CHAPTER-II

REVIEW OF
LITERATURE
 CHAPTER-II
REVIEW OF LITERATURE
2.1. INTRODUCTION:
Today’s banking sector in India has laid down greater emphasis on technology and
innovation. Banks began to use technology to provide better quality of services at
greater speed. The Internet Banking is becoming one of the fastest growing
technologies that are playing a significant role in the satisfaction of banking
customers. Internet Banking and Mobile Banking made it convenient for customers to
do their banking from geographically diverse places. Banks also sharpened their focus
on rural markets and introduced a variety of services, geared to the special needs of
their urban and rural customers. The online Banking services are changing the
banking industry and are having the major effects on banking relationships. At present
many of the banks around the world have web presence in form of Online Banking
services, Support services etc. In the world of banking, the development in
information technology has an enormous effect on development of more flexible
payment methods and more- user friendly banking services. Electronic Banking
services are new and the development and diffusion of these technologies by financial
institutions is expected to result in more efficient banking system to users and also
bankers. Since last decade of 20th century, online banking affected more the
traditional banking system. Online banking is a modem tool in the hands of banks in
order to provide banking services to customers. The researcher has gone through the
various literature in order to get insight in to the research problem. At the same time
he has tried to find out the gaps in research so as to bridge the gap through this
research. The forgoing writing highlights the earlier research work undertaken by
eminent scholars.

2.2. REVIEW OF EARLIER STUDIES:

A.T.Mohammed, (2012)1, in his research article entitled on E-Service

quality strategy: Achiving customer Satisfaction in online’, has emphasised that
online banking requires formulating a strategy of building of framework for web
based e-service quality model in internet banking services. Online banking for the
customer satisfaction which can lead to build and measure an innovative e-services

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model that is applicable to evaluate the web based internet banking services quality.
The researcher said the services quality determines the customer satisfaction of online
banking. Researcher also studied the 1. Gap model in service marketing, 2. Theory of
gap model, 3. Magnitude and direction of each gap, 4. Application of the gap model,
5. Cronrons 1984 model, 6. Evaluated performance of normalized quality model, 7.
Technology acceptance model and existing technology service quality model. The
researcher measures E-service quality and evaluated 1. Service information gap, 2.
Service standard gap, 3. Service performance and service communication gap.
Akinyosoye, (2011), in his research article entitled on ‘Customer
Preference for E-Banking services: A Case study of Selected Banks in Sierra
Leone’, researcher his found that online banking has a lot of benefits which added to
customers satisfaction in terms of better quality of service offering and at the same
time enable the banks gain more the success of e-banking service and thus constitute
major concern to financial institutions and customers. Researchers selected 360
respondents and used four point likrt scale method for purpose of measurement of
customer’s satisfaction. He finally concluded that many people are increasingly using
this service. E-banking has become more important phenomenon in the banking
industry with continuous progress in information technology. Finally e-banking
experiencing transformation from cost based system to a paperless system, that is
more convenient and reliable.
Al-Zubi (2011), in his research paper entitled on ‘E-bnking functionality
and outcomes of customers satisfaction: An empirical Investigation’, stated that
the adoption of e-banking had a positive effects on customer satisfaction, loyalty and
positive WOM (Word of Mouth). The study was amied to reveal the adoption of e-
banking factors in the Jordain commercial banks, to determine the factors which
constitite e-banking functionality in the Jordian Commercial banks and to examine the
effect of costumer satisfaction.The researcher gathered the 185 questionnairs, yielding
a response of 179 respondents. Researcher formulated various hypotheses pertaining
to accessibility, convenience, security, privacy, content, design, speed, fees and
charge have positive influnce on customer satisfaction. Appart from this security,
privacy and content appeal have the gretest impact on customers satisfaction.
Ankit (2011)4, in his research article entitled on ‘Factors Influncing Online
Bnking Customer Satisfaction and Their Importance in Improving overall
Retention Levels: An Indian Banking Prespective’ focused on investigation of the
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major factors that influence online customers satisfaction with the overall service
quality of their banks. Today more and more Indian banks are trying to differentiate
themselves in a fiercely competitive Industry. The objectives of the paper are to
investigate the factors that influence the level of satisfaction of online customer (i.e.
customer using online or internet banking services) of selected retain banks and
assessment of relative significant of those factors on overall satisfaction of these
online banking customers. Researcher selected 250 sample sizes and used the primary
source like questionnaire and interview. His finding shows that a majority of the
sample customers were in general, satisfied with the overall service levels of their
banks. Finally he has concluded that core services, problem resolution, cost saved,
convenience risk , privacy concerns were the major factors that strongly affect the
overall satisfaction of online customers.
Bello et.al (2010)5 in his research article entitled on ‘Impact of E-banking
on Customer Satisfaction in Nigeria’ examined and assessed the impact of e-
banking services on customer satisfaction. He has studied three banks in Nigeria He
draw a sample of 180 people (60 in each bank) that maintain current account with
these banks. He analyzed the data using descriptive statistics and Chi-square. He
found that many banks customers in Nigeria are fully aware of the positive
developments in information technology and telecommunication. Customers
perception of and reaction to their developments are issues of concern to both
Government and Banking Industry. He concludes that electronic banking has become
one necessary survival weapon and is fundamentally changing the banking industry
worldwide. Banks have to upgrade and constantly think of new innovative customized
products and services to remain competitive. Government should provide adequate
regulatory framework that will ensure customer protection and security of transaction.
That way bank customer’s confidence in electronic banking would be secured.
Cai.et.al ( 2001)6, in their research article entitled on ‘The key
Determinants of Internet Banking Service Quality: A content analysis’ the
researchers focus on the issue associated with internet banking service quality. The
researcher analyzed 17 dimensions of internet banking service quality. Which can be
classified into three broad categories first is customer’s service quality second is
banking service product quality and third is online system quality. Customer’s service
quality includes responsiveness, competiveness, creditability, access, communication,
understanding, collaboration, continuous improvement. In banking service product
fAHR- BAl'ASA’-''. : .
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SHIViWi n
includes content, accuracy, easy to use, timeliness, authentic, security. In the third
dimension online system quality involves product verity and driver features. The
researcher said that high level of customer service quality can exert a positive
influence on customer satisfaction. Online service quality based on series of focus
group interview sessions, tangibility, reliability, responsiveness, competence,
communication, creditability, security, access and understanding the customer. The
researchers found out customer service quality indentified in reliability,
responsiveness, competence, access, communication, creditability, understanding,
collaboration and continuous improvement. Most frequently sources of satisfaction
are responsiveness, ease of use, access and competence. The researcher finally
concluded the quality initiatives should be begin with depending on customers’ needs
and preferences and their related quality dimensions. The researchers also identified
the customer service quality, online system quality and banking service product
quality very are the important aspects to improving customer satisfaction of online
banking.
Cheng.et.al (2012)7, in their research entitled on ‘An analysis of customer
Switching Internet Banks in Hong Kong’ examined that the main direct effects of
customer satisfaction loyalty and switching costs on split internet bank behavior. The
model also examines the moderating role of socio- economic characteristics on the
relationship between customer satisfaction, loyalty and switching costs- split of
internet bank behavior. The researcher also examined their relationship between
different socio-economic characteristics. Researcher collected primary data by using
questionnaire on internet survey on screen of www.my3g.com and respondents could
participate in this survey via the internet. In all 557 respondents given response.
However, only but 271 respondents gave proper response. Researcher tested his
hypothesis with t-test. Final result of this research provided substantial support for
the proposed research model. Split internet banking beheviour is widespread and is
heavily influenced by such factors as risk reduction, relative advantage of selected
internet banks, prestige needs for credit and special circumstances.
o
Gad.et.al (2008) , in research article entitled on ‘Customer Satisfaction
with Online Banking: A case Study on HSBC Egypt’ examined the five online
service quality dimensions reliability, efficiency, responsiveness, fulfillment and
privacy. In that 1 fulfillment and reliability, 2 website design including navigation
information search order processing, appropriate personalization, 3 customer service
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and security / privacy these dimensions studied by the researchers. The main objective
of the study is to measure the customer satisfaction concerning HSBC online banking
service quality among five dimensions and to measure the impact of demographic
variables on customer satisfactions concerning HSBC online banking service quality.
The researchers used the survey method in which they analyzed response of 109
respondents. The survey includes two sections one is demographic section and second
one is satisfaction scale concerning the five online service quality dimensions. The
researchers found that the HSBC customers are more satisfied with online banking
services and privacy of their HSBC online banking experiences. Out of the five
dimensions responsiveness, reliability and efficiency of the HSBC bank are prominent
in ascending order. The researcher concluded that in respect of privacy, fulfillment
and efficiency dimensions the customers are highly satisfied with the online banking
services provided by the HSBC bank during the study period.
Hamadi (2010)9, in his research article entitled on ‘The impact of quality of
Online Banking on Customer Commitment’ researcher demonstraite the existance
of a causal relationship between percived quality, satisfaction and commitment in the
context of online banking. Researcher studied electronic quality, commitment,
satisfaction. The researcher used convenience sampling method and selected 203
sample. Researcher also measuring the percived quality of internet banking has been
developed for this research. In this articles results are the consumers satisfied with
internet banking in the future and to visit there banks websites first for necessary
banking services. Researcher analysed data with standerdised regression coefficent of
SEM model of the percived quality of internet banking.
Hazlina Abdul Kadir.et.al (2011)1W, in their research article entitled on

‘Impact of Services Quality on Customer Satisfaction: Study of online banking

and ATM services in Malysia’ identified the effects of services offered by
Malaysian bank through online media and ATM’s on customer satisfaction. At first
online banking services demanded some facilities such as coputer and software to
offer their services. This study include the 500 sample of student in different
Malaysian Universityies ( All have Bank Account) and use the Two-Way ANOVA
for the purpose of analysing colleted data. SERVQUAL model found unable to
respond customer need.
Janaki (2010)11, in her research article entitled on ‘E-baking Challenges
and Respnses in Durai, The Changing Era of E-banking’ she found that clear and

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widely disseminated strategy that is driven from the top and takes into account the
effects of e-banking, together with an effective process for measuring performance
against it. She suggested undertaking market research, adopting systems with
adequate capacity and scalability, undertaking proportional advertising campaigns and
insuring that they have adequate staff coverage and a suitable business continuity
plan.
Kumbhar (2012) in his research article entitled on ‘Factors affecting on
customer Satisfaction in E-banking: a case study of Public and Private Sector
Banks’ examined and found that demographics of the customers are of the most
important factors which is influencing internet banking services. There is significant
difference in the customer’s perception in internet banking services provided by the
public and private sector banks. In this research paper main objective is to observe
major users group of internet banking services, service quality and their satisfaction
between customer’s demographics and their satisfaction in internet banking. He is
using Likert scale method of analyzing observations. His overall results show that
lightly educated, a person who are employees, businessmen and belongs to higher
income group and younger group are using this service. However, remaining
customers are not using this services. The private sector banks are providing better
service quality of internet banking than service provided by the public sector banks.
Kumbhar (2011) , in his research article entitled on ‘Faetors affecting the
customer satisfaction in e-banking: some evedience from Indian Banks’ focused
on the impact of service quality dominations on customer satisfaction in brand
perception on e-banking. These study based on the hypothesis is that all services
quality dimension under study are not significantly contributions, perceive value in e-
banking .The result of the study indicates that perceived value, brand perception, cost
effectiveness, easy to use, convenience problem handling, security Assurance and
responsiveness are important factors in customer satisfaction regarding e-banking.
Kumbhar (2011)14, in his research article entitled ‘Service quality
perception and Customer Satifaction in Internet Banking Service: a Case Study
of Public Sector and Private Sector Banks’ found the e-banking is cost effectives
and compensation are predictors of brand perception in e-banking. Fulfillment,
efficiency, security/ assurance, responsiveness, convenience, cost effectiveness,
problem handling and compensation are predictors of perceived value in e-banking.
The researcher studied the topic with the following objectives 1. To assess the impact
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of service quality dimensions on customer satisfaction in e-banking 2. To assess the
impact of perceived value of e-banking service on customer satisfaction. Lastly the
result of the study indicates that all 13 variable ware found significant and were good
prediction of overall satisfaction regarding e-banking. However a result of principle
component analysis indicates that preserved value, brand perception, cost
effectiveness, easy to use, convenience problem handling, security/assurance and
responsiveness are important factors in customer satisfaction in e-banking. He
suggested the e-banking service designers should think over this dimension and make
possible changes in the e-banking services according to the customer expectation and
the need of the time.
Lin (2005)15, in his research paper entitled on ‘Customer Percetption of E-
service quality in Online Shopping’ the main purpose of this paper was to examine
the relationship among e-service quality orientation and over all service quality
customer satisfaction and purchase intentions. The main finding are the dimensions
of website design, reliability, responsiveness affect over all services quality and
customer satisfaction. The researcher suggest that to enhance customer purchase
intentions, online stores should develop marketing strategies to better address
trustworthiness reliability and responsiveness of web based services. Finally the study
makes contribution is two main areas, first the instruments dimension of e-services
quality by modifying the service quality model to consider online shopping context.
Second, this study indentified e-service quality dimension that affects overall service
quality and customer satisfaction which in turn are significantly related to customer
intention to purchase.
Mahmod Jasim Alsomydai.et.al (2012)16 in their research article entitled
‘The Factors influncing customers satsfaction and continuity to Deal with e-
banking services in Jordan’ examined the factors affecting customer’s satisfaction
for the continuation in dealing with electronic services. The researcher constructs his
study divided his study in five dimensions including e-banking services quality,
personal factors, perceived usefulness, customer satisfaction and continuity to deal
with e-banking services. Main objective was to explore the impact of the factors
related to e-banking service quality on customer satisfaction and continuity in dealing
with e-banking services and to determine impact of the personal factors on customer’s
satisfaction and dealing with e-banking services. The researchers studied various
study models (a) E-Banking concept, (b) Service Quality, (c) Personal Factors, (d)

15
Received usefulness, (e) Customers satisfaction model and (f) Continuity to use e-
banking services. They collected primary data from 441 samples and analyze the data
use of statistical tools, mean, median and standard deviation, spearman’s correlation
coefficient. The researchers found that personal factors including knowledge needs,
trust habit and personal experience as well as perceived usefulness as major factors
influencing Jordian Consumers satisfaction and continuity to deal with Jordian e-
banking services.
Nupur.(2010)17, in his research on “E-banking and Customer Satisfaction
in Bangladesh: An Analysis”, estimated that e-banking can provide faster and
reliable services to the customers. They are relatively happy. The study period was
2006-09. This paper elaborates the impact of variables of e-banking on customer
pleasures in Bangladesh. The main objective of this paper has to find out whether e-
banking can satisfy customers or not. The researcher selected 400 samples and used
random sampling method. Finally researcher concluded a number of private banks are
operating their online banking activities in Bangladesh.
Pho.(20O9) , in his research on ‘Drivers of Customer Intention to use
online Banking: An empirical Study in Vietnam’ examined the GDP growth of
banking, which is approximately 15% and these industries play vital role in the
economy. In online banking comes a new person in Vietnam and rare rates of
adoption of online banking. This paper is based on theoretical framework. The
researcher formulate the four hypothesis out of them one important hypothesis service
quality is positively related to brand (a) experience and (b) banking service providers
trustworthiness was accepted. The researcher analyzed data by using correlation and t-
test regarding the customer’s satisfaction. The researchers finally concluded that
online banking services and customer intension are receiving attention of new
researchers. Online banking is attracting customer attention. The reliability, validity
and transparency are highly satisfactory. Customer intentions are affected by
information system quality, information quality and service quality.
Ramadhan (2011)19, in his research on ‘Internet Banking, Consumer
Adoptaion and Customer Satisfaction’, focused on customer adoption and customer
satisfaction especially in the African setting about technology implementation of
internet banking. His main hypothesis is no significant relationship between internet
banking service and customer satisfaction and no significant relationship between
customer adoption and customer satisfaction. He is analyzed data using the multiple
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regression analysis. A sample size selected was 351 selected on stratified
proportionate sampling technique to ensure representation of the different strata of the
population. The researcher used SPSS Version 16 for data analysis. Out of the 351
questionnaires distributed to the respondents to total of 77% was good and acceptable
response rate and thus indicating that the data is representative enough. He concluded
that research revealed positive response which was slightly above average.
Rangsan Nochai.et.al (2013)20, in their research on ‘The Impact of Internet
Banking Service on Customer Satisfaction in Thailand: A Case study in
Bangkok’ they were intended to find out internet banking service dimensions that
have the impact on customer satisfaction among top three banks in the Bangkok. They
studied safety, reliability of the services and transactions efficiency. Customer support
including before sell support and after sell support services security as the freedom
from danger, risk or doubt. It involves physical safety, financial security and
confidentiality, Ease of use as the factors influencing the adoption of interest banking
and related an easy to remember URL address. Researchers studied six major banks in
Thailand.
Selvachandra.(2011) , in his research on ‘A study on Customer
Satisfaction towards E-banking services of ICICI Bank in Chennai City’ found
that the electronic based business models are replacing conventional banking system
and most of the banks are rethinking business process designs and customer
relationship management strategies. They are also studied online banking which
provides various alternatives e-channel to using banking services that is ATM, credit
card, debit card, internet banking, mobile banking, and electronic fund transfer. The
main objective was to analyze the level of customer satisfaction towards service
provided by ICICI bank ltd. The researcher used the ANOVA method for analysis of
data. They have finally concluded various dimensions of the services rendered by the
ICICI bank customer’s perception on the services have been exhibited in analysis.
Thanh Nguyen. et.al (2004)22, in their research on ’Impact of Inetrnet
Banking on Customer Satisfaction and Loyalty: A conceptual Model’ defined
internet banking, internet banking technology, benefits of internet banking, products
and services offered online and internet banking and customer behavior.
Timothy (2012)23, in his research article entitled ‘Electronic Banking
Services and Customer Stisfaction in the Nigerian Banking Industry’ defined the
banking industry has moved into an era of menu-driven ultra robust specialized

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software programs called banking applications. Customer’s satisfactions hold the
potential for increasing and organizations customer base, increase the use of internet
banking. It is worthy of mention that the major benefits banks derive from the
application of Electronic banking services to banking business includes reduction in
error, reduction in costs, reduction in time spent in carrying out business activities,
reduce congestion in banking halls, improve delivery system among others . Efforts
should be intensified for training as most banks would rather invest on the equipment
without improving employees.
Vyas (2007)24, in his research article entitled ‘Impact of E-banking on
Traditional Banking Services’ examined the functions of e-banking. The inquiry
about information of account, Card accounts transfer, bank securities accounts
transfer, the transaction of foreign exchange, the B2C disbursement on NET, client
service, account management and reporting the loss the amount. He also studied the
types of e-banking and its advantages and limitations. He also found that e-banking
transactions are much cheaper than phone transaction. E-banking is a borderless entity
permitting anytime, any ware and anyhow banking with many advantages as
compared to traditional banking services.
2.3. CONCLUSION:-
It is found that the brand perception in e-banking and fulfillment, efficiency,
security/ assurance, flexibility, website design, responsiveness, convenience , cost
effectiveness, problem handling and compensation are predictors of perceived value
in e-banking. The demographics of the customers are of the most important factors
which influence usages of internet banking services. There is significant difference in
the customer’s perception in internet banking services provided by the public and
private sector banks. It is to state here that majority respondents have carried out
abroad. Very few from India have undertaken research on online banking services.
This shows wide gap in research area. Therefore it is worth wile to undertake study on
the impact of online services on customer satisfaction with special reference to Bank
of India Laxmipuri Branch. This will be the unique study on this area and surly will
be of helpful to Bank of India on particular and other banks in general.

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REFERENCES:

[1] A.T.Mohammed. (2012). E-Service quality strategy: Achiving customer

Satisfaction in online Banking. Journal of Theoritical and Applied Information
Technology, 38 (1), 6-24.

[2] Akinyosoye, R. G. (2011). customer Preference for E-Banking services: A Case

study of Selected Banks in Sierra Leone. Australian Journal of Business and
Management Research, 1 (4), 108-116.

[3] Al-Zubi, A. E. (2011). E-bnking functionality and outcomes of customers

satisfaction: An empirical Investigation. International Journal of Marketing Studies, 3
(1), 50-67.

[4] Ankit, S. (2011). Factors Influncing Online Bnking Customer Satisfaction and
Their Importance in Improving overall Retention Levels: An Indian Banking
Prespective. Information and Knowlege Management, 1 (1), 45-55.

[5] Bello, D. A. (2010). Impact of E-banking on Customer Satisfaction in Nigeria.

Munich Personal RePEc Archive .

[6] Cai, M. J. (2001, January 19). The key Determinants of Internet Banking Service
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[7] Cheng, D. S. (2012). An analysis of customer Switching Internet Banks in Hong

Kong. The Journal of Global Business Management, 8 (2), 114-125.

[8] Gad, K. A. (2008). Customer Satisfaction with Online Banking: A case Study on
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[9] Hamadi, C. (2010). The impact of quality of Online Banking on Customer

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[10] Hazlina Abdul Kadir, N. R. (2011). Impact of Services Quality on Customer

Satisfaction: Study of online banking and ATM services in Malysia. International
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19
[11] Janaki, P. (2010). E-baking Challenges and Respnses. In Durai, The Changing
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[12] Kumbhar, V. M. (2011). Factors affecting on customer Satisfaction in E-banking:

a case study of Public and Private Sector Banks. South Asian Journal of Management
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[13] Kumbhar, V. M. (2011). Factors affecting the customer satisfaction in e-banking:

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[14] Kumbhar, V. (2012). Service quality perception and Customer Satifaction in

Internet Banking Service: a Case Study of Public Sector and Private Sector Banks.
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Shopping. International Journal of Retail and Distribution Management.

[16] Mahmod Jasim Alsomydai, R. O. (2012). The Factors influncing customers

satsfaction and continuity to Deal with e-banking services in Jordan. Global Journal
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[17] Nupur, J. M. (2010). E-banking and Customer Satisfaction in Bangladesh: An

Analysis. International Review of Business Research Papers, 6 (4).

[18] Pho, J. S. (2009). Drivers of Customer Intention to use online Banking: An

empirical Study in Vietnam. African Journal of Business Management, 3 (11), 669-
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[19] Ramadhan, A. M. (2011). Internet Banking, Consumer Adoptaion and Customer

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[20] Rangsan Nochai, T. N. (2013). The Impact on Internet Banking Service on

Customer Satisfaction in Thailand: A Case study in Bangkok. International Journal of
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[21] Selvachandra, M. M. (2011). A study on Customer Satisfaction towards E-

banking services of ICICI Bank in Chennai City. IJMER, 1 (4).

20
[22] Thanh Nguyen, M. S. (2004). Impact of Inetmet Banking on Customer
Satisfaction and Loyalty: A conceptual Model. Fouth International Conference on
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[23] Timothy, A. t. (2012, March). Electronic Banking Services and Customer

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[24] Vyas, S. (2007). Impact of E-banking on Traditional Banking Services .

Shinghnia University.

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