A STUDY OF CONSUMER PREFERENCE ON PUBLIC VS PRIVATE SECTOR BANKS

Abstract

In today's dynamic banking environment, characterized by rapid technological advancements and evolving customer expectations, understanding consumer preferences and satisfaction is paramount for financial institutions. This research focuses on discerning the factors that drive consumers to choose between public and private banks in India, specifically examining the State Bank of India (SBI) and HDFC Bank. Through a detailed survey of 136 respondents, the study provides comprehensive insights into the motivations and satisfaction levels of customers with these two banks. Consumer Preferences: The research indicates that consumers opt for SBI primarily due to its perceived security, extensive branch network, and the trust associated with its government backing. These factors underscore SBI's reputation as a stable and reliable institution. On the other hand, HDFC Bank attracts customers with its exceptional service quality, strong brand reputation, and superior digital banking facilities. These attributes highlight HDFC's commitment to providing a modern, customer centric banking experience. Advantages and Disadvantages: SBI: Customers appreciate SBI's long-standing reputation and the security of banking with a public sector entity. However, the bank faces challenges in terms of service efficiency, with lower ratings for waiting times and staff courtesy. Despite improvements, SBI's digital services lag behind those of private banks, reflecting lower usage and user satisfaction. HDFC: HDFC Bank is praised for its high-quality customer service, courteous staff, and robust digital banking platforms. These strengths make it a preferred choice for tech-savvy and service-oriented customers. While there are few significant drawbacks, HDFC can continue to enhance branch accessibility and further innovate its digital offerings. Satisfaction with Facilities: iv The survey reveals that ATM services and interest packages are the most satisfying facilities for SBI customers, indicating the importance of reliable, fundamental banking services. Conversely, HDFC customers find internet banking to be the most satisfying, underscoring the critical role of digital services in shaping customer experiences in private banks. Statistical Analysis: Regression Analysis: A regression analysis between service ratings and overall satisfaction demonstrates a positive correlation, indicating that higher service quality significantly boosts overall customer satisfaction. Correlation Analysis: The strong correlation between the use of digital banking services and overall satisfaction among HDFC customers highlights the increasing importance of digital capabilities in the banking sector. Conclusion: This study reveals clear distinctions in consumer preferences and satisfaction levels between public and private banks in India. While SBI is valued for its trustworthiness and traditional banking services, it needs to address service efficiency and enhance its digital offerings to meet modern customer expectations. In contrast, HDFC excels in customer service and digital banking, positioning itself as a leader in providing contemporary banking experiences.