination made from

the progress of Salem Five cents Savings Bank. He has described the reasons

for the bank’s success in attracting customers and also of award received by

bank’s internet service which was the key to customer satisfaction.

Nair (2006)28 writes on the “Technological Advancements”, that

technological advancements achieved very recently in the field of

computerization have unfolded many areas of innovations in our living styles.

The world of banking is fast shedding its ancient image and entering from

“Brick and Mortar” model to “click” model. Virtual banking is rising in the

wake of a total revolution in banking transactions.

Rao (2006)29 analyses the impact of “New technology on the banking

sector”. The advent of new technology both in terms of computers and

communications has been changing totally the ways of doing banking business.

Technology has opened new vistas and, in turn, brought new possibilities every

day for doing the same work differently and in the most cost-effective manner.

________________ 27Orr, Bill (2000) , ABA Banking Journal, Feb.99, Vol.91, p. 50.

28Nair (2006) “Impact of Technology upgradation on the functioning of banks” – Journal of Banking information technology and management- -vol.8 p.55. 29Rao (2006) “Impact of Technology upgradation on the functioning of banks” - Journal of Banking information technology and management - Vol.8, p.6.

56

Saxena (2006)30 analyzes “The effect of information technology on the

banking sector”. According to him, the future promises are to be even more

exciting, interesting and challenging. The internet has enabled us to talk to

each customer as an individual with different needs and requirements. This

information technology will influence the productivity and profitability of the

banks.

Theresa Sweaney and Dany Casperson (2001)31 on their research have

expressed their views under the title “Customers Demand More”. They

conducted a survey on more than 160 banks positioned in New York, St. Louis

and San Francisco. They recognized that no customer awareness or interest is

raised in their broader services. Customers felt that the bankers were ignorant

of the customers’ needs. They felt it would be easy if all their accounts would

be at one place. It appeared that the bankers’ motive was only for

recommending or selling them the products instead of satisfying them

(customers).

Malykhina and Elena (2005)32 have expressed their views on

“E-Deposits Over The Internet”. Their findings report on the acquisition of

Wells Fargo and Co. It is of the use of electronic deposits to bank via an

internet portal. It also reports on the electronic deposits with an internet service

for cheque processing; availability of Wells Fargo’s Desktop Deposit service in

an online system. It also expresses presentation of a service to customer with

existing scanning equipment by the company.

_________________ 30Saxena (2006) “Impact of Technology upgradation on the functioning of banks” - Journal of Banking information technology and management - vo.9 – no.57. 31Theresa Sweaney and Dany Casperson (2001) ‘Credit Union Management’, Madisen Vol.24, Issue 4, April 2001, p.4. 32Malykhina and Elena (2005) Information week; 4/4/2005, issue 1033, pp.53-53.

57

Higgins and Kelly Jackson (2005)33 have given their abstract “Appliance

pays big dividend for on line banking application” titled. The abstract

expresses the problems by the Windows based banking application of

(SSFCU). The banking application was facing problems with the growing

customers regarding account details and transfer funds online. There was

difficulty to access the online application for short periods of time. SSFCU

bought a pair of window based web and application servers to the appliances

that could distribute the load. It assured that banking application could grow

with its user base. The new solution lets SSFCU scale the application and to

process its customers’ transactions more efficiently.

Dustin, Mar, et al., (2007)34 have presented their ideas on “On

e-banking adoption : From banker perception to Customer reality”. It is

learnt through study that service reliability is improved when the role of

technology in a service organization is increased. Understanding the

importance of customer adoption, is essential. Quantitative methodology helps

to examine customer’s preferences focusing on internet banking. Two

thousand retail customers were issued customer satisfaction questionnaire and

about twenty-five senior branch bank managers were then asked to rank the set

of issues. Similarities and dissimilarities were identified for managerial

implications.

___________________ 33Higgins and Kelly Jackson (2005) Network Computing, 4/1/2005 Vol.16, Issue 6, p 65-70, 3p. 34Dustin, Mar, Donnell Aodheen, Mullhollan, Gwyneth and Grove Joseph (2007) journal of strateg.ic Marketing; May 2007, Vol. 15 issue 2/3, pp.237 – 252, 16.

58

Ramesh Tasgak. H and Manjeet Kaur (2009)35 have made a research on

“The service quality perceptions” to assess and reassess how customers

perceive banking services, their expectations and satisfaction level with the

service provided by the public and private sector banks. Customer’s

satisfaction is important for retention of customers. Their expectations and

demands should be satisfied for success in today’s highly competitive world of

business. Special services such as cash management, credit cards, ATMs, debit

cards etc. no doubt are being introduced to satisfy customers. A good reception

at the counters, considering their time, quick response to their demands is the

prime importance to the customers. Their observation and study revealed that

public sector banks provide better services than private sector banks. Banks

should commit themselves to the best possible customers’ services.

Andrews Oehler – Daniel Kohlert (2009)36 has an answer to the question

“Where are the market’s self-healing power and a functioning legal frame

work when we need them?”. They arrived at the answer to their question

imparting ‘Financial Advice giving and Taking’, Clients of German banks

appear satisfied with the advice offered by their banks. It can be more

informative and of satisfaction if there is cordial exchange of advice by the

clients and advisors. Theoretical perspectives alone can’t be prospective

without empirical evidence. This factual quality of test was conducted with the

German banks that led to many suggestions to be out of the dilemma.

________________ 35Ramesh Tasgak. H and Manjeet Kaur (2009) Journal of Banking Jan-June 2009.

36Andrews Oehler – Daniel Kohlert (2009) On-line publish – 9th June 2009 - J- Consum Policy (2009) 32 : 91-116 DOI 10. 1007 / S 10603 -009-9099 -4 - Original paper.

59

Dutta Kirti and Dutta Anil (2009)37 have made a study on “Customers

expectations and perceptions across the Indian banking industry and the

resultant financial implications”. They considered the customers expectations

and perceptions of the consumers across the three banking sectors in India.

Giving up the quality perceptions of the customers, the financial performance

of the bank is highlighted. 263 respondents were considered to explore the

customers’ perception of service quality. Factors affecting the Indian customers

were given importance. The analysis revealed that foreign banks offered better

quality of services followed by the private and then the public banks. Financial

performance of banks was also of great notice. There is increasing competition

amongst banks. Customer satisfaction and competitive advantage can be

achieved. This had helped banks to see between customer expectation and

perception regarding the quality of service. This is expected to be a motivator

to enhance reputation and gain customer loyalty.

___________________

37Dutta Kirti and Dutta Anil (2009) ‘Journal of services research: Apr. 2009, Vol.9, iss.1, pp.31-49,19 p8 chart.

60

II.7.3 CUSTOMER’S SATISFACTION ON PRODUCTS AND SERVICES

Leif B Methlie and Herlyorn Nysveen (1999)38have both focused on

customers’ “Loyalty in on-line banking” in their research topic. Fortunately

research in marketing has unveiled several determinants of customers loyalty.

They prove that loyalty in on-line banking environments are similar to those in

physical market place. However customer’s satisfaction and brand reputation

are the main determinants of loyalty. Therefore new marketing strategies must

be formulated for added values to customers.

Tony Floyd’s (2000)39 source of extract in his statement on “Creating a new

customer service” has informed that customers gain good time response and

accessibility through web enabled call centres, customer focused multimedia,

service centres, interactive voice response e-mail etc. This highlights the

advanced technology. But to record and analyse customer experience, in order

to keep relationship involves financial strain. Nevertheless customer service

through modern technology has substantial cost reductions and increase in

revenue profits.

Bryant Dutton (2000)40 has expressed his opinion in his abstract titled

“Customer Service for life”. He highlights the importance and advantages of

electronic document management. This system helps customer service. It

emphasizes the necessity for strategic policy to enable better customer service

and pave the way for e-commerce.

______________ 38Leif B Methlie and Herlyorn Nysveen (1999) Topic of information Technology, 1999, 14, pp.375-386. 39Tony Floyd’s (2000) ‘Creating a new customer service’ Bank systems and Technology New York Vol 37 issue 1, Jan 2000 PPR8–R 13. 40Bryant Dutton (2000) Bank Systems and Technology, New York, Vol.37, July 2000, pp. A12 – A14.

61

Erik Hille (2001)41 has given his suggestion on “The 10 Rules for evaluating

an e-mail management solutions”. Email management has gained its

importance as a channel for customer interaction. It has become a competitive

necessity for the banks. Ten key issues for evaluating globally is distributed.

Waite, Kathryn Harrison and Tina (2002)42 have given their abstract under

the title “Consumer expectations of online information provided by bank

websites”. They explored the factors contributing to customer’s satisfaction.

They searched on online information provided by retail bank web sites and

gained important information to consumers, and the advantages of the internet

for information source. Methodology used proved positive gain.

Nexhmi Rexha et al., (2003)43 have made an empirical study on “The Impact

of the national plan on adoption of electronic banking”. They emphasized

that trust was the key factor influencing the adoption of electronic banking. The

conclusion was made after a survey of bank corporate clients in Singapore.

Satisfaction indirectly influences a customer’s inclination to the use of

electronic banking. Only if the customers have strong trust in their banks then

would they contemplate the adoption of electronic banking. Customer trust is

imperative. So banks should nurture close and long term relationships with

their clients for enhancement. This confidence once achieved will help them to

use electronic banking and become more committed to the bank.

________________ 41Erik Hille (2001) ‘Customer Interaction Solutions’ Nor Walk, Vol.19, Iss 8, Feb.2001 – p.28-34 42Waite, Kathryn Harrison and Tina (2002), Journal of Financial Services Marketing,

June 2002, Vol.6, issue 4, p.309, 14 P 3ch: 43Nexhmi Rexha, Russel Philip John Kingshott and Andrey Shang Shang Aw (2003) Journal of services Marketing Vol 17 No 1.2003 11, pp.53-67.

62

Devbin, James F and Yeung Mathew (2003)44 have given their views under

the abstract titled as “Insights into customer motivations for switching to

internet banking”. Their research was why retail banking might prefer

internet banking either partially or fully. It could be that preference is because

of bank charges and over draft interest rates that have no significant influences

on the use of internet banking.

Ravinder Kumar and Nidhi Walia (2004)45 have made a Research to produce

information on “E-banking : An integrated approach adopted by Indian

banks”. How Indian banks are aligning their services as per global

requirement is a remarkable revolutionary change. This e-banking has a

profound impact on Indian Banking bringing all aspects of financial service

under one roof. The birth of productive banking is because of e-banking. With

the help of internet, access to customer’s account, any where and any time is

possible. E-banking services are more accurate, precise and comprehensive.

Delra Grace and Asan O’Cass (2004)46 have stated their remarks of

“Examining Service Experiences and Post Consumption Evaluations”.

Satisfaction and service are most important to service marketers. Service brand

has great impact on the consumers. How customers evaluate service

performances should be the look out of the service marketers. A study was

made with 254 bank consumers that led to confirm that core service and

employee service make significant contribution. It seems to affect feelings,

satisfaction and brand attitudes.

___________________ 44Devbin, James F and Yeung Mathew (2003) International Review of Retail, Distribution and consumer research, October 2003, Vol.13, Issue 4; - p.20-25. 45Ravinder Kumar and Nidhi Walia (2004) Through website www.banknetindia.com

46Delra Grace and Asan O’Cass (2004) Journal of Services Marketing- Vol.18, No.6, 2004 – pp.450-461, Emerald Group Publishing Ltd. ISSN 0887 -6045 - DOI 10.1108 / 088 760 40410557230

63

Svita and Vishal Kumar (2005)47 have placed their observation on “E-

Banking: The New Age Banking”, for obviously E-Banking offers specific

advantages over the traditional banking methods. On line banking or e-banking

facilitates the customers to contact various banking services from a personal

computer. Customer service and retaining the existing customers, building

relationships with them adds to the advantage. Seven days a week, 24 hours a

day, instantaneous transactions are available. It is unpredictable as how far this

e-banking will improve because of the rapid advances of telecommunication

system and digital technology.

Massad et al., (2006)48 have given their abstract titled “Customer satisfaction

with Electronic Service Encounters”. The authors investigated the aspects of

on-line transaction with electronic service to study the relationships with

customers. About 513 were reported to find and express their opinions on

electronic service customer satisfaction and dissatisfaction. Based on the

analysis it was identified that customer – contact employees play an important

role in on-line service encounters.

Beilski and Lawren (2006)49 the authors to this abstract titled “Nurture Ideas

from the Grass roots” have expressed how huge savings and revenue growth

could be achieved. They found it possible by cost cutting programs and

improving efficiency that helped to reduce waste. It also increased project

investment. Employee inputs and suggestion helped to improve retail customer

satisfaction. They also discovered a program to track project more efficiently.

____________________ 47Svita and Vishal Kumar (2005) Journal of Banking – vol.25, 2005. 48Massad, Nelson, Heckman, Robert, Crowston and Kevin (2006) Their service of reference is ‘International Journal of Electronic ; summer 2006, Vol.10 Issue 4, pp. 73 -104, 32 p. 49Beilski and Lawren (2006) ABA Banking Journal; Dec. 2006, Vol.98, Issue 12, pp.39-40, 2p.

64

Firdes Shroff. T (2007)50 expresses his opinion on “Indian banking

information technology perspectives” that the needs to be accomplished

before the banking industry can reap the advantages of internet, e-commerce,

ERP and technologies of the 21st century. Being in a competitive world of

banking, Indian banks can richly benefit for improving their productivity,

profitability and efficiency by making use of technology. This can help them

win the trust of their valued customers. IT brings changes altering the nature of

the products and services. Multimedia applications offer enhanced accessibility

and understanding Electronic Commerce enables business to be productive to

the market needs. Internet is fast proving to be the next frontier for banking

services making life easier as they allow customers to save time and energy.

Technologies used effectively in Indian banks can be even parallel to the

technologies available globally.

An anonymous (2008)51 author has expressed his findings under the title

“Online banking a top of customer satisfaction poll”. The article presents

information on the results of a study of online financial service and customer

satisfaction which found the customers considered banking with sites superior

to other options. Using the American Customer Satisfaction Index’s (ACSI)

methodology. On line banking scored 82 on the ACSI’s 100 point scale.

While credit card and investment websites both scored 75.

_______________ 50Firdes Shroff. T (2007) – www.nyce.net 51Anonymous (2008) – Journal of Accountancy, Vol.205, issue.6, p.22, 1/4p.

65

Neilson et al., (2008)52 are the authors who contributed to the abstract

“International marketing strategy in the retail banking industry: The case

of ICICI Banking in Canada”. They presented an overview of the marketing

strategy that a retail bank may pursue. An analysis of the marketing strategy of

ICICI Bank in Canada was made. The study illustrates that price, place,

participants’ physical evidence and process can help in attaining customer

satisfaction.

Unknown (2008)53 authors made a study on the title “Online banking at top

of customers’ satisfaction Poll’. It has been deducted from observation on

online financial services and customer satisfaction that customers considered

web sites superior to other options. Online banking seemed more approaching

than credit card and investment web sites. Observation made using (ACSI)

American Customer Satisfaction Index’s methodology proved to be 82 on

ACSI’S 100- point scale while credit card and investment web sites both scores

proved to be 75.

Ziqui Liao and Tan Cheng Michael (2008)54 have given their finding titled

“Measuring Consumer satisfaction in internet banking – A core Frame

work”. It is about internet banking and consumer satisfaction. A framework

was proposed that reduced service quality and can be used to decision cost-

effective and internet banking management, particularly market development.

Marketing managers can use the attributes of usefulness, reliability and security

to attract customers to use online banking..

________________ 52Neilson, Leighann, Chadha, Mega (2008) Source of finding is from Journal of Financial Services Marketing: Dec 2008, Vol.13, Issue 3, pp.204-220 17p. 53Unknown (2008) Journal of Accountancy , Jan 2008, Vo. 205, Issue 6, p.22-22 ¼ p” 54Ziqui Liao and Tan Cheng Michael ACM; Apr.2008, Vol. 51, Issue 4, pp.47-51 5p 3 charts.

66

Bielski and Laurens (2006)55 have expressed their finding under the title

“Nurture ideas from the grass roots” as how huge savings and revenue

growth could be achieved. They found it possible by cost cutting programs and

improving efficiency that helped to reduce waste and increased project

investment. Employee inputs and suggestion helped to improve retail customer

satisfaction. They also discovered a program to track projects more efficiently.

Rohmeyer and Paul (2007)56 have presented their finding under the title “An

Evaluation of Information Security Management Effectiveness” Certain

factors that affect organizational effectiveness in protecting information were

derived. The factors were that organizations technology relied to electronic

process and store information. They developed models to analyse information

about security management effectiveness. They assessed the level of maturity

of the information security programme and also estimated the effectiveness of

information protection. The survey was conducted from 127 companies with

about 326 individuals. The result proved that organizations with higher

qualified information tend to have higher levels of maturity.

___________________ 55 Bielski and Laurens (2006) ABA Banking Journal, Dec.2006 Vol.98 Issue 12, P 39- 40, 2p. 56Rohmeyer and Paul (2007) DAI – A6707, P2653 (Jan 2007) ISBN 978- 0-542- 76635-0.

67

Santourids et al., (2009)57 have expressed their view in the study on “Internet

service quality and customer satisfaction: Examining internet banking in

Greece”. They have stated that the internet service quality is operationalised

by adopting and instrument, which is based on SERVQUAL and consist of six

dimensions, namely assurance, quality of information, responsiveness, web

assistance, empathy and reliability. The field research resulted in 184 valid

questionnaires. They conducted among internet banking customers in Greece.

The findings confirm to a great extent a validity of the instrument and highlight

the above average performance of service quality delivered by Greek banks via

the internet. All quality dimensions are proved to be antecedents of overall

customer satisfaction, with reliability having the most significant impact.

Furthermore quality of information is a crucial dimension driving the customer

intentions for internet banking future usage. Finally familiarization – related

dimensions, such as empathy and web assistance play a very important role in

customers’ willingness to recommend the service to other people.

__________________ 57Santouridis, Jhas Trivellas, Panagiotis, Retilitis and Panagiotis (2009) Total Quality Management and Business Excellence’ Feb. 2009, Vol.20, Issue 2, pp.223-239, 17 p.

68

II.7.4. SATISFACTION LEVEL BASED ON DEMOGRAPHIC

FACTORS

An anonymous author (2000)58 under the title “Generational Customer

Service Tips” states the different approaches extended to different age

generations. World experience and world views differ according to different

age generations. Therefore careful thought about marketing plans need to be

carried out at each generation for quality customer service.

Sanjeev Sharma.K and Nitesh Goyal (2009)59 have made an exploratory

study on “E-mail as an emerging toll of e-marketing”. The above method of

marketing is in its growing stage for promoting their products. It is an answer

to the changing business environment. A study with a sample of 525

respondents was analysed. The respondents were from cyber-cafes in areas of

Punjab, Haryana and Chandigarh. Their attitudes and preferences of customers

who are internet users towards e-mail marketing were interviewed. The

interview revealed that a large number received promotional e-mails in their

account. Thus it helps to reach customers beyond geographical limits,

providing services to the customers at their doorsteps. It is therefore a potent

new weapon to enhance interface and continuous networking promoting

organizational growth.

_________________ 58 An anonymous author (2000) Community Banker Washington Vol.9, Issue 12, Dec. 2000 pp. 54-55. 12.

59 Sanjeev Sharma .K and Nitesh Goyal (2009) Journal of Banking, July -Dec. 2009. - pp.37-39.

69

Mohammed Sadique Khan and Siba Sankar Mahapatra (2009)60 have

together made an empirical study on “Evaluating the service quality of

internet banking”. A questionnaire of 44 quality items were offered to test

the customer’s perspective. It was found that customers are pleased with the

reliability of bank services which is one of the seven quality dimensions. They

are not satisfied with the dimension ‘User friendliness’ ‘Privacy / Security and

‘Fulfillment’. Improving the e-banking should be the target of the bankers as

the computer literacy of the younger generation would be increasing in the

future. Internet banking in India is now at a nascent stage. In order to cope in

the competitive world, innovative and attractive technology based services

should be encouraged. From the view of customer’s perspective, importance to

parameters is indispensable for service quality.

Amit Kumar Chaturvedi and Manish Badlani (2009)61 have expressed their

views under the title “Effects of security aspect on customers’ satisfaction

level in Internet Banking”, focusing on customer service excellence and aims

for better service as a means to enhance customer satisfaction. Internet

banking helps to carry out activities from their desk tops by power and

convenience of the internet. Customers intend to feel secure on online banking,

so their perception of security is important for customer service and

satisfaction. Everyone including those who claimed not to care much about the

security or privacy require information of it on the website. A complete

understanding can nurture the development of security, privacy and trust and

have a definite effect on the satisfaction level. Customer satisfaction by way of

service excellence and security has an impact as quality of service is a measure

to assess it.

_________________ 60 Mohammed Sadique Khan and Siba Sankar Mahapatra (2009) International Journal -Culture and Business Management, Vol. 2 Year 2009. 61Amit Kumar Chaturvedi and Manish Badlani (2009) Journal of Banking Information Technology and Management- Jan- June 2009 pp.40-42.

70

Fue Zeng et al., (2009)62 write on “Determinants of online service

satisfaction and their impact on behavioural intentions”. They express that

there is a necessity to find the key antecedents of online service satisfaction and

to reveal their pattern of impact on behavioural consequences. A study was

made among online banking users. A survey on 235 online service users

reveals that e-service satisfaction influences the four behavioural intentions

either directly or indirectly. Both theoretical and practical implications need to

be examined.

Amit Kumar Chaturvedi and Manish Badlani (2009)63 have given their

expression on “Effects of security aspect on customers’ satisfaction level in

internet banking”. Customer service is important to a company’s brand.

Personal experience with a company’s site is important for customers’.

Perceptions of security experience over time builds trust in a site. Online

banking has to make customers feel secure than make them secure. A lot of

online security today is about customers feeling safe. If they feel safe they go

to use the product more, enjoy it more, have a better experience and do more,

on it. Customer service excellence and improving services is therefore a way to

improve and enhance customer satisfaction.

________________ 62Fue Zeng, Zuahao Hu, Reng Chen and Zhulin Yang (2009) Total Quality Management and Business Excellence Sep.2009, Vo.20, Issue 9, pp. 953-969 17 p.

63Amit Kumar Chaturvedi and Manish Badlani (2009) Journal of Banking Information Technology and Management, Vol.6, No.1, January-June 2009.

71

Chandrasekhar. M and Rajendra Sonur.M (2009-10)64 have conducted a

research on “An analysis of the impact of information technology on the

productivity Indian Banks”. An analysis made from the government and

private sector of 29 banks helped them to conclude that IT has a beneficial

impact on bank productivity. Studies carried out at group levels and

individuals provided further insights into the effect of IT. This great

performance for Indian Banks had once remained a mystery.

Puaj Kaura and Shalini Dubey65 express their views with great wonder as

“Why Problem” when the present world attraction is advancing towards e-

banking. Consumer demand, competitive environment and less expenditure are

reasons for good evolution of e-banking. Nevertheless it sometimes threatens

one as a double edged sword. There appears to be risks and threats such as

security risk, operational risk, bank loss due to choice of outdated technology,

legal risks etc etc. One has always a hope to overcome problems adhering to E-

Banking strategies. Mobile Banking is a new challenge to face replacing e-

banking activities. Prospects in this problem could be achieved if consumers

and vendors could together meet at one site with interest, to solve and get

success.

__________________ 64Chandrasekhar. M and Rajendra Sonur.M (2009-10) “An analysis of the impact of information technology on the productivity Indian Banks.” Prajnan, Vol. XXX VIII, No.1, 2009-10.

65Puaj Kaura and Shalini Dubey – Through website

72

An anonymous (2008)66 author has given his views on the title

“E-banking for comprehensive E-democracy: An Indian Disernment”

states that an effective, efficient and resourceful money management system is

indispensable for a successful democracy. Web based transactional services

help in the form of ATMs, Internet Banking support services etc. This facility

of Ebanking is around the world. E-governance is growing speedily and India

has taken the initiative to come up to world’s standards. 21st century witnesses

e-governance in varying degree like ‘e-seva’ providing governmental services

to citizens of Andhra Pradesh. There is a great anticipation of banking to play

a vital role in e-democracy and the implementation of e-banking in digital

democracy. Usage of smart card technology for village farmers is also looked

forward for effective management.

Robert Hall (2001)67 has titled his finding as “Restoring the work force to

the customer equation”. His assumption is that customer behaviour is

influenced by ‘work force’. His opinion is to be accepted as it can streamline

to improve the efficiency of performance by bank employees on one hand and

equate the customers on the other. But the head quarters need to motivate the

front line workforce as its motive stand as ‘Command and Control’.

_________________ 66An anonymous author (2008) - Journal of banking – Vol.25, pp.33-38.

67 Robert Hall (2001) Bank Marketing, Washington, Vol.33, Issue 3 dated April 2001 on pp.14-15.

73

John Tulley (2001)68 has identified on the title “Establishing unique

customer relations using data warehousing” that the bank customers are apt

for an integrated relationship with their bankers. The Royal Bank of Canada

conducted a gap analysis in 1997 to locate the areas of customer relationship

strategy. He related his findings stating that bank clients longed for a cordial

relationship with banks. Their anticipated needs and business were valued.

Ugur Yavas and Mahamoud Yasin.M (2002)69 have made a systematic

approach on “Enhancing Organisational Performance in Banks” It is a

necessity for banks to adopt proactive approaches for its success and survival.

A case study followed by demonstration helped to illustrate the frame work for

enhancing organizational performance. The operation consists of two stages

Back stage and Front-stage. Back-stage focuses on efficiency and Front-stage

on responsiveness. But the two stages are critical for success as these

operations are common sources of complaints and dissatisfaction among bank

customers with the challenges faced today. Banks have to adopt a novel

approach. Then banks can derive several other benefits such as efficiency,

service quality, customers satisfaction and competitive edge.

_________________ 68 John Tulley (2001) The Canadian Manager Toronto; Vol. 26, Issue 1 Spring 2001, pp.12-13.

69 Ugur Yavas and Mahamoud Yasin.M (2002) The Journal of Services Marketing, 2002 – pp.70-81

74

Chiao, Yu Ching, Chiu, Ya-Kang and Guan. Iyh-Liang (2008)70 made a

study on “Does the length of a customer – provider relationship really

matter”. According to them service quality and customer loyalty in the

banking industry is the target of this study. 610 banking customers were

specimens for observation. It showed that lengths of the customer-bank

relationship was from loyalty built through the achievement of customers. But

relationship-oriented customer’s loyalty is built through the establishment of

trust and limitations.

.

John Mylonakis (2009)71 on his quest on “Customer Relation Management

Functions” derived that to promote ones products and services, banks need to

maintain their customer base and to use their resources to the best. His

research was from the bank marketing point of view. Questionnaires to bank

customers of Athens and Greece led to the finding that technologies help

customers a great deal. Alternative information, the customers are able to

extract through channels such as Internet, phone services, press release etc.

Thus in general he concludes that customers are the valuable assets of any

bank.

_________________ 70Chiao, Yu Ching, Chiu, Ya-Kang and Guan. Iyh-Liang (2008) Service Industries Journal, Jul 2008, Vol.28 Issue 5, pp.649-667, 19p.

71John Mylonakis (2009) ICFAI, University press.

75

II.7.5. CUSTOMER’S SATISFACTION TOWARDS BANKS

Kayis Kim. H and Shin .T.H. (2003)72 are the authors to the title

“A comparative analysis of cultural, conceptual and practical constraints on

quality management implementation – findings from Australian and Korean

banking industries”. The content of the abstract is a review linking perceived

service quality, customer satisfaction, customer loyalty and employee

satisfaction. Their findings were observations made from Australian and

Korean banking industries. Several measures were used to find the

relationships and path links between (TQM) Total Quality Management

practices and employees satisfaction as well. They derived at the conclusion

that long-term business success, should focus on the satisfaction of customers.

Questionnaires distributed to bank customers and employees of 11 banks

responded positively.

Michael A Jones, et al., (2003)73 have given an extract titled “The effects of

locational convenience on customer repurchase intensions across service

types”. Retailing and services need attention to location for convenience, as it

is the point of contact where customers have access to the desired goods and

services. Convenient locations are costly therefore one has to consider the cost

benefit when making decisions. Study had been made which indicated a strong

relationship between satisfaction and repurchase intensions. It also indicated

that high repurchase intentions do not always reflect equally high levels of

satisfaction. Convenience may play a greater role in the initial trial when

compared with more established relationships. Therefore future research

should investigate the role of convenient location for new service providers or

for new customers of established service firms.

_________________ 72Kayis Kim. H and Shin .T.H. (2003) ‘Total quality management and business excellence; Sep. 2003, Vol.14, Issue 7, p.765, 13p. 73Michael A Jones, David L Mothers – baugh and Sharan E Beatly (2003) The Journal of services marketing : 2003 17,6/7 Academic Research Library p.701.

76

Richard Koonce’s (2003)74 He has stated, under the title “Do you put your

customers through hell’? that banks are guilty because they sometimes treat

their customers like commodities. Acquiring new customers is laborious, so to

retain the existing customers would be wise.

Prabhakaran and Satya.S (2003)75 have produced an “An insight into

service attributes in Banking sector”. It reveals the fact that it is necessary to

understand the factors contributing to customer satisfaction. The service

dimensions are reliability, responsiveness, empathy and tangibility. It is based

on SERVQUAL model. In a competitive environment quality service is highly

commendable.

Derek Gryna .S and Frank Gryna.M (2004)76 convey their concept on what

action is needed to be done about “Quality in a Bank and its assessments”.

Quality assessments tell where a bank stands, its impact on customer

satisfaction, employee satisfaction, internal quality improvement, company

culture and operating costs. Assessments of a bank’s quality culture can be

accomplished through employee focus groups or employee surveys. A formal

assessment can guide the development of an action plan.

____________________ 74Richard Koonce’s (2003) Bank Marketing Washington Vol.30, Issue 2, Feb.1998 pp.18-19. 75Prabhakaran and Satya.S (2003)Journal of services research; April-Sep.2003, Vol 3, Issue 1, p.157. 76Derek Gryna .S and Frank Gryna. M(2004) -www.indianinfoline.com

77

Kishore C. Padhy (2005)77 has given his insight on “Customer service” as a

strategy for competition. Customer satisfaction should be the mission and

purpose of every business. Winning and retaining a customer is indispensable

for development. Learn diligently from defectors. Do not ignore either their

complaints or expectations. It is best to gather complaints, identify, satisfy

their expectations, provide and develop models for customer’s retention.

Retention is a dynamic indicator of quality performance.

Gurry Gelade. A and Stephen Young (2005)78 have shown in their research

“The service profit chain model in the retail banking sector”. Where

employee perceptions are favourable the organizational sub units enjoy

superior business performance. Study has been made to assess the

relationships between organizational climate, employee attitudes, customer

satisfaction and sales performance in the retail banking sector. At the unit level

of analysis it was inferred that employee attitudes and climate evaluations with

customer satisfaction and sales performance are consistent. Favourable

attitudes and climate evaluations are associated with elevated levels of

customer satisfaction and sales.

______________________ 77Kishore C. Padhy (2005) – www.atmmarketplace.com 78Gurry Gelade. A and Stephen Young (2005) - Journal of occupational and organizational psychology – March 2005 – p.20

78

Chen, Tser – Yieth and Chang, Hong Sheng, (2005)79 under the title

“Reducing customers perceived risk through banking service quality cues

in Taiwan” have produced their finding. Besides relating the service quality

and perceived risk to customers, internal composition of their relationship is

explored and explained. Reliability and empathy of service quality had

affected financially and psychologically, whereas functional and social risks

are influenced by tangibles of service quality. Different levels of service

quality are perceived in people of various stages.

Marcel Van Birgelen et al., (2006)80 have given their news on “Multi-

channel service retailing: The effects of channel performance satisfaction

on behavioural intentions”. Multi-channel strategy to service customers is

growing. Positive relationship between customer satisfaction with service

retailer employee and service retailer office performance is evident. The same

relationship with e-service performance and telephone service will strengthen

the positive effect of customer satisfaction. It has been observed in their

findings that interactions between customer satisfaction with the performance

service channels will help behavioral intentions.

____________________ 79Chen, Tser – Yieth and Chang, Hong Sheng, (2005) Journal of Business and Psychology; Summer 2005, Vol.19, Issue 4, pp.521-540, 20p 80Marcel Van Birgelen, Ad de Jong and Ko de Ruyter (2006) -Journal of Retailing,

2006 – vol.82 (4, 2006) pp.367-377.

79

Manoj Kumar Dash and Mahapatra .D.M. (2006)81 have made a study at the

models for “Measuring customer satisfaction in the banking industry”.

They have also added suggestions for further finding. Evaluating a customers

trend is a mystry and a challenging task. Building satisfaction amongst the

customers and customer loyalty is an integral part of any business. Customer

satisfaction needs to be monitored to make changes and create improvements.

The key to banks’ future success would be, increased demand for banking

services, speed, service quality and customer satisfaction. Customer

satisfaction needs to be measured, for it is quite a complex issue and confusion

about what is required and how to go about it. We need parameters and

measures to address the customer satisfaction. The four subscales for overall

satisfaction measure are ‘general satisfaction’ ‘trust’ ‘reliability’ and

professionalism. Much study has been made to infer that maintaining loyal

customers is an integral part of any business.

Rahman and Zillur (2006)82 under the title “Customer experience

management – A Case Study of an Indian Bank” have produced their

abstract. Under their opinion survival and success in many service business is

dependent on loyal customers. Loyalty is important to the growth of a

company, therefore measuring is all the more important. Existing approaches to

the loyalty have not had the expected success. A modified ‘loyalty acid test’

was used to explore the relative experience and loyalty. The result proved that

a majority of customers are satisfied with the functioning of the bank but would

be delighted if the bank changed its interface with the customers to become

more cognitive.

____________________ 81Manoj Kumar Dash and Mahapatra .D.M. (2006)- http//www.indianmba.com/faculty_column/fc328/fc328.html 30.3.2010. 82Rahman and Zillur (2006) Journal of Database Marketing and customers Strategy Management; Apr. 2006,Vol.13, issue 3.

80

Zondvios Dimitris, et al., (2007)83 were the authors who have given their

abstract of their finding under the title “A Simulation Model for Measuring

Customer Satisfaction Through Employee satisfaction”. Measuring

marketing and business performance is evaluated by customers’ expectations

and customers’ satisfaction. Models have been developed to measure the

performance using employee satisfaction as an important factor leading to

customer satisfaction. Results from the survey of customers at banks in Greece

helped them to derive the fact that employee satisfaction resulted in greater

customer satisfaction, with efforts to keep employees satisfied.

Baumann et al., (2007)84 under the title “Prediction of attitude and

behavioural intentions in retail banking” have imparted their finding. They

have expressed about customer loyalty in retail banking. A study was made on

1,951 individuals to measure loyalty. The result indicated that willingness to

recommend is best predicted by affective, overall satisfaction and empathy.

The study has led to the discussion of the relationship between perceived

satisfaction, service quality and customers’ intentions to recommend a bank to

retain a customer. A substantial amount of variation was observed in the result

that leads to discussion. The result demonstrated the importance of satisfactory

measures and some dimensions in predicting loyalty in retail banking.

__________________

83Zondvios Dimitris, Kaustantopoulos Nikolaos and Tomaras Petros (2007) Service AIP conference proceedings 12/26/2007 Vol.963 Issue 2, pp.l1086 -1089, 4p, 2. 84Baumann, Chris, Burton Surzan, Elliot Gregory and Kehr, Hugo (2007) International Journal of Bank Marketing; 2007, Vol.25, Issue 3, pp.102-116,5p 5 charts;

81

Sui-Huu Yu (2007)85 conducted research on “Customer satisfaction”.

Literature shows the relationship between customer satisfaction and economic

returns. Work to link customer satisfaction to customer profitability is very

limited. Follow up on individual customers’ satisfaction with products or

purchase intentions and economic contributions to the firm were not to the

expectations. Data collected from 36 retail branch banks were studied and

examined for individual customer’s satisfaction, customer costs and customer

profitability. It was found that customer satisfaction depended on individual

customers’ purchase intentions and firm reputation. Customer revenue and

costs both increase as customer satisfaction improves. But no significance is

observed between customer satisfaction and customer profitability. This

empirical investigation highlights to analyse customer’s value which is

beneficial for long term customer relationship management.

Jham, Vimi, Khan Kaleem Mohd.86 have stated in their abstract titled

“Determinants of performance in Retail Banking: perceptions of customer

satisfaction and retail marketing” about the growing interest to researchers

and managers of consumer satisfaction and relationship marketing. This

research was based on 555 customers. Systematic methodology helped to

enhance reliability of the findings. It also revealed, that satisfaction is linked

with performance of the banks. The authors suggested that adaptation variables

can lead to better performance.

__________________

85Sui-Huu Yu (2007) ‘Total Quality Management and Business Excellence; Jul 2007, Vol. 18, issue 5, pp.555-569, 15p 6 charts, 1 diagram’. 86 Jham, Vimi, Khan Kaleem Mohd - Singapore Management Review 2008 2nd Hald . Vol. 30, Issue 2,pp.35-45.

82

Pal Manabendra N Choudhury and Koushiki (2009)87 are the authors, who

contributed to the abstract on the above title “Exploring the dimensionality of

service quality: an application of the Indian Banking Industry”. Banks are

functioning under competitive pressures. They should maintain a loyal

customer base and improve their market positions. Through improved service

quality, many banks are increasing customer satisfaction and loyalty. With

international banking and innovations in market place, customers have wide

choice of selection. Therefore banks need to understand in depth what

dimensions of service quality would attract customers. Service managers need

to improve the customer service and have a greater control over the overall

outcome. Study on this has led to four dimensions of service quality of the

retail banking – customer – orientedness, competence tangibles and

convenience. A methodological study has been made to study and evaluate the

performance.

Maltzler Kurt, Sauerwein, Elimar and Heischmidt, Kenneth (2003)88 are

the authors to the abstract titled “Importance – Performance Analysis

Revisited: The Role of the Factor Structure of Customer Satisfaction”. It

is their finding that the needs of the customers should be understood so as to

provide products and services to their expectations. Recent research in

customer service / satisfaction falls into three categories (basic factors, and

performance factors). Importance depends on their performance. Empirical

study on the satisfaction says that traditional IPA can be misleading.

Nevertheless authors have identified as how (IPA) Importance Performance

Analysis should be extended and modified.

___________________ 87 Pal Manabendra N Choudhury and Koushiki (2009) Asia Pacific Journal of Operational Research’Feb. 2009, Vol. 26,Issue 1, pp.115-133, 19 p.

88 Maltzler Kurt, Sauerwein, Elimar and Heischmidt, Kenneth (2003) Service Industries Journal, March 2003, Vol.23, Issue 2, pp.112-129.

83

Avinandan Mukhergee and Prithwiraj Nath (2005)89 took an effort to study

on “An empirical assessment of comparative approaches to service quality

measurement”. Modified gap model, TOPSIS and loss function were the three

comparative approaches were used to measure service quality. Using the above

three approaches, an empirical evidence was given by large sample consumer

data on their finding for leading Indian commercial banks. The rankings made

are statistically in agreement. But it should not be used in an interchangeable

manner.

Milind Sathye (2005)90 made a study on the Indian Banks about their

“Privatization, Performances and Efficiency”. He arrived with the result

that private ownership helps improve efficiency. Thus his study provided

knowledge that was lacking and leads to an understanding, that enhancing

efficiency and performance of public sector banks is the key for several

reforms. Financial performances of banks, efficiency of banks were measured

to evaluate the impact of privatization on firm performance. A comparative

study was also made. He derived that the efficiency of privatized banks

regarding financial performance were higher than the public banks. Significant

difference was also seen in quality advances India is also catching up with

privatization and is marching towards success

_________________

89Avinandan Mukhergee and Prithwiraj Nath (2005) - The journal of service marketing 2005: 19, 3, p.174. . 90Milind Sathye (2005) - Vikalpa – Volume 30. No.1, Jan-March – 2005.

84

Anglis et al., (2005)91 have produced their abstract on the above topic

“Customers’ perceived value for private and state – controlled Hellenic

banks”. Banks are trying to enhance customers’ level of satisfaction and

preference by increasing their customers’ loyalty. Customers of Private and

State controlled banks of Africa completed questionnaires. Data collected were

analysed. They were able to identify proportions of pleased and displeased

customers who also had their effects based on education and income. They also

noted that there were 3 main factors that related to perceived value, which were

professionals, marketing efficiency and effective communication. Their

analysis also proved that controlled bank customers, enjoy a perceived value in

the case of marketing efficiency, and private banks enjoy a value in the case of

professional service and effective communication.

Pout Marcun and Mcquilhen Lisa (2005)92 have produced the abstract titled

“An empirical investigation of customer satisfaction and loyalty across two

divergent banks”. Customers’ satisfaction and customers’ loyalty go hand in

hand for the good of an organization. Relationship between two different or

distinct customers, segments and university students, within the Australian

banking industry was observed. Results proved no significant difference in the

satisfaction level. However it was significant that of the behavioural intentions,

loyalty, pay more and external response was obvious, suggesting that

management should initiate and secure improvements in customer satisfaction.

____________________ 91Anglis, Vasilis A, Lymperopaul, Constantive, Dimaki, Katerina (2005), Journal of. Financial Services Marketing, Jun 2005, Vol 9, Issue 4, pp.360-374, 15 p, 5 charts’ 92Pout Marcun, Mcquilhen Lisa (2005) ,Journal of Financial services Marketing, June 2005, Vol.9, Issue 4 pp.344-359, 16p.

85

Bruitten and Marcus Leland (2006)93 have done their research on

“Customer relationship and credit access in commercial banking”. Based

on that various topics such as financial globalization, suburban and

interpersonal relationships and have concluded that advanced transportation,

communication, information technologies and infrastructures have reduced

space and place in social and economic life. Their research work helped them

to infer that capital access to entrepreneurs depend on consolidated banks and

the physical location of customer firms. Commercial banks establish less

customer’s relationships with local firms. Firms based in the metropolitan

periphercy have easier capital access than those in large metropolitan cities.

Jham and Vimi (2008)94 have expressed their views under the title “Customer

Satisfaction in the Indian Banking Sector”. It is a study which draws to

attention the growing interest to researchers and managers. Services provided

by five Indian Banks were the target of the study. With the help of factor

analysis relationship dimensions lead to identify customers satisfaction. It also

helps to study the customer satisfaction of private and public sector banks with

respect to the services provided by their banks.

_________________ 93Bruitten and Marcus Leland (2006) DAI – A6703 P1094 (Sept. 2006) ISBI 978-0- 542 62451-3. 94Jham and Vimi (2008) - IIBM Management Review (Indian Institute of. Management, Bangalore) March 2008, Vol. 20 Is: 10 p, 6 charts, 1 Graph.

86

Swati Anand et al., (2009)95 have made a study on “Impact of technology

upgradation on the functioning of banks”. Taking all the banks they

conducted their study to note the changes due to introduction of new and

upcoming technology, the benefits the customers enjoy and the ratio of services

provided by public, private and foreign banks. Their finding was also to reduce

workload and the measures that could be taken to give the best service to the

customers. Technology encourages innovative applications with product

manufacture design and control. Thus it is a means for a rapid change

especially as the banks take to this fast track. Besides this development,

technology of telecommunication and electronic data processing, have

accelerated these changes. Thus new technology has altered the ways of

banking business, improving and ensuring customer’s satisfaction.

Reflecting on increased application of technology in the Indian

Banking system due to information technology revolution, many studies have

been made to analyse the importance of information technology on the growth

and performance of the banking sector. Hence it is a great challenge for both

public and private sector banks to focus attention on customer satisfaction

through information technology products and service.

________________ 95Swati Anand, Dangwal and Kailash Saklani (2009), Journal of banking IT and Management, Jan- June 2009 – pp.50-55.

87

RESEARCH QUESTIONS:

The Review of Literature has raised certain research questions which

motivated the researcher to undertake the present topic.

On technological advancement in the service sector particularly in banking

industry.

On adoption of the technology by the banks to serve the customers.

On the utilization of the technology based products and services by the

customers.

On the security system of the Banking Industry.

.

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