Internet Banking Services Provided By Banks

Published Date: 02 Nov 2017

1.1 INTRODUCTION

Internet banking is gaining popularity in the banking industry and the regulatory community. This is due to the reflection of internet as a tool for commercial activity. This can also take place due to a strong potential that banking along with other financial services, provides an environment for the development of e-commerce. At its core, banking involves the collection, storage, transfer and processing of information assets and the Internet is a powerful and efficient tool for handling these information processes. Banking through internet has emerged as a strategic resource for achieving higher efficiency, control of operations and reduction of cost by replacing paper based and labour intensive methods with automated processes thus leading to higher productivity and profitability.

In India, a wider array of financial products and services has become available over the Internet which has thus become an important distribution channel for a number of banks. Banks boost technology investment spending strongly to address revenue, cost and competitiveness concerns. For some activities, banks hope to see a near-term impact on profitability. Other investments are motivated more by a desire to establish a competitive position or avoid falling behind the competition.

1.1.1 DEFINITION

Electronic banking, also known as e-banking, virtual banking and online banking, is a service that allows customers to access their bank information, conduct financial transactions, make deposits, withdrawals and pay bills through the Internet without having to physically visit their bank. It provides the convenience of accessing banking facilities from the comfort of their home or office.

Internet banking is the facility for the customers to use the Internet, a decentralized electronic network with worldwide access, to obtain account/ custody account information and place payment and securities orders. Safe data transmission channels protect the confidentiality of the information conveyed. Internet banking is one form of Home banking. 

1.1.2 INTERNET BANKING SERVICES PROVIDED BY BANKS

View

Your own accounts and your related ones

Credit and Debit cards

Funds

Time deposit, Saving certificates

Loans

Treasury bonds

Latest transactions of current month

View, print and save your monthly statements

Transfer

Funds between your accounts

To another bank account (Digital signature required)

To your credit card

To another banks credit card (Digital Signature required)

Request

Cheque book

To change your mailing address

To inquire or complain

To add related account  (Power of attorney, parent/child or account with different customer number)

To make External transfer ( Digital signature required )

Digital Signature registration

Also

Stop your credit card

Subscribe in Alerts service (SMS /E mail)

1.2 GENESIS OF THE PROBLEM

Pure online banking, the development of internet websites as a delivery channel, or traditional banking does not have the same implications. Internet may be exploited as a new delivery channel by the financial services industry to completely re-organize the structure of banks. The new challenges of the delivery channel is been explored through this research.

1.3 NEED FOR THE STUDY

Internet banking is receiving great attention in the banking industry and the community. Internet banking has been looked upon from customers’ point of view and the risks involved in the implementation of internet banking. This research aims at studying the bankers’ point of view and the challenges faced by them, with reference to the market developments.

1.4OVERVIEW OF THE STUDY

Internet banking has become the new bloom in the banking industry and the community. The research focuses on bankers’ perspective of internet banking and the impact it has created on the banks. Also the challenges the employees have faced in due respect with the implementation of internet banking in their banks. The research also studies the financial impact on the banks performance and the growth over the years.

1.5 RESUME OF SUCCEEDING CHAPTERS

The present chapter talks about the Background of the study, the need and rationale and purpose of the study. The second chapter talks about the Literature review, how the review has been conducted, studies conducted in similar field of study and the research gap found through the literature review. The third chapter is about the Research methodology, the variables impacting the i-banking, the operational definition of the variables, the sample and the population of the study, the statistical tools used etc. The fourth chapter talks about the data analysis and interpretation, respondent profile, hypothesis testing and analysis of data. The fifth chapter talks about the findings, suggestions and conclusion.

2.1 IMPORTANCE OF REVIEW OF RELATED LITERATURE

The study which I am taking as a part of this project is descriptive in nature and most of the studies concentrate only on the customers’ point of view of internet banking. This research will highlight the bankers’ point of view of internet banking and the various benefits it has provided and supported them in their operations. Literature review describes how the proposed research is related to prior research and determines the originality and relevance of the proposed research.

2.2 HOW THE REVIEW HAS BEEN DONE

The review of literature has been extracted from research papers in similar fields of the topic and includes study of research papers from Proquest and online resources. The research papers were examined and an understanding of the paper was undertaken to highlight the findings of various researchers and scholars.

2.3 STUDIES CONDUCTED ABROAD

2.3.1 Aktan,B. (2009), Teker,E. (2009). Changing Face of Banks and the Evaluation of Internet Banking in Turkey. Journal of Internet Banking and Commerce, vol.14, no. 1.

The study states the in today’s competitive world with growing importance of technology and internet, banks need to adopt internet banking in order to keep in pace with client- banker service relationship and to attract prospective clients. Commercial banks are slowly becoming aware of the need and importance of the adoption of internet in their business operations. Internet banking is an emerging market with its growing potentiality and thus a key competitive field for future financial services among its young population.

2.3.2 Arnaboldil,F. (2008), Claeys,P. (2008). Internet Banking in Europe: a comparative analysis. Research Institute of Applied Economics.

According to the research conducted technological innovation boosts internet banking. The strategy of the banks to incorporate internet banking is to have a competitive edge on their business models. Researchers give importance to internet banking an effective and innovative delivery channel which represents new challenges in the financial sector. They are of the view that internet banking to the banks is a complementary product and not a substitute product for physical branches. It gives an insight into the market competitiveness and the overall expenditure involved including the R&D expenditure. Taking due consideration of all the expenditures involved, the study revealed that internet banking has led to an increase in the return on assets and equity and also reduces operating costs. Increased internet access has enhanced network building with prospective clients and thus boosts the profit potential for the banks.

2.3.3 Berger,S.C. (2007), Gensler,S. (2007). Online Banking Customers: Insights from Germany. Journal of Internet Banking and Commerce, vol.12, no. 1.

The research is studied based on interviews with German banking customers belonging to private households in Germany. The study includes factors such as demographics, product interest and use, risk aversion, direct banking affinity and bank use. The study reveals that online banking customers are willing to accept risks in exchange for higher interest rates and have high demand for banking products. For retail banks, profitable online banking customers are among the most promising customer segments and need to be given a top priority.

2.3.4 Keeton,W.R. The Transformation of Banking and Its Impact on Consumers and Small Businesses. Federal Reserve Bank of Kansas City.

The study held there are three parameters for transformation in banking sector, mainly- Consolidation, internet banking and financial integration.

Consolidation means the acquisition of assets in bank mergers. It has significantly increased from 1980’s of 10 million dollars to 650 million dollars in 1998. The biggest change was in the importance of the megabanks who hold more than $100 billion of assets. There were around eight megabanks and together they accounted for 30% of domestic bank deposits at the end of 1999.

Internet banking enabled commitment from large banks and there were about 3500 banks using the technology. The main benefit of internet banking to consumers is lower fees for banking services or higher rates on deposits. Also it provided greater convenience for payment of bills known as bill presentment. Internet banking from the bankers point of view benefits the bank to acquire overall financial condition of their online consumers thus to provide higher quality service, determine which products would best serve each customer’s financial goals and make those products available online.

Internet banking is also beneficial to the small businesses in order to view their balances in real time, transfer money between accounts and originate wire transfers. Small firms could also get help from their banks in conducting business-to-business (B2B) commerce over the Internet—for example, in setting up automated systems for ordering and paying for new supplies when inventories fall below a critical level.

Financial Integration made two major changes. First, it allowed bank holding companies to merge with insurance and securities companies and cross-sell their products. Second, it allowed bank holding companies that did not merge with other firms to offer new financial services on their own—for example, underwriting securities, selling or underwriting insurance, and making equity investments in business firms.

On the whole, consumers appear to be benefiting from the changes. Consolidation has not been beneficial enough in reducing the competition as the mergers that were seen were not in the same city or country. Internet banking reduces the time and inconvenience of banking transactions and by providing access to the small communities that might otherwise be unavailable. It also provides the benefit of one-stop shopping. Combining these services would result in information gathering at lower prices.

2.3.5 Okhiria,A.S. Internet banking in Sweden- An exploratory study on its Symbiotic Benefits. University of Gavle.

The study highlighted the growing importance of use of internet banking by banks with their clients that lead to a number of additions and deductions on the value creation. The study was conducted in lieu of the statement that internet banking provides value to both the bank and its customers. The results provide an insight on the high rate of adoption of internet banking and the values the banks and their customers have benefitted from. Internet banking is a value adding process to make the customers life easier and banking much faster. Also internet banking is beneficial for the huge attention and investments that it has attracted, making it a profitable venture. To conclude the results, internet banking has also reduced the cost of delivery of service than the traditional methods of banking.

2.3.6 Sullivan,R.J. (2000). How Has the Adoption of Internet Banking Affected Performance and Risk in Banks?. Financial Industry Perspectives, Federal Reserve Bank of Kansas City.

The study provides an insight on internet banking where in a bank website provides insight into the branch locations and product descriptions. They also provide information on a number of interactive services such as financial calculators, loan or deposit application, and access to account balances and bill payment. Banks are divided into four types- Community banks, large community banks, Regional banks and Large Regional banks. All these categories of banks are assessed on their demographic and market characteristics, funding income and lending characteristics and financial risk and performance. A bank can generate a large number of Internet transactions if it has a sizeable customer base, a high participation rate among its customers, and customers who actively use the system. Banks offering Internet banking are taking a risk by adopting the technology at an early stage of the products life cycle. Results show that Internet banking has been introduced into markets with characteristics such as a highly educated population that may increase customer acceptance. Also the business strategy of banks is consistent with the type of functions offered on their Web sites. Overall though there is high risk involved, the bank’s performance has improved substantially and would reap benefits soon in the near future.

2.4 STUDIES CONDUCTED IN INDIA

2.4.1 Dixit,N. (2010), Datta,S.K. (2010). Acceptance of E-banking among Adult Customers- An Empirical Investigation in India. Journal of Internet Banking and Commerce, vol. 15, no. 2.

The study examines the change in the usage of banking services with a switch from traditional banking services to advanced self-service technology. The customers are able to interact with their bank accounts and transact virtually from anywhere without time restrictions. Internet banking establishes its basis on the expectations of accuracy, security, network speed, user-friendliness, user involvement, privacy, trust, familiarity and convenience. Adult customers always prefer advanced technology but sometimes lack knowledge to access such technologies (internet banking services). The fact that customers have positive perceptions of internet banking should be considered as important and needs to be valued, if not one bad experience can result in losses, dissatisfaction and disbelief in technology.

2.4.2 Mahdi,M.O. (2006), Dawson,P. (2006). Technology policy and change in developing economies- Advancing a banking strategy for world developments. International Journal of Technology, Policy and Management, 6(3), 256-273.

The research paper highlights the recent developments in the international economy, namely liberalization, globalization and the application of Basel Committee recommendations in order to promote the adoption of internet banking. The study examines the technology policy and change in the banking industry. It focuses on developing economies that aim at development and growth with the advent of internet banking and the use of new technology. It states the various investments made, such as comprehensive IT training programmers for new personnel’s, modification of systems to accommodate the modes of internet banking practice, etc. Priority should be given to such investments as they bring out new dimensions of delivery channels and help in the development of the banks and the economy.

2.4.3 Malhotra,P. (2009), Singh,B. (2009). The Impact of Internet Banking on Bank Performance and Risk- The Indian Experience. Eurasian Journal of Business and Economics, 2(4).

The study reveals that out of 85 scheduled commercial banks, only 57% i.e. 48 banks, use net banking in their organizations. A univariate analysis was used which showed that large banks use internet banking and they have better operating ratios and profitability as compared to the non- internet banks. These banks rely on their core deposits as a basis of funding. Another tool used in the study was the multiple regression analysis which revealed that profitability and offering of internet banking doesn’t have any impact on each other. Rather internet banking has a negative impact on profitability with the risk involved. Also internet banking affects positively the performance of foreign banks in terms of Return on Equity. Thus the study concludes that internet banking has helped the banks in reducing the risk profile with the advent of internet banking.

2.4.4 Uppal,R.K. (2011). Internet banking in India: Emerging risks and new dimensions. Prime Journals, vol. 1(3), pp. 73-81.

The study examines that private sector banks are on the top in providing the internet banking services to their customers. The research analyzed as to how technology is affecting the employees’ productivity. In India, the public sector banks will need to use technology in order to improve their operating efficiency and services. Technology will be used to add value to customer services, to develop new products, strengthen risk management, etc. Also it revealed that technology has transformed the delivery channels in banks banking business. The study has explored the challenges that the banking industry has faced, the extent of usage of internet banking by the customers and the various strategies to be adopted for internet banking services in India. The study strongly concludes on the note that technology and internet banking is the only tool to achieve a bank’s goal.

2.5 RESEARCH GAP

In all the studies conducted by various researchers it is noticed that most of the research is based on the customers’ point of view. Bankers’ point of view is not taken into consideration. Internet banking has created significant impact on a bank employee by reducing their work load transaction, increase in the productivity, increase in knowledge, reduction in processing time, etc. Hence, this research is conducted to consider a bank and its employees’ point of view of internet banking. Also, most of the studies conducted are based in countries outside India. Hence this research focuses on impact of bankers in Bangalore, India.

2.6 HOW THE REVIEW WAS USEFUL

The review helped in an in-depth understanding of the concept of internet banking and the various concepts related to internet banking. Also it helped in analyzing how internet banking has become a new delivery channel in the banking industry and community. The advantages and challenges involved in the implementation of internet banking and the implications on the bank’s performance were also highlighted. The various factors and risks associated with internet banking were also studied and analyzed.

3.1 INTRODUCTION

Research designs are concerned with turning the research question into a testing project. The best design depends on our research questions. Every design has its positive and negative sides.

This chapter encompasses outlining the objectives of the research, the method adopted in terms of data collection through observation templates and embedding some aspects of qualitative aspect through informal interviews with experts. It also mentions the theoretical frame and the limitations in conducting this research.

3.2 STATEMENT OF THE PROBLEM

"A study on the impact of internet banking on the bank and its employees"

3.3 OPERATIONAL DEFINITIONS

3.3.1 Electronic banking- E-banking can be defined as the use of electronic delivery channels for banking products and services, and is a subset of electronic finance. The most important electronic delivery channels are the Internet, wireless communication networks, automatic teller machines and telephone banking. Internet banking is a subset of e-banking that is primarily carried out by means of the internet.

3.3.2 Brick and mortar banking-A branch, banking center or financial center is a retail location where a bank, credit union, or other financial institution (and by extension, brokerage firms) offers a wide array of face-to-face services to its customers. These are typically stand alone branches of a financial institution that often are contained in its own building. These branches typically offer full service banking including safe deposit boxes. They may include access to drive-through teller windows.

3.3.3. Brick and click banking-It is the buying and selling of product or service over electronic systems such as the Internet and other computer networks. Electronic commerce draws on such technologies as electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.

3.3.4. Electronic money- It is money or scrip that is only exchanged electronically. Generally this involves the use of computer networks, the internet and digital stored value systems. Electronic funds transfer (EFT),direct deposit, digital gold currency and virtual currencies are all examples of electronic money. 

3.3.5 Transactional Website- A transactional web site is an internet website of a bank that allows the customer, at minimum, to initiate inter-account transfers.

3.4 VARIABLES OF THE STUDY

The purpose of the research is to understand the effect of internet banking revolution on the bank and its employees. Various variables to be studied under this research are-

Impact on workload

Personal development

Processing time

Convenience

Benefits of internet banking

Improvement of internet banking

Electronic data interchange

Real time gross settlement

3.5 OBJECTIVES OF THE STUDY

The Research is being conducted for the following reasons:

To determine the impact internet banking has on the employees of the firm.

To quantify the economic impact of internet banking.

3.6 HYPOTHESIS

The hypothesis to be studied under the research are defined as follows-

1. H0- "Internet banking has not created significant impact on the bank and its employees."

H1- "Internet banking hascreated a significant impact on the bank and its employees."

2. H0- "Internet banking has not increased the productivity of the bank and its employees."

H1- "Internet banking has increased the productivity of the bank and its employees."

3. H0- "Internet banking has not reduced the time taken for processing of transactions of the bank and its employees."

H1- "Internet banking has reduced the time taken for processing of transactions of the bank and its employees."

4. H0- "Internet banking has not been cost effective on the bank and its employees."

H1- "Internet banking has been cost effective on the bank and its employees."

5. H0- "Internet banking has not helped in the knowledge up gradation of the bank and its employees."

H1- "Internet banking has helped in the knowledge up gradation of the bank and its employees."

3.7 SAMPLING PROCEDURE

1. Target Population-Bank employees in Bangalore, with more emphasis given on the areas like Sanjaynagar and surrounding areas, where the possibility of getting information is high.

2. Sampling Element-Questionnaire will be administered to the individual’s. Also it will be administered to both male& female employees.

3. Sampling Frame-Individual employees working in the bank.

4. Sampling Method-A survey with a well framed questionnaire will be done with the respective target segment which fulfils the required objectives of the research. An in-depth interview will be conducted for the respondents.

5. Sample Size-100 respondents.

6. Sampling Administration-Survey questionnaire will be administered to the specific target population between the hours 2:00 P.M – 4:00 P.M on weekdays. On weekends, the survey can be conducted till afternoon only keeping in the work timings of the banks.

3.8 TOOLS USED IN THE STUDY

The primary data will be collected through survey method. A survey will be conducted with the help of a well-designed questionnaire and would be addressed to the respondents coming under our sampling frame. The questions contained in the questionnaire are Close-Ended Questions.

3.9 STATISTICAL ANALYSIS

The techniques to be used for doing the analysis are as follows:

3.9.1 FREQUENCY DISTRIBUTION

A representation, either in a graphical or tabular format, which displays the number of observations within a given interval. The intervals must be mutually exclusive and exhaustive.

3.9.2 CROSS-TABULATION

Cross tabulation is a method used when creating graphs which display how different items inter-relate. This allows those creating and reviewing the graphs to see where two or more pieces of data directly relate to or affect one another. It will help to search for patterns of interaction. If certain cells contain disproportionately large (or small) numbers of cases, then this suggests that there might be a pattern of interaction.

3.9.3. HYPOTHESIS TESTING

A statistical hypothesis is an assumption about a population parameter. This assumption may or may not be true. Hypothesis testing refers to the formal procedures used by statisticians to accept or reject statistical hypotheses.

There are two types of statistical hypotheses.

Null hypothesis. The null hypothesis, denoted by H0, is usually the hypothesis that sample observations result purely from chance. 

Alternative hypothesis. The alternative hypothesis, denoted by H1 or Ha, is the hypothesis that sample observations are influenced by some non-random cause.

3.9.4. ANOVA

A statistical analysis tool that separates the total variability found within a data set into two components: random and systematic factors. The random factors do not have any statistical influence on the given data set, while the systematic factors do. The ANOVA test is used to determine the impact independent variables have on the dependent variable in a regression analysis.

4.1 FREQUENCY DISTRIBUTION ANALYSIS

QUESTION 1- How does I-Banking impact your workload in the bank?

Table 4.1.1- Table showing the analysis of the impact of i-banking on the workload of the bank

Q1

Increase in No. of Work Hours

Increase in Decision Making Process

Increase in Productivity

Increase in Knowledge

Reduction in Processing Time

Improvement in Team Performance

Very large extent

52

30

31

38

31

33

Large extent

28

55

46

45

52

47

Not at All

7

4

4

2

5

7

Little extent

12

3

18

13

11

13

Very little extent

1

8

1

2

1

0

SUM

100

100

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that internet banking has impacted the working of banks to a very large extent in increase in no. of work hours with 52 respondents’ supporting the variable and 1 respondent stating that there is very little extent of i-banking on the workload. There is an increase in decision making process, increase in productivity, reduction in processing time and improvement in team performance to a large extent due to the advent of internet banking with 55, 46, 45 52, 47 respondents’ respectively supporting the analysis.

Graph 4.1.1- Graph showing Impact of i-banking on the workload of the bank

INFERENCE-

The graph shows 52% increase in no. of working hours in a bank to a very large extent on the incorporation of internet banking. Also it depicts that 55% of the sample agree that there is an increase in decision making process, 46% agree that there is increase in productivity, 45% agree that there is increase in knowledge, 52% agree that there is reduction in the processing time and 47% agree that there is improvement in team performance on introducing internet banking in the bank. The graph draws a conclusion that due to the advent of internet banking the workload of the bank has reduced and supports the functionality of working of the bank effectively.

QUESTION 2- How does I-Banking impact your personal development and relations with your peer group and clients?

Table 4.1.2- Table showing the analysis of the impact of i-banking on personal development and relations

Q2

 

Training to employees

Knowledge Up gradation

Promptness in service

Relationship btw Employee and Customer

Relationship btw Employee and Employee

Excellent

46

34

39

33

29

Very Good

45

52

30

38

46

Good

9

14

28

27

23

Fair

0

0

3

2

1

Poor

0

0

0

0

1

SUM

100

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that internet banking has impacted the personal development and relations excellently in terms of training given to the employees with 46 respondents’ supporting the variable. 52 respondents’ state that due to i-banking there is very good impact on knowledge up gradation. 39 respondents support the i-banking practices as there is excellency in promptness in service. 38 respondents’ state that the relationship between employees and customers are very good and 46 respondents’ state that the relationship between employees are also very good, increasing the scope of personal development and relations in the banks.

Graph 4.1.2- Graph showing Impact of i-banking on the personal development and relations

INFERENCE-

The graph shows 46% training given to the employees is excellent on the incorporation of internet banking. Also it depicts that 52% of the sample agree that there is knowledge up gradation, 39% agree that there is excellency in promptness in service, 38% agree that there is very good relationship between employee and customer, 46% agree that there is very good relationship between employees. The graph draws a conclusion that due to the advent of internet banking the personal development and relations with peer group and clients have increased substantially.

QUESTION 3- Rate the I-Banking practice as compared to traditional banking

Table 4.1.3- Table showing the comparison of traditional banking vs internet banking

Q3

 

I-Banking vs Traditional Banking

Far Better

65

Better

34

Same

1

Poor

0

SUM

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that 65 respondents’ state that the i-banking practices are far better than the traditional banking practices. 34 respondents state that the internet banking is better than traditional banking practices. All of the respondents’ support the i-banking practices.

Graph 4.1.3- Graph showing comparison of i-banking vs traditional banking

INFERENCE-

The graph depicts that 65% of the sample rate i-banking practices far better than traditional banking. Also 34% of the sample rate i-banking practices better than the traditional banking practices. Therefore it can be seen that i-banking practices is better than the traditional banking practices and the employees are in favour of i-banking.

QUESTION 4- How is I-Banking impacting the processing time of transactions?

Table 4.1.4- Table showing the analysis of the impact of i-banking on processing time of transactions

Q4

 

Time in Processing Transactions

Time to respond to queries

Availability of staff

Banking Hours

Complexity in Transactions

Substantially Increased

20

7

12

7

11

Increased

12

19

16

24

16

Stable

15

19

33

32

22

Decreased

42

33

25

25

32

Substantially Decreased

11

22

14

12

19

SUM

100

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that internet banking has an impact on the processing time of transactions such that 40 respondents’ state that the time taken in processing transactions have decreased. 33 respondents’ state that the time to respond to queries have decreased, 33 respondent’ state that the stability in availability of staff, 32 respondents’ state that the banking hours are stable and 32 respondents’ state that the complexity of transactions have decreased due to the advent of internet banking.

Graph 4.1.4- Graph showing Impact of i-banking on processing time of transactions

INFERENCE-

The graph depicts that 40% of the sample state that there is decrease in the time taken to process transactions, 33% respondents state that the time taken to respond to queries have decreased, 33% state that there is stability in the availability of staff, 32% state that there is stability in banking hours and 32% state that there is decrease in complexity of transactions on the incorporation of internet banking. Therefore it is seen that i-banking has significantly impacted the processing time of transactions and helped the employees in managing their workload effectively.

QUESTION 5- How does I-Banking improved your convenience towards your job?

Table 4.1.5- Table showing the analysis of improvement in working convenience

Q5

 

Ease of use

Reduction in monotony of work

Security and Privacy

Reduction of risk

Reduced interaction with people

Very large extent

39

32

36

25

20

Large extent

51

46

31

36

48

Not at All

4

13

5

11

11

Little extent

6

8

27

27

21

Very little extent

0

1

1

1

0

SUM

100

100

100

100

100

Source: Primary Data

ANALYSIS-

As it can be seen from the above table, 51 respondents’ state that there is large extent in the ease of use of i-banking practices, 46 respondents state that i-banking has resulted in reduction in monotony of work, 36 respondents state that i-banking has impacted on a very large extent on security and privacy, 36 respondents believe that there is reduction of risk and 48 respondents’ state that i-banking has reduced interaction with people.

Graph 4.1.5- Graph showing Impact of i-banking on convenience towards employees job

INFERENCE-

The graph depicts that 51% respondents’ have experienced ease of use with the introduction of internet banking, 46% experienced reduction in monotony of work to a large extent, 36% stated that there is security and privacy to a very large extent, 36% stated that there was reduction in risk to a large extent and 48% stated that there is reduction in interaction with customers to a large extent with the advent of internet banking practices. Hence the employees have experienced convenience in working towards their job.

QUESTION 6- According to you, rate the benefits of i-banking

Table 4.1.6- Table showing the analysis of the benefits of i-banking

Q6

 

Increase in Employee Productivity

Increase in Branch Productivity

Increase in Bank Productivity

Up-to-date Information

Rush of Customers in Bank

Strongly Agree

43

29

37

48

33

Agree

53

63

55

43

43

Neutral

4

6

8

9

19

Disagree

0

2

0

0

5

Strongly Disagree

0

0

0

0

0

SUM

100

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that 53 respondents agree that there is increase in employee productivity, 63 respondents agree that there is increase in the branch productivity, 55 respondents agree that there is increase in bank productivity, 48 respondents strongly agree that up-to-date information available due to the i-banking practices adopted and 43 respondents agree that the rush of customers in the bank has reduced.

Graph 4.1.6- Graph showing the benefits of i-banking

INFERENCE-

The graph depicts that 53% sample agree that there is increase in employee productivity, 63% state that there is increase in branch productivity, 55% state that there is increase in bank productivity, 48% state that up-to-date information is available and 43% state that the rush of customers in the bank has decreased due to the incorporation of i-banking in the bank. Hence the bank has benefitted from i-banking practices adopted.

QUESTION 7- What are the factors that influenced the bank to adopt i-banking?

Table 4.1.7- Table showing the factors influencing the bank to adopt i-banking

Q7

 

Own willingness of the Bank

Guidelines by RBI

Globalization in Banking Industry

Competition from other banks

Cost Effectiveness

Rank 1

35

27

28

24

29

Rank 2

26

29

18

41

31

Rank 3

11

25

35

11

10

Rank 4

4

16

16

17

12

Rank 5

24

3

3

7

18

SUM

100

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that 41 respondents believe that the bank adopted i-banking due to competition from other banks, 35 respondents believe that the bank adopted i-banking due to the bank’s own willingness, 35 respondents believe that the globalization was an important factor, 31 respondents believe that cost efficiency was an important factor and 29 respondents believe that the guideline by RBI was the factor for the bank to adopt i-banking practices.

Graph 4.1.7- Graph showing the factors influencing the bank to adopt i-banking

INFERENCE-

The graph depicts that 41% believe the driving force for i-banking is due to the competition faced by the bank from the other banks, 35% believe that it was the bank’s willingness to adopt i-banking, 35% believe that globalization was a factor, 31% believe that cost effectiveness was a factor and 29% believe that guidelines issued by RBI was the driving factor behind the adoption of i-banking practices.

QUESTION 8- Rank the ways to improve i-banking

Table 4.1.8- Table showing the analysis of the ways to improve i-banking

Q8

 

Employee education and staff Training

Simplification of rules

Up-to-date infrastructure

Reduction in complexity of software

Rank 1

58

33

33

29

Rank 2

17

47

37

32

Rank 3

10

15

25

12

Rank 4

15

5

5

27

SUM

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that 58 respondents believe that i-banking practices can be improved by proper employee education and staff training, 47 respondents believe that simplification of rules will help to improve i-banking, 37 respondents believe that up-to-date infrastructure will help in improving i-banking and 32 respondents believe that reduction in software complexity will improve the usage of i-banking.

Graph 4.1.8- Graph showing ways to improve i-banking

INFERENCE-

The graph depicts that 58% believe i-banking can be improved by employee education and staff training, 47% believe that simplification of rules is one of the factors to improve i-banking, 37% believe in up-to-date infrastructure, and 32% believe that reduction in software complexity will improve the usage of i-banking.

QUESTION 9- What is your perception on Electronic Data Interchange?

Table 4.1.9- Table showing the analysis of the employees perception on Electronic Data Interchange

Q9

 

Reduces mailing costs

Automatic reconciliation

Less reliance on Human Interpretation

Enables paperless transactions

Strongly Agree

53

26

37

27

Agree

43

59

40

58

Neutral

4

11

23

14

Disagree

0

4

0

1

Strongly Disagree

0

0

0

0

SUM

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that 53 respondents strongly agree that EDI reduces mailing costs, 59 respondents agree that EDI helps in automatic reconciliation, 40 respondents agree that there is less reliance on human interpretation and 58 respondents agree that EDI enables paperless transactions.

Graph 4.1.9- Graph showing employees perception on Electronic Data Interchange

INFERENCE-

The graph depicts that 59% agree that EDI helps in automatic reconciliation, 58% agree that EDI enables paperless transaction, 53% strongly agree that EDI reduces mailing costs, and 40% agree that there is less reliance on human interpretation.

QUESTION 10- What is your perception on Real Time Gross Settlement?

Table 4.1.10- Table showing the analysis of the employees perception on Real Time Gross Settlement

Q10

 

Processing and real time settlement

Transaction by Transaction Settlement

Eliminates Settlement Risk

FIFO Basis Settlement

Immediate Finalization of Transaction

Strongly Agree

68

28

37

38

47

Agree

32

60

47

49

47

Neutral

0

12

16

12

5

Disagree

0

0

0

1

1

Strongly Disagree

0

0

0

0

0

SUM

100

100

100

100

100

Source: Primary Data

ANALYSIS-

From the above table we can infer that 68 respondents believe that RTGS helps in processing and real time settlement, 60 respondents believe that RTGS helps in transaction by transaction settlement, 47 respondents believe that RTGS eliminates settlement risk, 49 respondents believe that RTGS helps in FIFO basis settlement and 47 respondents believe that there is immediate finalization of transaction with the help of RTGS.

Graph 4.1.10- Graph showing employees perception on Real Time Gross Settlement

INFERENCE-

The graph depicts that 68% believe that RTGS helps in processing and real time settlement, 60% believe that RTGS helps in transaction by transaction settlement, 47% believe that RTGS eliminates settlement risk, 49% believe that RTGS helps in FIFO basis settlement and 47% believe that there is immediate finalization of transaction with the help of RTGS.

4.2 REGRESSION ANALYSIS

Regression

Table 4.2.1- Variables Entered/Removedb

Model

Variables Entered

Variables Removed

Method

1

q1f, q1b, q1c, q1e, q1a, q1d

.

Enter

a. All requested variables entered.

b. Dependent Variable: Q3

Independent variables are-

a. Increase in no. of work hours’

b. Increase in decision making process

c. Increase in productivity

d. Increase in knowledge

e. Reduction in processing time

f. Team performance improvement

Dependent variable is employee perception about internet banking.

Table 4.2.2- Model Summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.813a

.660

.565

.260

a. Predictors: (Constant), q1f, q1b, q1c, q1e, q1a, q1d

From the table we can infer that the value of R is 0.813 which indicates there is strong correlation between the above mentioned independent variables. The value of R Square is 0.660, which indicates that 66% of the variation in dependent variable can be explained by the independent variables.

4.3 ANOVA ANALYSIS

Table 4.3.1- ANOVAb

Model

Sum of Squares

Df

Mean Square

F

Sig.

1

Regression

5.191

6

2.565

3.983

.006a

Residual

40.569

93

.536

Total

45.760

99

a. Predictors: (Constant), q1f, q1b, q1c, q1e, q1a, q1d

b. Dependent Variable: Q3

Table 4.3.2- Coefficientsa

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

1.589

.289

5.493

.000

q1a

.034

.089

.046

.379

.042

q1b

-.132

.088

.183

1.508

.013

q1c

.034

.191

.246

.371

.212

q1d

.058

.095

.038

.299

.765

q1e

-.220

.092

-.264

-2.388

.019

q1f

.080

.189

-.098

.906

.367

a. Dependent Variable: Q3

As we can infer from the ANOVA table, the significant value is 0.006, which is less than 0.05, hence we can conclude that the primary data collected can be used for describing the hypothesis 1 perfectly.

From the Coefficient Table we can infer that factors 1, 2 and 5 have a significant value less than 0.05, which is the level of significance. Hence, we are rejecting the null hypothesis and accepting alternative hypothesis. So the variables- a. Increase in no. of work hours’; b. Increase in decision making process and e. Reduction in processing time; are the factors which have significant impact on the workload of the bank employees. Whereas, variables- c. Increase in productivity; d. Increase in knowledge and f. Team performance improvement; don’t have an impact on the workload of the bank employees.

4.4. RELIABILITY ANALYSIS

Table 4.4.1- Case Processing Summary

N

%

Cases

Valid

20

100.0

Excludeda

0

.0

Total

20

100.0

a. List wise deletion based on all variables in the procedure.

In order to check the accuracy of the well-structured questionnaire, a Pilot Study was conducted with 20 responses. The results of the reliability test is as follows-

Table 4.4.2- Reliability Statistics

Cronbach's Alpha

N of Items

.742

45

As the value inferred from the above table, the Cronbachs’s Alpha is 0.742, which is more than the level of 70%, which concludes that the data is reliable.

4.5 KAISER-MEYER-OLKIN MEASURE OF SAMPLING ADEQUACY

4.5.1 FACTORS INFLUENCING THE BANK TO ADOPT I-BANKING

Table 4.5.1- KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.655

Bartlett's Test of Sphericity

Approx. Chi-Square

83.197

Df

10

Sig.

.000

The Kaiser-Meyer-Olkin Measure of Sampling Adequacy is a statistic that indicates the proportion of variance in your variables that might be caused by underlying factors. Higher the value, most adequate is the data for your study, which in this case in 0.655, marks above the level of 0.50.

4.5.2 PRINCIPAL COMPONENT ANALYSIS

Table 4.5.2- Principal Component Analysis

Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

1

2.172

43.433

43.433

2.172

43.433

43.433

1.683

33.653

33.653

2

1.098

21.951

65.384

1.098

21.951

65.384

1.587

31.731

65.384

3

.760

15.209

80.593

4

.535

10.690

91.283

5

.436

8.717

100.000

Extraction Method: Principal Component Analysis.

4.5.3 ROTATED COMPONENT MATRIX

Table 4.5.3- Rotated Component Matrix

Rotated Component Matrixa

Component

1

2

q7a

.735

q7b

.727

q7c

.758

.065

q7d

.869

q7e

.819

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

Factors involved are-

q7a- Own willingness of the bank

q7b- Guidelines by RBI

q7c- Globalization in banking industry

q7d- Competition from other banks

q7e- Cost Effectivenes

Hence, the two factors drawn out of the study are-

a. Cost efficiency

b. External factors’ impact

4.6 CROSS TABULATION ANALYSIS

Table 4.6.1- Impact of banking on knowledge up gradation

Age * q2b Crosstabulation

Count

q2b

Total

Excellent

Very good

Good

Age

26-35 yrs

0

2

0

2

36-45 yrs

5

9

0

14

46 yrs& above

3

2

2

7

Total

8

13

2

23

We can infer from the table that there is cross tabulation of data between the age of the employee and knowledge up gradation for them in terms of i-banking practices. Hence, the respondents agree that the impact of i-banking on knowledge up gradation is excellent, very good and good. None favour the impact on an negative side of fair and poor.

Graph 4.6.1- Graph showing the impact of i-banking on knowledge up gradation

The graph depicts the comparison of age group with the knowledge up gradation being positively linked with the advent of i-banking. The majority of the employees are of the age group of 36-45 years followed by second majority in 46 years and above.

5.1 FINDINGS

With the help of the Frequency Distribution Analysis, we could find out that-

On the advent of i-banking practices in banks, the workload of the employees has reduced significantly and i-banking supports the functionality of working of the bank effectively. Further this concludes with the acceptance of alternative hypothesis of Hypothesis 1 that i-banking has created a significant impact on bank and its employees.

With the introduction of i-banking, Personal development and relations with peer group and clients have increased substantially.

It can be seen that i-banking practices are far better method of transacting than the traditional banking.

I-banking has significantly impacted the processing time of transactions, helping the employees in managing their work efficiently.

I-banking has proved convenient for the employees to conduct their daily transactions with reduced risk and ease of use.

The benefits of i-banking are increase in employee productivity, increase in branch productivity, increase in bank productivity, available of up-to-date information and reduced rush of customers in the bank.

Factors that were the driving forces behind the adoption of i-banking ranks as follows- i. Competition from other banks, ii. Banks own willingness to adopt, iii. Globalization in the Banking Industry, iv. Cost effectiveness and v. Guidelines by RBI.

I-banking can be improved by employee education and training, simplification of rules, up-to-date infrastructure and reduction in complexity of software.

EDI helps in automatic reconciliation, paperless transactions, reduces mailing costs and there is less reliance on human interpretation.

RTGS helps in data processing and real time settlement, transactions settlement, eliminates the settlement risk and there is immediate finalization of transactions.

With the help of Regression Analysis, we could determine that-

The value of R is 0.813, indicating a strong correlation between the independent variables.

The value of R square is 0.660, indicating that 66% of the variation in dependent variable can be explained by independent variables.

With ANOVA Analysis, we could summarize that-

The significant value is 0.006, which is less than 0.05, drawing to a conclusion that the primary data collected can be used to describe the significant impact of i-banking on the workload of the bank employees.

The Coefficient Table helps in the rejection of null hypothesis and acceptance of the alternative hypothesis, stating that there is clear indication that i-banking practices have a significant impact on the workload of the bank employees.

Also, the alternative hypothesis in Hypothesis 3 can be accepted stating that i-banking practices have reduced the time taken for processing of transactions of the bank employees.

With the help of Reliability Test, Cronbach’s Alpha is 0.742, concluding that the pilot study conducted with 20 samples resulted in the data reliability.

KMO Analysis concluded that data is adequate for the study at the level of 0.655.

The Principal Component Analysis and Rotated Component Matrix resulted in cost efficiency, which allows the acceptance of the alternative hypothesis of Hypothesis 4.

The cross tabulation analysis resulted in the acceptance of alternative hypothesis of Hypothesis 5, that i-banking practices has helped in knowledge up gradation.

5.2 SUGGESTIONS

Banks should improve I-banking practices in the following ways-

The technology to be used should be user friendly to the employees and customers, bridging the technical gap.

Proper training and communication should be provided about the technology adopted by the bank.

Incentives should be provided to the employees to boost their learning.

Balance and transactions alert should reach the customers via internet banking, as then it will reduce the workload on the employees.

New banking products and services should be innovated to retain customers.

Benefits of I-banking practices need to be properly communicated to the employees to abridge the risk of job loss.

Security of i-banking is a major threat faced by the banks and hence proper security measures need to be implemented.

Websites should provide all the details regarding the information of the bank and its services, so that customers are educated wisely and this will infuse more sales.

Personalization of roles will improve the performance of employees.

There is be regular up gradation of the technology from time to time to enable faster transaction processing.

5.3 SUGGESTIONS FOR FURTHER RESEARCH

As the survey was limited only to some areas of Bangalore, the same survey could be done for other cities and areas in India.

Surveying the respondents of more than one city can help in comparing the responses and the reactions of the respondents to the effect of internet banking.

Sample size can be increased in order to achieve a more valid and true result for the whole population.

5.4 CONCLUSION

According to the research on Impact of Internet Banking on Bank Employees, we can here by conclude that internet banking practices have significantly impacted the bank and its employees. I-banking reduces the transaction costs, contributing to overall transaction and cost efficiency of the bank. Also the services offered through online banking such as EFT, RTGS, etc., they add to an additional profit as value addition and contribute to the profits from the commission received. The introduction of internet banking has improved the banking efficiency and quality of service provided, hence leading to greater customer satisfaction. Hence the banks should adopt the internet banking practices as it is versatile, flexible, alterable according to the infrastructure available, more responsive and user friendly, leading to the banks performance and overall operating efficiency.