Title of Thesis

Determinants of customer Loyalty Towards

Online Banking services in Pakistan

Prepared By:

Name: Muhammad Farrukh (10950)

Facilitators:

Sir: Muhammad Ali

 Introduction
One of the fastest growing industry in Pakistan.

More than 94% Banks branches offer online banking services in Pakistan.

Revolutionary changes in banking industry

Technological Advancement.

Easy to make transaction.

 Problem Statement

In Pakistan most of the people still think that retail banking is the best source to
full fill their financial purposes.

There is a Vast difference in between the ranking of Pakistan and rest of the world
in online banking .

Lack of Knowledge provide to the customers.

Past studies did not incorporate all possible variables which examined the
influence of customer loyalty towards online banking services in Pakistan.
Research Question/s:

What are the those determinants of customer loyalty towards online banking
services in Pakistan?

Research Objective/s:

To examine the determinants of customer loyalty towards online banking sector

in Pakistan.
Literature Reviews
 Name of the Estimates and Results Statistical Conclusion
Researcher and Literature Review
Technique
Title
Chien et al. (2009). Positive relationship were Regression Thus the
Investigate the observed between online Analysis company before
impact of the environment and physical conducting any
Service quality environment and e service marketing activity
standard of online quality model approach is should pay
banking model more reliable then previous attention to the
development and research that are based on service quality
confirmation. traditional model. personality
factors to
enhance its
consumer loyalty.

Nexhmi et al. The results indicated that Results are The study
(2003). Examine all three independent analyzed by contributes
the influence of variable trust, commitment, Amos and important
technology used by and consumer satisfaction chi-square insights and
bank with the help of have highly positive methode.
online banking relationship
significant relationship to marketing
shows correlation influence customer loyalty
 (cont)
Estimates and Results Statistical Conclusion
Technique

Butt and Aftab, The findings of this study Structure This study
(2012), show that behavior towards Equation provides useful
investigate the halal banking positively Modeling insights for
impact of impact on online fulfillment, technique Marketers into
consumers online service standard
behavior towards and trust by Islamic developing e-
online consumers internet banking. business
satisfaction, trust, strategies by
and service understand online
quality regarding buying behavior.
Islamic banking Moreover, internet
service standard
improves (customer
satisfaction and their
loyalty to the bank)
Hussein, &Aziz, The result of this study Confirmatory This study
(2013). Discuss indicated that e service factor contributes
the dimensions standards empathy, analyses and important factors
of e-banking efficiency, privacy and which are most
Structural
 Methodology

Research Quantitative Approach

Approach
Research Purpose Explanatory
Research Design Correlational research design
Data Source Primary data
Data Collection Survey Questionnaire ( Likert scale)
Instrument
Sampling Convenience Sampling
Technique
Target Population Bank account holder and employees
Sample Size 300 respondents
Statistical technique Factor and Multiple Regression
Analysis
 Model

Customer
satisfaction H1+

Trust
H2+
Online Banking

H3+
Efficiency Customer
Loyalty

H4+

System
Availability
H5+

Empathy
 Model

Regression equation

CL= + 1TRU+ 2SA+ 3EFF+ 4CS+ 5EMP+E

Where:

CL stands for customer Loyalty, TRU stands for Trust ,SA shows system availability,
EFF shows efficiency, CS shows customer satisfaction, and EMP stands for
empathy.
 Hypothesis

Ho1: Customer Satisfaction has significant impact on Customer Loyalty

Ho2: Trust has significant impact on Customer Loyalty

Ho3: Efficiency has significant impact on Customer Loyalty

Ho4: System availability has significant impact on Customer Loyalty

Ho5: Empathy has significant impact on Customer Loyalty

 4.1Descriptive Analysis:
Profile of Respondents

Demographics Frequency Percent

Gender

Male 192 64.0%

Female 108 36.0%
Age
20-30 207 69.0%
31-40 68 22.%
41-50 25 8.3%
Qualification
Undergraduate 69 23.0%
Graduate 171 57.0%
Post Graduate 49 16.3%
Others 11 3.7%
Account Experience
Less than one yr 115 38.3%
1-3 years 155 51.7%
4-5 years 17 5.7%
Above 5 years 13 4.3%
Bank Account type
Current 240 80.0%
Pls 35 11.7%
Saving 22 7.3%
Others 3 1.0%
Income

10,000-20,000 139 46.3%

21,000-30,000 95 31.7%
31,000-40,000 37 12.3%
41,000 above 29 9.7%
 Reliability Analysis
Table Reliability Statistics
Cronbachs Alpha N of Items

0.896 30

Values of
Variables N of Items
Cronbachs Alpha
Customer Loyalty 0.868 5
Trust 0.765 4
Efficiency 0.879 6
System Availability 0.882 4
Empathy 0.908 5
Customer Satisfaction 0.849 6
 Factor Analysis

Table 4.3
KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of 0.870

Sampling Adequacy.

Bartlett's Test of Sphericity, 6171.574

approx. Chi-Square

Df 435
Sig. 0.000
 Rotated Component Matrix
Components
Customer System
Efficiency Empathy Satisfaction Loyalty Availability Trust
EFF3
.883
EFF5
.877
EFF4
.724
EFF6
.716
EFF2
.685
EFF1
.654
EMP3
.834
EMP2
.812
EMP1
.806
EMP5
.743
EMP4
.726
CSAT2
.817
CSAT1
.808
CSAT4
.771
CSAT3
.690
CSAT5
.625
CSAT6
.623
CLOY2
.785
 Regression Analysis

Prob. V.I.F
Variables Coefficient t-stats

(Constant) .062 .211 0.833

Trust 0.195 4.444 0.000

1.124
System Availability 0.103 2.065 0.040 1.592

Efficiency 0.192 3.730 0.000 1.314

Customer satisfaction 0.328 5.153 0.000 1.206

Empathy 0.149 2.741 0.006 1.800

Adj. R2 0.369

F-stats (Prob.) 36.029(0.000)

 Regression Equation

Customer Loyalty = .062 + 0.195 (Trust) + 0.103 (System

Availability) + 0.192 (Efficiency) + 0.328 (Customer
Satisfaction) + 0..149 (Empathy) + E
 4.4 Factors Correlation Matrix

Customer Customer System

Factors Efficiency Empathy Satisfaction Loyalty Availability Trust
EFF
1.000

EMM
.356 1.000

CSAT
.428 .204 1.000

CLY
.474 .481 .482 1.000

SAVAIL
.240 .609 .069 .353 1.000

TRUST
.090 .314 .107 .315 .129 1.000
 Conclusion
After Conducting the research the result show that, Trust and customer satisfaction have a
positive or significant effect on customer loyalty, and on the other hand Service quality
variables Efficiency. System Availability and empathy have significant effects on customer
loyalty.
The variable used in this research are Customer Loyalty as dependent variable and Customer
satisfaction, trust, service quality and customer relation as an independent variable the
sample size in this research was 300.
The conclusions are based on the investigation how the respondents are become loyal by
different factors. From this data service quality and customer relation are impacting highly
significant on customer loyalty.
From the results of the research it is concluded that to make the customer loyal it is necessary
to make them satisfy with the product you are offering to them people have do trust on the
product they have good image of the product in their mind so that they can refer the same
product to others as well.
 Recommendations
It can be said that service quality and relationship variables play a vital role in
becoming customer loyal towards online banking so bank need to give better
service to their customer in online banking to enhance their satisfaction and
make them loyal.
To make customer satisfied banks can conduct different types of activates such
as taking feedback from the customer and if they have any complaint try to
resolve that complain as soon as possible.
Trust is a factor which makes the consumer loyal with their brand or products.
Trust is putting positive or significant impact on customer loyalty, Companies
should be use different tools for increasing the more trust with consumer
thought price stability, free sampling, and innovation in products and others like
discounts.
To make customer loyal towards online banking bank can develop a privacy
system to their websites that no person can access to the information of any
other person can access to the information of any other person to bring their
trust and confidence.
 Future Recommendations
This research has been conducted in the Karachi region only so in the future if
everyone wants to do research on this topic he should cover other parts of
Pakistan to improve the quality of research.

It is also recommended that the research should also be done by using

Qualitative technique. By conducting some interviews with the management of
different banks.

This research can also conducted in that region which is not very developed as
this research was conducted in that region where people find no difficulty in
using internet.

In the future research can also be conducted on the effect of attitude of people
towards online banking with the reputation of bank and size of the bank, etc
Thank You!