31-05-2018

Impact of Technological Changes in Banking

Industry on Customer Experience

In last two decades, the banking industry has gone many changes on the
technological front. Specifically in last 5 years and moreover after
demonitisation, the external environment of banking business
(Legal/Political) environment has resulted in a surge in use of technology
in retail operations of banking.

The above facts are clearly evident from newspaper articles and even my
personal experiences.

Due to the phenomenal change in technology use in banking, I felt a need

to research on the same and since customers are the most important part
of every business, and since banking industry is no exception to this rule, I
felt the need to study the impact of the these technological changes on
Customer Experience.

Customer experience is a variable, which I have found to be derived from

various quantitative as well as qualitative aspects. Since the qualitative
aspects are difficult to quantify, I decided to study the literature on the
same and find precise quantitative variables, which have been worked on
so far, and alongwith, generate some variables of my own too.

Scholars in this field have used factors from three different models in
combination and concluded that there are certain attributes, which are
significant for customers to accept technology in use of banking services.
These models are mostly experimented in workplace environment or non
e-banking services like e-government services or B2C commerce and in
countries like USA or countries other than India, but no precise research
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has been worked in this area in the Indian retail off branch electronic
banking context.

The existence of this gap in research in electronic banking (Internet/ATM)

in the Indian context prompted me to empirically test the combination of
these models as well as others and find the determinants that lead to
acceptance of technology and use of new technological advancements in
banking.

The following literature has been reviewed and the findings are
summarized hereunder:

Acceptance of technology, related factors in use of off branch e-

banking: an Indian case study (2016)
The above study purports to evaluate and investigate as to why off branch
e-banking in India is not accepted to the extent as it is in advanced
countries.
This study makes an attempt to find out possible attributes for accepting
the technology by the customer. Authors have reviewed Technology
Acceptance Model (TAM) and Theory of Reasoned Action (TRA).
TRA pronounces; Behavioral Intention = Attitude + Subjective Norm; i.e.
attitudes and subjective norms predict intentions of the customer.
The research further digs into the above expression and it is also
elaborated further, it will prove to be a base for my research also.

Fred Davis et al. mention that among the many variables that may
influence system use, previous researches suggest two determinants that
are especially important. First, people tend to use or not use an application
to the extent that they believe it will help them perform their job better.
Authors have referred to this first variable as perceived usefulness.
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Second, even if potential users believe that a given application is useful,

they may, at the same time believe that the systems are too hard to use
and that the performance benefits of usage are less than the effort of using
the application. That is, in addition to usefulness, usage is theorized to be
influenced by perceived ease of use.

Under rationale of study, authors have stated – “To increase in customer's

preference in electronic banking (Internet/ATM) in India we can study and
find out possible attributes for accepting the technology by the customer and
adopting the technology which lead to intent to use and finally increase in
usage.”
The rationale of this study partly, but fundamentally matches with the
rationale of my proposed study.
The paper says that scholars have worked with determinants like
perceived usefulness (PU), perceived ease of use (PEOU), relative
advantage/convenience, compatibility, image, risk, security, trust on
institute/government agencies, trust on control mechanism, accessibility,
speed & other factors from TAM, DOI and trustworthiness model.
This study aims at determining the impact of factors like:
1. Perceived usefulness,
2. Perceived ease of use,
3. Complexity,
4. Perceived risk,
5. Trust on technology and
6. Trust on bank on usage intention.
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An Empirical Analysis of Customer Satisfaction of Indian Public

Sector Banks (2014)
Banking industry is a service industry, hence the quality of service
provided and the extent of customer’s satisfaction plays a pivotal role in
retaining customers and thereby generating and enhancing the banks
revenue. Banks should recognize the various dimensions of customer
satisfaction, as it is an important determinant of service quality.

This was an exploratory study. The findings of this paper are based on a
detailed analysis of data obtained by questionnaires, observation and
interviews from 150 respondents who used the banking services of
selected public sector banks in Mumbai.
An Opportunity Matrix developed by the professors at Harvard Business
School, was drawn to reveal those services that customers consider
important to enhance their level of satisfaction.