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Internet Banking System in Pakistan
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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Internet Banking System in Pakistan
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
http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6X4K-4V3HFC8-1&_user=7427071&_coverDate=06%2F30%2F2009&_alid=1045107436&_rdoc=16&_fmt=full&_orig=search&_cdi=7329&_sort=r&_docanchor=&view=c&_ct=8573&_acct=C000046979&_version=1&_urlVersion=0&_userid=7427071&md5=d0c525c67135441cfe9500c9790670f1#bib43http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6X4K-4V3HFC8-1&_user=7427071&_coverDate=06%2F30%2F2009&_alid=1045107436&_rdoc=16&_fmt=full&_orig=search&_cdi=7329&_sort=r&_docanchor=&view=c&_ct=8573&_acct=C000046979&_version=1&_urlVersion=0&_userid=7427071&md5=d0c525c67135441cfe9500c9790670f1#bib438/2/2019 Internert Banking Final
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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
Variables Entered/Removed(b)
ModelVariablesEntered
VariablesRemoved Method
1 riskprivacy(a)
. Enter
a All requested variables entered.b Dependent Variable: internetbanking
Model Summary
Model R R SquareAdjusted R
SquareStd. Error ofthe Estimate
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.
The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R
Square values (.009) mean 0.9% reliable to be used for estimation of population.
The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The
Std. Error value show that 52% Fluctuation of Sampling Mean.
The R change shown that differences between R-value & Adjusted R square
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ANOVA
ModelSum of
Squares df Mean Square F Sig.
1 Regression .146 1 .146 .538 .466(a)
Residual 16.531 61 .271
Total 16.677 62
a Predictors: (Constant), riskprivacyb 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 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.
The F Test value (0.538) shows the combination of all variable, overall significances of the Model its
mean one independent variable risk and privacy on Dependent variable internet banking and
Observation of Independent Variable met.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 2.093 .189 11.059 .000
riskprivacy .064 .088 .093 .733 .466
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 (.189) value shows the 18% of fluctuation of sampling mean and the St.d Error of
Independent Variable perception is (.088) value shows the 8% of fluctuation of sampling mean.
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
Variables Entered/Removed(b)
Model VariablesEntered VariablesRemoved Method
1 trustworthiness(a)
. Enter
a All requested variables entered.b Dependent Variable: internetbanking
Model Summary
Model R R SquareAdjusted R
SquareStd. Error ofthe Estimate
1 .262(a) .069 .053 .50458
a Predictors: (Constant), trustworthiness
The R value show Coefficient of Correlation is the numerical measure of strength of the linear
relationship between two variables. The R value (.262(a)
) is show that there is positive correlation
between the trustworthiness Dependent Variable internet banking.
The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R
Square values (.069) mean 6% 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 50% Fluctuation of Sampling Mean.
The R change shown that differences between R-value & Adjusted R square
ANOVA(b)
ModelSum of
Squares df Mean Square F Sig.
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
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 (4.504) shows the combination of all variable, overall significances of the Model its
mean one independent variable trustworthiness on Dependent variable internet banking and
Observation of Independent Variable met.
Coefficients(a)
Model
UnstandardizedCoefficients StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 1.904 .163 11.667 .000
trustworthiness .165 .078 .262 2.122 .038
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 (.163) value shows the 16% of fluctuation of sampling mean and the St.d Error of
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
(2.122).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.
Regression of awareness
Variables Entered/Removed(b)
ModelVariablesEntered
VariablesRemoved Method
1 awareness(a)
. Enter
a All requested variables entered.
b Dependent Variable: internetbanking
Model Summary
Model R R SquareAdjusted R
SquareStd. Error ofthe Estimate
1 .371(a) .138 .124 .48551
a Predictors: (Constant), awareness
The R value show Coefficient of Correlation is the numerical measure of strength of the linear
relationship between two variables. The R value (.371(a))is show that there is positive correlation
between the awareness Dependent Variable internet banking.
The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R
Square values (.138) mean 13% reliable to be used for estimation of population.
The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The
Std. Error value show that 48% Fluctuation of Sampling Mean.
The R change shown that differences between R-value & Adjusted R square.
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ANOVA
ModelSum of
Squares df Mean Square F Sig.
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
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 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.
The F Test value (9.750) shows the combination of all variable, overall significances of the Model its
mean one independent variable awareness on Dependent variable internet banking and Observation of
Independent Variable met.
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Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
1 (Constant) 1.768 .158 11.182 .000
awareness .255 .082 .371 3.122 .003
a Dependent Variable: internet banking
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 (.158) value shows the 15% of fluctuation of sampling mean and the St.d Error of
Independent Variable awareness is (.082) value shows the 8% of fluctuation of sampling mean.
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 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)
ModelVariablesEntered
VariablesRemoved Method
1 convenienceaccuracy(a)
. Enter
a All requested variables entered.b Dependent Variable: internetbanking
Model Summary
Model R R SquareAdjusted R
SquareStd. Error ofthe Estimate
1 .377(a) .142 .128 .48427
a Predictors: (Constant), convenience accuracy
The R value show Coefficient of Correlation is the numerical measure of strength of the linear
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.
The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R
Square values (.142) mean 14% reliable to be used for estimation of population.
The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The
Std. Error value show that 48% Fluctuation of Sampling Mean.
The R change shown that differences between R-value & Adjusted R square.
ANOVA(b)
ModelSum of
Squares df Mean Square F Sig.
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
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 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.
The F Test value (10.111) shows the combination of all variable, overall significances of the Model its
mean one independent variable trustworthiness on Dependent variable internet banking and
Observation of Independent Variable met.
Coefficients
Model
UnstandardizedCoefficients
StandardizedCoefficients
t Sig.B Std. Error Beta
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.
St.d Error of Constant (.182) value shows the 18% of fluctuation of sampling mean and the St.d Error of
Independent Variable perception is (.085) value shows the 8% of fluctuation of sampling mean.
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 convenience/accuracy is
(3.180).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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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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