Communication Media for Banking Industry

Chapter 1: Introduction


Today’s world is world of technology. Everyday a new technology is introduced that can assist people in order to do their daily works easily and finally increase the quality of their life. These new technologies help their users in different aspects of their life, by saving time, doing works faster and better with lower level of error. The rapid development of information technology has brought unprecedented influence on the life of millions of people around the globe. Various activities were handled electronically through the adoption of IT in the workplace or at home, for example, e-mail, e-commerce and e-government (Guriting and Ndubisi, 2006). One of these technologies that effects most people around the world is Internet, which was born in the last years of 20 century and rapidly broke boundaries, time and place. It brought more easily communication ways from usual daily activities to high level official activities. Online shopping and paying is a symbol of developing internet technology. People can stay at home, be at their work place, or their car or any other place, and order their food, clothes , shoes and pay online and receive their orders without spending time for going to the shopping center or finding parking .so online paying helped its users saved their time and their money. Next generation of online paying is internet banking, which means doing transactions online without going to the bank, staying in long queues, and without direct face-to-face interacting.

The terms of PC banking, online banking, Internet banking, and mobile banking refer to a number of ways in which customers can access their banks without having to be physically present at a bank branch. PC Banking relates to every banking business transacted from a customer’s PC. This can be done through online banking, in which bank transactions are conducted within a closed network, or via Internet banking, which permits the customer to perform transactions from any terminal with access to the Internet. Mobile banking is the implementation of banking and trading transactions using an Internet-enabled wireless device. (Mobile phones, PDAs, handheld computers, etc.). Thus mobile banking (m-banking) is a subset of Internet banking, I banking, (Hazell and Raphael, 2001)

The banking industry is using the new communication media to offer its services to the customers with convenience. Using Internet banking and its nearest technology, mobile banking, is increased during these years around the world. Malaysian penetration of Internet banking and mobile banking, as the base infrastructure for this paper, is mentioned as below:

In all five continents, penetration of internet and mobile banking are rapidly increasing. Especially in most developed countries, trend of internet banking is increasing, also using mobile banking, is increasing. Most of Europe has embraced GSM (Global System for Mobile Communications) as a format for wireless technology. This more standardized wireless telecommunications infrastructure has yielded a higher level of acceptance and penetration, which has led to speculation that Europe will drive innovations in wireless communications, this technology can use to do both internet banking and mobile banking. Although still need time to adapt the mobile banking. In most countries this service is available but Because of its price and some uncertainty about its security, mobile banking is not popular yet. North America represents the flip side of the European situation. Wireless communications, though far from rare, lag behind Europe’s penetration levels, while participation in the wired Internet is the highest in the world. The North American wireless infrastructure is not as widespread as standardized as its European counterpart. In the Middle East, has secured 15 wireless infrastructure contracts in regional markets over the last 12 months, most recently in Kuwait. Motorola’s work in Kuwait involves a $14 million contract with wireless GSM operator MTC to implement a countrywide capacity enhancement. The “dual-band” network implementation will enable cell phones to utilize the most efficient network route and frequency, thus optimizing network performance.

In spite of the fact that internet and mobile banking has rapidly growth in all countries, but still there are people from developing countries that do not interest in use this facility. People of these countries are concerning about their personal information, privacy and security, and these are factors that will increase their uncertainty level of using internet banking(East African and West African countries in Malaysia interviewing). This anxiety can refer to their cultural background. culture can refer to the customs and beliefs of a nation that stay with people for years, and changing of fundamental of this culture is not possible easily. So culture of a country can affect the culture of sub-societies in that country, such as organizational culture, educational culture and etc. So each nation and country has especial fundamental in order to go to the technology world and use technology as an assistant in their life.

Statement of the Problem

According to the previous discussion, although there is rapidly increasing in internet banking penetration but still there is some unsafe feeling towards it. That means there are factors that can affect acceptance and adaption of a technology, beside existing factors such as usefulness, ease of use, subjective norm and etc.

While essential research has been directed toward understanding the adoption and diffusion of IT (Prescott and Conger, 1995), there have been a few studies that specifically examine possible cultural effects on the adoption and dispersion of new information technologies (Raman and Wei, 1992). Research on the impact of corporate culture on IT acceptance provides a useful viewpoint (Cooper, 1994; Kydd and Jones, 1989) but ethnic or national culture research undoubtedly has a special character.

The problem to be investigated is that there is no enough research that works on the effect of national culture on acceptance a technology. Thereafter

This study examines the role of culture on technology acceptance model (TAM) adaption and tries to give an in depth view of Hofstede Cultural Dimensions towards acceptance of a technology (Power distance index:PID, Individualism/collectivism, Uncertainty avoidance).

It is hoped that conclusions can be drawn and opened a window for managers and all who want to bring world of technology to their life and work.

Research Objective

    1. The main aim of this paper is finding the role of culture in acceptance a new technology. That can be interpreted to culture role on the Technology Acceptance Model.

Beside the main objective this study pursues following objectives:

  1. Giving the overall view of Hofstede Cultural Dimensions in different countries base on their Power Distance Index, Individualism/Collectivism and Uncertainty avoidance
  2. Opening a new window for all who work in IT and IS implementing, to bring technology in multinational and international organizations.
  3. Handling the problem that faced in multi-cultural society according to each person cultural background.

Research Questions

Main question can be draw as below:

  • Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on TAM

This main question can be expended as below:

  • Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Usefulness (PU)?
  • Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Ease of Use (PEOU)?
  • Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Subjective Norm (SN)?
  • Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Behavioral Control (PBC)?
  • Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Behavioral Intention(BI) to use internet banking?

Scope of the Study

In order to achieve the best results in finding different attitude towards technology acceptance (Internet banking) among different people from different nations, student of four universities in Malaysia have been selected to administer the questionnaire in order to examine attitude towards internet and mobile banking. Because of large scope of this study and necessity of collaboration of more than 30 countries from the five continents in Malaysia, embassy of ten countries and their referees took part in this research by filling up questionnaires that was distributed by hand and by e-mail, also staffs of some international organizations in Malaysia cooperate in this research, and the last one, social networks such as facebook came to assist this paper by finding the different others countries communities in Malaysia.

Significance of the Study

As firms internationalize, there is a growing need to understand how cultural factors might affect a multinational organization’s ability to adopt and utilize IT. Further studies may lead to knowledge that will help IT researchers and practitioners in improving the technology transfer process. Such knowledge will be worth to practitioners, because it could spell the difference between achievement and collapse in implementing IT. In the movement toward globalization of markets and corporate multinationalism, the value of more cross-cultural research is clear (Cash, McFarlan, McKenney and Applegate, 1992). In a large survey of information systems more than half of the respondents felt that global IT issues were keys to their firms’ future success (Ives and Jarvenpaa, 1991). As firms grow their operations in the international arena, there is a need to exploit the power of IT to communicate among these widespread locations and to coordinate activities both within and across countries. Hence, it is important for the managers of these firms to learn, as much as they can, about the cross-cultural adoption and use of IT (Couger,1986; Kumar and Andersen,1990) Such understanding can make the distinction between success and failure in executing information technology and system. The study will be clear the differences and similarities between countries cultures, and will give nations attitude towards technology acceptance. This study will be the first one that combines culture and TAM across the five continents. The result can assists managers and technology developers around the world in order to apply IT through international organization. The unique results of this study can be a base for future research and open a window to work on TAM as viewpoint of culture.

Summary and Organization of the Remaining Chapters

The main part of the dissertation is divided into five Chapters, which will be briefly introduced:

Chapter1: Introduction

The introduction section a projects a brief overview of the study is provided.

Chapter 2: Literature Review

In this section, selected academic literature related to Technology acceptance model, related theory and Hofstede cultural dimension and its related academic literatures. Then conceptual framework and steps to developing the hypothesis are discussed.

Chapter 3: Methodology

The methodology section critically examines a range of research approaches and techniques. Sample and the size of samples, also one of the most important for this study, finding the sample from different countries who stay in Malaysia for study or work. The research technique that is selected for this study is Design of Experiment.

Chapter 4: Analysis and Results

In the analytical section, the research findings are explained briefly according to the data collection and analysis.

Chapter 5: Discussion

In discussion section the further interpretation and explanation the findings is provided and comparisons is made between the findings with other literature in the area of the study. Then the findings are summarized; recommendations for future research and the practicing manager are made.

Chapter 2: Literature Review


This chapter is included of backgrounds and literatures in Technology acceptance Model, Hofstede cultural Dimensions and previous researchs including of cultural role on TAM. This chapter will prove the unique work of this paper.

Framework, definitions and hypothesis development for this study, will mention and discuss in this chapter.

Technology Acceptance Model

Technology Acceptance Model (TAM) is one of the most influential extensions of Ajzen and Fishbein’s theory of reasoned action (TRA) that has been widely used to predict user acceptance and use based on perceived usefulness and ease of use. According to TRA, an individual’s behavioural intention, which results in actual behaviour, is influenced by person subject norm and attitude, and the attitude is influenced by individual beliefs (Ajzen & Fishbein, 1980).

According to the Davis (1989), TAM hypothesizes that behavioural intention is a significant determinant of actual system use, and that behavioural intention is determined by two relevant beliefs, perceived usefulness and perceived ease of use. In TAM, an individual’s principle determines the attitude toward using the system. The attitude develops the intention to use. Perceived usefulness is related to productivity but perceived ease-of-use is related to effort (Venkatesh, 1999). This intention influences the decision of actual technology usage. These causalities were largely studied and accepted (Suh and Han, 2002; Morris and Dillon, 1997; Teo, Lim, Lai, 1999).

The most significant results of Davis study was the strong relation between Usefulness and Usage. Users of a technology try to cope with difficulties of a system, although difficulty of use can discourage adoption of a useful system, no amount of ease of use can give back for a system that does not perform a useful function.TAM used in several IS studies and proved useful determining technology acceptance, especially to explain computer usage behaviour. This justifies why TAM is suitable for studies in computer acceptance. Given the rising popularity of Electronic_ Commerce technology such as Internet banking and Mobile Banking and the dynamic user behaviors identified above, the TAM is a suitable framework for this study. There are other widely used and well known frameworks, such as ”uses and gratification” or ”diffusion of innovation”, but the TAM is considered the best fit for this study because other frameworks focus on different levels of analysis (macro, mezzo, or micro) or different topics of emphasis (diffusion mechanisms, etc.). If modified appropriately, the TAM is the most effective tool for a study like this one, which investigates factors relating to usage and adoption, such as cultural dimensions. (Suh et al., 2002; Morris et al., 1997; Teo et al., 1999).

The TAM was stimulated by the theory of reasoned action(1980), which argues that both the attitude toward an action and subjective norms have an impact on behavioral intention, which in turn affects how people perform an action. The TAM was an early attempt to apply psychological factors to information systems and computer adoption. It assumed that perceived usefulness and perceived ease of use were major influences on an individual’s attitude toward using technology and, thus, ultimately, were related to actual use (Davis, 1989).

Technology Acceptance Model (TAM) has been widely used to predict user acceptance and use based on perceived usefulness and ease of use (Davis, 1989). TAM conceives that behavioural intention is a significant determinant of actual system use, and that behavioural intention is determined by two main beliefs, perceived usefulness and perceived ease of use. The perceived usefulness refers to ”the degree to which an individual believes that using a particular system would enhance his/her job performance”. The perceived ease of use refers to ”the degree to which an individual believes that using a particular system would be free of physical and mental efforts.” In TAM, an individual’s belief settles on the attitude toward using the system and, in turn, the attitude develops the intention to use. This intention influences the decision of actual technology usage. With the bang of the Internet and convergence technologies, researchers have modified TAM to demonstrate the empirical evidences of it in the convergence context. In fact, many researchers have proposed various extended TAM. For instance, Moon and Kim (2001) suggest a model where perceived playfulness was described as one of the antecedents of attitude toward Web surfing. They noted that most prior TAM research had focused only on extrinsic motivation, not on intrinsic motivation. Morris and Dillon (1997) found that TAM contributes to the prediction of individual usage of software. The motivational model that was adapted by Davis, Bagozzi, Warshaw (1992) employs two key constructs: extrinsic and intrinsic motivation. According to Venkatesh and Speier (1999), extrinsic motivation refers to the performance of an activity. Extrinsic motivation is perceived to help achieve valued outcomes that are distinct from the activity itself, such as improving job performance, pay, etc. Intrinsic motivation refers to the performance of an activity for no reason other than the process of performing it. In the case of technology acceptance studies, perceived usefulness is an example of extrinsic motivation. Davis et al. (1992) found that perceived enjoyment was significantly related to the perceived ease of use. In the research on the usage intentions for information systems, Heijden (2004) adds perceived an enjoyment to TAM model. Cheong and Park (2005) also develop a more comprehensive version of TAM to better reflect mobile Internet context.

Their model employs perceived playfulness, content’s quality, system quality, Internet experience and perceived price level, in addition to perceived usefulness and ease of use. For the mobile services, Nysveen et al. (2005) investigate the consumers’ intention to use mobile services, which shows the four overall influences on usage intention: motivational influences, attitudinal influences, normative pressure, and perceived control. Similarly, Fogelgren-Pedersen (2005) found that connection stability and geographic coverage are one of the significant variables of perceived relative advantage in mobile Internet. Also, in the worldwide mobile Internet user survey, Fife (2005) found that perceived enhanced utility of mobile services are the strong value motivating use of mobile technology. While these studies found the significant perceived variables, they still do not find variables specific to mobile Internet. Viswanath Venkatesh, Morris, B.Davis, D.Davis (2003) worked on this issue and eight prominent models are discussed, the eight models and their extensions are empirically compared, a unified model is formulated that integrates elements across the eight models, and the unified model is empirically validated. Using data from four organizations over a six-month period with three points of measurement, the eight models explained between 17% and 53% of the variance in user intentions to use information technology. Next, a unified model, called the Unified Theory of Acceptance and Use of Technology (UTAUT), was formulated, with four core determinants of intention and usage, and up to four moderators of key relationships. UTAUT provides a useful tool for managers needing to assess the likelihood of success for new technology introductions and helps them understand the drivers of acceptance in order to proactively design interventions targeted at populations of users that may be less inclined to adopt and use new systems.

Theory of reason Action(TRA)

Drawn from social Psychology.TRA is one of the most fundamental and inflectional theories of human behaviour.

It has been used to predict a wide range of behaviours .Davis et al.(1989) applied TRA to individual acceptance of technology and found that the variance explained was largely consistent with studies that employed TRA in context of other behaviours

Technology Acceptance Model(TAM)

TAM is tailored to IS contexts, and was designed to predict information technology acceptance and usage on the job. Unlike TRA, the final conceptualization of TAM excludes the attitude construct in order to better explain intention parsimoniously. TAM2 extended TAM by including subjective norm as an additional predictor of intention in the case of mandatory settings (Venkatesh and Davis 2000). TAM has been widely applied to a diverse set of technologies and users.

Theory of Planned Behaviour

TPB extended TRA by adding the construct of perceived behavioural control is theorized to be an additional determinant of intention and behavioural .Ajzan(1991) presented a review of several studies they successfully used TPB to predict intention and behaviour in a wide variety of settings. TPB has been successfully applied to the understanding of individual acceptance and usage of many different technologies (Tailor and Todd, 1995). A related model is the Decomposed Theory of Planned Behaviour (DTPB). In terms of predicting intention, DTPB is identical to TPB. In contrast to TPB but similar to TAM, DTPB “decomposes” attitude, subjective norm, and perceived behavioural control into its the underlying belief structure within technology adaption contexts.

Combined TAM and TPB

It is a combination of TPB TAM to provide a hybrid model (Taylor and Todd,1995)

Innovation Diffusion Theory (IDT)

Grounded in sociology, IDT (Rogers 1964) has been used since the 1960s to study a variety of innovations, ranging from agricultural tools to organizational innovation (Tornatzky and Klein 1982). Within information systems, Moore and Benbasat (1991) adapted the characteristics of innovations presented in Rogers and refined a set of constructs that could be used to study individual technology acceptance. Moore and Benbasat (1996) found support for the predictive validity of these innovation

Social Cognitive Theory (SCT)

One of the most powerful theories of human behavior is social cognitive theory (Bandura 1986). Compeau and Higgins (1995) applied and extended SCT to the context of computer; while Compeau and Higgins (1995) also employed SCT, it was to study performance and thus is outside the goal of the current research. Compeau and Higgins'(1995) model studied computer use but the nature of the model and the underlying theory allow it to be extended to acceptance and use of information technology in general. The original model of Compeau and Higgins (1995) used usage as a dependent variable but in keeping with the spirit of predicting individual acceptance,

In 2008, Ima, I., Kim, Y., Han, H. did a revising research on Venkatesh work. They claimed that in previous study there seem to be two critical factors that are overlooked or have received inadequate attention—perceived risk (PR) and technology type. PR has been recognized as an important factor and was modelled as a precursor of perceived usefulness (PU), and a sub construct of others, such as trust (or as its precursor). In their study PR and technology type, consider as additional to the moderating variables in UTAUT and was tested how they moderate the effects of PU and PEU on users’ intention to use a technology. It was shown the PR and technology type were moderating variables. Kim (2006) added two new constructs, Perceived Cost Savings and Company’s Willingness to Fund, and two causal relationships, Job Relevance and Experience, as moderating effects to previous existing model and proved that there is a strong significant relationships between PCS and CWTF and behaviral intention to use a technology. also moderating effects of job relevance was proved , also found that an individual’s intention to use mobile wireless technology was significantly affected by CWF. Kim claimed that a company must provide technology to their employees to help them perform their jobs. Finally, the individuals adopt a technology if it is within their prior experience, which was found to be significant moderator between CWF and BI. Prior studies based on TAM did not examine the direct link from self-efficacy to behavioral intention assuming the full mediation of perceived ease of use but Khalifa (2008) integrated the theory of planned behavior (Fishbein and Ajzen, 1975; Ajzen and Madden, 1986) and the technology acceptance model (TAM) (Davis, 1989) to explain the adoption of m-commerce as a new technology. He added subjective norm to the main block of TAM as an factors that have positive direct effect on the individual’s intention and Self-efficacy as a positive direct effect on the individual’s intention to adopt m-commerce.

During the years researchers examined different items and their relations with TAM models, they have used original framework of TAM and found relation between them.

In paper by June Lu at el.(2008) was worked on different aspects of new technology in china, such as WMDS, these items are type of technology ,functionality of that technology, interface design, Personal innovativeness in information technology (PIIT), Facilitating conditions, Social influences ,security, trust , privacy and reliability of that technology. The result of this paper showed that intention to use WMDS via mobile phones in China was dependent on an individual’s perceptual beliefs about the target services in terms of their usefulness and eases of use, and also relied on PIIT and mobile trust belief.

According to Dong-Hee Shin(2007) , who work on Wi-Bro acceptance in Korea, users’ perceptions are significantly associated with their motivation to use Wi-Bro. Specifically, perceived quality and perceived availability are found to have significant effect on users’ extrinsic and intrinsic motivation. These factors play as enhancing factors to attitudes and intention.

In 2005, Kim et al. Work on a Value-based Adoption of a technology such as mobile banking. A Value-based Adoption Model (VAM) would be able to capture the monetary sacrifice element and present adoption as a comparison of benefits and costs. By combination of Value-based Adoption Model (VAM) of M-Internet and by integrating the most relevant findings of the technology adoption and value literature, Kim(2005) designed its framework by dividing it to benefits and sacrifices. He suggested that customers’ evaluation of a product includes both cognitive and affective elements, and that products are purchased for their utilitarian and hedonic benefits, so it can be proved that usefulness and enjoyment as the benefit components of perceived value. Perceived sacrifices are both monetary and non-monetary. Monetary spending includes the actual price of the product, and it is generally measured based on customers’ perceptions of the actual price paid. Non-monetary costs usually include time, effort and other unsatisfactory spending for the purchase and consumption of the product. Yang (2004) did a research that examines different items that could affect technology acceptance. Innovation, past adaption behaviour, knowledge, technology cluster, age, gender and specialization were items that were tested in relation with technology acceptance in Yang study. He provided insights into the relationships between PU, PEOU, AT, consumer innovation adoption behaviour, and demographic variables and also offers empirical data to support the suitability of the TAM through examining the emerging M-commerce technology and application. PU is found to predict consumer adoption of M-commerce. Consumer innovativeness introduced into the TAM research to expand the scope of TAM applicability to M-commerce that is yet to accumulate a critical mass in the diffusion process.

According to the Lo´ pez-Nicola´ s, Molina-Castillo, Harry Bouwman (2008), social factors are the important factors that influence on people’s decision to adopt a new technology such as mobile services. They try to evaluate the impact of different determinants on Behavioural Intention in the adoption of advanced mobile services, by combining acceptance models with diffusion theory models theory. In particular, we assumed that social influence may be a key element in people’s intention to use the services and applications. Social influence was defined as the degree to which individuals believed that others thought they should use advanced mobile services. The views of friends and relatives have a significant impact on using mobile services, Lo´ pez-Nicola´ s et al. proved that as a manager, that PEOU and behavioural intention depended significantly on social influences, so for bringing new services and technologies for organisations, notice to the employee’s cultural background is important.

In a study by Amin (2008) who used original TAM model to finding factors affecting the intentions of customers in Malaysia to use mobile banking, proved that bank managers should create favourable perceptions concerning the usefulness and ease of use among mobile phone credit card customers. Creating these positive perceptions might be achieved by offering free seminars to customers about the ease of use of the system – Malaysian consumers often take up marketing initiatives of this type. Additionally, the banks should provide a mini-guide at all branches that provides succinct and cogent information concerning the efficiency, effectiveness and risk-free attributes of the mobile phone credit card system.

In 2009 GU, Lee, Suh, integrated the fragmented models such as the extended TAM and the trust-based TAM into a unified model of mobile banking. They found that self-efficiency is the strongest antecedent of perceived ease-of-use, which directly and indirectly affected behavioural intention through perceived usefulness, also was found the structural assurances are the strongest antecedent of trust, which could increase behavioural intention of mobile banking. Gu et al. research was listed most important work on technology acceptance that used TAM as base. For example Taylor and Todd (1995) selected computing resource center and worked on usefulness, ease of use, attitude and behavioural intention, they worked on Subjective norm and Perceived behavioural control as their study antecedence (complete list of work on TAM was brought in Appendix A)

Hofstede Cultural dimensions:

Culture has been defined according to several perspectives. Definitions go from the most complex and the most comprehensive (e.g. Kluckhohn, 1962) to the most simple (e.g. Triandis, 1972, Hofstede, 1997). According to Kluckhohn (1962), “Culture consists of patterns, explicit and implicit, of and for behavior acquired and transmitted by symbols, constituting the distinctive achievement of human groups, including their embodiments in artifacts” (p.73).

Hofstede cultural dimensions served as the most influential culture theory among social science research (Nokata and Sivakumar, 2001). In addition, Hofstede cultural framework has also received strong empirical support by Sondergaard work (1994).Geert Hofstede research gives insights into other cultures so that it will be more effective when interacting with people in other countries. If understood and applied properly, this information should reduce level of nuisance, concern, and distress. But most important, Geert Hofstede will give the ‘edge of understanding’ which translates to more successful results.

In 1980 Hofstede offered his famous description of cultural dimensions. Geert Hofstede collected and analyzed a large data base of employee values scores of IBM between 1967 and 1973 .it was included more than 70 countries. He first used the 40 largest countries and then extended the analysis to 50 countries and 3 regions. From t


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