The Digital Modes Of Banking

Published Date: 02 Nov 2017

CHAPTER 4

INTRODUCTION

In this chapter the data that is collected through structured questionnaire and will be analyzed based on the different types of question to fulfill the object of the study. The data was collected through a structured questionnaire which forms part of primary research. Various types of statistical tools and descriptive analysis will be used to analyse the data and arrive at the result of the study.

PRIMARY DATA ANALYSIS

The primary data has been analyzed using descriptive analysis for basic demographic variables and statistical tools like T-test, Cross tabulation and factor analysis to test the hypothesis and find out the variables that is related to the study.

4.2.1 DISCRIPTIVE DATA ANALYSIS

Descriptive analysis is used to analyse the basic data of the respondents using graphical representation to provide a better and clear view of the collected data. It describes the data and analyse the various characteristics attached to the data through bar chart, pie charts, tables etc.

Chart 4.1: Age of Respondents

Chart 4.2: Gender of Respondents

Interpretation

The total number of respondent’s for this study was 80. Out of which 45 respondents belong to the age group of 22-25 years, followed by 26 respondents of the age group of 18-22 years. Among the total respondents, the number of male respondents was 53 and female respondents were 27.

Chart 4.3: Education level of respondents

Interpretation

The majority of the respondents belonged to have minimum education level off bachelor’s degree followed by 29 respondents who had master’s qualification. Youths as respondent were selected who had minimum qualification so that they have basic knowledge of using online banking services and where aware of the various modes of digital banking so that the data would be accurate and provide a better result for the study.

Q. Which of the digital modes of banking have you used?

Chart 4.4: Digital banking modes

Interpretation

Through the above bar graph it is clearly seen that, out of the three modes of digital banking Atm is used by 94% of the respondents followed by 76% of the users have used e-banking services of their bank and only 36 out of the 80 respondents have used m-banking services. Atm and e-banking services are the most preferred mode of using banking services.

Q. How often do you use internet banking service?

Chart 4.5: Frequency of Internet Banking Service Usage

Table 4.1: Gender of Respondent * Frequency of Usage of Internet Banking Cross Tabulation

Frequency of usage of internet banking

Total

Daily

Weekly

Monthly

Yearly

Gender of respondent

Male

8

24

19

2

53

Female

0

10

12

5

27

Total

8

34

31

7

80

Chart 4.6: Frequency of using Internet Banking based on gender

Interpretation

Internet banking has become a major medium for the banking user to transact with the bank. Out of the 80 respondents 65 of them use internet banking weekly and monthly. Eight users use it on a daily basis to carry out their transaction. It was seen that those 8 user who used internet banking on a daily basis where all male users only. Males preferred to use internet banking more on weekly basis, whereas females preferred to use internet banking on monthly basis. This provides us with the information that internet banking is more famous among the males than females.

Q. Which mode of digital banking is more user-friendly?

Chart 4.7: Mode of Digital Banking that is more User-friendly

Interpretation

Users feel that doing transaction through atm is easier and user friendly. Atm has reduced the time that customers used to waste standing in lines in traditional banking system. Banks have started opening more and more atm center so that customers need not visit the bank for doing basic transaction like cash deposit and withdrawal. 39% of the users feel that Internet banking is more user-friendly. Banks are now days focusing on encouraging user to make use of internet banking and m-banking facility so that customers can transact from anywhere and anytime.

Q. Are you satisfied with M-banking service?

Chart 4.8: M-banking satisfaction among respondents

Interpretation

Out of the 36 users of m-banking service 27 users said that they are satisfied with m-banking service provided by the bank while 9 users feel that the m-banking facility provided by there is still not satisfactory and banks needs to develop the facility to make it more user-friendly and easy to transact.

4.2.2 STATISTICAL ANALYSIS

4.2.2.1 Correlation

Table 4.2: Correlation between Cash Deposit, Neft/Rtgs and Multipurpose ATM

Correlations

Multi-purpose atm

Banking sercives _ cash deposit/withdral

Banking sercives _ neft/rtgs

Multi-purpose ATM

Pearson Correlation

1

.056

-.027

Sig. (2-tailed)

.619

.812

N

80

80

80

Banking sercives _ cash deposit/withdral

Pearson Correlation

.056

1

.352**

Sig. (2-tailed)

.619

.001

N

80

80

80

Banking sercives _ neft/rtgs

Pearson Correlation

-.027

.352**

1

Sig. (2-tailed)

.812

.001

N

80

80

80

**. Correlation is significant at the 0.01 level (2-tailed).

Correlation is used to show the statistical relationship between two variables and their movement. The correlation exists between -1 to +1, where -1 represent negative correlation and +1 represents positive correlation.

The above table shows that there is a strong correlation between banking service like NEFT/RTGS and cash deposit/withdrawal. This means that as more cash deposit facility is used by users they also use NEFT/RTGS facility to transfer fund from one place to another. This means that in the future NEFT/RTGS transaction would increase and E-banking and m-banking facility would become the major medium for user to transfer fund rather than visiting the bank and making a NEFT/RTGS.

There is no significant relationship between Multipurpose atm with cash deposit and neft/rtgs. Hence atm performing such function would be dependent upon factors like cash deposit/ NEFT service.

4.2.2.2 COMPARATIVE ANALYSIS

Table 4.3: Comparative Analysis of factors of E-banking and M-banking

E-banking variables mean value

Makes transaction faster

Reduce cost

Fund transfer is easy & convenient

Instant & complete info

24*7 accessibility

Utility payment

Makes online payment easy

Web page is user friendly

3.8

3.44

3.89

3.7

3.88

3.56

3.93

3.54

M-banking variables mean value

Makes transaction faster

Reduce cost

Fund transfer is easy & convenient

Complete info regarding a/c

24*7 accessibility

Utility payment

Makes online payment easy

Web page is user friendly

2.74

2.59

2.71

2.78

2.84

2.85

2.78

2.55

Interpretation

This comparative analysis is used to identify those important factors that drive E-banking and M-banking users to use these facilities. From the above table the following factors are identified based on their mean scores. They are

E-banking factors:

Makes online payment easy

24*7 accessibility

Fund transfer is easy and convenient

M-banking factors:

Utility payments

Makes online payment easy

24*7 accessibility

Complete information regarding a/c.

Thus, it is clear that both e-banking and m-banking have two factors that are common among them. Using these facility help to make online payments like bill payments, online recharge, online shopping, ticket booking etc. easy using e-banking and m-banking services.

Test -1

T-Test (HYPHOTHESIS TESTING):

H0: There is no significant difference in males and females feeling secured while making online payments through credit/debit cards.

H1: There is significant difference in males and females feeling secured while making online payments through credit/debit cards.

Table 4.4: Group Statistics for hypothesis 1

Gender of respondent

N

Mean

Std. Deviation

Std. Error Mean

Do you feel secure in giving cc/dc details

Male

53

2.45

.722

.099

Female

27

2.85

1.027

.198

Table 4.5: Independent Samples Test

 

Levene's Test for Equality of Variances

t-test for Equality of Means

F

Sig.

t

df

Sig. (2-tailed)

Mean Difference

Std. Error Difference

95% Confidence Interval of the Difference

Lower

Upper

Do you feel secure in giving

CC/DC details

Equal variances assumed

4.54

0.04

2.02

78

0.047

-0.399

0.198

-0.793

-0.005

Equal variances not assumed

 

 

1.81

39.5

0.079

-0.399

0.221

-0.846

0.048

Significance level: 0.05

Result: Reject null hypothesis

Under Levene’s test for equality, if the p-value is less than 0.05, we reject the null hypothesis and accept the alternative hypothesis.

Since the p-value in this test is 0.04 which is below the desired level 0.05, we reject the null hypothesis and accept the alternative hypothesis, stating that there is a significant difference is males and females feeling secured in providing credit/debit information for making online transaction. Hence security has an impact on the gender while they transact through online banking.

Test-2

H0: There is no significant difference in gender’s using multifunctional Atm’s.

H1: There is significant difference in gender’s using multifunctional Atm’s.

Table 4.6: Group Statistics for Hypothesis 2

Gender of respondent

N

Mean

Std. Deviation

Std. Error Mean

Multi-purpose ATM

Male

53

3.87

1.057

.145

Female

27

3.33

1.271

.245

Table 4.7: Independent Samples Test for Hypothesis 2

Levene's Test for Equality of Variances

t-test for Equality of Means

F

Sig.

t

df

Sig. (2-tailed)

Mean Difference

Std. Error Difference

95% Confidence Interval of the Difference

Lower

Upper

Multi-purpose atm would be effective

Equal variances assumed

2.93

.091

1.996

78

.049

.535

.268

.001

1.068

Equal variances not assumed

 

 

1.880

44.76

.067

.535

.284

-.038

1.108

Significance level: 0.05

Result: Accept null hypothesis

This hypothesis is used to test whether there is any difference in the gender while they use atm which provide multi-functional facility like cash deposit, fund transfer, bill payments etc.

The p-value of the test is 0.091 which is much higher that the significance level of 0.05. Hence we fail to reject the null hypothesis and conclude that there is no significant impact of gender while they use multi-functional atm. thus the use of atm does not depend on whether the user is a male or a female and any one can operate it as there is no much of technical knowledge that is required.

Factor Analysis of Challenge that M-banking users face

Table 4.8: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.636

Bartlett's Test of Sphericity

Approx. Chi-Square

161.025

Df

36

Sig.

.000

Table 4.9: 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

2.945

32.717

32.717

2.945

32.717

32.717

2.223

24.696

24.696

2

1.486

16.507

49.224

1.486

16.507

49.224

1.971

21.900

46.595

3

1.028

11.425

60.649

1.028

11.425

60.649

1.265

14.054

60.649

4

.866

9.627

70.276

 

 

 

 

 

 

5

.801

8.900

79.176

 

 

 

 

 

 

6

.740

8.224

87.400

 

 

 

 

 

 

7

.470

5.226

92.626

 

 

 

 

 

 

8

.378

4.195

96.821

 

 

 

 

 

 

9

.286

3.179

100.000

 

 

 

 

 

 

Table 4.10: Rotated Component Matrix

Component

1

2

3

Lack of knowledge

 

.849

 

Do not have smart phone

 

.752

 

Do not know how to operate

 

.634

 

Lack of support and service from bank

.638

 

 

Security issues

.787

 

 

No internet on phone

 

 

.464

Not comfortable using app

.627

 

 

Do not trust the service

.755

 

 

Small screen size

 

 

.907

Interpretation

As per Kaiser-Meyer-Olkin Measure of Sampling Adequacy, factor analysis for any particular problem can be carried out only if the sig. value is greater than 0.6.

In the above test the sig. value is greater than 0.6 hence factor analysis was conducted to find out what are the major factors that discourages users to use M-banking facility. As per the results there major group of factors where identified. They are

Factor 1: Customer Awareness

Lack of knowledge

Do not have smart phone

Don’t know how to operate

Factor 2: Technical Support

Lack of support and service from bank

Security issues

Not comfortable using app

Do not trust the service

Factor 3: Hardware Incompatibility

No internet on phone

Small screen size

These are the three major factors that user face problem in m-banking facility. Technical support and customer awareness are the major factors that respondents feel which prevent them from using m-banking facility. M-banking as a mode of doing banking transaction has been increasing and banks are focusing on overcoming these problems.

Chart 4.9: Perceived future potential of ATM

Interpretation

Now days every individual wants to save time and make transaction as fast as possible. Banks are also trying to develop more and more facilities and technology, so that customer needs can be satisfied. The above chart shows that around 37 respondents agree that futuristic ATM performing function like cash deposit; same a/c fund transfer and third party fund transfer and various other functions like online payment etc. would be useful and effective also. About 18 respondents strongly agree on this. Overall 69% of them feel that such ATM would be effective in the future.

Table 4.11: Mean Score Analysis of the Problem Faced by M-Banking Users

Lack Of Knowledge

No Have Smart Phone

Do not know How To Operate

Lack Of Support And Service from Bank

Security Issues

No Internet On Phone

Not Comfortable Using App

Do Not Trust The Service

Small Screen Size

Mean

2.31

2.50

2.41

2.56

2.33

2.33

2.40

2.38

2.79

N

80

80

80

80

80

80

80

80

80

The mean score analysis shows that customer feel that since the screen size of the device is too small, it is not possible for the users to use the m-banking application. This is followed by lack of support and service from the bank side, as they do not encourage the customer to use this facility, might be because they do have enough technical support to provide all the facility in single software.

Chapter 5: Findings and Suggestion

Introduction:

Based on the above chapter‘s, data analysis and interpretation, major finding and suggestion to this study will be presented in this chapter. Followed by conclusion, limitation to the study and suggestion for future research is also mentioned so that others could make use of this as a foundation and carry the research forward.

Discussion of research findings:

The study aim at identifying various challenges that user face in using e-banking and m-banking services. The study also aims at measuring effectiveness through various factors and is there any relationship with these factors related to using digital banking.

Major finding:

There is a significant difference between males and females using banking services. Like males prefer using internet banking services either daily or weekly, where as females prefer to use internet banking on weekly and monthly basis.

There is also a significant difference between male and female in providing credit card or debit card details online for using online facility like shopping or making payments online.

Using the t-test it was proved that gender do not impact the usage of futuristic atm that can perform multiple function at one time itself.

The comparative analysis showed that features like 24*7 accessibility and making online payments are the most common factors that drivers user to use e-banking and m-banking facility.

75% of the current m-banking users said that they are satisfied with the m-banking facility provided by their bank.

69% of the total respondents feel that atm should perform various other function like interbank fund transfer, third party fund transfer apart from the regular withdrawal facility and balance enquiry.

Using factor analysis it showed that three major factors impact the users for not using m-banking services, they are lack of customer awareness, lack of technical support and hardware incompatibility because to use m-banking facility customers should have a smart phone which is compatible with the software that the banks provide.

Only 45% of the respondent use m-banking services as most of them have heard but not used or unaware of the service.

Conclusion:

Based on the study and findings, it can be concluded that the need for digital banking has been growing and more user are trying to adapt to the technology as this change is beneficial not only to the banks but also to the end users. The traditional system of banking would not last for long and the customers would have to slowly adapt to such technological changes. Using a better technology is always beneficial as they make transaction faster and easier. Internet in today world has been growing as it’s the only medium through which one can access the entire world with just one click.

E-banking, digital atm, M-banking etc. is the recent technological advancement that the banking industry has witnessed. Through these means a person can access his account from anywhere in the world and make transaction. The user can transfer, withdraw or make online payment by just connecting to the net. Digital banking would lead the banking industry to a step further, were there would be no physical branch as all deposit and withdrawal facility will be available at all atm and transfer of fund can be done online or through atm only . Hence a customer to do any banking transaction, need not visit any branch instead finish all his banking activity through just a small machine or access the online banking website. This would be the future of banking in the upcoming years.

LIMITATION TO THE STUDY:

This study was carried out with sample size of 80. Hence a larger sample would provide more accurate data.

The study was focused only to the youth category of population and confined to Bangalore city only.

SUGGESTIONS FOR THE STUDY:

Banks are slowly focusing on branchless and paper less banking service. Hence they should encourage users to use more of internet banking facility and m-banking facility so that transaction can become faster and paper work is reduced.

Banks should provide technical support to develop the platform for digital banking.

Banks should have a separate desk in each branch who would motivate users to use m-banking by installing the application on to the users smart phone and also educate the new users how to operate it .Benefits of e-banking and how this will have an impact could also be explained so that apart from youth ever the elder generation people can use this facility as it is beneficial for both the customers and banks also.

Banks should focus more on the benefit and explain the customers that transacting through online is safe and is really effective.

SUGGESTION FOR FUTURE STUDY:

This study could be further researched in various aspects like analyzing the behavioral aspect of the customers towards internet banking.

Study can be carried on the cost benefit that banks would have if digital banking is adopted.