BBA Batch 11 Morning Prakash Regmi PW Report Puja Sah

Impact of E-banking practices on customer satisfaction in
Nepalese Commercial Banks
Project work
Submitted by:
Prakash Regmi
Exam Roll No: 20032345
P.U. Registration No: 2019-2-03-1336
A Project Report Submitted to

Uniglobe College
(Pokhara University Affiliated)
Submitted for the degree of

Bachelor of Business Administration (BBA)
Kathmandu, Nepal
July, 2023
Acknowledgements
The study entitled “Impact of E-banking practices on customer satisfaction in Nepalese

Commercial Banks” has been conducted to satisfy the partial requirement for the degree of
Bachelors of Business Administration, Pokhara University. First and foremost, I would like
to express my deepest appreciation to Miss. Puja Sah Research Assistants of Uniglobe
College, for their valuable suggestions, inspirations and guidance to complete this research
work successful. Similarly, I offer my sincerest gratitude to Academic Director of Uniglobe
College, Prof, and Dr. Radhe Shyam Pradhan for his valuable supervision and guidance in
completing this study. I am ineffably indebted and very thankful for his continuous support
and constructive suggestion that have enabled this research project to achieve its present
form. Furthermore, I would also like to thank Uniglobe College for providing the resources
for research work and providing library and computing support without which knowledge and
assistance of this study would have not been successful. Additionally, I would like to express
my gratitude to Uniglobe College for providing the tools necessary for research as well as for
its library and technical assistance, without which the success of this study would not have
been possible.
Last but not least, I would like to express my gratitude to my parents, family, friends, and all
those who supported me while I was conducting my research. I do, however, accept full
responsibility for any mistakes or inconsistencies that may have appeared in this report.
Prakash Regmi
July, 2023
i
Certificate of authorship
I hereby declare that this study entitled “Impact of E-banking practices on customer
satisfaction in Nepalese Commercial Banks” is my own work and that, to the best of my
knowledge and belief, it contains no material previously published or written by another
person nor material which to a substantial extent has been accepted for the award of any other
degree of a university or other institution of higher learning, except where due
acknowledgement is made in the acknowledgements.
…………………….
Prakash Regmi
July, 2023
ii
Table of contents
Acknowledgements....................................................................................................................i
Certificate of authorship.........................................................................................................ii
Table of contents.....................................................................................................................iii
List of tables..............................................................................................................................v
List of figures...........................................................................................................................vi
List of abbreviations..............................................................................................................vii
Executive summary...............................................................................................................viii
Chapter I...................................................................................................................................1
Introduction..............................................................................................................................1
1.1 General background..........................................................................................................1
1.2 Statement of the problem..................................................................................................5
1.3 Objective of the study.......................................................................................................8
1.4 Significance of the study..................................................................................................9
1.5 Review of literature........................................................................................................10
1.5.1 Review of past literature..........................................................................................10
1.5.2 Review of current literature.....................................................................................15
1.5.3 Review of Nepalese literature..................................................................................19
1.6 Conceptual framework...................................................................................................23
1.7 Operational definitions and hypothesis..........................................................................24
1.7.1 Dependent variable..................................................................................................24
1.7.2 Independent variables..............................................................................................25
1.8 Research methodology...................................................................................................29
1.8.1 Research design.......................................................................................................29
1.8.2 Nature and sources of data.......................................................................................30
1.8.3 Data collection instruments.....................................................................................30
1.8.4 Population and sample.............................................................................................30
1.8.5 Model specification..................................................................................................31
1.8.6 Validity and reliability.............................................................................................31
1.9 Limitations of the study..................................................................................................32
1.10 Organization of the study.............................................................................................33
Chapter II...............................................................................................................................34
Data analysis and major findings.........................................................................................34
iii
2.1 Presentation and analysis of data....................................................................................34
2.1.1 Profile of respondents..............................................................................................35
2.1.2 Respondents’ perception on and ease of use, security and privacy, time savings,
perceived benefits with customer satisfaction..................................................................39
2.2 Correlation analysis........................................................................................................51
2.3 Regression analysis........................................................................................................52
2.4 Major findings................................................................................................................53
Chapter III..............................................................................................................................60
Summary and Conclusion.....................................................................................................60
3.1 Summary.........................................................................................................................60
3.2 Conclusion......................................................................................................................63
3.3 Recommendation............................................................................................................63
3.4 Scope for the future research..........................................................................................64
References...............................................................................................................................66
Appendix.................................................................................................................................74
iv
List of tables
Table 1.1: Review of past literature.........................................................................................11

Table 1.2: Review of recent literature......................................................................................15
Table 1.3: Review of Nepalese literature.................................................................................19
Table 1.4: Coefficient of Cronbach’s alpha.............................................................................32
Table 2.1: Demographic characteristics of respondents..........................................................36
Table 2.2: Respondents’ perception on convenience...............................................................39
Table 2.3: Reliability of E-banking service in the context of Nepalese commercial banks....41
Table 2.4: Ease of use of E-banking service in the context of Nepalese commercial banks...43
Table 2.5: Security and privacy of E-banking service in the context of Nepalese commercial
banks............................................................................................................................44
Table 2.6: Time saving of E-banking service in the context of Nepalese commercial banks. 46
Table 2.7: Perceived benefits of E-banking service in the context of Nepalese commercial
banks............................................................................................................................48
Table 2.8: Customer satisfaction from E-banking service in the context of Nepalese
commercial banks.........................................................................................................49
Table 2.9: Kendall’s correlation coefficients matrix................................................................51
Table 2.10: Regression results of Convenience (S), reliability (R), ease of use (EU), security
and privacy (S), time saving (TS), perceived benefits (PB) and customer satisfaction
(CS)..............................................................................................................................52
v
List of figures
Figure 1.1: Conceptual framework..........................................................................................24

Figure 2.1: Classification of respondents by gender................................................................37
Figure 2.2: Academic qualification of respondents.................................................................37
Figure 2.3: Income level wise classification of respondent.....................................................38
Figure 2.4: Occupation wise classification of respondent.......................................................39
vi
List of abbreviations
ANOVA Analysis of Variance
SPSS Statistical Package for Social Scientists
BFIs Bank and Financial Institutions
ICTs Information and Communications Technologies
ATM Automated Teller Machine
SMS Short Message Service
E-Banking Electronic Banking
EFT Electronic Funds Transfer
IT Information Technology
IB Internet Banking
Cs Customer Satisfaction
Adj. R2 Adjusted R2
SEE Standard error of estimate
FI Financial Institution
KYC Know Your Customer
SMS Short Message Service
OTP One-Time Password
UI User Interface
Executive summary
Technologies will help banks to cut costs, increase revenue, and become more convenient for
customers (Halperin, 2001). According to Abid and Noreen (2006), electronic banking
vii
outlined as any use of knowledge and communication technology and electronic means that
by a bank to conduct transactions and interact with stakeholders. Ainscough and Luckett
(1996) stated that provision of customer interactivity is an important criterion that attracts
users in the delivery of E-banking. Gerrard and Cunningham (2003) identified other factors
of paramount importance in ensuring the success of E-banking, i.e. the ability of an
innovation to meet users' needs using different feature availability on the web site.
Hoyer (2001) expressed that satisfaction can be associated with the feelings of acceptance,
happiness, relief, excitement and delight. In a competitive marketplace, where businesses
compete for customers, customer satisfaction is seen as a key differentiator and increasingly
has become a key element of business strategy. The link between E-banking privacy and
security and E-banking loyalty was proved as fully mediated by E-banking satisfaction;
however, indirect effect of the reliability and website design with E-banking loyalty was
partially mediated (Haq and Awan, 2020). When it comes to commercial banks, customer
satisfaction level differentiates one bank from another, thus measuring customer satisfaction
is exceedingly important (Zopounidis, 2012).
The major objective of this study is to determine the impact of convenience, reliability, ease
of use, security and privacy, time saving, perceived benefits with customer satisfaction in
Nepalese commercial banks. The specific objectives of this study are: to analyze the impact
of convenience, reliability, ease of use, security and privacy, time saving, perceived benefits
with customer satisfaction in Nepalese commercial banks, to determine the relationship of
convenience, reliability, ease of use, security and privacy, time saving, perceived benefits
with customer satisfaction in Nepalese commercial banks, to assess the impact of
convenience, reliability, ease of use, security and privacy, time saving, perceived benefits on
customer satisfaction and to examine the most significant factor that affects customer
satisfaction in Nepalese commercial banks.
The study is based on primary data from 121 respondents. To achieve the purpose of the
study, structured questionnaire is prepared. The Likert scale on different variables like
overall customer satisfaction measured in 5-point Likert scale and weighted mean value of
each variable were used to examine the relationship between dependent and independent
variables. The study employed number of statistical and economic tools such as regression
analysis and correlation analysis, to analyze the relationship trend between the customer
viii
satisfaction of banks and factors of E-banking services. Statistical package for social science
(SPSS) software is used to analyze the data and to get the required information and results.
The major conclusion of this study is that higher the convenience, reliability, ease of use,
security and privacy, time saving and perceived benefits, higher would be the customer
satisfaction in Nepalese commercial banks. The study also concludes that the most
influencing factor is reliability followed by convenience and security and privacy that
explains the level of customer satisfaction on Nepalese commercial banks.
ix
Chapter I
Introduction
1.1 General background
Technology has succeeded in making various aspects of life easier for the societies of today
(Rust and Oliver, 1994). More importantly, it has become a fundamental element in
improving the quality of services in general and E-banking services in particular (Joseph and
Stone, 2003). E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels (Shahriari, 2014). Digital banking is always a preference for account holders
nowadays (Singh et al., 2017). All banks, especially large banks and mutual banks, have
gradually increased the number of Internet banking services available to customers over the
past decades (Momeni, 2013). Internet-enabled electronic banking systems offer faster
information exchange between customers and service providers, setting them apart from
traditional banking operations (Singhal and Padhmanabhan, 2008).
Consumer satisfaction is a phenomenon of particular importance in the evaluation process of

a shopping, consumption, or product or service user experience and is therefore vital in long-
term consumer responses (Grönroos, 1991). Satisfaction means a feeling of pleasure because
one has something or has achieved something. Satisfaction is an action of fulfilling a need,
desire, demand or expectation (Magesh, 2010).
E-banking means the process through which a customer digitally interacts with a bank via
computers without the need of human contact (Jayawardhena, 2004). Banking sectors in most
developed countries have pioneered the area of e-services and have been actively involved in
its continuous improvement. The Lebanese banking sector, the core of the Lebanese
economy, has been witnessing unprecedented growth, especially with regard to electronic
services (Fakhoury and Aubert, 2015). E-banking includes the systems that enable financial
institutions, customers, individuals and businesses to access accounts, transact business or
obtain information on financial products and services through a network including the
Internet (Rotchanakitumnuai and Speece, 2003).
The foundation of banking services lies in the trust factor among the banks and consumers
with the ultimate goal to provide quality services at lesser transaction costs (Shankar and
Jebarajakirthy, 2019). Trust and loyalty hold great importance in electronic environments
1
(Chaudhry et al., 2009). Service quality, on the other hand, has a favorable link with
customer retention (Friman and Edvardsson, 2003). Younger, more educated, and higher-
income customers were found to be more likely to adopt E-banking services than older, less
educated, and lower-income customers (Buretta, 2019). Sadeghi and Heidarzadeh (2010)
found that those who use electronic banking services in Iran have a higher educational
background and more educated people utilize electronic banking services more frequently
than others
Almost all banks in Ethiopia now use E-banking to improve the quality of banking services.
E-banking also improves customer satisfaction in banking (Shittu, 2010). Bank executives
understand that customer satisfaction with service quality is the source of bank
competitiveness and profitability (Amoah-Mensah and Aborampah, 2010). The art of
marketing today is that the customer is both a companion within the company and a supporter
outside the company. Meanwhile, customer engagement occupies a special place (Luis et al.,
2008). The study found that businesses strive to build long-term relationships with consumers
to earn loyalty and increase profitability and loyalty. The availability of several E-banking
countries wide has greatly improved the quality and convenience of service delivery however
researchers have stated that users’ satisfaction is an essential determinant of success of the
technology-based delivery channels (Tong, 2009). According to Qureshi et al. (2008), the
major reasons for moving to the adoption of E-banking services are perceived usefulness,
perceived ease of use, security and privacy of online banking.
The banking sector has followed the recent trends in mobile communications by adopting
wireless banking applications for financial transactions and bank account management (Luarn
and Lin, 2005). Internet banking enables speedy transaction access, and time and money
savings while providing paper-free, complete and up-to-date transactions (Wright and
Ralston, 2002). Banks, in general, have attempted to build customer satisfaction through
providing better products and services, and at the same time, reducing operating costs
(Padachi et al., 2007). Thus, the banking industry has been innovative and receptive to new
technological development in the financial service industry. The latest innovation is Internet
banking (Ozdemir et al., 2008).
Many banks want to invest in ATMs to reduce branch costs since customers prefer to use
them instead of a branch to transact business (Wise and Ali, 2009). It is important to analyze
whether or not the banks show their innovativeness by offering new features to attract
2
customers through their banking interfaces and websites in a user-friendly manner with the
aim to improve customer satisfaction and the overall success of the bank (Nochai, 2013).
Casaló et al. (2008) revealed that higher levels of website usability might lead to higher levels
of consumer affective commitment to the website. The study also revealed that customer
satisfaction leads to direct, positive and significant relationship between satisfaction in
previous interactions and the consumer commitment to a financial services website.
Reliability, privacy, security, website design, and customer service and support as the main
dimensions of E-banking service quality and customer satisfaction (Amin, 2016). The use
of E-banking services improves customer satisfaction in the banking sector. They derive a
simpler formula and conclude that higher customer satisfaction is highly dependent on
receiving better and higher quality service (Asiyanbi and Ishola, 2018). Customers seek
professional E-banking assistance and support if they have problems using E-banking
services (Blut et al., 2015). Customers are more likely to trust service providers when they
receive prompt replies to their questions and can clearly see that the service provider has a
hassle-free and transparent recovery policy (Quach et al., 2016).
In the context of Nepal, it is crucial to give increased attention to the cooperative model in
order to strengthen existing cooperatives and establish new ones, particularly in remote rural
communities (Simkhada, 2013). The study found that digital finance enhances the services
offered by banking and financial institutions, thereby playing a positive role in promoting
financial accessibility. The study also found that consumers are drawn to electronic banking
services due to their convenience and time-saving nature. The rise in internet banking usage
has also resulted in an increase in the number of customers (Khatri and Dhungel, 2013). The
study further suggested that advancements in technology and research are encouraging people
to engage with banking and financial institutions.
Electronic banking is both a profitable business and a service, but it also carries risks for
customers and banks. E-banking is crucial to understand what customers' desire and what
financial institutions are providing (Banstola, 2007). Banstola (2012) discovered that
Nepalese banks employ E-banking for their own convenience and to retain existing
customers. The study did not find any significant correlation between the use of E-banking
and customer gender, marital status, or salary and most important factors that influenced
customers to utilize E-banking services were reliability and ease of use. Manju (2020)
revealed that online banks should prioritize customer perception of online banking services
3
since the benefits of competitive services can be easily measured. The study concluded that
banks should initiate meaningful conversations with customers and provide them with a top-
quality online experience.
Upadhya and Dhungel (2012) revealed that banks and financial institutions in Nepal offer
limited services through internet banking facilities. The study emphasized the need for
improvements in internet banking applications and the user environment. Banks should not
merely focus on adopting new technology but also on encouraging customers to embrace
internet banking. Gadal (2022) found that the internet banking service has a significant
positive effect on customer satisfaction. The study also found that the commercial banks are
satisfied their customers by improving service quality and increasing the number of ATMs
service. Ghimire (2022) found that customers who have positive experiences with digital
banking were more likely to continue using it in the future. The study concluded that
commercial banks should focus on expanding digital banking awareness, developing digital
banking literacy, and maintaining the security of digital banking services in order to boost
digital banking.
Bhandari et al. (2021) found that those who have accounts with private banks are happier in
numerous dimensions than customers who have accounts with public banks. The also study
found that private bank customers had a higher level of satisfaction compared to public bank
customer. The study found that private banks scored higher than public banks in all of these
factors, except for staff behavior. Gaudel (2021) showed that security and personalization had
positive significant impact on the customer satisfaction in Nepal. Badu (2018) concluded that
quick response of internet banking impact customer satisfaction to a great extent. The study
also showed that many customers use internet banking because it is easy to use and time
saving.
Khatri and Dhungel (2013) stated that most of the customers of banks with their account
holders involving using internet have knowledge on internet banking offered by banks but
customers have no practice of using such internet services. The study concluded that level of
security, advantages of internet banking and customers’ habit remained core causes behind
less use of internet banking by their customers. Pathak et al. (2022) showed that speed of
delivery, ease of use, reliability, privacy and security, enjoyment and control have positive
impact on customer satisfaction in Nepalese commercial banks. The study concluded that
internet banking service quality has a significant role in enhancing the level of customer
4
satisfaction in Nepalese commercial banks. The study also concluded that reliability followed
by speed of delivery is the most influencing factor that explains the change in the level of
customer satisfaction in Nepalese commercial banks. Similarly, Khatiwada (2022) revealed
that internet security and privacy, website design, responsiveness, system availability and
reliability have positive impact on customer satisfaction. The study found that the most
important factor influencing customer satisfaction in Nepalese commercial banks is internet
security and privacy followed by responsiveness.
The above discussion shows that the studies dealing with the impact of E-banking practices
on customer satisfaction on commercial banks are of greater significance. Hence, this study
attempts to analyze the impact of E-banking practices on customer satisfaction on Nepalese
commercial banks.
1.2 Statement of the problem
In the past, customers demand for banking services was driven basically by safety of their
monies as well as interest subsequent from such savings. However, the present day
customers’ demand has shifted from just safety of money to how banks deliver their services.
The reason is that the present day customer requires efficient, fast and convenient services
(Kwashie, 2012). According to Zeithmal et al. (1990), the provision of quality being with the
help of teachings and principles guided products and services to clients is the most important
to banking industry- improved outcomes from service delivery require better
governance, including mechanisms for holding service providers accountable and
appropriate incentives for performance.
When it comes to commercial banks, customer satisfaction level differentiates one bank from
another, thus measuring customer satisfaction is exceedingly important (Zopounidis, 2012).
The link between E-banking privacy and security and E-banking loyalty was proved as fully
mediated by E-banking satisfaction; however, indirect effect of the reliability and website
design with E-banking loyalty was partially mediated (Haq and Awan, 2020). Das and Ravi
(2021) found that Service quality dimensions of Reliability, Security and privacy, Website
design and Responsiveness, and communications affects positively to customer satisfaction in
E-banking services. The study also added that among young people, website design is the
most important dimension than others. They trusted banks’ online transactions and gives
lesser importance to security and privacy, reliability and responsiveness and communication.
5
According to (Parasuraman et al,
1985and Zeithmal et al, 1990) the
provision of quality being with the
help of teachings and principles
guided products and services to
clients is the
most important to banking
industry. improved outcomes from
service delivery require better
governance,
including mechanisms for holding
service providers accountable and
appropriate incentives for
performance.
clients is the
6
governance,
performance.
clients is the
governance,
7
performance.
innovation to meet users' needs using different feature availability on the web site.
has become a key element of business strategy. Wind (2001) demonstrated that numerous
banks are roused to actualize E-banking by components identifying with augmenting their
profit through expansion market scope. Parasuraman et al. (1985) found that service delivery
must be reliable to the customer to perform the promised service dependably and accurately.
Mosahab et al. (2010) conducted an empirical study in Tehran, Iran and found out that
customer expectations are always higher and service offered by banking is low as well as
customer satisfaction can play role of mediator that bridges gap between service quality and
customer loyalty. Siddiqi (2011) found that service quality is positively related to customer
satisfactions in banking sector in Bangladesh.
Kassa (2012) examined the effect of customer service quality on customer satisfaction in
selected private banks in Addis Ababa. The study indicated that, except responsiveness the
four service quality dimensions (tangibility, assurance, empathy and reliability) have positive
and significant relationship with customer satisfaction. The study also indicated that
customers were most satisfied with the assurance dimensions of service quality. Ha and Jang
(2009) found that equally well, dissatisfied customers are more likely to tell another ten
people about their unfortunate experiences with a particular organization.
Parasuraman et al. (2002) stated that reliability is the ability of the service provider to
perform the promised services accurately and consistently. The study found that the E-
8
banking service quality directly linked with reliability features a significant effect on the
degree of customer satisfaction. The study also found that well-timed transaction processing
and a precise billing system are the key success factors of E-banking which helps to retain
customers with this platform. Ghost and Gnanadhas (2011) found quality in service is very
important especially for the growth and development of service sector business enterprise. It
works as an antecedent of customer's satisfaction. Yohannes (2010) noted that on the title of
“key factors that determine adoption of internet banking in Ethiopia”; 85 percent the
respondents answered that internet banking enables them to manage their account better than
the ordinary banking, occupation has an impact on the adoption of internet banking as well as
demographic factors have a relationship with the adoption of internet banking and education
levels.
In the context of Nepal, Pradhananga (2014) argued that through the satisfied customers, a
bank can easily measure the effectiveness of the business, its potential and position in the
industries and the areas that are needed to polish and improve. But gathering a satisfied
customer is not an overnight miracle but with the full of patience and bountiful of effort.
There is positive relationship between four dimensions and level of customer satisfaction
(Belbase and Paudel, 2023). The study revealed that, security was the most impactful variable
on satisfaction of customers from E-banking.
Khatri et al. (2012) revealed that limited services were provided by the bank and financial
institutions through internet banking facilities. The improvements were certainly needed in
the internet banking application and environment of use; banks should not merely focus on
adaptation of the new technology but should also focus on encouraging customers towards
using the internet banking. Paudel et al. (2020) found that the consumers' age, gender,
education level, and wealth had a substantial influence on their view of banking
communication. The study also found that trustworthiness has the most significant influence
on customers' perception of banking communication. Ghimire (2022) found that commercial
bank clients in Nepal have a modest degree of digital banking adoption, but there are issues
such as security concerns, a lack of trust in digital banking, and a lack of digital banking
knowledge. The study also found that customers who had positive experiences with digital
banking were more likely to continue using it in the future.
Pradhan et al. (2021) found that automated teller machine has a positive impact on financial
inclusion which indicated increase in financial inclusion. The study also found several
9
challenges for E-banking in promoting financial inclusion in Nepal that includes lack of
awareness and education about E-banking services, low levels of trust and security among
customers, and a lack of infrastructure in some areas, such as reliable internet connectivity.
E-banking services has impact in improving customer satisfaction, impact in reducing waiting
time for customers to get bank services and impact in improving customers to control their
account movements (Maharjan, 2021). Bist (2020) showed that awareness, responsiveness,
reliability, ease of use, trust and privacy have positive impact on customer satisfaction. The
study concluded that privacy followed by responsiveness is the most influencing factor that
explains customer satisfaction towards e-banking services in Nepalese commercial banks.
Through there are above mentioned empirical evidences in the context of other countries and
in Nepal, no much findings using more recent data exist in the context of Nepal. Therefore, in
order to support one view or the other, this study has been concluded. Hence, this study
focuses on the impact of convenience, reliability, ease of use, security and privacy, time
saving, perceived benefits on customer satisfaction and service quality of the Nepalese
commercial banks. Therefore, this study deals with the following issues in the context of
Nepalese commercial banks:
1. What is the perception regarding convenience, reliability, ease of use, security and
privacy, time saving, perceived benefits with customer satisfaction ?
2. Is there any correlation of convenience, reliability, ease of use, security and privacy,
time saving, perceived benefits with customer satisfaction in Nepalese commercial
banks?
3. What is the impact of convenience, reliability, ease of use, security and privacy, time
saving, perceived benefits with customer satisfaction in Nepalese commercial banks?
4. Do convenience, reliability, ease of use, security and privacy, time saving, perceived
benefits have significant impact on customer satisfaction in Nepalese commercial
banks?
5. Whether convenience, reliability, ease of use, security and privacy, time saving,
perceived benefits are correlated with customer satisfaction?
6. What is the relationship on convenience, reliability, ease of use, security and privacy,
time saving, perceived benefits with customer satisfaction?
7. Which factors among convenience, reliability, ease of use, security and privacy, time
saving and perceived benefits need to be improved to enhance customer satisfaction?
10
8. Which is the most significant factor that affects customer satisfaction in Nepalese
commercial banks?
1.3 Objective of the study
The major objective of this study is to determine the impact of E-banking practices on
customer satisfaction in Nepalese commercial banks. The specific objectives of this study are
as follows:
1. To analyze the impact of convenience, reliability, ease of use, security and privacy,
time saving, perceived benefits with customer satisfaction in Nepalese commercial
banks.
2. To determine the relationship of convenience, reliability, ease of use, security and
privacy, time saving, perceived benefits with customer satisfaction in Nepalese
commercial banks.
3. To assess the impact of convenience, reliability, ease of use, security and privacy, time
saving, perceived benefits on customer satisfaction
4. To examine the most significant factor that impacts of E-banking practices on
customer satisfaction in Nepalese commercial banks.
1.4 Significance of the study
The study is conducted to understand the impact of E-banking practices on customer

satisfaction in Nepalese commercial banks. This study is based on past studies and other
literatures obtained from the various sources. Today, E-banking is becoming popular for its
service quality: Convenience, accessibility, time-saving features, expanded services, security
measures, technological advancements, cost-effectiveness, and alignment with digitalization
trends. This study is expected to provide some important knowledge about the factor’s
affecting on customer satisfaction from E-Banking services in Nepalese commercial banks.
This study also helps to know about the current situation of E-Banking service quality and
customer satisfaction. This study is expected to help the banking sector to assess the impact
of online banking service on customer satisfaction and to know how they can improve their
service that they provide to the customers. This study helps in gaining a deeper understanding
of how digital banking services influence customer perceptions, experiences, and overall
satisfaction levels.
The results of the study showed that there is a significant correlation on convenience,
reliability, ease of use, security and privacy, time saving, perceived benefits with customer
11
satisfaction on Nepalese commercial banks. The study aids in enhancing customer
satisfaction by identifying areas where banks can improve their e-banking services.
Additionally, the study provides valuable guidance on how banks can leverage e-banking
services to enhance customer satisfaction, thereby strengthening customer loyalty and
retention.
The outcome of this study will provide evidence for other banks to improve upon their
electronic banking services so that prospective customers will have better experience with the
service. The study is expected and hoped that the findings would contribution and the other
relevant issues. Finally, as there is limited research on this topic in Nepal, the study can serve
as a reference for future studies and contribute to the body of knowledge on E-banking and
customer satisfaction in the region.
1.5 Review of literature
A literature review is an in-depth evaluation and analysis of existing literature, research

articles, books, and other materials on a given topic or research question. It entails seeking
and evaluating relevant literature, summarizing and synthesizing the findings, and detecting
gaps or discrepancies in previous research. This section provides a comprehensive overview
of the literature on the impact of E-banking practices on customer satisfaction in Nepalese
commercial banks. A literature review's goal is to provide a full and up-to-date understanding
of the existing research on a specific issue. It can help to identify gaps in the literature and
suggest avenues for future research, and it can also inform the development of research
hypotheses or the design of a research study. A thorough literature study can serve as a solid
foundation for additional investigation, assist in making decisions, and enhance knowledge in
a given area. The review of literature has been organized as follows:
1. Review of major literature

2. Review of recent literature
3. Review of Nepalese literature
1.5.1 Review of past literature
The review of major literature related to the impact of E-banking practices on customer
satisfaction in Nepalese commercial banks is summarized in Table 1.1.
Zhao and Saha (2005) explored the relationship between online service quality and customer
satisfaction at the Department of Business Administration and Social Sciences at Luleå
12
University of Technology, Sweden. 308 internet banking customers were taken as sample
who had used online banking services at least once in the past six months. The second section
of the questionnaire was based on the E-S-QUAL model, which measures service quality
based on four dimensions: efficiency, fulfillment, system availability, and privacy. The data
was analyzed using multiple regression analysis to examine the relationship between online
service quality and customer satisfaction. The study developed a conceptual framework of
online service quality that includes six dimensions: Website design, reliability,
responsiveness, security/privacy, personalization and tangibles. The study found that website
design, reliability, and responsiveness were the most critical dimensions of online service
quality that influence customer satisfaction. The study also found that improving online
service quality can enhance customer satisfaction and loyalty.
Table 1.1: Review of past literature
Study Major findings

Zhao and Shao (2005) Online service quality can enhance customer satisfaction and loyalty.
Lichtenstein and Individual characteristics, such as personality, values, and attitudes, may
Williamson (2006) be more important in understanding adoption behavior.
Jahiruddin and Haque Customers placed the highest priority on convenience factors, i.e.
(2009) responsiveness and assurance factors in the SERVQUAL model.
Sadeghi and Persons with higher educational background tends to use better electronic
Heidarzadeh Hanzaee banking services in Iran.
(2010)
Mosahab et al. (2010) Customer satisfaction plays the role of a mediator in the effects of service
quality on service loyalty.
Ahmad and Al-Zu’bi E-banking functionality has a positive and significant effect on customer
(2011) satisfaction outcome.
Kumbhar (2011) Banks should focus on improving the reliability, security, website design,
ease of use, and responsiveness of their E-banking services to enhance
customer satisfaction.
Zafar M et al. (2011) Banks should focus on improving the quality of their online services to
enhance customer satisfaction and loyalty.
Kawamala (2013) Customers prefer ATM among the E-banking products because of its
effectiveness and user friendliness. It was recommended that education
and marketing of E-banking products should be encouraged in the bank to
attract more customers.
Raza and Hassan The service quality dimension such as privacy, security, reliability etc.
(2015) indicate that there is a positive significant relationship between service
quality and customer satisfaction in Islamic banks.
Lichtenstein and Williamson (2006) examined the Australian banking consumer experiences
with the adoption of internet banking. The study employed a qualitative research method
using in-depth interviews with 25 Australian consumers who had adopted internet banking
services provided by various Australian banks. The interviews focused on understanding the
consumers' experiences, attitudes, and perceptions towards internet banking. The results
13
showed that customers are accepting more risk in relation to internet-based services, and that
providing extensive levels of customer assistance for such services is becoming increasingly
crucial. The study found that perceived risk and trust are the most significant factors affecting
internet banking adoption, followed by perceived benefits and ease of use. The study also
found that some individuals may resist internet banking adoption due to a lack of trust in
technology or concerns about security. The study concluded that banks will be better
equipped to manage customers' transitions to online banking if they recognize that such
experiences entail a process of adjustment and learning over time, and not simply the
adoption of a new technology.
Jahiruddin and Haque (2009) examined the patterns of preferences and the relative weight of
various criteria for consumers when choosing their favorite banks, and conducted a survey of
198 bank customers in Khulna, the third largest city in Bangladesh. The study was based on
the primary data. The data obtained from the questionnaire survey were analyzed through
SPSS. The instruments were descriptive statistics and inferential statistics. The study found
that demographic factors, such as age, income, education, and occupation, have a significant
effect on bank selection criteria. The study showed that reputation was the most important
factor in bank selection, followed by service quality and convenience. Interest rates and fees
and charges were found to be less important in influencing bank selection. The study
concluded that convenience factors, such as responsiveness and assurance, were the most
important criteria for customers when selecting their preferred bank.
Mosahab et al. (2010) examined the relationship between service quality, customer
satisfaction, and customer loyalty, with a focus on the mediating role of customer
satisfaction. The study used a quantitative research design to investigate the relationship
between service quality, customer satisfaction, and customer loyalty. The study has taken
sample of 147 customers of the bank. The study used structural equation modeling (SEM) to
analyze the data and test the relationships between the variables. The study's findings were
supported by various statistical tests, including confirmatory factor analysis (CFA) to assess
the validity and reliability of the questionnaire items, as well as multiple regression analysis
to test the relationships between the variables. The study found that customer satisfaction
partially mediates the relationship between service quality and loyalty. The study concluded
that the customer satisfaction plays the role of a mediator in the effects of service quality on
service loyalty.
14
Sadeghi and Heidarzadeh (2010) investigated the elements that influence customer
satisfaction with electronic banking services in Iran. The study employed a questionnaire to
collect data from 400 online banking customers in Iran. The questionnaire consisted of 29
items that measure seven dimensions of customer satisfaction with online banking services.
The collected data were then analyzed using exploratory factor analysis and regression
analysis. Factor analysis and structural equation modeling (SEM) were used to analyze data
and identify factors effective in helping consumers feel satisfied with electronic banking
services in Iran. The study identified five factors that significantly affect customer
satisfaction with online banking services in Iran: reliability, convenience, responsiveness,
privacy, and website design. The study found that reliability was the most important factor in
influencing customer satisfaction, followed by convenience and responsiveness. The study
concluded that those who use electronic banking services in Iran have a higher educational
background and more educated people utilize electronic banking services more frequently
than others.
Ahmad and Al-Zu’bi (2011) investigated the relationship between E-banking functionality
and customer satisfaction outcomes in the Jordanian banking sector. A purposive sampling
technique was employed to recruit 179 customers representing the desired range of
demographic characteristics (e.g. gender, age, and computer use), previous internet
experience levels and product-related knowledge. The data was collected from E-banking
users in Jordan by distributing a questionnaire through email, social networks, and in-person
interviews. The questionnaire design was pre-tested and redesigned through personal
interviews with bank managers and banks customers by undertaking the pilot study work.
The study found that E-banking capability has a favorable and significant impact on customer
satisfaction results. The study also found that customer satisfaction is positively associated
with customer loyalty and willingness to recommend the bank to others.
Kumbhar (2011) determined the factor affecting customer satisfaction in E-banking services
in Indian banks. The study was conducted using a survey method with a sample size of 120
respondents from six different Indian banks. The data was analyzed using statistical
techniques such as factor analysis and regression analysis to analyze the data. The adjusted
R-squared value of the model was 0.62, indicating that the model explains 62 percent of the
variance in customer satisfaction. The primary criteria that determined consumer satisfaction
with E-banking services were dependability, security, website design, simplicity of use, and
responsiveness. The study found that ease of use, security, responsiveness and reliability
15
were the most critical factors influencing customer satisfaction. The study also found that age
and education level of the customers have significant effect on their satisfaction with E-
banking services.
Zafar M et al. (2011) examined the impact of online service quality on customer satisfaction
in the banking sector of Pakistan. The study conducted a survey of 250 customers of different
banks operating in Pakistan who had used online banking services in the past six months. The
study was conducted using descriptive statistics, factor analysis and regression analysis to
analyze the data. The data was collected through a self-administered questionnaire that was
distributed to the participants. The questionnaire consisted of two sections, the first section
collected demographic information about the participants, and the second section measured
their perceptions of online service quality and customer satisfaction. The study found that E-
banking services have a significant positive impact on customer satisfaction and loyalty. The
study showed that website design, ease of use, responsiveness, reliability, and security had
significantly influenced online service quality, which in turn impacts customer satisfaction.
Among these dimensions, website design and reliability were found to have the most
significant impact on customer satisfaction.
Kawamala (2013) examined the impact of E-banking and customer satisfaction in Tanzanian
Banks. The study collected data from 58.5 percent male and 41.5 percent female respondents
using mixed-methods research approach, combining both quantitative and qualitative data
collection methods. The quantitative data was gathered through a survey questionnaire
administered to 100 customers of Azania Bank Ltd. who use E-banking services. The
qualitative data was collected through in-depth interviews with five senior managers of the
bank. The study identified various risks associated with E-banking, including operational,
legal, reputation, and security risks. The study revealed different factors causes Azania bank
to adopt E-banking system such as Government support, availabilities of the equipment’s,
customer's satisfaction on their needs, competition, perceived ease of use and usefulness, trust
and security, level of education and income level. The study also revealed that more than (60
percent) of customers were satisfied with E-banking system in the Azania Bank.
Raza and Hassan (2015) analyzed customer satisfaction factors with online banking services
in an Islamic country. The data collected through the survey was analyzed using various
statistical techniques such as factor analysis, reliability analysis, and regression analysis. A
survey research questionnaire of 30 items had been adopted, and the data of 400 respondents
16
were collected from the users of Internet banking of different banks located in Karachi city of
Pakistan. Data was primarily analyzed based on a quantitative survey approach. The
interviews were recorded, transcribed, and analyzed using a thematic analysis approach. The
study concluded that service quality can be measured in the dimensions of SERVQUAL
model as; Tangibility, reliability, responsiveness, assurance, and empathy. The study found
that satisfied customers are more likely to continue using internet banking services and
recommend them to others. The study also found that customer satisfaction with internet
banking is positively related to customer loyalty. The study also showed that the regression
analysis indicates a significant positive relationship between assurance, tangibility, reliability
and responsiveness with customer satisfaction.
1.5.2 Review of current literature
Table 1.2: Review of recent literature

Ogollah et al. (2016) Customer happiness is substantially influenced by flexibility, usability,
and customized internet banking.
Buretta (2019) Younger, more educated, and higher-income customers are more likely to
adopt E-banking services than older, less educated, and lower-income
customers.
Haq and Awan (2020) E-satisfaction fully mediates the relationship between E-banking service
quality and e-loyalty, indicating that customer satisfaction with E-banking
services is a critical determinant of their loyalty to the bank.
Sharma et al. (2020) Younger and more educated customers were found to be more satisfied
with E-banking services than older and less educated customers.
Fianto (2021) The key elements influencing the quality of mobile banking services are
dependability, responsiveness, security, and empathy.
Reddy (2021) E-banking is improving service quality and strengthening the banking
sector by increasing customer satisfaction, productivity, cost reduction,
and settlement speed.
Das and Ravi's (2021) E-banking service quality has a positive impact on customer satisfaction,
with the dimensions of reliability and responsiveness having the strongest
effect.
Yau et al. (2021) E-service quality enhances the increase in customer happiness and loyalty.
Heidy et al. (2022) Customer satisfaction is found to have a positive and significant impact on
loyalty.
Rajasekhar (2022) Customer satisfaction is highly followed by responsiveness, empathy,
website quality, and security.
Ogollah et al. (2016) investigated the determinant factors that effect of electronic banking on
customer satisfaction in first-tier banks in Nairobi, Kenya. The study collected data from 384
17
customers of first-tier banks in Nairobi through a self-administered questionnaire. The
questionnaire included questions related to electronic banking, customer satisfaction, service
quality, perceived value, and trust. The second section of the questionnaire measured
electronic banking on four dimensions: convenience, security, reliability, and responsiveness.
Participants were asked to rate their level of agreement with each statement on a Likert scale
ranging from 1 (strongly disagree) to 5 (strongly agree). The result showed that point of sale
systems were last in importance to customer satisfaction, coming in third after automated
teller machines (ATMs) and mobile banking. The study concluded that customer happiness is
substantially influenced by flexibility, usability, and customized internet banking.
Buretta (2019) investigated the impact of E-banking on customer satisfaction in Tanzania.

The author collected data through a survey of 150 respondents who were customers of CRDB
Bank in Azikiwe branch in Dar es Salaam. The data collected through the survey
questionnaire was analyzed using descriptive statistics and regression analysis, while the
qualitative data from the interviews was analyzed using content analysis. The study showed
that E-banking has a significant positive impact on customer satisfaction. The study found
that customers of CRDB Bank Azikiwe branch in Dar es Salaam are generally satisfied with
E-banking services. The study concluded that younger, more educated, and higher-income
customers were found to be more likely to adopt E-banking services than older, less educated,
and lower-income customers. The also study concluded that the factors that have the most
significant impact on customer satisfaction with E-banking services are reliability,
responsiveness, and security.
Haq and Awan (2020) examined the E-banking procedures that affect consumer happiness.
The data was collected through an adapted questionnaire by using emails and messaging
applications. The database of a local marketing company in Pakistan was used, and 976
responses were included in the analysis. The structured equation modeling was used to test
the propositions of the study. The research found that the quality of the E-banking services
significantly increases e-satisfaction, which in turn significantly increases e-loyalty. The
study showed that E-banking service quality had a positive and significant impact on e-
satisfaction, and e-satisfaction had a positive and significant impact on e-loyalty. The study
concluded the value of high-quality E-banking services in preserving client loyalty in
emergency situations like the pandemic. The study also concluded that there is a strong
relationship between service quality and customer satisfaction in the context of E-banking,
particularly mobile banking.
18
Sharma et al. (2020) investigated the relationship between E-banking service quality and
customer satisfaction. The study collected data from a sample of 200 customers of various
banks in India who had used E-banking services. A questionnaire was utilized in the study to
assess customer satisfaction and the quality of E-banking services across five dimensions:
Website quality, reliability, security, responsiveness, and empathy. The study revealed that
the quality of E-banking services had a considerable impact on consumer satisfaction, with
empathy having the greatest impact. The study found that age, income, and education all had
an impact on customer satisfaction with E-banking services. The study also found that the
overall regression model has been a reasonable fit and there is a statistically significant
association between service quality dimension and customer satisfaction. The study
concluded that banks should prioritize enhancing the quality of E-banking services,
particularly in the aspects of empathy and responsiveness, in order to increase customer
happiness and retention as well as consumers who are younger and more educated are happier
with E-banking services than consumers who are older and less educated.
Fianto (2021) investigated the relationship between mobile banking service quality and
customer satisfaction in Indonesian Islamic banks. This study used 100 respondents who
were Islamic mobile banking users in Indonesia and applied the Partial Least Square for
Structural Equation Modeling (PLS-SEM) approach. The respondents were selected using a
non-probability sampling method, specifically convenience sampling. The study revealed that
the key elements influencing the quality of mobile banking services were dependability,
responsiveness, security, and empathy. The survey realized the insightful information about
the value of high-quality mobile banking services in raising client satisfaction in Indonesian
Islamic banks. The study showed that customer satisfaction in Indonesian Islamic banks is
positively and significantly impacted by the quality of mobile banking services. The study
concluded that a strong positive relationship between mobile banking service quality and
customer satisfaction in the context of Indonesian Islamic banks.
Reddy (2021) indicated the relationship between the dimensions of E-banking service quality
and customer satisfaction to determine which dimension can potentially have the strongest
influence on customer satisfaction. The study used a quantitative method, with a survey
issued to bank clients in Lebanon and data analyzed using SEM with AMOS. The research
revealed that the four independent factors (reliability, security and privacy, responsiveness
and communication, efficiency and simplicity of use) are connected to the quality of -banking
services. The study also demonstrated that in the Lebanese banking industry, the use of E-
19
banking services significantly affects consumer satisfaction. The study concluded that service
quality is a component that significantly affects consumer happiness with E-banking services,
and that dependability is the aspect of service quality that has the most impact on customer
satisfaction.
Das and Ravi's (2021) investigated the impact of E-banking service quality on customer
satisfaction" investigated the impact of E-banking service quality on customer satisfaction.
The data for the study was gathered through a survey of bank customers in India, and
regression analysis was utilized to examine the association between E-banking service quality
and customer happiness. Primary data was collected through an online questionnaire. A total
of 149 responses to the questionnaires were collected. Correlation, Regression, ANOVA and
Weighted average tests are used for data analysis. The study found that the quality of E-
banking services has a favorable impact on customer satisfaction, with the characteristics of
dependability and responsiveness having the greatest impact. This study also found that
responsiveness and communication positively affect customer satisfaction with E-banking
services. The study concluded that among the service quality dimensions of E-banking
services, Reliability has a significant positive effect on customer satisfaction.
Yau et al. (2021) investigated the impact of e-service quality dimensions on overall E-
banking service quality, customer satisfaction, and customer loyalty in the Hong Kong
banking sector. The data was gathered through a survey of Hong Kong bank customers, and
structural equation modeling was used to examine the link between e-service quality
parameters and total E-banking service quality, customer satisfaction, and loyalty. 172 valid
surveys are collected from E-banking users. The study discovered that the most important
elements of e-service quality that influenced overall E-banking service quality, customer
happiness, and loyalty were reliability, responsiveness, and website design. The study found
that the relationship between Customer Satisfaction and Customer Loyalty is also found to be
positively correlated. The study also found that the customer loyalty as an intangible asset for
the long-term development of retail banking. The study concluded that banks in Hong Kong
should focus on enhancing these aspects of e-service quality in order to increase customer
happiness and loyalty.
Heidy et al. (2022) examined the relationship between service quality, customer satisfaction,
and loyalty in BNI Mobile Banking e-customers. The study used 150 users who had been
using BNI m-banking for a long period to provide the data. Each question from the study
20
questionnaire was provided through descriptive data analysis. The research design used in
this study is a quantitative approach with a survey method. The data collected was analyzed
using Structural Equation Modeling (SEM). The study demonstrated that customer
satisfaction had a positive and significant influence on user-friendliness and efficiency,
whereas customer satisfaction had a positive and substantial impact on customer loyalty. The
study also found that the homogeneity of the sample characteristics contributed to the
disapproval of the hypothesis because the research samples were interdependent. The study
concluded that the clear and easy-to-understand user interface of the mobile banking
application increases customer satisfaction.
Rajasekhar (2022) examined the factors that may influence customer happiness in E-banking
services. A structured questionnaire was used with a sample size of 351 respondents to
evaluate customer satisfaction. Data was collected and analyzed using the descriptive
statistics, percentages, ANOVAs, correlations, and multiple regressions. The questionnaire
was designed to measure the respondents' perceptions of various E-banking service factors
such as service quality, trust, perceived value, and convenience. The data collected through
the survey questionnaire was analyzed using descriptive statistics, factor analysis, and
regression analysis. Descriptive statistics were used to summarize the demographic
characteristics of the respondents, as well as to calculate the means, standard deviations, and
correlations between the different variables. The study found that E-banking service quality,
trust, perceived value, and convenience have a significant positive impact on customer
satisfaction. The study also found that perceived value is the most important factor that
influences customer satisfaction, followed by service quality, trust, and convenience.
1.5.3 Review of Nepalese literature
Table 1.3: Review of Nepalese literature

Paudel et al. (2020) Consumers' age, gender, education level, and wealth had a substantial
influence on their view of banking communication.
Dhakal (2020) Lack of adequate staffing and inadequate training of staff as the primary
reasons for dissatisfaction with the service quality.
Shrestha (2020) Security and information had a significant positive high correlation with
customer satisfaction.
Maharjan (2021) Customers who use electronic banking services more regularly are more
satisfied with the services offered by banks.
21
Pradhan et al. ATM machines improve financial inclusion, mobile banking improves
(2021) financial inclusion, internet banking improves financial inclusion, agency
banking improves financial inclusion, and point of sale improves financial
inclusion.
Bhandari et al. Clients having accounts with private banks are happier in numerous
(2021) dimensions than customers who have accounts with public banks
Gadal (2022) Commercial banks in Nepal and other developing countries should invest in
developing and promoting alternative banking channels to meet the evolving
needs of their customers and improve customer satisfaction.
Ghimire (2022) Commercial banks focus on expanding digital banking awareness,
developing digital banking literacy, and maintaining the security of digital
banking services.
Paudel et al. (2020) analyzed the elements that influence customers' views of banking
communication in the setting of Nepalese commercial banks. The study employed a
quantitative research approach, with data obtained via a survey questionnaire from 384
Nepalese commercial bank clients. The acquired data was analyzed using statistical
approaches such as exploratory factor analysis, correlation analysis, and multiple regression
analysis. Customers' perceptions of banking communication in Nepali commercial banks
were shown to be highly impacted by various characteristics, including the banks' quality of
service, dependability, empathy, tangibility, and responsiveness. The study found that the
consumers' age, gender, education level, and wealth had a substantial influence on their view
of banking communication. The study also found that trustworthiness has the most significant
influence on customers' perception of banking communication. The study concluded that
banks in Nepal should focus on building trust with their customers through effective and
trustworthy communication as well as to provide empathetic, competent, and timely
communication while paying attention to the physical and visual aspects of their
communication materials.
Dhakal (2020) investigated consumers' satisfaction with Nepal Bank Limited's (NBL) service
delivery system, namely the Birendranagar Branch in Surkhet, Nepal. The study used both
primary and secondary data collection methods. The primary data collection method used in
the study was a structured questionnaire, which was designed to capture information on
customers' demographic characteristics, their satisfaction with the service delivery system,
and the factors that influence their satisfaction. The questionnaire was distributed to the
selected customers of the bank. Secondary data was collected through a review of existing
literature related to service quality and customer satisfaction in banking. The study found that
customers are relatively happy with the service delivery method, but are unsatisfied with the
waiting time and service quality. The study concluded that NBL Birendranagar Branch could
22
enhance service quality by boosting personnel numbers and giving proper training to
employees, as well as decreasing wait times by simplifying service delivery procedures and
enhancing physical facilities.
Shrestha (2020) analyzed the factors that affect consumer satisfaction towards e-payment. A
survey questionnaire was used to collect the primary data, and 150 samples were considered
for the collection. The data collected through the questionnaire was analyzed using
descriptive statistics and inferential statistic. The study used quantitative approach for
addressing the research question and for collecting and analyzing data to investigate the
factors affecting customer satisfaction with e-payment systems. The study found that several
factors affect customer satisfaction with e-payment systems, including ease of use, security,
reliability, trust, and customer support. Among these factors, ease of use was found to be the
most important factor affecting customer satisfaction with e-payment systems. The study
concluded that e-payment providers need to focus on improving the ease of use, security,
reliability, trust, and customer support of their systems to enhance customer satisfaction.
Maharjan (2021) investigated the effect of electronic banking services on customer

satisfaction in Nepalese private commercial banks. The study collected data from 322
customers of private commercial banks in Nepal. The data collected through the
questionnaire was analyzed using descriptive statistics and inferential statistics. The study
used descriptive statistics to summarize the demographic characteristics of the participants
and to describe the level of satisfaction with electronic banking services. The study found that
electronic banking services delivery has a positive and significant impact on customer
satisfaction in Nepalese private commercial banks. The study also found that internet banking
and mobile banking services have a strong positive impact on customer satisfaction, while
ATM services have a relatively weaker impact. The study concluded that electronic banking
services have a positive impact on customer satisfaction in Nepalese private commercial
banks. The study also concluded several factors that significantly influence customer
satisfaction with electronic banking services, including service quality, convenience, security,
reliability, and responsiveness.
Pradhan et al. (2021) investigated on the impact of electronic banking on financial inclusion
in Nepal. The study was based on primary data of 150 respondents and structured
questionnaire was prepared. The respondents’ views were collected on automated teller
machine, mobile banking, internet banking, point of sale terminal, agency banking and
23
financial inclusion. The study was based on descriptive and causal comparative research
designs. The study found that automated teller machine has a positive impact on financial
inclusion which indicated increase in financial inclusion. The study also found several
challenges for E-banking in promoting financial inclusion in Nepal that includes lack of
awareness and education about E-banking services, low levels of trust and security among
customers, and a lack of infrastructure in some areas, such as reliable internet connectivity.
The study concluded that better orientation of customers towards automated teller machine,
internet banking, mobile banking, agency banking and point of sale leads to increase in
financial inclusion. The study also concluded that agency banking followed by point of sale
and internet banking are the most influencing factors that determines the financial inclusion
in Nepal.
Bhandari et al. (2021) investigated consumer preferences among Kathmandu valley public
and private banks. A sample of 302 Kathmandu valley residents, mostly adults aged 20-40,
was chosen. The study was based on a descriptive cross-design in which a Customer
Satisfaction Index was created to classify customers' preferences for private and public banks.
The SERVQUAL model was used to examine the factors influencing consumers' preferences
for private and public banks. The study found that those who have accounts with private
banks are happier in numerous dimensions than customers who have accounts with public
banks. The also study found that private bank customers had a higher level of satisfaction
compared to public bank customers. The study also identified several factors that influenced
customer satisfaction, including service quality, convenience, staff behavior, and technology-
based services. The study also found that private banks scored higher than public banks in all
of these factors, except for staff behavior. 91.75 percent of respondents (95.25 percent from
public banks and 90.79 percent from private banks) stated that the difficulties that clients face
at the bank are manageable. The study concluded with a suggestion that banks should
consider demographic factors when developing marketing strategies to attract and retain
customers.
Gadal (2022) investigated the impact of alternative banking channels on customer satisfaction
in Nepalese commercial banks. This study had taken seven Nepalese commercial banks
(NSBL, NBL, Nic Asia, GBIME, NABIL, KBL, and SBL bank) to take sample. Three
hundred eighty-four (384) respondents were chosen at random from clients of the specified
institutions. Correlation and regression analysis were used to see whether there is a
significant association between alternative banking channels and consumer satisfaction. The
24
study found that the internet banking service has a significant positive effect on customer
satisfaction. The study also found that the commercial banks are satisfied their customers by
improving service quality and increasing the number of ATMs service. The study concluded
that an alternative banking channel has a considerable beneficial influence on customer
satisfaction in a commercial bank in Nepal. The study also concluded that customers of
selected commercial banks are satisfied with internet banking services but not more than
ATM, M-banking, and POS banking service.
Ghimire (2022) investigated the uptake of digital banking by commercial bank clients in
Nepal. The information was gathered using a survey questionnaire issued to 400 commercial
bank clients in Nepal. The study used a structured questionnaire as the primary data
collection method. The questionnaire was designed to capture information on customers'
demographic characteristics, their experience with digital banking, their perception of the
benefits and risks of digital banking and their intention to continue using digital banking in
the future. The study found that commercial bank clients in Nepal have a modest degree of
digital banking adoption, but there are issues such as security concerns, a lack of trust in
digital banking, and a lack of digital banking knowledge. The study also found that customers
who had positive experiences with digital banking were more likely to continue using it in the
future. The study concluded that commercial banks should focus on expanding digital
banking awareness, developing digital banking literacy, and maintaining the security of
digital banking services in order to boost digital banking.
1.6 Conceptual framework
A conceptual framework is a theoretical model or framework that guides the research process
by providing a clear understanding of the variables, concepts, and relationships that are
relevant to the study. Overall, a conceptual framework is an essential component of any
research project as it helps to ensure that the study is well-designed and rigorously executed.
It provides a structure for the research process, from the formulation of research questions to
the interpretation of findings, and helps to ensure that the study is meaningful and contributes
to the existing knowledge base in the field.
In other words, conceptual framework is a basic conceptual structure organized around a

theory. It defines the kind of variables that are ongoing to be used in the analysis. Conceptual
framework is a type of intermediate theory that attempts to connect to all aspects of inquiry
within problem definition, purpose, literature review, methodology, data collection and
25
analysis. Conceptual framework can act like maps that give coherence to empirical inquiry as
the conceptual framework are potentially so close to empirical inquiry, taking different forms
depending upon the research question or problem. This study has taken customer satisfaction
as a dependent variables and ease of use, security and privacy, time savings, perceived
benefits as independent variables in order to study the impact of E-banking practices on
customer satisfaction in Nepalese commercial banks.
26
Figure 1.1: Conceptual framework
(The conceptual framework shown in figure 1.1 elaborates the impact among dependent variable and
independent variables. Six variables are used as independent variables. The independent variables are
convenience, reliability, ease of use, security and privacy, time saving and perceived benefits. Similarly, the
dependent variable is customer satisfaction on service quality.)
Independent Variable
 Convenience (C)
 Reliability (R) Dependent Variable
 Ease of use (EU)  Customer satisfaction(CS)
 Security and privacy (S)
 Time saving (TS)
 Perceived benefits (PB)
The following figure demonstrates that the ease of use, security and privacy, time savings,
perceived benefits, customer satisfaction on service quality are utilized in this study to
evaluate the impact of electronic banking practices and services that has affected customers
satisfaction on Nepalese commercial banks. Similarly, as independent factors, convenience,
dependability, simplicity of use, security and privacy, time savings, and perceived advantages
are considered. The customer satisfaction on quality of the service is considered as dependent
factors.
1.7 Operational definitions and hypothesis
The brief discussion on how the dependent and independent variables have been used or
interpreted in this study is presented below;
1.7.1 Dependent variable
Customer satisfaction
Customer pleasure is the contributor of absolute gains of a quality revolution, which is

majorly contingent on customer’s cognizance of overall service quality (Husnain and Akhtar,
2015). Kotler (2000) revealed that customer happiness can be noted, whether they are
delighted or dissatisfied, after comparing perceptions or impressions of performance that are
below expectations. Oliver (1980) revealed that the feeling of satisfaction arises when
customers compare their perception of actual product/ service performance with expectations.
Aladwani (2001) mentioned that while the industry has moved instantly to deploy and offer
27
new banking services via e-channels for customers and in consequence the E-banking
services have boomed promptly. Oliver (1997) defined satisfaction as a judgment following a
consumption experience - it is the consumer’s judgment that a product provided (or is
providing) a pleasurable level of consumption-related fulfillment. Kotler (2000) defined
satisfaction as a person’s feelings of pleasure or disappointment resulting from comparing a
product’s perceived performance (or outcome) in relation to his or her expectations. Boateng
and Molla (2006) contend that operational constraints related to customer location, the need
to maintain customer satisfaction and the capabilities of the Bank's main software are
influential factors in motivating the decision to enter electronic banking services and
consequently influencing the usage experience and thus affecting the level of satisfaction.
According to Hansemark and Albinsson (2004), satisfaction is an overall customer attitude
towards a service provider, or an emotional reaction to the difference between what
customers anticipate and what they receive, regarding the fulfillment of some need, goal or
desire.
1.7.2 Independent variables
Convenience
Convenience is a dimension of E-banking that enables customers to access E-banking

services at anytime and anywhere (Kumbhar, 2011). E-banking offers customers 24/7
banking services. E-banking customers are able to check their account balances, pay bills,
apply for loan, trade securities and conduct other financial transactions (Saatcioglu et al.,
2001). Similarly, Zeithaml et al. (2002) showed that perceived ease of use and convenience
have a positive effect on behavioral intention to use the internet banking. Likewise, Oliver
(1980) explained that the feeling of satisfaction arises when customers compare their
perception of actual product/ service performance with expectations. Ainscough and Luckett
(1996) found the provision of customer interactivity is an important criterion that attracts
users in the delivery of E-banking. Previous studies have also empirically acknowledged a
positive relationship between E-banking convenience and customer satisfaction and also
explained convenience as critical dimension of E-banking (Pikkarainen et al., 2004). Online
banking is a highly profitable channel for financial institutions. It provides customers
convenience and flexibility and can be provided at a lower cost than traditional branch
banking (Beer, 2006). Furthermore, acquiring new customers may cost five times as much
compared to generating repeat business from existing customers (Bhattacherjee, 2001).
28
Traditional service is restricted by distance and opening hours, whereas e-service
substantially circumvents these barriers (Surjadjaja et al., 2003). This provides the customer
with convenience and control (Rowley, 2006). E-banking provides higher degree of
convenience that enables customers to access internet bank at all times and places. Based on
it, this study develops the following hypothesis:
H1: There is a positive relationship between convenience and customer satisfaction with E-
banking service.
Reliability
Reliability involves two concepts, dependability and uniformity in performance. Joseph et al.
(1999) considered reliability of the service as an important factor of service quality. Research
on the use of computers or technologies which share similar characteristics also affect
performance (or dependability) as it is an important attribute. Zeithaml and Bitner (2000)
advised that customers should be specifically influenced by the reliability of new technology
because they might be associated with risks such as the technology malfunctioning.
Reliability also means honoring the commitments in areas such as billing accuracy, proper
record maintenance and delivering the service within acceptable time limit (Saha and Zhao,
2005). Reliability also refers to the correct technical functioning of a self-services technology
and the accuracy of service delivery. The above studies have detected that reliability is
significant in the determination of service quality (Parasuraman et al., 2005). Reliability has
been identified as a key determinant of service quality each in interpersonal and self service
(Zeithaml et al., 2002). According to Babbie (2009), reliability is a matter of whether a
particular technique, applied repeatedly to the same object, yields the same result each time.
Gravetter and Wallnau (2005) found that reliability as the extent to which a measurement
procedure is stable and consistent. Based on it, this study develops the following hypothesis:
H2: There is a positive relationship between reliability and customer satisfaction with E-
banking service.
Ease of use
Ease of use is an important determinant for the customer preferring the internet banking
(Beer, 2006). According to Timothy (2012), E-banking deals with getting availability to help
ATM, phone access, E-mail access, and account access when abroad. It involves
approachability and ease of contact. Furthermore, the adoptions of E-banking have been
linked to high levels of workplace internet use (Durkin, 2004). Access has increasingly been
29
linked to internet customer choices. With more convenient way, online banking also permits
consumer to have direct access to their financial information and to undertake financial
transactions (Rotchanakitumnuai and Speece, 2003). Chong et al. (2010) found that if users
feel that online banking is easy to use and free of hustle, then the chances of them using the
system will be greater. This study used the concept to mean the degree to which ATMs
systems offer a hassle free transaction for the customer. Research shows that ease of use is a
major factor in determining the adoption and use of various corporate information
technologies such as online banking (Gounaris and Koritos, 2008). Similarly, the banking
industry is now utilizing the new communication media (internet) to provide its flexible
services to the customers with easy and convenience (Haque, 2009). Likewise, Lau (2002)
concluded that perceived ease of use was significantly correlated with intention towards using
the online trading system. Those form of technological advancement has enhanced delivery
of banks’ services, it has an enormous effect on development of more flexible payments
methods and more user-friendly banking services. Based on it, this study develops the
following hypothesis:
H3: There is a positive relationship between ease of use and customer satisfaction with E-
banking service.
Security and privacy
This is an important factor for E-banking users against their account information guarantee
that the record showing banking activities and security of account information is not shared
(Yang and Fang, 2004). According to Madu (2002), security is another common interest of
customers to decide usage of Internet banking. Likewise, Pavlou (2003) indicated that
security concerns kept both bankers and customers away from E-banking. Similarly,
Polatoglu and Ekin (2001) indicated that risk in terms of financial, physical and social
characteristics was the main cause of slow growth of internet banking usage. Moreover,
customers will use electronic media for banking transaction when system is suitable and
hacking proof (Hanudin et al., 2007). Security and privacy will help bank to gain trust of
their customers which will result into increased mobile banking transactions. In Zhao and
Saha (2005) showed that privacy has a strong influence on customer satisfaction. Finally,
Churchill (1982) indicated that one of the most important future challenges facing individuals
or customers of a bank is the fear of higher risks associated with using the Web for banking
and financial transaction. Dabholkar et al. (1996) recommended adding the security
dimension to future service quality research. Security is ensued when the service becomes
30
safe, and the customer information gets protection (Zeithaml et al., 2002). Based on it, this
study develops the following hypothesis:
H4: There is a positive relationship between 'security and privacy' and customer satisfaction
with E-banking service.
Time saving
According to Bateson (1985), customers are sensitive in speed of service delivery; while they
are getting service from others. In addition, researchers revealed that customers are wants to
rate the processing time service. Mols (1999) noted that sometimes customers have a strong
liking to make the service by themselves. This indicated that customers are more interested to
gain the service very soon or without taking more time. Mols (1999) additionally putted that
slow service providing has a negative impact on over all perceptions of service quality. As we
know once customer dissatisfied with your first service rendering, even they will stop usage
of the service or the product let alone you improve your service delivery system. Likewise,
Dabholkar et al. (1996) strengthen that individuals are expecting rapid service delivery
system. Many banks are offering mobile banking services which allow bank customers to
check balance in their personal account, to transfer funds between accounts and make online
payments anywhere and at any time by simply using mobile banking applications installed on
their mobile devices (Lau, 2002). Saving time is an importance factor which influences the
customers prefers to use E-banking (Beer, 2006). Furthermore, banks can make the
information of products and services available on their site, which is, an advantageous
proposition. Prospective customer can gather all the information from the website and thus if
he comes to the branch with queries it will be very specific and will take less time of
employee (Srivastava et al., 2017). In addition, Shankar and Kumari (2016) revealed that
technology should always be compatible with the need of the user and mobile banking can
adopt by consumer only if it is compatible with banking activity needs of consumer. The
study also showed mobile banking leads to time saving which influence the customers to use
the mobile banking service more often. Based on it, this study develops the following
hypothesis:
H5: There is a positive relationship between time saving and customer satisfaction with E-
banking service.
Perceived benefit
31
Online banking has recently come to be considered as one of the most effective banking
transaction methods because it possesses many advantages which offline banking channels
cannot offer. Thus, online banking managers aim to utilize these advantages to increase the
online banking adoption rate (Huang et al., 2005). Al Khasawneh (2015) revealed perceived
benefit is the most significant positive predictor of consumer attitude towards using m-
banking. Similarly, Lee (2008) revealed that perceived benefit is found as an important factor
in understanding online banking. The study revealed that online banking automates this
process by mediating transactions through websites and electronic data interchange, and can
also reduce the need for customers to communicate with bank staff regarding transaction
details because they can be obtained at a website. The study also showed that the intention to
use online banking is primarily and positively affected by perceived benefit. Perceived
benefits have a direct, positive effect on the satisfaction of customers with their bank (Molina
et al., 2007). Likewise, Singh et al. (2011) showed that perceived benefit has the strongest
influence on relationship quality, followed by self-expression and altruism. Moreover, Gan
and Wang (2017) showed the effect of perceived value on user satisfaction, which further
significantly influence purchase intention in social commerce context, implying that service
providers should take measures to develop user satisfaction by strengthening users’ perceived
benefits and decreasing their perceptions of risks, which further stimulates users’ purchase
intention. Based on it, this study develops the following hypothesis:
H6: There is a positive relationship between perceived benefit and customer satisfaction with
E-banking service.
1.8 Research methodology
Research design is a plan, structure and strategy of investigation conceived so as to obtain

answers to research questions and to control variance. It provides a guideline for the
researchers to enable them to keep track of their own actions and to know that they are
moving on right direction in order to achieve their goals. The design may be a specific
presentation of the various steps such as selection of the research problem. A research design
is a blue print or detailed plan for how a research study is to be completed operations of
variables so that they can be measured, selecting a sample of interest to study, collecting data
to be used as a basis for lasting hypothesis and analyzing the results.
32
1.8.1 Research design
Research design is a plan, structure and strategy of investigation conceived so as to obtain

answers to research questions and to control variance. It provides a guideline for the
researchers to enable them to keep track of their own actions and to know that they are
moving on right direction in order to achieve their goals.
The study has employed a descriptive and casual-comparative research design to deal with
the fundamental issues associated with the relationship for fact-finding and searching for
adequate information on the impact of E-banking practices on customer satisfaction in
Nepalese commercial banks. The researchers have adopted a research design that combines
descriptive and causal-comparative elements. The descriptive research aspect aims to gather
factual information about E-banking service and customer satisfaction, while the causal-
comparative aspect seeks to establish cause-and-effect relationships between independent and
dependent variables. The researchers have designed a questionnaire to assess customer
satisfaction levels related to E-banking services. The goal is to understand the relationship
between customer satisfaction and E-banking service variables. This design has been adopted
to ascertain and understand the directions, magnitudes and forms of observed relationship
between customer satisfaction and E-banking service variables. The questionnaire has been
designed to assess the perception of bank customers’ satisfaction level from their E-banking
services.
1.8.2 Nature and sources of data
This study is based on primary data. The primary data and information are collected on
various aspects of convenience, reliability, ease of use, security and privacy, time saving,
perceived benefits towards the customer satisfaction. This study collects data from structured
questionnaire. The questionnaire contains the questions on respondent’s profile, rank type
questions and 5-point scale questions.
1.8.3 Data collection instruments
The instrumentation for data collection was questionnaire methodology in the format of five
point Likert scale ranging from 1 (Strongly agree) to 5 (Strongly disagree). The first section
of the questionnaire provides the demographic information of the respondents such as gender,
academic qualification, occupation, income level which was used for the descriptive analysis
of the respondent. Similarly, the second section of the questionnaire provides the information
33
to analyze the customers’ satisfaction level from their E-banking services. This section of
questionnaire characterizes the basic information regarding the customer’s perception on E-
banking services of Nepalese commercial banks. The set of questionnaire was developed to
investigate how much the customers are satisfied from their E-banking services.
1.8.4 Population and sample
The sample that have been used for the study purpose are selected based on the availability of
required information and data as per the requirements. The total population for the study is
the E-banking users of the commercial banks. In the study the development banks are also
included and taken as a sample. The total number of observation for the study consists of 121
respondents.
1.8.5 Model specification
The following econometrics model equation is employed to test different hypothesis that
there is positive relationship between E-banking services and customer satisfaction in
Nepalese commercial banks. The proxies of E-banking services are convenience, reliability,
ease of use, security and privacy, time saving, perceived benefits.
This study analyzes the impact of E-banking services factors on customer satisfaction in
Nepalese commercial banks, using the different weighted mean of five point Likert scale
questionnaire of sample commercial banks. The dependent variable is customer satisfaction
and independent variables are convenience, reliability, ease of use, security and privacy, time
saving, perceived benefits.
Model:
CS = β0 + β1 C + β2 R+ β3 E+ β4 S + β5 TS +β6 PB + e
Where,
CS = Customer Satisfaction
C = Convenience
R= Reliability
E= Ease of use
S = Security and privacy
TS = Time saving
PB= Perceived benefits.
34
e = error term
1.8.6 Validity and reliability
Validity refers to the truthfulness of findings. It determines whether the study truly measures
what it was intended to measure or how truthful the study results are. It refers to the accuracy
of a measure and a measurement is valid when it measures and performs the functions that it
supports. It is the degree to which a measure accurately represents what is it supposed to
measure.
Reliability, on the other hand refers to the credibility of the test and it mainly tests
measurement results and measurement tools. The extent to which results are consistent
overtime and an accurate representation of the total population under study is referred to as
reliability and if the results of a study can be reproduced under a smaller methodology, then
the study instrument is considered to be reliable.
In this study, Cronbach’s alpha is used to test reliability of the primary data. It allows us to
measure the reliability of the different categories. It is a function of the number of test items
and the average inter correlation among the items. Cronbach’s alpha consists of estimates of
how much variation in scores of different variables is attributable to chance or random errors.
As a general rule, a coefficient greater than or equal to 0.7 is considered acceptable and is a
good indication of construct reliability.
Table 1.4: Coefficient of Cronbach’s alpha
Variables Number of questions Cronbach’s alpha

Convenience 5 0.781
Reliability 6 0.790
Ease of Use 5 0.877
Security and privacy 5 0.765
Time Saving 5 0.762
Perceived Benefits 6 0.741
Customer Satisfaction 5 0.758
Overall 37 0.903
Source: Responses on Survey Likert Questionnaire
Table 1.4 shows the reliability test for all the components of questionnaire regarding the E-
banking services and customer satisfaction which were computed by using SPSS. Cronbach’s
alpha greater than 0.7 is considered as reliable data. The overall Cronbach’s alpha is 0.903,
which means 90.3 percent of the data taken for the study is reliable.
35
1.9 Limitations of the study
Despite of the continuous efforts made for arriving at meaningful conclusion, the study
suffers from the following major limitations:
1. The study is completely based on primary source of data regarding E-banking services
and customer satisfaction. Therefore, the reliability of conclusions of the study
depends upon the accuracy of the information provided by the respondents.
2. The study is based on the assumption of linear regression between the dependent and
independent variables. The study excluded the non-linear regression assumptions.
3. The data have been gathered by using a questionnaire. A series of interview should
have been carried out to verify the information. However, it has not been undertaken in
this study.
4. The study is based on independent variables only which were considered as major ones
as per the literature review.
5. The study is based on the survey of 121 respondents only.
6. The study has collected data from selective respondents only.
1.10 Organization of the study
The study has been organized into a total of three chapters. The first chapter is the
introduction which covers the background of the study, statement of the problem, objective of
the study, significance, literature review, research hypothesis and operational definition and
assumptions. This is followed by Chapter Two which contains the data analysis and major
findings and the last chapter, that is, Chapter Three offers the summary and conclusion. This
chapter also includes a separate section for recommendations based on the major findings of
the study.
36
Chapter II
Data analysis and major findings
The instrumentation for data collection was questionnaire methodology in the format of five
point Likert scale ranging from 1 (Strongly agree) to 5 (Strongly disagree). The first section
of the questionnaire provides the demographic information of the respondents such as gender,
academic qualification, occupation, income level which was used for the descriptive analysis
of the respondent. Similarly, the second section of the questionnaire provides the information
to analyze the customers’ satisfaction level from their E-banking practices. This section of
questionnaire characterizes the basic information regarding the customer’s perception on E-
banking services of Nepalese commercial banks. The set of questionnaire was developed to
investigate how much the customers are satisfied from their E-banking services.
2.1 Presentation and analysis of data
The main purpose of data analysis in this study is to examine E-banking service and its
impact on Nepalese commercial banks. Besides, the study also attempts to identify and
analyze the relationship between customer satisfaction and other independent variables.
The first section gives a presentation on how the empirical data was used for research
purpose to study the impact of factors of E-banking services and customer satisfaction in the
Nepalese commercial banks. Under the study, questionnaire was made to know the factors
affecting customer satisfaction from E-banking services of their respective banks. The
methods of data analysis consist four sections. First section includes summary of descriptive
statistics associated with general information of the respondents like gender, academic
qualification, income and occupation.
Second section analyzed the descriptive statistics such as mean and weighted average values
of six influencing factors of E-banking services i.e. convenience, reliability, ease of use,
security and privacy, time saving, perceived benefits and customer satisfaction. The study
also used percentage frequency distribution, cross tabulation, mean scores of the responses to
Likert scale items and ranking items. Third section deals with the Pearson correlation
coefficient analysis which investigated the association between E-banking services and
customer satisfaction of Nepalese commercial banks.
Similarly, fourth section deals with the regression analysis of primary data. A multiple
regression model were applied to estimate the relationship between dependent variable i.e.
37
customer satisfaction and independent variables i.e. convenience, reliability, ease of use,
security and privacy, time saving, perceived benefits. The collected data were analyzed with
the help of SPSS (Statistical Package of Social Science).
Total responses collected from the respondent were coded and tabulated into SPSS
worksheet. The function of SPPS is to analyze the result of the questionnaire and then helps
to intercept the findings. The various tools such as frequencies, descriptive statistics, and
casual comparative and reliability analysis (Cronbach’s alpha) have been applied to derive
the result. Further, p-value was used to check the level of significance of the different
statements of E-banking services and customer satisfaction. The respondents’ profile along
with their personal characteristics and result of the survey are presented in the following
sections.
2.1.1 Profile of respondents
This section therefore describes the demographic characteristics of the respondents of

Nepalese commercial banks. In this study, the respondent include E-banking users from
different commercial banks all over Nepal and 120 questionnaires were collected based on
gender, occupation, academic qualification and income level of the respondents using E-
banking services of the various commercial banks. In this section, demographic
characteristics of E-banking users in Nepalese commercial banks are presented.
Table 2.1 shows the personal profile of the respondents. Out of 121 respondents surveyed, the
majority of the respondents (56.2 percent) are the females followed by (43.8 percent) are the
males. On academic qualification, majority of the respondents (65.3 percent) has completed
their Bachelors level followed by (20.7 percent) of the respondents have completed their
Intermediate level, (8.3 percent) of the respondents have completed their Masters level, (4.1
percent) of the respondents have completed their SLC and (0.8 percent) have completed
MPhil. Regarding the Occupation the section is separated in three sectors; Student, business
and services. Out of the total respondents, majority of the respondents (78.5 percent) are
students followed by Service sector (11.6 percent) and Business (9.9 percent). Regarding
income level of the respondents, majority of the respondents (62 percent) have no income,
followed by income level of (15.7 percent) of the respondent have below 20,000, income
level of (10.7 percent) of the respondent have 50,000 and above, (7.4 percent) have income
level of 20,000-35000 and (4.1 percent) have the income range of 35,000- 50,000.
38
Table 2.1: Demographic characteristics of respondents
(There were five demographic categories that the respondents were asked to complete in order to fill out the
demographic profile of them. These were gender, academic qualification, occupation and their income level.
The distribution of collected sample based on these demographic profiles is presented as follows. The
characteristics of the respondents influence the results.)
Respondent’s details No. of respondents Percentage (%)
Gender
Male 68 56.2
Female 53 43.8
Total 121 100.00
Academic qualification
SLC 5 4.1
Intermediate 25 20.7
Bachelor Degree 70 65.3
Master Degree 10 8.3
M. Phil/ Ph. D Degree 2 1.56
Total 121 100.00
Occupation
Student 95 78.5
Business 12 9.9
Services 14 11.6
Total 121 100.00
Income Level
None 75 62
Below 20,000 19 15.7
20,000-35,000 9 7.4
35000-50,000 5 4.1
50,000 and Above 13 10.7
Total 121 100.00
Source: Field survey, 2023
Gender
Gender is an important variable in expressing and giving the responses about the problem.
Hence, the variable gender was investigated for this study. Data related to gender of the
respondents is presented in Figure 2.1.
The above figure shows that out of 121 respondents surveyed, the majority of the respondents
(56.2 percent) are the females followed by (43.8 percent) are the males.
39
Figure 2.1: Classification of respondents by gender
Academic qualification
Education is one of the most important characteristics that might affect the person’s attitudes
and the way of looking and understanding any particular social phenomena therefore it
becomes imperative to know the educational background of the respondents. The
classification of respondents by academic qualification is presented in Figure 2.2.
Figure 2.2: Academic qualification of respondents
The figure shows the academic qualification of the respondents where majority of the
respondents (65.3 percent) has completed their Bachelors level followed by (20.7 percent) of
the respondents have completed their Intermediate level, (8.3 percent) of the respondents
have completed their Masters level, (4.1 percent) of the respondents have completed their
SLC and (0.8 percent) have completed MPhil.
40
Income level
Income level refers to the amount of money an individual or household earns over a specific
period, typically a year. It is an essential economic indicator that helps gauge the financial
well-being of individuals, households, and even entire countries. The income level is
classified into 5 category: None, below 20,000, 20,000-35000, 35,000- 50,000 and 50,000
and above.
Figure 2.3: Income level wise classification of respondent
The classification of the respondents by income level category is presented in Figure 2.3. The
chary shows that majority of the respondents (62 percent) have no income, followed by
income level of (15.7 percent) of the respondent have below 20,000, income level of (10.7
percent) of the respondent have 50,000 and above, (7.4 percent) have income level of 20,000-
35000 and (4.1 percent) have the income range of 35,000- 50,000.
Occupation
Occupation refers to the job or profession you currently hold. It is a way to provide
information about your employment status and the type of work you do. Including your
occupation on a personal profile can give others an understanding of your professional
background and interests. The occupation is classified on 3 sectors mainly: student, business
and service sector.
The classification of the respondents by occupation is presented in Figure 2.4. The chart
shows that out of the total respondents, majority of the respondents (78.5 percent) are
students followed by Service sector (11.6 percent) and Business (9.9 percent).
41
Figure 2.4: Occupation wise classification of respondent
Student Business Service
12%
10%
79%
2.1.2 Respondents’ perception on and ease of use, security and privacy, time savings,
perceived benefits with customer satisfaction
The following table shows the responses associated with multiple choice type questions. It
also depicts the number of respondents and its percentage value.
Table 2.2: Respondents’ perception on convenience
(This table shows the percentage, frequency and mean of the customer’s perception towards convenience of E-
banking services in Nepalese Commercial Banks. The statement is measured in five point Likert scales: 1 as
strongly agree, 2 as agree, 3 as neutral, 4 as disagree and 5 as strongly disagree.)
Statements 2 1 3 4 5 N Mean
Customers can save money through E- F 5724 26 11 3 121 2.273
banking. 47.1 2.4
%
19.83 1 21.49 9.09 8
A% 66.94 21.49 11.57
The bank handles complaints and F 7 68 27 16 3 121 2.504
solves problems quickly through online 56.2 2.4
%
web-chat. 5.79 0 22.31 13.22 8
A% 61.98 22.31 15.70
Instructions provided on the bank's
F 121 2.198
website are useful and informative. 18 66 33 3 1
54.5 0.8
%
14.88 5 27.27 2.48 3
A% 69.42 27.27 3.31
The website's language and F 18 66 29 6 2 121
information are simple to understand. 54.5 1.6 2.240
%
14.88 5 23.97 4.96 5
A% 69.42 23.97 6.61
The bank's E-banking service is easy to F 22 71 21 4 3 121 2.132
use and navigate. % 18.18 58.6 17.36 3.31 2.4
42
8 8
A% 76.86 17.36 5.79
Weighted average mean 2.2694
Table 2.2 reveals that the majority of the respondents (66.94 percent) agreed that E-banking
enable customer to save money. Some respondents (11.47 percent) disagreed that E-banking
enable customer to save money. However, the rest of the respondents (21.49 percent) were
neither agreed nor disagreed about the statement.
The table also shows that the majority of the respondents (61.98 percent) agreed that the bank
handles complaints and solves problems quickly through online web-chat. Some respondents
(22.31 percent) disagreed that the bank handles complaints and solves problems quickly
through online web-chat. However, the rest of the respondents (15.7 percent) were neither
agreed nor disagreed about the statement.
Regarding the statement, “Instructions on the bank’s website are very helpful”, the majority
of the respondent (69.42 percent) agreed that instructions on the bank’s website are very
helpful. Some respondents (3.31 percent) disagreed that instructions on the bank’s website
are very helpful. However, the rest of the respondents (27.27 percent) were neither agreed nor
disagreed about the statement.
Likewise, regarding the statement “The website's language and information are simple to
understand”, the majority of the respondents (69.42 percent) agreed that they find language
and information simple to understand. Some respondents (6.61 percent) disagreed that they
find language and information simple to understand. However, the rest of the respondents
(23.97 percent) were neither agreed nor disagreed about the statement.
Similarly, the majority of the respondents (76.86 percent) agreed that the bank's E-banking
service is easy to use and navigate. Some respondents (5.79 percent) disagreed that the bank's
E-banking service is easy to use and navigate. However, rest of the respondents (17.36
percent) were neither agreed nor disagreed about the statement.
The mean of the convenience of E-banking service in the context of Nepalese commercial
banks ranges from minimum value of 2.132 to the maximum value of 2.504. Among them,
the statement regarding, “The bank handles complaints and solves problems quickly through
online web-chat.” has maximum mean value of 2.504. However, the statement regarding,
“The bank's E-banking service is easy to use and navigate.” has lowest mean value of 2.132.
43
Weighted average mean value for convenience of E-banking service is 2.2694. It indicates
that convenience plays important role in E-banking practices on Nepalese commercial banks.
Table 2.3 shows the descriptive analysis of convenience for customer satisfaction in the
context of Nepalese commercial banks.
Table 2.3: Reliability of E-banking service in the context of Nepalese commercial banks
(This table shows the percentage, frequency and mean of the customer’s perception towards reliability of E-
Statements 1
2 3 4 5
N Mean
An error-free transaction is offered by F 25
40 52 31 121 2.298
E-banking software. 33.0 0.8
%
20.66 6 42.98 2.48 3
A% 53.72 42.98 3.31
The contents of E-banking apps are up F 13 75 26 6 1 121 2.231
to date. 61.9 0.8
%
10.74 8 21.49 4.96 3
A% 72.73 21.49 5.79
E-banking applications provide all
F 2.455
details of products and services. 11 55 45 9 1 121
45.4 0.8
%
9.09 5 37.19 7.44 3
A% 54.55 37.19 8.26
The bank provides customer service F 12 63 31 12 3 121
over the telephone when needed. 52.0 2.4 2.430
%
9.92 7 25.62 9.92 8
A% 61.98 25.62 12.40
You can rely on the bank of not F 18 64 31 7 1 121 2.248
misusing information. 52.8 0.8
%
14.88 9 25.62 5.79 3
A% 67.77 25.62 6.61
Can rely on the accuracy of the F 16 65 31 5 4 121 2.306
information provided in E-banking 53.7 3.3
%
applications of the bank. 13.22 2 25.62 4.13 1
A% 66.94 25.62 7.44
Table 2.3 reveals that the majority of the respondent (53.72 percent) agreed that an error-free
transaction is offered by E-banking software. Some respondents (3.31percent) disagreed that
an error-free transaction is offered by E-banking software. However, the rest of the
respondents (42.98 percent) were neither agreed nor disagreed about the statement.
The table also shows that the majority of the respondents (72.73 percent) agreed that the
contents of E-banking apps are up to date. Some respondents (5.79 percent) disagreed that the
44
contents of E-banking apps are up to date. However, the rest of the respondents (21.49
Regarding the statement, “E-banking applications provide all details of products and
services”, the majority of the respondent (54.55 percent) agreed that E-banking applications
provide all details of products and services. Some respondents (8.26 percent) disagreed that
E-banking applications provide all details of products and services. However, the rest of the
Likewise, regarding the statement “The bank provides customer service over the telephone
when needed”, the majority of the respondents (61.98 percent) agreed that the bank provides
customer service over the telephone when needed. Some respondents (12.4 percent)
disagreed that the bank provides customer service over the telephone when needed. However,
the rest of the respondents (25.62 percent) were neither agreed nor disagreed about the
statement.
Similarly, the majority of the respondents (67.77 percent) agreed that they can rely on the
bank of not misusing information. Some respondents (6.61 percent) disagreed that they can
rely on the bank of not misusing information. However, rest of the respondents (25.62
Similarly, the majority of the respondents (66.94 percent) agreed that they can rely on the
accuracy of the information provided in E-banking applications of the bank. Some
respondents (7.44 percent) disagreed that they can rely on the accuracy of the information
provided in E-banking applications of the bank. However, rest of the respondents (25.62
The mean of the reliability of E-banking service in the context of Nepalese commercial banks
ranges from minimum value of 2.231 to the maximum value of 2.455. Among them, the
statement regarding, “E-banking applications provide all details of products and services” has
maximum mean value of 2.455. However, the statement regarding, “The contents of E-
banking apps are up to date.” has lowest mean value of 2.231.
Weighted average mean value for reliability of E-banking service is 2.328 which indicate that
reliability of E-banking service by Nepalese commercial banks has been executed properly.
This shows that the customer satisfaction with regard to reliability is satisfactory in
commercial banks of Nepal as respondents selected agree in most of the questionnaire.
45
Table 2.4 shows the descriptive analysis of reliability for customer satisfaction in the context
of Nepalese commercial banks.
Table 2.4 reveals that the majority of the respondent (76.03 percent) agreed that E-banking
Service of the bank is easy to use. Some respondents (1.65 percent) disagreed that E-banking
Service of the bank is easy to use. However, the rest of the respondents (22.31 percent) were
The table also shows that the majority of the respondents (72.73 percent) agreed that apps and
website of the bank is properly designed. Some respondents (4.13 percent) disagreed that
apps and website of the bank is properly designed. However, the rest of the respondents
Table 2.4: Ease of use of E-banking service in the context of Nepalese commercial banks
(This table shows the percentage, frequency and mean of the customer’s perception towards ease of use of E-
E-banking Service of the bank is easy F 2864 27 2 0 121 2.025
to use. 52.8 0.0
%
23.14 9 22.31 1.65 0
A% 76.03 22.31 1.65
Apps and website of the bank is F 14 74 28 3 2 121 2.215
properly designed. 61.1 1.6
%
11.57 6 23.14 2.48 5
A% 72.73 23.14 4.13
Customer are aware of different
F 2.438
features of E-banking. 16 55 34 13 3 121
45.4 2.4
%
13.22 5 28.10 10.74 8
A% 58.68 28.10 13.22
F 13 60 38 7 3 121
The policy and notice statements are
49.5 2.4 2.397
easily accessible on the bank's %
10.74 9 31.40 5.79 8
website.
A% 58.68 28.10 13.22 58.68
F 20 65 28 6 2 121 2.215
Speed to login and logout of the bank 53.7 1.6
%
apps and website is fast. 16.53 2 23.14 4.96 5
A% 70.25 23.14 6.61
Similarly, majority of the respondents (58.68 percent) agreed that customer are aware of
different features of E-banking. Some respondents (13.22 percent) disagreed that customer
46
are aware of different features of E-banking. However, rest of the respondents (28.10
percent) neither agreed nor disagreed with the statement.
Similarly, majority of the respondents (69 percent) agreed that easy to find the policy and
notice statements in the bank’s website. Some respondents (9 percent) disagreed that easy to
find the policy and notice statements in the bank’s website. However, rest of the respondents
(22 percent) were neither agreed nor disagreed with the statement.
Likewise, majority of the respondents (70.25 percent) agreed that speed to login and logout
of the bank apps and website is fast. Some respondents (6.61percent) disagreed that speed to
login and logout of the bank apps and website is fast. However, the rest of the respondent
(23.14 percent) were neither agreed nor disagreed with the statement.
The mean of the ease of use of E-banking service in the context of Nepalese commercial
the statement regarding, “Customer are aware of different features of E-banking” has
maximum mean value of 2.438. However, the statement regarding, “E-banking Service of the
bank is easy to use.” has lowest mean value of 2.025.
Weighted average mean value for ease of use of E-banking service is 2.258. It indicates that
the ease of use plays important role on the customer satisfaction on Nepalese commercial
banks. It means that respondents agree that ease of use is satisfactory to customers in
commercial banks of Nepal.
Table 2.5 shows the descriptive analysis of ease of use for customer satisfaction in the
Table 2.5: Security and privacy of E-banking service in the context of Nepalese
commercial banks
(This table shows the percentage, frequency and mean of the customer’s perception towards security and
privacy of E-banking services in Nepalese Commercial Banks. The statement is measured in five point Likert
scales: 1 as strongly agree, 2 as agree, 3 as neutral, 4 as disagree and 5 as strongly disagree.)
Statements 1 2 3 4 5N Mean
Every transaction is alerted or F 42 57 21 0 1 121 1.851
informed by the bank through texts and 47.1 0.8
%
letters. 34.71 1 17.36 0.00 3
A% 81.82 17.36 0.83
The bank's E-banking service advises F 25 72 21 3 0 121 2.017
creating strong passwords. 59.5 0.0
%
20.66 0 17.36 2.48 0
A% 80.17 17.36 2.48
47
The completed transaction is
F 2.083
encrypted. 25 70 19 5 2 121
57.8 1.6
%
20.66 5 15.70 4.13 5
A% 78.51 15.70 5.79
Data and transactions of customer is F 14 50 29 17 11 121
easily accessible to others. 41.3 9.0 2.678
%
11.57 2 23.97 14.05 9
A% 52.89 23.97 23.14
The bank's website had session F 22 62 25 9 3 121 2.248
timeouts occasionally. 51.2 2.4
%
18.18 4 20.66 7.44 8
A% 69.42 20.66 9.92
The table 2.5 reveals that the majority of the respondent (81.82 percent) agreed that every
transaction is alerted or informed by the bank through texts and letters. Some respondents
(0.83 percent) disagreed that every transaction is alerted or informed by the bank through
texts and letters However, rest of the respondents (17.36 percent) were neither agreed nor
disagreed with the statement.
The table also shows that majority of the respondent (80.17 percent) agreed that the bank's E-
banking service advises creating strong passwords. Some respondents (2.48 percent)
disagreed that the bank's E-banking service advises creating strong passwords. However, rest
of the respondents (17.36 percent) were neither agreed nor disagreed with the statement.
Similarly, majority of the respondents (78.51 percent) agreed that the transaction done is
encrypted. Some respondents (5.79 percent) disagreed that the transaction done is encrypted.
However, rest of the respondents (15.70 percent) were neither agreed nor disagreed with the
statement.
Likewise, regarding the statement "Data and transactions of customer is easily accessible to
others" majority of the respondents (52.89 percent) agreed that data and transactions of
customer is easily accessible to others. Some respondents (23.14 percent) disagreed that data
and transactions of customer is easily accessible to others. However, rest of the respondents
(23.97 percent) were neither agree nor disagree with the statement.
Similarly, majority of the respondents (69.42 percent) agreed about session timeouts occurred
in the bank’s website after some times. Some respondents (9.92 percent) disagreed about
session timeouts occurred in the bank’s website after some times. However, rest of the
respondents (20.66 percent) were neither agreed nor disagreed with the statement.
48
The mean of the security and privacy of E-banking service in the context of Nepalese
commercial banks ranges from minimum value of 1.851 to the maximum value of 2.678.
Among them, the statement regarding, “Every transaction is alerted or informed by the bank
through texts and letters” has maximum mean value of 2.678. However, the statement
regarding, “Data and transactions of customer is easily accessible to others” has lowest mean
value of 1.851.
Weighted average mean value for security and privacy of E-banking service is 2.1754 which
indicates that security and privacy plays important role in customer satisfaction in Nepalese
commercial banks. This shows that the customer satisfaction with regard to security and
privacy is agreed by the respondents.
Table 2.6 shows the descriptive analysis of security and privacy for customer satisfaction in
the context of Nepalese commercial banks.
Table 2.6: Time saving of E-banking service in the context of Nepalese commercial
banks
(This table shows the percentage, frequency and mean of the customer’s perception towards time saving of E-
strongly agree, 2 as agree, 3 as neutral, 4 as disagree and 5 as strongly disagree.))
Statements 1
2 3 4 5 N Mean
The number of clients visiting branch F 42
57 21 0 1 121 1.851
offices has decreased due to E-banking. 47.1 0.8
%
34.71 1 17.36 0.00 3
A% 81.82 17.36 0.83
The customer does not need to visit the F 22 62 23 10 4 121 2.273
branch office to request the checkbook. 51.2 3.3
%
18.18 4 19.01 8.26 1
A% 69.42 19.01 11.57
E-banking has helped customers to
F 2.207
dispute the unauthorized transaction in 17 70 27 6 1 121
real time. 57.8 0.8
%
14.05 5 22.31 4.96 3
A% 71.90 22.31 5.79
Customer can easily use E-banking F 32 71 12 5 1 121
applications which saves time. 58.6 0.8 1.942
%
26.45 8 9.92 4.13 3
A% 85.12 9.92 4.96
Customer can transfer money within a F 39 63 14 3 2 121 1.893
same bank or other bank with a few 52.0 1.6
%
clicks. 32.23 7 11.57 2.48 5
A% 84.30 11.57 4.13
49
The table 2.6 reveals that majority of the respondents (81.82 percent) agreed that the number
of clients visiting branch offices has decreased due to E-banking. Some respondents (0.83
percent) disagreed that the number of clients visiting branch offices has decreased due to E-
banking. However, rest of the respondents (17.36 percent) were neither agreed nor disagreed
with the statement.
The table also shows that majority of the respondent (69.42 percent) agreed that they does not
need to visit the branch office to request the check book. Some respondents (11.57 percent)
disagreed that they does not need to visit the branch office to request the check book.
statement.
Similarly, majority of the respondents (71.90 percent) agreed that they can easily use E-
banking applications which saves time. Some respondents (5.79 percent) disagreed that they
can easily use E-banking applications which saves time. However, rest of the respondents
Likewise, majority of the respondents (85.12 percent) agreed that customer can transfer
money within a same bank or other bank with a few clicks. Some respondents (4.96 percent)
disagreed that customer can transfer money within a same bank or other bank with a few
clicks. However, rest of the respondents (9.92 percent) were neither agreed nor disagreed
with the statement.
Regarding the statement, "Customer can transfer money within a same bank or other bank
with a few clicks" majority of the respondents (84.30 percent) agreed that customer can
transfer money within a same bank or other bank with a few clicks. Some respondents (4.13
percent) disagreed that customer can transfer money within a same bank or other bank with a
few clicks. However, rest of the respondents (11.57 percent) were neither agreed nor
The mean of the time saving of E-banking practice in the context of Nepalese commercial
the statement regarding, “The customer does not need to visit the branch office to request the
checkbook” has maximum mean value of 2.273. However, the statement regarding, “The
50
number of clients visiting branch offices has decreased due to E-banking.” has lowest mean
value of 1.851.
Weighted average mean value for time saving of E-banking service is 2.031 which that time
saving plays an important role on the customer satisfaction Nepalese commercial banks. It
means that respondents agreed that the time saving affect positively on the customer
Table 2.7 shows the descriptive analysis of time saving for customer satisfaction in the
The table 2.7 reveals that majority of the respondent (84.30 percent) agreed that E-banking
enables 24*7 hour a week accessibility to the bank service. Some respondents (0.83 percent)
disagreed that E-banking enables 24*7 hour a week accessibility to the bank service.
statement.
The table also shows that majority of the respondent (69.42 percent) agreed about the
improved relationship with customers and bank. Some respondents (4.96 percent) disagreed
about the improved relationship with customers and bank. However, rest of the respondents
Similarly, majority of the respondents (75.21 percent) agreed that E-banking helps to perform
transaction at lower cost. Some respondents (3.31 percent) disagreed that E-banking helps to
perform transaction at lower cost. However, rest of the respondents (21.49 percent) were
neither agreed nor disagreed with the statement.
Table 2.7: Perceived benefits of E-banking service in the context of Nepalese

commercial banks
(This table shows the percentage, frequency and mean of the customer’s perception towards perceived benefits
of E-banking services in Nepalese Commercial Banks. The statement is measured in five point Likert scales: 1
as strongly agree, 2 as agree, 3 as neutral, 4 as disagree and 5 as strongly disagree.)
E-banking enables 24*7 hour a week F 4557 18 1
0 121
accessibility to the bank service. 47.1 0.0
% 1.793
37.19 1 14.88 0.83 0
A% 84.30 14.88 0.83
E-banking improves relationship with F 19 65 31 5 1 121 2.207
customer and bank. 53.7 0.8
%
15.70 2 25.62 4.13 3
A% 69.42 25.62 4.96
51
Online transactions reduce the paper
F 1.967
work. 38 53 26 4 0 121
43.8 0.0
%
31.40 0 21.49 3.31 0
A% 75.21 21.49 3.31
E-banking helps to perform F 21 70 25 4 1 121
transaction at lower cost. 57.8 0.8 2.124
%
17.36 5 20.66 3.31 3
A% 75.21 20.66 4.13
Reduction on extra paper cost increase F 21 70 25 4 1 121
revenue of bank. 57.8 1.6 2.099
%
19.01 5 19.01 2.48 5 19.01
A% 76.86 19.01 4.13
Quick transactions and easy access F 28 70 19 3 1 121 2.000
helps to enhance efficiency of bank. 57.8 0.8
%
23.14 5 15.70 2.48 3
A% 80.99 15.70 3.31
Likewise, majority of the respondents (75.21 percent) agreed that reduction on extra paper
cost increase revenue of bank. Some respondents (4.13 percent) disagreed that reduction on
extra paper cost increase revenue of bank. However, rest of the respondents (20.66 percent)
were neither agreed nor disagreed with the statement.
Regarding the statement, ‘Increase revenue of bank' majority of the respondents (76.86
percent) agreed that E-banking increases revenue of bank. Some respondents (4.13 percent)
were disagreed that E-banking increases revenue of bank. However, rest of the respondents
Similarly, majority of the respondents (80.99 percent) agreed that E-banking enables quick
transactions and easy access helps to enhance efficiency of bank. Some respondents (3.31
percent) disagreed that E-banking enables quick transactions and easy access helps to
enhance efficiency of bank. However, rest of the respondents (15.70 percent) were neither
agreed nor disagreed with the statement.
The mean of the perceived benefits of E-banking practice in the context of Nepalese
Among them, the statement regarding, “E-banking improves relationship with customer and
bank.” has maximum mean value of 2.207. However, the statement regarding, “E-banking
enables 24*7 hour a week accessibility to the bank service” has lowest mean value of 1.793.
52
Weighted average mean value for perceived benefits of E-banking service is 2.438 which
indicate that perceived benefits of E-banking practices play important role in Nepalese
commercial banks. It means that respondents agree that the perceived benefits affect
positively on the customer satisfaction on Nepalese commercial banks.
Table 2.8 shows the descriptive analysis of perceived benefits for customer satisfaction in the
Table 2.8: Customer satisfaction from E-banking service in the context of Nepalese
commercial banks
This table shows the percentage, frequency and mean of the customer’s perception towards customer
satisfaction from E-banking services in Nepalese Commercial Banks. The statement is measured in five point
Likert scales: 1 as strongly agree, 2 as agree, 3 as neutral, 4 as disagree and 5 as strongly disagree.
Statements 12 3 4 5 N Mean
Reliability on E-banking service of the F 32
69 19 0 1 121 1.917
bank encourages using the service. 57.0 0.8
%
26.45 2 15.70 0.00 3
A% 83.47 15.70 0.83
Easy to access the E-banking service of F 23 81 14 3 0 121 1.975
the bank satisfies the customer. 66.9 0.0
%
19.01 4 11.57 2.48 0
A% 85.95 11.57 2.48
Pleased with the service the bank
F 2.207
offered. 17 69 29 5 1 121
57.0 0.8
%
14.05 2 23.97 4.13 3
A% 71.07 23.97 4.96
Dedicated security software gives F 27 69 23 2 0 121
confidence to use the service. 57.0 0.0 2.000
%
22.31 2 19.01 1.65 0
A% 79.34 19.01 1.65
User-friendly characteristic of e- F 26 70 20 4 1 121
banking service of bank satisfies the 57.8 0.8 2.041
%
customer. 21.49 5 16.53 3.31 3
A% 79.34 16.53 4.13
The table 2.8 reveals that majority of the respondent (83.47 percent) agreed that reliability on
E-banking service of the bank encourages using the service. Some respondents (0.83 percent)
disagreed that reliability on E-banking service of the bank encourages using the service.
statement.
53
The table also shows that majority of the respondent (85.95 percent) agreed that easy to
access the E-banking service of the bank satisfies the customer. Some respondents (2.48
percent) disagreed that easy to access the E-banking service of the bank satisfies the
customer. However, rest of the respondents (11.57 percent) were neither agreed nor disagreed
with the statement.
Similarly, majority of the respondents (71.07 percent) agreed that pleased with the service the
bank offered. Some respondents (4.96 percent) disagreed that service offered by bank pleased
to customer. However, rest of the respondents (23.97 percent) were neither agreed nor
Regarding the statement, ‘Dedicated security software gives confidence to use the service’
majority of the respondents (79.34 percent) agreed that dedicated security software gives
confidence to use the service. Some respondents (1.65 percent) disagreed with the statements.
statement.
Likewise, majority of the respondents (79.34 percent) agreed that user-friendly characteristic
of E-banking service of bank satisfies the customer. Some respondents (4.13 percent) were
disagreed that that user-friendly characteristic of E-banking service of bank satisfies the
customer. However, rest of the respondents (16.53 percent) were neither agreed nor disagreed
with the statement.
The mean of the customer satisfaction of E-banking practice in the context of Nepalese
Among them, the statement regarding, “Reliability on E-banking service of the bank
encourages using the service” has maximum mean value of 2.207. However, the statement
regarding, “Pleased with the service the bank offered” has lowest mean value of 1.917.
Weighted average mean value for customer satisfaction from E-banking service in the context
of Nepalese commercial banks is 2.028. It means that respondents agree that customer
satisfaction on service quality is satisfactory on E-banking practices in the context of
Nepalese commercial banks.
2.2 Correlation analysis
Correlation is a term that refers to the strength of a relationship between two variables. A
strong or high correlation means that two or more variables have strong relationship with
54
each other, while a weak or low correlation means that the variables are hardly related. This
section of the study presents the results and discussions of the correlation analysis. The
correlation measures the strength of the linear relationship between variables. The strength of
linear association between two numerical variables in a sample of population is determined
by the correlation coefficient.
Table 2.9: Kendall’s correlation coefficients matrix

(This table presents Kendall’s Tau coefficients between dependent and independent variables. The correlation coefficients
are based on 121 observations. The dependent variable is CS (Customer Satisfaction). The independent variables are
independent variables C (convenience), R (reliability), EU (ease of use), S (security and privacy), TS (time saving) and PB
(perceived benefits).
Variables Mean S.D. CS C R EU S TS PB
CS 2.208 0.509 1
C 2.269 0.523 0.347** 1
R 2.327 0.519 0.286** 0.455** 1
EU 2.257 0.543 0.361** 0.392** 0.405** 1
S 2.175 0.532 0.316** 0.450** 0.412** 0.334** 1
TS 2.033 0.537 0.328** 0.370** 0.348** 0.342** 0.395** 1
PB 2.031 0.508 0.402** 0.238** 0.227** 0.342** 0.253** 0.559** 1
Note: The asterisk signs (**) and (*) indicate that the results are significant at one percent and five percent
levels respectively.
Table 2.9 shows the Kendall’s correlation coefficients of dependent and independent
variables. The study indicates that convenience is positively correlated to customer
satisfaction. This indicates that increase in convenience leads to increase the customer
satisfaction of E-banking services in Nepalese commercial banks. Likewise, reliability is
positively correlated to customer satisfaction. This indicates that increase in reliability leads
to increase the customer satisfaction of E-banking services in Nepalese commercial banks.
Similarly, the result shows that ease of use is positively correlated to customer satisfaction.
This indicates that betterment in ease of use leads to increase the customer satisfaction of E-
banking services in Nepalese commercial banks. Similarly, security and privacy is positively
correlated to customer satisfaction. This indicates that increase in security leads to increase
the customer satisfaction of E-banking services in Nepalese commercial banks. Similarly, the
study shows that time saving is positively correlated to customer satisfaction. This indicates
that increase in time saving leads to increase the customer satisfaction of E-banking services
in Nepalese commercial banks. Likewise, the result shows that perceived benefits is
positively correlated to customer satisfaction. This indicates that increase in perceived
benefits leads to increase the customer satisfaction of E-banking services in Nepalese
commercial banks.
55
2.3 Regression analysis
Regression analysis is a statistical process for estimating the relationships among variables. It
includes many techniques for modeling and analyzing several variables, when the focus is on
the relationship between a dependent variable and one or more independent variable.
The regression results were estimated where E-banking service factors (i.e. convenience,
reliability, ease of use, security, time saving, perceived benefits) are used as independent
variables and dependent variable is customer satisfaction. The regression of convenience,
reliability, ease of use, security, time saving, perceived benefits on customer satisfaction is
presented in table 2.10.
Table 2.10 shows the regression analysis of convenience, reliability, ease of use, security and
privacy, time saving, perceived benefits and customer satisfaction.
Table 2.10: Regression results of Convenience (S), reliability (R), ease of use (EU),
security and privacy (S), time saving (TS), perceived benefits (PB) and customer
satisfaction (CS)
(The results are based on 121 observations by using linear regression model. The model is CS =β0 + β1 C + β2 R+ β3 EU+
β4 S + β5 TS +β6 PB + e where CS= Customer satisfaction, Convenience (c), reliability (R), ease of use (E), security and
Privacy (S), time saving (TS), perceived benefits (PB).
Regression coefficients of Adj. F-
S.N. Intercept SEE
C R EU S TS PB R2 value
0.867 0.511
1 0.270 .43532 45.351
(4.905)** (6.250)**
1.067 0.413
2 0.718 .46409 25.603
(5.481)** (6.734)**
1.025 0.444
3 0.218 .45040 34.529
(5.837)** (5.876)**
1.195 0.383
4 0.242 0.4711 38.934
(6.636)* (6.24)**
0.717 0.674
5 0.159 0.46891 22.644
(5.401)** (4.759)**
1.242 0. 453
6 0.198 0.45626 30.611
(7.446)** (5.533)**
0.705 0.414 0.164
7 0.282 0.43167 24.568
(3.745) ** (4.421)** (1.737)
0.745 0.347 0.229
8 0.259 0.43848 21.993
(3.745) ** (4.253) ** (2.749) **
1.007 0.176 0.326
9 0.210 0.45283 16.943
(5.583) ** (1.676) (2.932) **
0.579 0.311 -0.015 0.396
10 0.284 0.43110 16.861
(2.781) ** (3.632) ** (-0.132) (3.678) **
0.570 0.373 0.007 0.264
11 0.321 0.41989 19.884
(2.860) ** (4.032) ** (0.067) (2.778) **
Note:
i. Figures in parentheses are t-values.
ii. The asterisk (**), (*) sign indicates that the results are significant at 1 and 5 percent level of significance respectively.
iii. Customer satisfaction (CS) is a dependent variable.
Table 2.10 shows that the beta coefficients for convenience are positive with customer
satisfaction. It indicates that the convenience has a positive impact on customer satisfaction.
56
This finding is similar to the findings of Moon and Kim (2001). Similarly, the beta
coefficients for reliability are positive with customer satisfaction. It indicates that reliability
has a positive impact on customer satisfaction. This finding is consistent with the findings of
Jun (2002). Likewise, the beta coefficients of ease of use are positive with customer
satisfaction. It indicates that ease of use has positive impact on customer satisfaction. This
finding is similar to the findings of Raza and Hassan (2015). Likewise, the beta coefficients
for security and privacy are positive with customer satisfaction. It indicates that security and
privacy has a positive impact on customer satisfaction. This finding is consistent to the
findings of Kumbhar (2011). It indicates that perceived benefits has positive impact on
customer satisfaction. This finding is in contrast to the findings of Al Khasawneh (2015).
Similarly, the beta coefficients for time saving are positive with customer satisfaction. It
indicates that time saving has a positive impact on customer satisfaction. This finding is
consistent with the findings of Das and Ravi's (2021). However, the beta coefficients for
perceived benefits are positive with customer satisfaction.
2.4 Major findings
Based on the analysis of data, the major findings of the study are summarized as follows:
1. Out of 121 respondents, the majority of the respondents (56.2 percent) of this study are
female followed by (43.8 percent) of male respondents.
2. The majority of the respondents (78.5 percent) are students followed by service sector
(11.6 percent) and Business (9.9 percent).
3. Majority of the respondents (65.3 percent) has completed their Bachelors level
followed by (20.7 percent) of the respondents have completed their Intermediate level,
(8.3 percent) of the respondents have completed their Masters level, (4.1 percent) of
the respondents have completed their SLC and (0.8 percent) have completed MPhil.
4. Majority of the respondents (62 percent) have no income, followed by income level of
(15.7 percent) of the respondent have below 20,000, income level of (10.7 percent) of
the respondent have 50,000 and above, (7.4 percent) have income level of 20,000-
35000 and (4.1 percent) have the income range of 35,000- 50,000.
5. Table 2.2 shows correlation coefficients for the relationship between the independent
variables (i.e. convenience, reliability, ease of use, security and privacy, time saving,
perceived benefits) and the dependent variable (i.e. customer satisfaction). The results
imply that the variables have positive relationship with customer satisfaction.
57
6. Table 2.1.2 reveals that the majority of the respondents (66.94 percent) agreed that E-
banking enable customer to save money. Some respondents (11.47 percent) disagreed
that E-banking enable customer to save money. However, the rest of the respondents
7. The table also shows that the majority of the respondents (61.98 percent) agreed that
the bank handles complaints and solves problems quickly through online web-chat.
Some respondents (22.31 percent) disagreed that the bank handles complaints and
solves problems quickly through online web-chat. However, the rest of the respondents
8. Regarding the statement, “Instructions on the bank’s website are very helpful”, the
majority of the respondent (69.42 percent) agreed that instructions on the bank’s
website are very helpful. Some respondents (3.31 percent) disagreed that instructions
on the bank’s website are very helpful. However, the rest of the respondents (27.27
9. Likewise, regarding the statement “The website's language and information are simple
to understand”, the majority of the respondents (69.42 percent) agreed that they find
language and information simple to understand. Some respondents (6.61 percent)
disagreed that they find language and information simple to understand. However, the
rest of the respondents (23.97 percent) were neither agreed nor disagreed about the
statement.
10. Similarly, the majority of the respondents (76.86 percent) agreed that the bank's E-
banking service is easy to use and navigate. Some respondents (5.79 percent)
disagreed that the bank's E-banking service is easy to use and navigate. However, rest
of the respondents (17.36 percent) were neither agreed nor disagreed about the
statement.
11. Table 2.1.3 reveals that the majority of the respondent (53.72 percent) agreed that an
error-free transaction is offered by E-banking software. Some respondents
(3.31percent) disagreed that an error-free transaction is offered by E-banking software.
However, the rest of the respondents (42.98 percent) were neither agreed nor disagreed
about the statement.
the contents of E-banking apps are up to date. Some respondents (5.79 percent)
disagreed that the contents of E-banking apps are up to date. However, the rest of the
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13. Regarding the statement, “E-banking applications provide all details of products and
services”, the majority of the respondent (54.55 percent) agreed that E-banking
applications provide all details of products and services. Some respondents (8.26
percent) disagreed that E-banking applications provide all details of products and
services. However, the rest of the respondents (37.19 percent) were neither agreed nor
disagreed about the statement.
14. Likewise, regarding the statement “The bank provides customer service over the
telephone when needed”, the majority of the respondents (61.98 percent) agreed that
the bank provides customer service over the telephone when needed. Some
respondents (12.4 percent) disagreed that the bank provides customer service over the
telephone when needed. However, the rest of the respondents (25.62 percent) were
15. Similarly, the majority of the respondents (67.77 percent) agreed that they can rely on
the bank of not misusing information. Some respondents (6.61 percent) disagreed that
they can rely on the bank of not misusing information. However, rest of the
16. Similarly, the majority of the respondents (66.94 percent) agreed that customers can
rely on the accuracy of the information provided in E-banking applications of the
bank. Some respondents (7.44 percent) disagreed that customers can rely on the
accuracy of the information provided in E-banking applications of the bank. However,
rest of the respondents (25.62 percent) were neither agreed nor disagreed about the
statement.
17. Table 2.1.4 reveals that the majority of the respondent (76.03 percent) agreed that E-
banking Service of the bank is easy to use. Some respondents (1.65 percent) disagreed
that E-banking Service of the bank is easy to use. However, the rest of the respondents
apps and website of the bank is properly designed. Some respondents (4.13 percent)
disagreed that apps and website of the bank is properly designed. However, the rest of
the respondents (23.14 percent) were neither agreed nor disagreed about the statement.
19. Similarly, majority of the respondents (58.68 percent) agreed that customer are aware
of different features of E-banking. Some respondents (13.22 percent) disagreed that
customer are aware of different features of E-banking. However, rest of the
respondents (28.10 percent) neither agreed nor disagreed with the statement.
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20. Similarly, majority of the respondents (69 percent) agreed that easy to find the policy
and notice statements in the bank’s website. Some respondents (9 percent) disagreed
that easy to find the policy and notice statements in the bank’s website. However, rest
of the respondents (22 percent) were neither agreed nor disagreed with the statement.
21. Likewise, majority of the respondents (70.25 percent) agreed that speed to login and
logout of the bank apps and website is fast. Some respondents (6.61percent) disagreed
that speed to login and logout of the bank apps and website is fast. However, the rest
of the respondent (23.14 percent) were neither agreed nor disagreed with the
statement.
22. The table 2.1.5 reveals that the majority of the respondent (81.82 percent) agreed that
every transaction is alerted or informed by the bank through texts and letters. Some
respondents (0.83 percent) disagreed that every transaction is alerted or informed by
the bank through texts and letters However, rest of the respondents (17.36 percent)
23. The table also shows that majority of the respondent (80.17 percent) agreed that the
bank's E-banking service advises creating strong passwords. Some respondents (2.48
percent) disagreed that the bank's E-banking service advises creating strong
passwords. However, rest of the respondents (17.36 percent) were neither agreed nor
24. Similarly, majority of the respondents (78.51 percent) agreed that the transaction done
is encrypted. Some respondents (5.79 percent) disagreed that the transaction done is
encrypted. However, rest of the respondents (15.70 percent) were neither agreed nor
25. Likewise, regarding the statement "Data and transactions of customer is easily
accessible to others" majority of the respondents (52.89 percent) agreed that data and
transactions of customer is easily accessible to others. Some respondents (23.14
percent) disagreed that data and transactions of customer is easily accessible to others.
However, rest of the respondents (23.97 percent) were neither agree nor disagree with
the statement.
26. Similarly, majority of the respondents (69.42 percent) agreed about session timeouts
occurred in the bank’s website after some times. Some respondents (9.92 percent)
disagreed about session timeouts occurred in the bank’s website after some times.
However, rest of the respondents (20.66 percent) were neither agreed nor disagreed
with the statement.
60
27. The table 2.1.6 reveals that majority of the respondents (81.82 percent) agreed that the
number of clients visiting branch offices has decreased due to E-banking. Some
respondents (0.83 percent) disagreed that the number of clients visiting branch offices
has decreased due to E-banking. However, rest of the respondents (17.36 percent) were
28. The table also shows that majority of the respondent (69.42 percent) agreed that they
does not need to visit the branch office to request the checkbook. Some respondents
(11.57 percent disagreed that they does not need to visit the branch office to request
the checkbook. However, rest of the respondents (19.01 percent) were neither agreed
nor disagreed with the statement.
29. Similarly, majority of the respondents (71.90 percent) agreed that they can easily use
E-banking applications which saves time. Some respondents (5.79 percent) disagreed
that they can easily use E-banking applications which saves time. However, rest of the
30. Likewise, majority of the respondents (85.12 percent) agreed that customer can
transfer money within a same bank or other bank with a few clicks. Some respondents
(4.96 percent) disagreed that customer can transfer money within a same bank or other
bank with a few clicks. However, rest of the respondents (9.92 percent) were neither
agreed nor disagreed with the statement.
31. Regarding the statement, "Customer can transfer money within a same bank or other
bank with a few clicks" majority of the respondents (84.30 percent) agreed that they
can transfer money within a same bank or other bank with a few clicks. Some
respondents (4.13 percent) disagreed that they can transfer money within a same bank
or other bank with a few clicks. However, rest of the respondents (11.57 percent) were
32. The table 2.1.7 reveals that majority of the respondent (84.30 percent) agreed that E-
banking enables 24*7 hour a week accessibility to the bank service. Some respondents
(0.83 percent) disagreed that E-banking enables 24*7 hour a week accessibility to the
bank service. However, rest of the respondents (14.88 percent) were neither agreed nor
33. The table also shows that majority of the respondent (69.42 percent) agreed about the
improved relationship with customers and bank. Some respondents (4.96 percent)
disagreed about the improved relationship with customers and bank. However, rest of
the respondents (25.62 percent) were neither agreed nor disagreed with the statement.
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34. Similarly, majority of the respondents (75.21 percent) agreed that E-banking helps to
perform transaction at lower cost. Some respondents (3.31 percent) disagreed that E-
banking helps to perform transaction at lower cost. However, rest of the respondents
(21.49 percent) were were neither agreed nor disagreed with the statement.
35. Likewise, majority of the respondents (75.21 percent) agreed that reduction on extra
paper cost increase revenue of bank. Some respondents (4.13 percent) disagreed that
reduction on extra paper cost increase revenue of bank. However, rest of the
36. Regarding the statement, ‘Increase revenue of bank' majority of the respondents (76.86
percent) agreed that E-banking increases revenue of bank. Some respondents (4.13
percent) were disagreed that E-banking increases revenue of bank. However, rest of
the respondents (19.01 percent) were neither agreed nor disagreed with the statement.
37. Similarly, majority of the respondents (80.99 percent) agreed that E-banking enables
quick transactions and easy access helps to enhance efficiency of bank. Some
respondents (3.31 percent) disagreed that E-banking enables quick transactions and
easy access helps to enhance efficiency of bank. However, rest of the respondents
38. The table 2.1.8 reveals that majority of the respondent (83.47 percent) agreed that
reliability on E-banking service of the bank encourages using the service. Some
respondents (0.83 percent) disagreed that reliability on E-banking service of the bank
encourages using the service. However, rest of the respondents (15.70 percent) were
39. The table also shows that majority of the respondent (85.95 percent) agreed that easy
to access the E-banking service of the bank satisfies the customer. Some respondents
(2.48 percent) disagreed that easy to access the E-banking service of the bank satisfies
the customer. However, rest of the respondents (11.57 percent) were neither agreed nor
40. Similarly, majority of the respondents (71.07 percent) agreed that pleased with the
service the bank offered. Some respondents (4.96 percent) disagreed that service
offered by bank pleased to customer. However, rest of the respondents (23.97 percent)
41. Regarding the statement, ‘Dedicated security software gives confidence to use the
service’ majority of the respondents (79.34 percent) agreed that dedicated security
software gives confidence to use the service. Some respondents (1.65 percent)
62
disagreed with the statements. However, rest of the respondents (19.01 percent) were
42. Likewise, majority of the respondents (79.34 percent) agreed that user-friendly
characteristic of E-banking service of bank satisfies the customer. Some respondents
(4.13 percent) were disagreed that that user-friendly characteristic of E-banking
service of bank satisfies the customer. However, rest of the respondents (16.53
percent) were neither agreed nor disagreed with the statement.
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Chapter III
Summary and Conclusion
This chapter presents the brief summary of the entire study and highlights the major findings
of the study. Additionally, the major conclusions are discussed in separate section of this
chapter which is followed by some implications and the recommendations regarding the E-
banking service and its impact on customer satisfaction in Nepalese commercial banks.
Finally, the chapter ends with the scope of the future study in the same field.
3.1 Summary
Technology has succeeded in making various aspects of life easier for the societies of today
(Rust and Oliver, 1994). More importantly, it has become a fundamental element in
improving the quality of services in general and E-banking services in particular (Joseph and
Stone, 2003). E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels (Shahriari, 2014). Consumer satisfaction is a phenomenon of particular importance
in the evaluation process of a shopping, consumption, or product or service user experience
and is therefore vital in long-term consumer responses (Grönroos, 1991). Satisfaction means
a feeling of pleasure because one has something or has achieved something. Satisfaction is an
action of fulfilling a need, desire, demand or expectation (Magesh, 2010). Banks, in general,
have attempted to build customer satisfaction through providing better products and services,
and at the same time, reducing operating costs (Padachi et al., 2007).
Casaló et al. (2008) revealed that higher levels of website usability might lead to higher
levels of consumer affective commitment to the website. It also leads to direct, positive and
significant relationship between satisfaction in previous interactions and the consumer
commitment to a financial services website. Electronic banking is a profitable business as
well as a service, along with which it carries a risk to customers and banks, it is very
important to understand what customers want and what is being provided by the financial
institutions (Banstola, 2007). Satisfaction can also be described as the feedback of a post
purchase assessment of certain service/ product’s quality, and compared with the expectation
of the prior-purchasing stage (Kotler and Keller, 2011).
Reliability, privacy, security, website design, and customer service and support as the main
dimensions of E-banking service quality and customer satisfaction (Amin, 2016). The use
64
of E-banking services improves customer satisfaction in the banking sector. They derive a
simpler formula and conclude that higher customer satisfaction is highly dependent on
receiving better and higher quality service (Asiyanbi and Ishola, 2018). Customers seek
professional E-banking assistance and support if they have problems using E-banking
services (Blut et al., 2015). Customers are more likely to trust service providers when they
receive prompt replies to their questions and can clearly see that the service provider has a
hassle-free and transparent recovery policy (Quach et al., 2016).
innovation to meet users' needs using different feature availability on the web site. For
instance, the provision of interactive loan calculators, exchange rate converters, and mortgage
calculators on the web sites draw the attention of both users and non-users into the bank's
website.
has become a key element of business strategy. Wind (2001) demonstrated that numerous
banks are roused to actualize E-banking by components identifying with augmenting their
profit through expansion market scope. Oliver (1980) explained that the feeling of
satisfaction arises when customers compare their perception of actual product/ service
performance with expectations. Banking industry has been in a process of significant
transformation. They are the main intermediaries between those with excess money
(depositors) and those individuals and businesses with viable projects but requiring money
for their investment (creditors). The force behind this transformation of the banking industry
is innovation in information technologies (Abaenewe et al., 2013). The banking industries
play a significant role in supporting economic development through efficient financial
services (Dube et. al., 2009).
65
This study deals with the issues like: What is the perception regarding convenience,
reliability, ease of use, security and privacy, time saving, perceived benefits with customer
satisfaction ?; Is there any correlation of convenience, reliability, ease of use, security and
privacy, time saving, perceived benefits with customer satisfaction in Nepalese commercial
banks?; What is the impact of convenience, reliability, ease of use, security and privacy, time
saving, perceived benefits with customer satisfaction in Nepalese commercial banks?; Do
have significant impact on customer satisfaction in Nepalese commercial banks?; Whether
convenience, reliability, ease of use, security and privacy, time saving, perceived benefits are
correlated with customer satisfaction?; Which factors among convenience, reliability, ease of
use, security and privacy, time saving and perceived benefits need to be improved to enhance
customer satisfaction?; Which is the most significant factor that affects customer satisfaction
in Nepalese commercial banks?
The major objective of this study is to determine the impact of convenience, reliability, ease
of use, security and privacy, time saving, perceived benefits with customer satisfaction in
Nepalese commercial banks. The specific objectives of this study are: to analyze the impact
of convenience, reliability, ease of use, security and privacy, time saving, perceived benefits
with customer satisfaction in Nepalese commercial banks, to determine the relationship of
with customer satisfaction in Nepalese commercial banks, to assess the impact of
customer satisfaction and to examine the most significant factor that affects customer
This study has taken independent variables such as convenience, reliability, ease of use,
security and privacy, time saving and perceived benefits whereas customer satisfaction as
dependent variables to measure the impact of electronic banking service on customer
satisfaction of Nepalese commercial banks.
The study is based on primary data from 121 respondents. The study has employed number of
statistical and economic tools such as regression analysis and correlation analysis, to analyze
the relationship trend between the customer satisfaction of banks and factors of E-banking
services. The study has also employed descriptive research design and causal comparative
research design to deal with the issues associated with the impact of E-banking services on
66
customer satisfaction of Nepalese commercial banks. The relationship between dependent
and independent variables are analyzed in a single step and multi- step regression analysis.
Customer satisfaction is the dependent variable whereas convenience, reliability, ease of use,
security and privacy, time saving, perceived are the independent variables. Statistical package
for social science (SPSS) software is used to analyze the data and to get the required
information and results.
3.2 Conclusion
The impact of technology on the financial sector, including commercial banks in Nepal, has
been significant. The adoption of information and communication technology concepts,
techniques, policies, and implementation strategies has become crucial for banking services.
This technological advancement has led to a dynamic business environment in the financial
sector, which necessitates commercial banks to provide services to their customers through
the internet. The major conclusion of this study is that higher the convenience, reliability,
ease of use, security and privacy, time saving and perceived benefits, higher would be the
customer satisfaction in Nepalese commercial banks. The study also concludes that the most
influencing factor is reliability followed by convenience and security and privacy that
explains the level of customer satisfaction on Nepalese commercial banks.
3.3 Recommendation
Based on the findings of the study, the following recommendations have been forwarded:
1. The study revealed a positive impact of reliability on customer satisfaction of Nepalese

commercial banks. Hence, commercial banks willing to enhance its customer
satisfaction should focus more on reliability of E-banking services.
2. The study revealed that convenience has a positive effect on customer satisfaction of
Nepalese commercial banks. Hence, the commercial banks willing to enhance its
customer satisfaction should give due consideration to convenience on E-banking
services.
3. Similarly, the study found that time saving has a positive impact on customer
satisfaction of Nepalese commercial banks. Hence, commercial banks willing to
increase its customer satisfaction should focus on ways to increase the time saving
factor in E-banking Services.
67
4. The study also revealed that perceived benefits has a positive effect on customer
satisfaction of Nepalese commercial banks. Hence, the commercial banks willing to
enhance its customer satisfaction should give due consideration on perceived benefits
on E-banking services.
5. Likewise, the study showed that ease of use has a positive impact on customer
enhance its customer satisfaction should focus on the ease of use of E-banking
services.
6. Similarly, the study also revealed that security has a positive impact on customer
increase its customer satisfaction should understand the importance of security in E-
banking services.
3.4 Scope for the future research
The study has examined the effect of convenience, reliability, ease of use, security and
privacy, time saving and perceived benefits on customer satisfaction of Nepalese commercial
banks. There remains enough ground of scope in terms of data, models and methodology for
studies in days to come. The study remains enough ground for the further studies, which are
listed below:
1. This study includes limited respondents that uses E-banking of few commercial banks.
Hence, the future studies can be carried out by researchers on targeted respondents
including development banks, finance companies and insurance companies too.
2. The proposed study aims to explore the perception of customers towards the e-
commerce services offered by commercial banks, as well as the benefits and
challenges faced by customers who utilize these services. This research will provide
valuable insights into the customer perspective, complementing the existing focus on
the banks' adoption of e-commerce products and services.
3. Only limited statistical and financial tools have been used in the study. Hence, the
future studies can be carried out by including more statistical and performance
measurement tools.
4. Despite the fact that the scope of the research is limited, it may be extended to
consumers throughout Nepal with ease in the near future. There should be a better
understanding of other crucial aspects of information technology.
68
5. Similarly, if future studies investigate the connection between electronic banking and
the financial success of Nepalese banks, the results of this study will be helpful to
investors, decision-makers, businesses, regulators, and other relevant parties. As a
result, this work will provide future academics interested in researching this important
topic with additional understanding.
6. Future research can use a bigger sample size to produce predictions about the effect of
information technology on the profitability of Nepalese commercial banks that are
significantly more reliable.
7. The survey did not specifically address the link between customer satisfaction and
client retention. Future research can thus be done to examine the connection between
these two constructs.
69
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Appendix
Dear Respondent,
This survey entitled “Impact of E-banking practices on customer satisfaction in Nepalese

commercial banks” has been undertaken as a partial fulfillment of the requirements for the
Bachelors in Business Administration (BBA) of Pokhara University. The major objective of
the survey is to examine the Impact of E-banking practices on customer satisfaction in
Nepalese commercial banks. I would like to humbly request you to fill up the questionnaire in
such a way that actually reflects your concern. Please be confident that all your responses will
be absolutely kept confidential and feel free to answer the given questions according to your
understanding.
Your participation in the study will be very highly appreciated.
Warm Regards,
Prakash Regmi
BBA 6th semester
Uniglobe College, Kathmandu, Nepal
Pokhara University
Section A: Respondent’s information
Gender
o Male
o Female
o Others
Education:
o SLC
o Intermediate
o Bachelors
o Masters
o MPhil
o PhD
Occupation:
o Student
o Business
o Service
78
o Others
Income Level (monthly)
o None
o Below 25000
o 25000-38000
o 38000-50000
o 50000 and above
Name of the Bank Account Maintained at: ………………………………
Section B: Customers Perception on E-banking Services
To what extent do you agree with the following statements?

[1=strongly agree, 2=agree, 3=neither agree nor disagree (Neutral), 4= disagree, 5=strongly disagree]
Statements 1 2 3 4 5
Convenience
a) Customers can save money through E-banking.
b) The bank handles complaints and solves problems quickly through online
web-chat.
c) Instructions provided on the bank's website are useful and informative.
d) The website's language and information are simple to understand.
e) The bank's E-banking service is easy to use and navigate.
Reliability
a) An error-free transaction is offered by E-banking software.
b) The contents of E-banking apps are up to date.
c) E-banking applications provide all details of products and services.
d) The bank provides customer service over the telephone when needed.
e) You can rely on the bank of not misusing information.
f) Can rely on the accuracy of the information provided in E-banking
applications of the bank.
Ease of use
a) E-banking Service of the bank is easy to use.
b) Apps and website of the bank is properly designed.
c) Clients are aware of the many benefits of online banking.
d) The policy and notice statements are easily accessible on the bank's
website.
e) Speed to login and logout of the bank apps and website is fast.
Security and privacy
a) Every transaction is alerted or informed by the bank through texts and
letters.
b) The bank's E-banking service advises creating strong passwords.
c) The completed transaction is encrypted.
d) Data and transactions of customer is easily accessible to others.
e) The bank's website had session timeouts occasionally.
Time Saving
a) The number of clients visiting branch offices has decreased due to E-
banking.
b) The customer does not need to visit the branch office to request the
checkbook.
c) E-banking has helped customers to dispute the unauthorized transaction in
79
real time.
d) Customer can easily use E-banking applications which saves time.
e) Customer can transfer money within a same bank or other bank with a few
clicks.
Perceived Benefits
a) E-banking enables 24*7 hour a week accessibility to the bank service.
b) E-banking improves relationship with customer and bank.
c) Online transactions reduce the paper work.
d) E-banking helps to perform transaction at lower cost.
e) Reduction on extra paper cost increase revenue of bank.
f) Quick transactions and easy access helps to enhance efficiency of bank.
Customer Satisfaction
a) Reliability on E-banking service of the bank encourages using the service.
b) Easy to access the E-banking service of the bank satisfies the customer.
c) Pleased with the service the bank offered.
d) Dedicated security software gives confidence to use the service.
e) User-friendly characteristic of e- banking service of bank satisfies the
customer.
Thank you very much for your kind information and cooperation.
80

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Impact of E-banking practices on customer satisfaction in

Nepalese Commercial Banks

A Project Report Submitted to

Submitted for the degree of

The study entitled “Impact of E-banking practices on customer satisfaction in Nepalese

Table 1.1: Review of past literature.........................................................................................11

Figure 1.1: Conceptual framework..........................................................................................24

ANOVA Analysis of Variance

SPSS Statistical Package for Social Scientists

BFIs Bank and Financial Institutions

ICTs Information and Communications Technologies

ATM Automated Teller Machine

SMS Short Message Service

E-Banking Electronic Banking

EFT Electronic Funds Transfer

SEE Standard error of estimate

KYC Know Your Customer

SMS Short Message Service

OTP One-Time Password

1.1 General background

Consumer satisfaction is a phenomenon of particular importance in the evaluation process of

1.2 Statement of the problem

1.3 Objective of the study

1.4 Significance of the study

The study is conducted to understand the impact of E-banking practices on customer

1.5 Review of literature

A literature review is an in-depth evaluation and analysis of existing literature, research

1. Review of major literature

1.5.1 Review of past literature

Table 1.1: Review of past literature

Study Major findings

1.5.2 Review of current literature

Table 1.2: Review of recent literature

Study Major findings

Buretta (2019) investigated the impact of E-banking on customer satisfaction in Tanzania.

1.5.3 Review of Nepalese literature

Table 1.3: Review of Nepalese literature

Study Major findings

Maharjan (2021) investigated the effect of electronic banking services on customer

1.6 Conceptual framework

In other words, conceptual framework is a basic conceptual structure organized around a

1.7 Operational definitions and hypothesis

1.7.1 Dependent variable

Customer pleasure is the contributor of absolute gains of a quality revolution, which is

1.7.2 Independent variables

Convenience is a dimension of E-banking that enables customers to access E-banking

Security and privacy

1.8 Research methodology

Research design is a plan, structure and strategy of investigation conceived so as to obtain

Research design is a plan, structure and strategy of investigation conceived so as to obtain

1.8.2 Nature and sources of data

1.8.3 Data collection instruments

1.8.4 Population and sample

1.8.5 Model specification

1.8.6 Validity and reliability

Table 1.4: Coefficient of Cronbach’s alpha

Variables Number of questions Cronbach’s alpha

1.10 Organization of the study

Data analysis and major findings

2.1 Presentation and analysis of data

2.1.1 Profile of respondents

This section therefore describes the demographic characteristics of the respondents of

Figure 2.2: Academic qualification of respondents

Figure 2.3: Income level wise classification of respondent