Introduction
The setting for the present study is the United Kingdom where the use mobile banking is believed to be expansive and continuing to grow at a fast rate. Participants are drawn from among Facebook users who are also likely to be consumers of mobile banking since they have already embraced technology in the UK (Lewis 2015). As such, it forms the ideal setting for the present study since it provides a large number of potential participants without having to endure geographical constraints. Such a setting helps the researcher to utilise less cost, for instance, transport expenses, tracing bank customers in a country where they are distributed over a large geographical area. Specifically, Google questionnaire links will be dispatched to participants through online platforms, specifically Facebook, by inviting them to take part in the study. All bank users from the selected sites (Facebook users based in the UK) will be allowed to participate subject to their consent and willingness to discuss their experiences regarding mobile banking. Additionally, the survey will also ask the participants to confirm they are of the age of majority.
Guided by the research question: How has mobile banking transformed how consumers approach and perceive banking?, the major objectives of the study include:
- To look at the various impacts that have been fuelled by this transformation in consumers’ discernment in the last half a decade. This objective will be attained by interrogating the perceptions and perspectives of different clientele regarding the change in banking
- To determine what customers feel regarding the shift from traditional to mobile banking. One can appreciate that while many clients may be positive about this revolution, others, especially the older generation, may be hesitant. As Market Reports (2015) argues, customers’ perspectives toward mobile banking vary significantly, particularly across the different ages.
- To investigate the truth of the perception pertaining to M-banking in the UK where millennials are viewed as be more hospitable of technological advancements relative to the earlier generation of baby boomers
For example, millennials, those born between 1980-2000, are customarily viewed as technologically sophisticated. To achieve the above objectives, the research will utilise a section of individuals from diverse ages. Regardless of the presence of a wide range of studies on the subject of M-banking, there is little research into how customers view mobile banking, specifically their attitudes and opinions. The gap in information makes it hard for policymakers and other stakeholders to evaluate how mobile banking is shaping the financial sector in the UK. Similarly, financial institutions such as banks lack adequate information on how they can expand their reach on mobile banking to include more customers. Therefore, it is the researcher’s contention that such information will assist stakeholders in bracing themselves for a future where mobile banking will completely have replaced traditional banking.
The research is about mobile banking, specifically the attitude and perception that users have on this form of money transfer. Mobile banking refers to banking activities that are carried out using mobile devices, for instance, cell phones, Personal Digital Assistants (PDA) and tablets (Market Reports 2015). It differs from internet banking since the primary tools used are cellular devices mentioned above. As well, mobile banking can be carried out without the internet (SMS banking), as is the case in developing countries, where internet connectivity is not widespread. Banks have introduced mobile banking apps that can be accessed through the Google app store, as well as the windows store, among other mobile app sites. Users download these apps before customising them according to their personal information and the mobile banking services they require. The services include checking account balance, making bank transfers, and paying bills (Mojtahed et al. 2013). Mobile banking has transformed the way individuals perform business operations by eliminating the intrinsic need for face-to-face dealings. Mobile banking, which is commonly referred to as M-banking, makes it possible for clients to perform monetary transactions through the internet without the need to avail themselves to a bank branch. One central aspect with mobile banking is its capacity to avail services to clients at considerably low charges because this form of banking does not involve the conventional rates that are linked to physical banking such as paying leases such as workplace buildings (Jeong & Yoon 2013). The money saved is then used to extend discounts to customers.
I have selected the subject “The Change in the Way Consumers Bank: Mobile Banking and the Effect it has had on Consumer Perception” because M-banking has made it convenient to buy or sell without the user having to carry money to the shopping base. In the UK, citizens have embraced mobile banking services. It is estimated that about 34% of the adults use mobile banking (Market Reports 2015). This figure indicates a remarkable move from physical to the cell phone-based form of banking in the UK. Conversely, M-banking is associated with issues of cyber threats of clients’ finances, especially when deals are done via mobile phones (Akturan & Teczan 2012). Therefore, the writer wishes to examine the various impacts of mobile banking because the mushrooming trend may completely replace conventional banking in the near future, specifically in the UK.
Literature Review
Mobile banking began toward the end of the 1990s when Paybox, a German company working together with Deutsche Bank, commenced their first service (Shaikh & Karjaluoto 2015). This service was then deployed for testing in the European countries, among them Germany, Sweden, Spain, Austria, and the United Kingdom. At the onset, mobile banking was mainly by way of short message service (SMS-banking). The internet was both slow and not widespread at the time. As well, the earlier phones were limited in their functionality. Thus, mobile banking could only support a few banking services. Customers would receive information about their banking details through an SMS (Shanmugam et al. 2015).However, improvement in mobile banking continued. With time, more services became available via cellular devices. In 2007, Kenya introduced the text-based M-Pesa service (Jack & Suri 2011). By 2012, the number of registered M-Pesa users in Kenya had grown to 7 million, owing to the convenience of use of this new service (Mbiti & Weil 2011).
In the UK, SMS-banking was the oldest form of mobile banking (Mojtahed, Nunes & Peng 2013). At the time of its emergence in the UK, mobile banking was slowed by the limited functionality of mobile phones (Shanmugam et al. 2015). The high cost of data, as well as slow connections, also served to limit its growth (Sohail & Al-Jabri 2014). In addition, people were apprehensive of the upcoming trend mainly because it was thought to be insecure. However, with the advancement of technology and the reduction of prices of mobile phones, mobile banking has become more accessible and better understood. Today, it is estimated that 34% of adults in the UK use mobile banking options (Market Reports 2015). This number, which continues to grow, is expected to double before the end of the decade. Banks have taken advantage of the growing interest in mobile banking by customers to launch numerous M-banking services to attract even more customers.
The rapid growth in mobile banking is attributed to various interconnected factors. First, mobile banking offers a wide range of services, which make it not only efficient but also reliable (Sohail & Al-Jabri 2014). Scholars have grouped the various mobile banking services into three categories, namely, mobile accounting, mobile brokerage, and mobile financial information services. These services vary in complexity and usefulness. To begin with, mobile accounting involves functions such as account operation and administration (Shaikh & Karjaluoto 2015). Account operation relates to bill payment and fund transfers among other services. On the other hand, administration concerns ordering checks and managing customers’ personal information. Reporting lost or stolen cards also forms part of account administration (Shanmugam et al. 2015).The second category of mobile banking, mobile brokerage, allows customers to buy and sell securities, as well as receive important information regarding the securities market. Mobile banking information services relate to accounting information and data about the bank. For instance, through mobile banking, it is possible for clients to confirm their bank balances and/or access bank statements without physically visiting the bank (Sharma et al. 2016).
Another factor for the growth of mobile banking is the ease with which customers can carry out banking services. Mobile banking has revolutionised customers’ interaction with banks (Sohail & Al-Jabri 2014). The ease of use of mobile banking has facilitated its rapid growth in both developed and developing countries. Services, like checking account status, making payments, money transfers, and selling stock can now be accessed rapidly via cellular gadgets (Johnson & Verdegaal 2016). Communication with the bank on a portable mobile device has also been classified as a mobile banking service (Akturan & Teczan 2012). Mobile banking in the UK is credited for the increased convenience of banking. The phrase “banking anywhere, anytime” has been coined to explain this convenience (Jeong & Yoon 2013). It has eroded the notion that banking business must be carried out within the confines of a banking hall. Consequently, people today prefer to conduct banking online compared to visiting a bank physically (Sharma et al. 2016). As Kundu and Datta (2012) assert, people are becoming less interested in lining on queues for a long period waiting to be served in the traditional banking setup because the procedure in traditional banking is rather tedious and demands one to be physically present in the bank (Akturan & Teczan 2012). The structures of traditional banking involved the client having to move to the physical bank carrying documents that would allow him or her to access the required services.
Banks realised the need to rescue customers from the challenge of inefficiency caused by having to queue for mobile services. This caused banks to introduce similar services in their (clients) mobile phones. Mobile banking apps were established to benefit users of the existing formidable telecommunications chains. Trendy mobile applications that are in use even nowadays include MyDeposit and Popmoney. The establishment of these applications was followed by a change in attitude where people realised that mobile banking saved time and/or offered the convenience of accessing ones’ bank details at any time (Slade et al. 2015). The convenience rendered by mobile banking has enabled people in the UK to live comfortable lives. For this reason, the majority of customers who have used mobile banking view it positively (Slade et al. 2015).
Mobile banking has increased access to banking services since most people now own a mobile phone (Shaikh, Karjaluoto & Chinje 2015). Between May and August 2015, 58% of adults in the UK used their mobile phone to access the internet (Personal Banking 2015). Personal Banking (2015) further revealed that by June 2014, about 14.7 million mobile banking apps were downloaded. The impact of this development is that more people are embracing banking services, especially the young generation (Shaikh, Karjaluoto & Chinje 2015). Market Reports (2015) observes that mobile banking has changed how both customers and service providers view banking. For instance, banks are now using SMS and apps to communicate to their customers about account updates.
Akturan and Teczan (2012) argue that mobile banking has increased competition in the banking industry. Due to the availability of many options, customers are now less likely to remain loyal to one bank. Instead of clients relying solely on the bank’s advice regarding secondary services such as mortgages, bankers now prefer to do the research themselves (Jeong & Yoon 2013). Mobile banking is also eliminating the need for generic customer services since customers now prefer customised experience during the rare occasions when they need to visit the bank (Arabo & Pranggono 2013). Banks are shaping their services to become customer-oriented to cope with this new trend. The reason for creating customer-oriented services is to improve effectiveness and customer satisfaction (Arabo & Pranggono 2013).
Chang (2016) asserts that mobile banking has made customers feel more in control of their banking experience, as opposed to traditional banking where the bank is in control. Even the most basic service available under mobile banking, namely, checking account balance, grants customers the feeling that they manage their bank details as they wish (Slade et al. 2015). Further, the user is quickly notified through either email or SMS of any activity that goes on in his or her bank account. For instance, if the customer’s card gets lost, he or she can notify the bank to block any account transactions via ATM. If an unauthorised withdrawal is made thereafter, he or she can hold the bank accountable for negligence (Zhou 2012). Numerous banking apps also allow users to have a real-time interaction with their bank accounts. As such, they can set spending limits or effect payments with convenience.
Customers view mobile banking as fast and efficient (Chang 2016). People lead busy lives. As such, they have limited time to spend banking (Akturan & Teczan 2012). Through mobile banking, they no longer need to queue at the banking hall for hours or even set aside time to visit the bank (Sohail & Al-Jabri 2014). This advancement is seen as an advantage because the time that was traditionally used for banking can now be channeled to other activities. Through mobile banking, services are processed rapidly, a situation that has led to ease of shopping (Akturan & Teczan 2012). According to Sohail and Al-Jabri (2014), mobile shopping has become a popular mode of payment at groceries and gas stations among other payment points. People do not need to carry cash when going shopping (Marriott & Williams 2016). As a result, their security is enhanced.
Mobile banking is believed to present a level of personal security that is otherwise unavailable under traditional banking. Under traditional banking, people would move around with cash, thus becoming easy targets for mugging (Zhou 2012). However, with the growth of mobile banking, people are rarely mugged for cash because they do not carry it physically. In addition, while thieves can access these mobile devices, it is nearly impossible to access the user’s bank details. Mobile devices have the latest security technology such as face and fingerprint recognition which services such as PayPal and ApplePay make use of. Hence, users are confident that intruders cannot access their (users) personal information (Personal Banking 2015).
However, the issue of security regarding mobile banking raises concerns (Choi et al. 2013). Many users are much interested in the security of their money due to the high incidence of cyber-attacks (Arabo & Pranggono 2013). Viruses, spams, and Trojans can be used remotely to hack into customers’ banking details (Shaikh, Karjaluoto & Chinje 2015). In addition, mobile devices are small. Hence, they can be easily lost or stolen (Arabo & Pranggono 2013). Loss and theft of mobile phones are some of the biggest threats that threaten mobile banking (Jeong & Yoon 2013). Each year, more than a million mobile devices are either lost or stolen in the UK. Android-based mobile devices store large amounts of personal data, including banking details, which can then be accessed by intruders once the device is lost or stolen (Shaikh, Karjaluoto & Chinje 2015). The latest devices can run many programmes simultaneously, a situation that increases the chances of malicious programmes operating in the background without the knowledge of the user (Market Reports 2013). According to Bagunas, Sophia, and Matriano (2016), mobile banking security is challenging banks to develop effective mechanisms to counter the loss of money by their customers.
Issues such as the ease of mobile banking and its usability depend on technology acceptance. Sharma et al. (2016) reveal how age influences how people view mobile banking in the UK, either positively or negatively. Younger people are likely to accept mobile banking relative to their parents’ generation that still prefers traditional banking (Zhou 2012). Akturan and Teczan (2012) agree with this finding by asserting that older people perceive mobile banking as insecure. Hence, many of them shy away from using it. The findings by Market Reports (2013) reveal how mobile banking has risen dramatically in the last few years among young adults aged 16-24. Market Reports (2015) further observes that despite the rapid growth of mobile banking, the older generation is still not responding as positively as the younger one. For this reason, banks are retaining their branches to serve this niche of their clientele who prefer physical service at the bank (Market Reports 2015).
This project relates to the above literature on mobile banking. The writer has observed that little literature exists regarding how customers perceive mobile banking, despite the expansive literature on the benefits of mobile banking. Therefore, this study seeks to bridge this gap by carrying out an investigation on people in the UK regarding their experiences and perceptions. This study is informed by the assumption that perception and experience with mobile banking depend on the age of the customers.
Methodology
Method
The study follows the deductive methodology where the researcher aims to make conclusions based on tests performed on an existing theory (Taylor & Medina 2013). Hence, the researcher has chosen a deductive approach, as opposed to the inductive one, which would otherwise be unsuitable for the present study because the deductive approach is generally suited for investigation in social sciences where empirical investigations are not required.
In terms of the methods used, an online survey will be carried out whereby qualitative data will be collected. Participants will be requested to fill Google questionnaires, which will be sent to them by way of web links to their Facebook profiles. Google forms/questionnaires are chosen for this task for the various benefits they present above other survey tools. To begin with, Google questionnaires can help the researcher to reach numerous participants simultaneously. The researcher does not need to travel or mail the questionnaires physically, which is the case when using paper questionnaires (Lewis 2015). This convenience eliminates transport costs, as well as printing expenses incurred when using paper questionnaires. Another advantage of the Google documents is that they are freely available and can accommodate an unlimited number of participants in a survey (Fernandes et al. 2014).
To carry out my project, using the Google questionnaires, participants will be asked questions relating to their experiences and perceptions of mobile banking. As such, these questions will be designed to elicit the free views of the participants without any clues or assistance by the interviewers. According to Polit and Beck (2013), questionnaires designed to obtain qualitative data should consist of open-ended questions. The advantage of open-ended questions is that they do not guide the participants. Instead, they leave them to respond in an unbiased manner. A phenomenological design will be deployed to scrutinise answers from the questionnaires. Polit and Beck (2013) explain that phenomenological research is essential in bringing out the lived experiences of people.
I chose this approach because Google forms can be used with mobile phones, unlike most online survey tools that are not mobile friendly. Thus, they will be the most suitable survey tools, particularly where the participants prefer to use mobile phones to computers when accessing the internet. After all, the present study is directed toward mobile phone users. The time allocated for the present study will be limited, hence necessitating the use of a rapid means of collecting data. For this reason, the researcher shall require a method that enables data to be collected within a short period.
The above approach differs from the one that had been suggested earlier in the proposal. The proposal had suggested the use of interviews and surveys to collect data. The current study will use Google Document since it is the most suitable. According to Smith (2015), online survey projects take at least two thirds shorter than the period taken to complete traditional surveys. Responses can be received within three days of sending out the questionnaires, unlike in traditional surveys where physical mail takes long.
Between 100 and 150 participants will take part in the survey. The participants will be of different age groups based on the assumption that the acceptance of mobile banking differs between the older and younger generations. Data obtained from the study will be analysed using SPSS version 14.0. Cross-tabulations will be used to calculate descriptive data. The software will help in indicating percentages between independent and dependent variables. Presentation of the findings will be done in the form of diagrams that will be made via MS Excel. SPSS will also be instrumental in producing additional graphs, for instance, the means from the different categories of age groups. The researcher will also use ANOVA to analyse statistical differences in perception and experience across the three age groups. According to Polit and Beck (2013), ANOVA is useful in testing mean group differences where three or more groups are involved.
Regarding the research philosophy, the researcher shall adopt a positivist approach. Research philosophy refers to a researcher’s belief concerning how the data about the study should be collected, analysed, and applied (Cohen, Manion & Morrison 2013). The two major philosophies are positivism and interpretivism. Generally, positivists perceive reality as being stable and hence capable of being observed and described from an objective standpoint without adversely affecting the phenomenon under investigation. This belief will form the basis for the current study. As such, the researcher will utilise the data obtained from the research to explain people’s attitudes and perceptions of mobile banking. However, researchers, for instance, Taylor and Medina (2013), have challenged the appropriateness of using positivism as a philosophy in social sciences such as in the present study. They argue that some parts of reality cannot be possibly examined from the positivist viewpoint.
Notwithstanding, the researcher considers positivism as more appropriate than interpretivism regarding the present study. Interpretivists believe that phenomenon must be interpreted subjectively. Further, they hold that scientists cannot avoid interfering with the phenomenon under investigation (Cohen, Manion & Morrison 2013). However, the researcher’s overriding concern is that the study must be relevant to the research question. For this reason, the researcher chose positivism over an interpretivist approach. Another reason is that positivism agrees with the researcher’s deductive approach to interpreting data obtained in the study.
Resources
Any research is expected to use various resources that range from money, labour, and time. It estimated that the researcher will spend about 3-4 hours every day in 7 days conducting the survey. The researcher will target customers outside bank branches. The money used for traveling to conduct the survey is also identified as a resource for the purpose of this research. It is crucial to point out that the participants will not be in one fixed location. As a result, one will be required to travel, either with a vehicle or public transport, to access the respondents. Additional resources for this study will include funds to acquire materials for the survey and software packages. Software packages to be used include SPSS version 14.0.
Ethical Issues
The project will also address the various ethical issues that the researcher needs to consider when gathering data from the participants. As such, the researcher will not include children and people with sensitive needs in the study. Additionally, the express authority of participants will be sought beforehand. Hence, only individuals who will agree to participate will be involved. They will not be forced to take part in the interviews.
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