CHAPTER 1

Introduction

Today, financial sector firms are competing for profit share in the market.
Among these firms, banks have radically shifted from traditional banking to
branchless mode of banking. Adoption of latest technology has enabled banks to
extend their customer base, where electronic banking has proved to be the chief
advancement (Cruz, Laukkanen, & Munoz-Gallego, 2009). Mobile banking can be
categorized as the latest advancement in electronic banking, which has widened
customers‟ access to banks accounts through wireless channels. Mobile banking is
considered as the provision of banking services to the customers on their mobile
phones and other mobile devices. This is because mobile phones and other handheld
devices have been established firmly as an alternative form of payment in the
technological advanced societies.
The rapid growing of mobile phones and other electronic gadgets has not only
transformed the way people live, but also created a new channel for banking known as
mobile banking. According to (Ewe & Yap, 2012) , the mobile banking phenomenon,
has significantly impacted the bank’s operational efficiency, value delivery and also
customer services. Modern management science philosophy considers customer
satisfaction as a baseline standard of performance and a possible standard of
excellence for any business organization. Especially, banks due to similar services
compete together in order to achieve customer satisfaction. They try to create eases
for their customers.
A new approach in the field of banking services is the supply of financial and
banking services with mobile phones. Mobile banking is as a wireless communication
channel for creating value by customers in banking transactions (Taghavi-Fard &
Torabi, 2010). Mobile- banking is a new concept that emerged in the global economy
in the recent years and has created new streaming in the fields of commerce and trade.
Mobile banking can be defined as “delivery of bank’s services to a customer at
his office or home by using electronic technology and this has resulted in
conceptualization of virtual banking”. In traditional banking, the customer has to visit
the branch of the bank in person to perform the basic banking operations viz., account
enquiry, fund transfer and cash withdrawal. On the other hand, mobile banking

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enables the customers to perform the basic banking transactions by sitting at their
office or at homes through PC or LAPTOP (Dhandayuthapani, 2012).

In an economy that reveals stark contrasts, the technology penetration status is

not surprising. Myanmar is a cash-based economy with over 90% of the population
currently lacking access to formal financial services. Salaries are mostly paid in cash,
and amongst bank account holders only about 5% have access to an ATM card. In
this scenario, mobile banking presents the perfect format to simply avoid a traditional
banking and financial set-up and provide digital financial services via smartphone
technology.

Myanmar Central Bank has issued a series of regulations for mobile financial
services, with the aim of creating an efficient and secure mobile financial service set-
up in the country. Regulations allow non-bank institutions to provide mobile banking
services. Customers can cash money in and out using mobile wallets, make domestic
payments (for example, pay utilities bills, airtime top-ups etc.), and also make money
transfers in Myanmar Kyat. International remittance transactions are not allowed as
per the current rules.
“mBanking” means the use of a smart phone or other device to perform Online
Banking tasks such as users can manage their accounts, credit cards, transfer money,
pay bills at ease with a few simplest steps. Other services provided by private banks in
Myanmar are mobile E-top up, Easi travel card top up, and making purchase.
Digital finance is perhaps the most effective method for achieving financial
inclusion – mobile technology can allow financial service providers to penetrate deep
within the population, especially the rural areas and low-income segments, and
provide access to much-needed viable financial credit. Using mobile banking they
would have better access, lower costs, greater convenience and more secure services
than traditional banking channels.
For a high growth economy such as Myanmar financial inclusion to the root
level is essential. Farmers, traders, businesses - big and small, all need access to
finance and credit. In addition, they also need to utilize technology to maximize
efficiency and profitability (Hofmann, 2018).

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1.1 Rationale of the Study
Myanmar Post and Telecommunication had a monopoly in the country
previously regarding mobile telecommunication market. The government began
finding a way to open up the mobile telecommunication, issuing licenses to new
service providers. Because of the development of information technology; there has
rapid change in all sector including the private commercial banking sector (Lwin,
Ameen, & Nusari, 2019).
Ongoing changes in the political conditions in Myanmar support the
improvement of the nation's economy in numerous segments. To be a modernized
nation, the Government has expanded four mobile telecommunication providers. The
extreme competition among them supports the quick growth of mobile phone users.
Nowadays, mobile telephone communication network overcomes urban, rural, sub-
rural and countryside. Advanced mobile phone applications have been developed and
used in different areas (Aung, 2016). Consequently, mobile services have an effect on
consumers by letting ubiquitous and universal access to information and services, as
well as a possibility for a unique and personalized exchange of information. Bank
sectors also improve their services through the use of mobile banking. Since mobile
banking was introduced, without going to the traditional bank branch for bank
personal transaction, the consumers can use banking services to obtain special
services 24 hours a day. There are pointedly increments in a number of mobile phones
users; be that as it may, it is a still minority of individuals utilizing mobile banking.
Individuals won't consider introducing cell phone programming account if their bank
doesn't offer this. Notwithstanding for the bank existing clients, a large number of
record holders don't mindful on the utilization of mobile banking services in spite of
the fact that it can get uncommon administrations 24 hours every day.
The issues of depositing and withdrawing money in banks are among the
major problems that customers of certain banks have been made to experience. The
long queues and huge crowds in the banking halls can be highly devastating and
discouraging most of the times, especially when salaries have been released. In most
cases, these long queues occur despite the fact that banks have adopted mobile
banking to enable customers withdraw and deposit money without necessarily
attending the banking premises (Masamila, 2012). One of the benefits banks derive
from the current mobile banking services in banking operations especially with

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respect to service delivery is improved efficiency and effectiveness of their operations
so that more transactions can be processed faster and most conveniently by customers.
Customers on the other hand, stand to enjoy the benefit of quick service
delivery, reduced frequency of going to banks physically and reduced time spent in
long queues. However, these developments of mobile banking services in the banking
industry seem not to have achieved their aims. Queues are still seen in the banking
halls, bank customers still handle bulky cash, and hardly do people talk about mobile
banking services that are available in most of the banks. This raises a research
question on the effectiveness of these mobile banking services on customer’s
satisfaction. Therefore, the main focus of the study is to examine the mobile banking
services and to analyze the satisfaction and loyalty of the customers regarding the
mobile banking services of the private banks in Mandalay.

1.2 Objectives of the Study

The objective of the study is to analyze the customer satisfaction and loyalty
on mobile banking services of retailers in Mandalay.
The specific objectives of the study are -
(1) To analyze the relationship between mobile banking services and customer
satisfaction.
(2) To analyze the relationship between customer satisfaction of mobile
banking services and customer loyalty.

1.3 Method of the Study

In this research study, descriptive research design and quantitative research
method will be used. A structured questionnaire will be used to collect primary data.
The secondary data will be collected from the published materials such as books,
journals, articles and computerized databases for literature review. In selecting
respondents, the simple random sampling method was followed and primary data
were collected from the retailers using mobile banking services. In this study, the
cross tabulations has been done to find out the effects of demographic characteristics
on the selected factors and multiple regressions analysis has been conducted to test
the strength of associations between the variables.

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1.4 Scope and Limitation of the study
The study focuses on retailers in Mandalay using mobile banking services.
There are 515 members of retailers association in Mandalay. All of them will be
selected to analyze their satisfaction and loyalty on mobile banking services.

1.5 Organization of the Study

The study has been organized in five chapters. Chapter one includes the
introduction of the study with rationale of the study, objectives of the study, scope and
limitation of the study, method of the study and organization of the study. Chapter
two reveals literature review of customer satisfaction and loyalty. Moreover, this
presents mobile banking or M-banking entails the financial services delivered via
mobile networks using mobile phones. Chapter three explains the profile of the
organization. Chapter four presents analysis of the customer satisfaction and loyalty
of mobile banking services. Chapter five is the summary, conclusion,
recommendation and limitations of the study and areas for further research.

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 Conceptual Framework of the Study
Based on the framework, this study examines the customer satisfaction and
loyalty on mobile banking services. Customer satisfaction is a term most widely used
in the commerce and industry. In a competitive market place where businesses
compete for customers, customer satisfaction is seen as a key differentiator and
increasingly has become a key element of business strategy. Companies that have a
more satisfied customer base also experience higher economic returns (Bolton, 2002).
Consequently, higher customer satisfaction leads to greater customer loyalty which in
turn leads to higher future revenue (Fornell, 1992).
The figure presents the relationship between mobile banking services that are
accessibility, convenience, security, privacy, content, design, speed, fees and charges
and customer satisfaction and loyalty.

Figure 1.1: The Conceptual Framework of the Study

Accessibility

Convenience

Security

Privacy
Customer Customer
Content satisfaction loyalty

Design

Speed

Fees and charges

Source: Own Compilation

REFERENCES

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Aung, S. T. (2016). Mobile Money and Mobile Banking. GIZ Collection of Papers on
Myanmar's Financial Sector: A Joint Publication of GIZ-Myanmar and Thura
Swiss.

Bolton, S. C. (2002). Consumer as King in the NHS. International Journal of Public

Sector Management, 15(2), 129-139.

Cruz, P., Laukkanen, T., & Munoz-Gallego, P. (2009). Exploring the factors behind
the resistance to mobile banking in Portugal. International Journal of E-
services and Mobile Applications, 1(4), 16- 35.

Dhandayuthapani, S. (2012). E-Banking Practices and Customer Satisfaction.

Ewe, S. Y., & Yap, S. F. (2012). Exploring Motivations and Barriers for Mobile
Banking Adoption: A Qualitative Approach. World Journal of Social
Sciences, 2(4), 184-194.

Fornell, C. (1992). A National Customer Satisfaction Barometer: The Swedish

Experience. Journal of Marketing, 56, 6-22.

Hofmann, A. (2018). Myanmar's Banking Sector in Transition. Deutsche Gesellschaft

fur, Internationale Zusammenarbeit (GIZ) GmbH.

Kotler, P. (2013). Marketing Management. New York: Pearson Education.

Lwin, N., Ameen, A., & Nusari, M. (2019). Mobile Banking Adoption among
Customers within Private Commercial Banking Sector in Yangon, Myanmar.
International Journal of Management and Human Science (IJMHS),, Vol 3(2),
Pages 44-59.

Masamila, B. (2012). State Of Mobile Banking In Tanzania And Security Issues.

International Journal of Network Security and Its Applications (IJNSA), 6 (4).

Taghavi-Fard, M. T., & Torabi, M. (2010). The Factors Affecting the Adoption of
Mobile Banking Services by Customers and Rank Them( Case study: Bank
Tejart In Tehran, Iran). Journal Excavations Business Management, 3, 136-
162.

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Tojib, D., & Tsarenko, Y. (2012). Post-Adoption Moldeling of Advanced Mobile
Service Use. Journal of Business Research, 65(7), pp-922-928.