Perceived Ease of Use of Internet Banking - Literature review Example

BАNK (INTЕRNЕT BАNKING) University Student Id Course Date Literature review Internet banking Internet banking is the process of banking cash online providing room for the execution of various transactions which involve payment through the web access. The institutions in the banking industry are looking for the best ways of ensuring that they are competitive in the market by being innovative in services delivery. The need to achieve competitive advantage in the industry has led to increased use of internet in banking. This type of banking provides the clients with the required services at the local branches such as the deposits (Aldas-Manzano et al. 2009). However, the banking process through the online does not always allow the use of the direct ATM cards, even though they may reimburse the clients for the charges of the ATM services. E-banking has minimised the overhead expenses which are usually incurred by the customers hence online banking helps consumers to save on the banking charges. The online banking deals with the customers by either through email or using their phones; hence, making financial service delivery convenient and effective. However, the aspect of convenience is the main importance of banking cash through online. Various transactions which are related to the banking such as the payment of bills, as well as the fund's transfer, can be done at a convenient time to the customers (Lee, 2009). Through the online banking, services can be offered to the clients anytime. Also, this kind of banking is considered fast and also effective hence cash can be transferred between various accounts within a short period. Perceived ease of use of E-banking The term Perceived Ease of Use is described as the users view concerning the services which are easy to make use of them and they do not need mental effort. The users of the electronic banking make use of the technology which is just simple without various complications. The Perceived Ease of Use creates a positive relation concerning the attitude of using the electronic banking (Mäenpää, 2006). However, various researchers conducted a research and came up with clear evidence that the perceived Ease of use usually has an important impact on the attitude of utilising the electronic banking. Also, the researchers came up with an argument to prove that the perceptions of the customers have an impact on the vitalness of the electronic banking. The introduction of the information technology in the banking industry has an impact on the various daily activities. Also, the banking transaction is also another aspect which is critical to the individual`s daily lives. Some certain changes have taken place in the process of applying technology that can include the migration from traditional ways of banking to the mobile banking that is more convenient and effective (Mauro, Hernandez & Afonso, 2007). However, the process of mobile banking usually entails diverse purposes such as authentication as well as the authorization. The numbers of the people who are making use of the mobile banking are increasing from day to day in the majority of the countries. Therefore, there are certain aspects which have an impact on the adoption of the transactions through the mobile banking which includes the client's trust, security and the technology infrastructure. Besides, since there is an increase in popularity of the mobile business, the aspect of mobile banking has enhanced business transactions via electronic devices between various organisations. Payment transactions are now done using the internet, whereby individuals paid their vendors such as the receivers through the website (Oly & Sinti, 2006). However, since this kind of payment was mostly done through either computers or laptops, the primary concern to this transaction is security to prevent the cases of fraud. Since the year 2011, the whole world had now adapted to the era of the mobile devices. The increased uses of the various mobile devices that can include the smartphones as well as the tablets have assisted in promoting internet banking. Although the disadvantages of the technology infrastructure have gone down, there are still other aspects that the providers of the mobile banking services should also look into them to improve their service delivery. Both the information technology as well as the communication technology is closely connected to the present economy and the social life (Littler & Melanthiou, 2006). The possible outcomes of using the information and the communication technology include; the electronic-learning, the electronic governance as well as the electronic banking. The term electronic banking usually refers to the process whereby the banks carry out transactions while involving the stakeholders in the process of the transaction. The primary concern of this study is actually about the internet banking which makes use of the internet as the method of communication that provides clients with the banking services. However, there is a lot of freedom for the various banking services to incorporate the mobile-banking to its system since the banks make use of the mobile devices in carrying out the banking activities. Banking cash by using a mobile device is convenient since the banking process can be done at any time and any place (Sum & Ngai, 2010). Both of the mobile banking and also the mobile payment caters for services such as cash transactions via different accounts, loans, and also retail sales. Customers can also enquire account’s related information such as balances using their mobile devices inform of the short message. The banking services when using the internet are normally supported by 4G LTE, 3G, and EDGE where the customers can access more services. The use of internet in banking allow the customers to access financial services like financial transfers from one account to another, stock trading and also m-payment for commodities bought via mobile devices. Through this, mobile banking and the mobile payment are gaining strength in some places like Europe, but as for the USA, lack of trust by customers on m-banking is leading to the closure of these services by banks. Security and convenience are primary reasons for e-banking advancement (Poon, 2007). Trust mostly is the biggest factor which facilitates financial transactions to be done online. Trustworthiness refers to the confidence which between business partners that convince that they will both conform to business rules. However, customers usually have doubts on the mobile banking because of some issues related to it such as; adoption cost, security, and also convenience, which eventually results into the proposition. Perceived usefulness of E-banking Perceived usefulness is described as the extent a client can have the trust that the internet banking can develop their work regarding performance. It is through the perceived usefulness among the customers concerning the online banking that the number of users of the electronic banking services is determined. The moment the customers perceive online banking as useful in transactions the users of the online banking services are likely to increase. The perceived usefulness is one the factors which have an impact on the attitude of customers concerning the internet banking as well as its adoption. Literature has shown that majority of the individuals employ the use of the internet banking since they find it of great important in improving the efficiency in transactions (Luo, Li, Zhang & Shim, 2010). Also, it is clearly indicated that the perceived usefulness comes as a result of the effects which are made by the perceived ease of use. The perceived usefulness of the online banking services offered by the banking institutions is determined by the factors that are associated with the benefits of online banking. The significance of the both of security, as well as the privacy related to the online surrounding, has been intensively described and then reports concerning it are made in various studies. For instance, during the year of 2001, Godwin made a report that both of the privacy, as well as the security, are part of the factors which interferes with the shopping through the internet. This interference has also been experienced at the surroundings of the internet banking (Yiu, Grant, & Edgar, 2007). The aspect of the security is broadly known to be the major challenge which is faced when adopting the electronic banking whereas the security factor has been recognised to be the major interference which affects the online services. The level of confidence that is involved transactions when using online banking is critical in the process of determining the usefulness of the online banking services. The term confidence regarding the possible loss of money is described as the threat which brings in a certain condition that results in hardships regarding the network resources. In the aspect of internet banking, the threats related to the loss of money can either be experienced through the network or via the data transaction by the individuals who are not authorised (Sum & Ngai, 2010). It is the level of confidence in the financial services involved in the internet banking that the customers can charge the electronic financial services as secure or not. Therefore, it is crucial for the financial institutions that are offering online banking services to guarantee security. The usefulness of the banking online as perceived by the customers determine the use of the electronic banking services. The evaluation of the possible benefits of using online banking services determines the number of the users of the internet banking services (Ho & Lin, 2010). The use of internet banking is always of great benefit to the individuals who make use of it appropriately. Some of these benefits include the perceived convenience of the banking services among the customers. This is the most common importance of the internet business to the customers whereby a client can bank his or her cash from any place and at any time he or she wishes since the web banking operates 24 hours. As a result, the users of electronic banking can increase due to the perceived convenience of the online banking services of the customers. Portability is another benefit that can be realised through the utilisation of the electronic banking, more room for the mobile banking is enhanced for the clients to make use of it. The mobile devices are portable hence the customers carry them at any place; therefore, they can do cash transaction at their places of choice. This has assisted in improving the way transactions are done in business making many people embrace the use of electronic banking (Zavareh et al. 2012). The challenges associated with the use of cash in transactions have now been eliminated. People do not need to carry liquid cash, but they just need to have their mobile devices; thus, leading to increasing the use of plastic money in business. The electronic banking usually creates a room whereby the clients can save on some of their expenses. For instance, through the pay bills which are made through online, the numbers of checks which customers are required to write are minimised. Also, the cash for meeting the payment of the envelopes and also for the stamps are reduced (Sohail & Shaikh, 2008). The electronic banking services allow clients to provide services on their own thus reducing the supply expenses as well as labour too. The postage costs can be saved through the use of electronic banking that can be possible by making statements via the internet. Perceived security of E-banking The use of electronic banking among the customers can be determined by the level of security involved in the transactions. Many customers are fearing to lose their money through possible fraud when using the internet to transact making it necessary to guarantee the customers security when using electronic banking. For almost within twenty years, the banking enterprise has been engaging itself with the issues related to the electronic commerce (Sayar & Wolfe, 2007). During this period, the capability of conducting various business activities via online has been viewed as a good chance for the banks to save on their transaction expenses. Additionally, through the electronic commerce majority of the banks can enlarge its consumer market, and also can develop their services which they offer to their customers. According to the research which was conducted by Lichtenstein & Williamson, (2006) shows that the aspect of internet banking has put more emphasis on security. The understanding of the concept of the customer adoption of the internet banking services is important to ensure proper understanding of the security issues surrounding technology use in banking. However, during the time when the connectivity of the internet was not known to the majority of the individuals, the banking industry aimed at facilitating its market to this new channel of transacting. The variables which are accepted to the new technology together with the developing knowledge are some of the aspects which make the websites to be successful. Studies which have been conducted by Poon, (2007) showed that in the internet banking, both the perceived security and the trust of the channel makes customers decide on adopting this type of banking. The security practices related to the information are quite significant to any enterprise; therefore the internet banks have tackled those practices with a lot of focus. As a result of the sensitive transactions which are involved in the internet banking, the media has made reports concerning the web security on those cash transactions (Eriksson, Kerem & Nilsson, 2005). Therefore, the banks have realised that the perception of the customers concerning the web security of those transactions is of great significance. This is because it is only through the security guarantee that most of the customers can be willing to make transactions using the internet. Besides, web security is the main aspect which is always considered by the customers before engaging themselves in the internet banking. The strategy of the internet banking involves the entire evaluation of its trustworthy before the eyes of various clients. However, to convince a majority of the customers to migrate from the traditional form of banking to the online form of banking, the banks should manage the perception of the clients concerning the web security (Jenkins, 2007). Currently, the Internet banking has become very popular in some places such as in the United States of America, and also in other various parts of the world. The success of internet banking has been different from one region to the other depending on the level of security of the banking services provided by the financial institutions. This is because, in some countries, customers are assured of security f their money when using the electronic banking services. According to Laukkanen & Lauronen, (2005) it is clearly indicated that the internet banking is recently used by a big number of individuals because of its popularity. Despite the fact that online banking activities have increased rapidly, doubts concerning the web security are still there; thus, banks are doing their research about this perception. However, it is quite difficult to accurately know the link which exists between the web security and the trials made by the banks to eliminate them. Also, it is not well known whether the concern about the web security on the activities of the internet banking is the same all over the world (Cheng, Lam & Yeung, 2006). The primary tool which is applied by the internet banks in the process of maintaining the perception of the clients concerning web security is known as the ‘security policy.’ Security policy in online banking is used to give a clear explanation concerning the necessary measures that the internet banks have taken in providing security to the customers` information. Some of the measures which have been taken by the online banks in ensuring that information for the clients are safe includes; password protection, and also the encryption among the others. Besides, the security policy also acts as an assurance to the consumers that the online transactions are always secure (Lai & Li, 2005). The expectation from the customers concerning the online banks is that the security policy should appropriately address the prevailing fears which the clients may have. Also, the level of safety has been determined by the different aspects of the security policies in various banks to assess how these banks perceive the issue of web security in the local markets. Attitude about E-banking The customers have a different view concerning electronic banking that is determined by the level the clients embrace technology. Banks from the past have been making use of the technology to improve their services as well as their effectiveness. They mostly utilise the electronic networks to deliver a variety of highly valued products in the market (Calisir & Gumussoy, 2008). Some of the channels used for delivery that can include the direct connections, the public and private networks, whereas devices used included telephones, personal computers and also the ATMs. However, PCs being an attractive appliance, both of the internet access and also the World Web make the internet to be commonly used by banks to receive instructions and deliver services necessary to meet expectations of their clients. This kind of banking system can be referred to as internet banking, even though more services that are delivered by various banks are different regarding their sophistications and the nature of the services offered. Banking services that are offered via the internet are grouped into types that vary regarding service delivery. The first type of banking services is the banker’s website which provides information concerning the various banking services offered to public and private clients. Customers can send their queries and got their replies via e-mails (Ho & Ko, 2008). The second type of the banking services entails transactional websites that are simply designed. This allows the clients to enter their relevant instructions and their applications necessary for accessing services from their bank accounts. For instance, the account holders can be in a position to access their bank balances, but no financial transactions can be supported using the transactional websites. The third type of the banking services that can be delivered using the internet is the fully transactional website that provides room for clients to transfer their funds, pay their different bills and some subscriptions on the other products from the other banks. Traditional banks offer the above forms as an additional way of serving their customers. However, some traditional banking systems are sometimes referred to as the virtual banks. The use of internet globally by business enterprises has rapidly increased over the past years as per the evidence which has been provided by the research. Currently, a large number of banks are delivering services via the Internet, which is known as the internet banking (Rod et al. 2009). At advanced levels, internet banking can be referred to as transactional internet banking since it entails providing financial facilities. These facilities provided can include the accessing various accounts, the transfer process of money and making payments for services and products using online platforms. The Internet provides the banks with an opportunity to add up some additional revenue as well as maintaining and developing long-term relationships with the customers, expanding marketing, and also increasing the savings on expenses. Research evidence conducted by Jaruwachirathanakul & Fink, (2005) also shows that internet banking allows various banks to trade on higher-margin non-traditional products to customers, thus maximising their business volumes. Also, a bank being on the internet over time enables even smaller banks to expand to different places without being forced to generate large amounts to open new branches. This way widens the customer base hence enabling banks to outdo each other on markets that were smaller or required much funds to be exploited. According to the study which was conducted by Eriksson & Nilsson, (2007) concerning the internet banking showed that this type of banking made the clients more focused on their monetary funds as compared to before. The study indicated that the aspect of the internet banking has been of great importance to the customers since it helps them in managing their funds. However, the attitude of a client concerning the online banking usually satisfies an individual motive (Lifen et al. 2010). Therefore, the aspect of attitude can be viewed as one of the determinants while studying the behaviour of the clients towards online banking. Intention to use of electronic banking The intention of the customers is the major determinant of the use of technology in banking services. The behaviour of the users of technology especially in banking services is responsible for the decision made by the customers concerning whether to use electronic banking services or the traditional way of banking services. The major factor that affects the behaviour of the user is intention where intentions are the start of the decision-making process concerning the use of online banking (Giovanis, Binioris & Polychronopoulos, 2012). There is a significant relationship that exists between the real use and the intention of using online banking. The intention has been considered as the primary factor that affects the human social behaviour in the decision-making process. Just like any other services, online banking services rely on the intention of the users of financial services to make a decision that can be either positive or negative (Kuisma, Laukkanen & Hiltunen, 2007). In case the users have a positive decision concerning online banking, they are likely to increase its use. On the other hand, in case the users have a negative decision depending on the intention factors, the users are said to be discouraging to use online banking. Therefore, the intention is crucial in determining the level of use of internet banking in the financial industry as it affects the decision-making process. Intention entails factors such as ideas and notions where the ideas are mainly associated with the level of information the users have concerning the use of online banking. The notion concerning the online banking can entirely be associated with the attitude of the users towards internet banking that is shaped through experience (Kha & Mahapatra, 2008). The intention of the customers can result in an analysis of the impacts of the consumer behaviour and the value of the need for the use of online banking services. It is the intention of a person that the plans towards the use of electronic banking can be made. The intention can remain for sometimes until the opportunities come for using internet banking. The behaviour of any consumer is controlled by the intention where the intention results in taking the necessary action. The customer can then consider results of his actions and the behaviour concerning online buying. In the process of learning the behaviour of the customers in the market, studying about the intention of the consumers is critical. 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