The International journal of analytical and experimental modal analysis ISSN NO: 0886-9367

CUSTOMER PREFERENCES AND SATISFACTION OF VARIOUS E-BANKING SERVICES IN

*Prajeesh. P., Research Scholar,

**Dr. Kavitha S. Professor

*, **PG & Research Department of Commerce,

*, **J.J. College of Arts and Science, (Autonomous) (Affiliated to Bharathidasan University),

J J Nagar, Sivapuram, Pudukkotai - 622 422

Abstract Technology-oriented delivery channels like internet banking, tele-banking, mobile banking, ATMs etc.; have created a win-win situation by extending greater convenience and numerous choices for customers while providing tremendous cost advantages to the banks. Now a day’s all the banks are providing mobile banking facilities in the state. Some of the banks are in the course of making this service accessible to their customers as fast as possible. The scope of the study is limited to a thorough analysis of the e-banking services utilized by the selected household bank customers belonging to Ernakulam District of Kerala state. The study is descriptive in nature and both primary and secondary data were used for conducting the study Inferences associated with the purposes for the customers’ bank visit divulge that the most important reason is to deposit cash or cheque followed by taking demand draft and with drawing cash and Level of awareness of middle aged and older groups are on the lower side in the case of internet banking transactions, how to use online banking, availability of mobile banking and mobile banking transactions are the major findings of the study. Keywords: Customers, E-Banking, Financial Institutions, Technology, E-Services.

I. Introduction Today, banks have to lay emphasis on smaller deposits and smaller advances and develop their operating proficiency significantly. Diverse banking choices have equipped the customer. Majority of the bank customers these days do not access the branch premises for their basic transaction requirements. Transactions are done through distribution mechanisms such as ATMs, via the internet and even over the mobile. Today customers demand banking services 24/7, so, many banks have launched extended business hours such as '8 to 8' banking and 'Sunday Banking'. Customers do not wish to carry cash and this has led to the use of various forms of plastic cards such as credit cards, debit cards and smart cards. Certain banks have introduced world ATM card to guarantee that travellers across the globe are more safe and secure.

Kerala is bestowed with highly sophisticated banking infrastructure. Over the course of time, the banking sector of Kerala has attained great progress with a large number of nationalized, commercial and new generation banks in its repertoire. Along with this a large number of Gramin banks have also been established within the state. In fact, there was a rise in the number of banks following the nationalization of the banks in 1969. The (SBI), and are the major nationalized banks in Kerala. In addition to them, private commercial

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banks like , , Catholic Syrian Bank, Dhanalakshmi Bank and new generation banks like ICICI, HDFC, etc also offer excellent financial intermediary services. Furthermore there are around two thousand Primary Agricultural Credit Co-operative Banks in Kerala.

Kerala boasts of a large number of banking and financial institutions. Apart from the PSUs, a plethora of leading private banks such as HDFC Bank, ICICI Bank, etc. have established a network of retail branches and ATMs for the inhabitants of the state. Along with the traditional products these offer a wide variety of financial services particularly Non-Resident Indians (NRI) services with respect to the range of Malayali Diaspora. Mutual funds, financial lending institutions and other such services are readily obtainable in the state.

Keralites enjoy a high standard of living now. Its economy is escalating to greater heights. A key factor responsible for this advancement is the increasing number of NRIs in the state. Kerala's total number of emigrants rose from 1.36 million in 1998to 1.83 million in 2003 and among them, close to 90% is in Middle East. Major chunk of their savings is deposited in banks here. The non- resident deposits rose toRs.32955 crores comprising 38.42% of the total deposits of the banks in the state. As a result of the profusion of NRI deposits, the mobilization of home deposits appears to be playing second fiddle.

Kerala has a prolonged history of sound banking habits. The repayment culture in Kerala is excellent matched to that of other states. The response to ATMs has been nothing short of outstanding even from rural folk and those like autorikshaw drivers. Kerala attained the status of a 'Total Banking State' in 2011 census. According to that every family in the state has at least one bank account and would be worthy for annual purpose loan up to Rs.25000.

Remarkable changes have been taking place in the savings patterns of the people of Kerala. Earlier people used to be 'debt shy' i.e., they saved and bought a two wheeler or a carer a house. But now people buy first and pay Equated Monthly Instalment (EMI)’s; that is, they have turned out to be 'debt loving'. That is the key difference. While it was considered obtrusive to borrow earlier, today, there is barely anybody without a loan. Youngsters prefer to buy a vehicle immediately after getting a job. When all their important needs are realized, they start saving. As a result, banks are targeting the youth now. Traditional banks are also changing to fit into the scenario by opening some branches till 8pm, to counter the competition from new generation banks.

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Technology Based Banking Most banks, specifically the new generation banks, have incorporated themselves with the fast changing banking technology and deliver faster products to customers. It is the customer care that has induced bankers to adopt technology. For traditional banks, technology was the only downside but now they have well-nigh caught up with the new in that area. Transition period, even though tough, is inevitable. Motivated by the challenges of competition, rising customer expectations and dwindling margins, banks have been using technology to decrease cost and enhance efficiency, productivity and customer conveyance. Technology-oriented delivery channels like internet banking, tele-banking, mobile banking, ATMs etc.; have created a win-win situation by extending greater convenience and numerous choices for customers while providing tremendous cost advantages to the banks.

Internet banking is a bourgeoning phenomenon in Kerala. The popularity of internet banking culture depends on the facilities presented by banks. Superior facilities can always appeal to more customers. In this respect it can always be seen that private banks are way ahead of public sector banks. ICICI bank launched internet banking in Kerala in 1997. Federal bank introduced internet banking services in 2000 through Fednet. It was the first Kerala based bank to proffer internet banking services in the state. As far as Cochin is concerned, the forerunners in offering internet banking services are the ICICI and the Federal bank. In the case of the PSBs, SBI and (SBT) are the leading bankers. SBI delivers online banking services through Online SBI. It was operational from 2004. When compared to new generation and Kerala based banks, nationalized banks have few online banking customers. Mobile banking is the lately introduced e- banking delivery channel in the state.

It is the new generation banks who are the forerunners in proffering mobile banking services. Nearly all the banks are now providing mobile banking facilities in the state. Some of the banks are in the course of making this service accessible to their customers as fast as possible.

In relation to the past, customers coming to the banks in Kerala now are quite different. They anticipate quality service, respect, courtesy and class. The customer is more aware about banking, he knows about his options, he is more demanding, he is mindful of his bargaining capability. Allegiance to a specific bank is a thing of past. Expectations of different types of customers are diverse and are ever growing. The customer is more cognizant of quality facilities; they are expecting promptness, convenience at low cost. Some of the customers recognize that they can get better service from private and foreign banks. Banks proffer tangible services which alone cannot satisfy the customers, who expect meaningful intangible services, which could be

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experienced like conduct and competence of staff, pace of transactions and the ambience. When the customer experience an increasing lacuna between the expectations and experience, the result is lodging customer complaints against the banks. Although computerization has been made contributory in attaining an advanced level of integrity, liability and lucidity in their processes, banks have implemented computers essentially to ensure enhancement in the degree and quality of services proffered by them to their customers.

II. Objectives of the Study The main objectives of the study are; 1. To study the impact of technology in encouraging the customers of banks in Kerala. 2. To identify the level of awareness of customers regarding various E-Banking services according to the type of bank, age, and income. 3. To identify the perception of customers towards various E-banking Services 4. To study the customer preferences of various E-Banking services and to evaluate the level of satisfaction of the customers

III. Scope of the Study The scope of the study is limited to a thorough analysis of the e-banking services utilized by the selected household bank customers belonging to Ernakulam District of Kerala state. As Ernakulam (Cochin) is the first fully literate district in Kerala, this study has a broader scope. The present study got underway with an analysis of the general banking practices of the respondents. Later, it laid emphasis on the electronic banking habits of the respondents. Although a wide range of multiple e-banking delivery channels are functioning in the state, the scope of the study is limited to four popular e-banking delivery channels viz.; ATMs, internet banking, mobile banking and credit card.

IV. Significance of the Study The rate of change in banking sector is becoming rapid. The most significant change is the adoption of modern technology in banking sector. For making this change sustainable and contributing to the growth process of the nation, we have to understand the perception of people toward this change. This study lays emphasis on examining the customer’s inclinations, level of awareness, satisfaction and implementation of certain electronic bank delivery channels such as ATMs, internet banking, mobile banking and credit cards. The vitality behind the usage of technology in banking relates to the ever increasing expectations of the customers. Today's bank customers are more challenging and are also more confident in technology compared to their counterparts of the yesteryears.

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The contemporary customers demand instant, anytime and anywhere banking amenities. Unless the banks recognize this and reorient themselves, they will have no future. It is information technology which empowers banks in meeting such tall expectations of the customers. A comprehensive study is critical to identify how far technology has impacted the banking habits of the people of Kerala.

V. Methodology of the Study The study is essentially descriptive in nature and both primary and secondary data were used for conducting the study. Primary data was taken from 150 sample customers of selected banks operating in Kerala. Customer perception was deciphered by conducting an exhaustive survey, using structured and pre-tested questionnaire. A good deal of information was also garnered through direct personal interviews made with the top authorities of the prominent banks in Kerala. Several discussions were also held with the renowned personalities and experts in the field of banking to gather relevant information. Secondary data was garnered from the published sources such as quarterly and annual reports of RBI, SBI, various Commercial banks, reports of the Finance Ministries of Central and State governments, findings of the State Level Banker's Committees, newspapers, magazines, business journals, e-journals, and other banks operating in Kerala.

VI. Sampling Design Since this population is slightly large, it was not pragmatic to conduct a population survey. Hence a sampling study has been conducted. Multi stage Sampling Technique was employed for the study. In the first stage, the district was divided into three dimensions such as Corporation, Municipality and Panchayath. In the second stage, banks working in each sector were divided into three groups such as nationalized banks; Kerala based Scheduled banks and new generation banks. From each group, one bank was selected using simple random sampling technique applying lottery method. Under Corporation sector, Canara bank was selected, South Indian Bank (SIB) from Municipality and Axis bank from Panchayath was taken. In the final stage, 25 customers were chosen from the two bank branches of each bank by means of convenience sampling technique.

VII. Tools used for Study The Classified primary data has been summarized by means of simple mathematical measures like mean and standard deviation, percentages and averages. To assess the statistical difference between mean values, chi-square test, t-test and F-test were used. Factor analysis was conducted to identify the factors impacting the implementation and usage of ATMs and internet banking. Regression analysis was also put into effect to identify how these factors influence the adoption of ATMs and internet banking.

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VIII. Analysis and Findings of the Study

Reliability Test For testing the internal consistency of the scaled statements, reliability analysis by means of Cronbach's Alpha Reliability Test was done. Cronbach's Alpha for these 76 scaled statements was 0.8523 which is greater than the standard Cronbach's Alpha of 0.7. Therefore it is ratified that internal consistency of the scale as a whole is high and the questionnaire can be regarded as highly reliable.

 After having examined the period of association with the bank and the frequency of bank visit, the different reasons for the customers’ bank visit are scrutinised. There are many purposes for customers’ bank visit such as to deposit cash or cheque, to withdraw cash, to transfer money, for taking demand draft, to pay bills, to take loans, to pay interest for loans and to make enquiries and complaints. It is very important for the researcher to discern the key reasons for the customers bank visit. The scrutiny of the various reasons for bank visit divulges that most of the customers visit their bank branches for making deposits.

 The result of age wise study reveals that the older groups have been using the services of the their respective banks for the last ten years followed by middle aged group with seven years and youngsters with four years. On the other hand, it is discovered that even though younger groups are short on experience with the banks as compared to older groups, they are the more dynamic users of banking than their counterparts.

 Education based study shows that professionals and graduates have six years of experience with their banks, for post graduates it is almost eight years, for SSLC group it is seven years and for Pre degree it is only five years. Concerning frequency of bank visit, all education groups have more or less similar habit of visiting their bank branch at least once in a month.

 As far as income is concerned, high income groups have relatively long years of experience in banking as compared to low income groups. Even though it is clear that very high income group has comparatively long years of experience in banking, they are not much active in transacting with their banks.

 Inferences associated with the purposes for the customers’ bank visit divulge that the most important reason is to deposit cash or cheque followed by taking demand draft and with drawing cash. All in all this gives the impression that even though ATMs are very rampant, many customers still access bank branches for withdrawing cash. Findings of the bank based

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classification clearly demonstrates that all the three groups of bank customers give prime importance to depositing cash, but nationalized bank customers give second importance to withdrawal of cash, KSB customers give third importance to this factor.

 Conversely, new generation bank customers give minimal importance to this factor suggesting that they greatly depend on other banking channels for meeting this purpose.

 As far as customers' choice of retail banks are concerned, it divulges that 'convenience' is the most significant factor which impacts the respondents while choosing their bank. The next important influencing factor is 'the bank has an ATM near to home or workplace' followed by 'customer friendly environment in the bank' as the third factor and 'favourable interest rates on loans and deposits' as the fourth factor. The least important factor which impacts the selection of a bank is' advertisements'.

 When it comes to the awareness of electronic bank delivery channels, results clearly point out that all customers are well aware that their respective banks offer the facility of ATMs, different types of transactions done through ATMs and the know-how of using ATMs. When comes to internet banking, majority of the customers are aware that their respective banks offer the facility of internet banking, their level of awareness is low vis-à-vis internet banking transactions and how to use internet banking,.

 In the case of debit card and credit card, majority of the respondents are aware about it and they are intermittently using it.

 Age wise classification reveals that all respondents regardless of their age group have good awareness regarding ATM availability, ATM transactions and how to use ATMs. But when it comes to awareness of all other e-banking products and services it is clear as daylight that youngsters and middle aged are more aware as compared to other age groups.

 Level of awareness of middle aged and older groups are on the lower side in the case of internet banking transactions, how to use online banking, availability of mobile banking and mobile banking transactions.

 All income groups barring very low income group are mindful of the facility of internet banking. But in the case of internet banking transactions and how to use internet banking, level of awareness of all income groups barring high income group, is on the lower side. It is discovered that most of the low income categories are oblivious of these transactions.

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 The information regarding the level of adoption of e-banking products and services divulges that adoption of ATM was highest followed by internet banking, credit card and mobile banking. Among the total respondents, the rate of adoption in the case of ATMs is 96percent, for internet banking, it is 53 percent, for mobile banking, only 48 percent and credit cards it is 38 percent.

 Users of ATMs opine that location and 24 hour availability of ATMs are very convenient for them and they are very much at ease with the same. They also experience that ATM operations are nice and easy for them. Most of the users can access ATMs whenever they need it, and they do not feel that the queues of the ATM are quite long. They also accede that ATM makes banking services easy for them, it is time saving, precise and faster than visiting the bank branch. But majority of the users exhibit apprehension over the security of ATMs. They also reckoned that it is not safe to deposit money through ATMs.

 Results indicate that internet bank user's overall perception of technology used in banking is affirmative; this is obviously echoed in their attitude to internet banking. They are highly interested in employing new methods to conduct banking transactions. They are of the opinion that technology enabled services are not complicated to use. They also pointed out that they are active users of banking and they feel that they are not satisfied with branch banking.

 Nationalized bank customers sometimes experience fear of security while using mobile banking however in the case of Kerala based and new generation bank customers; they hardly experience 'fear of security'. Nationalized bank customers also asserted that they occasionally get indistinct instructions regarding mobile banking transactions. But Kerala based and new generation bank customers affirmed that they rarely get indistinct instructions.

 Most of the customers are contented with their bank's location, quality of services provided by the bank, operating hours of the bank, and the conduct of the staff. But when it comes to commission charged on services, provision of up to-date information and awareness delivered by the banks and parking facility, their overall satisfaction is low.

 As far as usefulness, safety and ease of use are concerned, users are fairly contented with credit cards but in the case of interest charged on transactions, most of the users feel disgruntled. Nationalized bank customer's satisfaction level is on the lower side in the case of all variables, particularly in the case of interest charged on transactions, they feel discontented.

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 Users of internet banking are contented with all the variables. When it comes to security of transactions, level of satisfaction is low as compared to other factors. All in all it is discernible that users are fairly well satisfied with internet banking. Kerala based and new generation bank customers are well contented with internet banking, but the level is on the lower side when it comes to nationalized bank customers. Elder group has the highest level of satisfaction in the case of convenience of internet banking followed by youngsters. Level of satisfaction of middle aged and older groups are more or less same in this regard.

IX. Conclusion The above study suggests that the users of e-banking services have strong progressive perception towards technology used in banking which is mirrored in their adoption and practice of the same while non users obviously demonstrated their apathy and ignorance in using various technology oriented banking services. The study also identifies four perceptual factors such as convenience, perceived risk, and speed of operations and accessibility which impacts the adoption of ATMs wherein convenience, speed of operations and accessibility are positively associated with the adoption of ATMs while perceived risk has negative impact. With respect to internet banking also, four perceptual factors were identified wherein the factors 'convenience' and 'cost effectiveness' have strong positive impact and 'perceived risk' and 'personal contact' have negative impact on internet bank adoption.

Henceforth it can be concluded that, technology has greatly influenced the bank customers motivating them to conduct banking in an innovative manner. The research findings evidently indicate that the drive towards ease of banking and convenience is preferred by the customer and hence banks should find alternative strategic routes designed to enhance service delivery either human based or technology based. Technology will enable the transactions but it will be the man or woman behind the technology who will matter the most and have the final word.

X. Suggestions  Branchless banking processes can be difficult for people who are illiterate or unfamiliar with technology. Making customer conscious of how best to use banking services is crucial. Although this is the responsibility of bank, RBI and government can set the suitable milieu through a well-planned media campaign.

 Banks ought to ascertain safety and confidentiality while delivering services through internet banking. Through customer education, bank managers can eliminate some suspicions that non

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users have with respect to internet banking. So the task to all banks will be to proliferate the internet banking user base and slowly expand the range of services to the customers.

 Customer awareness campaigns are imperative in each location where branchless banking has set the ball rolling. The banking correspondents' roles and responsibilities should be elucidated to existing and prospective customers by the principal banks. Practical demonstration on how to use their cards, mobile phones and validations while transacting should all be included in customer awareness training.

XI. References

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