INTRO

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1.1 CUSTOMER PERCEPTION
In todays globalising economy competition is getting more and more fierce. That means it
becomes more difficult for products and services to differentiate themselves from other offerings
than ever before. Not only is the number of competitive offerings rising due to globalisation of
production, sourcing, logistics and access to information. Many products and services face new
competition from substitutes and from completely new offerings or bundles from industry
outsiders. Since product differences are closed at an increasing speed and many companies try to
win the battle for customers by price reductions, products and services tend to become
commodities.
On the other hand, customer behaviour becomes more hybrid. On one hand, customers are
increasingly price sensitive searching for bargains at marketplaces like ebay or buying their
groceries at discount markets. On the other hand they enjoy branded and luxury goods. One and
the same person may plan a weekend trip with a no-frills airline and a stay at a five-star-hotel.
In the result, customers have a wider choice of often less distinguishable products and they are
much better informed. For many offerings the balance of power shifts towards the customer.
Customers are widely aware of their greater power, which raises their expectations on how
companies should care for them.
Bringing it all together, it becomes ever more difficult to differentiate a product or service by
traditional categories like price, quality, functionality etc.
In this situation the development of a strong relationship between customers and a company
could likely prove to be a significant opportunity for competitive advantage. This relationship is
not longer based on features like price and quality alone. Today it is more the perceived
experience a customer makes in his various interactions with a company (e.g. how fast, easy,
efficient and reliable the process is) that can make or break the relationship. Problems during a
single transaction can damage a so far favorable customer attitude.
The consequence for companies is that they have to adapt their ways of competing for customers.
Traditionally, companies have focused their efforts of customer relationship management on
issues like customer satisfaction and targeted marketing activities like event marketing, direct
marketing or advertising. Although doubtless necessary and beneficial, these activities are not
longer enough. They narrow the relationship between company and customer down to a
particular set of contacts in which the company invests its efforts. Most likely this will produce

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not more than a satisfied customer who is well aware of the companies offerings and has a
positive attitude towards them. However, a satisfied customer is not necessarily a loyal one.
If a customer is satisfied that means that a product of service has met his expectations and that he
was not dissatisfied by it. Customer satisfaction is doubtlessly very important. It is the
precondition for repeat purchases and it prevents the customer from telling others about his
disappointing experiences. A loyal customer, however, is more than a customer who frequently
purchases from a company.
The difference is the emotional bond which links the customer so closely to the company that he
develops a clear preference for these products or brands and is even willing to recommend them
to others. Loyal customers truly prefer a product, brand or company over competitive offerings.
Thus loyalty goes beyond a rational decision for known quality or superior price-performance-
ratio. It is about the customers feelings and perceptions about the brand or product.
When the customer makes his buying decision, he evaluates the benefits he perceives from a
particular product and compares them with the costs. The value a customer perceives when
buying and using a product or service go beyond usability. There is a set of emotional values as
well, such as social status, exclusivity, friendliness and responsiveness or the degree to which
personal expectations and preferences are met. Similarly, the costs perceived by the customer,
normally comprise more than the actual price. They also include costs of usage, the lost
opportunity to use another offering, potential switching costs etc. Hence, the customer
establishes an equation between perceived benefits and perceived costs of one product and
compares this to similar equations of other products.
Based on this, customer loyalty can be understood as to how customers feel about a product,
service or brand and whether their perceived total investments with a it live up to their
expectations.
The important point here is the involvement of feelings, emotions and perceptions. In todays
competitive marketplace, these perceptions are becoming much more important for gaining
sustainable competitive advantage.
Customer perceptions are influenced by a variety of factors. Besides the actual outcome i.e. did
the product or service deliver the expected function and did it fulfil the customers need the
whole process of consumption and all interactions involved are of crucial importance. In todays
globalised information driven economy this can also comprise issues like

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 How other customers or influencing groups perceive the product or brand
The degree to which the customer feels the actual marketing campaign
addresses the most important issues
Responsiveness and service quality of any affiliates, e.g. distribution partner
Customer perceptions are dynamic. First of all, with the developing relationship between
customer and company, his perceptions of the company and its products or services will change.
The more experience the customer accumulates, the more his perceptions will shift from fact-
based judgements to a more general meaning the whole relationship gains for him. Over time, he
puts a stronger focus on the consequence of the product or service consumption.
Moreover, if the customers circumstances change, their needs and preferences often change too.
In the external environment, the offerings of competitors, with which a customer compares a
product or service will change, thus altering his perception of the best offer around. Another
point is that the public opinion towards certain issues can change. This effect can reach from
fashion trends to the public expectation of good corporate citizenship. Shells intention to dump
its Brent Spar platform into the ocean significantly altered many customers perception of which
company was worth buying fuel from.
Research has been don on the impact of market share on the perceived quality of a
product.Depending on the nature of the product and the customers preferences, increasing
market share can have positive or negative effects on how the customer perceives the product.

1.1.1 POSITIVE EFFECTS OF INCREASING MARKET SHARE ON

CUSTOMER PERCEPTION
Increasing market share can send out positive signals by acting as an indicator of superior quality
that is recognised by more and more other customers. This effect is particularly strong for
premium priced products. Customers normally assume that a product must be of exceptional
quality if it can gain such an unexpected market success despite its high price.
Many brands offer positive emotional benefits of using a product that is popular in the markets.
The value of a product or service can rise through increasing number of users of the same
product, e.g. number of members of an online community, better availability of software for
popular computer systems.

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 1.1.2 NEGATIVE EFFECTS OF INCREASING MARKET SHARE ON
CUSTOMER PERCEPTION
For premium and luxury products, customers may translate an increasing market share into a
loss of exclusivity and thus perceive it as less valuable.
The quality of services may suffer if they are consumed by increasing numbers of users.
Diseconomies of scales and congestions can be observed with busy airports and many other
services so that customers may look out for other providers that promise more timely service
and convenience.
The concept of customer perception does not only relate to individual customers in consumer
markets. It is also valid in business to business situations. For example, a competitor
benchmarking survey of a large industrial supplier revealed that the market leader, although
recognised for excellent quality and service and known to be highly innovative, was perceived as
arrogant in some regions. If we take into consideration that there are about four other large
players with a similar level of quality and innovative ideas, this perceived arrogance could
develop into a serious problem. Customers here are well aware the main characteristics of all the
offerings available at the market are largely comparable. So they might use the development of a
new product generation of their own to switch to a supplier that can serve them not better or
worse, but with more responsiveness and understanding.

1.2 INTRODUCTION TO BANK

A banker or bank is a financial institution whose primary activity is to act as a payment agent
for customers and to borrow and lend money. It is an institution for receiving, keeping, and
lending money.
What is online banking?
Online banking (or Internet banking) allows customers to conduct financial transactions on a
secure website operated by their retail or virtual bank, credit union.
Need for internet 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"

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service. The net banking, thus, now is more of a norm rather than an exception in many
developed countries due to the fact that it is the cheapest way of providing banking services
Banks have traditionally been in the forefront of harnessing technology to improve their
products, services and efficiency. They have, over a long time, been using electronic and
telecommunication networks for delivering a wide range of value added products and services.
The delivery channels include direct dial up connections, private networks, public networks etc
and the devices include telephone, Personal Computers including the Automated Teller
Machines, etc. With the popularity of PCs, easy access to Internet and World Wide Web
(WWW), Internet is increasingly used by banks as a channel for receiving instructions and
delivering their products and services to their customers. This form of banking is generally
referred to as Internet Banking, although the range of products and services offered by different
banks vary widely both in their content and sophistication.
Indias banking sector is growing at a fast pace. India has become one of the most preferred
banking destinations in the world. The reasons are numerous: the economy is growing at a rate of
8%, Bank credit is growing at 30% per annum and there is an ever-expanding middle class of
between 250 and 300 million people (larger than the population of the US) in need of financial
services. All this enables double-digit returns on most asset classes which is not so in a majority
of other countries. Foreign banks in India achieving a return on assets (ROA) of 3%, their keen
interest in expanding their businesses is understandable even more so when compared with the
measly 1% average ROA for the Top 1000 banks in the world.
From the perspective of banking products and services being offered through Internet, Internet
banking is nothing more than traditional banking services delivered through an electronic
communication backbone, viz, Internet. But, in the process it has thrown open issues which have
ramifications beyond what a new delivery channel would normally envisage and, hence, has
compelled regulators world over to take note of this emerging channel. Some of the distinctive
features of i-banking are:
1. It removes the traditional geographical barriers as it could reach out to customers of different
countries / legal jurisdiction. This has raised the question of jurisdiction of law / supervisory
system to which such transactions should be subjected,
2. It has added a new dimension to different kinds of risks traditionally associated with banking,
heightening some of them and throwing new risk control challenges,

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3. Security of banking transactions, validity of electronic contract, customers privacy, etc.,
which have all along been concerns of both bankers and supervisors have assumed different
dimensions given that Internet is a public domain, not subject to control by any single authority
or group of users,
4. It poses a strategic risk of loss of business to those banks who do not respond in time, to this
new technology, being the efficient and cost effective delivery mechanism of banking services,
5. A new form of competition has emerged both from the existing players and new players of the
market who are not strictly banks.

Why this research

An analysis of the differences in risk perceptions between bank customers using Internet
Banking and those not using Internet Banking was done and it showed that risk perceptions in
terms of financial, psychological and safety risks among customer not using the internet was
more meaningful than those using internet banking. Customers not preferring to use internet
banking thought that they would be swindled when using this service, and therefore, are
particularly careful about high risk expectation during money transfers from and between
accounts. Only 37% of Indian Internet users come from Top 10 cities i.e. Mumbai, Bangalore,
Delhi, Calcutta, Chennai, Pune, Hyderabad, Ahmedabad, Surat and Nagpur. Another day and
another number. As per IAMAI and I-cube, the number of active Internet user (i.e. ones who
logon to Internet atleast once a month) is now 32 million and numbers who have used Internet
atleast once stands at 46 million. Maximum of the person who are going on for internet banking
lies in the age bracket of 26-35. but the rise in the age the level of users become low.
Approximately 17% of female use internet banking. This a matter of concern for a banks what
are the causes why this is happening.
Although many major banks have started offering i-banking services, the slow pace will continue
until the critical mass is achieved for PC, internet connections and telephones. However, the
upsurge of IT professionals with growing demands is pressuring the government and
bureaucracy in the country to support and develop new initiatives for a faster spread of e-
banking. But then to there is a fear in mind of customer using internet as a medium for the
banking transaction.

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

An analysis of the differences in risk perceptions between bank customers using Internet
Banking and those not using Internet Banking was done and it showed that risk perceptions in
terms of financial, psychological and safety risks among customer not using the internet was
more meaningful than those using internet banking. Customers not preferring to use internet
banking thought that they would be swindled when using this service, and therefore, are
particularly careful about high risk expectation during money transfers from and between
accounts. Only 37% of Indian Internet users come from Top 10 cities i.e. Mumbai, Bangalore,
Delhi, Calcutta, Chennai, Pune, Hyderabad, Ahmedabad, Surat and Nagpur. Another day and
another number. As per IAMAI and I-cube, the number of active Internet user (i.e. ones who
logon to Internet atleast once a month) is now 32 million and numbers who have used Internet
atleast once stands at 46 million. Maximum of the person who are going on for internet banking
lies in the age bracket of 26-35. but the rise in the age the level of users become low.

Approximately 17% of female use internet banking. This matter of concern for banks what are
the causes why this is happening.

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

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1. 3 INTRODUCTION TO E-BANKING
The world is changing at a staggering rate and technology is considered to be the key driver for
these changes around us. An analysis of technology and its uses show that it has permeated in
almost every aspect of our life. Many activities are handled electronically due to the acceptance
of information technology at home as well as at workplace. Slowly but steadily, the Indian
customer is moving towards the internet banking. The ATM and the Net transactions are
becoming popular. But the customer is clear on one thing that he wants net-banking to be simple
and the banking sector is matching its steps to the march of technology. E-banking or Online
banking is a generic term for the delivery of banking services and products through the electronic
channels such as the telephone, the internet, the cell phone etc. The concept and scope of e-
banking is still evolving. It facilitates an effective payment and accounting system thereby
enhancing the speed of delivery of banking services considerably.
Several initiatives have been taken by the Government of India as well as the RBI (Reserve Bank
of India); have facilitated the development of e-banking in India. The government of India
enacted the IT Act, 2000, which provides legal recognition to electronic transactions and other
means of electronic commerce. The RBI has been preparing to upgrade itself as regulator and
supervisor of the technologically dominated financial system. It issued guidelines on the risks
and controls in computer and telecommunication systems to all banks, advising them to evaluate
the risks inherent in the systems and put in place adequate control mechanisms to address these
risks.
1.3.1 WHAT IS E-BANKING?
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.

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1.3.2 BANK INFORMATION TECHNOLOGY 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 and the devices include
telephone, Personal Computers including the Automated Teller Machines, etc. With the
popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is increasingly
used by banks as a channel for receiving instructions and delivering their products and services
to their customers. This form of banking is generally referred to as Internet Banking, although
the range of products and services offered by different banks vary widely both in their content
and sophistication.

1.3.3 HISTORY OF E- BANKING

The precursor for the modern home online banking services were the distance banking services
over electronic media from the early '80s. The term online became popular in the late '80s and
refers to the use of a terminal, keyboard and TV (or monitor) to access the banking system using
a phone line. Home banking can also refer to the use of a numeric keypad to send tones down a
phone line with instructions to the bank. Online services started in New York in 1981 when four
of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover)
offered home banking services using the videotex system. Because of the commercial failure of
videotex these banking services never became popular except in France where the use of
videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system
was used. The UKs first home online banking services were set up by the Nottingham Building
Society (NBS) in 1983 ("History of the Nottingham" Retrieved on 2007-12-14.). The system
used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or

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keyboard (Tandata Td1400) connected to the telephone system and television set. The system
(known as 'Homelink') allowed on-line viewing of statements, bank transfers and bill payments.
In order to make bank transfers and bill payments, a written instruction giving details of the
intended recipient had to be sent to the NBS who set the details up on the Homelink system.
Typical recipients were gas, electricity and telephone companies and accounts with other banks.
Details of payments to be made were input into the NBS system by the account holder via
Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment
was sent to the account holder. BACS was later used to transfer the payment directly. Stanford
Federal Credit Union was the first financial institution to offer online internet banking services to
all of its members in Oct, 1994. EVOLUTION OF E-BANKING The story of technology in
banking started with the use of punched card machines like Accounting Machines or Ledger
Posting Machines. The use of technology, at that time, was limited to keeping books of the bank.
It further developed with the birth of online real time system and vast improvement in
telecommunications during late 1970s and 1980s.it resulted in a revolution in the field of
banking with convenience banking as a buzzword. Through Convenience banking, the bank is
carried to the doorstep of the customer.
The 1990s saw the birth of distributed computing technologies and Relational Data Base
Management System. The banking industry was simply waiting for these technologies. Now with
distribution technologies, one could configure dedicated machines called front-end machines for
customer service and risk control while communication in the batch mode without hampering the
response time on the frontend machine. Traditional banking Gunpowder Personalized services,
time consuming, limited access Virtual or E-banking Nuclear charged Real time transactions,
integrated platform, all time access
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

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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.

1.3.4 USAGE OF E-BANKING

The rise in the e-commerce and the use of internet in its facilitation along with the enhanced
online security of transactions and sensitive information has been the core reason for the
penetration of online banking in everyday life. According to the latest official figures from the
office of National Statistics ( ONS 2007) indicate that subscriptions to the internet has grown
more than 50% from 25 million in 2005 to 45 million in 2007 in India. It has also been estimated
that 60% of the population in India use internet in their daily lives. The fundamental shift
towards the involvement of the customer in the financial service provision with the help of the
technology especially internet has helped to reduce the costs of financial institutions as well as
helped client to use the service at anytime and from virtually anywhere with access to an internet
connection. The use of electronic banking has removed personnel that facilitate the transactions
and has placed additional responsibilities on the customers to transact with the service. The
computerization of the banking operations has made maximum impact on:1) Internal Accounting
System 2) Customer service 3) Diversification of system

1.3.5 INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our traditional
method of banking and is reluctant to use online banking. But here are few cases where Internet
banking will turn out to be a better option in terms of saving your money.
'Stop payment' done through Internet banking will not cost any extra fees but when done through
the branch, the bank may charge you Rs 50 per cheque plus the service tax. Through Internet
banking, you can check your transactions at any time of the day, and as many times as you want
to. On the other hand, in a traditional method, you get quarterly statements from the bank and if
you request for a statement at your required time, it may turn out to be an expensive affair. The
branch may charge you Rs 25 per page, which includes only 30 transactions. Moreover, the bank
branch would take eight days to deliver it at your doorstep. If the fund transfer has to be made
outstation, where the bank does not have a branch, the bank would demand outstation charges.
Whereas with the help of online banking, it will be absolutely free for you. As per the Internet

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and Mobile Association of India's report on online banking 2006, "There are many advantages of
online banking. It is convenient, it isn't bound by operational timings, there are no geographical
barriers and the services can be offered at a miniscule cost."

1.3.6 IMPACT OF E-BANKING ON TRADITIONAL SERVICES

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

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consumers another service (just as ATMs did). Like ATMs, e-banking will impact on the nature
of branches but will not remove their value. Experience in Scandinavia (arguably the most
advanced e-banking area in the world) appears to confirm that the future is clicks and mortar
banking. Customers want full service banking via a number of delivery channels. The future is
therefore Martini Banking (any time, any place, anywhere, any how).
Traditional banks are starting to fight back. The start-up costs of an e-bank are high. Establishing
a trusted brand is very costly as it requires significant advertising expenditure in addition to the
purchase of expensive technology (as security and privacy are key to gaining customer
approval). E-banks have already found that retail banking only becomes profitable once a large
critical mass is achieved. Consequently many e-banks are limiting themselves to providing a
tailored service to the better off. Nobody really knows which of these versions will triumph. This
is something that the market will determine. However, supervisors will need to pay close
attention to the impact of e-banks on the traditional banks, for example by surveillance of
strategy customer levels earnings and costs advertising spending margins funding costs Merger
opportunities and threats, both in the UK and abroad.

1.3.7 E-BANKING PRODUCTS

Automated Teller Machine (ATM): These are cash dispensing machine, which are frequently
seen at banks and other locations such as shopping centers and building societies. Their main
purpose is to allow customer to draw cash at any time and to provide banking services where it
would not have been viable to open another branch e.g. on university campus. An automated
teller machine or automatic teller machine (ATM) is a computerized telecommunications device
that provides a financial institution's customers a method of financial\ transactions in a public
space without the need for a human clerk or bank teller. On most modern ATMs, the customer
identifies him or herself by inserting a plastic ATM card with a magnetic stripe or a plastic
smartcard with a chip that contains his or her card number and some security information, such
as an expiration date or CVC (CVV). Security is provided by the customer entering a personal
identification number (PIN). Using an ATM, customers can access their bank accounts in order to
make cash withdrawals (or credit card cash advances) and check their account balances. Many
ATMs also allow people to deposit cash or checks, transfer money between their bank accounts,
pay bills, or purchase goods and services. Some of the advantages of ATM to customers are

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ability to draw cash after normal banking hours Quicker than normal cashier service Complete
security as only the card holder knows the PIN Does not just operate as a medium of obtaining
cash. Customer can sometimes use the services of other bank ATMs.
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 Order statements or cheque books Demand draft request
This facility is available with the help of Voice Response System (VRS). This system basically,
accepts only TONE dialed input. Like the ATM customer has to follow particular process,
initially account number and telephone PIN are fed for the process to start. Also the VRS system
provides the users within additional facilities such as changing existing password with the new
desired, information about new products, current interest rates etc.
Mobile Banking: Mobile banking comes in as a part of the banks initiative to offer multiple
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.
Internet Banking: The advent of the Internet and the popularity of personal computers presented
both an opportunity and a challenge for the banking industry. For years, financial institutions
have used powerful computer networks to automate million of daily transactions; today, often the
only paper record is the customers receipt at the point of sale. Now that their customers are
connected to the Internet via personal computers, banks envision similar advantages by adopting
those same internal electronic processes to home use. Banks view online banking as a powerful
value added tool to attract and retain new customers while helping to eliminate costly paper
handling and teller interactions in an increasingly competitive banking environment. In India
first one to move into this area was ICICI Bank. They started web based banking as early as
august 1997.

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1.3.8 TYPES OF INTERNET BANKING OR E-BANKING
Understanding the various types of Internet banking will help examiners assess the risks
involved. Currently, the following three basic kinds of Internet banking are being employed in
the marketplace.
Informational- this is the basic level of Internet banking. Typically, the bank has marketing
information about the banks products and services on a standalone server. The risk is relatively
low, as informational systems typically have no path between the server and the banks internal
network. This level of Internet banking can be provided by the banks or outsourced. While the
risk to a bank is relatively low, the server or web site may be vulnerable to alteration.
Appropriate controls therefore must be in place to prevent unauthorized alterations to the banks
server or web site.
Communicative- this type of Internet banking systems and the customer. The interaction
between the banks system and the customer. The interaction may be limited to electronic mail,
account enquiry, loan applications, or static file updates (name and address change). Because
these servers may have a path to the banks internal networks, the risk is higher with this
configuration than with informational systems. Appropriate controls need to be in the place to
prevent, monitor, and alert management of any unauthorized attempt to access the banks internal
networks and computer systems. Virus controls also become much more critical in this
environment.
Transactional- this level of Internet banking allows customers to execute transactions. Since a
path typically exists between the server and the bank or outsourcers internal network, this is the
highest risk architecture and must have the strongest controls. Customer transactions can include
accessing accounts, paying bills, transferring funds etc.

1.3.9 FEATURES OF E-BANKING

Transactional: (e.g. performing a financial transaction such as an account to account transfer,
paying a bill or applications like applying for a loan, new account, etc.) Electronic Bill
Presentment and Payment (EBPP) Funds transfer between customers own checking and savings
accounts, or to another customers account. Investment purchase or sale. Loan application and
transactions such as repayments.

16
Non-transactional: (e.g. online statements, Check links, Chat, Co-browsing etc.) Financial
Institution Administration- features allowing financial institutions to manage the online
experience of their end users. ASP/ Hosting Administration features allowing the hosting
company to administer the solution across financial institution.

1.3.10 ADVANTAGES OF E-BANKING

Convenience- Unlike your corner bank, online banking sites never close; theyre available 24
hours a day, seven days a week, and theyre only a mouse click away. With pressures on time and
longer travelling periods, more and more people find it tiresome waiting in queues. People want
flexibility, and Internet banking offers just that.
Ubiquity- If youre out of state or even out of the country when a money problem arises, you
can log on instantly to your online bank and take care of business, 24\7.
Transaction speed- Online bank sites generally execute and confirm transactions at or quicker
than ATM processing speeds.
Efficiency-You can access and manage all of your bank accounts, including IRAs, CDs, even
securities, from one secure site.
Effectiveness- Many online banking sites now offer sophisticated tools, including account
aggregation, stock quotes, rate alert and portfolio managing program to help you manage all of
your assets more effectively. Most are also compatible with money managing programs such as
quicken and Microsoft money.
Cheaper alternative: - With increasing competition, it seems to be the cost factor that is driving
banks to offer the facility. The Internet is still a very cheap alternative to opening a physical
branch, and most of the push seems to be coming from the supply side. The costs of a banking
service through the Internet form a fraction of costs through conventional methods.
From snob value to necessity:- A couple of years ago, there was a belief even among bankers
that customers opening new accounts wanted the online banking facility, just to "feel good" and
very few of them actually used the services. Today, bankers believe that the trend from `nice to
have' is changing to `need to have'. The "snob value" of banking with an organisation that could
offer service on the Internet has given way to a genuine necessity, he feels. "It all depends on
how busy a person is."

17
1.3.11 DISADVANTAGES OF INTERNET BANKING
Start-up may take time-In order to register for your banks online program, you will probably
have to provide ID and sign a form at a bank branch. If you and your spouse wish to view and
manage their assets together online, one of you may have to sign a durable power of attorney
before the bank will display all of your holdings together.
Learning curves- Banking sites can be difficult to navigate at first. Plan to invest some time
and\or read the tutorials in order to become comfortable in your virtual lobby.
Bank site changes- Even the largest banks periodically upgrade their online programs, adding
new features in unfamiliar places. In some cases, you may have to re-enter account information.

1.3.12 HOW E-BANKING CAN EASE YOUR LIFE

Indian banks are trying to make your life easier. Not just bill payment, you can make
investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources from ICICI
Bank tell us, "Our Internet banking base has been growing at an exponential pace over the last
few years. Currently around 78 per cent of the bank's customer base is registered for Internet
banking." To get started, all you need is a computer with a modem or other dial-up device, a
checking account with a bank that offers online service and the patience to complete about a one-
page application-which can usually be done online. You can avail the following services.
1. Bill payment service: Each bank has tie-ups with various utility companies, service providers
and insurance companies, across the country. It facilitates the payment of electricity and
telephone bills, mobile phone, credit card and insurance premium bills. To pay bills, a simple
one-time registration for each biller is to be completed. Standing instructions can be set, online to
pay recurring bills, automatically. One-time standing instruction will ensure that bill payments do
not get delayed due to lack of time. Most interestingly, the bank does not charge customers for
online bill payment.
2. Fund transfer: Any amount can be transferred from one account to another of the same or
any another bank. Customers can send money anywhere in India. Payees account number, his
bank and the branch is needed to be mentioned after logging in the account. The transfer will
take place in a day or so, whereas in a traditional method, it takes about three working days.
ICICI Bank says that online bill payment service and fund transfer facility have been their most
popular online services.

18
3. Credit Card Customers: Credit card users have a lot in store. With Internet banking,
customers can not only pay their credit card bills online but also get a loan on their cards. Not
just this, they can also apply for an additional card, request a credit line increase and God forbid
if you lose your credit card, you can report lost card online.
4. Railway pass: This is something that would interest all the aam janta. Indian Railways has
tied up with ICICI bank and you can now make your railway pass for local trains online. The
pass will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane,
Nasik, Surat and Pune. The bank would just charge Rs 10 + 12.24 percent of service tax.
5. Investing through Internet banking: Opening a fixed deposit account cannot get easier than
this. An FD can be opened online through funds transfer. Online banking can also be a great
friend for lazy investors. Now investors with interlinked demat account and bank account can
easily trade in the stock market and the amount will be automatically debited from their
respective bank accounts and the shares will be credited in their demat account. Moreover, some
banks even give the facility to purchase mutual funds directly from the online banking system.
So it removes the worry about filling those big forms for mutual funds, they will now be just a
few clicks away. Nowadays, most leading banks offer both online banking and demat account.
However if the customer have there demat account with independent share brokers, then need to
sign a special form, which will link your two accounts.
6. Recharging your prepaid phone: Now there is no need to rush to the vendor to recharge the
prepaid phone, every time the talk time runs out. Just top-up the prepaid mobile cards by logging
in to Internet banking. By just selecting the operator's name, entering the mobile number and the
amount for recharge, the phone is again back in action within few minutes.
7. Shopping at your fingertips: Leading banks have tie ups with various shopping websites.
With a range of all kind of products, one can shop online and the payment is also made
conveniently through the account. One can also buy railway and air tickets through Internet
banking.

1.3.13 INTERNET BANKING IN INDIA

The Reserve Bank of India constituted a working group on Internet Banking. The group divided
the internet banking products in India into 3 types based on the levels of access granted. They
are:

19
 Information Only System: General purpose information like interest rates, branch location,
bank products and their features, loan and deposit calculations are provided in the banks website.
There exist facilities for downloading various types of application forms. The communication is
normally done through e-mail. There is no interaction between the customer and bank's
application system. No identification of the customer is done. In this system, there is no
possibility of any unauthorized person getting into production systems of the bank through
internet.
Electronic Information Transfer System: The system provides customerspecific information
in the form of account balances, transaction details, and statement of accounts. The information
is still largely of the 'read only' format. Identification and authentication of the customer is
through password. The information is fetched from the bank's application system either in batch
mode or off-line. The application systems cannot directly access through the internet.
Fully Electronic Transactional System: This system allows bi-directional capabilities.
Transactions can be submitted by the customer for online update. This system requires high
degree of security and control. In this environment, web server and application systems are
linked over secure infrastructure. It comprises technology covering computerization, networking
and security, inter-bank payment gateway and legal infrastructure.
It includes the followings:
Atm
Debit cards
Smart cards
Mobile banking

1.3.14 THE INDIAN SCENARIO

Drivers of Change: Advantages previously held by large financial institutions have shrunk
considerably. The Internet has levelled the playing field and afforded open access to customers in
the global marketplace. Internet banking is a costeffective delivery channel for financial
institutions. Consumers are embracing the many benefits of Internet banking. Access to one's
accounts at anytime and from any location via the World Wide Web is a convenience unknown a
short time ago. Thus, a bank's Internet presence transforms from 'brouchreware' status to 'Internet
banking' status once the bank goes through a technology integration effort to enable the customer

20
to access information about his or her specific account relationship. The six primary drivers of
Internet banking includes, in order of primacy are: Improve customer access Facilitate the
offering of more services Increase customer loyalty Attract new customers Provide services
offered by competitors Reduce customer attrition

Indian Banks on Web: The banking industry in India is facing unprecedented competition from
nontraditional banking institutions, which now offer banking and financial services over the
Internet. The deregulation of the banking industry coupled with the emergence of new
technologies, are enabling new competitors to enter the financial services market quickly and
efficiently. Indian banks are going for the retail banking in a big way. However, much is still to
be achieved. This study that was conducted by students of IIML shows some interesting facts:
Throughout the country, the Internet Banking is in the nascent stage of development (more than
50 banks are offering varied kind of Internet banking services).
In general, these Internet sites offer only the most basic services. 55% are so called 'entry level'
sites, offering little more than company information and basic marketing materials. Only 8%
offer 'advanced transactions' such as online funds transfer, transactions & cash management
services.
Foreign & Private banks are much advanced in terms of the number of sites & their level of
development.

1.3.15 EMERGING CHALLENGES

Information technology analyst firm, the Meta Group, recently reported "financial institutions
who don't offer home banking by the year 2000 will become marginalized." By the year of 2002,
a large sophisticated and highly competitive Internet Banking Market will develop which will be
driven by demand side pressure due to increasing access to low cost electronic services.
Emergence of open standards for banking functionality. Growing customer awareness and need
of transparency. Global players in the fray Close integration of bank services with web based E-
commerce or even disintermediation of services through direct electronic payments (E- Cash).
More convenient international transactions due to the fact that the Internet along with general
deregulation trends eliminates geographic boundaries.

21
 Move from one stop shopping to 'Banking Portfolio' i.e. unbundled product purchases.
Certainly some existing brick and mortar banks will go out of business. But that's because they
fail to respond to the challenge of the Internet. The Internet and its underlying technologies will
change and transform not just banking, but also all aspects of finance and commerce. It
represents much more than a new distribution opportunity. It will enable nimble players to
leverage their brick and mortar presence to improve customer satisfaction and gain share. It will
force lethargic players who are struck with legacy cost basis, out of business-since they are
unable to bring to play in the new context.

1.3.16 E-BANKING WORLD WIDE

Since its inception, Internet banking has experienced strong and sustained growth. World Bank
report on leapfrogging in e-finance pointed out that the three countries with impressive progress
in information technology in this sense are Estonia, Republic of Korea and Brazil. Creation of
the worlds leading electronic banking systems has been done at a remarkably low cost compared
to other world-class internet banks. In the European Union, 60 million people, representing 18
per cent of the adult population, use online banking In France, the number of online banking
accounts is recording an annual growth rate of 75 per cent. However, Estonia is a country that
has become a leader in Internet banking (which now reaches 18 per cent of the population), not
only among Eastern European countries but in world rankings, through a combination of easy to-
use software, free-of-charge transactions and behavior changes resulting from the influence of
the Nordic countries IT culture on Estonia. A sector in which Latin America is seems to be
performing better than in other industries is online retail banking. Growth in this area has been
driven by traditional banks, which have used the online channel to generate customer loyalty and
improve their operating margins. Two Brazilian banks, Bradesco and Banco do Brasil; have thus
achieved more than 4 million online customers each. Mexico is another leader of Internet
banking in Latin America. It adopted legislation providing for the development of both E-
Commerce and e-finance. In Mexico, the number of online bank users more than tripled from
700,000 in 2000 to 2.4 million in 2001, and it could reach 4.5 million in 2005 (E-Marketer
2002b). One reason for the success of Latin American banks online ventures seems to be the
attention they have paid to providing retail customers with multiple ways to access their accounts
(Internet, telephone, wireless). However, given that the share of the total population that actually

22
has a bank account is relatively small, the expansion of Latin American online banking may be
facing a bottleneck.
Compared with overall Internet usage estimated at 4.4 million in Australia, the major banks
together have attracted only 1.2 million to online banking. The Internet is a global phenomenon
and so is e-finance. Its deployment is not limited to developed countries, and indeed some
developing countries such as India and the Republic of Korea are experiencing particularly
strong growth in E-Banking. In Asia one of the most impressive records has been achieved by
the Republic of Korea. The Republic of Korea is leading in online brokerage and in mobile
banking. In South-East Asia Internet banking is also developing rapidly in Thailand, Malaysia,
and Singapore and to a lesser extent, in the Philippines.
In Bangladesh there is a large gap between the computerization of foreign banks and that of local
commercial banks and as regards the state of their intra- and inter-branch online networks.
However, 75 per cent of local banks are planning to introduce EBanking, which implies very
dynamic improvements.
Apart from North and South Africa the Sub Saharan Africa is the region that is seriously lagging
behind in Internet banking, although it is giving to the rest of the world the good example of
microfinance developments.

23
Review

24
 REVIEW OF LITERATURE

After conducting the study on Customer Perception towards E-Banking, following are the
reviews.

Joseph et al. (20011) investigated the influence of internet on the delivery of banking services.
They found six underlying dimensions of e-banking service quality such as convenience and
accuracy, feedback and complaint management, efficiency, queue management, accessibility and
customization.

Jun and Cai (2012) identified 17 service quality dimensions of i-banking service quality. These
are reliability, responsiveness, competence, courtesy, credibility, access, communication,
understanding the customer, collaboration, continuous improvement, content, accuracy, ease of
use, timeliness, aesthetics, security and divers features. They also suggested that some
dimensions such as responsiveness, reliability and access are critical for both traditional and
internet banks.

Jayawardhena (2012) transformed the original SERVQUAL scale to the internet context and
develops a battery of 21 items to assess service quality in e-banking. By means of an Exploratory
Factor Analysis (EFA) and a Confirmatory Factor Analysis (CFA), these 21 items are condensed
to five quality dimensions: access, website interface, trust, attention and credibility.
From the provider perspective, there are target quality and delivered quality. The focus of
process- or supply-led quality definition is rather internal than external, and it is defined as
conformance to requirements. It lays emphasis on the importance of the management and the
supply-side quality, and there is an important role of the process in determining the quality of
outcome

Ghobadian (2013) achieved the quality of conformance between the planned (target) quality
level and the real quality delivered to customers depends on the service quality management
system in an organization.

Iamai (2013) studied that 43% of online banking user havent started online financial transaction
because of security reasons, 39% havent started because they prefer face to face, 22% havent

25
started because they dont know how to use, for 10% sites are not user friendly and for 2% banks
are not providing the facility of internet banking. According to research 68% of the customers
can not say that when they will be starting the financial transactions through internet.
Maximum numbers of online banking users are male and maximum of them are in age the group
of 25-35. Numbers of female users are very less i.e. 17% only. More than 60% of the people
who are having account with have accounts in 3-4 banks. Only 37% of Indian Internet users
come from Top 10 cities i.e. Mumbai, Bangalore, Delhi, Calcutta, Chennai, Pune, Hyderabad,
Ahmedabad, Surat and Nagpur. Another day and another number. As per IAMAI and I-cube, the
number of active Internet user (i.e. ones who logon to Internet atleast once a month) is now 32
million and numbers who have used Internet atleast once stands at 46 million.

Meuter et al. (2014) identified critical incidents of customer satisfaction and dissatisfaction with
technology-based service encounters. Given that business-to-business transactions are the fastest
growing segment of technology-driven services.

Meuter (2014) suggested investigating what drives business customer satisfaction or

dissatisfaction with technology driven services. Customers distinguish the quality of customer
interactions that take place during service delivery (functional quality) and the quality of the
outcome the customer receives in the service encounter (technical quality).

Zen (2015) concluded that customers perceive the quality of services of Internet banking based
on the performance of online delivery systems not on the processes in which the delivered
service is developed and produced. Because customers perceive Internet banking service quality
based on relatively standardized outcomes determined by online systems, customer attitudes
toward that outcome reflect overall quality of services delivered. Customers usually perceive
risks in conducting transactions electronically and particularly if the transactions involve money.
Risk perception can be of six different types: time risk, finacial risk, performance risk,
psychological risk and safety/confidentiality risk. It is generally considered that risk perception
could be higher for electronic banking services. This study aims to understand extent to which
whether this is consideration is valid as well as to determine the levels of risk perception
differences among those using Internet Banking and those not using it.

26
In India still there is lack of users for internet as a medium for banking purpose, but the banking
system are upgrading and bringing many electronic banking medium for customers so that
banking can be made more convenient

27
Need, scope and objectives

28
3.1 NEED OF THE STUDY
In India still there is lack of users for internet as a medium for banking purpose, but the banking
system are upgrading and bringing many electronic banking medium for customers so that
banking can be made more convenient. So there is a need to understand extent to which whether
this is consideration is valid as well as to determine the levels of perception differences among
those using Internet Banking and those not using it

3.2 SCOPE OF THE STUDY

The scope of the study was limited to the respondents of Jalandhar area.

3.3 OBJECTIVES OF THE STUDY

After conducting the study, following are the objectives of the study:
1. To know the customers perception toward the E-banking service.
2. To know the problems faced by consumers regarding E-banking.
3. To know the satisfaction level of consumers towards e-banking.

29
RESEARCH METHODOLOGY

30
 RESEARCH METHODOLOGY

4.1 RESEARCH METHODOLOGY

Research is a careful investigation or inquiry especially through for new facts in branch of
knowledge. Market research specifies the information. Required to address these issue design the
method for collecting informations manage and implements the data collection process analysis
and communicate the findings and their implications
Research Problem is one which requires a researcher to find out their best solution for giving
problems that is to find out the course of action, the action, the objectives can be obtained
optimally in the context of given environment

4.2 RESEARCH DESIGN

Research Design is an arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy on procedure. The research
problem having been formulated in clear-cut term helps the researcher to prepare a research
design. The preparation of such a design facilitates in conducting it in an efficient manner as
possible. It is a blue print for the fulfillment of objectives and answering questions.
Research design for the current study is descriptive research and conclusion oriented research.

4.3 SAMPLING DESIGN

The following factors have to decide within the scope of sample design:

4.3.1 UNIVERSE
The universe of the study includes the respondents of the Jalandhar area.
4.3.2 SAMPLING UNIT
Sampling unit consists of the respondents who are using e-banking services.
4.3.3 SAMPLING SIZE
In this study the sample size is of 50 respondents.
4.3.4 SAMPLING TECHNIQUE
In this the sampling technique is Non- Probability Convenience sampling, where population
elements are selected for inclusion in sample based on ease of access.

31
4.4 DATA COLLECTION
There are two types of data sources. :
i) Secondary data:
It includes information which had already been collected by someone else and which
had already been passed through the statistical process. In this case one is not
confronted with the problems that are usually associated with the collection of
original data. Secondary data either is published data or unpublished data. Secondary
data was collected through internet and by using companys manuals.
ii) Primary data:
It includes information collected afresh and for the first time, and thus happen to be
original in character. It is the backbone of any study. It was obtained from
respondents that are executives of each department with the help of widely used and
well-known method of survey, through a well-structured questionnaire.

4.4 Limitations of the Study

Limited scope: the sample size in relation to total population is small and hence cannot be
the basis of generalization.
Existence of biases: while filling the questionnaire, personal biases of respondents might
affect the responses.
Hard enough to fetch the information: Respondents are sometimes unwilling and hesitant
in replying to answers.
Results may be inaccurate: the accuracy of the results is also limited to reliability of
methods of investigation, measurements and analysis of data.
Lesser reliability: there is possibility of questions being misunderstood by a few
respondents due to variation studies of the respondents.
Sometime people dont have time to fulfill questionnaire, so they give only few information.
Data collection error may be there due to wrong response from respondents as some time
they are not right person who takes actual decisions.

32
Data analysis

33
 DATA ANALYSIS AND ITS INTERPRETATION

1. Do you have internet connection?

Table 5.1 Internet Connection
Response No. of Respondents Percentage
Yes 40 80
No 10 20
Total 50 100

Figure 5.1 Internet Connection

45
40
40
35
30
25
20
15
10
10
5
0
Yes No

Interpretation
From the above table and graph we can say that the majority of respondents i.e. 40% own an
internet connection.

34
2 How often do you use internet?
Table 5.2 Time you are Using Internet
Time Period No. of Respondents Percentage
Once in a week 5 10
Daily 45 90
Once in a Month 0 0
Total 50 100

Figure 5.2 Time you are Using Internet

100
90
90
80
70
60
50
40
30
20
10
10
0
Once in a week Daily Once in0a Month

Interpretation
From the above table and graph we can say that the majority of respondents i.e. 90% are using
internet daily. and only 10% respondents are using internet once in a month .

35
3. In which bank do you have an account?
Table 5.3 Bank Name
Time Period No. of Respondents Percentage
HDFC 10 20
ICICI 10 20
PNB 15 30
SBI 10 20
Others 5 10
Total 50 100

Figure 5.3 Bank Name

35
30
30

25
20 20 20
20

15
10
10

0
HDFC ICICI PNB SBI Others

Interpretation
From the above table and graph it is quite clear that 30% respondents have account in PNB bank,
20% each respondents are using HDFC, ICICI and SBI. The remaining 10% have an account in
other banks.

4. The e-banking facilities like ATM, Online Banking, Telephone Banking , Mobile
Banking are provided by your bank?

36
 Table 5.4 E-banking Facilities Provided by your Bank
Response No. of Respondents Percentage
Yes 50 100
No 0 0
Total 50 100

Figure 5.4 E-banking Facilities Provided by your Bank

120
100
100

80

60

40

20

0
Yes 0
No

Interpretation
From the above table and graph it is quite clear that all the respondents are agree that the bank
provides e-banking facilities like ATM, Online Banking, Telephone Banking , Mobile Banking to
the consumer.

37
5. What banking services do you use which your Internet bank offers? (Please check all
you are currently using)

Table 5.5 Banking Service You Use

Service No. of Respondents Percentage

Calculate loan payment information 5 10

Download applications 5 10

Personal bank transaction activity. 15 30

Check balances on-line 15 30

Seeking for product and rate 10 20

information

Total 50 100

Figure 5.5 Banking Service You Use

38
 35 30 30
30
25 20
20
15 10 10
10
5
0

Interpretation
From the above table and graph it is quite clear that 30% of the respondents uses internet
banking for personal bank transactions activity, 30% uses for checking balance online, 20% uses
for searching product and rate information. The remaining 10% each uses for dowlloading
applications and loan payment information.
6. Reason of preferring e-banking rather than traditional banking.

Table 5.6 Reason for Preferring E-banking

Reason No. of Respondents Percentage

Ease of access 5 10

Time saving 5 10

Avoid wastage of Time 15 30

39
 24 hours service 15 30

Eco Friendly 10 20

Total 50 100

Figure 5.5 Reason for Preferring E-banking

35
30 30
30
25
20
20
15
10 10
10
5
0

Interpretation
From the above table and graph it is quite clear that 30% of the respondents uses e-banking
facility to avoid wastage of time, 30% respondents uses e-banking facility due to 24 hour
service, 20% respondents uses e-banking because it is paper free work. The remaining 10% each
says ease of access and time saving.

7. What are the problems faced by e-banking users?

40
 Table 5.7 Problems Faced By E-Banking Users

Problem No. of Respondents Percentage

Information Leakage 5 10

Network Error 5 10

Lack of awareness 20 40

Difficult for Layman 20 40

Total 50 100

Table 5.7 Problems Faced By E-Banking Users

41
 45 40 40
40
35
30
25
20
15 10 10
10
5
0

Interpretation
From the above table and graph it is quite clear that 40% each of the respondents lack of
awareness and difficult for layman to use internet. 10% respondents says problem due to
netwoork error. The remaining 10% says infirmation leakage.

42
8. Are you satisfied with the e-banking services provided by your bank?
Table 5.8 Satisfied With The E-Banking Services
Response No. of Respondents Percentage
Yes 40 80
No 10 20
Total 50 100

Table 5.8 Satisfied With The E-Banking Services

90
80
80
70
60
50
40
30
20
20
10
0
Yes No

Interpretation
From the above table and graph we can say that the majority of respondents i.e. 80% are satisfied
with e-banking services provided by the bank and the 20% are not satisfied.

43
44
 FINDNGS OF THE STUDY

After conducting the study on Customer perception towards E-Banking, following were the
findings of the study:

The majority of respondents i.e. 80% own an internet connection.

It is concluded that the majority of respondents i.e. 90% are using internet daily. and only
few respondents are using internet once in a month .
It is quite clear that 30% respondents have account in PNB bank, 20% each respondents are
using HDFC, ICICI and SBI. The remaining 10% have an account in other banks.
It is quite clear that all the respondents are agree that the bank provides e-banking facilities
like ATM, Online Banking, Telephone Banking , Mobile Banking to the consumer.
It is quite clear that 30% of the respondents uses internet banking for personal bank
transactions activity, 30% uses for checking balance online, 20% uses for searching product
and rate information. The remaining 10% each uses for dowlloading applications and loan
payment information.
It is quite clear that majority of respondents uses e-banking facility to avoid wastage of time
and due to 24 hour service, 20% respondents uses e-banking because it is paper free work.
The remaining 10% each says ease of access and time saving.
It is quite clear that majority of the respondents say lack of awareness and difficult for
layman to use internet are the main problem during e-banking. Only few respondents say
problem due to netwoork error and information leakage.
The majority of respondents i.e. 80% are satisfied with e-banking services provided by the
bank and the 20% are not satisfied.

45
Conclusion and recommendations

46
7.1 CONCLUSION
There is still a lot needed for the banking system to make reforms and train their customers for
using internet for their banking account. Going through the survey the main problem lies that still
customer have a fear of hacking of accounts and thus do not go on for internet banking. Banks
are trying their level best by providing the best security options to the customers but then to there
is lot of factors which betrays a customer from opening an internet bank account.
Banks are providing free internet banking services also so that the customers can be attracted. By
asking the bank employs we came to know that maximum numbers of internet bank account
holders are youth and business man..

If proper training should be given to customer by the bank employs to open an account will be
beneficial secondly the website should be made friendlier from where the first time customers
can directly make and access their accounts.

All the consumers are satisfied with e-banking services provided by the bank. Consumer prefer
e-banking rather than traditional banking. The main reason for using e-banking among
consumers that it is 24 hours service and it also saves the precious time.

47
7.2 RECOMMENDATIONS
We can see the time is changing and we the passage of time people are accepting technology
there is still a lot of perceptual blocking which hampers the growth its the normal tendency of a
human not to have changes work on the old track, thats also one of the reason for the slow
acceptance of internet banking accounts.
Give proper training to customers for using i-banking
Create a trust in mind of customers towards security of their accounts
Provide a platform from where the customers can access different accounts at single time
without extra charge.
Make their sites more users friendly.
Customers should be motivated to use E- banking facilities more.

48
References

49
 REFERENCES

1. Ghobadian et al. (2013). Service quality evaluation in internet banking: an empirical study in
India, Int. J. Indian Culture and Business Management, Vol. 2, No. 1, pp.3046.
2. Iamai et al. (2013). The Impact of Internet Banking Service Quality On Business Customer
Commitment. Indian Culture and Business Management, Vol. 1, No. 1, pp.10-45.
3. Jayawardhena et al. (2012) . An Empirical Analysis of the Antecedents of Electronic
Commerce Service Continuance. Decision Support Systems, Vol.32, No. 2:201-214.
4. Joseph et al. (20011). Technology Infusion in Service Encounters. Journal of the Academy of
Marketing Science (28: 1), Winter, pp. 138-149.
5. Jun M. and Cai P. (2012). Trust in Electronic Commerce Business Relationships. Journal of
Electronic Commerce Research, Vol. 3, No. 2: 32-39,
6. Meuter et al. (2014) . Intentions To Use Self-Service Technologies: A Confluence of Multiple
Attitudes Journal of Service Research (5: 3), February , pp. 209- 224.
7. Zen et al. (2015). The Diffusion of Internet Banking Among Singapore Consumers
International Journal of Bank Marketing, 21(1): 16-28.

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QUESTIONNAIRE

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 QUESTIONNAIRE

Dear respondent,
I am an MBA student of Apeejay Institute of Management, Jalandhar is
conducting a survey on the topic Customer perception towards e-banking as a part of our
curriculum. Your cooperation is required in this endeavor and we assure that the following
questionnaire will not take much of your time.

DEMOGRAPHIC PROFILE

Name_________________________________
Age
Less than 20 years 20-30 years
30-40 years More than 40 years
Occupation ____________________________

1. Do you have internet connection?

Yes No

2 How often do you use internet?

Once in a week

Daily

Once in a Month

3. In which bank do you have an account?

HDFC ICICI
PNB SBI
OTHERS

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4. The e-banking facilities like ATM, Online Banking, Telephone Banking , Mobile
Banking are provided by your bank?
Yes No

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

Calculate loan payment information

Download applications
Personal bank transaction activity
Check balances on-line
Seeking for product and rate information

6. Reason of preferring e-banking rather than traditional banking.

Ease of access
Time saving
Avoid wastage of Time
24 hours service
Eco Friendly

7. What are the problems faced by e-banking users?

Information Leakage

Network Error

Lack of awareness

Difficult for Layman

8. Are you satisfied with the e-banking services provided by your bank?
Yes No

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