The impact of online infomation system quality dimensions on overall tnternet banking service quality and custemer satifaction in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITYInternational School Of Business NGUYỄN THỊ HẠNH DUNG THE IMPACT OF ONLINE INFORMATION SYSTEM QUALITY DIMENSIONS ON OVERALL INTERNET BANKING SERVI

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School Of Business

NGUYỄN THỊ HẠNH DUNG

THE IMPACT OF ONLINE INFORMATION SYSTEM QUALITY DIMENSIONS ON OVERALL INTERNET BANKING SERVICE QUALITY AND CUSTOMER SATISFACTION IN VIETNAM.

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School Of Business

NGUYỄN THỊ HẠNH DUNG

THE IMPACT OF ONLINE INFORMATION SYSTEM QUALITY DIMENSIONS ON OVERALL INTERNET BANKING SERVICE QUALITY AND CUSTOMER SATISFACTION IN VIETNAM.

MASTER OF BUSINESS (Honours)

Supervisor

Dr Nguyễn Thị Nguyệt Quế

Ho Chi Minh City – Year 2014

The development of scientific technology, especially the development of theinformation technology have a strong impact on all aspects of life, economic - social,change awareness and method of manufacturing business many areas, many differenteconomic sectors And banking is the sector which activate primarily base on moderninformation technology is influenced strongly

Nowadays, developing internet banking services is the inevitable trend in Vietnam.Because Internet banking brings the great benefits for customers and the economy, due toits utility, convenience, promptitude, accurate and secure The banks enhance expresslyquality of internet banking service to satisfy the customer aim to higher profit

The success of a internet banking service depend on three dimensions : product,service quality, technology There are many studies research about the factors impact oninternet banking service quality and how to develope them to satisfy the customer 'sdemands but in Vietnam very few stuies mentioned to the quality of informationtechnology while internet banking service quality depends primarily on informationtechnology system The customer will not satisfy with internet banking service quality ifthe information technology system don’t operate well and trouble happen frequently

Based on that, the study was conducted to research "The impact of online

information system quality dimensions on overall internet banking service quality and customer satisfaction in Vietnam”.

The study was conducted by exploratory factor analysis (EFA) method and multiplelinear regression (MLR) for measuring model The survey questionnaires were transfer to

a sample of 250 consumers who has used internet banking services in Vietnam The resultrevealed that six dimensions of online Information system quality including Aesthetic,Timeliness, Contents, Ease of use, Security, Accuracy are important dimensions impact

on customer satisfaction in using Internet banking and Accuracy is the most importantdimensions Based on the results of research, the author hopes that the bank managersrealized the big influence of information system quality on internet banking servicequality to carry out effective solutions to develop internet banking service in Vietnam

TABLE OF CONTENTS

ABSTRACT 1

LIST OF FIGURES 6

CHAPTER I: INTRODUCTION 7

1.1 Research background 7

1.2 Problem statement 9

1.3 Research objectives 10

1.4 Significance of the research 10

1.5 Research scope and methodology 11

1.5.1 Research scope 11

1.5.2 Research methodology 11

1.6 Thesis structure 12

CHAPTER 2: LITERATURE REVIEW and THEORETICAL MODEL 14

2.1 Online information system quality 14

2.1.1 Definition of online information system quality 14

2.1.2 Dimensions of online information system quality 14

2.2 Overall internet banking service quality 15

2.2.1Servicequalityconcept 16

2.2.2Overall internet banking service quality concept 17

2.2.3Impact ofonline information system quality dimensions onoverall internet banking service quality 20

2.3 Customer Satisfaction 24

2.3.1 Customer satisfaction definition 24

2.3.2Customer satisfaction in internet banking context

2.3.3 Impact of overall internet banking service quality on customer satisfaction

in E-banking context 26

2.4 Theoretical model and hypothesis 28

Summary: 28

CHAPTER 3: RESEARCH METHODOLOGY 29

3.1 Research Process 29

3.2 Measurement Scales 30

3.2.1 Measurement of online information systems quality dimensions 30

3.2.2 Measurement of overall internet banking service quality: 33

3.2.3 Measurementof customersatisfaction 33

3.3 Questionaire design 34

3.4 Pilot study 35

3.5 Main survey 35

3.5.1Data collection method 35

3.5.2Sampling method 35

3.5.3Sample size 36

3.6 Data analysis techniques 37

3.6.1 Testing of reliability 37

3.6.2 Exploratory factor analysis (EFA) 38

3.6.3Multiple regression analysis 38

CHAPTER 4: ANALYSIS RESULT 40

4.1 Sample description 40

4.2 Testing reliability of measurement scales 41

4.3 Exploratory factor analysis 42

4.3.1 Testing measurement scales of online information system quality 42

4.3.2 Testing measurement scales of overall internetbanking service quality 46

4.3.3 Testing measurement scales of Customer Satisfaction 48

4.4 Testing correlations between all constructs 49

4.5 Testing research model and hypothesis 49

4.5.1The relationship between online information system quality dimensions and overall internetbanking service quality 49

4.5.2 The relationship between Overall internet banking service quality and Customer Satisfaction 52

4.6 Discussions of research findings 54

CHAPTER 5: CONCLUSION AND IMPLICATIONS 56

5.1 Conclusions 56

5.2 Managerial implications 56

5.3 Limitations and Recommendation for further research 58

REFERENCE 60

APPENDIX 69

Table 3.1: Measurementof aesthetics

Table 3.2:Measurementof timeliness

Table 3.3: Measurementof the content

Table 3.4:Measurementof ease of use

Table 3.5:Measurementof security

Table 3.6: Measurementof accuracy

Table 3.7: Measurement of overall internet banking service quality Table 3.8: Measurement of customersatisfaction

Table 3.9: The sample size

Table 3.10: Cronbach’s alpha reliability coefficient

Table 4.1: Demographic Characteristics of the Study

Table 4.2: KMO and Bartlett's Test

Table 4.3: KMO and Bartlett’s Test

Table 4.4: Rotated Component Matrixa

Table 4.5: KMO and Bartlett’s Test

Table 4.6: Rotated Comonent Matrix

Table 4.7: KMO and Bartlett’s Test

Table 4.8: Total Variance Explained

Table 4.9: Component Matrixa

Table 4.10: KMO and Bartlett's Test and Component Matrix Table 4.11:ANOVAb

Table 4.12:Model Summaryb

Table 4.13: Coefficientsa

Table 4.14:Model Summaryb

Table 4.15:ANOVAb

Table 4.16:Coefficientsa

LIST OF FIGURES

Figure1:Themodelof research

Figure2:Themodelof researchprocess

CHAPTER I: INTRODUCTION

In this chapter, the problems are discussed such as introducing the role andimportance of internet banking in the banking industry; internet banking ‘s situation inVietNam; research objectives, scope and methodology Many researchers havediscussed about internet banking but most of them has not focused on online informationsystem quality dimensions that affect customer satisfaction in internet banking And thecause the thesis was chosen

1.1 Research background

Internet banking could be conceptualized within the context of electronic banking.Internet banking is the situation where “customers can access their bank account via the

Internet using a PC or mobile phone and web-browser” (V.A Zeithaml et al.,2002, p.2).

Currently, Internet banking relies on the Internet environment, service is providedentirely through the network environment and there is combining commercial bankingsystem and traditional electronic goods, such as the distribution of products and services

on the old new distribution channels In recent years, Internet banking has grownworldwide with fast speed This service is also considered as retail distribution channelsand it is the most successful banking services in terms of growth rate of number ofcustomers Internet banking allows customers to use the service through the bank’swebsite anytime, anywhere, quickly, conveniently at a lower cost than other traditionalservices of banks (White and Nteli, 2004) Internet banking enables customers to savetime, take control of their personal finances and even help the environment by opting toreceive electronic statements Customer can access accounts and general information onbank products and services through a personal computer or other intelligent device.Internet banking products and services can include detailed account information forcorporate customers as well as account summary and transfer money

Internet Banking helps banks save up human resources by multiple steps have beenautomated but still ensure for provide high quality services to a large number of theircustomers And so, not the profits of the bank increased but more importantly, theirreputation has been enhanced.For the banks, internet banking also allows them to reduceoperating costs, reduce dependence on the expansion of the branch network, expandingbusiness sector, support the strengthening relationship with customers (Shih and Fang,

2004).Through Internet Banking, communication and transactions between banks andcustomers has also been speeded up Moreover, intense pressure of uncertain economicoutlook, a growing threat from new entrants foster each banks to differentiate themselves

to compete with both local and foreign banks Therefore, the decision to provide InternetBanking is currently perceived as vital for customer retention and maintainingcompetitive advantage (DeYoung and Duffy, 2002)

According to Gartner Group report, the growth rate of online banking services in theU.S is very high, from ten million users in 1999 to thirty -five million users in 2003.According to the report of the organization, online banking services are also used similarpopularity in the U.S., in 2009, approximately 30-40 % of the UK population currentlyuse this service In Brazil, there are about 18.1 million users of online banking services in

2004 It is compared with 8.3 million users in 2002, including 16.2 million user accountsare individual subscribers Here, these financial sites are always be the sites traffic andmost used, with the figure of 50 % of the total 13.5 million Internets account loginregularly (Vichuda and Serap Ekin, 2001) Moreover, if the only consideration in 2004,the Bank of Brazil has invested about 2.1 billion dollars in the technology sector(Febraban, 2004), including the development of online banking services and a number ofother areas

Starting in 1994, internet banking in Vietnam was built on the foundation ofinformation technology and banking technology at a low level, only allowing customers

to access to get information and makesimple payments In just a short time, the level ofinformation technology in our country has made significant improvement, it leads to therapid development of the industries applied the information technology such as bankingsector.In recent years,internetbanking services is growing more aggressive and havingstrong shifts However, internet banking in Vietnam is only in the early stages ofdevelopment and was monotonous, meager and not attract many customers Non-cashpayment in Vietnam is still low, the proportion of cash used in bank circulation / totalmeans of payment is ranged between 24-25% This rate is much higher than othercountries in the region such as Thailand (6.3%), China (9.7%) Psychology preferred cash

in using VND, foreign currencies and the understanding of banking services byVietnamese are low is one of the reasons for extending banking services difficultly

The success of a internet banking service depend on three dimensions : product,service quality, technology But Vietnam is a developing country so the development andsecurity of information technology sector is not as high as developed countries leads tothe quality of internet banking service is not high affect the customer satisfaction Sothere are many stusies research about which factors impact to internet banking and howdevelope them to satisfy the customer 's demands but there are not many stuies mentionedthe quality of information technology in Vietnam while internet banking service would behave some problem if the technology has trouble Summary, although a service which be

ad well, the abundant human resource but the technology is not good, almost customerswon't want to use this service In the scope of this thesis, we want to research about theimpact of online information system quality dimensions on overall internet bankingservice quality and customer satisfaction in Vietnam

1.2 Problem statement

Consumer satisfaction is the major problem for the businesses that are operating inElectronic Commerce systems Good customer service quality is the main factor that willdetermine, in the future, whether the businesses will survive or fail (Thompson, Greenand Bokma,2000) Improving customer service helps to build and maintain customersrelationships Recently, many banks have used the Internet as a new market channel tooffer their customers avariety of services 24 hours a day With internet banking service,

to satisfy customer’s needs, many banks need to set up web sites that provide qualityinformation and services to customers Better service quality typically can help to gethigher market share and better returns (Slu and Mou, 2003) It is desirable for onlineservice providers to uncover what attributes consumers utilized in their assessment ofoverall service quality and satisfaction and which attributes are more important (Yangand Fang, 2004) Internet-based services are believed to have convenience, interactivity,relatively low cost However, there is no much research about the factors that affectcustomer satisfaction with Internet-based services (Khalifa and Liu, 2003) Due to rapidtechnological change and market competition, service quality becomes an increasinglyimportant issue Therefore understanding overall internet banking service quality withcustomer satisfaction is need

Internet banking compared to traditional banking, heavily involves non-humaninteractions between customers and online bank information systems (Jun and Cai, 2001)

It is important that the banks provide customers with high quality services to survive inthe highly competitive Internet banking industry For this, bankers first need tounderstand the attributes that customers use to assess service quality to monitor andenhance the internet banking service quality There are numerous studies that identifiedthe key service quality dimensions in the traditional banking environment, but relativelylittle literature has investigated service quality attributes in the internet banking industryand the relation with customer satisfaction (Jun and Cai, 2001).Jun and Cai (2001)indentified online information system quality is one of three broad conceptual categoriesrelated to Internet banking service quality There is no much researchers concern aboutonline information system quality while online information system quality is vital tointernet banking users’ perceptions of overall internet banking service quality because it

is a key enabler of the services they wish to use

There are many different perceptions about internet banking webiste quality, but insummary there are six dimensions belong to online information system quality They areease of use, aesthetic, timeliness, contents, security and accuracy (Jun and Cai, 2001) Sothat, the thesis will focus to analyze deeply about relationship between online informationsystem quality dimensions to overall internet banking service quality and customersatisfaction

1.3 Research objectives

The main objective of this research is to investigate the usefulness and applicability

of theoretical model in measuring the impact of online information system qualitydimensions to overall internet banking service quality and customer satisfaction Thedimensions of online information system quality including aesthetic, timeliness, contents,ease of use, security, accuracy

1.4 Significance of the research

This study has important implications for both practical business (leaders ofcommercial banks, marketing managers…) and academic (researchers, students of thebusiness administration department…) as follow: The research will help the leaders ofcommercial banks respond the satisfaction of customers It leads to increase the amountconsumer which will use this system In other sides, it helps the bank has the rightdecision to develop the Internet Banking through six dimensions such as Aesthetic,Timeliness , Contents, Ease of use , Security , Accuracy Besides,the results of this study

are also a basis for references in developing other research about internet banking service

The scope of this survey is primarily in HCM province, so the results are notcovering the whole territory of Vietnam This is also the limitation of thesis

1.5.2 Research methodology

The research conducted the survey of using internet banking services All data ofthe survey would be got from studies, articles and journals to make the qualityquestionaires to make clearly the target of thesis There were two kinds of survey to beused, they were paper survey and online survey Online survey would be sent to theinternet banking users via emails and paper suarvey would be given direcly to customers

in the banks The content of two kinds of survey was similar

This study used two research methods The first stage, qualitative research identifiesthe models, factors, suitable measurement variables for survey Through the previousrelevant researches, the questionnaire was built then running the pilot test for checkingthe efficiency and the meaning of the questions The pilot test was purposed to exploreand define the relevant items and building a completed questionnaire The second stage,quantitative research was the main approach of this study The goal is to identify theimpact of online information system quality dimensions on overall internet bankingservice quality and customer satisfaction in Vietnam

Sampling method be applied was the convenience sampling method This meansthat sampling based on convenience or easy to approach the object, where investigatorsare easily to meet objects Convenience sampling method is non-random sampling (ornon-probability sampling) methods The limit of this method is sampling units in overall

have not be equal ability to be selected The non-random sample selection is completelydependent on the experience and understanding of the researcher about the overall, so theinvestigate results are often subjective.

Data analysis methods was used for study such as sample demographic, statisticalanalysis, tests of hypothesis, explore the research objectives and withdraw other findingsfrom this study Accordingly, the descriptive analysis will be presented first to showrespondents demographics, followed by the Cronbach’s alpha and exploratory factoranalysis (EFA) for measuring model, finally multiple linear regression (MLR) analysiswill be performed for hypothesis testing

1.6 Thesis structure

This thesis organizes in five chapters The first is the introduction of the study Thesecond is the literatures review and hypothesis Following is the research method Thenext part is the results and limitations of the findings The conclusion comprises the finalsection of this research

• Chapter 1 – Introduction

This chapter first introduces about advantages internet banking service and reflectsthe current situation of it in Vietnam, due to affect the customer satisfaction on thisservice It leads to propose the research problem, research objectives and significance ofthis study

• Chapter 2 - Literatures review

Chapter 2 presents the theoretical foundation of the research, is all about presentingprevious research done on the stream of studies related to customer satisfaction oninternet banking service Including the definition and related problem overall internetbanking service quality, customer satisfaction and online information system qualitydimensions From that, the hypothesis are proposed for research model This chapter isconcentrates on explaining each variable in the model, and reasons for choosing them to

be include in the research model

• Chapter 3 - Research Methodology

Chapter 3 introduces research methodology Research method describes the way ofestablishment of the measures and conducting the survey This part includes two steps,qualitative research to modify draft measurement scale and quantitative research toanalyse the data collected to test the research hypothesis proposed in chapter 2

• Chapter 4 – Results of Data Analysis and Discussion

Chapter 4 translates data collected from survey, analyses data as well as discussesthe result finding in connection with research model Accordingly, the researchhypothesis are tested This chapter explains the empirical part of the study This partdiscusses the method for collecting data used to test the hypothesis, and it analyses thedata received, its reliability and multiple regression

• Chapter 5 – Conclusions and Recommendations

The last chapter, chapter 5 discusses the research results by affirming theexploratory values as well as connecting to the realistic conditions to suggest the practicalapplication This chapter includes conclusion, implication, and research limitations.Lastly, the limitations are recognized to direct for further research in the future

References and appendixes are included in the end of thesis

Summary:

The thesis begins with introduction by discussing the research background andimportance of internet banking Then the problem statement was defined to take a closedlook at using internet banking in Viet Nam The research object is the customers who usethe internet banking service Due to limited time and cost, the research surveyed about

300 customers of some banks in HCMC Finally, this chapter discussed on the researchmethodology

The most important thing to remember is that the banks need to provide customerswith high quality services to survive in the highly competitive internet banking industry.This is a fact acknowledged all over the world, and not the least in Ho Chi Minh Citywhere internet usage in general are very popular

This research is show us how to customer satisfied of overall internet bankingservice quality and the bank managers need to care about what dimensions of onlineinformation system quality to develop the internet banking service

CHAPTER2: LITERATURE REVIEW AND THEORETICAL MODEL

Before carrying out the survey on the effect of dimensions of online informationsystem quality to overall internet banking service quality and customer satisfaction, thischapter provide a theoretical background about online information systems qualitydimensions, overall internet banking service quality and overall internet banking servicequality Base on these, the conceptual research model and hypothesis are constructed

2.1 Online information system quality

2.1.1 Definition of online information system quality

The Internet is an innovative form of information technology, yet most commercialWeb sites function as well-defined information systems Information system quality can

be divided into system and information quality System quality refers to softwaredevelopment caliber, while information quality embraces accuracy, timeliness, currencyand reliability of information (DeLone and McLean, 1992)

2.1.2 Dimensions of online information system quality

When a customer accesses a Web site, the Web site can be considered as aninformation system and the customer as an end-user of the information system TheInternet-based data processing, thus, can be regarded as an extreme case in an end-usercomputing environment where the users of Web sites seldom have direct interaction withthe operations staffs of the Web sites In order to measure end-user computingsatisfaction, Doll and Torkzadeh (1988) proposed five quality dimensions that influence

end-user satisfaction: content; accuracy; format; ease of use; and timeliness In

addition, Zeithaml et al (2002) have uncovered several quality dimensions related to

online systems- ease of navigation, flexibility, efficiency, site aesthetics, and security Online information system quality was operationalised with six dimensions (ease of use, accuracy, security/privacy, contents, timeliness, and aesthetics) from the work of Jun

and Cai (2001)

Besides the main studies which mentioned, having others study research about themeasurements of service quality related to Internet banking website such as:

Yoo and Donthu (2001) have developed a measurement instrument SITEQUAL,

which includes four dimensions: ease of use; aesthetic design; processing speed; and

security As for Internet banking, Sathye (1999), with respect to the adoption of Internet banking by Australian consumers, found that two factors such as "difficulty in use" and

"security concern" are important reasons that customers do not want to use the service.

Jayawardhena and Foley (2000) suggested that the features of Internet banking Web sites,

such as: the speed to download; content; design; interactivity; navigation; and

security, are critical to enhancing customer satisfaction Cox and Dale (2001) have discovered and statistically validated four quality factors of a Web site These are: ease of use (the design of the Web site); customer confidence (how the Web site generates customer trust); online resources (capability of the Web site to offer products/services); and relationship services (how the Web site bonds with the customer and inspires

loyalty) Santos (2003) has uncovered five dimensions of online systems quality - such as

ease of use, appearance, linkage, structure and layout, and content, and labeled them

as incubative dimensions

On the basis of a comprehensive review and synthesis of the extant literature on

SERVQUAL, Zeithaml et al (2002) detailed five broad sets of criteria as relevant to

E-SERVQUAL perceptions: (a) information availability and content, (b) ease of use orusability, (c) privacy/security, (d) graphic style, and (e) reliability/fulfillment

The above researches related to online information system quality in Internetbanking mentioned to many different factors, but in generally they have the same asfactors in the study by Jun and Cai (2001) So based on the research result of Jun and Cai

(2001), the thesic decided focus on six dimensions (ease of use, accuracy, security, contents, timeliness, and aesthetics) of Online information system quality.

2.2 Overall internet banking service quality

The main purpose of running a business is to pursue a better goal and higher profits.Developed from Internet marketing and the traditional service quality literature, servicequality is one of the key factors in determining the success or failure of electroniccommerce (Yang, 2001) The concept of service quality in e-commerce, also called e-service quality, can be defined as the consumers’ overall evaluation and judgment of theexcellence and quality of e-service offerings in the virtual marketplace

As for internet banking service, a well-designed website will create a different valuefrom the normal, and improve interest of a consumer access to the site to do othertransactions A well design website will create profits and contribution to a bank because

it makes increased consumer's satisfaction Internet banking service quality not onlyprovides for a bank a better advantage of competitive, it also enhances the relationshipbetween bank and consumers in terms of saving cost.

2.2.1 Servicequalityconcept

According to Parasuraman, Berry and Zeithmal (1985), a perception of servicequality is a result of a comparison between what consumers consider the service should

be and their perceptions about the actual performance offered by the service provider

Asubonteng et al (1996) defined service quality is the difference between customers’

expectations for service performance prior to the service encounter and their perceptions

of the service received Gefan (2002) said service quality as the subjective comparisonthat customers make between the quality of the service that they want to receive and whatthey actually get

In a long period, many researchers have tried to define and measure service quality.For example, Lehtinen and Lehtinen (1982) indicated that the service quality had to beassessment on two aspects ,(1) the process of providing service and (2) the result ofservice Gronroos (1984) also proposed two components of quality services, which are(1) technique quality, that's what the customer received and (2) functional quality, show that how services are provide

However, when talking about service quality, we can not forget to mention the huge

contribution of Parasuraman et al (1988,1991) Parasuraman et al (1988) defines service

quality is the "different degree between the expectations of the consumers about servicesand their awareness about the service result" These authors have initiated and usedqualitative research and quantitative to build and inspect components scale of servicequality (called SERVQUAL scale) SERVQUAL scale was adjusted and inspected inmany different types of services Finally the SERVQUAL scale includes 22

variables to measure five components of service quality such as reliability ,

responsiveness, assurance, tangible and empathy :

(1) tangibles, which pertain to the physical facilities, equipment, personnel and

communication materials;

(2) reliability, which refers to the ability to perform the promised services

dependably and accurately;

(3) responsiveness, which refers to the willingness of service providers to help

customers and provide prompt service;

(4) assurance, which relates to the knowledge and courtesy of employees and their

ability to convey trust and confidence; and

(5) empathy, which refers to the provision of caring and individualised attention to

customers

Parasuraman (1991) confirmed that the SERVQUAL is the complete

measurement about service quality It’s worth, reliability and may be applied for everydifferent type

2.2.2 Overall internet banking service quality concept

Internet banking could be conceptualized within the context of electronic banking.Though it has been variously defined, according to Daniel (1999), electronic banking isthe delivery of banks‘ information and services by banks to customers via differentdelivery platforms that can be used with different terminal devices such as personalcomputer and mobile phone with browser or desktop software, telephone or digitaltelevision Electronic banking, therefore, could be categorized into PC banking, Internetbanking, TV-based banking, and Telephone-based banking It is a construct that consists

of several distribution channels Internet banking is the situation where ―customers canaccess their bank account via the internet using a PC or mobile phone and web-browser

(Zeithaml et al.,2002).

Many past studies have developed various models for understanding relevantservice quality dimensions relevant to internet banking The empirical work of (Ho andWin,2010) was conducted in an emerging economy of Taiwan Internet banking sector,they developed and validated a five dimension internet banking service quality model thathas 17-item measurement scale for measuring the service quality in internet banking The

dimensions were based on e-service quality model of (Cristobal et al.,2007) The

emerged dimensions for the internet banking service quality context are: web design,customer service, assurance, preferential treatment and information provision

Further studies have been done on how to measure service quality within banking

industry A study done by Joseph et al.,(1999) investigated the service quality within

banking industry when costumers are using Internet, telephone or ATM machines Thestudy has shown that there are six factors when identifying service quality of electronic

banking They areconvenience/accuracy, feedback/complaintmanagement, efficiency,queue management, accessibility, customization.Bahia and Nantel proposed analternative measure in how service is perceived in the banking industry Their results

were inspired by those done by Parasuraman et al.,(1988) and contained six dimensions:

effectiveness and assurance, access, price, tangibles, service portfolio andreliability.Effectiveness and assurance means that customers should feel safe in using the bank.Access is when customers expect the bank to have the latest technology so that they canperform their banking errands efficiently and safely Price is an important measuringinstrument and Bahia and Nantel suggest that the price should be reasonable because it isattracting the customer Tangibles refer to the atmosphere of the bank where the effectiveservice environment exists Service portfolio focuses on those services that are offeredwhile reliability deals with trustworthiness of the banks from the customer’s point ofview (Bahia,2000)

In a first attempt to adapt the SERVQUAL dimensions to e-services, Kaynama andBlack (2000) subjectively evaluated the online services of 23 travel agencies and sevendimensions derived from SERVQUAL: responsiveness, content and purpose (derivedfrom reliability), accessibility, navigation, design and presentation (all derived fromtangibles), background (assurance), and personalization and customization (derived fromempathy) One author who has extended the SERVQUAL conceptualization to theelectronic context is Gefan (2002), who found that the five service quality dimensionscollapse to three with online service quality: (a) tangibles; (b) a combined dimension ofresponsiveness, reliability, and assurance; and (c) empathy In that research, tangibleswere found to be the most important dimension in increasing customer loyalty and thecombination dimension most critical in increasing customer trust Yang and Fang (2004)found that ease of use and usefulness are important factors in evaluating online servicequality Doll and Torkzadeh (1988) identified five quality dimensions that have an impact

on “end-user” satisfaction in an online environment: content, accuracy, format, ease ofuse, timeliness The reliability and validity of these dimensions were confirmed by Doll

et al.(1994) and Hendrickson and Collins (1996) Wolfinbarger and Gilly (2002) have

found four online service quality dimensions through focus group interviews and anonline survey These are web site design, reliability, privacy/security and customerservice They found that reliability and fulfillment are the strongest predictor of customer

satisfaction With regard to the success of a web site, Liu and Arnett (2000) suggestedfour factors They are: system use, system design quality, information quality, and

playfulness Exploratory research done in the context of online retailing by Yang et al.

(2004) revealed reliable/prompt responses, attentiveness, and ease of use hadconsiderable impacts on both customers perceived overall service quality andsatisfaction It also indicated that there is a significant positive relationship betweenoverall service quality and satisfaction The resultof this reseach show that the key driversare ease of use and reliability However, other factors such as accuracy, responsivenessand web site design are also important.Madu and Madu (2002) proposed

15 dimensions of online service quality dimensions based on literature review:performance, features, structure, aesthetics, reliability, storage capacity, serviceability,security and system integrity, trust, responsiveness, product/service differentiation andcustomization, web store policies, reputation, assurance and empathy

The difference of the other studies, Jun and Cai (2001), in a study of online banking,found that web site design, information, ease of use, access, courtesy, responsiveness, andreliability are significant dimensions that determine service quality In 2001 one researchwas conducted on e-banking and service quality by Jun and Cai In a new direction, based

on the familiar factors of the previous studies on e-banking service quality, Jun and Caiidentified seventeen dimensions which all could be divided into three categories:customerservice quality, online systems quality and banking service product quality.Even their studies have been inspired by the SERVQUAL instrument but because of thee-banking special characteristics this instrument has been extended Customer servicequality contains dimensions like reliability and credibility, but also communication andunderstanding the customer Online systems quality is about the security online and ademand of an easy to use e-banking program Banking service product quality is wherecustomers want a variety of products and services that are offered through e-banking

In the other sides, with the development of the Internet Banking service by manyperiods, there were many researches about the factors which affect to the satisfaction of

customers Michel et al.(2008)based on the research of Jun and Cai (2001) to examine

relations between Online customer service quality; Online information system quality;

Banking service product quality and overall internet banking service quality And the relationship between overall internet banking service quality and customer satisfaction.

They gave the results :

• Online information system quality is a significantly stronger predictor ofoverall internet banking service quality than both online customer service quality andbanking service product quality individually and when combined

• When overall internet banking service quality is perceived to be high,customers are more likely to be satisfied with their online service and consequently will

be more satisfied with their bank

So this thesis want to research deeply about the dimensions ofOnline informationsystem quality with affects to Overall internet banking service quality

2.2.3 Impact ofonline information system quality dimensions onoverall

internet banking service quality

Online information system quality is vital to internet banking users’ perceptions ofoverall internet banking service quality because it is a key enabler of the services theywish to use (Jun and Cai, 2001) If the information system does not perform well,customers are not able to reliably make transactions or access information, compromising

their perceptions of service quality (Yang et al., 2004) If the web site is not informative,

or the design of the web site is not friendly, this will have a negative impact oncustomers’ perceptions of overall internet banking service quality The moreconveniently customers can interact with the bank through the web site, the safer theironline transactions, and the more error-free the transactions, the better customers’perceptions with the service quality provided online

Some studies researched about dimensions of online information system qualityincluding ease of use, accuracy, security, contents, timeliness, and aesthetic affect tooverall internet banking service quality which were syntheticed such as:

According Jun and Cai (2001), aesthetic shows the atractiveness of thewebsite.Having six dimensions of online information system quality which were found intheir study They are ease of use, accuracy, security/privacy, contents, timeliness, andaesthetics Aesthetics is related to the concept that aesthetically appealing Web site wouldhave a positive impact on drawing potential customers’ attention

Michel et al.(2008 ) based on the research of Jun and Cai (2001) to exam the

relationship between online information system quality dimensions and overall internetbanking service quality and customer satisfaction They also showed dimensions similar

to Jun and Cai (2001) and gave the result as aesthesic was also one of the online sytemquality dimensions and impact positively to overall internet banking service quality Cao(2005) identified that web sites should be designed accordingly that will create anopportunity for users to find accurate information, easier search facilities, less loadingtime and ensure security because customers are most concerned with finding accurateinformation, searching fast and placing oder securely A quality website should also be

designed appealing Zviran et al.(2005) conducted a study to find out important factors

that drive user satisfaction from the web site They have empirically tested usersatisfaction of different web sites and determined two characteristics: usability and user-based designed.In light of the above we suggest our first hypothesis:

H1a: Aesthetic is positively related to Overall internet banking service quality

Weinberg (2000) emphasizes that a page design should consider not onlyappearance but also loading time Researchers have studied the significance of waitingtime in service evaluations Schleifer and Amick (1989) report that system response time

is inversely related to computer user satisfaction Weinberg (2000) concludes, in terms ofwaiting time on the internet, that is the best if the homepage loads relatively fast, and thatefforts toward achieving this result will be rewarded One of the e-commerce challenges

on the web is when users experience intolerably long waits for a website’s page to load.When the loading time exceeds the time that a web user is willing to wait, the web userwill either reirect the web-browser to another website or quit using the web (Weinberg,2000)

Jun and Cai (2001) gave six dimensions of online information system quality affect

to customer satisfaction and timeliness is one of these dimensions Timeliness mentions

up-to-date information Michel et al.(2008) examed the result of Jun and Cai to show

clearly the impact of timeliness to overall internet banking service quality and customersatisfaction If the banking transaction have an error, it should not take too long to correctthe error after it is reported Internet banking acceptance relies closely on themanagement of consumer relationship (Goi, 2005) Thus, our secondhypothesis is:

H1b: Timeliness is positively related to Overall internet banking service quality

Barnes and Vidgen (2001) contend that WebQual should be use to evaluate awebsite from a customer’s point of view via four components: functionality, content,sevice and attractiveness Smith (2001) has developed several criteria to evaluate agovernment web site and they have tested these criteria on a government web site to seetheir applicability They have divided these criteria into two groups: information contentcriteria and ease to use criteria

Jun and Cai (2001) definitioned that “content” is information on products andservices online or other informations that customer needs “Content is king” is a well-known slogan (Huizingh,2000) Providing information is the basic goal of a website(Bhatti et al,2000) Deciding what content to place on a website is extremely important.The reasoning stands that the target audience a company wants to attract drive the sitecontent (Day,1997) Lin an Lu (2000) address the issue of how customer’s acceptance isaffected by the features and accurate information Perkowitz and Etzioni (1999) explorethe importance of updated information with the notion of adaptive website Updatedinformation means both updating existing content and adding new content to the site

(Ducoffe,1996) According to Michelet al.(2008 ), “content” measured by the customer’s

account information on internet banking website is well documented and clear Hence,our third hypothesis is:

H1c: Contents is positively related to Overall internet banking service quality

Rai et al (2002) studied users of a computerized student information system (SIS)

and found system quality and information quality to be determinants of satisfaction Theyhave taken system quality as ease of use and defined it as the “degree to which the system

is user friendly”

Yang and Fang (2004) found that ease of use and usefulness are important factors inevaluating online service quality Exploratory research done in the context of online

retailing by Jun et al (2004) revealed reliable/prompt responses, attentiveness, and ease of

use had considerable impacts on both customers perceived overall service quality andsatisfaction It seems that the key drivers are ease of use and reliability However, otherfactors such as accuracy, responsiveness and web site design are also important

The quality of Internet banking includes ease in signing on the system, ofperforming the transactions, and getting to a live person in case of access problems (Siawand Yu,2004; Tan and Teo, 2000) Smith and Merchant (2001) find that online customersare very particular about having a website easy to read, as well as easy to navigate.

Michel et al.(2008) measured “ease of use” by the layout of the information in internet

banking website is easy to follow; easy to complete a transactions through Internetbanking website and easy to log on customer’s account A responsive website proves to

be highly important to end-users (Robbins and Styliano, 2003) Devaraj et al (2002)

suggest that aspects associated with transaction costs, service quality and easy access toinformation are important antecedents of e-commerce consumer satisfaction Hence, ourfourth hypothesis is:

H1d: Ease of use is positively related to Overall internet banking service quality

Jun and Cai (2001) defined security is privacy and information transaction safety.Zeithaml, Parasuraman, and Malhotra's (2000) defined “security” is degree to which thecustomer believes the site is safe from intrusion and personal information is protected.Zeithaml, Parasuraman, and Malhotra (2005) detailed five broad sets of criteria asrelevant to eSQ perceptions: (a) information availability and content, (b) ease of use orusability, (c) privacy/security, (d) graphic style, and (e) reliability/fulfillment Privacy(the protection of personal information) and security (the protection of users from the risk

of fraud and financial loss) have been shown empirically to have a strong impact on

attitude toward use of online financial services (e.g., Montoya-Weiss et al 2003) Michel

et al.(2008 ) measured “security” by the bank not allowed misuse customers’s personal

information and make the customers feel safe to do online transactions Hence, our fifthhypothesis is:

H1e:Security is positively related to Overall internet banking service quality

At present, online banking services do not differ from each other very much Allservices contain almost the same basic properties without exclusivity It seems that bankshave attempted to minimise risks by developing online services that are primarilyreliable This can be observed by looking at the high user satisfaction with accuracy and

timeliness (Pikkarainen et al.,2006).

Doll and Torkzadeh (1988) identified five quality dimensions that have an impact

on “end-user” satisfaction in an online environment: content, accuracy, format, ease ofuse, timeliness “Accuracy” is accurate online transactions and there're no errors ininterface and contents (Jun and Cai, 2001) Banks must provide accurate accountinformation of customers’ financial transactions Customers expect Internet bankingtransactions to be accurate and free of errors (Goi, 2005) Customers are more sensitivewith finding more accurate information, security and fast search facilities (Cao,2005)

Michel et al.(2008) measured “accuracy” by online transactions and the information

on internet banking web site are always accurate and the online transactions areaccurately dealt with Jun and Cai (2001, pp.287-288) with their research indentified

“security” is one of 17 dimensions of internet banking service quality So our sixhypothesis is:

H1f: Accuracy is positively related to Overall internet banking service quality

2.3 Customer Satisfaction

2.3.1 Customer satisfaction definition

Customer satisfaction has become a major area of marketing that has receivedconsiderable publications from practitioners and scholars in the last two decades Severalresearch have defined satisfaction in a different way Satisfaction is a person‘s feeling ofpleasure or disappointment resulting from comparing a product‘s performance (outcome)

in relation to his or her expectation (P Kotler and K Keller,2006) Zeithaml and Bitner(2000) defined customer satisfaction as the customers’ evaluation of a product or service

in terms of whether that product or service has met their needs and expectations.Consumer satisfaction is a phenomenon of particular importance in the evaluationprocess of a shopping, consumption, or product or service usage experience and istherefore vital in long-term consumer responses (Gronroos, 1991)

Customer satisfaction has been recognized as an important element that drivescustomer retention, loyalty and post-purchase behavior of customers (Heskett, Sasser andSchlesinger,1997; Rust and Olive ,1994) Satisfied customers tend to have higher usage

of service, possess stronger repurchase intention, and are often eager to recommend theproduct or service to their acquaintances than those who are not satisfied In addition,dissatisfied customers are more likely to search for alternative information and switch to

another retailer, and is also more resistant to developing a close relationship with the

retailer (Ribbinket al.,2004).It is well documented that the measurement of Customer

satisfaction regarding the service quality of firms is a necessary means by whichorganizations delve into the minds of its customers for useful feedback that could formthe basis for effective marketing strategy

2.3.2 Customer satisfaction in internet banking context

Since firms exist to satisfy customers by meeting their requirements, it is crucial forbanks that offer internet banking services to periodically and consistently measure thesatisfaction of their customers As customers use the banking internet services, it might

be that they are not satisfied, to some extent, with certain dimensions of the servicequality To obtain approval for the application of new information technologies on themarket, a lot of research and survey was made, along with making many different models

to identify research the factor or factors that influence the acceptance of customers Byconsidered online banking is a new technological advances (Lin and Lee, 2005), research

on the acceptance of new technological advances can be used to study the acceptance ofthis service In fact, there are several theoretical approaches have been used to study andidentify the factors affecting the acceptance and use of new information technology

(Venkatesh et al, 2003) One of the models used in the study of popular acceptance of

each individual technology TAM model (Davis, 1989), with the proposed two factors can

be used to predict behavior the customer for the use of new technologies, and therebyaffect the attitude of acceptance directly using this technology is the ease of use andperceived usefulness This model is derived from the theory of rational action (Theory ofReasoned Action - TRA) (Fisbein and Ajzen, 1975), theory of planned behavior (Theory

of Planned Behavior - TPB) (Ajzen, 1985)

Satisfaction with online service has been studied extensively by manyauthors sincethe late 1990s (McHaney and Cronan, 1998; Kuo and Wu, 2008) Sheng and Liu (2010)and Kuo and Wu (2008) confirm that improved user satisfaction with this type of servicefavours future purchase intention and increased loyalty (Eid, 2011) However, in thefinancial sector, the study of online satisfaction as an element of consumer decision-making behaviour in virtual environments has only recently attracted attention in

marketing research (Lassala et al., 2010) Within the context of e-banking, Mattila (2001)

conceded that customer satisfaction is a key to success in internet banking and banks use

different media to customize products and services to fit customers’ needs Research intothe adoption and use of e-banking services has grown in many parts of the world, but thecentre of attention has been largely on determinants of online banking adoption, not on

user satisfaction (Pikkarainen et al., 2006) Riquelme et al.(2009) demonstrated that

satisfaction with electronic banking is directly related to the services that an entity offers

through this channel Casalo´et al.(2008) showed that satisfaction with previous

interactions with the bank’s web site had a positive effect on customer loyalty andpositive word-of-mouth (WOM)

In addition, in response to the strategic changes that the financial sector isundergoing, some recent authors have approached the study of electronic banking based

on the antecedents of adoption by users In this sense, Yoon (2010) verifies that design,speed, security, information content, and customer service have a significant influence oncustomer satisfaction with electronic banking This paper focuses only on the directinfluence of these constructs on satisfaction without considering the relation of theconstructs with each other Further, Poon (2008) states that antecedents of usersatisfaction with electronic banking include accessibility, convenience, design andcontent However, this research does not provide an explicit model that includes thesatisfaction construct Finally, Ahmad and Al-Zu’bi (2011) state that accessibility,comfort, content, design and speed, among others aspects, determine the level of usersatisfaction, though this paper does not focus on analysing the role of these constructs asdirect determinants of satisfaction

2.3.3 Impact of overall internet banking service quality oncustomer

satisfaction in E-banking context

Johnson et al (2008) also illustrate that the influence of various dissatisfied such as

inefficiency, chaos, incompetence and isolation on online banking customer satisfaction

is mediated by consumer performance ambiguity and consumer trust in the technology.Thus, in order to maintain and expand their customer base, it is critical for banks tounderstand the criteria consumers use to evaluate internet banking services and how theseimpact on their perceptions of overall internet banking service quality, and satisfactionwith e-service and banking overall This leads to the relationship between service qualityand satisfaction In consumer satisfaction/dissatisfaction literature, expectation –disconfirmation has been given attention where disconfirmation refers to the difference

between prepurchase expectations and perceptions of postpurchase (Peter and Olson,1990) There are two types of disconfirmation: negative disconfirmation and positivedisconfirmation Negative disconfirmation occurs when product performance is less thanexpected, hence consumers are more likely to be dissatisfied, and positivedisconfirmation occurs when product performance is better than expected, which is morelikely to result in satisfaction.

Zha, Ju and Wang (2006) showed in their research that dimensions of e-service qualityare strongly predictive of customer satisfaction and trust Service quality and satisfaction,though the two concepts are different but they have closely related to each other in the study

about services (Parasuraman et al.,1988) The previous studies have shown that service

quality is the cause of satisfaction (Cronin and Taylor, 1992) The reason is related to theservice quality delivery and satisfaction is only evaluated after using the service If thequality is improved but not based on the needs of the customer,the customers won't neversatisfied with that service Therefore, when using the service, if customers perceive highquality service, then they will be satisfied with the service Conversely, if customers perceivelow quality services, the dissatisfaction will appear

There appears to be a consensus emerging that satisfaction refers to the outcome ofindividual service transactions and the overall service encounter, whereas service quality

is the customer’s overall impression of the relative inferiority/superiority of theorganisation and its services (Johnston, 1995) Numerous studies have shown that servicequality is positively related to customers’ satisfaction in an online environment (Han andBaek, 2004; Yang and Fang, 2004) Intuitively, the more positive customers’ perception

of online service quality, the better their overall satisfaction with the bank is likely to be.The strength of this relationship depends on the weight given by customers to overallinternet banking service quality relative to other attributes of the bank On this basis, wehave the following H2 hypothesis :

H2: Overall Internet Banking Service quality is positively related to Customer satisfaction in E-banking context

Theoretical model and hypothesis

CHAPTER 3: RESEARCH METHODOLOGY

This chapter on Methodology describes the chosen sampling technique, the way thedata for the study has been collected and the statistical techniques used to analyze thedata In addition, the issue of the reliability and validity of the presented study isdiscussed

3.1 Research Process

Qualitative research is found appropriate for discovery, exploring a new area,developing hypothesis and qualitative data are useful when “one needs to supplement,validate, explain, illuminate or reinterpret quantitative data gathered from the same

setting” (Amaratunga et al., 2002, p.22).

Quantitative research approach is based on the development of testable hypothesisand theory which can be generalized across settings Quantitative research is defined as

“a systematic investigation of social phenomenon via statistical, mathematical orcomputational techniques” (Given, 2008, p.16)

The research procedure is implemented through a combination between qualitativeresearch and quantitative research In qualitative research, the purpose is to clarify theconcepts and interpret the items in measurement scales into dimensions of onlineinformation system context based on the standpoint of customer using internet bankingservices Through the previous relevant researches, the questionnaire was built thenrunning the pilot test for checking the efficiency and the meaning of the questions Thepilot test was purposed to explore and define the relevant items and building a completedquestionnaire So measurement scales are modified before being employedfor mainsurvey in quantitative research

Figure2:Themodelof researchprocess

model

Pilot study(n=11)

Reliability analysis Main survey Final questionnaire

Threeitemsweretakentomeasure“ aesthetic”based on Jun and Cai (2001), Michel et

al (2008 ), Cao (2005) Measurement scaleof the web’s aesthetic are:

Table 3.1: Measurementof aesthetics

Thisscalefocusedonthecustomer’semotiononperformance of internet banking’s

website The performance of website including: interface of website, images and

symbols, arrangemet images and symbols, conduct for using

3.2.1.2 Measurement of timeliness

Thereitemsweretakentomeasure“timeliness”basedon Cao (2005); Doll and

Torkzadeh (1988), Jun and Cai (2001), Michel et al.(2008), (Goi, 2005) Measurement

Time to log in internet banking is short TIM2

Time to get result of transaction is short TIM3

This scale list of timeline of events which the custommers spent on using internetbanking service This scale reflected three substance of the timeliness: time to fix theerror transactions, time to log in and time to get result

3.2.1.3 Measurement of contents

Fouritemsweretakentomeasure “content” based on Cao (2005); Doll and Torkzadeh

(1988), Jun and Cai (2001), Michel et al.(2008 ), Measurement scale of the content was

below:

Table 3.3: Measurementofcontents

Website show all information about services of CON1

internet banking clearly and easy to understand

You can interrogate all your personal information CON2

and transaction information on website

Functions of website satisfied almosts your needs CON3

New services of internet banking were updated on CON4

website regularly

Thisscalefocused ontheinformation which internet baning’s website contain and

supply to custommers The cuscommers can find the informations about internetbanking’s service as well as their personal information and financial transactioninformations Custommers can find the information at any time without pay any free.

3.2.1.4 Measurement of ease of use

Fouritemsweretaken to measure “ease of use” based on the study of Doll and

Torkzadeh (1988); Jun and Cai (2001);Michel et al.(2008) Measurement scale of the

ease of use was below:

Table 3.4: Measurementof ease of use

You can use services of internet banking by many ways such as: USE1

website or on mobile phone

It’s easy step to log in to internet banking website USE2

It’s simple to be supplied internet banking services by the banks USE3

It’s easy to identify and track utilities of internet banking USE4

services

Thisscale measures the convenience in using internet banking The convenience isessential condition to encourage the custommers use internet banking The moreconvenient in using internet banking the more custommers use it

3.2.1.5 Measurement of security

Threeitemsweretakentomeasure “security” based on Jun and Cai (2001); Michel et

al.(2008 ) Measurement scale of the security was below:

Table 3.5: Measurementof security

You feel trust when transaction via internet banking SEC1The internet banking services which you have beeing using, supplied SEC2many layers of security when you handling a financial transaction

Your pesonal information and financial information are highly secured SEC3when you using internet banking services

important to all activities of the bank The banks are responsible for securingcustommers’s information If custommer’s information is disclosed but the cause is done

by the bank, the bank must be responsible for the losts of custommers

3.2.1.6 Measurement of accuracy

Threeitemsweretakentomeasure “accuracy” based on thestudyof Doll and

Torkzadeh (1988); Michel et al.(2008); Goi (2005); Cao (2005) Measurement scale of

the accuracy was below:

Table 3.6: Measurementof accuracy

At your using process, it’s rarely to happen problem and ACC1

mistake of transmission

Your transactions are handled accurately ACC2

Your personnal informations and transaction ACC3

informations are showed particularly and accurately

Thisscale measures the accuracy in processing information of informationtechnology system which controls activities of internet banking services

3.2.2 Measurement of overall internet banking service quality:

The measure “Overall internet banking service quality”werebasedonthestudyof

Jun and Cai (2001);Michel et al.(2008); Yang et al.(2004)

Table 3.7: Measurementof overall internet banking service quality

Quality of internet banking services IBQ 1

is very high

Nowaday, the services of internet IBQ 2

banking satisfy your needs

The bank’s online supports help you IBQ 3

avoid risks when the transaction problem

happen to internet banking system

3.2.3 Measurementof customersatisfaction

The measure “customersatisfaction with internet banking”werebasedonthestudyof

Michel et al.(2008), Yang et al.(2004)

Table 3.8: Measurementof customersatisfaction

You are satisfied with internet banking services SAT1

which you using

You prefer to use internet banking services to use SAT2

direct transactions at the bank

You are going to use internet banking services in SAT3

the future

3.3 Questionaire design

Overall satisfaction with the internet banking service quality was measured byasking respondents to rate their satisfaction with internet banking service quality Thequestionaire using a Likert scale: Strongly disagree (1), Disagree (2),Neutral (3), Agree(4) and Strongly agree (5)

The questionnaires in survey was developed based on the research of othersreputation author to give a scientific basis for the study The questionnaire contained twosections Section one contained personal data of respondents – gender, age, education,income and marital status with 5 items Section two contained mainly 20 items formeasuring six dimensions ofonline information system quality; 3 items for measuringoverall internet banking service quality and 3 items for measuringcustomer satisfaction

The questionnaire was designed based on independent back-translation method Anindependent back-translation means that “an original translation would render items fromthe original version of the instrument to a second language, and a second translator—onenot familiar with the instrument—would translate the instrument back into the originallanguage” (Geisinger, 1994, p 306) The original language of this questionnaire isEnglish and this research is done in Viet Nam, so two language of independent back-translation method are English and Vietnamese The author needs one person who isgood at English and Vietnamese and well known about financial and banking sector First

at all, the author translates the English original questionnaire into Vietnamese Then theother person translates the Vietnamese version which done by the author into English If

which done by the other person is same as, the questionnaire is accepted And it is draftquestionnaire.

3.4 Pilot study

The main purpose of pilot study is to test the questionnaire on a small sample ofrespondents by trying to identify and excluding potential problems (Malhotra, 2004).According to Malhotra (2004), the sample size of pilot study is small, which is around 15

to 30 respondents

A pilot study was carried out before sending out the questionnaires The pilot test ofthis research involved distribution of questionnaire to 15 customers who are internetbanking users, randomly chosen from a bank in HCM city, but four returnedquestionnaires were excluded due to incomplete data

The purpose of this pilot test was to check the wording of the questionnaire as well

as exam whether there were some unclear questions that cause misunderstanding.Fortunately, the survey questions was found to easily understand Almost no changeabout the wording and no questions were eliminated so we got the final questionnaire.(see Appendix 1)

3.5 Main survey

3.5.1 Data collection method

Statistical data can be categorized as two parts: primary data and secondary data.The source of primary data is directly from the investigation or questionnaire, which isgathered by the person for his/her own purpose Instead, the data collected by some otherpeople or some agencies calls secondary data It means that “data collected by one is used

by another” The most significant difference is that primary data is original whilesecondary data is not (Giri, 2008, 83) Obviously, primary data collection was suitablefor this study

To collect data for this research, we use two methods: directly interview peopleusing Internet banking services at banks and use “google drive” online

3.5.2 Sampling method

The thesis used the convenience sampling method which is a non-probabilitysampling technique where subjects are selected because of their convenient accessibilityand proximity to the researcher In all forms of research, it would be ideal to test theentire population, but in most cases, the population is just too large that it is

impossible to include every individual This is the reason why most researchers rely onsampling techniques like convenience sampling, the most common of all samplingtechniques Many researchers prefer this sampling technique because it is fast,inexpensive, easy and the subjects are readily available.

When using convenience sampling, it is necessary to describe how your samplewould differ from an ideal sample that was randomly selected It is also necessary todescribe the individuals who might be left out during the selection process or theindividuals who are overrepresented in the sample

So the first objective of the sampling for this thesis is the respondent who have touse internet banking services Interviewees are internet banking users in the banks inHCMC, if the answer of question 5 “Do you usually use Internet banking service?” was

“strongly disagree”, the interview would be canceled and that questionnaire not berecorded

3.5.3 Sample size

AccordingtoHair(2006),inothertoensurethereliability oftheresearch,thesamplesizerequiredisn>=100andn>=5k(wherek=numberofvariables) In

thisresearch,thenumberof variablesis 26,so theminimumsamplesizeis130

Ontheotherhand,TabachnickandFidell(2001)alsorecommendedthatthe

samplesizeneeded forrunningmultipleregression isn>50+8m(misequalto thenumberof independentvariables).So, the minimumsamplesizeforthis researchis98

Basedontheabovecalculation,the research was conducted among 250 internet

thesamplesizesetforthisresearchwas207.To getthesamplesizeof 207,thetotalofquestionnaireswhichsendtocustomerswas 250forwhohas used internet bankingservices.Afterreceiving

thecustomerreplies,therewere207formswhichwerefilledproperly

Table 3.9: The sample size Customer uses internetNumber of sample Number of samples Percentage banking services which was sent which was received

3.6 Data analysis techniques

All accepted questionnaire were reviewed for completion, coded and input the rawdata in IBM SPSS Statistic version 16 The reliability and validity of measurement scaleswere evaluated by using Cronbach’s alpha and exploratory factor analysis (EFA) Then,multiple regression analysis is used to provide for interpreting the results of its

application from a managerial and statistical viewpoint (Hair et al., 2010) The list of

codified variables is shown in Appendix 2

3.6.1 Testing of reliability

Cronbach's alpha is an index of reliability associated with the variation accountedfor by the true score of the "underlying construct." Construct is the hypothetical variablethat is being measured (Hatcher, 1994).Alpha coefficient ranges in value from 0 to 1 andmay be used to describe the reliability of factors extracted from dichotomous (that is,questions with two possible answers) and/or multi-point formatted questionnaires orscales (i.e., rating scale: 1 = poor, 5 = excellent) Generally, the researches consider analpha of 0.7 as a minimum, although lower coefficient may be acceptable depending onthe research objectives (Hair et al, 2006) George and Malley (2003) provide thefollowing techniques show in table 3.10

Table 3.10: Cronbach’s alpha reliability coefficient

3.6.2 Exploratory factor analysis (EFA)

Exploratory factor analysis (EFA) is a statistical method used to uncover theunderlying structure of a relatively large set of variables EFA is a technique within factoranalysis whose overarching goal is to identify the underlying relationships betweenmeasured variables

Hair et al (1998), Lee and Hooley (2005) claimed that with samples of 300 or

more, a factor loading of the attribute higher than 0.3 is significant And with samples of

200, a factor loading of 0.4 or greater will take to indicate Therefore, the researchersmust carefully consider the sample size for choosing significant factor loadings.Moreover, factors with a total eigenvalue of 1 or greater will take into account; hence anyfactors with an eigenvalue of less than 1 are discounted (Lee and Hooley, 2005) Based

on these studies, any factors with eigenvalues greater than 1 would be retained And anyfactor loadings of 0.3 or higher on a factor are counted

3.6.3 Multiple regression analysis

Hair et al.(2010) claimed that there is the difference between the actual and

predicted values of dependent variable That means the random error will occur whenpredicting sample data It is called the residual (ε or e)

Based on these studies, the multiple regression formula will

be Y = a + β1X1 + β2X2 + … + βnXn + ε

Where in: Y: is the dependent variable

a: is constant