A study on customer loyalty towards internet banking in hong kong china

The research is based on Hong Kong where the research data will be collected and analyzed. The research also focused on the customer’s perceptions and thoughts that would determine their loyalty to internet banking. It has been considered that not all the customers using the internet banking method have the same experience as some experience a lot of difficulties in using it while to some, it is most convenient. The study at this stage has indicated most of the aspects that might impact the consumer loyalty to internet banking such as ease to use, security, privacy, and quality of service. The determinants are well explained in the research and studies appropriately about customer satisfaction. Now, many banks have incorporated the internet banking system in their operations to meet the consumer wants and to remain competitive in the market.

Moreover, the competition level for banking has increased steadily whereby technology has been used significantly to revolutionize the innovations and competitions. Operation of the internet or online banking is done through mobility using equipment such as computers and smartphones. The banks create links and portals for every customer where they can easily access their accounts. Internet banking can be incorporated in the banks through its website where the customers can get a ling to their portals and log into their accounts with their own personal and private credentials (Martins, Oliveira, & Popovič, 2014). The current technology is characterized by a lot of security issues such as hacking and cybercrimes that has led to a lot of fraudulent activities. This has brought a lot of trust issues in the customers as they do not intend to use the online banking system because of security and privacy.

Moreover, the safety of most banking systems have ever been breached, and many cases have been reported of online theft and transfer of funds from the consumer side. The banks, therefore, are not held responsible for the loss of the funds since the consumers are the ones who have the control of the funds. Moreover, most of the banks have access and power to the consumer bank portals which also beings about privacy and safety issues. They affect the reference of the customer and the choices of the specific customers (Honore et, al, 2011). People, therefore, have different perceptions of the banking system which has gained a lot of critiques over the past years. Consumer loyalty, thus, refers to the rate at which the customers trust and believe in internet marketing.

They have different tastes, and from the experience of the banking system, they will be able to establish some of the strengths and weaknesses of the banking system. Customer loyalty is determined with the following in the banking system. People, therefore, need to keep their money safe in the banks which are most trusted. There has also been an emergence of an improved economy where most of the people are employed and depend on income which they intend to store some of the surpluses in the banks. Also, transactions were very tedious, and many errors used to occur in the banks where the probability of sending money to the wrong person was very high. Online banking, therefore, should serve a significant purpose of easing the banking system where an individual can be able to send their money to anyone they want to at any time of the day.

It, therefore, calls for the flexibility of the banking system. • To establish critical aspects and implementations that can be put in place to increase customer loyalty in the internet or online banking. • To generate new avenues for further research n the same field • To design a way in which customer loyalty can be measured according to internet banking. The significance of the study The study is significant and serves a significant purpose of the banking systems in Hong Kong. The banking and money industry can utilize the research in many ways such as to establish the consumer specific needs and preferences according to the online banking systems. To know the limitations of internet banking and strategize on implementations to make them better.

The trust and the loyalty of the customer are regarded as very crucial elements in any business activity. Hypothesis testing The hypothesis of the research is generated from some of the objectives of the study. They will also be explained further in the next sections. Objective 1: To explore the reasons why customers trust internet banking and their commitment is high despite the challenges that surround it Hypothesis 1. The level of customer loyalty towards online banking in Hong Kong is very high Objective 2. In this framework, the essential reasons for customer expectations contribute significantly to the decision-making process of the consumers to use the online banking systems. The loyalty is also explained through various factors as key agents including time, flexibility, security and culture.

  CHAPTER 2 LITERATURE REVIEW Introduction The internet serves a significant purpose in the banking system since it is used as a distribution channel which the banks in Hong Kong use to deliver the banking services to consumers. It is a recommended more natural way to deliver services to consumers in the digital era. Banks with the internet banking system perform very well in the market as many people are directed to prefer a more comfortable and flexible banking system which they might get from specific banks. Law of diffusion of innovation This is a theory that demonstrates how innovation is diffused across different segments of consumers. Everett Rogers developed it in 1962. This law is relevant to the topic and tries to explain why some people are yet to use internet banking even though it has been in the market for several decades (Rogers, 2010).

The law explains much on the adoption of technology which is evident in the modern day world. There are many aspects and instruments of technology which are adopted of late with the aim to improve the lives and the living standards of individuals. The aspect of paying bills online has been achieved by the increase in technology where most of the bill payments are automated and are done online for more secure transactions. It has therefore made life easier since no one will have to walk from place to place to pay the bills or walk into the banks to deposit money for their bills. The author also adds that internet banking has made the transaction of money very much more comfortable as one can transfer funds from one bank account to another and also have a quick view of their transactions.

Internet banking has eased the way people handle money in society. With a bank account, one has to control the movement of money by sending or receiving from different sources. The customers, therefore, want products with such traits to satisfy their consumer wants. Another essential method if creating customer loyalty is forming leverage technology and rewarding the customers who use online banking systems. The customer always needs to be satisfied in their services they purchase from the banks. The banks, therefore, consider customer satisfaction which they also use to change their perception toward internet banking positively. In most cases, the banks should consider guiding customers through their service delivery systems which is the online banking and finance system. There are many ways in which customers can be affected to use the online banking system.

The main aim of the customers is to gain satisfaction by using internet banking. Some of the drivers include internet and technology which are the core factors that have contributed to the extensive use of online banking in society. However, there are quite many challenges that are faced by the customers in using the online problems. The development challenges tend to hinder the use of online banking services and affect customer loyalty extensively. The perception of the consumers has therefore led to a declining in their loyalty. Customer perceptions and behavioural intentions Guriting and Oly, (2006) explain the customer expectations and behaviour intention regarding online banking. The research identifies some of the factors that determine the intent to use online banking by the consumers which are relayed in the technology acceptance model.

The technology acceptance model is used to evaluate customer willingness and perceptions of internet banking. The research has thus found that the customer intends to use online banking is caused by perceived ease of technology (Guriting & Oly Ndubisi, 2006). They, therefore, focus on the technological benefits and integration in their respective organizations. The combination of technology, thus, played a significant role in increasing room for innovation of the internet banking system used by some banks today. The internet has consequently been integrated into all the services of the banks where consumers benefit from the service delivery system. The internet banking is a service delivery method that is integrated into the companies to increase their competitive advantages. Since most of the banks today are integrated with internet banking systems, they work very hard to convince the consumers and to gain their loyalty through advertisement methods for them to use internet services.

When the consumers want to send money frequently to people in different places and preferably not waste time going to queue at the banks, they will consider using online banking to send funds. Most of the consumers also prefer checking on their accounts through the online banking systems and too easy access the money for different purposes. In this era, most people prefer liquid money than coins and notes since they believe it is safer to keep money in the banks than walking around with them which promotes insecurity. People also intend to use internet banking because it is straightforward to use. Internet banking requires a little knowledge of technology which many people have in the society today. The study also related some of the relationships between traditional banking and internet banking which is done to create a proper understanding of the two financial service systems.

The study concludes that internet banking is more effective to the consumers and it acts as a substitute for the traditional banking system. The study also explained the indulgence of technology in service delivery mostly on the distribution of quality and satisfactory services to the consumers. Most of the internet banking systems, therefore, are purposefully changing the way people live in the world today. People have stopped going to the banks since almost all the services are automated and the consumers can also easily contact the banks for any information. To achieve excellent customer satisfaction which will impact positively in the organization, the company provide services and concentrate on the needs of the consumers and satisfy them accordingly. Satisfying the needs of the consumers in a business organization has many positive impacts such as the creation of good relationships with the customers, gaining their loyalty, increasing customer return rate and improving the business generally.

The competitiveness of business organizations is always evaluated by the number of customers that visit the specific organization to purchase products or services. Moreover, service quality has been used to achieve a lot of competitive advantage in most of the banking organizations. The banks also focus on maintaining the excellent customer relationships by attending to their need and making sure that they are well served and satisfied with the services offered within the organization. Moreover, perceived usefulness is also another critical determinant discussed in the study. The customers will try and evaluate the value and significance of the technology in their lives. In internet banking a customer can base their arguments on the importance and significance they will get from using the internet banking system and adopt it.

Their intent to use internet banking will be thus affected by the types of services offered in the internet banking system. If the services are attractive and satisfy the customers, they will not hesitate to use or to adopt internet banking and used it in their lives. Furthermore, different banking organizations have different service qualities through very high competitive to suit the customer’s needs. There are also other three elements that can be sued to evaluate the quality of service including ease, content, and accuracy. The banking industry is very crucial to security matters, and the banks themselves should consider installing a lot of security measure and considerations for the sake of securing their client’s funds. Problems associated with internet banking Today, there have emerged many issues related to internet banking that has affected the customer loyalty and the use of internet banking in most parts of the world.

One of the significant issues is insecurity. Other issues are privacy issues which the customers always need to be considered by the organization. Lack of internet privacy will make the customers very reluctant in using the internet banking systems. Banks should, therefore, concentrate on the various way on how they can reduce the risk factors that affect online banking so that the consumers to have a positive perception towards the internet banking itself. The consumers will, therefore, be attracted one few risk factors or issues might arise when they use internet banking. CHAPTER 3 RESEARCH METHODOLOGY This sector will discuss the methodology aspects which will be used in the research. The results of the report moreover will depend on this sector that will provide factual information drawn from the research practices and objectives.

The study also aims at collecting accurate data which will be analyzed through different methods by the researcher. Sampling design The sampling design will be comprehensive and contain different aspects such as the sampling population, sampling frame, sampling size, sampling techniques, tools for data collection and the questionnaire design. The design is aimed at collecting real information and accurate perceptions of the sample population in which the study is conducted. Moreover, the sampling design is constructed and formulated by the researcher and does not demand a lot to execute. Furthermore, we will also consider looking at the company profiles and websites for customer reviews which will clearly explain some of the customer perceptions. The customer moreover will be people with registered bank accounts and have been using the internet banking system for quite some time.

The first users will not be considered as they could not give clear and comprehensive information about the quality of services they receive in the internet banking systems. Sampling frame The study will be conducted on the clients who have been using the internet banking system for more than six months. The customers will be considered to be from different banks both the private and the public banks. In this research, the sampling element will be the customers or individuals who are using internet banking. They will be instrumental in providing relevant and required information for the study. Sampling techniques Sampling techniques are the various methods utilized by the research to get the appropriate sample in which the study will be based on.

The appropriateness and relevance of the sample population will be determined with the methods used in sample collection; the means must also be appropriate and adequate to achieve the correct sample population. In this research, the non- probability sampling technique was used to determine the population of the research. The sampling techniques will also target people of different social status. The research, therefore, will utilize the non-probability technique which is believed to be very appropriate for explanatory research. The nature of the research is considered to be very direct and comprehensive that require a lot of quality data. The quality data will enable the research to draw clear conclusions and to achieve its aims by producing great results. Sample size The population of the survey consisted of the bank customer from different banks in Hong Kong.

One of the data collection tools that will be used is the questionnaires. Questionnaires are a set of questions that are formulated and organized to collect data directly from the correspondents (Quinlan, Babin, Carr, & Griffin, 2019). Most of the researchers who have contributed to the literature review have utilized this technique widely and has proven to be most appropriate. The questionnaire will be standard and will comprise of 15 questions. Moreover, the questionnaire will be designed to receive responses of the customers on a scale of 1 to 5. Data to be collected The research aims to collect raw data directly from the internet banking users. Some of the relevant data which will be collected in this research include the rate at which the customers use internet banking, their perceptions on the banking system, some of the advantages and disadvantages they experience in using internet banking and how to improve the system to satisfy their wants.

The information which will be collected therefore will be significantly used to draw a lot of conclusions and recommendations that will not only be useful to the research but to many banks in Hong Kong and any other which will consider the study. Many different strategies will be implanted to increase the accuracy of the data collection process and the data collected. The data will be stored appropriately and protected from any interference or tampering. It utilizes and based on the correlations between different researches items which are probably on the same test (McCrae, et, al, 2011). The primary purpose of the internal consistency analysis is to determine whether the tools used to measure a common construct provide the same results despite their difference in nature and principles.

In this research, internal consistency will be used to sieve the items which probably have lower coefficients which are dropped. Factor analysis Factor analysis is also another significant data analysis tool which works through expressing the values of data collected as functions of a lot of causes to discover the most important one. This approach will be utilized in the research to analyse the data appropriately. Mobile banking adoption of the youth market: Perceptions and intentions.  Marketing Intelligence & Planning, 30(4), 444-459. Aladwani, A. M. Online banking: a field study of drivers, development challenges, and expectations. Guriting, P. , & Oly Ndubisi, N. Borneo online banking: evaluating customer perceptions and behavioural intention.  Management research news, 29(1/2), 6-15. Hanafizadeh, P.  Journal of Banking & Finance, 34(7), 1650-1663. Ho, C.