CUSTOMER ADOPTION OF INTERNET BANKING SERVICES IN VELLORE DISTRICT

CUSTOMER ADOPTION OF INTERNET BANKING SERVICES IN VELLORE DISTRICT *N.Satheesh Kumar, Research Scholar, Government Arts College, Udumalpet **Dr. N. Maliqjan, Research Supervisor, Government Arts College, Udumalpet ABSTRACT The outcome of Information and Communication Technology has made many changes in the services offered by the banks in recent years, banks have changed from manually intensive industry to technologically dependent. Banks and financial institutions, in general, have established an Internet presence with various objectives. "E-banking will soon mature into an offensive business strategy rather than a passive must-have. Objectives of the study, To study the customers socio-economic status in Vellore District, To find out the relationship between factors influencing personal variables and e-banking services and To analyse relationship between personal variables and satisfaction level of the customer. Methodology of the study, primary data as well as secondary data has been used in this study. Vellore district is sampling unit. 500 respondents are using in this study.simple random sampling technique has been adopted in this study. Suggested in this study, The bankers have to take a comprehensive view of their delivery channels. Integrated Delivery channels could further enhance successful adoption of technology like e-mail, i-banking, ATMs etc. Advertising the products and explaining the products elaborately will help in attracting more and more people.conclude in this study, Banks have usually been in the forefront of harnessing technology to improve their products, services and effectiveness. Over a protracted time, they have been using electronic and telecommunication networks for delivering a wide range of value added products and services. INTRODUCTION The outcome of Information and Communication Technology has made many changes in the services offered by the banks in recent years, banks have changed from manually intensive industry to technologically dependent. Alternatives to traditional banking have attracted increasing attention towards internet usage and offer new services to its customers. Internet banking allows all customers to perform banking activities through computers from any-where, and provides continuous control over their accounts. According to Arunachalam and Sivasubramanian (2007), Internet banking is where a customer can access his or her bank account via the Internet using personal computer (PC) or mobile phone and web-browser. According to Khan (2007), Internet banking includes the system that enables financial institution customers, individuals or businesses, access accounts, transact business, or obtain information on financial products and services on public or private network including Internet. Internet banking is the act of conducting financial intermediation on the Internet (Kim et al., 2006). It is that process whereby the customer is able to access, control and use his/her account over the Internet. Since the mid-1990s, there has been a fundamental shift in banking delivery channels toward using self-service channels such as electronic banking, mainly the use of automated teller machines (ATMs) and internet banking. Banks and financial institutions, in general, have established an Internet presence with various objectives. "E-banking will soon mature into an offensive business strategy rather than a passive must-have " [Hirst 1999]. Ever since the deregulations and opened economic policy, banking sector has undergone a great metamorphosis. The overall performances and productivity has spiraled upwards with major attention and to improve customer services. The developments in Information and Communication Technologies (ICT) are increasing the way in which the services are offered to the customers. Advanced technology is essential to achieve competitive edge. Electronic Banking Services or E-Banking is a new dimension through which banks have enabled various services to its customers. www.apjor.com Page 23

REVIEW OF LITERATURE Chou and Chou (2000) identified five basic services associated with E-banking: view account balances and transaction histories; paying bills; transferring funds between accounts; requesting credit card advances; and ordering checks for more faster services that can be provide by domestic and foreign bank. Black et al. (2001) studied to know the customer's perceptions about internet banking and the drivers that force consumers. How consumers have accepted internet banking and how to improve the usage rate were the focus of research area in this study. Qualitative exploratory research using questionnaire was applied. 500 respondents were selected for study after initial screening. The study revealed that education, gender, income plays an important role in usage of internet banking. The study confirms the conceptual framework stating that if skills can be upgraded there will be greater will to use internet banking by consumers. Gerrard and Cunningham (2003) also identify other factors of paramount importance in ensuring the success of e-banking, i.e. the ability of an innovation to meet users' needs using different feature availability on the web site. For instance, the provision of interactive loan calculators, exchange rate converters, and mortgage calculators on the web sites draw the attention of both users and nonusers into the bank's web site OBJECTIVES OF THE STUDY To study the customers socio-economic status in Vellore District To find out the relationship between factors influencing personal variables and e-banking services To analyse relationship between personal variables and satisfaction level of the customer. METHODOLOGY The study mainly focuses on the customers satisfaction towards electronic banking services provided by nationalized banks and private sector banks in Vellore District. Data Collection Primary data was collected using a structured questionnaire. Sampling Simple random sampling method has been used to collect the required data. Sample Size: 500 customers of the Public and Private sector banks who are utilizing internet banking services. Secondary data were collected from books, journals, and web pages. Period of study: the study was undertaken during May-July 2016. LIMITATIONS OF THE STUDY This study deals with the perception and satisfaction of the consumers of Vellore district, customers response are biased, this is because, they do not understand the importance of the research, hence their answers are always just-on-the-go, therefore finds are based on the opinions of the respondents, due to time and resource the research was conducted with a small sample size 500. ANALYSIS AND INTERPRETATION SOCIO DEMOGRPAHIC STATUS OF THE RESPONDENTS Table I S.No Particulars Details of Particular Respondents Percentage 21 30 48 9.6 1 Age 2 Gender 3 Qualification 4 Employment 5 Monthly Income 31 40 128 25.6 41 50 196 39.2 51 60 112 22.4 Above 60 16 3.2 Male 228 45.6 Female 272 54.4 SSLC 0 0 HSC 68 13.6 Degree 368 73.6 Diploma 64 12.8 Student 16 3.2 Services 312 62.4 Agriculture 44 8.8 Self Employed 128 25.6 Upto 15,000 40 8 15,001 30,000 260 52 30,001 45,000 152 30.4 www.apjor.com Page 24

45,001 60,000 48 9.6 6 Type of Bank 7 Customer of Bank Above 60,001 0 0 Public Bank 304 60.8 Private Bank 36 7.2 Both 160 32 SBI 196 15.31 INDIAN BANK 284 22.19 INDIAN OVERSEA BANK 108 8.44 SYNDICATE BANK 52 4.06 CORPORATION BANK 60 4.69 VIJAYA BANK 32 2.5 BANK OF BARODA 44 3.44 CANARA BANK 96 7.5 CENTRAL BANK OF INDIA 20 1.56 ICICI 56 4.38 AXIS BANK 68 5.31 DHANALAKSHMI BANK 60 4.69 TNMB 72 5.63 HDFC 52 4.06 IDBI 32 2.5 KVB 28 2.19 LVB 20 1.56 SOURCE: PRIMARY DATA. Above the table shows that, 39.2 percent respondents are belong to the age group of 41-50.54.4 percent of the respondents are female.73.6 percent of the respondents are under graduation.62.4 percent of the respondents are services.52 percent of the are belong to the monthly income of Rs.15001-30,000.60.8 percent of the respondents are public sector banks.22.19 percent of the respondents are Indian Overseas Bank. Table II AGE AND FACTORS INFLUENCING THE ADOPTION OF INTERNET BANKING AGE 21-30 31-40 41-50 51-60 ABOVE 60 Source: Primary Data Factors Influencing the adoption of Internet Banking disagree Nutural Agree Disagree Agree 0 8 20 16 4 48 0.0% 16.7% 41.7% 33.3% 8.3% 100.0% 4 8 60 36 20 128 3.1% 6.3% 46.9% 28.1% 15.6% 100.0% 12 28 68 60 28 196 6.1% 14.3% 34.7% 30.6% 14.3% 100.0% 4 4 40 48 16 112 3.6% 3.6% 35.7% 42.9% 14.3% 100.0% 0 4 4 8 0 16 0.0% 25.0% 25.0% 50.0% 0.0% 100.0% 20 52 192 168 68 500 4.0% 10.4% 38.4% 33.6% 13.6% 100.0% www.apjor.com Page 25

CHISQUARE TEST II-A Pearson Chi Calculated Chi DF p.value S/NS Remarks squre Squre Value Age 33.778 16.006** S Rejected It has been Divulged from the chi squre test that the p-value (.006) has been less than 0.01 and the result has significance at 1% level. Hence the null hypothesis (Ho) has been rejected and the allternative hyposthesis (H1) has been accepted. There is relationship between age and factors influencing the adoption of internet banking. Table III QUALIFICATION AND FACTORS INFLUENCING THE ADOPTION OF INTERNET BANKING. QUALIFICATION Factors Influencing the adoption of Internet Banking Disagree Nutural Agree Disagree Agree HSC 0 8 20 28 12 68 0.0% 11.8% 29.4% 41.2% 17.6% 100.0% GRADUATE 20 32 156 108 52 368 5.4% 8.7% 42.4% 29.3% 14.1% 100.0% DIPLOMA 0 12 16 32 4 64 0.0% 18.8% 25.0% 50.0% 6.3% 100.0% 20 52 192 168 68 500 4.0% 10.4% 38.4% 33.6% 13.6% 100.0% In order to find the relationship between educational qualification and level of factors influencing the adoption internet banking. A chi-square test was applied to test the hypothesis given below. Ho: There is no relationship between educational qualification and level of factors influencing the adoption internet banking. H1: There is relationship between educational qualification and level of factors influencing the adoption internet banking. CHISQUARE TEST III-A Pearson Chi Calculated Chi DF p.value S/NS Remarks squre Squre Value Educational 30.266 12.000** S rejected qualification ** - significant at 1% level It has been from the chi square test that the p-value (.00) has been less than 0.01 and the result has significance at 1 percent level. Hence the null hypothesis (Ho) has been rejected and the alternativre hypothesis (H1) has been accepted from the analysis it has been concluded that there is a relationship between education qualification and level of factors influencing the adoption internet banking. www.apjor.com Page 26

Table IV TYPE OF BANK AND FACTORS INFLUENCING THE ADOPTION OF INTERNET BANKING TYPE OF BANK PUBLIC SECTOR BANK PRIVATE BANK BOTH SECTOR Factors Influencing the adoption of Internet Banking Disagree disagree Nutural Agree Agree 12 32 156 73 31 304 3.9% 10.5% 51.3% 24.0% 10.2% 100.0% 4 0 12 12 8 36 11.1% 0.0% 33.3% 33.3% 22.2% 100.0% 4 20 24 83 29 160 2.5% 12.5% 15.0% 51.9% 18.1% 100.0% 20 52 192 168 68 500 4.0% 10.4% 38.4% 33.6% 13.6% 100.0% In order to find the relationship between TYPE OF BANK and level of factors influencing the adoption internet banking. A chisquare test was applied to test the hypothesis given below. Ho: There is no relationship between TYPE OF BANK and level of factors influencing the adoption internet banking. H1: There is relationship between TYPE OF BANK and level of factors influencing the adoption internet banking. CHISQUARE TEST IV-A Pearson Chi squre Calculated Chi Squre Value DF p.value S/NS Remarks TYPE OF 77.327 8.000** S rejected BANK ** - significant at 1% level It is evident from the chi square test that the p-value (.000) has been less than 0.01 and the result has significance at 1 percent level. Hence the null hypothesis (Ho) has been Rejected and the alternativre hypothesis (H1) has been accepted from the analysis it is concluded that there is a relationship between TYPE OF BANK and level of factors influencing the adoption internet banking. Table V PURPOSE OF INTERNET BANKING BY THE RESPONDENTS S.No Types of Internet Banking Sum Average Mean Rank 1 Check balance 2152 4.30 1 2 View account 1956 3.91 2 3 Fund transfer 1828 3.66 3 4 Mobile recharging 1696 3.39 11 5 Pay tax 1538 3.08 16 6 Booking for train and tickets 1737 3.47 10 7 Payment of utility bills 1744 3.49 7 8 Collect information 1738 3.48 9 9 Apply online for deposit 1684 3.37 12 10 Request for DD 1740 3.48 8 11 Request for ATM 1796 3.59 5 12 Request for cheques books 1760 3.52 6 13 enquiry 1676 3.35 13 14 TDS enquiry 1684 3.37 12 15 Request for Pre- closer 1620 3.24 14 16 Online shopping 1808 3.62 4 17 Religious offerings 1596 3.19 15 Source: Primary Data www.apjor.com Page 27

Above the table shows that, I poisition occupied that,check balance, follwed by view account, fund transfer etc.last position occcupied pay tax. Table VI DEMOGRAPHIC VARIABLES AND LEVEL OF SATISFACTION ANOVA Sum of Mean p. Sig Squares df Square F VALUE AGE Between Groups 12.783 4 3.196 3.363.010** S Within Groups 470.417 495.950 483.200 499 GENDER Between Groups 2.655 4.664 2.707.030* S Within Groups 121.377 495.245 124.032 499 QUALIFICATION Between Groups 5.103 4 1.276 4.978.001** S EMPLOYMENT STATUS Within Groups 126.865 495.256 131.968 499 Between Groups.227 4.057.068.991 NS Within Groups 410.461 495.829 410.688 499 MONTHLY INCOME Between Groups 15.425 4 3.856 6.768.000** S Within Groups 282.047 495.570 297.472 499 TYPE OF BANK Between Groups 9.770 4 2.443 2.929.021* S Within Groups 412.758 495.834 422.528 499 *5% Significant level, **1% significant level NS- Not Significant Above the tabel shows that, Age, gender, qualification, monthly income and type of bank are P value is less than 0.05 percent level. Age, gender, qualification, monthly income and type of bank are significant at 1per cent and 5 percent level. Hence there is significant difference of level of satisfaction aond Age, gender, qualification, monthly income and type of bank.employment status not significant. SUGGESTIONS 1.In today s competitive environment, Banks will have to strive to attract and retain customers by introducing innovative products, enhancing the quality of customer service and marketing a variety of products through diverse channels targeted at specific customer groups. They have to meet the customer expectations on service and various Value-added services provided. 2.The bankers have to take a comprehensive view of their delivery channels. Integrated Delivery channels could further enhance successful adoption of technology like e-mail, i-banking, ATMs etc. Advertising the products and explaining the products elaborately will help in attracting more and more people. They must be gradually shifted from the concept of Brick Banking to Click Banking.A system should be developed in such a way that a customer can use his ATM cards and ATM PIN for authentication in a transaction through net. The PIN issued to a person must be unique so that he is specifically identified by it and can do all transactions with it. CONCLUSION Electronic banking provides number of benefits to the customers, in the form of service choice, cost effectiveness, convenience, control, time saving, accessibility and efficiency. E-banking is based on four factors they are: Strategic objectives for e-banking, scope, scale, and complexity of equipment, systems and activities, Technology expertise, security and internal control requirements e- banking systems rely on a number of common components or processes. The following list includes many of the potential components and processes seen in a typical institution: Website design and hosting, Firewall configuration and management, Network administration, Security management, Internet banking server, E-commerce applications (e.g. bill payment, lending, brokerage), www.apjor.com Page 28

Internal network servers, Core processing system, Programming support, Automated decision support systems. These components work together to deliver e-banking services. Each component represents a control point to consider. Banks have usually been in the forefront of harnessing technology to improve their products, services and effectiveness. Over a protracted time, they have been using electronic and telecommunication networks for delivering a wide range of value added products and services.. Reference 1. Ahasanul Haque et al (2009). Issues of E-Banking Transaction: An Empirical Investigation on Malaysian Customers Perception. Journal of applied Sciences. (Retrived from www.ebsco.com on 20 March 2009) 2. Beer Stan (2006). Customers Preference on Internet Banking, Survey (Retrieved from http://www.itwire.com/ content/view/4570/53 on 20 March 2009) 3. Brodie, H Winklhofer et. al (2007). Is e-marketing Coming of Age?An Examination of the Penetration of e-marketing and Firm Performance. J. Innterac. Market, 21:2-21 4. Christopher, G. C.Mike, L. Visit and W.Amy (2006). A Logit Analysis of Electronic Banking in New Zealand. Int. J. Bank Market, 24:360-383 5. Cooper, R.G. (1997). Examining Some Myths About New Product Winners in Katz, R. (Eds),The Human Side of Managing Technological Innovation, Oxford, pp.550-60. (Retrieved from www.ebsco.com) 6. Gonzalez, M.E et al (2008). An Alternative Approach in Service Quality: An E-Banking Case Study. Quality Manage, 15: 41-48. 7. Gregory D. Williamson (2006). Enhanced Authentication In Online Banking, Journal of Economic Crime Management, Volume 4, Issue 2, http://www.utica.edu/academic/institutes/ecii/publications/articles/ 51D6D996-90F2-F468- AC09C4E8071575AE.pdf on 18 March 2009 8. Hiltunen, M., Laukka, M., & Luomala, J. (2002). Mobile User Experience. Helsinki: IT Press 9. Joseph, M., McClure, C. and Joseph, B.(1999). Service Quality in Banking Sector: The Impact of Technology on Service Delivery. International Journal of Bank Marketing, 17( 4):182 191. www.apjor.com Page 29