TERM PAPER OF QUANTATIVE

Technique

NAME –HARPREET singh

ROLL NO-144
SEC-2504
CLASS-BBA-MBA(Dual int)2thsem

SUBMITTED TO
MisS DILPREET

TOPIC- RESEARCH ON E-BANKING

SYSTEM:-

INTRODUCTION:-
Electronic banking is one of the truly widespread
avatars of E-commerce the world over. Various authors define E-
Banking differently but the most definition depicting the meaning and
features of E-Banking are as follows:
1. Banking is a combination of two, Electronic technology and

Banking.

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

banking Transactions electronically without visiting a brick-and-

mortar institutions.

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

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

Need for E- BANKING :-

One has to approach the branch in person, to
withdraw cash or deposit a cheque or request a statement of
accounts. In true Internet banking, any inquiry or transaction
is processed online without any reference to the branch
(anywhere banking) at any time. Providing Internet banking
is increasingly becoming a "need to have" than a "nice to
have" service. The net banking, thus, now is more of a norm
rather than an exception in many developed countries due to
the fact that it is the cheapest way of providing banking
services
Banks have traditionally been in the forefront
of harnessing technology to improve their products, services
and efficiency. They have, over a long time, been using
electronic and telecommunication networks for delivering a
wide range of value added products and services. The
delivery channels include direct dial – up connections,
private networks, public networks etc
E-BANKING Products:-
1. Automated Teller Machine:-

An automatic teller machine (ATM) is a

computerized telecommunications device that provides a financial
institution's customers a method of financial\ transactions in a public
space without the need for a human clerk or bank teller. On most
modern ATMs, the customer identifies him or herself by inserting a
plastic ATM card with a magnetic stripe or a plastic smartcard with a
chip that contains his or her card number and some security
information, such as an expiration date or CVC (CVV). Security is
provided by the customer entering a personal identification number
(PIN).

2. Tele Banking or Phone Banking:-

Telephone banking is relatively new
Electronic Banking Product. However it is fastly becoming one of
the most popular products. Customer can perform a number of
transactions from the convenience of their own home or office; in
fact from anywhere they have access to phone. Customers can
do following:-
• Check balances and statement information
• Transfer funds from one account to another
• Pay certain bills
 3. Mobile Banking:-

Mobile banking comes in as a part of the banks

initiative to offer multiple channels banking providing convenience
for its customer. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile
phones are playing great role in Indian banking- both directly and
indirectly. They are being used both as banking and other
channels

Evolution E-BANKING:-
The story of technology in banking started with the
use of punched card machines like Accounting Machines or Ledger
Posting Machines. The use of technology, at that time, was limited to
keeping books of the bank. It further developed with the birth of online
real time system and vast improvement in telecommunications during
late 1970’s and 1980’s.it resulted in a revolution in the field of banking
with “convenience banking” as a buzzword. Through Convenience
banking, the bank is carried to the doorstep of the customer.
Intense competition has forced banks to rethink the
way they operated their business. They had to reinvent and improve
their products and services to make them more beneficial and cost
effective. Technology in the form of E-banking has made it possible to
find alternate banking practices at lower costs. More and more
people are using electronic banking products and services because
large section of the banks future customer base will be made up of
computer literate customer, the banks must be able to offer these
customer products and services that allow them to do their banking
by electronic means. If they fail to do this will, simply, not survive.
New products and services are emerging that are set to change the
way we look at money and the monetary system.

Objectives:-
The main objectives of the study are:

• To study the awareness level of service class people

regarding E-Banking.

• To find out the frequency and the factors that influences

the adoption of E-Banking services.

• To measure the satisfaction level of people.

• To understand the problems encountered in by service

class people while using E-Banking services(ATM,
Phone banking, etc)
Impact of E-Banking on traditional
services:-
E-banking transactions are much cheaper than
branch or even phone transactions. This could turn yesterday’s
competitive advantage - a large branch network - into a comparative
disadvantage, allowing e-banks to undercut bricks-and-mortar banks.
This is commonly known as the "beached dinosaur" theory.

E-banks are easy to set up so lots of new entrants will arrive. ‘Old-
world’ systems, cultures and structures will not encumber these new
entrants. Instead, they will be adaptable and responsive. E-banking
gives consumers much more choice. Consumers will be less inclined
to remain loyal.

E-banking will lead to an erosion of the ‘endowment effect’ currently

enjoyed by the major UK banks. Deposits will go elsewhere with the
consequence that these banks will have to fight to regain and retain
their customer base. This will increase their cost of funds, possibly
making their business less viable. Lost revenue may even result in
these banks taking more risks to breach the gap.

Nobody really knows which of these versions will

triumph. This is something that the market will determine. However,
supervisors will need to pay close attention to the impact of e-banks
on the traditional banks, for example by surveillance of:
• strategy
• customer levels
 • earnings and costs
• advertising spending
• margins
• funding costs

Research Methodology:-

Research is defined as human activity based

on intellectual application in the investigation of
matter. The primary purpose for applied research is
discovering, interpreting, and the development of
methods and systems for the advancement of human
knowledge on a wide variety of scientific matters of
our world and the universe

It also helps to understand the

assumptions underlying various techniques and by
which they can decide that certain techniques will be
applicable to certain problems and other will not.
Therefore in order to solve a research problem, it is
necessary to design a research methodology for the
problem as the some may differ from problem to
problem.

Research design:-
 Research design constitutes the blue print for the
collection, measurement and analysis of data. The present study
seeks to identify the extent of preferences of E-Banking over
traditional banking among service class. The research design is
exploratory in nature.. For the selection of the sample, convenient
sampling method was adopted and an attempt has been made to
include all the age groups and gender within the service class.
Sources of data:

Following are the methods of sources of data:

Secondary data:
• Articles on E-Banking taken from journals, magazines
published from time to time.
• Through internet.

Primary data:
Questionnaire was used to collect primary data
from respondents. The questionnaire was structured type and
contained questions relating to different dimensions of e-banking
preferences among service class such as level of usage, factors
influencing the usage of e-banking services, benefits accruing to the
users of e-banking services, problems encountered. An attempt was
also made to elicit reasons for its non-usage. The questions included
in the questionnaire were open-ended, dichotomous and offering
multiple choices.

Sampling technique: The sampling technique used for judgment

Sampling unit: It defines the target population that will be sampled
i.e. it answers who is to be surveyed. In this study, the sampling unit
is the people of jalandhar .

Sampling size: It indicates the numbers of people to be

surveyed. Though large samples give more reliable results
than small samples but due to constraint of time and money,
the sample size was restricted to 50 respondents. The
respondents belong to different income group and profession
Literature Review:-

1. G. Kannabiran and P.C. Narayan discuss in their

article the experiences of a private-sector bank in
deploying Internet banking and eCommerce in India.
Strategic alignment of business and IT strategies,
planning and implementation of e-banking initiatives,
and management of benefits have been captured,
along with key contributions to development

2. Huggins points to the fact that traditional

boundaries in banking are disappearing. Using
eBusiness methods, major retailers and telecom
providers are starting to offer financial services to
their clients. Extending the value chain and offering
versatile services seems to be the key to retaining
competitiveness in the sector. Attitudes are also
shifting from direct transactions to savings and
investments, as the baby boomers reach their fortis
and fifties, and prepare for retirement.

3. Chandana R, Unnithan, Paula M.C., Swatman in

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

3. The Indian Internet Banking Journey In 2001, a

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

Questionnaire:-

Dear Respondent,
We are conducting a research study of
“E-banking Preferences among people in jalandhar ”. We
will appreciate your cooperation in this regard by filling up
the questionnaire carefully. All the information provided by
you will be kept confidential

1. In which banks do you have your account?

a. State Bank of India b. HDFC Bank
c. Punjab National Bank d. ICICI Bank
e. State Bank of Patiala f. Canara Bank
g. Bank of India h. Oriental Bank of
Commerce
i. Any other, Please Specify
i. ---------------------
ii. ---------------------
iii. ---------------------

2. While opening up the account, were you aware of E-banking

services provided by your bank?
a. Fully aware b. Had an idea c. No

3. If answer to question no.2 is c, how did you get to know about E-

banking services of your bank?
 a. Personal visit
b. Executive from the bank
c. Advertisements
d. Friends/ Relatives

4. If answer to question no.2 is a or b, which of the following E-

banking services are you aware of?
e. ATM
f. Debit Card
g. Credit Card
h. Phone banking
i. Mobile banking
j. Internet banking

5. Do you use E-banking services?

a. Yes b. No

6. If answer to question no.5 is yes, how frequently do you use each

of the following services?
Once in
Once in Once in Once in Infrequent
Factors a
a day a week a month ly
fortnight
a ATM
b Debit Card
c Credit Card
d Phone Banking
e Mobile Banking
f Internet Banking

7. Which of the following factors influence you the most to use E-

banking services?

More Less
Factors Strongly than average than Not at all
average Average
a All time availability
b Ease of use
c Nearness
d Security
e Direct access
f Friends/ Relatives
g Status symbol
8. Which of the following benefits accrue to you, while using E-
banking services?
a. Time saving b. Inexpensive
c. Easy processing d. d. Easy fund transfer
e. Any other, please
specify__________________________________________

9. Rate the problems identified while using E-banking services?

Highly
Factors consider Major Average Minor
Ignora
ed ble
a Time consuming
b Insecurity
c ATM out of order
d Amount debited but not
withdrawn
e Problem of change in
mobile number
f Password forgotten
g Card misplaced
h Misuse of card

10. To what extent are you satisfied with your Banks’ E-banking

services?

b. Highly Satisfied ___________

c. Satisfied _________

d. Neutral ___________
 e. Dissatisfied ___________

f. Highly dissatisfied ___________

11. What other services you would like to have through E-banking?
_____________________________________________________

_______

Data analysis ana Data interpretation :-

Table 1.
Awareness of people regarding e-banking service provided by the bank
while opening an account

No. of Respondents Percentage

Fully aware 37 37%
Had an idea 46 46%
No idea 17 17%
Total 100 100%
Figure 1.

Awareness about e-banking services

37%

Fully aware
Had an idea
100%
No idea
46% Total

17%

Interepretation
As seen from Table 1, overall percentage of service class people
having complete knowledge about e-banking services provided by the
bank while opening an account in it is 37%, those having some idea
about it is 46% and the percentage of people having no awareness of
e-banking services provided by the bank is 17%. It can reasonably,
be concluded that nearly 85% of the population is having awareness
about e-banking services

Table 2.

Sources from which the respondents get the knowledge about the e-
banking services
 No. of Respondents Percentage
Personal Visit 15 15%
Executive from Bank 21 21%
Advertisements 34 34%
Friends /Relatives 26 26%
Others 2 2%

Figure 2

Sources of awareness about e-banking

2%
15%

26%
Personal Visit
Executive from Bank
21% Advertisements
Friends /Relatives
Others

34%

Interpretation

Table 2, indicates the percentage distribution of awareness avenues,

the major are in favour of advertisements, which score 34% among

different avenues such as personal visit, executives of the banks,
advertisements and friend/relatives. While the least score is for
personal visit and that of other sources.

Table 3.
Awareness of E-Banking services

No. of Respondents Percentage

ATM 88 26.03%
Debit Card 60 17.75%
Credit Card 50 14.79%
Phone Banking 40 11.83%
Mobile Banking 50 14.79%
Internet Banking 50 14.79%
Total 338 100%
Figure 3

Relative awareness about different e-

banking services

30.00%
20.00%
Series1
10.00%
0.00%
Banking

Banking
Internet
Debit

Credit
Card

Banking

Mobile
Card
ATM

Phone

Interpretation
E-banking constitutes services provided in terms of ATMs, Debit
Card, Credit Card, Phone Banking, Mobile Banking, Internet Banking
etc, of which the first six have been covered. Amongst these ATM
scores the largest used service status (26.03%) as indicated by table
3 figures. Close on the heels is Debit card (17.75%), Credit card
(14.79%), while phone banking lags behind by scoring the least
ie.,11.83%.
Table 4

Users of E-banking services

No. of Respondents Percentage

Users 74 74%
Non Users 26 26%
Total 100 100%

Figure 4

Usage of e-banking

26%
Users
Non Users
74%

Interpretation
Table 4 shows that among those aware (which account for 83 in
number) about 74 persons use e-banking services, which is 74% of
total population studied.

Table 5.
Representation of frequency of usage

Day % Wee % Fort % Mon % Infreq %

Wise k- ni- - -
wise ghtl thly uently
y
ATM 4 36.36 31 55.3 13 37.1 11 25.5 9 13.8
6 4 8 5
Debit 2 18.18 11 19.6 7 20 10 23.2 8 12.3
Card 4 6 1
Credit 1 9.09 5 8.93 6 17.1 6 13.9 18 27.6
Card 4 5 9
Phone 0 0 2 3.57 3 8.57 7 16.2 13 20
Bankin 8
g
Mobile 0 0 4 7.14 4 11.4 2 4.65 9 13.8
Bankin 3 5
g
Interne 4 36.36 3 5.36 2 5.71 7 16.2 8 12.3
t 8 1
Bankin
g
11 100 56 100 35 100 43 100 65 100
Figure 5

Frequency of usage of different e-banking services

70
60 Internet Banking
50 Mobile Banking
40 Phone Banking
30 Credit Card
20 Debit Card
10 ATM
0
Wise thly

Day Week-wise Fortni-ghtly Mon- Infreq-

uently
Interpretation
To find out the level of usage amongst the service class, percentage
has been calculated from the total completely filled in questionnaires
and the incomplete questionnaires were discarded.
The frequency of usage of ATM is highest which is evident from table
5, followed by debit card..

Table 6

Various benefits accruing from E-Banking services to its users

No. of Respondents Percentage
Time Saving 70 42.42%
Inexpensive 21 12.72%
Easy Processing 40 24.24%
Easy Fund Transfer 26 15.75%
Others 8 4.85%
Figure 6

Benefits of e-banking

TIME SAVING

INEXPENSIVE

EASY PROCESSING

EASY FUND
TRANSFER
EMERGENCY SKIN
SAVING
OTHERS

Interpretation
When asked to list various benefits accruing from the usage of e-
banking, time saving received highest percentage score at 42.42%
among different benefits such as time saving (42.42%), inexpensive
(12.72%), easy processing (24.24%), easy fund transfer(15.75%).
Quite interestingly, easy processing feature scored more than the
inexpensiveness of the e-banking services. The other benefits
accruing to the people include ready availability of funds, removal of
middlemen and no rude customer relation executives.

Table 7

Problems identified by the users of E-Banking service

No. of
Factors Percentage
Respondents
a Time consuming 59 14.82%
b Insecurity 45 11.31%
c ATM out of order 62 15.58%
Amount debited
d 39 9.80%
but not withdrawn
Problem of
e change in mobile 42 10.555
number
Password
f 54 14.57%
forgotten
g Card misplaced 50 12.56%
h Card misuse 47 11.81%
Figure 7

Problems identified by the users of E-Banking services

70
60
50
40
30
20
10
0
Time Insecurity ATM out of Amount Problem of Password Card Card
consuming order debited but change in forgotten misplaced misuse
not mobile
withdrawn number

No. of Respondents

Interpretation

Most of the users face the problem of ATM out of order

(15.58%), followed by time consuming (14.82%), password
forgotten (14.57%) and then otherproblems as card
misplaced, card misuse, insecurity, etc

Suggestion :-
Internet banking would drive us into an age
of creative destruction due to non-physical exchange, complete
transparency giving rise to perfectly electronic market place and
customer supremacy. The question to be asked right now is "What
the Indian Banks should do" Whatever is the strategy chosen and
options adopted, certain key parameters would determine the bank's
success on web:

For long-term success, a bank may follow:

 Adopting a webs mindset
 Catching on the first mover's advantage
 Recognizing the core competencies
 Ability to deal multiplicity with simplicity
 Senior Management initiative to transform the
organization from inward to outward looking

CONCLUSION:-
The usage of E-banking is all set to increase
among the service class. The service class at the moment is not
using the services thoroughly due to various hurdling factors like
insecurity and fear of hidden costs etc. So banks should come
forward with measures to reduce the apprehensions of their
customers through awareness campaigns and more meaningful
advertisements to make E-banking popular among all the age and
income groups. Further, with increasing consumer demands, banks
have to constantly think of innovative customized services to remain
competitive. E-Banking is an innovative tool that is fast becoming a
necessity. It is a successful strategic weapon for banks to remain
profitable in a volatile and competitive marketplace of today.

In future, the availability of technology to ensure safety and privacy of

e-transactions and the RBI guidelines on various aspects of internet
banking will definitely help in rapid growth of internet banking in India.
BIBLIOGRAPHY:-
WEBSITES

• www.banknetindia.com

• www.bharatbook.com

• www.hdfcbank.com