Empirical analysis of internet banking adoption

This study investigates customers’ adoption within the context of Vietnam Internet Banking services and research framework is based on the Technology Acceptance Model and Trust.. securit

HUYNH MINH SU

EMPIRICAL ANALYSIS OF

INTERNET BANKING ADOPTION

MASTER THESIS OF BUSINESS ADMINISTRATION

HO CHI MINH CITY - 2013

HUYNH MINH SU

EMPIRICAL ANALYSIS OF

INTERNET BANKING ADOPTION

Subject: Master of Business Administration

Code: 60.34.01.02

MASTER THESIS OF BUSINESS ADMINISTRATION

SUPERVISOR:

PhD PHAM QUOC HUNG

HO CHI MINH CITY - 2013

Students of many universities, especially University of Economics Ho Chi Minh City, customers of many banks in Vietnam, especially BIDV and Sacombank, and all my friends, especially eMBA class for kindly helping me

to collect information necessary for the study My special thanks also go to

Mr Dang Huu Phuc for his strong support in the implementation of the data analysis and the completion of the thesis

Though the author has tried the best to complete the thesis, errors could not be completely avoided Consequently, the author is looking forward to receiving the contributions and comments from respectful lecturers and friends

Huynh Minh Su

Ho Chi Minh, 19 September 2013

COMMITMENT

I would like to commit that this thesis, “Empirical of online banking

adoption”, was accomplished based on my independent and serious researchs

The data was collected in reality and has obvious origins Moreover, the data

was trustworthily handled by author

I certify that any help hand received in preparing this thesis and all the

sources that used have been acknowledged

Ho Chi Minh, 19 September 2013

Signature: _

TABLE OF CONTENTS

ACKNOWLEDGEMENT I 

COMMITMENT II 

TABLE OF CONTENTS III 

LIST OF TABLES VI 

LIST OF FIGURES VIII 

ABSTRACT 1 

CHAPTER 1 2 

INTRODUCTION 2 

1.1 Overview 2  

1.2 The research approach 2  

1.3 Background of the study 3  

1.4 Motivation of the study 4  

1.5 Objective of the study 4  

1.6 Problem discussion 5  

1.6.1 Problem definition 5  

1.7 Research question 6  

1.8 Practical and theoretical value of this research 6  

1.9 Structure of the study 7  

CHAPTER 2 9 

LITERATURE REVIEW 9 

2.1 Internet banking 9  

2.1.1 Conception of internet banking 9  

2.1.2 Benefits of internet banking 10  

2.1.2.1 Benefits for banks 10  

2.1.2.2 Benefits for customers 11  

2.1.3 International studies of consumer adoption of internet banking 12  

2.2 Adoption 30  

2.3 Theoretical framework 31  

2.3.1 Technology acceptance model (TAM) 31  

2.4 Trust and TAM 31  

2.5 Research model 32  

2.6 Summary 36  

CHAPTER 3 37 

METHODOLOGY 37 

3.1 Research purpose 37  

3.2 Questionnaire development 37  

3.2.1 Independent variables 38  

3.2.1.1 Perceived Benefit 38  

3.2.1.2 Trust 39  

3.2.2 Dependent variable: Intention to Use / Reuse Internet banking 39  

3.2.3 Moderator variable: Internet Experience 40  

3.3 Questionnaire translation 42  

3.4 Research strategy 43  

3.5 Targeted population 44  

3.6 Research sampling 45  

3.6.1 Sample size 45  

3.6.2 Selecting the sampling technique 45  

3.7 Data collection 46  

3.8 Methods of data analysis 46  

3.8.1 Data screening 47  

3.8.2 Reliability assessment of measurement scales (Cronbach alpha) 47  

3.8.3 Validity assessment of measurement scales (EFA) 47  

3.8.4 Correlation Analysis 48  

3.8.5 Multiple Regression (MR) 48  

3.9 Research process 49  

3.10 Summary 51  

CHAPTER 4 52 

DATA ANALYSIS 52 

4.1 Descriptions of sample 52  

4.2 Reliability and validity of the measurement scale 53  

4.2.1 Reliability (Cronbach alpha) 53  

4.2.2 Exploratory factor analysis (EFA) 55  

4.2.2.1 EFA implementation for independent variables 57  

4.2.2.2 EFA implementation for dependent variable 59  

4.3 Testing the research model and the hypotheses 60  

4.3.1 Testing correlations of constructs 60  

4.3.2 Checking regression assumptions 62  

4.3.3 Multiple regression analysis 62  

4.3.3.1 Testing the effects of Perceived Benefit (PB) and Trust (T) on Intention to Use / Reuse (IU) 62  

4.3.3.2 Testing the moderating effects 66  

4.4 Summary 73  

CHAPTER 5 74 

CONCLUSION 74 

5.1 Discussion 74  

5.2 Practical implication of the research 76  

5.3 Academic contributions of the study 79  

5.4 Limitation and futher research 79  

REFERENCES 81 

APPENDICES 91 

APPENDIX A 91 

ACRONYMS 91 

APPENDIX B 92 

THE QUESTIONNAIRE 92 

APPENDIX C 95 

CRONBACH ALPHA ANALYSIS 95 

APPENDIX D 98 

EXPLORATORY FACTOR ANALYSIS (EFA) 98 

APPENDIX E 109 

GRAPHIC ANALYSIS OF REGRESSION ASSUMPTIONS 109 

APPENDIX F 112 

MULTIPLE REGRESSION ANALYSIS (MR) 112 

LIST OF TABLES

Table 2-1 International studies on internet banking adoption 13 

Table 3-1 Survey items used in the study 41 

Table 3-2 Relevant situation for different research strategies 43 

Table 3-3 Summary 44 

Table 4-1 Demographic characteristics 53 

Table 4-2 Cronbach alpha coefficients 54 

Table 4-3 Details of the unqualified observation variable 58 

Table 4-4 EFA results of independent and dependent variables 58 

Table 4-5 Detail of the unqualified observation variable 60 

Table 4-6 Correlations 61 

Table 4-7 MR results using Enter technique 63 

Table 4-8 ANOVA 63 

Table 4-9 MR variables coefficients 64 

Table 4-10 Results of hypothesis tests 65 

Table 4-11 MR having moderating effect results 67 

Table 4-12 ANOVA having moderating effect results 67 

Table 4-13 MR variables coefficients having moderating effect results 68 

Table 4-14 MR results using Enter technique on case 1 (less than one year) 70 

Table 4-15 ANOVA on case 1 (less than one year) 70 

Table 4-16 MR variables coefficients having moderating effect on case 1 (less than one year) 70 

Table 4-17 MR having moderating effect results using Enter technique on case 2

(one year or longer) 71 

Table 4-18 ANOVA having moderating effect on case 2 (one year or longer) 72 

Table 4-19 MR variables coefficients having moderating effect on case 2 (one year

or longer) 72 

LIST OF FIGURES

Figure 1-1 Structure of the Study 8 

Figure 2-1 Proposed research model 32 

Figure 3-1 Research process 50 

Figure 4-1 The research model 1 63 

Figure 4-2 The research model 2 66 

ABSTRACT

The thesis reports the findings of a study issues concerning the adoption of Internet banking in Vietnam This study investigates customers’ adoption within the context of Vietnam Internet Banking services and research framework is based on the Technology Acceptance Model and Trust

It should be noted that in the study, instead of using perceived usefulness, the author utilize a new construct perceived benefit which is broader than perceived usefulness

Theory was developed to identify factors that would influence the adoption of Internet banking The framework includes Perceived Benefit, Trust, and Intention to Use constructs Futhermore, a moderator variable is Internet Experience that adds to the model Mutiple Regression (MR) was used to examine the entire pattern

Results shows that Perceived Benefit, and Trust were identified as two important factors influencing the Internet banking adoption Futhermore, the relationship between Perceived Benefit and Intention to Use was found to be significantly positive moderated by Internet Experience for respondents who has Internet experience one year or longer Theoretical contributions and practical implications of findings are discussed and suggestions for future research are presented

CHAPTER 1 INTRODUCTION

The first chapter represents the research approach, background of the study, motivation of the study, and presents the reader to the objective, problem research question Last of all, this chapter introduces contribution of the study and structure

of the thesis

1.1 Overview

Advances in information and communication technologies such as the growing use of the internet for business transaction, have an extreme effect on the banking industry While this is a global phenomenon, creating a global marketplace, penetration of internet banking into developing countries moves slowly behind that

of the developed countries, specifically developed Western countries Moreover, poor economies, education and infrastructure are clear factors in the slow adoption

of technology in some developing countries This thesis shows finding of research into adoption of internet banking in Vietnam, a country of Southeast Asia

1.2 The research approach

This research develops and tests a theoretical of the Technology Acceptance Model (TAM) (Davis, 1989), and Trust, and examines the factors that influence the adoption and acceptance of the information technology and system of the internet in the banking sector in Vietnam, especially Internet banking

A model, named Trust and TAM, has been previously presented in exploring the acceptance of online shopping setting (Gefen et al, 2003) This model integratively placed use of online system into both system features such as ease of use and usefulness and trust in e-vendors

It should be noted that in the study, instead of using perceived usefulness, the author use a new construct perceived benefit which is broader than perceived usefulness

1.3 Background of the study

One of the most stunning aspects of the past few years has been the speed of expanding and maturing of internet market This rapid rate has opened up the opportunities for marketers and created the pace of change in the marketing landscape (Wu, 2002)

The use of internet for business is easy to find in many industries For example, computer manufacturing companies such as IBM, Intel, Hewlet Packard, etc… ; in the retail industry such as home shopping network,…; in the pharmaceutical industry such as Du Pont,… ; in the aerospace industry such as Boeing, (Eid, and Trueman, 2002)

It is obviously that the application of internet technologies to business for improvements in their performances is common current trend Bitner et al (2000) state that technology continues to make a dramatic and profound impact in services industries (Durkin, 2004) As stated by Saffu et al (2008), there is an increase in applications of e-commerce in business in the past ten years (Chong et al., 2010)

The internet can currently be considered as the cheapest distribution channel for standardized bank operations (Polasik, and Wisniewski, 2009).One e-commerce tool that is being adopted by the banking industry is on line banking or e-banking (Chong et al., 2010) Gurau (2002) shows that there are currently more than thousands of e-banking web sites all over the world (Chong et al., 2010) As studied

by Chong et al., 2010, although online banking has been implemented in many developed countries such as the United States and those in Europe (Pikkarainen et

al, 2004), there is a growing trend in the adoption of online banking by banks in developing countries too (Gurau, 2002)

The ultimate success of e-commerce such as online banking is depending on consumers’ perceptions and whether they are willing to use online banking (Chong

et al., 2010) According to Bruno (2003), from the point of view of the consumers, the decision to use internet banking is frequently motivated by convience and efficiency (Polasik, and Wisniewski, 2009)

Banking activities rely on information technology to acquire, process, and deliver the information to all relevant users

It is believed that, in the future, Internet banking will recede in importance as

a strategic application to become a competitive necessity that must be adopted by most if not all banking and financial institutions

1.4 Motivation of the study

The motivations for this research are as follows:

1 This is a new innovation in Vietnam It is obviously that Internet banking is a worldwide topic to study, so the quality of services in Vietnamese banking sector can be enhanced for the future

2 Internet banking has been widely studied in developed countries Few studies have been done in developing countries, especially in Vietnam

1.5 Objective of the study

The research points to enriching the knowledge and understanding of factors affecting adoption of Internet banking services in Vietnam Specifically, the main objectives of this study are:

1 Investigate the adoption and use of Internet for banking transactions

by individuals in Vietnam as an example of a developing country

2 Quantify constructs concerning the current state of consumer beliefs and attitudes toward Internet banking

3 Propose opportunities for both participants and researchers to uncover unseen matters via improving the use and acceptance of Internet banking

4 Examine the moderating role in the theoretical model

of Internet banking

1.6.1 Problem definition

There are past literatures studied on the adoption of Internet banking Many

of these studies have tended to focus on developed countries such as European countries, or the United States (Pikkarainen et al, 2004) Otherwise, there is still some studies concentrate on developing contries such as Vietnam (Chong et al., 2010) Developing contries is different from developed contries that the economy is still expanding in recents years and its e-commerce infrastructure is still less developed (Chong et al., 2010)

The primary objective of this research is to identify the main factors underlying the consumer’s decision to adopt the internet banking in developing countries The result from this study will allow banks to focus on the factors which can increase to adopt Internet banking

1.7 Research question

Emory and Cooper (1991) suggested that in order to address the research problem, the researcher had to identify the specific questions for which data is needed to be gathered in order to satisfactorily solve the research problem (The 2006)

This research is dealing with the lack of studies on internet banking in Vietnam This research solves the intention towards Internet banking usage So research questions of this study will be:

 What are the factors influencing adoption of Internet banking by Vietnamese customers?

 What is the role of Internet experience in acceptance of Internet banking?

1.8 Practical and theoretical value of this research

The need to understand what the factors are influencing the adoption of Internet banking is important for managers, providers and researchers It is clearly that there will be some beneficial applications of this research to Vietnamese banks and researchers in Vietnam Some of these practical applications are as follows:

1 The acceptance of Internet banking is a new topic in Vietnam So the results of this study could be used to improve the banking sector, and enhance the quality of Internet services in Vietnam for the future

2 Doing investigation on technology acceptance could enrich the research fields in Vietnam, providing a standard of research that could receive wider recognition Vietnamese research organizations are looking for guidance in creativity and innovation

3 Helping bank managers to identify factors that influence the adoption

of Internet banking in order to increase the use of the services

1.9 Structure of the study

This thesis is organized into 5 chapters as shown in Figure 1-1

Chapter 1: Introduction

The first chapter represents the research approach, background of the study, motivation of the study, and presents the reader to the objective, problem research question Last of all, this chapter introduces contribution of the study and structure

of the thesis

Chapter 2: Literature review

Chapter two is structured along several themes First of all, this chapter explains the basic terminology of Internet banking Second, this chapter outlines the definition of adoption Third, different intention based models introduced Finally, the chapter concludes by research model and hypotheses

Chapter 3: Methodology

This chapter discusses the research methodology of the thesis It starts with research purpose and questionnaire development It also outlines questionnaire translation, research strategy and targeted population Finally it presents research sampling, data collection, methods of data analysis, and research process

Chapter 4: Data analysis

In this chapter the author will analyze the data related to the evaluation of measurement scales, research model and hypotheses The content of the Chapter includes: description of sample, assessing the reliability and the validity of scale through Cronbach alpha coefficients and Exploratory Factor Analysis (EFA) method, testing the research model and hypotheses with correlation analysis and multi linear regression analysis SPSS software version 16.0 was the tool using for this data analyzing process

Chapter 5: Conclusion

Based on the result obtained in the study, a discussion of theoretical and practical implication will be presented on this chapter Futhermore, the author will also have some recommendations for banks Contribution of this study, its limitations and future research also will be presented in this chapter

CHAPTER 2 LITERATURE REVIEW

Chapter two is structured along several themes First of all, this chapter explains the basic terminology of Internet banking Second, this chapter outlines the definition of adoption Third, different intention based models introduced Finally, the chapter concludes by research model and hypotheses

2.1 Internet banking

2.1.1 Conception of internet banking

Today many organizations implement e-business as well as an important part

of business strategies With the growth of the internet, banks now move towards providing online banking for customers The term “Internet banking” encompasses

a whole range of banking services, which can be accessed remotely with the use of

an internet browser (Polasik, and Wisniewski, 2009) Wang et al (2003) describe internet technologies has changed the way personal financial services (Chong et al., 2010) Shin and Fang (2004) say internet banking like a new type of information system that uses the innovative resources of the internet and world wide web (www) to make customers possible to effect financial activities in virtual space (Chong et al., 2010)

Through the development of asynchronous and secured electronic transactional technologies, banks are now using online banking both a tracsactional and an informational medium According to Chong et al., 2010, registered internet bankings users can now perform common banking transactions such as writing cheques, paying bills, transferring funds, printing statements, setting up fixed deposits, purchasing investment related funds and enquring about account balances.Tan and Teo (2000) state that internet banking has involved into a “one stop service

and information unit” that promises greate benefits to both banks and consumers (Chong et al., 2010)

Duclaux (1996) and Liao et al (1999) describe the market for internet banking is forecasted to grow sharply in the next few years, affecting the competitive advantage enjoyed by traditional banks with physical branches (Chong

et al., 2010)

2.1.2 Benefits of internet banking

2.1.2.1 Benefits for banks

Internet banking can bring about various benefits for banks and their customers Cost savings, efficiency, gaining new segments of customers, improvement of the bank’s reputation and better customer services and satisfaction are primary benefits to banks (Jayawardhena and Foley, 2000) Booz-Allen and Hamilton (1997) argue, based on their global survey, that setting up a specialized Internet banking infrastructure costs about US$1-2 million, which is much lower than setting up a banking branch Moreover, the authors conclude that costs for running a traditional bank account for 50% to 60% of its revenues

Under the view of Robinson (2000), relevant costs for conducting a banking transaction via online are much lower than via a brick and mortar branch In addition, Sheshunoff (2000) contends that one of the most important factors influencing the adoption of Internet banking by banks is the need to build up strong barriers to customer exiting Under the view of the author, once customers become familiar with the utilization of full service Internet banking, it is unlikely that they will change to another financial institution Such an argument can be supported by the consumer behavior theory that switching costs are often very high in terms of time and efforts by consumers Finally, the author emphasizes that the implementation of Internet banking can bring about many competitive advantages for banks in today’s highly competitive banking market

Research on Internet banking has been carried out in Denmark by Mols (1998) The author argues that Internet banking can play an important role in enhancing cross-selling and price differentiation Internet banking can make favorable conditions for banks to provide customers numerous services 24 hours a day and 7 days a week Internet banking can improve customer satisfaction with the bank due to the fact that it makes customers less price sensitive, and improves their intention to repurchase, and more loyalty to the bank via providing more positive words of mouth about the bank than other bank customers

2.1.2.2 Benefits for customers

It should be noted that Internet banking not only brings about benefits to banks but also to their customers Thanks to the emergence of the Internet, banking transactions are no longer limited to time and geography It is very easy for consumers throughout the world to access to their bank accounts 24 hours per day and seven days a week Customers can enjoy a variety of services, especially services which are not provided by traditional bank branches It is argued that one

or the greatest benefits that Internet banking brings about is that it is not expensive

or may even be free for customers to utilize Internet banking products or services However, some people believe that prices appear to be one factor that is impedimental to the diffusion of Internet banking (Sathye, 1999) The price debates often revolve around geographical differences and disparities between costs of Internet connections and telephone call pricing

It has also been believed that Internet banking have been changing to respond to customers’ increasingly changing demands (Jun and Cai, 2001) There has been a tendency that customers don’t want to travel to or from a bank branch to conduct some banking transactions In other words, they want to utilize Internet banking to save time and money Internet banking can bring about convenience and accessibility, and have positive effects on customer satisfaction and loyalty (Karjauloto, Mattila, and Pento, 2002) It is possible for customers to manage their

banking transactions whenever they want to enjoy improved privacy in their interactions with the bank Moreover, customers can enjoy more benefits at lower cost levels by utilizing Internet banking (Mols, 1998)

It is contended by Turban et al (2000) that Internet banking is really beneficial to customers in terms of cost savings, no limit on time and space, quick response to customers complaints, and better services or products Such benefits are believed to elevate customer satisfaction Finally, it is obviously that Internet banking offers many benefits to both banks and their customers

2.1.3 International studies of consumer adoption of internet banking

The banking market plays an important role in human society nowadays This makes competition between each others banks They want to have strong effects on consumer behavior, so new banking technology is used most among many ways to improve the competition of banks That is the reason for banks implementing internet banking services However, it is required to better understand their customers regarding attitudes of customers towards technology This is the vital factor which creates favorable conditions for banks to better impact on and to determine consumer behavior Impacting and determining consumer behavior in an effective and efficient way will lead to make significant contribution to competitive advantage for banks It is worth noting that interactions between the adoption and marketing of new electronic delivery channels through relationships between banks and their customers have been establishing new environments in which customers are better served (Mols, 1998) There is an important number of research in the literature about the adoption process of internet banking services The following are noteworthy studies on the online banking adoption process

Table 2-1 International studies on internet banking adoption

Akhlaq, and

Ahmed, 2013

The effect of motivation on trust in the acceptance of internet banking

in a low income country

TAM Self-determination theory

+ Intrinsic + Extrinsic + Trust

Findings:

The authors show that acceptance of internet banking in a low-income country merely depends on the intrinsic motivation factors such as perceived ease of use and perceived enjoyment Furthermore, trust plays an important role in the acceptance

of internet banking and is provoked in an individual through intrinsic motivational factors

security/privacy risk in the adoption of internet banking services in Greece

TAM The innovation diffusion theory

+ Perceived usefulness + Perceived ease of use + Compatibility

+ Security and privacy risk

+ IT experience + Age

+ Gender

+ Behavioural intention Findings:

The study reveals that service compatibility is the key factor, which mostly shapes customers’ behavioural intentions toward internet banking adoption, followed by TAM constructs and perceived risk elements Furthermore, TAM and perceived security and privacy risk constructs partially mediate the relationship between compatibility and customers’ behavioural intentions, whereas perceived usefulness partially mediates the relationship between perceived ease of use and customers’ intentions

Last of all, in terms of the impact of individual differences on customers’ beliefs about internet banking compatibility, value and risk elements, younger, mostly male customers, with adequate previous IT experience are a more promising target group

to use internet banking

Kesharwani, and

Bisht, 2012

The impact of trust and perceived risk on internet banking adoption in India: an extension of technology acceptance model

TAM Diffusion of innovation model

+ Trust + Wesite design + Perceived behavioral control

+ Social influences + Perceived risk + Perceived ease of use + Perceived usefulness + Behavioral intention Findings:

Based on the results of this study, perceived risk has a negative impact on behavioral intention of internet banking adoption and trust has a negative impact on perceived risk Moreover, a well-designed website has significant impact on facilitating easier use and also minimizing perceived risk concerns regarding internet banking usage

Mansumitrchai, and

AL-Malkawi, 2011

Factors underlying the adoption of online banking

by Mexican consumers

The diffusion

of innovation

+ Difficulty + Trust + Compatibility + Third party concerns + Human contact + Reference group influence

+ Security + PC skills Findings:

The results from factor Analysis reveal that eight characteristics of the adoption, such as difficulty, trust, compatibility, third party concerns, human contact, social influence, security, and computer proficiency Moreover, Analysis of Variance shows that adopters and non-adopters differ on their attitudes toward four attributes

of the adoption, such as difficulty, trust, compatibility and human contact In addition, comparing the attitudes of adopters and non-adopters with the issues of security and third party concerns, the study has no significant differences

On the other hand, an interesting finding is that human contact is important for

non-adopters, showing the weakness of online banking

Foon, and Fah,

2011

Internet banking adoption in Kuala Lumpur:

an application of UTAUT model

Unified theory

of acceptance and use of technology model

+ Performance expectancy + Effort expectancy + Social influence + Facilitating condition + Trust

+ Behavioral intention Findings:

The authors show that performance expectancy, effort expectancy, social influence, facilitating condition, and trust have positive impacts on behavioral intention

Al-Majali, and Mat,

2010

Application of decomposed theory of planned behavior on internet banking adoption in Jordan

Decomposed TPB

+ Attitude + Subjective norms + Perceived behavior control

+ Perceived ease of use + Perceived usefulness + Compatibility

+ Behavior intention + Family influences

+ Mass media influences + Self-efficacy + Government support + Technology support Findings:

The study reveals that twelve factors has significant impacts on internet banking services adoption except for two factors such as compatibility and technology support

Chong, Ooi, Lin,

and Tan, 2010

Online banking adoption: an empirical analysis

TAM (technology acceptance model)

+ Perceived usefulness + Perceived ease of use + Government support + Trust

This study, based on employing correlation and multiple regression analysis involving 103 usable samples, investigates the factors that affect the adoption of online banking in Vietnam The authors show that perceived usefulness, trust and government support all positively associated with the intention to use online banking

Tan, Chong, Ooi,

and Chong, 2010

The adoption of online banking in Malaysia: an empirical

TAM TPB

+ Perceived usefulness + Perceived ease of use + Perceived security

analysis risk

+ Social influence + Perceived financial cost

+ Trust Findings:

The authors show that social influences, perceived usefulness, trust, perceived ease

of use are the major factors affecting the intention to adopt online banking services

in Malaysia On the other hand, perceived financial cost and perceived security risk

are insignificant in this study

Zolait, 2010 An examination

of the factors influencing Yemeni Bank users’

behavioural intention to use Internet banking services

TPB (theory of planned

behaviour) ETPB (extended theory of planned behaviour) TRA (theory

of reasoned action)

+ Attitude + Subjective norm + Perceived behavioural control

+ User informational based readiness + Relative advantage/compatability+ Ease of use

+ Observerbility + Trialability + Personal norm

+ Mass media norm + Technology facilitating condition + Resource facilitating condition

+ Government support + Self-efficacy

This study is to examine the potential prominent factors relating to adoption and use

of the financial services of Internet banking (IB) in Yemen The author uses a administered survey involving a convience sample of 369 Yemeni bank customers The author shows that the overall prominent predictors include Relative Advantage/Compatibility, User’s Informational-Based Readiness, Attitude, Observability, Technology Facilitating Condition, Perceived Behavioural Control and Self-efficacy The model accounted for 75 percent of the variation of an individual’s behavioural intention to use IB

Hosein, 2009 Internet banking:

an empirical study of adoption rates among Midwest Community Banks

TAM + Perceived usefulness

+ Perceived ease of use + Trust in internet banking (IB) + In-person banking + Organizational support

+ Website navigation

+ Incentives + Security/privacy + Knowledge of IB Findings:

The author shows that customers find it difficult to use internet banking services, which leads to a decrease in the adoption of internet banking Specifically, the study reveals that two of these independent variables such as quality of incentives and knowledge of computers, significantly predict expectations within the theoretical model As well, perceived ease of use of the IB system is an important factor in adopting IB services

Ozdemir and Trott,

2009

Exploring the adoption of a service innovation: a study of Internet banking adopters and non-adoptors

TAM Diffusion of Innovation Theory Theory of Perceived Risk

+ Perceptual characteristics + Demographic characteristics + Socioeconomic characteristics + Experience related characteristics + Situational characteristics Findings:

The authors show that IB adopters and non-adopters have different perceptual, experience related, socioeconomic and situational characteristics The study

indicates that the perceptual factors related to IB use; also, perceptual factors in relation to the bank in Turkey also influence IB adoption

Polasik, and

Wisniewski, 2009

Empirical analysis of internet banking adoption in Poland

TAM Diffusion of Innovations theory

+ Perceived security + Internet experience + Marketing exposure + Use of other banking products

+ Type of Internet connection used + Demographic Characteristics Findings:

The authors show that one of the dominant relationships that has been observed in the study is the link between the decision to open an online account and the perceived level of security of internet transactions In addition, experience with the medium of internet and certain demographic variables also proved to be strong predictors of the adoption status

Alhudaithy, and

Kitchen, 2009

Rethinking models of technology adoption for Internet banking:

TAM TRA TPB

+ Website features

The role of website features Findings:

The authors show that the study introduces the construct ‘website features’ as potentially influential in technology adoption, and specifically Internet banking

Yousafzai, Pallister,

and Foxall, 2009

dimensional role

Multi-of trust in Internet banking adoption

Model of trust for Internet banking

+ Trust + Perceived risk + Perceived security + Perceived privacy + Perceived

trustworthiness Findings:

The authors show that trust and perceived risk are direct antecedents of intention, and trust is a multi-dimensional construct with three antecedents: perceived trustworthiness, perceived security, and perceived privacy

Zolait, and

Sulaiman, 2008

Incorporating the Innovation Attributes Introduced by Roger's Theory into Theory of Reasoned

TRA Diffusion of Innovation theory

+ Behavioural intention + Attitude

+ Subjective norms + Relative advantage + Ease of use

Action: An Examination of Internet Banking Adoption in Yemen

+ Compatibility + Observability + Trialability + Word-of-mouth + Mass media Findings:

The study reveals that attitude, relative advantage, compatibility, observability, ease

of use and mass media interaction are the main determinants of behavioural intention to utilize internet banking

Ndubisi and Sinti,

2006

Consumer attitudes, system’s characteristics and internet banking adoption

in Malaysia

Diffusion of Innovation Theory Motivation Research

+ Importance to banking needs + Compatability + Complexity + Trainability+ Risk + Utilitarian orientation + Hedonic orientation Findings:

The authors show that the attitudinal factors play an important role in IB adoption; furthermore, utilitarian orientation of the website has significant influence on adoption

, and Fink, 2005

Internet banking adoption

strategies for a developing country: the case

of Thailand

Theory of decomposed planned behaviour

+ Features of the web + Perceived usefulness + Risk and privacy + Adoption

+ Personal preference + External environment + Culture

Findings:

The authors show that the attitudinal factors, such as feature of the website and perceived usefulness, appear to encourage the adoption of internet banking in Thailand, whereas the most salient impediment to adoption is a perceived behavioural control, namely external environment In addition, the significant moderating factors are gender, educational level, income, internet experience and internet banking experience, but not age

Eriksson, Kerem,

and Nilsson, 2005

Customer acceptance of internet banking

in Estonia

+ Perceived ease of use + Perceived usefulness + Use

Findings:

The authors show that the utilization of internet bank increases insofar as customers perceive internet banking as useful In particular, the perceived usefulness is very important because it determines if the perceived ease of use of internet bank will

lead to increased use of the internet bank In other words, internet banking services which are well-designed and easy to use might not be used if they are not perceived

as useful Therefore, the authors conclude that the perceived usefulness of internet banking is a key construct for motivating customer usage Furthermore, the authors suggest that models of technology acceptance should be redesigned with more emphasis on the key role of the perceived usefulness of the service embedded in the technology

an extension of the technology acceptance model

TAM Focus group interview

+ Perceived usefulness + Perceived ease of use + Perceived enjoyment + Information on online banking

+ Security and privacy + Quality of Internet connection

Findings:

The study indicates that perceived usefulness and information on online banking on the Web site are the primary factors influencing the acceptance of online banking

Shih and Fang,

2004

The use of a decomposed theory of planned behavior to study

TRA TPB Decomposed TPB

+ Behavior intention + Actual usage + Attitude

Internet banking

in Taiwan

+ Subjective norms + Perceived behavioral control

+ Relative advantage + Compatibility + Complexity + Normative influences + Efficacy

+ Facilitating Findings:

The study shows that intention to adopt Internet banking can explained by attitude

in both models First, in the decomposed TPB model, it is shown in this study that only relative advantage and complexity are related to attitude, but compatibility is not related to attitude In terms of subjective norm, the path from subjective norm to Intention is not significant Second, in the pure TPB model, only self-efficacy is found to be a significant determinant of perceived behavioral control Furthermore, the authors show that facilitating conditions do not have impacts on perceived behavioral control

Wang, Wang, Lin,

and Tang, 2003

Determinants of user acceptance

of Internet banking: an empirical study

TAM + Perceived usefulness

+ Perceived ease of use + Perceived credibility + Computer self-efficacy

+ Intention Findings:

Based on the results of the study, the authors show that a critical individual difference variable, computer self-efficacy, has significant influence on the intention to use Internet banking via perceived usefulness, perceived ease of use, and perceived credibility In addition, the study indicates that people with higher computer self-efficacy are more readily prepared to use the Internet banking services

Karjaluoto, Mattila,

and Pento, 2002

Factors underlying attitude formation towards online banking in Finland

TRA TAM

+ Prior computer experience + Prior technological experience

+ Personal banking experience

+ Reference group influence

Findings:

The study shows that prior experience of computers and technology, as well as attitude towards computers, influence both attitude towards online banking and actual behaviour Moreover, positive personal banking experience seems to have an effect on both attitude and usage

Black, Lockett, The adoption of The Roger's + Relative advantage

Winklhofer, and

Ennew, 2001

Internet financial services: a qualitative study

model of perceived innovation attributes Bauer's concept of perceived risk

+ Compatibility + Trialability + Observability + Complexity

Findings:

The authors concentrate on researching the innovation of delivering financial services via the Internet and on reassessing the applicability of Roger's model The data was collected through the focus group members based on their usage of the Internet There are differences between people who use the Internet to purchase financial services (S3) and people who use the Internet to purchase goods/services, but not financial services (S2) on the basis of higher income, and more use of information technology There are also differences between S2 and S1 (people who use the Internet without buying anything over the internet) in terms of higher income and a larger product related involvement

An obvious difference between these three groups revealed that based on the factors

of Roger's model, S1 and S2 have very similar attitudes in terms of the advantages perceived by using the Internet compared to using bank branches or telephone, and share a similar attitude towards the risk involved S1 and S2 attitudes are far less positive than S3 counterparts In addition, compatibility with a person's values and previous experience with the product category is one of the strongest influencing factors affecting the adoption of the Internet to conduct financial transactions Trialability is considered important for the future adoption; still, its availability needs to be better communicated

In spite of the fact that Rogers framework used to evaluate the perceived attributes

of an innovation is a useful starting point, there are still other issues emerged which need to be considered, such as societal issues and the sense of fatalism The latter seems to have a positive effect, whereas the former could have a negative effect on adoption

Tan, and Teo, 2000 Factors

Influencing the Adoption of Internet Banking

TPB Diffusion of Innovations theory

+ Relative advantage + Compatibility with values

+ Internet experience + Banking needs + Complexity + Trialability + Risk + Subjective norms + Self efficacy + Government support + Technology support Findings:

The findings from the study reveal that attitudinal and perceived behavioral control factors, not social influence, play a significant role in influencing the intention to adopt Internet banking Specifically, perceptions of relative advantage, compatability, trialability, and risk toward utilizing the Internet have impacts on intentions to adop Internet banking services Moreover, the confidence in utilizing such services and perception of government support for electronic commerce also

have impacts on intentions to adopt Internet banking

Sathye, 1999 Adoption of

Internet banking

by Australian consumers: an empirical investigation

The Diffusion

of Innovation

+ No security concern + Ease of use

+ Awareness of service and its benefits

+ Reasonable price + No resistance to change

+ Availability of Infrastructure Findings:

This study reveals that security concerns and lack of awareness about Internet banking and its benefits are considered as being the impediments to the adoption of Internet banking in Australia

2.2 Adoption

Adoption is the acceptance and continued use of a product, service or idea According to Rogers and Shoemaker (1971), consumers go through “a process of knowledge, persuasion, decision and confirmation” before they are ready to adopt a product or service