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CHAPTER ONE

INTRODUCTION
Background

Internet is a source that is comprised of interconnected


computers through networking, with a common purpose of
sharing information with one another (December, 1996).
Internet is defined a massive collection of millions of
computer networks which are connected with one another by
the means of routers which use special protocols (Herrit,
2001).

The term 'online' means the availability of the information


or the access of the information, which is available
through the internet or any other network such as an
intranet. All forms of internet supporting mediums such as
websites; wire transfer etc. are specifically related to
online information access as well (Auty, 2006).

A bank is a financial institution or organization which has


the ability to accept the deposited money. The deposited
money can be withdrawn the means of checks or any
alternative means like automated teller machines etc
(Ahmadu & Hughes, 2006).

A bank can also be referred as a corporation, with a major


portion of its business operations consisting of receiving
deposits and making these deposits available for loans. It
can also operate by means of fiduciary powers. Commercial
banks, trusted companies, mutual saving banks, building and
loan associations, cooperative banks, and federal savings

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etc are all included in the banking sector (“Editorial
Staff”, 2005).

A virtual bank is referred to as an organization, which


delivers services and operations similar to the real bank,
by a virtual medium, which can be internet, telephone, or
any other virtual means of delivery (“Quarterly Bulletin”,
2000).

The State National Bank of the Big Spring, Texas was the
first ever bank in the world to launch the internet banking
services. Therefore, the pioneer of internet banking is the
United States of America (Keyes, 2000).

Internet banking started in 1980s. At that time, there were


very limited services such as the payment of the bills and
transfer of money in between the accounts through the
telephone line using computers (Federal Reserve Bank of
Atlanta, 2007).

The trend to use the Internet banking services among the


people started to grow in the mid 1990s. By the end of the
year 1996, there were around one and a half to two million
internet banking users in the United States of America (IMF
Working Paper, 2004).

By the end of the year 1998, banks all around the world
were offering more than 200 different kinds of internet
banking services. By the year 2000, the number of internet
banking services jumped to 819 (Bidgoli, 2004).

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In Pakistan, the transformation from manual banking to the
Internet banking took place in the year 2002 when the
governor of the State Bank of Pakistan instructed all the
banks of Pakistan to introduce and operate by the means
Internet Banking. In the same year, Habib Bank Limited in
Pakistan also launched its electronic banking services
(“Daily Times”, 2002).

Whereas, in the year 2004, Askari Bank in Pakistan too


offered Internet banking service. These services included
checking account statement, transferring funds, checking
and verifying balance services, changing password etc. They
labeled their Internet Banking service as Askari I-Net
Banking (“Daily Times”, 2004).

Internet Banking operates through a virtual mechanism with


real time banking transactions and its operations are truly
based on the internet network. As compared to home banking,
in Internet banking there is no need of the software being
installed for having access. This enables access to
internet banking from anywhere, anytime and from any
computer all around the world. They offer twenty-four hours
service seven days a week, which further demonstrates their
essential power to be pursued (Khosrowpour, 1998).

The importance of the online banking from a strategic point


of view holds core importance for the banking sector of the
present age. The usability of the Internet banking services
gives a mammoth and phenomenal competitive advantage for
the today's banks (Karat, Blom & Karat, 2004).

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User acceptance with regard to the technology is related
with the positive willingness of a user for the activities
designed for the technology (Dillon & Morris 1996).

A rightly designed internet banking model can increase the


user acceptance of the internet banking and other
operations. This also helps the banks to attract new
customers and enables the banks to fully communicate the
banking operations to their users (Cronin, 1997).

Problem Identification

Internet banking comes up with a direct virtual interface


with its consumers. Since it operates through a virtual
mode on a computer with a virtual web page interface;
therefore, there can be different concerns that can arise
within the mind of the consumer while using it. A consumer
may get confused using the internet banking interface, the
consumer may just get annoyed with the interface and try to
avoid it or he/she may just perceive a negative feedback.

The Internet banking offers an abundance of features on its


interface in the form of services, contents and the amount
of help and guidelines offered in the online transactions.
Based upon such attributes one can improve the usefulness
of the Internet banking with respect to its consumers and
further enhance its image, retain customer and take the
competitive advantage over the other banks.

This calls for a need to come up with such an interface


that is more convenient and user friendly to the consumers.
The best way to do so is to get the end user's feedback

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because they are the ones ultimately operating these
systems. There is a need to identify the consumers'
response towards the internet banking usage in terms of its
interface offerings to its consumers, so that the overall
layout becomes more satisfactory from the perceptions and
beliefs of the consumers

Problem Statement

For the evaluation of users' acceptance towards internet


banking, there is a need to identify such attributes which
serve determinants for internet banking acceptance.

Research Question

What are the determinants of the users’ acceptance towards


the Internet banking features?

Objectives of the Study

The major objectives of this study regarding users’


Internet banking acceptance are

 To evaluate the overall perception of the consumer’s


towards Internet Banking.

 To extract the consumers’ feedback and response


regarding internet banking interface in the form of
different categories.

 To help develop an internet banking interface this is


acceptable from consumers’ point of view.

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Rationale Of the Study

One field that has been growing all over the world is
information technology. It is covering all the areas of
life, which makes its usage important. It holds a core
position in the banking sector as well. The banking sector
has started to increase the implementation of the
information technology systems, which has lead to the
growth of internet banking. Its prompt transaction
attributes, speedy delivery of the transactions, and its
availability provides substantial convenience to its users.

However, the internet banking interface holds core


importance as well. Since it is directly exposed to the
customers, the interface comes up with the most essential
attributes. The best way to proceed with the internet
banking operations for the customer can truly be based upon
customized and personalized features being delivered to the
customers. Such attributes can boost the users' acceptance
towards the Internet banking to a gigantic rate.

This study will help to analyze and investigate the


consumers' acceptance or reluctance towards online banking
in terms of the internet banking attributes exposed in the
online environment in the form of services and interface.
Further more, by evaluating and identifying the consumers'
key concerns, this study will help in the development of
interface which will be more acceptable for the users and
this eventually will enhance the internet banking usage
giving a competitive advantage for any bank.

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Scope of the study

This study focuses on the users’ who are exposed to the


internet banking operations. The internet banking users
from Islamabad will be selected for this research. For this
purpose, a descriptive study will be conducted which will
comprise of core variables such as customization,
usefulness, ease and accessibility etc. On the basis of the
findings of this study, this study can be very much helpful
in terms of a coming up with such kind of a website
interface that can be more user friendly and meaningful for
the internet banking users.

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CHAPTER TWO
LITERATURE REVIEW
During the years 2003 to 2007, Internet banking has grown
with an average rate of fifteen percent. However, according
to several experts, this growth in the future can decline
and can come from double figures for the single figure
growth. For this, they have urged the banks to come up with
customer attractive offerings online (“Community Banker”,
2007).

Statistics have also specifically found, that the Internet


based Home Equity Loans are also in particular expected to
grow at fifteen percent in the upcoming years. Plus, there
are also expectations that new online mortgage
organizations will further increase as well (Swann, 2007).

However, most recently according to Javelin Research,


Internet banking expects to grow at an average of 4.6
percent till the year 2013. Additionally, the biggest area
of operations in the online banking in the future will be
the online bill payment. Currently only forty nine percent
banks are offering the bill payment services online. As a
result, there are enormous opportunities regarding this
service for multiple banks (“Community Banker”, 2009).

According to the estimates of e-Marketer firm, minimum one


hundred and one million people all around the world will do
financial operations by means of Internet Banking. TOWER
GROUP firm predicts that, by the year 2010, twenty five

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percent of the current Internet banking consumers will do
operations through their cell phones (Horton, 2007).

With the arrival of many innovative online transactional


mechanisms, the customers' monetary transactions have
enhanced dramatically. With the ease and flexibility of
such innovative technologies for financial transaction
online, the consumers have found these services very
valuable. Plus, the customers can easily transfer funds
from country to country as well. Plus these online
financial services have given the customers a complete
control over financial transactional information as well
(Plazak, 2007).

In United States of America, in the year 2008, twenty two


percent of the consumers had a link in particular with the
Online or Internet Banks. These figures were of those
banks, which had no physical branch and were only operating
virtually through the Internet. Majority of the consumers
of those banks were the young ones. Furthermore, the
average consumers' ages on the Internet bank were nearly
forty-eight years (Swann, 2008).

Similarly, according to the predictions of FORRESTER


Research, in the upcoming five years the online banking
will in particular grow by fifty-five percent. Plus, this
increase will come from the young online banking consumers'
segment, as the young consumers' segments will be more
likely to adopt and understand the upcoming online
offerings by the banks and other financial institutions
(Scorborough, 2008).

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However, along with the growth of the Internet Banking
there are certain risks, which do exist. One of the biggest
one is the vulnerability of the online banks to expose
consumers' records to the third party. During the year 2007
only, about one hundred and fifty records of online banking
consumers were exposed to the strangers. Those strangers
were identified as crooks and hackers (Horton, 2007).

Furthermore, during the year 2006, seventy eight percent of


the biggest financial institutions have admitted, an
external security lapse of financial transactions online.
Moreover, forty nine percent of them also admitted an
internal security lapse of financial transactions as well
(Horton, 2007).

According to various online banking transaction observers,


currently the banking institutions online offer very
limited services. These typically included invoicing,
payroll, billing, taxation and payment transactions etc. As
a result, there is a gap between consumers' expectations
and banking operations online. They have suggested that
there should be consumer focus online services with an
immediate implementation (“Community Banker”, 2008).

Digital Insight, which profoundly analyzes the online


consumers and financial institutions have suggested, that
at online, the financial institutions' websites or any
other interface should give a complete overview of the
amount of the money regarding consumers. This includes the
records related to cash inflow and cash outflow, plus the
cash in hand. This can help the consumers to evaluate their

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financial positions, and it will help them to achieve their
financial goals more efficiently (“Community Banker”. 2008).

Numerous experts are urging the banks to bring into account


steps through which the consumers' acceptability can
increase, regarding successful banking operations over the
Internet for this purpose integration of the online and
offline environment is extremely important in the Internet
Banking. For example, this integration can be specifically
done by offering a live chat or conversation feature on the
website. This will allow the customers to get direct
assistance from the banks regarding any queries related to
online banking operations (Swann, 2007).

Similarly, the experts are also of the opinion that the


website interface for the online and Internet banking
should be simple, understandable and user-friendly. Experts
have proposed that a websites, allowing the consumers to
make fewer numbers of clicks and reducing the typing work
can prove out to be very worthy. Moreover, offering
additional services like smart tips for home buying, loan
facilities etc (Swann, 2007).

In 2008, according to the findings and statistics of Gallup


Research organization, those consumers which were more
satisfied with the bank's website or mobile banking
services, they were likely to be more engaged with the
overall services of that bank. The findings showed that
those consumers who were extremely satisfied with the
mobile banking and website services of the bank, they were
likely to be fifteen times more engaged with the bank as
well (Scorborough, 2008).

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The findings also concluded that, the online financial
institutions should also on their web interface at least
three distinct features. Their findings confirmed this
also, as those consumers who were using three or more
popular features online, were more likely to be more
engaged with that bank (Scorborough, 2008).

Experts have also specifically stressed for a constant


interactions between the online banking consumers and the
banks. In fact, they have particularly suggested that
interactivity and regular support should be at every touch-
point between the banks and customers whether online or in
the real world (Scorborough, 2008).

One study also specifically found, that the word of mouth


campaigns has led the customers to adopt with the online
banking (“Bank Marketing”, 2008). The banks in the present
era should also be in particular capable of opening bank
accounts online in their websites as well (“Bank
Marketing”, 2008).

Some experts have recommended offering sweepstakes at their


bank websites as well. These sweepstakes can include
computer gifts, a photo printer, music or even movies too.
also the names and pictures of the winners, should be
specifically displayed on the sweepstake web page of the
bank's website as well. Whereas; in return the banks can
get the consumers' contact details for future promotions as
well (Hershberger, 2009).

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CHAPTER THREE
METHOD
Sample

The sample size for this paper was three hundred


respondents. The sampling was done on the random basis;
therefore, any individual with Internet banking usage
attribute regardless of age or some other demographic
attribute were selected for this study. However, their
evaluation was analyzed on the basis of random sampling in
order to see results.

Instrument and Measures

Data was extracted from both the primary sources and the
secondary sources. For secondary data sources, the
variables regarding online banking usefulness,
personalization, effectiveness, alliance services,
accessibility, convenience and attitude were analyzed
through the previously published research papers placed on
EBSCO, SPRINGER LINK, Online electronic books and Blackwell
Synergy.

For primary data sources, questionnaires were distributed


using a five point lickert scale carrying measuring
characteristics of “Strongly Agree”, “Agree”, “Neither
Agree/Disagree”, “Disagree” and “Strongly Disagree”. The
questionnaires were adopted and extracted from the already
published article (Pikkarainen, Pikkarainen, Karjaluoto &
Pahnila, 2004).

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The initial questionnaires contained demographic variables
such as age and gender. The second part of the
questionnaire contained twenty-three items regarding the
factors of consumers' acceptance of online banking such as
the amount of information, perceived usefulness, perceived
ease of use, perceived enjoyment and security and privacy.

Procedure

A descriptive nature of the study was conducted in this


research. Data was collected from both the secondary and
primary means. For the primary means, questionnaires were
specifically retrieved from the already published research
paper (Pikkarainen, Pikkarainen, Karjaluoto & Pahnila,
2004).

After collecting the data, its frequency distribution was


analyzed, and accordingly the results and discussions were
analyzed. Further recommendations and solutions were
proposed to create more effective interface for the online
banking users.

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CHAPTER FOUR
RESULTS AND DISCUSSION

Table 4.1

Frequency Distribution of the responses with respect to Gender


(n=350).

Cumulative
Frequency Percent Valid Percent Percent
Female 88 25.1 25.1 25.1
Male 262 74.9 74.9 100.0
Total 350 100.0 100.0

Frequency Distribution of the Responses with respect to Gender (n=350).

Female
Male

Figure 4.1

The numbers of respondents for this study are three hundred


and fifty. Seventy five percent respondents are male,
whereas; twenty five percent respondents are female.

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Table 4.2

Frequency Distribution of the responses with respect to Age (n=350).

Frequency Percent Valid Percent Cumulative Percent

22-30 years 216 61.7 61.7 61.7

31-40 years 132 37.7 37.7 99.4

41-50 years 1 .3 .3 99.7

51-60 years 1 .3 .3 100.0

Total 350 100.0 100.0

Figure 4.2

Sixty two percent respondents are in between twenty two to


thirty years of age. Thirty eight percent respondents are
in between thirty one to forty years of age. Less than one
percent respondents are in between forty one to fifty years
of age. Less than one are in between fifty to sixty one.

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Table 4.3

Frequency Distribution of the respondents with respect to online banking information


(n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 69 19.7 19.7 19.7
Agree 24 6.9 6.9 26.6
Neither Agree/Nor Disagree 30 8.6 8.6 35.1
Disagree 166 47.4 47.4 82.6
Strongly Disagree 61 17.4 17.4 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


information (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.3

Forty seven percent respondents are disagreeing that they


have enough information regarding online banking. Twenty
percent respondents are strongly agreeing, whereas;
seventeen percent respondents are disagreeing about it.
Seven percent respondents are agreeing, while nine percent
respondents are neither agreeing nor disagreeing.

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Table 4.4

Frequency Distribution of the respondents with respect to online users having enough
information regarding benefits of using online banking (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 43 12.3 12.3 12.3
Agree 66 18.9 18.9 31.1
Neither Agree/Nor Disagree 12 3.4 3.4 34.6
Disagree 127 36.3 36.3 70.9
Strongly Disagree 102 29.1 29.1 100.0
Total 350 100.0 100.0

`
Frequency Distributionof the Respondents withrespect to online users
havingenoughinformationregarding benefits of usingonline banking
(n=350).
Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.4

Thirty six percent respondents are disagreeing that they


have enough information regarding benefits of using online
banking. Twenty nine percent respondents are strongly
disagreeing, nineteen percent respondents are agreeing,
whereas; twelve percent respondents are strongly agreeing
about it. Three percent respondents are neither agreeing
nor disagreeing.
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Table 4.5

Frequency Distribution of the respondents with respect to online banking enabling the
online users to utilize banking services more quickly (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 75 21.4 21.4 21.4
Agree 145 41.4 41.4 62.9
Neither Agree/Nor Disagree 22 6.3 6.3 69.1
Disagree 34 9.7 9.7 78.9
Strongly Disagree 74 21.1 21.1 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


enabling the online users to utilize banking services more quickly (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.5

Forty one percent respondents are agreeing that online


banking is enabling the online users to utilize banking
services more quickly. Twenty one percent respondents are
strongly agreeing, whereas twenty one percent respondents
are strongly disagreeing about it. Ten percent respondents
are disagreeing, while six percent respondents are neither
agreeing nor disagreeing.

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Table 4.6

Frequency Distribution of the respondents with respect to online banking improving


the performance of banking services (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 128 36.6 36.6 36.6
Agree 116 33.1 33.1 69.7
Neither Agree/Nor Disagree 40 11.4 11.4 81.1
Disagree 10 2.9 2.9 84.0
Strongly Disagree 56 16.0 16.0 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


improving the performance of banking services (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.6

Thirty seven percent respondents are strongly agreeing that


the online banking improves the performance of the banking
services. Thirty three percent respondents are agreeing,
while sixteen percent respondents are strongly disagreeing.
Eleven percent respondents are neither agreeing nor
disagreeing. Three percent respondents are disagreeing
about it.

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Table 4.7

Frequency Distribution of the respondents with respect to online banking improving


productivity (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 104 29.7 29.7 29.7
Agree 53 15.1 15.1 44.9
Neither Agree/Nor Disagree 46 13.1 13.1 58.0
Disagree 100 28.6 28.6 86.6
Strongly Disagree 47 13.4 13.4 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


improving productivity (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.7

Thirty percent respondents are strongly agreeing that the


online banking helps to improve productivity. Twenty nine
percent respondents are disagreeing, whereas; fifteen
percent respondents are agreeing, while thirteen percent
respondents are neither agreeing nor disagreeing. Thirteen
percent respondents are strongly disagreeing about it.

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Table 4.8

Frequency Distribution of the respondents with respect to online banking making it


easier for the online users to utilize banking services (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 32 9.1 9.1 9.1
Agree 50 14.3 14.3 23.4
Neither Agree/Nor Disagree 18 5.1 5.1 28.6
Disagree 92 26.3 26.3 54.9
Strongly Disagree 158 45.1 45.1 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


making it easier for the online users to utilize banking services (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.8

Forty five percent respondents are strongly disagreeing


that online banking is making it easier for the online
users to utilize banking services. Twenty six percent
respondents are disagreeing. Fourteen percent respondents
are agreeing, whereas; nine percent respondents are
strongly agreeing about it. Five percent respondents are
neither agreeing nor disagreeing.

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Table 4.9

Frequency Distribution of the respondents with respect to online banking users finding
it easy to learn new features (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 41 11.7 11.7 11.7
Agree 37 10.6 10.6 22.3
Neither Agree/Nor Disagree 53 15.1 15.1 37.4
Disagree 154 44.0 44.0 81.4
Strongly Disagree 65 18.6 18.6 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents withrespect toonline banking


users finding it easy tolearnnewfeatures (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.9

Forty four percent respondents are disagreeing that online


banking users find it easier to learn new features.
Nineteen percent respondents are strongly disagreeing
while; fifteen percent respondents are neither agreeing nor
disagreeing. Twelve percent respondents are strongly
agreeing about it, whereas; eleven percent respondents are
agreeing.

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Table 4.10

Frequency Distribution of the respondents with respect to online banking users finding
it easy to do things, which they want in online banking operations (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 41 11.7 11.7 11.7
Agree 24 6.9 6.9 18.6
Neither Agree/Nor Disagree 37 10.6 10.6 29.1
Disagree 109 31.1 31.1 60.3
Strongly Disagree 139 39.7 39.7 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents withrespect toonline banking


users finding it easy to dothings, which they want in online banking
operations (n=350).
Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.10

Forty percent respondents are strongly disagreeing that


online banking users find it easier to do things, which
they want in the banking operations. Thirty one percent
respondents are disagreeing. Twelve percent respondents are
strongly agreeing about it, while eleven percent
respondents are neither agreeing nor disagreeing whereas
seven percent respondents are agreeing.

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Table 4.11

Frequency Distribution of the respondents with respect to understandable and clear


interaction of the users with online banking (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 46 13.1 13.1 13.1
Agree 47 13.4 13.4 26.6
Neither Agree/Nor Disagree 46 13.1 13.1 39.7
Disagree 134 38.3 38.3 78.0
Strongly Disagree 77 22.0 22.0 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to understandable


and clear interaction of the users with online banking (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.11

Thirty eight percent respondents are disagreeing that the


online banking is understandable and clear in terms of its
interaction with the users. Twenty two percent respondents
are strongly disagreeing, while thirteen percent
respondents are neither agreeing nor disagreeing. Thirteen
percent respondents are agreeing, whereas; thirteen percent
respondents are also strongly agreeing as well.

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Table 4.12

Frequency Distribution of the respondents with respect to online banking users, finding
online banking as flexible to interaction (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 32 9.1 9.1 9.1
Agree 62 17.7 17.7 26.9
Neither Agree/Nor Disagree 37 10.6 10.6 37.4
Disagree 147 42.0 42.0 79.4
Strongly Disagree 72 20.6 20.6 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


users, finding online banking as flexible to interaction (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.12

Forty two percent respondents are disagreeing that online


banking users are finding online banking flexible to
interact. Twenty one percent respondents are strongly
disagreeing, whereas; Eighteen percent respondents are
agreeing, whereas; eleven percent respondents are neither
agreeing nor disagreeing. Nine percent respondents are
strongly agreeing about it.

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Table 4.13

Frequency Distribution of the respondents with respect to ease for online banking users
to become skillful for using online banking (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 27 7.7 7.7 7.7
Agree 57 16.3 16.3 24.0
Neither Agree/Nor Disagree 8 2.3 2.3 26.3
Disagree 119 34.0 34.0 60.3
Strongly Disagree 139 39.7 39.7 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to ease for online


banking users to become skillful for using online banking (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.13

Forty percent respondents are strongly disagreeing that it


is easier for online banking users to become skillful
regarding online banking. Thirty four percent respondents
are disagreeing, while sixteen percent respondents are
agreeing, eight percent respondents are strongly agreeing
about it, whereas; two percent respondents are neither
agreeing nor disagreeing.

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Table 4.14

Frequency Distribution of the respondents with respect to ease of using online banking
(n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 47 13.4 13.4 13.4
Agree 32 9.1 9.1 22.6
Niether Agree/Nor Disagree 36 10.3 10.3 32.9
Disagree 157 44.9 44.9 77.7
Strongly Disagree 78 22.3 22.3 100.0
Total 350 100.0 100.0

Frequency Distributionof the respondents with respect toease of using


online banking (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.14

Forty five percent respondents are disagreeing that online


banking is easier to use. Twenty two percent respondents
are strongly disagreeing, Thirteen percent respondents are
strongly agreeing, while ten percent respondents are
neither agreeing nor disagreeing, whereas; nine percent
respondents are agreeing about it.

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Table 4.15

Frequency Distribution of the respondents with respect to online users taking online
banking as fun (n=350)

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 147 42.0 42.0 42.0
Agree 132 37.7 37.7 79.7
Neither Agree/Nor Disagree 12 3.4 3.4 83.1
Disagree 47 13.4 13.4 96.6
Strongly Disagree 12 3.4 3.4 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online users


taking online banking as fun (n=350)

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.15

Forty two percent respondents are strongly agreeing that


they take online banking as fun. Thirty eight percent
respondents are agreeing. Thirteen percent respondents are
disagreeing, whereas; three percent respondents are
strongly disagreeing about it. Three percent respondents
are neither agreeing nor disagreeing.

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Table 4.16

Frequency Distribution of the respondents with respect to online users taking online
banking as pleasant (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 33 9.4 9.4 9.4
Agree 68 19.4 19.4 28.9
Neither Agree/Nor Disagree 15 4.3 4.3 33.1
Disagree 153 43.7 43.7 76.9
Strongly Disagree 81 23.1 23.1 100.0
Total 350 100.0 100.0

Frequency Distributionof the Respondents with respect to online users


takingonline bankingas pleasant (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.16

Forty four percent respondents are disagreeing that online


banking usage is pleasant. Twenty three percent respondents
are strongly disagreeing, nineteen percent respondents are
agreeing, whereas; nine percent respondents are strongly
agreeing about it. Four percent respondents are neither
agreeing nor disagreeing.

30
Table 4.17

Frequency Distribution of the respondents with respect to online banking users taking
online banking as a positive move (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 124 35.4 35.4 35.4
Agree 109 31.1 31.1 66.6
Neither Agree/Nor Disagree 22 6.3 6.3 72.9
Disagree 51 14.6 14.6 87.4
Strongly Disagree 44 12.6 12.6 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect toonline banking


users taking online banking as a positive move (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.17

Thirty five percent respondents are strongly agreeing that


online banking is a positive move. Thirty one percent
respondents are agreeing, fifteen percent respondents are
disagreeing, whereas; thirteen percent respondents are
strongly disagreeing about it. Six percent respondents are
neither agreeing nor disagreeing.

31
Table 4.18

Frequency Distribution of the respondents with respect to online banking as an exciting


thing (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 132 37.7 37.7 37.7
Agree 90 25.7 25.7 63.4
Neither Agree/Nor Disagree 19 5.4 5.4 68.9
Disagree 62 17.7 17.7 86.6
Strongly Disagree 47 13.4 13.4 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking as


an exciting thing (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.18

Thirty eight percent respondents are strongly agreeing that


online banking is an exciting thing. Twenty six percent
respondents are agreeing. Eighteen percent respondents are
disagreeing, whereas; thirteen percent respondents are
strongly disagreeing about it. Five percent respondents are
neither agreeing nor disagreeing.

32
Table 4.19

Frequency Distribution of the respondents with respect to online banking as a wise


thing (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 49 14.0 14.0 14.0
Agree 124 35.4 35.4 49.4
Neither Agree/Nor Disagree 52 14.9 14.9 64.3
Disagree 62 17.7 17.7 82.0
Strongly Disagree 63 18.0 18.0 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking as


a wise thing (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.19

Thirty five percent respondents are agreeing that online


banking is a wise thing. Eighteen percent respondents are
disagreeing, whereas; eighteen percent respondents are also
strongly disagreeing as well. Fifteen percent respondents
are neither agreeing nor disagreeing, whereas; fourteen
percent respondents are strongly agreeing.

33
Table 4.20

Frequency Distribution of the respondents with respect to online banking as a


financially secure commodity (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 69 19.7 19.7 19.7
Agree 24 6.9 6.9 26.6
Neither Agree/Nor Disagree 31 8.9 8.9 35.4
Disagree 163 46.6 46.6 82.0
Strongly Disagree 63 18.0 18.0 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking as


a financially secure commodity (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.20

Forty seven percent respondents are disagreeing that online


banking is a financially secure commodity. Twenty percent
respondents are strongly agreeing, whereas eighteen percent
respondents are strongly disagreeing, nine percent
respondents are neither agreeing nor disagreeing. Seven
percent respondents are agreeing about it.

34
Table 4.21

Frequency Distribution of the respondents with respect to the trust of the online users
regarding privacy protection (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 120 34.3 34.3 34.3
Agree 116 33.1 33.1 67.4
Neither Agree/Nor Disagree 30 8.6 8.6 76.0
Disagree 50 14.3 14.3 90.3
Strongly Disagree 34 9.7 9.7 100.0
Total 350 100.0 100.0

Frequency Distributionof the Respondents withrespect tothe trust of the


online users regardingprivacy protection(n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.21

Thirty four percent respondents are strongly agreeing that


they trust online banks regarding privacy protection.
Thirty three percent respondents are agreeing, Fourteen
percent respondents are disagreeing, whereas; ten percent
respondents are strongly disagreeing about it. Nine percent
respondents are neither agreeing nor disagreeing.

35
Table 4.22

Frequency Distribution of the respondents with respect to online banking users


trusting technology used in the online banking (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 73 20.9 20.9 20.9
Agree 34 9.7 9.7 30.6
Neither Agree/Nor Disagree 24 6.9 6.9 37.4
Disagree 92 26.3 26.3 63.7
Strongly Disagree 127 36.3 36.3 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


users trusting technology used in the online banking (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.22

Thirty six percent respondents are strongly disagreeing


that they trust the online banking technology. Twenty six
percent respondents are disagreeing, twenty one percent
respondents are strongly agreeing about it. Ten percent
respondents are agreeing, while seven percent respondents
are neither agreeing nor disagreeing.

36
Table 4.23

Frequency Distribution of the respondents with respect to online banking users


trusting online banking (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 33 9.4 9.4 9.4
Agree 65 18.6 18.6 28.0
Neither Agree/Nor Disagree 15 4.3 4.3 32.3
Disagree 156 44.6 44.6 76.9
Strongly Disagree 81 23.1 23.1 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


users trusting online banking (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.23

Forty five percent respondents are disagreeing that they


trust online banking. Twenty three percent respondents are
strongly disagreeing, Nineteen percent respondents are
agreeing, whereas; nine percent respondents are strongly
agreeing about it. Four percent respondents are neither
agreeing nor disagreeing.

37
Table 4.24

Frequency Distribution of the respondents with respect to online banking users not
worried about the security at online banking (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 43 12.3 12.3 12.3
Agree 24 6.9 6.9 19.1
Neither Agree/Nor Disagree 77 22.0 22.0 41.1
Disagree 122 34.9 34.9 76.0
Strongly Disagree 84 24.0 24.0 100.0
Total 350 100.0 100.0

Frequency Distribution of the Respondents with respect to online banking


users not worried about the security at online banking (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.24

Thirty five percent respondents are disagreeing that online


banking users are not worried about the online banking
security. Twenty four percent respondents are strongly
disagreeing, while twenty two percent respondents are
neither agreeing nor disagreeing. Twelve percent
respondents are strongly agreeing about it. Seven percent
respondents are agreeing.

38
Table 4.25

Frequency Distribution of the respondents with respect to online banking users not
influenced security not influencing online banking usage (n=350).

Cumulative
Frequency Percent Valid Percent Percent
Strongly Agree 80 22.9 22.9 22.9
Agree 97 27.7 27.7 50.6
Neither Agree/Nor Disagree 34 9.7 9.7 60.3
Disagree 80 22.9 22.9 83.1
Strongly Disagree 59 16.9 16.9 100.0
Total 350 100.0 100.0

Frequency Distributionof the Respondents withrespect toonline banking


users not influenced security not influencingonline bankingusage (n=350).

Strongly Agree
Agree
Niether Agree/Nor
Disagree
Disagree
Strongly Disagree

Figure 4.25

Twenty eight percent respondents are agreeing that security


is not influencing their online banking usage. However,
twenty three percent respondents are strongly agreeing,
while twenty three percent respondents are disagreeing,
whereas; seventeen percent respondents are strongly
disagreeing about it. Ten percent respondents are neither
agreeing nor disagreeing

39
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Conclusion

The overall finding of the survey indicates that the online


banking users consider online banking as a very valuable
tool. However, the real concern are the issues related to
the usage of the online banking, which the banks must
resolve in order to yield value for the online banking
users.

Regarding information and benefits of the online banking,


the respondents are showing a negative response.
Ultimately, this gives a strong indication that customers
have a lower level of the online banking awareness in the
form of benefits and information.

The findings also indicate that the online banking users


have an opinion that the online banking improves
performance, utilizes services quickly, and improves
productivity. This implies that at a certain level the
customers are aware of certain values regarding online
banking.

The statistics of the survey also indicate that the online


banking interface, ease of using online banking and ease in
terms of using the new features, all specifically received
an unfavorable response from the online banking users. This
indicates a lack of users’ feedback as well, which the
banks should take before launching as online banking
features.

40
Majority of the respondents also have an opinion that the
online banking is a great fun as it is pleasant, positive,
exciting and wise. These responses show that the online
users value online banking features and attributes as well.
Surely by all means the consumers are giving this response
in a comparative way, by comparing the offline banking and
the online banking.

However, online banking users are showing a negative


response regarding the security of the online banking
procedures. Furthermore, according to the survey, the trust
factor is also absent among online banking users. However,
the online banking users are showing a positive response
regarding the protection of the individual privacy in the
online banking operations.

As a result, the value factor is present within the mind of


the individuals regarding online banking. However, when it
matters to the security issues, user-friendliness and an
ease of the usage, the overall response is negative from
the online banking users’ perspective.

Recommendations

 The banks should provide more and more information


regarding the online banking and its benefits. So far
the online banking users are just aware about its
basic benefits, but uncertainty is still present
within the mind of the online banking users. This
uncertainty can be specifically reduced by provision
of more valuable information regarding online banking
operations.

41
 The online banking interface should be
straightforward, simple and user-friendly. The best
way to come up with such kind of an interaction is to
regularly take a feedback from the online banking
users, regarding interface and based upon that
feedback the changes must be made.

 While launching new services online, there should be a


clear description of the information. There must be a
twenty-four hour free online support in the form of
instant messaging, so that an online user gets a
prompt reply online about new features. Plus, banks
should also send offline physical catalogues to
promote new features as well. This can even ensure the
success of the new features and users will find them
easier to use as well.

 The banks should ensure their online banking users,


regarding the security of the online transaction. This
is one of the key issues, which is specifically
associated with the online banking operations and
transactions. For this purpose, first they should
constantly focus on finding a foolproof online
security system, plus after that they need to promote
it to the users and other individuals.

42
Appendix A
References

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Internet. New York: Emerald Group Publishing.

Bank Marketing. (2008, November). Online account-opening


capability needed as more customers turn to the
web. Bank Marketing, 40(9), 7-7.

Bank Marketing. (2008, April). Word-of-Mouth Campaigns Help


Online Banking Adoption. Bank Marketing, 40(3),
6-6.

Bidgoli, H. (2004). The Internet encyclopedia. New Jersey:


John Wiley & Sons Publications,

Community Banker. (2009). Javelin Study Forecats Growth


Rates. Community Banker, 19(1), 13-13.

Community Banker. (2008). Shaping the Future of


Relationship Banking...Online. Community
Banker, 17(9), 26-27.

Community Banker. (2007). Exploring the Growth of Internet


Banking and Bill Pay. Community Banker, 16(4),
51-51.

43
Cronin, M.J. (1998) Foundations for the Electronic
Commerce, Banking and Finance on the Internet.
New York: John Willey and Sons Publications.

Daily Times, (2004), Askari Bank Introduces Online Banking,


Daily Times of Pakistan, available at
[http://www.dailytimes.com.pk/default.asp?
page=story_3-7-2004_pg5_22] last accessed
[April 24 2009]

Daily Times. (2002). December 27). Ishrat launches HBL e-


banking services, Daily Times Pakistan,
Available at
[http://www.dailytimes.com.pk/default.asp?
page=story_27-12-2002_pg5_5] last accessed
[April 24, 2009]

December, J. (1996). Units of Analysis for Internet


Communication. London: Journal of Communication
Blackwell Synergy Publications.

Editorial Staff 2005, Special Corporate Status, US Master


Tax Guide 2006. London: CCH Tans and Accounting
Publishers.

Federal Reserve Bank of Atlanta. (2007). Economic Review,


First and second Quarters 2007, Atlanta, Diane
Publishing Corporation,

Herrit, H.H. (2001). Internet as a model of NII, Law and


Information Superhighway. New York: Aspen
Publishers Online

44
Hershberger, T. (2009). 30 Guerrilla Marketing Tactics that
work. Bank Marketing, 41(3), 18-25.

Horton, M. (2007). Cyber banking is oni the Rise -- But So


are the Risks. Community banker, 16(9), 26-27.

IMF Working Paper. (2004). Six Puzzles in Electronic Money


and banking. New York: International Monetary
Fund Publications,

Karat, C.M., Blom J.O. & Karat J. (2004). Human Computer


Interaction and Internet Banking, Designing
Personalized user experiences in E-Commerce.
New York: Springer Link Group of Publications.

Keyes, J., (2000). Financial Services Information Systems,


(2nd Ed.) Florida: CRC Press Publications.

Khosrowpour, M. (1998). Virtual Banking, Effective


Utlization and Management of Emerging
Information, Idea Group Incorporation, p443

Pikkarainen, T., Pakkarainen, K., Karjaluoto, H. & Pahnila,

S. (2004). Consumer acceptance of Online

Banking. Internet Research. 14(3), 224-235.

Plazak, C. (2007). Cash management. Community Banker,


16(5), 22-22.

45
Quarterly Bulletin. (2000), Authorization of virtual banks,
Guidelines on authorization of virtual Banks.
New York: Annex Publications.

Scorborough, M. (2008). Rules of Engagement. Community


Banker, 17(9), 20-20.

Swann, J. (2008). Out of the Teller Line and Onto the


Internet. Community Banker, 17(4), 54-54.

Swann, J. (2007). Lending Takes an Online Turn. Community


Banker, 16(3), 70-70.

46
Appendix B
Questionnaires

a. Gender: Male ( ), Female ( )

b. Age: 21-30 ( ), 31-40 ( ), 41-50 ( ), 50-61 ( )

1. I have enough information on online banking.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

2. I have enough information on the benefits of using


online banking.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

3. Using online banking enables me to utilize banking


services more quickly.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

4. Using online banking improves my performance of


utilizing banking services.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

5. Using online banking for banking services improves my


productivity.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

6. Using online banking makes it easier for me to utilize


banking services.

47
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

7. Learning to use new online banking features is easy


for me.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

8. I find it easy to do what I want to do online.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

9. My interaction with online banking interface is clear


and understandable.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

10.I find online banking flexible to interact with.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

11.It is easy for me to become skillful at using online


banking.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

12.Overall I find online banking easy to use.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

13.Using online banking is fun.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

48
14.Using online banking is pleasant.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

15.Using online banking is a positive move.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

16.Using online banking is exciting.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

17.Using online banking is wise.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

18.Using online banking is financially secure.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

19.I trust in the ability of online banking to protect my


privacy.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

20.I trust in the technology used in online banking.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

21.I trust in an online bank as a bank.


STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

49
22.I am not worried about the security of online banking.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

23.Matters of security have no influence on using online


banking.
STRONGLY NEITHER STRONGLY
AGREE DISAGREE
AGREE AGREE/DISAGREE DISAGREE

50

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