PROJECT REPORT ON

COMPARISON OF HDFC BANK SERVICES OVER NATIONALISED

BANKS WITH RESPECT TO DIGITALIZATION

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE

DEGREE OF MASTERS IN BUSINESS ADMINISTRATION

Submitted by

BILAL AHMAD BHAT

MBA- GENERAL 2014-16

Under the guidance of

Mr. SHAAD HABEEB

JULY 2015

DEPARTMENT OF MANAGEMENT

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Jamia Hamdard University, New Delhi – 62

DECLARATION

I hereby declare that the Project report entitled “COMPARISON OF HDFC BANK

SERVICES OVER NATIONATIOLIZED BANKS WITH RESPECT TO

DIGITILIZATION” is my original work and has not been published or submitted for

anydegree, diploma or other similar titles elsewhere. This has been undertaken for thepurpose

of partial fulfillment of Master of business administration at Jamia Hamdard (Hamdard

University), New Delhi .

Dated: 28.07.15

BILAL AHMAD BHAT

2

ACKNOWLEDGMENT

It is really a matter of pleasure for me to get an opportunity to thank all the people who

directly or indirectly helped me to complete my project report , “Comparison of HDFC

Bank Services over Nationalized Bank Services with respect to Digitalization”.First of all I

am extremely thankful to my University ,Jamia Hamdard for providing me with this

opportunity and for all its cooperationand contribution. I also express my gratitude to my

project mentor and guide Mr. Shaad Habeeb. I am highly thankful to our respected project

guidefor giving me the encouragement and freedom to conduct my project.I am also grateful

to all my faculty members for their valuable guidance andsuggestions for my entire study.I

would also like to thank the HDFC team for extending their valuable time andcooperation.

Last,but not the least I thank my project supervisor Mr.Asif Iqbal, Branch Head,Bijbehara

branch of HDFC bank for his kind guidance and co-operation. My sincere thanks goes to

Mrs.Nighat who also guided me during my internship.

3

EXECUTIVE SUMMARY

This project report attempts to bring under one cover the entire hard work and dedication put

in by me in the completion of the project work on “Comparison of HDFC Bank Services

Over Nationalized Banks with respect to Digitalization”.

Today’s finicky banking customers will settle for nothing less. The customer has come to

realize somewhat belatedly that he is the king. The customer’s choice of one entity over

another as his principal bank is determined by considerations of service quality rather than

any other factor. He wants competitive loan rates but at the same time also wants his loan or

credit card application processed in double quick time. He insists that he be promptly

informed of changes in deposit rates and service charges and he bristles with „customary

rage‟ if his bank is slow to redress any grievance he may have. He cherishes the convenience

of impersonal net banking but during his occasional visits to the branch he also wants the

comfort of personalized human interactions and facilities that make his banking experience

pleasurable. In short he wants financial house that will more than just clear his cheque and

updates his passbook: he wants a bank that cares and provides great services. So does HDFC

bank meet these heightened expectations? What are the customers‟ perceptions of service

quality of the banks? Which dimension of service quality of HDFC bank is performingwell?

To find out answers to these questions I undertook a survey of HDFC and SBI branches of

banks at Bijbehara, Anantnag. A lot of surveys have been done in the past to understand the

aspect of customer satisfaction and to find out the customer friendly banks. My research is

conducted to find out “Comparison of HDFC Bank Services over Nationalized Bank Services

with respect to Digitalization”.

4

TABLE OF CONTEN TS

ACKNOWLEGEDMENT............................................................................................................3

EXECUTIVE SUMMARY...........................................................................................................4

CERTIFICATE..............................................................................................................................5

CHAPTER 1 – INTRODUCTION.........................................................................................7

COMPANY PROFILE...........................................................................................................8BUSINESS FOCUS......................................................................................................................8SERVICE QUALITY IN BANKS.................................................................................................14DIMENSIONS OF SERVICE QUALITY........................................................................................17

CHAPTER 2 - REVIEW OF LITERATURE.....................................................................20

DIGITALIZATION..............................................................................................................20CONSEQUENCES OF DIGITALIZATION IN FUTURE.................................................24DIGITALIZATION IN HDFC BANK.................................................................................25

CHAPTER 3 – RESEARCH METHODOLOGY...............................................................29

OBJECTIVE OF THE STUDY.....................................................................................................29METHOD OF DATA COLLECTION............................................................................................30

CHAPTER 4 - DATA ANALYSIS AND INTERPRETATION........................................34

CHAPTER 5 – CONCLUSION AND LIMITATIONS......................................................53

FINDINGS OF THE REPORT............................................................................................53CONCLUSION.........................................................................................................................54LIMITATIONS.........................................................................................................................55

CHAPTER 6 – bibliography....................................................................................................56

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INTRODUCTION

6

Chapter 1

INTRODUCTION

Service with a smile:

Today’s finicky banking customers will settle for nothing less. The customer has come to

realize somewhat belatedly that he is the king. The customer’s choice of one entity over

another as his principal bank is determined by considerations of service quality rather than

any other factor. He wants competitive loan rates but at the same time also wants his loan or

credit card application processed in double quick time. He insists that he be promptly

informed of changes in depositrates and service charges and he bristles with „customary

rage‟ if his bank is slow to redress any grievance he may have. He cherishes the convenience

of impersonal net banking but during hisoccasional visits to the branch he also wants the

comfort of personalized human interactions and facilities that make his banking experience

pleasurable. In short he wants financial house thatwill more than just clear his cheque and

updates his passbook: he wants a bank that cares andprovides great services.So does HDFC

bank meet these heightened expectations? What are the customers‟ perceptions of service

quality of the banks? Which dimension of service quality of HDFC bank is performingwell?

To find out answers to these questions I undertook a survey of HDFC and SBI branches of

banks at Bijbehara, Anantnag.A lot of surveys have been done in the past to understand the

aspect of customer satisfaction andto find out the customer friendly banks. My research is

conducted to find out “Comparison ofHDFC Bank Services over Nationalized Bank Services

with respect to Digitalization”.

7

COMPANY PROFILE

HDFC Bank

The Housing Development Finance Corporation Limited (HDFC) was amongst the first

toreceive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in

theprivate sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994.

Thebank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its

registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled

Commercial Banking January 1995.HDFC Bank comprises of a dynamic and enthusiastic

team determined to accomplish the vision of becoming a World-class Indian bank. HDFC

bank’s business philosophy is based on our four core values - Customer Focus, Operational

Excellence, Product Leadership and People. They believe that the ultimate identity and

success of their bank will reside in the exceptional quality of people and their extraordinary

efforts. They are committed to hiring, developing, motivating and retaining the best people in

the industry.

Business focus

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build

soundcustomer franchises across distinct businesses so as to be the preferred provider of

bankingservices for target retail and wholesale customer segments, and to achieve healthy

growth inprofitability, consistent with the bank's risk appetite. The bank is committed to

maintain the highest level of ethical standards, professional integrity, corporate governance

and regulatory compliance. HDFC Bank's business philosophy is based on four core values –

Operational Excellence, Customer Focus, Product Leadership and People.

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Mission statement of HDFC bank

World Class Indian Bank.

Benchmarking against international standards

To build sound customer franchises across distinct businesses

Best practices in terms of product offerings, technology, service levels, risk

managementand audit & compliance

Vision statement of HDFC bank

The HDFC Bank is committed to maintain the highest level of ethical standards, professional

integrity and regulatory compliance. HDFC Bank’s business philosophy is based on four

corevalues such as:

1. Operational excellence.

2. Customer Focus.

3. Product leadership.

4. People

The objective of the HDFC Bank is to provide its target market customers a full range of

financial products and banking services, giving the customer a one-step window for all

his/her requirements. The HDFC Bank plus and the investment advisory services programs

have been designed keeping in mind needs of customers who seeks distinct financial

solutions, information and advice on various investment avenues.

Business strategy

Increasing market share in India’s expanding banking.

Delivering high quality customer service.

Maintaining current high standards for asset quality through disciplined credit risk

management.

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Develop innovative products and services that attract targeted customers and address

inefficiencies in the Indian financial sector.

Distribution network

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of

over 4014 branches spread over 2464 cities across India. All branches are linked on an online

real- time basis. Customers in over 120 locations are also serviced through Telephone

Banking. The Bank's expansion plans take into account the need to have a presence in all

major industrial and commercial centers where its corporate customers are located as well as

the need to build astrong retail customer base for both deposits and loan products. Being a

clearing/settlement bank to various leading stock exchanges, the Bank has branches in the

centers where the NSE/BSE has a strong and active member base.The Bank also has a

network of about over 11760 networked ATMs across these cities. Moreover, HDFC Bank's

ATM network can be accessed by all domestic and international Visa/MasterCard,Visa

Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

Promoter

HDFC is India's premier housing finance company and enjoys an impeccable track record

inIndia as well as in international markets. Since its inception in 1977, the Corporation has

maintained a consistent and healthy growth in its operations to remain a market leader

inmortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC

hasdeveloped significant expertise in retail mortgage loans to different market segments and

alsohas a large corporate client base for its housing related credit facilities. With its

experience in thefinancial markets, a strong market reputation, large shareholder base and

unique consumerfranchise, HDFC was ideally positioned to promote a bank in the Indian

environment.

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Management

Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July

2010 subject to the approval of the Reserve Bank of India and the shareholders. Mr. Vasudev

has been a Director of the Bank since October 2006. A retired IAS officer, Mr. Vasudev has

had an illustrious career in the civil services and has held several key positions in India and

overseas, including Finance Secretary, Government of India, Executive Director, World Bank

and Government nominee on the Boards of many companies in the financial sector.The

Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and

before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.The

Bank's Board of Directors is composed of eminent individuals with a wealth of experience in

public policy, administration, industry and commercial banking. Senior executives

representing HDFC are also on the Board.Senior banking professionals with substantial

experience in India and abroad head variousbusinesses and functions and report to the

Managing Director. Given the professional expertise of the management team and the overall

focus on recruiting and retaining the best talent in the industry, the bank believes that its

people are a significant competitive strength.

Technology

HDFC Bank operates in a highly automated environment in terms of information technology

and communication systems. All the bank's branches have online connectivity, which enables

the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also

provided to retail customers through the branch network and Automated Teller Machines

(ATMs).The Bank has made substantial efforts and investments in acquiring the best

technology available internationally, to build the infrastructure for a world class bank. The

Bank's business is supported by scalable and robust systems which ensure that our clients

always get the finestservices we offer. The Bank has prioritized its engagement in technology

and the internet as one of its key goalsand has already made significant progress in web-

enabling its core businesses. In each of itsbusinesses, the Bank has succeeded in leveraging

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its market position, expertise and technology tocreate a competitive advantage and build

market share.

Quality policy

SECURITY: The bank provides long term financial security to their policy. The bank does

this by offering life insurance and pension products.

TRUST: The bank appreciates the trust placed by their policy holders in the bank. Hence, it

will aim to manage their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of our customers, the bank offers arrange of

innovative products to meet these needs.

INTEGRITY

CUSTOMER CENTRIC

PEOPLE CARE “ONE FOR ALL AND ALL FOR ONE”

TEAM WORK

JOY AND SIMPLICITY

Business

HDFC Bank offers a wide range of commercial and transactional banking services and

treasuryproducts to wholesale and retail customers. The bank has three key business

segments:

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in theIndian

corporate to small & mid-sized corporate and agri-based businesses. For these customers, the

Bank provides a wide range of commercial and transactional banking services, including

working capital finance, trade services, transactional services, cash management, etc. The

bank is also a leading provider of structured solutions, which combine cash management

services with vendor and distributor finance for facilitating superior supply chain

12

management for its corporate customers. Based on its superiorproduct delivery / service

levels and strong customer orientation, the Bank has made significant inroads into the

banking consortia of a number of leading Indian corporate including multinationals,

companies from the domestic business houses and prime public sector companies. It is

recognized as a leading provider of cash management and transactional banking solutions to

corporate customers, mutual funds, stock exchange members and banks.

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range

offinancial products and banking services, giving the customer a one-stop window for

allhis/her banking requirements. The products are backed by world-class service and

deliveredto customers through the growing branch network, as well as through alternative

delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking.The HDFC

Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the

Investment Advisory Services programs have been designed keeping in mind needs of

customers who seek distinct financial solutions, information and advice on various

investment avenues. The Bank also has a wide array of retail loan products including Auto

Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. Its

also a leading provider of Depository Participant (DP) services for retail customers, providing

customers the facility to hold their investments in electronic form.HDFC Bank was the first

bank in India to launch an International Debit Card in association with VISA (VISA

Electron) and issues the Master Card Maestro debit card as well. The Bank launched its credit

card business in late 2001. By March 2010, the bank had a total card base (debit and credit

cards) of over 14 million. The Bank is also one of the leading players in the“merchant

acquiring” business with over 90,000 Point-of-sale (POS) terminals for debit /credit cards

acceptance at merchant establishments. The Bank is well positioned as a leader in various net

based B2C opportunities including a wide range of internet banking services for Fixed

Deposits, Loans, Bill Payments, etc.

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Service quality in banks

In the days of intense competition, the banks are no different from any other consumer

marketing company. It has become essential for the service firms in general and banks in

particular to identify what the customer's requirements are and how those customer

requirements can be met effectively. In the days where product and price differences are

blurred, superior service by the service provider is the only differentiator left before the banks

to attract, retain and partner with the customers. Superior service quality enables a firm to

differentiate itself from its competition,gain a sustainable competitive advantage, and

enhance efficiency .The benefits of service qualityinclude increased customer satisfaction,

improved customer retention, positive word of mouth,reduced staff turnover, decreased

operating costs, enlarged market share, increased profitability,and improved financial

performance. The construct of service quality has therefore been asubject of great interest to

service marketing researchers.Service quality has been defined by various experts in various

ways as: 'Service Quality is thedifference between customers' expectations for service

performance prior to the serviceencounter and their perceptions of the service received.'

According to Gefan: Service quality is the subjective comparison that customers make

between the qualities of service that they want to receive and what they actually get.'

Parasuraman says, 'Service quality is determined by thedifference between customer's

expectations of services provider's performance and their evaluation of the services they

received.Service quality is 'the delivery of excellent or superior service relative to

customerexpectations‟.Service quality is recognized as a multidimensional construct. While

the number of dimensions often varies from researcher to researcher, there is some consensus

that service quality consistsof three primary aspects: outcome quality, interaction quality, and

physical service environment quality. Outcome quality refers to the customer's assessment of

the core service which is the prime motivating factor for obtaining the services (e.g. money

received from ATM).Often varies from researcher to researcher, there is some consensus that

service quality consists of three primary aspects: outcome quality, interaction quality, and

physical service environment quality. Outcome quality refers to the customer's assessment of

the core service which is theprime motivating factor for obtaining the services (e.g. money

14

received from ATM).Interaction quality refers to the customer's assessment of the service

delivery process, which is typically rendered via a physical interface between the service

provider, in person, or via technical equipment, and the customer. It includes, for instance,

the consumer's evaluation of theattitude of the service providing staff. The physical service

environment quality dimension refers to the consumer's evaluation of any tangible aspect

associated with the facilities or equipment that the service is provided in/ with. It includes, for

example, the physical conditions of ATM machine.The most popular dimensions of service

quality--features five dimensions: tangibles, reliability, responsiveness, empathy, and

assurance. The tangibles dimension corresponds tothe aforementioned physical environment

aspect, the reliability dimension corresponds to the service outcome aspect, and the remaining

three represent aspects of interaction quality.Both the costs and the revenue of firms are

affected by repeat purchases, positive word-of- mouth recommendation, and customer

feedback. Moreover, there is strong evidence that service qualityhas either a direct influence

on the behavioral intentions of customers and/or a n indirect influence on such intentions,

mediated through customer satisfaction.RATER is an instrument that might be used to define

and measure banking service quality and to create useful quality-assessment tools.The

RATER may finally provide the following benefits to the HDFC bank:

1. It is the first approach to add and mix the customers‟ religious beliefs and cultural values

withother quality dimensions.

2. It provides for multi- faced analysis of customer satisfaction.

3. It links quality with customers‟ satisfaction and service encounter.

4. It provides information at several levels, already organized into meaningful groupings.

5. It is a proven approach, which results in usable answers to meet customers needs.

6. It is empirically grounded, systematic and well documented. Bank managers can use the

RATER model and its dimensions first to identify the followingissues:

To identify those areas where improvement should be made and resources can be allocated.

Forinstance, they need to know the level of quality in their banks and they can manipulate to

makebank-wide improvement in quality performance. Also they can use benchmarking to

15

comparetheir performance and other banks‟, which have already implemented quality

program that willhelp to prioritize the quality management efforts.

16

Dimensions of service quality:

RESPONSIVENESS

RELIABILITY

ASSURANCE

EMPATHY

TANGIBILITY

Tangibility: This dimension deal with modern looking equipments and visual appealing part

of banks.

Reliability: This dimension has a direct positive effect on perceived service quality

andcustomer satisfaction in banking institutions. Banks must provide error free service and

secureonline transactions to make customers feel comfortable.

Responsiveness: Customers expect that the banks must respond their inquiry

promptly.Responsiveness describes how often a bank voluntarily provides services that are

important to itscustomers. Researchers examining the responsiveness of banking services

have highlighted theimportance of perceived service quality and customer satisfaction.

Assurance: Customer expects that the bank must be secured and the behavior of the

employeesmust be encouraging.

Empathy:Individual attention, customized service and convenient banking hours are very

muchimportant in today’s service.

In order to achieve better understanding of service quality in banking sector, the proposed

five service quality dimensions are conceptualized to illustrate the overall service quality of

the banking in relation to customers‟ and providers perspective. Banking was in the sector

featuring medium goods and higher customer producer interactions, since in banking,

consumers and service providers interact personally and the use of goods is at a medium

level. Hence, in banking, where there are high customer-producer interactions, the quality of

service is determined to a large extent by the skills and attitudes of people producing the

service. In the case of services, because customers are often either direct observers of the

production process or active participants, how the process is performed also has a strong

17

influence on the overall impression of the quality of service. A well-performed service

encounter may even overcome the negative impression caused by poor technical quality as

well as generate positive word-of-mouth, particularly if customers can see that employees

have worked very hard to satisfy them in the face of problems outside their control.

Employees are part of the process, which connects with the customer at the point of sale, and

hence employees remain the key to success at these service encounters or “moments of

truth”. It is these encounters with customers during a service that are the most important

determinants of overall customer satisfaction, and a customer’s experience with the service

will be defined by the brief experience with the firm’s personnel and the firms systems. The

rudeness of the bank’s customer service representative, the abruptness of the employee at the

teller counter, or the lack of interest of the person at the check deposit counter can alter one’s

overall attitude towards the service, perhaps even reversing the impression caused by high

technical quality. Another important service quality factor, competence, is defined by

whether the bank performs the service right the first time, whether the employees of the bank

tell customers exactly when services will be performed, whether the bank lives up to its

promises, whether customers feel safe in their transactions with the bank and whether the

employees show a sincere interest in solving the customer’s problems. In short, this

dimension is related to the banks‟ ability to perform the promised service accurately and

dependably. Performing the service dependably and accurately is the heart of service

marketing excellence. When a company performs a service carelessly, when it makes

avoidable mistakes, and when it fails to deliver on promises made to attract customers, it

shakes customers‟ confidence in its capabilities and undermines its chances of earning a

reputation for service excellence. It is very important to do the service right the first time. In

case a service problem does crop up, by resolving the problem to the customer’s satisfaction,

the company can significantly improve customer retention. However, companies fare best

when they prevent service problems altogether and fare worst when service problems occur

and the company either ignores them or does not resolve them to the customer’s satisfaction.

Performing the service accurately is perhaps the most important factor in service quality

excellence. The cost of performing the service inaccurately includes not only the cost of

redoing the service but also the cost associated with negative word-of-mouth generated by

displeased customers. In case of services, the factory is the field. Again, services are

18

intangible and hence the criteria for flawless services are more subjective than the criteria for

defect- free tangible goods. Hence for most services, customers‟ perceptions of whether the

service has been performed correctly, and not provider-established criteria, are the major

determinants of reliability .The service quality factor tangible is defined by whether the

physical facilities and materials associated with the service are visually appealing at the bank.

These are all factors that customers notice before or upon entering the bank. Such visual

factors help consumers form their initial impressions. A crucial challenge in service

marketing is that customers cannot see a service but can see the various tangibles associated

with it - all these tangibles, the service facilities, equipment and communication materials are

clues about the intangible service. If unmanaged, these clues can send to the customer’s

wrong messages about the service and render ineffective the marketing strategy of the

company. On the other hand, improving quality through tangibles means attention to the

smallest details that competitors might consider trivial. Yet, these visible details can add up

for customers and signal a message of caring and competence. Customers may reveal new

aspects of service quality in banking that are important to them, and these would have to be

incorporated in the scale so as to further explore the concept of service quality in the banking

arena.

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Chapter 2

REVIEW OF LITERATURE

Digitalization: "Banks are at a crossroads."

Digitalization is forcing banks to undergo the most extensive transformation in their history, says

Holger Spielberg. Credit Suisse's new "Head of Innovation" for its Digital Private Bank explains

the financial revolution. 

Mr. Spielberg, in an industry report, PwC writes the following: "Banks find themselves in the

midst of a transition with the term 'digital' at its core"; in another report, McKinsey & Co.

write: "Getting digital banking right is a matter of life and death." Are we in the midst of the

greatest revolution in the history of banking?

Holger Spielberg: That was a long question. The answer is much shorter: Yes, that's right.

Why?

Banks today are at a crossroads. On the one hand, they are still processing their recent

history. On the other hand, we can already see the first effects of a digitalization of society,

an issue that banks are still struggling with. Bank branches are hardly needed any longer.

Payments and money transfers can be handled by platforms and robots. These basic functions

will be open and free, they do not necessarily require a bank. And soon, we will be able to

pay our telephone bills using social media.

The retail business is under pressure.

Yes , and the banks are in a bad position. The competition is closer to the clients and comes

mostly from outside of the world of finance – Apple, Face book, or Swisscom in Switzerland,

20

which is making a strong push into finance. Add to that the fact that "fin techs," startup

companies in the financial area, are springing up like mushrooms. Worldwide, around seven

billion francs are being invested in these companies annually. We are seeing a lot of fin techs

in the retail area right now, as well as increasingly exciting approaches in wealth

management.

But isn't the outlook in private banking better?

In this area, we find ourselves in a relatively strong position – for now. This business is much

more complex and the usually quite exclusive clients are less price-sensitive than in the retail

business. Security, relevance, expertise and protection of the private realm are just as

important. But here, too, there is a digital revolution.

One hears a lot about the "Digital Private Bank." Until now, though, this has seldom meant

more than graphically attractive portfolio analyses and access to the client's own data using

any device. Is that a revolution?

First of all, yes, you are right that user interfaces and mobile access are truly the first things to

have changed. But it was necessary. Our interaction with the digital world has undergone

enormous changes in a very short time. No one was demanding a screen that could be

manipulated by swiping back and forth, but once it was here, everyone thought it was cool.

Innovations like this will continue to come. They aren't specifically related to banking, but

we are affected by them and have to do our part. Otherwise, we run the risk of becoming

alienated from our clients.

Secondly?

Banks have been forced to change their business model in recent years due to the financial

crisis and more stringent regulatory requirements. In addition, there is a huge amount of

pressure on the relationship of costs to revenue. It's about achieving a whole new level of

efficiency on the one hand, while also presenting new growth. The digital world offers an

opportunity here, but many European banks are still reacting too hesitantly. Visually

augmented graphics are just a band-aid, but not a model for the future.

What will it take?

That is the third part of the answer. I believe that we need to somewhat rethink banking,

consistently with clients in mind. With all the buzz about fin techs, banks have the potential

to establish themselves sustainably for the future. So we have to rethink our services from a

21

push to a pull model. My vision is to see banking become integrated in the lives of our

clients, with more relevance and a great deal of trust. For the banks, this means investing

intelligently in new strategic competencies, such as partnering. If the banks really trust in

themselves, they can be better than any start-up.

Why are American banks more advanced in this regard?

For a long time the American banking system was very inefficient and was still functioning

in part on a manual level – think checks, for example. There was extreme pressure to

innovate, compounded by the fact that digitalization was much more advanced in other areas.

In addition, the economic crisis hit earlier, and US banks were forced to cut costs, which is

achieved through digitalization. Besides, regulations and data protection are less stringent

than they are here. And, finally, the American banks are serving an enormous market, which

is a very important aspect for digitalization since economies of scale are what count here.

You don't earn much for individual clients; you need high volumes to pay off the high

development costs and expensive software solutions.

Is it also a question of mindset?

Yes. The way I see it, US banks have fewer reservations about Silicon Valley, fintech

ventures and technological innovations; we could learn something from them in that regard.

How is Credit Suisse responding to the digital challenge?

By taking specific steps: In order to really change things, we are changing the way we work

and approach the topic. This starts with our team, which we are augmenting with talented

people from other industries, startups and with digital backgrounds. I'm also trying to set the

tone, based on my 15 years of experience in Silicon Valley. We are transforming all of our

activities to be more agile, and with our office layout we've put the business and developer

teams together. We can point to the measurable, positive experiences we've had with our

"factory" in Singapore in this regard.

What's ahead for the long term?

Zurich and Silicon Valley will have innovation labs after 2020. There, we hope to create

interfaces with other developments in society, technology and research, as well as realize

projects and prototypes for shaping our own banking future. These labs should also become

sources of disruptive thinking and impulses, which will redefine banking and completely

reconfigure processes and added value for clients in Wealth Management, for example. With

22

the Digital Private Bank, we find ourselves at the beginning of the bank's transformation. A

number of other banks are currently also taking on digitalization for themselves. I am

convinced that, in the long term, the banks that will be successful are not those that offer the

coolest features right now. Rather, success must be measured by the bank's ability to

implement digital changes sensibly and efficiently on an organizational level.

What will the role of the client advisor be?

In our philosophy, the client advisor will play an important personal role. But roles and tasks

have to change in order to remain more relevant to the lives of our clients in the future. The

fact is that we are not taking the right approach with the 30-year-old Google millionaires or

the Millennials. A traditional "wine and dine" approach is working less and less in this

segment, where the advisor is seen as more of a coach. These clients want support in how to

handle money in general, how to set financial goals and how to make them achievable.

Will Credit Suisse be on a first-name basis with its clients, addressing them using the

informal "you"?

We are a global company, so "you" is already just "you"! But that should ultimately be left up

to the client. After all, using digital channels in addition to client advisors also creates a much

more personal relationship with our clients.

Swiss banks stand for discretion. The digital world stands for the opposite: absolute

openness. Isn't that a contradiction?

"Swissness" is a strong value established over centuries and which, at its core, remains a solid

one. Especially these days when so much is "shared," trust and security mean a lot. This is

what the Swiss banks should build upon, redefining discretion in a digital world.

How?

If I want to transfer money from one social media platform to another, as previously

mentioned, the underlying platform must be able to guarantee data security. That could be a

Swiss bank. The exciting thing is that digital also means direct person-to-person interaction.

New technologies can help here and represent an opportunity for Swiss banks with their

tradition and international reputation.

Where is mobile payment actually ideal?

23

Number one in mobile payment is my former employer PayPal, simply because a significant

portion of e-commerce is conducted using mobile end devices and PayPal is innovative. Yet

Starbucks is number two. They are not actually even involved in the mobile payment areas,

but they have an app for ordering a latte, earning loyalty points or buying someone a coffee –

and along the way you can also pay the bill. It works like Uber, where everything is

integrated in a single app: ordering a taxi, displaying wait times, entering the destination,

rating the driver – and paying, too, including a digital receipt which can be automatically

saved in an expense report. The payment function is successful because it is embedded in the

app. Really , why should I carry cash?

Consequences of Digitalization in future

By 2016, the number of bank branches is expected to reduce by over 50% in northern Europe

and by 15% in southern Europe compared to 10 years before. This means that not only basic

bank account services (e.g. wire transfers and payments) will be only offered through remote

channels of communication, but also for instance investments, mortgages and any type of

service that currently is or in the future will be offered by banks.

But in countries like Italy where regulations still require the written signature and in some

cases the certification by a public notary for the validity of certain documents, the

opportunity of relying on so called digital signature tools and other remote systems of

execution is crucial. Indeed, such tools provide the same evidentiary value of written

signatures effective towards any third party which the consequential major advantage for

banks that through their Internet banking platforms will be also able for instance sell financial

instruments of third parties.

However, the implementation of such tools requires to rely on third party providers that act

as “certification entities” and therefore certify the link between the signature tool and the

relative holder that is “presumed” i.e. the burden of proof to challenge such link will be on

the customer. Additionally, stringent obligations shall be complied with in relation to the

provision of information to customers also to avoid that the signature is then challenged.

Most of the obligations relating to such functionalities can be outsourced though but since the

24

bank is still the primary contact with customers, this change also requires an ad hoc training

of internal staff and the implementation of adequate policies.

Likewise remote channels of communications can be used for notifications and in this respect

Italy has introduced the so called “certified email” tool whose evidentiary value is the same

as a registered letter with return receipt and is now compulsory for all Italian companies and

to deal with public entities.

The digital challenge for banks needs also a new approach on communications with

customers which requires not only the provision of financial data and of consultancy and

customer support services on mobile platforms (e.g. video communications with a dedicated

consultant), but also for instance the usage of social media to set up and maintain the

relationship with customers. However, the usage of social media can trigger some legal risks

especially for the “viral” effect of activities performed on the Internet. Adequate internal

rules shall be adopted to avoid misconducts that might have a major negative impact on the

bank’s reputation.

As far as Italy is concerned, the Internet banking sector is still behind some European

countries but according to estimates the number of customers using an home or corporate

Internet banking account will be by 2017 almost 50%. Therefore major potentials are out

there and it appears that digitalization is not anymore an option but an obligation.

Digitalization in HDFC Bank

MUMBAI: HDFC Bank is working on digitizing every process that does not require a

statutory `wet signature'. The bank will digitize submission of Form 15H which presently has

to be physically submitted by senior citizens to the branch to avoid tax deduction at source.

Speaking to Times of India, Nitin Chugh, head of the bank's digital banking said that the

bank was moving to a system where customers would be required to use physical forms only

where there is a legal requirement for the customer to sign such as on an account opening

form. Besides this, other digital initiatives are aimed at migrating more customers to

25

transacting through mobile phones. The bank mobile banking application has seen a sharp

increase in usage after it improved the utility of the platform facilitating as many as 75

operations through the mobile interface. The value of transactions on the mobile platform

increased five-fold between June and October 2014 to Rs 3540 making it the market leader in

terms of value."We are seeing very quick adoption of mobile banking. Although many senior

citizens still continue to use only branches, those in their 40s are using the internet and ATM.

Those in their 30s use both mobile and internet while those born earlier use only the mobile,"

said Chugh. He added that mobile banking already had more functionality as compared to the

website as customers now get location based offers coupled with directions to the nearest

ATM or branch using the map feature. The other big trend that the bank is riding according to

Chug is tie-ups where it provides third-parties, often start-ups, space on its online platform.

The bank shares its application programming interfaces (APIs) allowing accountholders to

seamlessly buy third party products. Users of social media are already experiencing such

partnerships where social media platforms tie-up with other service providers. The advantage

is that the customer need not provide any of his details and need not authenticate himself. For

instance, if one chooses to buy a health insurance policy from HDFC Bank online the

personal details are automatically captured and the customer has to only select the cover. "IT

experts describe this trend as API-fication, where we provide secured access to third-parties,

“said Chugh. According to Chugh expectations from customers are changing and it not

necessarily to do with what competition is offering on banking. "This is why we are

reworking our net banking site in a way that makes it as intuitive as using an iPad without a

manual," said Chugh.

Recent advancements in Banking

Atom is a new UK bank that'll have no branches, just apps

Banking is a bit of an old boys' club dominated by a few huge, lumbering corporations, but

up-start Atom thinks it's time for a new player with a different approach. Atom wants to take

mobile banking seriously; so seriously, in fact, that it aims to exist almost solely as a mobile

app. The company has just been granted a UK banking licence and plans to launch later this

26

year, first using mobile apps to offer its services before graduating to desktops in due course.

Atom will have a 24-hour support team available by phone, email, web chat and social

networks, but the idea is you can do everything, even open an account, from within the

mobile app.

By focusing on the mobile experience, Atom hopes it can make dealing with your finances

altogether more convenient. Its apps won't simply be for checking your balance and pushing

money around, too. They'll include support for biometric security and will feature "unique

and engaging ways to manage money." Atom will effectively be "branch-free," but by launch

it'll have a traditional, high-street bank partner that will accept cheque and cash deposits from

Atom customers -- similar to how the branchless bank First Direct operates, though it's

owned by HSBC, making the logistics a little simpler. Of course, you'll get a standard debit

card, too, for paying with plastic or extracting cash from ATMs.

Atom isn't the only company pursuing a fresh approach to banking. Simple and

Movenbank are digital-first banks already operating in the States, and Mondo is another UK

outfit that wants to place all emphasis on the mobile experience, with apps that also try to

help you manage your money better. Mondo's doing things a little differently from Atom,

though. Instead of using existing banking infrastructure and layering its front-end over the

top, Mondo is starting from scratch (building what's known as the "full stack"). It might mean

Mondo will be later to launch, but it argues that having immediate access to your real-time

data through its own systems will allow it to make the customer experience that little bit

better.

Britain just gave the green light to a bank with no branches and no website just an apps

Atom Bank, the online-only challenger bank, just won a banking licence to operate in the UK

and plans to launch later this year.

Unlike traditional banks - and even some challengers - Atom Bank won't have any branches

or even a website initially, operating purely though a mobile app.

Customers will be able to open accounts and carry out all their banking activity just from

their smart phone. The 1-year-old startup said it wants to "set new standards for the banking

27

sector" when it comes to technology. The company plans to use 3D visualizations and

gaming technology for its app, and plans to integrate cutting edge biometric security.

CEO Mark Mullen says: "We've set about designing a banking app that's in tune with how

people think about their money. Taking an app-based approach allows us to use all the

features of your mobile device to provide a slick and highly personalized experience. It will

offer total control and transparency with a depth that is beyond anything else on offer in the

market today."

Mullen previously ran HSBC's telephone banking branch First Direct. He was recruited to

run Durham-based Atom Bank by founder Anthony Thomson, who also co-

founded challenger bank Metro Bank.

Atom Bank is backed by financial heavyweights including star fund manager Neil

Woodford and Jim O'Neill, the former Goldman Sachs economist famous for coining the

term BRICs to refer to Brazil, Russia, India and China. The company raised £25 million

($39.4 million) last year.

28

Chapter 3

RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY

The objective of the study is as follows:

To examine the essential dimensions of service quality i.e. RATER-

Reliability,assurance, tangibles, empathy and responsiveness of HDFC bank and any

nationalized bank.

To find out and compare the level of perception of the customers from the service

quality offered by the banks.

To compare which service quality dimension of the HDFC or nationalized bank is

performing well.

To identify which dimension of service quality needs improvement so that the quality of

service of HDFC banks is enhanced.

Importance and scope of the study

The study would try to throw some insights into the existing services provided by the banks,

Perceptions and the actual service quality of the bank. The results of the study would be able

torecognize the lacunae in the system and thus provide key areas where improvement is

requiredfor better performance and success ratio. In the days of intense competition, superior

service is the only differentiator left before the banks to attract, retain and partner with the

customers. Superior service quality enables a firm to differentiate itself from its competition,

gain sustainablecompetitive advantage, and enhance efficiency.

Scope of study

The scope of this research is to compare the service quality of HDFC bank and State Bank of

India (SBI). This research is basedon primary data and secondary data. This study has only

focused on the dimensions of servicequality i.e. RATER. It aims to understand the skill of the

company in the area of service quality that are performing well and shows those areas which

29

require improvement. The study was done taking only one branch of HDFC bank and SBI

into consideration. The survey was restricted to the bank customers in Bijbehara, Anantnag,

Jammu and Kashmir.

METHOD OF DATA COLLECTION

Data source

Primary Data:

The primary data was collected by means of a survey. Questionnaires were prepared

andcustomers of the banks at two branches were approached to fill up the questionnaires.

Thequestionnaire contains 20 questions which reflect on the type and quality of services

provided by the banks to the customers. The response of the customer is recorded on a grade

scale of strongly disagree, disagree, uncertain, agree and strongly agree for each question.

The filled upinformation was later analyzed to obtain the required interpretation and the

findings.

Secondary Data:

In order to have a proper understanding of the service quality of bank a depth study was

donethe various sources such as books, a lot of data is also collected from the official

websitesof the banks and the articles from various search engines like Google, yahoo search

andanswers.com.

RESEARCH DESIGN

The research design is exploratory till identification of service quality parameters. Later it

becomes descriptive when it comes to evaluating customer perception of service quality of

the banks.

Descriptive research, also known as statistical research, describes data and characteristics

about the population or phenomenon being studied. Descriptive research answers the

questionswho, what, where, when and how. Although the data description is factual, accurate

30

and systematic, the research cannot describe what caused a situation. Thus, descriptive

research cannot be used to create a causal relationship, where one variable affects another. In

other words, descriptive research can be said to have a low requirement for internal validity.

The description is used for frequencies, averages and other statistical calculations. Often the

best approach, prior to writing descriptive research, is to conduct a survey investigation.

Qualitative research often has the aim of description and researchers may follow-up with

examinations of why the observations exist and what the implications of the findings are?

Sampling plan:

Since it is not possible to study whole universe, it becomes necessary to take sample from the

universe to know about its characteristics.

Sampling Units: Customers of HDFC bank and SBI.

Sample Technique: Random Sampling.

Research Instrument: Structured Questionnaire.

Contact Method: Personal Interview

Sample size

The work is a case of HDFC Bank, one of the largestbank of Indian banking industry together

representing over 25 per cent of the market share of Indian banking space. The survey was

conducted in the Bijbehara town of Dist Anantnag at branch of HDFC Bank, with 50

customers as respondents.

Data collection tool

Data was collected through a structured questionnaire. Likert scale technique is used. The

format of a typical five- level Likert item is:

1. Strongly disagree

2. Disagree

3. Neither agree nor disagree

4. Agree

31

5. Strongly agree

32

Likert scaling is a bipolar scaling method, measuring either positive or negative response to a

statement. The questionnaire consists of two parts. The first part consists of three questions

concerning the demographic information of the respondent such as the name, age, educational

qualifications and income. The second part consisting of 18 questions exploring the

respondent’s Perception about the service quality of HDFC. For evaluation of service quality

of HDFC bank. Service quality dimension of reliability, assurance, tangibility, empathy and

responsiveness issued in order to evaluate the actual service quality of HDFC bank.

33

Chapter 4

DATA ANALYSIS AND INTERPRETATION

Question: Age (HDFC customers).

AGE

CATEGORY

FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE

18-23 Years 10 20 20

24-29 Years 17 34 54

30-35 Years 15 30 84

35 Years and

above

8 16 100

TOTAL 50 100

34

Question :Age of SBI customers.

35

36

AGE

CATEGORY

FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE

18-23 Years 15 30 30

24-29 Years 17 34 64

30-35 Years 12 24 88

35 Years and

above

6 12 100

TOTAL 50 100

INTERPRETATION:

From the table and graph above it can be seen that20% respondent’s age are 18 to 23

years ,34% respondent’s age are 24 to 29 years, 30% respondent’s age are 30 to 35 years,

16% respondent’s age are 35 to above years in case of HDFC. SBI customer data can be

interpreted in the same way.

Question.: Educational qualifications

37

Figure 1

Figure 2

38

INTERPRETATION

From the table and graph above it can be seen that 26% respondents are Under graduate, 40%

respondents are Graduate, 34% respondents are Post graduate students

Question.1: Did HDFC bank or SBI has modern looking equipment?

Figure 3

39

Figure 4

INTERPRETATION

HDFC bank has modern-looking and hi-tech equipment’s. Here analysis show that most of

the respondents disagreed with this statement. Among the total respondents 50% disagreed,

32% were neutral and 8% agreed. After analysis I found that majority of the respondents

think that HDFC Bank has modern looking equipments or hi-tech equipments compared to

SBI.

40

.

Question 2: Are physical features of HDFC bank visually appealing compared to SBI?

Figure 5 represents visually appealing features of HDFC compared to SBI

Interpretation: From the above graph it is evident that HDFC bank has visually appealing

physical features than SBI.

Question.3: Are the bank's reception desk employees neat appearing?

41

Figure 6

INTERPRETATION

HDFC bank’s employees appear neat. Here analysis shows that majority were neutral.

Among the total respondent 21 respondents were neutral, 18 people agreed and 6 respondents

strongly agreed. The rest disagreed. From analysis I found that some respondents agreed with

this statement but most of the respondents think the employees of the HDFC bank appear

neat than SBI.

42

Ques.4: When the bank promises to do something by a certain time, it does so.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE

STRONGLY

DISAGREE

2 4 4

DISAGREE 26 52 56

UNCERTAIN 5 10 66

AGREE 14 28 94

STRONGLY

AGREE

3 6 100

TOTAL 50 100

Table shows percentage of customers of HDFC bank strongly agreeing. Disagreeing,

uncertain, agreeing and strong agreeing that banks fulfills its promise

SCALE FREQUENCY PERCENTAGE CUMULATIVE

43

PERCENTAGE

STRONGLY

DISAGREE

4 8 8

DISAGREE 24 48 56

UNCERTAIN 5 6 62

AGREE 15 30 92

STRONGLY

AGREE

4 8 100

TOTAL 50 100

Table SBI

INTERPRETATION

My sample size was 50. Here analysis shows that among the total respondents 26 respondents

disagreed and 14 respondents agreed with this question. Also I found that 5 people were

neutral and 2 people strongly disagreed. Hence I concluded that majority of them disagreed

that the bank when promises to do something by certain time, it does so .Here respondents

have shown dissatisfaction about SBI.

44

Question 5: When you have a problem, the bank shows a sincere interest in solving it.

Figure 7

INTERPRETATION

After analyzing the above graph we found that most of the respondents agreed i.e. 52%

respondents agreed. Also I found that 28% were neutral with this statement and 6% were

committed with disagree. There was no one who strongly disagreed. Hence HDFC bank can

be said to be reliable than SBI.

45

Ques.6: The bank insists on error free records.

INTERPRETATION

Bank insists on error free records. HDFC bank has proved from my analysis that it surely

insist on error free records as 46% respondents agreed with this statement and 24% strongly

agreed. Only 10% respondents disagreed and no one strongly disagreed.SBI is lagging

behind.

46

Ques. 07: Employees in the bank give you prompt service.

Figure 8

Figure shows percentage of prompt services of HDFC Bank

INTERPRETATION

Most of the respondents agreed with this statement. According to my analysis, employees in

HDFC Bank give prompt service. Among the total respondents agreed respondents were 27

and strongly agreed were 2. 16 people were neutral and 5 disagreed. There was no respondent

who strongly disagreed with this statement.

47

Question 8.The loan disbursals and issuance of ATM cards is very fast.

Figure 9

48

Ques.09: Employees in the bank are always willing to help you:

Figure 10

INTERPRETATION

With this statement no one disagreed or strongly disagreed. Strongly agreed were 9 people

i.e. 18% respondents strongly agreed, 29 people agreed i.e. 58% respondents agreed and 24%

respondents were neutral. Willingness shown by by SBI employs is lower than SBI.

Ques.10The employees of the bank are trustworthy.

49

Figure 11

INTERPRETATION:

The employees of the bank are trustworthy. According to my findings, 54% respondents

agreed that employees at HDFC bank are trustworthy. 13% respondents were neutral and 4%

respondents disagreed with this statement.

Ques.11: You feel safe in your transactions with the bank.

Figure 12

50

INTERPRETATION

With this statement most of the respondents agreed. Among the total respondents 23 agreed

with this statement and 6 strongly agreed. 32% respondents were neutral and 10%

respondents disagreed. But there no one who strongly disagreed.

Ques.12: The bank gives you individual attention.

Figure 13

INTERPRETATION

HDFC bank is not able to give individual attention to its customers as out of the total

respondents 54% disagreed with this statement. 12% of the respondents were neutral and only

12% agreed and 2% strongly agreed. From this finding it can be concluded that it is unable to

give individual attention to its customers.

51

Question13: The bank has operating hours convenient to all its customers.

Figure 14

INTERPRETATION:

HDFC bank has operating hours convenient to all its customers. Out of 50 respondents, 27

respondents agreed with this statement and only 2 respondents disagreed. Also 7 respondents

strongly agreed that the bank has operating hours convenient to its customers.

Ques.14: The employees of the bank understand your specific needs.

52

Figure 15

INTERPRETATION

Employees of HDFC bank understand specific needs. With this statement most of the

respondents were neutral. Among the total respondents 20 respondents agreed and 4

respondents strongly agreed. 5 respondents disagreed with this statement. While in case of

SBI, 58% of the respondents disagreed with the statement.,18% of the respondents were

uncertain, 12% of the respondents agreed and remaining agreed strongly.

MEASURING SERVICE QUALITY DIMENSIONS

Measuring the quality of a service can be a very difficult exercise. Unlike product where

there are specific specifications such as length, depth, width, weight, colour etc. a service can

have numerous intangible or qualitative specifications. Parasuraman, Zeithaml, and Berry

(1985) provide a list of determinants of service quality: access, communication, competence,

courtesy, credibility, reliability, responsiveness, security, understanding, and tangibles. A

total of five consolidated dimensions of service quality are: Tangibles (ques.1 to 4) - Physical

facilities, equipments and appearance of personnel Reliability (ques.5 to 7) - Ability to

perform the promised service dependably and accurately Responsiveness (ques.8 to 10) –

Willingness to help customers and provide prompt services Assurance (ques.10 to 11) –

(including competence, courtesy, credibility and security) Knowledge and courtesy of

employees and their ability to inspire trust and confidence Empathy (ques.12 to 14) –

(including access, communication and understanding the customer) Caring and individualized

attention that firm provides to its customer. In order to calculate which dimension of service

quality is performing well, a sample of the questions are used in the questionnaire. Using the

questionnaire, obtain the score for each of the 20 statements. After analysis of the data,

Overall score to each statement is given on a scale of 1 to 5 i.e. 1 is given to strongly

disagreed i.e. the lowest score, then 2= disagreed, 3= uncertain, 4= agreed and 5= strongly

agreed. Sum the score for each dimension of service quality to obtain a final score which tells

which dimension is performing well and which dimension needs improvement.

53

54

Chapter 5

CONCLUSION & LIMITATIONS

FINDINGS OF THE REPORT

The Reliability dimension of service quality is better as compared to empathy and tangibility.

Still the score is low. For most services, customer perceptions of whether the service has been

performed correctly, and not provider-established criteria, are the major determinants of

reliability. Customers of the bank hesitate to rely on the bank. Whenever they have a

problem, the bank shows sincere interest in solving it but the services are not performed by a

certain time as promised. The employees should take this problem seriously and take steps to

remove this.

As score for Assurance is at second place after responsiveness, so the customers of HDFC

bank are very confident and feel safe while transacting with the bank. Moreover the

employees of the bank have proved to be trustworthy. Employees are also educated enough to

answer all the questions.

The score of Tangibility dimension of service quality of HDFC bank is the lowest. The

service quality factor tangible is defined by whether the physical facilities and materials

associated with the service are visually appealing at the bank. These are all factors that

customers notice before or upon entering the bank. Customer expectations regarding visual

appealing of HDFC is very high. From my study I found that Physical facilities and modern

looking equipment are not sufficient in HDFC bank. Respondents were uncertain about the

neat appearance of the reception desk employees. So they should work on that and try to

fulfill the gap

According to my findings, the score of Empathy is not satisfactory but not unsatisfactory

also. HDFC bank is unable to give individual attention to its customers and is unable to

understand specific needs of its customers. But still bank has taken steps to satisfy its

customers by keeping operating hours convenient to its customers and keeping their interest

best at heart.

55

In HDFC bank, the score of Responsiveness is highest so they are focusing on prompt

service, employees are willing to help the customers and say the exact time when the services

will be performed. Employees at bank give their customers first preference and are always

ready to help them. Overall HDFC bank’s responsiveness dimension of service quality is the

highest.

According to the customer perception, HDFC bank is highly responsive. Customers are

assured while transacting with the bank. The reliability dimension is lower than the first to

dimension. They feel that the bank is unable to give them individual attention and its

equipments are not modern and sufficient for the bank.

There is not much gap between all the dimensions, this shows that HDFC BANK is a better

service provider in all the dimensions i.e. reliability, assurance, tangibility, responsiveness

and empathy. As a result of which, the customers are satisfied with the service offered by

HDFC bank.

CONCLUSION

Based on the study conducted it can be concluded that responsiveness, assurance and

reliability are the critical dimensions of service quality of HDFC bank and they are directly

related to overall service quality. The factors that may delight customers tend to be concerned

more with the intangible nature of the service, commitment, attentiveness, friendliness, care,

and courtesy. The employees give prompt services, always are ready to answer the questions

and are trustworthy. The main sources of dissatisfaction appear to be cleanliness, up to date

technology modern equipments, and neatly dressed up employees. The Tangibility dimension

of service quality of HDFC bank is highly disappointing and serious steps are needed to be

taken to enhance this dimension. Customers of the bank are dissatisfied with the empathy

dimension. To satisfy these customers, the management can take some attempts, noted earlier

as recommendations. The study brings about the areas which require urgent attention of the

employees, the management, and the policy makers of the industry. These are areas in which

customers are hugely dissatisfied with the services of the banks against their expectation.

56

This high degree of dissatisfaction resulting from the services received clearly questions the

design of services or subsequent response of the bank employees. These limitations are too

serious to be avoided as these question the front-line people dealing with the customers and

the approach of the management in taking customers seriously. .The management should

understand the benefits of service quality. It include increased customer satisfaction,

improved customer retention, positive word of mouth, reduced staff turnover, decreased

operating costs, enlarged market share, increased profitability, and improved financial

performance. In the days of intense competition, superior service is the only differentiator left

before the banks to attract, retain and partner with the customers. Superior service quality

enables a firm to differentiate itself from its competition, gain a sustainable competitive

advantage, and enhance efficiency. Thus, improving service quality leads to the customer

satisfaction and, ultimately, to customer loyalty.

Limitations

The study is only for the HDFC Bank confined to a particular location and a very small

sample of respondents. Hence the findings cannot be treated as representative of the entire

banking industry. The study can also not be generalized for public and private sector banks of

the country. Respondents may give biased answers for the required data. Some of the

respondent’s did not like to respond. Respondents tried to escape some statements by simply

answering “neither agree nor disagree” to most of the statements. This was one of the most

important limitation faced, as it was difficult to analyze and come at a right conclusion. In our

study we have included 50 customers of bank because of time limit

57

Chapter 6

BIBLIOGRAPHY

Kotler Philip, marketing management, (Pearson education, 12th edition)

Malhotra K. Naresh, marketing research (An applied orientation), Research design,

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