Internet Banking System in Pakistan

Internet Banking System in Pakistan

Partcipents in this Report Hina Maniar Hammad Khan Syeda Sehrish Altaf Magsi

Internet Banking System in Pakistan

Internet Banking System in Pakistan

Internet Banking System In Pakistan Abstract Internet banking is a vital component of E-banking flourished rapidly in developed countries unlike developing countries. This provides recommendations for the banks offering internet banking services after examining the barriers in adoption of internet banking perceived by active internet user living in Pakistan. Various, significantly variables perceived barriers identified by previous studies are presented after and extensive literature review in order to form a basis for developing questionnaire and comparing the findings. Data were collect from 100 employees of the banks offering internet banking services in Karachi Pakistan. The respondents selection criteria was being active internet users and living in Karachi Pakistan. Finding shows that the loss of personal services and one to one relationship with bankers, low perceived value of internet banking as compared to traditional banking and lack of knowledge, trust are perceived to be the most significant barrier in adoption of internet banking among respondents. Lack of security, risk of hacking, fear of incomplete transaction and high financial risks are perceived to be moderately significant barriers. The study recommends that the banks should identify the information needs of the customers and establish the effective internet banking and information channels to communicate the benefits and uses of internet banking services in Pakistan and develop long term customer relationship. Keywords: Internet Banking, Trustworthiness, Customer Perception, Security, Risk, Awareness, Convenience and accuracy

Internet Banking System in Pakistan

Background The Promotion of internet banking technology enabled the banks to enhance its operations with cost cutting effectively and efficiently in order to handle daily banking affairs via internet banking channel. Customers are being facilitated by reducing their visits in banks and they can carry out their transactions via internet or ATM Machines instead of personally visiting the branches. The researches so far done reveal that mostly the customer of banks are unaware about online banking services. Especially Pakistan is far behind the developing countries as a lot of services regarding internet banking are not available in Pakistan. The study reveals that mostly customers prefer internet banking (IB) services over branch banking due to reliability, convenience, speed, safety and security, cost effectiveness, userfriendly, and error free system. In contrast the parallel finding shows that security problems, lack of trust and knowledge, ATM machine problems etc. affect the adoption decision of customers of internet banking services. Introduction The research paper intend to provide a background and so far development of internet banking systems in Pakistan. There are five variables studies to investigate the prospect of internet banking in Pakistan which are customers perceptions, risk and privacy, trustworthiness, awareness and convenience and accuracy on internet banking systems in Pakistan. The internet banking facilities offered by banks are still in the rudimentary stage. They offer the products such as balance inquiry,

Internet Banking System in Pakistan

view account statement, stop payment request, money transfer from one bank account to another bank account, by far, cash deposit, credit cards and utility payment through automated machine teller is not ubiquitous in Pakistan

For the banks striving hard to gain competitive advantage in the industry to secure more handsome profit inevitably require to use the latest technology, the benefits are deploying the latest technology are manifold- it cuts the transaction cost, mitigates the service timing and brings satisfied customers on the verge of the bank door. In Pakistan, banks identified the need of innovation in the way banking customers were served. The banks imitated the developed countries internet banking model.. The data compiled by downloading the material from Web Marketing Association, show that banks are falling behind other industries with respect to innovation within internet channel (Bruno-Britz, 2006). A survey on general use of internet shows that use of internet is gradually increasing in the daily life of an average user especially for the purpose of doing financial transactions and obtaining financial information (Daily Time Pakistan, December 2005). When Internet has entered into our daily life, the most dimensions of our lives such as education, communication, business, etc, were overshadowed by this novel phenomenon. One of these dimensions is to handle banking affairs through the Internet (Shirali & Shahreza, 2007). According to (Richard Nyangosi & Arora, Sumanjeet Singh, 2009) banking through electronic channels has gained much popularity in recent years. This system, popularly known as Internet Banking, provides faster delivery of banking services to a wide range of customers.

Internet Banking System in Pakistan

In the contemporary scenario, customers expect real-time services. The corporate clients of the banks prefer to have the transaction settle in a short time which was improbable with the traditional banking model without the internet banking. Internet banking has provided a pace to perform transaction settlement on the real time basis Information technology is becoming an important factor in the future development of financial services industry, and especially in banking industry (Nami. M. R, 2009). In current business environments, customers using the services products of the banks want better choice. (Avkiran, 1999) stressed the importance of the human touch in the customer services. The capability of banking staff can be expected to directly affect the customers satisfaction. However, Internet Banking can help in better understanding customers needs and customizing the services/ products according to their needs. The implementation of internet banking model is not without problems, the problematic phase is constructed of many variables, such as customers perception toward internet banking, concerned for technological issues, privacy and risk, trustworthiness, awareness and convenience. Customer perception and life style plays a pivotal role in the overall success of the internet banking Customers perception and life style plays an important role in growth of Internet banking system (Rogers1983). Lockett and Littler, (1997), analyzed consumers attitudes towards direct banking, compatibility with customer existing lifestyles. Other research has similarly indicated that customers

Internet Banking System in Pakistan

attitude and beliefs about technology are correlated with intensions to use it (Chircu and Kauffman 2002). The technological issues are another problem in internet banking effective implementation , the issue arises when customer perceive supplier of unfair practices such as unauthorized access or system failures. Customers and Banks are concerned about Technical/Technological issues for commercial usage of the Internet. (Zugelder, 2000) According to Rogers and Shoemaker,(1971)Before buying a product or obtaining a service customers usually investigate and think carefully. The same phenomena is pointed out by Guiltinand and Donnelly (1983) The consumer confidence on internet banking depends upon the bank action against fraudulent transactions. Consumer unwillingness to accept internet banking is lack of consumer trust on electronic devices (1999) says that Customer confidence on internet banking depends on the action of bank against false transactions and security matters that appears during online banking. Customers trust is necessary to gain benefits of implementation of technology. Clients viewed trust as an expectation about competency to perform, reliability of transactions. It is proposed that trust is measured as a behavioral intention or behavior that shows reliance on the other partner. In addition Morgan and Hunt, (1994) defined trust as: The perception of confidence in the exchange partners reliability and integrity. These definitions highlight the significance of confidence and reliability in trust building. Finally, the issues of online security and privacy protection are factors that heavily influenced the clients . The regulatory authorities must

Internet Banking System in Pakistan

assure the reasonable measures to protect the consumer from any frauds or invasion to privacy, consumers are still skeptical about the recent announcement of assurance by the Government on digital signature and other authentication measures

Internet Banking Internet banking can be defined as the use of technology to communicate instructions and receive information from a financial institute where an account is held. Internet banking includes the system that enables the financial institution customers, individuals, business to access account, transact business, or obtain information on financial product and services through public and private network, including the internet. When first introduced internet banking was used to market the product and services offered on their websites, with the passage of time and technology advancement secured, easy and timely transactions offered by the banks through internet banking, however, more banks have come forward to use internet banking both as transactional as well as an informational medium.

Internet Banking System in Pakistan

Types of Internet Banking

Informtional

Communication

Transactional

Bank to Account holder

Bank to Account Holder to Bank

Bank to Account Holder to Bank

Electronic Mail Marketing/ Advertisement Account Enquiry Loan Application Name and Address Changes

Accessing Accounts Paying Bills Transfering Funds etc.etc.

Internet Banking System in Pakistan The internet banking is becoming increasingly more important channel of banking in Pakistan. Internet banking in Pakistan is less developed in Pakistan as compared to west developed country following the world wide trend in implementing self service technology that is the Internet banking system in Pakistan will develop into established
b service provider. The number of internet banking users in Pakistan is

doubled every year in the last two years.

Internet Banking System in Pakistan

Initially internet banking was launched in Pakistan to provide a limited number of services and it was sort of hype in the market. In the past years there has been greater understanding and development towards various services being offered by banks through internet banking. Customer readiness, acceptance & security awareness is also a factor which is improving as usage of internet banking is increasing. Banks have also begun to understand the cost & benefits of internet banking. Initially there was also an internet bandwidth issue which has since been resolved by the availability of better internet network availability. Utility companies are also gearing up for offering bill payment facilities through various electronic channels including Internet Banking. Good growth has been shown in use of internet banking services in Pakistan. So for internet banking system provide following facilities internationally as well as in Pakistan: o Complete view of customer's information o Facility to check account balance o To obtain account statements o To make Stop Payment request o PO/DD Request o Cheque/PO/DD Status Inquiry o Cheque Book Request o Funds Transfer o Email Satement/Balance

Internet Banking System in Pakistan

o Utility Bill Payment o Password Generation Swift development of the internet banking also shown well development of internet banking system in Pakistan. State Bank of Pakistan should formulate a research and good strategies to ensure rapid migration of customers to online banking and thus boom the internet banking services more efficiently.

Prospect and Problem

Internet Banking System in Pakistan

Issues related to adoption of internet banking system must be factored in to any plans for adding customer satisfaction and security control features. Research Question The purpose of this research, aims to identify the issues that preventing Pakistani customers from adopting Internet Banking Services. This research leads to the following main questions: Q: What are the major issues that influence Customers to adopt Internet Banking? Literature review To identify and describe the adoption issues that exist in Pakistani firm regarding banking, the main advantage of internet banking is that its availability on 24 hours and 7 days. The major disadvantage of using internet banking is the perplexity and the security risks involved in using it. The early adopters of internet banking have earned higher revenues, cutting the resources usage from business operations. They also exhibit the favorable attitude toward change than the lateadopters and non-adopters. The main issues which hamper the adoption of the internet banking in Pakistan are customers perceptions, risk and privacy, trustworthiness, awareness and convenience and accuracy on internet banking systems in Pakistan. A better approach to resolve these issues is to comprehend the customers willingness to use the emerging technology of internet banking. The past researches have pinpointed the issues that affect consumers attitude toward accepting the new technology in the

Internet Banking System in Pakistan

financial service industry and they type of consumer segment more likely to use such technology. The early research on technology in financial services, which focused on the adoption of ATMs revealed that a significant factor for non-usage ,especially amongst older customers, was the preference for conducting financial affairs through a human teller( Zeithaml and Gilly,1987), studied comparisons between ATM usage in different European countries and found that the main concern of users included fears over its security, the possibility of machine breakdown and running out of money. Novel technology sometimes complex understanding and mental capability, and thus the technology may be difficult to understand due to limited capability of firm employees. Finally, people conceptualization toward technology plays a pivotal role in the acceptance of any novel technology, the assumed role of technology in improving productivity comes along with prevailing skepticism in the minds of the people. Other research has shown that customers attitude and beliefe about technology are correlated with the intentions to use it (Chircu and Kauffman 2002). The concurrent organization structure may not be supportive to utilize the web technology(Chircu and Kauffman,2000) and may include management attitudes, resource constraints, and knowledge issues. Some researchers have shown negative attitudes among some managers as a major interference( Farhaamand,2002). Negative attitude prompts unwillingness to adopt the new technology, reducing the companys resource allocation and motivation to use the technology( Basu,2002) Implementing web technology as a business channel requires .Customers and banks are more concerned about technological issues for commercial usage of the internet.Zulgelder(2000) mentioned that

Internet Banking System in Pakistan

customer protection is the major technical issues associated with internet marketing. Among other things, customer protection issues can cover unfair and deceptive trade practices by suppliers, unauthorized access and usage by others, such as hackers, or system failyures, Customer protection is important for building online customer confidence because there is no face to face contact, and there is a great possibility for having problems or making mistakes via the web. for having problems or making mistakes via the Web. Social, psychology and marketing research show the customers vary in the nature to maintain relationship with service providers such as banks. This shows that customers who desire social and psychological benefits by establishing personal relationships with banks will prefer traditional banking. Internet banking system will not be accepted for such customers. On the other type of customers whose relationship is based on efficiency of the services, internet banking will be an ideal situation (Gremler and M.J. Bitner, 1999). According to Rogers and Shoemaker,(1971)Before buying a product or obtaining a service customers usually investigate and think carefully. The same phenomena is pointed out by Guiltinand and Donnelly (1983), according to them it is important to aware about new products. Pakistani banks well aware about these phenomena and makes endeavor to spread awareness through their websites about their innovations. A research on customer satisfaction and internet indicate that information about content of product and its lay out are important factors that influence customer satisfaction (W.J. Doll, 1995). Stewart (1999) says that Customer confidence on internet banking depends on the action of bank against false transactions and security matters that appears during online banking. He claims that the reason

Internet Banking System in Pakistan

of failure of the Internet banking is due to the lack of consumers trust on electronic channels.

Customers trust is necessary to gain benefits of implementation of technology. Clients viewed trust as an expectation about competency to perform, reliability of transactions. It is proposed that trust is measured as a behavioral intention or behavior that shows reliance on the other partner. In addition Morgan and Hunt, (1994) defined trust as: The perception of confidence in the exchange partners reliability and integrity. These definitions highlight the significance of confidence and reliability in trust building. Turban, (2002) the issues of security of e-Transactions and privacy protection are serious factors and heavily relates to the clients. Not only service providers have to play a role in providing security of transactions, but also governments, with suitable regulations, must assure it. Despite announcement by Government of Pakistan about security of internet transaction and trust building ,digital signatures and other authentication measures are still doubted for the users. Opportunities from implementing web technology could be restricted if there is a lack of customer trust in the web system. They viewed trust as an expectation of ability to perform , reliability and intentionality of a partner, an proposed that trust has to be viewed as a behavioral intention or behavior that reflects dependence on the other partner.in addition( Morgan and Hunt, 1994) defined trust as the perception of confidence in the exchange partners reliability and integrity. Both definitions underline the importance of confidence and reliability in the conception of trust.

Frame Work of Adoption of Internet Banking

Internet Banking System in Pakistan

Adoption of Internet Banking

Customer Satisfaction

Customer Perception Risk & Privacy Security Awareness

Time Customer Perception Customer Experience Reliability

Customer Perception Customer perception refers to how customers feels/perceive while using internet banking in terms of security, reliability, accessability speed, and prompt customer services. Trust is the crucial factor in internet banking and is the main barrier to the customers in making online transaction, due to the security issues, and privacy issues concerning what happened with their personal details. Trust can also be linked to the customer services. Customer need to know that they can contact a bank if problem occur and preferably interact with a company. The use on FAQ should satisfy customers and deter them by using customer services option in internet banking portals. Risk & Privacy Risk and privacy are the key factor of internet banking. This is defined as a potential loss due to fraud or a hacker compromising the security of an Internet bank user. Both fraud and hacker intrusion not only lead to users' monetary loss, but also violate users' privacy, a major concern of many Internet users. Many consumers believe that they are

Convenience & Accuracy

Internet Banking System in Pakistan

vulnerable to identity theft while using Internet banking services (Littler and Melanthiou, 2006). Awareness Initially internet banking was launched in Pakistan to provide a limited number of services and it was sort of hype in the market. Customer readiness, acceptance & security awareness is also a factor which is improving as usage of internet banking is increasing. Convenience and accuracy The major difference lies in the convenience and accuracy offered by online banking particularly when it comes to making payments, obtaining updated information of the account, or integration account statements. Trustworthiness Trustworthiness is a willingness to rely upon someone in a transaction, therefore, trustworthiness is an expectation to perform reliabily. There are three reasons theoretically understood for customers to not having to rely upon internet banking 1. Systems security 2. Reliability 3. Perceived risk

Systems security security refers to the websites ability in protecting consumer personal information collected from its electronic transactions from unauthorized, strong concern about security is one common issues

Internet Banking System in Pakistan

related to unwillingness to use internet banking services( Madu,2002) security violation can lead to various disruption such as destruction of operating systems, or distruption of information system. Most customers are not satisfied with the security of web system(Blake 2000) in internet banking security is one of the major challenges, because customer fear hher risk in using the web for financial transaction(Cunningham,2003)

2 Reliability Reliability involves consistency of performance and dependability. It means that the firm performs the service right the first time. It also means the firm honors its promises especially it involves, accuracy in billing and information, keeping records correctly, performing the service at the designated time( Mckinney 2002) . Reliability is associated with the technical functioning of the e-banking site, particularly the extent to which it is available and functioning properly 3 Perceived risk Perceived risk can also cause customer to reject new internet banking services,. Percieved risk is related to reliability and system failure. Customers are also worried that technology based service delivery systems will not work as expected, and lack of confidence that problems can be solved quickly( walker 2002) found that transaction risks occurs when online markets fail to assure that service will be delivered with adequate quality.

Internet Banking System in Pakistan

3 Methodology RESEARCH METHODOLOGY SELECTED A list of banks that provides internet banking facilities in Pakistan is drawn from the information given on the website of State Bank of Pakistan and five banks are selected. Extensive research is carried on to explore the facilities that selected banks are providing. After that a closed ended questionnaire is designed. On convenience basis 100 questionnaires are get filled and inferential tests are applied on the data collected through this instrument .Respondents for the research are the employees of Habib Bank, Summit Bank, National Bank, Soneri Bank, located in Karachi.

For primary Data Collection

Closed ended questionnaire Structured interviews Surveys Direct observation

For secondary Data Collection

Research papers

Internet Banking System in Pakistan

Internet Professional Journals and Magazines Articles

3.2TREATMENT OF DATA Statistical tools and techniques are used in the data through SPSS (Statistical packages for social sciences) software. The data collected through primary research is calculated on the quantitative basis mean, standard deviation, correlation analysis, regression analysis is

calculated and ANOVA is also done.

Internet Banking System in Pakistan

CONCEPTUAL FRAMEWORK Independent Variables Dependent Variable

Customer perceptions

Risk & Privacy

Trustworthiness

Internet Banking System

Awareness

Convenience& Accuracy

Internet Banking System in Pakistan

Descriptives
Descriptive Statistics N internetbanking perception riskprivacy trustworthiness awareness convenienceaccuracy Valid N (listwise) 63 63 63 63 63 63 63 Minimum 1.20 1.29 1.00 1.00 1.00 1.00 Maximum 3.93 3.86 4.00 4.00 5.00 4.00 Mean 2.2233 2.1542 2.0238 1.9365 1.7857 2.0053 Std. Deviation .51864 .51223 .75364 .82546 .75517 .71965

According to respondents opinions the rating on dependent variable internet banking in banking sector was highest with a mean of (2.2233). The rating of perception was second highest with a mean of (2.1542), the rating of risk and privacy was third highest with a mean of (2.0238), the rating of independent variable convenience and accuracy was fourth highest with a mean of (2.0053), the rating of trustworthiness was fifth highest with a mean of (1.9365). And the rating of awareness is lowest with a mean of (1.7857). The standard deviation of respondents opinion on trustworthiness was the highest (0.82546), as compared to other dimensions. This indicates that there is a low involvement of trustworthiness in banking sector of Karachi.

Internet Banking System in Pakistan

Correlations
Correlations internetba nking internetbanking Pearson Correlation Sig. (2-tailed) N perception Pearson Correlation Sig. (2-tailed) N riskprivacy Pearson Correlation Sig. (2-tailed) N trustworthiness Pearson Correlation Sig. (2-tailed) N awareness Pearson Correlation Sig. (2-tailed) N convenienceaccuracy Pearson Correlation Sig. (2-tailed) N ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed). 63 .695(**) .000 63 .093 .466 63 .262(*) .038 63 .371(**) .003 63 .377(**) .002 63 63 .310(*) .014 63 .439(**) .000 63 .403(**) .001 63 .373(**) .003 63 63 .553(**) .000 63 .470(**) .000 63 .441(**) .000 63 63 .502(**) .000 63 .548(**) .000 63 63 .695(**) .000 63 63 1 trustworthi ness .262(*) .038 63 .439(**) .000 63 .553(**) .000 63 1 convenience accuracy .377(**) .002 63 .373(**) .003 63 .441(**) .000 63 .548(**) .000 63 .695(**) .000 63 1

perception .695(**) .000 63 1

riskprivacy .093 .466 63 .310(*) .014 63 1

awareness .371(**) .003 63 .403(**) .001 63 .470(**) .000 63 .502(**) .000 63 1

The data was analyzed through SPSS (statistical package for social sciences) software by using correlation and regression. The correlation test indicates that the relationship between the variables. The correlation values show that there is a perfect positive correlation of job internet banking with perception, awareness and convenience/accuracy and positive correlation with trustworthiness and no correlation with risk and privacy.
The dependent variable internet banking system has the strongest correlation with perception about internet banking (0.695**), with convenience /accuracy(.377**), with awareness issues in internet banking (.371**) and with trustworthiness has low interference in internet banking system (0.262*) and there is no correlation of risk and privacy about internet banking (.093) with the dependent variable internet banking system.

Internet Banking System in Pakistan

Regression of perception
Variables Entered/Removed(b) Variables Variables Entered Removed Method perception( . Enter a) a All requested variables entered. b Dependent Variable: internetbanking Model 1 Model Summary Adjusted R Square .475 Std. Error of the Estimate .37586

Model 1

R .695(a)

R Square .483

a Predictors: (Constant), perception

The R value show Coefficient of Correlation is the numerical measure of strength of the linear relationship between two variables. The R value (.695(a)) is show that there is positive correlation between the perception and Dependent Variable internet banking. The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R Square values (.483) mean 48% reliable to be used for estimation of population.

Internet Banking System in Pakistan The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The Std. Error value show that 37% Fluctuation of Sampling Mean. The R change shown that differences between R-value & Adjusted R square.

ANOVA
Model 1 Sum of Squares 8.059 8.618 df 1 61 62 Mean Square 8.059 .141 F 57.047 Sig. .000(a)

Regression Residual Total

16.677 a Predictors: (Constant), perception b Dependent Variable: internetbanking

The Sum of Square shows the total variability around the mean, the Sum of Square Residual mean the Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Prediction by using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent Variable. The degree of freedom means number of sample minus one. The F Test value (57.047) shows the combination of all variable, overall significances of the Model its mean one independent variable perception on Dependent variable internet banking and Observation of Independent Variable met.

Coefficients
Unstandardized Coefficients Model 1 B (Constant) perception .707 Std. Error .206 .093 .695 Standardized Coefficients Beta t 3.428 7.553 Sig. .001 .000

.704 a Dependent Variable: internetbanking

Internet Banking System in Pakistan The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. The St.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error. St.d Error of Constant (.206) value shows the 20% of fluctuation of sampling mean and the St.d Error of Independent Variable perception is (.093) value shows the 9% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and the outcomes variable were standardized prior the analysis and the Comparing the size of the coefficient across variable. The t value of Independent Variable perception is (7.553).According to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate hypothesis will be accepted.

Regression of risk and privacy

Variables Entered/Removed(b) Variables Variables Entered Removed Method riskprivacy( . Enter a) a All requested variables entered. b Dependent Variable: internetbanking Model 1

Model Summary Adjusted R Square -.008 Std. Error of the Estimate .52058

Model 1

R .093(a)

R Square .009

The R value show Coefficient of Correlation is the numerical measure of strength of the linear relationship between two variables. The R value (.093(a)) is show that there is no correlation between the risk and privacy Dependent Variable internet banking. The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R Square values (.009) mean 0.9% reliable to be used for estimation of population. The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The Std. Error value show that 52% Fluctuation of Sampling Mean. The R change shown that differences between R-value & Adjusted R square

Internet Banking System in Pakistan

ANOVA
Model 1 Sum of Squares Regression Residual Total .146 16.531 16.677 df 1 61 62 Mean Square .146 .271 F .538 Sig. .466(a)

a Predictors: (Constant), riskprivacy b Dependent Variable: internetbanking

The Sum of Square shows the total variability around the mean, the Sum of Square Residual mean the Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Prediction by using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent Variable.The degree of freedom means number of sample minus one. The F Test value (0.538) shows the combination of all variable, overall significances of the Model its mean one independent variable risk and privacy on Dependent variable internet banking and Observation of Independent Variable met.

Coefficients
Unstandardized Coefficients Model 1 B (Constant) riskprivacy 2.093 Std. Error .189 .088 .093 Standardized Coefficients Beta t 11.059 .733 Sig. .000 .466

.064 a Dependent Variable: internetbanking

Internet Banking System in Pakistan

The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. The St.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error. St.d Error of Constant (.189) value shows the 18% of fluctuation of sampling mean and the St.d Error of Independent Variable perception is (.088) value shows the 8% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and the outcomes variable were standardized prior the analysis and the Comparing the size of the coefficient across variable. The t value of Independent Variable risk and privacy is (0.733).According to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate hypothesis will be accepted.

Regression OF Trustworthiness
Variables Entered/Removed(b) Variables Entered trustworthin ess(a) Variables Removed .

Model 1

Method Enter

a All requested variables entered. b Dependent Variable: internetbanking Model Summary Adjusted R Square .053 Std. Error of the Estimate .50458

Model 1

R .262(a)

R Square .069

a Predictors: (Constant), trustworthiness

The R value show Coefficient of Correlation is the numerical measure of strength of the linear relationship between two variables. The R value (.262(a)) is show that there is positive correlation between the trustworthiness Dependent Variable internet banking. The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R Square values (.069) mean 6% reliable to be used for estimation of population.

Internet Banking System in Pakistan The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The Std. Error value show that 50% Fluctuation of Sampling Mean. The R change shown that differences between R-value & Adjusted R square

ANOVA(b)
Model 1 Sum of Squares Regression Residual Total 1.147 15.530 16.677 df 1 61 62 Mean Square 1.147 .255 F 4.504 Sig. .038(a)

a Predictors: (Constant), trustworthiness b Dependent Variable: internetbanking

The Sum of Square shows the total variability around the mean, the Sum of Square Residual mean the Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Prediction by using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent Variable.The degree of freedom means number of sample minus one. The F Test value (4.504) shows the combination of all variable, overall significances of the Model its mean one independent variable trustworthiness on Dependent variable internet banking and Observation of Independent Variable met.

Coefficients(a)
Unstandardized Coefficients Model 1 B 1.904 .165 Std. Error .163 .078 Standardized Coefficients Beta .262 t 11.667 2.122 Sig. .000 .038

(Constant) trustworthiness

a Dependent Variable: internetbanking

Internet Banking System in Pakistan The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. The St.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error. St.d Error of Constant (.163) value shows the 16% of fluctuation of sampling mean and the St.d Error of Independent Variable trustworthiness is (.078) value shows the 7% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and the outcomes variable were standardized prior the analysis and the Comparing the size of the coefficient across variable. The t value of Independent Variable trustworthiness is (2.122).According to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate hypothesis will be accepted.

Regression of awareness
Variables Entered/Removed(b) Variables Entered awareness( a) Variables Removed .

Model 1

Method Enter

a All requested variables entered. b Dependent Variable: internetbanking Model Summary Adjusted R Square .124 Std. Error of the Estimate .48551

Model 1

R .371(a)

R Square .138

a Predictors: (Constant), awareness

The R value show Coefficient of Correlation is the numerical measure of strength of the linear relationship between two variables. The R value (.371(a))is show that there is positive correlation between the awareness Dependent Variable internet banking. The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R Square values (.138) mean 13% reliable to be used for estimation of population. The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The Std. Error value show that 48% Fluctuation of Sampling Mean. The R change shown that differences between R-value & Adjusted R square.

Internet Banking System in Pakistan

ANOVA
Model 1 Sum of Squares 2.298 14.379 df 1 61 62 Mean Square 2.298 .236 F 9.750 Sig. .003(a)

Regression Residual Total

16.677 a Predictors: (Constant), awareness b Dependent Variable: internetbanking

The Sum of Square shows the total variability around the mean, the Sum of Square Residual mean the Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Prediction by using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent Variable.The degree of freedom means number of sample minus one. The F Test value (9.750) shows the combination of all variable, overall significances of the Model its mean one independent variable awareness on Dependent variable internet banking and Observation of Independent Variable met.

Internet Banking System in Pakistan

Coefficients
Unstandardized Coefficients Model 1 B 1.768 .255 Std. Error .158 .082 Standardized Coefficients Beta .371 t 11.182 3.122 Sig. .000 .003

(Constant) awareness

a Dependent Variable: internet banking

The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. The St.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error. St.d Error of Constant (.158) value shows the 15% of fluctuation of sampling mean and the St.d Error of Independent Variable awareness is (.082) value shows the 8% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and the outcomes variable were standardized prior the analysis and the Comparing the size of the coefficient across variable. The t value of Independent Variable awareness is (3.122).According to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate hypothesis will be accepted.

Internet Banking System in Pakistan

Regression of convenience/accuracy
Variables Entered/Removed(b) Variables Entered convenienc eaccuracy(a ) Variables Removed .

Model 1

Method Enter

a All requested variables entered. b Dependent Variable: internetbanking

Model Summary Adjusted R Square .128 Std. Error of the Estimate .48427

Model 1

R .377(a)

R Square .142

a Predictors: (Constant), convenience accuracy

The R value show Coefficient of Correlation is the numerical measure of strength of the linear relationship between two variables. The R value (.377(a))is show that there is positive correlation between the risk and privacy Dependent Variable internet banking. The R Square show Coefficient of Determination defines the square of Coefficient of Correlation. The R Square values (.142) mean 14% reliable to be used for estimation of population. The Std. Error is important because they reflect how much sampling Fluctuation a statistic will show. The Std. Error value show that 48% Fluctuation of Sampling Mean. The R change shown that differences between R-value & Adjusted R square.

ANOVA(b) Sum of Squares Regression Residual Total 2.371 14.306 16.677

Model 1

df 1 61 62

Mean Square 2.371 .235

F 10.111

Sig. .002(a)

a Predictors: (Constant), convenience/accuracy

Internet Banking System in Pakistan

b Dependent Variable: internet banking

The Sum of Square shows the total variability around the mean, the Sum of Square Residual mean the Sum of Squared Errors in Prediction and Sum of Square Regression mean the improvement in Prediction by using the predicted value of (Y) Dependent Variable over just using the mean of (X) Independent Variable. The degree of freedom means number of sample minus one. The F Test value (10.111) shows the combination of all variable, overall significances of the Model its mean one independent variable trustworthiness on Dependent variable internet banking and Observation of Independent Variable met.

Coefficients
Unstandardized Coefficients Model 1 B 1.678 .272 Std. Error .182 .085 Standardized Coefficients Beta .377 t 9.226 3.180 Sig. .000 .002

(Constant) Convenience/accuracy

a Dependent Variable: internet banking

The Std. Error is important because they reflect how much sampling fluctuation a statistic will show. The St.d Error of a statistic depends on the sample size in the general the larger sample of the St.d Error. St.d Error of Constant (.182) value shows the 18% of fluctuation of sampling mean and the St.d Error of Independent Variable perception is (.085) value shows the 8% of fluctuation of sampling mean.

Standardized Coefficients are the coefficient that you would obtain if the Predictors and the outcomes variable were standardized prior the analysis and the Comparing the size of the coefficient across variable. The t value of Independent Variable convenience/accuracy is (3.180).According to the rules if t value is greater that 2 (t>2.5) than null hypothesis will be rejected and alternate hypothesis will be accepted.

Internet Banking System in Pakistan

RESULTS and Findings

The arises from spss is given below:
Customer perception HO: Customer perception does not impact on the effective implementation of internet banking.(rejected) Ha: Customer perception does impact the effective implementation of internet banking.(accepted) RISK and privacy HO Risk and privacy does not affect the effective implementation of internet banking(accepted) HA : Risk and privacy does affect the effective implementation of internet banking.(rejected) TRUSTWORTHY HO Trustworthiness does not affect the effective implementation of internet banking.(accepted) HA Trustworthiness does affect the effective Implementation of internet banking.(rejected) AWARENESS HO Awareness does not affect the effective implementation of internet.(rejected) HA Awareness does affect the effective implementation of internet.(accepted) Convenience Accuracy HO convernience does not affect the effective implementation of internet banking.(rejected) HA : Convenience does affect the effective implementation of internet banking.(accepted)

Perception
According to results the null hypothesis is rejected and alternative is accepted because the t value of perception is greater than 2.5 which is 7.553 because
The people of Pakistan have thinking that the traditional or direct banking is far better than the internet banking or virtual banking.

Internet Banking System in Pakistan

Risk and privacy

According to results the null hypothesis is accepted and alternative is rejected because the t value of risk and privacy is lesser than 2.5 which is 0.733 because According to results people do not concern about risk and privacy because most of peoples do not have any awareness about internet banking so how could they know about risk involve in it.

Trustworthiness
According to results the null hypothesis is accepted and alternative is rejected because the t value of trustworthiness is lesser than 2.5 which is 2.122 because According to people they trust on banking system thats the reason that trustworthiness interaction is low than other variable thats why the alternative hypothesis is rejected.

Awareness
According to results the null hypothesis is rejected and alternative is accepted because the t value of awareness is greater than 2.5 which is 3.122 because people think that the awareness of internet banking has strong impact because they donot aware about the hidden charges of the bank and their services and that is un ethical practices in people point of view.

Convenience /accuracy
According to results the null hypothesis is rejected and alternative is accepted because the t value of convenience is greater than 2.5 which is 3.122 because
Internet banking should be user friendly and should provide accurate record in respondants point of view is inconvenient to them.

Internet Banking System in Pakistan

Conclusion and recommendation

In this report, researcher presents an overview of changing dynamics in the banking industry that, together with new technology, are creating the need to rethink the existing paradigm of financial services. Online banking become familiar and accepted by consumers.
In its early era commercial banks were identical to each other. Today the banks uncontrolled competitions that will call for all the creative initiative, innovation and entrepreneurial skills those bankers possess. Financial institutions today have reason to worry if they do not offer online banking services, affluent customers will be stolen away by software companies, on-line access services, brokerages or global entertainment companies. The objective of this study was to analyze the issues preventing adoption of Internet banking in Pakistan and the Perception regarding the Online Environment in Pakistan. Findings show that all respondents do not have confidence to make any big financial transactions over internet, and have no satisfaction from Internet banking services. Proper completion of the transaction from the beginning to end is the most important service quality for Internet banking users. Unfortunately respondent faced problem so many times during a payment process and they have to start the whole process from the beginning which is inconvenient. This kind of problem creates a lot of tension whether the incomplete transaction has any effect on the account balance. So they have to check again if the account balance is ok or not. It wastes a lot of time and create mental uncertainty.

Internet Banking System in Pakistan The respondents are not satisfied with the Internet banking services. They cant rely on banks website because some time its malfunctioning. If any mistakes happen when he makes transactions, then they are not sure that banks staff will respond on time and will take care of secure transaction. They dont have a good image about Internet banking. According to respondent proper delivery of the services and keeping their promises is important to measure reliability. Furthermore, they said that new Internet banking service delivery systems is not working according to his expectation. They mentioned that many senior banks managers do not fully understand the strategic and technical aspects of Internet banking services, so very few banks administration have the skills to manage Internet banking services. Furthermore, they think banking service over the Internet is quite unreliable in Pakistan. They find the bank site down for a couple of hours and some time whole day too. They mentioned that one cant rely on the appropriate functioning of the website. The banks sites mostly remain down due to low internet speed and software problems. Bankers consider minimizes inconvenience, minimizes cost of transactions and time saving to be important benefits and chances of government access, chances of fraud and lack of information security to be vital risks associated with electronic banking. The researcher tried to focus various aspects of internet banking but still there is a need to discover many other factors specially phishing threat in internet.

Recommendation
To conduct a research with corporate customers and financial institutes to investigate all external and internal issues of Internet baking system and customer adoption intention towards these issues. The delivery of financial services over the Internet should be treated as a part of overall service and distribution strategy. customer

Internet Banking System in Pakistan The Scope of internet banking is high and people are getting familiar with it so it is the responsibility of banks that are not yet provide the internet banking services to start giving internet banking services to their customers to compete through technology and win the customers loyalty. Government of Pakistan must recognize their role and play their part in the game and they should make things easier to understand for the banking sector of Pakistan. All banks should provide 24 hourInternet-based monitoring and assistance for IB services that have problems or need immediate assistance.

Internet Banking System in Pakistan