Effect Of Demographic Variables On Customer Perceived Internet Banking Service Quality: Empirical Evidence From India

Abstract

This study attempts to analyse the effect of demographic variables on customer perceptions of Internet banking service quality offered by banks in India. Survey of 1350 Internet banking customers was conducted in the National Capital Region (NCR) of Delhi, India. The data were collected with the help of a self-administered structured questionnaire. 22 items using focus group discussions were developed from an initial pool of 60 Internet banking service quality items. Respondents were asked to rate each attribute on a 5-point Likert scale. Six fixed-alternative questions regarding respondent’s gender, age, occupation, education level and income were included in the survey questionnaire. Five dimensions of Internet banking service quality-Security/Privacy, Reliability, Efficiency, Responsiveness and Site Aesthetics were extracted through exploratory factor analysis. Performance of banks on these five Internet banking service quality dimensions was assessed using descriptive analysis as well as hypotheses testing. Gender wise males rated their banks performance higher than females on all the dimensions except Reliability. Youngsters (18-25 years) found their banks most secure and efficient. Occupation wise, students and housewives have given highest ratings to their Internet banking experience. Post graduates and above qualified customers find Internet banking to be most reliable and responsive. Customers in the highest income group (above Rs. 10 lacs) have rated their banks’ performance highest on all dimensions. However, middle income group (Rs. 2-5 lacs) customers found Internet banking services to be most unsecure and falling short on maintaining their privacy. Results of independent samples t-test revealed a significant difference between male and female customers’ perceptions on Security/privacy and Responsiveness dimensions. MANOVA results suggest a significant difference in customers’ perceptions by occupation and income groups whereas no significant difference was found on the bases of age and education level.