Consumer perception towards service quality of Internet banking

To perceive customer's notion towards quality aspect of services provided through distant banking programs.

Objectives and scope of study

To provide a detailed account of the services proposed by the finance institutions in the Banking sector through Universal remote Bank ( Internet bank).

Perception of consumer towards the grade of Remote Bank including parameters like (Usability, Convenience, efficiency, performance).

To understand the amount of e-banking visibility of the bank sector (private and general population).

To study the near future prospects and situation in type of the bank sector.


Will conduct a mail structured pilot survey to find out what are the normal concerns & problems faced by the i-service users at the moment. It will give an perception on the future expectations from remote control bank services from user's perspective.

Collecting info. About the various services offered through Far off Banking from information available on the net, written materials and by questioning /interviewing working executives of various banks.

A study to be completed to recognize what the lender service users think about the quality of Remote control bank services offered utilizing a questionnaire, over a representative test of working executives in the age band of 20 - 40 yrs.

Location: Auckland(CBD), New Market

Scaling Technique : Non -Comparative

Research Design : Descriptive (Combination -Sectional)

Sources of Information :Major & Secondary

Sample Technique: Convenient sampling

Analysis on the basis of data gathered through major & secondary options and application of varied marketing tools

Interpretation of data.


Banking sector takes on a vital role in the economies world over, during the past decade the banking sector has been subject to an astronomical change in conditions of technology. Traditional mode of bank is fast loosing earth to "one click banking"(E-Banking). The body below shows the perceived threat by the banks which are in charge of the above transformation.


New Entrant




Porter's 5 Model

Rivalry, competition among rival banking companies can drive the profit of the banking industry to zero. Industry amount is a genuine term indicator of the scope of rivalry on the market. In USA by themselves there are approximately 7000 bankers with around 82000 branched at end of 2008. China's top banking companies constituted to around 67000 branched, there remain 129 different finance institutions in Japan and finally the combined amount of different branches in UK, Francs and Germany exceeded 30000(Wikipedia). With effective use of technology(Launching e-commerce, mobile bank), a bank or investment company can improve its circulation and communication programs thus creating a distinct segment in the intellects of the customer, other finance institutions have to check out suit to maintain the competitive advantage.

Substitute, risk of a substitute prevails when the price elasticity of a product is affected, scheduled to plethora of similar type of product offering. There are always a lots of banking companies operating across the banking industry all round the planet. Customizing product offering or replacing the already existing financial product is a practice(Jayawardhena & Paul Foley). These enhancements in product development and delivering was a pivotal factor for the banking institutions to adopt internet related tools in day to day operations.

New Entrants, because of the increase range of players within the banking industry, the purchasing electricity of the buyers have increased many folds (Jayawardhena & Paul Foley). With a wide spread use of technology and internet adoption there exists sufficient opportunities for financial companies and other "new entrants" to attain the prospective customers and show their uniqueness in terms of product offerings. Perceiving the genuine advantage of using internet technology for achieving the customer, product offering, banking operations becomes even more very important to the participating players of the industry.

Buyers, customers of your standard bank, are perhaps the most crucial assets of an bank. Increased volume of choices across the banking industry leaves the customer with sufficient of choices. Lenders to be able to sustain their customers and raise the customer base have to rely on internet based technology. Prior studies signify that the educated class forms the majority users of internet, they may be high network individuals. Banking companies unable to respond to the demands of the these customers for a new product may conclude loosing them to the competition. Enabling mass communication using internet technology by the lenders can create a distinct segment mind talk about of the customer. In addition, it makes the customer feel important, as it pertains to customizing a fresh product. Internet technology is also a centralized and useful function of advertising for the banking institutions (Jayawardhena & Paul Foley).

Supplier, operational banking companies in the sector. With an increased range of financial services service provider in the banking sector, it often becomes a head ache for the clients to choose. Customers of the bank know that moving over their loan company would lead to altering product requirements and turning cost(Michael E. Porter). Internet allowed tools like Siebel internet bank, sales platform are being used by the lenders to keep up transparency with the clients. Creating products after taking in the requirements of the clients acts as a tool for keeping customers. In the bank's viewpoint using internet technologies has multiple added advantages. Cost saving, using virtual channels proves 11 times cheaper than using a physical channel for service delivery (Jayawardhena & Paul Foley), this is done through proper utilization of the labor force and financial resources.

Services Offered

Services Type


Core Banking



Transfer funds

Account opening

Applying for loan

Applying for mortgages

Applying for credit cards

Applying for Insurance

Subscribe for mutual funds

Customer oriented

Manage Praise Points

Bill repayment(Misc)

Railway Reservation

E-Freight services

Demand Draft

Intimidating lack of ATM card

Excise payment online

Internet banking is a fast evolving mode of product delivery, where the company(Lender) and the service user(Customers) aren't present at the same place at exactly the same time. E-banking services are also known as, everywhere, anytime services because services are available online 24x7. These services are discreet and completely personalized as the service individual is just a click away from using the required services. Banking companies provide two independent types of internet services namely Core bank services(Traditional), offered through traditional bank stations and miscellaneous customer focused, to make finance institutions a one stop destination for normal water, electricity bill obligations or paying excise duty or income tax, online ticketing for railways and paying freight cost for transferring of goods.

Perception of consumer towards the grade of Remote Banking including variables(Chapter-1)

The term quality in the present aspect may have different interpretation in one respondent to some other. Below are a few of the aspects of quality that would be discussed beforehand in my survey.




Up up to now Information

Response time

Download time

Complete Product Info.

Tutorial / Demonstration

Help Function


Online Registration

Transfer between bank

Other Language

Keep data safe

Require encryption (SSL)

24 hours - 7 days

Innovation features


Require Authentication

Limit to change data

Complete data

Correct Link

Manage font display

Clear Instructions


Product Information

Locating Information

How Informative

Explains Symbol

Internal Connection

System Responsiveness


Announce Information

Complete Display

System Performance

Continue to Use

Connection failed

Able to repair problem


Search Function

Navigation menu/ buttons

Online Help

Communication with


Rapidly Services

Quality facet of Internet bank has two primary perspective

customer perspective

loan provider perspective

Customer perspective

From customer's perspective, the service quality has two aspects, the expected quality (before use) and the perceived quality (after use). Expected quality is dependant on the expectation of the client which are further based on self-belief about a certain service found in days gone by or connection with others and finally by the general image of the company in the market. Perceived quality, the impression that is created after realization of the service by the customer. The difference between your two aspects throws light on the amount of client satisfaction.

Providers perspective

From the provider's aspect, there are again two aspects, quality targeted and the quality delivered. Quality geared to the customers is based on an internal conformation of expectations, rules and regulation platform. Delivered quality works on an exterior platform which further rely upon the communication and product delivery stations.

Survey Details

Sources of data collection


Tele -Interview


We have used convenience sampling approach. It is also called haphazard or accidental sampling. Customers of the population are chosen predicated on their relative simple gain access to. Sometimes called pick up or opportunity sampling, this is actually the method of choosing items arbitrarily and within an unstructured manner from the framework. Though extremely difficult to treat rigorously, it is the method mostly employed in many sensible situations.

Sample Device: Internet Users

Sample Technique: Convenient sampling

Sample Area: AUT(City Campus)

Sample Size: 25


Statistical : SPSS

Techniques :Chi ^2 test of goodness of fit

Interpretation of the info collected


The sample survey carried out to critically analyze the utility, advantages and disadvantages of E-banking services offered by the banking companies in the Indian Banking scenario yielded the next results.

SWOT Analysis(E-banking)


More than 87% of the individuals are content with e-banking facilities provided by the lender which they use so already a good customer basic is present

83% of the respondent feel content with the response time of the banks to answer their questions so already a good IT empowered communication system is in place

80% of the respondents find the utilization of the E-banking services through the official site of the lender a simple process, thus the facilities attracts the eye of more potential customers

Regular updation center provided by the bank's E-banking wing also sees the customer's nod with about 75% respondents availing full advantage of the service, this shows the presence of an excellent internet based program and maintenance of proper data source of the customers

About 69% of the respondent are happy with the innovative features of E-banking services like (E-Tax payment, e-freight services), this shows that the E-banking wing is constantly in touch with the needs of the clients.


Connectivity to the sites a major problem for 54% of the respondents as they complain that sometime they cannot log onto the sites, so internet access on the side of the client is a problem

Only about 38% of the respondent feel safe leaving their credit-based card numbers online for availing center like the E-bill service, so security standards in some of the bankers is a major set back

The Inter/Intra bank or investment company fund transfer service is a also a set back for the lenders as the inner connectivity is not very strong, the respondents have complained of a specific bank not agreeing to the cheque of another bank on certain events. Only about 36% have up to now not came across such type of a problem


Have a great chance to spread the distant banking services to rural and second and third tier metropolitan areas through online and mobile bank facilities

With the type of investment done in the distant bank wings of the banking companies better and full confirmation security and privateness features could be provided to the users in the near future

Emergence of open up standards for banking functionality.

Growing customer consciousness and need of transparency


A common problem made by end users is thinking that their online banking session is perfectly safe when they use an SSL connection.

Fake website pop-ups and malicious code working inside the net browser can extract key information about a particular user and dent the self-confidence of the customers

A threat of virus act can't be ruled out that can lead to lack of important information

threats like hacking, faking etc cannot be ruled out.

E-banking exposure of the leading private and open public sectors

In this section we make an effort to compare the amount of e-banking publicity in private(Stakes controlled by individual stake holders) and general population sector banks(bulk stakes kept by the federal government). It really is recognized that private bank users progress service in conditions of efficiency, technology and personnel willingness to work(Peter Kangis). It had been also observed that younger, technical savvy and metropolitan population favored the private banking institutions and graded them highly on the technology usage(Peter Kangis). Below is an exemplory case of Indian banking industry, it shows the internet technology popularity level in the two types of bank systems

Indian Context(Pooja Malhotra and Balwinder Singh)

The data addresses around 57 finance institutions which operational at the end of the 2005 financial calendar year. There have been about 30 private sector banking companies and 27 general population sector/nationalized bankers in the study. The study takes into account several factor like years, size of the banking institutions. We concentrate on the type facet of the analysis, below is a model to clarify the degree of e-banking exposure. It was discovered that generally speaking the private sector lenders and the multi national banks(MNB) are better adopters on internet the technology than the general public / nationalized banks. (Pooja Malhotra and Balwinder Singh)


Public Sector Bank(Chapter-6)

Product Life C

The Product Life Circuit (PLC) is used to map the lifespan of a product(Internet Bank). There are generally four levels in the life span of a product. These four levels are the Advantages stage, the Progress stage, the Maturity level and the Decrease stage. The following graph illustrates the four periods of the PLC.

Public Sector Bank

Stage :(Intro stage)


Among the public sector banks 48 % of bankers offered Internet banking, however only 15 % offer totally transactional Internet bank.

Only 15% of the banks can handle controlling an E-wing in the lender.

Pioneer Bankers like the Canara Lender has zero internet bank services open to its strong customer base

The customer bottom for the general public sector bank or investment company mainly comprise of the rural population therefore the internet exposure is bound.

The notion of the nationalized lender becoming a "HI-TECH"(e-Banking) has not really sunk into the customer's brain, they still symbolize the banking companies as the pillars of authentic traditional banking service providers.

Most of the common E-banking services like Instant loan, intimating lack of credit cards, account transfer remain not fully practical.

Intra-Bank Networking(connection between two branches ) of any bank has not been fully create though they intend to complete the work by 2012(Basel 2 norms)

Obstacles by means of too little regulatory construction, a way of thinking attuned towards opposing technology, inadequate computerization and highly politicized unions are positioning back again the nationalized banking companies.

Private Sector Bank

Stage:(Growth Stage)


More than 55% of the private sector finance institutions working in India provide e-banking services to its customers.

Among the private sector finance institutions 50 percent of finance institutions offer Internet banking, however only 33 percent of banks are fully transactional banks.

Cost of supporting Internet Banking in the private sector finance institutions have been lowering continuously as the banks adopted E-banking as early as 1996

Almost 85% of the present customer base of the bank is metropolitan based with more than 98% of the clients regularly use some type of e-banking services

Cost of keep up with the traditional banking functions have dropped considerably

The profit and the revenue earned by the banks with the adoption of e-banking has been increasing at a constant rate

The variety of ATM'S Within the urban areas have already outnumbered its PSB counterparts thus making the private sector lenders more technology oriented

Future potential clients of e-banking in India

Banks and other finance institutions throughout the world are in a regular ever evolving process of virtualizing there bank and financial operations. A lot of the big multinational companies, bankers have previously put a whole lot of IT empowered infrastructure in place and subsequently a reaping benefits like, grater reach to the clients, increased customer commitment, customization of the merchandise etc. Internet banking is changing the facial skin of the banking industry, and rather than being "nice to have" it is fast learning to be a " need to have" technology to stay competitive on the market.

Future challenges

Banks along the way of reaping income from the deployment of internet technology property and development do not pay heed to the post development issues like security, satisfaction of the customers, site maintenance. (Adel M. Aladwani). Other important troubles include the legal implication, customer's privacy, enough IT infrastructure. Regulatory issues also form a significant concern, of which little concern is used by branch operation managers. At the moment the usage of internet technology in the banking sector continues to be in a very early level and at this time emphasis is more on the management issues rather than the post management reviewed above (Adel M. Aladwani). A number of the key challenges which have to be investigated after in future include

Customer's and other market causes functions in the adoption of online banking

Identifying key pushes that lead to customer satisfaction

What must gain the trust of the customers

The legal regulations and frameworks for supporting online bank ops

Effective ways to secure and audit online transections

Road Ahead

B2B (Retail product applications)

A greater effect on the banking companies' profits is likely to come from business to business and business to retail product applications. The products under development internationally presently include Electronic Charge Presentment (EBP) and Procurement systems. EBP will allow issuers of charges to present these to the customers on-line. The EBP intermediary will get to accumulate fees for this and can also gain valuable customer information that will be great for future marketing and product development. Procurement services allows immediate buying by one company from another and the fees again will be accumulated by the intermediary.

Changes in today's SERVICULE PROCESS

Besides banking companies, non-financial companies like IBM and Microsoft are also focusing on producing similar commercial financial products. Transactions that were before routed through banks could now proceed through non-financial intermediaries. This development is a significant menace to the banking institutions' traditional grip on the global payments system. Erosion of the dominance of the banking institutions in the economic climate would be an inevitable result of internet penetration.

Standardization of the Financial products

Due to a fierce competition to get market shares, prices of financial products would in the beginning be dictated by what the competitors are providing rather than any predetermined rates plan of the organization. Heavy price-cutting and price wars may be observed. Over time, the charges strategy will end up being a major concern in both banking and non-banking sectors because some uniformity in prices between (low cost) on-line services and other (high cost) traditional circulation channels should be maintained.

Strategic alliances

The scale of businesses required to be able to exploit the new technology effectively would need to be large, and there are few players, even in the developed countries that have the mandatory size. Intermediaries will likely form alliances with other gatherings in order to give you a broader range of services. New progressive product deals will be developed to woo customers. This way companies can leverage their existing bottom of customers to broaden existing associations and also reach clients.

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