UNDERSTANDING THE LIMITED USE OF INTERNET

BANKING AND FACTORS AFFECTING THE ADOPTION OF

INTERNET BANKING IN FIJI
 CONTENTS
ABSTRACT ...................................................................................................................................................................... 3
INTRODUCTION ............................................................................................................................................................ 4
INTRODUCTION ............................................................................................................................................................... 4
PROBLEM STATEMENT .................................................................................................................................................... 4
RESEARCH OVERVIEW .................................................................................................................................................... 5
RESEARCH OBJECTIVE(S) AND AIMS ....................................................................... ERROR! BOOKMARK NOT DEFINED.
OVERALL OBJECTIVE(S) ....................................................................................................................................... 6
LITERATURE REVIEW ............................................................................................................................................. 7-8
RESEARCH QUESTIONS .............................................................................................................................................. 9
OVERVIEW ...................................................................................................................................................................... 9
RESEARCH DESIGN AND METHODS ..................................................................................................................... 10
OVERVIEW .................................................................................................................................................................... 10
POPULATION AND STUDY SAMPLE ................................................................................................................................ 10
SAMPLE SIZE AND SELECTION OF SAMPLE .................................................................................................................... 10
SOURCES OF DATA ........................................................................................................................................................ 10
COLLECTION OF DATA .................................................................................................................................................. 10
DATA MANAGEMENT .................................................................................................................................................... 10
DATA ANALYSIS STRATEGIES ....................................................................................................................................... 10
ETHICS CONSIDERATIONS ............................................................................................................................................. 10
TIMEFRAMES ................................................................................................................................................................. 10
STRENGTHS AND WEAKNESSES OF THE STUDY.............................................................................................. 11
RESEARCH SIGNIFICANCE ....................................................................... ERROR! BOOKMARK NOT DEFINED.
BUDGET ......................................................................................................................................................................... 11
CONCLUSION ............................................................................................................................................................... 11
REFERENCES ................................................................................................ ERROR! BOOKMARK NOT DEFINED.

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 ABSTRACT

Purpose
The main purpose of this study is to find out the problem as to why there is a limited use of internet
banking in Fiji. There are some key factors that are affecting the adoption of internet banking which
are Environmental factors, Organisational and Technological factors. The main findings of this
research will indicate that lack of competitive pressure, national ICT framework, government
support, legal risk, financial and human resources and perceived risk are factors that influence the
adoption of internet banking in Fiji.

Design/Methodology/Approach
In this report, it will adopt qualitative method because it’s starts with the questionnaires and
collection of empirical data inorder to generate hypothesis and theory. It will be conducted in a
controlled environment so that the information is not biased and enables the reader to understand
the phenomena in reality as it is conducted in a natural setting of the subjects.
Findings
The study is based on both primary and secondary data. Primary data involves questioners and
observations. There are 20 questionnaires that were distributed to each of the three banks in Fiji
(BSP, ANZ, and Westpac) to the clients who visited the bank. Secondary data includes internets,
journal articles on related topics and sample study which has been done by previous researchers.
Research Limitations/Implications
This study is only limited to three banks in Fiji that is ANZ, Westpac and BSP. Questionnaires will
be distributed to each bank’s clients whereby the data collected by the respondent enables me to
analyse as why there is a limited use of internet banking in Fiji.
Originality/Value
Internet banking was first introduced in the 1990’s (Ezzi, 2014), whereby most of the developed
and developing nations such as Fiji began to adopt to changes in the development of new
technologies example internet banking.
Keywords
Internet banking, Environmental, Organisational and Technological factors.

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 Introduction
To define bank, it is simply means a financial institution that deals with money. In Fiji, commercial
banks such as BSP, Westpac, ANZ, Reserve bank, Fiji Development bank, Bred bank and others
offers different rates in terms of internet banking. Internet banking has led to the fast growth and
development in both developed and in developing nations such as Fiji. Hence with the introduction
of e- commerce in 1980’s (Ezzi, 2014), it gives a significant impact to Customers to make
purchases and conduct on-line banking. In 1990’s internet banking began to increase ingrowth as
more computer related technologies emerged for online banking users. Nowadays, internet
banking is a very popular form of business transactions amongst people and in business as it
reduces cost, easy to access transactions such as checking balances, pay bills, transfer funds and
other business transaction. However, according to Daniel (1999) he defined internet banking as the
“delivery of data or services by a bank to its Customers over the internet”.

To understand the influence of internet banking for a vast growth in Fiji, there should be a need to
increase of internet access (Nurpur, 2010), improvement of features for new online banking users
and development of a good regulatory and legal framework. One of the most instruments to
measure Customer satisfaction is through the development of service quality (Zeithanml, 1988).

In this research study, the researcher will conduct a research on the limitation of internet banking in
Fiji which was offered in Commercial banks such as Westpac bank, Australia & New Zealand Bank
(ANZ), Bank of the South Pacific (BSP) and Fiji Development Bank (FDB) and the adoption of
internet banking to customers.

Problem Statement
Internets banking in Fiji have been recognised as one of the most popular technology and have
been utilized for performing transaction and payments through online banking. Apart from the
numerous advantages of using internet banking in Fiji, most Customers still prefer to visit the
banks and conduct their banking transaction in front of a counter. Some of the challenges of
adopting internet banking by most customers is that; the banking technology does not meet the
needs and quality of a customer (Zeithanml, 1998), limited access to internet, computers &
frequent power disruption, lack of awareness on the usage of e – banking, lack of trust and
security, lack of regulations regarding payment laws for using of e-banking, lack of skilled
manpower (Woodowossen&Tsegai, 2005). These factors are all categorised under environmental,
organisational and technological factors which are the challenges faced by Customers in
developed and developing countries such as Fiji for adopting internet banking.

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These challenges and opportunities encouraged the Fiji government to promote awareness on
legal security framework that could foster the use of E- banking system. In June 2001, government
set up the IT Advisory Council (ITAC), under the order of the Minister in charge of
correspondences as mention under section 28 of the Post and Telecommunication Decree, 1989.
In February 2002, the bureau subcommittee on Investment chose to gather a strategy articulation
of government for Information Technology Development in which for this situation, data innovation
is exercisable. National Information Communication Technology (ICT) strategy workshop was held
in June 2002. This was organised with the Ministry of Communications and with the assistance of
the United Nations Development Program (UNDP). From the workshop, it was agreed from the
participants that Fiji government will take responsibility for the plan and actions for the six projects
which are policy issue, educational curriculum reform, e- government, national awareness of what
the internet is all about, recycling PCs, awareness, expansion of existing Rotary program and rural
telecommunications Development and Telecentres. E governmental development plan was
adopted in 2003. The current consistency system should be organized so it improves chances to
invigorate the take-up of Information-Communication-Technology (ICT) by means of web-based
business for national development and advancement in Fiji and frame motivator for this
examination. (FIJI INFORMATION TECHNOLOGY DEVELOPMENT POLICY, n.d.)

Research Overview
This research adopts an inductive qualitative method. It is also known as bottom up approach
because it begins with a research question(s), an observation, develops a pattern, creates a
hypothesis to support its theory and draws conclusion based on multiple ideas. It usually explains
the meaning of variables rather than showing their relationship. As indicated by Truncellito (2007),
he stresses on the significance of epistemology (presence of information) and Ontology (presence
of truth/reality) on the worldview of an examination which comprise of positivism and interpretism.
The worldview of this examination depends on interpretism which is subjective in nature drawing its
information from deciphering distinctive perspectives of individuals' conduct, encounters and
comprehension of the earth with next to zero expectation from the scientist. (Myres, 2008; Collins,
2010).

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Figure 1. Research Overview

Develop theory for measures or actions to be taken

Develop Theory
to resolve problem.

Hypothesis Generate new knowledge from secondary sources

Compiling sample sizes and analyse 180 sample

Patterns

Face to face meeting with the respondents

Observations

15 questionnaires to each bank

Question(s)

Research Objective(s) and Aims

Specific objectives
 To understand the internet banking system in Fiji
 To identify the problems of e- banking systems in Fiji’s
 To evaluate the influence of three factors (Environmental, organisational
&Technological) in adopting internet banking by customers.
 To provide measures to be undertake for the improvement of internet banking
system.

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 LITERATURE REVIEW
Internet banking has been defined by numerous researchers in different ways. Heng & Hamid
(2010) defined internet banking as the process in which customers conduct banking transactions
electronically without visiting the banks. Contrarily to this, Alsajja& Dennis (2010) also defined
internet banking as the combination of information technology and banking. Internet banking has
been regarded as the most important source to minimise cost and enhance services for customers
(Hua, 2009), reduces queues in the banks, less paper work and human error and also create
benefits for both the provider and the customer. In spite of all these numerous advantages of using
online banking, previous researchers argue that many people still prefer to visit the bank physically
which they have been doing for years (Ezzi,2014; Featherman and Pavlou,2002; Saha and Zhao
2005; Lin and Chin, 2007; Edvardsson et al.,2000; Bultum, 2014). They have been fear of risk with
technological problems and complexity (Ezzi,2014), insecurity of data which can give chances of
fraud and theft, lack of awareness or regulation governing e- banking which can lead to fraudulent
(Lin and Chin,2007) and disruption of information access (Featherman and Pavlou, 2002).
Numerous researchers have been utilized diverse casing works in the investigation of receiving
new mechanical development. Among structures that have been created in view of the past
examinations incorporates, the Technology-Organisation- Environment system (TOE) (Tornatzky
and Fleischer, 1990), which distinguishes three fundamental Factors for the adoption of
mechanical advancement, i.e, innovative technological, organisational and environmental factors.
Herman (2009) likewise contends that with a specific end goal to enhance consumer loyalty, banks
ought to give a scope of online quality administrations to win client steadfastness, fulfilment and
trust. In this manner, it is essential to fathom the key factors that affect the allotment of web based
saving money among bank clients.
Technology - Organisation – Environment (TOE) system was proposed by Tornatzky and Fleischer
(1990); it is intended for concentrate the probability of appropriation accomplishment of innovation
developments. This structure is a far reaching and generally welcomed system with regards to
advancement appropriation by associations and has been utilized as a part of numerous
investigations (Horst, et al., 2007).

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Technology- Organisation- Environmental (TOE) frameworks
Organisational Factors
Technology factors Organisational factors
 Perceived risk (relative  Human and financial
disadvantage resources
 Perceived benefits (relative
advantage)

E- Banking Adoption

Environmental factors
 Competitive weight
 National ICT foundation
 Legal System
 Government bolster

Source: Tormatzky and Fleischer (1990)

Technological factor: Refers to adopter's impression of online banking. Typical attributes of
innovation considered in technology reception examines depend on the suspicion of Roger's
dispersion of development (Rogers 2003) which involves relative advantages (perceived benefits)
and relative disadvantages (perceived risks). According to Patrick (2015), he stated that
consumers fear the risk that influences their buying decision. Introducing a new technology may
involve both risk and benefits to a user. Perceived risk is one of the major factor that influences the
adoption of e banking which has been studied by previous researchers (Horst, et al., 2007). Other
researches stated in their previous studies that there are five dimensions of perceived risk which
are privacy risk, financial risk, performance risk, social risk and time risk. (Featherman & Pavlou,
2003). This gives fear to customers risk to use Automatic Teller Machine (ATM), lack of security
concerns, affect the decision to use the system and lack of trust by customers for using the system
provided by banks which gives barriers for adopting online banking. High perception of risk will
lower the perceived benefit of the innovation (Horst, et al., 2007).

Organizational factor: Refers to the association’s qualities that impact its capacity to embrace
and utilization of online banking framework. One of the main issues is availability of financial and
skilled manpower to implement the system, lack of managerial and technical skills on the use of

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technological innovation and also customers are not familiar with the service provided such as
Automatic Teller Machine (ATM), telephone & mobile banking and internet banking.

Environmental Factor: This refers to external environment which include national ICT
infrastructure, legal frameworks, competitive pressure and government support.
Lack of legal and regulatory system may hinder the invention of cost effective modern online
banking instruments such as mobile/ telephone/ internet banking, credit and debit cards and
Automatic Teller Machine (ATM). Previous studies done by a researcher (Heng & Hamid 2010)
revealed that one of the major challenges for adopting to internet banking system is through lack of
legal and regulation framework. Contrarily to this, Wondwossen and Tsegai (2006) stated that lack
of adequate ICT infrastructure is another environmental factor that influences the adoption of
internet banking in Fiji. This is due to lack of financial and telecommunications infrastructure for the
new technologies (Patrick, 2015), less internet access, poor connection or network problems.

RESEARCH QUESTIONS

Overview

 This research will adopt inductive approach which is qualitative approach. It will begin with
research questions and collection of empirical data which is then used to generalised
hypothesis and thesis.

Research Questions
1) How internet banking being developed over years?
2) What are the main reasons for not using internet banking?
3) What is the reason for visiting the banks?
4) What are the main online banking services you usually use on your phone?
5) How do customers think about security concerns involved in internet banking?
6) What factors affects the adoption of internet banking?

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 RESEARCH DESIGN AND METHODS

Overview
This research will adopt inductive approach which is also known as qualitative methods because it
begins with a research questions and collection of empirical data which are used to generate
hypothesis and theory.

Population and Study Sample

Total target population will include four divisions which is Suva, Nadi, Savusavu and Labasa. 15
questionnaires will be distributed to each bank. Total sample size is 180 whereby survey of
questionnaires and face to face meetings with the respondents will be conducted.

Sample Size and Selection of Sample

Total sample size is 180 which consist of 15 questions to each bank in each division that already
mention above under population.

Sources of Data
Data will be collected using two source such as primary and secondary data. Primary data includes
interviewing some of the front desk staffs, distributing of questionnaires

Collection of Data
Data will be collected by distributing questionnaires to each of the three banks and survey will also
be conducted following with face to face meetings. There are 15 questionnaires distributed to each
banks client.

Data Analysis Strategies

Data is in the form of words, pictures, objects which are analyse using themes and subthemes.
This enables the researcher to understand different opinions from different peoples. Statistical
Package for the Social Sciences (SPSS) will be utilized to analyse the qualitative questionnaires
collected.

Ethical Considerations
Ethical consideration is of dominant importance when conducting inductive approach. Four main
ethical consideration to be maintain by research participants by putting into consideration on these
principles which are autonomy, beneficence, maleficence and justice (Herman, 2009). There
should be restricted laws regarding better security and privacy of information as it can lead to
online fraud whereby someone else transfer money from others account without approval.
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 Strengths and Weaknesses of the Study
Strength
 Online banks have acquired most of their competitive with the developments of IT
infrastructure.
 Offering financial services through web enables the banks to provide more fast and efficient
transactions whereby customers are more benefit as it will be time consuming to them
without being standing in a que and wait for their turns to come.
 It allows the banks to reduce their cost such as transaction cost, management cost.
 As bank measure increments and learning further creates, online banks can merge the
multifaceted nature of their business which brings about more productivity, speedier tasks,
extra lessening on expenses and accomplishment of economies of scale.
Weaknesses
 Lack of security whereby consumers fear risk as anyone can hack information such as
password thus leads to online frauds.
 It only access to those who can view their internet and only target to some specific
customers.
 Lack of knowledge about online banking.

RESEARCH BUDGET
The budget for this proposed research project is prepared based upon a sample size of 100 clients
that usually visited the banks daily. The selected banks are Bank of the South Pacific (BSP),
Westpac Bank and Australian and New Zealand bank (ANZ). Collection of data will be sourced
from four main divisions of the Fiji Island (Suva, Nadi, Savusavu, Labasa). Information will be
gathered using sampling methods such as questionnaires, survey and interviewing individual
respondent whereby face to face meeting will be conducted with five staffs of each selected banks.
Face to face survey is the best methods as it gives the researcher correct feedbacks by the
respondents as it is conducted in natural settings from each bank. This encourage respondents to
answer all the questionnaires being asked whereby information are not biased. Therefore, this
research will be undertaken with the assistance under Ministry of Information Technology under
Fiji Information Technology Development Policy framework.

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Proposed Research Budget.
Items Cost per unit Qty Total cost Expense type
(FJD)
Travel (Air & $1100.00 Being for air travel (both ways
Road to/from Savusavu and road
transport to/throughout
Savusavu, Labasa, Nadi and
Suva.
Accommodation/ 110 35 $3300.00 35 nights accommodation -
per diem 180 sample questionnaires to
be distributed to each of the
three banks ( ANZ, BSP,
Westpac) in four divisions. This
includes meal allowance.
Awareness/ $650.00 Online marketing for the banks
Marketing through newspaper article,
programe promotions, TV advertisements
Stationary for 180 $350.00 180 questionnaires will be
answering of prepared to each banks clients
questionnaires whereby 15 questionaires to
such as pens, be distributed to each banks
markers, papers, for four divisions.
etc
Refreshments $5 180 $900.00
Sub -Total $6300.00
Contingency (5%) $315.00
Total expense $6615.00

Conclusions
In conclusion, this research clearly indicates that internet banking should be well versed by all
Customers, Managers, Employers of private firms and public enterprises so that it makes more
work easier and increase the productivity and sales. If the banks want to expand the productivity
and sales volume, they should focus more on data security, legal framework, government support,
financial and human resources and competitive pressure. Proper web- presenting is required for
this whereby Customers should also be aware of unethical practices example malicious software
which can be used by hackers. Awareness should be given in the encryption of the information

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which is exchanged between users and the bank. Therefore, full service quality of internet banking
should be more effective in the future.

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