ABSTRACT

Information technology plays the major role in the modern industries throughout the world.
Banks relies on the Information technology in conducting the businesses and also invests huge
amounts of money in developing the technology to reduce the operational costs and better
customer services and to gain competitive advantages by offering the customers better services
etc. Now a day almost all the banks have adopted the Internet banking services, ATMs,
telephone banking etc. in the last decade. More research works have found the significant
numbers of customers are adapting themselves in the online banking through the internet
services. But the findings have also shown that the achievement has got successes only when
they have perceived the technology to be useful. This research work has examined the perception
of the customers’ of the using of IB (Internet Banking) in UK. The research work are therefore,
will very useful reference for the modern banking industry in the UK to improve the current level
of Internet as well as the online banking services and in further research.

Banking is the highly information intensive activity which relies mostly on the information
technology to process, and after that deliver the up to date information to the all relevant clients.
In the current modern world Banks uses the Internet technology like the strategic weapon to
operate, processing of data, secure transaction, etc. The online or internet banking user is
supposed to perform the following activities online through the banking gateway:

1. Updating of account status

2. Checking current balances and transaction history.
3. Inter account transactions,
4. Paying of utility or service bills,
5. Managing of investments and stock trading,
6. ATM access anywhere,
7. Online shopping etc.

The internet has brought efficiency than any other distribution mediums. Multiple distribution
channels that are used by the banks increase the market coverage and enable the different
products to be targeted. Through online banking, the effective mass customization can be
achieved and it also reduce the cost, spending time in replacement etc. lower in staff number,
smaller infrastructure are all helps the banks to reduce financial losses. And bank can serve the
customer financial management to access 24/7 basis.
After above all, it also brought some disadvantages too. High end costly technology, legal
matters, online thefts, crashes, securities, loss of privacy, lack customer contact are all may be
cited in this sector.
CHAPTER: 1
INTRODUCTION

Online Banking:

Banking performed through the internet or intranets that allow users to conduct the financial
transactions through a secured gateway. Thus a virtual banking can be setup through the online
banking and the customers can grab all the banking facility in a more convenient way.

In a general high street banking, the customers has to be in the queue form normal banking like
cash handling or to honor a cheque or other banking needs. While in the online banking
customers need not to pay any attention of being such time killing queues and any sort of
inquiry. He or she just need to log on in a secured online gateway and by some assumable clicks
the financial matters can easily be performed. And in this online banking system a customer is
respected as the customer of a designated bank not any of its branches, he bears a unique id.
Internet banking has also relived us from being spoiled the nature too. Now a day’s no one
bothers about the paper statement, rather they can get it easily from the internet banking.

There are some main constituents of the internet banking. From them, we can mention as private
networks, virtual private network (VPN), public networks, domain, Pc’s, world wide web,
telephones, fax, modem, Automated teller machine (ATM), Internet etc. And from them internet
is the information highway by which customers can place their demands through login to the
internet and then to the bank. They then can use banking services and can input their demands to
the banks. The banks then receive the instructions, match the accuracy and deliver the products
or perform the requested operation.
TECHNOLOGICAL DEVELOPMENT IN UK BANKING

UK’s banking sector is the world’s 3rd largest in some terms, namely, 1. Efficiency, 2. Dynamism
and 3. Return on the capital. A number of mergers and acquisitions have taken place in the UK
banking industry to strengthen its economy and re-structuring the business. Until the late of
1960s, the retail banking was dominated the big-five banking groups of 1. Barclays, 2. Lloyds, 3.
Midland, 4. National Provincial and 5. Westminster Bank. The midland bank had been acquired
by the Hong Kong and Shanghai Banking corporation and named as HSBC. National provincial
had merged with National Westminster and had acquired by the RBS (Royal Bank of Scotland)

UK has now become the most preferred banking destinations in the current world. There are a
number of reasons observed.

In the perspective of banking or its related products and services being offered in the Internet,
Online banking is not differs than the traditional banking system but the services are delivered
through the electronic communications system, the internet. The principle features of the online
banking may be summarized as:

1. The online banking system has removed the traditional geographical b boundaries as the
customers from different countries or regions can take part in it.
2. Has added extra facilities to the traditional banking strategy and facilitated the customers
with the new modern informational banking system.
3. Possesses the highest security to the banking system for the customers and made ease
with their banking with highest satisfaction.
4. Broaden the area of customers’ perception as well as increase the market with more
customers.
5. The banks can create or spread their market with advanced information system and
therefore, creates competitions between them while improving the customer service to a
great extent.
STATEMENT OF THE PROBLEM

In this research work the analysis of the differences of perceptions between the bank customers
those using the Internet banking and those are not using the Internet banking was done and it has
been shown the risk perceptions in financial, psychological, security issues in the customers
those are not adapted with the internet was more than those of the customers using the Internet
banking.
CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

Q1)

Age group Access Internet Do not access Internet

18 – 25 27.00 3.00
26 – 35 51.00 1.00
36 – 45 20.00 2.00
46 – 60 8.00 4.00
61+ 1.00 3.00

Table 1

From the table we can summarize the information below:

1. In 18 – 25 age group 27% access internet, 3% do not

2. In 26 – 35 age group 51% access internet, 1% do not
3. In 36 – 45 age group 20% access internet, 2% do not
4. In 46 – 60 age group 8% access internet, 4% do not
5. In 61+ age group 1% access internet, 3% do not

So it is seen that the age group of 26 – 35 own maximum percentages of internet.

Q2) Internet using time

A) 0 to 01 month

B) 01 to 06 months

C) 03 to 12 months

D) More than a year

 Age group 0 – 01 month 01 – 06 months 03 – 12 months
18 – 25 3 2 12
26 – 35 0 0 15
36 – 45 0 3 0
46 – 60 0 2 8
61+ 1 3 0

Table 2

The above interpretation expresses that the younger age group were using the internet service
since the last one year where the age group between the 36 – 45, 46 – 60 and 61+ started the
internet uses recently. So we can see that the age group of 26 – 35 is the highest user of internet.

Q3) 3) Branch visiting frequency

a) Less than 1
b) 1 to 3 times
c) 3 to 8 times
d) 8 to 12 times
e) over 12 times

Age group Less than 1 1 – 3 times 3 – 8 times 8 – 12 times Over 12 times

18 – 25 11 14 10 3 2
26 – 35 4 1 3 8 26
36 – 45 2 3 2 4 5
46 – 60 4 8 2 2 1
61+ 5 0 0 0 1
 Table 3

The above chart gives us the comparative information between the different age groups of who
visit the Internet banking and the maximum number of 12 times in a month is seen in the age
group of 26 – 35.

Q4) Main reason for visiting the bank. Select one.

 to make a deposit

 to get advice

 to pay bills

 to withdraw cash

 other

Age group To deposit Getting Inquire Withdrawal Other

Advice Balance of Cash
18 – 25 10 8 13 7 2
26 – 35 10 4 7 17 4
36 – 45 3 0 4 7 2
46 – 60 4 4 5 4 0
61+ 1 0 2 3 0

Table 4

The general usage of bank within the customers is mainly is to deposit or withdraw the
cash from the bank. The same has seen in the research work was that mostly the
customers visit the bank is mainly for cash withdrawal and the it has seen the maximum
number in the age group of 26 – 35 and it was 17 times in a month.

Q5) Facilities provided by the bank

 ATM
  Online banking

 Telephone banking

 Mobile banking

 SMS banking

Age group ATM Online Telephone Mobile SMS Banking

Banking Banking Banking
18 – 25 20 21 12 15 25
26 – 35 10 29 14 18 30
36 – 45 2 16 2 15 12
46 – 60 14 25 2 2 14
61+ 5 2 2 2 5

Table 5

The above study details that the most age group user expressed their opinion that they are
favoured by almost all the facilities provided by the banks they are belongs to except the age
group of 61 +.

Q6) Banking services used by the client from the offering by the Bank.
• Information of the products and rates.
• Calculation of loan information.
• Loan applications.
• Download statements.
• Balance checking.
• Application for the credit loan.
• Balance transfers.
• Payment of bills.
 • Others
Age group ATM Online Telephone Mobile SMS Banking
Banking Banking Banking
18 – 25 20 21 12 15 25
26 – 35 10 29 14 18 30
36 – 45 2 16 2 15 12
46 – 60 14 25 2 2 14
61+ 5 2 2 2 5

Table 5

The chart shows the differences between the customers according to their using of banking
services. Mostly the user’s use internet bank offers mainly for information of the products and
rates, second one or the balance checking, the third category use the internet banking to online
balance checking and final category use online banking for the transaction.

Q7) Most important reason for internet banking.

• Traditional bank with the same bank.

• For the brand name.
• Better services of the bank.
• Others

Table 7

There are a number of reasons of the customer in their preference of

Interenet banking in a bank. But the survey study has found that the
principle casuse is for the better services of the bank and next reason is the
Brand name.

MDS
There were 120 participants and their perception was classified in 6 brands
and in 9 attributes. There were 63 columns and the rows were 120 in th SPSS
to analyse the data and 6X10 matrix form were used. The MDS output were
given below,

Ctiteria Lloyds HSBC Natwest Barclays Santand Cooperati

TSB er ve

Accessibility 2.8800 3.4197 3.4760 3.2719 3.4150 2.8455

Accounts 2.9571 3.5358 3.5505 3.2352 3.3918 2.8482

Banks 4.2457 3.6936 3.5486 3.9690 4.0795 2.7583

service

Convenienc 2.8011 3.5356 3.8208 2.8011 3.4536 2.7643

e

Design 3.2144 3.8124 3.5505 3.0202 3.1207 2.7592

Encouragem 2.6709 3.2719 3.5358 2.8798 3.4152 2.7763

ent

Location 3.2678 3.2547 3.1202 2.9607 2.8405 2.3901

HR 2.1754 3.2719 3.7132 2.6349 3.3309 2.4648

Friendly 3.8962 2.7078 3.3454 2.6328 3.4150 2.9301

Triangular Matrix:
The R- square and the stress should have to be measures. So the R-square will indicate the fit and
the stress values will represent the badness of the fit. So the higher value of R-square and the
value in lower scale of the Stress will be expected. We have found the values as under:

Stress = 0.01827 RSQ = 0.98758

The configuration has derived in the 2 dimensions

In this model we can see that the Lloyds bank is in the leading position in 2 dimensions but there
is competition between the Santander and HSBC. The least is seen in Cooperative. Barclays bank
is close to the positive response but it has to work in some of its areas to get an improvement.