CUSTOMER PERCEPTION ABOUT PRIVATE BANKS

(HDFC BANK)

INTRODUCTION
Perception is an approximation of reality. Our brain attempts to make sense out of the
stimuli to which we are exposed. This works well when we are about to perceive familiar
facts. Perception can be defined as a process by which an individual select, organize
& Interpret stimuli in a meaningful picture of the world. Perception is the process of
selecting, organizing, & Interpreting or attaching meaning to events happening in
environment.

G. Walters and B. J. Bergiel (1989) characterized Perception as a solid process during

which an individual acquires knowledge about the environment and interprets the
information according to his/her needs requirements and attitudes.

Customer perception is an important component of our relationship with our customers.

Customer satisfaction is a mental state which results from the customer’s comparison of
expectations prior to a purchase with performance perceptions after purchase. A customer
may make such comparisons for each part of an offer called’ domain-specific
satisfaction’’ or for the offer in total called ‘‘global satisfaction’’.
Moreover, this mental state, which we view as a cognitive judgment, is conceived of as
falling somewhere on a bipolar continuum bounded at the lower end by a low level of
satisfaction where expectations exceed performance perceptions and at the higher end
by a high level of satisfaction where performance perceptions exceed expectations.

Like other industries, banking and financial services companies have reached the
Conclusion that the relationship with the customer should not (metaphorically and
literally) end at the bank door. Customer access after the transaction adds value to the

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transaction. Banking means accepting for the purpose of lending or investment, of
deposits of money from the Public, repayable on demand or otherwise and
withdraw able bycheques, draft, order or otherwise. In Banking sector Customer
Relationship Management is of utmost importance.

MEASURING CUSTOMER PERCEPTION ABOUT BANKING

INDUSTRY
Satisfied customers are central to optimal performance and financial returns. Customers
are viewed as a group whose satisfaction with the enterprise must be incorporated in
strategic planning efforts. Forward-looking companies are finding value in directly
measuring and tracking customer satisfaction as an important strategic success indicator.
With better understanding of customers' perceptions, companies can determine the
actions required to meet the customers' needs. They can identify their own strengths and
weaknesses, where they stand in comparison to their competitors, chart out path future
progress and improvement. Customer satisfaction measurement helps to promote an
increased focus on customer outcomes and stimulate improvements in the work practices
and processes used within the company. Everything resolves around the customer and
banks via with their innovative and quality products to suit their clients. Today the
bottom line for any customer inconvenience understanding and evaluating the customers’
perception on the service &products of a bank has without doubt become a need, which
propels the body to structure itself for better performance and service.

Thus delivering high quality service to clients is just as important as delivering

Performance that meets or exceeds their expectations. It is in this context that a study is
necessary to know about awareness levels on the services provided by the private bank
like HDFC Bank.

COMPANY PROFILE OF HDFC BANK:

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Housing Development Finance Corporation Limited, more popularly known as HDFC
Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian
Banking Industry by Reserve Bank of India (RBI). It was one of the first banks to receive
an 'in principle' approval from RBI, for setting up a bank in the private sector. The bank
was incorporated with the name 'HDFC Bank Limited', with its registered office in
Mumbai. The following year, it started its operations as a Scheduled Commercial Bank.
Tech-Savvy
HDFC Bank has always prided itself on a highly automated environment, be it in terms of
information technology or communication systems. All the braches of the bank boast of
online connectivity with the other, ensuring speedy funds transfer for the clients. At the
same time, the bank's branch network and Automated Teller Machines (ATMs) allow
multi-branch access to retail clients. The bank makes use of its up-to-date technology,
along with market position and expertise, to create a competitive advantage and build
market share .
Business Segments
The Bank has three primary business segments: banking, wholesale banking and
treasury. The retail banking segment serves retail customers through a branch network
and other delivery channels. This segment raises deposits from customers and makes
loans and provides other services with the help of specialist product groups to such
customers. The wholesale banking segment provides loans, non-fund facilities and
transaction services to corporate, public sector units, government bodies, financial
institutions and medium-scale enterprises. The treasury segment includes net interest
earnings on investments portfolio of the Bank. As of March 31, 2010, the Bank operated
1,725 branches in 779 cities and 4,232 automated teller machines (ATMs)

LITERATURE REVIEW :

Uppal & Chawla ,(2009) study about “E-Delivery Channel-Based Banking Services:
An Empirical Study customer perceptions about e-banking services “highlighted

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about the customer perceptions about e-banking services in India.The research
methodology included survey of 1200 respondents in Ludhiana and respondents included
public , private and foreign bank sector .The present study investigated the customer
perceptions regarding the necessity of e-banking services , bank frauds , future of e-
banking , preferences of banking customers regarding banks , comparative study of
banking services in various groups of banks, preferences regarding the use of e-channels
and the problems faced by e-banking customers .The study depicted that customers of all
bank groups are interested in e-banking services but at the same they face problems like
inadequate knowledge , poor knowledge , lack of infrastructure and difficulty they face in
opening an account .The paper thus framed suitable strategies like customer education,
seminars, proper meetings , proper installation of ATM machines ,proper networking and
infrastructure facilities etc .

El-Sherbini et al. (2007) investigated through his study on,”Bank customer Behavior
perspectives towards internet banking services in Kuwait “the customers perspectives
of internet banking, their perceived importance for it, usage patterns and problems rising
on its utilization. The paper discussed the strategic implications of the research findings.
Empirical data were gathered from bank customers in Kuwait to achieve the research
objectives. All bank customers in Kuwait were considered as population of research
interest. The results showed the perceived importance of internet banking services by
customers, current and potential use of IB services in Kuwait and problems perceived by
bank customers in using IB. The research paper main hypothesis tested that top five
services that were considered relative important in Kuwait banks were "Review account
balance", "Obtain detailed transactions histories, "Open accounts", Pay bills" and
Transfer funds between own accounts.

Akinici et al. (2004) studied on ,” Adoption of internet banking among sophisticated

consumer segments in an advanced developing country”, and developed an
understanding of consumers' attitudes and adoption of Internet banking among
sophisticated consumers. The research methodology utilized random sample of
academicians, demographic, attitudinal, and behavioral characteristics of Internet banking

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(IB) users and non-users for investigation. The analyises revealed significant differences
between the demographic profiles and attitudes of users and non-users. IB users were
further investigated, and three sub-segments were defined according to a set of bank
selection criteria. Finally, based on the similarities between various Web-based bank
services, four homogeneous categories of services were defined.

Gerrard and Cunningham (2003) conducted a study on,” The diffusion of Internet
banking among Singapore consumers”, to understand why users are more accepting of
internet banking services, which in turn should help bank managers implement the self-
service technology that costs millions of dollars. The study included Exploratory
interviews for collection of data from the respondents and the study identified eight
characteristics that influenced the rate of adoption. The results showed that adopters of
Internet banking perceive the service to be more convenient, less complex, more
compatible to them and more suited to those who are PC proficient. Adopters were also
found to be more financially innovative. Further study demonstrated about the
perceptions that adopters had about social desirability, confidentiality, accessibility and
economic benefits which were viewed no differently when adopters were compared with
non-adopters

Awamleh,(2006) study on,” Diffusion of Internet Banking amongst educated

consumers in a high income non-OECD country”, analyzed internet banking channels
and the service preferences of the educated banking customers in UAE and examined the
carious factors that influence the intention of the customers to adopt or continuously avail
and utilize the internet banking by both users and the non-users of Internet Banking
.Technology Acceptance Model (TAM) was used in this context to identify the factors
that influence the intention to adopt banking services .The research methodology
included data from respondents who were internet banking users and multiple regression
analysis statistical technique was then used to examine the data .Study revealed that
relative usefulness, perceived risk and image has significant impact on the usage of
Internet Banking by users and result demonstability were only ones significant for non-

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users of Internet Banking .Besides this ,exploration of effects of age , income and income
were also seen .

Picado ,Gonzalez and Eckelman ,(2004) study on ,” Customer satisfaction using

QFD: an e-banking case”, investigated the customer satisfaction research using the
technique of Quality Function Deployment Technique Framework and it predicted that
research on the service quality and customer satisfaction has become highly significant in
service industries .Application of CWQ ( Customer Window Quadrant ) and Action Plan
Matrix helps in the analysis of customer and service elements .

Laukkanan ,Sinkkonen and Laukkanen, (2008) study on ,” Segmenting bank

customers by resistance to mobile banking”, highlighted about the role of self efficacy
in bank customers risk perceptions towards the internet banking .Further , it demonstrated
that psychological barriers are even higher determinants of the resistance than the usage
and value , which are constructs related to ease of use and to the usefulness determining
the acceptance .The research methodology included Analysis of Variance as a tool to
analyze the statistical differences .Measurement development was faced based upon the
Consumer resistance theory

Reeti , Sanjay and Malhotra, (2009) investigated about the customers perceptions
about banking services in an emerging economy for which the various determinants
affecting the customer perception as well as attitude towards banking services were
predicted through study that was conducted on the respondents taken from Northern part
of India .Major findings depicted that customer perceptions are influenced by the usage
of e-banking services by the kind of account they hold, age , profession , attached high
degree of usefulness to the balance enquiry service among e-banking services .It was also
found that security and truth are the most important factors in affecting their satisfaction
levels and slow transaction problem speed was the most frequent problem faced by
majority of Customers.

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Husun , (2008) study showed that human capital has a direct impact on the customer
capital which in turn affects the business performance .The study also conceptualized that
there exists negative relationship between process capital and customer capital in the
financial service sector and also that customer satisfaction relies on the extent of training
and high research and development .

Maumbe , (2006) study found that developing nations need to improve the educational
standards and computer literacy prior to broad based adoption and the constructive use of
the internet services as those segment of customers who are poor and unemployed remain
disadvantaged in terms of access and availability to the rural banking services due to lack
of awareness .Thus finding of this study emphasized that real access to Well functioning
and the efficient financial services which has great potential to empower the poor
communities .

Bauer , Malike and Falik , (2006) study revealed that the quality of e-banking portals
has a significant impact on the consumers quality perception in the internet providing
banks which serves a promising start for the best establishment of an effective quality
management .The empirical model study validated a measurement model for web –
qulaity model based on security , trust , basic service quality , value , trust ,
responsiveness , buying service quality to achieve the best customer satisfaction.

Malhotra ,Pooja and Singh , (2010) study examined various factors affecting the
banking services in India .The purpose of the study was to help in filling the gap in
knowledge about Banking Landscape in India. The study utilized sample of 82 banks of
India using the technique of Multiple Regression to explore the determinants .The study
reveled that bankers as well as society perceive that banking services lag in terms of
providing different products and services.

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Gan et al. (2006) conducted a research to examine consumers' choices between
electronic banking and non-electronic banking in New Zealand .The decision to use
electronic banking was hypothesized as function of service quality dimensions, perceived
risk factors, user input factors, price factors, service product characteristics, individual
factors and demographic variables such as age, gender, marital status, income, etc. The
findings in the paper showed that the output from the logistic regression indicated that the
service quality, perceived risk factors, user input factors, employment, and education are
the dominant variables that influence consumers' choice of electronic banking and non-
electronic banking channels..

Byers and Lederer, (2001) concluded that it was changing consumer attitudes rather
than bank cost structures that determines the changes in distribution channels; they
added that virtual banks can only be profitable when the segment that prefers electronic
media is approximately twice the size of the segment preferring street banks.

White and Nteli (2004) conducted a study that focused on why the increase in Internet
users in the UK had not been paralleled by increases in Internet usage for banking
purposes. Their results showed that customers still have concerns with the security and
the safety aspects of the Internet.

Nancy et al. (2001) study found that customers’ complain about computer logon times
which are usually longer than making a telephone call. In addition, respondents felt that
they have to check and recheck the forms filled in online, as they are worried about
making mistakes.

Bowen et al., (2000) found that employee morale is strongly related to customer
satisfaction; that is, when bank customers perceive front-line employees are happy with
their work, bank customers are more likely to be satisfied with the service they receive.

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REFERENCES

Uppal & Chawla (2009), E-Delivery Channel-Based Banking Services: An Empirical

Study customer perceptions about e-banking services, The IUP Journal of Management
Research.

http://www.scribd.com/doc/31035235/e-banking-consumer-behaviour

El-Sherbini, A. M., & Roas, C. P., & Mohamed, M. & Wugayan, A. (2007)., Bank
customer Behavior perspectives towards internet banking services in Kuwait,Advances in
Global Business Research, 4. 1. 28-35.

Akinci, S., Aksoy, S., Atilgan, E. (2004)., Adoption of internet banking among
sophisticated consumer segments in an advanced developing country, International
Journal of Bank Marketing, 22 (3), 212-232. Retrieved July 24, 2007, from Emerald
database.

Global Banking Industry, Report, April 2006

Gerrand, P., Cunningham, J. B. (2003). ,The diffusion of Internet banking among

Singapore consumers., International Journal of Bank Marketing, 21 (1), 16-28. Retrieved
July 24, 2007, from Emerald database

http://www.arraydev.com/commerce/JIBC/2006-12/Awamleh.html

Marvin E. González, Gioconda Quesada, Federico Picado, Carl A. Eckelman, (2004)

,Customer satisfaction using QFD: an e-banking case, Managing Service Quality, Vol. 14
Iss: 4, pp.317 - 330

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