Summer Training Report

BK School Of Business Management Page | 1

A

PROJECT REPORT

ON

“INTERNET BANKING AWARENESS”

AT

NIELSEN, AHMEDABAD

SUBMITTED TOWARDS THE FULFILLMENT

OF

MASTER OF BUSSINESS ADMINISTRATION

ACCADEMIC SESSION

(2009-20011)

GUIDED BY, SUBMITTED BY,

AXAT KSHATRIYA NIRAV MEHTA(1927)

NAYAN MISTRY(1928)


ACKNOWLEDGEMENT

A Project report is an assessment of one’s great skill and aptitude. One needs to devote in

immense patience, time and brains for the compilation of one such rewarding outcome of true

efforts.

I would like to thank Mr. Axat Kshatriya for guidance in our project of “Awareness of

Internet banking” which enlightens my knowledge on Market Research.

I would like to thank Mr. Sanjay Patel and all the staff of NIELSEN, Ahmedabad,

expanded there valuable corporation and contribute towards the project and took time out of

there busy schedule to provide easy access to the information require.

Also special thanks to the respondents who took part in the survey.


EXECUTIVE SUMMARY

An analysis of the differences in usage of Internet banking at rural and urban areas was done

and it showed that people in urban areas are more aware of internet banking services. Risk

perceptions in terms of financial, psychological and safety risks among customers not

using the internet were more meaningful than those using internet banking. Customers not

preferring to use internet banking thought that they would be swindled when using this

service, and therefore, are particularly careful about high risk expectation during money

transfers from and between accounts.

Also we found that the younger people use the internet banking service more

compared to the older people. Our survey showed the majority users of the

services lies between the age group of 18-35.

Most of the respondents were not willing to give their personal information over internet

while purchasing any item through internet banking, but if the information is encrypted then

most of them were willing to give their personal information. Those who have been using

Internet banking services give the priority to “Quick service” while choosing their Internet

service provider bank and give the least priority to factors like “Size of the bank” and

“Variety of features and services offered”. And it is also found that the users use the Internet

banking facilities most for the services like “On-line bill payments”, ”Inter-account transfer”,

“Check balances online”.


TABLE OF CONTENT

1) About Nielsen .......................................................................................................... 1

2) Introduction............................................................................................................... 5

3) Objective of the Study .............................................................................................. 8

4) Literature Review...................................................................................................... 9

5) Research Methodology..............................................................................................17

6) Data Analysis and Interpretation............................................................................... 19

7) Limitation and Future Research................................................................................ 28

8) Conclusion and Reccomadation................................................................................ 29

9) Biblography............................................................................................................... 30

Annexure

LIST OF FIGURES

1) Figure 1................................................................................................................... 19

2) Figure 2................................................................................................................... 20

3) Figure 3................................................................................................................... 20

4) Figure 4................................................................................................................... 21

5) Figure 5................................................................................................................... 22

6) Figure 6................................................................................................................... 23

7) Figure 7................................................................................................................... 23

8) Figure 8................................................................................................................... 24

9) Figure 9................................................................................................................... 24

10) Figure 10................................................................................................................. 25

11) Figure 11................................................................................................................. 25

12) Figure 12................................................................................................................. 26

13) Figure 13................................................................................................................. 27


About Nielsen

Nielsen is the world’s leading marketing and media information company, providing

marketing, media and consumer behaviour intelligence as well as producing numerous trade

shows and publications including Billboard, The Hollywood Reporter and Adweek. The

privately held company is active in more than 100 countries with headquarters in New York.

History

The Nielsen Company (erstwhile ACNielsen) was established in the United States in 1923 by

Arthur C. Nielsen, Sr., one of the founders of the modern marketing research industry.

Among many innovations in consumer-focused marketing and media research, Mr. Nielsen

was responsible for creating a unique retail-measurement technique that gave clients the first

reliable, objective information about competitive performance and the impact of their

marketing and sales programs on revenues and profits. Nielsen information gave practical

meaning to the concept of market share and made it one of the critical measures of corporate

performance. Mr. Nielsen also founded the business known today as Nielsen Media

Research, the global leader in television audience measurement and other media research

services.

ACNielsen opened its first international office in the UK in 1939 and, after World War II,

progressively expanded its operations in Western Europe, Australia and Japan. The company

increased its presence in Asia Pacific in 1994 by acquiring Survey Research Group and in the

Middle East and Africa in the late 1990s through the acquisition of AMER World Research.

In 2001, ACNielsen became part of VNU, a world leader in marketing information, media

measurement and information and business media.

In 2003, VNU announced a new organisational structure for VNU Marketing Information

(MI), its largest business group, to address evolving client needs and to create an enhanced

platform for accelerated growth.

In 2005, VNU attempted to expand into healthcare and pharmaceutical information by acquiring IMS

Health. Although the merger was terminated in the face of shareholder opposition, the two

companies agreed to work together to develop new capabilities.

In 2006, VNU was acquired and taken private by a consortium of six private equity firms.


In 2007, VNU changed its name to The Nielsen Company. This new identity emphasizes its

best known brand name and underscores its commitment to create an integrated, streamlined

global organization.

Services Offered

Nielsen offers an integrated suite of market information gathered from a wide range of

sources, advanced information management tools, sophisticated analytical systems and

methodologies, and dedicated professional client service to help our clients find the best paths

to growth.

Clients work with our services to:

• Measure their market performance

• Analyse market dynamics

• Diagnose and solve marketing and sales problems, and

• Identify and capture growth opportunities

Our people work closely with clients to help them choose the right set of information and

services and use it to make the best possible decisions.

Market Measurement

Their major market-measurement services provide comprehensive coverage of:

• Sales to consumers of fast-moving consumer packaged goods, gathered at the point of

sale in retail stores of all types and sizes. These retail measurement services provide

clients with essential facts on how their products are performing compared with their

competitors, and on trends and changes in market conditions and sales results. They

also provide critical information on the use of promotional activities at the retail level,

such as special displays or pricing, and on distribution and stock conditions in retail

stores.

• Purchases by consumers of packaged goods and other products, gathered through

participating panels of consumer households and through customised studies. These

consumer panel and consumer research services provide a foundation for


understanding and analyzing consumers’ motivations, attitudes, behaviour, shopping

patterns and demographic characteristics.

Analytical Tools and Services

They offer a wide range of software and professional services that enable clients to receive,

select and evaluate our market-measurement information, integrate it with their own data and

third-party information, and apply it to specific business issues and situations.

Clients can view and analyse information from many perspectives, such as by specific

product categories, by geographic area or by retail channel. We also organize and present

information to suit the specific needs of many individuals in manufacturing, service and retail

organisations, including general managers, marketing professionals, sales professionals,

purchases, merchandisers and category managers.

Diagnostic Services

Our consumer panel and consumer research services provide clients with many opportunities

and techniques to examine trends and understand the impact of the market forces that

influence consumers’ purchasing decisions. Consumer panels link purchasing information to

demographics and provide a controlled environment for examining motivational factors.

Our analytical and modelling services provide clients with a range of options to evaluate and

understand why marketing campaigns succeed or fail, and to address specific future

marketing opportunities and issues, such as promotion optimisation, pricing, consumer

targeting and marketing mix optimisation.

In many markets we offer a suite of consumer-focused consumer research techniques and

services that address clients’ unique and specific marketing and sales issues.


Opportunity Identification

While our major clients all share a common focus on consumers, each individual client has its

own distinct set of business characteristics and marketing and sales concerns. Our

information and services are designed to help each client identify and act upon unique growth

opportunities.

Using a structured and disciplined approach to building and managing long-term

relationships, our people work in close partnership with their clients to understand their

strategies and business objectives. To design the right suite of Nielsen services that fits their

needs. To agree on clear and measurable business objectives and to measure the results and

clients’ return on their investment.


Introduction

What is bank?

A bank is a financial institution whose primary activity is to act as a payment agent for

customers and to borrow and lend money. It is an institution for receiving, keeping, and

lending money.

What is online banking?

Online banking (or Internet banking) allows customers to conduct financial transactions on

a secure website operated by their retail or virtual bank, credit union.

Need for internet banking: One has to approach the branch in person, to withdraw cash or

deposit a cheque or request a statement of accounts. In true Internet banking, any inquiry or

transaction is processed online without any reference to the branch (anywhere banking) at

any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice

to have" service. The net banking, thus, now is more of a norm rather than an exception in

many developed countries due to the fact that it is the cheapest way of providing banking

services.

Banks have traditionally been in the forefront of harnessing technology to improve their

products, services and efficiency. They have, over a long time, been using electronic and

telecommunication networks for delivering a wide range of value added products and

services. The delivery channels include direct dial – up connections, private networks, public

networks etc and the devices include telephone, Personal Computers including the

Automated Teller Machines, etc. With the popularity of PCs, easy access to Internet and

World Wide Web (WWW), Internet is increasingly used by banks as a channel for

receiving instructions and delivering their products and services to their customers. This

form of banking is generally referred to as Internet Banking, although the range of products

and services offered by different banks vary widely both in their content and sophistication.

India’s banking sector is growing at a fast pace. India has become one of the most preferred

banking destinations in the world. The reasons are numerous: the economy is growing at a

rate of 8%, Bank credit is growing at 30% per annum and there is an ever- expanding middle


class of between 250 and 300 million people (larger than the population of the US) in

need of financial services. All this enables double-digit returns on most asset classes which

is not so in a majority of other countries. Foreign banks in India achieving a return on assets

(ROA) of 3%, their keen interest in expanding their businesses is understandable – even more

so when compared with the measly 1% average ROA for the Top 1000 banks in the world.

From the perspective of banking products and services being offered through Internet,

Internet banking is nothing more than traditional banking services delivered through an

electronic communication backbone, viz, Internet. But, in the process it has thrown open

issues which have ramifications beyond what a new delivery channel would normally

envisage and, hence, has compelled regulators world over to take note of this emerging

channel. Some of the distinctive features of i-banking are:

1. It removes the traditional geographical barriers as it could reach out to customers of

different countries / legal jurisdiction. This has raised the question of jurisdiction of

law / supervisory system to which such transactions should be subjected,

2. It has added a new dimension to different kinds of risks traditionally associated with

banking, heightening some of them and throwing new risk control challenges,

3. Security of banking transactions, validity of electronic contract, customers’ privacy,

etc., which have all along been concerns of both bankers and supervisors have

assumed different dimensions given that Internet is a public domain, not subject to

control by any single authority or group of users,

4. It poses a strategic risk of loss of business to those banks who do not respond in

time, to this new technology, being the efficient and cost effective delivery

mechanism of banking services,

5. A new form of competition has emerged both from the existing players and

new players of the market who are not strictly banks.


Why this research: An analysis of the differences in risk perceptions between bank

customers using Internet Banking and those not using Internet Banking was done and it

showed that risk perceptions in terms of financial, psychological and safety risks among

customer not using the internet was more meaningful than those using internet banking.

Customers not preferring to use internet banking thought that they would be swindled

when using this service, and therefore, are particularly careful about high risk expectation

during money transfers from and between accounts. Only 37% of Indian Internet users

come from Top 10 cities i.e. Mumbai, Bangalore, Delhi, Calcutta, Chennai, Pune, Hyderabad,

Ahmedabad, Surat and Nagpur. As per IAMAI and I-cube, the number of active Internet

user (i.e. ones who logon to Internet atleast once a month) is now 32 million and numbers

who have used Internet atleast once stands at 46 million. Maximum of the person who are

going on for internet banking lies in the age bracket of 26-35. but the rise in the age the level

of users become low. Approximately 17% of female use internet banking. This a matter of

concern for a banks what are the causes why this is happening.

Although many major banks have started offering i-banking services, the slow pace will

continue until the critical mass is achieved for PC, internet connections and telephones.

However, the upsurge of IT professionals with growing demands is pressuring the

government and bureaucracy in the country to support and develop new initiatives for a

faster spread of i-banking. But then to there is a fear in mind of customer using internet as

a medium for the banking transaction.

Private and foreign banks are trying to turn more and more customer towards the usage if

internet for the banking transaction. This study is basically to know the relation of various

independent variables on the customer usage of internet for banking.


OBJECTIVE OF THE STUDY

� To study the internet banking facilities offered by the banks to its

customers.

� To study the difference of the opinion between the people living in rural and urban

areas.

� To gain insights about functioning of internet banking.

� To explore the future prospects of internet banking.

� To study the benefits that are provided to the individual under internet banking.


LITERATURE REVIEW

In India still there is lack of users for internet as a medium for banking purpose, but the

banking system are upgrading and bringing many electronic banking medium for customers

so that banking can be made more convenient.

Joseph et al. (1999) investigated the influence of internet on the delivery 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 customization.

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 banks.

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 of an

Exploratory Factor Analysis (EFA) and a Confirmatory Factor Analysis (CFA), these 21

items are condensed to five quality dimensions: access, website interface, trust, attention and

credibility.

From the provider perspective, there are target quality and delivered quality. The focus of

process- or supply-led quality definition is rather internal than external, and it is defined as

conformance to requirements. It lays emphasis on the importance of the management and the

supply-side quality, and there is an important role of the process in determining the quality

of outcome

(Ghobadian, 1994). Achieving the quality of conformance between the planned (target)

quality level and the real quality delivered to customers depends on the service quality

management system in an organization.

IAMAI report on online banking 2006. 43% of online banking user haven’t started

online financial transaction because of security reasons, 39% haven’t started because

they prefer face to face, 22% haven’t started because they don’t know how to use, for


10% sites are not user friendly and for 2% banks are not providing the facility of internet

banking. According to research 68% of the customers can not say that when they will be

starting the financial transactions through internet.

Maximum numbers of online banking users are male and maximum of them are in age the

group of 25-35. Numbers of female users are very less i.e. 17% only. More than 60% of the

people who are having account with have accounts in 3-4 banks.

Meuter et al. (2000) have identified critical incidents of customer satisfaction and

dissatisfaction with technology-based service encounters. Given that business-to-business

transactions are the fastest growing segment of technology-driven services (Hof, 1999);

Meuter and his colleagues (2000) suggested investigating what drives business customer

satisfaction or dissatisfaction with technology driven services. According to Gönroos (1982),

customers distinguish the quality of customer interactions that take place during service

delivery (functional quality) and the quality of the outcome the customer receives in the

service encounter (technical quality).

Customers perceive the quality of services of Internet banking based on the performance of

online delivery systems – not on the processes in which the delivered service is developed

and produced. Because customers perceive Internet banking service quality.

The Indian Internet Banking Journey

In 2001, a Reserve Bank of India survey revealed that of 46 major banks operating in India,

around 50% were either offering Internet banking services at various levels or planned to in

the near future. According to a research report,( India Research, Kotak Securities, May

2000.) while in 2001, India's Internet user base was an estimated 9 lakh; it was expected to

reach 90 lakh by 2003. Also, while only 1% of these Internet users utilized the Internet

banking services in 1998, the Internet banking user base increased to 16.7% by mid- 2000.

Banking is a highly information intensive activity that relies heavily on information

technology (IT) to acquire, process, and deliver the information to all relevant customers.

Banks used the Internet technology as a strategic weapon to revolutionize the way they

operate, deliver, and compete against each other. As a result Online Banking was introduced


as a channel where bank customers could perform their financial transactions electronically

via their banks’ Web sites. An Online Banking user is expected to perform at least one of the

following transactions online:

1) Checking account balance and transaction history

2) Paying bills

3) Transferring funds between accounts

4) Requesting credit card advances

5) Ordering checks

6) Managing investments and stocks trading

From a bank’s perspective, using the Internet is more efficient than using other

distribution mediums because banks are looking for an increased customer base. Using

multiple distribution channels increases effective market coverage by enabling different

products to be targeted at different demographic segments. Also Banks cannot risk

loosing customers to competitors within the aggressive competition in the banking industry

around the world. Moreover Internet delivery offers customized service to suit the needs

and the likes of each user. Mass customisation happens effectively through Online Banking.

It reduces cost and replaces time spent on routine errands with spending time on business

errands. Online Banking means less staff members, smaller infrastructure demands,

compared with other banking channels. From the customers’ perspective, Online Banking

provides a convenient and effective way to manage finances that is easily accessible 24

hours a day, seven days a week. In addition information is up to date. Nevertheless Online

Banking has disadvantages for banks like how to work the technology, set-up cost, legal

issues, and lack of personal contact with customers. And for customers there are security and

privacy issues

Products and services offered:

Banks in India are at different stages of web-enabled banking cycle, initially a bank, which is

not having a website, allows its customer to communicate with it through an e-mail address;

communication is limited to a small number of branches and offices have access to this e-

mail account. As yet, many scheduled commercial banks in India are still in the first stage of


Internet banking operation.

With gradual adoption of Information Technology, the bank puts up a web-site that provides

general information on the banks, its location, services available e.g. loan and deposits

products, application forms for downloading and e-mail option for enquiries and feedback.

It is largely a marketing or advertising tool. For example, Vijaya Bank provides information on

its web-site about its NRI and other services. Customers are required to fill in applications on

the Net and can later receive loans or other products requested for at their local branch. A

few banks provide the customer to enquire into his demat account (securities/shares) holding

details, transaction details and status of instructions given by him. These web sites still do

not allow online transactions for their customers.

Some of the banks permit customers to interact with them and transact electronically with

them. Such services include request for opening of accounts, requisition for cheque

books, stop payment of cheques, viewing and printing statements of accounts, movement of

funds between accounts within the same bank, querying on status of requests, instructions for

opening of Letters of Credit and Bank Guarantees etc. These services are being initiated by

banks like ICICI Bank Ltd., HDFC Bank Ltd. Citibank, Global Trust Bank Ltd., UTI Bank

Ltd., Bank of Madura Ltd., Federal Bank Ltd. etc. Recent entrants in Internet banking are

Allahabad Bank (for its corporate customers through its ‘Allnet’ service) and Bank of

Punjab Ltd. State Bank of India has announced that it will be providing such services soon.

Certain banks like ICICI Bank Ltd., have gone a step further within the transactional stage of

Internet banking by allowing transfer of funds by an account holder to any other account

holder of the bank.

Some of the more aggressive players in this area such as ICICI Bank Ltd., HDFC Bank Ltd.,

UTI Bank Ltd., Citibank, Global Trust Bank Ltd. and Bank of Punjab Ltd. offer the facility

of receipt, review and payment of bills on-line. These banks have tied up with a number of

utility companies. The ‘Infinity’ service of ICICI Bank Ltd. Also allows online real time

shopping mall payments to be made by customers. HDFC Bank Ltd. has made e-shopping

online and real time with the launch of its payment gateway. It has tied up with a number of

portals to offer business-to-consumer (B2C) e-commerce transactions. The first online real


time e-commerce credit card transaction in the country was carried out on the

Easy3shoppe.com shopping mall, enabled by HDFC Bank Ltd. ona VISA card.

Banks like ICICI Bank Ltd., HDFC Bank Ltd. etc. are thus looking to position themselves as

one stop financial shops. These banks have tied up with computer training companies,

computer manufacturers, Internet Services Providers and portals for expanding their Net

banking services, and widening their customer base. ICICI Bank Ltd. has set up a web based

joint venture for on-line distribution of its retail banking products and services on the Internet,

in collaboration with Satyam Infoway, a private ISP through a portal named as icicisify.com.

The customer base of www.satyamonline.com portal is also available to the bank. Setting up

of Internet kiosks and permeation through the cable television route to widen customer base

are other priority areas in the agendas of the more aggressive players. Centurion Bank Ltd.

has taken up equity stake in the teauction.com portal, which aims to bring together buyers,

sellers, registered brokers, suppliers and associations in the tea market and substitute their

physical presence at the auctions announced.

Banks providing Internet banking services have been entering into agreements with their

customers setting out the terms and conditions of the services. The terms and conditions

include information on the access through user-id and secret password, minimum balance and

charges, authority to the bank for carrying out transactions performed through the service,

liability of the user and the bank, disclosure of personal information for statistical analysis and

credit scoring also, non-transferability of the facility, notices and termination, etc.

The race for market supremacy is compelling banks in India to adopt the latest technology on

the Internet in a bid to capture new markets and customers. HDFC Bank Ltd. with its

‘Freedom- the e-Age Saving Account’ Service, Citibank with ‘Suvidha’ and ICICI Bank

Ltd. with its ‘Mobile Commerce’ service have tied up with cell phone operators to offer

Mobile Banking to their customers. Global Trust Bank Ltd. has also announced that it

has tied up with cellular operators to launch mobile banking services. Under Mobile

Banking services, customers can scan their accounts to seek balance and payments status or

instruct banks to issue cheques, pay bills or deliver statements of accounts. It is estimated that

by 2003, cellular phones will have become the premier Internet access device, outselling

personal computers. Mobile banking will further minimise the need to visit a bank branch.


The Future Scenario

Compared to banks abroad, Indian banks offering online services still have a long way to go.

For online banking to reach a critical mass, there has to be sufficient number of users and the

sufficient infrastructure in place. The ‘Infinity’ product of ICICI Bank Ltd. gets only about

30,000 hits per month, with around 3,000 transactions taking place on the Net per month

through this service. Though various security options like line encryption, branch connection

encryption, firewalls, digital certificates, automatic sign- offs, random pop-ups and disaster

recovery sites are in place or are being looked at, there is as yet no Certification Authority in

India offering Public Key Infrastructure which is absolutely necessary for online banking.

The customer can only be assured of a secured conduit for its online activities if an authority

certifying digital signatures is in place. The communication bandwidth available today in

India is also not enough to meet the needs of high priority services like online banking and

trading. Banks offering online facilities need to have an effective disaster recovery plan along

with comprehensive risk management measures. Banks offering online facilities also need to

calculate their downtime losses, because even a few minutes of downtime in a week could

mean substantial losses. Some banks even today do not have uninterrupted power supply

unit or systems to take care of prolonged power breakdown. Proper encryption of data and

effective use of passwords are also matters that leave a lot to be desired. Systems and

processes have to be put in place to ensure that errors do not take place.

Users of Internet Banking Services are required to fill up the application forms online and

send a copy of the same by mail or fax to the bank. A contractual agreement is entered into

by the customer with the bank for using the Internet banking services. In this way, personal

data in the applications forms is being held by the bank providing the service. The contract

details are often one-sided, with the bank having the absolute discretion to amend or

supplement any of the terms at any time. For these reasons domestic customers for whom

other access points such as ATMs, telebanking, personal contact, etc. are available, are

often hesitant to use the Internet banking services offered by Indian banks. Internet

Banking, as an additional delivery channel, may, therefore, be attractive / appealing as a

value added service to domestic customers. Non-resident Indians for whom it is expensive

and time consuming to access their bank accounts maintained in India find net banking very


convenient and useful.

The Internet is in the public domain whereby geographical boundaries are eliminated. Cyber

crimes are therefore difficult to be identified and controlled. In order to promote Internet

banking services, it is necessary that the proper legal infrastructure is in place. Government

has introduced the Information Technology Bill, which has already been notified in October

2000. Section 72 of the Information Technology Act, 2000 casts an obligation of

confidentiality against disclosure of any electronic record, register, correspondence and

information, except for certain purposes and violation of this provision is a criminal offence.

Notification for appointment of Authorities to certify digital signatures, ensuring confidentiality

of data, is likely to be issued in the coming months. Comprehensive enactments like the

Electronic Funds Transfer Act in U.K. and data protection rules and regulations in the

developed countries are in place abroad to prevent unauthorized access to data, mollified or

otherwise, and to protect the individual’s rights of privacy. The legal issues are, however,

being debated in our country and it is expected that some headway will be made in this

respect in the near future.

Notwithstanding the above drawbacks, certain developments taking place at present, and

expected to take place in the near future, would create a conducive environment for online

banking to flourish. For example, Internet usage is expected to grow with cheaper bandwidth

cost. The Department of Telecommunications (DoT) is moving fast to make available

additional bandwidth, with the result that Internet access will become much faster in the future.

This is expected to give a fillip to Internet banking in India.

Reserve Bank of India has taken the initiative for facilitating real time funds transfer through

the Real Time Gross Settlement (RTGS) System. Under the RTGS system, transmission,

processing and settlements of the instructions will be done on a continuous basis. Gross

settlement in a real time mode eliminates credit and liquidity risks. Any member of the system

will be able to access it through only one specified gateway in order to ensure rigorous access

control measures at the user level. The system will have various levels of security, viz.,

Access security, 128 bit cryptography, firewall, certification etc. Further, Generic

Architecture, both domestic and cross border, aimed at providing inter-connectivity across

banks has been accepted for implementation by RBI. Following a reference made this year,


in the Monetary and Credit Policy statement of the Governor, banks have been advised to

develop domestic generic model in their computerization plans to ensure seamless

integration. The abovementioned efforts would enable online banking to become more

secure and efficient.

An upcoming payment gateway is being developed by ICICI and Global Tele System, which

will enable customers to transfer funds to banks which are part of the project. Transfer of

funds can be made through credit/debit/ smart cards and cheques, with the central payment

switch enabling the transactions. Banks are showing interest in this new concept, which

will facilitate inter-bank funds transfers and other e-commerce transactions, thus highlighting

the role of banks in e-commerce as intermediaries between buyers and sellers in the whole

payment process.

WAP (Wireless Application Protocol) telephony is the merger of mobile telephony with the

Internet. It offers two-way connectivity, unlike Mobile Banking where the customer

communicates to a mailbox answering machine users may surf their accounts, download

items and transact a wider range of options through the cell phone screen. WAP may

provide the infrastructure for P2P (person to person) or P2M (person to merchant)

payments. It would be ideal for transactions that do not need any cash backup, such as

online investments. Use of this cutting edge technology could well determine which bank

obtains the largest market share in electronic banking. IDBI Bank Ltd. has recently launched

its WAP- based mobile phone banking services (offering facilities such as banking enquiry,

cheque book request, statements request, details of the bank’s products etc).


RESEARCH METHODOLOGY

RESEARCH TYPE

We use descriptive research and exploratory research design in our studies. Descriptive

research is also called Statistical Research. The main goal of this type of research is to

describe the data and characteristics about what is being studied. The idea behind this

type of research is to study frequencies, averages, and other statistical calculations. Although

this research is highly accurate, it does not gather the causes behind a situation. Descriptive

research is used to obtain information concerning the current status of the phenomena to

describe "what exists" with respect to variables or conditions in a situation. Here we also

tried to find out the main cause why there is perceptual blocking of the Indian customers

towards internet banking. The methods involved range from the survey which describes the

status quo, the correlation study which investigates the relationship between variables, to

developmental studies which seek to determine changes over time.

• Statement of the problem

• Identification of information needed to solve the problem

• Selection or development of instruments for gathering the information

• Identification of target population and determination of sampling

procedure

• Design of procedure for information collection

• Collection of information

• Analysis of information

• Generalizations and/or predictions DATA COLLECTION

Primary Data: Structured Questionnaire

Secondary Data: Online Database, Journals, Surveys


SAMPLING

We have used convenience sampling technique. It is also called haphazard or accidental

sampling. Members of the population are chosen based on their relative ease of access.

To sample friends, co-workers, or shoppers at a single mall, are all examples of

convenience sampling. Sometimes called grab or opportunity sampling, this is the method

of choosing items arbitrarily and in an unstructured manner from the frame. Though almost

impossible to treat rigorously, it is the method most commonly employed in many practical

situations.

Sample Technique: Convenient sampling

Area: South Gujarat

Sample Size: 100

TOOLS

Statistical: Microsoft Excel


DATA ANALYSIS AND INTERPRETATION

1) Do you have an internet banking account?

Figure 1

From the above data we can say that the people in the age groups 26-35 are the major user of

the internet banking services followed by the people age group 35-45 and 18-25 in that order.

And a very few of the people of the age group of above 45 uses internet banking services.

0

5

10

15

20

25

30

35

40

18-25 26-35 36-45 45-60 61+

have a internet banking

account

don't have a internet

banking account

age

18-25 own a internet

14

don’t have internet

7 26-35 35 5 36-45 15 6 46-60 8 4 61-+ 1 5


Awareness about Internet banking in Urban and Rural areas

Figure 2

2) Do you use your internet banking account?

Figure 3

37% of the respondents don’t use their internet banking account.

Urban

57%

Rural

43%

Responses

Yes

61%

No

37%

No answer

2%Internet Banking users


3) Have you purchased any product through internet banking?

Figure 4

Yes

91%

No

9%

Responses


4) What banking services do you use which your internet bank offers?

Figure 5

Most of the people use their internet banking account to check the balances and inter-account

transfers only. Not many people use their internet banking for loan application and loan

payment.

0 5 10 15 20 25

Seeking product and rate information

Calculate loan payment information

Download loan application

Download personal bank transaction activity

Check balances online

Apply for consumer loans

Inter-account transfers

On-line bill payments

Others

Responses(in %)


5) What was the single most important reason that you choose this particular bank as

your internet bank?

Figure 6

Results shows that services given by the bank is given the most importance by the

consumers.

6) What are the main reasons that you have not opened/use an internet bank

account yet?

Figure 7

Most of the people not having the internet banking account said that they are either too

new or they concerned about the security.

0

5

10

15

20

25

30

35

40

45

Traditional account

with the same bank

The brand name of the

bank

The excellent service

offered by the bank

Others

Responses(in %)

0 5 10 15 20 25 30 35

Under age

Never heard of Internet banking

Concerned about security

Don't see real value in this type account

Too new

Not available through my bank

Others

Responses(in %)


7) I am willing to provide my personal information while I purchase through internet.

Figure 8

8) I am willing to provide my personal information while I purchase through

phone/fax.

Figure 9

0

10

20

30

40

50

60

Strongly Agree Agree Neutral Disagree Strongly Disagree

Responses(in %)

0

10

20

30

40

50

60


Responses(in %)


9) I am willing to provide my personal information while I purchase through email.

Figure 10

10) I am willing to provide my personal information over the internet when the

information is encrypted.

*

Figure 11

0

10

20

30

40

50

60

70


Responses(in %)

0

10

20

30

40

50

60


Responses(in %)


11) I am willing to provide my personal information over the internet to a web vendor

who is well known and reliable.

Figure 12

0

5

10

15

20

25

30

35

40

45


Responses(in %)


12) For your choice of the internet bank, please indicate how much each of the following

factors is/are important to you: (Please prioritize the following list in the order of

importance i.e. starting with the most important).

Figure 13

Most of the people look for the quick service and the security of the transaction as their main

reasons they want their bank to provide.

12

2

40

14

0

24

4

0

4

0

5

10

15

20

25

30

35

40

45

Responses


Limitations and Future Research

Although this research is primarily based on the primary data from the users and non users of

Internet banking, the findings cannot be generalized, as the research is based on non

probability sampling i.e. convenience sampling used in this case. This study has successfully

examined the major factors responsible for internet banking based on respondents’ perception

on various internet applications; future research may include examining the factors

importance. Future research may also consider the impact of other demographic variable like

education.

Also the participants comprised a small sample, which can be generalized across the

sector.


CONCLUSION AND RECOMMENDATIONS

There is still a lot needed for the banking system to make reforms and train there

customers for using internet for there banking account. Going through the survey the

main problem lies that still customer have a fear of hacking of accounts and thus do not

go on for internet banking. Banks are trying there level best by providing the best

security options to the customers but then to there is lot of factors which betrays a

customer from opening an internet bank account.

Banks are providing free internet banking services also so that the customers can be

attracted. By asking the bank employs we came to know that maximum numbers of

internet bank account holders are youth, business man and HNI’s.

If proper training should be given to customer by the bank employs to open an

account will be beneficial secondly the website should be made friendlier from where

the first time customers can directly make and access there accounts.

We can see the time is changing and we he passage of time people are accepting

technology there is still a lot of perceptual blocking which hampers the growth it’s the

normal tendency of a human not to have changes work on the old track, that’s also

one of the reason for the slow acceptance of internet banking accounts.

Give proper training to customers for using i-banking

Create a trust in mind of customers towards security of there accounts

Provide a platform from where the customers can access different accounts at

single time without extra charge.

Make there sites more users friendly.

Customers should be motivated to use i-banking facilities more.


BIBLOGRAPHY

Books and Websites

1) Marketing research by BERRY G.C.

2) Marketing Research by Malhotra N.K. , fifth edition SITES

(http://www.icmrindia.org/free%20resources/casestudies/banking1.htm#b1)

3) Khan, M.S., Mahapatra, S.S. and Sreekumar (2009) ‘Service quality evaluation in

internet banking: an empirical study in India’, Int. J. Indian Culture and Business

Management, Vol. 2, No. 1, pp.30–46.

4) IAMAI report on online banking 2006.

5) The Indian Internet Banking Journey - Nachiket Mor, Head of ICICI's Treasury,

in March 2000.

6) The Impact Of Internet Banking Service Quality On Business Customer

Commitment.

7) htp://in.nielsen.com

8) www.kwiksurveys.com


Annexure

This survey is designed to understand bank account holders perspectives on Internet

banking, their experience with Internet banking, and their expectations on Internet

banking services

QUESTIONNAIRE

1) Do you have an internet banking account?

Yes (continue) No(skip to Q.15)

2) Do you use your internet banking account?

Yes(continue) No(skip to Q.15)

3) How long you have been using your internet banking account?

Less than 1 month 1 to 6 months 7 to 12 months More than 1 year

4) How frequently do you use mobile banking services per month (for example balance

inquiry, fund transfer between accounts)?

Never 1 to 4 times 5 to 8 times 9 to 12 times > 12 times

5) Have you purchased any product through internet banking?

Yes No

6) Approximately how many times have you purchased any product through the internet

in the last 12 months?


7) How frequently do you visit your bank branch per month?


8) What is the main reason that you typically visit your bank branch (please choose the

single most important reason)?

Make a deposit Investment advice Balance inquiry Cash withdrawal

Other

9) How frequently do you use an ATM per month?


10) Do you have a bank account for which you interact with your bank mostly through a

internet?

Yes No


Z

11) What is the name of the bank you have an internet bank account with and which you

used most often?

_______________________________________ Rather not say

12) What banking services do you use which your internet bank offers?

Seeking product and rate information Calculate loan payment information

Download loan applications Download personal bank transaction activity

Check balances online Apply for consumer loans Inter-account transfers

On-line bill payments Others (Specify) _________________

13) What percentage of your monthly household income you deposit to your internet

bank account?

___________% Don’t Know Not Applicable

14) What was the single most important reason that you choose this particular bank as

your internet bank? (please choose one)

I have a traditional bank account with the same bank The brand name of the bank

The excellent service offered by this bank Others (specify) ______________

Ask Q.15 and Q.16 only if answer ‘No’ in Q.1 and Q.2

15) What are the main reasons that you have not opened/use an internet bank account

yet? (check all that apply)

Under Age Never heard of internet banking Concerned about security

Don’t see real value in this type of account Too new

Not available through my bank Others (specify) ____________________

16) How likely is it that you will open an internet bank account within the next 12

months?

Very Likely Somewhat Likely Neither Likely nor Unlikely

Somewhat Unlikely Unlikely

Please indicate your agreement/disagreement with each of the following

statements.

17) I am willing to provide my personal information while I purchase through internet.



18) I am willing to provide my personal information while I purchase through phone/fax.


19) I am willing to provide my personal information while I purchase through email.


20) I am willing to provide my personal information over the internet when the

information is encrypted.


21) I am willing to provide my personal information over the internet to a web vendor

who is well known and reliable.


22) In the past five years how many times you have switched/added to a different bank?

Never 1 to 4 times 5 to 8 times >8 times

23) What was the reason to switch or add another bank?

Change of location Unsatisfactory Services Others (specify)_____________

For your choice of the internet bank, please indicate how much each of the following

factors is/are important to you: (Please prioritize the following list in the order of

importance i.e. starting with the most important).

_____ Better rate and lower service charge _____ Bank familiarity

_____ Quick Service _____ Bank location (geographic) _____ The size of bank

_____ Security of transaction _____ Convenience (24 hours service from anywhere)

_____ Variety of features and services that are offered (for example; bill payment,

account reconciliation, electronic bill payment)

_____ Integrated value-added services using other on-line services and resources


Personal Information:

Name: _____________________________

Gender: Male Female

Age: 18-25 years 26-35 years 36-45 years 46-60years

>61 years

Marital Status: Married Single

Qualification: High School Graduate Post Graduate Doctorate

Profession: Self employed Working Professional White Collar Job

Other Job Student Others (specify) __________________

Summer Training Report

Documents

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