Mobile Banking: Perceived Risks and Perceived Usefulness
Perceived risk is defined as “the possibility that online businesses might use personal information inappropriately hence invading a consumer’s privacy” (Nyshadham, 2000). With respect to perceived risk, two categories need to be defined – performance and psychosocial – with the risk category also having several additional dimensions: performance, financial, opportunity/time, safety, and psychological loss (Cunningham, 1967).
Recent research suggests that customers are highly concerned with the disclosure of their private information such that businesses might take advantage and inappropriately invade a customer’s privacy (Sathe, 1999).. Perceived risk is also influenced by trust, with trust working as an automatic mechanism in reducing a client’s perceived risk.
Privacy risk is important when consumers make payments online or using a mobile device. They are not sure if the important data will be secure in the hands of the institution when they engage in mobile banking transactions. This variable is important for the banks to understand, as there is a growing need to build up trust to reduce the perceived risk of the customer.
‘Perceived use’ is defined as “the degree to which a person believes that using a particular system would enhance his or her job performance, while ‘perceived ease of use’ is defined as the degree to which a person believes that using a particular system would be free of effort” (Samaneh Barati, 2009).
Research by Koivumaki et al suggests that increased user skills would trigger a more positive response and perception toward mobile services and increase the probability of constant service use. Thus, the importance of spreading awareness of the need for advanced technology skills among the general public cannot be overstated (Koivumaki, Ristola, & Kesti, 2008).
Showing posts with label Mobile Banking. Show all posts
Showing posts with label Mobile Banking. Show all posts
Friday, 1 June 2012
How Culture Influences Mobile Banking
How Culture Influences Mobile Banking
For wide acceptance of mobile banking, the social surroundings and culture of users are important. A high level of acceptance of the use of the latest technology affects the acceptance of mobile banking (Samaneh Barati, 2009). Cultural and social factors corresponding with mobile banking will give an optimistic view of the behavioural intention to use mobile banking and vice versa (Samaneh Barati, 2009).
There is a long-standing discussion on m-banking/m-payment use from a social and cultural perspective. Both cultural and social factors on the macro and micro levels have been discussed among friends and families, especially when money is involved (Zelizer, 1994). As illustrated in a survey conducted in Manila (Donner, 2007) people normally prefer to transfer money as a gift to a family member, but they do not like to transfer money to a stranger or less familiar person.
In a technical sense, the working procedures for both are similar, but socially, they are different. Policy-makers and practitioners intend to legalise m-transactions related to particularly common behaviour (“Micro-payment Systems and Their Application to Mobile Networks,” 2006) where two users are using the same mobile device.
However, few recommend that m-banking/m-payment systems should change the system related to family transfers, which give more authority and independence to women in managing household savings (von Reijswoud, 2007).
For wide acceptance of mobile banking, the social surroundings and culture of users are important. A high level of acceptance of the use of the latest technology affects the acceptance of mobile banking (Samaneh Barati, 2009). Cultural and social factors corresponding with mobile banking will give an optimistic view of the behavioural intention to use mobile banking and vice versa (Samaneh Barati, 2009).
There is a long-standing discussion on m-banking/m-payment use from a social and cultural perspective. Both cultural and social factors on the macro and micro levels have been discussed among friends and families, especially when money is involved (Zelizer, 1994). As illustrated in a survey conducted in Manila (Donner, 2007) people normally prefer to transfer money as a gift to a family member, but they do not like to transfer money to a stranger or less familiar person.
In a technical sense, the working procedures for both are similar, but socially, they are different. Policy-makers and practitioners intend to legalise m-transactions related to particularly common behaviour (“Micro-payment Systems and Their Application to Mobile Networks,” 2006) where two users are using the same mobile device.
However, few recommend that m-banking/m-payment systems should change the system related to family transfers, which give more authority and independence to women in managing household savings (von Reijswoud, 2007).
Introducing Mobile Technology and M-Banking in Saudi Arabia
Introducing Mobile Technology and M-Banking in Saudi Arabia
In an early article on the subject, Al-Ashban and Burney make the observation that the increase in mobile banking in countries such as a Saudi Arabia is made inevitable by the maturation of financial markets in the developing world and their increasing integration into the global economy (Al-Ashban and Burney 2001). They explain that both in Saudi Arabia and other parts of the world banks have become increasingly homogenised in order to compete in an increasingly global market. The level of competition increases at an incredibly fast rate, thus intensifying the need for banks to work to achieve ever increasing amounts of differentiation (Al-Ashban and Burney 2001: 191).
Saudi Arabia is a nation with the demographic profile to become an increasingly important consumer of mobile and internet banking solutions (Al-Ashban and Burney 2001). Naturally, in contrast to many other non-Western countries, Saudi Arabia benefits from plentiful financial resources which may be deployed for domestic investment in new technology and infrastructure (Al-Ashban and Burney 2001).
Further through its resource-rich economy, it supports a class of consumers made up of wealthy Saudis and international expats, who demand levels of financial service as sophisticated as is available in any country in the world and, of course, not all Saudis have benefited from the oil economy to such a degree, and many face financial obstacles to signing up for mobile banking (Al-Ashban and Burney 2001).
Saudi Arabia also has experienced a population boom since the growth of oil revenues from the 1970s onwards. A particular feature of the present Saudi demographic make-up as a result of this surge is that the country has an extremely young population (Cordesman 2003).
As the Governor of the Saudi Communications and Information Technology Commission reported in 2007, over 50% of the population was under the age of twenty in 2007 (Al-Suwaiyel 2007). A youthful population is likely to be a vehicle for rapidly changing national culture and cultural expectations, while an aging population is likely to hold faster to values enshrined in the past (Cf. Cordesman 2003).
A great part of the Saudi population has not only grown up in the age of globalisation, the internet and the large-scale import of Western technology, but also have opened or will open their first bank accounts in a period where remote banking is increasingly the norm (Cordesman 2003). Thus, the association of undue risk with mobile banking, and a resistance to change from branch banking may be expected to decline since younger generations will not maintain these cultural baselines (Cordesman 2003).
In an early article on the subject, Al-Ashban and Burney make the observation that the increase in mobile banking in countries such as a Saudi Arabia is made inevitable by the maturation of financial markets in the developing world and their increasing integration into the global economy (Al-Ashban and Burney 2001). They explain that both in Saudi Arabia and other parts of the world banks have become increasingly homogenised in order to compete in an increasingly global market. The level of competition increases at an incredibly fast rate, thus intensifying the need for banks to work to achieve ever increasing amounts of differentiation (Al-Ashban and Burney 2001: 191).
Saudi Arabia is a nation with the demographic profile to become an increasingly important consumer of mobile and internet banking solutions (Al-Ashban and Burney 2001). Naturally, in contrast to many other non-Western countries, Saudi Arabia benefits from plentiful financial resources which may be deployed for domestic investment in new technology and infrastructure (Al-Ashban and Burney 2001).
Further through its resource-rich economy, it supports a class of consumers made up of wealthy Saudis and international expats, who demand levels of financial service as sophisticated as is available in any country in the world and, of course, not all Saudis have benefited from the oil economy to such a degree, and many face financial obstacles to signing up for mobile banking (Al-Ashban and Burney 2001).
Saudi Arabia also has experienced a population boom since the growth of oil revenues from the 1970s onwards. A particular feature of the present Saudi demographic make-up as a result of this surge is that the country has an extremely young population (Cordesman 2003).
As the Governor of the Saudi Communications and Information Technology Commission reported in 2007, over 50% of the population was under the age of twenty in 2007 (Al-Suwaiyel 2007). A youthful population is likely to be a vehicle for rapidly changing national culture and cultural expectations, while an aging population is likely to hold faster to values enshrined in the past (Cf. Cordesman 2003).
A great part of the Saudi population has not only grown up in the age of globalisation, the internet and the large-scale import of Western technology, but also have opened or will open their first bank accounts in a period where remote banking is increasingly the norm (Cordesman 2003). Thus, the association of undue risk with mobile banking, and a resistance to change from branch banking may be expected to decline since younger generations will not maintain these cultural baselines (Cordesman 2003).
Research Precedents: Investigating Early Mobile Banking
Research Precedents: Investigating Early Mobile Banking
Several of the assumptions outlined in the previous chapter with respect to the relationships expected between demographic factors and the uptake of new forms of banking, were confirmed in the early part of the present decade by Al-Ashban and Burney (2001). In general terms, the conclusions of their research found that the greatest inhibitor of mobile technology development is the income inequalities which prevail in Saudi Arabia.
They point out that these kind of technological solutions have a tendency to attract educated and well off demographics and that therefore uptake of such modes is highly correlated to factors such as the age and occupation of the client base (Al-Ashban and Burney 2001).
In other words, a great many people in Saudi simply cannot afford to use such services or, given the state of their finances, see little reward in signing up for tele-banking services (KPMG, 2009). Indeed, 58% of respondents used tele-banking services for inquiries only – balances, exchange rates, recent transactions (KPMG, 2009). Many of the target demographics are unlikely to have a great deal of important financial transactions to make on a daily or monthly basis and the extra convenience of mobile or tele-banking would bring little benefit to them.
The greater contact between customers and banks is likely to increase familiarity and acceptance of new forms of banking. As Al-Ashban and Burney write: “(A)s the exposure of a customer increases…he develops the understanding and trust in the service and consequently, his usage frequency increases” (2001: p197). This effect is enhanced by the fact that companies are most likely to offer trials of new services to their most valued customers.
Further, research shows significant enthusiasm for further developments in mobile banking across the population. This demonsted the openness to change which is be expected of a youthful population and a growing economy.
Several of the assumptions outlined in the previous chapter with respect to the relationships expected between demographic factors and the uptake of new forms of banking, were confirmed in the early part of the present decade by Al-Ashban and Burney (2001). In general terms, the conclusions of their research found that the greatest inhibitor of mobile technology development is the income inequalities which prevail in Saudi Arabia.
They point out that these kind of technological solutions have a tendency to attract educated and well off demographics and that therefore uptake of such modes is highly correlated to factors such as the age and occupation of the client base (Al-Ashban and Burney 2001).
In other words, a great many people in Saudi simply cannot afford to use such services or, given the state of their finances, see little reward in signing up for tele-banking services (KPMG, 2009). Indeed, 58% of respondents used tele-banking services for inquiries only – balances, exchange rates, recent transactions (KPMG, 2009). Many of the target demographics are unlikely to have a great deal of important financial transactions to make on a daily or monthly basis and the extra convenience of mobile or tele-banking would bring little benefit to them.
The greater contact between customers and banks is likely to increase familiarity and acceptance of new forms of banking. As Al-Ashban and Burney write: “(A)s the exposure of a customer increases…he develops the understanding and trust in the service and consequently, his usage frequency increases” (2001: p197). This effect is enhanced by the fact that companies are most likely to offer trials of new services to their most valued customers.
Further, research shows significant enthusiasm for further developments in mobile banking across the population. This demonsted the openness to change which is be expected of a youthful population and a growing economy.
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