Digital-Banking Adoption and e-Service Quality among Public-Sector and Co-op Bank Customers in Mysuru (TAM–SERVQUAL)

India's digital-payments story is usually told with national numbers — billions of UPI transactions a month. At the branch level the picture is more mixed. In a city like Mysuru, a public-sector bank branch and an urban co-operative bank branch on the same street may serve customers who pay the vegetable vendor by UPI and others who still withdraw cash over the counter every week. Banks want to move routine transactions to digital channels, but they rarely know why some customers hold back.

This survey project studies digital-banking adoption among customers of public-sector and co-operative bank branches in Mysuru through two established lenses. The Technology Acceptance Model (TAM) explains adoption through perceived usefulness and perceived ease of use, extended here with perceived risk and trust. A SERVQUAL-based e-service-quality scale (reliability, responsiveness, assurance, ease of navigation, security) measures how customers rate the digital service they do use.

A 400-respondent survey selected by multi-stage sampling is analysed in SPSS/Jamovi using chi-square (age group vs adoption), t-test (adopters vs non-adopters), ANOVA (bank type), correlation and multiple regression of behavioural intention on the TAM constructs. The output is a set of targeted suggestions — for example, branch-level assisted onboarding for older customers and fraud-awareness messaging — and a report aligned with the BCU Commerce 5.6 Survey Project pattern, adaptable to the University of Madras PG Semester 4 Project.

Abstract

Despite rapid growth in UPI and mobile banking, many customers of public-sector and co-operative banks continue to depend on branch counters. This study applies an extended Technology Acceptance Model and a SERVQUAL-based e-service-quality scale to 400 customers of bank branches in Mysuru. Reliability is assessed with Cronbach's alpha, and hypotheses are tested using chi-square, independent-samples t-test, one-way ANOVA, Pearson correlation and multiple regression. The study identifies the factors that most influence intention to use digital banking and suggests customer-segment-specific actions.

Introduction

The Reserve Bank of India and the Government have promoted digital payments through UPI, the Digital Payments Index and campaigns for customer awareness of fraud. Public-sector banks have large, older and semi-urban customer bases; urban co-operative banks serve local traders and salaried families with a strong personal relationship at the branch. Both have invested in mobile apps, but adoption depends on whether customers find them useful, easy and safe.

Review of literature (summary)

Davis's TAM (1989) and its extensions are the most widely used frameworks for technology adoption; banking studies commonly add perceived risk and trust. Parasuraman, Zeithaml and Berry's SERVQUAL (1988) and its electronic adaptations measure service quality. Indian studies report age, education and security concerns as barriers to internet and mobile banking, but many are metro-based or pre-UPI. Gap: recent tier-2 city evidence comparing public-sector and co-operative bank customers, combining adoption drivers with perceived e-service quality.

Existing vs proposed

• Existing (bank practice): app promotion through posters and SMS; adoption reported as counts of registered users; no study of reasons.
• Proposed (this study): measured drivers of intention to use, segment comparisons and service-quality gaps.

Feasibility

• Access: customers approached outside branches and in residential areas; no bank data needed.
• Time: about 14 weeks; data collection over four weeks.
• Ethics: anonymous, voluntary; no account numbers, mobile numbers or ID details collected.

Public-sector and urban co-operative bank branches in Mysuru continue to handle a large volume of routine counter transactions — cash withdrawals, passbook updates, fund transfers — that could be done digitally. This raises branch costs and queues, while customers who avoid digital channels miss the convenience of UPI and mobile banking. Banks respond with general promotion, but they do not know which factors actually hold customers back: whether it is doubt about usefulness, difficulty of use, fear of fraud, lack of trust in the bank's app, or dissatisfaction with digital service quality once used.

The problem is the absence of local, segment-wise evidence on the determinants of digital-banking adoption and the perceived quality of digital services among these customers. This study measures TAM constructs, perceived risk, trust and e-service quality among 400 customers, compares adopters and non-adopters, age groups and bank types, and identifies the strongest predictors of intention to use digital banking.

In scope

• Adult customers holding a savings or current account with public-sector or urban co-operative bank branches in Mysuru city.
• Channels: UPI apps linked to the bank account, the bank's mobile app, internet banking and ATMs.
• Constructs: perceived usefulness, perceived ease of use, perceived risk, trust, behavioural intention, and five e-service-quality dimensions.
• Cross-sectional survey of 400 respondents over four weeks.

Out of scope

• Private-sector and small-finance banks (suggested as future scope).
• Bank-side data such as transaction volumes or app analytics.
• Credit cards, loans and investment products.
• Rural branches outside Mysuru city limits.

Research design

Descriptive and analytical (causal-comparative) survey design.

Sample size

The population (customers of the selected banks in Mysuru) is large and not enumerable. Using Cochran's formula n₀ = z²·p·q / e² with z = 1.96, p = q = 0.5 and e = 0.05: n₀ = 3.8416 × 0.25 / 0.0025 ≈ 384. Allowing about 4% for incomplete questionnaires, 400 usable responses were targeted.

Sampling method (multi-stage)

1. Stage 1 — stratification by bank type: public-sector (240) and urban co-operative (160), reflecting their approximate share of branches in the city.
2. Stage 2 — branches: 6 public-sector and 4 co-operative branches selected by simple random sampling from branch lists on the banks' websites.
3. Stage 3 — respondents: systematic sampling of every 5th adult customer leaving the branch during fixed two-hour slots on different weekdays, with a screening question to confirm an account with that bank. Respondents approached were free to decline.

Questionnaire

All construct items use a 5-point Likert scale (1 = strongly disagree … 5 = strongly agree). The Kannada version was translated and back-translated. A pilot of 40 respondents checked clarity; Cronbach's alpha ≥ 0.70 required for each construct. Section G is answered only by adopters.

Hypotheses (α = 0.05)

• H1₀: age group and digital-banking adoption are independent — chi-square test.
• H2₀: there is no difference in perceived risk between adopters and non-adopters — independent-samples t-test.
• H3₀: e-service-quality scores do not differ between public-sector and co-operative bank customers — independent-samples t-test; across three age groups — one-way ANOVA with Tukey post-hoc.
• H4₀: perceived usefulness and ease of use are not correlated with behavioural intention — Pearson correlation.
• H5₀: usefulness, ease of use, risk and trust do not significantly predict behavioural intention — multiple regression (enter method; VIF, Durbin–Watson, residual checks).

Timeline (14 weeks)

Weeks 1–3 review and instrument · Week 4 pilot · Weeks 5–8 data collection · Weeks 9–10 analysis · Weeks 11–13 writing · Week 14 submission and viva.