Study to analyse customers take on E-banking services

Abstract
The e-banking sector has many players who claim to offer a number of services. A first hand
survey and research was desired as to get to know the use and reaction of customers using e-
banking. The objectives were to find the number of customers who were satisfied by the e-
banking services. The study was done based on data collected from 100 respondents from the
city of Pune who were mostly students, working professionals and housewives aged 18 years
to 48 years. The questionnaire sought their responses regarding their current e- banking
service, their opinion about the quality of services offered, their choice among various
services, and their monthly usage of e-banking. Around 50% of respondents use e-banking
once or twice a week and when respondents were asked about the choice of e-banking
services over traditional banking services, majority of them (77%) preferred e-banking. Only
a few of them (11%) preferred traditional banking. When the respondents were asked to rank
the Safety and security provided by E-banking, majority of the respondents gave higher ranks
stating that the safety and security provided by E-banking for their transactions was high.
This shows the amount of trust in e-banking among the respondents. Hence, it will benefit the
customers to save their time in traditional banking transactions and trust e-banking services
better.
Keywords: e-banking services, Customer Satisfaction, online services, Service Quality
*People across the city using e-banking services and traditional banking services
Introduction
Online banking (or Internet banking or E-banking) allows customers of a financial
institution to conduct financial transactions on a secure website operated by the institution,
which can be a retail or virtual bank, credit union or building society. Customers can
now perform several banking operations such as fund transfers, opening deposit accounts,
ordering cheque books and demand drafts, paying utility bills, applying for loans, and getting
account statements without visiting a branch. "We are seeing more and more people shifting
to alternative delivery channels, which account for nearly 30-40% of customers at present.
Over the next few years this is likely to go up to 70-80 %. Banking has also seeing a change
due to efforts of the Reserve Bank of India (RBI) to inculcate a habit of paperless payments
such as credit and debit cards, electronic fund transfers and mobile banking.

During 2011-12, the volume of online fund transfers through NEFT (National Electronic
Funds Transfer, used for low-value transactions) and RTGS (Real Time Gross Settlement,
used for high-value transaction) grew by 71% and 11.7 %, respectively, according to RBI
data. However, modern electronic payment systems are still concentrated in metros and large
towns (Tier-I and II locations). A large chunk of the Indian population still does not have
access to formal banking channels, let alone the newer alternatives.
OBJECTIVE:
1. To find out how popular e- banking has become among respondents over the years
2. To find out the dependency of respondents using e-banking.
LIMITATIONS OF THE STUDY:
1. The study was limited to only 100 respondents; hence drawing a unanimous result is
not possible.
Due to time constraint the scope of study was limited.
REVIEW OF LITERATURE

1. Rimpi Kaur, in May 2013, conducted a study on the impact of e-banking. The
method of data collection was from various issues of reports on trends and progress of
banking in India and statistical tables related to banking in India. Indicators like share
of electronic transactions, value of total transaction, per transaction cost and per
transaction returns have been analysed for the purpose of this study. She found that
the share of electronic transaction was on increasing trend as more and more people
use internet nowadays. She also found that e-banking was mostly used by working
professionals in the age bracket of 18-35 years. E-banking is not bound by time and
geographical barriers, making it convenient to use. She concluded that the only way to
connect to customers at any time is through internet applications. Hence, it was be
concluded that e- banking is reaching all sectors and segments of the society making it
more preferred option for banking.

2. Gita K.S and V. malarvizhi conducted a study on acceptance of e-banking among
customers, in June 2011. Their method of research was collecting data from 200
banks customers belonging to 19 commercial banks in the city of Bangalore. And
also survey instrument used was a structured questionnaire. They found that security
is the most important attribute for internet banking customers in India. The selection
of an internet banking service provider is affected by security, reliability and privacy.
Security which involves protecting customers from risks of fraud and financial loss
has been another important issue in safe use of the internet.

METHODOLOGY

The topic selected for the study was Analyse customers take on E-banking services. The
topic was selected keeping in mind that with the advancement in technology, lot of
transactions are taking place over the internet using e-banking services. E-banking is
becoming a major part of e-commerce. The sample respondents for the study was stratified
random sampling. The total size of the sample was 100 respondents from the urban sector
including college students, working professionals and housewives. To test the feasibility of
the tool of data collection a pilot study was conducted on 10 respondents. A questionnaire of
8 questions was made and administered. Based on the results, certain modifications were
made and final questionnaire was prepared. Primary data was collected by researchers
themselves by means of a questionnaire. A copy of the sample questionnaire is attached
under Chapter 8 of the Report. Secondary data was collected through the internet, journals.

Hypothesis
Based on the results of the pilot study the following hypothesis were formulated:
1) Use of e-banking services is increasing day by day
2) Dependancy of people on e-banking increased over traditional banking
RESULTS
Table 1: Frequency of use of e-banking services
S No Frequency of Usage Percentage
1 Daily 19
2 Once or twice a
week
43
3 Once or twice a
month
38
Total 100


Figure 1: Frequency of use of e-banking services
DISCUSSION:
When respondents were asked about the use of e-banking services majority of them (43%)
used once or twice a week and 38% used e-banking services once or twice a month. 19% of
the respondents used these services daily. From this it is evident that the people using e-
banking services are increasing day-by-day.
The above results accept hypothesis 1
st
which states that Use of e-banking services is
increasing day by day
The above result is in correlation with Rimpi Kaur who in May, 2013 also found out that
share of e-banking was on increasing trend as more people use internet now a days.

Table 2: Choice of e-banking services over traditional banking
S No Choice Percentage
1 Yes 77
2 No 11
3 May be 12
19
38
43
Daily
Once or twice a
month
Once or twice a week
Total 100


Figure 2: E-banking over traditional banking

Discussion: When respondents were asked about the choice of e-banking services over
traditional banking services, majority of them (77%) preferred e-banking. Only a few of them
(11%) preferred traditional banking.
The above result accept hypothesis 2
nd
which states that Dependancy of people on e-
banking increased over traditional banking.

Table 3: Bank Preferred for e-banking transactions

S No

Bank Name

Percentage

1

Axis

12

2

HDFC

20

3

ICICI

26

4

State Bank Of India

23

5

Standard Chartered Bank

01

6

Others

18
12
11
77
May be
No
Yes

Total

100

DISCUSSION:
When the respondents were are asked about which bank they would prefer for e-banking
most of them (26%) selected ICICI and (23%) State Bank of India. This shows that these two
banks are more preferred banks for e-banking transactions.

Table 4: Ranking of safety and security provided by E-banking
(Note: Rank 1 being the lowest and Rank being the highest.)\

S No
Rank Percentage
1
1 2
2
2 15
3
3 21
4
4 46
5
5 18

Total 100


Figure 3: Ranking for safety and security
DISCUSSION:
When the respondents were asked to rank the Safety and security provided by E-banking,
majority of the respondents gave higher ranks stating that the safety and security provided by
E-banking for their transactions was high. This shows the amount of trust in e-banking
among the respondents.
The above results are in correlation with Gita and V. Malarvizhi who is June,2011 also found
out that security is the most important attribute for internet banking customers in Indi
2
15
21
46
18
1
2
3
4
5
CONCLUSION
Regarding bankers perspectives on e-banking activities of customers, the study reveals that
there are a lot of people who use the e-banking services, but a lot more awareness in Indian
customers regarding use of e-banking services should be inculcated. But, the guidance and
persuasion by bankers does promote the use of such services amongst the customers. There is
greater incidence of e-banking usage among the middle age men (25 to 50 years of age); and
women customers use such services much less frequently. Occupation-wise, the
professionals, followed by business class, make more use of e-banking services. This helps us
in proving both our 1
st
objective that the e-banking services is gaining popularity. Maximum
number of sampled bankers (57.29 percent, taking very high and high categories together) is
of the view that customers are increasingly switching over from traditional banking to e-
banking. Barely 17% of people are still using the traditional way of banking. This proves the
2
nd
objective that dependence on e-banking is increasing.

It can be seen that there is still a lot of perceptual blocking which hampers the growth its the
normal tendency of a human not to have changes work on the old track, thats also one of the
reason for the slow acceptance of internet banking accounts but as the time is changing and
with the passage of time people are accepting technology. This proves our 1st hypothesis that
use of e-banking is increasing day by day. This also proves how the world has been changing
from the traditional banking to modern banking and e-banking has been gaining popularity
slowly washing away the traditional banking. This proves the 2
nd
hypothesis that the
dependence on e-banking has increased over the e-banking services.

RECOMMENDATIONS
Going through the survey the main problem lies that still customer have a fear of
hacking of accounts and thus do not go on for internet banking. Banks are trying their
level best by providing the best securit y options to the customers but then to there is
lot of factors which betrays a customer from opening an internet bank account. Banks
are providing free internet banking services also so that the customers can be
attracted.

BIBLIOGRAPHY
1. Sharma H. (2011). Banker's Perspective on e-banking, NJRIM, Vol. 1, No. 1, pp. 71-
84.

2. Gurusamy S.(2001). Banking in the New Millennium: Issues, Challenges & Strategies,
Kanishka Publishers & Distrubutors, New Delhi, pp. 1-62.
3. Khan and Sreekumar.(2009). Service quality evaluation in internet banking: an empirical
study in India, Int. J. Indian Culture and Business Management, Vol. 2, No. 1,pp. 30-46