Introduction

Services have become an integral part of our everyday lives and are an important segment of all
economies. For today's society, technology has made various aspects of life easier. (Rust & Oliver, 1994).
It has also become a critical component in improving the quality of services in general, and E-Banking
services in particular. (Joseph & Stone, 2003). Since financial services, especially banks, compete in
similar products, service quality has emerged as a key competitive weapon. (Stafford; 1996).

Customers and suppliers are said to share information using technical approaches rather than face-to-
face contact in an e-banking service. Darwish & Lakhtaria, 2011). Most developed countries' banking
sectors were early adopters of e-services and have been actively engaged in their growth.

For companies that offer technology-based services and support services, customer satisfaction is a big
concern. The key thing that will decide whether the company will succeed or fail in the future is the level
of customer service. (Thompson & Bokma 2000). Service quality is becoming increasingly critical as a
result of rapid technological transition and industry competitiveness. (Broderick & Vachirapornpuk
2002). Similarly, the promotion of electronic banking in general, and internet banking in particular, has
resulted in the development of service quality (SERVQUAL) dimensions to gauge customer satisfaction.
One of the most commonly used instruments for measuring consumer loyalty is SERVQUAL, which was
invented by Zeithaml in 1988. According to Mols (2000), the SERVQUAL instrument has been widely
used since the increase in internet usage because internet-based home banking can bring a dramatic
shift in the way banks manage their relationships with their customers.

With the establishment of Nepal Bank Limited in 1937, the country's first bank, it took nearly 53 years
for Nabil Bank Ltd. to introduce credit cards in early 1990. Himalayan Bank Ltd. led the way in Nepal's e-
banking growth with the launch of the Automated Teller Machine (1995) and Tele-banking, where
Kumari Bank Ltd. Was the first bank to introduce internet banking in Nepal in 2002. E-banking has
revolutionized the banking industry all over the world in recent decades, and Nepal is no different. In
today's Nepal, all "A" level financial institutions provide ATM, online banking, and mobile banking
facilities. In the widespread adoption and usage of electronic media and the internet in Nepal, adoption
and use of e-banking has not kept pace.

Most previous research focused only on Internet banking, excluding all other forms of E-Banking
systems such as smart phone apps and E-Banking robots. However, now many studies have looked at
how E-Banking service quality is determined, but few have looked into the relationship between service
quality and consumer satisfaction. This report demonstrates the important influence of E-Banking
service quality on customer satisfaction, as well as the crucial impact of E-Banking service efficiency on
banking clients' expectations of service quality. As a result, the study's key aim is to analyze the quality
of E banking services and identify the major factors affecting service quality on customer satisfaction.

Statement of the Problem

Since we live in a fast-paced, globalized environment, most consumers want technology-based services,
which are especially important in the banking industry. Information networks now have connectivity and
predictive capacity that companies use to perform foreign trading and operate their operations.
Managing a multinational company that is thousands of miles distant a major business problem that
demands a strong information system response is engaging with vendors and manufacturers, working
24 hours a day in various national contexts, organizing multinational work teams, and servicing local and
international monitoring needs.

Objective of the study

The main objective of the study is to examine the impact of E-banking service quality on customer
satisfaction in the state-owned banks is Nepal. They are:

a) To find the impact of E-banking service quality on customer satisfaction.

b) To determine the most significant factors affecting consumer appetite for using E-banking
services.
c) To investigate the differences between different factors that influence the use of E-banking
services.

Research Significance
Globalization and the ongoing economic and political instability in the world and in Nepal, respectively,
have forced banks to be alert and recognize the importance of E-Banking services and their role in
customer satisfaction. In this case, the researchers wanted to talk about these problems in terms of the
benefits that can't be achieved without a well-designed E-Banking service. Furthermore, discussing
customer loyalty as a complex practical phenomenon that is closely linked to an institution's priorities
elucidates how to meet targets that revolve around increasing profits and increasing the number of
customers. Furthermore, this study would include a roadmap for bank executives to pursue in order to
improve customer loyalty by sustaining and improving the efficiency of E-Banking Services.

Definition of Key Terms

In this section, variables or key terms of research are defined below:

I. Reliability: The site's technological functionality, as well as the information offered, are also
excellent.
II. Efficiency: The customer's ability to access a website, locate their desired product, and obtain
information related to it.
III. Responsiveness: When a dilemma arises, e-retailers' capacity to deliver appropriate information
to customers is crucial. Willingness to support consumers and offer fast service.
IV. Empathy: Customer experience that is respectful and tailored. This raises the question of
whether banks are as concerned as they should be with consumers who use e-banking. There
are periods that e-banking systems are totally inaccessible, leaving consumers stuck, and the
consequence is concerns that the banks do not care.
V. Tangible: Physical facilities, vehicles, staff, and contact materials' presentation. This has to do
with the e-physical banking's presence. It should be visually pleasing to consumers and well-lit at
night.
VI. Assurance: It is described as an employee's courtesy, experience, and ability to express
confidence.
Research Framework

Independent Variable Dependent Variable

Reliability

Assurance
Customer
Tangible Satisfaction

Responsiveness

Privacy and
Security

Source: (McLeod, 2019)

Literature Review
E-Banking
Historically, the advent of the first Automatic Teller Machine (ATM) in Finland represented the beginning
of a new banking channel, propelling Finland to the forefront of E-Banking until it was broadly embraced
in other developed and emerging countries (Sharma, 2011) E-Banking, or the delivery of financial
services through electronic systems, has recently gained popularity among customers as a result of rapid
advancements in technology and increased rivalry among banks. (Md Delwar Hussain Mahdi, 2010) DOI
Bookmark: 10.1109/ICDS.2010.45

E-banking services are described by (Lustsik, 2004) doi:10.2139/ssrn.612762 as a variety of e-channels

for conducting banking transactions through the Internet, telephone, television, cell phone, and device.
As technology progresses and evolves, banking customers' needs and preferences for service are
increasing. Nowadays, the consumer needs to be able to function and conduct financial transactions
without having to go to the bank, at any time without being restricted by the bank's operating hours,
and to complete any of his or her payments (purchases, bills, and stocks) in a timely and cost-effective
manner. As a result, the standard of financial services should be defined by independence, elasticity,
freedom, and stability in order to meet these needs. (Alshawaf, 2004)
https://doi.org/10.1080/1097198X.2004.10856366

E-banking in Nepal is now mostly restricted to the Internet and cell phones. This is attributed in part to
the country's poor growth of IT infrastructure. In view of this, we describe the term as the ability to
perform banking and financial transactions electronically through the Internet or cell phone apps.
Customer Satisfaction
Today, customer satisfaction is one of the most relevant principles in consumer science (Jamal, 2004)
https://doi.org/10.1080/09593960410001678381 .In general, it connects the cycles that lead up to a
transaction with post-purchase trends like mood shifts, repeat purchases, and brand loyalty (Gilbert A.
Churchill, 1982) https://doi.org/10.2307/3151722 . According to (OLIVER, 1981) , consumers experience
happiness as they relate their understanding of real product/service success to expectations. Customer
satisfaction was described by (David K. Tse, 1988) https://doi.org/10.1177/002224378802500209 as a
"consumer reaction to the assessment of the perceived disparity between expectations and the actual
outcome after consumption." Satisfaction may also be described as the result of a post-purchase
evaluation of a service/efficiency, products as opposed to the expectation at the time of purchase
(PHILIP KOTLER, 2011)

Other researchers, on the other hand, also shown that the effect exerted at the product/buying service's
and usage periods can have a substantial impact on the customer's satisfaction decisions (Christian
Homburg, 2006) https://doi.org/10.1509/jmkg.70.3.021 . Thus, Customer satisfaction is described as a
customer's feeling of gratification or dissatisfaction after contrasting a product's or service's results to
his or her expectations. (Kevin Lane Keller, 2006)

Customer satisfaction, as specified by these concepts and as applied to this analysis, is the customer's
attitude conveyed in response to any kind of E-Banking service. As a result, E-Banking characteristics can
increase, decrease, or maintain customer loyalty.

Customer Satisfaction and E-Banking

One of the key goals of this analysis is to determine how the quality of electronic services rendered by
banks influences customer loyalty in the Lebanese banking sector. According to (Grönroos, 1998), there
is a consistent and constructive connection between E-service efficiency and customer satisfaction.
Indeed, in a report, (A. PARASURAMAN, 1988) found that the connection between service quality and
customer satisfaction is very strong and long-lasting. To test this relationship, Jain converts it to a
simpler formula and concludes that high customer loyalty is highly dependent on receiving improved
and higher quality service (Gupta, 2004)

Several other studies have shown a connection between customer satisfaction and the use of electronic
banking services. (Haadi Babatunde Asiyanbi, 2018) found that consumers in the banking industry are
more satisfied as they use E-Banking services in their study. Similarly, (Chatura Ranaweera, 2003) found
that the first step in consumer loyalty is the standard of E-service. Similarly, (Lien-Ti Bei, 2006)
discovered an important correlation between service efficiency and customer loyalty in the banking
industry. Finally, (Zhou, 2004) asserted that the level of customer satisfaction is influenced by the
efficiency of E-Banking services in terms of reliability.

Dimensions of E-Banking
With several studies concluding that there is a connection between E-Banking service and customer
satisfaction, the issue becomes: What attributes or dimensions of the E-Banking service have the most
impact on customer satisfaction?

Service quality was graded by (A. PARASURAMAN, 1988) into five dimensions: reliability, tangibles,
responsiveness, assurance, and empathy, which are listed below. The dimensions of service quality in
the case of e-banking can be summarized as follows:
Reliability: The opportunity to provide the promised service with consistency and accuracy. This refers to
the opportunity to deliver a service that meets consumer expectations in terms of efficiency (how
quickly the transaction is completed), consistency (how accurate the transaction is in terms of money
withdrawn), and whether the equipment is available 24 hours a day, seven days a week.

When it comes to the operations of e-banking in Nepali banks, one factor that has elicited a lot of
criticism from customers is efficiency. Owing to poor communications, e-banking is often unavailable,
resulting in long lines. If a large number of civil servants try to access their accounts at the end of the
month, the e-banking system will run out of funds. Unreliable service is also caused by service providers'
poor reaction time in fixing defective e-banking. In other cases, though, e-banking meets and exceeds
standards.

Tangible: It is a physical building, vehicles, staff, and contact materials' presentation. This has to do with
the e-physical banking's presence. It should be visually pleasing to customers and well-lit at night. Banks
can have waste bins for litter created from receipts in order to keep the environment clean.

Responsiveness: According to (Christian N. Madu, 2002), responsiveness applies to the bank's ability to
assist its customers and offer timely service. This type of service will take four different types. First, the
E-Banking system is capable of properly controlling and operating the service. Second, in the event that
any operations fail, the E-Banking channels can direct customers to the proper course of action. Third, it
will provide a quick fix for any potential E-Banking transaction bug. Finally, it should have immediate
answers to consumer inquiries.

Privacy and Security: Researchers defined and analyzed a variety of factors in terms of privacy and
protection, including preserving organizational secrecy, refraining from exchanging personal details, and
providing a high degree of security for customer information (Reeti Agarwal, 2009)

Assurance: Employee courtesy and expertise, as well as their willingness to transmit faith and trust to
customers, have been described as assurance (A. Parasuraman, 1994). Assurance requires informing and
listening to consumers in their native tongue, regardless of their educational status, age, or ethnicity.

Methodology
Research Philosophy
The research is based on a positivistic research approach. To get a neutral outcome while using a
positivistic research philosophy, it is necessary to exclude the researchers' own values. The social reality
is regarded and treated in the same way as the physical world - as a separate entity that "exists out
there" and has scientific properties. Existing theories are utilized to formulate hypotheses in a
positivistic research philosophy.

Research Approach
This study will use a deductive research method since it is more compatible with positivistic research
philosophy. A deductive research methodology, which is most typically utilized in quantitative studies,
identifies the relationship between multiple variables.

Research Choice
The study will take a quantitative approach in order to acquire a broad picture of the results. Surveys are
favored in this proposal because they quantify replies into numerical data, allowing for a thorough
measurement of consumer satisfaction. Because respondents are asked the same questions, the
standardization of quantitative survey questions establishes a broad picture of the desired conclusion.

Instrumentation/ Questionnaire
This study's primary research tool will be a questionnaire survey. The study's questionnaire will be
broken into two pieces in general. The demographic section or general inquiries, as well as the
dimensions of e-banking services, will be included. Variables such as the respondent's age, gender,
income level, marital status, occupation, and educational status will be questioned in the demographic
section. The part on e-banking services has been divided into six sub-sections, such as security and
dependability.

Source of Data
Primary source of data will be used in this study which will be collected through a set of structured
questionnaires. In the process, information will be collected through the questionnaire which will be
distributed to the respondents. The questionnaires followed structured methods. For literature review,
secondary data sources are in use.

Sampling Design
Population
Sample Size:
Sampling Technique

Data Analysis
For the study of the variable under inquiry, the statistical program for social science (SPSS 20.0) will be
utilized, and the results will be summarized in frequency tables and figures. To measure the strength of
the link between variables, the Chi square test (test dependence) will be utilized.

1.1. Correlation Analysis= Correlation analysis will be used to examine the degree and direction of
correlations between the dependent variable E-S-QUAL values and the independent moderating
factors. The Pearson correlation is a value between 1 and 1 that reflects how closely two or more
variables are related.
1.2. Reliability Test

1.3. Normality Test

1.4. Descriptive Analysis
Tables, frequency distributions, and percentages will be used to display the descriptive statistical
results in order to provide a concise picture of the data.
This will be accomplished using summary statistics, which will contain the means and standard
deviations for each variable in this research.

Multiple Regression Analysis

The influence of service quality factors (tangibility, dependability, responsiveness, assurance, and
empathy) on customer satisfaction will be investigated using multiple regression analysis.
In this study, the equation of multiple regressions is based on two sets of variables: dependent variables
(consumer satisfaction) and independent variables (Tangibility, reliability, responsiveness, assurance,
and empathy). The primary goal of employing regression equations in this study is to improve the
researcher's ability to describe, comprehend, predict, and regulate the variables. Regress client
happiness on the parameters of service quality.

Ethical Consideration

"Some ethical considerations will be used in the investigation. The rationale and aim of the study, as

 well as the questionnaires to be administered, will be explained to each participant in the study. Before 
being handled with the questionnaire, respondents will be assured of privacy and confidentiality after

 hearing about the study's goal" (Asian Paints Limited, 2013).

REFERENCES

Asian Paints Limited. (2013). CODE OF CONDUCT FOR EMPLOYEES. Mumbai: Asian Paints. Retrieved 7
June 2021, from https://www.asianpaints.com/content/dam/asianpaints/website/secondary-
navigation/investors/code-of-conduct/asian-paints-code-of-conduct.pdf