Cell Phone Banking Adoption in South Africa – Limitations and future research

Cell Phone Banking Adoption in South Africa - Limitations and future researchWhile cell phones are important devices, these consumers’ lives do not revolve around the device. It is assumed that adults tend to view cell phones as practical devices for communication and also cell phone banking. In contrast, Hooper & Zhou demonstrates that cell phones are more highly regarded by teenagers and students. The latter group of consumers view cell phones as status symbols and necessary appendages to life. Accordingly, their usage is highest among teenagers. As such, the compatibility construct might be more prevalent among youths and difficult to detect among for adult consumers.
Like many studies, this present study has some limitations. Firstly, the factors identified as possible influences on cell phone banking adoption are not exhaustive. Secondly, the sample included mostly respondents from three South African provinces, who also happen to be adult consumers. Future studies could also consider other factors such as familiarity and cost of cell phone banking, possibly to a sample of younger consumers such as students. Comparative studies that examine differences in adoption processes between different forms of banking channels, such as between Internet, telephone, and cell phone may also be conducted to better understand the adoption of self-service banking channels.
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Cell Phone Banking Adoption in South Africa – Discussion

Overall, results suggest an increase in the rate of CB adoption among South African banking consumers. Some 43 per cent of the respondents indicated that they used their cell phones to access their bank accounts (Table 6). While the figure is almost half of those who own mobile phones, it is still a much better position compared to about 10 years ago, which was about 6 per cent. Since then, the technology supporting CB has improved and overall makes it easier for banking clients to access their accounts. Also, affordable Smartphone pricing coupled with availability of mobile services in local languages and a reliable network infrastructure United Nations Children’s Fund are contributing promoting cell phones and cell phone banking’s ease of use.
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Cell Phone Banking Adoption in South Africa – Results

Cell Phone Banking Adoption in South Africa - ResultsThe use of Survey Monkey allowed for the participation of a wide range of consumers from different backgrounds. Table 2, below, illustrates the participants’ demographic characteristics.
Respondents banking profile Tables 3a and 3b summarise respondents’ banking profile.
Scale Measurement Construct reliability
Using the Cronbach’s alpha (a) coefficient, the measuring instruments were tested for internal consistency and construct reliability. Item selection and scale purification using inter-item and item-to-total correlations were used to measure internal consistency for questions. With the exception of Section D (demographic information), all other scales (see Table 4) were tested for reliability. According to Tan and Teo, perception scales yielding a Cronbach’s alpha of at least 0.6 are regarded as reliable and internally consistent.
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Cell Phone Banking Adoption in South Africa – Research methodology

A cross-section survey method was used. Data were collected using Survey Monkey, an online survey system was used to administer the instrument. Using Survey Monkey provided ease of access to respondents from different locations.
Since the study was concerned with mobile banking, all individuals with a bank account or a cell phone potentially constituted the sampling frame. Given the challenges of drawing a random or other probabilistic sample, the snowballing technique was utilised. Such a technique minimised sampling bias and at the same time maximised the sample’s representativeness. To target as many consumers as possible from a wide range of backgrounds and taste, the online questionnaire system, Survey Monkey, was used. Researchers sent emails with the Survey Monkey link to 15 banking customers (10 in Gauteng, 3 in Limpopo, and 2 in Mpumalanga) informing them of the study and the questionnaire. In turn these participants notified potential respondents on their email lists, and they consecutively forwarded the link to other banking customers. This process was repeated numerous times between August and October 2010, in which 152 respondents completed the questionnaire. Of these 124 questionnaires were fully completed and usable for analysis. The remaining instruments were either spoilt or had too many missing values. Table 2 provides further details pertaining to the participants’ demographic characteristics.
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Cell Phone Banking Adoption in South Africa – Cell phone banking adoption framework

Cell Phone Banking Adoption in South Africa - Cell phone banking adoption frameworkPerceived risk: One of the major influencing factors around the establishment and use of new technologies for financial transactions is that of security and trust. The need for security of personal details and financial information is therefore critical to the success of cell phone banking. Some of the risks associated with CB and banking, in general, are the possibility of losing money to fraud. As a result, the lower the perception of risk involved in using cell phone banking, the more likely that it will be adopted.
Self-efficacy: refers to the confidence potential adopters have in their ability to use a specific technology. The higher the individuals’ experience and skill of using cell phone, the higher the chances the technology will be adopted.
Facilitating conditions (technology support): This construct may be interpreted to include support from both the cellular service providers as well as from the banks. Cell phone banking is more likely to be adopted if there are better facilitating conditions.
Although Rogers identifies five key predictors of adoption, recent studies confirm that three of these: relative advantage, compatibility, and complexity have consistently proved to be stable predictors across multiple disciplines. For that reason, this study considers these three as key independent variables. As shown in Figure 1, adoption, according to Rogers, is a six-step process from awareness to commitment. Meuter et al illustrates that “getting customers to try a new technology is a key barrier [to adoption]. If overcome, adoption is almost guaranteed. Numerous studies including Meuter et al. and Agarwal and Prasad considered trial as the dependent variable in adoption. For the purposes of this study, ‘CB Trial’ was operationalised to be the focal dependent variable representing adoption. Accordingly, trial was measured using a single-item question assessing whether respondents had tried using CB or not.
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Cell Phone Banking Adoption in South Africa – Cell phone banking in South Africa

The South African big four banks (ABSA, FNB, Nedbank, and Standard Bank) all provide cell phone banking services. Similar to Internet banking (IB) or ATMs, customers can access their accounts and perform various banking activities (namely transfer funds, check balances, pay bills, and apply for loans). Overall, FNB estimates that some 1.29 million South Africans are using mobile banking technology to manage their accounts. Brown et al found that approximately 6 per cent of South Africa’s 13 million cell phone subscribers in 2002 had used mobile banking services. Latest industry literature reports that more South Africans, today, prefer using cell phones over other self service banking technologies. Pienaar argues that banking customers are more willing to adopt cell phone banking than other self-service banking channels. To illustrate some 28 per cent of banking customers use mobile banking services compared to about 16 per cent that utilise Internet banking.
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Cell Phone Banking Adoption in South Africa – Introduction

Cell Phone Banking Adoption in South Africa - IntroductionIn the last three decades, advancements in information and communication technologies (ICTs) forever revolutionised banking. Once, a bank was confined to four walls and a roof; today that is no more. Automated teller machines (ATMs), debit cards, the Internet, and mobile phones now can all represent a bank, in that consumers can use these devices to conduct banking independent of a bank branch. Banking technology experts including Devlin (1995) and Devlin and Yeung (2003) agree, and explain how technology has tipped remote (anytime and anywhere) banking into the mainstream Western culture. For instance, ATMs or cash machines iconify 21st Century banking institutions. To some extent, this also applies to many African countries. For that reason, Brown, Cajee, Davies, and Stroebel (2003) posit that the widespread adoption of ICTs and mobile phones in South Africa provides opportunities for banking services to reach critical masses of consumers. The latter is particularly applicable even in remote areas inaccessible to bank branches (Kumar & Gupta, 2008). Despite this, uptake of cell phone banking (CB) is still low.
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