Academic journal article Researchers World

Development of an Instrument to Measure Internet Banking Service Quality in India

Academic journal article Researchers World

Development of an Instrument to Measure Internet Banking Service Quality in India

Article excerpt

ABSTRACT

This paper attempts to develop a reliable and valid instrument of measuring Internet banking service quality in India, and also analyses the impact of Internet banking service quality dimensions on the Overall Internet Banking Service Quality and customer satisfaction. Given the exploratory nature of this research, extant literature survey, focus group discussion and expert interviews were used to develop a battery of Internet banking service quality items. A sample of 1350 Internet banking customers of private sector, public sector and foreign banks was surveyed in the Delhi Metropolitan Area. Results of exploratory factor analysis (EFA) revealed five dimensions- Security/Privacy, Reliability, Efficiency, Responsiveness, and Site Aesthetics. This five dimensional model arrived through EFA was validated through a confirmatory factor analysis (CFA). The proposed research model shows acceptable fit indices. Impact of these dimensions on the Overall Internet Banking Service Quality and customer satisfaction are analysed using multiple regression technique. Findings indicate that all dimensions carry significant impact on the Overall Internet Banking Service Quality perceptions and customer satisfaction. However, Security/Privacy and Efficiency dimensions carry the maximum impact on the Overall Internet Banking Service Quality and satisfaction respectively.

Keywords: Internet Banking, Service Quality, Banking, India, Online Service Quality.

INTRODUCTION:

Internet is emerging as a powerful channel for banks to receive instructions and deliver products and services to their customers. This form of banking is known as Internet banking (Reserve Bank of India, 2001). There are two ways in which banks offer Internet banking - one is that existing physical bank provides services through its website and offers Internet banking as an addition to its traditional delivery channels. The second one is the Virtual or Internet-only bank. As there is no Internet-only bank in India till date, therefore, this research study focuses on existing physical banks offering Internet banking services.

The incredible growth of Internet is changing the way corporations conduct business with consumers (Siu and Mou, 2005). It has not only created opportunities for businesses to reach out to consumers directly but also allows consumers an immediate access to the electronic markets. The impact of Internet on the economic growth and business performance has been the subject of many studies in the past (Venkatraman, 2000). However, most of the online service providers find it difficult to manage service quality in electronic markets because of lack of exposure to this new medium of business operations and their limited knowledge of online consumer behaviour (Mols, 2000). The banking industry is no exception. Today, all the private, public sector and foreign banks in India are offering their services over Internet.

Internet banking is both convenient and time saving in comparison to traditional retail banking experience (Siu and Mou, 2005). Customers' expectations and perceptions of Internet services have been constantly changing; therefore, service quality in electronic markets is becoming an important issue.

Information technology has transformed the functioning of businesses, the world over. It has bridged the gaps in terms of the reach and coverage of systems and has also enabled better decision-making based on latest and accurate information, reduced costs and overall improved efficiency. In the Indian context, the financial sector in general and banking in specific has been a major beneficiary from the inroads made by information technology. A paradigm shift in banking operations has been brought in by the tremendous advances in technology and the aggressive infusion of information technology in recent years. Information technology has emerged as a strategic resource for achieving higher efficiency, control of operations, productivity and profitability in banking operations. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.