Factors affecting the decision of using internet banking services of individual customers in ho chi minh city

Instructor: MSc Tran Kim Long MINISTRY OF EDUCATION AND TRAINING Author: Nguyen Huynh Duc STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY BACHELOR’S THESIS FACTORS AFFECTING THE DECISION OF USING INTERNET BANKING SERVICES OF INDIVIDUAL CUSTOMERS IN HO CHI MINH CITY Author: Nguyen Huynh Duc Class: HQ2 – GE03 Student code: 030630141727 Instructor: MSc Tran Kim Long HO CHI MINH CITY, 01/2020 Instructor: MSc Tran Kim Long MINISTRY OF EDUCATION AND TRAINING Author: Nguyen Huynh Duc STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY BACHELOR’S THESIS FACTORS AFFECTING THE DECISION OF USING INTERNET BANKING SERVICES OF INDIVIDUAL CUSTOMERS IN HO CHI MINH CITY Author: Nguyen Huynh Duc Class: HQ2 – GE03 Student code: 030630141727 Instructor: MSc Tran Kim Long HO CHI MINH CITY, 01/2020 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc ABSTRACT The explosion of information technology 4.0 has created a miraculous breakthrough for the global financial industry Particularly in Vietnam, the technological element is the focal point for the banking industry to move to a new site - more flexible and modern From the traditional banking model, commercial banks have now been gradually changing to the digital banking model to better suit human civilization in each period, typically the introduction of online banking services - also known as Internet Banking The e-payment system was born and developed in the context of e-commerce, helping to narrow the gap between banks and customers, providing more opportunities and means to make transactions and payment activities become quick and effective Individual financial services have become diverse such as money transfer, automatic withdrawal, card payment, online payment Thanks to this, banks have been able to strengthen its competitive position and strength on financial - currency market As can be seen, in recent years, commercial banks in Vietnam have gradually developed Internet Banking services, but the main transaction channel is still system of bank branches which only a small number of customer use In addition to the advantages and utilities of Internet Banking, the reliability of users is not high when inadequacies are still present, especially in the current period when the crime of "hightech fraud” is increasing day by day, such as: poor information security system, poor service quality, computer viruses, hacked accounts, etc the way between customers and technology services of banks Although internet banking services in Vietnam are not yet very popular, it has significantly changed the form and way of providing services of banks today Commercial banks are actively developing an online banking system to improve efficiency and save their operational costs And facing the challenge to survive and develop, the completion and expansion of this service are essential for Vietnamese commercial banks Modernizing banking services, applying new technologies, typically Internet Banking is the key to helping commercial banks succeed in the future i Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc Recognizing the importance of the e-banking system and the desire to encourage more customers to pay attention and use, the author chose the topic: “Factors affecting the decision of using Internet Banking services of individual customers in Ho Chi Minh City” The study focuses on clarifying the benefits of using internet banking services and the factors affecting customers' use of electronic services, then giving solutions to improve the intention to accept the use of customers in Ho Chi Minh City The Internet Banking is also known as online banking, e-banking or virtual banking which helps people to easily get information about their bank account, check the balance provide convenient tools to make the transactions more quickly, easily and safely Additionally, it not only controls finance efficiently but also saves time, effort and cost On the side of the banks, the increasing number of Internet users has created opportunities for the banking industry to develop Internet Banking It becomes an indispensable strategy which commercial banks need to deploy as soon as possible not only to create efficiency in business operations and satisfy diverse customer needs but to catch up the pace of development and the trend in time as well, thereby strengthening the position of the bank in the market It is undeniable that Internet Banking is one of utility services these days, but it also faces to many difficulties and challenges Particularly in Vietnam, although commercial banks are now making efforts to enhance and try to perfect it day by day, the number of people accepting to use Internet Banking is still limited, the frequency is still low There are many reasons explaining why customers are not trust and unfaithful to use Internet Banking in long term such as concerns about safety, security of online services, not believing on service quality or they just simply have no information about how to use it Thus, there should be recognition about which factors affect to the decision of using Internet Banking of an individual in order that commercial banks would make a strategy easier to reach their target customers and lead them to accept to use it There have been many studies all over the world to identify which basic factors affecting to actual customer decision, but human factors ii Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc vary from country to country and Ho Chi Minh city residents have it own characteristics The study was conducted at banks in Ho Chi Minh City, with all surveyed people who are from 18 to 60 years old and already using the bank's Internet Banking service With the sample of 199 surveys collected to carry out the study by the method of reliability assessment by Cronbach's Alpha test, the obtained coefficients are eligible to conduct EFA analysis to draw out the main factor, finally evaluate the hypothesis by the multiple regression model The final results of the research shows that there are seven factors affecting the "intention to use Internet Banking services" of people, including: Attitude, Subjective Norms, Perceived Usefulness, Perceived Ease of Use, Perceived Risk, Perceived Trust, Perceived Behavioral Control In particularly, Perceived Behavioral Control is the factor that has the highest impact on the intention to use Internet Banking in Ho Chi Minh City Next is the influence level of factors such as: Perceived Ease of Use, Perceived Risk, Subjective Norms, Perceived Trust, Perceived Usefulness and Attitude Based on the proposed research model, the author built a scale, made hypotheses and tested the scale The research results show that the factors that have a direct impact on the decision of using Internet Banking services and influential demographic variables make the difference of the target groups The thesis studies the factors affecting the use of Internet Banking services by individual customers at banks in Ho Chi Minh City with the goal of identifying demographic characteristics and perceived factors affecting the decision of using online banking services Thereby, the author gives some suggestions for commercial banks in the future development of Internet Banking services in Ho Chi Minh City To accomplish the research objectives, the author implemented through 02 stages according to the following steps: Stage one overview of research, developing questionnaires, building research models, building scales; The second phase conducted hypothesis testing and analysis using the reliability coefficient tool iii Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc (Cronbach’s Alpha), exploratory factor analysis (EFA), and multivariate regression analysis From the research results, the author proposes some suggestions for banks in Ho Chi Minh City on the development of Internet Banking services in the coming time Theoretically, the study has built a research model, scales, research hypotheses and scales test, identify factors affecting the use of Internet Banking services by individual customers at banks in HCMC In practical terms, the author has some suggestions for banks in Ho Chi Minh City on the development of Internet Banking services in the future, such as: Firstly, Banks should update clear and detailed user manual information to the target customer by introducing extensive services on media such as newspapers, social networking sites, main banks and partners' websites On the Internet Banking website, there should be specific, clear and vivid information in words and illustrations with answers to questions and difficulties of customers during the use of this online service; Website interface should be attractively designed and refined Clear and simple transaction items could bring easy and quick experiences to customers The friendly interface and the way to use it easily for the first time will make customers happy and will continue to experience the next time Banks should diversify services and products online, maximally support the diverse needs of customers There may be more promotions, attractive incentives and practical for all customers Banks should update information regularly and notice changes to customers to help banks quickly capture the interests of customers and maintain relationships Especially, for customers who have not used the services, they should have a service experience program for them to try the service for free for a certain period of time (one month) for them to approach and become familiar with manipulating the utilities of the services For customers who are already using, banks have to regularly maintain relationships, regularly notify utilities via mail or phone number to create concerns about their needs Secondly, Banks should enhance the convenience of Internet Banking services They need to invest in building a good and modern network infrastructure such as: upgrading and expanding the transmission line, broadband, large city, high speed in iv Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc order to limit possible transaction errors, such as congestion, slow processing, no notification of information especially need to handle quickly on the occasion of high demand for payment Besides, Banks could deploy more features of batch transfer, periodical transfer for e-banking services For the periodical transfer feature, customers not need to go to the counter directly, but the bank will actively support quick transactions according to the customers' specific spending plans For batch transfer, just one click, the transfer order can be paid to many beneficiaries at the same time, instead of making money transfers each time, it takes a lot of time for customers Thirdly, Bank have to ensure the safety and information security for customers, which is an extremely important point for an online service that requires authenticity and high security, typically Internet Banking This means: Banks should focus on investing in database systems so as to ensure safety and high security by accessing and learning advanced technical technologies from developed countries in the world, also take advantage of the investment support of strategic partners, invite foreign experts to consult at the same time The bank can choose and apply many methods to solve the problems of authentication and secure transaction security such as: Two Factor Authentication; One Time Password; Use Virtual Keyboard; Hardware Token, Smart Card with Digital Signature Compared to other solutions, the security solution using electronic signatures solves 04 important issues of electronic transactions: (i) User authentication, (ii) Confidentiality of transaction information, (iii) Data integrity, (iv) Anti-disclaimer Banks need to comply with the regulations on security and safety in Internet Banking transactions in accordance with the regulations of the State Bank, Department of Banking Information Technology Banks should requently give recommendations and warnings to customers clearly and in detail through the bank's official website, annual meetings, social networking sites, newspapers Encourage customers to change passwords (every two months), provide free anti-virus software, always have a supervisor (24/7) of unusual transactions and quickly notify customers goods for timely handling to avoid unfortunate incidents that may occur v Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc Fourthly, Banks should actively enhance support services for Internet banking services for customers and promptly handle instability and create peace of mind for users by equipping with modern switchboard system, customer support 24/7 continuously, having professional staff with solid professional knowledge, dynamic and enthusiastic, providing contact methods diverse: phone, email, online support and actively handling possible incidents such as: emergency card lock, temporary account blockade, support to protect customer assets even after office hours vi Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc DECLARATION This thesis is the author's own research, the research results are truthful, in which there is no previously published content or the content made by others except the full citations cited in the thesis The author Nguyen Huynh Duc vii Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc ACKNOWLEDGEMENTS First of all, I would like to express my sincere thanks and express my deep gratitude to the teachers of Banking University of Ho Chi Minh City for their enthusiastic teaching, as well as consolidating the solid foundation knowledge, helping me successfully complete the university curriculum In particularly, I would like to express my sincere thanks to Mr Tran Kim Long for giving me the detailed guidance and wholehearted assistance in completing the graduation thesis Without his thoughtful support, it would be difficult for me to complete this thesis well Due to my limited practical experience, the content of the graduation thesis cannot avoid some shortcomings, I am looking forward to receiving further advice from teachers to learn more experiences I believe these experiences are extremely valuable so that I can develop myself well in the future I sincerely thank you! The author Nguyen Huynh Duc viii Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc REFERENCES Domestic references V Th B ch Th o (2012), “ h h ng m i i n ph n h h ng n h ng i n i n i Ng Minh H i, Tr n Ho ng Ng n (2004), “ i i g n h ng m”, Lu n v n th c s kinh t ph i n ng n h ng i n i m”, T p ch kinh t , s 169 V V n Điệp (2017), “Mơ hình nghiên ứ d ng ph nh n ố ảnh h ởng ến quyế ng h nh o n i n t c ng ời iê nh s ùng, T p ch c ng thương” Th ng tư 35/2016/TT-NHNN “An o n, bảo mậ h ng n h ng ên In e ne ” s 35/2016/TT-NHNN Đ c Nam (2014), “Đ y m nh ng d ng CNTT ph t tri n d ch v ng n h ng”, trang web http://baodientu.chinhphu.vn Đ Th Ng c Anh (2015), “Th c y ph t tri n Internet banking”, T p ch tin h c ng n h ng, s 4, tr 10-11 Lê Ng c Đ c (2018), Chương - Cơ sở lý thuy t Lu n v n Th c s “Khảo s số yếu tố ảnh h ởng ến xu h ớng s d ng h nh o n i n t (e-Payment)” Foreign references Aijen, I., and Fishbein, M (1980), “Understanding Attitude and predicting social behavior”, Englewood Cliffs, NJ; Prentice Hall Ali Saleh, A and Khalil, MN (2013), “Customer Adoption of Internet Banking Service: An empirical examination of the Theory of Planned Behavior in Yemen”, International Journal of Business and Commerce, No 2, Volume 5, pages 1-7 Tomasz Stanislaw Szopinski (2016), “Factors affecting the adoption of online banking in Poland”, Journal of Bussiness Research 69, Pages 4763 – 4768 Andrew, M and Malinga, R (2011), “Internet Banking, consumer adoption and customer satisfaction”, African Journal of Marketing Management, No 3, Volume 10, Pages 261-269 43 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc De-Joung, J (2001), “The in e ne ’s pl e in he b nking in s y”, Chicago Fed Letter, No 163, Volume 10, Pages 250-264 Subsorn P, Limwiriyakul S (2011), “A comparative analysis of the security of Internet Banking in Australia: A customer perspective”, In: 2nd International Cyber Resilience Conference (IRC2011) Angelakopoulos, G & Mihiotis, A (2011), “E – banking: Challenges and Opportunities in Greek”, Electronic Commerce Research, 11 (3), 297 – 317 Chung-Hung, T (2013), "A study on the consumer adoption behaviors of internet bank", Journal of networks, Volume 8, No 12 The Australia Banker Magazine (1999), “How he In e ne e efines b nking”, Collection 133, No 3-6 44 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX APPENDIX 1: SURVEY Gender:  Male  Female Age:  18-24  25-34  35-44  45-54  Over 55 Job:  Student  Civil servant  Company officer  Factory worker  Housewife  Having own small business  Intelligentsia  Others Education  Under Colleges  Colleges  Bachelor  Master Salary base  Under million dong 45 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc  From to million dong  From to 10 million dong  Over 10 million dong Your purpose when using IB service:  Payment of living expenses such as electriCity, water, internet, television, etc  Online shopping on Tiki, Lazada…  Transfer money  Recharge the phone  Financial – Insurance services  Business  Others From to 10, how many points will you choose for your currently IB service? 10           Please let me know about your satisfaction about these factors Very Dissatisfied Neutral Satisfied dissatisfied Very satisfied Convenient      Saving cost      Safety      Easy to use      Flexibility      Fast transaction      46 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc Please let me know your assessment of each statement according to the levels below: Absolutely disagree Disagree Neutral Agree Absolutely agree ATTITUDE IB is a useful technology for many                     consumers IB is the inevitable trend of payment services I am very willing to use the IB service I don't think I'm willing to accept IB PERCEIVED USEFULNESS IB allows me to make payments                  faster IB helps me make payments easily IB helps me control my finances effectively PERCEIVED EASE OF USE The operation of IB is easy to understand   47  Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc and clear I need a lot of time to learn how to use                IB I easily use IB on what I want I believe it is easy to use IB if there is an instructor PERCEIVED RISK Others may know my information                when I use IB I always risk the loss of information when using IB service IB seems to be a safe and reliable service PERCEIVED TRUST Providers always provide IB services                correctly Providers always provide IB services safely I fully trust the Ib 48 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc services providers SUBJECTIVE NORMS I will use the Ib services if people                around me use it Family and friends may interfere with my intent to use the IB translation I will use Ib services if my family and friends think I should use it PERCEIVED BEHAVIORAL CONTROL I am eligible to use IB I have the knowledge to use IB                               I will use it immediately if I get a chance Intention to use I would recommend it to others I will use IB instead of going to the bank's transaction 49 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc office I will definitely continue to use the   IB service 50    Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX SURVEY OBJECT DESCRIPTION Variables Classifies Frequencies Percentages (%) Male 92 46.23 Female 107 53.77 From 18 to 24 76 38.19 From 25 to 34 60 30.15 From 35 to 44 29 14.57 From 45 to 54 28 14.07 Over 55 3.02 Student 47 23.6 State employees 24 12.06 Office workers 40 20.1 Worker 4.02 Housewife 4.02 Business 30 15.07 18 9.04 Other 24 12.09 Under college 39 19.6 59 29.64 93 46.7 Genders Ages Occupation Professional occupations (engineers, doctors ) Intermediate; Academic level College University 51 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc Postgraduate 4.06 Under million 33 16.58 From to million 53 26.63 From to 10 million 71 35.67 Over 10 million 42 21.12 Income 52 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX Results of running the ATTITUDE model alpha TD1 TD2 TD3 TD4, item Test scale = mean(unstandardized items) Item Obs Sign TD1 TD2 TD3 TD4 199 199 199 199 + + + + item-test correlation item-rest correlation average interitem covariance 0.8185 0.8086 0.8450 0.4510 0.6466 0.6349 0.6935 0.0414 3685938 3858011 3338071 9634367 0.4789 0.4903 0.4464 0.8897 5129097 0.6720 alpha Test scale alpha alpha TD1 TD2 TD3, item Test scale = mean(unstandardized items) Item Obs Sign TD1 TD2 TD3 199 199 199 + + + item-test correlation item-rest correlation average interitem covariance 0.9196 0.8933 0.9024 0.8130 0.7622 0.7775 9065276 1.012664 9711182 0.8174 0.8621 0.8489 9634367 0.8897 Test scale 53 Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX Results of running the PERCEIVED USEFULNESS model alpha HD1 HD2 HD3, item Test scale = mean(unstandardized items) Item Obs Sign HD1 HD2 HD3 199 199 199 item-test correlation item-rest correlation average interitem covariance 0.8725 0.9001 0.9086 0.6972 0.7702 0.8015 1.047739 9657632 9809401 0.8746 0.8026 0.7800 9981473 0.8712 + + + Test scale alpha APPENDIX Results of running the PERCEIVED EASE OF USE model alpha SD1 SD2 SD3 SD4, item Test scale = mean(unstandardized items) Item Obs Sign SD1 SD2 SD3 SD4 199 199 199 199 + + + + item-test correlation item-rest correlation average interitem covariance 0.8701 0.8490 0.8132 0.7857 0.7716 0.7128 0.6531 0.6080 3574015 3463445 3725784 3920613 0.7715 0.7908 0.8174 0.8370 3670964 0.8458 Test scale 54 alpha Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX Results of running the PERCEIVED RISK model alpha RR1 RR2 RR3 RR4, item Test scale = mean(unstandardized items) Item Obs Sign RR1 RR2 RR3 RR4 199 199 199 199 + + + + item-test correlation item-rest correlation average interitem covariance 0.9264 0.8687 0.8786 0.8129 0.8574 0.7631 0.7861 0.6661 4017055 4604673 4638343 4977751 0.8278 0.8648 0.8573 0.9007 4559456 0.8942 Test scale APPENDIX Results of running the PERCEIVED TRUST model alpha NT1 NT2 NT3, item Test scale = mean(unstandardized items) Item Obs Sign item-test correlation NT1 NT2 NT3 199 199 199 + + + 0.8287 0.8475 0.8590 item-rest correlation average interitem covariance alpha 0.6305 0.6357 0.6688 4615502 4169078 3973402 0.7417 0.7368 0.6998 4252661 0.7994 Test scale 55 alpha Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX Results of running the SUBJECTIVE NORMS model alpha CCQ1 CCQ2 CCQ3, item Test scale = mean(unstandardized items) Item Obs Sign item-test correlation item-rest correlation average interitem covariance CCQ1 CCQ2 CCQ3 199 199 199 + + + 0.7755 0.8735 0.8555 0.5573 0.6417 0.6811 6819705 4297498 4902289 0.7643 0.6913 0.6354 533983 0.7785 Test scale alpha APPENDIX Results of running the PERCEIVED BEHAVIORAL CONTROL model alpha HV1 HV2 HV3, item Test scale = mean(unstandardized items) Item Obs Sign HV1 HV2 HV3 199 199 199 + + + item-test correlation item-rest correlation average interitem covariance 0.8649 0.8626 0.8398 0.6893 0.6833 0.6362 8935079 9007411 9899244 0.7284 0.7344 0.7823 9280578 0.8172 Test scale 56 alpha Instructor: MSc Tran Kim Long Author: Nguyen Huynh Duc APPENDIX 10 Results of running the INTENTION TO USE model alpha YD1 YD2 YD3, item Test scale = mean(unstandardized items) Item Obs Sign YD1 YD2 YD3 199 199 199 + + + item-test correlation item-rest correlation average interitem covariance 0.8554 0.8913 0.8322 0.6597 0.7308 0.6522 4732501 3972641 5391097 0.7757 0.7007 0.7842 4698746 0.8229 Test scale 57 alpha ... the author chose the topic: ? ?Factors affecting the decision of using Internet Banking services of individual customers in Ho Chi Minh City? ?? The study focuses on clarifying the benefits of using. .. of using Internet Banking services at commercial banks in the Ho Chi Minh City? What is the research model that influences the decision of using Internet Banking? The degree of influence of the. .. Internet Banking services of individual customers in Ho Chi Minh City? ?? The study focuses on clarifying the benefits of using internet banking services and the factors affecting customers' use of electronic