Digitalization

SIP project report

Submitted in partial fulfilment of the requirements for

the PGDM Program

Year 2018-2020

By

Name: Vibhu Vyas

Roll no.: 18PGDM060

Supervisors: 1. Mr. Hari Shankar

2. Prof. Supriya Kalla

International Management Institute, New

Delhi
2019-20
Acknowledgements

I would like to express my heartfelt gratitude to HDFC Bank Limited for giving me the
opportunity to work on Digitalization as a project, especially in as challenging yet enriching
an area as Jamalpur, Haryana. I got to learn a lot of new things and faced many new
experiences for which I shall forever remain thankful to them. I would also like to thank the
organization to assign me such a helpful and learned mentor as Mr. Hari Shankar, Branch
Manager, Jamalpur Branch. Under his supervision, a job that was relatively difficult to
undertake was made easier to tackle for me, while learning as much as I did throughout the
duration of the internship. This study would have been a complete failure if it wasn’t for the
supportive staff of HDFC bank, Jamalpur.
I would like to thank International Management Institute, New Delhi as well, to help me
attain a position in HDFC Bank. In addition to this, I would like to thank my faculty mentor
Prof. Supriya Kalla for guiding me throughout as well as checking on me generally as well
as whenever I got stuck. It was truly a blessing to have worked under the tutelage of such a
remarkable professor.
It is said, “customer is king”. Well, he truly is. If the customers of the bank were to not
answer the queries I put forth, or not take the time to fill the questionnaire, this study would
have been a total waste of time. I would like to show my heartfelt appreciation and gratitude
to all the customers who contributed to make this study into a decent attempt.
Last but not the least, I would like to thank my parents and friends for supporting me
throughout the duration of this project and assisting me to finish this project within the
required duration.
Table of Contents

Digitalization ................................................................................................................................... 1
Acknowledgements .......................................................................................................................... 2
Table of Contents ............................................................................................................................ 3
Introduction ..................................................................................................................................... 5
Current scenario of Indian banking industry ................................................................................. 6
Banking Industry- Brief analysis .................................................................................................... 8
About HDFC Bank Limited .......................................................................................................... 10
SWOT Analysis of HDFC Bank limited ....................................................................................... 12
Internet Banking services of HDFC bank..................................................................................... 14
Objectives of the study .................................................................................................................. 16
Methodology adopted .................................................................................................................... 17
Results of the study ........................................................................................................................ 18
Conclusions .................................................................................................................................... 27
Recommendations ......................................................................................................................... 28
Limitations of the study ................................................................................................................. 29
Bibliography .................................................................................................................................. 30
Appendix- A (Questionnaire) ........................................................................................................ 31
Executive Summary

Banking is the backbone of every economy. The primary functions of banks (lending and
borrowing) are what facilitate easy access of capital to individuals, firms and governments
alike. Banks also facilitate smooth functioning of the securities markets by acting as
intermediaries between investors and issuers of securities. Apart from these functions, banks
also pave way for international trade by holding depository receipts, which allow trading of
equity shares of companies not of Indian origin in Indian stock exchanges.
Yet another important facet of this continuously evolving world is the emergence of digital
platforms and integration of technology with almost all, if not all, modern business processes.
Many processes have transformed completely due to the influx of technological
advancements, like trading of shares, which used to be in paper based format. The integration
of the banking system in India with technology was only a matter of time and as soon as it
began, it became quite clear that these changes were here to stay.
This project report describes the various aspects of the digital applications and platforms that
HDFC bank operates on as well as offers to its customers. In addition to that, this report
intends to understand the bend of the customers of HDFC Bank residing in rural areas,
specifically Jamalpur, Haryana in using the digital banking products offered by the
organization. The purpose of this report is to facilitate increase in awareness, adoption and
satisfaction of the customers of the bank in Jamalpur village.
The entire project had two basic aspects:
 Educate walk-in customers in the branch who do not use the digital offerings offered
by the bank about these offering; the benefits offered by these products, the mode of
operations and how these products would make the operations smoother and more
easily accessible to the customers
 Understand the level of satisfaction of the internet banking services that the customers
who use them experience and also ask for any additional features that these customers
desire that the service should have
The report further presents the results of the feedback study undertaken to understand the
various demographic profiles and their bend towards the digital products which should
provide insights in to the strategies to further increase the penetration of these products in the
market and hence benefitting the business of the bank as well as increase the good will of the
organization in the ease of banking aspect.
Apart from the project, while working at the organization, there were other aspects of
banking that were unraveled which are also a part of this report. These aspects include
 Day to day operations of the bank
 Lead generation and conversion
 Catchment and mining of these leads
 Servicing of calls for various product and service requirements
 Assistance of branch staff for smooth functioning and operations of the bank
 Drives for promoting and pitching newly launched offers by the organization
Introduction

Digital banking is one of the most important offerings given by banks these days. Given the
increased internet penetration throughout the country by the emergence of Internet service
providers like Jio and the conformity that it has caused for other network providers like Airtel
and Vodafone-Idea, digital banking is a means for providing comfort and safety of
transactions to the customers. It is also helpful in streamlining the operations of the bank
while increasing the efficiency of these operations. Therefore, it is of the utmost importance
for banks to keep all their digital offerings up-to-date. In order to do that, feedback from the
customers plays a crucial role for banks to know the stand of the customers related to their
current offerings, in terms of what is it that the customers use in these offerings, what more
would they want, what are their concerns about using these products etc.
HDFC Bank limited has numerous digital banking products that they offer in order to
facilitate easy transactions and banking operations for their customers. A few of them are:

 PayZapp, the mobile wallet application by HDFC Bank

 SmartHub, a digital payment solution for businesses
 Internet banking
 Mobile banking
 Point of Service (PoS) terminals, offered to businesses for credit/debit card
transactions
As highlighted earlier, the level of satisfaction of the customers, which in turn translates to
success of the aforementioned products and therefore increased profits for a commercial bank
like HDFC Bank plays a vital role for the bank. This is why this project was assigned by the
organization to interns.
The main objective of the project, therefore, was to gauge the feedback of customers about
the internet banking services of HDFC bank in Jamalpur, Haryana. In addition to this, another
important objective of the project was to increase the awareness of these products amongst
the customers who were not using these digital offerings of HDFC bank. Other tasks like
going on calls
In order to accomplish this main objective, the methodology used was two-fold, which will
be described in detail later on in the report. The two levels of the project were

 Understand the product offering, demographic of customers visiting the branch, how
is it suitable for the customers to use the product and educate customers who were
averse using the products.
 Gauge the feedback of existing customers to
o Understand the level of satisfaction of customers about the internet banking
services provided by HDFC bank
o Draw insights as to how the services can be offered based on various variables
Current scenario of Indian banking industry

Structure of Indian Banking Industry

The banking industry, overseen by the Reserve Bank of India can be classified into two parts,
Banks and Financial Institutions. The financial institutions can be All India financial
institutions, state level financial institutions or Other institutions. Banks can be classified as
Scheduled Commercial Banks (SCBs) or Cooperative Credit Institutions. The scheduled
commercial banks include the following categories, along with the number of institutions
operating under each as of Financial year 2017:

 Public sector banks (27)

 Private sector banks (21)
 Foreign banks (49)
 Regional Rural Banks (RRB) (56)
 Urban cooperative banks (1,562)
 Rural cooperative banks (94,384)
Drivers of the industry
The increased focus on financial inclusion in India is one of the primary factors that has
contributed substantially to the growth of the banking industry. The Pradhan Mantri Jan Dhan
Yojna, which emphasised on the importance of the reach of financial services like bank
accounts, credit, remittances etc. to every segment of the society is an apt example for
depicting this. (Pradhan Mantri Jan Dhan Yojana | Prime Minister of India, n.d.)
The banking sector has shown robust asset growth in the financial year 2018, growing to
$1.56 trillion from $1.52 trillion in 2017. This is a growth of 2.63%. This is one of the factors
that have contributed to the growth of the banking industry. In addition to this, there are
various other factors.
The lending and deposits, which happen to be the primary operations of banks have grown at
staggering rates from the Financial year 2007 to 2018. The lending has grown at a
compounded annual growth rate of 10.94%, while the deposits have increased at a
compounded annual growth rate of 11.66%, and this does not stop here. With an increasing
demand for housing finance and personal finance, these rates are predicted to grow even
further in the future. (IBEF, 2019)
The ATM (Automated Teller Machine) network of the Indian Banking industry is also
spreading at an increased pace. As of September 2018, the total number of ATMs in India
was 2,05,886, which is expected to grow to 407,000 by 2021.
68.84% of the Indian population resided in rural areas, as per the census of 2011 (Wikipedia,
2011). Therefore, it was important for the banking industry to venture into a region which
was potentially the biggest market for them and was largely unexplored. As of December
2018, 56 regional banks are operational in India. In order to accommodate these banks, the
policies are also being altered. Reserve Bank of India allowed regional banks with net worth
of at least $15.28 million to launch internet banking services in order to improve the customer
serviceability of these banks. Government of India also launched “India Post Payment Bank”,
branches for which have been opened in 650 districts to improve financial inclusion in the
country.
Deposits and credit statistics
The credit off-take in India has grown tremendously, contributing to the growth of the sector.
The compounded annual growth rate for credit off-take is 10.99% from the financial year
2007 to financial year 2018. As of the third quarter of the financial year 2019, the total credit
extended increased to Rs 93,751.17 billion (US$ 1,299.39 billion). Similarly, as mentioned
earlier, under the Pradhan Mantri Jan Dhan Yojna, the deposits have increased to Rs 926.78
billion (US$ 12.85 billion). In addition to this, the financial inclusion looks to be bearing
fruit, with 336.6 million accounts being opened in India.
Asset base statistics
During the financial years 2013 to 2018, the asset base of the banking sector grew at a
compounded annual growth rate of 7.01%, reaching a total of US $2.36 trillion. This statistic
is inclusive of all banks, including private sector, public sector and foreign banks. The assets
of public sector banks account for 66.03% of the total banking assets, while foreign banks
held assets worth Rs. 8.65 trillion (US$134.12billion). Private sector assets expanded at a
compounded annual growth rate of 12.68% during the period under consideration.
Banking Industry- Brief analysis

In order to analyse the banking industry, the tried and tested method of using Porter’s Five
Forces analysis would be able to give solid results. The five forces that would be analysed are

 Threat of potential entrants

 Threat of substitutes
 Rivalry among existing competition
 Bargaining power of suppliers
 Bargaining power of buyers
Threat of potential entrants
There are obvious barriers to entry in the banking industry, like regulations that require
conformity, the monetary policy of the nation, high capital requirement and requirement of
skills to create profitable investment portfolios. However, an important barrier that is not
generally considered and is of an intangible, behavioural nature, is trust. The recent
occurrences as in the case of IL&FS and Punjab National Bank are strong demotivators for
potential entrants into the banking industry.
The consolidation of the banking industry further contributes to the trust factor that is
required by customers to put in their money, they are more likely to go to an established
brand and not to a newly formed bank. Therefore, it can be concluded that threat of potential
entrants in the banking industry is low. (Google Sites, n.d.)
Threat of substitutes
In terms of deposits and withdrawals, banking industry does not face a strong threat of
substitutes. However, the banking industry has progressed to offerings more than just
deposits and withdrawals. The product portfolio of banks now includes mutual fund
investments, insurance, fixed income securities, products promoting ease of doing business,
digital offerings, financing activities for assets etc. This has exposed banks to the risk of
substitutes, not from banks but from non-financial institutions as well.
Companies in electronics, automobiles and jewellery offer financing options to their
customers at interest rates lower than what banks offer. Apart from that, specialised
organizations in the insurance industry, payment methods industry etc. are also looming
dangers to the banking industry in this domain.
Rivalry among existing competition
The rivalry among the existing competition is extremely high in the banking industry. Due to
the presence of financial organizations for an extended period of time, the demand for such
services rarely goes unserved. Therefore, for an organization to capture a larger market share,
it is vital that the offering of their bank should be attractive and lucrative to customers, who
are likely to being served by another competitor in the industry. This has caused the banks to
cut on several aspects in business, which has led to a decline in their return on assets.
Bargaining power of suppliers
The only supply that banks need is in terms of capital. This capital can be attained from four
types of suppliers
1. Customers- in the form of deposits
2. Mortgages and loans- in the form of interest payments
3. Mortgage backed securities- returns from the securities markets
4. Loans from other financial institutions
Since, all these suppliers are external, the bargaining power of suppliers fluctuates between
medium and high.
Bargaining power of buyers
An important factor to consider while analysing the bargaining power of buyers is the
switching costs. In the banking industry, switching costs for the customers is extremely high.
For example, if a customer wants to get their loan shifted from one bank to another, the costs
in terms of both financial and temporal nature are very high. This subdued the bargaining
power of the buyers for a long time.
However, with the emergence of digital platforms, technological advancements and banks
focussing more on the ability of the customer to perform banking operations with ease, the
bargaining power of buyers has increased considerably. An important example is the smart
account opening application launched for the employees of HDFC bank, which allows the
customer to get an account opened without having to go through the hassle of filling up long
forms and waiting in queues.
About HDFC Bank Limited

HDFC Bank Limited is an Indian Banking and Financial services organization. It was
incorporated in 1994. The headquarters of the organization are located in Mumbai,
Maharashtra. The employee base as reported on 31 st March 2018 is 88,253 permanent
employees. The organization also has international presence in countries like Hong Kong,
Bahrain and Dubai. It is the largest private sector lender by assets in India and is the largest
bank as of February 2016 in terms of market capitalization. The brand of the organization has
a lot of prestige associated to it. To certify it, it was ranked at the 69 th position in the 2016
BrandZ Top 100 Most Valuable Global Brands (Wikipedia, 2019).
HDFC bank has an intricately widespread network of operations throughout the country. As
of October 9th 2018, 4,805 branches and 12,260 ATMs were reported to be spread across
2657 cities. In addition to this, in the financial year 2017, 4.30 lacs Points of Service (PoS)
terminals were installed and 235.7 lacs debit cards and 85.4 lacs credit cards were issued. The
organization offers banking services and financial services products including retail banking,
wholesale banking, auto loans, treasury, two-wheeler loans, consumer durable loans, personal
loans, loans against properties, credit cards and lifestyle loans. In addition to these products
and services, it also offers digital products like SmartBuy, PayZapp and SmartHub.
Financials
The total revenue of the organization in the year 2019 was ₹ 116,597.92 Crores, which
showed an increase of 22.14% from ₹ 95,461.66 Crores in 2018. The net profit of the
organization also showed an increase almost equal to that of the revenue, with the net profit
for the year 2019 at Rs. 21,078.14 Crores from Rs. 17,486.73 Crores in the year 2018. The
total assets of the organization were valued at ₹1,018,170 crore in 2018.
Shareholding
The shareholding of the organization is held in the following fashion; the promoters (HDFC
group) hold 21.57% of the total shares. 32.4% of the total shares are held by financial
institutional investors (FIIs), 18.78% are held by American Depository Shares and Global
Depository Receipts, since HDFC Bank limited is also listed on the New York Stock
Exchange. Rest of the shareholding is held by individual investors, body corporates,
insurance companies, mutual funds, financial institutions, and non-residential Indians.
Profitability Ratios
The EBITDA (Earnings before Interest, Taxes, Depreciation/Amortization) margin of the
company as of 2018-19 is approximately 92%, which is a testament to the operating
efficiency of the organization. This is also an important metric to evaluate the organization,
given that this ratio is not affected by the taxation rates, funding decisions or the depreciation
policies of the company.
The PAT (Profit after Taxes) margin of the organization is approximately 22%, which is also
a considerably high number. This means that the company is able to manage its costs in a
way that they retained 22% of the sales as their profits after taxes were paid.
Leverage Ratios
The company uses high debt in their capital structure. The total debts of the company (both
secured and unsecured) in the year 2018 were Rs. 911875.61 Crores, while the equity and
reserves contributed Rs. 106295.00 Crores of the total capital of the organization. Hence, the
debt equity ratio is extremely high at 8.578. However, as it is widely accepted, debt equity
ratio is not the best way to evaluate banks financial performance, other ratios must be studied
in order to understand the true performance of HDFC bank. Also, the debt equity ratio of the
company lies comfortably in the range of debt equity ratio set by its peers.
The interest coverage ratio of the company is 2.296, which means the company can very
comfortably cover the interest expenses with the amount of profit made by it during the
financial year 2018-19.
Return Ratios
The return on invested capital of the organization for the financial year 2018 was
approximately 4%. The return on equity however is extremely impressive, since the profit
after tax is about 33.69 times the equity capital of the organization (The Economic Times,
2019). This does not come as a surprise, given the low equity contribution in the capital
structure of the company.
Liquidity Ratios
In the banking industry, the concept of inventory is not really applicable. Therefore, the
current ratio and the quick ratio for the organization are the same. The current ratio of the
bank for the year 2018-19 is 17.877. However, it is difficult to draw any inferences from this
ratio, given the concept of working capital in banking is not applicable in its entirety.
Other metrics for financial performance
It is a convention to use the interest income of a bank to measure its financial performance.
The interest income of HDFC bank limited in the financial year 2017-18 was Rs. 80,241.35
crore. If it is compared to the interest income the company had in 2008-09, which was
16,584.01 crore, the company has witnessed a compounded annual growth rate (CAGR) of
17.07%, which is extremely impressive and makes HDFC bank a lucrative investment
opportunity.
SWOT Analysis of HDFC Bank limited

Strengths
 The organization has a very intricately defined network, with 4805 branches and
12206 ATMs, which gives acts as a strength when it comes to reaching the customer
bases across geographies.
 There are many awards that the bank has earned over the course of its existence. It
was deemed “Best Bank” by Dun and Bradstreet and Financial Express. In addition to
these, it also won the Euromoney award for excellence. This improves the customers
perception of the brand and therefore translates into profitability.
 Strong financials of the company, that have only improved as time progressed, has
made HDFC bank a lucrative investment opportunity for investors in India. In
addition to this, foreign institutional investments have also helped the organization
make a strong asset base as well as win investors trust.
 The attrition rate in HDFC bank is low, which indicates higher satisfaction levels of
employees in the organization. (Bhasin, n.d.)
Weaknesses
 The lack of presence of the organization in rural areas is one major weakness of the
bank. This is being corrected with an increased number of branches being opened in
rural areas.
 Despite of the corrective actions, HDFC bank would not be able to enjoy first mover’s
advantage in rural areas, due to widespread presence of competitors like ICICI bank.
 HDFC bank lacks a sense of aggression when it comes to marketing of their products.
This is a double whammy, given this reduces the reach of their products to the
customers and gives an advantage to its competitors like ICICI bank who have
aggressive marketing strategies.
Opportunities
 The asset quality of HDFC bank is much better when it is compared to government
banks. This is a factor that could be a positive influence in order to capture more
market share.
 The organization has good prospects of business in foreign countries. Since it already
has presence in countries like Dubai, steps in the right direction could bolster the
financial strength as well as profits for the organization.
 Capitalising on the new trends like digital banking is an opportunity that the bank
could take into consideration. This would contribute to increase in market share and
profits for the organization.
 HDFC bank has great prospects in terms of strategic alliances and acquisitions, given
its strong financial position.
Threats
 There has been a recent increase in the Non-Performing Asset (NPA) levels across the
banking industry. This is a major threat to HDFC, which calls for better management
of capital when it comes to lent capital.
 There is a major increase in the number of “new age” banks and non-banking
financial institutions (NBFCs). They can act as fierce competition to HDFC bank.
 There is strong competition in the banking industry from existing competition like
ICICI bank and Yes bank. This competition is present in all the product categories
that HDFC bank has to offer.
 The Indian market is open for investment from foreign banks up to 74%, according to
Reserve Bank of India’s norms.
Internet Banking services of HDFC bank

Internet banking is one of the more dominant and prevalent forms of banking that are used by
customers these days, given the increased penetration of internet among various geographies
as well as increased awareness among customers due to various media channels, internet
itself and promotions used by the banking industry. HDFC bank also offers internet banking
services to all its customers.
Savings account customers and current account customers have to go through different
procedures in order to activate their internet banking services. However, customers solely
having a credit card with the bank and are not account holders also have internet banking
services offered to them.
Savings account holders
The services are offered as part of the introductory account kit that the savings account
customers are given at the time of opening of the account. In addition to this internet banking
can be activated through the following means.
1. Using the debit card details along with their registered mobile number. A verification
is conducted by the website through a one-time pin (OTP), which is sent to the
registered mobile number.
2. Using registered email ID and registered mobile number. In this case the one-time
password is sent on both the media and they need to be entered in order to activate the
services.
3. Through the ATM machines, using debit card.
4. Through physical form, which is required to be duly filled by the customer and sent to
the head office to generate IPIN for the activation of internet banking.
Current account holders
For current account holders, internet banking services can only be activated through physical
format, i.e. through a form, which is required to be filled by the customer. Documentation for
different types of firms required for internet banking services is enlisted below.
1. Private limited firm: PAN card, MCA site certificate, List of Board of Directors and
Board Resolution.
2. Partnership firm- PAN card, Partnership Deed.
3. Sole Proprietorship- Same process as for a savings bank account holder.
Credit card holders
For credit card holders, internet banking can be activated using credit card details coupled
with the registered mobile number. The authentication is done through an OTP which is sent
to the registered mobile number.
Services offered through internet banking
There are four primary operations on HDFC bank’s internet banking services; transact,
enquire, bill pay and request. These operations can be performed on various tabs, namely,
Accounts, Funds transfer, Cards, Demat, Mutual Funds, Insurance, Loans, Offers and Others.
In total, there are more than 200 transactions that can be processed using internet banking.
The time of processing of the transaction ranges between real time to seven days.
Accounts tab
Fixed deposits, recurring deposits, foreign currency non resident accounts can be opened
through internet banking. In addition to this, the details for the aforementioned accounts can
also be viewed and retrieved through the internet banking services. The customers can also
register requests for their CIBIL score, extended KYC for mutual funds, cheque stop
payments, changing account details like Aadhar card number, PAN, email statements etc.
Funds transfer tab
This tab allows customers to transfer funds through National Electronic Funds Transfer
(NEFT), Real Time Gross Settlement (RTGS) and Immediate Payment Service (IMPS). The
transfers are done through IFSC or MMID. Customers can also use this tab for bill payments
of other banks’ credit cards as well. This tab also allows customers to add beneficiaries for
transferring funds, modify third party transfer limit and register digital certificates for funds
transfer over Rs. 10 Lakhs. Bill payments, adding and viewing billers etc. are also operations
that can be performed under this tab.
Cards tab
This tab is for managing debit cards as well as credit cards. Customers can request for both
credit and debit cards. The request is dependent on the eligibility of the customer in case of
credit cards. Credit card payments are also done through this tab. In addition to these
functions, a loan can also be applied for through the credit card, which can be repaid in EMIs.
This operation is called Smart EMI. Credit card statements, Insta loans and personal loans
can also be accessed through this tab.
Debit cards can be upgraded through this tab. In addition, all the debit cards linked to the
bank account can be checked through this tab. The customer can enable/disable international
usage, modify limits for international as well as domestic transactions and hotlist (stop
services) of debit cards as well.
Demat tab
This tab allows users to trade shares on the two stock exchanges (NSE and BSE). This tab
also provides information pertinent to the shares held by the user along with a NIFTY and
SENSEX stock ticker. The statements for the demat account can also be accessed using this
tab.
Mutual funds tab
This tab allows users to view and invest in the various mutual funds available in the securities
market. This also shows the mutual funds units held, their net asset value etc. The investment
can be done as a lumpsum or through a systematic investment plan (SIP). This tab, therefore,
also allows customers to start and stop systematic investment plans.
Objectives of the study

The main objective of the study was to understand the feedback that existing users of internet
banking had about the service offered by HDFC bank. This objective was broken down into
the following sub-objectives.
1. To measure the satisfaction of customers from various occupations on HDFC Bank’s
internet banking services, particularly in Jamalpur, Haryana
2. To determine the perception of customers from various occupations about the ease of
use of HDFC bank’s internet banking services
3. To determine the perception of customers from various occupations about the safety
of HDFC bank’s internet banking services
4. To understand the leading reasons for which internet banking is preferred by
customers
5. To understand the primary purpose of usage of Internet banking by customers
6. To determine if the purpose of usage of internet banking depend on the occupation of
the customer
7. To determine if the satisfaction level of customers depend on their age
8. To determine if the reason for preference of internet banking depend on the age of the
customer
9. To get the average frequency of usage of internet banking services
10. To determine the reasons of usage of internet banking for various income groups
Methodology adopted

The study was undertaken in two phases. The first phase of the study was to understand the primary
purposes for which internet banking was used by customers in the country. This was done as part of a
deductive approach, which could be slowly narrowed down to the unit of analysis that will be shortly
described. The first phase of the study was done using exploratory research techniques, like reviewing
of online literature, informal conversation with customers and interacting to the officials working at
the bank in order to gather more information about the operations of the bank, the products offered by
the bank, the functioning of these products and the demographics of the customers that visited the
branch on a daily basis.
The second phase of the study was to design and build a questionnaire that would capture the
feedback of the customers about the internet banking services offered by the bank. This questionnaire
was designed based on the insights generated as part of the exploratory research. The variables for
analysis will be shortly laid out. The feedback was collected by asking the questions in the
questionnaire to walk in customers. Post data collection, the analysis of the data was conducted in
order to find workable insights to promote the usage of internet banking among users in this region.

Unit of analysis
The unit of analysis for the study would be the customers of HDFC Bank’s Jamalpur branch
who use the Internet banking services offered by the organization.
Variables for analysis
 Demographic variables (Age, income group, occupation)
 Degree of satisfaction in using digital platforms for banking operations instead of
visiting the actual branch
 Customer’s perception of safety offered by digital platforms
 Customer’s perception of ease of use of the applications
 Purpose for which applications are used by customers (transactions, checking
statements, opening FDs/RDs etc.)
 Frequency of transactions using internet banking
 Reasons for which digital products are preferred by customers
Results of the study

As part of the project, 70-80 customers were approached, out of which 60 customers agreed
to respond to the questionnaire. These respondents were from various age groups, income
groups and occupations.
Sample description
 Age

46.7% of the respondents belonged to the 29-39 years age group, which was the largest part
of the sample. They were followed by the 40-50 years age group which comprised of 28.3%
of the pie. The remaining 25% of the sample was comprised of the age groups 18-28 years,
51-61 years and more than 61 years of age.
 Income group

Most of the respondents earned more than Rs. 300000 per annum. 36.7% of the sample
earned in between Rs. 300000 and Rs. 500000 per annum, while 35% of the population
earned more than Rs. 500000 per annum. 15% of the respondents earned in between Rs.
100000 and Rs. 300000, while the remaining 13.3% earned less than Rs. 100000 every year.

 Occupation

53.3% of the respondents were salaried from different domains. In order to generalise the
results, they are clubbed under the “Salaried” umbrella. Similarly, 28.3% of the respondents
were self-employed, and the businesses they owned were in diverse industries. However,
most of these business owners catered to the rural/local population through the
products/services offered by their business.
The self-employed professionals, housewives and retired individuals comprised of a pretty
small part of the sample. For simplifying the analysis, these three heads were combined to
form an umbrella head called “Others”.

Results
1. To measure the satisfaction of customers from various occupations on HDFC Bank’s
internet banking services, particularly in Jamalpur, Haryana
In order to determine the occupation wise satisfaction level of the respondents, the average
satisfaction score of the three groups; i.e. Salaried, Self-employed and Others was considered.
Amongst the three, salaried employees exhibited the highest satisfaction levels, with their
average satisfaction score being 4.5625 out of 5. They were followed by self-employed
individuals, who rated the satisfaction level at 4.411764706 out of 5. The minimum
satisfaction out of the three groups was exhibited by the “Others” group, which consisted of
Self-employed professionals, housewives and retired individuals.
Insight: However, the last group comprises of a very small part of the sample, one insight
would be to emphasise more on the satisfaction levels of this group of customers.
2. To determine the perception of customers from various occupations about the ease of
use of HDFC bank’s internet banking services
The second sub-objective required to measure the perception of the ease of use of HDFC
bank’s internet banking services. Here, similar to the satisfaction metric, salaried individuals
found the internet banking services easiest to use. They rated the ease of use of the services at
4.125 out of 5. The self-employed and others groups perceived the ease of use of the internet
banking services to be the same, at 4 out of 5.
Insight: The overall ease of use metric is lesser in value as compared to the satisfaction
metric. It would be beneficial for the organization to make this metric a plus point for them in
the future.
3. To determine the perception of customers from various occupations about the safety
of HDFC bank’s internet banking services

Banking is a very sensitive industry, which is very obvious due to the involvement of money
and financials in the operations. Safety is a very important concern for customer when they
select a bank to hold their money. This goes back to trust as a driver and bargaining leverage
for the customer. Therefore, the perception of the customers about the safety of the internet
banking services was an important metric to measure.
Here, going by the trend, the salaried individuals perceived the internet banking services to be
the safest. They rated the safety perception at 4.5625 out of 5. They were followed by self-
employed individual, who rated the safety perception at 4.470588235 out of 5. The minimum
rating of the safety perception was given by the others group, who rated it at less than 4 out of
5.
Insight: Safety is an important concern for customers and it would be of the utmost
importance for HDFC bank to focus on all customer groups equally when it comes to this
metric.
4. To understand the leading reasons for which internet banking is preferred by
customers
The leading reason for the use of internet banking came out to be the non-requirement for the
customers to visit the bank branches to perform banking activities. This is an obvious
advantage of using internet banking services. Banking operations used to be filled with hassle
when even for transferring money from one account to another, the turnaround time (TAT)
was extremely high and it required additional efforts on the part of the bank to perform these
operations. With the emergence of internet banking, many operations like transferring funds,
fixed and recurring deposits, demat transactions etc. can be performed without disturbing the
daily activities by the customers themselves.
This reason was followed by the ability of the customer to perform the transactions at any
time of the day. This is also an important metric, given the operational hours of the bank are
limited and the requirement for transactions could arise at any time of the day.
The reason that was given by the lowest number of respondents was the availability of the
descriptions of operations on the internet banking portal.
5. To understand the primary purpose of usage of Internet banking by customers

The major purpose of usage of internet banking by respondents in Jamalpur was for checking
their account balance and transaction history. This was followed online fund transfers and
“All over banking needs”.

Insight: The users in Jamalpur only use internet banking for minimal purposes. The
awareness about all available services needs to be spread among customers for them to be
able to utilize them.
 6. To determine if the purpose of usage of internet banking depend on the occupation of
the customer

In order to find a relationship between the purpose of use of internet banking and the
occupation of the respondent, regression analysis was used. The purpose of use of internet
banking was used as the dependent variable and the occupation of the respondent was used as
the independent variable.
The following were the null and alternate hypotheses for this sub objective.
Null hypothesis: Occupation does not influence the purpose for which internet banking is
used by customers
Alternate hypothesis: Occupation influences the purpose for which internet banking is used
by customers
The following were the conclusions that came out of the regression analysis.
 The adjusted R square value, which is 0.017633435, demotes that only a 1.76%
dependence between the two variables.
 The significance F value, which is 0.156675371, is greater than 0.05, which means null
hypothesis does not need to be rejected.

Insight: The purpose of usage of internet banking does not depend on the occupation of the
respondent.
7. To determine if the satisfaction level of customers depend on their age
In order to determine a relationship between the age of the customers and their satisfaction
level, chi square analysis was used.
The following were the null and alternate hypotheses for this sub objective.
Null hypothesis: The satisfaction level of customers is independent of age
Alternate hypothesis: The satisfaction level of customers is dependent on age
Insight: Since the chi square value for both the cases is lesser than 0.05, it can be concluded
that the satisfaction level of the respondents and their age are related to each other.
8. To determine if the reason for preference of internet banking depend on the age of the
respondent

Similar to the seventh sub-objective, regression analysis was used to determine a relationship
between the reason of preference for internet banking of the respondents and their age. The
reason of preference for internet banking of the respondents was used as a dependent variable
and their age was used as the independent variable.
The following were the null and alternate hypotheses for this sub objective.
Null hypothesis: The reason of preference for internet banking of the respondents is
independent of age
Alternate hypothesis: The reason of preference for internet banking of the respondents is
dependent on age
The following were the conclusions that came out of the regression analysis.

 The Adjusted R square value is 0.019699392, which denotes that there is a 1.97%
relationship between the age of the respondents and their reason of preference for
internet banking.
 The significance F value, which is 0.144715455, is greater than 0.05, which means
there is no need to reject the null hypothesis.
Insight: The reason of preference for internet banking of the respondent does not depend on
the age
9. To get the average frequency of usage of internet banking services

A major part of the sample used the internet banking services once a week or once a month,
with a total of 68.4% of the total sample using in these two brackets.
Only 20% of the customers who responded to the questionnaire used the internet banking
services more than once a month.
Insight: This denotes that the services could be exploited more by the customers, which
would not only improve the customer’s experience of banking but also contribute to the
operational excellence of the bank.
10. To determine the reasons of usage of internet banking for various income groups
In order to determine the primary reasons of usage of internet banking for the various income
groups, cross tabulation was used.
Income Reason 1 Reason 2 Reason 3 Reason 4 Reason 5 Total
Group
/Reason
Group 1 0 5 1 1 1 8
Group 2 0 2 12 5 2 21
Group 3 1 2 5 0 1 9
Group 4 1 4 8 5 4 22
Total 2 13 26 11 8 60

Key to the table is as follows:

Income groups:
Group 1: Less than Rs. 100000 per annum.
Group 2: Rs. 100001 to Rs. 300000
Group 3: Rs. 3000001 to Rs. 500000
Group 4: More than Rs. 500001
Reasons:
Reason 1: I can read about the process of operations and then do them.
Reason 2: I can use it at any time of the day.
Reason 3: I don't have to visit the bank to perform banking activities.
Reason 4: It helps me save time by helping with instantaneous transactions.
Reason 5: It is easy to use.
Conclusions

The following conclusions can be drawn from the results of the feedback study.
1. It is important for HDFC bank limited to focus on the satisfaction level,
perception of safety and perception of ease of use of all customer groups. A
generalised approach might not be the most fruitful for this cause.
2. The leading reason for the usage of internet banking among the respondents in
Jamalpur is their ability to perform banking operations without having to visit the
branch physically.
3. The respondents from Jamalpur majorly use internet banking services for
viewing/checking their account balance and transaction history.
4. The occupation of the customers does not influence the purpose of usage of
internet banking.
5. The age of the customers and their satisfaction levels are related.
6. The reason of preference for internet banking of the respondent does not depend
on the age
7. Majority of the customers use the internet banking services between once a week
and once a month.
Recommendations

Based on the findings of the study as well as the experience gathered during the two-month
stint at the bank, the following are the recommendations to implement the insights of the
feedback study.
1. Feedback should be a continuous process. Personal bankers could be assigned a
task where if a customer asks queries about internet banking, it should be made a
point to know their experience of using the services.
2. Periodic questionnaires should be floated in the branches to record this feedback.
This would streamline the process of collection of feedback and implementation
of the responses collected.
3. Awareness of the products needs to be increased among customer bases,
especially in the rural regions. This is important because even though a lot of
services are being provided through internet banking, it is not being utilised to its
fullest potential.
4. The literature available about the digital platforms is comprehensive. However, it
could be daunting for a customer to go through every word in order to be ready to
use a service. The customers should be intimated about the services through a
more personal channel, like through personal bankers or through text messages.
5. Though the study is limited to internet banking, but the other important platforms
like PayZapp and mobile banking also have less penetration in Jamalpur. These
products should also be promoted and their benefits should be explained
thoroughly to the customers.
Limitations of the study

This study presents an in depth look into the feedback of the customers received during the
duration of two months that were spent as an intern at HDFC bank. However, this study has a
few limitations as well.
1. There was a language barrier when it came to interacting with the customers due
to a stronger dialect of language used in this region. Also, a few customers had
limited proficiency when it came to the English language. This limitation was
faced during the exploratory research as well as the data collection phases.
2. Since banking is a very sensitive industry, customers were not very comfortable
talking about their banking needs, habits and requirements with an intern whom
they met for the first time in a setting where they were being asked questions
about the same.
3. This study cannot be extrapolated to the general population, due to a large cultural
gap that exists between the urban and rural areas.
4. The sampling technique used for this study was convenience sampling, since all
the customers who came to the branch were approached in order to increase the
number of respondents, out of which, few refused to participate in the study. This
does not assure the sample chosen would be a representative sample of the
population.
Bibliography

Bhasin, H. (n.d.). SWOT analysis of HDFC. Retrieved from Marketing91:

https://www.marketing91.com/swot-analysis-hdfc/
Google Sites. (n.d.). Porter's 5 Forces and the Banking Industry- The Banking Industry And
The Internet. Retrieved from Google Sites:
https://sites.google.com/site/bankingindustryandtheinternet/home/5-forces
IBEF. (2019, March). Indian Banking Industry Analysis. Retrieved from IBEF:
https://www.ibef.org/industry/banking-presentation
Pradhan Mantri Jan Dhan Yojana | Prime Minister of India. (n.d.). Retrieved from PMIndia:
https://www.pmindia.gov.in/en/major_initiatives/pradhan-mantri-jan-dhan-yojana/
The Economic Times. (2019). Retrieved from The Economic Times:
https://economictimes.indiatimes.com/hdfc-bank-ltd/balancesheet/companyid-
9195.cms
Wikipedia. (2011). 2011 Census of India- Wikipedia. Retrieved from Wikipedia:
https://en.wikipedia.org/wiki/2011_Census_of_India
Wikipedia. (2019, April 24). HDFC Bank- Wikipedia. Retrieved from Wikipedia:
https://en.wikipedia.org/wiki/HDFC_Bank
Appendix- A (Questionnaire)

Measuring Customer Satisfaction of HDFC bank's Internet Banking Services

This questionnaire is part of a study that entails acquiring customers feedback on the
various digital products offered by HDFC bank.

1. Name
_______________________________

2. Customer ID
_______________________________

3. Contact number
_______________________________

4. Age
 18-28 years
 29-39 years
 40-50 years
 51-61 years
 More than 61 years

5. Annual Income
 Less than Rs. 100000
 Rs. 100001 to Rs. 300000
 Rs. 300001 to Rs. 500000
 More than Rs. 500001

6. Occupation
 Self employed
 Salaried
 Self-employed professional
 Others _______________________________
7. What is the main reason for you using Internet Banking?
 It is easy to use
 I can use it at any time of the day
 I can read about the process of operations and then do them
 I don't have to visit the bank to perform banking activities
 It helps me save time by helping with instantaneous transactions

8. How frequently do you transact with Internet Banking?

 More than once a week
 Once a week
 Once a month
 Once every six months
 Once a year or less

9. What is your primary purpose of using Internet Banking?

 Balance and transaction history search
 Online fund transfer
 Lock/activate debit cards/ATM
 Stop payment
 Shopping
 Railway ticket booking
 All over banking needs

10. How satisfied are you with HDFC bank's Internet Banking services?
Highly unsatisfied 1 2 3 4 5 Highly Satisfied

11. How easy are HDFC bank's Internet Banking services to use?
Very difficult 1 2 3 4 5 Very Easy

12. How safe do you think HDFC bank's Internet Banking services are?
Very unsafe 1 2 3 4 5 Very safe

13. Are there any additional features that should be present in HDFC bank's Internet
Banking services? If yes, please mention them.
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