Impact Of Electronic Banking On Customer Satisfaction And Bank Profitability Essay

The electronic banking has various advantages than the traditional banking system which is simple and convenient for the users. The advantages are-

So as to keep customer satisfied every banker tries to provide superior services. Competition among Islamic bank rises due to the development and growing popularity of Islamic banking product in Pakistan. In the recent age Islamic banks had to face numerous challenges. First of all they have to compete with the peers and secondly they have to cope with conventional banking. Yi (1990) stated that when customers utilize any service their satisfaction is the outcome of a cumulative of perception, evaluation and psychological thinking. In the banking sector there is numerous research that evaluate customer satisfaction. towards services (Anderson and Sullivan., 1993; Brenhardt, Donthu, and Kennett, 1994; Bedal and Power, 1995; Holliday 1996; Despensa,

Convenience way of operating banking transactions: Online banking is a highly profitable channel for financial institutions. It provides customers convenience and elasticity and can be provided at a lower cost than traditional branch banking (Williamson, 2006). The convenience of online banking is helping people gain greater control of their finances and contributing to changing patterns in cash withdrawal and day to day money management. (Beer, 2006)

Banks that offer financial products and services through the Internet must be able to meet their customers’ expectations. Banks must also ensure they have the right product mix and capacity to deliver accurate, timely, and reliable services to develop a high level of confidence in the customers. Customers who do business over the Internet are likely to have little tolerance for errors or omissions from financial institutions that do not have sophisticated internal controls to manage their Internet banking business. Likewise, customers will expect continuous availability of the product and Web pages that are easy to navigate.

The use, acceptance, adoption and application of internet technology to businesses to boast their performances are not something new. Saffu et al., (2008), states that there has been a significant increase in the use and application of e-commerce in businesses in the past decade. E-commerce has benefits such as reduction in costs, increased business opportunities, reduced lead time and providing more personalized service to the customers (Turban et al., 2008). Internet banking or e-banking is one of the many tools of e-commerce adopted by the banking industry. Tools of information technology such as internet banking have significantly improved the quality of services offered by the banking

Although, electronic banking provides many opportunities for the banks, it is also the case that the current banking services provided through internet are limited due to security concerns, complexity and technological problems (Sathye, 1999 & Mols, 1999). According to Financial Services Authority (FSA) 2010, banks face several risks but notably are; Safety situations around ATMs, abuse of bank cards by fraudsters at ATMs and the danger of giving your card number when buying on line. Security risk is a major source of concern for both customer and the bank. Since E- banking services are offered using network, it is exposed to risk environments hence leading to security breaches. The consequences of security threats are potential financial, legal and reputational implications.

The number of individuals going to branches has dropped by 30% before two years, while nearly 80% of while some 70% of the Karachi banking population now uses some form of online banking service every month. More consumers are embracing mobile banking via their phone or tablet. Developments in technology have empowered banks to increase customer

With the rapid improvements in electronic technology and faster communication technology, the society has become more sophisticated than in the olden days. The workforce is better educated, better informed, better organized and better paid than existed in the olden days. Consequently, the long term-trend is for the customers who will be more aware of the value of the funds, time and convenience. This has led to a demand for more efficient banking system with efficient payment methods. The situation has resulted in more competition among the banks and stimulated more technological developments. Hence, there is a continuous increase in the use of electronic technology to meet the ever increasing competition in banking which is transforming brick and mortar banking (banking at a fixed branch premises) to electronic banking. The delivery of bank’s services to a customer at his office or home by using electronic technology can be termed as electronic banking. The quality, range and price of these electronic services decide a bank’s competitive position in the industry (Kumar, 2000).

Literature review Data Analysis and interpretation o Online banking o iMobile o PAYBACK o Privilege Banking o ATM Banking

Banking in today’s era is in process of upgrading itself by joining the wave of latest technologies and trends. Currently, it is in the midst of chaos and disruptions and is in process of reshaping its business models to alienate the traditional processes. The driving force for Banks to adopt such changes can be a. Changing customer needs, b. Optimization of cost and Banking Operations, c. Digitization and Automation, d. Streamlining of complex and lengthy processes and e. New competitors in the industry.

The effect of information technology on the operation of deposit money banks in Nigeria cannot be overemphasized. New and better information technology entails that banks can add the service ‘differentiator’ to their products in a way. However, enabling tools which developed information technology can provide will make a significant effect on the operations of deposit money banks in Nigeria .

The main purpose of this study is to assess effect of Mobile Money Services (MMS) on the performance of the banking institutions: a case of Kakamega town. Thus, it seeks to examine how various mobile money services transactions’ impact on the performance of banking institutions in Kakamega town and also to establish the effect of accessibility to mobile money services on the performance of banking institutions in Kakamega town and finally the effect of efficiency and proficiency of mobile money services on the performance of banking institutions in Kakamega town. A sample of 115 respondents will be used to gather data from 13 financial institutions in Kakamega town. Data collection will be basically through self-administered questionnaires, both structured and semi-structure; interviews and observation.

The present paper is concerned with the various ways of doing banking electronically. This paper has been divided into four sections dealing with four aspects of E-banking i.e. ATM, Internet banking , Mobile banking and Credit cards. Paper is basically concerned with the customer aspect of banking searching for customer satisfaction level. This is a comparative study of Public sector bankis, Private

1. Joseph et al. (1999) investigated the influence of banking services. They found six underlying dimensions of e-banking service quality such as convenience and accuracy, feedback and complaint management, efficiency, queue management accessibility and customizations. Jun and Cai (2001) identified 17 service quality dimensions of I-banking service quality. These are reliability, responsiveness, competence, courtesy, credibility, access, communication, understanding the customer, collaboration, continuous improvement, content, accuracy, ease of use, timeliness, aesthetics, security and divers features. They also suggested that some dimensions such as responsiveness, reliability and access are critical for both traditional and internet bank. Jayawardhena (2004) transforms the original SERVQUAL scale to the internet context and develops a battery of 21 items to assess service quality in e-banking. By means

This is to certify that the project study entitled “Analysis of computerized banking system- HDFC Bank” is a bonafide work done by and submitted in partial fulfilment of the award of degree in Post Graduate Diploma in Management.