Luận văn improving the quality of internet banking services by using tam model the case of vietnam bank for agriculture and rural development ha thanh branch

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUAN TRI VA KINH DOANH PHAM KHANH HOAN IMPROVING THE QUALITY OF INFERNET BANKING SERVICES BY USING TAM MODEL: THE CASE OF VIETNAM BANK FOR AGRICULTURE

ĐẠI HỌC QUỐC GIA HÀ NỘI

KHOA QUAN TRI VA KINH DOANH

PHAM KHANH HOAN

IMPROVING THE QUALITY OF INFERNET BANKING SERVICES BY

USING TAM MODEL: THE CASE OF VIETNAM BANK FOR

AGRICULTURE AND RURAL DEVELOPMENT- HA THANH BRANCH

NÂNG CAO CHẤT LƯỢNG DICH VU INTERNET BANKING THONG

QUA MÔ HÌNH TAM: TRƯỜNG HỢP CỦA NGÂN HÀNG NÔNG NGHIỆP

VẢ PHÁT TRIEN NÔNG THÔN V' XAM- CHI NHẮNH HÀ LHÄNIE

LUAN VAN THAC SI QUAN TRI KINH DOANH

HA NOL - 2018

DAI HOC QUOC GIA HA NOT KHOA QUÁN TRỊ VẢ KULNH DOANIL

PHAM KHANH HOAN

IMPROVING THE QUALITY OF INTERNET BANKING SERVICES BY

USING ‘TAM MODEL: THE CASE OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT- HA THANIL BRANCH

NÂNG CAO CHAT LUQNG DICH VU INTERNET BANKING THONG

QUA MO DIND TAM: TRUONG HOP CUA NGAN TIANG NONG NGIDIEP

VA PHAT TRIEN NONG THON VIET NAM- CHI NHANH HA THANH

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 (2

LUAN VAN THAC Si QUAN TRI KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS NGÔ VI ĐỮNG

HÀ NOI - 2018

DECLARATION

The author confirms that the research outcome in the thesis is the result of

author’s independent work during study and rescarch period and it is not yet

published in other’s research and article

The other's research result and documentation (exirachon, table, figure,

fonnula, and other document) used in the thesis are cited properly and the permission {if required) is given

The author is responsible in front of the Thesis Assessment Commillec,

Hanoi School of Business and Management, and the laws for above-mentioned

declaration

ACKNOWLEDGEMENT

T would like to thank all the professors of HSB-MBA program, especially Dr Ngo Vi Dung- my supervisor, Then I would like to thank deeply the respondents and interviewees who allowed me to gather enough data for this research T would like to express my thanks to my family, my colleagues and my fellow friends who created convenient conditions and give me encouragement and understanding for me to complete this degree

Tn order to finish this project successfully, T have receive many helps, supports and guidance from many people who | would like to thank sincerely

1 sincerely thank you!

Hanoi, 05 May, 2018 Pham Khanh Hoan

1.4, Disadvantages of Intemet banking,

1.4.2 For custorners

1.5 Technology Acceptance Model - TAM ¬—

1.5.1 Original TAM model by Davis et al (1989)

1.5.2 Lxtended TAM by Pham Thuy Giang (2015) 1.5.3 Extcnded TAM by Nguyen Thi Khanh Trang el al (2014) 1.5.4 Extended TAM by Awni Rawashdeh (2015)

1.5.5 Extended TAM by Kesharwan and Bisht (2012)

1.5.6 Proposed model in the study end seale bullding 1.5.7 8ønle building

Chapter 2: RESBARCII METIODS

2.3 Sanple design ¬— ¬— ¬— s33

Chapter 3: RESULTS, DISCUSSIONS AND RECOMMENDATIONS 38

3.1 Introduction of Agribank- Ha Thanh Branch and Internet banking

3.1.1 History of foundation and development — —

3.2.3 Correlation and regression analysis

3.2.4 Customers’ evaluation on factors m the modbl nein 56

QUHBTIONNAIRE ke ke ke wee BO

Scale rchability testing ¬ ¬ ¬ ĐỒ)

Pearson correlation ke ke ke Kao ĐỂ

LIST OF TABLES:

Table 2.1: Results of interviews with the bank’s customers 30 Table 2.2: Seale of factors im the model Hee Hee wee BL

Table 3.1: Capital mobilization structure of the bank 4

'Table 3.2: Results of credit activities at Agribank - Ha Thanh l3ranch in the stage of

Table 3.7: Level of education ke ke He wee AD

Table 3.1L: Influence of factors on Attitude towards Internet banking services 53

Table 3.12: Influence of factors on Tutention to use Internet banking services #4

Table 3.13: Influence of factors on Actual use of Internet banking services 55 Table 3.14: Customers’ evaluation on perceived usefulness 57 Table 3.15: Customers’ evaluation on perceived ease of use $R

Table 3.16: Customers’ evaluation on allitude of use 59

Table 3.17: Customers’ evaluation on the bank’s website él Table 3.18: Customers’ evaluation on perceived risk — see OB

Table 3.19: Customers’ evaluation an intention to use 64

‘Table 3.20: Customers’ evaluation on actual tse ke se OS

vai

LIST OF FIGURES AND CHARTS

Figure 1.1: Technology Acceptance Model (TAM) (Davis et al., 1989)

Vigure 1.2: xtended LAM by Pham Thuy Giang (2015) ¬—

Figure 1.3: Expanded TAM by Nguyen Thi Khanh Trang et al (2014)

Figure 1.4; Extended TAM by Awni Rawashdeh (2015) ¬—

Eigtre 1.5: Exlended TAM by Kesharwarn & Bisht (2012)

Iigure 1.6: Research model of the study (Adapted from different sources by the author)

vil

24

INTRODUCTION

1 Rationale

‘The rapid development of science and technology, especially information technology industry, has strongly affected all aspects of socio-econamic life, changing porveption and production methods in many business fields and different

economic sectors, including banking (11 San, 2014)

Developing Intemet banking services is an indispensable trend in the modern economy in the stage of international economic integration The benefits of Intemet banking are great for customers, banks and the economy in terms of convenience,

speed, accuracy and confidentiality Intemet banking is a perfect service providing

customer relations, transactions and payment with lhe bank through the network —Tt

is the highest utility service but requires safety and security because the risks from

this activity are not small (Duc Nam, 2014)

The rapid and widespread growth of the Internel has provided the opportunity for companies in many different sectors and businesses Taking advantage of this

opporlunily, banks have introduced Tnernel banking services in recent years

Internct banking products have confirmed the ability of banks to scize the opportunities that the Internet brings In the general trend of commercial banks around the world, commercial banks in Vietrarn are pradnally moving towards retail banking, with the majority being individual customers ‘Ihe main objective of this new model is to help individual workers access banking products and services, orealing a diversificd market B- Barking serviccs are an important distribution chamnel, integral to the development of the retail banking model

Vietnam Banking Association also said that nowadays, about 40 banks have

armounced the deployment of Internet, banking syslem to varying degrees The most

powerful services are Internet banking services of some big banks such as

Vietcombank or Techcombank

The greatesl benefils of Internet banking consisl of convenicnee, minimization

of costs, and saving time of banking transactions With online banking, people

never make bank transactions that convenient and easy Services such as transfer money, bill payment, account information inquiry and online shopping are conducted within only a few minutes from a computer or networked handset, unintertupled by lime (24/7) and limited by space In addition, customers receive increased benefits such as greater discount when shopping online, booking hotel services, hooking travel online, ete

The user is extremely excited about the trend of Intemet banking development in Vietnam In the world, Intemet banking is considered an indispensable trend to develop rolail banking, expand and diversify its products and servives, mainlain and expand ils customers Intemet banking creates an altemative trading chamnel, reduces costs for banks as well as customers, and improves retum on capital Intemet banking is

csncouraged by ils significant contribution to erealing a non-cash economy

With about 53% of the population using the Intemet, Vietnam is a potential market for electronic payment tools that integrate information technology applications into the banking system Mosting the needs and increasing demands of Internet banking users, this service is targeted at Vietnamese banks

Viemam Bank for Agriculture and Rural Development (Agribank) has just launched its Internet banking survices Agribank deployed Internet, banking serviecs

in September 2009, but only stopped at the utility of account information inquiry It

is a great distance compared to other commercial joint stock banks The bank lacked o[ ä longlem pln for the development of this potential service clutmel Recognizing the importance of Internet banking services in the development process of the bark, Agribank began to focus on developing these servives and was always looking for ways to increase the number of customors using the services, especially individual customers

Tn July 2017, Agnbank started to develop ils Tnternel banking services wilh many new utilities such as bank trasnfer within Agribank system, payment service (electricity bill, water bill, tuition fee, etc.), service providers connected to Agribank, submitting national budget, recharge into c-wallet, recharge phone, game card, electronic tax, cross-border payment via Internet banking in Laos Compared

to other banks such as Yechcombank and Vietcombank, Agribank’s Internet

banking services have developed relatively slowly Previously, customers could

only able to transfer money within Agribank system without being able to transfer

money oulside the system, More importantly, Agribank docs not have information

about its customers’ evaluation on its Internet banking and, therefore, cannot have a

basis Lo improve ils services

So, as a current employee at Agribank, I chose the topic "Improving the

quality of Internet banking services by using Technology Acceptance Model: The

case of Vietnam Bank for Agriculture and Rural Development - Ha Thanh

Branch" with the aim to propose some solutions to help Agribank develop its Internet banking services for individual customers, contributing, to improve the competitiveness of Lic bank

their decision about how and when they will use it, notably:

+ Perceived uscfulncss (PU) ‘This was defined by Fred Davis as "the degree to which a person believes that using a particular system would enhance his or her job performance”

+ Perceived ease-of-use (PEOU) — Davis defined this as "the degree to which a person

believes thal using a particular system would be free from effort" (Davis, 1989),

‘The TAM has been continuously studied and expanded - the two major upgrades being the TAM 2 (Venkatesh & Davis 2000 & Venkatesh 2000) and the Unified Theory

of Acceptance and Use of Technology (or UTAU'T, Venkatesh et al 2003) A TAM 3

has also been proposed in the context of e-commerce with an inclusion of the effects of trust and perceived risk on system use (Venkatesh & Bala 2008)

Perceived Usefulness and Perceived Kase of Use: ‘The technology acceptance model (TAM) focuses on two theoretical constructs, perceived usefulness (PU) and its perceived ease of use (PEOU) which influence consumers’ intention of using the system Davis (1989) referred to perceived usefulness as the degree to which a person believes that using a particular system will enhance his or her performance Perceived ease of use is defined as the extent to which a person believes that using a

particular system would be free of effort

Previous studies (Amin, 2007; Cheng et al., 2006, Al-Somali et al 2009) have found that perocived case of usc has a positive cffoct on perecived uscfuilness On the basis of these findings, the following hypothesis for investigaling the customers

of Taiwan’s domestic banks is formulated: Perceived Usefulness and Relative Advantages: In recent years, many researchers have found that consumers are aware

of such: advantages of online banking as uccessibilily, case of use, abundant information, reliability and time and monetary savings, all of which are critical to the success of online banking (Cai, Yang, & Cude, 2008: Pikkarainen et al., 2004, Poon, 2008 ) Moreover, onlinintemet banking users are more likely to perceive relative advantages of the services (e.g., usefulness, ease of use, accessibility, amount of information, ctc.), whercas non-users are more likely to perecive relative disadvantage of the services (e.g., security and privacy issues) (Cai et al., 2008)

The study of Le Thi Kim Tuyet (2011) entitled “Studying the motivation of using Tmlernơl banking services of comsumers im Da Nang Cily” used the Technology Acceptance Model (TAM ) to analyse the factors that influenced the use of Internet banking in Vietmam After analysing the data and assessing the factors affecting the decision Intemet banking user choice of Vietnamese people,

the author concluded that thal to ullracl new customers and retain existing

customers, there should be a combination of a lot of factors The results of this

study were in line with the study of Chan and Lu (2004) in that the perceived benefits of potential users were decreased

But according to Chan and Lu (2004), perceived risk does not affect the perceived benefits of the users This can be explained that the safety and security of

Viemam is not high at the time of the study rescue the level of risk perceptions

alloct the user more on the mandarin the point of using the tcchnology of individuals, the Intemet banking system will be more successful If you can

improve your customer's sense of ease of use and benelils of the bank death in order

to stunulate these two factors, it is necessary to focus on enhancing the convenience

that Intemet banking offers For customers, take measures to increase the autonomy

of the Iechnology of the mdividual (especially the sclf vow) and rminimze the perceived risk of the customer

Proceedings of the 6th Conference of Students for Scientific Research, Universily of Da Nang - 2008 Increased Convenience: Banks need to be associated for technclogical excitement to increase the convenience factor for customers,

Technology transfer helps keep pace with the system Internet banking system in the world, building backup systoms, disaster recovery centers; improve the efficicney of technology exploitation; reduce latency Increased Vohmnteering: ‘To strengthen

this component, there is a need for Mainstream support as well as organizations to

encourage people lo leam computer science, foreign bmguages Victrarn can apply the model of community training; Organizing forums, seminars, newspapers

That makes it people volunteered to use Internet banking more, perceiving their

e

of use also improved Bnhanee condiliensl aulonomy: Tniernet banking will be

betier implemented if measures are taken reasonable cash management The bank

may be associated with non-monelary promoters [ace to make a social impact Tn

addition to pre-use counselling, free tutormg, accurate incident support will be the

foundation that will make the user more confident in the ability to use the public its

modem technology, the case of use of the sense thal is increased Reduce Perecived Risk: To reduce the negative impact of this component, the government needs to support In completing the legal corridor, building a central data management

eonler Commercial banks also need lo have scounly moasures, prevention, risk

ptevention, strengthen cooperation to strengthen the infrastructure, control the

integration process Enhanced ease of use feel: ‘This component depends on the system itself more technology Banks need to establish a Vietnamese interface, a

division of consultancy especially with telephone banking services, creating a clear

interlace, user Lricndliness is important Enlance the benclils: Awareness of the

benefits of Internet banking will be improved upon banks promote Intemet banking

markeling, raining marketing staff profession, Research Center customer center

development 24/7 Strengthening Positive Attitudes: Building Standards in

Communication with Customers: into establish customer relations department,

focus on Telalionship management with e-customer, need Leam professional stall, Intemet banking staff with high self-study spirit Intensify the intended use of Intermet banking: Creating demand for electronic payment; computerization

organizalion, buprove Inlemet connection speed, minimize costs

‘Thus, our study will be the first one that applies TAM for study Internet banking in Vietnam

3 Research objectives

‘The study aimed at:

- Analysing the reality of Intemet banking and customers’ use of internet

banking sorvices of Agribank - Ha Thanh Branch

- Determining the factors affecting customers’ use of Intemet banking services

by applying the TAM

- Proposing some suggestions for Agribank - Ha Thanh Branch to improve the quality of its Internet banking services

4 Research object

The object of the study was the Intoret banking services of Agribank - Ha

Thanh Branch

5 Research scope

Time: The study was conducted m the period of 2016 2017

Location: The study was conducted at Agribank - IIa Thanh Branch

6 Research methods

6.1 Data collection methods

- Secondary data collection: Secondary data was collected directly from Agribank - Ha Thanh Branch, In addition, published data in newspapers, magazines and on the internet will alsa be used in the thesis

- Primary data collection:

+ Direct interview: This method was conducted in several forms such as face- to-face interviews, telephone interviews and questionnaire responses

+ Observation: The author would tave lo use the senses or machines lo observe the behaviours of the subjects in a particular period of time and analyse the

results to get the data

6.2 Data analysis methods

SPSS software would be used to analyse the data collected from the questionnaires Different descriptive and inferential statistical methods would also

be used

7 Thesis structure

In addition to the introduction, conchusion, reference and appendix, the thesis was divided into (our chapters

- Chapter 1: Theoretical background

- Chapter 2: Research methods

- Chapter 3: Results

= Chapler 4: Conclusions

a1

Chapter 1: THEORETICAL BACKGROUND

1.1 Internet banking

Online banking, abo kmown as Internet banking, Internet banking or virtual banking, is anclectronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website The online banking system will typically connect to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services (Wikipedia)

‘To access a financial institution's online banking facility, a customer with

internet access will need to register with the institution for the service, and set up a

password and other credentials for customer verification The credentials for online

banking is normally not the same as for telephone or mobile banking I‘inancial

institutions now routinely allocate customers numbers, whether or not customers

have indicatcd sn intontion io access their online barking facility Customer

numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number Technically, the

customer numuber can be inkecl to any account with the fmancial mstitution that the customer controls, though the financial institution may limit the range of accounts

thal may he accessed to, say, cheque, savings, loan, credit card and sitnilar accounts

The customer visits the financial institution's secure website, and enters the

online banking facility using the customer number and credentials previously sct up

‘The types of financial transactions which a customer may transact through online

banking are determined by the financial institutions, but usually includes inquiring

account balances, tracking recent transactions, electronic bill payments and funds

transfers between a customer’s or another's accounts Most banks also enable a

customer to download copies of bank statements, which can be printed at the

customer's premises (some bariks charge a fee [or mailing hard copies of bank statements) Some banks also enable customers to download transactions directly

into the customer's accounting software ‘The facility may also enable the customer

to order a cheque book, statements, report loss of credit cards, stop payment on a cheque, advise change of address and other routine actions

Today, many banks are itemet-only institutions These “virtual banks” have

lower overhead costs than their brick-and-mortar counterparts In the United States,

many online banks are insured by the Federal Deposit Insurance Corporation (FDIC) and can offer the same level of protection for the customers’

funds as traditional banks

According to Karen et al (2000), Internet banking is a chaunel for the remote

distribution of banking services These services include traditional services, such as

opening a deposit account or transferring finds between different accounts and new

banking, services, such as electronic invoicing (which allows customers to receive and pay bills on the bank's website) With Intemet banking, customers just need to

click to access mosl types of banking transaclions, except for withdrawals (De

Young, 2001) it is an electronic banking service used to perform transactions over

a computer network (Giglio, 2002) It is different from online banking, Intemet connected banks, anywhere in the workd that cuslomers can access the bank's

website from any Internet-connected PC Pikkaraimen and Pahml (2004) define

Intemet banking as an Intemet portal used by customers for various types of

banking services, including payment of invoices for investment Ramath et al (2010) argue that Internet banking is the latest innovation in modem banking

services ATM cards, credit, and debit cards and Herne banking have emerged as distribution channels cffective for traditional banking products Chang (2003) and

Sullivan and Wang (2005) consider Internet banking as a process innovation in

which customers conduct their own banking transactions without the need for a bank teller It also allows non-bank customers to access the bank's website over a

public network while Mobile Banking or a bank computer only provides a restricted

network to existing customers Sara (2007) consider Intemet banking as a banking

service that includes the introduction of bankimg services, fons of loans, account

balance inquiries, money transfers, etc provided by a bank through the Internet Intemet banking is a service in which:

- Customers do not need to buy any additional software, or store data on their

computer or back up information as all Iransactions occur on the bank server over

the Internet

- Customers can carry oul their banking services wherever they ike, but (hey

need a computer, a modem, Wi-Fi or 3G no matter where they are (e.g., at home, at

the office, or af a place outside of the country)

- Cuslomers can usc banking services 24 hours a day, 7 days a week and 365 days a year

In Vietnam: According to Circular 29/201 1/TT-NIINN regulating the safety

and sccurily in providing Internet banking services, Internct banking sorvices (internet banking) are banking services which are provided through the Internet,

including: information on the service provider and its services, information search

services such as customer information scarch, account, balance inquiry and other

information, performance of online financial transactions such as account service,

account transfer, credit granting, account payment and other services as regulated

by the Slale Bank

Intemet banking is a service that banks provide to customers through the

Intemet to conduct inquiries about account information, transfer money, pay bills,

open online accounls, register cards, post borrowing online, cic on the bank's website at any Internet access point and at any time without having to visit the

bank's counter (Intermel banking, 2014) Internet banking is a distribution charmel of

products and services to homes, offices and schools anywhere and anytime With a computer connected to the Intemet, you will be provided and guided the products and services of the bank (Nguyen Truong Giang, 2008}

‘There are quite a few different definitions of Internet banking, but in my opinion, a full concept of Internet banking can be understood as follows: Znfernet banking is an electronic banking service, a remote distribution channel of

banking services, and with just one device (computer, cell phone, etc.) connected

10

io the Internet, customers can perform banking services anytime and anywhere (except for cash withdrawal)

1.2 Levels of Internet banking

Thulani et al (2009) summarize from previous studies and point out that Tntemet banking 1s divided into three levels: fformation level, Level of Information Exchange and ‘Iransaction Level

+ Informational level:

This ts the first basic level af Trternet, banking At this level, the bank markets

information about its products and services on the site and the information is stored

on the server completely independent of the bank's data The risk for banks,

customers is relatively low because there is no link between the server of Internet banking and the internal network of the bank

+ Communicative level:

Tuternot banking allows for the exchange of information betwoon customers and the banking system The information exchanged is limited to activities such as email, account information query, credit application, data update (mame and address) At this level, customers are nol allowed lo make any inansfer Some types offered on Internet banking are querying account information, Query details of

transactions, see tariffs, rates, interest rales, personal dala updates Thos level of risk

is higher than the level of information provided (because the sciver can be connected to the internal network of the bank)

+ Advanced Transactional level:

Internet banking allows customers to conduct electronic transactions with

banks ‘Ihe transactions that customers can perform include account opening, information inquiry, shopping, bill payment, money transler The transaction level

has the highest level of risk because the Internet banking server is connected to the

internal banking network (or the software provider) Therefore, at this level, banks

need to have stricl management, and control,

11

1.3 Advantages af Tnternet banking:

Intemet banking offers certain advantages over traditional banking services Internet banking benefits both banks and customers

channel for banking products (Giglio, 2002), Compared with traditional services,

the cost of Internet banking services is lower and only accounts for 15% - 20% of revenue (while traditional services account for 50% - 60% of revenue) and more,

the cost of setting up Tnlernel banking services is tiuch lower than setting up a bank

branch In addition, the cost of implementing e-transactions 1s much less than the

cost of doing transactions at the bank branch (Sara, 2007)

Internet, banking is cheaper (han other charmels Direct banking at a branch office costs 11 times larger than the Intemet banking service and this is also why banks in the UK provide this service Banks can reduce casts by reducing branch networks, reducing the number of employees (Howerull ot al., 2002) Thulani ct al

(2009) also confirmed that the benefits of Internet banking services to banks are to reduce costs

The quality of Intomet banking services is constantly improving, providing

more and more convenience Customers can meet the transaction needs and are satisfied with the quality of this service This creates new customers for the bank,

increases customer loyalty, and icreascs vorupetitiveness for banks (Thulanii ct al, 2009) The benefits of providing Internet banking services are increasing customer

loyalty, reducing the number of customers moving to other financial services,

providing Internet banking services lo the compelitive edge of banks (Sara, 2007)

12

Banks provide Internet banking services to meet increasing competition (Malhotra,

2010) Internet banking is said to improve customer satisfaction as it can provide

faster, easier, and more reliable service when customers visit the bank's website for

the provision of banking services Hong Kong (Yiu cl al., 2007), thereby inercasing

customer loyalty

Internet banking offers anytime, anywhere service 24 hours a day, 7 days a

week: Through the Intemet, the bank can provide a wide range of banking services,

where customers can lear about banking products and services anywhere, at any

time Internet banking is @ tool to help the bank promote and promote the brand

effectively, thereby improving the competitiveness of the bank When customers feel satisfied with the Internet banking service provided by the bank, information will be spread lo creale a new number of customers (hal cost less, allowing banks to

promote activities (Sara, 2007) Jenkins and Hatice (2007) argue that although

banks provide this service with unsatisfactory service income, while the initial

investment cost is not small, they provide development of the bank in the future

413.2 For customers

Tho introduction of Tnlernel barking has had a significant impsel on the imovation of Internet banking, Internet banking has brought new value to customers Customers save time, money, convenience, done anywhere, quickly and clliviently

With Internet banking, customers can trade with the bank via the Internet at any time (2/ hours a day, 7 days a week) and anywhere, quickly, conveniently, and without having to go to the bank and the transaction is confirmed immediately (Wang et al, 2003; Pew, 2003) Intemet banking offers many benefits to their customers, which provide convenience and accessibility to clients (Karjaluoto, 2003) Tulernct banking is necessary for the development of banks around the world With just a click of the mouse, it is possible to make transactions with flexible time (Vinayagamoorthy, 2006)

With Internet banking, customers can make transactions with the bank via a

computer with Intemet connection without having to go directly to the bank,

helping customers save time (Pew, 2003, Karjaluoto, 2002) Internet banking is

especially suntable lor customurs who have litle time to make direct transactions

with banks and clients who are always moving or have low number of transactions

wilh banks Customers are small businesses when switchmy lo Tnfernet banking

service, the benefits increase significantly, cost savings, time (Malhotra, 2010) This

is the benefit that traditional services can not achieve at a fast, accurate rate

Internet, banking helps customers save money The cost of online transactions

is much lower than that of direct customer transactions at banks because customers

do not have to travel expenses without having to wait time (Iloweroft et al 2002)

Customers cam just make a tansaclion, il saves costs, moncy for customers

(Karjaluoto, 2002; Vinayagamoorthy, 2006; Pooja, 2010 .)

Intemet banking is said to improve customer satisfaction as it can provide

faster, casicr and more reliable scrvicc when customers visit the bank’s website

providing banking services (Yin et al., 2007) Intemet banking allows customers to

make and confirm transactions quickly and in time Just visit a website, customers

can log in, checking, balancing, performing moncy transfers, making payments, making financial investments to help customers effectively manage their assets

Intemet banking brings efficiency to customers, customers can transfer money, manage multiple avcourts ma simple way, easily track their account al any

time and can quickly identify all Any fraudulent activity or threat to the customer's

abcouml before il can occur (Inlemel banking-Pros and Cons, 2014)

Internct banking provides customers with the latest information on exchange rates, lock up financial information of partners help customers increase

investment opporlunilies, increase income

In addition, with the standardization of Internet banking customers are dedicated, accurate instead of depending on the attitude and level of the bank staff.

if the same asset size is small, the bank provides Intemet banking services much lower than banks that do not provide Internet banking We must invest in technology at a greal cost This makes sinall banks less inetined to provids Thternet banking, services Pooja (2010) also argues that banks providing Internet banking

services are more profitable and more efficient than banks that do not provide

However, when they are new, they are not effective because they have to invest in

technology equipment at great cost

The quality of Internet banking services depends on network quality, transmission speed and terminal equipment This affects nore or Tess the quality of the service delivery, the quantity and the level of customer use of the service

With Intemet banking services, banks may be at risk as hackers, computer

viruses can have big consequences for banks, causing distrust of customers for

banks

Tntemet banking is limiled in the scope of service provision Tnlernet banking

service is done via a device (computer, phone .} with Internet connection

In rural areas and mountaimous areas, they lack Intemet access equipment On

the other hand, many areas with no waves and bad waves arc blocked so it is

difficult to access and successfully conduct transactions via Internet banking

1.4.2 For customers

Customers can not make cash or cash withdrawal transactions When

customers want to pay, deposit, transfer money or want te withdraw cash to spend,

il can nol be dune via Tnternet banking service (at customers have lo directly Lo the

bank or can withdraw money at AM ‘This is confirmed in the Pahnila (2002) study

that cash customers can not send (or can not withdraw) their Intemet banking

15

service and that customers nrust come to a bank or ATM branch to do so that service

Customers pay different types of charges for Internet banking transactions

Although the cost of Internet banking services is lower than the traditional methods

of transaction, but to use customer service is subject to a variety of fees such as fees

for (ransfer transaclions, payment customer registralion, membership fee, armual

fee, security device usage fee

Security: A disadvantage of Internet banking is that security capabilities can

be threatened by compuler hackers and scammers Customer accounl mformation

can be hacked by hackers, stolen mouey on the account Nguyen Truong Giang (2008) also said that the security of Internet banking is not as high as Tome Barking scrvicc On the other hand, it is limited to requiring complicated

transaction confirmation

Intemet banking is difficult for beginners, with older people Although some

banks on the site offer demos on how to use or have direct instructions from bank

staff about how to use this service specially for older people having trouble using

the Intemet, remembering login passwords, using services with utilities

Titemst banking with only one device (computer, mobile phone ) wilh

Internet connection, customers can carry out banking services provided via Internet

banking anytime, anywhere Customers can not access Intemet banking if the

device is not connected to the Intemel or cusiomer transactions become difficult, making the transaction unsuccessful if you suddenly lose your Intemet connection

or slow cormection

Internct banking services are not satisfactory to customers at high level such as

the registration of customer service must still directly to the bank branch or the provision of higher quality Tnternet banking services such as services investment fund management, financial leasing services, real estate business services have

not yet been developed

16

15 Technology Acceptance Model - TAM

1.5.1 Original TAM model by Davis et at (1989}

TAM has overcome the limitations of TRA and TPB theory in the following points: First, both TRA and TPB believe that factors influencing behavioural

intentions arc behavioural altitudes, subjective norms and behaviours sensory

control, whereas the intention of the individual's behaviour may be influenced by

other factors; Secondly, both TRA and TPB argue that behavioural intention determines the behaviour used, but from imteritional behaviour leading to actual use takes a certain amount of time, during which time fish personality can change

behaviour, Thirdly, in the forecast model of both TRA and TPL, it is assumed that the actions of individuals will be based on certain criteria, but individuals do not

necessarily act according to the predicted criteria ‘I'he modified ‘AM theoretical model developed the TRA model for predicting technology adoption

The TAM model consists of lwo mam components: perceived usefulness, and perceived ease of use These two factors directly affect the attitude of using

technology Useful feeling (PU) is defined as the extent to which peaple believe

using this particular system will increase the success of Uneir work Fase of Use (PDOU) is defined as the user's assessment that the system will be easy to use and

require little effort

Davis ct al (1989) show that the case-of-use factor directly mthucnces the

perceived usefulness ‘he perceived usefulness and ease of use then directly affect

the altitude of use and indirectly affect the mention to usc technology

The TAM has the limitation in that the attitude of using the technology of the

individual is limited ‘This is due to the usefulness and ease of use, but the attitude of

users is also influenced by many factors such ax the impact of sovial environment

and security.

Pensiunf Usefysness

đỤ}

Erterral

'Variaek

Perceivert Face of Uxe

Figure 1.1: Technology Acceptance Model (TAM) (Davis et al., 1989)

‘The TAM was proposed by Davis et al (1989) to fully explain users’ behavior

towards new technology However, in different areas, to enhance the predictive

power of TAM, especially when using TAM to prediel innovative products or

services, researchers and scientists around the world have proposed and used

expanded variants of TAM The studies have proposed and added many other

variables such os reliability (Sukkar and Hasan, 2005; Chong cl al, 2010,

Dimitriads and Kyrezis, 2010), perceived risk, social influence and price concern

(Kesharwani & Tripathy, 2012) In the field of Intemet banking, TAM extensive

models are used in the following studies

1.5.2 Extended TAM by Pham Thuy Giang (2015)

Pham Thuy Giang (2015) conducted a study with the aim to analyse consumer

behaviour towards the quality of Internet banking services on the basis of applying

extended TAM (combining behavioural intention theory, technology acceptance

theory, information systems success model) at Vietmamese commercial banks ‘The

author conducted a sample survey with 1,200 customers (including 600 customers

who have used and 600 customers who have not used Trternet banking services)

During the study, the author used Cronbach's Alpha and the Exploratory Factor

Analysis (BFA) to re-evaluate the scale After eliminating inappropriate variables

and oblainimg the official scale, the author evaluated the factors affecting consumer

behaviour and the quality of Internet banking services The research model

proposed by the author was as follows:

18

Figure 1.2: Extended TAM by Pham Thuy Giang (2015)

1.5.3 Extended TAM by Nguyen Thi Khanh Trang et al (2014)

The study focused on identifymg factors affecting the intention la uxe and

quality of Internet banking services of individuals using banking services in

Viemam The surveyed subjects were students from K-12 to KS (Regular full time)

of University of Economics - Hue University The research model used was the

extended ‘TAM which was developed based on the ‘1AM of Davis (1989) with such

variables as perceived usefulness, perceived ease of use, and attitudes toward

Internet banking In addition, the model added two variables including internet

experience and perceived risk and some exogenous variables based on the

19

observations of the authors and in-depth interviews with some experienced bank

managers

The data was collected through a survey with 360 customers Confirmatory

Fastor Analysis (CFA) teckmique was used lo confirm the proposed measurement model from theary Structural equation modeling (SEM) was used to explore the

structural relationship between faclors (inddett vanables) The analysis resulls

showed that the proposed model perfectly matched the market data The factors in

the research model could explain 48.6% of the intention to use Internet banking

services of regular full time studenis al Universily of Reonomics - Hue University

The research model proposed by the authors was as follows

Vigure 1.3: Expanded ‘TAM by Nguyen Thi Khanh Trang et al (2014)

1.5.4 Extended TAM hy Awni Rawashdeh (2015)

Awni Rawashdeh (2015) conducted a study on "Factors affecting adoption of Internet banking in Jordan to identify and analyse factors affecting the acceptance

to use Internet banking, thereby assessing the quality of Internet banking services in Jordan The survey respondents included 390 accountants who repularly used

Tniernet banking serviees al commercial banks Aler using the research methods

such as exploratory factor analysis, Cronbach's Alpha, SPSS software, the author

built an extended TAM consisting of five variables: perceived usefulness, perceived

case of use, 4 curity of the website, atlilade and ineriion to usc.

Figure 1.4: Extended TAM by Awni Rawashdeh (2015)

15.5 Extended TAM by Kesharwani and Bisht (2012)

Kesharwani and Bisht (2012) carried out a study on “The impact of trust and

pereeived nisk on Taternel banking adoption in Tndia" with the aim to identify the

factors affecting the intention to use Internet banking of individual customers at

commercial banks in India The study also focused on finding out the most

important, factors, then proposing some recommendations to furthor improve the

quality of the services and increase customer satisfaction

The research was conducted wilh a sample of 1.050 posigraduale students

using Internet banking in India After being collected, invalid data were oxcluded

and valid data were processed by SPSS 22.0 software Cronbach's alpha coefficients

were calculated for reliabilily using SPSS The Cronbach's alpha coefliciont is

calculated from the SPSS software In addition, factors were taken into the

exploratory factor analysis to eliminate inappropriate observed variables After

conducting a lnear regression analysis to determine the influence of factors on

customers’ intention to use Internet banking services, Kesharwani and Bisht (2012)

proposed a research model consisting of 8 variables: reliability, website design,

perceived behavioural control, perceived risk, perceived usefulness, perceived ease

of use, attitude and intention to use,

Perceived

usefulness

L—»l

Website design

Perecived risk

Figure 1.5: Extended TAM by Kesharwani & Bisht (2012)

1.5.6 Proposed model in the study and seule building

‘After studying the original ‘AM and extended ‘IAMs which were used to

evaluate the quahty of Thternel banking services al commercial banks, the author

decided to choose the original TAM of Davis (1989) and add two more factars of

website design and perceived risk as the research model for the study

| The selection of the original TAM consists of elements: Perceived

usefulness; Perceived ease of use, Attitude towards H-banking; Intention to use H-

banking; Actual use of E-banking The choice of these factors is due to the cause

- The original TAM was the basis of all other extensive researches

- ‘The original ‘AM was used to propose the solutions to improve the quality

of Internet banking services by many authors in developed countries such as

2

Germany (Dimitriads & Kyrezis, 2010) or in developing countries such as Taiwan (Tzung-I Tang et al., 2004; Chong et al., 2010) Therefore, the original TAM model was popular and frequently used

- Faelors in the original TAM were tested to be statistically significant for customers’ intention to use Internet banking in all studies using the extended TAM Therefore, the factors in the original TAM were highly reliable

+ The addition of two variables including website design (adapted from research models by Pham Thuy Giang, 2015, Awni Rawashdeh, 2015 and Kesharwani and Bishl, 2012) and perceived risk (adapted from research model by Kesharwani and Bisht, 2012) was due to the following reasons

- In terms of Website design: The characteristic of Internet banking is that customers conduct tansactious Urough clovironic gadgets and the bank's website system is essential for customers to log in and carry out the transactions ‘Therefore, the website design has an important role in improving the quality of Internet banking scrviecs, The fricndlior the website system is and the more attractive the interface is, the more st can attract customers Vor this reason, the author added website design into the proposed research madel

- Tn lerims oÏ pereeived risk: Interne! banking services are online services Customers can actively conduct transactions without having to go to the branches and transaction offices of commercial banks Transactions are conducted through

the eclronic gadgets, so there might be risks in the tamsaction proce: such as disclosure of customer information, customer losing money, and so on In order to

provide Tntemet, banking services, banks mus pay spectal attention {o the security

and confidentiality of the system, minimize the risks arising and guarantee the

interests of customers lor this reason, the author added perceived risk to the

proposed research modck

With the above mentioned bases, the researcher proposed the research model

as follows:

- Perceived usefulness: is the fact that customers believe that using a particular

Internet banking system will improve their performance (Davis, 1989) With

Intemet banking services, customers can save time and money, and sit at one place

to use most banking services such as money Wansfer, savings, personal account

checking, bill payment, and so on

- Perceived ease of use: is the fact that people believed to be able to use a

particular system without effort (Davis, 1989) This factor has a greal influence on

customers’ intention to use Internet banking Customers will use the services if they

feel that the use of these services does not require expertise and effort ‘Lhe services

are casy lo understand and can be used smoothly without difficulty

- Altitude towards using Internet banking: is the positive or negative

perception of an individual towards using a system (Fishbein et al., 1975)

- Perceived risk is the perceplion of risks thal may occur during the use of

products and services (Kesharwani & Lisht, 2012)

- Website design: is customers’ perception of the professioual, beautiful and easy to use features of an Intemet banking website (Fishbein et al., 1975)

- Intention to use Internet banking: is considered as customers’ intention to use

Internet banking services, which is different from thei use habits (Cheng & associates, 2006)

15.7 Seale building

Based on previous studies, the author adapted the factors in TAM as follows:

Table 1.1: Scale of factors in TAMs

Porecived Intemet banking helps — | Davis (1989), Podder (2005)

quickly and economivally

Internet banking helps complete the transactions easily

Perceived ease of Internet banking is as

easy to use as other

Cheng et al (2006), Giovanis et al

electronic payment services

The way to use Internet | Cheng et al (2006)

banking is clear and casy

Using Internet banking is

a wise decision in this

period

Pham Thi Minh Ly & Bui Ngoc Tuan Anh (2012), Chong ct al (2012)

The websile’s conlenls

are simple, easy to

understand and casy to

Using Internet banking

docs nol have a big influence on personal and

family life

Intemet banking has @ high level of securily and confidentiality

Account information and

password are always

secured by the bank

Twill use Internet Ajzen & Fishbem (1975), Davis

banking when | have (1985)

cnough conditions

(financial capaoily, service fee)

Tusually use Internet Kalinic & Marinkovic (2015)

benking instead of going

to the transaction office

Using Internet banking is

an inevitable thing when 1 need to conduc banking

(ransachons

I will definitely use

Internet banking in the

Nguyen ‘hi Khanh Trang et al (2014)

Source: Summarized by the author

Chapter 2: RESEARCH METHODS

2.1 Research process

The rescarch process was carried out as follows

Figure 2.1: Research process

Research problem Studying factors affecting customers’ intention to use 1J-banking services

- Survey withn 200 - Cronbach’s Alpha

As the general objective of the thesis was to apply the [AM in studying

customers’ intention to use Intemet banking services and find cut measures to influence this behaviour, the study would be conducted with the TAM After

identifying (he research problem, the author studied the theoretical framework and

identified analysis The theoretical framework and analysis methods of the thesis

included the following main conlents: Theory of TAM, factors affecting cuslortiers”

behavioural intention to use, and previous studies which applied TAM in customer

behaviour research From this, the author would select and build a research model

suilable to the Lopie

‘To achieve the research objectives, the author went through two main research phases: Data collection and data analysis with quantitative method After collecting the survey data, he quantitative research would consist of the following steps:

2.2.1.1 In-depth interviews on affecting factors

‘To conduct the preliminary research, the author used the technique of face-to-

face discussion Face-to-face discussion is a technique used for collecting data

through a discussion belween two people: the researcher and the responder

(Nguyen Dinh Tho, 2011) A face-to-face discussion helps the researcher clarify

and have better insights of the contents directly related to the factors affecting the

consumer belwiour during (heir use of Internet banking sorvices at the Branch Due

to the technical characteristics of the research, direct discussions with experienced

experls is very necessary and io-depth interviews help the authar gel a beller

overview of the business situation of Internct banking services and factors affecting,

the behaviour of customers using Internet banking services With these

characteristics, it is very important to select experts for interviews

Tn this study, the author selected the survey respondents including: Customers

who were using Internet banking services of the Branch for at least 3 months;

respondents for in-depth interviews consisted of the Branch’s leaders, employees

and cuslomers Due to limited research conditions, the author only conducted in-

depth interviews with 10 people (two leaders and three employees, and five

customers) During the interviews the author clarified each factor through the

definilion of cach component of the faclor group as well as the queries of the

interviewees about the factor group that influenced the behaviour of customers who

were using Internet banking services of the Branch The number and types of

respondents for in-deplh interviews were summarized in the following table,

‘Table 2.1: Results of interviews with the bank’s customers

Factors selected | Num : imlerviewees 9%

options

respondents, the selected options were either 9/10 or 10/10 These results also

showed that the respondents agreed with the factors in the model proposed by the

author With these results, the author would select this group of factors to conduct

the formal study wilh the questionaire

30

2.2.1.2 Building and adjusting preliminary research scale

To prepare for the formal survey the research scales were developed and used

by indepth interviews with the aim lo identify the factors affecting customer

behaviour as well as the appropriateness of the scales proposed in the study he

purpose of the pilot interview was to identify and clarify unclear questions and

amuibiguous questions Based on the resulls of the in-depth huerview, (he anthor

adjusted the scales in the questionnaire before conducting the large-scale formal

survey with a large sample size

2.2.2 Formal research

The formal survey data was collected with a questionnaire In this questionnaire,

the author used the closed-cnded questions with the 5-Likert seales as follows

The questionnaire was designed for direct interviews The respondents were

customers who were using Intemet banking services at the Branch

The questionnaire consisted of two main parls

+ Part Tincluded personal information of the respondents such as gender, age,

income and level of education

+ Part 2 meluded factors affecting customer behaviour according to TAM

‘Table 2.2: Scale of factors in the model

HICNI Tniomet banking of Agritank helps complete the Perceived ⁄ transactions quickly and economically

usefulness HICN2 2 Internet banking of Agribank helps complete the 5

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