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IMPACT OF INFORMATION TECHNOLOGY ON ALTERNATIVE CHANNEL SERVICES AND ITS SERVICE QUALITY

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International Journal of Civil Engineering and Technology (IJCIET)
Volume 10, Issue 03, March 2019, pp. 859-866, Article ID: IJCIET_10_03_083
Available online at http://www.iaeme.com/ijciet/issues.asp?JType=IJCIET&VType=10&IType=03
ISSN Print: 0976-6308 and ISSN Online: 0976-6316
© IAEME Publication
Scopus Indexed
IMPACT OF INFORMATION TECHNOLOGY
ON ALTERNATIVE CHANNEL SERVICES AND
ITS SERVICE QUALITY
Abhay Kumar Mohanty
Research Scholar, School of Management, KIIT Deemed University, Bhubaneswar, Odisha,
India
Dr. B.C.M. Patnaik
Associate Professor, School of Management, KIIT Deemed University, Bhubaneswar,
Odisha, India
Dr. Ipseeta Satpathy
Professor, D. Litt, School of Management, KIIT Deemed University, Bhubaneswar, Odisha,
India
Geetanjali Patra
Faculty Associate, School of Law, KIIT Deemed University, Bhubaneswar, Odisha, India
ABSTRACT
In the present scenario, the information technology has vital role to strengthen the
banking network. With the use of information and communication technology, the
banking sector created revolution in providing quality services to its customer. The
information technology paved the way to the banking sector to provide the alternative
channel services to its customer rather than the traditional services. The traditional
banking service means branch banking where customer has to visit branch for
performing the banking services. But, due to the development in information technology
infrastructure, the banking sector able to provide the alternative services to its
customer in the form of E-banking, Mobile banking, Debit and Credit cards and ATM.
Alternative channel services are not only providing the quality services but also helps
the banking sector in reduction of cost and time. In this study, the authors have tried to
find out the impact of information technology on the performance of the alternative
channel services and its service quality. For this purpose, the primary data is being
considered which is collected from the respondents with the help of questionnaire. The
customer perceptions regarding the alternative channel services and its quality are
being tested with the help of service quality model. The study suggests, the different
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Abhay Kumar Mohanty, Dr. B.C.M. Patnaik, Dr. Ipseeta Satpathy and Geetanjali Patra
aspects which encourage the customers to adopt the internet banking services are cost,
security and convenience.
Key Words: Alternative Channel Services, E-banking, Service Quality and
Convenience.
Cite this Article: Abhay Kumar Mohanty, Dr. B.C.M. Patnaik, Dr. Ipseeta Satpathy
and Geetanjali Patra, Impact of Information Technology on Alternative Channel
Services and its Service Quality, International Journal of Civil Engineering and
Technology, 10(03), 2019, pp. 859–866
http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=10&IType=03
1. INTRODUCTION
The term Alternative Channel Services (ACS) refer to the services provided by banks rather
than their branch operation. This is also known as E-banking where they bank provides the
opportunities to their customer for making the banking transactions without visiting the bank
branch. The alternative services are generally Internet Banking, Tele-banking, Mobile Baking,
Automated Teller Machine (ATM), Debit Card and Credit Card etc. In alternative channel
service platform, the customer of banks can perform their banking transaction at anywhere and
at any time.
In the present scenario, information technology plays an important role to perform the
business transactions. In this competitive world, the banks have adopted information
technology to provide better services to their customer to beat their competitors. The service
quality will be achieved by any organization by satisfying their customer needs and
perceptions. If, the customer will not satisfy with the service quality delivery of any
organization, then they can definitely choose the available alternatives to satisfy their needs.
Therefore, the customer perceived behavior and their requirements have to understand before
designing any products and services.
In this stiff competitive world, every organization has to evaluate the customer attitude and
opinions to create the long term demand for their products or services and profitability.
Currently, the developing countries like India, the customers demand is increasing day by day
as per their literacy rate. So, the banking industry has to design their services in such manner
to fulfill the needs of the customer as compare to the financial literacy. In this paper, the authors
have taken two factors to analyze the impact of Information Technology i.e. Alternative
Channel Services or Internet Banking and service quality.
The importance of service quality is to identify the conditions of loyalty and focusing on
prospective consumers. E-banking services play an important role for overall bank offerings
which directly impacts on the service quality of banks. Due to the cost effectiveness, E-banking
is able to provide various facilities to its customer to perform transactions such as information
retrieval, generation of statement, payment of bills, money transfer and interest certificates etc.
The internet banking is also able to reduce the banking transaction cost. But, it has created
some drawbacks such as reduced the face to face interactions among the customer and security
risk. Despite of its easiness in getting the banking information and widely use of information
technology, a major proportion of consumer have not yet opted for this service in India because
of their inability to use the internet, fear and literacy rate.
The primary objective of this paper to test various service quality dimensions to find out
the customer perceived behavior, satisfaction and needs. It is also to enquire the dimensions
which have more importance for customer satisfaction.
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Impact of Information Technology on Alternative Channel Services and its Service Quality
2. LITERATURE REVIEW:
The transaction cost of internet and other virtual banking had lower than the traditional banking
systems. So, the banks should encourage its customers to use internet for their banking
transactions. The author also emphasized that for adoption of internet banking, it was necessary
that the banks should take initiatives to create awareness among its consumers and make them
understanding regarding the availability of such a product and explain how it adds value to the
other products. The security concerns and lack of awareness were the reasons of non acceptance
internet banking by Australian customers. But, the internet was considered as a main source of
overall customers’ service and distribution strategy. These procedures could help in rapid
migration of customers to internet banking (Sathye, 1999).
Technology helped in centralized storage of data and decentralized the data processing and
helped in cost reduction and decreased Non-Performing Assets (NPAs) by keeping the track
record of loans and advances. Again, the emergence of services like electronic data interchange
(EDI), usage of smart cards, RTGS, e-commerce etc. helped the banks to increase the
profitability and productivity. Banks should perform the security audit to reduce the crimes as
a result the bank would enable to improve the customer service quality which would enhance
the efficiency, productivity and profitability (Kamesam, 2001).
The important attributes of online service quality which create impact for the acceptance
of this service by the users are features, performance, reliability, aesthetics, serviceability,
security, storage capacity, system integrity, trust, responsiveness, service differentiation,
customization, policies, reputation, assurance, and empathy (Madu and Madhu, 2002).
Though new technologies could not replace the branch banking network but these can
enhance the old banking methods to deliver quality services. The structural change had
happened in Finnish banking sector from the period 1993 to 2002 which showed that 42 per
cent of households have internet connection with banks and 90 per cent have mobile banking
services. The main objectives of introduction of technology were to provide quality service to
improve customer satisfaction, reduction in costs and development of new strategy to gather
customer information for analysis (Aki, 2002).
Currently, developed E-Banking service had given tremendous opportunities for the banks
for the banks to systemize their financial products & services, profits, service delivery
mechanism and marketing. E-Banking is an innovation to preserve both business model and
technology.
E-Banking was much superior to the traditional banking as it provides
unique features like value proportion, market scope, cost structure, profit potential and value
network. To exploit the market condition in terms of business and use of technology, the banks
should focus to enhance the customer attrition inside and outside India to generate more
revenue so as to increase the Indian Economy in future (Suresh, 2008).
The quality of a product or service is judged in terms of perceived customer satisfaction
and delight of the customer. The future of service industry depends on their quick response
towards the customer expectations and needs. The quality of service would be competitive
advantages for the service industry to recruit and retain the more demanding customer. The
banking sector would face a major challenge due to the increased demand of service quality of
their customer as they were competing with undifferentiated products. As per the result, they
suggested that the manager would provide with (i) customer based improvement strategies, (ii)
action plan to deliver the required services for the customers. The managerial ability of
implication for competitive positioning and effective resource allocation would improve the
customer quality perception and create a win-win situation (Gonzalez, et.al, 2008). The
responsiveness and reliability of bank website have significance to add value and satisfaction
to customers (Khurana, 2009). The extent of internet banking services offered to the customer
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by internet banks and the factors affecting the internet banking services. The main factors
affecting the internet banking services are financing pattern, size of the bank, banking
experience to offer the internet banking services and ownership (Malhotra and Singh, 2010).
3. OBJECTIVE OF THE STUDY
1) To evaluate the importance of Information Technology on Alternative Channel
Services
2) To study the impact of Alternative Channel Services and their service quality.
4. METHODOLOGY
The present study is based on primary data. To frame the conceptual understanding, secondary
data is taken into consideration. To conduct this study, the data is collected from the respondent
by designing questionnaire. The data is collected from the different bank customer of
Bhubaneswar, Odisha. The main objective of the questionnaire to gathering information for
better understanding of customers perceived service quality. Some of the service quality
dimensions which are analyzed are particularly related to e-banking services. The data is
collected from the computer literate customer those are particularly knows about the alternative
channel services provided by banks or frequently using the e-banking services. The random
sampling method is considered for gathering the information. The data is collected from 105
respondent and their responses is taken into consideration for analytical purpose. Likert 5 point
scale is used to collect the relevant information. The respondent’s composition is as follows:
Table 1: Details of demographic profile of the respondents:
Demographic Variables
Characteristics
No of Respondent
Percentage
Gender
Male
67
63.81
Female
38
36.19
Undergraduate
16
15.24
Graduate
57
54.29
Post Graduate
32
30.48
18-30
49
46.67
31-45
34
32.38
Above 45
22
20.95
Student
46
43.81
Salaried
39
37.14
Businessmen
20
19.05
Education Details
Age Group
Occupation
The study is conducted by taking the views of the respondents visited the various banks
branches to perform their banking transaction. The data is collected from both the male and
female respondents. From the demographic data of the respondents, it is clear that all the
respondents are qualified enough to understand the services provided by the banks though
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Impact of Information Technology on Alternative Channel Services and its Service Quality
Alternative Channel Services (ACS). The study included students, salaried customers and
businessmen at the time of collection of data for getting better result. Most of the respondents
are young (almost 80%) as they belong to the age group of 18 years to 45 years. Based on
occupation, the student, salaried and businessmen respondents percentage are 44%, 37& and
19% respectively.
To evaluate the service quality of the Alternative Channel Services (ACS), we have applied
the SERVQUAL Model. The responses from the banking customer is collected in five
categories such as Reliability, Responsiveness, Communication, Accessibility and Security to
evaluate the gap between the customer expectations and experiences. The details responses
received from the respondents in different categories are evaluated as under.
Table 2: Reliability Responses
Factors
Bank delivers the quality services as per their
committed time duration with the help of
Information Technology
Bank able to keep the transaction details
correctly in ACS
Bank helps in accurate billing
Banks try to provide innovative solutions to
handle customer problems trough ACS
Alternative channel service (ACS) transactions
are transparency and accountable
Average
SA
A
N
D
SD
13.33%
64.76%
17.14%
2.86%
1.90%
22.86%
58.10%
12.38%
2.86%
3.81%
25.71%
60.00%
11.43%
1.90%
0.95%
16.19%
48.57%
20.95%
5.71%
8.57%
19.05%
56.19%
13.33%
6.67%
4.76%
19.43%
57.52%
15.05%
4.00%
4.00%
(SA- Strongly Agree, A – Agree, N – Neutral, D – Disagree, SD – Strongly Disagree)
Table 3: Responsiveness Responses
Factors
Banking service can be performed easily at any
time during the week through ACS
Downloading of transaction slip at any time
through ACS
SA
A
N
D
SD
12.38%
66.67%
18.10%
1.90%
0.95%
19.05%
61.90%
13.33%
3.83%
1.88%
ACS transactions are more user friendly
16.19%
56.19%
17.14%
5.71%
4.76%
ACS provides prompt services to its customer
ACS enables customer to access the financial
records through its website
14.29%
53.33%
20.95%
4.76%
6.67%
17.14%
54.29%
19.05%
6.67%
2.86%
Average
15.81%
58.48%
17.71%
4.57%
3.43%
(SA- Strongly Agree, A – Agree, N – Neutral, D – Disagree, SD – Strongly Disagree)
Table 4: Communication Responses
Factors
ACS offers attention to individual customers
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SA
27.62%
863
A
62.86%
N
4.76%
D
4.76%
SD
0%
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Abhay Kumar Mohanty, Dr. B.C.M. Patnaik, Dr. Ipseeta Satpathy and Geetanjali Patra
ACS services are easily understandable to
customer
34.29%
63.81%
0.95%
0.95%
0%
ACS fulfils specific customer needs
18.10%
66.67%
11.43%
2.86%
0.95%
25.71%
60.95%
8.57%
2.86%
1.90%
30.48%
68.57%
0.95%
0%
0%
27.24%
64.57%
5.33%
2.29%
0.57%
ACS services are easily accessed by its
customer through banks' website
ACS service information are easily available
Average
(SA- Strongly Agree, A – Agree, N – Neutral, D – Disagree, SD – Strongly Disagree)
Table 5: Accessibility Responses
Factors
ACS can be accessed 24*7 by the banking
customer
The technology used by ACS products are
customer friendly
Customer can access their personal accounts
easily through ATM and Internet Banking
Customer can access financial records such as
banking transaction details easily through ACS
Average
SA
A
N
D
SD
15.24%
45.71%
20.95%
14.29%
3.81%
23.81%
66.67%
6.67%
2.86%
0%
33.33%
60.00%
4.76%
1.90%
0%
24.76%
52.38%
17.14%
5.71%
0%
24.29%
56.19%
12.38%
6.19%
0.95%
(SA- Strongly Agree, A – Agree, N – Neutral, D – Disagree, SD – Strongly Disagree)
Table 6: Security Responses
Factors
ACS transactions are safe in respect to Branch
Banking
ACS provides trust and confidence among its
customers and employees
The banking transactions are confidential and
trust worthy though ACS
The bank has taken adequate measures for fraud
and misuse of ACS
Customer feels safety and security to perform
the transaction through ACS
Average
SA
A
N
D
SD
19.05%
67.62%
9.52%
3.81%
0%
20.95%
68.57%
7.62%
2.86%
0%
24.76%
62.86%
9.52%
2.86%
0%
26.67%
57.14%
11.43%
47.6%
0%
21.90%
61.90%
13.33%
2.86%
0%
22.67%
63.62%
10.29%
3.43%
0%
(SA- Strongly Agree, A – Agree, N – Neutral, D – Disagree, SD – Strongly Disagree)
The responses which are collected in respect to the service quality dimension are presented
in tables 2 to 6 as per the details given above. The responses were obtained through 5 point
mapping scale starting from "Strongly Agree" to "Strongly Disagree" where "Strongly Agree"
is rated as point 5 with high service quality factor and "Strongly Disagree" is rated as 1 point
with low service quality factor. Most of the respondents were rated the Alternative Channel
Services (ACS) in the scale of Strongly Agree and Agree category. So, it indicates that the
customers perceive an overall high service quality. If we consider the service dimension of
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Impact of Information Technology on Alternative Channel Services and its Service Quality
communication and security, above 80 percentage respondents were satisfied that the
Alternative Channel Services is fulfilling their expectation as per their desire. In respect to the
technology, almost all the respondents were adopted the internet banking facilities to perform
their banking transactions online to save their time and money.
5. LIMITATION OF THE STUDY
The study is only restricted to the banking customer of Bhubaneswar. The responses were only
collected from the banking customer those have visited to the branches of different banks. We
have not included the customer those have not adequate knowledge to perform the banking
transactions online.
6. CONCLUSION
The retails banking sector of Bhubaneswar is stable and developed in compare to the other
areas and district of Odisha. The service quality of Alternative Channel Services (ACS) are
depending on technological adaptability of the banking customer and technological
infrastructure. Now a days, banking sector have taken initiative to popularize the Alternative
Channel Services among their customer and have conducted training session in association
with academic institutions to spread the knowledge of ACS usability. We have surveyed the
five dimensions of service quality to judge the acceptance of ACS service among the banking
customer. From our survey, it is found that about 80 percentage of the sampled customer are
satisfied with the service quality being offered by the Alternative Channel Services. Though it
is an encouraging yardstick for the banking institutions for providing products and services to
their customer but still there are certain area of improvement especially for the customer those
are more demanding over a period of time. The difference between satisfied and dissatisfied
are significant in "responsiveness, reliability and accessibility" which suggest that these are
impacting on users' perceived satisfaction. The respondents were mostly emphasis reliability
aspects in comparison to security, communication and responsiveness.
We conclude by proposing the some possible future dimensions for future research. Impact
of Technology on Alternative Channel Services for Customer Satisfaction and Perceived
Quality and Role of Technology to mainstream the Alternative Channel Services in the mind
set of Indian Banking Customer.
REFERENCE
[1]
[2]
[3]
[4]
[5]
[6]
Sathye, M. (1999), “Adoption of Internet Banking by Australian Consumers: An Empirical
Investigation”, International Journal of Bank Marketing, Vol.17,No.7, pp. 324-334.
Madu, C.N. Madhu, A. A. (2002), “Dimensions of E-Quality”, International Journal of
Quality and Reliability Management, Vol. 19, No. 3, pp. 246-258.
Madu, C.N. Madhu, A. A. (2002), “Dimensions of E-Quality”, International Journal of
Quality and Reliability Management, Vol. 19, No. 3, pp. 246-258.
Madu, C.N. Madhu, A. A. (2002), “Dimensions of E-Quality”, International Journal of
Quality and Reliability Management, Vol. 19, No. 3, pp. 246-258.
Suresh, R. (2008), “E-Banking: The Core Capabilities to Exploit”, The Management
Accountant, Vol.43, No.6, June, PP. 49-53.
Gonzalez, et.al, (2008), “An alternative approach in service quality: An e-banking case
study”, The Quality Management Journal; 2008; 15, 1; ABI/INFORM Complete, pp. 4159
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Abhay Kumar Mohanty, Dr. B.C.M. Patnaik, Dr. Ipseeta Satpathy and Geetanjali Patra
[7]
[8]
Malhotra, P. and Singh, B. (2010), “ An analysis of Internet Banking offerings and its
determinants in India”, Internet research, Vol. 20, No. 1, 2010, pp. 87
Khurana, S., (2009), “Managing Service Quality: An Empirical Study on Internet
Banking”. The IUP Journal of Marketing Management, Vol. VIII, Nos. 3 & 4
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