Adoption of Mobile Banking in Vietnamese urban areas
NATIONAL ECONOMICS UNIVERSITY NATIONAL ECONOMICS UNIVERSITYNATIONAL ECONOMICS UNIVERSITY NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL NEU BUSINESS SCHOOLNEU BUSINESS SCHOOL NEU BUSINESS SCHOOL NGUYEN THI HUONG AN adoption of Mobile Banking in Vietnamese urban areas Supervisor : Dr. LE THI BICH NGOC Hanoi - 2013 i ACKNOWLEDGEMENT I would like to thank Dr. Le Thi Bich Ngoc, my instructor, who has provided me very valued guidance throughout the course of my thesis. Her every specific advice and promptness, despite her busy schedule was instrumental in getting my research work organized in its final shape. I offer my sincere thanks to her. Any research of this nature cannot be successful without the active involvement of people who participate in the survey. I would like to thank all of respondents. My colleagues and friends in banking industry were very co-operative and provided me valuable inputs. I would like to express my gratitude to them. I would like to give my thanks to the family members who sustained my grumpiness and moods during the process of compiling this research work. In fact, they went beyond that and motivated me immensely throughout. Sincerethanksalsogo to the Business School of Hanoi National Economics University where I got a good chance to attend the very useful MBA course. Hanoi, September 2013. ii TABLE OF CONTENTS ACKNOWLEDGEMENT i TABLE OF CONTENTS ii ABRIVIATION iv LIST OF TABLES v LIST OF FIGURES vi EXECUTIVE SUMMARY 1 CHAPTER 1: INTRODUCTION 3 1.1. Rationale 3 1.2. R esearch objectives& research questions 4 1.3. The research targets are: 4 1.4. Research methodology 6 1.4.1. Data collection 6 1.4.2. Research process 6 1.5. Scope of study 6 1.6. Limitations of study 7 1.7. Thesis structure 7 CHAPTER 2: THEORETICAL BACKGROUND 9 2.1. Fundamentals of mobile banking 9 2.2. U taut model 13 2.3. The factors affecting adoption of mobile bankingin vietnam 16 2.3.1 Performance Expectation 16 2.3.2 Effort Expectance 17 2.3.3 Social influence 18 2.3.4 Perceived financial cost 18 2.3.5 Perceived credibility 19 iii CHAPTER 3: CURRENT SITUATIONS OF USING MOBILE BANKING IN VIETNAM 21 3.1. Global mobile banking trends 21 3.2. Current situations of using mobile banking in vietnam 22 CHAPTER 4: FINDINGS ABOUT VIETNAMESE CUSTOMERS’ ADOPTION OF MOBILE BANKING 29 4.1. Research methodology 29 4.1.1. Methodology 29 4.1.2. Research process 29 4.1.3. Sample selection 30 4.1.4. Questionnaire design 30 4.2. Data analysis 32 CHAPTER 5: RECOMMENDATIONS TO ATTRACT MORE VIETNAMESE CUSTOMERS USING MOBILE BANKING 40 5.1. Increase perceived usefulness 40 5.2. Promoting marketing and customers relationship 40 5.3. Increase the level of security 41 5.3.1. Risk based authentication 42 5.3.2. Mobile Application 42 5.3.3. One – time passwords 43 5.3.4. Biometric authentication 44 5.3.5. Educating people on how to protect their information 45 5.3.6. Digital signature 46 5.4. Increasing perceived ease of use for older people 47 5.5. Building policy 47 REFERENCES 49 iv ABRIVIATION DTPB The Decomposed Theory of Planned Behavior EE Effort Expectance FC Facilitating Conditions HTTP Hypertext Transfer Protocol IDG International Data Group IDT Diffusion of Innovation Theory IVR Interactive Voice Response MB Mobile Banking MM Motivational Model MPCU The Model of Personal Computer Utilization PC Perceived Credibility PDA Personal Digital Assistance PE Performance Expectance PFC Perceived Financial Cost RBA Risk – based Authentication SCT Social Cognitive Theory SI Social Influence SMS Short Message Service TAM Technology Acceptance Model TPB The Theory of Planned Behavior TRA The Theory of Reasoned Theory UTAUT Unified Theory of Acceptance and Use of Technology WAP Wireless Access Protocol v LIST OF TABLES Table 2.1: Summary of Research findings on factors affecting technology adoption 14 Table 4.1: Dimensions and factors affecting using of Mobile Banking in Vietnam 31 Table 4.2: Demographic profiles of respondents 32 Table 4.3: Mean score and standard deviation of survey on Mobile Banking 35 vi LIST OF FIGURES Figure 2.1: The Unified Theory of Acceptance and Use of Technology (UTAUT) 16 Figure 2.2: The proposed research structure 20 Figure 4.1: How survey customers interact with banks 34 vii 1 EXECUTIVE SUMMARY Fast advances in the wireless technology and the intensive penetration of cell phones have motivated banks to spend large budget on building Mobile Banking systems.In many countries, Mobile Banking has gained wide acceptance and Vietnam is no onlooker to this phenomena. Banks in Vietnam started embracing technology in a massive way in the 2000’s, led in particular by the new private banks and multinational banks. However, the adoption rate of Mobile Banking in Vietnamese urban areas is still underused than expected.Therefore, research to enrich current knowledge about what affects individuals to use Mobile Banking is required. Consequently, this study employs the Unified Theory of Acceptance and Use of Technology (UTAUT) to investigate what impacts people to adopt Mobile Banking.A research was carried out to see what factors affecting adoption of Mobile Banking in Vietnam. The data is organized using Likert seven – point scale to access each response of the participants. Quantitative methodology is used to analyze the collated numeric data. The questions are grouped and mapped to each of the identified factor groups. The average score for each issue has been worked out based on this grouping. Through sampling 309 respondents, this study empirically concluded that individual intention to adopt Mobile Banking was significantly influenced by performance expectancy, social influence, perceived credibility and perceived financial cost. On the other hand, effort expectancy was proved that it was not a significant factors that affecting adoption of Mobile Banking. Based on the finding result above, there are a number of recommendation that has been suggested to improve the quality of Mobile Banking service in Vietnam and in order to attract more customers to use the services. The bank should increase the perceived usefulness of Mobile Banking, promote marketing and 2 customer relationship, increase the level of securities by using risk based authentications, mobile application, one – time password, biometric authentication such as finger print or iris scan and educate people how to protect their own information or use digital signature. Then the bank should focus on increasing the perceived ease of use for old people and building policy to fulfill the quality of the Mobile Banking services for customers. [...]... areas in recent years • To study factors influencing on the customers’ adoption of using Mobile Banking in Vietnam • To recommend solutions for improve the number of customers using Mobile Banking in Vietnam Hence, the questions for this research would be: • What theories could be applied in study of Mobile Banking adoption? • How Mobile Banking is applied now in Vietnam? • What factors influencing the... synthesizes the theories on Mobile Banking, which had been studied all over the world Chapter 3: Current situation of using Mobile Banking in Vietnam The third chapter analyses the trends of using Mobile Banking all over the world and the actual situation of using Mobile Banking in Vietnam in the recent years Chapter 4: Findings about Vietnamese customers’ attitude toward using Mobile Banking The fourth chapter... that affecting the adoption of Mobile Banking in Vietnamese urban areas This study could be of special interest and value to the banking sector and other commercial sectors linked to banking The findings and recommendations to banks could help them to analyze and restructure their strategy to attract customers The banking industry can attract potential customers towards Mobile Banking by taking into account... chapter gives out the findings about Vietnamese customers’ attitude toward using Mobile Banking Chapter 5: Solutions to attract more Vietnamese customers using Mobile Banking This chapter suggests some solutions to attract more Vietnamese customers using Mobile Banking in the future 9 CHAPTER 2: THEORETICAL BACKGROUND 2.1 Fundamentals of mobile banking In the broadest sense, Mobile Banking can be considered... 1: INTRODUCTION 1.1 Rationale Mobile Banking is creating dramatic changes for the banking industry Mobile Banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA) Mobile Bankinghelps consumers in conducting fast and convenient financial transaction activities In. .. of Mobile Bankingin Vietnam and identifying the factors that influence its adoption The structure of this study was to empirically test the multiple factors identified with Performance Expectation, Effort Expectance, Social Influence, Perceived Financial Cost, Perceived Credibility of Mobile Bankingthat affect the customer’s adoption ofMobile Banking in Vietnamese urban area However, any research inevitably... customers’ adoption of using Mobile Banking in Vietnam? 5 • What could be done to increase the number of Vietnamese customers using Mobile Banking? 6 1.4 Research methodology 1.4.1 Data collection The research both use secondary data and primary data to figure out the factors that affectingMobile Banking adoption in Vietnam ∗ Secondary data Secondary data is pre – existing data collected in the past... development, facilitating open extensive trade and economic cooperation with other regions in the world Vietnamese commercial banks realize the huge advantages of Mobile Banking for them as well as the customers, they had spent large budget on building Mobile Banking systems, but the adoption rate of Mobile Banking is still underused than expected Although in recent year, the number of Mobile Banking users has... messaging, browsing, and applications 10 There are a lot of benefits through adoption of Mobile Banking for the banks and their customers The business benefit of Mobile Banking for the banks is to generate additional revenue, improve customer service, extend marketing and increase cost savings However, the biggest advantage is eliminating the need for physical branch offices results in the reduction of. .. through adoption of Mobile Banking for the banks also The business benefit of Mobile Banking for the banks is to generate additional revenue, improve customer service, extend marketing and increase cost savings However, the biggest advantage is eliminating the need for physical branch offices results in the reduction of overhead expenses Banks can then use the resulting savings to reduce their loan interest . in Mobile Banking. • To assess the current situation of using Mobile Banking in Vietnamese urban areas in recent years. • To study factors influencing on the customers’ adoption of using Mobile. could be applied in study of Mobile Banking adoption? • How Mobile Banking is applied now in Vietnam? • What factors influencing the customers’ adoption of using Mobile Banking in Vietnam? . SITUATIONS OF USING MOBILE BANKING IN VIETNAM 21 3.1. Global mobile banking trends 21 3.2. Current situations of using mobile banking in vietnam 22 CHAPTER 4: FINDINGS ABOUT VIETNAMESE