Internet banking acceptance: a study on cultural dimensions

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In the last years of 20th century, a technology was introduced to the world that changed the people life style around the world. This technology was Internet which rapidly broke boundaries and made a unify world as a global village. It facilitated daily activities such as shopping. Instead of traditional way of going directly to the physical places, in the new way people stay at their homes or work places, and make orders online received their products or services at their favorite places, and pay the fees online. Internet banking is the next generation of online paying. The terms of PCs banking, online banking, Internet banking, and mobile banking refer to a number of ways that consumer can access their banks without being presence physically at bank branch by accessing to the Internet for performing transactions (Hazel and Raphael, 2001).

Increasing in the penetration rate of Internet usage around the world opens a new window on increasing in Internet banking rate. In term of Malaysia based on the Bank Negara announcements, using of Internet in order to do banking activities is increased from 67.8% in 2006 to 101.9 in first quarter of 2009. Not only in Malaysia as the base for this study, but also elsewhere penetration rate of Internet increased sharply. Developed countries with GSM (global system for mobile communications) as a type of wireless infrastructure have high level of growth in acceptance and penetration rate of Internet banking. By looking at the Internet banking around the world, it is clear that the European countries have the highest rate of using Internet banking followed by North America. In Middle East countries because of growing in the international investments, most famous companies such as Motorola conducted their wireless services.

In spite of the fact that the Internet banking has rapidly growth, there are gap of using this facility between developed countries and developing countries. Although nowadays, this technology is available in five continents, there are some doubts toward using this technology. People of these countries are concerning about their personal information, privacy and security, and these are factors that will increase their uncertainty level of using internet banking(East African and West African countries in Malaysia interviewing). This anxiety can refer to their cultural background. culture can refer to the customs and beliefs of a nation that stay with people for years, and changing of fundamental of this culture is not possible easily. So culture of a country can affect the culture of sub-societies in that country, such as organizational culture, educational culture and etc. consequently, each nation and country has especial fundamental in order to enter to the technology world and use technology as an assistant in their life. Therefore the following questions come to mind based on the above explanation.

General aims of study:

The main aim of this study is finding the role of culture in acceptance a new technology. That can be interpreted to culture role on the Technology Acceptance Model.

Beside the main objective this study pursues following objectives:

2. Giving the overall view of Hofstede Cultural Dimensions in different countries base on their Power Distance Index, Individualism/Collectivism and Uncertainty avoidance

3. Opening a new window for all who work in IT and IS implementing, to bring technology in multinational and international organizations.

4. Handling the problem that faced in multi-cultural society according to each person cultural background.

Research Questions:

The main question of this study can be defined as below:

What is the main effect of Culture on TAM?

This question is the base for the more question in this study. According to the Tam dimension, above question is expanded to following questions:

Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Usefulness (PU)?

Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Ease of Use (PEOU)?

Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Subjective Norm (SN)?

Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Behavioral Control (PBC)?

Is there any effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Behavioral Intention (BI) to use internet banking?

Next part is clarifying the main objectives of this study.

Research Objectives:

Based on the general purpose of the study and above questions the objectives can be explained specifically as below:

To explore the effect of the Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Usefulness (PU).

To explore the effect of Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Ease of Use (PEOU).

To explore the effect of Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Subjective Norm (SN).

To explore the effect by Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Perceived Behavioral Control (PBC).

To explore the effect f Hofstede cultural dimensions (PDI, IND/CLV, UAI) on Behavioral Intention (BI) to use internet banking?

After clarifying the pillar of this study, now it is time to overview the prior studies related to this issue. Next part is the literature review of this study.

Literature Review:

This chapter is included of backgrounds and literatures in Technology acceptance Model, Hofstede cultural Dimensions and previous researches including of cultural role on TAM. This chapter will prove the unique work of this study.

Technology Acceptance Model

Technology acceptance model is an extension from the Reasoned Action theory by Ajzen and Fishbein. TRA was used to explore the customer acceptance of a new technology according to two dimensions which are perceived usefulness and ease of use. According to TRA, an individual's behavioural intention, which results in actual behaviour, is influenced by person subject norm and attitude, and the attitude is influenced by individual beliefs (Ajzen & Fishbein, 1980). According to the Davis (1989), TAM hypothesizes that behavioural intention is a significant determinant of actual system use, and that behavioural intention is determined by two relevant beliefs, perceived usefulness and perceived ease of use. In TAM, an individual's principle determines the attitude toward using the system. The attitude develops the intention to use. Perceived usefulness is related to productivity but perceived ease-of-use is related to effort (Venkatesh, 1999). The most significant results of Davis study was the strong relation between Usefulness and Usage. Users of a technology try to cope with difficulties of a system, although difficulty of use can discourage adoption of a useful system, no amount of ease of use can give back for a system that does not perform a useful function.TAM used in several IS studies and proved useful determining technology acceptance, especially to explain computer usage behaviour.

Technology Acceptance Model (TAM) has been widely used to predict user acceptance and use based on perceived usefulness and ease of use (Davis, 1989). TAM conceives that behavioural intention is a significant determinant of actual system use, and that behavioural intention is determined by two main beliefs, perceived usefulness and perceived ease of use. The perceived usefulness refers to ''the degree to which an individual believes that using a particular system would enhance his/her job performance'' (Davis 1989). The perceived ease of use refers to ''the degree to which an individual believes that using a particular system would be free of physical and mental efforts'' (Davis, 1989). In TAM, an individual's belief settles on the attitude toward using the system and, in turn, the attitude develops the intention to use. This intention influences the decision of actual technology usage. With the bang of the Internet and convergence technologies, researchers have modified TAM to demonstrate the empirical evidences of it in the convergence context. In fact, many researchers have proposed various extended TAM. For instance, Moon and Kim (2001) suggest a model where perceived playfulness was described as one of the antecedents of attitude toward Web surfing. They noted that most prior TAM research had focused only on extrinsic motivation, not on intrinsic motivation. Morris and Dillon (1997) found that TAM contributes to the prediction of individual usage of software. The motivational model that was adapted by Davis, Bagozzi, Warshaw (1992) employs two key constructs: extrinsic and intrinsic motivation. According to Venkatesh and Speier (1999), extrinsic motivation refers to the performance of an activity. Extrinsic motivation is perceived to help achieve valued outcomes that are distinct from the activity itself, such as improving job performance, pay, etc. Intrinsic motivation refers to the performance of an activity for no reason other than the process of performing it. In the case of technology acceptance studies, perceived usefulness is an example of extrinsic motivation. Davis et al. (1992) found that perceived enjoyment was significantly related to the perceived ease of use. In the research on the usage intentions for information systems, Heijden (2004) adds perceived an enjoyment to TAM model.

Next part of literature is the exploring the Hofstede cultural dimensions and the meaning of its index.

Hofstede cultural dimensions:

``the collective programming of the mind which distinguishes the members of one group or category of people from another is defined as culture''

(Hofstede, 1997, p. 5)

In 1980 Hofstede offered his famous description of cultural dimensions. Geert Hofstede collected his data from the IBM employees and analyzed these data between 1967 and 1973 .It was included more than 70 countries. He first used the 40 largest countries and then extensive the study to fifty countries and three regions. From the preliminary findings, and later researches, Hofstede offered his model for cultural dimensions which is contained four primary dimensions to define in differentiating cultures:

First dimension was Power Distance Index (PDI), second was Individualism/collectivism (IND), third dimension was Masculinity/femininity, and finally he offered Uncertainty Avoidance (UAI). Geert Hofstede added another dimension after carry outing an additional international study with an examination instrument developed with Chinese employees and managers. Description of each Hofstede cultural dimensions is presented in next lines:

Power Distance Index (PDI) that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally (Hofstede, 1980). This will be a symbol of inequality. He suggests that a society's level of inequality is approved by the followers as much as by the leaders. Power and inequality are extremely fundamental facts of any society and anybody with some international experience will be aware that all societies are unequal, but some are more unequal than others.

Individualism (IND) is another dimension that collectivism is its opposite that is the degree to which individuals are integrated into groups (Hofstede, 1980). On the individual culture, it was found that societies in which the ties between individuals are loose, that can be meant every person is expected to look after him/herself and his/her immediate family. In collectivism cultures, he pronounced that in societies that people from beginning are integrated into strong, cohesive in groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty(Hofstede,1980).

Masculinity/Femininity describes to what extent, social gender roles are clearly distinct. Masculine societies emphasize on differentiated sex roles and independence. Male gender is assertive and focused on material values, while women are kind and think about the quality of life. In feminine societies, overlapping gender roles and interdependence are the norm. Men and women are supposed to be focused on material things and concerned with quality of life. (Hofstede, 1980)

Uncertainty Avoidance Index (UAI) comes with a society's tolerance for uncertainty and ambiguity. It shows to what extent people in a society feel uncomfortable or comfortable with culture programs in unstructured situations. (Hofstede, 1980). The opposite type, uncertainty accepting cultures, are more tolerant of activities different from what they are used to; they prefer have few rules, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more apathetic and thoughtful, and not expected by their environment to express emotions.

The last part of literature is reviewing the prior studies which used to explore Tam based on the Cultural dimensions.

Technology Acceptance in View of Cultural Dimensions

Cross-cultural researchers have traditionally used Hofstede (1980, 1997) definition of culture that focus on the comparison of one culture with others. This is an etic definition of culture. Researchers that follow an etic approach in cross-cultural consumer research generally look for universal or culture-free theories and concepts. They search for variables and constructs common to all cultures that can be directly compared in order to discover how those cultures are different from or similar to each other. This approach is typical of cross-cultural psychology and other comparative social sciences (Luna; Gupta, 2001).

In 1997, Straub; Keil and Brenner applied TAM model across three different countries, the united states , Japan and Switzerland, their aim of study was examine the cultural affected of different regions on acceptance a technology such as mobile. Straub et al. (1997) defined Hofstede cultural dimension and their impact on technology acceptance and adaption. Uncertainty avoidance, the degree to which members of a society feel uncomfortable with uncertainty and doubt, could affect technology acceptance by influencing choices of computer-based media in opposition to traditional media and cultural differences, in uncertainty avoidance, specifically, could affect the way in which individuals choose media for their communication tasks. With respect to organizational communication behaviour, prior research has focused specifically on uncertainty and ambiguity as principal factors in predicting media use. Information richness theory (1984; 1987) imagines that individuals choose a communication medium by matching the information requirements of the task to the information richness of the media. Richness in a medium is a function of the interactiveness of the feedback channel, the personal quality of the source, and the ability of the interface to express innuendoes. For tasks high in uncertainty and doubt (for example, negotiation and conflict resolution), it is thought that people will use rich channels, such as face-to-face communication. For tasks low in uncertainty and ambiguity (for example, information memos and simple information exchange), simpler channels suffice. Electronic media such as E-mail are believed to be rather simple channels because they carry only literally information and not the personal presence or force of the communicator. Totally, one effect on media choice is that cultures in which individuals tend to avoid uncertainty (that is, high uncertainty avoidance index, or UAI) are expected to use electronic media less often since these media are not well suited to uncertainty reduction as face-to-face and other rich channels (Straub et al; 1997). Straub's study showed that Power Distance that is other important dimension of culture can affect technology acceptance. In societies in which managers and workers are separated by a large power distance, the levelling effect of computer-based media is not seen or felt as a desirable feature. In a culture with high power distance index, individuals may show deference to authority by abstaining from using media that do not allow them face-to-face contact (or, at the very least, access to a richer set of cues than simple textual messaging). Thus, the range of use of technologies such as E-mail and other electronic media should be restricted by such social norms. Workers in cultures in which relatively smaller power distance occur will, accordingly, be able to use such technologies in more communications settings.

Next cultural index that Straub believed has effect on acceptance a new technology is individualism/collectivism. Low individualism (low IDV) possibly affects a culture against computer-based communications because these media mute the group effect. People in collectivist cultures cannot pick up cues about the social situation as readily from computer-based media and, therefore, would be disposed, overall, toward media such as face-to-face across all communications tasks. The last index that Straub (1997) explained its relation with technology acceptance is Masculinity/femininity. High in Mas Index can be translated to the high relationship with interpersonal presence. According to Straub it can be predicted that media not conveying the social presence of the communicator, such as E-mail, would not be favoured in cultures in which masculinity is a strong cultural. By looking at the Straub (1997) study results, it was cleared that TAM would be successful in explaining the U.S. and Swiss experience but not the Japanese experience. This effect may occur in spite of the rational usefulness found in the medium. In case of Japan, cultural tendencies toward more uncertainty avoidance, greater power distances between managers and workers, collectivist opinions, and masculinity may limit E-mail use and disassociate usefulness from use (Straub, 1997). Straub gave a special explanation on cultural dimensions and their effect on using a technology.

Level of UAI

Level of PDI

Level of MAS

Level of IND

Level of use of E-mail

Figure 2.1: Hofstede Cultural Dimensions and Media Choice of E-mail (Straub et al., 1997)

In spite of the fact that there are many researches which explore the TAM in different countries, the lack of the research on exploring the cultural dimensions as an important factor related to the acceptance a technology is obvious. Therefore, the gap of study can be explained as below:

Problem statement (literature gap):

According to the previous discussion, although there is rapidly increasing in internet banking penetration but still there is some unsafe feeling towards it. That means there are factors that can affect acceptance and adaption of a technology, beside existing factors such as usefulness, ease of use, subjective norm and etc.

While essential research has been directed toward understanding the adoption and diffusion of IT (Prescott and Conger, 1995), there have been a few researches which were conducted to explore the effects of culture in the acceptance and dispersion of new information technologies (Raman and Wei, 1992). Research on the impact of corporate culture on IT acceptance provides a useful viewpoint (Cooper, 1994; Kydd and Jones, 1989) but ethnic or national culture research undoubtedly has a special character.

The problem to be investigated is that there is no enough research that works on the effect of national culture on acceptance a technology. Therefore, this study examines the role of culture on technology acceptance model (TAM) adaption and tries to give an in depth view of Hofstede Cultural Dimensions towards acceptance of a technology (Power distance index, Individualism/collectivism, Uncertainty avoidance). It is hoped that conclusions can be drawn and opened a window for managers and all who want to bring world of technology to their life and work.

Based on the literature part the framework of study is drawn in the next part.


Research framework, hypothesis, data collection approach, and the data analysis methods is explained this chapter.


In purpose to find the cultural dimensions role in technology acceptance, this paper will follow the Davis (1980), Pavlou & Chai (2002), and Straub et al. (1997) Cultural framework, explanation of relation between TAM and Hofstede cultural dimensions will use McCoy, Everard and Jones (2005) research. The unique way of this study is to explore differences and similarities in behaviours toward TAM in different levels.

Proposed framework is as below:

Cultural Dimensions

Perceived Usefulness


Behavioral Intention to Use Internet banking

Perceived Ease of Use

Perceived Behavioral Control

Subjective Norm

Figure 1.1: framework

Before developing the hypothesis, in order to achieve the purpose of this study, a table is designed based on the Hofstede scored for different countries. In order to design this table, the following points must be considered:

Firstly, design was draw according to countries PDI, IND/CLV and UAI .countries were divided according to their score in above three dimensions.

For power Distance Index, countries were categorized from Low to Moderate, and Moderate to High. In order to find countries dimension in IDV/CLV again two scales, one Low to moderate and second, moderate to High were defined.

UAI for technologies such as Internet Banking and Mobile Banking is an important dimension, because these type of technology that related to the security, privacy and personal information, always carry high level of UAI between people (Pavlou and Chai, 2002). Because of nature of these technology and situation that people cannot interact directly with the bank staff, was defined as an uncertainty level. Therefore it is very important that countries in these dimensions were scored carefully. This study used three different scales in order to divided countries according their UAI scores. Countries divided to low, moderate and high level separately from

each other, revise the two other indexes that had two levels. In this step again countries were arranged according to their three dimensions while each country found its place in the table that show its PDI level, IND/CLV level and UAI level.

After arrangement countries according to the above direction, a table was designed with twelve cells. The table shows countries with similarities in dimensions in each cell. That means cells of this table show countries with similar cultural dimension in each cell. (Table 2.3)








Cell1: Jamaica

Cell2: China/Honking/India/Indonesia/Philippine/Singapore/Vietnam/Malaysia




Cell 4: Arab World/Bangladesh/ Brazil/Colombia/East Africa/West Africa/Thailand/Venezuela/Ecuador.


Cell5: Argentina/Costarica/Greece/Israel/Japan/Malta/Spain/South Korea.

Cell6: Chile/Guatemala/Mexico/Panama/Peru/Portugal/ Romania/Russia/Surmania/Turkey/Uruguay/ Bulgaria/Elsalvador.


Cell7: Canada/Denmark/Ireland/New Zealand/Norway/South.AF/Sweden/US/UK/






Cell 10: Italy


Cell 11:Hungry

Cell 12: Belgium/France

Table 3.1

In order to explain the above table, Malaysia selected as a sample. Based on the Hofstede scores and above definition, Malaysia is considered as a country with high score in power distance index, low in IND index and low in UAI index. Iran is considered a country with moderate level in UAI, low level in PDI, and low in IND.

By designing the above table it is time to open the hypothesis of this study

Developing hypothesis:

According to the figure 2.1, perceived usefulness, ease of use, subjective norm and perceived behavioural control and behavioural intention to use internet banking are this study's constructs. Here will be tried to find cultural effects on Technology Acceptance Model, whether they lead to different behaviours on various level of dimensions that will define in this study for each construct or not. Therefore main hypothesis of this study will be:

Cultural Dimensions have effect on Technology Acceptance Model.

By expended of this Hypothesis, the results can be written as below:

The cultural dimensions in different levels of PDI (low and high), IND (low and high), and UAI (low, moderate and high) can lead to different behaviours toward usefulness construct in TAM.

The cultural dimensions in different levels of PDI (low and high), IND (low and high), and UAI (low, moderate and high) can lead to different behaviours toward ease of use construct in TAM.

The cultural dimensions in different levels of PDI (low and high), IND (low and high), and UAI (low, moderate and high) can lead to different behaviours, also interact of these dimensions can lead to different behaviours in Subjective Norm construct in TAM.

The cultural dimensions in different levels of PDI (low and high), IND (low and high), and UAI (low, moderate and high) can lead to different behaviors, in Perceived Behavior Control construct in TAM

The cultural dimensions in different levels of PDI (low and high), IND (low and high), and UAI (low, moderate and high) can lead to different behaviours, in Behaviour Intention to used Internet Banking construct.

Data collection approach:

In order to gain the best results, selecting the right samples is the important task. In this study, the way of collecting sample is probability when it is default that all samples must be a user of Internet banking in the Malaysian infrastructure; besides, it is a simple random sampling because all samples in the population have the equal chance in order to be selected.

Source of data

A source is primary if the data collector is the one using the data analysis. A source is secondary if one organization or individual has compiled the data to be used by another organization or individual.

In this study, primary sources of data which is distributed questionnaires are used to collect. The instrument or measure used is a structured questionnaire based on the literature review on the relevant topics in order to collect appropriate data for this quantitative research.


Base on the main aim of this study to draw people according to their cultural value then finding cultural effect on TAM, framework and table, this paper needs different samples from different countries that stay in Malaysia. Gathering data for this research paper included different stage and level. Four university students (UM, UTM, MMU) will be as places for gathering samples; besides, the embassies of different countries in Malaysia are the best places for collecting these data from the more 20 countries. Furthermore, the social networks such as Facebook community in Malaysia are another source for handle sampling for this study.

Sampling Size

Roscoe (1975) proposes that the appropriate sample size for most research to be greater than 30 and less than 500. Needed samples for this research are at least 180 elements, and it is 15 for each cells.

3.7 Data Analysis Method

Statistical Program for Social Science (SPSS) is used to analyze in this quantitative study. The data was analyzed by Design of Experiment method (DOE), for reliability test, the cronbach's Alpha is used to ensure the measures are free from error and produce consistent results.

Factor Analysis was used in order to validity test of each constructs.

In order to analyse and find results, General Linear Model, and 3way Analysis of Variances was used in this study.

Significance of the Study

Globalization and the ubiquitous nature of the Internet facilitate internet banking activities across nations. In today globalization world, popularity of multinational corporations, and the movement toward technological revolutions, the value of more cross-cultural research is needed, as firms grow their operations in the international arena, there is a need to exploit the power of IT to communicate among these widespread locations and to coordinate activities both within and across countries. Hence, it is important for the managers of these firms to learn, as much as they can, about the cross-cultural adoption and use of IT. This study can help managers in international corporations to anticipate their employee's behaviors toward a new technology and select right behavior toward their employees from different cultural background. This research can show a way to adaption a technology between multinational companies, step by step, without forcing people to use a new technology. By following right ways to adaption of technology, people will acceptance a technology as a facilitate instrument, so this lead to prevent the failure of IT adaption in a multicultural company.

Corporations would benefit by recognizing the effect that cultures has on technology acceptance and by implementing appropriate and possibly different technologies at their various worldwide facilities. This study identifies several different consideration factors that come into play when one is confronted with new technology. By using the argument of this study, managers of corporate can make more informed decisions on technology upgrades and new technology implementations based on the culture their corporate within.

Culture and business ties to each other these days, as an corporation is going to enter a new countries, first and important point is finding the culture of that countries in both view of business culture and people culture as user of their product and service. If people beliefs reject the use of a technology, it can be result of not paying enough attention to people culture, customs and beliefs.

This research can be used in multi-cultural countries, where different people with different cultures live beside each others, this can lead to cause some problems, this research gives a wide range of cultural divisions that can helpful for handling problems.


Although the TAM is the most important and popular method to examine people behavior toward IT and IS, there are rare studies which look at the TAM through a cultural view. This study will provide a wider view toward TAM; besides culture as important factors will be explored.

As a conclusion this unique study can be a guide line for managers of multinational companies in order to handle their employees from different cultures with dissimilar background; besides, the exclusive results can be used for future research in order to discover the role of culture in accepting or rejecting a new technology.