Internet banking using intention in vietnam

Moreover, it is an attempt to extend more variables by adding two more variables including added service and government support from the other existing research to help introduces the bi

ABSTRACT 6

ACKNOWLEDGEMENTS 7

Chapter 1 Thesis introduction 8

1.1 Chapter introduction 8

1.2 Background 8

1.3 Motivation and research questions 10

1.4 Data and methodology 11

1.5 Contribution and implication 12

1.6 Chapter Conclusion 12

Chapter 2 Literature review 13

2.1 Chapter introduction 13

2.2 Internet banking and overview of Vietnam case 13

2.2.1 Internet banking 13

2.2.2 Overview of Vietnam internet banking 16

2.3 Literature gap 19

2.4 Hypothesis development 26

2.4.1 Variable Y: Internet banking using intention 26

2.4 2 The variables X 27

2.4.3 Demographic factors 35

2.5 Chapter conclusion 38

Chapter 3 Data and Methodology 39

3.1 Chapter introduction 39

3.2 Variables and sample procedure 39

3.3 Model testing 45

TABLE OF CONTENTS

3.4 Chapter conclusion 46

Chapter 4 Result analysis 48

4.1 Chapter introduction 48

4.2 Demographic result 48

4.3 Variable result 50

4.4 Reliability analysis result 53

4.5 Exploratory Factor Analysis (EFA) 55

4.6 Linear regression result 56

4.7 Discussion on the hypotheses 1 and 2 58

4.8 Discussion on hypothesis 3 62

4.9 Discussion on the research questions 64

4.10 Chapter conclusion 65

Chapter 5 Thesis conclusion 67

5.1 Chapter introduction 67

5.2 Review of research questions, hypotheses and result 67

5.3 Contribution 68

5.4 Implication 69

5.5 Limitation 70

5.6 Future work 70

REFERENCE 72

APPENDIX 75

A1 Detail table of mean and standard deviation of items 75

A2 Data result from SPSS solution for Variable Y 78

A3 Factor analysis 78

A3.1 KMO and Barlett’s test 78

A3.2 Total variance explained 78

A4 Linear regression analysis 80

A5 Demographic analysis 83

A5.1 One way – ANOVA analysis 83

A5.2 Independent samples T-Test 85

A6 Questionaire 87

LIST OF TABLES

Table 2-1: The e-banking service of some banks in Vietnam 17

Table 2-2: Research model 37

Table 3-1: The summary of items of variables 40

Table 3-2 : Content of demographic factors 45

Table 3-3: Sample procedure 47

Table 3-4: The summary of data and methodology 47

Table 4-1: Demographic profile 49

Table 4-2: The summary compared mean and standard deviation of items 50

Table 4-3: The summary of reliability test 54

Table 4-4: KMO and Bartlett's Test 55

Table 4-5: Total Variance Explained 55

Table 4-6: Rotated Component result 56

Table 4-7: Model Summary 57

Table 4-8: Model ANOVA 57

Table 4-9: The linear relationship result 58

Table 4-10: Demographic impact result 62

Table 4-11: Result on the independent t-test on 2 selected ariables 63

Table 4-12: Research question and hypothesis related 65

ABBREVIATIONS AND SYMBOLS

Std Dev Standard Deviation

TAM Technology Acceptance Model

TPB Technology Planned Behavior

SYMBOL

I would like to thank my supervisor - Doctor Quoc Pham Phu due to his enthusiasm tutorial, careful guidance, remarkable patience, useful feedback and spiritual encouragement Without his concern, I can’t finish my thesis here

Moreover, I would like to thank the comments from the board on my work which helps me revise my paper in the good way

Finally, I would like to thanks other individuals and the respondents who contribute to my thesis done

April 21, 2014

Hiep Phan Duy

Thesis introduction Chapter 1

1.1 Chapter introduction

This study here mentions about the individual users’ intention to use internet banking in Vietnam In term of adoption, it further investigates the impact of variables extracted from technology acceptance and the external environment theory on Vietnam internet banking adoption Specifically, the thesis examines the variables of convenience, availability and accessibility, content and design, speed, security, privacy, bank image and management, fees and charges which are identified in a research about Malaysia internet banking adoption Moreover, it is an attempt to extend more variables by adding two more variables including added service and government support from the other existing research to help introduces the big picture about the impact of the variables on internet banking using intention in Vietnam adoption

The content of this chapter includes 6 main parts Part 1.2 is about the background on the variables which are argued to have the impact on internet banking using intention in Vietnam adoption Part 1.3 declares the motivation and the research questions of this thesis Part 1.4 introduces the research objectives and the hypothesis Part 1.5 describes in brief the data, methodology and the result analysis Part 1.6 discusses about the contribution and implication which are expected from this working paper Finally, Part 1.7 summaries the structure of thesis

1.2 Background

The variables mentioned in the thesis are the current argument about the impact

of the technology acceptance model and external environment factors on the internet

banking users’ adoption Actually, the technology acceptance model (TAM), the technology planned behavior (TPB), the external factors or the structural model… are conducted popularly in the previous studies for a purpose of finding out the internet banking preference in many markets including Vietnam market For instance, it comes out here with 2 studies which mentioned about internet banking using intention in Vietnam Chong, Ooi, Lin and Tan (2010) work on the perceived usefulness, the perceived of use, the trust and the government support as the key impacts on internet banking using intention in Vietnam adoption Moreover, Pham, Cao, Nguyen and Tran(2013) investigate about the impact of perceived risk, the perceived ease of use, the perceived benefit, the trust, the perceived risk, the bank image, the subjective norms on the intention to use Vietnam banking adoption Both 2 studies here build up the basic variables which come from the technology acceptance model and the technology planed behavior These ideas are certainly the background for the development of specific variables like the convenience, the availability and accessibility, the content and design, the speed, security, privacy… in the recent studies Actually, these variables appear with the Malaysia studies about internet banking using intention Poon (2008) identifies10 variables including the convenience, the availability, the accessibility, the content, the design, the speed, the security, the privacy, the bank image and management and fees and charges Moreover, Sohail and Shanmugham (2003) explore the variables like accessibility, reluctance, costs, trust, security, convenience and ease of use

1.3 Motivation and research questions

As mentioned in the part 1.2, the Malaysia authors use the more detail measures to explore the variables with users’ adoption momentum of internet banking

in Malaysia This one motivates my attempt to follow this way to find out something for internet banking using intention in Vietnam These more detail variables to the internet banking acceptance bring me out with the question as follow:

Research question 1 (RQ1): Do the variables including convenience; availability and accessibility; content and design; speed; security; privacy; bank image and management; fees and charges affect the internet banking using intention

in Vietnam?

Beside the variables from the Key study, there is an attempt to add some more variables to bring out the bigger picture about the internet banking users’ preference The added ones come from the other existing papers about internet banking using intention in both Vietnam and foreign market as an extension with this research

Research question 2 (RQ2): Do the added variables including government support and added service affect the internet banking using intention in Vietnam?

Finally, Demographic factors are mentioned in this thesis; however, they are the selected ones which are supposed to be the suitable factors with internet banking using intention in Vietnam situation

Research (RQ3): Do the demographic factors including gender; age; education level; income level and internet accessibility have the impacts on the internet banking using intention in Vietnam?

Certainly, the thesis is to find out the answer on the three main objectives The first objective is about the impact of variables from the study in Malaysia to internet banking using intention in Vietnam Poon (2008) explores the significant impact of variables like convenience; availability and accessibility; content and design; speed; security; privacy; bank management & image and fees & charges The second objective is to confirm the significant impact of the added variables on the thesis model Bauer, Hammerschmidt and Falk (2004) argue about Added services as the quality portal of internet banking to the customer benefit which is my first added variables in this thesis Moreover, Chong, Ooi, Lin and Tan (2010) figure out the important role of government support determinant in Vietnam; therefore, it can’t be ignored to become the second added variables with this thesis Finally, the third objective is about to examine Demographic factors on the Vietnam banking adoption These factors are extracted from the Malaysian research to be worked out here in the

thesis Demographic factors are investigated dependently beside the main variables

1.4 Data and methodology

A questionnaire is prepared to collect the information of the Vietnamese users These persons take a survey about the variables as above to the internet banking acceptance The data from the survey is crunched with the three steps of analysis including reliability test with cronbach alpha; the exploratory analysis (EFA) and the linear analysis The result from the regression relationship is used to work on discussion, contribution and implication

1.5 Contribution and implication

This thesis has some contributions for the academic research when it continues

to explore the behavior of internet banking users on the theories of technology acceptance model and external environment factors Moreover, an attempt to add up the variables from the foreign studies helps the researchers in Vietnam have more idea

on the topic of internet banking adoption Furthermore, the relationships between the variables as well as Demographic factors to internet banking using intention in Vietnam can support for the key papers and give out some implication Thus, the implication of this thesis is the interest subject to the academic researchers, Vietnam internet banking users

1.6 Chapter Conclusion

The thesis here consists of 5 chapters including introduction, literature review, methodology, result and conclusion which helps find out the answer for the relationship between the detail variables and the internet banking using intention Actually, the next chapter discusses about the literature background for the thesis topic

Literature review Chapter 2

2.1 Chapter introduction

The literature review is an important chapter which introduces the rationale to develop any research Here, I would like to take advantage of the existing studies on internet banking using intention to build up my own story This step certainly enhances the reliability on my thesis The reference sources for my topic are absolutely matched with the larger number of existing studies and papers

Thus, this chapter consists of the 3 main parts The first one mentions about the overview of Vietnam internet banking The next one argues about the gap of my study Finally, the variables and the hypotheses are developed into detail

2.2 Internet banking and overview of Vietnam case

but also for the banks themselves (Nehmzow, 1997) It is certainly that the e-banking helps bring out a revolution of marketing distribution channel in the banking industry which even supplies better service to their clients At present, the internet banking in the period of globalization is appreciated as the competitive advantage rather than the other ways of channel distribution (Flavián, Torres & Guinalí, 2004) Finally, Karjaluoto, Mattila and Pento (2002) argue that the customers can access to their account anytime and anywhere with the internet banking The long time transaction with the traditional bank is eased as the click of computer mouse

The definition of the e-banking adoption may be a bit different among the studies Chong, Ooi, Lin and Tan (2010) argue in their research that the internet banking has the working machine like the old banking service; however, the key point here is electrical usefulness Moreover, Young (2001) says that the customer can do many things with the internet- banking with the click anywhere They can transfer money between the account, check the transaction record, make a payment and many things else Otherwise, Pham, Cao, Nguyen and Tran (2013) claim that the term e-banking should be the common concept rather than the banking service with the internet; however, the customers accept this concept when they can take advantage of the service of bank via the technology device such as computer, smart phone and ipad

It is certainly that at the beginning period of internet banking, the term e-banking is understand as the popular way like what is happening at present Before these authors, Daniel (1999) mentions that the banking service supplies to the customer by the computer, mobile phone and even the television called the e-banking It can be an old story about e-banking because there are many theses about this issue However, in my

research, I would like to mention again the concept of e-banking which would be my target under investigation Actually, the e-banking is understood as the connection between banks and customers in attempt to solve the demand of financial transaction and recording (Pham, Cao, Nguyen & Tran, 2013).In the development of technology, Sathye (1999) believes that the e-banking supplies to its clients the online payment for the online business along with the other added service which helps the clients have more options

As the studies review above, it is clearly that the internet banking service supplies the clients with many benefits Jayawardhena and Foley (2000) say that the e-banking changes its client’s activity It helps the customer have more power to control their account and have not to pay attention on the location and time Pham, Cao, Nguyen and Tran (2013) in their research about e-banking adoption in Vietnam believe that the e-banking in Vietnam certainly provide its customers the authorization

to access their account whenever they have a demand Moreover, the e-banking in Vietnam brings about many kinds of service to guarantee the convenience, time saving This thing may help its client save time On their other hand, the banks can explore some advantages from the e-banking service Jayawardhena and Foley (2000) think that the banks can enjoy the cost reduction from the e-banking service Like what happened in the developed countries, the Vietnam banks in the beginning period

of growth increase their branches throughout the country The purpose helps enhance the bank image with the geographic category and provide the face to face service to the potential clients However, this strategy ought to deal with the huge investment cost and the sub-management issue Therefore, the occurrence of e-banking service

can help ease these disadvantages of the marketing strategy Pham, Cao, Nguyen and Tran (2013) suppose that the cost for developing the traditional service is higher than the online banking Before develop more on the literature review on the internet banking adoption, there is a brief of the current Vietnam internet banking industry here

2.2.2 Overview of Vietnam internet banking

The Vietnam banking industry grows strongly when it becomes a member of WTO The capital market; therefore, is quickly dynamic with the boom of banking industry Moreover, the trend of globalization blows the international trading up A massive number of foreign banks are established in Vietnam We can give out here some famous names like ANZ, HSBC, Standard charters, Citibank… and many others come from Malaysia, Japan and Korea Be along with a large number of local big banks like Vietcombank, Vietinbank, ACB…

In term of the banking service, most of Vietnam big banks try to supply the full service to their customer The card service, ATM machine, customer care, promotion

… are provided to their clients The e-banking service is usually the options to the users When the clients open the bank account in Vietnam, they are offered to fill out some papers and decide whether to take the e-banking service or not Some banks charge of the initial fee to use this service whereas some ones else do not However, the maintain fee is applied by most of banks

The users in Vietnam utilize the e-banking to access their financial transaction checking, transfer money and e-shopping With the next young generation, this service

contains a big potential to change the way of financial transaction Here, some of big banks in Vietnam with their e-banking service are listed as follow:

Table 2-1: The e-banking service of some banks in Vietnam

Most of these banks here are popular in Vietnam The e-banking service of them have the same contents including checking financial transaction, transferring cash, making a payment and supporting the credit card… Moreover, the mobile version is offered to help their client enjoy the convenience Beside the big banks in Vietnam, the medium size bank in Vietnam tries to invest about the online banking

It is certainly that the internet banking become common in Vietnam; however, its benefit for both banks and customers should be under the investigation For instance, some persons do not believe into the security of internet banking and the service is not satisfied with the client’s demand and others… The retail banking once faces to the unsuccessfulness because the individual client can’t believe about what the online service can help them (Stewart, 1999) Moreover, Ahmed, Feroz, Islam and Tarikul (2008) claim that the banks in the developing countries ought to choice their own marketing strategy which is about the kind of delivery or the sophisticate service

to this delivery Vietnam is a developing country and its banking industry appreciates the internet banking as an important strategy in the future Therefore, the thesis here finds out something to discuss about this issue It is not only the impact of the technology acceptance, the external environment factors but also the demographic impact on the intention of using internet banking Furthermore, there is a doubt that Vietnamese clients’ like the banking deal It can be that the clients would like to deal face to face for the financial transaction rather than the online without practical contact Hiltz, Johnson and Turnoff (2006) argue that the customers who are interested

in the emotional and socio-emotional have a tendency to face to face transaction rather than a boring online machine The examination from the research here may find out something about this situation For one more thing, it can be that the difference on demographic signal in Vietnam context can lead to the variance of e-banking favor Poon (2008) mentions about Demographic factors on the e-banking adoption

In a conclusion, the popularity of e-banking adoption topic is understandable The behavior of internet users is the subjective of many researchers around the world For instance, web retailing adoption explores the nature of internet users Web retailing behavior (O’cass & Fenech, 2003) Moreover, the financial behaviors in banking industry are also the attractive problem to the scholar such as Consumer Financial Literacy and the Impact of Online Banking on the Financial Behavior of Lower-Income Bank Customers (Servon & Kaestner, 2008) In the South East Asia, some authors from Malaysia have the works on the e-banking service related to the customer favor (Sohail & Shanmugham, 2003) or the customer adoption to the e-banking acceptance (Poon, 2008) In Vietnam, The e-banking, many studies are

conducted both the local master students and the foreign master students The common models are about the technology acceptance model and the external environment factors For instance, Chong, Ooi, Lin and Tan (2010) investigate 3 variables of technology acceptance and 1 variable of external environment Moreover, the structural model is mentioned with many hypotheses built (Pham, Cao, Nguyen & Tran, 2013) In the part 2.3 right here, the thesis gap is given out in detail

2.3 Literature gap

The technology acceptance model is applied popularly to measure the reaction

of the users to the technology product or service; however, the recent variables explored gradually give out the new concerns Davis (1989) introduces this model including the two main factors including the perceived usefulness and the perceived ease of use to predict the intention of user to the technology choice These two variables later are applied with a large number of studies about the internet banking For internet banking using intention in Vietnam, Chong, Ooi, Lin and Tan (2010) conduct an empirical analysis which is based on the technology acceptance model (TAM) They work on both two main factors including perceived of usefulness and perceived ease of use They argue that the perceived usefulness is what the internet banking help to improve its customers’ life quality This quality seems to be the convenience on which the customers can access the internet website; check the current status of their financial account; manage their financial position and conduct the transactions on their cash flow In term of the perceived ease of use, the customer has

to face to the difficult of computer literacy The perceived ease of use actually measures the customer’s experience on the internet – banking service Next, Szajna

(1996) examines about the availability of technology acceptance model to an empirical research The result points out that the technology acceptance model is an available tool to predict the intention of using the internet service However, the author begins to compare the availability of measurement between the old technology acceptance model and the revise ones Furthermore, Lee, Kozar and Larsen (2003) summarizes the past, present and future stories of the technology acceptance model on over one hundred studies to find out the contribution of this model to the academic category However, some reports claim that the technology acceptance model itself may consist of the unsuitable things to the specific target Therefore, it should be added to fulfill the particular mission Actually, the technology acceptance model changes from time to time Moreover, the model is structured and adjusted to enhance its performance Poon (2008) investigates the technology acceptance to the internet banking with the more detail variables which investigate the customer’s adoption momentum instead of the original variables of the perceived usefulness and the perceived ease of use Furthermore, Pham, Cao, Nguyen and Tran (2013) examine the internet banking industry in Vietnam with the variables of the technology acceptance model in the structural format For their study, they argue the interrelationships between the variables of the technology acceptance model to find out a lot of hypotheses For an instance, Admin (2007) who writes about the credit card usage intention add more items to modify the original model Therefore, the tendency of extending the original models or formula is always a main source of the academic research In this case, because the studies in Vietnam are mainly about the variables of

the technology acceptance model, it opens a motivation on this gap to identify the new variables of the Vietnamese’s adoption momentum of the internet banking

Be along with the advance of the technology acceptance model, the technology variables are explored to support on the argument One of the current common variables is about the external environment determinants Certainly, Lee, (2009) agrees the important role of these variables to the e-banking adoption For the lately studies, a large number of researchers tries to add or combine many factors with the technology acceptance model in their studies Chong, Ooi, Lin and Tan (2010) added two other variables including government support and trust beside the perceived usefulness and the perceived ease of use of the technology acceptance model They argue that the role of government in Vietnam is definitely significant The banking industry is absolutely controlled by the State bank of Vietnam Moreover, the development of internet industry counts on the government investment Therefore, they believe that the government support factor affects the internet banking Moreover, the research of Pham, Cao, Nguyen and Tran (2013) is another example These authors also make an investigation about internet banking in Vietnam with a structural model Beside the three variables of technology acceptance model such as the perceived usefulness, the perceived ease of use and the perceived risk, the studies added the factors of bank image, trust and subjective norms Furthermore, Sohail and Shanmugham (2003) examine the internet banking and customer preference in Malaysia with the reluctance factors which tested the willingness of Malaysian customers to the change from the traditional banking service to the online service Next, Jaruwachirathanakul and Fink (2005) with a study in Thailand mention

non-about the significant external environment variables called perceived behavior control which has an impact on internet banking using intention in Thailand Finally, Poon (2008) in a research tests the Malaysian preferences to the technology acceptance model with many detail variables There were ten variables which are identified from the research including convenience, accessibility, feature availability, content, design, speed, security, privacy, bank management and image, fees and charges Actually, the variables of technology acceptance model are extended into the detail ones Thus, eight variables are belongs to the category of the technology acceptance and two variables are identified as the external environment impact on internet banking using intention Based on the tendency of studies, the thesis here certainly works on the gap

by putting many detail variables to find out their impact on the intention to use Vietnam internet banking

Though the Vietnam bank industry becomes boomed since 2000 with many topics of internet banking adoption in Vietnam, The gap about this issue is absolutely continued to be exploited For more argument, the chapter confirms the gap in internet banking using intention studies in Vietnam right here as follow:

Chong, Ooi, Lin & Tan (2010) use the technology acceptance model and one external environment variable to build up their model about internet banking using intention in Vietnam The 4 variables of their research include the perceived usefulness; the perceived ease of use; trust and the government support Their hypotheses argue that there is a positive impact of these variables on internet banking using intention in Vietnam The questionnaire with the Likert scale is distributed to the bank customer in Hanoi The regression analysis then is conducted to find out the

relationship between their variables and internet banking using intention in Vietnam The result from the regression analysis gives out that there are 3 variables which have

a positive impact on internet banking using intention in Vietnam and one variable – the perceived ease of use have the negative effect From their result, the perceived usefulness and the government support have the significant impact on the intension to use e-banking Though their research come out with something about the technology acceptance model and external environment variable to internet banking using intention , it is not yet enough detail about the reaction of the user to the acceptance of internet banking service The variables of the technology acceptance model are the classic ones to internet banking using intention At present, there is a demand to explore the detail variables to draw out the bigger picture Therefore, the internet banking users’ adoption should be investigated with the variables which describe the benefits of the internet banking service in detail For instance, instead of the perceived usefulness in the common understanding, we can examine the variables of convenience; availability feature; accessibility; design and content or speed… which describe the detail benefits of the internet banking service and how the user react on these benefits Then we add up all these variables to find out how they all have an impact on internet banking using intention This argument is certainly the main motivation in my working thesis Moreover, in the research of Chong, Ooi, Lin & Tan (2010), the variable of government support is the significant factor which can be included with the variables in the research here However, only one variable of external environment may be not enough to argue on the users’ behavior For this circumstance, I also believe that we should add up a few more variables like the bank

management and image or fees and charges which may play a considerable role in internet banking using intention

For more an example about the gap in my thesis, it can be written about another research about internet banking using intention in Vietnam Pham, Cao, Nguyen and Tran (2013) give out the structural model for internet banking using intention in Vietnam One again, the usage of the technology acceptance model is mentioned in their research However, the way to make the investigation is very different They attempt to find out the chain of relationships from the variables of technology acceptance model and the factors from the external environment instead of the total effect of these variables on internet banking using intention The authors argue more than 14 relationships among the variables and the impact of the variables on internet banking using intention For instance, they believe that the variables of trust have a relationship with the perceived benefits; the perceived ease of use have an impact on the perceived benefits; the perceived ease of use have a relationship with the trust… then, these variables affect internet banking using intention There are 9 equations in this research which are built up to support the hypotheses However, the paper does not come out any result to their argument The purpose of paper is to introduce the interrelationships with a structural model Moreover, in a summary, it remains the main variables from the technology acceptance model have an impact on internet banking using intention including the perceived usefulness; the perceived ease of use; the trust and the perceived benefits Furthermore, the researchers attempt to include the bank image variable in their model Nevertheless, one variable may be not enough

to measure the users’ behavior when there are many variables such as the government

support or fees and charges which seem to have the significant effect on internet banking using intention in practical Therefore, it should add up as many as possible the variables which have the impact on internet banking using intention in an attempt

to draw out a bigger picture about internet banking using intention Moreover, the variables of the technology acceptance model may be replaced by the variables in detail which describe the internet banking service specifically The variables help bring out the insight about whether the customer prefers or not prefer to the advantage

of the internet banking service

Actually, the variables of users’ adoption momentum draw out clearly the advantage and the issue of the internet banking Poon (2008) in a research about the Malaysian perspective on the e-banking service mention about 10 variables including the variables from the technology acceptance and the variables from the external environment From the existing studies, the author builds up the hypothesis for the variables of convenience; accessibility; feature availability; bank management and image; security; privacy; design; content; speed and fees & charges There are a lot of items for each of the variables here The items describe in detail how the internet banking service can help the users enhance their performance For instance, the clients agree that the function of transaction detail and statement regularly help them enjoy the convenience of the internet banking service By that, the item contributes to identify that convenience has an impact on internet banking using intention The detail

of the items and the particular description of the determinants certainly help us understand more about internet banking using intention Moreover, how these variables together have the regression relationship on the internet banking acceptance

motivates the struggle to find out the whole picture on this issue Poon (2008) explores these variables as above which all have the significant impact on internet banking using intention in Malaysia However, the author just tests the cronbach alpha

of these variables without the beta analysis to internet banking using intention This is

a gap for my thesis to find out the beta figure of these variables here to internet banking using intention Furthermore, the finding of Poon is about the Malaysian perspective or Islamic community on internet banking using intention Therefore, the result of Islamic banking may be different from the Vietnam circumstance

Overall, the thesis here takes advantage of the variables from the studies in Malaysia and includes 2 more variables from the other studies to build up the impacts

on internet banking using intention The description of variables in my model is mentioned right away in the next section Moreover, the hypotheses are revealed based on these variables This study is believed to help draw out the detail picture and contribute to the gaps about the internet banking topic in the Vietnam banking

2.4 Hypothesis development

2.4.1 Variable Y: Internet banking using intention

In term of variable Y for the thesis, the items from an existing research in Vietnam are used to build up the items for the variable Y with this thesis – internet banking using intention here Chong, Ooi, Lin and Tan (2010) give out 4 items for their variable Y to test the internet banking using intention in Vietnam Therefore, the thesis here uses the items from these authors The content of variable Y is about the intention of user to the internet banking in Vietnam It is mentioned in detail in the chapter 3

2.4 2.The variables X

For the first variable in my model, the convenience is one of the variables which is belongs to the original measurement of the technology acceptance – the perceived of usefulness Chong, Ooi, Lin and Tan (2010) write in their research about internet banking adoption in Vietnam that the perceived of usefulness from the online banking would help the users enjoy its service The customer can access their account anytime and anywhere without contact the bank by the way of face to face Therefore, the internet banking is argued to be a better method than the traditional banking Sohail and Shanmugham (2003) in a study about the internet banking preference in Malaysia mention about Convenience They give out two items to test this variable The first item is the time saving which has a very high cronbach alpha 0.911 and the second one is the convenient way of doing bank transactions which has a cronbach alpha of 0.795 Certainly, it is not difficult to find out the studied about the relationship between the convenience and the e-banking acceptance For instance, Liao and Cheung (2002) in Singapore measure the client perceptive here to the e-banking service including this variable The data from survey shows that the convenience is one of the most important attributes to the customer’s preference Moreover, a descriptive study is conducted to understand about the customer attitude and the e-banking service among the sophisticated users in Turkey which mentions about the important effect of convenience to the e-banking service (Akinci, Aksoy & Atilgan, 2004) Poon (2008) in her research does a very detail investigate on the

relationship between the convenience and the intention to use the internet banking The author builds up 9 items to test this variable From the study, the writer finds out a very high cronbach alpha of 0.9761 More than 80 percent of respondent agrees that the convenience affects internet banking using intention in the Malaysia Based on the literature review here, the convenience is as the first variable in the model The variable is examined by the three items which is introduced in the methodology part of the research As a hypothesis, this variable is argued to have a strong positive impact

on internet banking using intention in Vietnam

H 1a: Convenience has the positive impact on internet banking using intention

in Vietnam

Next, the second variable comes from the key concepts – the perceived of usefulness and the perceived ease of use The usefulness of service or product is the one the measurement of the satisfaction of customer The client can be happier with the more smart features and the availability of multi-functions A study about the satisfaction of banking customer is conducted in detail with the research in Malaysia (Poon, 2008) Moreover, some other authors examine about the alternative approach

to upgrade the function of e-banking service including the voice function, kansei engineering (KE) and quality function deployment (QFD) ( Gonzalez, Mueller & Mark, 2008)

Sohail and Shanmugham (2003) include the accessibility as a factor which affects internet banking using intention in Malaysia However, they only used two items to test this factor Sohail and Shanmugham (2003) think that the “internet access” and “internet connection speed” are enough to test the accessibility (p

214).Poon (2008) claims these variables with a lot of items There are ten items for the concept of accessibility and eight items for the concept of feature availability The result finds out that the cronbach alpha of accessibility is 0.9713 and the cronbach alpha of feature availability is 0.8779.Over 60 percent of respondent agrees that these variables have an impact on internet banking using intention Based on this paper, the study here finds out what happens with the availability and accessibility in Vietnam internet banking However, there a selection and reduce the items for the suitable things to the Vietnam circumstance As a hypothesis, the availability and accessibility variable is supposed to have a positive impact on the Vietnamese internet banking adoption

H 1b: Availability and accessibility have the positive impact on internet

banking using intention in Vietnam

Next, the third variable may be related to the perceived ease of use Actually, the content should be updated and clear which help the customer feel easy to conduct their deal Chong, Ooi, Lin and Tan (2010) tell about both of these concepts In their paper, the factor of the perceived of usefulness has a high positive relationship with internet banking using intention in Vietnam; whereas, the factor of the perceived ease

of use has a negative impact on the intention to use the internet banking in Vietnam Let see what Chong, Ooi, Lin, and Tan (2010) show out that the Vietnamese users feel difficult running their account on the online banking in Vietnam On the other hand, in the thesis here, Content and design have the impact on internet banking using intention According to Poon (2008), there are a large number of respondent from the study agree that the design and content determinants have the positive impact on

internet banking using intention Therefore, these variables are mentioned to have the positive impact on the Vietnamese adoption to the internet banking

H 1c: Content and design have the positive impact on internet banking using intention in Vietnam

Next, the fourth variable is about the speed The speed may belong to the concept of the perceived of usefulness This factor mentions about the quality of portal service The speed of downloading the information from the bank and the frequency

of suspend situation sometime effect the favor of the clients The element which effects on the speed can be the content downloading and connection method (Jayawardhena & Foley, 2000) Poon (2008) builds up the 5 items for the speed determinant Therefore, Speed here in the study has a positive impact on internet banking using intention in Vietnam

H 1d: Speed has the positive impact on internet banking using intention in Vietnam

Next, in term of the fifth one, security is an important variable The variable comes from the concept the perceived of risk The security is not only the priority issue when the banks build up their online system but also the important dimension to decide the loyalty of their customers However, the security can cause the problem with the ease of use The conflict between the security and ease is mentioned in the existing study (Hertzum, Jorgensen & Norgaard, 2004) Moreover, the other authors mention about the quality of e-banking portal which is about the security quality (Bauer, Hammerschmidt & falk, 2005) Due to the conflict between the security and the easy access, some of smart solution is created to meet the demand of the client

The smart card and fingerprint software … have been born to solve this problem Certainly, the future of technology is fast and safe (Claessens, Dem, Cock, Preneel & Vandewalle, 2002) Pham, Cao, Nguyen and Tran (2013) argue that the e-banking business is all about the trust business They believe that the customer is willing to use the internet banking until they were satisfied with the safety Bauer, Hammerschmidt and Falk (2004) with the quality of e-banking portals write about the security factor as the core service They claim that the security and trust play a vital role with the portal quality of internet banking Bauer, Hammerschmidt and Falk (2004) mention two items of “securing payment system; data/transfer security” for the security factor and three items of “reliability of quotes and price; understandability; discretion” for the trust factor (p 163) Poon (2008) examines security in the detail items The cronbach alpha for security factor is found out of 0.9856 – a very high figure Over 65 percent

of respondent believes that the security factor has a positive impact on internet banking using intention in Malaysia Based on this literature, Security has a strong impact on internet banking using intention in Vietnam

H 1e: Security has the positive impact on internet banking using intention in Vietnam

Next, the sixth variable - privacy is other factor extracted from the concept of the perceived risk Many studies about internet banking using intention in Vietnam do not mention about this factor The security factor is written more than what happen to Privacy Therefore, this means that the factor of privacy does not affect internet banking using intention Poon (2008) shows out the different story Over 45 percent of respondents agree that the privacy factor has an impact on the Malaysian internet

banking perspective The cronbach alpha for this scale is also very high when it peaks 0.9814 However, the respondents who have no comment on this factor in Poon’s study took over a high figure Over 35 percent of user says that they don’t know the privacy factor which has an impact on the internet banking That is the situation in Malaysia context Let see the respondents in Vietnam think how the privacy factor on internet banking using intention Therefore, Privacy is supposed to have a positive impact on the internet banking acceptance

H 1f: Privacy has the positive impact on internet banking using intention in Vietnam

Next, the seventh variable is the final one which related to the technology acceptance idea in this study The variable is about the added service In the developed countries, they have a very good public transportation; a modern online commerce and the sophisticate financial market This situation requires the internet banking service upgrade its information The online payment or the schedule references is necessary to the customers Bauer, Hammerschmidt and Falk (2004) in their research claim that the portal quality of internet banking should include three categories The first one is called the core service which secures the basic service and the trustworthiness The second one is about the problem-solving service which mentions about the benefits, availability and the accessibility of the online service The final one is the additional service which includes the added values and the extra – benefits of the online banking service Based on the literature review of the added service, the hypothesis argues that the added service has a positive impact on internet banking using intention

H 1g: Added service has the positive impact on internet banking using

intention

The eighth variable in this thesis is the first one of the external environment category Government support is mentioned in a paper as the external effect on the e-banking adoption (Hernandez & Mazzon, 2007) The other research about internet banking in Singapore mention about the government support (Tan & Teo, 2000) The investment of the government into the technology industry, specifically in this case – the internet infrastructure may have an impact on the intention of user to use internet banking The good infrastructure of internet service can enhance the usefulness of the internet banking Moreover, the government develops the broadband access of the internet service to help the speed and the convenience of internet banking (Picot & Wernick, 2007).Furthermore, the 3G service is about the government’s telecommunication policy (Lehr & McKnight, 2003) which has an impact on the perceived usefulness of internet banking using intention In term of Thailand– a South East Asia country like Vietnam, Jaruwachirathanakul and Fink (2005) claim that Government support is a considerable impact on the internet banking They argue that the governments play a very important role to the e-banking user Chong, Ooi, Lin and Tan (2010) give out 4 items which is used to test this factor The paper finds out a very high beta for this factor (0.276).Evenly, this level is as high as the level of the perceived usefulness in their study It seems to be that Government support is a significant one of the external environment category Therefore, in this paper, this factor again is retested when it is combined with the other variables

H 2a: Government support has the positive impact on internet banking using intention in Vietnam

Next, the second variable of external environment category is to the bank management and image Flavián, Torres and Guinalíu(2004) think that the bank image and management is all about the reputation, quality service which is satisfied with the customer preference Like the technology products, the Vietnamese may choose to buy the good brand name though the quality service has not much different in a comparison For instance, someone likes to use the internet banking of HSBC because they love a foreign company They believe that the foreign product could bring out a better service … Olavarrieta and Friedman (1999) mention that there is a bias thinking for the service of the good reputation product The bank management and image variables are mentioned in some studies about internet banking in Vietnam Pham, Cao, Nguyen and Tran (2013) in their structural model write about the bank image Poon (2008) also believes that these factors have the impact on internet banking using intention among the users Poon (2008) builds up a very detail items to test these factors Over 50 percent of respondents agree that this factor affects internet banking using intention; however, over 30 percent of persons have no idea about this impact The cronbach alpha for this factor is about 0.822 This figure is good in the term of the technical analysis The study here supposes that the variables have the positive impact

on the internet banking preference

H 2b: Bank image and management have the positive impact on internet

banking using intention in Vietnam

Finally, the tenth variable is about the fees and charges A research mentions about the success of controlling the cost administration (Siriluck & Speece, 2003) Truly, the dimension of fee and charge is usually included into the model when the authors examine the effects on the e-banking service The Malaysian behavior is examined about the fee and charge of e-banking (Poon, 2008) The cost to use the internet banking is not the new concept for this topic The authors in Malaysia usually include these variables to test their model Sohail and Shanmugham (2003) claim the cost determinant with the examined two items such as “cost of computer and cost of internet connection” (p 214) Poon (2008) includes 8 items to test Fees and charges

In that study, over 70 percent of respondent believes that the factor of fees and charges affect the internet banking intention The cronbach alpha of this factor is 0.7954 - good figure in this kind of test Therefore, this factor is a significant element to internet banking using intention As a hypothesis, Fees and charges have the positive impact on the internet banking preference

H 2c: Fees and charges have the positive impact on internet banking using intention in Vietnam

2.4.3 Demographic factors

Beside the main variables, the demographic variables are mentioned in this study There are some prior studies which examine the effect of demographic to factors on the e-banking adoption The result shows out that the age and educational level have no significant impact on the e-banking service whereas the other demographic factors give out the opposite story (Sohail & Shanmugham, 2003) On the other hand, one study also investigates the effect of many demographic factors to

the selection of e-banking service The result argues that some factors including age, educational level, income level, computer literacy, internet accessibility have a significant relationship with the usage of e-banking (Poon, 2008) In that page, the impact of the demographic is mentioned in the implication part and finds out something value for the marketing strategy of the banking industry Therefore, in this thesis, the impact of demographic on internet banking using intention in Vietnam is supposed as follow:

H 3: Demographic factors including gender, age, income level, education level and internet accessibility have the impact on internet banking using intention in Vietnam

In a summary, the study is to examine the 10 sub-hypotheses and 1 demographic hypothesis in my study as follows:

H 1a: Convenience has the positive impact on internet banking using intention

H 1f: Privacy has the positive impact on internet banking using intention in Vietnam

H 1g: Added service has the positive impact on internet banking using intention

Table 2-2: Research model

Technology acceptance variables

 Bank image and management(XI)

 Fees and charges (XJ)

2.5 Chapter conclusion

On the background of literature review, this thesis identifies 10 variables to build up a model Moreover, the variables mainly come from the key research and the other studies The gap of thesis is mention about to clarify the motivation to execute this work Finally, the literature background help build up the hypotheses of this thesis The next chapter mentions about how the data and methodology are conducted

to fulfill the gap and answer the research question in the chapter 1

Data and Methodology Chapter 3

3.1 Chapter introduction

The part 3.2 introduces how data and the sample procedure were executed Then, the part 3.3 describes about the methodology to test the collected data Would the variables from both the technology acceptance and external environment category all have the positive impact on internet banking using intention? The result of data analysis can be used to answer this question Then, it is the background to test the 3 main hypotheses in the chapter 2 and answer the 3 research questions

This chapter, indeed, begins with the introduction of the items of the variables Next, the content of items is described in detail Next, the story of sample procedure is mentioned to clarify the data collection Finally, the methodology helps the readers easier to understand the chapter 4 – result analysis

3.2 Variables and sample procedure

The chapter 2 introduced 10 variables of the thesis model There were 7 variables identified as the dimension of technology acceptance The items for each variable were selected from the ones of the existing studies Conveniences consists of

3 items; the availability and accessibility variable includes in 5 items; the content and design variable has 3 items; the speed issue includes in 3 items; the added services factors has 3 items; the security one includes 3 items and the privacy one has 3 items The number of items for the dimension technology is 23 items In the key paper, there are over 60 items totally used to test the preference; however, most of the factors have

a very high figure of cronbach alpha 8 out of 10 items in the key paper with a cronbach alpha is greater than 0.95 This situation could lead to the redundant

phenomenon; therefore, the thesis only includes the most suitable ones for the circumstance of Vietnam

Beside these variables, there were 3 variables of the external environment category which were claimed to have the significant impact on internet banking using intention in Vietnam The government support factor has 3 items; the bank management and image has 5 items and the fees and charges factor has 3 items The total 10 items were identified in the thesis model in an attempt to draw out the big picture about internet banking using intention in Vietnam

Furthermore, the demographic 5 factors was mentioned in the thesis including gender, age, income level, education level and internet accessibility which had the significant impact to internet banking using intention in the key paper Poon (2008) explores that the gender, age, income level, education level and internet accessibility have the significant impact on the Malaysia perspective about internet banking using intention Therefore, the thesis here included these demographic to find out with the circumstance of Vietnam The tables below help summarize the content of the 10 variables and 5 demographic factors

Table 3-1: The summary of items of variables

Y 3 The intention to use e-banking

Chong, Ooi, Lin, and Tan (2010)

Y1 I once dealt with the e-banking service

Y2 I am satisfied with using the e-banking service if I

get the benefits from it Y3 I believe that I will use the e-banking service in

the future