The determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in vietnam

BANKING ACADEMY OF VIETNAM ADVANCED PROGRAM FACULTY OF BANKING - - GRADUATION THESIS Topic: The determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam Student: Vu Thai Hoang Student ID: 20A4010247 Class: K20CLCB Supervisor: Assoc Prof Ph.D Nguyen Thuy Duong Hanoi, 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014129059461000000 ABSTRACT The entire financial sector has been transformed by digital transformation, making it more transparent and competitive while improving quality and effectiveness Several commercial banks in Vietnam are now focusing on technology-driven, e-banking services However, the definition of digital banking in Vietnam is relatively recent, as the legal structure for digital banking in Vietnam is being finalized, along with relatively large financial and capital investment by domestic banks in this sector In Vietnam, few longitudinal research has been conducted to explore the factors that influence an individual's intention to use digital banking services (DBS) As a result, there is an increasing need to recognise the relevant determinants influencing customers' intentions to use digital banking in the Vietnamese context The technology acceptance model (TAM), a widely used and empirically accepted model of information technology adoption, was used in this thesis To answer the study questions and objectives, a qualitative research methodology was used, with an online survey using a convenience sampling method that gathered data from 159 participants This study was able to perform deep analyses such as demographics, reliability, Exploratory Factor Analysis, and regression to gain deep insights The findings show that four determinants, namely Perceived Ease of Use, perceived Usefulness, Perceived Credibility, perceived mobility, Perceived Risk, and Social Influence, have a major and positive impact on intention to use digital banking, while perceived risk and social effect have a minor effect The empirical findings not only added to ongoing studies on banking innovation, but also aided policymakers, bank supervisors, and bank managers in developing and enhancing customers' recognition and intention to use modern banking services i ACKNOWLEDGEMENT During the course of studying and training at Banking Academy, I would like to sincerely thank you for receiving the help and attention of the Banking faculty in particular and the entire school teachers in general with all friends and relatives In particular, to complete the research and implementation of this thesis, I would like to express my sincere and profound thanks to Assoc Prof Ph.D Nguyen Thuy Duong enthusiastically guides and instructs me throughout the research process Thanks also to the organizations, individuals and businesses for sharing information and providing useful materials to help me complete the thesis For the first time in the implementation of the essay, with practical experience not yet deep and still confused Therefore, the essay cannot avoid its shortcomings Through this, I look forward to receiving comments and contributions from the teachers to improve myself Thank you sincerely! Hanoi, day 20 month 05 year 2021 Student Vu Hoang ii Thai LIST OF ACRONYMS DBS Digital banking services PU Perceived Usefulness PEU Perceived Ease of Use PR Perceived Risk PC Perceived Credibility SI Social Influence INT Intention To Use TAM Technology Acceptance Model TRA Theory of Reasoned Action TPB Theory of Planned Behavior UTAUT Unified Theory of Acceptance and Use of Technology EFA Exploratory Factor Analysis PCA Principal Component Analysis iii LIST OF TABLES Figure The Theory of Reasoned Action Figure The Theory of Planned Behaviour Figure Technology Acceptance Model Figure Technology Acceptance Model Figure Technology Acceptance Model Figure Unified Theory of Acceptance and Use of Technology Figure Thesis model Figure Research process Figure Digital banking channnels Figure 10 Digital banking services Table List of determinants and their mechanisim Table Section in questionnaire survey Table Demographic characteristics Table Descriptive statistics Table Cronbach’s Alpha findings Table Factor Loading Standard Value Table EFA findings for independent determinants Table EFA findings for dependent determinants Table The correlation coefficient matrix Table 10 Multivariate regression findings Table 11 The effect of the determinants on the Intention to use iv TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENT ii LIST OF ACRONYMS iii LIST OF TABLES iv INTRODUCTION CHAPTER 1: LITERATURE REVIEW AND THEORETICAL BACKGROUND 1.1 The review of previous studies 1.2 The literature review on digital banking and customers’ intention to use 1.2.1 Key terms 1.2.2 Characteristics of Digital Banking Channels 11 1.2.3 Digital Banking Uptake among Banks and Customers 12 1.3 Research Theory 14 1.4 Research model and hypotheses about determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam 19 1.4.1 Research model 19 1.4.2 Hypotheses about determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam 21 CHAPTER 2: RESEARCH DATA AND METHODOLOGY 24 2.1 Research methodology 24 2.2 Research process .25 2.2.1 Overview of research process 25 2.2.2 Detailed description of research process 26 CHAPTER 3: FINDINGS AND DISCUSSION 32 3.1 Findings 32 3.1.1 Demographics finding 32 3.1.2 Descriptive statisitics 34 3.1.4 Exploratory Factor Analysis .37 3.1.5 Correlation analysis 43 v 3.1.6 Hypothesis testing findings .45 3.2 Discussion 48 CHAPTER 4: RECOMMENDATIONS 50 CONCLUSION 53 REFERENCE 55 vi INTRODUCTION 1.1 Background of the research For the last two decades, digital banking has been a heated subject There is an increasing body of literature that recognizes the significance of the rapid technical advances that are occurring all over the world, and digital is a modern buzzword in the banking industry, with every bank pushing toward digitalisation in order to deliver better goods and services (Chau & Lai, 2003) Globally, most banks are expanding their presence by investing heavily in digital online ventures in order to retain a competitive advantage by offering a wider variety of goods and services The exponential technical advances in artificial intelligence (AI), robot processes, Big Data, Blockchain ,3D printing are often referred to as the 4th industrial revolution (Central Bank of Sri Lanka Annual Report, 2018) This technology has emerged as an influential medium that affects every part of our lives As a result, online distribution has become a very critical medium, and the finance market has become more dynamic over the last two decades Most importantly, it has transformed the variety and efficiency of goods and services (Munyoki, 2011) Digital transformation has transformed the entire financial structure to make banking services open, competitive and efficient (Martins, Oliveira & Popovič, 2014) It has considerable advantages and consumers demand faster and safer access to banks Technologies such as Artificial Intelligence (AI) and blockchain create advantages that increase client personalization, generate efficiency, mitigate fraud and generate improved product support recommendations The advancement of big data analytics complements all of this In fact, mobile phones and smartwatches have modified conventional methods of operation and offered faster access to banking Modern customers chose not only between direct and indirect networks, but also between various direct channel types (Ennew, Jo Black, Lockett, McKaechnie, & Winklhofer, 2002) Consumers are more likely to use various alternate platforms such as smartphone applications, POS, internet payment gates, e- wallets and automatic plate machines than to enter the bank using traditional channels In Vietnam, DBS has become an unavoidable growth pattern dependent on information technology, which is desirable in an age of global economic integration Because of the ease, precision, and speed of transfers, DBS provides significant advantages to consumers, banks, and the economy Traditional retail platforms are being challenged by DBS The growth of physical transaction networks has been hampered by the bank's financial capacity, state regulator oversight, and the efficiency of modern transaction points Through using and integrating several delivery networks, DBS would be able to solve these limitations DBS reduces regulatory, distribution, and operational costs with the use of technology and conventional processes While there are a variety of commercial banks in Vietnam that are leading in digitalization, such as TIMO, TPBank's LiveBank, Vietcombank's Digibank However, developing digital banking systems at commercial banks remains a challenge due to several challenges and constraints The most important topic for commercial banks in developing DBS is the need to optimize consumer demands and increase customer loyalty in using DBS provided by banks As a result, determining steps to effectively deploy and grow DBS to satisfy the needs of customers while also assisting commercial banks in Vietnam in asserting their status and brand identity remains a challenge The problem has been and continues to be raised urgently For the reasons mentioned above, the author choose to research the topic: "The determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam” 1.3 Objectives of the thesis Firstly, learn the theoretical issues of digital technology, digital banking development trends and the transition to digital banking in vietnam countries around the world Second, analyze the current digital banking situation in Vietnam and study the customer's intention to use DBS based on the SPSS model, thereby assessing the determinants affecting the customer's intention to use Third, offer solutions, recommendations and proposals to commercial banks in Vietnam towards improving services as well as improving customer satisfaction in using digital banks in Vietnam 1.4 Research object and scope  Research object Study on the determinants that affect retail customers' intention to use digital banking services provided by commercial banks in Vietnam  Research scope In terms of space: The survey was created by a website named SurveyPlanet and carried out online In terms of time: The author conducted research and collected data from April 1, 2021 to May 1, 2020 1.5 Research methodology Collect secondary documents Information, documents, data collected by the author from books, newspapers, magazines specialized in Finance - Banking; Reports / documents, studies on electronic banking services, digital banking, and websites of the State Bank, other websites Investigation method The thesis uses the method of sampling survey through survey questionnaires Based on data collected from the survey questionnaire, the author will analyze the data with SPSS In addition, the thesis also uses statistical methods, synthesis and comparison to get more accurate conclusions about the research problem Data processing method + Check and clean the data + Data encryption + Create database in statistical software (SPSS) Methods of summary and analysis Using demographics and descriptive statistical methods expressed through data representation in the form of tables, graphs, calculating sample parameters to