The Adoption of Mobile Banking Application among Muslim Senior Citizens in Selangor, Malaysia
Mohamad Azwan Md Isa1*, Muhammad Zulhelmi Mohamad Sabri1, Ferri Nasrul1, Mohd Khairul Ariff Noh1, Zaibedah Zaharum1, Ruziah A Latif1
1 Faculty of Business and Management, Universiti Teknologi MARA, Johor, Malaysia
*Corresponding Author: [email protected]
Accepted: 1 June 2020 | Published: 15 June 2020
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Abstract: The adoption rate of mobile banking application (MBA) in Malaysia is considered still low despite pronounced growth in number of smartphone users. Therefore, this study aims to investigate the factors that influence the intention to adopt MBA focusing on Muslim senior citizens (MSCs) particularly in Selangor, Malaysia. The four factors tested are perceived credibility (PC), perceived risk (PR), perceived ease of use (PEU) and perceived usefulness (PU). Primary data is collected from 150 respondents using a 5-point Likert scale questionnaire. Our study employs several analyses, namely descriptive, reliability, correlation and multiple regression analyses. The findings indicate that PC and PU have significant relationships and positively influence the intention to adopt MBA among the MSCs in Selangor. The findings are beneficial to related parties particularly the banking and financial institutions (BFIs), mobile service providers and policy makers in enhancing the service quality and efficient delivery of the MBA.
Keywords: mobile banking application, Muslim senior citizens, perceived credibility, perceived risk, perceived ease of use, perceived usefulness
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1. Introduction
Mobile phones have been the important personal information processing tool. The latest statistics reveal that there are approximately 7.71 billion mobile phone users worldwide as reported in the United Nation (UN) digital analyst estimates. The statistics also show that 66.53% of the mobile phone users are smartphone users (Bankmycell, 2019). In parallel with development of mobile telecommunication and noticeable rise in the number of mobile phone users, mobile banking has become one of the significant avenues for the banks in Malaysia (Daud et al., 2011) that provides access to banking services and facilities offered by the BFIs via digital mobile device (Munoz-Leiva et al., 2016).
MBA is considered as a new innovation offered by the banks, which allows customers to perform banking transactions such as fund transfer, balance enquiries and payment of bills via smartphones or tablets anytime. In addition, Muslim customers could now use the platform to perform their religious obligations such as paying zakat, saving for pilgrimage (hajj) and doing waqaf (charity). This innovation brings about customers’ convenience as they find it practical in using MBA to conduct their daily financial transactions (Maulana et al., 2019). Furthermore, the MBA enables customers to conduct banking transactions anywhere regardless where they are (Shaikh & Karjaluoto, 2015) without having needed to personally visit the bank branches (Daud et al., 2011).
The success of MBA provided by the BFIs depends on its reliability and sustainability besides its effectiveness in communicating the advantages and benefits to the customers so that they are convinced to adopt the MBA as an alternative to the conventional banking method (Munoz-Leiva et al., 2016; & Venkatesh et al., 2016). However, there are many factors that influence the customers to adopt the MBA such as perceived credibility of the system (Daud et al., 2011) and reliability issues in terms of security and privacy of their personal data and financial information (Amin et al., 2008).
This study focuses on senior citizens. Senior citizens can be defined as persons, who are at age of 60 and above (Awam, 2019). They are described as a group of people, who are slow to adopt new technology and need extra time to learn on how to use it. Senior citizens in Malaysia are considered as high financial influence groups (Lim et al., 2011) as their number has increased from 6.3% in 2017 to 6.5% in 2019 (Malaysia, 2019). Hence, it is crucial to study the factors influencing the intention to adopt MBA particularly among senior citizens as they are one of the targeted segments due to their financial power and noticeable involvements in savings, loans, and investments compared to other levels of citizens (Loo, 2010). The remainder of this study will present the literatures related to this study in the next section, followed by the data and methodology of study, then discuss the results and findings and finally the conclusion.
2. Literature Review
Intention to Adopt
Intention to adopt refers to an individual's degree of intention to adopt MBA. The main objective of companies is to increase customers’ adoption towards their products (Yu, 2012).
However, an objective degree to which a person adopts a product or system is not always simple to measure (Vijayasarathy, 2004). Human performance such as in the adoption of software can be anticipated by their purpose of use (Yu, 2012). Individual’s purpose could, therefore, be interpreted as a realistic way to measure actual adoption (Teo et al., 2008). As we are aware, MBA is among the latest in a series of recent mobile technological innovations. Even though automated teller machine (ATM) and internet banking offer effective delivery channels for traditional banking products, but as the newest delivery channel established by retail and microfinance banks in many developed and developing countries, MBA is likely to have significant impacts on the market (Safeena et al., 2012). The rising trend in usage of smartphones has boosted the demand for MBA that prompts many banks, microfinance institutions, software houses, and service providers to offer this innovative service together with new sets of products designed to expand the client reach, enhance customer saticfaction, improve operational efficiency, enlarge market share, and come up with new job opportunities (Shaikh, 2013).
Perceived Credibility
Perceived credibility (PC) is described as customers’ inclination to safeguard their transaction details and personal data from unauthorized or illegal access. PC is a significant factor of behavioral intention to adopt an information system. The two pivotal elements of PC are privacy and security. It is a matter of personal judgement, where customers have the right to safely carry out the financial transactions and to protect the privacy of their personal information. Security is defined as the protection of information or systems from illegitimate access or intrusions (Daud et al., 2011). Yu (2012) reveals that PC has positive significant relationship with the intention to adopt MBA whilst Daud et al. (2011) claim that PC has a direct impact on the intention to adopt MBA. De Leon (2019) states that trust in application
or system influences the intention to adopt MBA among the Philippines retail banking customers.
Perceived risk
Perceived risk (PR) is the internal presumption of customers to bear unexpected loss in pursuit of the desired results. If customers are not sure or do not have trust in quality of product, the brand or online services; they might be concerned about an unjustified pause in distribution of the products or services, compensation of not owning the product, and other illegal activities and fraud. The degree of adoption is negatively related to the PR level (Frambach et al., 1998). People are worried about various types of threats constituted when dealing in online activities or transactions. Daud et al. (2011) suggest that PR has negatively influenced the intention to adopt MBA. Latest study by Rehman and Shaikh (2020), who investigate the MBA adoption among Malaysians, who were born between 1980 and 1984 (Gen Y or Millennials), prove negative relationship between PR and intention to adopt among the Gen Y bank customers.
Perceived Ease of Use
Perceived ease of use (PEU) is explained as the use of MBA that is easy and effortless (Lule et al., 2012). PEU can also be described as very convenient and it does not require much effort to engage in MBA. Since the MBA is easy to use, it will increase customers’
satisfaction while performing the banking transactions instead of queuing in line at the banks’
counters. Safeena et al. (2011) note that PEU has positive significant influence on the intention to adopt MBA. The customers can decide the best services when using it, which will offer advantages and comfort. The customers could also access the system to perform the banking transactions at any time. This will save much of their time particularly during working hours and avoid visiting the bank personally. Chung and Kwon (2009), Zhang, Lu and Kizildag (2018), De Leon (2019), and Kuruppu et al. (2019) share similar finding that PEU positively and significantly influences the behavioral intention to adopt MBA. Anouze and Alamro (2019) test on Jordanians claim that PEU is one of the important factors that hinders the customers from adopting internet banking.
Perceived Usefulness
Perceived usefulness (PU) is described as the extent to which individuals regard that adopting a particular system would enhance the performance of his or her job. Productivity is strongly associated with PU. This implies that adopting a technology at workplace could improve the productivity of employees, boost their job performance, and maximize job efficiency. Pham and Ho (2015), Munoz-Leiva et al. (2016), Zhang, Lu and Kizildag (2018), De Leon (2019), and Kuruppu et al. (2019) agree that PU has positive and significant influence on customers’
intention to adopt MBA, whereas Li et al. (2014) argue that PU is not a significant factor towards the adoption of MBA. Meanwhile, Anouze and Alamro (2019) suggest that PU plays crucial part in attracting customers to adopt internet banking in the case of Jordanian banks.
3. Methodology
Data
This study involves 150 Muslim senior citizens (MSCs) in four districts of Selangor state, namely Kuala Selangor, Sabak Bernam, Rawang and Shah Alam. The primary data is collected via a questionnaire with 5-point Likert scale ranges from ‘1-Strongly Disagree’ to
‘5-Strongly Agree’. The self-administered questionnaire comprises three sections, namely demographic information, dependent variable and independent variables. The dependent
variable is the intention of MSCs to adopt MBA whilst the four factors or independent variables consist of perceived credibility (PC), perceived risk (PR), perceived ease of use (PEU) and perceived usefulness (PU). The data collection process is conducted from the 2nd October to 1st November 2019.
Hypotheses
There are four hypotheses developed for this study, which are as follows:
H1: There is positive significant relationship between perceived credibility and the intention to adopt MBA among MSCs.
H2: There is negative significant relationship between perceived risk and the intention to adopt MBA among MSCs.
H3: There is positive significant relationship between perceived ease of use and the intention to adopt MBA among MSCs.
H4: There is positive significant relationship between perceived usefulness and the intention to adopt MBA among MSCs.
Types of Analyses
We apply several tests to analyze the data. Descriptive analysis is the first analysis that looks at the statistical data such as mean, minimum, maximum and standard deviation. Next, we conduct the reliability test to evaluate the level of consistency of the variables by looking at the Cronbach's alpha, which is the most commonly agreed estimation of the performance of a multi-item scale in determining the structure quality.
Then, we perform the Pearson’s correlation test to see any positive or negative correlational relationship between the dependent and independent variables. In addition, from the correlation test, we could also see if there is any multi-collinearity problem among the independent variables. Further, we run the multiple regression test to examine the significant or insignificant relationships and positive or negative impacts or influences of the independent variables on the dependent variable. Such relationships and impacts could be demonstrated by a model of regression, which is as follows:
ITU = α + β1PC + β2PR + β3PEU + β4PU + e
Where; α: Constant
ITU: Intention to adopt MBAs PC: Perceived credibility PR: Perceived risk
PEU: Perceived ease of use PU: Perceived usefulness
β1..β4: Beta coefficients for PC, PR, PEU, and PU e: Error term or residual
4. Results and Discussion
Demographic Analysis
Total number of respondents is 150, where 102 are males (68%) and 48 are females (32%).
Out of the total respondents, 96 respondents (64%) age between 60 to 65 years old, 43 of them (29%) age between 66 to 70 years old whilst only 11 respondents (7%) age above 70.
The results further show that 76.70% (115 respondents) have ever used MBA whilst the
remaining of them, 23.30% or 35 respondents have not or never used MBA. So, we could expect better results since more than 75% of the respondents have experience in using the MBA.
Descriptive Analysis
Table 1: Summary of Descriptive Statistics
Variable N Minimum Maximum Mean Standard Deviation
ITU 150 2 5 4.0830 0.7268
PC 150 1 5 3.9180 0.8472
PR 150 1 5 3.4333 0.8779
PEU 150 2 5 4.0133 0.6380
PU 150 2 5 4.1422 0.6400
Table 1 summarizes the important descriptive statistics of the dependent and independent variables. In term of central tendency, the dependent variable (ITU) has indicated a mean score above 4.0. PU has the highest mean of 4.1422 among all the independent variables followed by PEU with the mean score of 4.0133. PR has recorded the lowest mean with the score of 3.4333. Next, in term of data spread or dispersion, which is measured by the standard deviation (SD), we found that all the variables have recorded an SD of less than 1.0, respectively, where PR indicates the largest dispersion at 0.8779 whilst the lowest SD was recorded by PEU at 0.6380. Overall, we could state that all the data series are less dispersed from its mean, respectively and the respondents, in general, agree with items of question asked based on the respective mean value.
Reliability Analysis
Table 2: Results of Reliability Test Variables Cronbach’s Alpha (α) N of Item
ITU 0.8440 2
PC 0.9220 4
PR 0.8410 3
PEU 0.6850 3
PU 0.7950 3
Table 2 presents the results of reliability test for each variable. PC shows the highest Cronbach’s alpha (α) with 0.922. This means that PC has an ‘excellent’ internal consistency, which implies that the respondents agree the MBA has PC to be adopted. In other words, they believe that MBA is secured or safe to be adopted and their personal information will be well and safely kept. Next, PR records the second highest α with 0.841, which indicates a ‘good’
internal consistency. We could say that the respondents believe and agree that when they adopt the MBA, they will surely encounter some adverse outcomes or risks in performing the financial transactions.
Meanwhile, α for PU of 0.795 indicates that the internal consistency for this variable is
‘acceptable’. We could assume that some of the respondents adopt the MBA quite frequently or actively in their daily life due to its usefulness, whereas some of them might be using it if and when only necessary. Lastly, PEU has the lowest α with 0.685, which is ‘questionable’
internal consistency. This implies that most of the respondents find the MBA is new to them
and it is not easy to be used or they are still learning in using it. This also indicates that the respondents lack in knowledge on how to adopt the MBA. The dependent variable, namely the ITU has α of 0.844, which is ‘good’ and this means that the respondents have intention to adopt MBA to perform their daily financial transactions.
Correlation Analysis
Table 3: Results of Pearson’s Correlation Test
PC PR PEU PU ITU
PC 1.0000 -0.0740 0.570** 0.506** 0.641**
PR -0.0740 1.0000 0.0590 0.0200 -0.0600 PEU 0.570** 0.0590 1.0000 0.611** 0.572**
PU 0.506** 0.0200 0.611** 1.0000 0.737**
ITU 0.641** -0.0600 0.572** 0.737** 1.0000
**. Correlation is significant at the 0.01 level (2-tailed)
Table 3 shows the results of Pearson’s correlation test. We found that PU has a strong correlation with ITU, where the correlation coefficient (r) is 0.737. Both ITU and PU are noted to be positively correlated. This means both variables move in the same direction either positively or negatively. This implies that the higher PU of the MBA, the higher ITU MBA or vice versa. PC and PEU are found to be moderately and positively correlated with the ITU the MBA. The r values for both variables are 0.641 and 0.572, respectively. This shows that the higher PC and PEU, the higher ITU the MBA or vice versa. Meanwhile, PR is found to be negatively correlated with ITU and the correlation is very weak between both variables at -0.060. Further, based on the p-values, we could conclude that the three factors, namely PC, PEU and PU are significant factors in influencing the ITU the MBA among the MSCs in Selangor, whereas PR is not a significant factor.
Multiple Regression Analysis
Table 4: Results of Multiple Regression Variables Beta SE T-stats. Sig.
Constant 0.3250 0.2920 1.1120 0.2680 PC 0.2860 0.0540 5.3240 0.0000*
PR -0.0410 0.0410 -0.9920 0.3230 PEU 0.0660 0.0780 0.8530 0.3950 PU 0.6060 0.0730 8.2650 0.0000*
In Table 4, based on the p-values, we could suggest that PC and PU have significant relationships with the ITU the MBA. In other words, both PC and PU are significant factors to influence the ITU the MBA among the MSCs in Selangor. Meanwhile, both PR and PEU are found to have insignificant relationships with the ITU or both independent variables are not significant factors to the ITU MBA. Further, when we look at the beta coefficients, we could conclude that the PC, PEU and PU have positive influences, whereas the PR poses negative influence on the ITU MBA. These results answer our study hypotheses particularly on the positive and negative influences of independent variables on the dependent variable.
Meanwhile, PU shows the largest influence on the ITU with the beta coefficient of 0.6060 and followed by the PC with the beta coefficient of 0.2860. Meanwhile, both PEU and PR have very minimal influence on the ITU with the beta coefficients of 0.0660 and 0.0410, respectively.
The multiple regression model based on the results of study is as below:
ITU = 0.325 + 0.286PC – 0.041PR + 0.066PEU + 0.606PU + e
Apparently, PR and PEU does not pose significant influence on the intention to adopt MBA in the case of MSCs in Selangor. We could state that the results vary based on the types of respondents.
5. Conclusion
This current study focuses on the factors influencing intention to adopt MBA among the MSCs in Selangor. The four factors or independent variables are tested to see their relationships and influences on the intention to adopt the MBA. The reliability test reveals that all the variables have the Cronbach’s alpha (α) above 0.6, which is considered as acceptable and above. Further, the Pearson’s correlation test shows that PC, PEU and PU have positive correlations with the ITU MBA, whereas PR shows negative correlation with the ITU MBA. The findings are further supported by the multiple regression results, where it reveals similar results for the three independent variables, namely PC, PEU and PU with positive beta coefficients that imply positive influences on the ITU the MBA among the MSCs. Nevertheless, the multiple regression test shows that only two independent variables or factors, namely PC and PU have significant relationships with the intention to adopt MBA whilst the other two, PR and PEU are not significant.
Our findings are consistent with Daud et al. (2011), Yu (2012), Pham and Ho (2015), and Munoz- Leiva et al., (2016). The finding, specifically on PU, is also consistent with Kuruppu (2019) in the case of Sri lanka and Rehman and Shaikh (2020) that study among Malaysian Gen Y customers. However, this study finding on PR contradicts Rehman and Shaikh (2020).
Hence, we could suggest that there is variable conclusion between the Gen Y and senior citizens in Malaysia in term of PR influence on the ITU the MBA. From these findings, we can conclude that MSCs in Selangor put utmost concerns on the security, privacy issues and usefulness of the MBA when they intend to adopt it. Despite the insignificance of the PR and PEU, the BFIs and mobile service providers still need to ensure these two factors are not taken for granted and should be given appropriate enhancement and improvement from time to time as added values in the delivery of the services in the future.
This study also notes that the lack of intention to adopt MBA among the MSCs is due to insufficient knowledge and exposure to adopt the application. Hence, the BFIs are urged to conduct aggressive campaigns to the customers and knowledge dissemination through the mobile devices or social media so that the customers are more aware and convinced to adopt the MBA. The marketing strategy of the BFIs must be enhanced in effort to attract more customers to adopt MBA. Further researches could be extended to other levels of citizen involving other areas or states or ethnicities by using other types of tests. This study will benefit the BFIs and mobile service providers to understand and fulfil the needs and demands of the customers in adopting MBA.
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