mobile banking in malaysia

INTENTION TO USE MOBILE

BANKING IN MALAYSIA: ASSESSING KEY

DETERMINANTS

BY

NEBIL ABDUREZAK AHMED

A research project submitted in partial fulfillment

Of the requirements for the degree of

BACHELOR OF BUSINESS ADMINISTRATION (HONS) B.B.A. (Hons) BANKING & FINANCE

FACULTY OF BUSINESS AND LAW

MULTIMEDIA UNIVERSITY

JANUARY 2011

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Chapter 1

Introduction

1.1 Research background

“The rapid technological advances in mobile-based technologies have created

opportunities for new and innovative mobile services. Some of the most promising,

while still marginally adopted, is mobile banking. Many commercial banks in Malaysia

have tried to introduce mobile banking systems to improve their operations and reduce

costs”, (Amin et al., 2008). Some say that internet is considered the greatest most

effective device innovated by mankind since the discovery of the wheel. Due to the

consistent use of the internet, it has brought about ideas such as implementing mobile

devices in areas like banking, and that is where they come up with Mobile Banking or m-

banking in short. “The mobile banking environments are getting more and more

implicated gradually, New and innovative ideas in mobile banking can lead to useful and

effective approaches and models in business transactions, especially in requirements

elicitation, service provider’s recognition, negotiation and agreements” (Soroornejad and

kharazian, 2010). In this innovative community, mobile devices can access internet from

various locations allowing the users to participate in typical internet-mobile based

activities which also includes Mobile Banking. Watson et al., (2002) stated that mobile

services on consumers because they allow ubiquitous and universal access to information

and services, in addition to the possibility of accessing a unique and personalized

exchange of data. As a result, the use of mobile devices has become a part of most

people’s daily life, and also a technique that helps to keep in touch with the rest of the

world, plus to communicate and network (Shi Yu, 2009).

Mobile banking is a developing mobile technique used in the commercial field,

which has merged information technology and commerce applications together. Rather

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than visiting the traditional bank branch for personal transactions, after mobile banking

was introduced to the world, consumers were able to enjoy special services 24 hours a

day, in a more convenient and sufficient fashion.

Mattila (2003) was interested in investigating the factors that influenced one’s

decision to use mobile phone for banking transactions. Therefore, Mattila (2003)

discovered that “pay bills cheaper”, “have faster data transmission rate” and

“authenticate with mobile phone to Internet bank” were the factors which influenced

individuals to use mobile phones for their banking transactions.

Porteous and Wishart (2006) stated that mobile banking is considered one of the

newest approaches to the stipulation of financial services through ICT, which was likely

possible by the widespread adoption of mobile phones even in low income countries.

Some of the features that mobile banking has covered were fund transfer and bill

payment where customers have the complete freedom to maintain their account via

mobile (Anyasi and Otubu, 2009). The results banking industry have experienced due to

the revolution are minimum balance alerts, account statement enquiry, cheque status

enquiry, account balance enquiry, bill payment alerts and cheque book request (Anyasi

and Otubu, 2009).

Regardless of all the attempts aimed at developing a sufficient and satisfying

mobile banking, and despite its availability, this system can be easily unnoticed. Mobile

banking is still considered new, which leaves Malaysia with a great deal of room for

development. Therefore, there is a need to understand bank customers’ reaction towards

mobile banking and to observe the factors affecting their intentions to use mobile

banking, (Amin et al, 2008).

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1.2 Problem Statement

Regardless to the facts that there has been a lot of research papers conducted on the

topic of Mobile banking abroad, unfortunately only few studies were carried out in

Malaysia. This is probably due to the fact that Mobile banking is to some extent new in

Malaysia. Therefore, the lack of information on this topic resulted in insufficient

knowledge and literature on the key determinants in Mobile banking adoption within

Malaysia. Evidences and conclusions that have been conducted abroad can be somehow

useful but it might not be consistent and accurate in the perspective of mobile banking in

Malaysia. Due to the reasons listed above, more research on this topic should be covered

to validate whether the results from these studies would be reliable to Malaysia.

Besides that, there are also corresponding facts when comparing when comparing

this study with previous studies. For example, Amin et al., (2008) stated that when

deciding whether to accept mobile banking or not, perceived usefulness and perceived

ease of use were to found to be significant factors.

In previous works, several studies supported valid arguments on perceived

credibility. For instance, Wang, et al., (2003) and Luarn and Lin (2005) stated that the

intention to use mobile banking was influenced by security and privacy associated with

mobile banking environment. Mattila (2004) pointed out that the adoption of mobile

banking services were influenced with factors such as data transmission, costs, and

authentication of mobile phone to internet bank, likelihood to conduct banking truly

regardless of time, place, and curiosity towards using the services.

Cheong and Park (2005) indicated in their studies that the success of mobile internet

depends on literally understanding the concerns of customers and classifying the factors

that enhance the use of mobile banking. Laforet and Xiaoyan (2005) on the other hand

investigated the market status for online/mobile banking in China, and with the current

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and anticipated high growth of Chinese electronic banking, it likely has the potential to

develop into a world-scale internet economy.

Laforet and Xiaoyan (2005) indicated that the issue of security was found to be

the most significant factor that induced the Chinese consumers to adopt online banking.

Jayawardhena & Foley (2000) indicated that ensuring security and confidentiality are the

basic prerequisites before any banking activity relating sensitive data can take place.

This paper attempted to assist improvement of mobile banking services through

investigating the customer adoption. In addition, this paper discovered the relationship

between several variables such as perceived usefulness, perceived ease of use,

compatibility, perceived self-efficacy, subjective norms, perceived credibility, perceived

risk and user predisposition, and the adoption of mobile banking. Models such as TAM

and Extended TAM were used and adopted to help classify the variables that will

influence users’ intention to adopt mobile banking.

1.3 Research Questions

1) What are the key factors that influence the intention to use mobile banking

services in Malaysia?

2) What are the opportunities and challenges in mobile banking?

3) How is it best to evaluate a mobile banking application or service in terms of

its adoptability?

1.4 Research Objectives

1) To examine the factors that influences the intention to use of mobile banking

services in Malaysia.

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2) To examine the opportunities and challenges in mobile banking.

3) To evaluate mobile banking service in terms of its adoptability

1.5 Significance of Research

Since the topic of Mobile Banking is relatively new in Malaysia, there are a lot of

gaps which needs to be covered. This paper work is an addition to the limited number of

current literatures on the topic of Mobile Banking in Malaysia. A theoretical model was

presented and also was implemented in order to classify the key determinants of users’

adoption of Mobile Banking. The central aim of this paper was to identify the

determinants of Mobile Banking adoption among the citizens in Malaysia and also aims

to fill the gaps between previous researches that were conducted in Malaysia.

This research can be handy for several parties. Since there are insufficient

previous paper works regarding the factors that influence the adoption of Mobile

Banking in Malaysia, future researchers can use this study as a reference to their work.

Governing bodies can also use this study in order to stimulate the growth of Mobile

Banking. By identifying the factors or determinants, the governing bodies will then have

the advantage of a transparent picture on the scenario Mobile Banking adoption in

Malaysia.

1.6 Scope of the research

The scope of this research includes students of Multimedia University from the

Faculty of Engineering, Faculty of Information Science and Technology and students

from Faculty of Business. The group that will be focused on will be the mobile

subscribers, age between 20 -50.

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The scope also included examining the factors that influence the users’ choice

whether or not to adapt the usage of Mobile banking in their daily lives. The study also

took a glance on various definitions of mobile banking and its history and future in

Malaysia.

1.7 Definition of terms

In this study, the term Mobile Banking is defined as, “Mobile banking (m-banking)

involves the use of a mobile phone or another mobile device to undertake financial

transactions linked to a client’s account. M-banking is one of the newest approaches to

the provision of financial services through ICT, made possible by the widespread

adoption of mobile phones even in low income countries, (Porteous et al., 2006).

The term “internet banking” is defined as; “Internet banking” refers to systems that

enable bank customers to access accounts and general information on bank products and

services through a personal computer (PC) or other intelligent device” (Comptroller’s

Handbook,1999).

1.8 Structure of the Project

The first phase of this research consisted of three chapters, which contains data

regarding the topic. The three chapters were divided into Introduction, Literature review

and the Research Methodology.

Chapter one, was the introduction chapter. It briefly covered the topic of this

research, i.e. Mobile banking or m-banking. This chapter began with the introduction,

which consisted of brief but sufficient information about m-banking. Chapter one also

clarified the problem statement and the research objectives and what are the things need

to be done to achieve them. Significance of research and the scope of the research were

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also covered in this very chapter. Finally, this chapter was concluded with a summary

which explained chapter one in short.

Chapter two was the Literature review. This chapter contained literature reviews from

previous studies conducted related to the topic (m-banking). This chapter started with a

brief introduction about mobile banking. Then it covered a vast amount of data or

literature on mobile banking. Definitions of mobile banking from previous works were

cited in this chapter, not to forget the history and the evolution of mobile banking. On the

other hand, prior researches on mobile banking adoption in USA, Europe and Malaysia

were also covered in this chapter. Models such as Technology Acceptance Model (TAM)

and Extended TAM were elaborated in this chapter which therefore was adopted and

enhanced in this study.

Chapter three covered the Research Methodology, which provided a specified

designation on the instruments used in the data mining process. The conceptual

framework was also covered in this chapter, how the independent variables influence

dependent variables and the suggested hypotheses. Besides that, the questionnaire

design, measurement of the variables, data collection method, data resources, sample

size & population size, units of analysis and data analysis techniques were all covered in

this chapter.

1.9 Chapter Summary

Chapter one provides a brief introduction about mobile banking. It states the scope of

the study which includes students of Multimedia University. This chapter also gives us a

collection of key attributes correlated with the research topic and presents a prelude idea

about our topic. It also explains the course of this research and what is expected from it.

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Chapter 2

Literature review

2.1 Introduction

Financial service is experiencing a period of unprecedented change- new entrants,

new product, downsizing, mergers and acquisitions, in addition to the new delivery

channel: the internet (Birch and Young, 1997). Despite all the millions of dollars that

have been spent on building internet banking system, studies and reports have indicated

that potential users may not use the system in spite of their availability. This points out

the need for further research to identify the factors that determine the acceptance of

Internet banking by the users. (Wang et al., 2003). In this chapter, previous researches

that have been conducted about mobile banking will be analyzed and discussed. Various

definitions and opposing definitions will be discussed thoroughly. In addition, the

background information about mobile banking will be discussed in this chapter. Besides

that, various reasons why consumers choose to adopt mobile banking will be discussed.

The position of mobile banking in other countries plus Malaysia will also be looked at in

this chapter. Moreover, the essential factors that influence mobile banking acceptance

will also be talked about.

2.2 Definition of mobile banking

There is a variety of different explanation for mobile banking; this might be due to

the fact that mobile banking is relatively new. Mwaura (2009) defined M-banking as “the

provision and availment of banking-and financial services with the help of mobile

telecommunication devices. The scope of offered services may include facilities to

conduct bank and stock market transactions, to administer accounts and to access

customised information”. According to Porteous and Wishart (2006), mobile banking is

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“Mobile banking (m-banking) involves the use of a mobile phone or another mobile

device to undertake financial transactions linked to a client’s account. M-banking is one

of the newest approaches to the provision of financial services through ICT, made

possible by the widespread adoption of mobile phones even in low income countries.

Wilcox (2010) defines mobile banking as “the provision of banking services to

customers on their mobile devices”: specifically we mean in the vast majority of

instances “the operation of bank current and deposit or savings accounts”.

Weber and Darbellay (2010), describes the term as “Mobile banking activities fall within

the scope of the banking business, and oversight is provided by the competent financial

market authority for prudential supervision, if the definition of banking activities

encompasses all relevant mobile banking activities.

The features of mobile banking and electronic banking are almost identical due to

the fact that the services provided by both ends are carried out electronically by

computer- intervened networks, which are reachable using telecommunication networks.

The only difference is that mobile electronic devices are the telecommunication

networks used for mobile banking. In Korea, a survey was conducted by Yong and

Gorman (2002), and it was stated that there was relatively a 400 percent increase in the

level of mobile banking service use in 15 months, as revealed in figure 1.1:

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Table 2.2 Use of mobile banking services (unit: cases)

Service December 2000 December 2001 December 2002

Inquiry 200,552 691,883 817,111

EFT 1,746 18,319 25,241

Total 202,298 710,202 842,352

Change -- 251.1 18.6

Note: Transaction cases during the month indicated

Source: The Bank of Korea (2002)

Figure 2.2: use of mobile banking in Korea

Source: Journal of online Information Review, Yong and Gorman (2002)

A recent research in Ireland has established that approximately 1% of

consumers use mobile banking services while almost 90% of their population own

mobile phones (Foley, 2005). The use of mobile banking basically focuses on the basic

functions provided by the mobile banking service rather than the complex ones.

A survey question was asked by a recent Forrester research: “What mobile banking

activities would you mostly be interested in?” as seen in Figure 1.2 (Foley, 2005).

Figure 2.2 mobile banking activities

Source: ireach, www.ireach.ie

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http://www.ireach.ie/

As shown in figure 1.2, the majority of consumers did not use mobile banking at

all. Those who considered using the service used it only for simple functions such as

checking account balances. Complicated functions of mobile banking have not been

reflected on (Foley, 2005).

2.3 Evolution of mobile technology

The first radio telephone was discovered in US at the late 1940s and the main

reason behind that was to connect mobile users in vehicles to the public network. In the

1960s, a new system called Improved Mobile Telephone Service (IMTS) was initiated

by Bell system (Take, 2010). For an easier and more adequate explanation of mobile

technology, the innovation has been simplified and categorized into 4 groups of

generations. Each one of these generations is an advancement or improvement of the

previous generation. These generations are categorized as, first generation (1G), second

generation (2G) and (2.5G), third generation (3G), and finally the fourth generation (4G).

Ashiho (2003) stated that the first generation of mobile technology or 1G had only

voice facility as the main feature and that the mobile phones were based on the analogue

system. During the 1970s, 1G analog system for mobile communications saw two

significant developments: the invention of the microprocessor and digitization of the

control link between the mobile phone and the cell site (S. Take, 2010). In addition to

that, the semi-conductor technology and microprocessors made mobile systems smaller,

lighter, and more sophisticated a reality. The well known among first generation systems

were advanced mobile phone system (AMPS), Nordic mobile telephone (NMT), and

total access communication system (TACS). Besides that, since the introduction of 1G

phones to the world, the mobile market experienced an annual growth rate of 30 to 50

per cent, subscribers rising to nearly 20 million by 1990 (Ashiho, 2003).

In Europe in the early 1990s, 2G phones using global system for mobile

communications (GSM) were used. Ashiho (2003) mentioned that the motivation behind

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developing 2G cellular systems was the need to improve transmission quality, system

capacity, and coverage. Take (2010) stated that “the new system (2G) provided better

quality and higher capacity at lower cost to customers”. GSM was also the first

commercially operated digital cellular system which is based on TDMA (Take, 2010).

GSM was also considered as the most successful family of cellular standards, which

includes GSM900, GSM-railway or (GSM-R), GSM1800 (Ashiho, 2010). The GSM has

also the ability to operate as dual-band or tri-band phones, as they are adaptable to the

local frequency system in the region the user travels through. (The Mobile Phone

Directory. 2009). Just like 1G, the main transmission that controls the airways is speech

transmission, but it has been mentioned that the demand for fax, short message, and data

transmission is growing rapidly (Ashiho, 2003).

Ashiho (2003) adds that 3G technology adjoined multimedia facilities to 2G

phones by allowing applications such as video, audio, and graphics. Take (2010)

mentioned that “ITU’s IMT-2000 global standard for 3G has opened the way to enabling

innovative applications and services (e.g. multimedia entertainment, infotainment and

location-based services, among others)”. Hill (2010) stated that one of the main purposes

behind the development of 3G was to obtain a single network standard rather than

different types of network standards, which was lately adopted in Europe, U.S. and other

areas. A 3G cellular device known as UMTS (Universal Mobile Telecommunications

System) or IMT-2000 appeared to maintain higher data rates and open the gate to

internet style applications (Hill. 2010).

Ashiho (2003) cited that 4G mobile communications will have transmission rates

reaching up to 20 Mbps. Other 4G applications include high-performance streaming of

multimedia content based on agent technology and scaleable media coding methods. Hill

2010, mentioned that by the year 2010, “4G will enable 3D virtual reality; imagine

personal video avatars and the ability to feel as if you are present at an event when

actually you are not. People, places and objects will be able to interact as the cyber and

real-world blend.”

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Table 2.3 Standards used in different Generations of Mobile Technologies

1G 2G 3G

. Paging systems

. Cordless telephone

(CTO, CTI)

. Cordless telephone cell

. Private mobile radio

. Cellular systems

(NMT, AMPS, etc)

. Mobile satellite

systems

(INMARSAT)

. Paging systems

. Cordless telephone (DECT,

PACS)

. WLL

. Private mobile radio (TETRA)

. Cellular systems (GSM, D-

AMPS, PDC, IS-95)

. Mobile satellite systems

(IRIDIUM, ICO,

GLOBALSTAR)

. Single standard under

IMT-2000,

UMTS, MC-

CDMA, TD-

SCDMA

Source:

ASHIHO, L. (2003). Mobile Technology: Evolution from 1G to 4G.

2.4 Mobile Banking in Europe

The adoption of mobile banking ought to rapidly increase in major European

markets. The mobile phone delivery channel symbolizes a challenge for the European

banking industry, permitting institutions to distinguish themselves from rivalries, reduce

costs, and develop customer loyalty. The adoption of mobile banking should increase

rapidly in major European markets over the next few years, from an average of 6% today

to 25% of the Spanish, French, Italian, and British markets by 2010. Regardless,

significant barriers still remains, such as general lack of awareness, technological issues,

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customers’ perception of security, and more importantly, the cost of mobile internet are

major obstacles to mass market mobile banking adoption. If mobile Internet usage

increases, we can expect a large number of users to interact with their banks via their

mobile phones as they currently do online.

2.4 Adoption of Internet Banking and Mobile Banking in Western Europe

European banks have predicted the termination of adoption barriers and have

already launched various mobile banking services using mostly the WAP and SMS

technologies. In UK and Germany only few downloadable applications have been

counted successful. French, Spanish and Italian banks are currently offering a wider

range of mobile services. Nevertheless, there are still many differences between

countries regarding the number and type of mobile banking services offered. Information

and SMS services are the most common at the European level.

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2.5 Mobile banking in Malaysia

Previously, SMS banking was only available at Bank Islam Malaysia Berhad

(BIMB) but now this banking facility is available at most commercial banks in Malaysia.

Lately, Bank Simpanan Nasional (BSN) offered SMS banking to its customers for the

purpose of account balance query, bill payment and more. SMS/Mobile banking was first

introduced in 2004 in Malaysia. Ever since, SMS banking has become an interesting

topic of research, not only in Malaysia but also in other countries (Mattila, 2003;

Kleijnen et al., 2004; Laforet and Li, 2005). Mobile banking is still considered new,

leaving a great deal of room for development in Malaysia. Therefore, there is a need to

understand bank customers’ acceptance of mobile banking and to observe the

determinants affecting their intention to use mobile banking. This type of information

can help commercial banks including BIMB in building of mobile banking that the

customers favor to use, therefore assist them to attract potential users to use the system.

Due to the fierce competition in the banking industry in Malaysia, hence each bank

out to be creative and innovative in order to be competitive enough to stay in the game.

One of the value added services that the commercial banks have considered is mobile

banking or SMS banking. Prior studies have stated the need of mobile banking services

in the society (for example, Amin et al., 2006; Luarn and Lin, 2005; Mattila, 2004).

Previous studies also assisted to lay an understanding on “why mobile banking is

important”? In essence, there were three key determinants. Firstly, mobile banking offers

a new opportunity to banks to extend their services to their customers and therefore

improve their competitiveness (Kohli, 2004). Secondly, mobile banking is considered to

be one of the most value-added and significant mobile services (Datamonitor 2000 as

cited in Lee, et al., 2003). Thirdly, mobile banking offers an interactive banking

transaction (Mattila, 2004). A study conducted in Bank Islam Malaysia Berhad (BIMB)

came up with solutions that would help in improving the adoption of mobile banking in

their respective bank and in Malaysia in general. It was suggested that the bank could

organize training courses for mobile banking, and that it should be available at all the

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branches in Malaysia. The study also discovered that the amount of information on

mobile banking is an influential factor that would affect an individual’s intention to use

mobile banking. Therefore, it is believed that sufficient information on mobile banking

will have a positive impact on the customers. A survey by the Malaysian

Communications and Multimedia Commission exposed that the penetration rate for

mobile users in the country for the second quarter was about 90% -- double the number

of internet penetration (Dhesi, 2008). Dhesi (2008) also states that according to the

survey, the high penetration rate confirmed that mobile phone networks had become an

increasingly popular channel for Malaysians to carry out a plethora of activities beyond

just voice communication and text messaging. Industry players and analysts coincided

that there was a significant level of awareness and usage of mobile phones beyond just as

a communication tool and, therefore divines well as a potential electronic banking

channel. The advantage that mobile banking has over other banking channels is that it

allows customers to perform their banking activities anytime and anywhere.

Standard Chartered Bank Malaysia Bhd (StanChart) country head of consumer

banking Ho Toon Bah informed StarBiz: “StanChart was the first bank in April to offer

smartphone technology mobile banking in the country, underscoring our innovative

approach in leveraging technology to bring new products and services to customers.

“Our customers have embraced this new channel of banking at a rapid pace. Almost

one-third of our Internet banking customers have signed up for mobile banking and we

are confident that this base will grow rapidly as we continue to enhance the range of

services and transactions available on this platform.”

According to Ho, StanChart was looking forward at how the mobile channel could

serve and add convenience to its corporate clients. He mentioned that the group was

developing prototypes of new service models and would quickly release them into the

market, rather than waiting for years to come up with a fool-proof model before rolling it

out.

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Citibank Bhd head of consumer e-business Roy Heong said that mobile banking was

a key growth strategy for both the bank and the group globally. “We are looking into

extending account information and bill payments to a bigger base using text messaging.

“We will also target customers who are looking for more functionality via a J2ME (Java

Platform Micro Edition) application on Java-enabled devices and leveraging on the third-

generation (3G) and General Packet Radio Service infrastructure. “Importantly, the

initiatives proposed must fit into our strategy to ensure high relevance and best-in-class

experience for our customers,’’ Heong added.

To improve its mobile banking channel, OCBC Bank (M) Bhd head of consumer

financial services Charles Sik said the bank’s target now was to promote the service to

its existing customers. “This way, we believe, those who have been a little hesitant in the

beginning will appreciate more quickly why mobile banking really does add depth to the

idea of convenience,” Sik said.

CIMB Bank Bhd last month mentioned that it expected about 1.3 million existing

CIMB Clicks users and new customers to use its newly-launched mobile banking

service. Named “CIMB Clicks Mobile Banking”, it is considered the first to have

internet banking features and capabilities, compared with other mobile banking services

which use SMS to make transactions. Although there are challenges and issues facing

mobile banking, its leverage is huge judging from the phenomenal growth and usage of

mobile phones.

2.5.1 Malaysian Communications and Multimedia Commissions

The Malaysian Communications and Multimedia Commission is the regulator for

congregating communications and multimedia industry based on the powers presented

for in the Malaysian Communications and Multimedia Commission Act (1998) and the

Communications and Multimedia Act (1998). Pursuant to these Acts, the role of the

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Malaysian Communications and Multimedia Commission is to execute and promote the

Government’s national policy objectives for the communications and multimedia sector.

In 2001 MCMC’s role was added to monitor postal services. In addition, MCMC also

acquired the role as a Certifying Agency under the Digital Signatures Act. The key roles

of the MCMC’s in the telecommunications sector are:

Technical regulation, including allocation of frequency spectrum, telephone numbers and

electronic addresses;

Economic regulation includes promotion of competition and prohibition of anti-

competitive conduct. It also includes licensing, enforcement of license conditions for

network and application provider, in addition to ensuring compliance to rules and

performance/service quality.

Social regulation including content development and regulation.

Consumer protection, emphasizing empowerment of consumers and ensuring adequate

protection measures in areas such as dispute resolution, service affordability and

availability.

In Malaysia, the MCMC are the body responsible for regulating the communications

industry, issue licenses and to implement the communications and multimedia laws (MCMC,

n.d). The licensing system allows a licensee to take on market specific activities. for this

reason, it is possible for advancement for Applications Service Providers to come up with

newer and more proficient usage of the Network Structure. There are four categories of

licensable activities as stated on the MCMC’s website.

1. Network Facilities Providers – Owners of facilities like satellite earth stations,

broadband fibre optic cables, telecommunications lines and exchanges,

radiocommunications transmission equipment, broadcasting transmission towers and

equipment and mobile communications base stations. These are the fundamental

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building block of convergence model upon which network, applications and content

services are provided.

2. Network Services Providers – Provide the basic connectivity and bandwidth to support

a diversity of applications. Network services permit connectivity or transport between

different networks. A network service provider is distinctively also the owner of the

network facilities. Nevertheless, a connectivity service may be offered by a person using

network facilities owned by another.

3. Applications Service Providers – Provide specific functions like voice services, data

services, content-based services, electronic commerce and other transmission services.

Applications services are essentially the functions which are delivered to end-users.

4. Content Applications Service Providers – Special subset of applications service

providers including traditional broadcast services and newer services such as online

publishing and information services.

2.5.2 MyICMS 886 Blueprint

The development and widespread usage of Information Communication

Technology ICT are central to the realization of vision 2020 of a knowledge based

economy. The ICT industry is very important in consideration to the growth of the nation

not only because of the revenue and investments which it brings in, but also because it

serves as an important element in the manufacturing process of other goods and services.

Malaysia has been ranked globally, as the third most favored location for outsourcing of

business processes. Besides that, the ICT in a country is often seen and defined as the

competing power of the country. Highlighting those significant facts, the Minister of

Energy, Water and Communications launched MyICMS 886 which is the blueprint for

the communications and multimedia for 2006 through 2010. This blueprint presents an

inclusive strategy that addresses the core characteristics of the industry.

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The Malaysian Information, Communications and Multimedia Services strategy

incorporates eight (8) services, eight (8) Infrastructures and six (6) Growth Areas.

According to the MyICMS 886 blueprint, the eight services are High Speed Broadband,

3G and beyond, Mobile TV, Digital multimedia broadcasting, Digital home, Short range

communications using RFID, VoIP/Internet telephony and Universal Service

Provisioning. To support the compress of these, concentration will be on the provision of

hard infrastructure such as Multi-convergence networks, 3G Cellular Networks and

Satellite Communications Networks. To complement the hard infrastructure, we will also

need to develop and implement the required soft infrastructure comprising of next

generation internet protocol or IPV6, Information and Network Security, Internet

Adoption, Skill Development and Enhanced product and design capabilities. As for

generating growth, the six areas that have been categorized are Content Development,

ICT-Education Hub, Digital Multimedia Receivers, Communication Devices, Embedded

Components, Devices and Foreign Ventures (Ministry of Energy, Water and

Communications, 2006).

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Table 2.5.1 MyICMS 886 Service Goals

2006 2008 2010

1 Digital Homes Home gateway/Soho introduced in 60,000 homes

0.5 homes interwork with

external networks

1M connected homes

2 Short Range Communicati

on

Standards/SpectrumAllocated

Extensive usage in supply chain

management

Widespread use in

various applicati

ons

3 VoIP/Internet Telephony

Established QoS-Voip to PSTN

Service revenue RM

0.8b

Residential and

business service revenue of Rm1b

High Quality and

cheaper voice

servicesRM 1.5b

service revenue

4 USP: Universal Service

Provision

New USP Projects Broadband

internet community

project

Increased Broadba

nd internet

individual acess

60% coverage

for underserved rural houseold

s5 High Speed

Broadband1.3m subscribers

25% households

2.8m subscribers 50%

household

Total Broadba

nd penetration 75%

household

6 3G and Beyond 0.3m subscribers 1.5m subscribe

rs

At least 6m subscrib

ers

7 Mobile TV Further pilot service

Standards

75% mobile users adopt

Multimedia service

anywher

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adopted mobile TV

e, anytime 90% of

total mobile users

8 Digital Multimedia

Broadcasting

Standards adopted DTTB Trials

Initial commercial deployment

60% househol

d coverage

for DTTB

95% househol

d coverage

Source: Ministry of Energy, Water and Communications (2006). The Malaysian Information. Communication and Multimedia Services 886 (MyICMS 886)

Table 2.5.2 MyICMS 886 Infrastructure Goals

2006 2008 200101 Multiservice

Convergence Network (MSCN)

Migration of platform-

based services

Complete migration of

legacy service Fixed-mobile convergence

platform ready

Multiple services, Fully IP-

based

2 3G Cellular Introduction of High Speed Data

High speed mobile data services; Interworking of BWA with

3GPP

Nationwide 3G

services coverage

3 Satellite Networks

National policy on

satellite-based

communications

Satellite as a complementing transmission

medium

Critical services

reachable using

satellite

4 Next Generation Internet Protocol (IPv6)

Pilot of IPv6 services; All ISP are IPv6 enabled

Government agencies

adopt IPv6

Ipv6 full device

and network complian

23

ce5 Home Internet

Adoption“One Home

One Internet Access”

campaign

70% household with internet

access

90% househol

d with internet access

6 Information & Network Security

Information and network security portal installation of network security measures compliance to

international security standards

7 Competence Develop

ment

Initiate programs for competence development upgrading and enhancing competencies develop R&D

capabilities

8 Product Design

and Manufact

uring

Capacity building Original Equipment manufacturing High-tech communication industries


Table 2.5.3 MyICMS 886 Growth Areas Goals

24

2006 2007 2008 2009 20101 Content

Development Promote creativity and awareness

Strategic alliance with regional partners

Sizeable content export that will contribute to

communications and multimedia industry revenue

2 ICT Education Hub Promote e-learning

Ensure high quality education and training systems

Regional center for ICT education excellence

3 Digital Multimedia Receivers

Adopt open standards configuration for

manufacturing

Local production available in retail market

Recognized producer of digital radio receivers and

set top box

4 Content Development

Prototype communication devices

Malaysian made communication devices

Proliferation of communication devices for

domestic market

5 Embedded Components &

Devices

Promote R&D and commercialization

Widespread use of locally made integrated chip

(IC) products in applications

Export revenue contribute to the growth of GDP

6 Foreign Ventures Marketing & branding to create more visibility

International sub-contracting and outsourcing

Contribution to industry revenue

25


2.6 Related research on the Variables

Technology Acceptance Model (TAM) and Extended TAM

“The technology acceptance model is an influential extension of Ajzen and

Fishbein’s theory of reasoned action (TRA)”. It was introduced and developed by Fred

Davis in 1986 (Davis et al., 1989). TAM is a model obtained from a theory that

addresses the issue of how users come to accept and use a technology. The model

proposes that when users are presented to a new software package, a number of variables

persuade their decisions about how and when they will use it. Snow et al., (2006) added

that the role of TAM is not only to gain knowledge of how technology is issued within

organizations, but also how practitioners can influence the development process to

positively affect the reception and hence the acceptance of new technologies in a

business environment. There are two specific variables, perceived usefulness and

perceived ease of use, which are assumed to be fundamental factors of user acceptance

(Davis and Arbor, 1989). Bhatti (2007) stated that the TAM’s basic construct doesn’t

fully reflect the precise influences of technological and usage context factors that might

differ the user’s acceptance. Mathieson et al., (2001) argued that the TAM is limited due

to the lack of barriers that controls the individual from using an Information Technology

if they choose too. Moreover, researchers have also mentioned that due to the generality

of TAM, it fails to provide more significant data on user’s opinions and requires

integration with other IT acceptance models to improve its explanatory and specificity

(Mathieson, 1991; Agarwal and Prasad, 1998).

Figure 2.6.1: Technology Acceptance Model

26

Perceived

Usefulness

External Attitude Behavioral Actual

Variables Intention System use

Perceived

Ease of Use

Source: Davis, F. D. (1989). Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology, MIS Quarterly, 13(3), 31-340.

Consequently these two determinants may not fully explain the factors which

expect the acceptance of a technology application such as mobile banking. Previous

studies have extended the original TAM by adding some constructs into the original

TAM model to facilitate understanding of the intention to use mobile banking in

Malaysia. Luarn and Lin (2004) amended the original TAM by adding perceived

credibility which was also defined by Wang et al., (2003), perceived self-efficacy which

was supported by several previous studies (Agrawal et al., 2000; Chau, 2001; Hong et

al., 2001; Johnson & Marakas, 2000)

Figure 2.6.2-: Extended TAM

27

Perceived usefulness

Perceived Usefulness

Davis (1989) defined perceived usefulness as “the degree to which a person

believes that using a particular system would enhance his or her job performance”.

Previous studies have shown that perceived usefulness is an important predecessor to the

intention to adopt and use a technology (Davis et al., 1989; Venkatesh, 1999, 2000;

Venkatesh & Davis, 2000). Potential adopters evaluate the consequences of their

adoption activities based on the enduring desirability of usefulness obtained from the

particular innovation (Chau, 1996; Venkatesh & Davis, 2000). In addition, perceived

usefulness is also known as performance expectancy (Venkatesh, 2003; Morris, 2003;

Davis, 2003), this was based on the expectancy theory that mocks-up the function of

belief in decision making (Porter and Lawler, 1968; Robey, 1979; Vroom, 1964). To

explain that, an innovation is perceived to be of high effectiveness when a particular

adopter believes that there is a direct relationship between use, on one hand, and

performance, productivity, effectiveness and satisfaction, on the other (Lu andYu, 2003).

Although many mobile services are leisure related, services such as new, stock changes

or banking can also stimulate how a user performs a task. In addition, “characteristics

that are inherent to mobile services, such as their personalized and ubiquitous nature,

their portability, and their context awareness potential are likely to contribute to

28

Perceived Ease of Use

Perceived Credibility

Perceived Self-efficacy

Behavioral Intention

Extended Technology Acceptance Model (Extended

TAM)

perceived usefulness of mobile services in ways that have not seen before” (Rao and

Troshani, 2007).

Aderonke and Charles (2010) mentioned that “people tend to use an application to

the extent they believe it will aid their performance”. Amin et al., (2008) stated that

perceived usefulness is strongly correlated with productivity. It suggests that using

computer in the workplace would improve job performance, increase user’s productivity,

enhance job effectiveness and be valuable in the job. Cheong and Park (2005) found that

there exists a positive causality between perceived usefulness and online purchase

intentions. Laurn and Lin (2005) also stated that perceived usefulness has significant

effect in the development of initial readiness to use mobile banking. These studies prove

the significant effect of perceived usefulness in individual reactions to information

technology. Hence, it is quite expected that the reason why people use mobile banking is

because they find it useful. On these bases, the following hypothesis is proposed:

H1: Perceived usefulness will have a positive effect on the behavioral intention to use

mobile banking.

Perceived ease of use

Perceived ease of use refers to the degree to which a person believes that using a

particular system would be effortless (Davis, 1989). In the mobile setting, perceived ease

of use corresponds to the degree to which individuals relate freedom of difficulty with

the use of mobile technology and services in daily usage (Knutsen et al., 2005). Some

mobile devices could be complex or tedious to use, for instance Taylor and Todd (1995)

mentioned that there are facts in the media that says using certain services on a mobile

phone can be tiresome, especially when browsing internet-like interfaces on mobile

devices. Fang et al., (2005) discovered that the nature of an innovation or a task or any

service related to it may persuade its perceived ease of use. For instance, perceived ease

of use affects the intended use of innovation only when it provides intrinsic motivation,

29

but not when it provides extrinsic rewards to its users (Gefen and Straub, 2000). Several

previous studies have shown that there is a positive relationship between perceived ease

of use and usage intention. Luarn and Lin (2005) stated that there is a positive causality

between perceived ease of use and the usage intention. Guriting and Ndubisi (2006)

mentioned that perceived ease of use had a significant positive effect of behavioral

intention to use online banking in Malaysia. Ramayah, et al., (2003) found that perceived

ease of use has a major impact in the development of initial willingness to use internet

banking. Davis et al., (1989) stated that perceived ease of use is an ancestor of perceived

usefulness. Perceived ease of use is assumed to act as a predictor of perceived

usefulness. In addition, both perceived usefulness and perceived ease of use predict

attitude towards using a system (Yan et al., 2009). A system which is more convenient to

use will facilitate more system use and accomplishment of tasks, rather than systems that

are hard to use (Venkatesh and Morris, 2000). The following hypothesis was proposed:

H2: Perceived ease of use will have a positive effect on the behavioral intention to use

mobile banking.

Compatibility

According to Rogers (1995), compatibility is defined as “ the degree to which an

innovation is perceived as being consistent with the existing values, past experiences and

the needs of potential adopters". Compatibility is viewed as an sign of how well the

service or technology fits with the way the customers manage and control their finances

and how it ensemble their lifestyle (Yu, 2009). Individuals are more probable to adopt an

innovation when they find it compatible with their past experience, beliefs and the way

they are accustomed to work (Agarwal and Prasad, 1998; Tornatzky and Klein, 1982).

Compatibility is illustrated to capture the consistency between an innovation and

experience, values, as well as needs of potential adopters (Rogers, 1995). It is a

significant aspect of compatibility that consumers are able to combine services and

30

technologies into their daily life (Jayawardhena & Foley, 1998; Lee et al., 2003; Shon &

Swatman, 1998). Perceived compatibility was discovered to indirectly influence the

user’s intention to mobile banking via perceived ease of use. Moreover, compatibility

was added into the research model and the following hypothesis was proposed.

H3: Compatibility will have a positive effect on the perceived ease of use of mobile

banking.

Perceived Self- efficacy

The importance of perceived ease of use is supported by Bandura (1982) who

defined self efficacy as "judgments of how well one can execute courses of action

required to deal with prospective situations". Studies have also shown that an empirical

evidence of a causal link between computer self efficacy and perceived ease of use exists

(Hanudin, 2007; Reid et al., 2008). The self efficacy of mobile banking is defined as “a

judgment of one’s ability to use a mobile banking service: (Luarn and Lin, 2004). Self

efficacy could include knowledge, skill and abilities needed to use the new IT. The

existence of a relationship between perceived self efficacy and perceived ease of use was

indicated by Davis (1989) and Mathieson et al., (2001). Therefore, perceived self

efficacy may indirectly influence the user’s behavior to use mobile to use mobile

banking via perceived ease of use. The following hypothesis was proposed:

H4: Self – efficacy will have a positive effect on the perceived ease of use of mobile

banking.

Subjective Norm

By definition, Subjective norm can be defined as a person’s observation that

most people who are important to him or her should or shouldn’t perform the behavior

(Fishbein and Ajzen, 1975). The opinions of important referents could comprise the basis

31

for a user’s feelings concerning the effectiveness of an innovation. For instance, if a

superior says that one particular innovation could be useful; such an implication could

affect the prospective of a user’s perception on the usefulness of the innovation (Yi et al.,

2006). Prior studies have discovered the importance of such construct in social science

studies including in banking studies (Amin et al., 2007; Nysveen et al., 2005; Kleijnen et

al., 2004). Amin et al., (2007) found that subjective norm was a key interpreter for

mobile banking use from a Malaysian point of view. Nysveen et al., (2005) stated that

users’ exploiting mobile chatting was due to the usage revealing their personal value as

well as the influence of others on them. Kleijnen et al., (2004) stated in a study on

wireless finance in Netherlands that subjective norm was essential in the development of

peoples’ intention to use wireless finance. Reference groups such as family members,

friends, teachers, and bank tellers make a significant force to encourage an individual to

behave in consistency with their identities (Amin and Ramayah, 2010). Research also

clarifies that the pressure from referent groups to adopt an innovation is effective

because it adds to reducing risk associated with adoption (Ishii, 2004; Lu et al., 2003;

Teo and Pok, 2003). Though the effect of subjective norms (SN) on intention is

indecisive, from previous research there is a significant body of theoretical and empirical

evidence concerning the importance of the function of subjective norm on technology

use, whether its directly or indirectly related (e.g., Taylor and Todd, 1995; Venkatesh

and Davis, 2000; Hsu and Lu, 2004). The comparative influence of subjective norm on

intentions is expected to be stronger for potential users with no previous practice since

they are more likely to rely on the reactions of others in shaping their intentions

(Hartwick and Barki, 1994). If mobile services are supposedly hard to learn and use,

unavoidably it will more or less affect a user’s intention toward adopting. The idea is to

predict whether social influence is a significant consideration in people’s intention to use

the system.

Using the findings of the above studies, we formulated the following hypothesis:

H5: Subjective norm will positively influence intention to use Mobile baking.

32


By definition, perceived credibility is one's judgment on the privacy and security

issues of the mobile banking. Users will at least expect the same level of security that’s

available when banking online through their PC. Both the “Perception issue” (such as,

how lack of security affects the financial institution’s brand) and the real problem (e.g.,

snooping, injection and modification) must be addressed in order to encourage adoption

of mobile banking (Mobile Banking Overview. 2009). The significance of security and

privacy to the acceptance of banking technologies has been illustrated in many banking

studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). As stated

by Wang et al., (2003) security and privacy are the two important dimensions in

perceived credibility. In order to initiate credibility, it is argued that both perceived

security and privacy are required.

Evidences have shown that both security and privacy could become obstacles for

the adoption of mobile services (Fang et al., 2005, Pikkarainen et al., 2004). The

significance of security and privacy to the acceptance of banking technologies has been

noted in many banking studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and

Sathye, 1999). Normally, fear of the lack of security is considered as an important factor

affecting the acceptance. One of these studies was conducted by Ndubisi and Sinti

(2006), they observed internet banking perception among bank customers in Malaysia,

and concluded that the risk was believed to be a weak predictor because of the banks’

assurance over the security of their internet banking. The banks supported that all the

cyber banks in Malaysia endorse this product as a fully secure option with 128-bit

encryption technology. Comparably, Pikkarainen et al., (2004), examined internet

banking from a Finnish perspective and they found that perceived credibility was found

to be not considerably related to internet banking acceptance.

Opposing to the above studies, Ramayah et al., (2006) who examined users and

non-users’ perceptions of internet banking found that security was a key predictor to

33

measure internet banking use by the users. Similarly, Wang et al., (2004) examined the

acceptance of internet banking in Taiwan; they found that PSP (perceived security and

privacy) had a crucial positive effect on behavioral intention to use internet banking.

Ramayah and Ling (2002) stated that the respondents ranked security as one of the

significant factors when adopting Internet banking. Luarn and Lin (2005) also examined

that perceived credibility has significant role in the development of willingness to use

mobile banking.

As mobile banking is considered relatively new, perceived credibility has a

higher ability to predict and analyze the uses’ intention to use mobile banking.

H6: Perceived Security and Privacy will have a positive effect on the credibility of use of

mobile banking.

H7: Perceived credibility will have a positive effect on the behavioral intention to use

mobile banking.

Perceived risk

Initially perceived risk was primarily related to fraud or product or product quality,

but today and as people got engaged in online behavior, perceived risk is largely

associated to financial, psychological, physical, or even social risks in online transactions

(Forsythe and Shi, 2003; Im et al., 2008). Fain and Roberts (1997) defined “risk is a

perception of consumer, not a characteristics of a product” Featherman (2002) stated that

service performance risk (i.e. risk related to service) is the key determinant of e-service

adoption. Wong and Chang (2005) considered that risk generally arises from the

uncertainty that users face when they cannot anticipate the consequences of their

purchase decision. When adopting mobile banking/payment, financial institutions must

weigh and consider the risks. Below, Lawhorn (2010) states that there are several key

areas that should be considered.

34

Third party providers: Mobile payment service providers offer a system for consumes to

transfer value from their current accounts with banks/regulated financial institutions.

These service providers are known as Money Service Businesses (MSBs) and they

function as a financial intermediary. MSBs have to fulfill the laws in the state in which

they are located. If a financial company decides to use an MSB for mobile payment

transactions, they ought to ensure review and earn confidences with the MSB’s

information security practices.

Regulatory and legal liability: Currently the United States as few safeguards against

abuse of mobile payments. There has been little progress in formulating and publicizing

guidance and the traditional money laundering countermeasures are insufficient to

address the impending threat posed by abuse of mobile payments to today’s e-banking

and cashless system.

Fraud/loss prevention: Given the dynamic nature and magnitude of security threats in the

wireless environment, it is crucial that the financial institutions implement intermittent

independent security vulnerability assessments of their mobile payment systems that

recognize apprehensive transactions or payment behaviors. In general, the mobile

payment industry has made several vital improvements in the viability and security of

electronic payments but there are still some major risks to financial institutions adopting

the service today.

Relating to prior studies and group discussions, it is obvious that users’ intention to

use new technology is affected by whether or not such risk does really exist. Based on

the literature, perceived risk could directly influence users’ intention to use mobile

banking. As per this conclusion, the following hypothesis was formulated:

H8: Perceived risk will have a negative effect on behavioural intention to use mobile

banking.

User Predisposition

35

User predisposition refers to the internal factors of an individual user of mobile

services. There are facts stating that successful acceptance of innovations depends as

much on individual adopter differences as on the innovation itself. Personal differences

severely influence adoption. Therefore, recognizing individual differences that impact

technology adoption is significant as it helps categorize segments of adopters who are

more likely to implement technology innovations than others, which in return, helps

providers concentrate on adopter needs more narrowly (Massey et al., 2005).

Furthermore, these individual adopters can act as opinion leaders or change agents to

assist the diffusion of the technology further. User predisposition is divided to a number

of factors including individual’s prior knowledge and familiarity of existing mobile

services, behavioral control, compatibility, image, personal innovativeness, and

perceived enjoyment.

Prior knowledge is critical for the comprehension of the technology and its related

services. Knowledge appears when a potential adopter discovers the existence of an

innovation and gains some understanding concerning its functionality (Herr et al., 1991).

Knowledge comprises of two components, specifically, expertise and familiarity. For

instance, the previous constitutes the number of mobile services-related experiences

accumulated by consumers over time, which consists of exposure to advertising,

information search, and interaction with salespersons. The second represents the

capability to use mobile services, and it includes beliefs about service features (i.e.

cognitive structures) in addition to decision rules for acting on those beliefs (i.e.

cognitive processes) (Alba and Hutchinson, 1987). Adopters’ previous experiences with

a technology or service whether it is a positive or negative experiences, can have a

significant impact on their perceptions and attitudes towards that technology or service

(Lee et al., 2003; Taylor and Todd, 1995)

The other variable is perceived behavioral control, which is a dynamic and socio-

cognitive concept. Perceived behavioral control is an individual’s belief about the

36

“presence or absence of requisite resources and opportunities” (Ajzen and Madden,

1986).

A more recent definition illustrates perceived behavioral control as a construct

which reveals user perceptions of both internal and external limitation of adopting an

innovation (Yi et al., 2006). In the perspective of mobile services adoption, perceived

behavioral control refers to the individual’s perception of how easy or difficult it is to get

mobile services which includes individual’s ability to afford the costs related with

mobile services (Rao and Troshani, 2007) Recent empirical findings proposes that

perceived behavioral control consists of two discrete components, namely, self-efficacy

which is an individual’s judgment of their capability to perform a behavior, and

controllability which represents an individual’s belief if they have the necessary

resources and opportunities to adopt the innovation (Hung et al., 2003; Wang et al.,

(2006). In short, perceived behavioral control signifies a subjective judgment of the

degree of control over a behavior’s performance, not the perceived likelihood that

performing the behavior will produce a given outcome (Ajzen, 1991).

Another variable within the user predisposition construct is compatibility. Rogers

(1995) defines compatibility as the degree to which an innovation is observed to be

consistent with existing values of potential adopters. Generally speaking, high

incompatibility will adversely affect potential adopters of an innovation, which reduces

the likelihood of adoption (Saaksjarvi, 2003). Individuals are most probably to adopt an

innovation when they find it compatible with their prior experience, beliefs and the way

they are accustomed to work (Agarwal & Prasad, 1998; Tornatzky & Klein, 1982). Yu

(2009) states that compatibility is observed as an indicator of how well the service or

technology fits with the way the customers control and manage their finances and how it

suits their lifestyle. Rogers (1995) mentions that compatibility is described to capture the

reliability between an innovation and the experiences, values, as well as needs of

potential adopters. The compatibility construct has also provided a consistent

explanation of technology adoption decisions (Tornatzky & Klein, 1982). In the context

37

of wireless devices, lifestyle compatibility is the level to which adopters believe mobile

devices and services can be assimilated into their daily lives.

Next, personal innovativeness is the intrinsic willingness of an individual to try

out and embrace new technologies and their related services for accomplishing precise

goals. Based on the Innovation Diffusion Theory, personal innovativeness symbolizes

the risk-taking tendency which exists in certain individuals and not in others (Agarwal

and Prasad, 1998; Massey et al. 2005; Parasuraman, 2000). Personal innovativeness

represents a convergence of technology-related beliefs which mutually contribute to

determining an individual’s predisposition to adopt mobile devices and related services

(Rao and Troshani, 2007). Hence, given the same level of beliefs and perceptions about

an innovation, individuals with higher personal innovativeness are more likely to

enhance positive attitudes towards adopting it than less innovative individuals (Agarwal

and Prasad, 1998). The identification of personal innovativeness helps identify different

categories of mobile service adopters are likely to shape the opinions of later ones by

becoming engaged in frequent advise-giving capacities (Brancheau and Wetherbe, 1990;

Yi et al., 2006)

Finally, intrinsic motivators such as perceived enjoyment need to be added to the

model to explain mobile service adoption behavior. Perceived enjoyment refers to the

degree to which using an innovation is perceived to be enjoyable in its own right and is

considered to be an intrinsic source of motivation (Gahtani and King, 1999). Because the

market for innovative mobile consists of both corporate users and consumers, aspects

focusing on perceived enjoyment, forms an important consideration (carlsson et al.,

2005; Pagani, 2004). That is, adopters use an innovation for the delight or enjoyment its

adoption might achieve and, hence, serve as an end unto itself. Further, intrinsic

enjoyment, obtained by playing mobile games for example, satisfies pleasure-oriented

and operates outside valued outcomes or immediate material needs (i.e. extrinsic

motivations), such as improved job performance and increased pay (Mathwick et al.,

38

2001; Moon and Kim, 2001). Previous research proposes that perceived enjoyment is

one of the most significant types of user needs (Anckar and D’Incau, 2002).

H9: User predisposition will have a positive effect on behavioural intention to use mobile

banking

2.7 Summary

In this chapter, there is a compilation of various definitions of mobile banking

taken from previous works. There is a brief but informative discussion on the evolution

and advancement of mobile banking. In addition, this chapter covers out how mobile

banking has turned out to be successful in Western Europe. There is also information on

how mobile banking is performing in Malaysia and how the Government intends to

boost the usage of mobile banking using the MyICMS 886 blueprint. This blueprint

presents an inclusive strategy such as service goals, infrastructure goals and growth areas

goals that address the core characteristics of the industry. It also includes a bridged

description about the technology Acceptance Model (TAM) and the Extended TAM.

This chapter also covers a detailed explanation about the variables affecting the intention

to use mobile banking in Malaysia.

Chapter 3

39

Research Methodology

3.1 Introduction

The objective of this research is to identify the key determinants of Mobile

Banking adoption among users in Malaysia. Therefore, this chapter provides a

description of the methodology used for this research. In this chapter, there is a detailed

indication on the instruments used in the data mining process. Both the conceptual

framework and the theoretical framework are presented in this chapter. There is also

enlightenment on how the independent variables will influence the independent variables

and the suggested hypotheses. Additionally, the questionnaire design, research approach,

data resources, data collection method, measurement of the variables, sampling method,

sample size / population size, unit of analysis and data analysis techniques will also be

elaborately explained in this chapter.

3.2 Conceptual Framework

In order to build a conceptual framework, various factors have been taken into

consideration as potential variables. After extensive studies done abroad, six variables

have been identified as possible key factors of Mobile Banking adoption in Malaysia.

Perceived usefulness is seen as a determinant of consumers’ intention to adopt mobile

banking. Another predicted determinant is perceived ease of use. Perceived

innovativeness is predicted to have an effect on the perceived ease of use. Both

perceived usefulness and perceived ease of use were adopted from the TAM model.

Another estimated determinant of consumers’ intention to use mobile banking is

perceived credibility. Additionally, subjective norm is also seen as a possible

determinant that would persuade consumer adoption. Another possible determinant that

would influence the adoption of mobile banking and was discussed in this chapter is

40

Perceived risk. Finally, the last possible determinant is user predisposition, which might

be influencing the adoption of mobile banking in Malaysia.

Figure 3.2: Theoretical Framework

TAM model has been adopted and additional appropriate constructs have been

added. This section explains in details the justification for the constructs to be integrated

in the research and the hypothesized affiliation amongst these constructs.

3.3 Hypothesis Development

41

Perceived Compatibility

Perceived

Credibility

Perceived

Risk

Subjective

Norms

Perceived

Usefulness

User - Predisposition

Perceived

Self-efficacy

Intention to use Mobile

Banking


Perceived Security & Privacy


Davis (1989) defined perceived usefulness as “the degree to which a person

believes that using a particular system would enhance his or her job performance” (Ibid,

p.320). Previous studies have shown that perceived usefulness is an important

predecessor to the intention to adopt and use a technology (Davis et al., 1989;

Venkatesh, 1999, 2000; Venkatesh & Davis, 2000). Potential adopters evaluate the

consequences of their adoption activities based on the enduring desirability of usefulness

obtained from the particular innovation (Chau, 1996; Venkatesh & Davis, 2000). In

addition, perceived usefulness is also known as performance expectancy (Venkatesh,

2003; Morris, 2003; Davis, 2003), this was based on the expectancy theory that mocks-

up the function of belief in decision making (Porter and Lawler, 1968; Robey, 1979;

Vroom, 1964). To explain that, an innovation is perceived to be of high effectiveness

when a particular adopter believes that there is a direct relationship between use, on one

hand, and performance, productivity, effectiveness and satisfaction, on the other (Lu and

Yu, 2003). Although many mobile services are leisure related, services such as new,

stock changes or banking can also stimulate how a user performs a task. In addition,

“characteristics that are inherent to mobile services, such as their personalized and

ubiquitous nature, their portability, and their context awareness potential are likely to

contribute to perceived usefulness of mobile services in ways that have not seen before”

(Rao and Troshani, 2007).

Aderonke and Charles (2010) mentioned that “people tend to use an application

to the extent they believe it will aid their performance”. Amin et al., (2008) stated that

perceived usefulness is strongly correlated with productivity. It suggests that using


enhance job effectiveness and be valuable in the job. Cheong and Park (2005) found that

there exists a positive causality between perceived usefulness and online purchase

intentions. Laurn and Lin (2005) also stated that perceived usefulness has significant

effect in the development of initial readiness to use mobile banking. These studies prove

42

the significant effect of perceived usefulness in individual reactions to information

technology. Hence, it is quite expected that the reason why people use mobile banking is

because they find it useful. On these bases, the following hypothesis is proposed:


mobile banking.

Perceived ease of use

Perceived ease of use refers to the degree to which a person believes that using

a particular system would be effortless (Davis, 1989). In the mobile setting, perceived

ease of use corresponds to the degree to which individuals relate freedom of difficulty

with the use of mobile technology and services in daily usage (Knutsen et al., 2005).

Some mobile devices could be complex or tedious to use, for instance Taylor and Todd

(1995) mentioned that there are facts in the media that says using certain services on a

mobile phone can be tiresome, especially when browsing internet-like interfaces on

mobile devices. Fang et al., (2005) discovered that the nature of an innovation or a task

or any service related to it may persuade its perceived ease of use. For instance,

perceived ease of use affects the intended use of innovation only when it provides

intrinsic motivation, but not when it provides extrinsic rewards to its users (Gefen and

Straub, 2000). Several previous studies have shown that there is a positive relationship

between perceived ease of use and usage intention. Luarn and Lin (2005) stated that

there is a positive causality between perceived ease of use and the usage intention.

Guriting and Ndubisi (2006) mentioned that perceived ease of use had a significant

positive effect of behavioral intention to use online banking in Malaysia. Ramayah et al.,

(2003) found that perceived ease of use has a major impact in the development of initial

willingness to use internet banking. Davis et al., (1989) stated that perceived ease of use

is an ancestor of perceived usefulness. Perceived ease of use is assumed to act as a

predictor of perceived usefulness. In addition, both perceived usefulness and perceived

43

ease of use predict attitude towards using a system (Yan et al., 2009). A system which is

more convenient to use will facilitate more system use and accomplishment of tasks,

rather than systems that are hard to use (Venkatesh and Morris, 2000). The following

hypothesis was proposed:


mobile banking.

Compatibility

According to Rogers (1995) compatibility is defined as “the degree to which an

innovation is perceived as being consistent with the existing values, past experiences and

the needs of potential adopters". Compatibility is viewed as a sign of how well the

service or technology fits with the way the customers manage and control their finances

and how it ensemble their lifestyle (Yu, 2009). Individuals are more probable to adopt an

innovation when they find it compatible with their past experience, beliefs and the way

they are accustomed to work (Agarwal and Prasad, 1998; Tornatzky and Klein, 1982).

Compatibility is illustrated to capture the consistency between an innovation and

experience, values, as well as needs of potential adopters (Rogers, 1995). It is a

significant aspect of compatibility that consumers are able to combine services and

technologies into their daily life (Jayawardhena & Foley, 1998; Lee et al., 2003; Shon &

Swatman, 1998). Perceived compatibility was discovered to indirectly influence the

user’s intention to mobile banking via perceived ease of use. Moreover, compatibility

was added into the research model and the following hypothesis was proposed.

H3: Compatibility will have a positive effect on the behavioral intention to use mobile

banking.

Perceived Self- efficacy

44

The importance of perceived ease of use is supported by Bandura (1982) who

defined self efficacy as "judgments of how well one can execute courses of action

required to deal with prospective situations". Studies have also shown that an empirical

evidence of a causal link between computer self efficacy and perceived ease of use exists

(Hanudin, 2007; Reid et al., 2008). The self efficacy of mobile banking is defined as “a

judgment of one’s ability to use a mobile banking service: (Luarn and Lin, 2004). Self

efficacy could include knowledge, skill and abilities needed to use the new IT. The

existence of a relationship between perceived self efficacy and perceived ease of use was

indicated by Davis (1989) and Mathieson et al., (2001). Therefore, perceived self

efficacy may indirectly influence the user’s behavior to use mobile to use mobile

banking via perceived ease of use. The following hypothesis was proposed:

H4: Self – efficacy will have a positive effect on the behavioral intention to use mobile

banking.

Subjective Norm

By definition, Subjective norm can be defined as a person’s observation that

most people who are important to him or her should or shouldn’t perform the behavior

(Fishbein and Ajzen, 1975). The opinions of important referents could comprise the basis

for a user’s feelings concerning the effectiveness of an innovation. For instance, if a

superior says that one particular innovation could be useful; such an implication could

affect the prospective of a user’s perception on the usefulness of the innovation (Yi et al.,

2006). Prior studies have discovered the importance of such construct in social science

studies including in banking studies (Amin et al., 2007; Nysveen et al., 2005; Kleijnen et

al., 2004). Amin et al., (2007) found that subjective norm was a key interpreter for

mobile banking use from a Malaysian point of view. Nysveen et al., (2005) stated that

users’ exploiting mobile chatting was due to the usage revealing their personal value as

well as the influence of others on them. Kleijnen et al., (2004) stated in a study on

45

wireless finance in Netherlands that subjective norm was essential in the development of

peoples’ intention to use wireless finance. Reference groups such as family members,

friends, teachers, and bank tellers make a significant force to encourage an individual to

behave in consistency with their identities (Amin and Ramayah, 2010). Research also

clarifies that the pressure from referent groups to adopt an innovation is effective

because it adds to reducing risk associated with adoption (Ishii, 2004; Lu et al., 2003;

Teo and Pok, 2003).

Using the findings of the above studies, we formulated the following hypothesis:

H5: Subjective norm will positively influence intention to use Mobile banking.


By definition, perceived credibility is one's judgment on the privacy and security

issues of the mobile banking. Users will at least expect the same level of security that’s

available when banking online through their PC. Both the “Perception issue” (such as,

how lack of security affects the financial institution’s brand) and the real problem (e.g.,

snooping, injection and modification) must be addressed in order to encourage adoption

of mobile banking (Mobile Banking Overview. 2009). The significance of security and

privacy to the acceptance of banking technologies has been illustrated in many banking

studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). As stated

by Wang et al., (2003) security and privacy are the two important dimensions in

perceived credibility. In order to initiate credibility, it is argued that both perceived

security and privacy are required.

Evidences have shown that both security and privacy could become obstacles

for the adoption of mobile services (Fang et al., 2005, Pikkarainen et al., 2004). The

significance of security and privacy to the acceptance of banking technologies has been

noted in many banking studies (Howcroft et al., 2002; Polatoglu and Ekin, 2001; and

46

Sathye, 1999). Normally, fear of the lack of security is considered as an important factor

affecting the acceptance. One of these studies was conducted by Ndubisi and Sinti

(2006), they observed internet banking perception among bank customers in Malaysia,

and concluded that the risk was believed to be a weak predictor because of the banks’

assurance over the security of their internet banking. The banks supported that all the

cyber banks in Malaysia endorse this product as a fully secure option with 128-bit

encryption technology. Comparably, Pikkarainen et al., (2004), examined internet

banking from a Finnish perspective and they found that perceived credibility was found

to be not considerably related to internet banking acceptance.

Opposing to the above studies, Ramayah et al., (2006) who examined users and

non-users’ perceptions of internet banking found that security was a key predictor to

measure internet banking use by the users. Similarly, Wang et al., (2004) examined the

acceptance of internet banking in Taiwan; they found that PSP (perceived security and

privacy) had a crucial positive effect on behavioral intention to use internet banking.

Ramayah and Ling (2002) stated that the respondents ranked security as one of the

significant factors when adopting Internet banking. Luarn and Lin (2005) also examined

that perceived credibility has significant role in the development of willingness to use

mobile banking.

As mobile banking is considered relatively new, perceived credibility has a

higher ability to predict and analyze the uses’ intention to use mobile banking.

H6: Perceived Security and Privacy will have a positive effect on the credibility of use of

mobile banking.


mobile banking.

Perceived risk

47

Initially perceived risk was primarily related to fraud or product or product

quality, but today and as people got engaged in online behavior, perceived risk is largely

associated to financial, psychological, physical, or even social risks in online transactions

(Forsythe and Shi, 2003; Im et al., 2008). Featherman (2002) stated that service

performance risk (i.e. risk related to service) is the key determinant of e-service

adoption. Wong and Chang (2005) considered that risk generally arises from the

uncertainty that users face when they cannot anticipate the consequences of their

purchase decision.

Relating to prior studies and group discussions, it is obvious that users’ intention

to use new technology is affected by whether or not such risk does really exist. Based on

the literature, perceived risk could directly influence users’ intention to use mobile

banking. As per this conclusion, the following hypothesis was formulated:

H8: Perceived risk will have a negative effect on behavioural intention to use mobile

banking.

User Predisposition

User predisposition refers to the internal factors of an individual user of mobile

services. There are facts stating that successful acceptance of innovations depends as

much on individual adopter differences as on the innovation itself. Personal differences

severely influence adoption. Therefore, recognizing individual differences that impact

technology adoption is significant as it helps categorize segments of adopters who are

more likely to implement technology innovations than others, which in return, helps

providers concentrate on adopter needs more narrowly (Massey et al., 2005).

Furthermore, these individual adopters can act as opinion leaders or change agents to

assist the diffusion of the technology further. User predisposition is divided to a number

of factors including individual’s prior knowledge and familiarity of existing mobile

48

services, behavioral control, compatibility, image, personal innovativeness, and

perceived enjoyment.

H9: User predisposition will have a positive effect on behavioral intention to use

mobile banking

3.4 Research Approach

In order to substantiate the hypothesis proposed on the key factors of mobile

banking adoption in Malaysia, it should be scientifically tested. In order for this to

happen, data must be collected from the sample / population to be analyzed.

There are several ways to collect information with the most prominent ways

being via interview and questionnaires. This data is then originated using various

mathematical techniques to find out information. As well as collecting data from the

sample / population, a different way to collect information is through research and by

studying previous work done on the topic to understand their findings and to achieve

more knowledge about the topic.

The sample / population are regularly determined early and are usually hurdled to the

topic we are researching. For example, the topic is about Malaysia, hence limit for the

sample / population will be within the geographical area of Malaysia. The reason for all

this to ensure the data is accurate and not biased in any kind of way.

3.5 Data Resources

Primary data are the data gathered directly from firsthand experience. The

defining characteristic of primary data is that data collected is unique and the research

will stay unrevealed until the study is published. Primary data can be classified into two

49

categories. Qualitative in nature is one of these primary data, which is usually text based.

Or quantitative in nature, which signifies the numerical values. Among the methods of

collecting the primary data are via questionnaires, interviews, observations, group

interviews, case-studies, diaries, critical incidents and portfolios.

Secondary data is data that has already been collected for use in previous

studies. Secondary data can also been divided into two based on their nature. These two

natures are qualitative data which comprises of biographies, personal letters, documents,

diaries, records, published material, computer database, and policy statements. The other

nature is quantitative data, it would include market research, census, and economic

documents, planning documents or specimens.

3.6 Data Collection Method

In this research, the data collection method was implemented through distributing

questionnaires. The motive for using the questionnaires method for collecting data was

because prior work which has been cited in this paper have all chosen this method (Birch

and Young, 1997; Wang et al., 2003; Mwaura, 2009; Wilcox, 2010;

Weber and Darbellay, 2010; Yong and Gorman, 2002; Foley, 2005; Davis et al., 1989;

Venkatesh, 1999; Venkatesh & Davis, 2000; Venkatesh, 2003; Morris, 2003; Davis,

2003; Porter and Lawler, 1968; Robey, 1979; Vroom, 1964; Rao and Troshani, 2007;

Cheong and Park, 2005; Amin et al., 2008; Knutsen et al., 2005; Taylor and Todd, 1995;

Fang et al., 2005; Gefen and Straub, 2000; Guriting and Ndubisi, 2006; Ramayah et al.,

2003; Yan et al., 2009; Agarwal and Prasad, 1998; Tornatzky and Klein, 1982;

Jayawardhena & Foley, 1998; Lee et al., 2003; Shon & Swatman, 1998; Hanudin, 2007;

Reid et al., 2008; Howcroft, et al., 2002; Polatoglu and Ekin, 2001; Sathye, 1999; Fang

et al., 2005, Pikkarainen et al., 2004; Ndubisi and Sinti, 2006; Ramayah and Ling, 2002

There are several advantages which make the questionnaire method most

preferable. Amongst these advantages are it is cost effective, reduce bias (questionnaires

50

are handed out randomly), and it has a large amount of correspondents. There are also

other advantages of questionnaires such as its undisputed, respondents will have time to

think about their response, no prior arrangements are needed when handing out

questionnaires, and questionnaires can cover wide geographic location because it can be

posted, faxed or e-mailed.

3.7 Questionnaire Design

The questionnaire was designed, pre-tested and then administered to a random

sample of mobile service subscribers. The questionnaire was designed to test these

variables, Perceived Usefulness, Perceived Ease-of-use, Perceived Credibility, Perceived

risk, Subjective Norm and User Predisposition and also to collect demographic

information about the correspondents.

Based on Luarn and Lin (2005), the questions for each construct shall be adapted

from prior research. The first section was designed to collect demographic information

of the respondents. There were 5 demographics which will give rough background

information of the sample chosen. The questions covered gender, age, marital status,

education attained, and also income level in the format of close-ended multiple-choice

questions except for age. These questions were adopted from Amin et al., (2006).

As for the second section, the constructs, perceived usefulness questions were

adopted from the works of Taylor and Todd (1995), Khalifa and Cheng (2002), Wang

and Barnes (2007), Kurnia et al., (2006) and Wong and Hiew (2005). For perceived ease-

of-use, the questions were adopted from Luarn and Lin (2005). On the other hand, for

social influences, the questions were adopted from Luarn and Lin (2005), Lin and Wang

(2005) and Wong and Hiew (2005). Additional questions regarding the other variables

were also added. For all the constructs, a five- point Likert-type scale was used, ranking

from 1 (strongly disagree) to 5 (strongly agree). By using the Likert scale, respondents

were able to indicate their level of agreement or disagreement for each statement.

51

3.8 Measurement

For the demographic questions, it was computed using a nominal scale as done by

Haque and Raihan (2004) and Amin et al., (2006). This nominal scale was used to collect

a range of values for values in obtaining age of the correspondents and much more.

For the answers of the questions, it was based on a five-point Likert-type scale,

ranking as 1 (strongly disagree), 2 (disagree), 3 (neutral), 4 (agree), and 5 (strongly

agree), each to factor out a single maximum point, for the measurement of the whole

designs of the questionnaires. Statements that are negatively acknowledged will be

reversed coded during the analysis. This process will be done because according to field,

(2005) negative worded items are necessary to trim down any bias that might occur due

to the fact that respondents have the tendency to read the items in a scenario when they

are phrased the other way around.

Using a Likert-type scale, an attitude statement is given, and then the respondents

choose a point on the scale reflecting his or her position towards the statement. The

reason behind choosing the Likert-type scale was done based on the previous work of

Bhatti, (2007) and Amin et al., (2006).

3.9 Sampling Method

After evaluating all possible methods of sampling, the most proper method for this

research has been identified as convenience sampling method. This sampling method is a

non-probability sampling technique where subjects are selected because of their

convenient accessibility and proximity to the researcher. Convenience sampling

generally assumes a homogenous population, and that one person is most likely like the

other. Distribution of the questionnaires was done through personal administration.

Written questionnaires reduce interviewer bias because there is uniform question

presentation (Jahoda, et al., 1962).

52

3.10 Sample Size/Population

A total of 230 questionnaires were distributed randomly. The target respondents

were those who are able to communicate in English, as the questionnaire will be

constructed using English as the medium. Target respondents were people who own and

use mobile communication devices, such as PDAs, hand phones or smart phones. The

study will be covered within MMU Melaka Campus, which will include students from

various faculties and departments. The distribution method used for this study was paper

based questionnaires.

3.11 Unit of Analysis

For the unit of analysis, the focus group was individuals from the workforce and

students within MMU boundaries, who are mobile service subscribers, aged between 20

– 49 years from various countries, background, religion, gender and age. The reason

behind choosing this range is because based on the Hand Phone User Survey, developed

by the Malaysian Communications and Multimedia Commission, the 20 – 49 age group

has been illustrated as the highest users of mobile phones for 3 years of survey, from the

year 2005 – 2007, the last survey being published was in 2007. Besides this, sources

were students from various faculties, for instance, Faculty of Engineering, Faculty of

Information Science and Technology and Faculty of business and Law. The motive

behind this choice was that most of the students in Multimedia University are internet

savvy, own mobile phone and have easy access to the internet and also Wi-fi around the

campus and at home. The reason why the questionnaires were targeted at individuals and

not corporations is because corporations are usually bound to their personal corporate

culture and changes are usually decided by the management.

53

3.12 Data Analysis Techniques

For the demographic section, Descriptive statistics was implemented to describe

the basic features of the data in the study. Descriptive statistics present simple summaries

about the sample and the measures.

As for the constructs, inferential statistics was used. Inferential statistics are used

in order to make judgments of the probability whether an observed difference between

groups is a dependable one or one that might have happened by chance in this study.

Multiple regression analysis has been chosen to test the hypotheses for the purpose of

this study. The reason behind choosing Multiple regression analysis is because it is

basically applied to analyze relationships between a single dependent variable and a

number of Independent variables (Hair et al., 2005).

To implement data analysis, Statistical Package for the Social Sciences (SSPS) was

adopted. To ensure the accuracy of the data, the data will be entered twice and to be able

to check for any inconsistencies.

3.13 Limitation

A few possible limitations have been identified previously. Firstly, there is a

possibility that all the questionnaires handed out will be answered. Secondly, there might

be candidates in the focus group who are reluctant to answer the questionnaires handed

out. Thirdly, the practice of online facilities generally e-mail might bring a problem

where the recipient does not reply the questionnaire which has been sent to them.

54

3.14 Summary

In this chapter, it gives an elaborated explanation about the method used to collect

the data, procedures used to collect the data and the methods used to analyze the data

acquired from the questionnaires. In order to develop the questionnaire, previous works

regarding the factors of mobile banking have been examined and adopted. Besides this,

the targeted group of individuals chosen to complete the questionnaires were aged

between 20 – 49 have been identified and reasons behind selecting this age group have

also been explained in this chapter. This sampling method, which is snowball sampling

was selected in order to achieve real, accurate and unbiased data.

55

CHAPTER 4

DATA ANALYSIS AND FINDINGS

4.1 Introduction

The objective of this chapter is to confer the data analysis and findings of

this research based on various tests that were conducted on questionnaire items. First,

respondents profile is discussed which includes demographics as well as their mobile

usage. Subsequently, mean analysis for each variable is discussed using the means and

standard deviations of items in each variable. This chapter also discusses Reliability

tests and whether the results are reliable or not. Cronbach’s Alpha was used to conduct

the reliability tests. Correlation of all variables was tested using the Spearman Rho’s

correlation coefficient, which was also used to test for hypotheses. Finally, a summary

of this chapter as well as a summary of the hypotheses results is included.

56

4.2 Descriptive Analysis

Of the 230 questionnaires that were distributed, 200 questionnaires were

returned. However, 10 of them had to be rejected due to missing answers or incorrect

filling-in. This means that there was a response rate of 82.61. Data was analyzed using

the SPSS (Statistical Package for Social Science) software. Table 4.1 below shows a

general demographic profile of the respondents and Table 4.2 on the next page shows

technical profile of respondents.

Table 4.1 Demography profile of respondents

Frequency Percentage Cumulative

Percentage

Gender Male

Female

Total

119

71

190

62.6

37.4

100.0

62.6

100

Age group 15-20 years

21-25 years

26-30 years

31- & above

Total

31

153

4

2

190

16.3

80.5

2.1

1.1

100.0

16.3

96.8

98.9

100.0

Nationality Malaysian

Others

Total

74

116

190

38.9

61.1

100

38.9

100.0

Race Malay

Chinese

Indian

Others

Total

34

35

7

114

190

17.9

18.4

3.7

60.0

100.0

17.9

36.3

40.0

100.0

Marital Single 182 95.8 95.8

57

Status Married

Total

8

190

4.2

100.0

100.0

Faculty FBL

FIST

FET

Total

106

36

48

190

55.8

18.9

25.3

100.0

55.8

74.7

100.0

Monthly

income

RM0-RM500

RM501-RM1000

RM1001-RN1500

RM1501-RM2000

RM2001-RM2500

RM2501 & ABOVE

Total

35

66

38

17

23

11

190

18.4

34.7

20.0

8.9

12.1

5.8

100.0

18.4

53.2

73.2

82.1

94.2

100.0

58

Table 4.2: Respondents’ profile of Understanding m-banking

Frequency Percentage Cumulative

Percentage

Familiarity with

mobile banking

Yes

No

Not that much

Total

118

41

31

190

62.1

21.6

16.3

100.0

62.1

83.7

100.0

Used mobile banking

before

Yes

Never

Once before

A few times

Intending to use in future

Total

79

62

24

21

4

190

41.6

32.6

12.6

11.1

2.1

100.0

41.6

74.2

86.8

97.9

100.0

Used mobile devices <1 year

1-less than 3 years

3-less than 5 years

5 or more years

Total

57

62

25

46

190

30.0

32.6

13.2

24.2

100.0

30.0

62.6

75.8

100.0

Satisfaction from

mobile application

Yes

No

Total

130

60

190

68.4

31.6

100.0

68.4

100.0

Use of mobile

banking

Very unlikely

somewhat likely

not sure

somewhat likely

very likely

Total

21

35

57

56

21

190

11.1

18.4

30.0

29.5

11.1

100.0

11.1

29.5

59.5

88.9

100.0

Most of the respondents are already familiar with mobile banking with

62.1%. Results also have shown that 32.6% have never used mobile banking before,

59

which could be because the banks they are dealing with doesn’t provide this service or

didn’t properly advertise it to its customers. Majority of respondents are satisfied with

their mobile application with a contribution of 68.4%. Respondents that have used

mobile banking before have contributed to a 41.6% which is considered below average.

When the respondents were asked whether they intend to use mobile banking, 29.5%

mentioned that somewhat they’re likely to use mobile banking.

4.2.1 Gender

Figure 4.1 Number and percentage of respondents’ gender

MALE63%

FEMALE37%

From Fig. 4.1 it is evident that the percentage of female respondents was considered low

at only 37%. Of all the 190 respondents, only 71 of them were female. Males on the

other hand were considered higher with 63%, i.e. male respondents were 119 male.

60

4.2.2 Age

Figure 4.2: Respondents age

15-20 years 21-25 years 26-30 years 31- & above0

20

40

60

80

100

120

140

160

31

153

4 2

16.3

80.5

2.1 1.1

Series2Series2

Respondents were mainly young. Those in the range of 21-25 years were the most

respondents. They were 153 in total, which were 80.5% of total respondents. This

percentage could have been due to the fact that the average age of most university

students is in the range of 21-25 years. Those aged 15-20 were the second largest group

having 16.3% or 31 of total respondents. There were only 4 respondents aged at 26-30,

having 2.1% presentation. Finally, those in the age bracket of 31and above were only 2

(1.1%).

61

4.2.3 Nationality

Figure 4.3: Nationality

1 20

20

40

60

80

100

120

74

38.9

116

61.1

MalaysianOthers

There were two categories in nationality of respondents: Malaysians and others.

According to figure 4.3, majority of the respondents were others contributing to 61.1%

or 116 respondents from comprised from different nationalities. Malaysians, who

consists of the three ethnicities (Malay, Chinese and Indians) contributed to 38.9%, i.e.

74 respondents.

62

4.2.4 Race

Figure 4.4: Race

Malay Chinese Indian Others0

20

40

60

80

100

120

34 35

7

114

17.9 18.4

3.7

60

Series2Series2

There were four categories in race or ethnicity of respondents: Malay, Chinese,

Indian and Others. By Others, we refer to the Non-Malaysians. According to figure 4.3,

majority of the respondents were Others contributing to 60%. Chinese with 18.4%

contribution comes after others (Non-Malaysians). Malaysians were too close to the

Chinese with only one respondent behind, they had a total of 35 respondents and 17.9%

of contribution. Respondents from the Indian race were few with only 7 respondents.

4.2.5 Marital Status

63

Figure 4.5: Marital Status

0

20

40

60

80

100

120

140

160

180

200 182

95.8

8 4.2

Series2Series2

Figure 4.5 above shows the marital status of the respondents. Not surprisingly,

majority of the respondents were single with a contribution of 95.8%. This is normal

because most of university level students are single and not yet settled for marriage.

Responses from Married individuals were very few with 4.2% responses.

4.2.6 Faculty

64

Figure 4.6: Faculty

FBL FIST FET0

20

40

60

80

100

120 106

36

48

55.8

18.925.3

Series2Series2

Figure 4.6 shows the faculties of which the respondents are related too. The study

covered three of Multimedia University (Melaka Campus) faculties. FBL (Faculty of

Business and Law) FIST (Faculty of Information Science and technology) and FET

(Faculty of Engineering and Technology). Majority of respondents are from FBL with

a contribution of 55.8% which is equal to 106 respondents in total. Respondents from

FET come next with 48 responses and a contribution of 25.3%. Additionally,

respondents from FIST made a contribution of 18.9% i.e. 36 responses.

65

4.2.7 Monthly Income

Figure 4.7: Monthly Income

RM0-RM500

RM501-RM1000

RM1001-RN1500

RM1501-RM2000

RM2001-RM2500

RM2501 & ABOVE

0

10

20

30

40

50

60

70

35

66

38

1723

11

18.4

34.7

20

8.912.1

5.8

Series2Series2

Figure 4.7 above illustrates income ranges of the respondents. It is evident that least

respondents were in the range of RM2501 & Above (5.8%). This could have been

because these respondents are on Government scholarship, etc. The most respondents

on the other hand were in the range of RM501-RM1000 (34.7%). This is illustrated by

the fact that respondents were students and the income represented the allowance they

get from their guardians (whether they are on scholarships or self-sponsored). The

income was in terms of monthly basis and not annual.

66

4.3 Mean values of respondents

Table 4.3: Mean analysis for perceived usefulness

Item ID Item DescriptionMean

(n=190)Std.

Deviation

PU1 Mobile banking would be useful in conducting

my banking transactions

3.5316 .85854

PU2 Using mobile banking enables me to conduct

banking transactions more quickly

3.6842 .81342

PU3 If I were to adopt mobile banking, it would be a

more effective way to make transactions

3.7000 .86648

PU4 Mobile banking would give me greater control 3.6526 .87006

PU5 Mobile banking would improve the quality of

my decision making

3.4053 .89026

PU6 Using m-banking will allow me to enjoy a

variety of services regardless of my recent

location

3.6421 .88987

PU7 I am able to find mobile connectivity in the

remotest places, including areas where internet

applications is weak

3.4579 .97905

67

Based on the results from table 4.3, apparently most respondents were close to neutral,

when asked if mobile banking would be useful when conducting their banking

transactions with a mean of 3.5316. When asked if using mobile banking enables them to

conduct banking transactions more quickly, majority were also close to neutral with a

mean of 3.6842. The highest agreement rate among subjects stating a mean of 3.7000

tended to agree that if mobile banking were adopted, it would be an effective way to

make transactions. Response regarding mobile banking giving respondents greater

control was positive with a mean 3.6526. Additionally, when asked if mobile banking

would improve the quality of the respondents’ decision making, the mean was close to

neutral with 3.4053. Thought using m-banking will allow them to enjoy a variety of

services regardless of my recent location with a mean of 3.6421. Being able to find

connectivity in the remotest places, including areas where internet application is weak

reporting a mean of 3.4579.

Note: PU (perceived usefulness)

68

Table 4.4: Mean analysis for perceived ease of use

Item ID Item Description

Mean(n=190)

Std. Deviation

PE1 I find banking transactions on mobile phones easy and simple

3.5579 .91102

PE2 I find mobile banking clear and understandable proficient

3.5895 .87281

PE3 It would be easy to do what I want while using mobile banking

3.6211 .79254

PE4 I find mobile banking through cell phone very user friendly

3.4789 .99047

PE5 I find mobile banking less time consuming 3.6737 .89018

PE6 Using mobile banking can be frustrating (R) 2.6579 1.02550

PE7 I find certain services on mobile phones very friendly, especially when browsing internet-like interfaces on mobile devices

3.5579 .95081

Table 4.4 above represents the means and standard deviation of responses about the

variable perceived ease of use. Respondents slightly agreed that finding banking

transactions on mobile phones easy and simple with a mean of 3.5579. Respondents with

a mean of 3.5895 agreed that mobile banking is clear and understandable. They also

agreed that it would be easy to do what they want while using mobile banking with mean

values of 3.6211. Respondents also agreed that they find mobile banking through cell

phone very user friendly with mean values of 3.4789. The highest agreement rate among

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subjects stating a mean of 3.6737 stated that mobile banking is less time consuming.

Majority disagreed that using mobile banking can be frustrating with mean values of

2.6579. Respondents find certain services on mobile phones very friendly, especially

when browsing internet-like interfaces on mobile devices with mean values of 3.5579.

Note: PE (perceived ease of use)

Table 4.5: Mean analysis for perceived compatibility


Mean(n=190)

Std. Deviation

PCO1 I find mobile banking compatible with my beliefs and the way they are accustomed to work

3.4632 .88264

PCO2 I find mobile banking compatible with my past experience

3.2316 .80937

PCO3 With mobile banking, I am able to combine services and technologies into my daily life

3.5789 .78449

PCO4 I believe mobile banking have filled all the gaps caused by internet banking

3.5000 .91865

PCO5 I find mobile banking the best way to manage and control my finances

3.3684 .90913

PCO6 I believe mobile banking perfectly assembles my lifestyle

3.4789 .95235

Table 4.5 above shows the means and standard deviations of the responses regarding the

variable: perceived compatibility. Respondents slightly agreed that mobile banking is

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compatible with their beliefs and the way they are accustomed to their work with mean

values of 3.4632. Most disagreed when asked if mobile banking was compatible with

their past experience 3.2316. Respondents also slightly agreed that they’re able to

combine services and technologies into their daily lives with mean values of 3.5789.

They also agree that mobile banking have filled all the gaps caused by internet banking

with means values of 3.5000. They slightly agreed that mobile banking is the best way to

manage and control their finances with mean values of 3.3684. Respondents to some

extent agreed that they believe mobile banking perfectly assembles their lifestyle with

mean values of 3.4789.

Note: PCO (perceived compatibility)

Table 4.6: Mean analysis for perceived self-efficacy

Item ID Item DescriptionMean

(n=190)Std.

Deviation

PS1 I am familiar with mobile device 3.5895 .98125

PS2 I am familiar with checking my account balances through my mobile device

3.4684 1.02175

PS3 I am familiar with paying bills through my mobile device

3.3000 1.04881

PS4 I am of complete awareness and understanding of the benefits provided by mobile banking

3.4947 .96908

PS5 I am always willing to try new things 3.8632 .91560

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Based on the results from table 4.6, it is clear that most respondents were close to neutral

when asked if they were familiar with mobile devices. When asked if they are familiar

with checking their account balances through their mobile devices, the mean value also

turned out to be somewhat neutral, i.e. 3.4684. Respondents being familiar with paying

bills through their mobile devices reported a mean value of 3.3000. When asked if

they’re of complete awareness and understanding of the benefits provided by mobile

banking, neutrality was also the outcome with mean value of 3.4947. Respondents

willing to try new things showed us the highest agreement rate among subjects stating a

mean of 3.8632.

Note (perceived self-efficacy)

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Table 4.7: Mean analysis for subjective norms


Mean(n=190) Std. Deviation

SN1 People who influence my behavior suggest that I use mobile banking

3.3526 .84005

SN2 If I use mobile banking, most of the people who are important to me will grade it as useful

3.3947 .82742

SN3 If I use mobile banking, most of the people who are important to me will regard it as valuable

3.4158 .91476

SN4 The reason why I chose to use mobile banking is because of the environment I live in

3.5474 .94582

SN5 I find it very critical that my surrounding have a positive perception about using mobile banking

3.4842 .90107

SN6 The media is considered the strongest influence adopters may take into account when choosing mobile banking

3.5474 .84538

Table 4.7 above shows the means and the standard deviations of the various responses

for subjective norms. When asked if people who influence their behavior suggest that

they use mobile banking, mean value appeared to be 3.3526. Respondents were also

slightly neutral with mean value of 3.3947 and 3.4158, when asked if they used mobile

banking, most of the people who are important to them will regard it as useful and

valuable. Respondents slightly agreed when asked if the reason why they chose to use

mobile banking is because of the environment they live in with mean value of 3.5503.

Moreover, respondents tended to agree that they find it very critical that their

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surroundings have a positive perception about using mobile banking, showing a mean of

3.4842. Considering the reason why the respondents chose to use mobile banking is

because of the environment they live in and that media as the strongest influence

adopters may take into account when choosing mobile banking showed mean values of

3.5474 for both questions.

Note: SN (subjective norms)

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Table 4.8: Mean analysis for perceived credibility


Mean(n=190)

Std. Deviation

PC1 I believe that trust affects the demand for m-banking services

3.6789 .93553

PC2 I am comfortable with typing my credit/debit card detail in my mobile for a payment

3.3105 .95585

PC3 I believe that my transactions with mobile banking providers are likely to be safe

3.3421 .94495

PC4 I trust mobile banking providers because they keep my best interest in mind

3.3947 .92980

PC5 I find banking via mobile devices a way to reduce the risk of fraud

3.3368 .94964

PC6 I think that mobile banking providers do not sincerely consider security and privacy concerns

3.3632 1.03878

PC7 Considering security and privacy protection will make it less difficult to use mobile banking

3.3263 .83498

Based on the results from table 4.8, it is clear that most respondents were somewhat

neutral when asked if they believe that trust affects the demand for m-banking services

with mean value of 3.6789. When asked if they were comfortable with typing their

credit/debit card detail in their mobile for a payment, the concluded mean value was

3.3105. Additionally, respondents tended to slightly agree when asked if they believe that

transactions with mobile banking providers are likely to be safe with a mean value of

3.3421. The highest agreement rate among subjects reporting a mean value of 3.3947 was

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when they were asked if they trusted mobile banking providers because they keep their

best interest in mind. Respondents slightly agree that they find banking via mobile

devices a way to reduce the risk of fraud with a mean value of 3.3367. Thinking that

mobile banking providers do not sincerely consider security and privacy concerns came

up with a mean value of 3.3632. Considering security and privacy protection will make it

less difficult to use mobile banking with a mean of 3.3263

Note: PC (perceived credibility)

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Table 4.9: Mean analysis for perceived risk


Mean(n=190) Std. Deviation

PR1 I find using mobile banking in my transactions not risky

3.0842 .97767

PR2 I do not experience any uncertainties or trust issues when making purchasing decisions

3.2789 .86745

PR3 I find it very risky to type in my personal details when using mobile banking

3.4737 .99567

PR4 I believe mobile banking is not secure enough to keep passwords or codes safely

3.6105 .97367

PR5 I believe mobile banking is more secure than internet banking

3.3526 1.07736

Table 4.8 shows us the mean analysis for perceived risk. Respondents find using mobile

banking in their transactions not risky with a mean of 3.0842. Not experiencing any

uncertainties or trust issues when making purchasing decisions had a slight agreement by

the respondents with a mean value of 3.2789. When asked if they find it very risky to type

in their personal details when using mobile banking, it led to mean of 3.4737.

Respondents agreed that mobile banking is not secure enough to keep passwords or codes

safely with the highest rate of agreement among the respondents (mean= 3.6105).

Believing mobile banking is more secure than internet banking, leading to a mean of

3.3526.

Note: PR (perceived risk)

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Table 4.10: Average mean of all variables

Variable Mean (n=190) Std. Deviation

Perceived usefulness 3.7316 .80116

Perceived ease of use 3.6421 .82187

Perceived compatibility 3.6895 .87493

Perceived self-efficacy 3.4211 .97676

Subjective norms 3.6000 .88372

Perceived Credibility 3.8684 .90767

Perceived risk 3.8947 .99175

Average mean and standard deviation of all variables was carried out and results were

shown in table 4.10. Based on the results, perceived risk had the largest mean average of

3.8947. This meant that the majority of the respondents agreed, on average, regarding

the questions asked about the variable. Perceived self-efficacy was the only variable

with a mean average of less than 3.5 having 3.4211. Perceived usefulness had an average

mean of 3.7316. Perceived ease of use on the other hand had a mean average of 3.6421.

Perceived compatibility and subjective norms had average means of 3.6895 and 3.6000

respectively. Perceived credibility had the second largest mean average of 3.8947.

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4.4: Reliability Analysis

Reliability analysis was conducted for this test using the cronbach’s alpha.

The minimum acceptable alpha for scale reliability is 0.60, this is according to Klassen

(2003). All the variables were in the range of 0.60 and above except perceived ease of

use with 0.589. Reliability analysis of perceived usefulness was 0.758, perceived

compatibility had an alpha of .773, perceived self-efficacy was .680, subjective norms

was .719, reliability analysis for perceived risk was .629. Mobile banking adoption, the

dependent variable, had an alpha of .740

Table 4.11 Reliability analysis for all variables

Code Variable No. of

items

Cronbach

Alpha

PU Perceived usefulness 7 .758

PE Perceived ease of use 7 .589

PCO Perceived compatibility 6 .773

PS Perceived self-efficacy 5 .680

SN Subjective norms 6 .719

PC Perceived credibility 7 .698

PR Perceived risk 5 .629

DV Dependent variable 7 .740

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4.5 Normality test

4.6 Correlation analysis

In this research, Pearson correlation analysis was used to identify the relationships

between the variables. Correlation is a statistical technique that used to determine

80

whether and how strongly pairs of variables are related. Correlation coefficient ranges

from -1.00 to + 1.00. A positive correlation result show how a positive relationship

between the variables and a negative correlation result shows a negative relationship

between the variables.

Table 4.12 Correlation matrix

Mean of perceivedusefulness

Mean of perceived ease of use

Mean ofperceivedcompatibility

Mean of perceived self-efficacy

subjective norms

Perceived credibility

Perceivedrisk

Dependent variable

MPUPearson CorrelationSig. 2-tailedN

1

190

MPEPearson CorrelationSig. 2-tailedN

.546**.000190

1

190

MPCO

Pearson CorrelationSig. 2-tailedN

.589**.000190

.567**.000190

1

190

MPSPearson CorrelationSig. 2-tailedN

.574**.000190

.501**.000190

.628**.000190

1

190

MSNPearson CorrelationSig. 2-tailedN

.516**.000190

.361**.000190

.548**.000190

.542**.000190

1

190

MPCPearson CorrelationSig. 2-tailedN

.468**.000190

.386**.000190

.492**.000190

.538**.000190

.567**.000190

1

190

MPRPearson CorrelationSig. 2-tailedN

.247**.000190

.168**.000190

.380

.000190

.422**.000190

.473**.000190

.488**.000190

1

190

MDVPearson CorrelationSig. 2-tailedN

.468**.000190

.442**.000190

.489

.000190

.458**.000190

.460

.000190

.417**.000190

.374**.000190

1

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** Correlation is significant at the 0.01 level (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed)

Table 4.12 shows the results of pearson correlation matrix between variables. Based on

the result, it demonstrates that all the independent variables are significant if p-value is

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smaller than 0.01. Therefore, we can conclude that all the independent variables show a

significant and positive correlation towards the dependent variable.

4.6 Regression Ananlysis

Table 4.13: Regression Analysis on R & R Square

R R Square Adjusted R square Std. error of the estimate

Durbin-Watson

0.604a 0.365 0.341 0.45493 1.918

Table 4.13 not only illustrates a statistical test of the model, but also the value of R,

the corresponding R square, and the adjusted R square. The column that is labeled as R

shows the value of the multiple correlation coefficients. It’s generally a simple

correlation between the dependent variable and the independent variables. The adjusted R

square provides an idea of how well the model generalizes and its value is considered

relatively close to the value of R square. The last column of the above table demonstrates

the Durbin-Watson, this statistic helps to identify whether the assumption of the

independent errors is acceptable or rational. The closer the value to 2, the better, and for

this data the value 1.918, which is relatively to close that the assumption has almost been

met.

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Regression Coefficients

Unstandardized coefficients

Collinearity statistics

Model B Std. Error Beta T Sig. Tolerance VIF

Constant

MPU

MPE

MPCO

MPS

MSN

MPC

MPR

0.873

0.142

0.206

0.107

0.044

0.128

0.045

0.144

0.290

0.083

0.087

0.082

0.074

0.081

0.080

0.065

0.143

0.182

0.115

0.051

0.129

0.045

0.160

3.015

1.722

2.357

1.297

0.595

1.573

0.563

2.205

0.003

0.087

0.019

0.196

0.553

0.118

0.574

0.029

0.504

0.587

0.446

0.469

0.518

0.544

0.664

1.984

1.705

2.241

2.131

1.929

1.838

1.506

The first part of table 4.14 shows us estimates for the b values and that these values

specify the individual contribution of each variable to the model. The b values clarify to us

the relationship between the dependent variable (DV) and each independent variable. If the

value is positive, then there is a positive relationship between the independent variables and

the outcome while a negative coefficient indicates a negative relationship. The above data

clearly states that all the variables have positive b values which indicate a positive

relationship between each variable and the dependent variable.

The standardized beta values on the other hand are all measured in standard deviation

units and so are directly comparable. The higher the standardized beta value, the more

impact it has on the model. For instance, MPE with a beta value of 0.182 has more impact

on the model as compared to MPU that contributed to a beta value of 0.143.

The second last column shows the tolerance values, which is the measure of the

correlation between the variables and can diverge between 0 & 1. The closer the tolerances

value for a variable to 0, the stronger the relationship between this variable and the other

independent variables. In addition, tolerance value should be less than 1.0, if not the result

83

will indicate multicollinearity problem occurrence. VIF on the other hand, which is found at

the end of the table, is an alternative measure of collinearity in which a large value shows a

strong relationship between the variables

Summary of hypotheses

Hypotheses Decision

H1 The usefulness of mobile banking will influence my intention to use it. Supported

H2Perceived ease of use will influence my decision to adopt mobile banking.

Not

Supported

H3 Perceived compatibility will play a significant role in determining my intention to use mobile banking

Supported

H4 I don’t need to be thought how to use mobile banking Supported

H5 Subjective norms will influence my decision to use mobile banking Supported

H6 Security and privacy of the system plays a major role in determining my intention to adopt mobile banking

Supported

H7I believe perceived risk will have a significant effect on my decision to adopt mobile baking

Not

Supported

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CHAPTER 5

DISCUSSIONS AND CONCLUSION

5.1 Introduction

The objective of this chapter is to an un-abridged discussion on the hypothesis

results from the previous chapter. Contribution of this study to research and study is also

discussed. Additionally, the limitations of this research to the results are also included in

this chapter. Suggestions for future research are also covered in this chapter. Finally, the

ending this chapter with the conclusion as the summary of the entire research.

5.2 Discussion on Hypotheses


mobile banking.

Perceived usefulness was found to positively affect user acceptance of mobile

banking. This was in consistence with previous research findings, which found the

hypothesis to be supported (Luarn and Lin, 2005; Rao and Troshani, 2007). According to

Davis (1989), perceived usefulness is the degree to which a person believes that using a

particular system would enhance his or her job performance. The results were parallel

with previous researches that found it to have significant effect on information system

and usage. These studies prove the significant effect of perceived usefulness in

individual reactions to information technology. Hence, it is quite expected that the reason

why people use mobile banking is because they find it useful. Amin et al. (2008) stated

that perceived usefulness is strongly correlated with productivity. It suggests that using


enhance job effectiveness and be valuable in the job.

85


mobile banking.

Hypotheses 2 was not supported. From the results it was apparent that perceived

ease of use positively influences use of mobile banking among users in Malaysia.

Perceived ease of use refers to the degree to which a person believes that using a

particular system would be effortless (Davis, 1989). Respondents perceived the system

to be easy to use and did not require loads of knowledge. Luarn and Lin (2005) also

stated that there is a positive causality between perceived ease of use and the usage

intention. ). In the mobile setting, perceived ease of use corresponds to the degree to

which individuals relate freedom of difficulty with the use of mobile technology and

services in daily usage (Knutsen, Constantiou and Damsgaard. 2005).

H3: Compatibility will have a positive effect on the perceived ease of use of mobile

banking.

Perceived compatibility was supported based on the correlation analysis. This

meant that H3 was supported. According to Rogers (1995) perceived compatibility is

defined as “the degree to which an innovation is perceived as being consistent with the

existing values, past experiences and the needs of potential adopters”. Yu (2009) viewed

compatibility as a sign of how well the service or technology fits with the way the

customers manage and control their finances and how it ensembles their lifestyle.

Individuals are more likely to adopt an innovation when they find it compatible with

their past experience, beliefs and the way they are accustomed to work (Agarwal and

Prasad, 1998; Tornatzky and Klein, 1982). Rogers (1995) also added that compatibility

is demonstrated to capture the reliability between innovation and experience, values, in

addition to the needs of potential adopters.

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H4: Self – efficacy will have a positive effect on the perceived ease of use of mobile

banking.

Perceived self-efficacy or H5 was supported which was only a positive prove to

the previous researches that found it to positively influence mobile banking adoption.

Self-efficacy of mobile banking is defined as “a judgment of one’s ability to use a

mobile banking service” (Luarn and Lin, 2004). Self-efficacy could include knowledge,

skill and abilities needed to use the new IT.

H5: Subjective norm will positively influence intention to use Mobile baking.

Subjective norm or H5 was supported based on the correlation analysis. Prior

studies have discovered the importance of such construct in social science studies

including in banking studies (Amin et al., 2007; Nysveen et al., 2005; Kleijnen et al.,

2004). Amin et al., (2007) found that subjective norm was a key interpreter for mobile

banking use from a Malaysian point of view. The results were in line with previous

research that found it to have a significant effect on adoption of mobile banking.

Research also clarifies that the pressure from referent groups to adopt an innovation is

effective because it adds to reducing risk associated with adoption (Ishii, 2004; Lu et al.,

2003; Teo and Pok, 2003). Hartwick and Barki (1994) mentioned that the comparative

influence of subjective norm on intentions is anticipated to be stronger for potential users

with no pervious practice since they are more likely to rely on the reactions of others in

shaping their intention.

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mobile banking.

Perceived credibility was supported in this study. It mainly has two

elements: privacy and security. In this study, it was found that this variable has a positive

effect on the intention to use the system. By definition, perceived credibility is one's

judgment on the privacy and security issues of the mobile banking. As stated by Wang, et

al. (2003) security and privacy are the two important dimensions in perceived credibility.

The significance of security and privacy to the acceptance of banking technologies has

been illustrated in many banking studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001;

and Sathye, 1999). As mobile banking is considered relatively new, perceived credibility

has a higher ability to predict and analyze the uses’ intention to use mobile banking.

H7: Perceived risk will have a negative effect on behavioral intention to use mobile

banking.

Relating to prior studies and group discussions, it is obvious that users’ intention

to use new technology is affected by whether or not such risk does really exist. Perceived

risk will directly influence users’ intention to use mobile banking. Wong and Chang

(2005) considered that risk generally arises from the uncertainty that users face when

they cannot anticipate the consequences of their purchase decision. Perceived risk or H7

was not supported based on the correlation analysis.

88

5.3 Contributions to research

Results from this research provide more evidence that certain factors still influence

adoption to mobile banking regardless of the change in times. Findings were also found

to support the TAM (Technology Acceptance Model) by Davis (1989) which provides

futher evidence of the appropriateness of the model.

The findings of this study also help future researchers. The findings will help

researchers identify gaps that need to be filled in order to conduct further research in this

area. Researchers can also benefit from the results of this study as they can use it as a

reference for their work. It will also assist them in choosing which variables to test and

which not to test in their research.

The findings of this of this study also helps to better understand the factors that

influence adoption of mobile banking in Malaysia, an area that has not been covered

widely.

5.4 Contributions to Practice

This study’s result can also be implemented to help banks better understand what

really influences adults in Malaysia to adopt mobile banking. By referring to these

findings, they can be able to formulate effective techniques to attract this group into

adopting to the system.

The campaigns can be used to educate more on the relative advantage of using the

system as well as how to handle and protect themselves from security and privacy issues.

Campaigns can also be used to enhance confidence among those with low self-efficacy

via manifestations at bank branches using a one-on-one consultancy system. For

instance, these campaigns can be located in universities (since most young adults are in

universities).

89

The government as well as other organizations should motivate their staff and

customers to use the system. Organizations can also influence use of the system by

encouraging their customers to make their payments or check their financial status by

using mobile banking system. They can also influence the use of this system by offering

free training for those interested.

5.5 Limitation of study

1. Most of the data was obtained from the internet, journal publications and library.

There was some lack of information due to unavailable funds to subscribe the articles.

2. Additionally, the study sample was from Multimedia university students who were

selected according to convenience. Additionally the respondents were only from one

certain location and therefore cannot be used to represent the entire population of

Malaysia

3. In terms of the questionnaires, some were not properly filled, which led to distorted

data. Originally the total amount of questionnaires distributed were 230, but due to

respondents not willing to fill up the questionnaires or might have filled in some parts

incorrectly, led to distorting 40 questionnaires.

5.6 Suggestions for future research

Future research should be conducted withholding the limitations of this study in

mind. Suggestions like conducting research in other universities could be useful, like

Hanudin (2007) have suggested. Results can be compared, and general and more

accurate conclusions can be drawn.

90

Research should also be conducted on non-mobile banking users to better know if

they intend to adopt the system in the near future or not. If not, researches could be

conducted to clarify that and find solutions.

Future research shouldn’t just be limited to universities only as there are young

adults who are not in universities but are rather working. If resources are available, this

perspective should be looked at.

5.7 Conclusion

The findings show that intention to use mobile banking can be predicted by

perceived usefulness, ease of use, compatibility, self-efficacy, subjective norm,

credibility and perceived risk. This result signified that the first research question was

answered (What are the key factors that influence the intention to use mobile banking

services in Malaysia?).

Perceived risk yielded a mean of 3.8947, which was higher than all the other variables

(perceived usefulness, 3.7316; perceived ease of use, 3.6421; perceived compatibility,

3.6895; perceived self-efficacy, 3.4211; subjective norms, 3.6000; perceived credibility,

3.8684).

In conclusion, banks could also include extra features on their mobile applications to

make the experience more memorable, fun and secure so that customers will gain the

confidence that will influence them to use this system. Transaction costs should also be

at a very minimal amount.

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APPENDICES

92

Dear respondent,

This questionnaire is done as part requisite to complete my final year project as part of

my Bachelors degree (Hons) on Banking and finance to get an overview on factors influencing

the intension to use Mobile banking services. The study is essential for the legitimate

compilation of information regarding the scope of study.

The questionnaire firstly obtains your information in order to understand the

respondent’s overall response to the questions that is the demographics of the respondents. It

will then on the second part encompass the core questions of the research. These are questions

on the factors influencing the intensions to use Mobile banking services.

The respondent is assured of the utmost confidentiality on all pieces of information provided.

Thank you.Yours faithfully,

………………………NEBIL ABDUREZAK AHMEDBachelor of Business Administration (HONS) Banking and FinanceFaculty of Business and LawMultimedia UniversityMalacca Campus

93

For further clarification or questions please contact:

Nebil abdurezak: E-mail: [email protected] or Phone: 010-2502570 OR

Dr. Uchenna: E-mail: [email protected]

PART I

Please tick the appropriate answer that is applicable to you

Personal information

1. Gender Male Female

2. Age group 15−20 21−25 26−30 31and Above

3. Nationality Malaysian Others (Please specify) ___________

4. Race Malay Chinese Indian Others

5. Marital Status Single Married

6. FacultyFBL FIST FET

7. Monthly income range RM0 -- RM500 RM501--RM1,000 RM1,001 – RM1,5000 RM1501 – RM2,000 RM2,001 – RM2,500 RM2,501 & Above

94

mailto:[email protected]

mailto:[email protected]

Understanding of Mobile Banking

Are you familiar with Mobile Banking services?

□ Yes

□ No

□ Not that much

Have you used Mobile-banking services before?

□ Yes

□ Never

□ Once before

□ A few times

□ Intending to use in future

How many years have you used mobile devices (such as cell phones and PDAs) do you have?

□ <1 year

□ 1- less than 3 years

□ 3 – less than 5 years

□ 5 or more years

Are you satisfied with your banking institution’s mobile application?

□ Yes

□ No

How likely are you to use Mobile banking?□ Very unlikely

□ Somewhat unlikely

□ Not Sure

□ Somewhat Likely

□ Very likely

Part II

Please answer the following questions by circling the one you feel most suitable with.

Perceived Usefulness Strongly Disagree

Disagree Neutral Agree Strongly Agree

Mobile banking would be useful in conducting my banking transactions

1 2 3 4 5

Using mobile banking enables me to conduct banking transactions more quickly

1 2 3 4 5

If I were to adopt mobile banking, it would be a more effective way to make transactions

1 2 3 4 5

95

Mobile banking would give me greater control 1 2 3 4 5

Mobile banking would improve the quality of my decision making 1 2 3 4 5

Using m-banking will allow me to enjoy a variety of services regardless of my recent location

1 2 3 4 5

I am able to find mobile connectivity in the remotest places, including areas where Internet applications is weak 1 2 3 4 5


I find banking transactions on mobile phones easy and simple 1 2 3 4 5

I find mobile banking clear and understandable proficient 1 2 3 4 5

It would be easy to do what I want while using mobile banking 1 2 3 4 5

I find mobile banking through cell phone very user friendly1 2 3 4 5

I find mobile banking less time consuming1 2 3 4 5

Using mobile banking can be frustrating (R)1 2 3 4 5

I find certain services on mobile phones very friendly, especially when browsing internet-like interfaces on mobile device 1 2 3 4 5


I find mobile banking compatible with my beliefs and the way they are accustomed to work

1 2 3 4 5

I find mobile banking compatible with my past experience 1 2 3 4 5

With mobile banking, I am able to combine services and technologies into my daily life

1 2 3 4 5

I believe mobile banking have filled all the gaps caused by internet banking

1 2 3 4 5

I find mobile banking the best way to manage and control my finances1 2 3 4 5

I believe mobile banking perfectly assembles my lifestyle1 2 3 4 5


I am familiar with my mobile device 1 2 3 4 5

I am familiar with checking my account balances through my mobile device

1 2 3 4 5

I am familiar with paying bills through my mobile device 1 2 3 4 5

I am of complete awareness and understanding of the benefits 1 2 3 4 5

96

provided by mobile banking

I am always willing to try new things 1 2 3 4 5

Subjective Norms

People who influence my behavior suggest that I use mobile banking 1 2 3 4 5

If I use mobile banking, most of the people who are important to me will regard is as useful

1 2 3 4 5

If I use mobile banking, most of the people who are important to me will regard is as valuable

1 2 3 4 5

The reason why I chose to use mobile banking is because of the environment I live in 1 2 3 4 5

I find it very critical that my surrounding have a positive perception about using mobile banking 1 2 3 4 5

The media is considered the strongest influence adopters may take into account when choosing mobile banking 1 2 3 4 5


I believe that trust affects the demand for m-banking services. 1 2 3 4 5

I am comfortable with typing my credit/debit card detail in my mobile for a payment

1 2 3 4 5

I believe that my transactions with Mobile Banking providers are likely to be safe

1 2 3 4 5

I trust mobile banking providers because they keep my best interest in mind

1 2 3 4 5

I find banking via mobile devices a way to reduce the risk of fraud 1 2 3 4 5

I think that mobile banking providers do not sincerely consider security and privacy concerns

1 2 3 4 5

Considering security and privacy protection will make it less difficult to use mobile banking

1 2 3 4 5

Perceived Risk

I find using mobile banking in my transactions not risky 1 2 3 4 5

I do not experience any uncertainties or trust issues when making purchasing decisions.

1 2 3 4 5

I find it very risky to type in my personal details when using mobile banking

1 2 3 4 5

I believe mobile banking is not secure enough to keep passwords or codes safely

1 2 3 4 5

97

I believe mobile banking is more secure than internet banking 1 2 3 4 5

Dependent Variables

The usefulness of mobile banking will influence my intention to use it.

1 2 3 4 5

Perceived ease of use will influence my decision to adopt mobile banking.

1 2 3 4 5

Perceived compatibility will play a significant role in determining my intention to use mobile banking

1 2 3 4 5

I don’t need to be thought how to use mobile banking 1 2 3 4 5

Subjective norms will influence my decision to use mobile banking 1 2 3 4 5

Security and privacy of the system plays a major role in determining my intention to adopt mobile banking

1 2 3 4 5

I believe perceived risk will have a significant effect on my decision to adopt mobile baking

1 2 3 4 5

Please rank the following in order of most influential when choosing the type of banking

system to use. With “1” being the most important and “8” being the least important.


Perceived Ease of use



Subjective Norms


Perceived Risk

Thank you for your time and dedication to respond to my questionnaire.

98

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