Mobile banking: An analysis of usage in the present era

Arthi MC; Vinitha K Article Mobile banking: An analysis of usage in the present era Global Business & Finance Review (GBFR) Provided in Cooperation with: People & Global Business Association (P&GBA), Seoul Suggested Citation: Arthi MC; Vinitha K (2024) : Mobile banking: An analysis of usage in the present era, Global Business & Finance Review (GBFR), ISSN 2384-1648, People & Global Business Association (P&GBA), Seoul, Vol. 29, Iss. 2, pp. 47-56, https://doi.org/10.17549/gbfr.2024.29.2.47 This Version is available at: https://hdl.handle.net/10419/305958 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Introduction Mobile banking and using mobile phones as complete payment solutions started catching up about a decade ago with the introduction of affordable smartphones and the tremendous growth of mobile application developments. Mobile banking usage took a major leap in India after Demonetization and COVID-19, which are the game changers in the mobile Received: Nov. 17, 2023; Revised: Dec. 6, 2023; Accepted: Jan. 6, 2024 † Corresponding author: Arthi MC E-mail: [email protected] banking arena and helped change users' mind-set in handling money. Passbooks and checkbooks now started vanishing slowly. UPI enablement by banks in India, is another main aid for this change, in the mobile banking platform, as it promotes the protection of the people by bringing in an online system to buy goods and pay instantly. Banks and payment services in India and many other countries, are required to adhere to Know Your Customer (KYC) norms from all users using mobile payment services and KYC serves as a basic hygiene factor now in the payment sector. Some of the safety processes like triple validation, biometrics scanning like GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 2 (MARCH 2024), 47-56 pISSN 1088-6931 / eISSN 2384-1648∣Https://doi.org/10.17549/gbfr.2024.29.2.47 ⓒ 2024 People and Global Business Association GLOBAL BUSINESS & FINANCE REVIEW www.gbfrjournal.org1) for financial sustainability and people-centered global business Mobile Banking: An Analysis of Usage in the Present Era A rthi MCa†, Vinitha Kb aResearch Scholar, Faculty of Management, SRM Institute of Science and Technology, SRM Nagar, Kattankulathur, 603203, Chengalpattu District, TN, India bAssistant Professor, Faculty of Management, SRM Institute of Science and Technology, SRM Nagar, Kattankulathur, 603203, Chengalpatt u District, TN, India A B S T R A C T Purpose: This article aims to study mobile banking usage in recent times and to understand the relationship between the perception of customers and actual usage trends. Design/methodology/approach: Primary data is collected using the survey method and various charts along with the TAM (Technology Acceptance Model) constructed using SmartPLS is used to understand the relationship. Findings: The results showcase a strong relationship between perceived ease of use, usefulness, intention to use, and actual usage of mobile banking. The findings demonstrate that mobile payments saw a surge in the present era, bank visits and chequebook usage dropped, and increased adoption in the older population. Research limitations/implications: The limitations that are observed in this research, are that it did not focus on some additional elements of mobile banking like mobile applications stability, customer care support, and security which can be analyzed using other models like UTAUT or IS system. Originality/value: The paper presents the patronage and usage of mobile banking in recent times after the pandemic and earlier demonetization in India. The analysis using the TAM model helped to check the current trend and users' mind-set shift. Keywords: Mobile banking, Perceived usefulness, Perceived ease of use, TAM, SmartPLS ⓒ Copyright: The Author(s). This is an Open Access journal distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution , and reproduction in any medium, provided the original work is properly cited. GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 2 (MARCH 2024), 47-56 48 fingerprints, and post transaction re-confirmation (as started by Airtel payment bank) have given more boost and confidence in mobile banking security. Recently, banks and payment providers changed the one-time password from 4 digits to 6 digits to improve security measures. Please note that 4-digit OTP is hackable at the chance of 1 in 10,000, while the 6-digit OTP is hackable at the probability of 1 in 1,000,000. II. Analysis of Prior Work A Study of Mobile Banking in the State of Kerala by Roshna Thomas et al., 2019, focus on mobile banking awareness and as alterative to ATM, cheque, the author analyze the bank visits and focus on basic mobile banking expectations like time saving, accessibility, mobility etc along with demographics variables and on technology acceptance on the whole. The authors used nonparametric test like chi square test of association, spearman's correlation. Veronika Lee et al., 2022, in their study on explain about impact of pandemic in online purposes via e-commerce platforms in Uzbekistan. The author uses combination SERVQUAL and TAM to check the adapted e-commerce market in Uzbekistan. It is observed from the analysis, that some of the parameters like responsiveness and reliability are not found significant for adoption and the parameters on customer satisfaction is similar with perceived usefulness and ease of use. So the extension of TAM with SEQVQUAL is found not be not so useful this this case for online purposes. Amin, H et al., 2012 in the study focus on factors that determine the local citizens of Sabahan bank customers' motive to adopt mobile banking. This study extends the applicability of the technology acceptance model (TAM) to mobile banking and incorporates perceived usefulness and perceived ease of use along with perceived credibility, perceived enjoyment and perceived self-efficacy, The analysis indicate that perceived credibility, enjoyment, self-efficacy are main governing factors for Malaysia's bank customers intentions to use mobile banking, The study results indicate that the perceived usefulness and ease of use has minimum impact on mobile banking compared to perceived credibility, enjoyment and self-efficiency which were much more important patronage aspects for mobile banking use. The analysis might indicate particular region people's mindset or due to low sample size. Zamil, 2011, analyse the effect of deployment of mobile banking from marketing viewpoint in Jordan taking survey from bank mangers point of view. Data analysis is done via SPSS and analysis of variance (ANOVA) is used. The results prove a strong statistical significance exist in implementation of mobile banking adoption from marking viewpoint by bank managers in Jordan owing to following factors: gender, age, qualification and location of bank managers. Further checking on similar research using TAM model, Huang, Y, 2013 used enhanced TAM model to study on smart phone usage. The author used external factors like enjoyment, social influence along with perceived usefulness, and perceived convenience (similar to perceived ease of use) to check customers' acceptance of smartphones. His analysis shows that enjoyment and social influence as external factors had impact perceived usefulness and perceived convenience. Interestingly his analysis perceived usefulness has no direct and positive relationship with intention to use which may be due the behavior of target survey respondent who were undergraduate students from Korea with major as business administration. Koenig-Lewis N. et al., 2010 in their article on predicting young consumers' use of mobile banking services tried combing TAM and IDT variables of perceived usefulness, perceived ease of use, intention to use, along with compatibility, perceived trust, credibility and perceived cost. But the results show no significant impact of perceived cost, credibility, and perceived trust on intention to use and only compatibility has significant impact thus indicating that this extension of TAM model is not bringing much benefit in the theoretical model. M. Aboelmaged and T. R. Gebba in their paper on mobile banking, tried integrating Technology Arthi MC, Vinitha K 49 Acceptance Model (TAM) and Theory of Planned Behaviour (TPB). Along with perceived usefulness, ease of use, subjective norm and behaviour control parameters were introduced and results indicate that only subjective norm (how your friends circle think about your mobile banking usage) has impact in adoption. Further the study indicate, perceived usefulness impact both adoption and attitude towards usage and perceived ease of use has impact on perceived usefulness although not directly impacting attitude towards usage or adoption. It may be noted that sample size is lower in this case (about 110 respondents). Although there are many studies which uses TAM, Extended TAM or combination of TAM with other models for mobile or internet banking adoption or usage, these articles that focusses on mobile banking adoption after pandemic for south of India in particular region of Chennai which is South India's most advanced technology district was minimal. This study tries to address this gap using the Technology Acceptance Model to check mobile banking acceptance by customers from Greater Chennai and further insight into customer visits to banks and cheque book usage. The objective of this article is to check and analyze the behavior and perception of the consumers in Greater Chennai area in South India on mobile banking in recent times with the changes in the mind-set of the people after the pandemic and earlier demonetization. The aim is to understand the perceived ease of use and perceived usefulness of mobile banking and to understand its effect with intention to use along with the slow sunset of traditional banking aids seen by consumers like cheque book and passbooks using the users' responses. Additionally, the pattern of usage across age groups is presented to understand the usage pattern among various age groups. To summarize, the study mainly focuses on the following research questions in terms of impact among users in Greater Chennai 1. How users of mobile banking perceive its usefulness and ease of use and its relation to intention to use and actual usage? 2. What is the collective user behavior on general mobile usage considering usefulness and ease of use? 3. Is there any substantial trend of usage of mobile banking in India age-wise before and after COVID-19 and its disruptiveness to traditional banking methods? To address the research questions one and two following hypothesis are proposed. H1: Perceived Ease of use has impact in perceived usefulness to use mobile banking H2: Perceived Usefulness has impact intention to use mobile banking H3: Perceived Ease of use has impact intention to use mobile banking H4: Intention to use mobile banking has impact in actual usage of mobile banking To address the research question three, data related to mobile banking usage trend and analysis represented as chart is provided (refer Figure 2). III. Literature Review A. Advances in Digital Payments and Mobile Banking On the evolution of payments, Roger W. H. Bons et al., 2012 in his paper explain that banking functions have evolved on a large scale with the shift from physical to electronic payments, replacing savings books, deposit certificates with online services and digital alternatives. Luigi Wewege, 2020, mentions in his article that in the banks, the footfall is dropping by approximately four visits per year, and there is an expectation that mobile transactions will rise to 121% in the 2017-2022 period. There is also an expectation that in the next five years, bank transactions on laptops/desktop devices will also drop to a significant extent, and 88% of the interactions and mobile devices will drive the transactions. Seung- GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 2 (MARCH 2024), 47-56 50 Bum Haa et al., 2021 talk about making mobile payments rewarding, the banks should consider providing incentives on usage similar to credit cards to make the consumers become repeat users and offer discounts and coupons which worked well for credit cards. Also, reward points for purchases might be useful to make m-payments attractive and enjoyable. Asongu, Simplice and Nwachukwu, Jacinta C., 2016 in their article, talk about 4 changes mobile phones brought in the banking area: First cell phones are used like a virtual credit card. It uses PIN and bank account number which is saved in the SIM card to use it in the same way as the bank's virtual card. Secondly, the phone is used as point of sale (POS) terminal. They give similar payment functions like in retail stores or outlets. Thirdly, the mobile phone can work like an automatic teller machine (ATM). Fourthly mobile used as virtual bank for making payments and transfers. B. Impact of Pandemic in Online Payments As per Stephanie Walden, and Daphne Foreman, 2020, even after the pandemic, the trend of growth in mobile banking and payment is very likely to stay due to customer changed behavior. At the start of the pandemic, some banks upgraded customers' physical credit and debit cards to include "tap to pay" technology. According to Yuyang Zhao and Fernando Bacao, 2021, mobile payment transactions during the pandemic efficiently support the survival of various businesses and maintain the social economy's development under an emergency. Regarding mobile banking during COVID-19, Nilufa Khatun et al., 2021 say mobile banking is extensively used by all citizens during COVID-19 as it gives them financial access safely and easily. Arthi M.C., and Shanmugam K., 2020, in their paper, say, that the economic uprising of going away from cash and moving to digital transactions has begun in India for the previous few years, and due to the pandemic condition in India, there has been an increased need to go with contactless transactions. Ellen Schindler, 2021, explains in the last year of the COVID-19 period, we see more applications booming with innovative mobile solutions by Banks and Payment service providers. Examples are remote connectivity via live chat and secure messaging. Veronika Lee et al., 2022, in their study on explain about impact of pandemic in online purposes via e-commerce platforms in Uzbekistan. They found that 68% of people agreed that their purchases in online e-commerce sites increased markedly from 2018 to 2020 and the respondents (about 74%) are eager to continue of purchase of goods via e-commerce platforms even after COVID-19. C. Theoretical Background and Framework The popular models that can be used for mobile banking adoption are mainly TAM, Extended TAM or called as TAM 2, Innovation Diffusion Theory (IDT), and the unified theory of acceptance and use of technology (UTAUT), and a few combinations of these models. The TAM model was first introduced by Fred Davis in 1986. Mobile banking adoption and usage can be well modeled by TAM. According to Fred Davis et al. in 1986, the technology acceptance model (TAM) is an information systems theory that models how users come to accept and use technology. Fred Davies, 1986 stated that users' motivation can be explained by three factors: Perceived Usefulness (PU), Perceived Ease of Use (PEU), and Attitude toward using the system. PE is the degree to which a user believes that using a particular system will improve his day today work performance and defined PEU as the degree to which a person believes that usage a specific system would be free his mental and physical effort (refer Figure 1). Extended TAM developed by Venkatesh and Davis, 2000 explained PU and usage intentions by social influence and perceptive instrumental processes along with PEU. The constructs link social influencers (like voluntariness, image, and subjective norm) and perceptive instrumental processes (like quality, rest demonstrability, job relevance, and PEU). IDT concept Arthi MC, Vinitha K 51 was promoted by Everett Rogers who classifies Diffusion of Innovations into five features of innovation: complexity, compatibility, triability, observability, and relative advantage (Rogers, Everett 2003). The unified theory of acceptance and use of technology (UTAUT) is a technology acceptance model that aims to find the customer's purpose in using an information system and follow usage behavior. Developed by Venkatesh, Morris, Davis, G. B., & Davis, F. D. (2003) the model contains four key intention theories; social influence (SI), effort expectancy (EE), performance expectancy (PE), and facilitating conditions (FC). There are also four moderators: age, gender, experience, and voluntariness of use. The most popular model to study new technology acceptance is TAM which is used in this article to explain mobile banking adoption and usage. IV. Methodology The study is conducted to obtain data on adopting a digital payment system in India and has been done across citizens of Greater Chennai, India who are mobile banking users. Online survey mode was adopted, and 300 responses were received. Responses related to topics on visits to banks, chequebook usage, and trend of mobile banking usage were collected along with demographic-related questions. Responses related to perceived usefulness, ease of use, intention to use, and actual usage were also collected on a Likert's Scale of 1 to 5 ranging from strongly disagree, to disagree, neutral, agree, and strongly agree. The mobile banking users were the intended respondents and covered all age groups, both genders and income groups. The questionnaire is provided to respondents via Google Forms, and the link is sent via email and social media platform, WhatsApp. Data analysis is done using charts and the SmartPLS model for structural equation (SEM) modeling. V. Outcomes A. Consumers Visit to Banks After the introduction of mobile banking, coupled with technological advancement and affordable smartphones we see only 17% of users go to banks frequently, i.e., more than one time a month. Occasional visitors visit once or twice in a quarter mainly for loans, locker usage, or other personal services from banks (refer Table 1). B. Chequebook Usage Consumers' chequebook usage trend compared to online transfers analysis show the mindset of the users. In addition, the banks discourage cheque usage by increasing clearance time, and multiple authorizations. Another advantage of mobile banking is; checking balance in the accounts anytime with ease. This reduces overdraft issues and the bouncing of cheques (refer Table 2). Responses Distribution Frequent Visits to Bank 17% Occasional Visits to Bank 45% Seldom Visit Bank 38% Table 1. Trend of customer visits to banks Responses on Chequebook usage Distribution Used greater than 1 time per month 12% Rarely Used 45% Never used 43% Table 2. Chequebook usage Perceived Usefulness Perceived Ease of Use Intention to use Actual use Figure 1. TAM model GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 2 (MARCH 2024), 47-56 52 C. Mobile Payment Usage after COVID-19 based on User Survey In this part, we asked respondents about the usage pattern of mobile payments after COVID-19. The below chart shows the details. There is a surge in usage among the older generations (>60 years of age), and they quickly moved to mobile banking than expected (refer Figure 2). D. SmartPLS Output and Model analysis The survey output was modelled using TAM and constructed using SmartPLS (refer Figure 3). Factor loading: Explains the relationship between factors and variables, many factors show a strong correlation (where loading is >0.7) and few factors show moderate co-relation (where loading is >0.5 <0.7) - refer Table 3. Figure 2. Age-wise change in trend of mobile payments after COVID-19 Figure 3. SmartPLS output Arthi MC, Vinitha K 53 Model fitness: Standardized Root Mean Residual (SRMR): SRMR is the difference between the observed correlation and the model-implied correlation. It give the average amount of the differences between observed and expected correlations as an absolute measure of model fit criterion. SRMR <0.08 indicates the model is fit (refer Table 4). Normed Fit Index (NFI): It calculates the Chisquare value of the proposed model and compares it against a meaningful benchmark. NFI >0.8 indicates a good fit (refer Table 4). R Square: R square value >0.8 indicates a strong relationship between dependent variables and independent variables. It is the coefficient of determination and shows the percentage of the variance of the dependent variable explained by the independent variables (refer Table 4). Construct Reliability and Validity: Reliability and validity are used to check how well a method, or a technique measures the collected data. Reliability is about the stability of a measure and validity is about the correctness of a measure. Cronbach's Alpha and rho_A threshold is greater than 0.7 for all the variables indicating high reliability and validity (refer Table 5). Collinearity Statistics (VIF): Collinearity indicates independent variables' correlation in the study. In our analysis, the Variance Inflation Factor (VIF) which gives indication of collinearity was less than 4 for all the dimensions studied in the research, indicating that there is no collinearity problem among the study dimensions (refer Table 5). Path Coefficient (T Statistics & P Values): The path analysis in SEM is the partial correlation coefficient among the dependent variable and an independent variable, corrected for other independent variables. The t-value > 1.96 and p-value < 0.05 for all the relationships indicate a significant correlation (refer Table 6) and indicating the hypotheses H1 to H4 are accepted and the influence is significant. E. Analysis Findings The SmartPLS analysis of the data indicates that there is a strong relationship between perceived ease of use and usefulness and its association with intention to use and actual usage (Hypothesis H1 to H4). Perceived usefulness and ease of use influence Saturated model Estimated model SRMR 0.035 0.084 d_ULS 0.289 1.644 d_G 0.281 0.32 Chi-square 497.24 547.673 NFI 0.926 0.919 R-square R-square adjusted Actual Usage 0.597 0.596 Intention to use 0.837 0.833 Perceived Usefulness 0.701 0.7 Table 4. Model fit, NFI and R Square Factor Variable Loading ACU1 Actual Usage 0.954 ACU2 0.902 ACU3 0.927 BIQ1 Intention to Use 0.955 BIQ2 0.893 BIQ3 0.955 PEU1 Perceived Ease of Usage 0.877 PEU2 0.765 PEU3 0.901 PEU4 0.9 PEU5 0.883 PEU6 0.849 PU1 Perceived Usefulness 0.87 PU2 0.861 PU4 0.882 PU5 0.896 PU6 0.893 PU7 0.878 PU8 0.911 Table 3. Factor loading GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 2 (MARCH 2024), 47-56 54 intention to use which in turn, makes users use mobile banking applications. The model analysis was further confirmed with responses seen on other questions related to fewer visits to the bank, use of chequebook, and the trend of mobile banking usage age-wise before and after the Pandemic. VI. Conclusion A. Implications The article covers both perspectives of theory and practice. From a theoretical perspective, the findings will contribute to existing literature providing insights to mobile banking usage from technology advanced population like South India, Chennai where after pandemic we see a shift in usage by age group. The model analysis exhibits that, the acceptance of mobile banking by users and the usage is driven by perceived ease of use and usefulness. First, the mobile banking advantages seen by users especially in terms of ease of use and usefulness due to mobile applications becoming more user-friendly and uncomplicated for all generations. The change in mind set of people after the pandemic is a driving factor. Secondly, the significance of TAM model fitment for technology advancements on banking sector i.e. mobile banking is evident. Thirdly, the qualitative analysis on other important aspects that promotes mobile banking and what were the focus areas to address gives more insights in customer adoption theory. Fourth the study endorses that the technology acceptance literature by implying that perceived usefulness and ease of use impact on any new technology acceptance. From practical implications perspective, the significant impact of perceived usefulness and ease of use clearly indicates that the more user friendly the mobile banking applications, the more the adoption and continued usage. The increase in banks' mobile applications usage after pandemic across age groups is an indication that shows the popularity and ease of use of mobile payments and the need to focus on 60 plus age group. The banking sector had come a long way moving away from cheque book and personal visits to banks to digital payments, mobile and online banking and round the clock service. Original sample (O) Sample mean (M) Standard deviation (STDEV) T statistics (|O/STDEV|) P values Perceived Ease of Use ->Perceived Usefulness 0.837 0.837 0.035 24.256 0 Perceived Ease of Use -> Intention to use 0.393 0.393 0.103 3.819 0 Perceived Usefulness -> Intention to use 0.21 0.208 0.106 1.983 0.047 Intention to use -> Actual Usage 0.773 0.772 0.058 13.396 0 Table 6. Path coefficient output Variable Cronbach's alpha Composite reliability (rho_a) Composite reliability (rho_c) Average variance extracted (AVE) Actual Usage 0.92 0.925 0.949 0.861 Intention to use 0.927 0.936 0.954 0.873 Perceived Usefulness 0.931 0.935 0.946 0.746 Perceived Usefulness 0.962 0.963 0.968 0.768 Table 5. Reliability, v alidity and Collinearity analysis using V IF