Comprehensive study of penetration of Canara Banks techno products among customers

Under the guidance of Mr. Anurag Prakash. (Senior Manager, Mktg. cell, CO, Ranchi)
Submitted by:
Praveen Kumar(2010MB0021)

ABOUT THE ORGANISATION

CANARA BANK

Shri Ammembal Subba Rao Pai Founder Canara Bank "A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people" - A. Subba Rao Pai.

INTRODUCTION
It was founded as 'Canara Bank Hindu Permanent Fund' in 1906 by late Sri. Ammembal Subba Rao Pai. Vision :- To emerge as a best practices bank by pursuing global benchmarks In profitability, operational efficiency, asset quality, risk management and expanding the global reach. Mission :- To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking.

Founding Principles
To remove Superstition and ignorance. To transform the financial institution not only as the financial heart of the community but the social heart as well. To assist the needy. To work with sense of service and dedication.

Significant Milestones
1st July 1906, Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000 shares of Rs.50/- each, with 4 employees. In 1910 Canara Hindu Permanent Fund renamed as Canara Bank Limited. Canara Bank nationalized on July 19 1960. In 1976 1000th branch inaugurated. In 1995-96 Became the first Bank to be conferred with ISO 9002 certification for one of its branches in Bangalore.

In 2003-04 Launched Internet & Mobile Banking Services. In 2004-05 100% Branch computerization. As at March 2011, the total business of the Bank stood at Rs.5,00,000 crore.

 At present Canara Bank has 3273 branches. 2509 ATM covering 846 centres. With 100% CBS, the Bank offers technology banking, such as, Internet Banking, Mobile Banking and Funds Transfer through NEFT and RTGS across all branches.

Products & Services:

SAVINGS AND DEPOSITS LOANS TECHNOLOGY PRODUCTS MUTUAL FUNDS INSURANCE CONSULTANCY SERVICES ONLINE TRADING

ORGANISATION STRUCTURE
HEAD OFFICE (BANGLORE) HEADED BY CHAIRMAN CUM MD

CIRCLE OFFICE (34) HEADED BY GENERAL MANAGER REGIONAL OFFICE (26) HEADED BY DEPUTY GENERAL MANAGER BRANCH (3273) HEADED BY CHIEF MANAGER

Techno Products of Canara Bank

1. Internet Banking:- Internet banking refers to
systems that enable bank customers to access accounts and general information on bank products and services through a personal computer (PC) or other intelligent device.

2. Mobile Banking:-

Mobile banking is a term used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone. Mobile banking today is most often performed via SMS or the Mobile Internet but can also use special programs, called clients, downloaded to the mobile device. bank card or check card) is a plastic card that provides an alternative payment method to cash when making purchases.

3. ATM cum Debit Card:- A debit card (also known as a

 Objective:

Background of Project

A comprehensive study of penetration of Canara Banks technological products (Internet Banking, Mobile Banking and ATM cum Debit Card) among customers. Research Methodology: Research Design: Exploratory Research Descriptive Research Factor Analysis Source of Data: Primary Data- Interview, Questionnaire Secondary Data- Companys web site, Financial articles, Previous research papers Sample Design: Sampling- Convenient Sampling Sample size- 100 Scale used- Likert Scale

CASE ANALYSIS

Step 1:-LITERATURE REVIEW AND PREVIOUS FINDINGS

Preferred Banking Channel Age Group Distribution of Online Banking Users
10% ATM 2% 25% 20% 18-25 26-35 36-45 46-60 61+ 43% 18% 2% 4% 53% 23%

Internet Banking
Phone Banking Mobile Banking Branch

Gender-wise distribution
17%

Request a cheque book Payment reminders Status of cheques Female View last three transactions Checking account balance 0 5 10 15

19.11 20.92 21.06 28.15 39.97 20 25 30 35 40

Male 83%

Preferred Mobile Banking Service

Importance of service quality dimensions for i-Banking

Importance of service quality dimensions for i-banking

Fulfilment Responsiveness Efficiency Privacy/Security User-friendliness Accessibility Reliability 0 1 2 3 4 5 6

Importance of service quality dimensions for i-banking

Step 2:- RESEARCH DATA

Age-wise no. of customers
5% 9% 18-25 yrs 25-35 yrs 21% 65% 83% 35-45 yrs 45 yrs & above Male Female

Gender-wise no. Of customers

17%

occupation-wise destribution
6%1% 15% businessman service Student 39% 34% govt. empl. Housewife other

Education-wise Destribution

16% Matriculate 3% 47% Graduation Post Graduation Other 34%

5%

Income-wise Destribution(PM)
9%

19%

38%

Less than 15000 15000-25000 25000-35000 above 35000

OD,2

34%

C A 3

F I X 5 5 E D

SB ,95

Customer visit to Bank

6% 2% 15% 1-2 times 3-4 times 5-7 times more than 7 times 77%

Techno Products Awareness Ratio

YES 13%

NO 87%

Source of information about techno products

6%

Are the Canara Bank techno products usefull?

2% 33% Yes No Can't say

16%
Staff 4% Friends Brochure/AD Other 74%

65%

Purpose of mobile/internet banking

16 21 68 Account Detail Fund Transfer Online Bill Payments Online Enquiries 37 Other Services

Advantage of mobile/internet banking

7% 36% Anywhere anytime banking Fast reaction to market developments 71% 45% Overview over bank account/s Nothing

42

Disadvantage of mobile/internet banking

12 6 Security concerns / risks 65 Complicated / uncomfertable usage of devices hidden cost Nothing

57

Service offered by the bank

40

35
30 25 20 27 19 Service offered by the bank 12 8 34

15
10 5 0

Excellent

Good

Average

Satisfactory

Poor

Step 3:-Factor Analysis

1 PROXIMITY TIME SAVING REPUTATION OF BANK TECHNO SAVVY USER FRIENDLY CONFIDENTIALITY CUSTOMIZATION HASSLE IN PROCESSING AWARENESS SECURITY BEHAVIOR OF STAFF SERVICE OF PRODUCT CHEAPER DEXTERITY PRO-ACTIVENES OF BRANCH HEAD BRAND IMAGE 0.545 0.535 0.443 0.082 0.749 -0.166 0.052 0.594 0.059 0.432 0.430 -0.429 -0.219 0.162 0.001 -0.242 2 0.118 -0.161 0.667 0.073 0.383 0.430 0.362 -0.064 -0.202 0.261 -0.020 0.075 -0.046 0.515 -0.407 0.756 3 -0.326 0.378 0.178 0.586 0.151 0.304 -0.382 -0.016 0.155 0.272 -0.130 0.107 0.317 0.655 0.086 0.217 4 0.397 -0.230 0.456 -0.197 0.179 -0.111 0.057 -0.373 0.245 0.009 -0.014 0.012 0.674 -0.337 0.129 -0.427 5 -0.072 -0.039 0.005 0 -0.426 0.328 0.041 0.013 0.629 -0.151 0.450 0.211 0.123 0.009 0.582 -0.113 6 -0.106 0.025 -0.003 -0.309 -0.025 -0.039 0.503 0.021 0.358 0.025 0.038 0.558 0.380 -0.257 -0.199 0.418 7 -0.113 -0.094 -0.098 0.245 0.118 0.629 0.241 0.110 -0.269 0.581 0.183 -0.272 0.052 -0.196 0.137 -0.069

DATA INTERPRETATION
Step 1: of customer use i-banking Mostly males having age group 26-35 yrs use i-banking. Satisfaction from service they are getting, but have problem in using it. Mobile banking users are less, mostly use for checking Acc. Balance. 53% customers use debit card.

Step 2: 65% customers having age 45 and above, so bank have to give proper explanation about the products. Only 17% of the customers are female. But they may be potential customer because most of the women who do banking are well literate. 39% of the customers are govt. employee followed by 34% is in service, 15% are in business and only 5% are students. 47% customers are matriculate followed by 34% graduate and only 3% are post graduate. 38% customers are having income less than 15000per month followed by 34% having income 15000 to 25000. SB account holders are 95%, and more than half of the customers have FD. Only 13% customers know about the Canara Bank techno products. So aggressive promotion campaign is required. 74% customers come to know about the techno products through Bank staff. so promotion through bank employee is economical and favourable for bank. Out of sample of 100 customer 68 customer use Internet /Mobile Banking for account detail,42 use for fund transfer,37 use for online bill payment,21 use for online enquiries and rest for other services.

Step the(factor analysis) :- manager 3 guidance of our branch Under

Mr. A.K. Mishra we tried to identify 16 variables which a person considers for taking techno product which were:
1. Proximity 2. Time Saving 3. Reputation of the bank 4. Techno Savvy 5. User friendly 6. Confidentiality 7. Customization 8. Hassle in processing
9. Awareness 10. Security 11. Behavior of staff 12. Service of Product 13. Cheaper 14. Dexterity 15. Pro-activeness of branch head 16. Brand image

From the Factor analysis the 16 variables has been reduced to 7 Factors:Now taking 0.5 as the cut-off for deciding the variables of each factor we come to seven factors and one redundant variables:

1. Factor1 (easiness) Proximity Time saving User friendly Hassle in processing 1. Factor2 (market image) Reputation of bank Brand image 3. Factor3 (User Ability) Dexterity Techno Savvy

4. Factor4 (Service Charges) Cheaper 5. Factor5 (operational behaviour) Awareness Pro-activeness of branch head 6. Factor6 (Product Quality) Customisation Service of product 7. Factor7 (Security Aspect) Confidentiality Security The redundant variable is: Behaviour of Staff

Total variance summarized by the five factor model is 72.572%

Eigenvalue(amount of variance explained): Eigenvalue of factor1: 2.422 Eigenvalue of factor2: 2.410 Percentage of variance explained by each factor: Factor1= 15.137 % Factor2= 15.062 %

Eigenvalue of factor3: 1.596

Eigenvalue of factor4: 1.471 Eigenvalue of factor5: 1.329 Eigenvalue of factor6: 1.231 Eigenvalue of factor7: 1.153

Factor3= 9.975%
Factor4= 9.193% Factor5= 8.306% Factor6= 7.693% Factor7= 7.206%

CONCLUSION: Customers which are maximum in number (i.e. 45 & above) have only 10% contribution in online banking user. this age group people want more security thats why they dont want to use new product As most of the customers are not so well educated so they find techno product problematic. 95% customers are having SB account, so this shows that they dont use bank very frequently. awareness about the products is very low so bank should pay extra attention in the promotion of the product.

Conclusion Contd..
factor 1 explaining more percentage of variance than others so we should lay more emphasis on the variables of factor 1 while developing the marketing strategy for the techno products. We should consider other factors too according to the percentage explained by them as our total variance explained was only 72%, so more variables are there which a customer considers while taking these products from bank

RECOMMENDATIONS:1. In order to cut the operation cost of a branch and attract customer in this highly competitive industry, Canara Bank must concentrate on the popularization of its technological services. 2. As mass advertisement is not a wise idea for this non-profitable product, awareness of Canara Banks techno-product among customers should be through bank staffs. 3. To attract more customers in i-Banking, Canara Bank must introduce some integrated services (Mobile recharge, Ticket booking etc.) 4. In case of Canara Banks mobile banking, special focus should be made on the security issues of SMS banking. Developing Mobile applications supported on JAVA enabled phone increases the security of mobile banking as well as it provides the facility of using more services. 5. Pull based mobile banking services are rarely used. It should concentrate on free-of-cost mobile services more. 6. As the main barriers of ATM cum Debit cards popularity is less number of ATM and lack of ATM maintenance, the bank should consider these points.

LIMITATIONS OF THIS RESEARCH:There are several limitations of this research. These limitations should be considered while taking any decision depending on these research findings. The major limitations are given below:

1. Our data is based on Canara Banks Saraidhela branch and for time constraints, it was not possible to collect data from more branches.
2. As the branch is in semi-urban area. So, the research findings cannot be generalized for all areas. 3. The usage of Canara Banks techno product is based on customers word-of-mouth. The accuracy of such data is always verifiable.

4. There also can be biasness in survey as we were student interns some people might have taken me casually while entertaining us.

THANK YOU