CHAPTER 6

RESEARCH METHODOLOGY

6.1 Meaning of Research

6.2 Definition of Research
6.3 Research Approach
6.4 Motivation of Study
6.5 Objectives of Study
6.6 Problem Discussion
6.7 Problem Definition
6.8 Methodology
6.9 Scope of Study
6.10 Sampling Method
6.11 Sample Size
6.12 Data Collection
6.13 Hypothesis
6.14 Tools of analysis
6.15 Limitations of the study
6.16 Significance
6.17 Data Interpretation
6.18 Chapterisation
Chapter -6: Research Methodology 148

The chapter contains the research approach, background of the study,

motivation of study, objectives and research problem of the study. It also discusses
the contribution of this research study and structure of the study.

6.1 MEANING OF RESEARCH

"Research methods are the particular strategies researchers use to collect the
evidence necessary for building and testing theories"
Frey, Botan, Friedman, & Kreps (1991)

Research is a process of collecting, analyzing and interpreting information to

answer questions. The word research is composed of two syllables, re and search. Re
is a prefix meaning again, anew or over again and search is a verb meaning to
examine closely and carefully, to test and try, or to probe.

Research is a formal structured enquiry that utilizes acceptable scientific

methodology to solve problems and create new knowledge that is generally
applicable.

"A system of generalizable statements that are logically linked together to

understand or predict human phenomena."
Kim (1995)

Research is the systematic investigation into existing or new knowledge. It is

used to establish or confirm facts, reaffirm the results of previous work, solve new or
existing problems, support theorems, or develop new theories. A research study may
also be an expansion on past work in the field. In order to test the validity of
instruments, procedures, or experiments, research may replicate elements of prior
studies or the study as a whole. The primary purposes of basic research (as opposed
to applied research) are documentation, discovery, interpretation, or the research and
development of methods and systems for the advancement of human knowledge.
Approaches to research depend on epistemologies, which vary considerably both
within and between humanities and sciences.
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6.2 DEFINITION
Research has been defined in a number of different ways.
"In the broadest sense of the word, the definition of research includes any
gathering of data, information and facts for the advancement of knowledge."
-Martin Shuttleworth

"Research is a process of steps used to collect and analyze information to

increase our understanding of a topic or issue".
- Creswell
It consists of three steps: Pose a question, collect data to answer the question,
and present an answer to the question.

"Research is a studious inquiry or examination; especially : investigation or

experimentation aimed at the discovery and interpretation of facts, revision of
accepted theories or laws in the light of new facts, or practical application of such new
or revised theories or laws".
- The Merriam-Webster Online Dictionary

OVERVIEW
Development, particularly in IT resulted in huge utilisation of computers and
internet technology in business operations has transformed the banking sector in
India. Due to the external environment pressures specifically adaptation of
globalisation compelled to emphasize the e-banking in developing countries which
are lagging behind the developed ones. The reason behind the slow adoption of
technological advancement are weak economic, education and infrastructure position
and most significant one is the lack of trust factor among the customers. The study
represents the findings into prospects and challenges of e-banking in Rajasthan.

6.3 RESEARCH APPROACH

The focus of the study, to find the type of services is available in the field of
E-Banking in Rajasthan (India) especially in the following banking institutions: ICICI
Bank, State Bank of India, Bank of Baroda, and HDFC Bank. Service industry need to
have a proper blend of standardized and customized services for satisfies its
customers. Thus, to know that e- banking services are properly designed to cater the
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actual (customized) need of customer, the emerging situation in the e- banking

services area. Also, to find out the satisfaction level of customers in the E-Banking
scenario. To understand that what more they want & what to be done to increase their
satisfaction level?
BACKGROUND OF THE STUDY
Banking business is always been information extensive business activity that
depends mostly on IT to get, process and provide the required information to its
customers. IT not only processes the required information, it also differentiates
banking products and services. To survive in the competitive business scenario, the
need of the hour for the bank is to develop new and innovative mechanism to retain its
customers and providing them comparatively easy, trustworthy and expedient services
than before. Few banks invest more physical bank branches to expand geographically
to fulfil its main objective to enlarge its business and consumer base and to have
bigger market share in the industry. Whereas, other banks taken a strategic decision to
transform the mode of providing banking services i.e. through internet.

Nehmzow, 1997 explained that today internet facility is one of the strategic
choice for the banks and it resulted in transformational changes in operations and
delivery system of banks, as well as it provide an additional competitive advantage
against traditional branch networks which is losing their significance very fast.

In reality, the boom in the use of e-banking compelled the banks to revisit
their information technology strategies to gain competitive advantage. Nowadays,
customers are well educated and aware who demand much from banking services.
They want more convenient and flexible as well as powerful and easy financial
services and products which conventional banking failed to provide. Although,
various potential benefits of e-banking available but there is few problems required to
be addressed to have a holistic approach.

6.4 MOTIVATION OF THE STUDY

The basic reasons behind carrying a research study are the motivators of the
study and it is important issue in a research study. Motivators behind this study are as
follows:
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1. Internet Banking is worthwhile topic to study so that the quality of services in

Indian Banking sector can be enhanced for the future.
2. Internet Banking has widely studied in developed countries. Few studies have
done in developing countries but still it has a lot of scope to study in
developing countries as in India.

The available secondary data stated that there is a problem in adopting e-

banking in India. The banking customers have lack of trust and experiences regarding
e-banking, even mostly potential banking consumers are not either qualified or
unaware about it. This fact worked as the motivator of this study.

6.5 OBJECTIVE OF STUDY

The objective of the study is to find out solution to the problems presented
through applying scientific procedures. The prime objective of this study is to
discover facts and reality that is covert and yet has been undiscovered. Every research
has its own definite objective. Objectives are the goals researchers set out to attain in
the study. They inform a reader what researchers want to attain through the study. It is
most important to word them clearly and specifically.

Objectives should be listed under two headings:

1. Main objectives (aims);
2. Sub-objectives.
(a) The main objective is an overall statement of the thrust of the
study. It is also a statement of the key associations and
relationships that researcher seek to discover or establish.
(b) The sub-objectives are the specific aspects of the topic that
researcher want to investigate within the main framework of
the study.
(i) Objectives should be numerically listed.
(ii) Wording should clearly, completely and specifically defined
(iii) Objectives should communicate the researcher’s intention to the
readers.
(iv) Each objective should contain only one aspect of the Study.
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The main objective of the study is to deeply analyse the various factors
affecting the adaptation of e-banking in India specifically Rajasthan. Main objectives
of the research are as follows:
1. To analyze the problems and prospects of E- Banking
2. To study the emerging trends in E- Banking scenario
3. To understand the issue E- Banking & its evolution
4. To suggest the existing banks & potential e- banks on how to deal
effectively with new opportunities.
5. To study impact of E- Banking on:
(a) Banking operation
(b) Customer satisfaction

6.6 PROBLEM DISCUSSION

As India is a rural dominating country, Indian people are slow adopter of e-
banking. No significant research available that analyses the various factors affecting
adaptation of e-banking in India.

6.7 PROBLEM DEFINITION

The most popular mechanism for conducting banking operations in India and
other under-developed nations is the conventional branch retail banking.

Advancement in IT is swiftly transformed the mode of designing and

providing personal financial services in India. Today, Indian banks are operating
through-banking to enhance their operational efficiency and to lower down the
operating cost. Although, banks have made revolutionary efforts to provide more
effective and easy online banking facility, still this facility is not even noticed by most
of the customers and subsequently underutilized being widely available. Thus, there is
serious requirement to know the customers’ adoption of e-banking and requirement of
identification of various factors affecting the intention of e-banking. Such issue is of
high of importance, because result of the study on such issue provides key success
factors in formulating strategies to promote e-banking.
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6.8 METHODOLOGY
Research Methodology is a way, through which researchers can find the
solution or solve the research problem. In other words, research methodology is
understood as the science of studying how research is done scientifically.

Research methodology is the process of solving research problem

systematically. Generally, in research methodology research proceed through various
step procedures to study research problem with having proper and adequate logical
and rationale background. It is very much required for researcher to understand
research procedure and techniques as well as research methodology.

6.9 SCOPE OF STUDY

This study will be focused on the banking institutions providing e- banking
services. For intensive study of the banking institutions providing e- banking services
in Rajasthan, it is not possible for researcher to cover all the banking institutions. So,
this study will cover following banks:
1. State Bank of India
2. Bank of Baroda
3. ICICI Bank
4. HDFC Bank

6.10 SAMPLING METHOD

“There is no hope of making scientific statements about a population based on
the knowledge obtained from a sample, unless we are circumspect in the choosing a
sampling method.”

- Malhotra and Birks (2006)

The sample was collected by multi- stage method & cluster method. Firstly,
the commercial banks were chosen based on convenience sampling and secondly,
branches to be studied were chosen through cluster method.

6.11 SAMPLING SIZE

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The information were collected about commercial banks comprises of public

sector, private sector & foreign banks. Those banks will be chosen who are
representative of their area. The universe of the study consists of all commercial
banks operating in Rajasthan.

6.12 DATA COLLECTION

Generally, whenever we deal with a real life problem found lack of data
availability to solve that problem. Therefore, collection of adequate data is very
important to the researcher. Although, there are varied mode of data collection
available that differ from each other on the basis of financial cost involved, time taken
and other resources involved; selection of data collection technique totally depends on
the discretion of the researcher.

It comprises data collection & representation of same or different data under

the given situation. There are various ways of data representation like geographical,
tabular & pictogram etc., through which any situation can be presented. Data plays a
very important role in conceptualization & understanding of any subject. These
figures vary concisely and clearly show the actual picture; researchers can compare &
analyze the situation through various time periods, within sectors etc. with the help of
these figures.

There are two ways to collect the data i.e. primary method & secondary
method. In primary method data is collected directly to the group, site or concerned
authorities. In secondary method, data is collected indirectly. Through this method
data can be collected from various available journals, books, reviews, newspapers, other
research & publications etc. For our purpose data can be collected by both the
methods:-

(a) Primary Data: It will be collected by schedules and interview

method and review of concerned bank’s literature.

(b) Secondary Data: It will be collected by books on E-Banking,

internet, periodicals, journals, magazines & newspapers etc.
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6.13 HYPOTHESIS
“A hypothesis is a logical supposition, a reasonable guess, an educated
conjecture. It provides tentative explanation for a phenomenon under investigation.”
-Leedy & Ormrod
A hypothesis is a tentative statement about the relationship between more than
one variables. A hypothesis (from Greek ὑπόθεσις; plural hypotheses) is a proposed
explanation for a phenomenon. The term derives from the Greek, ὑποτιθέναι –
hypotithenai meaning "to put under" or "to suppose". A research hypothesis is
understood as the statement created by researchers when researchers speculate upon
the conclusions of a research or experiment.

HYPOTHESIS: 1
Hypothesis 1: E-Banking is the new driver of the Banking business.
Hypothesis 0: E-Banking is not a new driver of the Banking business.

HYPOTHESIS: 2
Hypothesis 2: E-Banking helps to improve the customer base/ business of banks.
Hypothesis 0: E-Banking does not helps to improve the customer base/ business of
banks.

HYPOTHESIS: 3
Hypothesis 3: E-Banking helps to generate customer satisfaction.
Hypothesis 0: E-Banking does not helps to generate customer satisfaction.

6.14 TOOLS OF ANALYSIS

It is a very important to get the conclusion of the research study. For this
purpose, firstly the data collected is tabulated. Secondly, advanced statistical tools like
mean, deviation, correlation etc. will be applied to analyze and interpretation of data.

6.15 LIMITATION OF THE STUDY

1. Only commercial banks are chosen for the purpose of the study.
2. The study is based on the availability of data.
3. Bias of sources interviewed may creep in.
4. Bias of the interviewer may also affect the result of the study.
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6.16 SIGNIFICANCE
“All progress is born of inquiry. Doubt is often better than overconfidence, for
it leads to inquiry, and inquiry leads to invention” is a popular statement given by
Hudson Maxim that suits totally to significance of conducting a research study. The
significant increment in the number of research studies conducted always lead to
development and advancement of the social system. Research incorporates scientific
and inductive approach and encourages rational thinking among researchers. In
modern times, the importance of researches has significantly increased in the area of
applied economy that includes areas related to business as well as related to the entire
economy. Due to drastically increment in the complexity of business world
government has been focusing more on conducting research studies to solve the
operational problems. Research earned added importance for government as well as
corporate sector as it is viewed as an aid to economic policy. In Indian economic
system, research provides the base for most of the government policies.

The world is changing at a very fast rate and technology is considered to be the
key driver for these changes around the globe. An analysis of technology and its
utilisation show that it has permeated in nearly every aspect of our life. Internet is a
truly global phenomenon that has made time and distance irrelevant to various
transactions.

This research seeks to make an original contribution to knowledge by

investigating the impact of e-banking factors on outcomes of customer satisfaction in
the commercial banks industry in India. This research contributes to the services
marketing discipline in finding out the role of the e-banking in enhancing customer
satisfaction and loyalty. Factors pertaining to accessibility, convenience, security,
privacy, content, design, speed, fees and charges were a focus of this study as they
have an influence on customer satisfaction.

Conclusions and contributions found will be beneficial for both academics and
banks alike. Academically, this work aims to focus academic attention upon a much
neglected domain – the marketing and information technology of banking services in
India.
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The banking services industry is an important and vibrant sector in India and
banks are considered as a vital segment of the financial services provider where
customers can receive a wide range of financial services.
Through this research banks would know how to provide better e- banking
services & increase customer satisfaction and banking business and customer base.
Banks with a national economy, work towards building national capital, increasing
national savings and mobilizing investments in trade and industry.

The primary objective of this study is to find out various problems faced by
consumers while using e-banking services. Through this, it will provide benefits to the
society in terms of better, effective and economical e- banking services.

6.17 DATA INTERPRETATION

The research is divided into two parts, i.e. two research surveys. One part of
the research study focuses on the banks’ perspective on e- banking services offered by
the bank, specifically about its prospects and challenges of offering e- banking
services. From mine prior familiarization with the banks, I realised that some banks’
claim of internet banking services were either nominal or that they had their internet
banking services system jumbled and had suspended the service. Based on the level of
the online services offered, we selected two public sector commercial banks (SBI &
BOB) and two private sector commercial banks (ICICI Bank & HDFC Bank).

The second part of the research study focuses on the customers’ perspective
about advantages, disadvantages and risks involved in using internet banking.

(a) SAMPLING TECHNIQUE

The basic objective of sampling is that by selecting some of the elements in a
population, researchers may draw conclusion about the entire population. A
population element is the subject on which the measurement is being taken. It is the
unit of analysis (Cooper & Schindler, 2003). In this research the population of interest
is the Rajasthan banking customers.
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Rajasthan covers 10.4% of India, an area of 342,269 square kilometres

(132,151 sq mi). Today Rajasthan is the preferred destination for IT companies and
North India's largest integrated IT Park is located in the capital of state i.e. Jaipur and
is named as Mahindra World City Jaipur, covering nearly 3,000 acres (12 km2) of
land. Some of the companies operating in Rajasthan include Infosys, Genpact, Wipro,
Truworth, Deutsche Bank, NEI, MICO, Honda Siel Cars, Coca Cola and Procter &
Gamble.

Rajasthan has a mainly Rajasthani population. Hindus holds for 88.8% of the
population. Muslims account for 8.5%, Sikhs for 1.4% and Jains for 1.2% of the
population. The state of Rajasthan is also populated by Sindhis, who came in 1947 to
Rajasthan from Sindh province (now in Pakistan) during the India-Pakistan
separation.

The mother tongue of the most of the people in Rajasthan is Rajasthani.

Rajasthani and Hindi are the most widely used languages in Rajasthan. Rajasthani is
used as a medium of instruction, along with Hindi and English. Some other languages
used in Rajasthan are Gujarati, Sindhi and Punjabi.

During recent years, Rajasthan has made significant progress in the area of
education. The state government has been making sustained efforts to improve the
educational standard. In recent decades, the literacy rate of Rajasthan has increased
significantly. In 1991, the state's literacy rate was only 38.55% (54.99% male and 20.44%
female). In 2001, the literacy rate increased to 60.41% (75.70% male and 43.85%
female). This was the highest leap in the percentage of literacy recorded in India (the rise
in female literacy being 23%). At the Census 2011, Rajasthan had a literacy rate of
67.06% (80.51% male and 52.66% female). Although Rajasthan's literacy rate is below
the national average of 74.04% and although its female literacy rate is the lowest in the
country (closely followed by Bihar at 53.33%), the state has been appreciated for its
efforts and achievements in raising both male and female literacy rates.
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Table 13: Socio-Economic Indicators of Rajasthan

S.
Item Year Unit Particulars
No.
1. Area 2001 '000Sq.Km. 342
2. Population Persons 2011(P) Crores 6.86
Males 2011(P) Crores 3.56
Females 2011(P) Crores 3.30
3. Density of Population 2011(P) Per Sq.Km 201
4. Literacy Rate Persons 2011(P) % 67.06
Males 2011(P) % 80.51
Females 2011(P) % 52.66
5. No. of Banking offices Sept.2010 No. 6.2
per lakh of population
6. Area coverage per Bank Sept.2010 Sq.Km. 82.35
7. Per Capita income (at current 2010-11 Rs. 39967
Prices) (A)
8. Per Capita income (at constant 2010-11 Rs. 25616
2004-05 Prices) (A)
9. Population (i)India 2011(P) Crores 121.02
(ii)Rajasthan 2011(P) Crores 6.86
Source: Directorate of Economics & Statistics

Total population of Rajasthan = 6,86,00,000

Number of banking offices per lakh of population = 6.2
Total number of banking offices in Rajasthan = 6,86,00,000 * 6.2/1,00,000 = 4260
(approx.)
Average number of customers per branch = 2000 persons
So, total population of banking customers in Rajasthan = 4260*2000 = 85, 20,000

(b) SAMPLE
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Statistically, a sample is a subset of a population. Typically, the population is

very large; making a census or a complete enumeration of all the values in the
population is impractical or impossible. The sample represents a subset of manageable
size of units. Samples are collected and statistics are calculated from the samples so
that one can make inferences or extrapolations from the sample to the population. The
sampling method which was used in this research is multi- stage sampling technique.

There are various formulas for calculating the required sample size based upon
whether the data collected is to be of a categorical or quantitative nature (e.g. is to
estimate a proportion or a mean). In this research study sample size is drawn from
‘Required Sample Size’ table (Appendix no.3)
The formula used for this calculation in this table is:

This formula is the formula used by Krejcie & Morgan in their 1970 article
“Determining Sample Size for Research Activities” (Educational and Psychological
Measurement, #30, pp. 607-610).

According to this table sample size for the population of 85, 20,000 customers
should be 384 persons. To get 384 respondents we have taken 400 persons as sample
size. These 400 persons are divided into 5 selected districts of Rajasthan.
Development profile of the selected districts of Rajasthan
We have selected five districts of Rajasthan for the study. These are as follows:-
(1) Jaipur
(2) Jodhpur
(3) Sikar
(4) Tonk
(5) Udaipur
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Table 14: Human Development Index-2007: Districts and the State of Rajasthan

Education Index Health Income Human

DISTRICTS
[ner+Lit(+15) Index Index Development Index
Jaipur 0.833 0.688 0.814 0.778
Jodhpur 0.725 0.725 0.609 0.686
Sikar 0.837 0.830 0.428 0.698
Tonk 0.688 0.443 0.582 0.571
Udaipur 0.761 0.413 0.611 0.595
Rajasthan 0.755 0.735 0.640 0.710

Source: Directorate of Economics & Statistics

(c) PILOT STUDY

In this research study questionnaire being used for the purpose of data
collection and the pilot test was conducted through interviewing with 50 banking
customers. After interviewing with these people some changes are made in the
questionnaire and the revised questionnaire was discussed with remaining respondents.

6.18CHAPTERISATION
The whole research study comprised in nine various chapters. These are as
follows:
1. Introduction
2. Introduction of E- Banking
3. Review Of Literature
4. E- Banking Scenario in India
5. E- Banking Services
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6. Research Methodology
7. Findings
8. Conclusion
9. Recommendation & Suggestion
#Bibliography
#Appendix