1 Customer Satisfaction on Online Banking Services FINAL DISSERTATION Customer Satisfaction on Online Banking Services: A Case Study of HSBC Bank UK Submitted in partial fulfillment of the requirement for the MBA Innovative Management In collaboration with Coventry University and the British Institute of Technology & E-commerce
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Customer Satisfaction on Online Banking Services- A Case Study on HSBC Bank UK
Customer Satisfaction on Online Banking Services- A Case Study on HSBC Bank UK
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1
Customer Satisfaction on Online Banking Services
FINAL DISSERTATION
Customer Satisfaction on Online Banking Services: A Case Study of HSBC Bank UK
Submitted in partial fulfillment of the requirement for the MBA Innovative Management
In collaboration with Coventry Universityand the British Institute of Technology & E-commerce
August 2010
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Customer Satisfaction on Online Banking Services
Dissertation Statement of Originality
Statement of Originality
Except for those parts in which it is explicitly stated to the contrary, this work is
my own. It has not been previously submitted for assessment at this or any other
institution.
Checklist
Please check the following statements are true, tick the appropriate box and sign
the declaration.
I have included a full reference list using the Harvard style of referencing
I have provided Harvard style references for all the ideas, empirical
evidence and other materials I have used.
I have referenced all passages from my source material.
Wherever I have copied someone else’s words (a quotation), I have clearly
shown in the text how much was copied by using speech marks.
I have not committed any falsification. This means I have not presented
invented data, by for example claiming that I have conducted interviews or
sent out questionnaires when I have not, or altering or making up my
results.
I can make available evidence of originality, including notes, photocopies,
drafts, primary data and computer files.
Student name: Mohammad Mukul Chowdhury
Student ID: 36861
Student signature:
Date:
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Customer Satisfaction on Online Banking Services
Acknowledgement
It gives me immense pleasure to thank a large number of individuals for their cordial
cooperation and encouragement who have contributed directly or indirectly in preparing
this report.
Firstly, I express my gratefulness to Almighty Allah who has enabled me to pursue my
study.
I convey my gratitude to my honorable Supervisor, Mr. Richard Asibey-Bonsu for his
guidance and co-operation, which helps me immensely to prepare this report.
I am very much grateful to all the executives of HSBC bank, who extended their
wholehearted cooperation during my syrvey period. They are as good as anyone could
hope for.
My chore also benefited greatly from many enlightening discussion of a number of
professionals in the HSBC Bank. And last but not the least; I would like to thank all other
wonderful personnel working in HSBC Bank.
The customers of HSBC Bank who provided the valuable data during my survey.
Special recognitions are due to those friends and classmates who provided their individual
assistance and advice.
Again I am grateful for all the contribution and many others unknown to us, but remain
responsible where I failed to heed their advice.
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Customer Satisfaction on Online Banking Services
Abstract
Now a day’s technological advancement makes our life easier. As a part of this
advancement banking sector facilitates their client involvement by offering most
convenient services through electronic means. To compete globally banks offer on line
banking facilities. Customers are now able to transact different types of banking activities
via online. People are now busy enough and consciousness among people has increased
than ever before. So they expect high quality services with short period of time. Although
technological convergent takes place and traditional banking system becomes online. But
not all the customers use online banking services in UK. Some banks offer only limited
services and confined themselves with SMS banking and ATM booth.
In this research paper I will try to represent the present scenario of online banking in UK
and customers satisfaction towards these services. For this purpose I will interview
customers of UK banks. In this study I have got some key factors which are very essential
to build up an effective customer relationship. I have also pointed out some factors which
are detrimental to customer relationship and make customers dissatisfied. Finally I will
make some recommendations on the basis of my field work.
Banks should extend their online banking facilities by offering all sorts of banking
services via electronic means. They should introduce new facilities for their client
properly. Banks should concentrate on removing technological problems which creates
negative impact in customers mind. So the study on “Customer Satisfaction on Online
Banking services: A Case Study of HSBC Bank UK” is therefore very significant for
the survival of the organization.
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Customer Satisfaction on Online Banking Services
Table of Content
Chapter TopicsPage No.
Acknowledgement 3Abstract 4
Chapter-1 Introduction 7Background 7Rationale of the Study 8Objectives 9Company Overview- HSBC 10
Chapter-2 Literature ReviewIntroduction 20
Theoretical ReviewCustomer 26Satisfaction 28Customer Satisfaction 30Online Banking 31Conceptual Framework of Online Banking 33Challenges of Online Banking 40
Chapter-3 Methodology 43
Chapter-4 Data Analysis 47
Chapter-5 Data Interpretation 57
Chapter-6 Recommendation and Conclusion
Findings 61Recommendation 63Conclusion 64
References 65Bibliography 66
Appendices List of Tables 66Questionnaire 72
Chapter- 01Introduction
Introduction
Background
Rationale of the
Study
Objectives
Company
overview-HSBC
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Customer Satisfaction on Online Banking Services
1.1 Introduction
“Customer Satisfaction on Online Banking services: A Case Study of HSBC Bank UK”,
the title indicates the present scenario customer opinion about online banking services
which are practicing in UK. The practice of online banking services and its execution on
regard to customer satisfaction is the main focus of this study.
Recently bank has introduced fully internet banking in order to provide better services
towards customers. Online banking also known as electronic banking, virtual banking,
cyber banking. It overcomes the barrier of conventional banking. It established
trustworthy, dependable, reliable, professional, dynamic & fair banking in the UK. It
indicates various banking activities conducted from business, home, or on the road
instead of at a physical bank location.
Understanding customer needs &requirements, monitoring service performance,
measuring customer satisfaction and dissatisfaction, and the way to deliver superior
services to customer have been highlighted in this study.
The research has been conducted among the HSBC bank which provide online banking
services in the UK. The main purpose of this study is to represent a clear scenario of
customer satisfaction towards online banking.
1.2 Background
Now a day’s banking has gone beyond the traditional brick & mortar system and the
online banking system has been emerged dramatically as an essential part of our financial
life. People cannot even think of standing for encashment of cheques, paying bills, for
depositing money or even shopping with a bulk amount of money taking with them. The
people are fully dependent on online banking system. With the headquarters in London,
HSBC is one of the largest banking and financial services organizations in the world.
HSBC's international network has around 8,000 offices in 88 countries and territories
across Europe, the Asia-Pacific region, North, Central and South America, the Middle
East and Africa. HSBC has a unique international pedigree. Many of its principal
companies opened for business over 100 years ago. The founding company from which
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Customer Satisfaction on Online Banking Services
HSBC took its name, the Hongkong and Shanghai Banking Corporation, was founded in
1865 to finance trade between China and Europe. In the UK, Midland Bank, which
merged with HSBC in 1992, was founded in Birmingham in 1836. HSBC is offering a
vast collection of online services in banking sector. But does this means the people are
satisfied in case of what they are getting. This study is concerned with the pattern of
online banking services of HSBC in UK and the customer satisfaction towards these
services. A number of different approaches were applied to collect crucial information on
this topic. I will collect data through questionnaires, discussed with different groups of
people and take help from the relevant books and websites.
I believe that this study will assist in making accurate decision, experience for further
study, helpful for my future career.
1.3 Rationale of the StudyI believe that this study will assist in making accurate decision, experience for further
study, helpful for my future career.
The main reasons of taking initiative to undertake this project are-
1. Preparing my MBA dissertation paper a part of my syllabus of 2nd semester.
2. Now a day’s online banking has brought about a revolution in the entire world.
3. The practice of online banking is increasing UK.
4. Since I am the student of Master of Business Administration, I need to acquire an in-
depth understanding of online banking which will assist me in future career.
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Customer Satisfaction on Online Banking Services
1.4 Objectives
Before any research work, setting up objectives is very essential and it is as the half of
completing the work. The reasons behind conducting this study are clear and were
motivational towards the achieving of goals. In defining the objective, customer
satisfaction is given special emphasis.
The major objectives of the study are given below-
1. To observe the present scenario of online banking practice in UK.
2. To identify the strength and weakness of online banking services.
3. To know the expectations of customers and reality of online banking services.
4. To make recommendation on the basis of customer’s demand.
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Customer Satisfaction on Online Banking Services
1.5 About HSBC
“We are the world's local bank.”
“Headquartered in London, HSBC is one of the largest banking and financial services
organizations in the world. HSBC's international network comprises around 8,000 offices
in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the
Middle East and Africa.”
“With listings on the London, Hong Kong, New York, Paris and Bermuda stock
exchanges, shares in HSBC Holdings plc are held by around 220,000 shareholders in 119
countries and territories. The shares are traded on the New York Stock Exchange in the
form of American Depositary Receipts.”
“Through an international network linked by advanced technology, including a rapidly
growing e-commerce capability, HSBC provides a comprehensive range of financial
services: personal financial services; commercial banking; corporate, investment banking
and markets; private banking; and other activities.”
1.6 History
The HSBC Group has an international pedigree which is unique. Many of its principal
companies opened for business over a century ago and they have a history which is rich in
variety and achievement. The HSBC Group is named after its founding member, The
Hongkong and Shanghai Banking Corporation Limited, which was established in 1865 to
finance the growing trade between China and Europe.
1.7 Vision “As a member of HSBC family which has been serving its millions of customers
worldwide since 1865, to take our place among UK’s most powerful, most profitable,
most admired leader banks.”
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Customer Satisfaction on Online Banking Services
1.8 Mission
Having regard to ethical values; to meet its customers financial needs in the fastest and
most appropriate way, to continue innovative works in order to achieve: human resource
with superior qualities, technological infrastructure and service packages.
1.9 Core Values
1) To exceed customer expectations in service quality.
2) To be a pioneer in the implementation of technologies those create distinction for its
customers, employees and shareholders.
3) To keep its reliability at the utmost level with the contribution of its strong capital
structure and liquid assets.
4) To make a positive contribution to the community
5) To respect meritocracy during hiring processes, improving knowledge and skills of its
employees, creating the mostly preferred work environment.
The services that the customer enjoys most while using are listed below:
Every customer agrees with enjoying ATM facilities most.
Business people are using credit card facilities and sometimes SWIFT facilities.
Customers also enjoying foreign remittance services.
Individuals happy with accounting information services.
Some customers agree with enjoying normal transactions.
5.5 Suggestions from Customers to solve the Problems
From the survey it is found that the customer thinks there are some solutions on these types of problems. The provided some suggestion on remedial measures regarding these problems. These are listed below:
Authority should take initiatives to solve the problems.
Should give emphasis on customer satisfaction.
Should arrange an interest free electronic banking services.
More opportunities should be created for getting more loyal customers.
Should take steps to solve technical problems.
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Customer Satisfaction on Online Banking Services
Chapter 6
Findings
Recommendations
Conclusions
References
Bibliography
Appendix
Tables
Questionnaires
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Customer Satisfaction on Online Banking Services
6.1 Findings
Our seminar topic is “Customer satisfaction on On-line Banking” For preparing our
seminar paper we found various problems, some problem are very serious. If those are not
solved immediately, our Banks will suffer a lot in there near future.
1. Unavailability of ATM booth: Our study recover that there are scarcity of ATM
booth in all places. It creates high dissatisfaction in customer mind.
2. Shortage of fund in ATM booth: Most of the people complain that there is low
money reserve in booth some time they find it empty.
3. High service charges: In our survey, about 72.6% people said that on-line banking
charge is very high and it is still out of reach among the middle class and lower class
family.
4. Technological problems: There are some technological problems such as imbalance
or sometimes show empty of own account money, PIN code rejection, Database
cannot support the system etc.
5. Shortage of Branch: Branches are not available so especially business people face
problems.
6. Limited services: bank deliver limited services to customers but customers are
needed more services such as available fund in booth, account transaction by
internet, cash paid by credit card such as current bill, gas bill, shopping etc.
7. Low of female client: Female customer is not satisfactory; our respondents’ of
female are only 10.95% of total.
8. Partially On-line Banking: Still now our banks operate partial on-line Banking.
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Customer Satisfaction on Online Banking Services
9. User of on-line Banking: Our surveys observe that regular users of on-line banking
are only 28.76% of our total survey and among them 30.1% are new users.
10. Security: Some of the people cannot rely on on-line banking. They feel less
security on on-line banking.
11. Limitations of cash withdraw: There is a limitation of cash collection.
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Customer Satisfaction on Online Banking Services
6.2 Recommendations
Now in 21st century we the people are introduced to online banking. Online banking
means a service that allows an account holder to obtain account information and manage
certain banking transactions through a personal computer via the financial institution's
web site on the Internet. This is also known as Internet or electronic banking. It is a
convenient and secure way of making many transactions, such as transfers and bill
payments. Though it needs lots of investment to create online banking network, it gains
more benefits afterwards. Day by day, internet users are growing. So online banking has a
very good feature if it is handled and organized well. There is also an internal problem,
regarding the operation of online banking. The employee (specially the senior level) that
is behind the traditional offline banking is not used to operate computers. They are more
familiar with traditional banking system. So if we want to get befitted by online banking
system we need to adopt the latest technological systems. Thus the employees, the actual
users and also the bank will be benefitted. People can purchase their desired product and
pay the bills in less amount of time by online banking system. Also they can withdraw
and deposit their money anytime without going to the bank.
To overcome the constraints most of the respondents related their answers with the issues
they identified as constraints to growth. The principal recommendations are:
Increase of ATM booth
Increase booth cash fund
Raise credit card acceptance in all places
Increase customer consciousness about on-line Banking by arranging seminar,
workshop etc.
Resolve technological problem by using latest technology.
Minimize total cost by proper management.
Use easy and secure system.
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Customer Satisfaction on Online Banking Services
6.3 Conclusion
In retrospect of the marvelous growth of consumer banking revenue over the last 20 years
and contemplating the intensity of competition yet to come, it is crucial for online
banking service providers to rethink its strategies and marketing plan to sustain the
growth consumer banking revenue. Correspondent banking service providers domiciled
are expected to be fighting for a bigger pie, as the growth prospect of the country’s
correspondent banking business is limited. One of the ways to achieve that objective is to
maximize consumer banking revenue generated from providing best online banking
services.
Online banking services are provided entirely at the risk of the subscriber who shall
indemnity the bank for all loss or damage, howsoever caused, resulting from the use of
any of the online banking services. The bank will not be responsible for any loss or
damage arising directly or indirectly from any malfunction or failure of the online
banking services.
However, the challenges for the banking industry has been to design this new service
channel in such a way that its customers will readily learn to use and trust it. After all,
banks have spent generations earning our trust, they are not about to risk that on a web
site that is frustrating, confusing or less than secure. This paper presents a conceptual
view of online banking and the constraints of this new banking method.
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Customer Satisfaction on Online Banking Services
References
Website: www.hsbc.co.uk, browsing date 05/07/2010,
en.wikipedia.org/wiki/Customer browsing date 05/07/2010,
en.wiktionary.org/wiki/customer browsing date 05/07/2010,
www.tenstep.com/open/miscpages/94.3Glossary.html browsing date 05/07/2010,
in.farnell.com/terms-and-conditions browsing date 06/07/2010,
qcboss.wordpress.com/tag/vocabulary/ browsing date 06/07/2010,
www.ichnet.org/glossary.htm browsing date 06/07/2010,
wordnet.princeton.edu/perl/ webwn browsing date 06/07/2010,
en.wiktionary.org/wiki/satisfaction browsing date 06/07/2010,
en.wiktionary.org/wiki/satisfaction browsing date 06/07/2010,
www.commercialbar.com/lawterms.htm browsing date 06/07/2010,
Steven J Skinner and Ivancevich, Business for 21st century, 11th Edition.
D.U. Journal of Marketing. Vol. No. 7, June 2004
Charles W. L. Hill & Gareth R. Jones, (South-Western Cengage Learning, 2009-
10), Theory of Strategic Management, 8th Edition, page 228-260
Elias M. Awad, (Prentice Hall, 2006), Electronic Commerce, 3rd Edition.
Efraim Turban, Jae Lee, David King & H. Michael Chug, (Pearson Education),
Electronic Commerce, 6th Edition.
Mahmood Shah Steve Clarke, “E-banking Management”, 2nd Edition.
K. C. Shekhar & Lekshmy Shekhar, (Vikas Publication House Pvt. Ltd), Banking
Theory and Practice, 19th Enlarged Edition.
Dr. S. N. Maheshwari & Dr. S. K. Maheshwari, (Kalyani Publishers), Kalyani’s
Banking Law and Practice, 12th Revised and Updated Edition 2005.
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Customer Satisfaction on Online Banking Services
Appendices
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Customer Satisfaction on Online Banking Services
Tabulation of Data
1. Sample Type
Sample Type
Gender Male Female Total
No. 65 8 73
Percentage 89.04% 10.95% 100
2. Educational Qualification
Educational Qualification
Education Undergraduate Graduate Postgraduate Total
No 24 28 21 73
Percentage 32.9% 38.35% 28.76% 100
3. Marital Status
Marital Status
Marital Status Single Married Total
No 45 28 73
Percentage 61.6% 38.35% 100
4. Occupation
Occupation
Occupation Executive HouseholdsBusiness
personStudent Others Total
NO. 15 5 22 26 5 73
Percentage 20.5% 6.84% 30.13% 35.61% 6.84% 100
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Customer Satisfaction on Online Banking Services
5. User status
User status
Online banking
practiceVery Often Often Seldom Total
No 21 37 15 73
Percentage 28.76% 50.68% 20.54% 100
6. Duration in practicing online banking
Duration in practicing online banking
Duration in
online banking0 to 1 year 1 to 4 years 4 to 7 years
7 to 10
years
10 to 12
yearsTotal
No. 22 26 17 5 3 73
Percentage 30.13% 35.61% 23.28% 6.84% 4.1% 100
7. Satisfaction level of customers
Satisfaction level of customers
Satisfaction
level
Very
satisfactorySatisfactory
Neither
satisfactory
nor
dissatisfactory
DissatisfactoryVery
dissatisfactory
No. 6 34 18 14 1
Percentage 8.21% 46.57% 24.65% 19.17% 1.4%
8. Facing problems in online banking
Facing problems in online banking
Problems facing Several times Rare Never Total
No. 36 24 13 73
Percentage 49.31% 32.9% 17.8% 100
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Customer Satisfaction on Online Banking Services
9. Comment on online banking in Bangladesh
Comment on online banking in Bangladesh
Banks provide fully on line banking in
BangladeshYes No Total
No. 19 54 73
Percentage 26% 73.97% 100
10. Charges on online banking
Charges on online banking
Imposed charges are justified Yes No Total
No. 20 53 73
Percentage 27.39% 72.6% 100
11. Reliability on security system
Reliability on security system
Reliability on security system Yes A little bit Never Total
No. 44 23 6 73
Percentage 60.3% 31.5% 8.21% 100
12. Online banking can use everyone
Online banking can use everyone
Online banking can use everyone Agree Disagree Total
No. 42 31 73
Percentage 57.53% 42.5% 100
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Customer Satisfaction on Online Banking Services
13. Opinion regarding withdrawing expected money
Opinion regarding withdrawing expected money
Withdrawing expected money Yes No Total
No. 32 41 73
Percentage 43.83% 56.2% 100
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Customer Satisfaction on Online Banking Services
“Customer Satisfaction on Online Banking Services: A Case Study of HSBC Bank UK”
( The collected data will be used only for preparing report and will be kept confidential )
Dear Sir/Madam:
For your kind information, this is a survey research regarding “Customer Satisfaction on Online Banking Services: A Case Study of HSBC Bank UK”. We will be very obliged if you kindly give your responses to the following questions. Please pick the right answer:
i. Age:
ii. Gender:
iii. Education:
iv. Marital Status:
v. Occupation:
1. Do you frequently use online banking?
2. How long are you using online banking service?
3. What type of online banking services you are enjoying?
Graduate
Single
Undergraduate Postgraduate
Executives Business person
Student Others
OftenVery often Seldom No
Normal cash Transaction
Normal A/c Transferring
Account Information
ATM Facilities
Credit Card Facilities
Foreign Remittances
Debit Card Facilities
Other
Not more than 1 year.
From 1 to 3 years.
House holds
Male Female
Married
More than 3 years.
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Customer Satisfaction on Online Banking Services
4. Do you think that online banking services provided by banks in our country are
satisfactory?
5. Do you face any problems in online banking?
6. What type of problems you face mainly?
7. Do you agree that banks locating in our country provide fully online banking?
8. What additional online banking service do you expect?
………………………………………………………………………
………………………………………………………………………
9. Is the maintenance of online banking expensive to you?
10. Can you rely on the security system of online banking?
11. Which feature of online banking attracts you most?
………………………………………………………………………….
………………………………………………………………………….
12. Do you have any specific complain over online banking?
…………………………………………………………………………..
…………………………………………………………………………..
13. Do you satisfied with the charges imposed on online banking?