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

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

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

BANKING ACADEMY OF VIETNAM

ADVANCED PROGRAM FACULTY OF BANKING

- -

Hanoi, 2021

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

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 Thai Hoang

UTAUT Unified Theory of Acceptance and Use of Technology

LIST OF TABLES

Figure 6 Unified Theory of Acceptance and Use of Technology

Figure 10 Digital banking services

Table 1 List of determinants and their mechanisim

Table 2 Section 2 in questionnaire survey

Table 7 EFA findings for independent determinants

Table 8 EFA findings for dependent determinants

Table 9 The correlation coefficient matrix

Table 10 Multivariate regression findings

Table 11 The effect of the determinants on the Intention to use

TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENT ii

LIST OF ACRONYMS iii

LIST OF TABLES iv

INTRODUCTION 1

CHAPTER 1: LITERATURE REVIEW AND THEORETICAL BACKGROUND 5

1.1 The review of previous studies 5

1.2 The literature review on digital banking and customers’ intention to use 8

1.2.1 Key terms 8

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

3.1.6 Hypothesis testing findings 45

3.2 Discussion 48

CHAPTER 4: RECOMMENDATIONS 50

CONCLUSION 53

REFERENCE 55

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

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

describe the collected data, provide basic summaries of the sample, providing the basis for quantitative analysis of data

Verifying and evaluating the scale

To evaluate the scale of concepts in the research, it is necessary to check the reliability, the reliability of the scale assessed through Cronbach's Alpha coefficient

analysis and principal component analysis (PCA)

Multivariate regression analysis

To determine the relationship between the group of independent variables

and the dependent variable in the research model

1.6 Thesis Structure

The thesis is structured in 4 chapters as follows:

Chapter 1: Literature review and theoretical background

Chapter 2: Research data and methodology

Chapter 3: Findings and discussion

Chapter 4: Recommendations

1.7 Contribution of the thesis

Summarize the general theory of DBS, the current status of DBS development and the level of interest of customers to DBS in Vietnam today because this is a new field, there are not many research and implications

Identify determinants affecting retail customers' intention to use, objectively assess customers' needs as well as the quality of DBS Through the analysis findings, it helps to find out what determinants really affect the intention of using DBS of the customer Since then, making recommendations to management levels

to have appropriate improvement solutions to improve the DBS 's operational

efficiency and help customers feel satisfied when using DBS

CHAPTER 1: LITERATURE REVIEW AND THEORETICAL BACKGROUND

1.1 The review of previous studies

 Foreign studies

Among digital banking reports, study on consumer adoption of online banking has received the most interest Casaló, Flavián, and Guinalu (2007) investigated the role of five determinants in the growth of online banking in Spain (safety, protection, accessibility, confidence, and commitment) The thesis was focused on data obtained from 142 online surveys for Spanish-speaking customers According to research, one of the leading causes of decreased confidence in the Internet, thus limiting the growth of e-commerce, is a lack of protection The findings confirmed the optimistic and significant impact of becoming mindful of the security of managing personal data on customer trust in an online banking system Furthermore, loyalty and dedication to using online banking platforms were revealed to be significant in retaining long-term relationships with customers

Lee (2009) performed an online survey to analyze consumer adoption behavior for online banking in Taiwan using the integrated concept of technology acceptance model (TAM) and theory of expected behavior (TPB) 368 of the 446 responses were accurate and adequate to analyze customer adoption behaviour for online banking in Taiwan The study looked at the effect of eleven determinants on the dependent variable (customer intention to use online banking), including seven independent variables (perceived ease of use, perceived advantage, perceived costs, security/privacy, efficiency, social and time risk), and a group of five control variables (perceived utility, mood, subjective average, perceived behaviour control) The research model was shown to be ideal for understanding and forecasting consumer online banking consumption behaviour The decision to use online banking was greatly affected by potential advantages and five risk faucets, with the latter having the greatest effect According to the report, risk should be prioritized over the advantages offered by this service

Using the same methodology as Lee (2009), Nasri and Charfeddine (2012) investigated Tunisian Internet banking user acceptance, focusing on protection, confidentiality, efficiency, government funding, usefulness, ease of use, consumer behaviour, social norms, and behavior management Based on the responses of 284 people, the paper supported the relevance of the TAM and TPB models in assessing consumer acceptance for Internet banking and, as a result, created suitable strategies

to increase usage of this service Security and privacy to protect customers' personal and financial information, government funding, legal system, and technology were identified as significant determinants affecting Internet banking user purpose in Tunisia

Considering internet banking to be an effective infrastructure capable of easing customers' everyday transactions, Foon and Fah (2011) conducted surveys in Kuala Lumpur under the UTAUT system to examine behavioral aim towards internet banking adoption The paper found that success expectancy, commitment expectancy, social impact, supporting condition, and confidence strongly and positively affected the intention to use internet banking in Malaysia, accounting for 56.6 percent of the variance in behavioral attention Despite the fact that the sample size was inadequate to generalize the population in Kuala Lumpur, the results were able to assist banks in understanding Internet banking behaviour and then suggesting new ways to persuade more consumers to use this service

In order to investigate the determinants of mobile banking acceptance behavior in Spain, Munoz-Leiva, Climent-Climent, and Liébana- Cabanillas (2017) added innovation diffusion theory, perceived risk, and confidence to the classic technology acceptance model (TAM) The data obtained from an online survey was analyzed using structural equation modeling (SEM) in the article The analytical findings showed that attitude is the most important determinants affecting mobile banking use behavior, while the hypotheses that utility and risk have a direct effect

on the adoption of mobile banking applications were dismissed

 Domestic studies

Following in the footsteps of other Asian nations, DBS in Vietnam have enormous growth potential According to a McKinsey survey (Barquin & Vinayak,

2015) for Asian emerging markets, the use of DBS has changed dramatically since

2011 This survey had 700 Vietnamese respondents According to the findings, 41%

of Vietnamese consumers use computers or cell phones for banking transactions It showed a significant growth opportunity in developing DBS for Vietnam However, according to the latest theoretical context and recent studies in digital banking, the subject of digital banking is still relatively new There is currently no comprehensive analysis of the determinants influencing the development of DBS in the case of Vietnam The recent study has exploited issues relating to the electronic and mobile banking sector following the latest Digital Banking Literature Analysis

Dinh, Le, and Le (2015) examined the effect of electronic banking on the success of Vietnamese commercial banks from various perspectives The findings revealed that e-banking platforms had a favorable effect on profitability, but this impact came with a three-year wait Because of this significant lag, the authors concluded that e-banking services had no significant effects on the development of Vietnamese banks

Despite the fact that a number of studies in the current literature have investigated the determinants of the decision to use emerging technologies, with a particular focus on the banking sector, the research conducted for DBS seems to be constrained in the sense of Vietnam This demonstrates that there is a scarcity of observational data on the effect of variables on consumers' intentions to use DBS in Vietnam

1.2 The literature review on digital banking and customers’ intention to use 1.2.1 Key terms

 Digital banking

The conversion of all conventional banking operations and services to a digital world is known as digital banking (Sarma, 2017) Digital banking is indeed a highly technological and demanding field that includes advancement in financial services for both retail and corporate customers around smartphone, digital, AI, payment solutions, regtech, data, blockchain, API, distribution networks, and technology (Sarma, 2017) Meanwhile, in the book "Digital banking: A strategy to launch or become a digital bank", Chris Skinner (2013) considers digital banking as

a bank's operating model in which operations are mainly based on platform and electronic data and digital technology are the core values of banking operations Besides, Trivedi (2019) defines: Digital banking is a bank that is implemented through a digital platform, eliminating all paper procedures such as checks, payment slips, drafts of demand, It has means available of all online banking activities Digital banking gives customers the freedom to access and perform all traditional banking 24/7 without having to go directly to a bank branch to get their work done Digital banking can be done through the customer's laptop, tablet or mobile phone Thereby, the concept of digital banking can be seen to have a broader and more comprehensive scope than the concepts of online banking, virtual banking, electronic banking or direct bank Digital banking refers to the digital integration of banks for all areas of banking services, the application of digitalization in financial institutions' business operations and in interactions with customers Meanwhile, the remaining concepts only partially reflect aspects of the application of digitalization

in the banking sector, such as applying only to one type of service (wireless transfer, financial consulting, account management), not requiring digital integration for the entire operations of the bank

In short, Digital Banking is the provision of banking products and services based on digital technology In other words, it is an operating platform built on a technological framework that enables banks and consumers to share information and perform transactions This process is accomplished through digital devices

linked to the Internet with computer applications Customers need not go to physical branches to conduct transactions and banks do not have to meet customers to complete transactions and so on As a matter of fact, digital banking relies on new solution technologies such as blockchain, big data analysis, artificial intelligence, automation, mainly through the internet, mobile phones, and tablets and possibly social media later Therefore, Digital Banking allows banking transactions to take place conveniently, quickly, safely and cheaper, helping customers have a superior experience compared to traditional banking transactions

In the past, the banking industry consisted mostly of paper and branch-based banking activities without the assistance of technology, and customers were expected to personally visit the bank Both banking departments idle time and raise risk for cash transactions (Ramey, 2012) Furthermore, in the background of the banking industry, deliberate scams by bank personnel or clients have occurred because of the limited oversight and guidance during banking Due to small scale dispersal and delivery the banks cannot meet and serve further clients But banking facilities have changed considerably over the years and, due to new technologies, are now one of today's leading industries Technology allowed digital services to be provided by the banks Nowadays, clients are immensely benefiting from digital banking in many ways, such as internet deposits, online money transfer and payments through online bills Incorporate safety recording devices that reduce the risk of theft and secure consumer earnings and personal data Without needing to enter a bank branch and transact several transactions within a few seconds without holding currency, clients would be able to monitor their balances more quickly and accelerate business transactions and enable items to be shipped Earlier onion It is obvious, not only consumers profit from the technology financial system, but even banks may have several advantages The computer network lets the bank act in an integrated and coherent way to provide favorable environments for banks to efficiently and reliably monitor and maintain all branches With the vast technological advantages, companies can meet their clients, provide superior services and extend their industry on a broader scale The capacity of the bank to manage the cash balance, determine the financial conditions of clients and allot the

equity profitably limits original banks dependent on paper and bank books Those barriers have been lifted, the banks have been opened to accessible information sources, data management and target consumers Though technology is very costly

in banking services, the benefits are entirely worthwhile and endless Since banks benefit from fees and commissions on exchange services, the use of technology in the banking industry has a significant impact on both consumers and banks in the long run

 Customers’ intention to use

Intentions are self-instructions to execute certain actions or to achieve specific results (Triandis, 1980) and are typically calculated by affirmation of things such as "I plan to do X!" Forming a behavior or goal intention marks the culmination of one's deliberation on what one will do and shows how much one is willing to try, or how much work one will put forward to obtain desirable outcomes (Ajzen, 1991; Gollwitzer, 1990; Webb & Sheeran, 2005) As a result, intentions are thought to catch the motivating forces that affect an action (Ajzen, 1991) The mood

of a person about his actions and how he believes people will judge him if he continues the behavior predict a person's interest in acting (Davis et al., 1989) The mind's persistent desire to pay attention to and recall certain events or activities is often referred to as interest So, someone who is engaged in and paying attention to

an exercise must be motivated by enjoyment, and if pleasure exists, that person will use it regularly in the future Interest is closely linked to thoughts and emotions in carrying out its tasks Humans make choices and make judgments by deciding and making decisions Interest is the proclivity of a large heart for something that occurs because of a need, whether perceived or not, or the need for a thing Factors that pique people's attention are listed as follows: 1) External needs considerations These requirements can be shaped by the physical and psychological needs of the individual; (2) social motivations; the emergence of an interest in the person may be determined by social motives, including the desire to be recognized and appreciated

by the society in which he lives in; and (3) emotional causes

1.2.2 Characteristics of Digital Banking Channels

Digital banking is influenced by service efficiency and technical characteristics that make it attractive to banks and consumers (Jun & Palacios, 2016; Amin, 2016) It facilitates the simultaneous introduction of various services,

as well as the provision of banking and other services to consumers Customers, for example, will search the internet, chat, and conduct financial transactions all at the same time Internet banking allows banks to provide services while providing various advantages attributable to the technology's increased connectivity and user-friendliness from every venue (Martins et al., 2014; Yiu, Grant & Edgar, 2007) It allows consumers to perform the majority of their services from the comfort of their own homes (Mols, 2001) Telephone banking enables consumers to perform transactions over the phone (Sundarraj & Wu, 2005), while mobile banking allows financial services to be managed by mobile devices (Oliveira & Tam, 2017) Customers' desire to conduct transactions remotely is driving the growth of mobile banking These digital channels provide various customer interfaces (e.g., dial and browse methods), with telephone banking being the most popular

Online banking is listed as e-banking, mobile banking (Hanafizadeh etc., Hanafizadeh et al., 2014; Lin, 2011), and telephone banking as t-banking (Sarokolaei, Rahimipoor, Nadimi & Taheri, 2012) (Sundarraj & Wu, 2005) This digital platforms share many features with other utilities, with the only exception being the delivery platform, which in digital banking may be either telephone or online digital networks Furthermore, digital resources are used while they are produced, are intangible, and cannot be stored in an inventory (Hatch, 1997) Variations in service quality can result from interactions between banks and customers during the service delivery process (Amin, 2016) Customers, without a doubt, have varying quality preferences, and how well service providers fulfill those expectations influences their satisfaction As a result, research into what influences customer service preferences in digital banking in terms of customer engagement, retention, and loyalty is desperately needed

Banks will provide innovative services for their customers through digital innovation Customers may be prevented from queuing in branches and traveling to

complete financial transactions as a result of this Banks can benefit from increased operating performance, as some are now reducing branch numbers Because of these features and developments in banks, research into its adoption has been quite convincing (Hanafizadeh et al., 2014; Alsajjan & Dennis, 2010; Yoon, 2010) However, unlike this study, these findings did not take into account the characteristics of the digital banking experience There are also surveys that have not studied digital banking, which have aimed at the the economic values of both consumers and banks (Klaus & Maklan, 2013; Yee et al., 2010)

Customers may use digital banking to pay fees, pass money, and check their account balances It is crucial in electronic payments to promote e-commerce E-banking dominated early digital banking, but m-banking is starting to contest this domination In recent years, the emergence of mobile phones has enabled banks to include m-banking applications, thus ensuring their economic longevity (Jun & Palacios, 2016; Hoehle et al., 2012; Barnes & Corbitt, 2003) These features of digital banking make it a good alternative to bank branches, making it useful for research and assisting banks in improving their comprehension and capabilities It will help banks better service their customers, enhance their performance, sustain customer relationships, and foster mutual value The characteristics of digital banking make it ubiquitous, but consumer experience can be influenced by service and technical qualities (Monferrer-Tirado et al., 2016), as well as simplicity (Keisidou et al., 2013), which need further investigation in vietnamese banks

1.2.3 Digital Banking Uptake among Banks and Customers

Competitive factors are pressuring banks to cut expenses and innovate, resulting in digital banking as an alternate method of providing services and leading researchers to investigate its adoption Similarly, consumers are getting more competitive, pushing businesses to prioritize service efficiency in order to improve sales results (Pekovic & Rolland, 2016) The potential advantages and safety aspects in digital banking, especially e-banking, have already been studied (Jo Black, Lockett, Winklhofer & McKechnie, 2002) Howcroft, Hamilton, and Hewer (2002) examine the motivations for and obstacles to using e-banking and m-banking, concluding that consumers will continue to use bank branches, but digital

banking will potentially replace them Although digital banking has been a rival to bank branches (Stone & Laughlin, 2016), it has not fully displaced them, and recent analysis has refocused on digital banking characteristics (Alalwan et al., 2016)

Understanding consumers, organizational stability, security, brand name, integrated marketing, and good customer support are all important for banks (Shaha

& Siddiqu, 2006) Martins et al (2014) and Lee (2009) also contend that, despite the fact that e-banking is a cost-effective form of banking, there has been little research into its positive and resistance factors, while Maenpaa, Kale, Kuusela, and Mesiranta (2008) recommend a shift in research toward e-banking experience Following that, Piyathasanan et al (2015) argue that there are few recommendations for how to better consumers' internet experiences, indicating that more research is required

In Sarokolaei et al (2012) analysis on e-banking hurdles, stability, protection and happiness of customers influence the uptake, while recent research has shown that customer satisfaction and loyalty impact branding in Israel (Levy & Hino, 2016) and service quality in Saudi Arabian (Amin 2016) This is unsurprising given that consumer loyalty has a financial impact on banks (Nagar & Rajan, 2005) According to the literature, further studies should be focused on the consumer experience This analysis vacuum must be filled This study explores security challenges, brand, consumer service, retention, and employee expectations of digital banking as part of new awareness

Some consumers are hesitant to use e-banking due to concerns about risk and confidence (Martins et al., 2014; Kim, Tao, Shin & Kim, 2010) According to Featherman and Pavlou (2003), perceived danger is the possibility of failure in the search of a desirable result by using an e-service They describe seven categories of e-banking risks: efficiency, physical, time, psychological, social, privacy, and overall risks Customers are concerned about stability, according to a recent analysis

by Jun and Palacios (2016), and Wu (2011) investigates the impact of location convenience on customer satisfaction As a result, this study digs further into potential threats and confidence, as well as other digital banking risks to see how they impact consumer experience

According to other reports, managers must prepare and use digital banking effectively in order to satisfy changing customer service demands (Hanafizadeh et al., 2014; Gerrard & Cunningham, 2003) While current data indicates that banks are embracing digital banking, the study found that optimizing consumer service is critical to fulfilling their needs The recommendation also implies that the views of consumers and managers are significant in the adoption of digital banking Privacy and confidentiality were major obstacles to early digital banking adoption (Dimitriadis & Kyrezis, 2010; Howcroft et al., 2002), but Darwish and Hassan (2012) found ways to enhance security However, privacy can still be a concern, as recent research indicates that perceived utility, confidence, and self-efficacy are forecasting variables for telebanking usage in Jordanian banks (Alalwan et al., 2016) This data suggests that digital banking has advanced, but further research is needed to provide a consistent path

1.3 Research Theory

Earlier research has analyzed conditions that drive consumers towards digital banking in many contexts over the past couple of decades, but there is little empirical evidence of market motivation for digital banking (Wang & Wuan, 2014) Theoretical models include: Theory of Reasoned Action (TRA) (Fishbein & Ajzen, 1975), Planning Theory of Competence (TPB) (Ajzen, 1991), Diffusion of Innovation (DOI) (Rogers, 1995), Technology Acceptance Model (TAM) (Davis,

1989), TAM2 (Venkatesh & Davis, 2000), TAM3 (Venkatesh & Bala, 2008)

 Theory of Reasonable Action (TRA)

One of the most common theories used to describe behavioral intention of an individual to perform real behavior is the Theory of Reasoned Action (TRA) (Fishbein & Ajzen, 1975) According to Fishbein and Ajzen (1975), “attitude” is an individual's assessment of an object Behavioural belief is characterized as a relation between an object and any characteristic, and the intention is defined as

“behaviour.” Attitudes are affective in nature, and they are based on a collection of assumptions regarding the object of behavior, for example, the convenience of a credit or debit card A person's subjective norm is their perception of their

immediate community's stance toward those behaviors, for instance: the peers use credit cards or debit cards, and using one is a status symbol

Figure 1: The Theory of Reasoned Action

 Theory of Planned Behaviour (TPB)

To address the lack of variables in the Theory of Reasoned Action (TRA), Ajzen (1991) developed the Theory of Planned Behaviour (TPB), which relates to

an individual's behavioral intention to execute an actual behavior as defined by his/her attitude toward a behavior, subjective norms, and perceived behavioral control The distinction between the TRA and TPB models being that the TPB model has external factors, including perceived behavioral controls, which consumers interpret as restricting their behavior, for example: Should I get a credit card and what are the requirements?

Figure 2: The Theory of Planned Behaviour

 Technology Acceptance Model (TAM)

Davis (1989) improved the Technology Acceptance Model (TAM) to understand computer usage behavior The fundamental TAM paradigm describes two distinct beliefs: perceived usefulness (PU) and perceived ease of use (PEU) The possible usefulness of a digital device is described as PU Similarly, PEU denotes the degree to which the future customer considers the device to be simple to use (Davis, 1989) Furthermore, trust in the digital system is affected by a variety of other influences As seen in Figure 5, user adoption of emerging technologies is influenced by the decision to use the device, which is also jointly demonstrated by perceived usefulness (PU) and perceived ease of use (PEU)

Figure 3: Technology Acceptance Model

 Technology Acceptance Model 2 (TAM2)

The theory of TAM2, suggested by Davis and Venkatesh (2000), provides a thorough description of the following: " include additional key determinants of TAM namely, perceived usefulness and usage intention constructs, and to understand how the effects of these determinants changed with increasing user’s experience over the time with the target system" TAM2 is a unified paradigm that incorporates the SI process as well as the cognitive instrumental process The subjective norm, voluntariness, and picture are all terms used to describe the SI phase Similarly, as shown in Figure 4, the cognitive instrumental mechanism relates to job relevance, output quality, result demonstrability, and PEU

Figure 4: Technology Acceptance Model 2

 Technology Acceptance Model 3 (TAM3)

TAM2 was discovered by Venkatesh and Davis (2000) to have a positive effect on perceived usefulness and individual intention to use an information system Venkatesh and Bala (2008) created TAM3 in 2008 by combining TAM2 (Venkatesh & Davis, 2000) and the model of determinants of PEU (Venkatesh, 2000) According to the TAM3 model, experience moderates PEU to perceived usefulness, machine anxiety to PEU, and PEU to behavioral intention (Venkatesh & Bala, 2008)

Figure 5 Technology Acceptance Model 3

 Unified Theory of Acceptance and Use of Technology (UTAUT)

Venkatesh, Morris, Davis, and Davis (2003) later developed the UTAUT, which combined the concepts of previous models and hypotheses of consumer adoption, four determinants of the intention to use technology are performance expectancy (PE), effort expectancy (EE), social influence (SI), and facilitating conditions (FC) Following that, the behavioural intention and enabling factors determine the technology use Furthermore, the model takes into account the effect

of four moderator metrics (i.e gender, age, experience, and voluntariness use) Nonetheless, the UTAUT paradigm shows its own shortcomings since it was designed for an organizational background rather than a customer one

Figure 6: Uified Theory of Acceptance and Use of Technology (UTAUT)

1.4 Research model and hypotheses about determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam

1.4.1 Research model

The Reasoned Action Theory (TRA) was developed by two researchers Fisbein & Ajzen in 1975, which deals with the determinants of people's actions This model established behavioral intention as the proximal cause of an action Any desire to take part in a certain behavior is determined by attitudes and subjective norms The use of Fishbein and Ajzen’ influential work can be seen in both social & cognitive science and customer behavior

In the field of technology, the intention of using technological services is an awareness of customers’ willingness to use those services, according to Davis (1993) and Venkatesh (2000) The intentions of customers to use the services would

be guided by a number of driving factors (Fortes & Rita, 2016) Several studies have been built on an established model, which is known as the Technology Acceptance Model (TAM) In 1989, based on the TRA, the Technology Acceptance Model (TAM) was released by Fred Davis TAM is a well-known extension of academic science that explores the reception and use of emerging technical

advances (Aydin & Buznar, 2016) By using this model, the desire of the customers

to abstain or implement a new product of information technology can be dictated their intention, which is in turn clarified by two variables: perceived utility (PU)

and perceived easy use (PEU) (Aydin & Buznar, 2016) However, Mathieson et al

(2001) noted that predictive ability of TAM is minimal as there are additional variables which also influence user behaviour in addition to PU and PEU Specifically, the subjective norms from the ToRA was omitted from the TAM Recognizing the constraints, by modifying the original TAM with additional elements, scholars created several extensions such as TAM2 (Venkatesh & Davis, 2000), the United theory of acceptance and use of technology (UTAUT) (Venkatesh

et al., 2003), The simplicity of TAM is preserved and the predictability and explainability of technology adoption is enhanced by these models (Mathieson et

al., 2001)

However, these complicated TAM extension above are only suitably applied when DBS is developed within the context of deleloped countries and the services are diverve and nearly perfect From actual conditions in Vietnam where DBS is quite new, based on the theoretical basis of TAM model & pros and cons of its extensions and the fact that digital banking is quite new and is in the development stage, this thesis is intended to examine the intention of using digital banking with the following determinants:

Intention to Use (INT)

Figure 7: Thesis model

1.4.2 Hypotheses about determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam

 Perceived Usefulness (PU)

Usefulness is described as a customer's perception of the abilities of a new service to offer many advantages and help customers enhance their job results as they use the service (Mathwick, Malhotra, & Rigdon, 2001) It would assess a customer's willingness to try something different in comparison to their

conventional beliefs (Tan & Teo, 2000) Gong and Xu (2004) claimed that

consumers are confident that the emerging technology will fulfill their needs Moreover, according to Awamieh and Fernandes (2005), PU is the belief that the modern service would have greater benefits than existing services to those who wish to use it As a result, the thesis proposes the hypothesis as follows:

H1: PU has a positive influence on intention to use DBS

 Perceived Ease of Use (PEU)

The degree to which an individual believes that using a specific system requires no effort is described as Perceived Ease of Use (Davis, 1989) This calculation is dependent on a metric that determines how the system makes it possible for a job to be completed more quickly, therefore maximizing effectiveness

and improving work quality The aspect is the TAM's second primary factor Davis

further clarified that if it is user-friendly, customers would want to experience a new application In terms of digital banking, users can access and use the services more

easily than with conventional counter ones Therefore, The variable PEU is significant in this thesis because digital banking application is considered groundbreaking, and usability is closely related to the advantages it offers As a result, the thesis proposes the hypothesis as follows:

H2: PEU has a positive influence on intention to use DBS

 Perceived Credibility (PC)

Zhao and Kurnia (2014) defined PC as consumers' willingness to fulfill their expectations on the basis of the service providers The level of consumers’ trust expresses their belief that they are safe when making use of the service, with regards to risks or other matters being inconsequential (Gefen, Karahanna, & Straub, 2003) Furthermore, (Page & Luding, 2013) think that having high levels of trust is crucial when it comes to the use of DBS Stewart (2003) also claims that when consumers have enough credibility in a website or program, they find it more

useful As a result, the hypothesis is proposed as follows:

H3: PC has a positive influence on intention to use DBS

 Perceived Risk (PR)

Since the effects of a user's actions cannot be accurately measured in advance, each user’S behaviour is correlated with certain risks PR is a multidimensional kind that depends on multiple considerations that describe the overall risk involved with implementing particular innovations, technology or services Several studies have shown that PR adversely ìnfluence mobile payment

systems mindset (Muñoz-Leiva et al., 2017) However, in terms of mobile

innovation, Risk is inevitable and appropriate; it is what clients would consider at a certain degree of risk when applying new services (Sweeney, Soutar, & Johnson, 1999) Mobile or internet payment are forms of DBS These services include transactions between people who are anonymous, which raise the probability of financial loss and the confusion regarding identification or quality consistency Without adequate safeguards, a defective transaction can result in unwelcome losses for consumers and potentially higher costs for providers As a result, the hypothesis

is proposed as follows:

H4: PR has a positive influence on intention to use DBS

 Perceived Mobility (PM)

Mobility is utilized to calculate the degree of value gained by an individual

in connection with time, space and access to services The benefits of mobile advancement have given customers the opportunity to connect and share data anywhere and anytime, providing them with the networks and protocols to make this possible This stresses that since customers can make and complete transactions using DBS from anywhere, as long as they have a network link with a mobile rdevices, they will be inspired to continue using those services in the future As a result, the hypothesis is proposed as follows:

H5: PM has a positive influence on intention to use DBS

 Social Influence (SI)

SI is defined by the TRA model (Fishbein & Azjen, 1975) as “one’s perception of the social pressure to engage or not to engage in a behaviour” The entity or community of reference, such as family members, acquaintances, colleagues, celebrities, and means of mass communication, influences the person's own view Vietnam has a culture characterized by collectivism, where individuals belong to collectives This cultural phenomenon suggests that intention of using DBS of a customer would grow if their near ones inspire or entice them to use it As

a result, the hypothesis is proposed as follows:

H6: SI has a positive influence on intention to use DBS

Determinants Effect on Intention to Use (INT) Reference

Fortes & Rita, 2016

Fortes & Rita, 2016

Tram, 2020

Tram, 2020

Table 1: List of determinants and their mechanisim

CHAPTER 2: RESEARCH DATA AND METHODOLOGY

2.1 Research methodology

The science approach is a foundational tool for understanding the techniques

or tools used in the creation of a scientific text Science research employs two major research methodologies in the modeling and study of various phenomena, namely quantitative and qualitative (Queirós, Faria, and Almeida, 2017) The qualitative approach enables researchers to collect in-depth data, find out the significance of the mysterious and conceptually redefine participant history (Marshall and Rossman, 2014) A quantitative methodology is a methodical approach to evaluating relationships among multiple variables (Hoe and Hoare, 2012) It is worth noting that some researchers merge these methodologies into a third methodology called "mix method," with the hope of strengthening and substantiating study results (Schoonenboom and Johnson, 2017)

The quantitative method has been used for this analysis, which is intended to observe and investigate relations between variables As a quantitative study, this thesis focuses on numerical representativeness, which quantifies the data It also adopts standardized protocols and systematic tools for data collection, such as questionnaires and tests In this step, the data are scientifically and systemtically obtained prior to numerical analyses using SPSS (Queirós et al., 2017) A correlation analysis and a multivariate linear regression analysis was performed primarily to test the hypotheses of this thesis

This methodology is highly appropriate for a study to test hypothesis among various structures, according to Zulkifli, Salwana, Salahuddin and Daud (2019) Moreover, it is important to generalize the application of scientific techniques for data gathering and interpretation The analysis of a subject may represent a broad society in terms of samples, content and trends within a specific field or zone (Shank and Brown, 2007; Cohen, Manion and Morrison, 2011) It is also worth noting that multivariate techniques in quantitative analysis allow for multivariate variables to be explored in different ways, optimized ways (Queirós et al., 2017)

2.2 Research process

2.2.1 Overview of research process

Figure 8: Research process

2.2.2 Detailed description of research process

 Topic Selection, Information Collection and Questionnaire Development

The authors have read several empirical research and consulted with the

instructor to make the decision that the research topic is: "The determinants that affect retail customers’ intention to use digital banking services provided by commercial banks in Vietnam”

Through the process of reading and collecting information from previous research, the authors have also developed a research questionnaire based on existing validated models These are: Technology Acceptance Model (TAM) (Davis, 1989), TAM2 (Venkatesh và Davis, 2000), the United theory of acceptance and use of technology (UTAUT) (Venkatesh et al., 2003),… Since a questionnaire tracks answers in a standardized and organized way, an online questionnaire was used to

conduct the survey The questionnaire was created using the online survey platform

named SurveyPlanet because of its high degree of customization, structured data documentation, and real-time data interpretation

The survey was divided into two sections:

Section 1 includes eight general questions about age, gender, occupation, specialization, income, level of use of DBS, names of DBS, commonly used services) to determine the respondents' characteristics and to introduce them to the

topics related to DBS in section 2

1 Please indicate your gender:

o Male

o Female

2 Please indicate your age:

o Gen Z: 7-22 years old

o Gen Y: 23-38 years old

o Gen X: 39-54 years old

o Boomers: 55-73 years old

3 Your occupation is:

o Engineering - Science and technology

o Law - Humanities - Social Science

o Mobile Banking / Internet Banking

o ATM / CDM (ATM with Cash Deposit)

o Digital Banking via Video (Live Bank)

o Digital banking services associated with banks: Timo, Yolo, TNEX,

Übank,

o VCB Digibank, Vietinbank Ipay, BIDV Smartbanking, VPBANK

o Open a loan online / repay a loan

o Buy/sell foreign currency

o Other utilities (Shopping, hotel booking, flight ticket booking, movie

Perceived Usefulness (PU), Perceived Ease of Use (PEU), Perceived Credibility (PC), Perceived Risk (PR), Perceived Mobility (PM), Social Influence (SI) and Intention to Use (INT) are measured in this part The following questions are translated into Vietnamese from English since this survey is designed for vietnamses customers The questionnaire in part 2 was built on the basis of previous

studies (Fortes & Rita, 2016; Liu & Tai, 2016; Thuy, Hien, Hong & Tram, 2020)

PU

PU1) Using digital banking saves transaction time

Fortes & Rita, 2016

(PU2) Using digital banking saves transaction costs

(PU3) Digital banking services improve the efficiency of personal finance operations

(PU4) A banking service that handles large volumes of transactions easily and quickly

PEU

(PEU1) Registering for digital banking is quick and easy

Fortes & Rita, 2016

(PEU2) Using digital banking services is very simple and easy to understand

(PEU3) Users easily own electronic devices to access and use digital banking services

(PEU4) Users can easily use digital banking services proficiently after a short time of

getting acquainted

PR

(PR1) Transactions through digital banking are guaranteed for confidentiality

Liu & Tai,

2016

(PR2) The risk of personal data being stolen is low

(PR3) The ability to secure user data of digital banking providers is high

(PR4) Digital banking service provider will not provide personal information to third

parties without the user's permission

PC

(PC1) I trust digital banking provider because of its brand name Thuy, Hien,

Hong & Tram, 2020

(PC2) I believe that service providers always provide accurate financial services

(PC3) I believe that service providers always provide secure financial services

PM

(PM1) Digital banking service can be accessed anytime

Liu & Tai,

2016

(PM2) Digital banking can be accessed anywhere

(PM3) Digital banking service accessible on a variety of devices

SI

(SI1) My family affects my intention to use digital banking services Thuy, Hien,

Hong & Tram, 2020

(SI2) My friends and colleagues influence my intention to use digital banking services

(SI3) The media that run ads affect my intention to use digital banking services

(SI4) I use digital banking because people around me also use it

INT

(INT1) I will be using digital banking in the near future

Liu & Tai,

2016

(INT2) I am ready to use digital banking in the near future

(INT3) I plan to use digital banking when the opportunity arises

(INT4) I will use digital banking instead of the traditional service

Table 2: Section 2 in questionnaire survey

 Data Collection method

Data were collected throughout April 2021 by an online survey Thanks to means of social network such as Facebook, Gmail,… the author shared the survey link to retail customers who have been using and experiencing DBS provided by commercial banks in Vietnam with the age from 18 to 73 Allrespondents were told

of their completely voluntary participation The author also stressed there is no right

or wrong response, as well as the confidentiality and an anonymity of all data generated by respondents (Podsakoff et al., 2003; Spector, 2006) 170 questionnaires had been completed; however, 11 responses were excluded due to invalidity of the answers, resulting in 159 usable responses in the final sample (93.52%)

 Data sampling method

Convenience sampling (also known as availability sampling) is a form of non-probability sampling process that collects data from members of the population who are readily available to engage in the sample Facebook surveys or questions are a common example of convenience sampling

Convenience sampling is a method of sampling in which the first available primary data source is used for the study with no other criteria In other words, this sampling process entails gathering participants anywhere they can be found, which

is usually wherever it is convenient Prior to topic selection in convenience sampling, no inclusion criteria were established All subjects are welcome to take part