Electronic banking in the banking industry




My research proposal is written against the backdrop/emerges of electronic banking in the banking industry. It focuses on both the impact of e-banking on the banking industry but also the impact on customers. The proposed research would focus on HSBC group as its case study. It is written against the backdrop of how innovation technology has affected the business environment in the banking industry.

Electronic banking is one innovation of modern information technology affected/contributed immensely to the growth of the banking sector in the U.K

Electronic banking in this proposal refers to the activities or modes of saving money, taking loans and investment through the advance technology methods of computerised systematic means. The research proposal uses the HSBC group as a case study of the impact of e-banking on the banking sector.

Electronic banking has come to stay and is no longer a tool for competitive advantage but it used the world over to simplify banking procedures for both bank staffs and customers. Examples of electronic banking service include: Automated Teller Machine (ATM) cash withdrawal internet banking, telephone banking, online banking, online fund transfer etc.

Various banks offer a wide range of electronic banking services HSBC for instance provides various types of internet banking services and they include: Blackberry business banking, offshore internet banking, online premier banking, overseas transfer, phone banking etc.

The information communication technological development has grown from each decade. Electronic banking which was once seen as an otentonious service that can't be done with. Electronic banking has functioned in the following ways.

  • Corporate customers of banks have used electronic banking as a fast means of running their companies financial affairs.
  • Individual customers on the other hand have alternative of cutting the supply chain of retail banking by operating transactions through via internet rather than go through long queues to perform their banking transactions.
  • The banks have been ableto reach a wide breed of people offering their banking services to the world over.

The gradual changes and upcoming innovations in electric banking over the past few years has had mixed reaction at the different stratus of the public /economy. While some persons think it has cut off the private relationship customers have with their banks and view electronic banking has an imposition of complex services on them. Invariably this reaction aims to juxtapose this sect of the populaces that hold the above view and the other sect that opines that electronic banking has aided efficiency in provision of financial services.

This research proposal aims to analyse the merits and elements of the information and communication technology: internet on the banking sector using HSBC as a case study.

HSBC sees electronic banking as a means of increasing its efficiency and providing quality service to its customers. It sees electronic banking as a tool of competitive advantage and medium for broader ways to getting trough customers and marketing their products worldwide.

Tanscy said "HSBC has adopted a click and mortar strategy. This requires that customers' internet offerings must meet 3criterias: customers need and preference comes first, they must fit HSBC's existing distribution channels and they must be multinational in scope. (Tansey 2002)


HSBC Holdings plc stands for Honokong and shangai banking corporation. It is a public limited liability company incorporated in England and Wales in 1990.

HSBC is a banking and financial service corporation with its head quarters in London. The groups' value includes outstanding customer service, prudent lending policy, strict expense discipline, strong capital and liquidity, effective and efficient operations.

HSBC has 3000 offices in 88 countries and territories in England, the Asia pacific region, the American, the Middle East and Africa. It was named after its founding members HongKong and Shangai banking corporation, established in 1865 2 establish financial ties/trade between China and Europe.

Their head quarter is situated at 8 Canada square London but its major market share is in Hongkong.

Its main principal subsidiaries are:

  • The Hong Kong and shanghai banking corporation limited
  • Hong Seng Bank Limited
  • Grupo financier HSBC, SA de C.V
  • HSBC Bank Brazil
  • HSBC Bank Newyork
  • Hewehold international Limited(Suisse)

The services provided by HSBC includes

  1. Personal Banking:
  2. HSBC provides financial services for individuals. They offer a range of facilities and service benefits like personal loan, Insurance, pension panning and credit cards. Their personal services could be divided into 2 group categories:

    1. HSBC Premier
    2. It's a personal banking with a benefit of operating your account from anywhere in the world.

    3. HSBC Advance
    4. It's a persona banking that is provided along with numerous benefits which includes travel insurance, car break down assistance among others, Advisory services.
  3. Business and corporate Banking
  4. HSBC provides financial services for small, medium and large business enterprises

  5. Global Banking and markets
  6. The Bank provides investment banking services, global asset management for corporate and institutional clients. Under this large head, it has a product called

    1. HSBC net

    Organizations are offered online financial solution to manage their financial statement or finances generally

  7. Private Banking
  8. The Bank HSBC offers financial management services to wealthy individuals

  9. Internet Banking
  10. Financial, investment services and products are offered to the general public online. This itself is electronic banking which has aided international networking.


The fundamental reason for research on the proposed topic is due to my personal interest in the banking sector especially HSBC. A lot of researchers have outlined mostly the positive impact of electronic banking; most of them have evaluated its negative impact on the banking sector.

I chose to research this area as my topic to critically analyse all the effect of electronic banking both on its industry and its customers.

The research would focus on different views and reactions of customers towards electronic banking.


  1. I aim to qualify the current provision of electronic banking services by the U.K banking sector.
  2. I aim to assess the customers' public acceptance of the electronic banking.
  3. I seek to analyse the advantages and disadvantages of electronic banking on the industry.
  4. I seek to analyse the customer's perception of E-banking, if they view it as an innovation forced on them. Does E-banking really increase the efficiency of the banks?

The main objective of this research is to critically analyse the effect of electronic banking on the banking industry and the populace in generally. It seeks to quantify public reaction and attitude towards online banking.


The research proposal asks the following basic questions. How much impact has electronic technology made in the banking industry? What is the consumers' attitude towards electronic baking? What are the challenges if electronic banking? Are there more benefit of internet banking on the industry than detriments?


The research of electronic banking in the UK banking industry has been conducted by scholar like Elizabeth Daniels <1999> Barry Howcroft, Robert Hamitton, Paul Hewer <2002> Adel M Aladani 2001.

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Academic literature on the effect of electronic banking is numerous and has mare literature as the jet age has gone.

The research would be carried out by using the elate basics of various libraries including the British Library and the internet. I will be using search engines like Google scholar, Google, Ask.com, Wikipedia and Emirald.

Various authors have written extensively written on online banking in banking journals. These authors include Sylvie Laforet, Xia Oyan Li 2005, Mukherjee and Nath 2003.

Various researchers have expounded on electronic banking from various engines, Liae and cheug 2002 researched on customers' acceptance of electronic banking as a delivery channel by the banking industry while some authors have researched on electronic banking as a means of competitive advantage by banks. Even HSBC sought electronic banking as competitive advantage over its competitors or rival banks.

Electronic banking is no doubt over the years developed and how impacted greatly on the banking industry. A lot of research has been done on the positive impact of electronic banking on the banking industry but only a few has covered the negative impact of electronic banking especially the consumers' adverse reactions or mixed reactions towards electronic banking. My research is to analyse this other uncovered areas.

The literature review will focus on the banking industry in the U.K, it.... General, it will also focus on the impact of electronic banking on the banking industry. Lastly it will outline the negative impact of electronic banking from the bankers' angle and the customers' point of view. It will emphasize the negative impact of electronic banking by using consumers mixed reactions of HSBC's online.

The positive impact of electronic banking in the U.K banking industry is premised on point of lower cost of operation for banks.

Academic literature on the impact of electronic banking on the banking industry is without count numerous due to the development in information technology over the last 5 to 7 years. This research would get information i seek to get literature that discuss the impact of electronic banking on the U.K/Europe banking industry and also literature on areas of consumer's reaction/response to electronic banking.

Electronic banking services were first started in the U.K in the 1980's with the Nottingham building society and the banks of Scotland<Tait and Davis, 1989>

Electronic banking has made major impact on the banking industry it has been seen/regarded as the cheapest mode of delivery for banking services<Robinson 2000, Arglie 2002>, its convenience, flexibility and functionality both for the banks and its customers- Johnson et al (1995). From the consumers perspective it has reduced the stress of going to the bank physically and waiting on the queue before being served. Black et al 2002, How.........at el Opine that the above reasons is why consumers have embraced on line banking.

However there are mixed towards electronic banking. There are issues of privacy Karjalute et al 2002. Consumers also Opiaine on fears of internet security some consumers are of the opinion that it is a service available to persons with higher incomes and higher net worth, as .......... Or person's access of internet due to economic banking must fit into the consumer's behavioral pattern <Gatignon and Robertson 1985>.


The data collection made for this study of exploratory qualities primary data collection and some quantitative approaches to data collection. There are numerous studies research on the introduction of electronic banking into the banking industry and its growth over time, thus my study seeks to get fresh insight on electronic banking.

The research proposed the evaluation approach of organizing a focus group interview where more findings and reactions towards electronic banking will be revealed. The focus group would consist of a sample of people who would give differing views on the impact and acceptance of electronic banking.

The data collection method would be a combination of the quantitative approach of the use of focus group interview for studies and the quantitative approach of the use of survey. A random sampling internet survey will be conducted across various sects and stratus of the society.

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Distribution of 100 internet survey to internet users and the distribution of 100 mail survey for non-internet users and <people who don't have any access to the internet> all over the city of London.

A focus group interview is a research methodology/qualitative approach that bring a group of consumers together to give detailed information on a product. It is a design to obtain perception in a defined area of internet in a permissive, non- threatening environment. It is used to obtain a general overview about the subject of interest; it is used in diagnosing the potential or problems associated with a new service and generating impression of objects of interest. The participants will be selected by convenience sapling and the focus group would consist of 10-12 persons.

The group interview would be conducted by a member who would guide the group but also make the interviewees comfortable so as to obtain various free-flowing group discussions for various sects of respondent.


This study proposes facilitating a focus group interview, with a representative of HSBC bank, London to obtain in-depth information on their experience with online banking over the years they have introduced it to the bank. This is to obtain the banking industry in perception on the impact of electronic banking on the banking sector. Other participants of the interview will be a synergy of various consumers from the different social and economical stratus, they will be chosen from each age group of 18-26, 27-45, 46-60 years, low and high income earners. The interview will be conducted face to face interview where the moderator can sense participants' body language and create a comfortable atmosphere for the participants to give their perception freely.

The interview is estimated to last for 2hours; questions to be prepared for the interview would be open-ended questions that would cover the subject matter of topic. The moderator would also contribute to the interview and will give his views freely as well.

An internet and mail survey by means of questionnaire would be conducted. Participants of the survey would be retailed banks representatives and consumers. This quantitative approach of data collection would give a larger abroad perception of proper acceptance of electronic banking, it will also reduce Bias.


This study will combined qualitative and quantitative data analysis approach. Data obtained from focus group interview will be analysed by framework analysis of familiarization, identification of thematic framework including, charting, mapping and interpretation (Richie and Spencer, 1994). The advantage of the approach is that it provides a clear sense of steps which could help to manage the larger amount and complex nature of qualitative data much more easily<Krueger 1994>.

The process o data analysis would involve facilitating the discussions and generating data from the interview over and over to get details, writing, memos and ideas arising from the discussion. The data would then be sited and re-arranged.


The literature review will be sourced from the British library, HSBC archive and other general sources of obtaining public information.

The study/research works will invoke the usage of information technology tools i.e. telephone and internet facilities. It will also require a conducive environment for the face to face focus interview.