IDENTIFYING THE ACCEPTANCE OF ONLINE BANKING SERVICES

AMONG UTHM STAFF IN PARTI RAJA

ATHIRAH IZZATI BINTI SHAMSURRI

A thesis submitted in

Fulfilment of the requirement for the award of the

Degree of Technology Management & Business

(Production & Operation) with Honors

Faculty of Technology Management & Business

Universiti Tun Hussein Onn Malaysia

JANUARY 2018

DECLARATION

I hereby declare that the work in this project report is my own except for quotations

and summary which have been duly acknowledged

Student : ………………………………………....

ATHIRAH IZZATI BINTI SHAMSURRI

Date : ………………………………………....

SUPERVISOR : …………………………………………

DR. YUNOS BIN NGADIMAN

ACKNOWLEDGEMENT

First of all, I would like to thanks to my supervisor’s, Dr. Yunos Bin Ngadiman from

the buttom of my heart, who is very kind, helpful and considerate throughout the

process of doing this research. Without guidance from him, this research would not be

completed successfully. He always gives opinion, support and motivate me in doing

the research. He also kindly provides me with many useful suggestions on the topic

related to my research.

Besides that, I would like to thanks to my parents, Shamsurri Bin Salleh and

Norzehan Binti Saril. Without their support, I may not be able continue my study and

overcome the problem during my study. Other than that, they always provide me with

financial support throughout the research. They also always support me when I am

doing this research. After that, I would also like to thanks to my friends that always

support and being there throughout the process. Without their moral support and

assistance, it would quite difficult for me in completing this research.

Finally, I would like to thank all the respondents (Academic Staff UTHM) who

involve in this research. I am very appreciated the contribution of all the respondents

of this research who are willing to spend their precious time to take part in this

research. Appreciation also goes to everyone who directly or indirectly in lending their

hands towards this research completion.

ABSTRACT

The aim of this paper is to identify the acceptance of online banking services among

Academic Staff UTHM in Parit Raja. The objectives for this research is to identify the

factors acceptance of online banking services among Academic Staff UTHM in Parit

Raja and to identify the relationship between the factors that drive the acceptance to

accept and use online banking services among Academic Staff UTHM in Parit Raja.

The questionnaires were distributed to 250 Academic Staff UTHM as a respondent in

Parit Raja. This research have been measured by considering about four main variables

that was, perceived usefulness, perceived ease of use, quality of the internet, and trust

towards intention to accept and use online banking services. The research construct

based on Technology Acceptance Model (TAM) and using the IBM Statistical

Package for Social Sciences (SPSS) Statistics Version 24 to analyzed the data.

Therefore, the result for this research presented that the perceived usefulness was the

main factor acceptance of online banking services among Academic Staff UTHM in

Parit Raja and the correlation test for each factors of accepatance was correlated with

intention to accept and use online banking services. Meanwhile, the null hypothesis

for this research was rejected and alternative hypothesis showed the significant effect

and acceptable result.

ABSTRAK

Kajian ini bertujuan untuk mengenal pasti penerimaan perkhidmatan perbankan dalam

talian antara staf akademik UTHM di Parit Raja. Objektif kajian ini adalah untuk

mengenal pasti faktor-faktor penerimaan perkhidmatan perbankan dalam talian antara

akademik staf UTHM Parit Raja dan mengkaji hubungan antara faktor-faktor yang

mendorong penerimaan untuk menerima dan menggunakan perkhidmatan perbankan

dalam talian antara akademik staf UTHM Parit Raja. Borang soal selidik diedarkan

kepada akademik staf UTHM iaitu sebanyak 250 borang soal selidik. Kajian ini diukur

dengan mengambil kira empat pemboleh ubah utama iaitu kegunaan dilihat, dilihat

mudah diguna, kualiti internet, dan kepercayaan terhadap hasrat untuk menerima dan

menggunakan perbankan dalam talian. Dalam kajian ini juga, pengkaji mengkaji

berdasarkan pada Tekonologi Penerimaan Model (TAM) digunakan dan IBM pakej

statistik untuk sains sosial (SPSS) versi 24 untuk menganalisis data. Oleh itu, hasil

kajian ini dibentangkan bahawa kegunaan dilihat adalah faktor utama penerimaan

perkhidmatan perbankan dalam talian antara akademik staf UTHM di Parit Raja dan

analisis korelasi bagi setiap faktor penerimaan dan korelasi dengan niat untuk

menerima dan menggunakan perkhidmatan perbankan dalam talian. Sementara itu,

hipotesis nol bagi kajian ini telah ditolak dan hipotesis alternatif menunjukkan kesan

ketara dan keputusan boleh diterima.

CONTENTS

TITLE i

DECLARATION ii

ACKNOWLEDGEMENT iii

ABSTRACT iv

CONTENTS vi

LIST OF TABLES xi

LIST OF FIGURES xiii

LIST OF ABBREVIATIONS xiv

CHAPTER 1 INTRODUCTION

1.1 Introduction 1

1.2 Research Background 3

1.3 Problem Statement 4

1.4 Research Questions 5

1.5 Research Objectives 5

1.6 Research Scope 6

1.7 Significant of Study 6

1.8 Research Methodology 6

1.9 Expected Outcome 7

1.10 Organization of Chapter 7

1.11 Summary 8

CHAPTER 2 LITERATURE REVIEW

2.1 Introduction 9

2.2 Online Banking 10

2.2.1 Electronic Banking 11

2.2.2 Internet Banking 12

2.3 Development of Online Banking in Malaysia 12

2.4 Advantages and Disadvantages of Online Banking

Services 13

2.5 Features and Types of Online Banking Services 14

2.5.1 Features of Online Banking Service 14

2.5.2 Types of Online Banking Services 15

2.6 How Online Banking Work 15

2.7 Medium to Use Online Banking 16

2.7.1 Automated Teller Machine (ATM) 16

2.7.2 Pc-Banking 17

2.7.3 Mobile Banking 17

2.8 Issues Related to Online Banking 18

2.8.1 Limited Ability to Access Internet and

Attitude 18

2.8.2 Trust 18

2.8.3 Phobias with New Technology and Difficult

To Change Medium Used 19

2.9 Technology Acceptance Model (TAM) 19

2.9.1 Factors Acceptance on Online Banking Services 20

2.9.1.1 Perceived Usefulness (PU) 21

2.9.1.2 Perceived Ease of Use (PEOU) 22

2.9.1.3 Quality of the Internet (QI) 23

2.9.1.4 Trust (TR) 23

2.10 Summary 24

CHAPTER 3 RESEARCH METHODOLOGY

3.1 Introduction 25

3.2 Research Flow Chart 26

3.3 Conceptual Framework and Hypothesis 27

3.4 Research Approach 28

3.4.1 Quantitative 28

3.5 Research Design 28

3.6 Research Sampling 29

3.6.1 Population of Study 29

3.6.2 Sampling Technique 29

3.7 Sample Size 30

3.8 Developing Questionnaires 31

3.9 Data Collection Method 32

3.9.1 Primary Source of Data 32

3.9.2 Secondary Source of Data 33

3.9.3 Data Collection 33

3.10 Pre-Test Questionnaires 33

3.11 Data Analysis 34

3.12 Summary 34

CHAPTER 4 DATA ANALYSIS AND RESULTS

4.1 Introduction 35

4.2 Respondent Background 35

4.2.1 Gender 36

4.2.2 Age 37

4.2.3 Status of Office 38

4.2.4 Frequency of use Online Banking 40

4.2.5 Types of Transaction Used 41

4.3 Reliability Analysis 43

4.3.1 Pre-Test Reliability for IV and DV 44

4.3.2 Actual Study Reliability 45

4.4 Descriptive Analysis 46

4.4.1 Descriptive Analysis: (PU) 47

4.4.2 Descriptive Analysis: (PEOU) 48

4.4.3 Descriptive Analysis: Quality of the

Internet (QI) 49

4.4.4 Descriptive Analysis: Trust (TR) 50

4.4.5 Descriptive Analysis: (IAU) 51

4.4.6 The Factor Acceptance of Online Banking

Services among Academic Staff UTHM 52

4.5 Analysis of Normality 53

4.5.1 Inferential Analysis 56

4.5.2 Spearman’s rho Correlation Test 57

4.6 Correlation Analysis 57

4.6.1 Correlation Between PU and IAU 58

4.6.2 Correlation Between PEOU and IAU 59

4.6.3 Correlation Between QI and IAU 60

4.6.4 Correlation Between TR and IAU 61

4.7 Summary 62

CHAPTER 5 DISCUSSION AND CONCLUSION

5.1 Introduction 64

5.2 Discussion 64

5.2.1 Objectives 1: The Factors Acceptance of

Online Banking Services among Academic

Staff UTHM in Parit Raja 65

5.2.2 Objectives 2: The Relationship between

Factors Acceptance and Intention to Accept

and Use Online Banking Services 65

5.3 Limitation of the Research 69

5.4 Recommendation for Further Research 69

5.5 Summary 70

REFERENCES 71

APPENDIX A QUESTIONNAIRE 76

VITA 81

LIST OF TABLES

1.1 List of Online Banking in Malaysia 2

3.1 Sample Size 31

4.1 Gender 36

4.2 Age 37

4.3 Status of Office 38

4.4 Frequency of use Online Banking 40

4.5 Types of Transaction Used 41

4.6 Cronbach’s Alpha and Internal Consistency 44

4.7 Reliability Test for Pre-Test 44

4.8 Reliability Test for Actual Study 45

4.9 Level of Mean Measurement 46

4.10 Descriptive Analysis for IV 1 – (PU) 47

4.11 Descriptive Analysis for IV 2 – (PEOU) 48

4.12 Descriptive Analysis for IV 3 – (QI) 49

4.13 Descriptive Analysis for IV 4 – (TR) 50

4.14 Descriptive Analysis for DV – (IAU) 51

4.15 The Factor Acceptance of Online Banking Services 52

4.16 Normality Test for Independent Variable 53

4.17 Normality Test for Dependent Variable 56

4.18 Strength of Correlation Coefficient Value 58

4.19 Correlation Between PU and IAU 59

4.20 Correlation Between PEOU and IAU 60

4.21 Correlation Between QI and IAU 61

4.22 Correlation Between TR and IAU 62

5.1 Hypothesis of Research 66

5.2 Summary for the Result of Hypothesis 67

LIST OF FIGURES

3.1 Research Flow Chart 26

3.2 Conceptual Framework 27

4.1 Gender 36

4.2 Age 38

4.3 Status of Office 39

4.4 Frequency of use Online Banking 40

4.5 Type of Transaction Used 42

4.6 IV_1 54

4.7 IV_2 54

4.8 IV_3 55

4.9 IV_4 55

4.10 DV 56

LIST OF ABBREVIATION

ATM - Automated Teller Machine

DV - Dependent Variable

FKAAS - Fakulti Kejuruteraan Awam dan Alam Sekitar

FKEE - Fakulti Kejututeraan Elektrik dan Elektronik

FKMP - Fakulti Kejuruteraan Mekanikal dan Pembuatan

FPTP - Fakulti Pengurusan Teknologi dan Perniagaan

FPTV - Fakulti Pendidikan Teknik dan Vokasional

FSKTM - Fakulti Sains Komputer dan Teknologi Maklumat

IAU - Intention to Accept and Use

IV - Independent Variable

OB - Online Banking

PEOU - Perceived Ease of Use

PU - Perceived Usefulness

QI - Quality of the Internet

SPSS - Statistical Package Social Science

TAM - Technology Acceptance Model

TR - Trust

UTHM - Universiti Tun Hussein Onn Malaysia

CHAPTER 1

INTRODUCTION

1.1 Introduction

Technological changes have a huge impact on the global economy. Rapid spread of

technology has made internet the best channel to provide banking services and

products to customers (Sadeghi & Heidarzadeh Hanzaee, 2010). The service sector,

specifically banking industry, is constantly evolving; customers are increasingly

unpredictable and service delivery is transforming (Afif et al., 2013). One of the

technology that grown faster is online banking services.

In Malaysia, banks are divided into several forms such as central banks, Islamic

banks and commercial banks (G. M. Ling, Fern, Boon, & Huat, 2016). Online banking

(OB) or it also known as virtual banking, internet banking or e-banking (Nigudge &

Pathan, 2014). Online banking, including electronic banking, is a necessary condition

for the development of e-business and e-society (Szopiński, 2016). Online banking is

an electronic payment system that make customers of bank or other financial

institution to conduct their account through a website. The online banking system will

typically connect or to be part of the core banking system operated by a bank and

contrasts with branch banking which was the traditional way customers accessed

banking services. Using technologies and telecommunication systems that offer to the

customer, a bank can reach out to customers and provide them with not only general

information about the services but also the opportunity of retail banking transactions.

Online banking consists of several medium that customer can use for make their

transaction for example is Automated Teller Machines (ATM), PC-banking, and

phone-banking (Jamal & Jamil, 2001).

In Malaysia, online banking services was operated since year 2000. Online

banking consists of several types of services such as inter-account transfer, balance

reporting, bill payment, transferring fund between accounts and other services

(Nigudge & Pathan, 2014). With online banking services, the customers can do their

transaction without leaving their home or organization. A ComScore survey report,

ComScore (2011) shows that about 2.7 million visited bank web sites in Malaysia in

January 2011, a growth of 16 percent year-on-year, highest among the Southeast Asian

countries. According to Bank Negara Malaysia, the penetration of registered

individual internet banking users in Malaysia has increased from 9.8 percent in 2005

to 42.9 percent in 2012 (Bank Negara Malaysia, 2012). However, only banking

institutions licensed under the Banking and Financial Institution Act 1989 (BAFIA)

and the Islamic Banking Act 1983 can offer online banking services. Table 1.1

provides a list of banks in Malaysia that now offer an online banking service.

Table 1.1: List of online banking in Malaysia by Banking Providers

(Bank Negara Malaysia, 2017)

Bank Name Online Banking (OB)

Al Rahji Bank Al Rahji Bank IB

Affin Bank AffinOnline.com

Alliance Bank Alliance Online

AmBank AmOnline

CIMB Bank CIMB Clicks

Citibank Citibank Online

EON Bank EON Bank IB

Hong Leong Bank Hong Leong Online

HSBC Bank Online@HSBC

Malayan Banking Maybank2u.com

Muamalat Bank i-Muamalat

OCBC Bank OCBC IB

Public Bank PBeBank.com

RHB Bank RHB Bank IB

Standard Chartered Bank Standard Charted Online

The Royal Bank of Scotland RBS Access Online

United Overseas Bank UOB IB

Online banking services allows bank customers with appropriate access to

manage their finances with minimal inconvenience as it provides a fast and convenient

way to undertake various banking transactions via the Internet banking website from

home, office or elsewhere, 24 hours a day, 7 days a week (Yee & Faziharudean, 2010)

. According to Jamal & Jamil (2001), with the internet facilities it has opened many

opportunities for customers to set up bank branches from their houses especially for

people who are busy with work. In other words, customers do not need to go to the

bank to conduct financial transactions but adequate with internet access at home alone

with only using a smartphone, laptop or other facilities. The customer does not to

follow some rule that need to fill up the form before making a transaction. Therefore,

the primary objective for this research is to identify the factors acceptance of online

banking services among Academic Staff UTHM in Parit Raja and to identify the

relationship between factors that drive the acceptance to accept and use online banking

services among Academic Staff UTHM in Parit Raja. Even though, there are many

factors that drive online banking user, the result from this research will show the

decision for online banking services to improve their service from time to time

especially in Parit Raja.

1.2 Research Background

Nowadays, online banking services are important especially to people that are

working. The use of online banking services allows them to make any transaction like

transferring fund between account, bill payment and so on by using smartphone,

computer and many more. In 2008, Maybank as the pioneer of online banking in

Malaysia started offering online banking services to its customers. There are more than

10 local banking institutions in Malaysia and all offer banking services to its customer

facilities internet (Ibtisam & Azrehan, 2015). Based on the statistics on the use of

online banking in Malaysia is 15.1 million consisting of 14.8 million of individual

customers and 300,000 corporate customers (Pengguna & Selamat, 2013)

For research background, this research was conducted at Universiti Tun

Hussein Onn Malaysia (UTHM), Parit Raja, Batu Pahat Johor. UTHM is a public

university in Batu Pahat, Johor, Malaysia. The research choose Academic Staff

UTHM is to identify the factors acceptance of IT literacy and technology aspects in

terms of acceptance to accept and use the online banking services. Moreover, the study

chooses academic staff UTHM because there has no time to go to the bank and they

use online banking services in their daily life.

1.3 Problem Statement

The use of online banking services is not a new thing for users at this era because it

easier and save time with users in the country especially in Malaysia. Online banking

services research is not necessarily true or reliable, because based on personal accounts

rather than facts or research. There is no, or few research on the UTHM Staff. Most of

previous study just focus on the customer of the bank.

Based on this research, the main problem for this study is low awareness. Low

awareness of online banking services is a critical factor in causing customers not to

accept and use online banking services.

In addition, a limited ability to access the internet and attitudes of the individual

that receives something new is also show the cause of the low level of usage. Parit

Raja can be categories as villages. So, it is difficult to them to access the internet. The

lack of user interest to use online banking services clearly shows lack of sensitivity on

the part of banks. The study also showed that the most bank customers put online

banking as a last choice because less aware of its existence and promotion of existing

less attractive for them to be tempted to use this channel (Suganthi, 2001)

Next is trust. Yousafzai, Pallister, & Foxall (2009) cite lack of customer trust

as a potentially major obstacle for widespread acceptance of online banking services.

Customers are still not known how to use online banking services, so it will cause lack

of trust on the security system. However, the extent to which in turn online banking

services integrity until make a customer worry especially old people that are using this

service. In Malaysia, trust refers to the bank actions when dealing with transaction

errors that occur on the line. Many customers doubt the sincerity of the bankers to deal

with problems and wonder if the evidence on their behalf can be deleted by the bank.

This factor may reduce the customer trust to use and accept online banking services.

The other problem is phobias with new technology and difficult to change the

medium used. Some of them feel phobia to used technology because they do not have

much knowledge or experience about online banking services. They just trust people

more than computers and machinery. Therefore, most customer phobia to use

technology and refused to use online banking services. Customers feel comfortable

with the old medium banking practice and they think no need to change.

1.4 Research Questions

To identify factors acceptance of online banking services and relationship between

factors that drive the acceptance to accept and use online banking services among

Academic Staff UTHM in Parit Raja there is several questions need to be cleared and

understand. This question was also used a guide to continue the study further. These

are the research questions of this research:

i. What is the factors acceptance of online banking services among Academic

Staff UTHM in Parit Raja?

ii. What is the relationship between factors that drive the acceptance to accept and

use online banking services among Academic Staff UTHM in Parit Raja?

1.5 Research Objectives

For this research, it is consisting of two objectives that need to be identified. Research

objectives are important aspect for every research. The research objectives for this

research is:

i. To identify the factors acceptance of online banking services among Academic

Staff UTHM in Parit Raja.

ii. To identify the relationship between factors that drive the acceptance to accept

and use online banking services among Academic Staff UTHM in Parit Raja.

1.6 Research Scope

In order to ensure this research conducted efficiently, it only focus on the factors

acceptance of online banking services among Academic Staff UTHM in Parit Raja and

the relationship between factors that drive the acceptance to accept and use online

banking services among Academic Staff UTHM in Parit Raja. There are few factors

that is related to the research such as perceived usefulness, perceived ease of use,

quality of the internet, and trust. The research conducted at UTHM, Parit Raja, Batu

Pahat Johor. The 250 respondents of the survey for this research were Academic Staff

that use online banking services. This is because, they have knowledge about the

online banking services and they use online banking services in daily life. The data

collected by distributing questionnaires. Moreover, the result is identified for this study

is by using SPSS software version 24.

1.7 Significant of Study

This research focuses on finding the factors acceptance of online banking services

among Academic Staff UTHM in Parit Raja and the relationship between factors that

drive the acceptance to accept and use online banking services among Academic Staff

UTHM in Parit Raja. This research was importance in order to know what the most

factors acceptance of online banking services among Academic Staff UTHM in Parit

Raja and the relationship between the factors that drive the acceptance to accept and

use online banking services. The research findings are discussed within the context of

the existing literature followed by limitations, recommendation future research and

conclusion.

1.8 Research Methodology

To achieve the objective of this research of online banking services, the research

methodology was used to collect the data. Research methodology is way on how to get

the data for the research. There are several methods of collecting primary data. For this

research, the questionnaires were used to collect the data. Questions are design to

identify the factors acceptance of online banking services among Academic Staff

UTHM in Parit Raja and identify the relationship between factors that drive the

acceptance to accept and use online banking services among Academic Staff UTHM

in Parit Raja. The 250 set of questionnaires were distributed to respondents. Sampling

technique for this study is random sampling. The respondents for this research are

Academic Staff UTHM in Parit Raja. The research construct based on Technology

Acceptance Model (TAM). After the data collected, the Statistical Package for the

Social Sciences (SPSS) software version 24 were used to generate the data to find out

whether the objectives being achieve or not.

1.9 Expected Outcome

The expected outcome for this study is to find out the most factors acceptance of online

banking services among Academic Staff UTHM in Parit Raja. Other than that, this

research was also to identify the relationship between the factors that drive the

acceptance to accept and use online banking services among Academic Staff UTHM

in Parit Raja.

1.10 Organization of Chapter

Chapter 1 was the first chapter in this research. It is included all the basic information

such as research background, problem statement, research questions, research

objectives and many more. This give an overview to the reader on the fundamental of

this research.

Chapter 2 was the continue of this research. In chapter two it discusses about

the literature review. The previous studies that related to the title were once again be

review in this chapter. Related information about knowledge of the study were found

in this chapter. It included the knowledge of the acceptance to accept and use online

banking such as perceived usefulness, perceived ease of use and many more. This

chapter also described the Technology Acceptance Model (TAM) in order to gain

understanding about the technology.

Chapter 3 discussed the method that been used in this research. The survey was

carried out in this research. Moreover, this chapter explained about the process and

flow of this research.

Chapter 4 presented interpretation of the research findings and results. This

research uses descriptive analysis and inferential analysis to analyse the data.

In chapter 5, it was the final chapter in this research. Discussion on the results

interpreted in chapter 4. This chapter also stated the limitation of this research,

recommendation and conclusion for this research.

1.11 Summary

The research mainly to identify the factors acceptance of online banking services

among Academic Staff UTHM in Parit Raja and to identify the relationship between

factors acceptance to accept and use online banking services among Academic Staff

UTHM in Parit Raja. As we know nowadays, online banking services was important

aspect for making any transaction by using computer, smartphone and so on. In this

chapter, it tells overall about the study research. For this research, the quantitative

method being used to get the data. For instance, in quantitative method, the research

had done a survey by distributing questionnaires to 250 respondents that in Academic

Staff UTHM in Parit Raja.

CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

Highlights of past research is very important to give an overview of the beginning of

a review (Rosland & Borhan, 2013). In this research, the researcher has reviewed and

reviewing directly on the factors acceptance of online banking services. This research

also reviews about the online banking services that been implemented in Malaysia

especially at Parit Raja. The literature that dealing with online banking services is very

large. In this section, the research was focus the review of previous studies on the

evaluation of online banking services.

Nowadays, people feels like online banking services are important for their life

due to the time and cost to go to the bank. People can use several medium such as

computer, smartphones and so on to make their transaction. According to Boyacioglu,

Hotamis, & Cetin (2010) in Malaysia, commercial banks have developed online

banking services seriously, by giving more emphasis to online applications in the

service by creating a variety of advertisements to attract user attention. However, the

level of use of online banking services is still low in society, especially the elderly.

Therefore, this study was important to identify the factors acceptance of online

banking services among Academic Staff UTHM in Parit Raja and the relationship

between factors acceptance to accept and use online banking services among

Academic Staff UTHM in Parit Raja. In chapter 2, the research was discussed about

the literature review of the previous research on the online banking services that has

studied by the previous researcher.

2.2 Online Banking

Online banking services is one of the medium used by the people at present. Online

banking services offers many advantages for both banks and their customer. Online

banking services involves information technology based banking (Nigudge & Pathan,

2014). Chong, Lin, & Tan (2010) cited that, with the development of asynchronous

and secured electronic transaction technologies, more banks are now using online

banking services both as a transactional as well as an informational medium.

According to Rosland & Borhan (2013) online banking services is a service provided

by the bank to the holder of the bank account to facilitate their customer to manage

financial from home or at work or anywhere that has internet access services.

Chong et al. (2010) says that, with the growth of the internet, it is inevitable

for banks to move towards providing online banking services for their customers. Nasri

(2011) mention, online banking services is a high-order construct, which consists of

several distribution channels. It should be mention that online banking services is a

bigger platform than just banking through the internet. Sadeghi & Heidarzadeh

Hanzaee (2010) say that, customers had a relationship with a bank’s front-desk

employee, who had access to the bank’s information system. Online banking services

does not just be on a computer screen. It can be on the tiny screen of a mobile phone

or any other wireless device.

With services, customers can manage their bank account balances, transaction

histories, and can also send e-mail to their banks. Nasri (2011) also describe that this

type of online banking services allows consumers to check the balances in their

accounts, transfer funds and order electronic bill payments. Moreover, Muñoz-Leiva,

Climent-Climent, & Liébana-Cabanillas (2017) cited, online banking services and

mobile apps of financial entities allow users to, among other advantages, access their

accounts from any location and at any time.

With the internet, banking is no longer bound to time or geography. Consumers

all over the world have relatively easy access to their accounts 24 hours per day, seven

days a week (Bultum, 2014). Therefore, online banking services helps banks to retain

their existing customers, improve customer satisfaction, increase banks’ market share,

reduce administrative and operational cost and more importantly improve banks’

competitive positions (Al-Somali, Gholami, & Clegg, 2009)

To summarize, online banking services is way to people manage their account

without leaving their home or work. The bank also can provide a better service to the

customer so that they will continue to use the online banking services.

2.2.1 Electronic Banking

Online banking also has been known as electronic banking. The term “electronic

banking” or “e-banking” covers with computer and telephone banking. According to

Alagheband (2006), electronic banking offers numerous benefits for both banks and

their retail customers. Electronic banking from Safarpour (2016) is, facilities for

customers to know that no physical presence in the database using secure interfaces to

enable banking access. Electronic banking provides an important competition

advantage to the banks in terms of time, location and cost (Relnr, 2015). For many

people, electronic banking is a system that enable the users use 24 hour a day to cash

or through ATM or other medium. Electronic banking also can be defined as the

automated delivery of new and traditional banking products and services directly to

customers through electronic, and interactive communication channels. The product

and services that from electronic banking such as account information and

management, bill presentation and bill payment, loan application and approval and

investment and brokerage services. Relnr (2015) cited that, electronic banking

provides an important competition advantage to the banks in terms of time, location

and cost.

Moreover, electronic banking consists of two approaches. First is Dial-in

Approach and second is Internet Approach. For Dial-in Approach meaning that, it

needs requires of users to have a separate finance software. So that, users can do all

the processes offline and connect to the bank for just a transaction. While, internet

approach is a user’s can directly log on to their bank website and complete all the work

just by online. Nasri (2011) also describe with the rapid progress of other types of

electronic, largely internet based services; there has been increased interest in

electronic banking services.