service quality in retail banking:an indian perspective

Service quality in retail banking: an Indian perspective

INTRODUCTION:

Banking structure in India:

The entire organized banking system comprises of scheduled and non-scheduled banks. Largely,

this segment comprises of the scheduled banks, with the unscheduled ones forming a very small

component. Scheduled banks comprise scheduled commercial banks and scheduled co-operative banks.

Non-scheduled banks also function in the Indian banking space, in the form of local area banks.

In India the banking sector is segregated as public or private sector banks, cooperative banks and

regional rural banks. And also a foreign bank has been given a different head.

Public sector banks are those in which the majority stake is held by the government of India.

Public sector banks together make up the largest category in the Indian banking system. In private sector

banks, the majority of share capital is held by private individuals and corporate. There are about 27

private sector banks in the banking sector and 19 old private sector banks and 8 new private sector banks.

Foreign banks have their registered and head offices in a foreign country but operate their branches in

India. The Reserve bank of India is the central banking and monetary authority of India, and also acts as

the regulator and supervisor of commercial banks. Banks offer many different channels to access their

banking and other services. The channels may be Automated Teller Machine (ATM), branch, mobile

banking, and online banking. Mobile banking is one of the emerging channels in India as it is easy to use

anywhere, anytime and also saves money.

At the beginning of the 21st century, the biggest banks in the industrial world have become

complex financial organization that offer a wide variety of services to international markets and control

billions of dollars in cash and assets. Supported by the latest technology, banks are working to identify

new business niches, to develop customized services, to implement innovative strategies and to capture

new market opportunities. With further globalization, consolidation, deregulation and diversification of

the financial industry, the banking sector will become even more complex.

Although, the banking industry does not operate in the same manner all over the world, most bankers

think about corporate clients in terms of the following:

Commercial banking- banking that covers services such as cash management ( money transfer,

payroll services, bank reconcilement), credit services ( asset-based financing, lines of credits,

commercial loans or commercial real estate loans), deposit services ( checking or savings account

services) and foreign exchange;

Investment banking- banking that covers an array of services from asset securitization, coverage

of mergers, acquisitions and corporate restructuring to securities underwriting, equity private

placements and placements of debt securities with institutional investors.

Over the past decade there has been an increasing convergence between the activities of investment

and commercial banks, because of the deregulation of the financial sector. Today, some investment and

commercial banking institutions compete directly in money market operations, private placements,

project finance, bonds underwriting and financial advisory work.

Furthermore, the modern banking industry has brought greater business diversification. Some banks

in the industrialized world are entering into investments, underwriting of securities, portfolio management

and the insurance businesses. Taken together, these changes have made banks an even more important

entity in the global business community.

In India, all the retail banking segments are expected to witness a tremendous growth owing to the

low cost of borrowing. Changing customer attitudes towards borrowing and optimism regarding

economic growth. Retail lending constitutes just 12.36% of the Indian banking system. Given this

macroeconomic scenario, the share of retail banking will grow dramatically and it is expected that about

35% of the incremental growth in net credit will come from retail banking. In the next five years i.e. till

2010, retail banking is expected to grow by a CACR of 25% to touch the figure of Rs 575,000 crore. This

requires expansion and diversification of retail banking product portfolio, better penetration and faster

service mechanism. Hitherto, the growth had come from metros and tier I cities. While the loan

requirements from larger cities will continue of grow, explosive growth in credit is expected to register in

tier II cities, semi-urban and rural areas.

However, there are some areas of concern like rising NPA in consumer loans particularly, the

delinquency rates in credit cards, and frauds in home loans. Housing prices have grown rapidly. Deflation

of asset value is a possibility in certain areas. Aggressive credit growth in retail has increased the

requirement for measuring and managing this risk. These require extremely skilled workforce and highly

evolved credit delivery and monitoring processes.

Booming India retail banking sector:

The future projection undertaken is done on the basis of the current market scenario, past trends,

and rules and regulations laid by Reserve bank of India (RBI).

They provided detailed overview of the Indian banking industry by contemplating and analyzing various

parameters, like asset size, income level etc. it helps clients to understand various products offered by the

Indian banking industry and their future scope.

The data also provides the future overview of the industry in terms of assets size, number of

financial cardholders and various other important features. The future forecast discusses the prospects of

different arms of banking industry, including rural banking, banc assurance, financial cards, mobile

banking, and role of technology in rural banking, pension funds, and the future course of action or

strategies for pension fund industry to be taken at macro level.

INDIAN BANK:

A premier bank owned by the government of India:

Established on 15th August 1907 as part of the Swadeshi movement. Serving the nation with a

team of over 19300 dedicated staff. Total business crossed Rs.1, 81,530 Crores as on 31.03.2011.

Operating profit increased to Rs. 3291.68 Crores as on 31.03.2011. Net profit increased to Rs.1714.07

Crores as on 31.03.2011. Core banking solution (CBS) in all 1932.

International presence:

Overseas branches in Singapore, Colombo including a foreign currency banking unit at Colombo

and Jaffna. 240 overseas correspondence banks in 70 countries.

Diversified banking activities- 3 subsidiary companies:

Indbank merchant banking services Ltd

Indbank housing Ltd

Indfund management Ltd

A front runner in specialized banking:-

97 Forex Authorized branches inclusive of specialized overseas branch at Chennai exclusively for

handling forex transactions arising out of export, import, remittances and Non Resident Indian business.

62 special SME branches extending finance exclusively to SSI units.

A pioneer in introducing the latest technology in banking:

100% Crore banking solutions (CBS) Branches. 100% business computerization. 1235

Automated Teller Machines (ATM). 24*7 service through 57000 ATMs under shared network. Internet

and Tele banking services to all crore banking customers. E-payment facility for corporate customers.

Cash management services. Depository services. Recuter screen, Telerate, Reuter monitors, dealing

system provided at overseas branch, Chennai. I B credit card launched. I B Gold coin.

INDIAN OVERSEAS BANK:

Indian overseas bank is a major bank based in Chennai, with 2555 domestic branches and six

branches overseas. Indian overseas bank has an ISO certified in house information technology

department, which has developed the software that 2555 branches use to provide online banking to

customers; the bank has achieved 100% networking status as well as 100% CBS status of branches with a

total number of 2555 CBS branches and 6 extension counters. IOB also has a network of about

1300ATMs all over India and IOB’s international VISA debit card is accepted at all ATMs belonging to

the cash tree and NFS networks. IOB offers internet banking (E-see banking) and is one of the banks that

the government of India has approved for online payment of taxes. The bank’s business more than

doubled in the last four years. According to “A profile of banks (2009-10)” published by RBI, the bank’s

deposits increased from Rs.50529 Crore as on 31.03.06 to Rs.110795 crore as on 31.03.10 and advances

from Rs.34756 crore to Rs.79004 crore.

ICICI BANK:

ICICI Bank is India’s second-largest bank with total assets of Rs.4, 062.34 billion (US$ 91

billion) at March 31, 2011 and profit after tax Rs.51.51 billion (US$ 1,155 million) for the year ended

March 31, 2011. The bank has a network of 2,610 branches and 8,003 ATMs in India, and has a presence

in 19 countries, including India.

ICICI Bank offers a wide range of banking products and financial services to corporate and retail

customers through a variety of delivery channels and through its specialized subsidiaries in the areas of

investment banking, life and non-life insurance, venture capital and asset management.

The bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in

United States, Singapore, Bahrain, Hong Kong, sri lanka, Qatar and Dubai international finance centre

and representative offices in united Arab emirates, china , south Africa, Bangladesh, Thailand, Malaysia

and Indonesia. Our UK subsidiary has established branches in Belgium.

ICICI Bank’s equity shares are listed in India on Bombay Stock Exchange and the National Stock

Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York

Stock Exchange (NYSE).

HDFC BANK:

Housing Development Finance Corporation Limited (HDFC Ltd) was established in 1977 with

the primary objective of meeting a social need of encouraging home ownership by providing long-term

finance to households. Over the last three decades, HDFC has turned the concept of housing finance for

the growing middle class in India into a world-class enterprise with excellent reputation for

professionalism, integrity and impeccable service.

A pioneer and leader in housing finance in India, since inception, HDFC has assisted more than

39 lakh customers to own a home of their own, through cumulative housing loan approvals of over

Rs.3.73 trillion and disbursements of over Rs.3.02 trillion as at march 31, 2011.

HDFC has a wide network of 304 offices (which includes 74 offices of HDFC’S wholly owned

distribution company HDFC sales private limited) catering to over 2,400 towns and cities spread across

the country. It also has offices in Dubai, London and Singapore and service associates in the Middle East

region, to provide housing loans and property advisory services to Non-Resident Indians (NRIs) and

persons of Indian origin (PIOs).

HDFC’S unrelenting focus on corporate governance, high standards of ethics and clarity of

vision, percolate through the organization. Trust, integrity, transparency and professional service are the

important pillars of the brand HDFC and most importantly, people- both employees and customers – are

its brand ambassadors.

Customer satisfaction is the hallmark of all HDFC offerings. The first touch of HDFC’S

personalized service begins as soon as a customer approaches HDFC, and over time it progresses into a

long and meaningful relationship. State-of- the-art information system supported by strong in –house

training programmes conducted at its specialized training centre in lonavla, have equipped HDFC to

respond swiftly to the ever-changing customer needs and thereby empower customers in making the right

home buying decision. This is what sets apart HDFC’S customer service philosophy-‘with you, right

through’.

HDFC’S specialist team of over 1,600 trained and experienced professionals follows a ‘single-

window concept’ for providing smooth and value added services at all stages. The team guides the

customer right through the entire process of property purchase- be it property search assistance, technical

support prior to finalizing the property, legal advice on property related documentation, personalized

home loan counseling or providing tailor-made repayment options to suit the customer’s specific

requirements.

HDFC’S wide product range includes loans for purchase and construction of a residential unit,

purchase of land, home improvement loans, home extension loans, and non-residential premises loans for

professionals and loan against property, while its flexible repayment options include Step up Repayment

Facility (SURF) and Flexible Loan Installment Plan (FLIP).

HDFC also has a robust deposits mobilization programme. HDFC has been able to mobilize

deposits from over 10 lac depositors. Outstanding deposits grew from Rs.1, 458 crores in March 1994 to

Rs.24, 625 crores in March 2011. In addition, HDFC has received ‘AAA’ rating for its deposit products

for highest safety from both CRISIL and ICRA for seventeen consecutive years.

Over the years, HDFC has emerged as a financial conglomerate with its presence in the entire

gamut of financial services including banking, insurance (life and non-life), asset management, real estate

venture capital and more recently education loans.

Today, HDFC is recognized as one of the best managed companies in India and is a model

housing finance company for developing countries with nascent housing finance markets. HDFC has

undertaken several consultancy assignments in various countries across Asia, Africa and East Europe to

support and establish their housing finance institutions.

At HDFC, ‘Corporate social responsibility’ has always been an evolving concept, akin to its

‘learning by doing’ philosophy. As part of its social objectives, HDFC has always endeavored to

contribute to economic development and social upliftment of the weaker sections of society and has

professionally nurtured each of its social initiative as an investment. HDFC has undertaken development

oriented work and supported several social initiatives in the areas of education, child welfare, medical

research, welfare for the elderly and the handicapped among several others.

HDFC is how millions of Indian families spell the word ‘Home’ as the brand not only offers

Housing Finance, but also Total Housing Solutions.

The HDFC Advantage:

Pioneers of Housing Finance in India with over 34 years of leading experience. Wide strange of

home loan and deposit products. Vast network of over 304 interconnected offices which includes 3

international offices. Most experienced and empowered personnel to ensure smooth and easy processing.

Online loan application facility at WWW.hdfc.com and across-the-counter services for new deposits,

renewals and repayments. Counseling and advisory services for acquiring a property. Flexible loan

repayment options. Free and safe document storage.

SBI:

The bank is actively involved since 1973 in non-profit activity called Community Services

Banking. All our branches and administrative offices throughout the country sponsor and participate in

large number of welfare activities and social causes. Our business is more than banking because we touch

the lives of people anywhere in many ways. Our commitment to nation-building is complete and

comprehensive.

The State Bank of India, the country’s oldest Bank and a premier in terms of balance sheet size,

number of branches, market capitalization and profits is today going through a momentous phase of

change and transformation- the two hundred year old public sector behemoth is today stirring out of its

public sector legacy and moving with agility to give the private and foreign banks a run for their money.

The bank is entering into much new business with strategic tie ups-pension funds, general

insurance, custodial services, private equity, mobile banking, and point of sale merchant acquisition.

Advisory services, structured products etc- each one of these initiatives having a huge potential for

growth.

The bank is forging ahead with cutting edge technology and innovative new banking models, to

expand its rural banking base, looking at the vast untapped potential in the hinterland and proposes to

cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking capabilities to provide

India’s growing mid/ large corporate with a complete array of products and services. It is consolidating its

global treasury operations and entering into structured products and derivative instruments. Today, the

bank is the largest provider of infrastructure debt and the largest arranger of external commercial

borrowings in the country. It is the only Indian bank to feature in the fortune 500 list.

The bank is changing outdated front and back end processes to modern customer friendly

processes to help improve the total customer experience. With about 8500 of its own 10000 branches and

another 5100 branches of its associate banks already networked, today it offers the largest banking

network to the Indian customer. The bank is also in the process of providing complete payment solution

to its clientele with its over 21000 ATMs, and other electronic channels such as internet banking, debit

cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning centers spread all over the

country the bank is continuously engaged in skill enhancement of its employees. Some of the training

programs are attended by bankers from banks in other countries.

The bank is also looking at opportunities to grow in size in India as well as internationally. It

presently has 173 foreign offices in 33 countries across the globe. It has also 7 subsidiaries in India-SBI

capital markets, SBICAP securities, SBI DFHI, SBI factors, SBI Life and SBI cards- forming a

formidable group in the Indian Banking Scenario. It is in the process of raising capital for its growth and

also consolidating its various holdings.

Throughout all this change, the bank is also attempting to change old mindsets, attitudes and take

all employees together on this exciting road to transformation. In a recently concluded mass internal

communication programme termed ’parivartan’ the bank rolled out over 3300 two day workshops across

the country and covered over 130, 000 employees in a period of 100 days using about 400 trainers, to

drive home the message of change and inclusiveness. The workshops fired the imagination of the

employees with some other banks in India as well as other public sector organization seeking to emulate

the programme.

The CNN IBN, Network 18 recognized this momentous transformation journey, the state bank of

India is undertaking, and has awarded the prestigious Indian of the year- business, to its chairman, Mr.

O.P. Bhatt in January 2008.

NEED FOR THE STUDY:

The current issue of the banking industry in India is to determine the dimensionality of customer

perceived service quality. If service quality dimensions can be identified, service managers should be able

to improve the delivery of customer-perceived quality during the service process, and have greater control

on the overall outcomes. Moreover, for investigating the influence of the dimensions of service quality on

customers’ behavior, it will provide a better understanding of the drivers of customer satisfaction. To gain

and sustain competitive advantages in the rapidly changing Indian retail banking industry, it is

indispensable for banks to understand in-depth the key dimensions of service quality and the effects that

the identified dimensions have on customer’s behavioral intentions. Service quality includes providing

right service, to the right people, at the right time, at the right place and at the right price for attaining

ultimate customer satisfaction in the banking sector.

OBJECTIVES OF THE STUDY:

To identify and review the key dimensions of service quality in retail banking.

To measure and compare the service performance of identified service quality dimensions in

retail banking.

To find out ways for the improvement of service quality of these banks.

SCOPE OF THE STUDY:

The study is undertaken dimensions of service quality on customer’s behavior; it will provide a

better understanding of the drivers of customer satisfaction. To gain and sustain competitive advantages

in the rapidly changing Indian retail banking industry, it is indispensable for banks to understand in-depth

the key dimensions of service quality and the effects that the identified dimensions have on customer’s

behavioral intentions.

LIMITATIONS:

Only 50 samples were taken, which may not reflect the accurate perception of the population.

The study was confined to the city of Coimbatore, Tamil Nadu; the results may be specific to the

region.

The constructs defined are very less in number; there may be many other factors influencing the

adoption and non- adoption of online banking.

REVIEW OF LITERATURE:

Fethi Calisir, Cigdem Altin Gumusoy (2008), this study examines how young consumers

perceive internet banking in relation to other six banking channels (brick and mortar, automated teller

machines (ATM), phone banking, wireless application protocol (WAP), electronic fund transfer at point

of sale (EFTPOS), and bank branches in stores).correspondence analysis and cluster analysis revealed the

banking channels that are close with internet banking. The results also show that internet banking is

considered to be efficient for ease of use and access, and that the users of internet banking lack

confidence in the security of the web sites of internet banking.

G.Peevers, G. Douglas, D.Marshall and M.A.Jack (2011), the purpose of this paper is to

deliver empirical results on the effects of short message services (SMS) confirmation messages after

transactions have been completed in an automated interactive voice response (IVR) telephone banking

service. It analyses whether SMS confirmations have a positive effect on customer relationship for a

multi- channel banking service. The methodology used was an empirical study based on a controlled

laboratory experiment using bank customers as participants. Questionnaires and user observation

techniques were employed to collect quantitative and qualitative data, which were analyzed using

repeated measures ANOVAs. The results show that existing IVR version without confirmation was rated

significantly lower than the versions with SMS confirmation and lower than the version of the IVR with

updated balance.

Hernan E. Riquelme, Rosa E. Rios (2010), this paper analyses the factors that can influence

adoption of mobile banking among current users of internet banking in Singapore. This study uses gender

as a moderating variable. The sample is targeted towards people who use internet for banking and sample

size includes 600 respondents. The study had found that usefulness, social norms and social risk are the

major factors that influence the intention to adopt mobile banking services. The perceived usefulness of

the device was found to be the most relevant factor in predicting intention to use. The perception of risk

negatively affects the intention to use as higher the perception of risk, lesser the intention to use.

Hsiu- Fen Lin (2011), this study develops a research model to examine the effect of innovation

attributes and knowledge- based trust on attitude and behavioral intention about adopting mobile banking

across potential and repeat customers. Data is collected through paper-based questionnaires. The target

populations were undergraduate and graduate students as well as customers of public and private banks

and the sample size was 500 respondents. It uses structured equation modeling approach to investigate

this research. The results of this study show that perceived relative advantage and ease of use were having

significant effects on attitude towards mobile banking.

Hyun-Hwa Lee,Seung-Eun Lee (2010), this paper examines the effects of gender and ethnicity

in consumer’s current usages in different types of mobile services and the relationships between

consumer’s current internet and mobile service usages in US. It also analyses current usages of internet

and mobile services to predict future intentions to use mobile services. Methodology used to collect data

was online survey method. The target population included all mobile users and employs random sampling

method. Chi-square tests were used to investigate differences of current internet and mobile service

usages between gender and among ethnic groups. The study reveals that male respondents showed a

higher usage of mobile services. Among ethnic groups, African Americans were the most engaged users

of all mobile services as internet via mobile were significantly used as money saver. In financial services

both ethnicity and gender has showed significant effects on consumer’s current usages of both the internet

and mobile services and intentions to use mobile services.

Irwin Brown, Zaheeda Cajee, Douglas Davies, Shan Stroebel (2003), this study examines the

factors that influence the adoption of cell phone banking in south Africa and it is used to understand how

to possibly increase the rate of adoption. A questionnaire was developed to gather data. Any person who

uses or is familiar with cell phones as well as banking facilities was included for the sample. This is an

exploratory type of study. Analysis shows that cell phone banking has not been widely adopted in South

Africa. This study had found that perceived sense of risk was a major factor inhibiting adoption and the

factors influencing adoption are relative advantage, trial ability, the customer need for banking services

from a cell phone, and lower perceptions of risk.

Ja- Chul Gu, Sang- Chul Lee,Yung-Ho Suh (2009), the purpose of this research is to

understand the factors that contribute to user’s intention to use mobile banking. Primary data is collected

through web based survey and also through field interviews. The target populations were customers who

used mobile banking service within Woori Bank in Korea. This research integrates the fragmented models

such as the extended technology acceptance model and the trust- based technology acceptance model and

has developed a unified model of mobile banking to examine and validate determinants of user intention

to mobile banking. This model is empirically demonstrated by using the actual data from mobile banking

users in Woori bank. This research used a structural equation modeling. SEM is used to test the

causalities in the proposed model. This study has found perceived usefulness, trust and perceived ease-of-

use is having effect on behavioral intention in mobile banking and the research also verifies all these

factors.

Joris Claessens, Valentin Dem, Danny De Cock, Bart Prencel and Joos Vandewalle (2002),

This paper deals with the security of today’s electronic banking systems. The focus is on internet and

mobile banking and evaluation of the techniques that are used in the current systems. The interaction

between user and bank has been substantially improves by developing ATMs, phone banking, internet

banking, and more recently, mobile banking. The main security issue consists of the establishment of a

secure channel to provide data confidentiality and data integrity of communications between a client and

an authenticated bank. Banks should ensure the security of their servers. The electronic banking systems

rely on the SSL/TLS/WTLS protocols for security issues.

Joyce Wangui Gikandi, Chris Bloor (2009), The aim of this research was to investigate the

factors influencing the adoption and effectiveness of e-banking in retail banking. A three- stage survey

was carried out amongst banks controlling approximately 90% of Kenya’s formal banking industry.

Questionnaire and face interviews were used to collect data. The results showed there was a drastic shift

in the importance attached to some e- banking drivers between years 2005 and 2009. Only 60% of the

banks had identified factor driving their banks to adopt e- banking as a competitive force. This study

revealed that adoption of e-banking introduced new risks requiring new risk management strategies.

Kun Chang Lee, Nambo Chung (2009), this study based on DeLone and MCLean’s model

investigates the impact of three external quality factors namely system quality, information quality and

interface design quality and interface design quality on satisfaction and trust with mobile banking. The

target population includes the mobile banking customer with prior mobile banking customer with prior

mobile banking experience. The data collection method was through survey from 280 respondents.

Structured equation modeling was used for analysis. The results shows that system quality and

information quality significantly influence customers’ trust and satisfaction, and that interface design

quality does not have any impact on customers’ trust and satisfaction towards mobile banking.

Lissa Wessels and Judy Drennan (2010), this paper aims to identify and test the key motivators

and inhibitors for consumer acceptance of mobile phone banking (M- banking), particularly those that

affect the consumer’s attitude towards, and intention to use, this self- service banking technology. Data

collection is though web-based survey where respondents completed a questionnaire about their

perceptions related to M- banking. The sampling technique used was systematic random sampling which

includes around 320 respondents. Correlation and hierarchical multiple regression analysis, with sobel

tests, were used for analyzing these factors related to consumer’s perception towards M-banking. The

results show that perceived usefulness, perceived risk, cost and compatibility were found to affect

consumer acceptance of M-banking.

Luis V.Casalo Flavian, Miguel Guinaliu (2011), this paper examines the antecedents of trust,

and the relationship between trust and consumer commitment in Spain. Web based survey was used to

collect the data with a sample size of 335 structured equation modeling was used for analysis. The results

show that consumer trust is influenced by perceived website usability and reputation, by the consumer

satisfaction and by the perceived privacy and security policy of the website. Also showed that consumer

trust is influenced by perceived usability in the website. Higher levels of usability might lead to higher

levels of trust in the website.

Md.Aminul Islam, Mohammad Aktaruzzaman Khan, T.Ramayah, Muhammad Muazzem

Hossain (2011), the purpose of this study is to examine whether awareness and knowledge, convenience

of mobile devices and WAP/GPRS enabled handsets, pricing and cost, security and privacy, rich and fast

information, and perceived usefulness have any influence on the adoption of M-commerce among

employed mobile phone users in two major cities in Bangladesh- Dhaka and Chittagog. A survey method

was used to collect data with a sample size of 110. Self- efficacy is found to be a moderating factor for

the adoption of M-commerce services. The findings suggest that pricing and cost, rich and fast

information, and security and privacy are significant predictors of the adoption of M-commerce.

Nicole Koeing- Lewis, Adrian Palmer, Alexander Moll (2010), this paper examines the

barriers for adopting mobile banking services. This paper aims to improve the predictive ability of

established models which is better able to predict consumer’s intention to use mobile banking based on

the Technology Acceptance Model (TAM) and innovation diffusion theory. It also examined the effects

of compatibility, trust, credibility, perceived risk and cost on behavioral intention. The sample

populations were residents of Germany between the age group of 18 to 35. The primary data collection

method was adopted using online survey questionnaire and convenient sampling method was employed.

The structure equation modeling (SEM) approach was applied to test the model. The result of the study

indicated that compatibility, perceived usefulness, and risk are significant indicators for the adoption of

M- banking services.

Pin Luarn, Hsin-Hui Lin (2005), this research identifies the factors determining user’s

acceptance of mobile banking. This study extends the applicability of the TAM in a mobile banking

context, by adding one trust- based construct (perceived credibility) and two resource based constructs

(perceived self- efficiency and perceived financial cost) to the model. Data used were gathered from a

sample of respondents attending an e-commerce exposition and symposium in Taiwan. Sample size is

about 160 respondents. Primary data was collected through questionnaire. It uses the structural equation

modeling approach for analysis. The results of this study strongly suggest that this extended TAM has a

higher ability to predict and explain behavioral intention to use an information system.

Reeti Agarwal , Sanjay Rastogi , Ankit Mehrotra (2009), this paper determines the factors

influencing the customer perception and attitude towards e-banking. The research was conducted in

northern part of India. Primary data was used in the research and the responses were generated using

questionnaire- based survey of bank customers with respect to their perception, awareness and

satisfaction towards e-banking. The customers, who use e-banking as a mode of doing banking

transactions formed the target population. Convenient sampling method was employed. Likert scale was

used to gain understanding of different attributes. The Friedman test was applied on the various factors

for analysis. This study shows that customer satisfaction with security and trust provided by the e-banking

site has the maximum impact and it is followed by convenience and ease of use. Customer satisfaction

with value proposition has the least impact. This study is useful for the bankers to identify the customer’s

usage pattern and their perception towards e-banking.

Sripalawat Jiraporn, Thongmak Mathupayas, Ngramyarn Atcharawan (2011), this paper

focuses on the factors affecting successful acceptance of mobile banking and compares the differences

and similarities of acceptance of mobile banking in various countries and Thailand. Both qualitative and

quantitative data were collected through questionnaire and interviews. The participants of this research

were bank customers and mobile banking users in Bangkok metropolitan area and also information from

both non mobile and mobile banking users were collected to analyze the negative factors. The analysis

shows that subjective norm is the most influential factor for mobile banking adoption. On the other hand,

device constraint is the first supporting factor to refuse m-banking. The similar key factors in Thailand

and other countries are perceived usefulness and lack of information where as other factors like ease of

use, subjective norm have different influences in different countries.

Suleyman Barutu (2007), this study analyses the possible significant impacts of mobile phone

technology developments on marketing and determines those target mobile phone users who have the

most positive attitudes towards mobile marketing tools. The survey results, conducted on 418 mobile

phone users, show that the mobile phone users adaptation to mobile shopping is low. However, mobile

phone users have positive attitudes towards mobile marketing tools, mobile advertising, and mobile

discount coupons, mobile entertainment, location – based mobile services, mobile internet and mobile

banking. The survey results suggest that target segment/ segments can be determined for mobile

marketing strategies. Also if mobile commence is adopted by mobile phone users, mobile retailers will

gain a new revenue- generating direct marketing tool, in succession to the internet.

Tao Zhou (2011), this study helps to examine the effect of initial trust on mobile banking user

adoption. The primary data were collected through questionnaire. All items were measured with a seven-

point Likert scale. The sample was mainly composed of users having rich mobile internet experience

from China. Structured equation modeling was employed for analysis. This study reveals that due to the

high risk and low switching cost, building users initial trust is absolutely necessary for mobile banking

service providers. The results indicate that structural assurances and information quality are the main

factors affecting perceived usefulness.

Yong-Ki Lee, Jong-Hyun Park, Namho Chung, Alisha Blakency (2011), this study analyses

the key drivers that influence the intention to use mobile financial services (MFS) such as general

technology perceptions, technology- specific perceptions, user characteristics, and task-user

characteristics. The primary data was collected through online survey in the website of The Woori Bank

of Korea. The sample population includes customers using internet banking services of local banks with a

sample size of 240. The results of the study shows that the highest frequency of use of mobile banking is

once or twice per week (30.4%), and the main service used is account inquiry/transaction (90.8%). The

study finds that perceived usefulness and convenience both have significant effects on the intention to use

MFS. In terms of technology- specific perception, the results show that connectivity plays an important

role in influencing the intention to use mobile banking services.

Mohammed Hossian and Shirley Leo (1998), this paper says about the service quality in retail

banking in the Middle East of Qatar. The primary data collection method was adopted with 120 sample

size. The findings of this research process are that the customer perception is highest in the tangibles area

and lowest in the competence area. This paper makes a useful contribution given that there are only a few

studies dealing with the assessment of service quality in banking environments.

Kazi Omar Siddiqi, the main objective of this study is to find the interrelationships between

service quality attributes, customer satisfaction and customer loyalty in the retail banking sector in

Bangladesh. The study sought to identify the most important attributes in bank settings, which may be

used to review characteristics of the banks as experienced by customers. The review of literature was

conducted to find out the relationship among service quality, customer satisfaction and customer loyalty.

The primary data collection method was adopted with 100 sample size. Empathy demonstrates the highest

positive correlation with customer satisfaction and tangibility shows the least positive correlation with

customer satisfaction.

Galloway, R L; Blanchard, R F. (1996), this article is reported about the overcapacity within

the financial services market place indicates that a differentiator leading to competitive advantage is

necessary, and it is widely argued that this should be quality of service. One objective of this initiative

was to establish a distinctive market image based on quality, and to investigate the effect, if any, of life

stage on quality perception in order to be better target its quality improvement efforts.

RESEARCH METHODOLOGY

Research design:

The research is s a single cross sectional descriptive research done using survey methodology. A

cross section of active market participants in major cities in Tamil Nadu is considered. A descriptive

study is undertaken in order to ascertain and describe the characteristics and association of the variables

of interest in a situation. This study is aimed at bringing out the different variables that influence the

behavior of active market participants and how the self monitoring level influences the investment

decision.

Data collection:

This is an integral part of research design. There are two types of data viz. primary and secondary

data. Primary data refers to the information obtained by the researcher on first time especially to address

the specific research objectives of the study. Conversely, secondary data refers to the information

gathered from sources already existing which includes information such as report, articles and case

studies in the field of interest (sekaran 2007). This study uses both types of data.

Sources of secondary data:

Initially, the researcher has performed an extensive literature review in order to gain general, as

well as specific knowledge about the research area. When searching for research articles and theses, the

researcher has primary used the full text database such as EBSCO Host, proquest, and academic journals

which are considered to be high reliability. By analyzing the collected articles, theses, and books, the

knowledge about the variables and their characteristics used in the research model.

Survey instrument:

In order to achieve the objective of this study, a draft questionnaire was developed based on a

comprehensive review of the external literature. The questionnaire was four pages in length classified into

two parts. Part one consist of questions seeking information about demographics (such as age, gender,

income, educational qualification, marital status and experience) of active market participants (investors).

In order to measure the self- monitoring behavior of investors, the study has adapted revised self

monitoring scale Lennox and Wolfe (1984), most questions placed in the questionnaire were of closed

ended type. However, respondents were encouraged to provide more responses/ options which were not

listed on the questionnaire. Most questions required the respondents to assign a score rating on a seven

point Likert scale.

Study setting:

The study was conducted in natural environment, which is in non contrived settings. No

extraneous factors were controlled.

Unit of analysis:

Since the study is aimed to analyze the appraisal of service quality in retail banking, the unit of

analysis is ‘individual’. The data collected from each individual is treated as an individual data source.

Time horizon:

This is a cross – sectional study. The time duration is three months. The variables which

influence the service quality of the banks and the respondent’s preference may vary with time.

Sampling technique:

The sampling technique followed here is two stage cluster sampling. The 50 respondents are

those who are value customers to bank.

Sample size:

The sample size is 50. This sample size is representatives of customers from various banks.

Statistical tools used:

Descriptive

One way annova

FINDINGS:

The results of the study clearly show that the major influencing factor to anvil banking service is

their own personal need i.e. themselves and second major influencing factor is friends, it is also seen from

the study that majority of the respondents fall under the category of businessman, results clearly show that

many respondents face the problems of hidden charges and complex processing in reality, although

overall service quality in banking is satisfactory from the study, about 50% of the respondents face

problems. Respondents expect certain services like transparency and value added services from the

existing system.

RECOMMENDATIONS:

Developing customer loyalty programs.

Banks should organize seminars and conferences to educate customers regarding processing’s of

loans.

Majority of the customers fall under the category of business, banks should also try attracting

other categories of people also.

To improve the service quality offered to customers banks can periodically asses customer perceptions

and expectations and analyses the possibilities of providing customized services to customers.

CONCLUSION:

Out of the total service performance, different banks are good and better in different dimensions,

but ICICI is the best in all the service quality dimensions. A great gap is shown in the service

performance of ICICI and other banks. It is concluded that service quality performance is different across

different banks in case of product features and office services. It is suggested on the basis of the findings

of this study that banks must place emphasis on customized products, training to the employees,

feedback, complaint handling, special benefits to ’A’ class borrowers, field services and door-to-door

services, etc. since the last decade, a lot of improvement has been seen in the banking sector because of

competition. Banks have improved their services according to the expectations of the customers. But the

expectations of customers are never ending and ever pending. At the time of introducing a new service to

customers, they feel delighted, but later on it becomes their expectation. But still, customer is the king of

the market. So, bankers need to make new strategies for attracting new customers and retaining the

existing ones. Managers must use the available benchmark information to identify potential improvement

areas and then use best practices to improve those areas.

REFERENCES:

http://www.convergs.com/industries/financial-services/index.php

http://www.slideshare.net/guest14fb65/retail-banking-trends

http://www.cygnusindia.com/Our%20product %20basket/Individual %20Reports/Banking%20&

%20Financial%20Services/TOC_Indian%20Retail%20Banking_Dec%2005.pdf

http://www.banknetindia.co/banking/80123.htm

http://www.rncos.com/Report/IM579.htm

http://www.investopedia.com/terms/r/retailbanking.asp

http://www.barclays.in/about/group_profile.htm

http://www.indianbank.in/career.php

http://en.wikipeda.org/wiki/indian_overseas_bank

http://www.iob.in/default.aspx

http://en.wikipedia.org/wiki/indian_bank

http://www.icicibanl.com/aboutus/about-us.html

http://www.hdfc.com/others/about-hdfc.asp

http://en.wikepedia.org/wiki/HDFC-bank

http://www.statebankofindia.com/user.htmhttps://www.onlinesbi.com/retail/login.htm?

whatfld=abt_bank

www.ebso.com

www.proquest.com