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RIJBFA Volume 2, Issue 8(Aug 2013) ISSN: 2277- 100X

Journal of Radix International Educational and Research Consortium

1 | P a g e www.rierc.org

M-BANKING SERVICES: AWARENESS AND PERCEPTION STUDY OF SELECTED CITIES OF GUJARAT

Dr. Mamta Brahmbhatt, Associate Professor

National Institute of Cooperative Management (Now known as Shri Jairambhai Patel Institute of Business Management

And Computer Applications- SJPI- NICM) Gandhinagar, Gujarat Post Graduate Center of Gujarat Technological University-MBA

Nr. Indroda Circle, Gandhinagar-382007. Gujarat

Dr. Narayan Baser, Associate Professor National Institute of Cooperative Management

(Now known as Shri Jairambhai Patel Institute of Business Management And Computer Applications- SJPI- NICM) Gandhinagar, Gujarat Post Graduate Center of Gujarat Technological University-MBA


Prof. Rashesh Patel, Assistant Professor National Institute of Cooperative Management

(Now known as Shri Jairambhai Patel Institute of Business Management And Computer Applications- SJPI- NICM) Gandhinagar, Gujarat Post Graduate Center of Gujarat Technological University-MBA


ABSTRACT

Research objective

This study attempts to measure Customer Awareness and Perception (Actual Usage of Services M-Banking

against banking overall) towards M-Banking Services among private and public bank customers.

Design/Methodology/approach

A survey has been used to collect primary data and 196 questionnaires (respondents) were used in final

analysis. Questionnaire items were developed through a two stage process involving a review of the

measurement scale employed in previous studies and secondly focus group interviews were conducted to

identify the M-banking attributes for assessing customer’s awareness and perception.

A Journal of Radix International Educational and

Research Consortium

RIJBFA

RADIX INTERNATIONAL JOURNAL OF BANKING, FINANCE AND ACCOUNTING




Data Analysis

SPSS and Microsoft Excel have been used to analyze and interpret the data. Descriptive statistics and

inferential statistical techniques like rank analysis and chi-square have been used.

Findings and analysis

Most of the respondents (92.3%) are aware of Mobile Banking Services, more awareness needs to be

created about the fact that Mobile Banking is safe and reliable services and cost effective service too.

Limitations of research/ Future research directions

Replications among other samples are needed to validate the current finding. The research is just a small

step in understanding the constructs of Customer Awareness and Perception. The causal relationships

between the two have not been investigated.

Managerial implications

The findings presented in this paper can be used by banks to evaluate their readiness profile, in order to

pinpoint strengths and weaknesses of their e-banking services. Bank service providers should continually

monitor technology used for mobile banking to ensure security and confidentiality, integrity, authenticity

and non- reputability i.e. authentication by ID and PIN. Technology based innovations and improvements

serves as base for competitive advantage.

Originality/value

The purpose of the study is to fill up significant gaps in the literature on mobile banking landscape in the

context of developing countries like India especially in Gujarat state. This paper makes a valuable

contribution given the fact that there are only a limited number of comprehensive studies dealing with the

assessment of customer awareness and perception towards M-banking Services among private and public

bank customers Gujarat state.

Keywords: Customer Awareness, Customer Perception, E-Banking, Mobile Banking services, Mobile

communication systems.

INTRODUCTION

With the surfeit of advanced telecommunication systems, potential for Mobile Banking and Commerce is

seeing a paradigm shift with every attempt to penetrate the market and psyche of the consumer.

Leveraging banking services and available mobile technology, large number of mobile users across the

country can avail a financial inclusion and convenient commerce. Rural and unbanked category shows a

potential of huge growth, provided the Indian regulatory authorities provides for a greater support and a

green signal as to productive usage of available resources.

In the developed and developing markets, Mobile Banking would find newer ways to connect with the

customers and utilize the mobile channel comprehensively. Mobile banking would take a new leap with




moving to higher value chain. Therefore the envisaged functional improvement based on the growth of

technology, customer adoption, changing customer needs have given rise to higher level of objectives from

achieving better utilization from the existing utilities in the Mobile banking world. However the scope of

mobile banking is extending rapidly to further types of financial products and services. With the

transparent and stringent regulatory mechanisms Indian mobile banking can grow under guidelines of

International Financial Corporation for the betterment of commerce and achieve the motto of “finance for

all” with high degree potential of scaling up in latent regions through deeper penetration through mobiles.

REGULATION FOR MOBILE BANKING

Empowered by the Reserve Bank of India (“RBI”) Act, 1934 and the Payment and Settlement Systems Act,

2007, RBI has taken several initiatives in the recent past for ensuring development of technical and

institutional infrastructure to meet the electronic payment system and banking needs of the country. With

the increasing usage of mobile phones, mobile banking has become the latest banking method. In addition,

for e-commerce transactions a gradual shift to cashless and online payments is happening in India. The

banking and financial environment in India is changing and moving towards internet banking, online

payments and e-banking, thereby compelling the regulatory bodies to react and provide secured

environment for such transactions and the regulations to handle legal issues arising out of such electronic

or mobile transactions. The electronic payment system in India is burgeoning to match the international

banking standards and cope up with the ever-growing challenges posed by the electronic systems.

Generally, RBI issues directions for banks for effective commercial transactions. However, with the growing

usage of technology in the banking system and especially the penetration of mobile phone and ever

increasing usage of mobile phones for banking, the government decided to have a regulation governing the

mobile operators to safeguard the commercial transactions conducted through mobile phones. Following

recommendation of Inter-Ministerial Group on delivery of financial services through mobile phone that

asked Telecom Regulatory Authority of India (“TRAI”) to draw up guidelines to ensure high availability of

associated communication services, the Mobile Banking (Quality of Service) Regulations 2012 “Regulation”)

was issued. As far as security of the transaction is concerned, the crucial components are authenticity and

authorization, integrity, non-repudiation, and confidentiality.

http://psalegal.com/upload/publication/assocFile/BankingLawsBulletin-IssueXII.pdf

LITERATURE REVIEW

Peter Tobbin 1(2012) presented a qualitative study on mobile banking technology acceptance by the rural

unbanked. The number of mobile phone users has long exceeded the number of people with bank

accounts across the world. The researcher determined the factors that will affect the acceptance of mobile

banking by the rural unbanked. The findings of the study indicated that perceived usefulness and perceived

1 Peter Tobbin, (2012) "Towards a model of adoption in mobile banking by the unbanked: a qualitative study", info, Vol. 14 Iss: 5,

pp.74 – 88

http://psalegal.com/upload/publication/assocFile/BankingLawsBulletin-IssueXII.pdf




ease of use from the technology acceptance model, economic factors and trust influence the rural

unbanked's intention to adopt and use mobile banking services. “Towards a model of adoption in mobile

banking by the unbanked: a qualitative study", Loay Salhieh, Jamal Abu-Doleh, Nada Hijazi 2(2011)

proposed and validated a framework that can be used for assessing the level of banks' readiness for

providing e-banking services in Jordan in his paper titled "The assessment of e-banking readiness in

Jordan".The researcher used three constructs to propose a framework that can assess e-banking readiness:

perceptions of bankers, perceptions of customers, and IT infrastructure in banks. However, there is

evidence in this paper to support that e-banking has achieved a degree of strategic and operational

importance among bank managers. Also, customers are positive about embracing new banking channels.

But it seems that technological aspects and IT employees' skills are paramount concerns.

Sylvie Laforet, Xiaoyan Li 3(2005) investigated the market status for online/mobile banking in China in his

paper titled "Consumers’ attitudes towards online and mobile banking in China". With the recent and

forecasted high growth of Chinese electronic banking, researcher showed potential to develop into a

world-scale internet economy and requires examination. The demographic, attitudinal and behavioural

characteristics of online and mobile bank users were examined. The results showed Chinese online and

mobile bank users were predominantly males, not necessarily young and highly educated, in contrast with

the electronic bank users in the West. The issue of security was found to be the most important factor that

motivated Chinese consumer adoption of online banking. Main barriers to online banking were the

perception of risks, computer and technological skills and Chinese traditional cash-carry banking culture.

The barriers to mobile banking adoption were lack of awareness and understanding of the benefits

provided by mobile banking.

Ulun Akturan, Nuray Tezcan 4(2012) investigated consumers' mobile banking adoption through an

integration of the technology acceptance model (TAM) with work on perceived benefits and perceived

risks. In his paper titled " Mobile banking adoption of the youth market: Perceptions and intentions". Data

were collected from 435 university students who were non-users but future prospects, and analyzed by

structural equation modelling (SEM). It was found from the survey results that perceived usefulness,

perceived social risk, perceived performance risk and perceived benefit directly affect attitudes towards

mobile banking, and that attitude is the major determinant of mobile banking adoption intention. In

addition, no direct relationship between perceived usefulness and intention to use, perceived ease of use

and attitude, financial risk, time risk, security/privacy risk and attitude was detected.

2 Loay Salhieh, Jamal Abu-Doleh, Nada Hijazi 2(2011) "The assessment of e-banking readiness in Jordan", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 4 Iss: 4, pp.325 3 Sylvie Laforet, Xiaoyan Li

3(2005) "Consumers’ attitudes towards online and mobile banking in China", International Journal of

Bank Marketing, Vol. 23 Iss: 5, pp.362 - 380 4 Ulun Akturan, Nuray Tezcan (2012) “Mobile banking adoption of the youth market: Perceptions and intentions", Marketing

Intelligence & Planning, Vol. 30 Iss: 4, pp.444 – 459




Christopher Gan, Mike Clemes, Visit Limsombunchai, Amy Weng 5(2006) examined consumers' choices

between electronic banking and non-electronic banking in New Zealand. . The decision to use electronic

banking is hypothesised to be a function of service quality dimensions, perceived risk factors, user input

factors, price factors, service product characteristics, individual factors and demographic variables such as

age, gender, marital status, income, etc. in this research paper. Logistic regression is used to analyse the

data. The study result showed that the service quality, perceived risk factors, user input factors,

employment, and education are the dominant variables that influence consumers' choice of electronic

banking and non-electronic banking channels.

RATIONALE BEHIND RESEARCH

Mobile banking has been an innovation in commercial banking sector in recent years. The growth of mobile

banking, especially in emerging economies is attributable to the rapid advances in IT, financial markets

reform, evolving macro and micro economic factors. Entire world is conscious about innovative products

& services and seek to develop revolutionary technology which can be cost competitive and offer services

which serves the need. There is a need to evaluate such customer facilitated services for its sustainability

and future. It is also necessary to identify customer satisfaction about these services. Researchers have

undertaken this study with a viewpoint of unveiling the customer awareness and perception about

different M-banking services.

OBJECTIVES OF THE STUDY

The core objective of the this research is

To find out the awareness of the customers regarding various Mobile Banking Services provided by the

banks.

To find out the relation between the awareness and usage of the M-banking among the bank

customers.

To find out the factor which mostly discourage bank customers from using M-banking services.

SAMPLE SIZE DETERMINATION

For determining the sample size, following formula was used.

A survey is being planned to determine what proportion of people in a certain region are aware about M-

banking services. It is believed that the proportion cannot be greater than 0.15. A 95 percent confidence

interval is desired width d=0.05.

Now using the formula given below:

Here Z = 1.96, p = 0.15, q = 0.85, d = 0.05,

5 Christopher Gan, Mike Clemes, Visit Limsombunchai, Amy Weng, (2006) "A logit analysis of electronic banking in New Zealand",

International Journal of Bank Marketing, Vol. 24 Iss: 6, pp.360 - 383




n = 195.92 ≈ 196

So we have taken my sample size is 196.

METHODOLOGY

This is an analytical study based on the primary data collected through scientifically developed

questionnaire. The questionnaire has been personally administered on sample size of 196, chosen on a

convenient basis from the cities of Gujarat State. Single Cross Sectional Descriptive Research Design has

been used in the research. Second, in-depth interviews were held with customers to establish the

evaluation criteria and the factors related to M-banking. Third, a questionnaire was constructed and piloted.

Care was taken to minimize the possibility of wrong interpretation and biased views. Pilot study results were

used to determine sample size. The five-point likert scale was used to analyze the different variables and

their relationship. For the analysis of data statistical methods are applied with the aid of SPSS (Statistical

Package for Social Science) software, version 17.0 and excel.

CHARACTERSTICS OF THE SAMPLE

The population was comprised of retail customers of bank as defined in similar studies in literature. The

population of this study is customers of retail banks of Ahmadabad and Gandhinagar.

TABLE 1: TABLE SHOWING FREQUENCY DISTRIBUTION OF DEMOGRAPHIC ATTRIBUTES

Demographic variables Category Frequency

Age

18 -25 70

26-35 61

36-50 53

51-60 12

Total 196

Monthly Income

1,00,000 - 2,00,000 29

2,00,000 - 3,00,000 100

3,00,000 - 4,00,000 41

4,00,000 - 5,00,000 22

5,00,000 and above 4

Total 196

Occupation

Students 52

Business man 66

Service 66

Retired Employee 4




House Wife 8

Total 196

Education Level

Graduates 25

Professional 82

Post Graduate 89

Total 196

Gender

Male 155

Female 41

Total 196

DESCRIPTIVE STATISTICS

Chart 1 : Customer Awareness about M- Banking Services

Chart shows the awareness level of 196 respondents with reference to Mobile Banking including the usage

of mobile for financial transactions like Money transfer, Bill Payments, Banking Inquiry and other

functionalities like updates and transactions as to financial instruments like Mutual fund and others. The

data serves as a base to Chi-Square analysis and further inferential statistics.




Chart 2: usage of Mobile banking services

Above chart shows the actual usage of Mobile banking services by the respective percentile respondents for

further comparison with awareness level of customers regarding mobile banking services.

INFERENTIAL STATISTICS

Ho: - There is no significant association between Age group and Awareness of Mobile Banking Service by customers.




TABLE 2: CROSS TABULATION -USAGE OF M-BANKING SERVICES AND AVERAGE

MONTHLY BANKING TRANSACTIONS

Average monthly banking transactions

0-2 3-5 6-8 8-10 more than 10 Total

Have you ever utilized

mobile banking services?

Yes 12 11 25 12 15 75

No 50 41 20 7 3 121

Total 62 52 45 19 18 196

TABLE 3 : CHI-SQUARE TESTS

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 41.986a 4 .012

Likelihood Ratio 43.174 4 .018

Linear-by-Linear Association 37.828 1 .001

N of Valid Cases 196

From the output tables the chi- square test read a significance level of 0.006 at 95% confidence level. For

95%, significance level is 0.05, that is, (1- 0.95), so the above result shows that at 0.000 (which is greater

than 0.05), Here we reject the null hypothesis, so there is significant association between usage of M-

banking service and Average monthly banking transactions.




Table 4 : Rank Analysis of Customers Willingness towards M-Banking Services:

Customers willingness towards M-Banking services

Variable 1 2 3 4 5 Score WAM Rank

Money Transfer 133 48 9 3 3 283 1.443 2

Bill Payments 124 114 30 8 15 291 1.485 3

Access Administration 49 126 207 48 15 445 2.27 9

Card Management 52 118 186 76 20 452 2.306 10

Mobile Recharging 121 56 81 60 25 343 1.75 5

Selling and Purchasing of Financial

Instruments 40 112 195 120 25 492 2.51 12

Insurance Policy Management 27 112 228 116 40 523 2.668 13

Balance Enquiry 135 92 36 0 15 278 1.418 1

Mini-Statement and Statement Request 122 96 66 16 0 300 1.53 4

Transaction and Balance Threshold 39 110 276 120 5 550 2.806 14

Ordering Cheque book 44 148 198 36 15 441 2.25 8

Status of Cheque and its stop payment 59 134 156 72 0 421 2.147 7

Recent Transaction 85 138 108 12 15 358 1.826 6

Mutual fund / equity statement 34 122 219 100 15 490 2.5 11

Above rank analysis depict that bank customers are most willing to use the balance enquiry services

through their mobile phones followed by Money Transfer and Bill payments at 2nd and 3rd rank

respectively.

MAJOR FINDINGS

Most of the respondents (92.3%) are aware of Mobile Banking Services, more awareness needs to be

created about the fact that Mobile Banking is safe and reliable services in a cost effective manner. In

Gandhinagar city most of respondents (61.7%) are the customer of public sector banks, but the banks are

either not providing the M-banking service or they are inefficient in providing M-banking services.

According to most of the respondents (59.69%) the biggest advantage of M-banking services is its

anywhere anytime availability of M-banking services.

There is significant association between Age group and Awareness of Mobile Banking Service offered by

banks. According to the survey, most of the customers (46.4%) are willing to use M-banking services

through the medium of WAP (mobile internet) because they find it comparatively easy and safe.




Majority of the respondents are attracted to use various M-banking service offered by different banks.

Most of the customers who are using M-banking services, they are using it because of its multiple

advantages like easy access, transaction speed and availability.

LIMITATIONS OF RESEARCH

Few limitations must be acknowledged that suggest caution in generalization. The research is just a small

step in understanding the constructs of Customer Awareness and Perception. The causal relationships

between the two have not been investigated. The present study is based on a moderate sample size and

areas covered are cities of Gujarat state therefore the results of this study cannot be generalized. The total

sample size was 196 useable questionnaires, after disaggregation into the demographic categories, a few

of subgroups were small in number. For example, the sample is skewed to a particular gender group with

20 Percent of the respondents being female.

FUTURE RESEARCH DIRECTIONS

Future researcher could make several extensions of the current study. As mentioned above the research is

just a small step in understanding the constructs of Customer Awareness and Perception. The causal

relationships between the two have not been investigated. Researcher can develop more specific scale like

TAM by incorporating link between various criteria designed in that model. Researcher can find a causal

link between Customer Awareness and Perception and their effect on variables of TAM (Technology

Acceptance Model). Future research could examine a wider respondent base across the various states of

India with more diversified sample in the research. Future researchers could use quota sampling across the

different income groups, gender and age categories.

IMPLICATIONS

An understanding of the factors influencing the adoption of mobile banking services is essential for

marketing practitioners so as to capitalize upon the underlying benefits of mobile banking and hence, offer

banking customers an experience coupled with a greater level of personalization and customization. The

demand for mobile banking services can be linked to demand for savings and loan services. Banks should

further consider educating consumers through demonstrations and training to better equip them to

master mobile banking systems.

CONCLUSION

Analysis serves as an attempt for sizing the direct market potential with research on the consumer

perceptions of mobile banking. The study estimates the potential mobile money users and their

requirements as well as preferences, leading to base of bottom up modeling for analyzing revenue through

generation of ARPU model for Mobile companies with varied usage of mobile banking and mobile

transaction epiphany in futuristic terms.




Results enables the researchers to identify the consumers preference, perceptions and opportunities in

Mobile Banking industry The research serves as an instrumental effort for possible reduction of barriers as

understood and found from the research held. With greater transparency and making consumers well

equipped with knowledge, technology and regulations the Mobile Banking industry can be an extended

evolution in E – Banking for the years to come.

REFERENCES

Christopher Gan, Mike Clemes, Visit Limsombunchai, Amy Weng, (2006) "A logit analysis of electronic

banking in New Zealand", International Journal of Bank Marketing, Vol. 24 Iss: 6, pp.360 – 383

Donne and Telleze, (2008), Mobile banking and economic development: Linking adoption,

impact, and use, Asian Journal of Communication Vol. 18, No. 4, December 2008, 318-332.

Ghosal S. N. (2010) Mobile Banking For Inclusive Growth, PNB quarterly journal, vol. VI no. 1,

january-march-2010

Loay Salhieh, Jamal Abu-Doleh, Nada Hijazi (2011) "The assessment of e-banking readiness in Jordan",

International Journal of Islamic and Middle Eastern Finance and Management, Vol. 4 Iss: 4, pp.325

M-Commerce breakthrough in developing countries [Master's Thesis] by Raymond Adjei Boadi.

Peter Tobbin, (2012) "Towards a model of adoption in mobile banking by the unbanked: a qualitative

study", info, Vol. 14 Iss: 5, pp.74 – 88

Sylvie Laforet, Xiaoyan Li (2005) "Consumers’ attitudes towards online and mobile banking in China",

International Journal of Bank Marketing, Vol. 23 Iss: 5, pp.362 – 380

Thanika Devi Juwaheer, Sharmila Pudaruth, Priyasha Ramdin, "Factors influencing the adoption of

internet banking: a case study of commercial banks in Mauritius", World Journal of Science,

Technology and Sustainable Development, Vol. 9 Iss: 3, pp.204 – 234

Tiwari, and Buse, (2007), The mobile Commerce prospects: A strategic Analysis of Opportunities.

TRAI, Annual Report 2009-10.

Ulun Akturan, Nuray Tezcan (2012) “Mobile banking adoption of the youth market: Perceptions and

intentions", Marketing Intelligence & Planning, Vol. 30 Iss: 4, pp.444 – 459

Websites

http://www.kansascityfed.org/PUBLICAT/PSR/Briefings/PSR-BriefingSept07.pdf accessed on 02/02/2011

http://www.ifc.org/ifcext/eastasia.nsf/AttachmentsByTitle/Mobile_banking_report/$FILE/Mobile+

Banking+Final+Report.pdf accessed on 14/02/2011

http://www.spidercenter.org/files/m-banking_study.pdf accessed on 15/3/2011

http://www.cgap.org/gm/document1.9.42213/India_Consumer_Protection_Diagnostic_Report.pdf

accessed on 27/02/2011

http://www.spidercenter.org/files/m-banking_study.pdf%20accessed%20on%2015/3/2011

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