INFORMATION TECHNOLOGY USAGE AND CUSTOMER ACCEPTANCE IN THE BANKING SECTOR: A CASE STUDY OF GUARANTY TRUST BANK, KIGALI, RWANDA KWIZERA JOHN MIS/0067/13 A Research Project Submitted in Partial Fulfillment for the Award of the Degree of Master of Science in Information Science (Information and Communication Technology Option) of Mount Kenya University DECEMBER 2016
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INFORMATION TECHNOLOGY USAGE AND CUSTOMER
ACCEPTANCE IN THE BANKING SECTOR: A CASE STUDY OF
GUARANTY TRUST BANK, KIGALI, RWANDA
KWIZERA JOHN
MIS/0067/13
A Research Project Submitted in Partial Fulfillment for the Award of
the Degree of Master of Science in Information Science (Information
and Communication Technology Option) of Mount Kenya University
DECEMBER 2016
ii
DECLARATION
This research proposal is my original work and has not been presented for a degree in any
other University or for any other award.
Student Name: Kwizera John
Registration number: MIS/0067/13
Sign_________________________ Date______________________
I confirm that the work reported in this research proposal was carried out by the candidate
under my supervision.
Name: Prof. Raymond Wafula Ongus, PhD
Sign________________________ Date______________________
iii
DEDICATION
This work is dedicated to my wife Mrs. Mbabazi Janet and my children Akaziguye Faith,
Kwizera Prince Emmanuel, Kwizera Prince Samuel and my sister Mukarukundo
Immaculate, for their love, care and commitment towards my success.
iv
ACKNOWLEDGEMENT
The success of this research was a result of many people’s efforts that deserves
appreciation. I would like to express my deep appreciation to my supervisor Professor
Raymond Wafula Ongus and Mr. Philip Mbugua, for their support, guidance and
encouragement over the past months to accomplish this research.
My sincere thanks go to the staff of Mount Kenya University Kigali Campus, whose
analytical skills and knowledge enabled me to produce this work. I convey my sincere
thanks to MIS students, especially 2013-2014 intake, for their good cooperation and
advice.
My heartfelt gratitude goes to my late father; Mr. Magenda Canizio and my late mother
Mrs. Mukakimenyi Mary Josephine for their love, financial and moral support they offered
me since childhood. I am forever grateful to my uncle Mr. Bahorana Augustin and family
for their endless assistance.
Finally, my sincere thanks go to my family who has been helpful. Their love and support
plays a big role towards the success of my education.
v
ABSTRACT
The study was inspired by the arising issues of concern related to why customer accounts
were inactive. It was not known whether the customers really enjoyed using information
technology to access their accounts or whether there were various challenges experienced
in the process of using the services. The aim of the study was to examine effect of
Information technology usage on customer acceptance at GTBank, Kigali Rwanda. The
study would provide knowledge, to improve on information technology and design more
strategies for better planning. It would also be helpful to customers by widening
knowledge and understanding of information technology available. The research design
was a case study, with target population of 20,335 customers who used either ATM,
Internet banking or mobile banking technologies, 3 e-banking staff and 5 GTBank
branch managers. The total sample size was 401 respondents, selected through simple
random sampling and purposive sampling. Data was collected by means of questionnaires
and interviews. A pilot study was carried out at I&M bank, which had similar information
technology usage by customers for testing the reliability of the questionnaires. The data
analysis tool used was Statistical Package for Social Sciences (SPSS) version 16.0. Data
analysis methods included frequencies, percentages, tables, weighed means, standard
deviations and multiple regression analysis to determine the correlation between
variables. Findings revealed that Mobile banking and ATM were mostly used more than
Internet banking, depending on features of use and security. ATM features were more
accepted compared to Internet banking and Mobile banking features. Multiple regression
analysis found R the coefficient of correlation to be 0.927 signifying a very strong
positive correlation between information technology and customer acceptance. The P-
value was found to be 0.001, hence statistically significant at the 95% confidence level.
The coefficient of determination R2 = 0.859 indicated that 85.9% of the variability in
customer acceptance depended on stochastic model developed, whereas the remaining
14.10% was attributed to factors beyond the control of the study. The study
recommended trainings of customers and awareness campaigns about Internet banking
technology so as to promote technological knowhow; high speed of the Internet, solved
by broadband and 4G LTE to increase the number of customers using it in time. The
study also recommended the provision of security awareness, to increase trust of
customers using information technology provided by GTBank.
vi
TABLE OF CONTENTS
DECLARATION .............................................................................................. i
DEDICATION ................................................................................................ iii
ACKNOWLEDGEMENT ............................................................................. iv
ABSTRACT ...................................................................................................... v
TABLE OF CONTENTS ............................................................................... vi
LIST OF TABLES .......................................................................................... ix
LIST OF FIGURES ......................................................................................... x
LIST OF ABBREVIATIONS AND ACRONYMS ...................................... xi
OPERATIONAL DEFINITIONS OF KEY TERMS ............................... xiii
CHAPTER ONE: INTRODUCTION ............................................................ 1
1.0 Introduction .......................................................................................................................1
1.1 Background of the Study ..................................................................................................1
1.2 Problem Statement ............................................................................................................5
1.3 Objectives of the Study .....................................................................................................6
1.3.1 General Objective ..........................................................................................................7
1.3.2 Specific Objectives ........................................................................................................7
1.4 Research Questions ...........................................................................................................7
1.5 Significance of the Study ..................................................................................................7
1.6 Limitations of the Study....................................................................................................8
1.7 Scope of the Study ............................................................................................................8
1.7.1 Content Scope ................................................................................................................8
1.7.2 Geographical Scope .......................................................................................................9
1.7.3 Time Scope ....................................................................................................................9
1.8 Organization of the study ..................................................................................................9
CHAPTER TWO: REVIEW OF RELATED LITERATURE ................. 10
2.0 Introduction .....................................................................................................................10
2.1 Theoretical Literature ......................................................................................................10
vii
2.1.1 Information Technology in Banking ............................................................................10
2.2 Empirical Literature ........................................................................................................14
2.2.1 Internet Banking and Customer Acceptance ................................................................14
2.2.2 Mobile Banking and Customer Acceptance ................................................................19
2.2.3 Automated Teller Machine and Customer Acceptance ...............................................23
2.2.4 Customer Acceptance of Information Technology ......................................................26
2.3 Critical Review and Research Gap Identification ...........................................................32
2.3.1 Critical Review ............................................................................................................32
2.3.2 Research Gap Identification .........................................................................................34
2.4 Theoretical Framework ...................................................................................................34
2.5 Conceptual Framework ...................................................................................................38
2.5.1 Independent Variables .................................................................................................38
2.5.2 Dependent Variable .....................................................................................................40
2.6 Summary .........................................................................................................................40
CHAPTER THREE: RESEARCH METHODOLOGY ............................ 41
3.0 Introduction .....................................................................................................................41
3.1 Research Design..............................................................................................................41
3.2 Target Population ............................................................................................................41
3.3 Sample Design ................................................................................................................41
3.3.1 Sample Size ..................................................................................................................41
3.3.2 Sampling Techniques ...................................................................................................42
3.4 Data Collection Methods ................................................................................................42
3.4.1 Data Collection Instruments ........................................................................................43
3.4.2 Administration of Data Collection Instruments ...........................................................43
3.4.3 Pilot Study ....................................................................................................................43
3.4.4 Reliability .....................................................................................................................44
3.4.5 Validity ........................................................................................................................45
3.5 Data Analysis Procedure .................................................................................................45
3.6 Ethical Considerations ....................................................................................................46
CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSSION ......... 47
4.0 Introduction .....................................................................................................................47
viii
4.1 Demographic Characteristics of Respondents ................................................................47
4.1.1 Age Distribution of Respondents .................................................................................47
4.1.2 Gender distribution ......................................................................................................49
4.1.3 Education Level ...........................................................................................................49
4.1.4 Language Proficiency Distribution of Respondents ....................................................50
4.1.5 Experience of Information Technology Usage ............................................................50
4.2 Usage of Information Technology ..................................................................................51
4.4 How Customer Acceptance was Affected by Information technology at GTBank ........58
4.4.1 Findings from Interview Guide ....................................................................................60
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS .............................................................................. 64
5.0 Introduction .....................................................................................................................64
5.1 Summary of Findings ......................................................................................................64
5.1.1 Usage of Information Technology ...............................................................................64
5.2 Conclusion ......................................................................................................................65
5.3 Recommendations ...........................................................................................................66
5.4 Suggestions for Further Study ........................................................................................66
REFERENCES .............................................................................................. 67
APPENDIX A: INTRODUCTION LETTER SHOWING RESEARCH
AUTHORIZATION ...................................................................................... 77
APPENDIX B: QUESTIONNAIRE FOR CUSTOMERS OF GTBANK 78
APPENDIX C: QUESTIONNAIRE FOR GTBANK CUSTOMERS
TRANSLATED INTO KINYARAWANDA ............................................... 82
APPENDIX D: INTERVIEW GUIDE FOR GTBANK E-BANKING
STAFF ............................................................................................................. 87
APPENDIX E: INTERVIEW GUIDE FOR GTBANK BRANCH
MANAGERS .................................................................................................. 88
APPENDIX F: CITY OF KIGALI SECTOR MAP................................... 89
ix
LIST OF TABLES
Table 3.1 Sample size Determination for Customers.………………………………..….42
Table 3.2 Reliability statistics for pilot study of 5 respondents………………………...44
Table 4.1 provides the age of respondents based on Questionnaire……………………..48
Table 4.2 Gender distribution of respondents……………………………………………48
Table 4.3 Education Level of Respondents………………………………………….49
Table 4.4 Language spoken by respondents……………………………………………..50
Table 4.5 Experience of Customer Technology Usage…………………………………51
Table 4.6 How often Respondents Used the Technologies at GTBank…………………51
Table 4.7 Factors that Promotes Usage of Technology in GTBank……………….……52
Table 4.8 Ranking Information Technology………………………………………...…..52
Table 4.9 Views of customers regarding ATM at GTBank……..…………….……..…..53
Table 4.10 Views of customers regarding Internet Banking at GTBank……………..…55
Table 4.11 Views of customers regarding Mobile Banking at GTBank………………...57
Table 4.12 Multiple Regression Analysis Output………………………………………59
Table 4.13 Regression model summary……………..…………………………………..59
Table 4.14 Measures put in place to address problems in the using ATM machine…….61
x
LIST OF FIGURES
Figure 1.1 Login To GTBank GAPS…….………………………………………………..4
Figure 1.2 Architecture of Online Banking Application……….…………………………5
Figure 2.1 ATM Network…………………………………………………………….....11
Figure 2.2 Mobile Bank Network……………………………………………………....13
Figure 2.3 How ATM works……………………………………………………………..23
Figure 2.4 Unified Theory of Acceptance and Use of Technology……………………...36
Figure 2.5 Updated DeLone & McLone Information System Success Model……..……37
Figure 2.6 Conceptual Framework………………………………………………………38
Figure 4.1 Age distribution of respondents ……………………………..………………48
xi
LIST OF ABBREVIATIONS AND ACRONYMS
4G LTE Fourth Generation Long-Term Evolution
ATM Automated Teller Machine
BI Behavioral Intention
BNR Banque National du Rwanda
CSE Computer Self-Efficacy
E-banking Electronic banking
GAPS GTBank Automated Payment System
GCB Ghana Commercial Bank Ltd
GTBank Guaranty Trust Bank
HTTPS HyperText Transfer Protocol Secure
IBG International Bank of Ghana
ICT Information and Communication Technology
IT Information Technology
MDS Multidimensional Scaling
MKU Mount Kenya University
PC Perceived Credibility
PEOU Perceived Ease Of Use
PIN personal identification number
PU Perceived Usefulness
SEM Structured Equation Modeling
SMS Short Messaging Service
SSTs Self-service Technologies
TAM Technology Acceptance Model
xii
TPB Theory of Planned Behavior
UBA United Bank of Africa
USA United States of America
UTAUT Unified Theory of Acceptance and Use of Technology
WAP Wireless Access Protocol
xiii
OPERATIONAL DEFINITIONS OF KEY TERMS
Bank is a financial institution licensed by the Banque National du Rwanda (Central
Bank of Rwanda), that provides banking technologies to the users referred as GTBank
customers.
Banking Sector in Rwanda is the sector that consists of both private and public
banks that are involved in financial transactions to Customers and edge in providing
banking technologies for quality, fast, and security services to the finances of the
Customers.
Banking Technology refers to the use of sophisticated information and
communication technologies together with computers to enable banks including GTBank,
to offer more efficient services to customers, in a secure, reliable, affordable manner and
sustain competitive advantage over other banks.
Customer Acceptance is the extent of assent or endorsement with which a bank
technology user adopts the information technology channel of financial transactions
offered by GTbank.
Customer is a user of banking technologies to satisfy needs of financial transactions
from GTbank.
Guaranty Trust Bank (GTBank) is a financial institution operating in Rwanda
with branches in Kigali City, providing banking technologies towards satisfying
Customers’ financial transaction needs.
Information Technology is the storing, protecting, processing, transmitting and later
retrieving information as necessary by GTBank customers and staff to help in enhancing
efficiency and improving productivity through automation of various functions.
xiv
Information Technology usage is use of systems (especially computers and
telecommunications) for storing, retrieving, and sending information by both staff and
customer of GTBank.
1
CHAPTER ONE: INTRODUCTION
1.0 Introduction
The study was generally about the usage of information technology and its effect on
customer acceptance in the banking sector in Rwanda, by considering Guaranty Trust
Bank, Kigali, Rwanda. This chapter presents introduction, background to the study,
problem statement, study objectives, the research questions, and significance of the
study, study limitations and scope as well as organization of this proposal.
1.1 Background of the Study
The term “Banking technology” refers to the use of sophisticated information and
communication technologies together with computers to enable banks to offer better
services to its customers in a secure, reliable, affordable manner and sustain competitive
advantage over other banks (Anitha, Saranya & Vasantha, 2013).
Advances in electronic banking technologies have created novel ways of handling daily
banking affairs, especially via the online banking channel (Pikkarainen, Karjaluoto, et al,
2004). Online banking was first offered in the early 1980s as a result of banks striving to
provide home banking services and this early online service required the use of the
bank‘s proprietary software (AbuShanab, Pearson & Setterstrom, 2010). Banks offering
electronic banking need to recognize the importance of Internet specific consumer
innovation characteristics (Lassar, Manolis & Lassar, 2005).
Information technologies can help to reduce queues in banking halls if used effectively
and efficiently. According to Kamel & Hassan (2003), the success in the application of
different information and communication technology in retail banking delivery channels
and payment systems relies to a large extent on the ability of customers to accept and
adopt such systems. Also Anitha, Saranya, & Vasantha, (2013), narrated that banks are
using new tools and techniques to find out their customers’ needs and acceptance and
offer them tailor made products and services to make it convenient and people can take
advantage in saving time and distance which was inconvenient in early days. The
changes, materializing both from within and external to the financial services industry,
2
result from increasing customer demands for better service response (Ongus & Lukania
2013). According to Berger & Nakata (2013), who examined how information
communications technologies (ICTs) can be implemented effectively to provide financial
service innovations to the poor who live in developing countries and multiple ICT
implementation projects in five sub-Saharan African countries (Ghana, Kenya, Malawi,
Mozambique, and Uganda) concluded that; there are multiple factors that should be
considered in the design and installation activities surrounding these technologies to
ensure they provide cost-effective, quality financial services to the poor. For usage of
banking technologies to be effective and efficient, it is important to understand the key
factors and challenges faced by customers.
According to Guaranty Trust Bank (2015), GTBank is a banking group headquartered in
Lagos, Nigeria, and listed on the London Stock Exchange. In 2013, it acquired Fina Bank
Group which had been in operation in Kenya for over 25 years with subsidiaries in
Rwanda and Uganda. GTBank has been in operation for over 23 years and today operates
over 200 branches in Nigeria, Gambia, Ghana, Liberia, Sierra Leone, Cote d’lvoire and
the United Kingdom. GTBank online banking is a service that eases and conveniently
allows you to bank from the comfort of your home, at work or abroad. You can
practically perform almost all the actions that would entail going to any bank branch from
your comfort zone. It is important to note that the use of information technology
represents a platform for business and socioeconomic development.
According to Kamel (2005), the speed, direction, and determinants of information
technology infrastructure directly influence productivity, cost effectiveness, and
competitiveness in industries. A range of bank and non-bank deposit-taking institutions,
insurance companies and capital markets firms are providing an expanding variety of
products and services, positioning the financial sector to contribute to meeting the
economic cluster targets of Vision 2020, intended to transform Rwanda into a middle-
income country. Relatively few of the targets are financial sector specific, but a vibrant
financial sector is crucial to achieving almost all economic and social objectives
(Andrews, Jefferis, & Murgatroyd, 2012).
3
According to Guaranty Trust Bank (2016), GTBank facilitates its customers with
information technology tools which include GTBank Automated Payment System
(GAPS); which is a secure web-based service that facilitates the processing in batches or
single payments, using secured (https) connections over the Internet. GAPS features are:
a) Role based system that is each user is given a role with specific functions for example
Uploader, Reviewer and Approver;
b) Multi-user solution that is supports multiple users for each role;
c) Two-Phase Login that is every user logs in with an access code in addition to a unique
username and password;
d) Two factor token authentication that is approvers are issued hardware token devices
which generates a dynamic password to authenticate log-in;
e) Multi-level transaction authorization that is no single user can commence and conclude
a transaction except otherwise stated on the account mandate;
f) Comprehensive reports are ability to generate payment reports and approval reports;
g) Customizable is the system that can be customized to meet specific requirements.
Benefits of GAPS are:
i) Elimination of cheque-books;
ii) Efficient and secure channel for making payments and collections;
iii) Ability to initiate and monitor payments from any location in the world (in local
and foreign currency);
iv) Ease of fulfilling one’s obligations in a timely fashion;
v) Online real-time access to one’s account;
vi) Configuration flexibility to align with one’s payment process flow.
4
How To Login To GTBank GAPS Payment Platform in Figure 1.1
Go to GTBank Internet banking login page
Click on the GAPS tab beside the "Internet Banking" tab
Click on "Login" > "Continue"
Enter your access code, username and password.
Figure 1.1 Login To GTBank GAPS
Source: Guaranty Trust Bank (2016).
According to Bhulai, Sivasubramanian, Van Der Mei, & Van Steen, (2007), many
Internet applications employ multi-tier software architectures. The performance of such
multi-tier Internet applications is typically measured by the end-to-end response times.
GAPS is based on 3-tiered model and its’ architecture is shown Figure 1.2. The 3-tiered
architecture has the following major components:
1. Client: There are two clients for the application. One is a web-based
user-friendly client called bank customer. The other is for administration
purposes.
2. Application Server: It takes care of the server script, Driver, and checks for
the connectivity for mapping to the database in order to fulfill client and
administrator’s request.
5
3. Database: Database Servers stores customer’s and bank data.
A client initiates a request to the server. The server responds by executing the business
logic hosted inside the program and if required, communicates with the Database Server
to fulfill a client’s request. GTBank offers also mobile banking and Automated Teller
Machines services.
Request Application Server
Customer
Response Request/Reply for
Cold fusion server Customer/Admin
/ Apache server
Response
Ebanking staff/Admin Business logic
Request Database
Figure 1.2 Architecture of Online Banking Application
Source: Bhulai, Sivasubramanian, Van Der Mei, & Van Steen, (2007)
1.2 Problem Statement
According to Hosein (2011), since the mid-1990s, there has been a fundamental shift in
delivery of banking services, toward using online banking. The trend towards the
adoption of online banking has been rapid. Approximately 74% of the private banking
customers in Finland are regular users of Internet banking services and in general, Europe
has been, and still is, the leader in use of banking technologies.
Banks have invested and integrated banking technologies to enable their customers to
use, access services and product. However, according to research done in Jordan by
AbuShanab, Pearson & Setterstrom (2010), despite the benefits, only 39 percent of
potential customers conducted online banking activity and evidence suggests that most
6
customers who have adopted Internet banking also continue to use traditional banking
methods. Although millions of dollars have been spent on building Internet banking
systems, reports have shown that potential users may not use the systems in spite of their
availability (Wang, Lin, & Tang, 2003).
In Uganda, banking industry is fast growing with the use of information technology in the
form of ATMs, Telephone banking, Mobile banking. Plastic card is one of the banking
products that cater to the needs of retail segment (Mubaraka, Uba & Gokyalya, 2013).
In Rwanda, as stated by Ngango, Mbabazize & Shukla (2015), Electronic banking system
like ATM, Pay direct, electronic check conversion, mobile telephone banking and E-
transact has a great impact on bank performance because they increase profitability,
reduce bank cost of operations, and increase bank asset and bank efficiency.
According to Guaranty Trust Bank (2015), GTBank offers a unique bouquet of
innovative products and services that help individuals and corporate manage their
finances through different technologies which are ATM, E-banking, Mobile banking and
Branch banking. The arising issues of concern related to reasons why some customer
accounts were inactive despite innovative products of information technologies put in
place. It was also not known whether the customers really enjoyed use of information
technologies to access their accounts or whether there were various challenges
experienced in the process of using the services. Currently, there is a shortage of studies
carried out to determine the effect of information technologies in banks, for instance;
automated teller machine, Internet banking and mobile banking on customer acceptance
in the banking sector in Rwanda. Hence the study was to examine how customer
acceptance of information technology is influenced by its usage at GTBank, Kigali,
Rwanda.
1.3 Objectives of the Study
The study was undertaken with the following objectives in mind:
7
1.3.1 General Objective
The general objective of this study was to examine how customer acceptance of
information technology was influenced by its usage at GTBank, Kigali, Rwanda.
1.3.2 Specific Objectives
The study was based on the following specific objectives:
(i) To assess the information technology usage by customers at GTBank, Kigali,
Rwanda.
(ii) To assess customer acceptance in using information technology provided by
GTBank, Kigali, Rwanda.
(iii) To determine the correlation between information technology usage and customer
acceptance at GTBank, Kigali, Rwanda.
1.4 Research Questions
The study was guided by the following research questions:
(i) How did customers use information technology at GTBank, Kigali, Rwanda?
(ii) How was the customer acceptance in using information technology provided by
GTBank, Kigali, Rwanda?
(iii) How did information technology usage correlate with customer acceptance at
GTBank, Kigali, Rwanda?
1.5 Significance of the Study
The study would be significant to various stakeholders including: scholars who would
use the knowledge as reference for further study, National Bank of Rwanda would use
the study recommendations and suggestions to make more improvements on
information technology and design more strategies for better planning; Government of
Rwanda would gain information on the level of information technology adoption by
customers for national technological planning growth, GTBank Rwanda would use this
information for better planning of technological implementation for the satisfaction of
customers. This study would make a valuable contribution given the fact that there are
8
only a limited number of comprehensive studies dealing with the assessment of
information technology and customer acceptance in Rwandan banking environment. This
study would be useful for the banking sector in formulating appropriate strategies to
build customer acceptance and loyalty. The study would also be helpful to customers by
widening knowledge and understanding of information technology available. As far as
practical implications are concerned: the findings would be important to bank managers
to have a better understanding of customers’ perception on information technology.
1.6 Limitations of the Study
The sample was collected only from GTBank Kigali City. Subsequently, caution needs to
be taken when generalizing these research results. The other limitation of this study
concerned the measure of user acceptance because did not personalize user’s beliefs.
Future studies will hopefully consider the failures of the information technology in
Rwanda. The study also did not cover agency banking because Guaranty Trust Bank has
not implemented that aspect. A section of the GTBank customers were not fluent
communicators in English language. The challenge was overcome by translating the
questionnaire into Kinyarwanda language to enable easy administration of the instrument
to such customers (see Appendix C).
1.7 Scope of the Study
The scope of the study included content scope, time scope and geographical scope,
explained as follows:
1.7.1 Content Scope
The study examined usage of information technology at GTBank (namely; usage of
ATM, Usage of mobile banking and usage of Internet banking) while focusing on
customer acceptance of the same. In particular the study endeavored to determine how
the constructs of the independent variable (information technology usage) affected the
construct of the dependent variable ( customer acceptance) at GTBank, as depicted in the
conceptual framework in chapter two.
9
1.7.2 Geographical Scope
The study covered Guaranty Trust Bank branches located within Kigali City. The study
focused on Nyarugenge, Remera, Niboye and Kimisagara sectors. This is because they
provided the same services as other branches in provinces of Rwanda, easy access
according to the distance and branches have many customers (see map, Appendix F).
1.7.3 Time Scope
The study considered data from 2014 to 2015. This is because Guaranty Trust Bank
started operating in Rwanda in 2014 and this is when it started installing and
implementing the usage of information technology within its premises.
1.8 Organization of the study
This chapter discussed introduction to the study, background of the study, statement
problem, objectives and research questions of the study, it also indicated the significance
of the study, scope and limitations. Chapter two covers Review of Related Literature:
theoretical framework, empirical literature, critical review, research gap and conceptual
framework. Chapter three describes the Research Methodology, Chapter four discusses
Research Findings and Discussion and finally chapter five highlights Summary,
Conclusion and Recommendations.
10
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0 Introduction
This chapter provides the review of the literature in three main areas: Information
technology used in banking, customer acceptance, and research related to these two areas
as were applied to Rwanda and other countries.
2.1 Theoretical Literature
This section includes: Information Technology in Banking and Types of Information
Technology used Banking.
2.1.1 Information Technology in Banking
According to Al-Hawari, Hartley, & Ward (2005), Measuring Banks’ Automated Service
Quality: A Confirmatory Factor Analysis Approach aimed to establish the critical
determinants of automated service quality by including those attributes of each main
information delivery technology that were assessed by existing service quality
instruments and those attributes that were overlooked in the automated service quality
literature. Methodology was a quantitative study. Exploratory analysis and Confirmatory
Factor Analysis were used. The proposed comprehensive model was empirically
validated by perceptual data collected from customers of banks of Queensland, Australia.
All of the proposed five factors of customer perceptions of automated banking service
quality exhibited strong unidimensionality, reliability, convergent, discriminant, and
criterion related validity. Consequently, it would be accepted that the automated service
quality in banks could be conceptualized as a five - factor structure consisting of: ATM
service quality, telephone banking service quality, Internet banking service quality, core
service quality and price quality.
According to Wang, Zhang, Sheu & Guo (2010), an Automatic Teller Machine (ATM)
is a computerized telecommunication device and real-time system that provides the
clients of a financial institution with access to their bank accounts. To use an automatic
teller machine, clients must have a plastic ATM card with a plastic smartcard with a chip
11
or a magnetic stripe, which contains a unique card number and some security information
about the client. The customer is identified by inserting plastic ATM card and entering a
personal identification number (PIN) for the customer. ATM networks became more
intelligent when it is providing a banking procedures. ATM uses a host processor to
connect, and communicate. The host processor is analogous to an Internet service
provider (ISP) in that it is the gateway through which all ATM networks become
available to the cardholder (the person wanting the cash). Most ATMs are connected to
interbank networks, enabling people to withdraw and deposit money from machines not
belonging to the bank where they have their account or in the country where their
accounts are held. See example of interbank ATM network in Figure 2.1
Figure 2.1 ATM Network
Source: Wang, Y., Zhang, Sheu & Guo (2010)
According Selvapriyavadhana (2014), Mobile technology is one of the fastest growing
technologies in the world and it offers mobility and anytime anywhere connection to its
users. mobile banking technologies were developed based on four important technology
channels that play important role in performance of the application developers and
effective services to the mobile banking customers . Four important channels were given
as
12
Interactive voice response (IVR technologies) :
Interactive voice response technologies developed for mobile banking services work
depending on interactive voice stored by the bank on an automated system.
Standalone mobile application clients:
Mobile standalone applications are dedicated mobile banking applications that are
developed to offer mobile banking services to customers of the bank. For this purpose
various technologies such as Android and J2ME are used to develop mobile apps
through which customer can log on to the bank application such that customer can
access all services offered by the bank.
Short messaging service (SMS technology):
Short messaging service is a new kind of technology developed by mobile banking
developers where customer can use banking service by the texting SMS to the bank.
Customer can use various services offered by bank such as knowing bank balance,
transacting amount, and alerts on term loans.
Wireless access protocol (WAP-based technology):
Wireless access protocol technology where customer log into network banking site of
the bank and WAP secure protocols are used to secure the bank access to the
customer and customer can enjoy various services offered by the bank. Figure 2.2
shows mobile banking network architecture.
13
Figure 2.2 Mobile Bank Technology Architecture
Source: Selvapriyavadhana (2014)
According to Bhulai, Sivasubramanian, Van Der Mei, & Van Steen, (2007), many
Internet applications employ multi-tier software architectures. The performance of such
multi-tier Internet applications is typically measured by the end-to-end response times.
A client initiates a request to the server. The server responds by executing the business
logic hosted inside the program and if required, communicates with the Database Server
to fulfill a client’s request.
Muhire (2015), indicated that financial services firms manage performance risk for
competitive advantage, not just defense. Today, major initiatives focus on: Consolidation
of Information technology like servers, storage, and data centers to raise utilization,
manageability and effectiveness, Virtualization of servers, storage, and endpoints to
improve quickness, flexibility, and utilization, while controlling complexity. Cost-
reduction initiatives to cut operational and capital expenses and the environmental
impacts associated with them and provide uninterrupted service to customers and
regulators, even through panics and crises when demands are greatest.
14
2.2 Empirical Literature
Study of the past literature on information technology and customer acceptance from the
perspective of India, Australia, Europe, Asia, China, Africa, East Africa and Rwanda,
respectively.
Anitha, Saranya & Vasantha (2013), focused on the usage of information technology in
banking sector in India. The objectives of the study were; to examine the awareness of
technology in accessing banking products, to analyze the usage of technology in banking,
to determine the factors that influence a customer towards information technology in
banking services and suggest measures to improve effective utilization of technology in
banking services. Information technology included Internet banking, Automated Teller
Machines, Mobile banking and direct banking. Problem was lack of highlights on
effective use of technology in banking and product awareness among people. Descriptive
research design was used for the study. Sampling techniques were purposive quota
sampling derived from non- probability sampling method. Selected people who had bank
accounts in Chennai. Data was collected through a Structured Questionnaire. Tools and
Techniques used; Percentage Analysis, Chi Square test and Factor analysis. Findings
found were the mode of using direct banking depends on age of the customers, the use of
banking through mobile depends on education of the customers, mode of using online
banking depends on gender and mode of cash transactions through Internet depends on
income. Measures to improve effective utilization of technology in banking services;
People still have a grit to deposit cash through ATM’s. Banks should list the instruction
procedures on all ATM outlets so that people could use it effectively. Conclusion was
that emphasis should be put on the percentage of awareness on maximum utilization of
information technology. Banks should take effective measures in creating awareness
towards the effective usage of information technology.
2.2.1 Internet Banking and Customer Acceptance
Lichtenstein & Williamson (2006) in Australia, focused on understanding of how and
why specific factors affect the consumer decision whether or not to bank on the Internet,
in the Australian context. Theoretical framework is provided that conceptualizes and
15
links consumer-oriented issues influencing adoption of Internet banking. Demographics
may be relevant, Convenience has been identified by a number of studies as an important
adoption factor, and relevance of Internet banking as an innovation has been found
significant. Adaptability, technical self-efficacy and knowledge of the Internet banking
application have been found influential, suggesting that individual characteristics affect
the adoption decision, Security, privacy, trust and risk concerns may impact consumer
Internet banking choices. The study used a descriptive research design. Sampling
technique was purposive and data was collected by means of combination of individual
and focus group interviews, semi-structured interview schedule was developed by the
team and piloted with four participants. Data was analyzed by qualitative content
analysis. Findings indicated that time savings was the main motivator for consumer
acceptance of Internet banking.
According to Lallmahamood (2007), explored the impact of perceived security and
privacy on the intention to use Internet banking. An extended version of the technology
acceptance model (TAM) was used to examine the above perception. A survey was
distributed, the responses mainly from the urban cities in Malaysia, generally agreed that
security and privacy were still the main concerns while using Internet banking. The
research model explained over half of the variance of the intention to use Internet
banking, the unexplained percent of variance suggested that the model may have
excluded other possible factors influencing the acceptance of Internet banking.
Interaction in the local language (Bahasa Malaysia) did not have an impact on the ease of
use of Internet banking. Internet banking regulations and customers’ privacy would
remain future challenges of Internet banking acceptance. Technology acceptance model
with 4 additional variables that were theoretically justified as having influence on
perceived usefulness and perceived ease of use. The findings revealed that customers
were influenced by perceived usefulness and perceived ease of use.
Yüksel (2011) assessed electronic banking, in terms of a multi-channel distribution
technique. The objective of the study was to examine the progression of Internet banking
in an emerging market, namely Turkey. This was done through a survey among online
customers of Turkish banks and the proposition of strategies to control and fight against
16
the risky issues associated with electronic banking (e-banking) activities. The usage
percentage of online banking, the awareness of customers about the online services and
their expectations from online banking activities in Turkey were evaluated through a
survey and in depth interviews with online customers. Findings of the study revealed that
Internet banking usage rates increased in the last years, depending on the increase of
educated users. The usage rate of the Internet banking was significantly related with the
education levels. Education and also income level made an important difference in the
usage of Internet banking facilities. Most significant factors that affected the choices
were the simplicity of usage of the Internet branch, and the security. By improving these
points Turkish Banks could expand their customer base, and reduce the cost of giving
service through classical branches. According to the survey results, Turkish Online users
generally trusted in the safety of online banking transactions. The online users trusted
more in Internet banking services than telephone banking facilities.
Hosein (2011) indicated that Midwest Communities of China, the Internet became more
important for commerce, Internet websites played a more central role in most companies’
business plans. The success of Internet banking was determined not only by banks or
government support, but also by customers' acceptance of it. Online banking acceptance
gained special attention in academic studies during the past several years as banks moved
toward implementing Internet banking as part of their overall strategy. The business
benefit of Internet banking was to generate additional revenue, improved customer
service, extended marketing, and increased cost savings. In accepting the Internet and
maximizing its potential, there were several stages that firms evolved through different
roles. Some key questions were identified, especially to what extent banks should modify
their Internet services for customers. The aim of the study was to identify those areas in
which the banks could improve or modify their services to increase the acceptance rate of
Internet banking. Data was gathered from non-Internet banking users via a survey
questionnaire. The responses were analyzed using Structured Equation Modeling (SEM)
from which the hypotheses were tested and conclusions drawn. The results from the
survey indicated that customers found it difficult to use Internet banking services, which
lead to a decrease in the acceptance of Internet banking.
17
In South Korea, the study by French (2012) found that electronic banking security
continued to increase in sophistication to protect against threats, the usability of the
electronic banking decreased resulting in poor security behaviors by the customers. The
study evaluated security risks and measures taken for electronic banking solutions. A
case study was presented describing how increased complexity decreased online
vulnerabilities but increased vulnerabilities from internal threats and electronic banking
customers. Various threats and counter measures for protecting against those threats were
evaluated. The study revealed that online banking in particular, were spending the
majority of their efforts on external security without properly assessing the importance of
internal security. With internal security being of a higher risk than external security, these
additional security measures gave customers a false sense of security. This study
addressed the need for increased awareness of internal threats through security measures
such as security awareness, policies, practices, and procedures. Technology should be an
added convenience to the customer and not prohibit them from accessing their
information. While security is important, organizations should balance the need for
increased security with the desire to make systems easy to use and useful to the
customers.
Abeka, Abeka & Omondi (2012) identified the factors that influenced corporate
customers’ acceptance of Internet banking services in Kenya, Uganda, Tanzania and
Rwanda. Hypotheses; Perceived Usefulness positively influences use of Trade Finance
Internet Services. Perceived Ease of Use positively influenced use of Trade Finance
Internet Services, Bank support positively influenced use of Trade Finance Internet
Services in East Africa. Research design was a survey, data was collected by means of
questionnaires. Data Analysis Method; the analysis was done using the Statistical
Package for Social Sciences (SPSS). Descriptive statistics and regression analysis,
completed with Pearson product-moment correlation analysis. The analysis revealed that
corporate users were not motivated by the same factors as private users. In order to
become Internet banking customers, it was extremely important for corporate users to
have a system that was easy to use and operate with full support from the bank.
18
Mukhtar (2015), conducted a study purposely to evaluate what are the perceptions of
customers towards Internet banking in United Kingdom. The study postulated that
information technology, in the outer world, is not static. It keeps on changing and
developing. At the same time, this developing technology was impacting continuously on
the ways of doing businesses and also about the perceptions of customers towards
organizations and businesses. Objectives; evolution of Internet banking, examine
attitudes and behaviors of people towards Internet banking in the United Kingdom, To
examine challenges faced by customers to adopt Internet banking in the United Kingdom.
To study challenges faced by companies in the effective development of Internet banking
in the United Kingdom. The perceptions of customers towards Internet banking in the
United Kingdom have been evaluated through inductive research approach. Through the
questionnaire survey, data was collected and perceptions of customers regarding online
banking were evaluated. This study was based on the inductive approach because it
aimed to evaluate the perceptions of customers of the United Kingdom regarding online
banking. Different factors affecting the perceptions of customers towards Internet
banking were privacy, security, convenience and trust perceptions of customers towards
Internet banking. The recommendations made included; improvement of security features
and precautionary measures for providing reliable services to customers. Regarding
Internet Banking, there was a need to train the incumbent Internet customers regarding
safe and appropriate use of Internet banking services, banking customers disagreed
regarding the certainty of the banking services. In this regard, it was recommended that
the Internet bankers need to demonstrate and assure that the banking services were
always available and reliable and need to elaborate the periodic maintenance of the
routine faults and blockages in the banking services. The banks needed to take measures
such as loyalty programs and membership programs for assuring customers that they are
valuable assets from the banks.
Omotayo, & Adebayo (2015) in Nigeria, revealed that there was no significant
relationship between demographic characteristics of the students and intention to adopt
Internet banking, while the individual factors (attitude, trust, perceived usefulness,
perceived ease of use and perceived behavioural control), and social factor (subjective
norms) significantly influenced intention of the students to adoption Internet banking.
19
The study concluded that even though some students were yet to accept the use of
Internet banking, their attitude towards online banking is favorable. It was therefore
recommended that banks should intensify efforts to improve the security of online
banking platform as well as continue to educate their customers on the perceived benefits
of Internet banking in addition to making the platform more user-friendly and easy to use.
2.2.2 Mobile Banking and Customer Acceptance
According to Pousttchi & Schurig (2004), mobile banking in Saudi Arabia started to offer
banking services through mobile phones. However, not many studies investigated the
factors that help the bankers to design mobile services, which were suitable for and
adoptable by bank customers. The study filled the gap and examined a number of factors
affecting the mobile banking adoption. Using Diffusion of Innovation as a baseline
theory, data was obtained from 330 actual mobile banking users. It was found that
relative advantage, compatibility, and observability had positive impact on acceptance.
Contrary to the findings in extant literature, trialability and complexity have no
significant effect on acceptance. Perceived risk had a negative impact on acceptance. The
findings of the study had practical implications for banking industry in Saudi Arabia.
In Chinese online and mobile bank users were predominantly males, not necessarily
young and highly educated, in contrast with the electronic bank users in the West. The
issue of security was found to be the most important factor that motivated Chinese
consumer adoption of online banking. Main barriers to online banking were the
perception of risks, computer and technological skills and Chinese traditional cash‐carry
banking culture. The barriers to mobile banking adoption were lack of awareness and
understanding of the benefits provided by mobile banking (Laforet & Li, 2005).
Laukkanen & Lauronen (2005) study proposed and validated a model for mobile banking
resistance. Emulating Ram and Sheth (1989), five distinct barriers namely usage, value,
risk, tradition and image were suggested as determinants of the phenomenon. A total
number of 1,597 valid responses were collected. An exploratory factor analysis followed
by a confirmatory factor analysis was used to test the validity of the model and measure
the standardized estimates of the constructs. The results showed that the usage barrier,
20
followed by the image barrier, was the most influential barrier to overall resistance to
mobile banking. Some theoretical and managerial implications were discussed. The study
used a seven-point Likert scale ranging from totally disagree (1) to totally agree (7) was
used. An online survey was conducted among the Internet banking customers of a large
bank in Finland. The questionnaire was placed in the log-out page of the bank’s online
service. The questionnaire was open for 72 hours. A total number of 1,597 valid
observations were received. An exploratory factor analysis using the principal component
method with 4 varimax rotation was used to determine the factors of the phenomenon.
The resulting factor structure was finally verified with a confirmatory factor analysis.
In South Africa, despite the exponential growth in cell phone usage in South Africa, from
13 million subscribers in 2002 to at least 49 million subscribers, uptake of cell phone
banking in the same period lags. Utilizing Rogers’ innovation adoption framework, the
study examined banking consumers’ perceptions of cell phone banking attributes, and
how these may affect adoption. A survey of 124 cell phone users from Gauteng,
Mpumalanga, and Limpopo Provinces participated in the study. Results indicated an
improvement in cell phone banking uptake compared to past years. Perceptions of risk
and security concerns appeared to slow the adoption rate. While banking institutions did a
lot in launching cell phone banking, focusing attention on in-house promotion and
customer demonstrations of cell phone banking in order to further improve adoption rate
(Shambare, 2011).
The study aimed at extending the understanding regarding the adoption of mobile
banking through integrating Technology Acceptance Model (TAM) and Theory of
Planned Behavior (TPB) was carried out in United Arab Emirates. Analyzing survey data
from 119 respondents yielded important findings that partially support research
hypotheses. The results indicated a significant positive impact of attitude toward mobile
banking and subjective norm on mobile banking adoption. Surprisingly, the effects of
behavioral control and usefulness on mobile banking adoption were insignificant.
Furthermore, the regression results indicated a significant impact of perceived usefulness
on attitude toward mobile banking while the effect of perceived ease of use on attitude
toward mobile banking was not supported. Future research would most likely consider
21
the adoption of mobile banking by both governmental and private banks and draws
differences in adoption rate, mode and type of services (Aboelmaged & Gebba, 2013).
Engwanda (2015) argued that mobile banking penetration was relatively low even though
smartphones were the most dominant forms of mobile computing in the United States of
America (U.S.A). Study was focused on how consumers ‘perceptions affect their
intention to use mobile banking in the United States. Among U.S.A consumers with
smartphones, Internet access, and a bank account; 68% used Internet, 33% used
telephone-based banking, and only 21% engaged in some type of mobile banking
activities in 2011. The results indicated that, perceived compatibility, credibility, and
costs were the significant predictors of mobile banking adoption in the United States.
Rumanyika (2015), found that the adoption of mobile banking in Tanzania is negatively
affected by factors such as theft of mobile handsets, poor network coverage, lack of
knowledge of m-banking users, high mobile money transaction fees, irregular standards
of mobile money payments, lack of enough float of mobile money agents, ATM
breakdown and theft, lack of trust of mobile money agents, and poor security of mobile
networks. Fourteen (14) papers (from 2010-2014) related to the study were reviewed to
extract obstacles which appear most frequently. The frequencies and percentages of eight
(8) studied variables were computed using MS-excel and presented in tables and pie
chart. The findings revealed that poor network coverage, lack of knowledge of m-banking
users, lack of enough float of mobile money agents and ATM breakdown and theft were
major obstacles on the way to the adoption of m-banking in Tanzania. The study
recommended that, the government and all other stakeholders should hastily focus their
first priority to tackle the most critical obstacles instead of dealing with a huge number of
obstacles, taking into account the limited resources the country is facing. This approach
could be productive since it needs little resources, integrated efforts and strategies which
must be implemented in parallel with government policies such as National Strategy for
Growth and Reduction of Poverty.
22
Ngango, Mbabazize & Shukla, (2015) examined the contribution of E-banking towards
banking on performance of banking Institutions in Rwanda. There was delay in payment
of checks between banks; time wasted in banks as people lineup in queue waiting for
service, errors as a result of manual work and fraud related cases was common. Bank
clients complained of the above hence the researcher was interested to examine the
contribution of this system to banking efficiency in Rwanda. The study used descriptive
research design by basing on qualitative and quantitative approach in order to get better
analysis of the study. Both primary and secondary data collection tools were used with
their relevant tools like questionnaire and documentary analysis in order to come up with
required data. In the findings it was established that electronic banking systems like
ATM, Pay direct, electronic check conversion, mobile telephone banking had a great
impact on bank performance because they increased profitability, reduced bank cost of
operations, and increased bank asset and bank efficiency. The findings indicated that
independent variable had positive high correlation to dependent variable. As conclusion E
banking contributes to positive performance of banks.
Abuga & Manyange (2015) established the effectiveness of mobile banking services in
selected commercial banks in Rwanda. Descriptive design involving both qualitative and
quantitative approaches was employed. Sample size of 227 was computed from a total
population of 524 employees from the selected banks and the selection of respondents
was done through systematic random sampling. The instruments of data collection used
in this study included both structured questionnaires and interview. In data analysis,
quantitative data was analyzed through frequencies and percentages for respondents’
mean values were used to determine the effectiveness of mobile banking services in the
selected commercial banks. Difference in effectiveness of mobile banking services was
determined through One-Way-ANOVA. Research findings reveal that mobile banking
services in the selected commercial banks were generally effective. The most effective
item under mobile banking services was noted in security measures and privacy, followed
by time management and convenience and the least effective was on the financial risk
measures. The study also found out that there was significant difference in the
effectiveness in mobile banking services among selected commercial banks. The bank
with most effective mobile money services was Banque Populaire du Rwanda, followed
23
by the Kenya Commercial Bank, next was Bank of Kigali, Equity Bank, and finally,
ECOBANK. The study concluded that the mobile banking services in the selected
commercial banks are effective. It recommended that the bank management should
ensure that they continue strengthening issues concerning security and privacy in mobile
banking; put in place promotion and sensitization programs for mobile banking services,
as well as to adopt new and modern technology that meets the demands of ever changing
trends of mobile banking service.
2.2.3 Automated Teller Machine and Customer Acceptance
According to Wang, Zhang, Sheu & Guo (2010), an ATM system is a real-time front
terminal of automatic teller services with the support of a central bank server and a
centralized account database. An ATM provides money withdraw and account balance
management services. The architecture of the ATM system, as shown in Figure2.3,
encompasses an ATM processor, a system clock, a remote account database, and a set of
peripheral devices such as the card reader, monitor, keypad, bills storage, and bills
disburser.
Figure 2.3 How ATM works
Source: Wang, Y., Zhang, Sheu & Guo (2010)
24
In USA, ATMs had provided an important expansion of banking services that benefited
all consumers. Before the introduction of ATMs in the early 1970s, bank customers’
access to their cash was limited to traditional banking hours. Customers often found
themselves waiting in long lines on Friday afternoons just to withdraw enough cash to
carry them through the weekend. ATMs opened a whole new world of convenience by
eventually allowing access to banking services 24 hours a day, 365 days a year. To pay
for that service, banks typically charged a fee to help defray the cost of belonging to the
network; Consumers had the ability to obtain money from their bank accounts without
paying a surcharge. ATM surcharges allowed banks and other ATM operators to deploy
machines in more convenient locations. Customers who were unwilling to pay a
surcharge incured the cost of inconvenience, while those who valued the convenience
more than the cost of the fee had the option of paying for it (Bradbury, 2014).
With the rapid development of modern information technology in China, more and more
Self-service Technologies (SSTs) emerged and won more and more customers
increasingly. But some types of SSTs were not accepted by the customers. The study
firstly divided SSTs into financial and specialty classes based on the product function.
Then, a technology acceptance model was proposed on the basis of analysis of SSTs
adoption behavior. Finally, the data were collected from users of automated teller
machines and automated boarding machines in china through site interview and
processed by structural equation modeling analysis method. The study found that both
perceived risk and perceived security have significant impact on users’ adoption of
financial SSTs while perceived ease of use and perceived enjoyment positively affect
specialty SSTs adoption behavior and the effects of perceived usefulness and the self-
efficacy on customers were alike (Xiaoren, Xiangdong & Ling, 2013).
Adepoju (2010), analyzed cases of ATM usage and fraud occurrences within some banks
in Minna Nigeria. The objectives of the study were; to identify various fraud and security
threats associated with the use of ATM, evaluated the users opinion on ATM fraud and
how offender robs the victim of his/her ATM card, gets the PIN and then uses the card, to
know the frequency and occurrence of ATM fraud, to know the level of security put in
place as regards the use of ATM. A case study of three banks in Minna to find out how
25
frauds were perpetuated with the use of ATM card. The banks were; Intercontinental
Bank PLC United Bank of Africa (UBA) and Guaranty Trust Bank (GTBank). The
population of the study comprised the customers of three banks in Minna, each with 50
ATM customers were sampled for the study. This gave a total of 150 ATM customers.
The research instrument used was structured questionnaire. The adoption of ATM in
Nigeria banks for financial transaction kept growing and people had realized the
convenience in using ATM. The research showed that customers ware much comfortable
with the electronic banking system, which ATM was just a segment out of various
services of e-banking. Various forms of fraud were perpetuated, ranging from; ATM card
theft, Skimming, Pin theft, Card reader techniques, PIN pad techniques, force withdrawal
and lot more.
Asabere, Baah & Odediyah (2012), focused on measuring the ATM standards and service
quality of Banks in Ghana included Intercontinental Bank Ghana (IBG) Ltd (private) and
Ghana Commercial Bank (GCB) Ltd (public) as well as other Banks in Ghana. Main
objectives of the study were to analyze the current standards, quality of service and trends
of ATM Banking in Ghana. The methodologies used for this study involved interviews
with IT officers of the case study Banks and administrations of questionnaires to a
number of Bank customers in Ghana. The quick growth of ATMs in Ghana since 1995
offers opportunities to Banks to be strategic and advantageously use ATM service for
customers’ Banking needs and passion. For effective customer responses, satisfaction and
retention, Banks in Ghana should proactively monitor customers’ preferences with regard
to use of ATMs and try to implement these preferences in the features of ATMs. Banks in
Ghana should focus on important aspects of user friendliness, ATM functionality,
availability of transaction receipts, security and privacy as well as frequent monitoring
and maintenance of ATMs. The study recommended that the Banking Industry in Ghana
should increase and diversify their services through ATMs. Banks should also improve
ATM features to suit customers and use this medium to build a strong and a sustainable
relationship with customers.
26
E-services were revolutionizing the way business was conducted in banking industry.
Banks were trying to provide a variety of self-service channels such as Automated Teller
Machines (ATM,) Internet banking and Mobile Banking (m-banking) in order to increase
customer convenience, reduce costs and maintain profitability. This paper proposed a
framework to explore and compare the dimensions and barriers that affected consumer's
intention to use or adopt different self-service banking technologies in the Egyptian
context. An empirical study on bank customers was conducted using a quantitative
approach, where structured questionnaires were distributed over 1500 respondents that
were divided into three groups in order to investigate the usage of ATM, Internet banking
and m-banking. Data collected, was statistically analyzed using Chi square test,
frequencies and cross tabulations. The results indicated that the three groups differ
significantly with respect to usage, value, risk, tradition and image barriers. Moreover,
significant relations between decisions of adoption with Internet banking experience,
level of education, type of mobile owned and mobile Internet experience were also noted
(Abd El., Rehaballah El & Hussien, 2014).
2.2.4 Customer Acceptance of Information Technology
According to Venkatesh, Morris, Davis & Davis (2003), factors determining acceptance
of banking technology are:
i. Performance Expectance, driven from perceived usefulness, relative advantage,
extrinsic motivates job-fit, and outcome expectations. In banking technologies the
greater the perceived relative advantage, the more likely banking technology would
be accepted.
ii. Effort Expectance, captured the concept of perceived ease-of-use, complexity, and
easy-of-use to define effort expectation as the degree of ease associated with
technology use.
iii. Social Influence, represent subjective norm, social factors, and image. They defined
social influence as the degree to which an individual perceives the importance of
using banking technology.
27
iv. Facilitating Conditions, indicated that facilitating conditions as the degree to which an
individual believes that an organizational and technical infrastructure exists to support
technology use.
v. Perceived Self-Efficacy, the confidence an individual has in ability to use a specific
type of banking Technology. Self-efficacy was an indirect determinant captured by
effort expectancy and fully mediated by effort expectancy. Therefore, they dropped
self-efficacy from the direct determinant of behavior.
vi. Behavioral Intention, that drawing from psychological theories, which argue that
individual behavior is predictable and influenced by individual intention, UTAUT
contended and proved behavioral intention to have significant influence on
technology usage.
vii. Moderator effects Age, Adopters of technological innovations as typically younger in
age, having higher incomes, better educated, and having higher social status and
occupation, research findings in the context of electronic banking are not consistent.
The factors indicated significantly affect individual behavior of using Information
technologies.
In Saudi Arabia, as information technology rapidly changed the fabrics of industries, the
trade of online banking had became more diversified. Specialized in unlimited, speedy
and convenient services, online banking transformed traditional banking in many
countries. The managements’ ability to anticipate and respond to such changes in the
financial marketplace, thus, had a decisive influence on the success or failure of many
retail banks. The study which was exploratory in nature, was intended to develop a
comprehensive conceptual framework from which researchers could empirically examine
and explain the relationship between customers’ perceived usefulness of online banking
and the relative advantages of online banking. Multiple regression was conducted to test
the relationships. The statistical results showed that relative advantages, trust and
perceived ease of use were more important and critical to customer’s intension of online
banking adoption. This study further offered a marketing insight for managers to
effectively deploy online system and service. In designing online banking services,
28
software developers should pay close attention to informative content that would, above
all, perceived by customers as useful and relevant (Al-Somali, Gholami & Clegg, 2009).
According to study done by Oni & Ayo (2010) Nigeria was depicted to be the fastest
growing telecommunications nation in Africa. Members of the Nigeria banking industry
were reported to have engaged the use of Information and Communication Technology
(ICT) as a platform for effective and efficient means of conducting financial transactions.
This paper focuses on determining the level of users’ acceptance of the electronic
banking services and investigating the factors that determine users’ behavioral intentions
to use electronic banking systems in Nigeria. The survey instrument employed, involved
design and administration of a total of 500 survey questionnaires within the Lagos
metropolis and its environs. An extended Technology Acceptance Model (TAM) was
employed as a conceptual framework to investigate the factors that influence users’
acceptance and intention to use electronic banking. To test the model, data was collected
from 292 customers from various commercial banks in Nigeria. The model measured the
impact of Perceived Credibility (PC), Computer Self-Efficacy (CSE), Perceived
Usefulness (PU), and Perceived Ease of Use (PEOU) on customer attitude and customer
attitude on customer adaptation. The result of this research shows that ATM still remains
the most widely used form e-Banking service. Bank customers who were active users of
e-Banking system used it because it is convenient, easy to use, time saving and
appropriate for their transaction needs. Also the network security and the security of the
system in terms of privacy were found to be the major concerns of the users and were
hindrance to intending users.
Usefulness, ease of use of the system awareness about mobile banking and risks related
to it were the main perusing factors to accept online banking system in India, (Safeena,
Hema Kammani & Hundewale, 2012).
The purpose of the study by Abeka (2012), was to identify the factors that influence
corporate customers adoption of Internet banking services in Kenya, Uganda, Tanzania
and Rwanda. The hypotheses ware empirically evaluated by using trade finance
customers of an East African bank as the target sample. Technology Acceptance Model
(TAM) was the primary basis for the study. The information gathered from former
29
studies that mainly concentrated on private customer acted as a foundation for building
an extension of TAM suitable for corporate customers. The study involved 137
respondents from Kenya, Uganda, Tanzania and Rwanda. Due to the quantitative nature
of the study, the results were analyzed with statistical measures. This included the use of
SPSS to carry out regression analysis. The analysis revealed that corporate users were not
motivated by the same factors as private users. In order to become Internet banking
customers, it is extremely important for corporate users to have a system that is easy to
use and operate with full support from the bank.
Innovations in the telecommunication have proven to be a boon for the banking sector
and its customers: one of these is Mobile Banking, where customers interact with the
bank via mobile phones and banks provide them the services like short message services,
fund transfers, account details, issue of cheque book etc. Presently almost all the banks in
the world have started providing their customers “Mobile Banking” services. The main
issue of this study was to understand the factors which contribute to user’s intention to
use the mobile banking services. The purpose of this review paper was to explore the
factors that influence the adoption behaviour of mobile banking services by Indian
consumers. The study also discussed the various steps that mobile banking providers
should take to increase their mobile banking services user’s database. (Srivastava, Singh
& Srivastava, 2013).
Geetha & Malarvizhi (2014), found that automated teller machine (ATM) was perceived
to be the most secure & useful electronic banking channel. Internet banking and mobile
banking were perceived to be low on security dimension. Phone banking although
perceived secure, scored high on complexity and low on usefulness. Further, studies
presented important implications for bank to improve adoption of electronic banking
services. The derived dimensions for e-banking; usefulness, complexity and security also
have element of customer perception involved. So banks should attempt raising
awareness of what an e-banking can do & what not, how to do it and what are the
functional risks. A special task force should be trained by banks specifically to pass on
the knowledge to the users to tackle technical illiteracy issue so as to reduce complexity
and enhance security perception. Ultimate objective of banks and regulators should be to
30
pave the path for more cost effective, efficient, ubiquitous and convenient e-banking
solutions.
In Kenya, the study by Ndumba & Muturi (2014), aimed to investigate factors affecting
the adoption of mobile banking in Kenya Commercial Bank. KCB Limuru customers
were used as the target population. The specific objectives were to assess the influence of
users’ perceived risk on adoption of mobile banking, to evaluate the effect of trust in
mobile banking by users, towards influencing their choice of adopting it, to examine how
perceived convenience affects adoption of mobile banking and to explore how relative
advantage influences adoption of mobile banking. Descriptive research design was used.
The sample size for the research comprised 67 customers. Data was collected through use
of questionnaires which were distributed to customers. Data collected was edited, coded
and analyzed using Statistical Package for Social Sciences (SPSS). Data was analyzed
using descriptive statistics such as frequencies and percentages. Conclusions were made
using inferential statistics namely correlation analysis. Research results indicate that the
adoption rate in KCB Limuru was below target. The main reasons found to be behind
non-adoption of mobile banking service was risk of loss and fear of system failure.
Customers’ perceived risk was found to negatively affect adoption of M-Banking service.
The risks found to have the greatest influence were fear of sending money to wrong
account or phone number and loss of personal or account information. On the other hand,
perceived convenience was found to positively affect adoption of M-banking by being
easy to use and being useful in various ways. The usefulness presented included;
accessibility, saving of time and comfort. In addition, M-banking services mostly used
were account balance enquiry and funds transfer. In regards to trust, the reliability of M-
Banking services was found to positively affect adoption of these services. The more
reliable the service was found to be, the more adopted it was. Lastly, the M-banking
service was found to possess relative advantages in comparison to traditional banking
services (Ndumba & Muturi, 2014).
According to Xu, Shao, Lin & Shi (2014), Internet banking allows companies to access
banking services via the Internet without traditional temporal and spatial limitations.
From a bank's viewpoint, Internet banking provides opportunities to expand markets,
31
increase service efficiency, lower the cost of operations, and improve customer loyalty.
However, the enterprise adoption of Internet banking in China was still low, compared to
the developed countries. Therefore, understanding the factors that influenced the adoption
of enterprise Internet banking would help both service providers and enterprise clients
develop strategies for incorporating Internet banking into their businesses for new
opportunities. This paper investigated Internet banking adoption by Chinese companies.
An empirical study was conducted using data from 174 Chinese companies. The results
indicated that perceived benefits, perceived transactional risk, organizational readiness,
and external pressure exert significant effects on enterprise adoption of Internet banking
in China. Based on the research findings, suggestions were provided on how to promote
the usage of Internet banking in China.
In Nigeria, Perceived Usefulness (PU) and Perceived Ease of Use (PEOU) among other
factors significantly affect the acceptance of E-payment and customer. Other factors
being: Perceived Risk, Trust, Security and privacy. Perceived Usefulness (PU) is defined
as the degree to which a person believes that using a particular system would enhance his
or her job performance. Perceived Ease Of Use (PEOU) is defined as the extent to which
a person believes that using a particular system was free from effort. Perceived Risk,
Trust, Security and Privacy, Perceived Risk is very much close to Perceived Security and
privacy (Sanghita, & Indrajit, 2014).
Mwaikali (2014) assessed the challenges facing banks’ customers when using automated
teller machines (ATMs) in the banking industry in Tanzania, a case of some selected
banks in Tanzania. Specifically, the study examined the contribution of automated teller
machines towards customer satisfaction, challenges facing customers when using ATM
in Tanzania, and strategies which banks in Tanzania can use in improving ATM services
in Tanzania. The study employed descriptive research design to explain the extent to
which bank customers in Tanzania are satisfied and dissatisfied with ATMs in Tanzania.
Data were sourced mainly from bank customers of Barclays bank, National Microfinance
Bank (NMB), National Bank of Commerce, Tanzania Posta Bank, Exim Bank, and
Diamond Trust Bank in Iringa region in Tanzania. Data were collected only to customers
who had ATM cards. In all banks, 100 ATM card bearers were accessed. Structured
32
questionnaire was administered to each customer. Data analysis was done using software
programs such as Statistical Package for Social Science (SPSS) and Microsoft excel.
Descriptive and inferential statistics were the pivot of the analysis. Findings of the study
revealed that card locking, insecurity, machine breakdown, machine out of cash, and long
time in cash dispensing have a positive relationship with the challenges of that face bank
customers in using ATMs in Tanzania. The study concluded that these factors (card
locking, insecurity, machine breakdown, machine out of cash, and long time in cash
dispensing) hinder the convenience, speed, security, reliability and cost for more
customers to use ATM and get customer satisfaction in banks in Tanzania. Thus, the
study recommends that those challenges attributed in the study should be given priority
by banks in improving ATM services to customers.
2.3 Critical Review and Research Gap Identification
This includes summarizing and evaluating the theoretical literature and empirical
literature in review to identify the research gap of the study.
2.3.1 Critical Review
Lichtenstein & Williamson (2006) focused on understanding of how and why specific
factors affect the consumer decision, in the Australian context. Guided by Unified Theory
of Acceptance and Use of Technology (UTAUT) model, key reasons for non-users not
having accepted Internet banking were: perceptions that their current banking method
was convenient; lack of awareness of the relative advantages; low levels of accessibility,
lack of proficiency in the technology, habituated preference for face-to-face or telephone
banking services, security and privacy issues, and distrust of the Internet banking
technologies.
Adepoju, (2010) argued that ATM technology was advancing and fraudsters were on
drawing board to see how they come up with different fraud skills to beat the security.
Various forms of fraud were perpetuated, ranging from; ATM card theft, Skimming, Pin
theft, Card reader techniques, PIN pad techniques, force withdrawal and lot more as
33
guided by Unified Theory of Acceptance and Use of Technology model and affected
customer attitudes towards ATM usage negatively.
AbuShanab, Pearson & Setterstrom, (2010) and Engwanda (2015) followed Unified
Theory of Acceptance and Use of Technology (UTAUT) and indicated that, perceived
compatibility, credibility, and costs were the significant predictors of mobile banking
acceptance by customers in the United States but other banking technologies were not
considered for their acceptance.
Yüksel (2011) in limits of Unified Theory of Acceptance and Use of Technology
(UTAUT) model revealed that Internet banking usage rates had increased in the last past
years, depending on the increase of educated users. Education and also income level
made an important difference in the usage of Internet banking facilities.
According to Aboelmaged & Gebba (2013) guided by Unified Theory of Acceptance and
Use of Technology (UTAUT) indicated a significant positive impact of attitude toward
mobile banking and subjective norm on mobile banking adoption. Surprisingly, the
effects of behavioral control and usefulness on mobile banking adoption were
insignificant. The regression results indicated a significant impact of perceived usefulness
on attitude toward mobile banking while the effect of perceived ease of use on attitude
toward mobile banking was not supported. Other banking technologies were not
considered for their adoption.
According to Mukhtar (2015), evaluated the perceptions of customers towards Internet
banking in United Kingdom. Followed Unified Theory of Acceptance and Use of
Technology (UTAUT) model to examine different factors affecting the perceptions of
customers towards Internet banking which were privacy, security, convenience and trust
perceptions of customers towards Internet banking. Revealed that number of people
doesn’t use Internet banking due to security risk.
Mwaikali, (2014), indicated that factors including card locking, insecurity, machine
breakdown, machine out of cash, and long time in cash dispensing hindered the
convenience, speed, security, reliability and cost for more customers to use ATM and get
customer satisfaction in banks in Tanzania. Previous studies emphasized on the factors
34
that influence the acceptance of each of the three banking technologies by customers and
indicating which factors affect customer perception on the usage of banking technologies.
2.3.2 Research Gap Identification
Previous studies by Mwaikali (2014) and Mukhtar (2015), covered banking technologies
and influencing factors for the acceptance by customers but left out use of information
technology as to impact on customer acceptance, at what level are these banking
technologies accepted and which is more accepted than others and why, taking case study
of Rwanda. This was the knowledge gap that the study intended to fill particularly in the
case of GTBank, Kigali Rwanda, where published materials in this area of interest are
few. Therefore the above mentioned gaps were the areas that were covered through this
study.
2.4 Theoretical Framework
Theoretical frame work involves approach, theories and models for acceptance of
banking technologies.
Generally, studies of usage of banking technologies an adoption approach were used.
Adoption approach describes the acceptance decision of individual users applying
different social theories of decision-making. As the adoption approach as outlined by
Technology Acceptance Model (namely; Technology Acceptance Model, Technology
Acceptance Model 2, Technology Acceptance Model 3 and Unified Theory of
Acceptance and Use of Technology) appeared to be the most comprehensive in
explaining perception and acceptance of technology. Three Models, collectively called
the Technology Acceptance Model, stand out as the most widely applied explanation
within the usage approach (Vijayan, 2005).
The study relied largely on the Unified Theory of Acceptance and Use of Technology
that uses four determinants (performance expectancy, Effort expectancy, Social influence
and facilitating conditions), intention and actual use of banking technologies. The usage
of banking technologies is grounded in Unified Theory of Acceptance and Use of
Technology. Unified Theory includes (Theory of Reasoned Action, Technology
35
Acceptance theories, Motivational theory, Theory of Planned Behaviour, Personal
Computer Utilization theory, Innovation Diffusion Theory, and Social Cognitive Theory).
Unified Theory of Acceptance and Use of Technology has emerged as the most powerful
and parsimonious theory to represent the antecedents of banking technologies usage
(Vijayan, 2005).
The UTAUT aims to explain user intentions to use a banking technology and subsequent
usage behavior. The theory holds that four key constructs: 1) performance expectancy, 2)
effort expectancy, 3) social influence, and 4) facilitating conditions; being the first three
direct determinants of behavior intention and usage. Gender, age, experience, and
voluntariness of use are posited to moderate the impact of the four key constructs on
behavior intention and usage. The theory was developed through a review and
consolidation of the constructs of eight models that earlier studies had employed to
explain banking technologies usage behavior (Theory of Reasoned Action, Technology
Acceptance Model, Motivational Model, Theory of Planned Behavior, a Combined
Theory of Planned Behavior/Technology Acceptance Model, Model of Personal
Computer Use, Diffusion of Innovations Theory, and Social Cognitive Theory),
(Venkatesh, Morris, Davis & Davis, 2003).
The UTAUT model examined the determinants of user acceptance and usage behavior
(performance expectancy, effort expectancy, social influence, and facilitating conditions)
and found that all contribute to usage behavior either directly or through behavior
intentions. These relationships were found to be moderated by gender, age, experience,
and whether or not use is voluntary. In the context of this study, performance expectancy
is defined as the degree to which an individual believes that using banking technologies
would help him or her achieve their goals; effort expectancy is defined as the degree of
ease associated with using banking technologies; social influence is defined as the degree
to which an individual perceives that important, others believes should use banking
technologies; and facilitating conditions is defined as the degree to which an individual
believes that an organizational and technical infrastructure exists to support banking
technologies as in Figure 2.4 (Venkatesh, Morris, Davis & Davis, 2003).
36
Figure 2.4 Unified Theory of Acceptance and Use of Technology (UTAUT)
Source: ( AbuShanab, Pearson & Setterstrom, 2010)
The Unified Theory of Acceptance and Use of Technology Model (UTAUT) was more
applicable in the examining of the level at which customer accept the banking
Technologies in GTBank Kigali Rwanda according to the Comparison of Models of the
models.
The five factors of UTUAT model was used to study the adoption of Internet banking,
Mobile banking and ATM (namely; Effort expectancy, Performance expectancy,
facilitating conditions, Social Influence, and Voluntariness. Facilitating conditions is
also another major factor that influences banking technologies acceptance in this
study. The unified theory of acceptance and use of technology (UTAUT) is a
technology acceptance model formulated by Venkatesh and others in "User
37
acceptance of information technology: toward a unified view". The UTAUT aims to
explain user intentions to use an information system and subsequent usage behavior.
The study also relied on Delone and Mclean proposed updated Information System
success model
The updated model consisted of six interrelated dimensions of Information technology
success as shown in Figure 2. 5 DeLone &McLone Information System Success Model:
information, system, service quality subsequent or intention to use, user satisfaction, and
net benefits. As a result of using the information technology, certain benefits were
achieved; the net benefits were to influence customer acceptance and the further use of
the information technology.
Figure 2.5 Updated DeLone & McLone Information System Success Model
Source: (Delone & Mclone, 2003)
The arrows in demonstrated Figure 2.5 proposed associations between success
dimensions, technology quality, measured the desired characteristics of an online system.
Customer acceptance remained an important means of measuring opinions of information
technology and covered entire user experience cycle from information retrieval through
usage. Net benefits were the most important success measures as they captured the
balance of positive and negative impacts of the information technology on customers. Net
benefits were determined by context and objectives for information technology (Delone
& Mclone, 2003).
38
2.5 Conceptual Framework
The conceptual framework expresses the rationale behind the study. It reveals and tries to
show the relationship between the banking technologies and customer acceptance in
GTBank Kigali, Rwanda as shown in Figure 2.6
Figure 2.6 Conceptual Framework
Source: (Preliminary interpretation)
Conceptual framework indicates the relationship between independent variable
(information technology usage) and dependent variable (customer acceptance) at
GTBank, Kigali, Rwanda.
2.5.1 Independent Variables
These include information technology used in the bank (use of Internet banking, use of
mobile banking, use of ATM). These are technologies through which customers use to
satisfy their needs on financial transactions in Guaranty Trust Bank, Kigali, Rwanda.
(i) Use of Internet banking technology
(Information Technology usage)
(i) Use of Internet banking technology
(ii) Use of Mobile banking technology
(iii) Use of ATM technology
Customer acceptance
Education level of customers
GTBank policies
Laws of Rwanda
Availability of information
technology
Intervening Variables
Independent Variables Dependent Variable
39
Technology provided by GTBank through which customers perform banking activities
via Internet (online banking). This technology would offer customers every service
traditionally available through local branches of GTBank, including accepting deposits,
paying interest on savings and many other services. Therefore successful customer
acceptance of banking technologies in GTBank Kigali Rwanda depended on Internet
banking usage. Measuring the customers’ perception towards technology acceptance
included ease of use and frequency of use. Data was collected using structured
questionnaire and interview guide for ebanking staff and branch managers.
(ii) Use of mobile banking technology
A technology that provided by banks were customers use phones or cellular device to
perform financial transactions; monitoring account balances, transferring funds between
accounts, bill payments and locating ATM. Operates across all major mobile providers
through one of three ways: SMS messaging; mobile web; applications developed for
iPhone, android or Blackberry devices; mobile text and alert. Therefore successful
customer acceptance of banking technologies in GTBank Kigali Rwanda depended on
mobile banking usage. Measuring the customers perception towards technology
acceptance included ease of use and frequency of use. Data was collected using
structured questionnaire and interview guide for ebanking staff and branch managers.
(iii) Use of ATM technology
The ATM technology is an electronic banking outlet which allows customers to complete
basic transactions without the aid of a branch representative or teller. There are two
primary types of ATMs; basic units allow the customer to only withdraw cash and
receive a report of the account’s balance. Complex machines accept deposits, facilitate
credit card payments and report account information. Therefore successful customer
acceptance of banking technologies in GTBank Kigali Rwanda depended on ATM
usage. Measuring the customers’ perception towards technology acceptance included
ease of use and frequency of use. Data was collected using structured questionnaire and
interview guide for ebanking staff and branch managers.
40
2.5.2 Dependent Variable
Customer acceptance of banking technologies refer to the levels (high, medium and low)
of acceptance in usage of banking technologies. In other words, technology acceptance is
measured by the Behavioral Intention (BI) of using the technology therefore customer
acceptance levels of Guaranty Trust Bank, Kigali, Rwanda depended on banking
technologies usage. Measuring the customers perception towards technology acceptance
included ease of use and frequency of use. Data was collected using structured
questionnaire for customers and interview guide for ebanking staff and branch managers.
2.6 Summary
This chapter covered the introduction of the literature review, theoretical literature;
Information Technology in Banking, determinates of most used banking technologies,
theoretical framework, empirical literature review ; Internet, mobile and ATM, customer
acceptance , critical review and research gap and conceptual framework. The research
methodology used in this study is covered in the next chapter.
41
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
This chapter provides details of the research methodology to be used. The research
design, target population, sample size, sampling technique and data collection
instruments, administration of data collection instruments was covered. Validity and
reliability, data analysis procedures, ethical consideration and summary were discussed.
3.1 Research Design
This study used a case study research design. A case study enabled field research for in -
depth analysis of the research problem in the chosen study location. This research design
was chosen because it was perceived to be most suitable in clarifying a set of technology
usage measures, why they applied, how they impact user acceptance levels and with what
result, in the context of GTBank.
3.2 Target Population
The target population for this study was 20,335 customers who used either ATM, Internet
banking or Mobile banking technologies, 3 e-banking staff and five branch managers of
GTBank, Kigali Rwanda. This number covered all GTBank Kigali Rwanda branches
since banking technologies are centralized and are not branch specific, (Jean Paul
Niyomugabo , Personal communication, 14 January 2016).
3.3 Sample Design
Sample design involved sample size determination from target population, followed by
the application of simple random sampling and purposive sampling techniques
respectively.
3.3.1 Sample Size
For determining of the sample size of customers using GTBank technologies, Yamane’s
(1967) simplified formula was used as cited by Israel (Israel, 2013) see Table 3.1.
42
Source: Israel (2013).
Where n was the sample size, N was the population and e was the sampling error. The
confidence level considered was 95%.
With N=20,335 customers; e=5%; considering the confidence level of 95%; n was equal
393 customers.
Table 3.1 Sample size Determination for Customers
Category of respondents Target population Sample
sizes
Sample technique used
Customers who used either
Automated Teller Machines
(ATM), Mobile banking or
Internet banking
20,335
393
Simple Random Sampling
e-banking staff 3 3 Purposive Sampling
Branch managers 5 5 Purposive Sampling
TOTAL 20,343 401
Source: Preliminary Interpretation
3.3.2 Sampling Techniques
The study employed simple random and purposive sampling techniques respectively.
Simple random sampling was considered whereby each individual was chosen entirely by
chance and each member of the population had an equal chance of being included in the
sample. Purposive sampling was considered because of the unique responsibilities of the
respondents (staff from ebanking and branches).
3.4 Data Collection Methods
Data collection involved primary and secondary data. The data collection included data
instruments, administration of data collection instruments, reliability and validity.
43
3.4.1 Data Collection Instruments
Primary data sources included customers of the banking technologies, staff of e-business
department and branch managers were targeted by the study. Structured questionnaires
were administered to customers and interview guides were used to conduct interviews
with e-banking staff and branch managers. Questionnaires were considered because they
were less costly, used less time, required less administration effort that was inherent in
instruments like interviews and useful in obtaining objective data (Marshall &
Rossman, 2006). Furthermore, questionnaires included standardized answers that made it
simpler to compile data. Among the closed ended questions were the use of Likert scales.
Likert scale of 5 to 1 was used. 5 = Strongly agree 4= Agree 3 = Not sure 2 = Disagree
and 1= Strongly disagree. Refer to (Appendices B and C).
3.4.2 Administration of Data Collection Instruments
Structured questionnaires were distributed to the branch customers who used banking
technologies and an interview guide was used to conduct interviews with the e-banking
staff and branch managers of GTBank, Kigali, Rwanda. Branch managers and e-banking
staff were selected because they carried out the daily operations and they were more
familiar with the usage of banking technologies.
3.4.3 Pilot Study
A pilot study is a small scale preliminary study conducted in order to evaluate feasibility,
time, cost, adverse events, and effect size (statistical variability) in an attempt to predict
an appropriate sample size and improve upon the study design prior to performance of a
full-scale research project. It was therefore advisable to conduct a pilot study prior to full
scale research in order to eliminate any weaknesses that could have arisen during data
gathering (Kothari, 2012).
The objective of conducting the pilot study was to check on correctness and the clearness
of the questions in the instruments, the language used to construct the questions and the
importance of the information which is required. The pilot test was conducted with the
44
help of 5 technology customers at I&M Bank who use the bank’s information technology.
Interview guide was pretested by means of content analysis. The results of the pilot study
were used to modify the data collection tool to make it more understandable and user–
friendly to the respondents as well as more effective in collecting the intended data to the
targeted respondents.
3.4.4 Reliability
According to Fraenkel, Wallen & Hyun (1993), reliability is the degree to which a
questionnaire or any measurement method consistently produces the same results on
repeated experiments in different studies. Reliability of the study ensures errors in the
study are minimized. Firstly to ensure that the content of the questionnaires were valid
and reliable, professionals who have knowledge in the area of study were consulted.
Their evaluations were included in order to have reliable instruments.
Table 3.2 Reliability statistics for pilot study of 5 respondents
Categories Number of Items Cronbach’s Alpha value
Customer usage of information
technology provided by GTBank
4 0.833
Customer acceptance in using
information technology provided
by GTBank
12 0.856
Effect of information technology
usage on customer acceptance at
GTBank
3 0.757
Source: Preliminary investigation
Table 3.2 shows the value of Cronbach’s Alpha coefficients for the questionnaire. For
usage of information technology it was noticed that the Cronbach’s Alpha value was
equal to 0.853 for 4 items. Then for acceptance in using information technologies the
Cronbach’s Alpha was equal to 0.856 for 12 items in the questionnaire. Regarding the
effect of information technology usage on customer acceptance at GTBank, the
Cronbach’s Alpha value was equal to 0.757. The results of Cronbach’s Alpha coefficients
45
showed that all the sections of the questionnaire were acceptable, reliable and valid
because they were greater than 0.5 (Hamdan, Badrullah & Shahid, 2011).
3.4.5 Validity
It was necessary to evaluate the research instruments using content validation, in
collaboration with an expert in connecting logical setting of questions. The validity of
the instrument was measured by calculating the valid coefficient (CVC) that equals to
total number of valid items divided by the total of items; CVC = valid Items / Total
Items , CVI of customers = 11 / 12 = 0.92. Validity is the most critical condition and
can be referred to as the extent or degree to which a test measures what it was intended
to measure and performs as it is planned to perform. As argued by Amin (2005); the
questionnaires were considered to be valid when the maximum content index was at
least 0.7.
3.5 Data Analysis Procedure
This is the process of categorizing, transforming and modelling data with the purpose of
making recommendations, generalizations and conclusions. The filled-in questionnaires
were edited for consistency. Descriptive analysis techniques were used in consistence
with the research design. Statistical Package for Social Sciences (SPSS 16.0) was the tool
chosen for quantitative data analysis. Quantitative data was coded to enable the responses
to be grouped into categories prior to data entry. Descriptive statistics such as
frequencies, percentages, weighed mean and standard deviation were used mainly to
summarize the data. Likert, scales were analysed using weighted means and standard
deviation. The relationship between the independent variables and dependent variables
was determined using multiple regression analysis. Tables were used in presenting the
analysed data. Data was categorized relevant thematic areas and analysis, thereof, based
on the prevalence of the themes and subthemes in addition to their relevance to the topic.
The regression model that was used to test the relationship between the variables were
based on the following stochastic equation:
Y = a0 + b1 X1 + b2 X2 + … + bn Xn+ ε
Y = a + b1 X1 + b2 X2 + b3 X3+ ε
46
Y = a + b1 (use of Internet Banking technology) + b2 (use of Mobile Banking technology)
+ b3 (use of ATM technology)+ ε
Where Xn referred to the independent variable and Y the dependent variable; a and bn
were the coefficient parameters and ε is the error term. Qualitative data emanating from
the interview guide was analyzed using content analysis (Kothari, 2012). Qualitative
analysis included content analysis of information obtained using interview guides. The
value obtained was used to generate research reports, suggestion and conclusions
(Mukuru, 2015).
3.6 Ethical Considerations
The study ensured it adhered to ethical behavioral culture by ensuring the quality, privacy
and integrity of information provided by the respondents. Confidentiality and anonymity
of respondents was respected for all information provided. The data collected was
provided on voluntary basis and the respondents were included based on their willingness
to participate. Information received from respondents was treated with highest level of
confidentiality and the results were used for academic purposes only.
47
CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSSION
4.0 Introduction
This chapter presents the analysis and interpretation of data collected for this study. It
serves as a tool to measure the objectives and the results obtained at field. The chapter
was divided into four sections: demographic characteristics of sampled respondents, the
usage of banking technologies, the customer acceptance in using technologies and effect
of usage of information technologies on customer acceptance at Guaranty Trust Bank,
Kigali, Rwanda.
4.1 Demographic Characteristics of Respondents
The general information on the respondents of the study included; age, education level,
gender, language spoken and experience of technology usage by respondents. These
demographic characteristics were considered to be significant because they helped to
understand the characteristics of customers of GTBank. A total of 401 questionnaires
were distributed to the sampled respondents, according to the proposed and approved
plan. Nevertheless, 385 respondents completed and returned the questionnaires leading to
a 96% rate of returns. This proportion was considered sufficient to proceed with the
analysis and subsequent interpretation of data.
4.1.1 Age Distribution of Respondents
Knowledge of the age of customers that who used information technology was important.
Table 4.1 shows the age distribution of respondents.
48
Table 4.1 Age distribution of respondents
Age (years) Frequency Percent (%)
18 - 25 65 16.88
26 – 35 186 48.31
36 - 45 94 24.42
46 and above 40 10.39
Total 385 100.00
Source: Primary data
Figure 4.1 Age distribution of respondents
Respondents
Age
From Table 4.1 also indicated in Figure 4.1, it was found that majority of the respondents
who used information technology were in the age group of 26-35 (48.31 %). The study
also found that the least number of respondents were in age group of 46 and above
(10.39%). Furthermore, it can also be observed that majority of the respondents based on
questionnaire were between 26 and 35 years (48.31%). Therefore this category of
respondents was the most involved in information technology usage at GTBank.
65
186
94
40
385
16.88 48.31
24.42 10.39
100
0
50
100
150
200
250
300
350
400
450
18 - 25 26 – 35 36 - 45 46 and
above
Total
Frequency
Percent (%)
49
4.1.2 Gender distribution
Table 4.2 indicates the distribution of respondents based on their gender.
Table 4.2 Gender distribution of respondents
Gender Frequency Percent (%)
Male 203 52.73
Female 182 47.27
Total 385 100.00
Source: Primary data
From Table 4.2, males comprised a slightly greater proportion (52.73%) of information
technology users compared to females (47.27%). These proportions were generally
perceived to be roughly within the same range of similarity and comparability.
4.1.3 Education Level
Normally an effective information technology usage depends on educational level of
customers. Table 4.3 shows the distribution of GTBank customers according to their
educational level.
Table 4.3 Highest education level of respondents
Highest Educational Level Frequency Percent (%)
High School 277 71.94
Undergraduate 83 21.56
Graduate 19 4.94
Other 6 1.56
Total 385 100.00
50
Source: Primary data
From Table 4.3, the highest education level of respondents indicated that 277 out of 385
respondents (71.94%) had high school level of education. University graduates were the
minority (26.50%).
4.1.4 Language Proficiency Distribution of Respondents
The respondent’s proficiency in language used to interact with the information
technology was essential. Table 4.4 shows the language proficiency distribution of
respondents.
Table 4.4 Language proficiency of respondents
Language Frequency Percent (%)
Kinyarwanda 307 79.74
French 24 6.23
English 51 13.25
Others 03 0.78
Total 385 100.00
Source: Primary data
From Table 4.4, it shows that 307 (79.74 %) respondents were found to be proficient in
Kinyarwanda language. This was followed by English language.
4.1.5 Experience of Information Technology Usage
Sampled Customers of GTBank were asked to indicate how long they had used
information technology provided by the bank for various transactions. Table 4.5 provides
a summary of information obtained:
51
Table 4.5 Experience of customer in usage of information technology
Years of experience N Observed
Frequency
Percentage
Less than 1 385 74 (19.22%)
1-2 385 299 (77.66%)
Above 2 385 12 (3.12%)
Source: Primary data
From Table 4.5, findings showed that the majority 299 (77.66%) had one to two years’
experience in using information technology provided by GTBank. Information
technology usage was high, thus indicating high customer acceptance.
4.2 Usage of Information Technology
Table 4.6 shows a summary of how often respondents used the information technology
provided by GTBank.
Table 4.6 How often Respondents Used the Technologies at GTBank
Technologies N Very often
5
Often
4
Some time
3
Rarely
2
Never
1
Weighted
Mean
Std.
Dev.
Internet
Banking
385 0
(0%)
0
(0%)
270
(70.13%)
106
(27.53%)
09
(02.34%)
2.68
0.516
Mobile
Banking
385 367
(95.32%)
18
(4.68%)
0
(0%)
0
(0%)
0
(0%)
4.95 0.211
Automated
Teller
Machine
385
155
(40.26%)
230
(59.74%)
0
(0%)
0
(0%)
0
(0%)
4.40
0.491
52
(SD <0.5 or close to zero -Respondents responses were crowded around the weighted
mean), (SD >0.5 or high -Respondents responses were dispersed from the weighted
mean) . Source: Primary data
In Table 4.6, it was found that the weighted mean for Internet banking usage was 2.68.
This meant that majority of the respondents selection fell between sometime and rarely.
The standard deviation for this attribute was 0.516. This meant that there was a general
consensus (i.e. unanimity) with very few divergent answers among the respondents.
It was also found that the weighted mean for Mobile banking usage was 4.95. This meant
that majority of the respondents’ selection fell between very often and often. The
standard deviation was 0.211, meaning that respondents were generally in agreement,
without divergent views.
In addition, it was found that the weighted mean for automated teller machine usage was
4.40. This meant that majority of the respondents’ selection also fell between very often
and often. The standard deviation was 0.491 and this meant that respondents were
generally in agreement without divergent views.
Table 4.7 Factors that promote the usage of information technology in GTBank
Factors N Respondents Percentage (%)
Reduced Time of Transactions 385 314 81.16
Cost effectiveness 385 298 77.40
Ease of use 385 322 83.64
Technology Know - how 385 269 76.88
Source: Primary data
Table 4.7 shows that factors that promote usage of information technology in GTBank,
included Reduced Time of Transactions, Cost effectiveness, Ease of use, and Technology
Knowhow. Respondents confirmed this with above 76% votes across the board.
53
Table 4.8 Ranking of preference of information technology provided by GTBank
Information
Technologies
N Best
1
Next
2
Last
3
Weighted
mean
Std.
Dev.
Use ATM debit
Card service
385 321
(83.38%)
61
(15.84%)
3
(0.78%)
1.17 0.400
Use Internet
banking transfer
& Utility services
385 271
(70.39%)
109
(28.31%)
05
(1.30%)
1.31 0.490
Use Mobile
transfer & utility
services
385 335
(87.01%)
43
(11.17%)
07
(1.82%)
1.15 0.404
(SD <0.5 or close to zero -Respondents responses were crowded around the weighted
mean), (SD >0.5 or high -Respondents responses were dispersed from the weighted
mean). Source: Primary data
In Table 4.8, it was found that the weighted mean for use ATM debit card service was
1.17. This meant that majority of the respondents selection fell between best and next.
The standard deviation for this attribute was 0.400. This meant that there were very few
divergent answers among the respondents.
It was also found that the weighted mean for use internet banking transfer and utility was
1.31. This meant that majority of the respondents’ selection fell between best and next.
The standard deviation was 0.490. This meant that there were very few divergent answers
among the respondents.
In addition, it was found that the weighted mean for use mobile transfer and utility
services was 1.15. This meant that majority of the respondents’ selection also fell
between best and next. The standard deviation was 0.404 and this meant that there were
very few divergent answers among the respondents.
54
4.3 Customer Acceptance in Using Information Technology Provided by
GTBank
The Tables 4.9, 4.10 and 4.11 indicated customer acceptance of information technology
provided by GTBank.
Table 4.9 Views of customers regarding ATM at GTBank
Technology
Acceptance
ATM
N Strongly
Agree
5
Agree
4
Neutral
3
Disagree
2
Strongly
Disagree
1
Weighted
mean
Std.
Dev.
Accomplish
work easier
385 253
(65.71%)
97
(25.19%)
0
(0%)
26
(6.75%)
9
(2.34%)
4.45 0.625
Easy to use 385 298
(77.40%)
77
(20.00%)
0
(0%)
8
(2.08%)
2
(0.52%)
4.72 0.967
Login/Sign
off not easy
385 10
(48.83%)
65
(45.19%)
41
(1.30%)
81
(2.86%)
188
(2.60%)
2.03 0.850
Use it
without
written
Instruction
385 243
(63.12%)
142
(36.89%)
0
(0%)
0
(0%)
0
(0%)
4.63 0.483
Recommend
it to a friend
385 309
(80.26%)
61
(15.84%)
08
(2.08%)
03
(0.78%)
04
(1.04%)
4.74 0.639 0.639
(SD <0.5 or close to zero -Respondents responses were crowded around the weighted
mean), (SD >0.5 or high -Respondents responses were dispersed from the weighted
mean). Source: Primary data
Table 4.9 indicates, weighted mean corresponding to accomplishing work easier was
found to be 4.45, with standard deviation of 0.625. This meant that in line with this
55
attribute, the views of customers fell between strongly agree and agree. Evidently, there
were respondents with divergent opinions on the same.
Weighted mean corresponding to easy to use was found to be 4.72 and with this attribute,
the views of customers fell between strongly agree and agree. The standard deviation was
0.967, which meant that respondents were in agreement with few differing views.
Also weighted mean for login/sign off not easy was 2.03 with standard deviation 0.850.
The opinions of respondents fell between Neutral and disagree with few differing views.
Weighted mean corresponding to use it without written Instruction was found to be 4.63
and with this attribute, the views of customers fell between strongly agree and agree. The
standard deviation was 0.483 which meant that respondents were in agreement with few
differing views.
Lastly weighted mean corresponding to recommend it to a friend was found to be 4.74
and this shows views of respondents fell between strongly agree and agree. The standard
deviation was 0.639 which meant that respondents were in consensus with few differing
opinions.
Table 4.10 Views of customers regarding Internet Banking at GTBank
Technology
Acceptance
Internet
Banking
N Strongly
Agree
5
Agree
4
Neutral
3
Disagree
2
Strongly
Agree
1
Weighted
mean
Std.
Dev.
Accomplish
work easier
385 20
(5.19%)
11
(2.86%)
308
(80.00%)
35
(9.09%)
11
(2.86%)
2.98 0.643
Login/Sign
off not easy
385 92
(23.90%)
191
(49.61%)
89
(23.12%)
13
(3.38%)
0
(0%)
3.94 0.777
Lack clear
guidelines
385 0
(0%)
0
(0%)
299
(77.67%)
75
(19.48%)
11
(2.86%)
2.75 0.496
56
Use it
without
written
Instruction
385 0
(0%)
0
(0%)
207
(53.77%)
172
(44.68%)
06
(1.56%)
2.52 0.530
Recommend
it to a friend
385 0
(0%)
0
(0%)
0
(0%)
358
(92.99%)
27
(7.01%)
1.93 0.256
(SD <0.5 or close to zero -Respondents responses were crowded around the weighted
mean), (SD >0.5 or high -Respondents responses were dispersed from the weighted
mean). Source: Primary data
Table 4.10 indicates, weighted mean corresponding to accomplishing work easier was
found to be 2.92, with standard deviation of 0.643. This meant that in line with this
attribute, the views of customers fell between Neutral and disagree. Obviously, there
were respondents with divergent views on the same.
Weighted mean for login/sign off not easy was 3.94 with standard deviation 0.777. The
opinions of respondents fell between agree and neutral with differing views.
Weighted mean corresponding to Lack clear guidelines was found to be 2.75 and the
standard deviation was 0.964 with this attribute, the views of customers fell between
neutral and disagree.
Weighted mean corresponding to use it without written Instruction was found to be 2.52
and with this attribute, the views of customers fell between neutral and disagree. The
standard deviation was 0.530.
Lastly weighted mean corresponding to recommend it to a friend was found to be 1.93
and this shows views of respondents fell between disagree and strongly disagree. The
standard deviation was 0.256. With all above attributes regarding Internet Banking, found
that Internet banking was the least used information technology.
57
Table 4.11 Views of customers regarding Mobile Banking at GTBank
Technology
Acceptance
Mobile
Banking
N Strongly
Agree
5
Agree
4
Neutral
3
Disagree
2
Strongly
Agree
1
Weighted
mean
Std.
Dev.
Accomplish
work easier
385 322
(83.64%)
54
(14.03%)
04
(1.04%)
0
(0%)
05
(1.30%)
4.79 0.587
Absence
immediate
connection
to the
service
385 379
(98.44%)
06
(1.56%)
0
(0%)
0
(0%)
0
(0%)
4.98 0.124
Login/Sign
off not easy
385 0
(0%)
0
(0%)
0
(0%)
317
(82.34%)
68
(17.67%)
1.82 0.384
Use it
without
written
Instruction
385 378
(98.18%)
07
(1.82%)
0
(0%)
0
(0%)
0
(0%)
4.98 0.134
Recommend
it to a friend
385 380
(98.70%)
05
(1.30%)
0
(0%)
0
(0%)
0
(0%)
4.99 0.113
(SD <0.5 or close to zero -Respondents responses were crowded around the weighted
mean), (SD >0.5 or high -Respondents responses were dispersed from the weighted
mean). Source: Primary data
Table 4.11 indicates, weighted mean corresponding to accomplishing work easier was
found to be 4.79, with standard deviation of 0.587. This meant that in line with this
attribute, the views of customers fell between strongly agree and agree. It is true, there
were respondents with a few divergent views on the same.
58
Weighted mean corresponding to absence immediate connection to the service was found
to be 4.98 and with this attribute, the views of customers fell between strongly agree and
agree. The standard deviation was 0.125, which meant that respondents were in
agreement with few differing views.
Also weighted mean for login/sign off not easy was 1.82 with standard deviation 0.384.
The opinions of respondents fell between disagree and strongly disagree without
differing views.
Weighted mean corresponding to use it without written Instruction was found to be 4.98
and with this attribute, the views of customers fell between strongly agree and agree. The
standard deviation was 0.134.
Last but not least, weighted mean corresponding to recommend it to a friend was found to
be 4.99 and this shows views of respondents fell between strongly agree and agree. The
standard deviation was 0.113 which meant that respondents were in consensus without
differing opinions.
4.4 How Customer Acceptance was Affected by Information technology
at GTBank
Multiple linear regression was used to model the relationship between several
explanatory variables and a response variable by fitting a linear equation to observed
data.
Y = b0 + b1 X1 + b2 X2 + …………………… + bk Xk+ ε
Independent variable: Xk, and Coefficient: bk, Unknown factor: ε, and Dependent
variable: Y
Y was: Customer acceptance
X1: Automated Teller Machine, X2: Mobile banking, X3: Internet banking.
59
Table 4.12 Multiple Regression Analysis Output
Model B Std. Error Beta T Sig.
1 (Constant) -5.320 0.643 -8.269 0.000
Automated teller
machine 0.926 0.058 0.360 16.053 0.000
Mobile banking 0.144 0.133 0.024 1.080 0.281
Internet banking 1.657 .063 .678 26.453 0.000
a. Dependent variable: Customer Acceptance
Source: Primary data
Y = b0 + b1 X1 + b2 X2 + b3 X3+ ε
Y = -5.320 + 0.926 Automated teller machine + 0.144 Mobile banking + 1.657 Internet
banking + 0.47346
Table 4.13 and also in pie chart, indicated model summary from SSPS analysis.
Table 4.13 Regression model summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 0.927a 0.860 0.859 0.47346
a. Predictors: (Constant), Internet banking, Mobile banking, automated teller machine
Source: Primary data
The correlation coefficient R measures the strength between two variables. When R is
close to 1 the linear correlation is described as strong positive. When R is close -1 the
linear correlation is described as strong negative. The R-squared value, denoted by R2, is
the square of the correlation. It measures the proportion of variation in the dependent
variable that can be attributed to the independent variable. The study found the
correlation coefficient R = 0.927 and P-value = 0.001. This meant that there was a very
strong, positive, multiple correlation between independent variables including: Internet
banking, Mobile banking, automated teller machine and dependent variable (customer
60
acceptance). The P value<0.05 signified that the correlation was found to be significant at
the 95% confidence level. It also found that the coefficient of determination R2
= 0. 859.
This meant that 85.90% of total variation in Y could be explained by the stochastic model
developed relating x (independent variables) to Y (dependent variable). The remaining
14.10%, of the variability in Y was due to unexplained factors that were beyond the
control of the research.
4.4.1 Findings from Interview Guide
The respondents of the interview were GTBank staff in charge of e-banking and branch
managers respectively. Questions asked, were answered freely and content analysis of the
same was done as follows:
(a) Interview for e-banking staff
I. What are the main measures put in place to address the following problems in the using
ATM machine?
a) Cards get blocked often
All three staff pointed out that customers forgot their password identification number and
tried many times leading to the blocking of cards. Measures put in place required
customers to fill the form requesting password reset and unlocking card. All blocked
ATM cards were collected from the machine and taken to the customer care officer’s
desk. Thereafter, customers got back their ATM cards from the customer care officer of
that branch, after appropriately identifying themselves.
b) Machines running out of cash often during weekends
Two out of three staff cited that some branches did not open during weekends and this
increased the number of customers who used ATM cards for withdrawals. This led the
machines to run out of cash. Monitoring team was put in place. One of the three staff had
no answer.
61
c) Reduction of balance without cash payment
Respondents admitted that this happened, however customers were refunded their money
after confirming the claim and cross-checking it.
Table 4.14 measures put in place to address problems in the using ATM machine
ATM problems e-banking staff response
a) Cards get blocked often Customers got back their ATM cards from the customer
care officer of the branch, after appropriately identifying
themselves.
b) Machines running out
of cash often during
weekends
Monitoring team was put in place.
c) Reduction of balance
without cash payment
Customers were refunded their money after confirming
Source: Primary data
2 Which of the following technology is most used by customers?
a) ATM
ATM was the second most used technology, based on transaction volume.
b) Internet Banking
Internet banking was the third most used technology based on transaction volume.
c) Mobile Banking
Mobile banking was the first most used technology based on transaction volume.
3. What are the problems reported by customer in using technologies?
a) ATM
Locked cards and resetting of passwords.
62
b) Internet Banking
Customers doubted security of their transactions due to prevalence of cybercrimes.
c) Mobile Banking
Password reset.
4. Does the company provide regular clarifications to customers, helping them to
prevent being victimized by robbery or identity theft?
If yes how?
All respondents replied in the affirmative and added that, transaction alerts are sent to
customers.
(b) Interview for branch managers
(i) Do you have any information technology policy in place?
All the five branch managers replied in agreement that there was an information
technology policy in their respective organizations.
(ii) How was the information technology policy used?
The policy dealt with the provision of information technology resources by GTBank and
the associated responsibility of authorized users when accessing these information
technology resources. These resources included, but were not limited to, the Bank
network, computer systems and software, access to the Internet, electronic mail,
telephony and related services. This was confirmed by four branch managers and one
branch manager had no comment.
(iii) How often do you update information technology policy?
All respondents admitted that information technology at GTBank was updated on
quarterly basis.
63
(iv) How is customer training conducted on Information technology usage?
All respondents said that training was provided orally whenever customers visited
branches of GTBank.
(v)What are your suggestions and recommendations for improving information
technology usage?
The respondents suggested that network downtime incidences should be resolved;
Information technology used by GTBank was based on a fully functional network and
when connectivity was broken, it inconvenienced both staff as well as customers.
Another suggestion was customer training on information technology usage guidelines
and security.
In summation, the implication was that the rationale was sufficient as the interview
stands. It had enough value to be included in a collection of study and influence of the
different practices in GTBank.
64
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.0 Introduction
This chapter provides a summary of key findings on the study of information technology
used at GTBank and how it influences customer. Finding on each objective were arrived
at and a conclusion made. Recommendations and suggestions for further studies were
derived from the findings study.
5.1 Summary of Findings
The study was conducted at GTBank and the following were the key findings obtained.
5.1.1 Usage of Information Technology
Objective one was to assess the usage of Information technology by customers at
GTBank Kigali, Rwanda. Findings in Table 4.6 showed that Mobile banking and ATM
with 4.95 and 4.40 weighted mean respectively. This indicated that were more used than
internet banking. Table 4.7 Mobile banking and internet banking were secured than
ATM, Table 4.8 revealed the factors that promotes usage of information banking
technologies; reduced time of transactions, cost effectiveness, ease of use, technology
Knowhow, 100% confirmed by GTBank customers. Tables 4.9, 4.10 and 4.11 indicated
that ATM and Mobile banking were more used than internet banking due to their
features.
5.1.2 Customer Acceptance in Using Information Technology Provided
by GTBank
The second objective was to assess Customer Acceptance in using the information
technology. Tables 4.9 revealed that ATM features were more accepted compared to
Internet banking and Mobile banking features. Table 410 showed that Internet banking
due to its difficult technological knowhow requirement, customer can not recommend it
to friends. Table 4.11 showed that Mobile banking was the most used information
65
technology, as indicate by weighted mean and customer confirmed that it had convenient
features for use.
5.1.3 How Customer Acceptance was Affected by Information
technology at GTBank
The last objective was concerned with determination of the effect of Information
technology on Customer Acceptance at GTBank Kigali, Rwanda. Multiple regression
analysis was carried out to determine the relationship between the Information
technology usage (independent variable) and Customer acceptance (dependent variable)
at GTBank Kigali, Rwanda.
Table 4.13 showed that multiple correlation coefficient R = 0.927 for Information
banking technologies used by customers in GTBank Kigali, Rwanda indicates a good
level of prediction.
Furthermore, it was found that coefficient of determination R 2= 0.859, meaning that
85.90% of total variation in customer acceptance could be explained by the relationship
between information banking technologies and customer acceptance at in GTBank Kigali
Rwanda and the remaining total variation of 14.10% are unpredictable due to factors
beyond the research control.
5.2 Conclusion
The study concluded that Mobile banking and ATM were the most used than Internet
banking due to its inconvenient features to customers. Internet banking and Mobile
banking, however were found to have been secure than ATM. Mobile banking was more
preferable than internet banking and ATM.
The study confirmed that Mobile banking, ATM was more accepted compared to internet
banking. Internet banking required technological Know-how. Inconvenient features
which required a certain level of education hence for layman was not easy.
From R = 0.927 and R2 = 0.859, there was a very strong, positive, correlation between
information technology usage and customer acceptance as was carried out in GTBank
66
Kigali, Rwanda. The P-value was found to be 0.001 signifying that the correlation was a
statistically significant one.
5.3 Recommendations
Subsequently, these were the recommendations to GTBank Kigali, Rwanda:
In the short term, it is recommended to GTBank Kigali, Rwanda that: more training of
customers and awareness skills about internet banking technology should be provided to
customers. Consistent maintenance of ATM machines, due to persistent break down and
lack of cash on query.
In the medium term, The management of GTBank should plan upgrading existing
information technology to fit to new requirements like agency banking features.
In the long term, the management should formulate a better information technology
policy and laws regulating the usage of information technology. Provision of information
technology security awareness, to increase trust of customer to use information
technology.
5.4 Suggestions for Further Study
Further studies should be carried out in line with the following aspects: the area of
information technology usage:
1. This having been a case study, a more general study should be carried out in other
Banks in Rwanda, to give a holistic picture of information technology usage and
customer acceptance in the banking sector in Rwanda.
2. A study should be carried out on influence of technological know-how of customers
in Internet banking usage.
3. A long term study should be carried out on the parameters of interest in this study but
taking into account the changing technology over a long period of time(namely a
longitudinal study).
4. Future studies should consider demographic factors for example age, population
density and average per capita income in order to provide a better idea of what kind
of technology based services to be offered in which locality.
67
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77
APPENDIX A: INTRODUCTION LETTER SHOWING RESEARCH
AUTHORIZATION
78
APPENDIX B: QUESTIONNAIRE FOR CUSTOMERS OF GTBANK
Dear respondent,
My name is John KWIZERA; I am a postgraduate student pursuing a Master’s Degree in
Information Sciences at Mount Kenya University, Kigali campus. The title of my study is
Information Technology usage and customer acceptance in the banking sector: a case
study of Guaranty Trust Bank, Kigali, Rwanda. Responses you will give remain strictly
confidential and findings shall be used only for academic purposes. I sincerely thank you
for taking time to fill in this questionnaire.
Demographic data (Please tick for answering)
Age (tick one option only)
a) 18 – 25
b) 26 – 35
c) 36 – 45
d) 46 and above
Highest education level (Tick one
option only)
a) High School
b) Undergraduate
c) Graduate
d) Other
Gender (Tick one option only)
a) Male
b) Female
Language spoken (You may tick more
than one option)
a) Kinyarwanda
b) French
c) English
d) Others
Experience of technology usage (tick one
option only)
a) Less than 1 year
b) 1-2 years
c) Above 2 years
79
[A] Customer usage of information technology provided by GTBank
i. How often do you use the following technologies in GTBank? (Tick (√) one option
only in each row)
Information technologies 5=Very
often
4=
Often
3=
Sometimes
2=
Rarely
1=
Never
Internet Banking technology
Mobile Banking technology
Automated Teller Machine(ATM)
technology
ii. Which factor promotes you to use the technology in GTBank? (You may tick (√)
more than one option)
iii. Rank the technology that serves you better than others as you use it (Tick (√) one
option only in each row)
Information technologies Best
No. 1
Next
No. 2
Last
No. 3
(a) Use ATM debit card service
(b) Use Internet banking
transfer & Utility services
(c) Use mobile transfer &
Utility services
iv. How frequently do you use the following information technologies per month? (Tick
(√) one option only in each row)
(a) Reduce Time of Transactions
(b) Cost effectiveness
(c) Ease of use
(d) Technology Know - how
80
Information technologies Nil
1 to 3
3 to 10
Over 10 times
(a) ATM
(b) Internet banking transfer
(c) mobile transfer
[B] Customer acceptance in using information technology provided by GTBank
v. This section deals with customer acceptance by using technologies. (Please
answer the following questions by marking only one tick (√) in each row)
Technology acceptance
5=
Strongly
agree
4=
Agree
3=
Neutral
2=
Disagree
1=
Strongly
Disagree
ATM
It makes the things I want
to accomplish easier to
get done.
Easy to use
Login/Sign off are not
easy
I can use it without
written instructions.
I would recommend it to
a friend.
Internet Banking
Login/Sign off are not
easy
Lack of clear guidelines
It makes the things I want
to accomplish easier to
81
[C] Effect of information technology usage on customer acceptance at GTBank
vi. In your own opinion does the use of the following technologies affect
customer acceptance? (Tick one option only in each row)
Thank you for taking your time to respond the questions.
get done.
I can use it without
written instructions.
I would recommend it to
a friend.
Mobile Banking
Login/Sign off are not
easy
Absence immediate
connection to the service
It makes the things I want
to accomplish easier to
get done.
I can use it without
written instructions.
I would recommend it to
a friend.
Technologies 5=
Strongly
agree
4=
Agree
3=
Neutral
2=
Disagree
1=
Strongly
Disagree
ATM
Internet banking
Mobile banking
82
APPENDIX C: QUESTIONNAIRE FOR GTBANK CUSTOMERS
TRANSLATED INTO KINYARAWANDA
Mbanje Kugusuhuza,
Amazina yanjye ni John KWIZERA; Umunyeshuri mu cyiciro cya gatatu muri kaminuza
ya Mount Kenya University, Ishami rya Kigali. Umutwe w’ubushakashatsi ugira uti
“Information Technology usage and customer acceptance in the banking sector: a case
study of Guaranty Trust Bank, Kigali, Rwanda”. Ibisubizo muri butange biraguma ari
ibanga kandi bikoreshwe gusa ku mpavu zo kwiga. Mbaye mbashimiye kubwo umwanya
wanyu mufashe musubiza ibibazo.
Umwirondoro wawe (Shyira akamenyetso mudukubo (√) ku gisubizo wifuza)
Imyaka ufite(Shyira (√) ku gisubizo
kimwe)
e) 18 –
f) 26 –
g) 36 –
h) 46 no hejuru
Amashuri wize yose (Shyira (√) ku
gisubizo kimwe)
e) Amashuri yisumbuye
f) Impamyabushobozi Kaminuza
g) Impamyabushobozi ihanitse
h) Andi mashuri
Igitsina (Shyira (√) ku gisubizo kimwe)
a) Gabo
b) Gore
Indimi uvuga (Shyira (√) ku gisubizo
wifuza)
a) Ki
b) French
c) English
d) Izindi
Uburambe mu ikoreshwa ry’ikorana
buhanga (Shyira (√) ku gisubizo kimwe)
a) Munsi y’ umwaka 1
b) Hagati y’ imyaka 1-2
c) Hejuru y’ imyaka 2
83
[A] Ikoreshwa ry’ ikoranabuhanga ritangwa na GTBank
i. Ni kangahe ukoresha ikoranabuhanga rikurikira muri GTBank? (Shyira
akamenyetso (√) ku gisubizo wifuza kuri buri morongo utambitse)
Ikoranabuhanga 5=Kenshi
cyane
4=
Kenshi
3=
Rimwe na
rimwe
2=
Gake
ya
1=
Ntanari
mwe
Internet Banking technology
Mobile Banking technology
Automated Teller
Machine(ATM) technology
ii. Ni irihe koranabuhanga wizeye umutekano kurusha muri GTBank? (Shyira
akamenyetso (√) ku gisubizo wifuza kuri buri morongo utambitse)
Ikoranabuhanga 3=umutekano
uhagije
2=
umutekano
uringaniye
1=
umutekano
udahagije
Internet Banking technology
Mobile Banking technology
Automated Teller Machine(ATM)
technology
iii. Ni iyihe mpamvu igushishikaza gukoresha ikoranabuhanga rya GTBank? (Shyira
akamenyetso (√) ku gisubizo wifuza )
a) Igihe gito cyo kurikoresha
b) Ikiguzi gihendutse
c) Ikoreshwa ryoroshye
d) Ubumenyi buhambaye
84
iv. Tondeka iri koranabuhanga ukurikije iri kora neza kurusha (Shyira akamenyetso (√)
ku gisubizo wifuza kuri buri morongo utambitse)
Ikoranabuhanga iryambere
No. 1
irikurikiraho
No. 2
Irya nyuma
No. 3
(a) Gukoresha ATM
(b) Gukoresha Internet banking
transfer & Utility services
(c) Gukoresha mobile transfer
& Utility services
v. Ni kangahe ukoresha iri koranabuhanga mu kwezi? (Shyira akamenyetso (√) ku
gisubizo wifuza kuri buri morongo utambitse)
Ikoranabuhanga Zero
1 - 3
3 - 10
Inshuro 10
zirenga
(a) ATM
(b) Internet banking transfer
(c) mobile transfer
85
[B] Kwemera gukoresha ikoranabuhaga ritangwa na GTBank
vi. Aha ni ibijyanye no kwemeza ikoreshwa ry’ikoranabuhanga. (Shyira
akamenyetso (√) ku gisubizo wifuza kuri buri morongo utambitse)
Kwemera
ikoranabuhaga
5=
Ndabyemera
cyane
4=
Ndabyemera
3=
Simbizi
2=
Simbyemera
1=
Simbyemera
na gato
ATM
Rinyorohereza
ibyo nshaka
gukora
Riroroshye
gukoresha
Gufungura no
gufunga ntabwo
byoroshye
Narikoresha nta
mabwiriza
yanditse.
Narirangira
ishuti.
Internet Banking
Rinyorohereza
ibyo nshaka
gukora
Riroroshye
gukoresha
Gufungura no
gufunga ntabwo
byoroshye
Narikoresha nta
mabwiriza
yanditse.
Narirangira
86
[C] Igaruka ku ikoreshwa ry’ ikoranabuhanga no kuryemera muri GTBank
vii. Uko ubitekereza ikoreshwa ry’ ikoranabuhaga rigira ingaruka ku kwemerwa
kwaryo? (Shyira akamenyetso (√) ku gisubizo wifuza kuri buri morongo
utambitse)
Murakoze gusubiza ibibazo.
ishuti.
Mobile Banking
Rinyorohereza
ibyo nshaka
gukora
Riroroshye
gukoresha
Gufungura no
gufunga ntabwo
byoroshye
Narikoresha nta
mabwiriza
yanditse.
Narirangira
ishuti.
Ikoranabuhaga
5=
Ndabyemera
cyane
4=
Ndabyemera
3=
Simbizi
2=
Simbyemera
1=
Simbyemera
na gato
ATM
Internet banking
Mobile banking
87
APPENDIX D: INTERVIEW GUIDE FOR GTBANK E-BANKING STAFF
Questions about current information on technology usage
I. What are the main measures put in place to address the following problems in the using
ATM machine?
a) Cards get blocked often
b) Machines get out of cash often in weekends
c) Reduction of balance without cash payment
2 Which of the following technology is most used by customers?
a) ATM
b) Internet Banking
c) Mobile Banking
3. What are the problems reported by customer in using technologies?
a) ATM
b) Internet Banking
c) Mobile Banking
4. Does the company provide regular clarifications to customers, helping them to
prevent being victimized by robbery or identity theft?
If yes how?
If no, why?
Thank you for taking time to answer the questions in this interview.
88
APPENDIX E: INTERVIEW GUIDE FOR GTBANK BRANCH
MANAGERS
(i) Do you have any information technology policy in place?
(ii) How was the information technology policy used?
(iii) How often do you update information technology policy?
(iv) How is customer training conducted on Information technology usage?
(v) What are your suggestions and recommendations for improving information
technology usage?
Thank you for taking time to answer the questions in this interview.
89
APPENDIX F: CITY OF KIGALI SECTOR MAP
Source: (Kigali City, 2013)
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