Subject: Business Research Management.

Faculty: Dr. Nilesh Kate

Research Topic: Digitalization of Financial Services and
Consumer Behavior.

Table of Contents
Acknowledgement:.....................................................................................................2
Introduction:...............................................................................................................2
Literature Review:.......................................................................................................3
Research Objectives:...................................................................................................4
Research Hypothesis:..................................................................................................4
Research Questionnaire:............................................................................................5
Data Analysis...............................................................................................................9
Findings of the Research...........................................................................................23
Acknowledgement:

I am pleased to record my gratitutde and sincere thanks to Dr. Nilesh Tejrao Kate Sir faculty at
Pune Institute of Business Management, for his guidance and motivation that he provided to
us in terms of completion of this project.
I would also want to express my sincere gratitude to everyone who responded to our survey
and helped us in completion of the project.
I would also want to take this opportunity to thank all my group members without whose
participation the project would have been incomplete.

Introduction:

Digitalization of Financial transactions and other banking services is a facilitation of

financial transactions and other services using information and communication technology,
which has given rise to an entirely new financial model and a digital financial sector.
Digitalization of financial sector involves dealing with financial products and services through
computers or mobile and other similar devices. However, the digital financial services industry
is continuously evolving, with more and more service wings being added each day. In India
various national and multinational organizations have come into the market providing the
consumers platforms in form of apps through which they can avail various financial services.
After the covid 19 pandemic hit the world, people shifted from cash transactions to online
mode of payments to stay safe from contracting the virus. The pandemic provided a boost to
this online financial services sector with more people using online mode of payment and other
financial services. We will try to understand the extent of digitalization and amount of
consumers who use online financial services, also try and get an insight of the apps which are
most popular in India.
Literature Review:

Literature review describes how digitalization in financial services sector in India has been
adopted by customers of banks and financial service providing institutions. Digitalization is
considered as the new trend in financial services and financial institutions are moving towards
digitalization to provide digital and online financial services to customers. By promoting the use
of such digital platforms through the mobile applications, bank branches and various types of
advertisements, financial institutions in India can obtain a higher return on their services
through cost reductions, increased cross-selling opportunities through online services and
higher rates of customer retention with the ease of online transactions and services.
Since online financial services are gaining complete control over the customer experience
and developing a proper business model to meet their expectations, it's critical to do a
thorough study of customer usage and. Customers are rapidly adopting digitalization as they
become more aware of their demands and seek out organizations that can successfully provide
those needs. As a result, financial institutions are trying to deepen their client relationships
through the expansion of online financial services which will prosper more in the future. The
common public interest in digitalization has been growing in most developing nations recently.
One of the key reasons for banks to embrace digitalization is that the public wants to acquire
financial services over the internet at any time and from any location, rather than attending a
physical branch.
Because of the ease of using financial services online, online financial services gained rapid
popularity post the covid 19 pandemic all over the world. Customers who frequently use their
phones prefer to use new channels since they are more productive and beneficial in their daily
lives. Because digital platforms allow for more mobility in getting financial services, and most
current clients do not have enough time during working hours to visit banks or other financial
institutions. It has been observed that in order to use such digitalized financial services, clients
must have certain resources, such as a smart phone and access to the internet. Furthermore,
because digitization is the current trend, clients frequently seek assistance from financial
service providers in order to conduct financial transactions in a secure and efficient manner.
The sector in the upcoming years will only gain popularity and banking services will become
more digitalized in years to follow. We through this survey will try to understand the amount of
consumers who have shifted from physical to digital mode in terms of payments and other
financial services. We will also try and find the most popular applications in terms of financial
services sector in India, and reasons behind their acceptance among the users
Research Objectives:
The purpose of the research lies in trying to understand,
 Consumer usage of online payment apps and consumer behavior towards it
 How much of digitalized is the Indian financial services sector?
 Which is the most popular and preferred online payments app in Indian market?

Research Hypothesis:

The hypothesis for the research has been to analyze the level of digitalization in terms of
Indian financial markets as well consumer behavior towards the financial service providing
brands.
A hypothesis is a tentative explanation for something. It frequently attempts to answer the
questions 'How' and 'Why' at one level, it suggests how a particular variable is related. At a
more theoretical level hypothesis offers a reason for the way a particular variable gets
selected.
It is a logically organized set proposition which serves to define the events, describe the
relationships among these events, and explains the occurrence of these events.
Here we need to choose both (DV)Dependent Variable and (IV)Independent Variable for the
research.
 DV (Dependent Variable) - Digitalization of financial transactions and financial services
sector.
 IV (Independent Variable) - Consumer preference, behavior and usage of UPI, Online
payments and other digital financial services.
Research Questionnaire:

An autonomous research survey and questionnaire to understand the extend of

digitalization of financial services, consumer usage of online and mobile payments
app and consumer behavior towards it.

1. Email:
2. Name:
3. Age:

4. Gender:
o Male
o Female
o Others

5.Which state are you from?

=

6.How much is your family or monthly income?

o 50,000 - 1,00,000
o 1,00,000 – 2,00,000
o 2,00,000 – 3,00,000
o 3,00,000 – 4,00,000
o 4,00,000 – 5,00,000
o More than 5,00,000
7. How many bank accounts do you have?
o 1
o 2
o 3
o 4
o More than 4
o I don’t have a bank account.

8. Do you use any kind of online payment system or online payments app?
 Yes
 No

9.How often do you use online payment mode?

o Several times a day
o Once daily
o Sometimes in a week
o Hardly once a month
o Seldom ever

10. Which Online Payment app you use the most?

o BHIM Pay
o Phone Pe
o Pay Tm
o Google Pay
o Amazon Pay
o YoNo App
o Others mention?
 11.Which services do you pay for while using these apps?
o Money transfer
o Bill Payments and Recharge
o Trading and Buying of stocks
o Food Delivery and restaurants
o Online and E-commerce payments.

12. Do you receive rewards and cashbacks through your apps?

 Yes
 No
 Maybe, sometimes

13. Do you face problems during making online payments?

 Yes
 No

14. If Yes, then what type of problem please mention below?

16. How would you rate the current payment app you are using (Ex: Paytm) on
the current user experience?

-5 -4 -3 -2 -1 0 1 2 3 4 5
17. How would you rate your experience of using online payment apps?
o 5- Excellent.
o 4- Good.
o 3- Neither Good nor Bad.
o 2- Bad.
o 1- Very Bad.

18. Do you think online mode of payments and transactions will take over cash
transactions in future?
 Yes
 No
 Maybe, not sure.
Data Analysis
Data Analysis is the process of analyzing, cleaning, manipulating, and modelling data
with the objective of identifying usable information, informing conclusions, and assisting
decision-making is known as data analysis. Data analysis has several dimensions and
methodologies, including a wide range of techniques under many titles and being applied in a
number of business, scientific, and social science sectors.  Data analysis is important in today's
business environment since it helps firms make more scientific choices and run more
efficiently. 
Data mining is a type of data analysis that focuses on statistical modelling and knowledge
discovery for predictive rather than just descriptive purposes, whereas business intelligence is
a type of data analysis that heavily depends on aggregation and is primarily concerned with
business data. Data analysis may be separated into descriptive statistics, exploratory data
analysis (EDA), and confirmatory data analysis in statistical applications (CDA). EDA is
concerned with finding new characteristics in data, whereas CDA is concerned with validating
or refuting current assumptions. Predictive analytics is a type of analytics that focuses on the
future.
We conducted a survey it was a random sampling survey with a population of 85 people. We
asked them the following question about their Fintech Experience and the Problems Faced by
them.

On receiving the responses from over 80 respondents. We found that the average
age of the survey population was between 21 to 25 years old when we conducted
the study survey. This age group accounts for over half of the survey population,
the lowest age being 18 and the highest being 45.
Having an understanding of the gender of the respondents is important in terms of
drawing demographic and gender based conclusions. On looking at the age
demography of the population, we found 67% Male respondents compared to 32%
Female out of thetotal population.
We had our respondents from all over India, using various payment apps. The
maximum of respondents were from West Bengal (37%), Jharkhand (19.5%), and
Assam (6.1%)the eastern part of India. We also had scattered responses from
states like Gujarat, UP, Rajasthan, and Kerala. In terms of level of financial activity
region wise all over India our sample population were mostly people from the
eastern part of the nation, with many other states having their say in form of
respondents.
Level of Income helps in understanding the level of financial activity and financial
engagement of the respondents. Inquiring about the population's monthly or
household income. We had a mixed answer, with 52 percent of the population
earning less than Rs. 1,00,000 lakh. We had almost 16% of the population who
were earning between 1,00,000 lakh to 2,00,000 lakh. Almost 9% of the population
were earning more than 2,00,000 but less than 3,00,000. A mere 7.3% of the
population earned between 3,00,000 to 4,00,000 Lakh. Another 16% of the
respondents were only earning more than 4,00,000 lakh a month.
On trying to understand the level of financial activity the population was engaging
in. We asked the population about the number of bank accounts they were using.
By looking at the pie chart we can see that almost 83% of people have one or two
bank accounts, with 17% of the survey population having three or more bank
accounts. Among the respondents the majority of the population had only 1 bank
account which we say is the trend. We also had 6% of the respondents who didn’t
have any bank account.
 Again here on trying to grab an clear picture about the usage of the Online
payments apps and amount of engagements people have with the apps, we asked
them the above question. Here we see almost 60% of the respndents used their
payment app on a daily basis that is everyday. Among the rest 40% we found
almost 26% of the population who used it sometimes, the rest 14% used it hardly
once a month, or seldom.
 On trying to understand since when the Digitalization of the financial sector
started in India we had asked our respondents since when they started using the
online payment apps. Most of the rspondents around 50% responded that they
started using it between 2018-2020, almost 11% of the rspondents were early
users who started using it during 2016-2017. Around 17% respondents sayed that
they have started using the online apps last year 2020-21.
People are more interested in money transfer, as shown in the graph, with 73
percent of people transferring money from an online payment app, 63.4 percent
of people doing bill payment and food delivery via online payment, 50 percent of
people doing online payment in E-commerce, and only 11 percent doing other
transactions.
According to the statistics, Gpay is the most popular app for receiving rewards,
with 52.4 percent, followed by Phonepe with 24.4 percent, Paytm with 12.2
percent, Amazon Pay with just 11 percent, and BHIM Pay and YoNo App with no
rewards, as seen in the pie chart.
63.4 percent of people have received rewards from online payments, 9.8 percent
have not received any rewards from online payments, and 26.8% may or may not
have received rewards.
 Through this question we wanted to understand the ease and the
difficulties faced by the users during making online pyments. Among the
respondents almost 46% respondended that they do not face much of problem
when it comes to making online payment. But a major portion of 45% aggred they
face problems sometimes, along with almost 9% claiming they always face
problems while making oline payments.
In this graph, it can be seen that 31.7 percent of people think PayTM is a good
payment option, whereas 18.3 percent think it's a little less good, and 9.8 percent
think it's a little less good
According to this survey, different people have different opinions about online
payment apps, as shown in this graph, 41 people, or 50% of the population, have
rated 5 stars, 24 people, or 29.3% of the population, have rated 4 stars, 12 people,
or 14.6 percent of the population, have rated 3 stars, and 5 people, or 6.1 percent
of the population, have rated 2 stars.
63.4 percent of people have received rewards from online payments, 9.8 percent have not
received any rewards from online payments, and 26.8% may or may not have received
rewards.

The above graph shows the responses of customers who were asked whether
online payment will take over cash shortly or not. The majority of customers,
67.1%, said "yes" online payment will take over cash shortly, 6.8% said "NO," and
the remaining 26.8 %were unsure whether online payment will be successful or
not in the future.
Findings of the Research

From the above research work and survey we had few major findings based on
the responses collected from all the respondents.
 Through our survey we wanted to understand the age of the respondents,
the age group between 21- 25 years were mostly active users of UPI
payment methods financial services provided through the apps.
 People mostly with income above one lakh rupees were using the online
financial services.
 Almost 60% respondents responded in the survey that they use the UPI
payment apps and financial services daily, while 25% said that they use it
sometimes in a week.
 During 2016 and 2017 online payment and other financial services were not
so popular in India, but after 2018 people have started using financial
services more often.
 Through multiple responses question we had asked the respondents about
most used service of the payment apps. Almost 60 responses (73%) said
they did money transfers and 52 responses (63%) said they made bill
payments and recharges.
 The survey responses given by the respondents indicated that almost 52% of
the population were using Google Pay app for their online financial service
needs, the second highest being Phone Pe at 24%.
 In terms of user experience almost 24 respondents (30%) were completely
satisfied and rated their user experience 5/5, and 41 respondents (50%)
rated their experience as very well marking it 4/5.
 On asking the respondents of the survey about if they think that online
transactions will take over cash transactions, almost 67% respondents
believed that the online payment and transactions will take over cash
currency and transactions in near future.
Our Learnings

We through this project and research were able to learn a lot

of new things in terms of how a research survey needs to conducted and
further analysied.
We learned about the extent of impact UPI and Online financial services had
in Indian financial market. We also noticed a growing trend among the
young generation who were mojarly using the online payment facilities.Back
in 2017 the Indian financial sector started revolutionizing with the financial
services joining hands with internet technologies, applications and
softwares. This changed the course of how customers could reach out to
their banks and use financial services of various types.
This FinTech revolution is unique in it much of the change is coming from
outside the financial industry, as young start-ups and large established
technology corporations try to disrupt incumbents by offering new goods
and technologies, as well as delivering a huge new dose of competition.
FinTech began with mobile payments, money transfers, peer-to-peer loans,
and crowdfunding, and has now expanded to include blockchain,
cryptocurrencies, and robo-investing. On all of these dimensions, new
technology-based start-ups are rushing to fill the gaps left by traditional
enterprises in the consumer experience.