IMPACT OF INTERNET BANKING ON

CUSTOMER SATISFACTION AND BUSINESS

PERFORMANCE

THESIS
SUBMITTED TO THE UNIVERSITY OF JAMMU
FOR THE AWARD OF THE DEGREE OF
DOCTOR OF PHILOSOPHY
IN
COMMERCE

UNDER THE SUPERVISION OF

Professor R. D. Sharma

BY

Shiffu Abrol

POST GRADUATE DEPARTMENT OF COMMERCE

UNIVERSITY OF JAMMU, JAMMU-180006
2014
 Certificate

Certified that Ms. Shiffu Abrol, a registered candidate for the degree of Ph. D. in
Commerce, has completed her research work. The exact title of her thesis is Impact of
Internet Banking on Customer Satisfaction and Business Performance. She has
worked under my supervision and the work is worthy of consideration for the award of
degree of Doctor of Philosophy.

It is further certified that:

The title of her thesis has been approved by the Board of Research Studies
(BORS) in Commerce ;

The thesis embodies the work of the candidate herself;

The candidate has worked under my supervision for the period required under
statutes;

The candidate has got one paper, relevant with research, published in national
journal;

The candidate has put in the required attendance and delivered seminars in the
department during the period of research; and

The conduct of the scholar remained quite satisfactory during the research
period.

Professor Hardeep Chahal Professor R. D. Sharma

H.O.D. Supervisor
Department of Commerce Department of Commerce
University of Jammu, University of Jammu,
Jammu. Jammu.
 Preface
Customers are the key contributors for the success and survival of any business and this
is the same for banking sector also. So, need arises not only to satisfy the customers but
also to retain them because it may lead to increased profitability and better performance
of banks.

Technology is affecting the life of every individual in the present age and internet
banking is one of the technologies which is fastest growing in banking practice now a
days. Moreover, customers are shifting from traditional banking to online banking very
rapidly because of various benefits such as cost and time effectiveness. Hence, it is
required to study carefully the increasing significance of internet banking, with its
impact on customer satisfaction and business performance. The study has been
completed under six chapters.

The first chapter deals with the conceptual analysis and historical overview of internet
banking and various factors that affect their customer satisfaction.

In the second chapter, literature has been reviewed both theoretically as well as in
tabular form. Thorough review of literature generated the research gap to be studied.

The third chapter presents details about the research design and methodology followed
in the study. It includes formulation of hypotheses on the basis of core studies,
generation of scale items, data collection technique, data purification, reliability, validity
and limitations of the study.

Fourth chapter presents the analysis of the data gathered from bank managers,
hypotheses testing and major findings. This chapter also present the evaluative analysis
of business performance.

Fifth chapter presents the analysis of the data gathered from online banking customers,
its hypothesis testing and major findings.

The last chapter comprises of major findings, perceptual gap between private and public
sector bank managers, private and public sector bank customers and further perceptual
gap between customers and managers and managerial implications.

The study is expected to be useful to all the concerned including researchers and policy
makers.

Shiffu Abrol
 Acknowledgement

I acknowledge my deep sense of gratitude and sincere regards to my advisor Prof. R. D.

Sharma for his guidance, caring, patience, help and providing me with an excellent
atmosphere due to which I have been able to complete my research work. The guidance
and support, which I received from my guide shall always be a source of inspiration in
my future ambitions. I appreciate all his contributions of vast knowledge, active interest,
constant encouragement and inspiration to make my Ph. D. experience productive and
stimulating.

I am grateful to my respondents for sparing time out of their busy schedule.

My sincere gratitude to all the faculty members of Department of Commerce, University

of Jammu, Jammu for their valuable assistance and advice at every stage of my work.

I am also thankful to our Lab Assistant Miss Pooja, Librarian Mrs. Jyoti Devi, non
teaching employees of the department. My acknowledgement would be incomplete if I
do not thank to all my friends who assisted me in many respects in the completion of my
work.

I am really short of words to express my very sincere thanks to my loving parents whose
blessings are always with me and especially my loving mother in law Mrs. Promila
Sahdev, who has been so caring and supportive to me all the time. I am also grateful to
my brother in law Navneet Sahdev for supporting me during my research work.

The highest moral and physical support for research comes from my beloved Soul Mate
Puneet, who always encouraged me for my studies. I also want to thank my sweet
daughter Lareina, for her never unending support and love.

I am dedicating my thesis work to my Soul Mate Puneet and my daughter Lareina.

Finally, I am grateful to almighty God, who has always blessed me with heaven choicest
blessings and his prime power that the research got successfully accomplished.

I also take pledge to work for the good of mankind and help others.

Place: Jammu (Shiffu Abrol)

Date:
 List of Tables

Table No. Title Page No.

2.1 Summary of Literature Reviewed in Tabular Form 28
3.1 Generation of Scale Items in the Schedule I for Data from 74
Bank Managers
3.2 Generation of Scale Items in the Schedule II for Data from 74
Customers
4.1 Demographic Profile of Bank Managers 130
4.2 Process of Data Reduction 130
4.3 Factorial Profile of Data Gathered From Bank Managers 131
4.4 Demographic Profile wise ANOVA Results 133
4.5 Demographic Group Wise Mean Values 133
4.6 Bank wise ANOVA Results 134
4.7 Bank wise cum Factor wise Mean Values 134
4.8 Summary of Regression Analysis Showing Impact of 135
Different Dimensions and Factors on Customer Satisfaction,
Customer Commitment and Business Performance
4.9 Results of Various CFA fit Indices 135
4.10 Reliability and Validity of Latent Constructs 136
4.11 Split half Reliability 136
4.12 Discriminant Validity of Latent Constructs 136
4.13 Various Stages of Structural Modelling 137
4.14 Results of Hypothesis Testing Through SEM 137
4.15 Profitability Measures of Jammu and Kashmir Bank (JKB) 137
4.16 Profitability Measures of Housing Development Finance 138
Corporation (HDFC Bank)
4.17 Profitability Measures of Industrial Credit and Investment 138
Corporation of India (ICICI Bank)
4.18 Profitability Measures of State Bank of India (SBI) 139
4.19 Profitability Measures of Punjab National Bank (PNB) 139
4.20 Profitability Measures of Union Bank of India (UBI) 140
4.21 Profitability Measures of Canara Bank 140
4.22 Bank wise Objective and Subjective Comparison of Business 141
Performance
5.1 Demographic Profile of Bank Customers 171
5.2 Process of Data Reduction 171
5.3 Factorial Profile of Data Gathered From Bank Customers 172
5.4 Demographic Profile wise ANOVA Results 176
5.5 Age and Qualification wise Analysis of Internet Banking 177
Customers
5.6 Occupation, Income and Length of Association wise Analysis 178
of Internet Banking Customers
5.7 Results of Various CFA fit Indices 179
5.8 Reliability and Validity of Latent Constructs 179
5.9 Discriminant Validity of Latent Constructs 179
5.10 Various Stages of Structural Modelling 180
5.11 Results of Hypothesis Testing 180
6.1 Perceptual Gap Between Private and Public Sector Bank 196
Managers
6.2 Perceptual Gap Between Private and Public Sector Bank 197
Customers
6.3 Perceptual Gap Between Online Customers and Bank 198
Managers
 List of Figures

Fig. No. Title Page No.

4.1 Measurement Model of Perceived Usefulness 107

4.2 Measurement Model of Trust 108

4.3 Measurement Model of Customer Satisfaction 109

4.4 Measurement Model of Commitment 110

4.5 Measurement Model of Profitability 110

4.6 Structural Equation Model of Online Banking From Managers 114

Perspective
5.1 Measurement Model of Service Quality 162

5.2 Measurement Model of Trust 163

5.3 Measurement Model of Perceived Usefulness 164

5.4 Measurement Model of Customer Satisfaction 165

5.5 Structural Equation Model of Customer Satisfaction in online 169

Banking
 List of Abbreviations

AGFI Adjusted Goodness of Fit Index

ATM Automated Teller Machine

CB Canara Bank

CFA Confirmatory Factor Analysis

CFI Comparative Fit Index

CR Critical Ratios

CV Communality Values

EFA Exploratory Factor Analysis

FL Factor Loadings

GFI Goodness of Fit Index

HDFC Housing Development Finance Corporation

ICICI Industrial Credit Investment Corporation of India

ICT Information and Communication Technology

IME Internet Mediated Environment

IT Information Technology

JKB Jammu and Kashmir Bank

KMO Kaiser Meller Olkin

MI Modification Indices

MVA Market Value Added

NEFT National Electronic Fund Transfer

NFI Normed Fit Index

PEOU Perceived Ease of Use

PNB Punjab National Bank

PU Perceived Usefulness

RBI Reserve Bank of India

RMR Root Mean Square Residual

RMSEA Root Mean Square Error of Approximation

ROA Return on Asset

ROE Return on Equity

RTGS Real Transfer Gross Settlement

SBI State Bank of India

SQ Service Quality

SRW Standardised Regression Weight

TAM Technology Acceptance Model

UBI Union Bank of India

 Index

Contents Page No.

Certificate i

Preface ii

Acknowledgement iii

List of Tables iv-v

List of Figures vi

List of Abbreviations vii-viii

1) Impact of Internet Banking on Customer Satisfaction

and Business Performance- A Conceptual Analysis 1-21

2) Review of Literature 22-69

3) Research Design and Methodology 70-90

4) Impact of Internet Banking on Business Performance 91-145

5) Impact of Internet Banking on Customer Satisfaction 146-184

6) Strategy for Online Customer Satisfaction and Business

Performance 185-200
Bibliography 201-221
Annexures 222-233
 Chapter 1
Impact of Internet Banking on
Customer Satisfaction and
Business Performance: A
Conceptual Analysis
 Chapter 1

Impact of Internet Banking on Customer Satisfaction and Business

Performance: A Conceptual Analysis

Contents Page No.

1.1 Background 1

1.2 Internet Banking 1

1.3 Trust 2

1.4 Service Quality 3

1.5 Perceived Ease of Use 5

1.6 Perceived Usefulness 6

1.7 Customer Satisfaction 8

1.8 Commitment 10

1.9 Business Performance 12

1.10 Conclusion 14

References 15
 CHAPTER-1
IMPACT OF INTERNET BANKING ON CUSTOMER
SATISFACTION AND BUSINESS PERFORMANCE: A
CONCEPTUAL ANALYSIS

1.1 Background
Before initiating on Impact of internet banking on customer satisfaction and business
performance an attempt has been made to summarise and synthesise the three most
relevant concepts of the study viz. internet banking, customer satisfaction and business
performance. This chapter summarises the important dimensions that directly or
indirectly measure the impact of internet banking on customer satisfaction and business
performance. These dimensions are- trust, service quality, perceived ease of use,
perceived usefulness and commitment.

1.2 Internet Banking

Technology is affecting the life of every individual both qualitatively and quantitatively
in the present age. The quick expansion of information technology has imbibed into the
lives of millions of people and introduced major changes in the worldwide economic
and business atmosphere. Technological developments in the banking sector have
speeded up communication and transactions for clients (Booz et al., 1997). Internet
banking is one of the technologies which is fastest growing banking practice now a
days. It is defined as the provision of information or service by a bank to its customers
over the internet. It is viewed as a supplemental channel used in conjunction with other
channels to provide the convenience of banking anytime from ones home or work,
without having to incur some of the costs associated with a branch visit like going to
the branch or waiting on lines. Online banking eliminates physical and geographic
boundaries and time limitations of banking services (Yang et al., 2007). Also as
compared with traditional banking labour is replaced by machine very significantly
(computer networks) which is low in cost and is available easily 24/7 (Wu et al., 2006).
E-banking services first emerged in the early 1990s, when credit card, ATM, and
telephone banking services were three major applications. During the last decade,
database, information system and other technologies were applied into banking services
at different levels. After the availability of internet facility, e-banking services are now
conducted through a secure website operated by local banks and includes online

1
enquiry, e-payments, e-transfer etc. There are two general business models to provide
online banking facilities to its customers- First one is, incumbent bank also known as
bricks and clicks model, applying online banking as an enhancement to its traditional
banking sector and integrating branches, ATM, call centres and online service into a
whole system and using e-banking as a new channel of delivering services. Whereas the
another one is known as direct bank or virtual bank or internet primary bank with no
branch offices but using internet, telecommunication network and wireless networking
to provide banking services (Xu and Zhao, 2000). Thus, providing online facility by
banks is increasingly becoming a need to have than a nice to have service (Ganesan
R. and Vivekanandan K., 2009). In India ICICI bank was the first to initiate online
banking revolution as early as 1998 under the brand name Infinity. But in the current
scenario, every bank in India has the internet banking facility. Moreover, these banks
are extending their presence in rural areas also to lure more customers by educating
them with new advancement in information technology.

1.3 Trust
Service is an act or performance that one party offers to another which is essentially
intangible and does not result in the ownership of anything. Because of the service
feature of intangibility, consumers are often faced with the problem of not knowing
what to expect of a service until they consume it and hence perceive service as risky
(Coulter and Coulter, 2002). Thus, need for trust arises as it is the management of risk,
uncertainty and vulnerability and includes reliability, honesty, predictability, mutuality,
expectation where a partner is equally committed (Tayler and Stanley, 2007). Internet is
a competitive and technologically developed market presenting enormous challenges to
the banks for maintaining relations with their clients. Trust and security received
special attention in the marketing literature due to the notable influence that it has on
the attainment of long-lasting and profitable relationships (Morgan and Hunt, 1994). It
is also very important aspect in the provision of electronic services for e-commerce
environments, especially those involving directly the users activities like e-bank
(Furnell and Karweni, 1999). Thus, customers perceive trust as a great challenge to
internet banking and other electronic commerce forms that include sensible
information. Trust is a very complex and multidimensional phenomenon. Traditionally
it is defined as a group of beliefs held by a person derived from his perceptions about
certain attributes. Trust is habitually related to security and risk avoidance (Stewart et
2
al., 2001). It is the trait of trusting and believing in the honesty and reliability of others.
Similarly in online context, security issue is crucial as it involves directly the users
activities who have few tangible and verifiable clues regarding the service providers
capabilities and intentions (Urban et al., 2001). Hence, trust in online transactions is
defined as the subjective probability with which customers believe that an online
transaction with a web retailer will occur in a manner consistent with their expectations
(Stewart et al., 2001). There are many factors which will affect customer trust in online
banking. The antecedents of trust in online banking are trusting beliefs, familiarity,
disposition of trust, institutional based trust (structural assurance and situational
normality), reputation and perceived site quality. The trusting beliefs (trust in online
banking), include benevolence, competence and integrity (Mc Knight and Chervany,
2002), which will directly relate to the trusting intentions (the intention to continue
using online banking services).

1.4 Service Quality

The digital revolution has undoubtedly changed almost every aspect of daily life as we
stepped into the twenty first century. The power of the World Wide Web and global e-
commerce is becoming more significant with the increasing number of people around
the world getting connected to the internet (Siu and Mou, 2005). There are several
competitive advantages associated with the adoption of technology in service
organisations which include the creation of entry barriers, enhancement of productivity
and increase of revenue generation from new services (Fitzsimmons and Fitzsimmons,
1997). However, developments in information and communication technology have
provided a platform by which banks can design, develop and deliver services that can
be perceived by customers as superior while accessing online channel for banking
transactions (Surjadjaja et al., 2003). Service quality is one of the main factors that
determines the success or failure of electronic commerce (Santos, 2003). It is very
important component in any banking business. Service quality is the difference between
customer expectations for the service encounter and the perceptions of the services
received (Oliver, 1980). Service quality can also be defined as the consumers overall
impression of the relative inferiority/superiority of the organisation and its services
(Bitner et al., 1990). Accordingly service quality is defined as how well a delivered
service level matches customer expectations. Customers perceive the quality of services
of online banking based on the performance of online delivery systems and not on the
3
processes in which the delivered service is developed and produced. Numerous studies
were carried out to conceptualise the service quality concept. It can also be defined by
the practitioners in terms of key dimensions that customers use while evaluating the
services (Lewis and Booms, 1983). The conceptualisation of service quality should
include both the service delivery process (Parasuraman et al., 1995) as well as the
service outcomes (Lehtinen and Lehtinen, 1991). In the early 1980s Nodic model was
proposed by Gronroos (1984) which defined the dimensions of service quality and
these include technical quality (what consumers get), functional quality (how consumer
gets the services) and corporate image (how consumer perceives the firm and its
services). Similarly, Lehtinen and Lehtinen (1991) offered another model with three
dimensions of service quality viz. physical, interactive and corporate dimensions.
Physical quality is about the quality of physical products involved in service delivery
and consumption interactive dimension refers to the interaction between the customers
and the service organizations employees. Corporate quality refers to the corporate
image as perceived by the customers. E-SERVQUAL measures website e-SQ as
perceived by customers. It is a method for measuring website e-SQ that is based on the
same principle as the original SERVQUAL method and includes some dimensions
similar to those of SERVQUAL. The E-SERVQUAL scale contains a core and
recovery scale, represented by four and three dimensions respectively. Core scale is
used to measure the customers perceptions of service quality delivered by online
retailers. Recovery scale refers to specific situations, when a customer has a question or
runs into a problem (Zeithaml et al., 2002). In simpler terms, core scale refers to the
quality of the website itself, while the recovery scale is more concerned with the actual
performance of the company, rather than with website performance. Zeithaml (2002)
identifies the need for businesses to focus on e-services in their e-business, and to
understand the importance of e-service quality as a differentiating strategy. Businesses
also need to recognize that the web experience presents the brand positioning to online
consumers, and may be an important element in the establishment of trust and
relationships with customers (Zeithaml et al., 2002). The measurement tool developed
by Parasuraman, Zeithaml and Berry in 1985 to measure service quality includes ten
dimensions viz, tangibility, reliability, responsiveness, communication, access,
competence, courtesy, credibility, security and understanding which were later in 1988
reduced to five dimensions viz, tangibles, reliability, responsiveness, assurance and
empathy to measure service quality. However Zeithaml et al., 2000 provided a
4
comprehensive concept of online service quality based on pre and post service aspects.
According to them e-service is the extent to which a website facilitates efficient and
effective shopping, purchasing and delivery of products and services to users and
consumers and includes dimensions such as access, ease of navigation, security/
privacy, responsiveness, trust/assurance, site aesthetics and price knowledge, which are
significant indicators of online service quality. Further Lociacano et al., (2000)
established a scale called WEBQUAL with twelve dimensions viz. information fit to
need, interaction, trust, response time, design, intuitiveness, visual appeal,
innovativeness, flow, integrated communication, business process and substitutability.
Later Yang, Peterson and Huang in 2001 expressed online service quality to be the
function of six elements namely ease of use, content, accuracy of content, timeliness of
response, aesthetics and privacy. Wolfinbouger and Gilly (2002) have established four
dimensions namely website design, reliability, privacy/security and customer service
and found that reliability and fulfilment are the strongest predictors of customer
satisfaction and commitment. Thus, continuous improvements in the information
technology have enabled banks to provide their services in a more direct manner to
adjust their products better to the clienteles needs. Although banking has always been
an information business, until now information technology was mainly used to
automate administrative processes. The shift from automating to informating-using
information and its flow to inform managers provides opportunities to track a
customers behavior and respond at the right time. By making effective use of these
opportunities, banks are able to transfer a great deal of transactions from branch offices
to a call-centre. Accessibility has been extended through technological developments as
well as with the introduction of new service delivery methods that allow consumers to
do business with service firms from the home and office.

1.5 Perceived Ease of Use

The internet and World Wide Web (WWW) offer bankers and customers an
opportunity with innovative new virtual environment that can hopefully stimulate and
enhance their learning and operative process. The customer intention to adopt a new
technology is primarily determined by the ease of use of the technology (Davis, 1989;
Davis et al., 1989). Perceived ease of use has been an important factor in studying
information technology acceptance and internet and World Wide Web adoption being
no exception. It refers to the degree to which a person believes that using a particular
5
system would be free of effort. This follows from the definition of ease which means
freedom from difficulty or great effort (Radner and Rothscheld, 1975). It can also be
defined as the degree to which an innovation is perceived not to be difficult to
understand, learn or operate (Rogers, 1983). Further Rogers (1983) stated that
perceived ease of use is the degree to which consumers perceive a new product or
service as much better than its substitutes. Moreover Zeithaml et al., (2002) stated that
perceived ease of use is the degree to which an innovation is easy to understand or use.
In the context of online banking, ease of use may refer to be easy to remember URL
address, a well organised format, easy site navigability and concise and understandable
contents, terms and conditions (Santos, 2003). Perceived ease of use is the consumer
perception that banking on the internet will involve a minimum of effort (Mathieson,
1991). Further, Consult (2002) noted that perceived ease of use refers to the ability of
customers to experiment with new innovation and evaluate its benefits easily. He also
states that the drivers of growth in electronic banking are determined by the perceived
ease of use which is a combination of convenience provided by those with easy internet
access, the availability of secure, high standard electronic banking functionality and the
necessity of banking services. Hence perceived ease of use is an important measure of
customer satisfaction, system adoption or information systems success (Moore and
Benbasat, 1991) and has been studied extensively in the context of information
technology adoption and diffusion. In applying this construct in online banking context,
banks should focus on website navigation and applicable functions to cater needs of
their users so that an application perceived easier to use by users than another is more
likely to be accepted by them and enhances their intention or willingness to use the
technology. If the system of using an online channel for banking transactions does not
outweigh customer deprival occasioned by factors such as impersonal communication,
technical difficulties and learning efforts, the customer may simply switch its patronage
back to traditional channel. Thus, it is apparent that a channel which is easy to use can
play a pivotal role in customer satisfaction with online banking services (Davis et al.,
1989).

1.6 Perceived Usefulness

Information technology rapidly changes the fabrics of industrial growth and
development these days and thus internet banking has become more and more
diversified and complex. Specialising is unlimited, speedy and convenient services
6
through internet banking. Moreover traditional banking in many countries including
India (Lichtenstein and Williamson, 2006) has created challenges before the bankers.
There are several factors that predetermine the consumer attitude towards internet
banking such as demographic background, motivation and behaviour towards different
banking technologies and individual preferences and expectations of new technology
(Rahmath and Abdullah, 2011). Customer attitudes towards internet banking are
influenced by the prior experience of computer and new technology (Laforet and Li,
2005) and other environmental factors (Davis, 1989). The adoption of internet banking
as a new channel for banking transactions forces customers to consider concerns about
password integrity, privacy, data encryption, hacking and the protection of personal
information (Benmati and Serva, 2007). In fact perceived usefulness, security and
privacy are the main influencing factors to accept internet banking system to conduct
banking transactions (Qureshi et al., 2008). Perceived usefulness is one of the important
components of Technology Acceptance Model (TAM) which has been widely studied
by information system researchers (Davis, 1989) and found the system enhancing job
performance of users (Alsajjan and Dennis, 2009). Usefulness refers to users
assessment of the likelihood that the information will enhance their decision. It is the
subjective probability that use of internet in banking transactions would improve the
way a user could complete a given task (Laforet and Li, 2005). Further according to
Davis et al., 1992, perceived usefulness refers to consumers perception regarding the
outcome of the experience. Mathwick et al., (2001) defined perceived usefulness as the
extent to which a person deems a particular system to boost his or her job performance.
Pikkarainen et al., (2004) found perceived usefulness as a determinant of actual
behaviour which encouraged the users of twenty first century banking to use more
innovative and user friendly self service technologies that give them greater autonomy
in performing banking transactions, in obtaining information on financial affairs and in
purchasing other financial products. However, Gerrard and Cunningham (2003) noted
that the perceived usefulness depends on the banking services offered such as checking
bank balances, applying for a loan, paying utility bills, transferring money abroad and
obtaining information on mutual funds. Users may use information technology because
it is appropriate for the job rather than it is convenient or useful (Goodhue and
Thompson, 1995). Thus if the functions of internet banking support are appropriate for
the users job, they will use the technology. Goodhue and Thompson (1995) further
suggest two important points which influence users to use the internet technology. First,
7
it must be appropriate for the given job and secondly individual characteristics are
important because what is appropriate is determined by individuals. The concept of
absorptive capacity, consisting of three components, was proposed by Cohen and
Levinthal (1990) and has been used in many areas such as management strategies,
organisational learning and information technology acceptance. The first component is
prior knowledge which provides the basis of assessing the value of new knowledge.
The second component is knowledge internalisation ability, which internalises new
knowledge by combining it with knowledge one already has. The third and last
component is knowledge utilisation ability with which individuals can apply new
knowledge to their jobs. Thus, if we apply this absorptive capacity to internet banking,
people can use internet banking if they have prior knowledge of using computers and
the actual ability to utilize it. Perceived usefulness may increase customer loyalty,
adoption of recommendation provided by intelligent agents and intention to buy (Tam
and Ho, 2006). Hence, perceived usefulness has become a key predictor of users
attitudes and intention to use a technology. As a consequence, the greater the perceived
usefulness of using electronic banking services, the more likely that electronic banking
will be adopted (Polatoglu and Ekin, 2001).

1.7 Customer Satisfaction

In any business to customer (B2C) type of environment, satisfying a customer is the
ultimate goal of business. It is an important theoretical as well as practical issue for
most marketers and consumer researchers because organisations sometimes do not
really understand what actually goes on in customers mind (Fournier and Mick, 1999).
The concept of customer satisfaction is equally important for service organisations,
such as banks, as many of them subscribe to the fact that higher customer satisfaction
will lead to greater customer loyalty (Boulding et al., 1993) which in turn leads to
future revenue. Customer satisfaction not only means a happy customer but rather
more than that. The concept of customer satisfaction is a synthesis of two distinct
words i.e customer and his/her satisfaction. In common language, the word customer
means a buyer who purchases a product or avails a service from another. Satisfaction
occurs when one gets what one needs, desires, expects, deserves or deems to be ones
entitlement. Oliver (1980) defines customer satisfaction as product performance
equivalent to customer expectation. Oliver (1981) expressed satisfaction as a
psychological state resulting from a process of emotional and cognitive evaluation.
8
According to Hansemark and Albinsson (2004), satisfaction is an overall customer
attitude towards a service provider, or an emotional reaction to the difference between
what customers anticipate and what they receive, regarding the fulfilment of some
need, goal or desire. Kotler (1997) defined satisfaction as a persons feeling of pleasure
or disappointment resulting from comparing a products perceived performance (or
outcome) in relation to his or her expectations. Further customer satisfaction is a
collective outcome of perception, evaluation and psychological reaction to the
consumption experience with a product or service. Haoyer and Mach Innis (2001)
expressed that satisfaction can be associated with the feelings of acceptance, happiness,
relief, excitement and delight. In a competitive marketplace, where businesses compete
for customers, customer satisfaction is seen as a key differentiator and increasingly has
become a key element of business strategy. It can also be defined as a global issue that
effects all organisations irrespective of their size, whether profit or non-profit, local or
multinational companies that have a more satisfied customer base along with higher
economic returns. Boulding et al., 1993 in turn, showed that satisfaction has a
significant effect on purchase intention. For instance, if customers are satisfied with a
particular service offering after its use, they are likely to engage in repeat purchase and
try in building line extensions (East, 1997). In availing services, there are two general
conceptualisations of satisfaction, namely, the transaction specific satisfaction and the
cumulative satisfaction (Boulding et al., 1993; Yi and La, 2004). Transaction specific
satisfaction is the customers very own evaluation of his or her experience and reaction
towards a particular service encounter (Boshoff and Gray, 2004). This reaction is
expressed by the customer who experiences a product or service for the first time. On
the other hand, cumulative satisfaction refers to the consumption experience to date
(Johnson et al., 1995), an own accumulation of contacts with services provided to them.
Thus, it is from this accumulation that customers establish a personal standard which is
used to gauge service quality. The proliferate use of technological convenience offered
by service providers has promoted interest in its effect on customers overall
satisfaction and has given two more conceptualisation of customer satisfaction. These
are human encounter satisfaction and technological encounter satisfaction (Bitner et al.,
2000). The human encounter satisfaction, which a customer derives from an interaction
with an employee of the company, plays an important role in consumers overall
satisfaction with the services of the organisation whereas technological encounter
satisfaction means the satisfaction a customer derives from the interaction with the
9
technology of the company, which plays an important role in consumers overall
satisfaction. Thus, it can be inferred that satisfaction is not simply an overall evaluation
of a service experience, but an influence of different components of the service (Dixit
and Datta, 2010). The boom of internet and electronic banking has evoked several
research efforts aimed at understanding service satisfaction in relation to virtual
business environment (Yang and Peterson, 2004). Thus, the unique characteristics of
internet based services are extensive human- computer interactions and high level self
service may imply that customers perceive satisfaction from online services differently
when contrasted with their offline counterparts (Ribbink et al., 2004). With the growing
trend of information technology in banking sector, customers prefer to deal online with
their bank because of the rising trend of technology effecting quality and customer
satisfaction. Moreover, online banking facilitates cost-effective decision thinking and
applications on the part of the e-banks operations and IT managers to enhance
customer service quality, develops trust in customers and boosts market share in this
expanding but increasingly competitive business area. It thus generates customer
satisfaction and also customer commitment (Liao and Cheung, 2008).

1.8 Commitment
Similar to trust, commitment is one of the most important variables for understanding
the strength of marketing relationship. Marketing relationship refers to marketing
activities that attract, develop, maintain and enhance customer relationship (Berry and
Parasuraman, 1991) for sustainable better business. It has changed the focus of
marketing orientation from interacting for short term, discrete transactional customers
to retaining long lasting intimate customer relationships. More specifically in the
banking context, marketing relationship refers to the relationship banking where it is in
the interest of the banks to establish and maintain long term bonds with their customers
and make them committed so that they can conduct their financial transactions with
their respective banks on regular basis (Ritter, 1993). Relationship banking is also an
important construct in online banking transactions. Moorman et al., (1992) define
relationship commitment as an enduring desire to maintain a valued relationship. Their
valued relationship corresponds with the belief that relationship commitment exists
only when the relationship is considered important for meaningful and long term
business. Priluck (2003) found committed customers more loyal to the organisation and
thus they may be retained by that organisation even when dissatisfied. Dwyer et al.,
10
(1987), Morgan and Hunt (1994) defined commitment as an essential ingredient for
successful long term relationship between customers and banks and it also involves
moral duty to cooperate with customers. It is a desire to have a continual relationship
and an effort to ensure its continuance or as a pledge for relational continuity between
exchange partners (Dwyer et al., 1987). It can also be defined as a psychological
sentiment of the mind through which an attitude concerning continuation of
relationship between banks and customers is formed. Similarly in the context of
internet banking, commitment can be defined as a psychological state that the user
maintains with a website, statement characterising his/her relationship with the site
having implications for the level of maintenance of the same or not, corresponding to
an affective or calculative commitment of the surfer to the site (Boulaire and Mathieu,
2000). Commitment can be affective or normative and calculated and identity. The
affective commitment refers to the customers emotional attachment with the bank site
and can result from experience on the internet and through a site and the immediate
emotional gratification that it brings. In contrast normative commitment derives from a
persons sense of moral obligation towards the site (Allen and Meyer, 1990). Two sub
dimensions characterise affective commitment: the symbolic dimension and the
hedonistic dimension of the site. Whereas calculated commitment refers to the
cognitive process by monitoring the surfer to reach the outcome, the decision to
continue his relationship with a site and arises from convenience, such as 24 hour
access, no geographic limitation, speed of service and transaction automation. In this
perspective, the calculated commitment is characterised by three sub dimensions: the
absence of alternatives, satisfaction with the chosen site and then switching cost. Also
identity commitment to technology refers to the value that consumers place on being
perceived by others as a technologically competent individual and motivates them to
clarify vulnerabilities and substantiate the capabilities of electronic channels (Stryker
and Serpe, 1994). Thus, three forms of commitment arises: a commitment based on
emotional attachment that develops in the relationship between the surfers and the site
that expressing the emotions felt during the browsing experience and is more important
than calculated dimension which depends on the number of alternatives and switching
costs and also identity commitment which arises from social ties. Hence, customer is
committed to deal online with the bank if the bank has proved to be trustworthy and
able to offer solutions that successfully support the value generating processes of the
customer. Also for achieving customer commitment, banks strategy must be customer
11
centred, long term and be based on mutual relationship benefits (Kassim and Abdullah,
2006). Chung and Kim (2003) note that online commitment is often seen as the
intention to revisit the site, intention to buy on the site and intention to recommend
others to visit the site. It is considered as an overall assessment resulting from
satisfaction and is defined as an intention to maintain valued relationship with the
banks site.

1.9 Business Performance

The internet has altered the way in which many industries conduct business. Banking is
no exception to this as technology and innovative thinking changed the design and
delivery of banking services. These days banks use websites as a competitive tool to
attract new customers, improve service quality and boost overall financial performance
through regular feedback. The field of business performance measurement lacks
cohesive body of knowledge (Marr et al., 2002). Business performance measurement
from operations perspective is mainly perceived as a set of metrics used to quantify
both the efficiency and effectiveness of actions (Neely et al., 1995). From Strategic
control perspective, two different aspects of a business performance measurement can
be identified, on the one hand it reflects the procedures used to cascade down those
performance metrics used to implement strategy within the organisation (Gates, 1999).
On the other hand, a business performance measurement system is the system that not
only allows an organisation to cascade down its business performance measures, but
also provides with necessary information to challenge the content and validity of the
strategy (Ittner et al., 2003). Business performance measurement can also be defined
from management accounting perspective, that is a system of multidimensional set of
performance measures for the planning and management of a business. Thus, there are
numerous concepts of business performance. The effectiveness of organisations in
fulfilling its purpose can be defined as business performance (Bourne et al., 2003).
Although performance can have a variety of meaning (Short or long term, financial or
organisational benefits), it is broadly viewed from two perspectives (Sin et al., 2005).
According to Aggarwal, Erramilli and Dev (2003) performance represents an
input/output relationship and is a two dimensional construct based on objective and
subjective performance. Objective performance is one of the dimensions which
involves financial or market based measures such as profitability, market share, return
on equity (ROE), return on assets (ROA) and capacity utilisation. On the other hand the
12
subjective or judgemental performance involves customer or employee opinion based
measures such as customer satisfaction, institutional image, employee satisfaction,
service quality, customer commitment etc. There are numerous studies that have
examined the impact of internet banking on business performance (Hajri and Tatnall,
2007; Malhotra and Singh, 2007; Karim and Hamdan, 2010; Shaukat and Zafarullah,
2009). Hajri and Tatnall (2007) made a comparative study of internet banking in Oman
and Australia and found positive impact of internet banking on business performance
measured in terms of perceived relative advantage, organisational performance,
customer/organisational relationship and ease of use. Shaukat and Zafarullah (2009)
also examined the impact of IT on business performance on the basis of subjective
criteria and found positive impact measured in terms of customer satisfaction,
customer/supplier links, company image, job interest of employees, stakeholders
confidence and inter office links/communication. Whereas Karim and Hamdan (2010)
concluded that IT has positive impact on business performance measured in terms of
ROA, ROE, market value added (MVA) and net profit margin. The marketing concept
indicates that superior judgemental performance is a pre- requisite for superior
objective performance. Narver and Slaver (1990) also elicited that to maximise long
term performance, the banks must build and maintain long run mutually beneficial
relationship with their customers. In an online banking context, there is no consensus as
to how business performance should be measured. Scholars have relied on variety of
both financial measures such as ROA (Narver and Slaver, 1990), ROE, MVA and net
profit margin (Karim and Hamdan, 2010) and sales growth (Pelham, 1999) as well as
more market specific measures as customer satisfaction, customer/supplier links
(Shaukat and Zafarullah, 2009). Thus, a lack of uniformity suggests that it becomes
necessary to categorise the performance indicators used in each study in terms of their
scope (business level or market specific) and measurement (Objective versus subjective
assessment). Business level performance was defined as any generic financial indicator
applicable at the level of a firm (eg. profits, ROA/ROE, sales growth). Market specific
performance was defined with reference to specific markets (eg. customer satisfaction
or loyalty, market share, customer commitment). The objective performance is the
outcome of business activities of the organisation whereas subjective performance
relates to the perceptions of individuals about the organisational performance and may
include customer satisfaction, employee satisfaction, and service quality. Thus, the
widespread availability of internet banking is expected to affect the mixture of financial
13
services produced and offered by banks and the resulting financial performance of these
banks depends on their assessment of the profitability of such a delivery system for
their services (Berger, 2003). In addition, banking through internet has emerged as a
strategic resource for achieving higher efficiency, control of operations and reduction
of costs by replacing paper based and labour intensive methods with automated
processes, thus leading to higher productivity and profitability (Malhotra and Singh,
2004).

1.10 Conclusion
Online globalisation, increasing use of new technologies and fast competition, forced
the banks to adopt new channels to gain competitive advantage, reduce cost, improve
financial services, enlarge customer databases to generate customer satisfaction and
commitment. Moreover, online customers are expensive to attract and difficult to retain
because it is relatively easy for customers to switch their online providers providing
additional benefits. Variables that influence customer commitment towards online
banking include service quality, trust, perceived ease of use, perceived usefulness and
satisfaction can also have a significant impact on banks profitability. Thus, it becomes
important for banks to understand which variable is most important for online business,
which also affects their business performance.

14
 References
Agarwal, Sanjeev, Krishna M. Erramilli and Chekitan D. Dev (2003). Market
orientation and performance in service firms: Role of innovation. Journal of
Service Marketing, 17(1), 68-82.
Allen, N.J. and Meyer, J.P. (1990). The measurement and antecedents of
affective, continuance and normative commitment to the organization. Journal of
Occupational Psychology, 63(1), 1-18.
Alsajjan A. Bander and Charles Dennis (2009). The impact of trust on acceptance
of online banking. European Association of Education and Research in
Commercial distribution.
Benmati and Serva (2007). Trust and distrust in online banking: Their role in
developing countries. Information Technology for Development, 13(2), 161-175.
Berry and Parasuraman (1991). Marketing Services competing through quality
(New York: The Free Press), 1991.
Berger, A.N. (2003). The economic effects of technological progress: Evidence
from the banking industry. Journal of Money, Credit, Banking, 35(2), 141-176.
Bitner, M., B. Booms, and M. Tetreault (1990). The service consequences of
satisfaction decisions. Journal of Marketing, 5(4), 71-84.
Bitner Stephen, W. Brown and Mathew L. Meuter (2000). Technology infusion in
service encounters. Journal of the Academy of Marketing Science, 28(1), 138-149.
Booz, Allen and Hamilton (1997). Internet banking: A study of potential. INC,
New York.
Boshoff, C. and Gray B. (2004). The relationships between service quality,
customer satisfaction and buying intentions in the private hospital industry. South
African Journal of Business Management, 35(4), 27-37.
Boulding, W., Kalra, A., Staeling, R., and Zeithaml, V.A. (1993). A dynamic
process model of service quality: From expectation to behavioural intentions.
Journal of Marketing Research, 30(1), 7-27.
Boulaire, C. and Mathieu, A. (2000). La fidelite a unsite web: Proposition dun
cadre. Conceptual Preliminary proceedings of the 16th congress of AFM,
Montreal.
Bourne, M.C.S., Neely, A.D., Mills, J.F. and Platts, K.W. (2003). Implementing
performance measurement systems: A literature review. International Journal of
Business Performance Management, 5(1), 1-24.
Chung Hoon Park, Young Gul Kim (2003). A framework of dynamic CRM:
Linking marketing with information strategy. Business Process Management
Journal, 9(5), 652-671.

15
 Cohen, Wesley M. and Daniel A. Levinthal (1990). Absorptive capacity: A new
perspective on learning and innovation. Administrative Science Quartely, 35(1),
128-152.
Consult, A.N. (2002). China online banking study. Available at
http://estore.chinaonline.com/chinonlbanstu.html.
Coulter, K.S. and R.A. Coulter (2002). Determinants of trust in a service
provider: The moderating role of length of relationship. Journal of Services
Marketing, 16(1), 35-50.
Davis,F.D., Bagozzi, R.P. and Warshaw, P.R.(1989). User acceptance of
computer technology: A comparison of two theoretical models. Management
Science, 35(8), 982-1003.
Davis, F.D. (1989). Perceived usefulness, perceived ease of use and user
acceptance of information technology. MIS Quartely, 319-340.
Davis, F.D, Bagozzi, R.P and Warshaw, P.R. (1992). Extrinsic and
intrinsic motivation to use computers in the workplace. Journal of applied
social psychology, 22(14), 1111-1132.
Dixit Neha and Saroj K. Datta (2010). Customers perception on internet
banking and their impact on customer satisfaction and loyalty: A study in
Indian context, Journal of Computing, 2(7), 131-145.
Dwyer, R.F., P.H. Schurr and S.Oh (1987). Developing buye r-seller
relationships. Journal of Marketing, 51(2), 11-27.
East, R. (1997). Consumer behaviour: Advances and applications in
marketing, Prentice Hall, London.
Fitzsimmons J & Fitzsimmons M (1997). Service Management:
Operations Strategy, and information technology. New York: Irwin and
McHraw- Hill.
Furnell, S. and Karweni, T. (1999). Security implications of electronic
commerce: A survey of consumers and business. Electronic Networking
Applications and Policy, 9(5), 372-382.
Fournier, S. and Mick, D.G. (1999). Rediscovering satisfaction. Journal of
Marketing, 63(3), 5-23.
Ganesan, R. And Vivekanandan, K. (2009). A secured hybrid architecture
model for internet banking (e-banking). Journal of Internet Banking and
Commerce, 14(1), 1-17.
Gates, S. (1999). Aligning strategic performance measures and results. The
Conference Board, New York.

16
 Gerrard, P. and Cunningham, B.J. (2003). The diffusion of internet banking
among Singapore consumers. International Journal of Bank Marketing, 21(1), 16-
28.
Goodhue, Dale L. and Ronald L. Thompson (1995). Task technology fit and
individual performance. MIS Quartely, 19(2), 213-236.
Gronroos, C. (1984). A service quality model and its marketing implications.
European Journal of Marketing, 18(4), 37-44.
Hajri Salim Al. and Arthur Tatnall (2007). A comparative study of
internet banking in Oman and Australia. International review of Business
Research papers, 3(5), 36 43.
Hansemark, O.C. and Albinson, M. (2004). Customer satisfaction and
retention: The experiences of individual employees. Managing Service
Quality, 14(1), 40-57.
Hoyer, W.D. and MacInnis, D.J. (2001). Consumer behaviour. 2 nd Edition
Boston: Houghton Mifflin Company.
Ittner, C., Larcker, D.and Randall, T. (2003). Performance implications of
strategic performance measurement in financial service firms. Accounting
Organizations and Society, 28(7-8), 715-741.
Johnson, Michael D . Eugene W. Anderson, Claes Fornell (1995). Rational
and adaptive performance expectations in a customer satisfaction
framework. Journal of Consumer Research, 21(3), 695-707
Karim Akram Jalal and Allam M. Hamdan (2010). The impact of
information technology on improving banking performance matrix:
Jordanian Banks as case study. European, Mediterranean and middle
eastern conference on information systems.
Kassim N.M. and Abdullah A.K.M.A (2006). The influence of attraction
on internet banking, an extension to the trust-relationship commitment
model. International Journal of Bank Marketing, 24(6), 424-442.
Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (1997). Principles of
Marketing. New Jersey: Prentice Hall.
Laforet, S. and Li, X. (2005). Consumers attitudes towards online and
mobile banking in China. International Journal of Bank Marketing, 23(5),
362-380.
Lewis, Robert C. and Bernard H. Booms (1983). The marketing aspects of
service quality. American Marketing Association, 99-107.
Lehtinen, U., Lehtinen, J.R. (1991). Two Approaches to service quality
dimensions. Services Industries Journal, 11(3), 287-303.

17
 Liao Ziqi and Michael Tow Cheung (2008). Measuring consumer
satisfaction in internet banking: A core framework. Communications of the
ACM- The Psychology of security: Why do good users make bad decisions?
15(4), 47-51.
Lichtenstein Sharman and Kirsty Williamson (2006). Understanding consumer
adoption of internet banking: An interpretive study in the Australian Banking
context, Journal of Electronic Commerce Research, 7(2), 50-66.
Lociacono, E., Watson, R.T. and Goodhue, D.(2000). WebQual: A website
quality instrument. Working Paper, Worcester Polytechnic Institute.
Malhotra Pooja and Balwinder Singh (2007). Current state of internet
banking in India and its implication for the Indian Banking Industry.
Eurasian Journal of Business and Economics, 2(4), 43 62.
Mathieson, k. (1991). Predicting user intentions: Comparing the technology
acceptance model with the theory of planned behaviour. Information Systems
Research, 2(3), 173-191.
Mathwick, C., Rigdon and Malhotra, N.K. (2001). The effect of dynamic retail
experiences on experimental perceptions of value: An internet and catalog
comparison. Journal of Retailing, 78(1), 51-60.
McKnight, D.H., Chervany, N.L. (2002). What trust means in e-commerce
customer relationship: An interdisciplinary conceptual topology. International
Journal of Electronic Commerce, 6(2), 35-39.
Moore, G.C. and Benbasat, I. (1991). Development of an instrument to measure
the perception of adopting an information technology innovation. Information
Systems research, 2(3), 192-222.
Moorman, C., G. Zaltman, and R. Deshpande (1992). Relationships between
providers and users of market research: The dynamics of trust within and between
organizations. Journal of Marketing Research, 29(3), 314-329.
Morgan, R.M. and Hunt, S.D. (1994). The commitment trust theory of
relationship marketing. Journal of Marketing, 58(3), 20-38.
Morr Bernard, Giovanni Schiuma and Andy Neely (2002). Assessing strategic
knowledge assets in e-business. International Journal of Business Performance
Management, 4(2/3/4), 279-295.
Narver John C. and Stanley F. Slaver (1990). The effect of a market orientation
on business profitability. Journal of Marketing, 54(1), 20-27.
Neely, A.D., Gregary, M.J. and Platts, K.W. (1995). Performance measurement
system design: A literature review and research agenda. International Journal of
Operations and Production Management, 15(4), 80-116.
Oliver, R. (1980). A cognitive model of the antecedents and consequences of
satisfaction decisions. Journal of Marketing Research, 17(4), 460-470.

18
 Oliver, R.L. (1981). Measurement and evaluation of satisfaction processes in
retail settings. Journal of Retailing, 57(3), 25-48.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1985). A conceptual
model of service quality and its implications for future research. Journal of
Marketing, 49(1), 41-50.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1988). SERVQUAL:
A multiple item scale for measuring consumer perceptions of service quality.
Journal of Retailing, 69(1), 12-40.
Pelham, A.M. (1999). Influence of environment, strategy and market orientation
on performance in small manufacturing firms. Journal of Business Research,
45(1), 33-46.
Pikkarainen Tero, Kari Pikkarainen, Heikki Karjoluoto and Seppo Pahnila (2004).
Consumer acceptance of online banking: An extension of the technology
acceptance model. Internet Research, 14(3), 224-235.
Polatoglu, V. and Ekin, S. (2001). An empirical investigation of the Turkish
consumers acceptance of internet banking services. International Journal of Bank
Marketing, 19(4), 156-165.
Priluck, R. (2003). Relationship marketing can mitigate product and service
failures. Journal of Services Marketing, 17(1), 37-52.
Qureshi Tahir Masood, Muhammad Khaqan Zafar and Muhammad Bashir Khan
(2008). Customer acceptance of online banking in developing economics. Journal
of Internet Banking and Commerce, 13(1), 5-14.
Radner, R. and Rothschild, M. (1975). On the allocation of effort. Journal of
Economic Theory, 10(1), 358-376.
Rahmath Safeena and Hema Dale Abdullah (2011). Customer perspectives on e-
business value: Case study on internet banking. Journal of Internet Banking and
Commerce, 15(1), 1-13.
Ribbink, D. Riel, A.C. R. V. Liljander, V and Streukens, S. (2004). Comfort your
online customer: Quality trust and loyalty on the internet. Managing Service
quality, 14(6), 446-644.
Ritter, D.S. (1993). Relationship Banking, Probus Publishing Company,
Cambridge.
Rogers, E.M. (1983). Diffusion of Innovations. The Free Press, New York.
Santos, J. (2003). E-service quality: A model of virtual service quality
dimensions. Journal of Managing Service Quality, 13(3), 233-244.
Shaukat Muhammed and Muhammed Zafarullah (2009). Impact of
information technology on organizational performance- An analysis of
qualitative performance indicators of Pakistans banking and

19
 manufacturing companies. European Journal of Economic, Finance and
Administrative science, 12(2), 48-50.
Sin, L., Tse, A., Yau, O., Chow, R., Lee, J. (2005). Market orientation,
relationship marketing orientation and business performance: The
moderating effects of economic ideology and industry type. Journal of
International Marketing, 13(1), 36-57.
Siu Noel Yee-Man and Jeremy Chi-Who Mou (2005). Measuring service
quality in internet banking: The case of Hong Kong. Journal of
International Consumer Marketing, 17(4), 99-116.
Stryker, Sheldom and Richard T. Serpe (1994). Identity silence and
psychological centrality: Equivalent, overlapping or complementary
concepts. Social Psychology Quartely, 57(2), 16-35.
Stewart, D., P.Pavlou and S. Ward (2001). Media influences on marketing
communications. In Media effects: Advances in theory and research, Bryant, J.
And Zillmann, D. (Ed). Erlbaum, hillsdale, N.J.
Surjadjaja H, Ghosh S & Antony J (2003). Determining and assessing the
determinants of e-service operations. Managing Service Quality, 13(1), 39-53.
Tam, K.Y. and Ho, S.Y. (2006). Understanding the impact of web personalization
on user information processing and decision outcomes. MIS Quartely, 30(4), 865-
890.
Tayler Katherine and Edmund Stanley (2007). The role of trust in financial
services business relationship. Journal of Services Marketing, 21(5), 334-344.
Urban, G.L., Sultan, F. and Qualls, W.J. (2001). Placing trust at the centre of your
internet strategy. Sloan Management Review, 42(1), 1-39.
Wolfinbarger, M.F. and Gilly, M.C. (2002). .comQ: Dimensionalizing, measuring
and predicting quality of the e-tail experience. Working Paper, Marketing science
Insttitute, Cambridge, MA, Report Number 02-100.
Wu, J., Hsia, T. and Heny, M.S. (2006). Core capabilities for exploiting electronic
banking. Journal of Electronic Commerce Research, 7(2), 111-123.
Xu, X. and Zhao, Z.X. (2000). Strategy and revelation of online banking service
development in western countries. Foreign economy and Management, 22(6), 54-
60.
Yang, Z., Peterson, R.T. and Huang, L. (2001). Taking the pulse of internet
pharmacies. Marketing Health Services, Summer, 5-10.
Yang, J., Whitefield, M. and Boehme, K. (2007). New issues and challenges
facing e-banking in rural areas. International Journal of Electronic Finance, 1(3),
336-354.

20
 Yang Zhilin and Robin T. Peterson (2004). Customer perceived value, satisfaction
and loyalty: The role of switching costs. Pschology and Marketing, 21(10), 799-
822.
Yang Jiaqin, Li Cheng and Xia Luo (2007). A comparative study on e-banking
services between China and USA. International Journal of Electronic Finance,
2(5), 235-252.
Yi, Y.J. and La, S.N. (2004). What influences the relationship between customer
satisfaction and repurchase intentions? Investigating the effect of adjusted
expectations and customer loyalty. Psychology and Marketing, 21(5), 351-373.
Zeithaml, V.A., Parasuraman, A. and Malhotra, A. (2002). Service quality
delivery through web sites: A critical review of extant knowledge. Journal of the
Academy of Marketing Science, 30(4), 362-375.
Zeithaml, V.A.; Parasuraman, A. and Malhotra, A. (2000). E-service quality:
Definition, dimensions and conceptual model. Working Paper, Marketing Science
Institute, Cambridge, MA.
Zeithaml, V.A. (2002). Service excellence in electronic channels. Managing
Service Quality, 12(3), 135-138.

21
 Chapter 2
Review of Literature
 Chapter 2

Review of Literature

Contents Page No

2.1 Thematic Review of Literature 22

2.2 Research Gap 26

2.3 Summary of Literature Reviewed in Tabular Form 28

References 64
 CHAPTER-2
REVIEW OF LITERATURE

2.1 Thematic Review of Literature

Till date limited efforts have been made to study the impact of online banking services
in Indian banking. The existing literature has been reviewed for understanding different
concepts and variables related to internet banking as well as to find out the research gap
for the present study. A lot of discussion has appeared in various researches pertaining
to various dimensions that affect the adoption of internet banking and in measuring its
impact on customer satisfaction and business performance. Therefore, in order to
concretise the research gap for the present study, the related literature has been
reviewed as under:-
As already stated, online banking primarily introduced in the early 1990s, uses
the computer technology to give users the ability to manage their transactions on their
own more quickly and efficiently from anywhere around the world by just a click of the
mouse. Tulani et al., (2009) examined the extent of adoption and usage of internet
banking by commercial banks in Zimbabwe and found people using internet banking
for checking account balances, payment of bills and fund transfer. They also found
perceived benefits of using internet banking as cost reduction, increased loyalty and
attracting new customers. Singhal and Padhmanabhan (2008) determine utility request,
security, utility transaction, ticket booking and fund transfer as the factors influencing
users to adopt e-banking channel. Quereshi et al., (2008) evaluate factors that
manipulate the nature of customers towards online banking and found almost 50% of
the clients shifted from traditional banking to online banking system because of
perceived usefulness, security and privacy provided by online banks. Likewise, Azouzi
(2009) also examined the adoption of electronic banking in Tunisia and found majority
of respondents (95%) having an access to internet, but only few of them using it as a
primary banking channel. Auta (2007) empirically examines the impact of e-banking
in Nigerias economy and found customers are satisfied with e-banking system which
provides convenience and flexible advantages such as easy transfer, speedy transfer,
less cost and time saving benefits. Lichenstein and Williamson (2006) also provide an
understanding of how and why specific factors affect the consumer decision about
internet banking in an Australian context and found convenience as the main motivator

22
for consumers to bank online. Flavian et al., (2006) analysed how perceptions of
consumers about traditional bank influence their decision to adopt the services offered
by the same bank on the internet and found consumer trust in a traditional bank as well
as income, age and sex of the respondents as the major factors that influence consumer
decision to work with the same bank via the internet. Thus, online banking service has
recently become very effective offering sophisticated tools, including account
aggregation, stock quotes, rate alerts and portfolio managing programmes to help their
customers manage all their assets more effectively and on time (Tan and Teo, 2000).
The researchers have also focussed on various factors affecting adoption of
internet banking (Ashtiani and Iranmanesh, 2012; Eze et al., 2011; Yaghoubi and
Bahmani, 2010; Oii et al., 2010; Kashier et al., 2009). Tat et al., (2008) revealed trust
as the most important factor influencing intention to continue using the internet
banking services followed by compatibility and ease of use. Bander and Charter (2006)
also measure impact of trust on acceptance of online banking and found trust playing
an important role in increasing the usability of online banking. Wang et al., (2009)
investigated whether consumer perception of risk (perceived risk) in transacting on the
internet would have an influence on e-banking website (specific trust) and customers
willingness to use e-banking and found perceived risk having a direct influence on
consumer willingness to use e-banking and specific trust having a positive moderating
influence on the relationship between perceived risk and willingness to use e-banking.
In addition to this, there are numerous studies conducted by Hassan et al., 2012
Ravichandran et al., 2010; Dixit and Datta, 2010; Baskar and Ramesh, 2010; Ganguli
and Roy, 2010; Khurana, 2009; Haque et al., 2009, Yang and Peterson, 2004 indicating
that service quality of banks also affects intention to use internet banking as well as
their satisfaction. Also, Lee and Lin, 2005; Siu and Mou, 2005, You and Donthu, 2001,
Wong et al., 2008, Parasuraman et al., 1985, Parasuraman et al., 1988 develop various
dimensions of online service quality.
Moreover, Muhammad and Rana (2012) found perceived ease of use, perceived
usefulness, compatibility, innovativeness and perceived credibility influencing
customers intention to adopt internet banking. Similarly Wu, Chang and Lin (2012)
found trust, perceived usefulness and perceived ease of use and relative advantage
having a significant effect on customers behavioural intention to adopt internet
banking. Chang and Hamid (2010) also explored two factors viz. perceived ease of use
and perceived usefulness influencing behavioural intention of customers to adopt

23
internet banking in Taiwan. In the same manner, Yiu et al., (2007) also make an
attempt to know the adoption of internet banking by retail customers in Hong Kong and
found constructs such as perceived usefulness, perceived ease of use, perceived risk
and personal innovativeness on information technology having a positive relationship
with internet banking adoption.
Satisfying a customer in any banking business is the ultimate goal and
objective. Researchers have also focussed on impact of internet banking on customer
satisfaction (Alam and Soni, 2012; Musiime and Ramadhan, 2011; Singh and Kour,
2011). Ma (2012) finds privacy, reputation and price as the key factors affecting
customer satisfaction in online banking in China. Alam and Soni (2012) find
satisfaction of customers being generated through quick services, affordable service
charge, easiness of depositing and withdrawing money, ATM booths, account
statement over SMS/e-mail services and error free records. Zafar et al., (2012) observed
tangibility, reliability, competence and conflict handling as the constructs of service
quality generating customer satisfaction and customer loyalty. Musiime and Ramadhan
(2011) found a positive significant relationship between internet banking adoption and
customer satisfaction. Dai et al., (2011) determined the antecedents of online service
quality, commitment and loyalty in internet mediated environment (IME) and found
service content quality and service delivery quality as two important antecedents of
consumer service enjoyment, affecting their commitment and loyalty. Muhammad and
Alhamadani (2011) claimed five service quality dimensions viz. reliability,
responsiveness, empathy, assurance and tangibility as important antecedents of
customer satisfaction. Nupur (2010) examined e-banking and customer satisfaction in
Bangladesh and found the same service quality dimensions which were found by
Muhammed and Alhamadani (2011) as core dimensions of customer satisfaction. Lin
and Sun (2009) studied factors influencing satisfaction and loyalty in online shopping
on the basis of technology acceptance factors viz. perceived usefulness and perceived
ease of use, website service quality and specific hold up cost factors and conclude that
customers e-satisfaction will positively influence customers e-loyalty directly,
technology acceptance factors will positively influence customer e-satisfaction and e-
loyalty directly, website service quality can positively influence customer e-loyalty
directly, but cannot positively influence customer e-satisfaction directly. Floh and
Treiblmair (2006) identified satisfaction and trust as important antecedents of customer
loyalty. Li et al., (2006) examined the relationship between user and website with

24
commitment and trust as key mediating variables and find significant association
between intention to stick with a website and commitment and trust in the website.
Further, Fock and Koh (2006) conceptualise trust and commitment relationship in
context of internet banking and revealed higher level of trust and commitment as
significantly associated with willingness to try internet banking facilities. Luarn and
Lin (2003) observed customer satisfaction and perceived value are indirectly related to
loyalty through commitment. Riquelme et al., (2009) also examined which customer
service and online attributes predict overall satisfaction and found that satisfaction has
been generated through improving courtesy, content timeliness and product and
services offered. Khan and Mahapatra (2009) concluded that customers are satisfied
with the reliability of services provided by banks but are not satisfied with the
dimension of user friendliness. Thus, the studies indicate the necessity of measuring the
impact of trust, perceived ease of use, perceived usefulness, service quality provided by
banks online on customer satisfaction and customer commitment.
The effectiveness of organisations in fulfilling its purpose can be described as
business performance (Opara et al., 2010). In fact it represents an input/output
relationship, is two dimensional concept based on objective and subjective performance
(Hasan et al., 2010). Some researchers have focussed on measuring impact of
information technology on objective basis (Karim and Hamdan, 2010; Onay and Ozsoz,
2007; Malhotra and Singh, 2007; Siam, 2006; Guo et al., 2004). Whereas, others have
focussed on measuring impact on the basis of subjective criteria (Ahmad et al., 2010;
Shaukat and Zafarullah, 2009; Hajri and Tatnall, 2007; Jham and Khan, 2005; Lee and
Hwan, 2005). Also, Kaleem and Ahmad, 2008 observed bankers in Pakistan
considering internet banking as profitable because of minimising inconvenience,
reducing transaction costs and saving time. Uppal (2011) analyzed the performance of
Indian banks in terms of productivity and profitability in the pre and post e-banking
period and found banks performance better in post e-banking period than pre e-
banking period. Similarly, Kour (2012) examined the impact of IT on branch
productivity and Kashap and Sharma (2012) examined the impact on branch
productivity, labour productivity and profitability in pre and post e-banking period and
found performance of banks improving after implementation of information
technology and more particularly, mobile banking and internet banking. Thus, on the
basis of literature reviewed, there is a need to measure the impact of internet banking
on business performance on the basis of both objective and subjective criteria in pre

25
and post e-banking period. The objective performance will be measured with the help
of ROA, ROE and Net Profit margin whereas the subjective performance will be
measured through customer satisfaction, service quality offered by banks, perceived
ease of use, perceived usefulness and customer commitment.

2.2. Research Gap

Internet banking is changing the whole banking industry, having effects on banking
relationships and its performance. So this aspect cannot be undermined and need to be
researched thoroughly. The aforesaid review of literature reveals that so far impact of
internet banking on customer satisfaction together with business performance has not
been studied extensively. The most of the studies have focussed on extent of adoption
of internet banking (Tulani et al., 2009; Azouzi, 2009; Qureshi et al., 2008), some have
studied factors affecting continued usage of internet banking (Kashier et al., 2009;
Ashtiani and Iranmanesh, 2012; Eze et al., 2011). Similarly, some studies focussed on
dimensions of service quality (Lee and Lin, 2005; Siu and Mou, 2005; You and
Donthu, 2001), some have examined influence of trust and its antecedents on the
adoption of e-banking (Wang et al., 2009; Bander and Charter, 2006). In the same
manner , some have focussed on measuring impact of internet banking on customer
satisfaction and commitment (Ma, 2012; Singh and Kour, 2011) and some on business
performance (Hajri and Tatnall,2007; Malhotra and Singh, 2007; Onay and Ozsoz,
2007). Thus, most of studies were limited to either one or two aspects of internet
banking.
The proposed study aims to fill up this research gap by studying the impact of internet
banking on customer satisfaction and business performance on the basis of following
dimensions viz. trust, service quality, perceived ease of use, perceived usefulness,
customer satisfaction and commitment. Further the business performance can be
evaluated from the financial reports of the banks and from customer satisfaction and
commitment, which increase the performance of the banks as a whole.
Hence, the objectives of the study are as under;
To find the increasing significance of internet banking.
To examine the impact of trust on customer satisfaction.
To evaluate the impact of service quality on customer satisfaction and business
performance.

26
 To examine the impact of perceived usefulness and perceived ease of use on
intention to use internet banking and hence customer satisfaction and employee
satisfaction.
To evaluate the impact of customer satisfaction on customer commitment.
To examine the impact of internet banking on business performance of banks to
be measured objectively as suggested by Karim and Hamdan, 2010; Onay and
Ozsoz, 2007 and subjectively as suggested by Ahmad et al., 2010; Shaukat and
Zafarullah, 2009 and further period wise as suggested by Kour, 2012 and Uppal,
2011.

27
 2.1:Summary of Literature Reviewed in Tabular Form
S. No. Authors (Year) Objective of the Study Methodology Findings Limitation/Future
Research

1. Parasuraman, To develop model of Conceptual paper Found ten dimensions of Need to develop a
Zeithaml and Berry service quality service quality viz. tangibility, standard instrument to
(1985) reliability, responsiveness, measure consumers
communication, access, service quality
competence, courtesy, dimensions
credibility, security and
understanding
2. Parasuraman, To examine consumer Data were collected Results show that service Enriched empirical
Zeithaml and Berry perceptions of service through quota quality can be measured research focussing on
(1988) quality sampling from 200 through five dimensions viz. service quality and its
respondents and tangibility, reliability, antecedents and
analysed through responsiveness, assurance, and consequences should be
factor analysis empathy done in future
3. Tan and Teo (2000) To identify attitudinal, Data were collected Attitudinal and perceived Online survey has
social and perceived from 454 respondents behavioural control factors restricted the

28
 behavioural control through mailed rather than social influence perceptions of non-
factors that influence survey questionnaire play a significant role in internet users
adoption of internet influencing intention to adopt
banking internet banking. Perceptions
of relative advantage,
compatibility, trialability and
risk towards using the internet
were found to influence
intention to adopt internet
banking services.
4. Yoo and Donthu To develop and validate 5 point likert scaled Four dimensions viz. ease of The participants
(2001) a psychometrically questionnaires were use, aesthetic design, measure only consumer
rigorous instrument to given to 94 students processing speed and security goods sites. Thus, other
measure the perceived of marketing class, have appropriate reliability sites need to be taken
quality of an internet out of which 69 gave and validity in every aspect, into consideration and
shopping site the completed form showing site quality as directly SITEQUAL dimensions
(SITEQUAL) which resulted in 207 linked to site performance of technical aspects of
evaluations as each web design should also
participant evaluated be examined
three sites. Both EFA

29
 and CFA were used
to analyse the data

5. Luarn and Lin To examine antecedents Data were collected Trust, customer satisfaction, Study is limited to only
(2003) that influence loyalty from 180 respondents perceived value and two e-service categories
who used online commitment are separate and targeted specific
travelling services constructs that combine to consumer group
and video on demand determine loyalty with
through Quota commitment exerting a
sampling and stronger influence than trust,
analysed through customer satisfaction and
multiple regression perceived value. Also
analysis customer satisfaction and
perceived value are indirectly
related to loyalty through
commitment
6. Guo et al., (2004) To examine the lagged Data on customer Past satisfaction having a Empirical study should
effect between satisfaction is positive effect on current be conducted in future
customer satisfaction gathered from profitability and past
and profitability American customer profitability affects

30
 satisfaction index customer satisfaction
(ACSI) and data on
sales and other
variables of interest
such as Return on
Assets (ROA) are
extracted from
sources such as
compustat for the
companies whose
satisfaction scores
are reported in the
ACSI database
7. Yang and Peterson To examine customer Data were collected Customer loyalty can be The study is too limited
(2004) perceived value, from web based generated through improving in scope as only limited
satisfaction, loyalty and survey randomly customer satisfaction and factors were taken
the role of switching selected from an e- offering high product/service
costs mailing list of 4000 value
respondents provided
by an e-mail broker,

31
 from which only 235
gave the final
response. Both EFA
and CFA were used
to analyze the data
8. Lee and Lin (2005) To examine the Data were collected Website design, reliability, Different methodologies
relationship among e- from 297 online responsiveness and trust affect such as longitudinal
service quality customers and overall service quality and studies, focus groups
dimensions and overall analysed with the customer satisfaction which in and interviews should
service quality, customer help of CFA and turn significantly affects be used in future to
satisfaction and SEM customer purchase intentions. examine the same
purchase intentions However, the personalisation relationship
dimension is not significantly
related to overall service
quality and customer
satisfaction
9. Siu and Mou To examine e-banking Data have been All dimensions except E-banking service
(2005) service quality on the gathered from 195 security are found to be quality was tested in
basis of four dimensions respondents who are important in determining Hong Kong with limited
viz. credibility, actually users of overall service quality. Also sample. Hence, it does

32
 efficiency, problem internet banking in credibility, problem handling not give general picture
handling and security Hong Kong .One and security having significant of e-banking
way ANOVA, T-test impact on customer
and multiple satisfaction and it is also found
regression analysis that security and efficiency are
were used as significantly associated with
statistical tool for future consumption behaviour
analysis
10. Jham and Khan To examine the impact Data were collected Result concludes that Selection of data from
(2005) of customer satisfaction from 560 customers performance of the bank is only one industry
on performance of through probability positively linked to thus, limits the ability
Indian banks by systematic sampling customer satisfaction to extrapolate the
considering various from five banks viz. findings of the
services provided by SBI, PNB, HDFC, research to other
banks viz. traditional ICICI and IDBI and industries
facilities, multichannel analysed through
banking and internal factor analysis,
marketing ANOVA and
regression analysis

33
11. Lee and Hwan To examine the Conceptual paper Perception quality is an Empirical research
(2005) relationship between antecedent of attitude, service should to conducted in
service quality, customer quality is an antecedent of future
satisfaction and customer satisfaction,
profitability customer satisfaction directly
affects purchase intention and
customer satisfaction is an
antecedent of profitability
12. Floh and To examine antecedents Data were collected Results show that satisfaction The results of the study
Treiblmair (2006) of online loyalty such as from 2000 customers and trust are important cannot be generalized
trust, quality of the of an Austrian online antecedents of loyalty because of the biasness
website, quality of the bank and analysed of the sample
service and overall through SEM
satisfaction
13. Fock and Koh To examine trust and Data were collected Higher level of trust and This study focuses on
(2006) commitment relationship from 300 commitment are significantly measuring perceptions
in the context of internet undergraduate associated with greater of trust rather than
banking students from willingness to try internet actual trustworthiness of
Singapore and banking. They further found internet banks. Further
analysed by applying security, ethics, privacy, only nine antecedents

34
 regression analysis openness, the speed of are considered factors
response, quality of that affect trust, there
information, regulatory may be more
control, technology antecedents to trust and
advancement and reputation as willingness to try
determinants of trust
14. Siam (2006) To examine the effects Data were gathered Electronic banking services Study has been
of electronic banking from 20 commercial having a negative effect on conducted in Jordan city
services on banks banks which have banks profitability in the short only
developed their sites
profitability in Jordan run and positive effect on
in Jordan and
banks profitability in the long
analysed by applying
correlation analysis run
15. Lichenstein and To examine specific Conceptual paper Convenience is the main Empirical study should
Williamson (2006) factors affecting motivator that influences be conducted in future
consumer decision in customers to bank online.
Australian Banking
context

16. Flavian (2006) To examine how Data were randomly Consumer trust in a traditional The study was based on
consumers perceptions collected from 633 bank as well as income, age perceptions of only

35
 of their traditional banks bank customers and and sex are factors that Spanish speaking
influence their decision analysed through influence their decision to persons
to adopt the services Binomial Logistic work with the same bank via
offered by the same Regression process the internet
banks on the internet
17. Bander and Charter To measure the impact Conceptual paper Trust plays an important role Trust should be
(2006) of trust on acceptance of in increasing the usability considered in addition to
online banking under the online banking perceived usefulness
environment and perceived ease of
use
18. Li et al., (2006) To examine the Data were collected There exists significant This study positioned
relationship between from 239 graduate association between intention and measured
user and website with and post graduate to stick with a website and commitment and trust as
commitment and trust as students and analysed commitment to and trust in the uni dimensional
key mediating variables by using partial least website concepts, whereas other
square studies recognize these
two concepts as
multidimensional
19. Hajri and Tatnall Made a comparative Data were collected The findings reported in More factors should be
(2007) study of internet through interviews this study suggested that considered for future

36
 banking in Oman and with bank managers four perceptions of bank studies
Australia in each country managers towards the
about the internet: perceived relative
perceptions of four advantage, organisational
factors that might performance, customer /
have affected their organisational relationship
decisions to adopt and ease of use can assist in
or not to adopt drawing out enablers and
internet inhibitors to the adoption of
technologies internet technology for both
Oman and Australia
20. Malhotra and Singh To examine the The data were Result show that nearly Sample size is small
(2007) current state of collected from the 57% of the Indian
internet banking in RBI financial commercial banks are
India and its statements and providing transactional
implication for the income expense internet banking services.
Indian banking reports. The The invariable analysis
industry. They also internet related indicates that internet banks
analysed the details were drawn have better operating
performance of an from a survey of 85 efficiency ratios and

37
 internet banking scheduled profitability as compared to
group in comparison commercial banks non-internet banks. Also
to non-internet websites in June internet banks rely more
banking group and 2007. A number of heavily on core deposits for
impact of internet financial ratios funding than non-internet
banking on business have been used to banks do. The multiple
performance and risk measure the regression results reveal
performance of that the profitability and
banks offering of internet banking
do not have any significant
association. However, on
the other hand, internet
banking has a significant
and negative association
with risk profile of banks,
which shows that the
adoption of internet
banking has not increased
the risk profile of banks.
21. Onay and Ozsoz To examine the In fact thirteen The adoption of internet Other parameters

38
(2007) impact of internet banks adopted banking does not seem to should be taken into
banking on financial internet banking in have a significant impact on consideration for
performance and Turkey between the performance of Turkish future research
profitability of 1996 and 2005. banks measured in terms of
Turkish banks Bank profitability ROA, ROE and margin in
has been measured the year of internet
in terms of return adoption rather in the
on bank assets following year the bank
(ROA), a ratio of registered a significant
banks profits to decrease in the profitability
total assets, and because of increase in IT
return on equity expenditure by adopting
(ROE) new technology. However
in the 2 nd and 3 rd years
following the adoption of
technology, there was a
positive coefficient of the
variable on the ROE only,
showing positive impact on
bank profitability and

39
 internet adoption
22. Yiu et al., (2007) To examine adoption of Data were collected Constructs such as perceived Sample size is small
internet banking by from 150 respondents usefulness, perceived ease of
retail customers in Hong through telephone use, perceived risk and
Kong survey and analysed personal innovativeness on
by adopting T-test information technology have a
and Pearson positive relationship with
correlation techniques internet banking adoption
23. Auta (2007) To examine the impact Data were collected Customers are satisfied with e- Data is collected from
of e-banking in from 750 customers banking system providing only urban city of
Nigerias economy of 25 commercial convenience and flexible Nigeria
banks in Nigeria and advantages such as easy
analysed through transfer, speedy transaction,
Kaiser Meyor Olkin less cost and time saving
(KMO) approach and benefits to its customers
Bartletts test of
sphericity to extract
independent variables
associated with e-
banking

40
24. Singhal and To examine factors Data were collected Majority of respondents are
Padhmanabhan responsible for internet through mailed male and the factors responsible
(2008) banking questionnaires from for internet banking are utility
61 respondents and request, security, utility
analysed through transaction, ticket booking and
SPSS fund transfer
25. Qureshi et al., To study factors that Primary data were 50% of the clients shifted The study is based on
(2008) manipulate nature of collected through from traditional banking to limited data input and
customers towards mail survey and online banking system because also important
online banking and their telephonic of perceived usefulness, demographic
growing tendency interviewing whereas security and privacy provided background of the
towards online financial secondary data has by online banks customers has not been
institutions in Pakistan been obtained from taken into account
the websites of the
State Bank of
Pakistan
26. Tat et al., (2008) To examine predictors The data were Trust as the most important However, the results
of intention to continue collected from 204 factor influencing the intention cannot be generalized as
using internet banking residents in Klang to continue using the internet the other predictors such
services on the basis of Valley, Malaysia who banking services followed by as the perceived risk,

41
 trust, compatibility and were users of internet compatibility and ease of use usefulness and relative
ease of use banking services. advantage that can
Pearson correlation influence the criterion
analysis and multiple variable are not taken
regression analysis into account
were used for
drawing inferences
27. Wong et al., (2008) To examine the role of Data were collected Five service quality The data collection is
traditional service from 706 respondents dimensions viz. reliability, limited to the Australian
quality in an e-banking through online survey responsiveness, assurance, context where the
environment and analysed through empathy and tangibles has not Australians internet
Quadrant analysis changed dramatically over the maturity is quite solid
years, but large discrepancies
were found between customer
expectations and their
perceived performance of
traditional banking services
28. Kaleem and Ahmad To examine bankers Data were collected Bankers consider minimizing Demographic
(2008) perception of the from 207 bank inconvenience, minimizing characteristics should
potential benefits and employees from 15 cost of transaction, and time also be used as

42
 risks attitude with major commercial saving as important benefits parameters for further
electronic banking in banks operating in and chances of government analysis
Pakistan Lahore and analysed access, chances of fraud and
via frequency and lack of information security to
mean score analysis be vital risk associated with
electronic banking
29. Tulani et al., (2009) To examine the extent of A structured Majority of the banks in The study indicates
adoption and usage of questionnaire was Zimbabwe have adopted the necessity of
internet banking by used in 16 internet banking, usage improving marketing
commercial banks in commercial banks in levels have remained efforts by initiating
Zimbabwe and the Zimbabwe, while relatively low, as not many awareness
challenges they face in only 12 filled and customers are using this programmes to raise
this respect returned the innovation in Zimbabwe. customer awareness
questionnaire. SPSS The main usage of internet and interest in
version 10 was used banking has been for internet banking and
as a statistical checking account balances, also the government
analysis tool for payment of bills and fund must, through the
drawing inferences transfer. Important Reserve Bank of
perceived benefits of using Zimbabwe (RBZ),
internet banking were cost increase investment in

43
 reduction, increased loyalty education and
and attracting new infrastructure
customers and the development to
challenges for adoption of enable more firms and
internet banking are consumers to adopt
compatibility with legacy the innovation
systems followed by cost of
implementation and
security concerns
30. Azouzi (2009) To examine the extent Data were Results show majority of Although the study
of adoption of collected through respondents (95%) having has come up with the
electronic banking in questionnaire and access to internet but only findings of far
Tunisia personal interviews few of them use it as a reaching significance
from 84 primary banking channel. In both in literature and
respondents fact 52.4% of the practice yet it cannot
selected from respondents prefer to go be generalised due to
schools, directly to bank and its limited data input
universities and continue to emphasize their and that too from
households having linkage to traditional respondents working
a current account in banking. It is due to the fear primarily in

44
 bank of transactions error or educational
hackers that alienate institutions
Tunisian customers from
using online banking

31. Kasheir et al., To examine the factors Data were collected Perceived ease of use was Size of sample and
(2009) affecting continued from 65 respondents found to be the strongest strategy of data
usage of internet conveniently and predictor of intention to collection are the major
banking among analysed through continued usage of internet limitations of the study
Egyptian customers multiple regression banking services and
and ANOVA demographic variables having
no significant effect on the
same
32. Wang et al., (2009) To analyse customer Data were collected Perceived risk having a direct Non- probability
perception of risk in from 202 respondents influence on consumers sampling technique has
transacting on the including willingness to e-banking and been used which
internet and their administrative and specific trust having a positive restricts the
willingness to use e- academic staff from moderating influence on the generalisability of
banking ten departments relationship between perceived results
across the five risk and consumer willingness

45
 faculties of large to use e-banking
Australian University.
Hierarchical
moderated regression
analysis was used to
analyse the data

33. Khurana (2009) To identify the customer Primary data were Service quality dimensions The data have been
preferences towards collected from 100 such as efficiency, obtained from one
online banking and internet banking users responsiveness, fulfillment, district only and that too
various service quality of Hissar district by privacy of personnel from limited
dimensions that affect convenience sampling information and easiness to respondents
customer satisfaction in and analysed through use are the core dimensions of
internet banking ANOVA and F-test internet banking affecting
customer satisfaction
34. Haque et al., (2009) To study factors Structured Protected transactions having Banks must invest in
determining the questionnaire has significant impact on technology research
Malaysian Banking been used to collect customers perception about e- through which greater
consumers perception on data from 230 banking security, followed by prevention and
e-banking transactions respondents and service quality and regulatory protection tools can be

46
 analysed through framework issues innovated
factor analysis and
SEM

35. Lin and Sun (2009) To examine factors Data were collected Customer e-satisfaction will Wider range of
influencing satisfaction from 221 online users positively influence customer constructs such as
and loyalty in online through snowball e-loyalty directly, technology cultural and social
shopping on the basis of sampling technique acceptance factors will factors affecting e-
technology acceptance and analysed through positively influence customer satisfaction and e-
factors (perceived AMOS and SEM e-satisfaction and e-loyalty loyalty are also need to
usefulness and perceived directly, website service be studied
ease of use), website quality can positively
service quality and influence customer e-loyalty
specific hold up cost directly, but cannot positively
factors influence customer e-
satisfaction directly
36. Riquelme et al., To examine which The sample was Satisfaction being generated The study is based on
(2009) customer service and drawn from one of through improving courtesy, the data pertaining to
online attributes predict the main banks in content timeliness and only one bank
overall satisfaction, Kuwait. Multiple products and services offered.

47
 determined if satisfied regression and This shows that companies
customers use more discriminant analysis that offer a wide product
online banking features were used to analyse portfolio and relevant website
than not satisfied the data content accompanied by
customers and to prompt and courteous response
identify the create satisfaction online
characteristics of less
satisfied customers
37. Khan and To examine quality of i- Data were collected Customers are satisfied with The results cannot be
Mahapatra (2009) banking services in India from various target the reliability of the bank generalised as the
from customer groups consisting of services but are not satisfied service quality of e-
perspective ten e-banking users with the dimension of user- banking has been tested
and the managers of friendliness. The two in urban India and that
four banks including dimensions viz- too from limited sample
public sector, private privacy/security and fulfilment only
sector and foreign are not contributing
banks and analysed significantly towards the
with the help of overall service quality
regression analysis
38. Shaukat and To examine the The data were IT having positive impact In fact the number of

48
 Zafarullah (2009) impact of IT on collected through on organisation in terms of manufacturing
organisational in-depth interviews customer satisfaction, companies taken is
performance with and field surveys of customer/supplier links, too small though
respect to different 48 companies, 24 in company image, job interest chosen randomly
performance manufacturing of employees, stakeholders,
indicators of Pakistani sector (12 local and confidence and inter office
manufacturing and 12 foreign) and 24 links/communication. Also
banking sectors during in banking sector the performance of the
1994-2005 (12 local and 12 banking sector outstrips the
foreign). The performance of the
participants in the manufacturing sector. In the
study were the banking sector local
operative staff and companies are taking the
managers of lead, while in
finance. T-test and manufacturing companies
one way ANOVA multinationals are at top
have been used to
draw inferences
39. Yaghoubi and To study factors Data were randomly Intention to use online banking Research domain is too
Bahmani (2010) affecting adoption of collected from 349 is positively affected by limited

49
 online banking in selected customers perceived behavioural control
Isfahan Province of Iran and analysed through and perceived usefulness
SEM
40. Oii et al., (2010) To examine the factors Data were collected Perceived usefulness, trust, Sample is too small
that affect the adoption from 103 respondents and government support are
of online banking in and analysed on the positively associated with the
Vietnam basis of correlation intention to use online banking
and multiple in Vietnam. Contrary to the
regression analysis technology acceptance model,
perceived ease of use was
found insignificant
41. Ravichandran et To examine the Data were collected Tangibility, responsiveness The findings of the
al., (2010) influence of service from 102 customers and empathy dimensions play study cannot be
quality on banking generalised as it is based
from two major an important role in predicting
customer behavioural on consumer perception
intentions public sector banks of customer behavioural intention only
Tirchirapalli city of
Tamil Nadu, India
and analysed through
univariate analysis
42. Dixit and Datta To identify the Data were collected Factors such as perceived However, the study is

50
 (2010) perceived service quality from 250 respondents value, perceived service based on two states
dimensions of self of internet banking quality, customer satisfaction only, thus not true
service technology users from the states and their loyalty having a representative of whole
(internet banking) and of Rajasthan and significant impact on customer of India
its impact on customer Uttar Pradesh in acceptance of internet banking
satisfaction and loyalty India. Descriptive
in internet banking statistics and
correlation were used
through SPSS to
know the perceived
service quality of
internet banking and
level of satisfaction
among customers in
India
43. Baskar and Ramesh To examine the linkage Data were collected Results show online banking The findings of the
(2010) between online banking from 400 randomly service quality having a study are not conclusive
service quality and selected customers significant positive impact on because the data have
customer satisfaction from 42 banks customer satisfaction been drawn from only
through systematic one segment viz.

51
 sampling. Multiple customers
regression analysis
was used to analyse
the data
44. Ganguli and Roy To identify the generic The study is based on Customer services, technology The findings of the
(2010) service quality the data collected security and information application of the
dimensions of from 336 quality, technology service quality
technology based undergraduate convenience and technology dimensions cannot be
banking and also to students of University usage easiness and reliability relevant to e-banking as
examine the effect of in the Massachusetts were identified as four generic only generic dimensions
these dimensions on State of USA and service quality dimensions. It were taken
customer satisfaction analysed through was also found that customer
and loyalty EFA, CFA and SEM service and technology usage
easiness and reliability have
positive and significant impact
on customer satisfaction and
loyalty
45. Chang and Hamid To investigate internet Data has been Perceived ease of use and More factors are taken
(2010) banking adoption among collected from 203 perceived usefulness are the into consideration for
Taiwanese banking respondents from two factors influencing future study

52
 customers Taiwan and analysed behavioural intention to adopt
by applying chi- online banking
square test and
regression analysis
46. Nupur (2010) To examine the impact Data were collected Reliability, responsiveness, Data have been
of e-banking variables from 400 randomly assurance, empathy, and collected from urban
on customer satisfaction selected respondents tangibility are core service areas of Bangladesh and
in Bangladesh out of whom only 250 quality dimensions for no bank wise position is
gave the complete customer satisfaction in e- made
response. Regression banking and out of them only
analysis and ANOVA reliability, responsiveness and
were used to analyse assurance having more
the data contribution to customer
satisfaction
47. Opara et al., (2010) To investigate impact of Data were collected Technology exists as a The data has been
technology on from 409 employees moderating variable in the gathered from only
relationship marketing of 123 bank branches relationship marketing employees of bank
orientation and business operating in Port orientation and business
performance of Nigerian Horcourt and performance relationship of
banks analysed with the the Nigerian banks

53
 help of SPSS
48. Ahmad et al., To examine relationship Data were gathered There is a significant positive Respondents from one
(2010) between customer from self developed relationship between customer location is selected
satisfaction and questionnaire satisfaction and performance
performance of administered to 864 of conventional bank. Also
conventional banks customers through customer satisfaction helps to
operating in Pakistan simple random increase the bank performance
sampling from 72 due to greater profitability,
branches of National increased market share and
Bank of Pakistan, more return on investment.
Muslim Commercial Similarly customer satisfaction
Bank and Askari generates positive outcomes
Bank operating in for long term profitability
Pakistan and have
been analysed by
using Pearson
correlation and the
magnitude of
relationship is
assessed by

54
 regression analysis
49. Karim and Hamdan To examine the effects Data has been Findings revealed that IT Other Measures should
(2010) of information gathered from 15 having a positive impact on be adopted in future
technology on the Jordanian banks for a business performance research
Jordanian banking period of five years measured in terms of ROA,
industry ROE, market value added and
net profit margin

50. Eze et al., (2011) To examine factors Data were collected Factors such as perceived ease Respondents only from
influencing use of from 310 young of use, perceived usefulness, one location and that too
internet banking services participants through relative advantage, self conveniently have been
among Young convenience sampling efficacy, perceived credibility selected
Malaysian Adults and analysed through and trialability tend to
multiple regression influence customer attitude to
analysis adopt internet banking services
51. Musiime and To examine the factors Data were collected There is a significant positive Future research should
Ramadhan (2011) that influence customer from 351 customers relationship between internet focus on determining
adaptation of internet of Kampala city banking and customer the needs, issues and
banking as well as to through stratified satisfaction demands of the
examine the relationship sampling and customers

55
 between internet analysed through
banking service, descriptive analysis,
customer adoption and factor analysis and
customer satisfaction multiple regression
analysis
52. Singh and Kour To examine factors Data were collected Customer satisfaction in a The major limitation of
(2011) having impact on from 456 respondents universal banks is influenced the study is the
customer satisfaction through convenience by seven factors viz. employee collection of data from
sampling. 114 responsiveness, appearance of only Chandigarh for
respondents were tangibles, social responsibility, which the results do not
selected for each of services innovation, positive have general
four banks viz. SBI, word of mouth, competence applications to different
PNB, ICICI and and reliability banks in the same sector
HDFC and analysed and the same banks in
through factor different city of India
analysis, multiple
regression analysis
and Pearsons
coefficient correlation
53. Dai et al., (2011) To examine the Data has been Service content quality and Findings cannot be

56
 antecedents of online collected through service delivery quality are generalized because
service quality, online survey from two important antecedents of majority of the
commitment and loyalty 772 persons who use consumer service enjoyment responses are from
in internet mediated IME services such as that further affect their young population
environment (IME) internet banking commitment and loyalty
services, online
purchases, online
entertainment
services etc and
analysed through
ANOVA and SEM
54. Mohammad and To examine the level of Data were collected Five dimensions of service The results cannot be
Alhamadani (2011) service quality of from 260 randomly quality viz. reliability, generalized because the
commercial banks in selected customers responsiveness, empathy, sample is small and that
Jordan and its effect on from thirteen assurance and tangibles are too limited to customers
customer satisfaction on commercial banks of important antecedents of living in Irbid city
the basis of Jordan and analysed customer satisfaction (located north of
SERVQUAL model through multiple Jordan). Secondly, the
proposed by regression analysis study did not take into
Parasuraman et al., account the potential

57
 (1988) differences in
customers culture.
55. Uppal (2011) To examine the Nine banks viz. Findings revealed that Other aspects such as
performance of banks SBI, BOB, Canara performance of all banks corporate governance,
in terms of Bank, HDFC, under study is much better reforming capital
productivity and ICICI,UTI, in post e-banking period. structure need to be
profitability in pre and Citibank, Standard The performance of foreign covered in future
post e-banking period Chartered and banks is at the first position
HSBC have been followed by private and
selected on the public sector banks
basis of their
market share in
2003-04 and
analysed with the
help of various
ratios
56. Ashtiani and To examine factors A random sample of Results show positive word of This study is based on
Iranmanesh (2012) affecting adoption of 363 M.S. students in mouth and trust in bank having perceptions from only
electronic banking. Islamic Azad a direct effect while perceived students of an Islamic
University of Arak competence having an indirect University

58
 were obtained effect on electronic banking
through structured adoption
questionnaire and
analysed through
SEM technique
57. Hassan et al., To examine Data were collected Web site design, trust, Data has been collected
(2012) determinants that mainly from 120 internet security, product from customers of one
affect the customer banking users and diversification, credibility, particular region
service quality analyzed by applying collaboration, access and
perception of internet Chi-square test communication strongly affect
banking amongst the customer perception about
different age groups of the quality of internet banking
boths male and female services
58. Muhammad and To examine factors that Data were collected Perceived ease of use, Only adults were chosen
Rana (2012) are distressing the from 150 adult perceived usefulness, for the purpose of study
adoption of internet students of Saudi compatibility and
banking services among Arabia and analysed innovativeness and perceived
adult students in with the help of T-test credibility tend to influence
Kingdom of Saudi and correlation customers to adopt internet
Arabia banking whereas trialibility

59
 did not influence adoption of
internet banking

59. Wu et al., (2012) To examine perceived Quota sampling was The findings revealed that trust Data has been collected
usefulness and perceived used to collect data demonstrated a strong effect from respondents of
ease of use while from 465 customers on customers behavioural Taiwan only
incorporating relative from 31 domestic intention for both potential
advantage, website banks and 15 user group and user group.
quality, knowledge and questionnaires were Also apart from perceived
support, information administered to each usefulness and perceived ease
quality and trust as new bank. Multiple of use, relative advantage also
constructs in predicting regression analysis had a significant effect on
customers behavioural was used to represent customers behavioural
intention of using online the difference intention
banking between users and
potential users
behavioural intention
of using online
banking in Taiwan
60. Alam and Soni To study customer Data were collected There is a significant variation Customer satisfaction of

60
 (2012) satisfaction of internet from 250
bank in the level of satisfaction a particular bank is not
banking in Vadodara customers and among internet banking users analysed.
city of India analysed with the which depends upon
reliability, responsiveness,
help of ANOVA and
security, ease of use and
multiple regression
tangibles. Further they also
analysis claimed that satisfaction
comes from quick services,
affordable service charge,
easiness of depositing and
withdrawing money, ATM
booths, Account statement
over SMS/ e-mail services and
error free records

61. Ma (2012) To examine factors of Data were collected Privacy, reputation and price This study solicited
service quality that from 198 Chinese are the key factors that affect perceptions from only
influence customer customers and customer satisfaction in Chinese customers
satisfaction analysed through internet banking services
SEM
62. Zafar et al., (2012) Aims to explore Data has been Tangibility, reliability, This study is based upon
common constructs for gathered from 192 competence and conflict easy sampling

61
 quality of banking customers from handling are the constructs of processes, which
services which influence Rawalpindi/ service quality that generate prohibit general nature.
customer satisfaction Islamabad, Lahore customer satisfaction and A random probabilistic
and also to examine the and Karachi customer loyalty sampling method can
impact of customer conveniently and provide results that are
satisfaction on customer analysed by applying more accurate
loyalty in the context of AMOS and SEM
banking relationships
63. Kashyap and To examine the All SCBs have been Results show that More aspects should
Sharma (2012) performance of taken into performance of all banks be covered for future
scheduled commercial consideration with improved after the research
banks (SCBs) in terms division of period introduction of IT Act,
of labour productivity, between pre e- 1999, in terms of capital
branch productivity banking period deposits, branch
and profitability in pre (1991-1999) and productivity and Net profit
and post e-banking post e-banking
period period (2000-2009)
64. Kour (2012) To examine the Indian banking Findings indicate that IT Same methodology
impact of IT on industry is taken as along with other factors is may be used to study
branch productivity universe with improving the productivity the impact at

62
partially IT at an excellent rate and individual bank level
oriented banks and fully IT oriented banks are
fully IT oriented the most beneficiaries
banks. The analysis whereas partially IT
is done by dividing oriented banks though
the period into two proved increase in
viz pre e-banking productivity in the post e-
(1996-97 to 2000- banking period but still not
01) and post e- harmonized with fully IT
banking (2001-02 oriented banks
to 2006-07)

63
 References
Ahmad Ashfaq, Muhammad Bashir and Sultan Mubariz (2010). Impact of
customer satisfaction on performance of commercial banks in Pakistan.
Interdisciplinary Journal of Contemporary Research in Business, 2(8), 316-322.
Alam Mahtab and Ankita M. Soni (2012). Customer satisfaction of internet
banking and theory of big push: An analytical study with special reference to
selected customers in Vadodara city. Ninth AIMS International Conference on
management, 941-947.
Ashtiani Peyman Ghafori and Ali Iranmanesh (2012). New approach to study of
factors affecting adoption of electronic banking services with emphasis on the
role of positive word of mouth. African Journal of Business Management, 6(11),
4328-4335.
Auto Elisha Menson (2007). E-banking in Developing economy: Empirical
evidence from Nigeria. Journal of Applied Quantitative methods, 5(2), 212-222.
Azouzi Dhekra (2009). The extent of adoption of electronic banking in Tunisia.
Journal of Internet Banking and Commerce, 14(3), 8-11.
Bander A. Alsajjan and Charles Dennis (2006). The impact of trust on acceptance
of online banking. European Association of Education and Research in
Commercial Distribution, 5(2), 1-19.
Baskar S. and M Ramesh (2010). Linkage between online banking service quality
and customers. International Cross Industry Journal, 6(3), 45-51.
Chang Hsin Hsin and Mohammad Rizal Bin Abdul Hamid (2010). An empirical
investigation of internet banking in Taiwan. Global Journal of Business Research,
4(2), 39-47.
Dai Hua, Peter Haried and A.F.Salam (2011). Antecedents of online service
quality, commitment and loyalty. Journal of Computer Information Systems, 1(1),
1-11.
Dixit Neha and Saroj K. Datta (2010). Customers perception on internet banking
and their impact on customer satisfaction and loyalty: A study in Indian context.
Journal of Computing, 2(7), 131-145.
Eze Uchenna Cyril, Jeniffer Keru Manyeki, Ling Heng Yaw and Lee Chai Hor
(2011). Factors affecting internet banking adoption among young adults:
Evidence from Malaysia. International Conference on Social Science and
Humanity, 5(1), 377-381.
Flavian Carlos, Miquel Guinaliu and Eduardo Torres (2006). How bricks and
mortar attributes affect online banking adoption. International Journal of Bank
marketing, 24(6), 406-423.
Floh Arne and Horst Treiblmair (2006). What keeps the e-banking customer
loyal? A multigroup analysis of the moderating role of consumer characteristics

64
 on e-loyalty in the financial service industry. Journal of Electronic Commerce
Research, 7(2), 97-110.
Fock Siew Tong and Hian Chye Koh (2006). Conceptualization of trust and
commitment: Understanding the relationships between trust and commitment and
the willingness to try internet banking services. International Journal of Business
and Information, 1(2), 194-208.
Ganguli Shrishendu and Sanjit Kumar Roy (2010). Generic technology-based
service quality dimensions in banking: Impact on customer satisfaction and
loyalty. International Journal of Bank Marketing, 29(2), 168-189.
Guo Chiquan, Anand Kumar and Pornsit Jiraparn (2004). Customer satisfaction
and profitability: Is there a lagged effect. Journal of Strategic Marketing, 12(1),
129-144.
Hajri Al Salim and Arthur Tatnall (2007). A Comparative study of internet
banking in Oman and Australia. International Review of Business Research
Papers, 3(1), 36-43.
Hassan M. Taimoor, Aqeel Mukhtor, Rana Kaleem Ullah, Huzaifah Shafique and
Shafi Ur Rehma (2012). Customer service quality perception of internet banking.
International Journal of Learning and Development, 2(2), 86-100.
Haque Ahasunal, Arun Kumar Tarofder, Sabbir Rahman and Md. Abdur Raquib
(2009). Electronic transaction of internet banking and its perception of Malaysian
online customers. African Journal of Business Management, 3(6), 248-259.
Jham Vimi and Kaleem Mohd Khan (2005). Customer satisfaction and its impact
on performance in Banks: A proposed model. South Asian Journal of
Management, 16(2), 109-126.
Kaleem Ahmad and Saima Ahmad (2008). Bankers perception of electronic
banking in Pakistan. Journal of Internet Banking and Commerce, 13(1), 1-16.
Karim Akram Jalal and Allam M. Hamdan (2010). The impact of internet
technology on improving bank performance matrix: Jordanian banks as case
study. European, Mediterranean and Middle Eastern Conference on Information
Systems, 1-15.
Kasheir Dalia El, Ahmad S. Ashour and Omneya M. Yacout (2009). Factors
affecting continued usage of internet banking among Egyptian customers.
Communications of the IBIMA, 9(1), 252-263.
Kashyap Monika and Dinesh Kumar Sharma (2012). Internet banking: Boon or
Bane. Gian Jyoti e- Journal, 1(2), 1-16.
Khan Mohammad Sadique and Mahapatra (2009). Service quality evaluation in
internet banking: An empirical study in India. International Journal of Indian
Culture and Business Management, 2(1), 10-12.

65
 Khurana Sunayna (2009). Managing service quality: An empirical study on
internet banking. The IUP Journal of Marketing Management, 8(3&4), 96-113.
Kour Rimpi (2012). An impact of IT on branch productivity of Indian banking in
the era of transformation. Journal of Internet Banking and Commerce, 17(3), 1-
11.
Lee Ming Chang and Ing San Hwan (2005). Relationship among service quality
and profitability in the Taiwanese banking industry. International Journal of
Management, 22(4), 635-648.
Lee Gwo- Guang and Hsiu-Fen Lin (2005). Customers perception of e-service
quality in online shopping. International Journal of Retail and Distribution
Management, 33(2), 316-322.
Lin Grace T.R. and Chia-Chi Sun (2009). Factors influencing satisfaction and
loyalty in online shopping: An integrated model. Online Information Review,
33(3), 458-475.
Lichtenstein Sharman and Kirsty Williamson (2006). Understanding consumer
adoption of internet banking: An interpretive study in the Australian Banking
context. Journal of Electronic Commerce Research, 7(2), 50-66.
Li Dahui, Glenn J. Browne and James C. Wetherbe (2006). Why do internet users
stick with a specific website: A relationship perspective. International Journal of
Electronic Commerce, 10(4), 105-141.
Luarn Pin and Hsin- Hui Lin (2003). A customer loyalty model for e-service
context. Journal of Electronic Commerce Research, 4(4), 156-167.
Ma Zhengwei (2012). Factors affecting the customer satisfaction of internet
banking: An Empirical study in China. Journal of Convergence Information
Technology, 7(3), 101-109.
Malhotra Pooja and Balwinder Singh (2007). Current state of internet banking in
India and its implication for the Indian Banking industry. Eurasian Journal of
Business and Economics, 2(4), 43-62.
Musiime Andrew and Malinga Ramadhan (2011). Internet banking, consumer
adoption and customer satisfaction. African Journal of Marketing Management,
3(10), 261-269.
Mohammad Anber Abraheem Shlash and Shireen Yaseen Mohammad
Alhamadani (2011). Service quality perspectives and customer satisfaction in
commercial banks working in Jordan. Middle Eastern Finance and economics,
14(2), 60-72.
Muhammad Lakhi and Gule Rana (2012). Factors distressing internet banking
adoption among adult students: Evidence from kingdom of Saudi Arabia.
Business and Management Review, 2(1), 76-82.

66
 Muhammed Shaukat and Muhammed Zafarullah (2009). Impact of information
technology on organizational performance-An analysis of qualitative performance
indicators of Pakistans banking and manufacturing companies. European Journal
of Economic, Finance and Administrative Science, 12(1), 48-50.
Nupur Jannatul Mawa (2010). E-banking and customer satisfaction in
Bangladesh: An analysis. International Review of Business Research papers,
6(4), 145-156.
Oii Keng-Boon, Alain Yee Loong, Bishan Lin and Boon-in Tan (2010). Online
banking adoption: An empirical analysis. International Journal of Bank
Marketing, 28(4), 1-12.
Onay Ceylan and Emre Ozsoz (2007). The impact of internet banking on
profitability-A case of Turkey. Oxford Business and Economics Conference
Program, Available at ceylano@boun.edu.tr.
Opara C. Bright, Ayopoo Olotu and Darego W. Maclayton (2010). Analysis of
impact of technology on relationship marketing orientation and bank
performance. European Journal of Scientific Research, 45(3), 291-300.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1985). A conceptual
model of service quality and its implications for future research. Journal of
Marketing, 49(1), 41-50.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1988). SERVQUAL:
A multiple item scale for measuring consumer perceptions of service quality.
Journal of Retailing, 69(1), 12-40.
Qureshi Tahir Masood, Muhammad Khaqan Zafar and Muhammad Bashir Khan
(2008). Customer acceptance of online banking in developing economics. Journal
of Internet Banking and Commerce, 13(1), 5-9.
Ravichandran K.,K.Bhargavi and S.Arun Kumar (2010). Influence of service
quality on banking customers behavioural intentions. International Journal of
Economics and Finance, 2(4), 18-28.
Riquelme, Herman E, Khalid A., Mekkaui, Rose E. Rios (2009). Which customer
service and online attributes predict overall satisfaction? Journal of Internet
Banking and Commerce, 14(2), 20-23.
Siu Noel Yee-Man and Jeremy Chi-Who Mou (2005). Measuring service quality
in internet banking: The case of Hong Kong. Journal of International Consumer
Marketing, 17(4), 99-116.
Siam Ahmad Zokaria (2006). Role of the electronic banking services on the
profits of Jordanian banks. American Journal of Applied Sciences, 3(9), 1999-
2004.

67
 Singhal Divya and V. Padhmanabhan (2008). A study on customer perception
towards internet banking: Identifying major contributing factors. The Journal of
Nepalese Business Studies, 5(1)101-111.
Singh Jaspal and Gagandeep Kour (2011). Customer satisfaction and universal
banks: An empirical study. International Journal of Commerce and Management,
21(4), 327-348.
Tan Margaret and Thompson S.H. Teo (2000). Factors influences the adoption of
internet banking. Journal of the Association for Information systems. 1(5), 1-43.
Tot Huam Hon, Khalil Md Nor, Eng Tzu Wang, Khor Jia Hney, Lim Yik Ming
and Tan Li Yong (2008). Predictors of intention to continue using internet
banking services. International Journal of Business and Information, 3(2), 233-
244.
Tulani Dube, Chitura Tofara and Runyowa Langton (2009). Extent of adoption
and usage of internet banking by commercial banks in Zimbabwe. Journal of
Internet Banking and Commerce, 14(7), 10-14.
Uppal, R.K. (2011). E-Age technology-New face of Indian banking industry:
Emerging challenges and new potentials. Journal of Social and Development
Sciences, 1(3), 115-129.
Wong David H., Claire Loh, Kenneth B. Yap and Randell Bak (2009). To trust or
not to trust: The consumers dilemma with e-banking. Journal of Internet
Business, 6(2) 1-27.
Wong H. David, Nexhmi Rexha and Ian Phau (2008). Re-examining traditional
service quality in an e-banking era. International Journal of Bank Marketing, 26
(7), 526-545.
Wu Hsueh-Ying, Hsing-Yun Chang and Hsing- Hui Lin (2012). The difference
between users and potential users of using online banking. International
Conference on Innovation and Information Management, 36(2), 33-37.
Yaghoubi Nour Mohammad and Ebrahim Bahmani (2010). Factors affecting the
adoption of online banking: An integration of technology acceptance model and
theory of planned behaviour. Pakistan Journal of Social Sciences, 7(3), 231-236.
Yang Zhilin and Robin T. Peterson (2004). Customer perceived value, satisfaction
and loyalty: The role of switching costs, Psychology and Marketing, 21(10), 799-
822.
Yiu Chi Shing, Kevin Grant and David Edgar (2007). Factors affecting the
adoption of internet banking in Hong Kong-implications for the banking sector,
International Journal of Information Management, 27(1), 336-351.
Yoo Boonghee and Naveen Donthu (2001). Developing a scale to measure the
perceived quality of an internet shopping site (SITEQUAL). Quartely Journal of
Electronic Commerce, 2(1), 31-47.

68
 Zafar Mohsin, Sana Zafar, Aasia Asif, Ahmed Imran Hunjra and Mustaq Ahmad
(2012). Service quality, customer satisfaction and loyalty: An empirical analysis
of banking sector in Pakistan. Information Management and Business Review,
4(4), 159-167.

69
 Chapter 3
Research Design and
Methodology
 Chapter 3

Research Design and Methodology

Contents Page No

3.1 Nature and Scope of the Study 70

3.2 Hypothesis Formulation 70

3.3 Collection of Data 73

3.4 Generation of Scale Items 73

3.5 Data Collection Forms and Sample Design 74

3.6 Scale Purification 75

3.7 Statistical Tools Applied 76

3.8 Scale Validation 77

3.8.1 Confirmatory Factor Analysis 77

3.8.2 Structural Equation Model 77

3.9 Reliability 82

3.9.1 Internal Consistency Reliability 82

3.9.2 Construct/ Composite Reliability 82

3.9.3 Split Half Reliability 82

3.10 Validity Criterion 83

3.10.1 Face Validity 83

3.10.2 Construct Validity 83

3.10.3 Discriminant Validity 83

3.11 Limitations 83

References 85
 CHAPTER-3
RESEARCH DESIGN AND METHODOLOGY

The various aspects of research design and methodology viz. nature and scope of the
study, hypothesis formulated, data collection forms, sample design, statistical tools
used etc are summarised as under:-

3.1 Nature and Scope of the Study

The present study is both descriptive and evaluative in nature and examines the impact
of various factors that lead to customer satisfaction in internet banking. The study also
measures the impact of internet banking on performance of both public and private
sector banks operating in Jammu city. This study is based on data gathered from
managers and customers of banks operating in Jammu city. The research work will
provide useful insights to bankers, policy makers and researchers in framing policies
that can induce customers to use internet services in banking operations with both
satisfaction to them and gainful business to bankers.

3.2 Hypothesis Formulation

The most important aspect of customer satisfaction is its significant impact on the
repurchase intentions for a product or service. In fact satisfaction is a predictor of
commitment. Chiou (2004) found overall satisfaction of consumers for internet access
positively influencing their commitment. The existing literature particularly indicates a
positive relationship between satisfaction and commitment. Higher satisfaction with
regard to banking operations, including online banking, increases the attractiveness of
relationship to customers and hence their commitment to the relationship with the
banks (Morgan and Hunt, 1994). Thus, customers are more likely to resort to the same
website in the future, to resist in the face of competing alternatives and generate
positive word of mouth. Allagui and Temessek (2004) showed that the more customers
are satisfied with their experience with a provider of e-service, the more committed
they will be. Therefore, it is reasonable to predict that customers who are satisfied with
the internet banking make greater reuse. Thus, it is hypothesized that:-

H1: Customer satisfaction influences commitment in online banking.

70
The concept of trust has often been associated with the achievement of long-lasting and
profitable relationships (Anderson and Marus, 1990). Customer attitudes towards
internet banking are driven by trust, which plays an important role in increasing
usability within internet banking environment. The issue of trust is more important in
online as opposed to offline banking because transactions of this nature contain
sensitive information and parties involved in the financial transactions are concerned
about access to critical files and information transferred via the internet (Alsajjan and
Denis, 2006).Trust has been defined as the degree of confidence or certainty the
customers have in exchange option. It has been recognized as an important antecedent
in most models dealing with relationship that include loyalty and satisfaction as
dependent variables (Schaupp and Belanger, 2005). Razzaque and Boon (2003) for
instance, found a significant effect of trust on satisfaction in context of channel
relationship. We expect e-trust not only to have a direct impact on commitment but also
to have indirect influence through e-satisfaction. Thus, it is hypothesized that:-

H2: Trust in online banking positively affects customer satisfaction.

Both service quality and satisfaction are constructs resulting from the comparison of
expectations and performance. Kotler and Armstrong (2012) preach that satisfaction is
the post-purchase evaluation of products or services. The studies of Gilbert and
Veloutsou (2006), Sulieman (2011) and Buttle (1996) find service quality leading to
customer satisfaction. Whereas studies conducted by Han and Baek, 2004; Yang and
Fang, 2004 found service quality positively related to customer satisfaction in an online
environment. Intuitively, the more positive customer perception of online service
quality, the better their overall satisfaction with the bank which leads to greater
profitability of the banks (Gustafsson and Johnson, 2002; Rust, Moorman and Dickson,
2002). Further, to achieve a high level of customer satisfaction, most researchers
suggest that a high level of service quality should be delivered by the service provider
as service quality is normally considered as antecedent of customer satisfaction. As
service quality improves, the probability of customer satisfaction increases, which leads
to higher levels of customer loyalty and subsequently resulting in greater profitability
of the firm or bank. Thus, quality was one of the dimensions on which satisfaction was
based, satisfaction was also one potential influence on future quality perceptions

71
(Clames, 2008). Service quality is an important tool to measure customer satisfaction
(Hozlina, 2011). Thus, it is hypothesized that:

H3: Service quality of online banking positively affects customer satisfaction.

H4: Service quality of online banking influences profitability of banks.

Cooper (1997) found that ease of adoption is one of the important predictors that may
affect a customer intention. Perceived ease of use is defined as the degree to which an
individual believes that using computer or computerized system will be free from
physical and mental efforts (Davis, 1989). According to Teo (2001), if a system is easy
to use, it requires less effort on the part of users, thereby increasing the likelihood of
adoption and usage. Consult (2002) affirmed that drivers of growth in electronic
banking are determined by the perceived ease of use which is a combination of
convenience provided to those with easy internet access, the availability of secure, high
standard electronic banking functionality and the necessity of banking services, which
influence a customer intention to adopt that technology and improves job performance.
Moreover, bank managers also perceive that a technology if easy to use, could improve
their performance at work, which further improves their organisational performance
(Hajri, 2008). Thus, the following hypotheses were framed are:-

H5: Perceived ease of use positively affects behavioural intention to use online
banking.
H6: Perceived ease of use positively affects business performance.

Perceived usefulness is also an important antecedent of computer utilization (Davis et

al., 1989 and Igbaria Iivari, Morgann, 1995). Davis (1989) defined perceived usefulness
as the degree to which an individual believes that using the system will enhance his/her
job performance. It also suggests that using computers in work place would increase
users productivity, improves job performance and enhances job effectiveness and
usefulness. The importance of perceived usefulness has been widely recognized in the
field of electronic banking (Guriting and Ndubisi, 2006; Laforet and Li, 2005).
According to them, usefulness refers to the subjective probability that using the
technology would improve the way a user could complete a given task. Further, the
relationship between perceived usefulness and behavioural intention on online banking
72
is based on theoretical argument (Wang et al., 2003 and Guriting and Ndubisi, 2006).
Wang et al., 2003 found a positive effect on behavioural intention to use online banking
whereas Guriting and Ndubisi (2006) found perceived usefulness significantly
determining behavioural intention to use online banking. Thus, the next hypotheses
are:-

H7: Perceived usefulness positively affects behavioural intention to use online banking.
H8: Perceived usefulness positively affects business performance.

3.3 Collection of Data

Both primary and secondary sources, relevant for gathering requisite information
pertaining to the research problem in hand, have been used in the study. First hand
information has been collected through well structured schedule from bank managers,
144 (Annexure 1) and from bank customers, 410 (Annexure 2). The secondary data
have been gathered from books and journals viz. Journal of Internet Banking and
Commerce, Journal of Banking and Finance, International Journal of Bank Marketing,
E-service Journal, Journal of Marketing, etc. Further, to measure bank performance,
various annual reports of bank and statistical tables issued by RBI have been studied for
acquiring the relevant information.

3.4 Generation of scale items

The process of generating scale items was finalised after reviewing the existing
literature and detailed discussion with subject experts. Two schedules were constructed
for collecting the requisite information from the respondents. The schedule for data
from bank managers consisted of nine sections viz. general information, peripheral
services provided by their respective banks, trust (19 statements), commitment (20
statements), service quality (20 statements), perceived ease of use (6 statements),
perceived usefulness (8 statements), customer satisfaction (19 statements) and profit
emphasis (8 statements). The schedule for data from customers also consisted of nine
sections viz. general information, peripheral services that customers avail from their
banks, trust (20 statements), commitment (7 statements), service quality (25
statements), perceived ease of use (10 statements), perceived usefulness (11
statements), behavioural intention (6 statements) and lastly customer satisfaction (20
statements). Following literature has been reviewed for generation of scale items:-
73
 3.1:Generation of Scale Items in the Schedule I for Data from Bank Managers
Trust and Commitment The items relating to trust were taken from Crosby,
Evans and Cowles, 1990; Wong et al., 2009 etc. While
items pertaining to commitment were taken from
Anderson and Weitz, 1992; Morgan and Hunt, 1994 etc
Service Quality The items relating to service quality have been gathered
from the literature like Sang Lin Han and Seung Baek,
2004; Parasuraman et al., 1985; Parasuraman et al., 1988;
Yang and Peterson, 2004; Lee and Lin, 2005 etc.

Perceived Ease of Use The items relating to these constructs were gathered from
and Perceived Adam et al., 1992; Venkatesh and Davis, 1996 etc.
Usefulness
Customer Satisfaction The items of customer satisfaction were taken from
Fornell, 1992; Singh and Komal, 2009; Floh and
Freiblmair, 2006; Fock and Koh, 2006 etc.

Profit Emphasis The items of profit emphasis to measure business

performance of banks were gathered from Deng and
Dart, 1992; Narver and Slaver, 1990; Lee and Hwan,
2005.

3.2:Generation of Scale Items in the Schedule II for Data from Customers

Trust and Mc Knight et al., 2000; Pavlou, 2003, Suh and Han, 2003
Commitment etc.
Service Quality Chinh et al., 2008; Yang et al., 2004, Khan and
Mahapatra, 2009 etc.
Behavioural Zeng et al., 2009; Cheng et al., 2006; Khurana, 2009; Iman
Intention, Perceived et al., 2006 etc.
Ease of Use and
Perceived Usefulness
Customer Satisfaction Zeng et al., 2009; Minjoon et al., 2003; Wang et al., 2001
etc.

3.5 Data Collection Forms and Sample Design

The required information pertaining to internet banking was gathered from various
bank managers and customers residing in Jammu city through specifically developed
schedules (Annexure 1&2). Census method was used to collect responses from the
selected bank managers. In total 173 branch and loans and advances managers of
various public and private sector banks operating in Jammu city were contacted, out of
whom 144 responded properly. In order to finalise the initial schedule and to determine
appropriate sample size of customers, a pilot survey was conducted in June 2010, on 30
internet banking customers residing in Channi Himmat Colony of Jammu city. For
74
selection of final sample, a list of households was obtained from the office of J&K
Housing Board, which consisted of approximately 3218 households. The mean value
(4.07) and variance (0.515) in the population values arrived from the results of
pretesting were used to determine the final sample size with the help of following
formula:
N= (square of standard deviation) (square of Z)/Square of D
Here value of Z=1.96, where confidence level is 95%
D=+- 0.05 (Level of Precision)
Therefore n= square of 0.51538 square of 1.96/ square of 0.05
= 0.2656165 3.8416/ 0.0025
= 408
This resulted in determining the minimum sample size required for the study (Burns
and Ronald, 2006), which came to be 408 and then rounded off to 410. These 410
respondents were selected from list of J&K Housing Board, Jammu through systematic
random sampling technique. The first house was selected purely on random basis and
thereafter every 8th house was picked up for the collection of required data. One of the
family members from each house selected, who had done maximum online banking
transactions, was requested to supply information through the aforesaid schedule.

3.6 Scale Purification

The multivariate data reduction technique of factor analysis has been used with the help
of 17.0 version of SPSS, which is most appropriate for the present study, as it involves
the study of interrelationships among variables in an effort to find a new set of
variables fewer in number than the original ones (Stewart, 1981). The study used
principal component analysis with a varimax rotation, for obtaining scores on a larger
set of measured variables and reducing them to scores on a smaller set of composite
variables that retain maximum information from original variables (Fabrigar et al.,
1995). Varimax rotation method has been used as it is among the best and most
commonly used orthogonal rotation procedures (Stewart, 1981). Further, there exists an
interaction effect between sample size, level of communalities and degree of over
determinedness of factors, such that when factors are highly over determined and
communalities are high (above .60), sample size has less impact on quality of results
(Tucker et al., 1969). Thus, when communalities are low, the role of sample size and
over determination becomes more important (MacCallum et al., 1999). Therefore,
75
present study aimed at reducing the number of variables by focussing on high
communalities and on high reliabilities (Fabrigar et al., 1995). For describing the
underlying factor structure, the eigen value equal to or more than one criterion has been
used to determine the number of components to be extracted for further analysis
(Stewart, 1981). The test of appropriateness of factor analysis has been verified
through KMO measure of sampling adequacy, where value greater than 0.50 is
acceptable, between 0.50 to 0.70 is mediocre and 0.70 to 0.80 is good, 0.80 to 0.90 is
great and above 0.90 is superb (Malhotra, 2007), which indicates its relevance for
further analysis. Further, Bartlett Test of Sphericity, which is also known as zero
identity matrix, has been used to determine correlation among the variables (Hair et al.,
1995, p.374).

3.7 Statistical Tools Applied

The information obtained through the schedule has been processed and suitably
analyzed in order to bring out precise results with the help of appropriate tools. The
analysis has been carried out with the help of mean, standard deviation, and frequency
distribution. Mean has been used in order to know the value of each observation.
Further, standard deviation has been analysed to work out the amount of variations in
the respondents views (Beri, 2008, p.223). The frequency distribution provides much
more concise portrayal of the data (Tull and Hawkin, 1993). Simple Regression has
been used to find out the impact of various independent variables on dependent
variables. ANOVA has been used to examine differences between three or more
variables (Malhotra, 2007). Confirmatory Factor Analysis has been used for scale
validation. For testing the hypotheses, Regression analysis and SEM have been used.
Validity of scale has been established through content, convergent and discriminant
validity. The scores obtained through Likert scale were classified into three groups,
viz., below average (1-2), average (3), and above average (4-5) to make
interpretation more lucid (Churchill, 1988, p.325). The reliability and the internal
consistency of data collected have been judged through tests like the split half and
Cronbachs alpha values.

76
3.8 Scale Validation
3.8.1 Confirmatory Factor Analysis
Confirmatory factor analysis (CFA) is a statistical technique used to verify the factor
structure of a set of observed variables. CFA allows the researcher to test the
hypothesis that a relationship between observed variables and their underlying latent
constructs exists. After purifying the scale items using EFA and reliability analysis, the
final factors that emerged from EFA were confirmed through CFA. To further refine all
measures for CFA analysis, measurement models were estimated using maximum
likelihood estimation (AMOS). It is a way of testing how well measured variables
represent a smaller number of constructs. In CFA no distinction is made between
exogenous and endogenous constructs, hence it is an interdependence technique like
EFA. CFA is different from exploratory factor analysis, as in EFA all measured
variables are related to every factor by a factor loading estimate. However in CFA,
researcher has to assign variables to each factor on the basis of preconceived theory.
The following measures have been used to assess the fit between the obtained solution
and the assumed model Root Mean Square Error of Approximation (RMSEA),
Adjusted Goodness of Fit Index (AGFI), Comparative Fit Index (CFI), Normed Fit
Index (NFI) and Chi-Square (2) /degrees of freedom (df).

3.8.2 Structural Equation Modelling

Exploratory Factor Analysis (EFA) explores the data and provides the researcher with
the information about how many factors are needed to best represent the data. Thus, in
EFA factors are derived from statistical results, not from theory. While Confirmatory
factor Analysis (CFA) is used to provide a confirmatory test to our measurement
theory, where researcher has prior information of the factor loadings representing the
actual data (Hair et al., 2009). SEM model often involves both a measurement theory
and a structural theory.
SEM has become one of the most widely applied data analytic techniques in the
business research because of its ability to assess simultaneously the fit of the
measurement models and the structural model. Where measurement models test
relationships (i.e., paths) between the measured (manifest) variables and the construct,
i.e., latent variables; structural model specifies relationships between latent variables of
interest (composite measures). One of the major benefits of using SEM technique is
that it allows concurrent assessment of both reliability and validity by applying CFA.
77
Moreover, it can handle various kinds of relationships where an independent variable in
one relationship becomes a dependent model in other relationships. Thus, it can be
concluded that SEM is a more appropriate technique as compared to Factor Analysis
and Regression Analysis.

Goodness of Fit Indices

Goodness of fit refers to the ability of a model to reproduce the data (usually the
variance covariance matrix). A good fitting model is one that is reasonably consistent
with the data and so does not require re-specification. In addition, a good fit
measurement model is required before interpreting the casual paths of the structural
model.
Parameter estimates must be carefully examined to determine if one has a good model
estimates, it should have good fitting model too. Also it is important to realize that one
might obtain a good fitting model, yet it is still possible to improve the model and
remove specification error. Measurement models validity depends on the goodness of
fit (GOF) of the model. GOF indicates how well the specified model reproduces the
covariance matrix among the indicators items (i.e., similarity of observed and estimated
covariance matrix). The model fit compares theory to reality as represented by the data.
If the proposed theory is perfect, the estimated covariance matrix would be the same,
thus the closer the values of these two matrices, the better the model is said to fit. GOF
can be measured in following ways:

Absolute Fit Measures

Absolute fit indices determine how well a priori model fits the sample data and
demonstrate which proposed model has the most superior fit. These measures provide
the most fundamental indication of how well the proposed theory fits the data. Unlike
incremental fit indices, their calculation does not rely on comparison with a baseline
model but is instead a measure of how well the model fits in comparison to no model at
all (Joreskog & Sorbom, 1993). Included in this category are the Chi-Square test,
RMSEA, GFI, AGFI, RMR and SRMR.

78
Chi-square statistics ( 2)
The Chi-Square value is the traditional measure for evaluating overall model fit and
assesses the magnitude of discrepancy between the sample and fitted covariance
matrices (Hu and Bentler, 1999). A good model fit would provide an insignificant
result at a 0.05 threshold (Barrett, 2007), thus the Chi-Square statistic is often referred
to as either a badness of fit or a lack of fit measure. Chi-square statistics is the
fundamental measures used in SEM to quantify the differences between the observed
and the estimated covariance matrices. A large value of chi-square relative to the
degrees of freedom signifies that the observed and estimated matrices differ
considerably. Statistical significance levels indicate the probability that these
differences are solely due to sampling variations. Thus, the p-value of chi-square test
should be large, indicating no statistical differences between the matrices. While the
Chi-squared test retains its popularity as a fit statistic, there exists a number of severe
limitations in its use. First, this test assumes multivariate normality and severe
deviations from normality may result in model rejections even when the model is
properly specified. Second, because the Chi-square statistic is in essence a statistical
significance test it is sensitive to sample size, which means that the Chi-square statistic
nearly always rejects the model when large samples are used (Bentler & Bonnet, 1980;
Joreskog & Sorbom, 1993). On the other hand, where small samples are used, the Chi-
Square statistic lacks power and because of this may not discriminate between good
fitting models and poor fitting models (Kenny & McCoach, 2003).

Goodness-of-fit Index (GFI)

The Goodness-of-Fit statistic (GFI) was created by Joreskog & Sorbom (1993) as an
alternative to the Chi-Square test. It calculates the proportion of variance that is
accounted for by the estimated population covariance. By looking at the variances and
covariances accounted for by the model it shows how closely the model comes to
replicating the observed covariance matrix (Diamantopoulos & Siguaw, 2000). This
statistic ranges from 0 to 1. When there are a large number of degrees of freedom in
comparison to sample size, the GFI has a downward bias. In addition, it has also been
found that the GFI increases as the number of parameters increases (MacCallum et al.,
1999) and also has an upward bias with large samples (Miles & Shevlin, 1998).
Traditionally an omnibus cut-off point of 0.90 has been recommended for the GFI.

79
However, simulation studies have shown that when factor loadings and sample sizes
are low a higher cut-off of 0.95 is more appropriate (Miles and Shevlin, 1998).

Adjusted GFI (AGFI)

Related to the GFI is the AGFI, which adjusts the GFI based upon degrees of freedom,
with more saturated models reducing fit. Thus, more parsimonious models are preferred
while penalized for complicated models. In addition to this, AGFI tends to increase
with sample size. As with the GFI, values for the AGFI also range between 0 and 1 and
generally the values of 0.90 or greater indicate well fitting models.

Root mean square residual (RMR) and standardized root mean square residual
(SRMR)
The RMR and the SRMR are the square root of the difference between the residuals of
the sample covariance matrix and the hypothesized covariance model. The range of the
RMR is calculated based upon the scales of each indicator. Therefore, if a questionnaire
contains items with varying levels (some items may range from 1-5 while others range
from 1-7) the RMR becomes difficult to interpret. The standardized RMR (SRMR)
resolves this problem and is therefore much more meaningful to interpret. Values for
the SRMR range from 0 to 1.0 with well fitting models obtaining values less than .05
(Byrne, 1998; Diamantopoulos and Siguaw, 2000), however values as high as 0.08 are
deemed acceptable (Hu and Bentler, 1999). An SRMR of 0 indicates perfect fit but it
must be noted that SRMR will be lower when there is a high number of parameters in
the model and in models based on large sample sizes.

Root Mean Square Error of Approximation (RMSEA)

The RMSEA was first developed by Steiger (1990). The RMSEA tells us how well the
model, with unknown but optimally chosen parameter estimates would fit the
population covariance matrix (Byrne, 1998). In recent years it has become as one of
the most informative fit indices (Diamantopoulos and Siguaw, 2000).
Recommendations for reducing RMSEA cut-off points have been made in the last
fifteen years. Until the early nineties, a RMSEA in the range of 0.05 to 0.10 was
considered an indication of fair fit and values above 0.10 indicated poor fit (MacCallum
et al., 1999). It was then thought that a RMSEA between 0.08 to 0.10 provides a
mediocre fit and below 0.08 shows a good fit (MacCallum et al., 1999). However, more
80
recently, a cut off value close to 0.06 (Hu and Bentler, 1999) or a stringent upper limit
of 0.07 seems to be the general consensus amongst authorities in this area. One of the
greatest advantages of the RMSEA is its ability for a confidence interval to be
calculated around its value (MacCallum et al., 1999). This is possible due to the known
distribution values of the statistic and subsequently allows for the null hypothesis (poor
fit) to be tested more precisely (McQuitty, 2004). It is generally reported in conjunction
with the RMSEA and in a well-fitting model the lower limit is close to 0 while the
upper limit should be less than 0.08.

Incremental Fit Indices:

It is also known as comparative or relative fit indices (McDonald & Ho, 2002). These
are a group of indices that do not use the chi square in its raw form but compare the chi
square value to a baseline model.

Normed Fit Index (NFI)

This statistic assesses the model by comparing the 2 value of the model to the 2 of
the null model. The null/independence model is the worst case scenario as it specifies
that all measured variables are uncorrelated. Values for this statistic range between 0
and 1 with Bentler & Bonnet (1980) recommending values greater than 0.90 indicating
a good fit. More recent suggestions state that the cut off criteria should be NFI .95
(Hu & Bentler, 1999). A major drawback to this index is that it is sensitive to sample
size, underestimating fit for samples less than 200 (Mulaik et al., 1989), and is thus not
recommended to be solely relied on (K.Line, 2005). This problem was rectified by the
Non-Normed Fit Index (NNFI, also known as the Tucker-Lewis index), an index that
prefers simpler models. However in situations where small samples are used, the value
of the NNFI can indicate poor fit despite other statistics pointing towards good fit
(K.Line, 2005; Tabachnick and Fidell, 2007). However, Hu and Bentler (1999) have
suggested NNFI 0.95 as the threshold.

Comparative Fit Index (CFI)

The Comparative Fit Index (CFI) is a revised form of the NFI which takes into account
sample size (Byrne, 1998) that performs well even when sample size is small
(Tabachnick and Fidell, 2007). Like the NFI, this statistic assumes that all latent

81
variables are uncorrelated (null/independence model) and compares the sample
covariance matrix with this null model. As with the NFI, values for this statistic range
between 0.0 and 1.0 with values closer to 1.0 indicating good fit. A cut-off criterion of
CFI 0.90 was initially advanced. However, recent studies have shown that a value
greater than 0.90 is needed in order to ensure that misspecified models are not accepted
(Hu & Bentler, 1999). From this, a value of CFI 0.95 is presently recognized as
indicative of good fit (Hu & Bentler, 1999). Today this index is included in all SEM
programmes and is one of the most popularly reported fit indices due to being one of
the measures least affected by sample size.

3.9 Reliability
3.9.1 Internal consistency reliability: It refers to the extent to which items inter
correlate with one another. Internal consistency implies that multiple items measure the
same construct, and inter correlate with one another. In contrast, low inter-item
correlations indicate that some items are not drawn from the appropriate domain and
produce unreliability (Churchill, 1979). The commonly accepted measure of internal
consistency reliability is Cronbachs coefficient alpha. The value of an alpha of 0.60 is
the minimum acceptable standard for demonstrating internal consistency (Gerrard and
Cunningham, 2004).
3.9.2 Construct/composite reliability: It is the measure of reliability and internal
consistency of the measured variables representing latent construct. It is computed from
the squared sum of factor loadings for constructs and the sum of the error terms for a
construct (Hair et al., 2009).
CR= (Sum of standardized loadings)2/ (Sum of standardized loading) 2 + Sum of error
terms.
The rule of thumb for CR is .70 or higher (Fornell and Larcker, 1981).
3.9.3 Split- Half reliability: A measure of consistency where data is split in two equal
halves and the scores for each half of the test is compared with one another to examine
if the variation in both the halves is within the range of sampling error (Tull and
Hawkins, 1993, p.316).

82
3.10 Validity Criterion
3.10.1 Face /content validity: The content/face validity of the construct was assessed
through review of literature and discussions with the subject experts, and managers of
different banks.
3.10.2 Construct validity: It is the extent to which a set of measured items accurately
reflects the theoretical latent construct. It deals with the accuracy of measurement,
evidence of which provides confidence that the items measured from the sample
represent the actual true score that exists in the population.
3.10.2.1 Convergent validity: Convergent validity refers to the extent to which the
measures correlate with other measures that were designed to measure the same thing.
High correlations indicate that the scale is measuring its concept (Hair et al., 2009). It
can be measured in the following ways:-
3.10.2.1 a Factor loadings: High factor loadings i.e., above 0.50 or ideally 0.70 or
higher, indicate level of convergence.
3.10.2.1 b Variance extracted: In CFA, the average percentage of variance extracted
(VE) is a summary indicator of convergence. AVE is calculated by using
standardized loadings, which as under:
AVE = Sum of Squared Standardised Factor Loadings / Number of Items
If AVE comes above 0.50, convergent validity gets established.

3.10.3 Discriminant Validity: Discriminant validity refers to the extent to which the
measures differ from other measures designed to measure different concepts. It can be
examined through the evaluation of the Variance extracted (VE). Fornell and Larcker
(1981) highlighted the importance of evaluating the discriminant validity of the
construct used in the research. They suggested that the variance extracted for each
construct should be greater than squared correlations between constructs.

3.11 Limitations
All the possible efforts have been made to maintain objectivity, validity and reliability
of the study, yet certain limitations do exist which could not be ignored and are
required to be kept in mind whenever its findings are considered for policy formulation
or for future study. These are as follows:-
1. The data collected pertain only to four public and three private sector banks
operating in Jammu city.
83
2. The study has measured perceptions of bank managers and customers about
internet banking which might have been guided by their likes and dislikes.
3. Due to privacy involved in banking transactions, bank managers might have
hesitated to share correct information about their banks operations. This has
also led to the element of subjectivity in their responses.
4. Due to non availability of foreign banks in Jammu city, no information could be
gathered regarding their online operations.
5. Due to larger number of variables involved in measuring the impact of internet
banking, some variables got missed out such as perceived benefits, perceived
credibility, and loyalty as a whole.

84
 References
Adams, D.A., R.R, Nelson & P.A. Todd (1992). Perceived Usefulness, Ease of
Use, and usage of Information Technology: A Replication. MIS Quaterly, 16(2),
227-247.
Allagui, A. & Temessek, A. (2004). LaFidelite des Utilisateurs des Services dun
Portail Internet: Proposition et Test dun Modele Integrateur. C.R.G.N.A, IAE de
Nantes.
Alsajjan, B. and Dennis, C. (2006). The Impact of trust on acceptance of online
banking. European Association of Education and Research in Commercial
Distribution, 27-30 June 2006 Brunel University West London, United
Kingdom.
Anderson, E and Weitz, B. (1992). The use of pledges to build and sustain
commitment in distribution channels. Journal of Marketing Research, 29(1), 18-
34.
Anderson, J.C. and Marus, J.A. (1990). A model of distribution firm and
manufacturer firm working partnerships. Journal of Marketing, 54(1), 42-58.
Barrett, P. (2007). Structural equation modeling: Adjudging model fit. Personality
and Individual Differences, 42(5), 815-24.
Bentler, P. M. & Bonnet, D. C. (1980). Significance tests and goodness of fit in
the analysis of covariance structures. Psychological Bulletin, 88(3), 588-606.
Beri, G.C. (2008). Marketing Research, New Delhi: Tata McGraw Hill Company
Limited.
Burns, Alvin C.; Bush, Ronald F. (2006). Marketing Research- An applied
orientation, New Delhi. Pearson Boston.
Buttle F (1996). SERVQUAL: Review, Critique, Research Agenda. European
Journal of Marketing, 30 (1), 8 32.
Byrne, Barbara (1998). Structural equation modelling with LISREL, PRELIS and
SIMPLISA: Basic applications and programs, Lawrence Erlbaum. New Jersey.
Cheng T.C. Edwin, David Y.C. Lam and Andy C.L. Yeung (2006). Adoption of
internet banking: An empirical study in Hong Kong. Decision support System,
42(3), 1558-1572.
Chinh Vu Thi My and Nguyen Viet Anh (2008). Measuring customer satisfaction
based on service quality gap at a local bank in Vietnam. Journal of International
Business Research, 7(3), 28-51.
Chiou, J. S. (2004). The Antecedent of Consumers loyalty toward internet
service providers. Information & Management, 41(2), 685-695.
Churchill, Gilbert A. (1988). Basic Marketing Research, Florida: The Oryden
Press.

85
 Churchill, Gilbert A., Jr (1979). A paradigm for developing better measures of
marketing constructs. Journal of Marketing Research, 16(1), 64-73.
Clames, M.D. (2008). An empirical analysis of customer satisfaction in
international air travel. Innovative Marketing, 4(1), 49-62.
Consult, A.N. (2002). China Online Banking Study. Available:
http://estore.chinaonline. com/chinonlbanstu.html.
Cooper,R .G.(1997). Examining some myths about new product winners,
In Katz, R.(ed). Journal of internet banking and commerce, 5(1), 550-560.
Crosby Lawrence A., Kenneth R. Evans and Deborah Cowles (1990).
Relationship quality in service selling: An interpersonal influence perspective.
Journal of Marketing, 54(4), 68-81.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use and user
acceptance of information technology. MIS Quartely, 13(3), 319-340.
Davis, F.D., Bagozzi, R.P. and Warshaw, P.R. (1989). User acceptance of
computer technology: A comparison of two theoretical models. Management
Science, 35(8), 9821003.
Deng and Dart (1992). Measuring market orientation: A multi factor,
multi item approach. Journal of marketing management, 10(1), 725-742.
Diamantopoulos, A., & Siguaw, J. A. (2000). Introducing LISREL, London: Sage
Publications.
Fabrigar, Leandre R., Wegener, Dueane T., MacCallum Robert C., and Strahan
Erin J. (1995). Evaluating the use of exploratory factor analysis in psychological
research. Psychological Methods, 4(1), 272-299.
Floh Arne and Horst Freiblmair (2006). What keeps the e-banking customer
loyal? A multigroup analysis of the moderating role of consumer characteristics
on e-loyalty in the financial service industry. Journal of Electronic Commerce
Research, 7(2), 97-110.
Fock Siew Tong and Hian Chye Koh (2006). Conceptualization of trust and
commitment: Understanding the relationships between trust and commitment and
the willingness to try internet banking services. International Journal of Business
and Information, 1(2), 194-208.
Fornell, Claes and David F. Larcker (1981). Evaluating structural equation
models with unobservable variables and measurement error. Journal of
marketing, 18(2), 39-50.
Fornell, Claes (1992). A national customer satisfaction barometer: The Swadeshi
Experience. Journal of Marketing, 56 (1), 6-21.
Gerrard, Philip and J. Barton Cunningham (2004). Consumer switching behaviour
in the Asian Banking Market. Journal of Services Marketing, 18(3), 215-223.

86
 Gilbert GR, Veloutsou C (2006). A cross-industry comparison of customer
satisfaction. The Journal of Services Marketing, 20(5), 298-308.
Guriting, P; and Ndubisi N.O. (2006). Borneo online banking: Evaluating
customer perceptions and behavioural intention. Management Research
News, 29(2), 6-15.
Gustafsson, Anders and Michael D. Johnson (2002). Measuring and managing the
satisfaction-loyalty-performance links at Volvo. Journal of Targeting,
Measurement and Analysis for Marketing, 10(3), 249-258.
Hair, Joseph F., Rolph E. Aderson, Ronald L. Tathan, and William C.Black
(1995). Multivariate Data Analysis, New Jeresy: Prentice Hall Inc.
Hair, Joseph F., William C. Black, Barry J.Babin , Rolph E. Anderson, and
Ronald L. Tatham (2009). Multivariate Data Analysis, 6th ed. New Delhi:
Prentice Hall.
Hajri Al Salim (2008). The adoption of e-banking: The case of Omani banks.
International Review of Business Research Papers, 4(5), 120-128.
Han, S. and Baek, S. (2004). Antecedents and consequences of service quality in
online banking: An application of the SERVQUAL instrument. Advances in
Consumer Research, 31(1), 208-14.
Hozlina (2011). Impacts of service quality on customer satisfaction: Study of
Online banking and ATM services in Malaysia. International Journal of Trade
and Economics, 2(1), 242-258.
Hu and Bentler (1999). Cut off criteria for fit indexes in covariance structure
analysis: Conventional criteria versus new alternatives. Structural Equation
Modelling, 6(1), 1-55.
Igbaria, M.; Iivari, J.; and Maragahh, H. (1995). Why do individuals use computer
technology? A Finnish case study. Information & Management, 29(1), 227-238.
Iman Akour, kaled Alshare, Donald Miller and Musa Dwairi (2006). An
exploratory analysis of culture, perceived ease of use, perceived usefulness and
internet acceptance: The case of Jordan. Journal of Internet Commerce, 5(3), 83-
108.
Joreskog K. And Sarbom D., (1993). Lisrel structural equation modelling with
SIMPLIS command language. Chicago, IL: Scientific software international Inc.
Kenny, D.A. & McCoach, D. B. (2003). Effect of the number of variables on
measures of fit in structural equation modeling. Structural Equation Modeling,
10(3), 333-351.
Khan Mohammad Sadique and Siba Sankar Mahapatra (2009). Service quality
evaluation in internet banking: An empirical study in India. International Journal
of Indian Culture and Business management, 2(1), 30-46.

87
 Khurana Sunayna (2009). Managing service quality: An empirical study on
internet banking. The IUP Journal of Marketing Management, 8(3&4), 96-114.
Kline, R. B. (2005). Principles and practice of structural equation modeling (2nd
ed.). New York: The Guilford Press
Kotler P, Armstrong G (2012). Principles of Marketing, 14th Edition, New Jersy,
USA. Pearson Education Inc.
Laforet S, Li X (2005). Consumers attitudes towards online and mobile banking
in China. International Journal of Bank Marketing, 23(5), 362-380.
Lee Gwo- Guang and Hsiu-Fen Lin (2005). Customers perception of e-service
quality in online shopping. International Journal of Retail and Distribution
Management, 33(2), 316-322.
Lee Ming Chang and Ing San Hwan (2005). Relationship among service quality
and profitability in the Taiwanese banking industry. International Journal of
Management, 22(4), 635-648.
MacCallum, R. C., Browne, M. W., & Saugawara, H. M. (1999). Power analysis
and determination of sample size for covaniance structure modeling.
Psychological Methods, 1(2), 130-49.
Malhotra, Naresh K. (2007). Marketing Research- An Applied Orientation. New
Delhi: Pearson Education.
Mc Knight, D.H., Choudhury, V., Kacmar, C. (2000). Developing and validating
trust measures for e-commerce: An integrative typology. Information Systems
Research, 13(3), 334-359.
McDonald, R. P., & Ho, H. R. (2002). Principles and practices in reporting
statistical equation analysis. Psychological Methods, 7(1), 64-82.
Mcquitty, S. (2004). Statistical power and structural equation models in business
research. Journal of Business Research, 57(2), 175-83.
Miles, J. & Shevlin, M. (1998). Effect of sample size, model specification and
factor loadings on the GFI in confirmatory factor analysis. Personality and
Individual Differences, 25(7), 85-90.
Minjoon Jun, Zhilin Yang and Daesoo Kim (2003). Customers perception of
online retailing service quality and their satisfaction. International Journal of
Quality and Reliability Management, 21(8), 817-840.
Morgan, R.M and Hunt S.D. (1994). The commitment trust theory of
relationship marketing. Journal of marketing, 58(3), 2038.
Mulaik S.A., James L.R., Van Alstine, J. Bennet, N.Lind, S. and Stilwell, C.D.
(1989). Evaluation of goodness of fit indices for structural equation models.
Psychological Bulletin, 105(3), 430-45.

88
 Narver, J.C. and Slaver, S.F. (1990). The effect of a market orientation on
business profitability. Journal of Marketing, 54 (4), 20-34.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1985). A conceptual
model of service quality and its implications for future research. Journal of
Marketing, 49(1), 41-50.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1988). SERVQUAL:
A multiple item scale for measuring consumer perceptions of service quality.
Journal of Retailing, 69(1), 12-40.
Pavlou, P.A. (2003). Consumer acceptance of electronic commerce: Integrating
trust and risk with the technology acceptance model. International Journal of
Electronic Commerce, 7(3), 101-134.
Razzaque, M. A. and Boon, T. G. (2003). Effects of dependence and trust on
channel satisfaction, commitment and cooperation. Journal of Business-to-
Business Marketing, 10(4), 23-48.
Rust T. Roland, Christine Moorman and Peter R. Dickson (2002). Getting return
on quality: Revenue expansion, cost reduction or both?. Journal of Marketing, 66
(1), 7-24.
Sang Lin Han and Seung Baek (2004). Antecedents and consequences of service
quality in online banking: An application of the SERVQUAL instrument.
Advances in Consumer Research, 31(1), 208-214.
Schaupp, L.C. and Blanger, F. (2005). A conjoint analysis of on-line consumer
Satisfaction. Journal of Electronic Commerce Research, 6(2), 95-111.
Singh Sultan and M.S. Komal (2009). Impact of ATM on customer satisfaction in
three major banks, SBI, ICICI and HDFC. Business Intelligence Journal, 2(2),
38-44.
Steiger, J. H. (1990). Structural model- Evaluation and modification. Multivariate
Behavioral Research, 25, 214-221.
Steiger, J. H. (2007). Understanding the limitations of global fit assessment in
structural equation modeling. Personality and Individual Differences, 42(5), 893-
98.
Stewart, D.W. (1981). The application and misapplication of factor analysis in
marketing research. Journal of Marketing Research, 18(2), 51-62.
Suh, B., and Han, I. (2003). The impact of customer trust and perception of
security control on the acceptance of electronic commerce. International Journal
of Electronic Commerce, 7(3), 135-161.
Sulieman (2011). Banking Service Quality Provided by Commercial Banks and
Customer Satisfaction. American Journal of Scientific Research, 27(1), 68-83.

89
 Tabachnick, B. G. & Fidell, L. S. (2007). Using Multivariate Statistics, (5th ed.).
New York: Allyn and Bacon
Teo,T.S.H (2001). Demographic and motivational variables associated with
internet usage activities. Internet Research: Electronic Networking Applications
and Policy, 11(2), 125-137.
Tucker, L.R. ,R.F. Koopman and R.L. Linn (1969). Evaluation of factor analytic
research procedures by means of simulated correlation matrices. Psychometrika,
34(4), 421-459.
Tull, Donald S. and Del I. Hawkins (1993). Marketing Research- Measurement
and method, New Delhi: Macmillan Publishing Company.
Venkatesh, V. And Davis, F.D. (1996). A model of antecedents of perceived ease
of use: Development and test. Decision science, 27(3), 451-481.
Wang Y, Wang Y, Lin H, Tang T (2003). Determinants of user acceptance of
internet banking: An empirical study. International Journal of Service Industrial
Management, 14(5), 501-519.
Wang Yi- Shun, Tzung- I Tang and Jeung- Lai Eddie Tang (2001). An instrument
for measuring customer satisfaction toward websites that market digital products
and services. Journal of Electronic Commerce Research, 2(3), 89-102.
Wong David H., Claire Loh, Kenneth B. Yap and Randell Bak (2009). To trust or
not to trust: The consumers dilemma with e-banking. Journal of Internet
Business, 6(1), 1-27.
Yang Zhilin and Robin T. Peterson (2004). Customer perceived value, satisfaction
and loyalty: The role of switching costs. Psychology and marketing, 21(10), 799-
822.
Yang Zhilin, Minjoon Jun and Robin T. Peterson (2004). Measuring customer
perceived online service quality. International Journal of Operations and
Production Management, 24(11), 1149-1174.
Yang, Z. and Fang, X. (2004). Online service quality dimensions and their
relationships with satisfaction: A content analysis of customer reviews of
securities brokerage services. International Journal of Service Industry
Management, 15(3), 302-26.
Zeng Fue, Zuohao Hu, Rong Chen and Zhilin Yang (2009). Determinants of
online service satisfaction and their impacts on behavioural intentions. Total
Quality Management, 20(9), 953-969.

90
 Chapter 4
Impact of Internet Banking on
Business performance
 Chapter 4

Impact of Internet Banking on Business Performance

Contents Page No

4.1 Introduction 91

4.2 Data Collection 93

4.3 Scale Generation 93

4.4 Profile of Respondents 94

4.5 Various Services Provided by Different Banks 94

4.6 Factor Analysis 94

4.7 Demographic Background wise Analysis 98

4.7.1 General Information 98

4.7.2 Age Wise Analysis 98

4.7.3 Qualification Wise Analysis 98

4.7.4 Length of Service Wise Analysis 99

4.8 Bank Wise Analysis 99

4.9 Testing of Hypothesis (Regression Analysis) 102

4.10 Confirmatory Factor Analysis 105

4.11 Reliability 111

4.12 Validity 111

4.13 Structural Model 112

4.14 Testing of Hypothesis (SEM) 114

4.15 Business Performance of Indian Banks 115

4.16 Conclusion 129

References 142
 CHAPTER-4
IMPACT OF INTERNET BANKING ON BUSINESS
PERFORMANCE

4.1 Introduction
Efforts have been made to work out the nature and extent of internet banking in India
and its impact on customer satisfaction and business performance among public and
private sector banks viz. SBI, PNB, UBI, Canara Bank, J&K Bank, ICICI Bank and
HDFC Bank from the perspective of bank managers. The chapter also shows the effect
of demographic background like age, education, length of service of bank managers on
adoption of internet banking.
Today banking is highly information intensive activity that relies heavily on
information technology (IT) to acquire, process and deliver the information to all the
relevant customers (Seitz and Stickel, 1998). The banking business has changed
dramatically over the past 25 years due to technological changes. These technological
changes forced banks to deploy information technology to offer multiple service
channel to serve customers and satisfy their needs. By strategically utilising
information technology to optimise operational performance, banks have continued
some functions with traditional bank branch based channel and enhanced their
functionality by introducing alternative informational technological based service
channels, such as automated teller machine (ATMs) and internet banking (Banker and
Natarajan, 2008). The adoption of information and communication technology in
banking sector improves customer services, facilitated accurate records, provide for
home and office banking services, ensures convenient business hours, prompt and fair
attention and enhances faster services, which consequently improves bank image and
leads to a wider, faster and efficient banking operations (Akinbola and Agboola, 2005).
Laudon and Laudon (1991) observe that bank managers cannot ignore information
systems because it plays a critical role in enhancing efficiency of the organisation.
Information and communication technology directly affects how managers decide, how
they plan and what products and services are offered by them. It has continued to
change the way banks and their corporate relationships are organised worldwide and
the variety of innovative devices available to enhance the speed and quality of service
delivery. Woherem (2000) claimed that only banks that overhaul the whole of their

91
payment and delivery systems and apply ICT to their operations are likely to survive
and prosper in the new millennium. Internet banking is the latest in the series of
technological wonders of the recent past. ATMs, Telebanking, Internet banking, credit
cards and debit cards have emerged as effective delivery channels for traditional
banking products. Internet banking is the latest channel which opens new horizons for
banks and enables them to move from local to global frontiers (Mavri and Ioannou,
2006). Internet banking refers to the system that enables bank customers to get access
to their accounts and general information on bank products and services through the use
of banks website, without the intervention or inconvenience of sending letters, faxes,
original signatures and telephone confirmations. It provides universal connection from
any location worldwide and is universally accessible from any internet linked
computers (Bradley and Stewart, 2003; Perumal and Shanmugan, 2004; Tulani et al.,
2009). From banks perspective, internet banking is more efficient than using any other
distribution channel because banks are looking for an increased customer base. Using
multiple distribution channels increases effective market coverage by enabling different
products to be targeted at different demographic segments (Wang et al., 2003). Banks
consider that developing web based systems or establishing intranets to support internet
based activities will reduce costs and increase productivity. It can also be considered as
a way for attaining business benefits (value) by breaking down barriers of time and
distance between the supply and demand (Shih, 2003). Also gathering necessary
information is one of the main reasons that banks use the internet in daily work (Soh et
al., 1997). Introducing internet in dealing with banking services provides a convenient
and effective way to manage finances. It means less staff members, smaller
infrastructure demands, compared with other banking channels (Fredriksson, 2005).
Moreover another reported advantage of applying e-banking service is that increased
use of internet banking may actually reduce identity fraud. The customers can check
and examine their transactions of different accounts more easily and frequently, which
is easier to access to paper statements to expose identity theft (Herington and Weaven,
2007). A study about the e- banking over 1999- 2006 shows that the application of e-
banking can improve banks performance in terms of the growth in assets, reduction in
operating expenses and portfolio enhancement (Dandapani et al., 2008). Moreover, it
also helps banks achieve the objectives of higher customer acceptance and satisfaction,
higher profitability and enhance competitive advantages (Shih, 2003). Thus, with the
use of internet banking, it is possible for banks to offer a number of banking services,
92
such as creating an account, fund transfer, bill payment and money management of
services 24 hours a day. Taking in account these developments, it is evident that service
researchers need to pay more attention to consumer evaluations of technology based
services (Parasuraman and Grewal, 2000) for their survival and also taking measures to
increase their productivity, quality of services and competitive abilities which create
new customer base and generate more revenue to the business (Aghdasi et al., 2006).
Thus, the main objective of this chapter is to study, analyse and assess the efforts being
made by bank managers in enhancing internet banking and also to assess the effect of
these services in enhancing business performance of banks from the period it is
implemented to the period of its maturity.

4.2 Data Collection

The data for the present study have been obtained from both secondary and primary
sources. The secondary data obtained from various available journals such as Journal of
Internet Banking and Commerce, Journal of Banking and Finance, Journal of
Marketing, E-service Journal, different books. Also for measuring business
performance of banks, their respective annual reports and statistical tables issued by
RBI have been used to draw inferences. The primary data were collected from 144
bank managers of respective banks in Jammu city. In all 173 bank managers were
contacted, but out of them only 144 responded properly.

4.3 Scale Generation

The primary data were collected through specifically developed schedule (Annexure -1)
on the basis of the available literature (Mc. Knight et al., 2002; Jap and Ganeshan,
2000; Morgan and Hunt, 1994; P.Munhurrun and P.Naidoo, 2000 etc) and discussion
with experts in the related fields of the study. It comprised of 8 items of general
information, 13 items of peripheral services that banks provide to their customers and
100 items based on 5 point Likert scale (5 ---1) i.e ranging from strongly agree (5)
to strongly disagree (1) (Malhotra, 2007, p.274) covering the entire domain of the
study, purified by data purification process through factor analysis which finally
resulted into 30 items grouped under eight dimensions of internet banking.

93
4.4 Profile of Respondents
The demographic and some general information including the age, qualification, length
of service with their respective jobs has been gathered. Out of total respondents, 68%
are male and the remaining are female. The age of respondents has been categorised
into three heads viz. Below average, Average and Above average. The average age of
respondents came up as 44 years and more than half i.e 59% respondents fall in above
average age. Majority of the respondents belong to graduate category (43%), followed
by post graduate (29%) and professionals (28%) (Table: 4.1). Majority of respondents
are from J&K bank because its branches are more in number as compared to other
banks operating in Jammu city. Also majority of respondents i.e 67% have working
experience of more than 15 years with their respective banks.

4.5 Various Services Provided by Different Banks

Almost all the banks viz. SBI, PNB, UBI, CANARA, J&K Bank, ICICI Bank and
HDFC Bank provide ATM, credit card, debit card, electronic transfer, tele banking,
internet banking, 24 hours banking, anywhere banking facilities to their customers.
Approximately 50% of respondents find their bank providing facilities for
stocks/shares, foreign exchange. Majority of the respondents observe that with the
development of ATM, debit card, credit cards and electronic funds transfer, the
respective bank branches have withdrawn providing home banking and travellers
cheque facility to their customers.

4.6 Factor Analysis

The technique of Factor Analysis has been used through Statistical Package for Social
Sciences (SPSS 17 version) with Principal Component Analysis along with varimax
rotation for summarisation of the total data into minimum factors. The statements
having factor loadings less than 0.5 and eigen values less than 1 were ignored for the
subsequent analysis (Hair et al., 1995). As stated earlier, the schedule comprised of 100
items consisting of various dimensions of internet banking and after applying factor
analysis, 30 statements got converged into eight factors with 76.202 of variance
explained. The eight factors are F1 (Perceived Usefulness), F2 (Trust), F3 (Customer
Satisfaction), F4 (Commitment), F5 (Better Facilities), F6 (Service Quality), F7
(Perceived Ease of Use), F8 (Profitability). Thus, major findings of factor analysis have
been summarised as under:
94
Factor 1: Perceived Usefulness
First factor comprised of eight items of perceived usefulness viz., helps to accomplish
tasks quickly, improves job performance, enhances effectiveness of job, easier to
do job, www useful, transaction is advantageous, relevant information is easily
available, enhances effectiveness in banking career. About 96% of respondents feel
that by using online banking channel, it is very easier to do job (MS: 4.36) which
enhances the time and cost saving benefits and consequently enables the bankers to
support the customer order more efficiently and effectively (Novak et al., 1999).
Moreover 93% of respondents find online banking transactions advantageous (MS:
4.36), more innovative and user friendly self service technology, extending bankers
greater autonomy in performing various banking transactions (Pikkarainen et al., 2004).
On the whole all this enhances effectiveness in on the jobs and career prospects of
bankers (MS: 4.5). Moreover bankers were most likely to use computer if it improves
their job performance, increases productivity on the job, enhances effectiveness and
provides information that would lead to better decision and enables them to accomplish
tasks more quickly (Selamat et al., 2009).

Factor 2: Trust
Trust comprising of five variables viz., strong commitment to security measures,
transaction information is protected during a connection, bank web page offers all
the relevant information about products and services, does not allow any third person
to access customers personal information, and banks log in process is secure. About
97% of respondents are quite satisfied with the online banking system as their bank
does not allow any third person to access customers personal information (MS: 4.54).
Moreover, the respondents also observe their bankers having strong commitment to
security measures (MS: 4.56) as they ensure that a transaction information is protected
during connection (MS: 4.51). Thus, to conclude, banks must convince their customers
about adequate security and safeguards on the websites available such as user
identification and coding of the transmitted data need to be used to ensure security at
transaction level. Also security in this context includes secure transactions as well as
secure front end and back end system (Turban et al., 2000).

95
Factor 3: Customer Satisfaction
Customer satisfaction, being most important to every bank, comprised of five items
viz., clear transaction and price information, accurate and up to date information,
privacy and security, customer order fast enough, satisfied with online payment
system. Here, respondents are more satisfied with the privacy and security to customer
transaction (MS: 4.48) followed by accurate and up to date information (MS: 4.40) and
online payment system provided by banks which deals with customer order fast enough
(MS: 4.32). Thus, to create customer satisfaction, online banks must adopt personalised
aspect of the service, that is what customers want and act as per their demand by
encompassing proper security measures in delivering services to customers. Further, to
attract more customers to deal online banks must feed their websites with richer
contents such as corporate profile, product and pricing information, interest rates etc
(Cronin, 1998).

Factor 4: Commitment
This factor, named as commitment, comprised of four variables viz., economically to
be a customer of your bank, commitment is due to reasonable price of bank,
commitment is due to banks performance, customers are committed to buy from
your bank. Majority of respondents remain committed to buy from their bank because
of their performance (MS: 4.12), high customer satisfaction and reasonable price (MS:
4.05). Hence banks which offer wide range of products and services through internet at
reasonable price creates customer satisfaction as well as customer commitment
(Hamadi, 2010). Also to achieve customer commitment, a bank strategy must be
customer centred, long term and based on the consideration of mutual relationship and
common benefits (Kassim and Abdullah, 2006).

Factor 5: Better Facilities

Better Facilities comprising of two variables viz., deposits have increased by using
online system and profits have increased due to facilities to customers. Factor five
shows 80% of respondents satisfied with online system for banking transactions (MS:
4.02) because it enables the users to initiate various transactions such as transferring
money between accounts or making payments, pay bills, application for loans and
credit card bills online. Thus, it enables the banks to become market leaders by offering

96
large umbrella of services and earning huge profits by providing better and additional
facilities to customers (Hickman, 1999).

Factor 6: Service Quality

Factor six comprised of two variables of service quality viz., bank has upto date
equipment and technology and bank provides online services to its customers.
Results show that about 97% of respondents are quite satisfied with online services for
conducting various banking transactions (MS: 4.53). Hence, banks must focus on how
to improve online services to attract potential customers and how to retain current
customers by encompassing all clues and encounters that occur before, during and after
the transactions (Zeithaml, 2002).

Factor 7: Perceived Ease of Use

Perceived ease of use is associated with the user friendliness of the website which
includes two items viz., interaction on web pages clear and understandable, easy to
become skilful at navigating the web pages. Results show about 92% of respondents
feeled skilled at navigating the web pages (MS: 4.34) followed by easy interaction on
web pages, which is clear and understandable (MS: 4.31). In this context banks should
try to develop their internet banking site and interface easier to use. Moreover, if
possible, banks could also provide practical training sessions for customers at their
branches on usage of internet banking interface which helps non-online banking users
also to adopt the technology (Wu et al., 2012).

Factor 8: Profitability
This factor consists of two items of Profitability viz., profit potential of major
customers, profit potential of various schemes. Results show that about 92% of
respondents find their bank administrators quickly determining the profitability of
various schemes (M S: 4.33), as well as gains to customers (4.31), which is easily
available from their financial reports.

97
4.7 Demographic Background wise: Analysis
4.7.1 General Information
The survey conducted to assess the impact of online banking on customer satisfaction
and business performance on the basis of information from bank managers highlights
that majority of respondents are from J&K Bank followed by SBI, PNB, ICICI Bank,
HDFC Bank, UBI and Canara Bank. The proportion of male respondents came up as
68%. About half of the respondents were graduate and have working experience of
more than 15 years on different positions in their respective banks. Thus, status of
online banking on the basis of background of respondents is given as under:-

4.7.2 Age wise Analysis

As already stated the average age of respondents came up as 44 years. Respondents
were classified into three groups of age viz. below average, average and above average.
Maximum number of respondents (59%) fall under above average category, followed
by below average (38.2%) and average age group (2.8%). ANOVA analysis was used
to find out the effect of demographic background like age on internet banking from two
aspects i.e satisfaction and business performance. The results of ANOVA indicate no
significant difference between the mean scores of respondents under these three groups
(F= .049, sig> .05). On further analysis, when ANOVA was applied factor wise, it
becomes evident that out of eight factors, only one factor i.e profitability is significant
(F=4.548, sig <.05) (Table 4.4). The respondents belonging to all the three groups
attributed same responses towards eight factors. Almost all the factors viz. perceived
usefulness, trust, customer satisfaction, commitment, better facilities, service
quality, perceived ease of use and profitability accorded above average mean
values. Thus, it can be concluded that majority of the respondents are highly satisfied
with the services provided by their respective banks and they also feel a strong
attachment with their bank by having trust and they feel very easy to do transactions
online with their banks which further improves their job performance (Odumeru, 2010).

4.7.3 Qualification- wise Analysis

Qualification has been divided into three groups viz. Graduate, Post Graduate and
Professional. The first group contains majority of the sampled respondents (62)
followed by second group (42) and third group (40). ANOVA results indicate no
significant difference between mean scores of these three groups (F= 0.195, sig >.05).
98
On further analysis, it became evident that out of eight factors only one factor trust is
significant (F= 3.445, sig < .05). The respondents belonging to these three groups
attributed same responses towards eight factors. They accorded above average mean
values towards eight factors viz. perceived usefulness, trust, customer satisfaction,
commitment, better facilities, service quality, perceived ease of use and
profitability. Out of these eight factors perceived usefulness and service quality
accorded almost highest above average mean scores. Thus, it becomes clear that there
is not much difference between responses of these three groups. All the respondents
having different qualifications find their banks giving better services to their customers,
which creates customer satisfaction and hence profitability.

4.7.4 Length of Service wise Analysis

The length of service wise bank managers have been segregated into four segments viz.
below 5 years, 5-10 years,10-15 years and above 15 years of experience (Table 4.5 ).
Majority of respondents are having their job experience of more than 15 years.
ANOVA results indicate no significant difference in the mean scores of these four
groups (F=.218, sig>.05). On further analysis, it becomes apparent that out of eight,
only one factor i.e, better facilities is found to be significant at 5% level of
significance (F=2.59, sig<.05). The respondents belonging to all the four groups
attributed almost same responses towards the eight factors. However, there exists
significant difference among respondents having working experience of less than 5
years, 5 to 10 years and within 10-15 years. Respondents having working experience of
10-15 years feel that their bank provides better services to its customers online as
compared to respondents having working experience of 0-10 years. It means
respondents whose usage of internet banking is more than 10 years can influence their
customers to adopt the latest technology which is significantly influenced by perceived
usefulness and perceived ease of use (Yu and Lo, 2007).

4.8 Bank Wise Analysis

The various banks taken for research purpose include both public sector and private
sector banks. The public sector banks are SBI, PNB, UBI and Canara Bank. On the
other hand the various private sector banks are J&K Bank, ICICI Bank and HDFC
Bank. ANOVA was used to know difference existing in the mean satisfaction of
respondents belonging to different banks and it was found to be significant (F=2.519,
99
sig<.05). Moreover, significant difference exists between respondents with regard to
three factors viz. commitment (sig=.020), better facilities (sig=.001), service quality
(sig=.002). (Table: 4.6). Thus, each group of different bank has been analysed
separately (Table 4.7).

J&K Bank
This group accorded maximum mean scores towards two factors viz. perceived
usefulness (4.41)and Trust (4.46). Above average mean scores were attributed to the
remaining six factors viz. customer satisfaction (4.29), commitment (4.19), better
facilities (4.10), service quality (4.36), perceived ease on use (4.24) and
profitability (4.29). Thus, it can apprehended that managers of J&K bank are highly
satisfied with their bank as it is the leading bank in J&K state, providing latest
technology that changed the way to carry on their financial transactions. Further, they
also find that their bank is providing relevant information about all products and
services to their clients online and ensured them that their needed information is
protected during a connection. Also they do not allow any third person to access their
clients information online. Moreover, the respondents of this bank observe using
online channel in doing banking transactions as easy which enhances their effectiveness
in banking career (Abukhzam and Lee, 2010).

SBI Bank
The bank accorded highest mean scores towards six factors viz. customer satisfaction
(4.51), trust (4.57), perceived usefulness (4.50), better facilities (4.51),
profitability (4.50) and perceived ease of use (4.46). The remaining two factors viz.
commitment (3.90) and service quality (3.75) received average level of mean
values. Thus, it can be concluded that respondents of this bank are highly satisfied with
all aspects of internet banking. This may be due to the reason that their banks online
server is secured, which provides privacy and security to customers. Moreover, the
respondents of this bank also feel that their banks create customer satisfaction but their
commitment level is low due to average level of quality of services provided by bank.

PNB Bank
The respondents from PNB accorded above average mean values for six factors viz.
perceived usefulness (4.50), trust (4.44), customer satisfaction (4.33), service
100
quality (4.50), perceived ease of use (4.42) and profitability (4.27). The remaining
two factors viz. commitment (3.76) and better facilities (3.70) accorded just slightly
above average mean values. Thus, it becomes evident that respondents of the bank are
highly satisfied with online services which is easier to use and helps them to
accomplish their tasks quickly such as seeking relevant information about clients and,
thus, enhances effectiveness in their respective jobs (Shih, 2003). However, the
respondents of the bank feel that their profits have been also increased by providing
better facilities to their customers.

ICICI Bank
The respondents from the bank under reference accorded almost above average mean
values to all the eight factors viz. perceived usefulness (4.19), trust (4.65),
customer satisfaction (4.40), commitment (4.38), better facilities (4.05), service
quality (4.83), perceived ease of use (4.44) and profitability (4.27). The
respondents find their bank having upto date equipment and technology and they
provide better online services to their customers. Further, they feel that their customers
information is being protected while doing online transaction and their bank does not
allow any third person to access any customers personal information.

HDFC Bank
The bank accorded highest mean values for six factors viz. trust (4.80), service
quality (4.78), perceived ease of use (4.71), customer satisfaction (4.68), perceived
usefulness (4.55) and profitability ((4.71). The remaining two factors viz.
commitment (4.10)and better facilities (3.14) accorded less mean values. Thus, it is
evident that respondents of this bank have trust in their banks online services followed
by better service quality. The bank has strong commitment to security measures which
ensures that transaction information is protected during a connection. Moreover, the
respondents of this bank are moderately satisfied with increase in deposits by providing
online services to its customers.

UBI Bank
The bank accorded highest mean values for three factors viz. trust (4.51), perceived
usefulness (4.12), service quality (4.07). Only one factor viz. commitment (2.86)
received less than average mean values. The remaining four factors received slightly
101
above average mean values viz. customer satisfaction (3.85), better facilities (3.07),
perceived ease of use (3.92) and profitability (3.92). Thus, it is evident that
respondents of the bank are more satisfied towards security measures followed by the
relevant information about all products and services online which enables their
customers further to deal online. The respondents of this bank are least satisfied with
the measure commitment. Though the respondents have trust in dealing online and they
find it easier to do their job but their commitment level is low due to time taken in
conducting online transactions.

Canara Bank
The bank under reference accorded above average mean values for six factors viz.
perceived usefulness (4.53), customer satisfaction (4.10), commitment (4.12),
perceived ease of use (4.25), trust (4.35) and profitability (4.12). The remaining
two factors viz. better facilities (3.87) and service quality (3.75) accorded just
slightly above average mean values. Thus, to conclude respondents of this bank are
more satisfied with security measures provided by their bank. The respondents also find
using online channel enabling them to accomplish their tasks quickly, which improves
their job performance and thus enhances their effectiveness in banking career.
Moreover, managers found work productivity mainly depending on the system
effectiveness in searching for information and were more interested in using the
internet if it was very easy to use (Davis et al., 1989).

4.9 Testing of Hypothesis Through Regression Analysis

H1: Customer satisfaction influences commitment in online banking

O1: To measure the impact of customer satisfaction on customer commitment.
To measure the impact of customer satisfaction on customer commitment, linear
regression analysis was used, which shows value of R as 0.414, reflecting about 41%
association existing between customer satisfaction and commitment. Also R-square is
equal to 0.171, meaning thereby 17% variation between customer satisfaction and
commitment. The table further indicates the value of adjusted R-square which is equal
to 0.165 i.e any time another independent variable is added to regression models, the R-
square will increase. The regression model in ANOVA table reflects the overall model
significantly different from 0 (F ratio= 29.324, p=.000). This probability implies that
102
there are .000 chances the regression model results come from the population, where
the R-square is 0.00 i.e there are .000 chances out of 1000, that the correlation
coefficient is 0.00. Also, to examine whether satisfied customers remain committed to
deal online, information provided in the coefficient table has been examined. The
standardised beta values reveal that customer satisfaction has a beta coefficient of
0.414(t=5.414), which is significant (0.000). Hence, the above stated hypothesis is
accepted.

H2: Service quality of online banking influences profitability of banks.

O2: To find out the impact of service quality of online banking on profitability of banks.
Linear regression analysis was used to find out the impact of online banking service
quality on profitability of banks. The results revealed the value of R as 0.283, which
reflects 28% association existing between service quality and profitability of banks.
Also the value of R-Square is 0.08, which means 8% of variation between profitability
and service quality of banks. The table further indicates that adjusted R Square is 0.073
i.e any time another independent variable is added to regression model, the R- Square
will increase. The regression model in the ANOVA table reflects that the overall model
is significantly different from 0 (F ratio =12.319, p=0.001). This probability level
implies that there are 0.001 chances the regression model results come from a
population where the R Square is 0.00 i.e there are 0.001 chances out of 1000, that the
correlation coefficient is 0.00. Further, to determine if service quality is a significant
predictor of profitability of banks, information provided in the coefficient table has
been examined. The standardised coefficient beta values reveal that service quality has
a beta coefficient of 0.283 (t=3.510), which is significant (0.001), implying service
quality of online banking having a strong and significant impact on profitability of
banks. Thus, the stated hypothesis is accepted.

H3: Trust in online banking positively affects customer satisfaction.

O3: To measure the impact of trust on customer satisfaction.
To measure the impact of trust on customer satisfaction, linear regression analysis was
worked out which shows the value of R as 0.434, reflecting thereby 43% association
existing between customer satisfaction and trust. Also R-Square is equal to 0.188,
which means 18% variation between trust in online banking and customer satisfaction.
The table further indicates the value of adjusted R-Square which is equal to 0.182 i.e
103
any time another independent variable is added to regression models, the R- Square will
increase. Further the regression model in the ANOVA table reflects the overall model
significantly different from 0 (F ratio=32.902, p=.000). This probability implies that
there are 0.000 chances the regression model results come from the population, where
the R-Square is 0.00 i.e there are 0.000 chances out of 1000, that the correlation
coefficient is 0.00. Also, to determine whether trust in online banking generates
customer satisfaction, information provided in the coefficient table has been examined.
The standardised beta values reveal that trust has a beta coefficient of 0.434 (t=5.736),
which is significant (0.000). Hence the above stated hypothesis is also accepted.

H4: Service quality of online banking influences customer satisfaction.

O4: To measure the impact of online service quality on customer satisfaction.
In order to prove the above hypothesis, again simple linear regression analysis was
worked out which shows value of R as .348, reflecting 34% association between
service quality and customer satisfaction. Also R-square for the model is .121, showing
that 12.1% variation between customer satisfaction and service quality. The table also
indicates that the adjusted R-square for the model is.115. Anytime another independent
variable is added to regression model, the R-square will increase. The regression model
in the ANOVA table reflects the overall model significantly different from 0 (F-
ratio=19.559, p=.000). Further, to determine whether service quality of online banking
influences customer satisfaction, information provided in the coefficient table has been
examined. The standardised coefficient beta values reveal that SQ has a beta coefficient
of 0.348 (t=4.423), which is significant (.000). Thus, service quality significantly
affects customer satisfaction. Hence, the hypothesis is accepted.

H5: Perceived ease of use of online banking will have a positive effect on banks
profitability.
O5: To measure the effect of perceived ease of use on profitability of banks.
The relationship between perceived ease of use and profitability of banks has been
measured with the help of regression analysis. The value of R is equal to 0.340 which
shows 34% correlation between perceived ease of use and profitability of banks. The
value of coefficient of determination (R-square) figured out at 0.116, which indicates
12% variation in perceived ease of use and profitability of banks. Adjusted R- Square
for the model is 0.109. Anytime another independent variable if added to regression
104
model, the R- Square will increase. The value of F is 18.550 (0.000). The coefficient
table has been examined to work out the beta value which came as 0.340 (t= 4.307),
which is significant. Thus, the stated hypothesis is accepted.

H6: Perceived usefulness will have a positive effect on banks profitability.

O6: To measure the effect of perceived usefulness on profitability of banks.
To measure the effect of perceived usefulness on profitability of banks, again linear
regression analysis was worked out. According to the model summary table (Table:
4.8), the value of R as 0.470 which reflects 47% association between dependent and
independent variables. Also R- Square for the model is 0.221. This shows 22.1%
variation between profitability and perceived usefulness of managers. The table also
indicates that the adjusted R- Square for the model is 0.215. Anytime another
independent variable if added to regression model, the R-Square will increase. The
regression model in the ANOVA table reflects the overall model significantly different
from 0(F- ratio=40.224, p=.000). This probability level implies that there are .000
chances the regression model results come from a population where the R-Square is
0.00 i.e, there are .000 chances out of 1000 that the correlation coefficient is 0.00.
Further to determine whether perceived usefulness significantly predicts profitability of
banks, information provided in the coefficient table has been examined. The
standardised coefficient beta values reveal that perceived usefulness has a beta
coefficient of 0.470(t=6.342), which is significant (0.000). Thus, perceived usefulness
is significantly related to profitability of banks. Hence, the hypothesis is accepted.

4.10 Confirmatory Factor Analysis

A confirmatory factor analysis (CFA) using AMOS 16 was applied to test the
theoretical model and hypothesis (Nguyen, 2007) vis-a-vis to assess fitness, reliability
and validity of measurement models for different constructs in the study. The various
resulting measurement models are as follows:-

Perceived Usefulness
The first order confirmatory factor analysis model for construct perceived usefulness
was designed to test the relationship between eight variables and main construct viz.
perceived usefulness (Fig: 4.1). The model presented eight observed indicators. The
number of observed variances 36 [8(8+1)/2] was 36 and the number of estimated
105
parameters in the model was 16 (8 regression weights and 8 variances). Thus, based on
t-rule, the first order confirmatory factor analysis model for perceived usefulness was
over identified and tested with 20 degree of freedom (36-16= 20). Model has been
found to be appropriate as the values are fit under the threshold criteria (chi-square/df=
1.581, RMR= 0.19, GFI= 0.962, AGFI= 0.909, TLI= 0.977, CFI= 0.988 and RMSEA=
0.064) and valid as indicated through AVE, which came to be 0.51, higher values of
standardised regression estimates of each indicator and lastly through construct
reliability, which came to be 0.937.

106
 1
e8 pu8

1
e7 pu7
.17
.85

1
e6 pu6
.70
.21
.70

.15
1
e5 pu5 .73

Perceived use
1
e4 pu4
.80

1 .79
e3 pu3
.76

.07
1
e2 pu2
.13

1
e1 pu1

Fig 4.1: Measurement Model of Perceived Usefulness

Trust
First order confirmatory factor analysis resulted into five indicators of the construct.
The number of observed variances [5(5+1)/2] was 15 and number of parameters in this

107
model was 10 (5 regression weights and 5 variances). Similarly based on t-rule, the
model was tested with 5 degree of freedom (15-10). All these indicators obtained factor
loadings above 0.5, thus revealing convergent validity of the model. Construct validity
was also established through average variance extracted and construct reliability, whose
values came up as 0.61 and 0.938 respectively. The model was of good fit (CMIN/df=
0.472, RMR= 0.006, GFI= 0.996, AGFI= 0.981, TLI=1.013, CFI=1.000 and RMSEA=
0.012).

e5 t7

.67
e4 t4
.83

.76
e3 t3 TRUST
.06 .85

e2 t2 .80

.08

e1 t1

Fig 4.2: Measurement Model of Trust

Customer Satisfaction
This model resulted into five indicators viz. clear transaction and price information,
accurate and up to date information, privacy and security, customer order fast enough
and online payment system. Model has been found to be appropriate (chisquare/df=
1.329, RMR= 0.010, GFI= 0.989, AGFI= 0.947, TLI= 0.991, CFI= 0.997 and
RMSEA= 0.048) and valid as AVE= 0.60 and construct reliability= 0.90.

108
 e5 cs18
.75

e4 cs17 .84

.83 cust sat

e3 cs16
.57
.33
.79
e2 cs15
.22

e1 cs14

Fig 4.3: Measurement Model of Customer satisfaction

Commitment
This model consisted of four indicators viz. economically to be a customer, customers
are committed, reasonable price, and committed because of performance. All model fit
indices were sufficiently satisfied with their related thresholds. The model fits the data
with CMIN/df= 1.057, RMR= 0.017, GFI= 0.993, AGFI= 0.964, TLI= 0.999, CFI=
1.000 and RMSEA= 0.020. The model has also been proved to be valid as indicated
through AVE which came to be 0.653, higher values of standardised regression weights
of each indicator, high construct reliability (0.818) which was assessed from the
construct loadings and error variances (Hair et al., 2009).

109
 e4 c13
.29 .75

e3 c12 ..76

.95 commitment
e2 c11
.74

e1 c10

Fig 4.4: Measurement Model of Commitment

Profitability
This model consisted of four variables viz. increased deposits, increased profits,
profitability of various schemes, and profitability of customers. The model fits the
data with CMIN/df= 1.021, RMR= 0.016, GFI= 0.997, AGFI= 0.985, TLI=1.000,
CFI=1.000 and RMSEA= 0.023 and valid as AVE= 0.464 and construct reliability=
0.839

1
e4 pe4
.35 .67
1
e3 pe3 .53

.93 profitability
1
e2 pe2
.76

1
e1 pe1

Fig 4.5: Measurement model of Profitability

Service Quality and Perceived ease of use

CFA has not been run on these two factors as only two items remained after
exploratory factor analysis. Thus, only aggregate mean values are taken for structural

110
equation modelling. But the validity could be assessed through AVE and construct
reliability which came to be 0.695 and 0.854 in case of perceived ease of use and 0.536
and 0.823 in case of service quality.

4.11 Reliability
To check the reliability, Cronbach Alpha and Split half values have been worked out
(Malhotra, 2007; p.285) twice i.e before and after factor analysis by dividing the
respondents into two equal halves. The data were found reliable before the factor
analysis as mean values of both the groups (Group 1= 4.34 and Group 2=4.31) are
almost similar. Similarly after factor analysis, the data were proved quite satisfactory in
terms of split half reliability as mean scores obtained from both groups of respondents
are satisfactory (Group 1= 4.35 and Group 2= 4.33). Moreover, Cronbach Alpha values
also proved reliable before and after factor analysis as it came to be 0.965 and 0.919
respectively (Table 4.11). Reliability is also an indicator of convergent validity. The
rule of thumb for reliability estimate is 0.70 or higher and reliability in the present case
is established as it is above 0.70 in all the cases.
CR= (Sum of standardised loadings)2/ (Sum of standardised loadings)2+Sum of error
variance terms

4.12 Validity
1. The content validity was duly assessed by reviewing the literature and
discussion with experts and researchers working on similar topics.
2. The construct validity measuring the extent to which a single scale measures
the same construct has been examined through Factor analysis. An eigen
value equal to one is taken as criterion for significance of a factor. Eigen
values of all the factors are greater than one, indicating strong construct
validity. It can also be established through convergent validity.

3. The items that are the indicators of a specific construct should converge or
share a high proportion of variance in common, which is known as convergent
validity. The various ways to estimate the relative amount of convergent
validity among item measures are as under;
3 a. Factor Loadings: High factor loading, i.e., above 0.50 or ideally 0.7 or
higher indicates higher level of convergence. Convergent validity gets

111
 established in the present study as majority of factor loadings came out
to be above 0.50 (Table: 4.3).
3b. Variance Extracted: In CFA, the average percentage of variance
extracted (VE) among a set of construct items is a summary indicator
of convergence. VE is computed as the total of all squared standardised
factor loading divided by number of items. VE should be 0.50 or
greater to suggest adequate convergent validity and in our case VE for
all the constructs came to be above 0.50 (Table: 4.10).
4. Discriminant validity: It is the extent to which a construct is truly distinct
from other constructs. High discriminant validity provides evidence that a
construct is unique and captures some phenomena, which other measures do
not. Discriminant validity was assessed with the variance extracted test
recommended by Fornell and Larcker (1981), where variance extracted should
be greater than the squared correlation between the constructs and this
condition has been fully satisfied by all the constructs (Table: 4.12).

4.13 Structural Model

Structural Equation Modelling, a statistical technique for testing and estimating causal
relations, represents relationship between latent constructs. It can be expressed in the
terms of a structural model that represents the theory with a set of structural equations
and is usually depicted through a visual diagram. Structural model emphasises on the
relationship between the latent constructs and measured variables. Structural model can
be either recursive or non-recursive. A recursive model is one in which all the paths
between the constructs proceed only from one predictor to dependent or outcome
construct i.e no feedback loop exists in it. In non-recursive model, feedback loop does
exist (Hair et al., 2009).
Initially a recursive model was proposed with seven constructs viz. SQ,
TRUST, PEOU, PU, CS, CMT and BF. It was proposed that service quality influences
trust, which in turn affects customer satisfaction, commitment and business
performance. Further PEOU and PU of employees affect business performance. Thus,
on the whole CS is not only predicted through service quality and trust but also through
PEOU and PU. However, this model was not found to have an appropriate fit as chi-

112
square statistic came to be 6.976, GFI= 0.886, AGFI= 0.710, RMR= 0.085, CFI=
0.776, TLI= 0.572 and RMSEA= 0.204, hence revealing a poor fit.
In order to get a model with good fit, some significant relationship of perceived
ease of use and customer satisfaction were established which reduces the chi-square
statistics to 5.137, GFI= 0.915, AGFI= 0.761, CFI= 0.859, TLI= 0.703, RMR= 0.061
and RMSEA= 0.170. Kumbhar (2011) proved that perceived ease of use is an important
factor that generates customer satisfaction in an e-banking context. Hamadi (2010) also
established a relationship between perceived quality and satisfaction, wherein perceived
ease of use is measured through perceived quality which influences satisfaction and
hence commitment. Alam and Soni (2012) also support the relationship between PEOU
and CS, thus giving a theoretical support for PEOU and CS relationship.
Again relationship of perceived usefulness and customer satisfaction were
added to the model, which further reduced the chi-square to 3.487, GFI= 0.942, AGFI=
0.821, TLI= 0.822, CFI= 0.924, RMR= 0.050 and RMSEA= 0.132. Musiime and
Ramadhan (2011) also support the relationship between customer adoption to internet
banking, which is influenced by PEOU and PU and CS.
In the next phase, relationship between trust and commitment is established to
get better model fit as compared to the previous one. This relationship is established not
because of the modifications recommended but also due to the availability of a sound
theoretical support. Lee (2007) found trust in a bank influencing customer satisfaction
and hence commitment. Durkasree and Ramesh (2011) concluding customer
satisfaction being influenced by perceived tangibility, trust and confidence and
ordering. Casolo et al., (2007) also found positive relationship between trust and
relationship commitment.
The last phase of modification indices led to the addition of one more
relationship between service quality and profitability (Lee and Hwan, 2005). The final
model has been found to have a good fit, as its chi square statistics came to be 1.83,
GFI= 0.976, AGFI= 0.903, TLI= 0.940, CFI= 0.980, RMR= 0.036 and RMSEA= 0.076
(Table:4.13).

113
 sq .22
.38 cs e5
e10 .36
.40
t .34
.08
.19
.20 .44
c e6
.36 .22

e9 peou .55

.48 .72
ep bf e7
.97

e4 pu

Fig 4.6: Structural Equation Model of Online Banking from Managers Perspective
Key: Sq=service quality, t=trust, peou= perceived ease of use, pu= perceived
usefulness, cs= customer satisfaction, c=commitment, bf= business performance

4.14 Testing of Hypothesis

HO1: Customer satisfaction influences commitment in online banking.
It becomes evident from the SEM results that CS positively affects Commitment (.404)
and is significant, thus accepting our first hypothesis.

HO2: Service quality of online banking influences profitability of banks.

This hypothesis also stands accepted as effect of service quality on business
performance is significant but not too much high (.228).

HO3: Trust in online banking positively affects customer satisfaction.

The direct effect of trust on customer satisfaction is significant and is positive (.363),
thus accepting the stated hypothesis.

114
HO4: Service quality of online banking influences customer satisfaction.
As it is clear from the path analysis of SEM that there exists significant and positive
effect of service quality on customer satisfaction, thus accepting the hypothesis.

HO5: Perceived ease of use of online banking will have a positive effect on banks
performance.
This hypothesis is tested by introducing unobserved variable viz. employee
performance in the path diagram. Employee performance is measured through two
constructs viz. perceived ease of use and perceived usefulness, which effects business
performance. From the path diagram, it is observed that employee performance
measured through perceived ease of use is significant (.546) which further effects
business performance (.72), thus accepting the hypothesis.

HO6: Perceived usefulness of online banking will have a positive effect on banks
performance
This hypothesis also stands accepted as employee performance measured through
perceived usefulness is significant and positive (.978), which further effects business
performance (.72).

HO7: Customer satisfaction positively affects business performance of banks.

This hypothesis also stands proved as there exists direct effect between customer
satisfaction and business performance which is significant and high (.436).

4.15 Business Performance

Facing continuously changing and highly competitive business environment, banks
have invested heavily in information technology (IT) to enhance operating efficiency
and sustain competitive advantage (Banker and Natarajan, 2008). The effectiveness of
organisations in fulfilling its purpose can be seen in terms of their business
performance. It can also refer to either the ends (results) or the means that produce the
end (Epstein, 2004). Performance is an important variable which helps in determining
the status of an organisation as compared to its competitor in an economy. It is in this
context bank managers must deal with performance on two dimensions, its level
(return) and the variation in that level (risk). However, performance has traditionally
been studied only in terms of return (David B, 1987). Although performance can have a
115
variety of meanings (short or long term, financial or organisational benefits), it is
broadly viewed from two perspectives viz. objective and subjective (Sin et al., 2005).
The objective performance involves financial or market based measures such as
profitability, market share, return on equity (ROE), return on asset (ROA), return on
investment (ROI) and capacity utilisation. Whereas subjective performance can be
measured through customer satisfaction, service quality, institutional image, customer
commitment etc (Aggarwal, Erramilli and Dev, 2003). Moreover, business performance
can be measured in terms of its capacity to generate sustainable profitability. It is a
banks first line of defence against unexpected losses, as it strengthens its capital
position and improves future profitability through the investment of retained earnings.
Hence, the profitability or objective performance measures used in this study include
the net profit, rate of return on assets (ROA), the rate of return on equity (ROE) (M.
Bashir, 1999). The rate of return on assets (ROA) is the most comprehensive
accounting measure of banks overall performance. It is defined as net income over
total assets, it shows the profit earned per rupee of assets. It is an indicator of banks
efficiency and a measure of the banks ability to earn from its total operations. Also it
gauges how effectively a bank uses its financial or real investments to generate profits.
The other variable viz. return on equity (ROE) reflects how effectively a bank
management is using shareholders investment. It is defined as net income divided by
average equity and measures bank accounting profits per rupee of book equity capital.
The banks return on equity needs to be greater than its cost of equity as it tells the bank
shareholders how much the institution is earning on the book value of their investment
(Goudreau, 1992). Thus, return on assets measures profitability from the point of view
of the overall efficiency of a banks use of its total assets, return on equity captures
profitability from the shareholders perspective. Thus, higher the ratio better it is. The
subjective performance of banks is measured with the help of online service quality,
trust, customer satisfaction and their commitment for using online services in future
from both customers perspective as well as from managers perspective. Further, to
evaluate outgrowth of business on account of internet banking services in their
operations, the performance of banks will also be evaluated by considering period
between 1990-95 as pre e-banking period and then comparing it with three different
stages of IT development viz. period between 1996-2000 (First stage), 2001-05 (middle
stage) and 2006-2012 (Advanced stage) and between banks also (Kour, 2012; Kashap
and Sharma, 2012; Uppal, 2011).
116
4.15.1 Business Performance of J&K Bank
The Jammu and Kashmir bank (JKB), incorporated on 1-10-1938, has a potential
growth prospect in terms of net profit, return on assets, return on equity, deposits and
advances. For examining the impact of internet banking on financial performance of
JKB, the aforesaid financial indicators have been used by comparing its business
performance before and after application of internet banking. The average net profit of
the bank before the implementation of internet banking services (1990-95) came to Rs.
1695 lakhs while in the financial year 1998-99, JKB entered into an agreement with
IBA to provide ATM facilities and in year 1999-2000, the bank had tied up with
Infosys Technologies to offer internet banking services to their customers. Thus, in the
first year of developing information technology, the net profit of bank increased by
69% (Rs.5037 lakhs in 1997-98 to Rs. 8545 lakhs in 1998-99). As such customers find
it convenient to withdraw their money easily through ATMs and are also able to check
their account balances. In the second stage of development of internet banking
facilities viz. period from 2001-05, the average net profit came to Rs. 25730 lakhs
(330% increase during five years). It was in this period that the bank had widened its
scope for providing multiple services to its customers. In year 2003-04, the bank started
RTGS payment system and credit card facilities, enabling the customers to transfer
funds and make hassle free cash payment without having their debit balances in their
accounts. Further in year 2005-06, the banks started providing easy payment of various
bills like electricity, insurance premiums etc to their customers and in year 2010-11, the
bank, thus, had integrated with more than 900 online merchants like Airtel, Make My
Trip, Metlife etc to provide various online bill payment and shopping facilities to its
customers, encouraging them to use more online banking facilities. In the same year,
the bank also started SMS Alert facility that enabled the customers to receive prompt
information about their transactions via SMS on their mobiles. All this facilitated an
increase of net profit to Rs 80334 lakhs in 2011-12. It is also exhibited that return on
assets which is equal to net profits to working funds also shows a rising trend (1.04%
in 1990-91 to 1.145% in 2011-12), however with little fluctuations. The return on
assets during 1991-92 fell due to economic crises whereas in 2004-05, it fell due to
insulated effects of inflation and hardening of interest rates. Similarly, the return on
equity (ROE), that measures how effectively a bank management is using its
shareholders investment also improved significantly from 14.26% in 1990-91 to
21.22% in 2011-12. Further, JKB has been a quite successful bank so far as its fund
117
based business is concerned. Its total advances and deposits for the period under
reference (after implementing internet banking services) also shows a rising trend from
Rs. 4762.90 crore and Rs. 11168.08 crores respectively in the year 2001 to Rs
330774.215 crores and Rs. 533469.016 crores in 2011-12. Similarly, the subjective
performance of JKB in the form of customer satisfaction is high as their customers are
satisfied with online banking services viz. up to date information related to their
banking transactions and privacy and security to their dealings. The level of customer
trust and commitment is also high in JKB which may be due to timely fulfilment of
transactions or due to open communication between customers and bank administrators
and easy solution for all online problems. In addition to this, the level of employee
performance is also high because managers find the adoption of online facilities making
it easier to do their job and consequently enabling them to support customer order fast
enough (Novak et al., 1999). The administrators are also able to determine quickly the
profitability of various schemes and customers and hence it increases the visibility of
the bank in the market. Almost all managers of all the branches are quite satisfied with
internet facilities given to customers. Moreover, the reasonable and transparent charges
levied by bank in delivering online services, attract customers in dealing online. It is in
this context to evaluate online effectiveness of JKB with financial performance, a
comparison has been made between various dimensions of the study with the profits of
the bank from both bankers perspective as well as from customers perspective (Table:
4.22). Managers of JKB provide above average level of online service quality (MS:
4.35) and trust (MS: 4.42) to customers in context of online transactions. Further, the
level of customer satisfaction (MS: 4.26) and customer commitment (MS: 4.18)
measured through managers responses indicate above average mean scores, matching
with the increase of net profit to 30% (From Rs. 61526 lakhs in 2010-11 to Rs. 80334
lakhs in 2011-12) in one year and average increase of 75% in six years time period
(2006-12). But, when these responses are compared with customers responses and with
other banks, it reveals that JKB just provides average level of service quality (MS:3.69)
and trust (MS:3.89), although the level of customer satisfaction (MS: 4.04) and
customer commitment (MS: 3.91) are quite satisfactory, indicating that proportion of
percentage change in profit of JKB due to online effectiveness is less as compared to
other banks like HDFC Bank and ICICI Bank, thus activating the administrators of
JKB to deliver exceptional online services such as online transfers, payment of bills

118
with out much loss of time to attract customers in dealing online. All this helps in
meeting customers financial requirements and hence increases profitability of bank.

4.15.2 Business Performance of HDFC Bank

Housing Development Finance Corporation (HDFC) Bank, a private sector bank
incorporated in August 1994, has a nationwide network with 3062 branches and 10743
ATMs. With the help of updated and advanced technology, its business performance is
improving day by day and is significantly high when compared with other two private
sector banks viz. J&K Bank and ICICI Bank. Today its net profit is as high as Rs.
514178 lakhs over a period of last one and half decades. The average net profit for the
initial period (1995-2000) came to be Rs 6628 lakhs followed by Rs 41396 lakhs during
2001-05, registering average growth rate of 524% in between two different periods of
development (Table: 4.16). However, its net increase rate is lowest in comparison to
ICICI bank but higher from all other banks under study. In the initial period, the bank
provides debit card and phone banking facilities, later in year 2001 the bank provided
online banking and credit card to its customers. Furthermore, the average net profit for
the advanced period (2006-12) came to be Rs.255565 lakhs, 517% increase from the
previous period. It was in this period that bank provided online transfers, online
ticketing, payment of various bills, VBV facility for online shopping to customers and
thus it was ranked top ranking one in the private sector banking in India in 2010. The
ROA and ROE also show rising trend from 1.46% and 17.26% in 1995-96 to 1.77%
and 18.69% in 2011-12 with wide fluctuations. But when it is compared on average
business performance basis, it is found that although ROA in second period falls but
ROE stands rising (1.4%), reflecting stable returns to the equity shareholders. A further
analysis exhibited that the banks total deposits and advances also increased (Table:
4.16). Further, when performance is measured subjectively, it is found HDFC Bank
also follows customer oriented philosophy by delivering exceptional service quality and
create satisfied customers. Customers of the bank are satisfied with the availability of
advanced services and have trust in conducting online transactions. The bank provides
all relevant information about products and services available online and ensures that
its login process is secure. HDFC Bank is a hub of modern facilities and provides
security and privacy to customer transactions by employing event detection technology
such as customer messaging for online transactions. Similarly, the bank also
implemented digital certificates based security engine for its corporate internet banking
119
customers. The debit and credit card holders of HDFC bank are also secured by
powerful proactive risk manager technology solution, it provides SMS alerts and
prompt customer service call on detecting abnormal usage behaviour. All this prevents
frauds and minimises losses to customer, if the card is stolen. Moreover, bank has up to
date technology and equipment helps to improve its products, processes and services
and thus helps the administrators meet customer need by having 360 degree view of its
customers online. The bank also takes steps to improve the effectiveness of its redressal
mechanism across the delivery channel. Managers of bank observe quality of online
services (MS: 4.78) and level of trust (MS: 4.79) being highest among HDFC Bank
followed by level of customer satisfaction (MS: 4.68) and customer commitment (MS:
4.08). They are also satisfied with internet facilities in their operations, thus enabling
them to do their work efficiently and effectively. On the other hand, customers are
satisfied with quality of services (MS: 4.22) and security in dealing online enhances
trust (MS: 4.50), thus, leading to 32% increase in net profit in one year and 517%
increase in six years time period (2006-12). On the whole, the study reveals that bank
fulfils all the promises it makes to its customers, which ultimately gives a feeling of
trust. Customers have full confidence on banks reliability but are moderately satisfied
(MS: 3.60) and committed (MS: 2.96) to online services. This may be attributed to the
fact that the adoption of same online facilities provided by other public sector banks at
reasonable cost reduces the commitment level of its customers. Similarly delivery of
better online services and adoption of latest online security mechanisms are the leading
factors which increase the overall performance of the bank (517% average increase in
net profit), being the highest level of growth among all banks under study.

4.15.3 Business Performance of ICICI Bank

Industrial Credit Investment Corporation of India (ICICI) Bank, the second largest and
leading private sector bank, has a wide network of 2533 branches and 6800 ATMs in
India. It is the first bank which started its internet banking in India in year 1998 and at
present about 70% of its customers are conducting transactions online. ICICI bank, is a
type of private company engaged in providing a wide range of banking and financial
services including commercial banking and treasury operation. The bank starts its
online transfers as soon as in year 1998. Further, in year 1999, the bank used latest
technology for online networking of all its ATMs and provides debit and credit card
facility in the following year. Moreover, in the second period of advancement, ICICI
120
Bank provides all online facilities including e-cheque for its internet banking users. The
objective performance of ICICI bank indicates that like other banks, its average net
profit increased from Rs 6628 lakhs to Rs 105357 lakhs registering growth rate of
1812% from one period to another. Thus adoption of new and innovative technology
like online banking is the most important factor for such a growth of a bank. The other
performance measures such as ROA also increased significantly from 0.82% in 2001 to
1.50% in 2012, whereas the ROE shows fluctuating trend. The average deposits and
advances also increased significantly with the adoption of latest technology. Similarly,
when performance is measured subjectively, it is found that both managers and
customers are satisfied with ICICI Bank for having up to date equipment and
technology. In addition to this, ICICI Bank focuses on delivering high tech quality
services (MS: 4.37) to customers for meeting their current requirements. The level of
trust and customer satisfaction is also high in ICICI Bank. Customers are also satisfied
for online payments such as transfer of funds and in paying certain utility bills. Besides,
ICICI Bank also provides privacy and security to customer transactions enabling them
to remain committed for dealing online. Managers of ICICI Bank also become skilful at
their respective banking job, enabling them to retrieve their clients information quickly
and thus enhances their effectiveness in banking business. Also with the use of internet
facilities in their banking operations, the administrators are able to determine quickly
the profitability of various schemes as well as of various customers online. Likewise,
mangers of ICICI Bank also believe that they provide better quality online services
(MS: 4.75), generating higher level of customer satisfaction (MS: 4.56) and customer
commitment (MS: 4.35). Whereas customers find although the quality of online
services being highest and quickest among ICICI Bank (MS: 4.37), leading to their
satisfaction (MS: 4.11), but their promises to use these services in future is not certain.
Thus, on the whole, ICICI Banks business performance improves significantly from
one period to another and then shows steady growth. Hence, bank managers are
required to constantly review their banking operations and reduce service charges to
attract more customers to deal online. In addition to this, the bank must take steps
focussing more on its service quality and customer convenience to increase its overall
business.

121
4.15.4 Business Performance of SBI
The initially known as imperial bank of India, the State Bank of India constituted on 1st
July 1955, is the countrys oldest and largest bank and a premier institution in terms of
balance sheet size, number of branches, market capitalisation and profits, which goes
on momentous phase of change and transformation. The bank is changing its outdated
front and back processes to modern customer friendly processes to improve the total
customer experience. To measure the impact of internet banking on SBIs financial
position, the same parameters have been used by comparing its business performance
before and after the period of internet banking implementation The average net profit
for the period (1990-95), when bank operations were usually manual and employees
used only mainframe or mini computers for reconciliation and fund settlement process
came to be Rs.55836 lakhs. In the year 1997, SBI had tied up with VISA and Master
Card to provide debit card facilities to customers which increased the net profit by 37%
(Rs 134925 lakhs in 1996-97 to Rs 186120 lakhs in 1997-98). Further in year 1999,
SBI provided credit cards to its customers, enabling them to do shopping and withdraw
cash without having debit balances in their accounts. Thus, by comparing the average
net profit before and first stage of information technology development, it is found that
average net profit in year 1996-2000 came to be Rs 142428 lakhs, indicating 155%
increase in profit in five years by providing modern facilities like debit and credit card.
These facilities also attract more customers to avail banking services by depositing their
savings in SBI and getting interest on one hand and convenience of payment anytime
and anywhere at the other hand. In the second stage of development of information
technology viz. period from 2001-05, the average net profit came to be Rs. 302527
lakhs (112% increase during five years). In the year 2001-02, almost all branches of
SBI were computerized and worked on core banking solution. Further in year 2004-05
first mobile ATM was launched in remote areas and tourist locations to provide
convenience to customers at far off places. In the same year, RTGS and NEFT facility
were also provided to customers to transfer funds from one place to another. In the
advanced stage of information technology viz. period from 2006-12, the average profit
came to be Rs. 770511 lakhs i.e. 155% further increases over the previous stage. In the
year 2006-07, SBI provided the facility of payment of various bills while in year 2008-
09, internet banking facility was provided to corporate customers. All this is said to
have increased the net profit to 35% (Rs 672919 lakhs in 2007-08 to Rs. 912123 in
2008-09). Further in year 2011-12, SBI also started cash deposit ATM facility at some
122
of the ATMs to deploy large number of cash deposit machines (Bunch Note Acceptors)
to provide customer convenience to deposit cash 24*7. The return on assets of SBI also
shows rising trend from 0.44% in 1990-91 to 0.89% in 2011-12. Similarly, the return
on equity also increased from 13.28% in 1990-91 to 15.72% in 2011-12 with certain
fluctuations. But when before and after information technology implementation period
compared, it found 70% increase in ROA and 36% increase in ROE in first stage and
12% and 5.21% increase in second stage and further 12% increase in ROA and fall of -
10% in ROE in advanced stage of information technology development (Table 4.18).
The other variables like total deposits and advances have also been analysed. The total
deposits of SBI increased from Rs 96395 crores in 1995-96 to Rs 1043647 crores in
2011-12. The total advances of SBI also increased from Rs 59825 crores in 1995-96 to
Rs. 867578 crores in 2011-12. The subjective performance of SBI reveals that like
JKB, PNB, SBI are also customer oriented bank. The level of customer satisfaction and
commitment is high as compared to other public sector banks operating in city.
Customers are satisfied with security and privacy of online transactions as well as with
online payment system that enables them to transfer funds and in paying bills of
different utilities. Managers of SBI find both deposits as well as profits increasing due
to provision of online banking services to its customers. For instance, the effectiveness
of managers also increases by using online systems and they feel very easy and
comfortable in doing their bank jobs. Further to evaluate performance in terms of
online effectiveness, a comparison has been made between subjective and objective
evaluation of business performance. Managers of bank observe that they provide
customer oriented services creating customer satisfaction (MS: 4.50) and customer
commitment (MS: 3.90). The quality of online services delivered is of moderate level
(MS: 3.75) but the level of trust created by bank in the mind of customers shows
highest mean scores (MS: 4.57), as compared to other public sector banks. This all
leads to 42% increase of net profit in one year (Rs 826401 lakhs in 2010-11 to Rs.
1170732 lakhs in 2011-12), highest among all other banks under study and on an
average 154% increase in six years time period (2006-12). But when these responses
are compared with customer responses, it is evident that customers are highly satisfied
(MS:4.28) and committed (MS:4.16) with online banking of SBI as compared to other
public sector banks and are averagely satisfied with quality of online services
(MS:3.64) and trust (MS:3.94). Hence, it is exhibited in Table No.4.22 that although
the current performance is better in relative terms, poor growth prospect adversely
123
affects the value of firm, which means that the average proportion of percentage change
in profit due to online effectiveness (154% increase in advanced stage) is less as
compared to other public sector banks like PNB and UBI. Thus, managers are required
to give preference to customer interest and provides them with latest online services to
make them committed to deal online by rolling out its own network of automated teller
machines as well as developing anytime- anywhere banking services through internet
and other technologies. At last, customer focus and delivering of better service quality
and problem solving approach must be the driving forces behind SBIs operations and
the bank must adapt itself to latest information technology to cater the diverse needs of
online customers.

4.15.5 Business Performance of PNB

Punjab National Bank, the second largest bank of India, also shows growth prospects
year after year and delivers value to its customers and shareholders. The average net
profit of PNB before implementation of internet banking services (1990-95) came to be
Rs. 17960 lakhs. In the year 1999-2000, PNB started providing debit and credit card
facilities to their customers and had tied up with Infosys for a centralised banking
solution. This in turn increased the average net profit by 55% in the first period and by
213% in the next period of development of advanced technology. In the same period,
the bank also widened its scope for providing RTGS, NEFT facilities to their customers
for transfer of funds. Furthermore, in year 2005-06, the bank had tied up with Indian
Airlines for online booking of Air tickets while in the preceding years, the bank had
tied up with various online merchants like BSNL, LIC etc to provide online payment of
premiums and bills to facilitate customer service which further increased the average
net profit to 278%. It is also exhibited in table that ROA has significantly gone up from
0.64% to 1.19% in year 1991 to 2012. The ROE also increased significantly from
12.87% to 19.80% in the same period. In this way, it seems that profitability of bank is
quite satisfactory and bank will continue its focus on sustaining high earning
performance and keeping strict control on costs and revenue maximisation by adopting
latest information technologies in delivering services to its customers and thus
increases returns to its shareholders. The subjective performance of PNB reflects that
the level of customer satisfaction is high because PNB offers complete e- bouquet of
internet banking services to around 11 lac corporate internet banking users. Also PNBs
internet banking is witnessing a steady shift of customers for transfer of funds, inter-
124
bank remittances and payment towards various services. For Punjab National Bank,
customer is the king and to satisfy him is the main motivating factor which induces
them to offer wide array of services through internet. The level of quality services
delivered online is also high in PNB as compared to other public sector banks. PNB
tries its best to provide error-free services in order to meet its objective of customer
satisfaction. It also adopts problem solving approach in delivering online services to
their customers and tries their best to give accurate representation to it. This shows that
PNB always has customer interest in mind and they always provide user friendly
service, competitive and seamlessly integrated across channels. In addition to this, the
managers performance measured in terms of perceived usefulness and perceived ease
of use is also high in PNB bank. Managers of PNB feel that with the implementation of
internet facilities in their banking operations, it becomes very easy for them to do their
job which helps to accomplish their tasks quickly and hence improves their efficiency
and effectiveness in banking career. Moreover, they also find interaction with web
pages clear and understandable and hence become skilful at navigating the web pages
of their banks site. Similarly, managers also revealed that they provide better quality
online services (MS: 4.50), creating customer satisfaction (MS: 4.36) and customer
commitment (MS: 3.77). Whereas, customers of PNB find level of trust (MS: 4.08) and
online service quality (MS: 3.93) as the influential factors motivating them to use
advanced services of bank. Moreover, the level of customer satisfaction (MS: 3.94) and
customer commitment (MS: 4.06) are highest from UBI and Canara Bank but lowest
from SBI. It is also consistent with the results measured objectively, reflecting
percentage of increase in one year time period is highest when compared with UBI and
CB and lower than SBI. But when it is compared on an average performance, it is
found that PNB leads in terms of percentage growth in profits from all other public
sector banks under study (Table: 4.22). On the whole, PNBs customer oriented
philosophy indicates that the bank provides accurate and up to date information of
various transactions conducted online which helps them to make better financial
decisions regarding their banking transactions. The bank has taken adequate steps in
strengthening their anti- phising mechanism and monitoring process thereof to prevent
online frauds. PNB also implemented site to user functionality of transaction
monitoring solution (IBS shield) for securing the interest of the internet banking
customers. Thus to conclude, Punjab National Bank, which figured as one of the top
five banks in India according to The banker magazine, London will continue to make
125
investments in technology, new products, risk management and towards expanding
franchise value. This investment will facilitate the bank to retain competitive
advantage. Further PNB has worked assiduously to build its front line position,
constantly reinvesting itself to keep pace with the changing banking landscape and
customer preferences. While successfully managing change, the bank has remained
deeply rooted in the principles of good banking. Resultantly, the fundamentals of the
bank have strengthened the bank to meet the challenges and touch new frontiers in
business growth and performance in future. Also the transactions conducted through
alternative delivery channels (ADC) such as ATM/Debit card/RTGS/NEFT etc
registered considerable growth as more than 28% of the transactions are conducted
through ADC mode. For maintaining customer satisfaction, PNB also provides
customer compensation policy to compensate customers for the losses suffered by them
due to deficiency in customer services. Thus, the efforts of the bank for providing best
value for money indicates that customers find worth dealing with this bank both
socially and financially.

4.15.6 Business Performance of Union Bank of India

Union Bank of India (UBI), the countrys fifth largest bank in terms of its size, also
shows momentous growth in terms of net profit, ROA and ROE. As similar to other
banks, the average net profit of Union Bank of India increased by 70.79%, from 9458
lakhs in 1990-95 to 16154 lakhs in 1996-2000. In the next period of advancement, the
bank had tied up with two IT companies to develop core banking solution and by the
end of year 2002, the bank launched core banking solution providing anytime
anywhere banking. In addition to this, the bank also launched Union bill pay, a
convenient utility bill payment service for the convenient of its customers. Further, in
year 2005, the bank started providing international debit and credit card in association
with VISA to its customers. Thus, provision of all these facilities further increased the
average net profit by 203% in the next subsequent period. Moreover, in advanced stage
of development, the bank used all alternate delivery channels such as ATMs, internet
banking, SMS banking etc as important tools to optimize customer satisfaction, leading
to further average 207% increase in profit from the previous period (Table:4.20). The
ROA and ROE also increased significantly except in year 2005-06 and 2011-12. Both
of the ratios fall because of sharp rise in assets for expansion in year 2005-06 and
further because of slackened business growth in 2011-12. The subjective performance
126
of bank reveals that its managers find their bank having up to date equipment and
technology to offer online banking services to its customers. They are also satisfied
with security system of the bank for conducting online banking transactions such as
NEFT, RTGS etc. The bank managers also feel that with the implementation of online
facilities, they are able to accomplish their tasks quickly and find their banking job easy
and advantageous. On the other hand, customers are satisfied (MS: 3.92) and
committed (MS: 3.26) to online services, as the quality of delivered services (MS: 3.21)
is slow and not as competent as PNB, leading to average level of growth (207%) in
profits of bank. Thus, to conclude, its business performance is improving year after
year. For improving customer satisfaction and their commitment to these services, bank
must try to provide wide array of services delivered with relevant speed to meet the
requirements of various customers.

4.15.7 Business Performance of Canara Bank

Canara Bank, incorporated in 1906 and nationalised in 1969, also takes initiative to
remain customer focussed. Like other banks, Canara Bank also shows higher profits in
post e-banking period as compared to pre e-banking period, having positive impact on
technology (Uppal, 2011). In the second period of advancement (2001-05), Canara
Bank undertakes several technology initiative to fulfil advanced customer needs. It was
in the year 2003-04, that the bank had started its internet banking and further in year
2004-05, almost all the branches of bank were computerized and working on core
banking solution. In the next phase of e-banking period, the bank provides mobile
banking, online transfer, pass book printing self service and financial supply chain
management facility to its corporate customers. The rate of return on asset of Canara
bank also shows rising trend from 0.43% in 2000-01 to 1.42% in 2010-11 and then falls
to 0.95% in 2011-12. Similarly, the return on equity also shows the same result as it
increases from 10.54% in 2000-01 to 23.20% in 2010-11 and then declines to 18.35%
in 2011-12. This sharp decline in both the parameters is not due to growth in
information technology but due to slackened business growth and increase of stressed
assets at the industry level. Thus, in spite of all these stressed conditions, the bank
shows robust performance on the business front, coupled with unprecedented gains in
profits and profitability, continued buoyancy in core business operations and cost
containment, thus helped the bank to sustain and enhance top line earnings while
maintaining a stronger bottom line. The bank also shows growth in terms of its number
127
of branches, ATMs and increased online customers. Its subjective performance reveals
that Canara bank is also customer oriented and generates customer satisfaction by
providing privacy and security to all banking transactions. The bank also provides its
customers all the relevant information about all products and services in their respective
websites. Similarly, when performance of managers of Canara bank is evaluated, it is
found that they find it very easy to do their job by implementing internet facilities in
their operations. Further, they also find interaction with web pages clear and
understandable and thus become skilful in navigating the web pages of their banks site,
thus enhancing their effectiveness in their respective jobs as well as in their banking
career. Similarly, like other banks, they also believe that both deposits and profits have
enhanced due to online banking facilities. In addition to this, when these responses are
compared with customer responses, it is found that customers are moderately satisfied
(MS: 3.65) and committed (MS: 3.54) with online operations of Canara bank.
Moreover, customers find although the charges levied by bank are less as compared to
private sector banks but the quality of online services is of average value (MS: 3.69),
thus reflecting, almost average business growth (165%) as compared to other banks
under study. On the whole, it is found that this bank shows almost average
improvement in terms of profitability and customer satisfaction.

4.15.8 Overall Business Performance of Indian Banks

The financial performance of various public sector banks reveals that State Bank of
India, which is the first largest bank of the country, leads all the banks in terms of
profitability followed by Punjab National Bank, Canara Bank and Union Bank of India.
In spite of higher profits, SBI does not provide greater returns on assets and equity. The
higher returns among public sector banks is provided by PNB followed by Canara Bank
and UBI. Similarly, when the financial performance of private sector banks is analysed,
it is found that ICICI Bank leads in terms of profitability followed by HDFC Bank and
Jammu and Kashmir Bank. The highest return on equity is provided by J&K Bank
followed by HDFC Bank and ICICI Bank whereas the highest return on assets is
provided by HDFC Bank followed by J&K Bank and ICICI Bank. But the deposits and
advances of all the banks under study increase with the development of advanced
technology.

128
4.16 Conclusion
The main findings of the chapter reveal that majority of the responding banks find their
customers satisfied with internet banking services. They trust their banks for providing
all the relevant information about all products and services online. The banks have
adopted internet banking facilities a decade and few years back and ICICI Bank is the
first bank to adopt internet banking in its operations. But now a days, almost all the
banks have realised the need to maintain their customers data base and their resources
better in order to provide wide array of products and services to their customers. In
general, there is a positive attitude of almost all the bank managers. Moreover, the
overall mean values awarded by J&K Bank, SBI, PNB, ICICI Bank, HDFC Bank, UBI
and Canara Bank reveal that in the case of public sector banks, SBI leads in terms of
amount of profitability, customer satisfaction and commitment, as it is the largest and
oldest bank in the country. Whereas PNB leads in terms of online effectiveness and has
higher proportionate average increase in profits as compared to SBI. Similarly, in case
of private sector bank, HDFC Bank, followed by ICICI Bank, has a better impact on
customer satisfaction and business performance as reflected by more than above
average mean scores obtained by various dimensions viz. Perceived Usefulness, Trust,
Customer Satisfaction, Commitment, Service Quality and Perceived Ease of Use as
well as by percentage of growth in their profits. The above analysis also reveals that
PNB and HDFC Bank offer better customer oriented services to suit the needs of
various customers online. But the level of commitment is highest in JKB, as private
sector bank and in SBI, as public sector bank. Also the quality of online services
offered by ICICI Bank is much better than services offered by other banks and they
tried their best to make their customers committed to deal online.

129
Table 4.1: Demographic Profile of Bank Managers
Respondents Profile Number Percentage
Gender
Male 98 68%
Female 46 32%
Age
Above average 85 59%
Average 4 2.8%
Below Average 55 38.2%
Qualification
Graduate 62 43%
Post Graduate 42 30%
Professionals 40 27%
Length of service
0-5 years 22 15.27%
5-10 years 11 7.64%
10-15 years 14 9.73%
15 and above 97 67.36%

Table 4.2: Process of Data Reduction

Rounds Variance Items No of Iterations No of KMO Bartlett
Explained Emerged Factors Items
Extracted Deleted
1 77.692 100 23 75 36 0.776 12338.45
2 74.452 64 16 56 8 0.838 6466.14
3 75.461 56 15 19 6 0.8333 5562.88
4 76.538 50 14 38 2 0.837 4909.55
5 75.793 48 13 10 2 0.838 4698.92
6 74.934 46 12 13 1 0.838 4518.71
7 75.194 45 12 10 1 0.838 4381.14
8 75.486 44 12 8 1 0.836 4225.67
9 74.475 43 11 8 1 0.840 4185.40
10 74.879 42 11 8 1 0.836 4054.86
11 75.255 41 11 8 1 0.837 3904.23
12 74.277 40 10 8 10 0.842 3871.95
13 76.202 30 8 8 - 0.846 2922.38

130
Table 4.3: Factorial Profile of Data from Bank Managers
Variables Mean Standard Factor Eigen % of
deviation Loadings Values Variance
Explained
Factor 1 Perceived Usefulness 10.207 16.381
Helps to accomplish tasks quickly 4.40 .83 .797
Improves job performance 4.44 .87 .762
Enhances effectiveness of job 4.50 .70 .771
Easier to do job 4.53 .70 .773
WWW useful 4.39 .85 .712
Transaction is advantageous 4.36 .86 .667
Various information are easily 4.34 .80 .600
available
Enhance effectiveness in banking 4.45 .80 .657
career
Factor 2 Trust 3.609 12.565
Bank has strongly commitment to 4.56 .59 .801
security measures
Bank ensures that transaction 4.51 .61 .801
information is protected during a
connection
Banks web page offers all the 4.44 .70 .769
relevant information about all
products & services.
Bank does not allow any third 4.54 .74 .828
person to access customers
personal information
Banks login process is secure 4.48 .83 .658
Factor 3 Customer Satisfaction 2.048 11.373
Website provides clear transaction 4.31 .86 .772
and price information
Website provides accurate and 4.40 .78 .697
upto date information to its
customers
Website provides privacy and 4.48 .70 .723
security to customer transaction
Website deals with customer order 4.32 .76 .655
fast enough
Customers are satisfied with 4.33 .83 .734
online payment system
Factor 4 Commitment 1.754 10.333
It pays of economically to be a 4.09 1.08 .758
customer of your bank

131
Customers are committed to buy 3.97 1.20 .898
from your bank
Commitment is due to reasonable 4.05 1.04 .759
price of bank
Customers are committed because 4.12 .97 .799
of banks performance
Factor 5 Better Facilities 1.507 6.983
Banks deposits have been 4.02 1.08 .862
increased by using online system
Banks profits have been increased 4.01 1.09 .846
by providing facilities to
customers
Factor 6 Service Quality 1.400 6.294
Bank has upto date equipment and 4.40 .71 .886
technology
Bank provides online services to 4.53 .61 .864
its customers.
Factor 7 Perceived Ease of Use 1.268 6.166
Find interaction with web pages 4.31 .70 .866
clear & understandable
Find easy to become skilful at 4.34 .70 .852
navigating the web pages
Factor 8 Profitability 1.067 6.106
Administrators can quickly 4.31 .76 .792
determine the profitability of
major customers
Administrators can quickly 4.33 .78 .717
determine the profitability of
various schemes

132
 Table 4.4: Demographic Profile-wise ANOVA results
Factors Age wise Qualification wise Length of Service
wise
F Sig. F Sig. F Sig.
Perceived Usefulness .001 .980 .079 .924 1.125 .341
Trust .408 .524 3.445 .035 .541 .655
Customer Satisfaction 1.232 .269 .112 .894 .354 .786
Commitment .232 .631 .362 .697 .504 .680
Better Facilities .758 .386 1.482 .231 2.594 .055
Service Quality .203 .653 .802 .450 .125 .945
Perceived Ease of Use .340 .561 .605 .547 .845 .471
Profitability 4.548 .035 1.115 .331 .732 .534

Table 4.5: Demographic Group Wise Mean Values

FACTOR AGE QUALIFICATION LENGTH OF SERVICE
Below Average Above G PG PF 0-5 5-10 10-15 15
Average Average years years years years
and
above
Perceived 4.43 4.58 4.43 4.43 4.45 4.39 4.27 4.51 4.65 4.42
Usefulness
Trust 4.55 4.40 4.48 4.37 4.57 4.66 4.62 4.54 4.38 4.50

Customer 4.29 4.33 4.42 4.39 4.34 4.34 4.27 4.25 4.44 4.38
Satisfaction
Commitment 4.09 3.83 4.01 3.99 4.01 4.15 3.94 4.34 3.91 4.05
Better 3.93 4.50 4.08 4.15 4.03 3.80 3.79 3.36 4.32 4.10
Facilities
Service 4.44 4.00 4.49 4.40 4.47 4.56 4.52 4.45 4.39 4.46
Quality
Perceived 4.37 4.66 4.30 4.32 4.26 4.42 4.22 4.22 4.57 4.33
Ease of Use
Profitability 4.48 4.66 4.22 4.28 4.26 4.47 4.45 4.50 4.42 4.26

133
Table 4.6: Bank wise ANOVA Results
Factors Bank Wise
F Sig
Perceived Usefulness .652 .688
Trust .589 .739
Customer satisfaction 2.124 .054
Commitment 2.604 .020
Better facilities 3.825 .001
Service quality 3.630 .002
Perceived ease of use 1.278 .271
Profitability 1.042 .401

Table 4.7: Bank wise cum Factor wise Mean

Factors J&K SBI PNB ICICI HDFC UBI Canara
Perceived 4.41 4.51 4.50 4.19 4.55 4.12 4.53
Usefulness
Trust 4.46 4.57 4.44 4.65 4.80 4.51 4.35
Customer 4.29 4.64 4.33 4.40 4.68 3.85 4.10
Satisfaction
Commitment 4.19 4.02 3.76 4.38 4.10 2.86 4.12
Better 4.10 4.51 3.70 4.05 3.14 3.07 3.87
Facilities
Service 4.36 4.71 4.50 4.83 4.78 4.07 3.75
Quality
Perceived 4.24 4.46 4.42 4.44 4.71 3.92 4.25
Ease of Use
Profitability 4.29 4.50 4.27 4.27 4.71 3.92 4.12

134
Table 4.8: Summary of regression analysis showing impact of different dimensions
and factors on Customer Satisfaction , Customer Commitment and Business
Performance
Dependent Independent R R2 Adj. B T F Sig. S.E.
R2
Customer HO1: .414 .171 .165 .414 5.415 29.324 .000 .112
Commitment Customer
Satisfaction
Profitability H02: .283 .080 .073 .283 3.510 12.319 .001 .094
Service
Quality
Customer HO3: Trust .434 .188 .182 .434 5.736 32.902 .000 .086.
Satisfaction
Customer HO4: .348 .121 .115 .348 4.423 19.559 .000 .084
Satisfaction Service
Quality
Profitability HO5: .340 .116 .109 .340 4.307 18.550 .000 .085
Perceived
Ease of Use
Profitability HO6: .470 .221 .215 .470 6.342 40.224 .000 .085
Perceived
Usefulness

Table 4.9: Results of Various CFA Fit Indices

Constructs CMIN/DF GFI AGFI RMR RMSEA CFI TLI
PU 1.581 .962 .909 .019 .064 .988 .977
Trust 0.472 .996 .981 .006 .012 1.000 1.013
CS 1.329 .989 .947 .010 .048 .997 .991
Commitment 1.057 .993 .964 .017 .020 1.000 .999
Profitability 1.021 .997 .985 .016 .023 1.000 1.000

135
 Table 4.10: Reliability and Validity of Latent Constructs
Constructs Convergent Validity/AVE Construct reliability
PU .510 .937
Trust .610 .938
CS .600 .900
Commitment .653 .818
Profitability .464 .839
SQ .536 .823
PEOU .895 .854

Table 4.11: Split Half Reliability

Before Factor Analysis After Factor Analysis
Group 1 4.34 4.35
Group 11 4.31 4.33
Cronbachs Alpha 0.965 0.919

Table 4.12: Discriminant Validity of Latent constructs

PU Trust CS CMT BF SQ PEOU
PU 0.51
Trust .252** .61
(0.063)
CS .552** .434** .60
(0.304) (0.188)
CMT .341** .454** .414** .653
(0.116) (0.206) (0.171)
BF .370** .199* .389** .185* .464
(0.136) (.039) (.151) (.034)
SQ .250** .383** .348** .256** .234** .536
(0.062) (.146) (.121) (.065) (.054)
PEOU .534** .212* .450** .260* .218* .137* .895
(0.285) (.045) (.202) .0.06 (.047) (.018)

Diagonal axis show average variance extracted. Values within parenthesis are
squared correlation between the dimensions and values without parenthesis are
actual correlation values, **sig. at 0.01 level, * sig. at 0.05 level

136
Table 4.13: Various Stages of Structural Modelling
Stages CMIN/DF GFI AGFI RMR RMSEA CFI TLI DEL Addition
1 6.97 .886 .710 .085 .204 .776 .572 -
2 5.14 .915 .761 .061 .170 .859 .703 - PEU-CS
3 3.48 .942 .821 .050 .132 .924 .822 - PU-CS
4 1.80 .973 .905 .037 .084 .943 .978 - T-CMT
5 1.83 .976 .903 .036 .076 .980 .940 - SQ-BF

Table 4.14: Results Of Hypothesis Testing Through SEM

Variables P.value SRW Results
Commit<-CS .000 .404 Accepted
CS<-Trust .000 .363 Accepted
CS<-SQ .004 .219 Accepted
PEOU<-EP .000 .546 Accepted
PU<-EP .000 .978 Accepted
BP<- CS .000 .440 Accepted

Table 4.15: Profitability Measures of Jammu and Kashmir Bank

Parameters 1990-95 1996-2000 2001-05 2006-12

Net Profit (In Lakh)
(Mean Values) Rs.1695 Rs.5987 Rs. 25730 Rs.45050
% Increase 253% 329% 75%
ROA
(Mean Values) 1.004% 1.15% 1.498% 1.145%
% Increase 14.54% 30.26% -23%
ROE
(Mean Values) 13.78% 20.14% 25.15% 16.69%
% Increase 46% 24.8% -33.6%
Advance (In Crore)
(ean Values) Rs. 107786 Rs.233708 Rs.799996 Rs. 2195776
% Increase 116% 242% 174%
Deposits(In Crore)
(Mean Values) Rs.221564 Rs.526038 Rs.1581209 Rs.3507661
% Increase 137% 200% 122%

137
Table 4.16: Profitability Measures of HDFC Bank
Parameters 1996-2000 2001-05 2006-12
Net Profit (In Lakh)
(Mean Values) Rs.6628 Rs. 41396 Rs.255565
% Increase 524% 517%
ROA
(Mean Values) 1.69% 1.508 1.455%
% Increase -10% -3%
ROE
(Mean Values) 19.98% 20.26% 17.69%
% Increase 1.40% -12%
Advance (In Crore)
(Mean Values) Rs.130973 Rs.870127 Rs. 2307852
% Increase 564% 165%
Deposits(In Crore)
(Mean Values) Rs.309986 Rs.2501283 Rs.6171952
% Increase 706% 146%

Table 4.17: Profitability Measures of ICICI Bank

Parameters 1996-2000 2001-05 2006-12
Net Profit (In Lakh)
(Mean Values) Rs.5510 Rs. 105357 Rs.417254
% Increase 1812% 296%
ROA
(Mean Values) 0.84% 1.104 1.21%
% Increase 31.42% 9.60%
ROE
(Mean Values) 16.95% 17.35% 10.82%
% Increase 2.35% -37%
Advance (In Crore)
(Mean Values) Rs.16687 Rs.521692 Rs. 2053221
% Increase 3026% 293%
Deposits(In Crore)
(Mean Values) Rs.41286 Rs.529119 Rs.2202129
% Increase 1181% 316%

138
Table 4.18: Profitability Measures of State Bank of India

Parameters 1990-95 1996-2000 2001-05 2006-12

Net Profit (In Lakh)
(Mean Values) Rs.55836 Rs.142428 Rs. 302527 Rs.770511
% Increase 155% 112% 154%
ROA
(Mean Values) 0.418% 0.712% 0.798% 0.892%
% Increase 70% 12% 12%
ROE
(Mean Values) 12.24% 16.67% 17.54% 15.62%
% Increase 36% 5.21% -10%
Advance (In Crore)
(Mean Values) Rs. 40820 Rs. 75351 Rs. 146492 Rs. 544922
% Increase 84% 74% 271%
Deposits(In Crore)
(Mean Values) Rs. 71298 Rs.140809 Rs. 299035 Rs.562534
% Increase 97% 112% 88%

Table 4.19: Profitability Measures of Punjab National Bank

Parameters 1990-95 1996-2000 2001-05 2006-12

Net Profit (In Lakh)
(Mean Values) Rs.17960 Rs.27988 Rs. 87740 Rs.304880
% Increase 56% 213% 247%
ROA
(Mean Values) 0.646% 0.74% 0.946% 1.23%
% Increase 15% 28% 30%
ROE
(Mean Values) 14.14% 19.50% 21.28% 19.91%
% Increase 38% 9% -6%
Advance (In Crore)
(Mean Values) Rs. 10867 Rs.16881 Rs.42052 Rs. 166844
% Increase 55% 149% 296%
Deposits(In Crore)
(Mean Values) Rs.21412 Rs.36272 Rs.77430 Rs.225368
% Increase 69% 113% 191%

139
Table 4.20: Profitability Measures of Union Bank of India

Parameters 1990-95 1996-2000 2001-05 2006-12

Net Profit (In Lakh)
(Mean Values) Rs.9458 Rs.16154 Rs. 49068 Rs.151115
% Increase 70.79% 203% 207%
ROA
(Mean Values) 0.524% 0.45% 0.918% 1.05%
% Increase -14% 104% 14%
ROE
(Mean Values) 13.57% 12.07% 18.96% 18.58%
% Increase -11% 57% -2%
Advance (In Crore)
(Mean Values) Rs. 62891 Rs.108094 Rs.267868 Rs. 1049644
% Increase 71% 147% 291%
Deposits(In Crore)
(Mean Values) Rs.134032 Rs.240386 Rs.463639 Rs.1424579
% Increase 79% 92% 207%

Table 4.21: Profitability Measures of Canara Bank

Parameters 1990-95 1996-2000 2001-05 2006-12

Net Profit (In Lakh)
(Mean Values) Rs.15460 Rs.21281 Rs. 89858 Rs.239021
% Increase 37% 322% 165%

ROA
(Mean Values) 0.61% 0.546% 1.01% 1.09%
% Increase -11% 84% 8%
ROE
(Mean Values) 8.58% 8.77% 21.77% 18.69%
% Increase 2% 148% -14%
Advance (In Crore)
(Mean Values) Rs. 94894 Rs.174820 Rs.418980 Rs. 1480687
% Increase 84% 139% 253%
Deposits(In Crore)
(Mean Values) Rs.207216 Rs.371386 Rs.758094 Rs.2078987
% Increase 79% 104% 174%

140
Table 4.22: Bank wise objectively and subjectively comparison of performance
Dimensions JKB HDFC ICICI SBI PNB UBI CB
/ banks
SQ BM 4.35 4.78 4.75 3.75 4.50 4.07 3.70
CR 3.69 4.22 4.37 3.69 3.93 3.21 3.67
Trust BM 4.42 4.79 4.60 4.57 4.44 4.50 4.35
CR 3.89 4.57 4.50 3.94 4.08 3.92 3.98
CS BM 4.26 4.68 4.56 4.50 4.36 3.83 4.10
CR 4.04 3.66 4.11 4.28 3.94 3.92 3.65
CC BM 4.18 4.08 4.35 3.90 3.77 2.99 4.12
CR 3.91 2.96 3.51 4.16 4.06 3.26 3.54
PEOU BM 4.24 4.71 4.44 4.46 4.42 3.92 4.25
CR 4.23 3.87 4.12 4.14 4.13 4.40 4.25
PU BM 4.41 4.55 4.19 4.51 4.45 4.12 4.53
CR 4.21 4.19 4.33 4.36 4.49 4.40 4.56
Average Net Profit of three development stages (In Lakhs)
1996-2000 Rs.5987 Rs.6628 Rs.5510 Rs.142428 Rs.27988 Rs.16154 Rs.21281
2001-2005 Rs.25730 Rs.41396 Rs.105357 Rs.302527 Rs.87740 Rs.49068 Rs.89858
330% 524% 1812% 112% 213% 203% 322%
2006-2012 Rs.45050 Rs.255565 Rs.417254 Rs.770511 Rs.304880 Rs.151115 Rs.239021
75% 517% 296% 154% 247% 207% 165%

141
 References
Abukhzam, M. And Lee, A. (2010). Factors affecting bank staff attitude towards
e-banking adoption in Libya. The Electronic Journal on Information systems in
Developing Countries, 42(2), 1-15.
Aggarwal, S., Erramilli, M.K., Y.Dev, C.S. (2003). Market orientation and
performance in service firms: Role of innovation. Journal of Services Marketing,
17(1), 68-82.
Aghdasi, M., Persson, L., Ghasemi, R. (2006). Casual relations between strategic
values and E-banking adoption in IRAN with a comparison view between state
and private owned banks. National Industrial Conference, Tehran.
Akinbola Agboola (2005). Information and communication technology (ICT) in
banking operations in Nigeria- An evaluation of recent experiences. Ife Journal of
Economics and Finance, 5(1&2), 1-24.
Alam Mahtab and Ankita M Soni (2012). Customer satisfaction of internet
banking and theory of big push: An analytical study with special reference to
selected customers in Vadodara city. Ninth AIMS International Conference on
management, 941-947.
Banker, R.D. and Natarajan, R. (2008). Evaluating contextual variables affecting
productivity using data envelopment analysis. Operations Research, 56(1), 48-58.
Bashir, A. (1999). Risk and Profitability measures in Islamic Banks: The case of
two Sudanese banks. Islamic Economic Studies, 6(2), 1-24.
Bradley L. And Stewart K. (2003). Delphi study of internet banking. MCB UP
Limited, 272-281.
Casalo V. Luis, Carlos Flavian and Miguel Guinaliu (2007). The role of security,
privacy, usability and reputation in the development of online banking. Online
Information Review, 31(5), 583-603.
Cronin, J. (1998). Banking and Finance on the internet. John Wiley and Sons,
NY.
Dandapani, K., Krels, G.V. and Lawrence, E.R. (2008). Internet banking services
and credit union performance. Managerial Finance, 34(6), 437-447.
Davis, F.D., Bagozzi, R.P. and Warshaw, P.R. (1989). User acceptance of
computer technology: A comparison of two theoretical models. Management
Science, 35(8), 982-1003
David, B. (1987). Competitive viability in banking: Scale, scope and product mix
economies. Journal of monetary economy, 20(3), 501-520.
Durkasree, P. and M. Ramesh (2011). Service quality in online marketing:
Customer centric analysis. Perspectives of Innovations, Economics and Business,
7(1), 27-34.

142
 Fornell, C., Larcker, D.F. (1981). Evaluating structural equation models with
unobservable variables and measurement error. Journal of Marketing Research,
18(1), 39-50.
Epstein, Marc J. (2004). Implementing E-commerce strategies: A guide to
corporate success after the Dot.Com.Bust (1 ed): Praeger.
Fredriksson, Odd (2005). Relationship and loyalty attitude differences among
Swedish retail bank clients: E-Banking versus branch office users. New York:
Free Press.
Goudreau, R. (1992). Commercial banks profitability rises as interest margins and
securities sales increases. Economic Review: Federal Reserve Bank of Atlanta,
33(1).
Hamadi Chakib (2010). The impact of quality of online banking on customer
commitment. Communications of the IBIMA.
Hair, Jr., J.F. Anderson, R.E. Tatham, R.L. and Black, W.C. (1995). Multivariate
Data Analysis with readings, 4th edition. Englewood Cliffs, New Jersey, Prentice
Hall.
Hair, Joseph F, William, C. Black, Berry J. Babin, Rolph E. Anderson and Ronald
L. Tatham (2009). Multivariate Data Analysis. 6th Ed. New Delhi: Prentice Hall.
Herington, C. and Weaven, S. (2007). Can banks improve customer relationships
with high quality online services. Managing Service Quality, 17(4), 404-414.
Hickman, M. (1999). Internet banking: Transactions to active selling. Bank
Systems and Technology, 36(10), 846-878.
Jap, Sandy D. and Shanker Ganessan (2000). Control mechanisms and
relationship life cycle: Implications for safeguarding specific instruments
and developing commitment. Journal of marketing research, 37(1), 227-
245.
Kashyap Monika and Dinesh Kumar Sharma (2012). Internet banking: Boon or
Bane. Gian Jyoti e- Journal, 1(2), 1-16.
Kassim, N.M. and Abdullah, A.K.M.A (2006). The influence of attraction on
internet banking: an extension to the trust relationship commitment model.
International Journal of Bank Marketing, 24(6), 424-442.
Kour Rimpi (2012). An impact of IT on branch productivity of Indian banking in
the era of transformation. Journal of Internet Banking and Commerce, 17(3), 1-
11.
Kumbhar M. Vijay (2011). Factors affecting the customer satisfaction in e-
banking: Some evidences from Indian banks. Management Research and
Practice, 3(4), 1-14.

143
 Laudon, D.P. and Laudon, J.P. (1991). Business information system: A problem
solving approach. New York, HBJ, College publishers.
Lee Kun Chang (2007). Transfer from offline trust to key online perceptions: An
empirical study, IEEE Transactions of Engineering Management, 54(4), 729-741.
Lee Ming Chang and Ing San Hwan (2005). Relationship among service quality
and profitability in the Taiwanese banking industry. International Journal of
Management, 22(4), 635-648.
Malhotra, Naresh K. (2007). Marketing Research- An Applied Orientation. New
Delhi :Pearson Education
Mavri, M.and G.I.Oannou (2006). Consumers perspectives on online banking
services. International Journal of Consumer Studies, 30(6), 552-560.
Mcknight, D.H., Choudhury, V., and Kacmar, C. (2002). Developing and
validating trust measures for e-commerce: An Integrative Typology. Information
Systems Research, 13(3), 334-359.
Morgan Robert M and Shelby D. Hunt (1994). The commitment trust theory of
relationship marketing. Journal of Marketing, 58(2), 20-38.
Musiime Andrew and Malinga Ramadhan (2011). Internet banking, consumer
adoption and customer satisfaction. African Journal of Marketing Management,
3(10), 261-269.
Munhurrun, P. And Naidoo, P. (2000). The impact of internet banking service
quality on satisfaction and behavioural intention. Available at www. The ibfr.com
Nguyen Thang Quang (2007). Quality Innovation: Driving forces and
implications for production, trade and consumption. Published Thesis.
Novak, T.P., Hoffman, D.L. and Peralta, M. (1999). Building consumer trust in
online environments: the case for information privacy. Communications of the
ACM, 40(4), 80-85.
Odumeru Adetunji James (2010). Diffusion of online recruiting technology in
Nigeria. Online Journal of Social Sciences Research, 1(4), 104-114.
Parasuraman A., Grewal, D. (2000). The impact of technology on the quality-
value-loyalty chain: A research agenda. Journal of Academic Market Science,
28(1), 168-174.
Perumal, V. and Shanmugan (2004). Internet banking: Boone or Bane. Journal of
Internet Banking and Commerce, 19(3), 1-6.
Pikkarainen, T., Pikkarainen, K., Karjaluoto, H., Pahnila, S. (2004). Consumer
acceptance of online banking: an extension of the technology acceptance model.
Internet Research, 14(3), 224-235.
Seitz, J. And Stickel, E. (1998). Internet banking-An overview. Journal of
Internet Banking and Commerce, 3(1), 1-15.

144
 Selamat, Z., Jaffar, N. and Boon, H.O. (2009). Technology acceptance in
Malaysian banking industry. European Journal of Economics, Finance and
Administrative Sciences, 17(1), 1450-2887.
Shih, H., (2003). Extended technology acceptance model of internet utilization
behaviour. Information and Management, 41(2), 719-729.
Sin, Y.M.L.,Tse, A.C.B., and Yim, F.H.K.(2005). CRM: conceptualization and
scale development. European Journal of Marketing, 39(11/12), 1264-1273.
Soh, C., Man, Q.Y., Gan, F.J., Chew, D., Reid, E. (1997). The use of the internet
for business: The experience of early adoptors in Singapore. Internet Research:
Electronic Networking, Applications and Policy, 7(3), 217-28.
Tulani Dube, Chitura Tofara, Ronyowa Langton (2009). Adoption and use of
internet banking in Zimbabwe: An exploratory study. Journal of Internet Banking
and Commerce, 14(1), 1-13.
Turban, E., J.Lee, D. King and H.M. Shung (2000). Electronic Commerce, a
managerial perspective. Prentice Hall, London, UK.
Uppal, R.K. (2011). E-Age technology-New face of Indian banking industry:
Emerging challenges and new potentials. Journal of Social and Development
Sciences, 1(3), 115-129.
Wang, Y.S., Wang, Y.M., Lin, H.H. and Tang, T.I. (2003). Determinants of user
acceptance of internet banking: An empirical study. International Journal of
Service Industry Management, 14(5), 501-519.
Woherem, E.W. (2000). Information Technology in the Nigerian Banking
Industry. Spectrum, Ibadan.
Wu Hsueh-Ying, Chun- Chun Lin, Cheng- Lung Li and Hsing Hui Lin (2012).
The difference between users and potential users of using online banking.
International Conference on Innovation and Information Management, 36(1), 33-
37.
Yu, C.S. and Lo, Y.F. (2007). Factors encouraging people to adopt online banking
and discouraging adoptors to use online banking services. Proceedings of
Business and Information, Tokyo, Japan. International Conference on Business
and Information.
Zeithaml, Valaria A. (2002). Service quality delivery through web sites: A critical
review of extant knowledge. Journal of the Academy of Marketing Science,
30(4), 362-75.

145
 Chapter 5
Impact of Internet Banking on
Customer Satisfaction
 Chapter 5

Impact of Internet Banking on Customer Satisfaction

Contents Page No

5.1 Introduction 146

5.2 Data Collection 146

5.3 Scale Generation 146

5.4 Profile of Respondents 147

5.5 General Information 147

5.6 Data Purification 147

5.7 Factor Wise Analysis 148

5.8 Demographic Profile Wise Analysis 152

5.8.1 Age Wise Analysis 152

5.8.2 Qualification Wise Analysis 154

5.8.3 Occupation Wise Analysis 155

5.8.4 Income Wise Analysis 155

5.8.5 Length of Association Wise Analysis 157

5.9 Bank Wise Analysis 158

5.10 Confirmatory Factor Analysis 161

5.11 Validity and Reliability 165

5.12 Structural Equation Model 167

5.13 Testing of Hypothesis 169

5.14 Conclusion 170

References 181
 CHAPTER-5
IMPACT OF INTERNET BANKING ON CUSTOMER
SATISFACTION

5.1 Introduction
The fast changing dynamics of global market place, duly further strengthened by
increasingly intense competition, forces the bank to shift from traditional banking to
online banking services (Cheung and Lee, 2005), resulting into emergence of customer
satisfaction as the key to long term success of any banking business. Therefore, specific
understanding on customers perceived requirements and meeting their demands and
expectations is becoming an intricate challenge for banks to provide customer oriented
services. In this context, the present chapter studies the impact of internet banking
facilities on customer satisfaction in both public and private sector banks operating in
Jammu city and also presents a bank wise comparative status of the same.

5.2 Data Collection

The data for the present study have been obtained from secondary and primary sources.
The secondary data were obtained from various available journals such as International
Journal of Bank Marketing, Journal of Internet Research, Journal of Services
Marketing, International Journal of Electronic Commerce, Journal of Internet Banking
and Commerce etc. The primary data were collected from 410 internet banking users
residing in Channi Himmat Colony of Jammu through systematic sampling.

5.3 Scale Generation

The primary data were collected through specifically developed schedule (Annexure -2)
on the basis of the available literature (Wakefield et al., 2004; Cry et al., 2005; Pavlou,
2003; Khan and Mahapatra, 2009; Zeng et al., 2009 etc) and discussion with experts in
the related fields of the study. It comprised of 10 items of general information, 13 items
of peripheral services that banks provide to them and 99 items based on 5 point Likert
scale (5 ---1) ranging from strongly agree (5) to strongly disagree (1) (Malhotra,
2007, p.274) covering the entire domain of the study.

146
5.4 Profile of Respondents
Brief profile of a sample of online bank customers in Jammu city summarised in table
5.1 reveals that out of 410 customers personally contacted in Channi Himmat Colony of
Jammu, 77.5% were male, 36% belonged to the age group of 20-30 years, followed by
26% of respondents between the age group of 30-40 years, 20% between 40-50 years
and 18% belonging to above 50 years of age. About 45% were graduate, 58.5% belong
to service sector, 54% were married and 63% of customers had annual income above
than Rs. 2,00,000.

5.5 General Information

The study finds majority of the respondents having JKB (Jammu and Kashmir Bank) as
their prime bank followed by SBI (24%), PNB (20%), ICICI Bank (8%), HDFC Bank
(7%), UBI (8%), Canara Bank (7%). The study reveals JKB as the most preferred bank
among private sector banks and SBI (24%) as the most preferred one among public
sector banks in Jammu. About 39% of sampled respondents were found to be dealing
online with their prime banks for the last 5 years, 32.6% dealing for last 5-10 years,
21.4% for 10-15 years and 7% for the last more than 15 years. In fact, majority of
respondents start dealing online with their banks in the beginning itself because of
awareness about latest techniques in doing banking transactions at their work place.
However, the most important reason for dealing online is time and cost saving,
followed by 24 hour facility, easy transfer of money within and outside the country.
Approximately, 60% of respondents have Saving Bank Account followed by Current
Account (37%), Recurring Account (1.8%) and FDs (1.2%). Thus, it is evident that
saving bank account is the most common account held by the salaried class with their
prime bank. Almost all the respondents of various banks are availing ATM facilities,
credit cards (60%) and debit card. Also 67.5% of respondents preferred online banking
for electronic transfer of payments.

5.6 Data Purification

Principal Component Analysis (PCA) was run in order to condense the information
from the original large number of variables into a smaller and meaningful set of
variables (Factors), incurring a minimal loss of information. EFA has been used to
analyse the interrelationships among larger number of variables and to explain them in
terms of their common underlying dimensions. It was run overall on a schedule
147
consisting of 99 items. During the process, factor loadings and communalities greater
than 0.5 were considered good and factors with eigen values equal to or greater than
one were retained. The indicators related to internet banking are trust, commitment,
service quality, perceived ease of use, perceived usefulness, behavioural intentions and
customer satisfaction. The twenty items to measure trust in internet banking were factor
analysed, resulting into only seven items converged into two factors viz. trust and
security. The four items of commitment were eliminated for further analysis as these
items had very low loadings. The service quality consists of 25 items and after running
EFA only 12 items got grouped into four factors namely website quality,
responsiveness, better services and courtesy. Six items of both perceived ease of
use and perceived usefulness have been eliminated and remaining items were grouped
into three factors viz. perceived ease of use, perceived usefulness and interactivity.
The four items of behavioural intention have also been eliminated and remaining items
resulted into one factor as behavioural intention. Lastly, twenty items of customer
satisfaction, when factor analysed, resulted in the elimination of 14 items and
remaining got converged in two factors viz. customer oriented services and after
sales services.

5.7 Factor Wise Analysis

Following factors have emerged after factor analysis when all the statements were put
together:-

Factor 1: Website Quality

This factor consists of four items viz. website appealing, valuable information, easy
to use and navigate, information about new deposit schemes. About 79% of
respondents found their banks website very easy to use and navigate (MS: 4.01),
enabling them to access valuable information about the banking transaction online.
About 70% of respondents find information about new deposit schemes etc easily
available in their banks website which helps them in channelising their money in
various sources. Thus, website easiness to use and navigate is the most influential
factor that induce customers to use internet banking facilities and remain active in using
new technology (Ganguli and Roy, 2010; Khurana, 2009). The present findings appear
to be in line with Jayawardhena and Foley (2000) who also found website features as

148
speed, website content and design, navigation, interactivity and security as the factors
influencing user satisfaction in internet banking.

Factor 2: Customer Oriented Services

This factor consists of four variables viz. pleased with bank for providing online
services, website provides innovative deposit schemes, website allows easy transfer
of money, and website provides customer oriented services. Of these variables,
website allows easy transfer of money is found to be significant contributor towards
customer oriented services (Gbadeyan and Gbonda, 2011 and Tulani et al., 2009)
followed by innovative deposit schemes (MS: 4.05). This implies that respondents are
happy to use online banking because of various facilities such as remittance of funds
from one account to another immediately with very less cost and time which is in line
with Auta (2007) who found customers satisfied with e-banking systems due to flexible
advantages such as easy transfers, speedy transactions and cost and time saving
benefits.

Factor 3: Trust
Trust comprises of four variables viz., trust for not using personal information
inappropriately, doesnt allow any person to access anyones personal information,
relevant information about all schemes, website keeps its commitments. About 83%
of respondents trust their prime banks for not using personal information
inappropriately and for not allowing any third person to access their personal
information (MS: 4.16). Singal and Padhmanabhan (2008), Qureshi et al., (2008) and
Manzano et al., (2008) also find customers shifting from traditional banking to online
banking because of security and privacy provided by their respective banks. Thus,
website security and privacy, usability and reputation of the banks create customer
satisfaction and make them committed to use online banking channel (Casolo et al.,
2007; Bander and Charles, 2006).

Factor 4: Commitment
Commitment comprises of three variables viz. visit website if when you need banking
service, links are problem free, accurate and easy page download , banks take care
of problems properly. Out of these three variables, majority of the respondents (89%)
visit their banks website as it is available in the understandable language. Shifting
149
from traditional banking to online banking saves time and cost and facilitates
transactions by sitting anywhere at home or office. Further, respondents are committed
to their banks for online services because the links are problem free and the pages of
the website are downloaded easily. These findings also commensurate with the findings
of Siu and Mou (2005) in which they found credibility, security, and problem handling
attitude of the bankers making the customers satisfied and committed to use internet
banking services.

Factor 5: Courtesy
Factor five consists of two variables viz., administrators are willing to help and
administrators show confidence in customers. About 80% of respondents found their
administrators always helpful in conducting banking transactions online and informing
customers immediately about the status of their respective accounts. This implies
responsiveness of bankers towards their customer as the most important factor in
generating customer satisfaction (Singh and Kour, 2011; Kumbhar, 2011 and
Mohammad and Alhamadani, 2011).

Factor 6: After Sales Service

Factor six comprises of two variables viz. experience with online banking is good,
satisfied with after sales services. About 82% of respondents found their experience
with online banking very good, thus enabling them to do banking conveniently at any
place.

Factor 7: Responsiveness
Responsiveness consists of four variables viz. administrators are never busy to respond
enquiries, administrators are courteous, administrators have all knowledge,
problem solving approach in delivering services. About 75% of respondents found
their bank staff and administrators having all knowledge regarding various services
provided by the bank which assist them in doing transactions online (MS: 3.86). Thus,
the findings are very much in line with many other studies conducted by Ravichandran
et al., (2010); Nupur (2010); Sohail and Shaikh (2007) in which they also found
responsiveness of the bankers in customer problems, assisting customers in doing
transactions online and creating customer satisfaction. Singh and Kour (2011) found
employee responsiveness as the significant factor for generating customer satisfaction.
150
Factor 8: Security
Security comprises of three variables viz. feel confident using online banking
services, bank is capable and proficient, login process is secure. About 83% of
respondents were satisfied with their banks login process and they feel confident and
secured while having transactions online with their banks. These findings are consistent
with the studies of Abdullah et al., (2011); Yousafzai et al.,(2005); Casolo et al.,(2007)
in which they found trust in online banking being created by website security and
safety to customers transactions, reducing security risks and thus improving customer
trust. Further, the banks should also tighten security of online banking and reduce the
associated risk by employing various technologies such as firewalls, authentication,
intrusion detection etc (Zakaria, 2011).

Factor 9: Perceived Usefulness

Factor nine comprises of three variables viz. effectiveness in banking transaction,
doing online banking useful, useful for utilisation of banking services. About 98%
of respondents found online banking very useful for utilising various banking services
(MS: 4.43) (Suki and Suki, 2011; Muhammad et al., 2011; Jalal et al., 2011).

Factor 10: Interactivity

Interactivity consists of two variables viz. enhances effectiveness in information
seeking, site does not make lose time interactivity. About 95% of respondents find
online banking enhancing their effectiveness in information seeking. Yang et al., (2004)
also find information systems enabling the customers to function independently and to
conduct numerous transactions on their own on the banks website.

Factor 11: Perceived Ease of Use

It consists of four variables viz. simple to do banking, website looks professionally
designed, user menus are clearly categorised and laid out in the screen,
demonstrations or guidelines help in doing banking. Out of these four variables,
respondents find online banking easy to use because the user menus are clearly
categorised and laid out in the screen (MS: 4.32). Hanzaee and Sadeghi (2010) also
found convenience, website design, accuracy and accessibility as the factors that
influence internet banking adoption.

151
Factor 12: Behavioural Intentions
It consists of two variables viz. use online banking for banking needs, strongly
recommend other. About 90% of respondents find online banking useful as it is
convenient and saves cost of both customers and banks.

Factor 13: Better Services

Better services consist of two variables viz. call centres have operating hours
convenient to customers and call centres give personalised attention to customers.
About 75% of respondents feel satisfied with the personalised attention of the call
centres in any problem while conducting transaction online. Hawari et al., (2005) also
concludes that call centres of banks provide accurate information about the product and
services and give personalised attention to the customers for conducting online
transactions. Ombati (2010) established direct relationship between technology and
service quality and found customers as quite satisfied with online banking services
because of user friendliness, ease of use and 24 hours operation.

5.8 Demographic Profile Based Analysis

In order to measure the impact of different demographic background of customers on
their satisfaction, respondents were segregated into five groups on the basis of age,
qualification, occupation, income and length of association with banks. (Table: 5.4).
The analysis done through ANOVA is as under:-

5.8.1 Age- wise analysis

The respondents have been classified into four groups on the basis of age viz. 20-30,
30-40, 40-50 and 50 years and above. Each group has significant number of
respondents, thus findings were drawn for each of them. The first group comprised of
highest number of respondents i.e 36% followed by second group (26%), third group
(20%) and the last group consists of 18% of sampled respondents. The results of
ANOVA (Table: 5.5) indicates significant difference existing in the mean satisfaction
of respondents belonging to these four groups (F=11.414, sig<.05). It is discussed as
under:-

152
20-30 years
This group accorded above average mean scores to six factors viz. after sales services
(4.05), security (4.00), perceived usefulness (4.38), interactivity (4.25), perceived ease
of use (4.12) and behavioural intentions (4.02). However, the factors such as courtesy
(3.68) and responsiveness (3.76) have just obtained slightly above average mean scores.
The respondents of this group are more satisfied with perceived usefulness of the
system, perceived ease of use and interactivity and are moderately satisfied with the
attitude of bank administrators in conducting banking transactions online.

30-40 years
This group accorded above average mean scores towards eight factors viz, customer
oriented services (4.32), trust (4.24), after sales services (4.25), security (4.12),
perceived usefulness (4.37), interactivity (4.30), perceived ease of use (4.25) and better
services (4.10). Thus, respondents of this group are more satisfied with perceived
usefulness, customer oriented services, interactivity and perceived ease of use and are
moderately satisfied with commitment (3.96), responsiveness (3.95) and behavioural
intentions (3.72).

40-50 years
This group accorded above average mean scores to seven factors viz. website quality
(4.06), customer oriented services (4.01), trust (4.03), security (4.17), perceived
usefulness (4.36), interactivity (4.25) and perceived ease of use (4.31). Thus, it can be
apprehended that respondents of this group are more satisfied with perceived usefulness
and perceived ease of use and are moderately satisfied with better services (3.51) and
commitment (3.73).

Above 50 years
The respondents of this group accorded above average mean scores towards two factors
only viz. perceived usefulness (4.35) and interactivity (4.16). However, almost average
scores were accorded to the remaining factors viz. website quality (3.50), customer
oriented services (3.93), trust (3.82), commitment (3.95), courtesy (3.27), after sales
services (3.71), responsiveness (3.23), security (3.97), perceived ease of use (3.93),
behavioural intentions (3.39) and better services (3.60). Thus to conclude, persons
senior in age feel comfortable in doing banking online (Odumeru, 2012).
153
5.8.2 Qualification Wise Analysis
The impact of qualification of respondents has been studied under four groups viz. 12th
standard, graduate, post graduate and professional. Majority of the respondents are
graduate followed by post graduate and holding professional qualification. Due to
negligible number of sampled customers (32) in the first group, it was dropped from
further analysis. The results of ANOVA indicates significant mean difference in the
perceptions of respondents belonging to these four groups (F =4.462, sig<.05). On
further analysis, by applying post- hoc test, there exists maximum mean difference
between graduate and post graduate respondents, which is consistent with the studies of
Karjaluoto et al., (2002); Mattila et al., (2003); Stavins (2001) and Sathye (1999) in
which they found that higher educational respondents adopt internet banking because
they have a higher knowledge of new information technology and skills as compared to
respondents of low education.

Graduate Respondents
This group accorded above average mean scores to seven factors viz. customer oriented
services (4.01), commitment (4.05), after sales services (4.02), security (4.00),
perceived usefulness (4.37), interactivity (4.23) and perceived ease of use (4.07) and
are moderately satisfied with website quality (3.76), trust (3.97), courtesy (3.68),
responsiveness (3.58), behavioural intentions and better services (3.63).

Post Graduate Respondents

This group of respondents accorded above average mean scores towards ten factors viz.
website quality (4.10), customer oriented services (4.25), trust (4.17), commitment
(4.03), after sales services (4.01), security (4.04), perceived usefulness (4.47),
interactivity (4.43), perceived ease of use (4.33) and better services (4.04). Higher
qualified respondents are more satisfied with online banking services due to their
knowledge and experience with the new innovative technologies which save their time
and costs. Wong et al., (2009) also found post graduate respondents having higher
willingness to use e-banking as compared to trade qualified or secondary degree
holders.

154
Professionals
This group accorded above average mean scores to only five factors viz. after sales
services (4.01), security (4.10), perceived usefulness (4.30), interactivity (4.10) and
perceived ease of use (4.16). Thus, it is apprehended that people having professional
qualification find it useful to do banking online.

5.8.3 Occupation -wise Analysis

The impact of occupation of respondents has been examined under two groups viz
service and business. Majority of respondents are from service class. The ANOVA
results indicate significant mean difference existing among the respondents belonging
to these two groups (F=5.40, sig < .05). Further, significant mean difference exists
between nine factors viz. website quality (F=7.320, sig< .05), customer oriented
services (F=4.164, sig < .05), trust (F=5.8, sig < .05), after sales services (F=3.941, sig
< .05), responsiveness (F=7.255, sig < .05), security (F=17.303, sig < .05), perceived
usefulness (F=14.626, sig < .05), interactivity (F=6.899, sig < .05) and perceived ease
of use (F=5.295, sig < .05). On the whole, business class people found internet banking
more useable as compared to service class people (Table 5.6).

5.8.4 Income wise Analysis

Income has been classified into four groups viz. below Rs 50000, 50000-100000,
100000-200000 and above Rs 200000 per annum. The first group contains 9.7% of the
sampled customers. The second group consists of 12.7% and the third group contains
14.6% of the sampled respondents and the fourth group consists of majority of sampled
respondents i.e (63%). ANOVA gives significant difference in the mean satisfaction of
respondents belonging to these four groups (F=17.564, sig < .000). Moreover,
significant difference exists between respondents with regard to twelve factors viz.
website quality (sig .000), customer oriented services (.030), trust (.000), commitment
(.000), courtesy (.001), after sales services (.000), responsiveness (.000), security
(.001), interactivity (.037), perceived ease of use (.000), behavioural intentions (.001)
and better services (.000). Only one factor i.e perceived usefulness is insignificant
between various groups (Table: 5.6). Thus, each of four groups of respondents has been
analysed separately.

155
Income below Rs 50,000
This group accorded above average mean scores to two factors viz. perceived
usefulness (4.23) and interactivity (4.08). However, other factors obtained just average
level of mean scores viz. website quality (3.73), customer oriented services (3.83), trust
(3.85), commitment (3.05), courtesy (3.65), after sales services (3.19), security (3.79),
perceived ease of use (3.91), behavioural intention (3.60) and better services (3.84).
The factor responsiveness (2.97) obtained below average mean scores. Thus,
respondents of this category are satisfied with perceived usefulness and interactivity
and is least satisfied with responsiveness of bank administrators.

Income between Rs 50,000-Rs 1,00,000

This group awarded high mean scores towards twelve factors viz. website quality
(4.40), customer oriented services (4.15), trust (4.29), courtesy (4.20), after sales
services (4.33), responsiveness (4.37), security (4.47), perceived usefulness (4.42),
interactivity (4.12), perceived ease of use (4.51), behavioural intentions (4.11) and
better services (4.31). The factor commitment has obtained just average score (3.64).
Thus, respondents of this group are highly satisfied with security, website quality,
perceived ease of use and perceived usefulness of internet banking system but are
averagely committed to deal online.

Income between Rs 1,00,000-Rs 2,00,000

This group attributed above average mean scores to seven factors viz. commitment
(4.40), after sales services (4.13), perceived usefulness (4.48), interactivity (4.14),
perceived ease of use (4.19) and behavioural intentions (4.04). They accorded average
mean scores to website quality (3.69), customer oriented services (3.94), trust (3.82),
courtesy (3.65), responsiveness (3.88) and better services (3.27). Thus, it becomes
evident that this group is satisfied with its prime banks for providing internet banking
services but expects more innovative services to be provided online.

Income above Rs 2,00,000

This group attains above average mean scores to seven factors viz. customer oriented
services (4.08), trust (4.00), after sales services (4.06), security (4) perceived usefulness
(4.35), interactivity (4.32) and perceived ease of use (4.11). However, they accorded
average mean scores to remaining factors viz. website quality (3.87), commitment
156
(3.83), courtesy (3.65), responsiveness (3.68), behavioural intentions (3.67) and better
services (3.86). Thus to conclude, respondents are quite satisfied with perceived
usefulness, interactivity and perceived ease of use of the system to deal online with
their prime banks and are moderately satisfied with the attitude of bank administrators.

5.8.5 Length of Association- wise Analysis

The length of association of customers with their prime bank has been divided into four
groups viz. upto 5 years, 5-10 years, 10-15 and 15 years and above. Majority of the
respondents are from first group (39%), followed by second (32.6%) and third group
(21.4%). The fourth group has very few respondents (7%), not sufficient for further
analysis. ANOVA results indicate significant mean difference existing between
respondents belonging to these three groups (F= 4.848, sig < .003). Thus, each of three
groups of respondents has been analysed separately:-

Less than 5 years of Association

This group of respondents accorded above average mean scores to four factors viz.
security (4.06), perceived usefulness (4.38), interactivity (4.12) and perceived ease of
use (4.04). The remaining factors have just obtained slightly above average mean
scores viz. website quality (3.81), customer oriented services (3.87), trust (3.82),
commitment (3.92), courtesy (3.61), after sales services (3.90), responsiveness (3.78),
behavioural intentions (3.87) and better services (3.78). Thus, respondents of this
category found very easy and useful to do banking online, as it saves their time, cost
and efforts.

5-10 years of Association

This group of respondents obtained above average mean scores towards six factors viz.
customer oriented services (4.17), trust (4.05), after sales services (4.06), perceived
usefulness (4.42), interactivity (4.43) and perceived ease of use (4.21). Thus to
conclude, respondents of this group are highly satisfied with perceived usefulness,
perceived ease of use and interactivity of internet banking system.

10-15 years of Association

This group of respondents awarded above average mean scores to eleven factors viz.
website quality (4.21), customer oriented services (4.18), trust (4.17), commitment
157
(4.12), after sales services (4.13), security (4.25), perceived usefulness (4.28),
interactivity (4.20), perceived ease of use (4.34), behavioural intention (4.06) and better
services (4.05). The factors courtesy (3.87) and responsiveness (3.76) have obtained
just average mean scores. On the whole respondents of this category are quite satisfied
with internet banking system because of their maximum experience of using the latest
technology. Gbadeyan and Gbonda (2011) also found respondents with long term
relationships satisfied with their banks because of prompt and effective delivery of
services, good customer relationship, conducive environment, good public image and
financial capability of the bank.

5.9 Bank Wise Analysis

The Jammu and Kashmir Bank (JKB) figured as most popular bank in terms of number
of respondents followed by SBI, PNB, ICICI Bank, HDFC Bank, UBI, and Canara
Bank in the area of study. ANOVA was used to know significant difference existing in
the mean satisfaction of respondents of different banks and it was found to be
significant (F=14.144, sig <.05). Moreover, significant difference also exists with
regard to all the thirteen factors extracted in the study. Thus, the data gathered from
each group of respondents belonging to different banks have been analysed separately
to understand separate features figuring in the study.

JKB
The JKB obtains above average mean scores in four factors viz. security (MS: 4.22),
perceived usefulness (MS: 4.45), interactivity (MS: 4.38) and behavioural intentions
(MS: 4.15). However, the remaining factors have obtained just average mean scores.
Thus, it can be apprehended that respondents of this bank using internet banking
facilities are highly satisfied with their bank for innovative services, being secured and
useful in their banking transactions. Ganguli and Roy (2010) found customer service,
technology security and information quality, technology convenience and technology
usage easiness and reliability affecting customer satisfaction. The respondents of JKB
have also positive attitude towards these services in future due to time-cost-effort
effectiveness.

158
SBI
SBI also attains above average mean scores towards five factors viz. customer oriented
services (MS: 4.23), trust (MS: 4.01), perceived usefulness (MS: 4.09), interactivity
(MS: 4.14) and perceived ease of use (MS: 4.25). The other factors have obtained just
average mean scores. The respondents of SBI are highly satisfied with their bank for
providing customer oriented services such as internet banking being easy to use and
effective in online transactions. Also, they find bank website interactivity very easy and
useful for online banking services. Moreover, respondents are moderately satisfied with
responsiveness and courtesy of bank administrators, in contrast to the findings of Singh
and Arora (2011), in which they found customers of nationalised banks not satisfied
with employee behaviour.

PNB
The respondents of PNB give above average mean scores on seven factors viz.
customer oriented services (MS: 4.24), trust (MS: 4.17), after sales services (MS: 4.07),
perceived usefulness (MS: 4.47), interactivity (MS: 4.28), perceived ease of use (MS:
4.24) and better services (MS: 4.14). The remaining factors have obtained slightly
above average mean scores viz website quality (MS: 3.99), commitment (MS: 3.82),
courtesy (MS: 3.93), responsiveness (MS: 3.76), security (MS: 3.93) and behavioural
intentions (MS: 3.66). Thus, the respondents are highly satisfied with perceived
usefulness, interactivity and perceived ease of use, being consistent with the findings of
Wu et al., (2012) in which they found that perceived usefulness, perceived ease of use
and relative advantage are the factors having significant effect on customers
behavioural intentions to adopt internet banking facilities. Moreover, respondents are
also satisfied with after sales services, inducing them to remain committed to use such
interactive online banking services. Yang and Peterson (2004) also found customer
commitment and loyalty generated through improving customer satisfaction and
offering high product/service value to customers.

Canara Bank
This bank receives above average mean scores in six factors viz. customer oriented
services (MS: 4.15), commitment (MS: 4.08), security (MS: 4.04), perceived usefulness
(MS: 4.54), interactivity (MS: 4.00), behavioural intention (MS: 4.06) and better
services (MS: 4.25), indicating thereby the respondents being highly satisfied with
159
perceived usefulness and feel effectiveness in doing transactions online. Chang and
Hamid (2010) also found perceived usefulness and perceived ease of use influencing
customer behaviour in favour of internet banking services. However, respondents are
not much satisfied with the responsiveness of bank administrators towards their
expectations in online transactions being consistent with the findings of Loonam and
Loughlin (2008), wherein it is depicted that customers expect high e-service
responsiveness in contrast to traditional banking responsiveness and found e-service
responsiveness being increased with e-service experience.

HDFC Bank
This bank got above average mean scores in twelve factors viz. website quality (MS:
4.00), customer oriented services (MS: 4.16), trust (MS: 4.02), commitment (MS:
4.10), courtesy (MS: 4.16), after sales services (MS: 4.50), responsiveness (MS: 4.33),
security (MS: 4.50), perceived usefulness (MS: 4.60), interactivity (MS: 4.41),
perceived ease of use (MS: 4.52) and better services (MS: 4.51). Only one factor viz.
behavioural intention (MS: 3.25) has obtained just average mean score. Thus, on the
whole respondents are highly satisfied with internet banking services of HDFC Bank.

ICICI Bank
This bank also obtains above average mean scores towards twelve factors viz. website
quality (MS: 4.42), customer oriented services (MS: 4.25), trust (MS: 4.44),
commitment (MS: 4.22), courtesy (MS: 4.35), after sales services (MS: 4.37),
responsiveness (MS: 4.38), security (MS: 4.61), perceived usefulness (MS: 4.67)
interactivity (MS: 4.48), perceived ease of use (MS: 4.48) and better services (MS:
4.32), indicating thereby the respondents being highly satisfied with perceived
usefulness and security in online transactions. All this enhances customer trust and
makes them committed to deal online.

UBI
This group of respondents receives above average mean scores in five factors viz. after
sales services (MS: 4.09), responsiveness (MS: 4.13), security (MS: 4.28), perceived
usefulness (MS: 4.22) and perceived ease of use (MS: 4.02). The factors such as
website quality (MS: 2.92) and courtesy (MS: 2.76) have obtained below average mean
scores. Thus, on the whole respondents of this bank are highly satisfied with security of
160
their business but are least satisfied with the attitude of their bank administrators
towards online transactions.

5.10 Confirmatory Factor Analysis (CFA)

CFA has been used to provide a confirmatory test to the measurement theory as a
method of testing how well measured variables represent a smaller number of
constructs. In the present study, CFA was performed to assesss fitness, reliability and
validity of measurement models for different constructs of online banking. In CFA, no
distinction is made between exogeneous and endogeneous constructs, hence it is an
interdependence technique like exploratory factor analysis (EFA). CFA distinguishes
from EFA, as in EFA all measured variables are related to every factor by a factor
loading estimates, whereas in CFA researcher has to assign variables to each factor on
the basis of preconceived theory. Thus, the various resulting measurement models are
as follows:

Service Quality
EFA resulted into four factors viz. website quality, responsiveness, courtesy and better
services. These four factors resulted into twelve measured indicators. One statement of
factor responsiveness and two statements of factor website quality got deleted due to
low regression weights. The measurement model analysis was carried on remaining set
of observed indicators. The model has been found to be appropriate as the values are fit
under the threshold criteria (Chi-square/df=3.804, RMR= 0.05, GFI= 0.955, AGFI=
0.908, TLI= 0.906, CFI= 0.943 and RMSEA= 0.084). The model has been proved to be
valid as indicated through Average Variance Extracted (AVE), which came to be 0.53,
higher values of standardised regression weights and higher construct reliability (0.845)
was assessed from the construct loadings and error variances (Hair et al., 2009)

161
 e13 .35

sq14 e1
.59
.86
.19
.93
sq16 e2
wq

.16
e14

.44 .26
.70
.51
sq2 e5
ct .16
.41
.84
sq8 e6

e15 .97
sq
sq1 e7
.98 .26
.63
.83 .69
.79
sq3 e8
res .27 .18
.52
sq7 e9
.33
e16
.18

.33
.11
.57
sq9 e11
bs .96
.98
sq10 e12

Fig 5.1: Measurement Model of Service Quality

Trust
This construct consisted of two factors viz. trust and security comprising of four and
three items respectively. Application of CFA resulted in deletion of two items of factor
trust and one item of security because of low regression weights (<.05). The model was
found to be as fit under the threshold criteria (Chi-square/df=3.220, RMR= 0.039, GFI=
0.992, AGFI= 0.960, TLI= 0.961, CFI= 0.987 and RMSEA= 0.075). The model was
also proved to be valid as AVE came to be 0.606 and construct reliability came to be
0.836.

162
 e8 .94

t5 e1
.97
.36

tr .26
.51
t10 e3
.60

trst

.60 e9

.60

.77
.36
t3 e5

se
.63
.79

t15 e7

Fig 5.2: Measurement Model of Trust

Commitment
CFA is also run on the construct commitment and all the indicators are confirmed due
to higher regression weights (>.05) but model fitness is not assessed due to lesser
number of items under this construct. This construct was also found to be valid as
assessed by AVE (.534) and construct reliability (.727).

Perceived Usefulness
This construct consisted of two factors viz. perceived usefulness and interactivity
consisting of three and two items respectively. The model showed strong fit as all the

163
fitness measures were found to be acceptable with chi-square/df=3.194, GFI= 0.990,
AGFI= 0.952, CFI= 0.988, TLI= 0.959, RMR= 0.011 and RMSEA= 0.074. Further, the
model has been found to be valid as revealed through AVE (0.538) and construct
reliability (0.925).

e6
.70

.84 .84 pu1 e1

.25
.36
.50
pu pu3 e2
.38 .14
.27
pu11 e3
.91

peuse
e7
.67 .95
.46
.97 pu2 e4

int .60
.36

pu6 e5

Fig 5.3: Measurement Model of Perceived Usefulness

Perceived Ease of Use

This construct consisted of four items which were reduced to two due to low regression
weights (<.05). The model fitness is not assessed due to less number of items retained
after CFA, but the validity could be assessed through AVE (.614) and construct
reliability (.867).

Customer Satisfaction
This construct originally consisted of twenty items, which were reduced to six items
after EFA under two factors with four for customer oriented services and two for after
sales services. Two of the items of customer oriented services have got deleted due to

164
low regression weights (<.05), finally resulted in four statements two for each factor for
final analysis. The model has been found to have a good fit (Chi-square/df=2.766,
RMR= 0.020, GFI= 0.993, AGFI= 0.966, TLI= 0.955, CFI= 0.985 and RMSEA=
0.067). Further the model has been proved to be valid as indicated through AVE which
came to be 0.50, higher values of standardised regression weights of each indicators,
higher construct reliability (0.79), which was assessed from the construct loadings and
error variance.

e7

.39
.63
.62
cs17 e2
cos
.73 .54

cs19 e4
.80

cs

.42 e8

.83
.17
.91
cs3 e5
.31
ass .56
cs6 e6

Fig 5.4: Measurement model of Customer Satisfaction

5.11 CFA and Construct Validity

CFA was performed to assess the construct validity of each latent construct. Construct
validity directly affects the substantive models being tested (Bagozzi and Edwards
1998). Thus, one of the major benefits of using SEM technique is that it allows for
concurrent assessment of both reliability and validity (Landis, Beal, and Tesluk 2000).
Construct reliability is the extent to which a set of measured items actually reflect the
theoretical latent construct that is designed to measure. Thus, it deals with the accuracy
of measurement. Basically, it is made up of three important components:-

5.11.1 Convergent validity

The items that are the indicators of a specific construct should converge or share a high
proportion of variance in common, which is known as convergent validity. The various

165
ways to estimate the relative amount of convergent validity among item measures are
as under;
5.11.1(a) Factor Loadings: High factor loading, i.e., above 0.50 or ideally 0.7 or
higher indicates higher level of convergence. Convergent validity gets established in
the present study as majority of standard loadings came out to be above 0.50.
5.11.1(b) Variance Extracted: In CFA, the average percentage of variance extracted
(VE) among a set of construct items is a summary indicator of convergence. VE is
computed as the total of all squared standardised factor loading divided by number of
items. VE should be 0.50 or greater to suggest adequate convergent validity and in our
case VE for all the constructs came to be above .70 (Table 5.8).

5.11.2 Reliability
Reliability is also an indicator of convergent validity. The rule of thumb for reliability
estimate is 0.70 or higher and reliability in the present case is established as it is above
0.70 in all the cases (Table 5.8). High construct reliability indicates that internal
consistency exists, meaning thereby that all measures consistently represent the same
latent construct.

CR= (Sum of standardised loadings) 2/ (Sum of standardised loadings) 2 + Sum of error

variance terms

5.11.3 Dicriminant Validity: Dicriminant validity is the extent to which a construct is

truly distinct from other constructs. High discriminant validity provides evidence that a
construct is unique and captures some phenomena, which other measures do not (Ahire
et al., 1996). It has been proved by two ways. First, the diagonal elements of the
correlation matrix (Table: 5.9) show the average variance extracted. Each diagonal
element of the matrix should be greater than all other elements in the corresponding
row and column of which the diagonal element is a part if discriminant validity is
sufficient. The results meet this requirement. Second, for good discriminant validity, no
item should load more highly on other constructs than on the construct to which it is
supposed to belong (Fey et al., 2009). Since, the data fulfil both of these requirements,
it is proved that the disciminant validity of the construct used is more than adequate.

166
5.12 Structural Equation Model
A structural theory is a conceptual representation of the relationship between latent
constructs. It can be expressed in terms of a structural model that represents the theory
with a set of structural equations and is usually depicted through a visual diagram. A
good measurement theory is a necessary condition to obtain useful results from SEM.
Once theory is expressed in terms of relationships among measured variables and latent
constructs, SEM will assesss how well the theory fits reality as represented by data.
Initially a model was proposed with seven constructs viz. Service quality, trust,
behavioural intentions, perceived ease of use, perceived usefulness, customer
satisfaction and customer commitment. It was proposed that service quality and trust
affects customer satisfaction and commitment. Further, perceived ease of use and
perceived usefulness affects behavioural intentions of customers to use internet banking
and hence customer satisfaction. Thus on the whole, customer satisfaction is not only
predicted through service quality and trust but also through perceived ease of use and
perceived usefulness. However, this model was not found to have good fit as chi-square
statistic came to be 32.00, RMR= 0.077, GFI= 0.768, AGFI= 0.593, TLI= 0.247, CFI=
0.050 and RMSEA= 0.279, hence revealing a poor fit.
Certain paths were added as suggested by modification index. But these additions in the
model have not been done on the basis of modification index but also on the basis of a
strong theoretical support (Hair et al., 2009) for each path. In the first phase of
modification indices, relationship between perceived ease of use and customer
satisfaction were established which reduces the CMIN/df= 20.166, RMR= 0.067, GFI=
0.848, AGFI= 0.716, TLI= 0.229, CFI= 0.450 and RMSEA= 0.219. Jalal et al.,(2011)
proved that perceived ease of use is the source of satisfaction in context of e-banking.
Chang and Hamid (2010), Tandrayen et al.,(2010), Alam and Soni (2012) also support
the relationship between perceived ease of use and behavioural intention and also
between perceived ease of use and customer satisfaction.
In the second phase, relationship between service quality and trust is established which
further reduced the chi-square statistic to 9.718. This relationship of service quality
with trust is added after revisiting the literature such as Yap et al., (2009) found that
service quality and website feature gives customers confidence and hence builds trust in
e-banking. Lee and Lin (2005); Hassan (2012) also state that website design, reliability,
responsiveness and trust affect overall service quality and hence customer satisfaction.
Further Casalo et al., (2007) found website security and privacy, usability and
167
reputation have a direct and significant effect on customer trust in a financial services
website, thus giving a theoretical support for service quality and trust relationship.
In the third phase, relationship between perceived ease of use and perceived usefulness
were established which further reduced the chi-square statistic to 7.806. (Muhammad
and Rana, 2012; Suki and Suki, 2011; Chang and Hamid, 2010). Further relationship
between behavioural intention and commitment is established which reduced the
CMIN/df= 6.396. Ayo et al., (2010) found that perceived ease of use and perceived
usefulness are not only antecedents to e-banking acceptance, they also influence
customers behavioural intention and hence are the factors to retain the customers.
In the next phase, relationship between service quality and perceived ease of use was
established, which further reduced the chi-square statistic to 4.793 (Cao, Zhang and
Seydel, 2005). Lastly relationship between perceived usefulness with customer
satisfaction and commitment was established, thus, giving a proper model fit as
CMIN/df= 3.834, RMR= 0.023, GFI= 0.979, AGFI= 0.926, TLI= 0.886, CFI= 0.957,
NFI= 0.944 and RMSEA= 0.084.

168
 1
e7 servqual
.09

.60 1
cussat e1
.08
1 -.29 .27
e4 trust
.65
1
.18 commit e9
.10
1 .22
e6 perease
.11
.31

.27 1
behaint e8
.06

1
e5 peruse

Fig 5.5: Structural Equation Model of Customer Satisfaction in Online Banking

5.13 Testing of Hypotheses

HO1: Customer satisfaction influences commitment in online banking.
It becomes evident from SEM results that customer satisfaction positively affects
customer commitment (0.27), thus, accepting first hypothesis.

HO2: Trust in online banking positively affects customer satisfaction.

The direct effect of trust on customer satisfaction is significant (.08) and is positive,
thus, accepting of the hypothesis.

HO3: Service quality of online banking affects customer satisfaction.

This hypothesis also stands accepted as indicated by SEM results (.09).

HO4: Perceived ease of use will have a positive effect on behavioural intention to use
online banking.
This hypothesis also stands accepted as the effect of perceived ease of use on
behavioural intention is .11 and on customer satisfaction, it is very high (.65).

169
HO5: Perceived usefulness will have a positive effect on behavioural intention to use
online banking.
This hypothesis also stands accepted as effect of perceived usefulness on behavioural
intention is .06, 0.12 on customer satisfaction and 0.31 on customer commitment.

5.14 Conclusion
Customer satisfaction has long been found as playing an essential role for success and
survival in todays competitive environment. Overall, results show that highly educated
persons who are employees, businessmen and belong to higher income groups and
younger are major users of internet banking. The findings of the study reveal that
customers are satisfied with their respective bank for internet banking facilities which
save their time and cost and enable them to know their account balances and remit
funds from one place to another anywhere and any time. Respondents of private sector
banks viz. ICICI Bank and HDFC Bank are more satisfied with all aspects of internet
banking under study as compared to respondents of other banks, thus indicating the
need for improvement in their infrastructure and facilities to compete with private
banks. The results of SEM show that customer satisfaction is not only influenced by
better service quality and trust but also through other factors such as perceived ease of
use and perceived usefulness, which are not only antecedents of behavioural intention
but also the source of generating customer satisfaction and commitment. Further, trust
which is generated through security and privacy of customers personal information is
the least important dimension for predicting customer satisfaction, thus suggesting the
managers of online banking services to ensure their respective customers that their site
is free from a torrent of spam and that customers personal information (especially credit
and debit card details) is not exposed to any fraudulent use. Keeping in view limited
impact of online service quality on customer satisfaction, bank managers must adopt
strategies with regard to optimising perceived service quality. Moreover, it is also
found that customers attach more importance to employee behaviour, their friendliness
attitude, politeness, cooperation, promptness in answering enquires online. Hence
banks must train their employees to effectively handle customer problems, so that they
develop trust in the minds of customers about bank personnel and service package
available online. Thus, offering of internet banking service is essential for banks
survival and thus mandatory to compete effectively.

170
Table 5.1: Demographic Profile of Bank Customers
Respondents Number Percentage Respondents Number Percentage
Profile Profile
Gender Marital Status
Male 318 77.5% Single 190 46%
Female 92 22.5% Married 220 54%
Age Income
20-30 148 36% Below 50,000 40 9.7%
30-40 106 26% 50,000- 52 12.7%
1,00,000
40-50 82 20% 1,00,000- 60 14.6%
2,00,000
50 &Above 74 18% Above 258 63%
2,00,000
Qualification Length of
Association
th
12 32 7.8% Up to 5 years 160 39%

Graduates 184 45% 5-10 years 134 32.6%

Post 98 24% 10-15 years 88 21.4%

Graduates
Professionals 96 23.2% Above 15 years 28 7%
Occupation
Service 240 58.5%
Business 170 41.5%

Table 5.2: Process of Data Reduction

Rounds Variance Items Number Iterations No.of KMO Bartlett
Explained Emerged Of Items
Factors Deleted
Extracted
1 84.866 99 28 40 34 .693 3263.828
2 81.015 65 21 22 7 .603 3864.922
3 80.503 58 19 16 3 .667 2976.262
4 80.123 55 18 26 2 .633 2117.139
5 79.089 53 17 14 2 .625 2112.236
6 77.323 51 15 17 1 .740 1242.685
7 76.146 49 14 14 4 .842 6452.14
8 75.238 45 13 15 3 .837 3604.23
9 73.717 42 13 22 3 .856 4054.86

171
Table 5.3: Factorial Profile of Data from Bank Customers
Variables Mean Standard Factor Communalities % of Eigen Cronbach
Deviation Loadings Variance Values Alpha
Explained
Factor 1Website 7.291 19.413 .369
Quality
Website 3.92 .913 .731 .771
Appealing
Website Provides 3.96 .953 .730 .753
Valuable
Information
Website is easy to 4.01 .991 .810 .827
use and Navigate
Information about 3.69 1.31 .625 .780
new deposit
schemes
Factor 2 7.197 7.819 .487
Customer
Oriented
Services
Pleased with 3.92 .838 .746 .784
bank for
providing online
services
Website provides 4.05 1.00 .676 .710
innovative
deposit schemes
Website allows 4.22 .982 .785 .724
easy transfer of
money
Website provides 4.00 1.16 .762 .721
customer oriented
services
Factor 3 Trust 6.420 6.586 .478
Trust for not 4.07 .899 .766 .718
using personal
information
inappropriately
Does not allow 4.16 .983 .713 .805
any one to access
personal
information

172
Website offers 3.91 1.02 .741 .738
relevant
information about
all schemes
Website keep its 3.84 1.15 .776 .805
commitments
Factor 4 6.329 6.024 .746
Commitment
Visit website if 4.20 1.02 .870 .837
need banking
services
Committed 4.02 .902 .720 .743
because links are
problem free,
accurate and
pages download
easily
Committed 3.35 1.33 .627 .725
because banks
takes care of
problems
properly and
compensate for
the problems they
create
Factor 5 5.952 5.815 .280
Courtesy
Administrators 3.92 .798 .681 .711
are willing to
help
Administrators 3.52 1.52 .643 .837
show confidence
in customers
Factor 6 After 5.844 4.906 .674
Sales Services
Experience with 4.07 .772 .643 .785
online banking is
good
Satisfied with 3.97 .825 .655 .750
after sales
services
Factor 7 5.499 4.418 .769
Responsiveness

173
Administrators 3.82 1.28 .759 .853
are never busy to
respond enquires
Administrators 3.64 1.28 .802 .776
are courteous
Administrators 3.86 1.15 .716 .736
have all
knowledge
Problem solving 3.60 1.19 .722 .849
approach in
delivering
services
Factor 8 5.455 4.214 .666
Security
Feel confident 4.24 1.13 .814 .829
using online
banking services
Bank is capable 3.90 1.13 .703 .793
and proficient
Login process is 4.04 1.13 .637 .673
secure
Factor 9 4.993 3.709 .695
Perceived
Usefulness
Online banking 4.31 .653 .556 .761
effectiveness in
banking
transactions
Find doing online 4.37 .681 .688 .693
banking useful
Useful for 4.43 .549 .705 .676
utilisation of
banking services
Factor 10 4.844 3.057 .740
Interactivity
Enhances 4.28 .778 .779 .819
effectiveness in
information
seeking
Site does not 4.21 .762 .754 .707
make lose time
interactivity

174
Factor 11 4.762 2.862 .334
Perceived Ease
of Use
Simple to do 4.09 .984 .729 .853
banking
Website looks 4.17 1.05 .712 .678
professionally
designed
User menus are 4.32 .627 .757 .775
clearly
categorised and
laid out in the
screen
Demonstrations 4.06 .949 .729 .716
or guidelines
helps in doing
banking
Factor 12 3.99 2.761 .383
Behavioural
Intentions
Use online 4.36 .763 .728 .718
banking for
banking needs
Strongly 3.20 1.49 .600 .714
recommend
others
Factor 13 Better 3.881 2.327 .720
Services
Call centres have 3.79 1.13 .837 .811
operating hours
convenient to
customers
Call centres gives 3.87 1.10 .739 .687
personalised
attention in doing
banking

175
Table 5.4: Demographic Profilewise ANOVA Results
Age wise Qualification Occupation Income wise Length of
wise wise Association
wise

F Sig. F Sig. F Sig. F Sig. F Sig.

Website 14.059 .000 6.784 .000 7.320 .001 16.805 .000 15.051 .000
Quality

Customer 9.212 .000 4.766 .003 4.164 .016 3.008 .030 7.437 .000
Oriented
Services
Trust 8.677 .000 9.232 .000 5.876 .003 6.094 .000 7.956 .000

Commitment 1.405 .241 14.12 .000 1.643 .195 20.948 .000 6.405 .000

Courtesy 10.490 .000 1.008 .389 1.617 .200 5.576 .001 3.985 .008

After sales 9.357 .000 .130 .942 3.941 .020 27.431 .000 2.945 .033
services
Responsiveness 9.827 .000 3.233 .022 7.255 .001 19.288 .000 2.914 .034

Security .979 .403 1.247 .292 17.303 .000 5.719 .001 3.411 .018

Perceived .081 .970 2.234 .084 14.626 .000 2.159 .092 1.655 .176
Usefulness

Interactivity .655 .580 3.647 .013 6.899 .001 2.860 .037 5.195 .002

Perceived ease 8.757 .000 5.243 .001 5.295 .005 12.425 .000 7.929 .000
of use
Behavioural 8.146 .000 3.734 .011 2.044 .131 5.449 .001 8.393 .000
intentions
Better services 7.376 .000 6.148 .000 .490 .613 11.788 .000 6.206 .000

176
Table 5.5: Age and Qualification Wise Analysis of Internet Banking Customers
20-30 30-40 40-50 Above Under Graduate Post Professional
yrs yrs yrs 50 yrs Graduate N=184 Graduate N=96
N=148 N=106 N=82 N=74 N=32 N=98
M M M M M M M M

Website 3.94 3.99 4.06 3.50 3.88 3.76 4.11 3.94

Quality

Customer 3.93 4.32 4.01 3.93 4.00 4.01 4.25 3.93

oriented
services
Trust 3.89 4.24 4.03 3.82 4.29 3.97 4.17 3.77

Commitment 3.81 3.96 3.73 3.95 3.60 4.05 4.03 3.40

Courtesy 3.68 3.99 3.87 3.27 3.81 3.68 3.84 3.63

After sales 4.05 4.25 3.95 3.71 4.09 4.02 4.01 4.01
services
Responsiveness 3.76 3.95 3.85 3.23 3.91 3.58 3.75 3.93

Security 4.00 4.12 4.17 3.97 4.32 4.00 4.04 4.10

Perceived 4.38 4.37 4.36 4.35 4.27 4.37 4.47 4.30

Usefulness
Interactivity 4.25 4.30 4.25 4.16 4.23 4.23 4.43 4.10

Perceived ease 4.12 4.25 4.31 3.93 4.14 4.07 4.33 4.16
of use
Behavioural 4.02 3.72 3.77 3.39 3.87 3.61 3.87 3.97
intention
Better services 3.93 4.10 3.51 3.60 3.96 3.61 4.09 3.95

177
Table 5.6: Occupation, Income and Length of Association wise Analysis of Internet Banking
Customers

Service Business Below Rs Rs Rs Above Upto 5 5-10 10-15

N=240 N=170 Rs 50000- 100000- 200000 yrs yrs yrs
50000 100000 200000 N=258 N=160 N=134 N=88
N=40 N=52 N=60
M M M M M M M M M

Website Quality 3.81 4.01 3.73 4.40 3.69 3.87 3.81 3.88 4.21

Customer 4.06 4.03 3.83 4.15 3.94 4.08 3.87 4.17 4.18
oriented
services
Trust 4.07 3.89 3.85 4.29 3.82 4.00 3.82 4.05 4.17

Commitment 3.83 3.89 3.05 3.64 4.40 3.83 3.92 3.60 4.12

Courtesy 3.66 3.80 3.65 4.20 3.65 3.65 3.61 3.83 3.87

After sales 4.02 4.02 3.19 4.33 4.13 4.06 3.90 4.06 4.13
services
Responsiveness 3.64 3.86 2.97 4.37 3.88 3.68 3.78 3.57 3.76

Security 3.92 4.25 3.79 4.47 4.13 4.00 4.06 3.89 4.25

Perceived 4.26 4.52 4.23 4.42 4.48 4.35 4.38 4.42 4.28
usefulness
Interactivity 4.32 4.15 4.08 4.12 4.14 4.32 4.12 4.43 4.20

Perceived ease 4.15 4.17 3.91 4.51 4.19 4.11 4.04 4.21 4.34
of use
Behavioural 3.85 3.67 3.60 4.11 4.04 3.67 3.87 3.57 4.06
intention
Better services 3.87 3.77 3.84 4.31 3.27 3.86 3.78 3.62 4.05

178
 Table 5.7: Results of various CFA Fit Indices
Constructs CMIN/DF GFI AGFI RMR RMSEA CFI TLI
Service Quality 3.804 0.955 0.908 0.050 0.084 0.943 0.906
Trust 3.220 0.992 0.960 0.039 0.075 0.987 0.961
Perceived 3.194 0.990 0.952 0.011 0.074 0.988 0.959
Usefulness
Customer 2.766 0.993 0.966 0.020 0.067 0.985 0.955
Satisfaction

Table 5.8: Reliability and Validity of Latent Constructs

Constructs Convergent Construct Reliability
Validity/AVE
Service Quality 0.53 0.85
Trust 0.61 0.84
Commitment 0.54 0.73
Perceived Usefulness 0.54 0.93
Perceived Ease of Use 0.62 0.87
Customer Satisfaction 0.51 0.80

Table 5.9: Discriminant Validity of Latent Constructs

Trust CMT SQ PEOU PU BI CS
Trust .606
CMT -.131** .534
(0.017)
SQ .584** -.099* .53
(0.341) (.0098)
PEOU .013 .168** .206** .614
(.00169) (0.028) (0.042)
PU .049 .226** -.063 .288** .538
(.0024) (.051) (.0039) (.082)
BI -.092 .244** .079 .070 .05 .41
(.0084) (.059) (.0062) (.0049) (.0025)
CS .131 .213** .001 .635** .267** .019 .50
(.017) (.045) (.00001) .403 (.071) (.00037)
Diagonal axis show average variance extracted. Values within parenthesis are
squared correlation between the dimensions and values without parenthesis are
actual correlation values, **sig. at 0.01 level, * sig. at 0.05 level

179
Table 5.10: Various Stages of Structural Modelling
Stages Chi- GFI AGFI RMR RMSEA CFI TLI Deletion Addition
Square
1 32.00 0.768 0.593 0.247 0.279 0.050 0.247 - PEOU-
CS
11 20.166 0.848 0.716 0.067 0.219 0.450 0.229 - SQ-Trust
111 9.718 0.912 0.824 0.055 0.148 0.766 0.649 - PEOU-
PU
1V 7.806 0.935 0.860 0.050 0.131 0.831 0.726 - BI-CMT
V 6.396 0.950 0.884 0.033 0.116 0.876 0.783 - SQ-
PEOU
V1 4.793 0.968 0.911 0.028 0.097 0.927 0.847 - PU-
CS&Cmt
V11 3.834 0.979 0.926 0.023 0.084 0.957 0.886 - -

Table 5.11: Results of Hypothesis Testing

Variables P.value C.R. Results
Commit<-CS .000 3.367 Accepted
CS<-Trust .001 3.239 Accepted
CS<-SQ .03 2.135 Accepted
Behaint<-PEOU .020 2.170 Accepted
Behaint<-PU .002 3.120 Accepted

180
 References
Abdullah Bin Omar, Naveed Sultan, Khalid Zaman, Nazish Bibi, Abdul Wajid
and Khalid Khan (2011). Customer perception towards online banking services:
Empirical evidence from Pakistan. Journal of Internet Banking and Commerce,
16 (2), 1-17.
Ahire, S.,Golhar, D.,and Waller, M. (1996). Development and validation of TQM
implementation constructs. Decision Sciences, 27(1), 23-56.
Alam Mahtab and Ankita M Soni (2012). Customer satisfaction of internet
banking and theory of big push: An analytical study with special reference to
selected customers in Vadodara city. Ninth AIMS International Conference on
management. 941-947.
Auta Elisha Menson (2007). E-banking in Developing economy: Empirical
evidence from Nigeria. Journal of Applied Quantitative methods, 5(2), 212-222.
Ayo, C.K.; Adewoye J.O and Oni A.A. (2010). The state of e-banking
implementation in Nigeria: A post consolidation review. Journal of Emerging
Trends in Economics and Management Services, 1(1), 37-45.
Bagozzi, R.P. and J.F. Edwards (1998). A General Approach to Construct
Validation in Organisational Psychology: Application to the Measurement of
Work Values. Organizational Research Methods, 1(2), 45-87.
Bander A. Alsajjan and Charles Dennis (2006). The impact of trust on acceptance
of online banking. European Association of Education and Research in
Commercial Distribution, 1-19.
Cao, M; Zhang, Q and Seydel, J. (2005). B2C e-commerce website quality: An
empirical examination. Industrial Management and Data System, 105(5), 645-
661.
Casalo V. Luis, Carlos Flavian and Miguel Guinaliu (2007). The role of security,
privacy, usability and reputation in the development of online banking. Online
Information Review, 31(5), 583-603.
Chang Hsin Hsin and Mohammad Rizal Bin Abdul Hamid (2010). An empirical
investigation of internet banking in Taiwan. Global Journal of Business Research,
4(2), 39-47.
Cheung M.K.Christy and Mathew K.O. Lee (2005). The asymmetric effect of
web site attribute performance on web satisfaction: An empirical study. E-service
Journal, 3(3), 65-86.
Cry, D., Bonanni, C., Bowes, J., Ilsever, J. (2005). Beyond trust: Website design
preferences across cultures. Journal of Global Information Management, 13(4),
25-55
Fey, C., Margulis Yakushew, S., Park, H. And Bjarkman I. (2009). Opening the
black box of the relationship between HRM practices and firm performance: A
comparison of MNE subsidiaries in the USA, Finland and Russia. Journal of
International Business Studies, 40(4), 690-712.
Ganguli Shrishendu and Sanjit Kumar Roy (2010). Generic technology-based
service quality dimensions in banking: Impact on customer satisfaction and
loyalty. International Journal of Bank Marketing, 29(2), 168-189.

181
 Gbadeyan R.A. and O.O. Akinyosoye Gbonda (2011). Customers preferences for
e-banking services: A case study of selected banks in Sierra Leone. Australian
Journal of Business and Management Research, 1(4), 108-116.
Hair, Joseph F. Jr., Black, Barry, William C. , Babin, J., Anderson, Rolph E., &
Tatham, Ronald L. (2009). Multivariate Data Analysis, 6th ed. New Delhi:
Pearson Prentice Hall.
Hanzaee Kambiz Heidarzadeh and Tooraj Sadeghi (2010). Measuring banks
automated service quality: A re-examination and extension in an Islamic country.
World Applied Sciences Journal, 8(7), 874-880.
Hassan M.Taimoor, Aqeel Mukhtor, Rana Kaleem Ullah, Huzaifah Shafique and
Shafi Ur Rehma (2012). Customer service quality perception of internet banking.
International Journal of Learning and Development, 2(2), 86-100.
Jalal Akram, Jassim Marzooq and Hassan A. Nabi (2011). Evaluating the impacts
of online banking factors on motivating the process of e-banking. Journal of
Management and Sustainability, 1(1), 32-42.
Jayawardhena, C., and Foley, P. (2001). Changes in Banking SectorThe Case
of Internet Banking in UK. Journal of Internet Research: Networking and Policy,
10(1), 1930.
Karjaluoto, H.,Mattila,M.,and Pento, T. (2002). Factors underlying attitude
formation towards online banking in Finland. International Journal of Bank
Marketing, 20(6), 261-72.
Khan Mohammad Sadique and Siba Sankar Mahapatra (2009). Service quality
evaluation in internet banking: an empirical study in India. International Journal
of Indian Culture and Business management, 2(1), 30-46.
Khurana Sunayna (2009). Managing service quality: An empirical study on
internet banking. The IUP Journal of Marketing Management, 8(3&4), 96-113.
Kumbhar M. Vijay (2011). Factors affecting the customer satisfaction in e-
banking: Some evidences from Indian banks. Management Research and
Practice, 3(4), 1-14.
Landis, Ronald S., Daniel J. Beal, and Paul E. Tesluk (2000). A Comparison of
Approaches to Forming Composite Measures in Structural Equation Models.
Organizational Research Methods, 3 (2), 186-207.
Lee Gwo- Guang and Hsiu-Fen Lin (2005). Customers perception of e-service
quality in online shopping. International Journal of Retail and Distribution
Management, 33(2), 31-46.
Loonam, M.and O. Loughlin, D. (2008). Exploring e-service quality: A study of
Irish online banking. Marketing Intelligence and Planning, 26(7), 1759-1780.
Malhotra, Naresh K. (2007). Marketing Research- An Applied Orientation. New
Delhi :Pearson Education.
Manzano Joaquin Aldas, Carlos Lassola-Navarre, Carla Ruiz- Mafe and Silvia
Sanz-Blas (2008). Key drivers of internet banking services use. Online
Information Review, 33(4), 672-695.

182
 Mattila Minna, Karjoluoto Heikki, Topio Pento (2003). Internet banking adoption
among mature customers: early majority or laggards?. Journal of Services
Marketing, 17(5), 514-528.
Muhammad Ali Ramdhani, Abdullah Ramdhani and Dinor Mariam Kurniati
(2011). The influence of service quality toward customer satisfaction of Islamic
Sharia Bank. Australian Journal of Basic and Applied Sciences, 5(9), 1099-1104.
Muhammad Lakhi and Gule Rana (2012). Factors distressing internet bnking
adoption among adult students: Evidence from kingdom of Saudi Arabia.
Business and Management Review, 2(1), 76-82.
Nupur Jannatul Mawa (2010). E-banking and customer satisfaction in
Bangladesh: An analysis. International Review of Business Research papers,
6(4), 145-156.
Odumeru James A. (2012). The acceptance of e-banking by customers in Nigeria.
World Review of Business Research, 2(2), 62-74.
Ombati Thomas Ogora, Magutu Peterson Obara, Nyamwange Stephen Onserio
and Nyaoga Richard Bintange (2010). Technology and service quality in the
banking industry. African Journal of Business and Management, 1(2), 1-16.
Pavlou, P.A. (2003). Consumer acceptance of electronic commerce: Integrating
trust and risk with the technology acceptance model. International Journal of
Electronic Commerce, 7(3), 101-134.
Qureshi Tahir Masood, Muhammad Khaqan Zafar and Muhammad Bashir Khan
(2008). Customer acceptance of online banking in developing economics. Journal
of Internet Banking and Commerce, 13(1), 5-9.
Ravichandran K.,K.Bhargavi and S.Arun Kumar (2010). Influence of service
quality on banking customers behavioural intentions. International Journal of
Economics and Finance, 2(4), 18-28.
Sathey, M. (1999). Adoption of internet banking by Australian consumers: An
empirical investigation. International Journal of Bank Marketing, 17(7), 324-
336.
Singh Jaspal and Gagandeep Kour (2011). Customer satisfaction and universal
banks: An empirical study. International Journal of Commerce and Management,
21(4), 327-348.
Singh Surabhi and Renu Arora (2011). A comparative study of banking services
and customer satisfaction in public, private and foreign banks. Journal of
Economics, 2(1), 45-56.
Singhal Divya and V. Padhmanabhan (2008). A study on customer perception
towards internet banking: Identifying major contributing factors. The Journal of
Nepalese Business Studies, 5(1), 101-111.
Siu Noel Yee-Man and Jeremy Chi-Who Mou (2005). Measuring service quality
in internet banking: The case of Hong Kong. Journal of International Consumer
Marketing, 17(4), 99-116.
Sohail M. Sadiq and Nassar M. Shaikh (2007). Internet banking and quality of
service: Perspectives from a developing nation in the middle east. Online
Information Review, 32(1), 58-72

183
 Stavins, J. (2001). Effect of consumer characteristics on the use of payment
instruments. New England Economic Review, 3(1), 19-31.
Suki Norazah Mohd and Norbayan Mohd Suki (2011). Exploring the relationship
between perceived usefulness, perceived ease of use, perceived enjoyment,
attitude and subscribers intention towards using 3G mobile services. Journal of
Information Technology Management, 22(1), 1-7.
Tandrayen Ragoobur Verena, Anisha Ayrga and Rishi Doomun (2010). Internet
banking: A customer centric perspective for Mauritius. International research
Symposium in Service Management, 1-19.
Tulani Dube, Chitura Tofara and Runyowa Langton (2009). Extent of adoption
and usage of internet banking by commercial banks in Zimbabwe. Journal of
Internet Banking and Commerce, 14(7), 10-14.
Wakefield, R.L. , Stocks, M.H., Wilder, W.M. (2004). The role of website
characteristics in initial trust formation. Journal of Computer Information
Systems, 45(1), 94-103.
Wong David H., Claire Loh, Kenneth B. Yap and Randell Bak (2009). To trust or
not to trust: The consumers dilemma with e-banking. Journal of Internet
Business, 6(1)1-27.
Wu Hsueh-Ying, Hsing-Yun Chang and Hsing- Hui Lin (2012). The difference
between users and potential users of using online banking. International
Conference on Innovation and Information Management, 36(1), 33-37.
Yang Zhilin and Robin T. Peterson (2004). Customer perceived value, satisfaction
and loyalty: The role of switching cost. Psychology and Marketing, 21(10), 799-
822.
Yang Zhilin, Minjoon Jun and Robin T. Peterson (2004). Measuring customer
perceived online service quality-scale development and managerial implications.
International Journal of Operations and Production Management, 24(11), 1149-
1174.
Yap B. Kenneth, David H. Wong, Claire Loh and Radall Bak (2009). Building
trust in e-banking: Where is the line between online and offline banking?,
ANZMAC, 1-9.
Yousafzai, S.Y.,J.G. Pallister and G.R. Foxall (2005). Strategies for building and
communicating trust in electronic banking: A field experiment. Psychological
Market, 22(1), 181-202.
Zakaria I. Saleh (2011). Improving security of online banking using RFID.
Academy of Banking Studies Journal, 10(2), 1-5.
Zeng Fue, Zuohao Hu, Rong Chen and Zhilin Yang (2009). Determinants of
online service satisfaction and their impacts on behavioural intentions. Total
Quality Management, 20(9), 953-969.

184
 Chapter 6
Strategy for Online Customer
Satisfaction and Business
Performance
 Chapter 6

Strategy For Online Customer Satisfaction and Business Performance

Contents Page No

6.1 Background 185

6.2 Major Findings 186

6.3 Perceptual Gap Between Private and Public

Sector Bank Managers 189

6.4 Perceptual Gap Between Private and Public

Sector Bank Customers 189

6.5 Perceptual Gap Between Customers and Managers 190

6.6 Managerial Implications 191

6.7 Theoretical Implications 194

6.8 Customer Awareness 195

6.9 Future Research 195

References 199
 CHAPTER-6
STRATEGY FOR ONLINE CUSTOMER SATISFACTION AND
BUSINESS PERFORMANCE

6.1 Background
In the present highly competitive environment, online customers are very expensive to
be attracted and difficult to retain because it is relatively easy for customers to switch
their online providers. Customer satisfaction is the key to long term success of the
business and is the main reasons for and the driving force behind banks functioning.
Therefore, it is extremely important for online providers to know how to keep their
online customers satisfied and committed because committed customers are known to
visit the site more, deal more and gives more business to the banks in the form of
higher deposits and profits. In this respect, it is essential for all the banks to switch from
managing means to managing customers in order to satisfy them with the whole
bouquet of services they offer. Further, all the banks taken into consideration in the
study are offering complete e-bouquet of banking and financial services which include
ATM, credit card, debit card, electronic transfer, tele-banking, e-banking etc. In this
way, providing quality of online services by banks is increasingly becoming a need to
have than a nice to have service (Ganesan R. and Vivekanandan, K., 2009). Bank
Managers believe that with the improvement of information technology and literacy
level of customers, more than 20% of Indian population is aware to use internet
banking, which enables them to use more and more services. Thus, the challenge to all
banks is to expand internet banking user base and slowly increase the range of services
that customers use. In this context, the first chapter discusses the dimensions that lead
to customer satisfaction within the framework of detailed reviewed literature in second
chapter. The third chapter covers the research design and methodology used in the
present study. The fourth and fifth chapters focussed on the various components of
internet banking from the perspective of bank managers and online banking customers.
The findings from these chapters indicate a strong and positive relationship between all
the dimensions of internet banking and customer satisfaction. It further strengthens this
premise with many people adopting internet banking because of lot many benefits
associated with it (Katri, 2003; Musiime and Ramadhan, 2011) and thus leads to
increased profits. The results also show that in spite of better service quality and trust,
other factors such as perceived ease of use and perceived usefulness also affect
185
customers and managers intention to adopt the technology which further enhanced
their performance in the career perspective. Further, the perceptual gap between the
private bank managers and public bank managers, private bank customers and public
bank customers has also been examined. The business performance of these banks has
been studied after consulting their independent annual reports from year 1995 onwards.
Although the findings of the study revealed positive responses which were slightly
above average on five point scale, the banks should not be complacement, instead it
should be creative and proactive in creating innovative products and services with the
adoption of latest technologies to meet the needs of diversified internet users. It is in
this context that strategic action plan focussing on how to improve quality of online
services to keep and maintain high level of customer satisfaction as well as good
business performance has also been presented in this chapter. This chapter provides
suggestions to the bankers and policy makers to make online banking experiences more
useful and productive.

6.2 Major Findings

Major findings of the study are summarised as under:-

Perception of Bank Managers

Bank managers are satisfied with online services they create and maintain as the
same reduces work load of managers and enables them to carry out their
respective tasks more efficiently and effectively with less of time and efforts.
Managers having higher length of service are more satisfied with internet
banking as compared to their counterparts having lesser length of service.
Managers have strong commitment to security measures (MS: 4.56) and they do
not allow any third person to access customers personal information (MS:
4.54).
Bank managers are able to provide relevant information about all products and
services on their banks website (MS: 4.44).
Banks login process is secured (MS: 4.48) and transaction information is
protected during a connection (MS: 4.51).
Bank managers find their customers committed to deal online because of banks
performance (MS: 4.12), higher customer satisfaction and reasonable price
(MS: 4.05).

186
 Bank managers are not much happy with regards to rapid delivery of online
services (MS: 3.47).
Bank has up to date equipment and technology (MS: 4.40) and about 97% of
respondents are satisfied for online services they get.
About 92% of respondents feel skilled at navigating the web pages (MS: 4.34)
followed by easy interaction on web pages, which is clear and understandable
(MS: 4.31).
They are also satisfied because it becomes easier to do their job (MS: 4.53),
helps them to accomplish their tasks quickly (MS: 4.40), enhances their
effectiveness on the job (MS: 4.50) and in their banking career (MS: 4.45).
Bank managers provide clear information about the transaction and
price/interest to their clients (MS: 4.40) and accurate and up to date information
(MS: 4.48).
Online payment system (MS: 4.61) has figured to be fast enough and effective
(MS: 4.32).
Bank managers also feel that implementation of information technology also
enables them to determine quickly the profitability of bank (MS: 4.47) as well
as of schemes (MS: 4.33) and customers (MS: 4.31).
Online services have proved to be productive, cost effective and time saving.
Business performance of all the banks under study has been improving after the
implementation of internet banking services.
In case of public sector bank, SBI leads in terms of amount of profitability,
customer satisfaction and commitment, as it is the largest and oldest bank in the
country. Whereas PNB leads in terms of online effectiveness and have higher
proportionate average increase in profits as compared to SBI.
In case of private sector banks, HDFC bank, followed by ICICI bank, has a
better impact on customer satisfaction and business performance as reflected by
more than above average mean scores obtained by various dimensions. Further,
the level of commitment is highest in JKB, as it is the leading bank in J&K
state, providing latest technology and changed the way to carry on their
financial transactions, thereby generating trust in the minds of customers.
The highest returns among public sector banks are provided by PNB followed
by Canara Bank and Union Bank of India. Whereas in case of private sector
banks, highest return on equity is provided by J&K Bank followed by HDFC

187
 Bank and ICICI Bank and highest return on assets is provided by HDFC Bank
followed by J&K Bank and ICICI Bank.

Customer Perceptions
Highly educated persons who are employees, businessmen and belong to higher
income groups are the major users of internet banking.
Majority of the customers are in the age group of 20-30 years followed by 30-
40, 40-50 and 50 above age group of customers. Almost all age groups of
respondents are satisfied with perceived usefulness, perceived ease of use,
customer oriented services and interactivity provided by various banks
operating online. Customers young in age are not satisfied with the
responsiveness of bank administrators whereas customers old in age are not
committed to deal online.
Customers having longer length of association are more satisfied with internet
banking system as compared to their counterparts.
Majority of respondents have saving account with their respective bank with
ATM and credit card facility.
Majority of customers are satisfied with online services because it saves their
time and efforts. Besides, the system, being cost effective, enables them to
accomplish their banking transactions by sitting anywhere and anytime.
Respondents are also satisfied with login process and feel confident and secured
while conducting transactions online.
The respondents also trust their bank for not using personal information
inappropriately (MS: 4.07) and for not allowing any third person to access the
same (MS: 4.16).
90% of respondents committed to use online banking only if it is available in
the understandable language.
Respondents also find convenient to transfer money from one account to
another as well as from one place to another (MS: 4.22).
Respondents are also satisfied with online information system for getting
familiar with different services of various banks (MS: 4.05).
About 80% of respondents are satisfied with the attitude of bank administrators
in conducting banking transactions.

188
 Respondents find their online bank administrators focussing customers in mind
(MS: 3.48), understand their specific needs (MS: 3.37), and showing confidence
in customers while dealing online (MS: 3.52).
Respondents found their banks website easy to use and navigate (MS: 4.22),
professionally designed (MS: 4.17) and user menus are clearly categorised and
well laid out in the screen (MS: 4.32).
98% of respondents found online banking very useful for utilising various
banking services (MS: 4.43) and thus enhances their effectiveness in
information seeking (MS: 4.28).
In spite of all these findings, respondents are not committed to deal online (MS:
3.50). Moreover, the level of trust in conducting online transaction is also less
because of security issues.

6.3 Perceptual Gap Between Private and Public Sector Bank Managers
Perceptual gap has been obtained from the differences in the responses of private bank
managers and public sector bank managers towards eight factors viz. perceived
usefulness, trust, customer satisfaction, commitment, better facilities, service quality,
perceived ease of use and profitability. The results of independent sample t-test has
been used to know whether there exists significant difference between the mean scores
of the respondents or not (Table: 6.1). The study found no significant difference in the
opinion of respondents towards all the factors except commitment. Managers view that
customers of private sector bank are more committed to deal online (MS: 4.20) as
compared to their counterparts (MS: 3.80). Thus, from the above analysis, it becomes
evident that quality of online delivered services is more in case of private sector banks
which makes customers committed to deal online.

6.4 Perceptual Gap Between Private and Public Sector Bank Customers
Perceptual gap has been obtained from the differences of private and public sector bank
customers responses towards thirteen factors of online banking viz., website quality,
customer oriented services, trust, commitment, courtesy, after sales services,
responsiveness, security, perceived usefulness, interactivity, perceived ease of use,
behavioural intention and better services (Table: 6.2). Further, independent sample t-
test has been used to know whether there exists significant difference in the mean
scores of two sets of respondents or not. Study found no significant difference in the

189
opinion of respondents towards website quality, customer oriented services, trust,
courtesy, after sales services, responsiveness, security, perceived ease of use and
behavioural intention. However, significant difference exists between private and
public sector bank customers towards remaining four factors and these are
commitment, perceived usefulness, interactivity and better services. Both the groups
have exhibited almost average level of commitment towards their bank but respondents
of public sector bank (3.99) are more committed to deal online as compared to private
sector banks (3.72). This may be attributed to various reasons such as financial security,
government control etc. Moreover, respondents of public sector banks are also satisfied
with perceived usefulness and interactivity with their banks website as compared to
their private sector counterparts whereas respondents of private sector banks are more
satisfied with the services provided by their banks online (4.01) as compared to public
sector banks (3.66). This may be due to the reason that private sector banks are more
specialised in providing online services to their customers.

6.5 Perceptual Gap Between Online Banking Customers and Bank Managers
The perceptual gap has been measured to examine the discrepancy in the opinion of
customers and bank managers towards operation of online banking services. To test the
significant mean differences, independent t-test has been used. The results of t-test
exhibit significant mean differences between customers and managers about online
banking services. Bank managers accorded highest mean scores to most of the items
and thus believe that they provide better quality online services to their customers
(Table 6.3). Customers claim some deficiencies in online services, they find problem
in remitting funds to others due to network problem and sometimes due to slow down
of banks website, they are unable to access their accounts etc. Further, bank managers
claim that they adopt problem solving approach to take care of their customers and are
truly sincere to their clients whereas customers find difficulty in gathering the requisite
information from bank administrators while dealing online. This is also consistent with
the findings of Chaudry et al., 2013 and Lee et al., 2009 in which they found significant
mean difference in the perceptions of customers and managers regarding online service
quality of banks. Also, customers find bank employees too busy in their work and thus
unable to help in any matter regarding online banking services. Thus, bank managers
are required to provide customer oriented services with no delay of time.

190
6.6 Managerial Implications
Makes customers committed to deal online
Customer commitment can be considered as the key construct in bank financial
performance. But it is found in the present study that customer commitment is less
(MS: 3.50). Thus, it is required that banks which want customers to be committed to
deal online must implement personalised aspect of the services i.e. getting to
understand what customers need and act as per demand.

Problem solving approach

Customers are averagely satisfied (MS: 3.60) with problem solving approach of banks.
Thus, banks are required to provide problem solving approach to customers in dealing
online i.e by providing them a toll free number which could handle customer
complaints and general feedback about the electronic banking services. This would not
only provide a service to a customer that is free, but also provide the bank with
valuable information for future developments on e-banking.

Creation of trust in customers

It is found from the path diagram that level of customer trust (SRW=.08) in generating
online customer satisfaction is less. So, bank managers must try to earn customers trust
by incorporating effective technology tools and motivational messages that reflect full
guarantee to protect their personal information. Also the banks must provide balance
enquiries through SMS/emails and also provide statements for every transaction
conducted electronically. This will enable the customers to know the accounts status,
verify accuracy of all transactions online including confirmation of the same. It is also
worth noting that online banking is less verifiable and controllable, customers usually
have difficulty in claiming compensation when any transaction error occurs. Thus,
online bank administrators must provide customers with digital receipts or a guarantee
for every transaction in order to increase confidence of customers.

Training to employees/Internal Marketing

It is also found in the present study that customers attach more importance to employee
behaviour, their friendliness attitude, politeness, cooperation, promptness in answering
enquiries online, helping attitude etc. Thus, banks must pay special attention on hiring
competent and friendly personnel, train them to effectively handle customer problems

191
and trust their employees in dealing online. Also, banks can enhance their competitive
advantage if employees are supported effectively to satisfy customer needs because it is
only service oriented staff that plays a vital role in enhancing organizational capabilities
for delivering high quality and pleasant services to customers which enhance customer
satisfaction, their loyalty to their bank and make them committed to deal online and
hence result in better organizational performance in terms of higher deposits and
profits.

Enhances contents of websites

It is obviously said phrase that content is king. Without content and clear information,
a website will lack an essential element of online marketing regardless of how nice or
elegant the design of the site is. These days, majority of bank customers are
increasingly utilizing online content to make financial decisions, it is advise able to
website content developers that they should display only relevant bank products and
services with relevant details.

Security for transactions

It has also been seen in the present study that customers are conscious about security of
usage of credit card, debit card and electronic transfers (MS: 3.28). Thus, security of
online transactions can be enhanced by continuously strengthening the security control
of the information systems and by implementing the most advanced and latest security
technologies.

Incentives
Bank do not provide any incentives for continuous dealing (MS: 3.48). Infact they are
required to introduce certain types of incentives to their online banking customers for
continuous dealing with their banks website and not switching to any other banks. The
incentives may be in the form of less charges for conducting transactions online after a
certain time period and so on. For instance, ICICI bank had launched a pure online
banking savings account in July 2008 called b2b-Branch-free-Banking, the
advantages of which includes Zero minimum balance, Zero charges for fund
transfer, online bill payments, mobile top-ups etc. (Business Line, 2008).

192
Makes e-banking error free
Almost average mean scores are awarded by customers to transaction that e-banking is
error free (MS: 3.57), which may be due to the fact that like manual banking system, e-
banking also has its own weaknesses and risks. Thus, to make e-banking error-free,
developers are required to make sites easy to use and navigate with sufficient security
measures (Maureen et al., 2013).

Delivery of better service quality

In banking industry, delivery of better service quality is a way to achieve higher
customer satisfaction. In an online environment, banks interact with customers through
their call centres. It implies that quality customer service staff is a key ingredient in a
successful bank-customer relationship. Back office employees are also required to be
well equipped with enough knowledge to respond to problems of their customers.

Understand specific needs

It is found that customers are averagely satisfied with call centre administrators for
understanding their specific needs (MS: 3.37). In this way, bank employees need to
serve customers politely, striving to get information first hand, where they are expected
to stimulate customers trust for creating good relationship between bank employees and
customers. In addition to this, employees are required to listen to customer complaint
by giving them special attention and help them in solving their problems by giving
advice on new products with their advantages compared to similar products of
competitors (Rahman, 2004).

Technical Problems
There are lot of technical problems which are faced by both bankers and customers
such as slow down of network, hardware problems, electricity etc. To overcome these
problems banks must properly check their internet connectivity with sustained power
supply to make internet banking successful. Further, all relevant information should be
saved so that the attempt of fraud can be traced, which means that hard drive should not
be formatted immediately. In addition to this, the backed up data should be periodically
tested to ensure recovery without loss of transaction

193
6.7 Theoretical Implications
Awareness to customers
Banks are also required to make the non users aware through print media followed by
internet, SMS on mobile, outdoor advertisement and television. They should resort to
video presentations at bank branches to project the user- friendliness of their banking
services in general and e-banking in particular (Sharma, 2011). Also, they should
organise seminars/workshops/talks on the healthy usage of e-banking. Moreover,
bankers need to provide sufficient guidance to customers for using e-banking services.

Customer feedback
It is an established concept of strategic planning. The performance of online banking
be monitored on a regular basis by sending any feedback questions to be filled by
customers through their websites (Joseph et al., 1999).

Installation of separate counters

Banks must help customers to do online banking. A separate counters should be opened
by banks at their various branches and the persons to be selected to assist online
customers must be expert in information technology and have wide knowledge and
patience to assist the customers.

Government regulation
Government or central bank can also play major role in the development of internet
banking by reducing service charges on the transactions and by assuring the customers
adequate regulatory framework that will ensure customer protection and security of
transactions (Abdullah et al., 2011).

Maintenance of record
All applications, including those received online, have proper record keeping facilities
for legal purposes. It is necessary to keep all received and sent messages both in
encrypted and decrypted form for future reference.

Good working conditions

Good working conditions are also generally considered as a pre-requisite for good
service quality, as employees perform better when organisation creates a climate of

194
concern and care (Kinicki et al., 1992). Since back office employees also play
important role in online environment as compared to front line employees, so they must
be provided better working conditions as an important reward to make them deliver
quality service to their customers, because employee satisfaction can be the major
factor influencing customer satisfaction (Snipes et al., 2005).

6.8 Customer Awareness

Customers are required to be made aware and knowledgeable about the proper
use of e-banking services such as making strong passwords, logging out and
closing browsers after completing online banking (Patil, 2012).

They are also required to be enlightened to update antivirus systems. Further

customers must be advised that they do not respond to suspicious e-mails and
SMS and also do not save their personal information (passwords, PINs, credit
card or debit card numbers) on hard drive if their PC is not used by the customer
alone because this could enable third parties to view the information.

6.9 Future Research

Although this research reveals certain aspects of customer satisfaction and customer
commitment in context of internet banking in Indian context, there is lot of room for
future research in order to ascertain and enrich online banking service in India:
Instead of focussing on banking sector, the broader concept of online services
should be taken into account such as online shopping, online ticketing etc.
Future research ought to apply more comprehensive approach by making a
comparative analysis of branch and online banking services, thereby taking into
consideration the same aspects of study.
Moreover, in future, perception of bank employees should also be taken into
consideration to make study more meaningful and interesting.
Further, comparison between existing users and persons intending to use
internet banking should also be made in future study.

195
Table 6.1: Perceptual Gap between Private and Public Sector Bank Managers
Factors Private Bank Public Bank Mean T. Value Sig
Managers Managers Difference
Perceived 4.40 4.46 0.06 .560 .576
Usefulness
Trust 4.51 4.50 0.01 .075 .940
Customer 4.33 4.40 0.07 .623 .534
Satisfaction
Commitment 4.20 3.80 0.40 2.461 .015
Better 4.01 4.02 0.01 .045 .964
facilities
Service 4.44 4.50 0.06 .502 .616
Quality
Perceived 4.30 4.37 0.07 .583 .561
ease of use
Profitability 4.32 4.33 0.01 .009 .993

196
Table 6.2: Perceptual Gap Between Private and Public Sector Bank Customers
Factors Private Public Bank Mean T. Value Sig
Bank Customers Difference
Customers
Website 3.86 3.93 0.07 1.07 .282
Quality
Customer 3.99 4.10 0.11 1.72 .086
Oriented
Services
Trust 4.03 3.96 0.07 1.04 .298
Commitment 3.72 3.99 0.27 3.05 .002
Courtesy 3.65 3.78 0.13 1.37 .171
After Sales 3.96 4.08 0.12 1.72 .086
Services
Responsiveness 3.76 3.70 0.06 .656 .512
Security 4.09 4.03 0.06 .667 .505
Perceived 4.30 4.49 0.19 2.851 .005
Usefulness
Interactivity 4.08 4.41 0.33 4.94 .000
Perceived Ease 4.14 4.18 0.04 .757 .450
of Use
Behavioural 3.83 3.72 0.11 1.160 .247
Intention
Better Services 4.01 3.66 0.35 3.57 .000

197
Table 6.3: Perceptual Gap of Customers and Bank Managers
Items C BM MD T. Value Sig.
Doesnt allow third person to access 4.16 4.54 .381 4.812 .000
personal information
Login process is secure 4.04 4.48 .440 4.240 .000
Truly sincere in its promises to users 3.75 4.38 .633 6.353 .000
Trust bank 4.09 4.47 .382 4.575 .000
Feel confident in doing e-banking 4.24 4.34 .095 .892 .373
Believe in information presented on 4.45 4.15 .290 2.575 .011
banks website
Continue to use the services 3.73 3.98 .253 -1.909 .057
Up to date equipment & technology 4.39 4.40 .010 -.047 .963
Online services free from deficiencies 3.54 4.16 .626 4.909 .000
Problem solving approach 3.60 4.55 .953 3.221 .002
Simple to do banking 4.09 4.43 .342 4.50 .000
Website easily navigated 4.22 4.34 .122 1.78 .074
Increases productivity 4.06 4.45 .386 4.24 .000
Enhances effectiveness 4.31 4.53 .219 3.25 .001
Happy with online services 4.27 4.35 .084 1.23 .220
Satisfied with transaction procedure 4.01 4.42 .107 1.255 .217
Clear transaction and price 4.20 4.31 .110 2.448 .126
information
Satisfied with payment system 4.21 4.32 .116 1.53 .124
Overall satisfied with online services 4.38 4.61 .235 -3.82 .000

198
 References
Abdullah Bin Omar, Naveed Sultan, Khalid Zaman, Nazish Bibi, Abdul Wajad
and Khalid Khan (2011). Customer perception towards online banking services:
Empirical evidence from Pakistan. Journal of Internet Banking and Commerce,
16(2), 1-24.
Business Line, Mumbai Bureau (2008). Only online savings account from ICICI
bank. Business Line, July 2008, pp.6.
Chaudhry Kashif Mahmood, Tayyiba Khalil and Abdulghani Ali Al. Hattami
(2013). Competitive study of service quality based on the perception of customers
and management of Islamic Banks in Pakistan. IOSR Journal of Business and
Management, 9(3), 73-78.
Ganesan R and Vivekanandan K. (2009). A secured hybrid architecture model for
internet banking (e-banking). Journal of Internet Banking and Commerce, 4(1), 1-
14.
Joseph Mathew, Cindy AcClure, Beatriz Joseph (1999). Service quality in the
banking sector: The impact of technology on service delivery. International
Journal of Bank Marketing, 17(4), 182-191.
Katri K. (2003). Adoption of electronic banking: Underlying consumer behaviour
and critical success factors. Case of Estonia. Retrieved on (March, 2010) from
http://www.ise.ac.UK.
Kinicki, A.J.; K.P. Carson and G.W. Bohlander (1992). Relationship between an
organisations actual human resource efforts and employee attitudes. Group and
Organisation Management, 17(1), 135-152.
Lee Yu Ping, Nguyen Tuan Ana, Ching Yaw Chen (2009). Banking service
quality in Vietnam: A comparison of customers and bank staff perception. The
Journal of International Management Studies, 4(2), 147-157.
Maureen W. Grace, David N. Kiragu and Patrick Ngumi (2013). A literature
survey on electronic banking security issues. Prime Journal of Social Sciences,
2(2), 200-203.
Mussiime Andrew and Malinga Ramadhan (2011). Internet banking, consumer
adoption and customer satisfaction. African Journal of Marketing Management,
3(10), 261-269.
Patil N. Usha (2012). Internet banking in India: Risk analysis and adoption in an
emerging economy. Indian Streams research Journal, 2(3), 1-4.
Rahman, Zillur (2004). Developing customer oriented services: A case study.
Managing Service Quality, 14(5), 426-435.
Sharma Himani (2011). Bankers perspective on e-banking. National Journal of
Research in Management, 1(1), 71-85.

199
 Snipes Robin L; Sharon L. Oswald; Michael La Tour and Achilles A. Armenakis
(2005). The effects of specific job satisfaction facets on customer perceptions of
service quality: An employee level analysis. Journal of Business Research,
58(10), 1330-1339.

200
BIBLIOGRAPHY
 BIBLIOGRAPHY
Abdullah Bin Omar, Naveed Sultan, Khalid Zaman, Nazish Bibi, Abdul Wajid
and Khalid Khan (2011). Customer perception towards online banking services:
Empirical evidence from Pakistan. Journal of Internet Banking and Commerce,
16 (2), 1-17.
Abukhzam, M. And Lee, A. (2010). Factors affecting bank staff attitude towards
e-banking adoption in Libya. The Electronic Journal on Information systems in
Developing Countries, 42(2), 1-15.
Adams, D.A., R.R, Nelson & P.A. Todd (1992). Perceived usefulness, ease of
use, and usage of information technology: A Replication. MIS Quaterly, 16(2),
227-247.
Agarwal, Sanjeev, Krishna M. Erramilli and Chekitan D. Dev (2003). Market
orientation and performance in service firms: Role of innovation. Journal of
Service Marketing, 17(1), 68-82.
Aghdasi, M., Persson, L., Ghasemi, R. (2006). Casual relations between strategic
values and E-banking adoption in IRAN with a comparison view between state
and private owned banks. National Industrial Conference, Tehran.
Ahire, S., Golhar, D., and Waller, M. (1996). Development and validation of
TQM implementation constructs. Decision Sciences, 27(1), 23-56.
Ahmad Ashfaq, Muhammad Bashir and Sultan Mubariz (2010). Impact of
customer satisfaction on performance of commercial banks in Pakistan.
Interdisciplinary Journal of Contemporary Research in Business, 2(8), 316-322.
Akinbola Agboola (2005). Information and communication technology (ICT) in
banking operations in Nigeria- An evaluation of recent experiences. Ife Journal of
Economics and Finance, 5(1&2), 1-24.
Alam Mahtab and Ankita M Soni (2012). Customer satisfaction of internet
banking and theory of big push: An analytical study with special reference to
selected customers in Vadodara city. Ninth AIMS International Conference on
management, 941-947.
Allagui, A. & Temessek, A. (2004). LaFidelite des Utilisateurs des Services dun
Portail Internet: Proposition et Test dun Modele Integrateur. C.R.G.N.A, IAE de
Nantes.
Allen, N.J. and Meyer, J.P. (1990). The measurement and antecedents of
affective, continuance and normative commitment to the organization. Journal of
Occupational Psychology, 63(1), 1-18.
Alsajjan A. Bander and Charles Dennis (2009). The impact of trust on acceptance
of online banking. European Association of Education and Research in
Commercial distribution.

201
 Alsajjan, B. and Dennis, C. (2006). The Impact of trust on acceptance of online
banking. European Association of Education and Research in Commercial
Distribution, 27-30 June 2006 Brunel University West London, United
Kingdom.
Anderson, E and Weitz, B. (1992). The use of pledges to build and sustain
commitment in distribution channels. Journal of Marketing Research, 29(1), 18-
34.
Anderson, J.C. and Marus, J.A. (1990). A model of distribution firm and
manufacturer firm working partnerships. Journal of Marketing, 54(1), 42-58.
Ashtiani Peyman Ghafori and Ali Iranmanesh (2012). New approach to study of
factors affecting adoption of electronic banking services with emphasis on the
role of positive word of mouth. African Journal of Business Management, 6(11),
4328-4335.
Auta Elisha Menson (2007). E-banking in Developing economy: Empirical
evidence from Nigeria. Journal of Applied Quantitative methods, 5(2), 212-222.
Ayo, C.K.; Adewoye J.O. and Oni A.A. (2010). The state of e-banking
implementation in Nigeria: A post consolidation review. Journal of Emerging
Trends in Economics and Management Services, 1(1), 37-45.
Azouzi Dhekra (2009). The extent of adoption of electronic banking in Tunisia.
Journal of Internet Banking and Commerce, 14(3), 8-11.
Bagozzi, R.P. and J.F. Edwards (1998). A General Approach to Construct
Validation in Organisational Psychology: Application to the Measurement of
Work Values. Organizational Research Methods, 1(2), 45-87.
Bander A. Alsajjan and Charter Dennis (2006). The impact of trust on acceptance
of online banking. European Association of Education and Research in
Commercial Distribution, 5(2), 1-19.
Banker, R.D. and Natarajan, R. (2008). Evaluating contextual variables affecting
productivity using data envelopment analysis. Operations Research, 56(1), 48-58.
Barrett, P. (2007). Structural equation modeling: Adjudging model fit. Personality
and Individual Differences, 42(5), 815-24.
Bashir, A. (1999). Risk and Profitability measures in Islamic Banks: The case of
two Sudanese banks. Islamic Economic Studies, 6(2), 1-24.
Baskar S. and M Ramesh (2010). Linkage between online banking service quality
and customers. International Cross Industry Journal, 6(3), 45-51.
Benmati and Serva (2007). Trust and distrust in online banking: Their role in
developing countries. Information Technology for Development, 13(2), 161-175.
Bentler, P. M. & Bonnet, D. C. (1980). Significance tests and goodness of fit in
the analysis of covariance structures. Psychological Bulletin, 88(3), 588-606.

202
 Berger, A.N. (2003). The economic effects of technological progress: Evidence
from the banking industry. Journal of Money, Credit, Banking, 35(2), 141-176.
Beri, G.C. (2008). Marketing Research, New Delhi: Tata McGraw Hill Company
Limited.
Berry and Parasuraman (1991). Marketing Services competing through quality
(New York: The Free Press), 1991.
Bitner Stephen, W. Brown and Mathew L. Meuter (2000). Technology infusion in
service encounters. Journal of the Academy of Marketing Science, 28(1), 138-149.
Bitner, M., B. Booms, and M. Tetreault (1990). The service consequences of
satisfaction decisions. Journal of Marketing, 5 (4), 71-84.
Booz, Allen and Hamilton (1997). Internet banking: A study of potential. INC,
New York.
Boshoff, C. and Gray B. (2004). The relationships between service quality,
customer satisfaction and buying intentions in the private hospital industry. South
African Journal of Business Management, 35(4), 27-37.
Boulaire, C. and Mathieu, A. (2000). La fidelite a unsite web: Proposition dun
cadre. Conceptual Preliminary proceedings of the 16th congress of AFM,
Montreal.
Boulding, W., Kalra, A., Staeling, R., and Zeithaml, V.A. (1993). A dynamic
process model of service quality: From expectation to behavioural intentions.
Journal of Marketing Research, 30(1), 7-27.
Bourne, M.C.S., Neely, A.D., Mills, J.F. and Platts, K.W. (2003). Implementing
performance measurement systems: A literature review. International Journal of
Business Performance Management, 5(1), 1-24.
Bradley L. And Stewart K. (2003). Delphi study of internet banking. MCB UP
Limited, 272-281.
Burns, Alvin C.; Bush, Ronald F. (2006). Marketing Research- An applied
orientation, New Delhi. Pearson Boston.
Business Line, Mumbai Bureau (2008). Only online savings account from ICICI
bank. Business Line, July 2008, pp.6.
Buttle, F. (1996). SERVQUAL: Review, Critique, Research Agenda. European
Journal of Marketing, 30 (1), 8 32.
Byrne, Barbara (1998). Structural equation modelling with LISREL, PRELIS and
SIMPLISA: Basic applications and programs, Lawrence Erlbaum. New Jersey.
Cao, M; Zhang, Q and Seydel, J. (2005). B2C e-commerce website quality: An
empirical examination. Industrial Management and Data System, 105(5), 645-
661.

203
 Casalo V. Luis, Carlos Flavian and Miguel Guinaliu (2007). The role of security,
privacy, usability and reputation in the development of online banking. Online
Information Review, 31(5), 583-603.
Chang Hsin Hsin and Mohammad Rizal Bin Abdul Hamid (2010). An empirical
investigation of internet banking in Taiwan. Global Journal of Business Research,
4(2), 39-47.
Chaudhry Kashif Mahmood, Tayyiba Khalil and Abdulghani Ali Al. Hattami
(2013). Competitive study of service quality based on the perception of customers
and management of Islamic Banks in Pakistan. IOSR Journal of Business and
Management, 9(3), 73-78.
Cheng T.C. Edwin, David Y.C. Lam and Andy C.L. Yeung (2006). Adoption of
internet banking: An empirical study in Hong Kong. Decision support System,
42(3), 1558-1572.
Cheung M.K.Christy and Mathew K.O. Lee (2005). The asymmetric effect of
web site attribute performance on web satisfaction: An empirical study. E-service
Journal, 3(3), 65-86.
Chinh Vu Thi My and Nguyen Viet Anh (2008). Measuring customer satisfaction
based on service quality gap at a local bank in Vietnam. Journal of International
Business Research, 7(3), 28-51.
Chiou, J. S. (2004). The Antecedent of Consumers loyalty toward internet
service providers. Information & Management, 41(2), 685-695.
Chung Hoon Park, Young Gul Kim (2003). A framework of dynamic CRM:
Linking marketing with information strategy. Business Process Management
Journal, 9(5), 652-671.
Churchill, Gilbert A. (1988). Basic Marketing Research, Florida: The Oryden
Press.
Churchill, Gilbert A., Jr (1979). A paradigm for developing better measures of
marketing constructs. Journal of Marketing Research, 16(1), 64-73.
Clames, M.D. (2008). An empirical analysis of customer satisfaction in
international air travel. Innovative Marketing, 4(1), 49-62.
Cohen, Wesley M. and Daniel A. Levinthal (1990). Absorptive capacity: A new
perspective on learning and innovation. Administrative Science Quartely, 35 (1),
128-152.
Consult, A.N. (2002). China online banking study. Available at
http://estore.chinaonline.com/chinonlbanstu.html.
Cooper,R .G.(1997). Examining some myths about new product winners,
In Katz, R.(ed). Journal of internet banking and commerce, 5(1), 550-560.

204
 Coulter, K.S. and R.A. Coulter (2002). Determinants of trust in a service
provider: The moderating role of length of relationship. Journal of Services
Marketing, 16(1), 35-50.
Cronin, J. (1998). Banking and Finance on the internet. John Wiley and Sons,
NY.
Crosby Lawrence a., Kenneth R. Evans and Deborah Cowles (1990). Relationship
quality in service selling: An interpersonal influence perspective. Journal of
Marketing, 54(4), 68-81.
Cry, D., Bonanni, C., Bowes, J., Ilsever, J. (2005). Beyond trust: Website design
preferences across cultures. Journal of Global Information Management, 13(4),
25-55.
Dai Hua, Peter Haried and A.F.Salam (2011). Antecedents of online service
quality, commitment and loyalty. Journal of Computer Information Systems, 1(1),
1-11.
Dandapani, K., Krels, G.V. and Lawrence, E.R. (2008). Internet banking services
and credit union performance. Managerial Finance, 34(6), 437-447.
David, B. (1987). Competitive viability in banking: Scale, scope and product mix
economies. Journal of monetary economy, 20(3), 501-520.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use and user
acceptance of information technology. MIS Quartely, 13(3), 319-340.
Davis, F.D, Bagozzi, R.P and Warshaw, P.R. (1992). Extrinsic and
intrinsic motivation to use computers in the workplace. Journal of applied
social psychology, 22(14), 1111-1132.
Davis, F.D., Bagozzi, R.P. and Warshaw, P.R. (1989). User acceptance of
computer technology: A comparison of two theoretical models. Management
Science, 35(8), 9821003.
Deng and Dart (1992). Measuring market orientation: A multi factor,
multi item approach. Journal of marketing management, 10(1), 725-742.
Diamantopoulos, A., & Siguaw, J. A. (2000). Introducing LISREL, London: Sage
Publications.
Dixit Neha and Saroj K. Datta (2010). Customers perception on internet banking
and their impact on customer satisfaction and loyalty: A study in Indian context.
Journal of Computing, 2(7), 131-145.
Durkasree, P. and M. Ramesh (2011). Service quality in online marketing:
Customer centric analysis. Perspectives of Innovations, Economics and Business,
7(1), 27-34.
Dwyer, R.F., P.H. Schurr and S.Oh (1987). Developing buyer-seller
relationships. Journal of Marketing, 51(2), 11-27.

205
 East, R. (1997). Consumer behaviour: Advances and applications in
marketing, Prentice Hall, London.
Epstein, Marc J. (2004). Implementing E-commerce strategies: A guide to
corporate success after the Dot.Com.Bust (1 ed): Praeger.
Eze Uchenna Cyril, Jeniffer Keru Manyeki, Ling Heng Yaw and Lee Chai Hor
(2011). Factors affecting internet banking adoption among young adults:
Evidence from Malaysia. International Conference on Social Science and
Humanity, 5(1), 377-381.
Fabrigar, Leandre R., Wegener, Dueane T., MacCallum Robert C., and Strahan
Erin J. (1995). Evaluating the use of exploratory factor analysis in psychological
research. Psychological Methods, 4(1), 272-299.
Fey, C., Margulis Yakushew, S., Park, H. And Bjarkman I. (2009). Opening the
black box of the relationship between HRM practices and firm performance: A
comparison of MNE subsidiaries in the USA, Finland and Russia. Journal of
International Business Studies, 40(4), 690-712.
Fitzsimmons J & Fitzsimmons M (1997). Service Management:
Operations Strategy, and information technology. New York: Irwin and
McHraw- Hill.
Flavian Carlos, Miquel Guinaliu and Eduardo Torres (2006). How bricks and
mortar attributes affect online banking adoption. International Journal of Bank
marketing, 24(6), 406-423.
Floh Arne and Horst Freiblmair (2006). What keeps the e-banking customer
loyal? A multigroup analysis of the moderating role of consumer characteristics
on e-loyalty in the financial service industry. Journal of Electronic Commerce
Research, 7(2), 97-110.
Fock Siew Tong and Hian Chye Koh (2006). Conceptualization of trust and
commitment: Understanding the relationships between trust and commitment and
the willingness to try internet banking services. International Journal of Business
and Information, 1(2), 194-208.
Fornell, Claes (1992). A national customer satisfaction barometer: The Swadeshi
Experience. Journal of Marketing, 56 (1), 6-21.
Fornell, Claes and David F. Larcker (1981). Evaluating structural equation
models with unobservable variables and measurement error. Journal of
marketing, 18(2), 39-50.
Fournier, S. and Mick, D.G. (1999). Rediscovering satisfaction. Journal of
Marketing, 63(3), 5-23.
Fredriksson, Odd (2005). Relationship and loyalty attitude differences among
Swedish retail bank clients: E-Banking versus branch office users. New York:
Free Press.

206
 Furnell, S. and Karweni, T. (1999). Security implications of electronic
commerce: A survey of consumers and business. Electronic Networking
Applications and Policy, 9(5), 372-382.
Ganesan, R. And Vivekanandan, K. (2009). A secured hybrid architecture
model for internet banking (e-banking). Journal of Internet Banking and
Commerce, 14(1), 1-17.
Ganguli Shrishendu and Sanjit Kumar Roy (2010). Generic technology-based
service quality dimensions in banking: Impact on customer satisfaction and
loyalty. International Journal of Bank Marketing, 29(2), 168-189.
Gates, S. (1999). Aligning strategic performance measures and results. The
Conference Board, New York.
Gbadeyan R.A. and O.O. Akinyosoye Gbonda (2011). Customers preferences for
e-banking services: A case study of selected banks in Sierra Leone. Australian
Journal of Business and Management Research, 1(4), 108-116.
Gerrard, P. and Cunningham, B.J. (2003). The diffusion of internet banking
among Singapore consumers. International Journal of Bank Marketing, 21(1), 16-
28.
Gerrard, Philip and J. Barton Cunningham (2004). Consumer switching behaviour
in the Asian Banking Market. Journal of Services Marketing, 18(3), 215-223.
Gilbert G.R., Veloutsou C. (2006). A cross-industry comparison of customer
satisfaction. The Journal of Services Marketing, 20(5), 298-308.
Goodhue, Dale L. and Ronald L. Thompson (1995). Task technology fit and
individual performance. MIS Quartely, 19(2), 213-236.
Goudreau, R. (1992). Commercial banks profitability rises as interest margins and
securities sales increases. Economic Review: Federal Reserve Bank of Atlanta,
33(1).
Gronroos, C. (1984). A service quality model and its marketing implications.
European Journal of Marketing, 18(4), 37-44.
Guo Chiquan, Anand Kumar and Pornsit Jiraparn (2004). Customer satisfaction
and profitability: Is there a lagged effect. Journal of Strategic Marketing, 12(1),
129-144.
Guriting, P; and Ndubisi N.O. (2006). Borneo online banking: Evaluating
customer perceptions and behavioural intention. Management Research
News, 29(2), 6-15.
Gustafsson, Anders and Michael D. Johnson (2002). Measuring and managing the
satisfaction-loyalty-performance links at Volvo. Journal of Targeting,
Measurement and Analysis for Marketing, 10(3), 249-258.

207
 Hair, Joseph F. Jr., Black, Barry, William C. , Babin, J., Anderson, Rolph E., &
Tatham, Ronald L. (2009). Multivariate Data Analysis, 6th ed. New Delhi:
Pearson Prentice Hall.
Hair, Jr., J.F. Anderson, R.E. Tatham, R.L. and Black, W.C. (1995). Multivariate
Data Analysis with readings, 4th edition. Englewood Cliffs, New Jersey, Prentice
Hall.
Hajri Al Salim (2008). The adoption of e-banking: The case of Omani banks.
International Review of Business Research Papers, 4(5), 120-128.
Hajri Al Salim and Arthur Tatnall (2007). A Comparative study of internet
banking in Oman and Australia. International Review of Business Research
Papers, 3(1), 36-43.
Hamadi Chakib (2010). The impact of quality of online banking on customer
commitment. Communications of the IBIMA.
Han, S. and Baek, S. (2004). Antecedents and consequences of service quality in
online banking: An application of the SERVQUAL instrument. Advances in
Consumer Research, 31(1), 208-14.
Hansemark, O.C. and Albinson, M. (2004). Customer satisfaction and
retention: The experiences of individual employees. Managing Service
Quality, 14(1), 40-57.
Hanzaee Kambiz Heidarzadeh and Tooraj Sadeghi (2010). Measuring banks
automated service quality: A re-examination and extension in an Islamic country.
World Applied Sciences Journal, 8(7), 874-880.
Haque Ahasunal, Arun Kumar Tarofder, Sabbir Rahman and Md. Abdur Raquib
(2009). Electronic transaction of internet banking and its perception of Malaysian
online customers. African Journal of Business Management, 3(6), 248-259.
Hassan M. Taimoor, Aqeel Mukhtor, Rana Kaleem Ullah, Huzaifah Shafique and
Shafi Ur Rehma (2012). Customer service quality perception of internet banking.
International Journal of Learning and Development, 2(2), 86-100.
Herington, C. and Weaven, S. (2007). Can banks improve customer relationships
with high quality online services. Managing Service Quality, 17(4), 404-414.
Hickman, M. (1999). Internet banking: Transactions to active selling. Bank
Systems and Technology, 36(10), 846-878.
Hoyer, W.D. and MacInnis, D.J. (2001). Consumer behaviour. 2 nd Edition
Boston: Houghton Mifflin Company.
Hozlina (2011). Impacts of service quality on customer satisfaction: Study of
Online banking and ATM services in Malaysia. International Journal of Trade
and Economics, 2(1), 242-258.

208
 Hu and Bentler (1999). Cut off criteria for fit indexes in covariance structure
analysis: Conventional criteria versus new alternatives. Structural Equation
Modelling, 6(1), 1-55.
Igbaria, M.; Iivari, J.; and Maragahh, H. (1995). Why do individuals use computer
technology? A Finnish case study. Information & Management, 29(1), 227-238.
Iman Akour, kaled Alshare, Donald Miller and Musa Dwairi (2006). An
exploratory analysis of culture, perceived ease of use, perceived usefulness and
internet acceptance: The case of Jordan. Journal of Internet Commerce, 5(3), 83-
108.
Ittner, C., Larcker, D.and Randall, T. (2003). Performance implications of
strategic performance measurement in financial service firms. Accounting
Organizations and Society, 28(7-8), 715-741.
Jalal Akram, Jassim Marzooq and Hassan A. Nabi (2011). Evaluating the impacts
of online banking factors on motivating the process of e-banking. Journal of
Management and Sustainability, 1(1), 32-42.
Jap, Sandy D. and Shanker Ganessan (2000). Control mechanisms and
relationship life cycle: Implications for safeguarding specific instruments
and developing commitment. Journal of marketing research, 37(1), 227-
245.
Jayawardhena, C., and Foley, P. (2001). Changes in Banking SectorThe Case
of Internet Banking in UK. Journal of Internet Research: Networking and Policy,
10(1), 1930.
Jham Vimi and Kaleem Mohd Khan (2005). Customer satisfaction and its impact
on performance in Banks: A proposed model. South Asian Journal of
Management, 16(2), 109-126.
Johnson, Michael D . Eugene W. Anderson, Claes Fornell (1995). Rational
and adaptive performance expectations in a customer satisfaction
framework. Journal of Consumer Research, 21(3), 695-707
Joreskog K. And Sarbom D., (1993). Lisrel structural equation modelling with
SIMPLIS command language. Chicago, IL: Scientific software international Inc.
Joseph Mathew, Cindy AcClure, Beatriz Joseph (1999). Service quality in the
banking sector: The impact of technology on service delivery. International
Journal of Bank Marketing, 17(4), 182-191.
Kaleem Ahmad and Saima Ahmad (2008). Bankers perception of electronic
banking in Pakistan. Journal of Internet Banking and Commerce, 13(1), 1-16.
Karim Akram Jalal and Allam M. Hamdan (2010). The impact of internet
technology on improving bank performance matrix: Jordanian banks as case
study. European, Mediterranean and Middle Eastern Conference on Information
Systems, 1-15.

209
 Karjaluoto, H.,Mattila,M.,and Pento, T. (2002). Factors underlying attitude
formation towards online banking in Finland. International Journal of Bank
Marketing, 20(6), 261-72.
Kasheir Dalia El, Ahmad S. Ashour and Omneya M. Yacout (2009). Factors
affecting continued usage of internet banking among Egyptian customers.
Communications of the IBIMA, 9(1), 252-263.
Kashyap Monika and Dinesh Kumar Sharma (2012). Internet banking: Boon or
Bane. Gian Jyoti e- Journal, 1(2), 1-16.
Kassim N.M. and Abdullah A.K.M.A (2006). The influence of attraction
on internet banking, an extension to the trust-relationship commitment
model. International Journal of Bank Marketing, 24(6), 424-442.
Katri K. (2003). Adoption of electronic banking: Underlying consumer behaviour
and critical success factors. Case of Estonia. Retrieved on (March, 2010) from
http://www.ise.ac.UK.
Kenny, D.A. & McCoach, D. B. (2003). Effect of the number of variables on
measures of fit in structural equation modeling. Structural Equation Modeling,
10(3), 333-351.
Khan Mohammad Sadique and Siba Sankar Mahapatra (2009). Service quality
evaluation in internet banking: An empirical study in India. International Journal
of Indian Culture and Business management, 2(1), 30-46.
Khurana Sunayna (2009). Managing service quality: An empirical study on
internet banking. The IUP Journal of Marketing Management, 8(3&4), 96-114.
Kinicki, A.J.; K.P. Carson and G.W. Bohlander (1992). Relationship between an
organisations actual human resource efforts and employee attitudes. Group and
Organisation Management, 17(1), 135-152.
K.Line, R. B. (2005). Principles and practice of structural equation modeling (2nd
ed.). New York: The Guilford Press
Kotler P, Armstrong G (2012). Principles of Marketing, 14th Edition, New Jersy,
USA. Pearson Education Inc.
Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (1997). Principles of
Marketing. New Jersey: Prentice Hall.
Kour Rimpi (2012). An impact of IT on branch productivity of Indian banking in
the era of transformation. Journal of Internet Banking and Commerce, 17(3), 1-
11.
Kumbhar M. Vijay (2011). Factors affecting the customer satisfaction in e-
banking: Some evidences from Indian banks. Management Research and
Practice, 3(4), 1-14.

210
 Laforet, S. Li, X. (2005). Consumers attitudes towards online and mobile
banking in China. International Journal of Bank Marketing, 23(5), 362-380.
Landis, Ronald S., Daniel J. Beal, and Paul E. Tesluk (2000). A Comparison of
Approaches to Forming Composite Measures in Structural Equation Models.
Organizational Research Methods, 3(2), 186-207.
Laudon, D.P. and Laudon, J.P. (1991). Business information system: A problem
solving approach. New York, HBJ, College publishers.
Lee Gwo- Guang and Hsiu-Fen Lin (2005). Customers perception of e-service
quality in online shopping. International Journal of Retail and Distribution
Management, 33(2), 316-322.
Lee Kun Chang (2007). Transfer from offline trust to key online perceptions: An
empirical study, IEEE Transactions of Engineering Management, 54(4), 729-741.
Lee Ming Chang and Ing San Hwan (2005). Relationship among service quality
and profitability in the Taiwanese banking industry. International Journal of
Management, 22(4), 635-648.
Lee Yu Ping, Nguyen Tuan Ana, Ching Yaw Chen (2009). Banking service
quality in Vietnam: A comparison of customers and bank staff perception. The
Journal of International Management Studies, 4(2), 147-157.
Lehtinen, U., Lehtinen, J.R. (1991). Two Approaches to service quality
dimensions. Services Industries Journal, 11(3), 287-303.
Lewis, Robert C. and Bernard H. Booms (1983). The marketing aspects of
service quality. American Marketing Association, 99-107.
Li Dahui, Glenn J. Browne and James C. Wetherbe (2006). Why do internet users
stick with a specific website: A relationship perspective. International Journal of
Electronic Commerce, 10(4), 105-141.
Liao Ziqi and Michael Tow Cheung (2008). Measuring consumer
satisfaction in internet banking: A core framework. Communications of the
ACM- The Psychology of security: Why do good users make bad decisions?
15(4), 47-51.
Lichtenstein Sharman and Kirsty Williamson (2006). Understanding consumer
adoption of internet banking: An interpretive study in the Australian Banking
context, Journal of Electronic Commerce Research, 7(2), 50-66.
Lin Grace T.R. and Chia-Chi Sun (2009). Factors influencing satisfaction and
loyalty in online shopping: An integrated model. Online Information Review,
33(3), 458-475.
Lociacono, E., Watson, R.T. and Goodhue, D.(2000). WebQual: A website
quality instrument. Working Paper, Worcester Polytechnic Institute.

211
 Loonam, M.and O. Loughlin, D. (2008). Exploring e-service quality: A study of
Irish online banking. Marketing Intelligence and Planning, 26(7), 1759-1780.
Luarn Pin and Hsin- Hui Lin (2003). A customer loyalty model for e-service
context. Journal of Electronic Commerce Research, 4(4), 156-167.
Ma Zhengwei (2012). Factors affecting the customer satisfaction of internet
banking: An Empirical study in China. Journal of Convergence Information
Technology, 7(3), 101-109.
MacCallum, R. C., Browne, M. W., & Saugawara, H. M. (1999). Power analysis
and determination of sample size for covariance structure modeling.
Psychological Methods, 1(2), 130-49.
Malhotra Pooja and Balwinder Singh (2007). Current state of internet
banking in India and its implication for the Indian Banking Industry.
Eurasian Journal of Business and Economics, 2(4), 43 62.
Malhotra, Naresh K. (2007). Marketing Research- An Applied Orientation. New
Delhi :Pearson Education.
Manzano Joaquin Aldas, Carlos Lassola-Navarre, Carla Ruiz- Mafe and Silvia
Sanz-Blas (2008). Key drivers of internet banking services use. Online
Information Review, 33(4), 672-695.
Mathieson, k. (1991). Predicting user intentions: Comparing the technology
acceptance model with the theory of planned behaviour. Information Systems
Research, 2(3), 173-191.
Mathwick, C., Rigdon and Malhotra, N.K. (2001). The effect of dynamic retail
experiences on experimental perceptions of value: An internet and catalog
comparison. Journal of Retailing, 78(1), 51-60.
Mattila Minna, Karjoluoto Heikki, Topio Pento (2003). Internet banking adoption
among mature customers: Early majority or laggards?. Journal of Services
Marketing, 17(5), 514-528.
Maureen W. Grace, David N. Kiragu and Patrick Ngumi (2013). A literature
survey on electronic banking security issues. Prime Journal of Social Sciences,
2(2), 200-203.
Mavri, M.and G.I.Oannou (2006). Consumers perspectives on online banking
services. International Journal of Consumer Studies, 30(6), 552-560.
Mc Knight, D.H., Choudhury, V., Kacmar, C. (2000). Developing and validating
trust measures for e-commerce: An integrative typology. Information Systems
Research, 13(3), 334-359.
McDonald, R. P., & Ho, H. R. (2002). Principles and practices in reporting
statistical equation analysis. Psychological Methods, 7(1), 64-82.

212
 McKnight, D.H., Chervany, N.L. (2002). What trust means in e-commerce
customer relationship: An interdisciplinary conceptual topology. International
Journal of Electronic Commerce, 6(2), 35-39.
Mcknight, D.H., Choudhury, V., and Kacmar, C. (2002). Developing and
validating trust measures for e-commerce: An Integrative Typology. Information
Systems Research, 13(3), 334-359.
Mcquitty, S. (2004). Statistical power and structural equation models in business
research. Journal of Business Research, 57(2), 175-83.
Miles, J. & Shevlin, M. (1998). Effect of sample size, model specification and
factor loadings on the GFI in confirmatory factor analysis. Personality and
Individual Differences, 25(7), 85-90.
Minjoon Jun, Zhilin Yang and Daesoo Kim (2003). Customers perception of
online retailing service quality and their satisfaction. International Journal of
Quality and Reliability Management, 21(8), 817-840.
Mohammad Anber Abraheem Shlash and Shireen Yaseen Mohammad
Alhamadani (2011). Service quality perspectives and customer satisfaction in
commercial banks working in Jordan. Middle Eastern Finance and economics,
14(2), 60-72.
Moore, G.C. and Benbasat, I. (1991). Development of an instrument to measure
the perception of adopting an information technology innovation. Information
Systems research, 2(3), 192-222.
Moorman, C., G. Zaltman, and R. Deshpande (1992). Relationships between
providers and users of market research: The dynamics of trust within and between
organizations. Journal of Marketing Research, 29(3), 314-329.
Morgan Robert M and Shelby D. Hunt (1994). The commitment trust theory of
relationship marketing. Journal of Marketing, 58(2), 20-38.
Morr Bernard, Giovanni Schiuma and Andy Neely (2002). Assessing strategic
knowledge assets in e-business. International Journal of Business Performance
Management, 4(2/3/4), 279-295.
Muhammad Ali Ramdhani, Abdullah Ramdhani and Dinor Mariam Kurniati
(2011). The influence of service quality toward customer satisfaction of Islamic
Sharia Bank. Australian Journal of Basic and Applied Sciences, 5(9), 1099-1104.
Muhammad Lakhi and Gule Rana (2012). Factors distressing internet banking
adoption among adult students: Evidence from kingdom of Saudi Arabia.
Business and Management Review, 2(1), 76-82.
Muhammed Shaukat and Muhammed Zafarullah (2009). Impact of information
technology on organizational performance-An analysis of qualitative performance
indicators of Pakistans banking and manufacturing companies. European Journal
of Economic, Finance and Administrative Science, 12(1), 48-50.

213
 Mulaik S.A., James L.R., Van Alstine, J. Bennet, N.Lind, S. and Stilwell, C.D.
(1989). Evaluation of goodness of fit indices for structural equation models.
Psychological Bulletin, 105(3), 430-45.
Munhurrun, P. And Naidoo, P. (2000). The impact of internet banking service
quality on satisfaction and behavioural intention. Available at www. The ibfr.com
Musiime Andrew and Malinga Ramadhan (2011). Internet banking, consumer
adoption and customer satisfaction. African Journal of Marketing Management,
3(10), 261-269.
Narver, J.C. and Slaver, S.F. (1990). The effect of a market orientation on
business profitability. Journal of Marketing, 54 (4), 20-34.
Neely, A.D., Gregary, M.J. and Platts, K.W. (1995). Performance measurement
system design: A literature review and research agenda. International Journal of
Operations and Production Management, 15(4), 80-116.
Nguyen Thang Quang (2007). Quality Innovation: Driving forces and
implications for production, trade and consumption. Published Thesis.
Novak, T.P., Hoffman, D.L. and Peralta, M. (1999). Building consumer trust in
online environments: The case for information privacy. Communications of the
ACM, 40(4), 80-85.
Nupur Jannatul Mawa (2010). E-banking and customer satisfaction in
Bangladesh: An analysis. International Review of Business Research papers,
6(4), 145-156.
Odumeru Adetunji James (2010). Diffusion of online recruiting technology in
Nigeria. Online Journal of Social Sciences Research, 1(4), 104-114.
Odumeru James A. (2012). The acceptance of e-banking by customers in Nigeria.
World Review of Business Research, 2(2), 62-74.
Oii Keng-Boon, Alain Yee Loong, Bishan Lin and Boon-in Tan (2010). Online
banking adoption: An empirical analysis. International Journal of Bank
Marketing, 28(4), 1-12.
Oliver, R. (1980). A cognitive model of the antecedents and consequences of
satisfaction decisions. Journal of Marketing Research, 17(4), 460-470.
Oliver, R.L. (1981). Measurement and evaluation of satisfaction processes in
retail settings. Journal of Retailing, 57(3), 25-48.
Ombati Thomas Ogora, Magutu Peterson Obara, Nyamwange Stephen Onserio
and Nyaoga Richard Bintange (2010). Technology and service quality in the
banking industry. African Journal of Business and Management, 1(2), 1-16.
Onay Ceylan and Emre Ozsoz (2007). The impact of internet banking on
profitability-A case of Turkey. Oxford Business and Economics Conference
Program, Available at ceylano@boun.edu.tr.

214
 Opara C. Bright, Ayopoo Olotu and Darego W. Maclayton (2010). Analysis of
impact of technology on relationship marketing orientation and bank
performance. European Journal of Scientific Research, 45(3), 291-300.
Parasuraman A., Grewal, D. (2000). The impact of technology on the quality-
value-loyalty chain: A research agenda. Journal of Academic Market Science,
28(1), 168-174.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1985). A conceptual
model of service quality and its implications for future research. Journal of
Marketing, 49(1), 41-50.
Parasuraman A., Valarie A. Zeithaml and Leonarac Berry (1988). SERVQUAL:
A multiple item scale for measuring consumer perceptions of service quality.
Journal of Retailing, 69(1), 12-40.
Patil N. Usha (2012). Internet banking in India: Risk analysis and adoption in an
emerging economy. Indian Streams research Journal, 2(3), 1-4.
Pavlou, P.A. (2003). Consumer acceptance of electronic commerce: Integrating
trust and risk with the technology acceptance model. International Journal of
Electronic Commerce, 7(3), 101-134.
Pelham, A.M. (1999). Influence of environment, strategy and market orientation
on performance in small manufacturing firms. Journal of Business Research,
45(1), 33-46.
Perumal, V. and Shanmugan (2004). Internet banking: Boone or Bane. Journal of
Internet Banking and Commerce, 19(3), 1-6.
Pikkarainen Tero, Kari Pikkarainen, Heikki Karjoluoto and Seppo Pahnila (2004).
Consumer acceptance of online banking: An extension of the technology
acceptance model. Internet Research, 14(3), 224-235.
Polatoglu, V. and Ekin, S. (2001). An empirical investigation of the Turkish
consumers acceptance of internet banking services. International Journal of Bank
Marketing, 19(4), 156-165.
Priluck, R. (2003). Relationship marketing can mitigate product and service
failures. Journal of Services Marketing, 17(1), 37-52.
Qureshi Tahir Masood, Muhammad Khaqan Zafar and Muhammad Bashir Khan
(2008). Customer acceptance of online banking in developing economics. Journal
of Internet Banking and Commerce, 13(1), 5-14.
Radner, R. and Rothschild, M. (1975). On the allocation of effort. Journal of
Economic Theory, 10(1), 358-376.
Rahman, Zillur (2004). Developing customer oriented services: A case study.
Managing Service Quality, 14(5), 426-435.

215
 Rahmath Safeena and Hema Dale Abdullah (2011). Customer perspectives on e-
business value: Case study on internet banking. Journal of Internet Banking and
Commerce, 15(1), 1-13.
Ravichandran K.,K.Bhargavi and S.Arun Kumar (2010). Influence of service
quality on banking customers behavioural intentions. International Journal of
Economics and Finance, 2(4), 18-28.
Razzaque, M. A. and Boon, T. G. (2003). Effects of dependence and trust on
channel satisfaction, commitment and cooperation. Journal of Business-to-
Business Marketing, 10(4), 23-48.
Ribbink, D. Riel, A.C. R. V. Liljander, V and Streukens, S. (2004). Comfort your
online customer: Quality trust and loyalty on the internet. Managing Service
quality, 14(6), 446-644.
Riquelme, Herman E, Khalid A., Mekkaui, Rose E. Rios (2009). Which customer
service and online attributes predict overall satisfaction? Journal of Internet
Banking and Commerce, 14(2), 20-23.
Ritter, D.S. (1993). Relationship Banking, Probus Publishing Company,
Cambridge.
Rogers, E.M. (1983). Diffusion of Innovations. The Free Press, New York.
Rust T. Roland, Christine Moorman and Peter R. Dickson (2002). Getting return
on quality: Revenue expansion, cost reduction or both?. Journal of Marketing, 66
(1), 7-24.
Sang Lin Han and Seung Baek (2004). Antecedents and consequences of service
quality in online banking: An application of the SERVQUAL instrument.
Advances in Consumer Research, 31(1), 208-214.
Santos, J. (2003). E-service quality: A model of virtual service quality
dimensions. Journal of Managing Service Quality, 13(3), 233.244.
Sathey, M. (1999). Adoption of internet banking by Australian consumers: An
empirical investigation. International Journal of Bank Marketing, 17(7), 324-
336.
Schaupp, L.C. and Blanger, F. (2005). A conjoint analysis of on-line consumer
satisfaction. Journal of Electronic Commerce Research, 6(2), 95-111.
Seitz, J. And Stickel, E. (1998). Internet banking-An overview. Journal of
Internet Banking and Commerce, 3(1), 1-15.
Selamat, Z., Jaffar, N. and Boon, H.O. (2009). Technology acceptance in
Malaysian banking industry. European Journal of Economics, Finance and
Administrative Sciences, 17(1), 1450-2887.
Sharma Himani (2011). Bankers perspective on e-banking. National Journal of
Research in Management, 1(1), 71-85.

216
 Shih, H., (2003). Extended technology acceptance model of internet utilization
behaviour. Information and Management, 41(2), 719-729.
Siam Ahmad Zokaria (2006). Role of the electronic banking services on the
profits of Jordanian banks. American Journal of Applied Sciences, 3(9), 1999-
2004.
Sin, L., Tse, A., Yau, O., Chow, R., Lee, J. (2005). Market orientation,
relationship marketing orientation and business performance: The
moderating effects of economic ideology and industry type. Journal of
International Marketing, 13(1), 36-57.
Sin, Y.M.L.,Tse, A.C.B., and Yim, F.H.K.(2005). CRM: Conceptualization and
scale development. European Journal of Marketing, 39(11/12), 1264-1273.
Singh Jaspal and Gagandeep Kour (2011). Customer satisfaction and universal
banks: An empirical study. International Journal of Commerce and Management,
21(4), 327-348.
Singh Sultan and M.S. Komal (2009). Impact of ATM on customer satisfaction in
three major banks, SBI, ICICI and HDFC. Business Intelligence Journal, 2(2),
38-44.
Singh Surabhi and Renu Arora (2011). A comparative study of banking services
and customer satisfaction in public, private and foreign banks. Journal of
Economics, 2(1), 45-56.
Singhal Divya and V. Padhmanabhan (2008). A study on customer perception
towards internet banking: Identifying major contributing factors. The Journal of
Nepalese Business Studies, 5(1)101-111.
Siu Noel Yee-Man and Jeremy Chi-Who Mou (2005). Measuring service quality
in internet banking: The case of Hong Kong. Journal of International Consumer
Marketing, 17(4), 99-116.
Snipes Robin L; Sharon L. Oswald; Michael La Tour and Achilles A. Armenakis
(2005). The effects of specific job satisfaction facets on customer perceptions of
service quality: An employee level analysis. Journal of Business Research,
58(10), 1330-1339.
Soh, C., Man, Q.Y., Gan, F.J., Chew, D., Reid, E. (1997). The use of the internet
for business: The experience of early adoptors in Singapore. Internet Research:
Electronic Networking, Applications and Policy, 7(3), 217-28.
Sohail M. Sadiq and Nassar M. Shaikh (2007). Internet banking and quality of
service: Perspectives from a developing nation in the middle east. Online
Information Review, 32(1), 58-72
Stavins, J. (2001). Effect of consumer characteristics on the use of payment
instruments. New England Economic Review, 3(1), 19-31.

217
 Steiger, J. H. (1990). Structural model- Evaluation and modification. Multivariate
Behavioral Research, 25, 214-221.
Steiger, J. H. (2007). Understanding the limitations of global fit assessment in
structural equation modeling. Personality and Individual Differences, 42(5), 893-
898.
Stewart, D., P.Pavlou and S. Ward (2001). Media influences on marketing
communications. In Media effects: Advances in theory and research, Bryant, J.
And Zillmann, D. (Ed). Erlbaum, hillsdale, N.J.
Stewart, D.W. (1981). The application and misapplication of factor analysis in
marketing research. Journal of Marketing Research, 18(2), 51-62.
Stryker, Sheldom and Richard T. Serpe (1994). Identity silence and
psychological centrality: Equivalent, overlapping or complementary
concepts. Social Psychology Quartely, 57(2), 16-35.
Suh, B., and Han, I. (2003). The impact of customer trust and perception of
security control on the acceptance of electronic commerce. International Journal
of Electronic Commerce, 7(3), 135-161.
Suki Norazah Mohd and Norbayan Mohd Suki (2011). Exploring the relationship
between perceived usefulness, perceived ease of use, perceived enjoyment,
attitude and subscribers intention towards using 3G mobile services. Journal of
Information Technology Management, 22(1), 1-7.
Sulieman (2011). Banking service quality provided by commercial Banks and
customer satisfaction. American Journal of Scientific Research, 27(1), 68-83.
Surjadjaja H, Ghosh S & Antony J (2003). Determining and assessing the
determinants of eservice operations. Managing Service Quality, 13(1), 39-53.
Tabachnick, B. G. & Fidell, L. S. (2007). Using Multivariate Statistics, (5th ed.).
New York: Allyn and Bacon
Tam, K.Y. and Ho, S.Y. (2006). Understanding the impact of web personalization
on user information processing and decision outcomes. MIS Quartely, 30(4), 865-
890.
Tan Margaret and Thompson S.H. Teo (2000). Factors influences the adoption of
internet banking. Journal of the Association for Information systems. 1(5), 1-43.
Tandrayen Ragoobur Verena, Anisha Ayrga and Rishi Doomun (2010). Internet
banking: A customer centric perspective for Mauritius. International research
Symposium in Service Management, 1-19.
Tayler Katherine and Edmund Stanley (2007). The role of trust in financial
services business relationship. Journal of Services Marketing, 21(5), 334-344.

218
 Teo, T.S.H (2001). Demographic and motivational variables associated with
internet usage activities. Internet Research: Electronic Networking Applications
and Policy, 11(2), 125-137.
Tot Huam Hon, Khalil Md Nor, Eng Tzu Wang, Khor Jia Hney, Lim Yik Ming
and Tan Li Yong (2008). Predictors of intention to continue using internet
banking services. International Journal of Business and Information, 3(2), 233-
244.
Tucker, L.R., R.F. Koopman and R.L. Linn (1969). Evaluation of factor analytic
research procedures by means of simulated correlation matrices. Psychometrika,
34(4), 421-459.
Tulani Dube, Chitura Tofara and Runyowa Langton (2009). Extent of adoption
and usage of internet banking by commercial banks in Zimbabwe. Journal of
Internet Banking and Commerce, 14(7), 10-14.
Tull, Donald S. and Del I. Hawkins (1993). Marketing Research- Measurement
and method, New Delhi: Macmillan Publishing Company.
Turban, E., J. Lee, D. King and H.M. Shung (2000). Electronic Commerce, a
managerial perspective. Prentice Hall, London, UK.
Uppal, R.K. (2011). E-Age technology-New face of Indian banking industry:
Emerging challenges and new potentials. Journal of Social and Development
Sciences, 1(3), 115-129.
Urban, G.L., Sultan, F. and Qualls, W.J. (2001). Placing trust at the centre of your
internet strategy. Sloan Management Review, 42(1), 1-39.
Venkatesh, V. And Davis, F.D. (1996). A model of antecedents of perceived ease
of use: Development and test. Decision science, 27(3), 451-481.
Wakefield, R.L. , Stocks, M.H., Wilder, W.M. (2004). The role of website
characteristics in initial trust formation. Journal of Computer Information
Systems, 45(1), 94-103.
Wang Y, Wang Y, Lin H, Tang T (2003). Determinants of user acceptance of
internet banking: An empirical study. International Journal of Service Industrial
Management, 14(5), 501-519.
Wang Yi- Shun, Tzung- I Tang and Jeung- Lai Eddie Tang (2001). An instrument
for measuring customer satisfaction toward websites that market digital products
and services. Journal of Electronic Commerce Research, 2(3), 89-102.
Wang, Y.S., Wang, Y.M., Lin, H.H. and Tang, T.I. (2003). Determinants of user
acceptance of internet banking: An empirical study. International Journal of
Service Industry Management, 14(5), 501-519.
Woherem, E.W. (2000). Information Technology in the Nigerian Banking
Industry. Spectrum, Ibadan.

219
 Wolfinbarger, M.F. and Gilly, M.C. (2002). .comQ: Dimensionalizing, measuring
and predicting quality of the e-tail experience. Working Paper, Marketing science
Insttitute, Cambridge, MA, Report Number 02-100.
Wong David H., Claire Loh, Kenneth B. Yap and Randell Bak (2009). To trust or
not to trust: The consumers dilemma with e-banking. Journal of Internet
Business, 6(1)1-27.
Wong H. David, Nexhmi Rexha and Ian Phau (2008). Re-examining traditional
service quality in an e-banking era. International Journal of Bank Marketing, 26
(7), 526-545.
Wu Hsueh-Ying, Hsing-Yun Chang and Hsing- Hui Lin (2012). The difference
between users and potential users of using online banking. International
Conference on Innovation and Information Management, 36(2), 33-37.
Wu, J., Hsia, T. and Heny, M.S. (2006). Core capabilities for exploiting electronic
banking. Journal of Electronic Commerce Research, 7(2), 111-123.
Xu, X. and Zhao, Z.X. (2000). Strategy and revelation of online banking service
development in western countries. Foreign economy and Management, 22(6), 54-
60.
Yaghoubi Nour Mohammad and Ebrahim Bahmani (2010). Factors affecting the
adoption of online banking: An integration of technology acceptance model and
theory of planned behaviour. Pakistan Journal of Social Sciences, 7(3), 231-236.
Yang Jiaqin, Li Cheng and Xia Luo (2007). A comparative study on e-banking
services between China and USA. International Journal of Electronic Finance,
2(5), 235-252.
Yang Zhilin and Robin T. Peterson (2004). Customer perceived value, satisfaction
and loyalty: The role of switching cost. Psychology and Marketing, 21(10), 799-
822.
Yang Zhilin, Minjoon Jun and Robin T. Peterson (2004). Measuring customer
perceived online service quality-scale development and managerial implications.
International Journal of Operations and Production Management, 24(11), 1149-
1174.
Yang, J., Whitefield, M. and Boehme, K. (2007). New issues and challenges
facing e-banking in rural areas. International Journal of Electronic Finance, 1(3),
336-354.
Yang, Z. and Fang, X. (2004). Online service quality dimensions and their
relationships with satisfaction: A content analysis of customer reviews of
securities brokerage services. International Journal of Service Industry
Management, 15(3), 302-26.
Yang, Z., Peterson, R.T. and Huang, L. (2001). Taking the pulse of internet
pharmacies. Marketing Health Services, Summer, 5-10.

220
 Yap B. Kenneth, David H. Wong, Claire Loh and Radall Bak (2009). Building
trust in e-banking: Where is the line between online and offline banking?,
ANZMAC, 1-9.
Yi, Y.J. and La, S.N. (2004). What influences the relationship between customer
satisfaction and repurchase intentions? Investigating the effect of adjusted
expectations and customer loyalty. Psychology and Marketing, 21(5), 351-373.
Yiu Chi Shing, Kevin Grant and David Edgar (2007). Factors affecting the
adoption of internet banking in Hong Kong-implications for the banking sector,
International Journal of Information Management, 27(1), 336-351.
Yoo Boonghee and Naveen Donthu (2001). Developing a scale to measure the
perceived quality of an internet shopping site (SITEQUAL). Quartely Journal of
Electronic Commerce, 2(1), 31-47.
Yousafzai, S.Y., J.G. Pallister and G.R. Foxall (2005). Strategies for building and
communicating trust in electronic banking: A field experiment. Psychological
Market, 22(1), 181-202.
Yu, C.S. and Lo, Y.F. (2007). Factors encouraging people to adopt online banking
and discouraging adoptors to use online banking services. Proceedings of
Business and Information, Tokyo, Japan. International Conference on Business
and Information.
Zafar Mohsin, Sana Zafar, Aasia Asif, Ahmed Imran Hunjra and Mustaq Ahmad
(2012). Service quality, customer satisfaction and loyalty: An empirical analysis
of banking sector in Pakistan. Information Management and Business Review,
4(4), 159-167.
Zakaria I. Saleh (2011). Improving security of online banking using RFID.
Academy of Banking Studies Journal, 10(2), 1-5.
Zeithaml, V.A., Parasuraman, A. and Malhotra, A. (2002). Service quality
delivery through web sites: A critical review of extant knowledge. Journal of the
Academy of Marketing Science, 30(4), 362-375.
Zeithaml, V.A.; Parasuraman, A. and Malhotra, A. (2000). E-service quality:
definition, dimensions and conceptual model. Working Paper, Marketing Science
Institute, Cambridge, MA.
Zeithaml, Valaria A. (2002). Service quality delivery through web sites: A
critical review of extant knowledge. Journal of the Academy of Marketing
Science, 30(4), 362-75.
Zeng Fue, Zuohao Hu, Rong Chen and Zhilin Yang (2009). Determinants of
online service satisfaction and their impacts on behavioural intentions. Total
Quality Management, 20(9), 953-969.

221
ANNEXURES
 ANNEXURE 1
Impact of Internet Banking on Customer Satisfaction and Business Performance

Questionnaire to be filled by Bank Managers

Dear Sir/Madam
I am Ph D scholar of Department of Commerce, University of Jammu doing research
on topic entitled Impact of Internet Banking on Customer Satisfaction and Business
Performance. Please oblige and help in filling up the questionnaire with fair and frank
responses. I assure that the information supplied will be kept strictly confidential and
used for research purpose only.

A. General Information
1. Gender: M.. F..
2. Age in years: ....
3. Qualification:.....
4. Name of the Bank:.....
5. Name of the Branch:.......
6. Position Held:......
7. Department:.........
8. Length of service:.........

B. Tick the peripheral services that bank provides

1. ATM facility ........
2. Credit card facility .....
3. Debit card facility .......
4. Electronic transfer facility .....................................................
5. Home banking facility ......
6. Tele banking facility ...
7. Internet banking .....................................................
8. 24 Hours banking ....
9. Any where banking .....
10. Travellers cheque facility ...........
11. Foreign exchange ....
12. Facility for payment of household services (eg. Bills etc) ..
13. Depository facilities for stocks/shares .......

Note: Please tick any no. from 5 to 1 on the basis of your experience with your prime
bank. Here 5 means strongly agree, 4 means agree, 3 means neutral, 2 means disagree
1 means strongly disagree, N.K. means not known. Here prime bank means the bank
you served for maximum period.

222
S.NO TRUST 5 4 3 2 1 NK
1. Your bank has strong commitment to 5 4 3 2 1 NK
security measures.
2. Your bank ensures that an information 5 4 3 2 1 NK
transaction is protected during a connection.
3. Your banks web page offers all the relevant 5 4 3 2 1 NK
information about all products and services.
4. Your bank does not allow any third person 5 4 3 2 1 NK
to access to customers personal
information.
5. Your bank keeps promises it makes to 5 4 3 2 1 NK
customers.
6. Your bank provides detailed online terms 5 4 3 2 1 NK
and conditions.
7. Your banks login process is secure. 5 4 3 2 1 NK
8. Your bank works very openly online. 5 4 3 2 1 NK
9. Your bank considers customer welfare when 5 4 3 2 1 NK
making important decisions.
10. Customers have full confidence in your 5 4 3 2 1 NK
banks reliability.
11. Bank practices that harm customers self 5 4 3 2 1 NK
esteem or destroy trust are restricted in your
bank.
12. There are clear explanations of security on 5 4 3 2 1 NK
your banks website.
13. Your bank uses appropriate safeguards 5 4 3 2 1 NK
(privacy protection measures) to ensure
customers of a successful transaction.
14. Your bank site is properly secure for credit 5 4 3 2 1 NK
or debit card information.
15. Customers believe in the online information 5 4 3 2 1 NK
that your bank provides to them.
16. Your bank administrators respond very 5 4 3 2 1 NK
quickly online.
17. Your customers feel confident when using 5 4 3 2 1 NK
e-banking services with your bank.
18. Your bank administrators help the customer 5 4 3 2 1 NK
in any query online.
19 Your bank gives customers a feeling of 5 4 3 2 1 NK
trust.
Commitment
20 Your bank has customers best interest in 5 4 3 2 1 NK
mind.
21. Customers are committed to deal online 5 4 3 2 1 NK
with your bank because of your best online
services.
22. Your banks image determines customers 5 4 3 2 1 NK
commitment online.
23. Customers commitment is influenced by 5 4 3 2 1 NK

223
 the positive attitude of your banks online
administrators.
24. Customers continue to deal online with your 5 4 3 2 1 NK
bank because they feel a strong attachment
to your bank.
25. Customers commitment to your bank is 5 4 3 2 1 NK
determined by their continuous satisfaction.
26. Customers want to remain with your bank 5 4 3 2 1 NK
because they feel a strong sense of
belonging with the bank.
27. Customers are willing to go the extra mile 5 4 3 2 1 NK
to continue with your bank.
28. Customers take pleasure in being a customer 5 4 3 2 1 NK
of your bank.
29. It pays of economically to be a customer of 5 4 3 2 1 NK
your bank.
30. Customers are committed to buy from your 5 4 3 2 1 NK
bank.
31. Commitment is due to reasonable price of 5 4 3 2 1 NK
your bank.
32. Customers are committed to deal online 5 4 3 2 1 NK
with your bank because of your
performance.
33. Customers speak high about your services 5 4 3 2 1 NK
that your bank provides to them.
34. Customer focus and service quality are 5 4 3 2 1 NK
driving forces behind day-to-day operations
of your bank.
35. Customers are committed to your bank 5 4 3 2 1 NK
because of all time availability of services.
36. Your customers are committed because of 5 4 3 2 1 NK
rapid delivery of online services.
37. Your bank provides facility of fund transfer 5 4 3 2 1 NK
to third party easily.
38. Customers are committed because your 5 4 3 2 1 NK
bank allows easy access to transaction data
both recent and historical.
39. Your bank provides customers convenient 5 4 3 2 1 NK
way of interaction with bank administrators
online.
Service Quality
40. Your bank has up to date equipment and 5 4 3 2 1 NK
technology.
41. Your bank provides online services to its 5 4 3 2 1 NK
customers.
42. Your bank services are customised to meet 5 4 3 2 1 NK
the heterogeneous customer needs online.
43. There is a high reliability in the delivery of 5 4 3 2 1 NK
bank services online.

224
44. Your bank gives accurate presentation of 5 4 3 2 1 NK
what its services will do for customers.
45. Online services delivered by your bank are 5 4 3 2 1 NK
free from deficiencies.
46. Your bank takes a problem solving 5 4 3 2 1 NK
approach in delivering online services to its
customers.
47. Your bank charges a reasonable price for 5 4 3 2 1 NK
online services.
48. Your bank administrators respond very 5 4 3 2 1 NK
promptly to any customer service needs
online.
49. Overall, your bank provides best quality 5 4 3 2 1 NK
services to its customers online.
50. Services delivered by your bank are 5 4 3 2 1 NK
standardised.
51. Your banks online services is more 5 4 3 2 1 NK
competent than other banks.
52. Your bank has a better overall online 5 4 3 2 1 NK
performance.
53. Your bank keeps customer informed of any 5 4 3 2 1 NK
new scheme online.
54. It is very easy for your customers to do 5 4 3 2 1 NK
banking transactions online.
55. Your bank tries to help customers to fulfill 5 4 3 2 1 NK
their online banking need.
56. Your bank provides best value for money as 5 4 3 2 1 NK
compared to other banks.
57. Your bank pays special attention on online 5 4 3 2 1 NK
service failures.
58. Customers have full confident in your 5 4 3 2 1 NK
banks reliability.
59. Your bank effectively uses customer 5 4 3 2 1 NK
feedback to improve service standard
online.
Perceived Ease of Use
60. I would find interaction through web pages 5 4 3 2 1 NK
clear and understandable.
61. I would find it easy to become skilful at 5 4 3 2 1 NK
navigating the web pages.
62. My interaction with online banking does not 5 4 3 2 1 NK
require a lot of effort.
63. It was easy to find information about 5 4 3 2 1 NK
various clients online.
64. I think online banking is easy to use. 5 4 3 2 1 NK
65. It is quick to do transactions online. 5 4 3 2 1 NK
Perceived Usefulness
66. Using online banking on my job enables me 5 4 3 2 1 NK
to accomplish tasks more quickly.

225
67. Online banking improves my job 5 4 3 2 1 NK
performance.
68. Online banking would enhance my 5 4 3 2 1 NK
effectiveness on the job.
69. Online banking would make it easier to do 5 4 3 2 1 NK
my job.
70. I would find the world wide web useful. 5 4 3 2 1 NK
71. Web based transaction is advantageous. 5 4 3 2 1 NK
72. Information regarding various deposit 5 4 3 2 1 NK
schemes, loan structure are easily available
by retrieving our banks website.
73. Using online banking would enhance my 5 4 3 2 1 NK
effectiveness in banking career.
Customer Satisfaction
74. Customers are satisfied with online services 5 4 3 2 1 NK
of your bank.
75. Your bank objectives are driven by 5 4 3 2 1 NK
customer satisfaction.
76. Your bank provides incentives to customer 5 4 3 2 1 NK
for continuous dealing online.
77. Your bank has a system of monitoring, 5 4 3 2 1 NK
analyzing and solving customer problems
online.
78. Customer focus and better online service 5 4 3 2 1 NK
quality are driving forces behind day to day
operations of your bank.
79. Customers of your bank believe that their 5 4 3 2 1 NK
online transactions completed timely.
80. Your banks online infrastructure is good. 5 4 3 2 1 NK
81. Your bank administrators understand what 5 4 3 2 1 NK
online service attributes customers value
most.
82. Your banks strategy for online competitive 5 4 3 2 1 NK
advantage is based on its understanding of
online customer needs.
83. Your bank completely meets online 5 4 3 2 1 NK
customer satisfaction.
84. Your bank administrators help customers in 5 4 3 2 1 NK
doing banking transactions online.
85. Administrators of your bank maintain good 5 4 3 2 1 NK
relations with your customers online.
86. Your customers are satisfied with the online 5 4 3 2 1 NK
transaction procedures.
87. Your banks website provides clear 5 4 3 2 1 NK
transaction and price information.
88. Your banks website provides accurate and 5 4 3 2 1 NK
up to date information to its customers.
89. Your banks website provides privacy and 5 4 3 2 1 NK
security to customer transaction.

226
 90. Your banks website deals with customers 5 4 3 2 1 NK
order fast enough.
91. Your customers are satisfied with the online 5 4 3 2 1 NK
payment system of your bank.
92. On the whole, customer satisfaction is the 5 4 3 2 1 NK
motto of your bank.
Profit Emphasis
93. Your banks deposits have been increased 5 4 3 2 1 NK
by using online system.
94. Your banks profits have been increased by 5 4 3 2 1 NK
providing online payment facilities to
customers.
95. Administrators of your bank can quickly 5 4 3 2 1 NK
determine the profitability of major
customers.
96. Administrators of your bank can quickly 5 4 3 2 1 NK
determine the profitability of various
schemes.
97. Administrators of your bank can quickly 5 4 3 2 1 NK
determine the profitability of your branch.
98. Your bank believes that all your services 5 4 3 2 1 NK
must be profitable.
99. Your bank administrators can quickly 5 4 3 2 1 NK
determine the profitability of your bank.
100. On the whole, doing online transaction is 5 4 3 2 1 NK
very profitable.

ANY SUGGESTION
......

THANK YOU FOR YOUR COOPERATION

227
 ANNEXURE 2
Impact of Internet Banking on Customer Satisfaction and
Business Performance

Questionnaire to be filled by Bank Customers

Dear Sir/Madam
I am Ph D scholar of Dept of Commerce, University of Jammu doing research on topic
entitled Impact of Internet Banking on Customer Satisfaction and Business
Performance. Please oblige and help in filling up the questionnaire with fair and frank
responses. I assure that the information supplied will be kept strictly confidential and
used for research purpose only.

A. General Information
1. Gender: M....F.............
2. Age (in years): ..................
3. Qualification: ...................
4. Occupation: .................
5. Marital status: a) Single.....b) Married.............
6. Income in Rupees (per annum): .................
A) up to 50,000 b) 50,000-1,00,000 c) 1,00,000-2,00,000 d)Above 2,00,000
7. Name of the Prime Bank: ...............
8. Length of association with the Prime Bank:..............
9. Name and reason for association with other Banks:
A. ................
B. .................
C. ................
10. Existing Deposit Accounts: ..............
a) Current b)Saving c) Recurring d)F D R e)other
B. Tick the peripheral services that your bank provides:
1. ATM Facility
2. Credit Card Facility
3. Debit Card Facility
4. Electronic Transfer Facility
5. Home Banking Facility
6. Tele Banking Facility
7. Internet Banking
8. 24 Hour Banking
9. Anywhere Banking
10. Travellers cheque Facility
11. Foreign Exchange
12. Facility for payment of household services (eg. Bills etc)
13. Depository facilities for Stocks/Shares

Note: Please tick any no. from 5 to 1 on the basis of your experience with your
prime bank. Here 5 means strongly agree, 4 means agree , 3 means neutral,2 means
disagree, 1 means strongly disagree and NK means not known. Here prime bank
means the bank you have maximum transactions.

228
S.NO. Trust 5 4 3 2 1 NK
1. You feel secure in doing transaction 5 4 3 2 1 NK
online with your bank.
2. You believe the information presented 5 4 3 2 1 NK
on your banks website.
3. You feel confident while using e- 5 4 3 2 1 NK
banking method to access money.
4. The practices that harm customers self 5 4 3 2 1 NK
esteem or destroy trust are not given on
your banks website
5. You trust the site of your bank for not 5 4 3 2 1 NK
using your personal information
inappropriately.
6. Your privacy is protected on your 5 4 3 2 1 NK
banks website.
7. You trust the security of your banks 5 4 3 2 1 NK
website information quality.
8. Your bank website doesnt allow any 5 4 3 2 1 NK
third party to access your personal
information.
9. Your banks website ensures that an 5 4 3 2 1 NK
information transaction is protected
during a connection.
10. Your banks website offers all the 5 4 3 2 1 NK
relevant information about all schemes.
11. Your banks website works in your best 5 4 3 2 1 NK
interest.
12. Your banks website would keep your 5 4 3 2 1 NK
commitments.
13. Your online bank is truly sincere in its 5 4 3 2 1 NK
promises to users.
14. Your online bank is capable and 5 4 3 2 1 NK
proficient in its business.
15. The login process of your online bank is 5 4 3 2 1 NK
secure.
16. Your online bank performs its business 5 4 3 2 1 NK
role very well.
17. It is likely that you will use the e-bank 5 4 3 2 1 NK
in the near future.
18. Using an online bank is financially 5 4 3 2 1 NK
secure.
19. Your banks site is secure for your 5 4 3 2 1 NK
credit card information.
20. Overall you trust your bank while doing 5 4 3 2 1 NK
online services.
Commitment
21. You will not stop using your bank 5 4 3 2 1 NK
website in the future.
22. You will continue to use the services of 5 4 3 2 1 NK

229
 your banks website.
23. You will visit your banks website if 5 4 3 2 1 NK
you need banking services.
24. You feel emotionally attached to your 5 4 3 2 1 NK
online bank.
25. You are committed to your online bank 5 4 3 2 1 NK
because the links are problem free,
accurate and the pages download easily.
26. You are committed because your banks 5 4 3 2 1 NK
website is available in the language you
can understand.
27. You are committed because your online 5 4 3 2 1 NK
bank takes care of problems properly
and compensate for the problems they
create.
Service Quality
28. Administrators of your online bank 5 4 3 2 1 NK
providing online services are never too
busy to respond to your enquiries.
29. Administrators of your online bank are 5 4 3 2 1 NK
always willing to help you
30. Administrators of your online bank are 5 4 3 2 1 NK
always courteous to you.
31. Administrators of your online bank 5 4 3 2 1 NK
inform you promptly for the completion
of transactions.
32. Your online bank gives you individual 5 4 3 2 1 NK
attention in doing transaction online.
33. You have full confidence in dealing 5 4 3 2 1 NK
with your bank online.
34. Administrators of your online bank have 5 4 3 2 1 NK
all knowledge to answer your queries
online.
35. Administrators of your online bank 5 4 3 2 1 NK
show confidence in customers while
dealing online.
36. Call centres of your online bank have 5 4 3 2 1 NK
operating hours convenient to its
customers.
37. Call centres or help desks of your online 5 4 3 2 1 NK
bank give you personal attention in
doing transaction online.
38. Administrators or call centres of your 5 4 3 2 1 NK
online bank understand your specific
needs.
39. Administrators or call centres of your 5 4 3 2 1 NK
online bank have best interest of
customers in mind.
40. Your online bank has up to date 5 4 3 2 1 NK

230
 equipment and technology.
41. The website of your online bank is 5 4 3 2 1 NK
appealing.
42. You find information easily on your 5 4 3 2 1 NK
banks website.
43. The website of your online bank 5 4 3 2 1 NK
provides you with valuable information.
44. The advertised messages on your banks 5 4 3 2 1 NK
website are attractive.
45. The website of your online bank is easy 5 4 3 2 1 NK
to use and navigate.
46. Your online bank performs the online 5 4 3 2 1 NK
services very quickly.
47. Online services delivered by your bank 5 4 3 2 1 NK
are standardised.
48. Prompt response is given for all 5 4 3 2 1 NK
enquiries online.
49. Your bank takes a problem solving 5 4 3 2 1 NK
approach in delivering online services.
50. Online services delivered by your bank 5 4 3 2 1 NK
are free from deficiencies.
51. Information about new deposit schemes 5 4 3 2 1 NK
are provided by your bank online.
52. Your online bank performs the service 5 4 3 2 1 NK
right first time.
Perceived Ease of Use
53. It was very simple to do banking on 5 4 3 2 1 NK
computer system.
54. It was easy to find information you 5 4 3 2 1 NK
needed regarding your banking
transactions.
55. The information presented on your 5 4 3 2 1 NK
online banks website is clear and
understandable.
56. The website of your online bank can be 5 4 3 2 1 NK
easily navigated.
57. The website of your online bank looks 5 4 3 2 1 NK
professionally designed.
58. The user menus are clearly categorised 5 4 3 2 1 NK
and are well laid out in the screen.
59. Your online bank is error free. 5 4 3 2 1 NK
60. The demonstrations or guidelines 5 4 3 2 1 NK
provided by your online bank can help
you how to do banking online.
61. You find an online bank to be flexible to 5 4 3 2 1 NK
interact with.
62. Overall, online banking is easy to use. 5 4 3 2 1 NK
Perceived Usefulness
63. Online banking enhances your 5 4 3 2 1 NK

231
 effectiveness in doing banking
transactions.
64. Online banking enhances your 5 4 3 2 1 NK
effectiveness in information seeking
regarding various schemes.
65. You find doing online banking useful. 5 4 3 2 1 NK
66. Online banking saves your time. 5 4 3 2 1 NK
67. It is quick to make transactions on your 5 4 3 2 1 NK
banks website.
68. The site of your bank does not make you 5 4 3 2 1 NK
lose your time interactivity.
69. Using the world wide web would enable 5 4 3 2 1 NK
you to accomplish banking transactions
more quickly than going to bank
branches.
70. Online bank increases your productivity. 5 4 3 2 1 NK
71. Using an online bank makes it easier for 5 4 3 2 1 NK
me to utilise banking services.
72. Online banking is advantageous for me. 5 4 3 2 1 NK
73. Overall, an online bank is useful for me 5 4 3 2 1 NK
to utilise banking services.
Behavioural Intention
74. You use the online banking for your 5 4 3 2 1 NK
banking needs.
75. You intend to continue doing online 5 4 3 2 1 NK
banking with your bank.
76. You will strongly recommend others to 5 4 3 2 1 NK
use online banking.
77. You would see yourself using the online 5 4 3 2 1 NK
banking for handling your banking
transactions.
78. Using the internet banking for handling
your banking transactions is something
you would do.
79. Your favourable intention would be to 5 4 3 2 1 NK
use online banking rather than
traditional banking for your banking
transactions.
Customer Satisfaction
80. You are completely happy with your 5 4 3 2 1 NK
bank providing online services.
81. You are very pleased with your bank 5 4 3 2 1 NK
providing online services.
82. Your experience with the online bank 5 4 3 2 1 NK
has always been good.
83. You use online banking for checking 5 4 3 2 1 NK
balances and doing other banking
transactions.
84. You are satisfied with the customer 5 4 3 2 1 NK

232
 support provided on your banks
website.
85. You are satisfied with the after sales 5 4 3 2 1 NK
service provided on your banks
website.
86. You are satisfied with the various 5 4 3 2 1 NK
deposit schemes and loan procedures
provided on your banks website.
87. Your banks website is easy to use. 5 4 3 2 1 NK
88. The various deposit schemes provided 5 4 3 2 1 NK
on your banks website meet your
specific needs.
89. You are satisfied with the payment 5 4 3 2 1 NK
system provided on the banks website.
90. You are satisfied with the transaction 5 4 3 2 1 NK
procedures.
91. Your banks website provides 5 4 3 2 1 NK
information that exactly meets your
needs.
92. Your banks website provides 5 4 3 2 1 NK
information that you trust.
93. Your banks website is user friendly. 5 4 3 2 1 NK
94. Your banks output format is easy to 5 4 3 2 1 NK
read.
95. Your banks website provides clear 5 4 3 2 1 NK
transaction and price information.
96. Your banks website provides 5 4 3 2 1 NK
innovative deposit schemes.
97. Your banks website allows easy 5 4 3 2 1 NK
transfer of money.
98. Your banks website provides customer 5 4 3 2 1 NK
oriented services.
99. You are very satisfied with your bank 5 4 3 2 1 NK
providing online services.

ANY SUGGESTION
......

THANK YOU FOR YOUR COOPERATION

233