An empirical study of the impact of brand name on personal customers' adoption of Internet banking in Hong Kong

Pao Yue-kong Library Electronic Theses Database

An empirical study of the impact of brand name on personal customers' adoption of Internet banking in Hong Kong

 

Author: Yeung, Wai-hung
Title: An empirical study of the impact of brand name on personal customers' adoption of Internet banking in Hong Kong
Degree: D.B.A.
Year: 2007
Subject: Hong Kong Polytechnic University -- Dissertations.
Internet banking -- China -- Hong Kong.
Brand name products -- China -- Hong Kong -- Case studies.
Electronic commerce -- China -- Hong Kong -- Case studies.
Department: Graduate School of Business
Pages: 205 leaves : ill. ; 30 cm.
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2145964
URI: http://theses.lib.polyu.edu.hk/handle/200/776
Abstract: The Internet is a new distribution channel for banking services. The two key reasons for banks to implement Internet Banking (IB) are firstly that IB can yield considerable cost savings and secondly that customers have become more receptive to IB and willing to use it. On the other hand, security and privacy concerns have made customers reluctant to adopt IB. The primary objective of this research is to study personal customers' intention to use IB in Hong Kong using the traditional Technology Acceptance Model (TAM) with proper adaptation to the online environment. Based on prior TAM and Internet banking studies and the brand name literature, this study proposes a model comprising an external factor, namely Brand Name, and three constructs, namely Perceived Credibility, Perceived Usefulness and Perceived Ease of Use to assess customers' intention to use IB. While Brand Name is a newly-added external factor to TAM, Perceived Credibility is also a new construct introduced to TAM that relates to web security and privacy. In addition, this study seeks to investigate the impact of brand name on personal customers' adoption of IB by comparing the brand name's effect on adoption of a bank with a larger market share, i.e., the HSBC group, with that of banks with smaller market shares, i.e., non-HSBC banks. The model was tested using data collected from a questionnaire survey with a sample size of 269. The questionnaire was adapted from the instruments and scales developed for past TAM and IB studies and based on a review of the brand name literature. Convenience sampling was used to collect personal customer data during the period 4 October to 6 November 2006 outside bank branches, university campuses, large securities trading firms, various government offices and cafes. The data were analyzed using Structured Equation Modelling (SEM) to investigate the inter-relationships between Brand Name, Perceived Credibility, Perceived Usefulness, Perceived Ease of Use and Intention to Use IB, and assess the overall explanatory power of the hypothesized model. The statistical results provided support for the hypothesized model adapted from the TAM conceptual model and confirmed its robustness in predicting the impact of brand name on personal customers' adoption of IB in Hong Kong. First, the findings of this study indicate that Brand Name has a positive relationship with Perceived Credibility and Perceived Ease of Use but does not have a positive relationship with Perceived Usefulness and Intention to Use IB. Second, in line with other TAM studies, Perceived Usefulness and Perceived Ease of Use are positive factors that influence customers' intention to use IB services, and Perceived Ease of Use has a smaller impact than Perceived Usefulness on Intention to Use. Perceived Credibility that relates to web security and privacy is also a positive influential factor for Intention to Use. Third, the results indicate that there is no significant difference in a brand name's effect on personal customers' adoption of IB in Hong Kong between banks with large and small market shares. The results of this research provide bank management with valuable information about the planning of their IB marketing and promotion activities. Banks, in marketing their IB services, should assure customers of their services' web security and privacy, and promote the perceived usefulness and perceived ease of use of their services. This is supported by the research findings that the three constructs - Perceived Credibility, Perceived Usefulness and Perceived Ease of Use - are positively related to Intention to Use, while Brand Name has no direct relationship with Intention to Use. While this study has confirmed that brand name is one of the key factors that affect personal customers' intention to use IB services, other external factors should be taken into account. According to the AC Nielsen Global Purchase Influencers Report September 2006, when people (including people in Asia-Pacific, Europe and North America) select banking services, they will consider seven factors, which include Internet searching, previous experience of brand, brand name/reputation, word of mouth, TV/print advertising, window shopping and blogs on the Internet. One can test each of the other six factors by substituting it for brand name as an external factor in the hypothesized model. This can compare the relative influence of the seven factors on IB adoption. Also, in addition to the three constructs namely Perceived Credibility, Perceived Usefulness and Perceived Ease of Use in assessing customers' intention to use IB, perceived risk and trust are two new determinants that can be proposed and tested. Another way to measure brand name effect is to classify banks into global brand (or international brand) and local brand. This can study whether a local brand has different degrees of effect and/ or influence when compared with a global brand. This can compare with the relative brand name impact on IB adoption measured by market share. This research has made a contribution to the studies of TAM and Internet banking and to the brand name literature. The findings have important implications for IB providers in Hong Kong because the results highlight the importance of brand name in the IB market, justifying banks' efforts in marketing and promoting their brand names in introducing IB to their customers. An established brand name, along with informative content on credibility that embraces web security and privacy, usefulness and ease of use, will enable potential customers to recognize and distinguish the IB services of a bank from its competitors, which in return will lead to a higher adoption rate. From the bank management perspective, banks should leverage their brand names to draw customers' attention to the full functions of their IB services, and provide detailed information to assure customers of the web security, privacy, usefulness and ease of use of their IB services, demonstrating that these services can address customers' concerns and cater for their needs. Given that system security and personal data privacy have strong effects on customers' intention to use IB; banks should market and promote their strengths in system security and customers' data protection policy by proactively providing customers with detailed and convincing information on these two aspects to better lure them to adopt their IB services.

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