The National Environment on Consumer Adoption of Internet Banking in Malaysia and Singapore - Essay Example

A Critical Review: Internet Banking in Malaysia and Singapore s Introduction: The last few decades have seen the transformation of business process in Internet based process. The Internet has changed the business modes. The concept of geographical boundaries is no more a major concern for the companies to reach the potential consumers. The time saving business process not only include the exchange of information and documents but also goods and services can be bought and sell in a time saving fashion. With such enormous benefits being provided the use of Internet has also posed some challenges to the customised methods of business. The Companies that understand the benefits of introducing Internet based business techniques are transforming their business processes to Internet based business. This trend has also effected the process of traditional retailing through outlets. There has been a considerable research on the effects of online sale on traditional business methods and consumer behaviour for example (Sindhav and Balazs, 1999; Reardon, 2002). The main aim of the paper is to summarise what has been written so far about on line sale and its impact and to propose a methodological approach in order to conduct a research concerning the Impact of e-commerce security, and national environment on consumer adoption of Internet banking in Malaysia and Singapore. The regression analyses suggested that consumer perceived non-repudiation, trust relative advantage Internet experience and banking needs are the most important factors that affect adoption in Malaysia. While Internet experience and banking needs were found to significantly affect Internet banking adoption in Singapore. 2- Literature review: Last two decades have seen multi-fold progress in the use of Internet. (U.S. Department of Commerce, 2000; USIC and IITA, 2000). Nua Internet Surveys have reported an increment in the number of Internet users globally, statistics state the users are increased in all regions of the world from 171 million in 1999 to 304 million in March 2000, an increase of 78 percent (U.S. Department of Commerce, 2000; USIC and IITA, 2000). The accessibility of the consumers to different products and services has also been increased. In order to respond to the changing needs of the customers businesses are also applying new techniques to capture a vast market, (Ram et. al., 1999). The advent of Internet has also changed the way of undertaking business. With the increase in the number of users the companies find it cost effective and easy to reach a mass market through Internet as compare to the traditional methods of addressing the customers. Especially in the developed countries the role of Internet has become crucial in designing the business strategy of a company. On the other hand at the consumers side Internet has provide them with an array of products and choices available. The approach of business is also changed. (Zwass, 1996). Through Internet the competition has also increased which put pressure on the manufactures to keep the prices low. Furthermore, the businesses, which are using on line selling approach, do not have to face the geographical constraints; a large no of customers can be addressed with undertaking a single effort (U.S. Department of Commerce, 1999). The advantages attached to the notion of Internet have made it the most important driving force of the business revolution. Like all the other Internet based business processes online shopping is gaining popularity among people due to its characteristics of easy access, 24 hours availability, current Information and price reduction. In the busy world of 21st century the tradition of on line shopping has become necessity. The increase in the importance has also given rise to different challenges, which need to be addressed in an effective manner. The researcher has identified different standards, which should be fulfilled by the businesses in order to respond to the challenges faced. They include: Introduction of universal standards. ensuring a commonality of expectations between consumers and providers, security technologies, Consistency of experience. Services reliability. Service performance. Service providers are driven and motivated by the consumer. A greater dependency upon such interactive services offers providers with the foundation for forming further online baking for customers to integrate into their lives. 3- Aim of research: The aim of this research is to examine the effects of online sales on traditional retail outlets in the United Kingdom 4- Objectives: To review the literature about this issue up till now. To improve the awareness about online banking in Malaysia. To analyse the advantages and disadvantages attached. To investigate and find out the impact on banking sectors of both countries. 5- Methodology 5-1- Philosophy Research is a fact finding activity (Dominowski, 1980). The aim of primary research is to make known something previously unknown to human beings and to advance human knowledge by making it more certain or better fitting; the aim is discovery (Elias, 1986). Kerlinger (1970) uses more technical language to define it as the systematic, controlled, empirical and critical investigation of hypothetical propositions about presumed relations among natural phenomena. The research philosophy depends on the way we think about the development of knowledge and this thinking affects the way we do search (Saunders 2000). Whilst undertaking the research, a clear understanding of research philosophy is essential. Easterby-Smith et al (1997) identify three reasons why the exploration of philosophy may be significant with particular reference to research methodology: Firstly, it can help the researcher to refine and specify the research methods to be used in a study, that is, to clarify the overall research strategy to be used. This would include the type of evidence gathered and its origin, the way in which such evidence is interpreted, and how it helps to answer the research questions posed. Secondly, knowledge of research philosophy will enable and assist the researcher to evaluate different methodologies and methods and avoid inappropriate use and unnecessary work by identifying the limitations of particular approaches at an early stage. Thirdly, it may help the researcher to be creative and innovative in either selection or adaptation of methods that were previously outside his or her experience. Two views about the research process dominate the literature: positivism and phenomenology which have an important part to play in business and management research (Saunders, 2000). Positivism is founded on the belief that study of human behaviour should be conducted in the same way that as studies conducted in the natural sciences. On the other hand phenomenology is concerned with the understanding human behaviour from the participant's own frame of reference (Hussey and Collis, 2003). As the research philosophy depends fundamentally on the research question (Saunders 2000), the phenomenological philosophy has been chosen in this paper. This choice originates from that researcher's topic/question that aimed to investigate the impact of e-commerce security, and national environment on consumer adoption of Internet banking in Malaysia and Singapore. In this specific research, -related to the question- the author collected data and developed a theory as a result of data analyses rather than developing a theory and testing it afterwards. 5-2- Qualitative versus Quantitative primary research TECHNIQUES Qualitative techniques stand in contrast to quantitative techniques, the main difference being that quantitative techniques involve numerical data whereas qualitative techniques involve more abstract information. Data collected using qualitative techniques do not generally lend themselves to statistical analysis whereas quantitative techniques do (Veal, 1997). A mixed methodological approach is used in this research, because mixing methods enables the insufficiencies of both qualitative and quantitative methodologies research design to be overcome and can assist with data collection and data analysis (Jennings, 2001). 5-3- Questionnaires In the questionnaires method of data collection the researcher can precisely obtain the information that he asks for and these information can be analysed in an easier way than if choosing another method. In addition to that questionnaires are not an expensive method of data collection, and they don't take long time to fill in. On the other hand questionnaires have some disadvantages such as: they do not have a high response rate as it is evident in the paper since the researcher distributed 550 hard copies of the questionnaires (Malaysia 300 and Singapore 250). Only 294 were received (Malaysia 175 and Singapore 119) out which 63 were rejected due to missing data or inconsistency in the response to the questions, thus, bringing the total to 310 responses available for the analysis. There can be many reasons, which resulted in shape of low response rate. The wording of the questions can cause bias to the client's responses, and the questions might not be designed correctly, which will result in collecting unneeded answers (McNamara, 1999). This may not be the cause as we are not provided with the copy of questionnaire in the paper but can be a possible reason. Choosing questionnaires for this step was due to the relatively large sample size that the researcher intends to include in his research, and for the cheap cost of this method comparing with other data collection methods. A sample of 294 was involved in the questionnaire, because the larger the sample sized is the more adequate the results could be and the more generalisations could be drawn from the research. Documentation review is an excellent way of evaluating the industry by taking a review of the research done in the past. Lot of useful information can be obtained through this method. For the effective implementation of the documentation major objectives of the research should be identified. Research plan should be developed very carefully keeping in view the main objectives of the research. Sequence of process should be such, that the a large amount of information can be possible to obtain in a very short time span, written notes should be taken and finally written notes on the documentation review are verified. Agenda should have, review of the agenda, review of the goal of the agenda, review of the ground rules and wrap-up etc. Documentation review normally comprise of the important information from documents of similar nature relating to the field of research, so documents should be selected from the set of documents having useful information regarding the research topic. They should be selected from variety of sources such as journal article, newspaper reviews, experts interviews, information available at Internet. In the review each document should be referenced properly and the key addressed points should be summarised. In the present study, the method of case study is adopted. In this process, the researcher has focused on the case of Internet banking industry in Singapore and Malaysia. The reactions to the experience and suggestions are obtained which are very useful in evaluation and marketing. This is the quick and reliable way to get common impressions. Case studies give a clear picture of industry's outlook. To evaluate the effectiveness of the strengths and weaknesses of the industry the evaluator developed case studies on the failure or successes of the programme. The case studies are used to organise a wide range of information, and the contents are analysed and with patterns of the data and further analysis are done with the cross comparison with other case. 5-4- Analysis On their own, data are rarely used in their original form. Through the process of data analysis, value is added to the data to turn them into information. It is information rather than data which users especially policy and decision-makers are interested in (Uganda bureau of statistics, 2005). However this is a very sensitive and critical stage in research process as misinterpretation or over-interpretation is always a potential risk. The process of data analysis in this research seems to include the following steps: Indicate the date of the questionnaires. Who completed them, and the number of returns. Categorise the data collected. Reading through the questionnaires and interviews carefully and coding them after the event in relation to the types of answers, themes and issues, and thencategorising of response (keeping a note of what the codes refer to). Then by asking some questions like what are the answers that keep repeating, what are the deviations from these answers, and Are there themes emerging Contradictions Then it would be possible to draw some related generalisation. Conclusion: The e-banking success evaluation model presented in the paper by the writer is somewhat incomplete. Consideration of only social and economical factors is not enough in order to undertake the evaluation critical factors, which are important for the success of e-banking system in both the countries. One such model is presented by Allgood, which is known as the six 'S' model. This six 'S' involves the six major factors of success for e-banking services. The said model is based upon the best potential service that clients could get from e-services. The said six 'S' model includes the following factors: Skills - This includes the necessary computer and Internet skills needed for operating the virtual organization. These skills need not be sophisticated, however the necessary basic points of consideration regarding computer skills and their applications. Through this factor, the needed services of the clients could be provided well by the site owners. Standardized - All the functions and the processes of the transactions and information sharing are standardized. As Internet provides the needed information the processes should also be under a standardized system. As for example, When it comes to banking, The standardized systems of the banking processes are then proved to be effective ways of servicing the clients in the Internet. Spread of Clients - The idea that the more the companies enhance their E-Systems, they are able to expect that there would be a great spread of clients that are to appreciate the services offered through the sites created by the companies. Statistics - The services provided by the sites and the companies are measured by statistics. The level of satisfaction based upon the survey questions given to the customers or clients visiting the site. Scope - The scope of the company site and the relevance of the information posted through the internet web site are gauged with regards to how much they are able to serve the needs of the clients. Savings - As mentioned earlier, Internet services are supposed to give cost benefits to both the companies and the clients as well. Herein, it is much considered how much both parties are able to save through the Internet service that is provided through the site. The analysis of security factor is also incomplete. Security is not merely limited to encryption threats but security could also involve the updated facts or accurate information provided through the Internet by the web sites of Banks. Since the facts involves the present situation of the trading industry within the country which provides the e-service, it is very important that everything is up to date and on real time basis. This is simply because of the fact that the financial matters are high in risk in these service provisions. It is important for the customers to have at least a basic form of assurance that what they see is indeed true and accurate for their own benefit in the future. The fact that they are supposed to invest within the trading industries of a certain country, they should be given fine service with regards to on time news and information which they could utilize for their own business activities such as decision making. As mentioned earlier that the re liability of conclusions drawn about the populations depends largely on the selection of a representative sample, the precision of the results obtained from a sample depends not only on the size of the sample but also on the sample design i.e., on the way in which the sample is selected. To have an efficient sample design one must make effective use of available resources. These resources include such items as staff, equipment, physical facilities and statistical information and other knowledge of the population to be sampled. There are many alternative sample designs that may be applied to a particular problem, however, before one make a choice between alternative designs, he must determine, on the basis of a set of criteria, which design is more efficient. The criteria for distinguishing between good and bad design may be stated as follows. (i) Select a design for which one can get from the sample itself an objective measure of the precision of the sample estimates. (ii) The design should be simple and straightforward which can be practically executed. (iii) As far as possible it should be a probability sample, i.e., the probability of selection of the respondents must be known, which may not necessarily equal. (iv) From among alternative sample designs which meet the above criteria, select the one which provide results of maximum reliability per unit of cost. We cannot undertake analysis regarding the sample selection as the paper does not provide clear description of the sample selection method. Precision Of Sample Results And Non-Sampling Error: Two kinds of errors are generally associated with sampling, a sampling error and a non-sampling error. The sampling error measures the precision of a sample result. It refers to how closely we can reproduce from a sample the results which would be obtained if we had a complete count or a census, using the same method of measurement, questionnaire, interview procedures, type of enumerators, supervision, etc. In other words the sampling error is the difference between a population value (parameter) and the corresponding sample value (statistic). The non-sampling error arises due to faulty questionnaire, error in measurement, confused interviewing, inefficient supervision etc. this error is not measurable but can be controlled by careful design of questionnaire, proper training of interviewers and vigilant supervision. As the results of the study are not very clear we can also assume that this might be due to irrelevant questions in the questionnaires, lack of proper supervision. Over all in my point of view the method of analysis and evaluation of data is strong but least attention is given to the method of data collection. References: Allgood, B. 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"Electronic Commerce: Structures and Issues," International Journal of Electronic Commerce 1 (1), 3-23. Read More