Customer ’ s Adoption for Technology-Enabled Delivery Channels in Selected Public Sector Banks

Purpose–The purpose of this paper is to investigate customer’s adoption for technology-enabled delivery channels such as Automated Teller Machines (ATMs), Internet banking, Tele-banking, mobile banking and branch lobby kiosks of selected Public Sector Banks (PSBs). In addition, the study consists of the customer’s willingness for adopting banks delivery channels and customer demographics influence on delivery channels in specific for Mumbai city (India). Design/methodology/approach–For this study, structured questionnaire was administered to collect the primary data and random sampling method was adopted. The paper also presents a multi-year research effort on e-banking in delivery channels and suggests strategies to enhance the channelization of banking products and services through usage of delivery channels. Findings–The findings reveal that the customer’s willingness for adoption of various technology-enabled delivery channels is lower than the banks’ acceptable level. The usage of technology-enabled delivery channels such as Automated Teller Machines (ATMs) and Internet banking is high in Mumbai. The results also show that the usage of mobile banking and branch lobby kiosks is very low. Most of respondents are using Internet banking for the purpose of fund transfer and account information. ATMs service is highly used among 36-45 years of age groups. Promoting awareness about benefit of technology-enabled delivery channels is of utmost important to increase usage of technology-enabled delivery channels. Practical implications/limitations–The paper presents the opportunity for bank marketers to adapt to market orientated approach. They can consider customers usage pattern to increase the effectiveness of delivery channels. The results suggest that banks strategic and tactical activities require improvement in order to become more customer-focused and market-oriented. Furthermore, the scope of the study was selected PSBs’ customers residing in Mumbai city (India). Originality/value–Previous studies that sought adoption of innovative delivery channels lack concern to user’s inclination to technology-enabled delivery channels. This paper makes a valuable contribution in the field of marketing strategy of banks, and evaluate to what extent consumers are ready to accept and use the products or the services introduced.


Introduction
The bank markets have faced a rapidly changing environment and become increasingly competitive following liberalization and deregulation.As a result, information technology has become one of the most powerful strategic tools for banks to ensure profitability and to develop their market position.Technology advancement and digitization influence social networking by providing the gateway to innovate & experiment for networking; it has evolved into one-to-one sales and marketing platform for banks.Bank Services because of its nature and characteristics face challenge to evaluate service quality and customer convenience.
Customer satisfaction is the key for any business as it leads to profitability and ultimately it is for customers' retention.Today, banks are connecting the customers through enhanced services with quality as major parameter.Such revolutionized change and dynamic market environment raises the question about the customers' satisfaction or dissatisfaction and also the related elements of retail banking becoming reason for customers' enrolment and activation, banks are now integrating the opening of an online account along with the basic account opening process so that a new customer receives their online banking credentials along with the welcome kit.After the customer has enrolled, there is a need to create an ecosystem that drives the channel usage for enrolled customers.
The significance of the study is to cover business, application, information and technology, usage of technology-enabled delivery channels with customer's perception / readiness to have a better understanding of the problem domain.This study will help the Public Sector Banks to understand the importance of enhancing the effective usage of technology-enabled delivery channels for marketing their products and services as well as gaining customer satisfaction.

Literature Review
Customer service is a key element in customer retention.Most of the banks whether public sectors, private sectors or foreign banks are using eBanking as a key strategy to sell their products and services at the same time due to stiff competition and increasing demand banks are now revolutionizing their strategy to cope with competition and balancing it with service quality.
Private sector banks came up with anytime anywhere banking where customers can download banks mobile application to freely access account information, performing transaction and even transferring fund.Some of the largest public sector banks are focusing on eBanking to flourish their retail business by way of introducing the sale of retails products through online medium of their own website, mobile App and so on.Parasuraman et al. (1985) suggested that the quality of services delivered to the customer is the key strategy for any business institution.The customer satisfaction and attitudinal loyalty are determined by the quality of service offered by the institution.
Banking services has re-designed with the use of Information Technology and processes.In future, banking will offer more services that are sophisticated to the customers with the continuous product and process innovations.This will induce the paradigm shift from the seller's market to buyer's market in the industry.Influencing the bankers approaches to customers by modify the banking service and delivery mechanism from "traditional banking to eBanking" i.e. shifting from "mass banking to class banking".The move has also increased the degree of accessibility of a common person to bank for his variety of needs and requirements.Ram and Sheth (1989) presented a theoretical framework for consumer resistance to innovations.They suggested two core resistance constructs-functional and psychological.They categorized functional into three constructs namely usage barrier, value barrier, and risk barrier, and two constructs namely tradition barrier and image barrier for the psychological barriers.This framework had been applied in some of the earlier studies regarding banking technologies (Fain & Roberts, 1997;Laukkanen et al., 2007Laukkanen et al., , 2008Laukkanen et al., , 2009;;Cruz et al., 2009).Zineldin, M.
(2000) studied the use of technology in relationship marketing by considering relationship marketing, based on technological advances as a new paradigm and found that without effective use of technology, relationship marketing would not be an effective strategy.Lang and Colgate (2003) investigated the impact of IT in a relationship-marketing context to understand how customers use a combination of IT channels to interact with their financial service provider and how this interaction affects the relationship quality between the customer and the financial service provider.Davis (1989) developed and validated new scales for two specific variables, perceived usefulness and perceived ease of use, which are hypothesized to be fundamental determinants of user acceptance.He found that perceived usefulness had a significant correlation with usage behavior than ease of use.They conducted regression analyses and suggested that the perceived ease of use might actually be a causal antecedent to perceived usefulness, as opposed to a parallel, direct determinant of system usage.Joseph (1996) explored the use of Internet by companies to improve the marketing of their commercial businesses.Author focused on the practical aspect of the mapping and customizing of firm's resources to the needs of their customers and suggested that tools of the Internet can be used to add value to their products.Grönroos (2000) studied the dimensions of the service quality and identified them as functional and technical quality of the service.Author related these dimensions of the service quality as how the service performance and what of the customer's service experience.This conceptualization is also known as the Nordic model of perceived service quality as shown in (Figure 2).The Nordic Model states that the customers' perception about the way the service delivered holds more importance than any other aspect.However, it is relatively difficult to define the technical quality or result of some services through the Nordic Model Kang and James (2004).In defining service quality, Grönross (1982) also took into account the company image.Author related the customers' awareness of their previous experiences with the company and their overall perceptions of its service; electronic fund transfer, utility bill payments, tax payments, and balance enquiry iBanking was more suitable as a channel of delivery.For those having experience of mBanking had shown a clear inclination toward mBanking for value-added services like movie ticket booking.The factors identified from the perceptional analysis of iBanking indicated that people like to use iBanking mainly for reducing the lead-time of operation and transaction intensive services.They suggested that iBanking and mBanking could be regarded as services complementary to each other.Cheng et al. (2014) identified and analyzed the relationship between user resistance and different factors from innovation and user's characteristics.They found that the social influence and perceived complexity had positive effect on perceived risk, and trust had negative effect on perceived risk, perceived security and perceived protection of private information was having no effect on perceived risk.Perceived risk had positive effect on user resistance.

Research Methodology
The study was based on the primary data collected through the structured questionnaire to have a thorough understanding about customer's usage pattern for technology-enabled delivery channels of selected Public Sector Banks (PSBs) in Mumbai.
The random sampling method was adopted for selection of sample.Fifteen Public Sector Banks (PSBs) were randomly selected such as State Bank of India (SBI), Union Bank of India (UBI), Canara Bank (CB), Bank of Baroda (BOB) and so on.A total number of 435 responses were received against 450 questionnaire sent to the selected PSBs' customers.The total number of questionnaire found suitable for data analysis was 376.

Setting of Hypothesis
We set the following hypotheses separately for each technology-enabled delivery channels.To analyze the customer's usage pattern of technology-enabled delivery channels based on age groups and annual income.
H 0 : There is no significant difference in the usage pattern of the technology-enabled delivery channels with respect to age groups and annual income.
H 1 : There is a significant difference in the usage pattern of the technology-enabled delivery channels with respect to age groups and annual income.

Statistical Tool for Analysis
Analysis of variance (ANOVA) was constructed for determining whether three or more sample means were drawn from population with equal means or unequal means.The F-test value indicates that there is a significant difference in the mean performance of responses given for concerned samples.The significance level (0.05) is taken into consideration for comparing the calculated value with the tabulated values.

Reliability and Validity of Data
To check the reliability of the questionnaire items, reliability analysis was conducted for the scales and the applicable questionnaire.The Cronbach's alpha is 0.803 and the Bartlett's test of sphericity was found significant as value was 0.000 (p < 0.001).The questionnaire is reliable.

Frequency Distribution and Cross-Tab Analysis for Respondents
Cross-tab analysis and frequency distribution has been performed for basic demographics such as age groups, qualification, current profession & annual income and innovative delivery channels usage.The outcome of the analysis is as under: The F-value (0.469) for Tele-banking usage and F-value (0.278) for branch lobby kiosks are lesser than the F critical value (2.37), hence the mean difference in the usage pattern for Tele-banking and branch lobby kiosks among various age groups is not significant and the H 0 is accepted.
(  The F-value (1.062) for ATM usage, F-value (0.830) for Tele-banking usage, F-value (1.015) for mobile banking usage and F-value (0.809) for branch lobby kiosks are lesser than the F critical value (2.37).Hence, the mean difference in the usage pattern for ATMs, Tele-banking, mobile banking and branch lobby kiosks amongst various age groups is not significant and the H 0 is accepted.

Results and Discussions
The overall financial eco-system significantly points towards the rapid penetration of technology in the banking services, which augur well for the future technological advancements / disruptions lying in store.There exists an opportunity for the banks to adopt such innovation and render superior services to their esteemed customers.The impact of these digital innovations on banks goes beyond their technology, security and infrastructure capabilities: it is opening up new business models and propositions.Redefining the customer experience, and enabling new potential from employees and business networks.Followings are the findings of our study: It has been researched that the PSBs are having good technology and innovative delivery channels infrastructure as well as interfaces with the internal and external applications.The analysis reveals that customers are having good perception about technology-enabled innovative delivery channels.The results indicate that in Mumbai city, younger age groups are forming the major users of technology-enabled delivery channels.
Furthermore, 71% of the respondents are using delivery channels for fund transfer and account information.The results also show that an ATM service is used more as compare to internet banking and mobile banking among age groups 36-45 and annual income above five lakhs to ten lakhs.This indicates there is huge scope of exploring the usage of delivery channels for other purposes such as buying household stuffs, online shopping and so on.
The statistical analysis shows that the usage pattern for technology-enabled delivery channels varies on age groups and annual income of customers.It indicates that usage pattern of Internet banking is dependent of age groups and annual income of respondents.While, Tele-banking and branch lobby kiosks are independent of age groups and annual income.It indicates that customers of age groups 26-35 and annual income of two lakhs to five lakhs find Internet banking more convenient for electronic fund transfer and bill payments.Hence, banks can come up with tie-ups with supplementary & complementary services to enhance the usage of delivery channels through these channels to optimize the cost of banking operations.
Disruptive digital financial services are powerful, pervasive and have multiple indirect impacts on banking and financial system.They reduce barriers to entry, blur category boundaries, and open doors for a new generation of entrepreneurs and smart thinkers.At the same time, incumbent market leaders face substantial pressures, which they need to manage if they are to thrive, let alone survive.
The Banks have their technology-enabled products and services at par with global Banks, but the usage are not at par.Specific banks may study their customer's usage pattern, awareness level and service quality, to enhance the marketing of their products and services through innovative delivery channels.PSBs may educate their employees to use more and more innovative delivery channels.This will not only cut the usage cost, but also train the employees for innovative delivery channels and in turn, they will educate the customers for the same.

Implications of Research
The e-banking study mentioned earlier underpins that for a customer, experience is all about what transpires at the customer satisfaction.Consequently, banks must not only provide high quality experience on every channel, but in this age of multi-channel banking / eBanking, also ensure an integrated and seamless service that enables customers to switch effortlessly between various delivery channels.Although many banks have launched customer engagement programs, very few have been able to show tangible results.Re-launching a brand or revamping a channel or branch network is ineffective without a well-designed and perfectly executed plan for enhancing customer experience.
Public Sector Banks can use this significant analysis for studying the effectiveness of their delivery channels.In this competitive era, return on investment may not be the prime objective of adopting innovative delivery channels for delivery of banking products and services.The modification and improvements in the innovative delivery channels for marketing banking products and services can be helpful for banks in retaining and acquiring the customers.As technology adoption and customization based on market and customer demand is must have strategy for corporate to lead sustainability.

Limitation of Research
The scope of the study was selected PSBs' customers residing in Mumbai city (India).Hence the findings of this study could be closely associated with PSBs only.The findings of this study may be mapped to the service quality model for delivery of financial products and services in technological environment.
µ (< 2 lakhs) = µ (2 lakhs to 5 lakhs) = µ (> 5 lakhs to 10 lakhs) = µ (> 10 lakhs) H 1 : µ (< 2 lakhs) ≠ µ (2 lakhs to 5 lakhs) ≠ µ (> 5 lakhs to 10 lakhs) ≠ µ (> 10 lakhs) Analysis of variance testing in Table1reveals that the F value (3.426) for ATMs usage, F value (14.319) for Internet banking and F value (2.719) for mobile banking usage are more than the F critical value (2.37).It represents that the mean value for the same population or at least one is significantly different.The variability between sample mean is larger than the variability within each sample.This shows that usage pattern of ATMs, Internet banking Mobile Banking among different age groups are significantly different.Thus, H 0 is rejected.

Table 2
Analysis of variance testing in Table2reveals that the F value (3.941) for Internet banking usage is more than the F critical value (2.37).It represents that the mean value for the same population or at least one is significantly different.The variability between sample mean is larger than the variability within each sample.This shows that usage pattern of Internet banking among different age groups is significantly different.Thus, H 0 is rejected.