Project Report Study on Internet Banking Operational Difficulties and Suggestions for Improvement Introduction State Bank of India

has spent years to build its reputation as the most trusted bank in India. It has always been striving not only to maintain the loyal customer base but also to match itself to the expectation of its customers in terms of service and trust. As a result of continuous effort, State Bank of India now ranks at 380 in the Fortune Global 500 list and at 219 in Forbes Global 2000 list of 2008. SBI has also become the 2 nd largest bank in the world achieving the milestone of 10000 branches on 9 th March 2008 (1st place is occupied by Industrial and Commercial Bank of China with over 18000 branches). SBI has been facing cut throat competition from well managed and aggressive PSU banks and new generation private sector banks. The Indian banking scenario changed completely from the sellers market to buyers market. This led to the enhanced expectation of the customers from the bank. Now they want not only fast and quality banking service at the door step of the bank but also wants the bank to serve them round the clock and preferably at their door steps or at a place of their convenience. To fulfill the aspiration of its customers and remain competitive with the new generation high tech banks, State Bank of India has made huge investment on technology. The use of technology not only provides delight to the customers but also enhances the efficiency of the bank and reduces the operating cost thereby increasing profitability. State Bank Internet Banking (Online SBI) The internet banking portal of State Bank of India also known as Online SBI provides secure access of the customers to their accounts anywhere in the

world. This is the channel which virtually brings the branches of State Bank of India at the finger tip of the customers. The internet banking customers (INB customers) can perform almost all the transactions for which they were earlier required to visit the branches and stand in the queue, at their convenient time with the use of their personal computer without paying extra charge to the bank. The bank is also benefited by this facility. A study has suggested that the transaction cost for one transfer transaction done using INB is less than 50 paisa for the bank but the same transaction done at any of the branches of the bank cost Rs. 45/- to the bank. Apart from the monetary benefits, the branches get additional benefits which have far reaching impact on the operation, business and profitability of the bank. It helps the branches by having fewer crowds in the branch to manage and more time for marketing and business development. Presently the following functions are available in the INB of State Bank of India. The list is suggestive and not exhaustive. 1 2 3 4 5 Viewing account information Generating account statement Verifying cheque status Transfer of funds to own SBI accounts across the country Transfer of funds to third party (beneficiary) SBI accounts across the country, 6 7 8 9 Interbank transfer using RTGS, NEFT Issuance of demand drafts Payment of utility bills mobile payments

10 Tax payment; etc. Presently there are 6 crore internet users in India mostly in metro and urban area. The internet penetration in India is 5.2% of its total population of 114.80 crore. SBI has a Saving Bank (ordinary) customer base of 6.22 crore (as on

31.03.2008). However, the total INB users as on March 2008 are 0.18 crore, a mere 2.89% penetration of its Saving Bank customers and much lower of its total customers. It has added 81.97 lacs new Saving Bank (ordinary) customer in the FY 2007-08. However, the new INB users added by the bank are 0.52 lacs (0.63%) only. If we go by the penetration percentage of internet users in India, about 4.2 lacs new users only in saving bank a/cs should have been added. SBI and its Associates have a Saving Banks customer base of 3.44 crore in Metro and Urban areas (as on March 2007 as per BSR published by RBI). In Urban cities there are 1.96 cr customers and in Metro cities 1.45 cr customers. These customers have access to internet and are literate too. Still the number of INB users in these areas are not encouraging and needs probing. This study has been an attempt to cover all aspects of the internet banking of State Bank of India and its awareness among the users, their preference and aversion, factors that would enable them to start using the online banking services etc. It has also been an attempt to find the reason about the low number of users and also suggest some measures to increase its users. Research Methodology The study was conducted in one metro and one urban centre in order to have the representative data. The urban and metro centres were selected because internet users are mostly concentrated in these areas. The structured questionnaires were administered to the customers of State Bank of India in NCR in metro centre and in Patna in Urban centre. The survey collected information about the customers profile, their preferred banking channels, internet literacy, their awareness about internet banking of SBI, and their satisfaction level for the usages of INB of SBI. The target audiences are comprised of all age group and internet literacy with a sample size of 106 respondents. The structured questionnaire was administered to 141 officials of State Bank of India across the country. They were requested to list out the problems being faced by the branches in increasing the number of INB users and also give

suggestions to increase the number of INB users. The questionnaires were personally administered to some of the branches in metro and urban centre. The rest of the feedbacks of the officials were collected by administering questionnaires to the participants who came to the Academy for the training. The data for the report was collected with the extensive use of INB support site of State Bank, CBS tools for controllers through State Bank Times, BSR publication of RBI and also from various sources on the internet.

Executive Summary Status of INB of SBI in Metro and Urban centre covered The State Bank of India has a Saving Bank (ordinary) customer base of 6.22 crore as on March 2008. Out of these, 36 lacs new SB customers were added in metro and urban branches. During the same period 0.52 lacs new INB users were added by state bank branches which accounts for 1.44% of the total new SB accounts opened in metro and urban areas. With the internet penetration of 5.2% of the total population in India, at least approximately 1.88 lacs new users should have been added. Feedback from the customers of State Bank of India Demographic profile of the customers: Age Group 11 20% of the respondents are in the age group of 18-29, 41% are in 30-40 age group, 35% are in 41-60 age group and 5% are above 60 years of age. 12 In metro centre 26% respondents are in the age group of 18-29, 38% in 30-40 age group, 30% in 41-60 age group and 6% above 60 years of age. 13 In Urban centre 14% of the respondents are in 18-29 age group, 43% in the 30-40 age group, 39% in 41-60 age group and 4% are above 60 years of age. Preferred banking channel of the respondents 14 45% of the respondents consider ATM as their preferred banking channel. 15 38% respondents consider branches as their preferred banking channel for the banking transactions.

16 16% prefer to transact through internet banking. 17 Phone banking does not have acceptability among the respondents. Do you use internet? 18 82% of the total respondents are familiar with internet whereas 18% of the respondents have never used internet. 19 95% of the respondents in the age group of 18-29 are internet users. 20 93% of the respondents in the age group of 30-40 are users. 21 70% of 41-60 age group use internet. 22 Even 40% of the respondents above 60 years of age use internet. Awareness about the internet banking of SBI 23 65% of the total respondents are aware about the internet banking of State Bank of India. However, 35% of the respondents are not aware about the existence of this facility. 24 86% respondents in 18-29 age group are aware of the internet Banking of SBI. 25 Only 60% respondents in other age groups are aware of the internet banking facility of State Bank of India. Users among those who are aware of INB of SBI 26 23% respondents are SBI internet users whereas whopping 77% are not using this facility. 27 43% respondents in the age group 18-29 are using SBI INB. 28 Only 21% respondents in age group 30-40 and a meager 8% in the age group 41-60 are SBI internet banking users. 29 40% respondents above 60 year of age are using INB.

Have the customers been offered INB facility by the branches? 30 Only 8% of the respondents who are not using INB have actually been offered this facility by the branch. 92% have never been offered this facility by the branches. Reason for not using Internet Banking of SBI 31 57% of respondents who do not use SBI INB think that SBI does not offer this facility. 32 57% respondents expressed their unwillingness to use this facility. 33 29% feel face to face interaction and want the transaction to take place across the counters. 34 23% expressed their inability to operate it. 35 Only 19% expressed security concern as the reason for not using this. The features used by the INB users 36 48% respondents use or willing to use 3rd party transfer facility and 27% wish to use INB for self a/c fund transfer. 37 In the information transaction, 85% respondents use this facility for viewing / printing of the statement of account. 38 35% use INB for placing new cheque book issue request. 39 In value added services, 54% respondents are using State Bank Internet banking for booking of railway tickets. Satisfaction level of the respondents

Satisfaction level with the look of the online SBI site 40 The INB users are satisfied with the look of the Online SBI site (66%). Satisfaction level with the speed of the online SBI site 41 63% users are satisfied with the speed of onlinesbi.com. 42 None of the users is dissatisfied with the speed of this site. Problems being faced by the branches in increasing the number of INB users in the branches 43 34% respondents feel that the employees at the branch lack knowledge about internet banking facility of SBI. 44 18% respondents feel that the customers do not have resources like PCs, internet connection to access the internet banking. 45 14% feel that the customers are not aware of this product. 46 14% respondents feel that the customers are IT illiterate and thats the reason branches are unable to push this product to the customers. 47 13% feel that security concerns in the mind of the prospective users drive them away from availing this facility. 48 13% feel that customers are unwilling to avail this facility. 49 9% feel that due to shortage of staff the INB is not getting due attention in the branches. 50 6% respondents believe that lack of effort on the part of branch functionaries is the reason for the less number of INB users. 51 6% feel that due to lack of technical support for solving the problems encountered by the customers are not only an impediment in marketing this product but also gives negative feedback to the prospective INB users. 52 The password and ID are so long that customers find it difficult to remember them. 53 Online generation of password is not available in this site. Fresh generation of password also takes long time. 54 3% feel that customers feel comfortable in having face-to-face interaction

with the branch functionaries. 55 Fear in the minds of the prospective customers that bank may start charging for this facility in future as they start charging for ATM facility. Suggestions to improve number of INB users 56 23% respondents feel that branch staff members should be provided training on how to use this product. 57 Equal number of respondents feels that the customers should also be trained about INB facility. Live demo on INB should be held regularly at the branches for the customers. CD containing the pictorial presentation on how to operate INB a/c and its various menus should be provided to all the new users along with ID and password. 58 14% respondents feel that internet kiosk for accessing INB should be provided at all the branches for the customers. This should also be connected with the printer for printing the statement of account. Internet kiosk should be provided at every offsite ATMs. 59 14% respondents feel that INB needs proper marketing efforts by the branches. 13% feel that the publicity of INB facility should be done extensively using print and electronic media. 60 Information booklet in vernacular language narrating the features of INB and how to use it should be made readily available to the customers. 61 13% feel that all staff members should be mandatorily be made INB users and they should be forced to use this facility for their transactions. 62 9% respondents suggest that the INB facility to be given to the eligible customers at the time of opening the accounts itself. 63 Internet banking ID and password with view rights should be given to the customers along with the welcome kit with an instruction to destroy it if they dont need this facility. 64 Bank should provide 24X7 customer service to the INB users on toll free number. 65 2% feel that the internet banking users should be incentivised for the

usages by way of concession in remittance charges.

Status of Internet Banking in State Bank of India The State Bank of India has a Saving Bank (ordinary) customer base of 6.22 crore as on March 2008. In the FY 2007-08, approximately 82 lacs saving bank (ordinary) customers were added. Out of these, 36 lacs (approximately 43% of the new customers added) new customers were added in metro and urban branches. During the same period 0.52 lacs new INB users were added by state bank branches which accounts for 1.44% of the total new SB accounts opened in metro and urban areas. With the internet penetration of 5.2% of the total population in India, the percentage of new internet banking users to the total new SB a/cs opened should have been more than 5.2%. At least approximately 1.88 lacs new users should have been added. Chart 1 depicts Circle wise status of number of new SB a/cs opened in the FY 2007-08 and new INB users added.
New INB users added in 2007-08 (Figure in '000)

1200.00

8.00

7.00 1000.00 6.00 800.00 5.00

600.00

4.00

3.00 400.00 2.00 200.00 1.00

0.00
ba d Hy de ra ba d ga l el hi pa l rh Pa tn a ar re ba na i kn o di ga es hw Ea Ba ng al o Be n ed a Bh o he n Ke r um D al a st w i

0.00

ha n

Ah m

ba n

New SB a/c Opened 2007-08

New INB Users added 2007-08

Bh u

or th

Lu c

Chart-1

Table-1: Circle wise Total number of SB a/cs, new SB a/cs added and New INB users Added

(in 000)
Circle Bengal Mumbai Chennai Delhi Lucknow Ahmedabad Hyderabad Bhopal Patna Chandigarh Bhubaneshwar North East Bangalore Kerala New SB a/c Opened 2007-08 518.06 673.77 799.69 774.78 895.84 448.53 969.42 543.35 609.11 527.40 437.09 384.62 415.96 198.60 8196.20 Total No of SB a/c as on March 2007 4586.66 4847.87 4374.49 5649.45 5923.10 2494.42 4406.78 4362.34 5079.89 4213.43 2527.94 2240.45 2070.26 1267.77 54044.84 New INB Users added 2007-08 2.31 7.15 7.55 6.91 3.25 2.20 4.41 4.06 1.74 2.56 1.64 1.11 4.66 2.46 52.00 %age of new INB users to Total new SB a/c opened 0.45% 1.06% 0.94% 0.89% 0.36% 0.49% 0.45% 0.75% 0.29% 0.49% 0.38% 0.29% 1.12% 1.24% 0.63%

Table-1

Status of INB of SBI in Metro and Urban centre covered

Table: New SB a/cs opened and new INB users added in the FY 07-08 in the branches covered in the study
(figure in 000) %age of new INB users to Total new SB a/c opened

Branch Rajendra Nagar BSEB, Patna PBB Patna Shekhpura Rajabazar SPB Patna Patna Circle PBB New Delhi Sushant Lok New Colony Kapashera Faridabad Delhi Circle

No of Total SB a/cs

Total No of INB Users

%age

No of New SB a/cs opened in 2007-08

New INB users in 2007-08

13.48 6.46 2.94 15.46 29.07 5689.00 42.41 6.66 26.84 8.27 26.13 6424.23

1.20 0.06 0.87 0.40 3.40 95.94 13.10 1.65 0.72 0.52 1.74 209.40

8.91% 0.94% 29.40% 2.55% 11.69% 1.69% 30.88% 24.74% 2.67% 6.29% 6.65% 3.26%

0.97 0.57 0.28 3.44 1.87 609.11 1.39 1.99 3.32 2.78 2.78 774.78

0.02 0.00 0.02 0.00 0.07 1.74 0.39 0.06 0.01 0.19 0.03 6.91

1.65% 0.35% 6.81% 0.12% 3.90% 0.29% 27.97% 2.82% 0.24% 6.86% 0.90% 0.89%

PBB and SPB branches are doing better than other branches in terms of making new INB users. Out of new SB a/cs opened PBB, Delhi added approximately 28% new INB users. PBB Patna added approximately 7% new INB users of new SB a/cs opened. The above mentioned branches are of urban and metro areas where internet connectivity is available and the customers are literate. Still the addition of new INB users is dismal.

Feedback from the customers of State Bank of India Demographic profile of the customers: Age Group

Age group of the respondents

45% 41% 40%

Number of respondents

35% 30% 25% 20% 15% 10% 5% 0% 18-29 30-40

Age group

35%

20%

5%

41-60

>60

Age group of respondents in Urban Centre 45% 40% Number of respondents 35% 30% 25% 20% 15% 10% 5% 0% 18-29 30-40 Age group 41-60 >60 4% 14% 43% 39% 40% 35% Number of respondents 30% 25% 20% 15% 10% 5% 0% 18-29 26%

Age Group of respondents in Metro

38% 30%

6%

30-40 Age Group

41-60

>60

Base: 106

20% of the respondents are in the age group of 18-29, 41% are in 30-40 age group, 35% are in 41-60 age group and 5% are above 60 years of age. In metro centre 26% respondents are in the age group of 18-29, 38% in 30-40

age group, 30% in 41-60 age group and 6% above 60 years of age. In Urban centre 14% of the respondents are in 18-29 age group, 43% in the 3040 age group, 39% in 41-60 age group and 4% are above 60 years of age. Preferred banking channel of the respondents

Preferred Banking Channel

16%

1% 38% 45%
Branch ATM Internet Banking Phone Banking

Preferred banking channel in Metro

Preferred Banking Channel in Metro

Preferred Banking channel in Urban

Preferred Banking Channel Urban

17%

0% 38%
Branch ATM Internet Banking Phone Banking

15%

1% 39%
Branch ATM Internet Banking Phone Banking

45%

46%

Base: 106

45% of the respondents consider ATM as their preferred banking channel. Whereas 38% respondents consider branches as their preferred banking channel for the banking transactions. Internet banking channel is less popular among the respondents. Only 16% prefer to transact through internet banking. Phone banking does not have acceptability among the respondents as only 1% of the respondents consider it as preferred banking channel. In metro and urban centres the preference of the respondents is more or less the

same. In metro centre 45% of the respondents prefer to transact through ATM, 38% through branch and 17% through Internet banking. Phone banking has no taker in metro centre. In urban centre 46% of the respondents prefer to transact through ATM, 39% through branch and 15% through Internet banking and negligible 1% through Phone banking. ATM has become very popular among the customers. Few years back, customers were reluctant to use this facility and preferred branch as best place to get their banking requirement met. However, with consistent effort, publicity and proper marketing, ATM has replaced branch as most preferred banking channel. Internet banking too has many features which will provide round the clock banking services to its users. However, the customers need to be educated about this products and extensive publicity needs to be done to make customers aware about this product.

Do you use internet?

Internet Users

10% 18% 25%

90% 82% 75%

No Yes

Metro

Urban

Overall

Base:106

82% of the total respondents are familiar with internet whereas 18% of the respondents have never used internet. In metro 90% of the respondents uses internet. 10% of the respondents have never used internet. In urban centre 75% of the respondents use internet and 25% do not use it.

Age group wise Internet Users

150% 100% 50% 0% Metro % Urban % Total % Metro % Urban % Total %

18-29 100% 88% 95%

30-40 95% 92% 93% Age group

41-60 80% 64% 70%

>60 67% 0% 40%

95% of the respondents in the age group of 18-29 are internet users. 93% of the respondents in the age group of 30-40 and 70% of 41-60 age group use internet. Even 40% of the respondents above 60 years of age use internet. group of the people. However, internet has not penetrated equally among the different age group in metro as well as urban centres. In metro centres 100% in 18-29 age group and 95% in 30-40 age group are internet users. 80% of the respondents in the age group of 41-60 uses internet whereas 67% of the respondents above 60 years of age are internet users. In urban centre, 88% of 18-29 age group, 92% of 30-40 age group and 64% of 41-60 age group are internet users. However, none of the respondents above 60 years of age are internet users. Hence, internet is no more new to the people and it has penetrated cutting across all age

Awareness about the internet banking of SBI

Awareness of SBI INB

Yes, 71% Yes, 65% 80% 70% Yes, 58%

60% No, 42% 50% No, 29% 40% No, 35%

30%

20%

10%

0% Metro Urban Overall

65% of the total respondents are aware about the internet banking of State Bank of India. However, 35% of the respondents are not aware about the existence of this facility. In metro centre, 58% of the respondents are aware of the internet banking of SBI whereas a whopping 42% are not aware about this facility. In urban centre, the awareness about the internet banking of State Bank of India

among the respondents is better than those in metro area. In urban centre, 71% of the respondents are aware about this facility and 29% are not aware about this facility being offered by State Bank of India. It is surprising that the awareness level among the respondents in urban area is better than those in metro area where greater percentage of the people are internet users and are more techno savvy.
Age Group wise Awareness of SBI INB
150% 100% 50% 0% Metro % Urban % Total %

18-29 77% 100% 86%

30-40 42% 75% 60% Age Group

41-60 60% 59% 59%

>60 67% 50% 60%

86% respondents in 18-29 age group are aware of the internet Banking of SBI. Only 60% respondents in other age groups are aware of the internet banking facility of State Bank of India. In metro and urban centre the awareness among the age group about the internet the internet banking of SBI varies particularly in the 18-29 and 30-40 age groups. In metro centre, 77% respondents in 18-29 age group, 42% in 30-40 age group, 60% in 41-60 age group and 67% respondents above 60 years of age are aware of SBI INB. In urban centre, awareness level is better in the age group 18-29 and 30-40 which is 100% and75% respectively. 59% in age group 41-60 and 50% of those above 60 years of age are aware of the SBI INB.

Users among those who are aware of INB of SBI

Users of INB of SBI

83% 77% 70%

Yes No

30% 23% 17%

Metro

Urban

Overall

23% respondents are SBI internet users whereas whopping 77% are not using this facility. In metro centre 30% are SBI INB users and 70% are not using this facility. The position is grimmer in urban centre. In urban centre only 17% respondents are SBI INB users and 83% are non users.

Age Group wise SBI INB users of Total respondents

80% 60% 40% 20% 0% Metro % Urban % Total % 18-29 54% 25% 43% 54% 43% 25% 11% 30-40 11% 29% 21% Age Group 29% 21% 20% 0% 41-60 20% 0% 8% 8% 0% >60 67% 0% 40% 40% 67%

43% respondents in the age group 18-29 are using SBI INB closely followed by 40% respondents above 60 year of age. Only 21% respondents in age group 3040 and a meager 8% in the age group 41-60 are SBI internet banking users. In metro, 67% respondents of above 60 years of age are internet banking users followed by 54% in age group 18-29. The respondents in the age group 30-40 and 41-60 most of whom have access to internet either in offices or in internet cafe are surprisingly depicts grimmer picture. Only 11% respondents in age group 31-40 and 20% in age group 41-60 are INB users. In urban, internet banking users are in the age group 18-29 and 30-40 with 25% and 29% of the respondents in the respective age group. Surprisingly none in the age group 41-60 and >60 is INB users.

Age Group wise SBI INB users among those who are aware of it
150% 100% 50% 0% Metro % Urban % Total % 100% 70% 50% 25% 18-29 70% 25% 50% 39%35% 25% 30-40 25% 39% 35% 33% 0% 14% 0% >60 100% 0% 67% Total 48% 23% 33% 67% 48% 33% 23%

41-60 33% 0% 14% Age Group

Among those who are aware of the INB facility, only 33% respondents use this facility. These are the respondents who are internet users too. This suggests that despite having facility to use SBI INB, they have not availed this facility. These groups should be targeted by the bank. 67% of those who are in the age group >60 and are aware of this facility use INB followed by age group 18-29 whose 50% respondents use this facility. 35% respondents who are in age group 30-40 and are also aware of the INB facility use it and only 14% in age group 41-60 are INB users. In metro centre, 48% of the respondents who are aware of INB facility and are also internet users are INB users too. 100% respondents in age group >60 who are aware of INB facility are INB user too followed by age group 18-29 whose 70% respondents are INB users. 33% respondents in age group 41-60 and 25% in 31-40 are the INB users. The age group 31-40 is young generation and is techno savvy. This group has access to the internet either at officer or at home or cyber caf. However, only 25% of those who use internet and are also aware of the existence of the INB facility in SBI uses this. This suggests the unwillingness of the customers towards using INB as well as the lack of marketing efforts by the branches. In urban centre, only 23% of the respondents who are aware of INB are INB users. 39% of respondents in age group 31-40 and 25% in age group 18-29 are

INB users. None uses INB in other age group.

Have the customers been offered INB facility by the branches

Have customers been offered INB by Branch

97% 87% 92%

Yes No

3%

13% 8%

Metro Urban Overall

Only 8% of the respondents who are not using INB have actually been offered this facility by the branch. 92% has never been offered this facility by the branches. In metro centre, only 3% has been offered this facility. In urban centre, 13% of those who do not have SBI INB have been offered this facility by the branches. This is the clear indication of the lack of marketing effort by the branches. This also suggests that the marketing for creating new users of INB is not in the priority list of the branch. Branches have to understand the fact that by aggressively marketing this facility, they would make the customers move away from the branch. In this way the branches would have fewer customers to handle across the counters and more time for marketing and business development.

Reason for not using Internet Banking of SBI

Reason for not using SBI INB

70%

60%

57%

57%

50%

40%

30%

29% 23%

20%

19%

10%

0% Never considered using it Prefer face-to- face interaction Security Concern Dont Know how to use it Bank do not offer

Base: 83
(Many respondents cited more than one reason for not using INB. However, the percentage has been arrived at using the base figure i.e.83). That is the reason the %age total of the above graph would not be equal to 100%).

57% of respondents who do not use SBI INB think that SBI does not offer this facility. This is because neither they consider it necessary to ask for this facility from the branch, nor branches ever offered them this facility. Equal percent of the respondents expressed their unwillingness to use this facility. They never considered using it. 29% feel face to face interaction and want the transaction to take place across the counters. 23% expressed their inability to operate it. Only 19% expressed security concern like misuse of ID and password, operation of their account by unauthorized person etc as reasons for not using it.

Reason for not using SBI INB in Metro & Urban Br

69%

69%

49%

49% Metro Urban 33%

23% 25%

21% 25%

13%

Never considered using it

Prefer face-to- face interaction

Security Concern

Dont Know how to use it

Bank do not offer

In metro centre 69% of the respondents are not aware that SBI offers internet banking facility to its customers. An equal % have shown unwillingness to use internet banking facility. 25% prefer face to face interaction with the branches. Equal percent do not know how to use this facility. 13% are concerned about the security and thus do not want to use internet banking facility. The awareness level in urban centre is better than that of Metro about the internet banking facility of State bank of India. 49% do not know if SBI offers this facility, nor are they interested in using this facility. 33% prefer face to face interaction with the branch and 21% do not know how to use this facility. In urban centre, the respondents are more concerned with the security of their a/cs in compare to those in metro centre. 23% expressed security concern as reason for not using SBI internet banking facility.

Table: Age group wise reason for not using SBI INB facility Age Group Never Considered Using It Prefer Face to Face Interaction Security Concern Don't Know how to use it Bank don't offer Age Group Never Considered Using It Prefer Face to Face Interaction Security Concern Don't Know how to use it Bank don't offer Age Group Never Considered Using It Prefer Face to Face Interaction Security Concern Don't Know how to use it Bank don't offer Metro 18-29 50% 17% 0% 17% 67% Urban 18-29 33% 0% 33% 33% 83% Overall 18-29 42% 8% 17% 25% 75% 30-40 71% 12% 6% 12% 71% 30-40 47% 24% 18% 6% 47% 30-40 59% 18% 12% 9% 59% 41-60 58% 33% 25% 33% 50% 41-60 45% 45% 23% 27% 55% 41-60 50% 41% 24% 29% 53% >60 0% 0% 0% 100% 0% >60 50% 0% 0% 50% 0% >60 33% 0% 0% 67% 0%

Across the age group the respondents who do not use internet banking are because they are not aware of the availability of this facility. 75% in the age group 18-29 are not aware of this facility. 42% do not feel it necessary to avail this facility. Security concern is not the major factors for not using this facility. Aggressive marketing coupled with training/ live demo of INB to the customers would definitely encourage them to go for this facility. Every branch staff should also be made aware of this facility and they should be actively involved in marketing of this facility.

The features used by the INB users

Table: INB used for financial transaction

1 2. 3

List of Financial Transactions Self a/c fund transfer across India Third Party Transfer Online trading Total No. of respondents

Overall 27% 48% 6% (48)*

Metro 15% 41% 0% (27)

Urban 43% 57% 14% (21)

*(The number of respondents includes those who are using the internet banking facility as well as those who are not using internet banking facility but have expressed their desire to use services provided under SBI INB.) 48% respondents use or willing to use 3 rd party transfer facility and 27% wish to use this facility for self a/c fund transfer. The popularization of this product would definitely help the branches in reducing the rush at the counter for the transfer transactions.
Table: INB used for Information transactions

1 2 3 4 5 6

List of Information Transactions New a/c opening Demand Draft request Standing Instruction New cheque book request View/ print of a/c statement SMS alert for transaction Total No. of respondents

Overall 23% 19% 17% 35% 85% 19% (48)

Metro 19% 19% 22% 44% 85% 30% (27)

Urban 29% 19% 10% 24% 86% 5% (21)

In the information transaction, 85% respondents use this facility for viewing / printing of the statement of account followed by new cheque book issue request which account for 35%. This facility would help the branches in reducing the queue in the branch which is mainly for the passbook printing.
INB used for value added services

1 2 3 4 5 6 7 8

List of value added services Railway ticket booking Utility Bills payment Premium payment of LIC and others SBI Mutual Fund investment Subscription to PPF Visa Payment Tax Deposit Donation Total No. of respondents

Overall 54% 27% 21% 10% 6% 17% 17% 0% (48)

Metro 48% 26% 11% 7% 0% 22% 19% 0% (27)

Urban 62% 29% 33% 14% 14% 10% 14% 0% (21)

54% respondents are using State Bank Internet banking for booking of railway tickets. This value added services would help the bank in increasing its non interest income.

Satisfaction level of the respondents Satisfaction level with the look of the online SBI site

Satisfaction level with the look of the site

80% 71% 70% 66% 61% 60% 50% 50% 40% 40% 30% 30% 22% 20% 13% 10% 11% 14% 19% 14% 10% 6% 3% 0% DS 6% 0% 3% 20% 60% 70%

0% Metro Urban Overall

0%

VS 11% 14% 13%

S 61% 71% 66%

OK 22% 14% 19%

0% 0% VDS 0% 0% 0%

0%

The INB users are satisfied with the look of the Online SBI site. 66% are satisfied with the look of onlinesbi.com. Only 3% are dissatisfied with its look.

Satisfaction level with the speed of the online SBI site

Satisfaction level with the speed of the site

80% 71% 70% 63% 56%

60%

50%

40% 33% 30% 28% 21% 20% 11% 10% 7% 9% 0% VS 11% 7% 9% S 56% 71% 63% OK 33% 21% 28% 0% 0% DS 0% 0% 0% 0% 0% 0% VDS 0% 0% 0%

0% Metro Urban Overall

63% users are satisfied with the speed of onlinesbi.com. None of the users is dissatisfied with the speed of this site. The speed of the site is good maybe because of less number of users. Banks should take measures to maintain the speed of the site when the users of INB increase because of aggressive marketing of this product.

Problems being faced by the branches in increasing the number of INB users in the branches In this study, 141 officials representing all parts of the country were asked to list the problems in increasing the number of internet banking. The problems narrated by them are summarized below. 34% respondents feel that the employees at the branch lack knowledge about internet banking facility of SBI. This is the main hindrance for marketing this product effectively. As the employees are not aware about this facility, they are not able to market this product to the customers. 18% respondents feel that the customers do not have resources like PCs, internet connection to access the internet banking. As a result they show unwillingness towards this product. 14% feel that the customers are not aware of this product. They dont know if SBI offers internet banking facility to its customers. Proper marketing of this product has not been done by the bank/branches. Even branches do not offer this facility to the customers unless customers ask for it. The reason for this maybe the fact that employees themselves lack knowledge of this product and thus they are not in a position to convince the customers for using INB. 14% respondents feel that the customers are IT illiterate and thats the reason branches are unable to push this product to the customers. Many of the customers have not even used computers and thus not willing to use this facility. 13% feel that security concerns in the mind of the prospective users drive them away from availing this facility. They are apprehensive that their ID and password would be wrongly utilized by unscrupulous from their account. 13% feel that customers are unwilling to avail this facility. They prefer the banking transaction across the counters at the branch. These are the customers who may have access to internet and may also be IT literate. Still they prefer to come to the branch for transactions. 9% feel that due to shortage of staff the INB is not getting due attention in the branches. They feel that staff of the branches are over pressed with day-to-day persons and they may lose money

transactions and get no time for marketing of products like internet banking. 6% respondents believe that lack of effort on the part of branch functionaries is the reason for the less number of INB users. They feel that this product has potential to take off. However, the staff members consider it as additional burden on them and thus show little/ no inclination towards making any effort in marketing INB. Technology related problems also are the impediments in marketing this product. 6% respondents feel that delay in getting the account activated and getting the transaction rights dampens the mood of the enthusiastic users and subsequently making the dormant users. 6% feel that due to lack of technical support for solving the problems encountered by the customers are not only in impediment in marketing this product but also gives negative feedback to the prospective INB users. The password and ID are so long that customers find it difficult to remember them. Apart from this additional password in the name of profile password too has to be maintained by the customers. As a result, customers forget ID and or Password (2% respondents cite it as problem in popularizing INB). Customers find this very complicated and not user friendly (3% respondents believe this). Thus they avoid using it. In case if customers forget the password, the option of online generation of password is not available in this site. Fresh generation of password also takes long time. 3% feel that customers feel comfortable in having face-to-face interaction with the branch functionaries. They are mainly pensioners who come to the branch for transactions and feel elated in having direct interaction with staff members of the branch. Fear in the minds of the prospective customers that though presently INB is free, bank may start charging for this facility in future as they start charging for ATM facility. They feel that, initially bank offers the facility free to make the customers used to it and when customers become used to a certain facility, bank start charging by way of annual charges or like. Few respondents also feel that the mindset of the customers particularly in small towns affects marketing effort for this facility. Some customers feel that by

offering such facilities, staff members at the branch do not want them to come to the branch. They feel neglected and unwanted customers. In such situation marketing of such facilities become difficult.

Suggestions to improve number of INB users

Same number of respondents was asked to list the suggestion for improving number of INB users. The suggestions given by them are summarized below. Our comments are mentioned in the italicized sentences. 23% respondents feel that branch staff members should be provided training on how to use this product. They should be trained about the features of INB and its benefits. Equal number of respondents feels that the customers should also be trained about INB facility. 66 Lack of awareness about the INB among the staff members has been the biggest stumbling block in popularizing this product. When interacting with the customers in the branch while collecting feedback, it was observed that some of employees in the branches were happily surprised to know the variety of facilities offered through INB. The employees need to be made aware of the facilities and they should be forced to use almost all the facilities offered through INB at least once. They should know that this facility would help them in driving the crowd to alternate banking channels and they would have quality time for marketing and business development. We can not expect effective marketing of a product unless the marketing personnel are not fully aware and convinced about the effectiveness of products. As a result, we find that the awareness about INB is low among the customers as well. Similarly, live demo on INB should be held regularly at the branches for the customers. On regular interval, officers from the Internet Banking department should also interact with the customers of the branch and should try to ward off all the fears and concerns regarding the use of the INB. Confidence building exercise for the use of INB should be done on regular basis so that the customers would feel at ease with this facility. CD containing the pictorial presentation on how to operate INB a/c and its various menus should be provided to all the new users along with ID and password. Informed and satisfied customers would help bank in getting free publicity for this

product. 14% respondents feel that internet kiosk for accessing INB should be provided at all the branches for the customers. This should also be connected with the printer so that the users can print the statement of account. 3% feel that internet kiosk should be provided at every offsite ATMs so that the users would be able to access SBI INB through these kiosks. 67 This needs to be implemented immediately as it would bring those customers under the fold of INB who are presently not willing to take this facility because they are unable to access this facility because of lack of resources like PCs, internet etc. Keeping in view the low number of users and low awareness about INB, 14% respondents feel that INB needs proper marketing efforts by the branches. 13% feel that the publicity of INB facility should be done extensively using print and electronic media. 68 We have found that 35% of the customers in Metro and urban centres are not aware about the INB facility. Therefore, extensive marketing needs to be done for this product. Banners and posters should be placed at the prominent places in the branch. Information booklet in vernacular language narrating the features of INB and how to use it should be made readily available to the customers. Bulk auto email narrating features of INB and link for onlinesbi.com should be sent to the customers whose email IDs are available with us. Staff members should also be incentivised for issuing maximum number of INB kits to the users and making them active. 13% feel that all staff members should be mandatorily be made INB users and they should be forced to use this facility for their transactions. 69 In the branches, few staff members are the INB users. They do not use this facility as they get all the work done in the branches. It is fact that they dont need INB. However, in order to make them aware of this facility, they should be forced to become active user of INB. Unless they use it they would never be comfortable with this facility and thus they would never be

able to market this product to the customers. 9% respondents suggest that the INB facility to be given to the eligible customers at the time of opening the accounts itself. 70 All the new customers should be provided with the internet banking ID and password with view rights along with the welcome kit. They should also be instructed to destroy the ID and password if they feel that they dont need this facility. Many of the customers who are otherwise not willing to use it may once like to use this out of curiosity and may end up being regular user of INB. Timely support to the customers for their problems makes the customers loyal to the bank. Bank should provide 24X7 customer service to the INB users on toll free number. This would definitely encourage the customers to opt this facility. 3% respondents suggest that live demo on INB should be made to government departments and corporates whose salary accounts are with us. They should be told about the various features of INB. The employees should be encouraged to avail this facility. 2% feel that the internet banking users should be incentivised for the usages. 71 We are currently using the reward programme to popularize the use of debit cards. In the similar manner, the INB users can be rewarded with the reward points for the transaction made through INB. Redemptions of those reward points can be done for gifts, or waiver of exchange/ commision etc. They should also be given concession in remittance charges. 3% feel that easy access to the INB kits would make easier for the branches to market this. Every officer should be provided with the INB kits so that they can issue it to the customers who come to them. The other suggestions which would help in popularizing this products are mentioned below:72 Branches should be given budget for INB also and that budget should be followed up to ensure its achievement. It should also be given same importance as the budget development is being given.

73 Customers should be charged for doing transaction at the branches. This is being done by most of the private banks. 74 EZ trade should be made available to all the Circles. 75 Online generation of the password should be made available to the customers. This facility is available in online banking sites of almost all the banks. 76 Onlinesbi.com should be made in vernacular language. 77 Bank can also provide loan on easy terms for the purchase of PCs and internet. 78 More billers should be added to the onlinesbi. **************