MEIKTILA UNIVERSITY OF ECONOMICS

DEPARTMENT OF COMMERCE
MBF PROGRAMME (NAY PYI TAW CAMPUS)

CUSTOMER SATISFACTION ON E-BANKING

SERVICE QUALITY OF KBZ BANK LIMITED

KYAW KYAW LWIN

MARCH, 2022
 MEIKTILA UNIVERSITY OF ECONOMICS
DEPARTMENT OF COMMERCE
MBF PROGRAMME (NAY PYI TAW CAMPUS)

CUSTOMER SATISFACTION ON E-BANKING

SERVICE QUALITY OF KBZ BANK LIMITED

Supervised by: Submitted by:

Dr. Khin Marlar Maung Kyaw Kyaw Lwin

Professor MBF II - 18
Department of Commerce 1st Batch
Meiktila University of Economics (Nay Pyi Taw Campus)
 MEIKTILA UNIVERSITY OF ECONOMICS
MBF PROGRAMME (NAY PYI TAW CAMPUS)

This thesis is submitted to the Board of Examiners in partial fulfillment of the

requirements for the Degree of Master of Banking and Finance.

Submitted by:

Kyaw Kyaw Lwin

MBF II – 18
1st Batch
(Nay Pyi Taw Campus)
 This thesis entitled ―Customer Satisfaction on E-Banking Service Quality of
KBZ Bank Limited‖
submitted by Kyaw Kyaw Lwin (MBF II – 18)
has been approved by Board of Examiners in partial fulfillment of the requirements
for Master of Banking and Finance in Meiktila University of Economics.

Board of Examiners

………………………….
(Chairman)
Prof. Dr. Tun Aung
Rector
Meiktila University of Economics

…………………………. ………………………….
(Examiner) (Examiner)
Dr. Maw Maw Khin Dr. Winne Tun
Pro. Rector Professor and Head
Meiktila University of Economics Department of Commerce
Meiktila University of Economics

…………………………. ………………………….
(Examiner) (Examiner)
Dr. Nge Dr. Kyi Kyi Thant
Professor and Head Professor
Department of Management Studies Department of Management Studies
Meiktila University of Economics Meiktila University of Economics

………………………….
(Supervisor)
Dr. Khin Marlar Maung
Professor
Department of Commerce
Meiktila University of Economics
 ACKNOWLEDGEMENT

I would like to express my deepest gratitude to Professor Dr. Tun Aung, Rector
of Meiktila University of Economics, Professor Dr. Tin Win, Former Rector of Meiktila
University of Economics and Professor Dr. Maw Maw Khin, Pro-Rector of Meiktila
University of Economics for permitting me to study MBF and providing the valuable
knowledge and experiences during my study.
I am greatly thankful to Dr. Winne Tun, Professor and Head of Department of
Commerce and Program Director of MBF Programme (Nay Pyi Taw Campus) for her
kind guidance and comments. I also give great thanks to Dr. Nge, Professor and Head of
Department of Management Studies, for her kind guidance and excellent advices in
accomplishing my thesis. My thanks also go to Dr. Kyi Kyi Thant, Professor,
Department of Management Studies, for her valuable suggestions and comments to
fulfill requirements of my thesis.
I would like to show my gratitude to my supervisor Dr. Khin Marlar Maung,
Professor of Department of Commerce, Meiktila University of Economics, for her
patience, kind supervision, and valuable advices for completion of this thesis paper.
Finally, I would like to extend my gratitude to the responsible person, manager
and employees from respective departments of KBZ Bank Limited Nay Pyi Taw Branch
-1 who support the required information and the respondents who help me in answering
my questionnaires which are crucial to complete this thesis. I would like to thank all of
those who support me directly and indirectly in accomplishing this thesis.

Kyaw Kyaw Lwin

MBF II – 18
1st Batch
(Nay Pyi Taw Campus)

i
 ABSTRACT

This study mainly emphasizes on customer satisfaction on E-Banking service

quality of KBZ Bank. The objectives of the study are to identify the E-Banking service
quality provided by KBZ Bank and to analyze the customer satisfaction on E-Banking
service quality of KBZ Bank. In this study, both primary data and secondary data were
used. This study used descriptive method. A survey was conducted with 250 customers
who were selected by systematic sampling method at KBZ Bank Nay Pyi Taw Branch 1.
The primary data was collected by using structured questionnaires with five-point Likert
scale. The secondary data were collected form the relevant text books, previous research
papers, international research journals and related websites. The data collection period
took one month starting in October, 2021. The collected data were analyzed by mean
values, correlation and multiple regressions analysis. According to the correlation results,
there are strong correlation between five factors of E-Banking service quality
(accessibility, security, availability, ease of use and responsiveness) and customer
satisfaction. To analyze customer satisfaction on E-Banking service quality of KBZ
Bank, multiple regression analysis was conducted. According to the results of multiple
regression analysis, the five E-Banking service quality have significant effects on
customer satisfaction and responsiveness is the most significant factor to have effect on
customer satisfaction of KBZ Bank. KBZ Bank should effectively provide E-Banking
service quality to have more customers satisfaction.

Keywords: Bank Management, E-Banking Services, Customer Satisfaction, KBZ Bank

Limited, Nay Pyi Taw

ii
 TABLE OF CONTENTS

Chapter Particular Page

Acknowledgement i
Abstract ii
Table of Contents iii
List of Tables v
List of Figures vi

I Introduction 1
1.1 Rationale of the Study 3
1.2 Objectives of the Study 4
1.3 Methods of the Study 5
1.4 Scope and Limitations of the study 5
1.5 Organization of the Study 6

II Literature Review 7
2.1 Concept of Bank Management 7
2.2 Concept of E-Banking 8
2.3 E-Banking Service Quality 12
2.4 Customer Satisfaction 17
2.5 Previous Studies 18
2.6 Conceptual Framework 22

III E-Banking Service Quality of KBZ Bank 24

3.1 Profile of KBZ Bank 24
3.2 Organization Structure of KBZ Bank 25
3.3 E-Banking Service Quality of KBZ Bank 29

iii
 TABLE OF CONTENTS (CONT.)

Chapter Particular Page

IV Analysis of Customer Satisfaction on E-Banking Service Quality 33

of KBZ Bank
4.1 Profile of Respondents 33
4.2 Analysis of Customer Perception on E-Banking Service Quality 38
and Customer Satisfaction
4.3 Correlation between E-Banking Service Quality and Customer 47
Satisfaction
4.4 Multiple Regression Analysis of E-Banking Service Quality and 48
Customer Satisfaction

V Conclusion 52
5.1 Findings and Discussions 52
5.2 Suggestions and Recommendations 54
5.3 Needs for Further Research 56

References
Appendix

iv
 LIST OF TABLES

Table Particular Page

2.1 Findings from Previous Studies 19

4.1 Gender of Respondents 33
4.2 Age of Respondents 34
4.3 Marital Status of Respondents 34
4.4 Education Level of Respondents 35
4.5 Occupation of Respondents 36
4.6 Monthly Income of Respondents 36
4.7 Frequencies of Using E-Banking Services per Month 37
4.8 Years of Satisfying with KBZ 37
4.9 Reliability Analysis of Variables 38
4.10 Customer Perception on Accessibility 40
4.11 Customer Perception on Security 41
4.12 Customer Perception on Availability 42
4.13 Customer Perception on Ease of Use 43
4.14 Customer Perception on Responsiveness 44
4.15 Summary of Customer Perception on E-Banking Service Quality 45
4.16 Customer Satisfaction 46
4.17 Correlation between E-Banking Service Quality and Customer 47
Satisfaction
4.18 Multiple Regression Analysis of E-Banking Service Quality and 49
Customer Satisfaction

v
 LIST OF FIGURES

Figure Particular Page

2.1 Conceptual Framework of the Study 22

3.1 Organization Structure of KBZ Bank (Nay Pyi Taw Branch-1) 26
4.1 Conceptual Framework with Results 50

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 CHAPTER I
INTRODUCTION

Technology has succeeded in making various aspects of life easier for the
societies of today (Rust & Oliver, 1994). It has become a fundamental element in
improving the quality of services in general and E-Banking services in particular (Joseph
& Stone, 2003). E-Banking has become one of the essential banking services that can, if
properly implemented, increase customer satisfaction, and give banks a competitive
advantage. E-Banking service is said to rely on the exchange of information between
customers and providers using technological methods devoid of face-to-face interaction
(Darwish & Lakhtaria, 2011). Banking sectors in most developed countries have
pioneered the area of e-services and have been actively involved in its continuous
improvement. The objective was to try to meet the ever-changing needs and lifestyles of
modern clients. The usage of E-Banking services by bank clients has grown in the past
few years about 25% to 30% (―Bank to the Future,‖ 2013). Every bank is strategically
using advancements in E-Banking services for retaining and attracting clients, and are
therefore making large investments in implementing the latest E-Banking strategies to
maintain and augment their competitive advantage.
Historically, the launching of the first Automated Teller Machine (ATM) in
Finland marked the start of a new banking channel, which made Finland the leading
country in E-Banking, before it became widely used in any other developed and
developing countries (Sharma, 2011). More recently, E-Banking, or the distribution of
financial services via electronic systems, has spread among customers due to rapid
improvement in IT and through competition between banks (Mahdi & Mehrdad, 2010).
Luštšik (2004) defined E-Banking services as a variety of e-channels for doing banking
transactions through Internet, telephone, TV, mobile, and computer. Banking customers’
desires and expectations with regard to service are expanding, as technology advances
and improve. These days, the customer wants to operate and do their banking
transactions at any location without going to the bank, at any time without being limited
to the bank’s working hours, and to do all payments (purchasing, bills, and stocks) in a
fast and cost-effective way.
Consequently, financial services quality ought to be characterized by
independence, elasticity, freedom, and flexibility, to accommodate these desires (Khalfan

1
& Alshawaf, 2004). E-Banking is still mostly limited to the Internet and mobile
telephones. This is due in part to slow development of IT infrastructure in the country.
With that in mind, private banks are defining the concept as the ability to conduct
banking and financial transactions electronically via the Internet or mobile telephone
application. Technology has become an important part of today society. One of the huge
changes that emerged because of technology is how people spend their money cash is
obsolete and E-Banking services is the latest trend. With the improvement of technology,
E-Banking services will continue to grow even more common method of payment in
modern society. It is not shocking more advances secure style of cashless payment will
be seen by using biometric ID like fingerprints or retinal scan. Cashless economy has
received attention of public and created interest among customers. However, cash is only
the physical instantiation of money. The reason of cash has been a popular form of
exchange a long time is the tangibility that it provides to the entire idea of money.
The adoption of electronic payment will positively affect economic growth and
trade in country (Gambo, 2013). Some of the developments are characterized as mobile
ways of transferring money digitally, Short Message Service (SMS), Quick Response
(QR) codes. Emerging technologies and innovation play a vital role. In every sector at
the same time, digital identity will help to discuss the growing cyber security concerns,
connected with real-time payments. Many financial institutions are creating good
progress in developing new products and services to go for 100% financial inclusion.
Banks are collaborating with selected strategic partnership, identifying use cases and
technologies, facilitating the ecosystem and establishing governance and control to
deliver maturity four criteria – people, finance, business and technology. Banks are
partnering with technology companies in order to use sophisticated cashless services (Ali
Pay, We chat, etc.) around the world.
The economic development of Myanmar drives the development of financial
institution in Myanmar. Along with that, the competition in Myanmar’s financial
institution becomes forceful. KBZ Bank is partnership with Huawei Company and
develops a digital payment platform called KBZ Pay. The purpose of the development of
this digital platform is to substitute the traditional paper currency payment system with
digitalized cashless system. Myanmar banking sector also has been changing massively
with the aid of Information Technology. The benefits of cashless payment are many. It
will definitely reduce the amount of cash that people have to carry and reduces the risk
and the cost associated with it. It brings convenience, safety, fast and a smart wealth
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management. Nevertheless, people in Myanmar are still carrying a risky huge cash box
to make payment for buying a car or a house. Meanwhile, people in developed country
have been conducting electronic mean shortly.
Although Myanmar transforms its banking industry, Information Technology plays
major role in shaping industries and the Central Bank of Myanmar has played an
important role in contributing to the setup of cashless society. While the cashless
payments will create a positive impact not just for the people, but also for the business
and whole of the country, Myanmar is still purely 100% cash society. Since the physical
infrastructure for its financial system is broadly and underdeveloped, Myanmar has the
opportunity to start with a clean slate, and adopt best practices and approaches right for
its marketplace.

1.1 Rationale of the Study

Electronic banking services have become one of the mainstream banking
strategies globally. In spite of it numerous advantages there have been some challenges
which hinders it optimum usage both to the public and the bank themselves. The
complexities associated with E-Banking patronage are so large that a single study could
not discover all. In Late 1995 Myanmar May Flower Bank had been introduced by ATM
machine. However, it was not widely developed due to the insufficient communication
infrastructure, high investment cost of ownership, weakly cooperation among other
banks, lesser customer account and transactions. In 2003 banking crisis, central bank was
terminated some banking services.
After 2011, Myanmar banking sector is developing and digital banking
technology is one of the fastest developing channels in Myanmar banking sector. There
is so much for Myanmar to gain by moving away from cash to cashless payments
system. For shop owners, electronic payments will provide an enhanced buying
experience, reduced cash and check handling costs, and access to a global pool of
customers with secured payment. Customers are having problems with cash payment
system and maintenance of the cash. Cash payment system has risks in safety and takes
more time and costs for making actual cash payment. It also has restrictions such as the
payment can only be done during the working hours and the received cash has to be
maintained or deposited within the banking hours. Cash also needs to be checked and has
risks in cash count error.

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 E-Banking service is highly used in neighbor countries like China, India also in
small country Laos and it could solve many problems as mentioned above. It could be
done through mobile wallet by account transfer; saves time and cost, and reduce risks of
safety and cash count error. The payment can be done anytime, anywhere even the
invoice payer and the receiver is in different countries. The rate of adoption of E-
Banking service is positively and significantly affected by perception of customer. In
Myanmar, KBZ Bank is one of the biggest banks which are providing E-Banking service
in the country. This study analyzes the E-Banking service that helps and supports
customers and gets satisfaction by using in terms of KBZ E-Banking service. In
Myanmar, after 2012, E-Banking service became popular and useful for the making
quick payment among Myanmar citizens.
Most of the Myanmar people are using E-Banking service because it is more
convenience, it can be used 24/7. Moreover, E-Banking service can reduce traffic at the
bank’s counter, by reducing per transaction cost. Some of the E-Banking services are
developing faster in the banking industrial but on the other hand there have so many
problems such as ATM power breakdown, cash jam, card jam, hardware error, software
error and also slower action on the problem are facing around the world. KBZ Bank is
also facing so many kinds of problems concerning about E-Banking service and its
effects to customer satisfaction. This study examines the customer satisfaction on E-
Banking services provided by KBZ Bank in Nay Pyi Taw. KBZ Bank is the top private
banks in Myanmar and they have a lot of banking services, retails banking, international
banking, digital banking and etc. Hence, this study should encourage banks to focus on
the efficient use of E-Banking service with the effective management in requirement of
products, requirement of customers in terms of providing a range of banking service.
This study focuses in Nay Pyi Taw region because it has large population and most of
them are government staffs and workers that are highly used in E-Banking system. Data
are collected from 250 customers who are using KBZ Bank E-Banking system in Nay
Pyi Taw Region.

1.2 Objectives of the Study

The objectives of the study are
1. To identify E-Banking service quality of KBZ Bank
2. To analyze customer satisfaction on E-Banking service quality of KBZ Bank

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1.3 Methods of the Study
This study focuses on E-Banking service quality of KBZ Bank in Nay Pyi Taw.
Both primary and secondary data were used in this study. Primary data were collected by
using structured questionnaire with five-point Likert scale items. These items were
adopted from previous empirical studies. 250 customers who use E-Banking services of
KBZ Bank were selected as sample respondents. The questionnaire included three parts:
demographic factors of the respondents, respondent perception on E-Banking service
quality and the satisfaction level of respondents on E-Banking service quality of KBZ
Bank. The respondents were selected by using systematic sampling method. During data
collection period of October, 2021, the 5th customers who came to Branch 1 of KBZ
Bank located in Nay Pyi Taw from Monday to Friday from 10:00 am to 2:00 pm were
selected as the respondents. Secondary data were obtained from bank reports, Internet
website, relevant textbooks and other related publications.
In this study, descriptive statistics, correlation analysis and multiple regression
analysis were used. Descriptive statistics was used to describe the profile of the
respondents and their perception on E-Banking service quality and their satisfaction level.
The correlation coefficient was used to determine the correlation between independent
variables and dependent variable with direction and magnitude. Multiple regression
analysis was used to analyze customer satisfaction on E-Banking service quality of KBZ
Bank.

1.4 Scope and Limitations of the Study

The study only focuses on E-Banking service quality and customer satisfaction
KBZ Bank in Nay Pyi Taw. Although there are many E-Banking services, five main
service quality such as accessibility, security, availability, ease of use and responsiveness
are studied due to the nature of the organization. Among ten branches of KBZ Bank in
Nay Pyi Taw, only one branch is selected in this study and that branch is the main branch
of KBZ Bank in Nay Pyi Taw. Data collection period was in October, 2021.
The limitations of the study should be focused by further research. As one
limitation, the study selected one branch of KBZ Bank in Nay Pyi Taw. The other
branches in Nay Pyi Taw and other private banks located in Nay Pyi Taw are not
included in this study. Another limitation is that the study tested the effects of five E-
Banking service quality offered by KBZ Bank on customer satisfaction. The other

5
variables that create customer satisfaction such as supply change management, marketing
mix, promotion mix, etc., were not tested in this study.

1.5 Organization of the Study

This study includes five chapters. Chapter I is the introduction which includes
rationale of the study, objectives of the study, methods of study, scope and limitations of
the study and organization of the study. Chapter II describes literature review of the
study which contains concept of bank management and E-Banking, E-Banking service
quality, customer satisfaction and findings of previous studies. The conceptual
framework illustrated based on previous studies is also described in this chapter. Chapter
III includes profile and organization structure of branch (1) of KBZ Bank in Nay Pyi
Taw and E-Banking service quality provided by KBZ Bank in Nay Pyi Taw. Chapter IV
presents the analysis of the customer satisfaction on E-Banking service quality of KBZ
Bank. Finally, chapter V comprises findings and discussions, suggestions and
recommendations and needs for further research.

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 CHAPTER II
LITERATURE REVIEW

This chapter presents the theoretical background of the all the applied variables in
this study. It contains the important of bank management and E-Banking, E-Banking
service quality, customer satisfaction and previous studies on E-Banking service quality
and customer satisfaction. The conceptual framework of the study is described at the end
of this chapter.

2.1 Concept of Bank Management

Banks are the principal source of credit for millions of individuals and families
and for many units of government (school districts, cities, countries, etc. Banks are
among the most important sources of short-term working capital for businesses and have
become increasingly active in recent years in making long term business loans to fund
the purchase of new plant and equipment (Rose & Hudgins, 2013). The process of
managing the Bank's statutory activities is referred to as bank management. The special
purpose of management financial relations related to banking activities and other
relations, as well as the implementation of management functions in banking defines
bank management. The primary goal of bank management is to create an organic and
optimal system of interaction between the various components of the banking
mechanism in order to maximize profit.
The implementation of effective bank management procedures is significantly
responsible for successful optimization of the "profitability-risk" ratio in a bank's lending
operations. One of the characteristics of entrepreneurship culture in general and banking
culture in particular is the ability to take reasonable risks. There are four main parts of
bank management. These are liquidity management which constructs managing financial
obligations through liquidity or cash money, asset management relates to trying to obtain
high-interest rates from borrowers and reducing the risks of those loans, liability
management is about trying to find cheap funds and use them as a loan and capital
adequacy management is maintaining a minimum level of capital adequacy in the bank.
In the nearest future bank management will move in three parts as emergence of
fintech which increasingly consistent way in which the banking sector is being changed
by financial technologies. With a vast number of the world population has access to a

7
smartphone, nearly everything that has to do with banking activities will completely be
taken off the desk of a bank building. With a technology that allows the bank to track
customer behavior based on past action and location, managing products and services in
a way that they fit customer’s wants has never been easier.

2.2 Concept of E-Banking

New and developed information technology has an enormous effect in
developing more flexible and user-friendly banking services (Jahangir & Begum, 2008).
Nowadays, the electronic banking has received greater attention in the banking arena;
more to it, the clients are adapting the Internet based banking service.
Daniel (1999) defined electronic banking as the delivery of banks' information
and services by banks to customers through different delivery channels that can be used
with different electronic devices such as computer and a mobile phone with browser
software, telephone or digital television. Pikkarainen et al. (2004) defined electronic
banking as an "internet portal, by which customers can use different kinds of banking
services ranging from bill payment to making investments". Apart from withdrawals of
cash, electronic banking gives customers access to distinctive sorts of banking
transaction just by the snap of a mouse (Young, 2001). In fact, the use of electronic
banking as an option for the dissemination of financial institutions has turned into a
competitive tool rather than only an approach to accomplish competitive advantage of
preference with the appearance of globalization and fiercer rivalry (Flavián et al., 2004;
Gan & Clemes, 2006).
Timothy (2012) electronic banking alludes to the utilization of the Internet as a
remote conveyance channel for giving administrations, for example, opening a bank
account, transferring funds among diverse accounts and electronic bill presentment and
payment. This can be offered in two principal ways. A bank with physical offices can
build up a website and offer these services to its clients notwithstanding its customary
conveyance channels. Second, is to set up a virtual bank, where the PC server is housed
in an office that serves as the lawful location of such a bank. The banks offer their clients
the capacity to make deposits and withdraw funds by means of ATMs (Automated Teller
Machines) or other remote conveyance channels claimed by different foundations, for
which an administration expense is acquired. According to Ahasanul (2009), electronic
banking is modern delivery channel of banking services.

8
 Nowadays, the economy of many developed countries has been changed as
digital economy. Every kind of payment has been changed to cashless payment system
with the aids of information technology (IT) and accordingly the works of Internet
Services Providers in ICT industry become wider and deeper with advancement of new
computer devices. A computer linked to internet is of an extreme value and it can be
used for education, business and pleasure. Access to internet has been available since
January, 2002 in Myanmar. Myanmar can catch up easily with information technology
know how to complete in international market.
Banking is the blood of economy whose vitality signifies the health and
prosperity and information and communication technology (ICT) also has become the
heart of banking sector. The Myanmar government has made efforts in support of ICT
development through building the backbone of national infrastructure, establishing ICT
parks, Teleport Company, training and ICT labor force, organization laws, and renewing
the ICT master plan.
The banking industry has developed from traditional to cashless payment system.
Banks have to offer various banking services available through cashless payment system
such as internet banking, mobile banking, mobile wallet, QR payment and electronic
remittance. Cashless payments give wider and flexible range of financial products for all
types of customers. It also as a strategic opportunity that can be used to reduce time, cash
managing cost, risks of transportation cash. Therefore, banking industry is the first
industry which has recognized the benefits and potentials of the cashless system
(Hernandez & Mazzon, 2007).
Growing attention has also been paid to satisfaction in the financial sector as a
result of increased competition and recent technological developments. Given that
financial institutions offer similar banking products and services, many attempts to
justify differentiation and customer preference in terms of satisfaction with the services
customers receive (Lie´bana-Cabanillas et al., 2013). They also stated that electronic
banking, in particular, is one of the services that offers the greatest advantages to
financial customers. There are six forms of E-banking. They are Automated Teller
Machines (ATMs), telephone banking, personal computer banking, internet banking and
branch networking. The electronic applications of many financial institutions serve to
differentiate them from their competitors, while many customers choose a bank precisely
because of these services. Electronic banking offers customers a number of advantages

9
such as convenience, global access, availability, cost and time savings, transparency of
information, ability to choose and compare and customization.

2.2.1 Automated Teller Machines (ATMs)

Rose (1999) as cited in Abor, describes ATMs as follows: ―an ATM combines a
computer terminal, database system and cash vault in one unit, permitting customers to
enter the bank’s book keeping system with a plastic card containing a PIN or by
punching a special code number into the computer terminal linked to the bank’s
computerized records 24 hours a day‖. It offers a great deal of banking services to
clients. They are mostly situated outside the banks. They were introduced initially to
serve as cash dispensing machines. However, as a result of the rapid increase in
technology, ATMs go to the extent of given accounts balances and bill payments. Banks
use this electronic banking device, to gain competitive advantage. The combination of
automation and human tellers gives more productivity for the bank during banking hours.
It additionally spares time in customer service delivery as customers do not queue in
banking halls, and along these lines can invest such time spared into other productive
activities. ATMs are efficient method for yielding higher profitability as they accomplish
higher efficiency per duration of time than human tellers (a normal of around 6,400
exchanges for every month for ATMs contrasted with 4,300 for human tellers (Rose,
1999). Furthermore, ATMs ability to work after banking hours provide continue
productivity.

2.2.2 Telephone Banking

"Telephone Banking (Telebanking) can be considered as a form of remote or
virtual banking, which is essentially the delivery of branch financial services via
telecommunication devices where the bank customers can perform retail banking
transactions by dialing a touch-tone telephone or mobile communication unit, which is
connected to an automated system of the bank by utilizing Automated Voice Response
(AVR) technology‖ (Balachandher et al, 2000). As indicated by Leow (1999), telephone
banking offers several advantages for customers and banks. It provides convenience,
easy access and customers also saves time. On the part of the banks telephone banking
services are less costly than those of branch-based services. It has almost all the benefits
of ATMs, except that it lacks the productivity generated from cash dispensing by the
ATMs. Customers get access to banking services at their various offices and homes.
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2.2.3 Personal Computer Banking
Personal Computer Banking is a sort of service which provides the bank's clients
to access their banking data through a restrictive system, through software installed on
their personal PC. By having access, the customer can perform a great deal of banking
services. The significance of PC proficiency has brought about expanding the utilization
of PCs. This positively bolsters the development of PC banking. Customers have access
banking services even at their homes and offices (Abor, 2005).

2.2.4 Internet Banking

According to Essinger (1999) internet banking is: ―to give customers access to
their bank accounts via a web site and to enable them to enact certain transactions on
their account, given compliance with stringent security checks‖. To the Federal Reserve
Board of Chicago‟s Office of the Controller of the Currency (OCC) Internet Banking
Handbook (2001), Internet banking is described as ―the provision of traditional (banking)
services over the internet‖. Internet banking provides convenient and flexible services to
customers. It enables customers to transact almost all their banking transactions online.
One could check accounts, query the bank and also transfer funds to other people on
different accounts, it is the most financially savvy innovative method for yielding higher
profitability. Another feature of internet banking is that, it gives a 24/7 access to
customers.

2.2.5 Branch Networking

Networking of branches can be depicted as the computerization and between
associating of geographically diverse stand-alone bank branches, into a framework of
Wide Area Network (WAN) for making and sharing of solidified client data (Abor,
2005). It provides quick inter- branch transactions and hence the effect of time and
distance are eliminated. Almost all banks in Ghana have various branches across the
country networked. Regardless of where a customer opened his or her accounts, he or
she can access it anywhere.

2.2.6 Mobile Banking

A very recent addition to the electronic banking products in Ghana is the mobile
banking. Literally this is banking on the mobile phone. Mobile banking is a system or
platform in which customers are automatically updated on any changes in their account.
11
These changes are may come in the form of account debits and credits or any charges to
the account. All it needs for mobile banking is a mobile phone with a well-functioning
text messaging system. SMS banking falls under this category. This system uses short
text messaging system to inform customers of their account (Chovanova, 2006).

2.3 E-Banking Service Quality

Many Service organizations have adopted modern technology to reduce costs and
enhance customer service quality, delivery, and standardize core service offerings. The
advent of information systems has influenced many industries. One of these is the
banking industry. Information systems have made banks more efficient in performing
their tasks and extending banking services over the internet (Salihu et al., 2019).
Investment in internet banking increases banks profit by reducing costs and non - interest
income, which will have a direct impact on increased asset returns and equity returns.
(Sinkney, 1998). Various banking services are available online, such as: ATMs, E-
banking, mobile banking, SMS/Phone banking, self-service machines, etc. Banks can
create higher banking efficiency by enabling customers to open accounts, make deposits,
transfer funds across accounts and make payments entirely online (Takieddine & Sun,
2016).
Electronic banking has therefore become an essential service to secure client
loyalty by ensuring greater customer satisfaction and building stronger ties with them.
The quality of electronic banking services become an important area of attention among
the researchers and banks managers due to its strong influence on the business
performance, lower costs, customer satisfaction, customer loyalty, and profitability (Seth
et al., 2004). According to Jalal et al. (2011), internet technology has changed the design
and the way of delivering the financial services and as a result the banking industry has
made continuous innovations - especially in the field of communications and information
technology - that ultimately led to the emergence of the idea of what is known as the
"online banking". The study tested the role of E-Banking services to create customer
satisfaction. As E-Banking services, accessibility, security, availability, ease of use and
responsiveness are selected and tested their effect on customer satisfaction in this study.

2.3.1 Accessibility
Accessibility is defined as the ability of users to access information and services
from the web, this dependents on many factors. They include: the content format; the
12
user's hardware, software and settings; internet connections; the environmental
conditions and the user's abilities and disabilities (Godwin-Jones 2001; Hackett &
Parmanto, 2009). Rice and Shook (1988) stated that accessibility consists of four
dimensions: accessibility of computer equipment, access to information, system
reliability and ease in learning the language of use. The term web accessibility generally
relates to the implementation of website content in such a way as to maximize the ability
of users with disabilities to access it. Saeednia and Abdollahi (2012) demonstrate how
usability has a positive, direct relationship with trust, implying different behaviours
depending on the level of ease of access that a user perceives toward electronic banking
services.
The techniques and approaches that create more accessible web pages for people
with disabilities also address many other access issues such as download speed and
discoverability (Hackett et al., 2004; Hackett & Parmanto, 2009). Yang and Jun (2002)
redefined the traditional service quality dimensions in the context of online services, and
suggested an instrument consisting of seven online service dimensions (reliability,
access, ease of use, personalization, security, credibility, and responsiveness). Joseph et
al. (1999) considered banking service quality with respect to technology use, such as
ATMs, telephone, and the internet and identified six dimensions. They were
convenience/accuracy; feedback/complaint 24 management; efficiency; queue
management; accessibility; and customization. Therefore, accessibility has positive
effect on customer satisfaction.

2.3.2 Security
One of the factors customers will take care seriously is security, due to the
security of customers’ personal privacy and information is so important for any
customers to do business with any banks. As the amount of products and services offered
via the Internet grows rapidly, consumers are more and more concerned about security
and privacy issues. The importance of security and privacy for the acceptance of online
banking has been noted in many banking studies. According to Agarwal et al. (2009),
customer expectation for product and service provided by banks regarding security,
precision, doing transaction fastly, using system easily, users' participation and
satisfaction are the most significant concept of quality of service that perceived of
internet banking. Based on Marakarkandy et al. (2017), security and privacy with another
five factors such as a data on internet banking, recognized enjoyment, quality of service,
13
recognized usefulness, learned the ease of use and all these factors has the impact on
TAM model. According to Jo and Mo (2018), regarding all benefits and availability of
all service on internet banking, there is some effects that face to internet banking
adoption and these challenges include expectation risk in security (privacy) risk and
cyber fraud (cybercrime).
Gomachab and Maseke (2018) on their article they determined these factors of
mobile banking that affecting on customers’ satisfaction also those factors are trust,
security, ease of use, cost of the transaction, convenience and 27 responsiveness.
Determine of the level of satisfied comes after the process of decision by customer.
Hoehle et al. (2012) found that customer expectation for buying a product and service of
a banks related to many factors and security one of them, security can be the reason
behind the customer's decision, because security is one of the major factors influencing
customers expectation of using internet banking system, also in a situation the
individuals feel the electronic system via bank is secure and safe they will be a
convenience and satisfied to use internet banking by the secure banks. Zhou (2012)
explained a providing internet banking has been huge convenience and relexable to
customers, also using mobile banking within internet banking service has the impact to
be uncertain and doubt due to the network server that will be the target to hack by hacker
and many viruses such as Trojan horse and these problems has a negative effect on
customer’s decision and this determinants increase the customers’ concern about the
security of transactions and decrease a trust for mobile banking.

2.3.3 Availability
Electronic banking provides higher degree of convenience that enables customers
to access electronically at all times and places. Apart from that, the ease of access of
computers is perceived as a measure of relative advantage (Polatoglu & Ekin, 2001).
Gerrard and Cunningham (2003) revealed that there are some service quality
determinants that are predominantly satisfiers and others that are predominantly
dissatisfies with the main sources of satisfaction being attentiveness, responsiveness,
care and friendliness. The main sources of dissatisfaction are integrity, reliability,
responsiveness, availability and functionality.
According to Ainscough and Luckett (1996), the provision of customer
interactivity is an important criterion that attracts users in the delivery of E-banking.
Gerrard and Cunningham (2003) also identify other factors of paramount importance in
14
ensuring the success of E-banking, i.e., the ability of an innovation to meet users' needs
using different feature availability on the web site. Additionally, a system that is difficult
to use is less likely to be perceived useful, because perceived benefit might be out-
weighed by the effort of using the applications associated with the system (Davis, 1989).
For instance, the provision of interactive loan calculators, exchange rate converters, and
mortgage calculators on the web sites draw the attention of both users and non-users into
the bank's web site.

2.3.4 Ease of Use

Ease of use is defined as how easy it is for customers to use a website and
applications. All websites and applications should be user-friendly, making it easy to
search, navigate and use. Ease of use, as an important determinant of online banking
quality, has been highly rated in website quality measurement and has been noted by
some researchers (Zeithaml et al., 2002; Fassnacht & Koese, 2006). Ease of Use has
been studied extensively in the context of IT adoption and diffusion and it is one of the
important measures for user satisfaction, system adoption, or IS success (Moore &
Benbasat, 1991). The current web-based variant of electronic banking is the latest of
several generations of systems: Automated teller machines (ATMs) were the first well-
known machines to provide electronic access to customers of retail banks. The
usefulness and ease of use have been found to have a strong influence on the use of
electronic banking services (Davis, 1989).
According to Mathieson (1991), the perceived ease of use is the consumer’s
perception that banking on the internet will involve a minimum of effort. It has been
found that ease of use is one of the main factors for electronic banking customer
acceptance. (Daniel, 1999; Sohail & Shanmugharn, 2003; Yiu et al., 2007). Because
Internet E-Banking is performed on the screen of a computer-based device, it should be
easy for non-experts of computers to use. In this connection, it might be considered in
terms of clear and logical presentation of information, simple and intuitive search and
navigation procedure, and the provision of instruction to use the services. Similarly,
Consult (2002) noted that perceived ease of use refers to the ability of consumers to
experiment with a new innovation and evaluate its benefits easily.
Davis (1989) stated that individuals could also be involved in the cognitive trade-
off process between the efforts required to successfully apply the technology in front of
the benefits and advantages attained by using such technology. The ease of use of E-
15
Banking services allows greater movement of users to other banks and even in
alternation with other more traditional forms of the banking system, hence reduces the
long-term commitment of the client and their loyalty (Sarel & Mamorstein, 2003).
Perceived ease of use can also be described as people’s perception about the use of
technology that it would be without mental stress and people would not need to allocate
much of their time and efforts while using the technology and it influences the viewpoint
of an individual towards using a technology (Rauniar et al., 2014). Ease of use is an
important determinant for the customer preferring the internet banking (Beer, 2006). In a
study conducted by Karjaluoto et al. (2002) reported that ease of use of innovative
product or service as one of the three important characteristics for adoption from the
customer's perspective. The user friendliness of domain names as well as the navigation
tools available in the web-sites is an important determinant for ease of use.

2.3.5 Responsiveness
According to Madu and Madu (2002), responsiveness is the readiness to support
the bank’s customers and deliver them a rapid service. This kind of service can be
shaped into four forms. Responsiveness defined as the willingness or readiness of
employees to provide service. It involves timeliness of services (Parasuraman et al.,
1985). It is also involves understanding needs and wants of the customers, convenient
operating hours, individual attention given by the staff, attention to problems and
customers’ safety in their transaction (Kumar et al., 2009). Responsiveness means being
prompt and willing to serve the customer, empathy involves caring and personalized
attention as well as understanding customer needs and convenient access to the service
(Pollack, 2008).
An example of responsiveness is employees of a service provider telling
customers exactly when a service will be performed and never being too busy to respond
to customer requests. Keeping customers waiting, particularly for no apparent reason,
creates unnecessary negative perceptions of quality (Fitzsimmons & Fitzsimmons, 2011).
They also stated that if a service failure occurs, the ability to recover quickly and with
professionalism can create very positive perceptions of quality. E-Banking system can
control and operate the service properly. Second, the E-Banking channels can guide
customers toward proceeding properly in case of any failing operations. Third, it can also
cover a rapid solution for any possible error in E-Banking transactions. Finally, it can
support the customer’s questions with on-the-spot response.
16
2.4 Customer Satisfaction
The concept of customer satisfaction has many definitions generated by different
researchers. Westbrook and Oliver (1981) have one of the commonly used definitions of
customer satisfaction which claims that customer satisfaction is a mental state which
results from customers’ comparison of expectations prior to a purchase with the
performance perceptions after a purchase. The comparison is transaction specific and
Halstead et al. (1994) mentioned it as an evaluative judgment concerning a specific
purchase selection whether it met the customers’ expectations or not. Grönroos (1984)
studied the banking industry; the consumer satisfaction was scaled by technical and
functional prospects. Technical deals with the quality control procedures that might
produce the core benefits of the services passed on. Westbrook and Oliver (1991)
defined customer satisfaction as a mental state which results from customers’
comparison of expectations prior to a purchase with performance after a purchase.
Satisfied customers are also likely to tell others about their favorable experiences and
thus engage in positive world of mouth advertising.
According to Churchill and Surprenant (1982), customer satisfaction is a
summation of satisfaction with various attributes of a product which refers to the fact
that satisfaction with ATM banking will come from the satisfaction with the performance
of its attributes. Halstead et al. (1994) states that customer satisfaction is a transaction
specific effective response from customers’ comparison of product performance to some
pre purchase standard. Customer satisfaction refers to a short-term positive attitude that
can change owing to various circumstances. As customers face a growing range of
products and services, their choices are mainly determined based on their perception of
quality, service and value, thus, companies need to understand the determinants of
customer satisfaction. Increased customer satisfaction leads to behavioral outcomes such
as commitment, loyalty, intention to stay and post purchase behavior.
Cash less payment service is not a relatively one-way marketing activity and this
hence makes measuring online banking service and its quality a complex undertaking.
Key dimensions were information content, security and privacy and design (Ranganathan
& Ganapathy, 2002). Bank customer satisfaction is regarded as banks fully meeting the
customers expectation; it is also said to be a feeling or attitude formed by bank customer
after service, which connects the various purchasing behavior (Jamal & Naser, 2002).
Bruhn, (2003) defined satisfaction as an assessment based on experience on how for
expectations of overall functionally of services were fulfilled. Customer satisfaction has
17
received wide attention as an important variable in business strategy in a very dynamic
and competitive.
Pairot (2008) defined customer satisfaction as the company's ability to fulfill the
business, emotional and psychological needs of its customer. Paul et al. (2016) indicate
that customer satisfaction is the number of customers, or percentage of total customers,
whose reported experience with a firm, its products, or its services (ratings) exceeds
specified satisfaction goals and satisfying a customer involves tackling the specific fears
and concerns of the customer, the primary of which, scholars have revealed, are data
security risks. Achieving customer satisfaction is of particular importance because
empirical studies have shown that customer satisfaction is an antecedent of customer
retention (Paul et al., 2016) which gives an organization increased sales, market share
and improved corporate image. Therefore, the development of cashless payment system
is expected to contribute towards the concept of customer satisfaction with banks.

2.5 Previous Studies

Several researchers conducted studies related to E-Banking service quality and
customer satisfaction. Previous researchers discussed E-Banking service quality and
customer satisfaction from different points of views which can be seen in the following
Table (2.1).

18
 Table (2.1) Findings from Previous Studies
Sr. No. Author (Year) Independent Variables Dependent Variable Findings
1 Kawamala Accessibility Customer Satisfaction This study found that accessibility, convenient and
(2013) Convenience security have positively significant effect on
Privacy customer satisfaction.
Security (Azania Bank Ltd., Tanzania)
2 Kavitha (2017) Ease of use Customer Satisfaction The finding is that ease of use performance, and
Performance security have positive significant effect on customer
Security satisfaction.
Reliability (Coimbatore, India)
3 Abdalla (2018) Trust Customer Satisfaction Security, Assurance and reliability have positive
Risk significant effects on customer satisfaction.
Security (A case study of Sulaymaniyah City, Iraq)
Assurance
Reliability
4 Mchomba (2018) Security Customer Satisfaction This study found that accessibility, time saving and
Availability availability have positively significant effect on
Accessibility customer satisfaction.
Ease of Use (Tanzania banking industry in East Africa)
Time factor

19
 Sr. No. Author (Year) Independent Variables Dependent Variable Findings
5 Sharma et al. Credibility Customer Satisfaction This study found that credibility, responsiveness,
(2020) Security security and communication have positively
Communication significant effect on customer satisfaction.
Competence (Banking industry in India)
Reliability
Responsiveness
Access
Source: Own Compilation based on Previous Studies

20
 Kawamala (2013) conducted the study on E-Banking and customer satisfaction in
Tanzanian banks; the case of Azania Bank LTD. The objective is to investigate the
factors which enhances the adoption of E-Banking in Tanzania, the Customers
perception on E-Banking in Tanzania, the impact of E-Banking functionality on the
satisfaction outcomes, risks of using of E-Banking in Tanzania, the accessibility of E-
Banking to bank customers in Tanzania, on whether E-Banking is convenient to ordinary
bank customers in Tanzania and whether E-Banking is secure enough for E-Banking
customers in Tanzania. Customer satisfaction is dependent variable. In this study, the
results indicated that accessibility, convenient and security have positive significant
effect on customer satisfaction.
Kavitha (2017) analyzed the relationship between E-Banking dimensions and
customer satisfaction on E-Banking in India. The dependent variable is Customer
Satisfaction. The researcher conducted survey that identify the influences of four
dimensions (Ease of use, Performance, Security, and Reliability) in banking service
environments in India to identify customer satisfaction on the E-Banking services offered
by banks with special reference to online banking. The findings characterized four main
dimensions have a positive influence on customer satisfaction.
Abdalla (2018) tested the impact of E-Banking services on customer satisfaction
of banking industry in Iraq. Customer satisfaction is a dependent variable including the
dimensions of service quality such as customer expectation, reliability, assurance,
customer loyalty, risk, trust and security in another hand the independent variable is
internet banking including ATM, web banking, mobile banking and POS machine. The
result revealed that the internet banking has a positive impact on customer satisfaction
significantly.
Mchomba (2018) examined the influence of E–Banking system on customer
satisfaction in Tanzania banking industry in East Africa. This study presents the impacts
of electronic banking on customer satisfaction in Tanzania banking industry; the case
study of NMB bank. The study investigated the impacts of electronic banking on
customers‟ satisfaction in Tanzania banking industry, the effects of E-Banking services
on customer satisfaction, the benefits associated with electronic banking usage as well as
the challenges associated with electronic banking usage. The study revealed different
impacts affecting the bank customers using E-Banking services and products, such
impacts were accessibility, time factor, availability, user friendly and security. This study

21
found that accessibility, time saving and availability have positively significant effect on
customer satisfaction.
Sharma et al. (2020) studied relationship between E-Banking services and
customer satisfaction of banking industry in India. This study found that credibility,
responsiveness, security and communication have positively significant effect on
customer satisfaction. The main objective of this paper is to measure the impact of E-
Banking service quality on customer satisfaction. Primary data method is used to collect
data by using the interview method over 504 respondents. The random sampling
technique has been taken up for the survey by keeping due care for the availability and
easiness of the customers. The Multiple regression technique has been employed to
measure the effect to service quality dimension on the customer satisfaction. This study
examined the relative strength of each dimension affecting customer satisfaction.

2.6 Conceptual Framework

The conceptual framework of the study is shown in Figure (2.1). The variables
considered in the framework are explained as follows.

Figure (2.1) Conceptual Framework of the Study

Independent Variables Dependent Variable

E-Banking Service Quality

Accessibility

Security

Availability Customer Satisfaction

Ease of Use

Responsiveness

Source: Own compilation based on previous studies

22
 This study constructs the conceptual framework of the study which analyzes the
effects of E-Banking service quality on customer satisfaction in KBZ Bank located in
Nay Pyi Taw. E-Banking service qualities are accessibility, security, availability, ease of
use and responsiveness which are the independent variables and customer satisfaction is
the dependent variable of the study. The proposed conceptual framework is tested by
using collected primary data to prove the objectives of the study. The results are
expected to explore the important role of E-Banking service quality to upgrade customer
satisfaction.

23
 CHAPTER III
E-BANKING SERVICE QUALITY OF KBZ BANK

This chapter describes the profile of KBZ Bank, the mission, vision, objectives
and core value of KBZ Bank, the organizational structure of KBZ Bank, the E-Banking
service quality provided by KBZ Bank.

3.1 Profile of KBZ Bank

The KBZ was first founded as a private bank on 1st July 1994 with the approval
of the Central Bank of Myanmar Law and the Myanmar Bank Financial Institution Law
in Taungyi, Southern Shan State. The name Kanbawza refers to the traditional name of
the Shan State, the ethnic minority state of the Union of Myanmar. The bank originally
catered to the local population of Taungyi and opened KBZ Bank Branch No. 1 in
Taungyi as the very first branch of KBZ Bank. It is now the biggest and most reliable
branch in all branches of KBZ Bank. After 3 January 2000, KBZ Bank has carried out
banking activities under the leadership of the Chairman of KBZ Bank and has become
the leading bank for private banks in Myanmar.

(i) Background Information

KBZ Bank is one of the companies of the KBZ Group of Companies, including
Mining & Gems, Airlines, Hotels, Transportation, Factories, Plantation, Hospitals, etc. In
April 2000, KBZ relocated its headquarters to Yangon, Myanmar's economic capital.
The address of KBZ Bank is No.615/1, Pyay Avenue, Kamayut Township, Yangon and
KBZ Bank's website is www.kbzbank.com.mm. Beginning with the initial capital of
MMK (477) million in 1999, KBZ Bank increased the assets of MMK (69) billion in
2012. Maintaining itself as a leading bank with the largest network of branches and the
largest customer base with one third of the market share, KBZ has grown its network to
more than 500 branches (including mini banks) across the country with a high credibility
as of October 2018. Under the direction of the Central Bank of Myanmar, more than 500
branches have been opened across the country with nearly 1,200 ATMs, and over 200
currency exchange counters and over 60 mini branches have been expanded across the
country in 2018. KBZ Bank has more than 18,000 employees in October 2018. Not only

24
nationalities but also expatriates (foreigners) are working in the work force of KBZ
Bank.

(ii) Mission, Vision and Goals of KBZ Bank Limited

KBZ Bank, a branch of the Kanbawza Group of Companies, follows the core
values of honesty enthusiasm, mutual trust and respect, integrity leadership and
dedication set by the Chairman for the growth of the bank in the interests of the national
economy. KBZ Bank's slogan is "STRENGTH OF MYANMAR." The Bank's dream is
to become the best-managed bank in the world. That's just what Myanmar needs and
deserves.' And it's trying to get customer satisfaction through the mission statement, "To
improve the quality of life through banking," with its core value, "KBZ Bank is guided
by a belief and a culture that runs throughout the entire organization: to be good to
people and to do the right thing. That's why we are guided by our three ideals–Metta,
Thet Ti, Virya–loving kindness, perseverance and courage.
Their goals are-
1. To implement Small and Medium Enterprise
2. To be a steady and competitive bank in private banking sector
3. To be a biggest bank which own the most branches network among other private
banks of Myanmar.

3.2 Organization Structure of KBZ Bank

The first branch in Nay Pyi Taw of KBZ Bank was operated since 2012. It is
located at No (1), Bank Ward, Ottarathiri Township, Nay Pyi Taw. At present, it has 120
employees in six departments at Nay Pyi Taw Branch-1. There are six departments under
KBZ Bank Nay Pyi Taw branch-1. They are Administration Department, Loan
Department, Cash Department, Reception Department, Remittance Department and IT
Department. Each department of KBZ Bank Nay Pyi Taw Branch-1 has a role to play in
delivering quality of services to its customers. The organization structure of KBZ bank
Nay Pyi Taw Branch-1 is depicted in Figure (3.1).

25
 Figure (3.1) Organization Structure of KBZ Bank (Nay Pyi Taw Branch-1)

Branch Manager

Assistant Branch
Manager

Admin and HR Reception Remittance

Loan Department Cash Department IT Department
Department Department Department

Source: KBZ Bank Nay Pyi Taw Branch 1 (October, 2021)

26
 There are many departments and branches in KBZ Bank. Each department has
Head of the department and each branch has branch manager. KBZ Bank Limited is
established a board of director (BOD) and senior management team. There is one chief
executive officer (CEO), and three-deputy chief executive officer (DCEO) at KBZ Bank.
According to Figure (3.1), six departments in KBZ Bank Nay Pyi Taw Branch-1 perform
the tasks to provide the services to customers. The functions of each department in KBZ
Bank Nay Pyi Taw Branch-1 are as follows:

(1) Administration and Human Resources Department

Human resources staffs are responsible for recruiting, selecting, training,
compensation and benefits. Daily attendance and leaves of employees are also checked
by this department.

(2) Loan Department

Loan department follows the current policy of the Central Bank. Central Bank
allows KBZ Bank to receive land and building, government bonds, saving deposit and
mortgage and pledge as collateral to secure the loan. It involved SME Loan and Two
Step Loan. KBZ offers Myanmar citizens loans and overdrafts, in order to increase
business growth and to develop working capital within the country. A typical term of
loan is four years. It is thereafter renewable on a yearly basis. Loan interest is paid on the
total amount approved and overdraft interest is paid on the amount used. These
properties are accepted as collaterals: immovable properties, government bonds and
securities, machinery, fixed deposits or savings deposits.

(3) Cash Department

Cash department is the most important part of General Banking. Cash
department is placed in a branch from where manager can watch everything from his
table either clients or the vault. It is the most important department of the bank since
from desk cash department has direct interaction with customers. Therefore, the
responsibilities of the cash department are handling currency (daily cash in and out) from
customers and providing direct service to customers in polite and respectful attitude.

27
(4) Reception Department
Reception department service the responsibilities of projecting the bank's services
and products in a way that attract people for banking. Reception staffs are the only
person through which customer service can be judged due to being the first person to
contact and approach. Whether a customer is calling or visiting the bank, it is the
reception staff with whom the customer will speak and meet first. Based on the reason of
call and visit, the customer will be directed by the reception staffs to the concerned
department/personnel. Although the staffs may not have the complete detail of
customers' accounts, they are in a position to answer basic or general queries. The bank
reception staffs are the one who can turn customers’ experience of banking with the
financial institution into positive or negative.

(5) Remittance Department

Remittance department is responsible for overseeing the domestic remittance
transactions from intra-bank and inter-bank funds transfers through branches and digital
products, ensuring effective and efficient process in order to bring maximum profits to
the organization. To facilitate fast and secure transfer of funds, KBZ Bank offers
international remittance service to students going abroad for the study, patients going
abroad for medical treatment/check-up, foreigners and those working overseas.
Remittance methods are inward remittance like worker’s remittance, Western Union and
commercial remittance. Outward Remittance is telegraphic transfer and other remittance.

(6) IT Department
KBZ Bank has modernized their services with the facilities of computer and
electronic equipment. The electronics revolution has made it possible to provide ease and
flexibility in banking operations to the benefit of the customer. Therefore, IT Department
is essential part of the KBZ Bank. This department takes care of the IT infrastructure and
provides IT services to the employees of the KBZ Bank, supervises and supports the
information systems used by them and implements IT development projects. The
department also maintains constant IT system security, analyses IT security incidents,
carries out IT system security checks, as well as keeps in contact and coordinates actions
with head office of KBZ Bank and other regional KBZ Banks.

28
3.3 E-Banking Service Quality of KBZ Bank
KBZ Bank offers a range of Electronic Banking products and services such as
ATMs, Personal Banking, Online Banking, Branch Banking, and Mobile Banking and so
on. Electronic payment Service, Domestic and International Remittances and Mobile
Payment, Meter Bill Services, Pay Roll Services, Visa Card, Master Card Acquiring and
Issuing such as accounts, Myanmar Payment Union (MPU) ATM card accounts, and
technology driven alternate delivery Channels for customers every stage of life by using
core banking system. KBZ Bank operates the CBM Net system, Real Time Gross
Settlement System (RTGS) which is the internet for doing book to bank fund transfer
customer from one bank transfer to another bank customer. KBZ Online Banking offers
a great way for viewing account balances & transactions, transferring money, and paying
bills from the comfort of your home and office.
Online banking is simple, secure, and convenient to use anytime anywhere,
giving customer complete control over finances. Customers can manage finances 24/7
anytime anywhere and while on the go. Customers are spending less time on banking
means having more time for other activities. People can make bills payment from the
comfort of anywhere without having to queue. Customers need only set-up scheduled
and standing instructions for recurring payment transfers. Online banking system is a
system which has multi-level authentication system with enhanced security features to
authenticate customer identity and protect from any unauthorized transactions. KPay is a
mobile wallet platform powered by KBZ Bank, one of the most trusted banks in
Myanmar. Customers use KPay app with just a few taps on phone, whether wish to pay,
transfer, cash in or cash out.

3.3.1 Accessibility
Accessibility of Electronic banking has to do with the ease with which customers
have access to financial tools, their accounts, ease of making payments from their
accounts and access to money available in the accounts using various digital channels
namely, online banking facilities, ATMs, POS terminals, mobile banking to mention but
a few. Accessibility defines how these channels make a meaningful experience to the
customers in terms of access to their funds, access to banking facilities and services and
feedback.
In order to assure the KBZ Bank website is an accessible experience for all, KBZ
Bank follow the Web Content Accessibility Guidelines (WCAG) 2.0, which provide
29
website standards that are both user-friendly and accessible for individuals. KBZ Bank’s
websites and apps are and their making our website accessible for all users, the bank uses
only modern electronic devices to make it easier for customers. All Branches of KBZ
Banks are committed to providing customers with the information of customers need.
KBZ Bank is also planned to meet the needs of customers as soon as possible at any
branch. KBZ has its own server and speeds up services. Electronic banking Products of
KBZ are designed to be easy to use in both Burmese and English languages, so that not
only the website but also the mobile applications can be used by all classes of people.

3.3.2 Security
The security concerns are rapidly growing and linked to the use of some
technology in the banking sector. When addressed, these issues were found to affect the
technology's customer satisfaction. Therefore, consumers reporting security concerns
report lower customer satisfaction rates. Online banking allows the customers to make all
the financial transactions easily and on the secure website operated through banks. KBZ
Bank facilitates customers with the E-Banking transactions. With the advancement in the
technology and expansion of the globalization, the banks have to launch the new feature
to increase customer base, reduce cost and to improve bank’s financial services. There
are many threats which the banks are faced; the hackers can get access to the information
and data of the users.
KBZ Bank Nay Pyi Taw branch-1 has three CCTV in each ATM also inside
building for security concerns to meet safety and security requirements to customers and
also has the sufficient number of security staffs inside of bank compound to serve
customers efficiently during busy hours. Automated Teller Machine (ATM) as an
electronic device which help customers to deposit, withdraw, transfer money, pay bills
and perform other financial transaction outside the branch. ATMs are easy to access and
no shortage of cash at KBZ Bank Naypyitaw-1 branch. Bank is strictly ruled over
customers’ financial data and personal information leaking to third party. Every staff is
trained in his/her mind to create safe and security with customers that can lead to feel
secure dealing within branch bank.

30
3.3.3 Availability
Availability can be seen as a means of adding value to consumer by reducing the
amount of time and effort that a consumer needs to spend on the service. E-Banking
service quality aspect such as safe and convenient location, sufficient number of E-
Banking services, user-friendly system and functionality of E-Banking. Some researchers
identified that the key predictors of customer satisfaction are availability, accuracy and
convenient location 24 hours a day.
In this bank, the electronic banking function is very convenient, ATM location
and easy to find out, language and information content are easily to understand,
availability of E-Banking services operation hours (24/7), Queues at ATM and time
requirement convenience and ATM are user friendly. All announcements including daily
exchange rates for customers are shown in Burmese and English Languages which
stands in front of the main doors and inside the bank also on website. That’s really
helpful for customers.

3.3.4 Ease of Use

Operating ease, offering services anywhere and at any time, ease of use of the
service, computer literacy and easy to sign in services of the electronic banking services
are considered. In this bank, there are 3 customer service staffs are always providing the
banking service as they promised. Staffs solve customer complaints that depend on
situation. KBZ Bank Nay Pyi Taw branch-1 makes sure that the satisfaction of
customers’ adoption on IT and electronic banking is absolutely sound. KBZ Bank Nay
Pyi Taw branch-1 has acceptable speed and accuracy in providing information to
customer once new products is launched. Customers can download easily different kinds
of forms easily from website to register all kinds of E-Banking Services including Debit
cards and Credit cards. Bank staffs are quick in eliminating potential errors and they can
rectify service failure immediately it occurs for customers. KBZ Bank strictly manage
the use of the bank’s ATM, internet banking and protect the credit card and debit card
against unauthorized use one time password, signature verified, reconciling with
identification card, NRC or passport.

3.3.5 Responsiveness
Responsiveness represents the bank’s personnel service manner and presentation
that cause customers to form a positive or negative image about the bank. The sub
31
dimension of staff conduct includes willingness to help, promptness of service, greeting,
expression of genuine concern, politeness, neat appearance, and apology for mistakes.
KBZ Bank Nay Pyi Taw branch-1 staffs are friendly and willing to help
customers. Staffs are always well dressed and greeting customers when it’s their turn to
be serviced. Staffs have promptness in providing services and they have politeness in
dealing with customers. Staffs will ask for forgiveness to customers quickly if there is a
mistake in customer’s account.
In KBZ Bank Nay Pyi Taw branch-1, respective trainings are provided to bank
staffs to be convenient to help customers. The staffs also concern when the customer
complaints related with the cards are not able to solve due to internet connection error.
They will make contact to the concerned department of head office by phone if the
customers want to be solved immediately. The bank also trains the staffs to smile always
to customers whenever the customers come to the bank. KBZ Bank also has the 24 hours
call center to give the prompt response to answer the customers’ questions.

32
 CHAPTER IV
ANALYSIS OF CUSTOMER SATISFACTION ON
E-BANKING SERVICE QUALITY OF KBZ BANK

In this chapter, the analysis of customer satisfaction on E-Banking service quality

of KBZ Bank is presented by determining the characteristics of the respondents who
involved in this study. It is focused on E-Banking service quality and customer
satisfaction of KBZ Bank. The structured questionnaires were distributed and obtained
the complete set of questionnaires from 250 customers. As first part, the profile of
respondents who answered the questionnaire is described in this chapter. The second part
is customer perception on E-Banking service quality and customer satisfaction. The third
part is the analysis to prove the second objective of the study.

4.1 Profile of Respondents

In this section, profile of the respondents in terms of background information
relating to their personal characteristics is presented. The profile data of respondents
include gender, marital status, age, education level, occupation, and monthly income,
frequencies per month and customer period.

4.1.1 Gender of Respondents

In the Table (4.1), gender of respondents who enjoyed service with KBZ Bank is
presented.

Table (4.1) Gender of Respondents

Sr. No. Gender No. of Respondents Percentage
1 Male 101 40.40
2 Female 149 59.60
Total 250 100.00
Source: Survey Data (October, 2021)

In analysis, it is seen that the majority of respondents are females. There are 101
male respondents and 149 female respondents in this study. Therefore, above 59 percent
is accounted for female and the remaining is male in this study.

33
4.1.2 Age of Respondents
Table (4.2) exhibits age group of respondents in the study. There are four age
groups of respondents as shown in the following Table (4.2).

Table (4.2) Age of Respondents

Sr. No. Age (Years) No. of Respondents Percentage
1 20 and below 19 7.60
2 21-30 57 22.80
3 31-40 100 40.00
4 41-50 55 22.00
5 Above 50 19 7.60
Total 250 100.00
Source: Survey Data (October, 2021)

According to the results in Table (4.2), the majority of respondents whose age
levels are between 21-30, 31-40 and 41-50 years and accounted for (22.80%), (40.00%)
and (22.00%) in each group. Therefore, middle aged people are found as the most
customer group. Respondent’s age above 50 is the fourth (7.60%) and respondents’ age,
20 years and below is the same as low as age above 50 groups and it accounts for
(7.60%).

4.1.3 Marital Status of Respondents

The marital status respondents according to married and single is represented in
Table (4.3).

Table (4.3) Marital Status of Respondents

Sr. No. Marital Status No. of Respondents Percentage
1 Single 144 57.60
2 Married 106 42.40
Total 250 100.00
Source: Survey Data (October, 2021)

34
 In marital status of respondents, there are (144) single respondents and (106)
married respondents in this study. Therefore, marital status of respondents is accounted
for (57.60%) and (42.40%) respectively in Table (4.3).

4.1.4 Education Level of Respondents

The education level of respondents according to under graduate, graduate,
postgraduate and other is represented in Table (4.4).

Table (4.4) Education Level of Respondents

Sr. No. Education Level No. of Respondents Percentage
1 Under Graduate 25 10.00
2 Graduate 113 45.20
3 Postgraduate 103 41.20
4 Others 9 3.60
Total 250 100.00
Source: Survey Data (October, 2021)

According to the result, it is found that the majority of (113) respondents are
graduate level and it contributes (45.20%). The second largest respondent group is
postgraduate level and it contributes (41.20%). The remaining are respondents Under
Graduate and Others which are accounted for (10.00%) and (3.60%). Others group
means high school dropout persons. Therefore, it can be said that the education level of
respondents is mostly dominated by graduate level.

4.1.5 Occupation of Respondents

The occupation of respondents according to student, civil servant, company
employees, own business and others is stated in Table (4.5)

35
 Table (4.5) Occupation of Respondents
Sr. No. Occupation No. of Respondents Percentage
1 Business Owner 36 14.40
2 Civil Servant 39 15.60
3 Company Staff 110 44.00
4 Student 8 3.20
5 Dependent 7 2.80
6 Others 50 20.00
Total 250 100.00
Source: Survey Data (October, 2021)

In the study, it is found that there are (110) respondents who are from Company
Staff, (50) respondents who are in others group and (39) respondents are Civil Servants,
(36) respondents who have own business and the rest (8) respondent is Student. Others
group contain dependent persons in households. Therefore, it can be said that nearly half
of respondents are seen as employed Company Staff and is accounting for (44.00%).

4.1.6 Monthly Income of Respondents

The monthly income of respondents according to less than 200,000, 200,001-
400,000, 400,001-600,000 and above 600,000 Kyats are stated in Table (4.6).

Table (4.6) Monthly Income of Respondents

Sr. No. Monthly Income (Kyats) No. of Respondents Percentage
1 200,000 and below 26 10.40
2 200,001- 400,000 70 28.00
3 400,001 – 600,000 26 10.40
4 Above 600,000 128 51.20
Total 250 100.00
Source: Survey Data (October, 2021)

In analyzing the income level of the respondents, the largest group is the
respondents who get above 600,000 Kyats which accounts for (51.20%) of all
respondents and the smallest group are 200,000 Kyats and below and 400,001-600,000
Kyats which accounts for (10.40%) respectively.
36
4.1.7 Frequencies Using E-Banking Service per Month
The customer use E-Banking Services per month according to less than 3 times
per month, less than 5 times per month, less than 8 times per month, more than 8 times
per month is stated in Table (4.7).

Table (4.7) Frequencies of Using per Month

Sr. No. Frequencies of using per month No. of Respondents Percentage
1 Less than 3 times 55 22.00
2 3-5 times 59 23.60
3 6-8 times 30 12.00
4 More than 8 times 106 42.40
Total 250 100.00
Source: Survey Data (October, 2021)

In analyzing the customer uses E-Banking services per month, it is seen that the
major (106) respondents choose more than 8 times per month and the second largest is 3-
5 times per month. Therefore, it can be said that the largest respondent group is more
than 8 times per month and it accounts for (42.4%). Other groups are presented
respectively in Table (4.7).

4.1.8 Years of Staying with KBZ

Years of staying with KBZ according to Less than 1 year, 2-3 years, 4-5 years, 5
years and above are stated in Table (4.8).

Table (4.8) Years of Satisfying with KBZ

Sr. No. Years of satisfying No. of Respondents Percentage
1 1 year and less 39 15.60
2 2-3 years 33 13.20
3 4-5 years 41 16.40
4 Above 5 years 137 54.80
Total 250 100.00
Source: Survey Data (October, 2021)

37
 In analysis, it is seen that the major (137) respondents chose 5 years and above.
The second largest respondents group chose 4-5 years. Therefore, it can be said that the
largest respondent group is more than 5 years and it account for (54.80%) and others are
presented respectively in Table (4.8).

4.2 Analysis of Customer Perception on E-Banking Service Quality

To analyze the customer satisfaction on E-Banking service quality of KBZ Bank,
the mean value of the selected service quality (Accessibility, Security, Availability, Ease
of Use, Responsiveness) are calculated by using descriptive statistics. In this study, 250
respondents were asked by structured questionnaires. Each factor included respective
statements; each statement was measured by five-point Likert-scale ranging from 1 to 5
for 1. Strongly Disagree, 2. Disagree, 3. Neutral, 4. Agree and 5. Strongly Agree. Hence,
the mean scores can range from 1 to 5. The result of reliability analysis and customer
perception on E-Banking service quality is described in the following Tables.

4.2.1 Reliability Test

A construct composite reliability co-efficient (Cronbach alpha) was used to test
the reliability of the research instrument. A higher value shows a more reliable generated
scale. 0.7 is an acceptable reliability coefficient. Since, the alpha coefficient values were
all greater than 0.7, a conclusion was drawn that the instruments had an acceptable
reliability coefficient and were appropriate for the study (Cronbach, 1951). The results
are shown in Table (4.9).

Table (4.9) Reliability Analysis of Variables

Sr. No. Variables No. of Items Cronbach’s Alpha
1 Accessibility 7 0.908
2 Security 7 0.940
3 Availability 6 0.888
4 Ease of Use 7 0.886
5 Responsiveness 7 0.965
6 Customer Satisfaction 8 0.953
Source: Survey Data (October, 2021)

38
 According to the Table (4.9), the reliability coefficients of five E-Banking service
quality have the alpha vale above 0.7. The alpha value of accessibility is 0.908, security
is 0.940, availability is 0.888, ease of use is 0.886 and responsiveness is 0.867
respectively. Customer satisfaction has the coefficient alpha vale of 0.953. All variables
have the acceptable reliability level.
According to Best (1977), the mean values of five-point Likert scale items are
interpreted as follows:
The score among 1.00 – 1.80 means strongly disagree.
The score among 1.81 – 2.60 means disagree.
The score among 2.61 – 3.40 means neutral.
The score among 3.41 – 4.20 means agree.
The score among 4.21 – 5.00 means strongly agree
Standard deviation (S.D.) is a measure that is used to quantify the amount of
variation or dispersion of a set of data values. A low standard deviation indicates that the
data points tend to be close to the mean of the set, while a high standard deviation
indicates that the data points are spread out over a wide range of values (Bland &
Altman, 1996). The standard deviation is commonly used to measure confidence in
statistical conclusions.

4.2.2 Customer Perception on Accessibility

The customer perception on accessibility was measured with seven statements.
The mean value for each statement and the overall mean value are presented in Table
(4.10).

39
 Table (4.10) Customer Perception on Accessibility
Sr. Standard
Description Mean
No. Deviation
Sending information by the KBZ Bank with clear, easy 3.63 1.144
1
to understand and useful for E-Banking Customers
Easily found the information of E-Banking from public 3.76 1.150
2
media (Facebook, internet web pages, etc.)
3 Providing up to date information related to E-Banking 3.69 1.062

Providing E-Banking facilities that are up-to-date 3.68 1.109

4
equipment and technology
Sending e-mail and phone call to the service center to 3.38 1.291
5
know E-Banking related information
Supporting the easy way for customers to learn how to 3.64 1.114
6
use E-banking
7 Without complex in using E-Banking 3.83 1.011
Overall Mean 3.66
Source: Survey Data (October, 2021)

According to the Table (4.10), the overall mean value of customer perception on
accessibility was 3.66. It showed the agree level of customers. It can be concluded that
the level of service regarding accessibility perceived by customers is under the
acceptable level. The easy way to use E-Banking gained the maximum mean value of
3.83 with agree level of customers. The customers preferred to use E-Banking which is
not complex. On the other hand, sending e-mail and phone call to the service center if
there is any information related to E-Banking Services information by customers has the
minimum mean value of 3.38 with neutral level of customers. It may be possible that the
responses of email or phone by the bank is a weak condition to get the acceptable stage
of customers and the use of email by customers is not convenient to get the answers from
the bank.

40
4.2.3 Customer Perception on Security
The customer perception on security was measured with seven statements. The
mean value for each statement and the overall mean value are presented in Table (4.11).

Table (4.11) Customer Perception on Security

Sr. Standard
Description Mean
No. Deviation
Maintaining customer’s E-Banking Services account 3.60 1.130
1
information and balance enquiry
Having CCTV at ATM and inside the banks with 3.66 1.139
2
reliable by customers
Taking the responsibility for financial loss of E- 3.14 1.310
3
Banking users
4 Being helpful of security guards for safety matters 3.40 1.245
Feeling safe in KBZ Bank transactions by E-Banking 3.47 1.299
5
users
Providing safety advance technology for E-Banking 3.42 1.192
6
users.
7 Being trust the security level of E-Banking services 3.46 1.251
Overall Mean 3.45
Source: Survey Data (October, 2021)

According to the Table (4.11), the overall mean value of customer perception on
security was 3.45 with agree level of customers. The security system of KBZ Bank is
accepted by customers and they showed the agree level on security. Moreover, the
security of KBZ Bank is essential for customers. Having CCTV at ATM and inside the
banks with reliable by customers showed the maximum mean value of 3.66 with agree
level. The use of CCTV by the bank is regarded as the security requirement by the
customers. However, taking the responsibility for financial loss of E-Banking users
gained the minimum mean value of 3.14 with neutral level of customers. The customers
know that some financial losses are not guaranteed by the bank. Thus, the customers
cannot decide their agreement level on this factor. The weakness of this condition should
be focused by the bank.

41
4.2.4 Customer Perception on Availability
The customer perception on availability was measured with seven statements.
The mean value for each statement and the overall mean value are presented in Table
(4.12).

Table (4.12) Customer Perception on Availability

Sr. Standard
Description Mean
No. Deviation
1 Being user friendly of the functions of KBZ E-Banking 3.81 1.010
Having a large number of ATMs in locality and easy to 3.88 1.050
2
find as required
3 Being able to use with all kind of network operator 3.84 1.046

Willing to help customers to solve problems related to 3.27 1.214

4
E-Banking by E-Banking agents
Being attractive of the availability of E-Banking for 3.79 1.031
5
online payment at all time
6 Using E-Banking services at anytime and anywhere 3.72 1.130
Overall Mean 3.72
Source: Survey Data (October, 2021)

According to the Table (4.12), the overall mean value of customer perception on
availability was 3.72 with agree level of customers. The level of service quality
regarding availability of the E-Banking services at anytime and anywhere is under the
agree level. It was found that availability has strong power to make customer to have a
good perception. Among the availability factors, having a large number of ATMs in
locality and easy to find as required gained the maximum mean value of 3.88 with agree
level of customers. The use of ATMs is convenient and customers preferred to use
ATMs at any time when they want to get money. Thus, the ATMs in many places is
essential for customers. On the other hand, willing to help customers to solve problems
related to E-Banking by E-Banking agents showed the minimum mean value of 3.27
with neutral level. The customers cannot decide their acceptable level on the
performance of E-Banking agents to help and solve the problems of customers.

42
4.2.5 Customer Perception on Ease of Use
The customer perception on ease of use was measured with seven statements. The
mean value for each statement and the overall mean value are presented in Table (4.13).

Table (4.13) Customer Perception on Ease of Use

Sr. Standard
Description Mean
No. Deviation
Using multiple languages on website and application 3.76 1.039
1
easy to use for E-Banking customers
Being comfortable to solve the problems when calling to 3.11 1.383
2
customer hotline from the bank
Providing information and introducing to customers by 3.40 1.267
3
phone when new E-Banking products launching
Checking foreign currency exchange on both Kpay and 3.73 1.065
4 Websites which supports to use E-Banking Services
easily
Supporting Kpay and KBZ website without adding other 3.84 .998
5
software for any kinds of android and IOS platform
Not having to go to the bank for transactions because of 3.86 1.081
6
using E-banking
Being important with the easy way to use E-Banking for 4.10 1.025
7
customers
Overall Mean 3.69
Source: Survey Data (October, 2021)

According to the Table (4.13), the overall mean value of customer perception on
ease of use was 3.69. The customers perceived that the easy way to use E-Banking
services is important to use because it showed the agree level of customers. Being
important with the easy way to use E-Banking for customers showed the maximum mean
value of 4.10 with agree level of customers. The customers regarded the easy way of
using E-Banking can attract customers to use E-banking. On the other hand, being
comfortable to solve the problems when calling to customer hotline from the bank
showed the minimum mean value of 3.11 with neutral level. The clear decision of

43
customers cannot be gained for this condition. The services provided by the bank using
phone to customers to solve the problem is not effective. Thus, customers cannot decide
that situation to have an agreed level.

4.2.6 Customer Perception on Responsiveness

The customer perception on responsiveness was measured with seven statements.
The mean value for each statement and the overall mean value are presented in Table
(4.14).

Table (4.14) Customer Perception on Responsiveness

Sr. Standard
Description Mean
No. Deviation
Having experienced and well-trained employees related 3.43 1.187
1
to E-Banking services
Being friendly and willing to help E-Banking customers 3.17 1.370
2
by bank staffs
Responding exact answers to customers’ questions by 3.16 1.303
3
bank staffs
Having the knowledge to answer customers’ questions 3.32 1.296
4
by banks staff
5 Providing prompt service by bank staff 3.13 1.352
Having effective and quick complaint handling 3.13 1.342
6
procedure for E-Banking customers
Reviewing the quality of staffs to solve customer 3.15 1.300
7
problems
Overall Mean 3.20
Source: Survey Data (October, 2021)

According to the Table (4.14), the overall mean value of customer perception on
responsiveness was 3.20 with neutral level of customers. The response of bank staffs is
not under the acceptable level of customers. The customers cannot decide to
responsiveness of the bank when taking E-Banking services and the facing the problems
related to E-banking. Among the statements, having experienced and well-trained

44
employees related to E-Banking services showed the maximum mean value of 3.43 with
agree level of customers. The knowledge and skills of the bank staff related to E-
Banking service gained the believable level of customers. On the other hand, providing
prompt service by bank staff and having effective and quick complaint handling
procedure for E-Banking customers gained the minimum mean value of 3.13 each. The
mean values showed the neutral level of customers. The prompt service and quick
complaint handling procedures of the bank are the area to be reviewed by the bank.

4.2.7 Summary of Customer Perception on E-Banking Service Quality

Table (4.15) describes the summary of customer perception on the five E-
Banking service qualities provided by KBZ Bank.

Table (4.15) Summary of Customer Perception on E-Banking Service Quality

Sr. No. Service Quality Overall Mean
1 Accessibility 3.66
2 Security 3.45
3 Availability 3.72
4 Ease of use 3.69
5 Responsiveness 3.20
Source: Survey Data (October, 2021)

According to Table (4.15), the summary of customer perception on E-Banking

service quality of KBZ Bank is described. The availability has the maximum overall
mean value of 3.72 with agree level and responsiveness has the minimum overall mean
value of 3.20 with neutral level. Accessibility has the overall mean value of 3.66, ease of
use has 3.69 and security has 3.45. All service quality of the bank showed the agree level
of customers except responsiveness. The different E-Banking service quality provided by
the bank are attractive for customers to gain the acceptable level of customers.

4.2.8 Customer Satisfaction

Customer satisfaction was measured with seven statements. The mean value for
each statement and the overall mean value are presented in Table (4.16).

45
 Table (4.16) Customer Satisfaction
Sr. Standard
Description Mean
No. Deviation
Satisfying with understandable content and information 3.60 1.126
1
of website and application of KBZ Bank
Satisfying with prompt service, politeness and great 3.16 1.340
2
appearance of KBZ staffs
Satisfying with E-Banking facilities provided by KBZ 3.55 1.178
3
Bank
Satisfying with safe transactions and security policies of 3.50 1.199
4
E-Banking provided by KBZ Bank
Satisfying with responsive attitude of the staffs to 3.12 1.317
5
customer complaints
Satisfying with E-Banking services, staffs and ATMs 3.30 1.278
6 which meet service requirements for customers at KBZ
Bank
Satisfying with the easy way to use E-Banking services 3.74 1.083
7
of KBZ Bank
Satisfying with E-Banking services that are comfortable 3.77 1.096
8
for me to save the time and effort
Overall Mean 3.47
Source: Survey Data (October, 2021)

According to Table (4.16), over all mean value of customer satisfaction is 3.47
which showed the satisfied level of customers. Satisfying with E-Banking services that
are comfortable for me to save the time and effort showed the maximum mean value of
3.77 with satisfied level of customers. The comfortable in using E-Banking services
promoted the satisfaction level of customers. On the other hand, satisfying with
responsive attitude of the staffs to customer complaints showed the minimum mean value
of 3.12 with neutral level of customers. The staffs are required to solve the complaints as
quick response as possible to upgrade the satisfaction level of customers on service
quality of KBZ Bank.

46
4.3 Correlation between E-Banking Service Quality and Customer Satisfaction
After descriptive test, the correlations of the independent variables (Accessibility,
Security, Availability, Ease of Use and Responsiveness) were tested to show their
correlation with dependent variable (customer satisfaction). Correlation is the statistical
technique that can show whether and how strongly pairs of variables are related.
Correlation coefficient ranges from -1.0 to +1.0. If the value is positive, it means that as
one variable gets larger, the other gets larger. If the value is negative, it means that as
one variable gets larger, the other gets smaller. The results of the correlations of the
measured variables are shown in Table (4.17).
Correlation is an effect size and it can describe the strength of the correlation
using the guide and suggests like that
The absolute value of r among 0.1 - 0.4 means weak
The absolute value of r among 0.5 - 0.7 means moderate
The absolute value of r among 0.8 – 0.9 means strong

Table (4.17) Correlation between E-Banking Service Quality and

Customer Satisfaction
Sr. No. Description Pearson Correlation Coefficient p-value
1 Accessibility 0.833*** 0.000
2 Security 0.873*** 0.000
3 Availability 0.858*** 0.000
4 Ease of Use 0.863*** 0.000
***
5 Responsiveness 0.892 0.000
***
Correlation is significant at the 0.01 level (2-tailed).
Source: Survey Data (October, 2021)

According to the Pearson correlation analysis Table (4.17), E-Banking service

qualities have significant correlation at the p-value (0.01) level and the positive
relationship with customer satisfaction. The correlation analysis showed that there is
very strong significant correlation between all independent variables (accessibility,
security, availability, ease of use and responsiveness) with dependent variable (customer
satisfaction). It shows the positive correlation of service quality of KBZ Bank.
Accessibility is the positive relationship (r = 0.833, p ≤ 0.01) with customer satisfaction.
Security is the positive relationship (r = 0.873, p ≤ 0.01) with customer satisfaction.
47
Availability is the positive relationship (r = 0.858, p ≤ 0.01) with customer satisfaction.
Ease of Use is the positive relationship (r = 0.863, p ≤ 0.01) with customer satisfaction.
Responsiveness is the positive relationship (r = 0.892, p ≤ 0.01) with customer
satisfaction.

4.4 Multiple Regression Analysis of E-Banking Service Quality and Customer

Satisfaction
Multiple regression analysis was conducted to test the proposed objectives of the
effect of E-Banking service quality as independent variables (accessibility, security,
availability, ease of use and responsiveness) on dependent variables (customer
satisfaction).

The proposed model is:

Yi = β0 + β1X1 + β2X2 + β3X3 + β4X4+ β5X5 + ɛi

Where:
Yi = Customer satisfaction
0 = Constant (Intercept)
1,2,3,4,5 = Regression Coefficients
X1 = Accessibility
X2 = Security
X3 = Availability
X4 = Ease of use
X5 = Responsiveness
i = Random Error
The results of multiple regression analysis are shown in Table (4.18).

48
 Table (4.18) Multiple Regression Analysis of E-Banking Service Quality and
Customer Satisfaction
Unstandardized Standardized
Coefficients Coefficients t Sig.
B Std. Error Beta
(Constant) -.297 .109 -2.714 .007
Accessibility .139 .046 .120 2.994 .003
Security .239 .042 .240 5.717 .000
Availability .216 .054 .179 4.007 .000
Ease of Use .187 .054 .156 3.458 .001
Responsiveness .292 .038 .333 7.784 .000
R2 0.894
Adjusted R2 0.892
P < 0.01 (Significant at 99%); P < 0.05 (Significant at 95%);
Dependent Variable: Customer Satisfaction
Source: Survey Data (October, 2021)

According to Table (4.18), the results of multiple regression analysis provided

that accessibility, security, availability, ease of use and responsiveness were positive and
significant effect on customer satisfaction at 0.01 level (b=0.139, t=2.994, p<0.01),
(b=0.239, t=5.717, p<0.01), (b=0.216, t=4.007, p<0.01), (b=0.187, t=3.458, p<0.01) and
(b=0.292, t=7.784, p<0.01) respectively. It means that the five E-Banking service quality
have significant effect on customer satisfaction.

The estimated model is:

̂ = b0 + b1X1 + b2X2 + b3X3 + b4X4 + b5X5

Customer Satisfaction = - 0.297+ .139 Accessibility + .239 Security + .216 Availability

+ .187 Ease of Use + .292 Responsiveness

According to the above equation, if one additional unit increases in accessibility,

customer satisfaction will be increased by 0.139. If one additional unit increases in
security, customer satisfaction will be increased by 0.239. If one additional unit increases

49
in availability, customer satisfaction will be increased by 0.216. If one additional unit
increases in ease of use, customer satisfaction will be increased by 0.187. If one
additional unit increases in responsiveness, customer satisfaction will be increased by
0.292.
Based on the Table (4.18), it shows that the R square indicates the extent the
independent variables can explain the variations in the dependent variable. From this
study, the coefficient of determination (R square) is 0.894 unit, which indicate that
independent variable (accessibility, security, availability, ease of use and responsiveness)
can explain 89% of the variation in dependent variable (customer satisfaction).
According to the multiple regression analysis, customer satisfaction is
significantly influenced by E-Banking service quality (accessibility, security,
availability, ease of use and responsiveness). The result revealed that five service
qualities are essential for customer satisfaction of KBZ Bank. Among the E-Banking
service quality, responsiveness of KBZ Bank has the strongest effect on customer
satisfaction and security is the second most important E-Banking service quality to have
the effect on customer satisfaction. The quick response on the problems of customers is
very attractive for customers to have more satisfaction. The security system of KBZ
Bank is important than other services such as accessibility, availability and ease of use.
The results of regression analysis are shown in Figure (4.1).

Figure (4.1) Conceptual Framework with Results

Independent Variables Dependent Variable

E-Banking Service Quality

Accessibility

Security

β = 0.179
Availability Customer Satisfaction

Ease of Use

Responsiveness Significant

Source: Survey Data (October, 2021)

50
 The results of the study revealed that the five E-Banking service quality
(accessibility, security, availability, ease of use and responsiveness) have significant
positive effect on customer satisfaction. The responsiveness is the most important E-
Banking service quality for customers with the strongest effect on customer satisfaction
than other services because customers feedbacks and response are required to solve
immediately. The prompt services, response exact answers and well-trained staffs are
important to maintain customer satisfaction. According to the results, customer
satisfaction of KBZ Bank was created by five E-Banking service quality. The effective
practice of E-Banking service quality by KBZ Bank creates benefits for customers and
thus, customers are really satisfied related to those service quality.

51
 CHAPTER V
CONCLUSION

This study mainly focused on the customer satisfaction on E-Banking service

quality of KBZ Bank. In this study, the purpose is to explore the E-Banking service
quality of KBZ Bank and to analyze the customer satisfaction on E-Banking service
quality of KBZ Bank Branch-1 located in Nay Pyi Taw. This chapter describes the
findings and discussions of the study. It also presents suggestions and recommendations
according to results of analysis. Moreover, this chapter states the needs for further
research to fulfill the gaps or limitations of this study.

5.1 Findings and Discussions

This study is to analyze the customer satisfaction on E-Banking service quality of
KBZ Bank located in Nay Pyi Taw. The data were collected from 250 customers by
using structured questionnaire. The questionnaire included 42 statements on five E-
Banking service qualities and customer satisfaction. The customers were selected by
using systematic sampling method. As analysis, multiple regression analysis was applied
to test the effect of E-Banking service quality on customer satisfaction.
Demographic factors of the respondents include gender, marital status, age,
education level, occupation and monthly income. With regard to gender, male comprised
less than female and married people comprised less than single. The largest age group is
the age between 21-30 and 31-40. Education level can be said that the largest group is
graduate level. Most of the respondents’ occupation and monthly income are company
staff and above 600,000 Kyats respectively.
This study has categorized the E-Banking service quality of KBZ Bank into five
dimensions (accessibility, security, availability, ease of use and responsiveness). The
findings of this study supported the importance of E-Banking service quality on
customer satisfaction for the survival of KBZ Bank. According to this study, regarding
with the statements of availability, KBZ Bank has provided service quality that gained
the maximum mean value. In concerning availability factors, customers were satisfied
with the functions of KBZ E-Banking are user friendly, a huge number of ATMs in locality
and easy to find as required, E-Banking is able to use with all kind of network operator,

52
The availability of E-Banking for online payment at all time is attractive and can use E-
Banking services at anytime and anywhere at KBZ Bank.
Most customers are perceived providing quality services of KBZ Bank. In
concerning security factors, most customers are satisfied with CCTV at ATM and inside
the banks, feel safe in KBZ Bank transactions, trust the security level of E-Banking
service quality of KBZ Bank that it has safe transaction, wide range of products and
services, banking securities, customer privacy policy, error free records, failure service
recovery and promised time services, except customers were mentioned neutral where
bank takes the responsibility for financial loss of E-Banking users.
In concerning accessibility factors, most customers are satisfied that information
sent by the KBZ Bank is clear, easy to understand and useful and can easily find the
information of E-Banking from public media, provides up to date information The use of
E-Banking is also not a complex process. In concerning ease of use factors, most
customers were satisfied with using multiple languages on website and application is
easy to use for E-Banking customers, comfortable to solve the problems when calling to
customer hotline from the bank, providing information and introducing to customers by
phone when new E-Banking products are lunched, any kinds of android or IOS platform
support K-pay and KBZ website without adding other software and do not have to go to
the bank for transactions because of using E-banking. In concerning Responsiveness
factors, most customer were satisfied with Bank staffs are experienced and well trained
related to E-Banking services.
The correlation analysis showed all E-Banking service quality (accessibility,
security, availability, ease of use and responsiveness) have very strong and positive
correlation with customer satisfaction. The more the five E-Banking service quality are
provided by the bank, the more the customer satisfaction can be yielded as the outcome
of the bank. Responsiveness has the strongest positive correlation with customer
satisfaction. The experienced and well-trained employees related to E-Banking services
are essential for customers to get better services and to upgrade more satisfaction. Thus,
the present condition of responsiveness of the bank is the area to be retained to have
more customer satisfaction.
According to the multiple regression analysis, the five E-Banking service quality
(accessibility, security, availability, ease of use and responsiveness) have significant and
positive effect on customer satisfaction. These service qualities play an essential role in
customer satisfaction. Because of these service qualities, the customers preferred to

53
contact to KBZ Bank in the future. Responsiveness has the strongest effect on customer
satisfaction. The services related to responsiveness provided by the banks are sure to get
more customer satisfaction. Because of customer satisfaction, the bank can stand
successfully in the strong competitive business environment. Security is the second
important one to upgrade customer satisfaction. The security for customers is always
focused by the bank. Having CCTV at ATM and inside the banks can provide the better
security system for customers and customers preferred it in acquiring services at the
bank. These conditions provided by the bank create the preference of customers to have
more satisfaction.

5.2 Suggestions and Recommendations

Customer satisfaction is the key component of bank profitability and success
because once the customers reach their satisfaction level; it may influence them to
consume the service continuously. Moreover, customers share their experiences with
other people, which create the possibility of new customer. Likewise, dissatisfied people
also give their opinion about the service of the bank, about their unfortunate experiences
and lead towards a declining position to the number of customers.
According to the results of analysis, this study suggests that KBZ Bank should
analyze its bank attributes to improve customer satisfaction on E-Banking service quality
for the customers. Moreover, the bank employees should give prompt customer service
and give attention to the needs of customers. The following are some positive
suggestions for improvement on service quality of KBZ Bank. The objective of this
study is to identify the E-Banking service quality of KBZ Bank and to analyze the
customer satisfaction on E-Banking service quality of KBZ Bank. The findings implied
that gaining customer satisfaction depends on E-Banking service quality (accessibility,
security, availability, ease of use and responsiveness). All E-Banking service qualities
were significant role to create customer satisfaction. The bank should put more emphasis
on these services to yield customer satisfaction than its competitors.
According to mean values, availability and ease of use gained more agreement
level on the practice of these services by the bank. According to the results, some
recommendations and suggestions are made to achieve customer satisfaction of KBZ
Bank. In order to maintain and satisfy the existing customers, E-Banking service
qualities are needed to get better perception of customers. Regarding security factors,
customers showed the lowest agreement level with bank takes the responsibilities with
54
financial loss for E-Banking users. It happens among the E-Banking users. Transactions
done via E-Banking are related with the finance. Financial data needs accuracy. If the
bank provides service quickly and accurately, it can increase the reputation of the bank
related with reliability. Every transaction is precious for both bank and customers itself.
If KBZ Bank cannot take full responsibilities for those kinds of financial losses, it would
have negative effect on customer satisfaction of KBZ Bank. Thus, this study kindly
suggests that KBZ Bank should more focus on customer’s financial losses during E-
Banking transaction.
The results related to ease of use factors revealed that customers are moderately
satisfied with the calling to bank hotline number to solve the problems. In this factor,
KBZ Bank should train staffs how to answer the customer’s call quickly by problem
solving manual. KBZ Bank should also develop customer service manual guide line for
all level of staffs. According to Accessibility factor, customers are highly appreciated
and satisfied with six facts except calling phone and sending email to call center. This
study suggests that KBZ Bank should provide more staffs to call center and
communication guidelines to all departments for prompt email reply.
Overall mean value of responsiveness factor is the least compared to other E-
Banking service qualities but all of the respondents agree the responsiveness of KBZ
Bank. Customers are least satisfied with bank staffs’ performance in helping to solve the
problems, can’t reply exactly what customer asks, taking too long to reply and complaint
handling procedure is complex. Furthermore, the customers need prompt information.
Thus, KBZ Bank should train more staffs in order to give prompt information by using
modern technologies. Insufficient knowledge of staffs, poor communication with
customers call, bad non-verbal behaviors and bad internet connections can have negative
effect on customer satisfaction.
Generally, E-Banking service qualities of KBZ Bank are evaluated positively by
respondents and the level of customer satisfaction is acceptable. But, KBZ Bank should
emphasize to enhance better E-Banking service quality to fulfill customer satisfaction
absolutely. According to this study, customer satisfaction is directly linked with E-
Banking service quality delivered by KBZ Bank. KBZ Bank should pay more attention
on the five E-Banking service quality to gain and retain customer satisfaction. Thus, the
results of the study provide the knowledge related to E-Banking service quality to have
more customer satisfaction.

55
5.3 Needs for Further Research
In this study, it is limited to KBZ Bank at Nay Pyi Taw Branch-1 and some future
research can be enlarged by means of continuous interviewing of customers or study at
other branches in Nay Pyi Taw. Further studies can focus on all types of commercial
banks in Nay Pyi Taw.
Apart from that, this study only measured the five E-Banking service quality of
KBZ Bank. In order to develop strategies to increase customer satisfaction, other
potential factors affecting customer satisfaction should also be discovered. Thus, future
research should analyze other perspectives such as internal and external factors of
consumer behavior, impacts of demographic factors on IT related banking services and
employee satisfaction related with KBZ Bank, Nay Pyi Taw branch-1. Moreover, E-
Banking service quality is a major trend in contemporary banking in Myanmar. Banks
have utilized internet related technologies such as KBZ Pay (e-wallet), Digital money
(Mobile Banking and i-banking), to improve productivity or profitability. Thus, not only
E-Banking service quality but also other digital banking services should be developed
and measured for customer satisfaction in further research.

56
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 APPENDIX
QUESTIONNAIRE

“CUSTOMER SATISFACTION ON E-BANKING SERVICE QUALITY OF

KBZ BANK LIMITED”

Section (A)

The following personal information is necessary for validation of the

questionnaires. All responses will be kept confidential. Your kind cooperation in
providing this information would be much appreciated.

Demographic Characteristics of Respondents

1. Gender
Male
Female

2. Age (Years)
20 and below
21 - 30
31 - 40
41 - 50
Above 50

3. Marital Stuatus
Single
Married

4. Education
Under Graduate
Graduate
Post Graduate
Others (Diploma, Ph.D)
5. Occupation
Business owner
Civil Servant
Company staff
Student
Dependent
Others

6. Monthly income (Kyats)

200,000 and less
200,001 – 400,000
400,001 – 600,000
Above 600,000

7. Home many times do you use E-banking services during one month?
Less than 3 times
3 - 5 times
6 - 8 times
More than 8 times

8. How long have you contacted KBZ bank?

1 year and less
2 - 3 years
4 - 5 years
Above 5 years
 Section (B)
Customer Perception on E-Banking Service Quality of KBZ Bank

Please state the level of your agreement on each statement by providing the most
relevant number. Please tick ( √ ) the one that matches your situation.
1 = Strongly Disagree 2 = Disagree 3 = Neutral
4 = Agree 5 = Strongly Agree

1. Accessibility
Sr. No. Statement 1 2 3 4 5
1 Information sent by the KBZ Bank are clear, easy to
understand and useful for E-banking customers.
2 Customers can easily find the information of E-
Banking from public media (Facebook, internet web
pages, etc.)
3 KBZ bank provides up to date information related to E-
banking.
4 KBZ bank provides E-Banking facilities that are up-to-
date equipment and technology.
5 Customers can send e-mail and phone call to the
service center if there is any information related to E-
banking Services information.
6 KBZ Bank supports the easy way for customers to
learn how to use E-banking.
7 The use of E-banking is not complex.
2. Security
Sr. No. Statement 1 2 3 4 5
1 The bank maintains customer’s E-banking Services
account information and balance enquiry.
2 CCTV at ATM and inside the banks are in place and
reliable.
3 Bank takes the responsibility for financial loss of E-
banking users.
4 Security guards are helpful for safety matters.
5 E-banking users feel safe in KBZ bank transactions.
6 The advance technology provide safety for E-banking
customers.
7 I trust the security level of E-Banking services.

3. Availability
Sr. No. Statement 1 2 3 4 5
1 The functions of KBZ E-Banking are user friendly.
2 KBZ has a large number of ATMs in locality and easy
to find as required.
3 E-banking is able to use with all kind of network
operator.
4 E-banking agents are willing to help customers to solve
problems related to E-banking
5 The availability of E-banking for online payment at all
time is attractive for me.
6 I can use E-banking services at anytime and anywhere.
4. Ease of Use
Sr. No. Statement 1 2 3 4 5
1 Using multiple languages on website and application is
easy to use for E-banking customers.
2 Customers are comfortable to solve the problems when
calling to customer hotline from the bank.
3 Providing information and introducing to customers by
phone when new E-banking products are lunched.
4 Customers can check foreign currency exchange on
both Kpay and Websites which supports to use E-
Banking Services easily.
5 Any kinds of android or IOS platform support Kpay
and KBZ website without adding other software.
6 I do not have to go to the bank for transactions because
I use E-banking.
7 The easy way to use E-banking is important for
customers.

5. Responsiveness
Sr. No. Statement 1 2 3 4 5
1 Bank staffs are experienced and well trained related to
E-banking services.
2 Bank staffs are friendly and willing to help E-banking
customers.
3 Bank staffs can response exact answers to customers’
questions.
4 Bank staffs have the knowledge to answer customers’
questions.
5 Bank staffs can provide prompt service.
6 The bank has effective and quick complaint handling
procedure for E-banking customers.
7 The bank regularly reviews the quality of staffs to
solve customer problems.
 Section (C)
Customer Satisfaction on E-Banking Service Quality of KBZ Bank

Please state the level of your agreement on each statement by providing the most
relevant number. Please tick ( √ ) the number related to your level of satisfaction on E-
banking services provided by KBZ bank, Nay Pyi Taw Branch (1).
1= Strongly Dissatisfied 2= Dissatisfied 3= Neutral
4= Satisfied 5= Strongly Satisfied

6. Customer Satisfaction
Sr. No. Statement 1 2 3 4 5
1 I am satisfied with understandable content and
information of website and application of KBZ Bank.
2 I am satisfied with prompt service, politeness and great
appearance of KBZ staffs.
3 I am satisfied with E-banking facilities provided by
KBZ Bank.
4 I am satisfied with safe transactions and security
policies of E-banking provided by KBZ bank.
5 I am satisfied with responsive attitude of the staffs to
customer complaints
6 I am satisfied with E-Banking services, staffs and
ATMs which meet service requirements for customers
at KBZ Bank.
7 I am satisfied with the easy way to use E-banking
services of KBZ bank.
8 I am satisfied with E-banking services that are
comfortable for me to save the time and effort.

Thank you very much for your kind cooperation.