THE RELATIONSHIP BETWEEN PERCEIVED USEFULNESS,
PERCEIVED EASE OF USE, PERCEIVED CREDIBILITY, CUSTOMER
ATTITUDE, AND CUSTOMER ADAPTATION OF ELECTRONIC BANKING
IN THE CONTEXT OF HONG KONG SHANGHAI BANKING
CORPORATION BANGLADESH LTD
by
Nushrat Islam
ID: 0120225
An Internship Report Presented in Partial Fulfillment
of the Requirements for the Degree
Bachelor of Business Administration
INDEPENDENT UNIVERSITY, BANGLADESH
December 2005
THE RELATIONSHIP BETWEEN PERCEIVED USEFULNESS,
PERCEIVED EASE OF USE, PERCEIVED CREDIBILITY, CUSTOMER
ATTITUDE, AND CUSTOMER ADAPTATION OF ELECTRONIC BANKING
IN THE CONTEXT OF HONG KONG SHANGHAI BANKING
CORPORATION BANGLADESH LTD
by
Nushrat Islam
ID: 0120225
has been approved
December 2005
______________________
Mr. Rezaur Razzaque Rushdi
Lecturer
School of business
Independent University, Bangladesh
December 6, 2005
Mr. Rezaur Razzaque Rushdi
Lecturer
School of business
Independent University, Bangladesh
Subject: Submission of the internship report.
Dear Sir,
With due respect, I would like to inform you that it is a great pleasure for me to submit the
internship report on “The relationship between perceived usefulness, perceived ease of use,
perceived credibility, customer attitude, and customer adaptation of electronic banking in the
context of Hong Kong shanghai banking corporation Bangladesh ltd (HSBC)” as requirement for
BBA 499 program. Through out the completion of the report, I came to know about many things
regarding the current world of banking and their practices especially in the electronic banking
sector.
Therefore, I firmly believe that this report will meet your approval. I would genuinely appreciate
and keen enough to make further corrections where you think it is necessary. Your kind advice
will encourage me to do further research in future.
Sincerely Yours
.……………………
Ms. Nushrat Islam
Acknowledgement
At the very outset I would like to express my sincere thanks to ALLAH because He has given
me the chance to complete my internship. My gratitude and thanks goes to my respected course
supervisor Mr. Rezaur Razzaque Rushdi, Lecturer, School of Business, Independent University,
Bangladesh for inspiring me to prepare an internship report on “The relationship between
perceived usefulness, perceived ease of use, perceived credibility, customer attitude, and
customer adaptation of electronic banking in the context of HSBC”. I would also like to express
my sincere appreciation to him for his wholehearted support and guidance. I am forever grateful
to Mr. Syed A H Uddin, Manager, H.R., HSBC for giving me the chance to carry out my
internship at his esteemed organization. I am also acknowledging the co-operation and support
that I received from the personnel at HSBC especially officials of the Corporate department. My
sincere thanks also go out to:
•
Mr. Tahsin Ashraf (Client Relationship officer)
•
Md. Siragis Salekin (Client Relationship officer)
There are no doubts that because of their help; I an inexperienced person in the professional
field was able to accomplish the impossible task of compiling such a report. They took time out
of their busy schedule to aid me in my survey for which I can only give them accolades of the
highest degree. This report also has the blessings of many individuals who took part the
questionnaire survey are exclusive electronic banking service clients of HSBC. I would humbly
give thanks to all of them for their tolerance and valuable time. Lastly but not the least, I would
like to thank Mr. Muzahid Akbar, Lecturer, School of business for his guidance.
TABLE OF CONTENTS
Page
List of Tables
List of Figures
Executive summary
1
1.0 Introduction
2
1.1 Statement of the problem
2
1.2 Purpose of the study
3
1.5 Research timeline
3
1.4 Limitations of the study
4
2.0 Literature Review
4
2.1 perceived usefulness
4
2.2 perceived ease of use
5
2.3 perceived credibility
6
2.4 Customer attitude
8
2.5 Customer adaptation of electronic banking
9
2.6 Relationship between perceived usefulness and
Customer adaptation of electronic banking
10
2.7 Relationship between perceived ease of use and
Customer adaptation of electronic banking
11
2.8 Relationship between perceived credibility and
Customer adaptation of electronic banking
12
2.9 Relationship between Customer attitude and
Customer adaptation of electronic banking
3.0 Operational definition
13
15
3.1 Research questions
15
3.2 Hypotheses
16
3.3 Development of conceptual framework
16
4.0 Methodology
16
4.1 Research design
16
4.2 Research Approach
17
4.3 Sampling method
17
4.4 Survey instrument
18
4.5 Pilot test
19
4.6 Data collection
19
4.7 Data analysis
20
5.0 Results
20
5.1 Reliability Coefficient and Descriptive Statistics
20
5.2 Correlation analysis
21
5.3 Regression analysis
22
6.0 Assessment of Hypotheses
23
7.0 Significance of the study
25
8.0 Recommendation
26
9.0 Conclusion
27
References
28
Appendix 1
34
Appendix 2
37
Appendix 3
41
Appendix 4
49
LIST OF TABLES
Page
1. Operational Definition of Measured Variables
15
2. Reliability Coefficient and Descriptive Statistics of perceived usefulness, perceived ease
of use, perceived credibility, customer attitude, and customer adaptation in electronic
banking
21
3. Correlation Matrix for perceived usefulness, perceived ease of use, perceived credibility,
customer attitude, and customer adaptation in electronic banking
22
4. Stepwise regression on Customers’ adaptation in electronic banking
23
LIST OF FIGURE
Page
1. Conceptual Framework of Research Variable and their Relationships
16
Executive summary
This research intends to investigate the relationships of perceived usefulness, perceived ease
of use, perceived credibility, customer attitude, and customer adaptation of electronic banking in
the context of HSBC, one of the leading banking service providers in Bangladesh. It is a
correlation study, which measures the correlation among the study variables such as perceived
usefulness, perceived ease of use, perceived credibility, customer attitude, and customer
adaptation of electronic banking. The respondents for this study was the exclusive corporate
clients of HSBC particularly who avail the electronic banking service. The researcher distributed
86 questionnaires among the respondents. Collected data were analyzed by using the SPSS
version 11.5. Correlation analysis and stepwise regression were performed to assess the
hypothesis. The correlation analysis revealed succinct support to prove almost all the hypothesis
but the stepwise regression provided partial support to the hypothesis. After successfully
analyzed the gathered information, it could be stated that all the measured independent variables
(i.e., perceived usefulness, perceived ease of use, perceived credibility, and customer attitude)
statistically and significantly correlated with customer adaptation of electronic banking. Incase of
stepwise regression analysis the predictor variables, only perceived credibility and perceived ease
of use collectively, can explain 52%, while individually perceived credibility and perceived ease
of use can explain 47% and 5% of customer adaptation of electronic banking respectively.
However, the other two measured variables perceived usefulness and customer attitude failed to
enter into the stepwise regression analysis.
1.0 Introduction
The electronic banking has got greater attention in the recent banking arena. The Internet
based banking service received immense adaptation to the clients. In Bangladesh however,
though lately but has started such kind of electronic banking. Very few particularly two banks
HSBC and Citi NA are providing electronic banking service for exclusive clients. The HSBC
Asia Pacific group represents HSBC in Bangladesh. HSBC opened its first branch in Dhaka in
17th December 1996 to provide personal banking services, trade and corporate services, and
custody services. The Bank was awarded ISO9002 accreditation for its personal and business
banking services, which cover trade services, securities and safe custody, corporate banking,
Hexagon and all personal banking. This ISO9002 designation is the first of its kind for a bank in
Bangladesh. The Hong Kong and Shanghai Banking Corporation Bangladesh Ltd. primarily
limited its operations to help garments industry and to commercial banking. Latter, it is extended
to pharmaceuticals, jute, and consumer products. Other services include cash management,
treasury, securities, and custodial service. Realizing the huge potential and growth in personal
banking industry in Bangladesh, HSBC extended its operation to the personal banking sector in
Bangladesh and within a very short span of time it was able to build up a huge client base.
Extending its operation further, HSBC opened a branch at Chittagong, three branch offices at
Dhaka (Gulshan, Mothijheel and Dhanmondi) and an offshore banking unit on November 1998.
1.1 Statement of the problem
The electronic banking adaptation has gained special attention in academic studies during the
past five years as, for instance, banking journals have devoted special issues on the topic (Waite
& Harrison, 2002; Bradley & Stewart, 2003; Gerrard & Cunningham, 2003; Mukherjee & Nath,
2003; Shih & Fang, 2004). In the past, the conventional focus of electronic banking research has
been on technological development, but this is now shifting to user-focused research. In the
recent study, Wang, Wang, Lin, and Tang (2003) have investigated the relationship between
perceived usefulness, perceived ease of use, and perceived credibility with customer adaptation to
electronic banking in the context of electronic banking sector in Taiwan.
Moreover, the study of Wang et al. (2003) suggested that overall customer attitude, risky ness,
and screen design of the system could be taking into account to investigate further research. In
the current study, therefore, the researcher will utilize the study of Wang et al. (2003) with an
added variable customer attitude to investigate such relationship. In another study conducted by
Pikkarainen, Pikkarainen, Karjaluoto, and Pahnila (2004) pointed out that the overall customer
attitude needed to be considered to investigate such relationship. There is strong evidence that
the customer attitude is positively related to customer adaptation (Tan & Teo; 2000; Bobbitt &
Dabholkar, 2001; Gerrard & Cunningham, 2003; Ruyter, 2004). Few other empirical studies
suggested that the integrating role is due to perceived credibility and customer attitude being the
outcome of internal organizational policies and practice that leads to customer value, satisfaction,
and more electronic banking service usages (Luo & Strong, 2000; Pavlou, 2001; Singh, 2001).
Hence, in the current study, the researcher will utilize customer attitude as an added variable to
the study of Wang et al. (2003) to investigate such relationship in context of electronic banking
service providers in Bangladesh.
The problem statement, therefore, is stated as follows: the present study will investigate the
relationship between perceived usefulness, perceived ease of use, perceived credibility, customer
attitude, and customer adaptation to electronic banking in the context of HSBC in Bangladesh.
1.2 Purpose of the study
The purpose of the study is simply to present and test a model that identifies the relationship
between perceived usefulness, perceived ease of use, perceived credibility, customer attitude, and
customer adaptation of electronic banking within the context of HSBC in Bangladesh.
1.3 Research Timeline
2005
August
Research Proposal Writing
2005
September
Literature Review
2005
October
Development of conceptual framework
2005
October
Data collection procedure
2005
November
Data analysis and interpretation of the findings
2005
November
Final redraft of complete manuscript.
1.4 Limitations of the study
There will be numbers of limitations in this study. The respondent of the population will be
limited in terms of size and composition. Since, the researcher has conducted census, there were
lot of chances that all the respondents will reluctant to fill up the questionnaire. First, data
collection is restricted within Dhaka city only, which may fail to represent the actual scenario of
the relationship between measured variables. Second, the researcher is only considering the
corporate clients of the HSBC and thus, is not including the other clients. Finally, there are many
other factors which can influence customer adaptation of electronic banking such as computer
self efficacy, risky ness, screen design, compatibility; however, the researcher did not consider
those because of the simplicity of the research.
2.0 Review of related literature
Perceived Usefulness:
The importance of perceived usefulness has been widely recognized in the field of electronic
banking (Davis, Bagozzi, & Warshaw, 1989; Polatoglu & Ekin, 2001; Liao & Cheung, 2002).
According to them usefulness is the subjective probability that using the technology would
improve the way a user could complete a given task. Based on theories in social psychology,
such as the theory of reasoned action (TRA) (Ajzen & Fishbein, 1980; Fishbein & Ajzen, 1975)
and the theory of planned behavior (TPB) (Ajzen, 1985), the technology acceptance model
(TAM) has been validated as a powerful and parsimonious framework (Davis, 1989; Davis et al.,
1989). According to the TAM, perceived usefulness is the degree to which a person believes that
using a particular system would enhance his or her job performance. On the word of Davis,
Bagozzi, and Warshaw (1992), perceived usefulness refer to consumers’ perceptions regarding
the outcome of the experience. Perceived usefulness is defined as the individual’s perception that
using the new technology will enhance or improve her/his performance (Davis, 1993).
Perceived usefulness denoted to the prospective user’s subjective likelihood that the use of a
certain application would increase his or her performance (Al-Gahtani, 2001). Similarly,
Mathwick, Rigdon, and Malhotra (2001), defined perceived usefulness as the extent to which a
person deems that a particular system will boost his or her job recital. In the same way, perceived
usefulness is defined as consumers’ perceptions of functional and utilitarian dimensions (Menon
& Kahn, 2002; Childers, Carr, Peck, & Carson, 2001). Bhattacherjee (2002), in his empirical
study, found that one’s willingness to transact with an electronic firm is considered as perceived
usefulness. He also added that the perceived usefulness might not be derived only from prior
familiarity with the firm, but also from calculative, institutional and identification about the firm.
Perceived usefulness refers to consumers’ perceptions that using the internet as a banking
medium enhances the outcome of their banking experience (Venkatesh, 2000; Moutinho &
Smith, 2000). Suganthi and Suganthi (2001) carried out research in Malaysia when Internet
banking in that country was only six months old. They found Perceived Usefulness is the former
part of accessibility, which is part of features of web site.
Recently, Pikkarainen et al. (2004) applied TAM in Finland and they distinct perceived
usefulness as a determinant of actual behaviour which encouraged the user of the twenty-first
century banking to use more innovative and user-friendly self-service technologies that give them
greater autonomy in performing banking transactions, in obtaining information on financial
advices, and in purchasing other financial products. However, according to Gerrard and
Cunningham (2003), the perceived usefulness depend on the banking services such as to check
bank balances, to apply for a loan, to pay utility bills, to transfer money abroad, and to obtain
information on mutual funds. Hence, for the current study, the researcher will use the definition
of Davis' (1993) to define perceived usefulness.
Perceived ease of use:
Some previous researchers have noted perceived ease of use as the extent to which a person
accept as true that using a exacting method would be at no cost (Davis et al., 1989; Mathieson,
1991; Gefen & Straub, 2000; Al-Gahtani, 2001). At first Rogers (1962) affirmed, perceived ease
of use is the term that represents the degree to which an innovation is perceived not to be difficult
to understand, learn, or operate. He further stated that perceived ease of use is the degree to
which consumers perceive a new product or service as better than its substitutes (Rogers, 1983).
According to Mathieson (1991), the perceived ease of use is the consumer’s perception that
banking on the internet will involve a minimum of effort. Similarly, Davis and Venkatesh (1996)
identified perceived ease of use as the degree to which a user would find the use of a particular
technology to be gratis from exertion on their part. Ease of use refers to their perceptions
regarding the process leading to the final electronic banking outcome (Igbaria, Guimaraes, &
Davis, 1995). In a simplified manner, it can be stated that ease of use is how easy the Internet as
a banking medium is to use (Gefen & Straub, 2000).
TAM (Davis, 1989; Davis et al., 1989) posits perceived ease of use as the extent to which a
person believes that using a particular system will be free of effort. Daniel (1999) pointed out the
perceived ease of use as one’s experience how conveniently uses a technology. Drew on the
concept of this, Venkatesh (2000) stated that with increasing direct experience with the target
system, individuals adjust their system-specific ease of use to reflect their interaction with the
system. He added that in the case of electronic banking, savings of time, money, and
convenience have been quoted as perceived ease of use.
The degree to which an innovation is ease to understand or use could be considered as
perceived ease of use (Zeithaml, Parasuraman, & Malhotra, 2002). At the same time, perceived
ease of use is the extent to which an innovation is ease and communicable to consumers (Snel,
2000). In association with this Karjaluoto, Mattila, and Pento (2002) acknowledged that
simplicity or complexity is the extent to which consumers perceive a new innovation as easy or
difficult to understand or use.
Consult (2002) noted that perceived ease of use refers to the ability of consumers to
experiment with a new innovation and evaluate its benefits easily. He also affirmed that the
drivers of growth in electronic banking are determined by the perceived ease of use which is a
combination of convenience provided to those with easy internet access, the availability of
secure, high standard electronic banking functionality, and the necessity of banking services.
Therefore, for the current study the researcher will utilize the definition of Davis (1989) to
define perceived ease of use.
Perceived credibility:
Bauer (1960) originally introduced the concept of perceived credibility in terms of the
confidence and consequences associated with a consumer’s actions. Consumer researchers
defined perceived credibility as a consumer’s perceptions of the assurance and favorable
consequences associated with buying a product (or service) (Cunningham, 1967). According to
Jacoby and Kaplan (1972), perceived credibility is defined as the degree to which a user feels the
certainty and pleasant consequences of using an electronic application service, when there is no
financial risk, physical risk, functional risk, social risk, time-loss risk, opportunity cost risk, and
information risk.
Drawing on literature in social psychology (Larzelere and Huston, 1980) and marketing,
Doney and Cannon (1997) ascertained the perceived credibility as trust. The perceived
credibility is the extent to which one partner believes that the other partner has the required
expertise to perform the job effectively and reliably (Ganesan, 1994). Likewise, Zaheer,
McEvily, and Perrone, (1998) stated that one’s trustworthiness or credibility in an electronic bank
might not be derived only from prior familiarity with the bank, but also from calculative,
institutional and identification and beliefs about the bank.
Credibility is associated with outcome beliefs such as have of knowledge about the
distribution of potential outcomes and the controllability of outcome attainment (Luo & Strong,
2000). On the other hand, Mathieson, Peacock, and Chin (2001) stated that perceived credibility
is the consumer’s subjective expectation of not suffering a loss in pursuit of a desired outcome.
However, credibility is difficult to capture objectively (Pavlou, 2001). As said by Singh (2001),
perceived credibility is defined through some of the measures that are available to banks include
secure socket layer encryption methods to protect data being transmitted from the bank to the
customer and vice versa, regular upgrades of firewall hardware and software, and digital
signatures.
Consequently, perceived credibility is used as a new construct to reflect the security and
privacy concerns in the adaptation of Electronic banking (Ba & Pavlou, 2002). In the context of
electronic banking, perceived credibility refers to the security and reliability of transactions over
the Internet (Goldfinger, 2001). Webchek (2002) also reported that there is a perceived lack of
safety in electronic transactions. Perceived security is defined as the extent to which one believes
that the electronic banking is secure for transmitting sensitive information (Moon and Kim,
2001). Koufaris (2002) also identifies security as a factor influencing customer adaptation.
Security encompassed low risk associated with electronic transactions, safeguarding personal
information, and safety in completing electronic transactions (Koufaris, 2002). The perceived
lack of security on electronic banking is definitely a stumbling block (Chen, Gillenson, &
Sherrell, 2002).
Using the technology acceptance model as a theoretical framework, this study introduced
perceived credibility as a new TAM factor to reflect the user’s security and privacy concerns in
the adaptation of electronic banking. Hence, from the previous discussion the researcher will opt
the definition of Jacoby and Kaplan (1972) to define perceived credibility.
Customer attitude:
Empirical studies related to diffusion of technological innovations have expanded the use of
the TAM model to include attitudes as defined by the Theory of Reasoned Action (Davis et al.,
1989; Karahanna, Straub, & Chervany, 1999; Jayawardhena & Foley, 2000; Venkatesh & Morris,
2000; Karjaluoto et al., 2002). At first, Lancaster (1966) noted that attitude is the driver of
consumer utility or attributes. Triandis, (1979) described attitude as an individual’s positive or
negative behaviour towards innovation adaptation. In that study, attitude portrayed the
perceptions on the usefulness of electronic banking, adaptation features, bank electronic features,
risk and privacy, and personal preferences.
TAM suggests that attitude is based on the salient beliefs that a person has about the
consequences of a given behavior and his or her evaluation of those consequences. Davis (1993)
put forward that consumers’ attitude toward electronic banking first associated with the direct
possessions of relevant electronic banking features. Electronic banking features can be
consumers’ attitudes of functional and utilitarian dimensions, like ease of use and usefulness
(Menon & Kahn, 2002; Childers et al., 2001; Mathwick et al., 2001). More specifically,
(Polatoglu & Ekin, 2001) suggested that customer attitude is composed of one’s attribute beliefs
about the object and perceived importance (weight) of having that attribute in making the
decision to adopt.
In the electronic banking context, consumers attitude is assorted in terms of perceptions
regarding product information, form of payment, delivery terms, service offered, risk involved,
privacy, security, personalization, visual appeal, navigation, entertainment and enjoyment (Burke,
2002). As whispered by Consult (2002), the attitudes of growth in electronic banking were the
combination of convenience provided to those with easy internet access, the availability of
secure, high standard electronic banking functionality, cost savings and the necessity of banking
services. According to Howcroft, Hamilton, and Hewer (2002), attitude of users and non-users
towards electronic banking is the reflection of a number of factors such as technology, security,
convenience, prior computer/new technology experience, prior personal banking experience and
possession of a credit/debit card and a WAP/CDMA.
On the contrary, an attitude has been defined as a psychological tendency that is expressed by
evaluating a particular entity with some degree of favor or disfavor (Curran, Meuter, &
Surprenant, 2003). Recently, Pikkarainen et al. (2004) defined attitude as the base of
compatibility, which includes, for instance, the preference for self-service, technology, lifestyle,
as well as current branch bank service. In terms of demographic attitudes, consistent with the
previous definition Singh’s (2004) acknowledged that attitude towards electronic banking is the
characteristics of typical users, which is influenced by age and gender but not with educational
level. Thus, in the current study, the researcher will employ the definition of Howcroft et al.
(2002) to define customer attitude.
Customer adaptation:
Since the mid-1990s, there has been a fundamental shift in electronic banking and currently 55
percent of the private banking customers in Finland use it (Association, 2003). Among the
different models that have been proposed, TAM (Davis, 1989; Davis et al., 1989) is adapted from
TRA (Ajzen & Fishbein, 1980; Fishbein & Ajzen, 1975) which stated that customer adaptation
behavior is determined by the intention to use a particular system, which in turn is determined by
the perceived usefulness and perceived ease of use of the system.
Liao and Cheung (2002) utilized an alternative research approach in Hong Kong who
investigated the adaptation of virtual banking within the framework of the TPB, which assumes
that customer adaptation is determined by intention to perform the behaviour. However, factors
affecting the adaptation of a new information technology are likely to vary with the technology,
target users, and context (Moon & Kim, 2001). As whispered by Sohail and Shanmugham
(2003), customer adaptation describes beliefs about having necessary resources and opportunities
for an individual’s intention to perform. These are facilitating conditions, which refer to the
availability of resources, i.e. the technological resources and infrastructure needed to engage in
the adaptation (Triandis, 1979).
Lee and Allaway (2002) suggested that the adaptation of electronic banking depends on the
service firm’s resource management by lowering delivery costs and by releasing service
personnel to provide better and more varied service. The current trend reflects a decrease in the
number of branch transactions and an increase in the number of electronic transactions
(Mukherjee & Nath, 2003). Some banks are segmenting their markets by developing lower cost
delivery systems in order to increase customer adaptation. Cost savings have been the
compelling reason for outsourcing by many banks (Bradley & Stewart, 2003). Adaptation of
electronic banking is important not only in terms of reducing costs and improving
competitiveness but also in terms of a bank's ability to retain the existing customer base and to
attract new customers (Gerrard & Cunningham, 2003; Rotchanakitmnuai & Speece, 2003;
Akinci, Aksoy, & Atilgan, 2004).
Recently, Shih and Fang (2004) affirmed that electronic banking adaptation is defined as an
internet portal, through which customers can use different kinds of banking services ranging from
bill payment to making investments. The adaptation of electronic banking has been studied
through the use of various models. Recently, Pikkarainen et al. (2004) applied the TAM in
Finland and found that system adaptation is determined by perceived usefulness and perceived
ease of use, which are related to attitude and thereby to actual use. Hence, for the current study,
the researcher will utilize the definition of Sohail and Shanmugham (2003) to define customer
adaptation.
Relationship between perceived usefulness and customer adaptation of electronic banking:
There is also extensive research that provides evidence of the significant effect of perceived
usefulness on adaptation intention (Agarwal & Prasad, 1999; Davis et al., 1989; Hu, Chau,
Sheng, & Tam, 1999; Jackson, Chow, & Leitch, 1997; Venkatesh, 2000; Venkatesh & Davis,
2000; Venkatesh & Morris, 2000). Tan and Teo (2000) suggested that the perceived usefulness is
an important factor in determining adaptation of innovations. This is supported by Rogers’ study
of Innovation Diffusion Theory that found that the perceived usefulness of an innovation is
positively related to its rate of adaptation (Venkatesh & Morris, 2000). As a consequence, the
greater the perceived usefulness of using electronic banking services, the more likely that
electronic banking will be adopted (Polatoglu & Ekin, 2001).
Empirical studies on the adaptation of technologies have found consistently positive
relationships between usefulness and the adaptation of a variety of specific technologies, ranging
from computer software to e-mail (Chau & Hu, 2001). TAM also supports this link (Davis et al.,
1989). Supplementary, Venkatesh and Davis (2000) introduced the second version of TAM,
which explain how subjective norms and cognitive instrumental processes affect perceived
usefulness and perceived usefulness than affect adaptation.
There also exists pragmatic evidence of a link between perceived usefulness and adaptation
(Venkatesh, 2000; Agarwal, Erramilli, & Chekitan, 2003; Gefen & Straub, 2000). On the other
hand, Eastin and LaRose, (2000) recognized the link and stated that high degrees of computer and
Internet self-efficacy proved to have an attenuating effect on the relationship between usefulness
and attitude toward adopting the Internet. Accordingly, parallel findings came from Moutinho
and Smith (2000) who studied the behaviour of established bank customers in the UK and
concluded that ease of banking and usefulness two important expectations for adaptation.
Bhattacherjee (2002) found that one’s willingness to transact with an electronic firm might be
predicted by perceived usefulness. In a particular, Wang et al. (2003) found that perceived
usefulness significantly positively effect Taiwan people’s intentions to adopt electronic banking
systems. In general, a higher level of perceived usefulness is associated with more internet
purchasing (O’Cass and Fenech, 2003). Recently, Pikkarainen et al. (2004) applied TAM in
Finland and found that perceived usefulness of, and information on, electronic banking were the
main factors influencing customer adaptation. Also recently, Shih and Fang (2004) tested the
both TPB and TRA models in Taiwan and found that two technological aspects of the Web site
interface, namely perceived ease of use and perceived usefulness significantly affect customer
adaptation intentions.
Relationship between perceived ease of use and customer adaptation of electronic banking:
Extensive research over the past decade provides evidence of the significant effect of
perceived ease of use on usage intention, either directly or indirectly (Venkatesh, 1999, 2000;
Venkatesh & Davis, 1996, 2000; Venkatesh & Morris, 2000). In the beginning, Rogers' (1962)
analysis one of the factors that leads to adaptation of innovative service/product by customers is
the ease of use. Similarly, Scarbrough and Corbett (1992) found that the understandings of
consumers to be an important element in the diffusion of innovative technology. Specifically,
Report (1997) and Chin and Gopal, (1995) affirmed that higher perceived ease to use internet will
favorably influence adaptation of electronic banking. In his study, Cooper (1997) found ease of
use as one of the three important characteristics from the customer's perspective for adaptation of
innovative service. Daniel (1999) identifies ease of use as one of the factors for customer
adaptation in her study of electronic banking in the UK and Ireland.
Ease of use is believed to be one of the fundamental factors in determining the adaptation and
use of various corporate information technologies (Davis, 1989, 1993). According to TAM,
adaptation is influenced by ease of use, because the easier a technology is to use, the more useful
it can be (Venkatesh, 2000; Dabholkar, 1996).
Suganthi and Suganthi (2001) carried out research in Malaysia when electronic banking in that
country was only six months old. They found electronic ease of use as a significant adaptation
factors. Bhattacherjee (2002) found that one’s willingness to adopt with an electronic firm might
be predicted by additional variables such as perceived ease of use. This is consistent with
Howcroft et al. (2002) study, claiming that the most important factor in encouraging the use of
electronic banking is perceived easy of use. Probing those factors that lead to behavioural
intention, the authors found evidence that along with some other factors, perceived ease of use
had a significant positive effect on Taiwan people’s intention to adopt electronic banking (Wang
et al., 2003).
Recently, Gefen, Karahanna, & Straub (2003) have empirically found that two technological
aspects of the interface, namely perceived ease of use and perceived usefulness significantly
affect customer adaptation intentions. Voss (2003) has proposed three key quality factors relating
to customer adaptation in a virtual environment – ease of use, information and status, and
configuration and customization. Santos (2003) has uncovered five dimensions of internet
systems adaptation – such as ease of use, appearance, linkage, structure and layout, and content.
In recent times, Pikkarainen et al. (2004) applied the traditional TAM in Finland and found that
system use is determined by perceived ease of use, which are related to attitude and thereby to
actual adaptation.
Relationship between perceived credibility and customer adaptation of electronic banking:
According to many banking studies conducted during the past years, perceived credibility
were found to have a relationship with the adaptation (Black, Lockett, Ennew, Winklhofer, &
McKechnie, 2002; Giglio, 2002; Howcroft et al., 2002). Liebermann and Stashevsky (2002)
identified misuse of personal information as the major risk elements associated with electronic
banking by a sample of Israeli consumers, and that the degree of perceived credibility was in turn
related to adaptations and usage experience with the internet, findings corroborated in other
studies (Evans, Wedande, Ralston, & van’t Hul, 2001; Zott, Amit, & Donlevy, 2000; Sim & Koi,
2002).
It is generally recognized that perceived credibility plays a positive role in individuals’
decision to adopt a new technology including electronic banking (Walker, Craig-Lees, Hecker, &
Kent, 2000). Simultaneously, Kim, Prabhakar, and Kim (2001) and Pavlou (2001) suggest that
perceived credibility has the higher ability to predict and explain the intention of users to adopt
electronic banking. Featherman and Pavlou’s (2002) study, for example, integrates Perceived
Credibility Theory and Technology Acceptance Model (Davis et al., 1989), and identifies a
research model where perceived credibility positively influences intentions to electronic banking.
Reynolds (2000) and Suh and Han, (2002) identifies the level of credibility as an important
characteristic from a consumer's perspective in the adaptation of electronic banking. Credibility
is identified as the biggest obstacle to adaptation (Kobsa, 2002).
Safety was also reported to be a big obstacle for electronic banking (Wong, Yen, & Fang,
2004). In the study of Singapore consumers, Gerrard and Cunningham (2003) found security
concerns of electronic banking high in both adopters and non-adopters. However, it has been
found that credibility perception associated with transaction security is positively related to
willingness to make internet adaptations (Tan & Teo, 2000; Polatoglu & Ekin, 2001; Black et al.,
2002). Howcroft et al. (2002) found that security concerns were an obstacle to the adaptation of
electronic banking among Australian consumers. Consistently, Mattila, Karjaluoto, and Pento
(2003) support it for Finland. For corporate customers, however, the main barrier for adaptation
was seen as security concerns (Rotchanakitumnuai and Speece, 2003). In a particular, Wang et
al. (2003) found that perceived credibility affected directly consumer adaptation of electronic
banking systems.
Relationship between customer attitude and customer adaptation of electronic banking:
Previous studies have used attitudinal variables to determine the adaptation or non-adaptation
of electronic banking (Swinyard & Ghee, 1985; Moutinho & Meidan, 1989; Iversen &
Rugimbana, 1994; Rugimbana, 1995). TAM suggests that a prospective user’s overall feelings or
attitudes toward using a given technology-based system represent major determinants as to
whether or not he/she will ultimately use the system (Davis, 1993). TRA and TPB also assume
that individual adopting is motivated by behavioral attitudes (Davis et al., 1989; Liao, Shao,
Wang, & Chen, 1999; Tan & Teo, 2000).
Understanding the determinants of consumers’ attitude, it is argued that this attitude has a
strong, direct, and positive effect on consumers’ intentions to actually use the new technology or
system (Bobbitt & Dabholkar, 2001). Similarly, Lee and Turban (2001) concurs that there is a
strong relationship between attitude and consumers’ intention to adopt electronic banking and
added that the situational factor time pressure has an attenuating impact on the relationship.
Wolfinbarger and Gilly (2003) also support this relationship and added two more situational
factors; these are need for special items and attractiveness of alternatives. In general, the level of
trust, interpersonal as well as institutional, is positively related to consumers’ attitude, which is
also related to intention to bank on the Internet (Gerrard & Cunningham, 2003).
However, factors affecting the adaptation of a new information technology are likely to vary
with the technology, target user’s attitude, and context (Moon and Kim, 2001). In the same year,
Aladwani (2001) highlighted consumer attitudes as one of the main future challenges in the
adaptation of electronic banking by Kuwaiti banks. The consumer research also confers
empirical evidence about how consumer behaviour, attitude, motivation affect consumer
adaptation of electronic banking (Karjaluoto et al., 2002). Among the variables found to affect
whether or not consumers engaged in electronic banking adaptation, customer attitudes toward
electronic banking is one of them (O’Cass and Fenech, 2003). As whispered by Akinci et al.
(2004), the adaptation of electronic banking is more determined by customer attitude than by
seller offerings. In the same way, personal attitudes have been found to affect customer
adaptation of electronic technologies (Kolodinsky, Hogarth, & Hilgert, 2004) while consumer
traits, Monsuwe´, Dellaert, and Ruyter, (2004) suggest, affect attitudes toward electronic banking
and their intention to bank online.
3.0 Operational Definition
Table 1: Operational Definition of Measured Variables
Measured Variables
Operational Definitions
Perceived usefulness
Will be operationally defined by Pikkarainen et al. (2004).
Customer ease of use
Will be operationally defined by Pikkarainen et al. (2004).
Perceived credibility
Will be operationally defined by Pikkarainen et al. (2004)
Customer attitude
Will be operationally defined by Shih and Fang (2004)
Customer adaptation of electronic
Will be operationally defined by Shih and Fang (2004)
banking
3.1 Research questions
This study proposed to investigate the following research questions:
1. Is there any significant relationship between perceived usefulness and customer
adaptation of electronic banking in the context of HSBC in Bangladesh?
2. Is there any significant relationship between perceived ease of use and customer
adaptation of electronic banking in the context of HSBC in Bangladesh?
3. Is there any significant relationship between perceived credibility and customer adaptation
of electronic banking in the context of HSBC in Bangladesh?
4. Is there any significant relationship between customer attitude and customer adaptation of
electronic banking in the context of HSBC in Bangladesh?
3.2 Hypotheses
The hypotheses derived from the research questions are:
1. There is a significant relationship between perceived usefulness and customer adaptation
of electronic banking in the context of HSBC in Bangladesh.
2. There is a significant relationship between perceived ease of use and customer adaptation
of electronic banking in the context of HSBC in Bangladesh.
3. There is a significant relationship between perceived credibility and customer adaptation
of electronic banking in the context of HSBC in Bangladesh.
4. There is a significant relationship between customer attitude and customer adaptation of
electronic banking in the context of HSBC in Bangladesh.
3.3 Development of Conceptual Framework
The conceptual framework for the proposed study is presented below:
•
Perceived usefulness
•
Perceived ease of use
•
Perceived credibility
•
Customer attitude
Customer
adaptation of the
electronic banking
Figure1: Conceptual Framework of Research Variable and their Relationships.
4.0 Research Methodology
Research Design
The representation of the proposed framework (figure 1) depicted the pattern and structure of
relationships among the set of measured variables. The research questions and hypotheses clearly
support this model. Hence, the purpose of the study is to measure correlations among variables.
The present study investigated the relationship between perceived usefulness, perceived ease
of use, perceived credibility, customer attitude, and customer adaptation of electronic banking
within the context of HSBC in Bangladesh. Research that studies the relationship between two or
more variables is also referred to as a correlational study (Cooper & Schindler, 2003). That is
why a correlational research design had been selected in order to find out the appropriate answers
to the research questions and to test the hypotheses. The model (Figure 1) also suggested this
type of design. Here perceived usefulness, perceived ease of use, perceived credibility, and
customer attitude were being considered as independent variables and customer adaptation of
electronic banking was being considered as a dependent variable. The researcher used a
correlational study to establish the existence of relationships between the measured variables. In
this research, the researcher intended to identify whether any relationships exists between these
measured variables or not. A Correlational study provides a measure of the degree between two
or more variables. Therefore, the present study was characterized as a correlational study.
Research Approach
To investigate research questions, the researcher gathered information from the existing
electronic banking users particularly the corporate user of HSBC. Moreover, data was collected
through questionnaire survey. All the participants were given a letter from the researcher
explaining the context of the research focus. All participation was voluntary. If the participants
want to withdraw, they were free to do so at any time.
Sampling Method
The study was conducted only in Dhaka city due to time and budget constraints. The
population was all the electronic banking service clients of HSBC in Dhaka city. The sampling
frame for the clients was the official register list for the electronic banking users, which was
provided by HSBC.
First of all, the current electronic banking service users of HSBC banking are very small;
therefore, the researcher has conducted the census. Zikmund (1994) pointed out that an
investigation of all the individual elements that make up a population is known as census.
According to the HSBC official register, there are approximately 112 electronic baking service
clients exists in the Dhaka city. The researcher distributed the questionnaire to all the clients.
However the total response rate was 76.78% i.e., from total 112, 86 responses were obtained.
Thus, because of limited number of users, the researcher conducted a census.
Survey Instrument
To gather data, the researcher used questionnaires. The questionnaire survey was the most
effective method for this study to collect the data for the following reasons•
Respondents anonymity could be maintained
•
The researcher conducted survey on 112 respondents. It was not possible to conduct
personal interview because of time limitation. Therefore, a questionnaire survey was the
most appropriate one for the current study.
•
The postal system of the country is very slow. Hence, mail survey was time consuming
for this study.
•
The data gathered through questionnaire was easy to put in quantitative analysis.
•
It takes less time to fill up a questionnaire. Therefore, the customers were not reluctant in
providing accurate data.
A Structured questionnaire was used in this study to collect data from customers. The
researcher utilized five different sets of questionnaires to measure the variables. In the
questionnaire, there were five sections, which was perceived usefulness, perceived ease of use,
perceived credibility, customer attitude, and finally customer adaptation of electronic banking.
Perceived usefulness was measured by using 5 items (Section I, question 1 to 5) developed by
Pikkarainen et al. (2004). This scale had reported reliabilities of the items to be above 0.86.
Perceived ease of use was measured by using 5 items (Section II, question 6 to 10) developed
by Pikkarainen et al. (2004). This scale had reported reliabilities of the items to be above 0.90.
Perceived credibility was measured by using 5 items (Section III, question 11 to 15) developed
by Pikkarainen et al. (2004). This scale was used by Wong et al., 2004 and had reported
reliabilities of the items to be above 0.80.
Customer attitude was measured by using 3 items (Section IV, question 16 to 18) developed
by Shih and Fang (2004). This scale was used by Pikkarainen et al. (2004) and had reported
reliabilities of the items to be above 0.89.
Customer adaptation of electronic was measured by using 3 items (Section V, question 19 to
21) developed by Shih and Fang (2004). This scale was used by Akinci et al. (2004) and
Pikkarainen et al. (2004) and had reported that the reliabilities of the items to be above 0.88.
However, for all of these constructs, items was adopted in the context of HSBC in Bangladesh
for the sake of simplicity to measure appropriately, which was developed by the previous
researchers. For all of these variables, the previous researchers had used 5 points Likert scale
starting from 1 for strongly disagree to 5 for strongly agree. Therefore, the researcher of present
study also used 5 point Likert scale to measure all these variables.
Pilot test of questionnaires
According to Cooper and Schindler (2003), a pilot test is conducted to detect weakness in
design and instrument and to provide proxy data for selection of probability samples. The
researcher had conducted a pretest to evaluate all aspects of the questionnaire, including clarity,
bias, question content, wording, sequence, form, layout, question layout, difficulty of the question
and relevance to research variable. Moreover, through pre-testing, the researcher also determined
the reliability and validity of the questionnaires.
The researcher intended to conduct a pretest to evaluate the questionnaire for clarity, bias,
ambiguous and relevance to the organizational setting of HSBC. According to Burns and Bush
(1998), a group size of pilot testing may vary from 5-50 respondents. Therefore, the researcher
selected 10 users from a convenient way to conduct the pilot survey. Hence, the researcher
employed only 10 respondents in the pilot survey because of time limitations.
Data collection
The present research is a unique one for HSBC. As a result, a secondary source of data was
not available for the present study. Therefore, the researcher required primary data to investigate
research questions. To collect data from the primary sources, the researcher used the
questionnaire survey method. This method is commonly used in consumer surveys to collect data
from primary sources. The questionnaires were distributed among the customers through the
researchers’ friends and relatives. Numerous reasons were accounted for the choice of this
research method. First, it allowed large amounts of information to be obtained at a relatively low
cost. Second, more accurate responses were obtained because interviewer bias was avoided.
Finally, the number of non-usable questionnaires was reduced since the personal contacts tend to
make respondents more cooperative in completing the questionnaires.
Data analysis procedure
First of all, Pearson’s Correlational analysis was used to find out whether any relationship
exists between the independent and dependent variables. A Correlational analysis is the
statistical tool that can be used to describe the degree to which one variable is linearly related to
another.
Since the proposed study was a correlational study, after collecting the data the researcher
used a correlational matrix to identify whether the relationships exist between the measured
variables or not. The researcher was interested in finding out whether the conceptually newer
measured variables add anything to the dependent variables compared to older variables. As
investigator wished to determine whether some conceptually newer measures add anything to the
dependent variables compared to older, it was appropriate to use stepwise regression. Moreover,
the effort to screen out redundant variables during the model building process and to provide a
model in which all variables, individually and collectively, provide a meaningful contribution
toward the explanation of the response variable (dependent variable) was accomplished by using
a stepwise regression analysis option.
Hence, stepwise regression was the most effective tool to analyze the data to find out whether
the conceptually newer measured variables add anything to the dependent variables compared to
older variables.
For the current study, the researcher utilized the Statistical Package for Social Science (SPSS)
software version11.5 as a statistical data analysis tool as it offered greater feasibility in data
analysis and visualization.
5.0 Results
Reliability Coefficient and Descriptive Statistics
The reliability coefficients, means, and standard deviations of all the constructs in the current
study were displayed in Table 2. The coefficient alphas for the different constructs were
computed using the reliability procedure in SPSS (version 11.5). Nunnally (1978) suggested that
for early stages of any research the reliability of .50-.60 is sufficient. The reliabilities of all the
constructs in this study found to be above the standard set by Nunnally (1978).
Table 2
Reliability Coefficient and Descriptive Statistics of perceived usefulness, perceived ease of use,
perceived credibility, customer attitude, and customer adaptation in electronic banking
Scales
Number of items
Alpha
M
SD
Perceived usefulness
5
0.63
4.31
0.39
Perceived ease of use
5
0.70
4.25
0.46
Perceived credibility
5
0.79
4.49
0.45
Customer attitude
3
0.67
4.27
0.54
Customer adaptation
3
0.60
4.39
0.45
Note: n = 86
Mean scores have been computed by equally weighting the mean scores of all the items. On a
five-point scale, the mean score for Perceived usefulness is 4.31 (sd = .39). The mean score for
Perceived ease of use is 4.24 (sd = .46). The mean score for Perceived credibility is 4.49 (sd =
.45). The mean score for Customer attitude is 4.27 (sd = .54). And finally, the mean score for
Customer adaptation is 4.39 (sd = .45). The mean scores of measured variables are ranging 4.254.50; however, among them the perceived credibility’s mean score is the highest. It indicates that
consumers’ perception about the HSBC electronic banking is very high.
Correlation analysis
A correlation analysis was conducted on all variables to explore the relationship between
variables particularly relationships among the independent variables with dependent. The
bivariate correlation procedure was subject to a two tailed of statistical significance at two
different levels highly significant (p<.01) and significant (p<.05).
Table3
Correlation Matrix for perceived usefulness, perceived ease of use, perceived credibility,
customer attitude, and customer adaptation in electronic banking
PER_USEF PER_EASE PER_CRE CUS_ATTI CUS_ADPT
PER_USEF
PER_EASE
PER_CRE
-
.51**
-
.19
.53**
.29**
.29**
.49**
.41**
.38**
.68**
-
CUS_ATTI
-
.39**
CUS_ADPT
-
Note: *p < .05, **p < .01.
The result of correlation analysis for all the variables is shown in Table 3. It examines the
correlations among perceived usefulness, perceived ease of use, perceived credibility, customer
attitude, and customer adaptation of electronic banking of HSBC.
The variable, perceived usefulness significantly and positively correlated with the dependent
variable customer adaptation (r = .29, p< .01). Perceived ease of use was found significantly and
positively correlated with customer adaptation (r = .41, p< .01). The variable, perceived
credibility was significantly and positively correlated with customer adaptation (r = .68, p< .01).
Finally, customer attitude was also significantly and positively correlated with customers’
adaptation (r = .39, p< .01).
Regression Analysis
Stepwise regression
Stepwise regression analyses were performed to identify the relationship between perceived
usefulness, perceived ease of use, perceived credibility, customer attitude, and customer
adaptation of electronic banking in HSBC.
Table 4
Stepwise regression on Customers’ adaptation in electronic banking
Variable
B
SE B
β
Step 1
Perceived credibility
∆R
.467
.683
.080
.684***
Step 2
Perceived credibility
R2
.518
.616
.079
.616***
.051
Perceived Ease of use .230
.078
.235**
*p<.05, **p<.01, ***p<.001.
Table 4 depicts that in HSBC, Perceived credibility (p<.001), Perceived Ease of use
(p<.01), were found to be statistically significantly related with customer adaptation of electronic
banking. Perceived usefulness and customer attitude failed to enter into the regression equation
that indicates that they are not significantly associated with customer adaptation in electronic
banking. Significantly related two predictor variables together explained 52% of the variance in
customer adaptation of electronic banking. However, Perceived credibility and perceived ease of
use separately explained about 47% and 5% of the customer adaptation of electronic banking,
respectively.
6.0 Assessment of the research hypothesis
Hypothesis 1:
There is a significant relationship between perceived usefulness and customer adaptation of
electronic banking in the context of HSBC.
The result of correlation analysis depicts that the perceived usefulness was positively and
significantly correlated with customer adaptation of electronic banking (r = .29, p< .01). So the
result of correlation analysis provided support for hypothesis 1.
However, the result of stepwise regression depicts that in the context of HSBC perceived
usefulness failed to enter into the regression equation which indicates that it is not significantly
associated with customer adaptation of electronic banking. Therefore, the result of stepwise
regression analysis provided no support for hypothesis 1. As far as theory and previous empirical
studies are concern, it should support the hypothesis but may be the inattentive responses of the
respondents created the unsupportive nature of the result of regression analysis.
Hypothesis 2:
There is a significant relationship between perceived ease of use and customer adaptation of
electronic banking in the context of HSBC.
The result of correlation analysis depicts that the perceived usefulness was positively and
significantly correlated with customer adaptation of electronic banking (r = 41, p< .01). Thus, the
result of correlation analysis provided support for hypothesis 2.
Moreover, the result of stepwise regression also depicts that in HSBC perceived ease of use
(p<.01), was found to be statistically significantly related with customer adaptation of electronic
banking. Significantly and positively related predictor variable, perceived ease of use explained
5% of the customer adaptation in electronic banking. Hence, the result of stepwise regression
provided support for hypothesis 2.
Hypothesis 3:
There is a significant relationship between perceived credibility and customer adaptation of
electronic banking in the context of HSBC.
The result of correlation analysis depicts that the perceived credibility was positively and
significantly correlated with customer adaptation of electronic banking (r = .68, p< .01). Thus,
the result of correlation analysis revealed succinct support for hypothesis 3.
Moreover, the result of stepwise regression also depicts that in HSBC perceived credibility
(p<.001), was found to be statistically significantly related with customer adaptation of electronic
banking. Significantly and positively related predictor variable, perceived credibility explained
47% of the customer adaptation of electronic banking. Hence, the result of stepwise regression
provided support for hypothesis 3.
Hypothesis 4:
There is a significant relationship between customer attitude and customer adaptation of
electronic banking in the context of HSBC.
The result of correlation analysis depicts that the customer attitude was positively and
significantly correlated with customer adaptation of electronic banking (r = .39, p< .01).
Therefore, the result of correlation analysis depicts concise support for hypothesis 4.
However, the result of stepwise regression depicts that in the context of HSBC customer
attitude failed to enter into the regression equation, which indicates that it is not significantly
associated with customer adaptation of electronic banking. So, the result of stepwise regression
analysis provided no support for hypothesis 4. As far as theory and previous empirical studies are
concern, it should support the hypothesis but may be the inattentive responses of the respondents
created the unsupportive nature of the result of regression analysis.
7.0 Significance of the study
The present study is noteworthy in various aspects. First of all, a previous study was
conducted on some of the measured variables (perceived usefulness, perceived ease of use,
perceived credibility, and customer adaptation of electronic banking) in Taiwan (Wang et al.,
2003). It was not used in the developing countries like Bangladesh. The proposed study
investigated whether correlations exist among the measured variables in the context of HSBC in
Bangladesh. This research attempted to identify the determinants of customer adaptation of
electronic banking service of HSBC in Bangladesh. This research was reveal whether consumers
make more actual usages of electronic banking decisions based on simple heuristic factors such
as perceived usefulness, perceived ease of use, perceived credibility, and customer attitude. A
further issue was addressed by this study, what was the factors driving customer adaptation of
electronic banking of HSBC in Bangladesh. Hence, the present study will enhance the limited
research on the effect of perceived usefulness, perceived ease of use, perceived credibility, and
customer attitude on customer adaptation of electronic banking for the service organization
HSBC in Bangladesh.
The present study will aid the HSBC management to enhance better understanding about the
existing customer needs and wants particularly the electronic banking users and always recalls the
20/80 rule (which is 20% customers bring 80% revenue for the company). Therefore, from the
company’s perspective they would come up with new ways to satisfy the existing customers for
example improving the entire electronic banking more so that the users can easily avail the
service whenever they needed. In addition to it, ultimately it will push the customer for repeat
purchase, to become regular users i.e., to become the loyal customer for HSBC.
8.0 Recommendation
After analyzing the studied variables in
the context of HSBC, the following issues are found to be recommended:
From the result of stepwise regression it was found that perceived credibility and perceived
ease of use are significantly and positively related with the customer adaptation of electronic
banking. Therefore, these issues should be taken more care of. Although the stated two variables
have influence on customer adaptation of electronic banking; however, the predictor variable
perceived credibility has the greater influence on customer adaptation of electronic in comparison
to perceived ease of use and other measured variables as well. That means from the
psychological aspects and more importantly in terms of relative importance, the described
variable i.e., perceived credibility has more importance to the electronic banking service users of
HSBC. Hence, to ensure better credibility among the clients, HSBC should put more stress on
the related credibility and perceived ease of use issues. For example since it is an internet based
service, security and privacy factors should take into account as special concern; as a matter of
fact money is transferred instantly trough this service. There are always huge psychological cost
associate whenever any transaction taking place through electronic banking. To remove this
psychological cost for an instance whenever any large amount of transaction take place in
addition to provide instant feedback on the interface screen, they can however make an e-mail or
make a phone call to the specific client user for further confirmations. Therefore, the HSBC
high-level management should provide and gather feedback from the clients at a regular interval
basis regarding security and privacy factors. In addition to credibility factors, the HSBC
management should also put more emphasis on the perceived ease of use not necessarily it has
greater influence on customer adaptation on electronic banking. Rather, to make more
convenient, accessible, and user-friendly for the clients, they should constantly update the entire
system through minor alternation of the system as long as it gives flexibility of the users.
However, they should not forget that while updating any process of the system whether or not it
is compatible for the clients. For that purposes they have to have customer feedback in this
regard as well.
The findings of this study suggest that in order to attract more users to electronic banking, it is
not enough to make the system easy to interact with. Rather it is more important to develop the
electronic banking systems with valuable functions and with a trustworthy protection of security
and privacy for the users. In addition, the HSBC authorities need to concern themselves more
with directly influencing customer adaptation. As suggested by our extended variables, these
internal psychological processes will result if the belief formation is appropriately managed.
Thus, management attention might be more fruitfully focused on the “development” of belief.
Especially, the HSBC electronic banking authorities should employ training and promotion
approaches to develop the customers’ beliefs of usefulness, ease of use, and credibility in the
system, which in turn will influence the customer adaptation to electronic banking services.
Hence, HSBC management of the electronic banking service can enhance the usage intentions of
their customers through computer self-efficacy, perceived usefulness, perceived ease of use,
perceived credibility and other related variables. In order to increase the computer self-efficacy
of customers, the HSBC management can organize training courses on various Internet
applications to enhance the familiarity of customers with computing technologies. Even if these
courses are not directly related to the electronic banking itself, they will still help the customers to
develop positive usefulness, ease of use, attitude, and credibility beliefs about the system in
general.
9.0 Conclusions
Today’s service industry is getting more competitive, the electronic banking service is no
exception. In the context of banking service-oriented organization perceived credibility and
perceived ease of use have great importance in the electronic banking service organization to
ensure more customer adaptation. Therefore, from this study HSBC can obtain the indications on
which of the issues they have to put more emphasis on to hold the greater customer adaptation in
terms of market share, to raise it and to enhance more usages of electronic banking. However,
similar kind of stress should put on the perceived usefulness and customer attitude related factors.
Finally, this research will encourage further study and useful guidelines for these types of
researches.
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Internship Program
Independent University, Bangladesh
---------------------------------------------------------------------------------------------------------------------
Questionnaire for Customer
Dear Sir/Madam,
I need your valuable opinion for my internship research project that I am currently doing in HSBC. It will be an
immense help if you take the time to fill the questionnaire. This study will be used to improve the service quality of
HSBC and my academic purpose. I thank you in advance for your kind cooperation.
General Information
--------------------------------------------------------------------------------------------------------------------Name: _____________________________________________ Age: __________________________
Address: __________________________________________________________________________
Occupation: _______________________________________________________________________
Contact Number: ________________________ Email: _____________________________________
Perception Statements in the Perceived Usefulness Dimension
Strongly
Disagree
Section I
Strongly
Agree
1. Using the HSBC Electronic banking enable me
to utilize banking services more quickly
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
2. Using the HSBC Electronic banking improves my
performance of utilizing banking services
3. Using the HSBC Electronic banking for my
banking services increase my productivity
4. Using the HSBC Electronic banking enhance my
effectiveness of utilizing banking services
5. Using the HSBC Electronic banking makes it
easier for me to utilize banking services
Perception Statements in the Perceived Ease of Use Dimension
Section II
Strongly
Disagree
Strongly
Agree
6. Learning to use the HSBC Electronic banking
is easy for me
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
7. I find it easy to do what I want to do in the
HSBC Electronic banking
8. My interaction with the HSBC Electronic
banking is clear and understandable
9. I find the HSBC Electronic banking to
be flexible to interact with
10. It is easy for me to become skillful at using
HSBC Electronic banking
1
2
3
4
5
Perception Statements in the Perceived Credibility Dimension
Strongly
Disagree
Section III
Strongly
Agree
11. Using the HSBC Electronic banking is
financially secured
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
12. I trust in the ability of the HSBC Electronic
banking to protect my privacy
13. I trust the technology of the HSBC Electronic
banking is using
14. I trust in the HSBC Electronic banking
is a bank
15. I am not worried about the security of the
HSBC Electronic banking
Perception Statements in the Customer Attitude Dimension
Section IV
Strongly
Disagree
Strongly
Agree
16. I feel using HSBC Electronic banking
is a wise idea
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
17. I feel using HSBC Electronic banking
is a good idea
18. I like to use HSBC Electronic banking
most frequently
Perception Statements in the Customer adaptation of electronic banking Dimension
Strongly
Disagree
Section V
19. I plan to use the HSBC Electronic banking is fun
Strongly
Agree
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
20. I intend to use the HSBC Electronic banking within
the next 3
21. I will add HSBC Electronic banking to my favorite links
_________THANK YOU_________
Reliability of perceived usefulness
****** Method 1 (space saver) will be used for this analysis ******
_
R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A)
Reliability Coefficients
N of Cases =
86.0
N of Items = 5
Alpha = .6314
Reliability of perceived ease of use
****** Method 1 (space saver) will be used for this analysis ******
_
R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A)
Reliability Coefficients
N of Cases =
86.0
N of Items = 5
Alpha = .7017
Reliability of perceived credibility
****** Method 1 (space saver) will be used for this analysis ******
_
R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A)
Reliability Coefficients
N of Cases =
86.0
N of Items = 5
Alpha = .7936
Reliability of customer attitude
****** Method 1 (space saver) will be used for this analysis ******
_
R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A)
Reliability Coefficients
N of Cases =
86.0
N of Items = 3
Alpha = .6740
Reliability of customer adaptation of electronic banking
****** Method 1 (space saver) will be used for this analysis ******
_
R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A)
Reliability Coefficients
N of Cases =
86.0
N of Items = 3
Alpha = .6031
Descriptives
Descriptive Statistics
N
PER_USEF
PER_EASE
PER_CRE
CUS_ATTI
CUS_ADPT
Valid N (listwise)
Correlations
86
86
86
86
86
86
Minimum
3.20
2.80
3.00
3.00
3.33
Maximum
4.80
5.00
5.00
5.00
5.00
Mean
4.3140
4.2535
4.4930
4.2713
4.3915
Std. Deviation
.39233
.45856
.44952
.53994
.44923
Correlations
PER_USEF
PER_EASE
PER_CRE
CUS_ATTI
CUS_ADPT
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
PER_USEF PER_EASE PER_CRE CUS_ATTI CUS_ADPT
1
.510**
.187
.530**
.291**
.
.000
.084
.000
.007
86
86
86
86
86
.510**
1
.286**
.492**
.411**
.000
.
.008
.000
.000
86
86
86
86
86
.187
.286**
1
.383**
.684**
.084
.008
.
.000
.000
86
86
86
86
86
.530**
.492**
.383**
1
.392**
.000
.000
.000
.
.000
86
86
86
86
86
.291**
.411**
.684**
.392**
1
.007
.000
.000
.000
.
86
86
86
86
86
**. Correlation is significant at the 0.01 level (2-tailed).
Regression Stepwise
Variables Entered/Removeda
Model
1
Variables
Entered
Variables
Removed
PER_CRE
.
PER_EAS
E
.
2
Method
Stepwise
(Criteria:
Probabilit
y-of-F-to-e
nter <=
.050,
Probabilit
y-of-F-to-r
emove >=
.100).
Stepwise
(Criteria:
Probabilit
y-of-F-to-e
nter <=
.050,
Probabilit
y-of-F-to-r
emove >=
.100).
a. Dependent Variable: CUS_ADPT
Model Summary
Model
1
2
R
.684a
.720b
R Square
.467
.518
Adjusted
R Square
.461
.506
Std. Error of
the Estimate
.32979
.31562
a. Predictors: (Constant), PER_CRE
b. Predictors: (Constant), PER_CRE, PER_EASE
ANOVAc
Model
1
2
Regression
Residual
Total
Regression
Residual
Total
Sum of
Squares
8.018
9.136
17.154
8.886
8.268
17.154
df
1
84
85
2
83
85
Mean Square
8.018
.109
F
73.714
Sig.
.000a
4.443
.100
44.601
.000b
t
3.679
8.586
1.561
7.752
2.952
Sig.
.000
.000
.122
.000
.004
a. Predictors: (Constant), PER_CRE
b. Predictors: (Constant), PER_CRE, PER_EASE
c. Dependent Variable: CUS_ADPT
Coefficientsa
Model
1
2
(Constant)
PER_CRE
(Constant)
PER_CRE
PER_EASE
Unstandardized
Coefficients
B
Std. Error
1.322
.359
.683
.080
.645
.413
.616
.079
.230
.078
Standardized
Coefficients
Beta
.684
.616
.235
a. Dependent Variable: CUS_ADPT
HSBC Bangladesh
The HSBC Asia Pacific group represents HSBC in Bangladesh. HSBC opened its first branch
in Dhaka in 17th December 1996 to provide personal banking services, trade and corporate
services, and custody services. The Bank was awarded ISO9002 accreditation for its personal
and business banking services, which cover trade services, securities and safe custody, corporate
banking, Hexagon and all personal banking. This ISO9002 designation is the first of its kind for
a bank in Bangladesh. The Hong Kong and Shanghai Banking Corporation Bangladesh Ltd.
primarily limited its operations to help garments industry and to commercial banking. Latter, it is
extended to pharmaceuticals, jute, and consumer products. Other services include cash
management, treasury, securities, and custodial service.
Realizing the huge potential and growth in personal banking industry in Bangladesh,
HSBC extended its operation to the personal banking sector in Bangladesh and within a very
short span of time it was able to build up a huge client base. Extending its operation further,
HSBC opened a branch at Chittagong, three branch offices at Dhaka (Gulshan, Mothijheel and
Dhanmondi) and an offshore banking unit on November 1998.
HSBC Bangladesh is under strict supervision of HSBC Asia Pacific Group, Hong Kong. The
Chief Executive Officer of HSBC Bangladesh manages the whole banking operation of HSBC in
Bangladesh. Under the CEO there are heads of departments who manage specific banking
functions e.g. Personal banking, corporate banking, etc.
Currently HSBC Bangladesh is providing a wide range of services both two individual and
corporate level customers. In the year 2000, the bank launched a wide array of personal banking
products designed for all kinds of (middle and higher-middle income) individual customers.
Some such products were Personal loans, car loans, etc. Recently the bank launched three of its
personal banking products – Tax loan, Personal secured loan & Automated Tele Banking (ATB)
service.
HSBC in Bangladesh also specializes in self-service banking through providing 24-hour ATM
services. Recently it has introduced Day & Night banking by installing Easy-pay machines in
Banani, Uttara and Dhanmondi to better satisfy the needs of both customers and non-customers.
In total HSBC currently has 9 ATM’s (5 on-site & 4 offsite) and 3 Easy-pay machines located at
various geographical areas of Dhaka & Chittagong.
HSBC Bangladesh at a glance
Name of the Organization:...................The Hong Kong Shanghai Banking Corporation
Bangladesh LTD
Year of Establishment: ........................1996
Head Office:...........................................Anchor Tower, 1/1-B Sonargaon Road
Dhaka 1205, Bangladesh
Nature of the organization: .................Multinational company with subsidiary group in
Bangladesh.
Shareholders:.........................................HSBC group shareholders
Products: ...............................................Savings & deposit services.
Loan products.
Corporate and Institutional services.
Trade services
Hexagon and HSBCnet
Management:.........................................Mr. Steve Banner (Chief Executive Officer)
Mr. Wasim Adnan Wahed (Chief Operating Officer)
Mr. Mamoon M Shah (Manager, Financial Services)
Mr. Mahbub-ur- Rahman (Head of Corporate
Banking)
Mr. Syed A H Uddin (Manager, Human Resources)
Mr. Munir Hussain (Manager, Marketing)
Number of Offices:................................5(Dhaka, Motijheel, Gulshan, Dhanmondi & Chittagong)
Technology:............................................Offers full online banking from branch to branch and
also from Dhaka to Chittagong.
Service Coverage & Customers:...........Serves individual and corporate customers within
Dhaka and Chittagong.
Number of ATM’s:................................10
Number of Easy Pay Machines:..........3
Number of employees: ..........................450
Functional Areas of HSBC Bangladesh
Management-HSBC Bangladesh
HSBC, Bangladesh is one such company that has to over come a lot of hurdles to reach the
position it now holds. At present, Mr. Steve Banner is the CEO; Mr. Mahbub-ur- Rahman is the
chief of Corporate Banking; Mr. Adnan Wahed is COO, Mr. Mamoon Mahmud Shah is the Chief
of Personal Banking, and Mr. Syed Akhtar Hossain is the Human Resource Manager at HSBC
Bangladesh. These five men at the top carried out their management roles exhaustively. They
equally contributed to HSBC’s superior leadership, by carrying out their unique roles.
To maintain a close touch with the organization each man works in separate area of HSBC’s
complex. Their offices are indistinguishable from all other cubicles where HSBC’s junior
executives & secretaries work in. There are no office walls in HSBC and all the staff starting
from the CEO to the lower operating level employee share the same premises under one roof.
This has created a management team that is unified, cohesive & energetic.
The management of HSBC is supportive in the sense that the top management deliberately
supports the suggestions, values, ideas, innovation and hard work of the employees and officer.
Again high amount of employee participation is encountered in the management process.
Figure 2: Functional Departments of HSBC
Corporate Banking Division:
This division if HSBC provides financial services to organizational clients. HSBC is a
worldwide leader in banking and financial services whose success is based on its relationships
with its corporate clients. Whether it is locally or around the world, HSBC offers a
comprehensive range of services that can be tailored to the individual needs of the company. The
Head of this department is the Chief of Corporate Banking. He is also the Vice-CEO of HSBC
Bangladesh. The chief of CB manages the activities of corporate banking of HSBC Bangladesh.
Corporate Banking of HSBC Bangladesh includes Corporate Institutional Banking (CIB) Trade
Service (HTV), and Hexagon. These sub-divisions are discussed briefly in the following sections
along with a structure chart of corporate banking division of HSBC Bangladesh.
Figure 3: Structure of Corporate Banking Department
Figure 4: Products and Services Offered to Individual and Corporate clients of HSBC
Electronic Banking
ƒ Hexagon
The Hexagon department deals with all aspects related to HSBC’s unique banking software
product - Hexagon. It is the global Electronic Banking system of HSBC, which offers the
customers more convenient and efficient banking than ever before. It is an innovative desktop
banking system developed by the HSBC group, which operates via the group’s proprietary
worldwide communications network. However to make more efficient and improvisation of
electronic banking service the Hexagon has been extended to HSBC Net, A brief functional
expiation on HSBCnet given in the below bullet format:
• HSBCnet
HSBCnet is a range of products and services that encompass Corporate, Investment Banking,
and Markets business, delivering tailored financial solutions to user via the Electronic. These
solutions include cash management and treasury and capital markets and are expanding to include
more products and services. The solutions are accessed online through an Electronic page that is
customizable for each individual user. It provides access to HSBC sourced information and,
when appropriate, will provide the ability to execute certain tasks such as manage user liquidity
across the world. It provides a single point of entry to HCBC’s Electronic solutions and
complements their other channels.
The personal page
HSBC understand that different roles in organization have different needs, so they enable each
user to personalize their Electronic page to show content that is relevant to them. For example
client’s treasurer may wish to see content ranging from cash management to research, through to
securities, whereas one of their payment initiators may just need to focus purely on cash
management. A user is set up with a personal page and accesses a range of content known as
‘tools’ based on relevant levels of entitlement. These tools provide information in summary
initially and can be expanded to provide further detail, for example, to drill deeper into an
account balance or to open a piece of research.
Solutions
Cash management@hsbc
HSBC strive to help client’s organization to make the best use of financial assets through
effective cash management. Cash management@hsbc solutions available through the personal
page are:
Global balance and transaction reporting that empowers users to:
• View balance summaries with sub-totals and projections
• Drill into balance details including account selection details
• Investigate statements
• Work with real time data
• Choose between several local languages
• Access accounts around the world
• Report third party (non HSBC Group) banks via SWIFT
• Download reports and files
Additional functionality includes the ability to:
• Make domestic and international high value payments and low value payments
• Make inter-account transfers
• Create payment templates
• Upload files for direct transmission of data
• Scope to inform beneficiaries that payment instructions have been sent.
markets@hsbc
There is also access to:
• Valuable HSBC research from the world-view to local markets, covering daily, weekly
and monthly publications, as well as specific reports.
• Snapshots of forthcoming events and breaking news through the calendar tool.
• Market commentary and other thought-leading content.
And where appropriate, access to FX trading platform, which provides secure online access
with all the power of the HSBC dealing room.
Securities services@hsbc
For HSBC’s institutional custody clients, they have begun roll out in Asia of the following:
HSBC’s securities solutions available through personal page give users the opportunity to:
• View portfolio details
• Drill into holdings details including where stock is held and its delivery availability
• Further drill into the transactions that cause the stock movements
• Search transactions with great flexibility
• Enquire on aged transactions by matched, unmatched, and failed status
• Search for Information for securities and broker/counter-party information
• Download files
They are adding new features including file upload, bulk file download, cash projections, and
corporate event enquiries.
The benefits of using HSBCnet
More Control
• Of users accounts, including access to real-time information
• Over whom in user organisation can access what information and the actions they can
take online
• To improve workflows and drive approvals move swiftly through user organization
Personalization
• By each user of their personal page, thereby ensuring that only authorized person see
content that is relevant
Breadth
• Of accounts and client’s relationship with HSBC
• Access to content and ideas from across HSBC’s Corporate, Investment Banking, and
Markets business through one integrated personal page
• Client will be using the same Electronic platform as user’s colleagues in other countries,
thereby adding to the consistency of work tools he use
Depth
• By understanding account balances and other information at a summary level and then
drilling deeper
• Through having access to the wealth of HSBC research with a few simple clicks
Freedom
Users can use the personal page whenever it suits them and from wherever they can access the
Electronic, within security parameters
Security
HSBC recognize and share the need for robust security. Therefore, HSBC have a range of
security features that strengthen depending on the user’s use of their personal page. In addition to
providing SSL 128-bit encryption, HSBC enforce the use of user name and password for
information access and smart card security for appropriate transactional services.