CHAPTER I INTRODUCTION

INTRODUCTION

During the past decade, the online service industry has witnessed tremendous growth, much of it spurred by the Internet revolution (Keaveney and Parthasarathy, 2001). Especially, the potential of the Web as a commercial medium is widely recognized and the growth in online service industries such as online banking has increased rapidly. In addition to Internet companies, traditional organizations are investing a huge amount of money and effort in information systems to provide online services through the Web. The underlying assumption of their investment is that, because online services provide their customers with convenience, interactivity, relatively low cost, and a high degree of customization/personalization, they will enhance customer satisfaction and retention more effectively than offline-based services (Khalifa & Liu, 2001). Since the mid-1990s, there has been a fundamental shift in banking delivery channels toward using self-service channels such as online banking services. Although in recent years the number of online banking users has grown rapidly, there is some evidence supporting the opposite fact that online banking acceptance is faced with problems. Robinson (2000) for instance found that half of the people that have tried online banking services will not become active users.

Online Banking Internet has emerged as a key competitive arena for the future of financial services (Cronin, 1998) in that online banking offers customers more features with lower cost than traditional banking activities. Since the Security First Network Bank (SFNB) first started its Internet bank on the web site (www.SFNB.com), more than 1,500 financial institutions have made plans to offer certain forms of Internet banking in 3 years. Advanced technologies enable banks to utilize new banking products, such as a smart card and electronic money, through the Internet. Internet banking is easier, more convenient and offers more features with lower cost than home banking in the 80s. Customers responses to the Internet banking system have been so much different from the home banking due to its easy accessibility. Customers can access
2

their account from anywhere in the world and at any time. To secure loyal customers, many banks try to provide customers with unique online experiences that customers cannot access through the offline channels. Considering that enormous capital investment is needed for developing these online banking services, it is very critical for them to measure the service quality produced by online banking systems.

Online banking in this study is defined as an Internet portal, through which customers can use different kinds of banking services ranging from bill payment to making investments. Therefore banks Web sites that offer only information on their pages without possibility to do any transactions are not qualified as online banking services. The goal of this study is to increase our current understanding of the factors that influence online banking acceptance in the light of the technology acceptance model (TAM) (Davis et al., 1989; Mathieson, 1991; Davis and Venkatesh, 1996). More precisely, online banking acceptance will be studied from the information systems acceptance point of view referring to the idea that consumers are using banks information system (online banking service) directly and hence more knowledge on the factors that affect information systems adoption is needed in order to better understand and facilitate the acceptance.

This article is divided into four parts: the first part contains a literature review on online banking and information systems acceptance. The second part presents the research methodology used in this work. The third part comprises of the results and analysis. In this part the data is analysed using regression and correlation analyses. The final part consists of the conclusions and practical implications of the research. .

CHAPTER II REVIEW OF LITERATURE

REVIEW OF LITERATURE

Online banking acceptance has gained special attention in academic studies during the past five years as, for instance, banking journals have devoted special issues on the topic (e.g. Karjaluotoet al., 2002; Waite and Harrison, 2002; Bradleyand Stewart, 2003; Gerrard and Cunningham,2003; Mukherjee and Nath, 2003). We can find two fundamental reasons underlying online banking development and diffusion. First, banks get notable cost savings by offering online banking services. It has been proved that online banking channel is the cheapest delivery channel for banking products once established (Sathye, 1999; Robinson, 2000; Giglio, 2002). Second, banks have reduced their branch networks and downsized the number of service staff, which have paved the way to self-service channels as quite many customers felt that branch banking took too much time and effort (Karjaluoto et al., 2003). Therefore, time and cost savings and freedom from place have been found the main reasons online banking acceptance (Polatoglu and Ekin, 2001; Black et al., 2002; Howcroft et al. 2002).Several studies indicate that online bankers are the most profitable and wealthiest segment to banks (Mols, 1998; Robinson, 2000; Sheshunoff, 2000). On this basis, no bank today can underestimate the power of the online channel. Luxman (1999) for instance estimates that in the near future the online channel reinforces its importance especially in the countryside, where banks have closed many branches. However, there is no supporting evidence on this regional issue. Without the possibility of managing banking affairs directly from home or office, customers easily perceive troubles in managing their financial affairs such as paying bills. As noted, online banking offers many benefits to banks as well as to customers. However, in global terms the majority of private bankers are still not using online banking channel. There exist multiple reasons for this. To start with, customers need to have an access to the Internet in order to utilize the service. Furthermore, new online users need first to learn how to use the service (Mols et al., 1999). Second, nonusers often complain that online banking has no social dimension, i.e. you are not served in the way you are in a face-to-face situation at branch (Mattila et al., 2003). Third, customers have been afraid of security issues (Sathye, 1999; Hamlet and Strube, 2000; Howcroft et al., 2002).
5

However, this situation is changing as the online banking channel has proven to be safe to use and no misuse has been reported by the media. Traditional banks have been the vanguard of online banking channel development and control lions share of the total market. However, the online banking channel works without having an extensive branch network, at least in theory. In recent years we have witnessed the rise of pure online banks, but their impact on the whole banking sector has been remote. Pure online banks often use other channels as well, such as contact centers (both outbound and inbound), and some have even established physical presences by establishing branch services. Quite many pure online players have suffered from achieving sufficient customer base and thus have had to close their business down (Orr, 2001; Schneider, 2001). In this regard, Sievewright (2002) forecasts that in USA many pure online banks will close down their business in the next five years. Technology Acceptance Model 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 derived from a theory that addresses the issue of how users come to accept and use a technology. The model suggests that when users are presented with, for instance, a new software package, a number of variables influence their decisions about how and when they will use it. There are two specific variables, perceived usefulness and perceived ease of use, which are hypothesized to be fundamental determinants of user acceptance. (Davis and Arbor, 1989). TAM uses TRA as a theoretical basis for specifying the causal linkages between the two key features: perceived usefulness and perceived ease of use, and users attitudes, intentions and actual computer adoption behaviour. TAM is designed to apply to any type of technology. Perceived usefulness: Perceived usefulness is defined as the degree to which a person believes that using a particular technology will enhance his or her job performance. People tend to use or not to use an

application to the extent they believe it will help them perform their job better - (Davis et al.,1989). Phillips and colleagues defined perceived usefulness as the prospective adopters subjective probability that applying the new technology from foreign sources will be beneficial to his personal and/or the adopting companys well-being. (Phillips et al., 1994, p. 18). Perceived usefulness explains the user's perception to the extent that the technology will improve the user's workplace performance (Davis et al. 1989). This means the user has a perception of how useful the technology is in performing his job tasks. This includes decreasing the time for doing the job, more efficiency and accuracy. Perceived ease of use: This refers to the degree to which a person believes that using a particular technology will be free of effort. Users believe that a given application is useful, but they may, at the same time, believe that the technology is too hard to use and that the performance benefits of usage are outweighed by the effort of using the application (Davis and Arbor, 1989). Phillips and his colleagues defined perceived ease of use as the degree to which the prospective adopter expects the new technology adopted from a foreign company to be free of effort regarding its transfer and utilization. (Phillips et al., 1994, p. 18,). Perceived ease of use explains the user's perception of the amount of effort required to utilize the system or the extent to which a user believes that using a particular technology will be effortless. (Davis et al., 1989).

The theoretical importance of perceived usefulness and perceived ease of use as determinants of user behaviour is indicated by several diverse lines of research. The impact of perceived usefulness on technology utilization was suggested by the work of Schultz and Slevin (1975) and Robey (1979), cited by (Davis and Arbor, 1989). Davis (1989) conducted numerous experiments to validate TAM by using perceived ease of use (PEOU) and perceived usefulness (PU) as two independent variables and system usage as the dependent variable. He found that PU was significantly correlated with both self-reported current usage and self-predicted future usage. PEOU was also significantly correlated with current usage and future usage. Overall, he found the PU had a significantly greater correlation with system usage than did PEOU. Further
7

regression analysis suggested that PEOU might be an antecedent of PU rather than a direct determinant of system usage. That is, PEOU affects technology acceptance indirectly through PU. (Ma and Liu, 2004). The technology acceptance model proposes that perceived ease of use and perceived usefulness predict the acceptance of information technology (Ma and Liu, 2004). The technology acceptance model (TAM) is specifically tailored for modelling user acceptance of information technology. The goal of the model is to provide an explanation of the determinants of computer acceptance by tracing the impact of external factors on internal beliefs, attitudes and intentions (Davis et al. 1989) cited by (Phillips et al., 1994, p. 16). TAM is a valuable tool for predicting attitudes, satisfaction, and usage from beliefs and external variables cited by (Algahtani & King, 1999, p. 277). Organizations invest in information systems for many reasons, for example cutting costs, producing more without increasing costs, improving the quality of services or products (Lederer et al., 1998). It has been noted that users attitudes towards and acceptance of a new information system have a critical impact on successful information system adoption (Davis, 1989; Venkatesh and Davis, 1996; Succi and Walter, 1999). If users are not willing to accept the information system, it will not bring full benefits to the organisation (Davis, 1993; Davis and Venkatesh, 1996). The more accepting of a new information system the users are, the more willing they are to make changes in their practices and use their time and effort to actually start using the new information system (Succi and Walter, 1999). A system that satisfies users needs reinforces satisfaction with the system and is a perceptual or subjective measure of system success. Similarly, usage of a system can be an indicator of information system success and computer acceptance in some cases. Success is not necessarily dependent of the technical quality of the system (Ives et al., 1983). Using the system is connected with the effectiveness of the system systems that users regard as useless cannot be effective. Therefore it is important to find out the reasons why people decide to use or not to use information system (IS). This knowledge will help both systems designers and developers in their work (Mathieson, 1991). One of the most utilized model in studying information system acceptance is the technology acceptance model (TAM) (Davis et

al., 1989; Mathieson, 1991; Davis and Venkatesh, 1996; Gefen and Straub, 2000; Al-Gahtani, 2001) in which system use (actual behaviour) is determined by perceived usefulness (PU) and perceived ease of use (PEOU) relating to the attitude toward use that relates to intention and finally to behaviour. According to DeLone and McLean (1992) system use as the dependent variable is acceptable, if system usage is not compulsory. Although the TAM has been tested widely with different samples in different situations and proved to be valid and reliable model explaining information system acceptance and use (Mathieson, 1991; Davis and Venkatesh, 1996,), many extensions to the original TAM have been proposed (e.g. Venkatesh and Speier, 1999; Venkatesh and Davis, 2000; Venkatesh et al., 2002; Henderson and Divett, 2003; Lu et al., 2003). Venkatesh and Davis (2000) extended the original TAM by introducing the second generation of the model labelled TAM2 to explain how subjective norms and cognitive instrumental processes affect perceived usefulness and intentions. TAM is based on the theory of reasoned action (TRA) (Fishbein and Ajzen, 1975; Ajzen and Fishbein, 1980), which is concerned with the determinants of consciously intended behaviours (Ajzen and Fishbein, 1980; Davis et al., 1989). Although the TAM and the TRA share many issues they have some considerable differences. The first difference is that according to TRA beliefs are bound to context and hence they can not be generalised. Contrary to that, TAM states that PEOU and PU are issues that have an effect on acceptance of all information systems. The other significant difference is that in TRA all beliefs are summed together, but in the TAM both beliefs are seen as distinct constructs. Modelling each belief separately allows researchers to better trace influences of all of the affecting factors on information systems acceptance (Davis et al., 1989). TAM has been tested in many studies (see, for example, Davis, 1989; Davis et al., 1989; Mathieson, 1991; Adams et al., 1992; Davis, 1993; Segars and Grover, 1993; Taylor and Todd, 1995), and it has been found that TAMs ability to explain attitude toward using an information system is better than other models (TRA and TPB) (Mathieson, 1991). These studies have found that TAM consistently explains a significant amount of the variance (typically around 40 percent) in usage intentions and behaviour. The use of an information system has been understood in many studies as the user acceptance of the information system in question (Davis
9

et al., 1989; Davis, 1993; Al-Gahtani, 2001). In other words the use of information system acts as an indicator for information systems acceptance. The research model Based on the literature review, a model indicating the acceptance of online banking was developed. The model consists of six factors that are assumed to have an effect on acceptance of online banking. TAM posits that Perceived Usefulness(PU) is a significant factor affecting acceptance of an information system (Davis et al., 1989). Davis defined PU as the degree to which a person believes that using a particular system would enhance his or her job performance (Davis, 1989). According to TAM Perceived Ease of Use (PEOU) is a major factor that effects acceptance of information system (Davis et al., 1989). PEOU is defined as the degree to which a person believes that using a particular system would be free of effort (Davis, 1989). Hence an application perceived to be easier to use than another is more likely to be accepted by users. Enjoyment refers to the extent to which the activity of using a computer is perceived to be enjoyable in its own right (Davis et al., 1992). PU can be seen as an extrinsic motivation whereas Perceived Enjoyment (PE) as an intrinsic motivation to use information systems. The amount of information consumers have about online banking has been identified as a major factor impacting the adoption. According to Sathye (1999) while the use of online banking services is fairly new experience to many people, low awareness of online banking is a major factor in causing people not to adopt online banking. The importance of security and privacy to the acceptance of online banking has been noted in many banking studies (Roboff and Charles, 1998; Sathye, 1999; Hamlet and Strube, 2000; Tan and Teo, 2000; Polatoglu and Ekin, 2001; Black et al., 2002; Giglio, 2002; Howcroft et al., 2002). Roboff andCharles (1998) found that people have a weak understanding of online banking security risks although they are aware of the risks. Furthermore, they found that consumers often rely that their bank is more concerned about privacy issues and protect them. Finally they argue that although consumers confidence in their bank was strong, their
10

confidence in technology was weak (see also Howcroft et al., 2002). As the amount of products and services offered via the Internet grows rapidly, consumers are more and more concerned about security and privacy issues. The importance of a decent Internet connection and its quality was raised focus group interview. Also Sathye (1999) used Internet access as one of the factors affecting the adoption of online banking in her research. Without a proper Internet connection the use of online banking is not possible.

Perceived usefulness

Perceived ease of use Online banking Use

Perceived enjoyment

Information on Online banking

Security and Privacy

Quality of internet connection

11

CHAPTER III RESEARCH METHODOLOGY

12

RESEARCH METHODOLOGY
Definition of variables

INDEPENDENT VARIABLES Perceived usefulness: It is defined as the degree to which a person believes that using a particular system would enhance his or her job performance. According to Technology acceptance model(TAM) it is a significant factor affecting acceptance of an information system. Perceived Ease of Use: It is defined as the degree to which a person believes that using a particular system would be free of effort, which is another major factor that affects acceptance of information system. An application perceived to be easier to use than other is more likely to be accepted by users. Perceived Enjoyment: It refers to the extent to which the activity of using a computer to be enjoyable in its own right. It is an intrinsic motivation to use information systems. It correlates positively with time. Information about online banking: The information the consumers have about online banking has been identified as a major factor impacting the adoption. Low awareness of online banking is a major factor in causing people not to adopt online banking. Security and Privacy: privacy and security were found to be significant obstacles to the adoption of online banking. The reason is that people are having a weak understanding of online banking security risks although they are aware of these risks. Consumers confidence in their bank was strong, but their confidence in technology was weak. Quality of Internet connection: internet access is also one of the important factors affecting adoption on online banking.

13

General Objective To determine the effect and its extend, of factors affecting consumer acceptance of online banking. Specific Objectives To determine the effect of perceived usefulness on online banking use To determine the effect of perceived ease of use on online banking use To determine the effect of perceived enjoyment on online banking use To determine the effect of information on online banking on online banking use To determine the effect of security and privacy on online banking use To determine the effect of quality of internet connection on online banking use HYPOTHESES Based on the literature given earlier, the following hypotheses have been formulated on the anticipated relationship among the variables in the study. 1. H11: Perceived usefulness has a positive effect on consumer acceptance of online banking 2. H12: Perceived ease of use has a positive effect on consumer acceptance of online banking 3. H13: Perceived enjoyment has a positive effect on consumer acceptance of online banking 4. H14: The amount of information a consumer has about online banking has a positive effect on consumer acceptance of online banking 5. H15: Security and privacy has a positive effect on consumer acceptance of online banking 6. H16: The quality of internet connection has a positive effect on consumer acceptance of online banking. POPULATION The population for the study was the customers who are using online banking services. The population was vast, hence the sampling technique can be used instead of census due to time and cost constraints.

14

SOFTWARE USED:

The software statistical tool for social sciences (SPSS 17.0) has been used for the analysis of the data. Functions like Regression, Correlation analysis of the data were used. These functions have a specific value which helps in the interpretation of the results. These specific values are given below: In Regression function, the significant value or p value has been used as the parameter to analyze the influence of independent variable on the dependent variable. The values should be below 0.05. This value is used for the accepting or rejection of the null hypothesis. If the p-values are below 0.05, then the null hypothesis is to be rejected and the alternate hypothesis accepted. In Correlation function, the main focus is on the values of the correlation coefficient. If the values are more than 0.5, it is considered as highly correlated and if the values are lower than 0.5, it indicates low correlation between the variables. If the values are 0.00, then it is considered that there is no correlation between the variables.

Sample Size and sampling It was decided to administer the questionnaire to only those consumers who have been using online banking services. Sample size was decided was 210, and the sampling design used is Non Probabilistic Sampling design rather than the Probabilistic sampling design .

15

CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

16

DATA ANALYSIS

The researcher distributed 235 questionnaires to the customers who agreed to participate and 224 filled questionnaires were collected back from the customers of online banking. Detailed examination of the data resulted in deletion of 14 samples, which were found invalid. Thus, the final data set had 210 usable records from customers. The questionnaire consisted of questions that were related to the background, possible factors affecting acceptance of use of online banking services. Likerts five point scales ranging from strongly agree to strongly disagree were used as a basis of questions. The questionnaire was developed and tested with a focus group of banking professionals from the banking sector in previous TAM related research. The focus group finally verified that the hypotheses developed might be the affective factors explaining online banking acceptance. The use of online banking has been chosen as the dependent variable in the model.

Hypothesis Testing

In this section researcher tries to test different hypothesis which are formulated on the bases of the review of the literature. The testing of hypothesis is done by using different testing methods these are Correlation and Regression. In this section researcher also tries to make out a conceptual model on the bases of the results of the hypotheses which are under consideration and the review of literature. This section presents the output of the hypothesis testing. The result of the testing of each hypothesis is given under each hypothesis.

17

Testing hypothesis 1 H1: Perceived usefulness has a positive effect on consumer acceptance of online banking

For testing this hypothesis we are using regression as a method in which perceived usefulness is considered as an independent variable and online banking use is considered as a dependent variable. TABLE: - showing the regression results between perceived usefulness and online banking use

Inference:
Model 1 a. R .393
a

Model Summary Std. Error of the R Square .154 Adjusted R Square .150 Estimate 1.21258

Predictors: (Constant), PERCEIVED USEFULNESS

The value of coefficient of determinant is obtained as 0.15. This explains that we can explain the variation of the dependent variable with respect to the independent variable up to 15% using the regression equation. Since R=0.393 there exist a positive relationship between the two variables.

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Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) PERCEIVED USEFULNESS a. Dependent Variable: ONLINE BANKING USE B .339 .622 Std. Error .401 .101 .393 Coefficients Beta t .845 6.156 Sig. .399 .000

Inference:
The value of significance 0.000 states that, the change in the dependent variable due to the independent variable is significant and not merely by chance. The regression line that explains variation in the dependent variable customer satisfaction is Y= 0.339+0.622X Where, Y= Online banking use and X=Perceived usefulness

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Testing hypothesis 2 H12: Perceived ease of use has a positive effect on consumer acceptance of online banking

For testing this hypothesis we are using regression as a method in which perceived ease of use is considered as an independent variable and online banking use is considered as a dependent variable.

TABLE: - showing the regression results between perceived ease of use and online banking use

Model Summary Adjusted R Model 1 R .237

a

Std. Error of the Estimate

R Square .056

Square .052

1.28091

a. Predictors: (Constant), PERCEIVED EASE OF USE

Inference:
The value of coefficient of determinant is obtained as 0.052. This explains that we can explain the variation of the dependent variable with respect to the independent variable up to 5.2% using the regression equation. Since R=0.237 there exist a positive relationship between the two variables.

20

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) PERCEIVED EASE OF USE a. Dependent Variable: ONLINE BANKING USE B .869 .477 Std. Error .542 .136 .237 Coefficients Beta t 1.602 3.516 Sig. .111 .001

Inference:
The value of significance 0.001 states that, the change in the dependent variable due to the independent variable is significant and not merely by chance. The regression line that explains variation in the dependent variable online banking use is Y= 0.869+0.477X Where, Y= Online banking use and X=Perceived ease of use

21

Testing hypothesis 3 H3: Perceived enjoyment has a positive effect on consumer acceptance of online banking The testing of this hypothesis is done with the help of regression which also helps to find out the strength of the relationship between the variables. The results are shown in the table shown below TABLE: - showing the regression results between Online banking use and Perceived

enjoyment

Model Summary Adjusted R Model 1 R .432

a

Std. Error of the Estimate

R Square .186

Square .182

1.18924

a. Predictors: (Constant), PERCEIVED ENJOYMENT

Inference:
The value of coefficient of determinant is obtained as 0.182. This explains that we can explain the variation of the dependent variable with respect to the independent variable up to 18.2% using the regression equation. Since R=0.432 there exist a positive relationship between the two variables.

22

Coefficients Unstandardized Coefficients Model 1 (Constant) PERCEIVED ENJOYMENT a. Dependent Variable: ONLINE BANKING USE B .065 .732

Standardized Coefficients Beta t .165 .432 6.902 Sig. .869 .000

Std. Error .398 .106

Inference:
The value of significance 0.000 states that , the change in the dependent variable due to the independent variable is significant and not merely by chance. The regression line that explains variation in the dependent variable online banking use is Y= 0.065+0.732X Where, Y= Online banking use and X= Perceived Enjoyment

23

Testing hypothesis 4

H4: The amount of information a consumer has about online banking has a positive effect on consumer acceptance of online banking
Model Summary Adjusted R Model 1 R .145
a

Std. Error of the Estimate

R Square .021

Square .016

1.30454

a. Predictors: (Constant), AMOUNT OF INFORMATION

Inference:
The value of coefficient of determinant is obtained as 0.016. This explains that we can explain the variation of the dependent variable with respect to the independent variable up to 1.6% using the regression equation. Since R=0.145 there exist a positive relationship between the two variables.

24

Coefficients

Unstandardized Coefficients Model 1 (Constant) AMOUNT OF INFORMATION a. Dependent Variable: ONLINE BANKING USE B 1.959 .248 Std. Error .386 .118

Standardized Coefficients Beta t 5.078 .145 2.110 Sig. .000 .036

The value of significance 0.036 shows that the change in the dependent variable due to the independent variable is significant at 0.05 level The regression line that explains variation in the dependent variable customer satisfaction is Y= 1.959+0.248X Where, Y= Online banking Use and X=Amount of information

25

Testing hypothesis 5 H5: Security and privacy has a positive effect on consumer acceptance of online

banking

Model Summary Adjusted R Model 1 R .219

a

Std. Error of the Estimate

R Square .048

Square .043

1.28650

a. Predictors: (Constant), SECURITY AND PRIVACY

Inference:
The value of coefficient of determinant is obtained as 0.043. This explains that we can explain the variation of the dependent variable with respect to the independent variable up to 4.3% using the regression equation. Since R=0.219 there exist a positive relationship between the two variables.

26

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) SECURITY AND PRIVACY a. Dependent Variable: ONLINE BANKING USE B 1.321 .398 Std. Error .451 .123 .219 Coefficients Beta t 2.930 3.233 Sig. .004 .001

The value of significance 0.001 states that, the change in the dependent variable due to the independent variable is significant and not merely by chance. The regression line that explains variation in the dependent variable online banking source is Y= 1.312+0.398X Where, Y= Online Banking Use and X=Security and Privacy

27

Testing hypothesis 6

H6: The quality of internet connection has a positive effect on consumer acceptance of online banking This hypothesis is tested with the help of Regression test to find out the strength of the relationship also. The results are displayed in the table given below.

TABLE: - showing the regression results between quality of internet connection and online banking use

Model Summary Adjusted R Model 1 R .236

a

Std. Error of the Estimate

R Square .056

Square .051

1.28111

a. Predictors: (Constant), QUALITY OF INTERNET CONNECTION

Inference:
The value of coefficient of determinant is obtained as 0.051. This explains that we can explain the variation of the dependent variable with respect to the independent variable up to 5.1% using the regression equation. Since R=0.236 there exist a positive relationship between the two variables.

28

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) QUALITY OF INTERNET CONNECTION a. Dependent Variable: ONLINE BANKING USE B 1.514 .338 Std. Error .364 .096 .236 Coefficients Beta t 4.162 3.506 Sig. .000 .001

The value of significance 0.001 states that the change in the dependent variable due to the independent variable is significant and not merely by chance. The regression line that explains variation in the dependent variable online banking use is Y= 1.514+0.338X Where, Y= Online banking use and X=Quality of internet connection

29

TABLE showing the multiple regression results

Model Summary Std. Error of the Model R R Square Adjusted R Square Estimate

.535

.287

.266

1.12721

Predictors: (Constant), PERCEIVED USEFULNESS, PERCEIVED EASE OF USE, PERCEIVED ENJOYMENT, AMOUNT OF INFORMATION, QUALITY OF INTERNET CONNECTION, SECURITY AND PRIVACY

Inference:
The value of coefficient of determinant is obtained as 0.266. This explains that we can explain the variation of the dependent variable with respect to the independent variables up to 26.6% using the regression equation. Since R=0.535 there exist a high positive relationship between the dependent variables and the independent variables taken into consideration in this study.

30

ANOVA Sum of Model 6 Regression Residual Total Squares 103.622 257.931 361.553 df 6 203 209

Mean Square 17.270 1.271

F 13.592

Sig. .000
f

Predictors: (Constant), PERCEIVED USEFULNESS, PERCEIVED EASE OF USE, PERCEIVED ENJOYMENT, AMOUNT OF INFORMATION, QUALITY OF INTERNET CONNECTION, SECURITY AND PRIVACY

Inference:
The value of significance is obtained as 0.000. This explains that the model in this study is significant.
Coefficients a Standardized Unstandardized Coefficients Model (Constant) PERCEIVED USEFULNESS PERCEIVED EASE OF USE PERCEIVED ENJOYMENT AMOUNT OF INFORMATION QUALITY OF INTERNET CONNECTION SECURITY AND PRIVACY -.782 .248 -.429 -3.149 .002 .212 .096 .148 2.204 .029 -.324 .145 -.189 -2.235 .026 .582 .148 .343 3.923 .000 .195 .196 .097 B -.249 .814 Std. Error .530 .184 .514 4.399 .993 .322 Coefficients Beta t -.469 Sig. .640 .000

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Perceived usefulness (t=4.4, p<0.01) , perceived enjoyment (t= 3.923, p<0.01) and quality of internet connection (t=2.204, p<0.05) are statistically significant. Hence the hypotheses H11, H13 and H16 holds good.

Table shows the correlation between the online banking use and the various factors influencing it.

Correlations

Quality

Amount Perceived

Perceived ease of use .393

**

Security Perceived and enjoyment privacy .432

**

of internet of

connection information usefulness online bank use Pearson Correlation Sig. (2-tailed) N 210 210 210 .001 .036 .001 .236
**

Gender -.225
**

.145

.237

**

.219

**

.000

.000

.001

.001

210

210

210

210

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

The correlation results shows that there is a moderate correlation between the variables so inference can be made out that the online banking use is related to factors such as quality of internet connection, amount of information, perceived usefulness, perceived ease of use, perceived enjoyment, security and privacy. Gender which is a background variable is not positively correlated with online banking use.

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CHAPTER V FINDINGS AND CONCLUSION

33

Conclusion of the Research Outcomes This research is conducted with an aim to find out any relationship between the Online banking use and factors such as quality of internet connection, amount of information, perceived usefulness, perceived ease of use, perceived enjoyment, security and privacy and gender. The primary objective was to study the consumer acceptance of online banking in the light of technology acceptance model, added with new variables derived from online banking acceptance literature on one hand and from a focus group interview with bank managers on the other. The model developed proposed that online banking acceptance can be modelled with the variables derived from the TAM (PU and PEOU) and four other variables referring to perceived enjoyment (PE), information on online banking, security and privacy, and the quality of the Internet connection. In the results section the model was tested with 210 consumers and revised. The results of the regression analysis conducted on the five factors indicate that PU, PE and the quality of internet connection were found to be the most influential factors explaining the use of online banking services. This finding refers to the fact that consumers use online banking for the benefits it provides in comparison to other banking delivery channels. This finding is in line with other TAM studies (e.g. Davis, 1989; Davis et al., 1989), which found that PEOU has less impact on technology acceptance than PU. The second influential factor PE is similar to the concept of perceived playfulness which consists of three parts: concentration, curiosity and enjoyment (Moon and Kim, 2001). It was discovered that perceived playfulness had a significant impact on the intention to use information system, hence perceived enjoyment which is an intrinsic factor unlike other independent variables in the study, influence the use of online banking. Third influential factor namely quality of internet connection supports the fact that without proper internet connection the use of online banking is not possible.

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Contributions The study makes a contribution to electronic banking literature by providing insights on the factors that seem to affect online banking acceptance. The results hint that quality of internet connection is a critical factor influencing the acceptance. Secondly, the article contributes to the technology acceptance literature by suggesting that perceived usefulness (PU) as well as perceived enjoyment (PE) were found to have significant effect on technology acceptance (cf. Davis, 1989; Davis et al., 1989; Teo et al., 1999). Furthermore, we found that PU was more influential than PEOU in explaining technology acceptance. The results of the study provide managers information about the planning of online banking Web sites and service selection. In the planning and development of online banking services, software developers should pay attention to informative content that is above all perceived useful and with relevant information and services. In the marketing process of online banking services marketing experts should accentuate the benefits its adoption provides. Banks should now concentrate in their advertising more to informative issues rather than in building only brands with less informative advertisements. Limitations and further research Although the results can be considered statistically significant in most parts, the study has several limitations that affect the reliability and validity of the findings. The regression model developed had relatively low coefficient. Although the sample size was quite large compared to sample sizes of other TAM studies, and representative, it consisted of Indian consumers only. This has an effect on the generalization of the findings. TAM studies have found that PU and PEOU are not the only predictors of technology acceptance. Legris et al. (2003) found that many TAM studies are not consistent or clear and lack many significant factors that influence adoption. On this basis, our model might
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also suffer from the fact that for example subjective norms and other possible factors influencing the acceptance of online banking were not included in the model. These limitations pave the way to future studies. Furthermore, another interesting avenue for further research could be a detailed study on online banking usage in firms. We should also measure online banking acceptance with other possible factors derived from different sources of literature.

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REFERENCES

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REFERENCES
1. Davis, F.D. (1993), User acceptance of information technology: system characteristics, user perceptions and behavioral impacts, International Journal of Man-Machine Studies, Vol. 38, pp. 475-87.

2. Tero Pikkarainen, Kari Pikkarainen Heikki Karjaluoto and Seppo Pahnila (2004). Consumer acceptance of online banking: an extension of the technology acceptance model, Internet Research, Volume 14 Number 3 2004 pp. 224235

3. Sathye, M. (1999), Adoption of Internet banking by Australian consumers: an empirical investigation, International Journal of Bank Marketing, Vol. 17 No. 7, pp. 324-34

4. Howcroft, B., Hamilton, R. and Hewer, P. (2002), Consumer attitude and the usage and adoption of home-based banking in the United Kingdom, The International Journal of Bank Marketing, Vol. 20 No. 3, pp. 111-21.

5. Bradley, L. and Stewart, K. (2003), A Delphi study of the drivers and inhibitors of Internet banking, The International Journal of Bank Marketing, Vol. 20 No. 6, pp. 25060.

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ANNEXURE

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Questionnaire (The questionnaire is designed on the basis of the review of literature and taken from standard questionnaire and measured on the scale of 5 likert scale) Instructions: Please choose the option that you feel describes the statement most closely. A) USE 1. I use online banking mainly a) At home b) At work c) In a bank 2. On an average I use online banking -------- times a month 3. On an average I do -------- transactions at a time 4 .How often do you use the following online banking services? 1. Primary current accounts a) Almost never b) Rarely c) Sometimes d) Frequently e) Almost always. 2. Credit based accounts a) Almost never b) Rarely c) Sometimes d) Frequently e) Almost always. 3. Investment based accounts a) Almost never b) Rarely c) Sometimes d) Frequently e) Almost always
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4 .Insurance based accounts a) Almost never b) Rarely c) Sometimes d) Frequently e) Almost always B) Internet connection 1. My internet connection is fast a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 2. My internet connection is reliable a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree C) AMOUNT OF INFORMATION 1. I have generally received enough information about online banking a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 2. I have generally received enough information about the benefits of using online banking. a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree
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3. I have generally received information about online banking from a) a bank b) a friend c) Internet d) Another source D) PERCEIVED USEFULNESS 1. Using online banking enables me to utilize banking services more quickly. a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 2. Using online banking improves my performance of utilizing banking services a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 3. Using online banking for my banking services increases my productivity a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 4. Using online banking enhances my effectiveness of utilizing banking services a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree

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5. Using online banking makes it easier for me to utilize banking services a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 6. Overall, Using online banking is useful for me to utilize banking services a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree E) PERCEIVED EASE OF USE 1. Learning to use online banking is easy for me a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 2. I find it easy to do what I want to do in online banking a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 3. My interaction with online banking is clear and understandable a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree

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4. I find online banking flexible to interact with a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 5. It is easy for me to be skilful at using online banking a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 6. Overall, I find online banking easy to use a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree F) PERCEIVED ENJOYMENT 1. Using online banking is fun a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 2. Using online banking is pleasant a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree

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3. Using online banking is positive a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 4. Using online banking is exciting a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 5. Using online banking is wise a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree G) SECURITY AND PRIVACY 1. Using online banking is financially secure a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 2. I trust in the ability of online banking in protecting my privacy a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree

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3. I trust in the technology online banking is using a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 4. I trust in online bank as a bank a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 5. I am not worried about the security in online banking a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree 6. Matters of security have no influence on using online banking a) Totally disagree b) Disagree c) Neutral d) Agree e) Strongly Agree Gender a) Female b) Male *THANK YOU*

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