Internert Banking Final

8/2/2019 Internert Banking Final

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Internet Banking System in Pakistan


Partcipents in this Report

Hina Maniar

Hammad KhanSyeda Sehrish

Altaf Magsi


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Internet Banking System In Pakistan

Abstract

Internet banking is a vital component of E-banking flourished rapidly

in developed countries unlike developing countries. This provides

recommendations for the banks offering internet banking services

after examining the barriers in adoption of internet banking perceived

by active internet user living in Pakistan. Various, significantly variablesperceived barriers identified by previous studies are presented after

and extensive literature review in order to form a basis for developing

questionnaire and comparing the findings. Data were collect from 100employees of the banks offering internet banking services in Karachi

Pakistan. The respondents selection criteria was being active internetusers and living in Karachi Pakistan. Finding shows that the loss of

personal services and one to one relationship with bankers, lowperceived value of internet banking as compared to traditional banking

and lack of knowledge, trust are perceived to be the most significantbarrier in adoption of internet banking among respondents. Lack of

security, risk of hacking, fear of incomplete transaction and highfinancial risks are perceived to be moderately significant barriers. Thestudy recommends that the banks should identify the information

needs of the customers and establish the effective internet bankingand information channels to communicate the benefits and uses of

internet banking services in Pakistan and develop long term customer

relationship.

Keywords: Internet Banking, Trustworthiness, Customer Perception,Security, Risk, Awareness, Convenience and accuracy


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Background

The Promotion of internet banking technology enabled the banks to

enhance its operations with cost cutting effectively and efficiently inorder to handle daily banking affairs via internet banking channel.

Customers are being facilitated by reducing their visits in banks and

they can carry out their transactions via internet or ATM Machines

instead of personally visiting the branches. The researches so far done

reveal that mostly the customer of banks are unaware about online

banking services. Especially Pakistan is far behind the developing

countries as a lot of services regarding internet banking are notavailable in Pakistan. The study reveals that mostly customers prefer

internet banking (IB) services over branch banking due to reliability,

convenience, speed, safety and security, cost effectiveness, user-

friendly, and error free system. In contrast the parallel finding shows

that security problems, lack of trust and knowledge, ATM machine

problems etc. affect the adoption decision of customers of internet

banking services.

Introduction

The research paper intend to provide a background and so fardevelopment of internet banking systems in Pakistan. There are five

variables studies to investigate the prospect of internet banking in

Pakistan which are customers perceptions, risk and privacy,trustworthiness, awareness and convenience and accuracy on internet

banking systems in Pakistan.

The internet banking facilities offered by banks are still in the

rudimentary stage. They offer the products such as balance inquiry,


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view account statement, stop payment request, money transfer from

one bank account to another bank account, by far, cash deposit, creditcards and utility payment through automated machine teller is not

ubiquitous in Pakistan

For the banks striving hard to gain competitive advantage in the

industry to secure more handsome profit inevitably require to use the

latest technology, the benefits are deploying the latest technology aremanifold- it cuts the transaction cost, mitigates the service timing and

brings satisfied customers on the verge of the bank door.

In Pakistan, banks identified the need of innovation in the way banking

customers were served. The banks imitated the developed countriesinternet banking model.. The data compiled by downloading the material

from Web Marketing Association, show that banks are falling behindother industries with respect to innovation within internet channel

(Bruno-Britz, 2006). A survey on general use of internet shows thatuse of internet is gradually increasing in the daily life of an average

user especially for the purpose of doing financial transactions andobtaining financial information (Daily Time Pakistan, December 2005).

When Internet has entered into our daily life, the most dimensions ofour lives such as education, communication, business, etc, were

overshadowed by this novel phenomenon. One of these dimensions is to

handle banking affairs through the Internet (Shirali & Shahreza,2007). According to (Richard Nyangosi & Arora, Sumanjeet Singh,

2009) banking through electronic channels has gained much popularityin recent years. This system, popularly known as Internet Banking,

provides faster delivery of banking services to a wide range ofcustomers.


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In the contemporary scenario, customers expect real-time services.

The corporate clients of the banks prefer to have the transaction

settle in a short time which was improbable with the traditional

banking model without the internet banking. Internet banking hasprovided a pace to perform transaction settlement on the real time

basis Information technology is becoming an important factor in the

future development of financial services industry, and especially in

banking industry (Nami. M. R, 2009).

In current business environments, customers using the services

products of the banks want better choice. (Avkiran, 1999) stressed

the importance of the human touch in the customer services. The

capability of banking staff can be expected to directly affect the

customers satisfaction. However, Internet Banking can help in better

understanding customers needs and customizing the services/

products according to their needs.

The implementation of internet banking model is not without problems,

the problematic phase is constructed of many variables, such ascustomers perception toward internet banking, concerned for

technological issues, privacy and risk, trustworthiness, awareness and

convenience.

Customer perception and life style plays a pivotal role in the overall

success of the internet banking Customers perception and life style

plays an important role in growth of Internet banking system(Rogers1983). Lockett and Littler, (1997), analyzed consumers

attitudes towards direct banking, compatibility with customer existing

lifestyles. Other research has similarly indicated that customers


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attitude and beliefs about technology are correlated with intensions to

use it (Chircu and Kauffman 2002).

The technological issues are another problem in internet banking

effective implementation , the issue arises when customer perceive

supplier of unfair practices such as unauthorized access or system

failures.Customers and Banks are concerned about

Technical/Technological issues for commercial usage of the Internet.

(Zugelder, 2000)According to Rogers and Shoemaker,(1971)Before

buying a product or obtaining a service customers usually investigate

and think carefully. The same phenomena is pointed out by Guiltinand

and Donnelly (1983)

The consumer confidence on internet banking depends upon the bank

action against fraudulent transactions. Consumer unwillingness to

accept internet banking is lack of consumer trust on electronic devices

(1999) says that Customer confidence on internet banking depends on

the action of bank against false transactions and security matters that

appears during online banking.

Customers trust is necessary to gain benefits of implementation of

technology. Clients viewed trust as an expectation about competency to

perform, reliability of transactions. It is proposed that trust ismeasured as a behavioral intention or behavior that shows reliance on

the other partner. In addition Morgan and Hunt, (1994) defined trustas: The perception of confidence in the exchange partners reliability

and integrity. These definitions highlight the significance ofconfidence and reliability in trust building.

Finally, the issues of online security and privacy protection are factors

that heavily influenced the clients . The regulatory authorities must


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assure the reasonable measures to protect the consumer from any

frauds or invasion to privacy, consumers are still skeptical about the

recent announcement of assurance by the Government on digital

signature and other authentication measures

Internet Banking

Internet banking can be defined as the use of technology to

communicate instructions and receive information from a financial

institute where an account is held. Internet banking includes the

system that enables the financial institution customers, individuals,

business to access account, transact business, or obtain information on

financial product and services through public and private network,

including the internet. When first introduced internet banking was

used to market the product and services offered on their websites,

with the passage of time and technology advancement secured, easy

and timely transactions offered by the banks through internet banking,

however, more banks have come forward to use internet banking both

as transactional as well as an informational medium.


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The internet banking is becoming increasingly more important channel

of banking in Pakistan. Internet banking in Pakistan is less developed in

Pakistan as compared to west developed country following the world

wide trend in implementing self service technology that is the

Internet banking system in Pakistan will develop into establishedservice provider. The number of internet banking users in Pakistan is

doubled every year in the last two years.

Informtional

Bank to Account holder

Marketing/

Advertisement

Bank to Account

Holder to Bank

Electronic Mail

Account Enquiry

Loan Application

Bank to Account

Holder to Bank

Accessing Accounts

Paying Bills

Transfering Funds

TransactionalCommunication

Types of Internet Banking


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Initially internet banking was launched in Pakistan to provide a limited

number of services and it was sort of hype in the market. In the pastyears there has been greater understanding and development towards

various services being offered by banks through internet banking.Customer readiness, acceptance & security awareness is also a factor

which is improving as usage of internet banking is increasing. Banks

have also begun to understand the cost & benefits of internet banking.

Initially there was also an internet bandwidth issue which has since

been resolved by the availability of better internet networkavailability. Utility companies are also gearing up for offering bill

payment facilities through various electronic channels including

Internet Banking.Good growth has been shown in use of internet banking services in

Pakistan. So for internet banking system provide following facilities

internationally as well as in Pakistan:

o Complete view of customer's information

o Facility to check account balance

o To obtain account statements

o To make Stop Payment request

o PO/DD Request

o Cheque/PO/DD Status Inquiry

o Cheque Book Request

o Funds Transfer

o Email Satement/Balance


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o Utility Bill Payment

o Password Generation

Swift development of the internet banking also shown well development

of internet banking system in Pakistan. State Bank of Pakistan should

formulate a research and good strategies to ensure rapid migration of

customers to online banking and thus boom the internet banking

services more efficiently.

Prospect and Problem


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Issues related to adoption of internet banking system must be

factored in to any plans for adding customer satisfaction and security

control features.

Research Question

The purpose of this research, aims to identify the issues that

preventing Pakistani customers from adopting Internet Banking

Services.

This research leads to the following main questions:

Q: What are the major issues that influence Customers to adoptInternet Banking?

Literature review

To identify and describe the adoption issues that exist in Pakistanifirm regarding banking, the main advantage of internet banking is that

its availability on 24 hours and 7 days. The major disadvantage of using

internet banking is the perplexity and the security risks involved in

using it. The early adopters of internet banking have earned higher

revenues, cutting the resources usage from business operations. Theyalso exhibit the favorable attitude toward change than the late-

adopters and non-adopters. The main issues which hamper the adoptionof the internet banking in Pakistan are customers perceptions, risk

and privacy, trustworthiness, awareness and convenience and accuracyon internet banking systems in Pakistan.

A better approach to resolve these issues is to comprehend the

customers willingness to use the emerging technology of internet

banking. The past researches have pinpointed the issues that affect

consumers attitude toward accepting the new technology in the


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financial service industry and they type of consumer segment more

likely to use such technology. The early research on technology in

financial services, which focused on the adoption of ATMs revealed

that a significant factor for non-usage ,especially amongst oldercustomers, was the preference for conducting financial affairs through

a human teller( Zeithaml and Gilly,1987), studied comparisons between

ATM usage in different European countries and found that the main

concern of users included fears over its security, the possibility of

machine breakdown and running out of money.

Novel technology sometimes complex understanding and mental

capability, and thus the technology may be difficult to understand due

to limited capability of firm employees. Finally, people

conceptualization toward technology plays a pivotal role in the

acceptance of any novel technology, the assumed role of technology in

improving productivity comes along with prevailing skepticism in the

minds of the people. Other research has shown that customers

attitude and beliefe about technology are correlated with theintentions to use it (Chircu and Kauffman 2002).

The concurrent organization structure may not be supportive to utilize

the web technology(Chircu and Kauffman,2000) and may include

management attitudes, resource constraints, and knowledge issues.

Some researchers have shown negative attitudes among some managers

as a major interference( Farhaamand,2002). Negative attitude prompts

unwillingness to adopt the new technology, reducing the companys

resource allocation and motivation to use the technology( Basu,2002)

Implementing web technology as a business channel requires

.Customers and banks are more concerned about technological issues

for commercial usage of the internet.Zulgelder(2000) mentioned that


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customer protection is the major technical issues associated with

internet marketing. Among other things, customer protection issues

can cover unfair and deceptive trade practices by suppliers,

unauthorized access and usage by others, such as hackers, or systemfailyures, Customer protection is important for building online

customer confidence because there is no face to face contact, and

there is a great possibility for having problems or making mistakes via

the web. for having problems or making mistakes via the Web. Social,

psychology and marketing research show the customers vary in the

nature to maintain relationship with service providers such as banks.

This shows that customers who desire social and psychological benefitsby establishing personal relationships with banks will prefer traditional

banking. Internet banking system will not be accepted for such

customers. On the other type of customers whose relationship is based

on efficiency of the services, internet banking will be an ideal situation

(Gremler and M.J. Bitner, 1999).

According to Rogers and Shoemaker,(1971)Before buying a product orobtaining a service customers usually investigate and think carefully.

The same phenomena is pointed out by Guiltinand and Donnelly (1983),

according to them it is important to aware about new products.Pakistani banks well aware about these phenomena and makes endeavor

to spread awareness through their websites about their innovations. Aresearch on customer satisfaction and internet indicate that

information about content of product and its lay out are important

factors that influence customer satisfaction (W.J. Doll, 1995).

Stewart (1999) says that Customer confidence on internet bankingdepends on the action of bank against false transactions and security

matters that appears during online banking. He claims that the reason


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of failure of the Internet banking is due to the lack of consumers

trust on electronic channels.

Customers trust is necessary to gain benefits of implementation of

technology. Clients viewed trust as an expectation about competency to

perform, reliability of transactions. It is proposed that trust is

measured as a behavioral intention or behavior that shows reliance on

the other partner. In addition Morgan and Hunt, (1994) defined trustas: The perception of confidence in the exchange partners reliability

and integrity. These definitions highlight the significance of

confidence and reliability in trust building.

Turban, (2002) the issues of security of e-Transactions and privacyprotection are serious factors and heavily relates to the clients. Not

only service providers have to play a role in providing security oftransactions, but also governments, with suitable regulations, must

assure it. Despite announcement by Government of Pakistan aboutsecurity of internet transaction and trust building ,digital signatures

and other authentication measures are still doubted for the users.

Opportunities from implementing web technology could be restricted if

there is a lack of customer trust in the web system. They viewed trustas an expectation of ability to perform , reliability and intentionality of

a partner, an proposed that trust has to be viewed as a behavioral

intention or behavior that reflects dependence on the other partner.inaddition( Morgan and Hunt, 1994) defined trust as the perception of

confidence in the exchange partners reliability and integrity. Bothdefinitions underline the importance of confidence and reliability in the

conception of trust.

Frame Work of Adoption of Internet Banking


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Customer Perception

Customer perception refers to how customers feels/perceive while

using internet banking in terms of security, reliability, accessability

speed, and prompt customer services.Trust is the crucial factor in internet banking and is the main barrier

to the customers in making online transaction, due to the securityissues, and privacy issues concerning what happened with their personal

details. Trust can also be linked to the customer services. Customer

need to know that they can contact a bank if problem occur andpreferably interact with a company. The use on FAQ should satisfy

customers and deter them by using customer services option ininternet banking portals.

Risk & Privacy

Risk and privacy are the key factor of internet banking. This is defined

as a potential loss due to fraud or a hacker compromising the securityof an Internet bank user. Both fraud and hacker intrusion not only leadto users' monetary loss, but also violate users' privacy, a major

concern of many Internet users. Many consumers believe that they are

Adoption of Internet Banking

Customer Perception

Risk & Privacy

Security

Awareness

Convenience & Accuracy

Customer Satisfaction

Time

Customer Perception

Customer Experience

Reliability


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vulnerable to identity theft while using Internet banking services

(Littler and Melanthiou, 2006).

Awareness

Initially internet banking was launched in Pakistan to provide a limited

number of services and it was sort of hype in the market. Customer

readiness, acceptance & security awareness is also a factor which is

improving as usage of internet banking is increasing.

Convenience and accuracy

The major difference lies in the convenience and accuracy offered by

online banking particularly when it comes to making payments, obtainingupdated information of the account, or integration account statements.

Trustworthiness

Trustworthiness is a willingness to rely upon someone in a transaction,therefore, trustworthiness is an expectation to perform reliabily.

There are three reasons theoretically understood for customers to nothaving to rely upon internet banking

1. Systems security2. Reliability

3. Perceived risk

Systems security

security refers to the websites ability in protecting consumer

personal information collected from its electronic transactions from

unauthorized, strong concern about security is one common issues
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related to unwillingness to use internet banking services( Madu,2002)

security violation can lead to various disruption such as destruction ofoperating systems, or distruption of information system. Most

customers are not satisfied with the security of web system(Blake2000) in internet banking security is one of the major challenges,

because customer fear hher risk in using the web for financial

transaction(Cunningham,2003)

2 Reliability

Reliability involves consistency of performance and dependability. It

means that the firm performs the service right the first time. It alsomeans the firm honors its promises especially it involves, accuracy in

billing and information, keeping records correctly, performing theservice at the designated time( Mckinney 2002) . Reliability is

associated with the technical functioning of the e-banking site,particularly the extent to which it is available and functioning properly

3 Perceived risk

Perceived risk can also cause customer to reject new internet bankingservices,. Percieved risk is related to reliability and system failure.

Customers are also worried that technology based service delivery

systems will not work as expected, and lack of confidence thatproblems can be solved quickly( walker 2002) found that transaction

risks occurs when online markets fail to assure that service will bedelivered with adequate quality.


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3 Methodology

RESEARCH METHODOLOGY SELECTED

A list of banks that provides internet banking facilities in Pakistan is

drawn from the information given on the website of State Bank of

Pakistan and five banks are selected. Extensive research is carried on

to explore the facilities that selected banks are providing. After that

a closed ended questionnaire is designed. On convenience basis 100

questionnaires are get filled and inferential tests are applied on the

data collected through this instrument .Respondents for the research

are the employees of Habib Bank, Summit Bank, National Bank, Soneri

Bank, located in Karachi.

For primary Data Collection Closed ended questionnaire

Structured interviews

Surveys

Direct observation

For secondary Data Collection

Research papers


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Internet

Professional Journals and Magazines

Articles

3.2TREATMENT OF DATA

Statistical tools and techniques are used in the data through SPSS

(Statistical packages for social sciences) software. The data collected

through primary research is calculated on the quantitative basis mean,

standard deviation, correlation analysis, regression analysis is

calculated and ANOVA is also done.


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CONCEPTUAL FRAMEWORK

Independent Variables Dependent Variable

Customer

perceptions

Risk & Privacy

Internet

Banking

System

Trustworthiness

Awareness

Convenience&

Accuracy


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DescriptivesDescriptive Statistics

N Minimum Maximum Mean Std. Deviation

internetbanking 63 1.20 3.93 2.2233 .51864

perception 63 1.29 3.86 2.1542 .51223

riskprivacy 63 1.00 4.00 2.0238 .75364

trustworthiness 63 1.00 4.00 1.9365 .82546

awareness 63 1.00 5.00 1.7857 .75517

convenienceaccuracy 63 1.00 4.00 2.0053 .71965Valid N (listwise) 63

According to respondents opinions the rating on dependent variable internet banking in banking sector

was highest with a mean of (2.2233). The rating of perception was second highest with a mean of

(2.1542), the rating of risk and privacy was third highest with a mean of (2.0238), the rating of

independent variable convenience and accuracy was fourth highest with a mean of (2.0053), the rating

of trustworthiness was fifth highest with a mean of (1.9365). And the rating of awareness is lowest with

a mean of (1.7857).

The standard deviation of respondents opinion ontrustworthiness was the highest (0.82546), ascompared to other dimensions. This indicates that there is a low involvement oftrustworthiness in

banking sector of Karachi.


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CorrelationsCorrelations

internetbanking perception riskprivacy

trustworthiness awareness

convac

internetbanking Pearson Correlation 1 .695(**) .093 .262(*) .371(**)

Sig. (2-tailed) .000 .466 .038 .003

N 63 63 63 63 63

perception Pearson Correlation .695(**) 1 .310(*) .439(**) .403(**)

Sig. (2-tailed) .000 .014 .000 .001

N 63 63 63 63 63

riskprivacy Pearson Correlation .093 .310(*) 1 .553(**) .470(**)

Sig. (2-tailed) .466 .014 .000 .000

N 63 63 63 63 63

trustworthiness Pearson Correlation .262(*) .439(**) .553(**) 1 .502(**)

Sig. (2-tailed) .038 .000 .000 .000

N 63 63 63 63 63

awareness Pearson Correlation .371(**) .403(**) .470(**) .502(**) 1

Sig. (2-tailed) .003 .001 .000 .000

N 63 63 63 63 63

convenienceaccuracy Pearson Correlation .377(**) .373(**) .441(**) .548(**) .695(**)

Sig. (2-tailed) .002 .003 .000 .000 .000

N 63 63 63 63 63

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

The data was analyzed through SPSS (statistical package for social sciences) software by using

correlation and regression. The correlation test indicates that the relationship between the

variables. The correlation values show that there is a perfect positive correlation of job internet

banking with perception, awareness and convenience/accuracy and positive correlation with

trustworthiness and no correlation with risk and privacy.

The dependent variable internet banking system has the strongest correlation with perception about

internet banking (0.695**), with convenience /accuracy(.377**), with awareness issues in internet

banking (.371**) and with trustworthiness has low interference in internet banking system (0.262*) and

there is no correlation of risk and privacy about internet banking (.093) with the dependent variable

internet banking system.


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Regression of perception

Variables Entered/Removed(b)

Model

Variables

Entered

Variables

Removed Method1 perception(

a). Enter

a All requested variables entered.b Dependent Variable: internetbanking

Model Summary

Model R R SquareAdjusted R

SquareStd. Error ofthe Estimate

1 .695(a) .483 .475 .37586

a Predictors: (Constant), perception

The R value show Coefficient of Correlation is the numerical measure of strength of the linearrelationship between two variables. The R value (.695(a)) is show that there is positive correlation

between the perception and Dependent Variable internet banking.

The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R

Square values (.483) mean 48% reliable to be used for estimation of population.


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The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The

Std. Error value show that 37% Fluctuation of Sampling Mean.

The R change shown that differences between R-value & Adjusted R square.

ANOVA

ModelSum of

Squares df Mean Square F Sig.

1 Regression 8.059 1 8.059 57.047 .000(a)

Residual 8.618 61 .141

Total 16.677 62

a Predictors: (Constant), perceptionb Dependent Variable: internetbanking

The Sum of Square shows the total variability around the mean, the Sum of Square Residual mean the

Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Predictionby using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent

Variable.

The degree of freedom means number of sample minus one.

The F Test value (57.047) shows the combination of all variable, overall significances of the Model its

mean one independent variable perception on Dependent variable internet banking and Observation of

Independent Variable met.

Coefficients

Model

UnstandardizedCoefficients

StandardizedCoefficients

t Sig.B Std. Error Beta

1 (Constant) .707 .206 3.428 .001

perception .704 .093 .695 7.553 .000

a Dependent Variable: internetbanking


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The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. The

St.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error.

St.d Error of Constant (.206) value shows the 20% of fluctuation of sampling mean and the St.d Error of

Independent Variable perception is (.093) value shows the 9% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and theoutcomes variable were standardized prior the analysis and the Comparing the size of the

coefficient across variable. The t value of Independent Variable perception is (7.553).According

to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate

hypothesis will be accepted.

Regression of risk and privacy


ModelVariablesEntered

VariablesRemoved Method

1 riskprivacy(a)

. Enter


Model Summary



1 .093(a) .009 -.008 .52058

The R value show Coefficient of Correlation is the numerical measure of strength of the linear

relationship between two variables. The R value (.093 (a)) is show that there is no correlation between

the risk and privacy Dependent Variable internet banking.


Square values (.009) mean 0.9% reliable to be used for estimation of population.



The R change shown that differences between R-value & Adjusted R square


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ANOVA

ModelSum of


1 Regression .146 1 .146 .538 .466(a)

Residual 16.531 61 .271

Total 16.677 62

a Predictors: (Constant), riskprivacyb Dependent Variable: internetbanking


Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Prediction

by using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent

Variable.The degree of freedom means number of sample minus one.


mean one independent variable risk and privacy on Dependent variable internet banking and

Observation of Independent Variable met.

Coefficients

Model




1 (Constant) 2.093 .189 11.059 .000

riskprivacy .064 .088 .093 .733 .466



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Standardized Coefficients are the coefficient that you would obtain if the Predictors and the

outcomes variable were standardized prior the analysis and the Comparing the size of the

coefficient across variable. The t value of Independent Variable risk and privacy is

(0.733).According to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be

rejected and alternate hypothesis will be accepted.

Regression OF Trustworthiness


Model VariablesEntered VariablesRemoved Method

1 trustworthiness(a)

. Enter


Model Summary



1 .262(a) .069 .053 .50458

a Predictors: (Constant), trustworthiness


relationship between two variables. The R value (.262(a)

) is show that there is positive correlation

between the trustworthiness Dependent Variable internet banking.




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The R change shown that differences between R-value & Adjusted R square

ANOVA(b)

ModelSum of


1 Regression 1.147 1 1.147 4.504 .038(a)

Residual 15.530 61 .255

Total 16.677 62

a Predictors: (Constant), trustworthinessb Dependent Variable: internetbanking


Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Predictionby using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent



mean one independent variable trustworthiness on Dependent variable internet banking and


Coefficients(a)

Model

UnstandardizedCoefficients StandardizedCoefficients


1 (Constant) 1.904 .163 11.667 .000

trustworthiness .165 .078 .262 2.122 .038



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Independent Variable trustworthiness is (.078) value shows the 7% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and theoutcomes variable were standardized prior the analysis and the Comparing the size of the

coefficient across variable. The t value of Independent Variable trustworthiness is



Regression of awareness




1 awareness(a)

. Enter

a All requested variables entered.

b Dependent Variable: internetbanking

Model Summary



1 .371(a) .138 .124 .48551

a Predictors: (Constant), awareness


relationship between two variables. The R value (.371(a))is show that there is positive correlation

between the awareness Dependent Variable internet banking.







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ANOVA

ModelSum of


1 Regression 2.298 1 2.298 9.750 .003(a)

Residual 14.379 61 .236

Total 16.677 62

a Predictors: (Constant), awarenessb Dependent Variable: internetbanking






mean one independent variable awareness on Dependent variable internet banking and Observation of

Independent Variable met.


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Coefficients

Model




1 (Constant) 1.768 .158 11.182 .000

awareness .255 .082 .371 3.122 .003

a Dependent Variable: internet banking




Independent Variable awareness is (.082) value shows the 8% of fluctuation of sampling mean.



coefficient across variable. The t value of Independent Variable awareness is (3.122).According

to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate

hypothesis will be accepted.


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Regression of convenience/accuracyVariables Entered/Removed(b)



1 convenienceaccuracy(a)

. Enter


Model Summary



1 .377(a) .142 .128 .48427

a Predictors: (Constant), convenience accuracy


relationship between two variables. The R value (.377(a))is show that there is positive correlation

between the risk and privacy Dependent Variable internet banking.






ANOVA(b)

ModelSum of


1 Regression 2.371 1 2.371 10.111 .002(a)

Residual 14.306 61 .235

Total 16.677 62

a Predictors: (Constant), convenience/accuracy


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b Dependent Variable: internet banking




Variable. The degree of freedom means number of sample minus one.


mean one independent variable trustworthiness on Dependent variable internet banking and


Coefficients

Model




1 (Constant) 1.678 .182 9.226 .000

Convenience/accuracy .272 .085 .377 3.180 .002

a Dependent Variable: internet banking

The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. TheSt.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error.





coefficient across variable. The t value of Independent Variable convenience/accuracy is




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RESULTS and Findings

The arises from spss is given below:

Customer perception

HO: Customer perception does not impact on the effective implementation of internet

banking.(rejected)

Ha: Customer perception does impact the effective implementation of internet banking.(accepted)

RISK and privacy

HO Risk and privacy does not affect the effective implementation of internet banking(accepted)

HA : Risk and privacy does affect the effective implementation of internet banking.(rejected)

TRUSTWORTHY

HO Trustworthiness does not affect the effective implementation of internet banking.(accepted)

HA Trustworthiness does affect the effective Implementation of internet banking.(rejected)

AWARENESS

HO Awareness does not affect the effective implementation of internet.(rejected)

HA Awareness does affect the effective implementation of internet.(accepted)

Convenience Accuracy

HO convernience does not affect the effective implementation of internet banking.(rejected)

HA : Convenience does affect the effective implementation of internet banking.(accepted)

PerceptionAccording to results the null hypothesis is rejected and alternative is accepted because the t

value of perception is greater than 2.5 which is 7.553 because

The people of Pakistan have thinking that the traditional or direct banking is far better than the internet

banking or virtual banking.


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Risk and privacy

According to results the null hypothesis is accepted and alternative is rejected because the t

value of risk and privacy is lesser than 2.5 which is 0.733 because

According to results people do not concern about risk and privacy because most of peoples do

not have any awareness about internet banking so how could they know about risk involve in it.

Trustworthiness

According to results the null hypothesis is accepted and alternative is rejected because the t

value of trustworthiness is lesser than 2.5 which is 2.122 because

According to people they trust on banking system thats the reason that trustworthiness

interaction is low than other variable thats why the alternative hypothesis is rejected.

Awareness

According to results the null hypothesis is rejected and alternative is accepted because the t

value of awareness is greater than 2.5 which is 3.122 because

people think that the awareness of internet banking has strong impact because they donot

aware about the hidden charges of the bank and their services and that is un ethical practices in

people point of view.

Convenience /accuracy

According to results the null hypothesis is rejected and alternative is accepted because the t

value of convenience is greater than 2.5 which is 3.122 because

Internet banking should be user friendly and should provide accurate record in respondants point of

view is inconvenient to them.


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Conclusion and recommendation

In this report, researcher presents an overview of changing dynamics in the banking industry

that, together with new technology, are creating the need to rethink the existing paradigm of

financial services. Online banking become familiar and accepted by consumers.

In its early era commercial banks were identical to each other. Today the banks uncontrolled

competitions that will call for all the creative initiative, innovation and entrepreneurial skills those

bankers possess. Financial institutions today have reason to worry if they do not offer online banking

services, affluent customers will be stolen away by software companies, on-line access services,

brokerages or global entertainment companies.

The objective of this study was to analyze the issues preventing adoption of Internet banking in Pakistan

and the Perception regarding the Online Environment in Pakistan.

Findings show that all respondents do not have confidence to make any big financial transactions over

internet, and have no satisfaction from Internet banking services. Proper completion of the transaction

from the beginning to end is the most important service quality for Internet banking users.

Unfortunately respondent faced problem so many times during a payment process and they have to

start the whole process from the beginning which is inconvenient. This kind of problem creates a lot of

tension whether the incomplete transaction has any effect on the account balance. So they have to

check again if the account balance is ok or not. It wastes a lot of time and create mental uncertainty.


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The respondents are not satisfied with the Internet banking services. They cant rely on banks

website because some time its malfunctioning. If any mistakes happen when he makes transactions,

then they are not sure that banks staff will respond on time and will take care of secure transaction.

They dont have a good image about Internet banking. According to respondent proper delivery of the

services and keeping their promises is important to measure reliability.

Furthermore, they said that new Internet banking service delivery systems is not working according to

his expectation. They mentioned that many senior banks managers do not fully understand the strategic

and technical aspects of Internet banking services, so very few banks administration have the skills to

manage Internet banking services. Furthermore, they think banking service over the Internet is quite

unreliable in Pakistan. They find the bank site down for a couple of hours and some time whole day too.

They mentioned that one cant rely on the appropriate functioning of the website. The banks sites

mostly remain down due to low internet speed and software problems. Bankers consider minimizes

inconvenience, minimizes cost of transactions and time savingto be important benefits and chances

of government access, chances of fraud and lack of information security to be vital risks associated

with electronic banking.

The researcher tried to focus various aspects of internet banking but still there

is a need to discover many other factors specially phishing threat in internet.

Recommendation

To conduct a research with corporate customers and financial institutes to investigate all external and

internal issues of Internet baking system and customer adoption intention towards these issues.

The delivery of financial services over the Internet should be treated as a part of overall customer

service and distribution strategy.


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The Scope of internet banking is high and people are getting familiar with it so it is the responsibility of

banks that are not yet provide the internet banking services to start giving internet banking services to

their customers to compete through technology and win the customers loyalty.

Government of Pakistan must recognize their role and play their part in the game and they should make

things easier to understand for the banking sector of Pakistan. All banks should provide 24 hour-

Internet-based monitoring and assistance for IB services that have problems or need immediate

assistance.

.


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Internert Banking Final

Documents

Transcript of Internert Banking Final