Adopition of e-banking in Vietnam

0 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIET NAM International School of Business Vo Ngoc Anh Thy ADOPTION OF E-BANKING IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIET NAM International School of Business Vo Ngoc Anh Thy ADOPTION OF E-BANKING IN VIETNAM MASTER OF BUSINESS (Honours) Supervisor: Dr Ngo Viet Liem Ho Chi Minh City – Year 2014 Abstract E-banking is one of the most powerful tools for making banking transactions This study examines the relationship between attributes of E-banking website (e.g perceived security, perceived privacy, perceived usefulness and perceived ease of use) and Trust in E-banking This study also examines the extent to which trust in E-banking influence perceived value and company image Data is collected via a survey of customers of Joint Stock Commercial Bank For Foreign Trade of Vietnam (Vietcombank) Bien Hoa Branch and Nhon Trach Branch, which are located in Dong Nai Province, Southeast Vietnam The findings of this study show that among the four attributes of E-banking, perceived privacy, perceived usefulness and perceived ease of use had a certain impact on trust in Ebanking while perceived security did not have such impact This study also found the positive relationship not only between trust in E-banking and perceived value but also between perceived value and company image Keywords: trust, E-banking, online banking, Internet banking TABLE OF CONTENTS  CHAPTER 1: INTRODUCTION 1.1 Background of the research 1.2 Research problem 1.3 Research questions 1.4 Scope of the research 1.5 Structure of the research  CHAPTER 2: LITERATURE REVIEW AND THEORETICAL FRAMEWORK 2.1 Attributes of E-banking Website 2.2 Trust in E-banking 2.3 Perceived Value 2.4 Company Image  CHAPTER 3: RESEARCH METHODOLOGY 3.1 Research design 3.2 Measurement instruments and questionnaires construction 3.3 Sampling and data collection 3.4 Data analysis method  CHAPTER 4: ANALYSIS AND RESULT 4.1 Descriptive analysis 4.2 Measurement validation 4.3 Hypothesis testing  CHAPTER 5: DISCUSSION, IMPLICATION AND LIMITATION LIST OF FIGURES Figure 1: Proposed research model Figure 2: Conceptual framework and data process Figure 3: Model with t-value in hypothesis testing Figure 4: Model with β and R square in hypothesis testing LIST OF TABLES Table 1: Trust in previous researches Table 2: Measurements scale of Attributes of E-banking Table 3: Measurements scale of Trust in E-banking Table 4: Measurements scale of Perceived value Table 5: Measurements scale of Company image Table 6: Type of customers Table 7: Typical services customers using Table 8: Period of time customers started to use the service Table 9: Frequency that customers using E-banking and communicating with bank officers Table 10: Percentage of customers based on age and gender Table 11: Demographic characteristic of the sample Table 12: Cronbach’s alpha for each construct Table 13: Composite reliability for each construct Table 14: Average variance extracted values for all constructs Table 15: Outer loadings of manifest variables Table 16: Construct-Level Measurement Statistics and Correlation Matrix Table 17: Path coefficients of the constructs CHAPTER Introduction 1.1 Background of the research Internet banking is the most recent delivery channel introduced to the financial service industry (Saythe, 1999) Kenneth et al (2010, p 27) state that “online banking, also commonly known as internet banking or e-banking, has experienced phenomenal growth in recent years” Along with the trend of using technology in commerce, during the past two decades, there has been a shift from using traditional banking services to using online banking services, so that, customers have more time and more convenience in meeting their needs to use banking services According to Pew Research Center (2013), 61 percent of all Internet users have used online banking, compared to 58 percent and 18 percent in 2011 (Huffingtonpost, 2014) In another research from eMarketer, almost 73 million adult consumers within the United States engaged in online banking in 2006, and forecasts annual growth rates of between 6.5% and 9.5% through 2010 (eMarketer, 2007) However, many studies indicate that distrust in online banking is not reducing and remains of concern to customers (Johnson, 2007) Customers use online banking because of perceived usefulness and perceived ease of use These include not being waiting in line at the branch, not being messy and fed up with paper statements taking up space, and accessing to their account 24/7 Despite the increasing number of customers using online banking, many of them have the fears of not being warranted about their security and privacy (Huffingtonpost 2014) Kersner (2005) states that 68% of banking customers who are not interested in E-banking cite privacy concerns as their main reason The above factors might influence the customers’ trust in E-banking Consumers concern about the positive benefits of E-banking adoption These benefits include the cost reductions by shifting services online, the extra value that consumers receive from online customization, and the improved image that banks obtained from good values they provide for their customers (Johnson, 2007) Citibank.com reports that their E-banking customers consume a large number of the bank’s products and are the bank get more than 40% profitable than their offline transactions (Schneider, 2004) 1.2 Research problem Not only in developed economies but also in developing ones such as Vietnam, online services has been the newly-targeting industry through decades Much as the customers’ demand, E-commerce has not satisfied them yet, because of distrust, Ebanking is one of the problems In this context, it is worthy of note that understanding the effects of E-banking attributes on trust in E-banking can help to carry out which factor influences trust in E-banking the most, and which one pushes the least Moreover, keep on examining the relationship between trust in E-banking, perceived value and company image can assist the banking leaders in the way they operate their business, therefore strengthen their business system and provide their customers with the best services, especially in E-banking 1.3 Research questions The purpose of this study is to develop and empirically validate a theoretical framework that investigates the interrelationships between attributes of E-banking website, trust in E-banking, perceived value, and company image Specifically, this study attempts to answer the following research questions To what extent, attributes of e-banking website (e.g security, privacy, usefulness, and ease of use) influence trust in e-banking? To what extent does trust in e-banking enhance perceived value? To what extent does perceived value affect company image? 1.4 Scope of the research This study uses the data conducted from a survey in Vietcombank Bien Hoa and Vietcombank Nhon Trach, which are located in Dong Nai Province, Southeast of Vietnam The questionnaires are designed to the customers of these banks (especially those who already used Vietcombank E-banking), estimated that 200 customers would conduct this survey The study applied by multimethod approach to data collection, via email, phone and directly right after their transaction 1.5 Structure of the research The remaining of the thesis is organized as followed Chapter presents the background, research problem, research questions, and research objectives of the study It also briefly discusses the scope and the method of data collection Chapter reviews the literature upon which a theoretical framework is developed in Chapter Drawing on prior research related to the adoption of E-banking, this chapter crafts the research model 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time is well served There are no right or wrong answers All we are interested in is a number that best shows your perceptions of mentioned matters Please be assured your responses are completely anonymous and confidential, and will only be aggregated with all other responses to form an overall picture A GENERAL QUESTIONS GQ1 – What type of customers are you in dealing with Bank X: Personal Corporate Both GQ2 – What type of services you typical use at Bank X: GQ3 – How long have you been a customer of Bank X: In thinking about your use of this service… GQ4 how many times in the past six (6) months have you used the e-banking services of Bank X? GQ5 how many times in the past six (6) months have you spoken with an employee of Bank X? B SURVEY CONTENT Not at all 1-3 times 4-6 times 7-9 times 10 or more times 4 57 Please indicate the extent of your agreement or disagreement with each of the following statements Choosing a [1] means that you strongly disagree with the statement and choosing a [7] means that you strongly agree You may choose any of the numbers in between that shows how strong your opinion is Strongly disagree Perceived security (PS) Strongly agree PS1 My bank ascertains my identity before sending any messages to me PS2 My bank ascertains my identity before processing any transactions received from me PS3 My bank uses security controls confidentiality of transactions the PS4 My bank implements security measures to protect its online customer’s information PS5 My bank devotes time and effort to prevent unauthorized access to my information for Perceived privacy (PP) PP1 I trust in the ability of e-banking to protect my privacy PP2 My main bank’s web site never sells my personal information in their computer databases to other companies PP3 My main bank’s web site will not use my personal information for any purpose unless I authorize it to so PP4 I am convinced that my main bank’s web site respects the privacy of the transactions 58 Perceived usefulness (PU) PU1 The content of my main bank’s web site is useful to me PU2 My main bank’s web site is useful in carrying out transactions PU3 Using e-banking enhances my effectiveness of utilizing banking services PU4 Using e-banking enables me to utilize banking services more quickly PU5 Using e-banking for my banking services increases my productivity PU6 I have generally received enough information on E-banking PU7 Overall, e-banking is useful for me Perceived ease of use (PEU) PEU1 The website takes long time to load PEU2 The display pages within the website are easy to read PEU3 The text on the website is easy to read PEU4 The website labels are easy to understand PEU5 Learning to operate the website is easy for me PEU6 It would be easy for me to become skillful at using the website PEU7 I find the website easy to use 7 Trust in E-banking (TE) TE1 E-banking is trustworthy 59 TE2 I trust in the benefits of e-banking TE3 I feel safe in my transactions with the websites TE4 I trust the website to keep my personal information safe TE5 I trust the website to administrators will not misuse my personal information Perceived value (PV) PV1 What I get from Bank X is worth the costs PV2 All things considered (price, time, and effort), bank X is a good buy in the loan service banking PV3 Compared with other banks, bank X is good value for the money PV4 When I use bank X, I feel I am getting my money’s worth Thinking about Bank X’s reputation, as a customer, how would you rate this bank on the following statements Please circle a number for each statement that best reflects your views (where = poor and = excellent) Poor Excellent Company image (CI) CI1 Being involved with the community CI2 Being well managed CI3 Keeping you informed about what is happening with the bank CI4 Being a good corporate citizen CI5 Being successful C DEMOGRAPHIC INFORMATION Please answer the questions to help us to categorise the responses we get Your gender 60  Male  Female Your age  18 – 24 years old  25 – 34 years old  35 – 44 years old  45 – 54 years old  55 years old and above Your monthly income 