ISSN: 2320-5407 Int. J. Adv. Res.

11(01), 302-311

Journal Homepage: - www.journalijar.com

Article DOI: 10.21474/IJAR01/16021

DOI URL: http://dx.doi.org/10.21474/IJAR01/16021

RESEARCH ARTICLE
CUSTOMER PERCEPTION ON ONLINE BANKING - A STUDY IN SELECT NATIONALISED BANKS

Mr. Priyadarshan K. and R. Sarvamangala

……………………………………………………………………………………………………....
Manuscript Info Abstract
……………………. ………………………………………………………………
Manuscript History Banking industry in India experienced great changes in the millennium
Received: 10 November 2022 of 2000 AD and later.This article is an attempt to know what generation
Final Accepted: 14 December 2022 Y and generation Z feels and perceive about their online banking
Published: January 2023 experiences. Especially about the nationalised banks which they have
patronised since their youth. Data has been collected form primary
Key words:-
Generation Y., Generation Z., sources from account holders of nationalised banks and secondary data
Perceptions, Online Banking, Mobile from various reports and articles on banking. Further these data has
Banking, Nationalised Banks been analysed using arithmetic mean and descriptive statistics.
Conclusion are drawn based on these statistical tools.

Copy Right, IJAR, 2023,. All rights reserved.

……………………………………………………………………………………………………....
Introduction:-
Indian banking field experienced a sea change by the end of the year 2000 as a result of the Narasimham committee
reports. Further this committee recommendation opened the Indian banking field for foreign players. The foreign
players brought with them new technologies and ideas in banking. This forced Indian banks both private and
nationalised to take up computerisation as well as digitisation of their activities in a large scale. The direct
beneficiaries of this banking revolution are the generation Y account holders followed by generation Z account
holders. (Bencsik Andrea, 2016) Stated that generation Y are the people who were born in between 1980 and 1995
they have seen both the old technology as well as the new existing technology in banking, whereas the generation Z
account holders dived into online account operation from the day one itself.

Online banking refers to a bunch of banking services offered by banks which includes some of the following
features:
1. Mobile banking
2. Internet banking
3. Debit card and Credit card
4. Electronic fund transfer (RTGS, NEFT)
5. Automated teller machines (ATM)
6. UPI and wallets

All these facilities have become integral of a bank account opened these days and are considered quintessential.

Significance and Novelty of the study:

This study is an attempt to throw some light on the perceptions of two varied generations of customers in three of
the leading nationalised bank branches located in the metropolitan city of Bangalore. Further, the city is a home to a
diverse demography, which will make the study a different one and understand the perceptions of online banking.

Corresponding Author:- Mr. Priyadarshan K.

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Review of Literature:-
The literature review for this study revolves around knowing the facets of online banking and the perceptions of
online banking service users. The studies made in the field and the future prospects. Some of the literature relating to
online banking perceptions are discussed as under:

(Nila Armelia Windasari, 2022)in their research found that firmreputation, promotions, features, curiosity, and
rewards given by the banks to customers play a crucial role in digital banking arena.

(Luís Filipe Rodrigues, 2022)researched on the XYZ generations and found that generation Y expected unlimited
banking access without restrictions whereas generation Z expected frequent updates in the banking applications so
that the bank they are dealing with is up-to-date with real world.

(Holzhauer, 2021)viewed that digital banking is an ongoing process which will embrace people of all generations,
further banks shall also invest significant amount of funds on security of online banking, long term relationship
creation and maintenance is the need of the hour and a balance between bank-customer relation and digital banking
has to be continued.

(Rocío Carranza, 2021)stated that banks have to improve the perceived ease of use and convenience in their online
banking interfaces to maintain and increase market share.

(Mashali, 2020)found from their research that banks need to keep their internet banking, telephone banking and
allied service apps updated in order to maintain and increase market share.

(A. Meharaj Banu, 2019)researched and found that adequacy, ease of use and cost efficiency of internet banking
has a direct relationship with online banking and customer satisfaction in the Indian scenario.

(George, 2018)discovered from his study that banks have to create safe environment for their customers. This can
happen by conducting sessions on online banking by a dedicated employee or preparing a video or handout so that
customers can understand and learn safe banking habits. Further banks also have to adopt latest technology to give
the best possible service to their customers.

(Goh MeiLing, 2016)opined that web design, content, convenience and speed of internet banking services given by
a bank has a direct relationship between customer satisfaction and internet banking.

Research Gap:
Research has been conducted on online banking perceptions in many parts of the world targeting different age
groups and types of banks, but in a country like India dominated by a diverse population and banking system this
type of study is lacking. This study is an attempt to find out the customer perception of online banking in select
nationalised banks targeting generation Y and Z customers in the metropolitan city of Bangalore.

Objectives of Study:-
1. To study the various online banking services provided by the nationalised banks.
2. To know the perception of generation Y and Z customers about the various online banking services provided by
the nationalised banks.

Hypotheses of the Study:

1. (H0) There is no significant difference between the perception of online banking by generation Y and
generation Z customers of nationalised banks.
2. (H1) There is a significant difference between the perception of online banking by generation Y and generation
Z customers of nationalised banks.

Methodology of the study:-

Sources of data:
The study is based on primary data as well as secondary data. Primary data is collected from generation Yand
generation Z customers of SBI, PNB and BOB through a structured questionnaire prepared and circulated through

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google forms. The secondary data is collected from articles reports and other media sources.

Population and period of the study:

Primary data has been collected from 150 generation Y and generation Z account holders from SBI, PNB and
BOBover a period of two months during August 2022 and September 2022.

Plan of analysis:
The collected data has been analysed using descriptive statistics. Lower the p value there is significant difference
between the perceptions of customers in the three banks. So P =0.5 or greater than 0.5 is not significant, P=0.2- 0.5
significant, p-0.00-0.2 is highly significant.

Sampling method:
Convenient sampling method has been adopted to collect primary data.

Limitations of the study:

The study is limited only to generation Y and generation Z customers of the selected nationalised banks namely SBI,
PNB and BOB in Bangalore urban district.

Profile of the banks:

State Bank of India (SBI):
State Bank of India is an India-based banking and monetary administrations organization. The Company's portions
incorporate Treasury, Corporate/Wholesale Banking, Retail Banking and Insurance Business. The Treasury section
remembers the whole venture portfolio and exchanging for unfamiliar trade agreements and subsidiary agreements.
The Corporate/Wholesale Banking section includes the loaning exercises of corporate records bunch, business
client's gathering and pushed resources goal bunch. The Retail Banking section involves retail branches, which
essentially incorporates individual financial exercises, including loaning exercises to corporate clients, and
furthermore incorporates office business and robotized teller machines (ATMs). The Insurance Business fragment
involves the aftereffects of SBI Life Insurance Co. Ltd. furthermore, SBI General Insurance Co. Ltd. It is engaged
with giving a scope of items and administrations to people, business endeavours, huge corporates, public bodies and
institutional clients.

Punjab National Bank (PNB):

Punjab National Bank (the Bank) is an India-based bank. The Bank's portions incorporate Treasury,
Corporate/Wholesale banking, Retail banking and other financial activities. The Treasury fragment remembers the
whole speculation portfolio and exchanging for unfamiliar trade agreements and subsidiary agreements. The Bank
gives different financial administrations, for example, agribusiness banking, retail banking, depository tasks,
corporate banking, trader banking, non-occupant Indian (NRI) administrations, store administrations, advanced
financial administrations and shared reserves. Its depositary administrations incorporate current stores, investment
funds stores, term stores, repeating stores, Capital Gain Account Scheme and Gold Monetization Scheme. Its credit
portfolio incorporates retail advances, horticulture advances, miniature, little and medium ventures (MSME) credits
and corporate advances. Its different administrations incorporate money the executives administrations, send
out/import finance, gold card conspire for exporters, doorstep banking administration and internet exchanging.

Bank of Baroda (BOB):

Bank of Baroda is taken part in giving banking and monetary administrations in India. Its portions incorporate
Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. Its geological section
incorporates Domestic Operations and Foreign Operations. It offers individual financial administrations, which
incorporate investment accounts, current records, and term stores. It gives a scope of computerized items, which
incorporates moment banking, for example, Internet banking, portable banking, cards, WhatsApp banking, advanced
signage frameworks (DSS), self-administration passbook printers, and mechanized teller machines (ATMs). It offers
a scope of credits, for example, home advance, individual credit, vehicle advance, fintech, training advance, and
gold credit. It gives shipper instalment arrangements, Baroda DigiNext Cash Management Services, BarodaINSTA,
SmartTrade, Bharat Bill Pay, BhimAdhaar Baroda Pay and Internet Payment Gateway. It has 8,185 branches and
11,535 ATMs and money recyclers upheld by self-administration channels.

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Profile, results, analysis and findings

Respondent profile
Gender profile of respondents:
Table 01:- Interest income earned by the banks.
Gender Frequency Percentage
Male 84 56
Female 66 44
Total 150 100
(Source: Primary data from survey), (Table compiled by author)

The data for the study was collected from 84 male respondents and 66 female respondents who are account holders
in the banks subjected for study.

Age profile of respondents

Age Frequency Percentage
18-27 54 36
28-40 96 64
Total 150 100
(Source: Primary data from survey), (Table compiled by author)

Among the total 150 respondents 54 belonged to the generation Z and the remaining 96 are from the generation Y.

Education profile of respondents

Education Frequency Percentage
Graduation 114 76
Post-graduation 36 24
Total 150 100
(Source: Primary data from survey), (Table compiled by author)

The study consisted of 114 graduates and 36 post graduate respondents.

Occupation profile of respondents

Occupation Frequency Percentage
Employment 54 36
Business 18 12
Profession 48 32
Services 30 20
Total 150 100
(Source: Primary data from survey), (Table compiled by author)

The study consisted of 54 employees, 18 businesspersons 48 professionals and 30 service sector personnel.

Annual income profile of respondents

Income in rupees Frequency Percentage
Below 50000 30 20
50 thousand to 1Lakh 12 8
1 Lakh to 2 Lakh 12 8
2 Lakh to 5 Lakh 30 20
5 Lakh to 10 Lakh 36 24
Above 10 Lakhs 30 20
Total 150 100
(Source: Primary data from survey), (Table compiled by author)

The above table indicates the annual income status of the respondents and majority of respondents are in the first,
third, fourth and fifth categories.

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Profile of the nationalised banks subjected to study

Bank Frequency Percentage
SBI 90 60
PNB 36 24
BOB 24 16
Total 150 100
(Source: Primary data from survey), (Table compiled by author)

Among the respondents 90 of them were the customers of SBI followed by 36 with PNB and 24 in BOB
respectively.

Results of the study:-

Descriptive statistics results for perception on mobile banking:

Std. Std.
Statements on perceptions towards mobile banking Mean Deviation Error
Using mobile banking saves my time 4.75 .512 .043
2.82 .982 .296
4.61 .750 .061
Perception on banking operations using mobile banking 4.73 .597 .051
2.91 1.136 .343
4.60 .803 .066
Perception on user Interface of mobile banking 4.29 .847 .072
2.45 1.036 .312
4.16 .984 .080
Perception on network connectivity while doing a transaction using mobile 4.12 .671 .057
banking 3.00 0.000 0.000
4.03 .709 .058
Perception on cost effectiveness of mobile banking as compared to visiting 4.69 .479 .041
banks 3.18 .603 .182
4.58 .627 .051
Perception on mobile banking due to its 24 X 7 availability 4.73 .479 .041
3.27 .647 .195
4.62 .620 .051
Satisfactionlevel of data and information security provided by the bank with 4.24 .677 .057
reference to mobile banking 3.09 .302 .091
4.15 .721 .059
Comfort level of customers while using new technologies like mobile 4.56 .526 .045
banking 3.27 .647 .195
4.47 .631 .052
Awareness level of customers about all the mobile banking services 4.06 .858 .073
2.18 .405 .122
3.92 .966 .079
Usage level of all the mobile banking services 3.68 .965 .082
2.18 .405 .122

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3.57 1.013 .083

(Source: Primary data from survey and analysed using SPSS), (Table compiled by author)

Descriptive statistics results for perception on internet banking:

Std. Std.
Statements on perceptions towards internet banking Mean Deviation Error
Using internet banking saves my time 4.74 .440 .037
4.09 .302 .091
4.69 .463 .038
4.45 .724 .061
Perception on banking operationsusing internet banking 3.09 .302 .091
4.35 .786 .064
Perception on user Interface of internet banking 4.40 .728 .062
3.18 .405 .122
4.31 .777 .063
Perception on network connectivity while doing a transaction using internet 4.12 .671 .057
banking 3.00 0.000 0.000
4.03 .709 .058
Perception on cost effectiveness of internet banking as compared to visiting 4.57 .590 .050
banks 3.09 .302 .091
4.46 .692 .056
Perception on internet banking because of its 24 X 7 availability 4.68 .673 .057
2.82 .982 .296
4.54 .848 .069
Satisfactionlevel of data and information security provided by the bank with 4.28 .742 .063
reference to internet banking 3.00 0.000 0.000
4.19 .789 .064
Comfort level of customers while using new technologies like internet 4.42 .712 .060
banking 2.55 .688 .207
4.29 .862 .070
Awareness level of customers about all the internet banking services 4.09 .959 .081
2.27 .647 .195
3.95 1.051 .086
Usage level of all the internet banking services 4.06 1.058 .090
2.09 .302 .091
3.92 1.144 .093
3.57 1.013 .083
(Source: Primary data from survey and analysed using SPSS), (Table compiled by author)

Analysis of the study using ANOVA:

Analysis on perception towards mobile banking:
Sum of Mean
Analysis of perception towards mobile banking Squares df Square F Sig.

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Using mobile banking saves my time Between 37.970 1 37.970 122.635 .000
Groups
Within 45.823 148 .310
Groups
Total 83.793 149
Perception on banking operations using Between 33.940 1 33.940 80.939 .000
mobile banking Groups
Within 62.060 148 .419
Groups
Total 96.000 149
Perception on user Interface of mobile Between 34.526 1 34.526 46.609 .000
banking Groups
Within 109.634 148 .741
Groups
Total 144.160 149
Perception on network connectivity Between 12.675 1 12.675 30.180 .000
while doing a transaction using mobile Groups
banking Within 62.158 148 .420
Groups
Total 74.833 149
Perception on cost effectiveness of Between 23.206 1 23.206 97.199 .000
mobile banking as compared to visiting Groups
banks Within 35.334 148 .239
Groups
Total 58.540 149
Perception on mobile banking due to its Between 21.547 1 21.547 89.092 .000
24 X 7 availability Groups
Within 35.793 148 .242
Groups
Total 57.340 149
Satisfaction level of data and Between 13.399 1 13.399 30.949 .000
information security provided by the Groups
bank with reference to mobile banking Within 64.075 148 .433
Groups
Total 77.473 149
Comfort level of customers while using Between 16.921 1 16.921 59.048 .000
new technologies like mobile banking Groups
Within 42.412 148 .287
Groups
Total 59.333 149
Awareness level of customers about all Between 35.864 1 35.864 51.445 .000
the mobile banking services Groups
Within 103.176 148 .697
Groups
Total 139.040 149
Usage level of all the mobile banking Between 22.765 1 22.765 25.904 .000
services Groups
Within 130.068 148 .879
Groups
Total 152.833 149
(Source: Primary data from survey and analysed using SPSS), (Table compiled by author)

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Analysis on perception towards internet banking:

Sum of Mean
Analysis of perception towards internet banking Squares df Square F Sig.
Using internet banking saves my time Between 4.308 1 4.308 23.113 .000
Groups
Within 27.585 148 .186
Groups
Total 31.893 149
Between 18.719 1 18.719 37.819 .000
Perception on banking operationsusing Groups
internet banking Within 73.254 148 .495
Groups
Total 91.973 149
Perception on user Interface of internet Between 15.020 1 15.020 29.689 .000
banking Groups
Within 74.874 148 .506
Groups
Total 89.893 149
Perception on network connectivity Between 12.675 1 12.675 30.180 .000
while doing a transaction using internet Groups
banking Within 62.158 148 .420
Groups
Total 74.833 149
Perception on cost effectiveness of Between 22.250 1 22.250 67.191 .000
internet banking as compared to Groups
visiting banks Within 49.010 148 .331
Groups
Total 71.260 149
Perception on internet banking because Between 35.192 1 35.192 72.271 .000
of its 24 X 7 availability Groups
Within 72.068 148 .487
Groups
Total 107.260 149
Satisfaction level of data and Between 16.716 1 16.716 32.527 .000
information security provided by the Groups
bank with reference to internet banking Within 76.058 148 .514
Groups
Total 92.773 149
Comfort level of customers while using Between 35.989 1 35.989 71.319 .000
new technologies like internet banking Groups
Within 74.684 148 .505
Groups
Total 110.673 149
Awareness level of customers about all Between 33.527 1 33.527 37.836 .000
the internet banking services Groups
Within 131.146 148 .886
Groups
Total 164.673 149
Usage level of all the internet banking Between 39.714 1 39.714 37.840 .000
services Groups
Within 155.326 148 1.050
Groups

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Total 195.040 149

(Source: Primary data from survey and analysed using SPSS), (Table compiled by author)

Findings:
The study has thrown light on some of the following aspects of online banking:
1. There is a significant difference between the banking service usage by generation Y and generation Z customers
in nationalised banks.
2. Both the generations perceive that usage of online banking reduces time.
3. Conducting online banking through mobile banking is much easier when compared to internet banking
conducted through computers for both generations.
4. User interface in mobile banking is highly significant when compared to internet banking due to easy
availability of smart phones rather than computers or laptops which was accepted by both the generations.
5. Both the generations have the same opinion about the network issues on banking through mobile and internet
banking.
6. Both generation Y and Z opined that online banking is cost effective when compared to personally visiting the
banks.
7. Mobile banking is the most preferred way banking when compare to internet banking due to anytime and
anywhere accessibility.
8. Both generations agree that the data and information security provided by mobile banking is much safer than
internet banking.
9. Both the generation are much more comfortable using new technologies in mobile banking rather than internet
banking.
10. Generation Y customers are much more tech savvy than generation Z customers and prefer to explore new
developments both in mobile and internet banking.

Suggestions:-
Based on the study conducted on online banking perception the following suggestions have been made:
1. Banks have to make efforts in creating awareness about benefits of using online banking for customers.
2. Special offers like cash back, loyalty points and other discounts can be offered to customers to promote loyalty
and satisfaction.
3. Effective redressal mechanism have to be installed to hear grievances of customers and timely solving of
problems associated with online banking.
4. Online banking soft wares have to be regularly updated and the same have to be brought to the notice of
customers and employees.
5. Efforts have to be made in reducing risks involved in banking and create awareness about safe banking habits
among all generations of customers.
6. The banks can also conduct free demo sessions on safe banking practices and also host informative videos and
posters about online banking.
7. Information about new developments in banking have to be informed through SMSs, mails and WhatsApp
chats.
8. Installation of chatbots can also be considered along with IVRS methods so that it will be more attractive for
younger generation.
9. Bank employees also have to be motivated to encourage customers in creating awareness about the possible
benefits of online banking.
10. Phishing, mobile frauds and cybercrimes are on rise today, therefore a robust and safe online banking system
needs to be put into place to build confidence in banking customers.

Directions for further research:

This study covers perceptions of online banking services given by nationalised banks in our country and can be
extended to the private banking sector as well. Indian private sector banking is equally competitive with nationalised
banks, and a study on customer perception in these banks will give a better picture of the status of online banking in
India in general and in the city of Bangalore in particular.

Conclusion:-
According to (World bank, 2020) report there are an estimated 14.7 bank branches in India for every 100,000

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adults providing this population with an efficient banking system is indeed a challenge. The Indian banking system
is a confluence of both public and private banking companies which have contributed to the development of the
country and its citizens. This can be further improved and maintained by bringing in new technologies like artificial
intelligence, branchless banking, neo banking etc. Further banks also need to create awareness about safe banking
practices among customers so that they can conduct their banking activities without fear.

References:-
1. Meharaj Banu, N. S. (2019). Online Banking and Customer: Evidence from India. Asia-Pacific Journal of
Management, 68-80.
2. Bencsik Andrea, H.-C. G. (2016). Y and Z Generations at Workplaces. Journal of Competitiveness, 90-106.
3. George, A. (2018). Perceptions of Internet banking users — a structural equation modelling (SEM) approach.
Sciance Direct, 357-368.
4. Goh MeiLing, Y. S. (2016). Understanding Customer Satisfaction of Internet Banking: A Case Study In
Malacca. Procedia Economics and Finance, 80-85.
5. Holzhauer, B. (2021, January 11). Forbes advisor. Retrieved from
https://www.forbes.com/advisor/banking/digital-banking-as-new-normal-2021-what-to-expect/:
https://www.forbes.com/advisor/banking/digital-banking-as-new-normal-2021-what-to-expect/
6. Luís Filipe Rodrigues, H. R. (2022). In Time of Pandemic How Generation XYZ Looks Digital Banking. AHFE
International , 458-466.
7. Mashali, A. N. (2020). Development of E-banking channels and market share in developing countries. Financial
Innovation, 1-19.
8. Nila Armelia Windasari, N. K. (2022). Digital-only banking experience: Insights from gen Y and gen Z. Journal
of Innovation and Knowledge , 1-11.
9. Rocío Carranza, E. D.-C.-C. (2021). e-Banking Adoption: An Opportunity for Customer Value Co-creation.
Frontiers in psychology, 1-10.
10. World bank. (2020). https://data.worldbank.org/indicator/FB.CBK.BRCH.P5?locations=IN. Washington DC:
http://www.worldbank.org/.
11. https://sbi.co.in/web/about-us
12. https://www.pnbindia.in
13. https://www.bankofbaroda.in.

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