Influence of Online Internet Banking on the Performance of Business Firms - Research Proposal Example

Marketing Research (Name) (Institutional Affiliation) Table of Contents Table of Contents 2 Executive summary 3 Introduction 4 Background of the study 4 Problem definition 5 Research questions 5 Research design 6 Data analysis 6 Conclusion 11 Recommendations 12 References 15 Executive summary This research paper aims at establishing the relationship between the two variables. The paper considers the influence of online internet banking on the performance of business firms. The objective of this research paper is to establish the banking needs of the business owners. The finding of this paper is significant to the bank marketers and managers because they will identify the consumer needs, therefore, they can customize their productions to suit the market requirements. The research process is based on the hypothesis that the use of online internet banking by business firms increases the firm’s profit margin. In order to collect relevant data from the respondents, quantitative research design was adopted because of the magnitude of the respondents. Analysis of the data collected reveals that there is a relationship between internet banking and the performance of business firms. The hypothesis of the study is tested, and confirmed to be true by the findings, which reveal that businesses using online internet banking records efficiency in operations. Furthermore, businesses have developed trust and loyalty with internet banking because of its reliability and ease of accessibility. Lastly, the analysis reveals that the majorities of the respondents are happy working with online internet banking, and are willing to recommend other respondents. In conclusion, online internet banking is an invention that businesses and organizations should utilize to reduce operation costs. Internet banking is safe and reliable in settling of financial bills. Online banking is available to its user at all times, and its website is easy to use. Based on the research findings, it can be concluded that the use of online banking increases the profitability of the firm. Even, though, many firms have adopted the use of online banking, this research paper recommends that the online internet banks should formulate provisions to offer investment advice because few businesses access use online banking for making investments and managing investments. Introduction The developments in the previous years have resulted in significant change in the banking industry. The changes and developments in the banking industry have resulted in the growth of businesses and the economy at large. The findings have established that businesses depends banking industry to deliver goods and services to their customers. The banking industry is now established on the internet and various businesses have adopted this online banking for various purposes, which range from buying goods and services, paying of bills, and some firms have resorted to online banking because it is easy to use and readily available. Background of the study The importance of conducting a research project is to determine the relationship between dependent and independent variables. The research findings are analyzed, and a comprehensive conclusion is then drawn based on the findings. This research was conducted to identify the contribution of internet banking on the performance of small and medium businesses. Therefore, the results of this research paper will be beneficial to the online bank managers and marketers because it will help them identify them in improving efficiency of their services. The implementation of the research findings will increase the profitability of the online banks. Problem definition Since the invention, of internet banking, the profitability of some firms have increased while some firms have experienced stagnation in their operations. Despite the occurrence of business opportunities that are unveiled by internet banking, some firms are adamant to invest in online banking. The aim of this research paper is to establish the steps to be undertaken by online banks to foster loyalty and trust from business owners. The paper also seeks to find the measures to be taken by the bank to improve the quality of business firms. Research questions a) What are SMEs internet banking purposes? Hypothesis 1) Internet banking has a purpose of serving the SMEs. 2) Internet banking has no purpose in serving the SMEs. b) What SMEs perceive about the quality of internet banking service? Hypothesis 1) SMEs perceive internet banking to be of higher quality. 2) SMEs perceive internet banking to be of low quality. c) What SMEs perceive about the trustworthiness of internet banking service? Hypothesis 1) Internet banking is trustworthy. 2) Internet banking is not trustworthy d) How loyal SMEs are towards their bank? Hypothesis 1) SMEs are loyal towards their banks 2) SMEs are not loyal towards their banks. e) Are there differences between Small (5-20 FTEs) and Medium (21-200 FTEs) SMEs views regarding trustworthiness of internet banking services and their level of loyalty towards their banks? Hypothesis 1) There is difference between small and medium SMEs views regarding trustworthiness and the level of loyalty. 2) There is no difference between small and medium SMEs regarding trustworthiness and loyalty. Research design This research study adopted the quantitative research design. This design suits the accuracy of the outcome because of the presence of many samples of business firms from which data can easily collected. Based on the significance of this study, data collected must accurately represent the relationship between the variables under consideration. Quantitative research design is applicable because it takes into account the presence of many variables from which accurate data can be obtained. In order to establish the relationship between the variables, the relevant data was collected from individuals and firms with information about online banking through admission of the questionnaire (Srivastava 2000). Data analysis Revised category of small and medium business Frequency Percent Valid Percent Cumulative Percent Valid Small 158 55.1 55.1 55.1 Medium 129 44.9 44.9 100.0 Total 287 100.0 100.0 The data collected for analysis was collected from 287 respondents. 55.1% of the respondents were from small businesses while 44.9% of them were from medium businesses. These respondents gave their views about internet banking The statistical analysis involves comparing means, range, sum, and standard deviation. The comparisons of means will enable understanding of the variable contribution and views about internet banking. The test conducted includes t-test (one sample) one variable and descriptive statistics. This is appropriate for analyzing data because the data in this questionnaire involves one variable. Descriptive statistics and frequencies will be used to explain the relationship between variables. In some instance, cross tabulation analysis will be employed to ascertain the relationship between two or more variables. The outcome of data analysis will be presented in tables and pie charts that can be easily interpreted (Malhotra 1996) Results A. What are SMEs internet banking purposes? Based on the research findings about the use of internet banking, the respondents who participated answered the questions said that they use internet banking for various purposes. The SMEs use banks like the IFC global finance to pay bills and purchase goods and services. The analysis of the respondents reveals that most of the use online internet banking to purchase goods and services. My firm uses internet banking to buy goods and services Frequency Percent Valid Percent Cumulative Percent Valid 1 46 16.0 16.8 16.8 2 28 9.8 10.2 27.0 3 73 25.4 26.6 53.6 4 87 30.3 31.8 85.4 5 40 13.9 14.6 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 Further analysis shows that the respondents also use internet banking to pay bills. My firm uses internet banking to pay general bills Frequency Percent Valid Percent Cumulative Percent Valid 1 6 2.1 2.2 2.2 2 15 5.2 5.5 7.7 3 42 14.6 15.4 23.1 4 92 32.1 33.7 56.8 5 118 41.1 43.2 100.0 Total 273 95.1 100.0 Missing System Missing 14 4.9 Total 287 100.0 The table above analyzes how the small and medium businesses use internet banking. The findings reveal that SMEs use internet banking to buy goods and services. The mean of SMEs using the bank for buying goods and services is 3.17. This is outcome’s skeweness is -0.387 showing that majority of the respondents attest to this function of the bank. (full report at the appendix) B. What SMEs perceive about the quality of internet banking service? I say positive things about my bank Frequency Percent Valid Percent Cumulative Percent Valid 1 1 .3 .4 .4 2 6 2.1 2.2 2.6 3 64 22.3 23.4 25.9 4 130 45.3 47.4 73.4 5 73 25.4 26.6 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 This output reveals that more than 73% of the respondents are happy with the quality of their banks services and they say positive things about their bank. C. What SMEs perceive about the trustworthiness of internet banking service? The research conducted on SMEs about their perception of internet banking reveals that majority of the respondents are confident with their banks. I trust my bank totally Frequency Percent Valid Percent Cumulative Percent Valid 1 3 1.0 1.1 1.1 2 10 3.5 3.6 4.7 3 47 16.4 17.2 21.9 4 117 40.8 42.7 64.6 5 97 33.8 35.4 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 This output shows that more than 64.6% of the respondent’s trust their banks while only a few SMEs do not trust their banks. D. How loyal SMEs are towards their bank? I am very loyal to my bank Frequency Percent Valid Percent Cumulative Percent Valid 1 2 .7 .7 .7 2 14 4.9 5.1 5.8 3 62 21.6 22.6 28.5 4 108 37.6 39.4 67.9 5 88 30.7 32.1 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 The analysis of data shows that 67.9% of the respondents who responded to the questions were loyal to their banks. Out of 287 respondents, 196 respondents said they were loyal to their banks. The loyalty is confirmed by a t-test value of 17.750. E. The difference between small and medium business’s view on online banks Revised category of small and medium business * I trust my bank totally Crosstabulation Count I trust my bank totally Total 1 2 3 4 5 Revised category of small and medium business Small 3 9 25 69 51 157 Medium 0 1 22 48 46 117 Total 3 10 47 117 97 274 Revised category of small and medium business * I am very loyal to my bank Crosstabulation Count I am very loyal to my bank Total 1 2 3 4 5 Revised category of small and medium business Small 1 10 32 64 50 157 Medium 1 4 30 44 38 117 Total 2 14 62 108 88 274 It is evident from the analysis that small businesses have developed more trust on online internet banking than the medium businesses. Small businesses are also very loyal to the banks than the medium businesses. I am very loyal to my bank Frequency Percent Valid Percent Cumulative Percent Valid 1 2 .7 .7 .7 2 14 4.9 5.1 5.8 3 62 21.6 22.6 28.5 4 108 37.6 39.4 67.9 5 88 30.7 32.1 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 This output analysis reveals that 67.9% of the respondents are loyal to their online banks because they have trust with the bank. It shows that 108 of the respondents are loyal to their banks. Only 28.5% of the respondents are not loyal to their banks. Conclusion The research has revealed that majority of the managers who completed their questionnaire have adopted the use of loyal to online internet banking because of its reliability and wide range of services. How would you describe your role * I would recommend my bank to someone who seeks advise Crosstabulation Count I would recommend my bank to someone who seeks advise Total 2 3 4 5 How would you describe your role Owner-operator 6 22 50 27 105 Manager 4 28 68 39 139 Other 0 6 12 9 27 21 0 0 1 0 1 Total 10 56 131 75 272 The manager who is happy with the services and is willing to recommend the bank to somebody reveals the benefit of internet banking. 66 respondents are not happy with the banks services. The marketers should enhance proper mechanisms to capture the market. Many managers have adopted the use of online banks because the banks use simple communication that is easily understood. Online information and text are easy to understand Frequency Percent Valid Percent Cumulative Percent Valid 1 1 .3 .4 .4 2 6 2.1 2.2 2.6 3 44 15.3 16.1 18.6 4 107 37.3 39.1 57.7 5 116 40.4 42.3 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 223 respondents who returned their questionnaires confirm the simplicity of the banks communication. Recommendations Even, though the use of online internet banking has been adopted by small and medium businesses, some of the respondents do not feel it is secure for investment purposes. My firm uses internet banking for making investments Frequency Percent Valid Percent Cumulative Percent Valid 1 77 26.8 28.1 28.1 2 39 13.6 14.2 42.3 3 47 16.4 17.2 59.5 4 56 19.5 20.4 79.9 5 55 19.2 20.1 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 This output reveals that 77 of the respondents do not trust online bank with their investment. The banks should, therefore, implement policies regarding the safety of business investments. The analysis also reveals that small-scale businesses are more loyal and trust worthy than medium business. 157 Respondents small businesses are loyal to their banks compared with 117 medium businesses. Online banking marketers should implement policies to increase the participation of medium businesses in online banking. The banks should implement strict confidentiality rules because some of the respondents claim that their information with the bank is not confidential. My bank’s website maintains confidentiality of personal information Frequency Percent Valid Percent Cumulative Percent Valid 2 6 2.1 2.2 2.2 3 24 8.4 8.8 10.9 4 97 33.8 35.4 46.4 5 147 51.2 53.6 100.0 Total 274 95.5 100.0 Missing System Missing 13 4.5 Total 287 100.0 This output shows that 30 of the respondents feel that the website do not maintain confidentiality of information. Finally, some respondents cannot easily contact their online banks. My bank is easy to contact online Frequency Percent Valid Percent Cumulative Percent Valid 1 7 2.4 2.6 2.6 2 14 4.9 5.2 7.8 3 63 22.0 23.3 31.1 4 107 37.3 39.6 70.7 5 78 27.2 28.9 99.6 55 1 .3 .4 100.0 Total 270 94.1 100.0 Missing System Missing 17 5.9 Total 287 100.0 The analysis shows that some of up to 31.1% cannot easily contact their online banks. The banks should, therefore, increase their accessibility to their customers. References Malhotra, N. H. (1996). Marketing research: An applied orientation. Sydney. Australia: Prentice Hall. Srivastava. (2000). Statistics For Management. Broadway, New York: Tata McGraw-Hill Education. Appendix Descriptive Statistics showing how the respondents use internet banking N Statistic range mean Std. d variance skewness Std. Error My firm uses internet banking to buy goods and services 274 4 3.17 1.285 1.652 -.387 .147 My firm uses internet banking to pay suppliers 275 32 3.95 2.086 4.351 9.731 .147 My firm uses internet banking to pay general bills 273 4 4.10 .998 .997 -1.078 .147 My firm uses internet banking to pay business credit cards bills 274 4 3.92 1.223 1.495 -1.129 .147 My firm uses internet banking to pay for insurance 275 4 3.79 1.247 1.556 -.848 .147 My firm uses internet banking to pay staff wages 273 4 4.22 1.225 1.501 -1.532 .147 My firm uses internet banking for loan repayments 275 4 3.73 1.333 1.776 -.860 .147 My firm uses internet banking to pay vehicle lease payments 275 4 3.26 1.525 2.325 -.344 .147 My firm uses internet banking to pay premise lease payments 275 4 3.44 1.494 2.232 -.511 .147 My firm uses internet banking to pay plant & machinery lease payments 273 4 3.16 1.549 2.400 -.224 .147 My firm uses internet banking to transfer money 273 4 4.32 .973 .947 -1.672 .147 My firm uses internet banking to receive payments from customers 274 4 3.34 1.400 1.961 -.436 .147 My firm uses internet banking for making investments 274 4 2.90 1.507 2.272 .027 .147 My firm uses the internet for managing investments 275 4 2.91 1.479 2.188 .034 .147 My firm uses internet banking for foreign currency transactions 273 4 2.25 1.397 1.951 .656 .147 My firm uses internet banking to view account transactions history 273 21 4.32 1.477 2.181 5.839 .147 My firm use internet banking to access online statements 273 50 4.49 2.989 8.935 13.878 .147 My firm use internet banking to liaise/communicate with the bank 272 4 3.15 1.310 1.715 -.222 .148 Valid N (listwise) 259 One-Sample Test Test Value = 3 t df Sig(2-tailed)... Mean Difference 95% Confidence Interval of the Difference Lower Upper I am very loyal to my bank 17.750 273 .000 .97 .86 1.08 Hypothesis testing using t-test a) Hypothesis Testing the purpose of internet banking. 1. Internet banking has no purpose on the SMEs 2. Internet banking has a purpose of serving the SMEs 3. If p value >0.05, reject. Null hypothesis The findings from the research confirms the hypothesis by stating that SMEs use internet banking to pay business credit cards with a mean value of 3.92 and t-test value of 39.522. The SMEs also use internet banking for paying suplier. This is chareaterized by amean of 3.92 and a t-test value of 23.417.(See ful report from the tables). Revised category of small and medium business * My firm uses internet banking to pay suppliers Crosstabulation Count My firm uses internet banking to pay suppliers Total 1 2 3 4 5 33 Revised category of small and medium business Small 8 8 29 67 45 1 158 Medium 10 6 19 41 41 0 117 Total 18 14 48 108 86 1 275 This hypothesis rejection is confirmed because SMEs use online banks to buy goods and services with a mean of 3.17 and one tailed t-test result of 27.968. The SMEs also use online internet banking to receive payment from their customers with a mean of 3.34. This function is confirmed by the t-test value of 27.651. (See the tables above for full report) The t-test result confirms that the SMEs use online internet businesses to increase their perfomance. Hence, the null hypothesis is rejected. The hypothesis stating that internet banking has no purpose is not true. The t-test with 95% confidence interval confirms that SMEs firms are happy working with internet banking given with a t-test value of 21.588. In addittion the SMEs also say posive things a bout their banks given by the t-test value of 83.479. (See full report from the table below) One-Sample Test Test Value = 0 t df Sig(2-tailed)... Mean Difference 95% Confidence Interval of the Difference Lower Upper Revised category of small and medium business 49.278 286 .000 1.4495 1.3916 1.5074 I am very loyal to my bank 72.600 273 .000 3.97 3.86 4.08 I say positive things about my bank 83.479 273 .000 3.98 3.88 4.07 Our firm works well with my bank 21.588 271 .000 4.51 4.10 4.93 I can talk to a customer service representative at any time 72.531 273 .000 3.93 3.82 4.04 My bank can be trusted to behave ethically 81.003 267 .000 4.22 4.12 4.33 I trust my bank totally 77.051 273 .000 4.08 3.97 4.18 I would recommend my bank to someone who seeks advise 83.268 273 .000 3.99 3.90 4.09 b) Hypothesis testing the SMEs perception of the quality of internet banking. 1) Intenert banking has higher quality 2) Internet banking has lower quality 3) Reject if t value > 0.05. Null hypothesis 4) Confidence interval 95% 5) Findings show that quality of information and text are good confirmed by t value of 85.512. 6) The quality of banks links are good confirmed by a t-test value of 26.055. 7) Reject null hypothesis. In both cases t value >0.05 8) True hypothesis. Internet banking has higher quality 9) False hypothesis. Internet banking has lower quality One-Sample Test Test Value = 0 t df Sig(2-tailed)... Mean Difference 95% Confidence Interval of the Difference Lower Upper Online information and text are easy to understand 85.512 273 .000 4.21 4.11 4.30 My bank’s website links are problem free 26.055 273 .000 4.14 3.82 4.45 c) Hypothesis testing the SMEs perception about the trustworthyness of their banks services. 1. SMEs trust my bank 2. SMEs do not trust their banks 3. Confidence level = 95% (one sample t-test) one variable. 4. If t value >0.05, reject. Null hypothesi 5. T-value is 77.051. Indicating that most of the respondetns trust their banks. 6. Reject null hypothesis One-Sample Test Test Value = 0 t df Sig(2-tailed)... Mean Difference 95% Confidence Interval of the Difference Lower Upper I trust my bank totally 77.051 273 .000 4.08 3.97 4.18 d) Hypothesis testing how loyal SMEs are towards their banks 1) SMEs are loyal to their banks 2) SMEs are not loyal to their banks 3) Confidence level = 95% (one-tailed t-test) 4) If t value >0.05, reject the null hypothesi 5) T value = 72.600. This shows that majority of the SMES are loyal to their banks. 6) The null hypothesis is rejected One-Sample Test Test Value = 0 t df Sig(2-tailed)... Mean Difference 95% Confidence Interval of the Difference Lower Upper I am very loyal to my bank 72.600 273 .000 3.97 3.86 4.08 e) Hypothesis testing the the veiws of small and medium business about internet banking interms of trust worthiness or loyalty. 1) Internet banking is used by small businesses more than medium businesses 2) Internet banking is used by medium businesses more than small businesses 3) If correllation Read More