E-Banking In Malaysia: Prospects & Challenges - A Research Essay

Describe about the Prospects and Challenges of E-banking in Malaysia?

A research methodology helps the researcher in collecting the facts, analysing those facts and then interpreting observed facts. (Daniel, 1999) This section of research methodology introduces a logical framework which needs to be followed in the process of leading this study. Our research methodology will be divided into three parts, i.e. research design, collecting population and sample data and analysis of collected data. (Balachandran & Guru, 2000)

The major objective of research design will be to plan for selecting the subjects, researching sites & procedures for data collection so as to answer the research questions. A research design would be a conceptual framework within which research process would take place and would comprise the blueprint for data collection & thereafter the analysis of data that would be collected. (Indian Word Stats, 2010)

Based on the objectives of our study and the purposes to be served by the study and the kind of data involved, qualitative & exploratory research design would be implemented. The purpose or the objective will be to provide clear understanding of internet banking, its impact & importance, its usages with main concentration on benefits and disadvantages of using internet banking. Qualitative data would be collected from the customers of banks which are either using internet banking services or are not using internet banking services, also from bank employees. (Lichtenstein & Williamson, 2006)

In the first phase of the research qualitative research methodology will be used. Pilot testing of survey helps to attain the in-depth response from the target group. On the basis of this in the second phase exploratory research methodology will be used.  The execution of the research would begin with the questionnaire. In this screening criterion will be used by us, so as to identify the target group for this research. The screening will take place on the basis of 3 questions:

Do target audience have internet access?

Do target audience know how to use internet.

Do the target audience banks provide internet banking facility? (Rogers, 1995)

The research would travel through the target group’s perception about the manual banking also. In order to measure the impact of manual banking transactions it was important to take the opinion from the target group about manual banking. Thereafter, the study will be divided into 2 parts: the customers who don’t use internet banking and customers who use internet banking. It is important to bifurcate in order to understand the perceptions of the customers completely. This bifurcation helped to correlate the information between both the users and non-users of internet banking. It will also guide us to evaluate the present level of satisfaction of the customers who are the users of internet banking. The assessment of different frameworks will end up with the landscape study of the areas, which are required to be improved by the banks. The studies done earlier have mentioned that ease of use, reliability, accessibility, personality, accuracy, efficiency & security could influence the use of internet banking. At the time of conducting the survey the major focus will be on all the possible demographics, i.e. sex, age, occupation status, financial status, etc. The purpose behind covering different demographics would be to minimize the survey errors, as the sample of population needs to be taken for the purpose of completing the study. Questionnaire would be prepared in accordance to Likert’s five point scale in order to calculate the opinion on different parameters by different customers. (Chau & Patrick, 1996)

Research Design

Target Population

The first indicator to have the targeted sample would be the customers of banks who have internet access, know how to use internet & whose bank provides the internet banking facilities.  The sample for conducting the survey includes customers from Britain (UK). The research would cover different customers from different banks from different locations of Britain.  Britain is considered as mini U.K. While conducting this survey we would take suggestions from the employees of biggest banks of UK like Bank of Scotland, Barclays & HSBC in order to get more in-depth knowledge about internet banking. The survey will also aim on covering all the demographic factors in the sample itself. (Mayer, Davis & Schoorman, 1995)

Sample Size

The customers of the banks would be our sample for the research. In total 20 bank customers from different localities & from different banks were surveyed. Out of 20 people approached, the replies we got were 10, which fitted in our target population criteria. The data analysis is based on those 10 bank customers. The respondent file that took the survey and completed it is given in the below table: (Ainin, Lim & Wee, 2005)

For collecting the data the primary and secondary sources would be used. Secondary sources like internet, banking websites, journals and reports would be used in order to complete the study. Also primary sources would be used such as closed and open ended questionnaires were prepared for the customers through survey monkey. The purpose of the questionnaires would be to find out information regarding the level of usage of internet baking, services offered, customers demographic, satisfaction level of customers, benefits of internet banking, and growth opportunities of internet banking, the disadvantages and challenges faced by the users of internet banking. The questionnaire method of research will help us to save time & cost for the researchers as well as the respondents. (Greenland, 1995)

The analysis has been made on 10 target responses which were received after conducting the survey. The respondents had different educational qualifications, were of different age groups. The aim of the study would be to find out the perception of the customer’s about internet banking. From the selected sample of 10 respondents, it is observed that 60% of the sample does not use internet banking facilities provided by banks.  The rate at which banks invest in providing such kind of services is growing, mere 40% users reflects a big gap between the investments and its returns. From the results of the survey it is clear that role of education is not much important in improving the usage of internet banking services. This study reflected that there is a major difference between educated non users of internet banking and users of internet banking. Academic people were using more of internet banking facilities. Earlier researchers did not studied this factor while doing there research. This becomes vital in a country where the education level is not too high. Gender of customers also does not play an important role in using internet banking services.  The study reflected that females are less internet banking users when compared to makes. Thereafter a small research is done on the usage of internet banking and the gender role. In the same way, the study revealed that people belonging to higher income groups are more users of internet banking. However, age and choices of internet banking are independent of each other. The customers from a younger age group are more users of internet banking when compare with older age group people. (Ndubisi & Sinti, 2006)

The above observations and findings showcase that customers which believe that manual banking is more convenient and are not using internet banking. This out dated and age hold perception has become so strong that even such efficient & fast modes like internet banking or banking through mobiles has not been able to change it.  The major reasons for this out dated perception are the manual banking offers more flexibility & human interaction. There is no reason that motivates the customers to use internet banking facilities as the customers have a strong confidence that manual banking is convenient and easy to use. (Fishbein & Ajzen, 1975)

According to the data collected it showed that 50% of total respondents are happy with the manual banking services, so this would be the strongest criteria for the customers, which influences their mind not to go for internet banking services. Almost 10% of the customers were neutral, i.e. they may choose to use internet banking services if they are given motivation to do so. The reason behind high number of non-internet banking customers may be due to manual banking providing better service quality. The biggest reason behind any failure or acceptance of electronic commerce is service quality. (Basyir, 2000)

In many earlier studies conducted also showed that biggest concern for not using internet banking services is security. Almost 60% of the customers do not prefer to use internet banking services due to high level of cybercrimes like hacking, phishing, etc. on the other hand the result showed 15% of the respondents have faced such problems in past, so they do not prefer to use online banking services. This could be the reason why 25% of customers do not prefer internet banking services as shown in table 3, 4, 5. (Khalil & Pearson, 2007)

The biggest factor that is stopping customers to use internet banking services is the security concern. This reflects the conceptual framework which states that security is an important factor for accepting any service. The biggest factor which motivates to opt for internet banking is trust. Users are convinced about internet usage. Thus the motivating factor behind internet banking usage is trust, if banks are able to build trust on the customers by providing proper security, customer’s will definitely opt for internet banking services.  (Huam, 2008)

References:

Ainin, S., Lim, C. H., & Wee, A. (2005). Prospects and challenges of E-banking in Malaysia. The Electronic Journal on Information Systems in Developing Countries, 22 (1), 1-11.

Huam, et al. (2008). Predictors of intention to continue using internet banking services: An empirical study of current users. International Journal of Business and Information, 3(2), 233-244.

Internet World Stats, Usage and Population Statistics. (2010). Internet usage is Asia. [Online] Available: https://www.internetworldstats.com/stats3.htm#asia (September, 28, 2010).

Khalil, M.N., & Pearson, J. M. (2007). The influence of trust on internet banking acceptance. Journal of Internet Banking and Commerce, 12 (2), 1-10.

Lichtenstein, S., & Williamson, K. (2006). Understanding consumer adoption of internet banking: An interpretive study in the Australian Banking Context. Journal of Electronic Commerce Research, 7(2), 50-66.

Mayer, R.C., Davis, J.H., & Schoorman, F.D. (1995). An integrative model of organizational trust. Academy of Management Review, 20(3), 709-734.

Ndubisi, N. O., & Sinti, Q. (2006). Consumer attitude, system’s characteristics and internet banking adoption in Malaysia. Management Research News, 29(1/2), 16-27.

Rogers, E.M. (1995). Diffusion of innovations. New York: Free Press.

Balachandran & Guru B. K. (2000). E-Banking Developments in Malaysia: Prospects and Problems. Journal of International Banking Law, 15 (10): 250–256.

Basyir, A. (2000). A Model of Consumers' Acceptance of Internet Shopping. MBA thesis,  School of Management, Universiti Sains Malaysia, Penang.

Chau, Patrick Y. K. (1996). An Empirical Assessment of a Modified Technology Acceptance Model. Journal of Management Information Systems, 12 (2): 185–204.

Daniel, E. (1999). Provision of Electronic Banking in the UK and Republic of Ireland. International Journal of Bank Marketing, 17 (2): 72–82.

Fishbein, M. & Ajzen, I. (1975). Belief, Attitude, Intentions and Bahavior: An Introduction to Theory and Research. Boston, Reading, MA: Addison-Wesley.

Greenland, S. (1995). Network Management and The Branch Distributions Channels. International Journal of Bank Marketing, 13 (4): 12–18.