INTRODUCTION:

The precursor for the modern home online banking services were the distance banking services over electronic media from the early 1980s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. Home banking can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used. The UK's first home online banking services was set up by Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983. The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Homelink') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in October 1994. Today, many banks are internet only banks. Unlike their predecessors, these internet only banks do not maintain brick and mortar bank branches. Instead, they typically differentiate themselves by offering better interest rates and online banking features.

Features: E-banking solutions have many features and capabilities in common, but traditionally also have some that are application specific. The common features fall broadly into several categories
y

Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer, apply for a loan, new account, etc.) o Payments to third parties, including bill payments and telegraphic/wire transfers o Funds transfers between a customer's own transactional account and savings accounts o Investment purchase or sale o Loan applications and transactions, such as repayments of enrollments Non-transactional (e.g., online statements, cheque links, cobrowsing, chat) o Viewing recent transactions o Downloading bank statements, for example in PDF format o Viewing images of paid cheques Financial Institution Administration Management of multiple users having varying levels of authority Transaction approval process.

y y y

Features commonly unique to Internet banking include: y Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

NEED OF STUDY:

There has been vast improvement in banking sector. With upcoming of globalization and development of economy the role of bank has increased. Moreover there are many private banks who are coming into existence. Now, in current business environment everyone is very concerned about there time. So in order to ensure customer service and satisfaction the online banking came into existence. The purpose of this to allow the customers to do transaction from wherever and whenever they want to, hence saving time and enhancing the efficiency. In this report study has been done to measure the effectiveness and satisfaction of customer with advent of online banking. Various aspect have been discuss and through extensive literature survey has been done to study the subject of topic.

Review of literature:

y Jayawardhena. 2004. The study developed a battery of measures that can be used to measure customer service quality in e-banking services. The study showed that service quality in e-banking can be measured using twenty-one parsimonious measures spread across five dimensions, namely, access, Website interface, trust, attention and credibility. The article discussed the importance of these findings for practitioners and for future research on service quality in internet delivered services. y Ba and Johansson, 2008. In the paper, they proposed viewing the interface between online buyers and sellers through the lens of service management to identify possible determinants of online customer satisfaction. A companys website is considered its electronic service delivery system. They looked at this electronic service delivery system from its process point of view. Their findings indicate that as the electronic service delivery system process improves, a customers perception of the websites ease of use increases, leading to increased service value and perceived control over the process, which increases customer satisfaction. The research provided evidence that the technological capabilities embedded in the website processes are an important factor in determining service quality and ultimately online customer satisfaction. y Lio and Cheung, 2008. The study found out that the potential exists for Internet banking to become significantly more important in the increasingly technology- and information-based global economy. Financial institutions must therefore deliver ever-better service quality in their online operations and products. Given that a large number of service-quality attributes can potentially affect consumer attitudes toward Internet banking, the theory of bounded rationality suggested that the high decision cost entailed in the pursuit of service-quality enhancement in each and every direction would be reduced if the opportunity set is rationally made smaller. To this end, they have proposed a framework under which service-quality attributes are reduced to a core subset on the basis of both analytical and empirical considerations. The resulting core framework was then applied to decisioncost-effective and empirically prioritized management in Internet banking,

especially with regard to directions in market development. If bank-user perceptions and preferences are found to change with regard to certain core attributes, empirical results obtained in this exercise can be exploited by marketing managers to attract more customers to online banking. y Gupta and Islamia, 2008.Researches showed that impact of Internet banking on cost savings, revenue growth and increased customer satisfaction on Industry is tremendous and can be a potential tool for building a sound strategy. However, it has raised many public policy issues before the banking regulators and government agencies. Interestingly, reliable and systematic information on the scope of Internet banking in Indian context is still not sufficient, particularly what it means to the consumers and the bankers. The paper filled significant gaps in knowledge about the consumers perspective of Internet banking, trace its present growth and project the likely scenario. The paper presented the data, drawn from a survey of Internet banking consumers and the services providers (banks) that offer Internet banking and develops a functional model for maximizing value to the consumers, which the banks may choose to adopt Internet banking strategically. The paper identified the weaknesses of conventional banking and explores the consumer awareness, use patterns, satisfaction and preferences for Internet banking vis--vis conventional form of banking and also highlighted the factors that may affect the banks strategy to adopt Internet banking. It also addressed the regulatory and supervisory concerns of Internet banking. y Santouridisa, Trivellas and Reklitis, 2009. The study investigated internet service quality and its impact on customer satisfaction in the banking context. Internet service quality was operationalised by adopting an instrument, which was based on SERVQUAL and consists of six dimensions, namely assurance, quality of information, responsiveness, web assistance, empathy and reliability. The field research, which resulted in 184 valid questionnaires, was conducted among internet banking customers in Greece, a country with relatively low internet penetration rate. The findings confirmed, to a great extent, the validity of the instrument and highlight the above average performance of service quality delivered by Greek banks via the internet. All quality dimensions were proved to be antecedents of overall customer satisfaction, with reliability having the most significant impact.

Furthermore, quality of information was a crucial dimension driving the customer intentions for internet banking future usage. Finally, familiarisation-related dimensions, such as empathy and web assistance, play a very important role in customers willingness to recommend the service to other people.

y Wu, Lin, Li and Lin, 2010. The study was exploratory in nature, intended to develop a comprehensive conceptual framework from which researchers could empirically examine and explain the relationship between customers perceived usefulness of online banking and the relative advantages of online banking, its website quality, knowledge & support, information quality and customer trust in Taiwan. Multiple regressions were conducted to test the above-mentioned relationships. The statistical results showed that relative advantages, trust and perceived ease of use .were more important and critical to customers intension of online banking adoption. This study further offered a marketing insight for managers to effectively deploy online system and service. In designing online banking services, software developers should pay close attention to informative content that will be, above all, perceived by customers as useful and relevant. y Kheng Mahamad, Ramayah and Mosahab, 2010. The studies needed to focus on the changing role of the banking system and its dynamic financial market. The underlying model of SERVQUAL (Parasuraman et al., 1988) with five dimensions was used by the research to evaluate the impact of service quality on customer loyalty among bank customers in Penang, Malaysia with customer satisfaction mediating these variables. The findings showed that improvement in service quality can enhance customer loyalty. The service quality dimensions that play a significant role in this equation were reliability, empathy, and assurance. The findings indicated that the overall respondents evaluate the bank positively, but still there were rooms for improvements. y Armesh, Salarzehi, Yaghoobi, Heydari and Nikbin, 2010. The purpose of the research was to investigate the effects of product value, E-service quality, effective cost, customer service, product customization, usability

and site design on customer satisfaction and loyalty in online marketing. Data were gathered from 104 respondents who were the literate Malaysian and the foreigners in Malaysia that were able to read and write and hence capable of using internet and its facilities. The results showed that there was a significant correlation between product value, E-service quality, effective cost, customer service, product customization, usability and site design and customer satisfaction. The results also revealed that there is a significant correlation between loyalty in online marketing and customer satisfaction. y Anderson and Swaminathan, 2011. The research investigated the factors that drive customer satisfaction and loyalty in e-markets. Employing qualitative interviews and field research, they identified key factors that drive customer satisfaction in e-businesses and used the partial least squares path modeling technique to evaluate their effect. Six factors were found to significantly affect satisfaction in e-businesses: adaptation, commitment, network, assortment, transaction ease, and engagement. Further, they discovered that the positive effect of satisfaction on loyalty is moderated by customer trust and inertia. At lower levels of inertia and trust, customer satisfaction has a greater effect on loyalty. Actionable recommendations were provided for ebusiness managers to enhance customer satisfaction. y Baskar and Ramesh, 2010. Banks have expanded the scope of competition to an e-environment with online banking. The commercial banks in India were introducing online banking to their customers in order to retain their customers from the competition given by foreign banks. Even though, these are so many empirical studies related online banking service quality and customers satisfaction. Hence, the study had an attempt to fill up the research gap. The findings of the study revealed that the online customers service quality, online information system quality and banking service product quality were significantly and positively influencing the customer satisfaction. y Alroaia, Hemati and Abdi, 2011. The aim of the article was to determine the extent to which customer satisfactions in the e-banking in Semnan area had organizational and customer readiness for developing their services. One of the most important sectors that played key role for grasping developed condition was banking sector. Banks like other institutions also looked for

augmenting their profits and increasing their strength by expansion. The designing of bank must involve selection of those that have sufficient success potential. Hence, from several factors of success, the following three criteria factors have been: selected-customer satisfied, one dimensional, and product fully functional. These factors offered three question multi criteria group extracted from a 16 norms. Also, three criteria factors have been studied over a period of five years and important criteria for evaluating the norms. The Analytical Hierarchy Process (AHP) has been employed to calculate the success potential of each norm. The empirical data comprised the longitudinal survey of the agricultural banking of the Semnan province. The paper, also, found that product fully functional is placed as the first priority. y Eriksson, Kerem and Nilsson, 2005. The purpose of the paper was to study technology acceptance of internet banking in Estonia, an emerging east European economy. Design/methodology/approach - The present paper modified the technology acceptance model and applies it to bank customers in Estonia, because Estonia, a country with a developing economy, had focused on internet banking as an important distribution channel. The findings suggested that internet bank use increases insofar as customers perceive it as useful. The perceived usefulness is central because it determines whether the perceived ease of internet bank use will lead to increased use of the internet bank. Put differently, a well-designed and easy to use internet bank may not be used if it is not perceived as useful. They thus concluded that the perceived usefulness of internet banking was, for banks, a key construct for promoting customer use. They also suggested that models of technology acceptance should be re-formulated to focus more on the key role of the perceived usefulness of the service embedded in the technology. y Laforet and Li, 2005. The aim of the study was to investigate the market status for online/mobile banking in China. With the recent and forecasted high growth of Chinese electronic banking, it had the potential to develop into a world-scale internet economy and requires examination. The demographic, attitudinal and behavioural characteristics of online and mobile bank users were examined Respondents from six major Chinese cities participated in the consumer survey. The results showed Chinese

online and mobile bank users were predominantly males, not necessarily young and highly educated, in contrast with the electronic bank users in the West The issue of security was found to be the most important factor that motivated Chinese consumer adoption of online banking. Main barriers to online banking were the perception of risks, computer and technological skills and Chinese traditional cash-carry banking culture. The barriers to mobile banking adoption were lack of awareness and understanding of the benefits provided by mobile banking. The study offered an insight into online/mobile banking in China, which has not previously been investigated. Distinct differences and common trends between Chinese and other countries were observed . y Jun and Cai, 2001. The study focused on issues associated with Internet banking service quality. Content analysis of customer anecdotes of critical incidents in Internet banking; Identification of a total of 17 dimensions of Internet banking service quality, which can be classified into three broad categories, including customer service quality, banking service product quality, and online systems quality; Derived dimensions for customer service quality, such as reliability, responsiveness, competence, and courtesy; Derived dimensions for online systems quality, such as content, accuracy, ease of use, timeliness, aesthetics, and security; Derived dimensions for banking service product quality, such as product variety/diverse features; Conclusion that, in terms of frequency of references to the 17 dimensions, no substantial differences exist between Internet-only banks and traditional banks offering Internet banking service. y Ahmed, Khalil (2011). They study purpose that Online banking can provide a reliable service to the customers for which make them happy. Online banking service is a comparative advantage and can improve relationship with customers. The purpose of this study is to understand the impact of ESERVQUAL model on customer satisfaction in Bank Islam Malaysia Brhd (BIMB). Four service quality dimensions namely tangibles, reliability, responsiveness, assurance, and empathy have been established based on the SERVQUAL model modified by Han and Beak (2004). These variables have been tested to explore the relationship between online service quality and the customer satisfaction. The data were gathered through a questionnaire with 21 customers. The study shows that these dimensions are

good to measure the relationship between online service and customer satisfaction. The study also explores that empathy, reliability, and responsiveness have more contribution to satisfy the customers of Bank Islam online banking service. y Sadiq and Shanmugham (2001). This paper examines the current trends in the e-commerce revolution that has set in motion in the Malaysian banking sector and reports on an empirical research that was carried out in Malaysia to study the customers preference for electronic banking and the factors, which they considered influenced the adoption of electronic banking. Results based on the analysis of data relating to 300 respondents indicate that while there is no significant differences between the age and educational qualifications of the electronic and conventional banking users, some differences exists on other demographic variables. Analysis further reveals that accessibility of Internet, a wareness of e-banking, and customers reluctance to change are the factors that significantly affected the usage of ebanking in Malaysia. The paper discusses on the implications of these. Limitations of the study are highlighted and further research directions are suggested. y Ali and Akter (2010) argued that a transitional period in the banking sector of Bangladesh has been passing through since shifting from the traditional banking system to the online banking system. These comments indicate that gradually electronic banking is gaining its importance in Bangladesh. Customers liking is necessary for the banking sector to elevate profitability, business expansion and accomplishment. Now-a day s banking sector is modernizing and expanding its hand in different financial events every day. At the same time the banking process is becoming faster and easier. In order to survive in the competitive field of the banking sector commercial banks are looking for better service opportunities to provide their customer. The paper has been undertaken mainly to find out whether ebanking can satisfy the customers or not. y Arunachalam and Sivasubramanian (2007)

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II.

Ba, S. and Johansson, W.C. (2008), An Exploratory Study of the Impact of e-Service Process on Online Customer Satisfaction, Production and Operations Management, Vol. 17, No. 01, pp. 107-119.

III.

Lio, Z. and Cheung, M.T. (2008), Measuring Consumer Satisfaction In Internet Banking: A Core Framework, Communications of the ACM, Vol. 51, No. 04, pp. 47-51.

IV.

Gupta, P.K. and Islamia, J.M. 2008. Internet Banking in India Consumer Concerns And Bank Strategies, Global Journal Of Business Research, Vol. 02, No. 01, pp. 43-51.

V.

Santouridisa, I., Trivellas, P. and Reklitis, P. (2009), Internet service quality and customer satisfaction: Examining internet banking in Greece, Total Quality Management, Vol. 20, No. 02, pp. 223-239.

VI.

Wu, H.Y., Lin, C.C., Li, C.L. and Lin, H.H. (2010), A Study Of Bank Customers Perceived Usefulness Of Adopting Online Banking, Global Journal Of Business Research, Vol. 04, No. 03, pp. 101-108.

VII.

Kheng, L.L., Mahamad, O., Ramayah, T. and Mosahab, R. (2010), The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia, International Journal of Marketing Studies, Vol. 2, No. 2, pp. 57-66.

VIII.

Armesh, H., Salarzehi, H., Yaghoobi, N.M., Heydari, A. and Nikbin, D. (2010), Impact of Online/Internet Marketing on Computer Industry in Malaysia in Enhancing Consumer Experience, International Journal of Marketing Studies, Vol. 2, No. 2, pp. 75-86.

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Anderson, R.E. and Swaminathan, S. (2011), Customer Satisfaction And Loyalty In E-Markets: A Pls Path Modeling Approach, Journal of Marketing Theory and Practice, Vol. 19, No. 2, pp. 221234.

X.

Baskar, S. and Ramesh, M. (2010), Growth, Finance And Regulation, Perspectives of Innovations, Economics & Business, Vol. 6, Issue 3, pp. 4551.

XI.

Alroaia, Y.V., Hemati, M. and Abdi, K. (2011), Priority of Factors Affected on Customers Satisfaction in the E-Banking by Using Kano Model and Analytical Hierarchy Process: A Case of Iranian Commercial Bank, Journal of Modern Accounting and Auditing, Vol. 7, No. 10, pp. 1097-1105.

XII.

Eriksson, K., Kerem, K. and Nilsson, D. (2005), Customer acceptance of internet banking in Estonia, International Journal of Bank Marketing, Vol. 23, Issue 2, pp. 200-216

XIII.

Laforet, S. and Li, X. (2005), Consumers' attitudes towards online and mobile banking in China, International Journal of Bank Marketing, Vol. 23, Issue 5, pp. 362-380

XIV.

Jun, M. and Cai, S. (2001), The key determinants of Internet banking service quality: a content analysis, International Journal of Bank Marketing, Vol. 19, Issue 7, pp. 276 Ahmed, Khalil (2011), Online Service Quality and Customer Satisfaction: A case study of Bank Islam Malaysia Berhad.

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M. Sadiq Sohail ,B. Shanmugham(2001), E-banking and customer preferences in Malaysia: An empirical investigation, Volume 150, Issues 3 4, Pages 207217

XVII.

Ali and Akter (2010), E-Banking and Customers Satisfaction in Bangladesh: An Analysis. International Review of Business Research Papers Volume 6. Pp. 145 156