2.

1 ELECTRONIC BANKING

The modern financial system is referred to as electronic banking. According to Kurnia et al.
(2010), it is predicated on the automated distribution of banking goods and services to clients via
electronic delivery channels. Electronic banking is commonly defined as "the provision of retail
and small value banking products and services through electronic channels as well as large value
electronic payments and other wholesale banking services delivered electronically" (BCBS
1998), which is in line with the definition provided by the Basel Committee on Banking
Supervision. (Drig & Isac, 2014). In the past, consumers used touch tone phones or automated
teller machines (ATMs) to access online banking services. In reality, a variety of sophisticated
electronic gadgets are utilized, including personal digital assistants (PDAs) and computers (PCs)
(Chavan, 2013).

Customers, either individuals or organizations, can use a public or private network, such as the
internet, to access accounts, conduct business, or acquire information on financial products and
services thanks to the notion of e-banking (Kurnia et al., 2010). Viewing, checking, and
transferring funds between accounts, paying bills, obtaining credit card advances, ordering
checks for expedited services, and paying bills are among the fundamental services offered by
online banking. It follows that e-banking significantly contributes to the improvement of
customer convenience and operational efficiency in banking services. Customers can conduct
business virtually from one corner of the nation to another (Singhal & Padhmanabhan, 2009).

2.2 CUSTOMER SATISFACTION

Customer satisfaction in the banking sector is a critical component influencing customer

retention, loyalty, and overall bank performance. It encompasses various dimensions, including
service quality, trust, customer engagement, and technology adoption. Studies have shown that
high service quality, characterized by responsiveness, reliability, and empathy, significantly
enhances customer satisfaction (Parasuraman, Zeithaml, & Berry, 1988). Trust, built through
transparent communication and secure transactions, also plays a pivotal role in maintaining a
satisfied customer base (Morgan & Hunt, 1994). Additionally, the integration of digital banking
solutions has become increasingly important. The ease of use, accessibility, and efficiency
provided by digital platforms can markedly improve customer experiences and satisfaction levels
(Tam & Oliveira, 2017). Furthermore, active customer engagement, through personalized
services and feedback mechanisms, helps banks understand and meet customer needs more
effectively, thereby fostering higher satisfaction (Hapsari, Clemes, & Dean, 2017). Overall,
ensuring customer satisfaction in the banking sector requires a multifaceted approach, addressing
both traditional service quality elements and modern technological advancements.

2.3 HISTORY OF E-BANKING IN BANGLADESH

Foreign commercial banks (FCBs) were the first in the retail banking industry to use modern
technology in the early 1990s; private and government financial institutions only started to offer
comparable services later in the decade. The financial sector did not start using the internet until
2000, even though it was initially made available in Bangladesh in 1996. Only since 2001 have
e-banking services been available in Bangladesh. Standard Chartered Bank introduced internet
banking to Bangladesh (Hossain, M. M., Irin, D., Islam, M. S., & Saha, S. 2013). However,
online banking has recently been made available in Bangladesh by many banks. Standard
Chartered Bank was the first to introduce ATMs to Bangladesh (SCB). At Banani in Dhaka, the
first booth was built in 1993. Additionally, it was the country's first bank to provide Visa and
MasterCard credit cards on January 1, 1997. Currently, this is a service that every major bank
provides. National Bank Limited, a founding member of Master Card International, introduced
credit and debit card transactions among local banks in Bangladesh for the first time in 1997.

2.4 E-BANKING SERVICES IN BANGLADESH

Credit Cards: Credit cards can be thought of as the bank's version of a loan that it grants to its
clients. Using a credit card allows you to "Use First and Pay Later" for the designated credit
amount in accordance with the sanction terms that have been agreed upon. With this card, the
cardholder can use participating credit card companies such as VISA, MasterCard, Maestro, and
Cirrus to make purchases at merchant establishments and stores.

Debit Cards: Similar to credit cards, debit cards allow users to make transactions online using
their current or savings accounts. This card operates on the "Pay First and Use Later" philosophy,
allowing the cardholder to utilize his own funds from his bank account through the use of a debit
card. Debit cards have the logo or hologram of a participating business, including MasterCard,
Visa, American Express, and Discover, among others.
ATM Cards: By using an ATM card, customers can check the account balance, make deposits,
withdraw money, and deposit bills. A current account or savings account with the bank must be
kept up to date by the cardholder. A private Personal Identification Number (PIN) consisting of
four digits is provided to the cardholder upon card issue. For the purpose of preventing fraud, the
cardholder must always keep the PIN secure.

Smart Card: This incredible technological marvel is the smart card. It can store more than a
thousand times as much data as a standard ATM card, yet being the same size. Because the data
is encrypted, the card is totally resistant to temperature changes. By putting personal information
and other features on the card front, the bearer can further customize the card.

Point of Sale: The place where a transaction takes place is called the point of sale (POS),
sometimes known as checkout. In general, "checkout" refers to the hardware and software used
for checkouts, which is similar to an electronic cash register and includes POS terminals. Selling
is handled via a POS terminal, which has an interface that salespeople can use. Making and
printing the voucher is possible with the same technology.

Electronic Funds Transfer: The term electronic funds transfer, or EFT, describes the computer-
based systems that are used to carry out electronic financial transactions. The electronic transfer
of funds between accounts, whether they are held by different financial institutions or by the
same financial institution, is known as an EFT. In general, an online financial transaction
between buyers and sellers is referred to as an electronic payment. Typically, the substance of
this trade consists of a digital financial instrument that is backed by a bank, an intermediary, or
legal tender, such as encrypted credit card information, electronic checks, or digital cash.

Mobile banking: Checking your balance, making payments, managing your accounts, and other
tasks via a mobile device—like a phone—was referred to as "mobile banking." The typical set of
features that mobile banking offers includes: mini-statements and account history checking;
alerts on account activity or exceeding predetermined thresholds; term deposit monitoring;
access to loan and card statements; mutual funds/equity statements; management of insurance
policies; management of pension plans; ordering checkbooks; checking account balances; recent
transactions; payment deadlines; PIN provision, modification, and online reminders; blocking of
(lost/stolen) cards; and many other features.
SWIFT: SWIFT is a non-profit cooperative owned by banks that is situated in Belgium and
provides services to the global financial community. It guarantees 24-hour, secure transmission
to 6,495 banks and financial institutions worldwide across 178 countries. Every day, 4 million
messages are sent via the SWIFT worldwide network, with an estimated 2 trillion USD worth of
payment messages being sent. Banks can send and receive fund transfers, L/C-related messages,
and other free format messages to and from any other bank that is involved in the network using
the highly secure SWIFT messaging network. The Bank will be able to provide L/C, Payment,
and other communications to its customers more profitably and securely if it has access to
SWIFT. In particular, our clients working with will find it very helpful.

Bangladesh Automated Clearing House (BACH): As announced by Bangladesh Bank, the

Bangladesh Automated Clearing House (BACH) will be operational as of November 1, 2010.
Check processing within participating banks is made possible by the BACH network, which
serves as a conduit for consumers, businesses, and other establishments (such as banks). Bank
customers using BACH will have their checks cleared in a single business day, and machine-
readable checks—that is, checks with magnetic ink character recognition, or MICR checks—will
be available by then. The clearance of a typical check requires a minimum of three days. Future
electronic payments and fund transfers will be made possible by this payment system's usage of
the automated clearing house, which will benefit both large and small businesses.

2.5 PRESENT SCENARIO OF E-BANKING IN BANGLADESH

A brief summary of the e-Banking data related to present scenarios are presented here. Table 1
shows a overall picture of computerized branches in banking sector.

Table 1: Branches Statistics

Period Fully Online Partially Online

Urban Rural Urban Rural Total
April'24 5998 5298 0 0 11296
March'24 5991 5304 0 0 11295
February'24 5987 5305 0 0 11292

Source : Digital Financial Statistics, Bangladesh Bank

By setting up Branches, ATMs, POS terminals, CDMs, and CRMs in both urban and rural
locations, Scheduled Banks enable financial transactions. In the reporting month, there was an
increase of 1 in the scheduled bank branches, as indicated by Table 1. When considering the
entire population of Bangladesh [169.83 million (adjusted), source: Population and Housing
Census 2022, BBS], an average of 15,034 individuals obtain financial services from a single
branch, whereas 12,573 individuals obtain digital financial services from a single ATM.

Table-2 : Number of ATM, POS, CDM,CRM Statistics

Note: ATM- Automated Teller Machine, POS- Point of Sale, CDM-Cash Deposit Machine

Source: Digital Financial Statistics, Bangladesh Bank

As to Table-2 (Card), there were 36, 2 and 6 million Debit, Credit, and Prepaid Cards issued in
April 2024, which represents an increase of 0.96%, 0.77%, and 2.70% over the previous month's
total. In April 2024, there were 50 million local and foreign currency transactions made with
these cards, totaling TK. 476,898 million. In comparison to the previous month, there has been a
reduction in both the number and volume of transactions, by 6.14% and 7.86%, respectively.

Table -3 : Debit, Credit and Prepaid Card Statistics

Source: Digital Financial Statistics, Bangladesh Bank

The growth of mobile financial services (MFS) is impressive. MFS Statistics, such as those for
bKash, Rocket, Upay, and other scheduled banks, are compiled taking into account both
"NAGAD" and "MFS through Scheduled Banks." In April 2024, there will be 227 million MFS
accounts, of which 99 million will be in urban regions and 127 million in rural areas, according
to Table 3 (MFS). Among the services offered by MFS operators, inward remittance is becoming
more and more popular, and the government is offering financial incentives to encourage greater
remittances. Tk 8,564 million in inward remittances are distributed via the MFS route in April of
2024. This month's e-money balance is Tk. 121,324 million.

Table- 4 : MFS Transaction Statistics

Source: Digital Financial Statistics, Bangladesh Bank

2.6 LITERATURE REVIEW

One of Bangladesh's biggest state-owned commercial banks, Agrani Bank Limited was founded
in 1972. It provides a range of banking services, including retail, corporate, and international
banking, and has a sizable branch network. The bank has been improving client services and
service delivery by gradually incorporating e-banking solutions. These services are designed to
shorten wait times, enhance overall service quality, and give clients easy access to financial
transactions. Customers get frustrated and less satisfied with Agrani Bank when there are
frequent technical issues and system outages, according to an investigation conducted by Alam
and Nahar (2019).

Customer satisfaction with e-banking platforms is greatly influenced by its user-friendliness.

Research by Islam et al. (2018) showed that Agrani Bank's e-banking interface usability is not a
conventional feature that has a major impact on customer satisfaction. Interfaces that are easy to
use and streamline banking processes have a higher probability of satisfying customers and
exceeding their expectations.

Online, mobile, and ATM banking are among the e-banking facilities that Agrani Bank has put
into place. According to a poll by Islam and Hossain (2018), by streamlining transactions and
increasing accessibility, these services have improved client satisfaction. Nevertheless, the
research also identified obstacles including technological problems and security worries that
must be resolved in order to improve customer happiness even more.

According to Rahman et al. (2017), Agrani Bank's clientele anticipates that the bank would likely
broaden its array of online offerings to encompass functionalities like real-time money transfers,
electronic wallets, and customized financial counselling.

The majority of clients in a research by Khan et al. (2016) regarding their satisfaction with
Agrani Bank Limited's e-banking services expressed dissatisfaction with the ATM service. The
survey also showed that consumers didn't like how quickly transactions were processed or how
flexible the e-banking services were.

The majority of clients in a research by Khan et al. (2016) regarding their satisfaction with
Agrani Bank Limited's e-banking services expressed dissatisfaction with the ATM service. The
survey also showed that consumers didn't like how quickly transactions were processed or how
flexible the e-banking services were.

Hossain and Hossain (2015) concluded in another study that persistent cybersecurity problems
endanger customers' confidence in Agrani Bank's online banking.

Customer satisfaction has been found to be significantly influenced by the personalization of

online banking services. Agrani Bank's personalized services, such its customized alerts and
product recommendations, are extremely noteworthy and help to improve customer satisfaction
and experience, according to a study by Hossain and Hossain (2015).

2.7 LITERATURE GAP

Studies focused on Agrani Bank's e-banking services are notably lacking. There is a substantial
knowledge vacuum on the ways in which Agrani Bank's particular e-banking activities affect
customer satisfaction because the majority of the literature that has been written either covers the
Bangladeshi banking industry in general or concentrates on other large banks. In order to close
these gaps, specialized research on Agrani Bank's online banking offerings is needed. This study
should concentrate on particular client experiences and include comprehensive comparison
analysis and longitudinal studies. Such study would offer more in-depth understandings of how
Agrani Bank's e-banking practices affect customer happiness, providing crucial direction for
tactical adjustments and customer care upgrades.