FILAMER CHRISTIAN UNIVERSITY

GRADUATE SCHOOL EXTENSION

KALIBO, AKLAN

A RESEARCH PROPOSAL

FACTORS INFLUENCING CONSUMER USE OF MOBILE BANKING

SERVICES IN AKLAN

MARY ANNJAYNETTE I. DALUPANG

MBA STUDENT – I

PROF. MINNIE P. CHAN

PROFESSOR
 I. Introduction

Mobile banking in the Philippines has become

predominant over the years. In 2016, over half of

Filipinos with smartphones used mobile banking services at

least once a week according to the Visa Consumer Payment

Attitudes study surveys of 2016 (Guno of Philippine Daily

Inquirer, November 09, 2017). The study also found that

almost three in four Filipinos with smartphones have a

banking application and 80 percent of Filipinos “prefer

using the mobile application for checking balances and

paying bills over visiting a physical branch”. These

indicate that a growing number of Filipinos are turning to

their mobile phones in order to avail of banking services

rather than go to a physical branch.

However, despite the growth and popularity of mobile

banking in the country, adoption of mobile banking has

been relatively slow compared to other Southeast Asian

countries. According to the study of Barquin et al. (2015)

on the digital penetration in ASEAN countries, the

country’s digital penetration for transactions and

services was below 20%. Although physical bank composition

and distribution remained relatively unchanged – with bank

density ratio of seven banks per city/municipality and

demographic penetration of 16 banks per 10,000 Filipinos

(BSP Status Report 2nd Sem 2016) and Western Visayas

(Region VI), having an 82.2 percent bank coverage, is the

top four region with the highest regional distribution of

banking offices in the Philippines (BSP 2015: The

Philippine Banking System), the use of mobile phones in

banking services is still in its early stage.

This research fills in the gap by understanding the

factors that influence on consumer usage that might be

responsible for the slow diffusion of mobile banking

services in Aklan. The two factors identified are

motivating factors that drive toward the acceptance of

mobile banking usage (pursuance, speed of transaction,

communication, ease of use and assurance) and the impeding

factors which hinder its usage (personal desires, personal

knowledge, habit, resistance to innovation and

experience). As the researcher is a banker, the results

from this study will help banking institutions enhance

their marketing efforts on the benefits of mobile banking

by understanding the different factors that influence use

of mobile banking.

II. Research Question

Although, there is widespread popularity and use of

mobile banking in the Philippines, there is relatively

slow adoption of its service which has led this study to

seek to determine the factors that motivate toward the use

of mobile banking as well as to seek to reduce the impact

of the impeding factors that minimize its usage. This

research will attempt to answer the following questions:

  Does motivating factors have a significant positive

effect on customer’s usage of mobile banking

services in Aklan?

 Does impeding factors have a significant negative

effect on customer’s usage of mobile banking

services in Aklan?

 Is there a significant relationship between the

motivating factors, the impeding factors and the

use of mobile banking services in Aklan?

III. Preliminary Literature Review

In this technological era, customer behavior and

preference is shifted to better, faster and more

innovative banking services. One of which is mobile

banking. It refers to provision of banking and financial

services with the help of mobile telecommunication devices

(Chandran 2014). According to Bangko Sentral ng Pilipinas,

the rapid evolution of digital technology particularly of

smart phones at the turn of the new millennium

revolutionized the way banking and financial products and

services are delivered in the Philippines (The Philippine

Banking System 2016 Second Semester). As indicated by the

Philippine population median age of 24.3 years old in 2017

(Worldometers.com), which means that half of the household

population is younger than 23.4 years old, the young,

tech-savvy generation makes the adoption of new technology

more likely. As argued by the study of Czaja, et al.

(2006), the older adults are less likely than younger

adults to use technology in general, computers, and the

World Wide Web.

Despite the growth and popularity of this banking service,

the Philippines had the lowest digital-banking penetration

across 13 Asian markets, based on the study of Ramanathan

et al. (2014). According to the said study, although the

smartphone and Internet usage in the Philippines is

similar to elsewhere in developing Asia, only 12 percent

of the study’s Filipino respondents had tried Internet

banking and only 9 percent of the respondents used a

smartphone to acquire of banking services. In addition, in

the recent Unisys APAC Banking Insights Survey 2017 among

Asia-Pacific survey respondents, Filipino customers were

most likely to make transactions in a bank branch, even as

54 percent of them said they were annoyed by long bank

queues.

Based on the research of Alsamydai, et al. (2014), there

are factors namely the motivating factors (pursuance,

speed of transaction, communication, ease of use and

assurance) and the impeding factors (personal desires,

personal knowledge, habit, resistance to innovation and

experience) that influence customer intention towards use

of mobile banking services, which this study adopted in

order to test their real effect on customers in Aklan.

2. 1 Motivating Factors

Pursuance

In today’s faced paced environment, mobile banking

services allow transactions at any time and in any

condition. According to Visa’s Consumer Payment

Attitudes Survey, an annual study conducted online

across six markets in Southeast Asia, over half of

Filipinos who have tried electronic payment methods

prefer it to using cash, as of 2016 (Guno of

Philippine Daily Inquirer, August 17, 2017). In

addition, banks are able to reduce the number of

branches which in turn reduces the cost per

transaction.

Speed of Transactions

The amount of time required to perform banking

transactions by visiting banks branches is,

relatively, higher than the time to log in mobile

banking. According to Lee (2008), one of the direct

advantages that customers receive by using Internet

banking is the faster transactions speed which saves

customer time due to less need for paper work.

Communication

Despite the popularity of mobile banking, customers

are unaware of the powerful value proposition that

mobile channel affords (Johnston, et al. 2010). Over

time, mobile banking has evolved from a simple

information delivery channel to a comprehensive

banking transaction channel.

Ease of Use

Past researches in mobile banking provide

confirmation of the significant effect of perceived

ease of use (Tang & Chiang, 2009; Krishanan1, et al.,

2015). Mobile banking systems must be both easy to

learn and easy to use in order to prevent the usage

problems of mobile banking system (Alsamydai, et

al.,2014).

Assurances

Structural assurance means that there exist legal and

technological structures to ensure payment security

(Maroofi, et al. 2013). Costumers recognize the

existence of risk associated in mobile banking

transactions due to the information irregularity

between buyers and sellers which can result in

opportunistic behavior (Kim & Prabhakar, 2004).

2.2 Impeding Factors

Personal Desire

According Cook and Goette (2006), customer's desire

negatively affects their perceived usefulness of

mobile banking services. Thus, personal desire is a

critical factor in using mobile banking services

since as it decreases the perceived usefulness of

mobile banking services will decrease.

Knowledge

Based on the study of Malhotra (2011), the barrier to

the adoption of mobile banking is lack of knowledge

around the potential benefits to traditional cash-

carrying. Further, Gerrard, Cummingham, and Devlin

(2006) found that customers who have limited

knowledge about using mobile banking were more likely

to continue to use traditional banking services.

Habit

According to the study conducted by Jia, et al

(2014), mobile payment usage habit fully mediates the

relationship between online shopping habit and

behavioral intention and between cell phone usage

habit and behavioral intention. With Filipino

customers most likely to make transactions in a bank

branch, therefore, this habit is preventing customer

from using mobile banking services.

Resistance to Innovations

Based on Barati and Mohammadi (2009), increase in the

resistance to mobile banking would decrease the

intention of using mobile banking. Thus, a negative

relationship between the resistance to innovation and

the intention of using mobile financial services

would be expected.

Experience
 While a mobile banking experience generally

influences a customer's usage, the degree to which a

mobile banking experience affects a consumer’s usage

varies and is subject to the particular technical

support being examined, specifically, the use of

mobile banking depends on the technical support

itself and the skill or experience level of the

individual using it (Alsamydai, et al.,2014).

IV. Theoretical Framework

Figure 1 shows the motivating factors and the impeding

factors which are considered to influence use of mobile

banking in Aklan.

V. Contribution of the Research

The findings of the study will provide insights for banks

and other financial institutions on factors that influence

the use of mobile banking in Aklan. Through the

determination of these factors, those that motivate mobile

banking usage may be effectively utilized by the banks to

strengthen consumer preference and activity, as well as to

seek to minimize the impact of the impeding factors

through proper encouragement in alleviating consumer

fears. Banks remain competitive, innovative and keep

customer satisfaction high while consumers are able to

maximize financial services and overcome infrastructure

and geographical banking limitations.

VI. Proposed Research Methodology

The study will use the survey methodology with the

research questionnaire made by the researcher. There will

be several items used to measure the motivating and

impeding variables with each item having a corresponding 5

point Likert Scale with anchors ranging from 1 as

“Strongly Disagree” and 5 as “Strongly Agree”. For each

item listed, the respondents will be requested to mark any

of the five options given. To measure the internal

consistency of the items, the Cronbach's alpha is used.

The population of the study are banking consumers

permanently residing in the Province of Aklan, Phillipines

with at least one (1) bank account. Due to financial and

time constraints, purposive and convenience sampling will

be used for selecting the sample of the study and

electronic administration of questionnaire will be

employed to collect the data. Several statistic techniques

will be used including descriptive analysis and frequency

analysis. The collected data will be analyzed using

statistical computer programs known as SPSS Version 17.

VII. Research Plan

The study will be been structured as follows: Chapter 1

will be the introduction of the study. Chapter 2 provides

a literature review of the mobile banking and factors

influencing use of mobile banking in Aklan. Chapter 3

outlines theoretical framework, conceptual model and

hypothesis development. The research methodology, results

and discussion is presented in Chapter 4. Lastly, Chapter

5 discusses the key conclusion, significant business

implications, research limitations and future research

directions.

VIII. Research Timetable

The research timetable is provided below:

Chapter Topic % Words Months

1 Introduction 5 3,000 1
2 Literature Review 30 25,000 4
3 Methodology 20 12,000 3
4 Data Analysis 25 18,000 2
5 Conclusions and 20 15,000 2

Implications
TOTAL 100 73,000 12
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