Online Banking in Developed and Developing Countries

The attitude and usage of young customers about the online banking services will be a good gauge for the trend of online banking development in the future. To achieve the general objective the study intends to scrutinize on the awareness, acceptance and adoption of the online banking among the customers of the two countries and to determine factors and considerations affecting the future development of the internet banking services. The surveys were conducted in universities in both nations, where most respondents are already enrolled students. The study used primary data which were collected via a well-designed questionnaire survey in English and Chinese languages. The survey was designed based on selected research questions about the internet banking service, and then study concerns were condensed from the current literature INTRODUCTION Banking industry is the foremost industry in the growth and development of internet technology , since unlike most other manufacturing industries that still involve outdated transportation of physical goods, banks can deliver their service through internet and have also reengineered their operations worldwide by offering internet based online services (Stoneman, 2000).

Online twenty four seven banking services( 24/7) greatly reduce the labor cost, extend the service edge and increase the banking efficiency and effectiveness (González et al. , 2008; Smith, 2008). In recent years, mobile banking service is evolving as alternative new direction of internet banking (Gerpott and Kornmeier, 2009). There are many factors that may impact the development of online banking industry, including social factors like cultural, tradition, education, etc. , economic factors such as average income level and technological factors. To scrutinize the awareness, acceptance and adoption of the online banking among the customers of the two countries. To determine factors and considerations affecting the future development of the internet banking services. Hypothesis In order to meet the research questions discussed earlier in this study, the following hypotheses were statistically tested with the correlational analysis.

Both the consumers of online banking using history and frequency are measured in the questionnaire directly. H01: The better the accessibility of internet to all customers, the higher the possibility of online banking services to be accepted and frequently adopted by potential customers. Innovative Diffusion Theory This theory was developed by Rogers (1983). The theory aims to identify the attitudinal, social and perceived behavior control factors that influence the, awareness and more so adoption of online banking or Internet banking theory. Theoretical Framework The purpose of the conceptualization is to explore and summarize the main things that have been studied (Mile & Huberman, 1994). This will be of importance in data collections and understanding the research questions available for this study. Furst, Lang & Nolle ,2002 define internet banking or use the term internet bank to “mean a bank offering its customers the ability to transact business with the bank over the internet” it further defines internet banking as “ the use of internet as a remote delivery channel for banking services”.

It further states that a decade later nearly all banks in USA and Western Europe offered internet banking services in order to retain customers and to gain competitive advantage. Similarly Poland introduced electronic banking in the 90's however this was introduced 23 years later after the UK had introduced Automated Teller Machines. Although PC banking was introduced 8 years later there was steady increase in the usage after the introduction in 1992. Moving on to Internet banking, these services were first introduced in Poland by Powszechny Bank Gospodarczy in October 1998 (Polish Bank Association,2006) which occurred three years after the introduction in the USA and two years after the launch in Europe by a Finnish Bank Osuuspankkien Keskuspankki Oyj currently known as Pohjola Bank. Yuen,Yeow & Lim,2015 states that according to Internet World Stats, 2008 Americans started using internet banking in 1994 when compared to Malaysia in 2000.

Customer Viewpoint Currently in competitive business market environment, for prosperity, many organizations makes sure they have a clear understanding about what customers hold because they are the key to a success of a company. Therefore a customer is always put at the heart of any decision making of a company. According to Polasik & Piotr Winiewski, 2009 in their study on empirical adoption of internet banking in Poland one of the most motivating factors to use internet banking is convenience and efficiency. Apart from this other attracting factors include features of online banking such access to information, speed of transactions and better control over accounts. Likewise according to the research of Yuen, Yeow & Lim, 2015 in their study on internet banking acceptance in the United States and Malaysia: cross-cultural examination showed that, Malaysians showed a positive attitude towards efficiency and convenience than the users in USA.

Furthermore their individualism and low power distance are few of the factors (Hostede, 2001; Kluckholn and Stodbeck, 1961). Hall, 1989 highlighted that this concern for protection by Americans could be due to the fact that they rely more on legal contracts for most of their day to day activities rather than mutual trust and long lasting relationship. Mukherjee and Nath (2003) showed that according to their research on the concept of online relationship marketing in India that trust based on shared values and communication played a positive role in influencing commitment. This was further agreed by Thortan Consulting in 1996 when they concluded that 67% of the concerns were regarding security and Sathye 1999, expressed that three quarters of the Australians showed concerns with regard to security in internet banking.

Overall, many studies such as Black et al. Karjaluoto et al. (2002) further stated that in Finland prior internet experience was one of the factors that influenced online banking. This may be due to advance development or quick introduction in developed nations that gave them the opportunity to quickly adjust when compared to developing nations which was introduced years later. Moreover, the fact that developing countries such as Vietnam uses internet for communication and not for internet banking would mean that they are not aware of the benefits or that concerns regarding internet banking are not identified. Marketing Exposure Yuen,Yeow & Lim,2015 states that although 73% of Americans had access to internet during this time only 16. Moreover, Lockett and Litter (1997) stated that in UK the main driver in adopting internet banking was the 24 hour availability.

It was further agreed by Wang et al. (2003) that perceived ease of use and convenience was a significant factor in determining the user’s intention to adopt internet banking in Taiwan. Likewise Liso and Cheung (2002) stressed on the importance user friendliness, accuracy, security and convenience when adopting internet banking in Singapore. Polasik & Piotr Winiewski, 2009 claims that adoption is easier for consumers who are already aware and uses electronic services offered by the bank are more likely to attempt internet banking. Mattila, Karjaluoto & Pento, 2003 highlighted that in Finland mature users adoption of internet banking was determined by education and income. With regard to influence of gender, the reports of Flavián, Guinalíu & Torres, 2006 stated that women were less likely to adopt internet banking.

It further argued that the location or rather the urbanisation of the area influences the usage of internet which in fact affects internet banking for instance if certain locations lack branches users may be forced to use internet banking. On the other hand, for instance in Poland, Polasik & Piotr Winiewski ,2009 stated that the access to internet or rather the broadband connection itself hindered the usage of internet banking most likely due to lack of the development of information and communications technology. This also one of the reasons why developing nations are slow in adopting and implementing internet banking. (2005) in his research on the acceptance of internet based on 15 European countries. Yuen, Yeow & Lim, 2015 identified the following cultural differences in USA (developed) and Malaysia (Developing).

According to their research USA showed high individualism, low power distance, moderate uncertainty avoidance monochromic culture and low context communication style (Hall, 1989; Hofstede, 2001) On the other hand, Malaysia depicted low individualism, high power distance, low uncertainty avoidance, polychromic culture and a high context communication style. Yuen, Yeow & Lim, 2015 discussion concludes that the attitude towards the use is an important factor when determining the intention to use. Hence, due to the monochromic culture and their attitude towards completing task on time USA showed a positive attitude towards internet banking when compared to Malaysia where they usually rely on the bank managers due to high power distance and place importance of trust and communication. Categorically, the survey focused on two main perspectives of online or internet banking service; current acceptance, awareness, and perhaps adoption of the emerging online banking services and customers’ perception towards online banking development.

Internet banking in China is still in its early growth stage and therefore Chinese banks are lacking sufficient experience to respond to their customer’s complaints as well as problems which may eventually affect the customers’ ability and willingness to adopt internet banking service. Furthermore, it is still a challenge to change or persuade long-time tradition of Chinese customers especially the elders to do online banking. Families in China are still limited to accept and adopt online banking like use of computers and an internet connection due to low income generation. Lack of education is another factor for many Chinese customers in using online banking services. Therefore questions were designed to collect information about their plans for continuous use of online banking service and recommendations of online banking service to other people and their beliefs or expectations to do with future internet banking development and advancement, such as the role of online banking in future banking industry.

Specifically, the questions cover those online banking services that have been available in Australia but not in China yet, such as online enquiry and transfer, online payments, online loan for small businesses, online investment and online trust fund, which will provide certain indication not only for the gap currently existing in online banking industry between the two nations, but also highlight the future direction for online banking industry improvement in China. DATA ANALYSIS AND RESULTS The surveys were conducted in universities in both nations, where most respondents are already enrolled students. It is basically assured that all survey participants in this research are familiar with the emergence of computer and internet application and software. Results from demographic characteristics are depicted on the table below.

74 26 -30 years 31 or above 3 2. 83 Level of Education Primary or informal 0 0. 00 Secondary 132 97. 10 Tertiary 1 0. 87 Online banking users versus non- users China Australia Response Number Percentage( % ) Number Percentage (%) Yes 65 45. 23 37 Oblivious operating process 3. 07 37 Security concerns 4. 09 37 Face to face preference 3. 19 35 Outdated information 2. 10 35 Poor internet connection 3. With such a score by china, it depicts clearly why there has been reported issues pertaining online fraud stores may be due to lack of well-designed legal system. As a result of such, it has led low acceptance of Chinese customers adopting the use of online banking. Chinese consumers in using e-banking services. Besides that, website design features like outdated online information has contributed a lot in discouraging potential online banking users thus China depicting mean of 2. 45 but Australia showing 2. 67 More than 4 years 2 1.

57 Frequency Once a week 4 7. 58 2-4times a month 10 18. 35 Once a month 12 19. 11 More than a month 34 48. % No. % No. % No. % Online enquiry 64 98. 23 Online investment 18 30. Mean Std. dev No. Easy operating process 2. 8 80 Faster searching method 2. 95 75 User friendly interface 2. % No. % Continue using Yes 115 85. 13 No 20 14. 80 Recommend to other people Yes 85 63. 36 No 50 36. 070 It is seen that online banking customers in the two countries embrace the perception of fast and reliable internet accessibility. This is because the correlation coefficient is high and positive ( 0. This is to say first hypothesis is widely and strongly supported by the available results of the study. In addition, Statistical significance found that many respondents have more experience on online banking services. This is explained by the fact that almost all of coefficients are positive.

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