The Impact of Mobile Banking on Enhancing Satisfaction of Bank Clients in Barangay

Manggahan, Pasig City During the COVID-19 Pandemic

A Research Study

Presented to

Pamantasan ng Lungsod ng Pasig

In partial fulfillment

of the Requirements for

Accounting Research and Methods

By:

Busaing, Ma. Christina A.

Dela Costa, Lorraine Jane T.

Galam, Marlyn P.

Hernandez, Flowny M.

Lazatin, Rose Ann E.

Submitted to:

Prof. Amor B. Sande

 CHAPTER I

INTRODUCTION

This chapter presents the background information of the study, theoretical framework,

conceptual framework, and its statement of the problem.

Background of the Study

Technology is making a tremendous impact on banks in general, and the financial

services industry is no longer an exception. As a result of technological advancements,

the business environment in the financial sector is extremely dynamic and experiences

rapid changes, necessitating the banks’ use of the internet to serve their customers.

According to Ogare (2013) the banking industry of the twenty-first century is

working in complex and competitive situations revealed by changing circumstances and a

significant financial market. The enormous increase of the internet is changing the way

businesses interact with their customers, as most of the businesses are now conducted

using the internet. The introduction of e-commerce as means of payment has prompted

banks to depart from traditional banking services, offering a service strongly through the

medium of internet, which has become known as internet banking or e-banking.

Pikkarainen et al. (2004) define mobile banking as a "internet portal, through

which customers can use different kinds of banking services ranging from bill payment to

making investments." With the exception of cash withdrawals, internet banking provides

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customers with access to almost any type of banking transaction at the click of a mouse

(De Young, 2001).

In today's highly competitive and technological business world, customer

satisfaction can be viewed as the foundation of success, as it can lead to customer

retention and thus profitability for an organization (Jamal & Kamal, 2002; Egan, 2004).

As cited by Jamal et al., Oliver (2002) defines customer satisfaction as the fulfillment of

one's expectations. Furthermore, Jamal and Kamal (2002) define customer satisfaction as

a customer's feeling or attitude toward a product or service after using it.Egan (2004)

combines several authors' definitions to define customer satisfaction as a psychological

process of evaluating perceived performance outcomes based on predetermined

expectations.

According to Reichheld (2000), in order to establish long-term relationships,

banks must provide a high level of satisfaction to their customers. Choosing which banks

to do business with is no easy task. That is why it would be useful to know which banks

are most popular among consumers. It is not the entire picture, but it does provide some

insight into their ability to serve their customers well. They will not be able to hold so

many deposits if they are unable to consistently meet the depositors' expectations.

The COVID-19 has altered how people live, interact, and make purchases. For

people all over the world, the fear of COVID-19 is life-threatening especially in the

business sector. (Mamun and Ullah, 2020). Nearly 100,000 establishments have

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temporarily shut down due to the pandemic (Sraders and Lambert, 2020). In the banking

industry, traditional banking has declined during COVID-19, resulting in an increase in e-

banking platforms.

Even in these circumstances, banks are responsible for maintaining liquidity flows

and should continue to finance the economy, lend to individuals and businesses, and

maintain their customer base( Nilam Panchal, 2020). As a result, banks are attempting to

transform their future-defining strategies and rethink their entire flow of activities. The

current crisis provides an opportunity to rethink the banking business and the

development of the bank-customer relationship. These include the digitalization and

modernization of banks' financial activities and continue to meet the customers

satisfaction.

Theoretical Framework

As defined in the previous section of this chapter, mobile banking is a broad term

that encompasses a variety of services, features, and accommodation made available to

customers for their betterment.

Theories of Mchomba (2018) in her study entitled: “ The impact of mobile

banking on customer satisfaction” she proposed the two theories namely: technology

acceptance model, and disconfirmation theory. Technology acceptance theory is based on

a contention of factors affecting individual’s use of technology. According to this theory,

perceived usefulness and ease of use are important determinants of system adoption and

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usage. Many studies on electronic banking adoption extend or supplement the original

TAM by including additional constructs such as relative advantage and personal

innovativeness, perceived risk, perceived cost of use, compatibility with lifestyle, and

perceived security.

The theory assumes that potential customers have complete freedom to act and

choose. Indeed, consumers may face constraints in practice that prevent them from acting

freely, such as the rationalization of traditional banking channels, which is why many of

them have shifted to mobile banking over the last decade. Furthermore, Yousafzai et al.

(2010) stated that TAM is superior to the other models and emphasized the significance

of it in understanding online banking behavior.

According to disconfirmation theory, satisfaction is related to the magnitude and

direction of the disconfirmation experience that occurs as a result of comparing service

performance to expectations. A metaanalysis found that the disconfirmation paradigm is

the best predictor of customer satisfaction.

According to an updated definition of the disconfirmation theory, satisfaction is

the guest's fulfillment response. It is a conclusion that a product or service feature, or the

product or service itself, provides (or continues to provide) a pleasurable level of

consumption-related fulfillment, including levels of under- or over-fulfillment.

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 The model presents that there are studies claiming that the service quality of

commercial banks during a pandemic crisis do not meet the expectations of clients has a

negative impact on the level of their satisfaction. In their study, Karjaluoto, Mattila, and

Pento (2012) claims that how the service was delivered is more important than the

outcome of the service process, and dissatisfaction with the service often occurs simply

because guests' perceptions do not meet their expectations.

Dashed lines were drawn on the model between services of commercial banks

during pandemic and client's expectation as this study aims at determining whether there

is an impact between the two factors that affect the satisfaction of their client's. This also

includes the ascertainment whether the integration of client's expectations and

commercial banks' services during pandemic would also affect the loyalty or retention of

their customers.

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 Figure 1: Theoretical Framework of the Study

Conceptual Framework

The conceptual framework consists of three steps – the input, process, and output.

(Refer to rectangles in Figure 2.) Criteria for successful impact can be identified for each

of these steps. These three steps or phases are dependent on two principles: the impact of

mobile banking and enhancing customer’s satisfaction.

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 Input Process Output

– Selection of
respondents
– Respondents: – Impact of
100 bank – Administration mobile banking
clients of survey in enhancing
questionnaires customer
– Survey satisfaction
questionnaires – Retrieval of
survey
questionnaires

– Statistical
treatment of data

– Analysis and
Interpretation

Figure 2: Conceptual Framework of the Study

Input

Specifically, the inputs for the model identified for this research consists of bank

clients that include factors such as their gender, socio-economic status, developed

abilities, intelligence, and prior achievement. The input consists of 100 bank clients as

respondents in Barangay Manggahan Pasig City who use mobile banking and also used

survey questionnaires as the gathering instruments. The input indicators have an effect on

the process indicators.

Process

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 Process indicators clear up the traditionally been called the “black box” of

business. What makes these variables interesting is that they refer to conditions that are

flexible in nature and can be improved upon. The process includes selection of

respondents, administration of survey questionnaires, retrieval of survey questionnaires,

statistical treatment of data, and analysis and interpretation.

Output

The output indicators are then fed back into the system by means of input as well

as process indicators. The output was the Impact of mobile banking in enhancing

customers satisfaction during the Covid 19 pandemic.

Statement of the Problem

This study attempted to determine the level of satisfaction with mobile banking.

In further details, it sought to distinguish answers to the following questions:

1. What is the level of satisfaction with mobile banking of the bank clients in Barangay

Manggahan, Pasig City during the COVID-19 Pandemic as perceived by themselves with respect

to the following indicators?

1. 1. Mode of Payment Transaction Attributes

1.1.1 Accessibility

1.1.2 Time-Processing

1.1.3 Time-Saving

1.1.4 Health Safety

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 1.1.5 Cost Efficiency

1.2 Features of Mobile Banking

1.2.1 Account Alerts and Notifications

1.2.2 Investment

1.2.3 Bank Services

1.2.4 E-Loading

1.2.5 Time-to-date account activity

1.2.6 Customer Service Support

2. What is the extent to which the quality of mobile banking services has improved during

COVID-19 in terms of the following aspects?

2.1 Reliability

2.2 Responsiveness

2.3 Visibility

2.4 Security and Trust

2.5 Efficiency

3. What are the main sources of dissatisfaction of Bank Clients in Barangay Manggahan,

Pasig City during the COVID-19 Pandemic in terms of the following factors?

3.1 Confidentiality

3.2 Reliability

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 3.3 Availability

3.4 Functionality

Research Hypothesis

This study pursued the following null hypothesis:

1. COVID 19 Pandemic has no significant impact on the Mobile Banking Satisfaction of

Bank Clients in Barangay Manggahan, Pasig City.

Scope and Delimitation

This study aimed to determine the impact of mobile banking on Enhancing Satisfaction

of Bank Clients in Barangay Manggahan, Pasig City during the COVID-19 Pandemic.

This study used a purposive sampling technique and it involved a sample of 100 bank

clients from 4 different areas in Manggahan Pasig City. 25 bank clients from Napico

Manggahan, 25 bank clients from Karangalan Manggahan, 25 bank clients from Gate 5

Manggahan, and 25 bank clients from Magsaysay Manggahan.

This study considers every aspect of bank clients’ personal information that has an

impact on how their perspectives differ from each other parent’s education, gender, age, social

status, civil status.

Each of the respondents are given the same questionnaire to answer which is composed

of three (3) questions focusing on the efficiency of mobile banking and its impact on the level of

satisfaction of the bank client during COVID pandemic.

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Significance of the study

The findings of this study will be of value and useful as it will redound to the benefits of

the following sectors:

To the bank clients. The results of this study will bring them into understanding and

awareness of the different services and transactions provided by banking institutions.

To the non-bank clients. This study would introduce the need for mobile banking

services and would also bring light to appreciation on how efficient and reliable mobile banking

is during a pandemic.

To the Banking Industry. This study will help the banking institutions to identify which

services offered to their mobile banking application should be enhanced to further amplify the

satisfaction of their clients.

To the Financial Technology Practitioners. This study will help them to improve the

banking services features and to reduce errors such as the span of reflection of money transfers

or deposits, under maintenance of mobile banking applications, and payment processing bugs.

To the Present and Future Researchers. It can be the foundation or basis for future

study. They may continue this research and improve the given data to have better analysis.

Definition of Terms

To understand the terms used by the researchers in the study, the following terms are

hereby defined:

Availability. It refers to the state of availability of the mobile bank to reach out their

optimal operations to the bank clients wherein it can be accessed without restriction of date and

time.

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 Bank Services. The act of services that you can use in banking features which includes

money transferring funds, time to check activity, mobile deposit, checking of account balances,

and other banking activities.

Confidentiality. It refers to the state of keeping or being kept private data of the bank

clients and their financial transactions in mobile banking.

COVID 19. Coronavirus disease (COVID-19) is an infectious disease caused by the

SARS-CoV-2 virus.

Efficiency. It refers to the usefulness and effectiveness of mobile banking services. In

addition, it indicates saving time and less hassle to the bank clients when engaging in banking

transactions.

Enormous. It is marked by an extraordinarily great size, number, or degree.

Financial Technology Practitioners. A person that delivers financial services through

software, such as online banking, mobile payment apps or even cryptocurrency. They encompass

many different technologies, but the primary objectives are to change the way consumers and

businesses access their finances and compete with traditional financial services.

Functionality. It refers to the technicality function of the mobile banking system wherein

it is easily accessed without occurrence of errors or malfunction.

Mobile Banking. The act of making financial transactions on a mobile device using

internet connection.

Reliability. The act of banking services refers to performing consistently or stability in

mobile banking.

Responsiveness. The act of banking services refers to the timely and fast response to the

transaction of bank clients wherein it reflects immediately in their account.

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 Security and Trust. It refers to the state of being protected or safe of bank clients'

accounts from hackers. Furthemore, it helps to easily identify unauthorized transactions because

it includes a feature of two factor authentication which are One-Time-Password (OTP) text

message and email notification alert.registered in the account.

Tremendous. It refers to very great in amount or level, or extremely good.

Visibility. It refers to all the transaction activities used by the clients on a daily basis such

as the date and time they open their account. Moreover , it refers to the features available in the

mobile banking they are using.

References:

Khatoon et al. (2020). The Mediating Effect of Customer Satisfaction on the

Relationship Between Electronic Banking Service Quality and Customer Purchase

Intention: Evidence From the Qatar Banking Sector.

https://journals.sagepub.com/doi/10.1177/2158244020935887

Sranders & Lambert (2020). Nearly 100,000 establishments that temporarily

shut down due to the pandemic are now out of business.

https://fortune.com/2020/09/28/covid-buisnesses-shut-down-closed/

N.A (2020). What are the Benefits of Mobile Banking?

https://www.palisadesfcu.org/blog/mobile-banking-benefits

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 https://www.scirp.org/journal/paperinformation.aspx?paperid=111958

Dollar Bank. (z.d.). Dollar Bank – Personal Banking, Business Banking,

Corporate Banking in Pennsylvania, Virginia and Ohio. Retrieved March 22, 2022,

from https://dollar.bank/be-dollar-wise/august-2021/15-features-your-online-

banking-mobile-app-should

http://repository.out.ac.tz/2035/1/DISSERTATION%20-%20DOREEN%20ADAD

%20MCHOMBA%20-%20FINAL%20FEB.pdf

http://www.diva-portal.org/smash/get/diva2:833400/FULLTEXT01.pdf

Meharaj Banu, A., Shaik Mohamed, N., & Parayitam, S. (2019, 13 juni).

Online Banking and Customer Satisfaction: Evidence from India. Retrieved March 22,

2022, from https://journals.sagepub.com/doi/pdf/10.1177/2319510X19849730

Additional Information

The Editors of Encyclopedia Britannica. (z.d.). functionalism | social science.

Encyclopedia Britannica. Retrieved March 22, 2022, from

https://www.britannica.com/topic/functionalism-social-science

https://www.investopedia.com/terms/m/mobile-banking.asp

https://www.who.int/health-topics/coronavirus#tab=tab_1

https://dictionary.cambridge.org/us/dictionary/english/tremendous

https://www.merriam-webster.com/dictionary/enormous

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https://www.uschamber.com/co/run/business-financing/what-is-fintech#:~:text=Fintech

%2C%20or%20financial%20technology%2C%20is,payment%20apps%20or%20even

%20cryptocurrency.

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