Final Project Report

THE EFFECT OF SERVICE CHARGES, TRUST
AND SECURITY CONCERNS ON E-BANKING IN

PAKISTAN
By:
SOHAIL WAHEED
SP14-RBA-002
RBAProject Report
In
MBA (1.5 year)
COMSATSInstituteofInformationTechnology
VIRTUAL CAMPUS
Fall 2015
i
COMSATS Institute of Information Technology

AND SECURITY CONCERNS ON E-BANKING
IN PAKISTAN
Project Report Presented To: SADAF NAYYAR

Virtual Campus
In partial fulfillment of the requirement for the degree of
MBA (1.5 year)

By
SOHAIL WAHEED
SP14-RBA-002
FALL 2015
ii
COMSATS UNIVERSITY (Virtual Campus)

IN PAKISTAN
A Post Graduate Project Report submitted to Management Sciences as
partial fulfillment of the requirement for the award of Degree of MBA 1.5
Name
Registration Number
SOHAIL WAHEED S/o

ABDUL WAHEED
SP14-RBA-002
Supervisor:
MISS SADAF NAYYAR
Lecturer / Department of Management Sciences
Virtual Campus, Islamabad
Month of Submission with Year ( November, 2015 )
iii
Final Approval

IN PAKISTAN
By
SOHAIL WAHEED
SP14-RBA-002
Has been approved
For the COMSATS Institute of Information Technology,
Virtual Campus, Islamabad
Supervisor: SADAF NAYYAR
Management Sciences Department (Virtual Campus)
Co-Supervisor(where required):_____________________________
HoD: Madam Shazia Bilal

Name
HoD(Management Sciences Department / Virtual Campus)
iv
Declaration
I SOHAIL WAHEED hereby declare that I have produced the work presented in this
Project Report, during the scheduled period of study. I also declare that I have not
taken any material from any source except referred to wherever due that amount
of plagiarism is within acceptable range. If a violation of HEC rules on research has
occurred in this Project Report, I shall be liable to punishable action under the
plagiarism rules of the HEC.
Dated: November 10, 2015
Signature of the student:
_______________________________________
SOHAIL WAHEED S/o ABDUL WAHEED

Registration # SP14-RBA-002
v
Certificate
It is certified that SOHAIL WAHEED has carried out all the work related to
this Project Report under my supervision at the Department of
Management Sciences, COMSATS Institute of Information Technology, Virtual
Campus and the work fulfills the requirement for award of MS degree.
Date: November 10, 2015
Supervisor
______________________________
MISS SADAF NAYYAR
Head of Department:
_____________________________________________
MADAM SHAZIA BILAL

Department of Management Sciences (HOD)
vi
DEDICATION
I Dedicate My Project Report to My Parents, Wife and My

Teachers Who Made Me Believe That I will be Successful
Researcher in Banking Organizations.
vii
ACKNOWLEDGEMENTS
All thanks to Allah almighty, the benevolent and compassionate, who blessed
me with the power & capabilities and remained contented on all intricacies found during
the successful completion of my task.
I also extend my thanks to Bank Officers (from Habib Bank Limited, Summit Bank &
Allied Bank and all other banks) for their encouraging response and guidance to make &
complete my research report as a real learning experience.
Lastly, I would like to express my heartfelt gratitude toward people I respect that has
assisted me in so many ways during my study.
_______________________________________
SOHAIL WAHEED ( SP14-RBA-002)

MBA (1.5 year)
viii
ABSTRACT
THE EFFECT OF SERVICE CHARGES, TRUST AND

SECURITY CONCERNS ON E-BANKING IN PAKISTAN
The main purpose of my study is to investigate factors which are affecting customers
acceptance on e-banking in Pakistan or in other words we can say that why E-Banking
is not taking importance in Pakistan. After study I relies that three main factors which
are effecting E-Banking in Pakistan are Service Charges, Trust and Security Concern.
By applying quantitative research a sample of 50 bank customers which are using EBanking Services were used to gather data, for finding how service charges, trust of Ebanking and security concern affecting the E-banking in Pakistan.
Findings: In this research it is found that service charges, trust on e-banking and
security concern have to some extent affecting the customer acceptance. Data was
collected from the various banks employees & Customers and from colleagues of my
present company in Lahore (Pakistan). Then descriptive statistics & inferential statistics
are used for analysis. After discussion & conclusions the recommendations are
proposed.
Table of Contents
Sr.#
1.
Topic
Page No.
Declaration.
.
05
Dedication.
07
Acknowledgement .
08
Abstract .
09
Chapter No. 1 Introduction ..
12
1.1 History & Background..
12
1.2 Purpose of research
14
1.3 Study Objectives.
14
1.4 Significance of the research...
14
1.5 Research Question ..
15
1.6 Research Model .....
16
1.8 Hypothesis ...
16
1.9 Limitations ...
16
2.
Chapter No. 2 Literature Review.....
17
3.
Chapter No. 3 Data & Methodology ...
20
3.1 Research Paradigm...
20
3.2 Research Approach ..
20
3.3 Sample Population ...
20
3.4 Data Collection & Instrumentation .....
21
3.5 Data Analysis ..
21
3.5.1 Descriptive Statistics ..
21
3.5.2 Frequency Table .
21
3.5.3 Bar Chart .
21
3.5.4 Histogram ...
22
3.6 Ethical Consideration ..
22
4.
Chapter No.4 Results & Analysis
23
4.1.1 Frequency Table & Bar Chart .
23
4.1.2 Five Figure Summary .
29
4.1.3 Discussion....
32
4.2 Inferential Statistics .
33
4.2.1 Correlations.
33
4.2.2 Regression ...
35
Chapter No. 5 Discussion & Conclusion..
38
5.1 Conclusion ...
38
5.2 Suggestions & Recommendations ..
38
6.
Bibliography. ..
40
7.
Appendix .
42
5.
Chapter No.1 Introduction

1.1 History and Background:
Banking is information intensive sector with great reliability on IT for acquiring,
processing, analyzing, and communicating information to all stakeholders. It is a source
for banking to differentiate their products from the competitors. In order to retain their
customers, increase market share they have to innovate, so that they remain competitive
in the current changing global environment. Following their targets to enhance market
share some banks make huge investment for this purpose and some banks feel more
compelled to invest in digital and e banking to improve their services.
With its potential & range to accommodate the e-commerce business it has open new
doors of opportunities as well as threatened the many existing businesses.
Innovation in technology revolutionizes the individual life and business practices. It has
changed the courses of life for many. Speedy communication and processes are by
product of information system in banking sector. Speedy processes in intra banking and
inter banking system has been introduced. Banking transactions cannot be completed in
this fast and demanding system of banking. It becomes difficult for banks to retain and
serve customers to their satisfaction without IT products. Internet introduced e-banking.
E- Banking provides ease to both customers and banks and satisfies the customers`
need of 24/7 banking. In this paper e-banking referred to electronic banking which
customer can enjoy through internet at home or office from anywhere in the world and
also covers the money/funds transfer or online bill payments.
In Pakistan (State Bank of Pakistan) SBP is issuing new currency notes, manage
foreign money & their exchange rates, regulating the local and international banks
operating in Pakistan, and issuing monetary policy for Pakistan economy. Bank is
operating with task to improve economy by reducing poverty, stabilizing interest rate
and inflation rate, making banking rules for accommodating people and businesses.
IT sector is flourishing in Pakistan more rapidly with certain awareness of its

importance and its practical implication in providing ease to the businesses, despite of
the fact that Pakistan was considered to be IT deprived country just 10 years back.
Millions of people around the world is using internet so it was essential for banks to
convert its banking style to e-banking. E-banking provided platform for banks to
innovate, to expand the scope of business, to reach more customers than ever, to
collaborate with businesses, to collaborate with other banks in order to provide efficient
services, reducing cost of operations by sharing of facilities, serving customers on the
level of services being offered.
Customers can now carry on the banking from their home or office through e-banking.
First with the introduction of internet in businesses, banks used it to provide
information about their products and services on the internet. Security of information
was a challenge but with more secured banking system more and more banks started to
capture the market by introducing e-banking, putting a lot of their finances on line, and
their repute on line. Now customers can perform basic banking operations from their
home and offices, like transfer of funds, paying bills, balance enquiry, reconciling
statements. Internet banking has provided platform to one window services in banking
sector.
Now e-banking was crucial for banks long term survival in the competitive market. It
is expected that the numbers of internet users will increase rapidly in the coming few
years, so it is very important for banks to start or upgrade e-banking services. In the
year of 2000 it was recorded that banks lost 10% of their customers which were failed
to incorporate and innovate through internet and e banking.
E-banking provides platform to perform low cost banking through digital presence..It
takes US$25000 for banks to run a web presence and moreUS$25000 to maintain it,
still much less than it takes to operate the traditional banking system.
Booz-Allen & Hamilton (1997).A fully functional Internet banking site is likely to cost
US$1 million to US$2 million. However, while traditional banks operating costs
account for between 50% and 60% of revenues, running costs of Internet banking is
estimated at between 15% and 20% of revenues`
E-banking provides convenient services for their valued customers and updated
version. They need not to travel to bank. This paper studies factors that are affecting
e-banking system in Pakistan, and solutions for banks to overcome these.
1.02 Purpose of research:

There are many techniques of conducting research and we can classify research in
following three classifications:
1) Exploratory
2) Explanatory
3) Descriptive.
My this project study is mainly exploratory as the data is collected via
questionnaire & conducted case study to explore the factors which are affecting
customers wiliness to use e-banking in Pakistan.
1.03 Basic Study Objective:

The basic study objective of this my project is to check the effects of following factors
on E-Banking.
service charges
trust
Security concerns on electronic banking in Pakistan.
1.04 Significance / Importance of the Study:

My study will be helpful for the customers in many ways. It will contribute to the body
of knowledge by:
Study will open, ways for international banking.
User has access to his bank 24 / 7.
Study will be helpful for well-organized cash management.
Study will provide easy in terms of labor, Capital, Time and all the resources
needed to make a transaction.
Bank may get benefits in shape of cost reductions and bank may enter in new
market and can increase in number of its customers and revenue.
Provides security & privacy to banks customers.
It will save customers time spent in banks.
This research will give the practitioners an idea about merits and demerits of
electronic banking services.
Researches will provide the knowledge to the bankers about the customers
needs and wants.
Research will show customers the usefulness of e-banking.
This study will guide the bankers in taking the steps to improve the quality of ebanking services according to the requirement of customers.
This study will guide the bankers in implementing such policies that will
increase the customers trust on the e-banking services.
This study will guide and assist the policy makers for making policies regarding
the security and privacy of the e-banking services customers.
This study will help the customers in determining the trust factors related to the
e-banking services.
This study will show the customers the usefulness of the e-banking services.
1.05 Research Question:

How service charges trust and security concerns factors are effecting E-Banking in
Pakistan?
1.06 Research Model:
Service
Charges
Trust
Customer
Acceptance
Security
Concerns
1.07 Hypothesis:
H1: There is a relationship between Service Charges& customer acceptance.
H0: There is no relationship between Service Charges& customer acceptance.
H3: There is relationship between Trust& customer acceptance.
H0: There is no relationship between Trust& customer acceptance.
H4: There is relationship between security concerns & customer acceptance.
H0: There is no relationship between security concern& customer acceptance.
1.08 Limitations:
The data is not collected from the whole population.

Data is collected only from the 50 respondents of the selected population.
The data collected from the respondents is not reliable.
Data is collected only from the one city i.e. Lahore of Pakistan.
Access of internet for all the customers of banking is not possible.
Like any other age group, e-banking users at of Pakistan are a very diverse
population.
As the sample size is very small so it is not easy to get significant relationship
from the data collected from the respondents.
The statistical tests are used on larger population size to make sure the
distribution of population is normal.
Research study is conducted only developing country like Pakistan.
Chapter 02 Literature Review
Literature Review is the vital in research as it plays a fundamental role in research

process. It helps to define the research gap. In the next phase the research is needed for
problem solving. Literature review focus on to identify current problems &issues. We
conducted literature review for identification the main causes that stops customers from
trusting on e-banking practices. By using literature review I identified that service
charges, trust & security concerns are major problems in e-banking. I adopt systematic
approach to search available literature related to service charges, trust & security
concerns in e-banking and its check the effect on customers acceptance. Different
authors worked on above mentioned issues also add all security risks / concerns when
customer uses electronic banking services. Through review authors found that security
risks can be minimized by using biometric mechanism. To explore this authors adopt a
systematic / continue approach to search literature on service charges, trust & security
concerns in electronic-banking also checked the effect on customers acceptance. Also
close ended questionnaire survey was conducted.
To identify and describe the issues like service charges, trust and security concerns that
exists in Pakistan regarding the e-banking. I studied many articles and analyze
consumer attitude for the e-banking. Basic advantage of E Banking is that it is
available 24 / 7. & main disadvantages of this direct banking included difficulties in
using & security risks involved in it.
Obtain customers willingness towards new and emerging technology is the starting
point to resolve issues. Research identified the issues that are affecting customers
willingness to accept e-banking to banking industry. New technology requires
complex& difficult understanding and mental capability, and the technology may be
difficult to manipulate due to limited capability of the financial service employees.
Protection of Customers is the basic technical issue that associates with electronic
banking. Customer protection is the most important for building of electronic-banking
customer confidence because no face to face contact exists there and also there is
possibility for having troubles of making mistakes by using the Web.
A lot of individuals who utilized the e-banking services has imposed dramatically. All
through the world, the fig of internet consumers were in 2005 about 180 millions,
however predictable in 2012 to be about 800 million. Within Korea, in 2008 the amount
of e-banking consumers had improved to about 100 million from 138,000 that was in
1994. The electronic business and internet business market place has also developed
quickly, supplementary that the enhancement in the amount of e-banking consumers.
They are generally relaxed about giving usual information, for example preference,
however not when it approaches to more responsive information, for example credit
card information. These thoughts are appropriate not only to the lack of e-banking and
e-commerce security, however to consumer destruct of such events. Consumers are
worried about on line payment security, lack of privacy policy and reliabilities of
companies. The knowledge for e-banking security and internet such as information
encryption as well as digital signature highly developed in the 1990. (Sun & Han,
2003).
Banking sector has its prominent effects on economy. In Pakistan banking sector is the
fastest growing sector and has about 35 banks with different branches. In Pakistan there
are two types of banks. Public and private banks, both Private and Public Sector banks
are offer e-banking facilities to clients. Online banking services are provided in all over
the Pakistan. Transactions via web in Pakistan increasing day by day. Growth of
banking sectors in Pakistanis due to two factors. First is to the e-banks helped the
banking sector to reduce of their cost and secondly, e-banking allowed banks to cut
down the cost man-power as less staff is required by the bank because of e-banking and
all banks are earning high profit margin.
Basic reason for choosing electronic-banking is the low cost, less time &no restriction
for place to use it. Numerous previous studies revealed that pointed out that E-banking
is in the best interest of the banks. Banks cant deny the importance of E-Banking in
their profitability.
TAM model proposed a consumer behavior is resolute by aim to use specific system
that in result resolute by perceived ease of use and perceive usefulness of system. It was
recommended that variation of electronic-banking rely on service provided firm
resource management by lesser costs and by letting go service workforce to give better
and more diverse service. Banks do not accept e-banking not only because of less
expensive and getting competitive advantage but as well in terms of the ability of bank
to preserve the offered customer support and to magnetize consumers (Jahangir &
Begum)
Chapter 3 Research Methodology

3.1 Research Paradigm:
Most important thing that should be considered in selection of approach for research is
the nature of problem for which research is conducted. I have decided to choose mixed
methods research approach for understanding the contextual variances in e-banking in
the context of developing country like Pakistan. I will use Positivism paradigm as a
research philosophy. In this study we will check the affects of different factors on
customers acceptance of e-banking in Pakistan.
3.2 Research Approach:

In this research, data is collected by filling the questionnaire through customer survey,
so quantitative research approach is used by the researcher. In quantitative approach
numeric data is used for analysis and verify the points. Quantitative analysis is good for
measuring how many and in what quantity that is why it is chosen to test the research
problem of the study.
3.3 Sample Population:

In my research the respondents are not only the bankers, government employee butalso
other people who use the e-banking such as the youngsters, men, women and
housewives are targeted to obtain the correct results of the study. The sample size of my
research from which the data is collected are85 respondents. It is assured that 50
respondents will provide the mores satisfactory results for my study.
3.4 Data Collection and Instrument:

A questionnaire has been prepared to obtain primary data from the respondents for my
research. Questionnaire is used for data collection, as it explains the objectives of
research in the form of questions that will be answered by the respondents in the
selected population of my research study. Close ended questionnaire is prepared so that
all the respondents will provide the answers on the same questionnaires.
In my
research study, two types of questionnaire is used one is the demographic questionnaire
that ask the respondents about his name, gender, age, profession and education. Second
part consists of five parts containing the five questions about independent and
dependent variable. All the questions were answered in the selected scale ranging from
one to five i.e.
i)
ii)
iii)
iv)
v)
Strongly disagree = 1,
Disagree = 2
Neutral = 3
Agree = 4
Strongly agree = 5.
3.5 Data analysis

3.5.1 Descriptive Statistics:
Means the statistics which are used for understanding and describing the data by
summarizing the data, measure of dispersion, checking the data normality, recode and
transform variables.
3.5.2 Frequency Table:

In frequency Table I organized the data and listed data in columns and showed
frequency of occurrence of each score or numbers.
3.5.3 Bar chart:

Bar chars is used to present data in bars, Different bars with different heights
shows the frequency of that category.
3.5.4 Histograms:
In Histograms I showed the interval on x-axis and scores of each interval is represented
by the height of rectangle.
3.6 Ethical consideration:

I tried to follow the following ethical issues during my research project.
I determined the problem statement such as to it will be beneficial for upcoming
research in this field.
Data collected will be used only research purpose.
Data will not be allowed to any other for misuse.
Cleared the purpose of the research with the respondents to avoid any confusing
at the end.
Chapter 4 Results and Discussion:
4.1.1 Frequency Table and Bar Chart.

Gender of Respondents
Frequency
Males
Females
Total Resp.
Percent
Valid Percent
Cumulative Percent
42
84
84
84
16
16
100
50
100
100
Interpretation:
In above mentioned example, there is a Frequency column that shows the numbers of
respondents who marked each type of gender (e.g., 42 said male, 8 female Notice that
there are a total of (50) for the three responses considered valid ThePercent column
indicates that 84% are male, 16% are female , The Valid Percentage column is often the
column that you would use. Given this data set, it would be accurate to say that of those
not coded as missing, 84% were maleand 16% were females
Interpretation:
Here is a bar chart regarding gender, which shows that respondents who fill up the
questionnaire i.e greater than 40 i.e. male & the respondents who fill up the
questionnaires i.e. less than 10 are female. Thus most of our respondents are male
rather than female.
Age of the Respondent
Frequency (F)
Valid
Percent (P)
Valid Percent
Cumulative Percent
(VP)
(CP)
<25 years
8.0
8.0
8.0
<30 years
21
42.0
42.0
50.0
<35 Years
14
28.0
28.0
78.0
<35 years
11
22.0
22.0
100.0
Total Respondent
50
100.0
100.0
Interpretation:
In the above example, there is a Frequency column that shows the numbers of
respondents who marked each type of age (e.g. 4 said less than 25 years,21 said less
than 30 years, 14 less than 35 years& 11 respondents said greater than 35 years age for
which a total of 50 respondents. The percent & valid percent columns indicates that 8%
are less than 25 years, 42% are less than 30 years, 28% less than 35 years& 11% are
greater than 35 years age. This shows that there is no missing value, nor our
respondents blank any questions. The cumulative percent column shows that less than
25 years, less than 30 years&less than 35 years45.33%, by checking this column we
can measure two types of respondent age.
Interpretation:
Here is a bar chart regarding age of the respondents, which shows that less than 25
years age respondents are less than 5, less than 30 years respondents are approximately
25, less than 35 years age of respondents are approximately 15 and above 35 years age
of respondents are > 12.
Education of the Respondents

Valid Percent
Frequency (F) Percent (P)
Valid
(VP)
Cumulative Percent (CP)
Bachelor
10
20
20
20
Master
40
80
80
100
Total
50
100
100
Interpretation:
In this example, there is a Frequency column that shows the numbers of respondents
who have only qualification Bachelor& Master degree (e.g. 10 respondents have
bachelor & 40 respondents have Master Qualification. The percent & valid percent
columns indicate that 20% respondents have bachelor& 80% respondents have Master
qualification a total of 50 respondents. This shows that there is no missing value, nor
our respondents blank any questions. The cumulative percent column shows that the
respondents having the Bachelor& Master degree are 60% by checking this column we
can measure two types of respondent experience.
Interpretation:
Here is a bar chart regarding qualification, which shows that respondents who have
bachelor qualification are 10% and the respondents who have Master qualification are
40%.Thus most of our respondents are Master degree qualification rather than bachelor.
Profession of Respondents
Frequency (F)
Government Employee
Percent (P)
Valid Percent
Cumulative Percent
(VP)
(CP)
14
28.0
28.0
34.0
14.0
14.0
48.0
None
26
52.0
52.0
100.0
Total
50
100.0
100.0
Banker
private Employee
Interpretation:
In the above example, there is a Frequency column that shows the numbers of
respondents who are Government employee are 3, banker are 14, Private employees are
7 and there are 26 respondents not having the above mentioned jobs. The percent &
valid percent column shows that 6% are Government employee, 28% are bankers, 14%
are Private employee and 26% are having no designation. The cumulative percent
column shows that the respondents which are Government employee, Bankers, Private
employees 30%.
Interpretation:
Here is a bar chart regarding Profession of respondents, which shows that Government
employees are approx. 3, Bankers are 15, and private employees are approx. 8 and > 25
respondents that are not working in any organization.
Total Working Experience (In year)
Valid Percent
Frequency (F)
Valid
Percent (P)
(VP)
Cumulative Percent (CP)
1-2 year
17
34.0
34.0
34.0
2-3 year
12.0
12.0
46.0
3-4 year
16
32.0
32.0
78.0
More than 5 year
11
22.0
22.0
100.0
Total
50
100.0
100.0
Interpretation:
In this example, there is a Frequency column that shows the numbers of respondents
who have practical experience (e.g. 17 respondents have 1-2 years experience, 6
respondents have 2-3years experience, 16 respondents have 3-4 years of experience, &
11 respondents have greater than 5years experience, for which a total of 50
respondents. The percent & valid percent columns indicates that 34% have 1-2years
experience, 32% have 3-4years experience, 12% have 2-3 years experience& 22% have
greater than 5years experience. This shows that there is no missing value, nor our
respondents blank any questions.
Interpretation:
Here is a bar chart of total experience of the respondents, horizontally is total
experience& vertically shows the no of respondents. The respondents having 1-2 years
experience are approximately 20, the respondents having 2-3years experience are
greater than 7, the respondents having 3-4 years of experience are approx. 14& the
respondents having greater 5years experience are 1>10. This graph shows that mostly
respondents have experience 1-2 years.
4.1.2 Five Figure Summary & Histogram.

Statistics
Service charges
N
Valid
Missing
50
0
Mean
4.6880
Median
4.4000
Mode
4.60
Minimum
2.60
Maximum
19.40
Percentiles
25
3.9500
50
4.4000
75
4.6000
Interpretation:
N = 50, and no any value is missing for sample of 50 for Service Charges. Table
showed that mean of the total sample 4.68, median is the 4.4 and mode is 4.6 which
indicate the most repeated value, for our sample the maximum value is 19.40 and
minimum value is 2.60.
Statistics
Trustf
N
Valid
Missing
50
0
Mean
4.6880
Median
4.4000
Mode
4.60
Minimum
2.60
Maximum
19.40
Percentiles
25
3.9500
50
4.4000
75
4.6000
Interpretation:
Table showed valid N = 50, with no any missing value for sample total of 50 for the
variable Trustf. Table showed that mean of the total sample 4.68, median is the 4.4 and
mode is 4.6 which indicate the most repeated value, for our sample the maximum value
is 19.40 and minimum value is 2.60.
Interpretation:
The plot shows the histogram for the scale variable Trustf the graphically
representation of frequencies, showed by the chart are for a range of points. The
frequency distribution of Trust variable is about approximately normal
Statistics
Securityf
N
Valid
Missing
50
0
Mean
3.7760
Median
3.8000
Mode
3.80
Minimum
2.80
Maximum
4.60
Percentiles
25
3.3500
50
3.8000
75
4.2000
Interpretation:
Table showed the valid N = 50, with no any missing value for sample of 50 for variable
Securityf. Table showed that mean of the total sample 3.78, median is the 3.80 and
mode is 3.80 which indicate the most repeated value, for our sample the maximum
value is 4.60 and minimum value is 2.80.
Interpretation:
The plot shows the histogram for the scale variable Securityf the graphically
representation of frequencies showed the chart are for a range of points. The frequency
distribution is normal (approximately).
4.1.3 Discussion:
About 75% banks in Pakistan are doing business through online banking. All banks
have their websites and providing e-banking services to their customers during the last
few years. But unfortunately e-banking service in our country is not fulfilling the
customers expectation. Websites of the banks in Pakistan are static. By using Ebanking services the banks have to face the problem of disappearing from the business
world.
In this research study positivism paradigm is used because the affect of one variable
can be checked on the other variable. Quantitative research approach is used in this
study and primary data is collected by the researcher from the respondents in the
different sectors like government sectors, private sectors and banking sectors. Ding this
purpose a closed ended questionnaire is adopted by the researcher, so that all the
respondents can give the same question answer. This questionnaire was consist of two
parts i.e. the demographic part containing age, gender, qualification, profession and the
other part consist of five parts each containing the five questions. In starting of the
questionnaire a shot introduction is provided for the respondents by understanding the

purpose of survey. A scale is drawn for the questionnaire
i)
ii)
iii)
iv)
v)
strongly disagree 1
disagree 2
neutral 3
agree 4
strongly agree 5.
After collecting the data primary data from the respondents the then data is
coded in the SPSS (Statistical Package Social Sciences) in order to drawn
the results.
4.2 Inferential Statistics:

4.2.1. Correlations
Correlations
Servicequalityf
Servicechargesf
Pearson Correlation (PC)
CustomerAf
1
Sig. (2-tailed)
Total Number (N)
CustomerAf

Sig. (2-tailed)
Total Number (N)
-.182
.002
50
50
-.182
.002
50
50
Interpretation:
In the above table, it is shown that Pearson Correlation is applied on the dependent
variable CustomerAf and the independent variable Servicechargesf as the significant
value is 0.002 which is less than 0.05, hence we can say there is linear relationship
between them.
Correlations
Trustf
Trustf
CustomerAf
-.232
Sig. (2-tailed)
.04
Total Number (N)

CustomerAf
50
50
-.232
Sig. (2-tailed)
.04
Total Number (N)
50
50
Interpretation:
variable CustomerAf and the independent variable Trustf, as the significant value is
0.04 which is less than 0.05,hence we can say there is linear relationship between them.
Correlations
Securityf
Securityf
CustomerAf
1
Sig. (2-tailed)
Total Number (N)
CustomerAf
.235
.100
50
50
.235
Sig. (2-tailed)
.100
Total Number (N)
50
50
Interpretation:
variable CustomerAf and the independent variable Securityf, as the significant value is
0.10 which is above 0.05, hence we can say there is no linear relationship between them
as it accepts the null hypothesis.
4.2.2. Regression:
Model Summary
Std. Error of the
Model
R Square
.182a
Adjusted R Square
.033
Estimate
.013
.50339
a. Predictors: (Constant), Servicechargesf
ANOVAb
Model
1
Sum of Squares
Regression
Df
Mean Square
.416
.416
Residual
12.163
48
.253
Total
12.579
49
Sig.
1.641
.206a
a. Predictors: (Constant), Servicechargesf

b. Dependent Variable: CustomerAf
Coefficientsa
Standardized
Unstandardized Coefficients
Model
1
B
Constant
Servicecharges
Coefficients
Std. Error
3.884
.158
.040
.031
Beta
-.182
Sig.
24.613
.000
-1.281
.206
a. Dependent Variable: CustomerAf
CustomerAf = 3.88+ 0.04 (Servicechargesf)

Simple regression test is applied to investigate how well Servicechargesf in e-banking
predict CustomerAf. The results are statistical significant as the significant value is P<
0.001. The above identified equation to understand this relation is drawn. The adjusted
R2 value is 0.013 this indicates that 1.3% of the variance in CustomerAf as it is
explained by Servicechargesfin e-banking.
Model Summary
Std. Error of the
Model
R Square
.232a
Adjusted R Square
.054
Estimate
.034
.49792
a. Predictors: (Constant), Trustf
ANOVAb
Model
1
Sum of Squares
Regression
df
Mean Square
.679
.679
Residual
11.900
48
.248
Total
12.579
49
Sig.
2.738
.105a
a. Predictors: (Constant), Trustf

Coefficientsa
Standardized
Model
1
Std. Error
(Constant)
3.933
.155
Trustf
-.049
.030
Coefficients
Beta
-.232
Sig.
25.331
.000
-1.655
.105
Interpretation:
CustomerAf = 3.933 0.049 (Trustf)
Simple regression test is applied to investigate how well Trustf in e-banking predict
CustomerAf. The results are statistical significant as the significant value is P< 0.001.
The above identified equation to understand this relation is drawn. The adjusted
R2value is 0.034 indicates 3.4% of variance portion in CustomerAf as it is also
explained by Trustf in e-banking.
Model Summary
Model
R Square
.414a
Adjusted R Square
.171
Std. Error of the Estimate
.098
.48129
a. Predictors: (Constant), Securityf, Servicecharges, Trustf,

ANOVAb
Model
1
Sum of Squares
Regression
df
Mean Square
2.155
.539
Residual
10.424
45
.232
Total
12.579
49
Sig.
.071a
2.326
a. Predictors: (Constant), Securityf, Servicechargesf, Trustf,

Coefficientsa
Model
1
Standardized Coefficients
Std. Error
Beta
(Constant)
3.234
.510
Trustf
-.057
.029
Servicechargesf
-.042
.233
Securityf
Sig.
6.346
.000
-.271
-1.980
.054
.030
-.191
-1.410
.166
.131
.249
1.783
.081
Interpretation
Multiple regression test conducted to investigate the best predictors CustomerAf test
score. Combination of different independent variables for predicting CustomerAf from
Trustf, Servicechargesf and securityf. As trustf and Service charges are statistically
significant because P< 0.05. The adjusted R 2is 0.098 this shows that 9.8% of the
variance in CustomerAf is explained by this model
Chapter No. 5 Conclusion

5.1 Conclusion:
After conducting the analysis, the results of the research are positive and negative for
the three factors which are affecting the customers acceptance on e-banking in
Pakistan Region. First of all descriptive statistics is applied and frequency test is
applied on the demographic variables. The results of the gender show that 84% are
male , 16% are female, graphics results shows that about 40 out of 50 male and the
other are female and less than 30 years respondents are approximately 25. The most of
the respondents are working in the other organizations and the respondents having 1-2
years experience are approximately 20.
I found during my study that most of the Bank Customers use Banking Services only
when necessary by using the traditional methods. As now Government of Pakistan has
imposed extra withholding tax on banking transactions on and above Fifty Thousands
Rupees amount limit and FBR also has access on all bank accounts and keeps watching
the banking transactions so the people hesitate from using Banking Transactions and
when customers want to use E-Banking Services than they have to pay extra service
charges and also because of high rate of cyber crime in Pakistan, E-Banking is not
much being used in Pakistan as it deserved.
5.2 Suggestions and Recommendations:

The customers using the e-banking services having the computer knowledge
and should be aware of the interment technology.

Most of the customers of the banks are illiterate, so marketing department of the
banks should be strong enough to convey their message to the customers.

The banks in Pakistan should improve the security and service quality for their
customers.
The banks should adopt such standards and introduce such policies for the
welfare of the customers so that they can achieve the trust of the customers.
Positive response of the banks for the customers should be increased.
The banks should works independently in order to make the electronic banking
services for the customers easy.

The electronic banking services for the customers should be free of cost.
All the banks must have to remain in touch with their customers for showing
their commitment and to obtain customer loyalty for the bank.
Bibliography:
1) ADAMSON, I., CHAN, K.-M. & HANDFORD, D. (2003) Relationship
marketing: customer commitment and trust as a strategy for the smaller Hong
Kong corporate banking sector. International Journal of Bank Marketing,
VOL.21,NO.6/7, 347-358.
2) AGARWAL, R., SAMBAMURTHY, V. & STAIR, R. M. (2000) Research
Report: The Evolving Relationship Between General and Specific Computer
Self- Efficacy-An Empirical Assessment. Information Systems Research,
VOL.11, NO.4, 418-430.
3) Alsajjan, B., & Dennis, C. (2006). The impact of trust on acceptance of online
banking.
4) Angur, M.G., Nataraajan, R., &Jaherea, J.S. Jr (1999). Service quality in the
banking industry: an assessment of developing economy. International Journal
of Marketing, 17(3), 116-125.
5) Armstrong, J.S. (2012). Illusion in regression analysis . International Journal of
forecasting.
6) Armstrong, R.W., & Seng, T.B. (2000). Corporate-customer satisfaction in the
banking industry of Singapore. International Journal of Bank Marketing, 18 (3),
97-111. banking. International Journal of Bank Marketing, VOL.21, NO.1, 515.
7) Beatty, S.E., Mayer, M., Coleman, J.E., Reynolds, K.E., and Lee, J. (1996).
Customer-sales associate retail relationships. Jurnal of Retailing, 72(3), 223-47.
8) Belanger, F., Hiller, J. S. & Smith, W. J. (2002) Trustworthiness in electronic
commerce: the role of privacy, security, and site attributes. Journal of Strategic
Information Systems, 11, 245-270.
9) Bennett, D., & Higgins, M. (1993). Quality means more than smiles. ABA
Banking Journal, June, (46).
10) Berry, L.L., Parasuraman, A., &Zeithaml, V.A. (1985). Quality counts in
services, too. Business Horizons, May-June, 44-55.
11) Bitner, M.J. (1995). Building service relationships: its all about promises.
Journal of the Academy of Marketing Science, 23 (4), 246-51.
12) BLACK, N. J., LOCKETT, A., ENNEW, C., WINKLHOFER, H. &
MCKECHNIE, S. (2002) Modelling consumer chosice of distribution channels:
an illustration from financial services. International Journal of Bank Marketing,

VOL.19, NO.4, 161-73.
13) Bradley, L. and Stewart, K., 2002. Delphi study of the drivers and inhibitors of
Online Banking, The International Journal of Bank Marketing, Vol. 20, No. 6,
pp. 250-260.
14) COMPEAU, D. & HIGGINS, C. A. (1999) Social Cognitive Theory and
Individual Reactions to Computing Technology: A Longitudinal Study. MIS
Quarterly, VOL.23, NO.2, 145-158.
15) CORRITORE, C. L., KRACHER, B. & WIEDENBECK, S. (2003) On-line
trust: concepts, evolving themes, a model. International Journal of HumanComputer Studies, VOL.58, 737-758.
16) Crede, A. Electronic Commerce and the Banking Industry: The Requirement
and Opportunities for New Payment Systems Using the Internet, Journal of
Computer-Mediated Communication (1:3), December 1995.
17) DAVIS, F. D. (1989) Perceived usefulness, perceived ease of use, and user
acceptance of information technology. MIS Quarterly, VOL.13, NO.3, 319-340.
DAVIS, F. D. (1993) User acceptance of information technology: system
characteristics, user perceptions and behavioral impacts. Int. J. Man-Machine
Studies, VOL.38, NO.475-487,
APPENDIX
QUESTIONNAIRE
Factors affecting customers acceptance on Electronic Banking
Dear Respondent
The aim and basic objective for my research is examining and analyzing those factors
which affect the customers acceptance of electronic banking of Pakistan through
independent Role of the Service Charges, Trust and Security Concern of E-Banking.
This research I, Sohail Waheed has been conducted the student of MBA (1.5 year)
COMSATS UNIVERSITY (Virtual Campus). Only 10 to 15 minutes to fill out this
research questionnaire from your precious time will be required. I assured you that all
the information provided by you will be kept secret.
Demographic Questionnaire
Name.____________________
Gender:
a
Male b) Female
Age:
a
b
c
d
Less Than 25 years

Less Than 35 years
Less Than45 years
Above 35 years
Profession:
a
b
c
d
Government employee
Banker
Private Employee
None of the above
Total Professional experience (in years)

a
b
c
d
1 to 5 year
6 to 10 years
15 to 20 years
Above 25 years
Please encircle against the each statement that how strongly you agree / disagree with
it, using the scale provided below.
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
01
02
03
04
05
Service Quality
1
Banks automated services offer real time communication services.
E-Banking provides customers, services for feedback
You can avail E-Banking Services any time
E-Banking transactions are processed efficiently
E-Banking transactions are performed correctly.
Security
1
You think your information will be keep score when using e-banking
Are you worried about security of e-banking?
Electronics banking provided you reliable services
Matter of security has no influence on using an Electronics banking
You feel secure, that your private information will not go to another customer
Trust
1
I am fully satisfied with the security system of Electronics banking
Have you strong faith on machine that it cannot make any mistake.
This facility to operate e-banking transactions through mobile provides all the
banks.
Are you satisfied with the transaction system of electronic banking?
Electronic-Banking help me to manage my financial matters efficiently.
Thanks for your valued Time

Final Project Report

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Final Project Report

Uploaded by

Copyright:

Available Formats

THE EFFECT OF SERVICE CHARGES, TRUST

AND SECURITY CONCERNS ON E-BANKING IN

MBA (1.5 year)

COMSATS Institute of Information Technology

THE EFFECT OF SERVICE CHARGES, TRUST

COMSATS Institute of Information Technology

In partial fulfillment of the requirement for the degree of

MBA (1.5 year)

COMSATS UNIVERSITY (Virtual Campus)

THE EFFECT OF SERVICE CHARGES, TRUST

SOHAIL WAHEED S/o

Month of Submission with Year ( November, 2015 )

COMSATS UNIVERSITY (Virtual Campus)

THE EFFECT OF SERVICE CHARGES, TRUST

HoD: Madam Shazia Bilal

COMSATS UNIVERSITY (Virtual Campus)

Dated: November 10, 2015

Signature of the student:

SOHAIL WAHEED S/o ABDUL WAHEED

Date: November 10, 2015

MADAM SHAZIA BILAL

COMSATS UNIVERSITY (Virtual Campus)

I Dedicate My Project Report to My Parents, Wife and My

SOHAIL WAHEED ( SP14-RBA-002)

THE EFFECT OF SERVICE CHARGES, TRUST AND

COMSATS UNIVERSITY (Virtual Campus)

Chapter No. 1 Introduction ..

1.1 History & Background..

1.2 Purpose of research

1.3 Study Objectives.

1.4 Significance of the research...

1.5 Research Question ..

1.6 Research Model .....

1.8 Hypothesis ...

1.9 Limitations ...

Chapter No. 2 Literature Review.....

Chapter No. 3 Data & Methodology ...

3.1 Research Paradigm...

3.2 Research Approach ..

3.3 Sample Population ...

3.4 Data Collection & Instrumentation .....

3.5 Data Analysis ..

3.5.1 Descriptive Statistics ..

3.5.2 Frequency Table .

3.5.3 Bar Chart .

3.5.4 Histogram ...

3.6 Ethical Consideration ..

Chapter No.4 Results & Analysis

4.1.1 Frequency Table & Bar Chart .

COMSATS UNIVERSITY (Virtual Campus)

4.1.2 Five Figure Summary .

4.2 Inferential Statistics .

4.2.2 Regression ...

Chapter No. 5 Discussion & Conclusion..

5.1 Conclusion ...

5.2 Suggestions & Recommendations ..

COMSATS UNIVERSITY (Virtual Campus)

Chapter No.1 Introduction

COMSATS UNIVERSITY (Virtual Campus)

IT sector is flourishing in Pakistan more rapidly with certain awareness of its

1.02 Purpose of research:

1.03 Basic Study Objective:

1.04 Significance / Importance of the Study:

COMSATS UNIVERSITY (Virtual Campus)