This document is a dissertation submitted by Sandip Dey for the partial fulfillment of a Master of Business Administration degree. The dissertation is titled "A Study on Internet Banking Service Quality in Cachar District". It includes an introduction, acknowledgements, preface, table of contents, and the first chapter which provides an overview of internet banking, measuring service quality, parameters for measuring service quality, capturing customer perspectives, gaps in service design and delivery, and strategies for closing gaps. The document appears to be analyzing service quality of internet banking in Cachar District in India.
Memorandum Of Association Constitution of Company.ppt
A STUDY ON INTERNET BANKING SERVICE QUALITY IN CACHAR DISTRICT
1. A STUDY ON INTERNET
BANKING SERVICE QUALITY
IN CACHAR DISTRICT
Submitted for the partial fulfillment of the course for Master of Business
Administration
A DISSERTATION PROJECT REPORT ON
Submitted by:
SANDIP DEY
Registration No.10105539 of 2009-2010
2. 1
DEPARTMNENT OF BUSIESS ADMINISTRATION
ASSAM UNIVERSITY
(A Central University)
SILCHAR-788011 (Assam)
: 03842-270200, 270847
E-mail: au_dba@rediffmail.com
Dr. D. Ghosh
CERTIFICATE
I certify that the work entitled “A Study on the Internet Banking Service Quality in Cachar
District” written and submitted by Sandip Dey in partial fulfilment of the requirement for the
award of the degree in Master of Business Administration is a work by him.
He is a bonafide student of MBA 4th
semester, Department of Business Administration, Assam
University, bearing Roll 24190247 No. 24190193, No.10105539 of 2009-2010, AUS.
He is a very hard working and sincere student. I wish him all the success in life.
Place: Silchar Dr. Debomalya Ghosh
Date:
3. 2
ACKNOWLEDGEMENT
I, Mr Sandip Dey, a student of MBA 4th Semester Assam University, Silchar owe a great
thanks to the people who helped and supported me during this dissertation project entitled
“A Study on Internet Banking Service Quality in Cachar Deistrict”
At the very outset, I would like to convey my deepest sense of gratitude to Dr.Debomalya
Ghose, Assistant Professor, Department of Business Administration, Assam University,
Silchar, who was a source of continuous guidance to me for organizing, designing &
completing this project.
I am also very thankful to all my respondents who have valued my work and provided me
their timely help towards my approach to my task.
Finally, I extend my heartfelt thanks to Almighty, my parents, my friends and well-wishers
who were also in some way or the other an instrumental for making this very project work a
success.
Thanking all,
Sincerely yours,
Sandip Dey
MBA 4th Semester
Assam University, Silchar
Place: Silchar
Date:
4. 3
PREFACE
Management study is a constant learning process and dissertation is an integral part of that
process.
I have done my dissertation report entitled “A STUDY ON INTERNET BANKING SERVICE
QUALITY IN CACHAR DISTRICT”
The project undertaken by me gave me first-hand knowledge about the service provided by
various banks in Silchar. It also provided me an insight into the conditions of various Banks.
This project gave an opportunity to interact with the customers and to know their various
views regarding online services provided by the bank in CACHAR DISTRICT
In order to make the data and findings organized and easily understandable, effort has been
made to present them in a simplified, organized manner, with tables and figures. The
findings are derived from the respondents surveyed. On the basis of these findings some
recommendations are put forwarded.
Further, I solemnly declare that all information furnished in this report are true to the best
of my knowledge.
For the convenience of the study the whole report is divided into 7 parts which gives the
complete picture of the whole work.
Chapter-1 Portraits the brief overview of Internet Banking and Service Quality
Chapter-2 Consists of the Literature Review,
Chapter-3 Represents the Research Methodology followed for the study.
Chapter-4 is all about Data analysis and interpretations.
Chapter-5 Represents Findings.
Chapter-6 Recommendations
Chapter-7 Conclusion
5. 4
Executive Summary of the Project
Name of the project – “A Study on the Internet Banking Service Quality in Cachar District”.
Name of the Institution- Jawaharlal Nehru School of Management Studies, Department of
Business Administration, Assam University
Institutional Guide – Dr.Debomalya Ghose
Objective of the study –
To determine the Customers quality expectations of Public & Private Bank.
To determine the Customers quality experience of Public & Private Bank.
To find the gap between customers’ expectations of quality of services for public and private
bank.
To evaluate the performance of public and private banks on the basis of quality of services.
To make suggestions for improvement of quality of services in public and private bank.
Scope of the Study
The study encompasses customer service quality of all types of banks namely private, public
banks operating in Cachar district, Assam
Limitations of the Study
Limited geographic Area
Limited Time Period
Small sample
Research Methodology
Source of data: Primary and secondary
Research Approach: SURVEY METHOD
Analysis of Data: Questionnaire, SERVQUAL TOOL
6. 5
CONTENTS Page No
Executive Summary 4
CHAPTER 1: Introduction 7
1.2 Measuring Of Survey Quality 8
1.3 PARAMETERS FOR MEASURING SERVICE
QUALITY
9
1.4 CAPTURING CUSTOMER’S PERSPECTIVE OF
SERVICE QUALITY
9
1.5 GAPS IN SERVICE DESIGN & DELIVERY 10
1.6 STRATEGIES FOR CLOSING THE GAP: 10
CHAPTER 2: REVIEW LITERATURE 12
CHAPTER 3: RESEARCH METHODOLOGY 18
3.1 Research Plan 19
3.2 Research Design 19
3.3 Nature of Research 19
3.4 Primary Source 19
3.5 Questionnaire 19
3.6 Sampling Procedure: 20
3.7 SECONDARY DATA 20
CHAPTER 4: Data Analysis 21
4.1 Respondents’ Profile 22
4.2 Analysis of Customer Expectation of Service Quality 23
4.3 Analysis of Customer Perception of Service Quality 27
4.5 AGE WISE SERVICE QUALITY RATING 28
4.6 EDUCATIONAL QUALIFICATION WISE QUALITY RATING 29
7. 6
4.7 OCCUPATION WISE QUALITY RATING 30
4.8 FAMILY ANNUAL INCOME QUALITY RATING 31
4.9 CUSTOMER SERVICE QUALITY RATING DISTRBUTED
ACROSS BANK
32
4.10 CUSTOMER SERVICE QUALITY BASED ON TYPE OF BANK 33
CHAPTER 5: FINDINGS 35
CHAPTER 6: RECOMMENDATION 38
CHAPTER 7: CONCLUSION 40
BIBLIOGARPHY 41
ANNEXURE 42
8. 7
Chapter 1:
INTRODUCTION
Globalization and deregulations have increased competition in the marketplace, as
nowadays it has become much easier for companies to cross borders and compete
internationally. The increased competition, on its behalf, has made organizations to
constantly try to increase their productivity and decrease their costs. One way for them to
achieve that is by investing in information technology.
The recent development of information technology has led to major changes in the way
services are delivered to the customers. Nowadays, customers are using more and more self-
service options, which are more convenient and fast. In addition, the advent and use of the
Internet has changed considerably the daily activities of most people, such as shopping and
banking. According to the Internet and Mobile Association of India (IAMAI) with more and
more people accessing the Web through mobile phones, the Internet user base in the
country is projected to touch 243 million by June 2014, a year-on-year growth of 28 per
cent.
Online services, including online banking services, are becoming an attractive alternative to
visiting service outlets or phoning call centres for increasing number of customers. Some of
the reasons for customers to prefer online services (as online banking services) are:
convenience, feeling more in control of the service process and avoiding human contact and
saving time. As far as online services are concerned, it is quite easier for customers to
evaluate and compare the benefits of competing services. In addition, the switching costs are
very low, that is why retaining the customer in the Internet space is of vital importance. In
order for service providers to retain their e-customers, they should have better
understanding of how customers perceive and evaluate the quality of the electronically
offered services. Businesses that have been experienced and successful in offering e-services
are starting to apprehend that besides website presence and low price, the important
success or failure factors also include the electronic service quality. Although the literature
on service quality is abundant, very little research has been conducted on the evaluation of
the quality of services delivered over the Internet.
As far as banks in particular are concerned, during the second half of 1990s, the way of
operating in the banking industry has undergone a fundamental change because of the
advent of the Internet. Taking into consideration the huge investments banks make in
Internet infrastructure, customer satisfaction and retention are turning into the crucial
factors for success in online banking meaning that the generation of positive customer value
on the Internet requires the establishment of long-term customer relationships. In today’s
oversupplied world, where customers have very high demands, the financial services
organizations are trying to become more customer-focused. In order for the E-banking to be
profitable, banks should focus not only on acquiring new customers but also on the
retention of existing customers According to Mols (2000) the introduction of E-banking
services may change crucially the way banks build and maintain their customer
9. 8
relationships. The increased use of the Internet in the future will heighten the expectations
and perceptions of customers, thus making e-service quality an increasingly important issue.
Thus, understanding service quality issues within the new delivery channel becomes crucial.
In addition, delivering high quality services is a way companies manage to improve their
customer relationships. Delivering high quality services is a prerequisite for achieving
customer satisfaction and only through customer satisfaction can the company gain loyal
customers. Because of the highly undifferentiated products and services that financial
organizations, and specifically banks, offer, service quality becomes main tool for competing
in this marketplace. In general, because of the higher profits and higher customer retention
to which they lead, high-quality services are believed to provide banks with competitive
edge in the marketplace. From the mentioned above, it becomes obvious that high service
quality is essential for surviving in the highly competitive banking environment. This leads
to the fact, that a good understanding of the attributes that customers use to judge service
quality is necessary in order for the company to be able to monitor and enhance its service
performance and improve its overall service quality.
1.2 MEANING OF SERVICE QUALITY
Service quality is a term which describes a comparison of expectations with performance.
Service quality is a focused evaluation that reflects the customer's perception of specific
dimensions of service: reliability, responsiveness, assurance, Empathy, tangibles.
Satisfaction, on other hand, is more inclusive: it is influenced by perceptions of service
quality, product quality, and price as well as situational factors and personal factors.
(Zeithmal & Bitner)
Service quality is a business administration term used to describe achievement in service.
It reflects both objective and subjective aspects of service.
According to Asubonteng et al. (1996): Service quality can be defined as “the difference
between customers‟ expectations for service performance prior to the service encounter
and their perceptions of the service received”.
According to Gefan (2002), it is a comparison made by the customers between the quality of
services they want to receive and what they actually received from the service provider.
QUALITY DEFINITION OF AMERICAN SOCIETY FOR QUALITY CONTROL
It defined Quality as The totality of features and characteristics of a product or a service that
bears on its ability to satisfy stated or implied needs.
10. 9
1.3 PARAMETERS FOR MEASURING SERVICE QUALITY
The following are the parameters for measuring service quality:
Tangibles: Encompasses physical facilities, equipment and appearance of personnel
etcetera.
Reliability: Perform promised service dependably and accurately.
Assurance: Involve employees‟ knowledge & courtesy & their ability to inspire trust
and confidence.
Responsiveness: Willingness/readiness to provide prompt service.
Empathy: Which is caring, individualized or customized attention the organization
provides its customer.
Courtesy: Politeness, consideration, and friendliness of service personnel
1.4 CAPTURING CUSTOMER’S PERSPECTIVE OF SERVICE QUALITY
Service quality
dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibility
Word Of
Mouth
Personal
needs
Past
Experience
External
Communication
Expected
Service
Perceived
Service
Perceived Service
Quality
11. 10
1.5 GAPS IN SERVICE DESIGN & DELIVERY
Seven types of gaps that can occur at various points during the design & delivery of a service
performance are given below:
The knowledge gap is the difference between the service providers‟ belief
customers‟ actual needs and expectations.
The standard gap is the difference between management’s perception of customers‟
expectations & the quality standards established for service delivery.
The delivery gap is the difference between specific delivery standards and the
service providers‟ actual performance on the standards.
The internal Communication gap is the difference between the company’s
advertising and sales personnel thinks are the product’s features, performance and
service quality level and what the company is actually able to deliver.
The perception gap is the difference between what is in, In fact, delivered and what
customers perceive they have received.
The interpretation gap is the difference between what a service providers‟
communication efforts promise and what a customer thinks was promised by this
communication.
The service gap is the difference between what customers expect to receive and
their perception of the service that is delivered.
Gap 1, 5, 6 & 7 represents external gaps between the customer & the organization. Gap 2, 3,
4 are internal gaps occurring between different functions & departments within the
organizational strategies to address service quality.
1.6 STRATEGIES FOR CLOSING THE GAP:
Strategies for closing Gap 1(The knowledge gap):
Learn what customers expect
Understand customer expectations through research, complaint analysis, customer
panels etc. Increase direct interactions between managers & customers to improve
understanding. Turn information & insights into action.
Gaps strategies to address service quality Gaps 2 (The standard gap):
Establish the right service quality standards.
12. 11
Ensure that top management displays on-going commitment to quality as defined by
customers.
Set, communicate & reinforced customer-oriented service standards for all work
units.
Establish clear service quality goals that are challenging, realistic & explicitly
designed to meet customer expectations.
Strategies for Gap 3 (The delivery gap):
Ensure that service performance meet standards. Clarify employee roles
Ensure that all employees understand how their jobs contribute to customer
satisfaction.
Match employees to jobs by selecting for the abilities & skills. Provide employees
with the technical training needed to perform their assigned task effectively.
Strategies for Gap 4 (The internal communication gap):
Ensure that communication promises are realistic.
Seek inputs from operations personnel when new advertising programs are being
created.
Get sales staff to involve operations staff in face to face meetings with customers.
Develop internal educational, motivational, & advertising campaigns to strengthen
links among marketing, operations & human resource department.
The Gap-5 the perception gap- recognizes the customers do not always want what the
service needs from them.
Some service personnel make it a point to not only keep customers inform during
service delivery but also debrief them at the end & sometimes offer tangible
evidence.
E.g. A doctor may explain to a patient what took place during a medical procedure,
such as surgery, what was found if anything- that differed from what was expected, &
what the patient can expect for the future.
To reduce The Gap 6- The interpretation gap- communication specialist in the firm need
to pre-test all advertising, brochures, telephone scripts, & website contents before they are
published. So that correction & modification can be done.
The strength of the gap methodology is that it offers generic insights and solutions that can
be applied across different industries.
What it does not attempt, of course, is to identify specific quality failures that may occur in
particular service businesses.
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Each firm must develop its own customized approach to ensure that service quality becomes
& remain a key objective.
CHAPTER 2:
REVIEW
LITERATURE
14. 13
CHAPTER 2:
LITERATURE REVIEW
The global trend toward the service quality was first started in the 1880s when businesses
began realizing that quality of product was no more sufficient to sustain a competitive
advantage (Van der Wal et al., 2002). Service quality is significantly related to profitability
(Buzzell and Gale, 1987; Rust and Zahorik, 1993), customer satisfaction (Bolton and Drew,
1991; Boulding et al., 1993), customer retention, (Reichheld and Sasser, 1990), and
competitive capabilities (Oliveir et al., 2002). With the increasing importance of services and
growing competition both consumers and managers should pay special attentions to the
service quality (Tai, 1994). Customer perceived service quality has been theoretically
represented as consisting of two dimensions.
Parasuraman et al. (1985; 1988) distinguish a process and an outcome dimension, whereas
Gronroos (1984) makes a distinction between functional and technical quality. According to
Gronroos (1984), the process or functional quality refers to “how’’ the service is delivered,
while the outcome or technical quality refers to “what’’ customers receive, the benefits of
using the service. This study focuses on ‘how banks in India are delivering services over
Internet’ i.e. the ‘process’ or ‘functional’ quality of Internet banking services and not on the
‘technical’ or ‘outcome quality’. Henceforth, throughout this paper, ‘service quality’ shall be
used to refer tothe ‘functional’ or ‘process’ quality.
Parasuraman et al. (1985) identified ten determinants of service process quality that were
further distilled them into five dimensions: tangibles, reliability, responsiveness, assurance,
and empathy, and as a result SERVQUAL model came into being (Parasuraman et al., 1988).
It has been tested and validated across various service industries and countries: the health
sector (Carman, 1990; Headley and Miller, 1993; Lam, 1997; Kilbourne et al., 2004); fast
food (Lee and Ulgado, 1997); telecommunications (Van der Wal et al., 2002); retail
chain(Parasuraman et al., 1994); banking (Lam, 2002; Zhu et al., 2002); information systems
(Jiang et al., 2000); andlibrary services (Cook and Thompson, 2001).
Parasuraman et al. (1988; 1991) defined service quality as “the difference between
customer expectations of service to be received and perceptions of the service actually
received”. This approach to measuring service quality is popularly referred as
“disconfirmation paradigm”. Several studies in the past reported poor “fit” for the
disconfirmation model in certain settings. This led into criticism of the SERVQUAL scale
(Parasuraman et al., 1988), by an increasing number of researchers on several grounds, such
as, the use of gap scores, the measurement of expectations, positively and negatively worded
items, the generalizability of its dimensions, and the defining of a baseline standard for good
quality (Cronin and Taylor, 1992; Brown et al., 1993).
In order to overcome the shortcomings of SERVQUAL, Cronin and Taylor (1992) developed
SERVPERF scale for measuring service quality and claimed it to be efficient in comparison
with the SERVQUAL scale. The major difference between these two scales is that SERVQUAL
operationalizes service quality by comparing the perceptions of the service received with
expectations, while SERVPERF maintains only the perceptions of service quality. Several
researchers in the past have used performance-only scores and reported it superior to
disconfirmation approach to measure service quality (for example, Dabholkar et al., 1996;
Ekinci and Riley, 1998; Frochot and Hughes, 2000; Janda et al., 2002; Getty and Getty, 2003;
15. 14
Caro and Garcia, 2007; Wilkins et al., 2007). Therefore, this study employs only performance
scores to measure Internet banking service quality.
Online banking is the emerging issue, which is expending rapidly in banking industry
especially in Asian countries. Extant literature on E-banking or online banking normally
focused on the customers’ perception about IB services their advantages or flaws and the
areas of further improvement. Some of them are given below:
Jun and Cai (2001) defined Internet banking as the use of Internet as a delivery channel for
banking services which include opening a deposit account, transferring funds, electronic bill
presentment and payment. They identified seventeen dimensions service quality in Internet
banking grouped in three categories customer service quality, online systems quality, and
banking service product quality.
Joseph et al. (1999) uncovered six dimensions of internet banking service quality:
convenience and accuracy, feedback and complaint management, efficiency, queue
management, accessibility and customization.
Broderick and Vachirapornpuk (2002) observed the member usage patterns, as a
participant, in an Internet banking community. They identified 3 elements carrying the most
immediate impact on service evaluation: cues in the service setting, key events in the service
encounters, and the level and nature of customer participation.
Gikandi and Bloor, (2009) investigate the factors that influence the adoption and
effectiveness of e-commerce in retail businesses in Kenya. Two surveys were carried out
(Initial and follow-up) in the years 2005 and 2009, respectively, which involved banks
controlling approximately 90% of formal retail banking in Kenya. The purpose of the follow-
up surveys is to monitor the trends in 4 years (2005 – 2009). The result shows that there
was a drastic shift in the importance attached to some e-banking drivers between years
2005 and 2009. They concludes that e-banking has matured in developed countries, it would
be expected that banks in developing countries would learn some lessons from the
developed countries and be spared some of the uncertainties undergone by their
counterparts in technological development.
Machauer and Morgner (2001) conclude four clusters of German bank consumers. These
were “transaction oriented”, “generally interested”, “service oriented”, and “technology
opposed” groups. In the USA, Barczak et al. (1997) underlined the consumer motives for use
of technologically based banking services and distribution channels and found that
customers could be clustered on their money management philosophies. Their results
describing four motivational clusters including “security conscious”, “maximizes”, “instant
gratification”, and “hassle avoiders” indicated that the four motivational segments had
different attitudes and behaviours towards different banking technologies.
Malhotra and Singh (2010) conduct an exploratory study and make effort to present the
current status of Internet banking in India and the extent of Internet banking services
offered by Internet banks. In addition, it seeks to examine the factors affecting the extent of
16. 15
Internet banking services. The results reveals that the private and foreign Internet banks
have performed well in offering a wider range and more advanced services of
Internet banking in comparison with public sector banks. He also highlighted the
determinants affecting the extent of Internet banking services, size of the bank, and
experience of the bank in offering Internet banking, financing pattern and ownership of the
bank are found to be significant.
Johnston (1997) illustrates that certain actions, such as increasing the speed of processing
information and customers, are likely to have an important effect in terms of pleasing
customers; however other activities, such as improving the reliability of equipment, will
lessen dissatisfaction rather than delight customers and suggests that it is more important
to ensure that the dissatisfies are dealt with before the satisfiers. In the light of technology
acceptance model (TMA), Guriting (2006) examines the factors that determine intention to
use online banking in Malaysia Borneo. In his study, the perceived ease of use and perceived
usefulness factors are considered to be fundamental in determining the acceptance and use
of various information technologies.
However, these beliefs may not fully clarify behavioural intention towards newly emerging
technologies, such as online banking. The results of the study indicate that perceived
usefulness and perceived ease of use are strong determinants of behavioural intention to
adopt online banking. There is also an indirect effect of computer self-efficacy and prior
general computing experience on behavioural intention through perceived usefulness and
perceived ease of use. His research is in the extension of Davis (1989) in which he
investigated that perceived usefulness and perceived ease of use are the fundamental
elements of perception in TAM. He clarify the meanings of Perceived usefulness is defined as
the extent to which a person believes that using a particular technology would enhance
her/his job performance while perceived ease of use is the degree to which using IT is free
of effort for the user.
The influence of internet trust on risk perception and consumer attitudes towards internet
banking is very high. Propensity to trust is a determinant not only for interpersonal
relationships but also for trust in technological systems. (Grabner-Krauter, 2008). He adds
both to technology adoption research and to trust research in marketing by examining the
role that different types of online trust play in the adoption of internet banking. He focuses
on the concept of internet trust, analysing if it is a distinct type of trust that influences the
consumer’s perceived risk of internet banking and the consumer’s attitude toward internet
banking. On the basis of a focus group interview with banking professionals, TAM literature
and e-banking studies, Pikkarainen, et al. (2004) develop a model indicating online banking
acceptance among private banking customers in Finland. The model was tested with a
survey sample (n = 268). The findings of this study indicate that perceived usefulness and
information on online banking on the Web site were the main factors influencing online-
banking acceptance.
(Suh & Han, 2002) collected 845 cases on the Web to survey users’ behaviour towards
Internet banks. The results of statistical analyses using structural equation modelling
indicate that trust has a significant impact on the acceptance of Internet banking. Generally,
the behaviour of Polish internet users and that of consumers in more developed countries
exhibit similar traits. One of the dominant relationships that have been observed in Polasik
17. 16
and Wisniewski (2008) study is the link between the decision to open an online account and
the perceived level of security of internet transactions. The findings of his research prove
that the experience with the medium of internet and certain demographic variables are
robust predictors of the adoption status. Moreover, this inquiry documents that advertising
appears to be efficacious and that online banking interacts with consumption of other
products offered by banks. The researcher suggests that financial institutions can encourage
customers to use this cost-effective distribution channel (online banking) through carefully-
planned actions.
The emergence of self-service banking technology and customers’ perceptions of internet
banking self-service within the Irish financial services sector was investigated by Loonam
and O’Loughlin (2008). This qualitative study of the Irish retail banking sector explored
consumers’ e-banking interactions and experiences in addition to assessing the dimensions
critical to e-banking service quality. Many traditional service quality attributes were found
to be redundant in the study and instead e-dimensions such as web usability, trust, access
and information quality service recovery and flexibility emerged as important to e-banking
service provision.
Another study was conducted by Hasim & salman (2009), to determine the factors that
affect sustainability of internet usage by Malay youth in Kota Bharu, a rural town in the
north east of peninsular Malaysia. The researchers study and concluded that there is
sustainability of internet usage among Malay youth. As far as factors that have positive
effects on sustainability of internet usage is concerned, the results of the study showed that
interpersonal and social network and perceived and realized benefits have significant
positive effects on sustainability of internet usage by Malay youth. The results also showed
that issues relating to security concerns and interruptions have significant negative effect on
the sustainability of internet usage by Malay youth.
The present situation of online banking in Romania, and the appropriate strategies for the
successful implementation and development of online banking services in Romania context
was investigated and analysed by Gurau (2002). The study revealed the complexity and the
challenges of introducing online banking services in Romania. The analysis of the data
conclude that the successful implementation and development of online banking are
influenced by many inter-related factors and institutions, including the quality and security
of internet network, the level of internet knowledge of the population, the government
support, as well as the quality/reliability of online banking services.
Chong, et al. (2010) empirically examines the factors that affect the adoption decision of
online banking in Vietnam. Perceived usefulness, perceived ease of use, trust and
government support was examined to determine if these factors are affecting online banking
adoption. The results showed that perceived usefulness, trust and government support all
positively associated with the intention to use online banking in Vietnam.
Contrary to the technology acceptance model, perceived ease of use was found to be not
significant in this study. The impact of online banking intensity on the financial performance
of community banks were examined by Acharya and Lingam (2008). Study results indicate
that the increasing use of internet as an additional channel of marketing banking services
has significantly improved the financial performance of community banks.
18. 17
The influence of perceived web site security and privacy, usability and reputation on
consumer trust in the context of online banking is analysed by Casalo et al. (2007).
Moreover, the paper also aims to analyse the trust-commitment relationship since
commitment is a key variable for establishing successful long-term relationships with
customers. The data showed that web site security and privacy, usability and reputation
have a direct and significant effect on consumer trust in a financial services web site. Besides
this, consumer trust is positively related to relationship commitment. Finally, it is observed
that trust is a key mediating factor in the development of relationship commitment in the
online banking context.
20. 19
CHAPTER 3:
RESEARCH METHODOLOGY
Research Methodology ill common parlance refers to a search for knowledge. One can also
define also research as a scientific and systematic research for pertinent information a
specific topic. Research is an art of systematic investigation. Some people consider research
as a movement, a movement to the known to the unknown.
3.1 Research Plan
Research Approach: Survey Method.
3.2 Research Design
SERVQUAL – a perceived service quality questionnaire survey methodology.
3.3 Nature of Research
Descriptive Research design is used for study.
3.4 Primary Source
Primary data consists of original information gathered for specific purpose. The primary
data is collected through questionnaire. The questionnaire is through common instrument
collecting primary collection. I collected the data through questionnaire from different
customer.
3.5 Questionnaire
For obtaining primary data. A structure questionnaire is designed to collect data from
customers of Banks. The questionnaire consisted of three parts. Part A consisted of the
profile of the customers. Part B consisted of 20 statements on 6 dimensions to measure the
expectations of the customer. Part C consisted of 20 statements on 6 dimensions to measure
the perceptions of the customer. Where;
Question no 2, 17, 20 represents Reliability parameter.
Question no 16, 11, 13, 7, 14 represents Responsiveness parameter
Question no 1, 8, 15, 18 represents Empathy parameter
Question no 6, 9, 19 represents Tangibles parameter
Question no 3, 4, 5,10 , 12 represents Assurance parameter.
21. 20
Questionnaire have attached in appendix.
3.6 Sampling Procedure:
1. Sample Unit : Consumer having Internet banking.
2. Sample Size : 94 Respondents.
3. Sampling Method : Convenient Sampling Method.
3.7 SECONDARY DATA:
Data Collected from Reserve Bank of India Publications.
Various journal articles have been referenced for understanding the back ground of
the study.
23. 22
Chapter4
Data Analysis
Conducting the survey of this study, 100 questionnaires have been distributed. Some of
them had missing answers. When starting the analysis of the data, It is decided to dismiss
from the very beginning those questionnaires that did not fit usable in this case. While
conducting a survey with 100 distributed questionnaires from which 94 (94%) was initially
used .A specific questionnaire is prepared for the customers and data is obtained from them
by moving around different location. The customers gave valuable information regarding
their experiences in online banking. All information’s are collected and a proper analysis is
done.
The data is analysed by finding the Mean scores of the various SERVQUAL dimensions both
from expectations and perceptions. Such mean scores are compared with each other to find
the gaps between expectations and perception.
All the analysis and its interpretations are discussed below. Each of the analysis is done as
per the information obtained from the customers and a serious interpretation has been done
to best of my effort.
4.1 Respondents’ Profile
a) AGE
For the study customers who are above the age group of 18 years were considered. Following
table shows the distribution of customer across various group.
Table 4.1: Age Group of Customer
Age Group No of respondents % respondents
Under 20 1%
21-30 67 71%
31-40 5 5%
41-50 14 15%
Above 50 7 7%
Total 94 100%
Source: Field Data
71% of customers belong to the age group 21-30 years. 2nd
largest group 15% belong to the age group 41-
50. 7% belong to the age group above 50 & 5% belong to the age group 31-40 and about 1% were in the
age group under 20.
24. 23
b) TYPE OF BANK:
Two categories of Bank namely public sector and private sector are studied. The following
table shows the number of respondents from each category of Bank.
Table 4.2; Type of Bank
Source Field Data
Out of 96 respondents 17% respondents are from private sector and rest 83% are from
public sector bank.
c) Gender of Customer:
The following table shows the composition of customers who have responded for the
survey.
Table 4.3 Gender of the Customer
Type Frequency Percentage
Male 64 68%
Female 30 32%
Total 94 100%
Out of 94 respondents 68% are male & 32% are female
d) Annual income of Customers:
The following table shows the annual income of the customers who responded for the
survey
Table 4.4 Monthly income of the customer
Type Frequency Percentage
Below Rs 25000 51 54%
Rs25000-50000 21 22%
Above 50000 22 23%
Total 94 100%
54% of the respondents have monthly income less than Rs 25000, whereas 23%
respondents are having monthly income above Rs 50000. And 22% respondents has income
in bracket of Rs 25000-50000
Type of Bank Frequency Percentage
Private 16 17%
Public 78 83%
Total 94 100%
25. 24
e) Occupation of Customer
The following table shows the Occupation of the customers who responded for the survey
Table 4.5 Occupation of customer
Type Frequency Percentage
Student 44 47%
Employee 42 45%
Businessman 5 5%
Housewife 3 3%
Total 94 100%
47% respondents are students, 45% are employed, 5% are businessman and 3% are house
wife.
f) Customer Bank:
The following table shows the Customer Bank of the customers who responded for the
survey
Table 4.6 Customers’ bank
NAME Frequency Percentage
UBI 18 19%
AXIS BANK 6 6%
SBI 55 59%
UCO Bank 4 4%
ICICI Bank 3 3%
Bank Of Boroda 1 1%
HDFC 3 3%
Vijaya Bank 1 1%
IDBI Bank 2 2%
Allahabad Bank 1 1%
Total 94 100%
59% respondents are from SBI, 19% respondents from UBI, 6% respondents from AXIS
BANK, 4% respondents from UCO BANK, 3% respondents from ICICI BANK 3% respondents
from HDFC, 1% respondents from BANK OF BORODA and again 1% respondents from Vijaya
Bank.
g) Account Type of Respondent:
The following table shows the Account type of the customers who responded for the survey
Table 4.7
Type Frequency Percentage
Saving 79 84%
26. 25
Current 7 7%
Salary 8 9%
Total 94 100%
84% having savings accounts 7% having current account where as 9% having Salary
account.
h) Internet Usage rate of Respondents:
The following table shows the Internet usage of the customers who responded for the
survey
59% respondent use internet regularly where else 33% use internet often where else 9%
use seldom.
58%
33%
9%
Internet Usage Rate
Always
Often
Seldom
Type Frequency Percentage
Always 55 59%
Often 31 33%
Seldom 8 9%
Total 94 100%
27. 26
4.2 Analysis of Customer Expectation of Service Quality
To assess the customer service quality, customer expectation on five dimensions were
captured. The following chart presents the overall perception of private and public.
Though the customer perception of the five dimensions namely Reliability, Empathy,
Responsiveness, tangibility and Assurance have an average ranging 5.939716 to 6.333333.
There are differences in the exception in banks.
Table 5.1 Customer Service Quality expectation of public and private bank
Interpretation:
Among all the service quality of Internet banking parameter reliability has been highly
expected by customers irrespective of the type of bank. The least rated parameter is
Tangibles. This ratings shows customer expects high satisfactory service quality from all
type banks. Another observation is that Private bank are rated high in all parameter
5.7 5.8 5.9 6 6.1 6.2 6.3 6.4
Reliability
Responsiveness
Empathy
Tangibles
Assurance
Overall Service Quality
Expectation
Reliability Responsiveness Empathy Tangibles Assurance
Overall Service
Quality
Expectation
private 6.340659341 6.103296703 6.288461538 5.974358974 6.202197802 6.181794872
public 6.333333333 6.080851064 6.236702128 5.939716312 6.182978723 6.154716312
28. 27
4.3 Analysis of Customer Perception of Service Quality
To assess the customer service quality, customer perceptions on five dimensions were
captured. The following chart presents the overall perception of private and public.
Though the customer perception of the five dimensions namely Reliability, Empathy,
Responsiveness, tangibility and Assurance have an average ranging 5.939716 to 6.333333.
There are differences in the exception in banks.
Table 5.1 Customer Service Quality perceptions of public and private bank
-Interpretation:
Among all the service quality Parameter of Internet banking Assurance has been highly
rated by customers irrespective of the type of bank. The least rated parameter is Empathy.
This ratings shows customer Perceived satisfactory service quality from all type banks.
4.6
4.8
5
5.2
5.4
5.6
5.8
Reliability Responsive
ness
Empathy Tangibles Assurance Overall
Service
Quality
Perception
public 5.29787234 5.355319149 5.039893617 5.09929078 5.757446809 5.309964539
private 5.304029304 5.353846154 5.071428571 5.106227106 5.762637363 5.3196337
public private
29. 28
4.4 Analysis of Service- Quality Gaps
Identification of Gaps (Expectation vs. perception) in customer service quality
(parameter-wise gaps) Reliability, Assurance, Empathy, Responsiveness and
tangibility
Interpretation:
The above graph captured the SERVQUAL gap Score of overall gap dimensions. We observed
that gap score is different for Public Sector bank and for Private sector banks. For PSU’s
Tangibility gap is higher (1.1084) followed by Assurance (0.8867), Responsiveness gap
(0.8627) Empathy gap (0.8133) where else reliability gap is very much low. For Private
BANK’s Tangibility gap (1.1585) is higher followed by Empathy gap (1.0762) Reliability gap
(0.878) Responsiveness gap (0.8024). Another observation is that Assurance gap is not
there in service quality of private bank’s internet banking which implies high service quality
of service.
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
Reliability Responsiven
ess
Empathy Tangibles Assurance Overall
Service
Quality
Expectation
Public 0.1002 0.8627 0.8133 1.1084 0.8867 0.7543
Private 0.878 0.8024 1.0762 1.1585 -0.124 0.7582
SERVQUAL GAPS
Public Private
30. 29
0
1
2
3
4
5
6
7
Under 20 21-30 31-40 41-50 Above 50
Public 6.2 5.345744681 4.869444444 5.34137931 5.22027027
Private 5.261111111 5.343902439 5.240909091 5.275609756
Public Private
4.5 AGE WISE SERVICE QUALITY RATING
Interpretation:
The mean scores of service quality rating by Customers is more or less the same across all age
groups. There is no much difference in the perception of customers of various groups. However,
the satisfaction level of customers in the age group less than 20 year was highest.
31. 30
4.6 EDUCATIONAL QUALIFICATION WISE QUALITY RATING
Interpretation:
There significant variation observed in the rating given by customers belonging to various
educational groups. Education up to 12 has expressed high satisfaction may be because of the least
number.
5 5.1 5.2 5.3 5.4 5.5 5.6 5.7
Upto 12
Graduate
Post-graduate
Upto 12 Graduate Post-graduate
private 5.354945055 5.235616438
Public 5.7 5.34516129 5.341764706
32. 31
4.7 OCCUPATION WISE QUALITY RATING
Interpretation:
There is considerable variation observed in the ratings given by customers belonging to various
occupational groups. House wife who were the least number who responded least satisfaction of the
customer service quality of internet banking. Business class high ratings for private banking services, this
may probably reflect that private bank serving the business classes better with premier services. Other
tow classes mean scores are more r less similar.
4.7
4.8
4.9
5
5.1
5.2
5.3
5.4
Student Employee Businessman Housewife
Public 5.34516129 5.349456522 5.242 4.934782609
Private 5.27704918 5.354945055 5.4 5.05
33. 32
4.8 FAMILY ANNUAL INCOME QUALITY RATING
Interpretation:
A significant observation is that customers with income of more than Rs 50000 have expressed a
very high level of satisfaction to the service of public bank thann private bank. Banks probably
focus more on the high network individual and business classes. Where else income group of Rs
25000-50000 and below 25000 have expressed high rating to private banks.
Public
Private
5.15
5.2
5.25
5.3
5.35
5.4
5.45
Below Rs 25000
Rs25000-50000
Above 50000
Below Rs 25000 Rs25000-50000 Above 50000
Public 5.269402985 5.278205128 5.419607843
Private 5.34516129 5.349456522 5.34137931
34. 33
4.9 CUSTOMER SERVICE QUALITY RATING DISTRBUTED ACROSS BANK
UBI AXIS BANK SBI UCO Bank ICICI Bank Bank Of
Boroda
HDFC Vijaya
Bank
IDBI
Bank
Allahabad
Bank
5.8 5.34166666
7
5.2518
18182
5.125 4.96666666
7
4.3 4.9333333
33
5.3 5.82
5
5.75
Interpretation:
The above table clearly indicates the standardization of most of the services by banks in
India. All the banks gained satisfaction score of above 4 from its customer, however, the
average score is 5.49 and there are at least 6 banks which fall less than the average.
Surprisingly IDBI a public sector bank rated highest amongst all the banks under study.
0
1
2
3
4
5
6
CUSTOMER SERVICE QUALITY RATING
DISTRBUTED ACROSS BANK
35. 34
4.10 CUSTOMER SERVICE QUALITY BASED ON TYPE OF BANK
Interpretation:
The above Chart Clearly shows that Service quality of public sector bank got more rating
than private sectors which is 5.725 which is more than mean service quality rating.
Service Quality Rating
5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Public
Private
Overall
Public Private Overall
Service Quality Rating 5.725 5.267948718 5.496474359
Service Quality Rating
37. 36
CHAPTER 5:
FINDINGS
Among all the service quality of Internet banking parameter (reliability has been highly
expected by customers irrespective of the type of bank. The least rated parameter is
Tangibles. Ratings shows customer expects high satisfactory service quality from all type
banks. Another observation is that Private bank is rated high in all parameter.
Among all the service quality Parameter of Internet banking Assurance has been highly rated
by customers irrespective of the type of bank. The least rated parameter is Empathy. This
ratings shows customer Perceived satisfactory service quality from all type banks.
From the observation we found that SERVQUAL gap score is different for Public Sector bank
and for Private sector banks. For PSU’s Tangibility gap is higher (1.1084) followed by
Assurance (0.8867), Responsiveness gap (0.8627) Empathy gap (0.8133) where else
reliability gap is very much low. For Private BANK’s Tangibility gap (1.1585) is higher
followed by Empathy gap (1.0762) Reliability gap (0.878) Responsiveness gap (0.8024).
Another observation is that Assurance gap is not there in service quality of private bank’s
internet banking which implies high service quality of service.
The mean scores of service quality rating by Customers is more or less the same across all
age groups. There is no much difference in the perception of customers of various groups.
However, the satisfaction level of customers in the age group less than 20 year was highest.
There significant variation observed in the rating given by customers belonging to various
educational groups. Education up to 12 has expressed high satisfaction may be because of the
least number.
There is considerable variation observed in the ratings given by customers belonging to
various occupational groups. House wife who were the least number who responded least
satisfaction of the customer service quality of internet banking. Business class high ratings
for private banking services, this may probably reflect that private bank serving the business
classes better with premier services. Other tow classes mean scores are more or less similar.
There is considerable variation observed in the ratings given by customers belonging to
various occupational groups. House wife who were the least number who responded least
satisfaction of the customer service quality of internet banking. Business class high ratings
for private banking services, this may probably reflect that private bank serving the business
classes better with premier services. Other tow classes mean scores are more or less similar.
A significant observation is that customers with income of more than Rs 50000 have
expressed a very high level of satisfaction to the service of public bank than private bank.
Banks probably focus more on the high network individual and business classes. Where else
income group of Rs 25000-50000 and below 25000 have expressed high rating to private
banks.
The standardization of most of the services by banks in India. All the banks gained
satisfaction score of above 4 from its customer, however, the average score is 5.49 and there
are at least 6 banks which fall less than the average. Surprisingly IDBI a public sector bank
rated highest amongst all the banks under study.
Service quality of public sector bank got more rating than private sectors which is 5.725
which is more than mean service quality rating.
39. 38
CHAPTER 6:
RECOMMENDATION
Based on the analysis, customers have shown highest level of dissatisfaction or indifference
with aspects of the online banking services such as: prompt responses of the bank to
customers’ requests by email or other means; design of the bank’s website; quickly solution
of customers’ problems; the easiness to reach the bank by telephone and the easiness to find
what the customer needs on the website. In comparison, customers seemed to be most
satisfied with aspects of the service such as: well-known name and reputation of the bank;
accuracy of online transactions; feeling safe in transactions with the bank and the non-
misuse of personal information from the bank. What this means for practitioners is that they
have been quite successful in building well-known name and reputation probably through
well-organized advertising campaigns; they are also quite successful in providing accurate
and quick service and building confidence in customers.
Furthermore, what seems to be the case from the results of the analysis is that banks
perform relatively well on issues of their online services such as Service Performance and
Efficiency which are not specific for the Internet context but are typical for the traditional
settings as well. In comparison, their performance seems to be not that satisfactory as far as
an aspect of the online services such as Website Characteristics is concerned, which is highly
specific for the online space. The conclusion is that managers might undervalue this aspect
of the online services and concentrate their efforts on more traditional features of the
services. This implies lack of understanding of and experience with the specific features and
requirements of the online space. What is advisable for managers in this case is to gain
better understanding and pay more attention to the Internet specific features of their online
services, because they are very important part of the customer’s experience and
consequently of customer satisfaction with the online services. Because of the lack of human
interaction over the Internet, banks’ managers should not forget that the website is the
medium of interaction between the bank and its customers as far as the online banking
services are concerned, and as such it should represent the total quality efforts of the bank.
In addition, the Tangible Dimension should be also given higher concern from managers,
because it includes the way banks respond to their customers’ requests and the easiness
with which the bank is accessed by telephone when needed. Both these aspects might play
crucial role in the recovery part of the service delivery process.
41. 40
CHAPTER 7:
CONCLUSION
Taking into consideration the huge investment banks make in Internet infrastructure,
customer satisfaction and retention are turning into the crucial factors for success in online
banking meaning that the generation of positive customer value on the Internet requires the
establishment of long-term customer relationships. One of the way for achieving high
customer satisfaction and gaining the loyalty of customers is for banks to offer high quality
services. That is why being able to measure and evaluate the quality of their online banking
services is deemed important for banks in order for them to take action to correct those
features of their online services which customers don’t find that satisfactory.
Most customers have shown dissatisfaction or indifference with the following aspects of the
online banking services: prompt responses of the bank to customers’ requests; design of the
bank’s website; quickly solution of customers’ problems; the easiness to reach the bank by
telephone and the easiness to find what the customer needs on the website. Secondly, banks
seem to perform very well on the Service Performance and Efficiency dimensions of the
offered online services as those dimensions rank highest on satisfaction of customers.
Finally, the aspects consistently ranking highest on dissatisfaction are Communication and
Website Characteristics which should be considered from banks’ managers for immediate
amendment. Furthermore, what is interesting to be observed is that the aspects of the online
services on which banks rank higher in satisfaction of customers like Service Performance
and Efficiency are not specific for the Internet context, but are typical for the traditional
settings as well. In comparison, the aspect of the online services on which banks rank higher
in dissatisfaction like the Website Characteristics dimension is more Internets specific. A
reason for that might be that banks do not consider this feature important for the quality of
their online services and have concentrated their efforts on the other aspects of the online
services. Nevertheless, because of the lack of human interaction in the online space, it should
not be forgotten that the website is the “moment of truth” between customers and their
banks as far as online services are concerned, and as such the website should be consistent
with the total quality efforts of the service provider, meaning that a high quality website is
an important aspect of the offered online banking services.
42. 41
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45. 44
ANNEXURE
QUESTIONNAIRE
Sir/Madam
I am student of MBA 4th
semester from Assam University, Silchar. This Questionnaire is prepared
for the partial fulfilment of my on-going Dissertation project. This survey is conducted to study service
quality of internet banking in Silchar. The information collected will be kept confidential and will be just
used to serve the academic purpose. So, kindly spare few minutes to fill up the questionnaire. Based on
your experiences as a consumer of online banking services, please provide information on how you
perceive the quality of the online banking services you use in comparison to your expectations.
If you do not use online banking services, please do not fill out the questionnaire
Thanking You
Sandip Dey
(A) General information
(i) Customer Name: ______________________
(ii) Bank Name: _________________________
(iii) Bank Type Private Public
(iv) Type of Account Savings Current Salary
(v) Gender Male Female
(vi) Age (In Years) Under 20 21 – 30 31 – 40
41 – 50 Above 50
(vii) Qualification Upto 12th
Graduate Post Graduate
(viii)Internet usage Rate Always often seldom
(ix) Income (Monthly) Below Rs. 25000 Rs. 25000 – Rs. 50000 Above 50000
(x) Profession Student Employee Businessman Housewife
(xi) Frequency of Internet Banking Transactions:
PART (B) Please tick ( √ ) 7,6,5, 4, 3, 2, 1 against the appropriate box where;
7=Extremely satisfied, 6=very satisfied,5=somewhat satisfied,4=neither satisfied nor dissatisfied
,3=somewhat dissatisfied,2=very dissatisfied,1=extremely dissatisfied.
Sl.no Questions 1 2 3 4 5 6 7
46. 45
1 I am able to get on the site quickly of an Excellent Bank
2 When the Excellent Bank promises to do something by a certain time, it
does so
3 The site of an Excellent Bank is always available for business
4 The Excellent Bank does not misuse my personal information
5 I have confidence in the Excellent Bank’s service
6 The website design is aesthetically attractive of an Excellent Bank
7 The Excellent Bank gives prompt responses to my requests by e-mail or
other means
8 The Excellent Bank is easily accessible by telephone
9 It is easy to find what I need on the website of an Excellent Bank
10 My online transactions with the Excellent Bank are always accurate
11 The site of an Excellent Bank launches and runs right away
12 I feel safe in my transactions with the Excellent Bank
13 The bank’s Excellent Bank is well-known and has good reputation
14 The Excellent Bank quickly resolves problems I encounter with my online
transactions
15 The site of an Excellent Bank has customer service representatives
available online
16 It is quick to complete a transaction through the Excellent Bank’s
website
17 The service delivered through the Excellent Bank’s website is quick
18 Using the Excellent Bank’s website does not require a lot of effort
19 The organization and structure of online content is easy to follow of an
Excellent Bank
20 The Excellent Bank’s site makes accurate promises about the services
being delivered
Part (C) Please tick ( √ ) 7,6,5, 4, 3, 2, 1 against the appropriate box where;
7=Extremely satisfied, 6=very satisfied,5=somewhat satisfied,4=neither satisfied nor dissatisfied
,3=somewhat dissatisfied,2=very dissatisfied,1=extremely dissatisfied.
47. 46
Sl.no Questions 1 2 3 4 5 6 7
1 I am able to get on the site quickly of my Bank
2 When the my Bank promises to do something by a certain time, it does
so
3 The site is always available for business
4 The my Bank does not misuse my personal information
5 I have confidence in the my Bank’s service
6 The website design is aesthetically attractive of my Bank
7 My Bank gives prompt responses to my requests by e-mail or other
means
8 My Bank is easily accessible by telephone
9 It is easy to find what I need on the website of my Bank
10 My online transactions with my Bank are always accurate
11 This site launches and runs right away
12 I feel safe in my transactions with my Bank.
13 My Bank’s name is well-known and has good reputation
14 My Bank quickly resolves problems I encounter with my online
transactions
15 The site of my Bank has customer service representatives available
online
16 It is quick to complete a transaction through the bank’s website
17 The service delivered through the my Bank’s website is quick
18 Using my Bank website does not require a lot of effort
19 The organization and structure of online content is easy to follow
20 My Bank’s site makes accurate promises about the services being
delivered
----------------------Thank You for Your Time----------------------