2.
Literature review
E- Banking is the fastest growing service that banks can offer in order to gain and retain new
customers (Moody, 2002).
The rise of E-Banking is also due to its number of benefits for both the provider and the
customer as well. From the bank’s perspective these are mainly related to cost savings (Sathye,
1999; Robinson, 2000) and E-Banking remains one of the cheapest and more efficient delivery
channels (see Pikkarainen et al., 2004).
Arunachalam and Sivasubramanian (2007) content that Internet banking is where customer can
access his or her bank account via the Internet using PC or mobile phone and web-browser.
Ongkasuwan and Tantichattanon (2002) defined Internet banking service as banking service that
allows customers to access and perform financial transactions on their bank accounts from their
Computers with Internet connection.
On-line, real-time banking services have now become a birth right of the customer as the
customer demands the flexibility of operating an account in any branch of a bank irrespective of
which branch the account was domiciled (Bank Away, 2001).
E-service quality can be explained as an overall customer evaluation about e-service delivery in
the marketplace which is virtual Santos, J. (2003).
Customer Requirement
Customer requirement means the utilities from a products and services wanted by customer
before adopting any product or service (P.Kotler)
Customer Satisfaction
A satisfied customer will repeat the purchase of the product and convey positive messages about
it to others (Dispensa, 1997; Metawa and Almossawi, 1998).
The complex nature of services coupled with the growing province of the service sector has
increased the need for better customer satisfaction. Banking and financial services are an
important part of the service industry (Mishkin, 2001).
Customer satisfaction is typically defined as a post consumption evaluative judgement
concerning a specific product or service (Gunderson, Heide and Olsson, 1996. The most widely
accepted conceptualization of the customer satisfaction concept is the expectancy
disconfirmation theory (McQuitty, Finn and Wiley, 2000).
According to Saha and Zhao (2005), customer satisfaction is defined as a collection of outcome
of perception, evaluation and psychological reactions to the consumption experience with a
product/service.
In other words, Saha and Zhao further defined customer satisfaction as a result of a cognitive and
affective evaluation where some comparison standard is compared to the actually perceived
performance. If the performance perceived is less than expected, customers will be dissatisfied.
On the other hand, if the perceived performance exceeds expectations, customer will be satisfied.
Consumers of banking services are becoming more demanding in terms of the level of service
they expect and how they are able to access services when required. A general increase in
organizations' customer orientation, owing to increased competition, witnessed in many markets,
has also occurred in financial services, further heightening customer expectations. Customers are
demanding greater convenience and accessibility as reflected in longer branch opening hours and
an increase in the choice of delivery mechanisms. There has been a drastic change in lifestyles of
customers in recent years as individuals have become more affluent and spent more on leisure
activities. This has led to a decrease in "disposable time" to dedicate to such things as financial
matters. Changing work patterns may also add to an increase in time pressure for many
individuals. Consumers have therefore demanded greater convenience and access. This does not
mean that the branch network does not have an important role to play. Marketing aims to
maintain and increase consumer use of goods or services (Kelley and Thibaut (1 978)).
Relationship duration and interaction frequency have been found to be good predictors of
relationship development (Levinthal and Fichrnan (1 988)). Branches, albeit in reduced numbers,
will continue to be an important means of reaching many segments of the market. However, with
increasingly diverse sets of preferences there will be a growing need for organizations to develop
multiple channels of distribution. The branch network will undoubtedly remain an important
distribution channel for the foreseeable future; however, consumer choice will continue to be
augmented in response to developments in consumer preferences. These supply and demand side
pressures have therefore had a significant influence on the distribution of retail financial services
including those offered by the retail banking sector. The traditional reliance on the branch
network remains to some extent; however, the delivery mix has expanded and will continue to do
so (Devlin (1995)). According to Sheth and Parvatiyar (1995) consumers use is important
because it builds consumer habits and reduces consumer uncertainty. Kimball and Gregor (1995)
observed that developing alternative channels Howard and Moore (1982) emphasized that for
adoption of a product/service consumers must become aware of the new brand. Hence, an
important characteristic for any adoption of innovative service or product is creating awareness
among the consumers about the servicelproduct. Technological service innovations differ from
other commodities insofar as their adoption may require behavior different from consumers'
typical routines (Gatignon and Robertson (1 985)). This includes "bricks and mortar" issues such
as not having a branch bank to visit, as well as "paper" issues including receiving statements
electronically and not in the mail. Rothwell and Gardiner (1984), while developing the
framework of user needs in technological innovations, identifi "safety in use" as one of the
factors that influences potential users. Internet bank acceptance can be studied by examining the
causes behind frequency of use of internet banking. For such a study, a modified form of the
technology acceptance model (TAM) is applied, which identifies the perceived usefulness and
the perceived ease of use of a technology as determining user behaviour (Davis (1989)). He
found that perceived usefulness has a stronger influence on usage tha
