Malaysian Users’ awareness towards Adoption of internet Banking, among Malaysian Consumers.pdf

International Journal of Research and Development Studies of Business and Social Sciences December 2014, Vol. 3, No. 1

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Malaysian Users’ awareness towards Adoption of internet Banking, among Malaysian

Consumers. Ashiquzzaman Md ashiq

Department of Business Administration, Faculty of School of Business Administration,

Newport University CED, Latvia, European Union Abdullah Sarwar

Department of Business Administration, Faculty of Economics and Management Sciences,International Islamic University, Malaysia

Waliur Md Rahman

Department of Department of Faculty of Science, Technology, Engineering and Mathematics

International University of Malaya-Wales, Malaysia

Ekramul Gani Md Ekram

In-house Multimedia College. Malaysia Department of Business Administration, of Faculty of Multimedia , Business School

Abstract

Usage of internet is more readily available in present business environment due to technological

spread . Almost all banks through Internet banking service customers increased benefits by using

the Internet. However, banking services by customers such as the use of technology is still slow

moderately. There is a linking to technology acceptance and adoption by customers of financial

services in these factors which will affect access to those in need. The main objectives of this

study technology acceptance model (TAM), which will affect the internet banking adoption

factors are examined. Has been accepted as a valid instrument for basic information 230, out of

which 250 questionnaires circulated through the survey process. Information from the analysis

because of it, perceived ease of use, perceived usefulness, and perceived social influence impact

significantly on the use of internet banking adoption. The study has found that the social impact

is a robust factor to influence to consumer adoption behavior. Therefore, when analyzing the

results of the above factors it by internet banking customers to receive the acceptance and

adoption of technology is vital to understand. To grab the opportunity to virtually study


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electronic commerce environment, online banking service providers to take measures directed to

adoption of internet banking among Malaysian consumers

Keywords: Using TAM, perceived social influence, perceived usefulness, perceived ease of use adoption, and adoption of internet banking .

1.Introduction

The traditional branch banking, real estate rentals due to increased personnel expenses,

insurance, and the cost of electricity is very expensive. It's almost all banks offering internet

banking customers in a big way and are trying to adopt this medium, the Bank, through the use

of internet banking transaction costs have been estimated to save about 50%. However, the

Bank is still expected to take. Home and / or office with internet access in urban, mostly in the

banking technology savvy youth used in this mode. Net banking customers, it is only used for

information purposes. Citation of internet banking penetration is still not enough. A study of

Internet users assumes that only few bank consumers are using online banking in Malaysia (Ong

et.al 2014). It is clear that consumer demand for Internet banking to grow, in order to address

concerns that consumer banking will be the key to progress. Financial institutions, consumer

internet banking to gain an understanding of the key factors that influence adoption hence, it is

important. This paper specifically investigates the critical elements that influence the consumer

decision to adopt internet banking.. On the other hand, this study will help the Internet banking

to identify the affecting factors which has great impact on the user perception in Malaysia.

2.Literature Review

Internet banking study is not a new area of research. Many researchers have studied the

Influential factors in internet banking which has built the user perception as a whole. User

perception means how the user sees and observes about the internet banking adoption what

he or she uses. There are many factors to take to try and influence consumer behavior in the

adoption of a new technology. Consumer behavior, innovation diffusion, technology

acceptance, online consumer behavior, etc. The theory of many new products, services and


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technology has to try to explain consumer adoption. The identity of this study has to

understand the impact of online banking by taking the model of the technology and the process

of taking shape consumer. Technology Acceptance Model Davis (1989) developed by the (TAM),

'perceived usefulness and the perceived ease of use, user acceptance of the new technology

has two main effects. More recent research on the influence of TAM internet services have

identified additional built. An extensive review of the literature with special reference to small

towns in internet banking is to identify factors that may influence the adoption. In view of the

Tier cities in Malaysian, social, economic, cultural, demographic and geographic setting,

researchers have observed a critical consumer adoption of online services have evaluated

various earlier research findings. The following variables may affect the adoption of internet

banking, the study suggests, is, the user perception may not be the same as it varies according

to the user’s expectation and experience regarding the product. User’s perception of a web-

face plat form community practice may be influenced by several factors. These are discussed

below.

2.1 Perceived Social Influence

One of the most important concerns for users in Social Influence is of image. Social Influence

stored personal information about their users. Thus, the issue of power of image and integrity,

in online banking has gained tremendous interests among the academicians in recent years

(Agarwal, Rastogi, & Mehrotra, 2009). Yuen & Yeow,.(2009) suggest factors social influence, which

are “awareness of the information being collected how the information will be used; the

information’s sensitivity how familiar the consumer is with the entity collecting the information

and what the consumer is receiving in exchange for their banking information”.

These factors affect the user’s decision to disclose on adoption of internet banking. Perceived

Social Influence are the social power of innovation that deals with lots of users’ friendly

system . Internet banking is very popular with young people. A recent study by Garry Tan et.al

(2010) found that, respondents normally prefer to adoption of internet banking to their

friends. Moreover, Hernandez & Mazzon (2007) found that, most of the users provide their

real identity in their profiles. This indicates that, users have a trust on the internet banking

issues and policies of Internet banking that made Internet banking to reach out at the height in


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the field of banking industry. However, besides the positive effects on the online banking

users, negative consequences also occur during the sharing information (e.g internet banking)

. These involves a lots of cyber crimes such as hacking, phishing uploading fake information,

inappropriate mailings, etc were happened in Malaysia (Ong et.al 2014). From the above

discussed literature, the following hypothesis is drawn;

H2: Perceived Social Influence of using internet will have a positive effect on internet banking

adoption.

2.2 perceived usefulness:

Government felt that a person uses a special system to perform its work (Davis, 1989), which is

defined as the degree of trust that will be developed. Through its technology acceptance model,

perceived usefulness significant variable that affects the acceptance by users of the technology.

A number of researchers using internet banking has proved a significant impact on the perceived

usefulness, (Lee-Kelley, Gilbert, & Mannicom, 2003; Meihami, Varmaghani, & Meihami, . 2013.;

Pikkarainen et al. 2004), perceived usefulness net banking was an important factor for determining

concluded. Hence, the account holder will receive the online system of net banking customers

believe that if useful.

H2: Perceived usefulness of using internet will have a positive effect on internet banking

adoption

2.3 Perceived ease of use

Perceived ease of use is defined as the degree to which a person believes that using a

particular system would be free from effort (Davis, 1989). The difference between ease of use

and usefulness is that ease of use is more focused on the consumers’ perception of the process

that leads to the final outcome, whereas usefulness refers to only the outcome of the online

banking experience. (Agarwal & Prasad, 1997; Yin & Faziharudean. 2010) concluded, in a


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simplified manner, that ease of use is how easy the internet is to use as a tool for net banking in

completing their transactions, therefore account holders are more likely to accept to use the

technology the more effortless and easier to complete their transactions.. Obstruction and

significant positive relationship between attitude and behavioral intention suggests that positive

attitude about Internet banking could influence individuals to use Internet banking. Banks can

create a positive attitude amongst its customer towards Internet banking by promoting its

usefulness, ease of use, value, and image (Md Nor & Pearson, 2007; Md Nor & Pearson 2008;

Irfan et al.; 2013) The strengths of TAM are due to its predictive power and the small number of

constructs to predict intention. Several researchers have been replicated Davis’s original study

(Davis, 1989) was empirically evidence on the relationships that exist between perceived ease

of use and system use and adoption behavior is determined by the intention to use a particular

system, which has been in turn is determined by the perceived ease of use. (Adams, Nelson &

Todd, 1992; Cao, X. & Mokhtarian, 2005; Davis et al., 1989 Mathieson, 1991; Muthitacharoen,

Palvia, Brooks & Krishnan, 2006; Taylor & Todd, 1995; Venkatesh, Morris, Davis & David,

2003). Discussed literature, the following hypothesis is drawn;

H3: Perceived usefulness of using internet will have a positive effect on internet banking

adoption

2.4 Adoption of internet banking “accessibility is often used to focus on people with special

needs and their right of access to entities, often through use of assistive technology” (Cassidy

2006). To adopt internet banking , users need to create his/her profile, then they can

communicate through connecting with their financial services as well as other e-finance whom

they are interested in by most exciting experience of internet banking adoption (Ajam & Md

Nor 2013 ).profile normally includes the user’s name photographs demographic information,


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and personal interest (Kassim, & Abdulla, 2006).. Once, the users of Internet banking have their

exiting numerous service list, they can access to their all e-service of bankers and web faces

platform . This all happens when a user is able to access any such bank web faces platform

easily and rapidly. Internet banking provides the user with a choice of who can view their

account details and This prevents unauthorized user from accessing their information and

secure web face platform of internet banking (Alam, & Musa, 2010). However, adoption of

internet banking is important as this offer new opportunities for making business and knowing

others culture financial services, financial investment. From the above discussed literature, the

following hypotheses are drawn;

H4: Perceived Social influence ,Perceived usefulness, Perceived ease of use , of using internet

will have a positive effect on internet banking adoption

3. Research Methodology

Survey method was adopted for data collection regarding the users’ perception towards

Internet banking in Malaysia. For collecting the data, a survey questionnaire was distributed

both physically and through online. After receiving the distributed questionnaires, data analysis

was performed by using SPSS 16.0. A two page questionnaire were developed basing on the

literature review findings. The questionnaire consisted of demographic information such as

title of the respondent, academic background, marital status etc., and questions regarding the

four independent variables. A 5-point Likert scale was used ranging from ‘Strongly Disagree’ to

‘Strongly agree’. Finally, a convenient sampling method was adopted for questionnaires

distribution. A total of 250 questionnaires were distributed out of which 230 were found valid

for further analysis.

4. Results and Discussion

4.1 Descriptive Analysis

Frequency tests were performed for descriptive analysis. The categorical variables are gender,

age, marital status, academic status, race and time spending on Internet banking. From the

table below (Table 1), we can see that our total respondents were 230 from which male are

152 whereas female are 78. The percentage of the gender is male 66.08% and female is


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33.91%. From the total of 230 respondents, 18.26% fall in 18-25 years group, 37.39% fall in

25-35 years group 27.38% fall in 35-45 years group and 16.95% fall in 45 years above group

above. Moreover, this study has found that, 86.66% of the. As majority of the data collection

took place in the universities, thus, most of the respondents are student where 65 of the

total 230 respondents were holding Diploma, 47 were Undergraduates, 151 were Doing

Postgraduates. Whereas respondent , income Up to RM 1000, 34 person , Up to 1000-2000,

person 105, up to 2000-3000, person 52 and finally Above RM 4000 , person 39.

Table 1: Demographic Analysis

Demographic

Variable Category

No. of

Respondents Percentage

Gender

Male 152 66.08

Female 78 33.91

Age

18-25 years 42 18.26

25 - 35 years 86 37.39

35 - 45 years 63 27.38

Above 45 years 39 16.95

Educational

Qualification

Diploma 47 20.43

Undergraduates 151 65.65

Postgraduates 32 13.91

Monthly Income

Up to RM 1000 34 14.78

RM 1000 - RM 2000 105 45.65

RM 2000 - RM 3000 52 22.60

Above RM 4000 39 16.95


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4.2 Reliability Coefficient

Table 2: Reliability Statistics

Cronbach's Alpha

Cronbach's Alpha Based on

Standardized Items N of Items

.963 .964 12

S.No Variable No. of Items Mean Cronbach’s

Alpha

1 Perceived social influence

4 3.983 .790

2 Perceived Usefulness

4 3.685 .811

3 Perceived Ease of Use 4 2.958 .773

From the reliability statistics table below we have got the Cronbach's Alpha (α) which is

0.891.This indicates that, our items for measuring the variables are very consistent (Cronbach,

1951).

Principal Component Analysis (PCA) was carried out to explore the underlying factors

associated with 26 items. We found the KMO of 0.867 which seems to be sufficient as it

exceeds 0.5. Bartlett’s Test of Sphericity is 0.000 meaning that factors that form the variable is

adequate (Table 3).

Table 3: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .867

Bartlett's Test of

Sphericity

Approx. Chi-Square 10472.892

df 338

Sig. .000


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4.3 Factor Analysis

A cut-off point of 0.60 was set to exclude the items from the factor analysis. Total four factors Were extracted and the findings of this study indicate that, each of the four dimensions (privacy, features, share social information, and accessibility) was homogeneously loaded to the different factors (Table 4).

Table 4: Factor Loading Matrices Following Oblique Rotation of Four-factor Solutions

F1 F2 F3

Social Influence

Friends/Co-workers/classmates,

IB Is high profile

using IB service have more prestige

IB is socially accepted

Malaysians like to use IB

91

85

93

81

92

Perceived usefulness

IB improve my performance

Easy to manage banking vi IB

IB save time & Money

Daily Life is very Easy By IB

83

75

79

81

Perceived ease of use

IB is easy

learning to use IB

Becoming skillful at using IB

IB user friendly

98

79

82

91

Notes: Extraction method: principal component analysis. Based on four factors specifications (not on

eigenvalue > 1). Rotation Method: oblique (oblimin – SPSS) with Kaiser Normalization. All numbers in the

Table-4 are magnitudes of the factor loadings multiplied by 100. Loadings that are 0.60 or less are not

shown.


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4.4 Hypothesis Testing

Regression analysis was employed for testing the hypothesis of this research after extraction of

four independent variables from factor analysis. Results for consumer perception showed in

Table 5, 6, 7. Results of this study indicated that 78.3 percent of variance of consumer

perception about adoption of internet banking was explained by these four independent

variables with a significant ‘F’ value of 78.948 being significant at p< .000 (Table 5 and 6).

Therefore, there is an evident that these four factors significantly affect the consumer

perception about internet banking among Malaysia.

Table 5: Model Summary

Model

R

R

Square

Adjusted

R Square

Std. Error of

the Estimate

1 .864(a) .783 .752 .49752489

a Predictors: (Constant), service quality, price, product quality and availability, promotion

Table 6: ANOVA(b)

Model

Sum of

Squares

Df

Mean

Square F Sig.

1 Regression 103.068 6 17.178 78.948 .000(a)

Residual 31.932 129 .248

Total 135.000 135

a Predictors: (Constant), Perceived social Influence , Perceived Usefulness, perceived ease of use

b Dependent Variable: Adoption of internet Banking Among Malaysian consumers.

The hypotheses of this study are concerned with the individual effect of three variables on the

consumer awareness about adoption of internet banking. The test of these hypotheses leads to

accomplish the objectives of this study. The strength of influence of each of the independent


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variables would have on the consumer perception about internet banking been addressed and

results were shown in the Table 7.

Table 7: Coefficients (a)

Model

Unstandardized

Coefficients

Standardized

Coefficients

T

Sig.

B

Std.

Error Beta

1 (Constant) -4.283E-16 .043 .000 1.000

Perceived social

influence .104 .043 .104 6.210 .000

Perceived

Usefulness .342 .043 . 342 5.360 .000

Perceived Ease

Of use .241 .043 .241 7.953 .000

a Dependent Variable: Perception

Testing H1: As a result of the perceived economic impact of Malaysia's consumer Internet

Banking showed that emerges as the most important factor affecting consumer awareness. This

is an important positive impact on the social impact on consumer perception of the results of

this study support the hypothesis is seen from Table 7. This coefficient is based on a positive

social impact, this study created consumer awareness about Internet banking in Malaysia to the

conclusion that there is a significant positive impact. Socially, the impact of his / her friends or

family members to receive net banking and internet banking, merely because a person who's

going to be, which means sensitivity, will be included. For example, friends, keep up to date

with the trend and so, the Malaysian bank customers to pay utility bills, but only balance test


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and offer innovative services quickly, with the credit card Interbank Giro Inter-fund trading,

electronic fund trading account.

Testing All the P <.000 level of statistical evidence is another important determinant felt, and

Internet banking adoption among Malaysian consumers have a positive impact on consumer

perception. To save time and increase productivity, but it depends on the purpose of internet

banking, are only profitable and trading facilities. Malaysian consumers have a significant

impact on the perceived usefulness of internet banking and internet banking has decided to

adopt. This is especially true for Internet banking, service that has been felt, for example, a new

end-user's preference, brick-and-mortar bank, considering the cost of consumer banking, are

attached to the check-in services for the enjoyment of often beneficial, the clearing function

are taken two or three days. There is a public holiday on Saturday and Sunday is usually the

weekend .Interbank Giro Transfer There is no time frame, and we consumers at a cost of 10

cents, with the possible transfer of funds to any account, which is open for 365 days. Hence, the

usefulness of the results we have a significant positive impact on the perception of the

consumer about internet banking was felt at the end of that.

Testing H3: Personality / belief of internet banking have a significant impact on the perception

of the consumer. Since the figure in the Malaysian Internet banking for consumers creates a

positive impact on the perception of consumers. For the sake of greater value to consumers of

the quality of service, is because. For example, you cannot get something they want to do as

net banking faith, innovative services that do not count as long as it may seem. Therefore, the

Malaysian bank customers personality and was believed to have a positive impact. The study of

consumer perception about the social impact of internet banking is affected by the assignment.

The next Government felt, and eventually ease of use and user-friendly. Behavioral / Trust of

internet banking and Malaysia are having a significant impact on the perception of consumers

through web-faces platform.


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5. Conclusion and Implementation

After completing the previous chapters, various conclusions could be made on what is internet

banking, how internet banking is perceived in the minds of Malaysian consumers, and

preference that should be taken to constrain consumers away from adoption of internet

banking . As defined in chapter one, internet banking, counterfeit, imitation and fake products

are all illegal operations done at the lowest cost and offered to consumers at the cheapest

price. Few phenomena can be viewed simplistically as black or white, good or bad, and

commercial internet banking is one such phenomenon. In this study the specific objectives as

mention in chapter one, were to research on which variable plays the most important factor in

the minds of most consumers. There were many factors that influence a consumers’ perception

towards adoption of internet banking . In this paper we mainly discussed on perceived social

influence, perceived usefulness, perceived ease of use . Hypothesis was developed for each of

these variables showing the relationship that the variables have towards consumers’

perception on adoption internet banking by Malaysian consumers. When the regression test

was run, perceived social influence, perceived usefulness, and perceived ease of use showed

that the null hypothesis should be rejected concluding that there is relationship between these

variables and the dependent variable, which is adoption of internet banking among Malaysian

consumers’.

Although most sources say that there is no ending to the word “internet banking ”,

understanding and being aware of why, how, where, and when consumers conscious internet

banking will help reduce anxiety of daily baking life . Social influence being one of the most

essential variable,. This would be a crucial step in driving away consumers from pirated goods.

Malaysia’s government is also aware of this situation and working towards reducing this

problem. All authorities have become aware of the affect that internet banking leave, thus it is

now time to create awareness among the customers.

The lower the cost of adoption, the higher the new innovation such as the web will be adopted

by internet banking. Besides that, internet banking with high profit and will be more likely to


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adopt new innovation compared with traditional banking. It is observed that customer prefer

multiple services or "one-stop comprehensive financial service" instead of single or simple

tasks/transactions. Therefore banks need to build link with other services or enter into business

agreement with major vendors in the market to provide all banking and other financial-related

services to their customers. This might motivate customers to visit more frequently to

consolidate the usefulness of Internet banking services. Conversely, potential customers either

will not adopt services or will select a competitor bank for Internet banking services.

6. Limitation and Direction to Future Research

This research has been applied successfully what we have learnt in the internet banking related

literature of pirated product with evidence from Malaysia. The outcome of this research

showed a comprehensively integrated framework for us to understand the dynamic

relationships among dimensions of social influence, pricing, economy, and personality/belief to

understand the consumers’ perception. However, further research is needed to examine these

factors in Malaysia with additional samples before generalization can be made. Moreover, it is

also needed to extend behavior intensions of consumers about internet banking and pirated

product.

Applying the (SEM) structural equation modeling analysis using confirmatory factor analysis

enables comparing groups by testing measurement in variance. Demographic items could used

to investigate critical factors of descriptive and exploratory effect on adoption of internet

Banking. Comparative analyses also have opportunity to investigate in future Qualitative versus

Quantitative Research adoption of internet banking.


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Malaysian Users’ awareness towards Adoption of internet Banking, among Malaysian Consumers.pdf