LLiinnggnnaann UUnniivveerrssiittyy DDiiggiittaall CCoommmmoonnss @@ LLiinnggnnaann UUnniivveerrssiittyy Department of Computing and Decision Theses & Dissertations Sciences 10-2001 UUnnddeerrssttaannddiinngg aaddooppttiioonn aanndd ccoonnttiinnuuaall uussaaggee bbeehhaavviioouurr ttoowwaarrddss iinntteerrnneett bbaannkkiinngg sseerrvviicceess iinn HHoonngg KKoonngg Siu Cheung CHAN Follow this and additional works at: https://commons.ln.edu.hk/cds_etd Part of the E-Commerce Commons RReeccoommmmeennddeedd CCiittaattiioonn Chan, S. C. (2001). Understanding adoption and continual usage behaviour towards internet banking services in Hong Kong (Master's thesis, Lingnan University, Hong Kong). Retrieved from http://dx.doi.org/ 10.14793/cds_etd.5 This Thesis is brought to you for free and open access by the Department of Computing and Decision Sciences at Digital Commons @ Lingnan University. It has been accepted for inclusion in Theses & Dissertations by an authorized administrator of Digital Commons @ Lingnan University. Terms of Use The copyright of this thesis is owned by its author. Any reproduction, adaptation, distribution or dissemination of this thesis without express authorization is strictly prohibited. All rights reserved. UNDERSTANDING ADOPTION AND CONTINUAL USAGE BEHAVIOUR TOWARDS INTERNET BANKING SERVICES IN HONG KONG by CHAN Siu Cheung A thesis submitted in partial fulfillment of the requirements for the Degree of Master of Philosophy Lingnan University October 2001 ABSTRACT Understanding Adoption and Continual Usage Behaviour towards Internet Banking Services in Hong Kong by CHAN Siu Cheung Master of Philosophy Banks and financial institutions in Hong Kong are increasingly finding themselves facing rapid increases in turbulence and complexity, leading to greater uncertainty and increased competition. Customers are also becoming more demanding. Apart from the traditional type of banking services, customers today require more personalized products and services, and access to such services at any time, and at any place. Although there is no panacea for banks to stay competitive, Internet Banking is one of the advanced information technologies they can employ to achieve a high level of customer services. Internet Banking is an emerging technology that permits conduct of banking transactions through the Internet. From the banks’ point of view, it requires the lowest transaction cost among various channels, just one percent of branch-based banking. It also can improve the efficiency and effectiveness of corporate business processes through elimination of paper work. One of the many benefits of Internet Banking is that customers can use bank services 24 hours a day from anywhere in the world. This study investigates university students' adoption/continual usage behaviour within the context of Hong Kong Internet Banking services. A research framework based on the extension of Technology Acceptance Model and Social Cognitive Theory was developed to identify factors that would influence the adoption/continual usage of Internet Banking. The framework includes subjective norm, image, result demonstrability, perceived risk, computer self-efficacy, perceived usefulness, perceived ease of use and intention constructs. A diverse sample of undergraduate and postgraduate students of seven universities in Hong Kong was used to test the models. Structural Equation Modeling was used to examine the entire pattern of intercorrelations among the eight proposed constructs and to test related propositions empirically. The results reveal that both subjective norm and computer self-efficacy play significant roles in influencing the intention to adopt Internet Banking indirectly. Perceived usefulness has significant positive effect on intention to adopt, this result supports the extension of the Technology Acceptance Model. Perceived ease of use has significant indirect effect on intention to adopt/continual usage through perceived usefulness, while its direct effect on intention to adopt is not significant in this empirical study. Theoretical contributions and practical implications of the findings are discussed and suggestions for future research are presented. I declare that this thesis « Understanding Adoption and Continual Usage Behaviour towards Internet Banking Services in Hong Kong » is the product of my own research and has not been published in any other publications. CHAN Siu Cheung October 2001 T O C ABLE F ONTENTS TITLE PAGE ABSTRACT DECLARATION OF ORIGINALITY APPROVAL SHEET TABLE OF CONTENTS...........................................................................................i LIST OF TABLES.....................................................................................................iv LIST OF FIGURES...................................................................................................v LIST OF SYMBOLS.................................................................................................vi LIST OF ABBREVIATIONS....................................................................................vii ACKNOWLEDGEMENTS......................................................................................viii C 1 I HAPTER NTRODUCTION 1.1 Background.........................................................................................................1 1.2 Objectives and Importance of the Research.....................................................4 1.2.1 Research Objectives................................................................................5 1.2.2 Significance of the Study........................................................................6 1.3 Organization of the Thesis..................................................................................8 C 2 I B H K HAPTER NTERNET ANKING IN ONG ONG 2.1 Conception of Internet Banking.........................................................................10 2.2 The Cost-Effectiveness of Internet Banking.....................................................11 2.3 Technological Evolution of Hong Kong Retail Banking Services....................12 2.3.1 Automatic Teller Machine.......................................................................12 2.3.2 Telephone Banking..................................................................................12 2.3.3 Home Banking.........................................................................................13 2.3.4 Internet Banking......................................................................................14 2.4 Direct Observations of Internet Banking Services in Hong Kong...................15 2.4.1 View-Only Functions..............................................................................19 2.4.2 Account Control Functions....................................................................19 2.4.3 New Services Applications.....................................................................20 2.4.4 Investment Functions..............................................................................20 2.4.5 Other Services..........................................................................................21 2.4.6 Conclusion...............................................................................................22 2.5 Chapter Summary...............................................................................................23 C 3 L R HAPTER ITERATURE EVIEW 3.1 Social Psychology...............................................................................................24 3.1.1 Theory of Reasoned Action (TRA)........................................................25 3.1.2 Theory of Planned Behaviour (TPB)......................................................27 i 3.2 Information Technology Acceptance................................................................31 3.2.1 Technology Acceptance Model (TAM)..................................................31 3.2.2 Differences between TAM and TPB.......................................................32 3.2.2.1 Degree of Generality................................................................33 3.2.2.2 Social Influences......................................................................34 3.2.2.3 Behavioural Control.................................................................35 3.2.3 Extension of Technology Acceptance Model (TAM2)..........................36 3.3 Risk Perception...................................................................................................38 3.4 Social Cognitive Theory - Self-Efficacy............................................................40 3.5 Chapter Summary...............................................................................................44 C 4 M HAPTER ETHODOLOGY 4.1 The Research Framework...................................................................................45 4.2 Development of Hypotheses..............................................................................47 4.3 Questionnaire Design.........................................................................................54 4.3.1 Salient Belief Elicitation..........................................................................54 4.3.2 Measurements of the Constructs............................................................55 4.4 Pilot Tests...........................................................................................................56 4.4.1 Online Questionnaire...............................................................................57 4.5 Sampling and Data Collection Procedure.........................................................58 4.6 Statistical Analysis..............................................................................................61 4.6.1 Structural Equation Modeling.................................................................62 4.6.2 LISREL....................................................................................................65 4.6.3 Assessment of Model Fit........................................................................67 4.7 Refinement and Validation of the Scale Items..................................................72 4.7.1 Refinement of the Scale Items................................................................72 4.7.2 Testing of Factor Structure of the Dimensions......................................72 4.7.3 Unidimensionality...................................................................................73 4.7.4 Reliability.................................................................................................73 4.7.5 Convergent and Discriminant Validity...................................................75 4.8 Chapter Summary...............................................................................................76 C 5 D A HAPTER ATA NALYSIS 5.1 Sample Demographics........................................................................................77 5.2 Confirmatory Factor Analysis of the Constructs..............................................81 5.2.1 Model Specification.................................................................................81 5.2.2 Model Assessment..................................................................................83 5.2.3 Model Modification.................................................................................85 5.2.3.1 Residuals..................................................................................85 5.2.3.2 Modification Indices................................................................85 5.2.4 Post Hoc Analyses..................................................................................87 5.2.5 Constructs Reliability and Validity.........................................................89 5.3 Analysis for Structural Path Models..................................................................90 5.3.1 Users of Internet Banking.......................................................................90 5.3.2 Potential Adopters of Internet Banking..................................................93 5.3.3 Explaining Intention to Adopt/Continual Usage...................................96 ii 5.3.4 Explaining Perceived Usefulness............................................................99 5.3.5 Explaining Perceived Ease of Use..........................................................101 5.3.6 Explaining Image.....................................................................................101 5.3.7 Gender Differences..................................................................................102 5.4 Respondent Characteristics................................................................................103 5.4.1 Banking Habits........................................................................................103 5.4.2 Internet Banking Knowledge and Preferences.......................................109 5.4.3 Expectations for Internet Banking Services...........................................112 5.5 Chapter Summary...............................................................................................115 C 6 C HAPTER ONCLUSION 6.1 Contributions and Theoretical Implications......................................................116 6.2 Practical Implications..........................................................................................118 6.3 Limitations.........................................................................................................123 6.4 Future Research Directions................................................................................124 6.5 Conclusion.........................................................................................................126 A PPENDICES A. Internet Banking Services in Hong Kong (May 2000)....................................127 B. Internet Banking Services in Hong Kong (May 2001)....................................129 C. Questionnaire ....................................................................................................131 D. Mean Score System...........................................................................................136 E. Descriptive Statistics and Intercorrelations......................................................138 B IBLIOGRAPHY...................................................................................................140 iii L O T IST F ABLES Table 2.1 Relative Costs per Transaction for the US Banks.................................11 Table 4.1 Definition of the Research Constructs...................................................47 Table 4.2 Reliability Analysis of the Constructs in the Pilot Test.........................57 Table 4.3 Major Computer User Age Groups (1994 and 1998)............................60 Table 4.4 Details of Selected Student Canteens....................................................61 Table 5.1 Sample Demographics............................................................................78 Table 5.2 Distribution of Respondents by Universities........................................79 Table 5.3 Number of Hours Spent on the Internet per Week...............................79 Table 5.4 Fit Indices for Measurement Models.....................................................83 Table 5.5 Squared Multiple Correlations...............................................................84 Table 5.6 Fit Indices for the Final CFA Model......................................................87 Table 5.7 Standardized Parameter Estimates for the Final CFA Model...............88 Table 5.8 Assessment of Unidimensionality, Reliability and Convergent Validity..............................................................................89 Table 5.9 Fit Indices for Continual Usage Models................................................92 Table 5.10 Fit Indices for Adoption Models...........................................................94 Table 5.11 Summary of Research Results..............................................................95 Table 5.12 Number of Banks that the Respondents Have Accounts in................104 Table 5.13 Rankings of Six Banking Channels Based on Frequency of Use.......105 Table 5.14 Frequency of Use of the Banking Services per Week..........................108 Table 5.15 Sources of Internet Banking Information.............................................110 Table 5.16 Reasons for Not Using Internet Banking..............................................111 Table 5.17 Rankings of Expected Internet Banking Services................................112 Table 5.18 Preferences on Internet Banking Fee Structure....................................114 iv