Young Consumers

Behavioural intention to adopt mobile banking among the millennial generation

Evon Tan Jasmine Leby Lau
Article information:
To cite this document:
Evon Tan Jasmine Leby Lau , (2016),"Behavioural intention to adopt mobile banking among the millennial generation",
Young Consumers, Vol. 17 Iss 1 pp. -
Permanent link to this document:
http://dx.doi.org/10.1108/YC-07-2015-00537
Downloaded on: 12 March 2016, At: 19:02 (PT)
References: this document contains references to 0 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 10 times since 2016*
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Access to this document was granted through an Emerald subscription provided by emerald-srm:200910 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please
visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication
Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

*Related content and download information correct at time of download.

 Behavioural intention to adopt mobile banking among the millennial

generation

Introduction

Mobile banking or m-banking is the act of performing online financial transactions with the

help of mobile telecommunication devices such as mobile phones or tablets. Through mobile

banking, users are able to access financial and non-financial services such as account

management, balance enquiry, transference, bill payment, PIN change and checkbook request
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

(Dahlberg, Mallat, Ondrus & Zmijewska, 2008; Luarn & Lin, 2005; Shaikh & Karjaluoto,

2015). The emergence and widespread of third generation (3G) mobile communication

technologies has laid a solid foundation for the rapid growth of mobile commerce. Multiple

advantages in terms of ubiquity, interactivity, flexibility and accessibility proved the potential

of mobile banking as a popular medium for consumers to make their banking transaction and

a powerful marketing tool for bank retailers to interact with their consumers (Cheah, Teo,

Sim, Oon & Tan, 2011; Schierholz, Sinisalo, Salo, Karjaluoto & Leppaniemi, 2007). Despite

numerous advantages of mobile banking, its usage in Malaysia is still in the infancy stage

compared to other countries such as Korea, China and India (Amin, Baba & Muhammad,

2007; Daud, Kassim, Said & Noor, 2011). As of June 2015, there are 6.66 million mobile

banking subscribers with a penetration rate of 21.9% of the population and 15.2% of all

mobile subscribers (Bank Negara Malaysia, 2015).(Amin et al. (2007) stated that the low

adoption rate of mobile banking services may be due to lack of awareness among local

consumers. In the similar vein,(Daud et al. (2011) lamented that mobile banking facilities

remained unnoticed by the consumers despite being introduced in year 2006. Although the

evolution of mobile banking was detected to be slow, the estimation that mobile subscribers

will continue to grow in Malaysia from 7.2 billion in 2015 to 9.2 billion in 2020 (Ericsson

1
 AB, 2015) has presented vast revenue opportunities of this fast-growing segment. Mobile

banking is seen to become a popular banking channel among the consumers and the most

typical application in mobile commerce (Liu, Min & Ji, 2009).

Due to the potentiality of mobile commerce, it has drawn much attention from researchers in

investigating mobile banking acceptance among consumers. There were several local studies

conducted to investigate the behavioural intention of adopting mobile banking services(e.g.

Amin et al. (2007),(Amin, Hamid, Lada & Anis (2008),(Amin, Supinah, Aris & Baba

(2012),(Daud et al. (2011),(Cheah et al. (2011),(Krishanan, Khin & Low (2015); Masrek,
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Uzir & Khairuddin (2012),(Sulaiman, Jaafar & Mohezar (2007),(Tan, Chong, Loh & Lin

(2010),(Zainol (2011). Except Cheah et al. (2011), all studies mentioned utilised Technology

Acceptance Model (TAM) and its extension as well as Roger’s Diffusion of Innovation (DOI)

Model as the theoretical bases. In fact, studies on mobile banking rely heavily on TAM and

rarely use other approaches such as TPB and UTAUT (Ha, Canedoli, Baur & Bick, 2012;

Williams, Rana & Dwivedi, 2015). Moreover, the studies mentioned were mainly conducted

among the general consumer population of banking services. There is a scarcity of literature

that investigates the behavioural intention in adopting mobile banking specifically among the

Generation Y consumers. Majority of mobile subscribers in Malaysia are formed by the

Generation Y consumers (Toh, Lim & Cheng, 2011), which are those born between year 1981

and 2000 (UN Joint Staff Pension Fund, n.d.). The millennial generation is the early adopters

of new technology products and services (Kumar & Lim, 2008) and therefore is considered to

be more likely to use the mobile banking in the future than others (Wei, Marthandan, Chong,

Ooi & Arumugam, 2009). As active users of mobile technology devices, Generation Y

consumers are viewed as a lucrative growth market for companies offering high technology

products and services such as mobile phone, information technology and banking services.

EFMA and Oracle Financial Services (2010) stated that bank retailers must understand

2
 Generation Y’s needs and wants if they want to attract the millennial consumers to adopt the

banking services as they are different from other generation groups in terms of expectations

and perceptions.

The purpose of this study was to examine the intention to adopt mobile banking services

among the Generation Y consumers in Malaysia using the Unified Theory of Acceptance and

Use of Technology (UTAUT) model. As mobile commerce is an emerging technology, it is

deemed appropriate to utilise the UTAUT to examine mobile banking behavioural intention.

Specifically, this study aimed to test the effects of three independent variables (performance
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

expectancy, effort expectancy and social influence) proposed by the UTAUT and perceived

risk on behavioural intention. As this study aimed to understand the intention of potential

mobile users instead of actual usage, the facilitating conditions construct was removed from

the model. Instead, perceived risk was included based on the premise that mobile banking

services is perceived to be riskier than traditional banking services. Recent keynote speech by

the Deputy Governor of Bank Negara Malaysia (BNM) revealed that concern about the

security of electronic payments topped the list of four major barriers to the adoption of

electronic payments (Bank Negara Malaysia, 2014). Thus, it is believed that perceived risk

may improve the models' predictive power and subsequently provide insights for bank

retailers to developer effective strategies to attract more Generation Y consumers to adopt the

mobile banking services. In addition, this study also aimed to explore the mediation role of

performance expectancy on the relationship between effort expectancy and intention to adopt

mobile banking services. It is believed that effort expectancy will have both direct and

indirect effect on behavioural intention.

The contributions of this study are threefold. First, current literature making use of the

UTAUT remains relatively low compare to other models (Williams et al., 2015). This study

3
 attempts to enhance the theoretical foundation of mobile banking studies by applying the

UTAUT and seeks to test a model that is better able to predict users’ behavioural intention.

Next, earlier research on mobile banking mainly focused on motivators such as ease of use,

usefulness and convenience and seldom examines the effect of resistance factors such as risk

perception (Rakhi & Mala, 2014; Yang, Liu & Yu, 2015). Since perceived risk is not well

explored in the literature in the context of mobile banking, this research tries to fill this gap

by integrating this construct into the UTAUT. Finally, student population represents a

profitable segment in the long run but many banking service providers have yet to uncover
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

their full potential (Bond & Hsu, 2011). Moreover, current literature on the quality of banking

service provision tend to neglect the voice of this specific market segment (Ozretic-Dosen &

Zizak, 2015). This study attempts to provide further insight into the factors that lead

consumers, particularly the student population to express an intention to use m-banking

services. It is believed that different consumer characteristics can be associated with different

expectations.

The remainder of this paper is organised as follows. The research model and hypotheses of

this study are described in the next section. The third section presents the research

methodology while section four reports the analysis of the results. This is followed by

discussion and implications for theory and practice in section five and six, respectively. The

article ends with conclusions, limitations and directions for future studies.

RESEARCH MODEL AND HYPOTHESES

Unified Theory of Acceptance and Use of Technology (UTAUT)

Unified Theory of Acceptance and Use of Technology (UTAUT) is a model combining eight

established theories namely Theory of Reasoned Action (TRA), Technology Acceptance

4
 Model (TAM), Innovation Diffusion Theory (IDT), Theory of Planned Behavior (TPB),

Motivational Model (MM), Combination of TAM and TPB Model (C-TPB-TAM), Model of

PC Utilization (MPCU) and Social Cognition Theory (SCT) in evaluating the probability of

success of the new technology system (Venkatesh, Morris, Davis & Davis, 2003). This model

outperforms the eight individual theories and able to explain up to 70% of variance in

behavioural intention on using technology system (Venkatesh et al., 2003). Although the

UTAUT has not been as widely used as TAM, it has gradually drawn researchers’ attentions

and has been widely used in various technology acceptance research including mobile
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

learning (Marchewka, Liu & Kostiwa, 2007), internet banking (Yeoh & Chan, 2011; Yeow,

Yuen, & Teng, 2008) and even the online taxes filing (Carter, Shaupp, Hobbs & Campbell,

2011). There are three core attributes i.e. performance expectancy, effort expectancy and

social influence that determine user behavioural intention. Facilitating conditions and

behavioural intention are hypothesised to directly influence use behaviour. In addition, the

UTAUT also posits the role of four moderating variables namely gender, age, experience and

voluntariness of use. Figure 1 shows the UTAUT model in its original configuration. In this

section we define each of the determinants of behavioural intention and perceived risk factor.

FIGURE 1 HERE

Performance expectancy is defined as the extent an individual believes that his or her task

performance would be improved through the usage of a particular system (Venkatesh et al.,

2003). Performance expectancy shared similar characteristics with five constructs from other

models, specifically perceived usefulness (TAM), extrinsic motivation (MM), job-fit

(MPCU), relative advantage (IDT) and outcome expectations (SCT). Among them, definition

of perceived usefulness is the most similar to performance expectancy that is belief of one

person on the improvement of job performance by using a system (Davis, 1989). Consumers

5
 are willing to use the internet or mobile banking system if they believe the system facilitates

banking transactions (Eze, Ling, Manyeki & Lee, 2011). Moreover, task performance is

enhanced when an innovation system can offer more advantages that its precursor (Moore &

Benbasat, 1991). Mobile banking offers greater convenience, more user friendliness, reduces

waiting period and provides more efficient response than other banking channels (Cheah et

al., 2011). Studies using TAM revealed that perceived usefulness has positive impact on the

intention to use mobile banking services (Arvidsson, 2014; Cheah et al., 2011; Daud et al.,

2011; Mohammadi, 2015; Mortimer, Neale, Hasan & Dunphy, 2015; Tan et al., 2010). On the
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

other hand, there were several others who reported no significant relationship between the

two constructs (Amin et al., 2012; Phonthanukitithaworn, Sellitto & Fong, 2015). Based on

the above literature, the following hypothesis can be stated:

H1. Consumers with high performance expectancy will have higher intention to adopt

mobile banking.

Effort expectancy refers to the extent of effort that the individual needs to exert in using the

system (Venkatesh et al., 2003). Perceived ease of use shared similar definition with effort

expectancy, which is the degree of one person’s belief that using a particular technology

system would be free of effort (Davis, 1989; Moore & Benbasat, 1991). Effort expectancy

towards mobile banking is essential to be assessed due to greater degree of complexity in

using smaller devices to make the banking transactions (Riquelme & Rios, 2010). Higher

effort expectancy will obtain faster acceptance by the potential users because of lesser

learning effort is needed (Eze et al., 2011). Even though some studies found that perceived

ease of use has no effect on intention to adopt mobile banking (Amin, et al., 2012; Daud, et

al., 2011; Phonthanukitithaworn et al., 2015; Zarmpou, Saprikis, Markos, & Vlachopoulou,

6
 2012), majority concluded that the factor has positive effect on the behavioural intention

(Amin et al., 2007; Amin et al., 2008; Arvidsson, 2014; Cheah et al., 2011; Mortimer, Neale,

Hasan & Dunphy, 2015; Tan et al., 2010). Thus,

H2a. Consumers with high effort expectancy will have higher intention to adopt mobile

banking

Apart from its impact on behavioural intention, effort expectancy is believed to have positive

effect on performance expectancy (Venkatesth et al., 2003). In TAM, Davis (1989) proposed
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

that perceived ease of use is an antecedent of perceived usefulness. An individual may find

that the particular system is useful but may hesitate to use it if he or she realised that the

system is difficult to use (Davis, 1989). When users perceive mobile banking as easy to use

and do not require a lot of effort, they will have a high expectation toward acquiring the

expected performance (Zhou, Lu & Wang, 2010). Local studies on mobile banking rarely

examine this relationship except Amin et al. (2007) who reported that perceived ease of use

indeed predicted perceived usefulness. Studies using TAM showed that perceived ease of use

has significant indirect effect on usage intention through perceived usefulness (Chau & Hu,

2002; Mohammadi, 2015; Phonthanukitithaworn et al., 2015; Zarmpou, et al., 2012). In this

regard, we proposed the hypothesis that

H2b. Performance expectancy mediates the relationship between effort expectancy and

intention to adopt mobile banking.

Social influence is defined as the degree of the perception of an individual on how important

others think that he or she should use the system (Venketesh et al., 2003). This factor is

similar to subjective norm in two models namely TAM2, an extension of TAM by(Venkatesh

7
 & Davis (2000) and Theory of Planned Behaviour (TPB) by(Ajzen and Fishbein (1980).

Subjective norm describes an individual’s perception that most people who are important to

him think that he or she should or should not adopt the particular system (Davis, 1989).

However, the effect of normative influence is inconsistent in mobile banking adoption

studies. Amin et al. (2008), Phonthanukitithaworn et al., 2015 and Zainol (2011) found that

normative pressure is significant in influencing the behavioural intention in using the mobile

banking services while studies by Amin et al. (2007), Cheah et al. (2011) and Mortimer et al.

(2015) concluded otherwise. According to Riquelme & Rios (2010), suggestions from friends,
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

family and relatives are important in the decision making on using a new products or services.

If the adopters do not have any prior experience on using particular technology system, the

impact of subjective norm would be greater (Hartwick & Barki, 1994). In Malaysia,

Generation Y consumers are found to depend heavily on family and peers’ opinions when

they want to purchase the financial or banking services (Rugimbana, 2007). Moreover, in a

more collective culture like Malaysia, people have a tendency to work in groups and respect

each others’ ideas and opinions. Based on these arguments, it is reasonable to propose that

H3. Consumers who perceive high social influence will have higher intention to adopt

mobile banking

Perceived Risk

Other than the four factors from UTAUT model, perceived risk was also examined in this

study. Perceived risk is defined as the degree of uncertainty on the outcome of the use of

innovation (Gerrard & Cunningham, 2003) or the level of uncertainty on the security of the

use of innovation (Cruz, Neto, Murioz-Gallego & Laukkanen, 2010). Consumers are reluctant

to adopt the mobile banking services if there is uncertainty (Baek & King, 2011). The

8
 increasing level of uncertainty will definitely enhance the level of perceived risk towards the

mobile banking services.(Mitchell (1999) explained that risk is an expectation of loss and the

perceived risk will be higher when expectation of loss is greater. Prior studies show that

perceived risk has negative effect on the attitude and adoption of technology-enabled

services. Arvidsson (2014), Cruz et al. (2010) and Riquelme & Rios (2010) found that

perceived risk is a critical barrier that would discourage people from adopting mobile banking

services although Daud et al. (2011) provided a contradictory outcome. Accordingly, this

study hypothesised that:

Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

H4. Consumers who perceive higher risk will have lower intention to adopt mobile

banking

Figure 2 depicts the research model of users’ intention to adopt mobile banking services,

which includes all the hypotheses mentioned above.

FIGURE 2 HERE

METHOD

Data Collection and Sample

Kuala Lumpur was chosen as the sampling location as it has the highest mobile penetration of

91.4%, followed by Malacca (85.4%) and Selangor (76.1%) (Toh et al., 2011). The age range

within Generation Y consumers is quite broad and there may be some differences among

them. The population of interest in this study was a particular sub-group of Generation Y

consumers. According to(Wolburg & Pokrywczynski (2001), college or university students

are a sub-group of Generation Y consumers. Students were selected as the target respondents

9
 due to the following reasons. First, they are the generation that were brought up in the

technological era (Roach, 2009). Second, the likelihood of error being inflated by situational

factors inherent in different sample (e.g. education, age, income) could be reduced as students

have the homogeneous demographic background and similar behavioural characteristics

(Peterson, 2011).

Participants were students enrolled in a private university in Kuala Lumpur area.

Convenience sampling was used to recruit the target respondents, consistent with the
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

approach adopted in previous studies of technology adoption (Eze et al., 2011; Ozretic-Dosen

& Zizak, 2015; Tan, Chong & Lin, 2013; Zhou et al., 2010). Subjects were randomly

intercepted on the University campus and were asked to fill out the questionnaire. A total of

384 questionnaires were distributed and the final sample collected was 347 cases,

representing a response rate of 90.4%. Based on the recommendations of(Hair, Black, Babin

& Anderson (2010), the desired ratio for factor analysis should be 5 observations per item

while for regression analysis is 15 observations for each independent variable. These ratios

yielded 110 (5 x 22 items) and 60 for factor analysis and regression analysis respectively.

Table 1 lists the demographic information of the sample.

TABLE 1 HERE

Survey Instrument

Questionnaire items were adapted from previous studies that utilised the UTAUT model in

examining technology acceptance. Items were modified slightly in order to suit the objective

of this study. Words such as system, OBS (online banking service) and internet banking were

changed to “mobile banking” in the questionnaire. All scales were measured on a 5-point

Likert scale: 5 (strongly agree), 4 (agree), 3 (neither agree nor disagree), 2 (disagree), 1

10
 (strongly disagree).

Items measuring performance expectancy were adapted from Venketesh et al. (2003), Yeow et

al. (2008) and Yeoh & Chan (2011). Seven items of performance expectancy assessed

productivity improvement as well as time and cost saving in conducting banking transaction

via mobile banking system. The level of effort expectancy was measured using four items

adapted from Venkatesh et al. (2003). These items measured whether mobile banking is easy
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

and free of effort to understand and learn. Items of social influence assess the effect of

important others’ opinion whether they should adopt mobile banking services. These items

were adapted from Venketesh et al. (2003), Yeow et al. (2008) and Yeoh & Chan (2011).

Riquelme and Rios’s (2010) measure of perceived risk were used to assess the level of risk

perception related to mobile banking services among the consumers. Finally, three items were

used to gauge the intention to adopt mobile banking and they were adapted from Venketesh et

al. (2003).

Prior to running regression tests, an exploratory factor analysis was conducted to establish the

construct validity of the instrument. A principal component analysis with varimax rotation

was carried out to determine the significant factor loadings in this study. The Kaiser-Meyer-

Olkin (KMO) of 0.893 verified the adequacy of sample and Bartlett’s test of sphericity was

significant [χ2 (231) = 5389.67, p < .0001], confirming that there are significant correlations

in the data set that are appropriate for factor analysis. Four factors with eigenvalues more than

1.0 were extracted and all items had loadings over 0.50 except item 16. All factors had good

internal consistency with Cronbach’s alpha ranging from 0.88 to 0.93.

11
 TABLE 2 HERE

RESULTS

Pearson correlation coefficients were used to examine the relationship between predictor

variables and behavioural intention. As shown in Table 3, all predictor variables were

positively related to the behavioural intention except perceived risk. Among the four predictor

variables, effort expectancy has the strongest relationship with intention to adopt mobile
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

banking (r = 0.694, p < 0.01) followed by performance expectancy (r = 0.677, p < 0.01),

social influence (r = 0.537, p < 0.01) and perceived risk (r = - 0.385, p < 0.01). Of particular

note was the high correlation between performance expectancy and effort expectancy (r =

0.739, p < 0.01).

TABLE 3 HERE

Assumptions for multicolinearity, normality, linearity and homoscedasticity were tested and

results were found to meet the requirement for multivariate analysis. Two sets of analyses

were performed: (1) multiple regression analyses testing the direct effect of performance

expectancy, effort expectancy, social influence and perceived risk on behavioural intention

(H1, H2a, H3 and H4) (2) a mediated regression analysis testing for the intervening effect of

performance expectancy on the relationship between effort expectancy and behavioural

intention (H2b). Table 4 shows the results of the first analysis where the UTAUT model was

test without and with perceived risk variable. Model 1 indicated that performance expectancy

had the highest predictive power for intention to adopt mobile banking (β = 0.34, p < 0.001),

followed by effort expectancy (β = 0.33, p < 0.001) and social influence (β = 0.30, p < 0.001).

The prediction model was statistically significant, F (3, 343) = 184.16, p < 0.01 and

12
 accounted for 61.7% of the variance in intention to adopt mobile banking. When perceived

risk was added to the UTAUT model, the variance explained increased to 68.3%, F (4, 342) =

184.15, p < 0.001. Performance expectancy remained the strongest predictor (β = 0.39, p <

0.001), followed by effort expectancy (β = 0.27, p < 0.001) and perceived risk (β = - 0.27, p <

0.001) as well as social influence (β = 0.23, p < 0.001). These results supported H1, H2a, H3

and H4, respectively. Thus, stronger intentions to adopt mobile banking were associated with

higher levels of performance expectancy and effort expectancy, a greater sense of social

influence for the behavior as well as lower levels of perceived risk. A model with explained
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

variance of 60% was deemed satisfactory for social science studies (Hair et al, 2010).

TABLE 4 HERE

The mediation effect of performance expectancy on the relationship between effort

expectancy and intention to adopt mobile banking was assessed based on the procedures

recommended by(Baron & Kenny (1986). The first step was fulfilled in that effort expectancy

significantly and positively impacts on performance expectancy (β = 0.74, p < 0.001).

Approximately 54.6% variance in performance expectancy can be explained by effort

expectancy, F (1, 345) = 141.65, p < 0.001. The second step was significant as effort

expectancy was positively related to intention to adopt mobile banking (β = 0.69, p < 0.001).

with R2 = 0.48, F (1, 345) = 320.43, p < 0.001. The final step was also significant in that both

performance expectancy and effort expectancy positively affected intention, explaining 54%

of the variance in the dependent variable F (2, 344) = 202.78, p < 0.001. The absolute effect

of effort expectancy on intention to adopt mobile banking was less in regression three (β =

0.43, p < 0.001) than in regression two. Thus, a partial mediation effect was supported

because effort expectancy influences intention to adopt mobile banking even when the effect

13
 of performance expectancy was controlled for. This provides partial support for H2b and the

analysis is summarised in Table 5.

TABLE 5 HERE
DISCUSSION

The regression result suggested that perceived risk increased the predictive power of the

UTAUT model in explaining intention to adopt mobile banking services. While performance

expectancy, effort expectancy and social influence explained 61.7% of the variance in

behavioural intention, adding perceived risk to these variables contributed to an additional of

Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

6.6% in the variance explained. Performance expectancy was validated to be the strongest

predictor of behavioural intention, which is consistent with findings by Venketesh et al.

(2003), Daud et al. (2011) and(Zhou, Lu & Wang (2010). This indicated that the millennial

generation has great concern about the performance of mobile banking and the benefits

derived from it. Banks can convey more information and educate consumers about the

benefits of using mobile banking services through marketing campaigns such as advertising,

sales promotion and public relation. In addition, banks should establish more functions

related to mobile banking in order to improve the performance of banking transactions. This

can be carried out based on users’ suggestions to better meet their performance expectations

toward these functions.

Effort expectancy was found to be another significant determinant of intention to adopt

mobile banking. Generation Y consumers are more likely to use the mobile banking services

if the mobile banking service is easy to be learned and operated. Therefore, banking

transaction procedure should be kept short and concise so that it is more user-friendly. Banks

should provide clear guidance for consumers about the procedure of using mobile banking

system. Mediation test also verified the indirect effect of effort expectancy on behavioural

14
 intention through performance expectancy. This conclusion mirrored the findings by(Amin et

al. (2007),; Park, Yang & Lehto (2007) and; Zhou et al. (2010). System with good design and

performance but difficult to use will eventually hinder the adoption of mobile banking.

Common challenges faced by mobile banking services users include small screens and

difficult input. Mobile service providers could facilitate the usage of mobile banking system

by offering well-designed and easy-to-use interfaces, including clear layout, powerful

navigation and prompt response.

Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Perceived risk has significant negative impact on intention to adopt mobile banking and this

result supported the findings of Cheah et al. (2011) and Riquelme and Rios (2010). Banks

should provide higher security system when offering mobile banking services to customers.

For instance, the application of mobile digital signature and highly secure passwords while

performing transaction could ensure the confidentiality and authenticity of the mobile

banking system. In addition, an emergency security service should be provided to cease any

of the mobile banking transaction in case the users lose their mobile phones. Moreover,

security systems must be continuously enhanced to ensure the trustworthiness of online

transactions as this will increase consumers’ trust and confidence level.

In a collectivist society like Malaysia, important others played a great influence in decision

making. Results revealed that social influence had direct effect on the behavioural intention

towards mobile banking adoption and was consistent with the prior studies e.g. Amin et al.

(2007), Riquleme and Rios, (2010) and Yeoh and Chan (2011). For the millennial generation,

coworkers, classmates, friends and mass media were the main motivators. Banks could

cooperate with higher learning institutions or organisations to promote mobile banking

services. In addition, advertising may be implemented through multiple channel including

15
 radio, television and internet to introduce and promote mobile banking services as Generation

Y consumers are media and technology savvy. In the similar vein, advertising creativity such

as collecting testimonials from early adopters of the technology and obtaining celebrity

endorsements could help to promote user adoption.

THEORETICAL AND PRACTICAL IMPLICATIONS

The results of hypotheses testing indicated that the model provides a good understanding of

factors that influence the intention to adopt mobile banking. Theoretically, this study has
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

served to broaden the understanding of the factors influencing mobile banking adoption

among prospective Generation Y consumers in developing country. The results extended

studies on mobile banking adoption, which mainly use TAM as the theoretical base and reveal

the significant effect of perceived risk on behavioural intention. While performance

expectancy (PE), effort expectancy (EE) and social influence (SI) explained 61.7% of the

variance in intention to adopt mobile banking, the inclusion of perceived risk yielded an

increase of 6.6 percent to the variance explained. This indicates that when examining the

factors affect mobile banking users’ adoption, we should not only focus on the core

determinants of behavioural intention in the UTAUT model but also pay attention to the

perceived risk of using the technology.

From the managerial point of view, this study provides practical guidance for designing

mobile banking services that could attract the student population. The findings imply that

service providers need to focus on performance expectancy of the technology to facilitate the

uptake of mobile banking as it is the strongest predictor of users’ behavioural intention. In

addition, it is found that effort expectancy has a significant effect on performance expectancy.

Mobile banking service providers could improve users’ technology perceptions by

16
 communicating the tangible advantages of mobile banking through marketing campaigns and

at the same time introduce an easy-to-use mobile technology features, thus reducing effort

expectancy and enhancing performance expectancy. The current study also revealed that

perceived risk is an important factor affecting end-user intention to use mobile banking.

Therefore, service providers need to eliminate these concerns by creating a sound banking

platform with good security practices put in place to reduce the risks for users. Various

strategies need to be introduced for potential users to enhance their trust that using mobile

banking is secure and protected.

Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

CONCLUSIONS

Mobile banking offers multiple advantages such as ubiquitous access, real-time services and

flexibility to its users. Based on these advantages, it is expected that mobile banking will

acquire a wider user adoption but in reality it has fallen short of expectations. Thus, it is

necessary to identify the factors affecting mobile banking user beahviour, specifically among

the Generation Y consumers as they are the early adopters of new technology products and

services. Regression analysis indicated that performance expectancy is the main factor

affecting users’ adoption of mobile banking, followed by effort expectancy, perceived risk

and social influence. In addition, performance expectancy was found to have a partial

mediation effect on the relationship between effort expectancy and users’ intention to adopt

mobile banking.

There are several limitations that need to be acknowledged. This study examined respondents’

intention to adopt mobile banking instead of their actual behavior. Understanding behavioural

intention is essential but it may not accurately represent actual behavior. Generalisation of

findings from this study should be done with caution as data was collected using convenience

17
 sample of college or university students in KL area. Results may not be generalisable to the

whole population of Generation Y college or university students due to selection bias and a

lack of information concerning the sampling frame. In addition, the same group of users from

other states may possess different perceptions and reactions to mobile banking services. The

model proposed accounted for 68.3% of the variance in intention to adopt mobile banking,

indicating the absence of other predictor and moderating variables. Future research may

consider including these variables to gain in-depth understanding on behavioural intention

towards mobile banking in Malaysia.

Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

REFERENCES

Ajzen, I., & Fishbein, M. (1980). Understanding Attitudes and Predicting Social Behavior.
New Jersey: Prentice Hall.

Amin, H., Baba, R., & Muhammad, M. Z. (2007). An analysis of mobile banking acceptance
by Malaysian customers. Sunway Academic Journal 4, 1-12.

Amin, H., Hamid, M. R. A., Lada, S., & Anis, Z. (2008). The adoption of mobile banking in
Malaysia: The case of Bank Islam Malaysia Berhad (BIMB). International Journal of
Business and Society, 9(2), 69-86.

Amin, H., Supinah, R., Aris, M. M., & Baba, R. (2012). Receptiveness of mobile banking by
Malaysian local customers in Sabah: An empirical investigation. Journal of Internet
Banking and Commerce, 17(1), 2-12.

Arvidsson, N. (2014). Consumer attitudes on mobile payment services - Results from a proof
of concept test. International Journal of Bank Marketing, 32(2), 150-170.

Baek, T. H., & King, K. W. (2011). Exploring the consequences of brand credibility in
services. Journal of Services Marketing, 25(4), 260-272.

Bank Negara Malaysia (2014). Deputy Governors’ Keynote Address at the Payment System
Forum 2013: Migration to Electronic Payments. Retrieved from
http://www.bnm.gov.my/index.php?ch=en_speech&pg=en_speech_all&ac=492.

Bank Negara Malaysia (2015). Malaysia’s Payment Statistics – Internet Banking and Mobile
Banking Subscribers. Retrieved from http://www.bnm.gov.my/?ch=ps&pg=ps_stats.

Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social
psychological research: Conceptual, strategic and statistical considerations. Journal of
Personality and Social Psychology, 51(6), 1173-1182.

18
 Bond, C., & Hsu, M. T.-C. (2011). International students' perceptions of service quality in the
UK banking sector: An exploratory study. Journal of International Students, 1(2), 50-
58.

Carter, L., Shaupp, L. C., Hobbs, J., & Campbell, R. (2011). The role of security and trust in
the adoption of online tax filing. Transforming Government: People, Process and
Policy, 5(4), 303-318.

Chau, P. Y. K., & Hu, P. J.-H. (2002). Investigating healthcare professionals’ decisions to
accept telemedicine technology: an empirical test of competing theories. Information &
Management, 39(4), 297-311.

Cheah, C. M., Teo, A. C., Sim, J. J., Oon, K. H., & Tan, B. I. (2011). Factors affecting
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Malaysian mobile banking adoption: An empirical analysis. . International Journal of

Network and Mobile Technologies, 2(3), 149-160.

Cruz, P., Neto, L. B. F., Murioz-Gallego, P., & Laukkanen, T. (2010). Mobile banking rollout
in emerging markets: evidence from Brazil. International Journal of Bank Marketing,
28(5), 342-371.

Dahlberg, T., Mallat, N., Ondrus, J., & Zmijewska, A. (2008). Past, present and future of
mobile payments research: A literature review. Electronic Commerce Research and
Applications, 7(2), 165-181.

Daud, N. M., Kassim, N. E. M., Said, W. S. R. W. M., & Noor, M. M. M. (2011).

Determining critical success factors of mobile banking adoption in Malaysia. Australian
Journal of Basic and Applied Sciences, 5(9), 252-265.

Davis, F. D. (1989). Perceived usefulness, perceived ease of use and user acceptance of
information technology. MIS Quarterly, 13(3), 319-339.

EFMA and Oracle Financial Services. (2010). Are Banks Ready for Next Generation
Customers? A Survey Report on Gen-Y Banking. Retrieved from
http://www.oracle.com/us/.../gen-y-survey-report-165297-395837.pdf.

Ericsson AB (2015). Ericsson Mobility Report: On the Pulse of the Networked Society.
Retrieved from http://www.ericsson.com/res/docs/2015/ericsson-mobility-report-june-
2015.pdf.

Eze, U. C., Ling, H. Y., Manyeki, J. K., & Lee, C. H. (2011). Factors affecting internet
banking adoption among young adults: Evidence from Malaysia. Paper presented at the
International Conference on Social Science and Humanity.

Gerrard, P., & Cunningham, J. B. (2003). The diffusion of Internet banking among Singapore
consumers. International Journal of Bank Marketing, 21(1), 16-28.

Ha, K.-H., Canedoli, A., Baur, A., W., & Bick, M. (2012). Mobile banking-Insights on its
increasing relevance and most common drivers of adoption. Electronic Markets, 22(4),

19
 217-227.

Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis: A
global perspective (7th ed.). New Jersey: Pearson Education Inc.

Hartwick, J., & Barki, H. (1994). Explaining the role of user participation in information
system use. Management Science, 40, 440-465.

Krishanan, D., Khin, A. A., & Low, K. L. T. (2015). Attitude towards using mobile banking in
Malaysia: A conceptual framework. British Journal of Economics, Management and
Trade, 7(4), 306-315.

Kumar, A., & Lim, H. (2008). Age differences in mobile service perceptions: comparison of
Generation Y and baby boomers. Journal of Services Marketing, 22(7), 568-577.
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Liu, Z., Min, Q., & Ji, S. (2009). An empirical study on mobile banking adoption: The role of
trust. Paper presented at the Second International Symposium on Electronic Commerce
and Security (ISECS).

Luarn, P., & Lin, H. H. (2005). Toward an understanding of the behavioural intention to use
mobile banking. Computers in Human Behavior, 21(6), 873-891.

Marchewka, J. T., Liu, C., & Kostiwa, K. (2007). An application of the UTAUT model for
understanding student perceptions using course management software. Communications
of the IIMA, 7(2), 93-104.

Masrek, M. N., Uzir, N. a. A., & Khairuddin, I. I. (2012). Trust in mobile banking adoption in
Malaysia: A conceptual framework. Journal of Mobile Technologies, Knowledge &
Society, 1-12.

Mitchell, V. W. (1999). Consumer perceived risk: conceptualisations and models. European

Journal of Marketing, 33(1/2), 163-195.

Mohammadi, H. (2015). A study of mobile banking usage in Iran. International Journal of

Bank Marketing, 33(6), 733-759.

Moore, G. C., & Benbasat, I. (1991). Development of an instrument to measure the

perceptions of adopting an information technology innovation. Information Systems
Research, 2(3), 192-222.

Mortimer, G., Neale, L., Hasan, S. F. E., & Dunphy, B. (2015). Investigating the factors
influencing the adoption of m-banking: A cross cultural study. International Journal of
Bank Marketing, 33(4), 545-570.

Ozretic-Dosen, D., & Zizak, I. (2015). Measuring the quality of banking services targeting
student population. EuroMed Journal of Business, 10(1), 98-117.

Park, J., Yang, S., & Lehto, X. (2007). Adoption of mobile technologies for Chinese
consumers. Journal of Electronic Commerce Research, 8(3), 196-206.

20
 Peterson, R. A. (2011). On the use of college students in social science research: Insight from
a second order meta-analysis. Journal of Consumer Research, 28(13), 450-462.

Phonthanukitithaworn, C., Sellitto, C., & Fong, M. (2015). User intentions to adopt mobile
payment services: A study of early adopters in Thailand. Journal of Internet Banking &
Commerce, 20(1), 1-29.

Rakhi, T., & Mala, S. (2014). Adoption readiness, personal innovativeness, perceived risk and
usage intention across customer groups for mobile payment services in India. Internet
Research, 24(3), 369-392.

Riquelme, H. E., & Rios, R. E. (2010). The moderating effect of gender in the adoption of
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

mobile banking. International Journal of Bank Marketing, 28(5), 328-341.

Roach, G. (2009). Consumer perceptions of mobile phone marketing: a direct marketing

innovation. Direct Marketing: An International Journal, 3(2), 124-138.

Rugimbana, R. (2007). Youth based segmentation in the Malaysian retail banking sector.
International Journal of Bank Marketing, 25(1), 6-21.

Schierholz, R., Sinisalo, J., Salo, J., Karjaluoto, H., & Leppaniemi, M. (2007). Mobile
customer relationship management: Underlying issues and challenges. Business Process
Management Journal, 13(6), 771-787.

Shaikh, A. A., & Karjaluoto, H. (2015). Mobile banking adoption: A literature review.
Telematics and Informatics, 32(1), 129-142.

Sulaiman, A., Jaafar, N. I., & Mohezar, S. (2007). An overview of mobile banking adoption
among the urban community. International Journal of Mobile Communications, 5(2),
157-168.

Tan, K., Chong, S., Loh, P., & Lin, B. (2010). An evaluation of e-banking and m-banking
adoption factors and preference in Malaysia: A case study. International Journal of
Mobile Communications 8(5), 507-527.

Tan, K. S., Chong, S.-C., & Lin, B. (2013). Intention to use internet marketing: A comparative
study between Malaysians and South Koreans. Kybernetes, 42(6), 888-905.

Toh, E. B. H., Lim, E. W. L., & Cheng, R. (2011). Generation Y and choice of mobile service
provider: A study on their purchasing decisions in choosing a mobile service. Paper
presented at the 2nd International Conference on Business and Economics Research.

United Nations Joint Staff Pension Fund (n.d.). Traditionalists, Baby Boomers, Generation X,
Generation Y (and Generation Z) Working Together. What matters and how they learn?
How different are they? Fact and fiction. Retrieved from
http://www.un.org/staffdevelopment/pdf/Designing%20Recruitment,%20Selection%20
&%20Talent%20Management%20Model%20tailored%20to%20meet%20UNJSPF's%2

21
 0Business%20Development%20Needs.pdf.

Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance
model: Four longitudinal field studies. Management Science, 46(2), 186-204.

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of
information technology: Toward a unified view. MIS Quarterly, 27(3), 425-478.

Wei, T. T., Marthandan, G., Chong, A. Y.-L., Ooi, K.-B., & Arumugam, S. (2009). What
drives Malaysian m-commerce adoption? An empirical analysis. Industrial
Management and Data Systems, 109(3), 370-388.

Williams, M. D., Rana, N. P., & Dwivedi, Y. K. (2015). The unified theory of acceptance and
use of technology (UTAUT): A literature review. Journal of Enterprise Information
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Management, 28(3), 443-488.

Wolburg, J., & Pokrywczynski, J. (2001). A psychographic analysis of generation Y college

students. Journal of Advertising Research, 41(5), 33-49.

Yang, Y., Liu, H., & Yu, B. (2015). Understanding perceived risks in mobile payment
acceptance. Industrial Management and Data Systems, 115(2), 253-269.

Yeoh, S. F., & Chan, B. Y. F. (2011). Internet banking adoption in Kuala Lumpur: An
application of UTAUT model. International Journal of Business and Management,
6(4), 161-167.

Yeow, P. H. P., Yuen, Y. Y., & Teng, D. Y. K. (2008). User acceptance of online banking
services in Australia. Communications of the IIMA, 8, 191-197.

Zainol, N. F. (2011). Factors influencing mobile banking adoption. Unpublished Master

Dissertation. Universiti Utara Malaysia.

Zarmpou, T., Saprikis, V., Markos, A., & Vlachopoulou, M. (2012). Modeling users'
acceptance of mobile services. Electronic Commerce Research, 12(2), 225-248.

Zhou, T., Lu, Y., & Wang, B. (2010). Integrating TTF and UTAUT to explain mobile banking
user adoption. Computers in Human Behavior, 26(4), 760-767.

22
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Figure 1 UTAUT Model

Performance Expectancy
H1
H2b
Effort Expectancy H2a

H3 Intention to Adopt
Social Influence Mobile Banking
H4
Perceived Risk

Figure 2 Research Model

 Table 1 Demographic profile of the sample
Option Frequency Percentage (%)
Gender Male 150 43.2
Female 197 56.8
Age (years old) 18 25 7.2
19 45 13.0
20 44 12.7
21 52 15.0
22 49 14.1
23 83 23.9
24 27 7.8
25 22 6.3
Race Malay 22 6.3
Chinese 282 81.3
Indian 42 12.1
Others 1 0.3
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Education Level SPM 46 13.3

STPM/Certificate/Diploma 61 17.6
Bachelor Degree 209 60.2
Master/PhD 4 1.2
Others 27 7.8
 Table 2 Factor analysis results principal component analysis with
varimax rotation.

Component
1 (PE) 2 (SI) 3 (PR) 4 (EE)
No. Items
α = .93 α = .85 α = .88 α = .91

1. I would find the mobile banking service useful in .699

conducting banking transaction.
2. Using mobile banking service enables me to .733
accomplish banking transaction more quickly.
3. By using the mobile banking service, I can keep a .778
record of my finances.
4. By using mobile banking service, I need not visit .799
traditional banks regularly.
5. By using the mobile banking service, I can transfer .840
money anytime and anywhere.
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

6. By using mobile banking service, I can save time .853

paying essential bills at the post office.
7. Mobile banking service is convenient and easy to .806
access.
8. My interaction with the mobile banking service would .786
be clear and understandable.
9. It would be easy for me to become skillful at using .520 .659
the mobile banking service.
10. I would find the mobile banking service is easy to .520 .678
use.
11. Learning to operate the mobile banking service is .684
easy for me.
12. People who influence my behavior think that I should .639
use the mobile banking service.
13. People who are important to me think that I should .635
use the mobile banking service.
14. I will use mobile banking service if my classmates .766
use it.
15. I will use mobile banking service if friends use .790
mobile banking service.
16. I will use mobile banking service if my study
environment supports it.
17. Using mobile banking service indicates me to have a .712
higher status than those who do not.
18. I will use mobile banking service because most .758
Malaysians like to use mobile banking service.
19. I think that the use of mobile phone for banking .881
transactions is risky.
20. I have serious doubt that the banking transactions .827
performed on a mobile phone will work satisfactorily.
21. Conducting banking transactions on mobile phones is .849
risky because one can easily lose or misplace the
mobile phone.
22. It is risky to transmit and store information related to .833
banking transactions on a mobile phone.
Eigenvalue 8.518 3.467 2.201 1.019
Percentage of variance 38.718 15.758 10.004 4.634
Note: Loadings less than .50 are not shown. PE = Performance Expectancy; EE = Effort Expectancy; SI =
Social Influence; PR = Perceived Risk.
 Table 3 Descriptive statistics and correlations
M SD 1 2 3 4 5
1. Performance expectancy 3.24 0.88 - 0.739** 0.324** - 0.032 0.677**
2. Effort expectancy 3.07 0.80 - 0.390** - 0.151** 0.694**
3. Social influence 2.96 0.62 - - 0.266** 0.537**
4. Perceived risk 3.25 0.78 - - 0.385**
5. Behavioural intention 3.19 0.86 -
Note: ** p < 0.01 (two-tailed), n =347
Downloaded by Newcastle University At 19:02 12 March 2016 (PT)

Table 4 Regression Analysis of Independent Variables on Intention to Adopt

Mobile Banking
Model 1 Model 2
Performance Expectancy 0.34*** .39***
Effort Expectancy 0.33*** .27***
Social Influence 0.30*** .23***
Perceived Risk - -.27***
R2 0.617 0.683
F 184.16*** 184.15***
Note: Values for independent variables are standard regression coefficient.
*** p < 0.001

Table 5 Regression Analysis to Test Mediation Model of Effort Expectancy,

Performance Expectancy and Intention to Adopt Mobile Banking
β t R2 F df
DV Performance expectancy 0.56*** 414.65 1, 345
Effort expectancy 0.74*** 20.36***
DV Intention 0.48*** 320.43 1, 345
Effort expectancy 0.69*** 17.90***
DV Intention 0.54*** 202.78 2, 344
Effort expectancy 0.43*** 7.87***
Performance expectancy 0.36*** 6.68***
Note: DV = Dependent variable; ***p < 0.001.