Tài liệu Adopition of e banking in vietnam

0 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIET NAM International School of Business Vo Ngoc Anh Thy ADOPTION OF E-BANKING IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 1 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIET NAM International School of Business Vo Ngoc Anh Thy ADOPTION OF E-BANKING IN VIETNAM MASTER OF BUSINESS (Honours) Supervisor: Dr. Ngo Viet Liem Ho Chi Minh City – Year 2014 2 Abstract E-banking is one of the most powerful tools for making banking transactions. This study examines the relationship between attributes of E-banking website (e.g. perceived security, perceived privacy, perceived usefulness and perceived ease of use) and Trust in E-banking. This study also examines the extent to which trust in E-banking influence perceived value and company image. Data is collected via a survey of customers of Joint Stock Commercial Bank For Foreign Trade of Vietnam (Vietcombank) Bien Hoa Branch and Nhon Trach Branch, which are located in Dong Nai Province, Southeast Vietnam. The findings of this study show that among the four attributes of E-banking, perceived privacy, perceived usefulness and perceived ease of use had a certain impact on trust in Ebanking while perceived security did not have such impact. This study also found the positive relationship not only between trust in E-banking and perceived value but also between perceived value and company image. Keywords: trust, E-banking, online banking, Internet banking 3 TABLE OF CONTENTS  CHAPTER 1: INTRODUCTION 1.1. Background of the research 1.2. Research problem 1.3. Research questions 1.4. Scope of the research 1.5. Structure of the research  CHAPTER 2: LITERATURE REVIEW AND THEORETICAL FRAMEWORK 2.1. Attributes of E-banking Website 2.2. Trust in E-banking 2.3. Perceived Value 2.4. Company Image  CHAPTER 3: RESEARCH METHODOLOGY 3.1. Research design 3.2. Measurement instruments and questionnaires construction 3.3. Sampling and data collection 4 3.4. Data analysis method  CHAPTER 4: ANALYSIS AND RESULT 4.1. Descriptive analysis 4.2. Measurement validation 4.3. Hypothesis testing  CHAPTER 5: DISCUSSION, IMPLICATION AND LIMITATION 5 LIST OF FIGURES Figure 1: Proposed research model Figure 2: Conceptual framework and data process Figure 3: Model with t-value in hypothesis testing Figure 4: Model with β and R square in hypothesis testing LIST OF TABLES Table 1: Trust in previous researches Table 2: Measurements scale of Attributes of E-banking Table 3: Measurements scale of Trust in E-banking Table 4: Measurements scale of Perceived value Table 5: Measurements scale of Company image Table 6: Type of customers Table 7: Typical services customers using Table 8: Period of time customers started to use the service Table 9: Frequency that customers using E-banking and communicating with bank officers Table 10: Percentage of customers based on age and gender Table 11: Demographic characteristic of the sample Table 12: Cronbach’s alpha for each construct Table 13: Composite reliability for each construct Table 14: Average variance extracted values for all constructs Table 15: Outer loadings of manifest variables Table 16: Construct-Level Measurement Statistics and Correlation Matrix Table 17: Path coefficients of the constructs 6 CHAPTER 1 Introduction 1.1. Background of the research Internet banking is the most recent delivery channel introduced to the financial service industry (Saythe, 1999). Kenneth et al (2010, p. 27) state that “online banking, also commonly known as internet banking or e-banking, has experienced phenomenal growth in recent years”. Along with the trend of using technology in commerce, during the past two decades, there has been a shift from using traditional banking services to using online banking services, so that, customers have more time and more convenience in meeting their needs to use banking services. According to Pew Research Center (2013), 61 percent of all Internet users have used online banking, compared to 58 percent and 18 percent in 2011 (Huffingtonpost, 2014). In another research from eMarketer, almost 73 million adult consumers within the United States engaged in online banking in 2006, and forecasts annual growth rates of between 6.5% and 9.5% through 2010 (eMarketer, 2007). However, many studies indicate that distrust in online banking is not reducing and remains of concern to customers (Johnson, 2007). Customers use online banking because of perceived usefulness and perceived ease of use. These include not being waiting in line at the branch, not being messy and fed up with paper statements taking up space, and accessing to their account 24/7. Despite the 7 increasing number of customers using online banking, many of them have the fears of not being warranted about their security and privacy (Huffingtonpost 2014). Kersner (2005) states that 68% of banking customers who are not interested in E-banking cite privacy concerns as their main reason. The above factors might influence the customers’ trust in E-banking. Consumers concern about the positive benefits of E-banking adoption. These benefits include the cost reductions by shifting services online, the extra value that consumers receive from online customization, and the improved image that banks obtained from good values they provide for their customers (Johnson, 2007). Citibank.com reports that their E-banking customers consume a large number of the bank’s products and are the bank get more than 40% profitable than their offline transactions (Schneider, 2004). 1.2. Research problem Not only in developed economies but also in developing ones such as Vietnam, online services has been the newly-targeting industry through decades. Much as the customers’ demand, E-commerce has not satisfied them yet, because of distrust, Ebanking is one of the problems. In this context, it is worthy of note that understanding the effects of E-banking attributes on trust in E-banking can help to carry out which factor influences trust in E-banking the most, and which one pushes the least. Moreover, keep 8 on examining the relationship between trust in E-banking, perceived value and company image can assist the banking leaders in the way they operate their business, therefore strengthen their business system and provide their customers with the best services, especially in E-banking. 1.3. Research questions The purpose of this study is to develop and empirically validate a theoretical framework that investigates the interrelationships between attributes of E-banking website, trust in E-banking, perceived value, and company image. Specifically, this study attempts to answer the following research questions. 1. To what extent, do attributes of e-banking website (e.g. security, privacy, usefulness, and ease of use) influence trust in e-banking? 2. To what extent does trust in e-banking enhance perceived value? 3. To what extent does perceived value affect company image? 1.4. Scope of the research 9 This study uses the data conducted from a survey in Vietcombank Bien Hoa and Vietcombank Nhon Trach, which are located in Dong Nai Province, Southeast of Vietnam. The questionnaires are designed to the customers of these banks (especially those who already used Vietcombank E-banking), estimated that 200 customers would conduct this survey. The study applied by multimethod approach to data collection, via email, phone and directly right after their transaction. 1.5. Structure of the research The remaining of the thesis is organized as followed. Chapter 1 presents the background, research problem, research questions, and research objectives of the study. It also briefly discusses the scope and the method of data collection. Chapter 2 reviews the literature upon which a theoretical framework is developed in Chapter 2. Drawing on prior research related to the adoption of E-banking, this chapter crafts the research model and hypotheses. In Chapter 3, a research plan is designed with measurement instruments. It also presents the development of the questionnaire, pilot survey and final survey. This chapter discusses about data collection and data analysis methods to test the research hypotheses. 10 Chapter 4 reports findings from the analsyis of collected data, followed by Chapter 5 with discussion on theoretical contributions and implications. Finally, this study makes suggestions for further research on the topic area. References and appendixes are included in the end of thesis. 11 CHAPTER 2 Literature Review and Theoretical Framework This chapter provides a theoretical background about attributes of E-banking, trust in Ebanking, perceived value and company image. Drawing on prior research related to the adoption of E-banking, this chapter crafts the research model and hypotheses. 2.1. Attributes of E-banking Website Past studies has classified online banking attributes into four factors, including perceived security, perceived privacy, perceived usefulness and perceived ease of use. Kenneth et al. (2010) propose that these four attributes of online banking influence the customer’s intention to use E-banking. Service quality research has overwhelmingly focused on customer expectations (Esssam et al., 2006). These attributes help consumers to build trust in the online environment, especially online banking. One of the most significant obstacles to the process of adopting E-banking is security (Saythe 1999). Even though customers are aware of E-banking security risks, they still have a weak understanding of E-banking security. Security relates to the fact that the web site guarantees the safety of their customers’ information, both financial and personal. According to Carlost et al (2006), security also refers to aspects such as integrity, authentification, encryption, and non- recognition, defined as follow: integrity refers to the impossibility of the transmitted or stored data being modified by third parties 12 without permission; confidentiality involves the data being seen by authorized individuals; authentication enables a certain operation to be carried out only after identification, or if there are guarantees of the identity of the party one is dealing with; non-recognition refers to procedures that prevent an individual or organization from denying that they had carried out a certain operation. Lacking of security blocks the growth in the number of online banking users (Carlos et al. 2006). If E-banking security is improved, users will conduct their financial transactions at home, office, or in public places, via the Internet. E-banking absolutely will not be used unless it is considered as safe and secured (Saythe 1999). As such, high level of perceived security is expected to enhance trust in E-banking. As the amount of products and services offered via E-banking grows rapidly, consumers often rely on the fact that their bank is more concerned about privacy issues and protect them (Tero et al., 2004). Privacy refers to the protection of personal information. It is the consumer’s perception of the ability of the bank to protect personal information from unauthorized use or disclosure. It is also an important dimension that may affect users' attitude towards E-banking. In order to secure information privacy, all bank web sites have applied encryption technology to their E-banking, supplemented by a combination of different unique identifiers, for instance, a password, mother's name, a memorable date, or a few minutes of automatically logging users off the account. Customers want to protect their personal information from hackers; on the other hand, 13 they want to use a completely reliable service. If consumers find something risky for their ongoing transactions, they would not use the services anymore much as many past successful issues they have done. Thus, perceived privacy could strongly affect their trust in using E-banking. It is supposed that increased usability reduces the likelihood of error and creates a comfortable environment which would positively influence customer attitude towards the website (Kenneth et al., 2010). Prior research has found that there is a positive relationship between perceived usefulness and E-banking. Davis et al. (1989) defined perceived usefulness as the degree to which a person believes that using a particular system would enhance his or her job performance. E-banking provides sufficient convenience that enables customers to access internet bank at all times and places, they could use E-banking more often and fast. Customers will have a tendency to make Ebanking transactions more frequently if they noticed that using E-banking could help them saving time doing banking services, receiving sufficient information and thus, increasing their productivity. As a result, perceived usefulness could boost E-banking transaction frequency. Ease of use is measured by the degree to which consumers perceive the website is easy to read, understand, and operate (Kim and Niehm, 2009). The understandability and format of information, the way information is presented to consumers, are found to be essential factors of information quality. Therefore, consumers, who regconize that content 14 (text, display, label, item…) on the website is easy to read and understand, and the format of the website is easy to follow, may desire to make transaction more often. It is why the author consider perceive ease of use as a key factor that enhance trust in E-banking. Hence, this study keeps on research the following hypothesis: - H1: Perceived security has positive impacts on trust in E-banking. - H2: Perceived privacy has positive impacts on trust in E-banking. - H3: Perceived usefulness has positive impacts on trust in E-banking. - H4: Perceived ease of use has positive impacts on trust in E-banking. 2.2. Trust in E-banking The nature of online service delivery gives rise to a lack of trust in e-banking among customers. In e-commerce, including e-banking, in order to build trust in customer, the customer must be made or proved that their transaction is safe, and their information absolutely would not be given to other people. There is no direct physical contact between buyer and seller in online environment (Kenneth et al., 2010). The consumers and the suppliers are separated, they cannot observe each other, which is a very important thing to judge trustworthiness. Johnson (2007) says that users’ intention to adopt E-banking arises from its conveniences, such as 24-hour access, no geographic limitations, speed of service, and transaction automation. It means that the four attributes of E-banking website 15 create the perception that E-banking is trustworthy. Thus, they are expected to enhance trust in E-banking. Some research have started to analyze the influence of trust for online marketing such as E-banking, because the lack of trust among online consumers is considered as the main explanation for the low rate of making E-banking transaction (Carlos et al. 2006). Frankly, trust is considered to be one of the main reasons why consumers are still hesitate to conduct their financial transactions online as high levels of perceived risk are associated with some products, such as financial services (Carlos et al. 2006). At other side, when online transaction is done, meanwhile, e-banking provide services immediately, not like other e-commerce purchases, it means customers have more trust in doing e-banking transaction and as a consequence, they will use it more often. Prior research in this area has made significant progress toward understanding how trust web sites and online vendors is developed. Johnson (2007) summarizes some of the important conceptual models proposed by researchers across the marketing and information systems literature in Figure 1. Previously examined antecedents of trust in electronic channels generally comprise four categories of factors. This research stream regards trust in electronic channels as a function of characteristics of both the web site and the customer. 16 - The first group centers on branding, including the effects of incumbent brand reputation or transferable brand equity and brand strength of the firm. - The second one includes privacy and security issues, such as institution-based assurances, independent expert advisors, trust seals, legal and regulatory mechanisms, privacy policy, and situational normality. - The third examines the role of consumer personal dispositions or propensity to trust. - Last, the fourth one looks at the role of a Web site’s performance aspects, such as navigation, order fulfillment, and Web site quality. STUDY Hoffman, Novak, & Peralta (1999) Urban, Sultan, & Qualls (2000) ANTECEDENTS OF TRUST IN ELECTRONIC CHANNEL Lack of control over Web merchants access to personal information Virtual-advisor technology, provide unbiased information, include competitive products, keep your promise, ensure consumer privacy, transferring recognized brand equity Disposition to trust, institution-based trust FOCAL TRUST CONSTRUCT CONSEQUENCES Trust in Web vendors Three stage process: trust in the Internet and specific Web site, trust in information displayed, and trust in delivery and fulfillment Customer loyalty Trusting beliefs (specific others) Trusting intentions, trusting behaviors McKnight, Choudhury, Deputation, site quality, & Kacmar (2002) structural assurances of the Web, perceived risk Trusting intentions: willingness to depend on Web vendor trusting beliefs in Web vendor Balasubramanian, Konana, & Menon (2003) Pavlou (2003) Operational competence, environmental security Trustworthiness of online broker Intention to: follow vendor advice, share personal information, purchase Satisfaction Reputation, past satisfaction, frequency Trust in Web retailer McKnight & Chervany (2002) Intentions to transact, 17 Suh & Han (2003) Bart, Shankar, Sultan, & Urban (2005) Yousafzai, Pallister, & Foxall (2005) Schlosser,White, & Lloyd (2006) Wang, Beatty, & Foxx (2004) Perceived control, authentication, nonrepudiation, privacy protection, data integrity Privacy, security, brand strength, advice, absence of errors, community features, order fulfillment Institution-based trust: security policies, privacy policies, legal & regulatory compliance, trust third party verification, guarantees situational, normality; testimonials Web site design & quality, brand identification Web site investment, privacy, and security Privacy, disclosures, security disclosures, return policy, seal of approval Trust in e-commerce Trust in a Web site reduces perceived risk, usefulness, ease of use Attitude towards using, behavioral intention to use, actual use Behavioral intent Trust in e-banking: ability belief, integrity belief, and benevolent, belief Trusting intentions Ability, integrity, and benevolence Cue-based trust (trust based on cues from initial Web site encounter) Online purchase intentions Book-marking, willingness to provide personal information Source: (Johnson, 2007) Table 1: Trust in previous researches (Johnson, 2007) 2.3. Perceived value According to Parasuraman and Grewal (2002), perceived value includes both “get” component (i.e., the benefits buyers acquire from seller's offering, such as products or services) and “give” component (i.e., the costs the buyers pay for acquiring the offering, including monetary and non-monetary costs). Among them, persons, who recognize that what they receive exceeds what they give, tend to be more satisfied (Zeithaml 1988). 18 Parasuraman and Grewal (2000) proposed four types of perceived value, (a) acquisition value implies the benefits of getting by acquiring a product or service, (b) transaction value refers to the pleasure from a good deal, (c) in-use value means utility experienced from the actual use of the product, and (d) redemption value involves other benefits at the moment of the transaction (for products) or termination (for services). Online banking is able to have great impact on all of these value components. Information or services provided by the web sites may directly or indirect impact value components (Grewal et al. 2003). As so, it is reasonable to assume that trust in E-banking influences perceived value. - H5: Trust in E-banking is positively related to Perceived Value. 2.4. Company Image Long et al. (2013) state that company image refers to the extent to which customers accumulate and develop the reputational knowledge of an organization or a company image is of most importance and is, to a great extent, dependent on how its customers are treated during interactions with the employees (Balmer and Stotvig, 1997; Nguyen and LeBlanc, 1998). Reputational knowledge can be represented by a firm in offering products/services with very high quality (Olavarrieta and Friedmann, 1999). Image is believed to function well to overcome complexities generated by distinct attributes of 19 service and when small problems occur from functional and technical aspects of quality (Long et al. 2013). The more satisfaction online banking services bring to customers, the more perceived values customers obtain. When building value in customers, banks should be concerned with meeting the customers’ specific needs. Bank’s ability to understand its customers’ needs and provide qualitative service in accordance with those needs can consequently boost its credibility and enhance its company image (Fatima, 2011). For the the present time, commercial banks that wish to build a better image consequently need to find out how to improve their customers’ perceived value. Hence, the last hypothesis would argue as: - H6: Perceived value positively influence company image. Figure 1 : Proposed research model