Factors affecting behavioral intentions toward mobile banking usage: a study of banking customers in Ho Chi Minh City

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Khac Duy FACTORS AFFECTING BEHAVIORAL INTENTIONS TOWARD MOBILE BANKING USAGE: A STUDY OF BANKING CUSTOMERS IN HO CHI MINH CITY ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr Nguyen Thi Nguyet Que Ho Chi Minh City – Year 2012 [2] ACKNOWLEDGEMENT At the first of my thesis, I would like to thank all those people who made this thesis possible and an unforgettable experience for my studying Foremost, I would like to express my sincere gratitude to my supervisor, Dr Nguyen Thi Nguyet Que, for the continuous support of my MBUS study and research, for her patience, motivation, enthusiasm, and immense knowledge Her guidance helped me in all the time of research and writing of this thesis Besides my supervisor, I would like to thank the rest of my thesis committee: Prof Nguyen Dong Phong, Prof Nguyen Dinh Tho, and Dr Tran Ha Minh Quan, for their encouragement, insightful comments, and hard questions I thank my classmates in ISB MBUS 2010 encourage and support me complete this thesis Completing this work would have been all the most difficult were it not for the support and friendship provided by the members of University of Economics Ho Chi Minh City - International School of Business Last but not the least; I would like to thank my family I must express my gratitude to Nguyen Thi Hong Hiep, my wife, for her continued support and encouragement I also wish thank all those people who spent through their time and generous support made this thesis project a dream come true Ho Chi Minh City, December 18, 2012 NGUYEN KHAC DUY [3] ABSTRACT Mobile phones with banking technology are becoming more readily available in Vietnam Similarly, many financial institutions and mobile phone service providers are teaming up to provide several banking services to customers via the mobile phone However, the number of people who choose to adopt or use such technologies is still relatively low Therefore, there is a need to assess the acceptance of such technologies to establish factors that hinder or promote customer‟s intention to use mobile banking (MB) Technology Acceptance Model (TAM) and Theory of Planned Behaviour (TPB) are the base models in order to investigate the customers‟ intention to use mobile banking services in Ho Chi Minh City (HCMC) A questionnaire with five-point Likert scale is survey to 400 target respondents This research combines the variables (1) “perceived usefulness”, (2) “perceived ease of use”, (3) “attitude”, (4) “subjective norm”, and (5) “Perceived behavioral control” in a proposed model to reflect consumer‟s intention to use mobile banking Results indicate that perceived usefulness, perceived ease of use, subjective norm, and perceived behavioral control are significant with respect to the customer‟s intention to use mobile banking services In constrast with previous studies, attitude was not significant in explaining mobile banking adoption In summary, perceived behavioral control contributes the most in explaining the factor of intention to use mobile banking The results of the data analysis contributes to the body of knowledge by demonstrating that the above factors are critical in intention to use mobile banking in a developing country context The implications of the results form a good basis for providing practical recommendations to leaders of commercial banks, and directions for further work [4] TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT LIST OF FIGURES LIST OF TABLES CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Overview of electronic banking market in Ho Chi Minh City 1.2.1 E-banking services 1.2.2 Advantages of e-banking services 11 1.2.3 Difficulties in implementing e-banking services 12 1.3 Problem statement 13 1.4 Research objective 14 1.5 Research scopes and limitations 15 1.6 Research implications 15 1.7 Thesis structure 16 1.8 Summary 17 CHAPTER 2: LITERATURE REVIEW 18 1.1 Theoretical background 18 1.1.1 Technology Acceptance Model 18 1.1.2 Theory of Planned Behavior 19 1.2 Research model and hypotheses 20 1.3 Summary 24 CHAPTER 3: METHODOLOGY 25 [5] 3.1 Research design 25 3.2 Development of questionnaire 26 3.2.1 Measurement scales 26 3.2.1.1 Measure of Perceived usefulness and Perceived ease of use 26 3.2.1.2 Measure of Attitude 27 3.2.1.3 Measure of Subjective norms 28 3.2.1.4 Measure of Perceived Behavioural Control 29 3.2.1.5 Measure of Intention to use mobile banking 29 3.2.2 Draft questionnaire 30 3.3 Pilot study 30 3.4 Sample method 31 3.5 Questionnaire administration 32 3.6 Data analysis methods 32 3.6.1 Reliability 32 3.6.2 Exploratory Factor Analysis (EFA) 33 3.6.3 Multiple regression analysis 33 3.7 Summary 34 CHAPTER 4: DATA ANALYSIS AND RESULTS 35 4.1 Descriptive analysis 35 4.2 Measure assessment 36 4.2.1 Reliability analysis 36 4.2.2 Exploratory Factor Analysis (EFA) 38 4.3 Hypotheses testing 41 4.4 Testing the effect of demographic variables 44 4.5 Summary 44 [6] CHAPTER 5: CONCLUSION 46 5.1 Overview 46 5.2 Main findings 46 5.3 Practical implications 47 5.4 Theoretical implications 47 5.5 Limitations 48 APPENDICES 52 APPENDIX 1: QUESTIONNAIRE 52 APPENDIX 2: DESCRIPTIVE STATISTICS 56 APPENDIX 3: CRONBACH‟S ALPHA RELIABILITY ANALYSIS 58 APPENDIX 4: INTER-ITEM CORRELATION MATRIX 61 APPENDIX 5: THE FIRST-TIME RUNNING FACTOR ANALYSIS – EIGENVALUES (FOR INDEPENDENT VARIABLES) 62 APPENDIX 6: THE FIRST TIME RUNNING – FACTOR LOADING 63 APPENDIX 7: THE SECOND TIME RUNNING – EIGENVALUES 65 APPENDIX 8: THE SECOND TIME RUNNING – FACTOR LOADING 66 APPENDIX 9: THE FIRST TIME RUNNING – EIGENVALUES AND FACTOR LOADING (FOR DEPENDENT VARIABLE) 67 APPENDIX 10: MULTIPLE REGRESSION 68 APPENDIX 11: CHARTS OF TESTING HYPOTHESES 69 APPENDIX 12: AFFECTING OF DEMOGRAPHIC VARIABLES 71 [7] LIST OF FIGURES Figure 1: Technology Acceptance Model 14 Figure 2: Theory of Planned Behaviour 16 Figure 3: The proposed research model with hypotheses 17 Figure 4: Research process 22 LIST OF TABLES Table 1: Figure of e-banking services of 15 commercial banks in HCMC 10 Table 2: Scale of Perceived usefulness and Perceived ease of use 27 Table 3: Scale of Attitude 28 Table 4: Scale of Subjective norms 29 Table 5: Scale of Perceived Behavioural Control 29 Table 6: Scale of Intention to use mobile banking 30 Table 7: Cronbach‟s alpha reliability coefficient 33 Table 8: Descriptive statistic of respondent‟s characteristics 36 Table 9: Reliability analysis for each factor 38 Table 10: Key dimensions, items 41 Table 11: R Square Value (R2) 43 Table 12: ANOVA 43 Table 13: Beta Coefficient 43 Table 14: Creating and recoding variables 45 [8] CHAPTER 1: INTRODUCTION The introduction chapter identifies the research background, present the problem statement, and introduce the research objectives as well as the scope of research Futhermore, the research implications is also outline 1.1 Research background Mobile banking is an innovative service, which has been perpetuated by the development and diffusion of the mobile communication technology Mobile banking is defineded as “the financial services delivered via mobile networks and performed on a mobile phone” (Bangens & Soderberg, 2008, p.26) This service provides much convenience and promptness to the banks‟ customers along with cost savings Many banks are interested in expanding their market through mobile services Traditionally, the most widespread method of conducting banking transactions has been through offline retail banking Mobile banking, however, is the recent trend in banking transition and holds a bright future that is promising over and above the one brought by electronic banking (e-banking) Mobile banking provides personalized, anytime - anywhere banking services thus making it the future of banking In the last several years, several commercial banks in Vietnam have introduced and diffused some mobile banking systems The world economy is going through a crisis period Consumers of today are highly sophisticated and their need for personalized service is ever increasing by the day The digital age customers now require banking services serve to them anywhere they are As an emerging technological innovation, especially in the developing countries, mobile banking is yet to gain acceptance on a wide scale and adoption level is marginally insignificant (Amin, 2007, p.31) Hence, the need to understand the factors influencing intention to use mobile banking services is indispensable [9] 1.2 Overview of electronic banking market in Ho Chi Minh City So far, all commercial banks have built core-banking system, which connects online system The commercial banks have same level of investment in technology, because the same solutions and network infrastructure Therefore, the commercial banks can launch e-banking services similar to each other 1.2.1 E-banking services Currently, the commercial banks in HCMC have developed banking services via e-banking with convenient Many new payment services and valueadded utilities was, promoted for payment services, create competitive advantage among the banks Therefore, the banks have focused on technology, infrastructure effectively to serve the best payment services via e-banking, with the expanding scope to serve businesses and individuals customer Practical figures in HCMC shows, to the end of 2011, there were 111,861 customers are businesses and individuals who use payment services through e-banking, with the number of transactions through this channel during the year 2011 reached 1,732,654 transactions, total transaction value of 49,436 billion VND (data from the State Bank of Viet Nam - Branch Ho Chi Minh City) E-banking services also vary as (1) Internet banking for businesses and individual customers (transfers in and out of the system, the inter-bank transfer through CITAD ); (2) Mobile banking: SMS Banking (account balance inquiries, automatic SMS when there is a change in account ), Mobile banking (money transfer, bill payment ); (3) Phone banking (payment of school fees, telephone payment,etc) The commercial banks is cooperating with partners in the implementation of electronic payment services in order to reduce banking transaction costs, increased competition and improve the quality of services This also helps reduce the bank‟s cost in payments via papers, making it convenient for customers Customers not need go to the bank, but can make the payment transaction at [ 10 ] home At the same time, the banks are also actively working with technology partners to provide security services, ensure the safety of customer and bank assets Table – Figure of electronic banking services of 15 commercial banks in Ho Chi Minh City (Report of the State Bank of Viet Nam - Branch Ho Chi Minh City on December 31, 2011) Number of transactions Items (items) / Value (million VND) The number of enterprise customers using 7.561 payment via internet banking services The number of individual customers are using 73.644 services paid via internet banking The number of individual customers using 17.437 payment services via mobile banking The number of customers using payment services 13.219 via other electronic banking The number of payment transactions of business 325.846 customer via internet banking Value of payment transactions of business 27.120.937 customer via internet banking The number of payment transactions individual 1.056.905 customers via internet banking Value of payment transactions individual 21.821.640 ... statement was defined to take a closed look at using mobile banking in Viet Nam In order to narrow down the topic area, the scope of research examined the mobile banking in Ho Chi Minh City Finally,... electronic banking (e -banking) Mobile banking provides personalized, anytime - anywhere banking services thus making it the future of banking In the last several years, several commercial banks in Vietnam... via internet banking Value of payment transactions of business 27.120.937 customer via internet banking The number of payment transactions individual 1.056.905 customers via internet banking Value