Barriers to Mobile Internet Banking Adoption in Klang Valley, Malaysia: An Empirical Study, Study notes of Business Administration

Download Barriers to Mobile Internet Banking Adoption in Klang Valley, Malaysia: An Empirical Study and more Study notes Business Administration in PDF only on Docsity! E Business This Research Paper has identified some barriers to mobile internet banking service adoption in the Klang Valley of Malaysia. It is basically a study on all the banks present in the eight municipalities of Klang Valley of Malaysia. The study was carried out to study some of the main barriers that can exist while adopting to the mobile internet banking services BARRIERS TO MOBILE INTERNET BANKING SERVICE ADOPTION AN EMPIRICAL STUDY IN KLANG VALLEY OF MALAYSIA Docsity.com 2 TABLE OF CONTENTS CHAPTER 1 1.1 INTRODUCTION………………………………………………………………………………………………….………….. 3 1.2 MOBILE COMMERCE…………………………………………………………………………………………..…………. 3 1.2.1 ADVANTAGES OF MOBILE COMMERCE…………………………………………………..…..…………… 3 1.2.2 DISADVANTAGES OF MOBILE COMMERCE………………………………………………..………..……. 4 CHAPTER 2 2.1 BARRIERS TO MOBILE INTERNET BANKING…………………………………………………………………..... 4 2.2 DEFINING KEYWORDS…………………………………………………………………………………………………….. 5 2.2.1 BRICS AND CLICKS………………………………………………………………………………………………………… 5 2.2.3 TECHNOLOGY ACCEPTANCE MODEL (TAM)………………………………………………………………… 5 2.2.4 WIRELESS INTERNET FOR MOBILE DEVICES (WIMD)…………………………………………………… 5 2.2.5 TECHNOLOGY ACCEPTANCE MODEL FOR WIMD………………………………………………………… 6 CHAPTER 3 3.1 LITERATURE REVIEW……………………………………………………………………………………………………… 6 CHAPTER 4 4.1 OBJECTIVES OF STUDY………………………………………………………………………………………………….. 9 4.2 METHODOLOGY……………………………………………………………………………………………………….….. 9 4.3 RESULTS AND FINDINGS……………………………………………..………………………………………….……. 10 CHAPTER 5 5.1 CONCLUSION………………………………………………………………………………………………………………. 11 Docsity.com 5 2.2 Keywords Defined: There are lots of terminologies been used in the research paper. I will briefly describe them here. 2.2.1 Bricks and Clicks: Bricks and clicks refer to a business which has a physical location and also an online presence. Bricks and clicks business model is very useful and has many advantages like customers can have a store and also selling the products and services over the web7. 2.2.2 Technology Acceptance Model (TAM): The technology acceptance model specifies the causal relationships between system design features, perceived usefulness, perceived ease of use, attitude toward using, and actual usage behaviour. Overall, the TAM provides an informative representation of the mechanisms by which design choices influence user acceptance, and should therefore be helpful in applied contexts for forecasting and evaluating user acceptance of information technology8. Figure 1: Technology Acceptance Model9 2.2.3 Wireless Internet via Mobile Devices: Wireless internet via mobile devices (WIMD) has led the world into another spectrum of communication and conducting day to day business and life activities. Wireless internet is defined as the internet which is not connected by means of cables. 7 External variables Perceived usefulness Perceived ease of use Behavioural intention Actual system use Docsity.com 6 2.2.4 Technology Acceptance Model for WIMD: Lu et al developed a technology acceptance model for wireless internet via mobile devices. According to this TAM model for wireless internet, individual differences, technology complexity, facilitating conditions, social influences and wireless trust environment determines the user perceived short and long term usefulness and the ease of using WIMD. That in turn determines the user intention and the willingness to adopt WIMD10. Figure 2: Technology Acceptance Model for WIMD11 Chapter 3 3.1 Related Literature Review: Banking is an important field for everyone in this present era. Whether you are a consumer of the banking services or you are the service provider yourself. Mobile banking is the most emerging technology that is being used by lots of banks all over the world. This aspect is mostly popular in most of the countries where most of the population is unbanked. For example Pakistan has launched a mobile Docsity.com 7 banking solution in coordination with Tameer Bank, under the label Easy Paisa, which was begun in the fourth quarter of 2009. This positive shift in perception can be traced back to mainly following factors (Tiwari et al, 2006): 1) The penetration of the society by mobile phones has reached an all-time high. 2) The integration of world economies is leading to more mobility so that availability of mobile services is no more a luxury but a necessity for many. 3) The younger generations of the society seem to be fascinated by modern data and telecommunication services. Table 1 show the percentage of increase in mobile banking usage from 2010 to 2011 in selected countries 12 . Percentage increase in mobile Banking usage from 2010 to 2011 Country Percentage of Consumers Using in Increase 2010 2011 China 10 % 25 % 150 % Brazil 10 % 21 % 110 % Kenya 6 % 18 % 200 % USA 11 % 22 % 100 % Table 1: Showing the increase in mobile banking usage from 2010 to 201113 The perceived ease of use and usefulness cannot explain the behavioral intentions towards mobile banking. It means that additional factors must be searched that can predict the acceptance of mobile banking. Rogers identified five characteristics of innovation that can be used to develop attitude towards innovation14. These are: Relative advantage: The degree to which an innovation is perceived as better than the idea it supersedes. The underlying principle is that the greater the perceived relative advantage of an innovation, the more raid its rate of adoption Compatibility: The degree to which an innovation is perceived as being consistent with the existing values, past experiences, and needs of potential adopters Docsity.com 10 useful in determining what are the barriers in adoption to mobile internet banking services. The data collected as a result of the survey was tabulated with the help of SPSS II version and to analyze the data different tools were used, such as, Cronbach’s Coefficient Alpha and Factor Analysis, Chi Square Test etc. 4.3 Results and Findings: The demographical data of the respondents showed that majority of the respondents were male (58.7%) and among them two third were unmarried. Another important factor was that 66 % of them were in between the age group of 30 years. 78.4 % of the respondents owned their own mobile phones and belonged to middle-income group18. Important information which they found as a result of the survey relating to Internet and banking was that almost 92.7 % of the respondents were familiar with Internet and 81.7% were aware of Internet banking. The astonishing figure was that 9.6% were currently using the mobile internet banking service and only 30.4 % have intentions to adopt mobile internet banking19. Analysis based on three major areas: banks, telecommunication equipment and the ISP are stated below20. 1. Almost 67.1 % of the respondents perceive that the ease to access relevant information is the most important feature. 2. 69.9 % of the total respondents think that complete range of financial transactions is also important which means that banks who are providing with their transaction on mobile internet should provide complete range of services on the mobile internet banking. 3. Value added services such as bill payments were perceived to be important by only 46 % and another group of respondents constituting of 37.9% marked it as the least important aspect. 4. The level of security in mobile devices is an important issue that has been in huge debate and by the research it is clear that still majority of people believe that this is one of the most important thing which acts are a barrier to adopt mobile internet banking. 5. 59 % of the respondents believe that the cost of mobile phone is very expensive and hence it acts as a barrier to adopt the service. 6. The display screen size is also an issue. 64 % of the respondents believe that it’s a barrier but still half of them are not sure whether they will adopt mobile internet banking service or not. Docsity.com 11 7. Almost 70 % of the respondents think that the level of security while conducting transactions through mobile phones are unsatisfactory. Only a small amount from this 19.3 % is willing to adapt to the mobile internet banking service. 8. Cost of subscription is also very high and a factor that is acting as a barrier in adopting the mobile internet banking services. More than 50 % consider this to be very high. 9. 54.9 % of the respondents believe that the connection speed is too low in mobile internet banking. Chapter 5 5.1 Conclusion: This paper has been written way back in 2004 and at that time these barriers were more than enough to discourage consumers to adopt the mobile internet banking services. But as of today the world has changed. If you talk about mobile phone, there are android phones everywhere. New technologies have been entering into the market every day and the globalization has also increased new ideas and technologies to travel throughout the world. Today is the world of 3G and 4G. Even in Malaysia the percentage usage of 3G has increased to 15 % in 2008 to just 1 % in 2006 and is projected to rise to 35 % in 2010 and 50 % in 201121. A research reveals that 11 % of internet users access internet via mobile phones. This shows that the use of internet via mobile phones is increasing in Malaysia. If you look around in the whole world the mobile banking is on the rise and approximately 150 million people use banking through their mobiles. And more than 50 % of the users are in Asia22. From the World Bank data we can see that the number of mobile cellular subscriptions in Malaysia has increased from 86 percent to 119 percent from the years 2007 to 2010. From this we can say that the internet banking is also on the rise. There are lots on national and international banks offering mobile internet banking in Malaysia. From my point of view I think that there are some barriers that exist while you are adopting to mobile internet banking like service quality, speed of internet, security and the cost of subscription along with the cost of the mobile phone, but in this present time of technology and innovation, mobile internet banking is becoming a necessity for those who are somehow involved with the banks. Sooner or later I would not say that all the barriers would be eliminated but there would be much lesser barriers with the advent of technology and those who will be there will be ignored when compared to the advantages it will be providing. One more thing that I would like to add to it is that if someone has bad perception about this mobile internet banking, then no one can change their thinking and here it is more of a psychological barrier rather than any technological or adoption barrier. Docsity.com 12 Bibliography: 1. Infogile Technologies, Mobile Banking- The Future, August 2007. 2. Chavidi, Mulabagula and Suleep, Barriers to Mobile Internet and Service Adoption: An Empirical Study in Klang Valley of Malaysia, The Internet Business Review, October 2004. 3. Michael Wolfe eHow Contributor from . 4. Davis, F. D Perceived Usefulness, Perceived Ease of Use and User Acceptance of Information Technology, MIS Quarterly, 1989 5. June Lu, Chun-Sheng Yu, Chang Liu, James E. Yao, Technology Acceptance Model for Wireless Internet, Internet Research, 2003 6. Dr. Hamza Salim Kharim, Dr. Younes Ellyan and Dr. Aymen, Factors Affecting Jordanian Consumer Adoption of Mobile Banking Services, International Journal of Business and Social Sciences, Volume No. 7. Rogers, E. Diffusion of Innovation, 4th edition, 1995, New York: NY The Free Press 8. Huam Hon Tat, Khalil Md. Nor, Predictors of Intention to Continue Using Internet Banking Services, An Empirical Study of Current Users, International Journal of Business and Information, Volume No. 3 No. 2, 2008 9. Norzaidi Mohd Daud, Noorly Ezalin Mohd Kassim, Wan Seri Rahayu, Wan Modh Said, Mona Maria Mohd Noor, Determining the Critical Success Factors of Mobile Banking Adoption in Malaysia, Australian Journal of Basic and Applied Sciences 10. Citibank Malaysia Launches Industry First Mobile Banking Platform from the website: Docsity.com