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Investigation of How the Shift from Physical Personal Banking to online Banking Has Affected Consumers

Autor:   •  March 11, 2018  •  2,905 Words (12 Pages)  •  83 Views

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In line with the above assumption, Kim and DeVaney (2016) claim that online banking is preferred to traditional banking by millennials because it is faster and efficient. For this reason, millennials are more likely to embrace internet banking than their parents, who are more accustomed to traditional banking. The finding is consistent with Hussain and Wong’s (2015) observations that online banking facilitates fast dispensation of services, thus reducing the overall time spent banking. Ordinarily, millennials are viewed as techno-savvy and more educated compared to their parents. This stereotype has been used as the basis for justifying why more millennials are adopting online banking as compared to their older generation. Further, Rodgers’ theory of diffusion and innovation as presented by DeVaney (2016) suggests that the acceptance of technology is influenced by knowledge and experience.

On the other hand, others researchers hold a different opinion regarding the attitudes of customers towards online banking. Hanafizadeh, Keating, and Khedmatgozar (2014) reveal the little adoption of online banking in the developing countries. This trend is associated with the inadequate availability of technology, coupled with differences in culture. For instance, Riffai, Grant, and Edgar (2012) found that only 36% of the educated Omani population use internet banking, despite the country constituting mostly middle-class citizens with the means to access the reliable internet (Riffai, Grant, & Edgar 2012). Therefore, the culture of internet banking in the developing world is not widespread when compared to the developed world. AbuShanab, Pearson, and Setterstrom (2010) argue that most technology adoption theories do not fit well in the developing world because they fail to factor in the aspect of cultural differences.

The issue of cyber security also rises prominently regarding online banking. According to Jansen and Leukfeldt (2016), the fear of losing money to cyber hacks prevents people from adopting online banking. As internet banking evolves, so have cyber-attacks (Wei et al. 2013). This situation places great pressure on banks to maintain up-to-date security systems to counter the growing cyber-attacks. Kim and DeVaney (2016) argue that banks fail to provide frequent information about their online banking security systems as a way of ensuring customers’ confidence. This observation undermines consumer trust regarding online banking (Yap et al. 2010).

Research on this subject is important since it reveals why banks have shifted toward online banking: to improve the efficiency of conducting business while also enhancing customer satisfaction (Singh & Malhotra 2015). Therefore, the advantages of online banking are twofold, both to the banks and customers. One advantage of online banking is that it reduces the cost of conducting business. Riffai, Grant, and Edgar (2012) assert that banks resort to online banking to minimise overhead costs. By cutting on overhead cost, they can extend cheaper services to their customers. Online banking is usually cheaper compared to traditional banking (Martins, Oliveura, & Popovic 2014). Online banking also leads to increased efficiency since the services are conducted in a faster way. Online banking saves time for the customer (Ali 2016).

This project relates to the above literature on the impact of personal banking on consumers. This claim follows the observed customers’ shift from traditional banking to the adoption of various apps that enable them to access services at any time of the day. This conventional banking is riddled with long queues and paper-based transactions, which encourage time wastage. On the other hand, online banking facilitates faster transactions, subject to the availability of fast internet connection (Safeena & Date 2015; Montazemi & Qahri-Saremi 2015). Whenever clients visit any bank, they expect to spend minimal time conducting the required banking transactions because of other demanding activities in their lives. Online banking has also led to the ‘banking anytime and everywhere’ phenomenon, which eliminates the need to visit a bank physically (Jamaludddin 2015). Additionally, online banking has made it possible for customers to save many funds such as bus fare or physical documents, which they were initially using to authenticate their transactions (Jamaludddin 2015). Online banking embraces cashless shopping. This plan eliminates the need for carrying money to shopping stores and service entities (Montazemi & Qahri-Saremi 2015).


This study will rely on both primary and secondary research. Qualitative and quantitative data will be collected. For the primary research, surveys will be conducted to customers outside bank branches. Survey questionnaires will be used to collect data from the participants. The first part of the questionnaire (Part A) will be designed to gather quantitative data while the second part (Part B) will be meant for collecting qualitative data. For part A, the researcher will use the mixed method research design that upholds the use of both qualitative and quantitative data. This design is convenient for this project because it gives the researcher the leeway to apply the said qualitative and quantitative data. Participants will be asked to provide responses to predetermined questions contained in the questionnaire. Each question will include four multiple choices as a way of guiding the participants’ responses.

The quantitative description is important to researchers when they wish to focus on measurable aspects of data, for instance, magnitude and size (Polit & Beck 2013). Part B of the questionnaire, intended to gather qualitative data, will consist of open-ended questions to collect data on the experiences, attitudes, and opinions of participants regarding personal online banking. A phenomenological design will be used to analyse responses under part B. Polit and Beck (2013) explain how phenomenological research is essential in bringing out the lived experiences of people.

In terms of focus groups, data will be categorised according to the age groups of the participants. Three categories will be included, namely, Baby Boomers, Generation x, and Generation Z. These categories are based on the assumption that the age of participants will determine their attitude toward online banking.

Between 100 and 150 participants will take part in the survey. The participants will be of different age groups based on the assumption that the acceptance of online banking differs between the older and younger generations. Data obtained from the study will be analysed using SPPS version 194.0. Cross-tabulations will be used to calculate descriptive data. The


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