NEW TO BANK- ACQUISITION

Report submitted in partial fulfilment of the award of the PGDM

By
Chandrashekhar Mehta
Roll No 026.

To
Dr Kishore Barat
Professor, SBS.

Campuses
Shanti Business School
Shela
Ahmedabad
577601
Gujarat.

Kirloskar Institute of Advanced Management Studies

Gate no 356&357
Near Tata foundry
Dhamane village
Maval thaluka
Pune
410506
Maharashtra
Year of Submission June 2018

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 Declaration

This is to certify that this project titled, “New To Bank- Acquisition”

by Chandrashekhar Mehta in partial fulfilment of the PGDM, from
Shanti Business School, is based on the results of the project work
carried out by me and written by me under the guidance and
supervision of Mr. Hemang Shah. The project has been subjected to
plagiarism check by well-known plagiarism software. This report or
any theory has not been submitted for any purpose to any other
University or Institute.

Chandrashekhar Mehta

Place: Ahmedabad Signature and Name of candidate

Date: 7th July,2019

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 Certificate

This is to certify that this project titled, establishing a digital

footprint submitted by Ms. Shreya Srivastava in partial fulfilment of
the requirements of the PGDM, Kirloskar institute of advanced
management studies, is based on the results of the project work
carried out under my guidance and supervision. This report has been
subjected to plagiarism check by well-known software this Project
or any part of theory has not been submitted for any purpose to any
other university or Institute.

Shreya Srivastava
Name of the student intern signature
Date: 7th July 2018
Place: Jamshedpur

Certificate of Completion of BI
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This is to certify that Mr Chandrashekhar Mehta PGDM 2nd year
student of Shanti Business School, Ahmedabad have undergone
Business Immersion Programme (internship) on “New To Bank-
Acquisition” under the guidance of Mr Hemang Shah towards
partial fulfilment of the award of Post Graduate Diploma in
Management during the period 15th April, 2019 to 30th June, 2019.
We wish him the very best in all his future endeavors.

Name and Signature of CG

Company Seal:

Acknowledgement:
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This research was supported by my company guide Mr. Hemang
Shah and faculty guide Dr Kishore Barad. I thank my mentors and
colleagues of HDFC Bank branch, Paldi, Ahmedabad, who provided
insight and expertise that greatly assisted the research, although they
may not agree with all of the interpretations of this paper.
Last but not the least I would like to thank all of the professors of
Shanti Business School for sharing their pearls of wisdom with me
during the course of the research. I am also immensely grateful to
my friends for their assistance.

Executive summary:

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“Establishing a digital footprint” We are in the digital era. The banking industry is changing because

of digital technologies. Earlier every customer had to come to the branch to get work done and

everything was done in paperwork but now the systems has evolved. Every bank is going digital.

Embracing digital banking leads to faster services, customer satisfaction as he saves his time and effort

and the employees get freed of routine works. In spite of all these benefits we see that it is not being

adopted by many people. This research will help find out the main factors behind people not adopting

digital banking in HDFC Bank customers. This research will also establish a relationship between age,

gender, educational qualification and profession with adoption of digital banking.

Questionnaires were used to collect the primary data. 43 physical copies were distributed in

Jamshedpur’s HDFC branch Telco and 7 questionnaires were filled online by HDFC customers. All the

50 data has been combined to derive at results. Chi square analysis is used to find the relationship

between gender, age, education, profession and adoption of digital banking. The conclusions are

drawn.

Table of Content

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Serial Number Topic Page

number

1) Section A: Know your company 9

2) Learnings happened in 1st month 22

3) Learnings happened in 2nd month 34

4) Learnings happened in 3rd month 42

5) Research- Establishing a Digital Footprint- 42

Abstract
6) Introduction 49

7) Statement of the problem 52

8) objectives 52

10) Scope of the study 52

11) Literature Review 54

12) Methodology 55

13) Limitations 57

14) Analysis/Design 57

15) Summary 77

16) Findings 77

17) Conclusions 79

18) Recommendations 79

19) References 80

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 SECTION A

KNOW YOUR COMPANY

1) Background of the company including promoters:

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 The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank Limited', with its

registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial

Bank in January 1995. The Housing Development Finance Corporation (HDFC) was amongst the

first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in

the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994.

Promoter Company: HDFC Ltd. was a non-banking financial institution. The promoter of the

company HDFC was incepted in 1977 is India's premier housing finance company and enjoys an

impeccable track record in India as well as in international markets. HDFC has developed

significant expertise in retail mortgage loans to different market segments and also has a large

corporate client base for its housing related credit facilities. With its experience in the financial

markets, a strong market reputation, large shareholder base and unique consumer franchise,

HDFC was ideally positioned to promote a bank in the Indian environment. HDFC Ltd knew with

banks, they could draw funds from the public at a very cheap rate.

HDFC Bank commenced its business operations on 16th January 1995. On May 23, 2008, the

amalgamation of Centurion Bank of Punjab with HDFC Bank was formally approved by Reserve

Bank of India. In a milestone transaction in the Indian banking industry, Times Bank Limited

(another new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was

merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private

banks in the New Generation Private Sector Banks.

2) Characteristics of the industry to which the company belongs (Banking Industry):

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 Finance is the life blood of trade, commerce and industry. Now-a-days, banking acts as the

backbone of modern business. The robustness of banking system decides the health of the

country.
Banking industry has several features like:
 Dealing in Money: Bank deals with other people’s money. The deposit collected by

people.
 Individual/Firm/Company: A bank may be a person, firm or company. A banking

company means a company which is in the business of banking.

 Acceptance of Deposit: A bank accepts money from the people in the form of deposits

which are usually repayable on demand or after the expiry of a fixed period. It gives

safety to the deposits of its customers.

 Giving Advances: A bank lends out money in the form of loans to those who require it

for different purposes.

 Payment and Withdrawal
 Agency and Utility Services
 Profit and Service orientation
 Ever increasing functions
 Connecting link
 Banking business
 Name identity

Growth in Banking Sector Deposits

 During FY06–17, deposits grew at a CAGR of 12.03 per cent and reached 1.54 trillion by FY171.

 Strong growth in savings amid rising disposable income levels are the major factors

influencing deposit growth.

 Access to banking system has also improved over the years due to persistent government

efforts to promote banking-technology and promote expansion in unbanked and non-metropolitan

regions.

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 At the same time India’s banking sector has remained stable despite global upheavals, thereby

retaining public confidence over the years.

 Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY), have also increased. As on

November 9, 2016, US$ 6,971.68 million were deposited, while 255.1 million accounts were opened

Market Size: The Indian banking system consists of 27 public sector banks, 26 private sector banks, 46

foreign banks, 56 regional rural banks, 1,574 urban cooperative banks and 93,913 rural cooperative

banks, in addition to cooperative credit institutions. Public-sector banks control more than 70 per

cent of the banking system assets, thereby leaving a comparatively smaller share for its private peers.

Banks are also encouraging their customers to manage their finances using mobile phones.

3) Vision, Mission and Quality Policy:

Vission:
To build a world class Indian Bank.

Mission:
 Use enabling technology to provide value added products and services to customers.
 To build sound customer franchisee across distinct businesses.
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  To achieve healthy growth in profitability, consistent bank’s risk appetite.
 Committed to maintain the highest level of ethical standard, professional integrity,

corporate governance.

Quality Policy:

HDFC Quality Policy HDFC Bank shall constantly strive to innovate and deliver total financial solutions

to satisfy customers beyond their expectations in their home and lifestyle needs. This will be driven

by;

• Caring customer service, anticipating requirements and delivering proactive solutions.

• ISO 9001-2000 based quality management system and enhancing potential of our through

motivation, development and recognition.

• Caring customer service, anticipating requirements and delivering proactive solutions

• State of the art Information Technology and Communications Systems, coupled with continuous

improvement based on effective measures and efficient processes

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4) Organizational structure:

Overall organizational structure:

/
/

/////////////////////
6) Ownership pattern:

Shareholding Pattern - HDFC Bank Ltd.

Holder's Name No of Shares % Share Holding

Promoters 543216100 20.93%

Foreign Institutions 857888518 33.06%

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GDR 472988147 18.23%

Banks Mutual Funds 256407086 9.88%

General Public 234028529 9.02%

Others 166377979 6.41%

Financial Institutions 61399796 2.37%

Central Govt 2784112 0.11

7) Manpower (complete details of Human Resources):

Number of employees as of March 2017 was 84,325. There are both on the job training as well as off

the job (programs conducted by internal and external faculty). The bank believes that broader

employee ownership of its equity shares contributes to employee motivation and performance. 140

employees were in receipt of remuneration of more than 60 lakh per annum. 16 employees

employed for part of the year were receiving a remuneration of more than 5 lakh per month as of

March 2017. The bank uses IT extensively in its human resource operations. Human resource

department is headed by manager, HRD, who organizes the training programs for workers and

managerial staff. The manager HRD is only responsible for training and development. MHRD does not

look over workers and managerial staffs.

3 step process:

 Identifying training needs

 Impacting the required training
 Maintaining the training records

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Human resource planning: At the end of each year, the human resource department from each

branch receives the requirement for the person for whole year. Then the planning of recruitment and

training is done by training manager and recruiting manager which is approved from head of HR

department.

Recruitment: Recruitment is a process of searching for prospective candidates for the given job in the

industry. Every organization needs employee in short gaps of time because of retirement and

promotion of employees. Two things done at HDFC bank: First- Searching for right candidates.

Second- Encouraging right type of candidates wherever required.

Various training programs at HDFC:

 General Training
 Need Based Training
 Customer Training
 Technology training
 Personality development programs

8) Product/Service Profile:

Accounts and deposit-

 Savings max account

 Regular savings account
 Women’s savings account
 Kid’s advantage account
 Senior citizen account
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  Family savings group account
 Basic savings bank deposit account
 Institutional savings account
 BSBDA small account

Loans-

 Personal loan
 Car loan
 Two wheeler loan
 Business loans
 Home loans
 Loan against assets
 Educational loans
 Gold loan

Credit cards -

 Business Platinum Card

 Business MoneyBack Credit Card
 Business Regalia Credit Card

Other products include – Insurance, Forex cards and demat account.

9) Competitors with revenue of the financial year 2017

1) State Bank Of India -2.99 lakh crore INR

2) ICICI Bank – 1300 crore USD
3) Punjab National Bank - 47,424.35 crore INR
4) Axis Bank – 41,409.25 crores INR
5) Canara Bank – 48,942 crores INR
6) Bank of Baroda – 48,957.99 crore INR
7) Union Bank – 32,198.8 crore INR
8) IDBI – 28,043.1 crores INR
9) BOI – 41,796.47 crores INR

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/

10) Market share and growth rate of the company:

The current market capitalization stands at Rs 500,346.38 crore making it the highest in India.

Growth rate of the company:

Year EPS growth rate Revenue

2016 25% 631.62 Billion Rs
2017 16% 732.71 illion Rs

11) Annual turnover of the company:

Net sales turnover as on 2017- 69305.96 crores.

Other income as on 2017- 12296.49 crores.

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 12)

Profit and Loss account of HDFC Bank

(Amt in Crs)

Mar '17 Mar '16 Mar '15 Mar '14

12 mths 12 mths 12 mths 12 mths

Income
Interest Earned 69,305.96 60,221.45 48,469.90 41,135.53
Other Income 12,296.50 10,751.72 8,996.35 7,919.64
Total Income 81,602.46 70,973.17 57,466.25 49,055.17
Expenditure
Interest expended 36,166.73 32,629.93 26,074.24 22,652.90
Employee Cost 6,483.66 5,702.20 4,750.96 4,178.98
Selling, Admin & Misc Expenses 23,569.29 19,638.98 15,768.85 13,073.31
Depreciation 833.12 705.84 656.30 671.61
Operating Expenses 19,703.33 16,979.70 13,987.55 12,042.20
Provisions & Contingencies 11,182.74 9,067.32 7,188.56 5,881.70
Total Expenses 67,052.80 58,676.95 47,250.35 40,576.80
Mar '17 Mar '16 Mar '15 Mar '14
12 mths 12 mths 12 mths 12 mths
Net Profit for the Year 14,549.64 12,296.21 10,215.92 8,478.38

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 13) Address and contact details of the headquarters:

Address:

HDFC Bank House,

Senapati Bapat Marg,

Mumbai,

Maharashtra- 400013

Phone number: 022 66521000, 1800221006

Learnings happened:

It has been a great opportunity to learn and being exposed to HDFC Bank. HDFC is the largest bank in

India by market capitalization. It comes under the 8th best companies in India in the Forbes Global

2000 List. It is a great opportunity for me to learn how the big companies work. What are the specialty

of big companies in their day to day operations that make them reach those heights? The project given

to me is – “New To Bank- Aquisition”. To do my project effectively and to understand the base of my

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project I decided to explore and learn the core banking concepts. How does a bank work by observing

different employees of my branch, asking them as much questions as possible. I saw lots of very good

ideas and met some of the most resourceful people. They combined great technical skills and they had

the ability to manage with great political acumen. They have an awesome network which makes them

more successful in their pursuits. Being a part of this huge organization, I had time to learn a lot of

things in the first month in my first practical experience of the corporate world. It’s a retail branch in

an area called Paldi. I collected in-depth information about all our different divisions.

Description of the roles and responsibilities in the branch:

Branch manager: Accountable for achieving the short term and the long term targets of the bank. He

assigns the responsibilities to all the employees of the branch. The branch manager ensures that quality

service is given by the employees to the customer. He monitors the financial performance of the

branch. There are different segregations of customers. He has a portfolio of all the preferred customers

of the bank i.e. Customers with largest portfolios. Their every banking need is handled by this person.

His main agenda is to maintain long term relationship with the customer.

Personal Banker Sales: They look after the next class of customers i.e. the classic customers. They

have to complete their target by catering to their portfolio of customers or they can also bring new

customers. Personal Bankers Sales’ has to generate revenue from their portfolio of customers. They

have been given customer base who have good balance.

Operations head is the person who authorizes every transaction done at the bank. He also ensures the

submission of all returns in time. He conducts data integration checks, verification, maintenance,

monitoring and tallying. He also looks after audit, statutory and legal service. In addition to this, he

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also does cross selling and assistance of other employees if they face any difficulty with his vast

knowledge.

Personal Banker (Welcome Desk) looks after the banking needs of regular customers. Their role is a

mix of both sales and services. They are the first person to contact for anyone coming to the branch.

They open current and savings account and fixed deposits. They also work for enhancing the accounts.

They handle balance enquiry. Cross selling. Locker operation. With all this work, they have to keep the

goal of generating revenue in their minds.

Cash counter: Cheque and cash is deposited and withdrawn. Processing of demand draft, NEFT and

RTGS. Forex exchange, dealing and issue of forex card. Currency counters are commonly used in

vending machines to determine what amount of money has been deposited by customers.

Teller Authorizer: Authorization of every entry is done by the teller of the cash counter. He checks all

the cash counter transactions. It has a double checking process to ensure correctness of entries.

Credit card department: HDFC has an integrated credit card department. It has a separate counter for

credit cards. The credit card department in my branch looks after the customers of the whole state

Jharkhand. Employees there are involved in Sales but they don’t have the authority to provide any

service to the customers. They listen to problems and passes it to service department of Chennai.

HDFC is a liability company so there are certain restrictions in credit card offering and services.

Apart from these people in my branch, there are managers who have different responsibilities. There is

one manager handling the processing of car loans, one manager of insurance who processes and looks

after all the insurance deals grabbed by the employees. Information collected by people from this

branch and then given to the HDFC life person responsible for that particular branch.

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 This is done to avoid overburdening of employees with work and expertise in each product to

different people. HDFC also entertains people of other mutual fund schemes to come to the branch and

explain its features as HDFC gains commission on selling other companies mutual funds.

Please note:

Maintaining portfolio of customers and informing them about the offers:

The employees have to handle 4-3 customers on a daily basis updated on MIS. Some customers are

there who they need to call on daily basis. What details they store of customers? KYC details is stored.

Banking and accounting details is stored. If they do large transaction, employees contact them.

Concept of Sales and marketing learnt:

Sales and Marketing: Sales is a push strategy (just pushing the products) and marketing is a pull

strategy. Marketing is more than just selling the product. It looks after long term relationship

management with customers.

Sales

 Daily sales target given to employees.

 Selling technique: Question customers to know their background. In that way, we make the

customer think of their own needs and when they speak, analyze their needs and offer a product

accordingly. Requires situational intelligence.

 Cross sell: Selling complementary products to existing customers. Cross selling products to the

family members in between simple conversations.

 My experience selling the SIP’s: One must be fully aware of the products before he goes to sell

it. Different offerings based on gender, age, socio economic status, nature. Explained in detail

below in the mutual fund section.

 Importance of sales in an organization: All the employees, regardless of their roles are engaged

in cross selling.
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Offers: Various offers of banks to create a sense of urgency:

 In less than 10 second Personal Loan, It comes under Guinness book of world record. It is

the only bank in the world doing this. Once it gave 35 lakh loan to a person within 10

seconds. But that offer is only applicable to the people who have a good account balance,

good history of transaction with HDFC Bank and not much record of delayed payments.

HDFC software calculates it within 10 seconds and offers it.

 Virtual credit card done in 4 hours and then the customers can start using just after applying

in 4 hours even if they have not physically received the card. Virtual credit card is offered

online.
 Salary mela: Discounts in products for salaried customers and low rates of loan.
 High rates of fixed deposit if done within two days
 Various customized offers seen in the website of HDFC bank according to the banking

habits and capabilities of customers. Different levels of offerings according to the loyalty of

that customer to the bank.

Customer relationship management: (part of marketing)

Lead generation:
1) Contact the customers: First point of contact is very important. It may be through cold call

(calling customers from database and the database details are confedential), walk ins.
 Know your customers (customer profiling): Customer’s family background, customer’s

income. On that basis, we decide they can be potential customer and open their account.

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 2) Pitching: While the conversation, you need to take out the necessary details and in the

conversation know the other banks the customer is dealing with. And then ask, why he/she

don’t bank with us. He will reply for example he doesn’t know much about HDFC Bank. Then

we will explain the benefits of our bank in comparison to other banks. For example, HDFC is

giving higher interest rate on fixed deposits, then you can tell your customer to do the fixed

deposit with your bank. Once the customer is ready to take even a single product, it is a golden

opportunity for the bank as you get all the details for further product offerings. Then he opens

the account and according to the balance he maintains, he will get a class: Normal, Classic,

Preferred, Imperia account.

3) Services: If you are not giving good services to the customers, they would not do the banking

with you. Providing services is an integral part of customer relationship management. While

giving services, sale of banking products.

Handling customer complaints:

Dealing customer with patience. First listening to the problems of the customers and then gently

giving them advices. I listened to people asking different queries and how they tackled to them –

Reasons for complains:

Customer unawareness: It is the responsibility of the customer to take care of his account and check

the statements, reminders and mails sent to the customer by the bank. Only in some cases the branch

manager may refund if he thinks it’s necessary. It depends on the branch manager’s decision until

some amount. If the amount is too much, it is not under the branch manager’s hand.

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Bad customer service- Sometimes employees don’t pay attention to customer asking to service and just

concentrate on the customers bringing business to them. Non timely services.

Employee’s mistake: Error in updating the customer’s personal details in the record due to his/her

carelessness. Delay in cheque clearance. Lazy employees delaying in works.

It is seen that the one liable for committing mistakes have to pay the charges and refund the amount.

Example:

1) Customers coming with complaint of not able to close his account:

Reasons: Loan liked to account, credit card linked to the account, negative balance in account

(negative balance may happen due to EMI amount deduction, non-maintenance of minimum balance

in the savings account)

Solution- You can link the loan to some other account then account will be closed. Pay the remaining

balances then the account will be closed.

2) Mistakes happen in interbank amount transfer between two banks which needs to be cleared as

soon as possible by consulting the other bank.

What kind of mistakes happen in interbank transfers? What is the timeline of rectification?
Mistakes: Overwriting, bank running short of funds, signature mismatch, account no mismatch.

Then the cheque bounces.

Solution: New cheque has to be given by the customers. Then the transaction can be

completed.

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Scoping of my branch:

Concept of segmentation and penetration: I did the segmentation by visiting the nearby places and

made a list of all the places.

Then I asked customers visiting the branch of their place.

 Analysis: Maximum people were of the same area where the branch is situated. Some who had

account but shifted from that place. Some from nearby villages (where there is lack of banking

facilities).
Major catchment area included: Birsanagr, Telco colony, Azad nagar, Govindpur,

GhoraBandha.
Major players: Tata Motors, Tata Hitachi, Tata Cummins, Tata Power, ISWP, Nearby schools.
 The places from where no customers or less customers visited the can be the potential area for

penetration.
 Process: Who are the present customer and who can be the potential customers? - Present

customers are the customers in the portfolio and already banking with us. And the customers

who have brand loyalty.

Potential customers can be found out by calls, random home visits, walk-ins (people coming to

the bank for inquiry- they tend to compare the offers from all banks and then chose a bank).

Other potential customers include customers less frequently using HDFC’s products.

Mutual funds:

Things that I learnt about mutual funds:

Two types of mutual funds:

1) Lump sum- 1) Dividend payout: monthly, quarterly, yearly 2) growth option: Fund will grow, no

pay out.

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2) SIP: Systematic Investment Plan: Invest money on a monthly basis.

An Asset Management company has under it several schemes comprising of the pooled funds by

the customers. Each scheme has a fund manager who manages that fund and invests the fund collected

by people in different kinds of assets. The benefit is:

Diversified risk: As the money gets invested in several assets and instruments like equity, debt, land,

gold, government bonds, the risk gets diversified.

Expertise of fund manager: The fund manager has high level of expertise in analyzing the market and

invest accordingly.

Schemes according to the customer’s requirement: Different schemes with different kinds of risk and

return and various other fluctuations like term of holding, time of investing is available.

Example:

HDFC Prudence fund: 1) growth 2) dividend payout (mostly 10% payout is given)

Birla Mutual fund

SBI Bluechip

Average return of 10-12% and above. 0

The longer the fund is kept on hold the higher is the return.

Schemes that can be offered to customers:

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First, analyze customer’s requirement by asking them questions like their salary, age, saving capacity,

return expected, risk capability, family background to know the liability.

 Old aged people – offer them less risky plan like MIS
MIS: Monthly Instalment Scheme: They invest a huge amount they get at retirement and then

they get a return monthly.

 Customers with kids – medium risk plans and convinced them by saying that they can save for

their child’s higher education.

 Young customers – Explained them the perks of starting investments early. High risk funds can

be offered.
Why risk varies with the age: If in young age money is lost, they can earn that money again, so

they have higher risk taking capability. In old age, they don’t have the capability to earn the

lost money again.

Other miscellaneous learnings that happened:

 Security: Entries above 50k checked by the teller authorizer before passing the loan. The teller

authorizer does the tallying before passing the entry.

 Concept of cheque clearance: Cheque clearance is the process where cheques received of different

banks by HDFC Bank is settled with other banks.

 CRM: Bank already have data about people’s businesses. Offers are customized for different

customers. Details about it are confidential.

 Digital Banking: Tags like "Bank at your fingertips" i.e. bank aapki chutki me are used to attract

customers. Steps towards digitalization:

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 Tax savings forms on fixed deposits are almost converted online. It is done physically only for old

aged citizens who are scared of net banking.

 Competitive pressure: Benefits over government banks: Service high, technology high, high

discipline, low crowd at the branch, timing of employees, timing completion of works. HDFC has

a personal relationship manager. Government bank benefits: proximity of banks.

 "One can only invest in the project for which the loan is taken not in some alternative project." -

How is this ensured?

Audit, sales data and purchase data is collected by the bank. This is the new rule by the

government.
 Got to know the different ways in which customer can apply for net banking.
One way- When the account is opened, a pin is automatically sent by which he can access the

digital banking.
Second way: E-age form has to be filled and then he gets the pin.

Third way: You can also do it yourself via website, application ---you can reset your password by

clicking on forgot password, after which, your contact details and ATM card details are required

and then you can reset your password.

ATM card is mandatory for being a net banking customer.

In the second month of my internship I have started working on my project - “Establishing a Digital

Footprint”. The steps which I have taken for the project in this month are:

1) Exploring HDFC digital banking Platform.

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2) Exploring the digital banking condition in India.

3) Types of Questionnaires

4) Read previous researches on digital banking from Google scholar and KIAMS library articles.

5) I inquired from employees their views on digital banking (study on what all things can be converted

online).

6) The procedure for data collection

7) Different scales that can be used in a research.

8) Distribution of survey form prepared by me

9) Understanding customer and persuading them to fill the questionnaires.

10) Some concepts of banking

A brief description on all the 10 points of the work carried out:

1) Exploring HDFC digital banking Platform:

Digital Banking in HDFC is carried out with the help of following platforms:
 HDFC website is the major place where digital banking takes place. It’s bank at your

fingertips. Approximately 80% of the things can be done online. It has the option to

purchase the products, making payments, online shopping, compare various deals and

buy option.
 Phone Banking: Phone Banking is a combination of interactive voice response and

Agent offering. For all the services which cannot be done completely through

automated technology, phone banking takes out a way. All the transactions can be done

without the use of papers and only through telephone.

 Mobile Applications: PayZapp, Chillr:

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  Through Chillr, money can be sent within seconds to other people who have a

profile in Chillr.
 PayZapp is an app through which fund is transferred. Payment and recharge

facility is also there in it. Customer’s account is linked in PayZapp. There are

two ways to activate PayZapp:

 NetBanking linking
 ATM card can also be used.
2) Digital Banking condition in India:
Why adoption of digital banking has become necessary in this era?

Competition is increasing in the banking industry not only from other banks but also from other

companies offering banking facilities. One of which is FinTech technologies. It is technology used in

the financial services sector. It is disrupting the traditional methods of transfer of money, loans,

fundraising, management of asset and mobile payments. A bank in order to remain stable has to grow

strong in digital aspects. FinTech is also changing customer’s behavior. Customers these days wants to

adjust their investments and deposit a cheque while waiting in the queue for a bus. Democratization of

services is an alarm for banks to go digital. This is also necessary for attracting millennial customers.

The banking sector is revolving around customer centric products and services with speed and

dexterity which can be made possible through digital banking.

3) Types of Questionnaires: A questionnaire should go from simple to complex. There are mainly

3 types of questionnaires

Questions in open Questions in close Mixed

ended format ended format

31
  Open ended questions ask for free flowing answers. It doesn’t have pre-determined options.

It can be useful for suggestions for improvements from the customers. We can attain more

information by using it. Example: What improvements do you expect from HDFC Bank?
 Close ended questions has pre-determined set of options. Under it there is
o Dichotomous questions which has two options like ‘yes’ and ‘no’ option.
o Multiple choice question which has several options like age.
o Likert questions which has 5 options: Strongly agree, Agree, Neutral,

Disagree, Strongly Disagree

o Bipolar has two extreme answers
As people coming to the bank has less time to give, I chose close ended questions as it

takes less time.

 Mixed Method: It has some pre-determined answers but also an option to specify if there is

any other response. I have also used this if by chance I get some customers who are ready

to devote some more time.

4) Read previous researches on digital banking from Google scholar and KIAMS library articles.
I read previous researches and various articles and realized the importance of digital banking.

To find out the relationship between factors responsible for non-adoption of digital banking I

also inquired the employees. The various factors that could influence were:
 Information/knowledge about digital banking: Knowledge and education about what is

digital banking.
 Perceived usefulness: How much the customers think using digital banking will help them.
 Perceived ease of use: How much the customers think that it will be easy to use.
 Perceived enjoyment: It is not very tough and cumbersome to use digital banking and gives

a feeling of enjoyment in the mind.

 Level of satisfaction with bank’s services: The previous offering and brand image

effectiveness on adoption.
 Perceived privacy: Nobody else will be able to know my banking habits.
 Trust on the bank: Security
 Feature availability: Number of features relationship with digital banking.
 Internet connectivity: The person has mobile and internet or the device to use digital

banking.

32
  Design: Design of the website and application. Attractiveness to the eyes.

I had a talk with the employees regarding which factors they think are most relevant and added

those in my research.

5) I inquired from employees their views on digital banking (study on what all things can be

converted online).
Welcome desk: People come to cash counter for very routine stuffs like knowing the bank

statement, change of information which eats up the time of the employees.

Cash counter: Except for cash deposit and cash related transaction everything can be done

digitally. There’s no need for customers to stand in the queue and waste their time and energy.
Sales staff works: Purchase of products, submission and transfer of funds can also be done

online. There are a few exceptions in which the customer has to come to the branch. For

example, people who have don’t have time and want a personal banker to do his work. One

more example can be the head of HUF has to sign and give authority that members in their can

transfer their collective fund. The same is the case with partnership firm. (Partnership is a form

of business in which two or more people collaborate their management and capital. They share

profits according to the deeds signed).

6) The procedure for data collection: Relevant data, adequate in quality and quantity should be

collected. I am doing primary research (raw data) which is in most cases relevant and reliable.
To ensure correctness of the data collected, I inquired from the people coming to the branch

that they are HDFC customers or not. To ensure collection of data from all types of customers I

collected data from all type of people. Salaried, non-salaried, male, female, all age groups,

more educated and less educated. With these data, I can draw valid conclusion on adoption of

digital banking by all categories of people.

7) Different scales that can be used in a research.

33
 o Likert Scale: It measures attitudes of people towards something. For example:

Strongly agree to strongly disagree, Very good to very bad.

o Bogardus social distance scale: It measures the degree of variance of attitudes of

people to a societal group, racism category and ethnic group.

o Semantic Differential Scale: To know people’s feeling for something. It means the

same word may have different meaning for different people. It is used in qualitative

data.
8) Distribution of survey form prepared by me: I distributed the forms for 3 weeks to collect the

responses. I got an average response of 3 people per day.

9) Understanding customer and persuading them to fill the questionnaires: There were many

observations which I have already stated in the weekly report.

Some of the main points noted:
o We need to be confident while approaching someone so that they gain trust.
o If a customer has problem, then his problems should be listened to. One should be

ready to listen to the drawbacks of his company, so that the company can improve.
o Situational intelligence has to be applied while approaching a customer to convince him

to get the work done which has already been stated with examples in the weekly report.
10) Some concepts of banking:
o The concept of new customer acquisition: Customer acquisition is important for a bank

because customer also keeps leaving the bank. To maintain good level of customers and

attract new people is very important to remain competitive. This can be done in three ways:
 Referrals: If a customer has good relation with the bank and is happy with the

services provided, that customer can be asked for people whom he knows.
 Field work: Current account/ swipe machine selling in the market and other

banking products to individual customers.

 Random walk Ins: People who are not HDFC customers but come here for

some work and people who are there to inquire about the bank can be pitched.
o Concept of D mat account: D mat account is opened if a customer wants to trade in shares

of a company. Trading account is automatically opened for it. Trading account is the

intermediary between savings account and D mat account. In D mat account first year there

34
 is no charge and from second year onwards, if there is 1 transaction, charge is 250 Rs and if

0 transaction done, 500 Rs.

o Tax Saving schemes for customers available in the bank:
Income tax slab:

Income up to Rs 2,50,000 No tax

Income from Rs 2,50,000 – Rs 5,00,000 5%
Income from Rs 5,00,000 – Rs 10,00,000 20%
Income more than Rs 10,00,000 30%

 Life insurance investment plan: Under section 80C tax can be deducted on

the premium paid up to 1.5 lakh if the customer invests in this scheme.

Under section 10 (10D), the income received on the life insurance policy is

exempted from income tax.

 Tax saving mutual fund: Equity Linked Saving Schemes or ELSSs also

known as tax saving mutual fund scheme saves taxes under Section 80C in

the financial year. Tax deductions is up to Rs 1.5 lakh.

 Tax saving FD: The same 80 C scheme applies here. A maximum deduction

of 1.5 lakh under the Income Tax Act 1961.

 PPF (Public provident fund): 80C is applicable. The interest accrued is tax

free. It is also the safest as it is backed by the government of India.

Schemes are given according to the goals of the customer.

o Marketing concept: First comes marketing then comes selling. If we don’t do proper marketing

of the product which includes brand creation, creation of a unique selling proposition and

customer relationship, then customer loyalty will be hard to achieve. Once these marketing

functions are done, the sale will automatically happen.

Learnings in the third month of my internship:

1) Establishing a Digital Footprint: I asked the people coming to the branch that do they want to

activate their net banking and download mobile applications. Some people agreed when I told
35
 them the benefits of adopting digital banking. The benefits that I told them were: they can get

cashbacks on several online sites. They can also do the DTH, phone recharge, utility bills payment

directly from the internet and they don’t have to go out of their homes to get it done. Another

benefit is money can be transferred during emergency situations. To convince more people to adopt

digital banking, I used my application in front of them so that they get trust. I also told them the

benefit of HDFC application over other applications. HDFC bank’s fund transfer application is

secured by a large bank whereas many other applications are not. One more security feature in

HDFC digital banking is that when we add a beneficiary we get an immediate notification from the

bank. In this way money cannot be transferred to anyone without the permission of the owner of

the account. I also assisted customers to go digital by updating their pin digitally and told them

how to update the information using ATM. The process goes like: Insert ATM, put the pin, Go to

the more option, click update mobile number, Retype the new number. Within two working days

the mobile number will be updated by the back end team.

2) Credit card awareness: Some customers were asking that what is the benefit of using credit card of

HDFC Bank. I mostly sit in the credit card department so I often faced this query from credit card

customers. I made the customers aware that if they make purchase after the bill generation date,

then they’ll get more time to make the payment. I told them how they can increase/delay the

payment date. The way in which they can go for that: for an instance- The bill generation date is

15th June and the customer makes a purchase on 16th June. The 16th June purchase will now be

counted under bill generation date of15th July. The payment will now have to paid on 5th August

which is the nearest due date. In this way the customer will get 45-50 grace days to make the credit

card payment.

36
I also gave answer to this query of some customers- Procedure for making payment of credit card: For

first payment they have to make a call to customer care and after that they can make the payment from

net banking or from bank.

3) Survey accumulation: I transferred the data from the survey sheets collected from people to

Google form. Learnt how to make a Google form and how to fill it. Learnt about its various

options like short answer, multi choice, and checkbox for collecting different types of responses.
4) Research on statistics: What is statistics: Collecting and analyzing data especially for interpretation

and arriving at a conclusion for a big data with the help of a small data.

There are many types of statistical tests. There are some points on which we decide the statistical

tool:

 Type of variable
 Data distribution
 Design of the research
5) Data from previous researches: I thought to read some previous researches so that I could get a link

on how actually a research is conducted, analyzed and framed. Things I found out through the

previous researches:
 Every variable explained
 Background of study
 Research problem
 Objectives of the study
 All tools used explained
 Data collection explanation
 Data analysis explanation
 Explanation of every part of the survey (data collected)
 Analysis
 Summary of findings
 Final conclusion
 Recommendations
 Suggestions for further research

37
6) Types of variables: Types of variables:

Categorical variables:

 Nominal: Have more than 1 category but do not have an intrinsic order.
 Dichotomous: Two categories that are opposite and entirely different. For example: Male and

Female. Yes and No.

 Ordinal: Categories can be ordered or ranked. Example is a likert scale.

Continuous variables:

 Interval: The difference between two values is meaningful. For example: Difference between

20 and 30 degrees is same as difference between 30 and 40 degrees.

 Ratio: This is also interval variable with the added condition that 0 is means nothing. So, 0

degree holds a value and is not a ratio variable.

7) Statistical Tools: These were the statistical tools used:

Correlation checks the relationship between variables. What will be the change in one variable with

respect to the change in other variable? Correlation coefficient ranges from +1 to -1. +shows positive

relation, - shows negative and 0 shows no relation.

Pearson correlation is used with two quantitative variables.

Spearman correlation is used with ranked variables. It signifies its strength and direction.

Chi-square: It checks the independence of variables. Best to use when simple random sampling

method is used, the variables are categorical and the frequency count for each column is at least 5. For

example: The relationship between gender and choice of a party in voting.

38
Paired T-test: A paired t-test compares the value of two samples and based on that conclusion is

drawn. For example: Students’ marks before and after teaching with a particular method.

ANOVA: This is used to check whether the mean of more than 2 samples are significantly different or

not.

8) Essential qualities of a good sales professional:

Healthy self-esteem: Good professional believes in the theory –‘Customer first, commission

second’. They are proud of their profession, company and product. Their actions are full of

strength.

Good communicator: Listening and persuasion skills- They ask questions and listen patiently

to understand the need of the client and provide solutions accordingly. The unprofessional talks

too much. He talks to the point of losing the sale.

Belief and conviction: A good sales professional is sincere and excited about his product. Every

morning he wakes up looking forward to provide solutions to his clients. He feels that those

who don’t use his products are missing out on something very valuable.

Know your company or product: What are the qualities of the product, what are the drawbacks.

Where the company needs to invest, product performance, product diversification, better

advertisement?

9) Other learnings happened:

Proper arrangement of files Got to know that the auditor checks and tallies the photocopy of the

drafts. I was given the responsibility to arrange all the bank drafts order wise.

I learnt the importance of every document at a bank. The auditor will be coming in the next week. So

everybody started checking the accounts at the bank so that we do not get in troubles. Arranging
39
records in a systematical manner and started checking that all the products sanctioned by an employee

has the stamp of the employee or not. If the files are Authentic they put a BJR stamp on it. We got

tons of files to check. From this I got to know the importance of authenticity.

Awareness campaign:

The branch also conducted yoga session in a colony to build customer relationship when people

joined. This might create dedication towards bank over other banks.

These kind of public activities creates awareness and trust on the bank.

Application of statistics in my research:

Used pie chart to indicate the percentage of responses. Analyzed the pie chart. Chi square was most

applicable in my research.

Description of the pie square technique:

 Chi square technique is used when we need to find relation between variables. It is used to find

out whether there is association between 2 variables. Chi square calculation method: There is

an observed frequency and there is expected frequency. Observed frequency was taken out

with observation from the survey. The formula for expected frequency is row total*column

total/grand total. Then we find the difference between observed and expected frequency.

Square it and then divide it by expected value. The sum which we get is the chi square value. If

the calculated value is greater than the tabulated value we reject the null hypothesis and accept

the alternate hypothesis that the variables are dependent. 5% level of significance was taken

and the formula for degrees of freedom is (row-1)*(column-1).

This was applied in demographic factors like gender, age, educational qualification and

employment status and its relation with adoption of digital banking services.

40
Multi-tasking: While working on the research, I kept on observing how the bank is functioning. When

some employee is absent for a very long time, other employees take their position and did multi-

tasking. Multi-tasking is very important in the corporate world.

I also observed how employees maintain relationship with customers. Treating them like friends and

complimenting them.

Section B

Research on establishing a digital footprint)

Abstract----“Establishing a digital footprint” We are in the digital era. The banking industry is

changing because of digital technologies. Earlier every customer had to come to the branch to get

work done and everything was done in paperwork but now the systems has evolved. Every bank is

going digital. Embracing digital banking leads to faster services, customer satisfaction as he saves his

time and effort and the employees get freed of routine works. In spite of all these benefits we see that

it is not being adopted by many people. This research will help find out the main factors behind

people not adopting digital banking in HDFC Bank customers. This research will also establish a

relationship between age, gender, educational qualification and profession with adoption of digital

banking.

41
Questionnaires were used to collect the primary data. 43 physical copies were distributed in

Jamshedpur’s HDFC branch Telco and 7 questionnaires were filled online by HDFC customers. All the

50 data has been combined to derive at results. Little left about abstract.

Introduction: Competition is increasing in the banking industry not only from other banks but also

from other companies offering banking facilities. One of which is FinTech technologies. It is

technology used in the financial services sector. It is disrupting the traditional methods of transfer of

money, loans, fundraising, management of asset and mobile payments. A bank in order to remain

stable has to grow strong in digital aspects. FinTech is also changing customer’s behavior. Customers

these days wants to adjust their investments and deposit a cheque while waiting in the queue for a bus.

Democratization of services is an alarm for banks to go digital. This is also necessary for attracting

millennial customers. The banking sector is revolving around customer centric products and services

with speed and dexterity which can be made possible through digital banking.

The bank which adopts to digital banking the fastest will lead in future is evident. There was a great

necessity to know the attitude of HDFC Bank customers, where are they facing difficulties, what

improvements do they want and what can a bank do to make more people digital. For this the proper

relationship between different factors and different customer not adopting digital banking has to be

known. This research throws a light upon it. The services can then be tailored according to different

customer requirements. It will lead more people adopting digital banking services at HDFC bank.

The delivery of services through digital platform is necessary to meet customer’s expectations. The

online way of life is growing in India. Consumer lifestyle has changed. Study on customer preferences

on e-banking adoption has not been extensively examined in the Indian context. There is need of

42
research in this area. This study looks into the barriers of entry into e-banking services. It will look

into the attitude of adoption on the basis of different demographic factors like age groups, educational

qualification, gender and profession.

Factors influencing adoption:

1) Information/knowledge/awareness about digital banking: Awareness is essential part of

users adopting a technology. Awareness about what functions can be carried out through

digital banking and uses of it. So it is the bank’s responsibility to make the customers

aware about digital banking. Heavy advertisements can be done to make the customers

aware about the benefits of the digital banking. Are the people aware about digital

banking platform and do they know what all works can be done online on digital

banking. According to Rogers and Shoemaker (1971) customers must be aware, assure,

choose and affirm before adapting to new technology.

2) Ease of use: Davis 1989 defined ease of use as the extent to which users believe that

using a system will be easy and effortless. How easy the users are finding usage of

digital banking. They are easily able to search the information they are looking for and

carry out the activity. Ease of use also depends on the website design and lack of

ambiguity.

3) Complexity: Does using digital banking requires a lot of effort or they are comfortable

while using it.

4) Time saving/ relative advantage: Do they feel that using digital banking will save their

time? The customer feels that time saved is a relative advantage over traditional

banking.

43
 5) Social influence: What is the effect on customers if their friends and family use it? Do

they get influenced or do they have their own perception about it.

6) Trust: Trust is when a customer has the thinking that the other party will behave

honestly. Whenever a customer choses a product he is vulnerable to risk and is

dependent on other party. Do the HDFC bank customers trust the digital banking

platform fully or trust is a factor creating hindrance in adoption of digital banking.

Customer has lack of trust especially when it comes to handling their money so digital

banking has to work really hard to gain trust. Two areas of trust: trust in the system

delivering services and trust in the service providers. As the customers gain more trust

on digital technology they will adapt to digital banking more.

7) Assistance and information from the branch: Do the customers get assistance when they

come to branch with some queries about digital banking and do they anyways get

knowledge about it from the employees.

Statement of the problem: What are the factors responsible behind people not adopting digital banking

and relation between adoption and demographic factors of the HDFC customers?

Objectives of the study:

 Through the study we will be able to find out what is the attitude of HDFC Bank customers for

digital banking.

 What is the reason behind people not using digital banking

 What can be done so that customer uses digital banking more

44
  The relationship between different factors mentioned in the introduction part and demographic

factors like age, gender, education, employment status and adoption of digital banking.

Scope of the study:

The research will look into the reasons behind HDFC customers not using digital banking services.

The relationship between gender and adoption of digital banking services, relationship between age

and adoption of digital banking services, relationship between employability status and adoption of

digital banking and relationship between education and adoption of digital banking services. The

research will find out the relationship between different factors like ease of use, complexity, time

saving, security issues, social influence and attitude of different people with different demographic

factors mentioned above. In this way the research will establish the main reason behind people not

adopting digital banking and further actions and plans can be made in that way to influence more

people to adopt digital banking.

Figure 1.1: Conceptual Model

Level of Awareness

Customer Trust

Adoption of digital banking

Ease of use

Complexity
Social Influence
45
Independent variables Dependent variable

Literature Review:

This section will consist of findings from the previous research on digital banking adoption. The factors that

other researchers have taken into consideration. Theories and findings that other researchers have found out.

Importance of digital banking. Framework on which this study is based.

Findings of other researchers:

Earlier research have found out that there is a positive relationship between ease of use and usage of e-banking

services (Agarwal et al., 2000; Chau, 2001). Digital banking provides benefits to users in terms of advantage

and usefulness with 24*7 facility. The accessibility to electronical device is a relative advantage (Gerrard and

Cunningham, 2003). The facility of customer interaction is an important factor in adapting to digital banking

services. (Ainscough and Luckett (1996)

Gerrad and Cunningham (2003) also pointed out some factors of paramount importance in adoption of digital

bnaking., i.e. the features in the new technology are able to meet the needs of the consumers. For example the

46
availability of loan calculators, exchange rate converters, and mortgage calculators to help the customers

visiting the bank’s website. Availability of feature and digital banking adoption has a positive relation.

Pikkarainen et al. (2004) said that content on the website also changes customer perceptions. Quality designs,

colours, graphics, images etc all this have an impact on the customer’s mind and hence digital banking

adoption.

Rogers (1962) proposed a theory of diffusion of innovations that included 5 factors provided to have an

influence on customer’s acceptance of a new product or service. Those included relative advantage,

compatibility, simplicity/complexity, observability and trialability. Relative advantage in case of time, cost and

convenience. These are the characteristics of relative advantage.

Complexity refers to perception of the customer on how easy is using the product or service. It is also easily

understood or not. The people who believe that digital banking will not be easy to use will not adapt to the

technology very easily because some may not even try. If the customer is not technology friendly it may be

more difficult for them. This will require customer’s behavior to change. From physical transaction to online. It

may require them to behave different from their typical behavior (Gatignon and Robertson, 1985).

Gender has not been found to have a direct relation to adapting to digital banking technology (Taylor and Todd,

1995). It may also depend on the marital status of the couple. If the couple is married, they are likely to have a

joint account and married women tend to adapt to digital technology more.

A study has also revealed the relationship between age and adoption of digital banking. Younger people adopt

digital banking more. (Karjaluoto et al., 2002).

There has not been much research on race and caste.

There has been a positive relation between education, income and adoption of digital banking services.

Methodology-

Primary research was the mainly used.

47
Questionnaire was distributed to the HDFC customers coming to the branch. They were also interviewed on

their perceptions, complains and qualities that they like about HDFC digital banking services.

To ensure that every category of the demographic people are included the researcher ensured to do the survey

from people of all ages, both genders, highly qualified, less qualified randomly. The questionnaire was

administered face to face. Response rate is adequately high. Screening questions were asked to the respondents

to ensure that they were HDFC customers. The questionnaire was divided into three parts. The first part

included the demographic factors, the second part consisted of questions to find out the reasons for certain type

of behavior and part three consisted of question to know the attitude of the customer s towards digital banking.

Part three included the Likert scale. The questions in questionnaire were mostly close ended questions because

people coming to the branch are generally not ready to give more than 5 minutes in a survey. The pre-

determined options were asked by the HDFC employees and derived from secondary sources like previous

researches. The close ended questions included dichotomous questions which included ‘yes’ and ‘no’ option.

Multiple choice question which had various options like age. Likert questions which has 5 options like strongly

agree, agree, neutral, disagree, and strongly disagree. It takes relatively less time than open ended question. The

questionnaire also included mixed questions which is a mixture of pre-determined options and some columns to

be filled by customer alone.

The population is HDFC Bank customers. The population is the group of objects from which the researcher has

pulled out the samples and that sample conclusion will be the inference for the whole population.

Sample size: 50 is the sample size.

I have used non probability sampling. Method used was convenience sampling. In convenience sampling

respondents are selected because they are at the right place at the right time. Under convenience sampling the

method used is judgment sampling. Judgment sampling is a type of convenience sampling in which the

researcher decides the respondents based on his/her judgment. This method was used.

48
Source of data was HDFC Bank customers. Information was also collected by the employees and by the

secondary sources.

Techniques of data analysis tools: Technique used was chi square to find the relationship between two variables.

The variables are dependent or independent.

Limitations of the study:

The dominant objective of the study is to study customer adoption of digital banking services in HDFC

customers with the help of the factors like ease of use, complexity, relative advantage, social influences,

security factors, information from the bank.

The study was conducted by the people coming to the branch. Some people in hurry might not have read all the

options which may lead to wrong conclusions.

The method used is convenience sampling which may give a little wrong result.

Analysis/Design:

 Introduction:

This chapter shows, analyses and illustrates the research findings. This chapter analyses the response rate, what

is demographic characteristic of respondents, factors responsible for adoption of digital banking services.

 Response rate:

Out of 57 people given to fill the survey, 50 of them filled it correctly and fully. The research includes the right

responses of the respondents. Response rate will be 87.7% is the response rate.

The response rate was good because the respondents were approached when some were waiting for their

relationship manager or waiting in a queue or when they complete their work. This made them fill the survey.

Some people who were not able to complete the form was due to their extreme old age or if they were in a
49
hurry. Some people who came in between in their office hours. The good response rate was also due to the fact

that the researcher explained the questions to the people who were not able to understand the question.

 Demographics details of the sample respondents:

The research deals with demographic characteristics like gender, age, educational qualification, employment

status. The details of the results received are as follows:

On the basis of gender:

There was a question in the study in which the respondents had to put their gender Figure 1 illustrates the

findings:

Figure 1

The study shows 71% of respondents are male and 29% of respondents are female. This shows that majority of

people visiting HDFC Bank branch are male.

50
On the basis of age:

There was a question asking the age group of the respondents. Figure 2 illustrates the distribution.

Figure 2

18% of the respondents were in the age group of 18-27, 29% of the respondents were from 28-37 age group,

14% of the respondents were from 38-47 age group. 12% were from 48-60 age group and 27% of the

respondents were above the age of 60 years.

The highest number of respondents were seen from 28-37 age group which shows that this age group visits the

bank branch the highest. Effort was done from the researcher to get responses from all age groups.

Educational qualification:

51
Education level was also taken into consideration to check if there is a relationship between education level and

adoption of digital banking.

The results are presented in the Figure 3:

Figure 3

From chart 1.3, the results shows that the majority of the respondents have done graduation i.e. 43% followed

by masters 25.5%. The least respondents have done 3.90%. What is the relation between educational

qualification and adoption of digital banking?

On the basis of employment status:

It is also thought that employment status has an effect on digital banking. The likely influence will be calculated

based on the following employment status of the respondents. The results are in the figure 4.

52
Figure 4

The above data shows that there is highest number of data from retired and salaried. Maximum salaried people

come to the branch. The old age people have ample time to fill the survey if asked for. It is followed by self-

employed next highest is student and the least was housewives.

Usage of Digital Banking services:

After the demographic details the first question asked to customer was do they use digital banking services. The

details of the result are as follows in figure 5:

53
Figure 5

From the results from the chart above, maximum customers are using digital banking services 62.7% and 37.3%

of customer do not use digital banking services and still rely on the traditional methods of banking.

What modes of digital banking services are mostly used?

The respondents were investigated on which all forms of digital banking services they use and the results are in

the following pie chart (figure 6):

54
Figure 6

From the chart above it is seen that online banking is used mostly by HDFC Bank customer which shows that

HDFC customers have trust on internet. It is a good sign. It is followed by ATM banking. People use ATM to

withdraw or deposit cash and other functions like balance inquiry, change of customer’s information. Mobile

application is also used by 31% of the customers. Usage of mobile applications can be improved by certain

measures or awareness.

The factors responsible for people not using digital banking:

It was a question that mainly aimed at finding out what are the factors responsible for people not using digital

banking. This is to find out that where the customers are facing problem while using digital banking. The results

are shown in the following figure 7:

55
Figure 7

From the results we could find out that the major reason for people not using digital banking is lack of

awareness. The banks need to rigorously promote digital banking, its benefits and how it can be used (the

technology). The same 38.1% people told that they had safety and security issues. They were afraid to use these

new innovations. They can be made aware about how safe the digital banking processes are and how the

software is protected. 23.8% of the people told that they have challenges in using digital banking technology.

They can be taught on how it is used. Some people don’t even try thinking it is very difficult. They can be

taught and shifted towards digital banking. 24% of the people told other options. Its segregation include: 4.8%-

She is ready to use when it will get activated. 4.8%- Afraid of hacking problem which can again be included in

safety and security issues. 4.8%- less options given while doing phone banking and the system is very fast for

old age people to come up with it. (The expiration of OTP in a small time. 4.8%- “I trust internet but not mobile

phone”. In this line we can find the reason behind the difference in number of usage of mobile applications and

56
internet banking. 4.8%- They feel that they don’t need it. This can be due to the reason that the people do not

know about its benefits. 4.8% don’t use it due to the cost incurred in digital banking. The cost here can mean

cost incurred in acquiring devices like phone, computer and cost of internet and charges incurred during the

transaction.

Factors stimulating the use of digital banking:

This question was asked to find out what factors will encourage people to use digital banking services.

This question can help HDFC Bank to find out what can they do to encourage more people use digital banking

services.

Figure 8

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The results reveal that 65% i.e. the majority of the people not using digital banking will start using it if they get

greater assurance of safety from the bank. 30.4% said that they will use digital banking confidently if they are

provided a free training from the bank on how to use it. 13% find digital banking complicated and they would

use it if easier layout is provided or if they understand the functions in a better way. The other 11% had different

solutions that they need. The answers included the following:

Nothing can make me use it.

I don’t want.

I am too old.

If the transactions are made completely free of cost.

Never thought about it.

These were some of the responses which can be worked upon.

Factors influencing adoption of Digital Banking:

The study takes into consideration factors that influence adoption of digital banking. The factors were analyzed

and the results are as follows:

1) Ease of use and adoption of digital banking services

A question was asked from the respondents that do they feel it is not easy to conduct banking using

digital platform.

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Table 1

Majority of the people disagreed 35.3%. They disagree that it is not easy to conduct digital banking. It means

majority of the respondents using digital banking services feel that it is easy to operate it. 13.7% respondents

disagree. Here we see that it is perceived as easy. 15.7% of the people are neutral either they are unaware or

they don’t feel it easy or tough. 25.5% of the respondents who feel that it is it is not easy to conduct digital

banking through digital platforms. 9.8% of people agree that it is tough to use it. We see that maximum people

have the perception that it is easy to use digital banking services.

2) Complexity and adoption of digital banking services.

The people giving the survey were asked if complexity was a reason hindering the adoption of digital banking

services. The results are as follows:

The question asked was that the people do not require a lot of effort while digital banking transactions.

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35.3% strongly agreed that using digital banking services do not require a lot of effort. This is a positive sign.

27.55 of the respondents agreed that digital banking services do not require a lot of effort. 11.85 respondents

were neutral to it. 17.6% respondents disagreed to it and said that it required a lot of effort. 7.8% of the people

believed that it requires very much effort. It means that the banks can work more on easy navigation for

customers and a user friendly platform. It has to be done to make them use digital banking services otherwise

they will continue using traditional means of banking.

Table 2

3) Relative advantage in terms of time:

Respondents were asked that do they feel digital banking services are time saving. We see a very positive

response here. Nobody marked strongly disagree. 0.0%. Only 3.9% of people disagreed. 5.9% of people were

neutral to this question. 37.35 people agreed and a whole of 52.9% people strongly agreed. This data showed us

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that in spite of the customer using or not digital banking services they believe that it is time saving to use digital

banking services. This point can be leveraged with some other points to influence people to use digital banking.

Table 3

4) Social influence and adoption of digital banking services:

The respondents were asked the question that if their near and dear ones use digital banking services do they get

influenced to use it. We got equally distributed response with more number of respondents agreeing to it. 27.5%

of the people strongly agreed to it. 31.4% of the respondents agreed on it. 13.7% people were neutral about it.

7.8% of the people disagreed and 1936% of the people strongly disagreed. We see some people get influenced

and some not. A little more number of people get influenced. This can again be used as a competitive advantage

61
to promote digital banking services. People can be told to influence or recommend their family members about

digital banking.

Table 4

5) Security/Trust and adoption of digital banking services

Respondents were asked that do safety and security issues influence their digital banking adoption.

The results are illustrated below:

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Table 5

The question asked was do they fully trust technology that delivers digital banking services. 31.4% of the

respondents strongly agreed, 25.5% of respondents agreed. 15.7% of the respondents were neutral, 9.80% of the

respondents disagreed and 17.6% of the respondents strongly disagreed. Majority of the people trust digital

banking but there is a huge number of people distrusting it too. If bank works in this area, more people might

use this service.

6) Information from the branch and adoption of digital banking:

Respondents were asked the question that have they received enough information about digital banking services

from the branch and the results are as follows:

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Table 6

From the above it is evident that mostly people have received information about digital banking

services. 27.5% of the people strongly agreed. 33.3% of the respondents agreed. 15.7% of the people were

neutral. 11.8% of the people disagreed and 11.8% of the people strongly disagree. It is seen from the above data

that maximum people strongly agree and agree but there are also many people neutral and disagreeing towards

it. If more people are given information about it, more number of users can be attained.

The link between the independent and dependent variables.

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 Study was carried out to find out if there is any relationship between dependent and independent

variables. Each of the factors relationship was found out which is discussed below.

Relationship between gender and adoption of digital banking services:

Chi square value is .06612 which is lesser than tabulated value 3.841 at .05 level of significance and 1

df (degrees of freedom). Therefore there is a relationship between gender and adoption of digital banking

services. The variables are dependent. We reject the null hypothesis.

Null hypothesis: Gender and adoption of digital banking services are independent.

Alternate hypothesis: Gender and adoption of digital banking services are dependent.

Male Female
Yes 22 10
No 13 5

Observed value Expected value (Observed- expected)^2 (Observed- expected)^2/expected

22 22.4 .16 .00714
10 9.6 .16 .01667
13 12.6 .16 .012698
5 5.4 .16 .02969

Relationship between age and adoption of digital banking services:

Chi square calculated value is 9.35705 which is lesser than the tabulated value 11.070 @.05 level of

significance and 4 df. Therefore, we reject the null hypothesis. There is a significant relationship between age

and adoption of digital banking services. The data shows that maximum digital banking users are from younger

age group of 18 to the middle age 37. As the age is increasing usage of digital banking is decreasing.
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 18-27 28-37 38-47 48-60 Above 60
Yes 9 12 3 2 6
No 1 3 3 4 7

Observed Expected (Observed- expected)^2 (Observed-

expected)^2/expected
9 6.4 6.76 1.05625
12 9.6 5.76 .6
3 3.84 .7056 .18375
2 3.84 3.3856 .8816
6 8.32 5.3824 .6468
1 3.6 6.76 1.8778
3 5.4 5.76 1.0667
3 2.16 .7056 0.32667
4 4.68 3.3856 1.5674
7 4.68 5.3824 1.15008

Relationship between education and adoption of digital banking services

The chi square calculated value 10.05388 is less than the tabulated value 11.070 @.05 level of

significance and 5 df. Therefore we reject the null hypothesis. Education and adoption of digital banking

services is dependent variable. It is not independent. Masters people use it the most followed by degree

holders. It is the least with diploma holders. Education level is positively related to adoption of digital banking

services.

High school Diploma Degree Masters PHD Others

(none)
Yes 4 1 16 10 1 0
No 4 4 6 2 1 1

Observed Expected (Observed- expected)^2 (Observed- expected)^2/expected

value
4 5.12 1.2544 .245

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1 3.2 4.84 1.5125
16 14.08 3.6864 .2618
10 7.68 5.382 .70078
1 1.28 .0784 .06125
0 .64 .4096 .64
4 2.88 1.2544 .4355
4 1.8 4.84 2.688
6 7.92 3.6864 .4654
2 4.32 5.3824 1.2459
1 .72 .0784 .1088
1 .36 .4096 1.1377

Relationship between profession and adoption of digital banking services:

The chi square calculated value 5.777 is lesser than the tabulated value 9.488 @ 0.05 level of

significance and 4 df. Profession and adoption of digital banking services is dependent. Students, salaried and

self-employed use digital banking services more as they need to save time and want convenience. This feature

might have attracted them to use digital banking services.

Student Salaried Self-employed Retired Others

(housewife)
Yes 8 10 7 6 1
No 1 4 4 7 2

Observed value Expected value (Observed- expected)^2 (Observed- expected)^2/expected

value
8 5.76 5.0176 .8711
10 8.96 1.0816 .120714
7 7.04 .0016 .000227
6 8.32 5.3824 .6469
1 1.92 .8464 .44083
1 3.24 5.0176 1.5486
4 5.04 1.0816 .21460
4 3.96 .0016 .00040
7 4.68 5.3824 1.1500
2 1.08 .8464 .78370

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 Interpretation of results, findings, observations and suggestions which may be divided into chapters. 8.

Conclusions and Recommendations.

Summary:

The research found out that there was a relationship between gender, age, educational qualification,

employment status and adoption of digital banking services. Maximum users were male, youngsters, well

educated, salaried/ self-employed. Students are also using digital banking services which means that the

millennial are more into convenience. The upcoming generation will be more digital. HDFC bank can refer who

all do not use digital banking services and plan out something to influence them to use digital banking.

Findings:

The gender was not fairly distributed. It was 70% male and 30% female. The findings showed that

gender had an impact on adoption of digital banking services. Age was also found to have an impact of adoption

of digital banking services. The maximum users 24% were found from the age group of 28-37. It is higher than

middle aged and higher aged people.

The study showed that 64% of the people used digital banking while 36% of the respondents did not use

digital banking services.

We see in the research that 64.3% of the respondents used online banking. This shows that people have

started trusting internet. They are using internet banking more than ATMs. This can also be due to the reason

that internet is available at a very cheap cost in India these days especially after the launch of Jio

telecommunication services from Relaince Industries. While fewer users used mobile application. The company

needs to work more on promoting mobile applications.

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 Banks need to spend more on promoting digital banking especially to those who are totally unaware of

it easiness.

When respondents were asked what are hindrances they are facing that they are not using digital

banking services. Maximum 40% respondents told that they do not know about digital banking. The next

challenge was safety and security concerns. Third 25% was due to difficulties faced when they try to use digital

banking. The banks can at first make people aware of the benefits of using digital banking. Secondly they can

also spread the awareness that how easy it is to use digital banking. This will remove the fear from the people

who don’t use digital banking thinking it is very complicated. Banks can also assure its customers that it is

absolutely safe to use it. And banks are taking care of their funds.

Maximum customers told that they would adopt digital banking and use it more if greater safety

assurance is given. The next term with highest response was if they are given free training, they will adopt

digital banking. Improved awareness, free training and greater security would influence people to adopt digital

banking.

Level of education also affected the adoption of digital banking. More qualified people tend to use

digital banking services.

Majority 50% of the customers feel that it is easy to use digital banking services. But 34% do not find it

easy. 64% of the users believes it does not require a lot of effort. Users and non-users both believe that digital

banking saves time. This is a relative advantage to traditional banking methods.

Previous research showed that people didn’t get influence by their relatives and friends using digital

banking but now they get relatively influenced. This can be leveraged and loyal customers can be told to spread

reviews about their digital banking experience.

Trust is lacking. 26% of the customers still don’t trust the digital platform used to conduct digital

banking. People mostly 62% do get information about digital banking function. Some told they were only

informed after asking. The non-users can be informed by the bank employees even when they don’t ask about it.
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 Conclusion: The study was aimed at finding out the factors responsible for non-adoption of digital

banking services. Then the research found out the relationship between gender, age, educational qualification,

employment status and adoption of digital banking services.

There was a relation between all demographic factors and adoption of digital banking services in HDFC Bank

customers. Ease of use, complexity, social influence, information from the bank and security issues all had some

percentage of customer getting affected from it.

Recommendations:

HDFC Bank should increase the awareness about digital banking to their customers. They can do that by

providing free training or they can inform their customers of the benefits of the digital banking platform.

Extensive promotion will help.

HDFC Bank also need to improve on the safety issue or just inform the customers that how safe it is to use

HDFC digital banking platform. They can come out with other methods to improve safety like linking the

mobile phone to the bank and emails with protective codes. They can also educate people on how they can

ensure safety by not sharing the information with anyone like OTP.

The law can also help by coming out with stricter punishment for hacking and fraud done with digital banking.

References:
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1) Kumar Manoj, (2014, Feb, 24), Types of Sampling design, Retrieved from

https://www.slideshare.net/ManojKumar728/sampling-design-31558058

2) (2018, June, 21), Digital Banking, Retrieved from

https://en.wikipedia.org/wiki/Digital_banking

3) RUTH KWAMBOKA MOMANYI. (2016). FACTORS INFLUENCING THE ADOPTION OF DIGITAL BANKING BY
CUSTOMERS AMONG COMMERCIAL BANKS IN KENYA

4) Jane M. Kolodinsky March 2004. The adoption of electronic banking technologies by US consumer

5) sJose Mauro C. Hernandez, 2006. Adoption of internet banking: proposition and implementation of an

integrated methodology approach

6) Sangy Vatsa EVP & CIO, The age of digital banking article, Commercial Bank (NYSE CMA)

7) Write Chris, (2016), Biometric Banking and the $600 billion opportunity

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