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.
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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
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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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