TERM PAPER

ON
“CUSTOMER PERCEPTION TOWARDS
E-BANKING SERVICES”

Submitted to: Submitted By

MS. PRIYA JHAMB PRATEEK
SINGH
Faculty Guide A3104610034
B.Com (H)
Batch: 2010-2013

AMITY COLLEGE OF COMMERCE &

FINANCE

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 AMITY UNIVERSITY, UTTAR PRADESH

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 ACKNOWLEDGMENT

I would like to express my sincere gratitude to my faculty guide Mrs.

Priya Jhamb for her able guidance, continuous support and
cooperation throughout my project, and for providing the
necessary facilities to complete this project.

I am thankful to my parents, family, friends and colleagues for their

support and encouragement.

PRATEEK SINGH

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 TABLE OF CONTENTS

Executive Summary
Introduction
Literature Review
Research Objective &

Methodology
Data Analysis & Results
Conclusion and Suggestions
Bibliography
Annexure

Executive Summary

“E-banking” means the execution of financial services via internet, reducing cost and
increase in convenience for the customer to access the transaction. E-banking is 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

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to one form or another of electronic banking: personal computer (PC) banking, Internet
banking, virtual banking, online banking, home banking, remote electronic banking, and
phone banking. PC banking and Internet or online banking is the most frequently used
designations. It should be noted, however, that the terms used to describe the various types
of electronic banking are often used interchangeably.

The ever increasing speed of internet enabled phones & PDA’s, made the transformation of
banking application to mobile devices, this creates a new subset of electronic banking i.e.
mobile banking.

This study tries to analyze the differences in risk perceptions between bank customers
using E- Banking and those not using E-Banking and it shows that risk perceptions in terms
of financial, psychological and safety risks among non-users was more meaningful than
those using it. Customers not preferring to use E-banking thought that they would be
swindled when using this service, and therefore, are particularly careful about high risk
expectation during money transfers from and between accounts.

Although many major banks have started offering E-banking services, the slow pace will
continue until the mass awareness is created.

Private and foreign banks are trying to turn more and more customer towards the usage of
internet for the banking transaction. This study is basically to know the relation of various
independent variables on the customer usage of internet for banking.

INTRODUCTION

Electronic banking is one of the truly widespread avatars of E-commerce the world over.

Various authors define E-Banking differently but the most definition depicting the meaning
and features of E-Banking are as follows:

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 1. Banking is a combination of two, Electronic technology and Banking.

2. Electronic Banking is a process by which a customer performs banking

Transactions electronically without visiting a brick-and-mortar institutions.

3. E-Banking denotes the provision of banking and related service through

Extensive use of information technology without direct recourse to the bank by
the customer.

Information
Bank
technology

Customer

Figure 1: E-banking principle

NEED FOR E-BANKING

One has to approach the branch in person, to withdraw cash or deposit a cheque or request
a statement of accounts. In true Internet banking, any inquiry or transaction is processed

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online without any reference to the branch (anywhere banking) at any time. Providing
Internet banking is increasingly becoming a "need to have" than a "nice to have" service.
The net banking, thus, now is more of a norm rather than an exception in many developed
countries due to the fact that it is the cheapest way of providing banking services.

Banks have traditionally been in the forefront of harnessing technology to improve their
products, services and efficiency. They have, over a long time, been using electronic and
telecommunication networks for delivering a wide range of value added products and
services. The delivery channels include direct dial – up connections, private networks,
public networks etc and the devices include telephone, Personal Computers including the
Automated Teller Machines, etc. With the popularity of PCs, easy access to Internet and
World Wide Web (WWW), Internet is increasingly used by banks as a channel for
receiving instructions and delivering their products and services to their customers. This
form of banking is generally referred to as Internet Banking, although the range of products
and services offered by different banks vary widely both in their content and sophistication.

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 Figure 2: Electronic banking & its components

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 EVOLUTION OF E-BANKING

The story of technology in banking started with the use of punched card machines like
Accounting Machines or Ledger Posting Machines. The use of technology, at that time,
was limited to keeping books of the bank. It further developed with the birth of online real
time system and vast improvement in telecommunications during late 1970’s and 1980’s.it
resulted in a revolution in the field of banking with “convenience banking” as a buzzword.
Through Convenience banking, the bank is carried to the doorstep of the customer.
The 1990’s saw the birth of distributed computing technologies and Relational Data Base
Management System. The banking industry was simply waiting for these technologies.
Now with distribution technologies, one could configure dedicated machines called front-
end machines for customer service and risk control while communication in the batch
mode without hampering the response time on the front-end machine.

Traditional banking Virtual or E-banking

Gunpowder Nuclear charged

Personalized services, Real time transactions,

time consuming, limited integrated platform, all
access time access

Figure 3: Transition from traditional to E-banking

Intense competition has forced banks to rethink the way they operated their business. They
had to reinvent and improve their products and services to make them more beneficial and
cost effective. Technology in the form of E-banking has made it possible to find alternate
banking practices at lower costs.

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More and more people are using electronic banking products and services because large
section of the banks future customer base will be made up of computer literate customer,
the banks must be able to offer these customer products and services that allow them to do
their banking by electronic means. If they fail to do this will, simply, not survive. New
products and services are emerging that are set to change the way we look at money and
the monetary system.

Figure 4: E-Banking transaction mechanism

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 E-BANKING PRODUCTS
Automated Teller Machine (ATM):
These are cash dispensing machine, which are frequently seen at banks and other locations
such as shopping centers and building societies. Their main purpose is to allow customer to
draw cash at any time and to provide banking services where it would not have been viable
to open another branch e.g. on university campus.
An automated teller machine or automatic teller machine (ATM) is a computerized
telecommunications device that provides a financial institution’s customers a method of
financial\ transactions in a public space without the need for a human clerk or bank teller.
On most modern ATMs, the customer identifies him or herself by inserting a plastic ATM
card with a magnetic stripe or a plastic smartcard with a chip that contains his or her card
number and some security information, such as an expiration date or CVC (CVV). Security
is provided by the customer entering a personal identification number (PIN).
Using an ATM, customers can access their bank accounts in order to make cash
withdrawals (or credit card cash advances) and check their account balances. Many ATMs
also allow people to deposit cash or checks, transfer money between their bank accounts,
pay bills, or purchase goods and services.
Some of the advantages of ATM to customers are:-
1. Ability to draw cash after normal banking hours
2. Quicker than normal cashier service
3. Complete security as only the card holder knows the PIN
4. Does not just operate as a medium of obtaining cash.
5. Customer can sometimes use the services of other bank ATM’s.
Telebanking or Phone Banking:
Telephone banking is relatively new Electronic Banking Product. However it is fastly
becoming one of the most popular products. Customer can perform a number of
transactions from the convenience of their own home or office; in fact from anywhere they
have access to phone. Customers can do following:-
1. Check balances and statement information
2. Transfer funds from one account to another
3. Pay certain bills
4. Order statements or cheque books

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 5. Demand draft request
This facility is available with the help of Voice Response System (VRS).
This system basically, accepts only TONE dialed input. Like the ATM customer has to
follow particular process, initially account number and telephone PIN are fed for the
process to start. Also the VRS system provides the users within additional facilities such as
changing existing password with the new desired, information about new products, current
interest rates etc.
Mobile Banking:
Mobile banking comes in as a part of the banks initiative to offer multiple channel banking
providing convenience for its customer. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile phones are playing great
role in Indian banking- both directly and indirectly. They are being used both as banking
and other channels.
Internet Banking:

The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have
used powerful computer networks to automate million of daily transactions; today, often
the only paper record is the customer’s receipt at the point of sale. Now that their
customers are connected to the Internet via personal computers, banks envision similar
advantages by adopting those same internal electronic processes to home use.

Banks view online banking as a powerful “value added” tool to attract and retain new
customers while helping to eliminate costly paper handling and teller interactions in an
increasingly competitive banking environment. In India first one to move into this area was
ICICI Bank. They started web based banking as early as august 1997.

TYPES OF INTERNET BANKING OR E-BANKING:

Understanding the various types of Internet banking will help examiners assess the risks
involved. Currently, the following three basic kinds of Internet banking are being employed
in the marketplace.
1. Informational- this is the basic level of Internet banking. Typically, the bank has
marketing information about the bank’s products and services on a stand-alone
server. The risk is relatively low, as informational systems typically have no path
between the server and the bank’s internal network. This level of Internet banking
can be provided by the banks or outsourced. While the risk to a bank is relatively

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 low, the server or web site may be vulnerable to alteration. Appropriate controls
therefore must be in place to prevent unauthorized alterations to the bank’s server
or web site.
2. Communicative- this type of Internet banking systems and the customer. The
interaction between the bank’s system and the customer. The interaction may be
limited to electronic mail, account enquiry, loan applications, or static file updates
(name and address change). Because these servers may have a path to the bank’s
internal networks, the risk is higher with this configuration than with informational
systems. Appropriate controls need to be in the place to prevent, monitor, and alert
management of any unauthorized attempt to access the bank’s internal networks
and computer systems. Virus controls also become much more critical in this
environment.
3. Transactional- this level of Internet banking allows customers to execute
transactions. Since a path typically exists between the server and the bank or
outsourcer’s internal network, this is the highest risk architecture and must have the
strongest controls. Customer transactions can include accessing accounts, paying
bills, transferring funds etc.
ADVANTAGES OF INTERNET BANKING

• Convenience- Unlike your corner bank, online banking sites never close;
they’re available 24 hours a day, seven days a week, and they’re only a mouse
click away.
• Ubiquity- If you’re out of state or even out of the country when a money
problem arises, you can log on instantly to your online bank and take care of
business, 24\7.

• Transaction speed- Online bank sites generally execute and confirm

transactions at or quicker than ATM processing speeds.
• Efficiency-You can access and manage all of your bank accounts, including
IRA’s, CDs, even securities, from one secure site.

• Effectiveness- Many online banking sites now offer sophisticated tools,

including account aggregation, stock quotes, rate alert and portfolio managing
program to help you manage all of your assets more effectively.
DISADVANTAGES OF INTERNET BANKING
• Start-up may take time-In order to register for your bank’s online program, you
will probably have to provide ID and sign a form at a bank branch. If you and your
spouse wish to view and manage their assets together online, one of you may have
to sign a durable power of attorney before the bank will display all of your holdings
together.

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 • Learning curves- Banking sites can be difficult to navigate at first. Plan to invest
some time and\or read the tutorials in order to become comfortable in your virtual
lobby.
• Bank site changes- Even the largest banks periodically upgrade their online
programs, adding new features in unfamiliar places. In some cases, you may have
to re-enter account information.

E- BANKING SERVICES:

1. Online bill payment service:

Each bank has tie-ups with various utility companies, service providers and insurance
companies, across the country. It facilitates the payment of electricity and telephone bills,
mobile phone, credit card and insurance premium bills.
To pay bills, a simple one-time registration for each biller is to be completed. Standing
instructions can be set, online to pay recurring bills, automatically. One-time standing
instruction will ensure that bill payments do not get delayed due to lack of time. Most
interestingly, the bank does not charge customers for online bill payment.
2. Fund transfer:

Any amount can be transferred from one account to another of the same or any another
bank. Customers can send money anywhere in India. Payee’s account number, his bank
and the branch is needed to be mentioned after logging in the account. The transfer will
take place in a day or so, whereas in a traditional method, it takes about three working
days. ICICI Bank says that online bill payment service and fund transfer facility have been
their most popular online services.
3. Credit card customers:

Credit card users have a lot in store. With Internet banking, customers can not only pay
their credit card bills online but also get a loan on their cards. Not just this, they can also
apply for an additional card, request a credit line increase and God forbid if you lose your
credit card, you can report lost card online.
4. Investing through Internet banking:

Opening a fixed deposit account cannot get easier than this. An FD can be opened online
through funds transfer. Online banking can also be a great friend for lazy investors.
Now investors with interlinked demat account and bank account can easily trade in the
stock market and the amount will be automatically debited from their respective bank
accounts and the shares will be credited in their demat account.

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Moreover, some banks even give the facility to purchase mutual funds directly from the
online banking system.
So it removes the worry about filling those big forms for mutual funds, they will now be
just a few clicks away. Nowadays, most leading banks offer both online banking and demat
account. However if the customer have there demat account with independent share
brokers, then need to sign a special form, which will link your two accounts.
5. Recharging your prepaid phone:

Now there is no need to rush to the vendor to recharge the prepaid phone, every time the
talk time runs out. Just top-up the prepaid mobile cards by logging in to Internet banking.
By just selecting the operator's name, entering the mobile number and the amount for
recharge, the phone is again back in action within few minutes.
6. Shopping at your fingertips:

Leading banks have tie ups with various shopping websites. With a range of all kind of
products, one can shop online and the payment is also made conveniently through the
account. One can also buy railway and air tickets through Internet banking.
Table 1: List of some banks operating E-Banking in India & their technology vendors

Bank Name Technology Vendor Service offering

ABN AMRO Bank Infosys (Bank Away) NetBanking
Abu Dhabi Commercial Bank Infosys (Bank Away) ADCB NetLink
Bank of India I-flex BOIonline
Citibank Orbitech (now Polaris) Citibank Online
Corporation Bank I-flex CorpNet
Deutsche Bank db direct
Federal Bank Sanchez FedNet
Global Trust Bank Infosys (BankAway) ibank@gtb
HDFC Bank i-flex/ Satyam NetBanking
HSBC Online@hsbc
ICICI Bank Infosys, ICICI Infotech Infinity
IDBI Bank Infosys (Bank Away) i-net banking
IndusInd Bank CR2 IndusNet
Punjab National Bank Infosys (Bank Away) Internet Banking
Standard Chartered Bank In-House Me Standard Chartered Online
State Bank of India Satyam/Broadvision onlinesbi.com
UTI Bank Infosys (Bank Away) I connect

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 INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our
traditional method of banking and is reluctant to use online banking. But here are few cases
where Internet banking will turn out to be a better option in terms of saving your money.
'Stop payment' done through Internet banking will not cost any extra fees but when done
through the branch, the bank may charge you Rs 50 per cheque plus the service tax.
Through Internet banking, you can check your transactions at any time of the day, and as
many times as you want to.
On the other hand, in a traditional method, you get quarterly statements from the bank and
if you request for a statement at your required time, it may turn out to be an expensive
affair. The branch may charge you Rs 25 per page, which includes only 30 transactions.
Moreover, the bank branch would take eight days to deliver it at your doorstep.
If the fund transfer has to be made outstation, where the bank does not have a branch, the
bank would demand outstation charges. Whereas with the help of online banking, it will be
absolutely free for you.
As per the Internet and Mobile Association of India's report on online banking 2006,
"There are many advantages of online banking. It is convenient, it isn't bound by
operational timings, there are no geographical barriers and the services can be offered at a
miniscule cost."

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 IMPACT OF E-BANKING ON TRADITIONAL SERVICES

One of the issues currently being addressed is the impact of e-banking on traditional
banking players. After all, if there are risks inherent in going into e-banking there are other
risks in not doing so. It is too early to have a firm view on this yet. Even to practitioners the
future of e-banking and its implications are unclear. It might be convenient nevertheless to
outline briefly two views that are prevalent in the market.The view that the Internet is a
revolution that will sweep away the old order holds much sway. Arguments in favor are as
follows:
E-banking transactions are much cheaper than branch or even phone transactions. This
could turn yesterday’s competitive advantage - a large branch network - into a comparative
disadvantage, allowing e-banks to undercut bricks-and-mortar banks. This is commonly
known as the "beached dinosaur" theory.
E-banks are easy to set up so lots of new entrants will arrive. ‘Old-world’ systems, cultures
and structures will not encumber these new entrants. Instead, they will be adaptable and
responsive. E-banking gives consumers much more choice. Consumers will be less inclined
to remain loyal.
E-banking will lead to an erosion of the ‘endowment effect’ currently enjoyed by the major
UK banks. Deposits will go elsewhere with the consequence that these banks will have to
fight to regain and retain their customer base. This will increase their cost of funds,
possibly making their business less viable. Lost revenue may even result in these banks
taking more risks to breach the gap.
Portal providers are likely to attract the most significant share of banking profits. Indeed
banks could become glorified marriage brokers. They would simply bring two parties
together – eg buyer and seller, payer and payee.
The products will be provided by monolines, experts in their field. Traditional banks may
simply be left with payment and settlement business – even this could be cast into doubt.
Traditional banks will find it difficult to evolve. Not only will they be unable to make
acquisitions for cash as opposed to being able to offer shares, they will be unable to obtain
additional capital from the stock market. This is in contrast to the situation for Internet
firms for whom it seems relatively easy to attract investment.
There is of course another view which sees e-banking more as an evolution than a
revolution.
E-banking is just banking offered via a new delivery channel. It simply gives consumers
another service (just as ATMs did).
Like ATMs, e-banking will impact on the nature of branches but will not remove their
value.

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.Traditional banks are starting to fight back. The start-up costs of an e-bank are high.
Establishing a trusted brand is very costly as it requires significant advertising expenditure
in addition to the purchase of expensive technology (as security and privacy are key to
gaining customer approval).
E-banks have already found that retail banking only becomes profitable once a large critical
mass is achieved. Consequently many e-banks are limiting themselves to providing a
tailored service to the better off.
Nobody really knows which of these versions will triumph. This is something that the
market will determine. However, supervisors will need to pay close attention to the impact
of e-banks on the traditional banks, for example by surveillance of:
1. Strategy

2. Customer levels

3. Earnings and costs

4. Advertising spending

5. Margins

6. Funding costs

7. Merger opportunities and threats.

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 THE INDIAN SCENARIO

Drivers of change
Advantages previously held by large financial institutions have shrunk considerably. The
Internet has leveled the playing field and afforded open access to customers in the global
marketplace. Internet banking is a cost-effective delivery channel for financial institutions.
Consumers are embracing the many benefits of Internet banking. Access to one's accounts
at anytime and from any location via the World Wide Web is a convenience unknown a
short time ago. Thus, a bank's Internet presence transforms from 'brouchreware' status to
'Internet banking' status once the bank goes through a technology integration effort to
enable the customer to access information about his or her specific account relationship.
The six primary drivers of Internet banking includes, in order of primacy are:
1. Improve customer access
2. Facilitate the offering of more services
3. Increase customer loyalty
4. Attract new customers
5. Provide services offered by competitors
6. Reduce customer attrition

From the perspective of banking products and services being offered through Internet,
Internet banking is nothing more than traditional banking services delivered through an
electronic communication backbone, viz, Internet. But, in the process it has thrown open
issues which have ramifications beyond what a new delivery channel would normally
envisage and, hence, has compelled regulators world over to take note of this emerging
channel.
Some of the distinctive features of E-banking are:
1. It removes the traditional geographical barriers as it could reach out to customers of
different countries / legal jurisdiction. This has raised the question of jurisdiction of law /
supervisory system to which such transactions should be subjected,
2. It has added a new dimension to different kinds of risks traditionally associated with
banking, heightening some of them and throwing new risk control challenges,
3. Security of banking transactions, validity of electronic contract, customers’ privacy, etc.,
which have all along been concerns of both bankers and supervisors have assumed
different dimensions given that Internet is a public domain, not subject to control by any
single authority or group of users,

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4. It poses a strategic risk of loss of business to those banks who do not respond in time, to
this new technology, being the efficient and cost effective delivery mechanism of banking
services,
5. A new form of competition has emerged both from the existing players and new players
of the market who are not strictly banks.
Figure 5: E-banking in various countries

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 Literature Review

• Product and Technology group, ICICI Bank, in its paper “Corporate banking
using technology in transactions” it was inferred that Information Technology has
revolutionized the services and mode of services offered by the banks to their
corporate clients. The emergence of E-Banking has enabled the banks to offer real-
time transactions and integrate all customers’ related functions. Indian Banks are
utilizing the new technology to provide better technology and convenient access to
its customers and India is thus poised to for a huge growth in the world of
electronic banking.

• Chandana R, Unnithan, Paula M.C., Swatman in their research paper titled “E-
Banking Adaptions and Dot.Com viability: A comparison of Australian and Indian
experiences in the Banking sector” a comparative study of Australian and Indian
experiences in eBusiness was done, which seeks to identify the effectiveness of
dot.coms as indicators of eBusiness uptake and success on a sector-by-sector basis
was undertaken. It was concluded that the banking industry is now a very mature
one and banks are being forced to change rapidly as a result of open-market forces
such as the threat of competition, customer demand, and technological innovations
such as the growth of the Internet. E-Banking is a successful strategic weapon for
banks to remain profitable in a volatile, and competitive market place of today in
both Indian and Australian Economies despite the differences of IT usage.

• G. Kannabiran and P.C. Narayan discuss in their article the experiences of a

private-sector bank in deploying Internet banking and eCommerce in India.
Strategic alignment of business and IT strategies, planning and implementation of
e-banking initiatives, and management of benefits have been captured, along with
key contributions to development.
• Huggins points to the fact that traditional boundaries in banking are disappearing.
Using eBusiness methods, major retailers and telecom providers are starting to offer
financial services to their clients. Extending the value chain and offering versatile
services seems to be the key to retaining competitiveness in the sector. Attitudes are
also shifting from direct transactions to savings and investments, as the baby
boomers reach their fortis and fifties, and prepare for retirement.

• Mario Martinez Guerreroin his paper titled “Profiling the adoption of Online
banking Services in the European Union” offers an empirical investigation on the
adoption of online banking services among European citizen. The use of e-banking
services is explained on the basis of socio-demographic and Internet –specific
behavioral indicators. The performed analyses provide support for the influence of
country, age, profession and several Internet behaviors on the use of E-banking.

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 • The Indian Internet Banking Journey In 2001, a Reserve Bank of India survey
revealed that of 46 major banks operating in India, around 50% were either offering
Internet banking services at various levels or planned to in the near future.
According to a research report,( India Research, Kotak Securities, May 2000.)
while in 2001, India's Internet user base was an estimated 9 lakh; it was expected to
reach 90 lakh by 2003. Also, while only 1% of these Internet users utilized the
Internet banking services in 1998, the Internet banking user base increased to
16.7% by mid- 2000.

Customers usually perceive risks in conducting transactions electronically and

particularly if the transactions involve money. Risk perception can be of six
different types: time risk, finacial risk, performance risk, psychological risk and
safety/confidentiality risk. It is generally considered that risk perception could be
higher for electronic banking services. This study aims to understand extent to
which whether this is consideration is valid as well as to determine the levels of risk
perception differences among those using Internet Banking and those not using it.

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 RESEARCH OBJECTIVE

Each research study has its own specific purpose. This research study has the following
objectives:-

• To study the awareness level of people regarding E-Banking.

• To find out the factors that influences the adoption of E-Banking services.

• To find out the differences in risk perception between those using E-Banking and
those not using E-banking.

• To know the causes why customers are not using internet banking.

• To find out the main reasons for which people use internet banking.

RESEARCH METHODOLOGY

TITLE JUSTIFICATION:
This study mainly deals with the analysis of the differences in risk perceptions between
bank customers using Internet Banking and those not using Internet Banking and it showed
that risk perceptions in terms of financial, psychological and safety risks among customer
not using the internet was more meaningful than those using internet banking. Customers
not preferring to use internet banking thought that they would be swindled when using this
service, and therefore, are particularly careful about high risk expectation during money
transfers from and between accounts.

SCOPE OF THE STUDY:

Although many major banks have started offering E-banking services, the slow pace will
continue until the critical mass is achieved for PC, internet connections and telephones.
However, the upsurge of service class with growing demands is pressurizing the
government and bureaucracy in the country to support and develop new initiatives for a
faster spread of E-banking. But then to there is a fear in the mind of customer using internet
as a medium for the banking transaction.
Private and foreign banks are trying to turn more and more customer towards the
usage of internet for the banking transaction. This study is basically to know the relation of
various independent variables on the customer usage of internet for banking.

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 RESEARCH DESIGN
RESEARCH TYPE
We use descriptive research and exploratory research design in our studies. Descriptive
research is also called Statistical Research. The main goal of this type of research is to
describe the data and characteristics about what is being studied. Descriptive research is
used to obtain information concerning the current status of the phenomena to describe
"what exists" with respect to variables or conditions in a situation.
Here we also tried to find out the main cause why there is perceptual blocking of the Indian
customers towards internet banking. The methods involved range from the survey which
describes the status quo, the correlation study which investigates the relationship between
variables, to developmental studies which seek to determine changes over time.

DATA COLLECTION
Primary Data: Structured Questionnaire
Secondary Data: Online Database, Journals, Surveys

SAMPLING
We have used convenience sampling technique. It is also called haphazard or accidental
sampling. Members of the population are chosen based on their relative ease of access. To
sample friends, co-workers, or shoppers at a single mall, are all examples of convenience
sampling. Sometimes called grab or opportunity sampling, this is the method of choosing
items arbitrarily and in an unstructured manner from the frame. Though almost impossible
to treat rigorously, it is the method most commonly employed in many practical situations.
Sample Technique: Convenience sampling
Sample Area: NCR
Sample Size: 120
LIMITATIONS OF THE STUDY:

• The survey was done in the NCR region and may not truly express the opinion of
the whole country.

• There is lack awareness on the part of people about E-banking.

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 • Most of the people are not techno-savvy. Though internet penetration is growing
still it is not at that level.

• Sample Size of the research may not be substantial.

• There was a lack of time on the part of respondents.

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 DATA ANALYSIS & INTERPRETATION

1) Age group :

1).18-25__,
2). 26-35__,
3).36-45__,
4).46-60__,
5).60 +____Years

Statistics

agegroup

N Valid 120

Missing 0

Mean 2.2083

Median 2.0000

Mode 2.00

Std. Deviation 1.17320

Variance 1.376

agegroup

Cumulative
Frequency Percent Valid Percent Percent

Valid 18-25 40 33.3 33.3 33.3

26-35 42 35.0 35.0 68.3

36-45 16 13.3 13.3 81.7

46-60 17 14.2 14.2 95.8

60+ 5 4.2 4.2 100.0

Total 120 100.0 100.0

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INTERPRETATION:

From the above graph we can see that the maximum no. of respondents are in the age group
of 26-35 with a frequency of 42. The second highest no. of respondents lie in the age group
of 18-25.

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 2) Gender : 1) Male 2) Female

Statistics

Gender

N Valid 120

Missing 0

Mean 1.3250

Median 1.0000

Mode 1.00

Std. Deviation .47034

Variance .221

Gender

Cumulative
Frequency Percent Valid Percent Percent

Valid male 81 67.5 67.5 67.5

female 39 32.5 32.5 100.0

Total 120 100.0 100.0

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INTERPRETATION:

The above graph shows another demographic variable of the respondent set i.e gender.
From the above bar chart we can see that the maximum no. of respondents were male with
a frequency of 80% and the rest were females.

3) Frequency of visiting your bank branch per month?

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

agegroup * Frequency of
visiting your bank branch per 120 100.0% 0 .0% 120 100.0%
month?

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 agegroup * Frequency of visiting your bank branch per month? Crosstabulation

Count

Frequency of visiting your bank branch per month?

Less than 1 1 to 3 times 3 to 8 times 8 to 12 times over 12 times Total

agegroup 18-25 15 4 7 0 14 40

26-35 10 10 5 7 10 42

36-45 1 0 4 8 3 16

46-60 0 9 0 2 6 17

60+ 0 4 0 0 1 5

Total 26 27 16 17 34 120

Chi-Square Tests

Asymp. Sig. (2-

Value df sided)

Pearson Chi-Square 60.143a 16 .000

Likelihood Ratio 67.364 16 .000

Linear-by-Linear Association 1.103 1 .294

N of Valid Cases 120

a. 15 cells (60.0%) have expected count less than 5. The minimum

expected count is .67.

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INTERPRETATION:

Here we have plotted a cross tab between the two variables i.e age group and frequency of
visit to the branch. The cross tab helps us to find that whether there is any association
between the two variables. Pearson Chi-square test statistic value of .000 shows that there
is an association between the two variables. We can see from the chart that maximum no.
of respondents in the age group 18-25 visit less than 1 and maximum no. respondents in the
age group 26-35 visit over 12 times.

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 4) Which of the following e-banking facilities do you think should
be provided by your bank?(please choose the single most
important one)

1. Internet banking
2. Telephone banking
3. Mobile banking
4. SMS banking

INTERPRETATION:

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The above pie chart shows that 40.8% of the respondents thought of Internet Banking as a
must to be provided by there bank. The second most important E-banking facility was the
M-banking with a percentage of 26.7%.

5) The main reason that you typically visit your bank branch
(please choose the single most important reason)?

1. To make a deposit
2. To get advice for investment options
3. To inquire about a balance
4. To withdraw cash
5. Others

Statistics

The main reason that you typically visit your branch for?

N Valid 120

Missing 0

Mean 2.8417

Median 3.0000

Mode 3.00a

Std. Deviation 1.22300

Variance 1.496

a. Multiple modes exist. The smallest value is shown

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 The main reason that you typically visit your branch for?

Cumulative
Frequency Percent Valid Percent Percent

Valid To make a deposit 25 20.8 20.8 20.8

To get advice for investment

18 15.0 15.0 35.8
options

To inquire about a balance 35 29.2 29.2 65.0

To withdraw cash 35 29.2 29.2 94.2

Others 7 5.8 5.8 100.0

Total 120 100.0 100.0

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INTERPRETATION:

The above pie chart shows the most important reason for which a person visits the bank
branch. As we can see from the graph that 29.2% of the respondents said that they visit the
bank to withdraw cash. Another 29.2% of the respondents visited to inquire about the
balance whereas 20.8% respondents visited bank for making a deposit to there account.

6) Do you have an internet banking account?

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 a) Yes
b) No

Statistics

Do you have an internet banking

account?

N Valid 120

Missing 0

Mean 1.2583

Median 1.0000

Mode 1.00

Std. Deviation .43955

Variance .193

Do you have an internet banking account?

Cumulative
Frequency Percent Valid Percent Percent

Valid yes 89 74.2 74.2 74.2

no 31 25.8 25.8 100.0

Total 120 100.0 100.0

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 Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

agegroup * Do you have an

120 100.0% 0 .0% 120 100.0%
internet banking account?

agegroup * Do you have an internet banking account?

Crosstabulation

Count

Do you have an internet banking

account?

yes no Total

agegroup 18-25 34 6 40

26-35 39 3 42

36-45 14 2 16

46-60 12 5 17

60+ 1 4 5

Total 100 20 120

Chi-Square Tests

Asymp. Sig. (2-

Value df sided)

Pearson Chi-Square 19.451a 4 .001

Likelihood Ratio 15.045 4 .005

Linear-by-Linear Association 8.342 1 .004

N of Valid Cases 120

a. 4 cells (40.0%) have expected count less than 5. The minimum

expected count is .83.

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INTERPRETATION:

The above graph shows the association between age group and user- non-user status. The
Pearson chi-square value of .001 shows that there is an association between the two.
As we can see that the most of the respondents in the age group 26-35 have an internet
banking account and very few of the respondents in the age group 60+ have an internet
account.

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 7) What banking services do you use which your Internet bank offers? (Please check
all those which you are currently using)

1. Seeking product and rate information

2. Calculate loan payment information
3. Download loan applications
4. Download personal bank transaction activity.
5. Check balances on-line
6. Apply for consumer loans or credit cards online
7. Inter-account transfers
8. On-line bill payments
9. Others

Case Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

$var22a 100 83.3% 20 16.7% 120 100.0%

a. Dichotomy group tabulated at value 1.

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 $var22 Frequencies

Responses

N Percent Percent of Cases

banking servicesa prodinfo 55 11.9% 55.0%

loaninfo 57 12.3% 57.0%

Down_loanapp 52 11.2% 52.0%

Trans_activity 45 9.7% 45.0%

Chk_balance 57 12.3% 57.0%

Apply_loan 34 7.3% 34.0%

Acc_transfer 72 15.6% 72.0%

Bill_payment 69 14.9% 69.0%

others 22 4.8% 22.0%

Total 463 100.0% 463.0%

a. Dichotomy group tabulated at value 1.

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INTERPRETATION:

The above graph shows the type of services that most internet account holders use.
As we can see from the graph that most of the internet bank users use there internet
account for making transfer of funds, followed up by payment of bills online with a
percentage of 15%.

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 8) What was the single most important reason that you choose
your current bank as your Internet bank? (please choose one)

1. I have a traditional bank account with the same bank

2. The brand name of the bank
3. The excellent service offered by this bank
4. Other

INTERPRETATION:

The pie chart above shows for what reason the respondents choose there current
bank as there internet bank. Most of the respondents had an internet bank account
because of the brand name of the bank. 32% had an account in the bank in which
they had a traditional account. 28% opened because of the excellent services
provided.

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 9) In addition to your Internet bank account, do you also have a
traditional bank account?

1. Yes
2. No

Statistics

Do you also have a traditional bank account in addition to an internet

account?

N Valid 100

Missing 20

Mean 1.0000

Median 1.0000

Mode 1.00

Std. Deviation .00000

Variance .000

Do you also have a traditional bank account in addition to an internet account?

Cumulative
Frequency Percent Valid Percent Percent

Valid yes 100 83.3 100.0 100.0

Missing System 20 16.7

Total 120 100.0

INTERPRETATION:

The above table shows that all the respondents who had an internet banking account also
had a traditional baking account.

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 10) What are the reasons for which you opened an Internet
bank account? (Please prioritize the following list in the order of
importance).

(Rank on a scale of 1-6 where1 being the most important & 6 being the least
important)

1. Convenience (24 hours service, anywhere connectivity) ______________

2. Curiosity______________
3. Safe and secure______________
4. Low service charge______________
5. Easy to maintain my banking transaction activity______________
6. Online shopping ___________________

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INTERPRETATION:

The above graph shows the ranking of the reasons why respondents had opened an internet
banking account. We rated the factors on a 6 point rating scale ranging from most
important to least important. Most of the respondents gave convenience as rank1. The
second most important factor was ease of maintenance.

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 11) For your choice of an Internet bank, please indicate how
much each of the following factors are/were important to you:
(Rate on a scale of 1-6 where 1 being most important & 6 being least
important)

1. Better rate and lower service charge______________

2. Bank familiarity______________
3. Security of Transaction______________
4. Convenience (24 hours service from anywhere) ______________
5. Quick service (transaction completed in seconds instead of
minutes) ______________
6. Variety of features and services that are offered(for example; bill
payment, account reconciliation, electronic bill payment)
______________
7. Integrated value-added services using other on-line services and
resources (for example; other brokerage account summary)
______________

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47 | P a g e
INTERPRETATION:

The above graph rates the decisive factors when opening a internet banking account. Most
of the gave rank 1 to convenience(24 hour service from anywhere).
The second most important factor was security of transaction.
The third most important factor was the familiarity with the bank.

12)The main reasons that you might fear for while opening an
Internet bank account ? (check all that apply)

1. Never heard of Internet banking

2. Concerned about security

3. Haven't taken time to open an account

4. Don't see any real value in having this type of account

5. Too new. I would like to see how it works, then I may open an account

6. Not available through my bank

7. Others

Case Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

$var33a 120 100.0% 0 .0% 120 100.0%

a. Dichotomy group tabulated at value 1.

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 $var33 Frequencies

Responses

N Percent Percent of Cases

reasons not opening a e- Var_unaware 65 17.3% 54.2%

a
bank acc Var_security 80 21.3% 66.7%

Var_timeconst 38 10.1% 31.7%

Var_novalue 34 9.0% 28.3%

Var_new 83 22.1% 69.2%

Var_unavailable 44 11.7% 36.7%

Var_others 32 8.5% 26.7%

Total 376 100.0% 313.3%

a. Dichotomy group tabulated at value 1.

INTERPRETATION:

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The above graph shows why most of the people are afraid of opening an internet banking
account and what are the reasons behind it.

Most of the respondents were concerned about the security of transactions-21%.

The second constraint was that people are still unaware about it-17%.

The third major constraint was that the bank doesn’t have such a service-12%

CONCLUSIONS

The study tries to figure out what are the factors that affect the usage behavior of the
customers towards E-banking services and what are the reasons for perceptual blocking
towards E-banking.

The conclusions that can be drawn are:

1. Most of the people use E-banking because of the ease and convenience of doing
transactions 24 hours from anywhere.
2. Most of the people in the age group of 18-35 i.e the youth are familiar with the
concept of E-banking and are among the prominent users of this facility.
3. Most of the people open an internet banking account with a bank because of the
brand name of the bank and also due to the fact that they have a traditional banking
account with the same bank.
4. Most of the people in the age group of 46+ are either unaware or have a disinterest
in the service. They are more satisfied with traditional system of banking.
5. The reasons for not opening an internet account are mainly due to unawareness or
due to security concerns.

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 6. Most of the people who do internet banking do so for online transaction of money
and for shopping purposes.
7. The masses are still not using the services thoroughly due to various hurdling
factors like insecurity and fear of hidden costs etc.

SUGGESTIONS
E-banking would drive us into an age of creative destruction due to non-physical exchange,
complete transparency giving rise to perfectly electronic market place and customer
supremacy. We can see the time is changing and with the passage of time people are
accepting technology but there is still a lot of perceptual blocking still to be removed.

The banks need to increase the penetration of E-banking to the masses. This can be
achieved through increasing the awareness levels of the customers towards E-banking.
Some of the ways to do this are:

1. Give proper training to customers for using E-banking.

2. Create a trust in the mind of customers towards security of there accounts.

3. Provide a platform from where the customers can access different accounts at single
time without extra charge.

4. Make the site more user friendly.

5. Customers should be motivated to use E-banking facilities more.

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 Bibliography

BOOKS

1. Marketing research by BERRY G.C

2. Marketing Research by Malhotra N.K. , fifth edition

3. E-banking: the global perspective by Gupta Vivek

4. E-Commerce in Indian banking by Bhasin

WEBSITES

http://www.icmrindia.org/free%20resources/casestudies/banking1.htm#b1

www.banknetindia.com

www.google.com

SOFTWARE’S USED

1. SPSS

2. MS-EXCEL

3. MS-WORD

52 | P a g e
 ANNEXURE
QUESTIONNAIRE:

1. Frequency of visiting your bank branch per month?

1. Less than 1
2. 1 to 3 times
3. 3 to 8 times
4. 8 to 12 times
5. over 12 times

2. The main reason that you typically visit your bank branch (please
choose the single most important reason)?

a) To make a deposit
b) To get advice for investment options
c) To inquire about a balance
d) To withdraw cash
e) Others

3. Which of the following e-banking facilities do you think should be

provided by your bank?(please choose the single most important one)

a) Internet banking
b) Telephone banking
c) Mobile banking
d) SMS banking

4. Do you have an internet banking account?

a) Yes
b) No

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If the answer to the previous Question is Yes, please answer Item no.5
to 9. Otherwise please skip Item no.5 to 9.

5. What are the reasons for which you opened an Internet bank account?
(Please prioritize the following list in the order of importance).

(Rank on a scale of 1-6 where1 being the most important & 6 being the least
important)

a) Convenience (24 hours service, anywhere connectivity)

______________
b) Curiosity______________
c) Safe and secure______________
d) Low service charge______________
e) Easy to maintain my banking transaction activity______________
f) Online shopping ___________________

6. What banking services do you use which your Internet bank offers? (Please check all
those which you are currently using)

a) Seeking product and rate information

b) Calculate loan payment information
c) Download loan applications
d) Download personal bank transaction activity.
e) Check balances on-line
f) Apply for consumer loans or credit cards online
g) Inter-account transfers
h) On-line bill payments
i) Others
7. What was the single most important reason that you choose your
current bank as your Internet bank? (please choose one)

a) I have a traditional bank account with the same bank

b) The brand name of the bank
c) The excellent service offered by this bank
d) Others

8. In addition to your Internet bank account, do you also have a traditional

bank account?

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 a) Yes
b) No
9. For your choice of an Internet bank, please indicate how much each of
the following factors are/were important to you:
(Rate on a scale of 1-6 where 1 being most important & 6 being least
important)

1. Better rate and lower service charge______________

2. Bank familiarity______________

3. Security of Transaction______________

4. Convenience (24 hours service from anywhere) ______________

5. Quick service (transaction completed in seconds instead of

minutes) ______________

6. Variety of features and services that are offered(for example; bill

payment, account reconciliation, electronic bill payment)
______________

7. Integrated value-added services using other on-line services and

resources (for example; other brokerage account summary)
______________

10.The main reasons that you might fear for while opening an Internet bank
account ? (check all that apply)

1. Never heard of Internet banking

2. Concerned about security

3. Haven't taken time to open an account

4. Don't see any real value in having this type of account

5. Too new. I would like to see how it works, then I may open an
account

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 6. Not available through my bank

7. Others

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