IMPACT OF CUSTOMERS’

PERCEPTION ON E-BANKING
ADOPTION:

A CASE STUDY OF BARCLAYS

BANK

CHAPTER ONE
1
 INTRODUCTION

1.1 AN OVERVIEW

This research work is undertaking the investigation of the impact of customer

perception on banks' adoption of electronic services using Barclays bank as an
example. It is set to explore the factors influencing customers' perception of
such technological innovation as the electronic means of transaction. It is taken
that the success or otherwise of an innovation (a new product or service) is much
more decided by the way customers see it. The study goes further to assess the
progressive deployment of electronic banking so far in the light of the bearing
which customers' perception has on it.

Here in this chapter the statement of the problem under investigation is

presented. Aims and objectives, and the research questions are firmly
established as the guiding light to the subsequent sections and chapters that
follow. The importance, scope and limitation of the study are presented. This
chapter ended with a preview of the parameters within the research topic.

1.2 STATEMENT OF PROBLEM

The encroachment of contemporary ICT tools into the commerce arena has gone
ahead to differentiate the ‘Market Place’ from the ‘Market Space’. It has
redefined the traditional distribution channels challenging the constraints of form
of delivery, time, and place. This has led us into the digital era and E-banking is a
conception of this era. Like every other facet of modern commerce, E-banking
has benefited immensely from the speed and low cost of delivery associated with
the use of these information and communication technology tools.

E-banking has been defined in various studies in several ways partially because
electronic banking refers to different means through which a customer can
access most retail banking services (Daniel, 1999; Mols, 1998; Sathye, 1999,
cited in Olga 2004). Electronic banking is the delivery of traditional banking
services through the medium of information and communication technological
tools majorly the internet, the PC and the Phone. The multifarious ICT tools has
helped cast E-banking in several modes; from the pacesetting automatic teller
machine(ATM), to Mobile banking, Telephone banking, Online banking, SMS
2
banking among other currently developing ones. These media provide
customers several avenues to access their accounts, to transact business or
obtain information on the products and services at their own conveniently
defined time and place. The importance of a bank’s market place; a branch
office, has been greatly reduced with banking services evolving into a self-
serviced supermarket. This attests to Bill Gates (2008) assertion “banking is
essential, banks are not”.

Electronic banking can be viewed under three main categories; informational,

communicative, and transactional internet banking services (Comptroller’s
handbook, 1999). Informational internet banking is the most basic level; whereon
marketing information can be assessed on the bankers’ server, while
communicative internet banking allows some interaction between the banks’
systems and the customer e.g. account inquiry and loan applications,
transactional internet banking allows the customer to execute transactions
through his account e.g. paying bills, transferring funds (comptroller’s handbook,
1999).

The critical question here is not just of relevance of E-banking but primarily of
adoption. Adoption is defined as “the acceptance and continued use of a
product, service or idea” (Sathye 1999, cited in Alam et al 2009). However the
adoption and relevance of E-banking can be examined from the perspectives of
the two categories of users; the bankers and the customers. While bankers use it
to deliver their services the customers use it to access such services. Adopting E-
banking for the banker has brought along efficiency of service. Kerem (2003)
agrees that the internet has helped banks cut costs on transactions, improve
their market image, and respond better to market demands.

It can be argued from the customers’ perspective that electronic banking

technologies allow customers easier access to financial services, lower bill-
paying, and the saved time in their financial management (Anguelov et al, 2004,
cited in Byoung-Min et al 2005). However, the query here is the readiness with
which customers accept the changes E-banking has brought into banking
services. While the intrinsic aim of E-banking is to bring flexibility into these
services the customer exercises caution on the part of complexity, trust,
security, beliefs among others considerations.

3
Kolodinsky et al (2004) observed there are mixed results in the e-banking market
place with regard to consumer adoption and success of e-banking products and
services. They argued further that while some e-banking services have created
new products that do not alter established usage patterns. For example
electronic bill payment and presentment (EBPP) which allow deductions without
writing and mailing of cheques. Some others like PC banking demands from the
customer a new behavioural patterns. Summarily, the problem this research is
studying bears on the influence of customers’ attitudes on banks’ adoption
pattern of electronic means of service delivery. The study intends to achieve this
within a pre-existing framework.

1.3 AIMS AND OBJECTIVES

Definitely a research is void without a pre-determined aims and objectives

because these are the underpinning factors necessitating an enquiry. The aim of
this research work is to investigate the impact of customer perception (attitude,
orientation) on Electronic banking deployment process for banks with a focused
case study on Barclays Bank. "Innovations have commercial value only if they
meet the needs of customers better than current products" (Alagheband, 2006).
Electronic banking is an innovation challenging traditional channel of
transactions in the banking service industry. The past two decades have seen an
aggressive adoption of this new technology by banks in the race to remain
competitive but the query here is effect of customer acceptance of this adoption
process so far. Consequently, this study takes on the following aims and
objectives:

1. To review existing literature on customers' behaviour towards

electronic banking adoption process.

2. To identify factors influencing customers' adoption of electronic

banking services.

3. To appraise customers' acceptance bearing on electronic banking

deployment

4. To suggest a better perspective to banks on understanding

customers' acceptance and their deploy
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 5. ent of electronic banking services.

1.4 RESEARCH QUESTIONS

As already established this study is undertaking the enquiry into the impacts of
customer perception on electronic banking adoption, using Barclays as a case
study. Therefore the following research questions are deemed relevant in
addressing the research problem raised:

1. To what extent have customer embrace the use of electronic banking

services instead of traditional service channel

2. To assess the determinants of customers' acceptance of electronic

banking services

3. To what extent does customers' acceptance influences banks' adoption of

electronic services

1.5 IMPORTANCE OF THE RESEARCH

The enormous amount of investment banks have made into technological

spending in the past three decades calls for substantive justification. Olga (2004)
claimed that European banks envisaging continual decrease in marginal cost of
electronic transactions have pumped billions of euros into building direct
channels like the Web, upgrading branches and call centers, and trying to
integrate all these channels. Furst et al. (2000) also considered the possibility
that financial institutions were making relatively substantial investments in
Internet banking products and marketing based on the belief that a higher than
normal payoff in the future will more than offset near-term costs. The prospects
here mentioned beg the question, what of if electronic transactions marginal cost
fails to fall to a level that jeopardizes return on investments in these new
technology? Of course internet usage growth has still go a lot of room to grow
and the last decade had witnessed an exponential growth in electronic banking
(kerem, 2004). Perhaps, the probing questions are, how far have customers
embraces this new technology, how far will they continue to embrace it and how
far will the extent of their embrace influence the banks’ investment in this
arena?

5
These aforementioned questions invariably lay much emphasis on customers’
impression of electronic channel of services. Their perceptions and subsequent
behaviour weigh a lot on the success of electronic banking. What and what
influence their perceptions? This is the root question to this study. What are the
bearings of these perceptions on electronic banking? This is the ultimate
question in this study. Arguably, substantial pre-existing literature has tried
answering the question of what influence customers’ perception? But a
justification to the course of this research work is investigating the bearing of
such perception on the banks’ adoption process of electronic services. Only a few
researches have tried this. More importantly is the fact that the study of the two
questions in respect of UK banking industry is far under-exploited. Daniel (1999,
74) in her study of the Provision of electronic banking in the UK and the Republic
of Ireland remarked "there is little systematic research relating to the factors
which influence banks to develop such services." This study is set to fill in this
role.

Hence, the research will enable management of retail banks (big or small) in UK
to re-examine their investment pattern, their adoption process and their e-
banking campaign progress in the light of tangible assessment of customers'
acceptance. Customers' bias and behaviour towards electronic banking delivery
channel(s) will be better understood and quantified.

1.6 SCOPE AND LIMITATIONS OF THE RESEARCH

This study focuses on the role customer perception, as a singular parameter,

played on E-banking adoption by banks employing Barclays as a case study. It
will be acknowledged that there are other factors that accounts for E-banking
adoption outside of customers perspective perhaps to a lesser degree. The
choice of Barclays a trans-generational bank as case study may just present a
fairly accurate objectivity. As smaller banks are known to face and respond to
this challenge somewhat differently because they have less deeper pockets to
make more tangible investments in new technological deployments. In similar
fashion like all related course of study this research has its fair share of time and
cost limitation which primarily has restricted the enquiry to the selection of a
single bank as a case study. Theoretically, it will be more robust to have so many
banks incorporated into the study but oftentimes reality begs such objectivity.
6
Hence generalizations based on the findings of this study may not be taken
holistically in a cross-sectional analysis of the banking industry under the
discourse of the undertaken research topic. On a final note, caution should be
taken in regard of the method of empirical analysis used in the data presentation
as the model of analysis employed is not outrightly immune to limitations
inherent in all models, and this study have borrowed from such pre-existing
models in our data analysis. However, investigation and conclusions can be
considered valid to interpret the research query of this study in regards of big
banks and building societies in UK in particular Barclays bank.

1.7 BACKGROUND INFORMATION

1.7.1 TRADITIONAL BANKING SERVICES AND THE EMERGENCE OF E-

BANKING

It will be acknowledged that leverage is the sole business of banking which is

done by borrowing funds from households and non-financial businesses and
lending such funds to other households and non-financial businesses. Banks over
the years have conveniently carried out this task by serving as custodian to
keeping our money safe. The usually traditional banking services involve a face-
to-face interaction in a “brick and mortar” branch. These services involve some
basic banking activities like opening of deposit account, depositing, withdrawing
and physical transferring funds from one account to another, and a few advance
transactions like standing order, overdraft etc. All these activities are performed
on one-to-one interaction between the customer and his banker at a designated
place and usually at a predefined time.

In servicing growing customer-base and wider geographical areas; the quest for
expansion and staying ahead of the competition the banker keeps opening,
equipping and staffing more and more branches of his brick-and-mortar market
place. This comes at increasing cost and challenge to make sure that every unit
of open branch breaks even within the demography they served. Nevertheless,
over the decades the bankers found a profitable means of carrying on business
within these challenges before the advent of e-commerce.

7
The emergence of electronic technology in banking domain has redefined a lot of
banking services mostly retailing banking services while also adding new ones.
The traditional barriers of pre-designated time and place have been greatly
compromised while the form of service is completely changed. All traditional
retail banking services can be accomplished without stepping into a banking hall.
These can be done on the internet or by phone, or on some communication
technological gadgets. Electronic banking can also handle wholesale banking
services for corporate clients like account and cash management, loan
application and advances, commercial wire transfer, business-to business
payments and the administration of employees’ benefits.

The present dynamism in E-banking service delivery has its genesis in the
introduction of Automated Teller Machines (ATMs) in the late 1960s. ATM evolved
from simple cash dispensers to multi-tasking machines (Bernardo, 2007); these
computerized machines give banks’ customers access to various transaction
through their bank accounts without the help of a bank cashier or the use of a
teller. They are located in major public places not necessarily a bank premise,
connected to the bank’s central computer network. These machines are
accessible to customers by the use of ATM cards or Smart cards with individual
Personal Identification Number (PIN). Coopey (2004) considers ATM as not
embodying a single technology but a consolidation of a series of technologies
and systems, developing independently (cited in Bernardo, 2007).

Electronic Fund Transfers (EFT) is the most revolutionizing contribution of

electronic technology to banking services so far. Electronic Fund Transfer is the
singular backbone for the emergence of a new generation of e-banking products
and services e.g. point-of-sales transfer. It has also re-modelled the forms and
patterns of the delivery of traditional retail banking services. The eventually
creation of electronic fund transfer systems (EFTs) in the 1980s was born out of
the automation of internal processes in later 1950s and 1960s coupled with
advance products and services innovations like credit cards (Richardson, 1970;
Bátiz-Lazo and Wood, 2002 cited in Bernardo, 2007 ). Bernardo (2007) reckons
that the creation and introduction of automated teller machines (ATMs) was core
to the implementation and expansion of EFTs.

Indeed, the emergence of Internet banking has prompted many banks to rethink
their IT strategies in order to stay competitive (Tan and Teo, 2000). The lure of

8
technological innovations in the delivery of banking service has compelled a lot
of spending into the expansion of Information Technology networks of these
banks. Large banks in United State spend approximately 20% of non-interest
expense on information technology (Frei et al 1998).

In summing up the displacement of traditional banking services by electronic

banking means in the concluding decade of 20th century, Azouzi (2009) submit
that “traditional, paper-based transactions were surrogated by electronic
network transactions …automated teller machines (ATM) substitute cashier
tellers, the Internet surrogates mail, electronic cash and smart cards replace
traditional bank operations, the bank branch is displaced by call centers”

The fascination of the edges E-banking proffers has also brought about the
creating of “cyber-banks”. These are Banks that exist solely on the internet
without a physical location/presence. They leveraged their attractiveness to
customers on offering higher interest rate and lower transaction cost. The points
of contact with this kind of banks are the ATMs; where withdrawals and deposits
can be made, and their call centers; where complaints can be registered or
information gotten. These “Virtual banks” exist as new, independent banks on
their own, or a spin-off subsidiary of an existing brick-and-mortar bank, or a
recast of a pre-existing chartered bank (Furst et al, 2000). Nevertheless, the low
survival rate of these internet-only banks suggests a considerable preference still
exist for tradition medium of service delivery. This has led to the prevailing trend
of banks adoption of ‘Brick and Click’ or ‘Click and Mortar’ approach, where the
customers is serviced through both internet and physical operations
simultaneously (Mia et al, 2007)

1.7.2 E-BANKING IN U.K (ADVENT & EVOLUTION)

The explosion in the proliferation of E-banking usage emerged with the turn of
the present century. Though its skeletal introduction in 1980s and wide spread
adoption as service medium by banks in later 1990s, the banks could not claim
significant patronage until recent years partly because of initial customers
hesitation to welcome this new mode of service due to concern over breach of
trust, privacy and security.

9
Daniel (1999) stated that the Nottingham Building Society and the Bank of
Scotland were the first to launch Electronic banking in UK in the early 1980s
which was called the ``Homelink'' service ( citing Tait and Davis, 1989). She
agreed that most were discontinued as they failed to gain widespread
acceptance (citing Vinson, 1978). However, the rapid growth of the internet and
internet-based services in later years created a renewed interest in re-launching
these electronic services (Booz Allen and Hamilton, 1996; Daniel, 1998 cited in
Daniel, 1999).

Presently UK boost of an estimated 27,000 ATM units being managed by Link

owned by the 34 major high street banks and building societies; these ATMs
dispense some £96 million a year (Artimage, 2000). Drimer et al. (2009)
ascertained that internet banking is growing almost everywhere including the
UK, which had a 174% increase in the number of users between 2001 and 2007.
Statistics of activities on internet banking suggests UK presently has 21.5 million
customers now bank online, with half of them using Internet banking to make
payments (UK payments administration, 2010) .The study estimated that some
12.3 million adults use a telephone banking service, 40% of whom initiate
payments over the phone.

After 12 years of aggressive internet banking marketing in UK it usage has

gained significant popularity, with half of her active 41.4 million users making
use of electronic banking (UK payments administration, 2010). However, the
study found the number of telephone-banking users suffered a decline to 14.5
million for its 2005 peak of 16.1 million due to the convenience of internet
banking. The study concluded that checking account balances and statements
were the primary task people carry out online though phone banking remains a
popular means of account enquiry.

1.7.3 THE CHALLENGE OF CUSTOMER ACCEPTANCE

The benefits on electronic banking to the customers are easily painted in the
colours of convenience. The paramount privilege being the removal of the
constraint of time, form and place with accessibility to 24 hours a day and 7 days
a week “open” bank (Chan, 2001; Johnson et al., 1995; Jeon and Rice, 1997;
Baldock, 1997 cited in Alam et al 2009). Alam et al (2009) also stated that this

10
new platform of e-banking affords the customer the advantage of wider array of
service providers to choose from while making information on pricing and returns
far easier to gather (citing Birch and Young, 1997).

Yang et al. (2007) summarized the major challenges facing today’s e-banking
services as one customers’ concern over security of online transactions (citing
Feinman et al., 1999), secondly, the quality of service delivery in terms of
delivery speed and delivery reliability (citing Furst et al., 2000) which has led to
the collapse of many e-businesses, and lastly customer unfamiliarity with these
internet delivery tools prominent among senior citizens (citing Johnson, 1999)

Byoung-Min et al (2005) acknowledged that "although consumers have had an

interest in advanced electronic banking services and tended to have various
financial sources or tools for money transactions, they have not quickly changed
their main propensity to use banking services or goods that they are already
familiar with". They claim that a lot of customers still attach preference to
traditional mode of service delivery even years after the introduction of the ATM
and other e-banking services. As suggested by Byoung-Min et al (2005)
investigating e-banking adoption based on its primary advantage of time and
cost saving might be flawed. They proposed attitude or perception factors might
be better base for study, claiming a customer cost/benefit analysis on the side of
time taken to learn these new tools before use will be a greater deciding factor in
accepting a new change.

Different researches have viewed the case for customer acceptance of internet
banking adoption from different perspectives however; it is still a contest of
perceived benefits against anticipated risks associated. Alam et al (2009)
contested that the factors to consider in the rate of internet banking adoption
include the awareness of the services and its benefits, the ease of use, the safety
and security of transacting over the Internet, the cost of using Internet banking,
the reluctance to change from current traditional banking, and the access to
computer or Internet.

On another hand, Jacoby and Kaplan,(1972) and Bellman et al., 1999 (cited in
Azouzi, 2009) proposed a six-component multidimensional perceived risks of
financial, performance, social, physical, privacy, and time-loss considerations on
the part of the customers in the adoption of e-banking. These involve the risk of

11
transactional error, equipment malfunctioning, social disapproval, life threat,
security compromise and time taken respectively.

There also exist various theories on customers’ acceptance of internet banking

“including theories of consumer behaviour in mass media choice and use,
gratification theories, innovation diffusion, technology acceptance, online
consumer behaviour, online service adoption, service switching costs and the
adoption of internet banking” (Lichtenstein and Williamson, 2006). Existing
studies in this field have also used models namely; the Theory of Reasoned
Action (TRA); the Theory of Planned Behaviour (TPB); the Technology Acceptance
Model (TAM) and Diffusion of Innovations. This study intends to employ Rogers
(1962) diffusion of innovations model which postulated five product or service
characteristics influencing customers' acceptance of a new product or service.
This model includes relative advantage, compatibility, simplicity/complexity,
observability, and trialability.

McMahon (1996) ( cited in Daniel, 1999) advised that the survival in the online
banking age entails retail banks earning customer loyalty through product
features and service excellence rather than the present wait for loyalty to stem
from customer inertia. Patterns et al (1997) ( cited in Daniel, 1999) argued
further that consumer markets are heterogeneous and complex, and electronic
distribution channel is one in the plurality of possible channels while the
customer will employ any of these available co-existing options to undertake his
transaction based on the type of goods or services sought.

1.8 SUMMARY

The groundwork and the framework of this study have been here outlined in this
chapter. An overview of the research environment was given. The aims and
objectives the study is set to achieve were itemized, and space was taken to
succinctly define the research questions under exploration. Hereafter, the
importance, scope and limitations of the study were presented. A background
preview of the key parameters under investigation was done. The subsequent
chapter will follow-up with a detail review of existing literature on the subject of
the study.

12
 Chapter 2
LITERATURE REVIEW
2.1 Introduction
Acknowledging the recent unprecedented growth rate in electronic banking in
developed countries Hannan Mia et al. (2007) concluded in their study that E-
13
banking has provided a new opportunity window for existing banks and financial
institutions permitting "business process re-engineering, serving borderless
market, to achieve zero latency leading to improvements in customer service
levels and better risk management because of real-time settlement"

Electronic banking is an innovation; the latest innovation in banking technology,

and Alagheband (2006) contested that "Innovations have commercial value only
if they meet the needs of customers better than current products". He further
suggested that innovative customers (i.e. early adopters) are the most valuable
sources in understanding the acceptance of such innovations as they tender to
weigh problems and prospects of these innovations well ahead of typical buyers.
He itemized five adopter categories based on their innovativeness: innovators,
early adopters, early majority, late majority and laggards; proposing that the
innovators and early adopters are the biggest influence on the rest of the
masses on adoption of new innovation. Therefore, their consumption pattern
should be closely watched.

Consumer, product, organization and channel of distribution are the four main
categories under which most researchers have organized their studies on the
factors influencing internet adoption (Black et al., 2002 cited in Lichtenstein and
Williamson, 2006). The Attitude of customers, the characteristics of the product
to be adopted, the orientation of the organization adopting and flexibility of the
channel of distribution of the adopted product…

In studying the pattern of internet banking adoption in Europe, Deutsche Bank

Researchers (Deutsche Bank Research, 2006) found a number of existing
misconceptions in understanding customers attitude towards electronic banking.
They asserted that adoption decreases from north to south and rich to poor;
submitting that GDP per capita and latitude explain statistically around 80% of
this variation in Europe. Their other findings are that Europe bank customers are
strongly increasing their use of online banking services but not necessarily at the
expense of branch visits, there as well exist a negative correlation between
security concerns and online-banking adoption, customer security fears are not
founded in bad experiences but public perception and Europeans do not really
discriminate between online banking and e-commerce. They also ascertained
that though internet usage declines with age online banking is remarkably

14
stable, and that education (i.e. literacy level) drives online-banking adoption
while financial incentives can convince some to go online.

It is agreeable that the race for the adoption of electronic banking in optimally
satisfying customers’ demands has created stiffer competition Sulaiman et al.,
(2005) adduced this stiff competition among financial institutions to the
deployment of information technology, the ever changing lifestyle and
preferences of consumers, and the liberalization of the financial sector. Even in
cases where low customer acceptance is forecasted, such expected low
patronage has been found not to debar the deployment of electronic services to
the welcoming few,(Daniel, 1999) as banks expect the rest of their customer
base to catch up later.

Summarily, it will be acknowledged that in E-banking literature the terms

internet banking, online banking, electronic banking and web banking are used
interchangeably all in reference to electronic transactions. However, Alagheband
(2006, 13) contested that "electronic banking is a bigger platform than just
banking via the internet" involving variety of media like internet banking (online
banking), telephone banking, TV-based banking, mobile phone banking and PC
banking which are accessible to customers through electronic devices such as
personal computer (PC), Personal digital assistant (PDA), automated teller
machine (ATM), point of sale (POS), kiosk, or Touch Tone telephone. Hannan Mia
et al., (2007, 37) agreed that the United Nations Conference on Trade and
Development (UNCTAD) definition is all inconclusive, "Internet banking refers to
the deployment over the Internet of retail and wholesale banking services. It
involves individual and corporate clients, and includes bank transfers, payments
and settlements, documentary collections and credits, corporate and household
lending, card business and some others (UNCTAD, 2002)".

2.2 E-banking Adoption: A case for the Bankers

On a broad perspective, Daniel (1999) analysed the deployment of electronic
banking by retail banks in the UK and the Republic of Ireland under two
dimensions; namely organizational dimension and the market dimension. She
further divided these two reasons into more details factors. She proposed culture
of innovation, market share or strength and restrictions and limitations as the

15
organizational factors affecting a bank employment of e-banking. While
prediction of customer acceptance and vision of the future are the market forces
determining e-banking by banks.

In defending banks’ adoption of internet technology Furst et al. (2000) highlight

that collection, storage, transfer and processing of information assets are the
center of banking activities, and the internet affords a credible and efficient tool
for handling these information processes. While Shih and Fang (2004, cited in
Sulaiman et al. 2005) adduce the prevalence of electronic banking to the
reduction costs associated with having personnel serve customers physically,
shortened process time, increased speed, improvement in transactions flexibility
and a better provision of service overall.

It could be argued that the banks already have a way of profiting before the
coming of electronic banking however some market factors demanded for their
embracing the means of electronic technologies in service delivery. According to
Comptroller's handbook on internet banking (1999) some of these market forces
include competition, cost efficiencies, geographical reach, branding and
customer demographics.

2.2.1 Competition

Various studies have showed that competition ranked ahead of cost reduction
and revenue enhancement as the pivot driving force behind banks adoption
of electronic banking (Comptroller's handbook, 1999). Daniel (1999)
acknowledged that increasing competition is one of the two main drivers
forcing a continual shift from current distribution channels to electronic
distribution. Furst et al., (2000) submitting that "globalization and increased
competition are trends that have shaped the banking industry for decades"
held that banks competitors in internet banking are not only their traditional
rivals within the banking industry, but also banks from new, distant locations.
Wu (2007) added here that banks are facing an international scale
competition because of technology such as the internet. In addition, Furst et
al., (2000) and Daniel (1999) anticipated increased competition from non-
bank players-financial and non-financial - entering the market.

2.2.2 Cost efficiencies

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Though actual cost in executing a transaction electronically varies depending
on the chosen delivery channel in general, presently, electronic banking
services have far lower transactional cost than traditional brick-and-mortar
branches, with a further expectation of continually decline in the electronic in
future (Comptroller's handbook, 1999). Shih and Fang (2004, cited in
Sulaiman et al., 2005) summarized the cost essence of this prevalent
adoption of electronic banking as a reduction in overhead cost associated
with personnel physically serving customers and better overall service in
terms of shorten, speedy and flexible transaction process. Stamoulis (2000,
cited in Hannan Mia et al., 2007) argued that the internet is a strategic tool
which banks leverage on to offer and delivery complex products at the same
quality they can provide them at their physical branches but at a highly
reduced cost to potential customers without boundaries.

2.2.3 Geographical Reach

A singular clear edge Internet banking services has over ‘brick-and-mortar’

banking services is the elimination of geographical limitations. It helps
expand the banks’ geographical reach thereby increasing their customers’
contact and base. Furst et la., (2000) also held that the internet helps
different sizes of financial firms to contact customers previously out of reach
to them. Tan and Teo (2000) contended that banks are influenced to invest in
the use of the internet because of the challenge to expand and maintain
banking market share. They suggested a loss of customer base for banks that
fail to respond to the emergence of e-banking.

2.2.4 Branding

The importance of brand preference in a customer's choice of a product

cannot be overemphasized and in the race for showcasing their various
products on the increasingly congesting market space each bank seeks to
making their products stand out from the others. In this competition each
bank intends to "build customer loyalty, cross-sell, and enhance repeat
business" by capitalizing on brand identification in their provision of a wide
array of financial services (Comptroller's handbook, 1999)

2.2.5 Demographics

17
 Size, age, sex, race, location, occupation, income, education, and all other
demographic characteristics keep changing and each influences a customer’s
sense of taste and want, his conception and criteria of a product's importance
or such a product's substitute, ability to buy among other preferences
(Loudon and DellaBitta, 1993 cited in Wu, 2007). In capturing the importance
and dynamism of these demographic changes and demands, marketers
segment their markets accordingly (Wu, 2007) in this vein the banks seek to
understand the tastes of its customer base and employ the right mix of
delivery channels to deliver products and services profitably to their various
market segments (Comptroller's handbook, 1999).

Wu (2007, 62) ascertained that "age, education level, income and occupation
are the most influential demographic variables affecting Internet usage" as an
average electronic banking customer tends to be a well-educated, young and
a high income earner. Donnelly, 1970; Uhl et al., 1970; Labay and Kinnear,
1981; Zeithaml and Gilly,1987; Kennickell and Kwast 1997; Daniel,
1999;Trocchia and Janda, 2000; Karjaluoto et al., 2002 and Lee et al., 2002
(all cited in Kolodinsky et al., 2004) also all agreed.

It should also be acknowledged that there exist disparities between electronic

banking adoption of large and small banks. Economies of scale and scope make
it is easier for large banks to make the needed investment in technology and
network expansion, the offering of wider bouquet of online services and the
start-up hurdles to overcome in offering Internet banking also favour them in the
adoption of e-banking (Furst et la., 2000). In their conclusion Hannan Mia et al.
(2007) remarked that though there exist a low inception cost bearing high
growth rate, the E-banking sector is highly prohibitive for new entrants without a
definite innovative idea and strategy. They maintained that consumers' brand
preference, existing network, physical existence, security and safety, supplier
bargaining power, substitute product of non-banking sectors are the uphill tasks
the new entrant must contend. Cristina et al. (2002) agreed that start-up costs
are high as it requires an extensive advertising expenditure along with the
deployment of expensive technology to establish a trusted brand.

McMahon (1996, cited in Daniel, 1999) concluded that the survival of financial
service providers in the coming decade depends on the complementary and

18
integrated way in which the means of electronic delivery (namely telephone, PC
and the web) are employed alongside existing distribution channels.

2.3 Factors influencing the demand for E-banking

While some see e-banking adoption as a revolution in banking services others
hold it as a parallel alternative to service delivery. Alam et al. (2009, 14) argued
that “The critical question is whether customers will accept the electronic form of
receiving information and performing transactions”. Evidently, the customer
needs an incentive or a reason to switch his prevailing taste or affinity for a
product. Fittkau & Maab (2005 cited in Deutsche Bank Research, 2006) showed
that the following expectations are topmost when customers consider their
choice of online banking; warranted security, cheaper fees than offline,
possibility to ask questions, high quality of financial services, detailed
information on terms and conditions, cheap prices of financial services, the
availability of personal advice and contact person.

Though banks can boost of cost, labour and time efficiency in the adoption of
electronic banking delivery modes Mols et al (1999, cited in Alam et al., 2009)
contested that the diffusion of electronic banking is better determined by
customer’s acceptance than by the bankers’ offering. They pressed further that
the desire for personal interaction with banking staff, technology phobia,
widespread network of existing branches and also low computer literacy among
customers are principal factors influencing customers' non-acceptance of
internet banking. While O'Connell (1996, cited in Alam et al. 2009) claimed that
security concerns, lack of knowledge about the availability of such a service,
non-user-friendliness of internet banking sites and lack of access to computers or
the internet explains the slow growth rate of e-banking acceptance. These
shortcomings are on parts of both the customer and the bank. Lack of knowledge
about such services, non-user-friendliness of internet banking sites, and security
concerns are some of the hurdles electronic banking institutions should address
in helping customers adoption process. While it will take targeted incentives to
lure customers off their attachment to some traditional banking means like the
desire for personal service contact and learn the use of internet banking tools.
Furst et al. (2000) argued that the absence of a compelling value-added
proposition is a significant reason for the modest use of internet banking.

19
In studying US consumers adoption of electronic banking, Kolodinsky et al.
(2004) included household income, expected increase in income, household net
worth, age, marital status, gender, college education and ethnicity in their base
theory, as some other economic and demographic factors they hypothesized to
influence customers' acceptance. Chang (2004 cited in Sulaiman et al., 2005)
also agreed that gender, age, marital status and the degree of exposure to e-
banking as well as the characteristics of the bank are factors influencing the
adoption of E-banking.

Awareness of service and its benefits, security, quality of the internet

connection, trust, and demographic characteristics such as age, gender and
educational level were Al-Somali et al. (2008) propositions as factors affecting
the acceptance of Internet banking in the context of developing nations. Li and
Zhong (2005) also claimed that Internet accessibility, reluctance to change, cost
of computers and Internet access, trust in one’s bank, security concerns,
convenience and ease of use are pertinent considerations in a customers'
adoption of electronic services. Al-Ghamdi (2009) investigating these factors
based upon Morgan and Hunt (1994) proposed Commitment-Trust Theory
pointed out that antecedents like shared value, communication, reputation, and
customers' experiences significantly influence the customers' acceptance of
internet banking.

Byoung-Min et al. (2005) in determining their model to understanding

consumers' acceptance of electronic banking adopted the assumption that past
consumption, current situation (tastes, prices and income), and future
expectations are the basis of present customers' consumption behaviour.
Infusing into this assumption Becker's (1971) emphasis on time as an
explanation of consumption behaviour they suggested that "Consumers will have
different responses to Internet banking because they have different ability,
opportunity cost of time and attitude towards Internet banking" (Byoung-Min et
al., 2005, 7). Their conclusion indeed showed that ability and opportunity cost of
time have significant impacts in explaining consumers’ adoption behaviour for
Internet banking as well as the consumers’ benefit and cost associated with this
new attitude.

This study will leverage on the six factors Alam et al. (2009) focused on in their
research of corporate customers’ adoption of E-banking in Malaysia. These six

20
factors are based on Wallis (1997 cited in Alam et al. 2009) conclusion that
majority of customers deeply depend on them in accepting new technology.
Awareness, ease of use, safety and security, cost of internet banking reluctance
and lack of computer or internet access are the highligthed factors.

2.3.1 Awareness
Alam et al. (2009) defined adoption as "the acceptance and continued use of
a product, service or an idea". Roger and Shoemaker (1971 cited in Alam et
al., 2009) argued that customer adoption or rejection of an innovation starts
with the consumer becoming aware of the innovation; before the consumers
begin using a new product or service he goes through the phases of process
in knowledge, conviction, decision and confirmation. The lack of awareness of
the availability and benefits of electronic banking services have been shown
to be a pivot factor in adoption process. (Sathye, 1999; Howcroft et al., 2002;
Wu, 2007)

2.3.2 Ease of Use

Daniel (1999) includes ease of use as one of the core values the banker
expects the customer to demand in his adoption of electronic banking service
channel. Katz and Aspden (1997), Walis (1997) Dover (1998), Daniel (1999),
and Mols (2000) (all cited in Alam et al., 2004) Davis et al., (1989), Moore and
Benbasat (1991), Taylor and Todd (1995) (all cited in Al-Hajri, 2008)
established the ease of use as a crucial factor in a customer acceptance of
electronic banking processes.

Lichtenstein and Williamson (2006) found in their study that ease of use or
usability is "closely linked to individual perceptions of complexity, web site
design and integratability/interoperability" Eriksson et al., (2005 cited in Al-
Ghamdi, 2009) implied that ease of use may be related to customer
apprehension of the efforts to put into the learning to use electronic banking
processes.

2.3.3 Security
The fear of hackers, fraud, lack of trust and privacy are the core of customers'
security concerns in internet banking transactions. Sathye (1999 cited in Al-
Somali et al. 2008) claimed as high as 73% of customers avoid the adoption

21
of electronic banking over the concerns about safety and security of
transactions while Cranor and Laurie (1999 cited in Wu, 2007) claimed 81%.
Adesina et al. (2009) asserted that the security of internet banking system in
terms of privacy is a paramount concern for user. However, Li and Zhong
(2005) showed in their study that security is of lesser importance to the more
affluent customer in his acceptance of internet banking services.

2.3.4 Cost
The context of this study can be viewed in a perspective as a dichotomy
between the banks' pursuit to reduce operating cost and the customers'
taking the best opportunity cost advantage. Wu (2009) indicated that
telecommunication costs, internet installation cost and internet banking
service fee are important considerations in motivation customers to adopt
electronic banking services. He claimed non-users ordinarily weigh these cost
as expensive in terms of its opportunity cost of traditional services. Sathye
(1999 cited in Alam, 2009) identified two types of costs associated internet
banking i.e. one, the normal costs associated with Internet activities and two,
the bank's service charge and cost.

2.3.5 Reluctance to change

Daniel (1999) claimed customers exercise a high level of inertia toward

changing their established arrangements while Sathye (1999 cited in Alam et
al., 2009) pointed out that senior citizens in particular prefer personal
interaction in their banking transactions and exhibit a phobia for technology.
Moreover, He, Sathye (1999 cited in Al-Somali et al., 2008) concluded that
unless their specific need is satisfied, customers will not be prepared to
change their present familiar ways of (traditional) banking. Bareczal and
Ellen, (1997 cited in Wu, 2005) argued that consumers will not necessarily
adopt a new financial product unless it reduces their costs and does not alter
their behaviour when using it. Polatoglu and Ekin (2001 cited in Wu, 2005)
confirmed that the affluent and the highly educated customers are early
adopters i.e. they generally accept changes more readily.

2.3.6 Accessibility
Banking is mainly an information based service industry, customers
frequently demand accurate information in respect of their accounts and this

22
 information should be readily accessible (Hoppe et al., 2001) at the
customers' point of call or transaction. Electronic banking uses the internet as
backbone to make this information readily available. Kerem (2001) remarked
that lack of internet access is the fundamental factor discouraging potential
consumer from the use of electronic banking. In using electronic banking
services the customer needs an internet-ready PC or phone or some other
telecommunication devices which are not mostly not readily available. The
quality of the internet connection which is sometimes in doubt is part of the
accessibility factor. Daniel (1999) agreed that the low usage of electronic
banking services in UK is due to lack of customer access to suitable PCs.

2.4 Adoption Models

Acceptance by intended users is imperative for any technology to improve
productivity and various studies into understanding user acceptance of new
technology have given rise to several theoretical models with roots in
information systems, psychology and sociology (Venkatesh et al., 2003 cited in
Al-Somali et al. 2008).

Various models have been proposed, decomposed, refined and used in studying
consumers’ acceptance of a new product or service. The result and efficacy of
each of these theories in different studies of customer adoption and success of E-
banking products and services are mixed (kolodinsky et al., 2004). Theory of
Planned Behaviour (TPB), The Technology Acceptance Model (TAM) and the
diffusion of innovation are the three most frequent employed models among
previous researchers in investigating the determinants of electronic banking
adoption.

2.4.1 The Theory of Planned Behaviour (TPB)

The Theory of Planned Behaviour (TPB) (Ajzen, 1985, 1991) was developed to
address the inadequacies of a preceding theory; the Theory of Reasoned Action
(TRA) (Ajzen and Fishbein, 1975), in studying human behaviour. Both theories
state behaviour is a direct function of behavioural intention (Shih, 2006) i.e.
intention is taken as a direct determinant of behaviour (Al-Somali et al., 2008).
This theory in various dimensions has been extensively adapted by lots of
researchers in studying consumers’ adoption of internet banking (Al-Somali et
al., 2008).
23
Taylor and Todd (1995) introduced the decomposed TPB model which they
asserted has a value added in terms of a more explanatory power and
understanding of the antecedents of behaviour. This decomposed TPB model
employs constructs like relative advantage, compatibility from innovation
literature. It fully decomposed individual's attitude, subjective norms and
perceived behavioural control into more specific dimensions comprehensively
providing for their influence on customers' intention to adopt internet banking
services (Tan and Teo, 2000). This decomposed TPB model asserts these three
factors determine a person's intention to adopt internet banking.

They are (1) attitude, which describes a person’s perception towards

Internet banking; (2) subjective norms. which describe the social
influence that may affect a person’s intention to use Internet banking; and
(3) perceived behavioural control. This describes the beliefs about
having the necessary resources and opportunities to adopt Internet
banking. (Tan and Teo 2000, 7)

2.4.2 Technology Acceptance Model (TAM)

The Technology Acceptance Model (TAM) introduced by Davis (1989) is one of

the frequently employed theories in researching information system acceptance
by potential users (Alagheband, 2006) has proved valid and highly reliable in
predicting information system acceptance and usage (Mathieson, 1991; Davis
and Venkatesh, 1996 cited in Alagheband, 2006). King and He (2006) agreed to
the validity and robust predictability of this model in a variety of context while
Wang et al., (2003) confirmed the support of use with different populations of
users and system choices (Al-Somali et al., 2008). Similar to TRA, TAM assumes
the rationality and systematic usage of information on behave of the prospective
user in his adoption decision (Al-Hajri, 2008).

TAM proposed two primary predictors for the potential customer adoption of a
new technology- perceived usefulness (PU) and perceived ease of use (PEOU) of
technology are the attitudes determinants (Al-Somali et al., 2008). Davis (1989)
described PU as the degree of performance enhancement a potential user
expects from using a particular system and PEOU as the effort-free degree of use
a potential user expects from employing such system. In conclusion, system
acceptance is deemed to suffer if users do not see a system as useful and easy
to use (Alagheband, 2006)
24
In trying to improve the predictive power of this model, many research works
have infused some external variables which are suggested to have an impact on
usefulness, ease of use, users’ acceptance and intention ( Adesina et al., 2009).
In his study Pikkarainen et al. (2004 cited in Byoung-Min et al., 2005) included
perceived enjoyment, information on online banking, security and privacy, and
quality of Internet connection along the two base predictors. AlSukkar (2005
cited in Al-Somali et al., 2008) employed an extended TAM framework to model
behavioural intentions for greater applicability. Davis(1989) the proponent
himself, suggested the study of impacts of other variables on usefulness, ease of
use and user acceptance and intention in future researches on technology
acceptance (Adesina et al., 2009).

2.4.3 The Diffusion of Innovations

Rogers (1962) defining innovation as "an idea, practice, or object that is

perceived as new by an individual or other unit of adoption" theorized that
consumer adopt an innovation based on its characteristics such as relative
advantage, compatibility, simplicity/complexity, observability, and trialability.

Kolodinsky et al. (2004) highlighted that Rogers' diffusion of innovations model is

well adapted theory in technological innovations empirical work noting
incorporation of pieces of the model in the studies of Raju,1980; Shimp and
Beardon, 1982; Price and Ridgeway, 1983; Childers, 1986; Prendergast, 1993;
Busch, 1995; Dabholkar, 1996; Lockett and Littler, 1997; Daniel,1999; Howcroft
et al., 2002; Lee et al., 2003 among some many researchers.

2.4.3.1 Relative Advantage

Rogers (1962) described relative advantage has the degree to which a consumer
see a new product or service as different from and better than its present
substitutes. Kolodinsky et al., (2004) cited savings of time, money and
convenience as relative advantages in respect of electronic banking and
concerns over privacy in online financial management of customer accounts a
relative disadvantage (Abbate, 1999; Snel, 2000; Karjaluoto et al., 2002 cited in
Kolodinsky, 2004). Rogers (1995 cited in Alagheband, 2006) further stated that
customers' perceived relative advantage of an innovation is positively related to
its rate of adoption. Agarwal and Prasad (1998 cited in Wu, 2005) also agreed
with this positive correlation.

25
2.4.3.2 Compatibility

This is the extent to which a new product or service is consistent and compatible
with consumers’ needs, beliefs, values, experiences, and habits. Kolodinsky et al.
(2004) asserted that consideration should be given to how a technology fits in
with the banking behavior of a consumer and the way in which they have
managed their finances in the past. Tornatzky and Klein (1982 cited in
Alagheband, 2006) held that consumers readily adopt an innovation when it is
compatible with individuals, job responsibilities and value system. Rogers (1983
cited in Wu, 2005) argued that an innovation can be compatible or incompatible
with socio-cultural values and beliefs, with previously introduced ideas, or with
client needs for innovations. He (Rogers, 1983) further claimed that an
innovation's compatibility, as perceived by members of a social system, is
positively related to its adoption.

2.4.3.3 Complexity

This is the extent to which consumers perceive a new innovation as easy to

understand or use. Adoption is difficult for customers without previous
knowledge of the use of a computer and the internet, and also the ones who
believe electronic banking services are difficult to use (Kolodinsky et al., 2004).
This is common among senior citizens. Wu (2005) stated that consumers will
reject an innovation if it is not user friendly. Davis (1989) concluded that
perceived complexity strongly influenced the adoption of electronic technologies.
Leaderer et al. (1999 cited in Wu, 2005) pointed out that complexity can be
considered an exact opposite of ease of use in the Technology Acceptance Model
(TAM). Hence, simplicity can be taken instead of complexity as a constituent of
this theory.

2.4.3.4 Observability

This is the extent to which an innovation is visible and communicable to

consumers. Kolodinsky et al. (2004) considered ATMs on the street corners as
more observable than PC banking or telephone banking done on a desktop at
home. Alagheband (2006) affirmed that observability of an innovation is
positively related to its rate of adoption.

2.4.3.5 Trailability

26
This is the ability of consumers to experiment with a new innovation and
evaluate its benefits. Kolodinsky et al. (2004) and Alagheband (2006) argued
that the extent to which a bank offers its electronic banking services to their
customers influences the trialability of such innovation and its accessibility.
Trialability can decrease uncertainty about a new idea and is positively related to
the rate of adoption (Alagheband, 2006).

2.5 Barclays Bank E-banking Services

Barclays was founded as a modest banking business some 300 years ago in
Lombard Street in the heart of the London’s financial district. Today, it is one of
the world’s largest financial services groups with operations in over 60 countries
(Barclays International, 2007) and over 145,000 employees servicing more than
49 million commercial and retail customers (Passport-to-Barclays, 2010). With
over £1 trillion of the world's money under management, annual revenues in
excess of £11 billion (Passport-to-Barclays, 2010) and adjudged by Datamonitor
as the largest financial services provider globally with $3.7 trillion of assets
(Wikipedia, 2010). Barclays' goal-driven strategy is becoming one of a handful of
universal banks leading the global financial services industry; an innovative,
customer-focused company delivering superb products and services (SAP
Barclays' success story, 2003). This entails providing a full bouquet of retail and
wholesale services to customers and clients including retail, commercial and
private banking, credit cards, investment banking, investment management and
wealth management. The bank has extensively adopted electronic banking
services in supporting its four main products and services categories; Personal
banking, Corporate and Business banking, investment banking, and Wealth
management.

With some many pacesetting introductions, Innovative thinking has kept

propelling Barclays' growth throughout its entire long and handsome 300 years'
history, and particularly the continual strategic adoption of technology. Barclays
became the first UK bank to order a computer in 1959 (SAP Barclays' success
story, 2003) and the first to envisage ATMs' potential unveiling the world’s first
ATM in 1967(Singh et al., 2002), one of the first in Europe to pioneer credit card
with its leading brand Barclaycard (Barclays Bank Case Study, Cisco 2007). In
the mid-1990s, the first bank to set up a Web site and in 1998 the first to

27
introduce the ‘drive thru’ cash machine (SAP Barclays' success story, 2003).
"Barclays is one of the biggest on-line banks with some four million registered
Internet customers."(SAP Barclays' success story, 2003, 1)

One of Barclays' key electronic banking services is the Barclaycard, a part of its
Barclays Global Retail Banking division. One of Europe leading commercial card
issuers and one of the UK’s largest payment processors, founded in 1966,
Barclaycard caters for about 11.9 million cardholders in the UK and 23.7 million
worldwide (Superbrands annual, 2010). An electronic banking product that can
be used in payment in more than 28 million locations in more than 200 countries
as well as 600,000 ATMs and banks worldwide (Superbrands annual, 2010).

Cisco revealed in 2007 that Barclays Bank is advancing its plans of becoming a
top five global bank with a strategic refresh of its Internet business (Barclays
Bank Case Study, Cisco, 2007). It said Barclays in its prospect of delivering
improvement to cross-channel collaboration, customer satisfaction, and sales
volumes, is embracing the best that emerging technology. A technological
solution provided by the Internet Business Solutions Group (IBSG), the global
strategic consulting arm of Cisco. Cisco claimed Barclays is well-informed of
future market direction by anticipating revenue proportion that would be derived
from the Internet and articulating the impact of Internet growth on other
channels and lines of business, it (Barclays) is poised to ensure continued
leadership in e-banking and improve its competitive position by identifying to
build the opportunities arising from next-generation Web technologies into its
emerging multichannel strategy, incorporating local branches, call centers, and
online banking services (Barclays Bank Case Study, Cisco, 2007).

In considering further network investments to support its delivery channel

transformation program, Barnaby Davis electronic banking director, Barclays
Bank submitted that “Future success for financial institutions will depend more
and more on taking the best of these emerging technologies. Social networking,
for example, will define how tomorrow customers wants to do business-whether
that is through the use of instant messaging and Webcams or sites [Websites]
that provide intuitive profiling and better buying sensations. Taking an informed
commercial view increases the chances of getting this right". (Barclays Bank
Case Study, Cisco, 2007)

28
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

The previous chapter was an exposition of existing related literatures relevant to

the course and concept of this study and which helped clarified one of the
research objectives of the study. In this particular chapter effort is made to
present the research methodology. Shih (1998) listed four areas for
consideration when deciding on a research method: the philosophical paradigm
and goal of the research, the nature of the phenomenon of interest, the level and
nature of the research questions, and practical considerations related to the
research environment and the efficient use of resources. The following sections
of this chapter were constructed in accordance with this framework in mind. The
chapter opens with a brief re-introduction of the research aims and objectives;
this is to facilitate the apprehension of the correlation between the research
aims and objectives, and the adopted research techniques. Subsequently, the
research orientation was presented i.e. the philosophical perspective borrowed in
collection and analysis of data. The research paradigm is of the
phenomenological school. Hereafter, effort was made to explain the researcher's
approach and strategy to the study. As already noted the research strategy
involved a case study of Barclays bank. Reasons for rejecting other alternative
research strategy were subsequently enumerated.

The other half of the chapter begins with the discussion of the research
instruments employed. Their designs and formats along with the methods of
administration was clearly accounted for and justified. The ethical considerations
observed during research instrument administration and in data collection were
discussed. A pilot test was carried out. The reasons and outcomes of the test
were also presented. The eleventh session of the chapter was about the sample
technique the researcher used in research instrument administration. The
chapter closed with a critical debate on the strengths and limitations of the
research methodology.

29
3.2 RESEARCH AIMS AND OBJECTIVES

Herein, the essence is to explore the existence of the correlation between this
study research aims and objectives, and the research methodology adopted. It is
imperative that the appropriate research methodology is applied in data
collection and analysis with respect to the research aims. The paramount
underpinning and rationale of any research work rest in the consistency between
the aim of a research study, the research questions, the chosen methods, and
the personal philosophy of the researcher (Proctor, 1998). It should be noted that
this research seek to investigate the impact of customer perception on E-banking
adoption, using Barclays as case study, with the following four aims and
objectives. The first objective was to review existing literature on customers'
behaviour towards electronic banking adoption process. The next research
objective was to identify factors influencing customers' adoption of electronic
banking services. Appraising the bearing customers' acceptance on electronic
banking deployment was the third. Lastly, the study seeks to suggest a better
perspective to banks on understanding customers' acceptance and their
deployment of electronic banking services.

Hence, within the spectrum of this research’s aims and objectives the research
methodology here adopted in this section was selected in accordance with
suggested criteria by Saunder et al. (2005) and Burn (2000). The influence and
merits of this on the choice of research approach and strategy, data collection
technique and analyse, and research instrument design are subsequently
explained and enumerated.

3.3 RESEARCH PHILOSOPHY

Easterby-Smith et al. (1997 cited in Crossan, 2002) held that the significance of
philosophy in reference to research methodology will help the researcher to
appropriately defined the overall research strategy (data collection and
interpretation), and help the researcher evaluate alternative methodologies
while also assisting his or her creativity or innovativeness in methods selections
and adoptions that may be previously outside his or her experience.
Consequently, research methods are not pinned to a single philosophy as

30
literature presents various ways of delineating current research philosophies.
Practically, these philosophies have been classified into two major leagues; the
positivism and post-positivist thinking (Crossan, 2002). Creswell (2003) re-
classified them into four divisions, namely; Positivist, phenomenological
(interpretivist), interventionist and pragmatism. The later three belong to the
post-positivist school with phenomenologist being the chief of them. Proctor
(1998) held that a comprehension and exploration of the two extremes of
research philosophy, i.e. positivism and post-positivism, need to be ascertained
before any significant decision on research method can be made.

The positivist approach, the traditional scientific approach, takes on social

sciences research as a study of hard facts and seeks to establish the relationship
between these facts in accordance to scientific laws (Smith, 1998 cited in
Crossan 2002). In other words the truth about social objects is studied in similar
ways as natural objects. Saunders et al. (2006) pointed out that the researcher
assumes an objective role (independent of the truth he or she seeks) interpreting
data in a clear value-free manner. However, the intricacies of business and social
research entail relationships that are more subjected to influences of behaviour,
feelings, perceptions, and attitudes which are not governed by strict natural laws
but take place within the confines of specific cultural context. The course of this
research is firmly within such context and this lends credence to the adoption of
the phenomenological research philosophy. As supported by Collis and Hussey
(2003), human behaviour is not a phenomenon that is easily measured or readily
subsumed within numerical analysis like in the natural sciences.

The phenomenological approach is defined as the study of how people describe

things and experience things through their senses; it is an analysis of reality
based on subjective experience incorporating objective facts, thus focuses on
making meaning as the essence of human experience (Patton 2002). Apparently,
this is the other end of the research philosophical spectrum. Positivist studies
tend towards being objective (absolute truth), establishing generalisation and
laws while phenomenologist studies tend in the direction of subjectivity and
relativity. Positivist concerns are purely empirical studies of phenomena towards
establishing generalized order for relationship understudy; this does not provide
allowance for the complexity of human elements involved in business researches
like the one undertaken. Hence, the adoption of the phenomenological research
philosophy as the researcher opined that borrowing solely a positivist

31
philosophical perspective to this present study like in most existing literature of
related concerns will not give a holistic vista to the research question. As
Scapens (1990) observed issues like this involves analysing complex social
phenomena which may be difficult using the methods of positive philosophical
analysis. In addition, Saunders et al. (2007) defended that establishing
generalized laws which is the main concern of positivism will suffice to suggest
that the use in social context can lead to loss of valuable information of which
may necessitate the loss of valuable data. Collis and Hussey (2003) concluded
that reality of a given background may be seen not as a fixed and stable entity
but as a type of variable that might be discerned through multiple forms of
understanding.

While the positivist approach a study from purely an empirical and statistical
perspective, the phenomenologist adopts an ontological and epistemological
approach which legitimates the value of people beliefs, highlights socially agreed
ideals, and tries to provide an understanding of participants' motives, intentions
and actions in a meaningful way (Saunders et al. 2006). Collis and Hussey (2003)
summarized that in phenomenological approach the focus is on the meaning,
rather than the measurement of social phenomenon. To this end, the researcher
therefore takes this investigation into the impact of customer perception on E-
banking adoption as not only involving the understanding of such customers'
orientation and the influences thereof but also of making meaning of results of
such behaviours on bankers' attitudes towards adopting E-banking services.

3.4 RESEARCH APPROACH

A research approach is a master plan itemizing the methods and procedures

which the researcher intends employing to guide and focus his research (Collis
and Hussey, 2003). The essentiality of the adopted research approach is
construed within its context (Saunders et al. 2007). More importantly, this
provides the confines and criteria within which the study will be conducted and
data collected and analysed. Evident from literature a research approach takes
one of two directions quantitative approach otherwise known as deductive
approach and qualitative approach, also referred to as inductive approach
(Bryman 2001; Collis and Hussey 2003; Jankowicz 2005; Saunders et al 2007).
Saunders et al. (2007) held that deductive approach is of a scientific orientation,

32
while the inductive approach tends towards social perspective i.e exploring the
meanings humans attach to events.

It will be acknowledged that the pursuit of this research is within the socio-
economic arena; studying the influence of customer perception on bankers'
attitude in electronic banking adoption. The interaction between these two
human behaviours prompted the researcher's employment of the qualitative
(inductive) method. An approach that begins with specific observation(s) and
thereon builds general patterns (Patton, 2002) as opposed to the theoretical
based approach adopted in most related researches. Hence, the research takes
on an exploratory nature which is within the ambit of the qualitative approach.
This choice consequently influenced the data collection methods. A mixed-
method involving the use of both questionnaire and interview in sequential
process was adopted in order to achieve triangulated data which helps
neutralizes biases apparent in a single method (Creswell, 2003). The issues of
reliability, validity and generalizability were taken into account in the research
design process. The questionnaire used was constructed reflecting suggested
influences and frameworks on customers' perception of new technology from
existing literature and as discussed in chapter 2. These were also to help inform
the questions which were posed during the semi-structured interviews. Self-
completion questionnaires were provided for the people within the targeted
sample after ethical considerations were discussed. Respondents to the
questionnaire were obliged to indicate readiness to be part of a subsequent
interview.

In addition to the questionnaire, a number of semi-structured interviews were

conducted. The flexibility afforded herein provided for the capture of robust
details and helped resolve misconceptions and queries, which can only be done
through face-to-face contact (Griggs & Hyland, 2003). Five members of Barclays
staff were interview in a purposive sampling technique; two higher management
staffs and three lower management staff who interact with customers daily on
electronic banking matters. The underlining criterion is the consideration of their
being ' information rich' and illuminative about the subject matter (Patton, 2002).
Also, five customers were interviewed. These interviewees were chosen from
among the respondents who indicated their willing for participation. The
demands of interviewing skills and listening skills as emphasized by Easterby-
Smith et al.(2002) were considered in establishing trusting relationships during

33
the interview process. White (2000) contested that interviews are susceptible to
challenges of bias, reliability and validity which can be further compounded by
the practitioner role taken by the researcher himself or herself. However, It
should be noted that these interviews were conducted to added richness to data
and critical efforts were made to sieve out the researcher's view of the subject
matter as 'leading questions' were avoided. On another hand, it is contestable
that the results of the small number of interviews conducted are not
representative of the whole context understudy. Conducting a supposed
adequate number of interviews would have been outside the limits of this
research and it is arguable that the results thereon further confirmed the
outcomes on the questionnaire. Nevertheless, wealth of triangulated data
collected justifies for validity.

3.5 RESEARCH STRATEGY: CASE STUDY

Research strategy is an element with which the researcher intends to collect

relevant data on his/her course of study in order to answer the research's aims
and objectives on a broader view. The choice of a particular reference of study is
necessary as the nature of this research involves the observation of human
behaviour as it impacts the dependent variable (E-banking adoption) under this
study. The supposed behaviour is on a phenomena level and reality makes its
universal observation impracticable. Consequently, Barclays bank is chosen as
case study for the research strategy. Robson (2002) and Saunders et al. (2007)
defined a case study as a strategy for doing research which involves an empirical
investigation of a particular contemporary phenomenon within its real life
context using multiple sources of evidence. Bryman (2001) pressed further
describing case study as an opportunity to study a particular subject in depth. In
this regard, the whole electronic banking industry is the universe from which
Barclays is taken as a case study subset. Adequate credence has been given to
the relevance of use of case study research strategy in existing literature.
Bryman(2001) held that the uniqueness of this strategy resides in the provision
of insights into the class of events from which the case is drawn. Conclusively, it
can be argued that case study affords effective evidence(s) upon which general
findings can be illustrated.

34
It is the aim of this research to assess the bearing of customers' perception on
the adoption of electronic channel of transaction by banks. it is arguable this has
to be done systematically. The researcher has to intelligently narrow down
his/her data collection to a reliable and objective subset that will provide a fair
robust interpretation of the whole context. Walsh (2001) buttressed this idea
describing a case study research approach as involving systematic investigation
into a single individual event or situation necessitating the studies of a single
example or case of some phenomena.

Scapens (1990), Collis and Hussey (2003) identified four types of case studies,
namely; descriptive, experimental, explanatory and illustrative. Basically, this
paper employed existing theories in explaining the interactions of the two
variables under investigation; an explanatory type of case study. Collis and
Hussey (2003) attested to the suitability of case study in an exploratory
research, arguing further that it provides adequate responses to the questions of
Why, What and How. Researchers have employed this strategy because it fits
into many purposes and offers multiple means of collecting data as well as easy
ways of combining data analytical methods. In defence, Saunders et al. (2007)
noted that data collection technique may involve observations, interviews,
questionnaires and documentary analysis.

3.6 ALTERNATIVE RESEARCH STRATEGIES

Evidently there are other research strategies employable under the

phenomenological research methodology. Here space will be taken to justify
their non-adoption in the research process. These other strategies as identified
by Neville (2005) included; action research, ethnography, grounded theory,
feminist perspectives and participative enquiry.

3.6.1 ACTION RESEARCH

35
Neville (2005) highlighted that action research requires the involvement of the
researcher in influencing change(s) in a given environment and thereon monitors
and analyse the products of such changes. The process begins with the
researcher identifying a specific objective e.g. suggested ways of handling
'difficult' customers. Afterwards, he enters into the situation to explore the
practicability of the new ways by introducing the techniques into the
environment and hence monitors for results. This method entails active co-
operation between researcher and client(s) in the experimenting environment
and a continual evolution of respondents’ behaviour adjusting to the intervention
in the light of new information and responses.

The aim of this study is to explain existing interaction and not influence it as
action research proposed. Clearly, the objective of this research does not
warrant the deep involvement demanded here. Also, the time and cost limits of
this research cannot afford such in-depth experimentation.

3.6.2 ETHNOGRAPHY RESEARCH STRATEGY

Anthropology gave birth to this form of research, a kind of close study of

societies (Neville, 2005). Saunders et al. (2007) argued that it involves any study
attempting to explore the socio-cultural activities and pattern of a group of
people. This entails descriptive collection of data as the basis for interpretation
through participant observation and informant interviews (Collis and Hussey
2003), basically, the researcher becomes a working member of the observed
group or situation. It is highly participatory. With ethnographic perspective, the
researcher aims to understand the situation from inside; the viewpoints of the
people in the situation (Neville, 2005). He affirmed its effectiveness in studying
small groups. Herein, the research shares similar experiences with the studied
subjects.

The intrinsic orientation of this study is one that readily lends an ethnographical
perspective to the course of the study, as the researcher can be considered an
element in the understudy population of electronic transaction users. Like an
average respondent, researcher has his fair share of the influences of factors
affecting customers' E-banking adoption and thereby has his own individualistic
bearing on the other variable in study. An ethnographic study conducted in this
sense may be seen as highly bias and prejudiced. Moreover, the pursuit of this

36
study is investigating a socioeconomic pattern not a socio-culture one wherein
ethnographic strategy is more effective.

3.6.3 GROUNDED THEORY RESEARCH STRATEGY

The distinction of grounded theory strategy is approaching any research without

preconceived ideas about what might be discovered or learned. Ground theory
attempts to generate theory from collected data, a reversal method to traditional
ones that collect data in order to test the validity of pre-determined propositions
(Neville, 2005).i.e. theory is constructed from observations made, rather than
being preconceived before the study.

Although, grounded theory strategy is a highly accepted qualitative method

under the phenomenological philosophy, the researcher considered it
inappropriate because theory building is not the priority of this research which is
the fundamental of grounded theory strategy. Also, grounded theory strategy
most time involves a second and further data collection which the limits of this
study cannot afford.

3.6.4 FEMINIST PERSPECTIVES

This type of research strategy though of benefit to everyone focuses on

knowledge grounded in female experience (Neville, 2005). He enumerated some
tenets for this research perspective, first in existing literature, women and their
contributions to social and cultural life have been grossly underemphasized. On
the other hand, men and male perspectives or norms have dominated previous
research. Lastly, the role of gender in interpreting the world and its social
phenomena has been absent or sacrificed in favour of other factors, e.g. social
class. An example of the context of this strategy can be in the research study of
the concerns, influences, roles and views of women in an organization or society.

Neville (2005) summarized that this research perspective direct attention to how
in pre-existing research literature women and their concerns have been
relegated to the background. Clearly, this is far from the research aim of this
particular study therefore it cannot be borrowed. The researcher has his
searchlight beamed on the whole society has a whole without bias to any
gender. However, the researcher suggests this theory may be helpful in studying
women (as a group of customers) adoption of E-banking services moreover as

37
some existing literature held that the different sexes adoption such innovation
differently.

3.6.5 PARTICIPATIVE ENQUIRY

Neville (2005) described this research strategy has one in which the researcher
himself is already an active and known member of the understudy group or
organization. It entails the active involvement and co-operation of the people
who the researcher normally work and associate with on a daily basis. In the
research process, openness, cooperating and sharing are emphasized to control
for bias.

As aforementioned, in this particular research perspective the researcher does

not consider himself a participating member of the understudy group even
though he belongs to the average group of customers those enlightened about
electronic banking services. Consequently, the participative enquiry technique is
not adopted for the research process.

3.7 RESEARCH INSTRUMENTS

Collection of the relevant data is imperative to any research and more

importantly the technique employed in the data collection process. There are
numerous means of collecting data for a research work but it is paramount that
the method used is appropriate in generating quality data. This appropriateness
is mainly determined by the nature of research question(s) understudy and the
research methodology in use. Existing literature recognizes two main types of
data, namely; primary and secondary data (Saunders et al 2007). Data collected
for the specific purpose of a presently undertaken research project is categorized
as primary data while secondary data are data collected through other means
such as books, journals, scholarly articles, newspapers, company documents,
internet, e-journals and data base among others (Bryman 2001; Saunders et al
2007). In most research works these two collection avenues are exploited which
this study also employed. In assessing the required data, existing literature on
customers' perceptions and adoption of E-banking as well as banks' adoption
process of E-banking were explored. Furthermore, in gaining a first-hand
perspective to the concern of the research questions particularly on the bearing
of already established customers' perceptions on the adoption pattern of

38
electronic services by the banks, questionnaire and interview were the primary
instruments used in collecting data.

As previously stated, this research work is based on the phenomenological

research philosophy and this research orientation commonly applies the
qualitative research technique in data collection and analysis. In accordance and
coupled with the explanatory nature of the research question, the researcher
engaged the use of the qualitative data collection method. This, the researcher
believes, will improve the diversity of approaches already employed in pre-
existing literature on similar research ground. To this effect, a mixed-method
design involving both (text) semi-structured interviews and (survey)
questionnaires methods in a sequential order were used in order to achieve
triangulated data, aimed at neutralising biases inherent in a single method
(Creswell, 2003); both random and purposive sampling techniques employed
where necessitated and the data collection was conducted among Barclays'
customers and banks in specific locations. The employment of all these shall be
discussed here subsequently.

3.7.1 QUESTIONNAIRES

Research literature does not present us with a singular acceptable definition of

questionnaire, however, Payne and Payne (2004) asserted that the prevailing
format in all questionnaires is of the structure within which members of a
sampled group are provided the same questions, in the same order either
through an interview or self-completing the questionnaire. Saunders et al. (2007)
defined it to entails all the data collection techniques which involved the
obligation of respondents to answer same set of questions in a pre-determined
manner. Bryman and Bell (2007) argued further that this manner of pre-set
questioning could be structured, semi-structured or unstructured. The choice of
questionnaire style employed is mostly dictated by the nature of targeted
population and research question, available resources (May, 2001), research
technique adopted and the researcher's orientation towards the study.
Undoubtedly, questionnaire as a method is an invaluable instrument in surveying
a population's behaviour, attitude, values and experiences (Gilbert, 2001).

Based on the nature of research questions in focus and the philosophical

orientation adopted for this study, the researcher considered a semi-structured
39
questionnaire appropriate for the pursuit of the study. Some questions were
drawn in close-ended style with options comprising "don't know" or "other" to
provide for all possible answers and thereby easier coding (Payne and Payne,
2004). The other questions were open-ended providing for respondents' own
comments on issues probably not covered in the questionnaire (Bowling, 2005).
The questionnaire focused on the two main research objectives; one, identifying
factors influencing customers' adoption of electronic banking services and two,
appraising the bearing of customers' acceptance on electronic banking
deployment. The questionnaire so designed to obtain both the independent
views of customers and bankers as regard the research objectives. In
consideration of diverse educational background of targeted respondents, the
questions were constructed in a simple, concise and without technical jargons
(Lockey and Hart, 2003). As confirmed during the pilot testing, all respondents
did have a singular understanding and interpretation of all questions allowing for
comparing responses obtained (Payne and Payne, 2004). Also cognizance was
taken of the time taken in completion and the appropriateness of wordings to
avoid embarrassment and bias (Bell, 1999). The mode of administration is self-
completion, a cheaper, and time and resource effective means (Bryman, 2001).

3.7.2 INTERVIEWS

An interview is a technique to collect qualitative data by mean of a discussion

between two or more people, while in most instances the researcher is the
interviewer. The focus of such interview is decided and guided by the researcher
to obtain respondent's view of some behaviour or phenomena rather than
making generalisations. This process can be carried out either face-to-face or via
telephone communication (Bryman, 2001). An Interview can be structured, semi-
structured or unstructured (Saunders et al., 2007). A semi-structure interview
was employed in the data gathering process. The importance of this approach to
the research method is that it affords flexibility in the subject matter discussion
and robustness of collected data. The question set of the interview was pilot
tested with three colleagues to check for ambiguity, inappropriateness and make
sure it fits into the objectives of the study. Consequently, some few questions
were re-framed while a few were eliminated as the length of time to be taken
was put into consideration.

The interview questions and themes were constructed based on the review of
literature and a preview of the results from the already administered
40
questionnaire. This was mainly in the domain of the two research objectives
under investigation. One, identifying factors influencing customers' adoption of
electronic banking services and, two, appraising the bearing customers'
acceptance on electronic banking deployment was the third. A purposive
sampling technique was used subject to those respondents who indicated their
willingness to participate in a subsequent interview process. Five Barclays bank
customers were interviewed and five of its bankers. Targeted respondents were
notified beforehand, briefed about purpose and proposed content of the
interview (White 2000). Before initiating any interview time length and
respondent's choice to withdraw were discussed and agreed on. Breaks were
observed where called for (Saunder et al., 2007). The research made effort to
frame questions in similar manner in all the interviews to allow for comparability
(Payne and Payne, 2004). Nevertheless, discussion of some matter did change as
a different perspective on the study opens up (Collis and Hussey, 2003). The
necessary ethical considerations were abided by.

At the end of each interview, a brief overview of each respondent’s answers was
done to ensure responses are not adulterated and the researcher did capture
information as intended by the each respondent. This did aid the exploratory
nature of this research.

3.8 ETHICAL CONSIDERATIONS

Collis and Hussey (2003) advised that participants should be consulted and their
voluntary consent sought throughout a research process, respondents to this
study were enlisted in consonance with the above recommendation. Interviews
like enquiries of similar nature where results and/or responses will be assessable
by third parties consent and confidentiality are paramount in eliciting the
relevant and reliable data needed. In the data gathering process, in order to
guarantee adequate and reliable responses and obtain fair voluntary
participation respondents were assured of strict confidentiality of their personal
data such as names, age e.t.c. The importance of this was justified as
respondents were more open and discussed matters as they are. The need to
speak to the bank's employees as part of the sample further necessitated this in
order to assure objectivity in their answers.

41
Time was taken to explain the purpose of this research to each individual
respondent and his/her voluntary withdrawal at any point was to be welcomed. It
should be noted that where any personal data of respondent(s) has been
revealed it is done with the consent of such respondent(s). However, all
respondents were assured that under no circumstance will their names be
revealed, whether in the course of the data analysis or other areas such as
informal discussion.

3.9 PILOT TEST

Envisaging unforeseen problems and oversights in the construction of the

questionnaire and interview questions the researcher deemed it fit to implement
a pilot testing prior to the main administration. The researcher is of the opinion
that a pilot test will help provide for robust validity eventually and uncover flaws
like ambiguity, inappropriateness and reactions of targeted subjects to some
likely questions. In consonance with Saunders et al. (2007), researcher sees this
as relevant in refining the questionnaire so that respondents will encounter no
hitches in answering and recording answers to any given question. However,
before the pilot test was conducted, the supervisor to this study edited and
commented on the suitability of the questionnaire. Furthermore, data concerning
any unforeseen problems were weighed on the recommendations of the layout
proposed by Bell (1999). These include assessing:

1. The clarity of instructions;

2. The length of time taken before completion
3. Which, if any, questions were unclear or ambiguous;
4. Which, if any, respondent felt uneasy about answering the questions;
5. Whether in their opinion there were any major topic omissions;
6. Whether the layout was clear and attractive;
7. Whether there are any other suggested comments.

Mitchell (1996) agreed that these types of considerations help in establishing

content validity, while also affording the privilege of making relevant
adjustments before the pilot testing. In carrying out a pilot test a selection can
be made from the targeted population to undertake the questionnaire or a
different sample of similar population that shares same demographic and socio-

42
economic characteristics (ASA, 1997). The second part of the suggestion was
adopted in the pilot testing due to the constraint of time. Sample was taken from
among colleagues on campus with informed insight into the subject matter of
this research. This only necessitated minor adjustments later on which were
appropriately made. The researcher opined that these taken steps in summation
will go a long way in minimizing inadequacies and help ensure reliability of
gathered data.

3.10 ALTERNATIVE DATA COLLECTION METHODS

Invariably, there exist some other reliable means of data gathering when
employing qualitative method that is based on the phenomenological research
philosophy. Space will be taken here to elucidate on the reasons why the
researcher found them inappropriate for the proposed research.

3.10.1 PARTICIPANT AND STRUCTURED OBSERVATION

Observation is a principal tool of the post-positivist school, an arena where the

research philosophy of this study is being borrowed. Though, an essential means
of collecting data observation is seldom employed in research studies. Saunders
et al. (2007) categorized observation into two types: participatory and
structured. In their view both involve “the systematic observation, recording,
description, analysis and interpretation of people’s behaviour” (p. 282). They
described that participatory observation entails the entire involvement of the
researcher in the lives and activities of the group, organization, or community
understudy; in a sense becomes a member of the organization. This method
provides more relevant insight into significant social processes while on the
other hand gives room for bias in collected data. In explaining structured
observation as systematic and predetermined, they held its advantage as the
ability to tell how often things happen rather than why they happen. It is
acknowledgeable that these methods yield more robust result based on its
reliability but data gathering is slow and expensive therefore the researcher
considered it unsuitable for the study, as the inherent limit of time and cost will
not afford its use.

3.10.2 DOCUMENTARY ANALYSIS

May (2003) defined documentary analysis as involving a broad array of sources

like official statistics, photographs, texts and visual data. Bryman (2004)

43
highlighted that documents like books, government minutes, newspapers and
magazines are among sources that may be exploited by the social researcher
engaging this method. Invariably, the validity and reliability of data depend on
the adequacy of the documents chosen for the phenomena understudy.
Documentary analysis entails an extensive analysis of related literature most
especially visual data. The researcher therefore jettisoned the use of this method
based on the fact that it focuses more on investigation of the physical practice of
an understudy phenomenon.

3.10.2 AUTHOBIOGRAPHY

Neville (2005, 10) affirmed that recently researchers has increasingly employ
"the use autobiography as a means of collecting information from small groups
of respondents to seek patterns, underlying issues and life concerns". He
proposed that this technique is efficient in accounting for the influence of
variables, such as social class, gender and educational experiences on career
development and career progression, or lack of it, within an organisation. He,
however, concluded that it is a time consuming method that needs both the
researcher and the people considerable amount of trust to be built.
Consequently, as previously explained this does not fit into the need of this
research because of time limit demand.

3.11 SAMPLING METHOD

Bryman (2001) described sampling as taking any portion of a population or

universe as a representative of that population or universe. The impracticability
reality imposed on surveying an entire population is readily acknowledged
mostly due to the constraint of limited time, budget or some other limitations
(Saunders et al. 2007), this made the concept of sampling fundamental to the
conduct of a research and the interpretation of results thereon. Unless in few
cases where the population is fairly sizable, a research is carried out by means of
taking a sample and applying generalizations to the whole population on the
analysis of the sample base. Furthermore, Collis and Hussey (2003) argued that
in the sampling process a sufficient number of elements from a population to
represent the properties or characteristics of that population.

Selecting this sufficient number of properly representative elements has to be

done systematically. This selection process is called sampling technique. There
are two types of sampling techniques, namely; probability or representative
44
sampling and non-probability or judgmental sampling (Saunders et al. 2007).
They opined that probability sampling technique relates to survey-based
research where the researcher can easily make inference from the sample about
a population to answer the research questions while non-probability enables a
targeted sampling in order to reach difficult-to-identify members of the
population. Under probabilistic sampling technique individual element of the
population are taken as fully representational of the required properties or
characteristics inherent in any other single element but in judgmental sampling
the needed information is obtainable from a selected specific element.

Based on the above note, and on the research philosophy and nature of this
study, this research employed both techniques in administering the research
instruments. While, the questionnaire was administered purely on a random
probability sampling technique the interviews were conducted on the basis of a
purposive sampling of non-probability sampling technique. In sampling
customers and bankers opinion on the impact of customer perception on
electronic banking adoption process by the bank, the researcher interviewed five
customers and five bankers. The five customers included two senior citizens; one
highly-educated and the other fairly, also a mid-age man and two young
customers below 26 years of age. The bankers included three low-level staff and
two higher management staff. It should be noted that this research involved a
case study thereby the selection of most informative targets is imperative. The
critical dimension employed in the judgmental selection of customers here above
is based on hypothesized factors in pre-existing literature, where suggested
factors of age, education, income level among others have been argued to
influence customer adoption pattern for electronic transactions. In the case of
the bankers, staffs dealing directly with electronic banking products and services
were targeted and the junior level staffs were taken to be more because they
have daily interactions with customers.

Though, a simple random sample was adopted in administering the

questionnaire, in order to assure of a more relevant data collection the
researcher required an evident understanding and repository knowledge of the
research's subject matter from selected respondents.

3.12 STRENGTHS OF THE METHODOLOGY

45
The merits of the adopted methodology underscore its employment in a research
of this nature. This study is based on qualitative investigation made under the
phenomenological research philosophy which is characterized by methodological
eclecticism, a hypothesis-free orientation and an implicit acceptance of the
natural scheme of things (Burns, 2000). The post-positivist approaches assume
that reality is multiple, subjective, and mentally constructed by individuals of
which phenomenological philosophy adopted in this work is one. Therefore, the
ultimate aim of the phenomenological approach is in specific interpretation of
the investigated behaviour from the participants' own subjective frames of
reference (Crossan, 2002). Bryman and Burgess (2004) supported this
methodology pointing out that it allows the researcher to see that things could
be other than they are and thereby enabling the researcher to gain an insider’s
view of the subject understudy. That is, the researcher has the privilege of
capturing what people say and do as a subject of how they interpret the
complexity of their world; to understand events from the viewpoints of the
participants.

Consequently, it is agreeable that the adopted methodology affords a

perspective to a more robust understanding of the context of the investigation
by presenting the researcher multiple avenues of study (Burns 2000; Walsh
2001; Collis and Hussey 2003). Cook (1985 cited Crossan, 2002) defined this as
multiplism; the idea that a research can be approached from several
perspectives in defining research goals, choosing research questions, methods,
analyses, and particularly in interpreting results. The flexibility here afforded
thus provides the researcher an allowance to broader orientation and
interpretation in data gathering and analysis. Therefore, it provides an escape
from the many traditional narrower approaches of investigating social
experiences mostly of the positivist school. It will be acknowledged that a
research of this nature (The impact of customer perception on E-banking
adoption) is a critical study of reality; the influence of certain human behaviours
on a particular subject matter. Human behaviours are not 'objects' governed by
fixed natural laws but highly subjective to wider influences that positivists would
consider irrelevant. Crossan (2002, 52) held that "objective reality as proposed
by positivist philosophy can be seen as only one aspect or dimension of reality".
In conclusion, Hughes stated that:

46
 "For the post-positivist researcher reality is not a rigid thing, instead it is a
creation of those individuals involved in the research. Reality does not exist
within a vacuum, its composition is influenced by its context, and many
constructions of reality are therefore possible (cited in Crossan, 2002)".

Indeed, most existing literature has investigated the two variables understudy in
this research purely from a positivist perspective. The researcher believes the
adopted methodology in this study will help contribute to a wider orientation on
the subject matter.

3.13 LIMITATIONS OF THE METHODOLOGY

Though, the researcher has elucidated on the merits and strengths of case study
research strategy, it should be noted that there are some shortcoming inherent
in this technique. Some scholars, especially of the positivism school, have
questioned the credibility of the method. Bryman (2001) queried the objectivity
of the researcher in selecting evidence to justify or refute evidence, or his
objectivity in choosing a particular explanation for the evidence found. Ozuem et
al. (2008) claimed the researcher in this situation is influenced by ‘etic’ (values
of the researcher) and ‘emic’ (values of the researched). They held that
uniqueness and ‘contextuality’ of the case being studied are often lost due to the
researcher invoking content analysis in converting qualitative data into
quantitative ones. On this note Saunders et al (2007) observed that in
qualitative methodology, contexts, situations, events, conditions and interactions
cannot be replicated to any extent whereon generalization be made with any
confidence to wider context than the one studied.

Needless to say that the contest of adequate validity and reliability is a major
argument against the context of methodology employed in this study because of
its highly subjective nature in data gathering. Invariably, it is difficult to apply
conventional standard of reliability and validity demanded by the positivism
school of philosophy. The limitations inherent in this approach intrinsically relate
to the interactive and participatory nature of such qualitative methods; an
inevitable weakness due to the proximity o the research to the investigation
(Parahoo, 1997). In summary, Mays and Pope (1995, 42-45) concluded:

‘Firstly, that qualitative research is merely an assembly of anecdote

and personal impressions, strongly subject to researcher bias;
47
 secondly, it is argued that qualitative research lacks reproducibility–
the research is so personal to the researcher that there is no
guarantee that a different researcher would not come to radically
different conclusions; and, finally, qualitative research is criticised
for lacking generalizability’.

In addition to the above, due to the inevitable constraint of limited time within
which this study is expected to be fully concluded, the researcher do admit that
considerable amount of time was not spent in the research setting to holistically
aggregate the actions, interactions and reactions of the subjects and variables
understudy. Even, in circumstances where this is intended it will be noted that
reality will impose its insurmountable limits. Also as noted by Collis and Hussey
(2003), case studies are time consuming giving rise to a massive deluge of
information which most often is impossible to adequately analysed, thereby
increasing the tendency to selectivity and biasness.

Notwithstanding, the limits mentioned, the adopted research philosophy lend

credence to this research pursuit and there is little doubt that case study
research strategy is appropriately justified among other alternatives in achieving
the aims of this study. Though post-positivist (phenomenologists) assumption
that reality is multiple, subjective and mentally constructed by individual,
Crossan (2002, 54) summed up on case study:

"The use of flexible and multiple methods is desirable as a way of

studying a small sample in depth over time that can establish
warranted assertibility as opposed to absolute truth. The researcher
interacts with those being researched, and findings are the
outcome of this interactive process with a focus on meaning and
understanding the situation or phenomenon under examination."

3.14 SUMMARY

A critical and in-depth evaluation of the research methodology was done in this
chapter. The link between the research aims and objectives, and the
methodology adopted was presented. The chapter highlighted the research
philosophy, approach, strategy and instrument employed in the data collection
process. Thereon, the rationales and justifications for adopting these and

48
rejecting other alternatives were discussed. Ethical considerations upheld and
Sampling technique implemented in the research process were also discussed.
The chapter ended with the overall overview of the strengths and limitations of
the methodology.

CHAPTER FOUR

ANALYSIS AND FINDINGS

4.1 INTRODUCTION

With the preceding chapter outlaying the research methodology adopted for the
research understudy, this chapter proceeds to analyse the huge data collected

49
thereon. This is being done with the view to contribute valid and robust findings
to the existing body of knowledge in this field of research. The qualitative data
analytical method employed was first introduced. Justification for the selection
was explained and afterwards reasons for the rejections of similar qualitative
analytical tool were itemized. Thematic analysis is the method being employed
and Braun and Clarke (2006) six-staged framework for this analysis was
borrowed. Finally, the chapter present the understudy analysis in consonance
with the dictates of this structure.

4.2 THE DATA ANALYTICAL METHOD: THEMATIC ANALYSIS AND

JUSTIFICATION FOR ITS SELECTION

A thematic analytical framework was adapted in analysing collected data. Braun

and Clarke (2006) defined thematic analysis as a method wherein the researcher
seeks to identify, analyse and report patterns (themes) within gathered data;
though sometimes on a further path interpretation of some area of the research
subjected are involved (Boyatzis, 1998 cited in Braun and Clarke, 2006).
Moreover, the researcher deemed this method appropriate considering its
theoretical freedom and flexibility it affords towards providing a rich and detailed
account of data, this is critical pertaining to the researcher's aim of an in-depth
exploratory and explanatory analysis of gathered data which obviously were
acquired from semi-structured instrument. It will be further acknowledged that it
is not the primary concern of this research study to propound theories or test
hypothesis which suggests that an analytical method that affords sifting,
charting, sorting and explaining data as they identify with key issues and themes
being discussed during the data collection process be adopted (Tuckett 2005).
Bryman and Burgess (2004) upheld that the framework for this method of
analysis is based on not only systematic and disciplined approach but essentially
as well on detecting, defining, explaining and exploring issues of which are
among the basic tenets of qualitative research.

Furthermore, discovering themes and concepts embedded throughout data is

intrinsic in data analysis (Rubin and Rubin, 1995), it should be noted the
researcher intends employing an inductive theoretical thematic approach in
identifying these themes within collated data as opposed to theoretical thematic
approach (Braun and Clarke, 2006). This is a data-driven form of thematic
analysis (Patton, 1990). Bryman and Burgess (2004) claimed this framework
enables the researcher to reconsider and rework on the unwieldy data collected
and ideas. Braun and Clarke (2006) suggested a six-phase systematic set-up of
analytical process which includes; familiarization, initial coding, identifying
themes, reviewing theme, defining and naming themes, and
reporting/interpreting. This final stage is where the core objectives of the
qualitative analysis are addressed.

4.3 DRAWBACKS OF THEMATIC ANALYSIS

50
In criticism to its flexibility, it is being queried in some instances as an 'anything
goes' form of qualitative analysis where there is an absence of a clear and
concise guideline to performing thematic analysis (Antaki et al., 2002). In
evading the creating of such contraption in the process of analysis, the
researcher adhered strictly to the six- step systematic framework suggested by
Braun and Clarke (2006) a very similar structure to the five-stage system (of
familiarization, identifying a thematic framework, indexing, charting, mapping
and interpretation) recommended by Bryman and Burgess (2004). Boyatzis
(1998) and, Ryan and Bernard (2000) also criticized that although thematic
analysis is widely used it is not a specific qualitative analysis tool but one that is
apply across and within major analytic methods. However, Braun and Clarke
(2006) contested that this is because thematic analysis is poorly demarcated and
rarely acknowledged and as a foundational qualitative analysis method should
be seen as an approach in its own right.

4.4 WHY OTHER METHODS WERE NOT FOUND APPROPRIATE

Arguably, there exist some other applicable analytical methods fitting into the
phenomenological philosophy the study has adopted. In this section, the
researcher attempts to explain the reasons for their non-inclusion in the data
analysis process. The aim of this analysis process employed is to describe
patterns within collated data and a few other available methods can help
accomplish this too, namely; grounded theory, narrative analysis, interpretative
phenomenological analysis (IPA; eg, Smith and Osborn, 2003) and discourse
analysis (DA; eg, Willig, 2003).

Grounded theory is an equally reliable qualitative analytical tool with main goal
of establishing a plausible and relevant theory of the phenomena under
investigation based in the data (McLeod, 2001). This is clearly not the intention
of this study. Narrative analysis also a well-adapted tool of phenomenological
epistemology, promotes highly detailed data collection process which gives
priority to experience and subjectivity in investigating the understudy
phenomenon (Smith and Osborn, 2003). The basic tenets of narrative analysis
evidently placed it uses outside the time and cost limits of this research.
Moreover, an experiential analysis in this form of the subject matter of this
research might subject it to a researcher-participant bias conflict. In similar
fashion IPA was jettisoned because it provided for similar experience primacy
and detailed analysis in understanding people's daily orientation of reality. The
researcher dropped the implementation of discourse/template analysis because
of the highly sophisticated skill largely involved (Potter, 1997) and because of
usually unnecessary complications that arise during a combined deductive and
inductive analysis of data the method employs (Bryman and Burgess, 2004).
Besides, the present research pursues a purely inductive analysis.

In conclusion, thematic analysis is employable as a method that both distinctly

image a phenomenon and critically dissect such phenomenon's superficiality and
therefore it differs from this other analytical methods because:
51
 "Thematic analysis is not wedded to any pre-existing theoretical
framework, and therefore it can be used within different theoretical
frameworks (although not all), and can be used to do different things
within them. Thematic analysis can be an essentialist or realist method,
which reports experiences, meanings and the reality of participants, or it
can be a constructionist method, which examines the ways in which
events, realities, meanings, experiences and so on are the effects of a
range of discourses operating within society. It can also be a ‘contextualist’
method, sitting between the two poles of essentialism and
constructionism, and characterized by theories, such as critical realism,
which acknowledge the ways individuals make meaning of their
experience, and, in turn, the ways the broader social context impinges on
those meanings, while retaining focus on the material and other limits of
‘reality’". Braun and Clarke (2006, 81)

4.5 CATEGORIZING THE THEMES

After necessary transcription of interview data has been done and returned
questionnaires has been properly classified the researcher initiated Braun and
Clarke (2006) suggested six-stage framework of thematic analytical process.
Initially, concrete efforts were geared towards getting an adequate hold of the
length and breadth of the content of available data. The researcher immersed
himself in reading and re-reading, and reviewing of the data while noting
recurring key ideas and potential themes (Patton, 2002; Tuckett, 2005). The
initial list of ideas generated echoes identifiable conclusions in related literature.
This is the first step which is termed familiarizing. However, it will be
acknowledged that the concept of customer adoption of internet banking is a
converging reference in recent banking literature claiming various potential
influence thereon with the deploying of theories like consumer behaviour in mass
media choice and use, gratification theories, innovation diffusion, technology
acceptance, online consumer behaviour, online service adoption and service
switching costs (Lichtenstein and Williamson, 2006) in understanding this
phenomenon. The researcher only acknowledge insufficient maturity of
systematic research into the factors influencing banks to develop E-banking
services (Daniel, 1999), which is the prime focus of this research.

Hence, as the subject matter of the investigation is still an evolving one, it was
an herculean challenge sifting and sorting through the data and listed ideas. It
would have been logical to assess the individual bearing or effect of already
identified customer adoption factors on bank's deployment process of E-banking.
But this is a pursuit in causality which is beyond the interest and orientation of
this research. Afterwards, the researcher took upon the next step in Braun and
Clarke (2006) adapted framework and proceeded to code the listed ideas. Two
broad code categorizations were produced. In sifting and sorting through collated
data, it was noted that from both customer and banker's perspectives everything
about E-banking services were weighed on either challenge or benefit scale.
Becoming awareness of new E-banking services, understanding the process of
use, inherent bias about innovations, switching service cost among others are
challenges customers addressed while speed, time saving, flexibility etc. were

52
some of the perceived benefits of this new service channel. Similarly, on the
banker's side challenges comes in form of cost of deploying and not deploying,
re-orientating customers, redundancy of some initial capital etc. It is appreciable
that these identified codes permeate the whole content of collected data when
rematch with extracted data. These codes were further broken down into sub-
divisions. For examples, challenges inherent in the product, challenges intrinsic
in customers' orientation, challenges intrinsic in bank's product presentation,
understood benefits, misconstrue benefits etc.

Hereafter, is the stage where the key themes in the analysis process were
identified which deals with the understanding the interconnection between listed
ideas, created codes, proposed overarching themes and sub-themes (Braun and
Clarke, 2006). Collected extracted of data were categorized into three main
themes and a few other extracts which fell into none of the three themes were
labelled under miscellaneous. Hence, as suggested in the adapted framework, a
critical refinement of these themes was done to assess the availability of
sufficient support data. Subsequently, these major themes were called up as
adequate associated data were referenced respectively (Bryman and Burgess
2004). Table 1 below presented the composition of these major themes.

TABLE 1

MAJOR THEMES PERCEIVED KEY ISSUES

INFLUENCE
Cost Anticipated cost of
adoption on both parts of
the customer and banker
is a paramount decider
Customer’s Orientation Whether perceived or
anticipated, the
orientation of customers
is a prime influence on E-
banking deployment.
Competition This is fore-front driving
motivation for banks
• Switching cost
• Internet service
cost
• Deployment cost
• Cost efficiency
• Awareness
• Misconceptions
• Understanding of
usability
• Socio-(cultural &
economic) bias and
Demographic bias
• Customer retention
• Wider market
share
• Branding

In continuation of the process, through a stage Braun and Clarke (2005) tagged
'define and refine' the fifth step of defining and naming themes, the researcher
identified some more sub-themes but can only find data extracts to sufficiently
defend two of such permeating theme. It is should be noted that these themes
surfaced in different contentions by the respondents themselves throughout the
entire process. These two permeating theme are itemized here below in Table 2
with relevant key issues respectively.

53
Table 2

PERMEATED THEMES PERCEIVED KEY ISSUES

CONSIDERATIONS
Security Customers acknowledge • Privacy
the concerns over • Trust
inherent perceived risk • Assurance
in internet banking
Service Interface The generality of • Interactive
customers prefers a • User-friend
guided-service system to
the prevalent self-service
system in E-banking

At this junction it is imperative to re-present the researcher's theoretical walk

from research question through the research methodology employed to the data
interpretation approach taken. As already noted this research draw upon case
study strategy in its investigation of the understudy phenomenon employing
multiple sources of evidence and information; detailed study of related literature,
administering questionnaire and conducting semi-structured interviews. In its
analysis, the research made use of an inductive thematic analysis which consists
of identifying, analysing and reporting patterns or themes within data given by
respondents. In this process, the original research questions served as guided in
sieving necessary data, understanding the implicit correlations between collated
data and extracting relevant data. Corroborated by data gathered from the
questionnaire, the interviews were held as the main research instrument.
Interviews of the ten participants were reported; five customers and five
bankers. Effort was made that respondents' submissions were objectively
reflected in data being analysed. Braun and Clarke (2006) six-step suggested
framework for thematic analysis was stringently followed in order to forestall
possible researcher's bias and give more validity to the universal credibility of
the analysis.

Influences on the adoption of E-banking have been the prevailing spotlight in

recent banking researches and generated significant controversies and
conflicting conclusions in the last two decades. The analysis in this research work
reflects on the impact of customers perceptions on E-banking adoption process
of banks. It is an exploratory analysis of the bearings of customers' acceptance
on the deployment of electronic services by the banks. It was identified during
the data collation process that different electronic banking services have
different customers' adoption pattern and different deployment pattern by
banks. The interrelationship between these two patterns can be discussed under
cost, customer's orientation and competition considerations of electronic banking
services. Hence, the analysis is scheduled under these themes.

4.5.1 COST

The theme of cost as an impact on adoption pattern is a convoluted one. The

intricacies of the perceptions of cost benefits and cost challenges on both sides
54
were delicate to unravel. Even though, the sensitivity of the factor in the overall
makeup of the phenomenon, a critical dissection of it has eluded the searchlight
of most existing related researches. Customers weigh the cost implication of the
accepting this new channel of distribution on far diverse levels. Switching cost is
the most primary of all these considerations. The customer sees switching
service channel requiring much time and effort; confirming the proposition of
consumer behaviour theorists (Wu, 2007). On a similar scale, the other
paramount cost challenge seen by this customer is of the associated cost of
using this new channel; electronic banking. The customers apprehended the
inherent cost of internet usage and online bank charges which are included in
the normal transaction cost. While, some customers incorporated the cost of
having internet ready devices like PC, mobile phone etc. A 66 year-old retired
respondent upheld such reflections in his view:

We are made to believe internet banking services are cost saving but my son you
get charged for the internet you use and you get charged for the transaction
process online. How is that a cheaper alternative to face-to-face services? Even
included is the fact that you have got to have either a PC or some other internet
devices to do these transactions. This also is a cost. To make matters worse is
their idea of discouraging us from the normal banking services we are used to as
some services at the banks now comes with a premium charge.

The cost considerations for the younger, educated and relative high earning
youth is slightly different, although, the low earners associated with the
generality in this consideration. A typical customer of such background is a 31-
year chemical engineer. In his view:

Of course, we all know about these charges and perhaps some other related
charges but in my opinion they are minimal compared to the time and effort
associated with visiting a branch and sometimes enduring some queues...and, for
example, the cost you incur on you internet services aren’t only for internet
banking.

However, for the banks the cost implications comes in a lot of dimensions. There
is the initial cost of deploying the technology (facilities) to support this channel of
distribution. The further related costs are quite huge and fundamental to this is
the cost of re-orientating both staffs and customers, and this cost have been a
continual and recurrent one in the face of ever changing technology and ever
evolving bank electronic products. Connected with this is the marketing and
advertisement costs, and other hidden competition costs. Although, all these
cost challenges, the bankers can still lay claims to substantial cost efficiencies.
These cost benefits, majorly emanating from increased speed in transaction
processing, have come in form of lower overheads associated with branch and
staff costs, lower unit cost per transaction, higher volume of transactions being
processed while the others includes serving wider geographical reach at lower
cost, efficient branding cost etc. In response to the question of costs bearing on
E-banking adoption, a Barclays high management staff opined:

The emergence of electronic banking has introduced at new level of complexity in

the overall banking cost-benefit analysis. The capital and recurrent costs
55
 associated with internet banking requires a fair degree of economic of scale as
banks do not plan to recoup these costs in the short run. I think this attested to
the reason why the average sized banks and building societies were at first
reluctant to fully embrace this mode of banking...our overall view of technology
cost is a long-run one. Our internet banking products and services are well
categorized and the related costs are balance thereon respectively. It is an
underlining fact that cost is critical to us in the development of any new electronic
banking product or service. Development cost, marketing cost, staff training cost
are some of the crucial considerations.

Certainly, being on the internet has helped banks to reduce transactions’ costs,
improve their market image and better respond to market's demand (Kerem,
2003). Jeevan (2000, cited in Mia et al. 2007) agreed that this has helped banks
to offer low-cost, high value-added financial services. However, Kerem (2003)
held that in switching service channels customers demand a minimum relative
advantage; a better perception over the pre-existing channel. Rayport and
Sviokla (1994,1995 cited in Daniel 1999) argued that in bank's pricing of
electronic services such charges should be based on value and not cost because
most of these electronic services have little marginal cost.

4.5.2 CUSTOMERS’ ORIENTATION

Customer orientation of electronic banking can be viewed from four main

perspectives. It can be argued in term of awareness i.e. knowing of the
availability of not just electronic banking but of some individual services.
Similarly, it can be of misconception or suggested public perception of some
products, for example, the hot topic of hidden charges with credit cards. From
another angle, it can be seen as customer individual prejudice born of soci0-
cultural or socio-economic or demographical bias. Lastly, the issue of customer
orientation can be assessed from the acknowledgement that some of these
electronic services demand effort to learn and employ by individual customers.
This is highly prevalent on the part of senior citizens. The assertions of four
respondents are sampled here enumerating these challenges.

A 47-year old teacher acknowledged:

I don't think this is a misconception. I believe all these banks have ways of
pinching little, little pence out of us over and above related charges especially for
using a lot of their credit services. I have not used one and I will not.

A 69-year old woman who claimed to have been a life-long customer submitted:

You go to the bank these days; they just push bouquets of products and services
into your face and also on the internet. Honestly, i don't really know of any except
for the ATM and doing some few transactions online; which are complicated to
learn. I think for some of my friends it is harder (she laughed)It was my
granddaughter who some few weeks ago was trying to explain to me how to
assess my bank account on my phone.

A senior bank official commented on this:

56
 First and foremost, a product is needless if the generality of customers do not
understand its usability and can apply it. For us here consumer knowledge is
vital...we have always been pretty aggressive in marketing our products and
services so customer awareness is not a strong contention for us. Detailed
information has always been provided along with packaging of such products and
services. I believe all banks hold the trust to provide details 0f all required
implications of acquiring a product or service. Customers should endeavour to
read carefully all these details, once to0 often we throw away these details and
they come back to hurt. Most of these public claims are unfounded.

A 33-year old mid-level staff experienced in customer services operations of

Barclays online banking

In deploying most of these electronic services we have been a little more careful
in respect of acceptance by different categories of customers. Some of the
products and services were first tested with high earning customers while some
are given youthful appeal being they are more sensitive to technological changes.
Generally, I believe customers associate with different products for several
reasons some can be as emphatic as youthful themes while the other as
superficial as a belief system...the knowledge of these have helped guide our
products and services development and deployment over the years.

Shoemaker (1971 cited in Alam et al.,2009) presented that before accepting a

new service or product the customer go through “a series of process in
knowledge, conviction, decision and confirmation” before they are ready to
adopt a new product or service. Products simplicity or an innovation's ease of
use have been upheld by many researchers as paramount in adoption process
both for the customers and the banks (Cooper, 1997; Dover, 1998; Daniel, 1999;
Mols, 2000). Summarily, Sathye (1999) held that most customers are really
unaware of electronic banking services and the unique benefits they offer, and O'
Connell (1996) concluded that lack of knowledge about the availability of such
internet services explains for the slow growth of internet banking.

4.5.3 COMPETITION

All other driving factors for internet banking adoption by the banks converged on
the singular motivating factor of competition. This innovation has simply
redefined the competing arena and brought along new tangible tools to propel
this competition. We have seen internet-only banks arising because they believe
this is a formidable niche in the market place. Banks have committed significant
capital into enhancing their technological interface and infrastructure. Mishra
(2001 cited in Mai et al., 2007) argued that internet has provided a levelled
playing fields for the banks with increased customers' bargaining power,
dropping switching cost and difficult in retaining customer loyalties. A high level
management staff responding to this the question of primary force in driving
internet banking adoption submitted:

Competition can be defined as the race to retain the loyalty of existing customers
and gain the acceptance of new ones. Ever before the advent of internet banking,
this has been the focus of our bank and I believe all banks. The internet only
came to present us a more formidable tool to prosecute this pursuit and so far
57
 internet banking has redefined that quest and keeps redefining it. I believe
Barclays will keep evolving with this ever-changing technology to stay ahead of
the competition in providing the best products and services for our prestigious
customers world-wide.

An average customer acknowledged he or she is the focus of this heated-

competition but his or her concern is the cost of such competition which he or
she (the customer) invariably pays for. A 24-year old student captured this
concern when he posited:

I believe the banks keep deploying all these technological facilities in competition
for your money and my money. Someone has got to pay for all these definitely
you.

Mia et al. (2007) highlighted the main ingredients of the new competitive
environment for banks as including changing consumer needs and perceptions,
globalisation, technological innovations, and competition from non-banking
entities. In final analysis, it is obvious that electronic banking affords banks the
leverages of maintaining competition, saving costs, mass customization, and
enhances marketing and communication activities in their pursuit to maintain
and attract customers (Daniel and Storey, 1997; Mols, 2000). However, market-
led innovations like E-banking require a deep understanding of "both current
customer needs and behaviour, and the offerings of competitors"(Daniel, 1999
74).

4.6 PERMEATED THEMES

4.6.1 SECURITY

A recurring claim among respondent is the issue of erosion of privacy. The

participants highlighted that the electronic channel of service has denied them
significant level of privacy associated with the pre-existing face-to-face servicing.
Customers conduct most of their electronic transaction on the internet within
public domain. Most customers attested to using office internet majorly.
Associated with their security concerns are the perceived risks of fraud, phishing
among others. They are apprehensive of these risks when using these electronic
banking products on other sites apart from the banks. They acknowledged high
degree of safety with banks' sites. The 66-year pensioner summarized this fear:

Gone are the days of signatures, it is now all about pins and passes. Then all
things are done in privacy; it is only you and your bankers and lots of papers.
Those are documents containing your transactional information. But now all the
information are held in one card with a pin code. A loss of the pin code and you
are in crisis. These days the transactions can be done anywhere within public
arena...If you use a PC outside the home you have got to be very careful to clear
off your data before you leave who knows who will be using the PC next.

Consumer concern of security is also top priority for the banks in deploying
these service channels. A high level manager submitted:

58
 We are apprehensive of the fact that security is a prime consideration for most
customers in adopting electronic transaction channels and for banks as well this is
a priority in deploying all these online banking services. On the whole, a critical
fraction of the investment made into implementing these electronic service
channels goes into guaranteeing security of transaction. Banking is purely an
information oriented service industry dealing in a whole lot of personal
information and it is imperative that the data are well secured.

Cristina et al. (2002, 1540) held that "E-banking increases security risks,
potentially exposing hitherto isolated systems to open and risky environments".
Although, the critical customers’ concern about safety, trust and privacy
ironically this is not a major deterrent in their use of electronic banking services.
Lichtenstein and Williamson (2006, 58) asserted that users have taken it upon
themselves to manage this risk " through a strategy of personal belief in
improved institutional and technological information security levels, a sense of
hope and risk acceptance, and a carefully developed personal protection
strategy including vigilance and taking some responsibility for information
security".

4.6.2 SERVICE INTERFACE

4.7 SUMMARY

This chapter opened with a detailed presentation of the data analytical tool
employed and its justifications. Thematic analysis was the method used. Reasons
for dropping other methods were discussed. Hereafter, the framework for
analysis was presented and the researcher proceeded accordingly. Major themes
and permeated themes categorized during data coding process were the main
focus of the chapter and therefore discussed. The next chapter present the
conclusions here arising.

CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 INTRODUCTION

This chapter discussed the finding, conclusions and recommendations

consequent upon analysis made in the preceding chapter. Also, the researcher
endeavour to represent the linkage between empirical data, and research aims
and objectives. Implication the study holds for management and areas of further
research were itemized.

59
5.2 EVALUATION OF THE FINDINGS

The critical impact of customer perception on bank's deployment of E-banking is

much more an highly subjective phenomenon than an empirical one. A few
decades ago banks that forayed into electronic bank mainly did so in anticipation
of consumer demands and were taken as treading highly risky path. This was
partly due to the huge initial cost outlay involved and partly due to the
uncertainty about customer's willingness to conduct financial transactions in
such an open manner. Irresistibly, consumers cannot deny the dynamic flexibility
the internet has brought to bear on other sides of their living consequently the
allures of E-commerce was taken as a practically exploitable one. Gradually,
other complex electronic banking services evolve as customer acceptance grew,
although at a low pace at first but the proliferation of financial products and
services online since the turn of the century highlighted an increasing
acceptance on the part of the customer. It is simple to view the whole of E-
banking as one unit and thereon interpret the impact customers’ perception
thereof. This research affirms that is a convoluted view; as electronic banking
offers a broad array of products and customers react to each genre of product or
service differently. Consequently, customers' attitudes dictate the length of such
product's life cycle. Holistically, this summed up to affect banks adoption pattern
of electronic banking.

Existing literature has helped confirmed the factors influence customer's

perception, investigating the bearing of this perception on bank's adoption of E-
banking is the focus of this research. This researcher found that among other
factors the customer's orientation about this innovation, his perception of cost
and bank's competitive attitude are the three driving force in this adoption
process. The cost of taking to this new service channel for the customer and the
cost of deploying such distribution channel for the banks are key considerations.
The customer's orientation about such products or services blatantly spells the
success of such product or service. That the internet has redefined the market
place is an incontestable fact and therefore the nature of competition. This has
not only presented a level playing ground for existing competitors but as well
lower the encumbrance for new entrants. In further considerations, security and
service interface were found as factors influencing customer's taste for these
products. Even in the face of this technological change they strongly dictate
customer loyalty hence impacting the adoption process.

60
The findings on cost perspective buttressed Alam et al. (2009) submission of cost
having a singular influence on E-banking adoption. The view of cost by both
customer and the bank dictates both the development and adoption of electronic
banking products and services. The price of switching to alternative channel of
service was core the consumer's cost considerations. This cost is primarily seen
in terms of time and effort taken in learning the use of new products or services.
In this process, the learning curve for most customers is not really steep most
especially for the less-literature and the senior citizens. This group of customers
highlighted the complexity of most of these electronic banking products and
services. Burnham et al. (2003) agreed to the strong influence of switching cost
which they identified in three groups, namely; procedural, financial and
relational. On a related hand, some of the respondents acknowledged the
additional cost of internet service usage and online bank charges in performing
these electronic transactions. A few of the respondents also considered that the
huge cost of competition among banks is priced in on these services. On the part
of the bank, the cost orientation is in the divisions of initial investment costs,
operational costs and utilisation costs (Rothwell and Gardiner, 1984 cited in Wu,
2005). The enormous initial capital outlay is a hurdle that demands a long-term
commitment before returns are recouped. This cost implications was once a
barrier deterring smaller banks and building societies but the present redefinition
of market place has enforced this on them. More importantly, banks' view is
more of cost efficiency. Reduce branch network, sizeable number of staff, lower
transactional unit cost, are a few of cost saving advantages for banks.

Rogers and Shoemaker (1971) pointed out that the customer passes through
different phases in knowledge conviction and decision making prior to finally
adopting a product or service. This is customer orientation. Customer orientation
was also a strong influence the study found to have direct bearing on the
adoption of electronic banking products. Customers' orientation determines the
acceptance of E-banking products and services, and this begins from their aware
of the availability and use of such products. Upon being aware of these products,
customers' perspectives of them which are inherently prejudices play a bigger
role. These biases originate from socio-cultural beliefs or socio-economic
afflictions or demographic inclinations. While, a high earning, well-educated
young man is an early adopter of such innovations like electronic banking, an old
retired semi-literate woman of a minority orientation is a last stage adopter.
Banks weigh the demarcations within and tendencies of customers' orientations
61
in the deployment of various electronic banking products. Banks have always
been known to test the acceptance of new electronic banking products with
either their affluent customers or the youthful ones. This therefore determines
the adoption of such products or services.

Competition is seen as the forefront and the war front of the adoption process. It
is race to capture tangible influence on the new 'market space', to retain the
loyalty of existing customers and gain the acceptance of new ones, and primarily
to maintain their competitive edges. Electronic banking has gone from being
within the exclusive domain of a privileged few into the arena for the common
good. Banks that were late adopted have had to pay for this heavily in terms of
loss of customers' patronage and loyalty. Banks accepted that they have to
provide all necessary conveniences associated with E-banking for their
customers in order to remain competitive (Daniel, 1999). The degree of
competition internet banking has brought to bear on banks has rendered a level
playing ground, an ease entry, volatile customer loyalty etc. although at a
relative high expense to smaller financial institutions but quite affordable for
quasi- (or non-) financial institutions with interest to offer electronic banking
products. Byoung-Min et al, (2005) concluded that financial institutions are
exerting competitive power in the market place by affiliating with other financial
companies, downsizing their physical facilities, and expanding their service
scope.

Lastly, the issues of security of transactions and service interface were also
strong considerations for customers in taking up internet banking services. The
lack of privacy, the fear of fraud, issue of safety in conducting most of these
transactions that are now done within public domain are innate concerns for
customers. Customer information that were once filed away in the comfort of
bank's cabinets, now exist in codes loaded on electronic cards and the internet
with the customers now sharing the responsibility of safe-keeping. These
concerns are fundamentally issues associated with the internet itself which is the
backbone for these electronic banking products. While, customers easily perform
online banking transactions like balance inquiries, viewing transaction report
summaries and often assessing saving and current account facilities they are
less inclined to perform more sensitive transactions like personal investment,
loan and mortgage services (Ainin et al., 2005). Interactivity is also of concern to
the customers most especially the senior citizens and less-literate customers.

62
The quality of personal contact and being guided through a transaction process
are attested as the singular relative advantages of traditional banking above
electronic banking services. Customers demand a user-friendly service both on
the internet and at the bank's bank. A bank with a user-friendly and highly
interactive internet site has a considerable competitive advantage. Clearly, to
keep growing customers' demands for electronic banking products, qualitative
improvements are needed to be made by the banks to address these customers'
concerns.

5.3 LINKING THE EMPIRICAL DATA TO THE RESEARCH AIMS AND

OBJECTIVES

It is imperative herein to consider the findings of this research in the light of

answers they have provided for the research questions raised and contributions
to existing body of knowledge on the subject matter. The study set out with the
following four objectives:
1. To review existing literature on customers' behaviour towards electronic
banking adoption process.
2. To identify factors influencing customers' adoption of electronic banking
services.
3. To appraise customers' acceptance bearing on electronic banking
deployment
4. To suggest a better perspective to banks on understanding customers'
acceptance and their deployment of electronic banking services.
Effort is made this section, to present the considerations for the first three
objectives while the last objective will be summarily looked into separately under
recommendations.

5.3.1 OBJECTIVE ONE: TO REVIEW EXISTING LITERATURE ON

CUSTOMERS' BEHAVIOUR TOWARDS ELECTRONIC BANKING
ADOPTION PROCESS

In chapter two concerted effort was made in critically reviewing existing

literature on the subject matter of this research, it was evident that numerous
studies on this course have concentrated on theories of customers' adoption and
factors influencing solely customer adoption pattern. Theory of Reasoned Action
(TRA) (Ajzen and Fishbein, 1975), theory of planned behaviour (TPB) (Ajzen,
1985), technology acceptance model (TAM) theory (Davis, 1989) and diffusion of

63
innovation theory (Rogers, 1962) are among the most extensively employed in
related literature (Al-Somali, 2008). Theories like consumer behaviour in mass
media choice and use, gratification theories; online consumer behaviour, online
service adoption and service switching costs have also been exploited in
interpreting this phenomenon (Lichtenstein and Williamson, 2006). An array of
customers’ attributes has been propounded either on individual consideration or
corporate understanding to be influential as well. Awareness, accessibility,
reluctant to change, service cost, ease of use and trust concerns (Alam et al.,
2009) are a few of the factors permeating the findings of most literature.
However, negligible investigation has paid to the impact of these factors on the
bank's orientation in deploying electronic banking product. This is the angle this
present study exploited in contributing to electronic banking literature. Mols et
al. (1999) claimed that customer's acceptance is a greater determinant of the
diffusion of electronic banking than by the seller offerings.

5.3.2 OBJECTIVE TWO: TO IDENTIFY FACTORS INFLUENCING

CUSTOMERS' ADOPTION OF ELECTRONIC BANKING SERVICES.

The empirical materials generated from the questionnaire administered and

interviews conducted shed more lights on the factors customers considered
paramount in their adoption of electronic banking services. Within the compound
of factors existing literature has highlighted respondents agreed that cost,
security and service interface were priority in their considerations. Cost was
found be of singular significance. Switching price, online service charges,
internet usage charges, time and effort required to understand the application of
these innovations are the critical cost concerns of customers in adopting
electronic channel of service. The issue of privacy, trust and safety of transaction
in a levelled and open world of internet were security considerations registered
by participants. The investigation also revealed user-friendliness and interactivity
that have replaced the personal contact advantage of traditional banking are
influential in customers' acceptance of electronic banking.

5.3.3. OBJECTIVE THREE: TO APPRAISE CUSTOMERS' ACCEPTANCE

BEARING ON ELECTRONIC BANKING DEPLOYMENT

The critical aim of this research is evaluation the impact of customers'

acceptance on the deployment process of electronic services by the banks. The
pivot drivers of bank's adoption pattern were found to be cost considerations by

64
both customers and banks, customers' orientation of such electronic banking
products and the quest to maintain competitive advantage in the 'market space'.
Both customers and banks were found to employ a cost-benefit attitude in
electronic banking adoption. Although, the encumbrance of the huge capital
requirement in the deployment of electronic-banking technological
infrastructure, cost efficiency offered by internet banking by increase service
speed, high transaction turnover, lower transaction unit cost, lower overhead
cost due to reduced needed branches and employees, wider geographical
service were assessed as competitive advantages in banks' perception. Once
banks can forecast the profitability of a new electronic banking product they are
set to roll when they can assess customers' cost perceptions and orientation of
such product or service. As aforementioned Switching price, online service
charges, internet usage charges, time and effort were the critical consumer cost
considerations.

Customers' orientations also spell their identifying with a product or not. The
nature of this orientation can be demographic, socio-economic or socio-cultural.
Youths, educated customers and high earning ones are acknowledged as early
adopter and in essence their disapproval of any newly introduced electronic
banking product spells failure of such product. Although, factors like minority
affiliations, age are known influence in the adoption process they can be robustly
qualified. Competition for customer loyalty in the redefined domain of internet
market place is also found a paramount driver of electronic banking adoption
process. And, it is evident that the electronic banking arena will remain
competitive in the consideration of ever evolving technological appeals,
customers’ tastes and orientation and liberalization of the financial sphere.

Finally, security concerns and service interface were found of lesser influence but
equal consideration. The customers want guarantees of trust and safety, a
guided assistance and user friendliness in conduct of transactions. Though, the
advantage of privacy might be somewhat elusive this internet era yet the
customer will prefer a degree of exclusivity as well as interactivity in service
delivery. In a perspective, all these are prices the customer and bank associate
with internet banking and for the acceptance of this innovation and subsequent
products to be viable form customers' perception they must be reasonably
priced relative to substitute channel of delivery or products (Willis Report, 1997
cited in Alam et al., 2009).

65
5.4 IMPLICATIONS TO MANAGEMENT

It will be acknowledged that Barclays bank was taken as the case study for this
study. It is a bank with a strong brand presence online worldwide, known for
pioneering a number of technological innovations in banking. Barclays' bank
offers a large bouquet of online products and services which afford some
robustness for this study in generalising for the electronic banking industry.
Nevertheless, in the cause of investigation respondents highlighted some
reservations, opinions and observations which the researcher endeavour to
explain in this section in the light of the implications they hold for its
management.

5.4.1

Though existing research has suggested that various factors influencing

customers' perception it should be acknowledged that this researched focused
on the impact of those factors in the banking deployment process of electronic
banking. In this quest, this study found that the five key impact makers in this
phenomenon ar cost, customer orientation, competition, security and service
interface. The researcher is of the opinion that these five core considerations will
invariably aid decision making process about the development and adoption of
electronic banking products by management. Management should endeavour to
focus on these factors as fundamentals.

5.4.2 SERVICE CHARGES

It is highly imperative for management to make explicit information about the

cost and benefits of individual product and service clear to existing and potential
customers. To existing customers because of the frequent cases of not having a
prior thorough knowledge of the cost implications of some product or services
they have used and to potential customers so as to clear some existing public
and individual misconception about charges deductions for services used. It is
known that the bank provide detail caveat information along with this products
and services online or whereon they are assess. Customers see this usually long
prose of product information as an epistle to excuse the bank in case of some
liability charge. Effort should be made to provide this information in a precise
and concise manner and to encourage customers to read up for their own good.

66
5.5 RECOMMENDATIONS

In the light of the findings of this research suggestion of feasible improvements

that can be by banks in their adoption of electronic banking products or services
are obvious. Here in this section, the fourth research objective is duly addressed
which as aforementioned is to suggest a better perspective to banks on
understanding customers' acceptance and their deployment of electronic
banking services.

5.5.1 DEPLOYING NEW ELECTRONIC BANKING PRODUCTS ON THE

TRIPOD OF COST, SECURITY AND SERVICE INTERFACE

There existing the inherent temptation to deploy a new electronic banking

products ahead of the competition without due considerations to the prime
factors driving customers' demand for a new innovation. The findings of this
research held that the customers' primary perception about such products stem
from their considerations of cost, security and service interface. Cost implication
should be quantitatively weighed not only on the part of the banks but as well on
view scale of the targeted individual customers. Customers also demand the
guarantee that their personal information is secured as regard the product
usability in the open world of the internet. It is acknowledgeable that in the era
of internet both the organization and the customer share the responsibility for
the protection of such information but the customer wants more covering like
lock-and-key safekeeping traditional banking offers. Also, a number of these
electronic transaction processes are viewed as complicated. In traditional
banking most of steps required in such transaction are either done by a bank
clerk or the customer is being guide by personal contact but in the modern arena
of internet banking it has become a self-serviced process. Customers still itch for
the sense of interactivity offered by traditional banking along with the welcoming
service orientation. A few banks are trying to replicate this experience online but
it is core consideration on the part of the customer.

5.5.2 QUALITATIVE CUSTOMER ORIENTATION

The flexibility provided by the internet makes it much easier for banks to
develop, brand and market new products at a faster rate, and lesser effort and
cost. This is majorly done without proper customer orientation about the new
product. Awareness of the availability of a product differ strongly from the
awareness of its usability, this later factor in most instances is lacking. Banks
67
should beware that the customer has lots and lots of products splashed into their
faces daily both on- and off-line and therefore should employ more of specific or
target-oriented awareness campaign. In such campaigns, misconceptions about
products and their benefits and costs should be adequately addressed.

5.5.3 PLACING CUSTOMER AND COST IMPLICATION TO CUSTOMERS

AHEAD OF THE COMPETITION

The competition is fiery these days and it is even much weirder online most
especially as traditionally non-banking institutions are entering the electronic
banking sphere. Indeed, the race is for customer loyalty of which traditionally the
interests and wants of the customer were placed in the forefront but recently the
competition has been about gaining a relative advantage at all cost. The
question is who bears this cost? These costs are shifted to the customers in the
final analysis which is driving up the lower cost once associated with electronic
transactions. It is imperative to the banks to fight fair at bearable cost because
high price on electronic transactions might prove counterproductive to the
competition for customer loyalty.

5.6 CONCLUSION

Existing related literature has propounded numbers factors influencing

customer's perception of electronic banking product meanwhile this research has
found cost perspective, customer orientation about these products and
competition for customer loyalty has the core driving force behind the adoption
of electronic banking both for the customer and bank. Customers seek to
understand the cost implications of the products or service they are using and it
alternative and on another hand seem not to be aware of the availability or
usability of some services while the banks keep heating up the competitive
grounds at higher cost consequences. As suggested by Dainel (1999) banks
should attempt a fair value pricing of their electronic services as ordinarily
electronic services incur a lower marginal cost.

Bank should also be aware that through their existing a holistic view of electronic
banking as a whole but the underpinning element is an understanding of

68
customer perceptions of individual electronic banking product or service. New
electronic banking products and services should be deployed within this
orientation while adequate provision is made for customers' concerns of security
of transaction and interactivity of electronic services. Though, the latter two
factors were not found to have robust validity but the researcher suggests that
they might serve as less expensive relative advantage in the increasingly heated
competition the banks are subjected to. Conclusively, this study confirms Daniel
(1999) submission that banks' adoption of electronic banking is "led by a
corporate vision of the future in which the banking market becomes even more
competitive, while consumers demand greater accessibility, functionality and
service at a lower price".

5.7 FURTHER RESEARCH DIRECTIONS

It will be acknowledged that in the existing body of knowledge on this subject

matter has focused mainly on the variable of customer perception in
investigating this phenomenon. The objectives of this study tend towards the
other variable of electronic banking adoption by the banks. The researcher would
suggest further research into this direction of the nexus of customer-bank
perceptions and adoption of electronic banking on a broader scale than a case-
study approach. This research has borrowed a phenomenological perspective
using a qualitative thematic analytical method in investigation. It will be
appreciable to see the findings of other empirical investigations employing
diverse research philosophy or analytical methods. Finally, as the study has
found that adoption question in electronic banking should not viewed on the
macro-level of internet banking as a whole but rather as a micro-question of
individual products and services adoption, banks or interested person should
endeavour to investigate on this level.

5.8 SUMMARY

The chapter opened with a concise evaluation of research findings and thereafter
presented the linkage between research data, and research aims and objectives.
Research implications to management were briefly explored and a detailed
outlay of research recommendations and conclusions were discussed. The
chapter closed with suggestions of further research directions.

69
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