INTENTION TO USE MOBILE BANKING IN MALAYSIA: ASSESSING KEY DETERMINANTS

BY NEBIL ABDUREZAK AHMED

A research project submitted in partial fulfillment Of the requirements for the degree of

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

FACULTY OF BUSINESS AND LAW MULTIMEDIA UNIVERSITY JANUARY 2011

Chapter 1 Introduction

1.1

Research background

The rapid technological advances in mobile-based technologies have created opportunities for new and innovative mobile services. Some of the most promising, while still marginally adopted, is mobile banking. Many commercial banks in Malaysia have tried to introduce mobile banking systems to improve their operations and reduce costs, (Amin et al., 2008). Some say that internet is considered the greatest most effective device innovated by mankind since the discovery of the wheel. Due to the consistent use of the internet, it has brought about ideas such as implementing mobile devices in areas like banking, and that is where they come up with Mobile Banking or mbanking in short. The mobile banking environments are getting more and more implicated gradually, New and innovative ideas in mobile banking can lead to useful and effective approaches and models in business transactions, especially in requirements elicitation, service providers recognition, negotiation and agreements (Soroornejad and kharazian, 2010). In this innovative community, mobile devices can access internet from various locations allowing the users to participate in typical internet-mobile based activities which also includes Mobile Banking. Watson et al., (2002) stated that mobile services on consumers because they allow ubiquitous and universal access to information and services, in addition to the possibility of accessing a unique and personalized exchange of data. As a result, the use of mobile devices has become a part of most peoples daily life, and also a technique that helps to keep in touch with the rest of the world, plus to communicate and network (Shi Yu, 2009). Mobile banking is a developing mobile technique used in the commercial field, which has merged information technology and commerce applications together. Rather

than visiting the traditional bank branch for personal transactions, after mobile banking was introduced to the world, consumers were able to enjoy special services 24 hours a day, in a more convenient and sufficient fashion. Mattila (2003) was interested in investigating the factors that influenced ones decision to use mobile phone for banking transactions. Therefore, Mattila (2003) discovered that pay bills cheaper, have faster data transmission rate and authenticate with mobile phone to Internet bank were the factors which influenced individuals to use mobile phones for their banking transactions. Porteous and Wishart (2006) stated that mobile banking is considered one of the newest approaches to the stipulation of financial services through ICT, which was likely possible by the widespread adoption of mobile phones even in low income countries. Some of the features that mobile banking has covered were fund transfer and bill payment where customers have the complete freedom to maintain their account via mobile (Anyasi and Otubu, 2009). The results banking industry have experienced due to the revolution are minimum balance alerts, account statement enquiry, cheque status enquiry, account balance enquiry, bill payment alerts and cheque book request (Anyasi and Otubu, 2009). Regardless of all the attempts aimed at developing a sufficient and satisfying mobile banking, and despite its availability, this system can be easily unnoticed. Mobile banking is still considered new, which leaves Malaysia with a great deal of room for development. Therefore, there is a need to understand bank customers reaction towards mobile banking and to observe the factors affecting their intentions to use mobile banking, (Amin et al, 2008).

1.2

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

topic of Mobile banking abroad, unfortunately only few studies were carried out in Malaysia. This is probably due to the fact that Mobile banking is to some extent new in Malaysia. Therefore, the lack of information on this topic resulted in insufficient knowledge and literature on the key determinants in Mobile banking adoption within Malaysia. Evidences and conclusions that have been conducted abroad can be somehow useful but it might not be consistent and accurate in the perspective of mobile banking in Malaysia. Due to the reasons listed above, more research on this topic should be covered to validate whether the results from these studies would be reliable to Malaysia. Besides that, there are also corresponding facts when comparing when comparing this study with previous studies. For example, Amin et al., (2008) stated that when deciding whether to accept mobile banking or not, perceived usefulness and perceived ease of use were to found to be significant factors. In previous works, several studies supported valid arguments on perceived credibility. For instance, Wang, et al., (2003) and Luarn and Lin (2005) stated that the intention to use mobile banking was influenced by security and privacy associated with mobile banking environment. Mattila (2004) pointed out that the adoption of mobile banking services were influenced with factors such as data transmission, costs, and authentication of mobile phone to internet bank, likelihood to conduct banking truly regardless of time, place, and curiosity towards using the services. Cheong and Park (2005) indicated in their studies that the success of mobile internet depends on literally understanding the concerns of customers and classifying the factors that enhance the use of mobile banking. Laforet and Xiaoyan (2005) on the other hand investigated the market status for online/mobile banking in China, and with the current

and anticipated high growth of Chinese electronic banking, it likely has the potential to develop into a world-scale internet economy. Laforet and Xiaoyan (2005) indicated that the issue of security was found to be the most significant factor that induced the Chinese consumers to adopt online banking. Jayawardhena & Foley (2000) indicated that ensuring security and confidentiality are the basic prerequisites before any banking activity relating sensitive data can take place. This paper attempted to assist improvement of mobile banking services through investigating the customer adoption. In addition, this paper discovered the relationship between several variables such as perceived usefulness, perceived ease of use, compatibility, perceived self-efficacy, subjective norms, perceived credibility, perceived risk and user predisposition, and the adoption of mobile banking. Models such as TAM and Extended TAM were used and adopted to help classify the variables that will influence users intention to adopt mobile banking.

1.3

Research Questions

1) What are the key factors that influence the intention to use mobile banking services in Malaysia? 2) What are the opportunities and challenges in mobile banking? 3) How is it best to evaluate a mobile banking application or service in terms of its adoptability? 1.4 Research Objectives 1) To examine the factors that influences the intention to use of mobile banking services in Malaysia.

2) To examine the opportunities and challenges in mobile banking. 3) To evaluate mobile banking service in terms of its adoptability

1.5

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

gaps which needs to be covered. This paper work is an addition to the limited number of current literatures on the topic of Mobile Banking in Malaysia. A theoretical model was presented and also was implemented in order to classify the key determinants of users adoption of Mobile Banking. The central aim of this paper was to identify the determinants of Mobile Banking adoption among the citizens in Malaysia and also aims to fill the gaps between previous researches that were conducted in Malaysia. This research can be handy for several parties. Since there are insufficient previous paper works regarding the factors that influence the adoption of Mobile Banking in Malaysia, future researchers can use this study as a reference to their work. Governing bodies can also use this study in order to stimulate the growth of Mobile Banking. By identifying the factors or determinants, the governing bodies will then have the advantage of a transparent picture on the scenario Mobile Banking adoption in Malaysia.

1.6

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

Faculty of Engineering, Faculty of Information Science and Technology and students from Faculty of Business. The group that will be focused on will be the mobile subscribers, age between 20 -50.

The scope also included examining the factors that influence the users choice whether or not to adapt the usage of Mobile banking in their daily lives. The study also took a glance on various definitions of mobile banking and its history and future in Malaysia.

1.7

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

involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a clients account. M-banking is one of the newest approaches to the provision of financial services through ICT, made possible by the widespread adoption of mobile phones even in low income countries, (Porteous et al., 2006). The term internet banking is defined as; Internet banking refers to systems that enable bank customers to access accounts and general information on bank products and services through a personal computer (PC) or other intelligent device (Comptrollers Handbook,1999).

1.8

Structure of the Project

The first phase of this research consisted of three chapters, which contains data regarding the topic. The three chapters were divided into Introduction, Literature review and the Research Methodology. Chapter one, was the introduction chapter. It briefly covered the topic of this research, i.e. Mobile banking or m-banking. This chapter began with the introduction, which consisted of brief but sufficient information about m-banking. Chapter one also clarified the problem statement and the research objectives and what are the things need to be done to achieve them. Significance of research and the scope of the research were

also covered in this very chapter. Finally, this chapter was concluded with a summary which explained chapter one in short. Chapter two was the Literature review. This chapter contained literature reviews from previous studies conducted related to the topic (m-banking). This chapter started with a brief introduction about mobile banking. Then it covered a vast amount of data or literature on mobile banking. Definitions of mobile banking from previous works were cited in this chapter, not to forget the history and the evolution of mobile banking. On the other hand, prior researches on mobile banking adoption in USA, Europe and Malaysia were also covered in this chapter. Models such as Technology Acceptance Model (TAM) and Extended TAM were elaborated in this chapter which therefore was adopted and enhanced in this study. Chapter three covered the Research Methodology, which provided a specified designation on the instruments used in the data mining process. The conceptual framework was also covered in this chapter, how the independent variables influence dependent variables and the suggested hypotheses. Besides that, the questionnaire design, measurement of the variables, data collection method, data resources, sample size & population size, units of analysis and data analysis techniques were all covered in this chapter.

1.9

Chapter Summary

Chapter one provides a brief introduction about mobile banking. It states the scope of the study which includes students of Multimedia University. This chapter also gives us a collection of key attributes correlated with the research topic and presents a prelude idea about our topic. It also explains the course of this research and what is expected from it.

Chapter 2 Literature review

2.1 Introduction Financial service is experiencing a period of unprecedented change- new entrants, new product, downsizing, mergers and acquisitions, in addition to the new delivery channel: the internet (Birch and Young, 1997). Despite all the millions of dollars that have been spent on building internet banking system, studies and reports have indicated that potential users may not use the system in spite of their availability. This points out the need for further research to identify the factors that determine the acceptance of Internet banking by the users. (Wang et al., 2003). In this chapter, previous researches that have been conducted about mobile banking will be analyzed and discussed. Various definitions and opposing definitions will be discussed thoroughly. In addition, the background information about mobile banking will be discussed in this chapter. Besides that, various reasons why consumers choose to adopt mobile banking will be discussed. The position of mobile banking in other countries plus Malaysia will also be looked at in this chapter. Moreover, the essential factors that influence mobile banking acceptance will also be talked about.

2.2 Definition of mobile banking There is a variety of different explanation for mobile banking; this might be due to the fact that mobile banking is relatively new. Mwaura (2009) defined M-banking as the provision and availment of banking-and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customised information. According to Porteous and Wishart (2006), mobile banking is

Mobile banking (m-banking) involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a clients account. M-banking is one of the newest approaches to the provision of financial services through ICT, made possible by the widespread adoption of mobile phones even in low income countries. Wilcox (2010) defines mobile banking as the provision of banking services to customers on their mobile devices: specifically we mean in the vast majority of instances the operation of bank current and deposit or savings accounts. Weber and Darbellay (2010), describes the term as Mobile banking activities fall within the scope of the banking business, and oversight is provided by the competent financial market authority for prudential supervision, if the definition of banking activities encompasses all relevant mobile banking activities. The features of mobile banking and electronic banking are almost identical due to the fact that the services provided by both ends are carried out electronically by computer- intervened networks, which are reachable using telecommunication networks. The only difference is that mobile electronic devices are the telecommunication networks used for mobile banking. In Korea, a survey was conducted by Yong and Gorman (2002), and it was stated that there was relatively a 400 percent increase in the level of mobile banking service use in 15 months, as revealed in figure 1.1:

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

Service

December 2000

December 2001

December 2002

Inquiry EFT Total Change

200,552 1,746 202,298 --

691,883 18,319 710,202 251.1

817,111 25,241 842,352 18.6

Note: Transaction cases during the month indicated Source: The Bank of Korea (2002) Figure 2.2: use of mobile banking in Korea Source: Journal of online Information Review, Yong and Gorman (2002)

A recent research in Ireland has established that approximately 1% of consumers use mobile banking services while almost 90% of their population own mobile phones (Foley, 2005). The use of mobile banking basically focuses on the basic functions provided by the mobile banking service rather than the complex ones. A survey question was asked by a recent Forrester research: What mobile banking activities would you mostly be interested in? as seen in Figure 1.2 (Foley, 2005).

Figure 2.2 mobile banking activities Source: ireach, www.ireach.ie

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As shown in figure 1.2, the majority of consumers did not use mobile banking at all. Those who considered using the service used it only for simple functions such as checking account balances. Complicated functions of mobile banking have not been reflected on (Foley, 2005).

2.3 Evolution of mobile technology The first radio telephone was discovered in US at the late 1940s and the main reason behind that was to connect mobile users in vehicles to the public network. In the 1960s, a new system called Improved Mobile Telephone Service (IMTS) was initiated by Bell system (Take, 2010). For an easier and more adequate explanation of mobile technology, the innovation has been simplified and categorized into 4 groups of generations. Each one of these generations is an advancement or improvement of the previous generation. These generations are categorized as, first generation (1G), second generation (2G) and (2.5G), third generation (3G), and finally the fourth generation (4G). Ashiho (2003) stated that the first generation of mobile technology or 1G had only voice facility as the main feature and that the mobile phones were based on the analogue system. During the 1970s, 1G analog system for mobile communications saw two significant developments: the invention of the microprocessor and digitization of the control link between the mobile phone and the cell site (S. Take, 2010). In addition to that, the semi-conductor technology and microprocessors made mobile systems smaller, lighter, and more sophisticated a reality. The well known among first generation systems were advanced mobile phone system (AMPS), Nordic mobile telephone (NMT), and total access communication system (TACS). Besides that, since the introduction of 1G phones to the world, the mobile market experienced an annual growth rate of 30 to 50 per cent, subscribers rising to nearly 20 million by 1990 (Ashiho, 2003). In Europe in the early 1990s, 2G phones using global system for mobile communications (GSM) were used. Ashiho (2003) mentioned that the motivation behind

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developing 2G cellular systems was the need to improve transmission quality, system capacity, and coverage. Take (2010) stated that the new system (2G) provided better quality and higher capacity at lower cost to customers. GSM was also the first commercially operated digital cellular system which is based on TDMA (Take, 2010). GSM was also considered as the most successful family of cellular standards, which includes GSM900, GSM-railway or (GSM-R), GSM1800 (Ashiho, 2010). The GSM has also the ability to operate as dual-band or tri-band phones, as they are adaptable to the local frequency system in the region the user travels through. (The Mobile Phone Directory. 2009). Just like 1G, the main transmission that controls the airways is speech transmission, but it has been mentioned that the demand for fax, short message, and data transmission is growing rapidly (Ashiho, 2003). Ashiho (2003) adds that 3G technology adjoined multimedia facilities to 2G phones by allowing applications such as video, audio, and graphics. Take (2010) mentioned that ITUs IMT-2000 global standard for 3G has opened the way to enabling innovative applications and services (e.g. multimedia entertainment, infotainment and location-based services, among others). Hill (2010) stated that one of the main purposes behind the development of 3G was to obtain a single network standard rather than different types of network standards, which was lately adopted in Europe, U.S. and other areas. A 3G cellular device known as UMTS (Universal Mobile Telecommunications System) or IMT-2000 appeared to maintain higher data rates and open the gate to internet style applications (Hill. 2010). Ashiho (2003) cited that 4G mobile communications will have transmission rates reaching up to 20 Mbps. Other 4G applications include high-performance streaming of multimedia content based on agent technology and scaleable media coding methods. Hill 2010, mentioned that by the year 2010, 4G will enable 3D virtual reality; imagine personal video avatars and the ability to feel as if you are present at an event when actually you are not. People, places and objects will be able to interact as the cyber and real-world blend.

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Table 2.3 Standards used in different Generations of Mobile Technologies 1G

. Paging systems . Cordless telephone (CTO, CTI) . Cordless telephone cell . Private mobile radio

2G
. Paging systems . Cordless telephone (DECT, PACS) . WLL . Private mobile radio (TETRA) . Cellular systems (GSM, D-

3G
. Single standard under IMT-2000, UMTS, MCCDMA, TDSCDMA

. Cellular systems (NMT, AMPS, etc) . Mobile satellite systems (INMARSAT)

AMPS, PDC, IS-95) . Mobile satellite systems (IRIDIUM, ICO, GLOBALSTAR)

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

2.4 Mobile Banking in Europe The adoption of mobile banking ought to rapidly increase in major European markets. The mobile phone delivery channel symbolizes a challenge for the European banking industry, permitting institutions to distinguish themselves from rivalries, reduce costs, and develop customer loyalty. The adoption of mobile banking should increase rapidly in major European markets over the next few years, from an average of 6% today to 25% of the Spanish, French, Italian, and British markets by 2010. Regardless, significant barriers still remains, such as general lack of awareness, technological issues, customers perception of security, and more importantly, the cost of mobile internet are

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major obstacles to mass market mobile banking adoption. If mobile Internet usage increases, we can expect a large number of users to interact with their banks via their mobile phones as they currently do online.

2.4 Adoption of Internet Banking and Mobile Banking in Western Europe

European banks have predicted the termination of adoption barriers and have already launched various mobile banking services using mostly the WAP and SMS technologies. In UK and Germany only few downloadable applications have been counted successful. French, Spanish and Italian banks are currently offering a wider range of mobile services. Nevertheless, there are still many differences between countries regarding the number and type of mobile banking services offered. Information and SMS services are the most common at the European level.

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2.5 Mobile banking in Malaysia Previously, SMS banking was only available at Bank Islam Malaysia Berhad (BIMB) but now this banking facility is available at most commercial banks in Malaysia. Lately, Bank Simpanan Nasional (BSN) offered SMS banking to its customers for the purpose of account balance query, bill payment and more. SMS/Mobile banking was first introduced in 2004 in Malaysia. Ever since, SMS banking has become an interesting topic of research, not only in Malaysia but also in other countries (Mattila, 2003; Kleijnen et al., 2004; Laforet and Li, 2005). Mobile banking is still considered new, leaving a great deal of room for development in Malaysia. Therefore, there is a need to understand bank customers acceptance of mobile banking and to observe the determinants affecting their intention to use mobile banking. This type of information can help commercial banks including BIMB in building of mobile banking that the customers favor to use, therefore assist them to attract potential users to use the system. Due to the fierce competition in the banking industry in Malaysia, hence each bank out to be creative and innovative in order to be competitive enough to stay in the game. One of the value added services that the commercial banks have considered is mobile banking or SMS banking. Prior studies have stated the need of mobile banking services in the society (for example, Amin et al., 2006; Luarn and Lin, 2005; Mattila, 2004). Previous studies also assisted to lay an understanding on why mobile banking is important? In essence, there were three key determinants. Firstly, mobile banking offers a new opportunity to banks to extend their services to their customers and therefore improve their competitiveness (Kohli, 2004). Secondly, mobile banking is considered to be one of the most value-added and significant mobile services (Datamonitor 2000 as cited in Lee, et al., 2003). Thirdly, mobile banking offers an interactive banking transaction (Mattila, 2004). A study conducted in Bank Islam Malaysia Berhad (BIMB) came up with solutions that would help in improving the adoption of mobile banking in their respective bank and in Malaysia in general. It was suggested that the bank could organize training courses for mobile banking, and that it should be available at all the

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branches in Malaysia. The study also discovered that the amount of information on mobile banking is an influential factor that would affect an individuals intention to use mobile banking. Therefore, it is believed that sufficient information on mobile banking will have a positive impact on the customers. A survey by the Malaysian Communications and Multimedia Commission exposed that the penetration rate for mobile users in the country for the second quarter was about 90% -- double the number of internet penetration (Dhesi, 2008). Dhesi (2008) also states that according to the survey, the high penetration rate confirmed that mobile phone networks had become an increasingly popular channel for Malaysians to carry out a plethora of activities beyond just voice communication and text messaging. Industry players and analysts coincided that there was a significant level of awareness and usage of mobile phones beyond just as a communication tool and, therefore divines well as a potential electronic banking channel. The advantage that mobile banking has over other banking channels is that it allows customers to perform their banking activities anytime and anywhere. Standard Chartered Bank Malaysia Bhd (StanChart) country head of consumer banking Ho Toon Bah informed StarBiz: StanChart was the first bank in April to offer smartphone technology mobile banking in the country, underscoring our innovative approach in leveraging technology to bring new products and services to customers. Our customers have embraced this new channel of banking at a rapid pace. Almost one-third of our Internet banking customers have signed up for mobile banking and we are confident that this base will grow rapidly as we continue to enhance the range of services and transactions available on this platform. According to Ho, StanChart was looking forward at how the mobile channel could serve and add convenience to its corporate clients. He mentioned that the group was developing prototypes of new service models and would quickly release them into the market, rather than waiting for years to come up with a fool-proof model before rolling it out.

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Citibank Bhd head of consumer e-business Roy Heong said that mobile banking was a key growth strategy for both the bank and the group globally. We are looking into extending account information and bill payments to a bigger base using text messaging. We will also target customers who are looking for more functionality via a J2ME (Java Platform Micro Edition) application on Java-enabled devices and leveraging on the thirdgeneration (3G) and General Packet Radio Service infrastructure. Importantly, the initiatives proposed must fit into our strategy to ensure high relevance and best-in-class experience for our customers, Heong added. To improve its mobile banking channel, OCBC Bank (M) Bhd head of consumer financial services Charles Sik said the banks target now was to promote the service to its existing customers. This way, we believe, those who have been a little hesitant in the beginning will appreciate more quickly why mobile banking really does add depth to the idea of convenience, Sik said. CIMB Bank Bhd last month mentioned that it expected about 1.3 million existing CIMB Clicks users and new customers to use its newly-launched mobile banking service. Named CIMB Clicks Mobile Banking, it is considered the first to have internet banking features and capabilities, compared with other mobile banking services which use SMS to make transactions. Although there are challenges and issues facing mobile banking, its leverage is huge judging from the phenomenal growth and usage of mobile phones.

2.5.1 Malaysian Communications and Multimedia Commissions The Malaysian Communications and Multimedia Commission is the regulator for congregating communications and multimedia industry based on the powers presented for in the Malaysian Communications and Multimedia Commission Act (1998) and the Communications and Multimedia Act (1998). Pursuant to these Acts, the role of the

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Malaysian Communications and Multimedia Commission is to execute and promote the Governments national policy objectives for the communications and multimedia sector. In 2001 MCMCs role was added to monitor postal services. In addition, MCMC also acquired the role as a Certifying Agency under the Digital Signatures Act. The key roles of the MCMCs in the telecommunications sector are: Technical regulation, including allocation of frequency spectrum, telephone numbers and electronic addresses; Economic regulation includes promotion of competition and prohibition of anticompetitive conduct. It also includes licensing, enforcement of license conditions for network and application provider, in addition to ensuring compliance to rules and performance/service quality. Social regulation including content development and regulation. Consumer protection, emphasizing empowerment of consumers and ensuring adequate protection measures in areas such as dispute resolution, service affordability and availability.

In Malaysia, the MCMC are the body responsible for regulating the communications industry, issue licenses and to implement the communications and multimedia laws (MCMC, n.d). The licensing system allows a licensee to take on market specific activities. for this reason, it is possible for advancement for Applications Service Providers to come up with newer and more proficient usage of the Network Structure. There are four categories of licensable activities as stated on the MCMCs website. 1. Network Facilities Providers Owners of facilities like satellite earth stations, broadband fibre optic cables, telecommunications lines and exchanges,

radiocommunications transmission equipment, broadcasting transmission towers and equipment and mobile communications base stations. These are the fundamental

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building block of convergence model upon which network, applications and content services are provided. 2. Network Services Providers Provide the basic connectivity and bandwidth to support a diversity of applications. Network services permit connectivity or transport between different networks. A network service provider is distinctively also the owner of the network facilities. Nevertheless, a connectivity service may be offered by a person using network facilities owned by another. 3. Applications Service Providers Provide specific functions like voice services, data services, content-based services, electronic commerce and other transmission services. Applications services are essentially the functions which are delivered to end-users. 4. Content Applications Service Providers Special subset of applications service providers including traditional broadcast services and newer services such as online publishing and information services.

2.5.2 MyICMS 886 Blueprint The development and widespread usage of Information Communication Technology ICT are central to the realization of vision 2020 of a knowledge based economy. The ICT industry is very important in consideration to the growth of the nation not only because of the revenue and investments which it brings in, but also because it serves as an important element in the manufacturing process of other goods and services. Malaysia has been ranked globally, as the third most favored location for outsourcing of business processes. Besides that, the ICT in a country is often seen and defined as the competing power of the country. Highlighting those significant facts, the Minister of Energy, Water and Communications launched MyICMS 886 which is the blueprint for the communications and multimedia for 2006 through 2010. This blueprint presents an inclusive strategy that addresses the core characteristics of the industry.

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The Malaysian Information, Communications and Multimedia Services strategy incorporates eight (8) services, eight (8) Infrastructures and six (6) Growth Areas. According to the MyICMS 886 blueprint, the eight services are High Speed Broadband, 3G and beyond, Mobile TV, Digital multimedia broadcasting, Digital home, Short range communications using RFID, VoIP/Internet telephony and Universal Service

Provisioning. To support the compress of these, concentration will be on the provision of hard infrastructure such as Multi-convergence networks, 3G Cellular Networks and Satellite Communications Networks. To complement the hard infrastructure, we will also need to develop and implement the required soft infrastructure comprising of next generation internet protocol or IPV6, Information and Network Security, Internet Adoption, Skill Development and Enhanced product and design capabilities. As for generating growth, the six areas that have been categorized are Content Development, ICT-Education Hub, Digital Multimedia Receivers, Communication Devices, Embedded Components, Devices and Foreign Ventures (Ministry of Energy, Water and Communications, 2006).

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Table 2.5.1 MyICMS 886 Service Goals 2006 1 Digital Homes Home gateway/Soho introduced in 60,000 homes Standards/Spectrum Allocated 2008 0.5 homes interwor k with external networks Extensive usage in supply chain manage ment Residential and business service revenue of Rm1b 2010 1M connecte d homes

Short Range Communicati on

Widespread use in various applicati ons High Quality and cheaper voice services RM 1.5b service revenue 60% coverage for underser ved rural houseold s Total Broadba nd penetrati on 75% househol d At least 6m subscrib ers

VoIP/Internet Telephony

Established QoSVoip to PSTN Service revenue RM 0.8b

USP: Universal Service Provision

New USP Projects Broadband internet community project

Increased Broadba nd internet individua l acess 2.8m subscribe rs 50% househol d

High Speed Broadband

1.3m subscribers 25% households

3G and Beyond

0.3m subscribers

1.5m subscribe rs

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Mobile TV

Further pilot service Standards adopted

75% mobile users adopt mobile TV

Digital Multimedia Broadcasting

Standards adopted DTTB Trials Initial commercial deployment

60% househol d coverage for DTTB

Multimedia service anywher e, anytime 90% of total mobile users 95% househol d coverage

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

Table 2.5.2 MyICMS 886 Infrastructure Goals 1 Multiservice Convergence Network (MSCN) 2006 Migration of platformbased services 2008 Complete migration of legacy service Fixed-mobile convergence platform ready High speed mobile data services; Interworking of BWA with 3GPP Satellite as a complementin g transmission medium 20010 Multiple services, Fully IPbased

3G Cellular

Introduction of High Speed Data National policy on satellitebased communic ations Pilot of IPv6 services;

Nationwide 3G services coverage Critical services reachable using satellite Ipv6 full device

Satellite Networks

Next Generatio

Government agencies

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n Internet Protocol (IPv6) 5 Home Internet Adoption

Information & Network Security

and network complian ce One Home 70% household 90% One with internet househol Internet access d with Access internet campaign access Information and network security portal installation of network security measures compliance to international security standards

All ISP are IPv6 enabled

adopt IPv6

Competence Develop ment

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

Product Design and Manufact uring

Capacity building Original Equipment manufacturing High-tech communication industries

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

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Table 2.5.3 MyICMS 886 Growth Areas Goals

2006 1
Content Development

2007

2008

2009

2010

Promote creativity and awareness Strategic alliance with regional partners Sizeable content export that will contribute to communications and multimedia industry revenue

ICT Education Hub

Promote e-learning Ensure high quality education and training systems Regional center for ICT education excellence

Digital Multimedia Receivers

Adopt open standards configuration for manufacturing Local production available in retail market Recognized producer of digital radio receivers and set top box

Content Development

Prototype communication devices Malaysian made communication devices Proliferation of communication devices for domestic market

Embedded Components & Devices

Promote R&D and commercialization Widespread use of locally made integrated chip (IC) products in applications Export revenue contribute to the growth of GDP

Foreign Ventures

Marketing & branding to create more visibility International sub-contracting and outsourcing Contribution to industry revenue

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

2.6 Related research on the Variables

Technology Acceptance Model (TAM) and Extended TAM The technology acceptance model is an influential extension of Ajzen and Fishbeins theory of reasoned action (TRA). It was introduced and developed by Fred Davis in 1986 (Davis et al., 1989). TAM is a model obtained from a theory that addresses the issue of how users come to accept and use a technology. The model proposes that when users are presented to a new software package, a number of variables persuade their decisions about how and when they will use it. Snow et al., (2006) added that the role of TAM is not only to gain knowledge of how technology is issued within organizations, but also how practitioners can influence the development process to positively affect the reception and hence the acceptance of new technologies in a business environment. There are two specific variables, perceived usefulness and perceived ease of use, which are assumed to be fundamental factors of user acceptance (Davis and Arbor, 1989). Bhatti (2007) stated that the TAMs basic construct doesnt fully reflect the precise influences of technological and usage context factors that might differ the users acceptance. Mathieson et al., (2001) argued that the TAM is limited due to the lack of barriers that controls the individual from using an Information Technology if they choose too. Moreover, researchers have also mentioned that due to the generality of TAM, it fails to provide more significant data on users opinions and requires integration with other IT acceptance models to improve its explanatory and specificity (Mathieson, 1991; Agarwal and Prasad, 1998).

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Figure 2.6.1: Technology Acceptance Model Perceived Usefulness External Variables Perceived Ease of Use Attitude Behavioral Intention Actual System use

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

Consequently these two determinants may not fully explain the factors which expect the acceptance of a technology application such as mobile banking. Previous studies have extended the original TAM by adding some constructs into the original TAM model to facilitate understanding of the intention to use mobile banking in Malaysia. Luarn and Lin (2004) amended the original TAM by adding perceived credibility which was also defined by Wang et al., (2003), perceived self-efficacy which was supported by several previous studies (Agrawal et al., 2000; Chau, 2001; Hong et al., 2001; Johnson & Marakas, 2000)

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Figure 2.6.2-: Extended TAM Perceived usefulness

Perceived Ease of Use

Perceived Credibility

Behavioral Intention

Perceived Self-efficacy
Extended Technology Acceptance Model (Extended TAM)

Perceived Usefulness Davis (1989) defined perceived usefulness as the degree to which a person believes that using a particular system would enhance his or her job performance. Previous studies have shown that perceived usefulness is an important predecessor to the intention to adopt and use a technology (Davis et al., 1989; Venkatesh, 1999, 2000; Venkatesh & Davis, 2000). Potential adopters evaluate the consequences of their adoption activities based on the enduring desirability of usefulness obtained from the particular innovation (Chau, 1996; Venkatesh & Davis, 2000). In addition, perceived usefulness is also known as performance expectancy (Venkatesh, 2003; Morris, 2003; Davis, 2003), this was based on the expectancy theory that mocks-up the function of belief in decision making (Porter and Lawler, 1968; Robey, 1979; Vroom, 1964). To explain that, an innovation is perceived to be of high effectiveness when a particular adopter believes that there is a direct relationship between use, on one hand, and performance, productivity, effectiveness and satisfaction, on the other (Lu andYu, 2003). Although many mobile services are leisure related, services such as new, stock changes or banking can also stimulate how a user performs a task. In addition, characteristics that are inherent to mobile services, such as their personalized and ubiquitous nature,

28

their portability, and their context awareness potential are likely to contribute to perceived usefulness of mobile services in ways that have not seen before (Rao and Troshani, 2007). Aderonke and Charles (2010) mentioned that people tend to use an application to the extent they believe it will aid their performance. Amin et al., (2008) stated that perceived usefulness is strongly correlated with productivity. It suggests that using computer in the workplace would improve job performance, increase users productivity, enhance job effectiveness and be valuable in the job. Cheong and Park (2005) found that there exists a positive causality between perceived usefulness and online purchase intentions. Laurn and Lin (2005) also stated that perceived usefulness has significant effect in the development of initial readiness to use mobile banking. These studies prove the significant effect of perceived usefulness in individual reactions to information technology. Hence, it is quite expected that the reason why people use mobile banking is because they find it useful. On these bases, the following hypothesis is proposed: H1: Perceived usefulness will have a positive effect on the behavioral intention to use mobile banking.

Perceived ease of use Perceived ease of use refers to the degree to which a person believes that using a particular system would be effortless (Davis, 1989). In the mobile setting, perceived ease of use corresponds to the degree to which individuals relate freedom of difficulty with the use of mobile technology and services in daily usage (Knutsen et al., 2005). Some mobile devices could be complex or tedious to use, for instance Taylor and Todd (1995) mentioned that there are facts in the media that says using certain services on a mobile phone can be tiresome, especially when browsing internet-like interfaces on mobile devices. Fang et al., (2005) discovered that the nature of an innovation or a task or any service related to it may persuade its perceived ease of use. For instance, perceived ease

29

of use affects the intended use of innovation only when it provides intrinsic motivation, but not when it provides extrinsic rewards to its users (Gefen and Straub, 2000). Several previous studies have shown that there is a positive relationship between perceived ease of use and usage intention. Luarn and Lin (2005) stated that there is a positive causality between perceived ease of use and the usage intention. Guriting and Ndubisi (2006) mentioned that perceived ease of use had a significant positive effect of behavioral intention to use online banking in Malaysia. Ramayah, et al., (2003) found that perceived ease of use has a major impact in the development of initial willingness to use internet banking. Davis et al., (1989) stated that perceived ease of use is an ancestor of perceived usefulness. Perceived ease of use is assumed to act as a predictor of perceived usefulness. In addition, both perceived usefulness and perceived ease of use predict attitude towards using a system (Yan et al., 2009). A system which is more convenient to use will facilitate more system use and accomplishment of tasks, rather than systems that are hard to use (Venkatesh and Morris, 2000). The following hypothesis was proposed: H2: Perceived ease of use will have a positive effect on the behavioral intention to use mobile banking.

Compatibility According to Rogers (1995), compatibility is defined as the degree to which an innovation is perceived as being consistent with the existing values, past experiences and the needs of potential adopters". Compatibility is viewed as an sign of how well the service or technology fits with the way the customers manage and control their finances and how it ensemble their lifestyle (Yu, 2009). Individuals are more probable to adopt an innovation when they find it compatible with their past experience, beliefs and the way they are accustomed to work (Agarwal and Prasad, 1998; Tornatzky and Klein, 1982). Compatibility is illustrated to capture the consistency between an innovation and experience, values, as well as needs of potential adopters (Rogers, 1995). It is a

30

significant aspect of compatibility that consumers are able to combine services and technologies into their daily life (Jayawardhena & Foley, 1998; Lee et al., 2003; Shon & Swatman, 1998). Perceived compatibility was discovered to indirectly influence the users intention to mobile banking via perceived ease of use. Moreover, compatibility was added into the research model and the following hypothesis was proposed.

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

Perceived Self- efficacy The importance of perceived ease of use is supported by Bandura (1982) who defined self efficacy as "judgments of how well one can execute courses of action required to deal with prospective situations". Studies have also shown that an empirical evidence of a causal link between computer self efficacy and perceived ease of use exists (Hanudin, 2007; Reid et al., 2008). The self efficacy of mobile banking is defined as a judgment of ones ability to use a mobile banking service: (Luarn and Lin, 2004). Self efficacy could include knowledge, skill and abilities needed to use the new IT. The existence of a relationship between perceived self efficacy and perceived ease of use was indicated by Davis (1989) and Mathieson et al., (2001). Therefore, perceived self efficacy may indirectly influence the users behavior to use mobile to use mobile banking via perceived ease of use. The following hypothesis was proposed: H4: Self efficacy will have a positive effect on the perceived ease of use of mobile banking.

Subjective Norm By definition, Subjective norm can be defined as a persons observation that most people who are important to him or her should or shouldnt perform the behavior

31

(Fishbein and Ajzen, 1975). The opinions of important referents could comprise the basis for a users feelings concerning the effectiveness of an innovation. For instance, if a superior says that one particular innovation could be useful; such an implication could affect the prospective of a users perception on the usefulness of the innovation (Yi et al., 2006). Prior studies have discovered the importance of such construct in social science studies including in banking studies (Amin et al., 2007; Nysveen et al., 2005; Kleijnen et al., 2004). Amin et al., (2007) found that subjective norm was a key interpreter for mobile banking use from a Malaysian point of view. Nysveen et al., (2005) stated that users exploiting mobile chatting was due to the usage revealing their personal value as well as the influence of others on them. Kleijnen et al., (2004) stated in a study on wireless finance in Netherlands that subjective norm was essential in the development of peoples intention to use wireless finance. Reference groups such as family members, friends, teachers, and bank tellers make a significant force to encourage an individual to behave in consistency with their identities (Amin and Ramayah, 2010). Research also clarifies that the pressure from referent groups to adopt an innovation is effective because it adds to reducing risk associated with adoption (Ishii, 2004; Lu et al., 2003; Teo and Pok, 2003). Though the effect of subjective norms (SN) on intention is indecisive, from previous research there is a significant body of theoretical and empirical evidence concerning the importance of the function of subjective norm on technology use, whether its directly or indirectly related (e.g., Taylor and Todd, 1995; Venkatesh and Davis, 2000; Hsu and Lu, 2004). The comparative influence of subjective norm on intentions is expected to be stronger for potential users with no previous practice since they are more likely to rely on the reactions of others in shaping their intentions (Hartwick and Barki, 1994). If mobile services are supposedly hard to learn and use, unavoidably it will more or less affect a users intention toward adopting. The idea is to predict whether social influence is a significant consideration in peoples intention to use the system. Using the findings of the above studies, we formulated the following hypothesis:

32

H5: Subjective norm will positively influence intention to use Mobile baking. Perceived Credibility By definition, perceived credibility is one's judgment on the privacy and security issues of the mobile banking. Users will at least expect the same level of security thats available when banking online through their PC. Both the Perception issue (such as, how lack of security affects the financial institutions brand) and the real problem (e.g., snooping, injection and modification) must be addressed in order to encourage adoption of mobile banking (Mobile Banking Overview. 2009). The significance of security and privacy to the acceptance of banking technologies has been illustrated in many banking studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). As stated by Wang et al., (2003) security and privacy are the two important dimensions in perceived credibility. In order to initiate credibility, it is argued that both perceived security and privacy are required. Evidences have shown that both security and privacy could become obstacles for the adoption of mobile services (Fang et al., 2005, Pikkarainen et al., 2004). The significance of security and privacy to the acceptance of banking technologies has been noted in many banking studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). Normally, fear of the lack of security is considered as an important factor affecting the acceptance. One of these studies was conducted by Ndubisi and Sinti (2006), they observed internet banking perception among bank customers in Malaysia, and concluded that the risk was believed to be a weak predictor because of the banks assurance over the security of their internet banking. The banks supported that all the cyber banks in Malaysia endorse this product as a fully secure option with 128-bit encryption technology. Comparably, Pikkarainen et al., (2004), examined internet banking from a Finnish perspective and they found that perceived credibility was found to be not considerably related to internet banking acceptance.

33

Opposing to the above studies, Ramayah et al., (2006) who examined users and non-users perceptions of internet banking found that security was a key predictor to measure internet banking use by the users. Similarly, Wang et al., (2004) examined the acceptance of internet banking in Taiwan; they found that PSP (perceived security and privacy) had a crucial positive effect on behavioral intention to use internet banking. Ramayah and Ling (2002) stated that the respondents ranked security as one of the significant factors when adopting Internet banking. Luarn and Lin (2005) also examined that perceived credibility has significant role in the development of willingness to use mobile banking. As mobile banking is considered relatively new, perceived credibility has a higher ability to predict and analyze the uses intention to use mobile banking. H6: Perceived Security and Privacy will have a positive effect on the credibility of use of mobile banking. H7: Perceived credibility will have a positive effect on the behavioral intention to use mobile banking.

Perceived risk Initially perceived risk was primarily related to fraud or product or product quality, but today and as people got engaged in online behavior, perceived risk is largely associated to financial, psychological, physical, or even social risks in online transactions (Forsythe and Shi, 2003; Im et al., 2008). Fain and Roberts (1997) defined risk is a perception of consumer, not a characteristics of a product Featherman (2002) stated that service performance risk (i.e. risk related to service) is the key determinant of e-service adoption. Wong and Chang (2005) considered that risk generally arises from the uncertainty that users face when they cannot anticipate the consequences of their purchase decision. When adopting mobile banking/payment, financial institutions must

34

weigh and consider the risks. Below, Lawhorn (2010) states that there are several key areas that should be considered. Third party providers: Mobile payment service providers offer a system for consumes to transfer value from their current accounts with banks/regulated financial institutions. These service providers are known as Money Service Businesses (MSBs) and they function as a financial intermediary. MSBs have to fulfill the laws in the state in which they are located. If a financial company decides to use an MSB for mobile payment transactions, they ought to ensure review and earn confidences with the MSBs information security practices. Regulatory and legal liability: Currently the United States as few safeguards against abuse of mobile payments. There has been little progress in formulating and publicizing guidance and the traditional money laundering countermeasures are insufficient to address the impending threat posed by abuse of mobile payments to todays e-banking and cashless system. Fraud/loss prevention: Given the dynamic nature and magnitude of security threats in the wireless environment, it is crucial that the financial institutions implement intermittent independent security vulnerability assessments of their mobile payment systems that recognize apprehensive transactions or payment behaviors. In general, the mobile payment industry has made several vital improvements in the viability and security of electronic payments but there are still some major risks to financial institutions adopting the service today. Relating to prior studies and group discussions, it is obvious that users intention to use new technology is affected by whether or not such risk does really exist. Based on the literature, perceived risk could directly influence users intention to use mobile banking. As per this conclusion, the following hypothesis was formulated: H8: Perceived risk will have a negative effect on behavioural intention to use mobile banking.

35

User Predisposition User predisposition refers to the internal factors of an individual user of mobile services. There are facts stating that successful acceptance of innovations depends as much on individual adopter differences as on the innovation itself. Personal differences severely influence adoption. Therefore, recognizing individual differences that impact technology adoption is significant as it helps categorize segments of adopters who are more likely to implement technology innovations than others, which in return, helps providers concentrate on adopter needs more narrowly (Massey et al., 2005). Furthermore, these individual adopters can act as opinion leaders or change agents to assist the diffusion of the technology further. User predisposition is divided to a number of factors including individuals prior knowledge and familiarity of existing mobile services, behavioral control, compatibility, image, personal innovativeness, and perceived enjoyment. Prior knowledge is critical for the comprehension of the technology and its related services. Knowledge appears when a potential adopter discovers the existence of an innovation and gains some understanding concerning its functionality (Herr et al., 1991). Knowledge comprises of two components, specifically, expertise and familiarity. For instance, the previous constitutes the number of mobile services-related experiences accumulated by consumers over time, which consists of exposure to advertising, information search, and interaction with salespersons. The second represents the capability to use mobile services, and it includes beliefs about service features (i.e. cognitive structures) in addition to decision rules for acting on those beliefs (i.e. cognitive processes) (Alba and Hutchinson, 1987). Adopters previous experiences with a technology or service whether it is a positive or negative experiences, can have a significant impact on their perceptions and attitudes towards that technology or service (Lee et al., 2003; Taylor and Todd, 1995)

36

The other variable is perceived behavioral control, which is a dynamic and sociocognitive concept. Perceived behavioral control is an individuals belief about the presence or absence of requisite resources and opportunities (Ajzen and Madden, 1986). A more recent definition illustrates perceived behavioral control as a construct which reveals user perceptions of both internal and external limitation of adopting an innovation (Yi et al., 2006). In the perspective of mobile services adoption, perceived behavioral control refers to the individuals perception of how easy or difficult it is to get mobile services which includes individuals ability to afford the costs related with mobile services (Rao and Troshani, 2007) Recent empirical findings proposes that perceived behavioral control consists of two discrete components, namely, self-efficacy which is an individuals judgment of their capability to perform a behavior, and controllability which represents an individuals belief if they have the necessary resources and opportunities to adopt the innovation (Hung et al., 2003; Wang et al., (2006). In short, perceived behavioral control signifies a subjective judgment of the degree of control over a behaviors performance, not the perceived likelihood that performing the behavior will produce a given outcome (Ajzen, 1991). Another variable within the user predisposition construct is compatibility. Rogers (1995) defines compatibility as the degree to which an innovation is observed to be consistent with existing values of potential adopters. Generally speaking, high incompatibility will adversely affect potential adopters of an innovation, which reduces the likelihood of adoption (Saaksjarvi, 2003). Individuals are most probably to adopt an innovation when they find it compatible with their prior experience, beliefs and the way they are accustomed to work (Agarwal & Prasad, 1998; Tornatzky & Klein, 1982). Yu (2009) states that compatibility is observed as an indicator of how well the service or technology fits with the way the customers control and manage their finances and how it suits their lifestyle. Rogers (1995) mentions that compatibility is described to capture the reliability between an innovation and the experiences, values, as well as needs of

37

potential adopters. The compatibility construct has also provided a consistent explanation of technology adoption decisions (Tornatzky & Klein, 1982). In the context of wireless devices, lifestyle compatibility is the level to which adopters believe mobile devices and services can be assimilated into their daily lives. Next, personal innovativeness is the intrinsic willingness of an individual to try out and embrace new technologies and their related services for accomplishing precise goals. Based on the Innovation Diffusion Theory, personal innovativeness symbolizes the risk-taking tendency which exists in certain individuals and not in others (Agarwal and Prasad, 1998; Massey et al. 2005; Parasuraman, 2000). Personal innovativeness represents a convergence of technology-related beliefs which mutually contribute to determining an individuals predisposition to adopt mobile devices and related services (Rao and Troshani, 2007). Hence, given the same level of beliefs and perceptions about an innovation, individuals with higher personal innovativeness are more likely to enhance positive attitudes towards adopting it than less innovative individuals (Agarwal and Prasad, 1998). The identification of personal innovativeness helps identify different categories of mobile service adopters are likely to shape the opinions of later ones by becoming engaged in frequent advise-giving capacities (Brancheau and Wetherbe, 1990; Yi et al., 2006) Finally, intrinsic motivators such as perceived enjoyment need to be added to the model to explain mobile service adoption behavior. Perceived enjoyment refers to the degree to which using an innovation is perceived to be enjoyable in its own right and is considered to be an intrinsic source of motivation (Gahtani and King, 1999). Because the market for innovative mobile consists of both corporate users and consumers, aspects focusing on perceived enjoyment, forms an important consideration (carlsson et al., 2005; Pagani, 2004). That is, adopters use an innovation for the delight or enjoyment its adoption might achieve and, hence, serve as an end unto itself. Further, intrinsic enjoyment, obtained by playing mobile games for example, satisfies pleasure-oriented and operates outside valued outcomes or immediate material needs (i.e. extrinsic

38

motivations), such as improved job performance and increased pay (Mathwick et al., 2001; Moon and Kim, 2001). Previous research proposes that perceived enjoyment is one of the most significant types of user needs (Anckar and DIncau, 2002). H9: User predisposition will have a positive effect on behavioural intention to use mobile banking 2.7 Summary In this chapter, there is a compilation of various definitions of mobile banking taken from previous works. There is a brief but informative discussion on the evolution and advancement of mobile banking. In addition, this chapter covers out how mobile banking has turned out to be successful in Western Europe. There is also information on how mobile banking is performing in Malaysia and how the Government intends to boost the usage of mobile banking using the MyICMS 886 blueprint. This blueprint presents an inclusive strategy such as service goals, infrastructure goals and growth areas goals that address the core characteristics of the industry. It also includes a bridged description about the technology Acceptance Model (TAM) and the Extended TAM. This chapter also covers a detailed explanation about the variables affecting the intention to use mobile banking in Malaysia.

39

Chapter 3 Research Methodology

3.1 Introduction
The objective of this research is to identify the key determinants of Mobile Banking adoption among users in Malaysia. Therefore, this chapter provides a description of the methodology used for this research. In this chapter, there is a detailed indication on the instruments used in the data mining process. Both the conceptual framework and the theoretical framework are presented in this chapter. There is also enlightenment on how the independent variables will influence the independent variables and the suggested hypotheses. Additionally, the questionnaire design, research approach, data resources, data collection method, measurement of the variables, sampling method, sample size / population size, unit of analysis and data analysis techniques will also be elaborately explained in this chapter.

3.2 Conceptual Framework

In order to build a conceptual framework, various factors have been taken into consideration as potential variables. After extensive studies done abroad, six variables have been identified as possible key factors of Mobile Banking adoption in Malaysia. Perceived usefulness is seen as a determinant of consumers intention to adopt mobile banking. Another predicted determinant is perceived ease of use. Perceived innovativeness is predicted to have an effect on the perceived ease of use. Both perceived usefulness and perceived ease of use were adopted from the TAM model. Another estimated determinant of consumers intention to use mobile banking is perceived credibility. Additionally, subjective norm is also seen as a possible determinant that would persuade consumer adoption. Another possible determinant that

40

would influence the adoption of mobile banking and was discussed in this chapter is Perceived risk. Finally, the last possible determinant is user predisposition, which might be influencing the adoption of mobile banking in Malaysia. Figure 3.2: Theoretical Framework

Perceived Usefulness

Perceived Ease of Use

Perceived Credibility Intention to use Mobile Banking

Perceived Compatibility

Perceived Risk

Perceived Self-efficacy

Subjective Norms Perceived Security & Privacy

User Predisposition

TAM model has been adopted and additional appropriate constructs have been added. This section explains in details the justification for the constructs to be integrated in the research and the hypothesized affiliation amongst these constructs.

41

3.3 Hypothesis Development

Perceived Usefulness Davis (1989) defined perceived usefulness as the degree to which a person believes that using a particular system would enhance his or her job performance (Ibid, p.320). Previous studies have shown that perceived usefulness is an important predecessor to the intention to adopt and use a technology (Davis et al., 1989; Venkatesh, 1999, 2000; Venkatesh & Davis, 2000). Potential adopters evaluate the consequences of their adoption activities based on the enduring desirability of usefulness obtained from the particular innovation (Chau, 1996; Venkatesh & Davis, 2000). In addition, perceived usefulness is also known as performance expectancy (Venkatesh, 2003; Morris, 2003; Davis, 2003), this was based on the expectancy theory that mocksup the function of belief in decision making (Porter and Lawler, 1968; Robey, 1979; Vroom, 1964). To explain that, an innovation is perceived to be of high effectiveness when a particular adopter believes that there is a direct relationship between use, on one hand, and performance, productivity, effectiveness and satisfaction, on the other (Lu and Yu, 2003). Although many mobile services are leisure related, services such as new, stock changes or banking can also stimulate how a user performs a task. In addition, characteristics that are inherent to mobile services, such as their personalized and ubiquitous nature, their portability, and their context awareness potential are likely to contribute to perceived usefulness of mobile services in ways that have not seen before (Rao and Troshani, 2007). Aderonke and Charles (2010) mentioned that people tend to use an application to the extent they believe it will aid their performance. Amin et al., (2008) stated that perceived usefulness is strongly correlated with productivity. It suggests that using computer in the workplace would improve job performance, increase users productivity, enhance job effectiveness and be valuable in the job. Cheong and Park (2005) found that there exists a positive causality between perceived usefulness and online purchase intentions. Laurn and Lin (2005) also stated that perceived usefulness has significant

42

effect in the development of initial readiness to use mobile banking. These studies prove the significant effect of perceived usefulness in individual reactions to information technology. Hence, it is quite expected that the reason why people use mobile banking is because they find it useful. On these bases, the following hypothesis is proposed: H1: Perceived usefulness will have a positive effect on the behavioral intention to use mobile banking.

Perceived ease of use Perceived ease of use refers to the degree to which a person believes that using a particular system would be effortless (Davis, 1989). In the mobile setting, perceived ease of use corresponds to the degree to which individuals relate freedom of difficulty with the use of mobile technology and services in daily usage (Knutsen et al., 2005). Some mobile devices could be complex or tedious to use, for instance Taylor and Todd (1995) mentioned that there are facts in the media that says using certain services on a mobile phone can be tiresome, especially when browsing internet-like interfaces on mobile devices. Fang et al., (2005) discovered that the nature of an innovation or a task or any service related to it may persuade its perceived ease of use. For instance, perceived ease of use affects the intended use of innovation only when it provides intrinsic motivation, but not when it provides extrinsic rewards to its users (Gefen and Straub, 2000). Several previous studies have shown that there is a positive relationship between perceived ease of use and usage intention. Luarn and Lin (2005) stated that there is a positive causality between perceived ease of use and the usage intention. Guriting and Ndubisi (2006) mentioned that perceived ease of use had a significant positive effect of behavioral intention to use online banking in Malaysia. Ramayah et al., (2003) found that perceived ease of use has a major impact in the development of initial willingness to use internet banking. Davis et al., (1989) stated that perceived ease of use is an ancestor of perceived usefulness. Perceived ease of use is assumed to act as a

43

predictor of perceived usefulness. In addition, both perceived usefulness and perceived ease of use predict attitude towards using a system (Yan et al., 2009). A system which is more convenient to use will facilitate more system use and accomplishment of tasks, rather than systems that are hard to use (Venkatesh and Morris, 2000). The following hypothesis was proposed: H2: Perceived ease of use will have a positive effect on the behavioral intention to use mobile banking.

Compatibility According to Rogers (1995) compatibility is defined as the degree to which an innovation is perceived as being consistent with the existing values, past experiences and the needs of potential adopters". Compatibility is viewed as a sign of how well the service or technology fits with the way the customers manage and control their finances and how it ensemble their lifestyle (Yu, 2009). Individuals are more probable to adopt an innovation when they find it compatible with their past experience, beliefs and the way they are accustomed to work (Agarwal and Prasad, 1998; Tornatzky and Klein, 1982). Compatibility is illustrated to capture the consistency between an innovation and experience, values, as well as needs of potential adopters (Rogers, 1995). It is a significant aspect of compatibility that consumers are able to combine services and technologies into their daily life (Jayawardhena & Foley, 1998; Lee et al., 2003; Shon & Swatman, 1998). Perceived compatibility was discovered to indirectly influence the users intention to mobile banking via perceived ease of use. Moreover, compatibility was added into the research model and the following hypothesis was proposed.

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

44

Perceived Self- efficacy The importance of perceived ease of use is supported by Bandura (1982) who defined self efficacy as "judgments of how well one can execute courses of action required to deal with prospective situations". Studies have also shown that an empirical evidence of a causal link between computer self efficacy and perceived ease of use exists (Hanudin, 2007; Reid et al., 2008). The self efficacy of mobile banking is defined as a judgment of ones ability to use a mobile banking service: (Luarn and Lin, 2004). Self efficacy could include knowledge, skill and abilities needed to use the new IT. The existence of a relationship between perceived self efficacy and perceived ease of use was indicated by Davis (1989) and Mathieson et al., (2001). Therefore, perceived self efficacy may indirectly influence the users behavior to use mobile to use mobile banking via perceived ease of use. The following hypothesis was proposed: H4: Self efficacy will have a positive effect on the behavioral intention to use mobile banking.

Subjective Norm By definition, Subjective norm can be defined as a persons observation that most people who are important to him or her should or shouldnt perform the behavior (Fishbein and Ajzen, 1975). The opinions of important referents could comprise the basis for a users feelings concerning the effectiveness of an innovation. For instance, if a superior says that one particular innovation could be useful; such an implication could affect the prospective of a users perception on the usefulness of the innovation (Yi et al., 2006). Prior studies have discovered the importance of such construct in social science studies including in banking studies (Amin et al., 2007; Nysveen et al., 2005; Kleijnen et al., 2004). Amin et al., (2007) found that subjective norm was a key interpreter for mobile banking use from a Malaysian point of view. Nysveen et al., (2005) stated that users exploiting mobile chatting was due to the usage revealing their personal value as

45

well as the influence of others on them. Kleijnen et al., (2004) stated in a study on wireless finance in Netherlands that subjective norm was essential in the development of peoples intention to use wireless finance. Reference groups such as family members, friends, teachers, and bank tellers make a significant force to encourage an individual to behave in consistency with their identities (Amin and Ramayah, 2010). Research also clarifies that the pressure from referent groups to adopt an innovation is effective because it adds to reducing risk associated with adoption (Ishii, 2004; Lu et al., 2003; Teo and Pok, 2003). Using the findings of the above studies, we formulated the following hypothesis: H5: Subjective norm will positively influence intention to use Mobile banking.

Perceived Credibility By definition, perceived credibility is one's judgment on the privacy and security issues of the mobile banking. Users will at least expect the same level of security thats available when banking online through their PC. Both the Perception issue (such as, how lack of security affects the financial institutions brand) and the real problem (e.g., snooping, injection and modification) must be addressed in order to encourage adoption of mobile banking (Mobile Banking Overview. 2009). The significance of security and privacy to the acceptance of banking technologies has been illustrated in many banking studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). As stated by Wang et al., (2003) security and privacy are the two important dimensions in perceived credibility. In order to initiate credibility, it is argued that both perceived security and privacy are required. Evidences have shown that both security and privacy could become obstacles for the adoption of mobile services (Fang et al., 2005, Pikkarainen et al., 2004). The significance of security and privacy to the acceptance of banking technologies has been

46

noted in many banking studies (Howcroft et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). Normally, fear of the lack of security is considered as an important factor affecting the acceptance. One of these studies was conducted by Ndubisi and Sinti (2006), they observed internet banking perception among bank customers in Malaysia, and concluded that the risk was believed to be a weak predictor because of the banks assurance over the security of their internet banking. The banks supported that all the cyber banks in Malaysia endorse this product as a fully secure option with 128-bit encryption technology. Comparably, Pikkarainen et al., (2004), examined internet banking from a Finnish perspective and they found that perceived credibility was found to be not considerably related to internet banking acceptance. Opposing to the above studies, Ramayah et al., (2006) who examined users and non-users perceptions of internet banking found that security was a key predictor to measure internet banking use by the users. Similarly, Wang et al., (2004) examined the acceptance of internet banking in Taiwan; they found that PSP (perceived security and privacy) had a crucial positive effect on behavioral intention to use internet banking. Ramayah and Ling (2002) stated that the respondents ranked security as one of the significant factors when adopting Internet banking. Luarn and Lin (2005) also examined that perceived credibility has significant role in the development of willingness to use mobile banking. As mobile banking is considered relatively new, perceived credibility has a higher ability to predict and analyze the uses intention to use mobile banking. H6: Perceived Security and Privacy will have a positive effect on the credibility of use of mobile banking. H7: Perceived credibility will have a positive effect on the behavioral intention to use mobile banking.

47

Perceived risk Initially perceived risk was primarily related to fraud or product or product quality, but today and as people got engaged in online behavior, perceived risk is largely associated to financial, psychological, physical, or even social risks in online transactions (Forsythe and Shi, 2003; Im et al., 2008). Featherman (2002) stated that service performance risk (i.e. risk related to service) is the key determinant of e-service adoption. Wong and Chang (2005) considered that risk generally arises from the uncertainty that users face when they cannot anticipate the consequences of their purchase decision. Relating to prior studies and group discussions, it is obvious that users intention to use new technology is affected by whether or not such risk does really exist. Based on the literature, perceived risk could directly influence users intention to use mobile banking. As per this conclusion, the following hypothesis was formulated: H8: Perceived risk will have a negative effect on behavioural intention to use mobile banking.

User Predisposition User predisposition refers to the internal factors of an individual user of mobile services. There are facts stating that successful acceptance of innovations depends as much on individual adopter differences as on the innovation itself. Personal differences severely influence adoption. Therefore, recognizing individual differences that impact technology adoption is significant as it helps categorize segments of adopters who are more likely to implement technology innovations than others, which in return, helps providers concentrate on adopter needs more narrowly (Massey et al., 2005). Furthermore, these individual adopters can act as opinion leaders or change agents to assist the diffusion of the technology further. User predisposition is divided to a number of factors including individuals prior knowledge and familiarity of existing mobile

48

services, behavioral control, compatibility, image, personal innovativeness, and perceived enjoyment. H9: User predisposition will have a positive effect on behavioral intention to use mobile banking

3.4 Research Approach In order to substantiate the hypothesis proposed on the key factors of mobile banking adoption in Malaysia, it should be scientifically tested. In order for this to happen, data must be collected from the sample / population to be analyzed. There are several ways to collect information with the most prominent ways being via interview and questionnaires. This data is then originated using various mathematical techniques to find out information. As well as collecting data from the sample / population, a different way to collect information is through research and by studying previous work done on the topic to understand their findings and to achieve more knowledge about the topic. The sample / population are regularly determined early and are usually hurdled to the topic we are researching. For example, the topic is about Malaysia, hence limit for the sample / population will be within the geographical area of Malaysia. The reason for all this to ensure the data is accurate and not biased in any kind of way.

3.5 Data Resources Primary data are the data gathered directly from firsthand experience. The defining characteristic of primary data is that data collected is unique and the research will stay unrevealed until the study is published. Primary data can be classified into two

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categories. Qualitative in nature is one of these primary data, which is usually text based. Or quantitative in nature, which signifies the numerical values. Among the methods of collecting the primary data are via questionnaires, interviews, observations, group interviews, case-studies, diaries, critical incidents and portfolios. Secondary data is data that has already been collected for use in previous studies. Secondary data can also been divided into two based on their nature. These two natures are qualitative data which comprises of biographies, personal letters, documents, diaries, records, published material, computer database, and policy statements. The other nature is quantitative data, it would include market research, census, and economic documents, planning documents or specimens.

3.6 Data Collection Method In this research, the data collection method was implemented through distributing questionnaires. The motive for using the questionnaires method for collecting data was because prior work which has been cited in this paper have all chosen this method (Birch and Young, 1997; Wang et al., 2003; Mwaura, 2009; Wilcox, 2010;

Weber and Darbellay, 2010; Yong and Gorman, 2002; Foley, 2005; Davis et al., 1989; Venkatesh, 1999; Venkatesh & Davis, 2000; Venkatesh, 2003; Morris, 2003; Davis, 2003; Porter and Lawler, 1968; Robey, 1979; Vroom, 1964; Rao and Troshani, 2007; Cheong and Park, 2005; Amin et al., 2008; Knutsen et al., 2005; Taylor and Todd, 1995; Fang et al., 2005; Gefen and Straub, 2000; Guriting and Ndubisi, 2006; Ramayah et al., 2003; Yan et al., 2009; Agarwal and Prasad, 1998; Tornatzky and Klein, 1982; Jayawardhena & Foley, 1998; Lee et al., 2003; Shon & Swatman, 1998; Hanudin, 2007; Reid et al., 2008; Howcroft, et al., 2002; Polatoglu and Ekin, 2001; Sathye, 1999; Fang et al., 2005, Pikkarainen et al., 2004; Ndubisi and Sinti, 2006; Ramayah and Ling, 2002 There are several advantages which make the questionnaire method most preferable. Amongst these advantages are it is cost effective, reduce bias (questionnaires

50

are handed out randomly), and it has a large amount of correspondents. There are also other advantages of questionnaires such as its undisputed, respondents will have time to think about their response, no prior arrangements are needed when handing out questionnaires, and questionnaires can cover wide geographic location because it can be posted, faxed or e-mailed.

3.7 Questionnaire Design The questionnaire was designed, pre-tested and then administered to a random sample of mobile service subscribers. The questionnaire was designed to test these variables, Perceived Usefulness, Perceived Ease-of-use, Perceived Credibility, Perceived risk, Subjective Norm and User Predisposition and also to collect demographic information about the correspondents. Based on Luarn and Lin (2005), the questions for each construct shall be adapted from prior research. The first section was designed to collect demographic information of the respondents. There were 5 demographics which will give rough background information of the sample chosen. The questions covered gender, age, marital status, education attained, and also income level in the format of close-ended multiple-choice questions except for age. These questions were adopted from Amin et al., (2006). As for the second section, the constructs, perceived usefulness questions were adopted from the works of Taylor and Todd (1995), Khalifa and Cheng (2002), Wang and Barnes (2007), Kurnia et al., (2006) and Wong and Hiew (2005). For perceived easeof-use, the questions were adopted from Luarn and Lin (2005). On the other hand, for social influences, the questions were adopted from Luarn and Lin (2005), Lin and Wang (2005) and Wong and Hiew (2005). Additional questions regarding the other variables were also added. For all the constructs, a five- point Likert-type scale was used, ranking from 1 (strongly disagree) to 5 (strongly agree). By using the Likert scale, respondents were able to indicate their level of agreement or disagreement for each statement.

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3.8 Measurement For the demographic questions, it was computed using a nominal scale as done by Haque and Raihan (2004) and Amin et al., (2006). This nominal scale was used to collect a range of values for values in obtaining age of the correspondents and much more. For the answers of the questions, it was based on a five-point Likert-type scale, ranking as 1 (strongly disagree), 2 (disagree), 3 (neutral), 4 (agree), and 5 (strongly agree), each to factor out a single maximum point, for the measurement of the whole designs of the questionnaires. Statements that are negatively acknowledged will be reversed coded during the analysis. This process will be done because according to field, (2005) negative worded items are necessary to trim down any bias that might occur due to the fact that respondents have the tendency to read the items in a scenario when they are phrased the other way around. Using a Likert-type scale, an attitude statement is given, and then the respondents choose a point on the scale reflecting his or her position towards the statement. The reason behind choosing the Likert-type scale was done based on the previous work of Bhatti, (2007) and Amin et al., (2006).

3.9 Sampling Method After evaluating all possible methods of sampling, the most proper method for this research has been identified as convenience sampling method. This sampling method is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher. Convenience sampling generally assumes a homogenous population, and that one person is most likely like the other. Distribution of the questionnaires was done through personal administration. Written questionnaires reduce interviewer bias because there is uniform question presentation (Jahoda, et al., 1962).

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3.10 Sample Size/Population A total of 230 questionnaires were distributed randomly. The target respondents were those who are able to communicate in English, as the questionnaire will be constructed using English as the medium. Target respondents were people who own and use mobile communication devices, such as PDAs, hand phones or smart phones. The study will be covered within MMU Melaka Campus, which will include students from various faculties and departments. The distribution method used for this study was paper based questionnaires.

3.11 Unit of Analysis For the unit of analysis, the focus group was individuals from the workforce and students within MMU boundaries, who are mobile service subscribers, aged between 20 49 years from various countries, background, religion, gender and age. The reason behind choosing this range is because based on the Hand Phone User Survey, developed by the Malaysian Communications and Multimedia Commission, the 20 49 age group has been illustrated as the highest users of mobile phones for 3 years of survey, from the year 2005 2007, the last survey being published was in 2007. Besides this, sources were students from various faculties, for instance, Faculty of Engineering, Faculty of Information Science and Technology and Faculty of business and Law. The motive behind this choice was that most of the students in Multimedia University are internet savvy, own mobile phone and have easy access to the internet and also Wi-fi around the campus and at home. The reason why the questionnaires were targeted at individuals and not corporations is because corporations are usually bound to their personal corporate culture and changes are usually decided by the management.

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3.12 Data Analysis Techniques For the demographic section, Descriptive statistics was implemented to describe the basic features of the data in the study. Descriptive statistics present simple summaries about the sample and the measures. As for the constructs, inferential statistics was used. Inferential statistics are used in order to make judgments of the probability whether an observed difference between groups is a dependable one or one that might have happened by chance in this study. Multiple regression analysis has been chosen to test the hypotheses for the purpose of this study. The reason behind choosing Multiple regression analysis is because it is basically applied to analyze relationships between a single dependent variable and a number of Independent variables (Hair et al., 2005). To implement data analysis, Statistical Package for the Social Sciences (SSPS) was adopted. To ensure the accuracy of the data, the data will be entered twice and to be able to check for any inconsistencies.

3.13 Limitation A few possible limitations have been identified previously. Firstly, there is a possibility that all the questionnaires handed out will be answered. Secondly, there might be candidates in the focus group who are reluctant to answer the questionnaires handed out. Thirdly, the practice of online facilities generally e-mail might bring a problem where the recipient does not reply the questionnaire which has been sent to them.

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3.14 Summary In this chapter, it gives an elaborated explanation about the method used to collect the data, procedures used to collect the data and the methods used to analyze the data acquired from the questionnaires. In order to develop the questionnaire, previous works regarding the factors of mobile banking have been examined and adopted. Besides this, the targeted group of individuals chosen to complete the questionnaires were aged between 20 49 have been identified and reasons behind selecting this age group have also been explained in this chapter. This sampling method, which is snowball sampling was selected in order to achieve real, accurate and unbiased data.

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CHAPTER 4

DATA ANALYSIS AND FINDINGS

4.1 Introduction The objective of this chapter is to confer the data analysis and findings of this research based on various tests that were conducted on questionnaire items. First, respondents profile is discussed which includes demographics as well as their mobile usage. Subsequently, mean analysis for each variable is discussed using the means and standard deviations of items in each variable. This chapter also discusses Reliability tests and whether the results are reliable or not. Cronbachs Alpha was used to conduct the reliability tests. Correlation of all variables was tested using the Spearman Rhos correlation coefficient, which was also used to test for hypotheses. Finally, a summary of this chapter as well as a summary of the hypotheses results is included.

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4.2 Descriptive Analysis Of the 230 questionnaires that were distributed, 200 questionnaires were returned. However, 10 of them had to be rejected due to missing answers or incorrect filling-in. This means that there was a response rate of 82.61. Data was analyzed using the SPSS (Statistical Package for Social Science) software. Table 4.1 below shows a general demographic profile of the respondents and Table 4.2 on the next page shows technical profile of respondents.

Table 4.1 Demography profile of respondents Frequency Percentage Cumulative Percentage

Gender
Male Female Total 119 71 190 31 153 4 2 190 74 116 190 34 35 7 114 190 182 62.6 37.4 100.0 16.3 80.5 2.1 1.1 100.0 38.9 61.1 100 17.9 18.4 3.7 60.0 100.0 95.8 95.8 17.9 36.3 40.0 100.0 38.9 100.0 16.3 96.8 98.9 100.0 62.6 100

Age group

15-20 years 21-25 years 26-30 years 31- & above Total

Nationality

Malaysian Others Total

Race

Malay Chinese Indian Others Total

Marital

Single

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Status Faculty

Married Total FBL FIST FET Total

8 190 106 36 48 190 35 66 38 17 23 11 190

4.2 100.0 55.8 18.9 25.3 100.0 18.4 34.7 20.0 8.9 12.1 5.8 100.0

100.0

55.8 74.7 100.0

Monthly income

RM0-RM500 RM501-RM1000 RM1001-RN1500 RM1501-RM2000 RM2001-RM2500 RM2501 & ABOVE Total

18.4 53.2 73.2 82.1 94.2 100.0

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Table 4.2: Respondents profile of Understanding m-banking

Frequency Percentage Cumulative Percentage
Familiarity mobile banking with Yes No Not that much Total Used mobile banking before Yes Never Once before A few times Intending to use in future Total Used mobile devices <1 year 1-less than 3 years 3-less than 5 years 5 or more years Total Satisfaction from Yes No Total Use banking of mobile Very unlikely somewhat likely not sure somewhat likely very likely Total 118 41 31 190 79 62 24 21 4 190 57 62 25 46 190 130 60 190 21 35 57 56 21 190 62.1 21.6 16.3 100.0 41.6 32.6 12.6 11.1 2.1 100.0 30.0 32.6 13.2 24.2 100.0 68.4 31.6 100.0 11.1 18.4 30.0 29.5 11.1 100.0 11.1 29.5 59.5 88.9 100.0 68.4 100.0 30.0 62.6 75.8 100.0 41.6 74.2 86.8 97.9 100.0 62.1 83.7 100.0

mobile application

Most of the respondents are already familiar with mobile banking with 62.1%. Results also have shown that 32.6% have never used mobile banking before,

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which could be because the banks they are dealing with doesnt provide this service or didnt properly advertise it to its customers. Majority of respondents are satisfied with their mobile application with a contribution of 68.4%. Respondents that have used mobile banking before have contributed to a 41.6% which is considered below average. When the respondents were asked whether they intend to use mobile banking, 29.5% mentioned that somewhat theyre likely to use mobile banking.

4.2.1 Gender
Figure 4.1 Number and percentage of respondents gender

FEMALE 37%

MALE 63%

From Fig. 4.1 it is evident that the percentage of female respondents was considered low at only 37%. Of all the 190 respondents, only 71 of them were female. Males on the other hand were considered higher with 63%, i.e. male respondents were 119 male.

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4.2.2 Age
Figure 4.2: Respondents age

160 140 120 100 80 60 40 20 0 15-20 years 31 16.3

153

80.5 Series2

4 21-25 years

2.1

1.1

26-30 years

31- & above

Respondents were mainly young. Those in the range of 21-25 years were the most respondents. They were 153 in total, which were 80.5% of total respondents. This percentage could have been due to the fact that the average age of most university students is in the range of 21-25 years. Those aged 15-20 were the second largest group having 16.3% or 31 of total respondents. There were only 4 respondents aged at 26-30, having 2.1% presentation. Finally, those in the age bracket of 31and above were only 2 (1.1%).

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4.2.3 Nationality
Figure 4.3: Nationality

116 120 100 80 60 38.9 40 20 0 1 2 74 61.1 Malaysian Others

There were two categories in nationality of respondents: Malaysians and others. According to figure 4.3, majority of the respondents were others contributing to 61.1% or 116 respondents from comprised from different nationalities. Malaysians, who consists of the three ethnicities (Malay, Chinese and Indians) contributed to 38.9%, i.e. 74 respondents.

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4.2.4 Race
Figure 4.4: Race

120 100 80 60 40 20 0 Malay Chinese Indian 34 17.9 35 18.4 7 3.7

114

60 Series2

Others

There were four categories in race or ethnicity of respondents: Malay, Chinese, Indian and Others. By Others, we refer to the Non-Malaysians. According to figure 4.3, majority of the respondents were Others contributing to 60%. Chinese with 18.4% contribution comes after others (Non-Malaysians). Malaysians were too close to the Chinese with only one respondent behind, they had a total of 35 respondents and 17.9% of contribution. Respondents from the Indian race were few with only 7 respondents.

4.2.5 Marital Status

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Figure 4.5: Marital Status

200 180 160 140 120 100 80 60 40 20 0

182

95.8 Series2

4.2

Figure 4.5 above shows the marital status of the respondents. Not surprisingly, majority of the respondents were single with a contribution of 95.8%. This is normal because most of university level students are single and not yet settled for marriage. Responses from Married individuals were very few with 4.2% responses.

4.2.6 Faculty

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Figure 4.6: Faculty

120 100 80

106

55.8 60 40 20 0 FBL FIST FET 36 25.3 18.9 48 Series2

Figure 4.6 shows the faculties of which the respondents are related too. The study covered three of Multimedia University (Melaka Campus) faculties. FBL (Faculty of Business and Law) FIST (Faculty of Information Science and technology) and FET (Faculty of Engineering and Technology). Majority of respondents are from FBL with a contribution of 55.8% which is equal to 106 respondents in total. Respondents from FET come next with 48 responses and a contribution of 25.3%. Additionally, respondents from FIST made a contribution of 18.9% i.e. 36 responses.

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4.2.7 Monthly Income

Figure 4.7: Monthly Income
66

70 60 50 40 30 20 10 0 35 18.4

34.7

38 20 23 17 8.9 12.1 11 5.8 Series2

Figure 4.7 above illustrates income ranges of the respondents. It is evident that least respondents were in the range of RM2501 & Above (5.8%). This could have been because these respondents are on Government scholarship, etc. The most respondents on the other hand were in the range of RM501-RM1000 (34.7%). This is illustrated by the fact that respondents were students and the income represented the allowance they get from their guardians (whether they are on scholarships or self-sponsored). The income was in terms of monthly basis and not annual.

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4.3 Mean values of respondents

Table 4.3: Mean analysis for perceived usefulness

Item ID PU1

Item Description Mobile banking would be useful in conducting my banking transactions

Mean Std. (n=190) Deviation 3.5316 .85854

PU2

Using mobile banking enables me to conduct banking transactions more quickly

3.6842

.81342

PU3

If I were to adopt mobile banking, it would be a more effective way to make transactions

3.7000

.86648

PU4 PU5

Mobile banking would give me greater control Mobile banking would improve the quality of my decision making

3.6526 3.4053

.87006 .89026

PU6

Using m-banking will allow me to enjoy a variety of services regardless of my recent location

3.6421

.88987

PU7

I am able to find mobile connectivity in the remotest places, including areas where internet applications is weak

3.4579

.97905

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Based on the results from table 4.3, apparently most respondents were close to neutral, when asked if mobile banking would be useful when conducting their banking transactions with a mean of 3.5316. When asked if using mobile banking enables them to conduct banking transactions more quickly, majority were also close to neutral with a mean of 3.6842. The highest agreement rate among subjects stating a mean of 3.7000 tended to agree that if mobile banking were adopted, it would be an effective way to make transactions. Response regarding mobile banking giving respondents greater control was positive with a mean 3.6526. Additionally, when asked if mobile banking would improve the quality of the respondents decision making, the mean was close to neutral with 3.4053. Thought using m-banking will allow them to enjoy a variety of services regardless of my recent location with a mean of 3.6421. Being able to find connectivity in the remotest places, including areas where internet application is weak reporting a mean of 3.4579. Note: PU (perceived usefulness)

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Table 4.4: Mean analysis for perceived ease of use

Item ID PE1

Item Description I find banking transactions on mobile phones easy and simple I find mobile banking clear and understandable proficient It would be easy to do what I want while using mobile banking I find mobile banking through cell phone very user friendly I find mobile banking less time consuming Using mobile banking can be frustrating (R) I find certain services on mobile phones very friendly, especially when browsing internet-like interfaces on mobile devices

Mean Std. (n=190) Deviation 3.5579 .91102

PE2

3.5895

.87281

PE3

3.6211

.79254

PE4

3.4789

.99047

PE5 PE6 PE7

3.6737 2.6579 3.5579

.89018 1.02550 .95081

Table 4.4 above represents the means and standard deviation of responses about the variable perceived ease of use. Respondents slightly agreed that finding banking transactions on mobile phones easy and simple with a mean of 3.5579. Respondents with a mean of 3.5895 agreed that mobile banking is clear and understandable. They also agreed that it would be easy to do what they want while using mobile banking with mean values of 3.6211. Respondents also agreed that they find mobile banking through cell phone very user friendly with mean values of 3.4789. The highest agreement rate among

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subjects stating a mean of 3.6737 stated that mobile banking is less time consuming. Majority disagreed that using mobile banking can be frustrating with mean values of 2.6579. Respondents find certain services on mobile phones very friendly, especially when browsing internet-like interfaces on mobile devices with mean values of 3.5579. Note: PE (perceived ease of use)

Table 4.5: Mean analysis for perceived compatibility

Item ID Item Description PCO1 I find mobile banking compatible with my beliefs and the way they are accustomed to work PCO2 I find mobile banking compatible with my past experience PCO3 With mobile banking, I am able to combine services and technologies into my daily life PCO4 I believe mobile banking have filled all the gaps caused by internet banking PCO5 I find mobile banking the best way to manage and control my finances PCO6 I believe mobile banking perfectly assembles my lifestyle

Mean (n=190) 3.4632

Std. Deviation .88264

3.2316

.80937

3.5789

.78449

3.5000

.91865

3.3684

.90913

3.4789

.95235

Table 4.5 above shows the means and standard deviations of the responses regarding the variable: perceived compatibility. Respondents slightly agreed that mobile banking is

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compatible with their beliefs and the way they are accustomed to their work with mean values of 3.4632. Most disagreed when asked if mobile banking was compatible with their past experience 3.2316. Respondents also slightly agreed that theyre able to combine services and technologies into their daily lives with mean values of 3.5789. They also agree that mobile banking have filled all the gaps caused by internet banking with means values of 3.5000. They slightly agreed that mobile banking is the best way to manage and control their finances with mean values of 3.3684. Respondents to some extent agreed that they believe mobile banking perfectly assembles their lifestyle with mean values of 3.4789. Note: PCO (perceived compatibility)

Table 4.6: Mean analysis for perceived self-efficacy

Item ID PS1 PS2

Item Description I am familiar with mobile device I am familiar with checking my account balances through my mobile device I am familiar with paying bills through my mobile device I am of complete awareness and understanding of the benefits provided by mobile banking I am always willing to try new things

Mean (n=190) 3.5895 3.4684

Std. Deviation .98125 1.02175

PS3

3.3000

1.04881

PS4

3.4947

.96908

PS5

3.8632

.91560

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Based on the results from table 4.6, it is clear that most respondents were close to neutral when asked if they were familiar with mobile devices. When asked if they are familiar with checking their account balances through their mobile devices, the mean value also turned out to be somewhat neutral, i.e. 3.4684. Respondents being familiar with paying bills through their mobile devices reported a mean value of 3.3000. When asked if theyre of complete awareness and understanding of the benefits provided by mobile banking, neutrality was also the outcome with mean value of 3.4947. Respondents willing to try new things showed us the highest agreement rate among subjects stating a mean of 3.8632. Note (perceived self-efficacy)

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Table 4.7: Mean analysis for subjective norms

Item ID SN1

Item Description People who influence my behavior suggest that I use mobile banking If I use mobile banking, most of the people who are important to me will grade it as useful If I use mobile banking, most of the people who are important to me will regard it as valuable The reason why I chose to use mobile banking is because of the environment I live in I find it very critical that my surrounding have a positive perception about using mobile banking The media is considered the strongest influence adopters may take into account when choosing mobile banking

Mean (n=190) Std. Deviation 3.3526 .84005

SN2

3.3947

.82742

SN3

3.4158

.91476

SN4

3.5474

.94582

SN5

3.4842

.90107

SN6

3.5474

.84538

Table 4.7 above shows the means and the standard deviations of the various responses for subjective norms. When asked if people who influence their behavior suggest that they use mobile banking, mean value appeared to be 3.3526. Respondents were also slightly neutral with mean value of 3.3947 and 3.4158, when asked if they used mobile banking, most of the people who are important to them will regard it as useful and valuable. Respondents slightly agreed when asked if the reason why they chose to use mobile banking is because of the environment they live in with mean value of 3.5503. Moreover, respondents tended to agree that they find it very critical that their

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surroundings have a positive perception about using mobile banking, showing a mean of 3.4842. Considering the reason why the respondents chose to use mobile banking is because of the environment they live in and that media as the strongest influence adopters may take into account when choosing mobile banking showed mean values of 3.5474 for both questions. Note: SN (subjective norms)

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Table 4.8: Mean analysis for perceived credibility

Item ID PC1

Item Description I believe that trust affects the demand for m-banking services I am comfortable with typing my credit/debit card detail in my mobile for a payment I believe that my transactions with mobile banking providers are likely to be safe I trust mobile banking providers because they keep my best interest in mind I find banking via mobile devices a way to reduce the risk of fraud I think that mobile banking providers do not sincerely consider security and privacy concerns Considering security and privacy protection will make it less difficult to use mobile banking

Mean Std. (n=190) Deviation 3.6789 .93553

PC2

3.3105

.95585

PC3

3.3421

.94495

PC4

3.3947

.92980

PC5

3.3368

.94964

PC6

3.3632

1.03878

PC7

3.3263

.83498

Based on the results from table 4.8, it is clear that most respondents were somewhat neutral when asked if they believe that trust affects the demand for m-banking services with mean value of 3.6789. When asked if they were comfortable with typing their credit/debit card detail in their mobile for a payment, the concluded mean value was 3.3105. Additionally, respondents tended to slightly agree when asked if they believe that transactions with mobile banking providers are likely to be safe with a mean value of 3.3421. The highest agreement rate among subjects reporting a mean value of 3.3947 was

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when they were asked if they trusted mobile banking providers because they keep their best interest in mind. Respondents slightly agree that they find banking via mobile devices a way to reduce the risk of fraud with a mean value of 3.3367. Thinking that mobile banking providers do not sincerely consider security and privacy concerns came up with a mean value of 3.3632. Considering security and privacy protection will make it less difficult to use mobile banking with a mean of 3.3263

Note: PC (perceived credibility)

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Table 4.9: Mean analysis for perceived risk

Item ID Item Description PR1 I find using mobile banking in my transactions not risky PR2 I do not experience any uncertainties or trust issues when making purchasing decisions I find it very risky to type in my personal details when using mobile banking I believe mobile banking is not secure enough to keep passwords or codes safely I believe mobile banking is more secure than internet banking

Mean (n=190) Std. Deviation 3.0842 .97767

3.2789

.86745

PR3

3.4737

.99567

PR4

3.6105

.97367

PR5

3.3526

1.07736

Table 4.8 shows us the mean analysis for perceived risk. Respondents find using mobile banking in their transactions not risky with a mean of 3.0842. Not experiencing any uncertainties or trust issues when making purchasing decisions had a slight agreement by the respondents with a mean value of 3.2789. When asked if they find it very risky to type in their personal details when using mobile banking, it led to mean of 3.4737. Respondents agreed that mobile banking is not secure enough to keep passwords or codes safely with the highest rate of agreement among the respondents (mean= 3.6105). Believing mobile banking is more secure than internet banking, leading to a mean of 3.3526. Note: PR (perceived risk)

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Table 4.10: Average mean of all variables

Variable Perceived usefulness Perceived ease of use Perceived compatibility Perceived self-efficacy Subjective norms Perceived Credibility Perceived risk

Mean (n=190) Std. Deviation 3.7316 .80116 3.6421 3.6895 3.4211 3.6000 3.8684 3.8947 .82187 .87493 .97676 .88372 .90767 .99175

Average mean and standard deviation of all variables was carried out and results were shown in table 4.10. Based on the results, perceived risk had the largest mean average of 3.8947. This meant that the majority of the respondents agreed, on average, regarding the questions asked about the variable. Perceived self-efficacy was the only variable with a mean average of less than 3.5 having 3.4211. Perceived usefulness had an average mean of 3.7316. Perceived ease of use on the other hand had a mean average of 3.6421. Perceived compatibility and subjective norms had average means of 3.6895 and 3.6000 respectively. Perceived credibility had the second largest mean average of 3.8947.

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4.4: Reliability Analysis

Reliability analysis was conducted for this test using the cronbachs alpha. The minimum acceptable alpha for scale reliability is 0.60, this is according to Klassen (2003). All the variables were in the range of 0.60 and above except perceived ease of use with 0.589. Reliability analysis of perceived usefulness was 0.758, perceived compatibility had an alpha of .773, perceived self-efficacy was .680, subjective norms was .719, reliability analysis for perceived risk was .629. Mobile banking adoption, the dependent variable, had an alpha of .740

Table 4.11 Reliability analysis for all variables Code Variable No. of Cronbach items PU PE PCO PS SN PC PR DV Perceived usefulness Perceived ease of use Perceived compatibility Perceived self-efficacy Subjective norms Perceived credibility Perceived risk Dependent variable 7 7 6 5 6 7 5 7 Alpha .758 .589 .773 .680 .719 .698 .629 .740

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4.5

Normality test

4.6 Correlation analysis

In this research, Pearson correlation analysis was used to identify the relationships between the variables. Correlation is a statistical technique that used to determine

80

whether and how strongly pairs of variables are related. Correlation coefficient ranges from -1.00 to + 1.00. A positive correlation result show how a positive relationship between the variables and a negative correlation result shows a negative relationship between the variables.

Table 4.12 Correlation matrix

Mean of perceived usefulnes s MPU Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Pearson Correlation Sig. 2-tailed N Mean of perceived ease of use Mean of perceived compatibilit y Mean of perceived selfefficacy subjective norms Perceived credibility Perceived risk Dependen t variable

1 190 .546** .000 190 .589** .000 190 .574** .000 190 .516** .000 190 .468** .000 190 .247** .000 190 .468** .000 190 1 190 .567** .000 190 .501** .000 190 .361** .000 190 .386** .000 190 .168** .000 190 .442** .000 190 1 190 .628** .000 190 .548** .000 190 .492** .000 190 .380 .000 190 .489 .000 190 1 190 .542** .000 190 .538** .000 190 .422** .000 190 .458** .000 190 1 190 .567** .000 190 .473** .000 190 .460 .000 190 1 190 .488** .000 190 .417** .000 190 1 190 .374** .000 190 1 190

MPE

MPC O

MPS

MSN

MPC

MPR

MDV

** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Table 4.12 shows the results of pearson correlation matrix between variables. Based on the result, it demonstrates that all the independent variables are significant if p-value is

81

smaller than 0.01. Therefore, we can conclude that all the independent variables show a significant and positive correlation towards the dependent variable.

4.6 Regression Ananlysis Table 4.13: Regression Analysis on R & R Square

R 0.604a R Square 0.365 Adjusted R square Std. error of the estimate DurbinWatson

0.341

0.45493

1.918

Table 4.13 not only illustrates a statistical test of the model, but also the value of R, the corresponding R square, and the adjusted R square. The column that is labeled as R shows the value of the multiple correlation coefficients. Its generally a simple correlation between the dependent variable and the independent variables. The adjusted R square provides an idea of how well the model generalizes and its value is considered relatively close to the value of R square. The last column of the above table demonstrates the Durbin-Watson, this statistic helps to identify whether the assumption of the independent errors is acceptable or rational. The closer the value to 2, the better, and for this data the value 1.918, which is relatively to close that the assumption has almost been met.

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Regression Coefficients
Unstandardized coefficients B Std. Error Collinearity statistics Tolerance VIF

Model

Beta

Sig.

Constant MPU MPE MPCO MPS MSN MPC MPR

0.873 0.290 0.142 0.083 0.206 0.087 0.107 0.082 0.044 0.074 0.128 0.081 0.045 0.080 0.144 0.065 0.143 0.182 0.115 0.051 0.129 0.045 0.160

3.015 1.722 2.357 1.297 0.595 1.573 0.563 2.205

0.003 0.087 0.019 0.196 0.553 0.118 0.574 0.029 0.504 0.587 0.446 0.469 0.518 0.544 0.664 1.984 1.705 2.241 2.131 1.929 1.838 1.506

The first part of table 4.14 shows us estimates for the b values and that these values specify the individual contribution of each variable to the model. The b values clarify to us the relationship between the dependent variable (DV) and each independent variable. If the value is positive, then there is a positive relationship between the independent variables and the outcome while a negative coefficient indicates a negative relationship. The above data clearly states that all the variables have positive b values which indicate a positive relationship between each variable and the dependent variable. The standardized beta values on the other hand are all measured in standard deviation units and so are directly comparable. The higher the standardized beta value, the more impact it has on the model. For instance, MPE with a beta value of 0.182 has more impact on the model as compared to MPU that contributed to a beta value of 0.143. The second last column shows the tolerance values, which is the measure of the correlation between the variables and can diverge between 0 & 1. The closer the tolerances value for a variable to 0, the stronger the relationship between this variable and the other independent variables. In addition, tolerance value should be less than 1.0, if not the result

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will indicate multicollinearity problem occurrence. VIF on the other hand, which is found at the end of the table, is an alternative measure of collinearity in which a large value shows a strong relationship between the variables

Summary of hypotheses
Hypotheses
H1 H2 Perceived ease of use will influence my decision to adopt mobile banking. H3 H4 H5 H6 H7 Perceived compatibility will play a significant role in determining my intention to use mobile banking I dont need to be thought how to use mobile banking Subjective norms will influence my decision to use mobile banking Security and privacy of the system plays a major role in determining my intention to adopt mobile banking I believe perceived risk will have a significant effect on my decision to adopt mobile baking The usefulness of mobile banking will influence my intention to use it.

Decision Supported Not Supported Supported Supported Supported Supported Not Supported

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CHAPTER 5 DISCUSSIONS AND CONCLUSION

5.1 Introduction The objective of this chapter is to an un-abridged discussion on the hypothesis results from the previous chapter. Contribution of this study to research and study is also discussed. Additionally, the limitations of this research to the results are also included in this chapter. Suggestions for future research are also covered in this chapter. Finally, the ending this chapter with the conclusion as the summary of the entire research.

5.2 Discussion on Hypotheses H1: Perceived usefulness will have a positive effect on the behavioral intention to use mobile banking. Perceived usefulness was found to positively affect user acceptance of mobile banking. This was in consistence with previous research findings, which found the hypothesis to be supported (Luarn and Lin, 2005; Rao and Troshani, 2007). According to Davis (1989), perceived usefulness is the degree to which a person believes that using a particular system would enhance his or her job performance. The results were parallel with previous researches that found it to have significant effect on information system and usage. These studies prove the significant effect of perceived usefulness in individual reactions to information technology. Hence, it is quite expected that the reason why people use mobile banking is because they find it useful. Amin et al. (2008) stated that perceived usefulness is strongly correlated with productivity. It suggests that using computer in the workplace would improve job performance, increase users productivity, enhance job effectiveness and be valuable in the job.

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H2: Perceived ease of use will have a positive effect on the behavioral intention to use mobile banking. Hypotheses 2 was not supported. From the results it was apparent that perceived ease of use positively influences use of mobile banking among users in Malaysia. Perceived ease of use refers to the degree to which a person believes that using a particular system would be effortless (Davis, 1989). Respondents perceived the system to be easy to use and did not require loads of knowledge. Luarn and Lin (2005) also stated that there is a positive causality between perceived ease of use and the usage intention. ). In the mobile setting, perceived ease of use corresponds to the degree to which individuals relate freedom of difficulty with the use of mobile technology and services in daily usage (Knutsen, Constantiou and Damsgaard. 2005).

H3: Compatibility will have a positive effect on the perceived ease of use of mobile banking. Perceived compatibility was supported based on the correlation analysis. This meant that H3 was supported. According to Rogers (1995) perceived compatibility is defined as the degree to which an innovation is perceived as being consistent with the existing values, past experiences and the needs of potential adopters. Yu (2009) viewed compatibility as a sign of how well the service or technology fits with the way the customers manage and control their finances and how it ensembles their lifestyle. Individuals are more likely to adopt an innovation when they find it compatible with their past experience, beliefs and the way they are accustomed to work (Agarwal and Prasad, 1998; Tornatzky and Klein, 1982). Rogers (1995) also added that compatibility is demonstrated to capture the reliability between innovation and experience, values, in addition to the needs of potential adopters.

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H4: Self efficacy will have a positive effect on the perceived ease of use of mobile banking. Perceived self-efficacy or H5 was supported which was only a positive prove to the previous researches that found it to positively influence mobile banking adoption. Self-efficacy of mobile banking is defined as a judgment of ones ability to use a mobile banking service (Luarn and Lin, 2004). Self-efficacy could include knowledge, skill and abilities needed to use the new IT.

H5: Subjective norm will positively influence intention to use Mobile baking. Subjective norm or H5 was supported based on the correlation analysis. Prior studies have discovered the importance of such construct in social science studies including in banking studies (Amin et al., 2007; Nysveen et al., 2005; Kleijnen et al., 2004). Amin et al., (2007) found that subjective norm was a key interpreter for mobile banking use from a Malaysian point of view. The results were in line with previous research that found it to have a significant effect on adoption of mobile banking. Research also clarifies that the pressure from referent groups to adopt an innovation is effective because it adds to reducing risk associated with adoption (Ishii, 2004; Lu et al., 2003; Teo and Pok, 2003). Hartwick and Barki (1994) mentioned that the comparative influence of subjective norm on intentions is anticipated to be stronger for potential users with no pervious practice since they are more likely to rely on the reactions of others in shaping their intention.

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H6: Perceived credibility will have a positive effect on the behavioral intention to use mobile banking. Perceived credibility was supported in this study. It mainly has two elements: privacy and security. In this study, it was found that this variable has a positive effect on the intention to use the system. By definition, perceived credibility is one's judgment on the privacy and security issues of the mobile banking. As stated by Wang, et al. (2003) security and privacy are the two important dimensions in perceived credibility. The significance of security and privacy to the acceptance of banking technologies has been illustrated in many banking studies (Howcroft, et al., 2002; Polatoglu and Ekin, 2001; and Sathye, 1999). As mobile banking is considered relatively new, perceived credibility has a higher ability to predict and analyze the uses intention to use mobile banking.

H7: Perceived risk will have a negative effect on behavioral intention to use mobile banking. Relating to prior studies and group discussions, it is obvious that users intention to use new technology is affected by whether or not such risk does really exist. Perceived risk will directly influence users intention to use mobile banking. Wong and Chang (2005) considered that risk generally arises from the uncertainty that users face when they cannot anticipate the consequences of their purchase decision. Perceived risk or H7 was not supported based on the correlation analysis.

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5.3 Contributions to research Results from this research provide more evidence that certain factors still influence adoption to mobile banking regardless of the change in times. Findings were also found to support the TAM (Technology Acceptance Model) by Davis (1989) which provides futher evidence of the appropriateness of the model. The findings of this study also help future researchers. The findings will help researchers identify gaps that need to be filled in order to conduct further research in this area. Researchers can also benefit from the results of this study as they can use it as a reference for their work. It will also assist them in choosing which variables to test and which not to test in their research. The findings of this of this study also helps to better understand the factors that influence adoption of mobile banking in Malaysia, an area that has not been covered widely.

5.4 Contributions to Practice This studys result can also be implemented to help banks better understand what really influences adults in Malaysia to adopt mobile banking. By referring to these findings, they can be able to formulate effective techniques to attract this group into adopting to the system. The campaigns can be used to educate more on the relative advantage of using the system as well as how to handle and protect themselves from security and privacy issues. Campaigns can also be used to enhance confidence among those with low self-efficacy via manifestations at bank branches using a one-on-one consultancy system. For instance, these campaigns can be located in universities (since most young adults are in universities).

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The government as well as other organizations should motivate their staff and customers to use the system. Organizations can also influence use of the system by encouraging their customers to make their payments or check their financial status by using mobile banking system. They can also influence the use of this system by offering free training for those interested.

5.5 Limitation of study 1. Most of the data was obtained from the internet, journal publications and library. There was some lack of information due to unavailable funds to subscribe the articles. 2. Additionally, the study sample was from Multimedia university students who were selected according to convenience. Additionally the respondents were only from one certain location and therefore cannot be used to represent the entire population of Malaysia 3. In terms of the questionnaires, some were not properly filled, which led to distorted data. Originally the total amount of questionnaires distributed were 230, but due to respondents not willing to fill up the questionnaires or might have filled in some parts incorrectly, led to distorting 40 questionnaires.

5.6 Suggestions for future research Future research should be conducted withholding the limitations of this study in mind. Suggestions like conducting research in other universities could be useful, like Hanudin (2007) have suggested. Results can be compared, and general and more accurate conclusions can be drawn.

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Research should also be conducted on non-mobile banking users to better know if they intend to adopt the system in the near future or not. If not, researches could be conducted to clarify that and find solutions. Future research shouldnt just be limited to universities only as there are young adults who are not in universities but are rather working. If resources are available, this perspective should be looked at.

5.7 Conclusion The findings show that intention to use mobile banking can be predicted by perceived usefulness, ease of use, compatibility, self-efficacy, subjective norm, credibility and perceived risk. This result signified that the first research question was answered (What are the key factors that influence the intention to use mobile banking services in Malaysia?). Perceived risk yielded a mean of 3.8947, which was higher than all the other variables (perceived usefulness, 3.7316; perceived ease of use, 3.6421; perceived compatibility, 3.6895; perceived self-efficacy, 3.4211; subjective norms, 3.6000; perceived credibility, 3.8684). In conclusion, banks could also include extra features on their mobile applications to make the experience more memorable, fun and secure so that customers will gain the confidence that will influence them to use this system. Transaction costs should also be at a very minimal amount.

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APPENDICES

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Dear respondent, This questionnaire is done as part requisite to complete my final year project as part of my Bachelors degree (Hons) on Banking and finance to get an overview on factors influencing the intension to use Mobile banking services. The study is essential for the legitimate compilation of information regarding the scope of study. The questionnaire firstly obtains your information in order to understand the respondents overall response to the questions that is the demographics of the respondents. It will then on the second part encompass the core questions of the research. These are questions on the factors influencing the intensions to use Mobile banking services. The respondent is assured of the utmost confidentiality on all pieces of information provided.

Thank you. Yours faithfully, NEBIL ABDUREZAK AHMED Bachelor of Business Administration (HONS) Banking and Finance Faculty of Business and Law Multimedia University Malacca Campus

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For further clarification or questions please contact: Nebil abdurezak: E-mail: e_cool14@yahoo.com or Phone: 010-2502570 OR Dr. Uchenna: E-mail: uchenna.eze@mmu.edu.my

PART I Please tick the appropriate answer that is applicable to you Personal information 1. Gender

2. Age group

3. Nationality Please specify) ___________ 4. Race

5. Marital Status

6. Faculty

7. Monthly income range -- RM500 --RM1,000 RM1,5000 RM2,000 RM2,500

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Understanding of Mobile Banking

Are you familiar with Mobile Banking services?
Have you used Mobile-banking services before?

Yes No Not that much

Yes Never Once before A few times Intending to use in future

How many years have you used mobile devices (such as cell phones and PDAs) do you have?

<1 year 1- less than 3 years 3 less than 5 years 5 or more years

Are you satisfied with your banking institutions mobile application?

Yes No

How likely are you to use Mobile banking?

Very unlikely Somewhat unlikely Not Sure Somewhat Likely Very likely

Part II

Please answer the following questions by circling the one you feel most suitable with.
Perceived Usefulness
Strongly Disagree Disagree Neutral Agree Strongly Agree

Mobile banking would be useful in conducting my banking transactions Using mobile banking enables me to conduct banking transactions more quickly If I were to adopt mobile banking, it would be a more effective way to make transactions Mobile banking would give me greater control Mobile banking would improve the quality of my decision making Using m-banking will allow me to enjoy a variety of services

1 1 1 1

2 2 2 2

3 3 3 3

4 4 4 4

5 5 5 5

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regardless of my recent location I am able to find mobile connectivity in the remotest places, including areas where Internet applications is weak
Perceived Ease of Use 1 1 1 1 1 1 2 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 5 1 2 3 4 5

I find banking transactions on mobile phones easy and simple I find mobile banking clear and understandable proficient It would be easy to do what I want while using mobile banking I find mobile banking through cell phone very user friendly I find mobile banking less time consuming Using mobile banking can be frustrating (R) I find certain services on mobile phones very friendly, especially when browsing internet-like interfaces on mobile device

Perceived Compatibility

I find mobile banking compatible with my beliefs and the way they are accustomed to work I find mobile banking compatible with my past experience With mobile banking, I am able to combine services and technologies into my daily life I believe mobile banking have filled all the gaps caused by internet banking I find mobile banking the best way to manage and control my finances I believe mobile banking perfectly assembles my lifestyle
Perceived Self-efficacy

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

I am familiar with my mobile device I am familiar with checking my account balances through my mobile device I am familiar with paying bills through my mobile device I am of complete awareness and understanding of the benefits provided by mobile banking I am always willing to try new things

1 1 1 1 1

2 2 2 2 2

3 3 3 3 3

4 4 4 4 4

5 5 5 5 5

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Subjective Norms 1 1 2 2 3 3 4 4 5 5

People who influence my behavior suggest that I use mobile banking If I use mobile banking, most of the people who are important to me will regard is as useful If I use mobile banking, most of the people who are important to me will regard is as valuable The reason why I chose to use mobile banking is because of the environment I live in I find it very critical that my surrounding have a positive perception about using mobile banking The media is considered the strongest influence adopters may take into account when choosing mobile banking

Perceived Credibility

I believe that trust affects the demand for m-banking services. I am comfortable with typing my credit/debit card detail in my mobile for a payment I believe that my transactions with Mobile Banking providers are likely to be safe I trust mobile banking providers because they keep my best interest in mind I find banking via mobile devices a way to reduce the risk of fraud I think that mobile banking providers do not sincerely consider security and privacy concerns Considering security and privacy protection will make it less difficult to use mobile banking
Perceived Risk

1 1

2 2

3 3

4 4

5 5

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

I find using mobile banking in my transactions not risky I do not experience any uncertainties or trust issues when making purchasing decisions. I find it very risky to type in my personal details when using mobile banking I believe mobile banking is not secure enough to keep passwords or codes safely I believe mobile banking is more secure than internet banking

1 1

2 2

3 3

4 4

5 5

1 1

2 2

3 3

4 4

5 5

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Dependent Variables

The usefulness of mobile banking will influence my intention to use it. Perceived ease of use will influence my decision to adopt mobile banking. Perceived compatibility will play a significant role in determining my intention to use mobile banking I dont need to be thought how to use mobile banking Subjective norms will influence my decision to use mobile banking Security and privacy of the system plays a major role in determining my intention to adopt mobile banking I believe perceived risk will have a significant effect on my decision to adopt mobile baking

1 1 1 1

2 2 2 2

3 3 3 3

4 4 4 4

5 5 5 5

Please rank the following in order of most influential when choosing the type of banking system to use. With 1 being the most important and 8 being the least important.
Perceived Usefulness Perceived Ease of use Perceived Compatibility Perceived Self-efficacy Subjective Norms Perceived Credibility Perceived Risk

Thank you for your time and dedication to respond to my questionnaire.

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