Mobile Banking Adoption: Challenges and Solutions

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Table of Contents

Terms of Reference
Literature Review
Methodology
Resources
Ethical Issues
Reference List

Terms of Reference

Mobile banking refers to banking activities that are carried out using mobile devices, for instance, cell phones and tablets (Market Reports 2015). Mobile banking has transformed the way people conduct business transactions by eliminating the inherent need for face-to-face transactions. Mobile banking, also known as m-banking, enables users to execute financial transactions through the internet without the need to visit a bank branch physically.

One key feature of mobile banking is its ability to offer services to customers at significantly low fees. Mobile banking does not involve the traditional costs associated with physical banking such as paying rent (Jeong & Yoon 2013). The money saved is then used to extend discounts to customers.

Mobile banking has made it easier to shop by eliminating the need to carry cash everywhere. In the United Kingdom, a large number of people have adopted mobile banking services. It is estimated that about 34% of adults use mobile banking (Market Reports 2015). This figure indicates a tremendous shift from physical to mobile banking in the UK. Conversely, mobile banking raises issues of cybersecurity and the safety of customers money when transactions are conducted via cell phones (Akturan & Teczan 2012). Therefore, the writer wishes to investigate the numerous impacts of mobile banking because the burgeoning phenomenon may entirely replace traditional banking in the near future, specifically in the UK.

The study will be guided by the following research question: How has mobile banking transformed how consumers approach and perceive banking? Despite the existence of a wide body of research on the topic of mobile banking, there is little research on how customers view mobile banking.

This study seeks to examine the various impacts that have been occasioned by this change on customers in the last five years. This goal will be achieved by interrogating the attitudes and views of different customers regarding the change. The aim will be to determine what customers feel regarding the shift from traditional to mobile banking. The writer appreciates that while most customers may be optimistic about this transformation, others, especially the older generation, maybe apprehensive. Millennials are ordinarily believed to be tech-savvy. Hence, they are assumed to be more welcoming of technological changes relative to their parents. This research will also be seeking to determine the validity of this assumption by relying on a sample of people of different ages.

Literature Review

Mobile banking began toward the end of the 1990s when Paybox, a German company working together with Deutsche Bank, commenced its first service (Shaikh & Karjaluoto 2015). This service was then deployed for testing in the European countries, among them Germany, Sweden, Spain, Austria, and the United Kingdom. Later, Kenya introduced the text-based M-Pesa service in 2007 (Jack & Suri 2011).

By 2012, the number of registered M-Pesa users in Kenya had grown to 7 million, owing to the convenience of the use of this new service (Mbiti & Weil 2011). SMS-banking was the oldest form of mobile banking in the UK (Mojtahed, Nunes & Peng 2013). At the time of its emergence in the UK, mobile banking was slowed by the limited functionality of mobile phones (Shanmugam et al. 2015). The high cost of data, as well as slow connections, also served to limit its growth (Sohail & Al-Jabri 2014). With the advancement of technology and the reduction in prices of mobile phones, mobile banking has become more accessible. Today, it is estimated that 34% of adults in the UK use mobile banking options (Market Reports 2015).

Mobile banking has revolutionized customers interaction with banks (Sohail & Al-Jabri 2014). The ease of use of mobile banking has facilitated its rapid growth in both developed and developing countries. Services, which are available to customers through mobile banking, include checking account status, making payments, money transfers, and selling stock (Johnson & Verdegaal 2016). Communication with the bank on a portable mobile device has also been classified as a mobile banking service (Akturan & Teczan 2012).

Mobile banking in the UK is credited for the increased convenience of banking. The phrase banking anywhere, anytime has been coined to explain this convenience (Jeong & Yoon 2013). Kundu and Datta (2012) assert that people are becoming less interested in lining on queues for a long period waiting to be served in the traditional banking setup (Akturan & Teczan 2012). The structures of traditional banking involved the client having to move to the physical bank carrying documents that would allow him or her to access the required services.

However, banks realized the need to save the customer from this challenge by introducing similar services in their (clients) mobile phones. Mobile banking apps were introduced to take advantage of the existing formidable telecommunications chains. Popular mobile apps that are operational even today include MyDeposit and Popmoney. This changing attitude is a result of people realizing that mobile banking saves time and/or offers the convenience of accessing ones bank details at any time (Slade et al. 2015).

Mobile banking has increased access to banking services since most people now own a mobile phone (Shaikh, Karjaluoto & Chinje 2015). Between May and August 2015, 58% of adults in the UK used their mobile phones to access the internet (Personal Banking 2015). Personal Banking (2015) further revealed that by June 2014, about 14.7 million mobile banking apps were downloaded. The impact of this development is that more people are embracing banking services, especially the young generation (Shaikh, Karjaluoto & Chinje 2015). Market Reports (2015) observes that mobile banking has changed how both customers and service providers view banking. For instance, banks are now using SMS and apps to communicate with their customers about account updates.

Akturan and Teczan (2012) argue that mobile banking has increased competition in the banking industry. Due to the availability of many options, customers are now less likely to remain loyal to one bank. Instead of clients relying solely on the banks advice regarding secondary services such as mortgages, bankers now prefer to do the research themselves (Jeong & Yoon 2013). Mobile banking is also eliminating the need for generic customer services since customers now prefer customized experience during the rare occasions when they need to visit the bank (Arabo & Pranggono 2013). Banks are shaping their services to become customer-oriented to cope with this new trend.

The reason for creating customer-oriented services is to improve effectiveness and customer satisfaction (Arabo & Pranggono 2013). Chang (2016) asserts that mobile banking has made customers feel more in control of their banking experience, as opposed to traditional banking where the bank is in control.

Customers view mobile banking as fast and efficient (Chang 2016). People lead busy lives. As such, they have limited time to spend banking (Akturan & Teczan 2012). Through mobile banking, they no longer need to queue at the banking hall for hours or even set aside time to visit the bank (Sohail & Al-Jabri 2014). This advancement is seen as an advantage because the time that was traditionally used for banking can now be channeled to other activities.

Through mobile banking, services are processed rapidly, a situation that has led to ease of shopping (Akturan & Teczan 2012). According to Sohail and Al-Jabri (2014), mobile shopping has become a popular mode of payment at groceries and gas stations among other payment points. People do not need to carry cash when going shopping (Marriott & Williams 2016). As a result, their security is enhanced. Mobile devices have the latest security technology such as face and fingerprint recognition. Hence, users are confident that intruders cannot access their (users) personal information (Personal Banking 2015).

However, the issue of security regarding mobile banking raises concerns (Choi et al. 2013). Many users are often concerned about the safety of their money due to the high incidence of cyber-attacks (Arabo & Pranggono 2013). Viruses, spams, and Trojans can be used remotely to hack into customers banking details (Shaikh, Karjaluoto & Chinje 2015). In addition, mobile devices are small. Hence, they can be easily lost or stolen (Arabo & Pranggono 2013).

Loss and theft of mobile phones are some of the biggest threats that threaten mobile banking (Jeong & Yoon 2013). Each year, more than a million mobile devices are either lost or stolen in the UK. Android-based mobile devices store large amounts of personal data, including banking details, which can then be accessed by intruders once the device is lost or stolen (Shaikh, Karjaluoto & Chinje 2015). The latest devices can run many programs simultaneously, a situation that increases the chances of malicious programs operating in the background without the knowledge of the user (Market Reports 2013). According to Bagunas, Sophia, and Matriano (2016), mobile banking security is challenging banks to develop effective mechanisms to counter the loss of money by their customers.

Issues such as the ease of mobile banking and its usability depend on technology acceptance. Sharma et al. (2016) reveal how age influences how people view mobile banking in the UK, either positively or negatively. Younger people are likely to accept mobile banking relative to their parents generation that still prefers traditional banking (Zhou 2012). Akturan and Teczan (2012) agree with this finding by asserting that older people perceive mobile banking as insecure.

Hence, many of them shy away from using it. The findings by Market Reports (2013) reveal how mobile banking has risen dramatically in the last few years among young adults aged 16-24. Market Reports (2015) further observes that despite the rapid growth of mobile banking, the older generation is still not responding as positively as the younger one. For this reason, banks are retaining their branches to serve this niche of their clientele who prefer physical service at the bank (Market Reports 2015).

This project relates to the above literature on mobile banking. The writer has observed that little literature exists regarding how customers perceive mobile banking, despite the expansive literature on the benefits of mobile banking. Therefore, this study seeks to bridge this gap by carrying out an investigation on people in the UK regarding their experiences and perceptions. This study is informed by the assumption that perception and experience with mobile banking depend on the age of the customers.

Methodology

This study will rely on both primary and secondary research. Qualitative and quantitative data will be collected. For the primary research, surveys will be conducted to customers outside bank branches. In-depth interviews will be used to collect data from the participants. 5-10 interviewers will approach participants and ask them to talk about their experiences and perception of mobile banking. A phenomenological design will be used to analyze responses from the depth interviews. Polit and Beck (2013) explain that phenomenological research is essential in bringing out the lived experiences of people.

For quantitative data, participants will be asked to provide responses to predetermined questions contained in the questionnaire. Each question will include four multiple choices as a way of guiding the participants responses. These questions will be designed according to responses obtained from the in-depth interviews. The quantitative description is important to researchers when they wish to focus on measurable aspects of data, for instance, magnitude and size (Polit & Beck 2013).

In terms of focus groups, data will be categorized according to the age groups of the participants. Three categories will be included, namely, Baby Boomers, Generation X, and Generation Z. These categories are based on the assumption that the age of participants will determine their attitude toward mobile banking.

Between 100 and 150 participants will take part in the survey. The participants will be of different age groups based on the assumption that the acceptance of mobile banking differs between the older and younger generations. Data obtained from the study will be analyzed using SPPS version 194.0. Cross-tabulations will be used to calculate descriptive data. The software will help in indicating percentages between independent and dependent variables.

The presentation of the findings will be done in the form of diagrams that will be made via MS Excel. SPSS will also be instrumental in producing additional graphs, for instance, the means from the different categories of age groups. The researcher will also use ANOVA to analyze statistical differences in perception and experience across the three age groups. According to Polit and Beck (2013), ANOVA is useful in testing mean group differences where three or more groups are involved.

Resources

Any research is expected to use various resources that range from money, labor, and time. It estimated that the researcher will spend about 3 hours every day in 4 days conducting the survey. The researcher will target customers outside the bank branches. The money used for traveling to conduct the survey is also identified as a resource for the purpose of this research. It is crucial to point out that the participants will not be in one fixed location. As a result, the researcher will be required to travel, sometimes with a vehicle, to access the respondents. Additional resources for this study will include funds to acquire questionnaires for the survey and software packages. Software packages to be used include SPSS version 14.0 and ANOVA.

Ethical Issues

The project will also address the various ethical issues that the researcher needs to consider when gathering data from the participants. As such, the researcher will not include children and people with sensory needs in the study. Additionally, the express authority of participants will be sought beforehand. Hence, only individuals who will agree to participate will be involved. They will not be forced to take part in the interviews.

Reference List

Akturan, U & Tezcan, N 2012, Mobile banking adoption of the youth market: Perceptions and intentions, Marketing Intelligence & Planning, vol. 30, no. 4, pp.444-459.

Arabo, A & Pranggono, B 2013. Mobile malware and smart device security: Trends, challenges and solutions, IEEE, New York.

Bagunas, A, Sophia, M & Matriano, M 2016, E-Commerce mobile banking security: A comparative study. Web.

Chang, M 2016, Mobile banking: The best hope for cyber security development. Web.

Choi, J, Ae Chun, S, Kim, D & Keromytis, A 2013, SecureGov: Secure data sharing for government services. Web.

Market Reports 2013, Internet & telephone banking, Routledge, London.

Market Reports 2015, Internet, mobile & telephone banking, Routledge, London.

Jack, W & Suri, T 2011, Mobile money: The economics of M-PESA, National Bureau of Economic Research, Cambridge.

Jeong, B & Yoon, T 2013, An empirical investigation on consumer acceptance of mobile banking services, Business and Management Research, vol. 2, no. 1, pp. 31-40.

Johnson, M & Verdegaal, M 2016, How traditional banks are innovating the basics to provide customers with an Uber-like mobile banking experience, Journal of Digital Banking, vol. 1, no. 1, pp. 33-44.

Kundu, S & Datta, S 2012, A comparative evaluation of customer perception and satisfaction of M-banking and I-banking, Journal of Transnational Management, vol. 17, no. 2, pp.118-136.

Marriott, H & Williams, M 2016, Developing a theoretical model to examine consumer acceptance behaviour of mobile shopping, Springer, Berlin.

Mbiti, I & Weil, D 2011, Mobile banking: The impact of M-Pesa in Kenya, National Bureau of Economic Research, Cambridge.

Mojtahed, R, Nunes, J & Peng, G 2013, Probing future banking service opportunities: a study of the intention to adopt mobile banking among young UK graduates, International Journal of Wireless and Mobile Computing, vol. 6, no. 6, pp. 544-555.

Personal Banking 2015, Markets report, Routledge, London.

Polit, D & Beck, C 2013, Essentials of nursing research: Appraising evidence for nursing practice, Lippincott Williams & Wilkins, Philadelphia.

Shaikh, A & Karjaluoto, H 2015, Mobile banking adoption: A literature review, Telematics and Informatics, vol. 32, no. 1, pp. 129-142.

Shanmugam, M, Wang, Y, Bugshan, H & Hajli, N 2015, Understanding customer perceptions of internet banking: the case of the UK, Journal of Enterprise Information Management, vol. 28, no. 5, pp. 622-636.

Sharma, S, Govindaluri, S, Al-Muharrami, S & Tarhini, A 2016, Predicting mobile banking adoption: A neural network approach, Journal of Enterprise Information Management, vol. 29, no. 1, pp. 1-6.

Slade, E, Dwivedi, Y, Piercy, N & Williams, M 2015, Modelling consumers adoption intentions of remote mobile payments in the United Kingdom: Extending UTAUT with innovativeness, risk, and trust, Psychology & Marketing, vol. 32, no. 8, pp. 860-873.

Sohail, M & Al-Jabri, I 2014, Attitudes towards mobile banking: Are there any differences between users and non-users?, Behaviour & Information Technology, vol. 33, no. 4, pp.335-344.

Zhou, T 2012, Examining mobile banking user adoption from the perspectives of trust and flow experience, Information Technology and Management, vol. 13, no. 1, pp. 27-37.

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