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FACTORS AFFECTING MOBILE BANKING ADOPTION:
A CASE OF KCB BANK KENYA
BY
ALBERTINA SACHOMBE
UNITED STATES INTERNATIONAL UNIVERSITY
AFRICA
SPRING 2017
FACTORS AFFECTING MOBILE BANKING ADOPTION:
A CASE OF KENYA COMMERCIAL BANK
BY
ALBERTINA SACHOMBE
A Research Project Rep0rt Submitted to the Chandaria School of
Business in Partial Fulfillment of the Requirement for the Degree of
Masters in Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY
AFRICA
SPRING 2017
ii
STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any
other college, institution, or university other than the United States International
University in Nairobi for academic credit.
Signed: ________________________ Date: ______________________
Albertina Sachombe (ID No: 646290)
This project has been presented for examination with my approval as the appointed
supervisor.
Signed: ________________________ Date: ______________________
Mr. Kepha Oyaro
Signed: ________________________ Date: ______________________
Dean, Chandaria School of Business
iii
ACKNOWLEDGEMENT
First and foremost, I would to give thanks to the almighty for enabling me see through
this process. I would also like to thank my business research method supervisor Dr.
George Kaol and my final project supervisor Mr. Kepha Oyaro for their guidance and
advice that has motivated me to complete this project report.
My special thanks go to the marketing department KCB Sarit for their assistance in data
collection. I also would like to thank the entire USIU community for providing a good
environment and facilities to enable me to complete this project report.
iv
DEDICATION
I dedicate my project work to my lovely family and friends who have encouraged and
supported me throughout the process. I will always appreciate.
v
ABSTRACT
The general purpose of this study is to determine the factors affecting mobile banking
adoption and usage at Kenya commercial bank Kenya. The research was guided by the
following research questions:How does social cultural factors affect mobile banking
adoption and usage at KCB bank?How does economic factors affect mobile banking
adoption and usage at KCB bank?How does technological factors affect mobile banking
adoption and usage at KCB bank?
The study utilized a descriptive research design and a quantitative and qualitative research
technique was applied to obtain the required information. The target population for this
study was1040 account holders at the KCB Sarit Centre branch. From the initial target
population of using the sample size formulaat 95% confidence interval a sample size of
138 respondents was obtained. Primary data was collected by administering open and
close-ended questionnaire to the respondents. Microsoft excel and the descriptive
statistical tool, Statistical Package for Social Sciences (SPSS) was used to help the
researcher describe the data and acquire the results through descriptive analysis of means,
standard deviations, andInferential statistics through regression analysis the information
was displayed by use of tables where necessary.
For the analysis of the first objective it was established that most of the respondents
strongly agreed that they have the knowledge to use electronic banking services, ability to
use electronic banking service and they would embrace electronic banking services their
banking needs. For the analysis of the second objective it was established that most
respondents strongly agreed that they are able to access to funds any time they want, and
they considered M-banking a cost-effective way to provide banking services to the
unbanked. For the analysis of the third objective it was established the governments can
organize and create good plans to support the development of civilian technology
innovation and also do its part to improve the economic growth and development. Most
of the respondents affirmed that they would use the electronic banking services for
handling banking transactions.
For the analysis, it can be concluded that most of the account holders possess the
knowledge of how to use electronic banking services, and most of them are willing to
embrace electronic banking services for their banking needs. Among the services mostly
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preferred is payment of utility bills. The study also conclude that the uptake of the service
is dependent on the group influences. In regard to the second objective it can be
concluded that use of mobile banking has enabled customers to access to funds any time
they want, and they also consider it a cost-effective way to provide banking services to
the unbanked. It also enables the users to save on transaction cost.The study concludes
that governments has a role to play and most of the respondents affirmed that they would
use the electronic banking services for handling banking transactions although losses
from fraud must be borne by the bank.
The study recommended that firstly, banks should strive to educate the account holders on
the benefits that they would incur from taking up the services. The bank also need to offer
the best services to the current users in order for them to convince their peers, friends and
family members to take up the service. Secondly, customers need to be encouraged to use
of mobile banking as it is a cost-effective way to provide banking services to the
unbanked. The bank needs to ensure that the transaction costs are lower than over the
counter cost so as to convince more clients to take up the service. Lastly, the study
recommends that the governments needs to do its part to improve the economic growth
and development. On issues of security the bank needs to seek ways to minimize fraud,
system failures and guaranteeing the users that electronic banking services can handle
their banking transactions.The study recommends that for future studies, similar studies
be undertaken in other banks so as to be able to compare the findings and make
generalized conclusions. Also, there is a need to do a research to establish the impact that
mobile adoption has had on the profitability of financial institutions.
vii
TABLE OF CONTENT
STUDENT’S DECLARATION ................................................................................................... ii
ACKNOWLEDGEMENT ........................................................................................................... iii
DEDICATION.............................................................................................................................. iv
ABSTRACT ................................................................................................................................... v
LIST OF TABLES ........................................................................................................................ x
ACRONYMS AND ABBREVIATIONS .................................................................................... xi
CHAPTER ONE ........................................................................................................................... 1
1.0INTRODUCTION.................................................................................................................... 1
1.1 Background of the Study .......................................................................................................... 1
1.2 problem Statement .................................................................................................................... 3
1.3 Purpose of the Study ................................................................................................................. 5
1.4 Research Questions ................................................................................................................... 5
1.5 Significance of the Study .......................................................................................................... 5
1.6 Scope of the Study .................................................................................................................... 6
1.7 Definiti0n of Terms................................................................................................................... 6
1.8 Chapter Summary ..................................................................................................................... 6
CHAPTER TWO .......................................................................................................................... 7
2.0 LITERATURE REVIEW ...................................................................................................... 7
2.1 Introduction ............................................................................................................................... 7
2.2 Effects of Social Cultural Factors on Mobile Banking Adoption and Usage ........................... 7
2.3 Effects of Economic Factors on Mobile Banking Adoption and Usage ................................. 12
2.4 Effects of Technological Factors on Mobile Banking Adoption and Usage .......................... 17
2.5 Chapter Summary ................................................................................................................... 21
viii
CHAPTER THREE .................................................................................................................... 22
3.0 RESEARCH METHODOLOGY ........................................................................................ 22
3.1 Introduction ............................................................................................................................. 22
3.2 Research Design...................................................................................................................... 22
3.3 Population and Sampling Design ............................................................................................ 23
3.4 Data Collection Methods ........................................................................................................ 25
3.5 Research Procedures ............................................................................................................... 26
3.6 Data Analysis Methods ........................................................................................................... 26
3.7 Summary ................................................................................................................................. 26
CHAPTER FOUR ....................................................................................................................... 27
4.0 DATA ANALYSIS AND INTERPRETATION ................................................................. 27
4.1 Introduction ............................................................................................................................. 27
4.2 Demographic Information ....................................................................................................... 28
4.3 Social Cultural Factors Affect Mobile Banking ..................................................................... 30
4.4 Effect Economic Factors on Mobile Banking Adoption......................................................... 34
4.5 Effects of Technological Factors on Mobile Banking Adoption ............................................ 38
4.6 Chapter Summary ................................................................................................................... 42
CHAPTER FIVE ........................................................................................................................ 43
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION ........................................ 43
5.1 Introduction ............................................................................................................................. 43
5.2 Summaryof Findings ............................................................................................................... 43
5.3 Discussions ............................................................................................................................. 44
5.4 Conclusion .............................................................................................................................. 49
5.5 Recommendation .................................................................................................................... 49
ix
REFERENCES ............................................................................................................................ 51
APPENDIX I: INTRODUCTION LETTER ............................................................................ 66
APPENDIX II: QUESTIONNAIRE ......................................................................................... 67
x
LIST OF TABLES
Table 4.1: Response Rate ................................................................................................... 27
Table 4.2: Age Range ........................................................................................................ 28
Table 4.3: Gender............................................................................................................... 29
Table 4.4: Education .......................................................................................................... 29
Table 4.5: Duration as a Customer .................................................................................... 30
Table 4.6: Social Cultural Factors ..................................................................................... 31
Table 4.7: Model Summary on Social Cultural Factors .................................................... 31
Table 4.8: ANOVA on Social Cultural Factorsand Mobile Banking Adoption ................ 32
Table 4.9: Coefficients of Social Cultural Factors ............................................................. 33
Table 4.10: Descriptive of Economic Factors .................................................................... 35
Table 4.11: Regression between Economic Factors and Mobile Banking Adoption ........ 35
Table 4.12: AN0VA of Ec0nomic Fact0rs and Mobile Banking Adoption ...................... 36
Table 4.13: Coefficient of Economic Factors and Mobile Banking Adoption .................. 36
Table 4.14: Descriptive of Technological Factors on Mobile Banking Adoption ............. 38
Table 4.15: Model Summary on Technological Factors on Mobile Banking Adoption ... 39
Table 4.16: ANOVA on Technological Factors on Mobile Banking Adoption ................ 39
Table 4.17: Coefficients of Technological Factors on Mobile Banking Adoption............ 40
xi
ACRONYMS AND ABBREVIATIONS
ANOVA- Analysis of Variances
FSD- Kenya Financial Sector Deepening Kenya
ICT- Information and Communications Technology
IT- Information Technology
KCB- Kenya Commercial Bank
SD- Standard Deviation
SME- Small and Medium Enterprises
SPSS- Statistical Package for Social Sciences
1
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
According to Swickert, Hittner, Harris and Herring (2012) the term mobile banking (M-
Banking) as the name recommend is the access to banking services and facilities offered
by some monetary establishments by use of an electronic mobile device. Among the
services are operation of account and payment of transactions and alternative
merchandise. KPMG mobile report (2015), across Europe adoption of mobile banking
services is averaged at 38%, with a modest annual growth with United Kingdom, U.S.A.
and Australia being the leaders within the region. Despite this there are discrepancies
within the adoption and Great Britain is considered the most mature zone for on-line and
mobile banking, having launched the services in the year 2011. Out of the ten Association
of South-east Asian Nations (ASEAN), Thailand and Vietnam have continued to
experience fast economic growth with the region having a young population of voters
beneath the age of thirty.
Technology trends within the money sector are influencing all of ASEAN states in a
similar way (KPMG, 2015). The report further superimposed that across ASEAN
multiplied usage in mobile commerce has had a significant impact within the banking
sector owing to external competitive forces.In America PayPal, has emerged to be the
main leader in on-line and mobile payments. The establishment begun in 1998 as a
(person-to-person) electronic payment system that has steady matured after its buy out by
eBay to push its customer’s payments. PayPal is calculable to possess over a hundred and
twenty million users across the globe and with a quarterly revenue of over one billion
dollars. Similarly, Square; a platform supported by Jack Dorsey in 2009, provides an
attachment for tablets and mobile phones that may be utilized to process credit cards by
merchants (Gupta, 2013).
By November 2015, nearly ninety percent of the population above eighteen years had a
daily access to a mobile phone. In addition, whereas the amount has been constant an
increased proportion of the adults currently own a smartphone. Rates of portable usage
was also rumored to remain high and consistent across socioeconomic groups and
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demographics, however, it declines for persons above sixty years of age (Anderson,
2015).
Smartphone adoption has been high among younger generations, with the differences
being more pronounced among age groups of 18 to 29 who represent eighty eight percent
mobile phone users, and in line with the 2015 survey ownership varies by race and
ethnicity. Inaddition, households with an income less than $25,000 yearly, seventy six
percent of adults possess a mobile phone, in those earning over $100,000 each year,
ninety six percent have a phone (Anderson, 2015). Whereas that's the case Shaikh and
Karjaluoto (2015) highlight that mobile banking and payment services have become
progressively widespread over the past years. These they attributed to the provision of
technology.
Wang, Chen, & Wang (2015) deduce that within the 2011 survey, over sixty percent of
mobile phone users had used mobile banking and this figure has gone up to ninety six
percent in line with a 2015 survey. Despite this variation, a challenge to adoption of
mobile banking has been customers as they have a perception that by using plastic money
their desires were already being met and so they thus lack interest for the services.
Among mobile banking users, there's variation in frequency of use mobile banking
services, and what forms of activities they have interaction in. a comparatively little share
of mobile banking users (9 percent) indicated that they'd used mobile banking within the
previous year however had not used it within the previous month. These low-intensity
users have a lower probability of partaking in all forms of mobile banking activities,
relative to mobile banking users overall (Board Federal Reserve, 2015). Like all mobile
banking users, the foremost common task for low-intensity users is checking account
balances or recent transactions (71 percent).
According to the KPMG (2015), 44 % of the low-intensity users have their bank’s mobile
banking app on their phone, however way below the eighty two percent of all mobile
banking users who have installed their bank’s app in their mobile. Further, a bigger
proportion of low-intensity mobile banking users are ages 45 or older (43 percent),
relative to all mobile banking users (32 percent). in line with Ondiege (2010), across the
world sub-SaharanAfrica had the least deposit organization penetration standing at an
average of 16.6% with Guinea-Bissau having the smallest amount within the class at
0.6% whereas Mauritius with over 210% penetration. Most of those deposits are in
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industrial banks, with few exceptions where some countries have a lot of deposits in
micro-finance establishments (MFIs) and cooperatives and credit unions. Mwaura (2009)
highlights that rising access to money services is important to any economythat aims to
cut back financial condition although in several developing nations however, just one out
of ten is in a position to access to basic monetary services and banking product through
mobile phones is the most suitable choice for these establishments to reach the poor folks
as several of them have already got access to mobile phones.
The 2014 statistics report by the Communications Authority of Kenya (CA), indicate that
ICT sector has fully grown exponentially, with mobile penetration rate hitting a high of
80.5 per cent, as mobile subscriptions accrued in range from 32.2 million to 33.8 million
denoting a 1.6 per cent growth (CA, 2014). Ondiege (2010) conjointly highlights that
customers typically face high charges once moving their money due to the high
transactions costs involved intrinsically fostering the adoption of mobile banking within
the financial sector. Kamotho (2009) highlights that mobile banking in Kenya begun with
the creation of services that may well be simply accessed via the mobile phone, however,
these facilities haven't solely enabled customers to access information regarding their
accounts however has conjointly seen innovations that currently represent a new channel
for monetary services beyond the banks’ premises.
Odera (2013) conjointly noted that with the urge for Kenyan banks to extend or maintain
the market share there has been witnessed an accrued competition to create new product
and services. Such continuous innovation promotes potency in performance of the
establishments’ activities. Thus, the price for these new services introduced are set to
reduce systematically. There’s still a slow uptake of mobile banking and consistent with
Yu (2013) mobile banking users hasn’t increased to the levels anticipated. Jeong and
Yoon (2013) add that the shortage of trust in m-banking services reduces adoption of
mobile banking despite African economies trying to adopt technology to market
economic growth.
1.2 problem Statement
An appropriate banking atmosphere is considered a key pillar likewise as an enabler of
economic process (Koivu 2002). With the endlessly rising wave of data driven economy,
the banking system in Kenya has inevitably found itself unable to resist technological
indulgence. Banking has continuously been a highly data intensive activity that depends
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heavily on information technology (IT) to amass, process, and deliver the data to any or
all relevant users. Banks realize that they need to perpetually pioneer and update to retain
their exigent and discerning customers and to offer convenient, reliable, and expedient
services. Driven by the challenge to expand and capture a bigger share of the banking
market, some banks invest a lot in additional bricks and mortar to enlarge their
geographical and market coverage whereas others have thought-about a more
revolutionary approach to deliver their banking services via a brand-new medium (Yu,
2013).
The rise of the web has bestowed a new host of opportunities likewise as threats to
business. Today, the web is well on its way to become a full-fledged delivery and
distribution channel and among the consumer-oriented applications riding at the forefront
of this evolution is electronic money product and services. With the fast diffusion of the
technology, banking in cyberspace is quickly changing into an alternate channel to
provide banking services and product. Mobile banking is currently being thought-about as
a strategic weapon and can revolutionize the method banks operate, deliver, and vie
against each other, particularly when competitive benefits of ancient branch networks are
wearing away speedily (Baraghani, 2007).
The need for convenient avenues of accessing monetary resources beyond the standard
norms has seen the continual growth and modernization of banking patterns. And given
the massive demand for finance related services, establishments beside the historical
banks have joined the fray in a trial to grab a bit of the perceived cake of chance inside
the banking system. According to financial Sector Deepening Kenya (FSD Kenya), the
foremost recent information in on the market indicates that solely nineteen percent of
adult Kenyans reported having access to a proper, regulated establishment whereas over a
third (38%) indicated no access to even the foremost rudimentary type of informal
monetary service. This leaves a share of more than 60% outside the bracket of the reach
of regular banking.
The confined-up demand for a reasonable and reliable method of holding funds that
guarantee that risk levels are consigned to a minimum is systematically evolving. A
system with the potential to obliterate the historical hurdles of value and free access,
which have for an extended time stood in the way of willing partakers of banking
services, evokes immediate attention and interest. Unprecedented uptake of mobile phone
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banking services in the country could be a testament to the present reality. whereas M-
pesa could be a growing development the mobile banking services in the banks still lags
behind, this paper thus seeks to determine the explanations for this.
1.3 Purpose of the Study
The purpose of this study is to determine the factors affecting mobile banking adoption
and usage at Kenya commercial bank Kenya.
1.4 Research Questions
1.4.1 How doessocial cultural factors affect mobile banking adoption and usage at KCB
bank?
1.4.2 How does economic factorsaffect mobile banking adoption and usage at KCB bank?
1.4.3 How does technological factorsaffect mobile banking adoption and usage at KCB
bank?
1.5 Significance of the Study
1.5.1 KCB Bank
This research will assist the bank better analyze the consumer needs as well as establish
the issues facing mobile banking adoption among its customers. This study will also be
important in determining the strategies that the bank will adopt in facilitating mobile
banking usage in the institution.
1.5.2 Other Banks
To other banks these findings will offer an insight into the issue-facing uptake of mobile
banking by the customers in the sector. Apart from that, the findings will also be utilized
in creating an effective strategy to reach all the customers without mobile banking
services.
1.5.3 Scholars
To other scholars the findings of this research will help in adding knowledge to mobile
banking in Kenya. In addition, the research wasa reference for future studies.
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1.6 Scope of the Study
The study was conducted within KCB bank branches in Nairobi. The research will focus
on customers of KCB branches. The population was customers in Sarit centre branch and
the data for the study was collected using questionnaires through personally
administration or by email. The main limitation anticipated is the few account holders
having limited time to fill the questionnaires at the banking halls hence some were sent by
mail to the respondents.
1.7 Definiti0n of Terms
1.7.1 Mobile Banking
This is the access to banking services and facilities offered by financial institutions by use
of an electronic mobile device (Gupta, 2013).
1.7.2 Social Cultural Factors
Social cultural factors are customs, lifestyles, and values that characterize a society or
group. Cultural aspects include politics, concepts of beauty, education,technology and
material culture, values and attitudes language, law religion, social organizations (Shaikh
& Karjaluoto, 2015).
1.7.3 Economic Factors
Economic factors comprise the information that influences the value of an investment or
business (Baraghani, 2007).
1.7.4 Technological Factors
These are the influences that have an impact on how an organization operates that are
related to the equipment used within the organization's environment (Jeong & Yoon,
2013).
1.8 Chapter Summary
This chapter presents the background factors affecting mobile banking adoption and
usage in Kenya commercial bank Kenya. The chapter is divided into sections and gives a
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detailed background of the study topic, the problem statement in the context of other
studies, outlines the research questions and provides the significance of the study. Chapter
two will present an overview of the literature reviewed according to the research
questions.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter presents a literature review by various academician’s to determine the
factors affecting mobile banking adoption and usage at Kenya commercial bank Kenya.
The research was guided by the research questions, which are: Does social factors affect
mobile banking adoption and usage at KCB bank? Does economic affect mobile banking
adoption and usage at KCB bank? Does a Technological factor affect mobile banking
adoption and usage at KCB bank?
2.2 Effects of Social Cultural Factors on Mobile Banking Adoption and Usage
To analyse the effects of social cultural factors on mobile banking adoption and usage,
this section aims to review how personal behavior, group influence, and cultural factors
affect mobile banking adoption.
2.2.1 Personal Behavior
Consumer behavior is ever-changing the manner banks run their businesses with many
concentrate on satisfying client wants as a means of driving business growth. This
includes communication and feedback between the customers and businesses in real time
over the web (Ngari, 2014). The rise in present computing devices that have web property
has disrupted the standard aspects of client behavior through redefining the data reach and
rich. Client behavior is referred as how persons, groups, or organizations selected,
purchased, used, and disposed of merchandise, services, concepts, or experiences that met
their wants and needs (Kotler et al., 2014). This behavior was attributed to society,
cultural, and individual factors. Consumer behavior whether or not spontaneous or
rational plays a major role on whether or not he/she buys a product or service (Schiff
8
man, Hansen, & Kanuk, 2008). customers price convenience in their buying experience
on-line , that is denoted by varied factors such as; privacy and security (Metzger, 2015);
pricing, on-line search attributes and brand (Degeratu, Rangaswamy, & Wu, 2000); trust
and factual data (Zhou,2012) promotional and evaluation data (Njuguna, 2014).
Most technology adoption analysis on individual level centered on analyzing the impact
of the preceding constructs on totally different innovations. However, as discovered by
Wejnert (2012), comparatively very little analysis had investigated the impact of
individual characteristics on innovation adoption. However, it appears that such
characteristics may be relevant to an individual’s adoption call. As one of the few studies,
Menzel (2010) showed that certainty and risk-taking characteristic of individual actors
affected their acceptance to novel data and applications. Similarly, multiple researchers
argued that non-public innovativeness and openness absolutely influenced an individual’s
adoption of recent technologies. With the wide adoption of the web, additional
researchers tried to research the impact of the large five temperament traits on general
web adoption and use. For example, extraverts like face-to-face interaction thereby utilize
less time on the web (Landers & Lounsbury 2006), particularly for on-line social
activities like chat rooms (Hamburger and Ben-Artizi 2004).
Nonetheless, they use the web as a tool to amass data and share with others (Amiel and
John Singer Sargent 2014). Conscientiousness individuals are less likely to utilize time
on-line in interests as they see them as unproductive activities. Nevertheless, they like to
use longer time on-line to participate in educational activities (Landers & Lounsbury
2006). folks that are higher in neuroticism tend to limit their on-line time on enjoying
games (Swickert et al. 2012) however pay intensive time on the web to achieve a form of
happiness (Amiel & John Singer Sargent 2014). Agreeable individuals use emails less
often than others (Swickert et al. 2012) however they on the average use loner times on-
line since they're additional persistent in on-line investigations (Landers & Lounsbury
2006). Open-to-experience individuals are generally interested in on-line activities they
are curious and often look for new adventures (Tuten & Bosnjak 2011).
McElroy et al. (2007) concluded that individual’s temperament traits explained additional
variances in her use of web and on-line selling behavior than her cognitive behaviour.
Additionally to general web use, the authors called future analysis to concentrate on
examining the impact of temperament on specific kinds of technology adoption and use.
9
Following the trend of proliferation of Smartphone apps, researchers began to investigate
the correlation between temperament traits and adoption of specific apps. As an example,
Ryan and Xenos (2011) claimed that extraverts are additional likely to become
“Facebook” users than conscientious people. Chittaranjan et al. (2013) found correlations
between temperament and use of apps like “Office”, “YouTube”, “Calendar”, “Mail”, etc.
Similarly, Ch0rley et al. (2015) discovered that the large five temperament traits
contributed to clarify individual variations in utilization of location-based social network
like “Foursquare”. The authors found vital correlation between conscientiousness,
openness, neuroticism and internet usage.
2.2.2. Group Influence
Groups that have an immediate influence and to which an individual belongs are referred
to as membership teams. In contrast, reference teams function as direct (face-to-face) or
indirect points of comparison or reference in forming a person’s perspective or behavior.
Marketers attempt to determine the reference groups of their target markets. Reference
teams expose an individual to new behaviors and lifestyles, influence the person’s
attitudes and self-concept, and make pressures to adapt, this has an effect on the person’s
product and brand decisions (Kotler, 2010). The importance of group influence tends to
be strongest once the item is visible to others whom the customer respects. Manufacturers
of merchandise and brands subjected to robust group influence should work out the way
to reach opinion leaders inside a reference group who, owing to special skills, knowledge,
temperament, or alternative characteristics, exert influence on others.
Consumers typically are influenced by reference teams to which they do not belong. As
an example, an inspirational cluster is one to that the individual desires to belong
(Riquelme & Rios, 2010). Relations will powerfully influence customer behavior. The
family is the most significant client shopping for organization in society. Marketers have
an interest within the roles and influence of the husband, wife, and youngsters on the
acquisition of various merchandise. Husband-wife involvement varies wide by product
class and by stage within the purchasing process. Kids may have sturdy influence on
family shopping for choices. As an example, kids as young as six years could influence
the family motor vehicle purchase decision (Riquelme & Rios, 2010). An individual
belongs to several teams – family, clubs, and organizations. The person’s position in
every cluster are often outlined in terms of each role and position. A job consists of the
10
activities individuals are expected to perform consistent with the persons around them.
Every role carries a status reflective of the general esteem given by society.
Consumer behavior literature conjointly suggests that reference teams, like a social
reference cluster, could have an effect on person's behavior. Two competitive influences
have been acknowledged on the connection between subjective norm and behavior:
conformity and dissension (Simonson and Nowlis, 2011). Conformity is that the results of
individuals attempting to adapt to a subjective norm, thereby avoiding criticism and
rejection. Dissension measures consumer's independence of the subjective norm, and may
be a reflection of sturdy self- JIBC respect and autonomy. A dissentient client is therefore
a personal, unique, special, and divisible from the rest.
The central role of the subjective norm in consumers' behavior has been through
empirical observation verified from many angles. Bagozzi (2010) has shown that once the
subjective norm is measured by social factors and focus, it's a powerful determinant of
client behavior. On the opposite hand, Taylor (1991) argues that the majority individuals
try and surround themselves with individuals and things that are according to their own
identities. The consumption of banking services is also influenced by many reference
teams of the client like the personnel of the bank and ancient ones like friends and family.
We have a tendency to anticipate that reference teams do influence the adoption of web
banking, and modify the hypothesis with the statement that even though web banking
usage is also initiated by a definite reference group like banking personnel, the
continuance of the utilization of online banking depends a lot on alternative factors,
mainly customer's perception concerning technology.
2.2.3. Cultural Factors
Previous studies stressed the importance of culture toward a more robust understanding of
knowledge system adoption Al-Gahtani, Hubona, and Wang (2011) stress the role of
culture when transferring information technology applications across culture, before any
technology transfer, it's necessary to check user necessities and desires. Those desires and
demand are heavily influenced by culture. Hence, there's a necessity to explore the role of
national culture as one of the factors most likely to influence the acceptance or resistance
of electronic banking services. There’s no accepted definition for culture. H0fstede (1997)
defines culture as a c0llective pr0gramming of the mind, which distinguishes the member
of 0ne human cluster fr0m an0ther. Culture may denote the variation between values,
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beliefs, and motivation of a diverse cluster (Mohamed, 2015). Shore and Venkatachalam
(1996) expressed that culture reflects individual core values and beliefs. These values and
beliefs are created through childhood and strengthened throughout their life (Leidner &
Kayworth, 2010).
Cultural factors embrace the following: Culture is the simplest explanation for a person’s
needs and behavior. Human behavior is basically learned. Each cluster or society
incorporates a culture, and cultural influences on purchasing behavior might vary from
one client to another based on his/her culture. Failure to regulate to those variations may
result in ineffective promotion or embarrassing mistakes. Marketers are continually
making an attempt to identify cultural shifts so as to find new product that may be needed
(Kotler, 2010). Every culture contains smaller subcultures, or teams of individuals with
shared worthy systems based on common life experiences and things. Subcultures
embrace nationalities, religions, racial groups, and geographic regions. Several
subcultures conjure necessary market segments, and marketers within the banking system
have to be compelled to create product and promoting programs tailored to their wants
(Kotler, 2006).
Social categories are society’s comparatively permanent and ordered divisions whose
members share similar values, interests, and behaviors. Socio-economic class isn't only
determined by financial gain however additionally measured as a mixture of occupation,
income, education, wealth and alternative variables. Marketers have an interest in people
because individuals within a given socio-economic class tend to exhibit similar purchases
behavior (Armstrong, 2014). In keeping with Riquelme and Rios (2010), social scientists
have known the seven American social categories as higher uppers, lower uppers, higher
middles, middle class, working class, higher lowers, and also the lower lowers.
The higher uppers category includes the social elite who continue to exist on inherited
possessions. They furnish massive sums to charity, own more than one home, and send
their youngsters to the best colleges. The lower uppers category includes those that have
attained high financial gain or wealth through exceptional ability. They are active in
social and civic affairs and purchase expensive homes, education, and cars. The higher
middles category includes professionals, freelance business persons, and company
managers who possess neither family standing nor uncommon wealth. They believe
education, are joiners and extremely civic minded, and need the higher things in life. The
12
middle category constitutes the average-pay white-and blue-collar employees who go on
the higher facet of city. They get standard product to stay up with trends.
The working class includes people who lead a working-class fashion. They rely heavily
on relatives for economic and emotional support, for recommendation on purchases, and
for help in times of hassle. Riquelme and Rios (2010) indicate that the higher lowers
category consists of the operating poor. Though their living standard is simply on top of
poorness, they strive toward a better status. However, they typically lack education and
are poorly remunerated unskilled work. The lower lowers category is composed of people
that are visibly poor, typically poorly educated unskilled laborers. They’re typically out of
labor and a few depend upon public help.
2.3 Effects of Economic Factors on Mobile Banking Adoption and Usage
2.3.1 Cost of Mobile Banking
Cost can be taken a gander at as far as the price of the service and moderateness,
progressing costs and in addition cost of the handset. This alludes to how much the client
brings about to get to the service and to do the genuine transactions. As per Rosenberg
(2010), client use of portable saving money is impacted by supreme costs as well as
incidentally, aservice is valued. For instance, so as to energize trial of cash transactions, a
few services offer free stores, which make branchless banking a moderate approach to
spare. A portion of the banks mobile arrangements may furnish free services with the
main charge being that of the telecoms specialist co-op. For example, while getting to the
service a client was charged a little expense in type of broadcast appointment and perform
account request and exchange subsidizes between records in a similar bank for nothing
out of pocket. Subsequently, contingent upon how much cost the client acquires in
playing out all the required transactions it might figure out if that client can bear the cost
of it or whether he will pay that much for it, in this way influencing reception of the
services
Mobile saving money is a critical viewpoint since the exchange expenses of installments
are significantly diminished when there is an electronically available store of significant
worth in most administrative services (Karjaluoto, 2012). The topic of who may hold the
store adjust ends up being a pivotal issue influencing the advancement of these models
(Salim, 2011). Regardless of the possibility that the attention is on the more extensive
13
viewpoints required in m saving money, the spread of m-managing an account depends to
a great extent on improvements in the innovation and direction of m-installment. In
Kenya, m managing an account and m-installments initially started creating huge
consideration in 2005, however industry premium and speculation capital wound down
with the consequent web bust. In the previous two years, in any case, organizations,
speculators, and industry spectators, energized by full-scale usage abroad and restricted
yet effective local pilots, have at the end of the day started to treat the different types of
smaller scale budgetary services (MFS) as a convincing business opportunity. This is on
the grounds that the saving money process and method in the Kenyan managing an
account establishments is extremely dull particularly with the expanding number of
brokers in the business. The clients are required to take after a pre-decided procedure to
get the services offered by the bank.
For example, services like storing, withdrawals, checking proclamations, adjust request
and transactions inside and outside the nation requires confirmation, verification, lastly
exchange (InfoDEV, 2006). A cell phone based managing an account arrangement could
cover no less than 60% of those at present with financial balances. Such aservice would
be utilized for putting away money safely and for profiting transactions – individuals
presently convey money, utilize the mail station services, and make utilization of
broadcast appointment transactions through a cell phone (Porteous, 2011).
Different activities utilize cell phones to give money related services to the unbanked.
These services take an assortment of frame including long-remove settlements,
micropayments, and casual broadcast appointment bargaining plans and pass by different
names, including mobile saving money, portable transactions, and portable installments.
Taken together, they are no longer only pilots; in the Philippines, South Africa, Kenya,
and somewhere else, these services are comprehensively accessible and progressively
prevalent. Mobilebanking is without a doubt compelling on cost and administers services
to the unbanked in light of the fact that there is no requirement for branches physical
foundation to help the clients. It is just a branchless bank display that has the capacities of
taking care of restricted bank dealings through the cell phone (infoDEV, 2006).
M-managing an account is a financially savvy approach to give saving money services to
the unbanked in light of the fact that there is no compelling reason to set up physical
branches to encourage clients it called as it is branchless banking'. It is branchless bank
14
show incorporates improved capacity to do restricted bankingtransactions by means of
cell phone (Porteous 2011). Banks ought to build up their m-managing an account
framework and enroll their clients electronically for m-saving money. It is noticed that,
underlying expense for foundation of m-banking framework might be high yet negligible
cost for augmentations of new clients in m-managing an account wills decays constantly
until full usage of existing introduced limit. Availability for cell phone is not the piece of
managing an account benefit it is obligation and some portion of business of media
transmission office and cell specialist co-ops. Thus, banks ought to just rent the media
transmission lines gave by media transmission office to give access to the clients
(Vaughan, 2007).
2.3.2 Financial Services offered
Mobile Financial Services (MFS) envelops a wide scope of money related exercises that
customers take part in or get to utilize their cell phones. MFS can be separated into two
unmistakable classes: portable managing an account (m-saving money) and mobile
banking (m-banking) (Boyd and Jacob, 2011). Mobilebanking is characterized as "a
channel whereby the client collaborates with a bank by means of a cell phone, for
example, a cell phone or individual advanced right hand (PDA)" (Barnes and Corbitt,
2013). Portable managing an account can likewise be considered as the joining of mobile
innovation and monetary administrations (Chung &Kwon, 2009). M-banking is a subset
of saving m0ney as it permits everyb0dy simple access t0 their managing an acc0unt
exercises by means of mobile handsets (Yu &Fang, 2009).
With the change of portable innovations and gadgets, mobilebanking has been considered
as a notable framework due to such characteristics of mobile advances as universality,
comfort and intuitiveness. Mobile installments then again are characterized as the
utilization of a cell phone to lead an installment exchange in which cash or subsidizes are
exchanged from a payer to a collector by means of a middle person, or specifically
without a delegate (Niina Mallat, 2011). Cell phones can be utilized as a part of an
assortment of installment situations, for example, installment for advanced substance
(e.g., ring tones, news, music, or amusements), tickets, stopping expenses and transport
admissions, or to get to electronic installment administrations to pay bills and
solicitations. Installments for physical merchandise are additionally conceivable, both at
15
distributing and ticketing machines, and at kept an eye on purpose of offer (POS)
terminals (Mallat et al., 2008).
Clark (2008) recommended that as a channel the cell phone can increase the quantity of
channels accessible to customers, accordingly giving buyers all the more ease self-benefit
choices by which to get to assets, managing an account data and make installments.
Mobile as a channel conveys accommodation, promptness, and decision to buyers. In any
case, there are an expansive number of various cell phone gadgets and it is a major test
for banks to offer Mobile saving money arrangement on a gadget. Some of these gadgets
bolster Java2Micro Edition (J2ME) and others bolster Wireless Application Protocol
(WAP) program or just SMS. Barnes and Corbitt (2003); Scornavacca and Barnes (2004)
propose that current advancements in media communications have empowered the
dispatch of new get to strategies for saving money administrations, one of these is
portable managing an account; whereby a client collaborates with a bank by means of a
cell phone, for example, a cell phone or individual computerized associate.
Vyas (2009) expressed that Indian banks will target non web based banking clients who
may need standard access to desktop web however are probably going to possess a cell
phone, in this manner detailing incredible capability of Mobile managing an account in
India. Karjaluoto (2002); Rugimbana (1995) found that there is endless market potential
for mobile managing an account because of its dependably on usefulness and the
alternative to do saving money practically whenever and anyplace. Unnithan and
Swatman (2001) concentrated the drivers for change in the advancement of the saving
money segment, and the move towards electronic saving money including portable
managing an account by concentrating on two economies, Australia and India and
proposed solid development capability of new banking direct in India. Vyas (2009); Rao
et al. (2003) propose banks should extend their reasoning about portable managing an
account past web based saving money and ought to begin to view versatility as its own
intense and convincing conveyance channel that can help them convey to end clients new
esteem, for example, quick get to and extra control of individual funds.
2.3.3 Money Supply
Bank conduct is one vital determinant of cash and credit advancements, both of a
repeating and of a more relentless nature. Dismissing this part is much the same as
relegating budgetary go-betweens just an aloof part in the economy (Bruno and Shin,
16
2013). As of late, against the foundation of the monetary emergency, it has turned out to
be progressively apparent that such an aloof perspective of banks is ridiculous. The
volume of wide cash in the economy is the consequence of the cooperation of the saving
money area (counting the national bank) with the cash holding division, comprising of
family units, nonfinancial organizations, the general government other than focal
government, and additionally non-fiscal budgetary delegates (Schularick, and Taylor,
2012). Wide cash includes money available for use and close substitutes, for example,
bank stores, and is instructive for total spending and expansion. It along these lines goes
past those advantages that are by and large acknowledged method for installment to
incorporate instruments that capacity fundamentally as a store of significant worth
(Schmiedel, Kostova and Ruttenberg, 2012).
Financial strategy impacts the supply of cash through the impacts it has on banks'
intermediation movement. Nonetheless, most of the adjustments in cash supply happening
in the economy result from improvements in the way that banks lead their business
(Borio, and Zhu, 2012). All the more particularly, a bank is a foundation, the center
operations of which comprise of conceding advances and providing stores to people in
general. Through the duality of loaning and store issuance, banks satisfy various
capacities: they offer liquidity and installment administrations, embrace the screening and
observing of borrowers' reliability, redistribute hazards and change resource attributes
(Greenbaum, Thakor, and Boot, 2015). These capacities will regularly cooperate inside a
bank's intermediation procedure. Banks may middle of the road amongst savers and
borrowers by issuing securities and loaning the receipts forward. Such loaning action will
require the handling of point by point and regularly restrictive data on borrowers and the
checking of the activities that have been financed (Agénor and Canuto, 2014).
As indicated by Agresti (2016) such credit is, be that as it may, likewise gave by various
non-money related monetary mediators, for example, protection partnerships, and benefits
and venture finances, and is not particular to banks. Banks may likewise loan to
borrowers, yet in this manner make stores. The stores constitute guarantees on the bank
that are capital-sure and demandable, that is redeemable at a known ostensible esteem.
These stores have as a key element the arrangement of liquidity administrations to their
proprietor and, now and again, for example, overnight stores, can likewise be utilized for
17
installment administrations. As portrayed by Diamond and Dybvig, this change of illiquid
cases into fluid cases is a key characterizing component of a bank. Non-fiscal money
related go-betweens don't give their clients fluid stores. Banks' fluid store liabilities
constitute the center of expansive fiscal totals, and banks therefore assume a main part in
the supply of wide cash. Changes in banks' conduct will adjust the cash supply (Keister,
2016).
2.4 Effects of Technological Factors on Mobile Banking Adoption and Usage
Headway in innovation has brought many changes and rivalry among banks and nonbank
money related foundations, which raises worry with respect to why a few people receive
one distributional channel, and others don't. Sonja (2010) investigated on the impacts of
computerization on sparing, credit cooperatives in Uganda, and discovered that
Technology is probably going to build the effectiveness, effort, and maintainability of
microfinance establishments. ICT's has been found to advance the double goals of
miniaturized scale fund maintainability and effort to the destitute individuals and noticed
that Management data frameworks are basic all together for a microfinance foundation to
work proficiently.
2.4.1 Government Intervention
The part of government is more critical in the benefit arranged associations that have
constrained access to monetary assets, for example, SMEs, which ingest a noteworthy
number of the work compel around the nation (Baum and Szivas, 2008). Besides, some
applicable support from government for SMEs can fluctuate from making arrangements
and operational heading and urging aptitude change to giving access to the top of the line
skill (Baum and Szivas, 2008). Bozeman (2000) proposed a few commitments that can be
created by governments to empower the effective selection of ICT developments. Firstly,
governments can include college innovative work offices in the program of urging people
and associations to embrace ICT advancements.
Also, governments can compose and make great arrangements to bolster the improvement
of non-military personnel innovation advancements. (2000) suggests concentrated and
nonstop projects from both government and college research centers to create innovation
based financial matters. Examine execution, providing connected research and innovation
to industry and creating arrangements, are exercises that can be produced by government
18
to bolster little and medium endeavors (Bozeman, 2000). By creating solid and
satisfactory learning of the determinants of ICT developments selection, governments are
additionally anticipated that would settle on fitting choices that empower benefit arranged
associations to receive ICT advancements (Bayo-Moriones and Lera Lopez, 2007).
Governments can have a key influence in helping SMEs enhance the monetary
development and improvement of the nation (Baum and Szivas, 2008). Arrangements that
are acquainted by government have with suit the interests of the influenced parties. A
review by Baliamoune-Lutz (2003) found that ICT advancements selection is
fundamentally controlled by the arrangements that are presented by government. Because
of the significance of ICT advancements in the present period, all legislatures around the
globe ought to be more dynamic in their support of firms and reception of ICT
developments to create new and imaginative ICT-based activities (Fernandez-
Villavicencio, 2010). Along these lines, the present needs to bolster SMEs, for example,
creating pertinent establishments (Smallbone and Welter, 2001) and inciting
appropriation of ICT developments (Oh et al., 2009) must be actualized quickly. Besides,
specific impedance to spur and help SMEs to embrace ICT developments and to help
SMEs to accomplish incredible exhibitions is additionally encouraged (Smallbone and
Welter, 2001).
Thomas, Wolf, Allan and Nadra (2008) specified risk as a key lawful issue. Obligation
must be resolved when money related misfortunes happen in Internet exchanges, and
misfortunes must be borne by the bank, the client, or even other related gatherings in the
Internet banking framework, for example, the Internet specialist organization. By and by,
banks ordinarily issue Internet managing an account contracts or concurrences with
constraints of their obligation, taking note of that the bank is not in charge of any
misfortune brought about by the Internet saving money administration or client utilization
of the administration (Sir Luck et al, 2007).
As indicated by Farhoomand, Liao, Cheng and Lee (2009) another issue of legitimate
support for utilizing the Internet in business exchanges is the locale of the courts and
question determination techniques. Question can emerge from many issues for example,
the Web website is not a branch of the bank, which makes it an entangled assignment for
courts to characterize the area of the bank and choose whether they have purview.
Furthermore, online exchange records are not acknowledged by a few clients inferable
19
from the troubles in giving verification of electronic transmissions. Numerous
organizations are still careful about making broad exchanges over the Web as a result of
the absence of supporting law about electronic archives as lawful proof. Habitually it is
hazy whether electronic reports and records are worthy as adequate proof of exchanges
(Larpsiri et al., 2008)
2.4.2 Security Issues
According to Hutchinson (2007) E-trade security is an inside issue that forestalls
allotment of web dealing with a record in many sparing cash establishments. Hutchinson
(2007) battled that while it is perceived that Australian banks have an amazing record
concerning security of customer information, examines show that Internet customers are
drained about insurance issues including straightforwardness, gathering, use and
disclosure of their own information. This stress basically relates to approval. The dealing
with a record and back endeavors report the most vital rate of mishandle being 57 percent,
which is clearly related to these ventures having a standout amongst the most vital
conditions on PCs in the workplace (Hutchinson, 2007).
A standout amongst the latest security perils is a PC program known as "Nmap" which is
a framework examination mechanical assembly and security scanner. On execution it
causes a bank's intrusion area system to deceptively believe it is being struck by
numerous software engineers over the globe, when it is very one individual (Shu-Hsun
and Ying-Yin, 2008). As showed by Chellappa (2008) the security affirmations offered
by banks and which customers predict should include: Careful reference to their endorsed
Web goals in their creations; check by method for the use of a mechanized statement; on-
screen and mouse-worked keypads for tricky information; disease protection; no under
128-piece encryption; firewall use and communicated cutoff focuses to customer hazard
for unapproved use of get to codes.
From a client perspective, the issue of trust can be ensured by having the going with trust
parts embedded inside the trust appear. Protection which is the method through which
customers are satisfied that their own particular information is sufficiently spared by the
component assembling the information (Shu-Hsun and Ying-Yin, 2008). According to
Chellappa (2008), the lion's share of electronic exchange trades are brought out through
Web programs that are related with shipper goals that along these lines interface with
20
some kind of budgetary association. Like any strong information structure, the move
when driving such a trade should be reliable and direct for the customer yet feedback
ought to be demonstrated remembering the true objective to make an opinion control.
Some affirmation of security is appeared in projects and Web goals as pictures for clients
driving trades that conform to some degree to these frameworks. Generally, an unbroken
hook is used to exhibit a protected session empowering genuineness and mystery by
method for encryption, decrees about data security and firewalls addressing protection,
surely understood and irrefutable space names for affirmation and propelled supports
ensuring check from put stock in pariahs (Chellappa, 2008). With no unmistakable way
for a standard customer to affirm the veritable security of Internet Banking structures,
there is little affirmation to support that these pictures have not been made. This
framework gives the preface of perceiving the imperative security requirements and
mapping them to sensible security building for the relating condition.
2.4.3 Ease of Use
Dependability of an administration is distinguished as a standout amongst the most
critical variables inside each objective client section when choosing the utilization of a
banking benefit conveyance channel. Some concurred that "utilizing cell phone in
banking is dependable" (Mattila, 2002). To be one of the best worries in reception of
portable saving money administrations people may stress over security issues amid
versatile banking benefit exchanges, for example, information and yield systems
(Laukkanen and Lauronen, 2005), loss of association hazard and individual execution
botches (Kuisma et al., 2007). Thus, many individuals may choose not to utilize this
administration and disregard the additional advantages of utilizing versatile saving
money. Be that as it may, some past reviews have contended that, despite what might be
expected, security issues were not significant snags for customers in embracing portable
managing an account (Laukkanen and Lauronen, 2005).
The record adjust administration is a standout amongst the most encouraging portable
banking benefits, and is intended to help clients check their record adjust and most recent
exchanges promptly at whatever time/anyplace (Laukkanen, 2007). It was likewise found
that area free get to made comfort in asking for record parities. Moreover, openness and
versatility are delegated measurements of comfort in the purchaser conduct writings.
21
Thusly the spatial and worldly separation between need acknowledgment and need
fulfillment can be viewed as imperative for doing saving money through cell phone
(Mattila, 2002,).
The capacity to permit purchasers to have more control over their budgetary circumstance
is one fascination of portable banking administrations (Laukkanen and Lauronen, 2005),
as the buyer likes to represent himself/herself when managing his/her own financial
exchanges through the cell phone. Luakkanen (2005) found that the adaptability of having
the capacity to utilize the administration wherever and at whatever point the clients need
empowers prompt finish of managing an account errands (exchanging cash or paying a
bill). This would spare time and be seen as advantageous and proficient. The bank gives a
few administrations through versatile media, data based, transaction–based and individual
administrations (Laudon, and Laudon, 2002). The SMS administration is the simplest
approach to check account parities and most recent exchanges by means of cell phone
(Laukkanen, 2007). Laukkanen et al (2007) found that speed of information transmission
and the UI weakened the additional estimation of portable administrations. In this way,
the qualities of the administration as saw by the client and gave by the managing an
account foundation and specialist organization are critical elements affecting the use of
portable banking.
2.5 Chapter Summary
This chapter analyzed the various works of past scholars regarding the topic and this was
discussed with regard to the variables affecting the various objectives of the study. The
next chapter will look into the research methodology applied in the study while chapter
four will look at the data analysis.
22
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter discussesresearchprocedurethat wasused in the study. It also establishes the
research design, population, and sample size, data collection methods, research
procedures and data analysis and the presentation methods to be utilized in this research.
3.2 Research Design
According to Kothari (2004), research design is a plan, a roadmap, and blueprint strategy.
That is used by researchers to collect and analyze data so as to obtain answers to research
questions.It is a conceptual frame work. It is “a blue print that is used to conduct a study
with maximum control over factors that may interfere with the validity of the findings”
(Burns & Grove 2003).It is the conceptualstructure within which research is conducted; it
outlines the objectives of a study, specifiesthe sources of data to be collected, and
identifies possible constraints that may affect the study (Saunders, 2oo3).
The research used descriptive design, according to Kombo and Tromp (2006), descriptive
survey is used to describe state of the affairs as they exist. It helps a researcher investigate
variables without manipulating them, and also report various aspects that define
competency (Patton, 2000).Both quantitative and qualitative research was used to be able
to gain better knowledge and understanding of the results. Quantitative research relies on
deductive reasoning or deduction(Sekaran &Bougie, 2010).
23
3.3 Population and Sampling Design
3.3.1Population
Burns and Grove (2003), states that a population is all the elements that meet the criteria
for inclusion in astudy.Population can be defined as the total collection of individuals
whom researchers seek to make inference on (Cooper &Schindler, 2014). The target
population was customers at KCB bank Sarit Centre Branch.
Table 3.1: Population
Account Total Population Percentage (%)
Bankika Personal account 360 37%
Bankika business account 140 12%
Current account 100 10%
Jiinue account 320 30%
Simba Savings account 120 11%
Total 1040 100
Source: KCB branch Sarit (2016)
3.3.2 Sampling Design
3.3.2.1 Sampling Frame
Cooper and Schindler (2014) define a sampling frame as the listing of the entire
population from which a sample size is selected. It represents a complete and correct list
of population members.A sampling frame should be a completeand correct list of
population members only. It is arecord of all the sample units available for selection at a
given stage in the sampling process (Ngechu, 2oo4). The sample frame for this study
came from customers at KCB bank Sarit Centre branch.
3.3.2.2 Sampling Technique
The research will use a stratified random sampling technique. Stratified random sampling
is a technique that divides a population into subgroups. Stratified random sampling is the
24
process of stratification (different strata are madeon the bases of different factors such as
life stages, income levels, management leveletc.) and a random sample is then drawn
from each stratum(Sekaran & B0ugie, 2016). The use of stratified random sampling
helped the researcher reduce error and bias.
3.3.2.3 Sample Size
According to Polit (2001), sample is a proportion of a population. According to Lind
(2008), a sample is a subgroup of the population. The use of a sample enable a researcher
save a lot of time and money, and get more detailed information (Bluman, 2009). A
sample reflects the population as a whole i.e. it a true representative of the population.
Out of the whole population, a sample was selected to be a true representative of the
population
The sample size in a research was the number of observations or replicates to include in a
statistical sample. The sample size is important in achieving the objective of making an
inference about a population from a given sample. Holloway and Wheeler (2002) assert
that sample size does not influence the importance or quality of the study and note that
there are no guidelines in determining the size.
According to Mugenda and Mugenda (2008), a sample should comprise between 10-30%
of the population, and a good population sample should be at least 10% and not more than
30% of the entire population. According to Cooper and Schindler (2014), a sample is
equivalent to the sample size that would be reliable and since the population is large the
sample size was drawn using the following formula.
Sample size = (Zα/2)2 x P(1-P)
E2
Where: (Zα/2)= Z value (2.58=99%; 1.96= 95%; 1.645=90% confidence level)
In this case 1.96 used.
P = percentage proportion of choice (10% used for sample size needed)
E = margin of error (5%)
Going as per the stated assumptions the sample size will therefore be:
25
Sample size = (1.96)2 x 0.1 (1 - 0.1)
0.052
= 3.8416 x 0.09
0.002.5
Sample size = 138.2976 = 138 Respondents
Table 3.2: Sample Distribution
Account Sample size Percentage (%)
Bankika Personal account 51 37%
Bankika Business account 17 12%
Current account 14 10%
Jiinue account 41 30%
Simba savings account 15 11%
Total 138 100%
3.4 Data Collection Methods
Structured questionnaires were used to collect primary data. Structured questionnaire is a
questionnaire in which the questions asked are precisely decided in advance. The
questionnaires were in line with the research objectives and wasdelivered to the
customers. The questionnaire was self-administered. They were delivered to bank
customers and picked immediately they are done answering the questions hence reducing
bias. Likert scale type of questions were used to determine respondent’s attitudes or
feelings about a given subject. In most cases, it is used to measure the level of the
respondents’ satisfaction or consent rate (Cooper & Schindler, 2014).The questionnaire
waspre-tested with a few members of the population for further improvements. This was
done in order to enhance its validity and accuracy of data collected for the study.
26
3.5 Research Procedures
Five questionnaires were pre-tested and reviewed for precision, completeness, accuracy
and clarity of interview questions. Findings received from the pretest wasincorporated
into the questionnaire before administering the final copy.Questions werestandardized to
minimize interference from interpersonal factors. The study used a five-point Liker scale
to ask all respondents to express their opinion on given statements, and they were
expected to agree, strongly agree, remain neutral, disagree or strongly disagree. Before
issuing the questionnaire, the researcher sought permission from supervisors within the
branch, and this was done via an official communication by a letter from United States
International University. Ample time wasallowed for respondents to fill in the
questionnaires, and the information received was treated confidentially for academic
purpose only. The researcher will communicate to the organization about the results of
the research findings.
3.6 Data Analysis Methods
The process of analyzing, cleaning, transforming, and modeling data collected is called
data analysis (Wagner, Halley & Zaino 2011). Both qualitative and quantitative data was
used. Data collected was coded to different variables of the study for ease of data entry
and interpretation. The quantitative data collectedwas analyzed by the use of descriptive
statistics using Statistical Package for Social Sciences (SPSS) and presented through
means and standard deviations. This was done by tallying, computing percentages as well
as describing and interpreting the data in regard to the study objectives and assumptions
through use of SPSS.
The study also undertook a regression and correlation analysis of the various variables to
determine how the various variables relate to each other. The information was displayed
by use of tables. Tables are very appropriate when presenting the data collected for ease
of comprehension and analysis.
3.7 Summary
This chapter discusses the research methodology that was used in the study. It has
highlighted research design, population, sampling frame, sampling technique, Sample
27
size, data collection, and data analysis. Chapter four will cover data analysis and
presentation of the findings of the research.
CHAPTER FOUR
4.0 DATA ANALYSIS AND INTERPRETATION
4.1 Introduction
This chapter offers the findings established from the study and the interpretations. The
chapter also shows the results on demographics of the respondents. The chapter further
gives findings on the various factors affecting mobile banking adoption: a case of KCB
bank Kenya.
4.1.1 Response Rate
The response rate determines the statistical power of a research and a higher rate is
considered better. In this study, a total of 138 questionnaires were distributed and only 95
were filled and returned. This represents a response rate of 69 % and this was sufficient as
shown in table 4.1.
Table 4.1: Response Rate
Questionnaires Number Percentage
Filled and collected 95 69
28
Non Responded 43 31
Total 138 100
4.2 Demographic Information
This section of the analysis shows the results on the demographic factors of participants
in this research study.
4.2.1 Age
To investigate the age of the respondents the age group 30-39 were the majority with 45
respondents accounting for 47.37% of the population; this was followed by those between
25-30, with 25 respondents accounting for 26.32% of the total. Those above 40 years
were 20 and this was 21.05% of the total. Those below 25 were five and represented
5.26% as shown in table 4.2. Most of the account holders are either employed or run their
own firms and this explains the huge numbers of respondents above 25 as shown in table
4.3.
Table 4.2: Age Range
Variable Distribution
Frequency Percent
Below 25 5 5.26
25-30years 25 26.32
30-39years 45 47.37
40 years and above 20 21.05
Total 95 100
4.2.2Gender
From the study, the variable gender had a majority of the respondents being male
accounting for 57.9 % of the population while the female accounted for 42.1% as shown
in table 4.4. This was attributed to the fact that male’s respondents are more approachable
hence they were able to fill in more questionnaire than the female respondents.
29
Table 4.3: Gender
4.2.3 Level of Education
To investigate the education level of the respondents, Bachelor degree holders were the
majority with 55 respondents accounting for 57.9% of the population; Diploma holders
followed with 20 respondents accounting for 21.1% of the total. Certificate holders were
15 accounting for 15.8% while Masters Holders were 5 and this was 5.3 % of the total as
shown in table 4.5. As it is in Kenya there are many degree holders in the various
industries and this explains the high number of bachelor degree holders from the
respondents.
Table 4.4: Education
Variable Distribution
Frequency Percent
Certificate 15 15.8
Diploma 20 21.1
Bachelor 55 57.9
Masters 5 5.3
Total 95 100.0
4.2.4 Duration as a Customer
To analyze the duration served as a customer from the finding 50 of the respondents had
held accounts for 2-4 years, those above 10 years were 35 and accounted for 36.8%, those
of less than 1 year and 5-9 years were 5 and represented 5.3%. It was also established that
those above 10 years were 35 and accounted for 36.8% as shown in Table 4.5.
Variable Distribution
Frequency Percent
Male 55 57.9
Female 40 42.1
Total 95 100.0
30
Table 4.5: Duration as a Customer
Variable Distribution
Frequency Percent
less than 1 year 5 5.3
2-4 years 50 52.6
5-9years 5 5.3
above 10 years 35 36.8
Total 95 100
4.3 Social Cultural Factors Affect Mobile Banking
The first objective of this study was set tosought to establish the effects of social cultural
factors on mobile bankingand the respondents were asked several questions that they
were rating with the best being Strongly agree (1) and the worst being Strongly Disagree
(5).
4.3.1 Descriptive of Social Cultural Factors
The findings established that most of the respondents strongly agreed that they have the
knowledge to use electronic banking services (1.42), ability to use electronic banking
service (1.74) and they would embrace electronic banking services their banking needs
(1.79), as well as use mobile banking to pay my utility bills (1.95). The respondents also
agreed that people whose opinion they value thought they should use electronic banking
services (2.37) while people who are important and in support of the service (2.79), those
who influence respondent’s decisionsand in support of the service (2.84).
There was uncertainty on time taken to learn electronic banking services (3.47), and use
of electronic banking services because other people may be able to access respondents
accounts (3.63), Most disagreed on whether they had the resources to use electronic
banking services (4.02) and whether it would take me lots of time to learn how to use
electronic banking services (4.21).This means that most of the respondents agree that
adoption of the service is dependent on the user as well as the surrounding individuals.
However, there is uncertainty about time taken to learn electronic banking servicesother
people accessing respondent’s accounts.
On analysis of the standard deviation having the resources to use electronic banking
serviceshad the highest deviation of 1.631. This means that there was a big deviation
between those who agreed, disagreed and neutral. The least standard deviation was for the
31
respondents using electronic banking services for own banking needs(0.898) and thus
implies that little variation was exhibited between those who agreed, disagreed and
neutral.
Table 4.6: Social Cultural Factors
VARIABLE MEAN SD
I have the resources to use electronic banking services 4.02 1.631
I have the knowledge to use electronic banking services 1.42 .941
I have the ability to use electronic banking services 1.74 1.213
It would take me lots of time to learn electronic banking services. 3.47 1.610
I am worried to use electronic banking services because other people
may be able to access my account
3.63 1.092
People who are important to make think that I should use electronic
banking services.
2.79 1.245
I value people opinions to use electronic banking services. 2.37 .990
People who influence my decisions think that I should use electronic
banking services
2.84 1.142
It would take me lots of time to learn how to use electronic banking
services.
4.21 1.245
I would use electronic banking services for my banking needs. 1.79 .898
I would use mobile banking to pay my utility bills 1.95 1.283
4.3.2Regression between Social Cultural Factors and Mobile Banking Adoption
Table 4.7: Model Summary on Social Cultural Factors
Model R
R
Square
Adjusted
R Square
Std. Error
of the
Estimate
Change Statistics
R Square
Change
F
Change df1
df2
Sig. F
Change
1 .897a .804 .778 .363 .804 30.950 11a 83 .000
a. Predictors: (Constant), resources to use services, knowledge to use electronic services, ability to use
services, lots of time, other people may be able to access my account, people who are important to make
think that I should use electronic banking services, People whose opinion I value think I should use
service, people who influence my decisions think that I should use services, lots of time to learn how to
use services, use electronic banking services for my banking needs, use mobile banking to pay my utility
bills
A regression analysis done between variables of social cultural factorsand mobile banking
adoption. On analysis, the R square value was 0.804 and a p-value of (0.000) was
32
significant as indicated in Table 4.7. This means that 80.4% of the variation in mobile
banking adoptionwas caused by the variation in thesocial cultural factors.
Table 4.8: ANOVA on Social Cultural Factorsand Mobile Banking Adoption
An AN0VA analysis was d0ne between s0cial cultural fact0rs and m0bile banking
ad0pti0n.at 95% c0nfidence level, the F critical was 30.950 and the P value was (0.000)
theref0re significant the results are sh0wn in table 4.8. This result indicate a statistically
significant difference in the mean between the variables 0f social cultural factors that
affect mobile banking
4.3.3 Coefficient ofSocial Cultural Factors And Mobile Banking Adoption
A Pearson correlation was done between mobile banking adoption(dependent variable)
against other social cultural factors. The results of the regression coefficients, t-statistics,
standard errors of the estimates and p values are shown in table 4.9.
When social cultural factors were predicted against mobile banking adoption (Constant)(
p value =.000), have the resources to use electronic banking service (Beta=.807, p
value=.000), have the knowledge to use electronic banking service (Beta=.281, p
value=.010). have the ability to use electronic banking services (Beta= -.514, p
value=.000), It takes lots of time to learn electronic banking services (Beta=.254, p value
=.000), I am worried to use electronic banking services because other people may be able
to access my account (Beta=.453, p value= .000), People who are important to make think
Model Sum of Squares df Mean Square F Sig.
1 Regression 44.960 11 4.087 30.950 .000b
Residual 10.961 83 .132
Total 55.921 94
a. Dependent Variable: Mobile Banking Adoption
b. Predictors: (Constant), resources to use services, knowledge to use electronic services, ability to use
services, lots of time, other people may be able to access my account, people who are important to make
think that I should use electronic banking services, People whose opinion I value think I should use
service, people who influence my decisions think that I should use services, lots of time to learn how to
use services, use electronic banking services for my banking needs, use mobile banking to pay my utility
bills
33
that I should use electronic banking services (Beta=.071, p value=.621), People whose
opinion I value think I should use electronic banking services Beta=.136, p value=.116),
People who influence my decisions think that I would use electronic banking services
(Beta=.165, p value .072), It would take me lots of time to learn how to use electronic
banking services. Beta=-.168, p value .102), I would use electronic banking services for
my banking needs. (Beta=.155, p value= .247), I would use mobile banking to pay my
utility bills (Beta=.048, p value=.826)
From the analysis, only the variables; have the resources to use electronic banking
service, have the knowledge to use electronic banking service, it takes lots of time to
learn electronic banking services, and am worried to use electronic banking services
because other people may be able to access my accountwere significant (pvalue < 0.05),
however, the variable have the ability to use electronic banking services was significant
but had a negative Beta (-0.514).
This implies that for KCB Bank to be able to have many people adopt mobile banking
there is a need for the customers to have the resources to use electronic banking service,
have the knowledge to use electronic banking service, it takes lots of time to learn
electronic banking services, and increase security towards access their account. However,
other areas need to be analysed to improve the adoption include the encouraging
customers who have the ability to use electronic banking services to take the service.
Table 4.9: Coefficients of Social Cultural Factors
Model
Unstandardized
Coefficients Standardized
Coefficients
t Sig. B
Std.
Error Beta
1 (Constant) Performance -1.364 .360 -3.790 .000
I have the resources to use electronic
banking services
.719 .108 .807 6.638 .000
I have the knowledge to use electronic
banking services
.231 .088 .281 2.626 .010
I have the ability to use electronic
banking services
-.327 .051 -.514 -6.365 .000
34
It would take me lots of time to learn
electronic banking services.
.122 .033 .254 3.707 .000
I am worried to use electronic banking
services because other people may be
able to access my account
.320 .054 .453 5.922 .000
People who are important to make
think that I should use electronic
banking services.
.044 .089 .071 .496 .621
People whose opinion I value think I
should use electronic banking services.
.106 .067 .136 1.589 .116
People who influence my decisions
think that I should use electronic
banking services
.111 .061 .165 1.824 .072
It would take me lots of time to learn
how to use electronic banking
services.
-.104 .063 -.168 -1.652 .102
I would use electronic banking
services for my banking needs.
.133 .114 .155 1.166 .247
I would use mobile banking to pay my
utility bills
.029 .131 .048 .221 .826
4.4 Effect Economic Factors on Mobile Banking Adoption
The study sought to establish the effects of differentiation on performance and the
respondents were asked a few questions that they rated with Strongly agree being (1) and
the Strongly disagree (5).
4.4.1 Descriptive of Economic Factors
Most respondents strongly agreed that they are able to access to funds any time they want
(1.63), also majority agreed that M-banking is a costeffective way to provide banking
services to the unbanked because there (2.16), various initiatives use mobile phones to
provide financial services to the unbanked (2.26), mobile banking could save me
transaction cost (2.58), mobile banking reduced transaction costs of payments (2.58),
mobile banking affect rate of money supply in the economy (2.84).
There was however uncertainty on how the customer usage of mobile banking is
influenced by how a service is priced (3.00), customer usage of mobile banking is
35
influenced by absolute prices (3.11) and worry for lack of compensating from bank when
transaction error occurs (3.37) as shown in table 4.10.
Table 4.10: Descriptive of Economic Factors
Variable Mean SD
worry that I cannot get compensating from bank in case of error 3.37 1.430
Mobile banking could save me transaction cost 2.58 1.234
customer usage of mobile banking is influenced by absolute prices 3.11 1.293
Customer usage of mobile banking is influenced by how a service is
priced.
3.00 1.345
Mobile banking reduced transaction costs of payments 2.58 1.357
Various initiatives use mobile phones to provide financial services
to the unbanked.
2.26 1.339
M-banking is a cost-effective way to provide banking services to
the unbanked because there
2.16 1.315
Mobile banking affect rate of money supply in the economy 2.84 1.394
I am able to access my funds any time I want to 1.63 1.185
4.4.2 Regression Between Economic Factors and Mobile Banking Adoption
A regression analysis was done between variables of economic factors and mobile
banking adoption. On analysis, the R square value was 0.839 and a p-value of (0.000) was
significant as indicated in Table 4.11. This means that 83.9% of the variation in mobile
banking adoption was explained by variances in economic factors.
Table 4.11: Regression between Economic Factors and Mobile Banking Adoption
Model R
R
Square
Adjusted R
Square
Std. Error
of the
Estimate
Change Statistics
R Square
Change
F
Change df1 df2
Sig. F
Change
1 .916a .839 .821 .334 .839 46.407 9a 80 .000
36
a. Dependent Variable: Adoption of Mobile banking
b. Predictors: (Constant), worry for compensating in case of error, save transaction cost, mobile banking is
influenced by absolute prices, usage influenced by prices, reduced transaction costs of payments, provide
financial services to the unbanked, cost-effective way to provide banking services to the unbanked, affect
rate of money supply in the economy, able to access funds any time.
Table 4.12: AN0VA of Ec0nomic Fact0rs and Mobile Banking Adoption
Model Sum of
Squares
df Mean
Square
F Sig.
1 Regression 46.683 9 5.187 46.407 .000b
Residual 8.942 80 .112
Total 55.625 89
a. Dependent Variable: Mobile banking adoption
b. Predictors: (Constant), worry for compensating in case of error, save transaction cost, mobile banking
is influenced by absolute prices, usage influenced by prices, reduced transaction costs of payments,
provide financial services to the unbanked, cost-effective way to provide banking services to the
unbanked, affect rate of money supply in the economy, able to access funds any time.
An ANOVA analysis between economic factors and mobile banking adoption at 95%
confidence level revealed that the F critical was 46.407 and the P value was (0.000)
therefore significant; the results are sh0wn in table 4.12.This result therefore shows that
there was a statistically significant difference in the mean between the various variables
of economic factorsthat influence mobile banking adoption.
4.4.3 Coefficient of Economic Factors and Mobile Banking Adoption
A Pearson correlation was done between mobile banking adoptions (dependent variable)
against other economic factors. The results of the regression coefficients, t-statistics,
standard errors of the estimates and p values are shown in table 4.13.
Table 4.13: Coefficient of Economic Factors and Mobile Banking Adoption
Model
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
37
B
Std.
Error Beta
1 (Constant) Mobile banking adoption .262 .151 1.734 .087
Worry on compensating from bank in
case of error
.214 .039 .397 5.544 .000
Save transaction cost -.055 .053 -.084 -1.042 .301
Influenced by absolute prices -.310 .054 -.507 -5.741 .000
Influenced by how a service is priced. .144 .059 .248 2.448 .017
Reduced transaction costs of payments -.103 .067 -.181 -1.552 .125
Provide financial services to the
unbanked.
.076 .055 .129 1.385 .170
Cost-effective way to provide banking
services to the unbanked because there
.267 .078 .446 3.403 .001
Affect rate of money supply .060 .046 .107 1.294 .199
Access funds any time .456 .045 .697 10.197 .000
When mobile banking adoption was predicted on economic factors (Constant p
value=0.087). Worry on compensating from bank in case of error (Beta=.397, p value
=.000), save transaction cost (Beta=-.084, p value=.301), influenced by absolute prices
(Beta=-.507, p value= .000), influenced by how a service is priced (Beta=.248, p value
=.017), reduced transaction costs of payments (Beta=-.181, p value=.125), provide
financial services to the unbanked (Beta=.129, p value= .170), cost-effective way to
provide banking services to the unbanked because there (Beta=.446, p value= .001),
affect rate of money supply (Beta=.107, p value=.199), access funds any time (Beta=.697,
p value=.000).
From the analysis above, influenced by absolute prices, influenced by how a service is
priced, cost-effective way to provide banking services to the unbanked because there, and
access funds any time were significant (P value < 0.05) except the variables; save
38
transaction cost, reduced transaction costs of payments, provide financial services to the
unbanked, and affect rate of money supply.
This result implies that among the economic factors that has resulted in improved mobile
banking uptake at KCB include;absolute prices of the service, influence by how a service
is priced, cost-effectiveness of the services to the unbanked, and access of funds any time.
On the other side, there are areas that the firm need to adjust to improve mobile banking
uptake and this include; save transaction cost, reduced transaction costs of payments,
provide financial services to the unbanked, and affect rate of money supply.
4.5 Effects of Technological Factors onMobile Banking Adoption
The study sought to establish the effect of technological factors on mobile banking
adoptionand the respondents were asked a number of questions that they rated with
Strongly agree being (1) and Strongly Disagree (5).
4.5.1 Descriptive on Technological Factors
To analyze the descriptive statistic most respondents strongly agree that governments can
organize and create good plans to support the development of civilian technology
innovation (1.74), governments play part to improve the economic growth and
development (1.79), respondents would use the electronic banking services for handling
my banking transactions (1.95). Respondents also agree that responsibility must be
determined when financial losses occur in Internet transactions (2.00), losses must be
borne by the bank (2.61). There was uncertainty that electronic banking services may not
perform well and process payment incorrectly (3.21), when transaction error occurs, I
worry that I cannot get compensating from bank (3.37), when bank account incurs fraud
or the hacker invades, I would have potential loss of status in one's social group (3.37) in
Table 4.14.
Table 4.14: Descriptive of Technological Factors on Mobile Banking Adoption
Variable Mean SD
39
Governments play part to improve the economic growth and
development
1.79 1.110
Governments can organize and create good plans to support the
development of civilian technology innovations
1.74 .788
Responsibility must be determined when financial losses occur in
Internet transactions
2.00 1.082
Losses must be borne by the bank 2.61 1.347
When transaction error occurs, I worry that I cannot get compensating
from bank
3.37 1.313
When bank account incurs fraud or the hacker invades, I would have
potential loss of status in one's social group
3.37 1.313
Electronic banking services may not perform well and process
payment incorrectly.
3.21 1.480
I would see myself using the electronic banking services for handling
my banking transactions.
1.95 .949
4.5.2 Regression analysis of Technological Factors on Mobile Banking Adoption
A regression analysis was done between variables of focus strategy and performance as
shown in table 4.15. 0n analysis, the R square value was 0.863 and a p-value 0f (0.000)
was significant. Therefore, 86.3%of the variation in mobile phone adoption was caused
by the variation intechnological factors as highlighted in table 4.15
Table 4.15: Model Summary on Technological Factors on Mobile Banking Adoption
Model R
R
Square
Adjusted
R Square
Std.
Error of
the
Estimate
Change Statistics
R
Square
Change
F
Change df1
df2
Sig F
change
1 .929a .863 .849 .307 .863 63.726 8a 81 .000
a. Dependent Variable: Mobile Banking Adoption
b. Predictors: (Constant),economic growth and development, Govt support technology innovations,
Responsibility when financial losses occur, Losses borne by the bank,I cannot get compensating, When
hacker invades loss of status, Electronic banking services failure, using the electronic banking services
Table 4.16: ANOVA on Technological Factors on Mobile Banking Adoption
Model Sum of
Squares
df Mean
Square
F Sig.
1 Regression 47.999 8 6.000 63.726 .000b
Residual 7.626 81 .094
40
Total 55.625 89
a. Dependent Variable: Mobile Banking Adoption
b. Predictors: (Constant), economic growth and development, Govt support technology innovations,
Responsibility when financial losses occur, Losses borne by the bank, I cannot get compensating, When
hacker invades loss of status, Electronic banking services failure, using the electronic banking services
An ANOVA analysis between technological factors and mobile banking adoption at 95%
confidence level revealed that the F critical was 63.726 and the P value was (0.000)
therefore significant, the results are shown in table 4.16. This result therefore show that
there was a statistically significant difference in the mean between the various variables
of technological factors that influence mobile banking adoption.
4.5.3 Coefficients of variables of Technological Factors on Mobile Banking Adoption
A Pearson correlation was done between mobile banking adoptions (dependent variable)
against other factors of technology.The results of the regression coefficients, t-statistics,
standard errors of the estimates and p values are shown in table 4.17.When mobile
adoption was predicted on technological factors (p value =.004);Government improve the
economic growth and development (Beta =.607, pvalue =000);Governments support the
development of civilian technology innovations (Beta =.-202, p value
=006);Responsibility when financial losses occur in Internet transactions (Beta =.526, p
value =000);Losses must be borne by the bank (Beta =.-283, p value =000); when
transaction error occurs I cannot get compensating from bank (Beta =.199, p value =000);
when bank account incurs fraud I would have potential loss of status (Beta =-.031, p
value =638); electronic banking services may not perform well (Beta =.083, p value
=092); using the electronic banking services for handling my banking transactions (Beta
=-.014, p value =775) as shown by table 4.17.
Table 4.17: Coefficients of Technological Factors on Mobile Banking Adoption
Model
Unstandardized
Coefficients Standardized
Coefficients
t Sig. B
Std.
Error Beta
41
1 (Constant) Mobile banking adoption .597 .199 3.001 .004
Government Improve the economic
growth and development
.421 .061 .607 6.844 .000
Governments support the development
of civilian technology innovations
-.213 .076 -.202 -2.805 .006
Responsibility when financial losses
occur in Internet transactions
.383 .057 .526 6.725 .000
Losses must be borne by the bank -.166 .033 -.283 -5.051 .000
When transaction error occurs I cannot
get compensating from bank
.117 .030 .199 3.836 .000
When bank account incurs fraud I
would have potential loss of status
-.018 .039 -.031 -.472 .638
Electronic banking services may not
perform well
.043 .025 .083 1.704 .092
Using the electronic banking services
for handling my banking transactions.
-.012 .040 -.014 -.287 .775
From the analysis, majority of the variables had a significant positive effect on mobile
banking adoption except the variable; when bank account incurs fraud I would have
potential loss of status (p value=.638), electronic banking services may not perform well
(p value=.092) and I would see myself using the electronic banking services for handling
my banking transactions (p value=.775),
From the findings it is clear that KCB has experienced improved mobile banking
adoption as a result of government improve the economic growth and development,the
bank taking responsibility when financial losses occur in Internet transactions and low
worry that when transaction error occurs clients cannot get compensating from bank.
However, there are areas that needs improvement to fully achieve better performance.
This includeminimizing fraud, system failures and guaranteeing the users that electronic
banking services is capable of handling their banking transactions.
42
4.6 Chapter Summary
This chapter has presented the interpreted results and findings. The first section provided
an analysis of the various demographic data on the respondents. The second section
analysed the findings how cost strategy affect performance. The third section provided
findings on how differentiation strategy affect performance. The fourth section presented
the effects of focus strategy on performance. The next chapter discusses the findings,
conclusions and recommendations.
43
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION
5.1 Introduction
In this chapter, the findings of this study are discussed with regard to the reviewed
literature and conclusions are drawn with recommendations being made at the end. The
chapter has subsections divided into discussion, conclusions, and recommendations. In
addition, recommendationsfor further studies are also highlighted.
5.2 Summary of Findings
The purpose of this study was to determine the factors affecting mobile banking adoption
and usage at Kenya commercial bank Kenya and sought to answer the following research
questions: How does social cultural factors affect mobile banking adoption and usage at
KCB bank? How does economic factors affect mobile banking adoption and usage at
KCB bank? How does technological factors affect mobile banking adoption and usage at
KCB bank?The study utilized a descriptive research design and questionnaires were used
as data collection tool. The target population for the study was 1040 customers at KCB
bank Sarit Centre Branch. Using the sample formula, a sample of 138 respondents was
drawn out of which only 95 responded giving a rate of 69% which was sufficient. The
data was then analyzed using both descriptive and inferential statistics by the aid of SPSS
and the results were presented in tables.
For the analysis of the first objective it was established that most of the respondents
strongly agreed that they have the knowledge to use electronic banking services, ability to
use electronic banking service and they would embrace electronic banking services their
banking needs. In addition, the findings also revealed that the respondents would use
mobile banking to pay utility bills and that the respondents valued others opinion in order
to use electronic banking services. It was also established that learn how to use electronic
banking services did not take time.
For the analysis of the second objective it was established that most respondents strongly
agreed that they are able to access to funds any time they want, and considered M-
banking a cost effective way to provide banking services to the unbanked. In addition, the
findings revealed that various initiatives use mobile phones to provide financial services
44
to the unbanked,it saves transaction cost, reduced transaction costs of payments, and
affected rate of money supply in the economy. There was however uncertainty on
influence of pricingon mobile service usage.
For the analysis of the third objective it was established the governments can organize
and create good plans to support the development of civilian technology innovation and
also do its part to improve the economic growth and development. Most of the
respondents affirmed that they would use the electronic banking services for handling
banking transactions and that responsibility must be determined when financial losses
occur in Internet transactions, while losses must be borne by the bank in case of fraud.
5.3 Discussions
5.3.1 Social Cultural Factors and Mobile banking adoption
The study established that most of the respondents had the knowledge to use electronic
and ability to use electronic banking services. This has been attributed to the individual
character of the adopters. Wejnert (2012) established that characteristics may be relevant
to an individual’s adoption capability. As one of the few studies, Menzel (2010) showed
that certainty and risk-taking characteristic of individual actors affected their acceptance
to novel data and applications. Wejnert (2012), comparatively very little analysis had
investigated the impact of individual characteristics on innovation adoption. However, it
appears that such characteristics may be relevant to an individual’s adoption call. As one
of the few studies, Menzel (2010) showed that certainty and risk-taking characteristic of
individual actors affected their acceptance to novel data and applications. Similarly,
multiple researchers argued that non-public innovativeness and openness absolutely
influenced an individual’s adoption of recent technologies. With the wide adoption of the
web, additional researchers tried to research the impact of the large five temperament
traits on general web adoption and use. For example, extraverts like face-to-face
interaction thereby utilize less time on the web (Landers & Lounsbury 2006), particularly
for on-line social activities like chat rooms (Hamburger and Ben-Artizi 2004).
The findings also revealed that the respondents value people opinions to use electronic
banking services. Riquelme and Rios (2010) established that onsumers typically are
influenced by reference teams to which they do not belong. as an example, an
inspirational cluster is one to that the individual desires to belong relations will
45
powerfully influence customer behavior. The family is the most significant client
shopping for organization in society. Marketers have an interest within the roles and
influence of the husband, wife, and youngsters on the acquisition of various merchandise.
Husband-wife involvement varies wide by product class and by stage within the
purchasing process. Kids may have sturdy influence on family shopping for choices. As
an example, kids as young as six years could influence the family motor vehicle purchase
decision (Riquelme & Rios, 2010).
The findings also revealed that people who are important to the respondents made them
think about using electronic banking services. Simonson and Nowlis, (2011) in their study
noted that individual belongs to several teams –family, clubs, and organizations. The
person’s position in every cluster are often outlined in terms of each role and position. A
job consists of the activities individuals are expected to perform consistent with the
persons around them. Every role carries a status reflective of the general esteem given by
society.
In addition, the research also established that people who influence the account holder’s
decisions thought they should use electronic banking services.Simonson and Nowlis,
(2011) also established that same and they explained that reference teams, like a social
reference cluster, could have an effect on person's behavior. Two competitive influences
have been acknowledged on the connection between subjective norm and behavior:
conformity and dissension. Conformity is that the results of individuals attempting to
adapt to a subjective norm, thereby avoiding criticism and rejection.
There was uncertainty on timetaken to learn electronic banking services and fear that
other people may be able to access personal account, this could be attributed to the
general culture. Previous studies stressed the importance of culture toward a more robust
understanding of knowledge system adoption Al-Gahtani, Hubona, and Wang (2011)
stress the role of culture when transferring information technology applications across
culture, before any technology transfer, it's necessary to check user necessities and
desires. Those desires and demand are heavily influenced by culture. According to
Mohamed (2015)culture may denote the variation between values, beliefs, and motivation
of a diverse cluster Shore and Venkatachalam (1996) expressed that culture reflects
individual core values and beliefs. These values and beliefs are created through childhood
and strengthened throughout their life (Leidner & Kayworth, 2010).
46
5.3.2 Economic Factors and Mobile Banking Adoption
The study revealed that most of the respondents were able to access funds any time they
wanted to (1.63). This was similar to what Clark (2008) study recommended that as a
channel the cell phone can increase the quantity of channels accessible to customers,
accordingly giving buyers all the more ease self-benefit choices by which to get to assets,
managing an account data and make installments. Mobile as a channel conveys
accommodation, promptness, and decision to buyers. Indeed, Barnes and Corbitt (2003);
Scornavacca and Barnes (2004) established that the current advancements in media
communications have empowered the dispatch of new get to strategies for saving money
administrations, one of these is portable managing an account; whereby a client
collaborates with a bank by means of a cell phone, for example, a cell phone or individual
computerized associate.Additionally, Borio, and Zhu (2012) established that fnancial
strategy impacted the supply of cash through the impacts it has on banks' intermediation
movement. Nonetheless, most of the adjustments in cash supply happening in the
economy result from improvements in the way that banks lead their business.
With the change of portable innovations and gadgets, mobile banking has been
considered as a notable framework due to such characteristics of mobile advances as
universality, comfort, and intuitiveness. Mobile installments then again are characterized
as the utilization of a cell phone to lead an installment exchange in which cash or
subsidizes are exchanged from a payer to a collector by means of a middle person, or
specifically without a delegate (Niina Mallat, 2011). Cell phones can be utilized as a part
of an assortment of installment situations, for example, installment for advanced
substance (e.g., ring tones, news, music, or amusements), tickets, stopping expenses and
transport admissions, or to get to electronic installment administrations to pay bills and
solicitations. Installments for physical merchandise are additionally conceivable, both at
distributing and ticketing machines, and at kept an eye on purpose of offer (POS)
terminals (Mallat et al., 2008).
Clark (2008) recommended that as a channel the cell phone can increase the quantity of
channels accessible to customers, accordingly giving buyers all the more ease self-benefit
choices by which to get to assets, managing an account data and make installments.
47
Mobile as a channel conveys accommodation, promptness, and decision to buyers. In any
case, there are an expansive number of various cell phone gadgets and it is a major test
for banks to offer Mobile saving money arrangement on a gadget.
The study established that M-banking is a cost-effective way to provide banking services
to the unbanked (2.16) through provision of financial services (2.26). Similarly, Porteous,
(2011) established that mobile banking is without a doubt compelling on cost and
administers services to the unbanked in light of the fact there is no requirement for
branches physical foundation to help the clients. InfoDEV (2006) research established
that it is just a branchless bank display that has the capacities of taking care of restricted
bank dealings through the cell phone.Financial strategy impacts the supply of cash
through the impacts it has on banks' intermediation movement. Nonetheless, most of the
adjustments in cash supply happening in the economy result from improvements in the
way that banks lead their business (Borio, &Zhu, 2012). All the more particularly, a bank
is a foundation, the center operations of which comprise of conceding advances and
providing stores to people in general. Through the duality of loaning and store issuance,
banks satisfy various capacities: they offer liquidity and installment administrations,
embrace the screening, and observing of borrowers' reliability, redistribute hazards and
change resource attributes (Greenbaum, Thakor, & Boot, 2015).
The respondents agreed that mobile banking could save me transaction cost (2.58), and
Karjaluoto (2012) established that Mobile banking is a critical viewpoint since the
exchange expenses of installments are significantly diminished when there is an
electronically available store of significant worth in most administrative services. On the
other hand,Karjaluoto (2002); Rugimbana (1995) found that there is endless market
potential for mobile managing an account because of its dependably on usefulness and the
alternative to do saving money practically whenever and anyplace. The study established
that mobile banking affect rate of money supply in the economy (2.84) and Bruno and
Shin (2013) illustrated that bank transaction is one vital determinant of cash and credit
advancements, both of a repeating and of a more relentless nature.
5.3.3 Effects of Technology on Mobile Banking Adoption
The study established that the Governments can organize and create good plans to support
the development of civilian technology innovations (1.74), as well as improve the
economic growth and development (1.79). Bozeman (2000) in his study proposed a few
48
commitments that can be created by governments to empower the effective selection of
ICT developments. Firstly, governments can include college innovative work offices in
the program of urging people and associations to embrace ICT advancements. Also,
governments can compose and make great arrangements to bolster the improvement of
nonmilitary personnel innovation advancements.Bozeman (2000) suggests concentrated
and nonstop projects from both government and college research centers to create
innovation based financial matters. Examine execution, providing connected research and
innovation to industry and creating arrangements, are exercises that can be produced by
government to bolster little and medium endeavors.
The findings revealed that most respondents thought that responsibility must be
determined when financial losses occur in internet transactions (2.00) and losses must be
borne by the bank (2.61). Thomas, Wolf, Allan and Nadra (2008) established that
specified risk is a key lawful issue. Obligation must be resolved when money related
misfortunes happen in Internet exchanges, and misfortunes must be borne by the bank,
the client, or even other related gatherings in the Internet banking framework, for
example, the Internet specialist organization. However, Sir luck et al, (2007) noted that
banks ordinarily use internet managing an account contracts or concurrences with
constraints of their obligation, taking note of that the bank is not in charge of any
misfortune brought about by the Internet saving money administration or client utilization
of the administration
There was uncertainity on whether electronic banking services may not perform well and
process payment incorrectly ( 3.21) therefore there is a need for the bank to guarantee
that as showed by Chellappa (2008) the security affirmations offered by banks and which
customers predict should include: Careful reference to their endorsed Web goals in their
creations; check by method for the use of a mechanized statement; on-screen and mouse-
worked keypads for tricky information; virus protection; firewall use and communicated
cutoff focuses to customer hazard for unapproved use of access to codes.
There was also uncertainty on the customer side on whether when transaction error
occurs, they would get compensating from bank (3.37),Shu-Hsun and Ying-Yin (2008)
agree with the statement and intheir findings they established that from a client
perspective, the issue of trust can be ensured by having the going with trust parts
embedded inside the trust appear. Protection which is the method through which
49
customers are satisfied that their own particular information is sufficiently spared by the
component assembling the information). According to Chellappa (2008), the lion's share
of electronic exchange trades are brought out through Web programs that are related with
shipper goals that along these lines interface with some kind of budgetary association.
Like any strong information structure, the move when driving such a trade should be
reliable and direct for the customer yet feedback ought to be demonstrated remembering
the true objective to make an opinion control.
5.4 Conclusion
5.4.1 Social Cultural Factors Affect Mobile Banking Adoption
For the analysis, it can be concluded that most of the account holders possess the
knowledgeof how to use electronic banking services, and most of them are willing to
embrace electronic banking services for their banking needs. Among the services mostly
preferred is payment of utility bills. The study also conclude that the uptake of the service
is dependent on the group influences.
5.4.2 Economic Factors Affect Mobile Banking Adoption
For the data analysis done with regard to the this objective it can be concluded that use of
mobile banking has enabled customers to access to funds any time they want, and they
also consider it a cost effective way to provide banking services to the unbanked. It also
enables the users to save on transaction cost.
5.4.3 Technological Factors Affect Mobile Banking Adoption
The study concludes that governments can organize and create good plans to support the
development of civilian technology innovation and also do its part to improve the
economic growth and development. Most of the respondents affirmed that they would use
the electronic banking services for handling banking transactions and that responsibility
must be determined when financial losses occur in Internet transactions, while losses
must be borne by the bank in case of fraud.
5.5 Recommendation
5.5.1 Recommendations for improvement
50
5.5.1.1Social Cultural Factors and Mobile Banking Adoption
Since most of the account holders possess the knowledge of how to use electronic
banking services, banks should strive to educate the account holders on the benefits that
they would incur from taking up the services. The bank also need to offer the best
services to the current users in order for them to convince their peers, friends and family
members to take up the service.
5.5.1.2 Economic Factors Affect Mobile Banking Adoption
Customers need to be encouraged to use of mobile banking as it would have enabledthem
to access their funds any time they want, and it is also a cost-effective way to provide
banking services to the unbanked. The bank needs to ensure that the transaction costs are
lower than over the counter cost so as to convince more clients to take up the service.
5.4.3 Technological Factors Affect Mobile Banking Adoption
The study recommends that the governments needs to organize and create good plans to
support the development of civilian technology innovation and also do its part to improve
the economic growth and development. On issues of security the bank needs to seek ways
to minimize fraud, system failures and guaranteeing the users that electronic banking
services can handle their banking transactions.
5.5.2 Recommendations for Further Studies
This study looked at the factors affecting mobile banking adoption and usage at KCB.
The study recommends that similar studies be undertaken in other banks so as to be able
to compare the findings and make generalized conclusions. Also, there is a need to do a
research to establish the impact that mobile adoption has had on the profitability of
financial institutions.
51
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APPENDIX I: INTRODUCTION LETTER
Albertina Sachombe
P.O. BOX 14634 - 00800
Nairobi, Kenya
Email: sachombe@gmail.com
December 9th, 2016
Dear Respondent,
RE: REQUEST FOR PARTICIPATION IN RESEARCH WORK
I am a Masters student at United States International University pursuing an (MBA) with
a concentration inFinance. In partial fulfilment of the requirement for the degree, I am
conducting a research on “factors affecting adoption of mobile banking At KCB”
I shall be grateful if you kindly complete the enclosed questionnaire to be used to collect
the data applicable to my research. Any contributions areessential for the achievement of
this research. The results will beused only for academic purposes.In case of any queries
during completing the enclosed questionnaire, contact me at any time via my contact
furnished at the top of this letter
Thank you in advance,
Yours Sincerely,
67
Albertina Sachombe
APPENDIXII: QUESTIONNAIRE
To determine the factors affecting mobile banking adoption and usage: a case of
KCB Bank Kenya
This questionnaire aids to assists in data collection for academic purpose. The research
intends to give an analysis of impact of social cultural factors, economic factors and
technological factors on mobile banking adoption and usage at KCB bank. All
information obtained, was handled with high level of confidentiality. Do not incorporate
identification or names in the questionnaire.
Please answer every question as in outlined by using either a cross(x) or (ticking) in the
option that applies.
SECTION A: DEMOGRAPHIC FACTORS
Please tick the most appropriate answer (√ )
1. Age
Below 25 yrs
25-30yrs
30-39yrs
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40 yrs and Above
2. Gender Male Female
3. What is your highest education level?
Certificate Diploma Degree Masters PHD
5. How long have been a customer in this organization?
Less than 1 year 2-4 years 5-9 years above 10 years
SECTION B: SOCIAL CULTURAL EFFECT OF MOBILE BANKING ADOPTION
AND USAGE AT KCB BANK
Please indicate your opinion as per the level of disagreement or agreement with the
outline statement using 1 to 5 scale guideline. 1= Strongly Agree 2- Agree, 3= Neutral,
4 =Disagree, 5= Strongly Disagree
PERSONAL BEHAVIOR
1 2 3 4 5
1 I have the resources to use electronic banking services
2 I have the knowledge to use electronic banking services
3 I have the ability to use electronic banking services
4 It would take me lots of time to learn how to use
electronic banking services.
GROUP INFLUENCE
5 I am worried to use electronic banking services because
other people may be able to access my account
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6 People who are important to make think that I should use
electronic banking services.
7 People whose opinion I value think I should use
electronic banking services.
8 People who influence my decisions think that I should
use electronic banking services
CULTURAL FACTORS
9 It would take me lots of time to learn how to use electronic
banking services.
10 I would use electronic banking services for my banking
needs.
11 I would use mobile banking to pay my utility bills
.
12. What other social culturalfactors affect mobile banking adoption
SECTION C: ECONOMIC FACTORS AFFECT MOBILE BANKING ADOPTION
AND USAGE AT KCB BANK
COST OF MOBILE BANKING
When transaction error occurs, I worry that I cannot get
compensating from bank.
Mobile banking could save me transaction cost
customer usage of mobile banking is influenced by
absolute prices
Customer usage of mobile banking is influenced by how
a service is priced.
Mobile banking is an important aspect since the
transaction costs of payments are greatly reduced when
there is an electronically accessible
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FINANCIAL SERVICES OFFERED
Various initiatives use mobile phones to provide financial
services to the unbanked.
M-banking is a cost effective way to provide banking
services to the unbanked because there
MONEY SUPPLY
Mobile banking affect rate of money supply in the
economy
I am able to access my funds any time I want to
20. Are there any that economic factors affect mobile banking
SECTION D: TECHNOLOGICAL FACTORS AFFECT MOBILE BANKING
ADOPTION AND USAGE AT KCB BANK
GOVERNMENT INTERVENTION
Governments can play a key part in assisting to improve
the economic growth and development of the country
governments can organize and create good plans to
support the development of civilian technology
innovations
Responsibility must be determined when financial losses
occur in Internet transactions
and losses must be borne by the bank
SECURITY ISSUES
When transaction error occurs, I worry that I cannot get
compensating from bank
When bank account incurs fraud or the hacker invades, I
71
would have potential loss of status in one's social group
EASE OF USE
Electronic banking services may not perform well and
process payment incorrectly.
I would see myself using the electronic banking services
for handling my banking transactions.
17.What should be done to make the process better?
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