Factors affecting the adoption behavior of mobile banking service an empirical research in shinhan bank vietnam tran duy hung branch

Cohort 2016 - 2018 Factors affecting the adoption behavior of Mobile banking service: An empirical research in Shinhan Bank Vietnam – Tran Duy Hung Branch.. Data analysis methods: ...34

Cohort 2016 - 2018

Factors affecting the adoption behavior of Mobile banking service: An empirical research in Shinhan Bank Vietnam –

Tran Duy Hung Branch

Author: Vuong Thi Hong Hanh

Advisor: Ph.D Dao Tung

May 2018

Table of Contents

Chapter 1: Introduction 5

1 The necessity of the research 5

2 Research purposes 6

3 Research objects and scopes 6

3.1 Research objects: 6

3.2 Research scope: 6

4 Research methodology 8

5 Research structure: 8

Chapter 2: Literature review and current situation of M-banking adoption in Vietnam commercial banks and Shinhan Bank Vietnam – Tran Duy Hung branch 10

1 Literature review on M-banking adoption: 10

1.1 Literature review: 10

1.1.1 Research history on factors affecting technology adoption behavior 10

1.1.2 Models on impact factors affecting technology adoption behavior 13

1.1.3 The applied model: Extended TAM 14

1.2 Description of studied variables 18

1.2.1 M-banking and Intention to use M-banking 18

1.2.2 Perceived usefulness: 19

1.2.3 Perceived ease of use: 20

1.2.4 Trust: 20

1.2.5 Perceived risk: 20

2 Overview on current situation of M-banking adoption in Vietnam commercial banks and Shinhan Bank Vietnam – Tran Duy Hung branch 21

2.1 Overview on current situation of M-banking adoption in Vietnam commercial banks 21

2.2 Overview on current situation of M-banking adoption in Shinhan Bank Vietnam – Tran Duy Hung branch 23

2.2.1 Shinhan Bank Vietnam – Tran Duy Hung branch 23

2.2.2 M-banking adoption in Shinhan Bank Vietnam – Tran Duy Hung branch 26

Chapter 3: Research model, hypotheses and research methods 30

1 Research model and hypotheses: 30

1.1 Research model: 30

1.2 Hypotheses: 30

1.2.1 Hypothesis 1: 30

1.2.2 Hypothesis 2: 31

1.2.3 Hypothesis 3: 31

1.2.4 Hypothesis 4: 31

2 Research methods: 32

2.1 Measurement scale of the variables: 32

2.2 Data collection: 33

2.3 Data processing: 34

2.4 Data analysis methods: 34

Chapter 4: Data analysis on factors affecting M-banking adoption behavior in Shinhan Bank Vietnam - Tran Duy Hung branch 37

1 Characteristics of the sample: 37

1.1 Gender 37

1.2 Age 37

1.3 Job status 38

1.4 Income 39

1.5 Level of education 40

1.6 Experience with M-banking 40

1.7 Frequently used banking services 41

2 The validation of the measurement scale: 42

3 Statistic description: 43

3.1 Description of “perceived usefulness” items and variable: 43

3.2 Description of “perceived ease of use” items and variable: 44

3.3 Description of “trust” items and variable: 45

3.4 Description of “perceived risk” items and variable: 46

3.5 Description of “intention to use” items and variable: 48

4 Testing the hypotheses: 48

4.1 Coefficient correlation matrix among variables: 48

4.2 Multiple linear regression model 50

4.3 The reliability and fit of the model 51

4.4 Hypothesis analysis: 53

Chapter 5: Conclusion and recommendations 55

1 Recommendations on improving M-banking adoption behavior in Shinhan Bank Vietnam – Tran Duy Hung branch 55

1.1 Recommendations relating to Trust 55

1.2 Recommendations relating to Perceived usefulness 56

1.3 Recommendations relating to Perceived risk 57

1.4 Other recommendations: 58

2 Limitations of the research and the development for future research: 59

Table of figures 61

REFERENCE 62

APPENDIX 64

Abstract: This study concentrates on analyzing the impact of some factors on the mobile banking (M-banking) adoption behavior: perceived usefulness, perceived ease of use, trust and perceived risk By applying the theoretical model which is TAM and the data analysis method which is multiple regression model, the results indicate that except for perceived ease of use, the other factors have significant influence on the intention to use M-banking service Based on the results, the recommendations are offered to improve the adoption rate of M-banking service

intention to use M-banking, M-banking adoption behavior, TAM

Chapter 1: Introduction

1 The necessity of the research

In the context of technological boom, the Internet, which is extremely popular and largely affects everyday activity in every aspect, has become a vital part of human life Today technologies have reached such a high level of development that any country, organization or individual wants

to utilize them in their daily jobs Experts in business presume that electronic marketing enables them to get quicker access to their customers than ever Moreover, it helps to reduce costs and to overcome the time and location limitations Now businessmen can introduce and sell their products and services with just a cell phone or tablet connected to the Internet or 3G/4G One of the most modern activities using electronic technology is providing banking services via Internet banking and M-banking, which are still in their infancy and have a great deal of room for improvement Due to the similarity of Internet banking and M-banking in service functions, especially in the context of smartphone popularity, this research will focus on the latter only

Nowadays, most of the Vietnamese own one or more mobile phones The telecommunication network is everywhere If each mobile phone can be made into a mini transaction office of banks,

it can be said to be a revolution to the economy because of its convenience and speed M-banking brings a supreme quality to customers owing to its high speed and security in making transactions Catching the market trend and the importance of M-banking application, banks need to understand customers’ expectations as well as the factors influencing their adoption behavior of M-banking

This research will engage in identifying those factors, especially focusing on perceived risk, perceived usefulness, perceived ease of use and trust Afterwards is the analysis on how each factor

affects the adoption of M-banking The traditional Technology Acceptance Model (TAM) will be modified within the M-banking context and two factors “perceived risk” and “trust” are added to the expanded TAM

M-banking is becoming a more and more effective channel for bank development In order to improve the M-banking utilization in banks, it is crucial to understand which factors affect the M-banking acceptance of customers, which is the main purpose of this research

 H1: perceived usefulness has positive effect on adoption behavior of M-banking

 H2: perceived ease of use has positive effect on adoption behavior of M-banking

 H3: trust has positive effect on adoption behavior of M-banking

 H4: perceived risk has negative effect on adoption behavior of M-banking

Finally, we will analyze the results and giving suggestions on M-banking utilization in the branch: how to develop and make use of it to create more values to customers and the bank

3 Research objects and scopes

Shinhan Bank Vietnam – Tran Duy Hung branch’s customers who are Vietnamese are aimed

to be questionnaire answerers Firstly, the majority of Vietnamese customers in Shinhan Bank Vietnam are those who more or less have relationship with Korea They may be employees of Korean companies which have Shinhan’s company accounts They may have spouses who are

Korean Maybe they used to study in Korea or are going to study in Korea They are doing or going

to do business with Korean companies The minority are those who have no relationship with Korea but they have known Shinhan bank by opening Shinhan bank’s credit cards or making loans in Shinhan bank The former group of customers normally make more various types of transactions than the latter one who mostly use deposit transactions to pay for card statements and loan due payments once a month In fact, the former are more likely to use M-banking than the latter because they usually make more types of transactions other than depositing money However, there are still exceptions when some customers in the former group do not use M-banking and some customers

in the latter one use M-banking In this research, there is no distinction between these two groups The research examines the factors affecting M-banking intention to use of customers who either have had experience with M-banking or not Of 201 customers surveyed, 65.7% have had experience with M-banking while 34.3% have not We hope to somehow explain why the rate stops

at 65.7% by figuring out the factors affecting M-banking adoption in this research Hopefully we can also work out solutions for improving this users’ rate

Secondly, there are some characteristics of the customer sample 201 customers were surveyed

in which 75.1% were female and 24.9% were male; 88.6% were equal or less than 35 years old; 95% were having a job; 90% were earning equal or less than 20 million dong per month and 95.5% were holding college or university degrees It can be said that the respondents of the surveys are mostly young people, who are the most sensitive generation towards technology They are also well educated and well aware of what the survey is about Their responses to the questions on the survey therefore are used to apply to the research model In the following parts, we are going to see whether these demographic characteristics affect the intention to use M-banking or not Thirdly, the author also mentioned some frequently used banking services on the survey The result showed that cash deposit or withdrawal and money transfer were two most common types

of transactions that the customers usually used, accounting for 70.6% and 65.2% of customers respectively Information inquiry, card payment and top up (mobile phone’s advance payment) took the following ranks for frequently used services with proportions of 39.3%, 27.9% and 26.4% correspondingly Other services such as bill payment, online savings and online loans were hardly used The meaning of adding this question on frequently used banking services is that we can see

if a customer with a certain frequently used service is likely to use them on M-banking According

to the above mentioned statistics, only four out of eight services which have significant proportions

of frequent use are going to be examined: money transfer, information inquiry, card payment and top up Cash deposit/withdrawal is a specific service which can only be executed at the counters or ATMs, therefore it is excluded, together with bill payment, online savings and online loans

4 Research methodology

The survey comprises of 2 parts:

 Demographic information: Gender, Age, Job status, Income, Level of education, Experience with M-banking and Frequently used banking services

 Perceptions of each variable in TAM: This part includes 16 questions which are derived from the article by Payam Hanafizadeh, Mehdi Behboudi, Amir Abedini Koshksaray and Marziyeh Jalilvand Shirkhani Tabar (2014) This article was published by Elsevier in an interdisciplinary journal on the social impacts of new technologies named “Telematics and Informatics” The questions are translated into Vietnamese then reviewed by the professor before handing out to targeted subjects In order to measure the level of agreement, the author applies 5 point Likert scales from 1 (absolutely disagree) to 5 (absolutely agree) to each question

The 16 questions are items from which the 5 variables are formed: M-banking adoption behavior is the dependent variable while Trust, Perceived risk, Perceived usefulness and Perceived ease of use are the independent variables The multiple regression model is used in SPSS to test the theoretical hypotheses mentioned in the research purposes

Chapter 3: Research model, hypotheses and research methods

Chapter 4: Data analysis on factors affecting M-banking adoption behavior in Shinhan Bank Vietnam - Tran Duy Hung branch

Chapter 5: Conclusion and recommendation

SUMMARY: This chapter presented the reason to choose the topic, the research purposes,

objects, scope, methodology and projected results, as well as the research structure Based on this basic information, the following chapters are developed logically The next chapter is an overview

on M-banking service and its adoption situation in Vietnam commercial banks in general and in Shinhan Bank Vietnam – Tran Duy Hung branch in particular

Chapter 2: Literature review and current situation of M-banking adoption in Vietnam commercial banks and Shinhan Bank Vietnam – Tran Duy Hung branch

1 Literature review on M-banking adoption:

1.1 Literature review:

1.1.1 Research history on factors affecting technology adoption behavior

Many studies have been conducted in the area of technology adoption (including M-banking, internet banking and other internet-based technologies) since 1970 when information and communication technology (ICT) was expansively used together with the popularity of computers After these studies’ publication, researchers’ attention has been drawn to the adoption of modern technologies Some typical studies are going to be mentioned in chronological order as follows Laforet and Li (2005) studied the factors affecting Internet banking usage in China and figured out that most users of Internet banking in China were men Also, security, risk, computers, skills

to adapt to new technologies and culture were elements discouraging the Chinese to use M-banking Ndubisi and Sinti (2006) studied the effects of attitude (importance to banking need, complexity, trialability, compatibility and risk) and Internet banking features (hedonic orientation and utilitarian orientation) on Internet banking adoption Their findings showed that both attitude and Internet banking features could affect internet banking adoption in which attitude played a more significant role While complexity, trialability, compatibility and importance to banking needs had strong impact on adoption, risk had weak impact Utilitarian orientation also had stronger influence on adoption than hedonic one

Khalfan et al (2006) conducted a study to investigate the factors affecting Internet banking adoption in Oman The major barriers in Internet banking adoption in this country were security and data confidentiality Top management support was another obstacle The authors stated that the speed of launching e-banking services in this area’s banks was relatively slow It was still unattractive due to technology investment costs, customer insecurities and lack of market-readiness though they were persuaded that overhead costs decreased remarkably by online banking

Abdul Hamid et al (2007) carried out a study on internet banking which compared the situations between Malaysia and Thailand Despite the differences in basic services offered by commercial banks in both countries, the study’s conclusion stated that the adoption of internet banking was affected by lack of education for consumers about it

Poon (2008) stated in his study 10 factors that had significant effect on e-banking adoption: privacy, security, accessibility, convenience of usage, design, content, speed, feature availability, fees and charges, bank management and image On the one hand, privacy and security negatively impacted users’ satisfaction On the other hand, accessibility, convenience, design and content positively influenced users’ satisfaction The other factors were also critical to the success of e-banking Meanwhile, GPRS or 3G hardly played any role in the e-banking adoption

Hsbollah and Idris (2009) similarly did research on the relationship between perceived attributes of innovation (relative advantage, complexity, compatibility, observability, trialibility) and e-learning adoption The results showed that intention to use e-learning was well predicted by trialability and relative advantage Besides, the research investigated the relationship between demographical information (gender, age, academic specialization, number of years in the organization) and e-learning adoption It was concluded that academic specialization positively influenced the adoption decision while there was almost no relationship between the other demographical factors and the intention to use e-learning

Al-Somali et al (2009) researched on the acceptance of online banking in Saudi Arabia Their findings led to the internet connection quality Perceived usefulness and perceived ease of use of online banking acceptance were strongly affected by the customers’ awareness of online banking’s benefits, the social influence and the computer literacy Furthermore, education, trust and resistance

to change had an impact on the attitude towards the likelihood of online banking usage

Tong (2009) identified six determinants of e-recruitment adoption: perceived usefulness, perceived ease of use, perceived privacy risk, performance expectancy, perceived stress and application specific self-efficacy The first two determinants were significant in explaining the behavioral adoption of e-recruitment Perceived usefulness of e-recruitment technology was considered more important than perceived ease of use by employed jobseekers, who would quickly get acquainted to the e-recruitment operation over time

Anderson (2010) indicated in his study that unbanked customers in the developing markets would be provided a simple banking service by M-banking However, M-banking raised the issue about the privacy of communication network According to Meuter et al (2000), some users even chose to use M-banking to avoid direct communications with bank staff or other customers Riquelme and Rios (2010) tested the effect of factors on M-banking adoption of internet banking users in Singapore The results revealed that perceived ease of use and social norms

affected females more strongly than males Usefulness, social norms and social risk correspondingly influenced the adoption the most

Koenig-Lewis et al (2010) investigated the barriers of M-banking adoption of young users in England The findings showed that the important dependent variables having great impact on the independent variable were perceived usefulness, risk and compatibility Compatibility was also the factor not only positively affecting M-banking adoption but also influencing other dependent variables such as perceived ease of use, perceived usefulness and credibility Trust and credibility were detected to have effect on perceived risk reduction

According to Cruz et al (2010), most internet users in Brazil never used M-banking services because of the risk, cost, complexity and lack of knowledge about the benefits of the services Similarly, Laukkanen and Kiviniemi (2010) found some barriers inhibiting M-banking adoption: tradition, value, risk, use and image Except for tradition, the other barriers could be reduced by enough supply of banks’ guidance and information Wessels and Drennan (2010) also found out in their research that perceived risk, perceived usefulness, compatibility and cost significantly affected the acceptance of M-banking while attitude acted as a moderating variable

Sripalawat et al (2011) explored the effect of elements on M-banking acceptance for banks to offer customers more benefits and to compare key success factors in several countries The final result was that the negative factors influenced M-banking less than the positive ones

Zhou (2011) concluded in his research that trust was affected by fundamental guarantee and information inquiry and trust also triggered the intention to use M-banking through perceived use Hanafizadeh and Khedmatgozar (2012) attempted to solve the question: Would the negative effect of perceived risk on customers’ intention to use Internet banking be reduced by raising their awareness of the service’s advantages? In the research, the authors mentioned six dimensions of perceived risk which were time, financial, performance, social, security and privacy Apart from social risk, the others had largely negative effect on Internet banking adoption However, awareness acted as a factor decreasing all six dimensions of perceived risk

Nasri and Charfeddine (2012) did research on factors influencing internet banking adoption in Tunisia Technology acceptance model (TAM) and theory of planned behavior (TPB) were applied

in the research The independent variables included perceived usefulness, perceived ease of use, attitude, social norm, perceived behavior control, security and privacy, self-efficacy, governmental

support and technological support They all more or less affected the dependent variable which was internet banking adoption

Akturan and Tezcan (2012) combined risks of banking adoption with TAM to study the banking acceptance in the group of young users The results revealed that social risk, performance risk, perceived ease of use and perceived usefulness directly affected the attitude of users to M-banking, which in turn directly affected the intention to use M-banking

M-Many studies were carried out in the international level, however, there has not been any research to be done in Shinhan Bank Vietnam in particular In order to be as specific as possible, this research is focusing on the most popular four factors: perceived usefulness, perceived ease of use, trust and perceived risk

1.1.2 Models on impact factors affecting technology adoption behavior

The adoption of technology (i.e M-banking) can be described in several ways, either by a process approach or the relationships between M-banking adoption and factors affecting it There are a lot of models applied in research on factors affecting M-banking adoption behavior, in which UTAUT, IDT and TAM are three most popular models that are going to be briefly discussed as follows Unified theory of acceptance and use of technology (UTAUT) developed by Venkatesh et al (2003) is a model focusing on the motivations for user behavior, that is, perceived usefulness or relative advantage (Zhou, 2012b) Of 55 studies examined by Shaikh, A & Karjaluoto, H (2015)

in their research, 13% (equivalent to 7 studies) use UTAUT This model is considered as an extension of the TAM and consists of four factors: performance expectancy, effort expectancy, social influence and facilitating conditions The biggest minus point of UTAUT is that it does not take cultural factors into account

Innovation diffusion theory (IDT) developed by Rogers (1995) is also a widely used model According to this theory, the technology adoption rate is affected by five determinants: relative advantage, compatibility, complexity, observability and trialablity According to Bhattacherjee (2000), a behavioral process from awareness to acceptance is presented in IDT However, IDT does not explain the forming procedure of attitudes before hypothesis acceptance or rejection and how innovation attributes contribute to the process Nine out of 55 studies (16%) in Shaikh, A & Karjaluoto, H.’s research (2015) use IDT as their theoretical framework

Among the models applied to examine the influential factors of M-banking adoption, Technology Acceptance Model (TAM) is the most popular one It was originally introduced by Davis in 1989 This model explains the nature of belief-attitude-intention-behavior and their relationship with the adoption level of information technologies (Hanafizadeh et al., 2012) A variety of studies have taken advantage of TAM to analyze users’ behavior According to Shaikh, A., & Karjaluoto, H., of the 55 studies they referred in their research “Mobile banking adoption: A literature review” (Telematics and Informatics, 2015), 23 studies accounting for 42% used the TAM as their theoretical framework In the original TAM, perceived usefulness and perceived ease

of use are considered as two basic determinants of technology adoption (Bankole et al., 2011) However, all economic, demographic and external factors are excluded from the TAM, which makes it seem to have little use for explaining adopters’ attitude and behavioral intentions towards M-banking intention to use (Venkatesh and Davis, 2000) Therefore, among these above mentioned

23 studies, many studies use the extended TAM by including additional independent variables in the traditional TAM, such as perceived risk, perceived cost of use, compatibility with lifestyle and needs, trust, credibility, need for personal interaction (Hanafizadeh et al., 2014); relative advantage and personal innovativeness (Chitungo and Munongo, 2013); perceived security (Hsu et al., 2011) One more thing, Luarn and Lin (2005) concluded that the TAM excluded any trust-based variables

in relation with e-commerce and there were no barriers preventing a user from using M-banking if

he or she had decided to do so

1.1.3 The applied model: Extended TAM

The TAM was developed by Fred Davis and Richard Bagozzi (1989) It was an extension of theory of reasoned action (TRA) by Icek Ajren and Martin Fishbein (1967) This is the most popular model applied in research on users’ acceptance and usage of technology (Venkatesh, 2000) The model suggests two factors influencing the decision to use a new technology: perceived usefulness and perceived ease of use According to Fred Davis (1989), perceived usefulness is “the degree to which a person believes that using a particular system would enhance his or her job performance” Perceived ease of use is defined by Davis (1989) as “the degree to which a person believes that using a particular system would be free from effort”

Figure 1: The original TAM (Davis, 1989)

Together with Davis, Venkatesh used to join to study and expand the TAM The first updated version was the TAM 2 (Venkatesh and Davis, 2000) which was tested by longitudinal data from four different systems at four organizations Two of them were voluntary usage and the others were mandatory usage The authors identified the determinants of perceived usefulness (that were subjective norm, image, job relevance, output quality and result demonstrability) and perceived ease of use (that were experience and voluntariness) The result revealed that social influence processes (including subjective norm, voluntariness and image) and cognitive instrumental processes (job relevance, output quality, result demonstrability and perceived ease of use) strongly affected users’ acceptance

Figure 2: TAM 2 (Venkatesh and Davis, 2000)

The second updated version was the TAM 3 (Venkatesh and Bala, 2008) which suggested three theoretical extensions beyond TAM 2 Firstly, with increasing experience, perceived ease of use influences perceived usefulness more strongly Secondly, computer anxiety has weaker effect

on perceived ease of use as experience increases Thirdly, behavioral intention is affected less by perceived ease of use when experience is accumulated from time to time

Figure 3: TAM 3 (Venkatesh and Bala, 2008)

The TAM has consistently played an important role in technology-driven context (Bernadette

1996, Venkatesh and Davis 2000, Pavlou 2001, Gefen and Straub 2002) Therefore, undertaking it

in M-banking and internet banking is reasonable Because of the uncertainty nature of M-banking and internet banking environment, it is rational to think of risk and trust issues According to Wang

et al (2003), trust was successfully integrated to the acceptance of online banking Also, there were many studies introduced risk issues relating to technology acceptance However, since the similarity between M-banking and internet banking, we pay attention to the risk and trust affecting M-banking adoption only

Trust acts as a basic factor in forming users’ behavior in M-banking The importance of trust increases in the field for the high degree of uncertainty persisting in most electronic transactions (Benassi 1999, Fung and Lee 1999) Jarvenpaa et al (1999) implied in their research that trust had

a favorable impact on intention to use online services Perceived risk is also a major element which

is likely to affect customers’ behavior (Pavlou 2001) Because risk and trust are crucial constructs

in the presence of uncertainty, they are proposed to be added into the traditional TAM which theorizes that perceived usefulness and perceived ease of use are key factors influencing technology use In this research, the extended TAM therefore is applied to test the degree of impact

of perceived risk, trust, perceived usefulness and perceived ease of use on M-banking adoption behavior

Figure 4: The original TAM extended with trust and risk factors.

Perceive risk

Trust

Perceived ease of use

MB adoption behavior

Perceived usefulness

1.2 Description of studied variables

1.2.1 M-banking and Intention to use M-banking

Mobile banking (M-banking) is a type of electronic commerce applied in banking business activities It is a more specific and narrow term of Internet banking To some extent, it can be said that M-banking is Internet banking used on mobile phones M-banking has three characteristics: First of all, it is a combination between some traditional banking activities and information technology and electronic telecommunication Secondly, it provides customers with banking products and services such as information inquiry (including transaction history, account balance, loan outstanding amount, card statement, account statement…), money transfer (both domestic and oversea), top up for mobile phone account, bill payment, opening/closing savings account, applying for loans and credit cards, informing card and account accidents Thirdly, it is a banking service which is consumed by customers via electronic distribution channel (i.e the Internet and mobile phones) without coming to the banks’ counters (Vuong Thi Thanh Quy, 2010)

M-banking has its own superior advantages over the traditional banking Firstly, it helps banks reduce costs and paperwork which in turn makes it more convenient to make transactions Transaction costs via M-banking channel are relatively low because banks do not need to invest in human resources, location rental costs, printing costs, paper costs, document filing and saving costs, etc The only sunk cost is the lump sum payment for the system in the very beginning According

to a report on M-banking of KPMG in 2015, M-banking helps a bank save costs 43 times as much

as a branch does, 13 times as much as a call center does, 13 times as much as an ATM does and twice as much as the Internet banking does Customers are able to make transactions everywhere they want without coming to branches or transaction offices Transaction time is not limited within eight working hours but every moment even at midnight

Next, M-banking transactions are normally faster than traditional ones For every money transfer request, a customer has to spend about 5 minutes for filling the form and a teller needs another 5 minutes for booking the request on the core banking system The travelling and waiting time has not yet been counted If it was M-banking, this transaction would take no more than 2 minutes One more thing is that in case somebody wants to buy a valuable asset, they will not have to bring a lots of money in cash All they need is an Internet enabled mobile phone They can buy whatever they want and transfer money to the seller’s bank accounts at once They do not have to

go to the bank to withdraw money, which is very time-consuming and effort-consuming, it is not

mentioned the risks of robbery, money counting time and counterfeit money M-banking transaction is obviously more transparent than cash transaction

Last but not least, the related parties in a transaction can do anything without concerning how far they are from each other or how hard to find a nearby bank branch only by using M-banking It allows them to stay at home and purchase goods and services very quickly and still save time and travelling costs

However, M-banking is not a flawless product It can be exposed to some kinds of risks such

as activity risk, reputation risk and legal risk Activity risk is the risk arising due to the security weakness of the electronic system because banks are usually targeted by hackers, viruses, malwares… It can also incur from customers’ mistakes or imperfection in the electronic banking system’s design Reputation risk is a direct consequence of activity risk It is the status when a bank’s image is deteriorated by scandals in M-banking’s operation, which in turn leads to current customers leaving the bank and new customers not being attracted Legal risk is the risk relating to terms and conditions when using M-banking They have to be designed to comply with laws and regulations Especially in the banks that operate in more than one country and want to count on M-banking to expand the networks, they are exposed more to this risk because of the differences in law systems in different countries Some other types of risk such as strategy risk or country risk may also arise from M-banking operation

Intention to use M-banking or M-banking adoption behavior is simply understood to be the individual intention to use M-banking that directly affects actual usage, which may be making a new subscription or continuing a current subscription The engagement in this service is carried out consciously and deliberately It is the dependent variable that will be thoroughly examined to see how it is affected by other independent factors: perceived usefulness, perceived ease of use, trust and perceived risk

are innovative within online banking and the usefulness that consumers are perceived is closely related to the advantages that M-banking offers Therefore, this variable is considered relevant in this study

1.2.3 Perceived ease of use:

Perceived ease of use is defined by Davis et al (1989) as: “the degree to which a person believes that using a particular system would be free of effort within an organizational context” (p

985) The approximation to this factor is derived from measures to determine how a particular application allow you to do tasks easier and faster, as well as to increase work performance, productivity and efficiency Perceived ease of use, together with perceived usefulness, is often studied when it comes to technology research, especially to see how they affect technology acceptance level They are also two fundamental factors in the TAM which will be more clearly explained in the following parts

1.2.4 Trust:

Trust has a number of definitions According to Gefen, Karahanna and Straub (2003), trust is

“the expectation that other individuals or companies with whom one interacts will not take undue advantage of a dependence upon them” (p 308) Originally, trust consists of two components: the

behavioral component which is the desire or willingness to follow a specific behavior which measures the success rate of innovation acceptance (Liebana Cabanillas et al., 2014) and the

cognitive component which is “the belief that the other party’s word or promise is reliable and the party will fulfill its obligations in an exchange relationship” (Dwyer, Schurr and Oh, 1987; Schurr

and Ozanne, 1985)

1.2.5 Perceived risk:

Perceived risk was firstly approached by Bauer (1960) Bauer introduced the concept of perceived risk (PR) and defined PR as a combination of uncertainty plus seriousness of outcome involved He analyzed risks as a combination of the uncertainty due to lack of knowledge about the outcome of a certain transaction and the negative consequences possibly arising from online transactions In 1967, he conducted further research and concluded that the consequences of a behavior could not be properly seen beforehand, therefore there was always a risk associated with any behavior

“The uncertainty about what the innovation gives” is another concept raised by Gerrard and

Cunningham (1967) After that, this PR variable was applied to much consumer behavior research

and its multidimensional nature was identified such as the research on “Consumer patronage and risk perceptions in Internet shopping” by S.M Forsythe and B Shi on the Journal of Business Research 56 (2003) 867–875; “The Components of Perceived Risk” by J Jacoby and L.B Kaplan

in the 3rd Annual Conference of the Association for Consumer Research, 1972, pp 382–393;

“Components of perceived risk in product purchase: a cross-validation” by L.B Kaplan, G.J Szybillo and J Jacoby on the Journal of Applied Psychology 59 (3) (1974) 287–291; “Risk-focused e-commerce adoption model: a cross-country study” by J Park, D Lee and J Ahn on the Journal

of Global Information Technology Management 7 (2) (2004) 6–30; etc

2 Overview on current situation of M-banking adoption in Vietnam commercial banks and Shinhan Bank Vietnam – Tran Duy Hung branch

2.1 Overview on current situation of M-banking adoption in Vietnam commercial banks

In the world, an individual spends two hours per day on his/her smartphone on average and 26% of M-banking users log in M-banking appliance four times or more per week (Carlisle & Grallagher Consulting Group) 82% of worldwide retail banks agree that in five year time, mobile devices will become the main channel for young people, who are potential customers of any bank,

to make transactions (The Economist, 2014) In reality, the number of customers using M-banking

is much more than Internet banking and over the counters in the US, Canada, Australia… According to Juniper Research, this number will increase twice, from 800 million users in 2014 to 1.75 billion users in 2019, because it is too easy to have a smartphone with full functions at low cost, which makes the number of smartphone users exponentially grows year by year In addition, the electronic commerce is more and more popular and convenient

In Vietnam, the race for electronic transaction channel development started in 2010 By the end of 2014, there had been 32 banks that adopted M-banking (while 45 banks adopted Internet banking) according to an e-commerce report of Vietnam in 2014 The statistics from Smartlink (a popular network joined by many banks to create a faster and more convenient way to make interbank transactions) showed that 3 million were using M-banking and the average growth rate was 20-30% per year It is due to the rise of smartphones and tablets in recent years, as well as the readily available wireless Internet (3G and 4G) from telecommunication companies IDC Vietnam (a market research company belonging to IDC Group) published in their research findings that in

2015, there were 1.43 billion smartphones that were supplied to the market, which increased by

10.1% compared to 2014) In ASEAN, Vietnam is one of three fastest growing smartphone markets

with 40% of subscribers using smartphones in 2015 It is forecasted that in 2018 this rate will be

70% The hot growth in smartphones has created a fertile and potential land for banks to develop

M-banking

Nielsen had carried out a survey on M-banking usage behavior of the Vietnamese and the

result showed that bank accounts’ information inquiry, money transfer, bill payment and movie

ticket/flight ticket/hotel room booking were the most popular transactions made with M-banking

in Vietnam 42% of the respondents said that they had used M-banking to check their account

balances or inquire their recent transaction history for the last 6 months 35% said that they had

used M-banking to book movie tickets/flight tickets/hotel rooms 33% had used M-banking to pay

their monthly utility bills and 31% had used M-banking to transfer money According to a report

on e-commerce of Ministry of Industry and Trade in 2015, 97% of Vietnamese enterprises accepted

payment by bank transfer It can be seen that using M-banking to transfer money will become a

vital part in doing business, especially to the busy entrepreneurs who have little time to visit bank

branches and wait long lines just for making payments to their partners

As claimed by Vnexpress on its survey in 2014, if the numbers of M-banking users in all banks

in Vietnam were classified into groups: above 50,000 users, from 20,000 to 50,000 users, from

5,000 to 20,000 users and under 5,000 users, we had: 52% of banks had more than 20,000

M-banking users in which 38% of banks (accounting for the largest portion in the pie chart) had more

than 50,000 M-banking users It meant that banks were extremely active in promoting this service

Figure 5: M-banking user proportions in Vietnamese banks (unit: %)

(Source: Vnexpress, updated until 30/06/2014)

2.2 Overview on current situation of M-banking adoption in Shinhan Bank Vietnam – Tran Duy Hung branch

2.2.1 Shinhan Bank Vietnam – Tran Duy Hung branch

Shinhan Bank is the first and largest bank in Korea, ranking at the 51th of all banks in the world It belongs to Shinhan Financial Group, the biggest banking service brand in Korea, listed

on Korea Exchange and New York Stock Exchange The market scale of this Group is around USD 18.2 billion, ranking at no.9 position in Korea The Bank is currently widely expanded to 14 countries apart from Korea: the U.S., the U.K., the Philippines, the UAE, China, Hong Kong, Singapore, Vietnam, India, Cambodia, Kazakhstan, Uzbekistan, Myanmar and Canada

Shinhan Bank Vietnam is one out of eight foreign banks with 100% foreign capital in Vietnam, belonging to Shinhan Bank Korea It penetrated Vietnam market in 1993 with the first representative office in Ho Chi Minh City In 1995, the first branch of Shinhan Bank was opened

in Ho Chi Minh City under the name Shinhan Vietnam Bank In 2006, Shinhan Vina Bank – a joint-venture bank was opened with 50% share capital of Shinhan Bank and 50% share capital of Vietcombank In 2011, Shinhan Vietnam Bank merged with Shinhan Vina Bank and changed its name to SHINHAN BANK VIETNAM Shinhan Bank Vietnam has expanded to 18 branches/transaction offices nationwide Especially, in 12/2017, Shinhan Bank Vietnam successfully acquired ANZ Vietnam’s Retail Sector (including 8 branches and transaction offices), which helped raise the number of branches/transaction offices to 26 in total Together with this expansion, the number of Shinhan Bank customers in Vietnam has been increasing constantly Until now, Shinhan Bank Vietnam is the number one foreign bank in Vietnam in term of networks, followed by HSBC, Standard Chartered Bank, Hong Leong Bank, Woori Bank… In term of chartered capital, Shinhan Bank Vietnam has 4,547.1 billion dong and ranks the second only to HSBC with 7,528 billion dong (according to the website of State Bank of Vietnam, as of 30/6/2017) Among 26 branches and transaction offices nationwide, Tran Duy Hung branch belongs to top

2 largest branches in Northern area (There are 11 branches/transaction offices in the North) When first established in 2009 under the name “Hanoi branch”, it belonged to Shinhan Vietnam Bank In

2011 after the merge and acquisition with Shinhan Vina Bank, it was changed into “Tran Duy Hung branch” in order to distinguish from Hanoi branch in Lotte Center Tran Duy Hung branch has been located on the first floor of Charmvit Tower at 117 Tran Duy Hung, Trung Hoa ward, Cau Giay district, Hanoi since then

In 2016, Pham Hung transaction office began to operate on the first floor of Keangnam Landmark 72 on Pham Hung Street, Bac Tu Liem, Ha Noi This transaction office is under supervision and management of Tran Duy Hung branch By the end of 2017, after the merge and acquisition with ANZ Retail Sector, Trung Hoa transaction office of ANZ has become another Shinhan transaction office which is also under supervision and management of Tran Duy Hung branch Tran Duy Hung branch has around 45 employees and operates in Deposit, Remittance, Card, Corporate Loan, Retail Loan and Trade, each has its own department There are also General Affair and Human Resource department and Internal Audit department The branch’s general manager is an expat from the mother bank in Korea He is also the head of the community No.2 including Tran Duy Hung branch, Pham Hung transaction office, Trung Hoa transaction office, Bac Ninh branch, Vinh Phuc branch and Thai Nguyen branch There are two deputy general managers in the board of management, one is Vietnamese and the other is Korean

Figure 6: Organizational chart of Shinhan Tran Duy Hung

(Source: Synthesized by the author)

Tran Duy Hung branch’s location is very convenient because many Korean companies and individuals work and stay in Charmvit Tower and in Grand Plaza Hotel nearby Within the five hundred meter radius, there are a residential area called Trung Hoa Nhan Chinh, where many Korean individuals live That is thereason why Shinhan Tran Duy Hung is a very popular branch with a huge number of customers visiting to make transactions every day The customer categories

of Tran Duy Hung branch include Korean customers who are living, working, travelling in Vietnam either in short or long term, Vietnamese customers who have relationship with Korea (e.g studying

in Korea, working for Korean companies, being spouses of Korean individuals, etc.) and other

TRAN DUY HUNG BRANCH

DEPOSIT CARD REMITTANCE TRADE CORPORATE LOAN RETAIL LOAN HR & GA INTERNAL AUDIT

PHAM HUNG T/O TRUNG HOA T/O

nationalities’ customers working for Korean companies The first and second groups of customers account for 95% of the total number of customers in Shinhan Tran Duy Hung

In term of Deposit, because of the low interest rates on saving accounts (5.5% per annum as

of 02/2018), individuals other than the Korean rarely send their money to Shinhan for savings In Tran Duy Hung branch, a huge amount of VND deposit comes from some large Korean companies such as Grand Plaza Hanoi Hotel, Sungshin Vina, Dae Myoung Vina, HNT Vina, Shinbo Vina, etc They usually open VND time deposit accounts to keep their idle funds Some of them even keep a lot of money in VND demand accounts for just 0.25% per annum, let alone their USD demand accounts which often receive much funds from overseas but earn 0% of interest Due to this abundant source of funds, Shinhan Tran Duy Hung in particular and Shinhan Bank Vietnam in general are advantageous over other local banks to offer lower loan interest rates This competitive advantage is vital to the bank’s profit since most of the profit comes from the difference in interest rates of loans and deposits

Remittance is another source of income for the bank Tran Duy Hung branch has an advantage over other branches in the fact that it is located in the same building with the Korean consulate Every day, there are so many young people that come to the consulate on the 7th floor to apply for visa to study or work in Korea Then they come down to Shinhan Tran Duy Hung on the 1st floor

to transfer money to Korea Therefore, apart from domestic remittance fees, Tran Duy Hung branch has another source of income from oversea remittance fees, which are usually higher than the domestic ones

Card is a department which hardly earns profit to the branch because on the 8th floor of the same building is Shinhan Hanoi card center with hundreds of credit card sale agents In Tran Duy Hung branch, the function of card department mainly is to respond to customers’ card information inquiry and to solve card accidents Corporate loan and Trade’s existence is to serve some Korean companies which are having outstanding loans or potential to borrow money from the bank in the future In the past, wholesales to local companies was decentralized to each branch However, in 2015-2016, when the strategy of Shinhan Bank Vietnam was changed into retail banking, all local corporate customers as well as banks’ employees who were working in that field were centralized

to the head office’s management

Retail loan department is now the department with the most employees in the branch As stated above, the competitive advantage in loan interest rates is the stepping stone for Shinhan to develop

retail banking In 2017, Shinhan Bank Vietnam reached the targets to double the outstanding car loan balance and the number of credit cards compared to 2016, as well as to increase net 200 million USD of credit and mortgage loan balances, in 10 months Contributing to this achievement, Tran Duy Hung branch had disbursed approximately gross 30 million USD, which was 150% of the branch’s KPI target It not only brought the bank a lot of interest profit, but also helped expand the bank’s brand name and image in Vietnam market Unlike the customers of Deposit department, the Retail loan department’s customers are mostly Vietnamese, who may or may not have any relationship with Korea Only 10% of them are Korean who want to live in Vietnam for a long time

so they borrow money to buy houses

Tran Duy Hung branch is developing faster and faster It is potential that the number of customers will exponentially increase year by year, which requires the branch to focus on improving Internet Banking and Mobile Banking to meet customers’ demand Because time is valuable, customers will be less willing to spend their time waiting long in the counters to make transactions Internet Banking/Mobile Banking is the inevitable trend in banking industry

2.2.2 M-banking adoption in Shinhan Bank Vietnam – Tran Duy Hung branch

Internet Banking is a service provided by Shinhan Bank Vietnam from the bank’s establishment date It was integrated in account opening service, which was transferred from Shinhan Bank Korea Users can get access to this service via internet-connected devices such as desktops, laptops, tablets or smartphones by visiting the official website www.shinhan.com.vn In

2015, the M-banking application was first launched in IOS and Android, which marked a new chapter of digital banking development of Shinhan Vietnam

Shinhan’s M-banking offer two packages which operate 24/7: Information inquiry only OR Information inquiry and Money transfer Both packages are free of charge for registration and maintenance, which means if customers register and do not use or use the information inquiry function only, they will not have to pay any fee This is a way to promote the service If they register and use the money transfer function, the transfer fee is half way lower than the standard fee at the counters The M-banking service is offered to both individual and corporate customers with similar functions The only difference lies in the money transfer limit Individuals’ standard limit is 100 million dong per day per transaction and can be raised up to 500 million dong per day per transaction if they upgrade the security device from security card to one time password device

(OTP) The fee paid for an OTP is 220,000 VND including value added tax (VAT) but this OTP can be used in 2 years on average and needless to say, it is more secure than the security card (which is simply a matrix of random numbers and free of charge) In addition, if the customers are

of premier class, the limit can be up to 1 billion dong per day per transaction with approval from the branch’s manager under customers’ request On the other hand, companies’ standard limit is 5 billion dong per day per transaction Therefore, they are required to use OTP instead of security card for the safety reason Similar to individuals, if requested, the companies’ transfer limit can be raised up to maximum 10 billion dong per day per transaction with the branch manager’s approval, considering the companies’ size, cash flow via Shinhan accounts and management quality In 2017, apart from security card and OTP, the digital banking department launched another type of security device for M-banking called M-OTP With the old ones, customers always have to bring along when making online transaction But with M-OTP, the security passwords are encrypted in the application and will be randomly generated only when the users correctly enter their own 6-digit passwords set one time when registering the service This kind of M-OTP enables users to make transactions anytime, anywhere, even when they forget to bring the security card or OTP The lump sum fee is reasonable at 55,000 VND including VAT It helps to diversify the M-banking service and improve customers’ experience with the digital banking

On surveying a sample of 200 customers in Tran Duy Hung branch, only 65.7% of them has

experienced M-banking service of Shinhan Bank Vietnam (Chart 3) Although the fees are

reasonable and the security layers are complicated (There are three different kinds of passwords to enter in order to transfer money out of accounts: login passwords – at least 8 characters including uppercases, lowercases and numbers; account passwords – 4 pre-set numbers; security passwords – 4 to 6 random numbers, let alone pre-set three security questions popped up when customers change their frequently used smartphones, which leads to changing IP addresses), not every customer is willing to use M-banking Every 6 months, the branch’s assessment is made on every aspect of operations M-banking newly registered users and M-banking newly active users are two numbers collected to calculate KPI According to the internal report, in 2017, the number of M-banking newly registered users in Tran Duy Hung accounts for around 78% of total new customers,

in which only 51.7% are active users (who log in at least once to change passwords and make at least one transaction) Tellers at the counters often receive many questions on how to change passwords, how to use the security devices, how to transfer money, etc Is that the reason why

customers are reluctant to use M-banking? We will see in the following chapters when perceived ease of use is considered as one of the factors affecting M-banking adoption behavior of customers, together with perceived usefulness, perceived risk and trust Only when understanding the factors driving customers’ behavior towards M-banking, Tran Duy Hung branch will find ways to improve its performance

Figure 7: Experience with M-banking service of customers in Tran Duy Hung branch

(Source: Collected and synthesized by the author)

SUMMARY: This chapter presented an overview about M-banking service in which its

superior characteristics over traditional banking service were mentioned, together with its undeniable limitations All concepts were also defined Then the research history of factors affecting technology acceptance behavior in general and e-banking (internet banking and mobile banking) in particular has been systemized chronologically From the literature review, the author summed up and discussed three most popularly used models which were UTAUT, IDT and TAM The TAM was then chosen to apply in this research Its development history was then thoroughly examined to propose an extended model including one dependent variable (Intention to use M-banking) and four independent variables (Perceived usefulness, Perceived ease of use, Perceived risk and Trust) After that, the situation of M-banking adoption in Vietnam commercial banks was reviewed to conclude that Vietnam banks were very active in promoting M-banking, no less than any other developed countries Lastly, the adoption behavior towards M-banking of customers in

66%

34%

Experience with MB service

Yes No

Shinhan Tran Duy Hung branch was examined after the author gave a brief introduction about the history of Shinhan Vietnam and the establishment, organizational structure, scale and position of Tran Duy Hung branch in the whole system Although the registration procedure is quick and free,

as well as many other favorable conditions are offered in M-banking service, only approximately two thirds of total customers in the branch confirmed that they had experienced M-banking The following chapter is going to propose hypotheses and a theoretical model to test the effect of some factors which are presumed to influence the M-banking adoption behavior of customers in Shinhan Tran Duy Hung

Chapter 3: Research model, hypotheses and research methods

1 Research model and hypotheses:

by Yi Shun Wang, Yu Min Wang, Hsin Hui Lin, Tzung I Tang, Praja Podder and Kent Ericksson, Katri Kerem, Daniel Nilsson and Le Thi Kim Tuyet also showed the similar result The usefulness

is closely related to the relative advantages that it offers to customers, which means that the more and more advantages there are in M-banking, the more and more increasing the banking job performance is In turn, when customers feel that they benefit more in job performance from using M-banking, the intention to use it will rise afterwards The study by Pham and Ho (2015) supported this logic However, to test whether it stays true in the context of Shinhan Bank Vietnam – Tran

Duy Hung branch, this study proposes the hypothesis:

Perceive risk

Trust Perceived ease of use

MB adoption behavior

Perceived usefulness

H1: The perceived usefulness has a positive effect on the intention to use M-banking banking adoption behavior)

H2: The perceived ease of use has a positive effect on the intention to use M-banking banking adoption behavior)

(M-1.2.3 Hypothesis 3:

According to Lin, 2011; Kim et al., 2009; Lee and Chung, 2009, one of the reasons why people

do not use M-banking is a lack of trust In the existing risk of online transactions, trust is the important construct (Reichheld and Schefter, 2000) Harris, Brookshire & Chin, 2016; Slade et al., 2015; Park & Tussyadiah, 2016; Pavlou, 2003 all proposed a relationship between trust and risk Pavlou (2002, 2003) and Bounagui and Nel (2009) identified a positive relationship between trust and ease of use Other researchers also showed a positive relationship between trust and attitude (Agag and El-Masry, 2016; Chauhan, 2015) However, there has been few studies that test the direct relationship between trust and intention to use M-banking, apart from P Hanafizadeh et al (2014) This study was conducted in the context of Iranian banks Therefore, the author wants to test the relationship again in a more specific context of a bank in Vietnam It is rational to think

that M-banking will be adopted more if the users increasingly trust it The proposed hypothesis is as follows H3: The trust has a positive effect on the intention to use M-banking (M-banking adoption behavior)

1.2.4 Hypothesis 4:

Featherman et al (2003) empirically tested the effects of seven dimensions of PR including psychological, privacy, social, financial, time, performance and overall risk in the context of Internet-enabled electronic service adoption Xin Luo et al (2010) extended Featherman et al.’s

model to the study of M-banking by adding a construct for possible health risk (for example, brain tumors) which related to long-term mobile phone usage

Numerous researchers have shown in their studies that perceived risk negatively affected

intention of adopting e-services (Crespo and Del Bosque, 2010; Herrero and San Martin, 2012; Liebana-Cabanillas et al., 2014; Slade et al., 2015; Liebana-Cabanillas, Munoz-Leiva and Sanchez-Fernandez, 2017) In this research, perceived risk is also regarded as an important

determinant of the intention to use M-banking In short, the following hypothesis is proposed

H4: The perceived risk has a negative effect on the intention to use M-banking (M-banking adoption behavior)

2 Research methods:

2.1 Measurement scale of the variables:

 Questionnaire design: The questionnaire in the research is designed in two parts Part 1 contains the demographic information of the surveyed: Gender, Age, Job status, Income, Level of education, Experience with M-banking and Frequently used banking services Part 2 is the main one about the perceptions of each variable in the model This part includes 16 questions

representing for 5 variables They are derived from the article by Payam Hanafizadeh et al (2014)

The questions are translated into Vietnamese then reviewed by the professor before handing out to targeted subjects

 Answer design: For those questions aiming at identifying the characteristics of the respondents (Part 1), the multiple choice questions are used in classification For those questions aiming at identifying the level of agreement on 16 items (Part 2), the 5-level Likert scale is used:

Absolutely disagree, Disagree, Undecided, Agree and Absolutely agree The Likert scale is

extremely popular and reliable in measuring opinions, perceptions and behaviors Compared to the simple “Yes/No” questions, Likert-type questions offer a wide range of options from one extreme point to the other, including a neutral point in the middle It will uncover the more specific degree

of opinion to understand more thoroughly the feedbacks and highlight the areas where to improve the product or service The two most widely used Likert scales are five-level and seven-level The seven-level scale divides the range of answers into more accurate nuance by offering more choices than the five-level scale However, it makes the survey more complicated and the respondents more confused In Vietnam, where people are not readily acquainted to Likert scale, this study suggests

using the five-level Likert scale for less frustration and confusion Marton-Williams (1986) confirmed in his research that a five-point scale is comprehensive enough for respondents to express their views

2.2 Data collection:

 Secondary data is collected in Shinhan Bank – Tran Duy Hung branch about the historical overview of Shinhan Bank Vietnam, its organizational structure and operational status Besides, the research also refers to some documents such as magazines, newspapers and websites to collect information on the overview of Internet Banking and Mobile Banking in Vietnam commercial banks in general

 Primary data is collected by direct survey on 201 customers who visited Shinhan Bank Vietnam – Tran Duy Hung branch to make transactions in two days (2018, Jan 4 and 5) Because M-banking is still a new service to many customers, direct survey seems to be more suitable than online survey when the surveyor can explain thoroughly to the respondents’ queries As a result, the collected data is more precise and reliable

 Sample selection: According to Hoang Trong and Chu Nguyen Mong Ngoc (2008), for the non-random samples, if the sampling process is performed according to a specific and reasonable principle, the selection of that sample can be considered random This is feasibly acceptable in the study The research subjects are individual customers in Tran Duy Hung branch Due to objective conditions, the full customer list cannot be collected Therefore, direct approach to clients for direct investigation with the questionnaire is made It is based on the easy accessibility of the customers and a certain rule to ensure randomness Tran Duy Hung branch’s location is a convenient place to reach so there are always many customers visiting here The larger the sample size is, the more the information is collected so it was decided to collect about 200 questionnaires basing on the time constraint that I can reach out to my customers I spent two days to collect surveys On average, I reached 100 customers per day Since it was two continuous days, it was unlikely to meet a same customer twice and the probability of duplication was low One more thing is that the average number of customers visiting the branch in a day is around 150 – 200 people and the waiting time

in the lounge is long enough for me to approach and take surveys I picked the customers to deliver the questionnaires without any discrimination and kept the principle of consistency throughout the entire survey process

 For 5 questions number 5 (PEOU2), 7 (PR1), 8 (PR2), 9 (PR3) and 10 (PR4), “absolutely

agree” is equal to 1 and “absolutely disagree” is equal to 5

 For the other 11 questions, the opposite order is applied due to the opposite meaning of the

questions: “absolutely disagree” is equal to 1 and “absolutely agree” is equal to 5

The encryption makes all items followed the same logic: As the points increase from 1 to 5,

“perceived risk”, “perceived usefulness”, “perceived ease of use”, “trust” and “intention to use” also increase

2.4 Data analysis methods:

The first method to analyze the data is statistic description After finishing data input in SPSS, descriptive statistics are made to each qualitative and quantitative variable For the qualitative variables (Gender, Age, Job status, Income, Level of education, Experience with M-banking and Frequently used banking services), frequency tables and suitable graphs are used to describe each

of them For the quantitative variables (Customers’ assessment on 16 items defining 5 variables: perceived risk, trust, perceived usefulness, perceived ease of use and intention to use M-banking),

16 items are grouped into 5 factors (Annex 1) The value of each factor is calculated by taking the athrimetic average of the defining items The descriptive statistics (mean and standard deviation)

of each item as well as of each factor then are calculated and analyzed

The second method is using Cronbach’s Alpha to validate the measurement scale Basing on the theoretical model (TAM with two added variables) and the tested questionnaire adapted from

P Hanafizadeh et al (2014), it is unnecessary to conduct the exploratory factor analysis (EFA) The items in the measurement scale have been classified to the suitable groups Therefore, we conduct the confidence test for this measurement scale by the internal consistency method (Cronbach’s Alpha and corrected item-total correlation) In theory, all items with corrected item-total correlation less than 0.3 will be eliminated However, in some cases, if the items have

meaningful content and the Cronbach’s Alpha of the corresponding variable is satisfying (greater than 0.6), it is not necessary to discard them

The third method is using multiple regression model to test the hypotheses Based on the theoretical background presented in chapter 2, the algebraic regression equation is built as follows:

AveI = β 0 + β 1 *AvePU + β 2 *AvePEOU + β 3 *AveT + β 4 *AvePR + ε

AvePR: Perceived risk

Before running the model, the correlation coefficient matrix will be achieved to see whether five variables are correlated to one another If yes, multicollinearity may exist and need further investigation Otherwise, there is no need to test multicollinearity The next step is running the multiple linear regression model in SPSS using stepwise method This method will in turn add one independent variable into the model at a time The final result will show us the model with the maximum number of meaningful variables and all insignificant variables will be automatically excluded Adjusted R2 will tell us how suitable the model is Assumption violations are tested by using ANOVA test, VIF test, Pearson test, Glejser test, Durbin-Watson test and other histograms and scatterplots If needed, solutions to fix the violations will be made If the final model is good and does not violate any assumption, based on the corresponding beta of each independent variable, the proposed hypotheses will be rejected or accepted

SUMMARY: Based on the theoretical background in the previous chapter, in this chapter, the

algebraic research model and four hypotheses about the relationships between the independent variables and the dependent variable were built After that, the research methods were presented: how the measurement scale was designed, how the data was collected and how it will be analyzed

in the following chapter The next chapter will describe the statistics of all qualitative variables and test the confidence of the measurement scale before describing the statistics of all items in the