IMPACT OF ELECTRONIC BANKING ON

CUSTOMER SATISFACTION
INTRODUCTION:
Customer satisfaction is a measurement of how well a company's goods and services meet
or exceed a customer's expectations.

 Another definition of customer satisfaction is the proportion of all consumers (or the
number of customers) whose ratings of a company's services, goods, or both surpass
predetermined levels of satisfaction.
 Another meaning of customer satisfaction is the degree to which a client is satisfied
with the goods and/or services that a company offers.
 Customer satisfaction is also defined as a word typically used to gauge how
customers feel about a company's goods and/or services.
 Customer satisfaction is not a simple science, though, as it varies from person to
person and depends on a wide range of factors.
 Customer satisfaction is not a simple science, however, as it varies from person to
person and depends on a wide range of factors that may be both psychological and
physical.
A survey containing a series of statements using the Likert Scale or another scale is the
standard method for gauging customer satisfaction.
The banking and finance sector is not an exception to how technology is changing service
businesses in general. An issue of basic relevance and concern to all banks, as well as a
requirement for local and international competitiveness in the banking sector, is the
adoption of technology-based concepts, methodologies, policies, and implementation
strategies for banking services. Due to this advancement in technology, the financial sector's
business climate is very dynamic, changes quickly, and requires institutions to provide client
service online.

The introduction of Automatic Teller Machines (ATMs) sparked the development of e-

banking, and Finland was the first nation to pioneer the industry globally.
E-banking is widely utilised in both developed and emerging nations, although its adoption is
still rather constrained.
According to Claessens, Glaessner, and Klingebiel, developing nations often have an edge
since they can benefit from what mature economies have learned.
Electronic banking is now being used by practically all banks as a way to improve service
quality. To improve consumers' happiness with banking services, they provide electronic
banking to its clients.
A research on consumer satisfaction with PUNJAB NATIONAL BANK online banking services
in UTTAR PRADESH, India. evaluated the following factors: An empirical study of ATM service
looked at the cost efficiency of the service as a key component of service quality and found
that it had a substantial impact on how satisfied customers were with the ATM services
offered by public sector banks.
ELECTRONIC BANKING:

E-banking, to put it simply, is the process of exchanging money digitally through the internet
rather than physically. Customers receive banking services more quickly thanks to e-banking,
which also offers a variety of perks and banking facilities. Customers may access their
accounts online while lounging at home. Information technology is becoming a crucial
component in organisations.
As a result of this revolutionary breakthrough, a new business concept known as e-banking
was established.
The market's competitiveness is escalating along with it day by day, thus to deal with the
strain of this escalating competition, banks are implementing several initiatives, one of
which is electronic banking. Electronic technology and the financial industry are combined in
electronic banking. Customers are given banking services through multiple electronic
delivery channels when e-banking is practised.

Indian e-banking history

In the 1980s, the Rangarajan Committees created a tiered strategy for bank computerization
that suggested various levels of bank computerization. Important recommendations from
the second Rangarajan committee included computerization of branches, communication
between branches, and the installation of ATMs in key locations including airports, train
stations, hospitals, etc.
In 1987, the HSBC bank opened an ATM in Mumbai, and in 1989, Bank of India, one of the
country's first nationalised banks, opened an ATM at Mumbai's Mahalaxmi branch.
In India, ICICI bank launched internet banking for the first time. City bank and HDFC bank
then did the same.

Another important breakthrough in the history of e banking in India was the systematic
deployment of Core Banking Solution (CBS). In Bangalore, India, in 2001, The Syndicate Bank
introduced Core Banking Solution as the first public sector bank. The launch of NEFT and
RTGS simplified interstate money transfers and fueled India's e-banking industry. The
development of e-banking technology was greatly aided by the "Institute for the
development and Research in Banking Technologies" (IDRBT), which was founded in
Hyderabad in the middle of the 1990s.

The majority of earlier research only looked at Internet banking, excluding all other forms of
E-Banking services including mobile apps and E-Banking robots.
Few studies have looked at the connection between the calibre of E-Banking services and
customer happiness in Uttar Pradesh, despite the fact that several have examined how the
magnitude of E-Banking services is measured.
This study fills a vacuum in the literature since it examines the complete E-Banking issue
without excluding anything, and it does so in Uttar Pradesh,
The results of this study's implications highlight the large effect of the standard of the E-
Banking service on consumer satisfaction and the huge influence of the dependability of the
E-Banking service on service quality perceptions of banking clients. This study is organized as
follows:

Banks are providing e-banking services to their customers

1. Internet Banking: Internet banking is a banking system in which transactions are

carried out electronically through the internet. This is the sector that is growing the
fastest, and because of online banking, the economy is expanding quickly. The
development and future of these platforms are the major subject of this study.

2. Automated teller machines: Automated teller machines (ATMs) are new technology
that banks have implemented to allow consumers to access money 24/7 or without
going to a physical branch. Also, it is open every day and night, every week. The
consumer can take money from this and use it for their intended transactions by
using their ATM card. The benefit of an ATM in this situation is that it provides rapid
and effective services and allows the user to select his own banking hours at any time
or on any day of the week.
3. Smart cards: These are frequently constructed of plastic. Many smart cards have a
grid of metal contacts that are used to connect electrically to the internet chip. Smart
cards offer application processing, data storage, personal identity, and
authentication.

4. Electronic Fund Transfer: Money is transferred from one bank account to another via
an electronic method, either inside a single institution or across several institutions,
using a computer-based system.

5. Cellular Banking: The majority of banks now provide a mobile banking app as well.
You may use the app for a variety of different monetary operations, just like you can
use the bank's web interface for Internet Banking. You may access this feature by
downloading your bank's app on an Android or iOS smartphone. Moreover, the
applications allow users to transfer money, view account balances, find the closest
ATM, and do other banking functions.
Fig. Flow chart of Electronic Banking
Types of Electronic-banking
Customers can access banking services through a variety of electronic delivery channels. The
most popular ones are ATM, POS, mobile banking, and online banking; they are covered
here.

ATM: A cash machine (ATM) is a device that allows cash withdrawals without entering the
banking area. It may be accessible 24/7 to check account balances and acquire recharge
cards as well as transfer payments.
Internet banking: By the use of a secure website that is run by the financial institution—
which might be a physical or virtual bank, credit union, or society—Internet banking enables
consumers to make monetary operations. Any online-related transactions could be included
in it. Banks are increasingly running websites where clients may do a variety of activities in
addition to making inquiries about financial statements, rate of interest, and currency rates.
However, there are little statistics on Internet banking, and there are definitional
discrepancies that make cross-country comparisons challenging.
POS: The place where a transaction takes place is referred to as the point of sale (POS),
sometimes known as the point of purchase (POP) or the checkout. A POS terminal, or more
broadly, the software and hardware used for checkouts—the equivalent of an electronic
cash register—is referred to as a "checkout." By providing a user-friendly interface for
salespeople, a POS terminal controls the selling process. The receipt may be created and
printed using the same system. POS systems set sales records for e-commerce (Conducting
business through E-network), E-Finance (the provision of financial services over the internet)
Electronic money (prepaid or stored value payment method), E-banking (the provision of
banking services and goods through an electronic delivery system) other financial goods and
services, such as online brokerage services, etc.
Mobile Banking: The phrase "mobile banking" refers to using a mobile device, such as a
mobile phone or Personal Digital Assistant, to conduct balance checks, account operations,
payments, financial documents, and other financial operations (PDA). SMS banking is a term
used to describe the initial mobile banking services, which were provided by SMS. Several
places in the world, especially in isolated and rural regions, where there is little to no
infrastructure, employ mobile banking. In nations where the majority of the population lacks
access to banking, this component of mobile commerce is also well-liked. The majority of
these locations only have large cities with banks, thus clients must drive several hours to the
closest bank.

Advantages of online banking:

There are other benefits to banking online in addition to the flexibility of doing it from any
location at any time. You may able to:
Online bill payment: You don't have to take time away from your routine to visit the bank,
which might be a few of the top benefits of online banking.
You may immediately pay your bill online by logging into your account. When you have
monthly payments to and from suppliers, you may monitor your cash reserves more
effectively by setting up automatic payments.
Convey (Transfer) funds: You could need to quickly transfer money to a customer or vendor,
or you might need to move funds from one account to another. You may safely transfer the
money online rather than sending a certified check and expecting for its clearance.
Make online checks deposits: You might be capable of cashing checks online quickly rather
than travelling to a bank location and standing in line. You can always bank on the fly
because the majority of financial institutions offer an app that duplicates their services on
your phone. Also, some banks have customer support that is available around-the-clock, so
you may do so whenever you like.
Reduce your overhead costs: If your company uses an online bank, your banking costs may
be reduced because the expense of maintaining branches would not be borne by the bank.
Also, they could have more no-fee choices, which would increase your savings.
Negative aspects of internet banking:
Although internet banking is always getting better, there are certain drawbacks for company
owners who need rapid access to their financial services at all times.
Disruptive technologies:
A reliable internet connection is necessary for online banking. Your ability to access your
accounts can be impacted if your internet service is interrupted due to a power outage,
server problems at your bank, or if you're in a remote area. Due to scheduled equipment
maintenance, you may not be able to log into your accounts and may need to choose
another option.
Absence of a personal connection:
A benefit over internet banking might come from a human connection with your bank.
Having that relationship might be beneficial if you require a business loan, a new line of
credit, a fee waiver, or to alter your present banking requirements. You may create a
business account that is customised to your particular needs with the use of in-person
banking connections. In order to prevent lengthy waits on your money, they can also add
notes in your files concerning checks, cash deposits, and overseas transfers. An ideal
relationship would combine human contact with your banker for assistance with larger
issues with internet banking for your daily activities. In this manner, you may help your
business in a variety of ways.
Concerns regarding privacy and security: Although financial organisations have excellent
security, no system is error-free. Hacking of sensitive data is always a possibility, but you may
be able to avoid it if you:
• Only use the mobile app and the websites properly. A little lock should be seen to the left
of the search feature, indicating that the page is safe.
• Make sure your password is strong and made up of a combination of letters, numbers, and
symbols. Regular password changes are also essential.
• If you have not authorised the use of text messages for communication, do not click any
links in text messages.
• Implement two-step authentication for an additional degree of security.
Limited services: According to Hasan (2002), the bank has adopted an important technique
to draw in consumers, which is online home banking. Rao et al. (2003) conducted a
theoretical analysis of internet banking in India and also compared it to foreign banks and
discovered that there is still a long way to go for the Indian bank to offer online service and
that there is enough infrastructure in place as well as enough users to reach a critical mass.
Online banking is rapidly gaining popularity in India, according to Mookerjee (1998), Pegu
(2000), Gupta (1999), and Das Gupta (2002). By the year 2005, a highly competitive internet
banking industry and a sizable sophisticated would develop, in India mostly banks have their
websites but they do not provide transactional internet banking.
Today's banks are continually updating and improving its digital assets because they are
aware that company owners seek the ease and simplicity of online banking. Using the fast-
evolving banking technology, you may develop a digital banking system specifically for your
company's requirements. Talk to your bank about the time and money savings of turning
electronic if you think internet banking might help your company.

Modern Trends:
As internet banking has developed, new banks have been established that only function
online and don't have a physical location for consumers to visit. Online banks can provide
greater interest rates on savings accounts than traditional banks since they don't have to pay
for and maintain real "bricks-and-mortar" buildings (interest payments are fees that
customers collect for keeping their money in the bank). Clients of online banks may do all
common banking transactions online (including paying bills online, viewing images of
cancelled checks, and transferring money to accounts at other banks and brokerages).
Several of these clients allow their employers to electronically deduct their wages from their
bank accounts (a method called direct deposit, which is also very commonly used by clients
of traditional banks). Direct deposit is not, however, available from all employers. Customers
of online banks are unable to cash paper checks that they receive at their physical locations.
He or she must deposit the cheque in an ATM that accepts deposits for their bank or send it
to their bank. This difficulty is perceived by some clients as a disadvantage of utilising an
online bank.