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Customer's Perception on Effectiveness of Digital Banking Services during

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South African Journal of Economic and Management Sciences
ISSN: (Online) 2222-3436, (Print) 1015-8812
Customer's Perception on Effectiveness of
Digital Banking Services during Covid-19
Lockdown Period
Author:
G.Parimalarani 1
M.Rathi Meena 2
Affiliation:
1Associate Professor, Department of
Banking Management, Alagappa
Univeristy, Karikudi – 630 004,
Tamil Nadu
2 Ph.D.Full Time Scholar, ICSSR
Fellow, Alagappa Institute of
Management , Alagappa Univeristy,
Karikudi – 630 004, Tamil Nadu
Corresponding Author:
parimalaranig@alagappauniversity.
ac.in
Dates:
Received: 14 May 2020
Accepted: 28 August 2020
Published: October 2020
How to cite this article:
G.Parimalarani, 2020,
‘Customer’s Perception on
Effectiveness of Digital
Banking services during
COvid-19 Lockdown period’,
South African Journal of
Economic and Management
Sciences 23(10).
https://doi.org/10.4102/
sajemsin.v23i2.7129
Copyright:
© 2020. The Authors.
Licensee: AOSIS. This work
is licensed under the
Creative Commons
Attribution License.
Page 1 of 4 Original Research
Abstract:
Banking sector is investing huge amount in digital initiatives in order to maintain a competitive
edge and to deliver the maximum services to their customers. By adopting digitalization,
banking sector provide sophisticated services to their customers by anywhere and at any
time. In the scenario of COVID 19, most banks in affected countries have reduced the
branches working hours and they recommend their customer use digital banking services.
The prospect of digital banking depends on customers therefore, understanding customer’s
requirement and meeting their demand and expectation is becoming a challenge. By taking
this as background this research examine the customer’s perception on using digital banking
and preference on digital banking channels during Covid lockdown period. Researchers
collected the data through primary as well as secondary sources. A convenient sampling
method was used to collect data from280 respondents. The study reveals that there is a
significant relationship between digital banking services and overall customer satisfaction
during Covid 19 lock down period and Customers were highly satisfied with Mobile banking
services and moderately satisfied with ATM services during Covid lockdown period.
Keywords: Digital banking, Customer satisfaction, COVID 19, Customer retention, Customer
service, Digitalization, Banking services , Distribution channels
1. Introduction
The Indian Banking sector is playing a predominant role in the development of the nation. The
importance of banking sector was much addressed by the Indian Government through
nationalization of the banks under two phase (1969 and 1980) and subsequently by opening the
sector for private players in 1990. From then the banks started investing huge resource in
implementing and upgrading the mechanization and digitalization of banking services in a
phased manner. Currently the nation is facing a critical situation via the outbreak of Covid-19 in
delivering the services in an effective manner. As the result of the outbreak, the country has
witnessed nationwide lockdown to avoid the spread of Corona virus. The Government and the
Reserve Bank of India (RBI) has taken speedy measures to reduce the severity. By changing the
working time of bank branches, reducing the number of staff in branches etc., Added to this,
during the lockdown period The Indian Bankers Association also specified that only necessary
services like deposit, withdrawal of cash, clearance, remittance and government transactions will
be delivered. At this juncture the digital distribution channels are considered to be very simple,
customer-focused banking experience of all banks. Digital distribution channels demonstrating
simple, customer-focused banking experiences will be a critical priority for all financial
institutions. The benefits of an outstanding digital customer experience will be quantifiable. The
report published by McKinsey report that customers with regard to digital banking prefer to open
their new account in the same bank. The prospect of digital banking depends on customers
hence, it is necessary to understand digital banking requirement and expectation of customers
which is bit challenging for the banks. By taking this as background this research examine the
customer’s Perception on using digital banking and preference on digital banking channels
during COVID-19 lockdown period. The finding of this study is will be useful for the Indian
banking industry to strengthen the digital banking channels by formulating suitable strategies to
build the customers loyalty which thereby help the banks to retain their customer base.
http://www.sajemsin.org Open Access
 Page 2 of 4 Original Research

2.Review of Literature 4. Research Methodology

The early research found that their exist positive relationship In order to achieve the research objective the researcher
between perceived ease of use and perceived usefulness of collected the data through primary and secondary sources.
digital banking Wang et.al (2003), Pikkarainen et.al (2004) & The primary source includes information gathered through
Guriting & OlyNdubisi (2006), Mittal et.al (2017). Haque et.al convenient sampling method. Structured questionnaire was
(2009) investigated the customer’s perception on E banking distributed through Google forms. Secondary sources
transactions examine the service quality, secure transaction, includes internet, books, RBI reports, journals etc.,
sufficient mechanism, regulatory framework of E banking. Convenient sampling methods was used to collect data
Kumbhar, Vijay (2011) investigated the factors affecting E- from 450 bank customers. Of this, the filled in forms of 280
banking services and study found that perceived value, respondents were found to be complete and were taken for
brand perception, cost effectiveness, Easy to use, further analysis. The remaining forms were incomplete,
convenience, problem handling, security and therefore such data were rejected. Before proceeding
responsiveness are the essential factors that influence the further, the reliability of the data has been checked through
customers satisfaction in e banking services. Islam (2015), Cronbach’s Alpha, the value for ATM Services variables is
BahlSarita(2012) studied the challenges of internet, the 0.763 and 0.807 for Mobile banking services. With the help
study determined that security and privacy issues are the of SPSS statistical software data were analyzed.
critical factors in digital banking. Sharma (2011) analyzed
the perception of E- banking services from banker’s point of 5. Results
view, the study found that e banking services helps in
improving the relationship between bankers and customers The outcomes of the study are presented as follows. Firstly,
and also improve the overall performance of the banks. demographic profile of the respondents and customer's
Hasan et.al (2010) indicated in their study indicated that perception on use of digital banking services are presented.
bank customers in Bangladesh are not having enough Next, the relationship between digital banking services and
knowledge to operate E-banking services. Sangsubhan overall customer experience on the digital banking services
(2009) reviewed the payment system in Thailand with are examined.
reference to Evolution of Information communication
Table. 1 Descriptive statistics of Demographic
Technology in that researcher observed that ATM, Internet
characteristics of respondent’s
and mobile banking play a vital role in promoting efficiency
and convenience in transforming while raising their standard
of payment services of business and bank customer. Bansal
(2015) In India, banking sector continuously invest in
information technologies such as ATM, Internet banking,
Mobile banking, Tele banking etc., Pattan(2018) studied the
customers perception towards E- payment system, the study
highlighted that debit card have high credibility and are most
popular kind of e- payment system. Jain et.al (2012) studied
the role of Information technology of banking sector, the
study highlighted that initially ATM was developed to
distribute the cash without visiting bank branches. Now it
enabled various services such as cash withdrawal, payment
of utility bills, fund transfers, ticket booking, payment of
online purchase, and getting balance statement etc.,
Parimalarani (2016) observed in her study that the volume of
card transaction had increased to many fold. Gupta (2017) &
Kavitha (2018) stated that majority of the customers used
debit card for making payment.

Many researchers have done in digital banking. Various

studies like studied made by Krishna Reddy (2015),
Sunith(2019), Mohan & Manikandan(2016)analyzed the
awareness, preference, and customer satisfaction towards
digital banking. So far no other studies conduct on customer
perception towards digital banking during COVID-19
lockdown period, hence the researcher fill the research gap
through this study. As presented in table 1, 53% of male customers were using
digital banking. 40% of young customers were in the age
3. Objective of the Study group of 31 to 40 years and they were using digital banking
The Purpose of the study is to examine the relationship that services and only 2% of customers were above 60 years, so
exists between bank’s digital services and overall customer’s majority of the customer conduced are mid age
experience during COVID- 19 lockdown period. customers.74% of respondents were married. During the

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 Page 3 of 4
lockdown period, majority (44%) of the corporate customers
were accessing digital banking services. Majority (36%) of
customer’s annul income was Rs.1, 00,000 and another
36% of customer’s income were around Rs.1,00,001 to
Rs.5, 00,000. From the table it is clear that 34% of the
customers were from urban area and they accessed digital
banking services during lockdown period, which is
subsequently followed by 24% of rural customer who
accessed the banking transaction through digital banking
system. When we consider the respondents based on their
educational qualification 71% of customers were
postgraduate. 65% of customers are maintaining their
account in public sector bank and remaining 35% of
customers are maintaining their account in private sector
bank. It was inferred that majority of the respondents are
having their bank account with public sector bank and they
used digital banking services during the lockdown to avoid
physical bank services.
Considering the above results, it is revealed that among all
the variables, the highest mean is related to the variable of
Fund transfer which is equal to 3.90. From this it is inferred
that customers used digital banking services to transfer
their fund to another account during lockdown period and
the lowest mean is related to the variable depositing cash
(3.16).
Correlation analysis was used to examine the nature of the
relationship between each service attributes of ATM usages
and the overall satisfaction level of digital banking services
during lockdown period.
A1= ATMs are opened during lockdown period, A2=Drain
out of ATM Machine located near the residence. A3= Usage
http://www.sajemsin.org
Original Research
of own bank ATM, A4= Safety measures in ATM, A5= ATM
working condition was good, A6= Usage of other bank ATM,
A7= Wait in long queue at ATM, OS = Overall satisfaction on
digital banking services
Table 3 Indicates that the respondents were mostly satisfied
with the no shortage of money at ATM during lockdown
(mean=4.29), followed by all the ATMs are opened during
lockdown period. The overall customer satisfactions with ATM
during lockdown mean is 3.25. These values indicate that
customers are moderately satisfied with ATM services.
The correlation matrix (Table3) indicates that ATM Usage
variables were moderately correlated with the satisfaction
level of digital banking services. According to the results the
variables“use of other bank ATM with their own bank debit
card” have the strongest correlation ( 0.095 ) with the overall
satisfaction on digital banking experience during the
lockdown period. In India we have more number of ATMs
which really facilitated the customers to avail their services
without any hindrance. The limit for usage of other bank ATM
was scrapped which ultimately helped the bank customers to
use other bank ATMs. In this lock down situation, other bank
ATM accessibility provides high level of convenience to
customers and it increased the satisfaction level of the
customers.
M1=Easy to transfer fund to same bank account, M2=Easy
to check mini statement, M3=Uninterrupted mobile banking
services, M4=NEFT transfer, M5=Payment of utility bills,
M6=Mobile recharge, OS = Overall satisfaction on digital
banking services
Table 4 indicates that the respondents were mostly satisfied
with the accessibility of easy to transfer fund to same bank
account services (Mean = 4.50), followed by mobile recharge
mean (4.45), payment of utility bills mean(4.38), Easy to
check mini statement mean (4.37), NEFT transfer mean
(4.20), Uninterrupted mobile banking service mean (4.19).
These values indicate high level of satisfaction on customer
experience on digital banking services.
Correlation analysis was used to examine each service
attribute of Mobile banking usages and the overall
satisfaction level of digital banking services during the
lockdown period. The correlation matrix (Table 4) indicates
that Mobile banking usage variables were highly correlated
with the satisfaction level of digital banking services.
According to the results the variables “Easy to check mini
statement had the strongest correlation (r = 0.29, P <0.01)
Open Access
 Page 4 of 4
with the overall satisfaction on digital banking experience
during lockdown. Followed by (r=0.29 <0.01, Easy to
transfer fund to same bank account and Uninterrupted
mobile banking services( r =0.25 <0.01).
6.Conclusion
The present study evident that, through correlation analysis
it is identifies that there is a significant relationship between
digital banking services and overall customer satisfaction.
Customers were highly satisfied with Mobile banking
services and moderately satisfied with ATM services during
Covid lockdown period. Without entering the bank branches
the customers prefer to transfer their money from one bank
account to another and they also used the service for
recharging their mobile phone .The customers, who prefer
ATM services during lockdown period, ensured their safety
measure like sanitizers /hand wash were available in ATM
before their transaction activities. In addition to that
customer also enjoyed the benefits provided by the bank
while accessing other bank ATM with their bank debit card.
In this pandemic situation, other bank ATM accessibility
provides the high level of convenience to customers and it
also increased their satisfaction level. Customers were
highly satisfied with mobile banking services during Covid
lock down in terms of transferring their cash to another
account from their place itself. The study represents the
customer's perception on effectiveness of digital banking
services during covid-19 lockdown period in all the area.
The future research may be focus on digital banking
services on the covid 19 highly affected areas.
Acknowledgment
The author acknowledges RUSA 2.0 for funding the project
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