Measuring Service Quality of Internet Banking Portal in India

Abstract

1. Introduction & Problem StatementsWith the popularity of the internet, innovation in technology and the changing needs of customers, banking services have been undergoing tremendous transformation. In banking services, a new technological innovation is internet banking portal. Internet banking portal means that stages of the financial transactions can be processed electronically. This is achieved by replacing personal interaction and physical facilities with technological solutions. As a consequence, customers are able to carry out different financial transactions at site including paying bills, booking railway and air tickets, charging mobile phone and TV, donating money, paying tax, filing tax return, viewing bank statements, purchasing stocks and other financial products (e.g. insurance) and so on. Thus, internet banking portals transfer the all in one principle from the old economy-to the internet (Bauer & Hammerschmidt, 2002; Jun & Cai, 2001).Service quality is an important determinant in differentiating service offering and building competitive advantage, since the costs of comparing alternatives are relatively low in online environments (Santos, 2003). Because of this, service quality is a crucial issue for internet banking portals.According to a report by global management consultancy McKinsey & Company, as many as 7% of account holders in India are using the Internet for banking transactions in 2011. This represents a seven fold jump since 2007 (McKinsey & Company Report, 2010). Today most of Indian public and private sector Banks have an internet banking portal, escalating competition between Indian banks. Therefore, Internet banking Portals are required to put more emphasize on service quality due to growing competition in the internet banking industry.In 2009-2010, Indian public sector banks and Indian private sector banks respectively reflected growth rates of 14.21% and 27.66% in their total net profits (McKinsey & Company Report, 2010). Because of intense competition between Indian public and private sector banks, this study includes only the top five public and private sector banks for measuring and comparing service quality of internet banking portals respectively. In order to enhance customer loyalty, banks are required to emphasize customers' requirements related to quality internet banking portals, which are steadily increasing over time due to growing competition in the banking industry (Jun & Cai, 2001).The most important step in providing a sophisticated level of service through an internet banking portal is to identify and measure the dimensions of portal quality. Based on the understanding of the key service quality dimensions and the perception of customers toward internet banking portal service quality, managers may discover methods to improve customer satisfaction, build customer trust, and create loyal customers. Despite these, there are very few efforts devoted to the area of service quality of internet banking portal. In view of this, the following research objectives are formulated for our study.2. Research ObjectivesThe importance of service quality and the challenges facing Internet-based services necessitate insights on the part of managers about what attributes customers use in their evaluation of internet banking portal service quality. However, a rigorous measurement instrument for internet banking portal service quality has not been developed. In order to bridge this gap, we have formulated the following research objectives.1) To identify the salient internet banking portal service quality dimensions.2) To confirm the identified major service quality dimensions of internet banking portal.3) To determine the relative importance of each identified internet banking portal service quality dimension in measuring or predicting overall internet banking portal service quality.4. …