Factors affecting the adoption to use digital banking of vietnam

BANKING ACADEMY BANKING FACULTY  GRADUTATION THESIS TOPIC FACTORS AFFECTING THE ADOPTION TO USE DIGITAL BANKING OF VIETNAM Student’s name: Class: Academic year Student’s ID: Supervisor: Bui Phuong Anh K20CLCB 2017 - 2021 20A4010008 Assoc Prof Dr Dao Minh Phuc Hanoi, May 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014126249801000000 BANKING ACADEMY BANKING FACULTY  GRADUTATION THESIS TOPIC FACTORS AFFECTING THE ADOPTION TO USE DIGITAL BANKING OF VIETNAM Student’s name: Class: Academic year Student’s ID: Supervisor: Bui Phuong Anh K20CLCB 2017 - 2021 20A4010008 Assoc Prof Dr Dao Minh Phuc Hanoi, May 2021 ASSUARANCE I declare that this is my own research The information relating to the data here which I used in my thesis is true and collected by myself The information and arguments belong to other authors which is not my own ideas or aggregated results are fully quoted in the references I take full responsibility if there is any fraud in this research topic Hanoi, May, 22nd, 2021 Student Bui Phuong Anh i ACKNOWLEDGEMENT During the time of researching and writing this thesis, I have received a lot of encouragement and enthusiastic help from agencies, organizations, individuals and my family They have always encouraged, facilitated, and supported me throughout the process of doing graduate thesis First of all, I would like to express my sincere thanks to the Board of Directors of Banking Academy in general and the teachers in the Banking Faculty of Banking Academy in particular for giving me the opportunity to study at the university and provide solid knowledge of expertise throughout the studying years At the same time, the teachers also gave me more motivation in studying and provided me with more relevant reference sources to perfect the best graduation thesis Secondly, I would like to express my deep gratitude to my supervisor – Mr Assoc Prof Dr Dao Minh Phuc has been very enthusiastic in guiding and supporting me during the process of doing this graduation thesis Graduation thesis was done in nearly months This is my first time doing this thesis, so this research has many limitations Therefore, it is inevitable that there will be shortcomings, I look forward to receiving your valuable comments so that I can improve my work and gain more knowledge in this field Thank you sincerely! Hanoi, May, 22nd, 2021 Student Bui Phuong Anh ii TABLE OF CONTENTS ASSUARANCE i ACKNOWLEDGEMENT ii LIST OF ABBREVIATIONS v LIST OF TABLES vi LIST OF FIGURES vii ABSTRACT CHAPTER ONE: INTRODUCTION AND LITERATURE REVIEW 1.1 Introduction 1.2 Literature review 1.2.1 Literature review about digital banking 1.2.2 Literature review about factors affecting the customers’ adoption 1.3 Gap, research objectives and research questions 14 1.3.1 Gap of the previous researches 14 1.3.2 Research objectives 15 1.3.3 Research questions 16 CHAPTER TWO: RESEARCH METHODOLOGY AND DATA 17 2.1 Research method 17 2.1.1 Research approach and design 17 2.1.2 Data source 17 2.1.3 Data collection method 18 2.1.4 Form of questionnaire 18 2.2 Sample data 23 2.2.1 Descriptive data 23 2.2.2 Data analysis 29 2.3 Research Hypotheses 30 CHAPTER THREE: RESEARCH RESULTS AND DISCUSSION 34 3.1 Research results 34 3.1.1 Reliability 34 3.1.2 Results of exploratory factor analysis (EFA) 35 3.1.3 Result of Confirmatory factor analysis (CFA) 38 3.1.4 Result of Structural Equation Modeling 42 3.1.5 Result of Multivariate regression analysis 44 iii 3.2 Testing hypotheses 46 3.3 Discussion 47 CHAPTER FOUR: SITUATION AND RECOMMENDATION FOR VIETNAM 51 4.1 Situation in Vietnam 51 4.1.1 Legal Policy 51 4.1.2 Technology systems 51 4.1.3 General situation of using non – cash payment in Vietnam 52 4.1.4 General situation of using digital banking in Vietnam 53 4.2 Recommendation 59 4.2.1 For the Vietnamese government 60 4.2.2 For the State Bank of Vietnam 61 4.2.2 For the commercial banks 62 CONCLUSION 65 REFERENCES 66 APPENDIX 74 Appendix 1: Reliability Statistics 74 Perceived ease of use 74 Perceived usefulness 74 Perceived risk 74 Trust 75 Attitude towards use and intention to use 75 Appendix 2: CFA analysis 76 Appendix 3: Structural Equation Modeling analysis 76 Appendix 4: Pearson Correlations 77 Appendix 5: The banking features of the service the customers use 78 iv LIST OF ABBREVIATIONS ABBREVATION FULL NAME ACB Asia Commercial Joint Stock Bank ADT Acceptance to use ATM Automated teller machine ATTINT Attitude towards use and intention to use CDM Cash Deposit Machine CFA Confirmatory Factor Analysis E - banking Electronic banking EFA Exploratory Factor Analysis eKYC Electronic Know Your Customer GDP Gross Domestic Product MB Bank Military Commercial Joint Stock Bank OPBA Opening Banking PE Perceived Ease of use PU Perceived Usefulness PR Perceived Risk QR Quick Response SBV State Bank of Vietnam SEM Structure equation model T Trust TAM Technology Acceptance Model TCB Techcombank - Vietnam Technology and Commercial Joint Stock Bank TP Bank Tien Phong Commercial Joint Stock Bank TRA Theory of Reasoned Action v LIST OF TABLES TABLE PAGE Table 2.1: Questionnaire form 18 Table 2.2: Forecast effect of research hypotheses 32 Table 3.1: Overview of Cronbach Alpha 35 Table 3.2: KMO and Bartlett’s Test 35 Table 3.3: Total Variance explained 36 Table 3.4: Pattern Matrix 37 Table 3.5: Standardized Regression Weights 39 Table 3.6: Composite Reliability 40 Table 3.7: Average Variance Extracted 40 Table 3.8: Comparation of Maximum Shared Variance and Average Variance Extracted Table 3.9: Comparation of Square Root of AVE and Inter – Construct Correlations 41 41 Table 3.10: Regression Weights of SEM 43 Table 3.11: Standardized Regression Weights of SEM 43 Table 3.12: Squared Multiple Correlations of SEM 44 Table 3.13: Model summary and ANOVA of linear regression 45 Table 3.14: Coefficients ‘s result 45 Table 3.15: Result of Testing hypotheses 46 Table 4.1: The decisive factor for customers to use digital banking services vi 58 LIST OF FIGURES FIGURES PAGE Figure 1.1: Grow rate of GDP in Vietnam from 2017 to Q1/2021 Figure 1.2: TAM model 10 Figure 1.3: Research model framework for the customers adoption to use digital banking of Vietnam 11 Figure 2.1: Distribution of Gender 24 Figure 2.2: The respondents about age group 25 Figure 2.3: Respondents’ occupation of research 26 Figure 2.4: Respondents’ fields of operation 26 Figure 2.5: Distribution of respondents’ income Unit: VND million 27 Figure 2.6: Respondents’ time to use digital banking services Unit: Year 28 Figure 2.7: Respondent's number of digital banking services 29 Figure 2.8: Research model and hypotheses 32 Figure 3.1: Research of Structural Equation Modeling framework 42 Figure 4.1: The banking features of the Internet banking service which customers use Figure 4.2: The banking features of the Mobile banking service which customers use Figure 4.3: Accessing the E – commerce platform in Q4/ 2020 of Vietnam vii 56 57 58 ABSTRACT Technological development has improved people's lives for the better and helped socio-economic growth strongly The fourth industrial revolution has marked the birth of fintech companies, information technology companies with the concepts of artificial intelligence, big data, cloud computing Especially when combining technology with products in the banking industry is an even bigger step The birth of digital banking products is a milestone This is a measure to promote and ensure continuity in online payment and transactions on the basis of products and services available in the bank Currently, the speed of development of digital banking services is taking place rapidly, people have begun to change their habits of using non-cash payments instead of cash Specifically, the proportion of ATM transactions for cash withdrawal will decrease gradually in 2019, specifically decreasing from 62% in 2018 to 42% in 2019 (Quang Tuan, 2020) This trend was even stronger when the COVID 19 pandemic occurred and social gap was implemented as directed by the Government People's lives are still guaranteed, shopping, consumption and payment needs are still carried out quickly and promptly Facing the strong development of digital banking services in Vietnam, how should banks develop their products and services to attract more customers to use their banking services? I this research to discover the factors that make customers accept to use of digital banking services in Vietnam There are 150 clients selected, mainly millennials and generation X, working in the Banking and Finance sector in Hanoi to participate in this survey With the achieved results, the Government and the State Bank of Vietnam should continue to improve legal corridors, promote digital technology policies and create conditions for the bank's own digital banking products and services Commercial banks should actively implement programs to attract customers and improve service quality to enhance customer experience Since then, digital banking has been accepted and used more widely in Vietnam