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Digital Banking in Northern India: The Risks on Customer Satisfaction

Author

Listed:
  • Baljinder Kaur

    (Chitkara Business School, Chitkara University, Rajpura 140401, India)

  • Sood Kiran

    (Chitkara Business School, Chitkara University, Rajpura 140401, India)

  • Simon Grima

    (Department of Insurance, Faculty of Economics Management and Accountancy, University of Malta, MSD 2080 Msida, Malta)

  • Ramona Rupeika-Apoga

    (Faculty of Business, Management and Economics, University of Latvia, LV-1586 Riga, Latvia)

Abstract

The widespread use of digital technologies and the current pandemic (COVID) have fueled the need and call for digital transformation in the banking sector. Although this has various benefits, it is a disruption to the norm to which a bank customer has to become accustomed. This variance means that customers would have to make some changes to their routine. This can constitute risks in terms of maintaining customer satisfaction at previous levels. These risks are associated with customer retention because a service or product needs to be aligned with customer expectations to avoid them switching to other service providers. Moreover, it can also have an effect on reputation. Offering digital account opening or remote deposits may not satisfy customers; competitive advantage depends on many aspects such as providing a hassle-free, personalized and cyber-secure experience, economic aspects and the needs of the society at large. Therefore, there is a need to understand the intensity of the risk factors that influence customer satisfaction for digitalized banking services and products. To do this, we carried out a structured survey, framed on the five dimensions of the SERVQUAL model, which was sent out to Northern Indian banking customers, to which we received 222 valid responses. We subjected the data received to Structural Equation Modelling using the SmartPLS version 3 application software. Results reveal that digital banking customers in Northern India are genuinely satisfied with the quality of services provided by digital banking. Moreover, ‘reliability’ has the strongest risk factor impact on customer satisfaction, followed by ‘tangibility’ and ‘responsiveness’.

Suggested Citation

  • Baljinder Kaur & Sood Kiran & Simon Grima & Ramona Rupeika-Apoga, 2021. "Digital Banking in Northern India: The Risks on Customer Satisfaction," Risks, MDPI, vol. 9(11), pages 1-18, November.
    • Handle: RePEc:gam:jrisks:v:9:y:2021:i:11:p:209-:d:680747
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    References listed on IDEAS

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    Cited by:

    1. Mukul Bhatnagar & Ercan Özen & Sanjay Taneja & Simon Grima & Ramona Rupeika-Apoga, 2022. "The Dynamic Connectedness between Risk and Return in the Fintech Market of India: Evidence Using the GARCH-M Approach," Risks, MDPI, vol. 10(11), pages 1-16, November.
    2. Ruchika Jain & Satinder Kumar & Kiran Sood & Simon Grima & Ramona Rupeika-Apoga, 2023. "A Systematic Literature Review of the Risk Landscape in Fintech," Risks, MDPI, vol. 11(2), pages 1-15, February.
    3. Luiz Antonio Bueno & Tiago F. A. C. Sigahi & Rosley Anholon, 2023. "Digital Banks in Brazil: Struggling to Reach the Breakeven Point or a New Evolution Wave?," FinTech, MDPI, vol. 2(3), pages 1-14, June.
    4. Joanna Stawska & Ramona Rupeika-Apoga & Maciej Malaczewski & Iwona Dorota Czechowska & Fatima Sol Murta, 2022. "Financialization: curse or salvation? The case of Latvia, a small and post-transition economy," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(3), pages 173-197, March.
    5. Freddy Marilahimbilu Mgiba & Thozama Mxotwa, 2024. "Communicating Banking Cyber-security Measures, Customer Ethical Concerns, Experience, and Loyalty Intentions: A Developing Economy’s Perspective," International Review of Management and Marketing, Econjournals, vol. 14(3), pages 123-135, May.
    6. Md. Abdul Bashir & Md. Alaul Haque & Aidin Salamzadeh & Md. Mizanur Rahman, 2023. "Customers’ Satisfaction of E-Banking in Bangladesh: Do Service Quality and Customers’ Experiences Matter?," FinTech, MDPI, vol. 2(3), pages 1-11, September.
    7. Syed Aamir Aijaz & Grima Simon & Sood Kiran, 2024. "Assessing the Role of the Fintech Era on the Banking Stability of an Emerging Economy: Interaction Analysis of the Indian Banking Industry," Folia Oeconomica Stetinensia, Sciendo, vol. 24(1), pages 182-202.
    8. Ramona Rupeika-Apoga & Kristine Petrovska, 2022. "Barriers to Sustainable Digital Transformation in Micro-, Small-, and Medium-Sized Enterprises," Sustainability, MDPI, vol. 14(20), pages 1-19, October.
    9. Swaraj S. Bharti & Kanika Prasad & Shwati Sudha & Vineeta Kumari, 2023. "Customer acceptability towards AI-enabled digital banking: a PLS-SEM approach," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(4), pages 779-793, December.
    10. Khan, Md. Rahat & Pervin, Most. Tahura & Arif, Md. Zahir Uddin & Hossain, S.M. Khaled, 2024. "The impact of technology service quality on Bangladeshi banking consumers' satisfaction during the pandemic situation: Green development and innovation perspective in banking service," Innovation and Green Development, Elsevier, vol. 3(2).

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