INVESTIGATING FACTORS IMPACTING ON INTENTION TO USE BANKING SERVICES IN RURAL AREAS AND SUBURBS OF HANOI45472

IN TERNATIONAL CONFERENCE ON - CIFBA 2020 INVESTIGATING FACTORS IMPACTING ON INTENTION TO USE BANKING SERVICES IN RURAL AREAS AND SUBURBS OF HANOI Nguyen Thi Hanh*, Nguyen Chu Du Trade Union University ABSTRACT This study aims to investigate factors affecting intention to use banking services in rural areas and suburbs of Hanoi The study serves as a basis for the Commercial Banks to accurately assess the demand and expectation of the customers on the supplied service products, from which suggest directions to help the Banks develop services suitable with rural areas The relationships in the model are analyzed with regression model Results of the study shows that usefulness, usability, trust, innovation, social impact, communication about services are the six factors having positive relationships with the intention to use Banks’ services of the customers Especially, customers’ trust and communication about the Banks’ services are the two factors having strongest effects on with the intention to use Banks’ services of the customers Keywords: Banking services in rural areas, using intention, regression model INTRODUCTION Attracting customers and expanding commercial banks' markets in enhancing competitiveness as well as coordinating with government programs to implement hunger eradication & poverty reduction for rural areas is an important strategy in each country (Nguyen Kim Anh et al., 2011) The empirical evidence from many studies shows that banking services in rural areas are one of the powerful means for the families there to access and increase business performance, escape poverty and develop their lives (Nguyen Kim Anh et al., 2011) To meet the requirements on economic development in such global economic * Corresponding author Email address: hanhtc9@gmail.com 404 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS integration of the country in general and of the rural areas and suburbs of Hanoi in particular, demands on Banking services are of more and more diverse quality and high standard requirement Thus, it is essential to investigate real performance situation of the Commercial Banks and study the factors affecting intention to accept and use Baking services in rural areas so that the Banks can have accurate evaluation of the demands and desires of the customers on the supplied service products and suggest solutions to develop banking services suitable with the customers in rural areas However, according to the authors' database, currently, there are very few studies conducted in the world and Vietnam on this topic Therefore, this study is conducted to help the Banks exactly identify the factors affecting the intention of using services of the customers in rural areas and suburbs of Hanoi, from which analyze and evaluate and selective apply solutions for other rural areas in Vietnam Specifically, the objectives of this study include: (i) Identify factors affecting the intention to use banking services of the customers in rural areas and suburbs of Hanoi (ii) Suggest solutions to help managers of the Banks develop strategies to promote the use of banking services in rural areas and suburbs of Hanoi THEORETICAL BASIS AND RESEARCH MODEL 2.1 Theoretical basis In the world, there are many researches on the intention of the customers in accepting and using the services provided by the organizations Consumers have rights to choose products with low cost, high quality and safe Barsh et al (2010) argued that it is increasingly important for the enterprises to have a better understanding of consumer intention to attract and retain consumers The models to assess the relationships between the intention to accept and use banking services were built and applied Fishbein & Ajzen (1975) analyzed consumer trends through consumer behavior Research by Engel & et al (1978) pointed out that consumer behavior is human thoughts and feelings during shopping and consumption That is an ongoing process that includes identifying needs, gathering information, reviewing options, deciding to purchase and giving assessments after purchasing Porter (1985) has argued that in order to gain competitive advantage, the businesses should create values for the customers in the market, meet customer needs and increase customer satisfaction Researchers have also demonstrated that motivation have important effects on the formation of customer purchasing attitudes and behaviors Rogers (1995) built an Inovation Diffusion Theory model - IDT and identified four factors that affect the intention / acceptance to use of the customers, namely: innovation, communication channels, time, and social influence Fishbein & Ajzen (1975) with TRA - Theory of Reasoned Action argued that the influencing factors include (1) attitudes of consumers towards the conduct of behavior and (2) the Subjective standards of consumers TPB (Theory of Planned Behavior) was developed by Ajzen in 1991 with the addition of an element of cognitive behavior control Davis et al (1993) 405 IN TERNATIONAL CONFERENCE ON - CIFBA 2020 developed TAM -Technology Acceptance Model based on TRA argued that the elements perceiving usefulness, trust and usability affect the using and acceptance intention Over the recent decades, there have been many empirical studies on the intention to use products / services conducted in most areas of human life based on the basic theory mentioned above These studies have applied a model or integrated multiple models to assess the impact of the factors on intention of the customers in various fields (Pham et al, 2013) Although there have been a few researches on the factors affecting the intention to use banking services in rural areas around the world and in Vietnam, the above theories and empirical evidences in different areas will support the development of research models and assumptions in the context of rural areas, particularly rural areas and suburbs of Hanoi (sample data collected in this study) 2.2 Research models Through actual conditions in Vietnam as well as the theoretical basis of TRA, TPB, TAM, UTAUT models, Porter's research (1985); Kortler (1989) and related studies on the intention of acceptance and using services and products, the author studies the factors affecting the intention to accept and use banking services in rural areas and suburbs of Hanoi as follows: Awareness of usefulness is the subjective ability of users when using the services of a specific application system increases their productivity (Davis et al., 1989) Awareness of usability of the services is the feeling of the difficulty or ease of learning to use the organization's products and services provided, Davis and colleagues (1989) The studies by Davis (1989); Foon and Fah (2011); Featherman & Fuller (2003); Venkatesh and Zhang, (2010); Sripalawat and colleagues (2011); Dasgupta et al (2011) have demonstrated awareness of usability as a determinant influencing online banking service users TAM model by Davis and colleagues, research by Lee and colleagues (2001) on acceptance and use of electronic commerce; Yaghoubi and Bahmani (2010) on the acceptance and use of Internet Banking, Clegg et al (2010); Pham et al (2010) on the acceptance of E-Banking have also affirmed the important factor affecting the acceptance and use of services is the awareness of usability and awareness of the usefulness of the products and services Trust, defined by Chaudhuri and Holbrook (2001), Rauyreuen et al (2007), is a belief in a party's promise and fulfill its obligations in exchange relations Trust gives customers a sense of safety when the partners can meet their expectations The studies by Foon and Fah (2011), Laforet and Li (2005) research the security and confidential factors to assess risk perception and find that customer trust is the most important factor affecting the use of online banking services Researches by Amin et al (2008), according to the test, have concluded that customer trust significantly affects the intention of online banking users Social influence through the research by Venkatesh et al (2003) is the degree to which an individual perceives that important people and other people think that they 406 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS should use new products The studies by Venkatesh et al (2003), Kotler (2004); Venkatesh and Zhang (2010), Foon and Fah (2011), Sripalawat and colleagues, (2011) and Kotler's studies (2004) also have confirmed the influence of society on customer buying behavior Amin et al (2008), according to empirical research results, showed that the intention to use mobile phone services of people has been significantly affected by those around them; Singh et al (2010) found that individual decisions to accept mobile commerce services are affected by friends and family members; Puschel et al (2010); Riquelme and Rios (2010) and Sripalawat et al (2011), showed that social influence is a prominent influence affecting the intention to accept and use products and services Innovation, according to Steenkamp et al (1999,) is the tendency to buy new and preferability of product differences Consumer innovation is measured through the desire to find information about new products Researches by Manning et al (1995); Venkatraman (1990, 1991); Im et al (2003, 2007) innovation is a new and challenging preference in life The study by Cao Thi Thanh (2014) on the impact of some individual cultural factors on consumer acceptance of new products of the consumers in Hanoi inner city (study on personal electronic products) also confirms that the innovation has positive influences on consumer acceptance of products and services Service communication is a communication process to share knowledge, experiences and feelings about used products and services Schultz and Lauterborul (1993) define that mass media is every opportunity for readers, listeners, viewers to a media message Information of the media message is to disseminate information to individuals and organizations Communication and information from the Banks help the customers be aware of the benefits of products and services Being aware of the usability of the products will help increase the intention to use banking services Researches of Rogers (2003) acknowledge that communication is an essential element of the society to create understanding for the customers Through the mass media and personal communication, individuals can exchange ideas, knowledge and social values ​​about the innovation Researches on the influence of communication factors by Terro et al (2004); Rankin and Luther (2006) agree that the relationship between information, initial awareness affect customer innovation preferences The intention to accept and use banking services in rural areas is an incentive to take action, make decisions about whether or not to use banking services in the future Based on researches by David (1985); Venkatesh et al (2003); Foon and Fah (2011) along with studies on the intention to accept and use TRA, TPB, TAM, UTAUT model services; Foon and Fah (2011); Riquelme and Rios (2010); Venkatesh and Zhang, (2010); Dasgupta and colleagues (2011); as well as the theoretical background in the above section, the authors propose a research model on the factors affecting the intention to use banking services in rural areas and suburbs of Hanoi as follows: 407 IN TERNATIONAL CONFERENCE ON - CIFBA 2020 Usefulness Usability Social influences Intention to use banking services Innovation Trust Communic ation about services Picture Proposal research model RESEARCH METHODOLOGY 3.1 Scale in the model The research scales in the model include usefulness scale (HI) with questions based on research by Venkatesh et al (2003); Usability scale (DSD) with questions based on research by David et al (1993); Trust scale (TN) with questions based on research by Venkatesh et al (2003); Social influence scale (XH) with questions based on research by Venkatesh et al (2003); Innovation scale (7) with questions based on questions in the study by Agarwal & Prasad (1998), questions in the study of Manning & et al (1995) and additional questions from group discussions; Communication scale of banking services (DV) consists of 15 questions based on the content of 03 questions in the study by Terrolet al (2004) and 12 additional questions from group discussions; Scale of intention to use the service (YĐ) with questions, in which questions are based on David research (1985) In the study, the author uses Likert measurement with levels (1- 5) to measure and understand the level of agreement, including totally agree, agree, normal, disagree and strongly disagree 3.2 Data collection This study selected customers in the suburbs of Hanoi to conduct the analysis and evaluation of basic factors affecting the intention of using banking services in rural area and suburbs of Hanoi The study collected samples based on random access and questionnaire delivery to 350 customers doing transaction at the Banks with the help of bank officials at the banking transaction offices in rural area and suburbs of Hanoi, such as Quoc Oai, Thach That, Dong Anh, Soc Son After collecting, the questionnaires with coincident answers (those who choose only one level among the scale of 1-5, maybe because they don't have time or don't want to participate in the 408 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS survey) and blank questionnaires have been removed The valid questionnaires using for the survey was 92.3%, meeting the conditions of selecting the sample According to the survey results, among 323 respondents, 159 were male, accounting for 49.2% and 164 remaining women accounted for 50.8% There are 57.6% of respondents having graduated from colleges / universities (186 people); 3.7% of respondents having Master Degree (12 people); 38.7% remaining respondents are secondary graduates and high school graduates The average income of the sample is over million VND per month The sample with higher college / university education level compared to other rural areas is due to the condition that this area is close to Hanoi capital, the awareness of raising the level of education to access to the city's modern, advanced knowledge and skills are also stronger than other rural areas 3.3 Data processing method Data processing, information coding, data entry and data analysis were conducted with SPSS 19.0 statistical processing software The survey results were analyzed by Cronbach alpha coefficient to measure the reliability of the scale Exploratory factor analysis (EFA) to test the value of the scale results in the weights of observed variables so that the author can conduct a comparison and decide to keep or remove from the research Regression analysis is used to prove the hypotheses given RESEARCH RESULTS 4.1 Exploratory factor analysis (EFA) Variables are measured by Likert scale of levels Data is analyzed with SPSS software From 45 recommended variables, there are variables being removed from the scale due to low reliability coefficient EFA analysis helps to extract factors from 37 observed variables The elements are divided into groups of elements in the factor rotation matrix in accordance with the proposed model The results of EFA analysis are presented in Table KMO coefficient is 0.913 with statistical significance of 0.000 This result shows that the analysis of the exploratory elements of independent components is appropriate Total Variance Explained is 70.495%, explaining 70.495% of the variation of data Table Results of multivariate EFA analysis Extraction Method: Principal Axis Factoring Rotation: Promax with Kaiser Normalization Total Variance Explained: 70.495 * Accreditation Bartlett