“E-BANKING SERVICE QUALITY ON CUSTOMER SATISFACTION OF

COMMERCIAL BANKS IN DAVAO CITY”

A Title Proposal Presented to the Faculty of the

College of BusinessAdministration
UNIVERSITY OF MINDANAO
Davao City

In Partial Fulfillment of the Requirement in

Methods of Research's
Code No.: 3167 and 3053

CHINNIE JESURO
JUNIELYN GRACE JUNGCO
CRISTY MAE PUDOC

August2022
 Chapter 1

Introduction

It has been noted that e-banking plays a pivotal role in increasing customer’s

value in which it provides financial services and offers tremendous benefits

(Baabdullah et al., 2019). However, the adoption of e-banking is not yet well-

prevalent among customers so the development of internetandtechnologycreate

value in a digital environment(Schreieck and Wiesche, 2017). It enables the

customers to adopt a particular technology by performing e-banking activities without

physically visit the office. (Malaquias and Hwang, 2019).

For this reason, e-banking has significant value for numerous financial

organizations and customers (Baabdullah et al., 2019). In the part of financial

services, technology is very useful in the form of quality and systematizes services

which creates competitive advantage based on a good delivery such as quick and

real-time banking, mobile banking and internet banking that provide to a good

customer (Mostafa, 2020).Hartono (2012); Chen, Cheng & Hsu (2015) points out that

the banks offer immense services and ensure huge participation in online banking

that part of facing the challenges to compete other commercial banks by getting the

quality attributes towards the customer’s perception and service satisfaction. Service

quality is very effective and essential tool for some firms during competitive

differentiation within the industry.

Despite of its relevance, the quality and performance of service affects

customers perception of e-banking. Since banks succeed in making friendly and

easy to use e-banking services, if the quality of those services is having low

performance or unstable, the reliability from the customer will be down rapidly so the

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service quality must have attention in order to consider their satisfaction of

customers (Al-Hawari, Harley & Ward, 2005).

Further, in the field of banking industry, the availability of e-banking in some

countries is prominently developed by its standard and convenience of service

delivery stated that the customer’s satisfaction is the major determinant of success in

using technology-based services and other online transaction services (Tong,

2009).In Vietnam, the mode of using e-banking services has a great prospective

development. According to the World Fact book that the Vietnam’s standing in the

number of internet users in the world ranks 14 out of 20 countries in 2019. Some

commercial banks in Vietnam ensure that the customers stay competitive offering e-

banking services without the possible risk and technical issues. The most popular in

terms of method in payment is cash on delivery through self delivery and shipping

online (Dang, 2020). They attempt to enhance the competitiveness of commercial

banks to have an understandable view on the impact of their e-banking service

quality on customer satisfaction and shifting cost on loyal customers.

E-banking is being one of the trends in the chain of technological aspects in

the form of ATMs, telephone and online banking.Accenture (2005) points out this

that the e-banking is significant to use as a signal and connection in a revolution in

banking distribution. So, they have a heavily investment in the development of

internet channel. This further highlight by Mols (1999) that the e-banking was spread

in many countries experience the intensive growth and it is important to peoplethat

being transformed over the traditional banking industry because of the revolutionize

of e-banking distribution. One of the industries that uses e-banking is Globe Telecom

that join forces for e-banking and entered partnership with Philippine Savings Bank

(PSBank), a thrift banking arm of Metrobank Group, to additionally develop its

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electronic banking channels. This service enables Globe subscriber and PSBank

account holder to use the prepaid services from the PSBank for reloading their

Globe or TM accounts. This will results the customer’s demand for speed of delivery,

efficiency, convenience and reliability of banking services.

Another product industry that joins better in e-banking is The Coca Cola

Company in which they accessing electronic payments. They continue programs

focused to increase the used of it across its global functions. E-banking is very

helpful for the company that create long lasting benefits for customers and increase

its security and efficiency for the employees’ salary disbursment and cost savings.

In particular, this study considers five dimensions of service quality (fast

delivery, reliability, ease of use, privacy and security, and understanding) that have

an impact on customer satisfaction in order to identify each factor’s potential impact

on the commercial bank in Davao City. Parasuraman et al. (1994) highlightedthe fast

delivery that the responsiveness of willing employees involves telling customers

exactly when things will be done, giving them undivided attention, promoting

services, and responding in accordance with their requests. According to Madu

(2002) that the responsiveness help the banks customer and deliver them quick

service by controlling and operating service to them, give online channels that guid

them, quick sulotion in case of error accessing the e-banking system and support the

customer’s concerns. Parasuraman et al., (1994) also found out the reliability that

means organizations provide a service correctly the first time. Moreover, it shows

that organizations strive to fulfill promises and pay attention to the results. According

to Liao and Cheung (2002) that the reliability is one of the most significant features

that customers find in evaluating their e-banking system. Furthermore, Van Gorder

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also discovered that reliability is the most crucial determinant of service quality (Van

Gorder, 1990).

Davis defined ease of use as that the degree to which a person believes that

using a particular service does not demand a lot of effort (Davis, 1989, p. 320). Later,

Davis et al. (1989) and Bagozzi (1990) discovered that effort and complexity were

connecte and belongs in the “ease of use” attributeto individuals that use computer

or similar technologies. It is related to the one of dimension of Parasuraman et al.

(1985, 1988 and 1994) which is tangibles that associated with the physical facilities,

tools and machines used in order to provide the service as well as representations of

the services such as statements, card (debit and credit), speed and efficiency of

transactions. Privacy and security highlighted byParasuraman et al. (1988) stated

that quantitave studies that identified service quality which is empathy have used to

mesure the privacy and security where in it carry, paying personal attention and

providing services to customers.Understanding involves making the effort to

understand the customer’s need (Parasuraman et al., 1988). Understanding is part

of combination from assurance as well as the access and competence according to

the 10 dimensions of service quality. Knowing the customer, for example making on

effort to get to know customers and their specific needs. They are active listeners

when customer speaks and recognize regular customers by name. Moreover,

understanding the customer has the steps to know customer better.

Based on the previous discussion about the aforemention of relevance of the

e-banking services, they wanted to discuss whether the level of satisfaction of the

customers dealing in traditional banking and e-service as a disparity when it comes

to availing the specific services that are offered simultaneously by traditional banking

and online services.

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 The objective of this study aims to determine the relationship between the e-

banking service quality and the customer satisfaction of commercial banks in Davao

City in which this study will cover the service quality factors which are the fast

delivery, reliability, ease of use, privacy and security, and understanding.

This study is anchored on the theory of service quality by Parasuraman et al.

(1985) which states that the company helps to understand the customer satisfaction

and it identifies the gaps between the perceived service and the expected service

under his proposed about the Gap Theory of Service Quality. Based on the gaps

between perceptions and expectations of the consumers, Parasuraman et al., (1985)

suggested 10 dimensions for measuring the gaps in their service quality model;

reliability, responsiveness, competence, access, courtesy, communication,

credibility, security, understanding and tangibles. In 1988, they redefined their finding

and model as SERVQUAL but the construction of the model and theory remains the

same with the dimension reduced into five, reliability, responsiveness, assurance,

tangibles and empathy.

Moreover, additional study is anchored on the theory of satisfaction by

Abraham Maslow in 1943 which is the Maslow hierarchy of needs that is used in this

study which suggests how humans intrinsically partake in human motivation

proposed that people are motivated to satisfy several needs. Maslow suggests that

the foundation of these can satisfied before they can move to another level of

satisfaction which are the physiological, safety-security, belonging and love, social

needs or esteem, self-actualization and transcendence.

In addition, this study is using theoretical model of UTAUT, Unified Theory of

Acceptance and Use of Technology which suggests that the certain use of

technology is based on the behavioral intention. It determines the perceived

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likelihood of acquiring technology and dependent on the effect of four key constructs

such as performance expectancy, effort expectancy, social influence and facilitating

conditions. On the other hand; age, gender, experience and voluntariness of use are

moderate on the effect of predictors (Venkatesh et al., 2003).

This study seeks to ascertain and to investigate the impact of e-banking

service quality on customer satisfaction. The figure 1 presents the independent

variable and dependent variable of the study. The independent variables are fast

delivery, reliability, ease of use, privacy and security, and understanding. The

dependent variable is customer satisfaction.

INDEPENDENT VARIABLE DEPENDENT VARIABLE

FAST DELIVERY
RELIABILITY
EASE OF USE CUSTOMER SATISFACTION
PRIVACY AND SECURITY
UNDERSTANDING

This study will provide benefits to the following parties which are the Banking

Institutions, The University of Mindanao and Future Researchers. This study’s

primary beneficiary is a banking institution. As a result, the study may be used as a

reference for them to learn about and comprehend the influence of embracing

service quality on customer satisfaction: to analyze its impact on the bank’s financial

performance and to improve their client service. Next is The University of

Mindanao.This study will aid in the improvement of university services and can be

used as a reference for service quality transfer of money via e-banking as well as

monitoring and improving cashless payment in paying in the cashier. Last is the

Future Researchers.This study may serve as a source for future research through

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obtaining new ideas that could have tremendous and significant effects on shaping

an efficient and effective banking institution.

Chapter 2

Method

Research Participants

The respondents of this study were the customers that using e-banking or

mobile banking of five commercial banks in Davao City namely: Bank of the

Philippine Island, Rizal Commercial Banking Corporation, Philippine National Bank,

Banco de Oro and East West Bank. There were 100 respondents in five commercial

banks, there were 20 respondents in each 5 banks. Overall, the sample population

has a total of 100 customers who were selected purposive sampling method. A

purposive sampling method studies specific respondent from a particular population

based on researchers’ judgement.

Research Instrument

The main instrument used in this study was adopted and modified survey

questionnaire from research of Bebli (2012). The questionnaire used for this study

was divided into two sections. These are the characteristic of service quality section

and the demographic section. The questionnaire was designed to obtain information

about characteristic of service quality and customer satisfaction of different

commercial banks in Davao City. Under the demographic section variable are age

gender, income level, marital status and highest educational level and under the

characteristic of service quality section are speed of delivery, ease to use, reliability,

privacy and security, and understanding. To assuring the response of the

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respondents, we used five-point Likert scale where the respondents are asking to

indicate which they agree or disagree with the following questions in part 2 and

asking to indicate which they satisfied or not satisfied with the following questions in

part 3.

Statistical Treatment of Data

This study has two statistical tool which are the mean and pearson r. Means

implies the average and it is obtained by taking the sum of a set of scores and

dividing the sum by the total number of scores based on the information gathered.

This tool used to describe the impact of e-banking service quality on customer

satisfaction of commercial banks in Davao City and pearson r looks at the

relationship between two variables. It calculates the effect of change in one variable

when the other variable changes.

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Research Questionnaire

We are the Financial Management (FM) students of the University of

Mindanao. As part of our studies, we are conducting a research study on “The

Impact of E-Banking Service Quality on Customer Satisfaction ofCommercial Banks

in Davao City”. This is in line with our requirements for the subject, Methods of

Research (CBM 300). We will be glad if you will please answer the following

questions very carefully and honestly as candidly as you can. It takes only 10-15

minutes. We are hoping for your favorable response and assured that the response

you give are for academic purposes only.

Jesuro, Chinnie

Jungco, Junielyn Grace

Pudoc, Cristy Mae

General Instruction: Please take a moment and answer this questionnaire

thoroughly and honestly. All the information you provide here will considered as

confidentiality. Please mark the circle as your choosen answer. Only one answer of

the following options will be preferable.

Part I: Demographic Profile

Direction: Please fill in the following information on the following questions by

marking check on the box in each item.

1. Age: a. 18-22b. 23-26c. 27-30 d. above 30 years

2.Sex: a. Maleb. Female

3. Education Level: a. No formal education b. Basic Education

c. Secondary d. Bachelor e. Masters

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4. Marital Status: a. Single b. Married c. Separated d. Widowed

5. Employment Status: a. Employed full-time b. Employed part-time

c. Unemployed d. Student

e. Retired f. Self-employed

6.. Income Level:a less than P 10,000 b. P 10,001-15,000

c. P 15,001-20,000 d. P 21,001-25,000

e. P 25,001-30,000 f. Above P 30,000

7. Length of Internet Banking Usage:

a. Less than a year b. between 1-3 years c. between 4-6 years

d. More than 6 years

7. Frequency of Internet Banking Transaction:

a. Once per month b. Twice per month c. Thrice per month

d. Four times per month e. Five times per monthf. More than five times per month

Part II: Service Quality

Direction: We would like to know your responses to different e-banking service

quality that are mostly used by customers. Kindly mark check on the column that

portrays your opinion. Please be guided by the rating scale below.

Legend:

1 – Strongly Disagree

2 – Disagree

3 – Uncertain

4 – Agree

5 – Strongly Agree

Fast Delivery

1 2 3 4 5
1. The use of e-banking makes my transaction very fast.

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 2.The use of “E-Banking Time Savings”.
3. The use of e-banking provides prompt service.
4. It provides willingness to customers.
5.Availability to respond customer’s queries.

Reliability

1 2 3 4 5
1. The use of e-banking can lead to accuracy in transactions.
2. The use of e-banking is reliable.
3. The use of e-banking provides accurate information.
4. It provides service on time.
5. E-banking maintains error free records.

Ease of Use

1 2 3 4 5
1. E-banking is easy to navigate and simple to use.
2. The wording of e-banking is clear.
3. E-banking does not demand a lot of effort.
4. The e-banking website structure and information is easy to
follow.
5. It is easy to use e-banking serives to accomplish my banking
tasks.

Privacy and Security

1 2 3 4 5
1. My personal information is protected on the e-banking platform.
2. E-banking website provides financial security and confidentiality.
3. The transactions over the e-banking website are secured.
4. I find the online systems safe in making the e-banking
transactions.
5. I feel secure when providing private information at my e-bank.

Understanding

1 2 3 4 5
1. It provides personal attention for customer’s needs using e-
banking.
2. E-banking enables customers for easy access.
3. The use of e-banking gives best interest.
4. E-banking maintains care and customer relationship.
5. E-banking shows understanding to my specific needs.

Part III – Customer Satisfaction

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Direction: We would like to know your responses to satisfaction in e-banking that are

mostly used by customers. Please mark on the column that reflects your opinion.

Please be informed by the rating scale below.

Legend:

1 – Very Dissatisfied

2 – Dissatisfied

3 – Neutral

4 – Satisfied

5 – Very Satisfied

Satisfaction

1 2 3 4 5
1. I am happy with this e-banking because of the real time response.
– Fast Delivery
2. I find e-banking application quite pleasant because it covers with
all my transaction. – Reliability
3. I am generally pleased with e-banking service because it is user-
friendly. – Ease of Use
4. I feel safe in e-banking transactions. – Privacy and Security

5. I find interest with e-banking because of caring and individual

attention. – Understanding

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References

“E-banking has considerable value for many financial organizations and customers
(Baabdullah et al., 2019)”.

“The main research instrument used for this study was the questionnaire uses two
sections: demographic profile and the characteristics of service quality section (Bebli,
2012)”.

“GRSERV scale: an effective tool for measuring consumer perception of service

quality(Chen, Cheng & Hsu 2015)”

“Ease of use as “the degree in which a person believes that using a particular
service would be free of effort” (Davis, 1989, p. 320)”.

“Effort and complexity were related and included in the “ease of use” attribute(Davis
et al.,1989) and (Bagozzi,1990)”.

“Cash on delivery (COD) is still the most popular payment method while 60% of
merchants collect COD payment through self-delivery and shippers (Dang, 2020)”.

“Some prominent service and quality tools are often used in services (Hartono,
2012)”.

“The Coca-Cola Company joins Better Than Cash Alliance to give more people
access to electronic payments”. (Klapper, L.,S. Singh, and A. M., 2014)”.

“Reliability is one of the most important features that customers seeks in evaluating
their e-banking system (Liao and Cheung, 2002)”.

13
“Responsiveness is identifies as the readiness to assist the customers of the bank
and to provide them a fast service (Madu, 2002)”.

“People are motivated to achieve certain needs and that some needs take
precedence over others (Maslow, 1943)”.

“The use of e-banking offers a wide variety of services for customers, which provide
them with value and create a competitive advantage over competitors, such as
account checking, bill payment, transferences or mobile phone text message
notifications (Mostafa, 2020)”.

“Suggested a new model of service quality measurement by measuring the gap

between perceive service and expected service(Parasuraman et al., 1985)”.

“Based on the gap between expectations and perceptions of the consumers, it has
10 dimensions for measuring the gaps in the service quality model; reliability,
responsivenesscompetence, access, courtesy, communication, credibility, security,
understanding and tangibles (Parasuraman et al., 1985)”.

“The refined their finding and model but the construction of the model and the theory
remains the same with the dimensions reduced into fivereliability, responsiveness,
assurance (which contains communication, competence, credibility, courtesy and
security, tangibles and empathy (which contains access and understanding)
(Parasuraman et al., 1985)”.

“Based upon available literatures sampled, service quality shares some similarities
with customer satisfaction, although the two are not the same (Cronin and Taylor,
1992; Parasuraman et al., 1985)”.

“Reliability means organizations perform a service correctly the first time

(Parasuraman et al., 1994)”.

“Responsiveness of willing employees involves telling customers exactly when things

will be done, giving them undivided attention, promoting services, and responding in
accordance with their requests (Parasuraman et al., 1994)”.

“Tangibles are associated with physical facilities, tools and machines used in order
to provide the service and the representation of service such as efficiency of
transactions, cards and statements(Parasuraman et al., 1994)”.

14
“Quantitative studies that have identified service quality model dimensions have
used security, credibility, and access to measure empathy (Parasuraman et al.,
1994)”.

“Knowing the customer involves making effort to understand the customer’s needs
(Parasuraman et al., 1988)”.

“The availability of several e-banking countries wide has greatly improved the quality
and convenience of service delivery however researchers have stated that users’
satisfaction is an essential determinant of success of the technology-based delivery
channel (Tong, 2009)”.

“Reliability is the most crucial characteristics for customers in the evaluation of

service quality (Van Gorder, 1990)”.

“The theoretical model of UTAUT suggests that the actual use of technology is
determined by behavioural intention. The perceived likelihood of adopting the
technology is dependent on the direct effect of four key constructs, namely
performance expectancy, effort expectancy, social influence, and facilitating
conditions. The effect of predictors is moderated by age, gender, experience and
voluntariness of use (Venkatesh et al., 2003)”.

“In Vietnam, the trend of using e-banking services has a great potential
development, According to The World Factbook, Vietnam ranks 14 out of 20
countries with the highest number of Internet banking services in the workd in 2019,
Internet banking services in Vietnam has increased 6.3 times over the past three
years (Vietnam News 2018)”.

Bebli, R. S., (2012). “The Impact of Internet Banking Service Quality on Customer
Satisfaction in the Banking Sector of Ghana”, School of Management: Bleckinge
Institute of Technology.

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