The Impact of E-Banking on Customer Satisfaction

43 Pages·2014·0.77 MB·English

Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.

The Impact of E-Banking on Customer Satisfaction: A Comparative Analysis on
Pakistani

Ahmed Imran Hunjra1, Amjad Ali2 and Saad Anwar3

Abstract
The present study statures the current status of electronic banking in Pakistan and its impact
towards the usage and also its impression on satisfaction of customers of the banks. Further,
based on the outcomes from the data gathered on the primary scale, the study portrays the
results of survey conducted on the level of engagement of electronic banking in the minds of
the customers. The main purpose of the study is to highlight those variables which are
considered to be the major players in raising the satisfaction of customers in Pakistan. In the
past, the financial institutions in Pakistan used to have Internet to show their presence and
provide information regarding the product and services being offered by the bank. However,
during the past recent years, numerous banks have started to offer Internet Banking as well to
cater the customers and promote their image as a friendly institution and to facilitate their
customers while allowing them to perform banking activities without visiting the bank. From
the research, it has been observed that customers who have availed the service are enjoying
the benefits yet they feel bit uncomfortable in terms of Online Service Quality. The customers
have shown their concerns about the timely response of personals. Many of the customers
have raised the objection that not all utility services have been enlisted in the options of
Internet Banking. Also, customers do have awareness but not on a large scale. Awareness
among the customers using electronic banking services is quite high but use of Internet or
Mobile Banking is a new trend and experience, and customers are reluctant to work freely
with the new environment.
Keywords: E-Banking, Customer Satisfaction, Pakistan, Banking Sector

Introduction
Earlier, a bank was considered four-wall protected building that was intended to secure
people money. During early eighty’s, when the technology revolutionized banking sector too
modernized itself while introducing new kinds of services that may be performed
electronically under a one word term known as E-Banking or in a full form as Electronic
Banking. E-banking is also designated as a branchless banking, introduced as a new notion.
The concept itself is self-explanatory. In one of the researches conducted, (Sayyar, and Wolfe,
2007) stated that the branchless banking encircles such kind of banks that do not exist
physically as mortar, and yet are able to provide their services electronically and over the
internet. Electronic Banking shortened as e-banking, thus, is an umbrella of numerous
banking activities that are offered by a bank to be performed electronically. If one needs to

1 Lecturer, UIMS-PMAS-University of Arid Agriculture Rawalpindi, and PhD Scholar Iqra University
Islamabad, Pakistan
2 Ph. D Scholar at National College of Business Administration and Economics (NCBA&E), Pakistan
3 MBA Student, Allama Iqbal Open University Islamabad, Pakistan
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
identify the key distinctive features of the e-banking, the list may range from transferring of
funds to paying bills.

Ever since the era of technology started, people are finding themselves comfortable. Every
organization is trying to be equipped in order to remain in the competition. Banking industry,
like the other large organizations, is being kept on emerging at a large scale. Increasing trend
towards electronic banking is one face of its emergence. The facility of electronic banking
gets more on demand when a customer from a busy environment does not have enough time
to spare in going bank, stand in a long waiting queue to perform detailed banking activities or
paying bills even. Besides, it even gets worst when a customer is intended to find out the
working branch, want to operate for a transaction and find no access to it. The technology of
electronic banking resultantly has become indispensible while facilitating a user to have an
online access to his her account at any time.

Hence, a bank that facilitates its customer from anywhere around the world at any place even
into their homes over the internet is an “Ultimate Internet Bank (UIB)” and the banking
services that are delivered either electronically or over the internet is collectively known as
Electronic Banking.

Before getting into further detail, clarity is required for the term electronic banking. The term
e-banking is used to relate any kind of banking activity which is performed electronically.
Most of the times, Internet Banking is often taken alternatively as Electronic Banking which
is however, not a right phrase to be called. It must be kept in mind that Electronic Banking
includes several traditional banking activities like ATM, Telephone Banking, Plastic Money,
etc. The most recent additions are Internet Banking, Mobile Banking, and Digital TV
Banking. Electronic Banking is also referred as Electronic Funds Transfer (EFT) and is a
mean to transfer of funds from one account to the other. Table 1.1 explains the various
features and functions being offered under the umbrella of e-banking.

Table 1.1: Features and Functions of Electronic Banking

Telephone Self Service Internet TV
Features ATMs
Banking Terminals Banking Banking
With drawls Y
Deposits Y
Balance Enquiries Y Y Y Y Y
Interim Statement Y Y Y
Transfer Funds Y Y Y Y Y
Cheque Book Orders Y Y
Change ATM Card PIN Y Y Y
Stop Payment of Y Y Y Y
Cheques
Exchange Rates Y Y Y
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
Stop Orders Y Y Y
Billing Y Y Y Y
Source: (FNB Brochure, 2001); (TV Banking, 2010)

Electronic banking is quite beneficial for the development of the financial sectors especially
in developing and under developing countries due to its cost effective deployment, and
widened access of its financial services for the hosting banks’ customers. (Birch, and Young,
1997) conducted the study on electronic banking with respect to customer’s perspective.
Through their research, they came on to the common ground that customers’ main intention is
to look for the efficient and effective operation in conducting any kind of financial transaction
while seeking for options in terms of fundamental and non-fundamental products offered by
the banks against the competitive prices and returns. In support to a statement made by
(Birch, and Young, 1997), certain other researchers (Polatoglu, and Ekin, 2001; Black et al.,
2002; Howcroft et al., 2002) believed that the wide acceptance of electronic banking system
is due to its time and effectiveness in terms of cost as well as the utility it offers. (De Young,
2001) ranked the concept of electronic banking with a better grade. He stated that apart of
facilitating the customers through internet, the electronic banking has eased the detailed
banking operations and has brought almost every activity under a mouse click.

(Pikkarainen et al., 2004), termed such electronic banking activity as Internet Banking.
According to him internet banking can alternatively be known as internet portal which helps
the bank’s customers to perform different kinds of banking activities that may range from bill
payment to investment making. Online banking system is advantageous both for the banks
and so for the customers. Banks may get benefited in the form of lowering of operational cost
by rendering services of electronic banking to the customers since these services may involve
fewer mortar branches and quite a few staff members. As for the customers’ perspective,
electronic banking services provide ease of handiness, swiftness and from anywhere to
everywhere user account availability. Later, at another place, (Pikkarainen et al., 2006) stated
that electronic banking is a system that assists the banks to ease the work load of handling
customers. On the other end, it also gives support to the customers to access their accounts,
conduct transactions and get relevant information. It is usually come across listening that the
tendency is growing towards the global adoption of electronic banking but it should be kept in
mind that new technology brings new issues to counter. The concerns that may arise while
dealing with electronic banking:

1. Impact of electronic banking on Satisfaction of customer/s?
2. Awareness of usage of electronic banking in terms of technology and services.
3. Level of Quality of Services being offered on Internet.
4. Soundness of System Credibility of electronic banking in order to be endured.
5. Successful implementation of electronic banking in Pakistan.

Pakistan has seen number of ups and downs in the field of investment and particularly in
banking industry in the past. (Sajjad et al., 2011, p.3) stated that in early ninety’s, the banks in
Pakistan experienced chief breakdown, more specifically in line of insurance and monetary
value. (Kaleem, and Ahmad, 2008, pg.3) stated that due to such collateral damage in Pakistan,
the foreign banks soon after, held the grip by heavily introducing ATMs and credit cards in
the mid-90s, leading some of the native financial organizations to get crumpled, although
domestic banks followed in the late 90s to cope up with the business. In an annual report,
published, (State Bank of Pakistan, 2003, p. 110) put forward the reason of this late indulgent
towards electronic banking. The report argued that regulatory hurdles, higher startup costs,
on-going banking sector reforms and lack of technical skills were the major issues. With these
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
given facts, in accompanied with certain rumors of destabilization of financial institutions,
some valid concerns were raised among the people in Pakistan that resulted in losing the
confidence in own indigenous banks.

Earlier, (Kazmi, S.H., 2002) had also conferred that even with a late initiative in respect of
electronic banking; efforts were being put into the account to deal with the rising competition
across the globe. MCB (Muslim Commercial Bank) arranged ‘Pakistan Electronic Banking
Conference’ in the promotion of electronic banking which was co-funded by IBM, Teradata,
ABN-AMRO and local newspaper. Another movement was made in the mode of installation
of ATMs during 90’s to counter the emergence of foreign oriented banks. Whilst many banks
have their own ATMs installed outside their branches, numerous banks jointly introduced a
dedicated network using a leased line over the internet to improve their operations while
reducing cost. In Pakistan, this system is termed as ‘One Link’ that allows an ATM card
holder to access his/her account. The card holder/customer either from the parent bank or
from the partner bank are allowed to have an access to his/her account though using this line.

There are certain other influences that have been optimized as key factors in avoiding using
internet or computers for security reasons like lack of knowledge in using certain services,
and sniffing threat like ‘eaves dropping’. A major landmark was made, when an Electronic
Transactions Ordinance was passed in 2002. This ordinance officially permitted the digital
signatures in order to reduce the expected threats that are linked with the use of an electronic
medium business. To be an active participant of this growing economy, Pakistan must build
up its electronic commerce framework which may be consisted of three major components
like secured transactions, lawful infrastructure along with the required awareness of the
customers, and bank’s electronic readiness in terms of online availability, so to fulfill the
requirements of its users over the internet.

The purpose of this study is to examine the influences that play a role on the impact of
electronic banking on satisfaction of bank’s customers. The impact may be analyzed from the
study of banks along with the satisfaction/dissatisfaction of customers from electronically
offered services and whether the customers are satisfied with the quality of services being
offered in Pakistan. The study will also help to unleash the actual awareness of the customers
towards the usage of banking performed electronically which may lead to the tendency of
using internet and other electronic medium. This study will also cover the discussion that
whether the system is dependable enough to meet the user requirement and is useful in
maintaining the credibility of a system in terms of security and privacy of its users.

II. Literature Review
Twenty first century is marked as a revolutionized period in the field of IT and
telecommunication. The technology since has started influencing different modes of life,
modernization too gets matured. Progress and modernization in fiscal amenities, (Van Horn,
1985, p.621) identified it as the “life blood of efficient and responsive capital markets”. In
support to the statement made by Horn, (Hughes, 2001) envisaged that the rapid growth in
dissemination of data electronically has been a reason for remarkable changes in financial
industry during past few years with the increasing rate of improvement in technology, and the
competition among players with growing consumption needs.

Numbers of studies have so far been conducted on the improvisation of banking industry.
(Dewan, Freimer, and Seidmann, 2000; Seitz, and Stickel, 1988) added the argument that the
banking industry is making a shift using revolutionized services since the birth of internet.
(Tan, and Teo, 2000) supported the statement of (Dewan, Freimer, and Seidmann) and stated
that the growing impact of the Internet has lead the emergence of internet banking that
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
allowed the customers to perform various banking activities to perform online through bank’s
hosted website. (Birch, & Young, 1997; Dannenberg, and Kellner, 1998) came on to the
common ground that electronic banking provides an advantage to both customers and the
banks. (Barnes, and Howlett, 1998) further explained a view of introducing information
technology. They stated that electronically dissemination of data has also reduced personal
contact between the service facilitators and the clients which unsurprisingly ended up on a
complete transformation of old-fashioned bank-customer relationships. In addition,
(Lymperopoulos, and Chaniotakis, 2004) further stated that figuring out the reasoning which
may be critical to the decision, plays a vital role in terms of service delivery. It is also
worthwhile to study the influences about the introduction of a new technology in terms of
performing transactions electronically. So to perform varied financial activities through
electronic means, different financial intermediaries such as banks; introduced a new kind of
service that covers varied banking services of a bank under its umbrella. The new era knows
the service as Electronic Banking which is shortly abbreviated as E-Banking.

Varied authors suggested diverse perspective and elucidated the concept of electronic
banking. The most acceptable definition world-wide for electronic banking, and which is
being described here in this paper as well, was originally termed by the (Basel Committee
Report, 1998, p.3). The report described e-banking as the stipulation of small valued products
of banking using electronic channels. The activities may include deposit taking, online bill
payment, management of user account through a given account management area, and
payment through electronic money etc. (Hussam et al., 2003) some of the leading bankers
explained the term E-Banking. They envisaged that e-banking or electronic banking can be
termed as an umbrella that holds the number of banking processes through which a customer
may execute numerous banking transactions electronically without visiting a brick-and-mortar
branch. (Sherrod, 2000) envisaged that electronic banking predominantly allows a customer
to perform any kind of banking activity through using any computer connected with high
speed internet connection and an interactive browser. (Banks, 2001) seconded the statement
of Sherrod and stated that electronic banking is a wide-range spectrum that holds the
savings/deposits, balance enquiry, transfer of funds, credit card services etc. Further he added
that while electronic banking does not enjoy the allure and exhilaration of electronic
tradeoffs, it is a business function that facilitates itself with the internet updated technologies.

In simple, electronic banking is not a product of bank; instead it is a sub-division of e-
business that hedges all categories of business to be performed using electronically
maintained system in order to conduct the successful transactions. (Mohammed, et al., 2009)
explained the working of e-banking. He stated that electronic banking works on electronically
configured channel through which the major banking activities may be conducted. The
example may hedges from transferring of funds to paying bills over the internet. (Aladwani,
2001, Mols, 1999, and Sathye, 1999) explained the electronic banking as a collection of
services, through which a customer is able to perform numerous banking activities to perform
e.g. stable response to the customers’ query, inter-account transfer, paying bills etc.

The major advantage is that if one needs to perform any kind of banking services or
operations; he may need not to interact with the banking personnel but can perform his
required banking activity himself. (Gonzalez, 2008) in his research claimed that electronic
banking has seen an acute progress and has surely converted outmoded practices in banking.
(Maholtra, and Singh, 2007) in their research added the concrete in the foundation of its
importance and stated that electronic banking is tilting towards the shift in the current
practices of marketing that resultantly leads to the improved performance of the banking
industry.

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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
(Blackwell et al., 2001) explained e-commerce and termed it as “clicks and order”
transaction. He further stated that the success in this competition depends on dealing with the
customers and to upkeep their customers better than their competitors while offering better
opportunities and solutions to their customer’s problems that were available in the past.
Electronic commerce has been variously defined over the period of time. According to
(Zwass, 1996) electronic commerce is a name of sharing of information, up keeping of
connections, and the dealings made through information technological tools. Later (Savoie,
and Raisinghani, 1999) explained electronic commerce and stated that it provides an ease of
performing transaction with just a touch of a button and a customer may have access to what
he/she desire at any time, at any place. (Lawrence, et al., 2000) envisaged that electronic
commerce is not just about the transaction. Among the main ingredients, focusing on the
customers and value maximization are the key propositions which may be a part of proactive
relationship management. (Turban et al., 2004, p.4) later, at another stage, described in detail
the electronic commerce. They stated that electronic commerce is a process of purchasing,
retailing, transporting or trading of products or services along with the concerned information
through the networks of computer like internet etc. Electronic commerce, they added, can be
explained under numerous viewpoints like communication, amenity, industrial processes and
businesses. In terms of say amenities, they stated that electronic commerce is a technological
instrument that covers the requirements demanded by government institutes, various
businesses, customers and administration to low down the cost of services with the
improvement of quality.

Quality improvement may be addressed especially in terms of customer facilities and growing
speed of delivery of service, requested. (Lawrence et al., 2002) added that the ethics of
electronic commerce strongly rely on innovations and persuasive techniques in order to
increase the efficiency of processes conducted, cost reduction, while seeking for new market
prospects. Seeing through the other perspective, electronic commerce facilitates the
accomplishment of transactions among two or more parties using unified network. These
unified networks can be a permutation of telephone systems, cable TV, leased lines, etc.
(Kalakota, and Robinson, 2000) further added that electronic commerce also include
electronically made payments in order to increase number of clients and transfer of funds.

To explain further, (Newton, 2000) envisaged that the electronic commerce which is also
termed as EDI (Electronic Data Interchange) allows the exchange of business data
electronically (such as purchases and invoices) among the organizations and their trading
partner. He argued that EDI facilitates faster and effective trading which has increased the
quality points and favor among its company players worldwide. The organizations that use
EDI technology have some nature of ‘EDI Gateway’. This ‘EDI Gateway is also frequently
identified as ‘Electronic Commerce Gateway’ (ECG). The EDI Gateway is actually an
assortment of computers and related soft wares that permit the exchange of information to
execute. The EDI Gateway acts as a heart in communication medium among the
organizations letting them to connect negotiate and trade.

(Zähres, 2012) defined the concept of Electronic Money. He stated that electronic money or
e-money is a digitally comparable of cash that can be used for delivery of payment without
the involvement of user’s bank account. While explaining further, he added, electronic money
is an instrument that acts as a prepaid deliverer. Nature wise, e-money can be software based
or it may be hardware based. For example ‘GeldKarte’ is hardware based card used in
Germany. The card can be recharged from any recharging point or any ATM that has the
facility. Another face of e-money, (Zähres, 2012) added is software based. Herein, the
electronic money may be accessible through Internet using PayPal, for example. Electronic
Money focuses a certain group of market, though the growing usage of financial service
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
electronically may for sure create a big consumer market in forthcomings. (Zähres, 2012)
envisaged that the electronic money facility is designed in such a way that a user can even in
secret deliver the payment at a cheaper cost as compared to, for example, payment through
credit cards. Schemes based on e-money can recognize themselves as robust opponents
especially in milieu of delivery of payment electronically through using Internet in
forthcomings. Till today, even, the number of transactions through electronic money is not
very large. Perhaps, the convolutions in performing e-money may be one of the major reasons
of its modest progress. The quality standard must therefore be higher to maintain its
attractiveness for the customers and must be thrived from expected frauds and threats.

Electronic money needs a cryptographic technique in order to make sure that the peer-to-peer
negotiation must be controlled and monitored. Predominantly it must be ensured that the
extensive safety measurements should be taken when the electronic money is kept secured on
account of a customer. Consequently, processes to place application for fresh clients are
complex to execute electronic payment systems. The growth of digitalizing of financial
amenities perhaps may lead to gear up the usage of electronic money in forthcoming days. In
the given scenario, mobile wallets may also be a chief factor. The mobile wallets are virtual
ones that are used to store cards for payment delivery, vouchers or tickets etc. To explain it
shortly, it empowers a cellular phone to pay with a digitally stowed virtual credit card. While
discussing through the process of electronic money, (Zähres, 2012) added a concept of Virtual
Money. He stated that virtual money is another form of electronic money. It is a complete
peer-to-peer kind of e-money that permits delivery of payments online. It facilitates the two
parties payer and payee without involving the third party (financial intermediaries e.g. banks).

(Allen et al., 2001) explained the concept of Electronic Finance and stated that it is the
endowment of financial amenities and markets with the use of electronic communication and
computation. To make it simple to understand, it is about performing all kind of financial
activities, for example, sales order, payment for invoices, claims for staff expenses, and like
electronically through using internet technology. In the past few years, electronic finance has
restructured the course of action of financial landscape, specifically, in terms of electronic
banking and brokerage services worldwide. The financial services being delivered
electronically, whether online or using some remote mechanism, has spread swiftly. Even
though there are certain dissimilarities across the globe, while considering such factors like
the availability and eagerness of telecommunication infrastructure, cohesiveness among the
two may lead in spreading of electronic finance.

Electronic finance appears to be one of the most auspicious areas defined under the umbrella
of electronic commerce since monetary services are highly informative and most of the time
does not entail the physical delivery. It is now apprehended that there are not only some
comparatively simple, but also time-sensitive products such as brokerage which electronic
finance facilitate it with convenient as compared to other existing services. There are areas
which are identified to facilitate the transformation of new innovative technologies that
permits or forces to redesign the market structure at base. At some place, it may give rise to
new business models, but on the other hand, it may leave certain impact, like bank’s corporate
advisory work, for example. From the transformational view point, the Internet may
exemplify an up-to-date solution against the old problems for banks.

III. Emergence of Electronic Banking in Pakistan
Presently, it is evident that large number of commercial organizations in Pakistan are getting
engaged with electronic commerce technologies on an enormous scale. According to the
newspaper an article published regarding the growth of electronic banking in Pakistan, (“E-
Banking deal”, 2013), the growth of electronic banking has geared up raising a huge sum of
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
money transactions to Rs.6.5 trillion during the first quarter (Jul-Sep 2012) of the fiscal year
2013. Looking at the current statistics of banks in Pakistan, according to the recent report of
(SBP, 2012, p.72) as on June 30th 2012, the number of scheduled banks working in Pakistan
are 34 along with 4 other financial institutions with 9,838 branches all over the country. With
the break-even analysis, there are five public sector banks with 1,748 branches, Twenty two
local private banks with 7,498 branches, Seven Foreign oriented banks with 46 branches and
four other financial institutions with 546 branches. (Kolachi, 2006) stated that banks in
Pakistan are providing the following online oriented services and products like inquiry of
account statement, balance inquiry, and fixed deposit. Payment related issues like, fund
transfer, payments made through credit card and direct payments along with utility bill
payment. Also, request may be made for acquiring cheque book, payment stoppage, execution
of demand draft and new fixed deposits. In addition, downloading can also be made in terms
to acquire customer profile, statement download, and other information along with guidelines
of using electronic banking. Table 2.1 provides the statistical overview over the development
of electronic banking system in Pakistan extracted from the SBP Annual Report (2012, p.70)
and SBP Payment Systems Review for the FY13.

Table 2.1: Electronic Banking Statistics in Pakistan
Item FY09 FY10 FY11 FY121 FY132
RTOB 6,040 6,671 7,416 9,291 9,412
ATM 3,999 4,465 5,200 5,745 5,987
POS 49,715 52,049 37,879 34,879 34,229
Source: Payment System Department (Statement Bank of Pakistan)
1. SBP Annual Report - Statistical Supplement (FY12)
2. SBP Payment System Review (FY13) 1st Qtr. Jul - Sep 2012
Statistically, about 93 percent bank branches are now offering real-time online branch
banking services in Pakistan, according to State Bank of Pakistan’s Payment System
Quarterly Review for the 1st Quarter of FY13 released on January 1, 2013 on Tuesday. It has
been estimated that a total of 242 more ATMs have been installed by various banks in
Pakistan raising the total of 5,987 in the country. Overall, total number of 121 bank branches
have been added to the network on Real-Time Online Branches (RTOB) in the first quarter of
FY13 that raised a total of 9,412 which are offering RTOB services out of 10,111 bank
branches across the country, with the percentage 93.08% (9,412/10,111). During 1st quarter of
FY13, 19.67 million plastic cards were issued in the country with 9.55 percent as compared to
preceding quarter. On the other side, overall transactions of electronic banking in terms of
volume elucidated the growth of 15 percent to 74.87 million with the volume of transaction
increased by 5 percent to record Rs.6.5 trillion as compared to other preceding quarter.

Hence for upkeep, great number of institutions has developed their websites to keep their
patrons well informed about their financial offerings and the rendering of their services.
Websites are used primarily to promote the image of a company. Certainly, there are other
cases wherein the technologies of electronic commerce may go beyond merely just
representation. The offering may allow a customer or a client to perform financial
transactions or even tradeoffs. It is noteworthy to mention that SBP has ordered all bank
branches to become ‘Swift Branch’ till June 30th, 2013. With this status, all bank accounts
will become international account and the account holder can easily receive or send
transactions abroad. The other nature of service delivery to the clients may be in the shape of
ABM or in the shape of ATM. In addition, the other facilities may include automatic funds
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
transfer, electronic bill payment, call center service etc. Internet is now a biggest electronic
market across the globe, and the organizations must have to promote themselves.

IV. Conceptual Framework
To proceed further for conclusion and recommendations of the study, questionnaire survey for
these (after which the final ranking has been done) factors have been conducted. These factors
are given below:

1. Customer Awareness 2. System Credibility
3. Online Service Quality 4. Customer Satisfaction

A framework has also been designed to analyze the hypotheses and answer the investigate
quarries. The framework is depicted in following figure:

Figure 1: Conceptual Model of Electronic Banking

Independent

Var iables

System

Credibility

Dependent

Variable

Customer Customer

Awareness Satisfaction

Online Quality

Service

Table 1: Reliability of Measurement Instruments
Sr. # Constructs / Variables # of Items Cronbach’s Alpha (α)
1 Customer Awareness (CA) 08 0.838
2 Online Service Quality (OSQ) 14 0.860
3 System Credibility (SC) 11 0.874
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Hunjra, A. I., Ali, A. & Anwar, S. (2012). The Impact of E-Banking on Customer Satisfaction: A
Comparative Analysis on Pakistani Banking Sector. Bulletin of Business and Economics, 1(1), 1-43.
4 Customer Satisfaction (CS) 08 0.861
Total 41 0.942
Source: Field data

While getting through the reliability of every variable; it may be observed that the Customer
Satisfaction with eight (8) items is a dependent variable having Cronbach’s Alpha value 0.861
(86.1%). System Credibility with eleven (11) items is an independent variable depicting the
highest value of Cronbach’s Alpha. Online Service Quality with fourteen (14) items is
another independent variable representing Cronbach’s Alpha value 0.860 (86%). However,
Customer Awareness with eight (8) items is also an independent variable that holds the
minimum Cronbach’s Alpha value 0.838 (83.8%). Finally, the reliability index of all the
variables with total forty one (41) items is 0.942 or (94.2%).

V. Results and Interpretation
Established on the information gathered from various studies, an effort has been put into
account in order to make sure that the analysis being conducted on the data gathered through
questionnaire is accurate and is true in nature to the extent it could. In doing so, a
questionnaire was designed with the help of past questionnaires which have been posed
earlier in this background. Moreover, it was re-evaluated at various discussions with the
supervisor, so that a proper and comprehensive questionnaire may build up. Additionally, it
was also kept in mind that respondents are the customers from different banks with different
set of minds, and may not like to spare enough time to fill the questionnaire form or if they
will, may fill it half-heartedly. Consequently, a 5 point Likert Scale as a closed end
questionnaire was posed to collect the data, so that customers or the individuals may find ease
in to fill the form in no time, and the study may come up with the true and genuine
representation of the current development of electronic banking in Pakistan.

When the data is gathered, SPSS tool was implemented to figure out the reliability check and
its relevancy towards the topic. In doing so, many questionnaires were discarded which were
haphazardly filled up or did not meet the requirement. Result of different understudy
variables and the degree with which the agreeableness along with its implications with respect
to the respondents and the liaison among them have been analysed by improvising varied
statistical techniques by using SPSS Tool. The results are summarized below:

In this study, three different variables have been identified which are directly or indirectly
involved in affecting the satisfaction of customers towards the usage of electronic banking.
To do the needful in Pakistani environment, focus group approach has been adapted. The
customers of the banks are put into focus in respect either they are enjoying the benefits of
electronic banking or not being offered by their banks irrespective of their age or other
demographic features. Also, the results indicating degree of agreeableness or disagreeableness
to the various statements of the selected variables by the respondents have also been analysed
by descriptive statistic.

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