A Study Assessing the Challenges Related to Online Banking in Developing Nation

Concerning Customer Behaviour - a Case of Indian Banking Sector

1. Research Title

The planned research topic is the challenges of online banking in developing nations

concerning customer behaviour – a case of the Indian banking sector.

3.

4. Research Questions

The research questions have been associated with the aim of the planned study, and such

questions are like,

 What obstacles to “online banking” in developing countries and the Indian banking

sector regarding customer behaviour?

 What are the effective strategies for the Indian banking sector to mitigate barriers

connected to “internet banking” concerning customer behaviour?

5. Literature Review

5.1 Significance of online banking in developing nations to enhance the customer

behaviour

As “online banking” is one of the significant services presented by the banking sector of

developing countries, it has been found as a highly secure platform for customers. Moreover,

banks usually have used encrypted devices to ensure that all the details of customers have

been protected and there is no security breach which has provided customers security from
account hacking and online frauds. However, as stated by Li et al. (2021), various banks in

developing countries have faced issues regarding providing safe online platforms to their

customers.

In addition, bill payment is more manageable for customers through online banking. It has

helped reduce the imposed penalty for the customers due to several customers relying on

online banking in emerging nations. In addition, online transactions have been performed

through online applications of the banks, which has encouraged the customers to transact

money at any time without attending any physical banking institution. However, as critically

stated by Ali, Khan and Kalwar (2021), various customers have played a significant number

of challenges regarding the online transaction of their money. According to Hammood et al.

(2020), While hassle-free access is one of the various advantages of online banking, it also

has made banking supremely convenient, and the requirement of waiting in long lines at the

bank has been eliminated.

5.2 Factors impacting the adoption of online banking to enhance customer behaviour in

developing countries

Demographic factors have been linked with the acceptance of various online banking

channels. For instance, as stated by Kavitha and Gopinath (2021), highly educated

individuals have superior knowledge regarding their system work and computer and excellent

skills and information. Such capabilities have been critical in the circumstances of online

banking, and therefore a connection between formal learning and acceptance has been

submitted. Moreover, it has been observed that individuals from the upper class are more

likely to utilise internet banking facilities, which are less costly and time-consuming.

Furthermore, it has been usually familiar that demographic factors have an important impact

on “customer behaviour” as well as attitudes regarding internet banking that has been found

to have different effects on gender, age, and income regarding utilising internet banking.

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Convenience has been recognised, and acceptance is a significant concern for new

technology. Moreover, as stated by Aboobucker and Bao (2018), comfort is suitable for the

customer’s products as they need time as well as physical effort to buy products as they have

required time, as well as physical effort to purchase products and internet banking has

presented 24 hours access which is a significant factor for adopting internet banking for the

commercial banks in developing countries. However, individuals are not interested in

utilising online banking as they have not required high conveniences. Moreover, accessibility,

connected to comfort, has also been a significant factor.

5.3 Theory of Planned Behaviour

Figure 1: “Theory of Planned Behaviour”

(Source: Tornikoski and Maalaoui, 2019)

As per the “theory of planned behaviour”, behaviours have been affected by intentions, which

have been determined by three elements such as “attitudes”, “subjective norms”, and

“perceived behavioural control”. As stated by Tornikoski and Maalaoui (2019), “Attitudes”

represent a person’s negative or positive analysis of executing a behaviour. Customers’

attitude toward internet banking has been aligned with the study of acceptance of internet

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banking by the customers. To enhance the intention to avail of internet banking, customers

often analyse the security of internet banking over traditional banking in developing

countries. It has been observed that young and middle-aged customers have a more positive

attitude towards internet banking than older individuals. Moreover, an individual’s attitude

towards a particular behaviour has been functioned as “behavioural beliefs”, which have been

referred to as the perceived consequences of carrying out a specific action. Such security theft

has made customers believe that the entire “online banking” is not secure.

Moreover, Albashir et al. (2018) state that “subjective norms” have also impacted the

banking customer’s intention. It has been observed that older customers are often influenced

by their acquaintances, and as a result, they have avoided online banking. However, “social

norms” have also affected the behaviours of customers of banks as a young group of people

are more likely to accept online banking. However, at various times some customers have

wanted to get “online banking” methods, but they have restricted their intention, which has

been referred to as “perceived behavioural control”.

5.4 Hindrance related to online banking in developing countries regarding customer

behaviour

Security is one of the most fundamental barriers for “internet banking” marketers because of

the inherent apprehensions traditionally related to banking online. As stated by Arif, Aslam

and Hwang (2020), even though systems of banks have been designed to be effectively

impenetrable, fraudulent activity and cyber-attacks have still been observed. Moreover, as

such systems, as well as accounts, have not been fully proofed, there are instances where

accounts have been hacked, and due to that reason, login credentials have been stolen and

caused identity theft. Moreover, while utilising internet service, various disruptions have

taken place, and the stability of the systems has been hampered. Furthermore, the ability of

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users to access bank accounts online has been affected when internet service has been

running slow.

Moreover, Alazab et al. (2021) stated that customers had not gained online access to their

banking information when banks’ servers had been temporarily unavailable as of the site’s

scheduled maintenance. It is a substantial issue for online banking in developing countries as

the infrastructure there is not as advanced as in developed nations, as customers have been

capable of handling their general banking requirements by themselves. Yet when customers

have faced issues due to a lack of personal connection with bankers, it has been difficult to

resolve their problems.

5.5 Literature Gap

Various literary gaps have been noticed while reviewing multiple scholarly sources regarding

the barriers to “online banking” in developed countries. One such hole has included the

factors influencing the implementation of “online banking” to enhance customer behaviour in

emerging nations. There is very little data regarding the topic, and such gaps will be

addressed in the research.

6. Research Methodology

6.1 Research Philosophy

The philosophy of the research depicts the appropriate thorough process that the researcher

needs to possess to ensure the fact that the data that has to be gathered for the study is done

systematically and also depicts the belief system which the researcher needs to follow to

make sure that the assumptions are made in the correct form (Alharahsheh and Pius, 2020).

The philosophy which has been chosen to be the most appropriate for the research will be the

usage of “positivism” as it will lead to the gathering of the data and analysis of it without the

intervention of the researcher and an “objective” based research could be conducted which is

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essential for ensuring the fact that a better understanding of the challenges related to online

banking in the Indian banking sector associated with the behaviour of the customers could be

obtained.

6.2 Research Approach

The approach of the research depicts the various plans that the researcher has thought

regarding carrying out the study, and along with that, the procedure to be followed to

evaluate all the aspects of the objectives could also be obtained from selecting the correct

approach for the research (Woiceshyn and Daellenbach, 2018). For this research, the data will

be gathered in a generalised manner from the sources and after that thorough evaluation of

the data will be done to find out the “specific” issues that have been faced by the online

banking of the Indian banking sector. The strategies the Indian banking sector has used to

eradicate the problems will also be depicted. Such a procedure of carrying out the research by

selecting a “deductive” form of “research approach”.

6.3 Research Strategy

The research strategy that will be utilised in this research is a “survey strategy”. The benefit

of utilising this strategy is that a “quantitative approach” to the study could be accepted,

allowing data collection using primary data sources (Adner, Puranam and Zhu, 2019). Such

quantitative data that will be collected for the research will include the collection of

numerical or statistical data that will provide a correlation between various variables found in

the study. Such data will lead to a better inspection of the issues faceted by the Indian

banking sector regarding the customers’ behaviour towards online banking in a thorough

manner.

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6.4 Samples and Sampling Technique

The samples for this research will be 100 employees who have been working for various

banks that are present in India. They will be selected from the target population, all the

banking sector employees, out of which 100 employees will be selected using the “random

sampling technique” process. This technique of sampling will help to gather samples for the

research in an unbiased manner.

6.5 Data Collection and Analysis Techniques

The data will be gathered for the research using the “primary form of data collection

technique” as it will bring about “raw” or “first-hand” data, which would prove to be highly

essential for the research (Sileyew, 2019). Using the “primary data collection technique”, it

will be possible to get direct answers regarding the issues that the Indian banking sector had

faced, and the current scenario of the customers’ behaviour related to online banking could be

obtained, thereby ensuring the validity of the data. An online survey will be conducted among

the employees of various Indian banks and their perspectives and viewpoints related to the

most critical issue that is faced by the Indian banks while implementing the online banking

system and the measure that has proven to be most suitable to positively affect the customers’

behaviour towards online banking could be obtained which will ensure the gathering of

reliable and trustworthy data. This research will consider “customer behaviour” as the

dependent variable and “Indian online banking” as the “independent variable” for assessing

the aspects related to obstacles faced by Indian customers concerning online banking and the

mitigation strategies developed for eradicating disruptions in online banking services for

Indian customers. Moreover, this research will consider the “ordinal variable” to assess

customer behaviour and “nominal variables” in the close-ended questionnaires. A

questionnaire containing ten closed-ended questions related to the research objectives will be

formed. With the help of SPSS software, the analysis of the statistical data will be done to

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gather the “correlation data” and to conduct the “descriptive statistical analysis (Udriyah,

Tham and Azam, 2019). This research will therefore be contingent upon the use of

“descriptive statistical analysis” which will support in the quantification of the data and

comprehend their nature through “data visualisation” and based on summarisation of the data.

7. Business Value

This planned research is significant as it has given necessary insights concerning the barriers

associated with “online banking” in developing nations regarding customer behaviour, which

the Indian banking sector has carried out to understand the obstacles regarding “internet

banking”. Moreover, the planned research has focused on the challenges of online banking in

the Indian banking sector. Through some effective strategies, the researcher has tried to

provide a solution; as a result, the banking sector and other developing countries can

acknowledge such strategies to mitigate the issue. Moreover, this proposed research can be

used for academic purposes to understand the challenges banks and customers have faced

regarding “online banking” in developing countries.

8. Indicative Timetable

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