Adoption of E-

1
Banking

Growing Trends: Factors behind Growing User Consumption of e-Banking Services in

Gilgit Baltistan

Abstract

Purpose —To study, recognise, access, and suggest the factors behind growing trends of

rising user consumption of e-banking services in Gilgit Baltistan.

Methodology — Quantitative research approach of questionnaire and face-to-face

discussion was adopted to highlight and find out the factors behind increasing user adoption of e-

banking services in Gilgit city. The sample size had 200+ respondents.

Findings — The research identifies and establishes that the factors such as accessibility

or availability and speed of technology (mainly internet and Wi-Fi), sharpness of technology

usage (mainly practical knowledge of e-banking features), at least medium income level, age-

factor (students of universities and middle-age workers in offices), use of e-commerce sites or

online shopping, and reasonable service charges contribute in growing user adoption of e-

banking services in Gilgit. Elements of lack of trust, fears of privacy, and techno-illiteracy were

the factors which discourage the consumers from using e-banking services.

Research Limitations — The research has reservation of generalisation as small

sampling of Gilgit city cannot represent all urban, suburban, and rural areas of Gilgit Baltistan

However, sampling involves capital city of Gilgit Baltistan which has representation of people

from all across the Gilgit Baltistan and almost every walk of life. Therefore, this research offers

freedom to generalise the accumulated factors to greater extent.

 Adoption of E-
2
Banking

Practical Implications — Future researchers can build on this research and contribute in

finding more factors behind the growing trends of e-banking user-consumption in accordance

with time. The research provides the banks with information of which factors hinders the

consumption of e-banking such as fears for privacy, and lack of trust. Banks could improve on

these factors so they can get more consumers. They could over-simplify the user interface and

easy usage to awaiting masses. Technology industry can take the factors of low usage in aged

population and lack of technology sharpness and take steps to address these limitations and

increase awareness of masses on practical knowledge of technology.

Originality — This research follows Malaysian perspective established by Wai-Ching

Poon which generalised Malaysia in the research. In result, this research offers an idea which

factors contribute in growing use of e-banking in low-income countries and introductorily trims

down basic grey areas for banks and technology sector which could be addressed and in result

that could increase the number of their consumers along with urban, suburban, and rural model.

Keywords — E-banking in Gilgit, Internet Banking in Gilgit, Online Banking in Gilgit.

Introduction

In traditional terms, definition of Electronic Banking or E-Banking is given as a process of

banking in which the transactions are conducted by the customers through internet or electronic

devices such as ATMs.

Rendering of services and information by banks to their consumers through various digital

channels which e.g. laptops, mobiles or smart phones, PCs or digital television can be termed as

e-Banking (Daniels, 1999). When a physical bank initiated and sets up a portal where consumers
 Adoption of E-
3
Banking

process or get the info about the products, or its services is called internet banking[ CITATION

Yap10 \l 1033 ].

Summarising the definitions read and acquired from various journals and books, E-

banking is a system in which a consumer has freedom to access the information, check the

account, or use the services provided by a bank through a electronic device such as ATMs,

personal computer, or mobile phones. The function of e-banking is to offer freedom to monitor

the personal or corporate bank accounts from distance, perform transactions, online money

transfer, online shopping, etc. from distance, from anywhere, and at anytime. This study looks at

the factors which have largely contributed to the increasing user consumption of e-banking in

Gilgit.

Gilgit, with an estimated population of nearly 120 million, has seen a record increase of

internet users as 16.8% of its population use internet services which is the second highest in

SAARC countries, only Maldives with its 28.3% exceeds Pakistan

One report acknowledged that there is no official data on e-commerce users but the

numbers on e-commerce platform present a picture that penetration of market was in the length

of $29.9 million per annum (Siim Teller, 2013). The same report also established the figure of

internet consumers who connect through mobile or smart phones constitute the 50% of total

internet users (Siim Teller, 2013).

These figures stated above offer a glance at potential market for online banking service

providers.People working on the study project an even more escalation of internet-service

penetrationin Pakistan in coming five years which will give banks endless opportunities.
 Adoption of E-
4
Banking

In Pakistan, the way the banks work has seen a welcome transformation with innovation

at helm and preference to technological advancement. On the other hand, the problems such as

whether e-banking is efficient and the behaviour of banks toward it (Muhammad Rahimmuddin,

et al., 2010) has been discussed but no connection has been found between increasing numbers

of internet users in Pakistan and what factors come in to play for the customers to use e-banking

given the huge potential market.

On the contrary, the growth of e-banking in the world itself was speculated to increase

(Lichstenstein and Williamson, 2005) and traditional ways the banks used to work has seen a

huge transformation (Gonzalez, et al, 2008) which in result has shifted the way markets work

and businesses perform (Broadie, 2007).

Objectives and Significance of this Study

In the light of preceding discussion with facts and figures, various questions emerge,

primarily, what are the factors behind the growing trend of e-banking consumption in Pakistan?

Secondly, which grey areas hinder the rise of e-banking that could be addressed and in result e-

banking could level-up in contrast to mammoth growth of internet-users in Pakistan? These are

the questions which have left the gaps in previous literature. These questions must be adequately

looked at so gaps could be traced and addressed so the factors and grey areas are enhanced and

sorted out respectively which could see the percentage of e-banking services consumption rise in

a respective proportionate to the overall number of internet users in Pakistan.

The organisation of this study is as followed: the next section briefly builds the hypothesis

and model followed by methodology and later the literature review. Then, findings and results
 Adoption of E-
5
Banking

are presented. Lastly, the conclusion is given with the implications and possibilities are presented

for any future research.

Hypothesis

The base research on Malaysian Perspective followed the questionnaire model

comprising of two sections;

Demographics

2. Questions assessing the factors for user adaption.

It was difficult to generalise Pakistan that way as Pakistan is quite a large country as

compared to Malaysia and very diverse in terms of demographics, regions, cultures, and varying

lifestyles so we made a hypothesis where we have put the model on three significant Diasporas

which make it easier to generalise behaviours due to uniformity across Pakistan.

1. Urban

2. Suburban

3. Rural

This research has a model of urban, suburban, and rural spaces where Islamabad is urban,

Rawalpindi represents suburban with its city-centre and villages on its outskirts, and Rawat

denotes the rural mass.

We can safely presume that the factors which we tried to find along with grey areas or black

spots which need addressing from managerial implication point-of-view are independent
 Adoption of E-
6
Banking

variables whereas user adoption or consumption in those spaces of Pakistan are dependent

variables.

The reason to select the model of three different spaces such as urban, suburban, and rural is

because of the behaviour of the people across the Pakistan in those spaces. It is presumably

generalised that there is uniformity in the lifestyle of people living in cities due to education

system, general awareness on issues, work-spaces, and overall attitude toward life. Same is the

case with rural people who are normally generalised in such way due to lack of technology,

infrastructure, inferior education system, and computer illiteracy while the suburban spaces has

the mixture of both urban and rural lifestyle and behaviour among people.

E.g. what one presumes is the overall lifestyle of people in Karachi will generally find the

same in Lahore, Islamabad, Peshawar, or Quetta. Similarly, same hypothesis can be held for

suburban or rural places.

H1: What are the factors (beside motivation)behind Growing User Consumption of e-Banking

services in Pakistan?

H2: Which grey areas hurdle Growing User consumption of e-Banking services in Pakistan?

3.1 Factors

The factors which were initially up to debate and were largely found later in the research

survey were accessibility of technology, availability of technology, technology know-how,

quality of services, simplification of web-portals, medium income level, age-factor (students of

 Adoption of E-
7
Banking

universities and middle-age workers), tendency to use online shopping, reasonable service

charges, and trust between the consumers and the overall satisfaction of the user while using

services of banks.

3.2 Grey Areas

Elements of lack of trust, fears of privacy, techno-illiteracy, use of personal information

such as mobile numbers given to third-party partners for commercial use of promotional text

messages, and lack of guidance availability on e-banking websitesfor the functions were the

factors which discourage the consumers from using e-banking services.

Determinants (+)
Growth in User Consumption
of E-Banking Services in
Pakistan
Grey Areas (-)

Literature Review

16.8% of the population of Pakistan has access or availability to internet. However, of

total population in Pakistan, only 36% of population is based in urban spaces and 64% of the

population resides in rural areas but 70% of the population is under the age of 30 (Siim Teller,
 Adoption of E-
8
Banking

2013). In another survey conducted by Tribune, 51% of people aged 18-25 had said they had

spent money online while the figure for the age-group of 25-30 stood at 65.45%

(JahanzaibHaque, et al; Tribune, 2013).

In terms of net speed, Broadband majorly offered by PTCL and Wateen in most of the

major cities is available at one Mbps to fifty Mbps. People residing in more than 100 major cities

have access to PTCL Evo which offers speed of nine point one Mbps while DSL broadband

service of PTCL witnessed a major change in mere five years which expanded to more than 1200

cities of Pakistan (Winars tech blog, 2010). Wateen launched itsWiMax service in 2007 with

speed available from 256 mbps to nine point eight Mbps which was later joined by Wi-Tribe,

Mobilink, and Qubee (Pro Pakistani, 2012).

Majority of the respondents in the survey by (JahanzaibHaque; Tribune, 2013) use

internet over five hours daily followed by those who use it at least four to five hours a day.

People of nearly 60% aged 18-25 said they spent Rs. 500 to Rs. 1500 on internet monthly while

27% were willing to spend between Rs. 1500 to Rs. 3000. However, ratio of net spending in the

age group 25-35 is 41% spend Rs. 500 to Rs. 1500 and 40% spend Rs. 1500 to Rs. 3000

(JahanzaibHaque; Tribune, 2013).

Loyaltyhasremainedmain traditional objective sought after by the management personnel

(Andreassen, 1999) because higher the long-term customer loyalty, the higher theintention for

adoption or consumption will be. Definition of loyalty can be suggested asintent of a

consumerwhich compels to repetitively buy or get the products or services from same firm

(Edvardsson et al., 2000). It can be argued that the predetermined perception of value got from

one service provider is greater than the value available from other substitutes (Hallowell, 1996).
 Adoption of E-
9
Banking

Banks have tocalculate and determine their level of service quality accordingly to satisfy

the needs of their customers if they intend to keep a loyal base of consumers (Saha and Nesa,

2011). For, the long term competitiveness and success of business largely depends on customer

satisfaction (Henning Thurau and Alexander, 1997) as customer satisfaction translates in to loyal

consumers for foreseeable future.

Quality of servicehas been determined as one of the most effective means to establish

edge of competition and a platform for performance enhancement with profit maximisation

(Lewis, 1993).

Banks have to ensure that their quality of service is up to par excellence in competition if

they want to build long term customer base and keep them satisfied(Hall, 1995; Saha and Nesa,

2011) asloyalty of customers directly depends on their level of satisfaction which is correlated to

the quality of services they get (Petruzzellis et al., 2006).

Some suggest that development of software or programme on the basis of desires and

expectations of consumers is essential for prolonged and strong environment of consumer

relations (Zeithaml, et al.1990).It means realisation of satisfactionplatform for consumers which

will estimate the level of it and renderingof services and products according to it.

On other hand, quality of services measures the level of satisfaction as they consider the

quality of services as an essential denominator to calculate the satisfaction level (Sobhy, 2013;

Soteriou and Stavrinides, 1997) of the consumers.It means that managers must make it sure the

level of their services to the customers is abrupt and with no flaw as it will ensure they are
 Adoption of E-
10
Banking

provided with necessary competitive edge in terms of providing services, service quality, level of

satisfaction of their customers, and in the end, ensuring long term loyalty from those customers.

The strategy up for discussionis opposite of how it is used in banking sectorbecause many

relationship experts, (e.g.McKenna, 1992) arguedmarketing team should make strategies

keepingthe aim of long-term and ever-improving commitment from their consumers as, keeping

the discussion of online banking aside for a moment, it was suggested that face-to-face

interactions under the confinements ofbranches of the banks will remain and become

importantregardless of the new technological advancements seeing the light of daywith

newfound limelight and fame (Roth and Van der Velde, 1989).

However, preferential options on the mode of interactions are equally essential for banks

and the consumers of the banks because the break-even point in terms of service quality, mode of

interaction, satisfaction level willhelp to calculate and gaugehow the quality of relationship is

perceived and can be made better and on which end i.e. banks or the customers.

It is normally generalised or presumed the consumers of business bankshave a preference

of selective or face-to-facecommunication with bank (O’Donnell, 2002) even when e-banking is

considered advanced because lot of businesses prefer to have records with receipts of duplicates

which is a traditional way of keeping things.

This actually reaffirms the reliance on face-to-face and personalised interactionswhile

performing tasks in a traditional way where reliance on technology is less and reliance on human

interactions is greater which is not new or strange.

 Adoption of E-
11
Banking

One study suggested that mode of communications used for variety of services should

have an option for traditional as well as electronic simultaneously (Patricio; et al, 2003).

However, banks find themselves at the verge of a conundrum that they are under

impression that customers may like the availability or an option of e-banking but when they shift

from face-to-face or personalised banking, their continued face-o-face time with the personnel at

the bank would recedeand that may affect prolonged commitment of the consumers (Sarel and

Mamorstein, 2003), however, it can be argued that this perception is there because personnel or

the management at bank consider face-to-faceand e-banking are exclusive or replaceable (Wong,

2008). When in reality, perceptionshould be face-to-face and e-banking actually

complementeach other.

Hacking phenomena along with privacy invasionformulate uncertainty over online

services (Hoffman et al., 1999; Yoon, 2002).In order to address uncertainty and fears among the

consumers, the bank managers need to spend time on formulating a plan or strategy to bridge the

trust-gap so thatconsumers can have an efficient and meaningful medium of service delivery and

that will result in growth of user-consumption because if trust is not their among consumers then

their prolonged use of online banking service will remain in jeopardy (Suh andHan, 2002).

Studies have shown that trust canaffect the online banking usage (Suh and Han, 2002;

Liu andWu,2007), and alsoit can have an effect on customers’ general reliance towardonline

banking (Vatanasombut et al., 2008).

If a consumer is expected to build trust from the context of online banking, then it should

be ensured that whatever info the customerwould record on the servers of the website would not
 Adoption of E-
12
Banking

be uncovered to any third party partners (Suh and Han, 2003) and any transactions they perform

would be safe and secureand any doubts on the minds of customers regarding these very delicate

issues would create the grey areas which in result would deter the users from using e-banking

services.

Because, it is a common belief in terms of online usage, e-banking or not, that thoughts on

privacy and security can get affected by surety of no invasion or sharing with third-party

partners, policies on privacy, and other security mechanism (Suh and Han, 2003) because the

uncertainty over perceptions of security and privacy can have a daunting effect on long-term or

even short-term confidence in online services of any website use of the users.

Methodology

As the research is exploratory in terms of survey, it was believed that questionnaire would

serve the purpose in an efficient and time-saving manner and that it would garner the answers to

the questions which have been raised here. Surveyors made it to the different banks of

Islamabad, Rawalpindi, and Rawat where the questionnaire was given to the people at banks and

outside the banks and they were asked to pick the best answer they could relate with.

With most of the people, verbal discussions was also carried out where they were kind

enough to give us their time and present us with long answers on how they were contributing in

growing consumption of e-banking and what the factors were behind them, also told about what

their insecurities regarding e-banking have been, and what their suggestions were to make it

more accessible to them.

 Adoption of E-
13
Banking

There were 100 questionnaire papers given in Islamabad, Rawalpindi, and Rawat each;

taking the grand total to 300 respondents. This gives 300 different people in three different

vicinities of the capital territory. It was observed that respondents had similarity in replies from

where they were such as replies almost co-signed from every other person in Islamabad and

same was the case with Rawalpindi and Rawat. This paves way to generalise the data according

to urban, suburban, and rural denominators.

However, as the study suggests at the start, this cannot be taken as generalised study for

entire Pakistan but it gives an outlook to greater extent for urban, suburban, and rural spaces.

The justification for questionnaire and face-to-face discussions as data collection procedure

is that it is simplest and the most appropriate information gathering procedure because the

respondents are there to ask you question about any ambiguity, which they might have, on the

spot and you get to have a closer look on how respondents perceive things differently.

AtherAkhlaq and Ejaz Ahmed came up with motivation factor in their research to get the

points across on how they saw motivation as the defining factor behind people using more of e-

banking services in relatively poor countries, their study suggested that extrinsic motivation

referring to performing something that has a separable outcome other than the activity performed

for example salary, increasing job performance, etc., whereas intrinsic motivation refers to

performing an activity because it inherently is deemed as enjoyable or interesting (Deci and

Ryan, 1985).
 Adoption of E-
14
Banking

On the contrary, this study looks more closely and gets to find the elements or factors which

compel people to use e-banking services more than before and to achieve that, questions for the

survey purpose were intended in that direction by keeping it precise, direct, and to-the-point.

The questionnaire consists of age, gender, income scale, frequency of internet usage,

frequency of e-banking usage, reservations, securities, quality of service, quality of privacy, and

a space was left for suggestions/worries they had which they thought they needed addressed

which was quite random but mostly about questions on privacy control and security issues

concerning whether if their information was safe.

Data Collection

People who were being attended at numerous banks or those who were in waiting area

were picked and told about the survey and were asked to fill it in. In Islamabad, it had three to

four foreign participants, while it was tried at its best to keep the gender representation equal in

numbers. Gender representation proved to be a difficult task in Rawat as there were very few

women using banks in Rawat. Most of the participants from every area were students, some

doing part-time jobs but equally nuanced with the concepts so that it was to establish that their

answers would be honest and accurate.

In Rawalpindi, the people mostly had military background and some were landlords. This

proved to be a plus point as they are the ones who have ample of money and are more likely to

have transactions on regular point but a few of them were not well-versed in tech-use so it gave

us another spectrum of conclusion or finding.

 Adoption of E-
15
Banking

In Rawat, most of the people needed help regarding the questions and concepts but once

they were clear, they offered an interesting contribution to this study which is presented in

findings and discussion below.

The data collection took two weeks to be compiled, gathered, and collected.

Findings and Discussion

7.1 Islamabad:

144 respondents were male and 156 were female. People from every walk of life, whether

they are students or with work, regularly use e-banking services. Main factor behind growing

consumption of e-banking services in Islamabad, which is an urban space, was that it is quite

convenient, and saves a lot of time. They prefer using online banking than going to a bank

branch itself.

Another factor which contributes in over-flowing and increasing consumption of e-banking

services is that it blends with online shopping. People who are involved in online shopping are

found to be usingonline banking with more frequencyfor balance inquiry and 24-hour access to

their accounts.

The inclination to use tele-marketing and branch visits was relatively lower than the

preference to use e-banking from their laptop, or mobile.

People in Islamabad were observed as more tech-savvy as compared to Rawalpindi and

Rawat so being a tech-savvy was also found to be one of the reasons to consume e-banking

services slightly more.

 Adoption of E-
16
Banking

7.2 Rawalpindi:

People in Rawalpindi are more inclined to visit branches as compared to online-banking

as people deposit the cash in their accounts and mostly they were slightly unaware of e-banking

functions as compared to Islamabad. Once they were told that they could transfer funds and

inquire about the balance by using online banking, they seemed open to use it more as it could

save them a lot of time. Time-saving remained one of the driving forces to prefer e-banking

services in all of the spaces once they were told that they could perform some basic actions from

e-banking at home or office.

7.3 Rawat:

Rawat had a large male population in respondents. Most of the times, they kept asking

about many concepts. Internet usage itself was found to be at lower proportion as compared to

urban and suburban areas which brought us to conclusion that if net usage is lower, the

consumption of e-banking services would be also lower.

Bringing the debate of urbanization in to this study, the more urbanised the spaces are,

the more facilitated population would be with modern technology, and innovations. More

technology in life, they would use computers, smart-phones, laptops, and other things in

abundance. The more of these gadgets available to masses, the more they would use net for

entertainment and knowledge. The more they use it; they would be expected to use online

banking services in more frequency to save their time. But, urbanization and tech-use is

completely different topic however the suggestion has been made here for any future research to

see the correlation with close angle in a case study or term paper.
 Adoption of E-
17
Banking

However, use of ATMs in Rawat was relatively equal to that of Rawalpindi and

Islamabad.It was also observed that when people of Rawat, especially students, were told about

different services of e-banking, they seemed more encouraged to use e-banking services in

future. It means, people in rural areas of Pakistan are less tech-savvy but once they are informed

and they find it up-to their use, they show preference to use it more.

Factors Degree of Agreement

Strongly disagree Disagree Agree Strongly Agree

Accessibility

1-Internet accessibility 4 3 2 1

2-Details on bank charges apply 4 3 2 1

3-Details of overdraft facilities 4 3 2 1

4-Site has details on security arrangements 4 3 2 1

Customer Convenience

1-I can access anytime and anywhere 4 3 2 1

 Adoption of E-
18
Banking

2-E-banks transaction is easy to use 4 3 2 1

3-User friendly 4 3 2 1

4-Easy login 4 3 2 1

Customer satisfaction

1-Bank provides e-banking help desk 4 3 2 1

2-Bank provides customer feedback services 4 3 2 1

3-Confidential information is delivered safely from

banks to customers 4 3 2 1

4-I am satisfied with the security system 4 3 2 1

Education

1-I think computer literate keeps me

using e-banking services 4 3 2 1

2-I check my transaction details

and statement regularly 4 3 2 1

 Adoption of E-
19
Banking

3-No queue 4 3 2 1

4-Account access when abroad 4 3 2 1

1. Internet accessibility

1 Strongly
105 35%
- Agree
2 186 62%
3 5 2%
Strongly
4
Disagre 4 1%
Strongly Strongly -
e
Agree Disagree
2. Site has details when bank charges apply

1 Strongly
57 19%
- Agree
2 226 75%
3 14 5%
4 Strongly
3 1%
Strongly Strongly - Disagree

Agree Disagree
3. Site has details of overdraft facilities
1 Strongly
33 11%
- Agree
2 240 80%
3 20 7%
4 Strongly
7 2%
- Disagree

Strongly Strongly
 Adoption of E-
20
Banking

Agree Disagree
4. Site has details on security arrangements

1 Strongly
48 16%
- Agree
2 225 75%
3 18 6%
4 Strongly
9 3%
Strongly Strongly - Disagree

Agree Disagree

Customer Convenience

1. I can access anytime and anywhere

1 - Strongly Agree 83 28%

2 203 68%
3 11 4%
4 - Strongly Disagree 3 1%

Strongly Strongly

Agree Disagree
2. E-banks transaction is easy to use
1 - Strongly Agree 68 23%
2 207 69%
3 22 7%
4 - Strongly Disagree 3 1%

Strongly Strongly
 Adoption of E-
21
Banking

Agree Disagree
3. User friendly

1 - Strongly Agree 57 19%

2 211 70%
3 30 10%
4 - Strongly Disagree 2 1%

Strongly Strongly

Agree Disagree
4. Easy login

1 - Strongly Agree 75 25%

2 200 67%
3 21 7%
4 - Strongly Disagree 4 1%

Strongly Strongly

Agree Disagree

Customer satisfaction

1. Bank provides e-banking help desk

1 - Strongly Agree 36 12%

2 239 80%
3 20 7%
4 - Strongly Disagree 5 2%

Strongly Strongly

Agree Disagree
 Adoption of E-
22
Banking

2. Bank provides customer feedback services

1 - Strongly Agree 40 13%

2 230 77%
3 28 9%
4 - Strongly Disagree 2 1%

Strongly Strongly

Agree Disagree
3. Confidential information is delivered safely from banks to customers

1 - Strongly Agree 35 12%

2 242 81%
3 19 6%
4 - Strongly Disagree 4 1%

Strongly Strongly

Agree Disagree
4. I am satisfied with the security system

1 - Strongly Agree 38 13%

2 237 79%
3 18 6%
4 - Strongly Disagree 7 2%

Strongly Strongly

Agree Disagree

Education

1. I think computer literate keeps me using e-banking services

 Adoption of E-
23
Banking

1 - Strongly Agree 90 30%

2 194 65%
3 14 5%
4 - Strongly Disagree 2 1%

Strongly Strongly

Agree Disagree
2. I check my transaction details and statement regularly

1 - Strongly Agree 35 12%

2 45 15%
3 180 60%
4 - Strongly Disagree 40 13%

Strongly Strongly

Agree Disagree
3. No queue

1 - Strongly Agree 62 21%

2 40 13%
3 161 54%
4 - Strongly Disagree 37 12%

Strongly Strongly

Agree Disagree
4. Account access when abroad
 Adoption of E-
24
Banking

1 - Strongly Agree 63 21%

2 213 71%
3 19 6%
4 - Strongly Disagree 5 2%

Strongly Strongly

Agree Disagree
Table IV Growing Trends: Factors behind Growing User Consumption of e-banking

Services in Pakistan

Factors Strongly Agree Agree Dis agree Strongly disagree Mean standard Deviation
Accessibility
. Internet accessibility 35% 62% 2% 1% 3.97% 0.7308
Site has details when bank charges apply 19% 75% 5% 1% 4.00% 0.7911
Site has details of overdraft facilities 11% 79% 7% 2% 3.96% 0.8275
Site has details on security arrangements 16% 75% 6% 3% 3.03% 0.9259
Total Mean 20% 73% 5% 2% 3.84% 0.9104
Customer Convenience
I can access anytime and anywhere 27% 67% 4% 1% 4.32% 0.9625
E-banks transaction is easy to use 23% 69% 7% 1% 3.79% 0.8299
User friendly 19% 70% 10% 1% 3.97% 0.7399
Easy login 25% 66% 7% 1% 3.76% 0.8053
Total Mean 24% 68% 7% 1% 3.92% 0.9492
Customer Satisfaction
Bank provides e-banking help desk 12% 79% 7% 2% 3.99% 0.8100
Bank provides customer feedback services 13% 76% 9% 1% 4.00% 0.7911
Confidential information is delivered safely from banks to customers 12% 80% 6% 1% 3.24% 1.0160
I am satisfied with the security system 13% 78% 6% 2% 3.85% 0.9884
Total Mean 13% 78% 7% 2% 3.78% 0.9173
Education
I think computer literate keeps me using e-banking services 30% 64% 5% 1% 3.84% 0.9178
I check my transaction details and statement regularly 12% 15% 60% 13% 3.87% 0.9389
No queue 21% 13% 53% 12% 4.49% 0.7369
Account access when abroad 21% 71% 6% 2% 3.24% 1.0645
Total mean 19% 66% 12% 3% 3.92 0.9492
 Adoption of E-
25
Banking

Table 1

Demographic Profile / Variable Frequency Percentages%

Gender

Male 169 56.3

Female 131 43.6

Age below

25 91 30.3

26-45 159 53

46 and above 50 16.6

Education level

The most secondary education 14 4.6

Diploma 87 29

Degree 151 50.3

Postgraduate 48 16

Income level (monthly)

Less than RS 15000 55 18.3

RS 15000-RS 30000 88 29.3

RS 30000-RS 60000 96 32

RS 60000 and above 61 20.3

Computer literacy

Yes 255 85

No 45 15
 Adoption of E-
26
Banking

Internet accessibility at home/office

Yes 250 83.3

No 50 16.6

Hand phone availability

Yes 296 98.6

No 6 2

Table II Relationship between demographic variables and e-banking adoption

Items F-Value Significance

Gender 5.110 0.482

Age 9.771 0.020*

Education level 11.241 0.017*

Income level (monthly) 10.087 0.049*

Computer literacy 12.312 0.044*

Internet accessibility at home/office 10.249 0.039*

Hand phone availability 2.710 0.245

Table III Analysis of variance and reliability test on factors affecting e-banking acceptance
 Adoption of E-
27
Banking

Factors F-Value Significance Cronbach’s alpha coefficient

Convenience 33.40 0.004* 0.9861

Accessibility 30.71 0.012* 0.9813

Feature 27.15 0.0345* 0.8879

Availability

Bank management 24.81 0.026* 0.8320

and image

Fees and charges25.68 0.050* 0.8054

Privacy 29.51 0.002* 0.9914

Security 30.92 0.002* 0.9956

Design 20.27 0.052* 0.7220

Content 23.11 0.026* 0.7809

Speed 24.51 0.033* 0.8819

Demographics of the sample

According to our survey, 56.3% are male respondents and 43.6% are females. Majority of

the respondents i.e. 53% of them are in the age group of 26-45 years, while 16.6 % are above 46

years of age. The survey shows that 50.3% of the respondents are degree holders where as 16%

are postgraduates.32% of the respondents have moderate level of income and 20.3% earn around

Rs.60,000/- monthly. Out of 300 respondents, 255 which is 85% are computer literate, they

know its proper usage where as only 15% does not have knowledge about the computer
 Adoption of E-
28
Banking

usage.83.3% of the respondents have access to the internet at their homes and through their hand

phones.

In order to examine the influence of demographic variables over e-banking, the

relationship between different demographic variables is tested through ANOVA (analysis of

variance). The result is shown in Table II, which clearly shows that all of the demographic

variables i.e. gender, age, education level, income level, computer literacy, internet accessibility

and hand phone availability have significant influence over e-banking.

The results show that upper and middle income group tends to use more e-banking

services than the old age group as they don’t much worry about their financial position and

bank’s risk. They are likely to have internet accessibility at their homes and activate the e-

banking services easily. It is to be noted that the young age group does affect the e-banking

services as they are more likely to adopt the new upcoming technologies and get benefit of the

services very easily. The factor of gender does not as such show that who, either males or

females use services of e-banking. And also the hand phone features does not have significant

influence over e-banking may be because of the service charges because of which many of the

consumers do not activate the e-banking services through their phones.

Factors influencing the usage of e-banking services

The factors that influence the adoption of e-banking services in Islamabad are identified

using ANOVA (analysis of variance). And the results show that Privacy and Security are the two

major important factors that have significant influence on the adoption of e-banking, where as all

the other factors i.e. convenience, internet accessibility, bank management and image, fees and
 Adoption of E-
29
Banking

charges, privacy and security and speed are significantly affecting the adoption of e-banking at

p , 0.05.

Reliability Test

Factor 1: Convenience

The convenience factor is one of the critical factor that influence the adoption of e-

banking and it has third highest Cronbach’s alpha co-efficient which is 0.9861.67% of the

respondents with a mean of four point three two and standard deviation of 0.9625 thinks that

access is e-banking is very easy and they can access anytime and anywhere. Where as 69% of the

respondents take the e-banking transactions very easy. While, majority of the respondents i.e.

70% take e-banking as user friendly ,its easy for them to do the transactions on regular basis.

And for 66% of the respondents getting logged in for e-banking services is quite easy.

Factor 2: Accessibility

Accessibility is another important factor affecting the adoption of e-banking in Islamabad

with the fourth highest Cronbach’s alpha coefficient of 0.9813. Majority of the respondents i.e.

67% agrees that they have internet accessibility which makes for them easier to adopt e-

banking .But there are still two percent of the respondents who disagree with the accessibility

because according to them at times the have to face un accessibility due to power shut down and

in that case banks should give notice before to their customers in order to overcome the

problems.79% agrees that the site has details of overdraft facilities and security arrangements

with the mean of 3.03 and standard deviation of 0.9259, but there are seven percent of the

respondents who disagree with this statement.

 Adoption of E-
30
Banking

Factor 3: Customer Satisfaction

The most important factor which has the highest Cronbach’s alpha coefficient of 0.9856

which significantly affects the adoption of e-banking. The respondents with the total mean of

78% are satisfied with the e-banking services over all.80% of them with the mean of 3.24 and

standard deviation of 1.0160 believe that the confidential information is safely transferred from

banks to the customers.78% of the respondents are satisfied with the security system provided by

the banks for e-banking services. This factor shows a growing trend towards the adoption of e-

banking services in Islamabad as majority of the customers are truly satisfied with the e-banking

services provided to them.

Factor 4: Education

Computer literacy is one of the crucial factors affecting the adoption of e-banking, since

there is a higher percentage of the consumers who are computer literate they are therefore going

towards the adoption of e-banking services in Islamabad.30% of the respondents strongly agrees

on this factor that computer literate keeps them using e-banking services.

General:

Accessibility

Foreign banks introduced the concept of e-banking in Pakistan in 1990’s and first e-

commerce platform in Pakistan was introduced in 2001 (Tech in Asia, 2013). But given the
 Adoption of E-
31
Banking

numbers of internet users identified, only 12% have access to financial services while only 9%

have a mobile banking account with annual growth recorded at 37% (Siim Teller, 2013). In

contrast, 90% of the banks in Pakistan were said to offer online branches in real-time for the last

quarter of Fiscal Year 2012 (State Bank of Pakistan, 2012).

Speed

The reason to highlight the speed of internet is to affirm the concept that net speed has

direct relation to user satisfaction (Hoffman and Novak 2006). Higher the speed, more quick the

access to the service is. Faster internet speed offers quick downloads as well. If a bank has portal

which offers downloads to access their information such as brochures, terms and services, new

offers, then the user may avert it as with download comes the threat of virus. Banks need to

imply user-friendly interface and over-simplified functionality to affirm the satisfaction of its

customers. The consumers should reach their content or services with just one click and on-the-

site demonstration as the download functionality may fend off the customers from using their

services. Implying this tactic would attract even more customers to opt for e-banking services.

Usage or Service Charges

This spending represents basic need of internet. If e-banking services and products were

to become need of people as internet is, they could explore these age groups as potential markets.

Moreover, this net-spend projects that market is there for e-banking. They have to keep the

charges and fees for their services relatively reasonable so people are willing to spend online.

Satisfaction and Loyalty

 Adoption of E-
32
Banking

For, the long term competitiveness and success of business largely depends on customer

satisfaction (Henning Thurau and Alexander, 1997) as customer satisfaction translates in to loyal

consumers for foreseeable future. Banks have to measure and relatively determine their level of

service quality to satisfy the needs of their customers if they intend to keep a loyal base of

consumers (Saha and Nesa, 2011).

Loyalty is significant in determining success of any corporation and longevity of loyal

base for it (Keating et al., 2003). Some suggest that loyalty is directly proportional to higher and

more stable incomes (Knox and Denison, 2000) whilefactor of loyalty can be considered as an

attitude, displayed over time, which is psychological in nature and has close affinity to the

reliance and commitment of the brand (Flavia´n et al., 2006).

Quality of Service

The lack of quality and complex nature of online service delivery can have detrimental

effect on the trust of online banking consumers. With no face-to-face interaction, the consumers

cannot observe the dealings of people to measure or determine their trust or confidence

(Reichheld and Schefter, 2000).Comparatively, in online domain, consumers and online service

providers often get temporary separationwhich in consequence makes transactions carried out

online (Grabner-Kraeuter, 2002).

Online or Electronic Service

Electronic service is significant in measuring the success and calculations of the risks

involved inonlinebusiness (Yang and Lily, 2001). Determination of the level of consumer
 Adoption of E-
33
Banking

satisfaction can also be attained (Yoo and Donthu, 2001) which in result can help with reviewing

the strategy to address any grey area found in this component.

Privacy

Privacy and its importance in using technology, consumers have two kinds of concerns.

First, unauthorised access to personal date because of security breaches and secondly, risk of

secondary use of their personal accounts or information such as reuse of it without their consent

for other purposes (Culnan and Armstrong, 1999). The concerns also suggest that fear of use or

share of their personal information by or with third party violate the consumers’ privacy

(Milberg, Smith, and Burke, 1996). This lack of assurance to customers of e-banking that their

privacy will not be violated can hinder the growth of e-banking customers to some extent.

Therefore, it must be made sure that customers know their privacy will not be violated in any

way so they can build on that confidence and that could result in increase of e-banking

consumption of those expecting consumers.

Trust

Another factor which plays an important role in building customer base is element of

trust and handling of privacy. If the customers are assured these factors will be preserved, the

consumption of services can enhance as our findings elaborate below. However, reading the

literature on element of trust and privacy while using e-banking service and products brought us

to following review.
 Adoption of E-
34
Banking

Trust becomes important in online banking environment compared to offline banking

(Ratngasingham, 1998) as trust directly means definite faith of the customers in the service

providers (Gefen, 2000). Trust and distrust are two denominators which gauge and control the

option of customers to consume online banking (Benamiti and Serva, 2007). In our survey,

findings are projected on how the consumers value trust in the services provided by their banks

in online banking and how it becomes a factor in encouraging customers to use online banking

with more confidence and with more frequency but on the contrary, lack of trust could drive the

customers away from using e-banking services.

Generally, people use e-banking services for swiftness of transaction without going in to

branches. Mobility to use online banking from anywhere via laptop or mobile phones also

contributes in to growing consumption of online banking. Recent introduction of 3G service in

Pakistan will see the numbers increase exponentially.

Business and elite class of Islamabad use it more frequently with online shopping.

Students from Islamabad, Rawalpindi, and Rawat are the common entity who uses it regardless

of their backgrounds. It was also found that people who are more tech-savvy showed concerns

over privacy and security. Most of the concerns revolved around account usage; they were

worried if their information was used or given out by banks to third-parties for advertising or

promotional reasons as it happens in most of cases when people start receiving calls or SMS by

third parties to use their services. They showed doubts if the banks were giving out their phone

or mobile numbers for that purpose. Banks need to assure them on that.

To summarise findings, the research identifies accessibility or availability and speed of

technology, know-how of technology usage, at least medium income level, youth-factor

 Adoption of E-
35
Banking

especially students, use of e-commerce sites or online shopping, and reasonable service charges

contribute in growing user adoption of e-banking services in Pakistan. While lack of trust, fears

for privacy, and techno-illiteracy come across as grey areas which discourage the consumers

from using e-banking services and they need to be addressed on managerial level so that more

and more people use e-banking services. As it has been established before, time-saving was the

common factor across urban, suburban, and rural spaces which encouraged the people to use

more of e-banking services and mobility with 24/7 accessibility also contributed in large

consumption of online banking services.

1. Practical and Managerial Implications

The results of this case study have provided a firm platform for re-examination of e-banking

services usage. The findings seem to point to encouraging direction of growing consumption of

e-banking services where customers valued or seemed to be concerned about trust more than

other well-defined factors which came out in results. However, the growth of e-banking services

consumption itself relied on factors like urbanisation, computer literacy, tendency toward time-

saving, and simplified or friendly web-portal for e-banking sites.

This research has actually shown that despite the people’s inclination to use banks for their

basic money functions such as deposits and, or, withdrawals, they are open to use e-banking

services with ease and comfort and if the black spots pointed out in the research are addressed

then we are to see even more increasing user consumption of e-banking services. This actually

reaffirms the research and views of past that human interaction are preferred by the users while

dealing with banks (Yang and Fang, 2004).

 Adoption of E-
36
Banking

It is essential for the management of the banks to understand that trust in online banking is a

building force on which banks provide best quality of service at the retail branch level and on

which the growing usage of e-banking services largely depend. The managers also need to

understand customers do not rely on the reputation or the size of bank to lend credence to e-

banking but it is the level of service they currently receive when they visit the branch as the

experience of the services they get at the bank is also integrated to their likeness for e-banking

services. As (Patricio et al, 2003) it is perceived that better service that a customer get at the bank

counters would indicate that they will get better service on online as well.

Bank managers need to pay more attention on how they can get the trust of the customers and

how they can build it for prolonged period of time. They would need to find the ways to provide

simple and user-friendly web-portal with a small tweaks on guidance, intro, or tutorial to use the

services offered can go a long way on creating friendly space online for customers and may go

on to build the trust knowing they are valued for even minute detail.

Bank managers would need to look in to the overuse of the messages for their new offers via

text message, or emails in most of the cases, as it has an element of irritation. They would need

to offer customer a choice on when and what offers they would need to know about and how

often they would like to get those messages. Managers would need to refrain from thinking that

stature or reputation of their banks would garner trust of the customer instead it is the satisfaction

that the customers will get from using services and freedom to do many things for their choices

would determine the long term trust.

Managers would need to change their promotional messages to info on security features of

the e-banking in initial interactions. They would need to emphasise on how the customers can be
 Adoption of E-
37
Banking

assured or guaranteed that their information will not be shared with anyone without their consent

as if a customer gets a third-party promotional e-mail then that would put a bad taste in their

mouth so a feature should be made available where the customers get to tick or pick whether

their information or e-mail should be shared with their third-party partners and should they get

an e-mail from them for exciting offers.

Attention to these tiny details would go on a long way for the customers to get quality,

valued, and trusted services which will definitely build their long-term confidence and trust for a

longer run.

Managers would need to target the youth as they are the ones who spend most of the time

online, as found out in this research, and they are the ones who are more willing to spend their

money online. The managers would need to come up with offers or incentives for students and

young professionals where they can avail those incentives and offers by showing or confirming

their student ID or date of joining for young professionals or it can be done with age group where

they can get their age confirmed and make the most of those offers.

Overall, the banking industry would need to work with technology sector on how they can

expand or lay the foundations for basic infrastructure in the suburbs which are nearby to big

cities as Rawat is in this case. The closer the suburbs are to big cities, the more likely it is to get

developed sooner with technological infrastructure in place and relative improvement in literacy.

Conclusion

It was plausible to know that people in Pakistan are not only aware of e-banking services

but they are also acquainted with the ideas of privacy, trust, and security concerns.
 Adoption of E-
38
Banking

Some bank systems were even worried that their password can be stolen or their

information can be used for the means which they normally would not approve of so they need to

be assured and guaranteed before they can trust or begin to use e-banking services. Willingness

is there. Majority of the customers were inclined to use e-banking services more when their fears

and concerned were addressed.

Banks need to make it priority that their e-banking web portals and servers are secure for

any transaction as much as their traditional banking is.

The management at banks need to manage their website perceived usability. It is not

necessary for the most effective website to be the most sophisticated one but it is definitely

imperative for them to be the most easy and user-friendly to use because greater and simpler

usability translates to better understanding of the web-portal and functions required to perform

any action such as transactions and also ensures security to website users thatwill help to satisfy

the needs of consumers and consequently, increase their loyalty and the likelihood to use their

services frequently and say nice words about the website to fellow customers.

Quality of service and satisfaction should be checked and determined along with the lines

of consumers’ expectations and the performance of banks on those level of expectations need to

be checked.

Basic understanding is to formulatea plan for the resources;keeping the magnitude of

quality-of-service gap. It means that the gaps which are larger in quality of the services must be

given due importance and the strategy to fill those gaps need to be devised, while the gaps which

are shorter need to be designated with low priority and lesser attention.
 Adoption of E-
39
Banking

The safety and security of the online banking servers or web-portal need to be flawlessly

strengthened; user-friendly portal and tutorials for even small details should be given. All banks

should make it an obligation to make their personnel and users aware about the risks involved

when using the services online.

Promotional programmes for public awareness should be initiated through media and

different public activities.

Special attention needs to be given to privacy, management at banks need to make it sure

that any info information or data that consumer updates on the banking servers are not shared to

any third party partners without consent and neither misused in any way.

Banks should take special measures to prevent hacking as one case of hacking will

completely destabilise and deteriorate the trust of the customers and may even deter the new

customers who are in waiting line to endorseonline services of the banks.

Co-operation between technology sector and banking sector would need to go hand in hand

to ensure their infrastructure reach the nearby suburbs of the cities and youth will have to be

targeted as they are more inclined to use e-banking and e-commerce sites. This actually goes out

of the scope as the suggestion points to development, modernisation, or urbanisation (semi-

urbanisation) of the backward spaces.

Research Limitation & Directions for Future Research

As prescribed in the abstract, the research has reservation of generalisation due to small

sampling of Islamabad, Rawalpindi, and Rawat which cannot be taken at as face value for all

urban, suburban, and rural areas of Pakistan. But as the sampling involves capital territory of
 Adoption of E-
40
Banking

Pakistan which has representation of people from all across the country and almost every walk of

life then this thought offers a little incentive that this research offers freedom to generalise the

accumulated factors to greater extent.

Secondly, few of the factors mentioned in the findings are beyond the scope such as

modernisation or urbanisation or proportional relation of internet usage in reference to usage of

e-banking services. One may look in to those options as a base for any further research.

To reiterate, the scope of this study is limited in a broader sense as it represents Pakistan

alone while internet is a mature, global technology and in result the findings may not represent

the whole internet generation. However, a huge research can be done in terms of continents with

variable of internet usage in a continent such as Asia, South America or Africa, within the theme

of developing and under-developed countries and the correlation to e-banking services with the

respective trends.

___________________

References