Ms.D.Charumathi et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Vol.

6, Issue 2, June
2019, pp. 83-88

A Study on Digital Banking System and

Measuring Its Effectiveness among the
Customers in Chennai City
Ms.D.Charumathi, Mr. Ameer Rezal.A
MEASI Institute of Management, Chennai-600014
Abstract: India's banking sector is booming at a great pace in spite of its relatively small size in comparison of its
counterparts in other leading economies. Indian banking sector has been found lucrative by eminent players from the
international world.Most if not all banks offer online banking or electronic banking. They have secured websites where
clients may enroll their accounts and start banking via the Internet – electronically transfer funds, make bill payments,
or invest money. This study reveals the importance of digitalization in the modern era of technology where it has a huge
impact on day to day transactions where Digital pervasiveness is real and happening very fast – from connected cars,
internet of things, wearable devices, virtual reality, cognitive computing and a lot more. In 2015, 52.7 percent of the
global mobile phone population accessed the internet from their mobile phones and this statistic is set to be 61.2 percent
in 2018. It’s a significant shift from a time when many thought it unlikely that anybody will want to have a personal
computer at home.This research paper is to analyze Digital banking system and measuring its effectiveness among the
customers in chennai city
Key Words: Digital banking services, E-commerce, Customer Delight and customer knowledge.
I. INTRODUCTION Tsoukatos (2016) identified the main determinants of
customers’ perception on E-Banking services, examined the
E-Business is a revolution that is transforming companies
effects of service development on customer satisfaction and
round the world, and it is impacting all the industries. E-
evaluated banks’ performance regarding key E-Banking
business is much more than online purchase and
excellence areas. The study identified that four electronic
implementation of computer applications by the IT
banking factors namely personalized service, innovation,
departments; or putting up a company website-business
accessibility and convenience and transaction security. The
affects the whole business and the value chains in which it
study found that customers perception on banks underperform
operates. It enables a much more integrated level of
in being harmonized with the needs of their customers in all
collaboration between the different components of a value
the services and also suggested that special priority should be
chain than ever before. Adopting e-Business also allows
given to improving security in ATM banking and educating
companies to reduce costs and improve customer response
new customers.
time. Organizations that transform their business practices
Ching Poon (2016) studied customers’ acceptance of
stand to benefit immensely from innumerable new
electronic banking services in Malaysia. The researcher
possibilities brought about by technology. Although it's early
identified ten factors such as convenience of usage,
days for e-Business in India, we believe there are greater
accessibility, availability of features, bank management and
opportunities over the long term for India and Indian
image, security, privacy, design, content, speed and fees and
businesses. There is urgent need to usher in farsighted policies
charges. The result showed that out of ten factors
& practices to become a major economic force in the
accessibility, convenience of usage, design and content are
emerging world of E-Business. E-banking is defined as the
the major sources of satisfaction privacy and security are the
automated delivery of new and traditional banking products
main sources of dissatisfaction. Whereas, the availability of
and services directly to customers through electronic,
features, speed, service charges and bank management are
interactive communication channels. E-banking includes the
dangerous to the success of the E-Banking services. Hence,
systems that enable financial institution customers,
the researcher is to identify that satisfaction level of security
individuals or businesses, to access accounts, transact
point in E-Banking services.
business, or obtain information on financial products and
Mathur and Khan (2017) examined the recent technological
services through a public or private network, including the
trends issues and challenges in banking sector, identified the
Internet.
penetration, adoption and usage of E-Banking technologies
II. LITERATURE REVIEW namely ATM, internet banking, phone banking and payment
and settlement system and also investigated that the factors
influencing the usage by customers. It was concluded that

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Ms.D.Charumathi et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Vol. 6, Issue 2, June
2019, pp. 83-88
Indian banks provided online services compare to foreign the customers of the banks are highly heterogeneous natured
banks. Even though, customers find it convenient and cost which includes illiterate, semi- literate and highly literate. In
effective way to bank through ATMs, phone banking remains this circumstance, it is essential to know the effectiveness of
significant for customers’ retention and personalized electronic banking operations among the customers. E-
services.. Therefore, it is important to identify the perception Banking service is one of the prominent and attractive
of customers’ about ATM, Mobile Banking, Internet Banking services offered by both private and public sector banks. E-
and Mobile Banking services. Banking is completely technology oriented which needs
Elisha (2017) explored the major attributes responsible for proper awareness, experience and expertise in operating
internet banking based on customers’ perception on different computer and electronic devices.Despite the benefits of
E-Banking technologies. The study found that E-Banking digital banking, there have been many challenges which needs
serves more advantages to Nigerian banking sector. Factor to be addressed such as banking marketers should focus on
analysis found that security, time factor, queue management, traditional banking habits, security risk, transaction
fund transfer, accessibility and user friendly are main factors difficulty,technical issues, small budgets, Privacy risk,
influencing to E-Banking services. Out of 750 customers, 660 Confidentiality, Integrity, and authentication. Competition in
customers were agreed with factor of convenient and flexible the industry and less Internet penetratration in Indian context
of E-Banking services. Hence, now-a-day’s most of the are also some of the challenges which needs to be addressed.
departments link with banking sector because all the
IV. OBJECTIVES OF THE STUDY
payments are made through online banking services. In this
connection one has to find out the level of awareness urban  To evaluate the level of awareness on E-Banking
people in internet banking. services among the customers of nationalised banks
Masochal et al., (2018) find out what extent do banks  To measure the level of satisfaction towards E-
implement innovative banking technologies in marketing Banking services among the customers of
strategies and practices and investigated the customers’ nationalised banks
perceptions on the level of satisfaction gained through the use  To study the challenges faced by Indian banks in
of technology in transactions with their banks. The findings adoption of technology and make recommendations
showed that most of the customers indicated that they were to tackle these challenges.
influenced to bank with a bank which uses advanced new  To suggest necessary actions that should be
banking technologies. Therefore, innovative banking considered by the commercial banks in order to
channels namely mobile banking, credit card, debit card, increase the impact of e-banking on customer
SWIFT and internet banking reflected very low levels of satisfaction.
usage by customers and also maximum of customers prefer V. NEED FOR THE STUDY
from E-Banking methods to traditional banking methods. Many inventions and revolutions have taken place in the
Unluckily, there was a vast gap between ownership and usage history of banking but no such things have changed the
of E-Banking resources entailing that there was no effective business of banking as fast as the e-banking revolution.E-
consumption of technologies owned by rural customers. banking has encouraged real banking behavior closer to
Therefore, it is necessary to identify what level of modern neoclassical economic theories of market functioning. As
banking technology services was expected by the urban there is presence of absolute transparency of the market,
people clients (both business and retail) can make comparison of the
Joshua and Koshy (2018) examined the different usage services provided by various banks easily. Thus, e-banking
patterns by customers of the technology enabled services services whether delivered online or through other
provided. In India, most of the banks offering service a mode mechanisms, have spread quickly in recent years. The study
of electronic banking such as ATMs, internet banking, phone aims to find out the preferences of the customers and
banking and mobile banking. The study was conducted effectiveness toward use of the E-banking. During the
among the customers of some of the leading banks in India research, we identify the awareness of internet banking
who were residing in the selected metro, urban and semi- among the customers of different banks too. Also, it aims to
urban bank centers in India. The findings showed that find the customer satisfaction relating to E-banking service.
customers have more aware about ATMs and the level of
adoption of other electronic banking means like Internet VI. SCOPE OF THE STUDY
banking, phone banking and mobile banking in spite of their The scope of the study restricted to chennai city and the
potential were yet to pick in a big way. customers utilizing digitial banking system.Banking sector is
III. STATEMENT OF THE PROBLEM providing various services to their customers to fulfill the
needs and requirements of them. Particularly E-Banking
The primary benefit of e-banking from the bank customers services play a vital role in the present scenario of banking.
point of view is significant saving of time by the automation E-Banking services are technology oriented and customers’
of banking services processing and introduction of an easy needs educations and technical knowledge to operate the E-
maintenance tools for managing customers money.In India, banking channels. Even though there are plenty of E-Banking

© 2019 IJRRA All Rights Reserved page - 84 -

Ms.D.Charumathi et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Vol. 6, Issue 2, June
2019, pp. 83-88
services are available the researcher concentrates on four VIII. SAMPLING METHODOLOGY
major E-Banking services such as Automated Teller Machine
Population:
(ATM), Mobile Banking, Internet Banking and Phone
The study of various characteristics relating to items \
Banking. The awareness and usage of E-Banking services are
individual belong to a particular group is called as population.
mostly found among the urban customers. In urban areas only
The population of the study consists of the different target
almost all the sectors of banks looking forward to introduce
respondents like Employee, Businessmen, Students and
various kinds of electronic channels towards the fulfillment
professional Using electronic banking services of nationalised
of requirements of educated customers. Therefore, it is
banks
essential to know the perception, awareness level and
Sampling Method/ Technique:
satisfaction level of banking customers those who are using
The sampling technique used was non-probability
E-Banking services.
sampling method is adopted in this study. It refers to the
VII. RESEARCH METHODOLOGY technique where the probability of each cases being selected
from the total population is known. The sampling technique
RESEARCH DESIGN
used is a combination of stratified plus judgment sampling
A research design is purely and simply the framework or plan
which is used in solving everyday business problems and
for a study that guides the collection and analysis of data. It is
making public decisions.The sample size is 140
a blue print that is followed in completing a study.
DATA COLLECTION METHODS
Descriptive Research Design
The present study has employed both the primary and
Descriptive research design includes surveys and fact
secondary data. Primary data are generated by a study
findings, enquires of different kinds. The major purpose of
specifically designed to accommodate the needs of the
Descriptive research is description of state of affairs, as it
problem at hand. The methods used were direct survey from
exists at present. In social business research, we quiet often
the Customer using E-Banking services. Here secondary data
use the term Ex post facto research for descriptive studies.
were collected from the records available in the company and
When the researcher is interested in knowing the
through the internet.
characteristics of certain groups such as age, occupation,
DATA ANALYSIS
experience etc, a descriptive study is necessary. Hence the
RELIABILITY TEST
researcher has chosen descriptive research method for the
study.
Reliability Statistics

Cronbach's Alpha N of Items

.908 50

Inference:
The Cronbach’s alpha coefficient for 50 items is 0.908 suggesting that the items have high level of internal consistency.
CHI SQUARE ANALYSIS
CHI SQUARE TEST
Null hypothesis (Ho): There is no significant difference between the overall ratings of
E -banking services and the occupation of the respondents.
Alternate hypothesis (H1): There is significant difference between the overall ratings of
E -banking services and the occupation of the respondents.
Chi-Square Tests
Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 93.778a 9 .000

Likelihood Ratio 121.769 9 .000
Linear-by-Linear Association 29.690 1 .000
N of Valid Cases 140

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Ms.D.Charumathi et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Vol. 6, Issue 2, June
2019, pp. 83-88
a. 1 cells (6.2%) have expected count less than 5. The minimum expected count is 4.20.

Inference: facility and their perception toward the internet banking

The Pearson chi square significant value is 0.0 which is lesser services.
than 0.05. Hence reject null hypothesis. Therefore, there is Alternate hypothesis (H1): There is significant between the
significant difference between the overall ratings of E - experience level of the customer using internet banking
banking services and the occupation of the respondents. facility and their perception toward the internet banking
ONE WAY ANOVA ANALYSIS services.
Null hypothesis (H0): There is no significant between the
experience level of the customer using internet banking
ANOVA

Sum of df Mean Square F Sig.

Squares

Between Groups 46.200 3 15.400 10.247 .000

E TICKET BOOKING Within Groups 204.400 136 1.503
Total 250.600 139

Between Groups 26.600 3 8.867 10.767 .000

ACCOUNT OPENING AND
CHEQUE BOOK REQUEST Within Groups 112.000 136 .824
Total 138.600 139
Between Groups 34.650 3 11.550 18.700 .000
FUND TRANSFER Within Groups 84.000 136 .618
Total 118.650 139
Between Groups 3.850 3 1.283 1.039 .008
TRANSACTION HISTORY
AND BANK STATEMENT Within Groups 168.000 136 1.235
Total 171.850 139
Between Groups 19.600 3 6.533 12.205 .000
DEMAND DRAFT/D-MAT
ACCOUNT STATEMENT Within Groups 72.800 136 .535
Total 92.400 139

Inference: Null hypothesis (Ho): There is no significant difference in the

Here p values are lesser than 0.05. Hence reject null usage of internet banking services for various purposes by the
hypothesis. Therefore, there is significant between the respondents.
experience level of the customer using internet banking Alternate hypothesis (H1): There is significant difference in
facility and their perception toward the internet banking the usage of internet banking services for various purposes by
services. the respondents
ONE SAMPLE SIGN TEST
Test Statisticsa
TRASFER OF FUNDS MAKE ENQUIRY ON THE ORDER A CHEQUE
- ONLINE BILL TRANSACTIONS - BOOK/ACCOUNT
PAYMENT CHECKING ACCOUNT STATEMENT - PAY
BALANCE UTILITY BILLS

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Ms.D.Charumathi et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Vol. 6, Issue 2, June
2019, pp. 83-88

Z -1.737 -4.900 -.684

Asymp. Sig. (2-tailed) .082 .000 .494

Inference: It is found that the Z value is not within the measures for a perfect E-Banking security system
acceptance region of null hypothesis (Z = -1.96 to 1.96) in such as bio- metric and iris recognition etc.
respect of purpose like make enquires on checking account  The bankers should take efforts to popularize the
balance .therefore Ho is rejected. Hence there is significant remaining mobile banking services such as fund
difference in the usage of internet banking services for various transfer, statement of accounts, ticket booking,
purposes by the respondentsIn respect of purpose like transfer utility bill payments, De mat account services, inter
of funds online bill payment and order a cheque book, the Z mobile payment services etc. The businessman and
value is within the acceptance region. Therefore Ho is private employee have more knowledge about E-
accepted. Hence there no significant difference in the usage Banking services than government employee.
of internet banking services for various purposes by the X. CONCLUSION
respondents.
Banking industry is playing a vital role in the economic
IX. FINDINGS OF THE STUDY development of a country and it became a globalized service
 The Cronbach’s apha coefficient for 50 items is sector in the present scenario. In banking industry,
0.908 suggesting that the items have high level of technological advancement has brought a significant change
internal consistency. in banking services. In the current situation, Indian
 The Pearson chi square significant value is 0.0 which commercial banks are providing plenty of E-Banking services
is lesser than 0.05. Hence reject null hypothesis. for their customers. ATM, Mobile banking, Internet banking,
Therefore, there is significant difference between the Phone banking, Electronic fund transfer, Debit card, Credit
overall ratings of E -banking services and the card, Corporate banking terminal, SWIFT, point of sale,
occupation of the respondents. RTGS, NEFT are the foremost E-Banking channels.
 From the One Way Anova Analysis it is found that According to the study, almost all commercial banks are
Here p values are lesser than 0.05. Hence reject null offering E-Banking services for their customers. ATM,
hypothesis. Therefore, there is association between mobile banking, internet banking and phone banking channels
the experience level of the customer using internet are frequently used by the customers. According to the
banking facility and their perception toward the customers’ perception and level of awareness on individual
internet banking services. E- Banking channels, ATM and mobile banking are well
 From the One Sample Sign Test, it is found that the known services. The level of satisfaction on E-Banking
Z value is not within the acceptance region of null services, cash withdrawal and balance enquiry facilities in
hypothesis (Z = -1.96 to 1.96) in respect of purpose ATM channel, SMS alerts and fund transfer in mobile
like make enquires on checking account balance. banking services, viewing account balance, online bill
Therefore, Ho is rejected. Hence there is significant payment and RTGS in internet banking services and check
difference in the usage of internet banking services account balance in Phone banking services are the most
for various purposes by the respondents. satisfying services. Based on the empirical evidences this
SUGGESTIONS AND RECOMMENDATIONS study concludes that commercial banks’ customers are
 After analyzing the findings, the following moderately aware about the foremost E-Banking channels of
suggestions have been made to the group and great ATM, mobile banking, internet banking and phone banking
care has been taken in making these suggestions for channels and satisfied in all the services that are related to the
improvement of Audience response to Audience four channels.
perception through different choices: XI. REFERENCES
 It is suggested that the bankers should take measures [1]. Tsoukatos and Ram Kumar Sinha (2016), “E-
for developing confidence about E-Banking Banking and E-Services”, Published by Pacific
operations among older generations. Books International, Delhi, P.240.
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problematic aspect among the customers. Hence, it (2007), “E-Banking in India Challenges and
is suggested that the bankers took care of the Oppourtinutes”, New Century Publications, New
availability of cash in ATM centers particularly in Delhi.
remote ATM locations. [3]. Abdullah Bin Omar, Naveed Sultan, Khalid Zaman,
 Internet security is the one of the prominent set back Nazish Bibi, Abdul Wajid and Khalid Khan (2017),
of E-Banking operations in many times. It is “Customer Perception towards Online Banking
suggested that the bankers should take initiative and Services: Empirical Evidence from Pakistan”,

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Ms.D.Charumathi et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Vol. 6, Issue 2, June
2019, pp. 83-88
Journal of Internet Banking and Commerce, August, Analysis in the Greek Banking Industry”,
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[5]. Evangelos Tsoukatos (2008), “Determinants of
Customers’ Perceptions of Electronic Services: An

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