CUSTOMER

SATISFACTION IN BANKING

BACHELOR OF COMMERCE
BANKING & INSURANCE
SEMESTER V
2013 - 2014

SUBMITTED BY
AKHILESH VIJAYAN
ROLL No. 26

SREE NARAYANA GURU COLLEGE OF COMMERCE,

P.L. LOKHANDE MARG, CHEMBUR
MUMBAI - 400089.

CUSTOMER

SATISFACTION IN BANKING

BACHELOR OF COMMERCE
BANKING & INSURANCE
SEMESTER V
2013 - 2014
SUBMITTED
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF DEGREE
OF BACHELOR OF COMMERCE

BANKING & INSURANCE

BY
AKHILESH VIJAYAN
ROLL No. 26

SREE NARAYANA GURU COLLEGE OF COMMERCE

,P.L. LOKHANDE MARG, CHEMBUR
MUMBAI - 400089.

DECLARATION
I, AKHILESH VIJAYAN, student of TY.B.B.I Semester V (2013-14) hereby
declare that I have completed the Project on CUSTOMER SATISFACTION IN
BANKING

The information submitted is true & original to the best of my knowledge.

AKHILESH VIJAYAN
ROLL NO.26

SREE NARAYANA GURU COLLEGE OF COMMERCE,

P.L. LOKHANDE MARG, CHEMBUR

MUMBAI 400089

SREE NARAYANA GURU COLLEGE OF COMMERCE,

P.L. LOKHANDE MARG, CHEMBUR
MUMBAI 400089.

CERTIFICATE

This is to certify that MR. AKHILESH VIJAYAN of TY.B.B.I BANKING AND

INSURANCE Semester V (2013-14) has successfully completed the project on
CUSTOMER SATISFACTION IN BANKING under the guidance of Professor
APARNA UJAONEY.

Course Co-ordinator

Principal

Internal Examiner

External Examiner

College Seal

ACKNOWLEDGEMENT

The present research work cannot see the light of the day unless it is blessed by the begin
assistance of eminent person. The help and co-ordination that I have received from various
quarters of in bringing this work to completion makes me feel deeply indebted. This is not a
work of individual but a number of persons who helped me directly or indirectly in this
journey. So, I wish to express great fullness to all those who have helped & assisted me in
bringing the final shape of this report.

First of all, I wish to express my deep sense of gratitude to our Supervisor Miss.
Aparna.Ujaoney for her guidance and moral support all along the period of my study in the
institute.

I am deeply indebted to my project guide Prof Miss. Aparna.Ujaoney for her kind advice,
encouragement, support & proper guidance. During the course of preparation of this project, I
got tremendous support in mastering fact & figures from her. Really she had been a great
source of information during the period of study.

Last but not the least I wish to express my deep sense of gratitude to all those who were
knowingly or unknowingly with me during the project tenure.

Signature of the student

AKHILESH VIJAYAN

TABLE OF CONTENTS

Sr. no

TITLE
1.

Introduction to Customer Satisfaction

2.

PREFACE

3.

INTRODUCTION TO CUSTOMER SATISFACTION

4.

Executive Summary

5.

OBJECTIVE OF THE PROJECT

6.

Research Methodology

7.

Data Analysis

8.

Findings & Limitations

9.

Conclusion & Suggestion

10.

Bibliography

Page no:

INTRODUCTION OF CUSTOMER SATISFACTION

Customer satisfaction is a powerful tool help to exploit sales potential and maximize the value
of the customer to the bank. It integrates various components of a business such as sales,
marketing, it and accounting. It will add customer loyalty to the business. Relatively new
method in managing customer loyalty, previously used by retail businesses for many years. The
core objective of modern methodology is to help businesses to use technology and human
resources to gain a better view of customer behavior.
The basic services provided by banks are primary functions and secondary functions. Primary
functions include all the basic functions like:

Borrowing - accepting deposits

Lending - providing loans

Investing - investing in securities

And secondary functions include agency and utility functions. some of the facilities are

Automated Teller Machines

Customer Call center

Mail: most banks accept cheque deposits via mail and use mail to communicate to their
customers, e.g. by sending out statements

Mobile banking is a method of using one's mobile phone to conduct banking transactions

Online banking is a term used for performing multiple transactions, payments etc. over the
Internet

Relationship Managers, mostly for private banking or business banking, often visiting
customers at their homes or businesses

Telephone banking is a service which allows its customers to conduct transactions over the
telephone with automated attendant or when requested with telephone operator

Video banking is a term used for performing banking transactions or professional banking
consultations via a remote video and audio connection. Video banking can be performed via
purpose built banking transaction who works for the bank based on a contract. It's main
job is to increase the customer base for the bank.

Bill discounting is also a function of banking

Offshore banking is a facility provided by banks situated outside the country

Locker facilities are also provided by banks

Other utility services are also done by banks

Credit cards are widely used facility of banks

machines (similar to an Automated teller machine), or via a video conference enabled bank
branch clarification

DSA is a Direct Selling Agent.

The usefulness of these services and the types of sevices provided are keenly observed in this
project.

PREFACE

The project has been prepared not only because it involves marks and is the requirement of the
university but I understand the underlying intention of the board which definitely imparts
priceless knowledge and I believe that practical exposure is equally important for every
student. I firmly decided to prepare my project on CUSTOMER SATISFACTION IN
BANKING as I am eager to know the meaning both theoretical as well as practical.

I have chosen this topic because to be honest I love doing projects related to the research. There
is nothing more that excites me than good execution done through an electronic medium and
hence I choose this topic.

I have put my sincere efforts in the project and hope. I have done a decent job to portray that
technology has proven to be a boon to banking. And I also eagerly wanted to know customers
wants and their dissatisfactions

EXECUTIVE SUMMARY

As the title suggests the project is based on the customers satisfaction of the services provided
by banks. The projects aim is to know the problems of the customers and their needs.
The working of the customer's mind is a mystery which is d
i f f i c u l t t o s o l v e a n d understanding the nuances of what customer
satisfaction is, a challenging task. This exercise in the context of the banking industry
will give us an insight into the parameters of customer satisfaction and their
measurement. In the organized segment, banking system occupies an important
place in nations economy. It plays a pivotal role in the e c o n o m i c
development of a country and forms t he core of the money market in
advanced country. The commercial banks in India comprise of both public sector as well as
private sector banks. There are total 28 public sector and 27 private sector
banks are functioning in the country presently. Banks have to deal with many customers
everyday and render various types of services to its customer. it's a well known fact that no
business can exist without customers. Not so long ago, accessing our own money was
about setting aside a couple of hours, getting to the bank before closing time,
standing in one queue to get a token and then in another to collect the cash. Those
were the pre-economic reforms days, when the banking sector of both private and public banks
The banking industry like many other financial service industries is facing a
rapidly changing market, new technologies, economic uncertainties, fierce competition and
more demanding customers and the changing climate has presented an
unprecedented set of challenges . Banking is a customer oriented services industry,
therefore, the customer is the focus and customer service is the differentiating factors .the
banking industry in India has undergone sea change since post independence. More recently,
liberalization, the opening up of the economy in the 90s and the government's
decision to privatize banks by reduction in state ownership culminated in the
banking reforms based on the recommendations of narasimha committee. The
prime mover for banks today is profit, with clear indications from the government to
'perform or perish banks have now started realizing the wants of the customer satisfaction this
is compelling them to improve customer service and build up relationship with customers.

The banking industry in India has undergone sea change since post independence. More
recently, liberalization, the opening up of the economy in the 90s and the
government's decision to privatize banks by reduction in state ownership
culminated in the banking reforms based on the recommendations of Narasimha
Committee. The prime mover for banks today is profit, with clear indications from the
governmentto'performorperish'.B a n k s h a v e a l s o s t a r t e d r e a l i z i n g t h a t b u s i n e s s d e
p e n d s o n c l i e n t s e r v i c e a n d t h e satisfaction of the customer and this is compelling them
to improve customer service and build up relationship with customers. With the current change
in the functional orientation of banks, the purpose of banking is redefined. The main driver of
this change is changing customer needs and expectations. C u s t o m e r s i n u r b a n I n d i a n o
l o n g e r w a n t t o w a i t i n l o n g q u e u e s a n d s p e n d h o u r s i n banking transactions.
This change in customer attitude has gone hand in hand with the development of
ATMs, phone and net banking along with availability of service right at the customer's
doorstep. With the emergence of universal banking, banks aim to provide a l l b a n k i n g
product and service offering under one roof and their endeavor is to be
customer centric. With the emergence of economic reforms in world in general and
in India in particular, private banks have come up in a big way with prime
emphasis on technical and customer focused issues.

OBJECTIVE OF THE STUDY

This study has the following specific objectives that would be significant in order
to come up with a credible set of data that would the bases for analysis and drawing of
the conclusions.

1. To study the customer satisfaction level of different bank firms by assessing and
interviewing customers from different establishments.

2. To pin point and identify strong weak points of Indian banking industry that
would need to be sustained and those that need to be developed or improved.

3. To provide a set of empirical data that can link relationships between customer
level satisfaction and profitability of banking business success.

4. To provide a credible output of research that would be of great and significant

contribution to the field useful for professionals in the academics and in practice.

5. To produce an output that is a useful material for project development, strategic

planning or as reference for other future studies.

The present study seeks to address a number of factors and unexplained occurrences
present in the banking industry in India. The main objective of this research is to study,
analyze and asses the customer satisfaction levels in the Indian banking sector and
develop a conceptual framework of satisfaction from the perspective of the customer,
guided by the basic concepts and principles in marketing and management. This study

also aims to study and evaluate the links between customer satisfaction level and level of
development or progress in the participating banking companies or firms. In order to do
so, the customer satisfaction levels will be assessed using survey that includes parameters
that influence much of the satisfaction of the customers. I this research, the focus is on
the customer facing level, this will be done by viewing and assessing the opinion and perspective
of the customer in relation to satisfaction with different service parameters,

and various services provided by the bank. And analyze customers satisfaction by using
some research methodology like form distributions and utility of the services etc

To analyze the industry especially banking services for the selected banks

To carry out financial and non-financial analysis of banks as a whole

And to know the wants of customers and satisfactions and Services provided and its
quality

The present study seeks to address a number of factors and unexplained occurrences
present in the banking industry in India. The main objective of this research is to study,
analyze and asses the customer satisfaction levels in the Indian banking sector and
develop a conceptual framework of satisfaction from the perspective of the customer,

guided by the basic concepts and principles in marketing and management. This study

also aims to study and evaluate the links between customer satisfaction level and level of
development or progress in the participating banking companies or firms. In order to do
so, the customer satisfaction levels will be assessed using survey that includes parameters
that influence much of the satisfaction of the customers. I this research, the focus is on

the customer facing level, this will be done by viewing and assessing the opinion and perspective
of the customer in relation to satisfaction with different service parameters,
and various services provided by the bank.

RESEARCH METHODOLOGY

Sample and data collection

This survey was condected in the context of banking services 50 percent data were collected
through forms and 50percent through descriptive data
Research design
The research design would be descriptive and cross sectional
Data collection
From primary sources of data collection
Sample size
A primary source of 15 people
Data source
The research has adopted analytical and descriptive for report; it is a combination of both
primary and secondary data. reliance has been kept on the data received from the internet
books and other sources

METHODOLOGY

The research process will be using and employing a number of steps. The
methodology will use both primary and secondary data. The primary data are the results
and the data that will be gathered and taken from the respondents of the study.
Participants and other sub segments of the methodology shall be discussed and
categorized in the following sections.

The study will primarily employ descriptive quantitative methodological approach. This
approach is helpful in quantifying intangible factors and elements such as satisfaction, but
analysis will be guided and done descriptively. The quantitative part will help control and
manage large and bulky information, while the descriptive part will help explain and link
trends that could be observed with the data which cannot be expressed and explained by
numbers. The aims of the methodological approach are to concretize the theoretical model or
approach that has been constructed and illustrated in the earlier part of this research, and be
able to fulfill the requirements set by the study.
THE RESEARCH PROCESS

The whole research study is composed of a number of steps that will ultimately
results into obtaining of data that will be used for analysis and conclusions of the
research. The process includes collection of both primary and secondary data
COLLECTION OF DATA

The data that will be collected from the surveys, interviews and focus group discussions
are the considered to be the primary data, which will be the main basis of predicting trends,
analysis and conclusions of the study.

RESEARCH QUESTIONS

This research study aims to answer the following general and specific questions:

General

What is the customer satisfaction level in the indian banking industry?

What are the best or highly rated bank firms in india in relation and in comparisonwith
their customer satisfaction levels?
Banks with good customer satisfaction agencies?
Growth of value of services in last five years?
Efficiency in private sector banks?
Efficiency in public sector banks?

Specific

What are the specific factors that influence the satisfaction level of the customers
in the banking industry or sectors in India? What are the most important factors or
elements that banking corporations or
firms need to consider?

What are the programs or strategic marketing plans observed, developed and
implemented by successful banking firms in order to attain high customer
satisfaction level, thus, improving market share and increasing profitability?

What are the areas or factors of the Indian banking corporation that need or needs
to be improved?

DATA ANLAYSIS
General
What is the customer satisfaction level in the Indian banking industry ?

Three banks were compared on their service quality and the results were as follows:

6
5

4
3

ICICI

HDFC

SBI

The Responses Stated That The Services Offered And The Quality Of The Services Were
Almost Same And The Satisfaction Level Was Good

 What are the best or highly rated bank firms in India in relation and in
comparison with their customer satisfaction levels?

Series 1
6
5
4
3
Series 1

2
1
0
ICICI

HDFC

SBI

AXIS

BOB CO-OP
BANK

The Result Showes That Privatised Banks Have Good Services Compared To Some
Government Banks.

Banks With Good Customer Satisfaction Agencies?

CUSTOMER SATISFACTION
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
ICICI

HDFC

SBI

AXIS

Growth of value of services in last five years?

7
6
5
YEAR1
4

YEAR2
YEAR3

YEAR4
2

YEAR5

1
0
HDFC

ICICI

SBI

AXIS

it is seen that the banks has increased in the last 5 years and also the efficiency has increased

Efficiency in PUBLIC sector banks?

PUBLIC SECTOR
5

0
SBI

CO-ORP

DENA

CANARA

Efficiency in PRIVATE sector banks?

PRIVATE SECTOR
6
4
2
0
ICICI

HDFC

AXIS

What are the specific factors that influence the satisfaction level of the customers
in the banking industry or sectors in India? What are the most important factors or
elements that banking corporations or
firms need to consider?
ANSWER- As The Survey Was Conducted There Were Different Types Of Answers
Coming Up.People Were Into Every Aspect From After Sales Services To The Financial
Services Offered And Variety In Services

WANTS OF CUSTOMERS

AFTERSALES
VARIETY
CREDIT CARDS
AGENCY

AFTER SALES SERVICES-15

VARIETY OF SEVICES-45
CREDIT CARD SERVICES-20
AGENCY FACILITIES-20

What are the programs or strategic marketing plans observed, developed and
implemented by successful banking firms in order to attain high customer
satisfaction level, thus, improving market share and increasing profitability?
BANKS HAVE STARTED PROVIDING DIFFERENT TYPES OF SERVICES FOR
ATTRACTING CUSTOMERS. LIKE PROVIDING LOANS, EASY EMI
SERVICES,CREDIT CARDS,MOBILE BANKING,INTERNET BANKING ETC

50
45
40
35
30
25
20
15
10
5
0
LOANS

EMI

CREDITS

MOBILE INTERNET

What are the areas or factors of the Indian banking corporation that need or needs
to be improved?

VARIETY

NEEDS

CUSTOMER SATISFACTION

0
CUSTOMER SATISFACTION -55
WANTS OF CUSTOMERS
-30
VARIETY OF SERVICES
-15

10

20

30

40

50

60

TOP TEN CUSTOMER SATISFACTION BANKS

Difference in private banks services and public banks services?

(On the basis of new services offered, variety and usefulness)

Services

private
public

The services provided by private banks are much efficient than public sector

Efficiency Ratios Of Private Sector And Public Sector Banks

efficiency

public
private

Efficiency is more in private sector rather than in public sector when compared

Some Of The Customer Satisfactions Graphs Of Other Banks

satisfaction ratio
6

0
2007

2008

2009

2010

2011

satisfaction
5
4.5
4
3.5
3
2.5

satisfaction

2
1.5
1
0.5
0
2008

2009

2010

2011

Satisfaction
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2008

2009

2010

2011

satisfaction
5
4.5
4
3.5
3
2.5

satisfaction

2
1.5
1
0.5
0
2009

2010

2011

2012

satisfaction
6

satisfaction

0
2007

2008

2009

2010

OBSERVATION.

The analysis carried out at on the banks, states that the banks provide services with a motive of
achieving maximum profit than considering customer satisfaction and providing good services.
The observation after the research is that the customers are in need of new services and they
utilities the services provided but the quality of services provided and services provided to
them is also important so in order to attract customers banks have to make a change in
approach towards customers and also treat them nicely and should be well trained to deal
with the customer on one to one basis

FINDINGS

In this project report there are many facts which say whether a bank is good at executing the
services launched by them and the customers wants

1) the project have found out that some of the banks also provide some after sales services
and this creates a sense of loyalty in customers.

2) In the customer satisfaction analysis here the overall analysis of the banks are compared
together and the want satisfying abilities are judged.

3) In the analysis we found that the banks have increased the services of customer
satisfaction and the services launched were much efficient and cost efficient and the
competition in banking sector has also increased the quality of services.
4) It was found that private sector was much efficient in banking

5) Reasons of Dissatisfaction in Public sector banks

Behavior and attitude of the staff in public sector banks is the first reason
of customer dissatisfaction.

Time taken to process the transaction is the second reason of

c u s t o m e r dissatisfaction.

Many of the services are not provided by the Public sector banks when compared with
the Private sector banks e.g. ATM Banking is not provided by Union Bank of
India.

Internet Banking and Mobile banking is also not provided by many of the Publicsector
banks.

Continuous services are not provided by ATM machines installed by

v a r i o u s Public sector banks.

LIMITATIONS
Customer satisfaction analysis has some limitation involved in it. This limitation can be
explained as under:

Time Constrain:
Customer satisfaction analysis may offer excellent insights, but it can be extraordinarily timeconsuming. Time-consuming models often produce valuations that are contradictory to the
current price prevailing on the exchange.

Company Specific:
The services by different banks are analyzed in this project. This can be quite time-consuming
process, which can limit the amount of research that can be performed. The ratio may be very
important for the cement sector company but these ratios are not very useful for the banking
sector.

Inadequacies of Data:
While making analysis one has to often wrestle with inadequate data. While deliberate
falsification of data may be rare, subtle misrepresentation and concealment are common.

Future Uncertainties:
Future changes are largely unpredictable; more so when the economic and business
environment is buffeted by frequent winds of change. In an environment characterized by
discontinuities, the past record is a poor guide to future performance.

Irrational Market Behavior:

The market itself presents a major obstacle while making analysis on account of neglect or
prejudice, undervaluation may persist for extended periods; likewise, overvaluations arising
from unsatisfied optimism and misplaced enthusiasm may endure for unreasonable lengths of
time.

SUGGESTION

Suggestions there is need of constant innovation in retail banking. Indian banking industry
should aim to formulate strategies incorporating people, processes and technology issues.
Technology implementation should be speeded up. Service culture is to be developed among the
staff.
The analysis carried out at on the banks, states that the banks provide services with a motive of
achieving maximum customer satisfaction and providing good services.
So the efficiency of the bank has to be looked before investing in a bank
RECOMMENDATIONS FOR PUBLIC SECTOR

The staff should be adequately trained to deal with the customer on one to
one basis.

Many public sector banks need to revive their infrastructure to have pace with
thecompeting environment.

Many of the services needs improvement in public

s e c t o r b a n k s e . g . A T M facilities.

Staff should be adequately trained to encourage face to face dealing.

Staff should be friendly and approachable.

Clearly defined customer policy should be adopted by the banks.

Customers needs should be anticipated in advance so that they can be helped outin a
better way.

Treat your customers like your friends and they'll always come back.

Honor your promises.

CONCLUSION

Customer satisfaction analysis holds that the customers play an important part in companies
growth. And then it is seen that the companies have tried to attract its customers through
various new schemes and some have been beneficial. Its strength lies in the fact that the
information analyzed is real as opposed to hunches or assumptions. On the other hand, while
Customer satisfaction analysis deals with tangible facts, it does not tend to ignore the fact that
human beings do not always act rationally. But their needs are always based on the quality and
efficiency of the services provided.

Customer satisfaction analysis is based on the analysis of the economic, industry as well as the
company and in this research we can see that the customers have an effect on the bank growth
and assets.

The above report says that our services is growing after the recession and it is the good time for
the one who want to invest. and according to the analysis there is a considerable rise in the
types of services provided. But according analysis performance in the private industry is good
and expected to grow further in the near future which is a good sign for investment. So the
ultimate conclusion is that wants of the customers are delt properly by banks with good
efficiency.

BIBLIOGRAPHY

Books : INTERNATIONAL BANKING

FINANCIAL MANAGEMENT
C.R KOTHARI :RESEARCH METHODOLOGY

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www.google.com
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www.moneycontrol.com
www.equitymaster.com
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http://www.business-standard.com/india/index2.php
http://economictimes.indiatimes.com/
http://en.wikipedia.org/wiki/Magnetic_ink_character_recognition
http://finance.indiabizclub.com/info/indian_banking_industry
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