Survey of Research Models on Factors Affecting the Decision to Use Internet Banking Services in the World.

As a business customer, you can effectively monitor your financial situation. Not only that, you can also transfer this information to your accounting software to design your own reports.

Payment transfer

With this service, customers can transfer money between accounts within the same or different banking systems or transfer money from an account to a recipient using an ID card. Transfer money to units that cooperate with the bank (finance, insurance, securities, telecommunications companies...) to pay interest, loan principal, securities investment, insurance premiums, service fees or other payment contents.

Depending on each bank, there will be different transfer limits and fees for corporate or individual customers.

Maybe you are interested!

Advantages and disadvantages of Internet Banking Advantages of IB

For customers

Convenience : Internet banking has many different services, 24 hours a day, 7 days a week, can access transaction accounts through a computer or other smart device. Customers can choose to suit their individual needs, can transact quickly and conveniently at any time and anywhere, and can control their financial resources. This is meaningful for customers who have little time to go to the bank, customers who need to transact with small amounts of money, customers who need to access information, manage accounts, manage investment portfolios such as stocks...etc.

Save time : With the nature of transactions via the internet with simple and quick transaction procedures, the time to perform a transaction via the internet can be done in a few minutes, at the same time, customers do not waste time going to the bank, filling out forms, queuing, waiting for their turn to be supported by a bank teller.

Cost savings : Compared to going to the bank to make transactions, making transactions through internet banking saves more costs because you do not have to pay the cost of going to the bank to make transactions.

For Banks

Diversified banking services : In addition to traditional banking services, the development of Internet Banking services contributes to diversifying banking products and services through products and services available online, which will attract and increase customers for banks.

Customer diversity : customers coming to the bank will be more diverse in terms of geographical scope, customers can use the service when not near the bank headquarters.

Cost savings : Banks save costs on organizing and equipping transaction offices, and do not have to hire many direct transaction staff.

Disadvantages of Internet Banking

For customers

Psychological factors : Internet Banking services transact via the internet, via a bank website, many customers are not familiar with transactions via the internet environment so they may be hesitant, worried about the success of the transaction and when customers are used to using cash in payment, it will be difficult to switch to a form of payment using technology like this.

Time consuming to register and research products : For customers who are limited in using computers and the internet, accessing and learning about this service can take a lot of time. At the same time, to register for internet banking transactions with the bank, customers may have to provide a username and sign a registration form at a bank branch.

Transaction risk : customers may be at risk when the bank's internet banking system is not secure due to not being upgraded or using an error system.

At times, customer accounts and personal information can be stolen by hackers using more advanced technology.

Lack of perfect information : Compared to going to the bank to transact directly, when conducting IB transactions, customers cannot receive complete information like through a specialized bank officer, nor do they have the opportunity to exchange new information with customers and partners at the transaction location.

For Banks

Large investment capital : To build an IB system requires a large initial investment capital to choose modern, oriented technology, in addition to costs for backup systems, maintenance costs, system maintenance and development, and future technology innovation. At the same time, it is necessary to have a team of qualified engineers and technical staff to manage and operate the system... an amount of money that not every commercial bank is willing to invest. Not to mention whether the investment is effective or not depends on the country's communication infrastructure, or in other words, it depends on the common efforts of the whole country, not just any commercial bank. Before implementing IB, banks need to consider whether the benefits that this distribution channel brings are enough to offset the initial investment costs.

Risks : IB contains many risks, especially transaction risks. This is one of the main reasons why customers and commercial banks come to this service.

Risks in Internet Banking operations

Credit risk

Credit risk is the risk to income, capital arising from customers not meeting the terms of the credit contract with the bank. In internet banking transactions, customers can transact anywhere, helping the bank expand its geographical scope to serve customers, however, the bank

Lack of customer contact is a challenge for organizations in verifying customer identity. In addition, verifying collateral and completing agreements to ensure credit safety is also a big challenge. Requires proper bank management and state control of internet banking.

Interest rate risk

Interest rate risk is the risk to earnings, capital arising from changes in interest rates. Internet banking allows banks to access loans, loans and other relationships from a wider range of customers than other forms of transactions, and greater access to customers who are always looking for the best interest rates will result in higher risks.

Liquidity risk

Liquidity risk is the risk to earnings and capital arising from the bank’s inability to pay, convert assets into cash in a timely manner, or borrow to meet payment contract requirements. Similar to interest rate risk, IB allows the bank to access loans, advances, and other relationships from a wider range of customers than other forms of trading, which also leads to higher liquidity risk.

Price Risk

Price risk is the risk to earnings and capital due to changes in the value of a portfolio of financial instruments. This risk arises in the process of lending in foreign currencies or in the process of trading foreign currencies of the bank when the exchange rate fluctuates in an unfavorable direction. Banks may face many risks when promoting foreign currency borrowing, lending or trading with customers from many countries, in different currencies, so it is necessary to maintain price risk management.

Foreign Exchange Risk

Foreign exchange risk is the risk that a bank's loan or lending portfolio will be exposed to exchange rate fluctuations. Foreign exchange risk can be incurred

by political, social, or economic developments. The consequences can be adverse if one of the currencies of the country in which the investment is made is devalued relative to the currency in which the investment was initially made. Through internet banking, the activity of promoting multinational investment activities is exposed to greater exchange rate risk.

Transaction Risk

Transaction risk is the actual and potential risk to earnings and capital arising from fraud, error and failure to deliver products and services, maintain a competitive advantage and manage information. Transaction risk is inherent in every product and service offered and includes product development and delivery, transaction processing, systems development, computer systems, product and service complexity, and the internal control environment. Transaction risk may exist with electronic banking products, especially if the business lines are not adequately planned, implemented and monitored. Banks that provide financial products and services via the internet must be able to meet customer expectations. Banks must also ensure the ability to provide accurate, timely and reliable services to increase customer confidence in their brand. Customers who transact via the Internet are often impatient with the shortcomings of banks, on the contrary, what they expect is that the products are always available continuously and the website is easy to use. Therefore, banks that provide this service need to ensure good service to customers to avoid transaction risks that affect the bank's reputation, causing credit risks and liquidity problems.

Compliance risk

Legal risk is the current and potential risk to a bank's earnings and capital arising from violations or non-compliance with laws, regulations, rules, customs or ethical standards. Legal risk arises in cases where the laws and regulations on service operations are unclear and not strictly controlled.

Legal risks can lead to banks being fined or having to pay compensation for damages, invalidating contracts, causing banks to lose their reputation, lose business opportunities, lose the potential to expand operations and reduce the effectiveness of commitments in contracts. Most customers using e-banking services continue to use the services of other banks. To limit transaction risks, banks need to ensure that product information and website information are delivered to customers accurately.

Strategic risk

Strategic risk is the current and potential impact on earnings that arises from poor business decisions, poor execution of decisions, or inadequate response to industry changes. The resources required to implement a business strategy are both tangible and intangible (information channels, distribution networks, management capabilities). A competent manager understands the risks associated with e-banking before making decisions because the internet banking products and technologies that the bank offers may not be consistent with the strategic objectives. It is also possible that the bank will not have sufficient resources and expertise to detect, monitor, and control the risks in IB.

Reputation risk

Reputational risk is the current and potential risk to a bank’s earnings and capital arising from negative public information affecting the bank’s ability to establish new relationships or maintain existing relationships. This risk arises when the bank is unable to meet the borrowing needs of its customers, the supply system is unreliable or inefficient, or customer inquiries are not responded to promptly.

Premises for developing Internet Banking

Public understanding and acceptance

Customers are used to face-to-face transactions and cash payments. Changing this habit is not easy.

Furthermore, Internet Banking is a new distribution channel, and it is not easy to convince customers to use it. Therefore, public understanding of Internet Banking and its benefits is essential. Banks need to have popular campaigns to make customers understand the advantages as well as guide them to use this service.

Information and communication technology infrastructure

To develop IB, first of all, there needs to be an infrastructure that is based on the widespread and popular Internet. The rapid advances in the information and communication technology industry in recent times have created the premise for IB activities.

The development of information and communication technology infrastructure will help create convenience, accuracy, speed and safety of the network system. Once customers have abandoned the habit of direct transactions and accepted the transaction method through IB, clearly understand the advantages, have the knowledge and skills to make transactions, the desire to use IB services will depend on the convenience, accuracy and safety that the service can ensure.

The IB system requires a large workforce well-trained in information and communication technology to provide the necessary uses, meet support requirements and transfer appropriate technical knowledge. Lack of skills to work on the internet and work with other modern media, limited ability to use English - the basic language of the internet are also obstacles to the development of IB.

Online payment and product service supply system

IB cannot develop without an online delivery system for goods, services and payments. An online delivery and payment system generally involves network services that provide goods or services and pay for those goods and services. Goods here can include physical goods or electronic goods such as electronic documents, photos, music. Similarly, services here can be traditional services such as hotels or ticket bookings, as well as

It can be electronic services such as electronic financial market analysis. It is the development of this system that has promoted the development of IB.

2.3. Review of research models on factors influencing the decision to use Internet Banking services in the world.

During the second half of the 20th century, many theories were developed and tested to study user acceptance of technology. The following theories can be mentioned:

Fishbein and Ajzen (1975) proposed the Theory of Reasoned Action (TRA).

Ajzen (1991) proposed the Theory of Planned Behavior (TPB).

Davis (1989) proposed the Technology Acceptance Model (TAM)

These theories have been recognized in practice as useful tools in predicting user attitudes and their impact on an organization.

2.3.1. Technology Acceptance Model ( TAM).

2.3.1.1. General introduction to the TAM model.

The TAM model, which is modeled on the TRA, is widely recognized as a reliable and fundamental model in modeling user acceptance of information technology (IT).

The TAM model has the following 05 (five) main variables:

- External variables (exogenous variables) are variables that influence perceived usefulness (Perceive Usefulness-PU) and perceived ease of use (Perceive Ease of Use-PEU). These external variables are training, opinions or different concepts in using the system.

- Perceive Usefulness (PU): Users certainly perceive that using a particular application system will increase their efficiency/productivity for a particular task.

Comment