Factors influencing the adoption of electronic banking in vietnam

PoliciesandSustainableEconomicDevelop ment |1FactorsInfluencingtheAdop tionofElectronic BankinginVietnam InternationalUniversity-PHAMTHIBICHUYEN VietnamNationalUniversityHoChiMinhCity I

PoliciesandSustainableEconomicDevelop ment |1

FactorsInfluencingtheAdop

tionofElectronic BankinginVietnam

InternationalUniversity-PHAMTHIBICHUYEN

VietnamNationalUniversityHoChiMinhCity

InternationalUniversity-NGODANGHOANTHIEN

VietnamNationalUniversityHoChiMinhCity

InternationalUniversity-Abstract

Thepapermainlyadoptstheextensionofthetheoryofreasonedactionfrompriorstudi es.ThefirstversionmodifiesTechnologyAcceptanceModelwithDecomposedTheoryof PlannedBehaviorandPerceivedRiskinwhicheightconstructsincludingActualUsage,Be havioralIntention,Attitudetowardusing,PerceivedBehavioralControl,SubjectiveNor m,PerceivedUsefulness,PerceivedEaseofUse,

andPerceivedRiskareusedtoexaminewhichconstructsdirectlyinfluencetheadoptiono felectronicbankingbyindividualsinVietnam.Afteranalyzing405validquestionnairesw ithSPSSandAMOSsoftwareversion20,thestudy,developedbasedo n twocommonmod elsofbehavioralstudies,showsthatsevenoutofeighthypothesesaresignificanttothedi

PerceivedRiskisconsideredabarrierfactorofusinge-banking.ThepaperalsosuggeststhegroundworkforfurtherstudiesinVietnam.

Keywords:electronicbanking;traditionalbanking;tra;tam;tpb;perceivedrisk;Vietnam

1 Introduction

Oneo f them o s t i m p o r t a n t phenomenao f thisa g e i s r e v o l u t i o n i z i n g

o f traditionalbankingthroughthedevelopingofelectroniccommunicationandaccessofhugeindividualstotheInternet.Ther a p i d technologicalprogressanddevelopmenti n theglobalfi n a n c i a l m a r k e t (Ozuru,2010;Jonhson,2005)hasledtoanewchapterontoday’strendinthebankingindustry.Telecommunicationandtechnologicalinnovationsallowbanksapproachtheircustomersandprovidethemwithnotonlygeneralinformationbutalsothechancetoexperienceinteractiveretailbankingtransactions.Withthec o n v e n i e n c e andefficiency,e-

bankinghasbecomeani m p o r t a n t c h a n n e l tosellproductsandservices,wherecustomersdonotneedtoqueueupandevensuffertheirc o n s t r a i n e d mannercontactedtom a k e theb a n k d u e too ff e r i n g “anytime,a n y w h e r e ” b a n

k i n g f a c i l i t i e s (Lassaretal.,2005).Servingcustomerwithouttheneedoffrontlinestaffswhilebanks benefitsfromstaffreduction,lesserbranchsizesandpaper-

relatedworks(TanandTeo,2000)arethegreatmainmotivationtousetheonlinebanking(Bruno,2003)

Today,personalserviceandconveniencearestillthecriticalfactorsinthebankingrelationship,buttheyaredefineddifferently.Consumersstillwanttobankwithafinancialinstitution,buttheydonotnecessarilywanttogotothebank.Theyareutilizingcomputersandtechnology.Theyaren o w comfortablewithpersonalcomputersandotherelectronicdevices.Theyexpectfast,efficient,andaccurateserviceandtheonlywaytocosteffectivelyprovidetheinstant,qualityservicethatcustomersdemand.Forallthesereasons,thebanksdeliverysystemsarecompletelychanging.Abetterunderstandingoffactorsthatinfluencee-

bankingadoptioninhighlydevelopingmarketlikeVietnammayhelptofurtherincreasetheadoptionratesincountrieswithimprovinginfrastructuresandeconomies(Davis,1989;Mathieson,1991)

Therestofthispaperisorganizedasfollows.Section2describesrelevantliteratureintheareaofconsumerbehaviori n theacceptanceo f e-

banking,i n c l u d i n g o f e

-c o m m e r -c e andi n f o r m a t i o n te-chnology;theoreti-calm o d e l s o f informationtechnologyusage.Section3 discusseshypothesisdevelopmentandthetheoreticalfoundationofourresearchmodel.Insection4,itdrawstheresearchmethodology.Section5istheresultsofdataanalysis,andSection6containsmanagerialimplicationsanddiscussion.Thefinalsectionistheconclusionsanddirectionsforfutureresearch

WiththepopularityoftheInternet,manyenterprisesandindividualsareinvolvedine-commerce.U p topresent,applicationsofe-

commercehaveachievedlotsofsubstantialprogresses.E-commercei s playingaveryimportantroleintheeconomicdevelopment.Largenumbersofbuyersandsellers

PoliciesandSustainableEconomicDevelop ment |361

interactwith eachotherthroughdigitaltransactions.Theseinteractionspromote theevolutionandshapecomplexstructuresofe-commercemarket

2.1.2 Electronicbanking(E-banking)

ElectronicB a n k i n g is simplytheu s e of electronicmeanstotransferf u n d s directlyf ro m o n e accounttoanother,ratherthanbycheckorcash(Daniel,1999).Therapidadvancedintechnologyi n bankingindustryforcedplayerstore-

formulatetheinformationtechnologystrategiesthattheyemploytor e m a i n competitive.Consequently,e-

bankingbecomesm o r e popularthatm o s t c o m m e r c i a l banksmustpursue.However,thetransactioninthebranchisstillthemostcommonmethodus e d

f or banktransactionsi n Vietnamin relationtheVietnamesehabitsandc u l t u r e t

bankingbecauseitsavestime;itmakespossiblefortheuseofinnovativeproductorserviceatalowtransactionfee.Besides,manycommercialbankshavetoupgradetheinformationtechnologyw i t h highersecurityqualitytokeeptheircurrentcustomersandattractnewcustomers

2.1.3 Useracceptanceoradoptionofinformationtechnology

SagaandZmud(1994)declaredthatconsumers’acceptanceoradoptionofinformationtechnologyisdefinedas‘‘theactofreceiving informationtechnologyusewillingly”.Thefindingsf r o m u s e r acceptanceresearchsuggestt h a twhenu s e r s arepresentedw i t h a modernsoftwarepackage,anumberoffactorsinfluencetheirdecisionabouthowandwhentheyuseit.Inthepasttwodecades,severaltheorieshaveemergedthatofferdeeperinsightsintoacceptanceofinformationtechnology.Amongthesetheories,thetechnologyacceptancemodel(TAM)hasr e c e i v e d m o r e attention.Severaltheoriesrevealthefactorsthatmayaffectconsumers’willingnesstouseanonlinefi n a n c i a l service.Theyconsisto f (1)Theoryo f ReasonedAction(FishbeinandAjzen,1975);

(2)D e c o m p o s e d TheoryofP l a n n e d B e h a v i o r (Tayloretal.1995);

(3)Thefi r s t m o d i fi e d versiono f TechnologyAcceptanceModel;

2.1.4 NewopportunitiesforbankingsectorsinVietnam

ThecommercialbanksinVietnamneedtoexpandmoremodernproductsratherthandeliverinformationandpriorbasicsservices.However,toimproveanddiversifye-

bankingservicesrequireshugeinvestmentininformationtechnology.Thisisabarrierto

introducenewvalueaddedservicessuchassellinginsurance,investmentproducts,ormarketstockquotes.Telephonebankingcanbringfi n a n c i a l servicestothehomeoroffice,especiallyiftheyareaffordablescreenphones.Bynoticinghowmuchinterestthecustomerexpresses,thebankscanapplyInteractivevideostothecustomertomaintainpersonalcontactwhilestillloweringtheexpenseofdeliveryservice.Withaninteractivevideo,commercialbankscanreducelaborforceintheirbranch.Complexlifeinsuranceproducts,

openbrokerageaccounts,customizedservicescanbewidelyavailablewhereneeded.Theinteractivevideosw i l l bec o s t effectiveexpertise.Theinterneta ll ow sbankstooff e r productstocustomersoutsidethenormalcustomerbaseofabranch.Banksareawareofthecustomer’sneedfortheseservicesandplantomakethemavailablebeforeothersourcesdo.

2.1.5 Drawbacks

Firstofall,commercialbanks arefacingwithsomepotentialdangersandissuestobetakenintoaccount.BecauseofincreasinglyallowedcustomerstobankoutsideoftraditionalbankfacilitieslikeAutomatedTellerMachines(ATM)orelectronichomebankingsystems.Nevertheless,customerso n l y

c o n t a c t withtheir

banksthrough(ratherunsophisticated)electronicinterfaces.This

alsoleadstothemajordifficultiesinintegratingthelegacysystemsofatypicalbankandsellingadditionalproductstocustomers(cross-

selling).Forexample,theinsurancecompaniestooktheopportunityo f thattograbbusinessfrombanks,sellingsavingsproductstocustomersthroughtheirextensivedistributionnetwork.Similarly,thedecreaseinhumaninteractionwithcustomerscouldalsoleadtoa lesssophisticatedunderstandingoftheirneeds,astheyarenotalwaysabletoexpresscomments,c r i t i c i s m s orrequestsfornewproductswhileinteractingwithmachines

2.2 Theoreticalmodelsofinformationtechnologyusage

Thefirst-lineresearchhasemployedintention-basedmodels,whichuseBehavioralIntensiontopredictusageandinturn,focusontheidentificationofthedeterminantsof intention, including:

(1)Thetheoryofreasonedaction(TRA)isabehavioralintentionmodel,developed

byFishbeinandAjzen(1980)topredicthumanbehavioringeneral;includingtheperformanceofanyvoluntaryact,unlessintentchangesbetweenassessmentandperformanceofthatbehaviorandwhetherabehaviorwillo c c u r (AjzenandFishbein,1980;FishbeinandAjzen,1975).Moreover,Sheppardetal

(1988)pointo u t thattheTRAwaseffectiveinpredictingdifferentbehaviors(e.g.,studyafew hours,gotoaweekendjob,orwritealetter).InTRA,attitude(ATT)towardsabehaviorandsubjectivenorm(SN),areidentifiedasdeterminantsofbehavior

Figure1.Thetheoryofreasonedaction

(2)TheFirstmodifiedversiontechnologyacceptancemodel(TAM1).TAMisana

daptationofTRAtoexplainspecificallycomputer-usagebehavior(Davis,1989).IntheTAM,DavisproposedPerceivedUsefulness(PU)andPerceivedEaseo f Use(PEOU)astwotheoreticalconstructsa ff e c t i n g ATTtowardsatechnology,whichaffects theusers’behaviorintention(BI)tothetechnology.PUisa

strong predictorofbehavioralintentionsindifferentenvironmentswhileTAMdescribesPEOUhasanindirecteffectthroughPUandATTontheBI.TAMhasbecomeawidelyusedmodelforpredictingtheacceptanceanduseofinformationsystems,andhasrecentlybeenappliedtopredictinternetadoption.Unfortunately,theorignalTAMdoesnottakeintoaccountpriorexperience,age,genderandotherpersonalcharacteristics.ThatiswhytheresearchersadaptthefirstmodifiedversionTAM(TAM1).

Figure2.TheFirstmodifiedversionoftechnologyacceptancemodel

However,TAM1hasstillnottestedwithactualmeasuresofusagebehaviorfully.Therearestudiesc l a i m e d thatTAM’sfundamentalconstructsareunabletoexplainfullythevariancesinintention.Moreover,onekeybenefitofusingTAM1tounderstandsystemusagebehavioristhatitallowsotherfactorstobeincorporatedeasilyintoitsbasicframework,ifdesired,toexplainbettertheeffectsofexternalvariablesonsystemusage(Hong,2001),aswellasfactorsinfluencingtheextentofuseoftheinternetinfinancialservices(McKechnie,2006).Asaresultofthis,itisnecessarytointegrateT P B and TAMfortheconceptualmodelmeasuredthewillingness,attitudesandintentionstowardsu s i n g e-

banking(Pavlou,2003;Jaruwachirathanakul,2005;Verhagen,2006;K i m , 2006).Furthermore,thisintegrationw i l l becombinedwithotherbehavioralc o n s t r u

c t s toverifyhowtechnologyfactorsaffecttoadopte-bankinginVietnam

(3)Thatiswhythesecondlineofresearchisaddedtopredictuserintention.Thethe

oryofplannedbehavior(TPB)wasdevelopedbyAjzen(1988).Thetheorypropose

samodelwhichcanmeasurehowhumanactionsareguided.Itpredictstheoccurrenceofaparticularbehavior,providedthatbehaviorisintentional.TheextensionoftheoriginalTRAledtotheformationofastheintroductiono f anewconstructwiththreefactors:ATT,SNandPerceivedbehavioralcontrol(PBC),whichreflectsperceptionsofinternalandexternalconstraintsonbehavior.IntheTPB,Ajzen(1991)incorporatesP B C asadeterminantofbehavioralintentiontowardbehavior.Inthecontrary,intentioninturnr e l i e s onattitudes,SNandPBC(Ajzen,2006).However,theresearchersalsochooseDecomposedT P B (DTPB)ofTaylorandTodd(1995),showedtheeffectiveguidanceandfullerunderstandingoftechnologyusage.ThecoreconceptoftheDTPBisbasedontheassumptionthatindividualsmake

r a t i o n a l decisionsandtheiractionsarealsobasedonthesystematicuseofinformationandresourcesavailabletothem.Figure3illustratesthedecomposedtheoryofplannedbehavior

sequencewhentherei s atleastthepossibilityo f negativeconsequences(Asnar,

2008).PerceivedRiski s theu n c e r t a i n t y thatconsumersconfrontwhenth

eyarenotcapableofforecastingtheconsequencesofpurchasedecisions.Inama

rketing(Lim,2003)definesperceivedriskasthenatureandamountofr i s k perce

ivedbyaconsumerincontemplatingaparticularpurchaseaction

Perceivedr i s k i s a majora ff e c t i n g intentiontoadopto r c o n t i n u e us i ng a

goodo r a service,i n c l u d i n g financial

usingaparticularsystemwillenhancehiso rherjobperformance

2 Perceivedeaseofuse

thedegreetowhicha n individualthedegreeto

whichapersonbelievesthatusingapartic ularsystemwillbefreeofeffort

theperson’sp e r c e p t i o n t ha t m o s t pe oplew ho a r e importanttoh i m thinkh e

s h o u l d o r shouldn o t performthebehaviorinq uestion

anindividual’spositiv

eo r negativefeelings

(e va

Constructs Definition Authors

Ajzen,1985;1 9 9 1 FishbeinandAjzen,1975 TaylorandTodd,1995 Bauer, 1960;

ViswanathVenkatesh etal.,2003

bankingthattheyfindthesystemusefultotheirbankingtransactions.Meanwhile,PerceivedEaseofUse(PEOU)isdefinedasthedegreetowhichanindividualbelievesthatusingatechnologyorasystemwillbeeffortless(Hamid,2008;Huang,2011;Lee,

2009;Shen,2010).GuandSuh(2009)proposedthatthesystemsneedtobebothe

a s y tolearnandeasytousetomakethee-bankingsystemsmoreuseful

WithhighreliabilityofPEOUandPUaseffectivefactors,Davis(1989)foundthatthesetwofactorshavestrongr e l a t i o n s h i p w i t h actualusageo f informationtechnologysystems.Firstly,P U hasstrongercorrelationwithusageofcomputertechnologyincomparisonwithPEOUbecauseusersalwayspaidmoreattentiontothenecessityofusingatechnology.Secondly,PUalsoseenasbeingdirectlyimpactedbyP E O U asthee a s e i n a systemusagec r e a t e s a potentiali m p a c tonusers’perceptionoftheusefulnessofasystem.Basedonthislogicalinference,thestudyproposedthefirsthypothesis:

H1:PerceivedeaseofuseandPerceivedusefulnesspositivelyinfluencetheuseofe-banking

3.1.2 PerceivedUsefulnessandAttitudetowardsusinge-banking

PUhasnotonlybeenamongthegreatpriorityintheuseofe-bankingbutalsoamajorfactorthata ff e c t s attitudetowardsacceptanceofinformationsystems.Previousauthors(TaylorandTodd,1995;Parthasarathy,1998;Karahanna,1999,andHardgrave,2003)foundthatonlyPU(Relativeadvantage)wasa significantdeterminanto f attitudetowardsu s i n g e-

banking.Therefore,w e proposedthesecondhypothesis:

person’sintentiontop e r f o r m acertainbehaviorisinfluencedbytheperson’sattitudeandthesubjectivenormstowardthebehavior.Empiricalresearchessupportthestrongrelationshipbetweenbehavioralintentionandbehavior(Fishbein,1975)

TAMemphasizedthata positiveattitudedirectlya ff e c t s anindividual’sintentiontou s e theinformationsystems.Thus,attitudetowardsusinginformationsystemisthefundamentalpredictoro f theusers’behavior-

intentiontouse.Moreover,previousauthorsimplythatattitudesdirectlyi m p a

c t theintentionstoadoptinternetbanking(TanandTe o, 2 0 0 0 ; Hernandez,2007).Consequently,thestudyproposesthat:

C hasmotivationalimplicationsforbehavioralintentions.Whenpeoplebelievethattheyhavelittlec o n t r o l overperformingabehaviorduetoalackofrequisitere

s ourc es andopportunities,theirintentionstoperformthebehaviorwouldbelow,eveniftheyhavefavorableattitudesand/orthe

subjectiven o r m s totheperformanceofthebehavior.Hence,thestructurallinkfromP B C toB e h a v i o r a l Intentionactuallyreflectsthe

measurementofskills,opportunitiesandresourcestoadoptandusee-bankingaretheadequateconsiderationtoengageinthisparticularbehavior(Mathieson,1991).Hence,PBCisamongthekeydeterminantsofBehavioralintention,especiallyine-bankingcontext

H6:PerceivedBehavioralControl

positivelyinfluencesBehavioralIntentiontousee-banking.

3.1.6 SubjectiveNormandBehavioralIntentiontousee-banking

ThesignificanceofsocialinfluencesontheindividualviatheappearanceofasubjectivenormisalsoexaminedintheTPB.TheroleofSubjectnormasadeterminant

ofITusageissomewhatunclear.Subjectivenorm(SN)mentionsthe“person’sper

ceptionofthesocialpressuresthatputonhimtop e r f o r m i n g thebehaviorin

question”(Ajzen,1980).Subjectivenormscanbeweighteddirectlybyaskingres

pondentstoevaluatetheimportanceofsurroundingpeopleapprovalordisapprovalfortheirperformanceinagivenbehavior(Ajzen,1988)

SomeresearchersfailtoidentifythesignificantcorrelationofSNonintention(Davis,1989;Shim,2001;ShihandFang,2004)whereasothersrevealasignificantrelationship(TaylorandTodd,1995;Vijayasarathy,2000).However,theseresultshavebeenthef a c t thatt h e r e w e r e n o r e a l c o n s e q u e n c e s Althoughambiguousnessstillsurroundsthisconstruct,thisstudywillincludeSNinthetheoreticalframeworkwiththefollowinghypothesis:

k hasbeenconceptualizedin theliteraturesi n variousmeans.Moreover,r is k levelassociatedw i t h certaindimensionsw i l l beelevatedu n d e r a differentcontext.Althoughstudies

showedperceivedr i s k asani m p or ta nt factorthatinfluenceson li ne shoppingbehavior(Doolin,2005),therearestilllimitedstudiestoidentifyriskdimensionsinthiscontext(Cases,2002).

Moreover,studiesindicatedperceivedriskasanimportantinfluencesonlinebankingadoption(Cunningham,2005;Polatoglu,2001).Acceptingthekeyroleofperceivedriskine-

banking,findinganoperationalsegmentingvariablethatcouldbothreducecustomersriskperceptionandincreaseinfluencee-

bankingadoption,wouldbegreatmanagerialinterest.Somepriorstudiesfoundthatperceivedriskisnegativelyinfluencedattitude(Schmiege,2009;Abroud,2010).Thus,thesamehypothesisistestedinthisstudy:

H7:PerceivedRisknegativelyinfluencesAttitudetowardusinge-banking.

3.1.8 BehavioralintentionandActualUsagee-banking

Inpreviousstudies,thebehavioralintentiontouseisfoundtobeapredictorofactualuseandhasbeenusedasadependentvariableinseveralstudies(Agarwal,199

e-bankingwillu s e itmorefrequently.Inotherwords,

bankingcontext,itispresumedthatanindividualwithhighintentiontoadopte-behavioralintentionwillincreasethenumberoftimesusingserviceswithinaspecificperiodoftime.Thus,thelasthypothesisistested:

bankingusage

H8:Perceivedbehavioralintentionpositivelyinfluencesthenumberoftimesofe-3.2.Researchmodel

Fromtheabovehypotheses,wedeveloptheresearchframeworkpresentedinFigure4

banking)i s adaptedmostlyf r o m Chenge t al.(2006)