Chapter2 PDF

CHAPTER II
REVIEW OF LITERATURE
It is relevant to refer briefly to the previous studies and research in the
related areas of the subject to find out and to fill up the research gaps, if any. The
success of to-day’s banking system without information technology and
communication is of a rare dream. It has enlarged the role of banking sector in the
economy with quick and easy process for financial transactions and payment. The
banks with the latest technology and techniques are more efficient in facing the
competitive financial market and succeed. They have been able to generate more
and more business resulting in their greater profitability. Various empirical and
theoretical studies have been undertaken at the national and international level to
analyze the impact of e-banking and information and communication technology
(ICT) on banking sector, customers, service quality and payment system. From the
customer angle, the studies primarily focus upon- why customers choose
e-banking products and increase in their level of satisfaction due to phone
banking, mobile banking, internet banking, website services, ATMs, etc. These
services have improved the satisfaction level of customers through the reduction
of processing time and transaction time. It enhances the productivity of banks in
terms of time saving and attending the customers at the branches. The review of
following studies throws light upon different aspects of e-banking.
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Chaudhary H.C. (1988)1 in his article entitled “Marketing Information
System in Banks” presented the importance of marketing in banking services,
different marketing decision areas in banks and information needs for making
marketing decisions in banks, The author, on the basis of survey of nationalized
commercial banks in India, suggested usefulness of a systematic marketing
information system to commercial banks and various factors which can make the
informational base of the bank strong and authentic.
V.K.Chopra (2001)2 in his research article entitled “Emerging challenges,
strategies and solutions in Indian public sector banks” highlighted Post VRS
Scenario, shrinking of profitability, new products like tele-banking, mobile
banking, Internet banking, e-commerce related products & non-performing assets.
He pointed out the synergy of Mergers & Acquisitions and some of the challenges
before the Indian Public Sector Banks.
S.Syamali (2004)3 in her article entitled “Customize, compete and conquer
through technology” highlighted that, “As the degree of uncertainty is more in
banking sector they have to depend more on building “Customer Relationship”,
which is a permanent asset bringing regular income rather than mere hardware
which have obsolescence as a critical factor. “Technology shall be prudently used
more as a means to achieve the end result”.
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K. N. C. Nair (2005)4 in his research paper entitled “E-Banking: Growing
Big” discussed the recent trends in E-banking, and he focused on federal bank – IT
initiatives, our recent IT initiatives, Achievements of IT in banks and problems of
E-banking. The author concluded that banking being highly information-intensive,
it is only logical to use IT as an effective enabler and facilitator for meeting the
requirement of banks and their customers. With the changing lifestyle of
customers, they need new products and convenient delivery channels, which can
be provided only by enabling technology.
Mohammed, Al-Hawari, Nicole Hartley and Tony ward (2005)5 in their
research work on “Measuring Banks’ Automated Service quality: A confirmatory
Factor Analysis” strived to develop a comprehensive model of banking automated
service quality taking into consideration the unique attributes of each delivery
channel and other variables that have a potential influence on quality issue. The
model revealed that the automated service quality in banks can be conceptualized
as a five factors structure consisting of ATM Service Quality, Tele Banking
Service Quality, Internet Banking Service Quality, Core service Quality and Price.
P. Siva Rama Prasad (2005)6 in his research paper entitled “Is ATM Cost
Effective?” attempted to discuss the Technology and Its Implications on banks, It
concluded that reduction of Cost is Profit and hence Automated Teller Machine is
a Cost Control Device to the Commercial Banks.
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Dr. Ganti Subrahmanyam (2006)7 in his article entitled “Technological
Divide and Future of Retail Banking” discussed some of the issues pertaining to
implications of E-Commerce for banking industry. The author concluded that
banking can provide customers a seamless route to access retail financial services
with low transaction cost. He felt that it is popular only in a few parts of the world.
According to him, with the growing use of internet and other electronic channels
in India, scope for retailing through these channels is increasing.
Sharman Lictentein and Christy Williamson (2006)8 in their study on
“Understanding Consumer Adoption of Internet Banking: An Interpretive Study in
the Australian Context”, assessed the Australian banking consumer experiences
with the adoption of Internet Banking. It provided an understanding of the factors
affecting the decision of consumers to bank on the internet in the Australian
context. The study revealed that Convenience is the main motivator for consumers
to bank on the internet. It also highlighted that increasing risk acceptance by
consumers and the growing importance of deep levels of consumer support for
service are the reasons for the success of providing internet banking. Hence, it was
suggested by the study that the banks have to understand adoption of internet
banking involves a process of understanding such consumer experiences.
V.P. Gulati and M.V. Sivakumaran (2006)9 in their research paper
entitled “E-Learning in Banking: Perspectives and Initiatives”, discussed the
emerging perspectives in e-learning. The need to re-orient traditional training
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systems is to offer web-based learning by taking full advantage of the internet
technology. He suggested that IDRBT initiatives in providing e-learning to
bankers in India and the emerging challenges for the training system in this regard
are considered and commented upon. The paper emphasized the paramount need
for organizations to get into the continuous learning mode to succeed and survive
in the knowledge era. Thus, an examination of the above review of literature
suggested that the studies on computerization in banking are very few. Even these
studies have not made any attempt to examine the impact of computerization on
performance of banks, which is an important issue in the present context.
Considering this in view, this study examined the Impact of Computerization in
Public Sector Banks in Andhra Pradesh with special reference to Andhra Bank and
State Bank of Hyderabad.
Rajesh Kumar Srivastava (India) (2007)10 in his article on “Customers’
Perception on Usage of Internet Banking” focused on the issues like customer’s
perception about internet banking and how to improve the usage rate. The study
revealed that education, gender and income play an important role in the usage of
internet banking.
Divya Singhal and Padhmanabhan (2008)11 in their study on “Customer
Perception Towards Internet Banking: Identifying major Contributing Factors”
explored the major factors responsible for Internet banking based on respondents’
perception on various internet applications. The study concluded that internet
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banking is the convenient and more flexible way of banking and thus internet
banking is increasingly becoming a “need to have”.
Nadin Jehangir and NoorJahan Begum (2008)12 in their study on “The
Role of Perceived Usefulness, Perceived Ease of Use, Security and Privacy and
Customer attitude to Engender Customer Adaptation in the Context of E-banking”
aimed to propose a conceptual framework that will investigate the effects of
perceived usefulness to test the theoretical model to measure whether perceived
usefulness, ease of use, security and privacy and customer attitude can poster
customer adaptation and found that these are significantly and positively related to
customer adaptation.
Uppal R. K. (2008)13 described in his study on “Customer Perception of
E-Banking Services of Indian Banks” that in the post LPG (Liberalisation,
Privatisation and Globalisation) era and information technology era,
transformation in Indian Bank is taking place with different parameters and the
curve of banking services are dynamically altering the face of banking from
traditional banking to e-banking. The study empirically analysed the quality of
e-banking services in the changing environment. It concluded that most of the
customers of e-banks are satisfied with the different e-channels and their services,
but the lack of awareness is a major obstacle in the spread of e-banking services.
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Ahasanul Haque, Arun Kumar Tarofder, Sabbir Rahman and Md
Abdur Raquib (2009)14 carried out a research entitled “Electronic transaction of
internet banking and its perception of Malaysian online customers”. The purpose
of this research is to find out significant factors of consumers’ perception on
e-banking transaction by Malaysian bank consumers. The study utilized a
combination of theoretical frameworks and quantitative techniques to testify the
statistical relationships between consumer perceptions on e-banking transaction.
Meanwhile factor analysis was performed to extraction and make initial decision
on the number of factors underlying asset of measured variables of interest.
Thereafter, Structural Equation Mode (SEM) was estimated to anticipate the
effects of the explanatory variables. This study showed that only protected
transaction, have significant impact on consumers’ perception about ebanking
security, followed by service quality and regulatory frame work issues.
Dube Theilani, Chitura Tofora and Runyowa (2009)15 in their article on
“Adoption and Use of Internet Banking in Zimbabwe” sought to explore the extent
of adoption and usage of internet banking by commercial banks in Zimbabwe and
also investigated the challenges they face in the adoption of their technology. The
result showed that while majority of the banks in Zimbabwe are adopted internet
banking, usage levels have remained relatively low, as not many customers are
using this innovation in Zimbabwe. It also revealed that compatibility with the
existing legacy system, cost of implementation and security concerns ranked high.
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Hence, the study recommended that the banks in Zimbabwe should vigorously
promote the usage of internet banking among customers and also the policy
makers such as government, Reserve Bank of Zimbabwe should increase
investment targeting infrastructure development so as to encourage the banks and
individuals alike to adopt the innovation.
Mohammed Ossain and Shirly Leo (2009)16 carried out a study on
“Customer Perception on Service Quality in Retail Banking in Middle East: The
case of Qatar” with the purpose to evaluate the service quality in retail banking in
the Middle East in general and Qatar in particular, based on different levels of
customers’ perception regarding service quality. It indicated that customers’
perception is highest in the tangible area and lowest in the competence area.
Mohammed Sadique and Siba Sankar Mohapatra (2009)17 in their
research work on “Service Quality Evaluation in Internet Banking: An Empirical
Study in India” evaluated the service quality of internet banking services in India
from customer perspective based on 7 quality dimensions viz., reliability,
accessibility, user friendliness, privacy, efficiency, responsiveness and fulfillment.
They observed that customers are satisfied with the reliability of the service
provided by the banks but are not satisfied with the user-friendliness, privacy and
fulfilment. Hence, it is recommended to take adequate measures to enhance the
satisfactory level of the customers in these areas.
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Prasantha K. Padhy and Biranchi Narayan Swar (2009)18 in their study
on “Customer Satisfaction and Service Gaps in Selected Public, Private and
Foreign Banks” examined the Service Quality Gaps models – SERVQUAL to
understand the service quality and identify the models that managers in the service
industry can employ to improve quality and to identify the models that can be used
in service to improve the quality. It revealed that there exists difference in
technology factors, core service and systematization of service delivery. It
suggested to pay attention to potential failure points of the customer retention
programmes and takes sincere efforts to offer quality service to achieve
commitment and loyalty of their customers.
Siddharth Agarwal (2009)19 in his dissertation on “Customer Perception
towards internet banking with reference to Private and Foreign banks in India”
analysed the differences in risk perceptions between bank customers using internet
banking and those not using internet banking and revealed that risk perception in
terms of finance, psychology and safety risks among customers not using internet
was more in case of customers not using the internet. Hence, the study
recommended for proper training to customers for using i-banking, to create a trust
in the minds of customers towards security of their accounts and make their sites
more user friendly.
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Zarehan Selamat, Nahariah Jaffar, Ong Hway Boon (2009)20 carried out
a study on “Technology Acceptance in Malaysian Banking Industry” to examine
the determinant factors and acceptance of Information Technology in the
Malaysian banking industry. The Technology Acceptance Model (TAM) was
employed to study the perceived usefulness, perceived ease of use, social pressure,
perceived enjoyment and fun, as well as the perceived complexity of IT usage and
acceptance of Malaysian bankers. A survey was conducted by distributing
questionnaires to a randomly selected sample of 200 bankers located within the
Klang Valley, in Malaysia. The location of the survey was selected in view of its
advancement, development and implementation of IT applications as compared to
other locations in Malaysia. The results of the study established that perceived
usefulness was most influential in determining microcomputer usage among
bankers in Malaysia. Overall, the results of this study are valuable to both
researchers and bank management in providing new insights about the IT from
bankers’ point of view.
J. Swaminathan and A. Ananth (2010)21 in their study on “Customer
Satisfaction on E-Banking: A Study with Special Reference to Mayiladuturai”
analysed the level of customer satisfaction on e-banking. It observed that a
particular age group have only used those services effectively and their
satisfaction is mainly influenced by the convenience, awareness and
responsiveness. The study suggested to create awareness among others and to
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concentrate on the factors contributing customer satisfaction to ensure loyalty
among the customers.
Kambiz Heider Zadeh Hanzace and Tooraj Sadeghi (2010)22 in their
research work on “Measuring Banks’ Automated Service Quality: An
Re-examination and Extension in an Islamic country” seek to answer What factors
determine consumer satisfaction of electronic banking services in Iran?. By using
service quality models and theories such as Technology Acceptance Model
(TAM), Theory of Reasoned Action (TRA) and Theory of Planned Behaviour
(TPB) as basis, they constructed a model with 7 factors on the dimension of
convenience, accessibility, accuracy, security, usefulness, banking image and web
site design. The study concluded that these dimensions are the determinants of
consumer’s quality perception in e-banking services.
Lo Liang Kheng, Osaman Mahamad, T. Ramayah and Rahim
Mosehale (2010)23 carried out a study to assess the impact of service quality on
customer loyalty in banks in Panang, Malaysia using SERVQUAL model with
5 dimensions. It revealed that improvement in service quality can enhance the
customer loyalty and relativity, empathy and assurance are the dimensions playing
a significant role in improving the customer loyalty.
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Naveed Azeem Khattak and Kashif. Ur. Rahman (2010)24 analysed the
customers’ satisfaction and awareness level towards Islamic Banking industry and
the relationship between different demographic variables and the satisfaction and
awareness of the customers. The study indicated that awareness towards Islamic
products like current account, fixed deposit is good. It also found that customers
are not aware of the financial products offered. The study suggested to create
awareness about the products provided by the banks and insisted on the provision
of network.
Neha Dixit, Dr. Saroj K. Datta (2010)25 in their study on “Acceptance of
E- Banking among Adult Customer: An Empirical Investigation in India”
investigated the factors affecting the acceptance of e-banking services among adult
customers and the level of concern regarding the security and privacy issues. The
study found that adult customers are willing to adopt online banking if banks
provide them necessary guidance and it recommended that the bank should
segment the market on the basis of age group and provide them necessary
guidance regarding the use of online banking.
Syed Abdul Mannan (2010)26 in his paper on “Technologies in Indian
Banks and Customers’ Perception: An Empirical Study in Maharashtra” analysed
the implementation of technology in Indian banks and understanding the
customers’ perception. This study is based on the survey and the data which is
collected through the issue of questionnaire to the bank’s customer. The results
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revealed that customers are satisfied with technology oriented banks products and
services. The empirical findings not only determine the different parameters also
provide guidelines to bankers to focus on the parameters on which they need to
improve and spread the awareness of electronic banking products and services to
each and every section of the society.
Thomas Ogoro, Peterson Obara, Magutu Stephen Onscrio Nyamwange
and Richard Bitange Nyaoga (2010)27 in their article on “Technology and
Service Quality in Banking Industry ” tried to establish the relationship between
technology and the service quality in the banking industry in Kenya. The study
revealed that secure service as the most important dimension followed by
convenient location of ATM, efficiency, accuracy of records, user friendly, ease of
use, complaint satisfaction, accurate transaction and operation in 24 hours. Hence,
it recommended that performance of banking industry should be monitored on a
regular basis.
Abdullah Bin Omar. Naveed Sultan, Khalid Zaman, Nazish Bibi
(2011)28 in their research work on “Customer Perception towards Online Banking
Services: Empirical Evidence from Pakistan” examined the customer perception,
preferences, problems and suggestions about online banking in Pakistan. The
study revealed that mostly customers prefer internet banking (IB) services over
branch banking due to reliability, convenience, speed, safety and security, cost
effectiveness, user-friendly, and error free system. In contrast, the parallel finding
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shows that security problems, lack of trust and knowledge, ATM machine
problems etc. affect the adoption decision of customers of internet banking
services. The services which are not in Pakistan e.g. Cash depositing facility
through ATM machines, “SMS/E-mail Alert” Service, Transfer funds through
ATM machines, Payment of utility bills through internet are found most required /
demanding services by the customers in this study. This study will help the banks
that how they can improve the level of online banking services in Pakistan and
what are the potential issues or services that should be introduced in the society to
facilitate the customer in a better way and to compete with their rivals in banking
industry as a whole.
Dr. Aremu, Mukaila Ayanda, Dr. Mejabi, Omenogo Veronica,
Dr.Gbadeyan, Rotimi Ayodele (2011)29 in their paper on “A Study on
Customers’ Perception of Information Technology in the Nigerian Banking
Industry” examined the perception of customers about information technology in
the Nigerian banking industry. The findings revealed that, customers perceived
Information Technology enhanced the effectiveness and efficiency of banking
service and also create accessibility, smooth and mutual relationship between
customers and bank. The study concluded that Information Technology has
brought a fundamental positive change in the service delivery and qualitative
banking practices in Nigeria. It, therefore, has become a ‘need to have’ and a ‘nice
to have’ facility in the Nigerian banking industry.
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Dr. C. S. Ramanigopal and A. Mani (2011)30 in their study on
“Customers’ Perception Towards Service Quality of the Commercial Banks in
Coimbatore City” aimed to assess the need and importance of service quality and
review the existing practice followed by the commercial banks in the area of
service quality in Coimbatore City. The study was carried out by obtaining the
perception of customers of State Bank of India and ICICI Bank. The study used
structured questionnaire to assess the perception of the customers towards the
service quality of the said banks. It suggested to organize Consumer Care
Programme to strengthen the service quality, Customer Complain Monitoring Cell
to deal with the customer complaints effectively, Consumer Satisfaction Audit to
find out the discrepancies in the consumer perception level and also a provision of
round the clock service on phone and concentrate on relationship management.
Dr. G. Santiyavalli (2011)31 in her research article on “Customer
Perception of Service Quality of State Bank of India – A Factor Analysis”
evaluated the service quality of State Bank of India by identifying the major
factors responsible for customer satisfaction. For the purpose SERVQUAL
technique based on the model developed by A. Parasuraman et al was used. The
study revealed that tangibility is the major factor responsible for customer
satisfaction.
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Dr. Muhammed Ehran Malik, Basharat Nasem, Zoune Arif (2011)32 in
their research article on ”How Do Service Quality Perceptions Contribute in
Satisfying Banking Customers?” found that perceived service quality was
significant and predictor of customer satisfaction by using SERVQUAL. It
revealed that the SERVQUAL dimensions have significant impact on overall
satisfaction among Pakistani clients. Assurance of quality relatively had higher
contribution to give satisfaction.
Dr.N.B.Jadhav, Mrs.Poonam R. Lohana and Mr. Rupesh Dargad
(2011)33 in their research article on “Customer perception and attitude towards
e-banking” determined the consumers perspective on the adoption of E-banking.
The study revealed that electronic revolution has made it possible to provide ease
and flexibility in banking operations which benefit the customers.
G. Reji kumar and D. Sudharani Ravindran (2011)34 in their work on
“An Empirical Study on Service Quality Perceptions and Continuance Intention In
Mobile Banking Context In India” examined the factors influencing the
continuous decision of the adoption of M-Banking in Kerala. The study was taken
up under the backdrop of the issues faced by the banks to attract more customers
irrespective of the huge mobile penetration in the country. The study used
constructs adopted in Tecnology Acceptance Mobile along with the constructs of
perceived service quality and perceived credibility and perceived risk to
empirically establish the influence on satisfaction and continuance of usage
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intentions. The study has found a strong linkage between perceived service
quality, satisfaction and continuance intentions. The study also highlighted the
perceptions of the risk involved in banking, adverse impact on service quality and
satisfaction and continuation of using the services solely dependent on
satisfaction.
H. Vasantha Kumari and S. Sheela Rani (2011)35 in their research work
on “Customer Perception of Service Quality in the Retailing Sector” made an
attempt to study the influence of demographical factors on customer perception
towards retail banking services offered by the banks. It is indicated that customers
perception can be influenced by the effects of bank service quality on perception.
It also showed that there exists significant relationship between demographic
characteristics and customer perception towards services offered by the bank in
case of services, reliability, tangibles and time duration. The study suggested to
improve the perception in order to attract new customers.
Hazlina Abdul Kadir, Nasim Rahmani and Reza Masinali (2011)36 in
their study on “Impact of Service Quality on Customer Satisfaction: Study of
Online Banking and ATM services in Malaysia” tried to identify the effects of
services offered by Malaysian banks through online media and ATMs on customer
satisfaction. The study used Service Quality Model to compare the difference
between satisfaction and expectations level in order to find out the dimension that
needs to be improved. The study also used Two-way ANOVA to identify the
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relationship between demographic factors. The study concluded that
responsiveness, customization and flexibility in E-SERVQUAL model needed
further enhancement to satisfy customers.
K.T. Geetha & V.Malarvizhi (2011)37 in their research paper on
“Acceptance of E-Banking Among Customers” investigated the factors which are
affecting the acceptance of e-banking services among the customers and also
indicate the level of concern regarding security and privacy issues in Indian
context. The finding depicted many factors like security and privacy and
awareness level increased the acceptance of e-banking services among Indian
customers. The finding also showed that if banks provide them necessary guidance
and ensure safety of their accounts, customers are willing to adopt e-banking.
M. Mohammed Siddik and Dr. M. Selva Chandra (2011)38 in their study
on “Customer Satisfaction Towards E-Banking Services of ICICI Bank in
Chennai” explored the consumer satisfaction at multidimensional level by
assessing the service delivery. The study revealed that majority of the respondents
preferred their branch because of Quality of service. Convenience, proximity and
popularity of branch were main reasons to prefer the particular branch by the
customers.
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R. A. Gbadeyan and O. O. Akinyosoye (2011)39 in their article on
“Customers’ Preference for E- Banking Services: A Case Study of Selected Banks
In Sierra Lenon” examined, whether customers’ choice of banks is influenced by
the quality of e–banking services provided. The study revealed that the quality of
e–banking services offered by banks have significant influence on their customers.
The paper recommended that various measures should be put in place to ensure
more security such as installation of encrypted software, verification system of
customer’s identification cards, frequent change of password, examining test
questions and using mixed password such as the use of alphanumeric amongst
others. The paper concluded that e –banking has become important phenomenon
in the banking industry and it will continue as more progress and innovations are
made in information technology.
A study was undertaken by R. Karruppusamy and Dr. N. Venkatesa
Palanichamy (2011)40 to understand the customer preference towards e-banking
services with a view to improve the operational efficiency of the e-banking
facilities. The results of the study revealed that majority of the E- banking users
are males, belonging to young age group with high educational status and higher
income compared to non E-banking users. Most of the non E-banking users were
aware of E-banking and showed willingness to use E-banking facilities. The main
purpose of using E-banking facilities is for getting credit and debit alert; time
saving was the most important factor which influenced the adoption of E-banking
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facilities. Educational status, age, frequency of the visit to bank were the major
factors which discriminating the user and non- user of E-banking. The customer
had a positive perception regarding quickness, energy and time saving,
advantages, security and dependability of E-banking facilities but Lack of
adequate knowledge on E-banking facilities and technological complexity were
major constraint faced by the customer while using e- banking services.
Rahmath Safeena, Hema Date and Abdullah Kammani (2011)41 carried
out a study on “Internet Banking Adoption in an Emerging Economy: Indian
Consumer’s Perspective” to determine the factors influencing the consumer’s
adoption of internet banking in India and hence investigated the influence of
perceived usefulness, perceived ease of use and perceived risk on use of internet
banking. The result of this study showed that Perceived Use, Perceived ease of use
and Perceived risk are the important determinants of online banking adoption.
Seethalectcumy Tambiah, Cyril Eze, Arul Jeganatan, Santhapparaj
and Kesevan Arumugam (2011)42 in their research work on “Customers’
Perception on Islamic Retail Banking: A Comparative Analysis Between the
Urban and Rural Regions of Malaysia”, analysed the difference in awareness,
perception, and preference of internet banking between urban and rural banking
customers of Malaysia. It revealed that there is a significant difference in terms of
awareness and on perceived complexity. It is suggested by the study to promote
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the retail banking service strategically with specific regulations and policies that
enhance the market share of the Islamic Retail Banking.
Shah Ankit (2011)43 in his research work on “Factors Influencing Online
Banking Customer Satisfaction and Their Importance in Improving Overall
Retention Levels: An Indian Banking Perspective” focused on investigating the
major factors that influence online customers’ satisfaction with the overall service
quality of their banks. This study also helped in assessing the power of these
factors in the context of Online (Internet) banking and would, therefore, help the
bank management not only in improving the level of satisfaction but also
strengthening the bond between the banks and their customers, thereby helping
them to retain and/or expand their overall customer base.
Shamsher Sing, (2011)44 in his study on “Customer Satisfaction Analysis
of Information and Communication Technology Channels in Banking Sector”
examined the customer satisfaction of banking services related to Information and
Communication Technological (ICT) channels like ATM, Tele-banking and
internet banking in Delhi and the impact of ICT channels on satisfaction. It
indicated that the ICT channels have positive impact on the customer satisfaction.
It also revealed that some characteristics such as availability of cash and location /
proximity of ATM and time to process have very high influence on satisfaction in
both private and public sector banks.
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Surabhi Singh and Renu Arora (2011)45 in their research article on “A
Comparative Study on Banking Service and Customer Satisfaction in Public,
Private and Foreign Banks” made an attempt to study customers’ perception of
quality of service both transaction based and IT Enabled in terms of its constituent
factors in public, private and foreign banks by assessing the extent of use of
services especially the IT enabled services in these bank. It also analysed the
factors affecting customer satisfaction with quality service. The study showed that
the customer of nationalized banks were not satisfied with the employee behavior
and infrastructure while customers of private and foreign banks felt that the
charges were high and found difficult in accessing the service and communication.
The study insisted on giving training to employees of nationalized banks and
increasing the number of branches for easy accessibility in case of private and
foreign banks.
V.M. Kumbhar (2011)46 in his research article on “Factors Affecting the
Customer Satisfaction in E-Banking: Some Evidences from Indian Banks”
evaluated the major factors affecting customers’ satisfaction in e-banking service
settings. It also assessed the influence of service quality on brand performance,
pervceived value and satisfaction in e-banking. It indicated that perceived value,
brand performance cost effectiveness, easy to use, convenience, problem handling,
security and assurance and responsiveness are important factors in customer
satisfaction in e-banking.
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Dr. Harikant (2012)47 in his research article on “Customer Perception
Towards Computerisation in Indian Banks – A Study of Selected Banks”
examined the impact of computerization on the perception of banks with special
reference to State Bank of Hyderabad and Andhra Bank. The study revealed that
the computerization saves time and ensures fastness in service. The study
identified failure of the system, high charges and security concern.
Edward Marfo-Yiadom and Abraham Ansong (2012)48 in their study on
“Customers’ Perception of Innovative Banking Products in Cape Coast
Metropolis, Ghana” explored how innovative banking products are perceived by
consumers. The study used purposive sampling technique to gather data from 288
students from a public university in Ghana. The study revealed that the critical
features that influenced customers’ choice of banking products and their adoption
were convenience, reliability, security, flexibility, time saving and ease of use. The
most popular innovative products were Automated Teller Machines and E-zwich.
Telephone banking and credit cards were not very popular. Due to the low usage
of products such as the telephone and internet banking, it is recommended that
banks in Ghana should embark on an educational campaign to highlight the
benefits of these products to the populace.
Er. Vishal Goyal and Mrs.Ganna Goyal (2012)49 carried out a study on
“Customer perception Towards Internet Banking with reference to Private and
Foreign Banks in India”. In this study an analysis of the differences in risk
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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. It recommended
that Banks should try their level best by providing the best security options to the
customers.
M. Jayanthi and Dr. R. Umarani (2012)50 carried out a study on
“Customer Perception and Satisfaction towards Internet Banking Services“. The
study aimed to “plug” the gap between the perceived experiences and level of
satisfaction of customers’ towards Internet Banking facilities offered by the three
private sector banks namely HDFC bank, Axis bank and ICICI bank. The study
revealed eight composite dimensions of electronic service quality, including Login
feature, Information on the site, Linking feature, Service feature, Customer care,
Security system, Service usage, and Unique feature. The respondents preferred the
banks for customer responses, Login feature, Security system, and Service usage
of HDFC bank and Linking feature, Service feature, and Service usage of AXIS
bank, and Login feature, Information on the site, and linking feature of ICICI
bank. The respondents also preferred internet banking over manual banking for
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Convenience (24 hours service, anywhere connectivity) and Time saving (no
queues and waiting time).
Malika Rani (2012)51 in a “Study on the Customer Perception Towards
E-Banking in Ferozpur District” made an attempt to identify and measure the
customer perception towards the usefulness and willingness to use e-banking. The
study revealed that Consumers are using various services provided by their
respective banks and the highest used services are the ATM & bill payment across
various income groups followed by viewing of the account history.
Manoranjan Dash, Prafulla Kumar Swain, Ganesh Prasad Das, Alaka
Samantaray and Dhruti Sundar Sahoo (2012)52 in their study on “Consumers’
Perception About Internet Banking: The Case of Odisha” aimed to present a bird’s
eye view on internet banking in the Indian banking context and the current trends.
The objective of the study is to determine those factors that influence the
formation of attitude towards internet banking and their relation to the use of
internet banking services. The study identified the challenges of the banks as
continuous innovation of new products, creation of mass awareness, provision of
varied financial product and creating confidence among the customers.
P. Kannan, M. P. Suresh Kumar and R. Saravanan (2012)53 in their
article on “Rural Customer Preferences of Banking Services in India- Factor
Analysis and Reliability Test” examined the rural consumer preference about the
50

banking services in Dindigul District. This study focused on the bank service
quality levels through SERVPERF measuring scale (Croin, 1992) in rural market.
This study concluded that most of the private banks like ICICI, Federal bank etc.,
project to enter rural market. Rural people have less knowledge about the banking
services but they have enough knowledge in micro finance.
Ranjit Kumar Sahoo and Sukanta Chandra Swain (2012)54 in their
study on “Perceived Value and Perception Offered by E-banking Services with
special Reference to Punjab National Bank” made an attempt to find out whether
e- banking is performing as per the perception of the customers and employees
and whether there is any gap existing between the perceived value and the
perception. It concluded by insisting on the initiatives to create awareness to trust
the banking services.
Ravichandran.S and Dr.A.Murugarathinam (2012)55 in their study on
“Factors influencing the Customer Preference towards E-Banking Services in
Cuddalore District” investigated the level of awareness among the customers on
the use of e-banking and their expectations from e-banking. The findings of the
study revealed that the customers are satisfied with the quality of e-banking
services. But, they face technical as well as administrative and procedural
problems. Inspite of the problems, e-banking is preferred as the efficiency of the
employees working through e-channels is better. They suggested to have a correct
system architecture and design will help in managing operational and security
51

risks to a greater extent, to retain competitive advantage, the banking institutions
have to improve services at the branches and employees of e-banks should be
given training to match their skill with the requirements of changing environment.
Ritanjali Majhi (2012)56 in her article on “An Investigation on Customer
Attitude and Perception towards Internet Banking: A Case Study” tried to identify
the factors responsible for customers’ attitudes and perceptions towards emerging
internet banking sector. It also revealed the importance of the key variables
relating to customers’ demographic and social inputs. Further the effects of
psychometric factors are analyzed and the results are compared with those
obtained without psychometric input. Extensive analysis of the data revealed that
factors such as customer relationship management, word of mouth and the
attitudes of the customers play important roles in increasing the productivity with
respect to internet banking. Hypothesis tests also demonstrate that significant
difference exists in usage of mobile banking and SMS banking with reference to
demographic factors. The quality of the service also influences the customers to
choose internet banking as a better alternative.
52

CONCLUSION
The current research work is a comprehensive study regarding the
perception of consumers regarding the various services and products offered by
the banks using the information technology in the banking industry. In this study,
a comprehensive survey has been conducted to know the perceptions and extent of
acceptability of IT among the bank customers. The study highlighted the extent of
awareness and usage of the services and products in society regarding the use of
IT in banks. To cap it all, this study will be helpful to the society and also to the
nation by helping to make policies to turn our banks globally competitive by the
full adoption of IT. It will also add to the knowledge of existing literature.
53

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62

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CHAPTER II

It is relevant to refer briefly to the previous studies and research in the

success of to-day’s banking system without information technology and

analyze the impact of e-banking and information and communication technology

e-banking products and increase in their level of satisfaction due to phone

of processing time and transaction time. It enhances the productivity of banks in

following studies throws light upon different aspects of e-banking.

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System in Banks” presented the importance of marketing in banking services,

marketing decisions in banks, The author, on the basis of survey of nationalized

commercial banks in India, suggested usefulness of a systematic marketing

informational base of the bank strong and authentic.

V.K.Chopra (2001)2 in his research article entitled “Emerging challenges,

Scenario, shrinking of profitability, new products like tele-banking, mobile

banking, Internet banking, e-commerce related products & non-performing assets.

before the Indian Public Sector Banks.

S.Syamali (2004)3 in her article entitled “Customize, compete and conquer

through technology” highlighted that, “As the degree of uncertainty is more in

banking sector they have to depend more on building “Customer Relationship”,

which have obsolescence as a critical factor. “Technology shall be prudently used

more as a means to achieve the end result”.

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initiatives, our recent IT initiatives, Achievements of IT in banks and problems of

E-banking. The author concluded that banking being highly information-intensive,

requirement of banks and their customers. With the changing lifestyle of

be provided only by enabling technology.

Mohammed, Al-Hawari, Nicole Hartley and Tony ward (2005)5 in their

research work on “Measuring Banks’ Automated Service quality: A confirmatory

Factor Analysis” strived to develop a comprehensive model of banking automated

as a five factors structure consisting of ATM Service Quality, Tele Banking

Effective?” attempted to discuss the Technology and Its Implications on banks, It

a Cost Control Device to the Commercial Banks.

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implications of E-Commerce for banking industry. The author concluded that

in India, scope for retailing through these channels is increasing.

Sharman Lictentein and Christy Williamson (2006)8 in their study on

“Understanding Consumer Adoption of Internet Banking: An Interpretive Study in

the Australian Context”, assessed the Australian banking consumer experiences

with the adoption of Internet Banking. It provided an understanding of the factors

affecting the decision of consumers to bank on the internet in the Australian

to bank on the internet. It also highlighted that increasing risk acceptance by

banking involves a process of understanding such consumer experiences.

V.P. Gulati and M.V. Sivakumaran (2006)9 in their research paper

entitled “E-Learning in Banking: Perspectives and Initiatives”, discussed the

emerging perspectives in e-learning. The need to re-orient traditional training

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technology. He suggested that IDRBT initiatives in providing e-learning to

in the knowledge era. Thus, an examination of the above review of literature

performance of banks, which is an important issue in the present context.

Considering this in view, this study examined the Impact of Computerization in

State Bank of Hyderabad.

Rajesh Kumar Srivastava (India) (2007)10 in his article on “Customers’

Perception on Usage of Internet Banking” focused on the issues like customer’s

Divya Singhal and Padhmanabhan (2008)11 in their study on “Customer

Perception Towards Internet Banking: Identifying major Contributing Factors”

perception on various internet applications. The study concluded that internet

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banking is increasingly becoming a “need to have”.

Nadin Jehangir and NoorJahan Begum (2008)12 in their study on “The

Customer attitude to Engender Customer Adaptation in the Context of E-banking”

aimed to propose a conceptual framework that will investigate the effects of

perceived usefulness to test the theoretical model to measure whether perceived

Uppal R. K. (2008)13 described in his study on “Customer Perception of