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International Journal of Management (IJM)

Volume 11, Issue 6, June 2020, pp. 649-664, Article ID: IJM_11_06_054

Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=6

ISSN Print: 0976-6502 and ISSN Online: 0976-6510

DOI: 10.34218/IJM.11.6.2020.054

© IAEME Publication Scopus Indexed

CUSTOMER SATISFACTION ON E-BANKING

SERVICES OF PUBLIC AND PRIVATE SECTOR

BANKS IN PUDUCHERRY REGION - AN

EMPIRICAL ANALYSIS

K. Madavan

Ph.D Scholar, Department of Corporate Secretaryship, School of Management,

Alagappa University, Karaikudi, Tamilnadu, India.

Dr. C. Vethirajan*

Professor and Head, Department of Corporate Secretaryship, School of Management,

Alagappa University, Karaikudi, Tamil Nadu, India.

*Corresponding Author Email : [email protected]

ABSTRACT

E-banking is the application of electronic means in interaction between bankers

and customer, and bankers and businesses, as well as in internal banking operations,

to simplify and progress the banking services. Today, approximately all banks have

adopted ICT as a mean of improving the service quality of banking services. An

attempt has been made by evaluating the services rendered by banks through the e –

banking services. The e- banking service brings lot of convinienence, customer

centricity, augmented service quality and cost effectiveness. A structured

questionnaire was used in collecting the relevant data from the customers

respectively. More number of researchers and experts quoted that, service quality can

be improved through advanced information and communication technology (ICT).

This paper examines the customer satisfaction on the Electronic Banking Services of

Public Sector and Private Sector Banks in Puducherry Region. The sample size of the

study is 478; the data is gathered from both the primary and secondary information.

Non Probability sampling techniques are applied in this research article and

particularly purposive sampling technique applied for the study. Some of the

statistical tools like, independent sample t-test, ANOVA, correlation, Mean and

Standard Deviation are used in this research article. The result of the study shows that

customers of Public Sector Banks have lesser perception of the various dimensions of

e-service quality compared with the private sector Banks. This paper recommends that

the wider use of IOT based applications in banking services will make better banking

solutions.

Key words: Electronic Banking Services, Electronic Service Quality, Perception,

Customer Satisfaction & ICT

Customer Satisfaction on E-Banking Services of Public and Private Sector Banks in Puducherry

Region - An Empirical Analysis


Cite this Article: K. Madavan and Dr. C. Vethirajan, Customer Satisfaction on

E-Banking Services of Public and Private Sector Banks in Puducherry Region - An

Empirical Analysis. International Journal of Management, 11 (6), 2020, pp. 649-664.

http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=6

1. INTRODUCTION

Customers are now conscious of their rights and this tends focus the banks to shift from

“product centric” to “customer centric”. This expectation creates pressure to service providers

to perform better. E-banking service initiatives are results of such pressures by the customers

of the bank combined with the capabilities achieved through the use of Information and

Communication Technology. E-banking is the application of electronic means in the

interaction between bankers and customers and bankers and businesses, as well as in internal

banking operations, to simplify and improve banking services. One of the important aspects

of e-banking is the use of web portals of the banks as an electronic medium for bank-

customers interactions and transactions. The ultimate goal of any business organization is

generation of profits through their sales or rendering services and the same can be achieved

with attaining customer satisfaction through the better service quality. A satisfied customer

will continue their relationship with banks and refer the banking services to other as well,

generating more sales and hence more profits. Customer satisfaction is considered as a

necessary condition for customer retention, loyalty and service continuance intention.

Identification and understanding of the perception of customers towards electronic service

quality is essential in determining their satisfaction and ultimately service continuance

intention. It is also important for the bankers for attracting new customers along with

retaining existing customers. The level of this customer satisfaction, which is influenced by

the electronic-service quality, will play a vital role in determining the continued usage

intention towards electronic services of public and private sector banks.

2. LITERATURE REVIEW

Debasish, S.S. (2000) investigated the service quality in electronic-banking and using 21

variables with five dimensions for measuring the service quality. They applied Access,

Website interface, Trust, Attention and Credibility as the dimensions for measuring the

service quality. The researcher adopted the SERVQUAL dimensions such as Web interface

interactions, reliability, responsiveness assurance and empathy on 26 items that were

recommended by Parasuraman et al. (1985) and reduced those dimensions into to five

dimensions. The study pointed out that the service quality in e-banking is largely determined

by web elements and in order to provide a good quality of service. Therefore, banks which

offer electronic services should provide customers with effective web tools in a suitability

presented environment.

Oppewal, Harmen & Vriens, Marco. (2000) conducted a study and proposed the use of

integrated conjoint experiments to measure perceived service quality. They also demonstrated

the process of modeling the hierarchical relations between operationally defined service

attributes, strategically relevant service dimensions, and overall preference for banks or

banking products. The proposed method, which is based on hierarchical information

integration theory, avoids some of the limitations and problems of SERVQUAL and

traditional conjoint analysis. The approach is demonstrated with an application to retail banks

involving four service dimensions namely accessibility, competence, accuracy and

friendliness and tangibles and 28 attributes. It is found that the element of accuracy and

friendliness is the most important factor from customers‟ perspective for evaluation of service

quality, followed by competence, tangibles and accessibility. Based on the analysis,

K. Madavan and Dr. C. Vethirajan


conclusion was drawn about which dimensions and attribute changes would yield the

strongest improvements in a bank‟s utility and competitive position. The paper ends with a

discussion of topics for further research.

Jun and Cai (2001) carried out a research in order to study the scale measurement for

Internet banking service quality with customers of USA. The scale included 17 dimensions

and classified into three broad categories namely customer service quality, banking service

product quality, and online systems quality. Furthermore, out of seventeen dimensions, the

key factors effect satisfaction or dissatisfaction were reliability, responsiveness, access and

accuracy. But their study employed only content analysis based on user experiences of

Internet-only banks and traditional banks offering Internet banking service and the factors

found in this study were not validated empirically.

3. STATEMENT OF THE PROBLEM

Today, financial services particularly banking services are facing with fast changes in

information technology, increased internet penetration and usage of smart phone for digital

transactions, unbalanced economic environment, intensive competition among public, private

and foreign sector banks, consolidation and merger of public sector banks, tech-savvy

customers, etc. create more challenges in the banking industry in India. Financial service

sector particularly banking sector is facing with those issues and experiences not seen in their

history. It is not surprising that in such a turbulent environment with increasingly changes,

banking organizations are enforced to change their reactions to the market in order to sustain

and grow. Presently, electronic banking is emerged as a competitive arena for future banking

services that makes the banks to provide quality of services with more features and lower

costs than conventional banking to their customers.

The significant theoretical contribution of this research is to identify and analyse the

electronic service quality aspects and their influence on the customer satisfaction and service

continuance intention of customers towards electronic services provided by the public and

private sector banks in Indian banking industry by mounting the prior literature in electronic

service quality of banking. The practical contributions of this research would assist the public

and private sector banks to improve their electronic banking service quality, which will

increase the level of satisfaction and service continuance intention towards electronic banking

services. The quality attributes identified from this research can be used to improve the

electronic service quality of banking that leads to more customer satisfaction and retention.

This research is, therefore, important to provide the solutions with respect to electronic

service quality issues, increase customer satisfaction and service continuance intention of

customers of public and private sector banks in Puducherry region.

4. NEED FOR THE STUDY

A sound and effective banking system is the backbone of an economy of the country. The

banks in India provide traditional and modern services, which include electronic banking to

their customers. Customer is important for any services particularly banking services.

Measuring service quality electronic banking services. The research also helps banking

institutions to know whether the existing electronic services offered by them really satisfying

the needs of their customers or not. Through responses taken by 478 customers during a

period of one year and highlighting the key areas which require some attention on the part of

the banking industry in India with respect to electronic service quality. Particularly electronic

service quality in the service sector particularly in the Indian banking sector is more difficult

than measuring the quality of manufactured goods. The concept of service quality and

customer satisfaction is inter-related with each other in any service industry including banking.




Furthermore, satisfaction of customer depends upon service quality of bank and electronic

service quality is increasingly offered as a strategy by bankers to position themselves more

effectively in the service market place and attain customer satisfaction and retention.

Indian Banking industry has restructured and modernized by automation with the

advancement of information and communication technology since last few decades,

particularly after implementation of first phased plan (1985) of bank computerization in India

and various plans and programmes implemented by the RBI. Presently, the banks in India

along with branches are almost computerized and accustomed with Core Banking Solution

(CBS). Even, commercial banks working in rural areas also providing most of electronic

banking services like ATM, CDM, Electronic Funds transfer (NEFT, RTGS, etc.), Debit and

Credit cards, Net banking, Mobile banking, etc.

Measuring service quality of banks with respect to electronic services is an important

strategic tool for survival and long-term success of the banks because providing high quality

service increases customer satisfaction, retention and building loyalty. Investigation of

electronic service quality aspects and their relationship with customer satisfaction and

retention is being increasingly drawn attention by bankers as well as researchers. Puducherry

is one of the important union territories situated adjacent of Tamil Nadu state which has

different walks of people. It is also known as “Little France”. Even though, there are plenty of

researches conducted on the service quality of banks, none of them were conducted in

Puducherry. Hence, there is a great need to examine the impact of electronic service quality

on customer satisfaction and service continuance intention of customers with respect to public

and private sector banks in Puducherry region.

5. SCOPE OF THE STUDY

The Scope of research is an overall outline of what the study will cover. The central point of

the research is to analyze the level of awareness and usage pattern of electronic banking

services, customers‟ perception on various aspects of electronic banking service quality,

customer satisfaction and continuous service usage intention towards electronic banking

services of public and private sector banks in Puducherry region. The scope of the study has

been confined to „Electronic Service Quality‟ (e-service quality) and not the traditional

service quality of public and private sector banks. The scope of research is limited to the

customers‟ perception, satisfaction and continuous service usage intention towards selected

public and private sector banks (five banks from each category and five branches from each

bank) only. The research is also limited to the customers of public and private sector banks

which are situated in Puducherry region. The research has taken Physical Aspects, Efficiency,

Reliability, Security & Privacy, Responsiveness and Complaints handling as the dimensions

of electronic service quality for the analysis.

This research is also conducted to suggest some measures to improve the present

electronic services which will in turn contribute to the overall improvement in the

performance of the banking industry not only in Puducherry region but also in the other parts

of India.

6. OBJECTIVES OF THE STUDY

To examine the customer satisfaction and perception on the Electronic Banking

Services of Public Sector and Private Sector Banks in Puducherry Region.

To analyze the inter-relationships among the various dimensions of Electronic Service

Quality of Public and Private Sector Banks



To find out the impact on Customer Satisfaction on the Electronic Banking Services of

Public and Private Sector Banks

7. HYPOTHESES OF THE STUDY

H01: There is no significant difference among the demographic variables of the respondents

with respect to the Continuous Service Usage Intention towards the Public and Private Sector

Banks.

H02: There are no significant inter-relationships among the various dimensions of Electronic

Service Quality of Public and Private Sector Banks.

H03: Various dimensions of Electronic Service Quality have no significant impact on

Customer Satisfaction on the Electronic Banking Services of Public and Private Sector Banks.

8. RESEARCH METHODOLOGY

The purpose of the present research is to test the hypothesis and therefore the researcher

selects exploratory research design or hypothesis-testing research design. The aim of the

exploratory research is merely to explore the research questions and does not intend to offer

final and conclusive solutions to existing problems. This type of research is usually conducted

to study a problem that has not been clearly explored yet but helps the researcher to have a

better understanding of the problem. Exploratory research is one of the most suitable research

designs specifically used in service marketing research like banking, insurance, etc.

The exploratory research design is known as formulative research design. The main

objective of using such a research design is for formulating a research problem (impact of

service quality on customer satisfaction and continuous service usage intention towards

electronic banking services) for an in-depth or more precise investigation, or for developing a

working hypothesis from an operational aspect. Since the present research is based on the

hypothesis testing of causal relationships between independent variable (Service Quality

dimensions) and dependent variable (Customer Satisfaction and Continuance Service Usage

Intention), the researcher chooses the exploratory research design and apply the same.

In service marketing research (like the present study), analyzing the perception or

satisfaction of customers/consumers is very important and these are based on the qualitative in

nature. In order to analyze the qualitative aspects statistically and validate the hypothesis, it is

necessary to convert the qualitative aspects into quantitative by using Likert scale. The

present research is also conducted to analyse the customers‟ perception on the various

dimensions of electronic service quality and its impact on Customer Satisfaction and

Continuous Service Usage Intention towards Electronic Banking Services of Public and

Private Sector Banks statistically and test the hypothesis. Therefore, the researcher employs

the mixed research approach by merging of both the qualitative and quantitative approaches in

a productive way in the present research.

8.1. Sample Size

Sample size is the number of respondents included in a research. The Sample Size of the

present study is 478. The primary data is gathered from the Customers who are using

electronic banking services of public and private sector banks in Puducherry region and 478

samples are finalized.

8.2. Sampling Technique

The present research paper considers and applied Non-Probability Sampling Method since the

exact population of the research (Customers who are using electronic banking services of




public and private sector banks in Puducherry region) is unknown. Out of various Non-

Probability Sampling techniques, the researcher selects and employs purposive Sampling

technique in this research work.

8.3. Questionnaire Design and Development

Questionnaire is an important part of any primary data-based research. Therefore,

questionnaire design is the crucial part of survey research because validity and credibility of

the data being collected during this research depend on the design and structure of the

questionnaire. The present research is based on the primary data collection and therefore, a

well-structured questionnaire is prepared in order to address the research objectives and goal.

In this research, information regarding the Perception of Customers on the various

dimensions of Electronic Service Quality and their impact on Customer Satisfaction and how

these perception and satisfaction on electronic service quality leads to Continuous Service

Usage Intention of customers towards banking services of public and private sector banks in

Puducherry region are translated into simple questions in order to get their views on the said

concepts of the research. The questions must be long enough to elicit the information that was

required but short enough to encourage an optimum response rate. Based on the above, a

structured questionnaire was developed, covering as many as possible the items that might

point to achieving the objectives of the research.

After the preparation of the questionnaire, it has to be pre-tested to identify any

ambiguous questions or any respondent difficulties in understanding the questionnaire. A

combination of different effort, i.e., discussion with expert panel in service marketing and

banking sector, interview, a planned field survey, studying the existing review of literature

related to the topic and searching and gathering the information from the various websites on

the internet were carried out to obtain a robust input for the design and development of the

questionnaire.

9. RESULTS AND DISCUSSION

Table 1 Sample Collection – Sector & Bank-Wise

S. NO. NAME OF THE BANK NO. OF RESPONDENTS

Nos. (%)

PUBLIC SECT OR BANKS

1. State Bank of India 58 22.48

2. Punjab National Bank 52 20.16

3. Canara Bank 56 21.71

4. Bank of Baroda 48 18.60

5. Indian Bank 44 17.05

TOTAL 258 100.00

PRIVATE SECTOR BANKS

6. ICICI Bank 55 25.00

7. HDFC Bank 49 22.27

8. Axis Bank 44 20.00

9. City Union Bank 39 17.73

10. Karur Vysya Bank 33 15.00

TOTAL 220 100.00

GRAND TOTAL 478 100

Source: Compiled from Primary Data



It is observed from the table 1 shows that the total number of customers were used in e-

banking services in Puducherry region is 478 out of which the public sector banks is 258 and

where as the total number of customers were used in private sector banks is 220. It is

informed that out of 258 customers utilized e- banking services, only 58 State Bank of India

customers (22.48%) used in e- banking services. 55 respondents were used in e- banking

services of ICICI banks( 25%). Whereas15% KVB customers were used in e- banking

services in Puducherry region.

Table 2 Customers‟ Perception on Electronic Service Quality of Public and Private Sector Banks

VARIABLES N Mean SD

The website of the bank is well-organized/arranged and has user-friendly interface. 478 3.53 .957

The layout of the web-site of bank is visually appealing and attractive. 478 3.58 .969

The website of the bank provides sufficient and necessary information. 478 3.68 .909

Website of the bank is designed according to the need of the customer. 478 3.68 .955

Bank uses advanced technology in order to serve its customers better. 478 3.65 .979

PHYSICAL ASPECTS 478 18.12 4.086

Transfer of funds and other transactions are through electronic banking is faster than

traditional banking system. 478 3.75 .873

Electronic Banking provides greater flexibility and faster than traditional banking services. 478 3.78 .889

Electronic banking provides more punctuality, transparency and accountability. 478 3.78 .866

I can bank anytime anywhere, check my balance and access my bank statements. 478 3.87 .868

I can easily interact with my bank; express my opinions and grievances without visiting the

branch. 478 3.75 .934

EFFICIENCY 478 18.94 3.770

Electronic banking provides its services at the time it promises to do so. 478 3.68 .914

Electronic banking transactions are accurate and error-free. 478 3.88 .887

Electronic banking services are more dependable. 478 3.58 .918

The website of the bank is more trustworthy. 478 3.66 .903

Electronic banking ensures the ability to fulfill the requirement of the customers. 478 3.71 .898

RELIABILITY 478 18.51 3.932

Electronic Banking Services provides enhanced level of security and limited possibility of

loss. 478 3.11 1.055

Electronic Banking protects the customer‟s personal and financial information and not

shared with other websites. 478 3.12 1.059

Electronic Banking gives high priority for the privacy of the customers. 478 3.00 .924

Electronic Banking is just as secure as conventional banking. 478 3.07 .987

Electronic Banking provides the latest encryption technology to prevent unauthorized

intrusion. 478 3.37 1.143

SECURITY AND PRIVACY 478 15.67 3.371

Electronic banking gives prompt responses to the customers‟ requests by e-mail or other

ways. 478 3.57 .953

The responses of Electronic banking are accurate, appropriate and relevant. 478 3.67 .917

Electronic banking Keeps its customers informed about when services will be performed. 478 3.68 .944

Bank‟s website allows information to be readily accessible. 478 3.74 .903

Electronic banking is readily available to help the customers. 478 3.73 .970

RESPONSIVENESS 478 18.39 4.155

The Electronic Banking of this bank has the ability to guide customer to resolve problems. 478 3.17 .978

The website of the bank shows sincere interest in resolving any transaction related

problems. 478 3.14 .902

Electronic banking quickly resolves problems related to online transactions. 478 3.24 .878

Electronic banking provides effective complaints and grievances procedures. 478 3.33 .915

Customer care/Help Desk/Call Centers of Electronic banking takes the complaints quickly

and solves the problems fastly. 478 3.60 1.019

COMPLAINTS HANDLING 478 16.47 3.782

PERCEPTION ON ELECTRONIC SERVICE QUALITY 478 106.09 16.027

Source: Compiled from primary data




From the table 2, it is found that the Customers‟ Perception on the various dimensions of

Electronic Service Quality is higher in case of the variables – “Efficiency” (M = 18.94) and

“Reliability” (M = 18.51) when compared with others. It is found that the Customers‟

Perception on the various dimensions of Electronic Service Quality is lesser in case of the

variables – “Security and Privacy” (M = 15.67) and “Complaints Handling” (M = 16.47)

when compared with others. It is also inferred that the Customers‟ Perception on the various

dimensions of Electronic Service Quality is above the average level since majority of the

Mean value of the variables are above 3.00 (60%) out of 5.

H01: There is no significant difference between the Male and Female customers with respect

to the Perception on Electronic Service Quality of Public and Private Sector Banks.

Table 3 Gender – Perception on Electronic Service Quality of Banks

Source: Compiled from primary data ** Significance at 1%Level,* Significance at 5 %Level

It is seen from the table 3 shown that, In order to compare the significant difference

between the Male and Female Customers with respect to the Perception on Electronic Service

Quality of Public and Private Sector Banks; the Independent-samples t-test was used. Since

the P values are lesser than 1% and 5% level of significant value in 5 out of 6 aspects in case

of the Customers‟ Perception on Electronic Service Quality of Public and Private Sector

Banks, i.e. Physical Aspects (0.000), Efficiency (0.000), Reliability (0.000), Responsiveness

(0.000) and complaints Handling (0.025) and also in the Customers‟ Perception on the

Electronic Service Quality of Banks Score (0.000), the Null Hypotheses are rejected. The Null

Hypothesis is accepted in only one case, Security and Privacy, since the P (0.052) value is

greater than 5% level of significant value.Out of six aspects relating to the Customers‟

Perception on the Electronic Service Quality of Public and Private Sector Banks, Male

Customers have perceived more on the “Efficiency” (M = 19.66) than other aspects of the

Electronic Service Quality of Banks. Male Customers have perceived less on the “Security

and Privacy” (M = 15.88) than other aspects of Electronic Service Quality of Public and

Private Sector Banks.Similarly, out of six aspects relating to the Customers‟ Perception on the

Electronic Service Quality of Banks, Female customers have also perceived more on the

“Efficiency” (M = 17.52) than other aspects of the Electronic Service Quality of Banks.

Female Customers have perceived less on the “Security and Privacy” (M = 15.25) than other

aspects of the Electronic Service Quality of Public and Private Sector Banks.Based on the

mean score of the Customers‟ Perception on the Electronic Service Quality of Banks, it is

inferred that the mean score of Male Customers (M = 108.96) is more than the Female

Customers (M = 100.45). This indicates that Male Customers have perceived more on the

various aspects of Electronic Service Quality of Public and Private Sector Banks than Female

Customers. Therefore, it is concluded that there is a statistically significant difference

VARIABLES

GENDER

t - value

p –

value Male Female

N Mean SD N Mean SD

Physical Aspects 317 18.60 4.116 161 17.17 3.867 3.734 0.000**

Efficiency 317 19.66 3.483 161 17.52 3.916 5.866 0.000**

Reliability 317 19.15 3.777 161 17.25 3.939 5.045 0.000**

Security

and Privacy 317 15.88 3.414 161 15.25 3.256 1.952 0.052

Responsiveness 317 18.93 4.083 161 17.34 4.106 4.014 0.000**

Complaints Handling 317 16.75 3.588 161 15.93 4.096 2.153 0.025*

PERCEPTION ON

ELECTRONIC

SERVICE QUALITY

317 108.96 14.496 161 100.45 17.391 5.335 0.000**



between Male and Female Customers with respect to the Perception on Electronic Service

Quality of Public and Private Sector Banks.

H02: There is no significant difference between Customers of Public Sector and Private Sector

Banks with respect to the Perception on Electronic Service Quality of Banks.

Table 4 Type of Bank – Perception on Electronic Service Quality of Banks

VARIABLES

TYPE OF BANK

t -

value

p –

value Public Sector Bank Private Sector Bank

N Mean SD N Mean SD

Physical Aspects 285 16.73 3.795 193 20.16 3.628 9.931 0.000**

Efficiency 285 17.82 3.626 193 20.59 3.358 8.549 0.000**

Reliability 285 17.22 3.663 193 20.40 3.539 9.487 0.000**

Security and Privacy 285 15.54 3.363 193 15.85 3.383 0.989 0.323

Responsiveness 285 17.10 4.008 193 20.30 3.605 9.106 0.000**

Complaints

Handling 285 16.21 4.032 193 16.86 3.353 1.903 0.058

PERCEPTION

ON

ELECTRONIC

SERVICE

QUALITY

285 100.64 15.768 193 114.16 12.681 10.353 0.000**

Source: Compiled from primary data ** Significance at 1%, Significance at 5 %

From Table 4 shows that to compare the significant difference between Customers of

Public Sector and Private Sector Banks with respect to the Perception on Electronic Service

Quality of Banks, the Independent-samples t-test was applied in the P values are lesser than

1% level of significant value in 4 out of 6 aspects in the Customers‟ Perception on Electronic

Service Quality of Banks, i.e. Physical Aspects (0.000), Efficiency (0.000), Reliability

(0.000), Responsiveness (0.000) and also in the Customers‟ Perception on the Electronic

Service Quality of Banks Score (0.000), the Null Hypotheses are rejected. The Null

Hypotheses are accepted in remaining 2 cases, i.e. Security and Privacy (0.323) and

Complaints Handling (0.058), as the P values are greater than 5% level of significant value.

Out of six aspects relating to the Customers‟ Perception on the Electronic Service Quality

of Banks, Customers of Public Sector Banks have perceived more on the “Efficiency” (M =

17.82) than other aspects of the Electronic Service Quality of Banks. Customers of Public

Sector Banks have perceived less on the “Security and Privacy” (M = 15.54) than other

aspects of Electronic Service Quality of Banks.Similarly, out of six aspects relating to the

Customers‟ Perception on the Electronic Service Quality of Banks, Customers of Private

Sector Banks have perceived more on the “Efficiency” (M = 20.59) than other aspects of the

Electronic Service Quality of Banks. Customers of Private Sector Banks have perceived less

on the “Security and Privacy” (M = 15.85) than other aspects of Electronic Service Quality of

Banks.Based on the mean score of the Customers‟ Perception on the Electronic Service

Quality of Banks, it is inferred that the mean score of Customers of Private Sector Banks (M

= 114.16) is more than the Customers of Public Sector Banks (M = 100.64). This indicates

that Customers of Private Sector Banks have perceived more on the various aspects of

Electronic Service Quality of Banks than Customers of Public Sector Banks. Therefore, it is

concluded that there is a statistically significant difference between Customers of Public

Sector and Customers of Private Sector Banks with respect to the Perception on Electronic

Service Quality of Banks.




H03 :There is no significant difference among the Educational Qualification of the Customers

with respect to the Perception on the Electronic Banking Services of Public and Private

Sector Banks.

From table 5 shows that to explore the significant difference among the Educational

Qualification of the Customers with respect to the Perception on the Electronic Banking

Services of Public and Private Sector Banks, the One-way between-groups analysis of

variance (ANOVA) was employed.

Table 5 Educational Qualification - Perception on Electronic Service Quality Of Banks

VARIABLE

EDUCATIONAL QUALIFICATION

F –

value

p –

value

School Level /

Diploma

(155)

UG / PG

(286)

Professional

(37)

Physical Aspects 18.08 18.15 18.03

0.024 0.977 3.960 4.049 4.936

Efficiency 18.59 19.00 19.95

2.038 0.131 3.727 3.750 3.993

Reliability 18.28 18.63 18.51

0.402 0.669 3.612 4.025 4.519

Security and Privacy 15.63 15.69 15.65

0.017 0.983 3.127 3.473 3.646

Responsiveness 18.35 18.41 18.41

0.12 0.988 3.713 4.270 5.041

Complaints Handling 16.46 16.43 16.86

0.217 0.805 3.797 3.767 3.917

PERCEPTION ON

ELECTRONIC SERVICE

QUALITY

105.39 106.31 107.41

0.299 0.742 15.332 15.934 19.581

Source: Compiled from primary data Significance at 5% Level

No. of Bank Customers are shown in brackets

Since the P values are greater than 5% level of significant value in case of Physical

Aspects (0.977), Efficiency (0.131), Reliability (0.669), Security and Privacy (0.983),

Responsiveness (0.988) and complaints Handling (0.805) and also in the Customers‟

Perception on the Electronic Service Quality of Public and Private Sector Banks Score

(0.742), the Null Hypotheses are accepted. Apart from not reaching statistical significance,

the actual difference in the mean score among the Perception on Electronic Service Quality

groups is also small (M = 105.39 to 107.41). The Mean score of the Perception on the various

aspects of the Electronic Service Quality in case of Educational Qualification is more or less

same. Hence, it is inferred that the Customers who belong to all educational qualification have

same level of perception on the various aspects of the Electronic Service Quality of Public

and Private Sector Banks than others. Hence, there is no significant difference among the

Educational Qualification of the Customers with respect to the Perception on the Electronic

Banking Services of Public and Private Sector Banks.

H04 : There is no significant difference among the Period of Usage of Electronic Banking

Services of the Bank with respect to the Perception on Electronic Service Quality in both

Public and Private Sector Banks.

From table 6 it shows that to explore the significant difference among the Period of Usage

of Electronic Banking Services of the Bank with respect to the Perception on Electronic

Service Quality in both Public and Private Sector Banks, the One-way between-groups

analysis of variance (ANOVA) was employed.



Table 6 Period of Usage of Electronic Banking Services of the Bank - Perception on Electronic

Service Quality of Banks

VARIABLE

PERIOD OF USAGE OF ELECTRONIC

BANKING SERVICES OF THE BANK

F - value

p –

value Upto one

Year

(73)

1 – 3

Years

(130)

3 – 6

Years

(125)

Above 6

Years

(150)

Physical Aspects 17.38 18.65 18.16 17.97

1.583 0.193 4.815 4.080 3.794 3.915

Efficiency 18.36 19.80 18.66 18.71

3.315 0.020* 4.382 3.732 3.641 3.490

Reliability 17.44 19.22 18.44 18.47

3.268 0.021* 4.781 3.977 3.809 3.417

Security

and Privacy

14.74 15.42 15.78 16.25 3.671 0.012*

3.582 3.537 3.227 3.141

Responsiveness 16.86 19.12 18.53 18.39

4.792 0.003** 5.319 3.698 3.807 4.010

Complaints Handling 15.55 16.82 16.49 16.62

1.898 0.129 4.384 3.574 3.730 3.650

PERCEPTION ON

ELECTRONIC

SERVICE QUALITY

100.33 109.02 106.06 106.40

4.715 0.003** 19.623 14.683 15.553 14.981

Source: Compiled from primary data * Significance at 5%Level ** Significance at 1%Level

Note: No. of respondents are shown in brackets

Since the P values are lesser than 1% and 5% level of significant value in 4 out of 6

aspects in the Customers‟ Perception on Electronic Service Quality, i.e. Efficiency (0.020),

Reliability (0.021), Security and Privacy (0.012) and Responsiveness (0.003) and also in the

Customers‟ Perception on Electronic Service Quality of Banks Score (0.003), the Null

Hypotheses are rejected. The Null Hypotheses are accepted in remaining 2 cases, Physical

Aspects (0.193) and Complaints Handling (0.129) as the P values are greater than 5% level of

significant value.

In addition to achieving statistical significance, the real variation in the mean score among

the Usage of Electronic Banking Services of the Banks groups is also large (M = 100.33 to

109.02). The Mean score of the Customers‟ Perception on the various aspects of Electronic

Service Quality, in case of the Period of Usage of Electronic Service Quality for “1 to 3

Years” Group (M = 109.02) is more than other groups. Therefore, it is inferred that the

Customers who are using Electronic Banking Services for 1 to 3 years, have more perception

on the various aspects of Electronic Banking Services than other groups. Therefore, there is a

significant difference among the Period of Usage of Electronic Banking Services of the Bank

with respect to the Perception on Electronic Service Quality in both Public and Private Sector

Banks.

H05 : There are no significant inter-relationships among the various aspects of Electronic

Banking Services of public and private sector banks.

From table 7 shows that a Pearson product-moment correlation was run to determine the

inter-relationships among the various aspects of Electronic Banking Services of public and

private sector banks.




Table 7 Inter-Relationships Among The Various Aspects Of Electronic Banking Services

VARIABLES N ‘r’

VALUE

P –

VALUE RELATIONSHIP

REMARKS

SIGNIFICANT RESULT

Physical Aspects – Efficiency 478 0.605** 0.000 Positive Significant REJECTED

Physical Aspects – Reliability

478 0.678** 0.000 Positive Significant REJECTED

Physical Aspects – Security and

Privacy

478

0.107* 0.019 Positive Significant REJECTED

Physical Aspects –

Responsiveness


Physical Aspects – Complaints

Handling

478 0.116* 0.011 Positive Significant REJECTED

Efficiency – Reliability


Efficiency – Security and

Privacy

478 0.022 0.632 Positive Insignificant ACCEPTED

Efficiency – Responsiveness


Efficiency – Complaints

Handling

478

0.243** 0.000 Positive Significant REJECTED

Reliability – Security and

Privacy


Reliability – Responsiveness


Reliability – Complaints

Handling

478


Security and Privacy –

Responsiveness


Security

and Privacy – Complaints

Handling


Responsiveness – Complaints

Handling

478


Source: Compiled from primary data **. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

As the P values are lesser than Sig. Value (0.01) in 11 out of 15 cases, the Null

Hypotheses are rejected. The Null Hypotheses are accepted in 4 cases, since the P values are

greater than Sig. Value (0.05) there are high positive correlations among the Perceptions on

the various aspects of Electronic Service Quality with respect to the Banking Services in

Public and Private Sector Banks. The relationships between them are also highly significant in

these cases.

Out of six aspects of Electronic Service Quality with respect to Banking Services,

Reliability has more relationship (r = 0.785) with Responsiveness than other aspects. Physical

Aspects has also more relationship (r = 0.780) with Responsiveness than other aspects. Out of

Out of six aspects of Electronic Service Quality with respect to Banking Services, Physical

Aspects has less relationship with Security and Privacy (r = 0.107) and Physical Aspects has

less relationship with Complaints Handling (r = 116) when compared with other aspects. The

above correlation analysis indicates that there are significant inter-relationships among the

various aspects of Electronic Banking Services of public and private sector banks.



10. FINDINGS OF THE STUDY

It is found that there is a significant difference among the demographic variables of

the customers with respect to the Perception on the various dimensions of Electronic

Service Quality of Public and Private Sector Banks. It is found that Male Customers

have perceived more on the various aspects of Electronic Service Quality of Public

and Private Sector Banks than Female Customers. The Customers of Private Sector

Banks have perceived more on the various aspects of Electronic Service Quality than

the customers of Public Sector Banks.

Family Income of the customers (Rs.50,001 - Rs.75,000), Occupation of the customers

(Business/Profession) and Period of Usage of Electronic Banking Services of the Bank

(1 – 3 Years) have significant influence on the various aspects of Electronic Service

Quality of Public and Private Sector Banks. The customers belong to these

demographic variables have more perception on the various aspects of Electronic

Service Quality of Public and Private Sector Banks than others.

However, marital statuses, educational qualification of the customers, Period of

Customer of the bank and Age of the customer have no significant influence on the

Perception on the various aspects of Electronic Service Quality of Public and Private

Sector Banks.

It is also found that there are high positive and significant correlations among the

Perceptions on the various aspects of Electronic Service Quality with respect to the

Banking Services in Public and Private Sector Banks. Out of six aspects of Electronic

Service Quality with respect to Banking Services, Reliability (r = 0.785) and Physical

Aspects (r = 0.780) have more relationship with Responsiveness than other aspects.

Physical Aspects has less relationship with Security and Privacy (r = 0.107) and

Complaints Handling (r = 116) when compared with other aspects.

11. MANAGERIAL IMPLICATIONS OF THE STUDY

The research findings of the study have several practical implications. This study showed that

Bankers should continue to monitor how their customers perceive and evaluate their service

quality with different factors and dimensions. The results of this research will permit the

management of public and private sector banks to better understand their customers and will

help the management to adopt and implement effective service marketing strategies for the

same.

The banking service market has a great potential for youth segment as the more than 50%

of the population of India is youth and working population. These youth population is living

in the age of electronic technology. The research also indicates that the demographic variables

have strong influence on the customers‟ perception, satisfaction and continuous service usage

intention towards electronic banking services. Therefore, if the banks consider the

demographic features of these population carefully then it can be easily identified the factors

that attracting and retaining them as customers for the electronic banking services.

The research indicates that the consistent and efficient electronic service quality of the

Public and Private Sector Banks is the best influencing factor for the customers‟ satisfaction

and continuous service usage intention towards electronic banking services. By focusing on

various factors identified in this research, the management of public and private sector banks

can understand their position and identify their strengths and weaknesses and formulate

appropriate policies to improve their service performance in a better way. It will help to

convert their potential customers into active customers.




12. LIMITATIONS OF THE STUDY

The outcome of this research has given valuable feedbacks to researchers. However, these

outcomes were accompanied with some limitations. The biggest limitation of the research was

to get the responses and information from the respondents (customers who using electronic

banking services of public and private sector banks). Respondents were not wholehearted to

take part and convincing them to share the information was not an easy task due to their hectic

work schedule.

Because of the limited availability of time and financial resources, the survey of the

research is of limited scale and scope, such that the survey results may not be fully

representative of the views of the customers of banks (478 samples) studied. The results of the

present study are limited to the responses of customers of five public sector banks and five

private sector banks in Puducherry region. The present research has depended largely on

quantitative methodology of data collection (conversion of qualitative methodology into

quantitative methodology by using Likert scale) and is therefore restrictive. The

methodological assumption is that all respondents will have the same assumption and opinion

to the variables used in the study may not be true in practice. Therefore, the effects of these

variables may not be common to all respondents (customers of electronic banking services)

that may influence the manner in which they provide the responses to the questions.

It is also essential to note that customers‟ perceptions, satisfaction and service usage

intention towards electronic banking services may vary from time to time. This research has

gathered the data during the year 2019. Therefore, similar research on some other period of

time, in same geographical area may give some different result. Lastly, these limitations may

decrease the ability of generalizing the results of this research to other industries‟ settings.

Therefore, the conceptual and methodology limitations of this research need to be considered

when designing future research and these limitations are acknowledged and provide possible

avenues for further research.

13. SCOPE FOR FUTURE RESEARCH

The present efforts are directed to analyze the customers‟ service usage behaviour towards

electronic banking services of public and private sector banks. This is an analytical research

which would be a useful contribution. However, for arriving at any generalization, it is highly

desirable to undertake more such analytical studies. The scope of research was restricted to

the customers‟ usage behaviour with respect to the selected public and private sector banks in

Puducherry region only. Similar research can be also carried out in the other parts of India for

comparison purposes. Also a comparative study can be conducted on service quality of Indian

and Foreign Banks in the same region or other parts of India.

14. CONCLUSION

It is found from the present research paper that five out of six aspects of Electronic Service

Quality of Banks have influence on Customers‟ Satisfaction on E-Banking Services. Out of

six aspects of Electronic Service Quality of Banks, “Efficiency” has significant and stronger

influence on Customers‟ Satisfaction on E-Banking Services and “Complaints Handling” has

significant but lesser influence on Customers‟ Satisfaction on E-Banking Services than others.

Out of six aspects of Electronic Service Quality of Banks, “Security & Privacy” aspect does

not contribute to Customers‟ Satisfaction on E-Banking Services significantly. Out of two

aspects of Electronic Service Quality of Banks, “Responsiveness” contributes more to the

Continuous Service Usage Intention directly than Efficiency. The Customers‟ Satisfaction on

E-Banking Services contributes strongly to the Continuous Service Usage Intention directly.

There are strong inter-relationships among the various aspects of Electronic Service Quality



of Banks. Out of six aspects of Electronic Service Quality of Banks, Reliability aspect has

more relationship with Responsiveness aspect and Efficiency aspect has lesser relationship

with Security and Privacy aspect than others. The result designate that e-banking service is the

only solution for Indian banks to admittance global market. This resulted in high customer

satisfaction and make use of services.

ACKNOWLEDGEMENT The Author K. Madavan, Ph.D Scholar, Department of Corporate Secretaryship, School of

Management, Alagappa University, Karaikudi, TN, India. and the Co-Author

Dr. C. Vethirajan, Professor and Head, Department of Corporate Secretaryship, School of

Management, Alagappa University, Karaikudi, TamilNadu, India has greatly acknowledged

under RUSA Phase 2.0 Scheme has acknowledged the same.

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