PROJECT REPORT

ON

“INTERNET BANKING SYSTEM”

SUBMITTED TO THE UNIVERSITY OF MUMBAI IN THE PARTIAL FULFILLMENT OF

THE DEGREE B.COM (BANKING & INSURANCE).

SUBMITTED BY:

GANESH ANAND MULYE

T.Y.BBI

ACADEMIC YEAR: 2023-24

PROJECT GUIDE:

ASST. PROF. MONIKA SINGH

M.COM (ACCOUNTS AND FINANCE).

SUBMITTED TO:

UNIVERSITY OF MUMBAI

SONOPANT DANDEKAR ARTS, V.S. APTE COMMERCE AND M.H. MEHTA

COLLEGE, R.H. SAVE INSTITUTE OF MANAGEMENT, PALGHAR DIST: PALGHAR
PIN: 401404

UNIVERSITY OF MUMBAI
 DECLARATION

I, GANESH ANAND MULYE, A STUDENT OF SONOPANT DANDEKAR ARTS, V.S. APTE

COMMERCE AND M.H. MEHTA SCIENCE COLLEGE, PALGHAR DIST: - PALGHAR, PIN:
- 401 404 STUDYING IN T.Y.BBI HEREBY DECLARE THAT I HAVE COMPLETED THIS
PROJECT ON “INTERNET BANKING SYSTEM” DURING THE ACADEMIC YEAR
202324. THE INFORMATION SUBMITTTED IS TRUE AND ORIGINAL TO THE BEST OF MY
KNOWLEDGE.

DATE: SIGNATURE OF STUDENT

PLACE: PALGHAR
 CERTIFICATE

I, ASST. PROF. MONIKA SINGH, HEREBY CERTIFY THAT GANESH ANAND MULYE OF
SONOPANT DANDEKAR ARTS, V.S. APTE COMMERCE AND M.H. MEHTA SCIENCE
COLLEGE, PALGHAR DIST: - PALGHAR, PIN: - 401 404 OF T.Y.BBI HAS COMPLETED
HIS PROJECT ON “INTERNET BANKING SYSTEM” DURING THE ACADEMIC YEAR
2023-24. THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF
MY KNOWLEDGE.

ASST. PROF. MONIKA SINGH SIGNATURE OF THE

SIGNATURE OF PROJECT GUIDE PRINCIPAL OF THE COLLEGE

SIGNATURE OF CO-ORDINATOR SIGNATURE OF

EXTERNAL EXAMINER
 INDEX

CHAPTER TITLE PAGE NO.

NO.

1 Introduction 1 to 7

2 Literature Review 8 to 25

3 Research 26 to 29
Methodology

4 Data Analysis 30 to 49

5 Finding 50

6 Conclusion 51

7 Suggestion 52

8 References 53
 ACKNOWLEDGEMENT

If words are considered as a symbol of approval and token of appreciation then let the
words play the heralding role expressing my gratitude. My successful completion of this
project report involved more than just my desire to earn a valued degree working on this
project has presented me with many insights and challenges.

I would like to thank the University of Mumbai for introducing Accounting and Finance
course, thereby giving its student a platform to abreast with changing business scenario,
with the help of theory as a base and practical as a solution- I am also thankful to the
management of S.D.S.M College of PALGHAR for making all the facilities available and
espousing the cause of the research. I would like to thank our honourable principal Dr.
Kiran Save.

I would like to express my earnest gratitude to Ms. Monika Singh for her superlative
guidance and unflinching support throughout the project work. No development would
have been feasible had it not been for their excellent supervision, constant encouragement
and careful perusal, in completion of the project successfully.

Last but not the least; I would like to thank my parents & teachers for giving the best
education and friends for their support and feelings without which this project would have
not been possible. Many others without whose invaluable help and expert advice this
project would not have been the same ought to be cited.

With the completion of my project entitled "INTERNET BANKING SYSTEM"

GANESH ANAND MULYE

 EXECUTIVE SUMMARY

Internet banking systems allow customers to perform various financial transactions and manage
their accounts online. These systems typically offer features such as account balance inquiries,
fund transfers between accounts, bill payments, online loan applications, and account statements.
Security measures, such as encryption and authentication, are integral components to ensure the
safety of users' financial information. Banks continuously update and improve their internet
banking systems to enhance user experience and security.

E-Banking is web-based Banking. Now a day due to emerging global economy, e-commerce and
e-business have increasingly become a necessary component of business strategy and a strong
catalyst foreconomic development. As a third world developing country, Bangladesh is far behind
to reach theexpected level of global banking system. At present the banks in Bangladesh are using
the limitedelectronic banking services. E-banking product and services include wholesale
products for corporatecustomers as well as retail and fiduciary products for individual customers.
Foreign commercial banksand private commercial banks are relatively in a better position to
provide on line banking services.Dutch bangle bank is acting as a pioneer in this sector. Customers
who are habituated with onlinebanking thinks that online banking services are relatively good then
manual system, but they notsatisfied with the quality of services and bank personnel behavior to
that extent.

The internet banking system executive summary would outline the key features, benefits, and
objectives of the system. It would likely include information about accessibility, security
measures, convenience, transaction capabilities, and customer support. Additionally, it might
highlight how the system enhances user experience, streamlines banking processes, and ensures
data protection.

Keywords:

• Online banking
• Electronic banking
 INRODUCTION

In first chapter of the thesis, first some background information of the Internet banking and web
sites of banks are provided, followed by the problem discussion. Finally, the purpose and the
research questions are presented, followed by the disposition of the thesis.

Internet banking, also known as online banking, e-banking or virtual banking, is an electronic
payment system that enables customers of a bank or other financial institution to conduct a range of
financial transactions through the financial institution's website.

Banking allows individuals, governments, and corporations to get the necessary financial support.
It enables you to borrow funds at competitive interest rates. It allows borrowers to manage their
cash flow. It empowers you to initiate instant money transfers and make payments remotely.

ICICI was the first bank to champion its usage and introduced internet banking to its customers in
1996. ICICI Bank was the first bank to introduce internet banking facility in the country in order to
enable individuals and corporates to transact online without visiting the branch. It was also the first
bank to start mobile banking in the country.

Net banking provides a secure environment for conducting banking transactions. Customers have a
unique login ID and password for their account. Net banking enables customers to apply for loans
or insurance online. Customers can manage their debit/credit cards and update addresses through
internet banking.

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 BACKGROUND
The Internet is the driving engine of the new economy and it has given birth to Internet
banking
(Daniel,
1999). Internet banking is predicted to transform and revolutionize this traditional industry -
banking. The Internet offers banks the opportunity to better meet customer needs through
enhanced interaction, data mining and customization (Mols, 1999).

Online banking was first introduced in the early 1980s (Kalakota, 1997). Online banking
provided the customer with an application software program that operated customers with an
application software program that operates on the customer’s PC (Liao, 1999). The customer
then dialed into the bank via a modem, downloads, and operated the programs that are resident
on his or her PC (ibid). IT was primarily employed to automate the back-office of banks in
the 1960s (Liao, 1999). This situation had been changed by a move of IT into the front office
and thus the beginning of management information systems (ibid). Technology was deployed
to extend the back-office (core process and support process) to the front office and beyond
the branch (Llwellyn, 1995). This extension made the banking industry enter a new era, where
an explosion of IT applications has been seen throughout banking services, and the division
between front and back-office has become less relevant as integrated systems increasingly
blur the line (Liao & Shao, 1999).

Internet Banking is defined as the conducting of banking transactions through the Internet
(Liao, 1999). The difference between Internet banking and online banking is that no
proprietary software has to be installed for accessing the banking service over the Internet.
Banking services can be acquired through the public network of the Internet. Hence, a
customer can have accessed to his/her bank account through the Internet (Liao, 1999).
Banking activities are easily digitized and automated and, thus, from an operational
perspective, lend themselves to the Internet (Elliot & Loebbecke, 2000; Daniel, 1998;
Cervantes, 1997; Morgan Stanley & Dean Witter, 2000).

Marsh (1999) believes that major commercialization began in 1994 when shopping malls and
banks arrived on the Internet bringing a “new way of life”. However, The Security First
Network Bank (www.sfnb.com) was the first Internet banking in the World that was built on
October 18, 1995 (Kim Humphreys, Security First Network Bank, 1997 and Gandy, 1995).

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Technology, in particular the Internet, is a key driver of internal changes (Jayawardhena &
Foley 2000). The Internet is believed to change the way; firms interact with their customers
and thus the way they initiate, develop and terminate relationships with them (Mols 2000).
Traditionally, banking has had the attributes of the classic oligopoly: risk avoidance; product
uniformity; buttoned-down managerial conformity; standard interest rates and pricing;
limited cost control and market innovation; relatively undifferentiated customer service and
surprisingly, considering the lack of competition- lackluster financial performance (Dial,
1995). The potential competitive advantage of the Internet for banks lies in the areas of cost
reduction and satisfaction of consumer needs. Put together, the reduction of costs and
increased customer satisfaction makes the logic of the Internet compelling (Kalakota 1997).
Jayawardhena & Foley (2000) argue that Internet banking allows banks to delegate tasks to
the customer. Many of the traditional tasks performed by bank counter clerks can now be
transferred to the customer. For instance, if a customer carries out transfer of funds between
their Internet bank accounts, or pays a bill, they are carrying out a task that would have been
undertaken by a bank employee on the customer's instructions in a terrestrial bank. This saves
time and money and the likelihood of committing errors that are the fault of the bank are
minimized. Customers benefit through peace of mind from knowing that transaction details
are exactly what they wanted (ibid).

Banking activities are easily digitized and automated and, thus, from an operational
perspective, lend themselves to the Internet (Elliot & Loebbecke, 2000; Daniel, 1998;

Cervantes, 1997; Morgan Stanley & Dean Witter, 2000). The potential competitive
advantage of the Internet for banks lies in the areas of cost reduction and satisfaction of
consumer needs. However, recent reports such as CSFI (2000) - a survey of bankers - show
that e-banking is believed by some to be costly to deliver, unprofitable, open to fraud and
potentially damaging to customer relationships.

Technological developments in online banking make it much easier and cheaper for
customers to compare and contrast products and to establish multiple banking connections
(Buhl & Will, 1998). Fojt (1996) contends that better communications technology will alter
dynamics of purchase decisions. Several authors (e.g. Birch & Young, 1997; Mathe & Dagi,
1996; Gandy & Brierley, 1997) have carried out research on customer requirements. Time,
privacy, control and economy are among the important aspects that customers are

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 concerned with. People are becoming busier and hence are seeking to carry out transactions
at a time of their convenience. Therefore, people prefer Internet banking instead of
traditional banking. One important factor on the Internet banking is website of Bank.
Websites should be able to convey all the information for both current customers and
potential new customers via the Internet (Jayawardhena & Foley, 2000). If the content of
the site fails to pass sufficient information on account capabilities, then the site is not
fulfilling its objectives (ibid)

A well-designed website creates an interest in the firm and its offerings, and it should also
offer the users opportunities to reconstruct the website in their minds so that it matches
their cognitive structures
(Gronroos et al., 2000). The Web’s interactive features multimedia content and capacities for
inexpensive customization (Kling, 1994) have increasingly attracted the attention of
commercial enterprises (Dholakia & Rego 1998). Non-price competitive advantages have
become ever more critical because instant price and technical comparisons on the Web are
essentially cost-free and feasible for consumers (Hof et al., 1998). A sense of loyalty that
comes from an online company offering better service than its competitors is the determining
factor in customer loyalty (Reichheld & Schefter, 2000). Therefore, focusing on quality of
service is the primary concern of Internet based ecommerce (Griffith & Krampf, 1998). The
Internet, if properly utilized, can be a powerful tool to increase overall service offerings and
create a higher standard in various industries (Griff & Palmer, 1999).

According to Chaffey (2001), the banks’ website provides a better way for communication.
When assessing the success of a web site, the role of the Internet in communicating with
customers and other partners can best be considered from two perspectives. First,
organization to customer direction: how does the Internet complement other channels in
communication of proposition for the company’s products and services to new and existing
customers with a view to generating new leads and retaining existing customers? Second,
customer to organization: How can the Internet complement other channels to deliver
customer services to these customers?

Since the Internet is an open network, Internet banking customers appear to be much more
concerned with the security of their banking transactions and the privacy of their personal
information. Suganthi et al. (2001) view risk in the context of security concerns and risk in
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the context of trust in Internet banking. The Internet banking, compared to traditional
banking, heavily involves non-human interactions between customers and online bank
information systems. Traditional risks have thus been reshaped. In the physical environment,
frauds traditionally were paper-based or people – based but now it happens in scientific way.
Swaminathan (1999) argues that recent developments in Internet payment systems have
caused an average customer to be less concerned about the security of electronic exchanges
or privacy issues.

Competition in the financial services industry has been increasing dramatically in recent
years, owing to the growth of Internet banking Wisner and Corney (2001). Consequently,
keeping existing customers as well as attracting new ones is a critical concern. Collecting and
monitoring customer feedback allows firms to assess and upgrade their service and product
capabilities as needed to maintain and improve competitiveness (ibid). Financial services are
an important product, which all economically active individuals are obliged to use (Davies,

1996). Financial ‘‘know-how’’ is a critical factor in the purchase of financial products

(Harrison, 1997); where customers do not have and do not wish to develop this ‘‘know-how’’,
they seek advice.

PROBLEM DISCUSSION
One research study conducted by Broderick and Vachisapoinpuk (2002) explored how
customers perceive and interpret Internet banking website. Findings showed that, although
traditional concepts such as reliability, responsiveness, assurance still have impacts on
perceived service quality, elements having the most immediate impact in service evaluation
were introduced: cues in the service setting, key events in the service encounters and level
of customer participation. Problems such as slowness, poor navigational possibilities, poor
interactivity within the service setting and critical incidents such as lack of help and
empathy by service providers in service encounters all triggered considerable switching
and negative word of mouth (ibid). Many respondents expressed lack of confidence
regarding the roles and service scripts; and doubts due to the perceived complexity of the
process and risks involved (Broderick and Vachisapoinpuk, 2002). Parasuraman (2000)
proposed that flexibility, convenience, efficiency, and enjoyment are examples of major

5
positive themes in the online environment. Negative themes included security concerns,
risk of obsolescence, impersonalisation, and lack of control.

When customers evaluate the quality of the service they receive from a banking institution.
Their satisfaction depends on website features (Doll & Torkzadeh, 1988), and hence it is
important to analyze website features of banking services delivered over the Internet.
Website features have been analyzed in terms of speed of download, content, design,
interactivity, navigation and security features (Jayawardhena & Foley, 2000).

As the convenience and availability of the Internet medium increase, websites have become
more important in disseminating and accumulating information for manufacturers,
retailers, educational institutions, governments, and a variety of other organizations
(Quelch & Klein, 1996). Websites facilitate communications between customers and
suppliers, or information seekers and suppliers. Especially important are perceptions of
quality that users develop when using a Web site. As more and more business is conducted
over the Internet, it is extremely important for company Web sites to project a high quality
image that truly facilitates communication between buyers and sellers, reflects positively
on the firm’s brand equity, and generates business (ibid). Nowhere is such impact more
crucial than in the banking business. Communication is important in altering consumers’
beliefs and attitudes and is essential in fostering satisfaction as a basis for future behavior.
Satisfaction and behavioral intentions can be influenced by the communication techniques
of a service provider (MacStravic, 1994)

The number of Internet banking users is increasing very rapidly. Competition within banks
has been enhanced for increasing bank’s customers. Warkentin (1997) viewed that the key
danger to communication is a communication breakdown between user and medium. Such
breakdowns occur when the user lacks contextual understanding of the website or user
expectations regarding the website processes are not met (ibid). Web can make online
companies more effective and appealing, and help them to achieve higher levels of
customer satisfaction and retention (Gronroos et al., 2000).

Jayawardhena & Foley (2000) viewed that to exploit the convenience of Internet banking
fully customers must be able to make applications for core banking services and open new
accounts (savings accounts, loans, etc). Relatively few banks offer the facility of making

6
application and enabling new services. It is important that both existing and potential
customers be encouraged to make applications and acquire new services. Increasingly
customers are looking for opportunities for transacting a number of diverse products and
services under one roof. Banks are increasingly offering non-core banking products and
services. Therefore it is logical these products and services are made available through the
Internet. Such facilities include insurance, credit cards, mortgages, etc. (ibid).

Moreover, to exploit the full potential of the Internet banking, marketers must continuously
reassess and redesign their websites to meet changing customer needs and desires, respond
to competitors and a dynamic marketing environment, and leverage new or improved
technologies. Although efforts to study the drivers of customer service in the Internet
banking space have been made, few attempts have been made to specifically tie these
factors to the design and effectiveness of Web sites (Ghingold & Ahmed, 2003). Hence,
this study will therefore focus on understanding of the role of websites on Internet banking.

PURPOSE

The purpose of this study is：

“To gain a deeper understanding on the role of websites in Internet banking”

RESEARCH QUESTIONS
To be able to reach the purpose above, the research questions of this study are specifically
formulated as below:

1. How can website design in Internet banking be described?

2. How are such websites used for enhancing customer service?

DEMARCATIONS
The time available for this study was limited, and aspects of the topic were many, an attempt
to narrow down was made. The study would focus only customers’ perspective in Internet
banking rather than bank’s perspective. As the aim was to gain a deeper understanding of
the role of website in the Internet banking, from a consumer’s perspective, very little
attention would be given to the perspective of the bank.

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 DISPOSTION OF THE THESIS
This thesis consists of seven chapters, as shown in figure 1.1. In this chapter, an introduction
to the research area is given, and the research purposes together with the research questions
are stated. The next chapter presents the literature review followed by the Conceptual
framework of reference in the third chapter. In the fourth chapter, the methodology used
for this thesis will be discussed. The fifth chapter will handle the empirical findings, which
consists of a company background followed by the gathered data from the interviewees and
personal observations. In chapter six, the empirical findings will be analysed against frame
of reference. Finally, in chapter seven the presentation of this study's contribution is brought
up under conclusions. This chapter also discusses implications for management, theory and
future research.

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LITERATURE REVIEW
This chapter brings up relevant literatures required to find answers and connect tour research
questions. First, present vital literature about web design along with key concepts of different terms
and models so that it becomes easier to understand the research area. Then, we present literature
about Internet shopping and
Internet banking in respect of customer’s perspective for better understanding of customer service.
Finally, we discuss various models that play important roles in customer service.

WEBSITE DESIGN

For many e-businesses, too much attention is paid to the aesthetic design of the Website, which
ends up looking amazing but actually causes frustration because customers have difficulty in
finding what they are looking for. According to Ody (2000), the main reasons why customers go
onto the Internet are to find information or buy a product or service with an emphasis on
convenience and speed. Ziff-Davies (2000) points out that the concept of the Internet has raised
customers’ sensitivity to fast customer service. Any e-business that sticks to this basic principle
when designing its website should be relatively successful.

When looking at what makes a good quality website, it is important to take into account the main
objective of the design. A Website should reflect the value proposition and address whether it is
trying to satisfy the customer needs to ensure repeat visits from the customer in the hope of gaining
customer loyalty. The result should be common ground between the site’s goals and the customer’s
goals; this reveals the ideal customer experience (Good, 2000).

According to Donlan (1999) although delivery is also highly important in fulfilling customer needs,
perceptions and expectations also need to be managed and the website plays a main role in this.
Once the basis of the Website function is clear, the type of customer it is hoped will be attracted
can then be assessed and judgment made on what graphics, effects and other matter can be added
to increase the value proposed.

As well as stating what the website offers, the information should be clearly and logically organized
(Foreskin, 2000; Vassilopoulos & Keeling, 2000): if customers have to take time to find the

9
information they are looking for, they are unlikely to stay on the website. In some cases, user
instructions are needed before the customer can navigate the website. An example of this is
exchange platform websites where customers can exchange goods with other customers or offer
prices and requests to businesses through the website. This type of business model has rarely been
accessible offline and is a new experience for many people. Therefore, clear instructions are needed
directly from the home page to avoid confusion and frustration.

Models of Website Design

The role of Web designer has been occupied by professionals and amateurs. Books on the subject
mean that anyone, whether creating a website as a hobby at home or starting up a new business,
can do it. But usability is the key to a successful website. PR Newswire (2000), report an IDC
study, which concluded that ‘Web performance and design are currently the largest obstacles to
online purchases.

The website should reflect the image that the company is trying to project and which the customer
will remember and return to. An example of a website that achieves the image concept is
EasyJet.com. The colours on the Website are orange and white, the same as the airline’s corporate
colours and its simplicity reflects the cheap, no-frills concept. By matching the physical with the
virtual, Easy Jet has successfully encouraged customers to use its website to such an extent that it
has indicated that all future bookings will be made in this way.

The various factors examined that can contribute to delivering good service quality through a

website have been grouped into four categories by Cox and Dale, (2001): (1) Ease of use; (2)

Customer confidence;

(3) On-line

resources;

(4) Relationship services.

Each category relates to a different part of the Website experience and serves to enhance customer
satisfaction to the extent that the customers will return.

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Ease of use is given to all the factors relating to the design of the Website. The key factors in this
category reflect the usability of the Website during customer navigation and aim to reduce customer
frustration. The virtual nature of a website means that communication with the customer has to be
enabled through the use of text, graphics and animation. Guidance through the Website is done by
means of links and searches. All of these factors relate to the design of the Website and its usability
factor. If the design is of poor quality, customers will not be able to navigate pages to find what
they are looking for, and are unlikely to make transactions.

Customer confidence refers to how customers feel when visiting a website in terms of accessibility,
speed, reliability and customer service. The key factors identified should help to create a good
experience for the customer by making them feel safe and confident in not only using the site to
find information but actually make transactions. Trust is a crucial factor in e-business and is one of
the main barriers to customers making purchases on-line due to security issues with credit cards
and privacy issues concerning what happens to their personal details. Trust can also be linked to
customer service. Customers need to know that they can contact a company if problems occur and
preferably interact with a company employee either via e-mail, telephone or by instant messaging
on-line. The use of FAQ should satisfy customers and deter them from using customer service, but
the ability to contact a person heightens the feeling of confidence in the Website.

On-line resources refer to the products and services offered on the Website, with a focus on the
Website’s ability to provide sufficient information for customers to make the correct choice and be
able to make a purchase on-line. If customers are making purchases on-line, products need to be
shown and described sufficiently well for customers to make choices. Once selected and ordered,
confirmation details and delivery expectations should be communicated clearly and quickly to the
customer and where possible, they should have the means to keep track of their order on-line.
Others refer to the feedback mechanism during the transaction process and afterwards, which
allows the customer to be kept informed of their order.

Relationship services contain key factors that add value to the customer experience by building a
relationship with them or by offering extra services and information. It contains the quality factors
that enable the Website to establish a relationship with the customer through customization,
frequent buyer incentives and through offering services that add value.

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A Web site is unique in its hypermedia attributes (Jayawardena & Foley, 2000). Hypermedia
integrates multimedia content with hypertext connection (ibid). Multimedia content refers to
information, while hypertext connection pertains to navigation (Bornman & Solms, 1993). User
satisfaction depends on Web site features (Doll & Torkwase, 1988), and hence it is important to
analyse Web features of banking services delivered over the Internet. Jayawardena & Foley (2000)
suggested that the features of Internet banking Web sites, such as:

• Speed;
• Content;
• Design;

• Interactivity;
• Navigation; and

• Security,

Speed

Perhaps the most critical factor for any Website is speed. Holt (2000) stresses the importance of a
fastdownloading homepage. Zona Research (Gann, 1999) have calculated the probability of
customers using a site if the page response was too slow, reporting that, if the page downloaded
under seven seconds, fewer than 10 per cent of customers would leave the site and that if the page
takes eight seconds, 30 per cent of customers will leave, and if it exceeds 12 seconds, 70 per cent
will leave. Bearing in mind that customers use the Internet for convenience and speed, they will
not tolerate slow access. The zone of tolerance for customer expectations leaves no margin for error
and e-businesses must address speed and anticipated capacity needs as a matter of prime
importance.

Studies have revealed that there is a significant correlation between Web site download speed and
Web user satisfaction (Moyle et al., 1998; Hoffman & Novak, 1996). While speed is often a factor
beyond the control of a site owner, the use of extensive high-resolution graphics and an inefficient
host server has a significant negative impact. On the positive side, many commentators have
observed that in general, speed of downloading has increased in recent times. Equally, it is
important to recognize that speed is also dependent on the user's computing hardware and method
of connection. Animation is a contributor to slow page loading. Haine (1998) recommends that if
12
a designer thinks it is necessary to have animation, it should be made to stop cycling after ten
seconds to allow the user to scroll it off the screen. Nunley (1998) suggests that information content
should account for 80% of the site. Audio clips and other multimedia gizmos that require users to
download plug-in programs, install them, reboot and return to the Website drive away users.

Content and design

Content and design have been found to influence user satisfaction. Moyle et al. (1998), in their
research of Web user satisfaction, found that these attributes encompass:

(1) Product information content;

(2) Amount of product information;

(3) Product information format;

(4) Language; and

(5) Layout features.

These characteristics were found to influence the perception of information relevance, accuracy,
comprehensibility, and comprehensiveness, as well as perceived language customization (Doll et
al., 1995).

Product/service information. Vassilopoulos & Keeling (2000) argue that for any product advertised
on the Internet, a clear picture with all the necessary information on brand, size, colour, capabilities
and price should be provided so that the customer is not misled. Good (2000) reported on a website
in which the information relating to the picture of the products was at the side so customers had to
spend time matching the information to each product. It is often such simple mistakes as this that
can cause intense frustration. As well as stating a product description, the conditions of purchasing
a product should also be made available to the customer. Click sure (1999) states that information
on warranties and guarantees should be made available to the customer either during the selection
process or when purchasing an item.

One of the most irritating factors for customers shopping on-line is to find that the item they have
requested is not available. If they are informed of this whilst choosing the product (i.e. the
information on stock availability is real time) they may well continue to browse the Website and

13
find something else of interest. The worst-case scenario is for the customer to place the order and
to be sent e-mail a few days later informing them that the product is out of stock (Consulting, 1999).

Good (2000) gave an example of a website, where the

customers could place items in their shopping basket but then
only found out during the purchasing process whether the
goods were in stock. It also showed a shipping price even
though the goods could not be shipped. In the Andersen
Consulting study (1999), it was found that many companies
carried on taking orders to be delivered for Christmas even
though the products were either not in stock or would not
make a pre-Christmas delivery. This indicates the importance
of providing real-time information for customer convenience.

Pages, text and click the pages on a Website should ideally be short; however, in some cases
scrolling pages are sufficient if the information is suitably laid out and not excessively long. Holt
(2000) argues that the use of headings and paragraphs is as important as in a book, magazine or
newspaper and there should be a button at the bottom of the page or each section asking if the user
wants to return to the top of the page. For transaction purposes, it is crucial that customers are able
to make purchases quickly with minimum pages in the checkout process (Foreskin, 2000; PR
Newswire, 2000). Amazon.com have been praised for their ``one click’’ order process and one or
two pages should be the limit in all Websites enabling ordering on-line. It also goes without saying
that the process of opening an account should also require just one page for ease of use by the
customer. Foreskin (2000) discusses further issues for shopping on-line and points out that some
Websites make simple mistakes that cause frustration for the customer. One such mistake is not to
provide a check out button so that the customer can proceed straight to the order process from any
page. There should also be a shopping basket button for the user to press at any time to see what
they have placed in their virtual shopping basket, allowing them to remove items if so wished.

Navigation

Navigation refers to the hypertext connection of the multimedia content. Connection includes
elements such as homepage hyperlinks, amount of Web pages, number of hyperlinks, hyperlink
encoding and personal contact possibilities; these in turn have been found to influence user

14
satisfaction (Gatian, 1994; Doll et al., 1995). A search facility along with a site map is useful. It
was earlier emphasized that the content and the design of bank Web pages must reflect the nature
of the Internet, for instance a page that scrolls down for about six to seven pages long is
inappropriate. Site navigation plays a large part in this context. The hallmark of a good site is that
the site index should always be in display, thereby making it very easy and fast for someone to
arrive at the desired location.

Links. The navigation of a website cannot be carried out without valid links (Constantine &
Lockwood, 1999; Spool et al., 1999). Links should change colour once used so that the user knows
they have used the link before and should correctly describe the information to which they lead
(see
Creative Good, 2000; Vassilopoulos & Keeling, 2000). This is also relevant for graphics, which
can be used as links. Well-thought-out Websites feature graphics that change to text when the mouse
cursor passes over them, revealing the category of products relating to the graphic.

Constantine and Lockwood (1999) also discuss the problem of page bouncing and deep drilling.
Page bouncing occurs when the user follows links that serve a series of pages and then has to return
to the original page before finding a link to more pages. This results when the information is finely
subdivided. The answer is to use probability to decide whether a user interested in one topic will
be interested in another and to create a direct link between the two. The other problem of deep
drilling is similar to page bouncing but refers to Websites where the user has to follow multiple
links which are sometimes confusing and force the user to go back and forth between pages to find
information which should logically follow on from information found on the earlier pages.

Links are the main way for the users to navigate their way around a site and should be clear and to
the point. Spool et al. (1999) argue that links should not be embedded in pages of text which
requires the user to scroll down to find them and also that the link should not be so long as to fall
on to two lines. This as well as misleading the user into thinking that there are two links instead of
one is also a waste of space.

Consistency and site maps. Although an increasing number of people around the world are starting
to use the Internet, one should never assume that once a user has navigated one Website, they can
easily navigate them all (Constantine & Lockwood, 1999). Each Website represents a different
business or value proposition and therefore the layout will differ according to what the website is

15
offering. Furthermore, the pages within the website need to be consistent in appearance and design
(Spool et al., 1999). Vassilopoulos &Keeling (2000) argue that it is also important that the same
procedures occur for similar or related things wherever the user may be within the site.

In order to achieve this level of consistency many Websites feature a menu which appears in the
same place, with all the main links on every page. Spool et al. (1999) discovered that menus or
navigation bars at the top and bottom of a page allowed more users to navigate the site successfully
than menus at the side. Good (2000) point out that there should be a ``home’’ button on every page
to help the user get back to the home page, if necessary, without having to click on the back button
in the browser menu, which could be a lengthy and frustrating process depending on where the user
is in the site. Spool et al. (1999) also found that users navigating sites with a site map were twice
as successful in finding what they wanted, compared to those sites without, and that informing the
customer of where they were was important. Good (2000), on the other hand, argue that a website
with a clear menu and relevant information should be satisfactory and that users are not actually
interested in where they are within a site as long as the links are clear.

Search. The use of a search mechanism to navigate a website is one of the first strategies used by
customers to a website. Spool et al. (1999) found that a third of the users tried this facility first
before resorting to links and the menu. One of the outcomes was that users assumed that the
search would cover the entire site and got confused when the search only covered a particular
area; this needs to be made clear next to the search button.

The use of drop-down lists can clear up this confusion because it informs the user of what
information is available without the user having to guess what to type into the search box (Good,
2000; Foreskin, 2000).

Once the search facility has been used, the results should be listed in order, starting with the most
relevant. Creative Good (2000) suggest that the results should ideally be on one page only and
limited in number; however, if the site is a search engine, one would expect a few pages of results
depending on the number of sites it scans. According to Spool et al. (1999) one of the important
aspects is that the results are relevant and information such as advertisements will deter users from
using that particular search facility again. Good (2000) also mention the use of language in the
search criteria, they found that many search facilities did not recognize singular and plurals for
searching the same word.

16
Interactivity

The interactivity of the site relates to the optimisation of hypermedia attributes (Moyle et al., 1999)
by providing custom-made solutions, allowing users to customize preferences, and enabling the
bank to provide bespoke solutions on-line for users who have provided personal information. It is
technically feasible to provide interactive loan calculators, exchange rate converters, mortgage
calculators, etc. on World Wide Web sites. The provision of these facilities should work to the
benefit of the banks in several ways. First, the customers could judge for themselves their
commitments for something like a loan, which might otherwise require the assistance of bank staff.
Second, these facilities can draw non-customers into the bank. Third, as noted earlier, an Internet
banking site has the opportunity to position itself as the focal point of electronic commerce.
Interactive functions could be a focal point to attract shoppers.
Security

Lack of security whilst making transactions online is reported to be the main barrier to customers
shopping on-line. It is crucial that any Website has a security policy accessible on every page or
offers a secure payment method on-line (Verdict, 2000; Vassilopoulos & Keeling, 2000; Vernon,
2000; Click sure, 1999). The risk of fraud on-line is proposed to be the same as paying by credit
card in a restaurant; however, customers are far more reluctant to give out card details on-line and
new ways of paying for goods over the Internet are being rapidly developed. Some e-businesses
have their security managed by a third party, as described by Vernon (2000).

Perhaps the most important issue of all is how safe it is to use a Web site and to conduct financial
transactions over the Internet. Sites employ a multitude of security features. Encryption technology
is the most common feature at all bank sites. This is supplemented by a combination of different
unique identifiers, e.g. for a password, mother's maiden name, a memorable date, a favourite
destination, etc. Some sites require information to be input in a random order, the order changing
with each log in. Additionally, most sites employ a method whereby five minutes of inactivity
automatically logs users off the account.

All Internet banking facilities are still at an early stage of development and hence the appearance,
features and functions are continually evolving. (ibid).

17
Website Design Strategy

Web design has evolved from static hypertext publishing in the early days to dynamic multimedia,
Web database application servers. More importantly, new business models that bring savings,
revenues, and customer relationships are being incorporated into commercial Web site design.
There are two generic Web site design strategies:

1 informational/communicational strategy; and

2 on-line/transactional strategy

Informational/communicational strategy

In the informational/communicational strategy, the Web is used to support but not to replace a
company’s main business activities. Companies do not limit themselves to just marketing on the
Web. As attar of fact, they look at other traditional media of advertising and marketing study in
order to meet their business goals and marketing objectives. Looking at Web marketing as another
tool in the company’s marketing arsenal (Clark,
1997), the informational/communicational design is the most common use of Web marketing today.
Liu et al. (1997) reported that 93 per cent of Fortune 500 companies have publicly accessible sites,
but fewer than 26 per cent of those sites support transactions. On the other hand, there is no doubt
that informational/communicational design on the Web can also produce significant sales in other
areas of business. For example, Insight Direct, a discount computer cataloguer selling mostly to
business, generates only 10 per cent of its sales from its on-line catalo, but more than 75 per cent
of its new customers come from the site.

On-line/transactional strategy

The on-line/transactional strategy invariably provides an electronic catalo of products for sale.
Visitors can browse through the catalo and order products online. Although the informational/
communicational design often provides an electronic catalo as well as ordering information (e.g.
by phone, fax, or e-mail), it does not support on-line transaction. Without on-line ordering Web
database capability, it hardly exploits the potential of the Web as an interactive medium. The
online/transactional strategy is what most proponents of marketing on the Web expect. Griffith &
Krampf (1998) indicated that the ability to enhance a company’s overall sales was a significant
decision factor to establish a Web site. Although there are still some hidden obstacles (e.g.

18
transaction security), it seems that most companies are likely to benefit directly from marketing on
the Web, especially for small and medium sized enterprises. In fact, there have been a lot of
successful online/transactional designs, such as Amazon.com and Virtual Vineyards. The number
of successful enterprises is growing. There are reasons to believe that the Web will become a
significant moneymaking vehicle for electronic commerce.

Customer Service

To prosper in today’s competitive business environment, companies must understand that the
customer holds the key to success (Goetsch & Davis 2004). The customer must be at the very heart
of the company’s decision making. The customers want many things from the companies they work
with. In the language of customer service, these wants are often referred to as needs. Most
customers need quality products, quality service and friendly interaction with knowledgeable
people who care about them. (ibid).

IT and Customer Service

Information technology can and is being used to improve customer service, though the use of IT is
dependent on the understanding of customer service, marketing and the information orientation of
the firm in question (Oasis, 1989). Customer service is being influenced and revitalized by
information technology. Regardless of how one visualizes customer service, either from a logistics
or marketing perspective, information technology now assumes an important role in customer
service. Information technology is a powerful tool or enabler in the arena of customer service.
Information technology is essentially in the process of migration, from the support function to the
front-line functions where the customer is served, as indeed is customer service itself. In advancing
the capabilities that IT offers the customer service function, Quinn et al. (1990) argues that, with
new technologies, executives can manage the strategic elements to achieve competitive advantage
with minimum transaction costs. Other authors concur:

Information technology promises to help companies provide more consistent levels of service and
cement relationships with customers (O’Leary, 1990, p. 44). Improvements in customer service are
being made possible by an underlying network of information technology (Austin, 1992, p. 26).
Smart companies will gain a competitive advantage by improving the delivery of customer service
through information technology (Budgets, 1992, p. 10).

19
Information technology is now viewed as a business tool, with the ability to award competitive
advantages if correctly harnessed. However, the strategic uses of information technology are only
one of three ways in which information technology can be deployed as a business weapon.

Information technology can also be used in (1) routine data processing and (2) internal operational
efficiency (Earl, 1989).

Combining the two concepts – customer service and information technology – one finds that the
adoption process is not specifically considered anywhere in the literature. However, it is evident
from documented material that there are two possible ways of examining the development of the
use of information technology in path. This is normally defined as:

(1) Paperwork/routine activities;

(2) Middle management operations/internal processes; and

(3) Strategic purposes.
From this perspective, most firms are using information technology in customer service to deal
with routine paperwork activities, e.g. accurate billing. Such use either increases the efficiency of
activities and/or reduces costs. Information technology is also being utilized in internal
management operations, e.g. products, which again leads to increased internal efficiency and/or
reduced costs. Finally, in relation to the third stage of information technology development, many
companies are aware of the strategic benefits of information technology in customer service, but
are having difficulty in actually identifying and managing such applications (Earl, 1989; Fletcher,
1990).

20
Customer Service on the Internet

Technology, in particular the Internet, is a key driver of internal changes (Jayawardena & Foley
2000). The Internet is believed to change the way; firms interact with their customers and thus the
way they initiate, develop and terminate relationships with them (Mols 2000). Many researchers
have pointed out that service quality is one of the key determinants of online retailers’ success
based primarily on the following two reasons (Järvenpää and Todd, 1997; Griffith and Krampf,
1998;
Zeithaml et al., 2000). First, online retailers’ service quality greatly influences customers”
satisfaction and intention to shop online in the future. For example, one recent report by Boston
Consulting Group (2002) revealed that 41 percent of consumers who experienced an online
purchasing failure stopped shopping at the sites in question. This report further noted that the
dissatisfied customers, on average, spent much less money on online purchasing than the satisfied
ones. Next, online retailers’ service quality is critical in attracting potential customers. For example,
Yang and Jun (2002) argued that online retailers’ service quality, particularly in terms of online
transaction security, personalized services, and accessibility of the Web sites, significantly affects

Internet non-purchasers’ perceived overall service quality and in turn, influences their willingness
to shop online.

Financial services Web sites can perform a variety of functions ranging from basic information
provision to full transactional capability. Knight et al. (1999) identify four separate levels of
information provision:

• At the most basic level, an Internet presence merely provides information about the
financial institution, with no interaction between the institution and customer other than a
possible e-mail link.

21
 • The next level allows the institution to receive information, such as an electronic loan
application.

• The third level offers the customer the opportunity to share information, such as account
balances or transaction details.
• The highest level identified allows the customer to process information.
Cox and Dale (2001) have noted that traditional service quality dimensions, such as competence,
courtesy, cleanliness, comfort, and friendliness, are not relevant in the context of online retailing,
whereas other factors, such as accessibility, communication, credibility, and appearance, are critical
to the success of online businesses. Similarly, Madu (2002) propose the following 15 dimensions
of online service quality based on the relevant literature review: performance, features, structure,
aesthetics, reliability, storage capacity, serviceability, security and system integrity, trust,
responsiveness, product/service differentiation and customization, Web store policies, reputation,
assurance, and empathy. In the same vein, Wolfinbarger and Gilly (2002), through focus group
interviews, a content analysis, and an online survey, have uncovered four factors of online retailing
experience: Web site design, reliability, privacy/security, and customer service (this factor is
primarily related to the customer-to-employee interactions).

Models of Customer Service

The studies have shown that high levels of customer service quality can exert a positive influence
on customer satisfaction (Parasuraman et al., 1988; Cronin and Taylor, 1992). Unlike the
manufacturing product quality that can be readily assessed, service quality is an elusive and abstract
construct that poses definition and measurement obstacles. The literature has suggested that service
quality is determined by the differences between customers’ expectations of service provider’s
performance and their evaluation of the services they received (Parasuraman et al., 1985, 1988).
Parasuraman et al. (1985, 1988) have conducted well-known studies to uncover key service quality
attributes that significantly influence the customers’ perceptions of overall service quality.
Parasuraman et al. (1988) later distilled these ten dimensions into five by using a factor analysis.
These five dimensions are:

• Tangibles;
22
 • Reliability;
• Responsiveness;
Assurance; and
• Empathy.

A number of research-based investigations have been made in an effort to identify, from the
customer’s point of view, the determinants of service quality. For example, Parasuraman et al.
(1988) identified five dimensions of service quality: reliability, assurance, responsiveness,
tangibles, and empathy, which can be applied to service expectations in the financial services
industry (Wisner and Corney 2001). Examples of questions in each of the categories are: ``do we
have the services and financial products that you want?’’ (tangible dimension), ``Was the bank
employee available within a reasonable amount of time?’’ (responsiveness dimension), ``Were you
treated courteously?’’ (assurance dimension), ``Did the bank employee make you feel like a valued
customer?’’ (empathy dimension), and finally, ``Have we provided you good service over your last
three visits?’’ (reliability dimension). The research of Parasuraman et al. (1988) also showed that
customers consider reliability the most important service dimension.

In the case of the banking industry, Johnston (1995) examined, by using the critical incident
technique, banking customers’ perceptions about the service quality they received and found 18
service quality attributes. They are:

• access;
• aesthetics;

• helpfulness;
• availability;

• care;
• cleanliness/tidiness;

• comfort;
• commitment;
• communication;
• competence;

23
 • courtesy;

• flexibility;
• friendliness;

• functionality;

• integrity;
reliability;
• responsiveness; and

• security

Further, Johnston (1995, 1997) examined the effects of service quality dimensions on the
customers’ satisfaction or dissatisfaction, and then classified the dimensions into satisfying only,
dissatisfying only, and dual factors (factors capable of either satisfying or dissatisfying customers
depending on the quality level of the factors). Regarding the three classifications of service quality
attributes, Johnston (1997) argued that the causes of dissatisfaction are not necessarily the obverse
of the causes of satisfaction: A bank which opens and closes erratically will lead to dissatisfied
customers; However, a bank which opens and shuts precisely on time does not automatically lead
to delighted customers.

Lohse and Spiller (1999) noted that online business Web sites’ characteristics such as a feedback
section and product lists are crucial in generating sales. Liu and Arnett (2000) considered the
following four factors as major ingredients for the success of a Web site as:

• system use;
• system design quality;
• information quality; and

• playfulness,

As for Internet banking, Sathye (1999), with respect to the adoption of Internet banking by
Australian consumers, found that two factors such as ``difficulty in use’’ and ``security concern’’
are important reasons that customers do not want to use the service.

Bahia and Nantel (2000) also proposed an alternative measure of perceived service quality in retail
banking that comprises 31 items with six underlying key dimensions. These dimensions are:
24
• effectiveness and assurance;

• access;

• price;
• tangibles;
• service portfolio; and

• reliability

25
On the other hand, Appeal and Vriens (2000) suggested the use of conjoint experiments to measure
service quality. They developed an application for measuring retail banking service quality, which
consists of 28 attributes including four service quality dimensions such as:

• accessibility;

• competence;
• accuracy and friendliness; and

• tangibles.

Of the four dimensions, the accuracy and friendliness dimension turned out to be the most important
factor in determining banking preference, followed by competence, tangibles, and accessibility. As
for Internet banking, relatively little empirical research has addressed the issue of the key underlying
dimensions of Internet banking service quality.

Cai & Jun (2003) investigated on what online buyers and information searchers perceive as key
dimensions of service quality in online retailing. They derived four factors for studying was labelled
as:

• web site design/content

• trustworthiness
• prompt/reliable service;

• communication.

Trustworthiness

Security. The breach of security may pose tremendous threats to the success of the e-banking.
Halawani (2001) identified Internet security as the leading future challenge of online banking.
Customers are concerned with their privacy when using IT-based services. For example, some
customers may have the impression that the Internet is not a secure environment for transactions
and they may fear that ``someone will have unlimited access to personal financial information’’
(Peterson, 1997). The most common procedure for Internet payment is through cash card / credit
card. However, concerns for customers are security while sending over the Internet, credit card
information including name, card number and expiration date. According to Novak (2000), security
was identified as one of the least important factors to distinguish a compelling online environment.
Customers believe that the Internet payment channels are not secure and can actually be intercepted.

26
This reduces the customers` level of trust, discouraging them from engaging in online information
search and making online banking transactions.

Trust. Customers traditionally build trust based on the image and reputation of service providers
(Grundriss, 1984). The more a customer trusts a service provider, Shemwell et al. (1994), argue, the
more likely they are to continue the relationship and decrease the perceived inherent risk. These
issues are particularly important in Internet banking services, partially because it is relatively new
and untried and also due to the intangible land uncertain processes which customers face (Broderick
& Vachirapornpuk 2002). Andreason and Lindes tad (1997) further argue that a service
organization’s image will function as a filter in the perception of quality and satisfaction, as a
simplification of the decision process and as an extrinsic information cue for customers.

The customer’s perception of service trust arises from an evaluation of the total service experience
– a judgement as to whether the promise of the service has been realized in its delivery (Kolesar &
Galbraith, 2000). Zemke and Connellan (2001) say that trust first and foremost means keeping
promises or doing what you say you will do. Trust is the backbone of business. When things do not
happen as we predict or as we tell the customer they will happen, it leaves them with high anxiety
and a desire to put things back in balance. (Zemke & Connellan, 2001).

Privacy. Suganthi et al. (2001) view users of Internet are concerned with privacy. Since the Internet
is an open network, the Internet banking customers appear too much more concern with security
and privacy of the banking transactions and the privacy of their personal information. Privacy
concerns are coming to the fore with increased Internet penetration. (Feinberg & Kadam 2002).

Communication

Communication tools. According to Feinberg & Kadam (2002) these are the different ways to
contact the company. For instance: e-mail, fax, toll-free numbers, postal address, callback button,
voice over IP and bulletin board. Traditionally, only toll-free numbers and postal addresses could
be used by customers to reach the company. However, over the past few years, e-mail has emerged
as an important tool for companycustomer communication. Further, unlike telephone
communication, which is synchronous, e-mail communication is asynchronous. This reduces costs,
since customer service queries will now be handled in countries with lower labour costs, by taking
advantage of the time-difference. Also, e-mail transmission happens on the Internet, which is
27
essentially a public service and thus the company does not incur significant transmission costs. Cox
& Dale (2002) stated that many Web sites would inform the user of a mistake by writing the
information in red next to the relevant box or area. This communicates clearly to the user that they
have made a mistake and need to redo something in order to proceed. The communication of a Web
site is carried out via text, graphics and moving animation, with text being minimal and to the point
and clearly set out.

Frequently asked questions. Frequent asked questions and their answers are available for reading.
This feature acts as self-help for customers, looking for answers to their queries. (Feinberg & Kadam
2002). It is sensible to create a list of FAQS, which can be diagnosed from the amount and type of
queries being asked by customers. Constantine and Lockwood (1999) state that a welldesigned FAQ
page should be arranged in three sections:

(1) Table of contents or topic list;

(2) List of questions organized by topic; and

(3) Index.

The most frequently asked questions should be immediately available to the customer and then if
they need to, they can choose the appropriate topic from the list. Furthermore, there should be direct
links within the answers to take the customer back to the relevant page(s).

Joseph et al. (1999) investigated the influence of technology, such as the ATM, telephone, and
Internet, on the delivery of banking service. Their study identified six underlying dimensions of
electronic banking service quality:

• convenience/accuracy;
• feedback/complaint management;
• efficiency;
• queue management;

• accessibility; and

• customization.

28
Convenience/accuracy

Accurate. Accurately performing services and providing information could help improve service
reliability (Parasuraman et al., 1988, 1991) and service outcomes (McDougall and Levesque, 1994).
The literature also suggests that IT can help improve service quality by reducing error rates (Furey,
1991; Licata et al., 1998). If customers perceive that Internet based services provide improved
service and information, they may place a higher value on such services.

Easy to use. As for Internet banking, Sathye (1999), with respect to the adoption of Internet banking
by Australian consumers, found that two factors such as `difficulty in use` and security concerns are
important reasons that customers do not want to use services. If customers view an IT-based self-
service system to be difficult to use, they may not value such a service delivery channel (Dabholkar,
1996; Galbreath, 1998). Once customers have accessed the service delivery point, they do not like
to wait to receive the service. Excessive waiting in a queue for service delivery could negatively
affect customers’ perceptions of service quality (Houston et al., 1997). Some customers would
prefer technology-based self-services if such options could reduce service delivery time (Lovelock
and Young, 1979). IT-based service options may help improve customer service quality by
providing customers with more prompt and efficient service.

Convenience. Convenience is a primary benefit sought by customers (Reed, 1998; Milligan, 1997).
McDougall and Levesque (1994) and Milligan (1997) suggested that banks with an extensive branch
office system and ATM network would have the opportunity to attract customers who are in this
convenience segment. Lerew (1997) suggested that customer satisfaction would increase when
customers enjoy the convenience of accessing their accounts at any time through interactive voice
response systems.

29
Feedback/complaint Management

Feedback service. As argued by Cox & Dale (2002), customer service plays an important part in
delivering service quality to the customer. With the Internet, the face-to-face interaction is
nonexistent so companies offer a telephone number for customers to call. Some sites offer a
calluback service where the customer gives them their telephone number and they will call back
within a certain time limit to help with the query. Unfortunately, this is only offered during office
hours. Other sites offer an e-mail address to send the query and will e-mail back either a standard
response or a personal one. Such contact details should be on every page of the Web site and not
just on the home page and during the transaction process (see Holt, 2000). Ideally these should be
placed at the top of the page in clear view, although some Web sites tend to hide their contact details
at the bottom of scrolling pages. Vassilopoulos and Keeling (2000) and Creative Good (2000) also
place importance on encouraging the customer to give feedback to the company by providing a
special option or form to complete regarding the services provided, similar to a survey.

Complaint management. According to Kolesar and Galbraith (2000) responsiveness refers to the
customer’s perceptions of both the willingness and ability of the service provider to respond to the
customer’s own needs and desires. It means that the service provider’s actions happen fast enough
for the customer not to feel neglected, but not in a panicky way. It is more that the pace of a service;
it is also the perception of that pace.

E-mail based service elements can be effective in achieving the desired consumer perception of
complaint management. Virtual immediacy can be achieved through automated e-mail responses
that inform the customer that a personalized response will be forthcoming within a given period
(Kolesar & Galbraith, 2000). Moreover, Zemke and Connellan (2001) say that 24-hour turnaround
on e-mail queries is the Internet industry standard, but that the company should respond to it faster
than that.

Efficiency

Menu options. This feature allows the company to highlight products or services that may be
relevant in a particular context (Feinberg & Kadam 2002). The context could be a particular festival
or a season, among others. Moreover, this feature is helpful for those site visitors who are looking
for a specific piece of information.

30
Demo and currency conversion rate. The (customized) product can be viewed before purchasing.
The product can be viewed in a motion picture or a demo. Vassilopoulos and Keeling (2000) suggest
that a currency conversion rate mechanism should be provided on those Web sites, which enable
transactions to be made; this is a valid point considering the global reach of Web sites.

Accessibility

Connectivity. Perhaps the most critical factor for any Web site is accessibility. This refers to the
ability for customers to access the Web site of a particular e-business and navigate its site.
Vassilopoulos and Keeling
(2000) rate accessibility as the speed with which the home page and following pages download.
Holt (2000) also stresses the importance of a fast-downloading home page. Gann (2000) also
emphasizes the fact that Web sites must be accessible 24 hours a day, seven days a week, 365 days
of the year.

Language options. Customers prefer businesses that provide a variety of supplemental services to
augment the core service (Gerson, 1998). McDougall and Levesque (1994) indicated that a
comprehensive service offering is attractive to customers. Consequently, multifunctional of an
ITbased system may be an important feature in satisfying customer needs. So, multiple languages
options are vital factor for the satisfaction of customers in Internet banking.

Customization

Personalized service. Ghosh (1998) and Mols (2000) stated that the Internet banks could offer
personalized services to their customers in order to build customer loyalty, since they can
automatically track, through the

31
Internet, individual customers’ financial service usage and gather the information in their integrated
database. For many Web sites, the key to success is the number of customers that use the site and
keep returning to make purchases Cox & Dale (2002). By asking customers to fill in a user ID and
password, e-businesses can tailor the Web sites to a particular customer. In the case of transactions,
this means that all the customer information such as the billing and shipping addresses do not have
to be filled in again, or it could be the retention of size details for buying clothes. Creative Good
(2000) suggest that it is much simpler for customers if they are asked to use their e-mail address as
an ID rather than creating a new one, although many companies will ask for both.

They also suggest that having a ``my account’’ option showing previous transactions also helps to
build a sense of community for the customer returning to the site. Taking this one step further, Web
sites can suggest new products on the basis of historical transactions when the customer logs back
onto the site. Some sites have a mechanism by which they will suggest books and music based on
the customer’s historical preference. In some cases, the customer can customize the Web site by
choosing options so that on their next visit, they enter directly into the page’s most relevant to them
(Creative Good, 2000).

Web sites must form relationships with their customers Cox & Dale (2002). By asking customers to
fill in a user ID and password, e-businesses can tailor the Web sites to a particular customer. A
commonly used strategy for keeping customers using a service or repeatedly buying products is to
provide some kind of incentive to attract them back. Wiegand and Koth (1999) argue this is even
more true for the Internet where the competition is only one click away and e-Businesses are
fighting to gain market share. Such incentives can be discounts, free delivery or benefits of
promotions; these types of incentives are a powerful marketing tool and lock customers into using
a particular Web site.

32
RESEARCH METHODOLOGY

INTRODUCITON

This chapter will cover the research methods used in this study. We will describe the chosen
methods, concerning research purpose, research approach, research strategy, data collection method
and analysis approach. Additionally, methodology problems that have come up during the process
will be presented. Motivations and justifications for all adopted strategies have been given in each
section. These steps are showed in figure 4.1.

RESEARCH PRUPOSE

A research strategy can be formulated in certain ways depending on what the author wants to
achieve. The reader shall, by analysing the research purpose, understand what direction the study
will take. In other words, which way the study goes, depends on how the research purpose is
structured (Eriksson & Niederrhein-Paul, 1999). There are according to Bengtsson (1995) three
different ways to approach an investigation. These three are exploratory, descriptive and explanatory
investigation purposes (ibid).

Exploratory studies aim for basic knowledge within the research purpose. The purpose with this
type of study is, according to Bengtsson and Bengtsson (1995), to decide and demonstrate the
character of a problem by collecting information through exploration. Furthermore, exploratory
studies are conducted in order to create a basic understanding of conditions, events, courses of

33
events and actions. An explorative investigation is appropriate when a research problem is
unstructured and difficult to delimit. (Eriksson & Niederrhein-Paul, 1997)

As presented by Miles and Huberman (1994, p. 90) with reference to Bernard (1988) to describe is
to make

“complicated things understandable by reducing them to their component parts”. According to

Reynolds (1971) the goal with the descriptive study is to develop careful descriptions of different
patterns that were expected during the exploratory stage. The purpose could be to develop empirical
generalizations and to explain these. This leads to a development of theory.

Explanatory research is useful when studies involve relations between causes and symptoms
(Eriksson and Niederrhein-Paul, 1997). The researcher investigates however; a certain stimuli or
factor affects one another. It is this identification of factors, which together cause a certain
phenomenon (ibid). According to Yin (1994) an explanatory research approach could also be used
when the study aims to explain certain phenomena from different perspectives or situations with
given set of events.

The research purpose and research questions of this thesis indicate that this study is initially
descriptive, when aiming to find out and describe specific factors and problems as data is collected
and analysed. Then the study becomes somewhat exploratory so that it provides us, the researchers,
with both a course for the task at issue as well as an insight into existing theories within the subject.
Finally, the study becomes slightly explanatory, as the research questions of this study will be
answered in the final chapter.

RESEARCH APPROACH
When conducting research there are different ways to address the matter. There are two main
research approaches to choose from when conducting research in social science: qualitative or
quantitative method (Yin, 1993; Holme & Solvang, 1991). There is one significant difference
between these two approaches. In the quantitative approach, results are based on numbers and
statistics that are presented in figures. Whereas in the qualitative approach where focus lies on
describing an event with the use of words. Which approach to choose depends on the problem
definition together with what kind of information that is needed? The two approaches can in cases
where it is suitable also be combined. (Holme & Solvang, 1991)

34
The purpose for both the qualitative and quantitative approach is to create a better understanding of
the society and to comprehend how individuals, groups and institutions act and have an influence
on each other (Holme and Solvang, 1997). To reach each purpose different paths are however taken.
The quantitative approach uses generalizations, based on the processed results of the investigation.

For the qualitative approach the research problem is described out of the situation as a whole,
without basing it on generalizations. According to Yin (1994) both methods have strengths and
weaknesses. The approach best suited depends therefore on the specific study's research problem
and accompanying research questions.

Quantitative research approach transforms the information to numbers and amounts that later gets
analysed statistically. Quantitative studies tend to be more structured and formalized. (Holme and
Solvang, 1997) The quantitative approach is also characterized by being study few variables on a
large number of entities. To find answers to its research problem this is normally done in a broad
sense by using surveys with already set answering alternatives. Furthermore, this approach is
considered especially useful when conducting a wide investigation that contains many units.
(Holme and Solvang, 1991)

Qualitative research approach aims at reaching a better understanding of the phenomenon being
studied, they also tend to be relative flexible (ibid). Using this approach the researcher tries to
separate the specific or odd and strives to create a complete understanding of the situation (ibid).
Characteristics of qualitative studies are that they are based largely on the researcher's own
description, emotions and reactions (Yin, 1994). The qualitative approach also includes a great
closeness to the respondents or to the source that the data is being collected from (Holme & Solvang,
1991). The qualitative approach is characterized by gather abundant information and to investigate
several variables from a few numbers of entities. To take use of the possibility to gather high quality
data the most common way to do this is with the use of case studies and interviews where no set
answering alternatives are being offered. (Holme and Solvang, 1991)

The qualitative approach was found to be most suitable for the purpose of this thesis, as the purpose
is to gain a deeper understanding of the role of website in the Internet banking. Hence, the aim is
not to make any generalizations, but instead establish a closer contact with the studied objects,
which intend to provide us, the researchers with a deeper understanding of the participants’ attitudes,
and perceptions. Finally, as the intention with this thesis is to describe and explore, and find as
complete and detailed information as possible, the qualitative approach is the most suitable method.
35
Now we have described that the research is focused on a qualitative research approach, and then the
research strategy will be presented in the next section.

RESEARCH STRATEGY
There are a number of approaches for a researcher to make when conducting an empirical data
collection. Depending on the character of research questions, to which extent the researcher has
control over behavioural events and to what degree the focus ISON contemporary events, the
researcher can choose between an experiment, a survey, history, an analysis of archival records and
a case study. (Yin, 1994) These are shown in Table 1.

A case study is mainly used at studying one or a small amount of units. Hence, the investigator
studies many variables on few units. (Lundahl & Skärvad, 1992) A case study is preferable when
using qualitative data because that kind of data needs to be explained and discussed in a more
understandable way according to Eriksson and Wiedersheim-Paul (1997). The situations that give
case studies a distinct advantage occur, according to Yin (1994), when a “how” or “why” question
is being asked about a contemporary set of events over which the investigator has little or no control.
Yin (1994) continue by explaining that case studies are characterized by investigations of
contemporary phenomenon within its real-life context, and that case studies should be used
especially when boundaries between the phenomenon and the context are not clearly evident.

36
Miles and Huberman (1994) continue by explaining how the multiple-cases make it possible to
specify how, where, and sometimes also, why a certain phenomena has a specific behavior. They
conclude that multiplecase sampling also adds to the validity, precision and the stability of the
findings. In order to address the research questions of this study, two case studies will be conducted.

By conducting case studies the results can be compared and the study seen as more compelling. This
enables us to compare the results from each case in a cross-case analysis. Using a multiplecase study
it can also make our findings more robust and possible make it easier to detect possible similarities
and/or differences. How the case study is preceded is presented in the next section.

37
DATA ANALYSIS

INTRODUCITON
In the preceding chapter, authors presented the data collected from two banks, namely Nordea Bank
Group and Bank of China. As mentioned in the methodology chapter, the data are qualitative and
were collected by means of direct observation and focused personal interviews. In this chapter, the
collected data will be analyzed on the basis of the frame of reference of this study. Moreover, the
collected data will be analyzed by a withincase analysis and a cross-case analysis

WEBSITE DESIGN IN INTERNET BANKING

Within-Case Analysis of Nordea.Se

There is a significant correlation between Web site download speed and Web user satisfaction
revealed by the studies of Muylle (1998) and Hoffman & Novak (1996) referenced by Jayawardhena
& Foley (2000). In order to make every customer get suitable service, Nordea.Se avoided using any
moving elements such as objects that are twinkling, moving or shifting in shape in order not to
detract customers’ attention when dealing their banking transactions. Nordea also mentioned the
system requirements and computer screen settings for having better browsing to its visitors. To
avoid slowing down the loading speed, Nordea.Se never used animation and/or multimedia to
increase its appealing because that is not necessary.

For its content and design, Nordea.Se didn’t put a lot on their business description on homepage but
provided important information regarding personal customers, corporate customers, information
about Nordea jobs, and logging in solo by brief words. Its homepage, though, did not contain much
information about the bank and not much about its products, but it provided links to all of the
important information of banking products and service, including funds transfers, payments, e-
invoice, e-payment, mutual funds, personal service, account statement and loans etc.
Although there’s no other format to download of these kinds of information, we think it’s more than
enough for customers to find what they need to know. Regarding the layout features of
Nordea’s website, the background is white with a light grey and dark blue pattern. Most text on the
site is black but some important headings and links are dark blue color. In pictures and icons a great
deal of colors are used. Furthermore, dark blue is used around the menu. Above all of these made
the website look neat and simple. As Jayawardhena and Foley (2000) stated that pages on a website

38
should ideally be short. In the case of Nordea.Se, information of banking products and service
mostly organized in corresponding web page and visitors mostly do not need to scroll pages to see
all information; moreover, for further information they can click the link of next page or sub page,
all of which according to interviewees it made visitors feel convenient.
Layout of the web site seems good due to color matching and font size. Colors of the

background make the site somewhat organized. The size of the text in the menu and icons are quite
good. Furthermore, there are little empty spaces on the web pages but does not look awkward.

There are also some pictures of these products. At last, there’s no more alternative language edition
provided by Nordea.Se, which maybe cause some troubles to these foreign clients that know little
about Swedish.

As far as its interactivity is concerned, Nordea.Se had the bank e-mail and manual addresses
available under a Swedish heading “kontakt” on almost all pages. It also provided bespoke solution
service and in shape demo facility made beginners learn how to proceed with it. Facility of exchange
rate converter was also available on its website, therefore according to Muylle et al, (1999)
customers could judge for themselves their commitments for foreign currency exchange, which
might otherwise require the assistance of bank staff; and on the other hand it work to the benefit of
the banks somewhat.

Regarding its navigation efficiency, Nordea.Se had a structured navigational system in order to
make its visitor easily to reach a specific page from any other page by the help of menu or link. To
make browsing continuous, it carefully labeled links on their website and make sure each of them
can target relevant subpage. Customers can easily follow the instruction on the website to go through
web content and finish their banking transaction. According to Constantine and Lockwood (1999),
the navigation of a website cannot be carried out without valid links. When visitors open its home
page of the bank, they see horizontal links on the top, which lead visitors to move on every important
subpage; at same time, it’s possible to get to the homepage from any page in the site by clicking
homepage hyperlink. In addition, No dead end pages existed on the site. With the same color, same
background, same logo, same layout, etc, authors think nordea.se managed consistent navigation
very well and kept all pages the same style, which meet the conclusion of Spool et al. (1999) that
the pages within website need to be consistent in appearance and design. However, there’s no search
engine or site map, which seems support the argument of Creative Good (2000) that a website with

39
a clear menu and relevant information should be satisfactory and that users are not actually
interested in where they are within a site as long as the links are clear.

In order to strengthen its security of banking operation, Nordea.Se upgraded its encryption
technology, which is regarded the most common feature at all bank sites by Jayawardhena and Foley
(2000), for its private customer, who had to have Swedish personal number (including 10 numbers),
private code (including 4 numbers) and one-time-used code from as a unique code (including 4
numbers) altogether to log in and one more one-time-used code to finish one banking operation. It
also provided operation confirmation and had detailed records of all banking transactions listed on
private page. After his logging in if visitor has inactivity on the webpage for a short time, Nordea.se
will automatically logs users off his account in order to make sure privacy secure.

Within-Case Analysis of BOC.Com

According to Jayawardhena and Foley (2000), speed is often a factor beyond the control of a site
owner and it is important to recognize that speed is also dependent on the user's computing hardware
and method of connection. Regarding its speed to download, BOC.Com used some small pieces of
colorful graphics on its homepage; on the contrary, there’s only simple and meaningful graphics
except one piece of twinkling banner on the top of its sub pages. Moreover, BOC.Com used a little
bit animation and/or multimedia such as flashing popup and floating ad to do promotion of some
kind of new or hot banking product/service on its homepage. However, the using of graphics,
animation and/or multimedia in BOC.Com seems not influence the speed of opening its webpage,
probably due to the reason of user’s better computing hardware, method of connection, or increased
internet system speed which have been observed by many commentators

For its content and design, BOC.Com’s home page provided all links of all important information
of its banking products and services, including visa card, private banking, corporate banking,
investment banking, E-banking, foreign exchange, settlement service etc. Besides that, there were
also some pieces of latest bank news located in the central middle part of its homepage, which made
it look more like one method of bank internal medium and according to interviewees they were
totally had no interest to read these banks news when they did banking transaction. Except BOC’s
annual reports, no format of banking product or service information is provided on web pages. The

40
main color used in BOC.Com is dark red, which in China means good luck and fortune therefore it
is being used commonly in most Chinese banks’ website; Grey and white are colors of web
background in order to make the text in black easy to read and recognize. By using numbers of
twinkling banners and popup, the website may give visitors a colorful impressing as a whole at first;
actually its subpages were as simple and neat as Nordea.se. Besides the version of Chinese
Simplified, BOC.Com also provided English version to its foreign clients. With the similar
consistent navigation as Chinese version, it mainly worked as bank information provider, there was
no Internet banking service available in English web.

About the interactivity, there are five kinds of facilities provided by BOC.Com both in Chinese and
English version: deposit calculator, house-loan calculator, mortgage calculator, overdraft calculator
and exchange rate converter. Supported by Muylle et al. (1999), the provision of these facilities
should work to the benefit of the banks in several ways

Creative Good (2000) pointed out that there should be a ``home’’ button on every page to help the
user get back to the home page if necessary without having to click on the back button. BOC.Com
did recognize to settle homepage hyperlink on all of its web pages, which is the logo of bank
positioned on the left top of every web, which according to Gatian (1994) and Doll et al. (1995)
might make positive influence on user satisfaction. When visitors open its home page, they will see
a horizontal links on the top just under the brand name. These links are the headlines of the
main content of BOC.Com, covering all of its products and services both online and offline.
Jayawardhena and Foley (2000) mention that links are the main way for the users to navigate their
way around a site and should be clear and to the point; we can see it’s proved someway by
BOC.COm that the links has been well labeled and lead customer to the wanted page although the
amount of links looks so many and some links of non-banking content exist on the homepage. Due
to keep the consistent navigation within site, BOC.Com also kept the same color, same background,
same logo, and same layout etc so that kept all pages the same style. In the two
language versions of BOC.Com, sitemap can be found among the top horizontal links of every
page. Spool et al. (1999) found that users navigating sites with a site map were twice as successful
in finding what they wanted, compared to those sites without, and that informing the customer of
where they were was important. In the two language versions of BOC.Com, sitemap can be found
among the top horizontal links of every page, which also make it easy for customers to find where
they are. Although with some technical problem, the search engine didn’t work perfectly all the

41
time; but at least when it worked well, the results mostly was listed on one page only and limited in
number, same as Creative Good (2000) suggested.

In order to strengthen its security of banking operation, BOC.Com also used encryption technology,
operation confirmation and automatic log-off in order to make it more secure for its customers to
deal with Internet banking. Although some sites require information to be input in a random order,
the order changing with each log in, BOC.Com only permanently requires account number and
private code for logging so far.

Cross-Case Analysis
Table 2: Factors of speed in the cases

Speed Nordea.Se BOC.Com

Simple and meaningful Colorful and meaningful

Simple graphics

Animation and/or Used only for banner and

multimedia popup
Not used

From the 6.1 we can see that Nordea.Se concerns speed of page download very much therefore it
uses simple graphics without any animation and/or multimedia. Although from this point BOC.Com
acts a contrary performance compared to Nordea.se with colorful graphics and using animation for
banner and popup, we think all of these are technically limited and therefore make no obvious
influence on the speed of downloading pages and cause no issue that makes visitors impatient. We
think that to use animation and multimedia technology or not depend on if the bank wants to have
its website with a better appearance and increase website appealing and if the animation and/or
multimedia give evident effect in loading speed. And since speed is often a factor beyond the control
of a site owner, there’s not absolute forbiddance of using animation and/or multimedia only for
better speed.

42
Table 3: Factors of Content and Design in the cases

Content and Design Nordea.Se BOC.Com

Product Detailed information of all Detailed information of all

information banking products andbanking products and services
content services

Amount of
product
information High High

Product Annual reports, quarterly

information reports and statistics
format Only annual reports

Chinese simplified and

English
Language alternatives Swedish

Layout features Well organized, neat and Well organized and sim with
simple with short pages featured colors

From the table 6.2 it’s easy to recognize that both of two banks devote a lot on presenting their
product and service in order to make customers have a better understanding on banking business.
The factors related with product and service information are similar on two websites: plenty,
detailed and no format to download except BOC’s annual reports. As far as layout features are
concerned, neat and simple web pages make it easy and convenient for customers to handle banking
transaction in Nordea.Se; on the other hand, twinkling and colorful designs of homepage make

43
BOC.Com more like a promoting channel, primary target of which seems to attract visitor’s eyeball
and then give visitors as much information as possible. Beside Chinese version, BOC.Com also
prepares an English version for its foreign clients, which makes it more internationally accepted,
compared with the fact that Nordea.Se provides no other language alternatives except Swedish.
Table 4: Factors of Interactivity in the cases
BOC.Com

Interactivity Nordea.Se

Technical banking Investment calculator, car

facilities house-loan calculator,
Exchange rate converter loan
calculator, mortgage
calculator and exchange rate
converter

From the table 6.3, we may say that the different attitude of two banks to bespoke solution probably
is due to the reason of banking style and history. But they all concerned the importance of technical
banking facilities that influence customer satisfaction. We may say more facilities would bring more
customer satisfaction than no or less facilities.

44
Table 5: Factors of navigation in the cases

Navigation Nordea.Se BOC.Com

Homepage hyperlink Provided as text (‘home’) Provided as logo

Links Accurate Accurate

Consistent navigation Consistent Consistent

Search engine Not provided Provided but not stable

Site maps/guides Not using Using

According to Jayawardhena and Foley (2000), the hallmark of a good banking site is that the site
index should always be in display, thereby making it very easy and fast for someone to arrive at the
desired location. From the table of 6.4 we can see that both Nordea.se and BOC.Com did good same
job on homepage hyperlink setting, links organizing and consistent navigation, which make visitors
easily and smoothly traveled between sub pages and homepage. Although BOC.Com is providing
search engine and sitemap on all of its webpage, there still seem some technical issues existing that
should have been solved. There are no search engine and sitemap in Nordea.Se; probably Nordea.Se
has confidence on its well-organized content and links, but we thinks the ignoring of important and
common facilities would make its customer upset in the future.

45
Table 6: Factors of security in the cases

Security Nordea.Se BOC.Com

Encryption Used Used

Purchase /operation
confirmation
Provided Provided

Automatically log off Used Used

From the table of 6.5, we see that these two banks emphasize all factors relevant to security. For all
of its private customers, Nordea.Se uses a very good encryption operation system to insure the
security of logging and operating. BOC.Com needs to improve its sample-looking logging
procedure somewhat although its encryption so far is still safe enough. Purchase /operation
confirmation and automatically log off are the other two important secure factors which are adopted
without doubts.

46
CUSTOMER SERVICE IN INTERNET BANKING

Within-Case Analysis of Nordea.Se

The interviewee felt insecure especially when purchasing from abroad – not so much in Sweden.
This is an accordance of opinion of Andreason & Lindestad (1997) and Zemke & Connellan (2001)
that customers traditionally build trust based on the image and reputation.

The participants perceived a certain risk performing payment when dealing with unknown sellers
over the Internet. This is supported the findings of Birch &Young (1997), Mathe & Dagi (1996) and
Yang & Jun (2002) that online buyers are more concerned about online payments.

The respondents claimed that they had full belief on the bank. The Bank has given guarantee their
information would not provide to any other person or company. Other companies were selling email
addresses not our bank. Hence, interviewees had built trust based on the image and reputation. This
is somewhat applicable with what was stated by Zemke and Connellan (2001) and Andreason &
Lindestad (1997).

The interviewees stated that bank furnished all-important email addresses and telephone number on
the website. They preferred to contact through email to the bank instead of telephone because it was
more economical way. These comments support the views of Feinberg & Kadam (2002), Ulfelder
(2000) and Cai & Jan (2003) that the customers prefer to use email as it is lower cost way of
communication.

Nordea updates the site regularly and the content was always fresh, so this complies with the theory
of issues that should be considered in order to develop a successful Web site, by Ellsworth and
Ellsworth (1997).

According to Wisner & Corney (2001) and Cox & Dale (2002) stated that frequently asked questions
to be described on home page. This reply of participants were not supported this statement. Nordea
did not give any link to FAQs on home page but made like FAQs on solo home page, which covers
only technical questions such as browser, terminal, security etc not general questions about
customer services. These results are also not consistent with the recommendation of Constantine &
Lockwood (1999). Constantine & Lockwood (1999) stated that a well designed FAQs pages should

47
be arranged in three sections, but nordea made only one section out of three sections advised, that
is list of questions, so, the customers were not satisfied.

When they preformed transactions for paying bills if they did mistake filling the information,
website informed them to go back and to fill these information again. This is in accordance of Cox
& Dale (2002) stated about web sites informs users of a mistake by writing the information to redo
something in order to proceed.

Information provided on the website of Nordea was understandable and clear. Customers did not
feel any problem in the matter. This does not support the findings of Broderick & Vachirapornpuk
(2002) that customers often need help of banking staff in Internet banking for understanding the
information.

The remarks of interviewees, they did not feel any problem performing Internet banking first time.
It does not comply with the findings of Broderick & Vachirapornpuk (2002) and Sathye (1999) that
Internet banking is difficult for customers.

The comments of the respondents, Internet banking is more convenient as compared to traditional
banking. Convenience is a primary benefit sought by customers, which supported the comments of
Reed (1998) & Milligan (1997) and Ravi Kalakota (1997).

They observed 100% accuracy in transactions and handled transactions independently according to
their will. Accuracy in banking transactions is happened due to IT. The satisfaction about accuracy
in transactions, which was motivated the participants for using Internet banking. These views are
according to finding of Licata (1998) that IT reduces error and enhance service quality

They respondents can check statements of all transaction that had been done. This is supported the
recommendation of Joseph, McClure, Joseph (1999) that bank should provide statements of
transactions have been conducted in electronically.

The statement of Vassilopoulou & Keeling (2000) and Good (2000) was reviewed in regard to the
organizations obtain feedback of the customers through special option or form which creates on
their websites. The respondent informed that website of the bank did not ask such information.
Vassilopoulou & Keeling (2000) and Good (2000) views are not in accordance with what any of the
respondents stated.

48
The participant viewed that he visited his bank in down town only two times within last three years.
Due to that he had saved his time, money and avoid waiting in queue for his turn in the bank. This
is supported Houston (1997) and Ravi Kalakota (1997) statement that customers avoid to wait in a
queue.

The interviewees liked demo and felt that demo helped a lot to conduct transaction in Internet
banking. This is consistent with view of Vassilopoulou and Keeling (2000) that demo helps
customers in online shopping.

The respondent told that he did not purchase some items through Internet but he received bill for
payment. He pointed out to the bank; the bank sent him new bill after correction, so he was satisfied
with complaint management of the bank and there was no risk in Internet banking. This is
accordance the opinion of Kolesar & Galbraith, 2000 and Zemke and Connellan (2001) that such
services would be enhanced the level of satisfaction over Internet banking.

Difference of opinion about the Internet banking is friendly environment, one said friendly
environment and second was against it. This is similar finding of Jayawardhena & Foley (2000)
studies that most of people associate a bank transaction with human interaction. For many people
the prospect of typing on a keyboard to carry out a bank transaction seems very detached method
of banking.

Nordea provided currency conversion rate mechanism on their website which liked the respondent.
This is accordance with the views of Muylle et al, (1999), Jayawardhena & Foley (2000) and
Vassilopoulou & Keeling (2000) about currency conversion rate mechanism.

Nordea web pages were downloaded within few seconds. Respondents were very happy with
downloading speed. This is supported the comments of Vassilopoulou & Keeling (2000) that
downloading of web pages are very important for customers satisfaction.

Gann (2000) emphasizes the fact that Web sites must be accessible 24 hours a day, seven days a
week, 365 days of the year. The respondent quoted that he did his payment from UK and USA,
supported the statement of Gann (2000).

The interviewee said that he liked if he had made payment in one account, so next time he had no
need to register this account again before payment. These comments support the finding of Cox &

49
 Dale (2002) and Creative Good (2000) that the customers enter directly into the pages most
relevant to them.

Within-Case Analysis of BOC.Com

According to Grönross (1984), Andreason & Lindestad (1997), Zemke and Connellan (2001) that
customers traditionally build trust based on the image and reputation. The views of participants
supported views of researchers that trust builds based on the image and reputation. The participants
felt insecure over Internet banking because they heard and read news that Internet was not secured
medium for transactions. While, they had never happened any misshape with them or close friend
so far.

The respondents perceived a certain risk performing payment between the accounts. This is
supported the findings of Birch &Young (1997), Mathe & Dagi (1996) and Yang & Jun (2002) that
online buyers are more concerned about online payments.

The interviewees claimed that they had full belief on the bank. The Bank cannot leak their privacy
due to banking regulations. This is somewhat applicable which was stated by Zemke and Connellan
(2001), Grönross (1984) and Andreason & Lindestad (1997) about privacy that customers have
confidence about some organization.

Web site of Bank of China was not regularly updated, so this complies with the theory of issues that
should be considered in order to develop a successful Web site, by Ellsworth and Ellsworth (1997).

The interviewees pointed out that there was no direct link of FAQs put on the homepage. This is not
accordance with the findings of Wisner & Corney (2001), Cox & Dale (2002) and Constantine &
Lockwood (1999) that organization provide link to FAQs on their homepage.

The interviewees felt problems performing Internet banking first time. It is comply with the findings
of Broderick & Vachirapornpuk (2002) and Sathye (1999) that Internet banking is difficult for
customers.

50
According to findings of Furey (1991) & Licata (1998), that IT reduces error and enhance service
quality. The findings supported the respondents’ reply that Internet banking provided 100%
accuracy in transactions and handled transactions independently according to their will.

The interviewees liked demo and felt that demo helped a lot to conduct transaction in Internet
banking. This is consistent with view of Vassilopoulou and Keeling (2000) that demo helps
customers in online shopping.

The participant informed about negative attitude of BOC.com. He sent an email to ask for some
certain information about his credit card, but he did not receive reply. After two weeks, he sent
reminder but he did get any reply again. So, he became too much angry about the services of the
bank. According to Feinberg & Kadam (2002), Ulfelder (2000) and Cai & Jan (2003) that the
customers prefer to use email. The views of participant does not support to it.

The respondents claimed that Internet banking is more convenient as compared to traditional
banking. Convenience is a primary benefit sought by customers, which supported the comments of
Reed (1998) & Milligan (1997) and Ravi Kalakota (1997).

BOC.com provided facility to their customers to check statements of all transaction that had been
done. This is supported the recommendation of Joseph, McClure, Joseph (1999) that bank should
provide statements of transactions have been conducted in electronically. Further, Dabholkar (1994)
stipulates that there should be flexibility in the design of the technology to allow customers to make
changes during the transaction.

The respondents informed that information shown on the website was understandable and clear.
Even about offline information was also very clear. So, this does not support the findings of
Broderick & Vachirapornpuk (2002) that customers often need help of banking staff in Internet
banking for understanding the information.

The participants viewed that their time was saved and avoid waiting in queue for his turn in the
bank. This is supported Houston (1997) and Ravi Kalakota (1997) statement that customers avoid
to wait in a queue.

The respondents felt that Internet banking is friendly environment. This is not similar finding of
Jayawardhena & Foley (2000) that many people feel typing on a keyboard to carry out a bank
transaction seem very detached method of banking.

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BOC.com provided currency conversion rate mechanism on their website which liked the
respondent. This is complying the views of Muylle et al, (1999) Vassilopoulou and Keeling (2000)
about currency conversion rate mechanism.

The interviewees could open BOC.Com’s homepage and log in their personal account from any
Internetconnected computer, therefore which made it convenient to deal with banking at any needed
time. This is supported the statement of Gann (2000).

Cross-Case Analysis
An important issue in cross-cultural research is that sample can be comparable across cultural
(Knight & Calantone 2000). So, we choose highly educated young persons from both countries for
this study.

Table 7: Characteristics of trustworthiness in cases

Trustworthiness Swedish customers Chinese customers

Security Feels secure Feels insecure

Trust/risk No risk performing transaction Transferring error/lack of

within banks confidence

Privacy Not worried Not worried

Perhaps the most important issue in Internet banking is trustworthiness for customers, how much it
is safe to use a web site and to conduct financial transaction over the Internet. From finding of the
study, we can say that Swedish customers feel more secure performing transaction in Internet
banking as compared to Chinese customers. May be one reason is that Internet banking was started
in Sweden in 1996 and in China started very recently year. Second, Sweden is number one in
adoption modern information technology since last two years (IDC Research). Further, Grönross
(1984), Andreason & Lindestad (1997), Zemke and Connellan (2001) stated that customers
traditionally build trust based on the image and reputation. Resultantly, Swedish customers felt
secured doing business over Internet in Sweden but when did transaction with aboard that time little
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insecure. Whereas, Chinese customers still felt insecure performing transactions within banks in
China due to reason they read/heard news about errors happened in between banks over Internet
banking transactions.
Subsequently, they built image that Internet is not secure so far.

About privacy, both Swedish and Chinese customers have a similar opinion. They have truth their
banks due to banking regulations and assurance given from their banks. They thought that others
companies are selling information their customers. Their perception seems to be right in our opinion
also.

Table 8: Characteristics of communication in cases

Communication Swedish customers Chinese customers

Communication tools Used Used

Frequently asked questions Uneasy to find out Uneasy to find out

Information updated Frequently Infrequently

Information understandable Clear and Clear and

understandable understandable

Web site has taken place of banking staff, client directly communicates with the web site in the
cyber space in place of receptionist/officer of the bank. Importance of communication tools like
email, telephone number, swift number, and addresses are realized everywhere. So, there is no
difference between those countries.
Surprisingly, Swedish and Chinese bank are not providing link for ‘frequently asked questions” at
their home pages. According to number of researchers recommended such as Wisner & Corney
(2001), Cox & Dale (2002) that each organization must make FAQs link on the home page and
participants also demanded for it. It is ununderstandable that why banks are not giving links to FAQs
on their home pages.

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Information furnishing on the Internet is updating regularly by Swedish bank as compare to Chinese
bank. It is very important for enhancing customer confidence on Internet banking that information
is updated regularly on the web. Hence Swedish banks` data shows that Swedish customers of
Internet banking are increasing very rapidly. Apart of this, information about products, services are
clear and understandable for both Swedish and Chinese customers from their banks sites. Table
9: Characteristics of convenience/accuracy in cases
Convenience/ Accuracy

Swedish customers Chinese customers

Convenient hours of operation Yes Yes

Accuracy in transactions 100% accuracy 100% accuracy

Easy to use (first time Internet Easy Not easy

banking)

The rapid growth of Internet banking depends on different factors, one of the important factor, which
is attracting to the customer, is convenience. Convenience is acting vital role on the behavior of
both customers in irrespective of their countries. Customers prefer to save their time, money and
avoid waiting in queue for their turn in the bank. All factors are showing same results in the above
table except different opinions about using first time Internet banking. Chinese customers` opinion
is that they felt problem performing first time Internet banking. Further, demo cannot help too much;
they thought that face-to-face interaction was more important for understanding of banking
transaction over Internet. So, they preferred to learn from some bank employees or some friend.
Whereas, Swedish customers did not feel problem, performing Internet banking on first time. Table
10: Characteristics of feedback/complaint in cases

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 Feedback/ Complaint Swedish customers Chinese customers
management

Feedback service Satisfied Not satisfied

Complaint management Satisfied Not satisfied

Friendly environment Yes Yes

Quick responses to customers’ inquiries, especially e-mail are played pivotal role in Internet banking
for customer loyalty with the bank Kolesar & Galbraith, (2000) and Zemke & Connellan (2001).
Our findings of the study are showing very surprised results that Chinese customers were unsatisfied
with feedback service and complaint management of the Bank. On other hand, Swedish customers
were completely satisfied with the services of the bank. In the competitive market, customer is a
king. No organization can run business without support of their customers. According to
Vassilopoulou and Keeling (2000) and Creative Good (2000) recommended that companies must
make special option or form on their web site regarding the services provided, for customers’
feedback. Neither Swedish nor Chinese bank is providing such services to the customers for
feedback.

In opinion of Chinese and Swedish customers, Internet banking is friendly environment. That is a
healthy sign for Internet banking in Sweden and China.

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Table 11: Characteristics of efficiency in cases

Efficiency Swedish customers Chinese customers

Menu options Limited links Limited links

Demo Provided Provided

Provided Provided
Exchange rate calculator

Calculators (loan, Not provided Provided

mortgage)

The menu options or links allow the company to highlight products or services that may be relevant
in a particular context (Feinberg & Kadam 2002). Interestingly the Chinese and Swedish customers
have no too much option in home pages of their banks to easily search information. On other hand,
the Banks are losing good opportunity to make good relationship with their customers. None of the
bank is following the characteristics of web page of bank described by Wisner and Corney (2001).

For helping their customers in conducting transactions over Internet, Nordea.se was providing demo
and exchange rate converter to their customers. Whereas, BOC.com provided demo, exchange rate
converter and calculator (loans, mortgage).

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Table 12: Characteristics of accessibility in cases

Accessibility Swedish customers Chinese customers

Connectivity Good Good

Special services for disabled No No

person

Multiple language options No (Swedish) Yes (Chinese, English)

One of finding of our study is that Swedish bank is offering single language option i.e. Swedish to
the customers. Whereas, Chinese bank is providing multiple language option i.e. Chinese and
English.

Both participants had similar view in regard to connectivity. They were not feeling any problem in
the matter just they need computer and Internet connection for performing Internet banking. For
disabled persons, no bank was furnishing special services for them.

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Table 13: Characteristics of customization in cases

Customization Swedish customers Chinese customers

Personalized service Yes Yes

Internet banking is using technology to improve its personalized services, with the ultimate goal of
helping customers gain greater control over managing their money transactions. However,
customers irrespective of their country of origin either from Sweden or China demanded
personalized services from their banks. This is typical philosophy of the customer. Banks understand
the requirement of their customers so they are trying to provide personalized services. This is one
main reason that none of interviewees said that they wanted to change bank. No doubt they had
mentioned few complaints about their banks that were general nature, which was ignorable. Further,
findings of the study supported these comments. There is no difference in results of Swedish or
Chinese customers.

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FINDING

The research report is based on primary data. According to the study, the researcher
concludes that the most of the bank customers are aware about all the Online Banking services in
Sivagangai District. The banks further have to take necessary steps to educate the customers
regarding the new technology and other services offered by the banks. Banks may extend customer
meeting time with bank officials and also friendly approach is necessary. Definitely it will help to
retain the existing customers and to attract new customers. It will automatically improve the banking
service and development of banks in India and also in abroad. The research report is useful to know
the consumer awareness of Online Banking system and what types of risk involved in Online
Banking system.

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CONCLUSION

The conclusion of an internet banking system project would typically summarize the key findings,
achievements, and lessons learned during the development process. It would also discuss any
challenges faced and how they were overcome, as well as recommendations for future
improvements or enhancements. Additionally, it may highlight the significance of the project in
meeting the needs of users and contributing to the overall goals of the organization.

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 SUGGGESTIONS

1. The present business environment for banking is highly volatile and

uncertain. It is highly competitive and every bank is finding difficult to service grow,
stabilize and excel in banking business. Further, for better performance management
must keep watch on the emerging trends in business environment. The proper and
timely strategies are to be adopted to improve efficiency of the whole organisation
2. Competition is faced from public, private, foreign and cooperative banks.
They have adopted the strategy for effective workings are use of advance technology
and changes in working procedure. No doubt performance has been improved but
manpower is not maintained and utilized properly. For improvement in human
resources, special focus should be given on selection, training, motivate career
opportunities or employees etc.
3. Manpower is considered as the most important resource but it is day to day
dealing efforts are found for the sufficient efforts are not found for improvement of
competencies and motivation of employees. It is suggest that in this direction strong
steps are to be taken 4. Bank management is interested for performance of employees
on paper. When questions come for implementation and monetary terms the half
hearted efforts are put. There is need to change the mind set of management further
and tune them as per the need of the hour. 5. Performance management functions
are available on papers but actually these functions are not performed or performed
partially. The effectiveness of performance management is below expectation.
Performance management functions should be assigned to a separate cell under HR
Head so that effectiveness of it would improve.
6. The awareness regarding benefits of performance management to banks is
not very high. There is a scope for improvement. The awareness regarding this
should be created further through discussion, circulars and lectures by experts.

7. The employees’ productivity in average is not high in banks. There is a lot of

scope for further improvement and awareness about it should be created through
discussion, meeting and guidance on job among employees working on different
jobs and levels.

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8. Management of banks is interested for productivity improvement. This is half
of the way. A big gap is found between actual position and expectations.

Willingness to should the responsibility for productivity improvement is partly missing.

Top level management involvement and support can boost the efforts in right direction.
9. Performance appraisal planning and methods used are rightly available on
papers. Regularly appraisals are not carried out properly. The improper appraisal is
creating problems for further actions. Head of HR Department should look into this,
take help of experts and implement the performance appraisal strongly. A lot of
irregularities would be overcome.

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REFERENCE

1. Prasad, K.V.N. and Ravinder, G. (2011), “Performance Evaluation of Banks: A

Comparative Study on SBI, PNB, ICICI and HDFC”, Advances in Management, Vol. 4(2)
September, pp. 43-53.

2. Gokilamani, N. and Natarajan, C. (2014). Service Performance in The Retail Banking of

The Commercial Banks in Coimbatore District: An Empirical Assessment, Research
Explorer, 3 (8), 27-
31.

3. Sonal Thakur, “Consumer Perception: A study on E- Marketing”, International Journal of

Recent Research Aspects ISSN: 2349-7688, Vol. 2, Issue 2, June 2015, pp. 256-262.

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