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.
While industry literature is abounding with accounts of an upsurge in mobile banking usage, most of what is known about CB and its adoption is reported in scientific literature from the developed world. While this literature provides valuable lessons, there is still limited research in the area of adoption of banking technologies undertaken in developing countries. Research on the factors influencing adoption of cellular banking is still limited. Thus, it is opportune to investigate factors influencing the adoption of cell phone banking. In the following section, the CB adoption framework is discussed.
Consistent with Brown and colleagues, this study utilises Rogers’ Innovation decision model (IDPM). This model has been tested and widely applied in numerous settings including education, psychology, and marketing. The literature consistently illustrates that adoption of new innovations is influenced by potential adopters’ perceptions towards the innovation explains:
Innovations that are perceived by individuals as having greater relative advantage, compatibility, trialability, and less complexity will be adopted more rapidly than other innovations. Past research indicates that these five qualities are the most important characteristics of innovations in explaining the rate of adoption.
The innovation characteristics are defined next.
Relative advantage: – Agarwal and Prasad demonstrate that the advantage an innovation has relative to another method is positively related to its rate of adoption. It is therefore possible to suggest that the advantages that cell phone banking offers over other banking methods would affect its rate of adoption. Among these advantages are anytime and anywhere banking that is convenient, since banking customers can access their accounts using their cell phones. Perceived compatibility: – Compatibility refers to how well a technology fits with an individual’s working and lifestyle, values, and needs. In the context of cell phone banking, compatibility is the extent to which cell phone banking is in line with how the banking customers live their lives. For example, if a customer uses her cell phone rather frequently and for numerous functions including calendar, camera, and communicating, they have a higher degree of compatibility than someone who rarely uses cell phones. As a result, those who feel banking via cell phones is compatible with their lifestyle would more likely adopt cell phone banking.
Perceived complexity: – The level of difficulty of using an innovation is inversely related to its adoption. Consequently, the greater the perceived complexity of conducting banking via the cell phone, the less likely its adoption will be.
Trialability: – Potential adopters of a new technology who are allowed to experiment first will feel comfortable with the technology, and thus are more likely to adopt it. Thus, the adoption of cell phone banking is more likely if the technology is demonstrated to the user or if it can be used on a trial basis first.