Client Cluster Identification of Internet Bank Services

Abstract

Remarkable developments and innovation in the information and communication technology has led to significant paradigm shift in banking sector. Internet banking phenomenon has been widely accepted by the banks, as a convenient channel of service delivery owing to its multiple advantages. In spite of being beneficial to the users as well, the acceptance rate of this delivery channel is very slow among bank’s clients. In order to increase consumer internet banking, banks must take steps to leverage internet banking adoption among customers. Banks have to promote internet banking by segmenting their targeted customers and positioning them with suitable strategies. This study aims at segmenting the customers based on their usage of services and to identify the perceptions of consumer segments regarding the various attributes of online banking. Hierarchical cluster analysis, k-means cluster analysis was used to segment the respondents based on their usage of the internet banking service. The respondents were formed into three clusters viz, extensive users, moderate users and constrained users. A profile of each segment of user is made based on their demographic, psychographics and perception towards attributes of internet banking. Subject to their profile, usage patterns and their perception towards different attributes of internet banking, various recommendations were made to the service providers to formulate strategies targeting the specific type of users. This study would be facilitate the bankers to draft user focused strategies for increased usage of internet banking services.