CHAPTER 1: INTRODUCTION
The market for mobile phones and the use of internet through mobile phones is rapidly increasing. It has multiplied to 2.5 times in last 5 years. The growth can be seen as in 2005, approximately 2 billion mobile phone users to approximately 5.3 billion users by 2010 (ITU, 2010). Also the internet users through mobile handsets is approximately 940 million by 2010 and is expected to continuously rise in the forth coming years (ITU, 2010). The number of applications and services available on the mobile handsets has created a different section for people using mobile banking. It has brought about a revolution in the way the people perceive banking. Mobile handsets are used for numerous purposes when it comes to banking. The services offered by the banks to transfer the money, to check the balance, to request a cheque book and so on has made mobile banking a very useful and time saving commodity.
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Many different services can be availed through mobile banking. The services which revolve around the standard bank account which includes daily transactions, requests for particular services and alerts fall under the term “Mobile Accounting”. Now a day the transactions relating to shares, stocks and bonds can also be accessed through mobile banking which fall under the category of “Mobile Brokerage”. The third category, “Mobile Finance” revolves around the non-transactional activities like inquiry for the balance in an account, ordering a mini statement, etc (Georgi & Pinkl, 2005 cited in Tiwari & Buse, 2007).
According to Tiwari and Buse (2007), the mobile phones are used to offer the services of banking and finance in mobile banking. There are many means to provide e-banking and mobile banking is one of them (Laukkanen, 2007). The usage of information technology in providing the services through mobile is the most modern method of banking (Anderson, 2010).
1.1.1 MOBILE BANKING IN INDIA
The current population of India is 1.18 billion (CIA, 2011). The number of mobile users in India has reached 811.59 million by the end of March, 2011 (TRAI, 2011). The number of mobile users has increased significantly over the past decade but the level of awareness among the consumers for mobile banking has been very dormant. The Reserve Bank of India defines mobile banking as the financial operations commencing by the use of mobile phones by the consumers to access their accounts to utilize the monetary and non-monetary services (MEDIANAMA, 2011). Mobile banking in India is currently provided by some of the banks as there is lack of proper infrastructure as well as little awareness among the consumers. State Bank of India, ICICI and HDFC are the prominent banks in India which provide the mobile banking services to the consumers.
WAP (Wireless Application Protocol) or SMS services can be employed to carry out mobile banking. It is one of the most modern technologies under development and has the potential to replace the plastic money. Mobile banking can be implemented on the similar lines of ATM's and is very straight-forward and economical to execute. The consumers will be able to use the mobile for the services via SMS or internet on the phone. The text services are confined to ordering a statement or check the balance. On the other hand, the mobile internet can be useful to transfer the funds from one account to another, to transfer funds around the globe and also shell out payments while shopping, travelling, etc. (Monitise, 2010). According to Monitise (2010), different software can be downloaded to help facilitate mobile banking.
The current mobile banking users in india are approximately 43.70 million (Pluggd.in, 2009) which is 5.38% of the population using mobile phones.
The reasons behind the low rate of usage of mobile banking are the consumer behaviour, high-priced and sluggish data provision, lack of smart phones in the market and the most important is the lack of awareness among the consumers. The customs and the culture play an important role in determining the choice of the consumers which affects all the aspects of the life (Loudon and Bitta, 1993).
CHAPTER 2: METHODOLOGY
2.1 RESEARCH DESIGN
The design of the research varies according to the necessity and the requirement of a particular research into prospect. According to Hair, et al (2003), there are three different forms of research. They are as follows: descriptive, casual and exploratory (Hair, et al., 2003). Exploratory research provides simplified inference without much information and it cannot be used to decide the detailed steps in a particular direction (Hair, et al., 2003). It consists of searching the previously available information, surveying a particular set of samples and then conducting discussions (Saunders et. al, 2007). The other research design form is the descriptive. It focuses more on unfolding the outlook, manners, intent and the buying power of consumers (Saunders et. al, 2007). Descriptive research is a very technical and organized approach towards accumulating data for a problem (Saunders et. al, 2007). The researcher has decided to use the survey method which enables the researcher to gather the information by the help of a well thought out questionnaire (Saunders et. al, 2007).
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The utilization of the items or the services by the consumers gives an overall idea of the outlook of the consumers and how they perceive products and services. Many customers do not give a long thought over purchasing products or services and sometimes unintentionally purchase them or subscribe to the services. To understand the logic behind such behavioural pattern, the researchers adopt varying methods (Schiffman & Kanuk, 2004).
The researcher has chosen to adopt the descriptive design for the proposed research as well as use the exploratory research method to study the available information which will be useful in this research. The quantitative data to be gathered will be done by the survey method using a questionnaire.
2.2 QUANTITATIVE RESEARCH METHODS
To foretell the mannerism and the outlook of the consumers, the quantitative research method is utilized as it is usually suggestive and provides enough information for the behaviour of consumers (Schiffman & Kanuk, 2004). Accordind to Hair, et al (2003), the quantitative study employs questions which already has predetermined solutions and are issued to sample of respondents under consideration. The questionnaire facilitates the researcher to unearth the facts about the association among the elements in the market and their insinuation on the behavioural pattern of the consumers. Justification of the information and forecast are the focal point of the quantitative research technique. The results obtained of the research from the sample size undertaken can be comprehensive and can be compared to the large population size. According to Hair, et al (2003), the justifications are made through techincal, systematic and statistical method which also involves the researcher version of understanding and interpretive abilities.
The researcher undertook the quantitative research instead of qualitative research as the qualitative information / data is unreliable and less convincing than the results obtained through quantitative information. The researcher could not gain admittance to meet the professionals involved in the field of mobile banking. The primary arrangement was to conduct a survey and interviews with the specialists in the field of mobile banking in India. As the experts were not accessible, the study was restricted to the quantitative research. As stated in the literature review, many famous authors and researchers have carried out quantitative research to verify the behaviour and perception of consumers with respect to mobile banking. Also the results of qualitative data have many shortcomings in terms of generalization of the inference with regards to huge population and also it is difficult to foresee the approach, faith, confidence, trust and behavioural pattern of the consumers (Hair, et al., 2003).
2.2.2 SURVEY METHOD
Survey technique includes multiple questions to understand the behavioural pattern of consumers towards a product or a service and collecting appropriate information (Ghauri & GrØhaug, 2005). According to the Hair, et al (2003), the technique of survey has benefit of easily managing the collected information and also useful in direct investigation or the analysis. Large samples of respondents can be integrated at a very cheap expenditure through the survey method (Hair, et al, 2003). It also enhances the flexibility of the study undertaken (Hair, et al, 2003). If the application of the gathered data is done correctly, than the survey method gives the added advantage of enhancing the researcher's capability to come out with more generalized conclusions and give an overview of the target population as a whole (Hair, et al, 2003). The survey technique is associated with descriptive research method and the information is gathered from a large set of respondents and it is organized and accurately documented (Hair, et al, 2003).
According to Schiffman & Kanuk (2004), the consumer behaviour, the confidence, the trust and the attitude for a service or an item can be judged by making use of various techniques like online survey, survey through emails, telephonic survey as well as one to one survey. Surveys which are conducted online are very beneficial to the researcher as well as to the respondents as it saves lot of time and is cost effective. Also online surveys can be filled in by the respondents without any requirement of having computer skills (Hair, et al., 2003). The online survey includes a questionnaire which is posted on the World Wide Web for the respondents to understand and respond appropriately (Hair, et al., 2003). The information collected through online surveys is rather fast and precise as contrast to the physical gathering of information (Hair, et al., 2003).
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The researcher is therefore in the favour of using the online survey technique to gather the quantitative information as it is less time consuming, cost effective as well as easily comprehended by the respondents. The website used for the online survey is kwiksurveys.com which allows the researcher to post as many questions as one can to get the appropriate result for the research undertaken.
A device used to collect the information of a survey is the questionnaire (Hair, et al., 2003). A questionnaire consists of a very consistent and standardized questions and the degree developed to produce primary information for the quantitative research (Hair, et al., 2003).
WILL DESCRIBE MORE ONCE THE QUESTIONNAIRE IS PREPARED
2.3 SECONDARY DATA
According to Ghauri & GrØhaug (2005), the secondary information is the research done previously to investigate a certain problem which is not similar to the current issue undertaken. The researchers ought to start their research with the secondary data and gain an insight of the problems discussed (Ghauri & GrØhaug, 2005). Secondary information is very beneficial to the researchers as it offers hints, indications and also gives a specific route towards the current research (Schiffman & Kanuk, 2004). The periodicals, pamphlets, journals, government reports and books are all source of secondary data (Schiffman & Kanuk, 2004). The books, volumes, academic journal and articles are the major basis of secondary information for the researcher. The researcher also accessed the websites of the banks, and also websites of the commercial research conducted by the institutions or companies into research. The bank websites have helped the researcher to find out in-depth about mobile banking and its services. The researcher also went through the surveys by Euromonitor and World Bank which presents global information useful for the research undertaken (Ghauri & GrØhaug, 2005).
2.4 SAMPLING TECHNIQUE
According to Hair, et al (2003), to gather a data, a small part of the population under the consideration should be taken defined as a sample. A sample represents the whole population where the collection of information is very easily done. As stated earlier, it is very time and cost effective. The sampling technique follows after confirming the research method and the tool for gathering the information. Sampling method offers more advantages as it provides precise outcomes than the census (Henry, 1990 cited in Saunders, et al. 2007). The researcher has considered the use of non-probability sampling technique as the extent of the research is limited to a small sample size (Saunders, et al 2007). According to Schiffman and Kanuk (2004), the non-probability technique is better than the probability technique in the event of the samples representing the whole population and the data gathered is valid to the population as a whole under consideration (Ghauri & GrØhaug, 2005). The researcher selected the respondents on his own which matched the criteria set by the researcher which could benefit the research undertaken. So the deviation from the general non-probability technique was chosen by the researcher himself (Saunders, et al. 2007).
2.4.1 SAMPLE SELECTION
The size of the sample chosen for the research is as follows:
- 25 respondents from Mumbai, India which are users of mobile banking
- 25 respondents from Mumbai, India which are non-users of mobile banking
2.5 VALIDITY AND RELAIBILITY
The information gathered for the research should facilitate the researcher to reach an inference or to achieve the objective set by the researcher (Schiffman and kanuk, 2004). According to Schiffman and Kanuk (2004), the reliability of the study unertaken lies in receiving similar answers from similar samples. The information gathered is genuine, convincing and applicable to the study undertaken by the researcher. The information collected is dependable and will be consistent with its results even for the similar study in future.
2.6 LIMITATIONS OF THE METHODOLOGY
There are many limitations of the methodology undertaken by the researcher though every care has been taken while collecting data:
- The target respondents were restricted to Mumbai, India.
- The size of the sample considered was small and may not represent the views of the general population.
- Many elements like earnings/ salary, academics and business of the respondent were not taken into consideration.
- Only internet survey was implemented to gather the data as it was very time and cost effective.
- The experts in the bank were not consulted as the access to them was difficult.
CHAPTER 3: LITERATURE REVIEW
3.1 CONSUMER BEHAVIOUR
According to Loudon and Bitta (1993), the consumer behaviour is defined as the action undertaken by the consumers and the decisions taken to evaluate, procure and also get rid of the products and services. An organization, to be successful, needs to be innovative and also consider the different elements which influence the decisions of the consumers to buy the products. According to Schiffman and Kanuk (2004), the consumer behaviour is defined as the actions or the manners of the consumers which depict their buying, consumption of the products and also divest the unnecessary items which they think will accomplish their requirements. Schiffman and Kanuk (2004) also suggest that the crucial factor influencing consumer behaviour depends on the element to evaluate the decision power of consumers to acquire the products while using their wealth, time and efforts. Consumer behaviour is divided into other factors like Individual buyer and establishment buyers (Schiffman and Kanuk, 2004). Individual buyers purchase products for their own use and the establishments procure products for other business purpose (Schiffman and kanuk, 2004). According to Schiffman and Kanuk, (2004), customers purchase products or services for their own benefit and majority of times, the buying is done on impulse by the customers. Nonetheless, the extent of this research is very narrow and is related to the behaviour of the individual or the personal customers who utilize products or services for their own use (Schiffman and Kanuk, 2004).
3.2 CONSUMER DECISION MAKING PROCESS
According to Kotler, P (2003), the identification of the buyers of the various products is easy. Kotler, P (2003) also states that the decision of buying differs from products to products where expensive products attract more participants while buying. There are different types of functions played by the consumers while buying the product or service. They are as follows: initiator, influencer, decider, buyer and user (Kotler, 2003). According to Jober, D (2004), the decision making process among the consumers consists of five steps and they are as follows:
- Recognizing problems
- Seeking information
- Assessing the substitutes
- Assessing the obtained product
Five step decision making process of consumers is shown below in fig.
3.2.1 RECONIZING PROBLEMS
The recognition of the problem is the first step towards buying a product or a service. The identification of the problems occurs over a certain time frame and psychological side of the consumers come into the picture (Jober, D 2004). According to Jober, D (2004), the definition of recognition of the problem is the consumers desire to determine the problem and the scale between the present and the desired circumstances (Jober, D 2004). The businesses should be aware of the situation and be responsive to the elements which prompt the consumers to purchase and fulfil their needs (Kotler, 2003). According to Hoyer and Maclnnis (2004), the ideal situation is defined as the anticipation of the consumers after they purchase the product of service. Jober,D (2004), describes that consumer enthusiasm solely lies in the difference between the current state and the anticipated state. Considering mobile banking in this context, the consumers need to be aware of their problems and also be motivated to subscribe to the services offered by mobile banking which should be secure and affordable.
3.2.2 SEEKING INFORMATION
Seeking information is the second step after recognition of the problem. According to Kotler, P (2003), the consumers will be prompted to search for the information of the product or service if they are aware of their problems. The consumers will gain knowledge about the product or service while they collect the information (Kotler, 2003). Whenever the consumers are conscious about their needs and have identified the problem, they start searching for information which will help them rectify their problems. According to Jober, D (2004), there are two methods by which the information can be explored. They are internal and external search. Jober, D (2004) states that the ability of the consumer to remember and recollect the data which he/she has personally experienced or has seen is termed as internal search. It helps the consumer to decide on a certain solution (Jober, 2004). The external search is considered when the consumer is not able to come to a conclusion for a certain problem and needs help from the closed ones like family and friends (Jober, 2004). According to Hoyer and Maclnnis (2004), the consumers have very restricted capacity to recollect the past information and the knowledge about the product or service decreased gradually over a period of time. The product or service including high security risks, financial risks as well as affecting psychologically will make the consumer put more exertion while making a decision (Hoyer and MacInnis, 2004). The consumers judge the product or service based on certain criteria's like the brand name, the quality, the characteristics of the product or service and also purchase on the product or service based on their previous experiences (Hoyer and Maclnnis, 2004). According to Jober, D (2004), the consumer can also refer to “third-party” sources like advertisements, magazines, journals, newspapers for the fair information. The degree of research by the consumers to collect the data is highly dependent on the skills and the prospects offered to the consumers (Hoyer and Maclnnis, 2004). There is more risk and unpredictability involved while subscribing for a service and high level of external search negates the risk factor involved (Hoyer and MacInnis, 2004). Relating mobile banking to the context, according to Jober, D (2010), the understanding and the knowledge of the consumers leads to creation of a set for the different banks providing the mobile banking services which can help them solve their problems.
3.2.3 ASSESSING THE SUBSTITUTES AND BUYING
After seeking information about the product or a service, the consumer has to narrow down the search depending on many criteria's. According to Kotler, P (2003), the consumer needs to decide on the basis of satisfaction, benefits offered by the product or service, and also the expense. The consumer is very well aware of the different brands available in the market and also has a fix perception about different brands (Kotler, P 2003). The level of participation by the consumers is important to assess the brand and is defined as the level of the observed significance and personal significance of the choice of the brand (Jober, D 2004). The consumer while evaluating different brand options narrow down the choice of the brands eventually which comprises the remaining brand in the whole set of brands (Jober, D 2004). The different criteria's under the consideration by the consumers will be satisfaction along with affordability and security (Jober, D 2004). In context to mobile banking, the customers will short list the names of the banks they find suitable and convenient to deal with and also judge them by the perceived brand name and their recognition. The consumer will than look at the degree of services provided and ease of use of those services. Than the consumers will see the affordability and the security factors involved in the subscription and make a decision.
The mobile banking is at a premature stage of growth and needs to undergo continuous improvement (Suoranta and Matilla, 2003). It requires high usage of new technology and is innovative product/service which will change the current scenario of banking among the consumers (Suoranta and Matilla, 2003). It will have a considerable outcome on the way the people perceive banking currently (Hoyer and MacInnis, 2004). As mobile banking is very innovative field, it comes with certain ambiguity and risks of finance, security as well as emotional risks (Ram and Sheth, 1989).