Understanding adoption and continual usage behaviour towards internet banking services in Hong

163 Pages·2002·0.6 MB·English

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Department of Computing and Decision
Theses & Dissertations
Sciences
10-2001
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Siu Cheung CHAN
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Chan, S. C. (2001). Understanding adoption and continual usage behaviour towards internet banking
services in Hong Kong (Master's thesis, Lingnan University, Hong Kong). Retrieved from http://dx.doi.org/
10.14793/cds_etd.5
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UNDERSTANDING ADOPTION AND CONTINUAL USAGE BEHAVIOUR
TOWARDS INTERNET BANKING SERVICES IN HONG KONG

by
CHAN Siu Cheung

A thesis
submitted in partial fulfillment
of the requirements for the Degree of
Master of Philosophy

Lingnan University

October 2001
ABSTRACT

Understanding Adoption and Continual Usage Behaviour
towards Internet Banking Services in Hong Kong

by

CHAN Siu Cheung

Master of Philosophy

Banks and financial institutions in Hong Kong are increasingly finding
themselves facing rapid increases in turbulence and complexity, leading to greater
uncertainty and increased competition. Customers are also becoming more
demanding. Apart from the traditional type of banking services, customers today
require more personalized products and services, and access to such services at any
time, and at any place. Although there is no panacea for banks to stay competitive,
Internet Banking is one of the advanced information technologies they can employ to
achieve a high level of customer services.

Internet Banking is an emerging technology that permits conduct of banking
transactions through the Internet. From the banks’ point of view, it requires the
lowest transaction cost among various channels, just one percent of branch-based
banking. It also can improve the efficiency and effectiveness of corporate business
processes through elimination of paper work. One of the many benefits of Internet
Banking is that customers can use bank services 24 hours a day from anywhere in the
world.

This study investigates university students' adoption/continual usage behaviour
within the context of Hong Kong Internet Banking services. A research framework
based on the extension of Technology Acceptance Model and Social Cognitive
Theory was developed to identify factors that would influence the adoption/continual
usage of Internet Banking. The framework includes subjective norm, image, result
demonstrability, perceived risk, computer self-efficacy, perceived usefulness,
perceived ease of use and intention constructs. A diverse sample of undergraduate
and postgraduate students of seven universities in Hong Kong was used to test the
models.

Structural Equation Modeling was used to examine the entire pattern of
intercorrelations among the eight proposed constructs and to test related propositions
empirically. The results reveal that both subjective norm and computer self-efficacy
play significant roles in influencing the intention to adopt Internet Banking indirectly.
Perceived usefulness has significant positive effect on intention to adopt, this result
supports the extension of the Technology Acceptance Model. Perceived ease of use
has significant indirect effect on intention to adopt/continual usage through perceived
usefulness, while its direct effect on intention to adopt is not significant in this
empirical study. Theoretical contributions and practical implications of the findings
are discussed and suggestions for future research are presented.
I declare that this thesis « Understanding Adoption and Continual Usage
Behaviour towards Internet Banking Services in Hong Kong » is the product of my
own research and has not been published in any other publications.

CHAN Siu Cheung
October 2001
T O C
ABLE F ONTENTS

TITLE PAGE
ABSTRACT
DECLARATION OF ORIGINALITY
APPROVAL SHEET
TABLE OF CONTENTS...........................................................................................i
LIST OF TABLES.....................................................................................................iv
LIST OF FIGURES...................................................................................................v
LIST OF SYMBOLS.................................................................................................vi
LIST OF ABBREVIATIONS....................................................................................vii
ACKNOWLEDGEMENTS......................................................................................viii

C 1 I
HAPTER NTRODUCTION
1.1 Background.........................................................................................................1
1.2 Objectives and Importance of the Research.....................................................4
1.2.1 Research Objectives................................................................................5
1.2.2 Significance of the Study........................................................................6
1.3 Organization of the Thesis..................................................................................8

C 2 I B H K
HAPTER NTERNET ANKING IN ONG ONG
2.1 Conception of Internet Banking.........................................................................10
2.2 The Cost-Effectiveness of Internet Banking.....................................................11
2.3 Technological Evolution of Hong Kong Retail Banking Services....................12
2.3.1 Automatic Teller Machine.......................................................................12
2.3.2 Telephone Banking..................................................................................12
2.3.3 Home Banking.........................................................................................13
2.3.4 Internet Banking......................................................................................14
2.4 Direct Observations of Internet Banking Services in Hong Kong...................15
2.4.1 View-Only Functions..............................................................................19
2.4.2 Account Control Functions....................................................................19
2.4.3 New Services Applications.....................................................................20
2.4.4 Investment Functions..............................................................................20
2.4.5 Other Services..........................................................................................21
2.4.6 Conclusion...............................................................................................22
2.5 Chapter Summary...............................................................................................23

C 3 L R
HAPTER ITERATURE EVIEW
3.1 Social Psychology...............................................................................................24
3.1.1 Theory of Reasoned Action (TRA)........................................................25
3.1.2 Theory of Planned Behaviour (TPB)......................................................27
i
3.2 Information Technology Acceptance................................................................31
3.2.1 Technology Acceptance Model (TAM)..................................................31
3.2.2 Differences between TAM and TPB.......................................................32
3.2.2.1 Degree of Generality................................................................33
3.2.2.2 Social Influences......................................................................34
3.2.2.3 Behavioural Control.................................................................35
3.2.3 Extension of Technology Acceptance Model (TAM2)..........................36
3.3 Risk Perception...................................................................................................38
3.4 Social Cognitive Theory - Self-Efficacy............................................................40
3.5 Chapter Summary...............................................................................................44

C 4 M
HAPTER ETHODOLOGY
4.1 The Research Framework...................................................................................45
4.2 Development of Hypotheses..............................................................................47
4.3 Questionnaire Design.........................................................................................54
4.3.1 Salient Belief Elicitation..........................................................................54
4.3.2 Measurements of the Constructs............................................................55
4.4 Pilot Tests...........................................................................................................56
4.4.1 Online Questionnaire...............................................................................57
4.5 Sampling and Data Collection Procedure.........................................................58
4.6 Statistical Analysis..............................................................................................61
4.6.1 Structural Equation Modeling.................................................................62
4.6.2 LISREL....................................................................................................65
4.6.3 Assessment of Model Fit........................................................................67
4.7 Refinement and Validation of the Scale Items..................................................72
4.7.1 Refinement of the Scale Items................................................................72
4.7.2 Testing of Factor Structure of the Dimensions......................................72
4.7.3 Unidimensionality...................................................................................73
4.7.4 Reliability.................................................................................................73
4.7.5 Convergent and Discriminant Validity...................................................75
4.8 Chapter Summary...............................................................................................76

C 5 D A
HAPTER ATA NALYSIS
5.1 Sample Demographics........................................................................................77
5.2 Confirmatory Factor Analysis of the Constructs..............................................81
5.2.1 Model Specification.................................................................................81
5.2.2 Model Assessment..................................................................................83
5.2.3 Model Modification.................................................................................85
5.2.3.1 Residuals..................................................................................85
5.2.3.2 Modification Indices................................................................85
5.2.4 Post Hoc Analyses..................................................................................87
5.2.5 Constructs Reliability and Validity.........................................................89
5.3 Analysis for Structural Path Models..................................................................90
5.3.1 Users of Internet Banking.......................................................................90
5.3.2 Potential Adopters of Internet Banking..................................................93
5.3.3 Explaining Intention to Adopt/Continual Usage...................................96
ii
5.3.4 Explaining Perceived Usefulness............................................................99
5.3.5 Explaining Perceived Ease of Use..........................................................101
5.3.6 Explaining Image.....................................................................................101
5.3.7 Gender Differences..................................................................................102
5.4 Respondent Characteristics................................................................................103
5.4.1 Banking Habits........................................................................................103
5.4.2 Internet Banking Knowledge and Preferences.......................................109
5.4.3 Expectations for Internet Banking Services...........................................112
5.5 Chapter Summary...............................................................................................115

C 6 C
HAPTER ONCLUSION
6.1 Contributions and Theoretical Implications......................................................116
6.2 Practical Implications..........................................................................................118
6.3 Limitations.........................................................................................................123
6.4 Future Research Directions................................................................................124
6.5 Conclusion.........................................................................................................126

A
PPENDICES
A. Internet Banking Services in Hong Kong (May 2000)....................................127
B. Internet Banking Services in Hong Kong (May 2001)....................................129
C. Questionnaire ....................................................................................................131
D. Mean Score System...........................................................................................136
E. Descriptive Statistics and Intercorrelations......................................................138

B
IBLIOGRAPHY...................................................................................................140
iii
L O T
IST F ABLES

Table 2.1 Relative Costs per Transaction for the US Banks.................................11
Table 4.1 Definition of the Research Constructs...................................................47
Table 4.2 Reliability Analysis of the Constructs in the Pilot Test.........................57
Table 4.3 Major Computer User Age Groups (1994 and 1998)............................60
Table 4.4 Details of Selected Student Canteens....................................................61
Table 5.1 Sample Demographics............................................................................78
Table 5.2 Distribution of Respondents by Universities........................................79
Table 5.3 Number of Hours Spent on the Internet per Week...............................79
Table 5.4 Fit Indices for Measurement Models.....................................................83
Table 5.5 Squared Multiple Correlations...............................................................84
Table 5.6 Fit Indices for the Final CFA Model......................................................87
Table 5.7 Standardized Parameter Estimates for the Final CFA Model...............88
Table 5.8 Assessment of Unidimensionality, Reliability and
Convergent Validity..............................................................................89
Table 5.9 Fit Indices for Continual Usage Models................................................92
Table 5.10 Fit Indices for Adoption Models...........................................................94
Table 5.11 Summary of Research Results..............................................................95
Table 5.12 Number of Banks that the Respondents Have Accounts in................104
Table 5.13 Rankings of Six Banking Channels Based on Frequency of Use.......105
Table 5.14 Frequency of Use of the Banking Services per Week..........................108
Table 5.15 Sources of Internet Banking Information.............................................110
Table 5.16 Reasons for Not Using Internet Banking..............................................111
Table 5.17 Rankings of Expected Internet Banking Services................................112
Table 5.18 Preferences on Internet Banking Fee Structure....................................114
iv