Certificate in Services Marketing

Assignment Topic

Student Name
Reg. No.

Individual Assignment

December 2021

Sri Lanka Institute of Marketing

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Assignment Marking Scheme – CSM II – 2021 (For the use of the
examiners only)

Programme Certificate in Services Marketing

Assignment Topic
Student Registration Number
(to be filled by the students)
Allocation of marks (Please Use only a RED PEN from this point onwards)
Area of evaluation Weightage Marks Awarded
Introduction to the organization 10%

Identification of a service gap 35%

Recommendations to improve, overcome or 35%

minimize the identified problem
Following assignment guidelines 20%

Total 100%

Late Marks

Final marks of evaluation

Overall comments by the examiner

100

Signature of Examiner Signature of

Education officer
& Date
Important: This should be attached to the assignment AFTER THE COVER PAGE
INTRODUCTION TO THE ORGANIZATION

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DFCC bank is one of the oldest development banks in Asia. A unique institution; private sector
in form but more like a public-private partnership in outlook, DFCC Bank was set up under an
act of Parliament, to give rise to the post independent industrial growth through private sector
participation in year 1955. DFCC Bank came in to the new Millennium with a standard shift in
its business model. New subsidiaries engaged in Consulting and IT services were launched and
the investment banking business was re-engineered. Also in 2003 DFCC acquired MERC Bank
and renamed as DFCC Vardhana Bank and commenced commercial banking business by
offering all the products and services under commercial banking. In the year 2015 a milestone
event in Sri Lanka’s banking and financial sector, DFCC Bank PLC and DFCC Vardhana Bank
amalgamated to form a fully-fledged commercial bank supervised by the Central Bank of Sri
Lanka. The joint synergies and the combined development banking and commercial banking
resources of the merged entities, strengthen and position DFCC Bank PLC as a force to be
reckon with in the financial services industry. The Bank currently operates 138 branches around
the country, and customers are serviced by over 2000 committed employees with expertise in
various disciplines.

KEY BUSINESS

DFCC Bank wants to be the most customer centric bank in Sri Lanka empowered with
innovations and with a professional touch to the banking industry, while be ethical in practices
and accountable to all the stakeholders of the bank, and also mostly on team oriented work force
and contribute everything best to the society. In this journey DFCC Bank offering the entire key
products pertaining to banking industry with some added benefits to the customers. Products
such as,

 All Accounts – Savings, Current, Fixed Deposits, Minor Accounts.

 Loans - Corporate, Personal, Housing, Leasing, Project, SME, MSME.

 Credit Cards.

 Digital Banking Platform & Trade Services.

SERVICE EXPERIENCE

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Interest in present quality services plays an important role in industries such as insurance
services, banking, etc, since services quality is a fundamental issue for the survive of and
profitability of the organization. Indeed today customer's satisfaction and services quality are
considered as vital issues in most servicing industries, especially in relation to financial services
in which the separation of services is generally difficult. Presenting a service with superior
quality and presenting services continuously on excellent level to the customers make
competitive advantages for the bank such as making competitive barriers, customers' loyalty,
presenting separated products, decreasing marketing costs, etc.

Banking industry boasts among only a few sectors adapted to innovation and technological
enhancements taken place within the globe at the early stages. Most of the backend, manual
processes of banks were replaced by automated core-banking systems creating the initial base for
technological movement in the banking industry. Eventually front line of the banks also
converted to alternative digital channels with paradigm shift in service delivery point of the
customers. Introduction of ATM’s revolutionized the banking industry and created escalated
avenues for banks to explore more of alternative channels to serve customers rather than sticking
in to wide branch network involved with huge cost. One of the modest alternative channels were
online banking and thereafter in line with technology advancements, other digital channels were
expanded enabling banks to perform their targets more efficiently.

Furthermore, change in customer life style has been another main reason behind delivery of
various digital banking channels. As apparent, people are always on the go with busy life
schedules resulting, time and convenience to be critical factors in determining engagement of
banking activities. Hence, reaching customers anytime anywhere has become the underline
purpose of banking industry which can be only delivered through technological implications.

Therefore, banks competitively invest more on offering and improving digitally enabled
transactional platforms for customers even though initial expenditure to set up the required
technological infrastructure is quite high. In Sri Lankan context, it is evident that many banks
have taken steps to launch digital banking platform considering it as a pre requisite in providing
services to customers.

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According to a research done by Suraweera (2011) on the subject, it was demonstrated that
customers are reluctant to adapt to digital banking services despite the adequate advantages
visible. Thus based on revision of literature, we are deemed to focus on dynamics specified in
adopting to digital banking services [Bagozziand Warshaw(1989), Mathieson (1991), Rasheed &
Latif (2011), Shih (2004), Weerasekara (2011), Wijesiriwardana, K (2011)].

Figure 1: Client’s Preferences on Banking Channels

Source: Survey data - Wijayaratne K (2015)

While considering the above factors and ideas it was noted that customers are more intended to
use the digitally enabled banking platforms to perform their daily banking needs. Mostly
youngsters are keen to adapt to this online platforms since that will create easiness in their day to
day life. Providing well designed and secured digital banking platforms are essential in present
and customer satisfaction also increase with the availability of such systems.

DFCC bank had some issues with the online banking platform in recent time, systems were
down for some urgent maintenance and the scheduled time slot is only few hours. But they
failed to put the service back in order and due to that customer satisfaction was reduced
and caused many issues and complains. This created a negative impact towards the new
clients and future prospective customers.

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 Gap analysis model

According to the above gap analysis model defined services quality as the distance/gap between
customers' expectations from their services and their understandings from the qualities received. Gap
analysis model is the cooperation between the organizations' activities and the link between these
activities and the satisfactory level of the quality offered from the standpoint of the customers. In this
model, existing gaps between the effective factors on services quality and customers' expectations after
investigating them. This scenario uses gap No. 5 of gap analysis model in order to investigate statistical
assumptions based on customers' opinions the gray part of which is considered in order to perform the
research.

The difference between customers' expected services and the presented ones: It is obvious that
each of the four above-mentioned gaps leads to the non satisfaction of the customer or the fifth
gap. The fifth gap is indeed the result of the existence of gaps No. 1-4 such that the fifth gap
decreases or is eliminated with decreasing or eliminating each of the four gaps. Therefore the

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management of the organization can decrease the fifth gap by trying to decrease or eliminate
each of the gaps 1-4 improving the quality of the products of the organization.

An active management knows that eliminating gap #5 is not possible; since customers' needs
change repeatedly and on the other hand, the quality services presented by the competitors
become better and better day by day. Therefore first the management should identify the reasons
of the non-satisfaction of its customers trying to conform customers' needs to quality
specifications of the products presented. In addition, this process must be performed repeatedly
by the manager whose result is continuous improvement which is undoubtedly one of the
important reasons in the success of leading organizations throughout the world.

Since most services are immediately presented by a person to another one, decreasing the
servicing performance gap is extensively dependant on the procedures of human resources.
Researches show that both satisfaction of the customer and the employee have positive
relationships with each other and, staff have a direct effect on customers' services and
satisfaction. The reaction of the staff especially in relation to weaknesses and disabilities of the
system of presenting services and demands and needs of the customers and their independent
behaviors/tasks in order to help the customers is responsible and the basis of investigating
customers from the services.

Meantime following areas also can be taken into the consideration while discussing about
expected service and perceived service in digital banking platform.

 Technology Gap - This involves the gap between customers’ expectations regarding ease
of use of a bank digital banking platform and the actual functionality and usability of
those. Digital banking customers must be able to use the website and applications
functions smoothly without facing any difficulties Thus, customers’ intention to use e-
banking services is affected by the level of usefulness Therefore, website functionality
and usefulness need to be enhanced by the bank accordingly.

 Service Reliability Gap - This indicates the gap between customers’ expectations of
bank reliability and digital banking fulfillment. Customers have a better perception of
service quality when the digital banking fulfills their needs as promised through the
website interface. Furthermore, several studies show that service reliability in online

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 banking has the greatest influence on customer satisfaction in Internet banking services
Hence, the ability to meet the promised standards of service reliability must be enhanced
while providing service over the Internet.

 Technical Knowledge Gap - This represents the gap between customers’ level of
technical knowledge and the digital banking platform’s level of design complexity.
Customers’ lack of technical knowledge affects their intention to use online banking
services. In fact, customers with low level of technical knowledge are hesitant to interact
with banking websites due to the complexity and fear of insecurity. In addition, older
generations (65 + years old) are found to be less likely to use digital banking compared to
younger ones (between 25 and 34 years old), owing to lack of technical knowledge
(Clark, 2016). Therefore, websites’ level of design meets customers’ (particularly, the
elderly) level of technical knowledge.

 Security Assurance Gap - This implies the gap between the promised level of security
to customers and delivered privacy and security by the bank website. Security of Internet
banking is one of the major concerns that affect customers when using e-banking.
Customer confidence on e-banking depends mainly on the level of security promised by
the bank in protecting personal information and/or deal with preventing unauthorized
transactions or access.

 Human Interaction Gap - This indicates the gap between customers’ need for human
interaction and the bank website’s responsiveness. Similar to most e-commerce
businesses, the availability of human interaction increases customer satisfaction and plays
an important role in gaining customers’ trust in the services provided In fact, customers
consider the absence of human interface affects the time and speed of processing their
online requests. Consequently, this has a significant negative influence on customers’
loyalty. Therefore, bank needs to find possible approaches, such as 24/7 customer service
chat, to compensate the absence of human interactions in e-banking to mitigate this gap.

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Customers’ intention to use digital banking is influenced by many factors. Several research
studies suggested that ease of use and usefulness significantly affect customers’ intention to
utilize digital banking. On the other hand, concluded that user’s knowledge significantly affects
customers’ willingness to use digital banking.  Service Quality Model (SERVQUAL) to measure
the service quality on DB. The SERVQUAL model is widely used to measure the service quality
in service industry using quality determinates. This evaluation model relies on five measurement
categories: tangibility, which refers to the physical and actual appearance of the facilities,
personnel, and goods; reliability, which implies the service transactions are successfully and
completely performed as promised by the service provider; responsiveness, which indicates that
consumers received the service they required with minimum waiting time assurance, which
implies that the service personnel are well trained to communicate and serve consumers
effectively; and empathy, which refers to the level of courtesy provided by service providers to
every service consumer.

However, the quality determinants usually give an overall understanding of measuring service
quality in the service industry. Since some of the quality determinants contradict with multiple
meanings, specifically in DB. In contrast with quality gaps, it gives a comprehensive definition
of the factor influencing customers’ service quality perception. Since this research study is
dealing with service quality on OB, we precisely define each quality gap in three different
phases. In this research, we identified four core stakeholders: the customer, the website interface,
the bank, and the banking industry show the direct interaction between the customer and the
website as well as the indirect interaction of all stakeholders with the banking industry.

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RECOMMENDATIONS

To conclude the assignment carried out to find factors which contribute to adoption of digital
banking, following suggestions are given based on outcome of the research conducted through
reviewing the relevant literature.

In the research customer awareness has been identified as most influential variable for adoption
of digital banking. Hence, banks should improve their promotional strategy to reach the target
market. Banks execute existing aggressive campaigns and promotional methods to increase
awareness of online banking facility. Nevertheless, according to research finding it important to
segment the target market and create awareness among customers with correct reach. For
example, as per region wise analysis outstation customers are not much responsiveness to
awareness as much as customers in western region. An adoption towards online banking is
higher in western region, therefore constant updates on online banking should include in
marketing promotions of a bank if they target western region. But outstation branches are much
sensitive to risk fact therefore; any awareness methods should highly focus on security measures
and confidentiality of online banking facility.

Method of awareness should be shift from mass communication to personalize touch points.
Ideally bank customer relationship staff can develop the awareness among customers by making
them adopt to services step by step. Therefore, bank managers should emphasis on effective staff
training on online banking facility and options available.

In the IT infrastructure section, it is vital to constantly upgrade security methods and verification
process. Furthermore, internationally recognized up to date security authentication processes
should be developed. Most importantly credibility of the system should be communicated to
customers at all instances and empowering them with simple security measurements such as 2
step verification process should be always updated.

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It is better to encourage potential customers to attract and teach the use of online digital banking
services at banking premises. Hence, it is suggested for banks to invest more on enabling a
digitally equipped environment in all branches. Customers are willing to use customizes options
and easy navigation, therefore online banking platforms should be upgrade periodically liaising
with new user experience technology.

FURTHER RESEARCH ASPECTS

In this particular research work only one bank has been taken into account. Consequently, it may
not provide the exact reflection of the study. Therefore, it would be helpful to eliminate all the
bias factors if data pertaining to all the banks could obtain.

There are many more dependent variables other than PU, PEOU, customer awareness and
perceived risk recognized in previous studies which influence adoption of online banking such as
perceived financial cost, speed, functions, social influences and so forth on. It would be rather
effective or helpful if criteria could be set in identifying the actual impact of these influencing
factors after over a certain time span based on specific customer segment.

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