Abstract

Objectives: To examine the awareness and adoption level of people of rural and urban India about Digital Banking Services (DBS) at pre and post demonetization era.

Methods/Statistical Analysis: In this work, we have studied the effects and shifting trends in availing DBS and change in perception on Banking Services of customer, which is supported by a survey based on 500 respondents. One way ANOVA test has been employed to examine the possibility of existence of any statistically significant difference between adoption rate of DBS and different factors such as demonetization knowledge, reliability, transaction efficiency, customer support, service security, ease of use, performance and service content.

Findings: It has been observed that though rural and urban people have a noticeable awareness about the demonetization process but the percentage of users for all categories of DBS (card, internet and mobile) are very high for the urban sector than the rural sector. The rural people are found to be more convenient to use card banking (percentage of only card banking facility users is 63.00%) than the other two categories of DBS (internet and mobile banking). Similarly, demographic profile such as gender, education, occupation, age, income creates an impact for availing DBS. It has also been observed that adoption level of digital banking service is dependent on demonetization knowledge, reliability, customer support, service security, ease of use and performance (p <0.05). But the Statistically insignificant effect has been observed on transaction efficiency (p= 0.398>0.05) and service content (p =0.059 > 0.05) on adoption of digital banking services.

Application/Improvements: This study indicates that bankers and service designers should organise different campaign and hand-on training that may inspire people for adopting DBS and moving India towards ‘Digital India’.

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Abstract

Objectives: Indian banking industry has witnessed tremendous development due to extensive changes towards Digital Banking Services. Moving towards this Digital Era, need to reduce the gap between what service customers expect and what they perceive.

Methods/Statistical analysis: This study focuses on the analysis of the two Service Quality Gaps (Gap -3 and Gap -5), developed by Parsuraman and Berry. Gap -3 arises from the provider side which identifies a gap between the customer-driven service design and standards and service delivered whereas Gap 5 develops from the customer side which recognizes a gap between customer expectation and their perception of digital banking services (DBS). In this work seven, slightly modified dimensions (reliability, transaction efficiency, customer support, and service security, ease of use, performance and service content) which are relevant to the Indian context have been considered. The database has been collected from 1000 respondents. Confirmatory factor analysis has been conducted to the seven dimension measurement model to test the dimensionality, convergent and discriminate validity and the model fit has been discussed.

Findings: It has been observed that Cronbach’s alpha (α) values of seven dimensions are higher than the minimum threshold of 0.7. All the dimensions also satisfy the conditions of convergent validity. In our study it has been observed that goodness of fit indicators such as Normed Fit Index (NFI) = 0.920; Relative Fit index (RFI) = 0.908; non-normed fit index (TLI) = 0.929; comparative fit index (CFI) = 0.938 suggest acceptability of the model and the badness of fit indicator Root Mean-Mean-Square Error of Approximation (RMSEA) is 0.056 and is below the recommended limit of 0.08. Though a positive weighted score has been found out in both Gap 3 and Gap 5, but in Customer side Gap (GAP 5), negative gaps have been observed in the dimensions of customer support, transaction efficiency and ease of use. In Gap 5 only a negative gap has been identified in Customer service or responsiveness. From the different bank side, the provider also agreed with the fact that, sometimes customer support or responsiveness may create a real problem for availing DBS because of huge pressure and sudden changes in government policies.

Application/Improvements: At the end, this research suggests to reduce the gap of customer support, transaction efficiency and ease of use by organizing different campaigns, hands-on training, improving the customer care department and developing the more user-friendly technology and moving the banking service towards successful digitalization.

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