PROJECT REPORT

ON

“A STUDY ON DIGITAL BANKING”

A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF
THE DEGREE
OF
MASTER IN COMMERCE
UNDER THE FACULTY OF THE DEGREE
BY

MS. ALIMUNISHA SADAREALAM KHAN

ROLL NO. 32

UNDER THE GUIDENCE OF

PROF.MS.PRAJAKTA KHAMKAR

VPM’S JOSHI COLLEGE OF ARTS & N.G BEDEKAR COLLEGE OF

COMMERCE, THANE (WEST)-400601
2020-21

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 Date:

Vidya Prasarak Mandal, Thane

K.G. JOSHI COLLEGE OF ARTS &
N.G. BEDEKAR COLLEGE OF COMMERCE
CERTIFICATE
OF
PROJECT WORK
This is to certify that

Mr. MS ALIMUNISHA SADAREALAM KHAN

of M.Com. (AA) Semester III Roll No. 32 has undertaken &

completed the project work titled A STUDY ON DIGITAL

BANKING

during the academic year 2022 - 23 under the guidance of

Mr./ Ms. PROF. MS. PRAJAKTA KHAMKAR

Submitted on to this college in fulfilment of the

curriculum of MASTER OF COMMERCE (ADVANCED

ACCOUNTANCY) UNIVERSITY OF MUMBAI

This is bonafied project work & the information presented is

True & original to the best of our knowledge and belief.

PROJECT COURSE EXTERNAL PRINCIPAL

GUIDE CO-ORDINATOR EXAMINER

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 DECLARATION

I am undersigned Miss. Alimunisha Sadarealam Khan hereby declare that the work
embodied in this project work titled “A Study On Digital Banking” forms my own
contribution to the research work carried out under the guidance of Prof.Ms.
Prajakta Khamkar is a result of my own research work and has not been previously
submitted to any other University for any other degree/diploma to this or any other
University.

Whenever reference has been made to previous works of others, it has been clearly
indicated in the bibliography.

I, here by further declare that all information of this document had been obtained and
presented in accordance with academic rules and ethical conduct.

Name and signature

Alimunisha Sadrealam Khan

Certified by,

Prof. Ms. Prajakta Khamkar

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 ACKNOWLEDGEMENT
My efforts have made me to accomplish the task of completing this project. However
it would not have been possible without the kind support and help of many
individuals.

I would like to thank my college, K.G. Joshi college of Arts and N.G. Bedekar
College, affiliated to Mumbai University for giving me the opportunity to work on
this project.
I would like to thank my Principal, Dr. Suchitra A. Naik for providing the
necessary facilities required for completion of the project.
I would like to thank our Coordinator, Mrs. Rashami Agnihotri, for her support and
valuable guidance.
I would like to express my sincere gratitude to my project Guide, Mrs. Prajakta
Khamkar. For her valuable guidance which has promoted my efforts in all the stages
of this project work.
I would also like to thank each and every person who directly or indirectly helped me
in the completion of the project especially respondents.
I would like to thank my College Library, for having provided various reference
books and magazines related to my project.

Also, I would like to pay my gratitude towards my Parents who supported me

throughout my journey of writing project.
Finally I would like to thank to my classmates who guided me with their previous
project work experiences.

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INDEX
SR. NO. PARTICULARS PG. NO.
1 Chapter I – Introduction 6
2 Chapter II – Research Methodology 43
3 Chapter III – Review of Literature 49
4 Chapter IV – Data Analysis 65
5 Chapter V – Conclusions and Suggestions 83
6 Chapter VI – Bibliography 86
7 Chapter VII - Annexure 89

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CHAPTER I - INTRODUCTION

SR. NO. PARTICULARS PG. NO.

1 What is Digital Banking? 8
2 Meaning of Digital Banking 8
3 Growth of Digital Banking 9
4 History of Digital Banking 10
5 Activities, Products & Services comes under Digital 12
Banking
6 Features of Digital Banking 14

7 Benefits of Digital Banking 14

8 Drawbacks / Risk involved in Digital Banking 16
9 Needs and Importance of Digital Banking 17
10 Types of Digital Banking Payments 19
11 Difference between digital banking and online banking 20

12 Role of Digital Banking During Covid 19 21

13 Future of Digital Banking 23
14 Effects of Digitalisation on the performance of Banks 23
15 Digital Banking Units (DBU) 25
15.1 What is Digital Banking Units? 25
15.2 Who will set up these Digital Banking Units? 26
15.3 What are the services that will be provided by these 26
Units?
15.4 How will these DBUs compete with fintech? 27
15.5 RBI guidelines for Digital Banking Units 27
16 NEO Banks 30
16.1 What is NEO Banks? 30
16.2 Benefits of NEO Banks 31
16.3 How NEO Banks Function? 32
16.4 Traditional v/s NEO Bank 34
17 Core Banking Solution (CBS) 34
17.1 What is Core Banking Solution (CBS)? 35

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17.2 Benefits of Core Banking Solution (CBS) 35
18 Keys to Digital transformation in Banking 36
19 Security Measures in Digital Banking 40

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 1. What is Digital Banking?

Digitalization means the transformation of data and information into a digital

structure with the reception of innovation. Digital is the new buzz or the latest
expression in all the sectors. The banking sector, like all other sectors, is progressing
towards technological advancements. All over the world, banks are taking a huge step
towards digitalization in order to cope up with the competition and deliver the
maximum to its customers. Digital Banking has transformed the manual process into
digital service by reducing human error and thus, saving time and building customer
loyalty. Across all verticals, consumer needs have been met through innovative ways,
disrupting the existing enterprise value chains. Now round the clock, consumers have
access to the services provided by a bank just by the use of online banking. The main
steps of the digitalization of the banking sector are mainly focused on adding to the
existing offer the use of new services enabled with technology to increase
accessibility and value for customers. Now-a-days people are totally dependent on
technology and internet to fulfil each and every common need of man to be done
easily and quickly, this facility of being work done quickly lead to the entrance of
digital Banking in banking sector of the economy occupied with digital concepts.

2. Meaning of Digital Banking

Digital Banking means automating conventional banking through digital platforms

like the web and internet-enabled systems like mobile devices. With Digital Banking,
you can access almost all financial services at the tip of your fingers, all year round,

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irrespective of national or bank holidays. Digital banking means to digitize all of the
banking operations and substitute the bank’s physical presence with an everlasting
online presence. It entirely eliminates the need for you to visit the bank.

3. Growth of Digital Banking

The invention of ATMs and credit cards paved the way for the digitization of the
banks. The commercial evolution of the internet in the early 1990s completely
overhauled the banking sector introducing the world to the online banking services.
This is when traditional street-side banks started considering ideas to deliver restricted
online bank services to cut down the cost of operations. When these efforts proved
beneficial and were acknowledged by all, numerous banks ideate to create their own
cyber presence with newly designed website featuring the various services like
opening new accounts online, necessary form download and processing loans. This
has equally affected the hiring process for the professionals in the banking sector.
Apart from the banking examinations that one need to qualify, career in the banking
for fresher requires technology experts.

In India ICICI was the first to offer internet based banking services in the
year 1996. Other banks followed suit, though in the initial years digital banking
had a limited reach because of the high cost of internet. As the cost of internet started
falling and the services offered digitally expanded, the digital banking revolution
started gaining momentum. The public sector banks have the largest share in the
banking industry, hesitantly started offering digital banking services. As the banks
realised the cost and revenue benefits of digital banking, they started seeing
digital banking not as a supplementary service but as extension of the traditional
mode of banking. The success of digital banking have led to openingof India’s first
digital only bank named Digi bank in the year 2016. Manyother digital only banks
have come up since then. The growth of digital banking in India can be
understand with the amount of digital transactions done over the years. As is
evident from(Table 1) below that both the number and amount of transactions
have been growing phenomenallyup to the year 2011-12. The year 2008-09 did
however witness a decline in the value of transaction because of global financial
crisis. The extraordinary growth witnessed in the year 2012-13 is because of including

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data that were not available in the past. The years following 2012-13 have seen a
consistent growth in digital transactions.
4. History of Digital Banking

 1993

Temenos AG is founded, a provider of banking software systems to retail,

corporate, universal, private, Islamic, microfinance and community banks.

 1994

Online Banking is built into Microsoft Money. 100,000 households begin

accessing their bank accounts online.

Stanford Credit Union begins offering banking services via their website,
paving the way for credit unions and banks across the country.

 1997

Tangerine launches, becoming the first digital-only bank in Canada.

 1998

First Internet Bank launches, becoming the first digital-only bank in the U.S.

 2001

Online banking hits 20 million users, with 8 different U.S. banks achieving at
least a minimum of 1 million online users.

 2002

Avoka was founded to help banks and financial institutions in their digital
transformations.

 2007

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 The launch of the iPhone begins shifting digital banking from desktop
computers to smartphones.

Kony, Inc. is founded to help banks transform their banking operations with a
cloud-based mobility, omnichannel and internet-of-things systems and
services software platform.

 2009

Online banking hits 54 million users in the United States.

 2016

Millennials succeed in fundamentally shifting digital banking preferences,

signaling to banks that they must move all services online.

 2018

Temenos acquires Avoka, the leading provider of digital customer onboarding

solutions for financial institutions.

 2019

Temenos launches Temenos Infinity, a breakthrough digital front office

product with the most advanced cloud-native, cloud-agnostic, API first
technology and design led thinking.

 Temenos acquires Kony, the leading provider of mobile banking apps that
support conversational interfaces, artificial intelligence, augmented reality and
wearable technologies.
 According to Temenos’ 2019 State of Digital Banking Report, 65% of
digitally active large banks reach the ‘Digital Promised Land’.

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 5. Activities, Products & Services comes under Digital Banking

It offers several digital services, including:

 Downloadable bank statements.

 Cash withdrawals.
 Transfers.
 Account management.
 Opening deposit accounts.
 Loan management.
 Bill payments.
 Account monitoring.

Digital Banking Products And Services

Customers having bank accounts, with access to a stable internet connection and a
smart device such as a laptop/PC, mobile phones, or tablets can avail of digital
banking products and services, without visiting the bank’s branch physically.
 Bank Statements
One can view and download bank statements for any specified period.

 Cash Withdrawals
ATMs are widely present across cities and towns. Digital banking facilitates cash
withdrawals anytime from an ATM.

 Fund Transfer
The facility of transferring funds online through RTGS, NEFT, IMPS, and mobile
banking applications is one of the most significant advantages of digital banking.
Now there is a reduced demand for Cheques and demand drafts than before because
of such online alternatives.
 Managing Cheques

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One can intervene in the cheque clearing process using digital banking to stop the
payment if required. There could be different reasons for stopping cheques like the
wrong amount, the wrong beneficiary name mentioned, or misplacement. In that case,
by logging in, one can stop cheques through digital banking.

 Mobile Banking
Mobile banking mainly shows the use of an application optimized for smartphones or
tablets for digital banking services.

 Bill Payments
A user can set up standing instructions for monthly debits in favor of a regular utility
payment via auto-debit feature for bill payments.

 Finance
One can open fixed deposit accounts, apply for loans, invest in Mutual Funds and buy
insurance products through digital banking. Demat accounts can be linked to bank
accounts to provide a uniform flow of funds for profitable investments.
 Monitor Transactions
Digital banking allows the user to monitor account balances or outstanding with one
click. Banks also send transaction alerts to the registered mobile number or email
addresses. Transactions are updated almost as soon as they are performed.

The broadly used e-banking service among customers in India is ATM. Today the
ATM service is not restricted to cash withdrawal only. After advancement, this
facility can be used for various purposes including:

 Account balance inquiry

 Cash & cheque deposits
 Get bank statements
 Changing the Debit/Credit card PIN
 Transfer amount from one account to other bank accounts
 Making credit card payments, etc.

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 6. Features of Digital Banking
Compared to traditional banking, which requires you to visit the bank for every
big and small transaction, you can conduct digital banking services from any corner of
the world. Here are some of its best features.

 You may access your bank account digitally via internet banking or
eponymous mobile apps that you download on your smart phone from the
application store.
 You can now complete the account opening and the subsequent KYC process
digitally via a video call. The Reserve Bank of India has permitted banks to
conduct a Video KYC to open a bank account on par with a full KYC bank
account.
 Digital Banking comes with a host of online fund transfer provisions. You can
transfer any sum of money to any bank account in India via NEFT, IMPS,
RTGS or UPI or make overseas wire transfers.
 You can also consolidate all your utility bills and set up billers instead of
bothering with physical bill payments by logging in on the internet or mobile
banking platforms of your bank to complete the payments.
 You can recharge your mobile and DTH subscriptions online and enable auto-
payment facilities so you do not miss any payment.
 You can easily open fixed and recurring deposits, buy insurance, make
investments or apply for loans on digital banking platforms.
 You can check your account balances, get mini statements and pay off
outstanding credit card dues without having to send a cheque to the creditor.
 You can pay for expenses on online shopping websites via net banking or by
entering your debit card details like card number, expiration date, and CVV
and authenticating payments via OTP.
 You get access to banking services 24x7, closely monitor your transactions
and sign up for SMS alerts and notifications after every transaction by
registering your mobile number with the bank.

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 7. Benefits of Digital Banking

Advancing to a more technologically sophisticated way of doing things, it goes

without saying that the benefits long outweigh the costs. Similarly, digital banking as
a technological by-product aims to make life easier for the customers of a bank.
Digital banking has the following benefits:

 Digital banking enables consumers to perform banking functions from the

comfort of their homes, be it an elderly person who is tired of waiting in lines
or a working-class professional who is caught up with work, or a regular
person who does not want to visit the bank’s branch to run a single errand. It
also offers convenience.
 Elaborating on the convenience offered, digital banking lets a user carry out
banking work around the clock, with 24*7 availability of access to banking
functions.
 One of the biggest drawbacks of traditional banking was the overly placed
importance on paper. Banking has become paperless with the development of
digital banking as a service. A user can log into their account at any point in
time to monitor records.
 Digital banking allows a user to set up automatic payments for regular utility
bills such as electricity, gas, phone, and credit cards. The customer no longer
has to make a conscious effort of remembering the due dates. The customer
can opt for alerts on upcoming payments and outstanding dues.
 Online shopping has become a cakewalk with payment channels becoming
well-integrated with the online shopping portals. Internet banking has
significantly contributed to online payments.
 Digital banking extending services to remote areas is seemingly a step
toward holistic development. With smartphones at affordable prices and
internet access in remote areas, the rural population can make the most out of
digital banking services.
 Digital banking-enabled fund transfers reduce the risk of counterfeit
currency.

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  With the help of digital banking, a user can report and block misplaced credit
cards at the click of a button. This benefit greatly strengthens the privacy and
security available to a bank’s customer.
 By promoting a cashless society, digital banking restricts the circulation of
black money as the Government can keep a track of fund movements. In the
long run, digital banking is expected to lower the minting demands of a
currency.

8. Drawbacks / Risk involved in Digital Banking

Is digital banking safe? Contrary to popular opinion that digital banking poses
security concerns, most readers will be surprised to know that digital banking is safer
as compared to traditional branch banking. While digital banking forums are prone to
vulnerabilities and hacks such as phishing, pharming, identity theft, and key logging,
banking institutions are investing a lot in their security systems. Security is at the
forefront when considering a service such as digital banking. If security were to be
compromised, banks would lose a crucial selling factor, and more so than risking user
data and resources, banking institutions cannot afford negative publicity.

In a hypothetical scenario where banks do, in fact, lose your money to a hacker, you
will be entitled to receiving the due amount of your bank balance for the sole reason
that your money is protected. Therefore, to avoid massive public liability and bad
publicity, banks are bound to invest heavily in reinforcing the security of digital
banking platforms.

However, a digital banking user must do their part by following certain practices that
act as a safeguard:

 Follow prompts to change your passwords regularly and keep your passwords
confidential.
 Avoid using public networks and devices to access digital banking – if you
must use a public device, remember to clear cache and browsing data. It is
good practice to not allow the browser to save your username and passwords
for bank details.

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  Banks never ask for confidential information so refrain from sharing it with
anyone who asks for it.
 Anti-virus protected systems offer another layer of security to your systems.
 The URL address MUST begin with ‘https’, or a padlock must appear next to
the website address. The padlock is a security certificate. The address bar turns
green when the site is secured with an SSL certificated, which is an additional
validation for the security of the website. Therefore, use the bank’s URL and
refrain from clicking on other links. Banks generally use minimum SSL/128-
bit encryption.
 Lastly, disconnect from the internet when the system is left idle.

9. Needs and Importance of Digital Banking

Digital banking is the new best thing that could have happened to mankind. In fact,
not only has it provided a means of convenience for today’s banking times, it has also
helped individuals to go paperless. Through Digital Banking, individuals can now
easily make transactions, check their account balance or even make transfers just with
a single click of a button on their smart phone, desk top or any other digital device.
No more requesting or looking over paper statements or withdrawal slips, any longer.

But how did Digital Banking become so popular? Here are some of the reasons:

 Digital banking has become a boon at a time where travelling to the bank for a
simple task of transferring funds was a challenge. Now people can save on the
travel time and conveyance money. Moreover, it has become highly
convenient for working class, elderly people, to carry out their bank work
from the comfort of their homes.

 Through digital banking, you no longer need to wait for the bank working
hours to carry out any bank work. Now you can do the required transactions
whenever it is convenient to them, 24*7, even on holidays!

 Traditional banking meant visiting the banks for each and every transaction
and keeping track of the account history through all paper statements. Now,
you have the option togo paperless and get all your transaction history through
monthly emails. You can even log into through your Net Banking account and

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 access your account history anytime you should want it. Log into your HDFC
Bank Net Banking Account now!

 Traditional notifications and alerts meant looking at the calendar date or

jotting it down. Now you can receive alerts for payments which are due
through apps and emails. This enables one to be prompt in paying outstanding
bills before the due date, saving oneself from penalties. You can also set
automatic payments to be made for your bills, so you don’t have to remember
bill due dates also. One can pay utility bills like electricity, phone, gas, Credit
Card etc. at their convenience from the click of a button. Also, you need not
fill all the details again. The details are auto saved on your devices via apps.
This saves time and paper.

 You need not have to contact the bank alone to report lost or Credit Cards.
Now one has the additional option to report lost or stolen cards, activate cards,
put misplaced cards on hold, and request for a replacement of card from the
click of a button online.

 Shopping online was practically non – existent few decades ago. Today,
current business brands like Amazon, Snap deal, eBay, etc. have become huge
market grossers thanks only to digital banking. They thrived into successful
ventures, allowed start-up companies and different industries to emulate them.
In turn, they now give you a wider opportunity to shop online, as well as
plenty of brand options to consider!

 Digital banking, especially through mobile banking has helped the rural areas.
Now, they don’t have to worry about travelling long distances now, just to get
to the closest bank especially during any financial emergencies. In fact, the
rural population, benefits the most from digital banking as they have access to
the simplest of banking transactions just with a click of a button.

 Filing your income tax returns traditionally meant endless paperwork. Now, IT
returns can now be filled, and subsequent tax payments can be done via digital
banking. This reduces the headache of tedious tax returns filling work. Also,
government challans can be paid online.

 With currency being exchanged on a daily basis, there is a possibility you

would come into possession of counterfeit notes and fake currencies

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 previously. However, in today’s time digital banking eliminates that
possibility when money transfers are done digitally.

 These are some of the reasons why Digital Banking has become popular now.
But these are also some of the reasons why you should choose Digital Banking
in today’s time. In fact, with its growing potential with each passing day, you
can secure your financial future if you start now!

10. Types of Digital Banking Payments

 Banking cards: Cards are not only used to withdraw cash but also enable
other forms of digital payment. Cards can be used for online transactions and
on Point of Sale (PoS) machines. Prepaid cards can also be issued by the
banks; such cards are not linked to the bank account but function through the
money loaded onto them.
 Unstructured Supplementary Service Data (USSD): By dialing the number
*99#, mobile transactions can be carried out without an application and
internet connection. The number holds nationwide applicability and promotes
greater financial inclusion on the ground level. The service lets the caller surf
through an interactive voice menu and chooses the desired option on the
mobile screen. The only catch is the mobile number of the caller should be the
one linked to the particular bank account.
 Aadhaar Enabled Payment System (AEPS): AEPS lets the client initiate
banking instructions following the successful verification of the Aadhaar
number.
 Unified Payments Interface (UPI): UPI is the most trending form of digital
banking presently. UPI makes use of a virtual payment address (VPA) so the
user can transfer funds without entering bank account details or IFSC code.
Another striking feature of UPI is that the applications let you consolidate all
your bank accounts in one place. Funds can be transferred and received around
the clock with no time restrictions. UPI-based apps in India are BHIM,
PhonePe, and Google Pay. BHIM application, in addition to the transfer of
funds to other virtual addresses and bank accounts, also lets the user transfer

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 funds to another Aadhaar number. More importantly, UPI-based payments are
free of cost.
 Mobile Wallets: Mobile wallets have eliminated the need to remember four-
digit card pins or enter CVV details or carry loose cash. Mobile wallets store
bank account and card credentials to easily add funds to the wallet and make
payments to other merchants with similar applications. Popular mobile wallets
are Paytm, Freecharge, Mobiwik, etc. Mobile wallets, however, generally
have a limit on how much can be deposited in the wallet. A small fee may also
be charged on depositing the funds from the mobile wallet back into the bank
account.
 PoS terminals: Typically, PoS machines are portable devices that read a card
to authorize and complete the payment. Supermarkets and gas stations opt for
this method of payment. However, with digital banking thriving, PoS
terminals have evolved into more than physical PoS devices. Virtual and
Mobile PoS terminals have surfaced, which makes use of the mobile phone’s
NFC feature and web-based applications to initiate payment.
 Internet and Mobile Banking: Commonly known as e-banking, internet
banking refers to obtaining certain banking services over the internet, such as
fund transfers, and opening and closing accounts. Internet banking is a subset
of digital banking because internet banking is only limited to core functions.
Similarly, mobile banking is availing banking services through mobile-based
applications.

11. Difference Between Digital Banking and Online Banking

More often than not, the terms of digital banking and online banking are used
interchangeably. However, there exists a fine line between the meaning of the terms.

Online Banking deals with everyday essentials, such as checking balances, reviewing
transactions, and transferring funds. This is the core operation of the bank, which is
shifted to online presence with the help of online banking. Online banking is a means
to an end.

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However, digital banking is an end in itself. Digital banking is aimed at digitizing all
the operations of the bank, core, or non-core. Basically, starting from on boarding of
clients to servicing of the accounts, to closure of accounts is digital banking’s primary
objective. Digital banking agenda is to make the physical presence of a bank’s branch
redundant for its customers so that the customers can handle all banking operations
from their place of convenience. Therefore, online banking is a subset of the master
set, digital banking.

12. Role of Digital Banking During Covid 19

The coronavirus (COVID-19) pandemic has drastically reshaped the way banks and
credit unions operate today. While financial institutions value face-to-face interactions
with their customers and members, social distancing requirements and other safety
precautions have caused retail banking to go almost entirely digital. This change
impacts not only how financial institutions conduct their business and interact with
customers and members, but also how they keep their institutions secure.

In this blog post, we outline 3 key ways the pandemic has impacted the industry and
consumers, and how financial institutions are managing these changes in real-time
while ensuring they continue to operate effectively for their employees, customers,
members, and other stakeholders.

 Know Your Customer

For banks and credit unions, know-your-customer (or member) procedures are a
key function to establish a customer or member’s identity, understand their financial
activities, and evaluate the level of risk to the institution. Traditionally, before
opening an account, completing a transaction, and/or sharing private information,
many financial institutions have relied on at least some face-to-face interactions. For
community financial institutions, know-your-customer has gone well beyond best
practice to become a competitive advantage. Many (if not most) community
institutions pride themselves in knowing their customers by name!

However, due to the COVID-19 pandemic, financial institutions need to find ways to
verify their customers’ identities and retain that personal touch using digital channels.
Consumers want a frictionless banking experience where they feel trusted and can

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quickly receive the products and services they need, but they also want to avoid
feeling like just another number. Institutions must balance managing remote
transactions that could increase their security posture, against technology and policies
that positively identify customers without alienating them. As a result, some financial
institutions are leaning towards increased security by starting to adopt a “zero-trust”
stance where every individual and transaction is considered suspicious unless proven
otherwise.

 Technology Updates

To protect customers and members during the pandemic, banks and credit unions
have moved from in-branch, face-to-face interactions to using remote channels such
as online, telephone, ATM banking as well as the drive-through to serve their
customers. Our experience has been that many institutions that may have technology
upgrades on their roadmap two or three years down the road have had to accelerate
those projects. Others have added new initiatives to increase their remote capabilities
and enhance their electronic services. However, all this likely requires tighter security
protocols for customer verification. This can be challenging for smaller financial
institutions that rely on more traditional in-branch visits to provide services to their
customers or members, particularly if branches are closed or observing limited hours
and services. It is up to these institutions to find the right balance of physical and
digital solutions to ensure customers and members receive the same level of service
they were accustomed to prior to the pandemic.

 Digital Adoption

The COVID-19 pandemic has driven consumers to rely more heavily on digital
channels for their banking needs. This has accelerated digital transformation for
financial institutions in the U.S. as their customers demand solutions that allow them
to quickly and easily complete transactions remotely. To meet this demand, financial
institutions have reevaluated their traditional strategies, implemented and even
accelerated digital initiatives, and are more inclined to not just enable but encourage
digital capability for their customers. As they encourage consumers to adopt new
solutions and remote tools, it will be critical to assess the risk of these solutions and
develop controls to keep the network safe and protect sensitive, financial information.

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Banks and credit unions must be able to provide the products and services their
customers and members need all while keeping information secure, even in the midst
of a pandemic. Having a solid plan to guide how you manage operations can make all
the difference. One final thought, when the dust settles and things go back to
“normal”, the steps you’ve taken to enable digital engagement with employees and
customers will be considered resilience measures to mitigate the impact of a future
event of this nature. Resilience will be a focus for regulators in future examinations.

13. Future of Digital Banking

As per a Deloitte research report on must-haves for a fully digital bank, each bank
striving to become fully digital require the following as the key drivers for their
success
 Option to order currency
 Customizable standing options
 Accounts linked to tax exemptions status
 Card blocking feature
 Innovation toward safety vaults
 Integration with stock market investment channels
 Financial management analytics
 Enable grouping of accounts of different banks
 Easily accessible assistance

A full-fledged replacement of physical branch banking with digital banking right now
seems like a far-fetched dream. Digital banking comes in handy for recurring banking
essential functions. However, customers prefer human interaction for more important
and irregular decisions, such as while taking a loan or negotiating the terms of the
loan.

14. Effects of Digitalisation on the performance of Banks

Digitalisation has brought a sea change in the banking industry. The idea that
customer is customer of the branch has been replaced by customer is the
customer of the bank. In the initial years of digitalisation, senior bank employees

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were averse to technology fearing job security and inability to adapt to changes.
Acceptability of automated processes among employee as well as
customers have gone up in the recent years. Customers and employees are asking
for automated process to reduce customer’s branch dependency. Digitalization has
given empowered customer in meeting their financial obligations according to their
convenience.

Increasing competition has brought a war of cost in Indian banking industry. Banks
focused on reducing their cost of operations more than ever. Digitalisation has proved
to be a strategic tool for reducing cost of operations for banks. However, banks
have borne considerable costs for providing digital banking services in the form of
infrastructural and training costs. These costs usually recovered in short run and they
do not have to wait for years to recover these costs. More cost benefits will accrue to
banks when more people shift to digital platforms. Banks will also reap benefits of
reducing cost of technology.

The moving over from traditional banking to digital means of delivering services has
affected bank’s profitability positively. The augmentation of profit in transition to
digital banking is because customers seeking digital services turn out be highly
satisfied customers, which makes them loyal to their banks, who otherwise spend a lot
to retain them. The rate of economic growth in India has help banks in ways to move
to digital services by ensuring a steady flow of revenue. The existence of
profitability in digital banking has motivated outside players to offer digital
financial services.

The overall efficiency of the banking industry enhanced since the introduction
of digitalisation. The concentrated efforts of the industry and the government to
make India a less cash society will give make the system more efficient.
Improvement in employee efficiency can be achieve through employee training and
feedbacks, which will make their adaption to ever changing technology smooth and
easy.

Government’s campaign for a less cash society and a Digital India has made digital
banking solutions indispensable. For a digital India cannot fully realised without
a robust digital banking system. The growth of already expanding digital banking

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system has further complimented by technological initiatives like Unified Payments
Interface (UPI). In times to come banks will not only have to keep up with the
growing expectations of a billion connected customers, but they will also have to
make sure that they are leagues ahead of the emerging competition.

The challenges to digital banking are been addressed regularly by the government as
well private players. The penetration increasing in rural areas is a good sign for digital
banking. Now bank can engage rural population to use digital platforms. Increased
incentives for using digital mode of transaction will help in making customers
accustomed to digital banking. Access to high-speed internet and more awareness
programmes will give confidence to customers to use digital platforms particularly in
rural areas.

15. Digital Banking Units (DBU)

Finance Minister Nirmala Sitharaman on Tuesday (April 19) reiterated her Budget
announcement on setting up 75 digital banking units in 75 districts of the country
this year. This is to take forward the government’s agenda of digital financial
inclusion.
What was the announcement?
In the Budget for 2022-23, the Finance Minister had said: “In recent years, digital
banking, digital payments and fintech innovations have grown at a rapid pace in the
country. Government is continuously encouraging these sectors to ensure that the
benefits of digital banking reach every nook and corner of the country in a consumer-
friendly manner. Taking forward this agenda, and to mark 75 years of our
independence, it is proposed to set up 75 Digital Banking Units (DBUs) in 75 districts
of the country by Scheduled Commercial Banks”.

15.1 What is Digital Banking Units?

The Reserve Bank of India (RBI) recently came out with the guidelines on the
establishment Digital Banking Units (DBU) allowing banks to establish units which
are purely digital along with the flexibility to have a separate digital set up covering
digital BCs (Banking Correspondents), potential digital outsourced model and

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separate digital architecture and infrastructure.

The establishment of DBUs first introduced in Union Budget 2022, and the broad
structure of the guidelines laid out by RBI seems to be a precursor to enabling
traditional banks to have “Digital ready” units which can then potentially come under
the umbrella of “Digital Banks” licenses once they are introduced.

A digital banking unit is a specialised fixed point business unit or hub housing certain
minimum digital infrastructure for delivering digital banking products and services as
well as servicing existing financial products and services digitally in self-service
mode at any time.

15.2 Who will set up these DBUs?

Commercial banks (other than regional rural banks, payment banks and local area
banks) with past digital banking experience are permitted to open DBUs in tier 1 to
tier 6 centres, unless otherwise specifically restricted, without having the need to take
permission from the RBI in each case.

15.3 What are the services that will be provided by these units?

As per the RBI, each DBU must offer certain minimum digital banking products and
services. Such products should be on both liabilities and assets side of the balance
sheet of the digital banking segment. Digitally value-added services to conventional
products would also qualify as such.
The services include savings bank accounts under various schemes, current accounts,
fixed deposits and recurring deposit accounts, digital kit for customers, mobile
banking, Internet banking, debit cards, credit cards, and mass transit system cards,
digital kit for merchants, UPI QR code, BHIM Aadhaar and point of sale (PoS).
Other services include making applications for and onboarding of customers for
identified retail, MSME or schematic loans. This may also include end-to-end digital
processing of such loans, starting from online application to disbursal and identified
government sponsored schemes that are covered under the national portal.

15.4 How will these DBUs compete with fintechs?

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Currently, fintechs operating as neo banks offer digital banking services but they do
so in partnership with non-banking financial companies (NBFCs). Some of the neo
banks offering services in India are Jupiter, Fi Money, Niyo, Razorpay X.

Compared to conventional banks with online and mobile banking facilities, neo banks
or digital banks excel at product innovation and offer far better digital solutions.
However, given the arrangement they have currently with NBFCs or scheduled banks
to conduct the actual banking part, some in the industry have pegged these digital
banks as “glorified digital distribution companies”.

15.5 RBI guidelines for Digital Banking Units

1. Opening of DBUs – General Permission:

All scheduled commercial banks (except RRBs, PBs and LABs) with past digital
banking experience are permitted to open DBUs in Tier 1 to Tier 6 centres, unless
otherwise specifically restricted, without having the need to take permission from the
central bank in each case.
These DBUs will be treated as as Banking Outlets (BOs) as defined in RBI's circular
on “Rationalisation of Branch Authorisation Policy- Revision of Guidelines."
On opening of f BOs during a financial year, the DBUs will be treated as opened in a
centre from where the significant parts of its new business are proposed to be sourced,
regardless of its physical location.
2. Infrastructure and Resources:
Each DBU will be housed distinctly, with the separate entry and exit provisions. They
will be separate from an existing Banking Outlet with formats and designs most
appropriate for digital banking users.
Meanwhile, for front-end or distribution layer of digital banking, each bank would
choose suitable smart equipment, such as Interactive Teller Machines, Interactive
Bankers, Service Terminals, Teller and Cash Recyclers, Interactive Digital Walls,
Document uploading, self -service card issuance devices, Video KYC Apparatus,
secured and connected environment for use of own device for digital banking, Video
Call / Conferencing facilities, to set up an DBU.

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These facilities can be in sourced or outsourced while complying with relevant
regulatory guidelines.
Whereas for the back-end including the Core Banking System and other back office
related information systems for the digital banking products and services can be
shared with that of the incumbent systems with logical separation.
Alternatively, banks can adopt more core-independent digital native technologies
offering better scalability, flexibility in creating new / reusable digital environments
through continuous development / software deployment and interconnectivity
specifically for this business segment, based on their digital strategy.
Notably, banks are free to adopt an in-sourced or out-sourced model for operations of
the digital banking segment including DBUs.
Banks should plan and put in place a remote or in situ assisted mode arrangements in
right proportion as the purpose of DBUs is to optimally blend digital infrastructure
with ‘human touch’.
However, to accelerate digital banking initiatives, each DBU will be headed by a
sufficiently senior and experienced executive of the bank, preferably Scale III or
above for PSBs or equivalent grades for other banks who can be designated as the
Chief Operating Officer (COO) of the DBU.
3. Cyber Security:
To ensure physical security of the infrastructure of the DBU, adequate safeguards for
cyber security of the DBUs will have to be ensured by the banks.
4. Products and Services:
Each DBU should offer a certain minimum digital banking products and services.
These products should be on both liabilities and assets side of the balance sheet of the
digital banking segment. Digitally value-added services to conventional products
would also qualify as such.
The DBUs are expected to migrate to more structured and custom made products,
from standard offerings by use of its hybrid and high quality interactive capabilities.
RBI has given an illustrative list of minimum bouquet of products / services and self-
service fulfilment services that can be offered in the DBU. However, the banks have
the freedom to offer any other digital product or service in addition to the minimum
bouquet to cater to the specific needs of the service area. Any product or service that
can be provided digitally through internet banking or mobile banking can be provided
in the DBU.
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Also, any product or service which a bank is not permitted to offer as per the
provisions of Banking Regulation Act 1949, as amended from time to time, shall not
be offered by the DBU.
5. Digital Banking Customer Education:
In addition to onboarding of customers in a fully digital environment, various tools
and methods shall be used by DBUs to offer hands-on customer education on safe
digital banking products and practices for inducting customers to self-service digital
banking services.
RBI directs that this effort has to be clearly translated to incremental digital
penetration of the financial services a DBU is catering to and will have to be
monitored. The district where the DBU is located will be the catchment area for the
purpose.
6. Digital Business Facilitator / Business Correspondent:
Banks to have the to engage digital business facilitator / business correspondents in
conformance with relevant regulations to expand the virtual footprint of DBUs.
7. Customer Grievances:
An adequate digital mechanism should be put in place to offer real time assistance and
redress customer grievances arising from business and services offered by the DBUs
directly or through Business Facilitators / Correspondents.
8. Reporting Requirements:
Banks are directed to report the Digital Banking Segment as a sub-segment within the
existing “Retail Banking Segment" as per the Reserve Bank of India (Financial
Statements – Presentation and Disclosures) Directions, 2021. It is clarified that the
digital banking products / services applicable to segments other than ‘Retail Banking’
need not be reported at this stage.
Banks need to furnish information relating to opening, closure, merger or shifting of
DBUs online through Central Information System for Banking Infrastructure (CISBI)
portal to Department of Statistics and Information Management (DSIM).
The performance update with respect to DBU needs to furnished in a pre-defined
reporting format (being separately issued) to Department of Supervision, RBI on
monthly basis and in a consolidated form in Annual Report of the bank.
9. Role of Board of Directors:
Expansion of digital financial services and financial inclusion being overarching
objectives of DBUs and in view of the operational flexibility given to banks in this
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domain, the board should ensure provisions of regular on-site and off-site monitoring
system covering all aspects of the guidelines.
The Board or a Committee of the Board shall review the progress and key
performance indicators of digital banking services including that of DBU separately at
suitable periodicity. The review should cover both business and risk aspects of the
segment.
10: Minimum Products and Services to be offered by DBUs:
Facilities like savings, current, recurring deposits and fixed deposits opening, along
with digital kit for customers such as mobile and internet banking, debt card, credit
card, mass transit system cards, UPI QR code, BHIM Aadhaar, POS, etc. is offered.
Further, cash withdrawal and cash deposit through ATM and Cash Deposit machines
are allowed that means no physical cash is accepted across counters. Facilities like
internet banking Kiosk, NEFT, IMPS, updation of KYC, lodging of grievance,
account opening Kiosk, digital onboarding of customers for various government
schemes (Atal Pension Yojana; Insurance onboarding for Pradhan Mantri Jeevan Jyoti
Bima Yojana; and Pradhan Mantri Suraksha Bima Yojana) are also available.
Also, applications for onboarding of customer for identified retail, MSME or
schematic loans is also offered by DBUs.

16. NEO Banks

16.1 What is NEO Banks ?

The root of the word “neo bank” is derived from the Greek word “neos”, which means
“new.” Hence, “neo bank” literally means a “new bank”, which aptly describes how
they have challenged the traditional banking system.

Neo banks are financial service providers that do not have a physical branch, unlike a
digital bank. These banks’ wide array of online financial aid appeals to tech-savvy

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customers. Neo banks do not have a bank license, but they partner with other banks to
provide licensed services.

Neo banks are financial technology companies that offer online-only financial
services and have no physical branches. Since neo banks do not have physical
branches, customers can access their services through either an app or website, or as
in most cases, both.

16.2 Benefits of NEO Banks

 Reduced operational costs

One factual benefit of neo bank is that it does not require any physical capital or
infrastructure. There are also no branches for neo banks. Thus, they can operate at a
cheaper cost. Due to capital savings, consumers benefit from cheaper rates and no
monthly fee payments. These banks are capable of providing lower fees and higher
interest rates.

 Accessibility and ease of banking

Neo banks are extremely accessible, and tech-savvy customers find this a big
advantage. Customers can set up accounts in minutes without having to submit
formalities. Customers can save time they would spend in queues in a traditional bank
for a simple transaction.

 Speed

These banks operate 24 hours and all seven days a week. Just a mobile app is enough
to provide almost all the services a traditional bank would. With a single neo bank
account, one can deposit, transfer money, and conduct online purchases faster than the
time it would take to go to a traditional bank branch.

 Technology

Neo banks come with the aid of the latest technology in the fintech world; as such,
many services are AI-powered. Machine learning enables neo bank services to be
customized to every customer’s needs.

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  Instant and easy account creation

Traditional banks are known to have one of the tedious account creation processes.
Submitting documents over documents and visiting more than once to create an
account is so much work. Neo banks offer instant account creation with the
requirement of only a few formalities.

 International payments

Traditional banks require you to have specific upgrades to carry out a transaction using
a debit card. Neo banks offer the advantage of one card for all payments. Instant
international payments can be carried out with a single card or even without a physical
card.

 Transaction records

With every transaction one makes, neo bank alerts them with the translation details and
bank balance. Most traditional banks with a digital presence also have this facility. Neo
banks do this one level higher by providing expense records, and you can even
customize their saving goals.

If you are planning to launch a scalable Neo banking solution, make sure to consult
with a reliable Neo banking platform development company to do a feasibility analysis
for your project.

16.3 How NEO Banks Function ?

Although it might seem that neo banks and digital banks are similar in functioning,
their similarities end with the fact that both are banking services accessible through
mobile and other devices. Neo banks are simpler, intuitive, and have a modern and
attractive user interface.

The basic modes operation of neo banks is discussed below:

 Adoption of the latest technology

 Neo banks with license partners

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  Neo banks with their license

 Adoption of the latest technology

Neo banks work completely based on technology and incorporate the latest UI adopted
by the majority. To talk in urban terms, Neo banks attempt to accommodate the
technology that is approved by the current generation (could also say Gen Z and
millennials). Eliminating the bureaucratic nature of traditional banks is one of the goals
of neo banks.

AI-powered solutions are one the main foundations for setting up a Neo bank. These
banks’ only infrastructural requirement is tech; building costs are reduced
considerably. Data from customers are collected to make strategic decisions. The
modernized platform analyzes the data to provide services in the financial ecosystem.

 Neo banks with license partners

Neo banks without a banking license usually partners with other banks to provide
banking services. The tools may include transactional analysis, budget management,
and automated notifications—for example, Yolt and Chime Bank.

Some of the most popular neo banks function with their banking license. Most neo
banking service providers partner with traditional banks instead of claiming a license.
A popular example is SBI’s YONO initiative is a great example of neo banks tied up
with traditional banks to back them with online services. Throughout the year 2021,
YONO saw a 35% growth and is a convincing indicator of the optimistic future of neo
banks.

 Neo banks with their license

Neo banks that have their license can provide full fledge banking services. Some

include checking accounts, prepaid services, debit or credit cards, currency exchanges,

crypto, money transfer, retail, savings accounts, etc.

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Most of these services are also rendered by traditional banks, but neo banks provide
them online. Examples of fully licensed neo banks include bnc10, N26 (Europe), Xinja
(Australia), and Monzo (UK). We know that traditional banks mainly make money
through lending. But, lending is not one of the primary services offered by neo banks,
unlike traditional banks.

16.4 Traditional v/s NEO Bank

 As mentioned earlier, neo banks are completely digital, while traditional

banks have physical branches coupled with online banking services.

 Traditional banks are fully licensed and chartered, while very few neo banks
have banking licenses. To insure their products, neo banks usually partner
with traditional banks.

 Neo banks charge very low fees for their services while traditional banks tend
to overwhelm customers with various types of complicated fees.

 Neo banks generally only offer checking and savings accounts, money transfer
and payment services, and some financial education tools (e.g. budgeting
apps). Traditional banks, on the other hand, offer a far wider range of
services including, but not limited to lines of credit, financial advisors, credit
cards, investing services, and more.

 Traditional banks place a greater emphasis on building deep, long-lasting

relationships while neo banks tend to have mostly flexible, short-term
contracts and relationships.

17. Core Banking Solution(CBS)

17.1 What is Core Banking Solution(CBS)?

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Core Banking Solution (CBS) is the networking of bank branches, which allows
customers to manage their accounts, and use various banking facilities from any part
of the world.
In simple terms, there is no need to visit your own branch to do banking transactions.
You can do it from any location, any time. You can enjoy banking services from any
branch of the bank which is on the CBS network regardless of the branch you have
opened your account.

For the bank which implements CBS, the customer becomes the bank’s customer
instead of the customer of a particular branch.

Execution of Core banking system across all branches helps to speed up most of the
common transactions of bank and customer. In Core banking, all branches access
banking applications from a centralized server which is hosted in a secured
datacenter.

Banking software/application performs basic operations like maintaining transactions,

the balance of withdrawal & payment, interest calculations on deposits & loans, etc.
This banking application is deployed on a centralized server & can be accessed using
the internet from any location.

17.2 Benefits of Core banking solution

Core banking solutions are beneficial to both banks as well as customers.

A] Benefits For Customers

 Quicker services at the bank counters for routine transactions like cash
deposits, withdrawal, passbooks, statements of accounts, demand drafts, etc.
 Anywhere banking by eliminating branch banking.
 Provision of banking services 24 X 7.
 Fast payment processing through Internet banking, mobile banking.
 Anytime anywhere banking through ATMs.
 All branches access applications from central servers/datacenter, so deposits
made in any branch reflect immediately and the customer can withdraw
money from any other branch throughout the world.

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  CBS is very helpful to people living in rural areas. The farmers can receive e-
payments towards subsidy etc. in their account directly. Transfer of funds
from the cities to the villages and vice versa will be done easily.
B] Benefits For Banks
 Process standardization within bank & branches.
 Retention of customers through better customer service.
 Accuracy in transactions & minimization of errors.
 Improved management of documentation & records – having centralized
databases results in quick gathering of data & MIS reports.
 Ease in the submission of various reports to the Government & Regulatory
boards like RBI.
 Convenience in opening accounts, processing cash, servicing loans,
calculating interest, implementing changes in policies like changing interest
rates, etc.
In India, most of the private sector banks have implemented the Core banking
solutions but most of the cooperative banks, Regional Rural Banks are missing the
benefits of CBS.

To cope up with the growing needs of customers; co-operative banks need to

implement core banking solutions. To face the challenges of a dynamic market, UCBs
need to take the help of IT in their operations. Considering the importance of the
matter, the Reserve Bank of India (RBI) mandated a deadline for Urban Co-
operative Banks (UCBs) and advised to implement the core banking solutions (CBS)
byDecember31,2013.

18. Keys to Digital transformation in Banking

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Increasing usage of smart devices, increased connectivity, and demand for high end-
user experience are the key drivers of the digital transformation trend, taking banking
solutions to customers’ doorstep. Along with these aspects, six essential factors highly
impact the success of digital banking.

 Importance of customers

Why would banks migrate to digital platforms? Because that’s where their customers
are. The digital approach is all about ensuring the needs and expectations of its
customers. Banks are now delivering personalized product experience, seamless query
disintegration, transparency, and security standing at the core of customer satisfaction
with modern solutions. In short, the transformation has made it imperative to adopt a
“customer approach,” bringing engagement at its best.

 Operating model

Today, customers are in need of a hybrid experience, a combination of speed and

convenience with personal attachment with the product. This is why the transforming
banking sector follows three different operating models.

Digital as a business – This is generally at the management level.

Digital as the new line of business – This includes working at the next level as a
separate digital division to take care of digital activities.

Digital Native – This involves a new setup with the business of their own technology
stack that focuses directly on consumers.

 Modernized infrastructure

As mentioned above, achieving digital transformation is not just about implementing

modern technologies. Today, the digital transformation in financial services has
enhanced due to underlying infrastructure that facilitates data to the front-end
operations. Therefore, modernizing the legacy infrastructure has played the most
critical factor in driving digital transformation in banking.

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  The power of data

Banking and financial institutions are well aware of the power that consumer data
attains. This means implementing more data analytics practices to analyze and
monitor customer patterns. This has helped the banking sector produce more relevant
products and services aligned with customer needs. This is probably why
major fintech enterprises outsource data analytics requirements to development
companies.

 Complete digitally-driven market

We cannot forget how not just banking but every sector such as industrial,
eCommerce, agriculture, IT, etc., are moving ahead with digital capabilities. This
includes business culture, technologies, strategies, and skills that contribute to a
digital transformation journey. Hence, the entire consumer market is on the edge of
transforming digitally, which is one of the driving reasons for digital banking
transformation.

So far, we have been talking about digital whereabouts in banking and similar
financial institutions. However, we are yet to discover what technologies lead to this
transformation in banking. Let’s take a broader look at some of the major tools
and technologies used by banks to improve digital lending and enhance customer
experience.

 Digital technologies utilized by modern banks

When the concept of digital transformation in financial services was initiated, the
banks started with developing a detailed strategy to revamp their operation models,
enhance customer offers and create an end-to-end customer-centric process. For this
process to succeed, the banking sector embraced digital transformation technologies
to generate value for both banks and their customers.

Below are some of the most used tools and technologies utilized by the digital
banking sector.

 Artificial intelligence (AI) and machine learning (ML)

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AI in banking is leveraged by online assistants and chatbots that resolve customer
issues by providing necessary information. Along with this, artificial intelligence is
used for the purpose of data analysis and management, data security, and enhancing
customer experience.

For instance, AI can detect repetitive patterns by analyzing consumer data within
seconds.

Machine learning is another companion for banks that has the potential to gather,
store and compare user data in real-time. One of the biggest advantages of using
Machine learning in the banking sector is fraud detection. It is easier to detect any
change in the user action and take a timely preventive measure with machine
learning.

 Internet of Things (IoT)

IoT is super helpful with real-time data analysis, making the customer experience
more personal and tailored. Thanks to IoT and its smart connectivity among devices,
customers can seamlessly make contactless payments within seconds. Besides, the
Internet of things has transformed the financial ecosystem by introducing risk
management, authorization processes (biometric sensors), and access to multiple
platforms.

 Blockchain

Every discussion on digital implementation in banking is incomplete without

blockchain. The integration of blockchain in the financial sector has resulted in
secured data transactions, more accuracy, and an enhanced interface. Modern
customers rigidly trust blockchain solutions and believe that it has made transactions
and other banking operations more transparent and convenient. In fact, the fusion of
blockchain and IoT (BIoT) has been one of the biggest digital banking technology
trends.

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  Cloud computing and APIs

Cloud computing is by far the most popular technology utilized by banks and
financial sectors. A cloud-driven service results in improved operations, better
productivity, and instant delivery of products and services.

With the integration of the cloud, banks are now more open to using banking APIs to
promote data sharing and enhance the overall experience.

 Big data analytics

Modern customers don’t look at banks the same way they used to look a decade ago.
All thanks to big data technology that helps banks in analyzing customers’
expenditures, monitoring risk, and managing feedback to increase customer loyalty.
Data analytics solutions have brought new prospects for banking development and
have been prompt in responding to growing market demands.

19. Security Measures in Digital Banking

Of all the things you want to keep safe, your financial information is surely near the
top of the list. Online banks know protecting your financial information is serious
business. They use a combination of cutting edge technology and industry best
practices to protect your personal and financial information.

While individual banks approach security in different ways, there are several
measures every online bank should take to provide a safe banking experience. These
include:

 Anti-virus and anti-malware protection. These programs help detect and

prevent viruses and malicious software. Banks use up-to-date programs to
weed out malware and prevent viruses from spreading.
 Firewalls. Firewalls screen data coming in and out of computer networks,
blocking unauthorized access and stopping traffic from unsafe internet
sources.
 Secure Socket Layer (SSL) encryption. SSL encryption creates a secure
connection with your browser when you log in, fill out an application, register

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 for services and more. And although the technology is sophisticated, it’s easy
to make sure that SSL encryption is active on the page you’re using. Just look
for the lock symbol at the lower right-hand side of the page or look
for “https://” at the beginning of the page’s URL/web address.
 Cookies. By placing a cookie (a piece of text stored on a user’s computer by
their web browser) on your computer after your initial login, banks can then
recognize or authenticate your computer when you log in to your account
again. If you use a new computer to log in to your account—or you erase your
cookies—you will be required to enter additional information at the time of
your next login.
 Multi-factor authentication measures. Multi-factor authentication can take
many forms and requires the use of two or three different authentication
factors. For example, you likely enter a password or PIN when you log in to
your bank’s website. If the site needs additional verification from you, it may
prompt you to answer a question that only you know the answer to or send a
security code to a device that you’ve registered. This is also known as 2-factor
or multi-step authentication.
 Credential confidentiality. Banks do not share your usernames or passwords
with anyone. (And you shouldn’t either.)
 Automatic logout. Most banks automatically log you out of your secure
session after a period of inactivity to help prevent others from seeing or using
your online accounts.
 Biometric authentication. Many banks have integrated fingerprint
authentication into their mobile banking apps. Other forms of biometric
security measures include “eyeprint” verification and facial and voice
recognition. These verification methods are easy to use and hard for criminals
to replicate.
 Limited liability. Most banks offer some type of security guarantee.
Depending on the terms of the policy, your liability for unauthorized
transactions is limited. In other words, if you report unauthorized transactions
on your account in a timely manner, the charges may not be your
responsibility.

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 In addition to these common practices, at Ally Bank we go further, integrating
multiple security measures such as:
 Online and Mobile Security Guarantee: You will not be liable for any
unauthorized online or mobile banking transaction as long as you report the
unauthorized transaction by calling us at 1-877-247-2559 within 60 days from
when your statement is made available.
 Free anti-virus and anti-malware software. Ally Bank customers can
download and install Webroot® SecureAnywhere™at no cost on up to three
devices.
 Account monitoring. Our company monitors online account activity for
potential fraud.

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CHAPTER – II
RESEARCH METHODOLOGY
SR. NO. PARTICULARS PG. NO.
1 Types of research methodology 44
2 Data collection method 45

3 Sample size 46
4 Instrument of Data collection 47
5 Research objectives 47

6 Research limitations 47

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RESEARCH METHODOLOGY

This research aims at analyzing the key success factors influencing the adoption of
digital banking in India. The research approach used in order to answer to the research
questions will presented in this section.

Research methodology is the specific procedures or techniques used to identify,

select, process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study’s overall validity
and reliability. The methodology section answers two main questions: How was the
data collected or generated? How was it analyzed?

A research methodology is an outline of how a given piece of research is carried out.

It defines the techniques or procedures that are used to identify and analyse
information regarding a specific research topic. The research methodology, therefore,
has to do with how a researcher designs their study in a way that allows them to
obtain valid and reliable results and meet their research objectives.

1. Types of research methodology

There are three key types of research methodologies:

 Qualitative Methodology: Qualitative research involves research that

is conducted using words and textual data. This method of research is
generally used in exploratory research where a research problem that
is not clearly defined is being investigated. It is useful when trying to
understand abstract concepts, perceptions, body language, opinions,
and even visual data.

 Quantitative Methodology: Quantitative research relies on the

measurement and testing of numerical data. Unlike qualitative
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 research that is more exploratory in nature, quantitative research is
typically leveraged when the research objectives are confirmatory in
nature.

 Mixed-Methods Methodology: As the name suggests, the mixed-

method methodology combines qualitative and quantitative
methodologies to integrate both their strengths and obtain rich results.

In this research I am going to use mixed method.

2. Data collection method

The collection of data is the first step in any inquiry and for every study and
research. The process of acquiring and measuring information on targeted
variables in a systematic manner is known as a data collection. It allows you to
answer specific research questions, test hypotheses, and assess results.

Data collection is a difficult task. The enumerator, also known as an investigator,

is a well-trained person who collects statistical data. The respondents are the
individual from whom the data is collected. Data is available from two main
sources namely: primary data and secondary data.

Primary data collection

Primary data refers to the first hand data gathered by the researcher himself. Primary
data is factual and original. It is raw data. The term primary data refers to the data
originated by the researcher for the first time. It is real time data. It is very involved
process. Sources of primary data are surveys, observations, questionnaires, and
interviews as explained below:

Survey: Survey method is one of the primary sources of data which is used to
collect quantitative information about items in a population. Surveys are used in
different areas for collecting the data even in public and private sectors. A survey may
be conducted in the field by the researcher. The respondents are contacted by the
research person personally, telephonically or through mail. This method takes a lot
of time, efforts and money but the data collected are of high accuracy, current and
relevant to the topic. When the questions are administered by a researcher, the
survey is called a structured interview or a researcher-administered survey.

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Observations: Observation as one of the primary sources of data. Observation is a
technique for obtaining information involves measuring variables or gathering of data
necessary for measuring the variable under investigation. Observation is defined as
accurate watching and noting of phenomena as they occur in nature with regards to
cause and effect relation.
Interview: Interviewing is a technique that is primarily used to gain an understanding
of the underlying reasons and motivations for people’s attitudes, preferences or
behavior. Interviews can be undertaken on a personal one-to-one basis or in a group.
Questionnaires: Questionnaire as one of the primary sources of data is an
observational technique which comprises series of items presented to a respondent in
a written form, in which the individual is expected to respond in writing. Here the
respondents are given list of written items which he responds to by ticking the one he
considers appropriate.

Secondary data collection

While secondary sources means data collected by someone else earlier. Secondary
data are the data collected by a party not related to the research study but
collected these data for some other purpose and at different time in the past. If the
researcher uses these data then these become secondary data for the current users. It is
just the analysis and interpretation of primary data. It relates to the past. It is time
efficient, rapid and easy. Sources of secondary data are government publications
websites, books, journal articles, internal records.
To complete my research I am going to use both primary and secondary data.

3. Sample size
Sample size measures the number of individual samples measured or observations
used in a survey or experiment. For example, If an online survey returned 100
completed questionnaires, our sample size is 100.
The use of sample size calculation directly influences research findings. Very small
samples undermine the internal and external validity of a study. Very large samples
tend to transform small differences into statistically significant differences - even
when they are clinically insignificant.

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 4. Instrument of Data collection
Data collection instrument means the instruments which are used to collect data such
as interview, questionnaire, articles, books, websites etc.
In primary data collection there are survey method which includes online and offline
survey. In this research I am using online survey method through questionnaire.
Online surveys are carried out using internet enabled devices like mobile phones,
laptops, tablets etc. The questionnaire including set of questions can be shared to
respondents through email, websites, or other social media platforms.
On the other hand, offline survey does not require any internet connection. In offline
survey to collect data we have meet personally to the respondents and collect data.

5. Research objectives

This study focuses on the adoption of digital banking by Indian customers. The
specific aims of this study are:

 To identify the elements which influence the acceptance of digital banking in

India?
 To measure the relationship between the various factors such as; ‘consumer
demographic factors, social influences, features of the mobile banking’ and
the adoption of digital banking.
 To identify the challenges and opportunities presented by digital banking.
 To analyze consumer perception, adoption and expectations towards digital
banking services.
 To understand the role of banks in promoting digital banking services.

6. Research limitations
 Difficult to understand what the individual exactly think about the digital
banking services.
 There was very limited time to collect responses
 It is difficult to gather data from people because people don’t have time to talk
on the topic.
 It is difficult to believe that collected data is enough to make conclusion.

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 People perception can be change anytime about the topic.
 Difficult to relay on collected data because people knowledge about the topic
is not enough.

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CHAPTER – III
REVIEW OF LITERATURE

Meaning:

The literature review surveys scholarly articles, books, and other sources relevant to a
particular area of research. It is a comprehensive summary of previous research on a
topic. The review should describes, summarizes, objectively evaluates and clarifies
the previous research. A literature review discusses published information in a
particular subject area, and sometimes information in a particular subject area within a
certain time. It is a survey of credible sources on a topic.

A literature review is a search and evaluation of the available literature in our given
subject or chosen topic area. It is a piece of academic writing demonstrating
knowledge and understanding of the academic literature on a specific topic placed in
context. It also includes a critical evaluation of the material this is why it is called a
literature review rather than a literature report. A good literature review can ensure
that a proper research question has been asked, to be precise, a literature review serves
to situate the current study within the body of the relevant literature and to provide
context for the reader. The process of reviewing the literature requires different kinds
of activities and ways of thinking.

Reviews:

Shilpa Chauhan, Asif Akhtar, Ashish Gupta (2022) - This study aims to
demonstrate digital banking influence on customers’ evaluation of service experience
and develop a framework identifying the most significant variables of digital banking
that influence the financial performance of banks. The study conceptualises a “total”
CE framework that banks can use to enhance their online presence. Banking service
providers could also analyse their financial results based on digital banking’s impact
on customers. Besides, banks can use this framework to strategically place “game-like
features” in their digital platforms. This study attempts to significantly contribute to
the digital marketing literature related to CE with banks. It is one of the first studies to
determine gamification explicitly in banking literature.

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K Kajol, R Singh, J Paul (2022) - This review synthesizes the prior literature on
digital financial transactions (DFTs), identifies the factors that influence the adoption
of DFTs, and sheds light on the research gaps in this area. This review focuses on the
empirical studies published from 2009 to 2020. We identify fifteen factors that
motivate the adoption of DFTs as well as five inhibitors to adoption. The literature
lists perceived usefulness, perceived ease of use, compatibility, trust, security, effort
expectancy, performance expectancy, and facilitating conditions as the most
significant factors affecting the adoption of DFTs. In the study, cost of use, perceived
danger, complexity, unwillingness to change, and privacy concerns are identified as
major challenges to DFT adoption. Additionally, the paper outlines various research
gaps in this field of research, particularly from the standpoint of methodology. The
present work has significance for policymakers and managers in formulating policies
and strategies to encourage the adoption of DFTs. As per the results, a research
agenda for the future has been established.

Iftikhar Ahmad, Shahid Iqbal , Shahzad Jamil and Muhammad Kamran (2021)
- The digitization of the banking industry has provoked a revolution in digital frauds.
At present, e-banking frauds is an issue experienced globally and have turned into an
industry in which cybercriminals are using advanced tools. The tools such as denial of
service attack, malware, phishing, trojans, viruses and identity theft. This study
conducted a systematic literature review and highlighted the technologies that banking
institutions are currently using to secure e-banking system and techniques behind
security vulnerabilities within the e-banking system. The study included articles from
online databases such as Emerald insight, Google scholar, IEEE, JSTOR, Springer
and Science Direct. The detail assessment proved glimpse of current situation and
highlight advance security techniques that can effectively overcome the adverse effect
on e-banking success.

S Ahmed, S Sur (2021) - In the ever fast-changing modern world, through the use of
digital banking services (DBS), the old concept of banking in a traditional way has
been completely changed. It was made possible through the use of modern artificial
intelligence embedded technologies. It was done to meet the ever-growing demands
of customers through more user-friendly and time-saving uses of technologies. This
paper aims to uncover and analyse the factors affecting the adoption of digital
banking services by rural micro small and medium enterprises (MSMEs). MSME is

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one of the most active sectors in India. It plays an important role in the economic
development of the country through exports and domestic supplies and by creating
employment opportunities. The study was conducted using a questionnaire survey. In
total, 148 rural MSME owners were considered for the analysis in this study. Rural
MSMEs in India are way behind in using digital banking services than their urban
counterparts. The present study uses IBM SPSS and AMOS to shed light on the
prevalent factors that influence the attitude to use digital banking services. It is found
out that convenience (which includes perceived usefulness and perceived ease of use),
perceived self-efficacy, demonetization, performance expectancy and pandemic effect
have a significant effect on the attitude to adopt DBS. The findings of the study will
provide deeper insights for the banks as well as different government agencies to
revamp their strategies in changing the financial landscape of the country through a
“cashless economy”. Demonetization, a boom in eCommerce in India, pandemic-
related lockdowns or restrictions and the government’s push for the digital economy
will aid the use of DBS at a faster pace. The outcome of the study will help both the
government and the financial institutions to chalk out strategies to cater to the rural
MSMEs in embracing DBS. The use of digital services for banking in India is in a
nascent stage, but the rate of adoption is increasing at a cyclonic speed. Affordable
electronic devices, cheap internet and different medium of using DBS are fuelling the
rapid increase; yet, limited research focuses on the differences in the rate of
acceptance of digital banking services concerning rural MSMEs.

B Kaur, S Kiran, S Grima, R Rupeika-Apoga (2021) - The widespread use of

digital technologies and the current pandemic (COVID) have fueled the need and call
for digital transformation in the banking sector. Although this has various benefits, it
is a disruption to the norm to which a bank customer has to become accustomed. This
variance means that customers would have to make some changes to their routine.
This can constitute risks in terms of maintaining customer satisfaction at previous
levels. These risks are associated with customer retention because a service or product
needs to be aligned with customer expectations to avoid them switching to other
service providers. Moreover, it can also have an effect on reputation. Offering digital
account opening or remote deposits may not satisfy customers; competitive advantage
depends on many aspects such as providing a hassle-free, personalized and cyber-
secure experience, economic aspects and the needs of the society at large. Therefore,

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there is a need to understand the intensity of the risk factors that influence customer
satisfaction for digitalized banking services and products. To do this, we carried out a
structured survey, framed on the five dimensions of the SERVQUAL model, which
was sent out to Northern Indian banking customers, to which we received 222 valid
responses. We subjected the data received to Structural Equation Modelling using the
SmartPLS version 3 application software. Results reveal that digital banking
customers in Northern India are genuinely satisfied with the quality of services
provided by digital banking. Moreover, ‘reliability’ has the strongest risk factor
impact on customer satisfaction, followed by ‘tangibility’ and ‘responsiveness’.

N Wadesango, B Magaya (2021) - Digital banking in the millennium modern-day

banking activities has become a trending topic of the financial industry. The objective
of the study was to establish the effect of digital banking on financial performance
among commercial banks. Desktop research methodology was adopted and this was a
convenient review of literature. Literature reviewed indicated that online customer
deposits and online banking transaction had a significant relationship with ROA while
Internet fees and commissions and digital banking expenditure had a negative
relationship with ROA. However, the fees and commissions on Internet banking
predicted a negatively and significant influence on ROA in banks. Hence, increase in
Internet fees and commissions led to decrease in ROA while digital banking
expenditure predicted a significant and negative effect on ROA in banks increase in
digital banking expenditure led to decrease in ROA in banks. The study concluded
that ROA in banks increased in upwards trends due to digital banking.

MM Hasan, L Yajuan, S Khan (2020) - While much progress has been made in
promoting inclusive finance through the ownership of a basic personal account,
billions of people in developed and emerging markets are still underrepresented in
financial services. Also, they are unable to contribute to the provision of better access
to financial services. The purpose of this study was defined as to explore the
contribution of digital financial services (DFSs) in promoting inclusive finance in
China. This study presents a theoretical discussion on how DFSs play an important
role in promoting China’s inclusive finance. This study uses the systematic review
method of qualitative sampling to achieve the goal of this study. Different forces play
different roles behind the promotion of inclusive finance. However, DFSs are
considered to be one of the most influential forces in the development of inclusive

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finance in the present world. Many examples of how DFS can improve inclusive
finance are discussed in the literature. In addition, different contributions to DFS
usage are presented here to achieve the objectives of this study. The contents of the
study contributed to a better understanding of the practical impact and implication of
DFS tools in transforming the financial sector. In this study, first, a structured review
method is followed; second, most important discussion on the contribution of DFS in
promoting inclusive finance is presented and third, the relation between the topic and
related research is identified.

D Mhlanga (2020) - This study sought to investigate the impact of AI on digital

financial inclusion. Digital financial inclusion is becoming central in the debate on
how to ensure that people who are at the lower levels of the pyramid become
financially active. Fintech companies are using AI and its various applications to
ensure that the goal of digital financial inclusion is realized that is to ensure that low-
income earners, the poor, women, youths, small businesses participate in the
mainstream financial market. This study used conceptual and documentary analysis of
peer-reviewed journals, reports and other authoritative documents on AI and digital
financial inclusion to assess the impact of AI on digital financial inclusion. The
present study discovered that AI has a strong influence on digital financial inclusion
in areas related to risk detection, measurement and management, addressing the
problem of information asymmetry, availing customer support and helpdesk through
chatbots and fraud detection and cybersecurity. Therefore, it is recommended that
financial institutions and non-financial institutions and governments across the world
adopt and scale up the use of AI tools and applications as they present benefits in the
quest to ensure that the vulnerable groups of people who are not financially active do
participate in the formal financial market with minimum challenges and maximum
benefits.

N Souiden, R Ladhari, W Chaouali (2020) - This study is a systematic review of

mobile banking services. Its main objective is to provide a state-of-the-art review of
this particular growing type of services. It inventories and assesses the most
significant determinants of and barriers to consumers' adoption of mobile banking.
Moreover, it identifies the most common consequences of this adoption. An
integrated model regrouping and relating the five perspectives is proposed, leading to
intriguing implications for both academics and practitioners.

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Sindhu Singh (2019) - The objective of this study is to measure the e-service quality
of internet banking and the relationship with customer satisfaction in India. This study
aims to explore the critical factors of e-service quality of internet banking in India and
to measure the customers’ satisfaction of internet banking on the identified e-service
quality dimensions. A survey method was carried out to acquire data from 650
respondents from India. Exploratory and confirmatory factor analysis was used to
identify the dimensions of internet banking. Multiple Regression Analysis was used to
test the relationship with e-service quality dimensions and customer satisfaction of
internet banking. The study uncovered three factors of e-service quality, namely,
“Responsiveness,” “Efficiency,” and “Perceived Credibility”. “Responsiveness”
found to be the most significant predictor of the e-service quality of internet banking.
The study also found that there is a positive relationship exists between e-service
quality dimensions and customer satisfaction of internet banking. These findings can
be used by banks to improve the service quality of their internet banking service and
thereby to satisfy their customers. The findings open up many business opportunities
to India as well as other Asian countries. The digital payments industry can
concentrate on improving the security of the payment systems, gateways, and
payment networks. Advanced technologies can be developed to improve the digital
payment systems which offer many business opportunities for creating computers,
smartphones, and innovation in internet and security software. The study findings can
be used by banks to improve the service quality of internet banking and attract more
customers towards using this service. The improvement in service quality comprising
of responsiveness, efficiency, and perceived credibility automatically leads to the
customer satisfaction of internet banking services, which gives competitive
advantages to the banks. This study is an attempt to cover both urban and rural
population of India to understand the digital mindset by studying the quality
perception of internet banking channel.

Varda Sardana and Shubham Singhania (2018) - This paper reviews the theoretical
literature on the growth of digital and information technology in the Indian banking
industry. The stupendous advancements in digital technology have transformed the
way banks operate. The commencement of the age of digital business has been
disrupting the business environment and breaking out innovative and singular ways of
doing business. One of the latest outcomes of this is digital banking. Digital banking

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technologies have escalated over the years, with the availability of a large portfolio of
products such as deposits, ATMs, debit cards, mobile payments, and the like. There is
an immense possibility of using the infrastructure of the digital age to create
opportunities - both local and global. The increase in competition and various other
challenges in the banking sector are pushing the banks to adopt new digital models
that present unique sources of value to them. This paper examines the extent and the
direction of the effect of digital technology in the domain of Indian banking.

KJ Patel, HJ Patel (2018) - The purpose of this paper is to validate the technology
acceptance model (TAM) and its extended form to understand the factors influencing
internet banking adoption in Gujarat. The findings of this paper enable internet
banking service providers to develop/modify new/existing internet banking services in
order to achieve higher adoption rates of internet banking. Additional incorporated
variables in a new model considerably contribute to improving the understanding of
internet banking adoption in Gujarat.

KJ Reeshma (2017) - Banking system plays a very important role in the Indian
economy. It is like a central nerve to a nation’s economy as it caters to the financial
needs of credit in all the domains of the society. The growth and advancements in
technology has led to a paradigm shift in the entire banking operations and systems.
Further the development of e-banking created a massive change in terms of fulfilling
customers’ divergent needs. The two fold objectives of current budget, namely,
demonetization and GST, purely depend on digital banking. The present study
explores the influence of technology in banking sector among customers by reviewing
the relevant literature from the earlier studies. An in-depth study on the impact of
technology in banking, reveals the factors such as, effectiveness of data management,
value added services, level of knowledgeand awareness, security, safety, service
quality, productivity, and profitability.

A Rajendran, SS Shenoy, GP Rao (2017) - Banking is the backbone of any

economy when it comes to growth. Banks have taken initiatives on an innovative idea
of offering their facilities on a digital platform. Post demonetization, online banking
services have become a fundamental need for both banks and customers. Banks, as
well as the Government, are joining hands to make India a ‘Digital Economy.’ It is a
transformation focusing from “Nice to have” to “Need to have.” In the year 2003, a

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team of researchers (Venkatesh, Morris, Davis, & Davis, 2003.) created a Unified
model called UTAUT (Unified Theory of Acceptance and Use of Technology) to test
the acceptance and usage of technology among the users by unifying eight other
previous models. Post-Demonetization, every citizen of India is asked to engage in a
digital transaction. The objective of the study is to understand the customer attitude
towards online banking using the UTAUT model. Researchers collected the data
using both primary and secondary. Required suggestions were offered based on the
significant findings. Also, the study helps the bankers to understand and facilitate
their customer in a better way.

MY Keskar, N Pandey (2016) - This paper presents an exhaustive review of

literature on the current developments in internet banking. It provides an overview of
the changes as well as the ongoing research on internet banking. To identify relevant
works, research databases were searched using 11 keywords. Only research papers on
internet banking published in the last 15 years (2002–2016) were selected. The
selected articles were further refined on the basis of country of origin, journal type,
and research methods used for data analysis. Finally, 51 papers were selected on the
basis of specific inclusion criteria for further analysis. These papers were grouped by
research themes, and customer satisfaction with internet banking was identified as the
most common theme.

A Shankar, P Kumari (2016) - The purpose of this paper is to explore factors

affecting mobile banking (m-banking) adoption behavior of Indian consumers.
Furthermore, the purpose is to identify which factors have a major influence on
adoption intention in context with m-banking. Design/methodology/approach: Data
were collected through an online survey of mobile user respondents. A total of 248
utilizable cases were collected from m-banking users. Review of previous literature
has been used to establish hypothesis, exploratory factor analysis and multiple
regression analysis has been used to check the significant factors affecting adoption of
m-banking in India. Findings: A total of eight factors has been identified which affect
m-banking adoption behavior in India. Usefulness has been found to be making the
most impact with reference to m-banking adoption. However, social influence is
identified as least influential factor among all factors. Originality/value: The study
provides a comprehensive understanding of the factors which affect m-banking

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adoption behavior of consumers in India which may help banks to understand
consumer intention and make strategy accordingly to ensure financial inclusion.

WA Alkhowaiter (2016) - The global spread and use of internet and mobile
contributed to the development of digital payments and baking. There is a lack of
research which provides comprehensive synthesis and analysis of factors affecting the
use and adoption of digital banking and payment methods in GCC countries. Thus,
the aim of this paper is to provide a comprehensive literature review and perform
weight and meta-analysis. By reviewing 46 studies, it was found that best predictors
for digital payment and banking adoption in GCC countries are trust, perceived
security and perceived usefulness. Based on the extensive literature review, the
conceptual of factors affecting adoption digital banking and payment methods in Gulf
countries model was proposed, which will set agenda for future research. Practitioners
will be able to use the findings from this study to improve adoption and quality of
digital banking and payment services.

R Yadav, V Chauhan, GS Pathak (2015) - The purpose of this paper is to

understand the consumer’s intention toward internet banking adoption in Indian
context by combining two theories; theory of planned behavior (TPB), technology
acceptance model (TAM) and an additional construct, i.e. perceived risk. A
questionnaire based survey was conducted to collect responses from young consumers
(210 usable responses). Data were analyzed using structural equation modeling to
evaluate the strength of relationship. The result shows that perceived usefulness,
attitude, subjective norm and perceived behavioral control significantly influences the
consumer’s intention to adopt internet banking whereas perceived risk failed to show
any significant influence over intention to adopt internet banking. The study is limited
to young consumers (i.e. professional students) only. Further, the study concerns itself
with consumer’s intention not actual behavior. The finding will be useful for bank
officials for devising strategies and policies related to internet banking in the Indian
scenario. The paper is one of the initial attempts in Indian context to understand the
consumer’s intention to adopt internet banking by combining TPB and TAM theories.

SY Dauda, J Lee (2015) - The importance of service delivery technology and online
service adoption and usage in the banking industry has received an increased
discussion in the literature in recent years. Owing to the fact that Strong online

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banking services are important drivers for bank performance and customer service
delivery; several studies have been carried out on online banking service adoption or
acceptance where services are already deployed and on the factors that influence
customers‫ ׳‬adoption and use or intention to use those services. However, despite the
increasing discussion in the literatures, no attempt has been made to look at
consumers‫ ׳‬preference in terms of future online banking service adoption. This study
used conjoint analysis and stated preference methods with discrete choice model to
analyze the technology adoption pattern regarding consumers‫ ׳‬preference for potential
future online banking services in the Nigerian banking industry. The result revealed
that to increase efficiency and strengthen competitiveness, banks need to promote
smart and practical branded services especially self-services at the same time promote
a universal adoption of e-banking system services that add entertainment or extra
convenience to customers such as ease of usage including digital wallet, real-time
interaction (video banking), ATMs integrated with smart phones, website
customization, biometric services, and digital currency. These services can contribute
to an increasing adoption of online services.

Shaza W. Ezzi (April 2014) - In their research paper titled “A Theoretical Model for
Internet Banking: Beyond Perceived Usefulness and Ease of Use” tried to inquired
different types of electronic banking like ATM’s, telephone banking, and electronic
funds transfer, Internet banking like has evolved from consumers’ needs to have
superior access to banking services clear of most banks teller-staffed, normal
operating hours. Additionally, Internet banking has grown swiftly from the recent and
the span increases in ecommerce. Internet banking (IB) continues to govern the
landscape of electronic banking as consumers continue to use IB to complete schedule
banking transactions in addition to conducting on-line sales and purchasing. This
study presents a theoretical model considered to help researchers and practitioners
better understand the acceptance and adoption of Internet Banking. The proposed
model maybe particularly useful in developing nations where consumers are loath to
use Internet Banking even when the services are available. However, a review of
several studies that have investigated consumers’ acceptance of Internet banking
services from a multiplicity of perspectives have not reached a clear consensus of the
factors that contribute to overall consumer acceptance and adoption. The paper

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concludes with discussions of the managerial implications and avenues for future
research.

R Thakur, M Srivastava (2014) - The purpose of this paper is to accomplish two

objectives – to test the functional relationship between adoption readiness (AR),
perceived risk (PR) and usage intention for mobile payments in India and to
investigate the stability of proposed structural relationships across different customer
groups. On appraising the proposed model, five out of six hypotheses were fully
supported while one hypothesis was partially supported. Test of invariance showed
significant variance among users and non-users. The results of the study may vary
with national context, service offerings, regulatory framework and other customer
personal variables (i.e. lifestyle) suggesting future research opportunities. The results
facilitate the comprehension of the role of different factors on the mobile payments
usage intention among customers. In addition, the results expand the knowledge on
consumer behaviour towards financial technological innovations.

Ankit Kesharwani & Gajulapally Radhakrishna (2013) - In their research paper

“Drivers and Inhibitors of Internet Banking Adoption in India”. This paper research
on different banks is on condition that e-banking services, as this would revolutionize
their profits. Since internet banking in India is still in its nascent stage, it is essential
for e-banking institutions to enhance reception and usage of internet as a banking
channel by their customers. This paper has reviewed the most of seminal studies in
the area of diffusion of innovation and makes an attempt to do an experimental
research that looked into the factors that drives and inhibits internet banking usage in
India. An investigative factor analysis followed by a positive factor analysis has been
applied on 362 internet banking users. Findings resulted in seven factors – perceived
benefit, hacking and fraud risk, performance risk, computer self efficacy, technology
intricacy, social influence, and pricing concerns. The results suggest that acceptance
and usage of internet banking services can turn into a fundamental concern for future
research, as the drivers overcoming the inhibitors over time at an influencing rate.
Moreover, this study also compares the findings with extant diffusion of innovation
literature and identified several additional factors that can affect internet banking
adoption in India.

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Simon Gyasi Nimako, Nana Kwame Gyamfi, Abdil Mumuni Moro Wandaogou
(2013) - This paper empirically examines Customer Satisfaction (CS) with internet
banking service quality (IBSQ) in the Ghanaian banking industry. The study was a
cross-sectional survey that employed the use self-administered questionnaire to
collect primary data from a sample of 200 respondents of two banks through personal
contact. The findings are that customers of Merchant Bank, Ghana (MBG) are more
satisfied with the IBSQ than those of Ghana Commercial Bank (GCB). Moreover,
income influenced the satisfaction of customers for IBSQ generally. It was found that,
generally, customers of the two banks are dissatisfied with the promptness of
reception of responses to customer request, the ability to be guided online to res olve
problems, offering of preferentially lower fees/ rates and charges, and reasonability of
the transaction fee for online banking transactions, but are less satisfied with the
quickness of web pages loading when using online banking transactions. Theoretical
and managerial implications of the findings have been discussed, and limitations are
noted. The paper contributes to the literature in area of customer satisfaction in
electronic banking.

A Kesharwani, SS Bisht (2012) - The main purpose of this paper is to extend the
technology acceptance model (TAM) in the context of internet banking adoption in
India under security and privacy threat. Keeping the TAM proposed by Davis as a
theoretical basis, an extended TAM incorporating security‐ and privacy‐related issues
for internet banking adoption is conceptualized. The authors have incorporated
various inhibitors of internet banking which restrict the use of internet banking
adoption under “perceived risk”, and also consider the role of the bank web site as a
key determinant of perceived risk and of perceived ease of use in the context of
internet banking services. The paper reveals that perceived risk has a negative impact
on behavioral intention of internet banking adoption and trust has a negative impact
on perceived risk. A well‐designed web site was also found to be helpful in
facilitating easier use and also minimizing perceived risk concerns regarding internet
banking usage. Financial bank institutions should give attention to the inhibitors or
perceived risk factors of internet banking adoption in order to retain existing
customers as well as attract new consumers. The study also suggests that banks should
build a web site with features to facilitate users' assessment of internet banking
services and thus minimize the perceived risk and maximize the perceived ease of

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internet banking services. Web‐based retailers depending on online payments would
also be benefit by incorporating the elements of perceived risk and trust in their own
web design and online services. In addition to the traditional construct of TAM, a new
construct of perceived risk has been added. The impact of web site design and trust on
internet banking adoption has also been examined and shown to be significant in India
in the context of internet banking adoption.

H Hoehle, E Scornavacca, S Huff (2012) - The increased availability of

electronically mediated self-service technologies in the banking industry has changed
the way banks service their customers. Banking customers today can access, through a
variety of different channels, sets of powerful tools which allow them to conduct
analyses, make decisions and enact financial transactions via working from their
home, office or elsewhere. Following practice, research into the adoption and use of
electronic banking channels has grown substantially over the last three decades.
However, banks seek further growth in consumer electronic banking. Prior research
may not have identified all the issues involved in adoption and use and may be limited
in other ways. Scholars face challenges researching this area due to fragmented
findings and methods over three decades of study. The aim of this paper, therefore, is
to empirically determine the ‘state-of-play’ of research in this field. Using a
systematic and comprehensive review of 247 peer-reviewed articles from key research
outlets, this paper reveals theories and methods used to study adoption of electronic
banking channel at the individual level. Among other things, the findings indicate
domains and issues which have been well- or under-researched, conceptual
frameworks and principles which have been lightly- or substantially-drawn upon, as
well as research methods which have been heavily- or under-utilized. In order to
advance research in electronic banking, future researchers should consider
diversifying their theoretical and methodological approaches using the opportunities
uncovered in our findings.

Vijay M. Kumbhar (2011) - In his research paper “Factors Affecting the Customer
satisfaction In E-Banking: Some evidences Form Indian Banks”. This study evaluates
major factors (i.e. service quality, brand perception and perceived value) affecting on
customers’ satisfaction in e-banking service settings. This study also evaluates
influence of service quality on brand perception, perceived value and satisfaction in e-
banking. Required data was collected through customers’ survey. For conducting

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customers’ survey liker scale based questionnaire was developed after review of
literature and discussions with bank managers as well as experts in customer service
and marketing. Collected data was analyzed using principle component (PCA) using
SPSS 19.0. A result indicates that, Perceived Value, Brand Perception, Cost
Effectiveness ,Easy to Use, Convenience, Problem Handling, Security/Assurance and
Responsiveness are important factors in customers satisfaction in e-banking it
explains 48.30 per cent of variance. Contact Facilities, System Availability,
Fulfillment, Efficiency and Compensation are comparatively less important because
these dimensions explain 21.70 percent of variance in customers’ satisfaction.
Security/Assurance, Responsiveness, Easy to Use, Cost Effectiveness and
Compensation are predictors of brand perception in e-banking and Fulfillment,
Efficiency, Security/Assurance, Responsiveness, Convenience, Cost Effectiveness,
Problem Handling and Compensation are predictors of perceived value in e-banking.

Pooja Malhotra & Balwinder SINGH (2009) - In their research paper “The Impact
of Internet Banking on Bank Performance and Risk: The Indian Experience”. The
paper describes the current state of Internet banking in India and discusses its
implications for the

18Indian banking industry. Particularly, it seeks to examine the impact of Internet

banking on banks’ performance and risk. Using information drawn from the survey of
85 scheduled commercial bank’s websites, during the period of June 2007, the results
show that nearly 57 percent of the Indian commercial banks are providing
transactional Internet banking services. The univariate analysis indicates that Internet
banks are larger banks and have efficiency ratios and profitability as compared to
non-Internet banks. Internet banks rely more heavily on core deposits for funding than
non-Internet banks do. However, the multiple regression results reveal that the
profitability and offering of Internet banking does not have any significant
association, on the other hand, Internet banking has a significant and negative
association with risk profile of the banks.

S Grabner‐Kräuter, R Faullant (2008) - This study seeks to investigate the role of

internet trust as a specific form of technology trust in the context of internet banking.
Furthermore, the integration of propensity to trust within the hierarchical structure of
personality and its applicability to technological systems are investigated. The results

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confirm the influence of internet trust on risk perception and consumer attitudes
towards internet banking. Propensity to trust is a determinant not only for
interpersonal relationships but also for trust in technological systems. Making the
internet banking interface for the customer more attractive and easier to navigate is
not enough to increase the adoption rate of internet banking. Trust‐creating activities
to increase internet trust and to diminish perceived risk must be continuously pursued.
Propensity to trust is an important determinant in the fruitfulness of these actions. The
paper presents the conceptualization of internet trust as a specific form of technology
trust, and its pivotal role in the adoption process of internet banking, together with the
extension of the propensity to trust concept to technological systems.

Rajesh Kumar Srivastava (2007) - In his research paper “Customer’s perception on

usage of internet banking”.This paper present to Internet banking is still at infancy
stage in the world. Many studies focused on usage of internet banking but many
factors on non-usage were overlooked. This research was carried out to validate the
conceptual model of internet banking. The causes were identified and researched
through correcting the causative factors so that internet banking can bused by more
people. This will help the banking operations to be more cost effective. The research
is focused on what are the customer’s perceptions about internet banking and what are
the drivers that drive consumers. How consumers have accepted internet banking and
how to improve the usage rate were the focus of research area in this study.
Qualitative exploratory research using questionnaire was applied. 500 respondents
were selected for study after initial screening. They were all bank customers. The
study revealed that education, gender, income plays an important role in usage of
internet banking. Not much researches been done on these areas as they were focused
more on the acceptance of technology rather than on people. The research
corroborated the conceptual framework stating that if skills can be upgraded there will
be greater will tousle internet banking by consumers. Inhibitory factors like trust,
gender, education, culture, religion, security, and price can have minimal effect on
consumer mindset towards internet banking.

Subbaroo (2007) - “focused on the trends that convert the traditional banking system
to a technological banking system and has given a conclusion that technology should
be more updated to remain in an modern era”.

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D Littler, D Melanthiou (2006) - Research on the consumer perceptions of
innovative offerings has tended to focus on products as opposed to services. Perceived
risk has generally not been awarded a major role while uncertainty, which is viewed
here as distinct from risk, has for the most part been disregarded. The study reported
in this paper strives to identify some of the major risks and uncertainties associated
with a new service, Internet Banking, during the early stages of its market
development. The empirical research involved a qualitative study of a small sample of
consumers and a survey of both adopters and non-adopters of Internet Banking. The
survey employed a traditional research instrument, which involved the presentation of
pre-identified risks and uncertainties. It was possible to identify several major ‘risks’
as well as ‘uncertainties’. We raise questions about whether or not the anxieties and
concerns identified by such a process of consumer research are true reflections of the
major influences affecting consumer behaviour towards new retail services. The
adoption of a ‘perceived risk’ stance as against one founded on the view that
consumers may lack certainty about outcomes and consequences has implications for
both theory and practice.

Dannenberg and Kellner (1998) -“through the study the author has focused on the
opportunities for effective utilization of internet in connection with banks, he has
concentrated more on the application of today’s technology for the success of banks
in the competitive market where the service of the banks has been evaluated based
upon the websites and services which has been provided at low price. At the end of
the research he found that banks could move further by entering into strategic market
with internet so that the feasibility of the banks could be high”.

Daniel (1999) - “inferred that e-banking was the new delivery channel by the retail
banks in developing countries. The object of the study was to analyze the current
trend of e-services of major retain banking organizations in UK. Through this study
he found to make services more adaptable the customers should be given maximum
choices and convenience”.

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CHAPTER – IV
DATA ANALYSIS AND INTERPRETATION

1 AGE
Age No. of responses % of responses
Between 20-30 36 72%
Between 30-40 14 28%
Above 40 0 0
Total 50 100%

Age
0%

28%

Between 20-30
Between 30-40
above 40

72%

Interpretation:
 Here we can understand that majority of the respondents are belonging to
‘Between 20-30 age bracket’ out of the 50 respondents.
 28% of the respondents are in the age bracket of ’30-40’ years.
 72% of the respondents are in ‘20-30’ years age bracket.
 There is no respondent belonging to the age 40 years and above.

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2 Gender

Gender No. of responses % of responses

Male 26 52%
Female 24 48%
Total 50 100%

Gender

48% Male
52% Female

Interpretation:
 From the above table and diagram we learn that there are total 50 respondents
 52% of them are male, i.e., 26 respondents.
 48% of them are female, i.e., 24 respondents.

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3 Qualification

Qualification No. of responses % of responses

Graduate 30 60%
Post Graduate 12 24%
Other 8 16%
Total 50 100%

Qualification

16%

Graduate
Post Graduate
24% Other
60%

Interpretation:
 From the above table and pie chart we can learn that there is 60% of the
respondents whose highest education is Graduation.
 24% from the respondents have the highest education as Post Graduate.
 16% of the respondents are belonging to other category which include X, XII,
diploma, any special course etc.

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4 Occupation

Occupation No. of responses % of responses

Self employed 8 16%
Salaried 27 54%
House wife 3 6%
Student 12 24%
Total 50 100%

Occupation

16%
24%

Self employed
Salaried
6% House wife
Student

54%

Interpretation:
 As we can see in the chart and table majority 54% of the respondents are
salaried and number of respondents are 27.
 24% of the respondents are students and number of respondents are 12.
 16% own businesses and number of respondents are 8.
 6% of the respondents are housewives and number of respondents are 3.

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5 Annual income

Annual income No. of responses % of responses

Below Rs. 2,00,000 25 50%
Between Rs.2,00,000- 17 34%
4,00,000
Between Rs. 4,00,000- 8 16%
6,00,000
Above Rs. 6,00,000 0 0%
Total 50 100%

Annual income
0%

16%
Below Rs. 2,00,000

Between Rs.2,00,000-4,00,000

50%
Between Rs. 4,00,000-
6,00,000
34% Above Rs. 6,00,000

Interpretation:
 50% respondents earn less than 2 Lakh a year.
 34% respondents haven an earning between 2 Lakh and 4 Lakhs.
 16% respondents earn between 4 Lakhs and 6 Lakhs.
 0% respondents earn more than 6 Lakhs a year.

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6 Do you think that digital banking improved profitability?

Digital banking No. of responses % of responses

improved
profitability
Yes 50 100%
No 0 0%
Total 50 100%

Digital banking improved profitability

0%

Yes
No

100%

Interpretation:
 It is very clear that all the 50 respondents are agree with this that digital
banking improved profitability.
 Not a single respondent is there who doesn’t agree.

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7 Do you think that digital banking has resulted into better
operational efficiency?

digital banking has No. of responses % of responses

resulted into better
operational efficiency
Yes 49 98%
No 1 2%
Total 50 100%

Digital banking has resulted into better operational

efficiency
2%

Yes
No

98%

Interpretation:
 Out of 50 there are 49 respondents who believe that digital banking has
resulted into better operational efficiency.
 There is 1 respondent who have different view on this that digital banking has
resulted into better operational efficiency.

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8 Do you think that digital banking is safe and secure?

digital banking is safe No. of responses % of responses

and secure
Yes 49 98%
No 1 2%
Total 50 100%

Digital banking is safe and secure

2%

Yes
No

98%

Interpretation:
 There are 98% respondents who believe that digital is safe and secure.
 There is 2% respondent who feels that digital banking is not safe.

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9 According to you what is better?

Better between No. of responses % of responses

digital banking or
traditional banking
Digital banking 47 94%
Traditional banking 3 6%
Total 50 100%

Better between digital banking or traditional banking

6%

Digital banking
Traditional banking

94%

Interpretation:
 94% respondents, i.e. 47 out of 50 choose digital banking in this comparison.
 And 6% respondents, i.e., 3 out of 50 with their own personal reasons choose
traditional banking between this two.

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10 what will be more convenient for you if you want to open deposit
account?
More convenient to No. of responses % of responses
open deposit account
Visit to the nearest 14 28%
bank branch
Using mobile 36 72%
app/website of
preferred bank
Total 50 100%

More convenient to open deposit account

28%

Visit to the nearest bank

branch
Using mobile app/website of
preferred bank

72%

Interpretation:
 We can clearly understand that 72% of the respondents prefer using mobile
app/website of preferred bank rather visiting bank branch to open deposit
account.
 28% of the respondents prefer visiting nearest bank branch to open deposit
account.

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11 what kind of digital banking services do you use more often?

Digital banking No. of responses % of responses

services use more
often
Obtaining bank 11 22%
statement
Fund transfer 16 32%
Account management 11 22%
Bill payment 12 24%
Total 50 100%

Digital banking services use more often

24% 22%
Obtaining bank statement
Fund transfer
Account management
Bill payment
22%
32%

Interpretation:
 After analysing the chart and table we can see that respondents use digital
banking services for all the options as per their own preferences.
 22% of the respondents use digital banking services to obtain bank statement
more often.
 32% of the respondents use digital banking for fund transfer.
 22% of the respondents use digital banking for account management.
 24% of the respondents use digital banking for bill payment.

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12 Do you think usage of digital banking services had increased
during covid 19 pandemic?

Usage of digital No. of responses % of responses

banking services had
increased during
covid 19 pandemic
Yes 49 98%
No 1 2%
Total 50 100%

Usage of digital banking services had increased during

covid 19 pandemic
2%

Yes
No

98%

Interpretation:
 As per the data collected from respondents we can see that 98% of the
respondents think that usage of digital banking services had increased during
covid 19 pandemic.
 2% of the respondents doesn’t believe that usage of digital banking services
had increased during covid 19 pandemic.

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13 Do you know about NEO BANK?

Know about NEO No. of responses % of responses

BANK
Yes 27 54%
No 23 46%
Total 50 100%

Know about NEO BANK

46% Yes
No
54%

Interpretation:
 54% of respondents are aware of NEO BANK.
 46% of respondents doesn’t know about NEO BANK.

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 14 Do you think employing digital platform has led to reduction
in costs?

Employing digital No. of responses % of responses

platform has led to
reduction in costs

Yes 43 86%
No 7 14%
Total 50 100%

Employing digital platform has led to reduction in

costs

14%

Yes
No

86%

Interpretation:
 86% of the respondents think that employing digital platform has led to reduction
in costs.
 14% of the respondents think that employing digital platform hasn’t led to
reduction in costs.

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 15 What Do you think are the challenges in the growth of digital
banking in India?

challenges in the growth No. of % of responses

of digital banking in responses
India
Traditional banking 27 54%
habits
Security technical issue 13 26%
Transaction difficulties 7 14%
Small marketing budgets 3 6%
Total 50 100%

challenges in the growth of digital banking in India

6%
14%
Traditional banking habits
Security technical issue

54% Transaction difficulties

26% Small marketing budgets

Interpretation:
 From the above chart and table we can understand that 54%, i.e., 27 out of 50,
respondents believe that the challenge in the growth of digital banking in India
is the traditional banking habits of people.
 26% i.e.,13 out of 50, respondents believe that the challenge in the growth of
digital banking in India is the Security technical issue.
 14% i.e., 7 out of 50, respondents believe that the challenge in the growth of
digital banking in India is the transaction difficulties.
 6% i.e., 3 out of 50, respondents believe that the challenge in the growth of
digital banking in India is the Small marketing budgets.

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 16 Do you think digitalization in banking sector result in loss of
jobs?

Digitalization in No. of responses % of responses

banking sector result
in loss of jobs
Yes 39 78%
no 11 22%
Total 50 100%

Digitalization in banking sector result in loss of jobs

22%

Yes
no

78%

Interpretation:
 78% of the respondents believe that Digitalization in banking sector result in
loss of jobs.
 22% of the respondents doesn’t believe that Digitalization in banking sector
result in loss of jobs. May be they have their own perspective on this.

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 17 Do you think rural people also use digital banking?
Rural people also No. of responses % of responses
use digital banking
Yes 35 70%
No 15 30%
Total 50 100%

Rural people also use digital banking

30%

Yes
No

70%

Interpretation:
 70%, i.e., 35 out of 50, respondents think that rural people also use digital
banking.
 30%, i.e., 15 out of 50, respondents think that rural people doesn’t use digital
banking.

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 18 Would you suggest others to use digital banking?
Suggest others to No. of responses % of responses
use digital banking
Yes 46 92%
No 4 8%
Total 50 100%

Suggest others to use digital banking

8%

Yes
No

92%

Interpretation:
 92% of the respondents suggest others to use digital banking.
 8% of the respondents doesn’t suggest others to use digital banking.

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CHAPTER- V
This chapter presents the findings based on the data analysis. Conclusions are based
on findings and overall observations during the study. The flow of chapter has been
maintained by schedule designed for research. The chapter has divided in to two
major sections-suggestions and Conclusion.

 CONCLUSIONS AND SUGGESTION

 CONCLUSIONS

A conclusion is the last part of something, its end or result. When you write a paper,
you always end by summing up your arguments and drawing a conclusion about what
you've been writing about.

Online banking services are used by majority of people in age group of 20-30 years.
There is less number of women who used online banking services. Because they are
still unaware about how to use banking services. It also found that financial decision
has been kept in the hands of men counterpart.

More salaried people are using Digital banking services of because bank provided lots
of Facilities to them. students also use online banking services in more proportion
because banks provide facilities regarding academic curriculum to them.

The users of online banking services are educated peoples. Among all, there is more
number of graduate people who are using online banking services.

It was our belief that digital banking services basically depend upon the income level
of any person. However, there is no such relationship to start online banking services.
Because there is no any limitations on maintain the balance for online banking
services.

More number of customers said that they had taken right decision to have online
banking services because bank provide good and conventional facilities to the
customers.

It is found that most of the people were using online banking services for time saving
purpose and also to access from any ware any time. Internet banking is more

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frequently used, Online Service followed by, Fund Transfer, Pay Bill, account
management, obtaining bank statement.

Mostly the digital banking services are used in the form of internet banking, rest of
the services are feel unsecured to the customers.

It is found that traditional banking habits are the major problem in digital banking
services. The digital banking services mostly popular among the people for internet
banking only.

Online banking services help to reduce the cost of transactions, save time, they are
user friendly, and they can be accessed from any place. All these feathers have
positive impact on the people for using online banking services

The concern of this study is the Digital banking services and the customer
satisfaction. The results showed that there is a strong satisfaction about Digital
banking among all customers. Study has also shown that the overall customers’
satisfaction regarding Digital banking services were found high due to cost
effectiveness and user-friendliness. However, it was found that the Digital baking
users are not completely satisfied with accessibility, system design and problem
solving. With regards the relative importance of the online service information of
online banking services, understanding of difficulties is regarded as the most
important factor of the Digital banking services. Furthermore, the study also revealed
that overall satisfaction of respondents is affected by age and level of experience,
level of education but not by gender and annual income. The banks must improve the
customer satisfaction through customer relation management, online market research
and business intelligence. Digital banking customers end to be much more concerned
with the security of their banking transactions and the privacy of their personal
information. An online banking service has become important phenomenon in the
banking industry and it will continue with progress in information communication
technology. The financial industry thus is gradually experiencing and transforming
from cash based system to a cashless system that is more convenient and reliable,
where Digital banking services are proved to be of immense importance.

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  SUGGESTIONS

 There is many people especially rural people who are really not aware of products
and services of digital banking like Downloadable bank statements. Cash
withdrawals, fund Transfers, Account management, Opening deposit accounts,
Loan management, Bill payments, Account monitoring etc.
 There is a need to raise awareness about the product and services of digital
banking.
 There is need to find certain easy way to advertise the financial products and
services so that rural people can also understand the advertisement and gain some
knowledge and utilize it.
 There is need to spread more awareness about the NEO banks as maximum people
are not aware of the same.
 Also, people should tell others to use digital banking.
 There is need to gain trust of the people. People should feel secure while using
digital banking services.
 Bank should motivate the age group of 30 to 60 years to use online banking
services for their banking purposes.
 Bank should adopt some new policies and incentives to the online banking
customers for making large number of transactions.
 Bank should improve the technical and physical accessibility of online banking
services.
 For the women customers bank have to take necessary steps to use online banking
services.
 Bank should provide more facilities like training program, awareness camps to all
types of customers.
 Bank should make collaboration with other financial institution to collect their bill
payment premium and other finance related matter online.
 Bank should implement easy way to access online banking services for the people
who are unaware about how to use online banking services very fluently.
 Bank should improve the online banking service quality of website design, home
page of bank web site and server availability.

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CHAPTER-VI
BIBLIOGRAPHY

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know-about-how-it-
differs/?utm_term=&utm_campaign=Blog+Traffic+Dynamic&utm_source=ad
words&utm_medium=ppc&hsa_acc=9457382041&hsa_cam=17725356181&
hsa_grp=137176937205&hsa_ad=609968248040&hsa_src=g&hsa_tgt=dsa-
19959388920&hsa_kw=&hsa_mt=&hsa_net=adwords&hsa_ver=3&gclid=Cj
wKCAjwpqCZBhAbEiwAa7pXedG0gJ3Mmg5oFmeQcBU_VcBGiSD2tuyy
MG_GYcG4halHClbv-3EDfxoCQ4MQAvD_BwE
 https://appinventiv.com/blog/digital-transformation-in-banking/amp/
 https://www.esds.co.in/blog/what-exactly-is-core-
banking/#:~:text=Core%20Banking%20Solution%20(CBS)%20is,from%20an
y%20location%2C%20any%20time
 https://bfsi.economictimes.indiatimes.com/amp/news/nbfc/nbfcs-dependent-
on-recovery-agents-face-lesser-recoveries-higher-npas/94477854
 https://bfsi.economictimes.indiatimes.com/amp/news/banking/digital-banking-
units-a-precursor-to-digital-bank-licenses/91180719
 https://www.livemint.com/news/india/rbi-unveils-guidelines-for-digital-
banking-units-here-s-10-key-points-11649333555898.html
 https://libguides.wits.ac.za/c.php?g=693518&p=4914913
 https://www.voxco.com/blog/what-is-research-methodology/
 https://www.grin.com/document/370934#:~:text=%2D%20To%20identify%2
0the%20challenges%20and,expectations%20towards%20digital%20banking%
20services
 https://prinsli.com/sources-and-methods-of-data-collection/
 https://www.researchgate.net/publication/320010397_Primary_Sources_of_Da
ta_and_Secondary_Sources_of_Data

88 | P a g e
CHAPTER-VII
APPENDIX
1. Age
a. Between 20-30
b. Between 30-40
c. Above 40
2. Gender
a. Male
b. Female
3. Qualification
a. Graduate
b. Post Graduate
c. Other
4. Occupation
a. Self Employed
b. Salaried
c. Housewife
d. Student
5. Annual Income
a. Below Rs. 2,00,000
b. Between Rs. 2,00,000-4,00,000
c. Between Rs. 4,00,000-6,00,000
d. Above Rs. 6,00,000
6. Do you think that digital banking improved profitability?
a. Yes
b. No
7. Do you think that digital banking has resulted into better operational
efficiency?
a. Yes
b. No
8. Do you think that digital banking is secure and safe?
a. Yes

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 b. No
9. According to you what is better?
a. Digital Banking
b. Traditional Banking
10. What will be more convenient for you if you want to open deposit
account?
a. Visit to the nearest bank branch
b. using mobile app/website of preferred bank
11. What kind of digital banking services do you use more often?
a. Obtaining bank statement
b. Fund transfer
c. Account management
d. Bill payment
12. Do you think usage of digital banking services had increased during
covid 19 pandemic?
a. Yes
b. No
13. Do you know about NEO BANK?
a. Yes
b. No
14. Do you think employing digital platform has led to reduction in costs?
a. Yes
b. No
15. What do you think are the challenges in the growth of digital banking
in India?
a. Traditional banking habits
b. Security technical issue
c. Transaction difficulties
d. Small marketing budgets
16. Do you think digitalisation in banking sector result in loss of jobs?
a. Yes
b. No
17. Do you think rural people also use digital banking?
a. Yes
90 | P a g e
 b. No
18. Would you suggest others to use digital banking?
a. Yes
b. No

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THANK YOU!

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