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Customer Satisfaction on Online Banking Services


Customer Satisfaction on Online Banking Services: A Case Study of


Submitted in partial fulfillment of the requirement for the

MBA Innovative Management
In collaboration with Coventry University
and the British Institute of Technology & E-commerce

August 2010

Customer Satisfaction on Online Banking Services

Dissertation Statement of Originality

Statement of Originality
Except for those parts in which it is explicitly stated to the contrary, this work is
my own. It has not been previously submitted for assessment at this or any other
Please check the following statements are true, tick the appropriate box and sign
the declaration.

I have included a full reference list using the Harvard style of referencing 
I have provided Harvard style references for all the ideas, empirical 
evidence and other materials I have used.
I have referenced all passages from my source material. 
Wherever I have copied someone else’s words (a quotation), I have clearly 
shown in the text how much was copied by using speech marks.
I have not committed any falsification. This means I have not presented 
invented data, by for example claiming that I have conducted interviews or
sent out questionnaires when I have not, or altering or making up my
I can make available evidence of originality, including notes, photocopies, 
drafts, primary data and computer files.

Student name: Mohammad Mukul Chowdhury

Student ID: 36861

Student signature:


Customer Satisfaction on Online Banking Services


It gives me immense pleasure to thank a large number of individuals for their cordial
cooperation and encouragement who have contributed directly or indirectly in preparing
this report.

Firstly, I express my gratefulness to Almighty Allah who has enabled me to pursue my


I convey my gratitude to my honorable Supervisor, Mr. Richard Asibey-Bonsu for his

guidance and co-operation, which helps me immensely to prepare this report.

I am very much grateful to all the executives of HSBC bank, who extended their
wholehearted cooperation during my syrvey period. They are as good as anyone could
hope for.

My chore also benefited greatly from many enlightening discussion of a number of

professionals in the HSBC Bank. And last but not the least; I would like to thank all other
wonderful personnel working in HSBC Bank.

The customers of HSBC Bank who provided the valuable data during my survey.

Special recognitions are due to those friends and classmates who provided their individual
assistance and advice.

Again I am grateful for all the contribution and many others unknown to us, but remain
responsible where I failed to heed their advice.

Customer Satisfaction on Online Banking Services


Now a day’s technological advancement makes our life easier. As a part of this
advancement banking sector facilitates their client involvement by offering most
convenient services through electronic means. To compete globally banks offer on line
banking facilities. Customers are now able to transact different types of banking activities
via online. People are now busy enough and consciousness among people has increased
than ever before. So they expect high quality services with short period of time. Although
technological convergent takes place and traditional banking system becomes online. But
not all the customers use online banking services in UK. Some banks offer only limited
services and confined themselves with SMS banking and ATM booth.

In this research paper I will try to represent the present scenario of online banking in UK
and customers satisfaction towards these services. For this purpose I will interview
customers of UK banks. In this study I have got some key factors which are very essential
to build up an effective customer relationship. I have also pointed out some factors which
are detrimental to customer relationship and make customers dissatisfied. Finally I will
make some recommendations on the basis of my field work.

Banks should extend their online banking facilities by offering all sorts of banking
services via electronic means. They should introduce new facilities for their client
properly. Banks should concentrate on removing technological problems which creates
negative impact in customers mind. So the study on “Customer Satisfaction on Online
Banking services: A Case Study of HSBC Bank UK” is therefore very significant for
the survival of the organization.

Customer Satisfaction on Online Banking Services

Table of Content
Page No.
Chapter Topics

Acknowledgement 3
Abstract 4

Chapter-1 Introduction 7
Background 7
Rationale of the Study 8
Objectives 9
Company Overview- HSBC 10

Chapter-2 Literature Review

Introduction 20

Theoretical Review
Customer 26
Satisfaction 28
Customer Satisfaction 30
Online Banking 31
Conceptual Framework of Online Banking 33
Challenges of Online Banking 40

Chapter-3 Methodology 43

Chapter-4 Data Analysis 47

Chapter-5 Data Interpretation 57

Chapter-6 Recommendation and Conclusion

Findings 61
Recommendation 63
Conclusion 64

References 65
Bibliography 66

Appendices List of Tables 66

Questionnaire 72

Customer Satisfaction on Online Banking Services

1.1 Introduction

“Customer Satisfaction on Online Banking services: A

Case Study of HSBC Bank UK”, the title indicates the Chapter-
present scenario customer opinion about online banking 01
services which are practicing in UK. The practice of Introductio
online banking services and its execution on regard to
customer satisfaction is the main focus of this study.

Recently bank has introduced fully internet banking in  Introducti

order to provide better services towards customers.
Online banking also known as electronic banking, virtual
banking, cyber banking. It overcomes the barrier of
 Backgroun
conventional banking. It established trustworthy,
dependable, reliable, professional, dynamic & fair
banking in the UK. It indicates various banking activities
 Rationale
conducted from business, home, or on the road instead of
at a physical bank location. of the
Understanding customer needs &requirements, Study
monitoring service performance, measuring customer
satisfaction and dissatisfaction, and the way to deliver  Objectives
superior services to customer have been highlighted in
this study.  Company

The research has been conducted among the HSBC bank
which provide online banking services in the UK. The HSBC

main purpose of this study is to represent a clear scenario

of customer satisfaction towards online banking.

1.2 Background

Customer Satisfaction on Online Banking Services

Now a day’s banking has gone beyond the traditional brick & mortar system and the
online banking system has been emerged dramatically as an essential part of our financial
life. People cannot even think of standing for encashment of cheques, paying bills, for
depositing money or even shopping with a bulk amount of money taking with them. The
people are fully dependent on online banking system. With the headquarters in London,
HSBC is one of the largest banking and financial services organizations in the world.
HSBC's international network has around 8,000 offices in 88 countries and territories
across Europe, the Asia-Pacific region, North, Central and South America, the Middle
East and Africa. HSBC has a unique international pedigree. Many of its principal
companies opened for business over 100 years ago. The founding company from which
HSBC took its name, the Hongkong and Shanghai Banking Corporation, was founded in
1865 to finance trade between China and Europe. In the UK, Midland Bank, which
merged with HSBC in 1992, was founded in Birmingham in 1836. HSBC is offering a
vast collection of online services in banking sector. But does this means the people are
satisfied in case of what they are getting. This study is concerned with the pattern of
online banking services of HSBC in UK and the customer satisfaction towards these
services. A number of different approaches were applied to collect crucial information on
this topic. I will collect data through questionnaires, discussed with different groups of
people and take help from the relevant books and websites.

I believe that this study will assist in making accurate decision, experience for further
study, helpful for my future career.

1.3 Rationale of the Study

I believe that this study will assist in making accurate decision, experience for further
study, helpful for my future career.

The main reasons of taking initiative to undertake this project are-

1. Preparing my MBA dissertation paper a part of my syllabus of 2nd semester.
2. Now a day’s online banking has brought about a revolution in the entire world.
3. The practice of online banking is increasing UK.
4. Since I am the student of Master of Business Administration, I need to acquire an in-
depth understanding of online banking which will assist me in future career.

Customer Satisfaction on Online Banking Services

1.4 Objectives

Before any research work, setting up objectives is very essential and it is as the half of
completing the work. The reasons behind conducting this study are clear and were
motivational towards the achieving of goals. In defining the objective, customer
satisfaction is given special emphasis.
The major objectives of the study are given below-

1. To observe the present scenario of online banking practice in UK.

2. To identify the strength and weakness of online banking services.
3. To know the expectations of customers and reality of online banking services.
4. To make recommendation on the basis of customer’s demand.

Customer Satisfaction on Online Banking Services

1.5 About HSBC

“We are the world's local bank.”

“ Headquartered in London, HSBC is one of the largest banking and financial services
organizations in the world. HSBC's international network comprises around 8,000 offices
in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the
Middle East and Africa.”

“ With listings on the London, Hong Kong, New York, Paris and Bermuda stock
exchanges, shares in HSBC Holdings plc are held by around 220,000 shareholders in 119
countries and territories. The shares are traded on the New York Stock Exchange in the
form of American Depositary Receipts.”

“ Through an international network linked by advanced technology, including a rapidly

growing e-commerce capability, HSBC provides a comprehensive range of financial
services: personal financial services; commercial banking; corporate, investment banking
and markets; private banking; and other activities.”

1.6 History

The HSBC Group has an international pedigree which is unique. Many of its principal
companies opened for business over a century ago and they have a history which is rich in
variety and achievement. The HSBC Group is named after its founding member, The
Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to
finance the growing trade between China and Europe.

1.7 Vision
“As a member of HSBC family which has been serving its millions of customers
worldwide since 1865, to take our place among UK’s most powerful, most profitable,
most admired leader banks.”

Customer Satisfaction on Online Banking Services

1.8 Mission
Having regard to ethical values; to meet its customers financial needs in the fastest and
most appropriate way, to continue innovative works in order to achieve: human resource
with superior qualities, technological infrastructure and service packages.

1.9 Core Values

1) To exceed customer expectations in service quality.

2) To be a pioneer in the implementation of technologies those create distinction for its
customers, employees and shareholders.
3) To keep its reliability at the utmost level with the contribution of its strong capital
structure and liquid assets.
4) To make a positive contribution to the community
5) To respect meritocracy during hiring processes, improving knowledge and skills of its
employees, creating the mostly preferred work environment.

Customer Satisfaction on Online Banking Services

1.10 International Network- Europe

Region Number of offices

Armenia 7
Belgium 2
Channel Islands 40
Czech Republic 3
France 422
Georgia 1
Germany 15
Greece 20
Hungary 1
Ireland 7
Isle of Man 3
Italy 2
Kazakhstan 10
Luxembourg 4
Malta 49
Monaco 2
Netherlands 1
Poland 16
Russia 7
Slovakia 2
Spain 4
Sweden 2
Switzerland 30
Turkey 337
Ukraine 1
United Kingdom 1,554

Customer Satisfaction on Online Banking Services

1.11 Products

Customer Satisfaction on Online Banking Services

1.11.1 Savings Account:

We want you to get the most out of your money. The best way to do this could be to
spread your money across a combination of savings accounts. So you could use up your
tax-free savings allowance, then put savings into a fixed-term account, then put the rest
into an instant-access account.

Cash e-ISA

Pay no tax on your interest on savings up to £5,100 this tax year and get instant access to
your savings. Open an account online in minutes.

Variable Rate Cash ISA

Pay in a lump sum, transfer in, or set up a monthly standing order. Open in branch or over
the telephone.

Fixed Rate Cash ISA

Keep your savings away from the tax man. Open this tax-free savings account with your
full annual subscription to fix your rate for 12 months.

Online Bonus Saver

An online savings account that's really easy to manage. Open an account online in
minutes and earn bonus interest when you don't make a withdrawal.

Flexible Saver

Easy access to your savings whenever you need to make a withdrawal. Suitable for both
saving by standing order and for putting away lump sums.

HSBC Premier Savings

Exclusive to HSBC Premier customers. Access your money when you need it, and you'll
get preferential savings interest rates.

Customer Satisfaction on Online Banking Services

Regular Saver

Save monthly between £25 and the maximum monthly balance for 12 months. At the end
of 12 months you'll be rewarded with an interest rate that's been fixed for the year.
Available with selected current accounts.

Fixed Rate Saver

If you're concerned about falling interest rates, fix the rate and term on your long-term
savings. Choose from a range of terms and know exactly how much interest you will earn
on your savings.

Savings for children

My Savings is a great place for 7-17 year olds to start saving. If you want to save on
behalf of a child, take a look at our High Interest Savings Account for Children.

Child trust fund

A tax-efficient savings scheme for children born on or after 1 September 2002. The
government makes an initial contribution.

Saving for retirement

Whether you are thinking about retiring, or have already retired, we can help you to plan
ahead for the future you deserve.

Money Market

Fixed-term, fixed-rate deposits for periods from overnight to five years. Ideal if you have
£50,000 or more to deposit, and want flexibility for your savings.

International Personal Savings Account

A great option if you need to move funds abroad regularly, travel abroad frequently or
own a property overseas. Instant access and/or fixed-term deposits.

Customer Satisfaction on Online Banking Services

1.11.2 Current Account:

HSBC offers a range of accounts that are designed to suit your needs, whether you require
a basic bank account; need access to your money in a wide range of currencies, or
whether you need a bank account to make a few basic transactions a month.

International Personal Current Account

Ideal if you regularly make or receive payments in a foreign currency. With quick, easy
access to your money in a wide range of currencies.

Amanah Bank Account

An account specially devised for those who prefer to conduct their financial affairs in
accordance with Shariah. Helping you to meet your day-to-day financial needs without
compromising your deeply held principles.

Private Banking

We offer a range of private banking, wealth management and property services to help
you manage your wealth today and for the future.

Basic Bank Account

A Bank Account that's straightforward and easy to manage, Basic Bank Account is ideal
for customers who are 18 and over who require only a few basic transactions per month.

Planning for your retirement

We have a whole range of retirement options to suit every individual and budget.

Saving for the grandchildren

Invest in their future with our Child Trust Fund. Allowing you to contribute up to £1200
each birthday year into a tax-efficient fund.

Customer Satisfaction on Online Banking Services

1.11.3 Investment options

“You've worked hard for your money. Let's make it work hard for you.” We have a
variety of savings and investments options to help you grow your money, and some even
come with protection to help you keep what you've got.

Selected Investment Funds including HSBC World Selection

In our opinion, Selected Investment Funds, including our newest edition HSBC World
Selection, offers some of the best funds in the market, handpicked according to our
rigorous selection criteria. Choose to invest for growth potential, income or a combination
of both.

ISA – tax efficient savings account

Whatever you're saving for, you'll find a whole range of ISAs at HSBC to help you make
the most of your ISA allowance.

Investment Bonds

If you have at least £5,000 to invest we offer a range of specialist funds to suit your
needs. Whether you want income, growth or to explore the stock market.


Buy and sell shares using our Invest Direct service. Keep ahead with our research tools
and explore the markets.

Stock market Linked Savings Account

A three and a half year Fixed Term Deposit Account.

Financial Advice

If you need financial advice on how to best manage your money, investments or savings,
HSBC can help.

Customer Satisfaction on Online Banking Services

Retirement Solutions

We have a range of retirement solutions to suit your future plans.

Personal Investment News

Written with the personal investor in mind, these articles provide vital information for all
stages of investment

Customer Satisfaction on Online Banking Services


 Introducti

 Reviews

 Customer

 Satisfactio

 Customer

 Online

 Conceptua
of online
2.1 Introduction
The focus of this chapter is to provide a selective review
 Challenges
of the past research works related to the present study. A
lot of researches will ve done but (as a sample) very few

Customer Satisfaction on Online Banking Services

are related with this unique one. Among the researches done the following are

“A short review of the literature on electronic banking briefly illustrates the major issues
that researchers and practitioners have dealt with in recent years. Security turned out to be
a major obstacle for many customers who were otherwise willing to switch to the online
world [Martin 1998]. Besides assuring customers that their privacy is protected, Hamlet
[2000] suggests that banks should not over-animate or clutter their Web sites with too
much advertising. In addition, care should be taken not to over-personalize the online-
experience in order to avoid the impression that personal financial information is freely
available. Bhattacherjee [2001] uses online banking customers to test his expectation-
confirmation model of IS continuance. His results suggest that users' continuance
intention is determined by their satisfaction and perceived usefulness of the application.
Tan and Teo [2000] found that attitudinal factors such as Internet experience, the relative
advantage of online banking and perceived risk, and perceived behavioral control factors
predict the intention to adopt Internet banking services. The survey by Karjaluoto et al.
[2002] showed that prior experience with computers and technology as well as people’s
attitudes toward computers influences both their attitude toward online banking and their
actual behavior. Mukherjee and Nath [2003] found that communication had a moderate
influence on trust, while opportunistic behavior had a significant negative effect and trust
in general led to a higher level of commitment in online banking. Information sharing and
distrust in the Internet were identified as the two major drawbacks for Thai Internet
banking adoption by Rotchanakitumnuai and Speece [2004]. Based on a survey amongst
Finnish banking customers, Pikkarainen et al. [2004] found perceived usefulness and
information on online banking on the Web site to be the main drivers for the acceptance
of online banking. A recent study by Lassar et al. [2005] showed that Internet related
innovativeness is positively related to the adoption of online banking.”

“...Our results confirm that loyalty of e-banking customers is directly affected by

satisfaction and trust in an online bank, which in turn are determined by Web site quality
and service quality. Moderating variables such as gender, age, involvement, variety
seeking behavior and technophobia exert a significant influence on some of the proposed
relationships.” (Journal of Electronic Commerce Research, VOL 7, NO.2, 2006, by Arne
Floh & Horst Treiblmaier)

Customer Satisfaction on Online Banking Services

“McKnight et al. (2002) suggest that “Disposition to Trust”, “Institution-base Trust”,

“Perceived Site Quality” affect customers’ trusting beliefs in the e-commerce context. In
addition, they suggest that “Disposition to Trust”, “Institution-based Trust”, “Trusting
Beliefs” and “Perceived Site Quality” affect customers’ intention to engage in trust
related behaviors with a specific web vendor.”

Similar to McKnight et al. (2002), “Gefen et al. (2003) suggest that “Institution-based
Trust” affect customers’ trust with an e-vendor. However, they separated “Institution-
based Trust” into two constructs namely “Structural Assurance” and “Situational
Normality” in their research. In addition, they suggest “Knowledge-based trust” is an
antecedent of trust, it defined as familiarity with the e-vendor. Contrary to the previous
research (Gefen, 2000), “Knowledge-based Trust” did not significant increase trust in an
e-vendor. Gefen et al. (2003) believed that the effect was mediated by other constructs.
They still believe that familiarity does increase trust, but this effect is channeled through
other constructs only. Similar to McKnight et al. (2002), they suggest trust in the e-
vendor will affect customers’ intention to shop online.”

“Online banking vendor can focus on research & development determining the factors
affecting users’ perceived site quality. They should also increase the structural assurance,
such as increases security and provides detail terms & conditions. It can reduce the
perceived risk. In addition, interacting with users can increase the familiarity, such as
provides online opinion sections, provides immediate enquiry answered by the online
customer service representative. Finally, making a typical login system and providing
similar services with other e-banking vendors can increase the situational normality. For
instance, if some banks adopt two-factor authentication in the login system, other banks
should follow. Otherwise, users will confuse about why their banks do not provide them
with this system. Increased situation normality would increase trust. I hope the results
provide insights for e-banking vendors by increasing their understanding of factors
affecting trust in online banking.” (Factors affecting Customer’s Trust in Online banking-
by Yeung Kit Man)

“……..….The Online Bank allows you to deal with almost all your finances. Do it
yourself, whenever it suits you.” “…….…....One of the advantages of banking online is

Customer Satisfaction on Online Banking Services

the overview it gives you. You get a complete picture of your finances and can easily go
back and find the information you need.” “……....….In some ways, the Online Bank is
just like any of our branches where you carry out your transactions. In other ways it is
completely unique. As well as being open around the clock, you also get access to a
number of exclusive services which are not available elsewhere within the bank.”

“ It is argued by Ravi et al .(2001) that there are two types of online banking, namely e-
banks and e-branches, an e-bank exists only on the Internet where paper record is not kept
and it operates all over the world without any geographical boundaries and it is available
round the clock and without any opening and closing hours, while e-branch bank is a
brick-and-mortar bank that provides internet banking to its customers because customers
prefer more e-branch service than e-banking service. It is further added by De Young
(2001) that in online banking any type of transaction can be done except cash withdrawals
with only mouse click at home or office. This type of accessibility is considered a key
benefit for those who use this facility; it avoids the customers to go personally to a bank
branch and to stand in the lines (ibid.).”

[ DeYoung (2001) and Wang (2006). The last author argues that their little success is due
to the complementarily between brick-and-mortar and online channels; While
standardized products are easily distributed through the online channel, specialized
products require a branch presence. As a result, internet-only banks are found to have on
average a lower return on assets. Delgado et al. (2004) _nds similar evidence for
European banks attributed, however, to their lack of economies of scale due to their
smaller size.”

“Internet banking refers to systems that enable bank customers to access accounts and
general information on bank products and services through a personal computer (PC) or
other intelligent device. Internet banking products and services can include wholesale
products for corporate customers as well as retail and fiduciary products for consumers.
Ultimately, the products and services obtained through Internet banking may mirror
products and services offered through other bank delivery channels.” (Internet Banking-
Comptroller’s Handbook, October 1999)

Customer Satisfaction on Online Banking Services

“ New forms of online communication offer a host of new and promising opportunities for
customer retention on the World Wide Web, while at the same time intensifying
competition [Vatanasombut et al. 2004]. In particular, this applies to company-controlled
communication, giving companies the ability to customize information with regard to the
individual needs of a particular customer and to optimize the customer's feedback
opportunities [Kierzkowski et al. 1996]. At the same time, companies also face
completely new challenges arising from customer-controlled Internet communication,
such as the growing importance of brand strength, economies of scale and size
[Gallaugher 1999]. In view of these changed circumstances in the buyer-seller interaction,
researchers and practitioners have to rethink previous concepts of loyalty [Luo and
Seyedian 2003/04]. Empirical studies comparing customer satisfaction and loyalty in
online and offline environments show substantial differences in terms of customer
attitudes and behavior [Shankar et al. 2003]. At the same time, the integration of Internet
technology into the customer loyalty concept is rarely discussed in the relationship
marketing literature [Wirtz and Lihotzky 2003].”

“…The findings suggest that satisfaction can be generated through improving courtesy,
content, timeliness and product and services offered. The latter being the most important
factor in driving internet banking satisfaction. The findings suggest that the majority of
the customers in the sample are satisfied or very satisfied with the service and online
systems attributes. The investigation does not support previous findings that more
satisfied customers tend to use more product and services or that using internet banking
for a longer period is associated with higher levels of satisfaction. It appears that
companies that offer a wide product portfolio and relevant website content accompanied
by prompt and courteous response create satisfaction online. (JIBC August 2009, Vol. 14,
No. 2, by Hernan E. Riquelme, PhD, Khalid A. Mekkaoui & Rosa E. Rios).

“ With the extensive technology innovation and telecommunication, we have seen new
financial distribution channels increasing rapidly both in the numbers and form, from
ATMs, telephone banking, PC banking to internet banking. (Earring Wood and Story,
1996). Developing alternative distribution channels is not only important in terms of
reducing costs and improving competitiveness, but also in terms of financial institution’s
ability to retain the existing customer case. (Kimball and Gregor, 1995) as well as to
attract new customers. Sathye (1999) proposed a model for Internet Banking in Australia

Customer Satisfaction on Online Banking Services

is significantly influenced by variables of system insecurity, case of use awareness of

service and its benefits, reasonable price, availability of infrastructure and resistance to
change. The transformation from traditional brick-and-mortar banking to E-Banking has
been Automatic Teller Machine (ATM) and thus the retail banking industry witnessed
significant and extensive change. Formally, E-banking comprises various formats or
technologies, including telephone (both land line and cell phone banking, direct bill
payment (EFT), and PC or internet banking (Power, 2000). Weitzman, (2000), Lassar,
Manolits and Lassar, (2005), Ehou and Chou (2000) identified five basic services
associated with online banking: view account balances, and transaction histories, paying
bills, transferring funds between accounts, requesting credit card advance, and ordering
checks. Majority of banks of banks is planning to introduce ICT for integration of
banking service and new finance service, which will play a vital role in bringing
efficiency in financial sector (Raihan, 2001). The most commonly factors are ease of use,
transaction security, convenience and speediness (Wan, Luk and Chow, 2005).”

A Survey of Electronic Banking, Electronic Cash and Internet Gaming (2003), has
defined electronic banking as “an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick and mortar
institution”. The following terms all refer to one form or another of electronic banking:
personal banking,(pc) virtual banking, on line banking, home Banking, remote electronic
banking, and phone banking are the most frequently used designations, (Joris, Claessens,
Valentine Dem,2001),on line electronic banking system give everybody the
opportunity for easy access to their banking activities. These banking activities may
include; retrieving an account balance, money transfers (Between a user’s accounts, from
user’s account to someone else’s account) retrieving an accounting history.

E-banking is a form of banking where funds are transferred through an exchange of

electronic signals between financial institution, rather than exchange of cash, checks or
other negotiable instruments common wealth bank of Australia, (2006) defined E-
banking as “a range of banking services that utilizes electronic equipment”. Electronic
equipments are ATM machine card (plastic), PIN, password, code or net code etc. With
the extensive technology innovation and telecommunication we have seen new financial
distribution channels increasing rapidly both in the numbers and form, from ATM’s,
telephone banking, PC banking to internet banking. A broad range of financial

Customer Satisfaction on Online Banking Services

distribution channels must be available to deliver varying services needs of customers

segments (Earring wood and story, 1996).”

Developing alternative distribution channels are not only important in terms of reducing

costs and improving competitiveness but also in terms of a financial institution’s ability to
retain the existing customer case (Kimball and Gregor, 1995) as well as to future attract
new customers.”

Sathye (1999) proposed a model for Internet Banking Adoption, which argued that the

Intention of Internet Banking in Australia is significantly influenced by variables of

system insecurity, case of use awareness of service and its benefits, reasonable price,
availability of infrastructure and resistance to charge.”

The Willis Report (1997 in Sathye, 1999) stated that the technology must be reasonably

priced relative to alternatives for customers to adopt. Otherwise the acceptance of the new
technology may not be viable from customer’s stand point. Customers today are more
conscious of the expenses associated with the banking as they are generally better
informed about alternative option. The total costs incurred in using Internet Banking must
be minimal or competitive (Joyawardhena and foley, 2000).”

The transformation from traditional brick-and-mortar banking to E-banking has been

automatic teller machine (ATM) has the retail banking industry witnessed such
significant and extensive change. Formally, E-banking comprises varies formats or
technologies, including telephone (both landline and cell phone banking, direct bill
payment (EFT), and PC or internet banking (Power, 2000); Weitzman, 2000; Lassar,
Manolits and Lassar, (2005), Ehou and Chou (2000) identified five basic services
associated with online banking: view account balances, and transaction histories; paying
bills, transferring funds between accounts; requesting credit card advanced; and ordering

2.2 Customer

Customer is someone who pays for goods or services and acquires the ownership of
products from the seller. There are some definitions of customer from different websites
are given:

Customer Satisfaction on Online Banking Services

“A customer is someone who makes use of the paid products of an individual or

organization. This is typically through purchasing or renting goods or services1.”

“Customer", produced by Carvin & Ivan, is the second single from singer Raheem
DeVaughn's from his album Love Behind the Melody.2

“A patron; one who purchases or receives a product or service from a business or

merchant, or plans to; A person of a particular kind, as in cool customer, tough customer,
ugly customer.3”

“The person or group that is the direct beneficiary of a project or service. The people for
whom the project is being undertaken (indirect beneficiaries are probably stakeholders).”4
“Means the person(s) or company whose order for the Supplies is accepted by the

“The individual or organization, internal or external to the producing organization that

receives the product.”6
“Groups or individuals who have a business relationship with the organization-those who
receive & use or are directly affected by the products and services of the organization.” 7

According to ISO 9000:2000 the definition of a customer is "an organization or person

that receives a Product".

“ Product can be a physical as well as a service. Customers are the source of incomer for
any business. There demand has to be satisfied, so that they continue buying products
from the company. Customers determine the Requirements. Customer is also called
consumer, client, end-user, retailer, buyer, beneficiary, receiver or purchaser.”


Customer Satisfaction on Online Banking Services

2.3 Satisfaction

“ Satisfaction means the settlement of a claim, due, or demand; payment; indemnification;

adequate compensation. Below there are some of the definitions of satisfaction are given:
Definition of satisfaction:”

“The contentment one feels when one has fulfilled a desire, need, or expectation; "the
chef tasted the sauce with great satisfaction"

“Gratification: state of being gratified or satisfied; "dull repetitious work gives no

gratification"; "to my immense gratification he arrived on time"

“(law) the payment of a debt or fulfillment of an obligation; "the full and final
satisfaction of the claim"

“Act of fulfilling a desire or need or appetite; "the satisfaction of their demand for
better services" 8

“A fulfillment of a need or desire; the pleasure obtained by such fulfillment; The

source of such gratification; A reparation for an injury or loss.”9

“Taking care of a debt or obligation by paying it; an entry made on the record, by a
party in whose favor a judgment was rendered, declaring that the judgment has been

“The discharge of an obligation by paying a party what is due.”11

“ Satisfaction is customer level of approval when comparing a product's perceived

performance with his or her expectations. Also could refer to discharge, extinguishment,

Customer Satisfaction on Online Banking Services

or retirement of an obligation to the acceptance of the obligor, or fulfillment of a claim.

While satisfaction is sometimes equated with performance, it implies compensation or
substitution whereas performance denotes doing what was actually promised.”

Customer Satisfaction on Online Banking Services

2.4 Customer Satisfaction

Definition of customer satisfaction:

• “A qualitative measure of performance as defined by customers, which meet their
basic requirements and standards.”

• “Degree of satisfaction provided by the goods or services of a firm as measured by

the number of repeat customers.”

“Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key
performance indicator within business and is part of the four perspectives of a Balanced

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy.”

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation

of the state of satisfaction will vary from person to person and product/service to
product/service. The state of satisfaction depends on a number of both psychological and
physical variables which correlate with satisfaction behaviors such as return and
recommend rate. The level of satisfaction can also vary depending on other options the
customer may have and other products against which the customer can compare the
organization's products.”

Customer Satisfaction on Online Banking Services

2.5 Online Banking

“ Online banking (or Internet banking) allows customers to conduct financial transactions
on a secure website operated by their retail or virtual bank, credit union or building

“ The precursor for the modern home online banking services were the distance banking
services over electronic media from the early '80s. The term online became popular in the
late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the
banking system using a phone line. ‘Home banking’ can also refer to the use of a numeric
keypad to send tones down a phone line with instructions to the bank. Online services
started in New York in 1981 when four of the city’s major banks (Citibank, Chase
Manhattan, Chemical and Manufacturers Hanover) offered home banking services[1]
using the videotext system. Because of the commercial failure of videotext these banking
services never became popular except in France where the use of videotext (Minutely)
was subsidized by the telecom provider and the UK, where the Pestle system was used.”

“ The UK’s first home online banking services [2] was set up by the Nottingham Building
Society (NBS) in 1983 ("History of the Nottingham". Retrieved on 2007-12-14.). The
system used was based on the UK's Pestle system and used a computer, such as the BBC
Micro, or keyboard (Tan data Td1400) connected to the telephone system and television
set. The system (known as 'Home link') allowed on-line viewing of statements, bank
transfers and bill payments. In order to make bank transfers and bill payments, a written
instruction giving details of the intended recipient had to be sent to the NBS who set the
details up on the Home link system. Typical recipients were gas, electricity and telephone
companies and accounts with other banks. Details of payments to be made were input into
the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the
payee and an advice giving details of the payment was sent to the account holder. BACS
was later used to transfer the payment directly.”

“ Stanford Federal Credit Union was the first financial institution to offer online internet
banking services to all of its members in Oct, 1994.”

Customer Satisfaction on Online Banking Services

Online banking solutions have many features and capabilities in common, but
traditionally also have some that are application specific. The common features fall
broadly into several categories”

“ Transactional (e.g., performing a financial transaction such as an account to account

transfer, paying a bill, wire transfer... and applications... apply for a loan, new account,
etc.).”Electronic bill presentment and payment – EBPP, Funds transfer between a
customer's own checking and savings accounts, or to another customer's account,
Investment purchase or sale, Loan applications and transactions, such as repayments.

Non-transactional (e.g., online statements, check links, co-browsing, chat). Bank

statements, Financial Institution Administration - features allowing the financial
institution to manage the online experience of their end users, ASP/Hosting
Administration - features allowing the hosting company to administer the solution across
financial institutions.

Customer Satisfaction on Online Banking Services

2.6 Conceptual Framework of Online Banking

Electronic Banking

“ Electronic banking (e-banking) refers to the banking operations that take place through
the electronic communications systems. Typical electronic systems that are used in e-
banking include telephones, Internet, mobile phones, emails etc. In brief, electronic
banking means banking activities, transactions, and operations conducted via electronic

Types of E-banking:

PC Banking: “The term PC banking comes from Personal Computers, which is the use of
personal computers or even laptops to conduct banking operations. The increasing
number of personal computers made this possible for banks to provide their services with
the help of computers which not only makes banking services faster but also cost-

Customer Satisfaction on Online Banking Services

Internet Banking: Internet banking is a type of e-banking which provides the banks to

conduct banking transactions through a secured Internet connection using either local or
global Internet infrastructure. Many banks conduct Internet banking through their own
Intranet which isn’t accessible from the global Internet. This ensures the security. In
Internet banking the banking operations such as online payments, depositing, information
queries, foreign exchange transitions and other operations are done by the banks website
or other software. To access the website or software a user id or password is required
which are only available to the authorized personnel of banks. Customers are also given
their credentials to access their bank accounts through the Internet and perform the
privileged operations from their end.”

Virtual Banking: Virtual banks are the banks which are from the customer perspective,

exist entirely on the Internet, governed and controlled by the central banks and other
regulatory institutions.”

Telephone Banking: Telephone banking is an online banking which involves the

banking services performed via telephones. In telephone banking customers need to dial a
particular phone number given by the bank to receive the authorized services. For
example, if a customer wants to know his account balance he can dial the number that the
bank gave him, and thus he gets his balance information. Telephone banking has not
much extended despite of huge potential and services under telephone banking are very

Mobile banking: Mobile banking (also known as M-banking or SMS banking) refers to

performing balance checks, account transactions, payments etc. via a mobile device such
as a mobile phone. Mobile banking is often performed via SMS (Short Message Service)
or mobile Interent. Typical Mobile banking services include, mini bank statements and
checking of account history, notifications on account activity, analyzing of term deposits,
access to loan statements, access to card statements, mutual funds or equity statements,
managing insurance policies, cheque information, ordering stop payment, cheque books
ordering, balance query, recent transactions, domestic and international fund transfers,
utility bill payment. Only few number of banks have adopted mobile banking services
while this service has a huge potential to enhance e-banking system.”

Online Banking

Customer Satisfaction on Online Banking Services

“ Online banking is an e-banking service that enables banks and other financial institutions
to conduct their banking and financial transactions with the help of the Internet, personal
computers or portable computers such as laptops and PDAs. A customer can do the
following through online banking:”

● 24/7 access to the accounts even in the weekends

● Can see balance information and status and information about other transactions

● Easily transfer funds to other accounts

● Can pay utility bills and receive too

Common Online Banking Services:

“ Banking transactions include small and retail transactions as well as large corporate
transactions and operations including foreign trades. Online services are based on the type
of customers. The following are some common retail and corporate online services that a
bank can provide:”

● Managing accounts

● Payment and presentation of bills

● Opening new accounts

● Brokerage or investment services

● Applying or approving loans

● Business-to-business or corporate and international payments

Online Banking Components

“ Depending on infrastructure and other configurations online banking components may

vary significantly. Banks should consider the following four factors to configure or setup
their online online services:”

● Defining strategic objectives for online operations

Customer Satisfaction on Online Banking Services

● Evaluating the scope, scale, and complexity of equipments, systems, and activities

● Considering Technology expertise, and

● Implementing security and internal control requirements.

“ Banks may either support their online services internally by employing their own
resources and expertise or can outsource their online banking systems to third parties. The
following actions could provide or host online banking services for banks:”such as-
Another financial institution, Internet service provider (ISP), Internet banking software
vendor, Core banking vendor, Managed security service provider, Bill payment provider,
Credit bureau, and Credit scoring company.

Required Physical Infrastructure for Online Banking

Internet: The Internet is the interconnected computer network throughout the world that

provides information and other services by appropriate protocol and software to the users.
Internet is a network of networks that consists of millions of private, public, academic,
business, and government networks of local to global scope that are linked by a broad
array of electronic and optical networking technologies. Internet connects individuals and
organizations across the world with no national boundaries to share, exchange and
communicate information to satisfy their needs.”

Intranet: An Intranet is a network that is internal within an organization, it is an internal

Internet. When an organization establishes a computer network within it to exchange

information between its local branches then it is called an Intranet. An Intranet is
basically consisted of several LANs and WANs but they’re separated from the global
Internet within firewalls. Intranet help organizations to perform their own operations
within their organizational boundaries. An Intranet is common in online banking system.”

Hardware: The essential hardware required to build a complete online banking system

■ Personal Computers

■ Servers

Customer Satisfaction on Online Banking Services

■ Routers

■ Firewalls

■ Modems

■ Switches

■ POS (Point of Sale) Terminals

■ ATM (Automated Teller Machines) booths

Software: For conducting online banking operations several software are now available

such as FLEXCUBE, a banking software which enables banks to process and store
banking transaction data and making payments through a dedicated client-server network.
Different banks use different types of software depending on the cost and other factors.

Electronic Money (E-Money): Electronic money means money which is exchanged

electronically. For example, e-currency, e-money, electronic cash, electronic currency,
digital money, digital cash or digital currency, Electronic Funds Transfer (EFT) and direct
deposit are done electronically.”

Plastic Money: Plastic money refers to a plastic card that is issued by banks or financial

institutions which is basically a magnetic chip that holds machine readable identification
code such as account number, customer’s personal identification number, and other such
information readable by ATMs. Plastic money are used for electronic commerce (with
magnetic stripe readers or via Internet) and for banking transactions through Automated
Teller Machines (ATMs). Types of plastic money include:”

Credit Cards: A Credit Card is an equivalent of a loan sanctioned by a bank to its

customers. Credit cards benefit and makes it possible to “Use First and Pay Later” the
specified amount of credit as per the agreed terms of sanction. This card gives the
facility to the cardholder to purchase goods and services from the marketplaces and shops

Customer Satisfaction on Online Banking Services

through the concerned credit card companies like VISA, MasterCard,

Maestro, and Cirrus.”

Debit Cards: A Debit Card provides facilitate a customer for online electronic payment

like Credit Card but from savings or current accounts of the cardholder for purchases. On
the principle of “Pay First and Use Later” debit cards act as a deposit access product
where the cardholder uses his own money in his bank account. A symbol or hologram of
concerned company such as VISA, MasterCard, Maestro and Cirrus etc are embedded in
Debit cards.”

ATM Cards: ATM Cards are used to withdraw or deposit money, balance enquires,

deposit bills in the account. In order to get an ATM card a cardholder must maintain a
savings bank account or current account with the bank. After issuance of a card, the
cardholder is given a four digit secret Personal Identification Number (PIN). To prevent
fraudulent activities the cardholder is always required maintaining the PIN carefully.”

ATM Card-cum-Debit Card: ATM Card-cum-Debit Card can be used both as an ATM

card and Debit card as a method of payment when purchasing goods and services. The
cardholder is responsible for all transaction made by the use of the card. Most of the debit
cards issued by banks are also ATM cards.”

Smart Card: The smart card is which has the size of a regular ATM card but is capable

of storing over a 1000 times more data. The data can be encrypted and hence the card is
completely secured. The cardholder can personalize it by printing personal and other
details on the card face.”

Automated Teller Machines (ATM): Full elaboration of ATM is “Automated Teller

Machine” which is indeed like a teller point in a bank who takes and gives money over
the counter. ATM is same as teller point but it run automatically through identity like card
and password. It does not need any slip or cheque but the account holder’s ATM card and
its password. Banks provide ATM cards only those who are eligible for ATM cards and
gives them the password. Cardholders can deposit their money in a bank account and they

Customer Satisfaction on Online Banking Services

are entitled to withdraw their money through ATM card, which is applicable for 24 hours
a day and 365 days in a year.”

Point of Sales: Point of sale (POS) or checkout refers to the location where a transaction

occurs. A "checkout" means a POS terminal or more generally a hardware and software
which is used for checkouts, the equivalent of an electronic cash register. A POS terminal
or hardware whhich is located in a retail shop or any other shops manages the selling
process by a salesperson accessible interface. It has a system of creating and printing of
the voucher too.”

Electronic Funds Transfer: Electronic funds transfer or EFT refers to

the computerized system which is used to conduct financial transactions

electronically. An EFT is the process of exchanging or transferring money from one
account to another electronically, either within the same financial institution or among
multiple institutions.”

Electronic Payment System: An electronic payment is a financial exchange that takes

place online between buyers and sellers which requires digital financial instrument such
as encrypted credit card numbers, electronic checks, or digital cash and that is backed by
a bank or an intermediary, or by legal tender.”

Customer Satisfaction on Online Banking Services

2.7 Challenges of Online Banking

Online banking is obviously the demand of time. It helps make banking services faster,
more convenient, cost-efficient and more productive. But in a country like the
implementation of ultimate online banking faces many challenges from different aspects.
The major challenges that are faced by banks, govt., financial institutions and
entrepreneurs are discussed here.

Technology Related Challenges

Challenges of IT and Telecommunication Infrastructure: The IT and Telecommunication

Infrastructure may anytime break-down.

Problems regarding Capacity and Scalability: The main problem of IT is, it is limited in
its capacity. The scalability may also be very limited. The IPv4 is full of its capacity.

Lack of Availability and Systems Integration: The network may not be available all time
for breakdown.

Issues with Web Site Design and Operational Functionality: The Marketing side of HSBC
faces problem for two sides of its operations. With the traditional marketing activities the
e-marketing also have to perform.

Management Challenges

Challenges of Regulatory issues and policies. Problems of developing and maintaining

Information management. Problems with Outsourcing. Challenges with security and
vulnerability. Threats of losing of personal relationship. Issues regarding Organizational
Structures and Resistance: Process change, Structural change, Cultural change, Political
change. Trust issues. Adoption and Acceptance issues. Conflict with other services
delivery channels. Issues with Change management. Issues regarding ethics.

Customer Satisfaction on Online Banking Services

Other Challenges

Challenges of creating proper integration of related systems, the tendency of achieving

only short-term targets. Web-enabled business processes are still insufficient in number
Limited understanding and knowledge within the organization about e-commerce.
Product differentiation and categorization are outnumbered. Problems in personalization
of products. Inadequate research and development. Limited e-commerce promotion
within the organization

Barriers to Online Banking

The barriers to the Online Banking are such as, Limited Access to the Internet, Consumer
behavior, Language and cultural issues, adverse industry trends, Fear of competition,
Security issues, Social issues.

Customer Satisfaction on Online Banking Services

Chapter- 03

 Research


 Population

of the


 Source of


 Sampling


 Data


 Data


Customer Satisfaction on Online Banking Services

3.1 Methodology
All the information incorporated in this report has been collected both from the primary
sources and as well as form the secondary sources. The details of these sources are
highlighted in the following.

Research Design:
The research will be exploratory in nature because, the relevant data will be collected
from within the Romford, Essex and form a small sample. The paper will be being
conducted to get a deep insight and understanding about the satisfaction of customer on
online banking.

Population of the Study:

The customers of the HSBC bank in Romford, Essex has been considered as the
population of the study.

Sources of Data:
There are two types of data will be used in preparation of the paper. These are primary
data and secondary data.

1. Primary data: “In primary data collection, you collect the data yourself using methods
such as interviews and questionnaires. The key point here is that the data you collect is
unique to you and your research and, until you publish, no one else has access to it. There
are many methods of collecting primary data and the main methods include:
questionnaires, interviews, focus group, interviews, observation, case-studies, diaries,
critical incidents, portfolios etc.” Collecting data directly from the practical field is called
primary source of data. The methods that will be used to collect the primary data are as
♦ Discussion with officials of the HSBC bank.
♦ Face to face conversation with the client.
♦ Open-ended & close-ended questionnaire method is used.
♦ Observation method used in some cases.

Customer Satisfaction on Online Banking Services

2. Secondary data: “Secondary data is data that has already been collected by someone
else for a different purpose to yours. For example, this could mean using: data collected
by a hotel on its customers through its guest history system, data supplied by a marketing
organization, annual company reports, and government statistic.” The secondary data will
have been collected from different publication of different banks. To clarify different
conceptual matters, Internet and different articles published in the journals & Magazines
have been used. The secondary sources are:
♦ Annual Reports of HSBC Bank.
♦ Other published documents of HSBC bank.
♦ Internet.
♦ Newsletters of HSBC Bank.
♦ Various brochures on the products and services offered by the bank.

Sampling Design:
Sampling is a tool which helps to know the characteristics of population by examining
only a small part of it. The data will be collected randomly from 100 bank customers as a
sample. A stratified sampling procedure will be used while collecting data.

Data Collection:
Data will be collected from primary and secondary sources respectively. Primary data
will be collected though questionnaire. Questionnaire will be used for data collection
because it is the most appropriate way for getting information about the satisfaction of the
customers on online banking of HSBC Bank.

The data that will be collected from survey is analyzed with applicable tables, graphs,
charts etc. And necessary written information will be used.

Customer Satisfaction on Online Banking Services

3.2 Limitations

The limitations of the study are the followings:

• Most of the customers dislike disclosing information.
• Many individuals are not familiar with this type of work.
• Lake of experience in research work.
• Time and budget are limited.

3.3 Reliability

In case of reliability will try to ensure that there is no subject or participant error or bias,
and no observer error or bias.

3.4 Ethical Consideration

In considering ethical issues in this study, I will try to respect the privacy of possible and
actual participants, ensure voluntary nature of participation, data processed fairly and
lawfully, data kept securely.

In case of plagiarism, in this study it is very cautiously taken. There is no plagiarism

involved with this study. Whenever there is a use of secondary data references is made.
Data will not be used directly.

Customer Satisfaction on Online Banking Services

Chapter- 04
Data Analysis

 Respondent

 Satisfaction

 Problems

 Reliability

Chapter- 05

 Opinion

Customer Satisfaction on Online Banking Services

Data Analysis

Our study is mainly based on primary data and information. Primary data and information
were collected through in depth interviews of the concerned people. We have interviewed
73 online customers in London and Romford, Essex. A summary of the obtained data are
given below-

4.1. Sample Type

The Gender Type of Sample

Gender Male Female Total

No. 65 8 73

Percentage 89.04% 10.95% 100

Table: a
We have collected data from both male and female respondents. Among them 89.04%
were male and 10.95% were female respondents. They have given various opinions
regarding online banking.

Figure: 1

Customer Satisfaction on Online Banking Services

4.2. Educational Qualification

Educational Qualification of the Respondents

Education Undergraduate Graduate Postgraduate Total

No 24 28 21 73

Percentage 32.9% 38.35% 28.76% 100

Table: b
From the observation it has been found that about 38.35% respondents were graduate.
Remaining 32.9% were studying or given up their study in the under graduate level. And
28.76% respondents were found in the post graduate level.

Figure: 2
4.3. Marital Status

Marital Status of the Respondents

Marital Status Single Married Total

No 45 28 73

Percentage 61.6% 38.35% 100

Table: c
In our study we have found that 61.6% users of online banking are single. Rest 38.35%
users are married. It is also observed that the satisfaction level of single users also differ
from the married users of online banking.

Customer Satisfaction on Online Banking Services

4.4. Occupation

Occupation of the Respondents

Occupation Executive Households Student Others Total
NO. 15 5 22 26 5 73

Percentage 20.5% 6.84% 30.13% 35.61% 6.84% 100

Table: d
We also observed that the online users are from different occupation. They mainly fall in
the following categories, 20.5% were executives,6.84%, 30.13%, 35.61 and 6.84% were
successively households, business persons, students and from other occupation.

4.5. User status

Online Banking Practice of the Respondents

Online banking
Very Often Often Seldom Total
No 21 37 15 73

Percentage 28.76% 50.68% 20.54% 100

Table: e

Our study reveals the variation of opinion according to the use of online banking. About
28.76% use it very often, 50.68% use often, 20.54% use irregularly. Their problem and
expectation was sometime same and some time different.

Figure: 3

Customer Satisfaction on Online Banking Services

4.6. Duration in practicing online banking

Maturity Classes of the Respondents

10 to
Duration in online 0 to 1 4 to 7 7 to 10
1 to 4 years 12 Total
banking year years years

No. 22 26 17 5 3 73

Percentage 30.13% 35.61% 23.28% 6.84% 4.1% 100

Table: f
From the study it has been found that 30.13% of the users are using online banking from
0 to 1 year. 35.61% from 1 to 4 years and 23.28%, 6.84%, 4.1% using online banking
successively from 4 to 7 years, 7 to 10 years and 10 to 12 years.

Figure: 4

4.7. Satisfaction level of customers

Satisfaction Level of the Respondents

Satisfaction Very Neither satisfactory Very

Satisfactory Dissatisfactory Total
level satisfactory nor dissatisfactory dissatisfactory

No. 6 34 18 14 1 73

Percentage 8.21% 46.57% 24.65% 19.17% 1.4% 100

Table: g
Our study reveals the variation among the satisfaction level of customers. About 8.21%
customers are very satisfied on online banking service. Rest of the 46.57%, 24.65%,

Customer Satisfaction on Online Banking Services

19.17% and 1.4% are successively satisfied; neither satisfied nor dissatisfied; dissatisfied
and very dissatisfied.

Figure: 5

4.8. Facing problems in online banking

Problem Faced By Respondents

Problems facing Several times Rare Never Total

No. 36 24 13 73

Percentage 49.31% 32.9% 17.8% 100

Table: h

Figure: 6

In our study it has been found that about 49.31% customers face problems frequently.
32.9% rarely face any problem and the rest 17.8% never face any problem. The customers
who face problem regularly are dissatisfied on the online banking service.

Customer Satisfaction on Online Banking Services

4.9. Comment on online banking

Availability of Services

Banks provide fully on line banking Yes No Total

No. 19 54 73

Percentage 26% 73.97% 100

Table: i
About 73.97% customers believe that banks do not provide 100% online service. They
expect more update banking services. Besides 26% customers believe banks provide
100% online services.

4.10. Charges on online banking

Justification of Charges by the Respondents

Imposed charges are

Yes No Total

No. 20 53 73

Percentage 27.39% 72.6% 100

Table: j

Figure: 7

Customer Satisfaction on Online Banking Services

Most of the customers believe that the charges imposed on online banking are much
higher than expectation. About 72.6% customer think charges are not optimum and
27.39% customers think it as a reasonable charge.

4.11. Reliability on security system

Reliability on Security System

Reliability on security A little
Yes Never Total
system bit
No. 44 23 6 73

Percentage 60.3% 31.5% 8.21% 100

Table: k
Security system of online banking is one of the major considerations for the online
customers. About 60.3% customers believe that the security system of online banking is
sufficient. 31.5% customers rely on security system a little bit. And the rest 8.21% never
rely on the security system.

Figure: 8

Customer Satisfaction on Online Banking Services

4.12. Online banking can use everyone

Online Banking Can Use Everyone

Online banking can use

Agree Disagree Total

No. 42 31 73

Percentage 57.53% 42.5% 100

Table: l

Online banking is yet out of reach of middle class and lower class people. About 57.53%
customers were agreed with this statement. Rest 42.5% disagrees with this statement.

4.13. Opinion regarding withdrawing expected money

Flexibility on Withdrawing Money

Withdrawing expected money Yes No Total

No. 32 41 73

Percentage 43.83% 56.2% 100

Table: m

Different types of information were found regarding withdraw of money. Almost 43.83%
customers can withdraw their expected sum of money on demand. They are satisfied with
this service. But 56.2% people were found dissatisfied. They cannot withdraw their
expected sum of money whenever they want it.

4.14 Product information source

Source Percentage (%)

Advertise 25

Word of mouth (From others) 55

Direct Sales 20

Table: n

Customer Satisfaction on Online Banking Services

Figure: 9
The above figure demonstrates the source of product information i.e. how customers
know about the products. From the figure, it is quite apparent that 55% of the customers
came to know about the products from other customers. This reflects high customer
satisfaction level. Many advertise of HSBC come to air which significantly influenced
customers. But the performance of direct salespeople was not satisfactory enough. Their
poor efforts replicate in the graph. They were able to bring only 20% of the customers.

4.15 Perception about employees’ attitude:

Perception Percentage (%)

Competent, cordial & courteous 60

Not competent 25
Not cordial & courteous 15

Table: o

Customer Satisfaction on Online Banking Services

Figure 10

From the survey, it was found that 60% customers considered the behavior and efficiency
of the employees were good enough. But few of them inferred that they were not
competent enough. They took more time than the expectation to serve and sometimes
they behaved rude.

4.16 Recommend to others

Recommendation Status Percentage (%)

Recommend 85%

Not Recommend 15%

Table: p

85% of the interviewee has introduced other customers to HSBC, which is a very positive
sign for the well being of the bank. It also reflects the fact that HSBC has been able to
build effective customer relationship.

5.1 Customers Opinion about Additional

Customer Satisfaction on Online Banking Services

Banking Services

 Getting facility for withdrawing expected amount of money: the customer cannot
withdraw money that they want to because of the limit line of the bank in case of
ATM withdrawal. The bank should make it open to the customer t that the
customer can withdraw the expected amount of money.

 Lower technological problems: In many cases the ATM machine does not work
properly. It shows different problem. The bank should take this into account that
there should not have any breakdown on the online services.

 No transactional problems in future: There should not any problem in the future.
The customers want that the bank should act and perform above the level of its

 Branches should be available all over the country: The branches should be
available at anywhere. The customers need reachability. They do not want to go
far for transaction. There are also available ATM machines. The customer can
withdraw money from anywhere through ATMs.

 Lessen the charges or charge less service: The customer thinks that the charges
that have been charged for different services are very high. The bank should
reduce the amount of the charges. The customers are very reluctant to pay the
existing charges. They think that the bank unnecessarily charges more than it
should be.

 Instant and quick services: The online banking is devoted to the fast service. The
bank should deliver its services quickly.

 Easiness of getting online banking services: The bank should provide access to the
customers in a way that they should not feel harassment. The bank should reduce
the unnecessary securities that cause the customer to feel harassment.

 24 hours facilities for all the services: There Should be all time service facility

Customer Satisfaction on Online Banking Services

 Availability of ATM booths and services at the door step: The customers want
that the ATM and other service providing mechanism should be at the door step.

 Anytime deposit of cash: There should have the facility of depositing the cash
 Versatility of services: The services should be versatile.

 Increased amount of money in ATM to withdraw: there should be a high limit for
withdrawal of cash from ATM.

 Mobile and Tele Banking services.

 Advanced security systems.

 Banks at the PCs or Laptop.

5.2 Most Attractive Features of Online Banking

The features that have been offered by HSBC bank are measured by this survey. The
services that the customers like most are given below:
 About 90% customers gave opinion in ATM service facility of online banking.

 Some customers opine in mobile banking.

 Some are truly rely and happy with normal electronic banking transactions.

 Individuals are very much attracted by knowing their update account information.

 Every customer gets satisfied in using debit& credit card.

5.3 Complain over Online Banking of HSBC

The customers complained over some of the features and activities of the HSBC bank.
These are the followings:
 More interest rate.

Customer Satisfaction on Online Banking Services

 Technical problems increasing rapidly.

 Unable to withdrawing needed money.

 Sometimes showing zero balance figures in account.

 Limitation of required services.

Customer Satisfaction on Online Banking Services

5.4 Opinion regarding Enjoying Online Banking


The services that the customer enjoys most while using are listed below:
 Every customer agrees with enjoying ATM facilities most.

 Business people are using credit card facilities and sometimes SWIFT facilities.

 Customers also enjoying foreign remittance services.

 Individuals happy with accounting information services.

 Some customers agree with enjoying normal transactions.

5.5 Suggestions from Customers to solve the


From the survey it is found that the customer thinks there are some solutions on these
types of problems. The provided some suggestion on remedial measures regarding these
problems. These are listed below:

 Authority should take initiatives to solve the problems.

 Should give emphasis on customer satisfaction.

 Should arrange an interest free electronic banking services.

 More opportunities should be created for getting more loyal customers.

 Should take steps to solve technical problems.

Customer Satisfaction on Online Banking Services

Chapter 6

 Findings

 Recommenda

 Conclusions

 References

 Bibliography




Customer Satisfaction on Online Banking Services

6.1 Findings

Our seminar topic is “Customer satisfaction on On-line Banking” For preparing our
seminar paper we found various problems, some problem are very serious. If those are not
solved immediately, our Banks will suffer a lot in there near future.

1. Unavailability of ATM booth: Our study recover that there are scarcity of ATM
booth in all places. It creates high dissatisfaction in customer mind.

2. Shortage of fund in ATM booth: Most of the people complain that there is low
money reserve in booth some time they find it empty.

3. High service charges: In our survey, about 72.6% people said that on-line banking
charge is very high and it is still out of reach among the middle class and lower class

4. Technological problems: There are some technological problems such as imbalance

or sometimes show empty of own account money, PIN code rejection, Database
cannot support the system etc.

5. Shortage of Branch: Branches are not available so especially business people face

6. Limited services: bank deliver limited services to customers but customers are
needed more services such as available fund in booth, account transaction by
internet, cash paid by credit card such as current bill, gas bill, shopping etc.

7. Low of female client: Female customer is not satisfactory; our respondents’ of

female are only 10.95% of total.

8. Partially On-line Banking: Still now our banks operate partial on-line Banking.

Customer Satisfaction on Online Banking Services

9. User of on-line Banking: Our surveys observe that regular users of on-line banking
are only 28.76% of our total survey and among them 30.1% are new users.

10. Security: Some of the people cannot rely on on-line banking. They feel less
security on on-line banking.

11. Limitations of cash withdraw: There is a limitation of cash collection.

Customer Satisfaction on Online Banking Services

6.2 Recommendations

Now in 21st century we the people are introduced to online banking. Online banking
means a service that allows an account holder to obtain account information and manage
certain banking transactions through a personal computer via the financial institution's
web site on the Internet. This is also known as Internet or electronic banking. It is a
convenient and secure way of making many transactions, such as transfers and bill
payments. Though it needs lots of investment to create online banking network, it gains
more benefits afterwards. Day by day, internet users are growing. So online banking has a
very good feature if it is handled and organized well. There is also an internal problem,
regarding the operation of online banking. The employee (specially the senior level) that
is behind the traditional offline banking is not used to operate computers. They are more
familiar with traditional banking system. So if we want to get befitted by online banking
system we need to adopt the latest technological systems. Thus the employees, the actual
users and also the bank will be benefitted. People can purchase their desired product and
pay the bills in less amount of time by online banking system. Also they can withdraw
and deposit their money anytime without going to the bank.
To overcome the constraints most of the respondents related their answers with the issues
they identified as constraints to growth. The principal recommendations are:

• Increase of ATM booth

• Increase booth cash fund
• Raise credit card acceptance in all places
• Increase customer consciousness about on-line Banking by arranging seminar,
workshop etc.
• Resolve technological problem by using latest technology.
• Minimize total cost by proper management.
• Use easy and secure system.

Customer Satisfaction on Online Banking Services

6.3 Conclusion

In retrospect of the marvelous growth of consumer banking revenue over the last 20 years
and contemplating the intensity of competition yet to come, it is crucial for online
banking service providers to rethink its strategies and marketing plan to sustain the
growth consumer banking revenue. Correspondent banking service providers domiciled
are expected to be fighting for a bigger pie, as the growth prospect of the country’s
correspondent banking business is limited. One of the ways to achieve that objective is to
maximize consumer banking revenue generated from providing best online banking

Online banking services are provided entirely at the risk of the subscriber who shall
indemnity the bank for all loss or damage, howsoever caused, resulting from the use of
any of the online banking services. The bank will not be responsible for any loss or
damage arising directly or indirectly from any malfunction or failure of the online
banking services.

However, the challenges for the banking industry has been to design this new service
channel in such a way that its customers will readily learn to use and trust it. After all,
banks have spent generations earning our trust, they are not about to risk that on a web
site that is frustrating, confusing or less than secure. This paper presents a conceptual
view of online banking and the constraints of this new banking method.

Customer Satisfaction on Online Banking Services


• Website:, browsing date 05/07/2010,

• browsing date 05/07/2010,
• browsing date 05/07/2010,
• browsing date 05/07/2010,
• browsing date 06/07/2010,
• browsing date 06/07/2010,
• browsing date 06/07/2010,
• browsing date 06/07/2010,
• browsing date 06/07/2010,
• browsing date 06/07/2010,
• browsing date 06/07/2010,

Customer Satisfaction on Online Banking Services


• Steven J Skinner and Ivancevich, Business for 21st century, 11th Edition.

• D.U. Journal of Marketing. Vol. No. 7, June 2004

• Charles W. L. Hill & Gareth R. Jones, (South-Western Cengage Learning, 2009-

10), Theory of Strategic Management, 8th Edition, page 228-260

• Elias M. Awad, (Prentice Hall, 2006), Electronic Commerce, 3rd Edition.

• Efraim Turban, Jae Lee, David King & H. Michael Chug, (Pearson Education),
Electronic Commerce, 6th Edition.

• Mahmood Shah Steve Clarke, “E-banking Management”, 2nd Edition.

• K. C. Shekhar & Lekshmy Shekhar, (Vikas Publication House Pvt. Ltd), Banking
Theory and Practice, 19th Enlarged Edition.

• Dr. S. N. Maheshwari & Dr. S. K. Maheshwari, (Kalyani Publishers), Kalyani’s

Banking Law and Practice, 12th Revised and Updated Edition 2005.

Customer Satisfaction on Online Banking Services


Customer Satisfaction on Online Banking Services

Tabulation of Data

1. Sample Type

Sample Type

Gender Male Female Total

No. 65 8 73

Percentage 89.04% 10.95% 100

2. Educational Qualification

Educational Qualification

Education Undergraduate Graduate Postgraduate Total

No 24 28 21 73

Percentage 32.9% 38.35% 28.76% 100

3. Marital Status

Marital Status

Marital Status Single Married Total

No 45 28 73

Percentage 61.6% 38.35% 100

4. Occupation

Occupation Executive Households Student Others Total
NO. 15 5 22 26 5 73

Percentage 20.5% 6.84% 30.13% 35.61% 6.84% 100

Customer Satisfaction on Online Banking Services

5. User status

User status
Online banking
Very Often Often Seldom Total
No 21 37 15 73

Percentage 28.76% 50.68% 20.54% 100

6. Duration in practicing online banking

Duration in practicing online banking

Duration in 7 to 10 10 to 12
0 to 1 year 1 to 4 years 4 to 7 years Total
online banking years years
No. 22 26 17 5 3 73

Percentage 30.13% 35.61% 23.28% 6.84% 4.1% 100

7. Satisfaction level of customers

Satisfaction level of customers

Satisfaction Very satisfactory Very
Satisfactory Dissatisfactory
level satisfactory nor dissatisfactory
No. 6 34 18 14 1

Percentage 8.21% 46.57% 24.65% 19.17% 1.4%

8. Facing problems in online banking

Facing problems in online banking

Problems facing Several times Rare Never Total

No. 36 24 13 73

Percentage 49.31% 32.9% 17.8% 100

Customer Satisfaction on Online Banking Services

9. Comment on online banking in Bangladesh

Comment on online banking in Bangladesh

Banks provide fully on line banking in
Yes No Total
No. 19 54 73

Percentage 26% 73.97% 100

10. Charges on online banking

Charges on online banking

Imposed charges are justified Yes No Total

No. 20 53 73

Percentage 27.39% 72.6% 100

11. Reliability on security system

Reliability on security system

Reliability on security system Yes A little bit Never Total

No. 44 23 6 73

Percentage 60.3% 31.5% 8.21% 100

12. Online banking can use everyone

Online banking can use everyone

Online banking can use everyone Agree Disagree Total

No. 42 31 73

Percentage 57.53% 42.5% 100

Customer Satisfaction on Online Banking Services

13. Opinion regarding withdrawing expected money

Opinion regarding withdrawing expected money

Withdrawing expected money Yes No Total

No. 32 41 73

Percentage 43.83% 56.2% 100

Customer Satisfaction on Online Banking Services

“Customer Satisfaction on Online Banking Services:

A Case Study of HSBC Bank UK”
(The collected data will be used only for preparing report and will be kept confidential)

Dear Sir/Madam:

For your kind information, this is a survey research regarding “Customer Satisfaction
on Online Banking Services: A Case Study of HSBC Bank UK”. We will be very
obliged if you kindly give your responses to the following questions. Please pick the right
i. Age:

ii. Gender:
Male Female
iii. Education:
Undergraduate Graduate Postgraduate
iv. Marital Status:
Single Married
v. Occupation:
Executives House holds Business person
Student Others
1. Do you frequently use online banking?
Very often Often Seldom No
2. How long are you using online banking service?
Not more than 1 year.
From 1 to 3 years.
More than 3 years.

3. What type of online banking services you are enjoying?

Normal A/c Normal cash Account ATM

Transferring Transaction
Credit Card Information
Debit Card Facilities
Remittances Facilities Facilities

4. Do you think that online banking services provided by banks in our country are

Very satisfactory Satisfactory Neither dissatisfactory

Nor satisfactory
Dissatisfactory Very dissatisfactory
5. Do you face any problems in online banking?
Several times Rare Not at all
6. What type of problems you face mainly?
Limited services Technological Others
7. Do you agree that banks locatingproblems
in our country provide fully online banking?
Strongly agree Agree Neither disagrees
Nor agree
Disagree Strongly disagree
Customer Satisfaction on Online Banking Services

8. What additional online banking service do you expect?

A little
9. Is the maintenance of online banking bit
expensive to you?
Yesrely on the security system of online banking?
10. Can you Not at all

Yes A little bit Not at all

11. Which feature of online banking attracts you most?

12. Do you have any specific complain over online banking?

13. Do you satisfied with the charges imposed on online banking?
Satisfied Not satisfied

14. Online banking service is yet out of the reach of middle class and lower class
people. Do you agree with this statement?

Agree Disagree

15. Can you withdraw your expected amount of money from ATM booth?
Yes No

If no, what step should be taken to solve the problem?


“Thanks for your cordial cooperation”

Total Word Count: 18,808.

Customer Satisfaction on Online Banking Services