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Out of the 21 1 eople who responded to the survey, only 1 69 responses were deemed to be usable. It was found that awareness of local m-banking services is quite high and usage level is reasonable. Convenience, time and effort savings, privacy, ubiquitous access to banking services, compatibility with lifestyle and banking needs were identified as the main factors motivating mbanking adoption. Perceived security risk and reliability were found to be the main obstacles to m-banking usage. It was also found that m-banking usage is not associated with age, gender and salary. There is, however, an association between education and -banking usage.

As to the limitation of the study, the use of convenience sampling limits the generalisation of the findings of the study. The study has practical implications for local banks either offering or planning to launch m- banking services in Mauritius as factors preventing and encouraging usage Of m-banking are discussed. Relatively few or no investigations on m-banking adoption and usage in Mauritius have been made. The constructs of Technology Acceptance Model (TAM) and Innovation Diffusion Theory (IDT) are integrated and extended with perceived risk and cost to ascertain mbanking usage and doption.

The study, therefore, offers valuable insights on m-banking in Mauritius. Key Words: Mobile Banking Mauritius Field of Research: Technology and Management 1. 0 Introduction The advent of the mobile phone marked the beginning of a revolution in the ways people communicate and transact. It has redefined communication and has reshaped the way services are provided. The mobile phone has undeniably brought a paradigm shift, affecting both the lives of people and the business environment. It has permeated the lives of billions Of people around the world; becoming for many an indispensable device (Laukkanen, 007a).

The mobile phone is also an everevolving device becoming increasingly sophisticated, slimmer, and multifunctional. It allows performing several activities such as communicating connecting to the internet, obtaining services and effecting payments These distinctive features have made the mobile phone evolve into a channel conducive for the provision of many services. Many firms are increasingly realising I Mr Ramdhony Dineshwar, Departmant of Law and Management, University Of Mauritius, Mauritius Email: d. [email protected] ac. mu 2 Mr Munien Steven, University of Mauritius, Mauritius

February 201 3, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 that there are indeed huge opportunities to be tapped with the mobile phenomena. The soaring and large mobile phone user base is pushing firms more and more towards “mobile” strategies. The financial services sector, in particular, has responded quickly to this mobile era with many financial institutions starting to offer mobile services (Laukkanen, 2007b). Many banks around the world have launched mobile banking services in an attempt to provide ubiquitous access to banking services.

With mobile banking, customers are able to have nywihere and anytime access to banking services via a mobile device; tablet or mobile phone (Crosman, 2011). Whilst the service is an evolution of internet banking, global m-banking adoption and usage is not as widespread and massive as internet banking (KoenigLewis et al, 2010). Many studies (Barnes and Corbitt, 2003; Brown et al. , 2003; Lee et al. , 2003; Suoranta, 2003; Luarn and L in, 2005; Barnes Scornavacca and, 2004; Laukkanen and Lauronen, 2005), in different countries of the world, have been conducted to ascertain why uptake of m-banking is below expectations.

There is, evertheless, confidence that usage will increase given the benefits that the service provides (Wessel and Drennan, 2010). The topic has been thoroughly researched by academics to understand why take-off is slow. Several researches on mobile banking adoption have combined the diffusion of innovation theory of Rogers (1962) and technology acceptance model of Davis (1989) (Riquelme & Rios, 2010). In Mauritius, however, there is scarcity of studies on m-banking since the service has recently been launched by a few banks; the Mauritius Commercial Bank, the State Bank of Mauritius and the Mauritius Post and Cooperative bank.

M-banking usage is therefore still in its introductory Stage compared to internet banking which has experienced widespread diffusion throughout the island. This paper therefore aims to investigate factors which encourage and hinder the adoption and use of m- banking in Mauritius. The study provides insight on m-banking in Mauritius. It will shed light on the possible barriers to an-banking adoption in Mauritius. The potential factors that encourage and/or inhibits Mauritians from using m-banking services will be also identified which altogether should provide a comprehensive picture f m-banking in Mauritius.

Local banks will most certainly benefit the most from the findings of the study as an in-depth assessment and analysis of m- banking will be made. Any firm considering launching mobile services in Mauritius can also get meaningful and valuable insights by extrapolating the results of the study. Besides, the study can also be used as a basis to conduct further studies on mbanking and mobile services in general in Mauritius. The paper is organized as follows: the next part provides an overview of the Mauritian banking sector and literature review, part 3 contains the research ethodology followed by analysis and findings.

Finally part 5 discusses the managerial implications and recommendations of the study. 2. 0 Literature Review 2. 1 Local Banking Sector The Mauritian banking sector is a very competitive sector with 18 banks offering their services. There are currently 4 offshore banks, 7 local banks and 7 subsidiaries of 2 international banks. Most retail banks in Mauritius provide online banking as add-on services to existing branch activities while mobile banking is in the initial stage of implementation. By the end of July 201 2, only 3 banks were roviding m-banking services; MCB, SBM and MPCB.

Similarly, Internet banking services were initially provided by only the MCB and SBM with the other banks introducing the service much after. In fact, the MCB and SBM pioneer most innovation in the local banking sector. 2. 1. 1 Mobile banking in Mauritius The MCB and SBM started investing heavily in mobile banking services in 201 1 . The MPCB has, in June 2012, started to provide m-banking services to its customers. The MCB intensively advertised its mobile banking services when it introduced it. Information about m-banking together with its advantages was provided.

Besides, information about m-banking is readily available on its website. To be able to use the service customers must subscribe to the service by going to any branch of the MCB or through internet banking. The SBM, on the other hand, partnered with local mobile network operator Orange to broaden its m-banking services. SMS banking and Mobile Internet Banking are the two main categories of m-banking services provided locally. 2. 2 VI-banking and its emergence M-banking is the latest approach used by financial institutions for the provision of financial services through information and communication echnology (ICT).

Mbanking is a service whereby customers use a mobile phone or mobile device to access banking services and perform financial transactions (Anderson, 2010). Goswami and Raghavendran (2009) argue that the broad aim of m-banking is to fit a financial institution on a mobile phone. Crosman (2011) reinforces this by asserting that m-banking enables users to have a bank branch in their pocket and to be able to bank “anytime and anywhere”. Laukkanen and Kiviniemi (2010) define m-banking as an interaction through which a customer is connected to a bank via a mobile device.

The interaction does not necessarily involve performing transactions such as paying bills and transferring money but can, in its simplest form, be the sending of an SMS (Short message system) for account balance inquiry. Steadman (2011) advocates that technology is the enabling factor that allowed m-banking to emerge. The “always-on” connectivity demand by customers coupled with the fact the internet has evolved from fixed wired through wireless to mobile connection, meant that financial institutions had to pursue alternative channels to provide their services in order to meet customersD expectations (Puschel et al, 2010).

There is a convergence of ideas that the main driver of m-banking is the widespread proliferation, availability and acceptance of mobile or smart phones and devices (Halime, 2010). Skeldon (2011) affirms that the general and widespread acceptance of mobile applications, the increasing use of mobile phones as a tool and means for paying bills, and lifestyle are the factors driving the adoption Of A1-banking.

Coelho and Easingwood (2003) assert that the fact that todayL]s customers are less willing to visit traditional branches, are more and more receptive to new electronic channels and emand better service quality 3 February 201 3, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 2. 3 M- banking users and factors favouring its adoption Koenig-Lewis et al. (2010) assert that young people are more predisposed to adopt m-banking as it fits their lifestyle, so do Howcroft et al. (2002).

Toe and Pok (2003, cited Sangle and Awasthi, (201 1) purport that people having a busy life and being constantly on move rather than having a sedentary life are more prone to adopt and use mobile banking. Sangle and Awasthi (2011) claim that internet banking users usually take less time to use and adopt m- a nking. Suoranta (2003), ascertains that the convenience, privacy, time and effort savings together with the location-free access that m-banking offers encourage its adoption and use, whereas Lee et al. (2003) state that self- prestige is a key factor.

Delport (2010) affirms that awareness is a key factor in m-banking adoption and use. Despite the numerous advantages it offers, m-banking is still in an “infancy stage” (Laukkanen and Kiviniemi, 2010). Kim et al. (2009), argue that m-banking subscription has been well below industry expectations 2. 4 Barriers to m-banking Koenig-Lewis et al. 2010) affirm that customer adoption remains the major barrier that hinders the development of m-banking. It is unlikely that banks will increase their investment in m-banking if customers do not see any advantages in it and if adoption is not widespread (Koenig-Lewis et al, 2010).

Crosman (2011) claims that “not everyone is interested in having a bank branch in their pocket” and asserts that those people do not know what it means to be able to bank anytime and anywhere. understanding what prevents customers from using and adopting m-banking is therefore important (Koenig-Lewis et al. , 2010). People refrain from using m-banking because it involves payments (Luarn and L in, 2005), such as SMS fee (Crosman, 2011 security issues (Brown et al, 2003) and small keyboards and display screen of smart phone ( Laukkanen, 2007b). 2. M-Banking services SMS banking thin-client applications and access to online banking are the main ways through which banks offer m-banking services (Cruz et a’, 2010). Suoranta and Matila (2004), argue that m-banking allows users to check account balance, make transaction history inquiries, transfer funds, pay bills, trade stock and manage portfolio of assets. Crosman (2011) argues that ownloadable applications such ATM locator which enables customers to find the nearest ATM from where the customer is located, enables bank to provide distinctive and beyond standard services.

Wilcox (2009) predicts, however, that the range of m-banking services is likely to increase in the future. Cruz et al. (2010) assert that m-banking services are either transactional or nontransactional based. “Monitoring recent transactions, access to loan and card statements, alerts on account activity or the passing of set thresholds, the status of 4 February 201 3, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 cheques mong others” are examples of non-transactional based transactions (Cruz et al. 2010). Non-transaction based an-banking services are mostly used for informational purposes but may be essential for conducting transactions (Cruz et al. , 2010). For example, checking the balance of an account is important before making transfers. Nevertheless, Skeldon (2010) claims that m-banking is used mostly for viewing account balances and that SMS is the most popular medium for the delivery of m-banking services. Tavan (2011) asserts that use of transactional-based mbanking services is quite low. 2.

Benefits of m-banking to customers Ubiquitous access, convenience and mobility are the main benefits that m- banking confers to customer (L aforet and Li, 2005). Delport (2010) points out that with mbanking customers no longer need to use scarce time and resources to travel to bank branches. Nevertheless, despite the widespread proliferation of mobile phones and the numerous advantages that m-banking offers, An-banking is still not widely adopted (Riquelme and Rios, 2010). Laukkanen (2007b) argues that internet banking remains the leading channel in electronic banking. . 7 perceived Risk AldsManzano et al (2009a) argue that new products inherently contain risks which increase resistance to adoption. Yousafzai et al (2003) affirm that risk in online and mobile banking is perceived to be higher than traditional banking channels as they operate on open technological infrastructure which creates implicit fears that hacking and other malicious attacks that cause financial loss and manipulation of personal data might occur. 2. 7. 1 Perceived risk dimensions: 2. 7. 1. Security risk Akturan and Tezcan (2012) argue that security risk relates to the potential loss of control over transactions and financial information. Koenig-Lewis et al. (2010) affirm that in the mban king context, customers fear that their funds will be transferred to third parties without their knowledge. 2. 7. 1. 2 Privacy risk Privacy risk in banking refers to the degree to which consumers fear that their privacy will be violated and anxiety that banks will divulge personal information to other companies or to cross sell other banking products (Alds-Manzano et al. 2009a). 2. 7. 1. 3 Performance risk Performance risk is concerned with whether the product/ service performs as per expectations or as anticipated (Alds-Manzano et al. 2009a). Akturan and Tezcan 5 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 (2012) affirm that performance risk relates to the probability that the product or service not functioning properly. 2. 7. 1. 4 Time risk Akturan and Tecan (2012) affirm that time risk considers the possibility of losing time to learn how to use a product or services.

In the mobile banking context, time risk refers to the amount of time it will take to learn and use mobile banking (AldsManzano et al. , 2009a). 2. 7. 1. 5 social risk Alds-Manzano et al (2009a) affirm that the lack of human interaction is an bstacle to the use of self-service technology based services. M-banking operates in an “impersonal environment” (Koenig-Lewis et alr 2010). Suganthi et al. (2001 ) argue that personal interaction between customers and bankers helps to overcome barriers and increases trust. 2. 8 Technology Acceptance Model & Innovation Diffusion Theory 2. . 1 Technology Acceptance Model TAM is a well-known model that helps to explain the adoption and use of technology (Sangle and Awasthi, 2010; Wessels and Drennan, 2010). Brought forward by Davis in 1989, it is based on Fishbein and AjzenC]s theory of easoned action (Sangle and Awasthi, 2011 Davis argues that the intention to use a particular technology is based on a personas behavioural intention which in turn is determined by two beliefs; perceived ease of use and perceived usefulness (Liu and Li, 2009; Sangle and Awasthi, 2011). 2. . 2 Perceived Ease of use & Perceived usefulness Perceived ease of use is “the degree to which a user believes that using a particular service would be free of effort” while perceived usefulness refers to “the degree to which an individual perceives that using a particular system would enhance his/her job performance” (Liu and Li, 2009). Alds-Manzano et al. (201 2a) assert that perceived usefulness refers to the advantages that mobile banking offers and whether using a mobile phone is useful for performing financial transactions.

Perceived ease of use, on the other hand, relates to whether mobile banking is easy to learn and use (Alds-Manzano et al, 201 2a). Riquelme and Rios (2010) assert that perceived usefulness plays a significant role in determining the adoption and use of banking services. Nevertheless, Luarn and Lin (2005) argue that TAM does not highlight the barriers to the adoption Of a technology. Chong et al (2010) assert that using

TAM solely does not sufficiently explain peoples decision to adopt a technology and argue that TAM should rather be used as a base model which should be extended with additional variables based on the technology being studied. 6 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 2. 8. 3 Innovation Quinn, (2000), argues that firms must continually innovate if they do not want to be outshined by competitors. Innovation is what makes organisations successful and ensure their long term survival (Ehigie and McAndrew, 2005). Hivener et al. 2003) define innovation as a new or innovative idea that is pplied to initiate or improve a product, process or service. Ehigie and McAndrew (2005) affirm that “in the innovation change process, creativity leads to an invention, and the first introduction or implementation of an invention is innovation, which could lead to adoption which in turn results from a diffusion process”. 2. 8. 4 Innovation Diffusion Theory (IDT) Bradley and Stewart (2002) affirm that firms engage in the diffusion of innovation in order to gain competitive advantage, reduce costs and protect their strategic positions.

The innovation diffusion theory put forward by Rogers in 1 962 is a wellknown theory that explains how an innovation is diffused among users over time (Liu and L i, 2009). It also helps to understand customersD behaviour in the adoption or non-adoption of an innovation (Vaugh and Schavione, 2010; Lee et al. , 2003). The theory depicts that the adopters of any innovation follow a bell-shaped distribution curve which may be divided into five parts to categorise users in terms of innovativeness (Liu and L i, 2009). Rogers classified users as innovators, early adopters, early majority, late majority and laggards (Liu and Li, 2009).

As per the research of Rogers (1995), innovators account for 2. 5%, early adopters compose of 13. 5%, early and late majority made each 34% whilst laggards correspond to 16% of the total consumers of an innovation. 2. 8. 5 Perceived Characteristics of an Innovation As per Rogers (1 962), there are five perceived characteristics that influence the adoption or non-adoption of an innovation which are: 2. 8. 5. 1 Relative advantage Rogers (1995) defines relative advantage as “the degree to which an innovation is perceived as better than the idea it supersedes”.

It refers to whether the innovation is perceived to be superior to the product or service rom which it evolves (Laukkanen and Kiviniemi, 2010). P?schel et al. (2010) define relative advantage as the degree to which an innovation is perceived as a better alternative to currently available products and services. Liu and Li (2009) argue that relative advantage is a very robust predictor of the intention to adopt and use a particular innovation and corresponds to the “perceived usefulness” component of the Technology Acceptance Model (TAM) put forward by Davis (1989).

Ram and Sheth (1989) argue that if the performance of an innovation is not superior to existing alternatives, then customers will ot find it meaningful to change their behaviour and adopt the innovation. Conversely, Lee et al. (2003) affirm that users are more prone to adopt a new technology when they perceive that it offers a relative advantage over existing one. 7 February 2013, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-19-1 2. 8. 5. 2 Complexity Rogers (1995) describes complexity as ‘the degree to which an innovation is perceived as relatively difficult to understand and use”.

Complexity is similar to the “perceived ease of use” component of TAM and is a significant predictor of the intention to use and adopt an innovation as the more omplex an innovation is the slower its rate of adoption will be (Liu and Li, 2009). Lee et al. (2003) affirm that “perceived complexity’ negatively affect m- banking usage and adoption. KoenigLewis et al. (2010) affirm that the perceived complexity of m-banking will be lower for users who are versed with mobile phones and will consequently experience fewer problems in using m-banking. . 8. 5. 3 Compatibility Rogers (1995) defines compatibility as “the degree to which an innovation is perceived to be consistent with existing values, past experiences and the need of potential users”. Lee and Lee (2010) argue that people tend to more easily adopt technologies that are compatible with the current technologies that they have or had before. Innovations that match with the lifestyle of users usually have a faster adoption rate (Koenig-Lewis et al. , 2010).

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