CHAPTER 1

INTRODUCTION

1
1.1 INTRODUCTION

Online banking also known as internet banking or e-banking. It is an electronic

payment system which helps the customer of a bank to conduct banking activities
through internet as a media. It simply means banking activities are done through
internet as a media. In order to access internet banking facility, the customer must
have an internet facility and need to register with the bank to access the facility of
online banking. The online banking services include obtaining account balances,
electronic bill payments, fund transfer, online bookings, online shopping etc. It
provides facility to customer to conduct the transaction without directly interacting
with the banks from one corner of the country to the another.

There are many advantages to the online banking. Its advantages include speed,
accuracy, no boundary, lower transaction cost, time saving, ease to use, quick fund
transfer, and access from anywhere using mobiles or computers.

The security of a customer’s account information is essential in case of banking.

For this the banks adopt various security measures. The security measures to
overcome the risk of unauthorized access from outside include the use of Hyper
Text Transfer Protocol Secure (HTTPS) for the secured communication over a
computer network. It is mostly used on the internet. The use of secure website is
universally embraced. Other security measures include PIN/TAN, One Time
Password (OTP), Signature based online banking. Usually online banking with
PIN/TAN is done via a web browser using SSL secured connections.

In India, private banks were the first to implement online banking services in the
banking industry. It is clear that online banking is the only way to stay connected
to customers at any place at any time. At present online banking is an inevitable
part of the banking industry. The banks took internet banking as a competitive
weapon. As far as the technology improves, the online banking also improves a lot.
Now it became a popular one. The banks provide a convenient access of banking
services through internet as a media.

2
1.2 STATEMENT OF THE PROBLEM

At present most of the banks in India provide online banking facility to their
customers. The study is based on the attitude and preference of youth towards
online banking.

The study is an effort to find out the attitude and preference of customers
especially youth towards the facilities and services offered by the banks through
online banking. The study also measures the perception and satisfaction level of
customers towards online banking.

1.3 OBJECTIVES OF THE STUDY

 To study the factors induced to select online banking.

 To study the awareness level of youth towards online banking.
 To study the problems faced by youth while using online banking.

1.4 HYPOTHESIS

 Ho: The perception customers towards satisfaction level of online services

are identical in terms of gender.
 Ho: The technical errors faced by customers are identical in terms of area
of living.
 Ho: There is no significant difference between marital status and problems
faced by customers.

1.5 SIGNIFICANCE OF THE STUDY

The financial institutions in India include a number of banks and other institutions.
Among this the banks plays a vital role in the development of country in urban and
semi urban areas. They provide large number of services to its customers. The
adoption of online banking in the banking industry helps to increase the acceptance
of banking services among customers. The implementation of online banking
services helps to create more customers for the banks. So a study about online

3
banking is very important. The study also measures the attitude and preference of
youth towards online banking.

1.6 SCOPE OF THE STUDY

Currently, there has been a consensus among both academics and practitioners on
the importance of the internet banking system in any country. Internet banking is
the main driver of economic growth and development. It is the one of the most
important component of the banking system. Internet banking has been used as a
channel to distribute banking products and services.

1.7 METHODOLOGY OF THE STUDY

The present study is conducted by using the following methodologies.

1.7.1 SECONDARY DATA

This study made use of the secondary data from the various sources which include
Books, Journals, Magazines and various websites etc.

1.7.2 PRIMARY DATA

The study is mainly based on primary data. The required primary data are collected
through questionnaire and direct interviews. Questionnaires are circulated among
online banking customers in M.E.S KALLADI COLLEGE and youths in
KUMARAMPUTHUR PANCHAYATH. The primary data is collected from 60
customers through the use of structured questionnaire.

1.7.3 SAMPLE DESIGN WITH AREA OF STUDY

This study is carryout as descriptive one. The study was conducted in M.E.S
KALLADI COLLEGE and KUMARAMPUTHUR PANCHAYATH, out of which
60 youths are taken as sample.

4
1.7.4 SAMPLING METHOD

Since it is difficult to contact entire population, sampling technique was used. The
sampling technique used was random sampling.

1.7.5 TOOLS FOR DATA COLLECTION AND PRESENTATION

 Tools for data collection.

Questionnaire

 Tools used for data analysis

Weighted average

Chi-square

 Tools for data presentation.

Tables

Charts

Diagrams

1.7.6 PERIOD OF STUDY

The study was conducted during the period of 21 days. Staring from 22 December
2017 and ending on 11 January 2018.

1.8 LIMITATIONS

 The study is based sampling technique, so sampling errors are bound to

occur.

 This study is limited only in small area, which may fails to provide
accurate picture of the study.

 The researcher may face difficulties due to lack of co-operation from

respondent.

 The reliability of secondary data is also questionable.

5
 CHAPTER 2
REVIEW OF LITERATURE

6
2.1 REVIEW OF LITERATURE

1-RAJESH KUMARSRIVASTAVA (2004)1 conducted a research on “Customer

perception on usage of internet banking”. The objective is to make a deep study about
the customer responses on technological changes, the findings shows that the customers
are satisfied with the usage of online banking. For the study he used Quantitative research
methodology at first phase. Pilot testing a questionnaire to get in-depth responses on
technological changes

2-IRENE GOVENNDER., WALTER SIHLALI (2004)2conducted “A Study on mobile

banking adoption among university students using an extended TAM”. It mainly to
investigate the factors that influence the adoption of mobile banking (M-banking) services
by students. They found that E-banking makes a positive influence to adopt the M-banking
rather than traditional banking. The research used methodology like checking internal data
consisting is co-efficient alpha, which appropriate for the instrument such as the point of
Likert scale.

3-SHARMAN LICHTENSTEIN., KIRSTY WILLIAMSON (2006)3conducted “A

Study on understanding customer adoption of internet banking: An interpreting
study in the Australian banking context” with an objective to identify the online
services provided by banks and perception among customers. They found the choice of
banking method, key factors. For adoption of online banking among Australian customers
by using the methodology like theoretical sampling and demographic.

4-DIVYA SINGAL., P.PADMANABHAN (2006)4conducted a study namely

“Customer perception towards internet banking: identifying major contributing
factors” the main objective is fixed to identify the main factors which are responsible for
select online bank application. The findings show that utility request, security, utility
transaction ticket booking and fund transfer are the major factors that induced to select
online banking. For the purpose they collected secondary data from published sources and
primary data from structured survey.

5-AKTAN.B., TEKER.E., EROSY.P (2009) 5identify the “usage of internet banking in

Turkey” to make basic due diligence investigation for the financial institution, including
banking stock trading insurance and provisions of financial information. They object to
find out the usage of internet banking. The findings show that the internet usage of Turkey

7
has grown dramatically in financial services in terms of customer and financial transaction
of various natures.

6-C.S RAMANI GOPAL., G. PALANIPPARA., N.HEMALATHA (2011)6conducted a

study on “customer perception towards internet banking services with special
reference to Erode District, the main objective is to analyze the awareness of customer
towards the banking facilities. She found that 52% of respondent belongs to the 25-35
years, 61% of respondents belongs the male category, 65% unmarried people are highly
satisfied. She collects primary data from government or private employees, professionals
and business man through structured questionnaire.

7-ANDREW MUSLIME., MALLINGA RAMANADHAN (2011) 7conducted a study

named “Internet banking, customer adoption and customer satisfaction” conducted in
Uganda, with an objective of conduct a study to determine the factors influencing to adopt
the internet banking and customer satisfaction. He founds that the customer is satisfied
with the online banking and the methodology used for research to focus on the population
of bank X using internet banking services in Kampala city.

8-MALLIKA RANI (2012)8conducted a research on “Study on the customer

perception towards E-banking in Ferozpur District” with an objective of studying the
perception of respondents towards E-banking. The study reveals that above 60% of
customers have positive perceptions about E-banking. For conduct it, she uses
methodologies like questionnaire designed and distributed among respondents in Ferozpur
District

8
 CHAPTER 3

THEORATICAL FRAMEWORK OF THE STUDY

9
3.1 Customer

In sales, commerce and economics, a customer (sometimes known as a client,

buyer, or purchaser) is the recipient of a good, service, product or an idea -
obtained from a seller, vendor, or supplier via a financial transaction or exchange
for money or some other valuable consideration. An ultimate etymology of "client"
may imply someone merely inclined to do business, whereas a purchaser procures
goods or services on occasion but a customer customarily or habitually engages in
transactions (historically: the collection of tolls or taxes - see the Wiktionary
etymology of customer). Such distinctions have no contemporary semantic weight.

3.2 Customer segmentation

In the 21st century customers are generally categorized into two types:

 An entrepreneur or trader (sometimes a commercial Intermediary) - a

dealer who purchases goods for re-sale.
 An end user or ultimate customer who does not re-sell the things bought
but is the actual consumer or an agent such as a Purchasing officer for the
consumer.

A customer may or may not also be a consumer, but the two notions are distinct,
even though the terms are commonly confused. A customer purchases goods; a
consumer uses them. An ultimate customer may be a consumer as well, but just as
equally may have purchased items for someone else to consume. An intermediate
customer is not a consumer at all. The situation is somewhat complicated in that
ultimate customers of so-called industrial goods and services (who are entities such
as government bodies, manufacturers, and educational and medical institutions)
either themselves use up the goods and services that they buy, or incorporate them
into other finished products, and so are technically consumers, too. However, they
are rarely called that, but are rather called industrial customers or business-to-
business customers. Similarly, customers who buy services rather than goods are
rarely called consumers.

10
Six Sigma doctrine places (active) customers in opposition to two other classes of
people: not-customers and non-customers:

 Customers of a given business have actively dealt with that business within
a particular recent period that depends on the product sold
 Not-customers are either past customers who are no longer customers or
potential customers who choose to interact with the competition.
 Non-customers are people who are active in a different market segment
entirely.

Geoff Tennant, a Six Sigma consultant from the United Kingdom, uses the
following analogy to explain the difference: A supermarket's customer is the
person buying milk at that supermarket; a not-customer buys milk from a
competing supermarket, whereas a non-customer doesn't buy milk from
supermarkets at all but rather "has milk delivered to the door in the traditional
British way".

Tennant also categorizes customers in another way that is employed out with the
fields of marketing. While marketers, market regulation, and economists use the
intermediate/ultimate categorization, the field of customer service more often
(quantify) categorizes customers into two classes:

1. An external customer of an organization is a customer who is not directly

connected to that organization.
2. An internal customer is a customer who is directly connected to an
organization, and is usually (but not necessarily) internal to the
organization. Internal customers are usually stakeholders, employees, or
shareholders, but the definition also encompasses creditors and external
regulators.

Before the introduction of the notion of an internal customer, external customers

were, simply, customers. Quality-management writer Joseph M. Juran popularized
the concept, introducing it in 1988 in the fourth edition of his Quality Control
Handbook (Juran 1988). The idea has since gained wide acceptance in the

11
literature on total quality management and service marketing; and many
organizations as of 2016 recognize the customer satisfaction of internal customers
as a precursor to, and a prerequisite for, external customer satisfaction, with
authors such as Tansuhaj, Randall & McCullough 1991 regarding service
organizations which design products for internal customer satisfaction as better
able to satisfy the needs of external customers. Research on the theory and practice
of managing the internal customer continues as of 2016 in a variety of service-
sector industries.

3.3 ONLINE BANKING

Online banking, also known as internet banking, e-banking or virtual banking, is

an electronic payment system that enables customers of a bank or other financial
institution to conduct a range of financial transactions through the financial
institution's website. The online banking system will typically connect to or be part
of the core banking system operated by a bank and is in contrast to branch banking
which was the traditional way customers accessed banking services.

To access a financial institution's online banking facility, a customer with internet

access would need to register with the institution for the service, and set up a
password and other credentials for customer verification. The credentials for online
banking are normally not the same as for telephone or mobile banking. Financial
institutions now routinely allocate customers numbers, whether or not customers
have indicated an intention to access their online banking facility. Customer
numbers are normally not the same as account numbers, because a number of
customer accounts can be linked to the one customer number. Technically, the
customer number can be linked to any account with the financial institution that
the customer controls, though the financial institution may limit the range of
accounts that may be accessed to, say, cheque, savings, loan, credit card and
similar accounts.

The customer visits the financial institution's secure website, and enters the online
banking facility using the customer number and credentials previously set up. The

12
types of financial transactions which a customer may transact through online
banking are determined by the financial institution, but usually includes obtaining
account balances, a list of the recent transactions, electronic bill payments and
funds transfers between a customer's or another's accounts. Most banks also enable
a customer to download copies of bank statements, which can be printed at the
customer's premises (some banks charge a fee for mailing hard copies of bank
statements). Some banks also enable customers to download transactions directly
into the customer's accounting software. The facility may also enable the customer
to order a cheque book, statements, report loss of credit cards, stop payment on a
cheque, advice change of address and other routine actions.

Today, many banks are internet-only institutions. These "virtual banks" have lower
overhead costs than their brick-and-mortar counterparts. In the United States,
many online banks are insured by the Federal Deposit Insurance Corporation
(FDIC) and can offer the same level of protection for the customers' funds as
traditional banks.

Online banks are insured by the Federal Deposit Insurance Corporation (FDIC)
and can offer the same level of protection for the customers' funds as traditional
banks.

Advantages

There are some advantages on using e-banking both for banks and customers:

• Permanent access to the bank

• Lower transaction costs / general cost reductions
• Access anywhere
• Less time consuming
• Very safe and secure method
• Helps to transfer the money immediately and accurately
• Security of account

13
3.3.1 First online banking services in the United States
Online banking was first introduced in the early 1980s in New York, United States.
Four major banks-Citibank, Chase Manhattan, Chemical Bank and Manufacturers
Hanover— offered home banking services. Chemical introduced its Pronto
services for individuals and small businesses in 1983, which enabled individual
and small-business clients to maintain electronic checkbook registers, see account
balances, and transfer funds between checking and savings accounts. Pronto failed
to attract enough customers to break even and was abandoned in 1989. Other
banks had a similar experience.

3.4 RECENT TRENDS IN ONLINE BANKING:

3.4.1 AUTOMATED TELLER MACHINE (ATM):

An Automated Teller Machine (ATM), is also known as Automated Banking

Machine (ABM) or Cash Machine. ATM supports for financial transactions of
users from financial institution in a public space without the need for a bank
cashier, clerk or any bank employee. ATM consist of plastic ATM card having
magnetic strip which contains detail users information, card number, some security
information. Authentication is provided by the entering of customer’s personal
identification number (PIN).Customers can access, their bank accounts by using an
ATM, in order to make cash withdrawals, credit card cash advances, to check their
account balances as well as purchase prepaid cell phone credit. If the currency
being withdrawal from the ATM is different from that, which the bank account is
denominated in the money will be converted at a wholesale exchange rate. Thus,
ATMs often provide the best possible exchange rate for foreign travellers and are
heavily used for this purpose as well.
ATMs Alternative uses:
ATMs were originally developed as just cash dispensers. ATMs have been evolved
to include many other bank-related functions. In some countries, especially those
which benefit from a fully integrated cross-bank ATM network (e.g.: Multibanco
in Portugal), ATMs include many functions which are not directly related to the
management of one's own bank account, such as:
14
  Deposit currency recognition, acceptance, and recycling.
 Paying routine bills, fees, and taxes (utilities, phone bills, social security,
legal fees, taxes, etc.).
 Printing bank statements .
 Updating passbooks.
 Loading monetary value into stored value cards.
 Purchasing products.
 Postage stamps.
 Lottery tickets
 Train tickets
 Movie tickets
 Shopping mall gift certificates
 Games and promotional features
 Donating to charities
 Cheque Processing Module
 Adding pre-paid cell phones / mobile phone credit.
 Paying (in full or partially) the credit balance on a card linked to a specific
current account.

3.4.2 REAL TIME GROSS SETTLEMENT (RTGS):

RTGS is an electronic payment system. This "electronic" payment system is
normally maintained or controlled by the central bank of a country. There is no
physical exchange of money; the central bank makes adjustments in the electronic
accounts of bank A and bank B, reducing the amount in bank A's account and
increasing the amount of bank B's account by the same. Real Time Gross
Settlement (RTGS) is funds transfer systems where transfer of money or securities
takes place from one bank to another on a "real time" and on "gross" basis.
Settlement in "real time" means payment transaction is not subjected to any
waiting period. The transactions are settled as soon as they are processed. "Gross
settlement" means the transaction is settled on one to one basis without bunching

15
or netting with any other transaction. Once processed, payments are final and
irrevocable.
RTGS payments are irrevocable once processed. The RTGS system is suited for
low volume, high-value transactions. It lowers settlement risk, besides giving an
accurate picture of an institution's account at any point of time. Such systems are
an alternative to systems of settling transactions at the end of the day, also known
as the Net Settlement. In this system ,all the inter-institution transactions during
the day are accumulated. At the end of the day, the accounts of the institutions are
adjusted. The implementation of RTGS systems by Central Banks throughout the
world is driven by the goal to minimize risk in high-value electronic payment
settlement systems.
Any RTGS employs two sets of queues: one for testing outgoing funds availability
on a chronological FIFO basis with the option of prioritizing specific inquiries,
while the other queue is for processing debit/credit requests received from the
central bank's integrated accounting system. In an RTGS system, transactions are
settled across accounts held at a central bank on a continuous gross basis.
Settlement is immediate, final and irrevocable.
Credit risks due to settlement lags are eliminated. RTGS does not require core
banking to be implemented across participating banks, since transactions are
direct, with no central processing or clearing operations.

3.4.3 ELECTRONIC FUND TRANSFER (EFT):

The electronic exchange or transfer of money from one account to another i.e.
either within a single financial institution or across multiple institutions, through
computer based system is known as Electronic Fund Transfer (EFT). The term is
used for a number of different concepts:

 Cardholder-initiated transactions, where a cardholder makes use of a

payment card.
 Direct deposit payroll payments for a business to its employees, possibly
through a payroll service bureau.

16
  Direct debit payments, sometimes called electronic checks, for which a
business debits the consumer’s bank account for payment of goods and
services.
 Electronic bill payment is online banking, which may be delivered by EFT
or paper cheque.
 Transactions involving stored value of electronic money, possibly in a
private currency.
 Wire transfer via an international banking network (generally carries a
higher fee).

3.4.4 NATIONAL ELECTRONIC FUND TRANSFER (NEFT):

NEFT is a national wide payment scheme. Under this scheme, individuals can
electronically transfer funds from any bank branch to any individual having an
account with any other bank branch in the country participating in the scheme.
NEFT transactions are settled in batches. The NEFT system came into effect from
21 November 2005.NEFT was set to cover all banks which were participating in
the special electronic fund transfer (SEFT) clearing. NEFT was made on the
structured financial messaging solution(SFMS) platform and is public key infra
structure (PKI) enabled. RBI made it mandatory to migrate all the SEFT banks to
NEFT by 15 December 2005.

RTGS and NEFT:

RTGS is on gross settlement basis, while NEFT is on net settlement basis this is
the key difference between RTGS and NEFT. Besides, RTGS facilitates real-time
transfer, while NEFT involves eleven settlements from 9 am to 7 pm on weekdays
and five settlements from 9 am to 1 pm on Saturdays. Thus if a customer has given
instruction to its bank to transfer money through NEFT to another bank in the
morning hours, money would be transferred the same day, but if the instruction is
given later during the day, money would be transferred next day.
However, RTGS facility is available in over 72,000 branches, while NEFT is
available in little over 70,000 branches of 106 banks ( in December 2010). Besides
while all commercial banks have put in place the RTGS facility, only 43 banks

17
have purchased the software required to facilitate NEFT based transaction. RBI
has instructed banks that all branches which are RTGS enabled should also provide
NEFT by December 2006. The minimum transaction value for RTGS is Rs.200000
whereas there is no minimum value for NEFT

3.4.5 AUTOMATED CLEARING HOUSE (ACH):

Automated Clearing House (ACH) payments are used both by government and
commercial banks. Businesses are also increasingly by using ACH to collect and
transfer cash from customer’s online, rather than accepting credit or debit cards.
Thus ACH is an electronic network for financial transactions. ACH processes large
volumes of credit and debit transactions in batches. ACH credit transfers include
direct deposit payroll and vendor payments. ACH direct debit transfers include
consumer payments on insurance premiums, mortgage loans and other kinds of
bills.
For governing the ACH network, NACHA (National Automated clearing house
Association) and the Federal Reserve Bank establish rules and regulations.

3.4.6 ELECTRONIC CLEARING SERVICES (ECS):

ECS is a mode of electronic funds transfer from one bank account to another bank
account using the services of a Clearing House. This is normally for bulk transfers
from one account to many accounts or vice-versa. This can be used both purposes.
First one is, for making payments like distribution of dividend, interest, salary,
pension, etc. Second one is, by institutions or for collection of amounts for
purposes such as payments to utility companies like telephone, electricity, or
charges such as house tax, water tax, etc. or for loan instalments of financial
institutions/banks or regular investments of persons.
Types of ECS
There are two types of ECS called ECS (Credit) and ECS (Debit).
ECS (Credit) is used for affording credit to a large number of beneficiaries by
raising a single debit to an account, such as dividend, interest or salary payment.

18
ECS (Debit) is used for raising debits to a number of accounts of consumers/
account holders for crediting a particular institution
3.4.7 MOBILE BANKING

Mobile banking is used for using various banking services like- balance checks,
account transactions, payments, credit applications etc. via a mobile device such as
a mobile phones. The earliest mobile banking services were offered via SMS. In
1999 first European banks started to offer mobile banking on this platform to their
customers. Wireless Application Protocol(WAP) support enabling the use of the
mobile banking services. Provision and availment of banking and financial
services are referred by mobile banking; with the help of mobile
telecommunication devices. The scope of offered services may include facilities to
conduct bank and stock market transactions, to administer accounts and to access
customized information.
Mobile Banking can be said to consist of three inter-related concepts:
 Mobile Accounting.
 Mobile Brokerage.
 Mobile Financial Information Services.
Most services are transaction-based, in the categories designated accounting and
brokerage. The non-transaction-based services of an informational nature are
however essential for conducting transactions - for instance, balance inquiries
might be needed before committing a money remittance. The accounting and
brokerage services are therefore offered in variably in combination with
information services. Information services, on the other hand, may be offered as an
independent module.
Mobile Banking Services:
Mobile banking can offer services such as the following:
 Account Information.
 Mini-statements and checking of account history.
 Alerts on account activity.
 Monitoring of term deposits.
 Access to loan statements.

19
  Access to card statements.
 Mutual funds/ equity statements.
 Insurance policy management.
 Pension plan management.
 Status on cheque, stop payment on cheque.
 Ordering cheque books.
 Balance checking in the account.
 Recent transactions.
 Due date of payment (functionality for stop, change and deleting of
payments).
 PIN provision, Change of PIN and reminder over the Internet.
 Blocking of (lost, stolen) cards. Additional Mobile services - Payments,
Deposits, Withdrawals and Transfers:
 Domestic and international fund transfers.
 Micro-payment handling.
 Mobile recharging.
 Commercial payment processing.
 Bill payment processing.
 Peer to Peer payments.
 Withdrawal at banking agent.
 Deposit at banking agent.
A specific sequence of SMS messages will enable the system to verify if the client
has sufficient funds in his or her wallet and authorize a deposit or withdrawal
transaction at the agent. When depositing money, the merchant receives cash and
the system credits the client's bank account or mobile wallet. In the same way, the
client can also withdraw money at the merchant: through exchanging SMS to
provide authorization, the merchant hands the client cash and debits the merchant's
account.

20
3.5 SECURITY IN ONLINE BANKING

Security of a customer's financial information is very important, without which

online banking could not operate. Similarly the reputational risks to the banks
themselves are important. Financial institutions have set up various security
processes to reduce the risk of unauthorized online access to a customer's records,
but there is no consistency to the various approaches adopted.

The use of a secure website has been almost universally embraced.

Though single password authentication is still in use, it by itself is not considered

secure enough for online banking in some countries. Basically there are two
different security methods in use for online banking:

 The PIN/TAN system where the PIN represents a password, used for the
login and TANs representing one-time passwords to authenticate
transactions. TANs can be distributed in different ways, the most popular
one is to send a list of TANs to the online banking user by postal letter.
Another way of using TANs is to generate them by need using a security
token. These token generated TANs depend on the time and a unique
secret, stored in the security token (two-factor authentication or 2FA).
More advanced TAN generators (chip TAN) also include the transaction
data into the TAN generation process after displaying it on their own
screen to allow the user to discover man-in-the-middle attacks carried out
by Trojans trying to secretly manipulate the transaction data in the
background of the PC. Another way to provide TANs to an online banking
user is to send the TAN of the current bank transaction to the user's (GSM)
mobile phone via SMS. The SMS text usually quotes the transaction
amount and details; the TAN is only valid for a short period of time.
Especially in Germany, Austria and the Netherlands many banks have
adopted this" SMS TAN" service. Usually online banking with PIN/TAN is
done via a web browser using SSL secured connections, so that there is no
additional encryption needed.

21
  Signature based online banking where all transactions are signed and
encrypted digitally. The Keys for the signature generation and encryption
can be stored on smartcards or any memory medium, depending on the
concrete implementation.

3.5.1 Attacks

Attacks on online banking used today are based on deceiving the user to steal login
data and valid TANs. Two well-known examples for those attacks are phishing and
pharming. Cross and key logger/Trojan horses can also be used to steal login
information.

A method to attack signature based online banking methods is to manipulate the

used software in a way, that correct transactions are shown on the screen and faked
transactions are signed in the background.

Another kind of attack is the so-called man-in-the-browser attack, a variation of

the man-in-the-middle attack where a Trojan horse permits a remote attacker to
secretly modify the destination account number and also the amount in the web
browser.

As a reaction to advanced security processes allowing the user to cross-check the

transaction data on a secure device there are also combined attacks using malware
and social engineering to persuade the user himself to transfer money to the
fraudsters on the ground of false claims (like the claim the bank would require a
"test transfer" or the claim a company had falsely transferred money to the user's
account and he should "send it back"). Users should therefore never perform bank
transfers they have not initiated themselves.

22
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

23
Data analysis and interpretation of attitude and preference of
online banking among youth

This chapter deals with analysis and interpretation of data collected with the help
of questionnaire. The present study intended to analysis a study on the attitude and
preference of online banking among youth in M E S Kalladi College. The data is
analysed and presented in the form of table with necessary interpretation
alongside. Various types of statistical methods are used for analysis of data. This
analysis is supplemented by explanation, tables, and diagrams.
For conducting this study 60 customers were selected as random on the basis of
convenient sampling technique. The opinion of customers are collected through
structured questionnaire.
The analysis part is divided in to two
 Analysis based on classificatory variable
 Analysis based on study variable

4.1 Socio economic factors

In the socio-economic factors of individual include age, sex, and marital status,
area of living and educational qualification. The following tables and charts shows
the socio-economic factors of respondents.
Socio-economic profile of respondents

Socio economic profile of respondents is the study of social and economic factors
of the customers who are engaged in online banking

24
 TABLE4.1
SOCIO ECONOMIC STATUS
STATUS NUMBER OF PERCENTAGE
RESPONDANT
MALE 43 71.67
SEX FEMALE 17 28.33
TOTAL 60 100
MARRIED 28 46.67
MARITAL UNMARRIED 32 53.33
STATUS TOTAL 60 100
20-23 29 48.33
24-27 10 16.67
AGE 28-31 15 25
32-35 6 10
TOTAL 60 100
Area Of Rural 37 61.67
Living URBAN 23 38.33
TOTAL 60 100
LESS THAN 16 26.67
10000
MONTHLY 10000-20000 15 25
INCOME 20000-30000 8 13.33
30000-50000 11 18.33
ABOVE 50000 10 16.67
TOTAL 60 100
SSLC 11 18.33
PLUS TWO 14 23.33
UG 23 38.33
EDUCATIO PG 7 11.67
N Proffesional 5 8.33
course
TOTAL 60 100

25
INTERPRETATION:
The above table shows the socio-economic factors of respondents. It reveals that
71.67% of respondents are Male and the remaining 28.33% of respondents are
female. Among the 60 respondents 28persons (75%) are married and 32 persons
(25%) were unmarried. When we study about the age group of respondents
48.33% belong to the age group of 20-23,16.67% on 24-27,25% on 28-31 and 10%
on 32-35 age group respectively. When we study the educational qualification of
respondents 18.33% of them were sslc,23.33% were plus two,38.33% were under
graduate,11.67% were post graduates and rest of 8.33% respondents were belongs
to professional course. When we studied their area of living, most of the part
contributing from Rural area that is 61.67% and rest of them from urban area
(38.33).

26
 Table 4.2
Banks Accessed By customers
BANK NAME NO. OF PERCENTAGE
RESPONDENTS
SBI 15 25
CANARA 11 18.33
SIB 10 16.67
FEDERAL 19 31.67
HDFC 3 5
PNB 2 3.33
TOTAL 60 100
Source: Primary data
INTERPRETATION:
From the above table shows the banks preferred and accessed by the customers for
doing online banking. It shows that the respondents used different kind of banks
for accessing online services. Out of 60 respondents about 31.67% customers uses
federal bank,25% uses SBI for accessing online services,16.67% customers uses
SIB for accessing online services,18.33% uses Canara bank,5% customers uses
HDFC bank and Only 3.33% uses Punjab national bank for access their e banking
services. The following chart 4.1 represents the above table.
CHART NO. 1

BANKS CHOOSED
70
60
50
40
30
No of respondents
20
10
0

27
 Table 4.3
Type of accounts
ACCOUNT NO. OF PERCENTAGE
TYPE RESPONDENT
SAVINGS A/C 38 63.33
CURRENT A/C 16 26.67
STUDENT A/C 6 10
TOTAL 60 100
Source: Primary data

INTERPRETATION:
The above table 4.4 shows the accounts used by various customers in various
banks most of the respondents uses the savings bank account for access the online
services. 63.33% of respondent uses this account and 26.67% customers uses
current account and rest of them uses student account. The following chart 4.3
represents the above table.
CHART NO. 3

Chart Title

ACCOUNT TYPE

0 10 20 30 40 50 60 70

TOTAL STUDENT A/C CURRENT A/C SAVINGS A/C

28
 4.1.2.4 years of usage

Table 4.4
Years of usage

YEARS OF USAGE NO.OF RESPONDENTS PERCENTAGE

LESSTHAN 1 YEAR 13 21.67
1-3 YEAR 21 35
3-5 YEAR 16 26.67
ABOVE 5 YEAR 10 16.67
TOTAL 60 100
Source: Primary data

INTERPRETATION:
From the above table shows the usage level of respondents measured using number
of years. The table shows that 57% of the respondent depends the bank 3years for
their money transactions and 43% respondents access the banks for more than 3
years. The following chart 4.4 represents the above table.

CHART NO.4

YEARS OF USAGE

25

20

15
years of usage
10

0
LESSTHAN 1 1-3 YEAR 3-5 YEAR ABOVE 5 YEAR
YEAR

29
4.2.2 Information regarding online banking
4.2.2.1 Time spend for online banking

Table 4.5
Time spend by respondents

TIME SPEND IN NO.OF PERCENTAGE

MONTH RESPONDENTS

ONE’S IN A MONTH 14 23.33

2-5 TIMES 23 38.33

5-7 TIMES 15 25

MORETHAN 7 8 13.33

TIMES

TOTAL 60 100

Source: primary data

INTERPRETATION:
From the above table 4.6 shows the time spend by the respondents in a month for
accessing online banking. The table describes that 23.33% of respondents spends
one time in a month for enjoy the service of online banking. 38.33% of the
customers uses online banking 2-5 times in a month.25% of respondents uses 5-7
times and rest of the 13.33% spends more than 7 times per month for accessing
online services.

30
4.2.2.2Benefits compared to traditional banking
Table 4.6
Benefit compared to T-banking

BENEFIT COMPARED NO.OF PERCENTAGE

TO TRADITIONAL RESPONDENTS
BANKING
YES 54 90
NO 6 10
TOTAL 60 100
Source: primary data

INTERPRETATION:
The above table 4.7 states that the benefit of online banking when compared to
traditional banking. 90% respondents agree with the opinion “yes” and the
remaining 10% says “no”. The following chart 4.5 represents the above table.

CHART NO 5

10%

yes
no

90%

31
4.2.2.4 Mode of access to online banking

Table 4.7
Mode of access
BENEFIT NO.OF PERCENTAGE
COMPARED TO RESPONDENTS
TRADITIONAL
BANKING
YES 54 90
NO 6 10
TOTAL 60 100
Source: primary data
INTERPRETATION:
From the above table 4.9 we can analyze that 85% of respondents use mobile
phones for online banking and remaining 15% uses computers.
4.2.2.5Contribution of online banking in the success of banks
Table 4.8
Contribution to success of banks
CONTRIBUTION NO OF RESPONDENTS PERCENTAGE
LEVEL
VERY HIGH 18 30
HIGH 24 40
AVERAGE 15 25
LOW 2 3.33
NIL 1 1.67
TOTAL 60 100
Source: Primary Data

INTERPRETATION:
The above table 4.10 shows the contribution of technology in the success of online
banking. Out of 60 respondents 18 customers (30%) things that the technology
have a very high contribution in success of online banking. In opinion of 40%
customers the technology have a high contribution for the success of online
banking.15 customers (25%) thinks that technology have an average contribution

32
in success of online banking. Only 5% says that technology has low and very low
contribution to the success of banks.
4.2.2.6 Limiting factors of online banking
Table 4.9
Limiting factors
LIMITING FACTORS NO OF PERCENTAGE
RESPONDENTS
HACKING 14 23.33
TECHNICAL ERRORS 18 30
LACK OF 17 28.33
AWARENESS
DIFFICULT TO USE 11 18.33
TOTAL 60 100
SOURCE:PRIMARY DATA
INTERPRETATION:
The above table 4.11 describes the limiting factors faced by customers while using
online banking. 30% customers face technical errors while using online banking.
23.33% customers facing hacking issue and 28.33% respondents face lack of
awareness about online banking. All of the respondents are educated so there are
less respondents who faces the problem difficult to use the technology, only
18.33% customer’s faces this problem.
4.2.2.7 Digital money concept of govt.
Table 4.10
Digital money concept

Opinion No of respondents percentage

Yes 48 80
No 12 20
TOTAL 60 100

INTERPRETATION:
The above table 4.12 shows the opinion of customers about the gigital money
concept of govt. 80% customers states that there is an increasing tendency in usage
of online banking after introducing the policy. In the opinion of remaining 20%
customers, there is no increasing tendency is occurred in the usage of online
banking after introducing the policy.

33
4.2.3 Main motive to select online banking
This study conducted to find out the main motive to select online banking by the
customers. For the purpose of identifying the main motive Henry garret sampling
is applied.

Table 4.11
Motive to select online banking
FACTORS RAN RAN RAN RAN RAN RAN TOTA
K1 K2 K3 K4 K5 K6 L
SPEED 34 5 10 5 1 5 60

TIME 7 29 9 6 6 3 60

CONVENIENCE 6 9 20 10 10 5 60

ERROR FREE 4 6 6 24 8 12 60

COST 3 8 8 6 27 8 60
EFFECTIVENES
S
LESS EFFORTS 6 3 7 9 8 27 60

TOTAL 60 60 60 60 60 60

34
4.2.5 ONLINE SRVICES USED
4.2.5.1 Weighted average method
To analyse the mostly used online banking service we use weighted average
method.

Table 4.12
Online services used

Services 5 4 3 2 1

A/C INFORMATION AND 26 25 6 1 2

BALANCE ENQUIRY

E PAYMENT 11 24 16 6 3

EFT/RTGS/NEFT 12 15 20 10 3

E AUCTION 8 13 12 13 14

E SHOPPING 13 15 10 12 10

TICKET BOOKING 15 22 14 7 2

DEBIT/CREDIT CARD 19 15 15 5 6
TRANSACTIONS

Source: primary data

35
 Table 4.13
Weighted average
Services Likert’s Weighted Rank
score average
A/C INFORMATION AND BALANCE 252 4.20 Rank 1
ENQUIRY

E PAYMENT 214 3.57 Rank 4

EFT/RTGS/NEFT 203 3.38 Rank 5

E AUCTION 168 2.80 Rank 7

E SHOPPING 189 3.15 Rank 6

TICKET BOOKING 221 3.68 Rank 2

DEBIT/CREDIT CARD TRANSACTIONS 216 3.60 Rank 3

Corresponding average=weighted avg/no. of 24.78

variables
24.78/7=3.48

INTERPRETATION:
The table 4.18 shows the services accessed by the respondents. The table shows
that the respondents access the online services with a likert score of 252 and
weighted avg of 4.20 for account information.the second one is ticket booking with
an average of 3.68,the third one is debit/credit card transactions with a score of 216
and an avg of 3.60, the fourth one with an avg of 3.57 is e-payments. EFT stands
fifth,e-shopping as sixth and least of the customers with an avg of 2.80 access e-
auction.

36
4.2.6 problems with ATM
4.2.6.1 weighted average method
For the analysis of problems faced with ATMs we are using weighted average
method.

Table 4.14
Problems with ATM
PROBLEMS 5 4 3 2 1

Cards get 11 19 24 04 02
blocked

Machine out 20 24 10 06 -
of cash

Non printing 32 23 03 02 -
statement

Reduction of 03 11 18 24 04
balance
without
payment

Long 30 24 03 02 01
waiting time
in queues

Source: primary data

37
 Table 4.15
Weighted average method
PROBLEMS LIKERT’S WEIGHTED RANK
SCORE AVG
Cards get blocked 213 3.55 Rank 4

Machine out of cash 238 3.97 Rank 3

Non printing statement 265 4.42 Rank 1

Reduction of balance 165 2.75 Rank 5

without payment

Long waiting time in 258 4.3 Rank 2

queues

Source: primary data

INTERPRETATION:
The table 4.20 shows the problems with the ATMs. Most of the customers with an
avg of 4.42 faced the problem of non printing of statements.long waiting in the
queues is the next problem faced by the customers, it ranks the second with an avg
of 4.3.next is the machine out of cash, fourth is cards get blocked and the last
ranked problem faced by the customers is the reduction in balance without cash
payment.

38
4.2.8 PROBLEMS FACED IN ONLINE TRANSACTIONS

To know the problems faced, X2test is applied.

H0: there is no significant relationship between problems faced in online

transaction and marital status.

Table 4.16
Problems faced
Factors Marital
status
NOT PROVIDING Married 12 8 8
INFORMATION Single 10 17 5
NOT BEING TO Married 10 11 7
ABLE TO
MAINTAIN Single 9 12 11
SECURITY
TOO MANY Married 10 8 10
STEPS IN Single 14 12 6
PROCESSING
TRANSACTIONS
NOT GIVING Married 10 12 6
FAST RESPONSE Single 8 17 7
LONG TIME Married 10 12 6
WAITING Single 9 15 8

39
 Table 4.17
Chi square test
Problems in Marital Chi- Degree p- Accepted/
online status square of value rejected
transactions value freedom
NOT Married 28
PROVIDING Single 32 3.86 2 0.1448 Accepted
INFORMATION
NOT BEING TO Married 28
ABLE TO
MAINTAIN Single 32 0.72 2 0.6971 Accepted
SECURITY
TOO MANY Married 28
STEPS IN
PROCESSING Single 32 2.21 2 0.3312 Accepted
TRANSACTIONS
NOT GIVING Married 28
FAST Single 32 0.90 2 0.6381 Accepted
RESPONSE
LONG TIME Married 28
WAITING 0.41 2 0.8159 Accepted
Single 32
Source: primary data

INTERPRETATION:
The above table 4.24 shows the problems faced in online banking in terms of
marital status. If the p-value is greater than 0.05, the hypothesis can accepted and if
less than 0.05, hypothesis will be rejected. In this table all the factors are more than
0.05 (0.1448, 0.6971, 0.3312,0.6381,0.8159), so we can accept the null hypothesis
.so can decide there is no significant relationship between marital status and
problems in online transactions.

40
 CHAPTER 5
FINDINGS
SUGGESTIONS AND CONCLUSION

41
 FINDINGS

 It reveals that 71.67% of respondents are Male and the remaining 28.33%
of respondents are female.

 Out of 60 respondents about 56.67% customers uses federal bank and SBI
for accessing online services.

 63.33% of the respondents uses the savings bank account for access the
online services.

 56% of the respondent depends the banks 3years their money transactions.

 65% of respondents spends one time in a month for enjoy the service of
online banking and 10% respondents spends more than 5 times per month
for accessing online services.

 90% respondents agree with the opinion “yes” to the option that the online
banking is beneficial when compared to traditional banking.

 The study show that speed is the main motive to select online banking , the
effort has less importance .

 Mostly accessed service through online banking is account information and

balance enquiry

 The perception of customers towards accessing of online technologies are

identical in terms of gender.

 The customers are more satisfied with the balance enquiry facility of
online banking.

42
 The perception of customers towards satisfaction level of online services
are identical in terms of gender.

 The technical errors faced by customers are identical in terms of area of

living.

 Non printing of the statement is the important Problems face by customers

in using ATMs.

 42 customers (70%) things that the technology have a high contribution in

success of online banking.
 There is no significant difference between problems faced and marital
status.

SUGGESTIONS

 The online banking service must improve the security system.

 The banks must provide more awareness about the internet banking to the
customers.

43
  Banks provide better quality internet banking service to the customers.

 The bank must be concentrated in the service quality offered to customers.

 The banks should try to adopt latest technologies and special features to
the internet banking customers.

 To provide proper information regarding online banking

 Banks must tries to available the services with more convenience.

 Collect feedback from the internet banking users which helps in studying
user’s expectations and perceptions.
 Banks should take necessary steps to overcome the problems faced by
customers.
 Banks must concentrate in avoidance of fake websites to the net banking
services.

CONCLUSION

The study “A STUDY ON ATTITUDE AND PREFERENCE OF ONLINE

BANKING AMONG YOUTH” is conducted in Mampad college, helped to
identify the attitude and preference of customers among online banking. With the
growing economy, most of the people ready to use internet banking service.

44
Internet banking faces many challenges .In such situation banking sector must
concentrate to its overall services.
Internet banking provides more time saving in the busy world and most the users
says it is economically benefit. Most of the people are used their ATM card for
accessing internet banking. For more popularity the bank must introduce more
attracted services with low cost and give attention about providing awareness to its
customers. The study include online banking customers and they considered the
most valuable service is ease of use and their main motive to select online banking
is speed.

45
BIBLIOGRAPHY

46
BOOKS:
 QUANTITATIVE TECHNIQUE FOR BUSINESS By L.R POTTI
 The International journal of management
 Journal of business and economic research

Websites:
 www.google.com
 www.wikipedia.com
 www.rbi.com
 www.researchgate.net
 www.theijm.com

47
APPENDIX

48
QUESTIONNAIRE

I am THRIDEVI.A.S student of 6th semester BBA cooperation from MES

KALLADI COLLEGE MANNARKAD. This questionnaire is prepared for my
ongoing project to study the attitude and preference of youth towards online
banking. So kindly cooperate with me to fill my questionnaire.

1. Name:

2. Age:

3. Gender:

Male Female Other

4.Martial-status:

Married Unmarried

5. Area of living:

Rural Urban

6. Monthly income:

Below 10000 10000-20000 20000-30000

30000-50000 Above 50000

7. Education:

SSLC Higher secondary Degree

Master degree Professional course Others (Please specify)

8. Occupation:

Govt. employee Private employee Business

Student Others

9. Name of bank:

49
 10. Bank type:

Private bank Public bank

11. Type of account:

Savings account Current account Student account

Others (please specify)

12. How many years you use the banking

Less than 1 year 1-3 years 3-5 years

Above 5 years

13. How many times do you spent for online banking services in a month

One’s in a month 2-5 times 5-7 times

More than 7 times

14. Does online banking provides any benefit compared to traditional banking

Yes No

15. The main motive to select online banking (rate the characters from 1-6)

Speed Time Convenience Error free

Cost effectiveness Less efforts

16. What are the services used in online banking

A l w a y s Frequently Occasionally Rarely N e v e r

Account information and balance enquiry
e-payments

EFT/RTGS/NEFT
e-auction
e-shopping
Ticket bookings
Debit/credit card transactions

50
 17. Your level of awareness about online banking

0-20% 20%-40% 40%-60% 60%-80% 80%-100%

18. Mode of access to online banking

Mobile phones Computers

19. Satisfaction level of online banking services (Tick the appropriate one)

Extremely satisfied S a t i s f i e d N e u t r a l Dissatisfied Extremely dissatisfied

Account information &balance enquiry

e-payments
EFT/RTGS/NEFT

e-auction
e-shopping
Ticket bookings

Debit/credit card transactions

20. The contribution of online banking to the success of bank in your opinion is

Very high High Average Low Nil

21. The technical errors faced by you while using online banking

Always Frequently Occasionally Rarel y N e v e r

Automatic losing of apps
Availability of internet facilities
Errors in display balance
Low speed of accessibility

51
 22. Problems faced in online transactions

O F T E N R A R E L Y N E V E R
Not providing information
Not being able to maintain security
Too many steps in processing transactions
Not giving fast response
Waiting for long time for conducting transactions

23. Problems faced while using ATM

Always Frequently Occasionally R a r e l y N e v e r

Cards get blocked
Machine out of cash
Non printing of statements
Reduction in balance without cash payment
Long waiting in queues

24. The limiting factor of online banking

Hacking Technical errors Lack of awareness

Difficult to use

25. Are you satisfied with the digital money concept of the Govt.

Yes No

52