The Impact of E-Banking on Customer Satisfaction in Private Commercial Banks, Sri Lanka

Abstract

Most of the modern banking institutes practice electronic banking practices for their operations instead of traditional banking practices. Considering the information gathered from professionals, it is observed that Sri Lankan e banking services are not in a satisfactory level. Researchers proved that there are some different thinking patterns of Sri Lankans regarding e-banking. The purpose of the study aimed at studying the reasons why some customers use e banking systems whereas others do not. Accordingly, the purpose of this study is to investigate the impact of e-banking on customer satisfaction in private commercial banks in Galle district of Sri Lanka. Based on the review of extensive literature pertaining to e-banking, first researcher identified seven e banking dimensions commonly used in Sri Lankan context and six service quality dimensions which measure customer satisfaction. Hypotheses are developed based on the constructed conceptual framework which derived from e-banking and customer satisfaction literature. Data has been collected over purposive sampling method and snowball method, structured questionnaires to 150 respondents who practice e-banking in Galle district. Measurement model is modified after deleting eleven items out of 41 items from the original model and showed acceptable reliability, convergent validity, and discriminant validity. All structural model path coefficients are positive and statistically insignificant except telephone banking and mobile banking relationships which are negative and statistically significant. Results suggest that ATM banking, internet banking, online banking, credit cards and debit cards have positive direct impact on customer satisfaction and negative impact through telephone banking and mobile banking as well. This research has provided an academic insight into a new research model with latest e-banking practices and organizational performances. Such findings support policy makers and bank managers to make awareness of general public and enhance 9th International Conference on Management and Economics – ISBN 978-955-1507-72-5 353 trust regarding e-banking practices. This study can be taken as a road map for future researches and who have undertaken in settings such as e-practices, banks etc.