The biggest benefits to the bank are saved costs, reached a new segment of population, efficiency, enhanced the bank reputation in order to provide better customer service and increased customer satisfaction (Ngandu, 2012). The cost of internet transactions was less than the cost of branch transactions (Ngandu, 2012). Internet banking enhanced the relationship between the bank and the customer, because bank provided service directly to customers. Even customers not able to personally appeared at physical branch, this would create customer loyalty (Yohannes, 2010). Internet banking services are a must for banks due to increased online service provided by other financial institutions, for example insurance companies (Raghunandan, 2012).
IMPACT OF E BANKING ON TRADITIONAL BANKING SERVICES Dhanya PV ¹ ¹ M,Phil., Scholar, Dept. Of Economics, Gandhigram Rural Institute- DU, Gandhigram, Dindigul, Tamil Nadu, India, email@example.com Abstract Banking Industry is the backbone of the financial system of a country. The need to survive in the changing environment has leaded the banking industry to adopt internet as a medium of operating in the market. Internet banking provides alternatives for faster delivery of banking services to a wider range of customers. Internet banking refers to the use of internet as a remote delivery channel for banking services.
Also online banking has grown in a big way in nations like France, Canada, Australia, Poland, South Africa and Belgium. 1.2 BENEFITS OF E-BANKING There are numerous benefits of Online banking undoubtedly. It saves time by allowing direct transaction from office, home or any place. The virtual medium relieves customers from visiting the bank and waiting in a queue and provides a mental and physical relief from the unwanted rushes in the bank. The second important advantage is the convenience.
The biggest impact is in the area of competition. Smaller banking institutions can access the same technology as major banking institutions and, therefore, can compete with them more effectively for businesses. In the banking sector, activities begin with banks to automate accounts receivable, enabling staff to create, update and maintain customer records. Banking systems must conduct electronic transactions. Direct deposit is an example of an electronic transaction.
Therefore, customer service is an essential in the banking service to compete in the market driven environment. Measurement of service quality is difficult in banking sector as compare to the manufacturing sector as services are intangible in nature. Increasingly, service quality has used as a strategic tool by the various market players to position themselves effectively in the market. Service quality has become a critical prerequisite for satisfying and retaining valued customers in banks. The interest is largely driven by the realization that high service quality results in customer satisfaction and loyalty with the product or service, greater willingness to recommend someone else, reduction in complaints and improved customer retention (Zeithaml et al., 1996).
Impact of separate factors affecting the consumer’s intention to use Internet Banking Introduction Internet banking is defined as an internet portal, through which customers can use different kinds of banking services ranging from bill payment to making investments. Banking can be done literally from anywhere if one has a computer and net connectivity. Internet banking helps consumers in conducting fast and convenient financial transaction activities. The breakthroughs in information technology occasioned by the introduction of the telecommunications networks and the computer system persist to shape the way banks and their corporate relationships are structured worldwide. The pressure of globalization, consolidation, deregulation and rapidly
Furthermore, by implementing CRM system could also provide cost-efficiency and enhance the customer relationship with financial institutions. Besides, sales, customer support and marketing can be done by CRM system, thus the use of technology helps financial institutions cutting down lots of cost as some tasks can be done by using CRM system. (technology allow bank to create new system or enhance
For this reason, most countries regulate the various functions in a bank. There are various payment services that are usually provided by a bank. The main services include borrowing, lending and cash transfers. The growth in technology has led to the advent of computers which is one of the technologies that has been fully embraced by the banking sector. As the computers get more sophisticated by the day, so does the impact of using technology in banking.
LITERATURE REVIEW Dr C. Paramasivan (2009) in his studies entitled “customer satisfaction through information technology in commercial banks” highlighted that, bank account holders are somewhat satisfied with the services provided by their banks and the banks should try to enhance their services in order the satisfy their customers in a cost effective way with the help of information technology. Mishra (2005) in his paper stated the benefits and the security concerns of online banking. According to him increased customer loyalty, improved customer access, attracting new customers, offering of more services are the primary drivers of online banking. But in a survey conducted by the online banking association, member of institutions rated security
Experience in matured markets has proven the value of credit bureaus in the development of consumer credit. With the possibility of more credit bureau’s competing with CIBIL looming large, further advancement and innovation to quickly assess customer credit history will be a critical factor to provide convenience banking to customers. The day is not far away where you call up your Bank for a loan, provide your UID/PAN Number, your credit score verified, eligibility calculated and the processing is completed almost instantaneously and the loan amount gets credited to your account within 24