Customer Satisfaction of E-Banking Services In Public Sector Banks, Chennai

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1 Customer Satisfaction of E-Banking Services In Public Sector Banks, Chennai A.Devi Research Scholar, Bharathiar University, Coimbatore & Dr.G.P.Raman Research Guide and Supervisor, Bharathiar University and Controller, SCSVMV University, Kanchipuram Abstract The Purpose of this paper is to explore the relationship between demographic profile and the customer satisfaction of e-banking services in selective public sector banks in Chennai city with reference to Age and Income of the customer. A purposive sampling technique was employed to recruit 192 customers representing the desired range of demographic characteristics. This research showed that there is a relationship between age and income of the customers and the customer satisfaction of e- banking services in Public sector banks in Chennai. It is suggested bankers to design the program according to the different age and income group of customers in order to educate them about e-banking services Keywords: E-banking, Customer satisfaction, Public Sector banks, Age and Income 1. Introduction India will not have a healthy economy in the absence of effective banking system. Indian banking system must be able to face the challenges created by the technical advancement and some other factors. Indian banking system has made some remarkable achievements to its credit. The banking has even reached the remote places to the country. This may be counted as one of the main process of India toward its growth. In rural areas and even in some urban cities, the customers were made to wait in large queue even for withdrawing their own money. Because of the changes that occurred in the banking system which the ITC made, the customers suddenly felt comfortable and thus saved a lot a time. Currently Indian banking system is contributing to the growth in a short span of time with their affordable technologies for transactions E-banking E-banking is the term that signifies and encompasses the entire sphere of technology initiatives that have taken place in the banking industry. E-banking is a generic term making use of electronic channels through telephone, mobile phones, internet etc. for delivery of banking services and products. The concept and scope of e-banking is still in the transitional stage. E-banking has broken the barriers of branch banking. Traditional banks offer many services to their customers, including accepting customer s money deposits, providing various banking services to customers, and making loans to individuals and companies. E-banking uses the internet to deliver traditional banking services to their customers, such as opening accounts, transferring funds, and electronic bill payment. The range of e- banking services is likely to increase in the future Public Sector Banks in India Public sector banks are the oldest set of commercial banks in India. The first Public sector banks in India dates back to the year In that year, the bank of Hindustan commenced operation. From that year till the early 1990 s public sector banks were the leaders in the banking sector of India. In the early 1990 s due to the opening up of the trade to foreign countries and companies, the flow of private sector rapidly increased. They started to attract the customers towards them and they offered more customer oriented services than the public sector banks. In 1997, the largest private sector bank in India ICICI provided the customers with internet banking facility making banking becomes more comfortable and easy to customers. With the entry of private sector banks there was a stiff > RJCBS: Volume: 04, Number: 11, September-2015 Page 22

2 competition among banking industries. Though the private sector banks is up front technically, public sector banks hold the largest market share, which shows that the public sector banks is satisfying the customers through their secured services at economical cost. They continuously struggle and develop new strategies to differentiate themselves from their competitors by providing their customers with high quality banking services and high technology innovative products Demographic Factors: An individual s demographic phases like age, income, education qualification, etc may influence the level of customer s satisfaction on products and services. This made an attempt to identify how the service is perceived and utilized by potential consumers and how their personal characteristics affect their level of satisfaction. This paper aims to analyze whether there is any difference in satisfaction level among different age and income group in utilizing e-banking services. And also the paper made an attempt to analyze whether there is any difference in usage pattern of e-banking services of different age and income group of customers. E-banking has been introduced in India in The present active account holders in public sector banks have opened their account at the bank may be between 1940 and Hence there will be a different perception about e-banking among customers of different age group. There are different income group people as customers of public sector banks. Most of the government accounts and the leading manufacturing companies accounts are maintained in Public sector banks. Hence the employees with different income groups are banking with public sector banks. Most of the agriculturist and the small traders are also having bank accounts in public sector banks Customer satisfaction: Faraz (2005) stated that customer satisfaction is the situation when customer expectations have been fulfilled to the fullest capacity when using the product or service. The capacity to fulfill customer expectation consequently brings about strong loyalty to the product or services of an organization. It is also necessary for banks to strive hard to return the existing customers in the face of attracting new customers. The number of customers served determines the banks success. Banks are the major financial institution in the country that provides various services to customers. The major service rendered by banks include, withdrawal of money through Cards, ATM, transfer of money through internet banking. Being in a fiercely competitive industry, the ability of banks to differentiate themselves on the basis of price is limited. Technology has introduced new ways of delivering banking services to the customer, such as ATM and i-banking. Hence, it is imperative for banks to align their strategies in response to changing customer s needs and development in technology. Customer Satisfaction is very essential for every service to survive in the market. Customer Satisfaction could help the business by placing future demand to the company. Customer Satisfaction is given by passing the word of mouth to other potential customers. Customer Satisfaction is very important for the company to take care of the customers and to satisfy them. II. Objectives of the study The study has been conducted on behalf of public sector banks. The main objective of this paper is to study the difference in level of customer satisfaction on e-banking services offered by public sector banks and concentrates on demographic factors such as age and income. However, the other objectives of this study are : 1. To study the customers profile and e-banking services of public sector banks in Chennai City. 2. To analyze and interpret the various factors determining the level of satisfaction of customers on e- banking services offered by public sector banks in Chennai city III. Research Methodology and Design It is a Descriptive research which comprises of both primary and secondary data. Primary data were collected through well structured questionnaire. Secondary data were collected from journals, magazines published from to tome and internet. Simple random technique tools have been used for the > RJCBS: Volume: 04, Number: 11, September-2015 Page 23

3 samples which were collected at random. All the respondents were customers were users of e-banking services of various public sector banks. The hypotheses formulated and structured for the study are: H1: There is no influence of Age on the level of satisfaction of e-banking services in Public sector banks. H2: There is no influence of Income on the level of satisfaction of e-banking services in Public sector banks. IV. Data Analysis & Interpretation In this section the researcher intended to relate the demographic profile of e-banking customers and their satisfaction level. In order to describe, the demographic profile of customers, a simple percentage analysis has been applied on the variables such as age, gender, marital status, educational qualification, occupation and income of the customers. Table 1: Frequency Table of age of respondents Below 20 yrs yrs yrs Above 40 yrs Table 2: Frequency Table of gender of respondents Male Female Table 3: Frequency Table of marital status of respondents Single Married Table 4: Frequency Table of Education Table 4: Qualification Below 12 th Std UG Degree PG Degree Professional Table 5: Frequency Table of Occupation Govt. Employee Private Employee Business Professionals > RJCBS: Volume: 04, Number: 11, September-2015 Page 24

4 Table 6: Frequency Table of Monthly Income Less than Rs Rs Rs Above Rs. 60, From Table 1, it is found that the maximum number of customer of e-banking hail from the age group of 21 to 30 year (65.1%). The customer age grouped between 30 and 40 years is 19.8%. It is noted that 9.9% of the respondents are aged above 40 years, whereas only 5.2% of the respondents of the age group below 20 years are utilizing e-banking services. The finding shows that 62.5% of the e-banking customers are male and the remaining 37.5% of them are female. As far as the Marital status, almost equal portion of respondents are single and married. 54.7% of the respondents are single and 45.3% of them are married. In terms of educational qualification, the maximum users are having UG degree (67.2%), 17.2% are PG degree holders, 8.9% of them are just with schooling. Only 6.8% of the respondents are professionals. While considering their occupation, the maximum i.e.75% of the respondents are private employees, followed by government employee are of 13%. The respondent customers of e-banking services who are doing own business and practicing their professions are 17.2% and 6.8% respectively. On measuring the respondents in terms of their monthly income, 51% of them are earning less than Rs. 20,000 p.m., 40.1% of them are in the income group of Rs. 20,000 to Rs.40,000 p.m.only 6.3% and 2.6% of the respondents are in the income group of Rs. 40,000 60,000 p.m and above Rs. 60,000 p.m. respectively Testing of hypothesis 1 There is no significant difference between the Age and the level of customer satisfaction of e-banking services Table 7 - ANOVA between Age group and customers satisfaction of e-banking services Option on selection of Language available at ATM Getting error free mini statement at ATM Asking of PIN for every transaction at ATM Auto log out of each transaction at ATM Online shopping through i- banking Sum of Squares Mean Square F Sig. df Total Total Total Total Total > RJCBS: Volume: 04, Number: 11, September-2015 Page 25

5 Online payment through Debit/Credit card Process of stop accessing debit/credit if it stolen Communication with regard to RTGS/NEFT SMS alert for i-banking transaction Provision of OTP for Debit/Credit card transaction on mobile Total Total Total Total Total From Table 7, it is found that the following variable have significant impact on respective e-banking service. Age influences on the selection of language (F= 4.042, p= 0.08), Getting error free statement (F=3.419, p = 0.018), Asking PIN for each transaction (F=5.960, p=0.001) and Auto logout (F= p = 0.007) are statistically significant at 5% level on the ATM services. Online shopping through i- banking (F=4.580, p=0.004) is statistically significant at 5% level on the Internet banking services. Online payment through Debit/Credit card (F=2.706, p=0.047), Process of stop the accession of card (F =3.693 p=0.013), Communication with regard to RTGS/NEFT (F=2.972, p=0.034 ), SMS alert for i-banking transaction (F=2.730, p= 0.45 ), Provision of OTP for Debit/Credit card transaction on mobile (F= 3.262, p= 0.23 ) are statistically significant at 5% level. This indicates that age is a powerful demographic factor affecting the level of ATM usages. Hence, the hypothesis is rejected. It is found that there is a significant difference between the Age and the level of customer satisfaction of e- banking services. Testing of hypothesis 2 There is no significant difference between the income and the level of satisfaction of customers towards e-banking services Table 8- ANOVA between Income towards customers satisfaction of e-banking Sum of Squares Mean Square F Sig. df Selection of Language at ATM Total Provision of error free mini statement at ATM Total Cash deposit at ATM machine > RJCBS: Volume: 04, Number: 11, September-2015 Page 26

6 Asking PIN for every transaction Regular updates of Web page content Provision of necessary information at Bank web page On line payment Total Total Total Total Total Provision of navigation at Web site Total Provision of security warning message at Website Total Multiple log in for i-banking Total Free from unauthorized access Total Cardholder photo & sign on Debit/Credit card Total Online shopping using Debit/Credit card > RJCBS: Volume: 04, Number: 11, September-2015 Page 27

7 Payment at POS E-payment using debit/credit card Knowledge on using m-banking Getting balance at any time on m- banking Free from malfunction of m- banking services SMS alert for i-banking services Provision of OTP for Debit/Credit card Total Total Total Total Total Total Total Total From Table 8, it is found that the following variable have significant impact on respective e-banking service. The income of the customers influence on the regular updates of web page content (F=5.353, p=0.001), provision of necessary information at bank web page (F=4.862, p=0.003), Online payment (F=5.242, p=0.002), Provision of navigation at web site (F=3.185, p=0.025), Provision of security warning message at website (F=4.185, p=0.007), Multiple log in for i-banking (F=4.644, p=0.004), Free from unauthorized access (F=3.675, p=0.013) are statistically significant at 5% level on Internet banking services. It has been found that income influence on the cardholder photo and sign on Debit/Credit card (F=2.807, p=0.041), Online shopping using Debit/Credit card (F=2.938, p=0.035), e-payment through Debit/credit card (F=2.884, p=0.037), Payment at POS (F=5.479, p=0.001) are statistically significant at 5% level on Debit/Credit services. It has been found income influence on knowledge on using m-banking (F=5.189, p=0.002), getting balance at any time on m-banking (F=3.098, p=0.028), free from malfunction of m-banking (F3.303, p=0.022). SMS alert for i-banking > RJCBS: Volume: 04, Number: 11, September-2015 Page 28

8 transactions (F=3.341, p=0.021), Provision of OTP for Debit/Credit card (F=6.982, p=.000) are statistically significant at 5% level on mobile banking services. Hence, the hypothesis is rejected. It is found that there is no significant difference between the income and the level of satisfaction of customers towards e-banking services such as ATM, Internet banking, Debit/Credit card usages, RTGS/NEFT facilities and mobile banking. V. FINDINGS, SUGGESTIONS AND CONCLUSION Findings: Public sector banks which had been taken for study are almost providing all the e-banking services. Most of the respondents have knowledge of all the e-banking services provided by the banks. ATM is the frequently used e-banking services among others. It has been found the Age and Income are the demographic factors which strongly influence the level of customers satisfaction towards selective e-banking services such as ATM, Debit, Credit card, Internet banking, RTGS, NEFT and mobile banking. Compared to Age, income influences more on satisfaction level. There is a significant difference among age and the level of e-banking customer satisfaction There is a significant difference among income and the level of e-banking customer satisfaction. Most of the customers are satisfied with the selective e-banking services at different degree of satisfaction, except on few variables. Suggestion: Banks have evolved themselves in problem solving operation, and this must be communicated to the customers regularly to improve their satisfaction level. Different age group customers have different level of satisfaction, hence the bankers may introduce the schemes according to their needs. The product and services of e-channels need to be designed according to different income group people. Awareness regarding the e-services rendered by the nationalized banks should be created in order to attract more customers. Long queues may be avoided, by informing customers that e-service enables quick transaction rather than the bank branch counter services. The banks may expand the core banking solutions, clearing services, facility of debit and credit cards to rural branches of the banks also. Lack of customer education and awareness about the features and benefits of e-payment may be addressed by a special arrangement of systematic educational campaign for the clients. The banks may have more tie-up with other industries, organization and institutions, to make online payment mandatory. Banks may extend e-banking services suitable for different age and income group customers. Conclusion: In the electronic era, it becomes mandatory to e-services. Customers may have to depend on third persons assistance due to lack of knowledge of e-banking services. To avoid inter mediators and agents on availing these e-services, the banks may take an effort to educate the customers and to make the accessibility a simple one. It is suggested that the efforts of banks may be different for various age groups and income group of customers. VI. Reference 1. Vijay M.Kumbhar (2011), Customers' Demographic Profile and Satisfaction in E-Banking Services: A Study of Indian Banks, International Journal for Business, Strategy and Management 01/2011; 1. > RJCBS: Volume: 04, Number: 11, September-2015 Page 29

9 2. Fozia (2013),A Comparative Study of Customer Perception toward E-banking Services Provided By Selected Private & Public Sector Bank in India, International Journal of Scientific and Research Publications, Volume 3, Issue 9, September ISSN , pp Kavitha,S INFLUENCE OF DEMOGRAPHIC VARIABLES ON CUSTOMER SATISFACTION REGARDING E-BANKING: AN EMPIRICAL INVESTIGATION, Issues in Information Systems, Volume XII, No. 1, pp , 2011, pp MamillaRajasekhar, CuddapahAnit, and NamaMadhavi, Impact of Service Quality of SBI s Internet Banking on its Customers in Rural India, 3rd International Conference on Advances in Engineering Sciences & Applied Mathematics (ICAESAM 2015) March 23-24, 2015 London (UK), pp Saroj K. Datta, Acceptance of E-banking among Adult Customers: An Empirical Investigation in India, Journal of Internet Banking and Commerce, August 2010, vol. 15, no.2, pp DoddaRaju,M.E and NarayanaReddy T, Customer Perception Study-Towards EBanking Services Of Public and Private Sector Banks - With Special Reference to Chittor District of Andra Pradesh, IFSMRC AIJRM Volume-02 Issue-03 Jan-Jun-2014, ISSN: , 7. Faraz, J. (2005). Customer Satisfaction at a Public Sector Bank, Karachi. Market Forces, 1(1). Retrieved from > RJCBS: Volume: 04, Number: 11, September-2015 Page 30