Bankers and customers awareness of the advantages of electronic banking have draw the interest of many researchers, particularly from the last decade. Berry in 1984 emphasis that the management must examine employees as "internal customers". Protection of high level of employee's pleasure and retention is significant if banks are to attain high level of customer pleasure and retention.
(Bowen, Gilliland & Folger, 1999) supposed that when front-line employees feel they have been behave positively, they are more likely to behave towards the customers positively. In a consequent study of the relationship between bank customers and employees, (Bowen, Schneider & kim, 2000) found that employee confidence is strongly related to customer fulfillment, that is, when bank customers recognize front-line employees are happy with their work, bank customers are more likely to be fulfilled with the service they receive.
Normally banks allocate their managers responsibility for the advertising of the e-banking services to the customers (Lymperopoulos & Chaniotakis, 2004). Now it is the manager's consistency to make sure that the staff is proficient, dutiful and
well informed about the variety of services, which are going to be provided by the bank (Moutinho, Davies, Deng, Miguel & Alcaniz, 1997).
(Moutinho & Phillips, 2002) found that Scottish bank managers considered efficiency and enhancement of customer service to perceived advantages of e-banking. Similarly, (Aladwani, 2001) discussed the rapid, easier, and more reliable or enhance services for customers, and improvement of the bank's competitive position to be the most important drivers of online banking among banks.
2.2 THEORETICAL FRAMWORK
2.2.1 Electronic Banking System
Computerized banking system is the use of electronic equipment and application of advance computers and communication technologies for banking functions i.e. receiving, collecting, transferring, paying, lending, investing, dealing, exchanging and servicing of safe deposits, withdrawals, agency, trusteeship, custodianship money and claims for money both domestically and internationally. Automation banking is manifested, in the form of electronic banking and computerized banking otherwise known as Backroom Technology (Sinkey, 1990).
According to (Welch, 1999) the e-banking system is a system that can also be narrated as a group of electronic system or equipment called electronic fund transfer system, which involves the application of advance computer and communication technologies to the problem of effecting payment.
The transaction that is made other than paper transaction is the electronic fund transfer (EFT) system can be made by e-terminals, computers systems and telephonically that consist a financial organization to make debits and credits. The financial organization consists of Automated Teller Machine (ATM), Point of Sales, |Automated Deposits of Payroll, Electronic Cheques, Home Banking, Direct Deposit Funds (electronically), Debit Cards and Credit Cards etc.
2.2.2 Teller Banking
The Teller Banking refers as an assemblage of Cathode Ray Tube (CRT) terminals, hard-copy terminals, printers, software and other devices that support the bank teller by conducting routine teller functions. It is linked to a central computer so that transactions can make instantly in the centralized database (Evans & Schmalensee, 1999). The banks that I have selected for my analysis have two types of computer operations.
I. On-line Network
In this network the terminals in the banks are directly linked with the server installed in the main central office. The entries can be made from terminal from any branch. On-line networks indicate that a terminal unit is connected directly to a central computer. Entries are made by each branch and are accrued in the server for updating the entries at the end of the day. The certain branch itself can get the required customer's necessary entries like accounts number, accounts type and balance information.
II. Real-time network
In real time network, computers store the information, transaction, data handling, processing, querying and updating in a central time. For this purpose telephone and telegraph system can be used. The concerned employee of the bank can get the information and data regarding the customers, by acquiring from the system.
E-Banking service which are the most common are demand draft, demand deposit account, saving account, debit card, credit card, reconciliation of cheques, automated clearing system, commercial loans, payroll of customers, file information, cost accounting etc.
2.2.3 Automated Teller Machine (ATM) CARD
ATM card is made of a plastic having magnetic stride that hold all the information about the customers such as customer name, account, card number, card limit, concerned bank etc. According to (Rose, 1999), ATMs can be described as computer terminal, having record-keeping system and cash vault in one unit, permitting customers to enter the bank's book keeping system with a card holding a Personal Identification Number (PIN) or by punching a special code number into the computer terminal linked to the bank's computerized records 24 hours a day. Banks offer different retail banking services through ATM cards to its customers. When a card is slotted into a machine, the magnetic reader of the machine reads the magnetic stride and verify for processing.
Both the services either Automated or human tellers boost up the production of the bank even during banking hours. These saves the customer time in service delivery and also queuing in bank halls, and they can invest their saved time into other activities.
Automatic Teller Machine is a cost-efficient way of yielding for high production than human tellers. The average transactions for ATM per month are 6,400 compared to 4,300 with human tellers (Rose, 1999).
Moreover after the banking hours ATMs remains work that is continual productivity for the banks but human teller stop working.
2.2.4 Technical Support and Development Systems
The customer information seems to be feasible for the employees to offer good and enhanced services that are significant parts of internal marketing (Gronroos, 2001). If the customer information database system is missing employees might begin to reveal non-challenge approach towards their job, which might decrease in good time of e- banking market.
Remarkable impression has been witnessed in the development of information
technology, which has escort to the provision of useful support system in internal banking market. However, sustainable system and information technology has allowed the banks to accomplish their promises to offering customers with quick, helpful, swift, accurate, and enhance services as compared to manual banking system.
Furthermore the shortage of technological systems support also has a pessimistic impact on internal marketing process in the organization (Gronroos, 2001).
IT is becoming extremely important for more and more service procedures. If a complex web site is deliberated so that customer can find it difficult or unexciting. Those customers using a website do not get a rapid answer to their transaction; they might rapidly drop interest in the firm and its assistance. It is so simple to go to the next website. However, the Internet here is not critical. IT should also offer to get in touch with employees to get easily recoverable and dependable information about the customers they are serving. Actually, connections or communications between employees and customers are exaggerated and produce bad services quality. Different types of technology and corporeal resources used in the services procedures must also be
customer-friendly and dependable.
A technological resolution, or a corporeal resource that is mechanized to the wishes and needs of the customers and that fits the circumstances in which it is to be employed, may well enhance the services. It can increase the efficiency of procedures and profitability as well (Gronroos, 2001). In addition, technological foundation enables personnel to deliver a better with rapid enhanced services in short time. Suitable technology and physical resources, like computer systems tools, equipment, and documents may increase working conditions at the same time and enhance the inspiration of employees to give high quality services.
While on the other hand, where the technology does not used and those employees do not willing to use has a negative outcome on both internal connections in the organization and on external with the customer association like as in the ordinary or manual banking systems.
2.2.5 Interactive Marketing
The edge between production and utilization represents the buyer-seller relation that is truth of chance happen. The marketing impression of the interface occurs in interactive process that is called interactive marketing gathering. It happens at the time when the buyer and seller interact (Gronroos, 2001). In addition, customers are not only customers or consumers of services but also co-creators of the services. In this respect they are also resources in the interactive marketing process.
However, operational systems, physical resources, information systems, and the customers all these manipulate interactive marketing presentation. Although the role of the employees is most often paramount, it should not be over-emphasized (Gronroos, 2001). He also explained interactive marketing as a variety of circumstances in which customers cooperate only with physical resources and systems.
Using an ATM, making telephone call, sending a messages from cell phone or purchase on the Internet are the examples of these circumstances. Second, employees require a service-oriented equipped system and appropriate technology, databases of customer and other corporeal resources to be able to generate optimistic moments of truth. However, if technology or computerized service system does not work, either servers are down or cannot be functioned; the key to recovering the situation is a service-minded and customer conscious (Gronroos, 2001).
The marketing influence of the customer, dealings with the people, systems, technology and other non-marketing utilities ascertains whether customers or providers, will continue doing business with a given firm (Gronroos, 2001). All these customer dealings are interactive.
2.2.6 Analytical Framework Tool
2.2.6.1 Emerging of e-Banking Model
The principal factors of customer experience found in conventional e-banking are demonstrated in Figure 2.1. They contain the following:
i) Navigation: or the capability to access and move almost the site,
ii) Information: that is giving sufficient information to assist customers to make a purchase decision,
iii) Support: that is providing customer to carry regarding a numbers of portions of the product or service and be able to answer questions on time.
iv) Logistics: that is, usage, covering, and delivering the corporeal goods or service to the customer and organizing for payment.
The execution of above four elements is expected to have a positive impact on customer loyalty and, in turn, on long term growth and profitability (Heskett, Sasser & Schlesinger, 1997). Each of the above mentioned elements can also influence each other. For example, if no sufficient concentration is paid on making on the web site, that may have human interaction designed, easy to use, the result may be the raise of customers in number with their support. Information management can greatly decrease both customer support and logistics costs. Even today most companies prefer to build their viable priorities covering the first two elements: navigation and information.
An e-banking tool that develops the usual e-commerce aspects is outlined in Figure 2.2. Direction findings are still a main element in e-banking that suggest the elements to keep in mind when designing a web site (Wen, Chen & Hwang, 2001).
Customer oriented cyberspace design and various issues of e-quality pertaining to the tangible aspects of the site that are the focus of many on-going research efforts, mostly from the marketing area (Parasuraman & Grewal, 2000).
An e-banking is an essential unified aspect of information handling. The ability to actually create and handle a customized experience in the customer interface discussed by (Wind, 2001), who presents the concept of customerization in e-banking services. The idea of customerization moves ahead of simply identifying customers and managing web pages with account information. Customerization creates a true customized experience that integrates including a number of elements (Bakos & Brynjolfsson, 1999) with the Customer's lives. Although it believes that a successful site will result in customer support requests, this has not been the experience of many successful internet firms i.e. Everdream.com, Amazon.com, LandsEnd.com etc, which have recognized the importance of customer support within e-service.
In e-banking, however, the dimension of logistics are replaced with financial intermediation and the management of risk (Holmer & Zenios,1995). In financial services, it is not the substantial transfer of products, as is the transfer of risks and the main element in the customer experience in e-banking, is trust, which can be achieved by an organized delivery of all the above-mentioned elements of the framework.
Despite all the presented and promising characteristics of e-banking being suitable 24 hours in a day and 7 days a week, dependable and at least to make safe with traditional banking. Trust is a thought to be the basis for successful and lasting relationships, as it finds out the
customer's future actions and loyalty towards the business (Berry, 1984). (Reicheld & Schefter, 2000) also report that e-customers are less price sensitive as originally thought and more sensitive to trust.
Today, the investigation about the concept in e-banking, including its past history and its sub-aspects is at best in its early stages. However, the deficiency of relevant literature specific to e-banking, e-loyalty is considered by both academics and practitioners as the most important driver of long term growth and profitability (Reichheld & Schefter, 2000)
Figure 2.1:
A traditional e-commerce framework
Loyalty
Navigation
Information
Support
Logistics
Figure 2.2:
An e-banking framework
Navigation
Support
Trust
Intermediation
Information
Loyalty
CHAPTER 3
RESEARCH METHODOLOGY
3.1 CHOICE OF TOPIC AND DATA
In this chapter, I will concentrate on my objectives to know how and why I preferred this topic. After going through the e-banking structure in Pakistan on International Marketing with the competition of foreign banks at the same time and same place, it stands important for us to bring into black and white of the automation or computerization of banking sector in Pakistan.
Although the banking industry in Pakistan has observed a marvelous progress and advancement, but still there are various problems unsolved. Some banks are creating developments in terms of customer satisfaction concerning with more efficient, rapid and enhanced and accurate delivery of banking services. This intensity of satisfaction has an effect on the customer's preferences for selecting a bank to deal business with. Due to this vision in mind, we found it interesting and selected two banks, one commercial bank MCB (Muslim Commercial Bank Limited) and another bank UBL(United Bank limited) simultaneously. There are many foreign banks in Pakistan, like Dubai Islamic Bank, Standard Chartered Bank, HSBC Bank Middle East Limited and Citibank N.A. etc
These two banks are using different modes of operational transactions for their customers and it has enabled us to consider one bank more urbanized in technology and the other one mostly on manual basis.
3.2 CHOICE OF THEORETICAL FRAMWORK
The unique work about banking industry has also given us an insight into the literature review of the study with respect to services of e-banking and there rapidness, flow as compared to manual or ordinary banking. The literature review facilitates to gain more knowledge of the study and the logical portion. It also enables to know about the customer's loyalty and trust on e-banking services, which can be on the base of banking information through their websites. It gives the support regarding various aspects of the e-banking Logistics, product and services. It handles packages and deliveries of the e-banking physical goods and services to their customers and arrange for payments.
According to (Gronroos, 2001) the development in technology has an important and remarkable attention because the technology and physical resources has used in the service process that can be customer-friendly and reliable.
A technological solution or a physical resource is the geared to the needs and wishes of the customers. Which fits the situation in which it is to be used, may well enhance the quality of the service. It can improve the efficiency of operation and profitability as well (Gronroos, 2001). These helped in data compilation from our study by the state of questionnaire.
3.3 DATA SOURCE
For E-banking in Pakistan, I have decided to apply the both approaches qualitative and quantitative, because the both approaches are appropriate and suitable methods to construct a research work. Qualitative research approach is open-ended, in-depth, and based on unstructured response from the customer's side that reflects their views feelings and attitude. On the other hand through quantitative approach, we can get response from the market in the form of summarized values, averages, percentages and other statistical values (Cateora, Philip, Ghauri & Pervez, 2000) and the research base on the memories and the experiences from those who have been concerned such type of situation. In my research work, I have focused on the both approaches. The data were collected from United Bank Limited (UBL) and Muslim Commercial Bank (MCB) in Pakistan.
3.4 DATA COLLECTION METHOD AND PROCDURE
My secondary sources of data is textual i.e. collection of data from business reviews and reports, articles, brochures, professional publications, annual reports and financial reports of United Bank Limited (UBL) and the Muslim Commercial Bank. (Yin, 1994) has described six types of sources for evidence to collect the data e.g. archival of the records, interviews, direct observation, participant observations and physical objects. The direct observation relates with interviews, which we have made through a questionnaire survey consisting of 12 questions. The purpose of this type of finding is an advancement of automation/computerization of banking services.
The information for the field study and to gather of essential data, we have formulated questionnaires. The questions are planned to incorporate open-minded with the purposes of findings and the exact reply of the customer's preferences that, why they have chosen the e-bank objectives, their satisfaction level with the e-banking services, accuracy of e- banking services, approaches and reasons towards the process of the banks.
In the first question I have asked from the customers about the bank choice. It will give the data that, what kind of thinking the customers have before choosing the banking system.
In the second question I will come to know about the expectation and reliability, either they met or not, which they are expecting from an e-banking system.
To know about the efficiency and rapidness of the services like cash deposit, withdrawals, transfer of money, monthly salary process and preparation of statement of account, I have included a question that will enable me to know the services from the banking side are efficient or not.
In the next question I will be able to know about the percentage of accuracy while opening an account in an e-banking system.
Data of the customers about the satisfaction level will be known through the question number five.
I have also included a question that will help us to know about the time taken during the e-banking services.
I have also asked a question that will give me a comparison between e-banking system and a banking system that is not using the electronic services through the answer of the customers.
Question number eight gives me the data about the customer's satisfaction regarding e-banking system.
I have also arranged a question about the ATM services to know either e-banking system is time saving or not.
In the last two questions I have asked recommendations for e-banking system and suggestion
The views and ideas on the bases of above description will help me to conclude about the customer's loyalty on e-banking system that provides rapid, enhanced, accurate, efficient services including with time saving as compared with an ordinary banking system and also boost up the customers satisfaction level which they are expecting.
I have already planned to ask the questions according to the following summary. I thought that it will give me the idea of the customers to their age wise. I have also included the female views regarding our questionnaires.
Description
MCB
UBL
Total percentage
Age 18-25
10
10
20%
Age 26-50
25
25
50%
Age 51 and above
15
15
30%
Male
43
40
83%
Female
7
10
17%
Employees
35
25
75%
Businessmen
15
10
25%
For gathering the data from the customers I have planned a five days visit to the concerned bank branches. I physically visited both branches of United Bank Limited and Muslim Commercial Bank. There I met the customers one by one and got their views about the e-banking system. I asked questions from the customer randomly either he or
she can spare few minutes to answer the questions. I distributed the question paper to the customer and received back at the same time after their answering.
After collection of required data and information from the customer's through
questionnaire, I have evaluated the answers of the questionnaire and put them in a percentage form for the objectives of data analysis, explanation and presentation.
3.5 VALIDITY AND RLIABILITY
I tried to generate exact data that will allow me to make research, which reproduces the circumstances on the ground. I tried to determine and discover the validity and reliability of the data composed for analysis.
Reliability can be identified as a condition whereby scales show a satisfactory level of internal steadiness, uniformity, self-sufficiency and self-determination. Analysis of reliability is observed when the instrument is designed to determine stable channels.
Validity submits the degree to which a study precisely replicates or reviews the particular idea that the researchers are trying to calculate. (Campbell & Stanley, 1966) After taking data from our respondents, I have made sure that, data is confirmed from different sources, so that why questionnaire planned and interviews were established to review general awareness of the banks' automation/computerization procedure.
Questionnaire is planned and prepared for customers with the purpose of finding how professional, their accuracy level, satisfaction level, customers expectation level and how much time it takes them to get deposit and usage of other services offered by the bank. In this respect, we mainly eager to find out how customers acts to the services delivery in areas of withdrawals and deposit, ground works and arrangements of account balances, loan achievements and handling out the monthly salary and statement of accounts preparation.
The questionnaire will be based on Customer's background information, ATM
performance. We want to find out how rapid and more enhanced banking services which bank offer to its customers usually. The questions here regard to ATM, we required to finding out how the automated system functions in relation to rapid and enhanced and more efficient in the banking operations. Finally, general questions determine customers' general observations and views about issues they preferred before selection of bank to do business
3.6 STUDY LIMITATION
In this study there will be lots of Limitations. The study is curbing to get empirical data by questionnaire from customers in the Capital area of Pakistan, who are using e-banking services. Only 100 customers from the both banks having different age category are asked the questions to some extent delimit the overview of the results and influence towards the experiences. The research will mostly be considering the corporate clients of the Muslim Commercial Bank (MCB) and United Bank Limited (UBL) in Pakistan.
I have decided to concentrate more on the study of customers having the age range 26-50, but banks may not be interested in people much from this age range, rather than older customers who are likely more supposed to take higher loans, trade stocks etc. Although, I supposed, that banks should not ignored their younger customers aged below 26. They should deem with awareness of the satisfaction level of these customers, as they are the valued customers who use the services for more time period in the future. That's why they should be paying more attention to the customers of the bank who they are using the services and not switch over to the other bank.
One more limitation of the fundamental study is that the questionnaire used includes only 12 questions for each bank. The questionnaire was urbanized and concise in purpose because of the time limitation and the situation under which the study was carried out. I have experienced that all this might be effect on the composed data and the study done on each of the aspects. Finally, there are many other factors, which can influence customer adaptation of electronic banking services such as computer self efficiency, compatibility, screen design, riskiness with enhanced and rapid flow.
3.7 STUDY SIGNIFICANCE
The significance of the automation in banking industry has not been well established in Pakistan in view of the customer scenario, as it is in developed countries. For instance, In USA the achievement recorded by most banks has been approved to successful use of banking system. This research study will investigate the level of Pakistani banks that are committed on advance technology and in conclusion the work would perform on the basis for further investigation and discussion on banking system. We hope the study will bear out the use of automation in banking sector and ATM, Credit Cards, Debit Cards, Cyber Cash, Mobile banking, Internet banking services influences customer preference and fulfillment of bank services approach.
