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 and characteristics of e-Services ...... 18 2.3.2 Electronic Service quality...... 20 2.3.3 Understanding and measuring e-Service quality...... 23 2.4 Online systems quality ...... 24 2.4.1 Definition of online systems quality ...... 24 2.4.2 Characteristics of online systems quality ...... 25
v 2.4.3 Measuring online systems quality ...... 26 2.5 Internet Banking...... 30 2.5.1 Definition of Internet Banking...... 30 2.5.2 Characteristics of Internet Banking ...... 30 2.5.3 Internet Banking Service quality...... 33 2.5.4 Measuring Internet Banking service quality...... 35 2.6 Conclusion ...... 35 Chapter THREE ...... 38 RESEARCH METHODOLOGY...... 38 3.1 Introduction ...... 38 3.2 Research design...... 38 3.3 Research population ...... 39 3.4 Sampling...... 41 3.4.1 Sampling methodology...... 41 3.4.2 Sample size ...... 42 3.5 Research instrument...... 43 3.6 Data Collection...... 44 3.7 Data Analysis...... 45 3.8 Ethical Considerations ...... 46 3.9 Conclusion ...... 47 Chapter FOUR ...... 48 PRESENTATION OF RESULTS ...... 48 4.1 Introduction...... 48 4.2 Missing data...... 48 4.3 Descriptive Statistics...... 48 4.4 Principal Component Analysis ...... 51 4.5 Reliability and Validity Tests ...... 56 4.6 Internet Banking service quality measures ...... 58 Chapter FIVE...... 69 INTERPRETATION OF RESULTS ...... 69 5.1 Introduction...... 69 5.2 Findings ...... 69 5.3 Findings linked to the literature ...... 70 5.3.1 Characteristics of service...... 70 5.3.2 Responsiveness in service recovery...... 70
vi 5.3.3 GAPS model ...... 71 5.3.4 Modified theoretical model ...... 72 5.4 Limitations to the study ...... 73 5.5 Conclusion ...... 73 Chapter SIX...... 74 CONCLUSION AND RECOMMENDATIONS ...... 74 6.1 Summary of research objectives and major findings...... 74 6.2 Recommendations ...... 75 6.3 Suggestions for further study ...... 76 REFERENCES...... 77 APPENDICES...... 81
vii List of Tables Page
Table 2.1: WebQual 4.0 Instrument ...... 27 Table 2.2: E-S-Q instrument ...... 28 Table 2.3:E-RecS-Qual...... 29 Table 2.4: Retail banking services and distribution channels...... 32 Table 2.5: Service dimensions and related categories...... 35 Table 4.1: KMO and Bartlett’s Tests ...... 51 Table 4.2:Communalities of the twenty four variables...... 52 Table 4.3: Total Varience explained...... 53 Table 4.4: Rotated Factor Matrix...... 55 Table 4.5: Cronbach’s Alpha scores ...... 57 Table 4.6: Potential Maximum Validity Coefficient ...... 57 Table 4.7: Normality Test...... 58 Table 4.8: ANOVA T-Test for Age...... 66 Table 4.9: ANOVA T-Test for Gender ...... 67 Table 4.10:ANOVA T-Test for primary bank ...... 68
viii List of Figures Page
Figure 2.1: GAPS model of service quality ...... 13 Figure 2.2: Extended GAPS model if service quality...... 14 Figure 2.3:Possible levels of customer expectations ...... 15 Figure 2.4:Inherent characteristics of systems...... 19 Figure 2.5: Conceptual model for understanding quality...... 20 Figure 2.6: e-Service quality model...... 22 Figure 2.7: Conceptual model for e-SQ ...... 24 Figure 2.8: Website Portal Quality ...... 25 Figure 2.9: Changes in the banking sector ...... 31 Figure 2.10:Internet Banking perceived qulaity model ...... 34 Figure 3.1: Consumer households using Internet Banking ...... 41 Figure 5.1: Initial and modified theoretical model...... 72
Appendices
Appendix I: Internet Banking Service Quality Frequency Table ...... 81 Appendix II: Descriptive Statistics...... 82 Appendix III:Normality Test results ...... 83 Appendix IV: Reliability Test results...... 85 Appendix V:New Service Dimensions Labels ...... 89 Appendix VI:The Kruskal-wallis Test...... 91 Appendix VII:Survey Covering Letter...... 92 Appendix VIII:The Survey Questionnaire...... 93
ix Chapter ONE INTRODUCTION
1.1 Background of the study The Internet emerged as a key competitive arena for the future of financial services hence it came as no surprise when banks and brokers flocked to the Web. The use of the Internet makes it possible for banks to offer a number of home banking services 24 hours a day (Möls, 1998:331). According to Sayar and Wolfe (2007:123) the term Internet Banking is used to describe the case where banks’ customers conduct banking transactions on the Internet.
1.1.1 Historical background According to Singh (2004:187) banking in South Africa has its roots in both the British and Dutch traditions. The British and the Dutch influence led to the existence of Standard Bank and Nedbank respectively. The year 1998 saw the consolidation of United, Volskas and TrustBank into a single brand as Absa adopted a new corporate identity. As a result, four major banks, Standard Bank, Nedbank, Absa and First National Bank emerged. These banks dominate the South African retail banking sector (Singh, 2004:188).
Internet Banking in South Africa started in 1996. The start was fairly slow, but consumers were attracted to the convenience, safety and low costs of online banking. Absa was the first to offer online services and was followed by Nedcor with Standard Bank, First National Bank and Mercantile Bank being the last to follow (Singh, 2004:190). Below are some of the key milestones in the history of Internet Banking:
• May 1995: Wells Fargo (USA), already on the Web, offered online access to statements • November1995: NBS became the first South African bank on the Web, offering only a brochure on its site, with no clickable links. • October 1996: Absa became the first South African bank to offer personal banking details online. • February 1997: Nedbank became the first South African bank to allow online transactions.
1 • December 1997: Wells Fargo became the first online banking service to sign- up 400 000 customers. • July 2001: South Africa’s first standalone bank 20Twenty was launched with the backing of Saambou and 40 000 customers signed up in the first six months. • July 2003: UK based Standard Chartered Bank signed an agreement to acquire 20Twenty as part of its entry into the retail banking space in South Africa. • May 2004: Absa reached the 450 000 online banking customer mark (Goldstuck, 2004:23).
1.1.2 Banking and technology The Internet emerged as a key competitive arena for the future of financial services hence it came as no surprise when banks and brokers flocked to the Web. The use of the Internet makes it possible for banks to offer a number of home banking services 24 hours a day (Möls, 1998:331). The Internet is not merely a medium of information delivery in a passive sense. Due to the necessary participation of the consumer in using the Internet, it also serves as a means of service delivery. The Internet, along with other means of home banking services, has dramatically changed the distribution channel of the structure of banks. New partnerships and electronic commerce product announcements have become a daily routine for financial services industry. The momentum to move to Web-based business models is increasing and the traditional distinction amongst the service providers is blurring (Sweeny & Lapp, 2004:276). Singh (2004:187) supports this notion by stating that in South Africa business is being revolutionised every day as a result of the influence of the Internet. He further maintains that organisations have become leaner, meaner, more profitable and more competitive. Some existing organisations have moved from brick-and-mortar format to clicks-and-mortar format, whilst others have adopted a more conservative approach and have both physical and virtual presence.
Bradley and Steward (2003:272) are of the opinion that the banking sector, which has been characterised by its tried and tested processes of service delivery, is greatly affected by the environmental change. The authors assert that competition is escalating for both traditional players and new entrants because of deregulation, changing consumer behaviour and needs, globalisation and Information Technology.
2 The financial sector is one of the business areas that has been most affected by the spread of new technologies, particularly the Internet. These technologies have not only had a bearing on the internal organizational processes, but have also had a sizeable influence on the way in which financial institutions interrelate with their customers (Flavian, Guinalίu & Torres, 2006:406). The Internet has been accepted as a new addition to the traditional way of doing business. Banking organisations have progressed a long way in the use of the Internet, with most banks offering transaction services over the Internet (Sohail & Shaikh, 2008:58). O’Neill, Palmer and Wright (2003:281) reckon that the winners in the online search market space will be those who consistently provide compelling, user friendly and responsive online service experiences. They further suggest that specific research on the identification of attributes that work together to create effective online services experience is lacking.
1.1.3 Internet service quality Sweeney and Lapp (2004:276) argue that following the proliferation of e-commerce and the Internet there has been an increasing interest in the evaluation of Websites. Ibrahim, Joseph, and Ibeh (2006:476), add that the challenging business environment in the financial services market in the UK and beyond has also resulted in more pressure on the banks to develop and utilise alternative channels with a view of attracting more customers and improving customer perceptions. According to Ibrahim et al. (2006:476) “not enough is known regarding how customers perceive and evaluate electronically delivered services”. Service quality research has overwhelmingly focused on customer expectations. The importance-performance analysis (IPA) approach is built around customer perceived importance of quality attributes and attributes of performance, the interplay of which suggests strategies for service improvement and satisfaction management (Ibrahim et al., 2005:479).
Rowley (2006:339) is of the view that service experience associated with electronic environments is very different from a service experience that is mediated through a human service agent. Zeithaml (2002:135) defines electronic service quality (E-S-Q) as an extent to which a Website facilitates efficient and effective shopping, purchasing and delivery. Zeithaml’s (2002:135) research on electronic service quality indicates that E-S-Q has seven dimensions that form two scales: a core E-S-Q scale and a recovery scale. Four dimensions - efficiency, reliability, fulfilment and privacy form the
3 core E-S-Q scale that can be used to measure customer perceptions of service quality. According to Zeithaml (2002:136) the other three dimensions become salient when online customers run into problems. These three dimensions are responsiveness, compensation and contact. These three dimensions were conceptualised by the research as constituting E-S-Q recovery. Jun and Cai (2001:276) identified seventeen dimensions under three categories of Internet Banking service quality. These dimensions included:
• Customer service quality: reliability, responsiveness, competence, courtesy, credibility, access, communication, understanding, collaboration and continuous improvements • Online system quality: content, accuracy, ease of use, timeliness, aesthetics, and security. • Banking service product quality: one dimension of product variety.
Broderick and Vachirapornpuk (2002:332) in their study on Internet Banking service quality agreed that the management implication for their study arises in two areas: firstly within the service interface and secondly, with the management of increased customer role. From a service setting point of view they argued that at the outset customers might use service setting cues more in judging service quality, because of the lack of tangible cues that are available in Internet formats. Broderick and Vachirapornuk (2003:333) further purport that one feature of customer interaction is not confined to Internet transactions, but involves a lot of other interfaces. Customer scripts also operate between the service setting and the service encounter, as when customers seek to solve problems with service setting by contacting personnel. This study will focus on assessing Internet Banking service quality dimensions. From the set of identified dimensions the study will establish how the South African banks are performing as perceived by their customers.
1.1.4 Internet Banking Internet Banking, at a basic level, is defined as the setting up of a Web page by a bank to give information about its products and services. At a more advanced level it is defined as provisioning of facilities such as accessing accounts, funds transfer and buying financial products or services online (Sathye, 1999:524). According to Sayar
4 and Wolfe (2007:123) the term Internet Banking is used to describe the case where banks’ customers conduct banking transactions on the Internet. In the contemporary context, this mainly implies the usage of computers, and digital TV’s for accessing internet branches.
Internet Banking refers to a service offered by banks that allows account holders to access their account data via the Internet. In order to take advantage of the Internet Banking, an account holder would need to meet several technological requirements, such as having a personal computer with Internet access and a web browser. If these conditions are satisfied Internet Banking can be performed from anywhere in the world. Thus, Internet Banking facilitates direct access to account details; enables transfer of funds; allows for multiple bills payments, and performs an array of other transactions (Sayar & Wolfe, 2007:124).
1.2 Problem statement: The challenging business environment in the financial services market resulted in more pressure on banks to develop and utilise alternative delivery channels, with a view to attracting more customers and improving customer perceptions and encouraging loyalty. Internet Banking is among the channels that were developed and implemented. Banks have invested heavily in introducing and making Internet Banking service functionality rich, with an objective of improving customer satisfaction and loyalty, ultimately contributing positively to income and profits.
The challenge for teams of software designers, marketers and experts in human- computer interaction, (amongst others), is to create a business model that not only increases productivity and enhances bottom line performance, but one that also seeks to add value for customers, employees and suppliers alike (O’Neill et al., 2003:293).
Research Problem: Management in South African banks, do not have an insight into how their customers perceive and evaluate Internet Banking service quality.
5 1.3 Objective / purpose This study aims to explore customers’ perceptions on Internet Banking service quality dimensions or factors. This will be done with the following objectives in mind: • Have an insight into how Internet Banking customers in South Africa perceive and evaluate their respective banks’ performance on pre-defined Internet Banking service quality dimensions. • Determine if there are any differences in perceptions of Internet Banking service quality based on gender, age or primary bank.
1.4 A brief outline of the research methodology
1.4.1 The research methodology The survey method was used to collect primary data for this study. Electronic interactive media was employed, as respondents were contacted via e-mail and directed via a URL to take a self-administered questionnaire online. Zikmund (2003:198) defines electronic interactive media as “a communication media that allows an organization and the audience to interact using digital technology”. This method was chosen as it was inexpensive and could reach a wide sample of the survey population with ease.
1.4.2 The research population The survey population was a sample of customers that do banking online with any of the South African banks.
1.4.3 The sampling method Convenience sampling was used to sample the population. This was a non-probability sampling design
1.4.4 Data Collection Data was collected using an Internet survey. The survey was a self-administered questionnaire posted on a web-site. This made it possible to reach a large number of respondents and secure confidential answers quickly and cost-effectively.
6 Respondents were invited by e-mail to participate in the survey. This ensured that the respondents’ feedback was captured at the time when the responses were submitted.
1.5 An outline of the remainder of the dissertation Chapter one: Introduction This chapter provides a background to the study, in which the environment within which the research is undertaken is described. Concepts such as Internet Banking and service quality are introduced. The problem statement, which flows from the background, is also stated in this chapter. The objective(s) of the research in addressing the research problem are then identified
Chapter 2: Literature review The chapter reviews related literature on Internet Banking. The literature offers guidance to the tentative solutions to the problem. It addresses concepts such as traditional services, electronic services, online system quality, Internet Banking services and instruments like SERVQUAL and E-S-Q for quality of service measurements.
Chapter 3: Research Methodology This chapter will explain the research design chosen and the rationale behind such a choice. It will focus on the research population, the sampling techniques to be used and the sample size. It will further elaborate on the research instruments used and data collection and analysis including validity and reliability of the research instrument.
Chapter 4: Presentation of research results The chapter will focus on providing the main findings of the study, the insights gained in relation to the research objectives.
Chapter 5: Interpretation of research results
The chapter will analyse and interpret research results and link them to the reviewed literature. The chapter will conclude by giving a statement on limitations of the study.
7 Chapter 6: Conclusions and recommendations The chapter will give a summary of the research objectives and major findings. Recommendations and suggestions for further research will also be outlined in this chapter.
1.6 Conclusion Chapter one served as an introduction to the study, outlining the problem statement, the research objectives and the research methodology were discussed. In chapter two a review of the related literature will be done. The review will include an explanation of what service quality, service and electronic service are. The chapter will undertake to offer insights into service quality dimensions. The other concepts to be discussed include SERVQUAL and E-S-Q as instruments used to measure traditional service quality and electronic service quality respectively.
8 Chapter TWO
LITERATURE REVIEW
2.1 Introduction. O’Sullivan, Edmond and ter Hofstede (2002:3) define a service in its simplest form, as an action which involves transferring value, performed by one entity on behalf of the other. According to Zeithaml, Bitner and Gremler (2006:6) the broad definition of service implies intangibility as a key determinant of whether an offering is a service or not. The International Organization for Standardization (ISO) describes a service as part of the total production concept. A service is generated by a process and the customer outcome is created in this process. In the case of a service as compared to a product the customer is present and affects the results in terms of added value and quality (Edvardsson, 1998:142).
Service quality can be viewed in a structured and integrated way called the GAPS model of service quality. Zeithaml, Bitner and Gremler (2006:33) depict the GAPS model as consisting of the customer and provider gaps. The customer gap is the difference between the customer expectations and perceptions. To close the all important gaps, the GAPS model suggests that the other four gaps, referred to as provider gaps, need to be closed. According to Zeithaml et al., (2006:34) the gaps occurring within the organization providing the service include: • Gap1 is about not knowing what customers want. • Gap2 refers to not selecting the right service designs and standards. • Gap3 refers to not delivering to service designs and standards. • Gap4 is about not matching performance to promise
The literature review will look into the definition of traditional service, service quality, banking service quality and service quality measurements. This will then lead to a discussion on electronic service, service quality and electronic service measurements. The majority of definitions for electronic service use the Internet and/ or workflows as a conduit to new revenue or task completion. Web services have also been described as an aggregation of functionality with a single façade and published for the purpose of use (O’Sullivan et al. 2002:3). To conclude the literature review an important
9 discussion on online systems will be undertaken. Internet Banking service will be defined and its characteristics outlined.
2.2 Traditional Services
2.2.1 Definition and characteristics of services Zeithaml et al. (2006:4) simply describe services as deeds, processes and performances, whilst Baron and Harris (2003:4) concur that services are processes that occur over time. There are three fundamental aspects of service: process, people, and physical evidence. Compatible to the simple definition is that services include all economic activities whose output is not a physical product and is consumed at the time it is rendered. In the broad definition of service, intangibility is the key determinant of whether an offering is, or is not a service (Baron & Harris, 2003:5). According to Zeithaml and Bitner (1996:5) while the statement on intangibility being the key determinant of service is true, it is also true that few are purely intangible or totally tangible. Services tend to be more intangible than manufactured products. The latter products tend to be more tangible than services. Bateson and Hoffman (1999:9) agree that it is difficult to define a pure good product or service. A pure service assumes that there is no “goods” element to the service that the customer receives. In reality most services contain some “goods” element in them (Bateson & Hoffman, 1999:9). Zeithaml et al. (2006:21) summarises the characteristics of services that distinguish it from products as intangibility, heterogeneity, simultaneous production and consumption as well as perishability.
• Intangibility The distinguishing characteristic of services is intangibility because services are performances or actions rather than objects, they cannot be seen, felt, tasted or touched in the same manner one can touch and feel physical goods (Zeithaml et al. 2006:22). Baron et al. (2003:19) indicate that the intangibility of services often increases the risk for the purchaser. Some services are perceived to be riskier than others depending on whether they are high in search, experience, and credence factors. Baron and Harris (2003:19) describe these factors as: o A service that is high in search factors is the one about which customers can get some (prior) information as to what they will receive. o A service that is high in experience factors is one that customers must try out (experience) before they can decide whether or not it is a great deal.
10 o A service that is high in credence factors is one that is difficult to evaluate even after experiencing it. • Heterogeneity No two services will precisely be alike because they are performances frequently rendered by humans (Zeithaml et al., 2006:22). Baron and Harris (2003:20) say organisations providing services know that no two service provisions are exactly the same, whatever the attempts to standardise them. The quality of any service will vary when offered by different employees, probably at different times of the day.
• Simultaneous rendering and consumption To receive the benefit of the service, the consumer must be part of the system. It thus becomes impossible to store a service (Bateson & Hoffman, 1999:12). This situation of simultaneous rendering and consumption means that the consumer is present while the service is being rendered and thus views and may even take part in the rendering process. In simultaneously rendering and consumption of service, customers will interact with one another during the service rendering process and thus may affect one another’s experiences (Zeithaml et al., 2006:23). Baron and Harris (2003:20) refer to this characteristic of service as inseparability.
• Perishability According to Zeithaml et al. (2006:23) perishability refers to the fact that services cannot be saved, stored resold or returned.
2.2.2 Traditional service quality Imrie, Cadogan and McNaughton (2002:10) describe service quality as an antecedent of consumer assessment of value. Examples of behaviours motivated by favourable service quality assessment are re-purchase intentions, loyalty and word of mouth. Kang and James (2004:267) point out that the construct of service quality as conceptualised in the services marketing literature centres on perceived quality, defined as a consumer’s judgement about an entity’s overall excellence. Kang and James (2004:268) further suggest that the “perceived service quality model” replaces the product features of a physical product in the consumption of services. The technical aspect (what service is provided) and the functional aspect (how the service is provided) are the two dimensions that Kang and James (2004: 268) identified. 11 Santos (2003:234) argue that there are two main conceptualisations of service quality that exist – one based on disconfirmation approach, and the other based on the performance-only approach. Oliver (1980:461) points out that expectations are thought to create a frame of reference about which one makes a comparative judgement. This means that outcomes poorer than expected (negative disconfirmation) are rated below this reference point, whereas those better than expected (a positive disconfirmation) are rated above the base. Service quality was therefore understood to be a measure of how well the service level delivered matched customer expectations.
Bateson and Hoffman (1999:340) argue that the two concepts of customer satisfaction and service quality are intertwined. One plausible explanation is that satisfaction assists customers in revising service quality perceptions. Bateson and Hoffman (1999:340) describe the logic for this position as follows: • Consumer perception of the service quality of a firm with which no prior experience exists is based on the consumer’s expectations. • Subsequent encounters with the service firm lead the consumer through the disconfirmation process and further revise the perceptions of service quality. • Each additional encounter with the service firm further revises or reinforces service quality perceptions. • Revised service quality perceptions modify future consumer purchase intentions towards the service firm.
Baron and Harris (2003:136) describe perceived service quality as the degree and direction of the gap between consumer perceptions and expectations of service. In the GAPS model as described by Zeithaml et al. (2006:46) this refers to the customer gap 5 - the gap between the expected service and the perceived service. Baron and Harris (2003:136) further describe consumer satisfaction as a function of the similarities between the consumers’ expectations and the perceived performance of the purchaser.
12
Figure 2.1: The GAPS model of Service quality Source: Adapted from Parasuraman (2004:46)
The conceptual model of service quality as outline in Figure 2.1 was based on the insights from extensive focus group research with customers and an in-depth interview with executives in various sectors. The primary thesis of their model is that the service quality shortfall Gap 5 (the gap between customers’ service expectations and perceptions) is a result of a series of shortfalls within the service provider’s organisation (Parasuraman, 2004:45). This then means that improving the quality experienced by customers requires diagnosing the causes of and correcting the internal deficiencies (Gaps 1-4).
Zeithaml et al. (2006:33) describe the customer gap (service quality gap) as the difference between the customer expectations and perceptions. Closing the gap between what customers expect and what they perceive is critical in delivering quality service; it also forms the basis for the GAPS model (Zeithaml et al., 2006:34).
The GAPS model in Figure 2.1 suggests that the four provider gaps occur within the organisation. Zeithaml et al. (2006:35) describe the four gaps as: • Gap 1 not knowing what customers want • Gap 2: selecting the right service designs and standards. • Gap 3 delivering to service designs and standards. • Gap 4 matching performance to promises.
13
Figure 2.2: Extended GAPS Model Source: Adapted from Parasuraman (2004:46) . The extended Gaps model as shown in Figure 2.2 above enumerates for each general gap a list of organisational deficiencies that could contribute to the gap. The model is a useful starting point for diagnosing and closing the gaps (Parasuraman, 2004:47). The GAPS model has emerged as the most popular measurement approach of service quality and has been extensively applied in different service sectors. The GAPS model has however been criticised on methodological and conceptual grounds (Mukherjee & Nath, 2005:175). Mokherjee and Nath (2005:181) concluded that while the GAPS model provided a good starting point for analysis, problems with “average” approach to aggregate service quality measures arise when gaps have different signs and positive and negative deviations cancel each other out. This is realistic only when dimensions are compensatory. For an example a customer who is dissatisfied with billing accuracy is unlikely to feel compensated by its speedy arrival
Zeithaml et al. (2006:84) point out that services are heterogeneous in nature in that performance may vary across providers, employees from the same provider delivers the service differently. The extend to which customers recognise and are willing to accept this variation is called the zone of tolerance as defined by Zeithaml et al. (2006:85). This is represented by the area between the desired service and the adequate service. The zone of tolerance differs from customer to customer. Some
14 customers have narrow zones of tolerance, requiring a tighter range of service from providers and others have a greater range of service (Zeithaml et al., 2006:86).
According to Zeithaml et al. (2006:81) customer expectations are beliefs about service delivery that serve as standards or reference points against which performance is judged. The level of expectation can vary widely depending on the reference point the customer holds. These can start with the highest – desired service to the lowest – minimum tolerable expectations (Zeithaml et al. 2006:83).
Figure 2.3: Possible levels of customer expectations Source: Adapted from Zeithaml, Bitner and Gremler (2006:82)
In the levels of customer expectations model in Figure 2.3, the possible levels of customer expectations can be explained as follows: • Ideal expectations or desires - This is the highest level of expectation, the wished for level of performance and a blend of what the customer believes “can be” and “should be” (Zeithaml et al., 2006:83).
15 • Normative (“Should”) expectation: an example of this expectation would be: as expensive as this restaurant is, it ought to have excellent food for service. • Experience-based norms: this refers to an expectation based on past experience. For example, “In most cases this restaurant is very good, but when it gets busy the service is slow”. • Acceptable expectation: an example of an acceptable expectation would be: “I expect this restaurant to serve me in an adequate manner”. • Minimum tolerable expectation: This is the extreme side of the desired service as it relates to the bottom level of performance acceptable to the customer (Zeithaml et al., 2006:83).
2.2.3 SERVQUAL SERVQUAL is a multidimensional scale used to capture customer perceptions and expectations of service quality. The SERVQUAL scale was first published in 1988 and has undergone numerous improvements and revisions since then. The scale currently contains twenty one perception items that are distributed across five service quality dimensions (Zeithaml et al., 2006:154). Parasuraman (2004:46) indicates that building on key insights from qualitative research, the research team launched a series of empirical studies to develop, test and refine a scale for measuring service quality as perceived by customers. These qualitative studies gave birth to SERVQUAL, a five dimensional, two part instrument. The first and the second parts measure customer expectations and perceptions respectively along a variety of service attributes grouped into five dimensions of reliability, responsiveness, assurance, empathy and tangibles. The SERVQUAL instrument, though very valuable, is believed to be just one approach for assessing service quality (Parasuraman, 2004:48).
One criticism of SERVQUAL has been the point that the instrument mainly focuses on the service delivery process (Kang & James, 2004:266). The other criticism by Oppewal and Vriens (2000:154) is that SERVQUAL does not provide good measures of the importance of service attributes and dimensions. SERVQUAL grounded in the GAPS model, measures service quality as the calculated difference between customer expectations and the performance perceptions of a service encounter. Cronin and Taylor (1992:56) challenged this approach and developed the SERVPERF scale which directly captures customers’ performance perceptions in comparison to
16 their expectations of service encounter. A qualitative method of measuring service quality includes techniques such as interviews, focus groups, customer role-play and observation. These provide insight into the mindset of customers and are highly subjective. Quantitative surveys can be administered either face-to-face or customers may be left to do these on their own. The confirmation-disconfirmation paradigm has been extensively incorporated into surveys (O’Neill et al., 2003:283). O’Neill et al. (2003:284) further suggest that as consumers evaluate the levels of the service’s performance, they typically cannot help but compare that performance to what they expected. In turn, these expectations provide a baseline for the assessment of a customer level satisfaction.
2.2.4 Traditional banking service quality Using the critical incident technique Johnston (1995:65) made the following conclusions in his study on the determinants of service quality satisfiers and dissatisfiers amongst bank customers: • Some determinants of quality predominate over others. • For the personal customer of the bank, the main sources of satisfaction are attentiveness, responsiveness, care and friendliness. The main sources of dissatisfaction are integrity, reliability, responsiveness, availability and functionality. • The sources of dissatisfaction are not necessarily the obverse of sources of satisfaction. • The intangible aspects of the staff-customer interface have significant effects, both negative and positive, on service quality. • Responsiveness is the crucial determinant of quality, as it is the key component in providing satisfaction and the lack of it is a major source of dissatisfaction. • Reliability is predominantly a source of dissatisfaction not satisfaction.
Johnston (1995:62) in his study used eighteen service quality attributes: attentiveness, responsiveness, care, availability, integrity, friendliness, courtesy, communications, competence, functionality, commitment, access, flexibility, aesthetics, cleanliness, comfort and security.
17 Bahia and Natel (2000:86) used an alternative measure on service quality by proposing seven dimensions of which some were covered by the SERVQUAL scale. These included effectiveness and assurance, access, price, tangibles, place, service portfolio and reliability. Oppewal and Vriens (2004:158) used twenty eight attributes including four service quality dimensions to evaluate service quality. The four dimensions included accessibility, competence, accuracy and tangibles.
2.3 Electronic Services (e- Services)
2.3.1 Definition and characteristics of e-Services Buckley (2003:455) defines e-Service as the electronic provision of a service to customers whilst Santos (2003:234) describes e-Service as the provision of consumers with a superior experience with respect to the interactive flow of information. Rowley (2006:341) on the other hand brings in a different perspective of e-Service by defining it as deeds, efforts or performances whose delivery is mediated by information technology (including the Web, information kiosks and mobile devices) and such includes the service element of e-tailing, customer support , service and service delivery. In e-Service the customer’s interaction or contact with the organisation is through the technology, such as Websites. e-Service encounter is the initial landing on the home page until the requested service has been completed or the final product has been delivered and is fit for use (Bucley, 2003:456). During an e- Service encounter, customers have to rely on only two senses, that of sight and sound, whereas the traditional service experience can use all senses. e-Service is described as a relative impoverished experience, due to the absence of face to face interaction, which is seen as central to relationships development (Rowley 2006:341). From all the definitions of e-Service discussed the following characteristics standout: • There is an interactive flow of information between the customer and the service provider. • This customer interaction is mediated through some kind of information technology. • The service is a virtual one and there is no face-to-face interaction. • Customers have to rely on only two senses that of sight and sound during the interaction.
18 Rowley (2006:351) concludes in his research on e-Service literature with a conceptual perspective or model that summarises the issues that both characterise e-Service, and are also open to design by the organisation delivering the service. The model as outlined in Figure 2.4 defines the inherent characteristics of e-Service systems. According to Rowley (2006:352) the inherent characteristics of e-Service delivery systems focus on three potential elements • Website design, including layout, aesthetics and navigation • Information creation, selection and quality • Dialogue and learning design There has been considerable research and practice development in the area of Website design, whilst research on information quality is relatively limited (Rowley, 2006:352). The model as described by Rowley (2006:352) concludes that customer perceptions of e-Service are driven by Website features, security, communications, reliability, customer support, responsiveness, information accessibility, delivery and personalisation.
Figure 2.4: Inherent characteristics of systems Source: Adapted from Rowley (2006:352)
19 The first box in Figure 2.4 summarizes the issues that both characterise e-Service and are also open to design by the organisation delivering the service. The second box includes differentiating factors. This means that one service system and experience are different from the next in terms of scope and nature. The third box is concerned with the customers’ perceptions of the experience of e-Service and derives from work on e-Service quality dimensions. It summarizes and identifies some of the dimensions that customers use in their evaluation of e-Service experiences (Rowley, 2006:352).
2.3.2 Electronic Service quality
Figure 2.5: Conceptual model for understanding and improving quality Source: Adapted from Zeithaml (2002:136)
Zeithaml (2002:137) identifies the four key dimensions of quality as efficiency, reliability, fulfilment and privacy and then defines electronic service quality (e-SQ) as the extent to which a Website facilitates effective and efficient shopping, purchasing and delivery. Zeithaml's research (2002:136) on quality dimensions found out that customer evaluative criterion for e-SQ existed at various levels of specificity ranging from concrete cues to perceptual attributes and from broader dimensions to higher- order abstraction as indicated in the conceptual model for understanding and improving quality in Figure 2.5. The four key dimensions are:
20 1. Efficiency – refers to the ability of customers to get to the Website, find their desired product and information associated with it and check-out with minimal effort. 2. Fulfilment incorporates accuracy of service promises, having products in stock and delivering the products in the promised time. 3. Reliability is associated with the technical functioning of the site, particularly the extent to which it is available and functioning properly. 4. The privacy dimension includes assurances that shopping behaviour and information is secured.
The recovery-SQ scale includes the personal service aspects: 1. Responsiveness measures the ability of a company to provide appropriate information to customers when a problem occurs, have mechanisms for handling returns and providing online guarantees. 2. Compensation is the dimension that involves receiving money back. 3. Contact points. So that customers should be able to speak to a live service agent in times of problems.
According to Santos (2003:238) there are two dimensions that determine e-Service quality, the incubative and active dimensions as indicated in the model of e-Service in Figure 2.6. The incubative dimension lists the determinants of a Website daily hit rate and the time length any visitor stays on the Website as ease of use, appearance, linkages, content and layout. Santos (2003:239) defines these determinants as follows: • Ease of use is defined as how easy the Website is for customers to conduct external search in cyberspace and internal navigation and search within the Website. • Appearance is defined by Santos (2003:239) as the proper use of colour, graphics, images and animations, together with the appropriate size of the Web pages. Appearance is usually the first thing observed by Web users. • Linkages refer to the number and quality of links that a Website offers. • Structure and layout refers to the organisation and presentation of a Website’s content and information. This structure is characterised by simplicity clarity, consistent layout, good use of frame, provision of a site map that allows users to skip sections that are of no interest, a clear listed menu, and the company
21 logo being present are some of the key factors that impact on structure and layout. • Content refers to the presentation and layout of factual information and function on a Website.
Figure 2.6: A model of e-Service quality Source: Santos (2003:239)
Santos (2003:241) defines the active dimensions in the model as the good support, fast speed, and attentive maintenance that a Website can provide to its customers. The active dimensions consist of reliability, efficiency, support, communications, security and incentive. Santos (2003:248) upholds that the active dimension must be achieved consistently throughout the period that a Website is active to increase customer satisfaction. These dimensions are described as follows: • Reliability refers to the ability to perform the promised service accurately and consistently, including frequency of updating the Website, prompt reply to customer enquiries, and accuracy of online transactions. • Efficiency refers to the speed of downloading, search, and navigation. • Support is constituted by the technical help desk, user guide, help pages, frequently asked questions (FAQ’s) and demos.
22 • Communications is defined as keeping the customers properly informed and communicating with them in a language they can understand. Communications in e-Service consists of online communications (e-mails and chat rooms) and traditional communications methods (telephone, fax and postal mail. • Security refers to the freedom from danger, risk, or doubt (including financial insecurity) during the service process. • Incentive is the encouragement given by Web providers to consumers to browse and use the Website.
2.3.3 Understanding and measuring e-Service quality Parasuraman, Zeithaml and Malhorta (2005:230) on their research on electronic service quality (E-S-Q) a multiple item scale for assessing electronic service quality came up with the five managerial implications: • Efficiency and fulfilment were the most critical and important facets of the Website service quality. Of the four E-S-Q dimensions, customers’ assessments of a Website on these two dimensions had the strongest influence not only on the overall quality perceptions but also on perceived value and loyalty intentions. • The systems availability facet of the Websites was also critical contributor to customers’ perceptions of overall quality, value and loyalty intentions. • Privacy was the least critical of the four E-S-Q dimensions • The three service recovery dimensions (responsiveness, compensation, and contact) and the perceptual attributes they contain imply service aspects that mirror aspects of traditional service quality (ready access to company personnel, solving customers’ problems) • The E-S-QUAL and electronic recovery of service quality ( E-RecS-Q) are generic scales, intended for obtaining a global (as opposed to transaction- specific) assessment of a Website service quality.
The dimensions on which customers assess electronic service quality (e-SQ) are: access, ease of navigation, efficiency, customization/personalization, security/ privacy, responsiveness, assurance/ trust, price knowledge, aesthetics, reliability, flexibility and efficiency. Each of the mentioned general dimensions has a number of specific attributes (Parasuraman, 2004:50). Parasuraman (2004:50) adds that the
23 qualitative research done suggest a conceptual “GAPS” model for electronic service quality (e-SQ) as shown in Figure 2. 7.
Figure 2.7: Conceptual GAPS model for E-S-Q Source: Adapted from Parasuraman (2004:51)
2.4 Online systems quality
2.4.1 Definition of online systems quality According to the technology acceptance model (TAM) users’ decisions to adopt a new technology are determined by their attitudes towards two factors related to the technology: ease of use and usefulness (Pikkarainen, Pikkarainen, Karjaluoto & Pahnila 2005:214). Perceived ease of use refers to the degree to which a person believes that using a particular system would be free of effort and perceived usefulness refers to the degree to which a person believes that using a particular system would enhance his or her job performance (Yang & Fan, 2004:304). By implication online systems quality refers to satisfaction delivered by the system’s ease of use and usefulness.
24 2.4.2 Characteristics of online systems quality
Figure 2.8: Website portal quality Source: Adapted from Zeithaml et al. (2006:83)
According to Bauer, Hammerschmidt and Falk (2005:172) e-banking portal quality cannot be described as a one dimensional customer rating. It represents a multi- dimensional construct that is composed of partial quality judgements with regard to the portal’s diverse service categories as shown in Figure 2.8. The criteria portal users perceive to be essential for an assessment of quality can be reduced to a small number of fundamental dimensions (Bauer et al., 2005:170). The validated measurement model of portal quality as concluded by the Bauer et al. (2005:171) research illustrates how the portal quality dimensions can be managed. The first dimension the factor “security” is predominantly related to the quality of the online system whilst “trustworthiness is mainly dependent on the reliability and credibility of the provider.
The Web is an information providing medium that allows a range of activities that add to the customer experience (Sweeney & Lapp, 2004:277). Sweeney and Lapp (2004:285) in their research on service quality encounters identified the following quality dimensions:
25 1. Ease of use which deal with the following factors: • Instructions and explanations on the web • Structural design • Navigational systems 2. Content • Depth of content • Correctness and accuracy of the content • Presentation appropriateness 3. Process • Control of the process • Speed
The empirical results from the Bauer et al. research (2005:172) support the understanding of portals as integral solutions representing a bundle of various services and functions. Based on this research, aspects such as depth of service range and possibility of opening accounts online or call back buttons and prompt responses to questions, are important drivers leveraging overall service quality in an effective manner.
2.4.3 Measuring online systems quality Yang and Fang (2004:305) hold that: “since consumers’ use of Internet-based services can be viewed as similar to the adoption of new technology, ease of use and usefulness are important factors in evaluating online service quality.” Dimensions of online service quality such as information content, customization, reliability, and response also have significant effects on perceived ease of use and perceived usefulness, which in turn influences the attitude towards using the portal site, behavioural intention to reuse portal sites and actual portal site use (Yang & Fang, 2004:305).
26 Table 2.1: The WebQual 4.0 Instrument
Source: Adapted from Barnes and Vidgen (2003:299)
According to Barnes and Vidgen (2003:298) WebQual is based on quality function deployment (QFD) which is a structured process that provides a means to identify and carry the voice of the customer through each stage of the product or service development. The standard WebQual 4.0 instrument in Table 2.1 consists of 23 questions with usability, information quality and service interaction as the main categories.
The original electronic service quality (E-S-Q) scale was used to measure Website service quality. The Table 2.2 below represents the original E-S-Q scale dimensions with related questions (variables).
27 Table 2.2: The E-S-Q questionnaire and respective dimensions Dimension Questions Efficiency 1. This Website makes it easy to find what I want. 2. It makes it easy to get anywhere on the site. 3. It enables me to complete a transaction quickly. 4. Information on this Website is well organised 5. It loads its pages fast. 6. The Website is simple to use. 7. The Website enables me to get on to it quickly. 8. The Website is well organised. System availability 1. This Website is always available for business. 2. The Website launches and runs right away. 3. The Website does not crash. 4. Pages at this Website do not freeze after I enter my order information. Fulfilment 1. It delivers orders when promised. 2. This Website makes items available for delivery within suitable time frame. 3. It quickly delivers what I order. 4. It sends out the orders I ordered. 5. It has in stock the items the company claims to have. 6. It is truthful about its offerings. 7. It makes accurate promises about delivery of products Privacy 1. It protects information about my Web-shopping behaviour. 2. It does not share my personal information with other sites. 3. The Website protects information about my credit card
Source: Parasuraman, Zeithaml and Malhotra (2005:230)
28 Table 2.3 is the original E-S-Q instrument and it is part of the Website service quality but focuses on the recovery of service (E-RecS- Q)
Table 2.3: E-RecS-Q Dimension Questions Responsiveness 1. It provides me with convenient options for returning my items. 2. This Website handles product return well. 3. This Website offers meaningful guarantee. 4. It tells me what to do if my transaction is not processed. 5. It takes care of problems promptly.
Compensation 1. The Website compensates me for problems it creates. 2. It compensates me when what I ordered doesn’t arrive on time. 3. It picks up items I want to return from my home or business. Contact 1. The Website provides a telephone number to reach the company. 2. The Website has customer representatives available online. 3. It offers the ability to speak to a live person if there is a problem. Source: Parasuraman, Zeithaml and Malhotra (2005:231)
29 2.5 Internet Banking
2.5.1 Definition of Internet Banking According to Sayar and Wolfe (2007:123) the term “Internet Banking” from a customer’s perspective is used to describe the case where banks’ customers conduct banking transactions on the Internet. In the contemporary context, this mainly implies the usage of computers, but also allows for other possible devices like mobile phones and digital TVs (Sayar & Wolfe, 2007:123). Internet Banking presents the industry with an electronic and remote distribution channel. It represents an electronic marketplace whereby consumers may conduct their financial transactions on a virtual level (Bradley & Steward, 2003:272). Internet Banking refers to a service offered by banks that allows account holders to access their account data via the Internet. In order to take advantage of Internet Banking, an account holder would need to meet several technological requirements, such as having a personal computer with Internet access and web browser. If these conditions are satisfied, Internet Banking can be performed from anywhere in the world. Thus, Internet Banking facilitates direct access to account details, enables transfer of funds, allows for multiple bills payments, and performs an array of other transactions.
2.5.2 Characteristics of Internet Banking Jayawardhena and Foley (2000:19) in Figure 2.9 explain that the developments in technology have dominated the revolution in the banking sector. The world-wide expansion in technologies for connections has supported increased globalisation of capital flows and financial organisations. The successful implementation and development of online banking are influenced by the quality and security of Internet network, the level of Internet knowledge of the population, the government support, as well as the Internet strategy of the bank and the quality/ reliability of online banking services (Gurau, 2002:294). Jayawardhena and Foley (2000:20) further state that traditional banking is characterised by physical decentralisation, with branches scattered around populated areas providing an ubiquitous presence. The rationale behind such branch investment is the need to distribute the banking services. Jayawardhena and Foley (200:21) indicate that the properties of Internet are the key reasons why it is an ideal medium for delivery of banking products and services. Gurau (2002:285) concurs that by using the Internet people can access their bank accounts and conduct transactions twenty four hours a day, seven days a week with 30 reduced costs and increased convenience. As a result of the explosive development of the digital environment the banks have now an opportunity to expand the market penetration internationally. According to Jayawardhena and Foley (200:21) the advantages accruing to the bank can be summarised as: 1. Cost Savings: internet delivery is cheaper than physical delivery. 2. Increased customer base: present Internet demographics suggest that it is the relatively well off and well educated that use the Internet which suggests that potential users are high net worth customers. 3. Enable mass customisation: Internet delivery has the capability to customise information to suit the needs and likes of individual users.
Figure 2.9: Changes in the banking sector Source: Jayawardhena and Foley (2000:20)
31 Table 2.4 Retail banking services and the distribution channels
Source: Akinci, Aksoy and Atilgan (2004:215)
A review of the literature on Internet Banking by Akinci, Aksoy and Atilgan (2004:212) brings out four interrelated areas identified as: retail banking services, distribution channels for the services, consumer attitudes towards the adoption of Internet Banking and banks’ and bank managers’ perception on an approach to Internet Banking. Akinci et al. (2004:214) say that the advent of new channels has contributed not only to the adoption of multi-channel strategies by the existing institutions but also the emergence of new forms of financial business as “virtual banks”. The model above in Table 2.4 as depicted by Akinci et al. (2004:215) discusses the interrelation between retail banking services, the distribution channels and the target markets:
• Banking services The banking services include services like money withdrawals, payments, money transfers and account opening (Akinci et al. 2004:215).
• Distribution Channels: Akinci et al. (2004: 214) point out that the advent of new channels has contributed not only to the adoption of multi-channel strategies by the existing institutions, but also the emergence of new forms of financial business as “virtual banks”. The Internet
32 influences the future distribution channel structure in two ways. Firstly, it is in itself a new distribution channel for financial service. The costs of using it are different from those of other available distribution channels. Secondly, the Internet influences consumers many of whom invest time and money in becoming PC literate and getting to know the Internet (Möls, 1998:332)
• Target Market The extent to which customers switch to Internet Banking is mainly determined by each individual’s expectations regarding security, accuracy, transaction speed, user friendliness, user involvement and convenience, all of which are components of “perceived usefulness” (Sayar & Wolfe, 2007: 125).
2.5.3 Internet Banking Service quality Focussing on the quality perception process, the model in Figure 2.10 below as described by Broderick and Vachirapornuk (2002:328) identifies five key elements as central influences on perceived quality: • customer expectations of service • the image and reputation of the service organization • aspects of the service setting • the actual service encounter • customer participation
The model permits exploration of the perceived difference between expected service and the experienced service. Corporate image is regarded as an important determinant of perceived service quality. Customers build trust based on the image and reputation of service providers (Broderick & Vachirapornuk, 2002:328). Broderick and Vachirapornuk (2002:329) further state that the model incorporates concepts of functional and technical quality by focusing on two elements of service experience, that of service encounter and that of service setting. In Internet service the service setting is one of the key elements that will affect perceived quality. In the Internet environment, the virtual service setting facilitates performance and communicates evidence to customers about service. User satisfaction was found to be dependent on Website features such as speed to download, content and design, interactivity, navigation and security. There is good evidence that service encounter evaluation is
33 significantly correlated with perceived service quality. Customers do play a key role in the service delivery process, resulting in the perceived service quality becoming complex and a more involved issue for customers (Broderick & Vachirapornuk, 2002:329). From this model of perceived service quality it is not just the degree of participation which changes, but also the degree of self-determinism permitted to customers. The roles and service capability of customers become key inputs to perceived service quality within their service encounter (Broderick & Vachirapornuk 2002:328).
Figure 2.10: Internet Banking perceived quality model Source: Adapted from Broderick and Vachirapornuk (2002:328).
34 2.5.4 Measuring Internet Banking service quality A study undertaken by Jun and Cai (2001:276) on the key determinants of Internet Banking service quality concludes that a total of seventeen dimensions were identified under three categories of Internet Banking service quality: • Customer service quality. • Online systems quality. • Banking service product quality.
Table 2.5: Service Dimensions and related Categories Customer Service Quality Online System Quality Banking Service Product Quality Reliability Content Product variety Responsiveness Accuracy Competence Ease of use Courtesy Timeliness Credibility Aesthetics Access Security Communications Understanding the customer Collaboration Continuous improvement Source: Jun and Cai (2001:282).
2.6 Conclusion The literature reviewed a number of concepts on service quality. It started with the review of traditional services, traditional service quality, SERVQUAL as an instrument used to measure traditional service. It also introduced the concept of electronic service. In measuring electronic service the basis of the SERVQUAL instrument was used. This was the basis of a new tool called E-S-Q (Carrillant, Jaramilo & Mulki, 2007:473). Internet service quality was also reviewed and a model adapted from Jun and Cai (2001:238) brought about the fact that dimensions were identified under three categories, that of customer service quality, online system quality and banking service product quality.
35 To move ahead to understanding Internet Banking service quality, one needs to unpack a number of service concepts. This starts by understanding traditional services and measurements thereof, through to electronic service such as Internet Banking service. Concepts and theory on measurements of electronic service have been presented in order to provide a deeper understanding of Internet Banking service quality. The intention of presenting the theoretical background of both traditional service and electronic service is to offer an insight into measuring service quality, how it developed in time and how it changed because of the impact of technology, especially Internet service delivery.
The basis of the E-S-Q and E-Rec-Q will be used to develop an instrument for measuring the quality of Internet Banking service quality. A slightly modified version of this instrument will be used in this study. This instrument will include amongst others a question on customers’ perception on how the depth of functionality offered by their banks’ Internet Banking service addresses their needs. Dimensions which were in the original E-S-Q instrument like flexibility, price knowledge and customization will be excluded in this study. These dimensions are more related to an online purchasing service rather than banking, hence they will be excluded from the instrument.
Based on the numerous discussions in the literature around measurements of traditional service quality, electronic service quality, online systems quality and Internet Banking service quality with their respective determinants of service quality an adapted E-S-Q instrument was used in this survey. Twenty four questions were used covering eight key determinants of electronic Banking service quality: 1. Efficiency: covers the ability to access the banking site, the ease of use, the speed of completing banking transactions and the depth of Internet Banking functionality. 2. Fulfilment: covers accuracy of information, the convenience factor and promises being kept. 3. System Availability: is about system quality. Internet Banking system being available at all times when needed. 4. Privacy: no misuse of personal information that gets exchanged on the online interaction.
36 5. Assurance and trust: refers to confidence in the online service and how trustworthy the brand is. 6. Responsiveness: refers to online requests done promptly and issues are resolved on time. 7. Contact: refers to the bank being easily accessible and support staff available at all times when needed. 8. Website aesthetics: means how attractive the banking site is.
Chapter Three describes in detail the research methodology used to do the study. This chapter will capture the research design, sample selection and methods used to collect primary data. The relevant reliability and validity tests to be employed will also be discussed in this chapter.
37 Chapter THREE
RESEARCH METHODOLOGY
3.1 Introduction This chapter discusses the methodology that was employed to conduct the study. The discussion will include the design of the research, population sample, sampling and data collection methods that were used. The web survey method was used to collect primary data for this study. Web survey process concerns transforming paper based instruments into Web forms and incorporate user interface design (Roynolds, Woods & Baker, 2007:11). Electronic interactive media was used as respondents were contacted via e-mail and directed via a URL to take a self-administered questionnaire online. Zikmund (2003:198) defines electronic interactive media as a communication media that allows an organization and the audience to interact using digital technology. This method was chosen as the preferred method because of its wide reach of respondents, convenience, low cost, speed of data collection and the fit that it has with the study. An Internet survey is a self administered questionnaire posted on a Website. Respondents provide answers to questions displayed on the screen by clicking on an icon, keying in an answer or highlighting a phrase (Zikmund, 2003:221).
3.2 Research design Zikmund (2003:65) defines research design as a master plan specifying the methods, approaches and procedures for collecting and analysing the needed information. The objectives of the research, the available data sources, the urgency of the decision, and the cost of obtaining the data will determine the choice of the appropriate research design. The quantitative and qualitative research methodologies are the two main research approaches useful in the classification of studying primary data (Davis, 2000:265). Zikmund (2003:110) asserts that qualitative research usually provides greater understanding of a concept or crystallizes a problem, rather than providing precise measurement or quantification. The focus of qualitative research is not on numbers but rather on words and observations. According to Schmidt and Hollensen (2006:89) the purpose of qualitative research is to find out what is going on in a person’s mind. Davis (2000:265) on the other hand says qualitative research consists of studies that can be quantified. He maintains that these studies are an in-depth
38 analysis of one or a few observations; they involve less structured questioning and observations of respondents.
Conversely, quantitative research uses large samples and involves structured survey questioning that is subsequently numerically and statistically analysed (Davis. 2000:265). Martins et al. (1996:125) highlight that quantitative research objective is to generalise about a specific population, based on the results of a representative sample of that population. The method generally involves the collection of primary data from a large number of individuals, with the intention of projecting the results to a wider population. Quantitative research approach is based on testable hypothesis and tends to measure “how often” or “how much”. The choice of the approach to be taken in a research study is primarily based on the research question or problem.
Taking into consideration the description of the two research approaches discussed above and the study’s research objectives, it was decided to use the quantitative research approach. This study aims to explore customer’s perceptions on key electronic service dimensions of Internet Banking service quality. Since this study explores perceptions it means the study aims to measure “how much” satisfied online banking customers are with the quality of Internet Banking service. This approach allowed for statistical analysis of the data on the basis of a service quality measurement instrument. The study involved collecting primary data in a structured survey questioning which was followed by statistical analysis of the data. The objective was to be in a position to generalise about online banking customers’ perceptions on the quality of Internet Banking service. To collect primary data the Internet survey method was used. The combination of the quantitative approach and the survey method was appropriate for the research question in this study as a representative sample of the population was surveyed.
3.3 Research population Davis (2000:220) defines population as the complete set of units of analysis that are under investigation. Zikmund (2003:369) brings in an element of commonality by defining population or universe as a complete group of entities sharing some common set of characteristics. On the other hand the survey population is an aggregate of elements from which the sample is drawn (Martins et al., 1996:252). Martins et al. (1996:252) state that “In practice we seldom find complete lists of all the elements, so
39 that the sample has to be drawn from lists that do not always contain all the elements. The differences between the survey population and the population or universe should therefore be always noticed.” The distinction between a population and the universe is made on the bases of whether the group is finite (population) or infinite (universe) (Zikmund, 2003:369). Based on the definitions of universe, population and survey population by different authors above, these concepts can be summarised as follows: • Universe is an infinite group of entities sharing some common characteristics. • Population is a finite complete group of entities sharing some common characteristics. • Survey population is the aggregate of elements from which a sample is drawn.
This study investigated the perception of online banking customers on the quality of service delivered by Internet Banking. The universe comprised of all banking customers world wide, whilst Internet Banking customers in the world will be the population and the Internet Banking customers using South African banks will form the survey population.
The contact list of online banking customers in South Africa was not commercially available and the four major banks would not divulge their customers contact details as a result of legal compliance restrictions. An alternative to reach as many online banking customers as possible was an approach of social networking to create the survey population list. An invitation was sent to colleagues, friends, business associates, family and social contacts from social media (Face book) to provide contact e-mail addresses of their contacts that are online banking users. This ensured that there was no bias in selecting users from any specific bank.
Figure 3.1 shows the trend of Internet Banking users in the United States compared to the world wide trends. The trend shows a 3 275% increase of world wide online banking users in 12 years between 1995 and 2007.
40 Figure 3.1: Consumer households using online banking: Source: Online banking report Number 150 January 28, 2008
3.4 Sampling Zikmund (2003:369) defines sampling as the process of using a small number of parts of a larger population to make a conclusion about the whole population. This study focused on all Internet Banking customers serviced by South African banks regardless of their geographic location. The common characteristic of the sampled population was that all respondents were selected from customers who do online banking using any South African banks.
3.4.1 Sampling methodology Davis (2000:229) defines sample design as the method used to select the units of analysis for a study. He says that such methods can be classified in a variety of ways, of which the most usual breakdown is into probability and non-probability sampling designs. In probability sampling every element has an equal chance of being selected. In non-probability sampling the probability of any particular member of the population being chosen is unknown. The selection of sampling units is arbitrary as researchers rely on personal judgment (Zikmund, 2003:379). Zikmund (2003:380) further suggests that it should be noted that there are no appropriate statistical
41 techniques for measuring random sampling error from a non-probability sample. A non-probability sample is a one in which chance selection procedures are not used (Davis, 2003:243)
Given the above discussion on probability and non-probability sampling this study used the non-probability sampling called convenience sampling. This was because the respondents that were invited to take part in the survey were conveniently available. To gather names and e-mail addresses of the respondents, an e-mail and a face book invitation were sent to colleagues, friends, business associates, and family asking them to extend the invitation to their respective lists. The only criteria stipulated were that the respondent should be an online banking customer with one of the banking institutions in South Africa. This then meant that the survey population was conveniently obtained from friends, business associates, colleagues and family. One thousand (1 000) contacts e-mail addresses were gathered through this method. The reason for using the convenience sample was to obtain a large number of completed questionnaires quickly and economically. The only other way of getting a sample would have been to get a list of all online banking customers from the banking institutions in South Africa. Out of the combined list a random sample would have been selected as the survey population. One of the limitations of the study was the fact that the sample used was a non-probability one because it was a convenience sample. Projecting results beyond a specific sample in a non-probability sample (convenience) might be inappropriate. Zikmund (2003:382) states that convenience samples are best used for exploratory research when additional research will subsequently be conducted with a probability sample.
3.4.2 Sample size Two hundred and six (206) responses were received. Based on the online survey responses, the average response rate for online surveys is approximately twenty percent (20%). The survey population was one thousand (1 000). The two hundred and six represented a 20.6% response rate. One hundred and sixty five (165) usable responses were received as out of the two hundred and six, the valid responses were one hundred and sixty five representing a 16.5% of the survey population.
42 3.5 Research instrument Zikmund (2003:330) points out that a survey is only as good as the questions it asks, hence the questionnaire design is a critical stage in the survey research process. The questionnaire must be relevant and accurate in trying to capture the essence of the research objective. To achieve these ends, a researcher will be required to make several decisions: • What should be asked? • How should each question be phrased? • In what sequence should the questions be arranged? • What questionnaire layout will best serve the research objectives? • How should the questionnaire be pre-tested? • Does the questionnaire need to be revised.
The questionnaire that was used in this study was based on an E-S-Q instrument that has been extensively used to measure the quality of service delivered by Websites and online services. The questionnaire was slightly adjusted to ensure that it captured the essence of Internet Banking compared to electronic shopping. The instrument has been used mostly in electronic shopping service quality measurements. This instrument included amongst others a question on customers’ perception on how the depth of functionality offered by their banks’ Internet Banking service addressed their needs. Dimensions which were in the original E-S-Q instrument like flexibility, price knowledge and customization were excluded in this study. These dimensions refer to online purchasing service rather than banking, hence they were excluded from the instrument. Twenty four questions were used covering eight key determinants of electronic banking service quality. Five more questions on the customer’s personal information (biographical questions) were covered. The first question in the survey asked customers if they banked online or not. This was to allow non-Internet Banking customers not to take the entire questionnaire but rather to fill in only the biographic information. Customers that responded with a “Yes” answer to this question were directed to take the entire questionnaire. A summary of the eight key determinants of electronic banking service are:
• Efficiency: covers the ability to access the banking site, the ease of use, the speed of completing banking transactions and the depth of Internet Banking functionality. 43 • Fulfilment: covers accuracy of information, the convenience factor and promises being kept. • System Availability: is about system quality. Internet Banking system being available at all times when needed. • Privacy: no misuse of personal information that gets exchanged on the online interaction. • Assurance and trust: refers to confidence in the online service and how trustworthy the brand is. • Responsiveness: refers to online requests done promptly and issues are resolved on time. • Contact: refers to the bank being easily accessible and support staff available at all times when needed. • Website aesthetics: means how attractive the banking site is.
The scale that was used in the instrument was the summated ratings method called the Linkert scale. With the Linkert scale, respondents indicate their attitude or perception by checking how strongly they agree or disagree with carefully constructed statements that range from very negative to very positive towards the attitudinal object (Zikmund. 2003:312). Schmidt and Hollensen (2006:120) define the Linkert scale as a widely used rating scale that requires the respondents to indicate a degree of agreement or disagreement with each of a series of statements about the stimulus objects. Since Internet survey or questionnaire was used, respondents were given radio buttons to make their choices. In the questions where personal information was required input fields were provided.
3.6 Data Collection Zikmund (2003:72) argues that because there are many research techniques it stands to reason that there will also be different ways of collecting data. Respondents may be given a questionnaire to fill or they may interact with an interviewer. A self- administered survey questionnaire is defined as a questionnaire that is filled in by respondents rather than an interviewer. An internet survey is one such questionnaire where the respondent takes a self-administered questionnaire posted on a Website. The speed of response, cost of gathering primary data and the reach of the Internet survey are some of the advantages of this method of collecting data. One other
44 advantage is that the information collection and capturing can be done in real time (Zikmund, 2003:227).
The Internet self-administered questionnaire method was used in this study. The major reason for using this method was that the nature of the topic is around online banking hence the survey sample was easily reachable through this technique and was also more willing to take the questionnaire online. This guaranteed some form of a good response rate. Some of the advantages of using online questionnaire for primary data collection are: • Speed of data collection is almost instantaneous. • High geographic flexibility. • Respondents’ participation would be higher compared to other methods. • Versatile questioning. • No interviewer influence on questions. • Anonymity of respondents can be guaranteed. • Low cost for primary data collection.
The questionnaire was open for two weeks. A reminder was sent in the second week to improve on the response rate. The site was taken down after it has been up for two weeks.
3.7 Data Analysis The data was collected online in real time. As respondents submitted their questionnaire the data was automatically exported into a predefined and coded database. Each question was coded in the interface (Web form) and matched to field names in the database. This in turn made analysis to be started much quicker. STATCON (A statistical services bureau at the University of Johannesburg) was contracted to host the web side and do the analysis. Some of the services that STATKON completed included: • Ensuring that respondents only had one opportunity for taking the questionnaire. This was done by tracking the embedded system controls. • Statistical analysis of quantitative data including use of multivariate techniques to meet the objectives of the research project. • The reliability and validity tests. • Providing the interpretation of the statistical results
45 • Providing the graphical displays to enhance the interpretation of the results.
3.8 Ethical Considerations Ethical questions are philosophical questions. There is no general agreement amongst philosophers about the answers to such questions. However, the rights and obligations of individuals are generally dictated by the norms of society. Social norms are codes of behaviour adopted by a group; they suggest what a member of a group ought to do under given circumstances (Zikmund, 2003:78). Below are some of the ethical aspects which were considered during the research project: • Informed consent - the respondents were informed on the invitation letter about the intent of the study. • Deception - the intent and mandate to do the research was made clear from the onset. • Anonymity - the self administered questionnaires were completed anonymously to ensure the privacy of the subject. • Confidentiality - all information received was handled with confidentiality • Publication of the findings - a written academic report was compiled as accurately and objectively as possible.
Roynolds et al. (2007:114) point out that the application of ethical principles in online surveys implies the following: • Providing complete and unambiguous information regarding the identity of the researcher, the purpose of research, and the use of the collected data, including the diffusion of the research results • Including a clear statement regarding the protection of participants’ privacy and to give the participants the opportunity to define the level of confidentiality they require • To ensure the security of Internet connection and data transfer, informing participants about the risk of data interception by third parties. • Openly present all the advantages or disadvantages related to the participation in the study • Providing contact information to allow respondents to obtain additional clarification about the research project.
46 3.9 Conclusion The aim of the study was to explore online banking customers’ perceptions on Internet Banking service quality. The quantitative approach allowed for statistical analysis of the data. The sample was a non-probability sample and the study followed a quantitative research approach. The combination of the quantitative approach and the survey method was appropriate for the research question in this study as a sample population was surveyed and the general conclusion drawn for the entire sample population. The survey population was all online banking users utilizing services from South African banks and the sampling design was a non-probability one as a convenience sampling method was used. A slightly revised E-S-Q service quality measurement instrument was used in this study and data was collected via a web based self-administered survey.
Chapter Four will concentrate mainly on the presentation of the results. The focus will be on providing the analysis of the results in terms of elaborating on the research objectives.
47 Chapter FOUR PRESENTATION OF RESULTS
4.1 Introduction. The presentation and analysis of the results of the conducted imperial survey will be done in this chapter. The results of the survey include the analysis of missing data, descriptive statistics, Principal Component Analysis, Reliability and Validity tests and lastly the Internet Banking Service quality measures.
4.2 Missing data One thousand respondents were invited to participate in the survey. Two hundred and six (206) responses were received representing a 20.6% response rate. Sixteen of the responses were non Internet Banking users hence they did not complete the entire questionnaire and twenty nine had missing information. It therefore meant that there were one hundred and sixty one (161) valid responses for the demographics questions.
4.3 Descriptive Statistics Graph 4.1 Age demographics
Age
4.3% 5.0%
39.7%
51.0%
18 - 24 25- 35 36 - 49 Older than 50
All the responses with missing data were excluded from the demographic analysis. Graph 4.1 indicates the following age splits: 18-24 (5%), 25-35 (51%), 36-49 (39.7%) and older than 50 (4.3%). The majority of the respondents were aged between 25 and 35 years followed by the 36 to 49 years age group. Given the above results it was
48 decided for statistical reasons to split the groups into two. One group would be all respondents who are 35 years and younger and the second group would be that of respondents who are 36 years and older. Graph 4.2 below indicates the overall split of the two age groups.
Graph 4.2 Overall age demographics
Age
44%
56%
35 years and younger 36 years and older
Graph 4.3 indicates the gender demographics. Out of the one hundred and sixty one (161) valid responses 51.5% were males compared to 48.5 females.
Graph 4.3 Gender demographics
Gender
48.5% Male Female 51.5%
49 Graph 4.4 indicates the respondent’s primary bank and it can be seen that from the 161 respondents using Internet Banking, 42.1% bank with Absa, followed by 22.1% that bank with Standard bank, 12.6% banking with FNB and 6.3% with Nedbank. Only 1.6 banks with Investec.
Graph 4.4 Bank demographics
Distribution by bank
6.2% 1.5% Absa 22.1% 42.1% FNB SBSA Nedbank Other 12.7%
Graph 4.5 indicates that 92% of the respondents have been using the service for more than a year. This implies that the responses given in the survey are based on solid experience.
Graph 4.5 length of Internet Banking use
Internet Banking use
1% 7%
92%
Less than 3 months 3 - 12 months More than 12 months
The details of the demographics data is reflected in Appendix II Descriptive statistics
50 4.4 Principal Component Analysis A Principal Component Analysis is concerned with explaining the variance-covariance structure through a number of linear combinations of the original data. Its general objectives are data reduction and interpretation. An analysis of principal components reveals relationships that were not previously suspected and therefore allows interpretations that would not have ordinarily resulted (Johnson & Wichern, 1992:356).
Bartlett’s Test of Sphericity and Kaiser-Meyer-Olkin Measure (KMO) of Sampling Adequacy were performed on the data to confirm the suitability of the data for Factor Analysis. In order to analyse the collected data factor analysis was performed on the items of the instrument (model) with Principal Component Analysis as the extraction method. The result of the performed Bartlett’s Test of Sphericity and the KMO Measure of Sampling Adequacy is shown in Table 4.1. The Bartlett’s Test of Sphericity results indicates a 0.00 score whilst the KMO score is 0.919. According to Kenova and Jonasson (2006:30) for a factor analysis to be considered appropriate a score of the Bartlett’s Test of Sphericity should be less than 0.05 and a KMO minimum score of 0.6 is needed for good factor analysis. The result of the Bartlett’ test is 0.00 which is less than 0.05 indicating that the factor analysis can be considered appropriate and KMO Measure of Sampling Adequacy is 0.919, which exceeds the minimum value of 0.6 for good factor analysis.
Table 4.1 KMO and Bartlett’s Test
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling 0.919 Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square 2,140.468 df 276 Sig. 0.000
Table 4.2 indicates the communalities of all the twenty four variables (questions) Communalities consist of Initial and Extracted Values. It represents the result of the conducted Principal Component Analysis (CPA) on all components with five factors extracted. Communality can be interpreted as the reliability of the indicator. If the communality of a given variable is low, then this variable should probably be removed
51 from the instrument (model) because the factor it pertains to cannot explain its variance. The interpretation of the values of communalities should be done in relation to the interpretation of the factors. The extracted value represents the percent of variance in a given variable explained by the extracted factor.
Table 4.2 Communalities of the twenty four variables Initial Extraction q1 0.563 0.531 q2 0.463 0.484 q3 0.538 0.518 q4 0.580 0.552 q5 0.509 0.524 q6 0.536 0.498 q7 0.528 0.622 q8 0.414 0.453 q9 0.471 0.463 q10 0.510 0.482 q11 0.707 0.747 q12 0.590 0.606 q13 0.439 0.404 q14 0.506 0.501 q15 0.504 0.532 q16 0.635 0.616 q17 0.544 0.513 q18 0.601 0.632 q19 0.678 0.712 q20 0.535 0.488 q21 0.675 0.741 q22 0.667 0.717 q23 0.598 0.687 q24 0.497 0.587 Extraction Method: Principal Axis Factoring.
52 Table 4.3 Total Variance Explained
Extraction Sums of Squared Initial Eigenvalues Loadings Rotation Sums of Squared Loadings
% of Cumulative % of Cumulative % of Cumulative Factor Total Variance % Total Variance % Total Variance % 1 9.993 41.639 41.639 9.567 39.861 39.861 3.757 15.654 15.654 2 1.839 7.664 49.303 1.451 6.048 45.909 3.285 13.689 29.344 3 1.460 6.083 55.386 1.026 4.273 50.182 2.487 10.364 39.707 4 1.333 5.555 60.942 0.956 3.982 54.165 2.161 9.005 48.712 5 1.034 4.307 65.248 0.609 2.538 56.702 1.918 7.990 56.702 6 0.763 3.180 68.428 7 0.741 3.088 71.516 8 0.684 2.849 74.365 9 0.640 2.668 77.033 10 0.576 2.400 79.433 11 0.570 2.377 81.809 12 0.511 2.129 83.938 13 0.500 2.085 86.023 14 0.443 1.845 87.868 15 0.395 1.645 89.513 16 0.376 1.566 91.079 17 0.362 1.508 92.587 18 0.344 1.433 94.020 19 0.318 1.324 95.343 20 0.299 1.246 96.589 21 0.244 1.015 97.604 22 0.203 0.846 98.450 23 0.192 0.800 99.249 24 0.180 0.751 100.000 Extraction Method: Principal Axis Factoring.
Table 4.3 shows the Total Variance Explained eigenvalues. The variance in all the variables which is accounted for by the given factor is measured by the eigenvalues for this factor. If the eigenvalue of a specific factor is low it means that this factor explains less of the variance in the variable and can be dismissed from the instrument. The data presented in Table 4.3 Total Variance Explained can be used to determine the number of factors to extract. It therefore means that there are only five factors to be extracted as there are only five factors with the initial eigenvalue higher than one.
The Rotated Component Matrix shows the correlation between each question in the survey and the different factors. Each variable (question) should pertain to the factor with which it correlates best. Observing Table 4.4 on Rotated Factor Matrix it shows that the following questions (variables) are best correlated to Factor1 and should as such be grouped together to represent that factor: Q19 (76.1%), Q18 (66.1%), Q16
53 (61.9%), Q6 (56.7%), Q9 (56.9%) and Q17 (51.3%). Although the communality value for Q9 is below 50% at (47%) it will be retained in the instrument as a result of the good correlation at (56%) which is higher than 50%.
Following similar logic the following questions correlates best to Factor2 as observed from Table 4.4 hence they will be grouped together: Q21 (79%), Q22 (78%), Q11 (73.5%), Q3 (60.2) and Q1 (51.4) All factors will be retained as the communality scores of all the five questions is above 50. The third factor as observed from Table 4.4 will be grouped as follows: Q12 (65.3%), Q4 (57.2%), Q5 (47.9%), Q10 (44.8) and Q13 (38.8). Question 10 can be retained as it has a communality value of more than 50%; however question 13 cannot be retained as it has the less favourable correlation of 38.8% which is less than the 60% and also the communality value of less than 50%. Question 13 was about the brand reputation, this question was included because from the theory it is stated that a well known brand will always positively influence customer perceptions. This variable will however be excluded based on the results above. The fourth factor should include the following questions which best correlates to factor4: Q7 (70.8), Q8 (65.8), Q14 (48.4), Q2 (46.3) and Q20 (41.6). All the other questions can be retained in the exception of question 2 as it has a communality value of less than 50%. Lastly, the fifth factor as observed from Table 4.4 will be represented by the following questions (variables): Q24 (66.8%), Q23 (65.2%) and Q15 (54%).
54 Table 4.4 Rotated Factor Matrix Factor 1 2 3 4 5 q19 0.761 0.312 q18 0.661 0.331 q16 0.619 0.341 q6 0.567 q9 0.561 0.322 q17 0.513 0.299 0.298 q21 0.790 0.265 q22 0.780 q11 0.735 0.359 q3 0.281 0.602 q1 0.402 0.514 0.270 q12 0.250 0.288 0.653 q4 0.572 0.314 q5 0.442 0.479 q10 0.446 0.448 q13 0.299 0.306 0.388 q7 0.708 q8 0.658 q14 0.322 0.262 0.484 q2 0.260 0.419 0.463 q20 0.394 0.289 0.416 q24 0.297 0.668 q23 0.486 0.652 q15 0.357 0.540
As a result of the analysis done above of the collected data, the number of dimensions included into the presented theoretical model, should be decreased from eight to five. The performed factor analysis with Principal Component Analysis as an extraction method showed that all the variables pertaining to the initial theoretical model are not well grouped to represent the eight initial dimensions and thus should be rearranged to represent five quality dimensions. Appendix V indicates the new labels for the five extracted dimensions with the associated questions (variables). The five new service dimensions are summarised as efficiency, fulfilment, security, responsiveness and contact. The questions are split as follows per dimensions: • (factor1) Efficiency Q19, Q18, Q 16, Q6, Q9 and Q17; • (factor2) Fulfilment Q21, Q22, Q11, Q3 and Q1; • (factor3) Security Q12, Q4, Q5 and Q10; • (factor 4) Responsiveness Q7, Q8, Q14 and Q20 and lastly • (factor 5) Contact Q24, Q23 and Q15.
55 Factor one refers to efficiency and includes variables like adequacy of functionality, the ease of finding information on the banking site, aesthetics of the site and speed of transacting amongst others. These variables are more inclined towards the service efficiency as perceived by customers hence it was labelled “Efficiency”. The second factor relates to the fulfilment. Variables included cover speed at which the Website pages load at, the availability of the Website and the speed of accessing the Website hence the dimension was labelled “Fulfilment”. The third factor relates to the security of the information exchanged, the protection of information, and the assurance with the transactions and confidence in the service. As a result this dimension was labelled “Security”. The fourth factor relates to customer feedback and accessibility of the bank. The variables contained in this factor address issues like how responsive is the bank and how it communicates on customers’ requests hence it was labelled “Responsiveness”. Lastly the fifth factor is around contact. The related variables (questions) relate to the bank offering contact details on the site and having personnel available online and telephonically. This factor was labelled “Contact”.
4.5 Reliability and Validity Tests Reliability is broadly defined as the degree to which measures are free from error and therefore yield consistent results (Zikmund, 2003:300). Kurpius and Stafford (2006:121) concur by defining reliability as the trustworthiness or accuracy of measurement. The terms consistency and stability are also used when discussing reliability. According Kurpius and Stafford (2006:121) reliability coefficient refers to the scores obtained on a test. A reliability coefficient of zero indicates that the test scores are unreliable. On the other hand the higher the reliability coefficient, the more reliable or accurate the test scores. A reliability coefficient is a numerical value that can range from zero to one. For research purposes, tests with a reliability score of 0.7 and above are accepted as reliable, whilst for clinical decision making, test scores of between 0.8 and 0.9 are acceptable (Kurpius & Stafford, 2006:121).
The Cronbach’s Alpha Test of reliability was used to test the reliability of the instrument (model) used for the survey. The reliability test was done on the five extracted factors or dimensions and the scores are reflected in Table 4.5. Detailed scores across all dimensions and variables are obtained in Appendix IV. From Table 4.5 it can be seen that the Alpha scores on all dimensions, efficiency, fulfilment,
56 security, responsiveness and contact are all higher than 0.7 indicating that the scores on these tests were reliable.
Table 4.5 Cronbach’s Alpha Scores on the service quality dimensions Cronbach's Component Alpha score Number of items Factor 1 (efficiency) 0.868 6 Factor 2 (fulfilment) 0.881 5 Factor 3 (security) 0.816 5 Factor 4 (responsiveness) 0.791 5 Factor 5 (contact) 0.765 3 Internet Banking Quality 0.935 24
Scores on a test need to be valid and reliable. Evidence of validity is reported as a validity coefficient, which can range from 0 to +1.00. The validity coefficient score of zero indicates that the tests scores do not measure the construct under investigation. The validity scores approaching 1 provide strong evidence that the tests scores are measuring the construct under investigation (Kurpius & Stafford, 2006:142). Kurpius and Stafford (2006:154) further point out that the validity coefficient for a test’s score cannot be greater than the square root of the test’s reliability. Table 4.6 indicates the potential maximum values of the validity coefficient as per the definition above.
Table 4.6 Potential maximum validity coefficient Potential Cronbach's maximum validity Number Component Alpha score coefficient of items Factor 1 (efficiency) 0.868 0.931 6 Factor 2 (fulfilment) 0.881 0.938 5 Factor 3 (security) 0.816 0.903 5 Factor 4 (responsiveness) 0.791 0.889 5 Factor 5 (contact) 0.765 0.874 3 Internet Banking Quality 0.935 0.967 24
The instrument used in the survey was a slight variation of the (E-S-Q) instrument which has been adapted from the SERVQUAL instrument for face-to-face service delivery. The SERVQUAL instrument has been used extensively in the research because its validity is not questionable. Secondly, the maximum potential validity coefficient of all the dimensions as indicated in Table 4.6 is closer to 1 indicating
57 strong evidence that the test scores are indeed measuring the construct under investigation which in this case is Internet Banking service quality. The “Sig” values in the “Test for Normality” Table 4.7 represent the p-values based on testing the null hypothesis that the data is normally distributed. Both tests are designed to determine whether the data observed closely fit the shape of a normal curve. Both tests for the five factors and the overall Mean-Quality-Internet- Banking is significant as the scores lie between (p = 0.068 and 0.000) which suggests that the data is not normal but it is skewed to the right. The details of the distribution of the different factors and the overall mean are discussed in the next section.
Table 4.7 Normality test Kolmogorov-Smirnov(a) Shapiro-Wilk Statistic df Sig. Statistic df Sig. Mean_Factor1 0.161 165 0.000 0.921 165 0.000 (efficiency) Mean_Factor2 0.108 165 0.000 0.940 165 0.000 (fulfilment) Mean_Factor3 0.115 165 0.000 0.889 165 0.000 (security) Mean_Factor4 0.078 165 0.015 0.980 165 0.020 (responsiveness) Mean_Factor5 0.113 165 0.000 0.892 165 0.000 (contact) Mean_Quality_Internet_Ba 0.067 165 0.068 0.956 165 0.000 nking a. Lilliefors Significance Correction
4.6 Internet Banking service quality measures Appendix I shows the distribution of the level of satisfaction or dissatisfaction of customers on all the variables. There were one hundred and sixty five valid responses for this section. The frequencies in Appendix I indicate that customers are generally satisfied with all the variables of Internet Banking service quality. The overall distribution curve for Internet Banking service quality is skewed to the right. The distribution of the service efficiencies dimension is illustrated in graph 4.5 (a) and 58 graph 4.5 (b) below. The dimension of service efficiency had mean of 4.09 from the five point Linkert-Scale indicating that the 161 valid responses are satisfied with this dimension. There were an insignificant number of respondents who were extremely dissatisfied with this dimension.
Graph 4.5(a): Efficiency
Graph 4.5 (b): Efficiency
59
The variables (questions) which were rated as extremely satisfactory by the respondents as per the distribution frequency in Appendix I include/were: • My bank is well known and has a good reputation. (52.1%) • My Internet Banking transactions with my bank are always accurate. (51.5%) • I am able to get to my bank's Internet Banking site quickly. (49.7%) • It is quick to complete a transaction through my bank's Internet Banking site (44.2%)
The second dimension of service quality, fulfilment as extracted in this study had a mean of 3.97 and as illustrated by graph 4.6(a) and graph 4.6(b) below. The graphs show that the respondents were also satisfied with this dimension of service as well.
Graph 4.6(a): Fulfilment
60 Graph 4.6 (b): Fulfilment
The third dimension of security which encompasses assurance, trust and privacy indicated a mean north of 4 (4.29) as indicated in graph 4.7(a) and graph 4.7(b) respectively, showing that the respondents were satisfied with this dimension.
Graph 4.7(a): Security
61 Graph 4.7 (b): Security
The contact dimension also had a mean of 4.06 showing satisfaction with this dimension as indicated in graphs 4.8(a) and 4.8(b).
Graph 4.8(a) : Contact
62 Graph 4.9(b): Contact
The overall Internet Banking service quality indicated a mean of 4.03 as per graphs 4.9(a) and 4.9(b) indicating that the respondents were generally satisfied with Internet Banking service quality.
Graph 4.9(a): Internet Banking Service Quality
63 Graph 4.9(b): Internet Banking Service Quality
Graph 4.10(a): Responsiveness
64 Graph 4.10(b): Responsiveness
The only dimension that showed a mean south of 4 at (3.74) was that of responsiveness which encompasses the communications and fulfilment dimensions. Although a mean of 3.74 does not look bad, but compared to all the other four dimensions it is the one where respondents showed the most indifference. This indicates that most of the respondents were neutral and indifferent on this particular dimension of service quality as indicated in graph 4.10 (a) and graph 4.10(b) respectively.
The respondents indicated a neutral or indifferent level on the responsiveness dimensions which pertains to service recovery and fulfilment as indicated by the frequencies in the variables (questions) listed below. • (Q7) The bank gives prompt responses to my requests by e-mail or other means (27.9% were neutral, 36.4% satisfied and 25.4% strongly satisfied). • (Q8) The bank is easily accessible. (27.9% were neutral, 37% satisfied and 23% strongly satisfied). • (Q14) The bank quickly resolves problems I encounter with my Internet Banking transactions. (38.2% were neutral, 39.4% satisfied and 17% strongly satisfied).
65 • (Q20) The bank’s site makes accurate promises about the services delivered (24.8% were neutral, 47.3% satisfied and 23.6% strongly satisfied). • (Q23) My bank’s Internet Banking site does not share my personal information with other sites. (24.2% were neutral, 36.4% satisfied and 36.4% strongly satisfied).
Comparing the respondents’ levels of dissatisfaction per variable, the highest scores were recorded on the following variables: • My Bank's Internet Banking site pages download quickly all the time. (11.5%). • It is easy for me to find what I want on my bank's Internet Banking site. (9.7%). • My bank gives prompt responses to my request by email or any other means (9.7%). • When my bank promises to do something at a specific time, it keeps its promises (9.1). This is in line with the variables where respondents indicated neutrality and would thus be the dimension that would need improvement to enhance the Internet Banking service quality.
Table 4.8: ANOVA T-Test on age T-Test Age Std. rq27 N Mean Deviation Std. Error Mean Mean_Factor1 35 and younger 90 4.13 0.653 0.069 36 and older 71 4.09 0.656 0.078 Mean_Factor2 35 and younger 90 3.99 0.771 0.081 36 and older 71 4.00 0.716 0.085 Mean_Factor3 35 and younger 90 4.31 0.509 0.054 36 and older 71 4.28 0.650 0.077 Mean_Factor4 35 and younger 90 3.77 0.704 0.074 36 and older 71 3.74 0.640 0.076 Mean_Factor5 35 and younger 90 4.07 0.710 0.075 36 and older 71 4.06 0.825 0.098 Mean_Quality_Internet_Banking 35 and younger 90 4.06 0.535 0.056 36 and older 71 4.03 0.563 0.067
Elliot and Woodward (2007:52) indicate that the analysis of covariance ANOVA is used to determine whether there are any differences in perception amongst identified groups. From Table 4.8 on age distribution, the two age groups were consolidated into two major groups, ages 35 and younger and ages 36 and older. Applying the ANOVA t-Test on age it can be seen that there is an insignificant difference in the p-
66 values of the two age groups across all dimensions and including the overall Internet Banking service quality where the p-value for respondents 35 years and younger is 0.535 and that of respondents 36 years and older is 0.563. This then means that age does not influence the perception of Internet Banking service quality.
Table 4.9 ANOVA T-Test on Gender
T-Test Gender Group Statistics Std. q26 N Mean Deviation Std. Error Mean Mean_Factor1 Male 83 4.12 0.580 0.064 Female 78 4.10 0.726 0.082 Mean_Factor2 Male 83 4.03 0.722 0.079 Female 78 3.95 0.772 0.087 Mean_Factor3 Male 83 4.32 0.524 0.058 Female 78 4.27 0.624 0.071 Mean_Factor4 Male 83 3.75 0.712 0.078 Female 78 3.76 0.638 0.072 Mean_Factor5 Male 83 4.06 0.800 0.088 Female 78 4.08 0.721 0.082 Mean_Quality_Internet_Banking Male 83 4.06 0.501 0.055 Female 78 4.03 0.593 0.067
From Table 4.9 it is evident that there is an insignificant difference between the p- value scores on both genders across all dimensions including the overall Internet Banking service quality. The p-value for male on the mean Internet Banking service quality is 0.501 and that of females is 0.593 showing an insignificant difference. This indicates that males and females have similar perceptions when it comes to Internet Banking service quality.
From the ANOVA T-Test on primary bank in Table 4.10, the p-values scores across the five dimensions are very close, indicating an insignificant variance in the perception of Internet Banking service quality from the different banks services. The scores for an overall Internet Banking service quality are as follows: • Absa (4.05) • FNB (4.01) • Standard bank (4.03). Nedbank and other (Investec) scores were excluded from this test as a result of the low number of responses from these banks as indicated in graph 4.3.
67 Table 4.10: ANOVA T-Test on primary Bank
95% Confidence Std. Interval for Mean Minimu Maxim N Mean Deviation Std. Error Bound Bound m um Mean_Factor1 Absa 80 4.08 0.686 0.077 3.92 4.23 2 5 FNB 24 4.07 0.857 0.175 3.71 4.43 1 5 SBSA 42 4.15 0.517 0.080 3.99 4.31 3 5 Total 146 4.10 0.671 0.056 3.99 4.21 1 5 Mean_Factor2 Absa 80 3.95 0.738 0.082 3.79 4.11 1 5 FNB 24 3.95 0.824 0.168 3.60 4.30 1 5 SBSA 42 4.01 0.721 0.111 3.79 4.24 2 5 Total 146 3.97 0.743 0.061 3.85 4.09 1 5 Mean_Factor3 Absa 80 4.34 0.525 0.059 4.22 4.46 3 5 FNB 24 4.28 0.806 0.165 3.94 4.62 1 5 SBSA 42 4.22 0.512 0.079 4.06 4.38 3 5 Total 146 4.30 0.575 0.048 4.20 4.39 1 5 Mean_Factor4 Absa 80 3.77 0.711 0.080 3.61 3.93 2 5 FNB 24 3.86 0.617 0.126 3.60 4.12 3 5 SBSA 42 3.71 0.606 0.094 3.52 3.90 2 5 Total 146 3.77 0.665 0.055 3.66 3.87 2 5 Mean_Factor5 Absa 80 4.16 0.685 0.077 4.01 4.32 3 5 FNB 24 3.78 1.043 0.213 3.34 4.22 1 5 SBSA 42 4.07 0.712 0.110 3.85 4.29 1 5 Total 146 4.07 0.769 0.064 3.95 4.20 1 5 Mean_Quality_Internet_ Absa 80 4.05 0.555 0.062 3.93 4.18 3 5 Banking FNB 24 4.01 0.683 0.139 3.72 4.30 1 5 SBSA 42 4.03 0.462 0.071 3.89 4.18 3 5 Total 146 4.04 0.550 0.046 3.95 4.13 1 5
68 Chapter FIVE INTERPRETATION OF RESULTS
5.1 Introduction. In this chapter the results presented in Chapter four are interpreted and discussed. The findings and issues picked up including limitations of the study are also discussed. The findings are also linked to the literature that was reviewed
5.2 Findings The findings below were made in respect of the three biographical variables (gender, age and primary bank) in the survey, • Gender It was observed that the p-values between males and females across all five dimensions were insignificant. This then indicates that there are no differences in perception or opinion on Internet Banking service quality between males and females. • Age The p-values across all variables for the two identified age groups (35 and younger and older that 36) showed no significant difference. The overall mean on the quality of Internet Banking was 0.535 for respondents 35 years and younger compared to 0.563 for respondents 36 years and older. This indicates age does not play a major role in influencing the respondents’ perceptions on Internet banking service quality. • Primary bank The Kruskal-Wallis Test in appendix VI indicates that there are no significant differences in the rankings across all dimensions from the respondents. These insignificant differences in the rankings imply that the quality of Internet Banking service delivered by the different banks is perceived in a similar manner by the respondents.
From the frequency distribution Table in Appendix I, it was observed that the majority of the respondents gave a perception that they were satisfied with all the five dimensions of Internet Banking service. The overall p-value for quality of Internet Banking service was 4.03 as shown in the normality distribution curve in Appendix II, implying that respondents were satisfied with all the five extracted dimension of Internet Banking service quality. One particular dimension that showed a neutral
69 perception with a lowest p-value of 3.7 was that of responsiveness. This dimension comprised of the following variables: • The bank gives prompt responses to my requests by e-mail or other means • The bank is easily accessible by phone • The bank quickly resolves problems I encounter with my Internet Banking transactions • The bank’s site makes accurate promises about the services delivered
The neutral or indifferent perception on these variables implies that the banks can improve overall satisfaction of Internet Banking service quality by: • Giving prompt response to customers’ requests sent by e-mail or any other means. • Ensuring that the banks are easily accessible by phone • Ensuring that the banks quickly resolves problems customers encounter with Internet Banking transactions • Committing to service delivery promises made on their banking sites.
5.3 Findings linked to the literature
5.3.1 Characteristics of service Zeithaml et al. (2006:21) summarise the characteristics of services that distinguish it from products as intangibility, heterogeneity, simultaneous production and consumption and perishability. Heterogeneity as one of the characteristics of service played a major role in the assessment of the responsiveness dimension of service. The quality of any service will vary when offered by different employees at different times. Baron and Harris (2003:20) say organisations providing services know that no two service provisions are exactly the same, whatever the attempts to standardise them. It is for this reason that it is not surprising that respondents were indifferent on the responsiveness dimension of Internet Banking service quality.
5.3.2 Responsiveness in service recovery Parasuraman et al. (2005:230) on their research on electronic service quality (E-S- Q), a multiple item scale for assessing electronic service quality, came up with five managerial implications as described in Chapter Two. From these managerial
70 implications one finding that came up as an area of concern from the analysis of the survey results was that of the responsiveness dimension. This dimension covers variables such as communications with customers and solving customers’ problems which are in line with service recovery. This dimension indeed mirrors aspects of traditional service such as ready access to company personnel and solving customers’ problems. The respondents were neutral and indifferent on this dimension. The critical incident technique as defined by Johnston (1995:65) indicates that responsiveness is the crucial determinant of quality, as it is the key component in providing satisfaction and the lack of it is a major source of dissatisfaction
5.3.3 GAPS model The GAPS model as illustrated in Figures 2.2 depicts non-responsiveness as one of the major gaps that could contribute to the customer dissatisfaction of service quality. In this study responsiveness was one of the dimensions where respondents were most indifferent compared to the other four dimensions. According to Zeithaml et al., (2006:34) the gaps occurring within the organization providing the service include: • Gap1 is about not knowing what customers want. • Gap2 refers to not selecting the right service designs and standards. • Gap3 refers to not delivering to service designs and standards. • Gap4 is about not matching performance to promise. In this study the responsiveness dimension was the one where respondents were indifferent.
The overall satisfaction of Internet Banking service quality in this study was skewed to the right implying that respondents were generally satisfied with the level of service quality. The two most critical and influential dimensions were that of efficiency and fulfilment. In the literature Parasuraman et al. (2005:230) describe these two dimensions as follows: efficiency and fulfilment were the most critical and important facets of the Website service quality. Of the four E-S-Q dimensions, customers’ assessments of a Website on these two dimensions had the strongest influence not only on the overall quality perceptions but also on perceived value and loyalty intentions. The systems availability facet of the Websites was also the critical contributor to customers’ perceptions of overall quality, value and loyalty intentions.
71 5.3.4 Modified theoretical model
Figure 5.1: The initial and modified theoretical model
A modified theoretical model was developed based on the conducted Principal Component Analysis (PCA) and Cronbach’s Alpha Test of reliability. The Principal Component Analysis has proven the incongruity of the division of the initial eight theoretical quality dimensions, thus requiring the rearrangement of the dimensions into five new quality dimensions. Based on the results presented in Table 4.4 (the rotated factor matrix) it was concluded that from the initial eight dimensions the following five dimensions can be constructed: efficiency (the service is quick, easy to use, and it addresses customer needs), fulfilment (speed of loading and availability refer to the ability of customers to get to the Website and do banking), security (assurance, trust, and privacy), responsiveness (communications and fulfilment which incorporates accuracy of service promises) and contact (contact details available, and availability of customer service support). The initial and modified theoretical models are graphically illustrated in Figure 5.1 above.
72 5.4 Limitations to the study As with any research, there were limitations to this study. Firstly, the respondents’ lists that would allow for random sampling were not readily available. The sample used was a non-probability sample because it is was a convenience one. Projecting results beyond a specific sample in a non-probability sample (convenience) might be inappropriate. Zikmund (2003:382) points out that convenience samples are best used for exploratory research when additional research will subsequently be conducted with a probability sample.
The instrument used, only measured the level of customer satisfaction with different dimensions characterising Internet Banking services quality, but does not show the relative importance of each dimension in comparison to the others.
5.5 Conclusion The following conclusions can be arrived at based on the research results analysis and interpretation. The overall respondents’ perception of Internet Banking service quality was skewed to the right, indicating a satisfactory perception. There was no difference in perception of Internet Banking service quality based on age, gender or primary bank of the respondents. This implies that Internet Banking service quality perceptions are not influenced by respondents’ age, gender or bank. The only service quality dimension where the respondents exhibited a neutral stance was that of responsiveness. Lastly, the instrument used in the survey was reliable and the results obtained can be trusted as they have been proven to be valid.
73 Chapter SIX CONCLUSION AND RECOMMENDATIONS
6.1 Summary of research objectives and major findings Banks have invested heavily in introducing and making Internet Banking service, with the objective of improving customer satisfaction and loyalty, ultimately contributing positively to income and profits. This study’s purpose was to explore customer’s perceptions on key electronic service dimensions or factors of Internet Banking service quality. The survey was done with a primary objective of having an insight into Internet Banking service quality as offered by South African banks. The secondary objective was to determine if there were any differences in perceptions on Internet Banking service quality based on gender, age or primary banking institution.
The major findings of the research study were: • Customers were generally satisfied with Internet Banking service quality. • Internet Banking customers’ perception on the responsiveness dimension of service quality was neutral or indifferent. This dimension relates to service recovery with variables like: the bank giving prompt responses to customer requests; being easily accessible by phone; speed of resolving problems encountered with Internet Banking and banks making accurate promises about the services they deliver on their Websites. • The variables where the frequency scores were indicating a level of dissatisfaction were in line with the variables where a level of neutrality was indicated. • There were no significant differences in perceptions of Internet Banking service quality, based on gender, age or primary bank offering Internet Banking services.
O’Neill, Palmer and Wright (2003:281) concluded that the winners in the online market space will be those who consistently provide compelling, user-friendly and responsive online service experiences. Overall Internet Banking customers in South Africa are satisfied with Internet Banking service quality. However, attention needs to be given to the service recovery dimension of Internet Banking service which was identified as responsiveness. These findings mean that Internet Banking service quality is not
74 influenced by gender, age or the bank offering the service. People of different age and gender have similar Internet Banking service expectations. Lastly the study indicated that the respondents evaluated Internet Banking service quality on five key dimensions: efficiency, performance, security, responsiveness and contact
6.2 Recommendations As outlined in the limitations section of this study it is important to further develop the instrument in order to better understand Internet Banking service dimensions and their relative importance as perceived by customers. The analysis of the survey includes implications to bank mangers as far as satisfaction levels of their customers on different aspects of Internet Banking are concerned.
The respondents in this study have shown the highest level of indifference or dissatisfaction with aspects of Internet Banking service quality such as the bank giving prompt responses to customer requests or complaints, being easily accessible by phone, speed of resolving problems encountered with Internet Banking and banks making accurate promises about the services they deliver on their sites. Bank managers should improve on the following responsiveness or service recovery aspects of Internet Banking service: • An improved and closely managed customer complaint management system and process with tight service levels agreements in place. • Ensuring that all contact details given on the banks’ information and banking Websites are manned and relevant responses are given to customers within reasonable time frames. • Ensuring that there is proper feedback given to customers on their requests. Proper feedback might also include an acknowledgement of the request with a commitment of timelines for resolution. • Ensuring that the banks meet all obligations and promises that are made on their Websites.
The results of the analysis indicate that banks perform relatively well on aspects of Internet Banking such as service efficiency (the service is quick, easy to use, and it addresses customer needs), fulfilment (speed of loading and availability which refer to the ability of customers to get to the Website and do banking). It is recommended that banks keep on innovating in this area as more and many customers are starting
75 to bank online. Banks must always try to exceed the customers’ expectations. This is one critical area of Internet Banking service that could impact the overall satisfaction negatively if it were to be allowed to deteriorate or not leave up to customers’ expectations.
Bank managers do not need to segment the market by gender or age to achieve Internet Banking service quality because the results of this study have revealed that there is no significant gender-based or age-based difference in so far as Internet Banking service quality is concerned. .
6.3 Suggestions for further study The instrument used in this study, only measured the level of customer satisfaction with different dimensions characterising Internet Banking services quality. The instrument fell short of showing the relative importance of each dimension in comparison to the others. It is suggested that a further study on Internet Banking service quality be undertaken where the relative importance of the dimensions is tested. The importance-performance analysis (IPA) approach is built around customer-perceived importance of quality attributes and attributes of performance, the interplay of which suggests strategies for service improvement and satisfaction management (Ibrahim et al., 2005:479).
Time permitting and a list of customers using Internet banking available, probability sampling method could be used to ensure that the survey sample is representative of the population.
In view of the relative immaturity of online banking, other interesting areas for further research include: • A comparison of online banking service quality with traditional service-quality models. • An exploration of the difference in customer expectations and perceptions between online environment and traditional channels.
76 REFERENCES
Akinci A, Aksoy S & Atilgan E. 2004. Adoption of Internet Banking amongst sophisticated consumer segments in an advanced developing country. The International Journal of Bank Marketing, 22(3):212-232. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-03-03].
Bahia K. & Nantel J. 2000. A reliable and valid measurement scale for the perceived service quality of banks. International Journal of Bank Marketing, 18(2):84-91. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-08-09].
Barnes SJ & Vidgen R. 2003. Measuring Website quality improvements: A case study of the forum of strategic management, Industrial Management and Data Systems, 103(5):297-309. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-08-14].
Baron S & Harris K. 2003. Services Marketing. 2nd ed. New York: Palgarve Macmillan.
Bateson JEG & Hoffman KD. 1999. Managing Services Marketing. Orlando FL: Dryden.
Bauer HH, Hammerschmidt M &Falk T. 2005: Measuring the quality of e-banking portals. International Journal of Bank Marketing, 23(2):153-175. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-16].
Bradley L & Steward K. 2003. A Delphi study of Internet Banking. Marketing Intelligence and Planning, 21(5):272-281. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2007-07-24].
Broderick AJ & Vachirapornuk S. 2002. Service quality in Internet Banking: the importance of customer role. Marketing Intelligence and Planning, 20(6):327-335. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-04-12].
Bucley J. 2003. E-service Quality and the public sector. Managing Service Quality, 13(6):453-462. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-08-11].
Carrillant FA, Jaramillo F & Mulki PJ. 2007. The validity of the SERVQUAL and SERVPERF scales: A meta-analytic view of 17 years of research across five continents. International Journal of Service Industry Management, 18(5):472-490. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-16].
Cronin J.J & Taylor S.A. 1992. Measuring Service Quality: A re-examination and Extension. Journal of Marketing, 56(3):56-58. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-08-10].
Davis D. 2000. Business Research for decision making. 5th ed. Pacific Groove: Thomson Learning.
77 Edvardsson B. 1998. Service quality improvements. Managing Service Quality, 8(2):1142-149. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-01-22].
Elliot AC & Woodward WA. 2007. Statistical Analysis: Quick Reference Guidebook. London:Sage.
Flavian C, Guinalίu M & Torres E. 2006. How bricks-and-mortar attributes affect online banking adoption. International Journal of Bank Marketing, 24(6):406-423. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-04-12].
Goldstuck A. 2004. The Goldstuck Report: Online Banking in South Africa report. Johannesburg.
Gurau C. 20002. Online banking in transition economies: the implementation and development of online banking systems in Romania. International Journal of Bank Marketing, 20(6):285-296. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-07.31].
Ibrahim EE, Joseph M & Ibeh KIN. 2006. Customer perception of electronic service delivery in the UK retail banking sector. International Journal of Bank Marketing, 24(7):475-493. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-17].
Imrie BC, Cadogan JW & McNaughton R. 2002. The service quality construct on a global stage. Managing Service Quality, 12(1):10-18. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-03-03].
Jayawardhena C. Foley P. 2000. Changes in the banking sector: The case of Internet Banking in the UK. Electronic Networking Applications and Policy, 10(1):19-30. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-07-17].
Johnson RA & Wichern DW. 1992. Applied Multivariate Statistical Analysis 3rd ed. New Jersey: Prentice-Hall.
Johnston R. 1995. The determinants of service quality: satisfiers and dissatisfies. International Journal of Service Industry Management, 6(5):53-71. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-08-09].
Jun M & Cai S. 2001. The key determinants of Internet banking service quality: a content analysis. International Journal of Bank Marketing, 19(7):276-29. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2007-09-24].
Kang G & James J. 2004. Service quality dimensions: an examination of Grönroos's service quality model. Managing Service Quality, 14 (4)266-277. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-01-22].
Kenova V & Jonnason P. 2006. Quality of Online Banking Services. Bachelor’s Thesis in Business Administration: Jönköping University.
78 Kurpius SER & Stafford ME. 2006. Testing and Measurement: A user friendly guide. London: Sage
Martins JH. Lobser M & van Wyk HJ. 1996. Marketing Research: A South African Approach. Parow. CTP.
Möls PN. 1998. The Internet and the banks' strategic distribution channel decision. Electronic Networking Applications and Policy, 8(4):331-337. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-04-22].
Mukherjee A & Nath P. 2005. An empirical assessment of comparative approaches to service quality measurement. Journal of service marketing. 19(3):174-184. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-05-26].
Oliver RL. 1980. A cognitive model of the antecedents and consequences of satisfaction decisions, Journal of marketing research (17) 4: 460-469. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-09-04].
O'Neill M, Palmer A & Wright C. 2003. Disconfirming user expectations of the online service experience: Inferred versus direct disconfirmation modelling. Internet Research: Electronic Networking Applications and Policy. 13(4):281-296. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-01-30].
O’Sullivan J, Edmond D & ter Hofstede. 2002. Service Description: A survey of the general nature of services. Distributed and Parallel Database, 12(2):117-133. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008.01-30].
Oppewal H & Vriens M. 2000. Measuring perceived service quality using integrated conjoint experiments. International Journal of Bank Marketing, 18(4):154-169. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-17].
Parasuraman A. 2004. Assessing and improving service performance for maximum impact: Insight from a two decade-long research journey. Performance Measurement and Metrics, 5(2):45-52. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-05].
Parasuraman A, Zeithamal V.A & Malhotra A. 2005. E-S-QUAL: A Multiple-Item Scale for Assessing Electronic Service Quality. Journal of Service Research, 7(3):213-233. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2006-08-08].
Pikkarainen T, Pikkarainen K, Karjaluoto H & Pahnila S. 2004. Consumer acceptance of online banking: An extension of the technology acceptance model. Internet research, 14(3):224-235. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2006-05-29].
Roynolds R.A, Woods R & Baker J.D. 2007. Handbook of Research on Electronic Surveys and Measurements. Hershey. Idea Group.
Rowley J. 2006. An analysis of the literature: Towards a research agenda. Internet research, 16(3):339-359.Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-01-30].
79 Santos J. 2003. E-service quality: a model of virtual service quality dimensions. Managing Service Quality, 13(3):233-246. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-07-08].
Sathye M. 1999. Adoption of Internet Banking by Australian consumers: an empirical investigation. International Journal of Bank Marketing, 17(7):324-334. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-05].
Sayar C. & Wolfe S. 2007. Internet Banking market performance: Turkey versus UK. International Journal of Bank Marketing, 25(3):122-141. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-17].
Schmidt MJ & Hollensen S. 2006. Marketing Research: An International Approach. England: Pearson Education
Singh A.M. 2004. Trends in South African Internet Banking. Aslib Proceedings: New Information Perspectives, 56(3):187-196. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-03-03].
Sohail M.S & Shaikh NM. 2008. Internet Banking and quality of service: Perspectives from a developing nation in the Middle East. Online Information Review, 32(1):58-72. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-04-12].
Sweeney JC & Lapp W. 2004. Critical service quality encounters on the Web: an exploratory study. Journal of Services Marketing, 18(4):276-289. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-01-30].
Yang Z & Fang X. 2004. Online service dimensions and their relationship with satisfaction: A content analysis of customer reviews of securities brokerage. Managing Service Quality, 15(3):302-325. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-08.14].
Zeithaml VA & Bitner MJ. 1996. Services Marketing. New York: McGraw-Hill.
Zeithaml VA, Bitner MJ & Gremler DD. 2006. Services Marketing: Integrating Customer Focus Across the Firm. New York: McGraw-Hill
Zeithaml VA. 2002. Service excellence in electronic channels. Managing Service Quality, 12(3):135-138. Available from Emerald: http://www.emeraldinsight.com/ [Accessed: 2008-02-05].
Zikmund WG. 2003. Business Research Methods, 7th ed. Ohio. Thomson.
80 APPENDICES
Appendix I: Internet Banking Service Quality Frequency Table Quality of Internet Banking Services
Strongly Strongly Disagree Disagree Neutral Agree Agree Total I am able to get to my bank's Internet Banking site Count 2 4 8 69 82 165 quickly. % 1.2% 2.4% 4.8% 41.8% 49.7% 100.0% When my bank promises to do something at a specific Count 3 15 48 66 33 165 time, it keeps its promises. % 1.8% 9.1% 29.1% 40.0% 20.0% 100.0% My bank's internet Banking site is always available for Count 2 12 15 87 49 165 business % 1.2% 7.3% 9.1% 52.7% 29.7% 100.0% My bank's Internet Banking site protects information Count 2 1 27 70 65 165 about my banking behavior. % 1.2% 0.6% 16.4% 42.4% 39.4% 100.0% I have confidence in my bank's Internet Banking Count 1 3 10 86 65 165 Service. % 0.6% 1.8% 6.1% 52.1% 39.4% 100.0% My bank's Internet Banking website design is Count 3 8 30 82 42 165 aesthetically attractive. % 1.8% 4.8% 18.2% 49.7% 25.5% 100.0% My bank gives prompt responses to my request by Count 1 16 46 60 42 165 email or any other means. % 0.6% 9.7% 27.9% 36.4% 25.5% 100.0% My Bank's Internet Banking site pages download Count 4 16 46 61 38 165 quickly all the time. % 2.4% 9.7% 27.9% 37.0% 23.0% 100.0% It is easy for me to find what I want on my bank's Count 4 16 25 81 39 165 Internet Banking site. % 2.4% 9.7% 15.2% 49.1% 23.6% 100.0% My Internet Banking transactions with my bank are Count 1 2 8 69 85 165 always accurate. % 0.6% 1.2% 4.8% 41.8% 51.5% 100.0% My bank's Internet Banking site launches and runs Count 1 10 32 73 49 165 immediately. % 0.6% 6.1% 19.4% 44.2% 29.7% 100.0% I feel safe with all my internet banking transactions. Count 1 5 23 78 58 165 % 0.6% 3.0% 13.9% 47.3% 35.2% 100.0% My bank is well known and has a good reputation. Count 1 5 4 69 86 165 % 0.6% 3.0% 2.4% 41.8% 52.1% 100.0% My bank quickly resolves problems I encounter with Count 2 6 63 65 29 165 my Internet Banking transactions. % 1.2% 3.6% 38.2% 39.4% 17.6% 100.0% My bank's Internet Banking service does have Count 4 11 30 69 51 165 customer support staff available on email and/or % 2.4% 6.7% 18.2% 41.8% 30.9% 100.0% Ittelephonically. is quick to complete a transaction through my bank's Count 1 8 14 69 73 165 Internet Banking site % 0.6% 4.8% 8.5% 41.8% 44.2% 100.0% The functionality delivered through my bank's Internet Count 1 3 13 89 59 165 Banking service effectively address most of my % 0.6% 1.8% 7.9% 53.9% 35.8% 100.0% bankingUsing my needs. bank' Internet Banking service does not Count 2 3 9 83 68 165 require a lot of effort. % 1.2% 1.8% 5.5% 50.3% 41.2% 100.0% The information on my bank's Internet Banking Count 3 9 20 77 56 165 service does not require a lot of effort. % 1.8% 5.5% 12.1% 46.7% 33.9% 100.0% My bank's site makes accurate promises about the Count 1 6 41 78 39 165 services they deliver. % 0.6% 3.6% 24.8% 47.3% 23.6% 100.0% My Bank's Internet Banking site pages download Count 2 19 38 71 35 165 quickly all the time. % 1.2% 11.5% 23.0% 43.0% 21.2% 100.0% My Internet Banking pages do not freeze, after I have Count 4 15 33 71 42 165 entered my login credentials. % 2.4% 9.1% 20.0% 43.0% 25.5% 100.0% My bank's Internet Banking site does not share my Count 3 2 40 60 60 165 personal information with other sites. % 1.8% 1.2% 24.2% 36.4% 36.4% 100.0% My bank's Internet Banking site does provide Count 2 6 15 73 69 165 telephonic contact details % 1.2% 3.6% 9.1% 44.2% 41.8% 100.0%
81 Appendix II: Descriptive Statistics
Q26 What is your gender? Valid Cumulative Frequency Percent Percent Percent Yes Valid Male 83 43.7 51.6 51.6 Female 78 41.1 48.4 100.0 Total 161 84.7 100.0 Missing System 29 15.3 Total 190 100.0
Q27 What is your age? Valid Cumulative Frequency Percent Percent Percent Yes Valid 18 - 24 8 4.2 5.0 5.0 25- 35 82 43.2 50.9 55.9 36 - 49 64 33.7 39.8 95.7 Older than 7 3.7 4.3 100.0 50 Total 161 84.7 100.0 Missing System 29 15.3 Total 190 100.0
Q25 Where you do most of your Internet Banking? Valid Cumulative Frequency Percent Percent Percent Valid Absa 80 42.1 49.7 49.7 FNB 24 12.6 14.9 64.6 Standard Bank 42 22.1 26.1 90.7 Nedbank 12 6.3 7.5 98.1 Other 3 1.6 1.9 100.0 Total 161 84.7 100.0 Missing System 29 15.3 Total 190 100.0
82 Appendix III: Normality Test Results
TEST FOR NORMALITY Statistic Std. Error Mean_Factor1 Mean 4.09 0.052 95% Confidence Lower Bound 3.99 Interval for Upper Bound Mean 4.19 5% Trimmed Mean 4.13 Median 4.17 Variance 0.443 Std. Deviation 0.666 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -1.142 0.189 Kurtosis 2.444 0.376 Mean_Factor2 Mean 3.97 0.058 95% Confidence Lower Bound 3.86 Interval for Upper Bound Mean 4.09 5% Trimmed Mean 4.02 Median 4.00 Variance 0.562 Std. Deviation 0.750 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -0.882 0.189 Kurtosis 1.187 0.376 Mean_Factor3 Mean 4.29 0.045 95% Confidence Lower Bound 4.20 Interval for Upper Bound Mean 4.38 5% Trimmed Mean 4.32 Median 4.40 Variance 0.330 Std. Deviation 0.574 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -1.319 0.189 Kurtosis 5.393 0.376 Mean_Factor4 Mean 3.74 0.053 95% Confidence Lower Bound 3.64 Interval for Upper Bound Mean 3.85 5% Trimmed Mean 3.75 Median 3.80 Variance 0.464 Std. Deviation 0.682 Minimum 2
83 Maximum 5 Range 3 Interquartile Range 1 Skewness -0.140 0.189 Kurtosis -0.296 0.376 Mean_Factor5 Mean 4.06 0.059 95% Confidence Lower Bound 3.94 Interval for Upper Bound 4.18 Mean 5% Trimmed Mean 4.11 Median 4.00 Variance 0.571 Std. Deviation 0.756 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -0.998 0.189 Kurtosis 2.497 0.376 Mean_Quality_Internet_Banking Mean 4.03 0.043 95% Confidence Lower Bound 3.95 Interval for Upper Bound Mean 4.12 5% Trimmed Mean 4.05 Median 4.04 Variance 0.304 Std. Deviation 0.552 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -0.891 0.189 Kurtosis 2.790 0.376
84
Appendix IV: Reliability Test Results Fulfilment Case Processing Summary N % Cases Valid 165 86.8 Excluded(a) 25 13.2 Total 190 100.0 a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha N of Items 0.881 5
Item Statistics Mean Std. Deviation N q21 3.72 0.968 165 q22 3.80 1.001 165 q11 3.96 0.890 165 q3 4.02 0.890 165 q1 4.36 0.789 165
Item-Total Statistics Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if Item Deleted Item Deleted Correlation Deleted q21 16.15 8.861 0.739 0.850 q22 16.07 8.538 0.772 0.842 q11 15.90 9.100 0.776 0.842 q3 15.84 9.597 0.665 0.867 q1 15.50 10.215 0.638 0.874 Efficiency Case Processing Summary N % Cases Valid 165 86.8 Excluded(a) 25 13.2 Total 190 100.0 a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha N of Items 0.868 6
Item Statistics Mean Std. Deviation N q19 4.05 0.919 165 q18 4.28 0.756 165 q16 4.24 0.849 165 q6 3.92 0.890 165 q9 3.82 0.983 165 q17 4.22 0.719 165
Item-Total Statistics Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if Item Deleted Item Deleted Correlation Deleted q19 20.49 10.556 0.761 0.828 q18 20.26 11.865 0.674 0.845 q16 20.30 11.152 0.718 0.836 q6 20.62 11.297 0.644 0.849 q9 20.73 11.065 0.598 0.861 q17 20.32 12.256 0.630 0.853
85 Security Case Processing Summary N % Cases Valid 165 86.8 Excluded(a) 25 13.2 Total 190 100.0 a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha N of Items 0.816 5
Item Statistics Mean Std. Deviation N q12 4.13 0.808 165 q4 4.18 0.814 165 q5 4.28 0.712 165 q10 4.42 0.700 165 q13 4.42 0.741 165
Item-Total Statistics Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if Item Deleted Item Deleted Correlation Deleted q12 17.30 5.127 0.674 0.759 q4 17.25 5.301 0.610 0.780 q5 17.16 5.646 0.619 0.777 q10 17.01 5.780 0.588 0.786 q13 17.02 5.750 0.548 0.797 Responsiveness Case Processing Summary N % Cases Valid 165 86.8 Excluded(a) 25 13.2 Total 190 100.0 a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha N of Items 0.791 5
Item Statistics Mean Std. Deviation N q7 3.76 0.962 165 q8 3.68 1.011 165 q14 3.68 0.847 165 q2 3.67 0.957 165 q20 3.90 0.824 165
Item-Total Statistics Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if Item Deleted Item Deleted Correlation Deleted q7 14.94 7.435 0.620 0.735 q8 15.02 7.725 0.510 0.775 q14 15.02 8.030 0.597 0.745 q2 15.03 7.700 0.564 0.754 q20 14.81 8.206 0.578 0.751
86 Contact Case Processing Summary N % Cases Valid 165 86.8 Excluded(a) 25 13.2 Total 190 100.0 a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha N of Items 0.765 3
Item Statistics Mean Std. Deviation N q24 4.22 0.849 165 q23 4.04 0.906 165 q15 3.92 0.988 165
Item-Total Statistics Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if Item Deleted Item Deleted Correlation Deleted q24 7.96 2.669 0.630 0.654 q23 8.14 2.682 0.551 0.735 q15 8.26 2.304 0.620 0.661
All Dimensions Case Processing Summary N % Cases Valid 165 86.8 Excluded(a) 25 13.2 Total 190 100.0 a. Listwise deletion based on all variables in the procedure.
Reliability Statistics Cronbach's Alpha N of Items 0.935 24
Item Statistics Mean Std. Deviation N q1 4.36 0.789 165 q2 3.67 0.957 165 q3 4.02 0.890 165 q4 4.18 0.814 165 q5 4.28 0.712 165 q6 3.92 0.890 165 q7 3.76 0.962 165 q8 3.68 1.011 165 q9 3.82 0.983 165 q10 4.42 0.700 165 q11 3.96 0.890 165 q12 4.13 0.808 165 q13 4.42 0.741 165 q14 3.68 0.847 165 q15 3.92 0.988 165 q16 4.24 0.849 165 q17 4.22 0.719 165 q18 4.28 0.756 165 q19 4.05 0.919 165 q20 3.90 0.824 165 q21 3.72 0.968 165 q22 3.80 1.001 165 q23 4.04 0.906 165 q24 4.22 0.849 165
87 Item-Total Statistics Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if Item Deleted Item Deleted Correlation Deleted q1 92.37 162.064 0.631 0.932 q2 93.06 160.362 0.581 0.933 q3 92.71 161.915 0.559 0.933 q4 92.55 161.859 0.621 0.932 q5 92.45 163.079 0.648 0.932 q6 92.81 160.214 0.637 0.932 q7 92.97 161.981 0.509 0.934 q8 93.05 165.498 0.340 0.937 q9 92.92 160.298 0.566 0.933 q10 92.31 163.971 0.609 0.933 q11 92.77 159.312 0.680 0.931 q12 92.60 162.010 0.618 0.932 q13 92.32 163.632 0.590 0.933 q14 93.05 160.839 0.643 0.932 q15 92.81 159.727 0.587 0.933 q16 92.49 159.471 0.707 0.931 q17 92.51 162.751 0.660 0.932 q18 92.45 162.554 0.635 0.932 q19 92.68 159.207 0.660 0.932 q20 92.84 161.260 0.642 0.932 q21 93.02 159.518 0.610 0.932 q22 92.93 158.624 0.624 0.932 q23 92.69 162.947 0.501 0.934 q24 92.52 163.190 0.528 0.933
88 Appendix V New Service Dimensions Labels
Variables Content of each question New dimension (Questions) label Q19 The information on my bank’s Internet Banking site is well organised and is easy to follow. Efficiency Q18 Using the bank’s Internet Banking service does (The service is not require a lot of effort quick, easy to use, Q16 It is quick to complete a transaction through my and it addresses bank’s Internet Banking site. customer needs) Q6 The Internet Banking website design is aesthetically attractive Q9 It is easy for me to find what I want on my bank’s Internet Banking site Q17 The functionality delivered through my bank’s Internet Banking site effectively addresses my banking needs.
Q21 My bank’s Internet Banking site pages loads fast Fulfilment all the time. (Speed of loading Q22 The Internet Banking pages do not freeze, after I and availability it have entered my log-in credentials. also refers to the Q11 The bank’s Internet Banking site launches and ability of customers runs right away to get to the Q3 The Internet Banking site is always available for Website and do business banking) Q1 I am able to get to my bank’s Internet Banking site quickly
Q12 I feel safe with all my Internet Banking Security transactions (Assurance, Trust, Q4 The Internet Banking site protects information security and about my banking behaviour. privacy) Q5 I have confidence in the bank’s service
89 Q10 My Internet Banking transactions with the bank are always accurate
Q7 The bank gives prompt responses to my Responsiveness requests by e-mail or other means (Communications Q8 The bank is easily accessible by phone and fulfilment which Q14 The bank quickly resolves problems I encounter incorporates with the my Internet Banking transactions accuracy of service Q20 The bank’s site makes accurate promises about promises ) the services delivered
Q24 My bank’s Internet Banking site does provide Contact telephonic contact details (contact details Q23 My bank’s Internet Banking site does not share available, and my personal information with other sites availability of Q15 The Service does have customer support staff customer service available online and telephonically. support)
90 Appendix VI: The Kruskal- Wallis Test
Kruskal-Wallis Test
Ranks
Who is your primary bank; i.e. Where you do most of your online Banking? N Mean Rank Mean_Factor1 Absa 80 72.96 FNB 24 76.60 SBSA 42 72.75 Total 146 Mean_Factor2 Absa 80 71.95 FNB 24 73.85 SBSA 42 76.25 Total 146 Mean_Factor3 Absa 80 76.03 FNB 24 79.04 SBSA 42 65.51 Total 146 Mean_Factor4 Absa 80 74.95 FNB 24 79.35 SBSA 42 67.39 Total 146 Mean_Factor5 Absa 80 76.90 FNB 24 62.19 SBSA 42 73.49 Total 146 Mean_Quality_Internet_ Absa 80 74.62 Banking FNB 24 76.90 SBSA 42 69.43 Total 146
Test Statistics(a,b) Asymp. Chi-Square df Sig. Mean_Factor1 0.157 2 0.924 Mean_Factor2 0.289 2 0.865 Mean_Factor3 2.240 2 0.326 Mean_Factor4 1.443 2 0.486 Mean_Factor5 2.299 2 0.317 Mean_Quality_Internet_ 0.601 2 0.741 Banking b.a. GroupingKruskal Wallis Variable: Test Who is your primary bank; i.e. Where you do most of your online Banking?
91 Appendix VII: SURVEY COVERING LETTER
Dear Prospective Respondent
You are hereby invited to complete a survey on Internet Banking service quality in SA as part of my dissertation that I will be submitting in fulfilment of the requirements for the degree in Magister Commercii in the faculty of Management at the University of Johannesburg.
Topic: An assessment of Internet Banking Service Quality.
The objective of the study is to get an insight into the perceptions of online banking customers in South Africa on Internet Banking service quality. The questionnaire will take approximately only 8 - 12 minutes to complete, confidentiality is guaranteed and your co-operation in this regard is highly appreciated.
To access the survey please click on the hyperlink below or copy and paste the link into your web browser http://take-survey.com/statkon2/Quality_of_Internet_Banking_Services.htm
Thanking you in advance
Masopha Molapo Study Leader: Cor Scheepers M.Com Business Management Student Faculty of Business Management University of Johannesburg University of Johannesburg [email protected] http://www.uj.ac.za/
92 Appendix VIII: SURVEY QUESTIONNAIRE
Quality of Internet Banking Services survey
Do you make use of Internet Banking Services?
Yes No
Continue
Based on your personal experiences as an Internet Banking Service user, please indicate to what extent you agree or disagree with each of the statements below in relation to your primary bank's Internet Banking service. Your primary bank in the questionnaire will always refer to the bank with which you do most of your online banking transactions. Strongly Strongly Disagree Neutral Agree Disagree Agree 1 2 3 4 5 1. I am able to get to my bank's Internet Banking site quickly. 2.When my bank promises to do something at a spesific time, it keeps its promise. 3. My bank's Internet Banking site is always available for business. 4. My bank's Internet Banking site protects information about my banking behaviour. 5. I have confidence in my bank's Internet Banking service. 6. My bank's Internet Banking website design is aesthetically attractive. 7. My bank gives prompt responses to my requests by e-mail or any other means. 8. My bank is easily accessible by phone. 9. It is easy for me to find what I want on my bank's Internet Banking site. 10. My Internet banking transactions with the bank are always accurate. 11. My bank's Internet Banking site launches and runs immediately. 12. I feel safe with all my Internet banking transactions 13. My bank is well known and has a good reputation. 14. My bank quickly resolves problems I encounter with my Internet Banking transactions 15. My bank's Internet Banking service does have customer support staff available on e-mail and/or telephonically. 16. It is quick to complete a transaction through my bank's Internet Banking site. 17. The functionality delivered through my bank's Internet Banking service effectively addresses most of my banking needs. Appendix IV
93 Strongly Strongly Disagree Neutral Agree Disagree Agree 1 2 3 4 5 1. I am able to get to my bank's Internet Banking site quickly. 2. When my bank promises to do something at a specific time, it keeps its promise. 3. My bank's Internet Banking site is always available for business. 4. My bank's Internet Banking site protects information about my banking behaviour. 5. I have confidence in my bank's Internet Banking service. 6. My bank's Internet Banking website design is aesthetically attractive. 7. My bank gives prompt responses to my requests by e-mail or any other means. 8. My bank is easily accessible by phone. 9. It is easy for me to find what I want on my bank's Internet Banking site. 10. My Internet Banking transactions with the bank are always accurate. 11. My bank's Internet Banking site launches and runs immediately. 12. I feel safe with all my Internet Banking transactions 13. My bank is well known and has a good reputation. 14. My bank quickly resolves problems I encounter with my Internet Banking transactions 15. My bank's Internet Banking service does have customer support staff available on e-mail and/or telephonically. 16. It is quick to complete a transaction through my bank's Internet Banking site. 17. The functionality delivered through my bank's Internet Banking service effectively addresses most of my banking needs. 18. Using my bank's Internet Banking service does not require a lot of effort. 19. The information on my bank's Internet Banking site is well organised and is easy to follow. 20. My bank's site makes accurate promises about the services they deliver. 21. My bank's Internet Banking site pages download quickly all the time. 22. The Internet Banking pages do not freeze, after I have entered my login credentials. 23. My bank's Internet Banking site does not share my personal information with other sites. 24. My bank's Internet Banking site does provide telephonic contact details. Continue
94 Please provide the following information: 25. Who is your primary bank; i.e. Where you do most of your online Banking? (Please choose one only)
Absa
FNB
SBSA
Nedbank Other (Please specify) 26. What is your gender?
Male Female 27. What is your age?
Younger than18
18 - 24
25 - 35
36 - 49 Older than 50 28. How long have you been using Internet Banking?
Less than 3 months
3 - 12 months More than 12 months 29. How do you access your Internet Banking site? (Most of the time)
Home - Dial-up access
Home - Fixed line or wireless broadband
My employer's network Other (Please specify)
95