Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
Role of Customer Focused Information Technology in
Building Customer Satisfaction in Housing Finance
Institutions
Santhosh P. Thampi* and Krishnakumary M.R **
Information Technology (IT) and Technology based services are getting
wider acceptance in the society today. Information Technology plays an
important role in the Customer Relationship Management (CRM)
practices of Organisations. The objective of this paper is to explain the
effects of Customer Focused Information Technology on Customer
Satisfaction of select Housing Finance providers in Kerala, which is a
federal state in India.. Customers of selected Commercial Banks and
Housing Finance Institutions were included in the study. A detailed
analysis of the effectiveness of the customer focused IT services such
as user friendly website and IT enabled communication services on
building customer satisfaction are included in this paper. A structured
questionnaire was administered among 90 customers of the selected
Commercial Banks and Housing Finance Institutions from three districts
(Trivandrum, Ernakulum and Kozhikode) of Kerala. A five point scale
was used in the questionnaire. Judgment sampling method was used to
identify the respondents. Data collected were analysed using statistical
tools with the help of SPSS software. From the findings of the study, it
can be inferred that Customer Focused Information Technology plays
an important role in Building Customer Satisfaction. The findings of the
study will help the Housing Finance Institutions to understand the
customer opinions about their websites and IT enabled communication
services. This in turn will give them insights to formulate new strategies
to enhance the level of Customer Satisfaction through improved IT
enabled communication services.
Field of Research: Marketing – E- Marketing
Key words: Information Technology (IT), Customer Satisfaction, Housing Finance
Institutions
1. Introduction
Information Technology (IT) and IT enabled communication services are vital parts of
financial service organisations. Technology is an enabler in managing the pace and
quantum of change. It is considered to an effective tool in managing relationship with
customers in Housing Finance Industry. The promise of one to one relationships,
customer value analysis and mass customisation are now brought to reality by
unprecedented advances in IT, transforming the traditional approach to Customer
Relationship Management and to an integrated web enabled approach, featured by
tools like customer information systems, automation of customer support processes and
call centres (Ghodeswar, 2001).
* Dr. Santhosh P.Thampi, Associate Professor, School of Management and Business Studies,
Mahatma Gandhi University, Kottayam, Kerala, India. Email: drspthampi@rediffmail.com
** Krishnakumary.M.R, Research Scholar, School of Management and Business Studies, Mahatma
Gandhi University, Kottayam, Kerala, India. Email: krishnamalayil@yahoo.com
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
In the Housing Finance market of Kerala, the key players are Commercial Banks (CB)
and Housing Finance Companies (HFC). These players can together be called as
Housing Finance Institutions (HFI). These Housing Finance Institutions compete with
each other to increase their market share through grabbing maximum number of
customers. IT helps the organisations to achieve competitive advantage over other
organisations and there by attracts large number of customers. IT enabled
communication services are less costly than any other means of communication and is
suitable for making lasting relationship with customers. This kind of communications will
lead to increased customer retention, customer satisfaction and loyalty.
Customer satisfaction has long been recognized as a central concept and a critical goal
of all business activities. It is often defined as a judgment based on one or a series of
customer service interactions. Managing customer interactions through IT and IT based
communication services is an emerging trend in the current business scenario. User
friendly websites and IT enabled communication services such as E-mails, SMSs,
Instant Messaging System and system generated service calls are making Housing
Finance Institutions more customer friendly and making the customer more convenient
in doing business with the Housing Finance Institutions.
2. Literature Review
In current days Information Technology and communication services are used as the
tool for organizational communication, knowledge management and strategies (Laudon
& Laudon, 2002). Likewise technology is an important tool of an organization to attain
success in Customer Relationship Management application (Makie, 2001). IT has long
been recognised as a radical tool for redesigning business process to remarkably
improve organisational performance (Davenport & Short, 1990). The Technology allows
the Financial Service Institutions to achieve greater communication and better service at
lower cost (Sin et al., 2005). IT helps the Financial Institution to gain greater insights
into customer needs, behavior and expectations by developing and maintaining
interactive one to one relationship with customers. Technology plays an important role
in Customer Relationship Management in adding to firm intelligence (Boyle, 2004). The
advances in IT equip enterprises with the capability to collect, store, analyse and share
customer information in ways that greatly enhance their ability to respond to the needs
of individual customers and thus to attract and retain customers (Butler, 2000). The one
to one relationship with customer becomes possible through an integrated web-enabled
approach featured by tools like customer information system and automation of
customer support processes (Ghodeswar, 2001). Many customer centric activities are
possible through appropriate use of IT. IT facilitates changes to work practices and
establishes innovative methods for linking the organisation with its customers.
In the financial service sector, the use of technology to implement CRM and enhance
customer relationship is not a new thing. Customer relationship Management
Technology is an important strategic tool of an organisation to attain success in CRM
applications (McKie, 2001). It helps an organisation to provide more tailored offerings to
its customers. The concept of CRM when seen in the context of e-business or
transactions over an electronic medium, it translates into e-CRM which essentially deals
with managing customer interactions over the web (Mittal, 2001). After the adoption of
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
internet and availability of electronic channels of communication, it is becoming possible
to capture customer related information intelligently at the interaction stage itself.
Adopting e-CRM, it is generally less costly for any service firm to maintain and develop
an existing client relationship (Berry, 1983). From the website, the customer will get the
better information than from the staff of the Housing Finance Institutions. Internet as a
service delivery channel shifts the control of transactions from Financial Service
Institution’s staff to the customers (Mittal, 2001).
The new technologies have enabled the Financial service Institutions to clearly identify
and distinguish every customer and to serve accordingly. Satisfaction with the delivered
services has been suggested and empirically documented as affecting the customer
decision to continue a relationship (Ndubisi, 2003, Anderson, 1984; Fornell, 1992;
Hirchman, 1970). The confirmation/disconfirmation theory of Churchill and Surprenant,
1982; Oliver, 1980, explains that satisfaction is achieved when expectations are fulfilled.
Customer focused Information Technology dimension applies IT to collecting customer
data and delivering personalised services to maximise the value of each customer (JaShen Chen, 2009). According to Hirchman (1970) and Richins (1983) when customers
are satisfied, the likelihood of exit from the relationship and negative word of mouth will
reduce greatly. In other words customer satisfaction has a direct effect on customer
continuity.
3. Research Methodology
3.1. Objectives of the Study
Information Technology based customer relationship practices is an emerging trend in
the Housing Financial Institution’s (HFI) Business. The Housing Finance providers in
Kerala are also making use of IT as a tool for building and maintaining better
relationship with customers. The Websites of HFIs play an important role in building and
maintaining customer relationships. In the case of Housing Finance providers especially
Commercial Banks and Housing Finance Companies, their websites have an important
function of dealing with customer queries. They have given information relating to
Housing Finance in website so that the customers can understand the details relating to
Housing loan from the website itself. In the case of existing customers, personalized Emails, Short Message Services (SMS) and other Group information systems are
important IT based services given by the Housing Finance providers. This study is
conducted to know the role of Customer focused Information Technology on improving
customer satisfaction of select Housing Finance providers in Kerala.
3.2. Variables Identified for the Study
To conduct this study, mainly two variables were taken in to consideration. They
are user friendly websites and other IT based services. Based on the review of
literature, several sub-variables were identified and they are given below:
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
Table 1: Variables considered for the study
User friendly Website
IT based services
Simplicity of design
E-Mails
Easy understanding of the contents
Short Message Services
Navigation efficiency
(SMS)
Reliability of information
Instant Messages
Level of accuracy of information
Completeness of information
Security of information
Frequency of content updates
3.3. Hypotheses
On the basis of objectives of the study, five hypotheses were formulated.
Hypothesis 1: There is no significant difference between select Housing Finance
Providers with respect to customer satisfaction on website.
Hypothesis 2: There is no significant difference between select Housing Finance
Providers with respect to customer satisfaction on IT enabled communication services.
3.4. Data collection
For the Study, four Banks were selected from among the Commercial Banks (One each
from SBI and associate Banks, Scheduled Banks, Regional Rural Banks and from
Private Banks) and two Housing Finance Companies were selected based on the
number of customers availed housing loan. The Banks selected were State Bank of
Travancore (SBT), Union Bank, Federal Bank and Kerala Gramin Bank. The Housing
Finance Companies selected were HDFC Home Finance Limited and LIC Housing
Finance Limited. The data for the study were collected through a structured
questionnaire from 90 customers of these selected Banks and Housing Finance
Companies from three districts (Trivandrum, Ernakulum and Kozhikode) of Kerala,
which is a federal state of India. The questionnaire was prepared by taking into
consideration, the variables identified for the study. A five point scale: (i) strongly agree,
(ii) agree, (iii) uncertain, (iv) disagree, and (v) strongly disagree was used to collect
customer data regarding the customer perception. Judgmental sampling was used to
identify respondents. Data collected were analysed using statistical tools such as mean,
standard deviation and ANOVA. Before making the actual collection of data using the
questionnaire, it was tested by collecting data from 18 customers of the above
mentioned Commercial Banks and Housing Finance Companies. The reliability of the
questionnaire was checked using Cronbach’s coefficient of alpha and the alpha values
were above 0.720. It showed that the questionnaire is a reliable one.
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
Diagram 1: Relation between Customer Focused Information Technology and
Customer Satisfaction of Select Housing Finance Providers in Kerala
CFOC
User friendly website
Simplicity of design
Easy understanding of contents
Navigation efficiency
Reliability of information
Accuracy of information
Completeness of information
Security of transaction
Frequency of content updates
Customer Satisfaction
IT enabled Communication
Services
Emails
SMSs
Instant Messages
4. Analysis and Findings
The analysis of the collected data was done using SPSS software. The
following table shows the satisfaction score summary of selected Banks/HFCs with
respect to their IT satisfaction level.
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
Table 2: Satisfaction Score Summary of Different Bank/Hfcs With Respect to
Website and IT Enabled Communication Services
Report
Satisfaction with the
Satisfaction with IT enabled
content of the
communication services
Bank’s/HFC's website
provided by the Bank/HFC
3.87
4.13
15
15
.640
.516
Sum
58
62
Mean
3.73
3.73
15
15
.594
.704
Sum
56
56
Mean
3.87
3.87
15
15
.516
.516
Sum
58
58
Mean
3.73
3.20
15
15
.258
1.033
Sum
56
48
Mean
3.87
3.93
15
15
.915
.458
Sum
58
59
Mean
4.07
4.07
15
15
.704
.458
Sum
61
61
Mean
3.89
3.97
90
90
Std. Deviation
.626
.644
Sum
350
357
The institution from which the loan is
availed by the respondent
SBT
Mean
N
Std. Deviation
Union bank
N
Std. Deviation
Federal Bank
N
Std. Deviation
Kerala Gramin Bank
N
Std. Deviation
HDFC HFL
N
Std. Deviation
LIC HFL
N
Std. Deviation
Total
N
It is evident from the table that, mean score is highest for SBT with 4.13 and the lowest
score is for Kerala Gramin Bank. This means that customers are more satisfied with the
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
IT and IT based communication services of SBT than any other Financial Institutions. In
the case of design of the website, easy understanding of content in the website,
navigation efficiency of the website, reliability, accuracy, completeness and security of
the information, SBT scored more than other Banks/HFCs. Respondents opined that
SBT’s IT enabled communication services like E-mails, SMSs and Group information
systems are also efficient than others. In the case of Kerala Gramin Bank, their website
is not that customer friendly and their IT enabled communication services are not that
much effective.
Table 3: Satisfaction on content of the website and IT enabled communication services
in respect of different Housing Finance providers in Kerala
ANOVA Table
Sum of
Squares
Df
Square
F
Sig.
.889
5
.178
.439
.820
.405
.811
.545
Satisfaction with the
Between
content of the
Groups
Bank/HFC's website *
Within Groups
34.000
84
Total
34.889
89
1.700
5
.340
.419
The institution from
which the loan is
(Combined)
Mean
availed by the
respondent
Satisfaction with the IT Between
(Combined)
enabled
Groups
communication
Within Groups
35.200
84
Total
36.900
89
services provided by
the Bank/HFC * The
institution from which
the loan is availed by
the respondent
Table 3 shows the customer satisfaction on content of the website and IT enabled
communication services provided in respect of select Housing Finance providers in
Kerala. It is observed from the table that, for satisfaction with content of the website, the
‘p’ value is 0.820, which is more than the significant level of 0.05. Hence we accept the
null hypothesis. ie, there is no significant difference between select Banks/HFCs with
regard to customer satisfaction on content of the website. In the case of satisfaction with
respect to IT enabled communication services provided, the ‘p’ value is 0.545, which is
also more than the significant level of 0.05. Here also we accept the null hypothesis. ie,
there is no significant difference between select Banks/HFCs with regard to customer
satisfaction on IT enabled communication services provided.
Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
5. Managerial implications
The study revealed that Customer Focused Information Technology factors such as
user friendly website and IT enabled communication services of Housing Finance
Institutions have a greater impact on building Customer Satisfaction. Findings of this
study will help the Housing Finance Institutions to understand the customer perception
about their website and Information technology enabled communication services and to
fine tune their strategies to improve the customer acquisition and retention efforts. The
Housing Finance Institutions with lesser customer satisfaction level should take
necessary measures such as concentrate more on the contents of the website, and
should implement effective communication methods and should formulate strategies to
achieve competitive advantage over other Housing Finance Institutions. Customer
feedback need be taken frequently and planning has to be done on the basis of this. By
this way, the Housing Finance Institutions can improve the level of their customer
satisfaction and loyalty.
5. Conclusion
In the Housing Finance Sector of Kerala, there exists strong competition among
different Housing Loan providers, especially between the Commercial Banks and
Housing Finance Companies. Different players are trying to adopt new strategies to get
maximum number of customers and try to satisfy them to ensure customer retention.
From this study it is apparent that, the Information Technology factor is a main
contributor to the customer satisfaction. IT and IT enabled communication services help
the Financial Institution to serve customers according to their expectations. From the
study it is very much clear that among the Commercial banks, SBT is having high
customer satisfaction in respect of Information Technology services. Among the
Housing Finance Companies, LIC Housing Finance Limited is having the highest
satisfaction level in respect of customer focused Information Technology. Even though
there is no significant difference among the customer satisfaction levels of different
selected CBs/HFCs, in respect of their IT and IT enabled communication services, IT is
contributing a lot to the Customer Satisfaction of these Financial Institutions.
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