INFLUENCE OF ICT ON THE BANKING INDUSTRY: THE CASE OF KAMPALA

BY

A Dissertation Submitted to the School of Graduate Studies in Partial Fulfillment for the Award of Master of Science in Computer Science Degree of Makerere University

Option: Management Information Systems

August, 2007

Declaration
I james baguma, do hereby declare that this dissertation is original and has not been published and/or submitted for any other degree award to any other University before.

Signature......................................
JAMES BAGUMA

Date:..........................................

Department of Information Systems Faculty of Computing and Information Technology Makerere University

Approval
This dissertation has been submitted for Examination with the approval of the following supervisor.

Signature........................................ Dr. Patrick Ogao, PhD Department of Information Systems

Date:............................................

Faculty of Computing and Information Technology Makerere University

Dedication
To God (The Father, The Son and The Holy Spirit).

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Acknowledgements
The completion of this dissertation would have been a myth if assistance was not rendered. Therefore, I would like to thank the Lord God Almighty who gave me the wisdom and everything that I needed throughout the period of my course.

I would like to extend my heartfelt gratitude to Dr. Patrick Ogao, Dr. Bakkabulindi F.E.K. (East African Institute of Higher Education and Development) and Mr. Bissaso Ronald (East African Institute of Higher Education and Development) who put in endless time and effort to ensure that I finish successfully.

I would like to appreciate the entire staff of Faculty of Computing and Information Technology for their resourceful guidance and encouragement during my course of study.

Special thanks go to the following students Mrs. Mwangye Joyce Besigye, Mr. Tibaijuka Tom, Mr. Moini Fred, Ms. Nakakawa Agnes and Mr. Semalulu Paul who have been very supportive to me.

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Contents
Declaration ..i Approval...i Dedication....ii Acknowledgement..iii Table of contents.iv List of tables..vii List of figuresviii Acronymsix Abstract ..x

Chapter One 1. Introduction 1

1.0 Introduction....1 1.1 Background1 1.1.1 Theoretical background...1 1.1.2 Conceptual background...2 1.1.3 Contextual background3 1.2 Problem Statement.4 1.3 Purpose...5 1.3.1 Specific Objectives of the Study.5 1.3.2 Hypotheses..5 1.4 Scope..6 1.5 Justification6 1.6 Outline of the dissertation......6 1.7 Contribution of the dissertation.....7 1.8 Chapter summary.7

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Chapter Two

2. Literature Review

2.0 Introduction ......8 2.1 Theoretical review.....8 2.2 Conceptual framework..9 2.3 Review of related literature......11 2.3.1 E-funds transfer technology and its influence on the banking industry......11 2.3.2 Telephone banking technology and its influence on the banking industry.15 2.3.3 Internet banking technology and its influence on users in the banking industry17 2.4 Chapter summary.21

Chapter Three 3 Methodology 22

3.0 Introduction......22 3.1. Research design......22 3.2 Study population......22 3.3 Sampling procedure.23 3.4 Data collection method and tool.23 3.4.1 Questionnaire method24 3.4.2 Self-administered questionnaire.24 3.5 Quality of research tool24 3.51 Validity of the SAQ25 3.5.2 Reliability of SAQ.26 3.6 Data processing and analysis...26 3.7 Chapter summary.27

Chapter Four 4. Data presentation, analysis and interpretation 28

4.0 Introduction......28

4.1 Description of background variables...28 4.1.1 Employment status by sex......29 4.1.2 Bank of respondent by account30 4.1.3 Salary level by age Table 4: Salary level by age.32 4.2 How the dependent variable varies according to the background variables33 4.2.1 Banking industry and employment status...34 4.2.2 Banking industry and sex.35 4.2.3 Testing for variations between banking industry and age...36 4.2.4 Testing for variations between banking industry and type of account.38 4.2.5 Testing for variations between banking industry and salary level40 4.3 Verification of hypotheses...42 4.3.1 Factor analysis42 4.3.2 Relationship between constructs.....47 4.3.3 Influence of e-funds transfer technology on the banking industry in Kampala...48 4.3.4 Influence of telephone banking technology on the banking industry in Kampala.49 4.3.5 Influence of Internet banking technology on the banking industry in Kampala.. 50 4.3.6 ICT and the banking industry in Kampala.......51 4.4 Chapter summary.52

Chapter Five 5 Discussions, conclusions, recommendations, limitations and further work 53

5.0 Introduction......53 5.1 Discussion53 5.2 Conclusions......54 5.3 Recommendations55 5.4 Limitations...57 5.5 Further work57 5.6 Chapter summary.........................................................................................................57 5.7 References 58

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Appendices 5.8 Appendix A 5.8.1 Questionnaire for individual bank customers 5.9 Appendix B 5.10.1 Letter to research expert 6.0 Appendix C 6. 1 Codebook for individual bank customers in Kampala 7.0 Appendix D 80 74 73 68

7.1 Data entry form.80

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List of tables
Table 1: Simulations of Cronbach's alpha.26 Table 2: Employment status by sex...29 Table 3: Bank of respondent by account... 30 Table 4: Salary level by age ......32 Table 5: Independent t-test: employment status and banking industry. 34 Table 6: Independent t-test: sex and banking industry......35 Table 7: One-way ANOVA: variations of age according to banking industry. 36 Table 8: Duncan multiple range test-Post hoc test for cash withdrawal37 Table 9: One-way ANOVA: variations of type of account according banking industry 38 Table 10: Duncan multiple range test-Post hoc test for cash deposit39 Table 11: One-way ANOVA: variations of salary level according to banking industry......40 Table 12: Duncan multiple range test-Post hoc test for cash withdrawal..41 Table 13: Rotated component matrix: E-funds transfer technology. 43 Table 14: Rotated component matrix: Telephone banking technology.44 Table 15: Rotated component matrix: Internet banking technology 45 Table 16: Correlation matrix: ICT constructs-banking industry47 Table 17: Model 1-E-funds transfer technology and the banking industry.......48 Table 18: Model 2-Telephone banking technology and the banking industry..49 Table 19: Model 3-Internet banking technology and the banking industry...50 Table 20: Model 4-ICT and the banking industry.51

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List of figures
Figure 1 Conceptual framework10 Figure 2 New model of ICT and the banking industry in Kampala...56

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Acronyms
ATM -Automatic Teller Machine or Automated Teller Machine E-banking -Electronic Banking E-commerce -Electronic Commerce E-funds transfer -Electronic Funds Transfer ICT -Information Communication Technology IT - Information Technology M-banking -Mobile Banking SMS - Short Message Services

Abstract
The research aimed at establishing the influence of ICT on the banking industry because there was an empirical desire to investigate how ICT is related to the banking industry in Kampala. The research was carried out using quantitative, qualitative, correlational and case study research structure. Findings revealed that telephone banking had a high predictive potential compared to e-funds transfer and Internet banking technologies. It was concluded that the predictive potential of ICTs on the banking industry in Kampala is still low 54%. This therefore implies that there is less integration of ICTs in the banking industry in Kampala. It was recommended that there is need for bank managers to embark on user awareness, implementation and monitoring and evaluation of what is implemented bearing in mind that it requires high financial investment and a critical plan. In a nutshell, this research is an empirical model that specifically dealt with e-banking technologies thus a paramount contribution in the field of e-commerce.

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CHAPTER 1

INTRODUCTION
1.0 Introduction
This chapter is the introductory part of the study and covers the background, problem statement, purpose, specific objectives, hypotheses, scope, justification and outline of the dissertation. This chapter is basically the preamble of the study and is very significant in highlighting the theoretical issue or problem and provides a platform for understanding it.

1.1 Background
The background is subdivided into the theoretical background, conceptual and contextual background. The theoretical background gives the importance of ICT to the banking industry hence linking the two variables; the theoretical background also gives a highlight on the theory underpinning the research. The conceptual background explains the operational terms that is ICT and the banking industry and the contextual background explains the situation of ICT in relation to the banking industry, highlighting the problem.

1.1.1 Theoretical background

Before the emergence of ICT, brick and mortar banks were the key to banking. However, technological innovations have influenced the banking sector in one way or another. Kassim (2005) [42], explains that the technological revolution has produced new developments in the banking industry. It is no doubt that ICT is now a very strategic issue in the banking realms (Kobrin, 2001) as reported by Vij (2003) [77]. Significant development in ICT has paved way for banking applications such as 1

electronic funds transfer and telephone banking. The development in the banking industry also incorporates the use of the global network (Internet), which can be accessed by anyone at any time (Basel Committee on Banking Supervision, 2001) [10]. According to Quirs (2002) [66] and Ayadi (2003) [6], the use of electronic payment means and increase in customer connection to the Internet eliminates geographical constraints and customers may not need to access banks physically, implying that customers can have access to banking services in any area at any time. Further more, Harris and Spence (2002) [27] argue that new ICT has created new commercial opportunities. The theory underpinning this research is Rogers' (2003) Diffusion of Innovations Theory. This theory suggests that whenever there is a new innovation there is a social change depending on the level of adoption. Rogers (2003) argues that several studies have explained the causes or failures of ICT innovations. This is why the study seeks to investigate the influence of ICT on the banking industry in Kampala.

1.1.2 Conceptual background

Rogers conceptualises an innovation as a social change (Rogers, 2003). ICT is seen as an innovation adopted by the banking industry. According to Gottschalk and Andersen (2001) [25], ICT is an umbrella term that covers computer hardware, software, communication and network systems. In this study the term ICT signifies the provision of banking products and services electronically in form of e-funds transfer technology, telephone banking technology and Internet banking technology, in other-words ebanking. E-funds transfer technology focussed on ATMs, credit and debit cards and echeques, telephone banking technology focussed on Interactive Voice Response (could be wired or wireless in nature) and Internet banking focussed on the Internet and its applications such as websites and e-mail. United States Department of Labor (2005) [76], posits that the banking industry is an entity that constitutes banks which safeguard the money and valuables and provide loans, credit, and payment services, such as chequing accounts, money orders, and cashier's cheques. Banks may also offer investment and insurance products. United States Department of Labor (2005), further explains that banks are primarily meant to 2

accept deposits and lend funds from the deposits made by users. In respect to this research the banking industry is viewed in terms of the cash deposits, cash withdrawals and account balance inquiry.

1.1.3 Contextual background

In 1993, Bank of Uganda designed a website intended to disseminate banking information (Kasita, 2004 September 21) [41]. In 1997, Standard Chartered Bank introduced the first ATMs in Uganda and other banks followed (Monitor Reporter, 2004 August 16) [51]. By 2001, there was continued progress being made in Uganda in the use of ATMs in Kampala City due to ATM establishments. It was hoped that the risk of money transfer from location to location would be reduced. There was growing optimism in the banking industry that VISA credit cards would also be introduced to ease clients' access to cash from their accounts (Kakembo, 2001 December 6) [34]. In 2004, Bankom a local electronic financial transaction services company in Uganda switched to the use of ICT in which mobile phones could also be used to pay bills (Kanyegirire, 2004 January 8) [37]. According to Mwebya, as reported by Ssettumba (2004 November 30) [70], a payment system in which the transfer of funds is done electronically was introduced in Bank of Uganda in 2004. The installed Electronic Fund Transfer Direct Debit System enabled known customers from utility companies to instruct their companies to deduct cash from their accounts and transfer it to the bank account of the utility company. This was done as a means to aid non-cash transactions through the banking system with an aim of making cash transfers efficient, fast and secure which may sort of improve the system. In 2005, credit cards were on the increase and came with several advantages such as avoiding to carry cash physically. However, if the user of the credit card is not conscious about security, then chances that unauthorized withdrawal of cash from a user's account might be carried out by a malicious person (Kahyana, 2005 February 19) [32]. According to Musoke., the head of Corporate Affairs (Standard Chartered Bank) as reported by Ministry of Tourism and Industry (2005 September 2) [50], Standard Chartered Bank was probing a multi-million unsecured loan scam involving fraudsters 3

masquerading as Mulago Hospital employees. Between July 11th and September 8th 2005; the fraudsters had secured loans that were intended for Mulago Hospital employees. The amount in the fraud case was $135,000, about 250 Ugandan million shillings. Stanbic Bank introduced pre-fabricated ATMs to reduce the queues at their access points (Nabayunga, 2006 April 18) [56]. Today ICT has diffused according to indicators such as the use of ATMs, debit and credit cards, telephones, mobile phones and web sites. However no body has quantified it to explain its influence on the banking industry particularly in Kampala, hence suggesting a need to establish the influence of ICT on the banking industry in Kampala.

1.2 Problem Statement

The emergent ICT in Kampala is characterised by the use of technologies such as ATMs, telephones, mobile phones and websites. ICT is an innovation that has left a query within the banking industry; much as it carries some benefits in some banking institutions, on the other hand it seems to create some threats. For example, as observed in the contextual background, the scenario in Standard Chartered Bank case in which $135,000 about 250 Ugandan million shillings was embezzled. Coupled to this is the fact that some people assert that ICT has led to increased queuing at ATM machines which wastes a lot of time and seems no different from the former way of withdrawing funds from the banks (Tabaza, 2006 April 2) [73]. Therefore one wonders how ICT has influenced the banking industry in Kampala. It is therefore imperative for the researcher to establish the influence of ICT on the banking industry in Kampala.

1.3 Purpose
The study aimed at establishing the influence of ICT on the banking industry in Kampala.

1.3.1 Specific Objectives of the Study

The specific objectives of the study were: i. To identify the influence of e-funds transfer technology on the banking industry in Kampala. ii.To identify the influence of telephone banking technology on the banking industry in Kampala. iii.To identify the influence of Internet banking technology on the banking industry in Kampala.

1.3.2 Hypotheses
The study hypothesised the following statements: i. The influence of e-funds transfer technology on the banking industry in Kampala has been positive (H1). ii. The influence of telephone banking technology on the banking industry in Kampala has been positive (H2). iii. The influence of Internet banking technology on the banking industry in Kampala has been positive (H3).

1.4 Scope
Geographically the study took place in Kampala because it is where majority of the banking institutions are located. Conceptually the study assessed the influence of ICT (conceptualised as e-funds transfer, telephone banking and Internet banking technologies) on the banking industry (conceptualised as cash deposit, cash withdrawal and account balance inquiry). The sample space included individual customers in Kampala.

1.5 Justification
The research enlightens the banking institutions on how ICT has influenced its individual customers in Kampala. The study is potends to policy makers such as the Government of Uganda for implementation of policies geared towards the influence of ICT on the banking industry. The study is provides knowledge that may be adopted by society, especially researchers interested in ICT application within the banking industry.

1.6 Outline of the dissertation

This dissertation comprises five chapters. Chapter one covers an introduction, background, problem statement, purpose, objectives, research questions, hypotheses, scope, justification and the outline of the dissertation. Chapter two covers an introduction, the theoretical review conceptual framework and review of literature. Chapter three covers an introduction, research design, study population, sampling procedure, data collection method and tool, quality of research tool, research procedure and data processing and analysis. Chapter four covers an introduction, presentation, analysis and interpretation of data and chapter five covers an introduction, discussions, conclusions, recommendations, limitations and further work. Every chapter is crowned with a summary.

1.7 Research contribution

The study has put forward a new model that explains the predictive potential of ICT on the banking industry with focus on ATM services and telephone services. The conceptualisation of ICT and the banking industry is also a unique contribution of the research.

1.8 Chapter summary

This chapter is rather the preamble of the research. It basically gives the background, purpose, objectives, scope and justification and finally crowned by the dissertation outline, which indicates the chapters in the report. Without this chapter the research cannot precede hence the gateway to the other chapters of the research.

Chapter 2 Literature Review

2.0 Introduction
This section entails the theoretical review, conceptual framework and the review of literature. This section expands on the theory used in the research as explained in the theoretical background. It also expands on the concepts given in the conceptual background to build the conceptual model and finally explains views of different researchers, which are related to the study. Basically this chapter is based on views of different researchers, which are conceptualised by the researcher to get a directed path for this research.

2.1 Theoretical review

In this study Rogers' Diffusion of Innovations Theory (DOI) has been adopted. An influence can be termed as weight to something which can be interpreted as positive or negative. According to Rogers (2003), in his Diffusion of Innovations Theory, consequences are changes that appear in an individual or social system as a result of the adoption or rejection of an innovation. In this case one of the variables can be used to predict another. Rogers (2003) argues that in order for one to understand consequences, a three dimensional approach is very important which includes: desirable versus undesirable, direct versus indirect and anticipated versus unanticipated outcomes. This study focused on the desirable and undesirable dimension implying a negative or positive effect. It should be noted that Rogers (2003) discusses consequences of innovations, which are also important in explaining the influence of ICT on the banking industry. Other researchers who have used this Theory include: Surry and Farquhar (1997) [72] in their study entitled Diffusion Theory and Instructional Technology; 8

conclude that diffusion theories are of great benefit to instructional technology and Singh et al (2003) [69] who in their study entitled the Dynamics of Innovations in Ebanking found out that the diffusion of network systems and distributed systems resulted in radical innovations such as ATMs and Internet banking. Unlike Surry and Farquhar (1997) and Singh et al (2003) and other authors who have used Roger's DOI theory, this study specifically focused on the influence of ICT on the banking industry in Kampala.

2.2 Conceptual framework/model

Basing on Rogers' (2003) and Bakkabulindi (2006), ICT in this research is conceptualised as an innovation adopted by the banking industry. The desirable and undesirable dimensions signify the positive and negative dimensions of the influence of ICT on the banking industry basing on the data collected from the field. It is presumed that if ICT influences the banking industry the dimension (direction) of influence may be positive or negative.

Conceptual framework/model relating ICT to the banking industry

Independent variables (ICT)

E-funds transfer technology (ATM, credit, debit card and e-cheques services -Availability -Accessibility -Use

Dependent variable (Banking industry)

Telephone banking technology (Wired and wireless services) -Availability -Accessibility -Use

Cash deposit -Convenience -Speed -Security Cash withdrawal -Convenience -Speed -Security Account balance inquiry -Convenience -Speed -Security

Internet banking technology (e-mail and website services) -Availability -Accessibility -Use

Figure 1: Source: Adopted from Rogers, 2003, Diffusion of innovations. New York: Free Press and Bakkabulindi, F. E. K. 2006. Social correlates of innovation diffusion/adoption in organizations: the case of Makerere University. Unpublished PhD. (Educational planning, management and administration) thesis, Makerere University, Kampala, Uganda.

Independent variable From the conceptual framework/model, the independent variable is conceptualised as ICT and subdivided into e-funds transfer, telephone banking and Internet banking

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technologies. Each of the three technologies (E-funds transfer, telephone banking and Internet banking technologies) has the following indicators: availability, accessibility and use.

Dependent variable From the conceptual framework/model, the banking industry is conceptualised as the dependent variable because it is the one affected by ICT (e-funds transfer, telephone banking and Internet banking technologies). The banking industry is conceptualised as cash deposit, cash withdrawal and account balance inquiry. Each of these three components was appraised on convenience, speed and security. Hence the influence of ICT on the banking industry was assessed in terms of whether it has positively affected the convenience, speed and security on the banking industry or otherwise.

2.3 Review of related literature

This section entails literature related to the three objectives of the study so that the information gathered is relevant to the study and to create consistency and uniformity hence giving readers a clear picture of what is being researched on. The section includes empirical or past studies revealing the gaps that were left in the given studies. The section also explains opinions of past researchers that are appropriate in understanding the problem.

2.3.1 E-funds transfer technology and its influence on the banking industry
ATMs have extended banking services to the remote areas depositing and withrawal of funds can be carried out in rural areas in Ghana, (Morris-Cotterill, 2002) [52]. This has enabled loading and unloading of cash in small communities or in widespread communities where people gather, however real cash ATMs for general use and deposit would require more servicing and more security (Morris-Cotterill, 2002). Cracknell (2004) [19], opined that Malawi Central Bank established a smart card infrastructure with biometric enabled ATMs with an aim of reducing insecurity with in the banking 11

industry, with the use of such developments on the ATMs, withdrawal and depositing of cash is now done safely thus yielding positive results. According to the Glossary of Terms Used in Payment Settlement Systems as reported by Anguelov et al (2004) [4] efunds transfer is defined as the movement of money or credits from one account to another through an electronic medium. According to a Survey of Consumer finances (2001) as reported by Anguelov (2004) e-funds transfer has features such as direct deposit, an ATM or debit card among the rest. In this study e-funds transfer technology means the availability, accessibility and usage of ATM cards, debit cards, credit cards and e-cheques with reference to cash deposit, cash withdrawal and account balance inquiry. Several researchers indicate that the use of e-funds transfer technologies such as ATMs and e-cheques have shown positive response. For example (Wucker, 2004) [80], explained that in Latin America, migrant workers use ATMs to send money home in which members of their families can easily withdraw funds. This therefore makes it easier for the migrant workers to send cash easily to their families at cheaper costs through the use of banking services. In this way customers are able to withdraw and deposit cash easily as compared to the former days when the use of such services was not available. Gourlay and Pentecost (2005) [26] explain that funds are transferred electronically using ATMs to provide retail banking services allowing 24, hours a day cash withdrawal, balance verification and bill payment at branches and remote locations away from branches. ATMs in the UK are seen as a substitute capital for labour particularly in routine human teller operations. Transaction costs associated with need to withdraw cash unexpectantly are lowered, (Ingham and Thompson, 1993; Hamphrey, 1994; Haynes and Thompson, 2000 as reported by (Gourlay and Pentecost, 2005). ATMs are widely used in transfer of cash. They are mainly located at shopping stations to help customers in carrying out shopping easily (Organisation for Economic Corporation and Development, 2003) [62]. For example in Japan, Ito -Yokado Stores is planned to provide banking services through its stores. It is worth noting that electronic

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transactions can be carried out using e-cheques and e-cash for large amounts of money. There are positive results noted in the use of e-funds transfer with increased use of ATMs and e-cards. According to the Australian Bankers Association (2002) as reported by Arch and Burmeister (2003) [5], in Australia emphasis is placed on e-banking technologies. It was also noted that Australians with visual impairment were introduced to audio-enabled ATMs, through an initiative jointly supported by the National Australian Bank's ATM supplier (Diebold) and Blind Citizens Australia. The first of these was installed at the Royal Victorian Institute for the Blind premises. This implies that use of e-funds transfer technology in Australia has enabled the banking industry to provide services to its clients because even the blind can deposit and withdraw their money from the banking institutions hence indicating a desirable dimension. While the above authors give their views on ICTs their concentration is on ATMs rather than technologies such as credit cards and debit cards. Berger (2002) [13], studied Technological Progress and its Effects on the Banking Industry in the US. It was noted that IT-based delivery systems like ATMs led to improvements in the bank performance and consolidation of the industry during the deployment of technologies (Berger, 2002). Berger, (2002) further posited that, to establish links between technological progress and the productivity growth of the banking industry and industry structure multivariate analysis should be used. Despite the contribution of the above study, the influence of ICT on users in the banking industry in Kampala can be established by an empirical approach that the study seeks to use. In Uganda, while ATMs are found to have some set backs such as limited amount of functionality, queuing and shutting down when they are empty, they have caused an aggressive competition among banks, which has been claimed to have strengthened the banking culture in Uganda (Batanda, 2001 April 11) [12]. The information given by (Batanda, 2001 April 11) is not quantified and the approach followed is not elaborated, hence motivating the current study to take place and establish the influence of ICT on the banking industry in Kampala. Coupled to this is the fact that ATMs are not the only

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technologies of e-funds transfer other technologies such as credit and debit cards need to be studied to establish true influence of e-funds transfer on the banking industry in Kampala. Karin et al (2005) [38] studied Evaluating the Efficacy of Credit Card Regulation in USA and used the elaboration likelihood model to explore how consumers might respond to the revised credit card disclosure requirements, focusing specifically on college students. Random selection approach was used and it was noted that college students possessed a fairly low level of knowledge of credit cards thus are not very well equipped to make educated choices concerning such cards. While Karin et al (2005)'s sample of interest was limited to college students, the sample of interest in this research was open to any individual customer in Kampala and the technologies studied did not only include credit cards but also included ATM and debit cards among other technologies. Rugimbana (1995) [68] studied Predicting Automated Teller Machine Usage, the Relative Importance of Perceptual and Demographic factors in Australia. The main purpose of his study was to discriminate users from non-users, using the demographic variables of respondents and their perceptions of ATM attributes in order to assess the relative importance of these predictor variables. The study, which was based on a survey of 430 retail banking consumers, found that perceptual variables were far more successful as predictors of ATM service usage than respondent demographic variables. While Rugimbana (1995) used ATMs as a criterion variable, ATMs are used as a predictor variable of the banking industry in this study. Inyaga (2002) [31] carried out a study on the Utilisation of Information and Communication Technology in the management of Uganda Martyrs University Nkozi. Inyaga (2002), used a correlational research design to compare the relationship between the Management and the Utilisation of ICT, it was noted that the utilisation of ICTs correlated significantly with the library, research and students' academic records management. Egesa (2006) [21] studied Computer Utilisation in the Management of Students' Information in Uganda and revealed that limited number of computers was one of the major obstacles, which hinders effective utilisation of computers in the

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management of students' data. Although the above studies correlated ICT with Usage and Management review of these empirical studies does not show any relationship between ICT and the banking industry thus leaving a clear path for this research to take place.

2.3.2 Telephone banking technology and its influence on the banking industry
Bohm et al 2000 [14] asserts that some banks have always accepted instructions by telephone from trusted customers well known to them, as part of their ordinary branch banking service. Telephone banking requires a customer and bank to agree at the outset of the relationship a small category of 'security information' to be used to verify the customer's authority to give telephone instructions and usually include a password chosen by the customer (Bohm et al, 2000). Bohm et al (2000) defines telephone banking as a service, which the customer can use to give instructions and get information by speaking to bank staff by telephone. In respect to this research telephone banking technology means availability, accessibility and usage of telephones (wired or wireless telephones) to engage in cash deposit, withdrawal and account balance inquiry by users in the banking industry. Al Ashban and Burney (2001) [2] studied Customer Adoption of Tele-banking Technology in Saudi Arabia and found that customers increasingly extend their use of tele-banking as their experience grows with the system and that education played a vital role in the adoption and usage of tele-banking technology. While Al Ashban and Burney indicated that education played an important role in the adoption and usage of tele-banking, Howcroft et al (2002) [28] indicated that educational levels of respondents did not affect the usage of telephone banking. Findings of these two studies reveal conflicting results.

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In Uganda telephone banking is strengthened through Bankom, a local electronic financial transaction services company in Uganda and a representative of Euro net used in Europe (Kanyegirire, 2004 January 8). There is mobile phone banking in which air time can be fixed on the mobile phone electronically from the customer's account hence enabling customers to enjoy banking services without necessarily having to appear at the bank. Inter-bank communication is trying to connect Crane Bank, Standard Chartered Bank, Centenary Rural Development Bank, Stanbic Bank, Allied bank, Bank of Baroda and Nile bank in Uganda (Kanyegirire, 2004 January 8); Nafula, 2006 March 31 [57]). Idowa et al (2002) [30], studied The Effect of Information Technology on the growth of the Banking Industry in Nigeria. This study concentrated on the use of technologies such as telephone banking technology. It was noted that the use of ICT ensured a quick and improved services delivery to customers in Nigeria, thus an indicating desirable outcomes. While the above study showed positive correlates in Nigeria it does not point to the context in Kampala thus leaving a gap that the study seeks to fill. Knowing the existence of telephone banking technology in Kampala may not be enough, there is need to investigate its influence in order for the business enterprises to benefit from it. Constanzo et al (2003) [17] studied Strategic Approach to the Study of Innovation in the Financial Services Industry about Telephone Banking in the UK and described the strategic approach applied and revealed that differentiation in the financial market place is not achieved with the implementation of distribution channels or just technology, but bringing to the market 'unprecedented value'. Wendy et al (2005) [78] studied Customers' Adoption of Banking Channels in Hong Kong and investigated factors that influenced Hong Kong bank customers' adoption of four major banking channels, that is to say branch banking, ATM, telephone banking, and internet banking. In their study emphasis was placed on the influence of demographic variables and psychological beliefs about the positive attributes possessed by the channels. Wendy et al (2005) used interviews on 10 bank managers and questionnaires on 314 customers to solicit data. It was further revealed that telephone banking was the least

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frequently adopted channel. Psychological beliefs about the extent to which a channel possessed certain positive attributes were more predictive of adoptions of ATM and Internet banking than adoptions of branch banking and telephone banking. Muhasa (2005) [54], studied Technological Innovation, Employee Attitudes, Job design, Useradoption and Perceived Organisational Performance in Uganda Revenue Authority; a cross-sectional survey was used and the study revealed that user-adoption has the individuals' predictive strength on the dependent variable perceived performance as regards the magnitude of Standardised Beta Coefficients in the regression model. A conceptual model which relates technological innovaions, job design, employee attitudes, user-adoption and perceived performance in Uganda Revenue Authority was developed by Muhasa (2005). Although this study took place in Kampala it does not correlate ICT to the banking industry.

2.3.3 Internet banking technology and its influence on users in the banking industry
Ayadi (2003) explains that access to electronic means of payment and the high number of customers connected to the Internet has changed the perception of banks toward market and increased the development of Internet Banking. Hutchinson and Warren (2003) [29] argue that Internet banking requires a sound security procedure that involves designing effective methods via which users can be authenticated in a remote environment such that transactions being conducted are secured within their respective environments. Internet banking technology has made remarkable changes in the banking industry, which include: cost reduction due to electronic processing carried out on the Internet. For example the US while the average transaction cost at a full service bank is about $1.07, it reduces to $0.27 at an ATM and falls to about a penny if the same transaction is conducted on the web (Nath et al, 2001) [58]. In the Australian banking industry sophisticated functionality is routinely offered to customers to make download of account history in various formats and preview history

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of their banking details (Li and Andrew, 2004) [47]. Purcell and Toland (2003) [65] opine that the use of the Internet in the banking institutions can give cost advantage by reducing financial transaction costs; middleman-ship; emerge into new products in the financial industry and the construction of expensive websites that can secure financial transactions. According to Mathias and Sahut (1999) as reported by Ayadi (2003), Internet banking can be defined as a set of systems that enable bank customers to access accounts and general information on bank products and services through a personal computer among other intelligent devices or any other activity held on the Internet. In this research Internet banking technology means the availability, accessibility and usage of websites and e-mail services in cash deposit, cash withdrawal and account balance inquiry by users in the banking industry. In Malaysia, Internet banking technology is mainly grounded in three banks which include: the Malayan Banking Berhad which conducts banking through its web site, Hong leong Bank Berhad through e-commerce banking and the Southern Bank Berhad. Despite the services of these financial institutions, there is fear that unauthorized account users inside and outside the bank can get access to customer accounts through the use of the Internet in any place and at any time which scares away bank customers to withdraw or use online banking facilities and instead resort to using other means thus an indication of a negative out come (NST, 2001) [59]. According to Kerem (2003) [43], Internet banking technology has led to the incorporation of new features for security transactions, international payments; viewing credit card statements, deposits and account history, customers can now send e-mails from the bank's home page. This implies that banks can use websites as means to provide services to customers. According to Goldstuck (2004) as reported by Buys and Brown (2004) [16], Internet banking accounts in South Africa recently surpassed one million and continued to rise rapidly. There is no wide spread dissatisfaction about the security concern on the use of Internet banking in South Africa instead Internet banking has led to increased customer support and quickens transactions and payments of customers (Buys and Brown, 2004).

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Ezeoha (2005) [23] studied Regulating Internet Banking in Nigeria and noted that there are security concerns in Internet banking where fraud has become a daily business to some individuals; Internet banking has remained insignificant due to fraud and forgery, e-banking services are offered in Naira only and that in Nigeria Internet banking may take a long time to fully become one of the economic relevance in the country banking practice because of fraud which has made it complex hence causing few customers to transact their businesses through the Internet. Coupled to that is that the development of bank websites does not go beyond information purposes. Poor government measures have also affected the right environment for Internet banking (Ezeoha, 2005). Given the state of Internet banking in Nigeria one can argue that its influence is an indicator of an undesirable dimension. In Uganda, Internet banking is limited to banks with in Kampala. Nile Bank in Uganda avails information to its customers online through the use of the bank web site. Other services offered include utility payments for electricity and water, and 3rd party payments like post paid telephone bills and much more which has enabled customers to effect their bills without physical appearance to the bank hence avoiding time wastage. SMS can also be provided through True African online to get any inquiries from the bank as compared to before when one had to get to the bank physically (True African, 2006) [75]. Waite and Harrison (2005) studied An Analysis of Website Evolution in the Pensions Sector and found that pension websites support new business transactions rather than existing account management and provide more information on company strength and market position than detail on product and services and proposed a model of financial services website evolution and applies it to a longitudinal content analysis of 30 pension provider websites, spanning eight years of web development from 1996 to 2003. Eriksson et al (2004) [22] studied the Customer Acceptance of Internet Banking in Estonia and used the Technology Acceptance Model. They found out that bank use increases in so far as customers perceive it as useful. It was also noted that perceived usefulness of Internet banking for banks is a key construct for promoting customer use. Laforet and Li (2005) [45] studied Consumers' Attitudes Towards Online and Mobile banking in China and found out that the issue of security was found to be the most

19

important factor that motivated Chinese consumer adoption of online banking; main barriers to online banking were the perception of risks, computer and technological skills and Chinese traditional cash-carry banking culture. Yeap and Chach (2005) [82] carried out a study in Malaysia about Internet banking and found that Internet banking concentrated in foreign banks. Saloner and Shepard, R. (1995), studied Adoption of Automated Teller Machines in US. Banks; Furst, Lang and Nolle (2000) studied the adoption of transactional web sites among US, nationally chartered banks; Masciandaro, J. (2000) studied Introduction of E-banking in the first 110 Italian banks up to May 2000 as reported by (Courchane et al, 2002) [18]. Courchane et al in their study about the application Internet banking in Financial Matters developed a model of the probability of adoption basing on the findings. Similarly to Courachane et al the influence of ICT on the banking industry is expressed in form of an empirical model basing on the findings after data collection. Bradley and Steward (2002) [15] studied A Delphi study of the Drivers and Inhibitors of Internet Banking in the United Kingdom and investigated factors driving and inhibiting Internet banking using the delphi method. As opposed to Bradley and Laura (2002) this study aimed at establishing the influence of ICT on the banking industry using selfadministered questionnaires to solicit data from the respondents. Tan and Teo (2000) [74] studied Factors Influencing the Adoption of Internet Banking in Singapore basing their study on the Theory of Planned Behaviour. Unlike Tan and Teo (2000), this study incorporated Rogers' (2003) Diffusion of Innovations Theory while establishing the influence of ICT on the banking industry in Kampala. Despite the existence of Internet banking technology in Uganda, its magnitude has not been established hence giving room for the study to take place. Polatoglu and Ekin (2001) [63] studied An empirical investigation of the Turkish Consumers' Acceptance of Internet Banking Services and found that cost and time saving dimensions are perceived as a major benefits when customers use Internet banking more often and for larger transactions.

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2.4 Chapter summary

This chapter demarcated the boundary of the study by expanding on Rogers' Diffusion of Innovations Theory and formulating the conceptual framework/model basing on other researchers. Emphasis was placed on the concept of ICT and its influence on the banking industry while conceptualising past studies. Attempts on ICTs in relation to the banking industry have been inconclusive and it has been noted that e-banking technology is an important aspect that has received little attention. This area mainly focused on identifying the research gaps that were existent in other past studies that were reviewed. The focal point of the literature review was based on the e- funds transfer, telephone banking and Internet banking technologies and their influence on the banking industry as shown in the objectives.

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Chapter 3 Methodology
3.0 Introduction
This chapter entails research design, study population, sampling procedure, data collection method and tool, quality of research tool, research procedure and data processing and analysis. This chapter generally contains the approach used to achieve the objectives of the study.

3.1 Research design

The research design was quantitative, qualitative, correlational and case study in nature. (Baskerville and Myers (2004) [11]; Davidson et al (2004) [20]; Markus et al (2002) [48]; Kakinda-Mbaaga (2000) [35] and (Yin, 1984) [81]). For example data collection was largely quantitative basing on use of a questionnaire with limited qualitative approach in explaining the results where possible. Correlations were used in explaining how ICT has influenced the banking industry in Kampala. Kampala was the unit of study (case study).

3.2 Study population

Targeted population included individual bank customers who held accounts within Kampala from the following banking institutions: Barclays, Baroda, Cairo International, Centenary Rural Development, Citi, Crane, DFCU, Diamond Trust, National Bank of Commerce, Nile, Orient, Post, Stanbic, Standard Chartered and

22

Tropical Africa. The population size was difficult to establish because none of the bank-managing directors was willing to release the number of individual customer since it was against the corporate law.

3.3 Sampling procedure

Unsystematic random sampling was used in the selection of respondents given the fact that the population of interest was difficult to establish. Determination of the sample size was done using the following formula. n=(z2/2pq)/e2 Where n is the sample size z is the abscissa of the normal curve and was got from statistical tables p is the estimated proportion of an attribute that is present in the population q is 1-p e is the desired level of precision/estimated error Since N (population) is unknown then p is 0.5 Desired precision is normally 0.05/2=0.025 Substitution of formula n=zp(1-p)/e n=1.96*1.96*0.5*0.5/0.05*0.05 n=0.9604/0.0025 n=384.16 The minimum sample size was expected to be 384 however the researcher managed to obtain a sample of 419 individual customers.

3.4 Data collection method and tool

This section entails the method and the tool used in the research. The section clearly elaborates the purpose of the method in achieving the objectives and the structure of the tool as a means of data collection.

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3.4.1 Questionnaire method

The questionnaire method was used as a means of data collection given the fact that the target population was large. The researcher used a pre-designed set of questions to identify the influence of e-funds transfer, telephone banking and Internet banking technologies on the banking industry in Kampala.

3.4.2 Self-administered questionnaire

The self-administered questionnaire (SAQ) was used as a tool for data collection because it is quicker in getting data from the respondents (Bakkabulindi, 2004) [7]. The questionnaire was structured into: the background information, dependent variable and independent variable respectively (Oppenheim, 1992) [61]. The researcher developed the questionnaire by identification of the dependent and independent variables. There after operationalisation of the dependent and independent variables took shape. The banking industry was operationalised basing on the three main activities that take place in the bank: cash deposit, cash withdrawal and account balance inquiry. On the other hand ICT had three independent variables: e-funds transfer technology which was operationalised as ATM card, credit card, debit card and e-cheque services, telephone banking technology which was operationalised as wired and wireless telephone services and Internet banking technology which was operationalised as e-mail and website services. All the questions were directly linked to the indicators in the conceptual framework/model. Using the indicators the researcher therefore developed the questions basing on the operationalisation of the variables. For the SAQ see Appendix A.

3.5 Quality of research tool

The quality of research tool entailed the following: Reliability of the SAQ and validity of the SAQ. Validity and reliability of the research instruments are very important aspects of a research instrument and should be put into consideration by researchers if they are to obtain substantial results from a research instrument (Oppenheim, 1992).

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3.5.1 Validity of the SAQ

The SAQ was developed by the help of the research experts who were conversant with research method practices to see whether the questions in context can get the data needed to support the research hence achieving content validity. See Appendix B that shows the letter to one of the research experts). The researcher used the following delimiters similarly used in Likert's scale: very appropriate, appropriate, inappropriate and very inappropriate in rating the experts' views. Each expert was given the title, the purpose, objectives, the conceptual framework and the methodology to tarry with the questions in the SAQ. At first the questionnaire had 51 components and 12 components were later dropped. 3 questions were dropped from the background information and 6 questions were dropped from the independent variable of Internet banking, 3 questions were dropped from the dependent variable (banking industry) leaving the questionnaire with 39 questions. In some cases the questions were adjusted. This was because the experts thought that some had technical terms, which some respondents may not have been exposed to. For example one of the experts said that he was very conversant with ICTs but still if some one expected an answer from a statement, 'Satellite connection is accessible in the Bank in which I hold an account' it would be hard to get their response. Adjustments were made on questions. For example, concerning the salary level of the respondent, the researcher was advised to be specific and mention monthly salary because the respondents could not understand whether the salary was monthly, yearly and the like. To achieve predictive validity of the SAQ, measures were used in relating ICT and the banking industry that is how far the items measured distinct variables that were previously developed. This was carried out using factor analysis using varimax rotation simulated via SPSS correlating ICT subscales with the banking industry. ICT subscales were then correlated with the banking industry final scores. In this case some of the components that were insignificant were dropped and those that had zero variance were removed completely from further analysis: for example qn. (question) 23, qn.19 and qn.27 on e-cheque

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technologies were removed because none of the services existed in the given banks. This therefore meant that the variables with a high predictive potential were left, thus ensuring validity of the research instrument. For the predictive validity, see factor analysis in chapter four where the sufficient items were extracted.

3.5.2 Reliability of the SAQ

The SAQ was tested for reliability. Cronbach's alpha was used to establish the reliability of the research instrument simulated via SPSS (Software Package for Social Scientists). The banking industry had a 9 item scale with Cronbach's alpha reliability scale of 0.92, e-funds transfer had a 12 item scale and produced an alpha of 0.79 while telephone banking and Internet banking technology had 6 item scales and produced alphas of 0.89 and 0.91 respectively. It was noted that all the above items had acceptable Cronbach alpha coefficients above 0.78 as explained by (Cronbach 1951; Nunnaly 1978) and reported by (Mpeera, 2005) [55]. Cronbach alpha simulations are shown below in Table 1.

Table 1: Simulations of Cronbachs alpha

Variables Banking industry E-funds transfer technology Telephone banking technology Internet banking technology

Number of items 9 12 6 6

Alpha 0.92 0.79 0.89 0.91

3.6 Data processing and analysis

After data collection data processing took place: data were edited by eliminating questionnaires with inconsistencies, and remaining data were coded through the development of a coding scheme. For the coding scheme see Appendix C. Data was 26

entered using Epi data (Epidemiological data) software in which the researcher designed a data entry form. For the data entry form see Appendix D. The designed form was subjected to validation to check whether it could accept the data values. After validation of the data entry form the researcher entered the data. Data was then exported to excel from Epi data and then imported to SPSS and summarised as table, graphical or text format. Data analysis was done using factor analysis, cross tabulations for explaining background variables, independent t-tests and ANOVA (one-way) for finding out how the dependent variable varied with the background variables. The relationship between the ICT and the banking industry was shown using Pearson's correlation coefficient and to test the significance of the correlation the coefficient of determination was used using regression analysis tool aided by SPSS version 12.

3.7 Chapter summary

This chapter shows the approach the researcher used to achieve the objectives. Quantitative data collection method was mainly used for data collection given, the fact that the entire population of study was too large. Qualitative approach was used in the interpretation of the research findings. A sample size of 419 respondents was taken as representative of the entire individual customer population in Kampala within the banking industry.

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Chapter 4

Data presentation, analysis and interpretation

4.0 Introduction
This chapter has three main sections: Description of background variables; how the dependent variable varies with the background variable and verification of hypotheses. This chapter basically reports what the researcher found in the field and it is geared towards the achievement of the study objectives.

4.1 Description of background variables

The background information was coded to understand the nature of the respondents. It is very important to understand the nature of the respondents because it gives a deeper understanding of any given research and such information may be useful for future use. Cross-tabulations were used in this section to explain the nature of respondents, as shown below.

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4.1.1 Employment status by sex

Table 2: Employment status by sex

Status Employed

Un-employed

Total

Sex of the respondents Male Female Count 240 % within employment status of 61.5% the respondent % within Sex of the 93.4% Respondents % of Total 57.3% Count 17 % within employment status of 58.6% the respondent % within Sex of the respondents 6.6% % of Total 4.1% Count 257 % within employment status of 61.3% the respondent % within sex of the respondents 100.0% % of Total 61.3%

Total 150 38.5% 92.6% 35.8% 12 41.4% 7.4% 2.9% 162 38.7% 100.0% 38.7% 390 100.0% 93.1% 93.1% 29 100.0% 6.9% 6.9% 419 100.0% 100.0% 100.0%

As shown in the table above, results indicate that majority of the individual bank customers were male, accounting for 61.3%. Male individual customers accounted for employment and unemployment status of 61.5% and 58.6% respectively. Results also indicate that the majority of the individual bank customers were employed, accounting for 93.1%. Results are consistent with Ayadi (2006); Ongkasuwan (2002) [60] who revealed that majority of the respondents were male and employed.

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4.1.2 Bank of respondent by account

Table 3: Bank of respondent by account

Bank of the Respondent Barclays Bank Bank of Baroda Cairo International Bank CERUDEB Citi Bank Crane Bank DFCU Diamond Trust Bank National Bank of Commerce Nile Bank Orient Bank Post Bank Stanbic Bank Standard Chartered Bank Tropical Africa Bank Total Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Count % within Bank Type of account mainly operated Total Current Savings Fixed Salary Future Account Account Account Account account 23 9 7 1 3 43 53.5% 20.9% 16.3% 2.3% 7.0% 100.0% 8 19 6 33 24.2% 57.6% 18.2% 100.0% 3 1 4 75.0% 25.0% 100.0% 5 20 1 1 27 18.5% 74.1% 3.7% 3.7% 100.0% 3 3 6 50.0% 50.0% 100.0% 12 20 3 35 34.3% 57.1% 8.6% 100.0% 13 22 8 43 30.2% 51.2% 18.6% 100.0% 1 1 100.0% 100.0% 1 4 5 20.0% 80.0% 100.0% 22 8 6 2 38 57.9% 21.1% 15.8% 5.3% 100.0% 2 2 1 1 6 33.3% 33.3% 16.7% 16.7% 100.0% 1 2 3 6 16.7% 33.3% 50.0% 100.0% 36 58 10 2 106 34.0% 54.7% 9.4% 1.9% 100.0% 17 23 16 3 1 60 28.3% 38.3% 26.7% 5.0% 1.7% 100.0% 1 5 6 16.7% 83.3% 100.0% 144 198 63 9 5 419 34.4% 47.3% 15.0% 2.1% 1.2% 100.0%

As shown in the table above, results reveal that majority of the individual customers were savings account holders, accounting for 47.3%. Minority of the account holders were future account holders accounting for 1.2%. This could be true because few people in developing countries have a tendency to save for the future. Results

30

revealed that majority of the account holders were from Stanbic bank, accounting for 25.3%.

31

4.1.3 Salary level by age

Table 4: Salary level by age

Level of monthly salary Count % within level of monthly salary % within age group of the respondents % of Total Less than 90,000/= Count % within level of monthly salary % within age group of the respondents total 100,000-490,000/= Count % within level of monthly salary % within age group of the respondents % of Total 500,000-990,000/= Count % within level of monthly salary % within age group of the respondents % of Total 1,000,000-1,490,000/= Count % within level of monthly salary % within age group of the Respondents % of Total Above 1,500,000/= Count % within level of monthly salary % within age group of the respondents % of Total Total Count % within level of monthly salary % within age group of the respondents % of Total No salary

Age of respondent Less than 19 20-29 years 30-39 years years 2 27 6.9% 93.1% 66.7% .5% 16.9% 6.4% 7 50.0% 4.4% 1.7% 69 51.9% 43.1% 16.5% 44 37.6% 27.5% 10.5% 11 16.7% 6.9% 1 1.7% 33.3% .2% 3 .7% 100.0% .7% 2.6% 2 3.3% 1.3% .5% 160 38.2% 100.0% 38.2% 7 50.0% 4.5% 1.7% 51 38.3% 33.1% 12.2% 51 43.6% 33.1% 12.2% 26 39.4% 16.9% 6.2% 19 31.7% 12.3% 4.5% 154 36.8% 100.0% 36.8%

Total 40-49 years Above 50 years 29 100.0% 6.9% 6.9% 14 100.0% 3.3% 12 9.0% 14.8% 2.9% 17 14.5% 21.0% 4.1% 24 36.4% 29.6% 5.7% 28 46.7% 34.6% 6.7% 81 19.3% 100.0% 19.3% 3.3% 1 133 .8% 100.0% 4.8% 31.7% .2% 31.7% 5 117 4.3% 100.0% 23.8% 27.9% 1.2% 27.9% 5 66 7.6% 100.0% 23.8% 15.8% 1.2% 15.8% 10 60 16.7% 100.0% 47.6% 14.3% 2.4% 14.3% 21 419 5.0% 100.0% 100.0% 100.0% 5.0% 100.0%

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As shown in the table above, results indicate that majority of the individual bank customers were aged between 20 to 29 years of age, accounting for 38.2%. Individual customers aged between 20 to 29 mainly earned between 100,000/= to 490,000/= (accounting for 43.1%). Findings are partially consistent with Tan and Teo (2000) in which most of the respondents were aged between 20 to 29 years accounting for 64.1%. It was also noted that 6.9\% earned no salary because they were unemployed. Results also indicate that respondents aged between 40 to 49 years mainly earned above 1,500,000/= accounting for 46.7%.

4.2 How the dependent variable varies according to the background variables
This analysis was done with an aim of knowing how the dependent variable varies with the background variables since it is the most important variable. This analysis gave the means and the significance of their differences using t-tests and one-way ANOVA as shown below.

33

4.2.1 Banking industry and employment status

Table 5: Independent t-test: employment and banking industry

Cash deposit

Employment status of individual bank customers Employed Un employed Employed Un employed Employed Un employed

Mean

SD

df

Sig. tailed) 30.45 417 31.02 417 30.44 417

(2

390 229 390 29 390 29

4.16 3.76 3.88 3.22 4.31 4.02

.84 1.10 1.12 1.12 .82 1.08

1.93

.02*

Cash withdrawal Account balance inquiry

1.34 2.02

.31 .04*

As shown in the table above, results indicate that there was a significant difference between employed and unemployed individual customers when it came to cash deposit and account balance inquiry. Employed individual customers engaged more in cash deposit than their unemployed counterparts (t=1.93, p<0.02). It was also noted that account balance inquiry activity was also significantly higher with the employed individual bank customers (t=2.02, p<0.04) than with the unemployed.

34

4.2.2 Banking industry and sex

Table 6: Independent t-test: sex and banking industry

Sex Cash deposit Cash withdrawal Account balance inquiry Male Female Male Female Male Female

N 257 162 257 162 257 162

Mean 4.11 4.17 3.79 3.91 4.29 4.37

SD .98 .95 1.12 1.12 .84 .85

t -1.14 -1.03 -.61

df 417 353.18 417 342.15 417 338.28

Sig. (2 tailed) .02* .31 .73

As shown in the table above, results indicate that there was significant difference between males and female individual customers on cash deposit. The analysis shows that male individual bank customers engage more in cash deposit than their female counterparts (t=-1.14, p<0.02) at 0.05 level.

35

4.2.3 Testing for variations between banking industry and age

Table 7: One-way ANOVA: variations of age according to banking industry

Cash deposit

Cash withdrawal

Account balance inquiry

Sum of square Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares 5.740 304.797 310.537 13.637 514.001 527.638 2.002 296.319 298.320

df 5 413 418 5 413 418 5 413 418

Mean square 1.435 .736

F 1.95

Sig. .10

3.409 1.242

2.75

.03*

.500 .716

.70

.59

As shown in the above, results indicate that cash withdrawal rating varied significantly by age group, F (4, 415)= 2.75, p<0.03 at 0.05 level. After carrying out post-hoc tests it was noted that those in the age group of 40-49 years rated cash withdrawal higher on average (4.16) compared to other age groups as shown below.

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Table 8: Duncan multiple range test-Post hoc test for cash withdrawal

Duncana,b

Waller-Duncana,1

Age of individual bank customers Less than 19 years 20-29 years 30-39 years Above 50 years 40-49 years Sig. Less than 19 years 20-29 years 30-39 years Above 50 years 40-49 years

N 3 160 154 21 81 3 160 154 21 81

Subset for alpha=. 05 3.33 3.72 3.76 4.06 4.16 .01 3.33 3.72 3.76 4.06 4.16

Means for groups in homogeneous subsets are displayed. a. Uses Harmonic Mean Sample Size=12.314. b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type 1 error levels are not guaranteed. c. Type 1/Type 2 Error seriousness Ratio=100.

37

4.2.4 Testing for variations between banking industry and type of account

Table 9: One-way ANOVA: variations of type of account according to banking industry

Cash deposit

Cash withdrawal

Account balance inquiry

Sum of square Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares 7.413 303.124 310.537 9.493 518.146 527.638 7.381 290.940 298.320

df 4 414 418 4 414 418 4 414 418

Mean square 1.853 .732

F 2.63

Sig. .04*

2.373 1.252

1.90

.110

.1.845 .703

2.53

.03

As shown from the table above, results indicate that cash deposit rating varied significantly by type of account, F (4, 415)= 2.63, p<0.04. After carrying out post-hoc tests it was noted that the fixed account holders rated cash deposit higher on average (4.87) compared to other account holders as shown below.

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Table 10: Duncan multiple range test-Post hoc test for cash deposit

Duncana,b

Account of individual bank customers Future account Salary account Current account Savings account Fixed account Sig. Future account Salary account Current account Savings account Fixed account

N 9 5 144 198 63 9 5 144 198 63

Subset for alpha=. 05 1 4.02 4.13 4.32 4.33 .37 4.02 4.13 4.32 4.33 2 4.32 4.33 4.87 .11 4.32 4.33 4.87

Waller-Duncana,1

Means for groups in homogeneous subsets are displayed. a. Uses Harmonic Mean Sample Size=14.750. b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type 1 error levels are not guaranteed. c. Type 1/Type 2 Error seriousness Ratio=100.

39

4.2.5 Testing for variations between banking industry and salary level
Table 11: One-way ANOVA: variations of salary level according to banking industry

Cash deposit

Cash withdrawal

Account balance inquiry

Sum of square Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares 39.765 270.772 310.537 89.799 437.839 527.638 14.420 283.901 298.320

df 5 413 418 5 413 418 5 413 418

Mean square 7.953 .656

F 12.13

Sig. .000

17.960 1.060

16.94

.01*

.1.845 .703

4.20

.001

As shown in the table above, results indicate that cash withdrawal rating varied significantly by salary level, F (4, 415)= 16.94, p<0.01. After carrying out post-hoc tests it was noted that individual customers who earned above 1,500,000 rated cash withdrawal higher on average (4.45) compared to individual customers at different salary levels as shown below.

40

Table 12: Duncan multiple range test-Post hoc test for cash withdrawal

Duncana,b

Salary level of individual bank customers No salary Less than 90,000/= 100,000/=-490,000/= 500,000/=-990,000/= 1,000,000/=-1,490,000/= Above 1,500,000/= Sig. No salary Less than 90,000/= 100,000/=-490,000/= 500,000/=-990,000/= 1,000,000/=-1,490,000/= Above 1,500,000/=

N 29 133 14 117 66 60 29 133 14 117 66 60

Subset for alpha=. 05 1 3.22 3.34 3.45 2 3

3.97 4.38 .35 3.22 3.34 3.45 0.73

Waller-Duncana,1

4.38 4.45 .78

3.97 4.38 4.45

Means for groups in homogeneous subsets are displayed. a. Uses Harmonic Mean Sample Size=39.013. b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type 1 error levels are not guaranteed. c. Type 1/Type 2 Error seriousness Ratio=100.

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4.3 Verification of hypotheses

The study focused on achieving the following objectives: To identify the influence of efunds transfer technology on the banking industry in Kampala, to identify the influence of telephone banking technology on the banking industry in Kampala and to identify the influence of Internet banking technology on the banking industry in Kampala. To achieve the given objectives, there were tentative statements; referred to as hypotheses (H1, H2 and H3) on page 5 and 6. Before the verification of the hypotheses, validity of the predictive variables had to be ensured using factor analysis. This section involves factor analysis, discussion of the relationship between constructs and fulfilment of the objectives.

4.3.1 Factor analysis

Varimax rotated component matrix was used to identify the items that could best predict the banking industry. For each technology two factors were extracted as shown below thus a total of six factors were extracted from the global construct of ICT. The extracted factors were later used in the regression model for prediction. According to Oppenheim (1992) factor analysis is important in explaining underlying dimensions or patterns in data.

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Table 13: Rotated matrix: E-funds transfer technology

1 Credit-debit card services 16. 17. 18. 20. 21. 22. 24. ATM services are available in the Bank where I own an account Credit card services are available in the Bank where I hold an account Debit card services available in the Bank where I hold an account ATM services are accessible in the bank where I hold an account Credit card services are accessible in the Bank where I hold an account Debit card services are accessible in the Bank where I hold an account I use ATM services in the Bank where I hold an account Eigen values Cumulative percentage .91 .94

2 Atm card services .84

.79 .91 .96 .51 4.4 1.7 68%

Extraction method: Principle component analysis. Rotation method: Varimax with Kaiser normalisation. A rotation converged into 3 iterations. As shown in the table above, the construct of e-funds transfer loaded on two factors namely: Credit-debit card services and ATM services accounting for a cumulative percentage of 68% and eigen values of 4.4 and 1.7 respectively. The first factor explained availability and accessibility of credit and debit card services to individual customers hence the label credit-debit services. The values from the loadings presented acceptable results. The first factor had the items 17, 18, 21 and 22 with values 0.91, 0.94, 0.91 and 0.96 respectively. The second factor explained availability, accessibility and use of ATM card services hence the label ATM services. The loadings on this

43

factor also indicated acceptable results. The factor had the following items 16, 20 and 24 with values of .84, .79 and .51 respectively.

Table 14: Rotated component matrix: Telephone banking technology

1 Wired-wireless availabilityaccessibility services 28. 29. 30. 31. 32. 33. Wired telephone services are available in the Bank where I hold an account Wireless telephone services are available in the Bank where I hold an account Wired telephone services are accessible in the Bank where I hold an account Wireless telephone services are accessible in the Bank where I hold an account I use wired telephone services in the Bank where I hold an account I use wireless telephone services in the Bank where I hold an account Eigen values Cumulative percentage .88 .91 .93 .92

2 Wiredwireless use services

.68 .75 3.9 1.2 86%

Extraction method: Principle component analysis. Rotation method: Varimax with Kaiser normalisation. A rotation converged into 3 iterations. As shown in the table above, the construct of telephone banking technology loaded on two factors namely: Wired-wireless availability-accessibility services and wiredwireless services for a cumulative percentage of 86% and eigen values of 3.9 and 1.2 respectively. The first factor explained availability and accessibility of wired and wireless services to individual customers hence the label wired-wireless availabilityaccessibility services. The values from the loadings presented acceptable results. The 44

first factor had the items 28, 29, 30 and 31 with values 0.88, 0.91, 0.93 and 0.92 respectively. The second factor explained use of wired and wireless telephone use services hence the label wired-wireless use services. The loadings on this factor also indicated acceptable results. The factor had the following items 32 and 33 with values of .68 and .75 respectively

Table 15: Rotated component matrix: Internet banking technology

1 E-mail-website availabilityaccessibility services 34. 35. 36. 37. 38. 39. E-mail services are available in the Bank where I own an account Website services are available in the Bank where I own an account E-mail services are accessible in the Bank where I own an account Website services are accessible in the Bank where I hold an account I use e-mail services in the Bank where I hold an account I use website telephone services in the Bank where I hold an account Eigen value Cumulative percentage .91 .88 .95 .95

2 E-mail-website use services

.73 .69 4.3 1.3 93%

Extraction method: Principle component analysis. Rotation method: Varimax with Kaiser normalisation. A rotation converged into 3 iterations. As shown in the table above, the construct of Internet banking technology loaded on two factors namely: E-mail-website availability-accessibility services and e-mailwebsite use services accounting for a cumulative percentage of 93% and eigen values of 4.3 and 1.3 respectively. The first factor explained availability and accessibility of e45

mail and website services to individual customers hence the label e-mail-website availability-accessibility services. The values from the loadings presented acceptable results. The first factor had items 34, 35, 36 and 37 with values 0.91, 0.88, 0.95 and 0.95 respectively. The second factor explained e-mail and website use services hence the label wired-wireless use services. The loadings on this factor also indicated acceptable results. The factor had the following items 38 and 39 with values .73 and .69 respectively. It was noted that six factors in total were extracted with acceptable values. Kaiser (1974) [33] recommends accepting values greater than 0.5 and further explains that values between 0.5 and 0.7 are mediocre, 0.7 and 0.8 are good values between 0.8 and 0.9 are great values and those above .9 are superb.

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4.3.2 Relationship between constructs

Table 16: Correlation matrix: ICT constructs-banking industry
Bank Bank Credit-debit card services (1a) ATM card services (1b) Wiredwireless availabilityaccessibility services (2a) Wiredwireless use services (2b) Internet availability and accessibility services (3a) Internet use services (3b) Pearson Correlation Pearson Correlation Pearson Correlation Pearson Correlation 1 .403** 1 1 1 .791** Pearson Correlation Pearson Correlation .401** Pearson Correlation .853** .044 .484** .371** 1 .181** .036 .066 .307** .000 .486** .121* 1 .602** .330** -.018 .000 1 1a 1b 2a 2b 3a 3b

.530**

.000

.027

** Correlation is significant at the 0.01 level (2-tailed). *Correlation is significant at the 0.05 level (2-tailed). Relationship between ICT constructs As shown in the correlation matrix above credit-debit card service significantly positively correlated with wired-wireless availability-accessibility services (r=0.486**, p<0.01). A significant relationship was also noted between credit-debit services and wired-wireless use services (r=0.330**, p<0.01). This therefore signifies that an increase in either service may lead to increase in another service. There were significant correlations between Internet availability-accessibility services with credit-debit card services (r=0.853**, p<0.01). Internet use services and credit-debit card services were also correlated (r=0.181**, p<0.01) although not highly related as compared to the availability and accessibility of Internet services. This therefore implies that an increase 47

in credit-debit card services may probably increase Internet services with change in Internet availability and accessibility. There was a significant positive relationship between ATM services and wired-wireless (r=0.121*, p<0.05)

4.3.3 Influence of e-funds transfer technology on the banking industry in Kampala

Pearson's correlation coefficient results reported in Table 16 indicated significant positive correlations between e-funds transfer technologies and the banking industry. Credit-debit card services and ATM services were positively correlated with the banking industry, (r=0.403**, p<0.01 and r=0.530**, p<0.01) respectively at 0.01 level. Table 17: Model 1-E-funds transfer technology and the banking industry
Model 1 a Predictors: (Constant), Credit-debit card services, ATM services b Dependent Variable: banking industry Constant Credit-debit card services ATM card services R R square Adjusted R Square Std. Error of the Estimate . 403 . 530 9.639 6.404 3.656 .000 .000 .000 . 529 . 280 . 269 .20444 Standardised beta coefficients T Sig.

From the above table credit-debit cards and ATM services were used as the predictor of the banking industry separately. As already noted e-funds transfer was reported to have a low predictive potential the regression model explained 27% of the total variation in the banking industry. Implying that the level of incorporation of e-funds transfer technologies is low in the banking industry.

48

4.3.4 Influence of telephone banking technology on the banking industry in Kampala

Pearson's correlation coefficient results reported in Table 16 revealed significantly positive correlations between the banking industry and telephone banking technologies. Wired-wireless availability-accessibility and wired-wireless use services, (r=0.791**, p<0.01, r=0.602**, p<0.01,) respectively. Table 18: Model 2-Telephone banking technology and the banking industry
Standardised beta coefficients T Sig.

Model 2 a Predictors: (Constant), wired-wireless availabilityaccessibility, wired-wireless use services b Dependent Variable: banking industry Constant Wired-wireless availabilityaccessibility services Wired-wireless use services R R square Adjusted R Square Std. Error of the Estimate

. 791

3.993 3.932

.000 .000

. 602

2.246

.000 .731 . 534 . 528 . 55455

With reference to the above table telephone banking technology was used as the predictor of the banking industry separately and it was noted that it had a predictive potential of 53% although much higher compared to both e-funds transfer technologies and Internet banking technologies. Findings are not consistent with Wendy et al (2005) who argue that telephone banking is the least frequently adopted channel in Hong Kong.

49

4.3.5 Influence of Internet banking technology on the banking industry in Kampala

Pearson's correlation coefficient results reported in Table 16 revealed significantly positive correlations between Internet banking technologies. E-mail-website availability-accessibility services and the banking industry, (r=0.401**, p<0.01). Never the less, e-mail-website use services did not significantly correlate with the banking industry. Table 19: Model 3-Internet banking technology and the banking industry
Model 3 a Predictors: (Constant), internet use, internet availability and access b Dependent Variable: banking industry Constant Internet availability and access Internet use R R square Adjusted R Square Std. Error of the Estimate .401 .027 24.224 5.937 .563 .000 .000 .003 .340 .116 .111 .07908 Standardised beta coefficients T Sig.

The regression model above shows that Internet banking technology has predictive potential of 11% of the total variation of the banking industry, which is very low. This implies that Internet banking is least supported with in the banking industry Kampala.

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4.3.6 ICT and the banking industry in Kampala

The aim of the study was to establish the influence of ICT on the banking industry in Kampala. As shown in Table 16 results indicate that ICT constructs were uncorrelated with in their sets. It was therefore inevitable to achieve the aim of the study with such a pattern in the independent constructs. Table 20: Model 4-ICT and the banking industry

Model 4 a Predictors: (Constant), ATM card services, credit-debit card services, wired-wireless availability-access, wiredwireless use, internet-use, internet availabilityaccessibility a Dependent Variable: banking industry Constant Credit-debit card services ATM card services Wired-wireless availabilityaccess Wire-wireless use service Internet use service Internet availability and access service R R square

Standardised beta coefficients

Sig.

.136 .501 .690 .330 -.120 -.070

19.639 1.564 2.828 9.633 2.384 -1.333 -1.474

.000 .119 .005* .001* .002* .183 .141

. 740 . 550 Adjusted R Square Std. Error of the Estimate . 541 .51220

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The regression model above shows that a combination of e-funds transfer, telephone banking and Internet banking technologies has a predictive potential of 54% on the banking industry which is low although better than single predictions based on either predictor variable. The approach is supported by Gay and Airasian (2003) [24] who argued that using a combination of correlations below 0.50 might yield better predictions. This therefore implies that the level of ICTs incorporation is still low with in the banking industry as perceived by the response of the individual customers. Findings reveal that ATM, wired-wireless availability-accessibility and wired-wireless use services are significant predictors of the banking industry because their significant t values are less or equal to 0.05 as opposed to the other services.

4.4 Chapter summary

This chapter has generally put forward what the researcher entirely found in the field. The study was set out to establish the influence of ICT on the banking industry. The chapter has explained the nature of the background variables and also shown the variation of the background variables with the dependent variable. Lastly the chapter is crowned with models fulfilling the objectives of the study, explaining the relationship between ICT constructs (e-funds transfer, telephone banking and Internet banking technologies) and the banking industry.

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Chapter 5 DISCUSSIONS, RECOMMENDATIONS, FURTHER WORK

5.0 Introduction
This is section is the final part of the dissertation and includes: Discussions, conclusions, recommendations, limitations and further work. Discussions are explained with an attempt to relate research findings with theory. Conclusions are the researcher's opinions depending on the outcome from the data analysed as per the objectives of the study. Recommendations are the way forward resulting from conclusions and are very vital for policy making. Limitations are set to explain the restrictions of the study. Further work gives an area of importance that the researcher left unexplored in relation to the on going study.

CONCLUSIONS, LIMITATIONS AND

5.1 Discussion
The first hypothesis stated that the influence of e-funds transfer on the banking industry in Kampala has been positive, findings from the study indicated that e-funds transfer. These findings are consistent with findings of several researchers such as Wucker, (2004), Arch and Burmeister, (2003) who claimed that the e-funds transfer technologies have positively influenced the customers in the banking industry. The second hypothesis stated that the influence of telephone banking on the banking industry in Kampala has been positive; findings are consistent with Idowa et al, (2002) who showed positive correlates between telephone banking and the banking industry. The third hypothesis stated that the influence of Internet banking on the banking industry in Kampala has been positive; findings have revealed that Internet banking technology has a positive relationship with the banking industry. These findings are not consistent with

53

NST, (2001) and Ezeoha (2005) who explained that insecurity (fear of fraud) has frightened away would be users of Internet banking. The results indicated stand as they are probably because unlike the previous years the banking industry has started incorporating the use of ICTs such as ATMs as away of improving services to their customers.

5.2 Conclusions
The first objective of the study was to identify the influence of e-funds transfer on the banking industry in Kampala, findings from the study indicated that e-funds transfer has a low predictive potential of 27% on the banking industry this could be true because (Kaliisa and Oostdijk, 2006) [36] argued that very few individuals own credit cards in the developing world which implies that few individual customers in Kampala could be in position of holding e-funds transfer technologies such as credit cards. This supports findings in that the beta coefficients for credit-debit card services are insignificant. The second objective of the study was to identify the influence of telephone banking on the banking industry in Kampala. Findings have revealed that telephone banking has a better predictive potential (53%) as compared to e-funds transfer and Internet banking technologies. The third objective was to identify the influence of Internet banking on the banking industry in Kampala and it was found that Internet banking has the least influence on the banking industry (11%) among the three technologies. This could be attributed to the slow speed of the Internet in developing countries, hence limiting Internet connection as a result impacting on the usability and functionality of its application (Kaliisa and Oostdijk, 2006). In general influence of ICT on the banking industry is still low (54%) in Uganda and is consistent with Kasigwa et al, (2006) [40] who argued that despite the emphasis placed on ICTs, many ICT initiatives have stalled in developing countries. According to Pfitzmann et al, (2003) as reported by Kalisa and Oostdijk, (2006) there is lack of ICT capable financial institutions in developing countries.

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5.3 Recommendations
The above presentation explains the importance of using ICT to predict the banking industry, which embeds implications for IT bank managers for helping the banking industry to improve its services. The results have indicated that there is a positive relation between ICT and the banking industry, which is an indication that ICT contributes to improvement in the banking industry services. However it has been noted that the incorporation of ICTs is still low in the banking industry in Kampala. This suggests a need to adopt an IT strategy by IT bank managers, placing more emphasis on the awareness of ICTs while educating individual customers on their existence and benefits. If technologies such as telephone banking are perceived by customers as improving service, IT bank managers should support them. User awareness of telephone banking, e-funds transfer and Internet banking services can be increased through putting in place community based workshops before introduction of new technology funded by management of the banking industry. This is recommended because few people in Uganda are ICT-literate therefore introducing these technologies without any education about their use might be a loss to the banking industry. After user awareness then implementation can take place so that what the users have been taught is put into practice. In the process of implementation emphasis should be put much more on technologies such as ATM and wired/wireless services because findings have revealed that these technologies are very significant for the banking industry. Security should be one of the vital issues to consider, that is to say the development of e-funds-transfer, telephone banking and Internet banking security strategies as part of the IT strategy should be put in place since the banking industry is a risky venture which holds people's finances. Thereafter IT bank managers can monitor and evaluate the usage of the implemented technologies, this can be done by identifying the number of customers using a given technology and how often it is used, with such a measure in place. IT bank managers can therefore get feed back on which technology that should be improved and then later plan for their business without wastage of resources. The process of user awareness, 55

implementation and monitoring and evaluation for feedback should be continuous if the banking industry is to get better results. The above framework however requires heavy financial investment and critical planning. Basing on the findings the relationship between ICT and the banking industry can be expressed in form of a model as shown below.

New model of ICT and the banking industry in Kampala

Figure 2: Source: Namirembe, E. (2007). Influence of ICT on the banking industry: the case of Kampala. Unpublished Masters Makerere University (Management Information Systems) dissertation, Makerere University, Kampala, Uganda.

As shown in the model above, it has been noted that ATM and telephone services are significant predictors of the banking industry and the direction of influence is positive (+).

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5.4 Limitations
Although results of the study have indicated the relationship between ICT and the banking industry, they cannot explain a casual link between ICT and the banking industry. According to (Gay and Airasian, 2003), when interpreting any correlation coefficient, it is important for one to keep in mind that what is being explained is a relationship not a cause-effect relationship. The sample is limited to individual customers only. The study is also restricted to the banking industry therefore the results cannot be subjected to generalisation for other industries.

5.5 Further work

While the study has related ICT and the banking industry, the unit of study was individual customers leaving behind corporate customers. It would be better to incorporate perceptions of corporate customers to provide integrated perceptions of customers. The study can be extended to cover other financial services and products such as insurance and on-line brokerage. While the study related ICT and the banking industry it did not asses the process through which ICT influences the banking industry, and this aspect requires further research.

5.6 Chapter summary

This chapter is crowned with the discussion, conclusions, limitations and further work and has noted that ICT is related to the banking industry and with low prediction potential. This therefore implies that ICTs can be incorporated in the banking industry but caution has to be taken by IT managers in the banking industry on commonly used ICTs such as ATMs and telephone technologies. IT bank managers are therefore advised to create awareness, implement and carry out monitoring and evaluation measures for feed back to obtain better results.

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5.8 Appendix A
5.8.1 Questionnaire for individual bank customers

SAQ I.D

QUESTIONNAIRE FOR INDIVIDUAL CUSTOMERS ONLY Dear Sir/Madam, I am a student from the Faculty of Computing and Information Technology in Makerere University. You are kindly requested to participate in answering the following questions, which will be used in establishing the influence of Information Communication Technology (ICT) on the banking industry in Kampala. The intended respondents will involve: individual customers only. Any information provided will be used for academic purposes only. Please feel free to express your thoughts. Thank you in advance, Yours faithfully,
JAMES BAGUMA

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SECTION A: BACKGROUND INFORMATION This section is meant to provide the researcher background information for statistical groupings. Please place a tick against any option of your choice in the boxes corresponding to the questions where possible.

Qn. no 1. 2. 3.

Question Which of the following categories do you belong to? What is your sex? What is your age range?

Coding category 1. Employed 2. Un employed 1. Male 2. Female 1. Less than 19 years 2. 20-29 years 3. 30-39 years 4. 40-49 years 5. Above 50 years

4. 5.

Which Bank (name of the Bank) are you a customer to? What type of account do you mainly operate?

----------------------------------------------------1. Current account 2. Savings account 3. Fixed account 4.Mention any other if any---------------------------------------------------------------------

6.

What is the level of your monthly salary if any?

1. Less than 90,000/= 2. 100,000-490,000/= 3. 500,000-990,000/= 4. 1,000,000-1,490,000/= 5. Above 1,500,000/=

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SECTION B: INFLUENCE ON USERS IN THE BANKING INDUSTRY Please indicate the extent to which the following questions apply to you by placing a tick against the answer of your choice. In this case 1=Not at all, 2=Little, 3=Fair, 4=Much, 5=Very much

Qn. No. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Rating Cash deposit I find cash deposit convenient in the Bank where I hold an account I find cash deposit quick in the Bank where I hold an account I find cash deposit secure in the Bank where I hold an account Cash withdrawal I find cash withdrawal convenient in the Bank where I hold an account I find cash withdrawal quick in the Bank where I hold an account I find cash withdrawal secure in the Bank where I hold an account Account balance inquiry I find account balance inquiry convenient in the Bank where I hold an account I find account balance inquiry quick in the Bank where I hold an account I find account balance inquiry secure in the Bank where I hold an account

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SECTION C: AVAILABILITY, ACCESSIBILITY AND USE OF ICT Please indicate the extent to which the following questions apply to you by placing a tick against the answer of your choice. In this case 1=Not at all, 2=Little, 3=Fair, 4=Much, 5=Very much

Qn. No. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27.

Rating E-funds transfer technology ATM services are available in the Bank where I own an account Credit card services are available in the Bank I you hold an account Debit cards services available in the Bank where I hold an account Electronic cheques services are available in the Bank where I hold an account ATM services are accessible in the Bank where I own an account Credit card services are accessible in the Bank where I hold an account Debit card services are accessible in the Bank where I hold an account Electronic cheques services are accessible in the Bank where I hold an account I use ATM services in the Bank where I own an account I use credit card services in the Bank where you hold an account I use debit card services in the Bank where I hold an account I use electronic cheque services in the Bank where I hold an account

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Please indicate the extent to which the following questions apply to you by placing a tick against the answer of your choice. In this case 1=Not at all, 2=Little, 3=Fair, 4=Much, 5=Very much

Qn. no 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39.

Rating Telephone banking technology Wired telephone services are available in the Bank where I hold an account Wireless telephone services are available in the Bank where I hold an account Wired telephone services are accessible in the Bank where I hold an account Wireless telephone services are accessible in the Bank where I hold an account I use wired telephone services in the Bank where I hold an account I use wireless telephone services in the Bank where I hold an account Internet banking technology E-mail services are available in the Bank where I hold an account Website services are available in the Bank where I hold an account E-mail services are accessible in the Bank where I hold an account Website services are accessible in the Bank where I hold an account I use e-mail services in the Bank where I hold an account I use website services in the Bank where I hold an account

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5.9 Appendix B
5.9.1 Letter to research expert
Request for expert vetting of the interview guide
James Baguma, FCIT Makerere University, P.O. BOX 7062, Kampala-Uganda,

1/09/2006. Prof. M.E Amin, Dept of higher education, Makerere University, P.O.BOX 7062, Kampala-Uganda. Thru, Dr. Patrick Ogao, Dear Dr., RE: Request for validation of my questionnaire I am undertaking a masters degree in the faculty of Computing and Information Technology particularly majoring in Management Information Systems. I am requesting you to please check and see if the questions in the interview guide are credible in view of the problem, objectives, research questions and the literature review. The following codes below may please be used for rating of the interview guide: VA=Very appropriate, A=Appropriate, I=Inappropriate and VI=Very inappropriate I will be very grateful if I can receive the response with in one week in which case I will collect the outcome from your office secretary. Thank you in advance, Yours faithfully,
James baguma,

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6.0 Appendix C
6. 1 CODE BOOK FOR INDIVIDUAL BANK CUSTOMERS IN KAMPALA

Question number 1. 2. 3.

Variable name SAQ ID eplyt sex age

Variable description Questionnaire identification number Category of respondent Sex of respondent Age range of respondent

Codes 001 1. Employed 2. Unemployed 1. Male 2. Female 1. Less than 19 years 2. 20-29 years 3. 30-39 years 4. 40-49 years 5. Above 50 years

4.

bank

Bank of respondent

5.

typeacc

Type of Bank account

6.

salary

Level of monthly salary

1. Barclays 2. Baroda 3. Cairo International 4. Centenary Rural Development 5. Citi 6. Crane 7. DFCU 8. Diamond Trust 9. National Bank of Commerce 10. Nile 11. Orient 12. Post 13. Stanbic 14. Standard Chartered 15. Tropical Africa 1. Current 2. Savings 3. Fixed account 4. Salary account 1. Less than 90,000/= 2. 100,000-490,000/= 3. 500,000-990.000/= 4. 1,000,000-1,490,000/= 5. Above 1,500,000/=

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Question number 7.

Variable name convdep

Variable description Convenience of cash deposit

8.

speeddep

Speed of cash deposit

9.

secdep

Security of cash deposit

10.

convwith

Convenience of cash withdrawal

11.

speedwith

Speed of cash withdrawal

12.

secwith

Security of cash withdrawal

Codes 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5.

Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much

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Question number 13.

Variable name convbal

Variable description Convenience of account balance inquiry

14.

speedbal

Speed of account balance inquiry deposit

15.

secbal

Security of account balance inquiry

16.

avatm

Availability of ATM cards

17.

avcc

Availability of credit cards

18.

avdb

Availability of debit cards

19.

avec

Availability of electronic cheques

Codes 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5.

Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much

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Question number 20.

Variable name acatm

Variable description Accessibility of ATM cards

21.

accc

Accessibility of credit cards

22.

acdb

Accessibility of debit cards

23.

acec

Accessibility of electronic cheques

24.

useatm

Use of ATM cards

25.

usecc

Use of credit cards

26.

usedb

Use of debit cards

27.

useec

Use of electronic cheques

Codes 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5.

Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much

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Question number 28.

Variable name avwdtel

Variable description Availability of wired telephones

29.

avwltel

Availability of wireless telephones

30.

acwdtel

Accessibility of wired telephones

31.

acwltel

Accessibility of wireless telephones

Codes 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5.

Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much Not at all Little Fair Much Very much

32.

usewdtel

Use of wired telephones

33.

usewltel

Use of wireless telephones

34.

avemail

Availability of e-mail services

35.

avweb

Availability of website services

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Question number 36.

Variable name acemail

Variable description Accessibility of email services

37.

acweb

Accessibility of website services

38.

useemail

Use of e-mail services

39.

useweb

Use of website services

Codes 1. Not at all 2. Little 3. Fair 4. Much 5. Very much 1. Not at all 2. Little 3. Fair 4. Much 5. Very much 1. Not at all 2. Little 3. Fair 4. Much 5. Very much 1. Not at all 2. Little 3. Fair 4. Much 5. Very much

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7.0 Appendix D
7.1 Data entry form 1

80

Data entry form 2

81

Data entry form 3

82