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USAGE OF MOBILE BANKING AND ITS EFFECTS ON
CONSUMER BEHAVIOR IN THAILAND
BY
MR. CHANA SILPARCHA
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2017
COPYRIGHT OF THAMMASAT UNIVERSITY
Ref. code: 25605902040087AGC
USAGE OF MOBILE BANKING AND ITS EFFECTS ON
CONSUMER BEHAVIOR IN THAILAND
BY
MR. CHANA SILPARCHA
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2017
COPYRIGHT OF THAMMASAT UNIVERSITY
Ref. code: 25605902040087AGC
(1)
Independent Study Title USAGE OF MOBILE BANKING AND ITS
EFFECTS ON CONSUMER BEHAVIOR IN
THAILAND
Author Mr. Chana Silparcha
Degree Master of Science Program in Marketing
(International Program)
Major Field/Faculty/University Faculty of Commerce and Accountancy
Thammasat University
Independent Study Advisor Associate Professor Kenneth E. Miller, Ph.D.
Academic Year 2017
ABSTRACT
“What is the first thing you do when you wake up in the morning?” it
is highly likely that the answer is you looked at your smartphone. In 2016, Deloitte
conducted a global mobile consumer survey and discovered that 61 percent of people
check their phones within 5 minutes after waking up. Dubbed “the most innovative
invention in the 21st century”, smartphones impacted our lives in many ways and
revolutionized multiple industries. One of the industries disrupted is the banking
industry as mobile banking empowered us to conduct banking activities anywhere at
any time through the comfort of our smartphones. Similar to other ASEAN countries,
Thailand experienced exponential growth in usage of mobile banking as a result of e-
commerce expansion and improved e-payment infrastructure.
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Although studies on the underlying factors that influence mobile banking
adoption has been extensively conducted, research to examine after-adoption behavior
has been neglected. Thus, this research captures the current situation of mobile
banking in Thailand and categorizes mobile banking users into different segments.
Banks and government sectors alike will benefit from this comprehensive research as
they can apply insights to generate suitable products for banking customers and
develop Thailand’s electronic payment infrastructure.
Secondary research from multiple journals and academic articles has been
collected to gain fundamental background knowledge. Later, primary research through
in-depth interviews and an online survey was conducted; statistical analysis was
performed with the help of Statistical Package for the Social Sciences (SPSS)
program.
Results show the majority of respondents likely have a positive perception
towards mobile banking. Furthermore, findings suggest that Thai mobile banking
users can be categorized into 3 segments. The largest segment is made up of heavy
users called “Middle Aged Go-Getter” who seek mobile banking application
reliability and useful features. Another heavy user called “Youthful Minimalist”
values application ease of use and convenience. Finally, “Old School Veterans” are
lights users whose service adoption heavily relies on recommendation from peers and
online reviews.
With the above findings it is recommended that commercial banks should
consistently improve the performance and user friendliness of mobile banking
applications in order to increase usage frequency among current heavy user segments.
In addition, an untapped opportunity with the older user segment is ripe. Commercial
banks need to educate and increase service adoption rate in order to reach the tipping
point.
Keywords: mobile banking, Thai mobile banking user behavior, Thai mobile banking
user segment
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ACKNOWLEDGEMENTS
I would like to express the highest gratitude to my advisor, Professor
Kenneth E. Miller, Ph.D., for his continuous guidance and valuable feedback. His
enormous input and support largely contributed to the success of this research.
Furthermore, I would like to thank all interviewees, respondents, friends
and family members who gave me endless support of throughout the research. Also, a
special thanks to Ms. Thanyathorn Pattana-Amorn who was kind enough to give
consultation and constructive feedback on this report.
Mr.Chana Silparcha
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TABLE OF CONTENTS
Page
ABSTRACT (1)
ACKNOWLEDGEMENTS (3)
LIST OF TABLES (7)
LIST OF FIGURES (8)
CHAPTER 1 INTRODUCTION 1
1.1 Research Purpose 1
1.2 Research Objectives 1
CHAPTER 2 REVIEW OF LITERATURE 3
2.1 Definition of Mobile Banking 3
2.1.1 Positive Impacts of Mobile Banking 4
2.1.2 Negative Impacts of Mobile Banking 5
2.2 Mobile Banking in South East Asia (ASEAN) 5
2.2.1 Mobile Banking Adoption 5
2.2.2 Mobile Banking Penetration 6
2.3 Mobile Banking in Thailand 7
2.3.1 Mobile Banking Trends 9
2.3.2 Challenges of Mobile Banking Adoption 10
CHAPTER 3 RESEARCH METHODOLOGY 11
3.1 Exploratory Research Design 11
3.1.1 Secondary Data Research 11
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3.1.2 In-depth Interview 12
3.2 Descriptive Research Design 12
3.2.1 Survey Questionnaire 12
3.3 Sampling Plan 13
3.3.1 Sample Selection Criteria 13
3.3.2 Recruiting Plan 13
3.3.3 Data Analysis Plan 14
CHAPTER 4 RESULTS AND DISCUSSION 15 4.1 In-depth Interview Analysis 15
4.2 Survey Result Analysis 16
4.2.1 Respondent Profile 16
4.2.2 Mobile Banking Awareness and Usage 18
4.2.3 Segmentation 20
CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS 23 5.1 Conclusions and Managerial Implications 23
5.1.1 Managerial Implication for Commercial Banks 23
5.2 Research Limitations 24
5.3 Suggestions for future studies 24
REFERENCES 26
APPENDICES
APPENDIX A: In-depth Interview Guideline 32
APPENDIX B: Example of Questionnaire 34
APPENDIX C: Respondent Demographic 38
APPENDIX D: Frequency Analysis - Perception 39
APPENDIX E: Attributes Correlation 40
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APPENDIX F: Factor Analysis 41
APPENDIX G: Cluster Analysis 42
APPENDIX H: Cluster Analysis with Respondent Perception 43
BIOGRAPHY 45
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LIST OF TABLES Tables Page
Table 4.1: Respondent’s perception towards mobile banking based 17
on 4 level Likert scale frequency analysis
Table 4.4: Correlation between “Security & Reliability” and 20
“Recommendation from peers & Online reviews”
Table 4.5: Results from cluster analysis with respondent’s perception 22
Table 4.6: Anova results from cluster analysis with respondent’s perception 22
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LIST OF FIGURES Figures Page
Figure 2.2: Digital banking penetration in SEA (%) 6
Figure 2.3: Overview of financial digitization in Thailand 8
Figure 4.2: Top 3 mobile banking brand conversion rate 18
Figure 4.3: Top 3 mobile banking service conversion rate 19
Figure 4.5: Heavy and light user cluster analysis 21
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CHAPTER 1
INTRODUCTION
1.1 Research Purpose
The purpose of this research is to study Thai users’ mobile banking behavior
and identify various user segments. This research is beneficial to commercial banks,
non-bank players (eg. E-wallet companies) as well as the government sector
responsible for shaping digital banking policy. This study is a contemporary topic in
applied marketing
1.2 Research Objectives
The first objective of this study is to determine the current users of mobile
banking as well as their usage patterns and overall trends. Consequently, the second
objective is to categorize mobile banking users into different segments. Lastly, this
study will identify whether there is a change in consumer behavior for each segment.
The sub-objectives of this study are as follows:
Ø To identify awareness and usage among current mobile banking users
• To identify mobile banking usage frequency
• To identify service awareness
Ø To categorize behavior of current mobile banking users
• To determine behavior in usage purpose
• To determine importance of available services that drive usage
• To determine usage occasion
• To determine average transaction amount
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Ø To identify mobile banking user segment
• To explore demographic profile, lifestyle and behavior of each
user segment
• To identify mobile banking needs of each segment
Ø To identify any changes in consumer behavior influenced by mobile banking
Key variables of this study are 1) Mobile banking users’ characteristics such as
age, income, education and occupation 2) Consumer behaviors such as: service
awareness relative to usage rate, service usage frequency relative to branch banking,
purpose of usage, average amount per transaction 3) Psychographic variables such as
personalities, lifestyles, interests, opinions and social class.
Secondary and primary data was collected from both qualitative and
quantitative methodologies. Target respondents are Thais between the age of 15- 54
years old who are current users of mobile banking services.
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CHAPTER 2
REVIEW OF LITERATURE
2.1 Definition of Mobile Banking
Banks around the world are currently interacting with their customers through
multiple channels such as Automated Teller Machines (ATMs), branch banking,
telephone banking, internet banking and mobile banking. (Hoehle, 2012) claimed that
customers select branch banking for complex product categories (e.g. mortgages and
loans) and select mobile banking for simple operations (e.g. bill payment and fund
transfer.)
Mobile-banking or commonly referred to as “M-Banking” is an extension of
internet banking which offers financial services such as balance checking, fund
transfer, stock market transactions, bill payments and top up (Munongo, 2013). Banks
are encouraging customers to adopt mobile banking with the goal of improving
customer relationship management, reducing operational costs and utilizing analytics
to enhance cross-selling (Laukkanen, 2007). Mobile devices applicable for mobile
banking usage includes smart-phone, personal digital assistant devices (PDAs),
wireless tablets and any other devices that can connect to mobile telecommunication
networks (Deshwal, Dr. Parul, 2015).
In recent years, numerous comprehensive research was conducted to determine
the underlying factors that influence mobile banking adoption. (Carlos T., 2017)
highlighted these factors as perceived usefulness, perceived ease of use, perceived
risk, trust, social influence and self-efficacy.
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Regarding factors that undermine the growth of mobile banking, (P. Dupas,
2012) identified security and privacy issues as the two biggest challenges for
consumers to adopt mobile banking. However, these two factors prove to be
insignificant among younger banking customers as (Rammile, 2012) argued that
university students do not consider mobile banking to be prone to risk if operated with
caution. The reason being younger consumers are generally more familiar with the use
of mobile technology thus perceived benefits outweighs perceived risks.
As mobile banking systems become more prevalent throughout the world,
businesses and consumers alike, look forward to how it would revolutionize the
banking industry. However, it is crucial to recognize what this revolution means and
understand both sides of the coin to gain a larger perspective of its implications.
2.1.1 Positive Impacts of Mobile Banking
Cost Reduction: Fundamentally, mobile banking enables banks to provide
services to more customers anywhere at any time at minimal costs. In a
comprehensive report, (Deloitte, 2010) claim that banks can significantly cut
operational costs with mobile banking as branch banking is approximately 50 times
more costly.
Revenue Expansion: (David T., 2013) noted that through mobile banking,
banks are able to collect vast amounts of data and monetize the value of each
customer through big data analytics. Banks will be equipped with insights to enhance
customer satisfaction and improve prospects of acquiring new customers, thus
generating more revenue.
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Enhance customer satisfaction: As mentioned above, utilizing mobile
banking as a channel for important reminders can significantly increase customer
satisfaction. Banking customers will be better informed about outstanding loan
repayments as well as payment of monthly installments. Moreover, banking customers
are provided with real-time updates of their account balance which allows them to be
more flexible when conducting transactions. Lastly, mobile banking can reduce the
risk of credit card fraud by keeping card holders well informed about the purchase
amount for each credit card transaction (Deshwal, Dr. Parul, 2015).
2.1.2 Negative Impact of Mobile Banking
Risk of Security Threats: The number one concern for mobile banking users
is the security of data transmission and user privacy. IBM security expert (Charles,
2017) advise mobile banking users to protect their smart-phones carefully as you
would protect your desktop or personal computers. This is because there is a
possibility that mobile devices can become a victim of targeted malware which may
consist of viruses, Trojan and spyware. Moreover, it is advised that users do not use
mobile banking applications when they are connected to unsecured Wi-Fi networks
such as public Wi-Fi. Hackers can breach the network and gain access to your
unencrypted transactions.
2.2 Mobile Banking in South East Asia (ASEAN)
2.2.1 Mobile Banking Adoption
The evolution of digital banking in ASEAN can be traced back to the
introduction of ATMs (Automated Teller Machine) in the 1980s. Subsequently, in the
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1990s internet banking became more common among affluent desktop and personal
computer owners (DBS Group Research, 2015). In spite of internet banking popularity
in developed Asian countries, the biggest limitation to internet banking is the
requirement of desktop or personal computer computers which were relatively
expensive and inaccessible to many ASEAN citizens at that time.
Interestingly, unlike other developed Asian countries, the majority of ASEAN
countries did not adopt internet banking and later migrated to mobile banking as
ASEAN citizens tend to use smartphones as their primary channel to connect with the
internet. Further fueling the development of mobile banking in ASEAN is the
advancement in broadband cellular network technology and the smartphone
technology.
2.2.2 Mobile Banking Penetration
As reported by (McKinsey&Company, 2015) Singapore with 94 percent is the
current leader in digital banking penetration (via PC or smart phone) among ASEAN
countries. Furthermore, Indonesia, Malaysia and Vietnam all reached approximately
40 percent penetration in 2014. On the contrary, Philippine’s and Thailand’s
penetration is below 20 percent in 2014 with a significant increase since 2011 as
shown below.
Figure 2.2: Digital
Banking Penetration
in SEA (%)
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Moreover, with the exception of Singapore where digital banking penetration
was high in all income segments and age groups, the young and affluent segments are
the early adopters and users of digital banking in ASEAN.
These statistics show that there is a major shift in ASEAN banking industry
which represents an opportunity for both existing banks and new entrants alike.
Existing banks can utilize advanced analytics to leverage existing data to promote
stronger customer satisfaction and solidifying their strong position. On the other hand,
new entrants can solely focus on developing digital capabilities and save costs
establishing expensive branch banking networks (McKinsey&Company, 2015).
2.3 Mobile Banking in Thailand
Thailand is experiencing a rapid increase in smartphone subscription as well
as mobile banking users. According to the (Bangkok Post, 2016) Thailand’s
smartphone subscription is expected to reach 80 million by 2021.
Additionally, Thailand experienced exponential growth in the number of
mobile banking users, number of transactions as well as the value of transactions
between 2011 and 2015. With a CAGR of 81 percent, the number of new mobile
banking users grew from 706,439 to 13,918,815. In accordance to the increasing
number of mobile banking users, the number of transactions also increased
significantly at 67 percent CAGR. Lastly, the value of transactions grew from 187
billion Thai baht to 2,800 billion Thai baht (Bank of Thailand, 2017). The most up to
date info graphic of Thailand’s overall financial digitization is provided in Figure 2.3
below.
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Figure 2.3: Overview of Financial Digitization in Thailand (Source: Bangkok Post)
According to (The Nation, 2016), the number of mobile banking transactions
is continuously outgrowing the number of branch banking transactions. This
represents the digitization of banking in Thailand. Despite the fact that mobile
banking transaction value is only a portion of the total financial technology (fin-tech)
market, according to (Statista, 2017) the transaction value of the Thai fin-tech market
would reach US$23,434 million in 2021, with a projected CAGR of 19 percent.
As one of segments of the Thailand 4.0 initiative, the Thai government aims to
digitize Thailand’s payment infrastructure and transform Thailand into a cashless
society. Thailand E-Payment Trade Association (TEPA) believed that Thailand is on
track to become a cashless society by 2020 (The Nation, 2017). A compelling
indicator of this milestone can be observed from the newly launched “Prompt Pay”
under the national e-payment program. By the end of 2016, 48 percent of all
employees in Thailand registered to the Prompt Pay program (Kasikorn Research,
2017). It can be said that the Prompt Pay program established a new standard for all
banks to accept lower transfer fees in order to reap other benefits in the long run.
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Download statistics from Apple’s App store and Google’s Play Store in 2016
identified, the top 3 mobile banking applications to be K Plus at 41 percent (Kasikorn
Bank), SCB Easy at 12 percent (Siam Commercial Bank) and Bualuang mBanking at
12 percent (Bangkok Bank.) Besides standard services such as balance checking and
money transfer, tech-savvy banks such as Kasikorn Bank and Siam Commercial Bank
also offer extended services such as credit card details and mutual fund purchase via
mobile banking. Notably, telecommunication companies such as True Corporation
and AIS (Advance Info Service) are also emerging as competitors in the mobile
banking market.
2.3.1 Mobile Banking Trends in Thailand
Decreased Dependency on Cash: (Nielsen, 2014) conducted a “Global
Survey of Saving and Investment Strategies” and discovered that 68 percent of Thai’s
preferred form of payment is cash. However, in recent years there has been a decline
in cash dependency as younger generation of Thais become more familiar to cashless
payments through various e-payment channels and mobile banking. Additionally,
Kasikorn and Siam Commercial Bank recently introduced “QR Code Payment” which
will reduce transaction friction between buyers and sellers in the retail sector.
Small and Medium-sized Enterprise (SME) Mobile Banking: As Thailand
has the biggest SME lending volume among ASEAN countries (Deloiotte, 2015), it is
conceivable that multiple banks are trying to capture this large and emerging market
segment. Currently, Kasikorn Bank and Siam Commercial Bank are the only two
banks offering specialized mobile banking services for the SME segment.
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2.3.2 Challenges of Mobile Banking Adoption in Thailand
Adoption Hurdle: Comparable to other ASEAN countries, security and trust
remains a big challenge for mobile banking adoption and usage in Thailand. Based on
an empirical study on mobile banking by (XinLuo, 2010) banks must create more
awareness regarding the benefits of mobile banking, while simultaneously, increase
institutional trust as both factors can increase the adoption rate.
Regulatory Challenges: Although some may argue that the government’s
introduction of “Prompt Pay” program gained modest success, others are anticipating
forthcoming programs such as e-tax payment and overall development in Thailand’s
payment infrastructure. Furthermore, unlike other developed countries in Asia, there
are no incentive schemes implemented to promote e-payments in Thailand. These
schemes may introduce higher VAT rates for cash purchases and reduced tax rates for
e-payment users (SCB Economic Intelligence Center, 2016).
Throughout the literature review a clear definition of mobile banking has been
defined. In addition, the advantages such as cost reduction and disadvantages such as
security risks has been highlighted. Compared to other neighboring countries,
Thailand’s mobile banking penetration is relatively low, nevertheless, there is 1.7
times growth since 2011. This growth will likely continue in accordance with rising
smartphone penetration and introduction of new electronic payment systems
(McKinsey&Company, 2015)
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CHAPTER 3
RESEARCH METHODOLOGY
3.1 Exploratory Research Design
Qualitative and quantitative methodologies have been used for this research.
With the intention to identify user behavior, awareness and usage frequency, the
research was conducted with exploratory research design and descriptive research
design. Findings from exploratory research was later used as a basis to develop an
online questionnaire.
3.1.1 Secondary Data Research
Secondary data research was used to gather background information regarding
current mobile banking usage rate and mobile banking services offered by Thai
commercial banks. Information from reliable online sources such as Thai Bankers
Association (TBA), Bank of Thailand (BOT) and Thailand Board of Investment (BOI)
databases were also collected to statically pinpoint Thailand’s mobile banking
advancement. Multiple academic journals were studied to gain a better understanding
of mobile banking definition, implications and future trends. Additionally, journals
and online articles from leading consultancies such as Deloitte, McKinsiey&Co. and
Kasikorn Research Center served as reliable sources to determine the global mobile
banking landscape and its market potential.
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3.1.2 In-depth Interview
In order to validate and explore the findings from secondary research, a total of
10 in-depth interviews was conducted from November 8, 2017 to December 1, 2017.
The interview length varies from 30 minutes to 1 hour. Each respondent discussed
their current mobile banking usage behaviors, past positive and negative experiences
and ranked attributes they value most in a mobile banking application. A moderator
conducted the all interviews according to predesigned guidelines to make respondents
feel more comfortable, resulting in more insightful responses.
3.2 Descriptive Research Design
Descriptive research design played an important role in systematically
describing the facts and characteristics of a given population of interest. The purpose
of descriptive research was to describe characteristics of Thai mobile banking user’s
behavior and preferences.
3.2.1. Survey Questionnaire
An online questionnaire was constructed to collect information from the target
population to describe commonalities and differences. It consists of five sections,
namely, screening, awareness, usage behavior, perception and demographic. After
respondents qualify as a current mobile banking user within the right age group,
respondents were asked about their mobile banking brand and services awareness.
Next, mobile banking behaviors such as frequency, usage date & time and average
transaction amount was inquired. Later on, respondents had to rank important mobile
banking attributes. In conjunction with the demographic section, the above sections
were used to segment current users and define users profile. Various social media
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outlets such as Line application and Facebook was used and a total of 200 completed
questionnaires was obtained. Questionnaire sample is displayed in Appendix B.
3.3 Sampling Plan
A total of ten people was recruited for the in-depth interview and 240
respondents answered the online questionnaire. Prior to the questionnaire launch, five
pilot tests were conducted to ensure understandability of the questionnaire and the
amount of time required for completion.
3.3.1 Sample Selection Criteria
Ø Gender: Both male and female
Ø Age: 15-54 years’ old
Ø All Socio-Economics Status
Ø Current mobile banking user (last usage not exceeding 3 months)
3.3.2 Recruiting plan
Due to time constraints, non-probability convenience sample was applied for
all in-depth interviews and online surveys. All respondents were recruited through
personal contacts. Screening questions were applied in order to qualify whether the
respondent is a current mobile banking user within the right age group. Target
respondents group were 1) Teenagers 2) Working Adults 3) Retirees.
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3.3.2 Data Analysis Plan
The analysis focused on the result from both qualitative and quantitative
methods. Qualitative data was transcribed with the reduction method while preserving
respondent’s verbatim. The data was used to investigate usage behavior and
perception towards mobile banking. The transcription data was used to gain a better
understanding of consumer language and explore further insights. Regarding
quantitative survey, Statistical Package for Social Sciences (SPSS) was employed to
initially run frequencies, forming a big picture of the data set. Subsequently
correlations between variables was identified and factor analysis was conducted.
Finally cluster analysis was used to conduct segmentation of mobile banking users.
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CHAPTER 4
RESULTS AND DISCUSSION
4.1 In-Depth Interview Analysis
A total of 10 in-depth interviews was conducted to identify current mobile
banking user behavior and to investigate user’s perception toward mobile banking
application. Diverse responses were collected from teenagers (aged 17 and 21 and 22),
young adults (aged 25 and 28 and 29), working adults (aged 39 and 42) and retirees
(aged 64 and 67). All interviewees are Thai and each age group consisted of at least
one male and one female respondent. With the exception of retirees who were aware
of mobile banking applications but never used it, every other age group are current
mobile banking users.
In terms of usage frequency, 5 out of 8 teenagers, young adults and working
adults use mobile banking applications up to 5 times a week. Interestingly, 4
respondents out of 10, use mobile banking multiple times a day to check account
balance, split the bill when eating out with friends and making QR code payment to
various vendors. For young and working adults, mobile banking applications serves as
a tool for both work related transactions as well as personal activities. This indicates a
potential growth trend of online-based entrepreneurs that heavily rely on money
transfer from e-commerce transactions. Furthermore, all young and working adult
respondents prefer to use mobile banking over branch banking as it saves time and
money. On the contrary, the male retiree respondent expressed “I am not familiar with
applications on smartphones, let alone trust it to transfer my money. All my retirement
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collectables are made directly to my accounts and none of my friends use it so I don’t
use it either.”
As highlighted above, with the exception of retirees, all other age group
express positive perception towards mobile banking. Moreover, it is also useful in
emergencies as the male working adult respondent disclosed “My aunt who was living
outside of Bangkok urgently needed money to undergo a medical procedure in the
middle of the night and mobile banking truly helped me.” Despite this, 4 out of 10
respondents raised concerns for functionality of some mobile banking applications as
they experienced minor malfunctions in the past. As for the female retiree, the most
pressing concerns were security risks followed by user friendliness “Although I agree
that mobile banking provides advantages, but I just don’t know where to start.”
4.2 Survey Result Analysis
4.2.1 Respondent Profile
With 240 completed surveys, 192 surveys qualified the screening process. 94
percent of all respondents are smartphone owners who have at least one mobile
banking application installed on their smartphone. The demographic of the 192
qualified respondents are 68 percent female, 95 percent either have a bachelor or a
master’s degree. 73 percent is made up of corporate employee or business owners with
50 percent monthly income of 20,000-50,000. Only respondents aged 15-54 years old
were included in the research, representing 60 percent of the the Thai population
(Index Mundi, 2018). See appendix C for Respondent’s Demographic Profile.
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Regarding mobile banking usage behavior, usage peaks hours are during
evening times with 42 percent. In addition, 56 percent of the average mobile banking
transaction per usage is below 5,000 THB and 70 percent of respondents use mobile
banking applications on both weekdays and weekends. Furthermore, 79 percent of
respondents have used mobile banking within the past week. This classifies them as
heavy users because the majority of them use mobile banking several times per week.
On the other hand, the remaining 21 percent of respondents are regarded as light users
that use mobile banking application a few times per month. Heavy and light users will
be used for further factor and cluster analysis.
In terms of user perception towards mobile banking, 4 broad insights can be
derived from 4 level Likert scale frequency analysis. Firstly, with a mean of 3.6,
respondents generally view that adoption of mobile banking have made their lives
more convenient. Secondly, a mean of 3.2 suggests that respondents perceive mobile
banking to be more useful than branch banking. Thirdly, a mean of 3.0 proposes that
respondents are relatively satisfied with current mobile banking services. Finally, with
a mean of 3.0, respondents consider mobile banking as one of driving forces in
Thailand’s transformation to a cashless society. Overall, respondent’s perception
towards mobile banking is positive.
Table 4.1: Respondent’s Perception Towards Mobile Banking
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4.2.2 Mobile Banking Brand Awareness and Usage
From 192 responses, top three mobile banking application awareness was
ranked as, “K Plus - Kasikorn Bank” with 48 percent, “SCB Easy - Siam Commercial
Bank” with 28 percent and “Bualuang mBanking - Bangkok Bank” with 8 percent
respectively. Figure 4.2 exhibits 1) the number of respondents with a particular mobile
banking application installed on their smartphone 2) the number of respondents
currently using a particular mobile banking application 3) the number of respondents
that uses a particular mobile banking application most often. For K Plus, an eight
percent drop from installed to using and a 28 percent drop from using to use most
often can be observed. Similarly, a 16 percent drop from installed to using and a 39
percent drop from using to use most often can be observed for SCB Easy. Finally, a 26
percent drop from installed to using and a 55% drop from using to use most often can
be observed for Bualuang mBanking. The conversion rate for the top two mobile
banking applications namely, K Plus and SCB Easy is quite moderate relative to
Bualuang mBanking. Conclusively, out of a total of 7 mobile banking applications
surveyed, K Plus and SCB Easy emerged as the two most well-known and most used
brands.
Figure 4.2: Top 3 Mobile Banking Brand Conversion Rate
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From 192 responses, top three mobile banking service awareness was ranked
as, “Money Transfer” (97 percent), “Account Balance Check” (92 percent), “Bill
Payment” (89 percent.) Figure 4.3 exhibits 1) the number of respondents who know a
particular mobile banking service 2) the number of respondents currently using a
particular mobile banking service 3) the number of respondents using a particular
mobile banking service most often. A three percent drop from knowing money
transfer to using money transfer and a 22 percent drop from using money transfer to
using most often can be observed. Similarly, an eight percent drop from knowing
account balance check to using account balance check, and a 79 percent drop from
using account balance check to using most often can be observed. Finally, a 26
percent drop from knowing bill payment to using bill payment and an astounding 92%
drop from using bill payment to using most often can be observed. Although
respondents know and use all 3 services, money transfer is by far the most used
mobile banking service.
Figure 4.3: Top 3 Mobile Banking Service Conversion Rate
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4.2.3 Segmentation
Based on Pearson correlation among 7 mobile banking attributes, 2 compelling
correlations stood out. First, a positive correlation between “Security” and the
“Reliability”, r = 0.559, n = 192, p = 0.000. Second, another positive correlation
between “Recommendation from peers” and “Online Review”, r = 0.687, n = 192,
p = 0.000 can be observed. Further factor analysis was conducted as other attributes
were also correlated. Please refer to results in Appendix E for more details.
Table 4.4: Correlation between “Security & Reliability” and “Recommendation
from peers & Online Review”
Factor analysis using Varimax rotation methodology generated a KMO of
0.62, explaining 81 percent of the total variations with Eigenvalues > 0.6. Four
factors, namely, “Reliability”, “User Friendly”, “Review” and “Features” was derived
from the analysis. (See Appendix F) Subsequently, a two-step cluster analysis
including mobile banking usage frequency generated 3 clusters. (See Appendix G)
The first cluster is the smallest segment called “Old School Veterans”
representing 21 percent of total sample size. The segment tends to contain older
individuals with key characteristics including conservative, habitual and observant.
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The second cluster is the largest segment called “Middle Aged Go-Getter”
representing 46 percent of the total sample size. This segment is made up of working
adults who are logical, practical and have systematic thinking. Finally, a segment
called “Youthful Minimalist”, which is the second largest cluster, representing 32
percent of the total sample size. Individuals in this segment tend to be younger,
tasteful, emotional and spontaneous. “Middle Aged Go-Getter” and “Youthful
Minimalist” are classified as heavy users and “Old School Veterans” is classified as
light users.
The “Middle Aged Go-Getter” segment seek high overall performance
(including security and features) of mobile banking. Members of this segment will not
tolerate technical malfunctions or inferior services. Interestingly, the “Youthful
Minimalist” segment which is also considered a heavy user, prioritizes ease of use and
convenience mobile banking. This segment views that user friendliness of mobile
banking applications fit into their fast-moving lifestyles. On the contrary, “Old School
Veterans” may not have a clear understanding of how mobile banking operates and
they heavily rely on close friends and online resources to facilitate mobile banking
adopt.
Figure 4.5:
Heavy and light
user cluster
analysis
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Although not statistically significant, further cluster analysis including user
perception of mobile banking show promising insights for each user segment. This
suggest that “Old School Veterans” do not believe that mobile banking will transform
Thailand into a cashless society. On the contrary, heavy users such as “Youthful
Minimalist” believe that mobile banking made their lives more convenient. (See
appendix H)
Table 4.5: Results from cluster analysis with respondent’s perception
Table 4.6: Anova results from cluster analysis with respondent’s perception
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CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusion and Managerial Implication
According to qualitative research as well as frequency, factor and cluster
analysis, the majority of Thais have a positive perception towards mobile banking.
Furthermore, 2 out of 3 user segments identified by the research are heavy users that
highly value reliability and user friendliness. Interestingly, the remaining cluster of
light users who value word of mouth and online review has the potential to turn into a
heavy user if they were better educated about the product. As Thailand’s smartphone
penetration increases, more Thais will likely adopt mobile banking and the following
implications for commercial banks can be implemented.
5.1.1 Managerial Implication for Commercial Banks
Firstly, there are only 2 dominant brands in the market and the remaining
5 banks must compete more aggressively in terms of brand awareness and usage
frequency. Although the research identified 3 top-of-mind mobile banking brands, it
was clear that, K Plus and SCB Easy were the only two that dominated the market.
This finding is not surprising as Kasikorn Bank and Siam Commercial Bank invested
heavily in their digital banking infrastructure. However, this is a wake-up call for the
remaining 5 banks. One possible solution is to reduce traditional banking channels
costs and increase invest in innovative banking solutions such as QR code payment
infrastructure to catch up with technological advancement. Another solution is to
secure user’s Prompt Pay registration as a means of obtaining a user’s “Primary
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Account.” Users will prefer to use the primary account to transfer money rather than
secondary accounts because Prompt Pay is more convenient. This strategy will attract
more traffic to the mobile banking application and create a ripple effect to generate
more awareness among prospect users.
Secondly, offering a wide range of services is not a sustainable competitive
advantage. Research findings suggests money transfer is the most commonly used
service, followed by account balance check and bill payment. However, the majority
of users do not use the remaining 13 services currently offered by various commercial
banks. As a result, it would be impractical to invest and roll out insignificant service
extensions such as insurance purchase and branch location. Rather, commercial banks
should integrate and reinvent their mobile banking application into user’s daily lives.
This will transform mobile banking from a payment channel into a multi-purpose
lifestyle platform capable of ride hailing, food delivery and online shopping. Higher
usage frequency also translates to a bigger potential in monetizing user data.
Ultimately, commercial banks will have to compete against non-bank players such as
e-wallet companies that are aiming to disrupt the banking industry.
5.2 Research Limitations
Although this research was carefully planned and executed, 2 main limitations
emerged. Firstly, the diversity of respondents’ profiles was limited. This is because
the majority of respondents are corporate employees living in Bangkok with similar
education background. Collecting more response from other population groups such
as the working class as well as senior management could have generated other
insightful findings.
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Secondly, with limited time and resources, the research failed to gasp a better
understanding of non-bank players which represents a considerable portion of
Thailand’s Fintech industry. Moreover, a deeper study of the government sector will
produce a holistic understanding of the industry as they are a responsible for shaping
digital banking policies and infrastructure.
5.3 Suggestions for Future Studies
The intention of this research was to identify overall user behavior and to
identify consumer segments; however, the findings are relatively generalized.
Therefore, future studies should specifically target one out of three user segments
defined by this study or other potential segments including teenagers, entrepreneurs
and pensioners. It is also important to investigate how to increase usage frequency
among current heavy users or how to transform light users into heavy users.
Furthermore, commercial banks will find financial profiles and user profitability of
each segments highly useful. Aside from Thai mobile banking users, other potential
user segments to conduct further study on are Chinese tourists who heavily rely on e-
payment at home and abroad. Further studies have the potential to increase usage
frequency and satisfaction of heavy users, increase mobile banking adoption for light
users and ultimately transform Thailand into a cashless society.
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APPENDICES
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APPENDIX A
IN-DEPTH INTERVIEW GUIDELINE
1.1 Interview ice breaking and set up
Hi! I want to thank you for taking the time to meet with me today. My name is
Win and I would like to talk to you about your perception and past experience
regarding mobile banking in Thailand. The interview should take less than an hour. I
hope you don’t mind me voice recording the session because I don’t want to miss any
of your comments. All of your responses will be kept confidential and I will ensure
that any information I include in my report does not identify you as the respondent.
Remember, you don’t have to talk about anything you don’t want to and you may end
the interview at any time. Feel free to ask any questions before we begin the session.
1.2 Questions
1) Describe the top 3 words that comes to your mind when you think about mobile banking (e.g. convenient, money transfer, Prompt Pay)
2) Identify all mobile banking services that you are aware of (e.g. money transfer, bank balance check, bill payment.)
3) Describe your mobile banking usage frequency and time of usage (e.g. weekly, mid-day.)
4) Describe mobile banking purpose of use (e.g. online shopping, work-related, personal affairs)
5) Describe mobile banking services that you have used and the average amount per transaction (e.g. money transfer, bill payment, approximately 2,000 THB per transaction)
6) Describe any positive perceptions or experiences that you have towards mobile banking, if any (e.g. convenient, cashless society, diverse service offerings.) Please provide justification for your response.
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7) Describe any negative perceptions or experiences that you have towards mobile banking, if any (e.g. security concerns, application malfunction, hard to use.) Describe how did you overcame those negative experiences.
8) To what extend did the adoption and advancement of mobile banking change your behavior as a consumer (e.g. less cash dependent, subconsciously spend more money, increased trust in e-commerce)
9) If you could give any recommendations to commercial banks or government agencies regarding mobile banking, what are the top 3 recommendations you would give?
1.3 Interview closing
Feel free to add any additional comments before we end the interview. I’ll be
analyzing the information you and others gave me and I’ll be happy to send you a
copy of my research, if you are interested. Thank you for your time.
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APPENDIX B
EXAMPLE OF QUESTIONAIRE
1.1 Screening Question
1) Do you or any of your family members work in any of these industries? [MA]
Marketing / Marketing Research
Terminate Commercial Banks
Banking Related Government Agencies
None of above Continue
2) In the past 6 months, have you or any of your family members participated in any marketing research project? (e.g. giving an interview, participating in a focus group, product test) [SA]
Yes
Terminate
No
Continue
3) What mobile devices do you own? [MA]
Smart Phone
Continue Tablet
Personal Assistance Device (PDA)
None Terminate
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4) Which mobile banking applications do you have installed on your mobile devices? [MA]
K Plus (Kasikorn Bank)
Continue
SCB Easy (Siam Commercial Bank)
KTB Netbank (Krungthai Bank)
KRUNGSRI Mobile Banking (Bank of Ayudhya, Krungsri)
Bualuang mBanking (Bangkok Bank)
TMB Touch (Thai Military Bank)
None Terminate
5) When was the most recent usage of any mobile banking applications installed on your mobile devices? [SA]
1 week ago
Continue 1 month ago
3 months ago
More than 6 months Terminate
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6) What is your age? [SA]
Less than 15 years old Terminate
15 – 24 years old
Continue
25 – 34 years old
35 – 44 years old
45 – 54 years old
Over 54 years old Terminate
1.2 Survey Question
Objectives Methodology Sample Research Questions
3.1 To identify awareness and usage among current mobile banking users
3.1.1 To identify mobile banking usage rate
3.1.2 To identify service awareness
Online Survey Questionnaire
Which mobile banking applications do you know?
Which mobile banking applications have you used?
What are the top 3 mobile banking applications that comes to your mind?
How often do you use mobile banking applications?
What are the services available on mobile banking that you know of?
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3.2 Explore current behavior of current mobile banking user
3.2.1 To determine behavior usage purpose
3.2.2 To determine the importance of available services that drive usage
3.2.3 To determine usage occasion
3.2.4 To determine average transaction amount
Online Survey Questionnaire
What is the 3 most common services you use in mobile banking?
Do you use mobile banking for personal accounts or work related matters?
What mobile banking services would you like banks to develop in the future?
What services would you like banks to eliminate in the future?
How satisfied are you with your current interactions with mobile banking?
Which attributes are important to you when adopting a mobile banking application?
What time or the day do you use mobile banking the most?
On average how much do you spend on transaction?
3.3 To identify mobile banking user segment
3.3.1 To explore demographic profiles, lifestyle and behavior of each user segment
3.3.2 To identify mobile banking needs of each segment
Online Survey Questionnaire
What is your gender?
What is your average monthly income?
What is your average monthly household income?
What kind of a lifestyle do you have?
In what ways can banks improvement mobile banking?
3.4 To identify any changes in consumer behavior influenced by mobile banking
Online Survey Questionnaire
Did mobile banking have a positive or negative impact on your life?
What behavioral changes did you have after mobile banking adoption?
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APPENDIX C
RESPONDENT DEMOGRAPHIC
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APPENDIX D
FREQUENCY ANALYSIS: PERCEPTION
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APPENDIX E
ATTRIBUTES CORRELATION
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APPENDIX F
FACTOR ANALYSIS
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APPENDIX G
CLUSTER ANALYSIS
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APPENDIX H
CLUSTER ANALYSIS WITH RESPONDENT PERCEPTION
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BIOGRAPHY
Name Mr. Chana Silparcha
Date of Birth July 10, 1992
Educational Attainment
2014: International Relations Major in Bachelor’s
degree in Asia Pacific Studies.
Work Position Japanese Medical Interpreter
Bangkok Hospital, BDMS Group
Work Experiences 2014 - 2015: Domestic Sales
Nissin Food Holdings, Tokyo
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