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  • 1. A STUDY ON ACCOUNT HOLDERS’ PERCEPTION TOWARDS INTERNET BANKING ABSTRACT Tremendous progress in the field of information technology has reduced theworld to a global village and it has caused unprecedented changes in the bankingindustry. Huge developments in the technology of telecommunications and electronicdata processing have further stimulated these changes. Internet banking is new jargonfrequently used in banking circles. Today, banks are switching to multi-channeldistribution of financial services through internet. It helps the banks to launch newchannels to gain competitive advantage, reduce their costs, improve their financialservices, enlarge their customer databases, progress their financial positions throughinnovative products. In the competitive world Internet -banking is used as a strategictool by the banking sector to attract and retain customers. The present paper coverscustomers’ perspectives on Internet banking services.Keyword: Internet Banking, Online Banking,
  • 2. INTRODUCTION Today, Indian banks are working under intense competition from newgeneration banks and foreign banks. Banks are embracing new and cost effectivedelivery channel. Offering attractive value added services is the only way to retainand attract the customers. Banking Industry is experiencing rapid changes due toavailability and usage of alternate channels. Technology plays a major role in thedevelopment of alternate channels and interactions between customers and banks. Theinternet is revolutionizing the banking industry to conduct its business through onlinefamiliarly called as Internet banking or online banking. It offers personalized servicesthrough the web portals. Internet banking involves use of Internet for deliveryof banking products & services. It provides enormous benefits to consumers likeAccess his accounts at anytime and from any location with ease and least cost. Thispaper highlights the users’ perception towards the Internet banking.STATEMENT OF THE PROBLEM Banking is a customer oriented service industry, where the customer is infocus and customer service is a differentiating factor. The traditional functions ofbanking are very limited one. Economic reforms initiated by the government of Indiain the early 1990’s have brought about a sea change in the operational environment ofthe financial sector and the functioning outlook of Indian banks. Customer expectsmany services with the various deliver mode in the speedy and economically. ModernWorld Bank is fully based on computerization connected with the Internet. Internetbanking provides new opportunities for banks to expand their markets and servicesnot only in the local level but also into the world level. The Internet bankingrevolution has made it possible to provide ease and flexibility in banking operations tothe benefit of customers. The e- banking has made the customer say goodbye tolimited time banking and local area operation. Due to the enormous benefits ofInternet banking most of the customer opt for Internet Banking services. This study provides an opportunity to know role of Internet banking service incommercial banks and its customer satisfaction is analyzed. The present study alsofocuses on the awareness of the technology oriented services offered to theircustomers in the Rajapalayam Taluk.
  • 3. SCOPE OF THE STUDY Traditional branch based retail banking remains the most wide spread methodfor banking transaction. However the internet technology rapidly changing the way ofdesigning and delivering the personal services. Now Commercial banking areintroduced internet based e-banking system to improve their operations and to reducethe cost. Despite all their efforts aimed at developing better and easier internetbanking system, these systems remain unnoticed by the customer. Therefore there is aneed to understand users’ acceptance of internet banking and a need to identify thefactors that can affect their intention to use the Internet Banking.REVIEW OF LITERATURE Dr C. Paramasivan (2009) in his studies entitled “Customer satisfactionthrough information technology in commercial banks’ highlighted that, customers aresatisfied with banking services to some extent and the bankers should try to improvetheir services at an affordable cost with the help of information technology. Mishra (2005) in his paper explained the advantages and the security concernsabout internet banking. According to him, improved customer access, offering ofmore services, increased customer loyalty, attracting new customers are the primarydrivers of internet banking. But in a survey conducted by the online bankingassociation, member institutions rated security as the most important concern ofonline banking. Nyangosiet al. (2009) collected customers opinions regarding the importanceof e-Banking and the adoption levels of different e-Banking technologies in India andKenya. The study highlighted the trends of e-banking indicators in both countries. Theoverall result indicates that customers in both countries have developed a positiveattitude and they give much importance to the emergence of e-banking.OBJECTIVES OF THE STUDY The following are the main objectives of the study  To analyse the reasons for opening bank account.  To find out the reasons for preferring Internet banking services  To understand the facilities mostly availed by the respondents and the opinion about the services.  To measure the satisfaction level of the customer.
  • 4. HYPOTHESES Based on the objectives of the studies the researcher framed the following nullHypothesis. 1. There is no relationship between the socio economic factors of the respondents and their satisfaction.RESEARCH METHODOLOGY Data which is a vital aspect in any research has been collected through variousresources. Both primary as well as secondary data have been used in this study.Primary Data Primary Data is the first hand information, which has been collected throughthe pre-tested interview schedule. The interview schedule was designed to gather thedata keeping in view of objectives of the study.Secondary Data The Secondary data is an integral part of any research study or a project reportas it provides information on key variables, which play a major part in the research.The Secondary data are collected through the various studies, books, magazine,journals, internet, newspapers etc to supplement the present study.TOOLS FOR ANALYSIS To analyze and interpret the data the researcher used the Percentage,Correlation and GAP Analysis.SAMPLING DESIGN Rajapalayam is familiarly called as “Cotton City”. More number of Spinningand Weaving Mills are functioning. Most of these products are exported to variouscountries. Similarly it’s also known for the Rajapalayam breed of dog. Theseindustries are providing more business opportunities to the people more then the otherareas in Virudhunagar District. To facilitate the entrepreneur and other people 28commercial banks are available with the Internet Banking Services. The numbers ofInternet bank users are invariably high. So the researcher has adopted convenientsampling method and selects the 300 respondents from the all banks.
  • 5. ANALYSIS AND INTERPRETATION1.1. NATURE OF ACCOUNT Nowadays banks offered various types of account for different types ofcustomer. Data regarding the type of banks account of respondents is collected anddepicted in Table 1.1. Table 1.1 TYPE OF ACCOUNT S.NO Kind of Account Number of Percentage Respondents 1 Savings Account 62 20.67 2 Current Account 152 50.67 3 Salary Accounts 48 16.00 4. Cash Credit Account 38 12.66 Total 300 100.00Source: Primary Data It is clear from the Table 1.1 that out of 300, 20.67 per cent respondents havesavings bank account, 50.67 per cent have current account, 16 per cent of therespondents have salary accounts, and remaining 10 per cent of the respondents havetime deposit account.1.2. INFORMATION SOURCES ABOUT INTERNET BANKING The bank offer different types of services to the customer from time to time.Most of the time the modern services provided by the bank is not correctlycommunicated to the customer. So the researcher collected the information about thesource through which the respondents got the information about the internet bankingservices. This piece of statistics has been presented in Table 1.2. Table 1.2 KNOWLEDGE ABOUT INTERNET BANKING SERVICES S.NO Sources Number of Percentage Respondents 1 Advertisement 120 40.00 2 Friends and Relatives 63 21.00 3 Bank Staff 86 28.67 4 Bank Website 31 10.33 Total 300 100.00 Source: Primary Data
  • 6. It is clear from the Table 1.2 that out of 300 respondents, 40 per cent haveknown from advertisement, 21 per cent of the informants got the information from thefriends and relatives, 28.67 per cent of the customers are came to know about theInternet banking service through bank staff and the remaining 10.33 per cent of therespondents known from bank website.1.3. REASONS FOR PREFERRING INTERNET BANKING FACILITIES Internet banking provides enamors faculties to the respondents. Theinvestigator gathered the information about the factor which induce or urge therespondents to prefer online banking facilities. Table 1.3 shows the major reasons forutilizing the online banking by the respondents. Table 1.3 REASONS FOR USING ONLINE FACILITIESS.NO Reasons Number of Percentage Respondents 1 Fund transfer 144 48.00 2 Electronic Bill presentation and 44 14.67 payment 3 Checking Accounts balance 64 21.33 4 Online bill payment 36 12.00 5 Business Purpose 12 4.00 Total 300 100.00Source: Primary Data It is clear from Table 1.3 that out of 300 respondents those who utilize theInternet Banking services, 48 per cent of the respondents utilize for Inter account fundtransfer, 14.67 per cent of the customers for Electronic Bill presentation and paymentuse the internet banking, 21.33 per cent prefer for checking their account balance, 12per cent utilize for online settlement of their bill, remaining 4 per cent prefer toDeposit and withdraw money at any time.1.4. OPINIONS ABOUT SERVICE CHARGES OF INTERNET BANKING The bank collects the service charges from the accounts holders for providingthe internet banking services. The researcher has gathered information about theopinion about service charges fixed by the bank and presented in the table 1.4. Table 1.4 OPINION ABOUT THE SERVICE CHARGES
  • 7. S.NO Level Of Service Charges Number of Percentage Respondents 1 Very high 24 8.00 2 High 88 29.33 3 Moderate 116 38.67 4 Low 72 24.00 Total 300 100Source: Primary Data It is vivid from the Table 1.4 that out of 300 respondents, 8 per cent feel thatthe service charges are very high, 29.33 per cent pointed out that the charges are high,38.67 per cent are feel moderate and the remaining 24.00 per cent feel that servicescharges are low.1.5. PROBLEMS FACED BY THE RESPONDENTS Even though the bank provides various services under internet bankingscheme to their customers, some time it creates some minor problems. The researcherhas identified common problems faced by the respondents while using InternetBanking. It is shown in the Table 1.5. Table 1.5 PROBLEMSS.NO Problems Number of Percentage Respondents 1 Network failure 87 29.00 2 Error in operation 61 20.33 3 No security for internet dealing 83 27.67 4 No Authenticated records 52 17.33 5 Low Speed and Delay 17 5.67 Total 300 100.00Source: Primary Data It is observed from the above Table 1.5 that out of 300 respondents 29 per centof the respondents face network failure problems, 20.33 per cent of the respondentsface error in operation, 27.67 per cent of the respondents feel that there is no security
  • 8. in e- dealings, 17.33 per cent think that there is no authentication records and theremaining 5.79 per cent of the respondents think that net work delay problems.1.6. GAP ANALYSIS ON THE RESPONDENTS PERCEPTION The raw data obtained on the expectations of the respondents on all the finedimensions of the quality, viz tangibles, reliability, assurance responders and empathywere used to calculate the ‘gap’ that exists. This gap analysis was done for all thedimensions. This level was assed purely on the basis of their mean valuesdevelopment. Comparing with a reference means value of ‘5’ which was consideredto be the maximum taking in the account that any organization should like to achievethe gap, i.e. the difference between the respondents score and the reference meanvalue is the “service gap”. Table 1.5 deals the service gap on all five dimensions ofservices. TABLE 1.6 GAP ANALYSIS OF THE SATISFACTION LEVEL OF RESPONDENT ON INTERNET BANKING SERVICE Dimensions Expected Mean Experienced Mean S.D Service Score Score GAP 0.87204 0.918919 5 4.081081IB Confident 3 0.86533 1.067568 5 3.932432IB Login 0 0.82715 1.027027 5 3.972973IB Information 8 0.85196 1.013514 5 3.986486IB Satisfied 4 1.16375 1.351351 5 3.648649IB Security 0Source: Primary Data A service gap of greater than 2.5 was considered to be highly critical area forimprovement of the performance dimensions. A service gap of less than 1.5 wastreated as less significant and no need of treatment was required and a difference of1.5 to 2.5 was considered as critical and it needed further improvement. It has beenfound that the following services need further improvement.
  • 9. The above GAP analysis pointed out that, the customer are satisfied with theall the dimension of the Internet Banking Services.1.7. SATISFACTION LEVEL OF THE CUSTOMER The researcher has gathered information about the Internet Banking users’satisfaction level and presented in the Table 1.7. Table 1.7 SATISFACTION LEVELS.NO Level of Satisfaction Number of Percentage Respondents 1 Highly Satisfied 123 41.00 2 Satisfied 89 29.67 3 Moderate 55 18.33 4 Unsatisfied 21 7.00 5. Highly unsatisfied 12 4.0 Total 300 100.00Source: Primary Data It is clear from the Table 1.7 that out of 300 respondents, 41 per cent of therespondents are highly satisfied with the Internet banking services and only 4 per centof the users are not satisfied with the Internet banking services.Testing of Hypothesis There is no relationship between the socio economic factors of the respondentsand their satisfaction. To test the hypothesis, the researcher has used Correlationanalysis. Table 1.7 (A) RELATIONSHIP BETWEEN SOCIO ECONOMIC AND INTERNET BANKING SERVICEVariables Gender Age Qualification Employed Sex Income MaritalInternet -.151 . -.134 -.041 .172 -.255 .103banking 065
  • 10. The above Table 1.7 (A) shows that Internet banking services don’t have highpositive correlation with the socio-economic factors. The correlation analysis showsthe positive relationship with age (0.065), category (.172), marital status (.103) andnegative relationship with gender(-.151), qualification (-.134), employment (-.041),income (-.255). So the hypotheses are rejected.Result There is a relationship between the socio economic factors of the respondentsand the satisfaction level.SUGGESTIONS Based on the finding of the study, the following suggestions were made with aview to improved the customer service in the Internet banking System. 1. Even though the E-banking provides innumerous facilities to the users’ still the customer worry about the Security system offered by the banks. For this banks must implements the followings.  Bank should install system supported by software and firewalls. It should be configured the highest security setting with the level protection according to the customers needs.  Bank should increase their ability to control and manage the various risk inherent to the e-transaction activities.  Bank should implement more security to minimize the risk and increase customer authentication such as Personal Identification Number, Digital Signature, audit trail for transaction, etc. 2. The banks have to focus on quality of services and also the banks should try to charge a reasonable service charge. 3. The major problems faced by the employees of the bank are connectivity problems and power failure problem. To overcome these problems the branches should set up a preventive measure. 4. Banks can have a tie-up with other banks so that the customers can transact between accounts of various types of banks.
  • 11. 5. If any complaint is received by the banks it must be redressed immediately. Similarly the Bank staff must clear doubts of the customers in vernacular language.CONCLUSION Banking system in India emphasizes the need for automated banking. InternetBanking allows the customers to satisfy many needs with minimum humanintervention. Due to the unhealthy competition in the banking field the banker mustcut their expenses and attract as well as retain the customers by offering internetbanking services. Internet banking is a unique weapon for survival of banks andretains the customers’ loyalty. But the security under internet banking is alwaysquestionable one. If the bank creates trust about the securities system among thecustomers it easily accomplishes its milestone.References 1. Akinci, S., Aksoy, S. and Atilgan E., “Adoption of Internet banking among sophisticated consumer segments in an advanced developing country”, International Journal of Bank Marketing, Vol. 22, No. 3, 2004, pp. 212-232 2. Aldlaigan, A.H. and Buttle, F.A., “Consumer involvement in financial services: an empirical test of two measures”, International Journal of Bank Marketing, Vol. 19 No.6, 2001, pp. 232-245 3. Arunkumar S, Saranathan, “A Study on Attitude and Intention Towards Internet Banking With Reference to Malaysian Consumers in Klang Valley Region”, The International Journal of Applied Management and Technology, Vol 6, Num 1, pp -115-146. 4. Biju K, D. Devandhiran, “Customers’ Satisfaction on Core Banking: A Study with special reference to a Nationalized Bank in Thirunelveli”, International Journal of Research in Commerce & Management, Volume 3, Issue no. 5, May, 2012, pp. 146-152. 5. Deepak Jain “ Electronic Banking” IBA BULLETIN, Dec 2002 6. Dr. Deepak Gupta; Dr. Vikrant Singh Tomar, “A Comparative Study of Customer Friendly Services of Selected Private & Public Sector Bank In India : A Case Study Of ICICI Bank Vs SBI” Journal on Banking Fiancial Services and Insurance Research, Volume 1, Issue 9 (December, 2011), pp-28- 39 7. Khurana Sunayna, “Service Quality Gap And Customers Satisfaction of Private Sector Banks: an Empirical Study”, International Journal of Electronic Customer Relationship Management; Issue Volume 4, Number 1; 2010, pp 87 – 95. 8. Mukherjee A and Nath P (2003), “A Model of trust in online relationship banking”, International Journal of Bank Marketing, Vol. 21, No.1, pp.5-15.
  • 12. 9. Nyangosiet al. “The evolution of e-banking: a study of Indian and Kenyan technology awareness”, International Journal of Electronic Finance, Vol.3, No.2, 2009, pp.149-165.10. Venugopalan. M, “Implementation of core banking solutions to withstand competition” IBA BULLETIN, Feb 2005.11. Mishra A K (2005), “Internet Banking in India Part-I”, banking/ibkg.html, 15 Sept. 2010.