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AN ASSESSMENT of INTERNET BANKING SERVICE QUALITY By AN ASSESSMENT OF INTERNET BANKING SERVICE QUALITY by MASOPHA NEHEMIA MOLAPO Short dissertation Submitted in partial fulfilment of the requirements of the degree MASTER COMMERCII in Business Management at UNIVERSITY OF JOHANNESBURG STUDY LEADER: Mr C. SCHEEPERS October 2008 JOHANNESBURG Abstract Extensive studies have been done in the past on measuring service quality where the service is delivered on a face-to-face encounter. This study assesses and measures online service quality where there is no face-to-face encounter. The service quality measures are particularly on Internet Banking service. The research problem has been stated as the lack of insight into customer perceptions on Internet Banking service quality by management in South African banks. The purpose of this study was to explore customers’ perceptions on key electronic service dimensions or factors of Internet Banking service quality. The primary objective of the study was to have an insight into how Internet Banking customers in South Africa perceive their respective banks’ performance on pre-defined electronic service quality dimensions. The secondary objective was to determine if there was any difference in Internet Banking service quality perception based on age, gender, or primary bank offering the service (service provider). Even though online shopping and Internet Banking are online services there are subtle differences between the two services. With online shopping there is a physical item that gets traded and in Internet Banking only services are traded. It is for this reason that the original E-S-Q instrument was slightly adjusted. Some of the dimensions that were excluded from the original E-S-Q instrument include flexibility, price knowledge and customization Given the purpose and objectives of the study a quantitative approach was taken as the major research approach for the study. The sampling design was a non- probability sampling one because the convenience method of sampling was used. The survey population was all online banking users, utilizing services from South African banks. A slightly revised electronic service quality (E-S-Q), a service quality measurement instrument, was used in this study. Data was collected via a web based self administered survey. The original E-S-Q instrument measured customer service quality from an online shopping experience point of view. This study aimed at gleaning respondents’ perceptions on key Internet Banking service dimensions. The study involved collecting primary data through a structured survey questioning which was followed by statistical analysis of the data. The objective was to generalise about online banking customers’ perceptions on the quality of Internet Banking i service. To collect primary data the Internet survey method was used. In essence, the combination of the quantitative approach and the survey method was utilised in this study. The findings and conclusion of the study is that the overall respondents’ perception on Internet Banking service quality was a satisfactory one. The Internet Banking service quality perceptions are not influenced by who the service provider is, age or gender. Respondents’ perceptions were neutral or indifferent on the responsiveness service quality dimension. Lastly there were five dimensions that the respondents evaluated Internet Banking service quality on, that of efficiency, performance, security, responsiveness and contact. ii Declaration of Original Work AFFIDAVIT: MASTER’S AND DOCTORAL STUDENTS TO WHOM IT MAY CONCERN This serves to confirm that I Masopha Nehemia Molapo ID Number 6112025743086 Student number 200610108 enrolled for the Qualification: M.Com Faculty: Business Management Herewith declare that my academic work is in line with the Plagiarism Policy of the University of Johannesburg which I am familiar with. I further declare that the work presented in the minor dissertation is authentic and original unless clearly indicated otherwise and in such instances full reference to the source is acknowledged and I do not pretend to receive any credit for such acknowledged quotations, and that there is no copyright infringement in my work. I declare that no unethical research practices were used or material gained through dishonesty. I understand that plagiarism is a serious offence and that should I contravene the Plagiarism Policy notwithstanding signing this affidavit, I may be found guilty of a serious criminal offence (perjury) that would amongst other consequences compel the UJ to inform all other tertiary institutions of the offence and to issue a corresponding certificate of reprehensible academic conduct to whomever requests such a certificate from the institution. Signed at Johannesburg on this 17 day of March 2009. Signature__________________________________ Name: Masopha Molapo STAMP COMMISSIONER OF OATHS Affidavit certified by a Commissioner of Oaths This affidavit conforms with the requirements of the JUSTICES OF THE PEACE AND COMMISSIONERS OF OATHS ACT 16 OF 1963 and the applicable Regulations published in the GG GNR 1258 of 21 July 1972; GN 903 of 10 July 1998; GN 109 of 2 February 2001 as amended. iii Acknowledgements First and foremost I would like to thank my saviour, the Almighty God, for His love and guidance, for granting me the strength to persevere and the ability to succeed. Secondly I would like to express my sincere gratitude to my wife Thuso, my children Khanyapa, Thato and Refiloe, for their love, understanding and patience they gave me when I could not spend quality time with them during my studies. I am also thankful to my brothers and sisters for the encouragement and support they gave me during these trying times. Lastly I would also like to express my gratitude to the following persons: • Mr. Cor Scheepers for his supervision, advice, guidance and support. • Professor Adele Thomas for her encouragement and continued drive in assisting me to complete this dissertation. • My friends, colleagues, business partners and my family for being available as a sounding board in the process of writing this dissertation. • My language editor, Mr Patrick Radebe, for his editorial work on this document. • All those who participated in the survey, without whom this study would not have been possible. • University of Johannesburg statistical services (STATKON) for assisting me in designing, hosting the online survey and completing the statistical analysis. iv TABLE OF CONTENTS Page Abstract.......................................................................................................................i Declaration of Original Work...................................................................................iii Acknowledgements..................................................................................................iv Chapter ONE..............................................................................................................1 INTRODUCTION.........................................................................................................1 1.1 Background of the study ...............................................................................1 1.1.1 Historical background .............................................................................1 1.1.2 Banking and technology..........................................................................2 1.1.3 Internet service quality ............................................................................3 1.1.4 Internet Banking......................................................................................4 1.2 Problem statement:.......................................................................................5 1.3 Objective / purpose .......................................................................................6 1.4 A brief outline of the research methodology..................................................6 1.4.1 The research methodology .....................................................................6 1.4.2 The research population .........................................................................6 1.4.3 The sampling method .............................................................................6 1.4.4 Data Collection........................................................................................6 1.5 An outline of the remainder of the dissertation..............................................7 1.6 Conclusion ....................................................................................................8 Chapter TWO .............................................................................................................9 LITERATURE REVIEW ..............................................................................................9 2.1 Introduction. ..........................................................................................................9 2.2 Traditional Services ....................................................................................10 2.2.1 Definition and characteristics of services ..............................................10 2.2.2 Traditional service quality......................................................................11 2.2.3 SERVQUAL ..........................................................................................16 2.2.4 Traditional banking service quality ........................................................17 2.3 Electronic Services (e- Services) ................................................................18 2.3.1 Definition
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