CUSTOMERS PERCEPTION ON BANKING COMMUNICATION IN

"A" GRADE BANKS OF KATHMANDU VALLEY

By

Seeprata Parajuli

Quest International College

November 24, 2019

Presentation Outline

Background Literature Review

Objectives Research Gap

Methodology ResultsConclusion and

Recommendations

Background• Communication media are believed to

be important tool in attracting attention, holding attention, and increasing the information’s accessibility and its impact on consumer perception

• Communication between senders and receivers of the information is considered to be an important process

• Important tool to gain customers loyalty

• Need for effective communication has increased in order to achieve competitive advantage in the market and to earn the trust of customer

ObjectivesGeneral Objective

To analyze customer perception on banking communication.

Specific Objectives

1. To identify customer’s awareness on banking communication.

2. To measure factor affecting customers understanding on banking communication.

3. To recommend proper management strategy for effective banking communication.

Review of Literature

• Thematic Review - Concepts: Banking Communication

- History of Banks in Nepal

- Categorization of Banks

- Enlisting of 'A' Grade Banks and their Size

- Commercial Banks and their Total Customers in Service

- Banks and Customer Relation

- Importance of Communication in Banking Business

Conceptual and Theoretical Review

Shannon &

Weavers Model

Flensburg Model

General Model of Communi

cation

Lenski Model

ECSI Model

Saussure’s speed circuit Model

Research Framework

Model

Effective Leadership

Communication Model

Customer Satisfaction

Model

Empirical Studies

Policy Review

Sustainable Development Goals (SDGs) – Nepal (2015-2030)

SDGs Costing Assessment- Nepal (2019)

Right to Information Act (2065)

Government of Nepal Communication Policies (2016)

National Information and Communication Technology Policy (2015)

Research Gap

• Customer perception on banking communication

• Prospects and challenges of e-banking

• Application of management control system

• Role of information communication Technology

Conceptual Framework

Modified from Ball et al. (2004))

Methodology

1. Explanatory Research Design

2. Purposive Sampling

3. Quantitative approach

4. Primary Data

5. Prepared Awareness Index

6. Ordered Logit Model

Theoretical Model

• The linear regression model could then be specified as:Uj= β′jXi + εi and Uk = β′kXi + εk (1)

• If a customer decides to use option j, it follows that the perceived benefit from option j is greater than the benefit from other options (i.e., k) which is depicted as:

Uij (β′jXi + εj) > Uik (β′kXi + εk), k ≠ j (2)• the probability that j will be used from the set of customers

perception on banking communication options could then be defined as:

P (Y = 1/X) = P (Uij > Uik/X) (3)P (β′JXi + εj − β′kXi − εk > 0/X)P (β′J − β′k) Xi + εj − εk > 0/X)P (β ∗ Xi + ε

∗ > 0/X) = F (β∗Xi)

Banking Awareness Index

Ordered Logit Model

Cont’d

Result and Analysis

• Socio-demographic Characteristics

50% 50%

Below 20Male

47 1871203

Female 21-40 41-60 61-80

7 125 40 39

Below 1 yr 1-10 yrs 10-20 yrs Above 20 yrs

45 80 124 83 3

Below SEE

UptoH.S

Bachelors Masters Above Masters

Customer's Perception on Banking Communication in Kathmandu Valley

Particulars Yes No

You have faced communication problem in the bank 148 219

There has been misunderstanding between the banks staff and you 86 279

Bank(s) provides information in time 274 88

Bank(s) provides sufficient time to address your problem 260 41

You always receive message immediately after withdrawal and deposit 283 45

There is problem in understanding the electronic message 52 273

Bank communicates about new schemes when available 187 175

The new changes in bank's advance communication system have fulfilled your

expectation

142 36

You feel hassle in account update 49 129

You are you satisfied with the banking communication practiced by your bank with you 160 20

Does your bank(s) inform that your services, term period are going to expire timely 121 30

There is consistency in communication with you in the bank from past to present 254 90

Overall Awareness Level

Awareness Level Number of

Customers

In (%

Percentage)

Less Aware 74 19.83

Moderately Aware 193 51.74

Highly Aware 106 28.41

Factors Affecting Customers Understanding on Banking

Communication• Bank's Level of Cooperativeness with

Customers

Highly co-operative

Co-operative

Moderate

Less co-operative

Not at all

47

176

130

6

4

Language Used by Bankers to Communicate

Formal48%

Informal 8%

Both43%

Others1%

Information provided by banks

0

50

100

150

200

250

300

Yes No

Consistency in Communication

254

90

0 50 100 150 200 250 300

Yes

No

Advanced Communication System Adopted by Bank

0

50

100

150

200

250

Yes No No Idea

Expectation of Customers on Advanced Communication System

0 2 4 6 8 10 12 14 16 18

Getting information on time

Improvement in m-banking

Improve Advertisements

Ease lon Service

Security

Improvement in e-banking

Others

Suggestion for Improvements in Banking Services

Ordered Logistic Regression ResultBanking communication

awareness level

VARIABLES Coefficient Odds Ratio

age 0.0387

-0.032

1.039425

sex -0.876**

-0.413

0.416423

time_prob 1.866***

-0.503

6.464465

visa_dc -1.069*

-0.627

0.343194

mob_bnk -0.178

-0.525

0.837143

demat 0.934*

-0.568

2.545888

Multicollinearity

No Multicollinearity Exists

Heteroscedasticity Test

H0: Constant variance

Breusch-Pagan / Cook-Weisberg test for

Heteroscedasticity

Model Chi2 Prob > chi2

1 3.35 0.0674

The data used for this study is free from Heteroscedasticity

Conclusion

• Male and female are equally aware about having bank account

• Problem faced by customers, information flow from bankers, communication about schemes, hassle in updates, and satisfaction level indicates the awareness.

• DEMAT facilities should be prioritized

Recommendations

• Make Customer's Aware about Advanced Communication System Adopted by Banks

• Improvement in Customer Service

• NRB Should Review on Banking Communication Policies

• Provide Adequate Time to Address Customer's Problem

• Promote DEMAT Facility

• Listen ATM Problems Carefully