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TRAINING REPORTTRAINING REPORTON
“AWARENESS OF PEOPLE REGARDING E- BANKING”
At
AXIS BAMK
Submitted to Punjabi University, PatialaIn partial fulfillment of the requirements for the award of degree of
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED TO
MRS.
SUBMITTED BY:- RAJ SINGH
1
DECLARATION
We, hereby declare that the work presented herein is genuine work done originally by us a
group of three persons RAJ SINGH , ROLL NO10403 has been published or submitted
elsewhere for the requirement of a degree programmer. Any literature, data or works done by
others and cited within this dissertation has been given due acknowledgement and listed in
the reference section.
(Student's name & Signature)
2
ACKNO WLEDGEMENT
Nothing concrete can be achieved without an optimal combination of inspiration and
perspiration.
We would like to take a moment to thank those invaluable suggestions and support led to the
completion of this project. This project report wouldn’t have been completely but for his able
guidance and the precious time he has given to us from his very busy schedule. His selfless
service has made this journey quite interesting and a feeling to go a long way. We
acknowledge the contribution of the staff members who added to the luster of the project by
their suggestions and help.
Last but not least we are very grateful to all those who helped us in one-way or the other way
at every stage of our work. We are thankful to all the respondents whose valuable information
helped us considerably in the successful completion of our study.
3
PREFACE
With the rapid globalization of the Indian economy, enterprises are faced with ever changing
competitive environment. Enterprises are adopting strategies aimed at developing competitive
advantages based on enhanced customer value in terms of product differentiation, quality,
speed, service and costs. In the post liberalization era, with the deregulation of the Indian
economy, the financial services sector is witnessing a complete metamorphosis and
technology is playing a very significant role in this regard. Over the last decade India has
been one of the fastest adopters of information technology, particularly because of its
capability to provide software solutions to organizations around the world. This capability
has provided a tremendous impetus to the domestic banking industry in India to deploy the
latest in technology, particularly in the Internet banking and e-commerce arenas. Banks are
growing in size by mergers and acquisitions, which have been driven by communication and
technology. Technology is playing a major role in increasing the efficiency, courtesy and
speed of customer service. It is said to be the age of E-banking.
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EXECUTIVE SUMMARY
Someone has rightly said that practical experience is far better and closer to the real world than mere theoretical exposure. The practical experience helps the students to view the realbusiness world closely, which in turn widely influences their perceptions and arguments theirunderstanding of the real situation. Research work constitutes the backbone of any management education programmer. A management student has to do research work quiet frequently during his entire span.
The aim of the research study is to analyze the awareness and preferences of people regarding E- Banking in Jalalabad (w) city or know the perception or satisfaction level of people towards the e-banking. For this purpose the 100 respondents from Jalalabad (w) city has been chosen. In the first phase, there is introduction to E-Banking, E-banking evaluation , E-banking products, Risk management, Driving forces, The Indian scenario, present scenario, Review of literature. After that a market research is performed with a sample size of 100 respondents. The research study was limited to Jalalabad (w). Here, in our survey, we have contacted the respondents through personal interviews with the help of questionnaire.
The main objective of the research to study to study the awareness level of service class, business class people and students regarding E-banking, to find out the frequency and the factors influencing the usage, to gauge the satisfaction level of people, to understand the problems encountered in its effective penetration. In the last phase of the report findings, suggestions and conclusions have been drawn.
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TABLE OF CONTENTS
SR. NO. PARTICULARS PAGE NO.
CHAPTER-I : INTRODUCTION OF THE SUBJECT
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.2.
1.3
1.4
1.4.1
1.4.2
1.4.3
1.4.4
INTRODUCTION
E-banking and its evolution
E-banking products
Risk management
Driving forces
The Indian scenario
NEED AND SCOPE OF STUDY
OBJECTIVES OF STUDY
RESEARCH METHODOLOGY
Research Definition
Sampling Design
Methods of Data Collection and analysis
Data Analysis and Interpretation :
9-36
CHAPTER-II : REVIEW OF LITERATURE
2.1 REVIEW OF LITERATURE 37-39
CHAPTER-III : DATA PRESENTATION, ANALYSIS AND INTERPRETATION
3.1 Data Presentation, Analysis and Interpretation 40-55
CHAPTER-IV : SUMMARY, CONCLUSIONS ,LIMITATIONS &
RECOMMENDATIONS
4.1
4.2
4.3
4.4
Findings of the Study
Limitations of the study
Recommendations
Conclusion
56-59
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CHAPTER- V BIBLIOGRAPHY
5.1 Bibliography 60-62
CHAPTER-VII :APPENDIX
6.1 Questionnaire 63-67
LIST OF TABLES
TABLE NO. PARTICULARS PAGE NO.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.8.1
3.9
3.10
3.11
3.12
Accounts of customers
Awareness level regarding E-Banking
Source from which the respondents get the knowledge
about the e-banking services
Awareness of E-Banking services
Usage of E-banking services
Representation of frequency of usage
Factors influencing the level of usage
Benefits of E-Banking
Correlation matrix of factors influencing the level of
usage
Usage of different modes
Problems identified by the users of E-Banking services
Reasons for not using E-Banking services as rated by the
non users
Correlation Matrix of reasons for not using E-
Banking services as rated by the non users
Satisfaction level
40-55
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LIST OF GRAPHS
GRAPH NO. PARTICULARS PAGE NO.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
Accounts of customers
Awareness level regarding E-Banking
Source from which the respondents get the knowledge
about the e-banking services
Awareness of E-Banking services
Usage of E-banking services
Representation of frequency of usage
Factors influencing the level of usage
Benefits of E-Banking
Usage of different modes
Problems identified by the users of E-Banking services
Reasons for not using E-Banking services as rated by the
non users
Satisfaction level
40-50
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CHAPTER-I
INTRODUCTION TO SUBJECT
1.1 INTRODUCTION
What is E-Banking
Electronic banking is one of the truly widespread avatars of E-commerce the world over.
Various authors define E-Banking differently but the most common definitions depicting the
meaning and features of E-Banking are as follows:
E-Banking is a combination of the two, Electronic technology and Banking.Electronic
banking is a process by which a customer performs banking transactions
electronically without visiting a brick-and-mortar institution.E-Banking denotes the
provision of banking and related services through extensive use of information
technology without direct recourse to the bank by the customer.
Bank
Information technology
Customer
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1.1.1 Evolution of E-bankingThe story of technology in banking started with
the use of punched card machines like Accounting Machines or Ledger Posting
Machines. The use of technology, at that time, was limited to keeping books of the
bank. It further developed with the birth of online real time system and vast
improvement in telecommunications during late 1970’sand 1980’s. It resulted in a
revolution in the field of banking with “convenience banking” as a buzzword.
Through Convenience banking, the bank is carried to the doorstep of the customer.
The 1990’s saw the birth of distributed computing technologies and Relational Data
Base Management Systems. The banking industry was simply waiting for these
technologies. Now with distribution technologies, one could configure dedicated
machines called front-end machines for customer service and risk control while
communication in the batch mode without hampering the response time on the front-
end machine.
Bank
Information technology
Customer
Traditional banking
Gunpowder
Personalized services, time consuming, limited access
Virtual or E-banking
Nuclear charged
Real time transactions, integrated platform, all time
access
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Intense Competition has forced banks to rethink the way they operated their business.
They had to reinvent and improve their products and services to make them more
beneficial and cost effective. Technology in the form of Electronic Banking has made
it possible to find alternate banking practices at lower costs.More and more people are
using electronic banking products and services because large section of the banks
future customers base will be made up of computer literate customers, the banks must
be able to offer these customers products and services that allow them to do their
banking by electronic means. If they fail to do this they will, simply, not survive. New
products and services are emerging that are set to change the way we look at money
and the monetary system.
Traditional banking
Gunpowder
Personalized services, time consuming, limited access
Virtual or E-banking
Nuclear charged
Real time transactions, integrated platform, all time
access
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1.1.2 E -
BANKING PRODUCTSAutomated teller machine (ATM)
Telebanking or Phone Banking
Mobile banking
Internet banking
Automated teller machine (ATM)
These are cash dispensing machines, which are frequently seen at banks and other locations
such as shopping centers and building societies. Their main purpose is to allow customer to
draw cash at any time and to provide banking services where it would not have been viable to
open another branch e.g. on university campus.
The machines allow the users to draw any sum up to limited amount, view the current
position on their account and order a new cheque book. To obtain money from the unit the
customer needs a special ATM card and personal identification number (PIN).
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The story of the humble cash-dispensing machine started around three decades back. In
India, HSBC set the trend and set up the first ATM machine here in 1987. Since then, they
have become a common sight in many of our metros. With more than 800,000 machines
worldwide, ATMs have made hard cash just seconds away all throughout the day at every
corner of the globe. For the customers advantage now the banks are looking for newer
services. ICICI bank launched its fully networked ‘ATM on wheels’ in Chandigarh, which
literally brings the ATM to the doorstep of the customer.
Some of the advantages of ATM to customers are
Ability to draw cash after normal banking hours.
Quicker than normal cashier service.
Complete security as only the card holder knows the PIN.
Does not just operate as a medium for obtaining cash.
Customer can sometimes use the services of other bank ATMs.
An ATM is simply a data terminal with two input and four output devices. Like any other
data terminal, the ATM has to connect to, and communicate through, a host processor.
The host processor is analogous to an Internet service provider (ISP) in that it is the
gateway through which all the various ATM networks become available to the cardholder
(the person wanting the cash).
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Most host processors can support either leased-line or dial-up machines. Leased-line
machines connect directly to the host processor through a four-wire, point-to-point, dedicated
telephone line. Dial-up ATMs connect to the host processor through a normal phone line
using a modem and a toll-free number, or through an Internet service provider using a local
access number dialed by modem.
Leased-line ATMs are preferred for very high-volume locations because of their thru-put
capability, and dial-up ATMs are preferred for retail merchant locations where cost is a
greater factor than thru-put. The initial cost for a dial-up machine is less than half that for a
leased-line machine. The monthly operating costs for dial-up are only a fraction of the costs
for leased-line.
A bank or financial institution may own the host processor, or an independent
service provider may own it. Bank-owned processors normally support only bank-
owned machines, whereas the independent processors support merchant-own
Telebanking or Phone Banking
Telephone Banking is relatively new Electronic Banking product. However it is fast
becoming one of the most popular products. Customers can perform a number of transactions
from the convenience of their own home or office; in fact from anywhere they have access to
a phone. Customers can do following
Check balances and statement information
Transfer funds from one account to another
Pay certain bills
Order statements or cheque books
Demand Draft Request
This facility is available with help of Voice Response System (VRS). This system
basically, accepts only TONE dialed input. Like the ATM customer has to follow
particular process, initially account number and telephone PIN are fed for the process
to start. Also the VRS system provides the user within additional facilities such as
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changing existing password with the new desired, information about new products,
current interest rates, etc.
Mobile banking
Mobile Banking comes in as a part of the banks initiative to offer multiple channel banking
providing convenience for its customers. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile phones are playing great
role in Indian Banking – both directly and indirectly. They are being used both as banking
and other channels.
Standard Chartered’s M-alert alerts its customers on exchange rates twice a day. The
objective is to meet its clients treasury requirements. A Standard Chartered customer
can also access its account through the mobile phone by sending an SMS.
ABN Amro uses mobile phones to alert its customers on their credit card transaction.
“Card alert”, which come in the form of an SMS are not necessarily a customer’s
demand.
Both HDFC and IDBI are offering instant mobile refill facility through ATM and
SMS banking.
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Internet banking
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry.
For years, financial institutions have used powerful computer networks to automate millions
of daily transactions; today, often the only paper record is the customer's receipt at the point
of sale. Now that its customers are connected to the Internet via personal computers, banks
envision similar economic advantages by adapting those same internal electronic processes to
home use.
Banks view online banking as a powerful "value added" tool to attract and retain new
customers while helping to eliminate costly paper handling and teller interactions in an
increasingly competitive banking environment. In India first one to move into this area was
ICICI BANK. They started web based banking as early as August 1997.
Debit Card
An electronic card issued by a bank which allows bank clients access to their account to
withdraw cash or pay for goods and services. This removes the need for bank clients to go to
the bank to remove cash from their account as they can now just go to an ATM or pay
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electronically at merchant locations. This type of card, as a form of payment, also removes
the need for checks as the debit card immediately transfers money from the client's account to
the business account .The major benefits to this type of card are convenience and security.
Along with the convenience of accessing account funds at anytime it also removes the hassles
associated with having to write checks as payment like showing ID and associated fees. Debit
cards are also considered to be a safer form of payment as a code is required to access the
account funds, while checks can be easily stolen. Debit card facilities the purchase or
payment by cardholder. he represent the card to merchant establishment after a purchase and
signs on payment slip. The merchant verify the signature electronically by inserting the card
into an electronic data capture machine that links up with card holder bank to a payment of
gateway. The bank debit the money from the card holder account and verifies the
transaction .thus at the point of purchase or debit card worth like credit card in one significant
aspect I.e. the credit card extends credit to card holder .while a debit card debit the money
from his account during the transaction. This permit that that a card holder can spent money
only if his account permits.
Credit Card
A credit card is an instrument which provides instantaneous credit facilities to his holder to
avail variety of goods at the merchant outlets .It is made up of plastic and hence popularly
known as plastic money .The eligibility condition for issuing these cards describe certain
minimum income ranges between Rs.50,000 to 100000 p.a. The aim of the issuer bank is to
provide this facilities to growing middle income group and people above them .The card
holder is issue a plastic card on which described the name of issuer bank, card no. ,the name
of its holder and his or her signature .The issuing bank endorse member which agree to
accept these cards for accepting the payment for goods and services sold .Member
establishment includes various commercial establishment ,shops ,travel
agency ,railways ,hotels and domestic and international airlines. when a card holder make
purchase or avail if any service at a member establishment .he signs a charge slip to customer
and presents the others to the respective issuing bank which makes payment to member
establishment after deducting its commission which may ranges 2% to 4%.
Types of internet banking
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Understanding the various types of Internet banking products will help examiners assess the
risks involved. Currently, the following three basic kinds of Internet banking are being
employed in the marketplace:
Informational — This is the basic level of Internet banking. Typically, the bank has
marketing information about the bank’s products and services on a stand-alone server.
The risk is relatively low, as informational systems typically have no path between the
server and the bank’s internal network. This level of Internet banking can be provided
bythe bank or outsourced. While the risk to a bank is relatively low, the server or web
site may be vulnerable to alteration. Appropriate controls therefore must be in place to
prevent unauthorized alterations to the bank’s server or Web site.
Communicative — This type of Internet banking system allows some interaction
between the bank’s systems and the customer. The interaction may be limited to
electronic mail, account inquiry, loan applications, or static file updates (name and
address changes). Because these servers may have a path to the bank’s internal
networks, the risk is higher with this configuration than with informational systems.
Appropriate controls need to be in place to prevent, monitor, and alert management of
any unauthorized attempt to access the bank’s internal networks and computer
systems. Virus controls also become much more critical in this environment.
Transactional — This level of Internet banking allows customers to execute
transactions. Since a path typically exists between the server and the bank’s or
outsourcer’s internal network, this is the highest risk architecture and must have the
strongest controls. Customer transactions can include accessing accounts, paying bills,
transferring funds, etc.
Growth in Internet Banking
Competition — Studies show that competitive pressure is the chief driving force
behind increasing use of Internet banking technology, ranking ahead of cost reduction
and revenue enhancement, in second and third place respectively. Banks see Internet
banking as a way to keep existing customers and attract new ones to the bank.
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Cost Efficiencies — Banks can deliver banking services on the Internet at transaction
costs far lower than traditional brick-and-mortar branches. The actual costs to execute
a transaction will vary depending on the delivery channel used. Rough estimates
assumes teller cost at Rs. 1 per transaction, ATM transaction cost at 45 paise, phone
banking at 35
paise, debit cards at 20 paise and Internet Banking at 10 paise per transaction. These
costs are expected to continue to decline.
Geographical Reach — Internet banking allows expanded customer contact through
increased geographical reach and lower cost delivery channels. In fact some banks are
doing business exclusively via the Internet — they do not have traditional banking
offices and only reach their customers online. Other financial institutions are using the
Internet as an alternative delivery channel to reach existing customers and attract new
customers.
Branding — Relationship building is a strategic priority for many banks. Internet
banking technology and products can provide a means for banks to develop and
maintain an ongoing relationship with their customers by offering easy access to a
broad array of products and services. By capitalizing on brand identification and by
providing a broad array of financial services, banks hope to build customer loyalty,
cross- sell, and enhance repeat business.
Customer Demographics — Internet banking allows banks to offer a wide array of
options to their banking customers. Some customers will rely on traditional branches
to conduct their banking business. For many, this is the most comfortable way for
them to transact their banking business.
Advantages of Internet Banking
Convenience: Unlike your corner bank, online banking sites never close; they're
available 24 hours a day, seven days in a week, and they're only a mouse click away.
Ubiquity: If you're out of state or even out of the country when a money problem
arises, you can log on instantly to your online bank and take care of business, 24/7.
19
Transaction speed: Online bank sites generally execute and confirm transactions at
or quicker than ATM processing speeds.
Efficiency: You can access and manage all of your bank accounts, including IRAs,
CDs, even securities, from one secure site.
Effectiveness: Many online banking sites now offer sophisticated tools, including
account aggregation, stock quotes, rate alerts and portfolio managing programs to
help you manage all of your assets more effectively. Most are also compatible with
money managing programs such as Quicken and Microsoft Money.
Customer satisfications :-Greater customer satisfication by offering unlimited access
to the bank ,not unlimited by the walls of the customers they can avoid travelling
with cash
Unlimited network:-E-banking provides unlimited network to the bank and is not
limited to number of branches .any PC connected to a modem and a telephone having
an internet connection can provide cash withdrawal needs of the customer.
Reduces load:-Load on branches can be considerably reduced by establishing
centralized data base and by taking over some of the accounting function.
Disadvantages of Internet Banking
Start-up may take time: In order to register for your bank's online program, you will
probably have to provide ID and sign a form at a bank branch. If you and your spouse
wish to view and manage your assets together online, one of you may have to sign a
durable power of attorney before the bank will display all of your holdings together.
Learning curve: Banking sites can be difficult to navigate at first. Plan to invest some
time and/or read the tutorials in order to become comfortable in your virtual lobby.
Bank site changes: Even the largest banks periodically upgrade their online
programs, adding new features in unfamiliar places. In some cases, you may have to
re-enter account information.
The trust thing: For many people, the biggest hurdle to online banking is learning to
trust it. Did my transaction go through? Did I push the transfer button once or twice?
Best bet: always print the transaction receipt and keep it with your bank records until
it shows up on your personal site and/or your bank statement.
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Internet Banking Services
Most online banking sites offer these basic services:
View account balances, including checking, savings, IRAs and securities
Access account history
Transfer funds between accounts
Schedule future transfers
Pay bills electronically
Schedule automatic recurring bill payment
Many online banking sites also offer these capabilities:
Account aggregation: View balances and market values of online accounts held at
other institutions, including investments, credit cards, rewards programs and IRAs
Send payments to individuals via e-mail
Trade stocks and mutual funds
Track real-time stock quotes
Receive trust and stock statements online
View images of bill statements, checks and deposit slips
Download site information into money management programs such as Quicken
and Microsoft Money
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Receive Web alerts vie e-mail, wireless devices and private banking site
Live chat with customers
Lists of some banks offering ebanking in India
Bank Name Technology Vendor Service offering
ABN AMRO Bank Infosys (BankAway) NetBanking
Abu Dhabi Commercial Bank Infosys (BankAway) ADCB NetLink
Bank of India I-flex BOIonline
Centurion Bank Logica MyCBOL
Citibank Orbitech (now Polaris) Citibank Online
Corporation Bank I-flex CorpNet
Deutsche Bank db direct
Federal Bank Sanchez FedNet
Global Trust Bank Infosys (BankAway) ibank@gtb
HDFC Bank i-flex/ Satyam NetBanking
HSBC Online@hsbc
ICICI Bank Infosys, ICICI Infotech Infinity
IDBI Bank Infosys (BankAway) i-net banking
IndusInd Bank CR2 IndusNet
Punjab National Bank Infosys (BankAway) Internet Banking
Standard Chartered Bank In-House Me Standard Chartered Online
State Bank of India Satyam/Broadvision onlinesbi.com
UTI Bank Infosys (BankAway) Iconnect
Bank of Punjab Online ebanking
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ElectronicBanking Risks
Electronic banking creates new risk control challenges for banks. From a supervisory
perspective, risk is the potential that events, expected or unexpected, may have an adverse
impact on the bank’s earnings or capital. The risks are credit, interest rate, liquidity, price,
foreign exchange, transaction, compliance, strategic, and reputation. These categories are
not mutually exclusive and all of these risks are associated with Electronic banking.
Credit Risk
Credit risk is the risk to earnings or capital arising from an obligor’s failure to meet the
terms of any contract with the bank or otherwise to perform as agreed. Credit risk is
found in all activities where success depends on counter party, issuer, or borrower
performance. It arises any time bank funds are extended, committed, invested, or
otherwise exposed through actual or implied contractual agreements, whether on or off
the banks balance sheet
Transaction Risk
Transaction risk is the current and prospective risk to earnings and capital arising from
fraud, error, and the inability to deliver products or services, maintain a competitive
position, and manage information. Transaction risk is evident in each product and service
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offered and encompasses product development and delivery, transaction processing,
systems development, computing systems, complexity of products and services, and the
internal control environment.
Compliance Risk
Compliance risk is the risk to earnings or capital arising from violations of, or
nonconformance with, laws, rules, regulations, prescribed practices, or ethical standards.
Compliance risk also arises in situations where the laws or rules governing certain bank
products or activities of the bank’s clients may be ambiguous or untested. Compliance
risk exposes the institution to fines, civil money penalties, payment of damages, and the
voiding of contracts. Compliance risk can lead to a diminished reputation, reduced
franchise value, limited business opportunities, reduced expansion potential, and lack of
contract enforceability. Most Internet banking customers will continue to use other bank
delivery channels. Accordingly, banks will need to make certain that their disclosures on
Internet banking channels, including Web sites, remain synchronized with other delivery
channels to ensure the delivery of a consistent and accurate message to customers.
Reputation Risk
Reputation risk is the current and prospective impact on earnings and capital arising from
negative public opinion. This affects the institution’s ability to establish new relationships
or services or continue servicing existing relationships. This risk may expose the
institution to litigation, financial loss, or a decline in its customer base. Reputation risk
exposure is present throughout the organization and includes the responsibility to exercise
an abundance of caution in dealing with customers and the community. A bank’s
reputation can suffer if it fails to deliver on marketing claims or to provide accurate,
timely services. This can include failing to adequately meet customer credit needs,
providing unreliable or inefficient delivery systems, untimely responses to customer
inquiries, or violations of customer privacy expectations.
Strategic Risk
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Strategic risk is the current and prospective impact on earnings or capital arising from
adverse business decisions, improper implementation of decisions, or lack of
responsiveness to industry changes. This risk is a function of the compatibility of an
organization’s strategic goals, the business strategies developed to achieve those goals,
the resources deployed against these goals, and the quality of implementation.
1.1.3 Risk Management
Financial institutions should have a technology risk management process to enable them to
identify, measure, monitor, and control their technology risk exposure. Risk management of
new technologies has three essential elements:
The planning process for the use of the technology.
Implementation of the technology.
The means to measure and monitor risk.
In a survey conducted by the Online Banking Association, member institutions rated security
as the most important issue of online banking. There is a dual requirement to protect
customers' privacy and protect against fraud.
A multi-layered security architecture comprising firewalls, filtering routers, encryption and
digital certification ensures that your account information is protected from unauthorized
access:
Firewalls and filtering routers ensure that only the legitimate Internet users are
allowed to access the system.
Encryption techniques used by the bank (including the sophisticated public key
encryption) would ensure that privacy of data flowing between the browser and
the system is protected.
Digital certification procedures provide the assurance that the data you receive is
from the banking system
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1.1.4 Driving Forces in E-Banking
The business strategist Michael Porter identified five competitive forces which tend to drive
down the profitability of any industry as comprising: barriers to entry, many small suppliers,
many small buyers, few substitutes and few competitors
Applying this version of Porter’s Five Forces Model to the banking industry, he observed that
one of the critical factors – barriers to entry – no longer exists in banking. Competitors can
come from any industry to "disintermediate" banks (i.e., eliminate banks as the interface
between customers and suppliers). Product differentiation is very difficult for banks, since
most of the products sold in retail banking are constrained by legal or industry regulations
and, in any case, are readily imitated Most countries have deregulated their banking sector so
government policies no longer form an entry barrier to banks’ competitors. Technological
know-how in banking also provides little protection to existing banks. It is argued that the
only significant entry barrier is likely to be the brand name of the service providers in retail
banking.
An application of Porter’s Five Forces model to the banking industry
Threat of new entrants – HIGH
Industry competitors - LOW
Bargaining power of buyers - HIGH
Bargaining power of suppliers - LOW
Threat of substitutes - LOW
Griffin (1996) observes that since the 1980s, banks have been merging to remain significant
in terms of assets, and to ensure that there are a small number of significant players in the
industry. Theoretically, the bargaining power of suppliers would be high in this industry, as
there are a small number of fairly large players in the industry.
(Kotler,1997). However, the tendency of banks to amalgamate, rationalizing operational costs
(Cronin, 1998) and thus diminishing the number of banking organizations in any country, is
being offset by means of the development of online banks and financial intermediaries in
areas such as home lending (Fellenstein and Ronwood, 2000).
26
By contrast, the bargaining power of consumers is increasing. Switching costs are becoming
lower (with Internet banking gaining momentum) and consumer loyalties are harder to retain
(Nemzow, 1999)
The threat of substitutes to banking in terms of competition from the non-bank financial
sector is increasing rapidly.. Attitudes are also shifting from direct transactions to savings and
investment, as the baby boomers reach their forties and fifties
The application of Porter’s model to the banking industry shows clearly that this sector,
which has now reached the mature stage of its lifecycle, is under threat. Dial (1995) points
out that banking demonstrates the typical attributes of an oligopoly – such as risk avoidance
and relatively undifferentiated customer service – which have made it susceptible to
encroachment by software giants such as Microsoft, who are attempting to replace banks as
intermediaries
Some specific factors which have conspired to create the new competitive environment for
banking include: changing consumer needs and perceptions, globalization, technological
innovations, and competition from non-banking entities.
The Indian scenario
Increasingly, consumers expect online services from their financial institutions. The trend
toward electronic delivery of products and services is particularly important to the financial
services industry, where the shift is partly a result of consumer demand, but is also partly a
result of the ruthlessly competitive environment (Geyer,1997).
Banking institutions are countering their competitors by leveraging eCommerce technologies
and various service offerings online.
Electronic banking was first introduced by large companies to simplify the management of
their salary and payroll problems By contrast, home banking is a comparatively recent
concept which is essentially a ‘spin-off’ of the Web Though many banks offered ‘home
banking services’ from a PC during the 1980s and 1990s, the concept was initially a failure
due to the lack of a critical mass of PCs and computer literate customers, as well as to the
somewhat limited user interfaces initially available Home banking, however, is gaining in
popularity with increasingly literate consumers and a wider
27
installed PC base.
Banks initially used dial-up services or provided software which was both expensive to
customers and lacking in user friendly features. Later, on-line services were set up from retail
branches to provide subscriber-based online services, although these still lacked generic
features and a user-friendly interface. With the evolution of the Internet and the World Wide
Web, online banking become crucial to growth in the sector Seitz and Stickel (1998) note that
consumer behaviour in banking changed partly as a result of changes in the amount of spare
time available to individuals. They observe that mobility, independence of time and place,
and flexibility have become key words in consumer banking.
Internet is increasingly considered a strategic weapon by banks, which are leveraging it as a
distribution channel to offer complex products at the same quality they can provide from their
physical branches, at a lower cost, to more potential customers, without boundaries. Indeed,
the Internet has been one of the key drivers in promoting eCommerce in the banking sector.
India is still in the early stages of E-banking growth and development. Competition and
changes in technology and lifestyle in the last five years have changed the face of banking.
The changes that have taken place impose on banks tough standards of competition and
compliance. The issue here is – 'Where does India stand in the scheme of ebanking.'
E-banking is likely to bring a host of opportunities as well as unprecedented risks to the
fundamental nature of banking in India. The impact of E- Banking in India is not yet
apparent. Many global research companies believe that ebanking adoption in India in the near
future would be slow compared to other major Asian countries (E-business, June, 2002). Nair
(1999) observes that Indian E-banking is still nascent, although it is fast becoming a strategic
necessity for most commercial banks, as competition increases from private banks and non
banking financial institutions.
According to Nasscom's Internet survey in 2001 on the Internet usage trends, the number of
active Internet subscribers in India is expected to increase to over 18 million and the user
base to over 30 million by 2004 – 05. It also found that more than 200 cities and towns in
India have Internet connectivity. The Nasscom - McKinsey study in 2002 revealed that
28
despite the global economic challenges facing the IT software and services sector, the outlook
for the Indian industry remains optimistic.
The Reserve Bank of India has also set up a "Working Group on E-banking to examine
different aspects of E-banking. The group focused on three major areas of E-banking i.e. (1)
Technology and Security issues (2) Legal issues and (3) Regulatory and Supervisory issues.
RBI has accepted the guidelines of the group and they provide a good insight into the security
requirements of E-banking.
The importance of the impact of technology and information security cannot be doubted.
Technological developments have been one of the key drivers of the global economy and
represent an instrument that if exploited well can boost the efficiency and competitivity of the
banking sector. However, the rapid growth of the Internet has introduced a completely new
level of security related problems. The problem here is that since the Internet is not a
regulated technology and it is readily accessible to millions of people, there will always be
people who want to use it to make illicit gains. The security issue can be addressed at three
levels.
The first is the security of customer information as it is sent from the customer's PC to the
Web server. The second is the security of the environment in which the Internet banking
server and customer information database reside. Third, security measures must be in place to
prevent unauthorized users from attempting to long into the online banking section of the
website.
From a legal perspective, security procedure adopted by banks for authenticating users needs
to be recognized by law as a substitute for signature. In India, the Information Technology
Act, 2000, in section 3(2) provides for a particular technology (viz., the asymmetric crypto
system and hash function) as a means of authenticating electronic record.
Taxation of E-commerce transaction has been one of the most debated issues that are yet to be
resolved by India and most other countries. The explosive growth of e-commerce has led
many executives to question how their companies can properly administer taxes on Internet
sales. Without sales tax, online sellers get a price advantage over brick and mortar
companies. While e-commerce has been causing loss of tax revenues to the Government,
many politicians continue to insist that the Net must remain tax-free to ensure continued
growth, and that collecting sales taxes on Net commerce could restrict its expansion.
29
Nasscomm survey 2001 has suggested that India should support a permanent ban on taxes on
Internet access, a permanent ban on custom duties on electronic transmissions, international
tax rules that are neutral, simple and certain and simplification of state and local sales taxes.
The Central Board of Direct Taxes, which submitted its report in September 2001,
recommended that e-commerce transaction should be taxed just like traditional commerce.
Also RBI is about to become the first Government owned digital signature Certifying
Authority (CA) in India. The move is expected to initiate the electronic transaction process in
the banking sector and will have far reaching results in terms of cost and speed of
transactions between government- owned banks.
Thus efficiency, growth and the need to satisfy a growing tech-survey consumer base are
three clear rationales for implementing E-banking in India. The four forces-customers,
technology, convergence and globalization have the most important effect on the Indian
financial sector and these changes are forcing banks to redefine their business models and
integrate technology into all aspect of operation.
1.2 Need and scope of the study:-
This study is important and essential both for the bank management and the users of E-
Banking services. By conducting this study e-banking management would become aware
about the preferences, satisfaction level and problems encounter by e-banking users and
thus this study will help the executives to amend the services according to the customer
preferences
1.3 Objectives of the Study
The present study focused at studying the E-banking preferences over traditional banking
among service class in ferozepur city. The main objectives of the study were:
1. To know about what is e-banking.
2. To know what services are included in e-banking.
30
3. To study the awareness level of people regarding e-banking.
4. To find the frequency and factor influencing the usage.
5. To know whether people are satisfied with e-banking services.
RESEARCH METHODOLOGY
Research means a search for knowledge or gain some new knowledge and methodology can
properly refer to the theoretical analysis of the methods appropriate to a field of study or to
the body of methods and principles particular to a branch of knowledge. A Research
methodology has a specified framework for collecting the data in an effective manner.
Research methodology means a "defining a problem, defining the research objectives,
developing the research plan, collecting the information, analyzing the information and
presentation of findings." Such framework is called "Research Design". The research process
that was followed by me consisting following steps;
A) Research Define
The definition of problem includes the study of “Awareness of people regarding E-Banking ”.
. B) Research Design
The present study seeks to identify the extent of preference of e-banking over traditional
banking among people- service and business class and also students in ferozepur City. The
research design is exploratory in nature. The research has been conducted on people within
31
ferozepur . This step of the study consists of developing the most efficient plan for gathering
the relevant data. The following factors were under focus in the research plan:
a) Data design:
The data design involves different aspects like :• The nature of the data• The data sources• The data frequency and the data tools.
b) Nature of data:The nature of the data that has been used in this project is both primary and secondary in nature. The first hand information’s bearing on any research, which has been collected by the researcher, or his agent or assistant is called ‘primary data’.Once the primary data has been put to use, the original characters disappear and the that becomes secondary. The data which has been collected, compiled and presented earlier by any agency, is termed as ‘secondary data’.
C) Sampling Design: It is a definite plan for obtaining a sample from a given population. It
refers to the technique or the procedure the researcher would adopt in selecting items for the
sample. The sampling plan or design calls for the following decisions:
a. Universe: Research sample unit refers to the geographical area that I have
covered while conducting the research. The universe of my study is ferozepur
City.
b. Sample Unit: Who is to be surveyed?
The target population must be defined that will be sampled. It is necessary to
develop a sampling frame so that everyone in the target population has an equal
chance of being sampled. The sample unit pertaining to my study is the service
class people, business class and students of ferozepur City.
c. Sample Size: How many people will be surveyed? This refers to number of
respondents to be selected from the universe to constitute a sample. An optimum
sample is one that fulfills the requirements of efficiency, reliability and flexibility.
The sample size of 100 served the purpose of my study.
d. Sample Method: The sampling method used is non-probability convenience
sampling (where the researcher selects the most accessible population members
from which to obtain information).
32
D) Methods of Data Collection and analysis : The researcher can get two types of data:
a) Primary Data
b) Secondary Data
a. Primary Data: Primary data is a data which did not exist earlier and is being
collected by the researcher first time for its specific objectives. The primary data is
collected through questionnaires by conducting personal interview and telephonic
interviews of the respondents of ferozepur region.
b. Secondary data: Any data which have been collected earlier for some purpose are
the secondary data. Indirect collection of data from sources containing past or recent
past information like bank’s brochures, annual publication, books etc. Secondary
sources used are: Text books, internet sites, newspaper articles, bank brouchers etc.
Data Collection
Keeping in mind the objectives of the study, the primary data was collected from a
sample of 100 respondents belonging to ferozepur by personally administering the
questionnaire which was framed and tested the study.
Sampling technique
In this research study, non – probability convenience sampling is opted for. Convenience
sampling is done purely on the basis of convenience or accessibility. The questionnaire
was of structured type and contained questions relating to different dimensions of E-
Banking awareness among service class such as level of usage, factors influencing the
usage of e-banking services, benefits accruing to the users of e-banking services,
problems encountered. An attempt was also made to elicit reasons for its non usage.
Analysis of Data and discussion
With the proliferation of technology in the society and its increased prevalence among all
the classes, the present study was conducted to measure the extent to which the banking
transactions were technology driven among the service class, business class and students.
33
Data after collection has been processed and analyzed in accordance with the outline laid
down in the research plan. Data obtained during the study has been systematically
tabulated and interpreted with the help of tables and pie charts.
CHAPTER:-II
Review of Literature
Several studies and researches have drawn attention to the role and adoption of technology in
Banking sector, E-banking, its adaptation and the experiences of private sector banks with E-
banking. Some of the important studies during the recent years are being discussed in this
section
Wai-Ching Poon(2008) :- The purpose of this paper is to explore the determinants of
users' adoption momentum of e-banking in Malaysia. In this article the author shows
the problems when people uses the e-banking and the advantages of e-banking .
Privacy and security are the major sources of dissatisfaction, which have
momentously impacted users' satisfaction.
Michal Polasik (2009):- This research seeks to identify empirically the factors
underlying the decision to adopt online banking in Poland. With the help of this study
we find some factors that influence the people to use the online banking the factors
that has been observed are as follow. In our study is the link between the decision to
open an online account and the perceived level of security of internet transactions.
Milind Sathye (1999):- This research help to define the factors affecting the adoption
34
of Internet banking by Australian consumers. This research shows that security
concerns and lack of awareness about Internet banking and its benefits stand out as
being the obstacles to the adoption of Internet banking in Australia.
Walfried M. Lassar, Chris Manolis, Sharon S. Lassar(2005):- This paper explores
the relationships between consumer innovativeness, self-efficacy on the internet,
internet attitudes and online banking adoption, while controlling for personal
characteristics While results confirm the positive relationship between internet related
innovativeness
Sylvie Laforet, Xiaoyan Li(2005):- The aim of this study is to investigate the market
status for online/mobile banking in China. With the recent and forecasted high growth
of Chinese electronic banking, it has the potential to develop into a world-scale
internet economy and requires examination.
Michal Polasik, Tomasz Piotr Wisniewski(2009):- This paper seeks to identify
empirically the factors underlying the decision to adopt online banking in Poland.
Generally, the behaviour of Polish internet users and that of consumers in more
developed countries exhibit similar traits.
Joaquin Aldas-Manzano, Carlos Lassala-Navarre, Carla Ruiz-Mafe, Silvia Sanz-
Blas(2009):- The purpose of this paper is to analyse how consumer innovativeness
can be used as a variable to positively influence internet banking adoption both
directly and reducing consumer perceived risk.
Siriluck Rotchanakitumnuai, Mark Speece(2003):- Many Thai banks are currently
implementing Internet banking. Banks that offer service via this channel claim that it
reduces costs and makes them more competitive. However, many corporate customers
are not highly enthusiastic about Internet banking.
Nelson Oly Ndubisi(2006):- This paper examines the determinant structure of
customers’ attitude system's characteristics on adoption of internet banking (IB) by
Malaysian bank customers. The results of the study reveal that the attitudinal factors
play a significant role in internet banking adoption..
35
Barry Howcroft, Robert Hamilton, Paul Hewer(2002):- This paper seeks to
develop our understanding of consumer attitudes towards bank delivery channels.
Accordingly, a questionnaire was designed to obtain information about which
delivery channels consumers had used when acquiring four types of financial service.
Aref A. Al-Ashban, Mohammed A. Burney(2001):- Currently, the banking industry
is facing increasingly demanding customers and quickly eroding competitive edges.
Recent technological breakthroughs in various areas, however, offer opportunities for
the banks to excel in customer service quality and convenience.
Anita Lifen Zhao(2008):- The purpose of this paper is to identify risk factors that
discourage Chinese consumers from adopting internet banking services (IBS). This
market is experiencing fast growth; however, an in-depth understanding of Chinese
consumers within this is lacking..
Heikki Karjaluoto, Minna Mattila, Tapio Pento(2002):- The study explored the
effect of different factors affecting attitude formation towards Internet banking (online
banking) in Finland. The purpose of this paper is to determine those factors that
influence the formation of attitude towards Internet banking on the one hand, and their
relation to the use of online banking services, on the other.
Tommi Laukkanen(2007):- The aim of the paper is to explore and compare
customer value perceptions in internet and mobile banking. The purpose especially is
to compare customer perceived value and value creation between internet and mobile
bill paying service.
Katariina Maenpaa(2006):- The purpose of the paper is to explore Internet banking
services (IBS), consumers availing the services and the potential development
possibilities of the services in the challenging operational environment.
Kari Pikkarainen, Tero Pikkarainen, Heikki Karjaluoto, Seppo Pahnila(2006):- Although
research into the adoption and use of online banking services has grown in many parts of
the world, the centre of attention has been largely on determinants of online banking.
Guerrero, Mario Martínez (2002):-Mario Martínez Guerrero in his paper titled
36
“Profiling the Adoption of Online Banking Services in the European Union” offers an
empirical investigation on the adoption of online banking services among European
citizens.
The above survey indicates that although a number of research studies relating to different
aspects of E-banking, its adoption, different experiences with e-banking, its viability and
ethics involved in e-banking, but no study has been conducted which is class specific. As it is
evident, that service class people don’t have sufficient time and access to banks during the
traditional banking hours, so their e-banking adoption and usage should be more.
CHAPTER:-III
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
The study has been conducted on the topic entitled, “Awareness of people regarding E-
Banking,” In this research study, the primary data was collected through questionnaire
method. The analysis of the research study has been shown below:
1 Q:1:- In which banks do you have your account?
a. State Bank of India c. HDFC Bank
b. Punjab National Bank d. ICICI Bank
Table no:-3.1
State bank of India Punjab national bank HDFC ICICI
55 30 15 15
48% 26% 13% 13%
37
Graph no:-3.1
state bank of india48%
hdfc13%
punjab national bank
26%
icici13%
Q:2:- While opening up the account, were you aware of E-banking services provided by your
bank?
a. Fully aware b. Had an idea c. No
Awareness of people regarding e-banking service provided by the bank
while opening an account
Table no:-3.2
Fully aware Had an idea No idea Total
42 53 20 115
37% 46% 17% 100
38
Graph no-3.2
AWARENESS ABOUT E-BANKING SERVICES
37%
46%
17%
FULLY AWARE
HAD AN IDEA
NO IDEA
Q:3:- If answer to question no.2 is c, how did you get to know about E-banking services of
your bank?
c. Personal visit
d. Executive from the bank
e. Advertisements
f. Friends/ Relatives
Source from which the respondents get the knowledge about the e-
banking services
Table no- 3.3
Personal visit Executive from
bank
Advertisement
s
Friends/
relatives
Others
12 14 37 18 46
10% 11% 29% 14% 36%
39
Graph - 3.3
SOURCES OF AWARENESS ABOUT E-BANKING
9%
11%
29%
14%
37%
PERSONAL VISIT
EXECUTIVES FROMTHE BANK
ADVERTISEMENTS
FRIENDS/RELATIVES
OTHER SOURCES
Q:4:- If answer to question no.2 is a or b, which of the following E-banking
services are you aware of?
g. ATM
h. Debit Card
i. Credit Card
j. Phone banking
k. Mobile banking
l. Internet banking
Awareness of E-Banking services
Table no- 3.4
ATM Debit
Card
Credit
Card
Phone
Banking
Mobile
Banking
Internet
Banking
Tot
al
97 66 64 49 40 51 367
26.43 17.98% 17.44% 13.35% 10.89% 13.89% 100
40
%
Graph- 3.1
relative awareness about different e-banking services
0
20
40
60
80
100
120
ATM Debit card Credit card Phonebanking
Mobilebanking
Internetbanking
E-banking services
nu
mb
er o
f re
spo
nd
ents
Series1
Q:5- Do you use E-banking services?
a. Yes b. No
Users of E-banking services
Table no:-3.5
Users Non users Total
80 35 115
69.5% 31.5% 100
41
Graph - 3.5
USAGE OF E-BANKING
70%
30%
Yes
No
Q:-6:- If answer to question no.5 is yes, how frequently do you use each of the following
services?
FactorsOnce in a
day
Once in a
week
Once in a
fortnight
Once in a
month
Infrequen
tly
a ATM
b Debit Card
c Credit Card
d Phone Banking
e Mobile Banking
f Internet Banking
42
Graph- 3.6
FREQUENCY OF USAGE OF DIFFERENT E-BANKING SERVICES
0%
20%
40%
60%
80%
100%
ATM Debit card Credit card Phonebanking
Mobilebanking
Internetbanking
E-BANKING SERVICES
RE
LA
TIV
E %
US
AG
E
infrequently
once in a month
once in a fortnight
once in a week
once in a day
Representation of frequency of usage
Table no- 3.6
Da
y
Wi
se
% Wee
k-
wise
% Fortn
i-
ghtly
% Mo
n-
thly
% Infre
q-
uentl
y
% Tot
al
WA
S
ATM 4 36.3
6
31 55.3
6
13 37.1
4
11 25.5
8
9 13.8
5
68
3.15
Debit
Card
2 18.1
8
11 19.6
4
7 20 10 23.2
6
8 12.3
1
38
2.71
43
Credit
Card
1 9.09 5 8.93 6 17.1
4
6 13.9
5
18 27.6
9
36
2.03
Phone
Banki
ng
0 0 2 3.57 3 8.57 7 16.2
8
13 20 25
1.76
Mobile
Banki
ng
0 0 4 7.14 4 11.4
3
2 4.65 9 13.8
5
19
2.16
Intern
et
Banki
ng
4 36.3
6
3 5.36 2 5.71 7 16.2
8
8 12.3
1
24
2.50
11 100 56 100 35 100 43 100 65 100
Q:7:- Which of the following factors influence you the most to use E-banking services?
Factors Strongly
More
than
average
averageLess than
AverageNot at all
A All time availability
B Ease of use
C Availability of resources
D Nearness
E Integrated platform
F Direct access
G Accuracy of information
44
H Friends/ Relatives
I Status symbol
Factors influencing the level of usage Tale no-3.7
Strongl
y
More
than
average
Averag
e
Less
than
average
No
t
at
all
Tot
al
WA
S
Ran
k
All time
availability56 8 11 1 3 79 4.43 1
Ease of use 32 22 7 2 1 64 4.28 3
Resources 17 16 13 2 1 49 3.94 5
Nearness 21 18 14 5 0 58 3.95 4
Integrated
Platform12 10 13 4 1 40 3.70 7
Direct access 32 12 7 2 0 53 4.40 2
Accuracy of
Information17 13 13 3 1 47 3.89 6
Friends/
Relatives3 8 14 7 8 40 2.78 9
Status symbol 7 11 14 7 10 49 2.96 8
45
Graph- 3.7
FACTORS INFLUENCING LEVEL OF USAGE
0102030405060708090
All
time
Res
ourc
es
Inte
grat
ed
Acc
urac
y
Sta
tus
Not at all
Less than average
Average
More than average
Strongly
Table 3.7A
Correlation matrix of factors influencing the level of usage
Factors A B C D E F G
AAll time
availability1.00 0.84 0.64 0.70 0.56 0.96 0.73
B Ease of use 0.84 1.00 0.87 0.90 0.67 0.93 0.86
C Resources 0.64 0.87 1.00 0.98 0.93 0.79 0.98
D Nearness 0.70 0.90 0.98 1.00 0.92 0.84 0.98
EIntegrated
Platform0.56 0.67 0.93 0.92 1.00 0.66 0.96
F Direct access 0.96 0.95 0.79 0.84 0.66 1.00 0.83
GAccuracy of
Information0.73 0.86 0.98 0.98 0.96 0.83 1.00
HFriends/
Relatives-0.60 -0.56 -0.07 -0.19 0.17 -0.59 -0.09
I Status symbol -0.38 -0.24 0.23 0.07 0.36 -0.34 0.17
46
Q:8:- Which of the following benefits accrue to you, while using E-banking services?
m. Time saving b. Inexpensive
c. Easy processing d. d. Easy fund transfer
Various benefits accruing from E-Banking services to its
users
Table no-3.8
Time saving Inexpensive Easy processingEasy fund
transferOthers
69 21 33 19 7
46.31% 14.09% 22.15% 12.75% 4.70%
Graph- 3.8
Benefits of e-banking
TIME SAVING
INEXPENSIVE
EASY PROCESSING
EASY FUNDTRANSFER
EMERGENCY SKINSAVING
OTHERS
47
Q:9:- Which mode do you use for conducting the following transaction?
Persona
l Visit
ATM/
Debit
Card
Phone
Banking
Mobile
Banking
Net
Banking
If you have all of the
previous options which
one would you use (kindly
mention the number 1-5)1 2 3 4 5
A Account related
transactions
B Cheque related
transactio
Ns
C Credit Card
related
transactions
DMisc
transactions
Usage of different modes for conducting specified transaction
Table no – 3.9
Modes
Persona
l
Visit
ATM/
Debit
card
Phone
banking
Mobile
banking
Net
Banking
Account related
transactions,
Cheque related
transactions,
Credit card related
transactions,
Miscellaneous transactions
390 95 118 61 76
% 52.7 12.84 15.95 8.24 10.27
Q:10:- Rate the problems identified while using E-banking services?
48
Factors Grievous Major Average Minor Ignorable
A Time consuming
B Insecurity
C ATM out of order
D Amount debited but not
withdrawn
E Problem of change in
mobile number
F Password forgotten
G Card misplaced
H Card misuse
Graph- 3.10
PROBLEMS ARISING OUT OF E-BANKING
010203040506070
Tim
eco
nsum
ing
AT
M o
ut o
for
der
Pro
blem
of
chan
ge in
Car
dm
ispl
aced
Ignorable
Minor
Average
Major
Grievous
Problems identified by the users of E-Banking services
Table no- 3.10
49
FactorsGrievo
us
Maj
or
Avera
ge
Min
or
Ignorab
le
Tota
l
WA
S
Rank
s
ATime
consuming0 3 12 19 25 59 1.88 8
B Insecurity 0 11 11 11 12 45 2.47 5
CATM out of
order0 12 16 26 8 62 2.52 4
D
Amount
debited but
not
withdrawn
3 6 4 13 13 39 2.31 7
E
Problem of
change in
mobile
number
1 8 9 12 12 42 2.38 6
FPassword
forgotten8 4 13 18 11 54 2.63 3
GCard
misplaced8 7 13 14 8 50 2.86 2
H Card misuse 12 13 2 8 12 47 3.11 1
Q:11:- Kindly rate the following reasons enlisted for not using the E-banking services?
50
FactorsHighly
important
More
than
average
AverageLess than
average
Least
important
a No need( Satisfied with
traditional banking)
b It seems like a
botheration
c Insecurity
d No access to
internet/mobile
e Lack of operational
knowledge
F Hidden costs
Reasons for not using E-Banking services as rated by the non
users
Table no- 3.11
Factors
Highly
importa
nt
More
than
avera
ge
Avera
ge
Less
than
avera
ge
Least
importa
nt
Tot
al
WA
S
Ran
ks
A
No
need( Satisfi
ed with
traditional
banking)
19 8 22 6 22 77 2.95 3
B
It seems like
a
botheration
7 0 9 16 30 62 2.00 6
C
Insecurity 17 11 21 7 13 69 3.17 1
D No access to 9 5 13 10 16 53 2.64 5
51
internet/mo
bile
E
Lack of
operational
knowledge
12 7 12 12 15 58 2.81 4
F Hidden
costs21 5 14 8 16 64 3.11 2
Table 3.11-A
Correlation Matrix of reasons for not using E-Banking services as rated by the non
users
A B C D E F
A No need
( Satisfied with
traditional
banking)
1.00 0.37 0.82 0.72 0.63 0.81
B It seems like a
botheration0.37 1.00 -0.19 0.86 0.88 0.30
C Insecurity 0.82 -0.19 1.00 0.31 0.19 0.63
D No access to
internet/mobile0.72 0.86 0.31 1.00 0.92 0.50
E Lack of
operational
knowledge
0.63 0.88 0.19 0.92 1.00 0.66
F Hidden costs 0.81 0.30 0.63 0.50 0.66 1.00
Q:12:- To what extent are you satisfied with your Banks’ E-banking services?
52
n. Highly Satisfied ___________
o. Satisfied _________
p. Neutral ___________
q. Dissatisfied ___________
Table no- 3.12
Highly satisfied Satisfied Neutral dissatisfi
ed
35 50 20 10
30.5% 43.5% 17.4% 9%
graph- 3.12
highly satisfied
30%neutral
17%
satisfied44%
dissatisfied9%
CHAPTER :- IV
SUMMARY, CONCLUSIONS, LIMITATIONS & RECOMMENDATIONS
53
4.1 Findings of the study
Most of the service class people are aware of E-banking, either fully or partially.
Advertisements play a major role in making service class aware of E-banking.
ATMs are the most preferred choice among service class followed by debit card,
credit card, phone banking, mobile banking and internet banking in terms of the
frequency of usage.
Amongst the various factors influencing the usage, all time availability is ranked as
the major motivating factor, followed by direct access, ease of use, nearness. Friends
and relatives and status symbol were rated as the least motivating factors.
As regards the benefits accruing, Time saving came out to be the major benefit
followed by easy processing, inexpensive and easy fund transfer.Insecurity seems to
be a major problem in the usage of E-banking which arises from the misuse and
misplacement of the card.
Amongst the reasons by the non-users of E-banking, Insecurity again was considered
the most de-motivating factor, followed by fear of hidden costs and no need.
Out of the three hypothesis formulated in the study, one hypothesis proved to be true
i.e. the e-banking usage does not depend on whether the person is male or female and
Other two hypothesis were rejected and it was concluded that e-banking usage is
influenced by the level of income and the age factor
4.2 Limitations
While undertaking this study, I faced certain physical and geographical limitations. Even
though every possible effort to make this project report authentic, accurate and complete in
itself was made, still various hurdles came into the way. The limitations of the study include:
Reluctance on the part of respondents to provide an accurate account of their personal
details.
Scope of the study being limited to ferozepur , the findings of the study cannot be
generalized for the universe on the whole.
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This study being based on the assumption that an interviewer is providing accurate and
reliable information may not hold true in every case
4.3 Recommendations
Internet banking would drive us into an age of creative destruction due to non-physical
exchange, complete transparency giving rise to perfectly electronic market place and
customer supremacy. The question to be asked right now is "What the Indian Banks should
do" Whatever is the strategy chosen and options adopted, certain key parameters would
determine the bank's success on web:
For long-term success, a bank may follow:
Adopting a webs mindset
Catching on the first mover's advantage
Recognizing the core competencies
Ability to deal multiplicity with simplicity
Senior Management initiative to transform the organization from inward to
outward looking
Aligning roles and value propositions with the customer segments
Redesigning optimal channel portfolio
Acquiring new capabilities through strategic alliances.
The above can be implemented in four steps:
Familiarizing the customer to new environment by demo version of software on
bank's web site. This should contain tour through the features which are to be
included. It will enable users to give suggestions for improvements, which can be
incorporated in later versions wherever feasible.
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Second phase provides services such as account information and balances, statement
of account, transaction tracking, mailbox, check book issue, stop payment, financial
and customized information.
The third phase may include additional services such as fund transfers, DD issue,
standing instructions, opening fixed deposits, intimation of loss of ATM cards.
The last step should include advanced corporate banking services like third party
payments, utility bill payments, establishment of L/Cs, Cash Management Services
etc. Enhanced plan for the customers in future can include requests for demand drafts
and pay orders and many more to bring in the ultimate in banking convenience.
Security features of Internet Banking should be administrated to the customers.
Make Internet Banking understandable to the customer, so that they can adapt its
more.
More of the facilities in Internet Banking should be offered.
All the above strategies will help banks in translating their traditional business model into an
Internet one, falling into three main categories
One stop shop
Virtual one-stop-shop
Best of breed supplier.
Conclusion
The awareness of e-banking and usage of e-banking is all set to increase among various
peoples. Some customers are not using the services due to hurdling factors like insecurity and
fear of hidden costs etc. So banks should forward with measures to remove the apprehensions
of customers therefore now demand for e-banking is increasing day-by- day. Customers are
aware and satisfied about e-banking services provided by bank because of its effectivity.
ATMs are most preferred choice amongst customers. Further, with increasing consumer
demands, banks have to constantly think of innovative customized services to remain
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competitive. E-Banking is an innovative tool that is fast becoming a necessity. It is successful
strategic weapon for banks to remain profitable in a volatile and competitive market place of
today.
CHAPTER-V
BIBLIOGRAPHY
MAGAZINES
Product and Technology Group, ICICI Bank “Corporate Banking: Using Technology
in Transactions” ICFAI Reader, January 2004, pg. no. 71-76
“From Physical to Virtual Banking”, Indian Mangement, September 2003
JOURNAL
Wai-Ching Poon(2008) “Users' adoption of e-banking services” Journal of Business
& Industrial Marketing Vol 23,Year: 2008, pp: 59-69
Joaquín Aldás-Manzano , Carlos Lassala-Navarré (2009)“The role of consumer
innovativeness and perceived risk in online banking usage” International Journal of
Bank Marketing Volume: 27,Year: 2009,pp
Michal Polasik (2009)“Empirical analysis of internet banking adoption in Poland”
International Journal of Bank Marketing Volume 27, Year 2009,pp 32-52
Milind Sathye (1999)“Adoption of Internet banking by Australian consumers”
International Journal of Bank Marketing, vo; 17, year 1999, pp 324-334
Milind Sathye(1999) “Adoption of Internet banking by Australian consumers: an
empirical investigation” Journal: International Journal of Bank Marketing, Vol
17 ,Year:1999 , pp:48-52
Walfried M. Lassar, Chris Manolis, Sharon S. Lassar(2005) “The relationship
between consumer innovativeness, personal characteristics, and online banking
adoption” Journal International Journal of Bank Marketing ,Vol 23 ,Year 2005,pp: 68-
69
57
Sylvie Laforet, Xiaoyan Li(2005) “Consumers’ attitudes towards online and mobile
banking in China”Journal International Journal of Bank Marketing, Vol 23 ,Year
2005 , pp:67-68
Michal Polasik, Tomasz Piotr Wisniewski(2009) “Empirical analysis of internet
banking adoption in Poland”Journal International Journal of Bank Marketing, Vol 27,
Year 2009,pp: 48-62
Joaquin Aldas-Manzano, Carlos Lassala-Navarre, Carla Ruiz-Mafe, Silvia Sanz-
Blas(2009) “The role of consumer innovativeness and perceived risk in online
banking usage” Journal International Journal of Bank Marketing, Year 2009, Vol
27,pp:72-74
Siriluck Rotchanakitumnuai, Mark Speece(2003) “Barriers to Internet banking
adoption: a qualitative study among corporate customers in Thailand” Journal
International Journal of Bank Marketing, Year 2003 ,Vol 21 ,pp:52-54
Nelson Oly Ndubisi(2006) “Consumer attitudes, system's characteristics and internet
banking adoption in Malaysia”Journal Management Research News,Year 2006 ,Vol
29, Pp 16-27
Barry Howcroft, Robert Hamilton, Paul Hewer(2002) “Consumer attitude and the
usage and adoption of home-based banking in the United Kingdom” Journal
International Journal of Bank Marketing, Vol 20 ,Year 2002 ,pp:18-19
Aref A. Al-Ashban, Mohammed A. Burney(2001) “Customer adoption of tele-
banking technology:the case of Saudi Arabia” Journal International Journal of Bank
Marketing ,Vol 19 ,Year 2001,pp:32-38
Anita Lifen Zhao(2008) “Perceived risk and Chinese consumers' internet banking
services adoption” Journal International Journal of Bank Marketing, Vol 26 ,Year
2008, Pp 505-525
Heikki Karjaluoto, Minna Mattila, Tapio Pento(2002) “Internet vs mobile banking:
comparing customer value perceptions” Journal Business Process Management
Journal, Vol 13 ,Year 2007,pp:72-78
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BOOKS
Malhotra, T. D., “ Electronic Banking and Information Technology in Banks” Sultan
Chand and Sons, New Delhi,2002.
S.S Kaptan & N.S. Choubey. “Indian Banking in Electronic Era.
WEBSITES
http://www.infosys.com/finacle/solutions/solutions_ebanking.asp
http://en.wikipedia.org/wiki/online_banking
http://emeraldinsight.com/10.1108/
http://emeraldinsight.com/10.1108/10662240710758957
http://www.essaytown.net/lib/essay
http://www.academon.com/lib/paper/25315.html
http://www.arraydev.com/commerce/jibc/
http://www. Banknetindia.com,2003
http://www.mit.gov.in/eg/home.asp,2003
http://www.arraydev.com/commerce/jibc/9806-06.htm
http://www.dit.net/itnews/newsjune99/newsjune22.htm
http://www.internetworldstats.com/state5.htm#me
http://www.internetnews.com/bus-new/article/0.6 57535100.htm
http://www.mir.com.my/lb/budget2002/index.htm
http://www,new.ejisdc.org/js/include/getdoc.phplid=167and article=184and mode=pdf
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CHAPTER:-VI
ANNEEXURE
QUESTIONNAIRE
1 Which banks do you have your account?
a. State Bank of India c. HDFC Bank
b. Punjab National Bank d. ICICI Bank
2 While opening up the account, were you aware of E-banking services provided by your
bank?
a. Fully aware b. Had an idea c. No
3 If answer to question no.2 is c, how did you get to know about E-banking services of
your bank?
a. Personal visit
b. Executive from the bank
c. Advertisements
d. Friends/ Relatives
4 If answer to question no.2 is a or b, which of the following E-banking services are you
aware of?
a. ATM
b. Debit Card
c. Credit Card
d. Phone banking
e. Mobile banking
f. Internet banking
5 Do you use E-banking services?
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a. Yes b. No
(If No, answer question no. 10 directly).
6 If answer to question no.5 is yes, how frequently do you use each of the following
services?
FactorsOnce in
a day
Once in
a week
Once in
a
fortnight
Once in
a month
Infreque
ntly
a ATM
b Debit Card
c Credit Card
d Phone Banking
e Mobile Banking
f Internet Banking
7. Which of the following factors influence you the most to use E-banking services?
Factors Strongly
More
than
average
average
Less
than
Average
Not at
all
A All time availability
B Ease of use
C Availability of
resources
D Nearness
E Integrated platform
F Direct access
G Accuracy of
information
H Friends/ Relatives
I Status symbol
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8. Which of the following benefits accrue to you, while using E-banking services?
a. Time saving c. Inexpensive
d. Easy processing d. Easy fund transfer
9. Which mode do you use for conducting the following transaction?
Personal
Visit
ATM/
Debit
Card
Phone
Banking
Mobile
Banking
Net
Banking
If you have all of
the previous
options which one
would you use
(kindly mention
the number 1-5)
1 2 3 4 5
A Account related
transactions
B Cheque related
transactions
C Credit Card
related
transactions
DMisc
transactions
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10. Rate the problems identified while using E-banking services?
Factors Grievous Major Average Minor Ignorable
A Time consuming
B Insecurity
C ATM out of order
D Amount debited but not
withdrawn
E Problem of change in
mobile number
F Password forgotten
g Card misplaced
h Card misuse
11. Kindly rate the following reasons enlisted for not using the E-banking services?
Factors
Highly
importa
nt
More
than
average
Average
Less
than
average
Least
importa
nt
a No need( Satisfied with
traditional banking)
b It seems like a
botheration
c Insecurity
d No access to
internet/mobile
e Lack of operational
knowledge
f Hidden costs
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12. To what extent are you satisfied with your Banks’ E-banking services?
b. Highly Satisfied ________
c. Satisfied ________
d. Neutral ________
e. Dissatisfied ________
f. Highly dissatisfied ________
Respondent’s Profile
Name : ________________ Income level per month
Age : ________________ Less than Rs. 10,000
Gender (M/F) : ________________ Rs.10,000 to Rs.20,000
Profession : ________________ Rs.20,000 to Rs.30,000
Organisation : ________________ More than Rs.30,000
Thanks for participating in the survey.
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