In India the banking scenario has undergone tremendous changes and they are facing tough competition by their foreign counterparts. Various changes in regulatory mechanism and competitive reasons have led to utmost requirement of total computerization of the Indian Banking Industry. The Banks cannot think of innovative products and services without IT support. The total automation of banking transactions ensures 24x7 Days service to the customers without interruption and break.

The new age information technology is bringing about sweeping changes in the banking industry, forcing them to re-engineer many of their basic processes and systems. The Banking Industry is service oriented, but at the same time it needs profit to enhance the value of all stakeholders. Previously the Banking services were merely accepting deposits and lending advances to the needy along with some ancillary services.

Received on 28.04.2015 Modified on 10.05.2015

Asian J. Management; 6(3): July-Sept., 2015 page 200-208

DOI: 10.5958/2321-5763.2015.00029.3

Currently, overall banking in India is considered as fairly mature in terms of supply, product range and reaches even though, reach in rural India still remains a challenge for the private sector and foreign banks. With the advancement in technology, services provided by banks have become more easy and convenient. The competitive character has been further promoted by facilitating the entry of new players, especially foreign banks. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking are recent innovations. The entire system became more convenient and swift. Time is given more importance than money. IT enabled banking offers multiple advantages over traditional banking channels. Some studies done earlier points out that cost of service per customer reduce drastically when bank uses technology.

The foremost thing required for the growth of the IT enabled banking is more usage of IT enabled channels compared to the branch banking by customers. The future of banking will be one in which customers can address most of their needs through self-directed means and will be how effective a bank is in getting its customers online.

The present study was conducted in public sector, private sector and foreign banks of Delhi. Multistage random sampling was used for selection of sample. Three banks (State Bank of India, Punjab National Bank and Canara Bank) among public sector banks, two banks (ICICI and HDFC) among private sector banks and one bank (Standard Chartered) among foreign banks were selected for the study. Two branches each of the above banks were randomly selected for conducting the study. After identification of branches, the researcher visited banks under study and selected 50 customers randomly from each branch of the bank (total 12 branches and 6 banks) making a total of 600 customers as sample.

The data was collected regarding the extent of use of IT enabled banking services, number of years for which customers have been using these services and finally the reasons for not using them. A total of nine services used by the customers were analyzed. These included –

1. Electronic Clearing Services

2. Electronic Fund Transfer

3. Utility Payment Services

4. Credit Card

5. Automated Teller Machine

6. Internet Banking

7. Centralized Banking

8. Foreign Exchange System

9. Real Time Gross Settlement System

The data was analyzed and the findings are presented separately for 3 categories of banks-

IT enabled services in public sector banks

The data was scrutinized for the total sample 300 customers of public sector banks and further the extent of using these services was analyzed.

· Analysis of data revealed that only one – fourth of the customers in public sector banks were using ECS, among them majority of the customers were using this service up to great extent.

· Likewise, Electronic Fund Transfer was also used by only few customers (17 %) in the public sector banks, though majority of them were using up to great extent (15.7 %). Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another. One of the most widely-used EFT programs is Direct Deposit, in which payroll is deposited straight into an employee's bank account, although EFT refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire and point-of-sale (POS) transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments.

· ATM is the most popular electronic banking services among all e-banking services. Majority of the customers were using ATM up to great extent (77.7 %). Only few customers were not using ATM and maximum customers reported that they did not need ATM. This may be due to the fact that generally old people did not use ATM as they followed traditional method of transactions in their respective banks and found it more convenient. This showed that use of ATM was found very popular in public sector banks. The results agreed with Rogers et al (1996), who reported that the majority of ATM usage was by middle age compared to the aged.

· Credit Card is a plastic card used to make a purchase on credit. The issuer of the card will later collect payment for the purchase. If payment is made after the grace period, interest will be charged on the account. Surprisingly, the credit card facility was not found very popular among the customers of public sector banks. Only twenty per cent customers were using credit cards, among them, majority were using up to great extent.

· Utility Payment service is the easiest way to manage and pay utility bills through bank’s counter, e banking and ATM anytime, anywhere without standing in queues. When the data was analyzed regarding utility payment services, it was found that a small percentage of customers, i.e., only 5 per cent in public sector banks were using this service up to great extent.

· The fig. 1. showed that majority of the customers were not using internet banking and reasons reported by them were no need (48.1 %), security concerns (25.8 %), complicated procedure (16.1 %) and unawareness (9.9 %). Online banking provides an easier and more comfortable way to carry out transactions. However, it continues to present challenges to the financial security and personal privacy. Hence, people reported having some security related reservations while using internet banking. Kaynak and Harcar (2005) also observed that security problems were the most important reason given for not using online banking. Their results showed that security problems, like hackers and fraud, were determining aspects in Internet service presentation. In this concept, trust and security were factors supporting a positive view of Internet banking service quality.

· Centralized banking was the second most popular IT enabled banking services among the customers of public sector banks. Almost 39 per cent customers were using centralized banking. Majority of them were using this service since 5-8 years and up to great extent.

· Foreign exchange system was used by a negligible proportion (1.66 %) of total customers.

· RTGS was used by only 8 per cent of the total customers in public sector banks. Mostly RTGS is used by businessmen as they have to transfer money in bulk. This service is not so useful for service class people.

IT enabled services in private banks

The above mentioned services were studied in private banks also. The findings presented are as follows-

· The most popular IT enabled banking services in private banks was found to be ATM (89.5 %), followed by centralized banking (52 %) and internet banking (36 %) up to great extent.

· The customers who were not using these services reported various reasons such as the service not required, complicated to use, unawareness and security concerns. Madu (2002) also stated that strong concern about the security was found one common issue related to unwillingness to use internet banking services. Cunninghum (2003) reported that security was one of the most important future challenges, because customers fear higher risk in using the web for financial transactions in internet banking.

· Electronic Clearing Services was used by little less than half of the customers in private banks. They were using this service since 1-4 years. The customers who were not using this service commented that they did not need ECS, some of them were not even aware of this service.

· Likewise, Electronic Fund Transfer was used by 42.5 per cent of customers. Almost half of them were using this service up to great extent and majority of them were using this service since 1-4 years.

· Utility Payment Services were used by 37 per cent customers.

· Credit Card (30 %), Foreign Exchange System (1.5 %) and RTGS (15 %) were adopted by very few customers.

An attempt was made to scrutinize the data on the use of IT enabled services by the customers of foreign banks along with comparing it with use of these services by the customers of public and private banks. This was done to make an inter-bank comparison. The data after scrutinizing showed the following results with regard to IT enabled services in foreign banks.

· Various IT enabled services were popular among the customers of foreign banks such as ATM (100%), centralized banking (73 %), credit card (71 %) and internet banking (67 %). More than half of the customers were using Utility Payment Service and nearly half of them were found using Electronic Fund Transfer. The IT enabled services which were less popular among foreign banks were Electronic Clearing Services (11 %), Foreign exchange system (9 %) and RTGS (11 %).

Inter-bank comparison

· The findings revealed that more number of customers in the private banks were using Electronic Clearing Services as compared to public sector banks and foreign banks.

· The use of Electronic Fund Transfer was more in private banks and foreign banks in comparison to the public sector banks.

· Utility Payment Service was used by maximum customers of foreign banks followed by private banks, whereas, only very few customers (5 %) were found using this service in the public sector banks. The reason behind this may be attributed to the fact that the customers of foreign and private banks could be more computers savvy rather than the customers of public sector banks.

· The Credit Card facility was used by majority of the customers of foreign banks and private banks, as against very few customers were using this facility in the public sector banks. It seems that most of the customers were concerned about security features of credit card. Majority of the customers in all the banks reported security features as their main concern while not using credit card facility. The other reason may be mostly young customers were found using the services of private and foreign banks and they were more attracted with IT enabled services.

On the whole, a negligible number of customers were found using Foreign Exchange System in all the banks. Only few customers were using RTGS in all the three categories of banks. After comparing all the three categories of banks, it was found that customers of private banks were using RTGS more than foreign and public sector banks.

Further, these findings are pointers to the fact that ATM seems to be the most popular IT enabled banking service among customers these days in all types of banks. Further, the results showed that internet banking was more popular among the customers of foreign banks and private banks as compared to the customers of public sector banks. Other researches had also indicated a number of reasons for the customers’ motivation to use E-banking services such as freedom of time and space, speed, convenience, 24 hours a day availability and price incentives (Mattila, Karjaluoto and Pento, 2002). In a study entitled “Role of information technology in banking industry” conducted by Rahman I. U. (2007) in India, it was found that there was a positive relation between implementation of IT and delivery of service.

CUSTOMERS’ OPINION ABOUT THE IT ENABLED SERVICES

The above discussion throws light on the fact that customers were found using the IT enabled services in all the categories of banks, but in varying numbers. Some services were found to be the most popular ones, whereas, others were not so. This may be due to a number of problems faced by them in availing these services. Investigator attempted to find out what the customers’ think about these services. For this, customer’s viewpoints had been taken on following areas-

ATM related problems

Quality criteria identified by customers for internet banking

Features identified by customers for reliability of Internet Banking

Speed of login and log out

Confirmation of transactions from the bank’s website

Privacy issues of the bank

Accessibility of internet banking website

ATM related problems

Table 1: Distribution of customers according to the ATM related problems

ATM related problems	Public Banks (n=257)	Private Banks (n=190)	Foreign Banks (n=100)	Total (n=547)
Lack of cash	54 (21 )	57 (30.0 )	17 (45.9 )	128 (23.4 )
Location of ATM	6 (2.3 )	38 (20 )	7 (18.9 )	51 (9.3 )
Improper functioning of the machine	179 (69.6 )	80 (50 )	13 (35.1 )	272 (49.7 )

Figures in parentheses indicate percentages

Though the results, already discussed, had shown that ATM was the most popular service in all the three categories of banks due to 24 hours service and fast withdrawal of cash without personally visiting the banks, but still the customers reported a number of problems faced regarding ATM. These were lack of cash, location of ATM and improper functioning of the machine. Out of these, improper functioning of machine was found to be the main problem, reported by almost 70 per cent customers in public sector banks, by half of the customers in private banks, whereas, in foreign banks, this was faced by only 35 per cent customers. These findings are indicative of the fact that foreign banks are more particular to provide customer friendly services. The results are in same line with Abdulwahab (2010), who reported that a major problem allied with the usage of ATM was pervasiveness of network and cash trapping. These were attributed to poor network and unavailability of funds from customer’s accounts of residence. One of the security measures employed for safeguarding of customer’s account was to withhold the ATM card whenever the integrity of Personal Information Number is violated, normally three attempts were allowed given an intruder a 0.06 per cent chances to get the correct PIN before the card is withheld (Kuhn, 1997).

Quality criteria identified by the customers for Internet Banking

Fig. 4 Quality criteria for internet banking

Four quality criteria for internet banking were considered by the customers, i.e., speed, security, reliability and easy to navigate. In public and private banks, maximum customers considered security as an important criterion for internet banking followed by its speed and reliability. Results showed a different picture in foreign banks where the customers were more concerned with the speed of internet banking followed by its reliability.

Features identified by customers for reliability of Internet Banking

Table 2: Distribution of customers according to the features identified by them for the reliability of Internet Banking

Features identified by customers for reliability	Public Banks (N=46)	Private Banks (N=112)	Foreign Banks (N=67)	Total (N=225)
Site is update and running all the time	42 (50.6 )	68 (34 )	44 (50.57 )	154 (41.62 )
Site pages does not freeze up when all the information is entered	25 (30.12 )	56 (28 )	35 (40.23 )	116 (31.35 )
Links are accurate	4 (4.92 )	39 (19.5 )	4 (4.59 )	47 (12.7 )
Pages download quickly	12 (14.46 )	37 (18.5 )	4 (4.59 )	53 (14.32 )
Total	83 (100 )	200 (100)	87 (100)	370 (100 )

N* Total number exceeds due to multiple responses

Figures in parentheses indicate percentages

The customers were also interrogated about features for reliability of internet banking. Important features indicating the reliability of internet banking turned out to be “site was update and running all the time” and “site pages did not freeze up” when all the information was entered.

Speed of login

Fig. 5 : Speed of login

Out of total sample respondents, almost half of the customers reported that speed of the login was fast. This was reported by the customers of all the banks. The reason may be highly competitive environment and adoption of modern technology by all the banks.

Speed of log out

Fig. 6 : Speed of log out

Speed of logout of account in the internet banking was reported fast by 64.2 per cent customers of foreign banks, which was 47.3 per cent in the private banks and 30.4 per cent in the public sector banks. This shows that foreign banks are more efficient in the internet banking than private and public banks in this regard. These findings throw light on the fact that in this competitive world, if the public sector banks and private banks have to survive, they have to provide customer friendly services.

The confirmation of transactions from the bank’s website

On the whole, 44 per cent customers reported that their bank’ site confirmed after every transaction. Inter-bank comparison showed variation with minimum customers in public sector banks reported that their bank’s site always confirmed after every transaction and maximum customers (52.2 %) reported the same in foreign banks. Further, maximum customers in foreign banks stated that their bank’s site mostly provided quick information of transaction while on the contrary, minimum, i.e., 28.3 per cent customers reported the same in public banks.

Table 3: Distribution of customers according to the confirmation of transactions from the bank’s website

Confirmation of transactions from the bank’s website	Public Banks (n=46)	Private Banks (n=112)	Foreign Banks (n=67)	Total (n=225)
Never	2 (4.3 )	9 (8.0 )	1 (1.5 )	12 (5.3 )
Sometimes	26 (56.5 )	57 (50.9 )	31 (46.3 )	114 (50.7 )
Always	18 (39.1 )	46 (41.1 )	35 (52.2 )	99 (44.0 )
Total	46 (100.0)	112 (100.0)	67 (100.0)	225 (100.0)

Figures in parentheses indicate percentages

Privacy issue of the bank

Table 4 : Distribution of customers according to the dealing of privacy issue of their bank

Dealing of privacy issues	Public Banks (n=46)	Private Banks (n=112)	Foreign Banks (n=67)	Total (n=225)
Very carefully	27 (58.7)	40 (35.7)	19 (28.4)	86 (38.2)
Slightly carefully	17 (37 )	62 (55.4)	46 (68.7)	125 (55.6)
Not up to the mark	2 (4.3 )	10 (8.9 )	2 (3.0 )	14 (6.2 )
Total	46 (100.0)	112 (100.0)	67 (100.0)	225 (100.0)
Security of credit card
Yes	20 (43.5)	45 (40.2)	27 (40.3)	92 (40.9)
Cant say	21 (45.7 )	61 (54.5)	34 (50.7)	21 (45.7)
No	5 (10.9 )	6 (5.4 )	6 (9.0 )	17 (7.6 )
Total	46 (100.0)	112 (100.0)	67 (100.0)	225 (100.0)
Misuse of customer’s information	Public banks (n=46)	Private Banks (n=112)	Foreign Banks (n=67)	Total (n=225)
Not misused	14 (30.4)	34 (30.4)	33 (49.3)	81 (36.0)
Cant say	32 (69.6 )	64 (57.1)	34 (50.7)	130 (57.8)
Sometimes	0 (0.0 )	14 (12.5 )	0 (0.0 )	14 (6.2 )
Total	46 (100.0)	112 (100.0)	67 (100.0)	225 (100.0)

Figures in parentheses indicate percentages

Analysis of the results showed that maximum customers in public sector banks reported that bank was dealing with privacy issues very carefully while almost 28 per cent felt the same in foreign banks.

Further, almost half of the customers in the foreign banks reported that their information was not being misused by the bank while this percentage was little less in the public sector banks and private banks, i.e., 30.4 per cent, each.

Accessibility of Internet banking website

Table 5: Distribution of customers according to accessibility of Internet banking website

Accessibility of Internet banking website	Public Banks (n=46)	Private Banks (n=112)	Foreign Banks (n=67)	Total (n=225)
Easily accessible	38 (82.6)	88 (78.6)	53 (79.1)	38 (82.6)
Not easy to access	8 (17.4 )	24 (21.4 )	14 (20.9 )	46 (20.4 )
Total	46 (100.0)	112 (100.0)	67 (100.0)	225 (100.0)

Figures in parentheses indicate percentages

Majority of the customers i.e., 82.6 per cent out of the total sample customers said that internet banking website was easily accessible. In comparison within the three types of banks, it can be seen that more customers in the public sector banks were of the view point that internet banking website was easily accessible, simple and easy to browse.

USE OF IT ENABLED SERVICES AS AFFECTED BY AGE, GENDER AND OCCUPATION

In order to find out the effect of personal variables on use of common IT enabled banking services, which included credit card, ATM and internet banking in all the three types of banks, data was analyzed. The personal variables of respondents such as age, gender and occupation were correlated with use of IT enabled services such as credit card, ATM and internet banking. The findings are presented here in three heads-

Correlation between variables in public sector banks

Correlation coefficient was calculated to study the impact of personal variables of customers on the use of IT enabled services.

Table 6 : Correlation between various variables in public banks

Variables	Credit Card	ATM	Internet banking
Public banks
Age	-0.0866*	-0.144*	-0.150*
Gender	0.0381	0.111*	0.161*
Occupation	0.0408	-0.0285	0.0076
Private banks
Age	0.0614	-0.0823	-0.139*
Gender	0.099	0.056	-0.0273
Occupation	-0.024	-0.0137	-0.108*
Foreign banks
Age	-0.149	-0.0315	-0.0068
Gender	-0.102	0.0471	0.163
Occupation	-0.0405	-0.0966	-0.291*

* .01 level of significance

Table 6 reveals that age of respondents in public sector banks had significant negative correlation with the use of credit card, ATM and Internet Banking by them. It can be concluded that more young respondents were using credit card, ATM and Internet Banking. The reason behind this may be attributed as young generation is more computer savvy than their older counterparts.

Analysis of data revealed that gender of respondents was significantly correlated with the occupation, use of ATM and Internet Banking. It can be stated that that majority of male respondents were using ATM and Internet Banking.

Correlation between variables in private banks

Personal variables of respondents in private banks may have an impact on the use of various IT enabled services by them. Hence, correlation coefficient between personal variables of respondents and their use of IT enabled services was calculated in private banks.

Table 6 shows that age had significant negative correlation with internet banking. It can be said that more young respondents were more using internet banking facility. Further, occupation was found negatively correlated with internet banking. It points out that business class was using more internet banking than the service class.

Correlation between variables in foreign banks

Correlation between personal variables of respondents and use of IT enabled services by them was also studied.

Age of the respondents was showing a trend of negative correlation though non significant with use credit card, ATM and Internet banking. It may be said that more young respondents were using IT enabled services. Further, Table 4.25 shows that business and other class respondents were using internet banking more.

CONCLUSION:

It can be stated from the above discussions that public sector banks are also making efforts to stay in the competition of modern tech savvy banks. They are also providing various IT enabled services such as online transactions, ATMs, Utility Payment Services and so on. Private sector banks and foreign banks may have appeared to be winning the race through their high technology and customer friendly approach, but public sector banks, with their vast client base and unparalleled treasury of trust, are evolving customer-friendliness and adopting high technology and fast pace. Public sector banks have also understood that in the era of competition, customer satisfaction is the key to success. Adoption of high technology and customer friendliness will make public sector banks, a leading one in India.

Further, in nutshell, it can be concluded that personal variables of respondents like age, gender and occupation have an impact on use of IT enabled services such as credit card, ATM and Internet Banking. Younger respondents were found to be using more internet banking in all the three categories of banks. As far as occupation is concerned, business class were using more credit card, ATM and Internet Banking.

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