International Journal of Research e-ISSN: 2348-6848

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A Study on E-Banking Service Quality and Customer

Satisfaction
Rambabu Lavuri
Ma, Mba(Ugc - Jrf, Net), Pgdsrd-Nird, (Ph.D) Dept. Of Business Management,
Osmania University, Hyderabad
E-mail: rambabu.lavuri@gmail.com

ABSTRACT: achieving world standards in terms of size,

The paper studied that E-banking service products and services. Indian banks have
quality on customer satisfaction and also it realized that along with organic growth
evaluates major EBSQ factors like
there is a need to grow inorganically as
Reliability, Responsiveness, Tangibility,
Empathy and Accuracy on customers well, in order to be competitive with other
satisfaction. Moreover , the paper also players in the market. In this scenario,
aims to understand the correlation banking has been the focus of attention for
between respected factors towards the banking industry. The emergence of
customer satisfaction. For that a structure new economies and their rapid growth
questionnaire was used to measure the have been the most important contributing
consumer satisfaction, with sample size
factors in the resurgence of banking.
427 respondents and tested via descriptive
statistics , percentages ANOVAs, Changing lifestyles, rapid improvements in
Correlations and Multiple regressions. information technology and other service
For conducting customers survey likert sectors, as well as increasing levels of
scale based questionnaire was developed. income, have contributed to the growth of
Collecting data was analysed using banking services in countries like India
principle component using SPSS 20.0. The that are developing at a good pace. A
results of the ANOVA showed that there is
decade ago, the banking sector was tough
a significant different with EBSQ and
demographical variables, and Customer on a finger tip. But now it is possible. All
satisfaction, and followed with correlation the bank transactions with a connection to
results showed that there is a strong mobile handsets technology is the latest
correlation between EBSQ and Customer innovation means necessary to make. In
satisfaction and Age in years and Multiple addition, SMS Banking, Mobile Banking
regression results showed that Age in
in India, and all the modernization are the
years, Education, Responsiveness and
Reliability will have higher positive major steps taken by banks towards
evaluation on e- banking service quality Internet banking and ATMs. With all these
towards customer satisfaction. tools and systems, banking has become a
complete freedom to experience.
Keyword: Customer, E-Banking, Accounting, fund transfer and payment for
Reliability, Responsiveness, Tangibility, centuries, has been followed in physical
Empathy, Accuracy, service quality.
bank check which is now modernized. But
the standing for hours in front of the cash
1. INTRODUCTION counter and time to withdraw your own
Banking Services in India The banking money is in foundation. The Indian banks
scenario in India is of a highly developed are vying with one another to grab a pie of
nature, even though it is still far from the banking service sector which has

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 International Journal of Research e-ISSN: 2348-6848
p-ISSN: 2348-795X
Available at https://edupediapublications.org/journals
Volume 05 Issue 12
April 2018

tremendous potential over the GDP in influenced. He also suggested that the
India. It also has its share of challenges in functional quality is an important
retaining customers, introduction of tech- dimension of perceived service than the
savvy facilities and investments in such technical quality. Therefore, the essence of
facilities, security concerns, Know Your effectiveness in managing services lies in
Customer (KYC) norms, credit evaluation improving the functional quality of a
norms, etc. Concept of Service Quality firm’s service by managing the buyer-
Lewis and Booms (1983) had suggested seller interaction as compared to
that service quality results from a traditional marketing activities.
comparison of what customers expect from
a service-provider with the provider’s 2. REVIEW OF LITERATURE
actual performance. According to them, The study of service quality of banking
“service quality is a measure of how well services and satisfaction level of bank
the service level delivered matches customer has to start with a review of
customer expectations. Delivering quality earlier works conducted and theories
service means conforming to customers developed in this area to give a formal
expectations on a consistent basis.” design to the present task. The reviews on
Dimensions of Service Quality While the banking sector and the services
evaluating service quality, consumers involved with are elaborated along with
examine the following aspects: tangibility, the literature studies of service quality and
reliability, responsiveness, assurance and customer satisfaction dimensions as
empathy. Tangibility includes the service- follows: Khan, Nisar Ahmed et al. (2005)
provider’s physical facilities, its equipment conducted a study to examine the
and appearance of the employees. performance of scheduled commercial
Reliability is the ability of the firm to banks in general and public sector banks in
perform the service promised dependably particular during the post reform period. It
and accurately. Responsiveness is the also analyzed the performance of three
willingness of the firm’s staff to help categories of banks viz., public, private
customer and to provide him with prompt and foreign banks by comparing their
service. Assurance refers to the knowledge capital adequacy, asset quality,
and courtesy of the company’s employees profitability and participation in rural
and their ability to inspire confidence in areas. It revealed that profitability and
the customer. Empathy is caring and the efficiency of these banks have improved
individualized attention that the service considerably during the period, but the
firm provides to each customer. Managing participation in rural areas in terms of
Service Quality Gronross, a service number of offices, growth of credit,
marketing expert, proposed that a service growth of deposits etc., have significantly
firm, in order to simultaneously attain declined during the reform period.
success, must develop its service quality. Krishnaveni, R. et al. (2005) analyzed the
Firstly, it must define how the consumers existing Indian banking scenario in the
perceive service quality and secondly, light of liberalization and globalization
determine in what way service quality is reforms in the country. They also studied

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 International Journal of Research e-ISSN: 2348-6848
p-ISSN: 2348-795X
Available at https://edupediapublications.org/journals
Volume 05 Issue 12
April 2018

the perceptions of the corporate customers five dimensions such as reliability,

regarding the service quality of their responsiveness, empathy, assurance and
bankers. The study found that there is a tangibility were used for collecting
wide gap between the strategies followed primary data. A major finding of the study
by the Indian banks when compared to the was that Indian banks fall much below the
foreign banks. The situation is same in the perceptions of their customers on all
case of customer perceptions of service dimensions of service quality. Foreign
quality. banks are exceeding the perceptions of
Gopalakrishnan, V (2004) has inquired the their customers on tangibility and
challenges of Indian financial services reliability dimensions of service quality.
market. This study revealed that the entry Krishna Chithanya, V. (2005) studied the
of new foreign banks and private sector meaning, nature and scope of financial
banks with their advanced knowledge base activities in India and its features and to
of automation in the banking operations frame marketing strategy to attain service
and aggressive marketing strategies has quality and to suggest effective channel of
pushed public sector banks to a tight distribution. By this study, service quality
corner. He wants the public sector banks, is the difference between the perceptions
to survive and succeed by identifying their of actual service quality and expectation of
marketing areas, develop adequate customers and the customer courtesy,
resources, and convert these resources into credibility and security. It proposed a two
healthy and efficient services and way channel for distributing financial
distribute them effectively satisfying the services such as, remote - T.V, Phone, PC
manifold tastes of customers. etc., and face- to-face traveling, visiting
Prabha, Divya et al. (2006), in their study offices etc.
analyzed the service quality perceptions of Bauer, Hans H. et al. (2005) empirically
the corporate customers in Coimbatore examined characteristics of a website that
regarding the services provided by their transform into an extensive e-banking
banks. For the study they considered both portals and to analyze different facets of
product and service based sectors and the quality of services delivered through e-
SERVQUAL scale based questionnaire for banking portals in order to process a
the survey. By this study it has been service quality measurement model. The
revealed that even though customers are measurement model constructed in this
more satisfied with the competence and study was based on different dimensions
customer orientation dimensions of service such as security and trust, basic service
quality, still banks need to focus upon the quality, cross-buying service quality,
aspects of communication, modernization added value, transaction support and
and quickness of service. responsiveness. Here, the identified
Bhat, Mushtaq A. (2005) studied service dimensions were classified on the basis of
quality perceptions of Indian banks in its nature as core services, additional
comparison with that of foreign banks. services and problem solving services.
SERVQUAL instrument developed by
Parasuraman et al. in the year 1988 and its 3. OBJECTIVES

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 International Journal of Research e-ISSN: 2348-6848
p-ISSN: 2348-795X
Available at https://edupediapublications.org/journals
Volume 05 Issue 12
April 2018

Following are the objectives of the present  Sources of data: Primary source of
study data is collected from the
 To find out the correlation respondents through structured
between E-Banking services questionnaire and it was in order to
quality and demographical collect data on the factors which
variables of customers? affect E-banking services.
 To find out the relationship Secondary data is collected from
between E-banking Service various Journals, Periodicals such
quality factors and customers as Magazines, Business
satisfaction? newspapers, and from subject
4. HYPOTHESIS related books and websites.
The following are the hypothesis designed  Data collections methods: Data
with above objectives has been collected using structure
 HO1: There is no significant questionnaire through customer
correlation between E-Banking survey method and personal
services quality factors (EBSQ) interview of e-banking customers.
and demographical variables.  Sampling area: Hyderabad city
 HO2: There is no significant  Sampling Method: Convenience
impact of E-banking service quality sampling method has been used to
factors on customer satisfaction collect sample of 427 respondents.
 Statistical tools used: ANOVAs,
5. RESEARCH METHODOLOGY correlation and Multiple
 Research Design: Descriptive regression using by SPSS 20.0.
research
6. DISCUSSIONS
Demographic Variables: The frequency distribution of demographic variables is presented in
the following table
Table-1: Demographic Analysis
Particulars Classification No of Responses Percentage
20-25 95 22.2
26-30 117 27.4
Age 31-35 115 26.9
36-40 75 17.6
41 and above 25 5.9
Male 296 69.3
Gender
Female 131 30.7
SSC 34 8.0
Intermediate 26 6.1
Education Degree 183 42.9
Pg degree 121 28.3
PhD and above 63 14.8
Student 54 12.6
Occupation Govt Employee 96 22.5
Private Employee 166 38.9

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 International Journal of Research e-ISSN: 2348-6848
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Volume 05 Issue 12
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Business 60 14.1
Self Employed 51 11.9
Below 20,000 35 8.2
Monthly 20,001-30,000 143 33.5
income 30.001 - 40,000 123 28.8
(in rupees) 40,001-50,000 77 18.0
50,001 and above 49 11.5
Total n = 427 100%

The descriptive analysis of all the Employees, 22% are the Govt. Employee,
demographical variables is shown in the and 33% of respondents earned
above Table, from that more than 27% of Rs.20,001-30,000 for month and 28% of
respondents in the group of 26-30 years respondents earned above Rs. 30,001-
and 26% of respondents in the group of 40,000 respectively.
31-35 years, followed by 70% of the
respondents belonged male and 30% of ANOVA: It is conducted in order in order
respondents belonged female, and 42% of to understand whether there is any
respondents studied Graduation and with significant difference in opinions of
followed 28% of respondents studied respondents on E-banking services and
Below Post Graduation, 38% of Service quality factors, the results are
respondents working as a Private presented in the following table.
 Ho1: There is no Significant Correlation Between EBSQ factors and Demographical
Variables.
Table-2: ANOVA
Demographical Variables F Sig.
Age in years 3.076 .000
Gender 1.275 .200
Education 1.360 .000
Occupation .889 .003
Income in rupees 1.041 .002

It is evident that from the above table, variables like age, education, occupation
dimensions like E-banking services, service and income in rupees. and followed with
quality factors of the F value is found to be except gender, remaining all
significant, meaning there by there is demographical variables significant
significant different with demographical different with service quality factors

 HO2: There is no significant affect of E-banking Service quality factors on customer

satisfaction

Table-3: ANOVA with service quality factors and E-Banking services

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EBSQ factors F Sig.

Reliability 2.154 .000
Responsiveness 1.532 .002
Tangibility 1.542 .003
Empathy 1.342 .159
Accuracy 1.729 .001

It is evident that from the above table, E- there is no identified response variable. It
Banking Service quality factors like measures the strength (qualitatively) and
Reliability, Responsiveness, Tangibility, direction of the linear relationship between
two or more variables.
Empathy and Accuracy of the F value is
found to be significant, meaning there by In order to develop further understanding
there is significant different with Customer of relationships among all the Customer
satisfaction, so finally there is significant satisfaction and E-banking dimensions
different with Customer satisfaction by the constructs, the Pearson correlation
E-Banking service quality. technique was calculated in the study.
Numerical values of the correlation
CORRELATIONS: It is used to describe coefficients reflect the degree of
the linear relationship between two association between each of the Customer
continuous variables. In
satisfaction dimensions constructs.
general, correlation tends to be used when
Table-4: Correlations
Age In Gender Education Occupation Income In EBSQ Customer
Years Rupees satisfaction
Age in Years 1 .225** .154** -.374** .145 .276** .211
Gender .225** 1 .244** .021 -.122* .241 .140
Education .154** .244** 1 .015 .252** .192 .212
Occupation -.374** .021 .015 1 .200** .235 .252
Income in .145 -.122* .252** .200** 1 .100* .121
Rupees
EBSQ .276** .241 .192 .135 .100* 1 .282
Customer .211 .140 .212 .252** .121 .282 1
satisfaction
EBSQ: E-Banking service quality
From below Table, correlation results MULTIPLE REGRESSION:
show that there is a strong correlation MULTIPLE RGRESSION: Multiple
between EBSQ and Customer satisfaction regression analysis is a set of statistical
(r = 0.282) at the 1 per cent significance processes for estimating the relationships
level and between EBSQ and Age in years among variables. it helps to understand
(r = 0.276). how the typical value of the dependent
variable changes when any one of the
independent variables is varied, while the

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 International Journal of Research e-ISSN: 2348-6848
p-ISSN: 2348-795X
Available at https://edupediapublications.org/journals
Volume 05 Issue 12
April 2018

other independent variables are held fixed. explained. So In order to understand

It also helps to determine the overall fit of relationships between the E-Banking
the model and the relative contribution of service quality and demographical
each of the predictors to the total variance variables, Customer satisfaction.

 Ho1: There is no Significant Correlation Between EBSQ factors and Demographical

Variables.

Table-5: Model Summary

R Adjusted R Std. Error of
Model R F Sig.
Square Square the Estimate
1 .242a .059 .048 .30589 5.249 .000b
a. Predictors: (Constant), income in rupees, age in years, gender, education, Occupation

From the above table, it reveals that R2 null hypothesis is rejected and the
value is found to be 0.059, meaning there alternative is accepted , meaning thereby
by that 59% of the variation in dependent that there is a significant difference in the
variable is explained by predictors. Since variation caused by predictors towards E-
the F value is found to be significant, the banking services.

Table-6: Coefficientsa
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
(Constant) 3.489 .100 34.998 .000
Age in years .092 .054 .234 4.421 .000
Gender .041 .034 .060 1.200 .001
1
Education .066 .045 .088 1.724 .004
Occupation -.039 .024 -.071 -1.357 .076
Income in rupees .045 .024 .092 1.816 .070
a. Dependent Variable: E-banking service quality

From the Table, it is evident that Age in respondents will have higher positive
years (.092) emerged as the most evaluation on e- banking service quality,
important demographic variable, followed and also results shown that there is
with Education (.066). It concluded that negative impact of Occupation with E-
higher education qualification of banking service quality,
 HO2: There is no significant impact of E-banking service quality factors on
customer satisfaction

Table-7: Model Summary

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R Adjusted R Std. Error of the

Model R F Sig.
Square Square Estimate
1 .300a .090 .079 .30073 8.344 .000b
a. Predictors: (Constant), Accuracy, Reliability, Responsiveness, Empathy, Tangibility

From the above table, it reveals that R2 null hypothesis is rejected and the
value is found to be 0.090, meaning there alternative is accepted , meaning thereby
by that 90% of the variation in dependent that there is a significant difference in the
variable is explained by predictors. Since variation caused by predictors towards E-
the F value is found to be significant, the banking services.

Table-8: Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Beta
Error
1 (Constant) 3.415 .209 16.355 .000
Reliability .098 .029 .161 3.332 .001
Responsiveness .170 .035 .239 4.856 .000
Tangibility -.035 -.027 .064 -1.288 .019
Empathy .075 .028 .129 2.703 .007
Accuracy -.022 .030 -.035 -.728 .002
a. Dependent Variable: Customer satisfaction

From the Table 8, it is evident that of respondents in the group of 26-30 years
Responsiveness (.170) emerged as the and 26% of respondents in the group of
31-35 years, followed by 70% of the
most important EBSQ factor, followed
respondents belonged male and 30% of
with Reliability (.098). It concluded that respondents belonged female, and 42% of
higher Responsiveness of EBSQ will respondents studied Graduation and with
have higher positive affecting on followed 28% of respondents studied
Customer satisfaction. And also results Below Post Graduation, 38% of
shown that there is negative impact of respondents working as a Private
Employees, 22% are the Govt. Employee,
Tangibility of EBSQ.
and 33% of respondents earned
Rs.20,001-30,000 for month and 28% of
7. CONCLUSIONS
respondents earned above Rs. 30,001-
The present paper studied that customer
40,000. followed with the results of the
satisfaction through better service quality
ANOVA showed that there is a significant
provided by E-banks, there are two major
different with EBSQ and demographical
objective and data collected with through
variables, and Customer satisfaction, and
questionnaire. It was analysed by the
followed with correlation results showed
percentages, ANOVAs, Correlation and
that there is a strong correlation between
multiple regression. As per the results 27%

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Volume 05 Issue 12
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EBSQ and Customer satisfaction (r = District-An Analysis. International Journal

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Friendly Technological Services offered by
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Palayamkottai, Tirunelveli District.
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