SERVICE QUALITY EVALUATION IN INTERNET BANKING Introduction The service industries are mostly customer driven and their

survival in c o m p e t i t i v e environment largely depends on quality of the service provided by them One of the technologies which really brought information revolution in the society is Internet Technology and is rightly regarded as the third wave of revolution after agricultural and industrial revolution. Advent and a d o p t i o n o f i n t e r n e t b y t h e i n d u s t r i e s h a s r e m o v e d t h e c o n s t r a i n t o f t i m e , d i s t a n c e a n d communication making globe truly a small village. Financial sector being no exception, numerous factors such as competitive cost, customer service, increase in education and income level of customers, etc. influence banks to evaluate their technology and assess their electronic commerce and internet banking (i -banking) strategies. Internet banking allows banking from anywhere, anytime and is used for transactions, payments, etc. over the internet through a bank, a c r e d i t u n i o n o r s o c i e t y s s e c u r e w e b s i t e . S o , b a s i c a l l y , i n i - b a n k i n g a c l i e n t h a s o n e - t o - o n e interaction with the banks website, and in such a situation it is essential on the part of bank to provide high quality services over the internet. So, in contrast to traditional banking, i-banking i n v o l v e s non-human interactions between customers and online bank information s y s t e m . Customer satisfaction, customer retention and new customer acquisition are the key factors in i- banking system. Banks with lower market share also perceive i-banking technology as a means to increase the market share by attracting more and more customers through this new channel of delivery. However, the service quality in i -banking from customers needs thorough analysis to find out the determinants for success and growth of new channel of delivery in India so that useful guidelines for bankers can be extracted. To this end, this study aims at determining the s e r v i c e q u a l i t y o f b a n k s o p e r a t i v e i n I n d i a w i t h r e g a r d s t o i - b a n k i n g a n d i d e n t i f y i n g t h e important parameters crucial for service quality from customers perspective. The study also explores the importance of parameters across the demographic profile of the respondents. Development of i-banking in India The financial reforms that were initiated in the early 1990s and the globalization and liberalization measures brought in a completely new operating environment to the banks. The bankers are now offering innovative and attractive technology-based services and products such as Anywhere Anytime Banking, Tele -Banking, Internet Banking, Web Banking, etc. to o t h i e r c u s t o m e r s t o c o p e w i t h t h e competition. The process started in the early 1980s when 1 Reserve Bank of India (RBI) set up two committees in quick succession to accelerate the pace of automation of operations in the banking sector. A high -level committee was formed under the c h a i r m a n s h i p o f D r . C . R a n g a r a j a n , t h e n G o v e r n o r o f R B I , t o d r a w u p a p h a s e d p l a n f o r computerization and mechanization in the banking industry over a five-year time frame of 1985 1989. The focus by this time was on customer service and two models of branch automation w e r e d e v e l o p e d and implemented. Having gained experience in the earlier m o d e o f computerization, the second Rangarajan commi ttee c o n s t i t u t e d i n 1 9 8 8 d r e w u p a d e t a i l e d perspective plan for computerization of banks and for extension of automation to other areas such as funds transfer, e -

mail, BANKNET, SWIFT, ATMs, i -banking, etc. Internet banking in I n d i a i s currently at a nascent stage. While there are scores of companies s p e c i a l i z i n g i n developing i-banking software, security software and website designing and maintenance, there a r e f e w o n l i n e f i n a n c i a l s e r v i c e p r o v i d e r s . I C I C I b a n k i s t h e f i r s t o n e t o h a v e i n t r o d u c e d i - banking for a limited range of services such as access to account information, correspondence and, recently, funds transfer between its branches. ICICI is also getting into e -trading, thus o f f e r i n g a broader range of integrated services to the customer. Several finance p o r t a l s f o r provision of non-banking financial services, e-trading and e-broking have come up. Commercial applications such as Electronic Bill Presentment (EBP) and Procurement systems may not be i n t r o d u c e d i n I n d i a i m m e d i a t e l y , b u t a r e l i k e l y t o h a v e a g r e a t e r i m p a c t t h a n t h e r e t a i l applications. The corporate sector is adequately computerized and has already recognized the important role of e-commerce in future. Increasingly, companies are setting up websites even where there are no immediate tangible benefits to them from doing so. Status of i-banking in India In Indian context, many publications throw light over the importance of i -banking and also its prospects for the Indian banking industry. Unitrans and Swagman (2001) studied the d r i v e r s f o r c h a n g e i n t h e e v o l u t i o n o f t h e b a n k i n g s e c t o r , a n d t h e m o v e t o w a r d s e l e c t r o n i c banking by focusing on two economies, Australia and India. The study found that Australia is country with internet-ready infrastructure as far as telecommunication, secure protocols, PC penetration and consumers literacy are concerned. India, by comparison, is overwhelmed by weak infrastructure, low PC penetration, developing security protocols and consumer reluctance in rural sector. Although many major banks have started offering i-banking services, the slow pace will continue until the critical mass is achieved for PC, internet connections and telephones. However, the upsurge of IT professionals with growing demands is pressuring the government and bureaucracy in the country to support and develop new initiatives for a faster spread of i- banking Rae and Parthia (2003) provided a theoretical analysis of i-banking in India, and found that as compared to the banks abroad, Indian banks offering online services stil l have a long way to go. For online banking to reach a critical mass, there has to be sufficient number of users and the sufficient infrastructure in place. In India, comparatively less number of studies has been conducted on the current status of i -banking and customer satisfaction compared toothier countries. Thus, there is a lot of scope for the research to present new ideas concerning i- banking in India which may be useful to the Indian banking industry. There are a series of papers that observe that i-banking has revolutionized the banking industry and the banking industry as under pressure to offer new products and services. However, to succeed in todays electronic markets a strategic and focused approach is required. The internet users in India The role of internet is becoming inevitable to corporate and society. Across the world, governments and corporate are increasingly working towards the better utilization of the internet. The internet which was initially perceived as a communication media is

now metamorphosing into a powerful business media Thus, in India, slowly but steadily, the Indian customer is moving towards i-banking . A number of banks have either adopted i -banking or are on the threshold of a d o p t i n g i t . T h e b a n k s s t a r t e d i - b a n k i n g i n i t i a l l y w i t h s i m p l e f u n c t i o n s s u c h a s g e t t i n g information about interest rates, checking account balances and computing loan eligibility. Then, the services are extended to online bill payment, transfer of funds between accounts and cash management services for corporate. Recently, banks have started to facilitate payment of e -commerce transactions by directly debiting bank accounts or through credit cards. It will add tithe revenues of the bank. Service quality in the context of i-banking The definition of quality is contextual one and differs from person to person. In general, the quality is basically classified into five categories, viz. transc endent, product led, process or supply led, customer led and value led. The definition of service quality is based on customer-led quality definition where quality is defined as satisfying customers requirements (Deming, Juran, Feigenbaum and Ishikawa), relying on the ability of the organization to determine customers Is factions (satisfiers) in banking services, and integrity, reliability, a v a i l a b i l i t y n a t ionality as the main sources of dissatisfaction ( dissatisfies). Collaboration, continuousR s p e c t i v e . I t i s o b s e r v e d t h a t c u s t o m e r s a r e s a t i s f i e d w i t h t h e r e l i a b i l i t y o f t h e s e r v i c e s t y of i-banking. The ibanking is going to be very crucial for India, having increasing ntage of younger generation population with computer literacy. Since re search on service vide u s e f u l r e c o m m e n d a t i o n s t o t h e b a n k e r s f o r i m p r o v i n g t h e i banking services. Thanking h a s b e e n t e s t e d i n u r b a n I n d i a . Furthermore, a small sample may not be the