FACTORS AFFECTING THE USE OF MOBILE BANKING SERVICES
IN HANOI, VIETNAM

___________________________

A DISSERTATION
Presented to the Faculty of the Graduate School
Southern Luzon State University, Lucban, Quezon, Philippines
in Collaboration with
Thai Nguyen University, Socialist Republic of Vietnam

___________________________

In Partial Fulfillment
of the Requirements for the Degree
Doctor of Business Administration

___________________________

By
VU MANH CUONG (CAMERON)
December 2013

i


APPROVAL SHEET

The Dissertation of

VU MANH CUONG

entitled
FACTORS AFFECTING THE USE OF MOBILE BANKING SERVICES
IN HANOI, VIETNAM
Submitted in Partial Fulfilment of the Requirements for the Degree
DOCTOR OF BUSINESS ADMINISTRATION
A program offered by Southern Luzon State University,
Republic of the Philippines in collaboration with
Thai Nguyen University, Socialist Republic of Vietnam
has been approved by Oral Examination Committee

WALBERTO A. MACARAAN, EdD
Expert

MELCHOR MELO O. PLACINO, PhD
Expert

CONRADO L. ABRAHAM, PhD
Expert

EDWIN P. BERNAL, DBA
External Panel

CECILIA N. GASCON, PhD
Chairman
Endorsed by:

Recommended by:

NELLY I. MENDOZA, DBA
Adviser


APOLONIA A. ESPINOSA, PhD
Dean

Accepted in Partial Fulfilment of the Requirements for the Degree
Doctor of Business Administration

_____________________
Date

WALBERTO A. MACARAAN, EdD
Vice President for Academic Affairs

ii


CERTIFICATE OF ORIGINALITY

iii


ACKNOWLEDGMENT

On completion of this dissertation, the author has received significant
support and cooperation from many organizations and individuals.
Firstly, I would like to thank Leaders of Southern Luzon State
University and Thai Nguyen University for their training collaboration program
which gave me an opportunity to participate and conduct the research for the
degree of Doctor of Business Administration that I have long cherished.
I would like to express my appreciation to Dr.Conrado L. Abraham, Dr.

Milo O. Placino, Dr. Do Anh Tai for the kindly guidance on the research
proposal that helped me focus to the significant objectives of the dissertation.
I gratefully acknowledge Dr. Cecilia N. Gascon, Dr.Walberto A.
Macaraan, Dr. Joanna Paula A. Ellaga, Dr. Eduardo T.Bagtang, Dr. Edwin P.
Bernal specifically for their comments during the oral defense that helped me
improve the analysis of the findings of my dissertation.
Especially, I would like to take this opportunity to express my profound
gratitude and deep respect to Dr. Nelly I. Mendoza for the precious
assistance and pieces of advice that she gave to complete my dissertation.
I would like to thank the faculty members, staff and leaders of the
International Training Center, Graduate School of Thai Nguyen University who
have provided me with study facilities, materials and dynamic academic
environment. I also express my acknowledgement to the managers and staff
of the State Bank of Vietnam, Ministry of Information and Communication,

iv


General Statistic Office, Commercial Banks, Mobile Operation Networks for
their cooperation and support during information and data collection.
I am greatly indebted to my friends and colleagues who have
encouraged me to overcome many difficulties during the past hard times.
They have shared their views and ideas on the dissertation as well.
Last but not least, many thanks go to my family. They are always
beside me and motivated me through the duration of my studies.

Vu ManhCuong

v



DEDICATION

To my parents who always encouraged me to learn and study,
To my supportive wife, Tran ThanhThuy,
who always takes care of me
with attention and understanding,
To my energetic sons, Vu Minh Thanh& Vu Minh Duc,
who inspire me
to pursue my goal,
This piece of work, I owe to you.

VMC

vi


TABLE OF CONTENTS
PAGE
TITLE PAGE ………………………………………………………………..

i

APPROVAL SHEET ……………………………………………………….

ii

CERTIFICATE OF ORIGINALITY ………………………………………..

iii


ACKNOWLEDGEMENT …………………………………………………..

iv

DEDICATION ………………………………………………………………

vi

TABLE OF CONTENTS …………………………………………………..

vii

LIST OF TABLES ………………………………………………………….

ix

LIST OF FIGURES ………………………………………………………...

x

ABBREVIATIONS ………………………………………………………….

xi

LIST OF APPENDICES …………………………………………………...

xiii

ABSTRACT …………………………………………………………………


xiv

CHAPTER
I

II

III

INTRODUCTION ……………………………………………

1

Background of the Study …………………………………..

4

Statement of the Problem ………………………………….

5

Objectives of the Study …………………………………….

8

Hypothesis of the Study ……………………………………

9


Significance of the Study …………………………………..

10

Scope and Limitations of the Study ………………………

11

Definition of Terms ………………………………………….

12

REVIEW OF LITERATURE ……………………………….

14

Conceptual Framework ………………………………….…

58

METHODOLOGY …………………………………………..

61

Locale of the Study …………………………………………

61

Research Design ……………………………………………


62

Determination of Sample Size …………………………….

67

Sample Design and Techniques …………….……………

68

Research Instrument ……………………………………….

70

vii


IV

Data Gathering Procedure …………………………………

70

Data Processing Method …………………………………..

71

Statistical Treatment ………………………........…….……

72


RESULTS AND DISCUSSIONS ………………………….

79

4.1 Profile of the Respondents ……………………………

79

4.2 The Purposes of the Use of Mobile Banking
Services …………………………………………………

83

4.3 Determine the Differences in the Use of Mobile
Banking Services ………………………………………

91

4.4 Ascertain the Factors Affecting the Use of Mobile
Banking Services ………………………………………

97

4.5 Analysis on the Level of Influences of the Different
Factors …………………………………………………..

V

103


SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
Summaryof Findings ………………………………………

114

Conclusions …………………………………………………

119

Recommendations …………………………………………

121

REFERENCES ………………………...…………………………………..

127

APPENDICES ……………………………………………………………...

137

CURRICULUM VITAE …………………………………………………….

170

viii



LIST OF TABLES
TABLE

PAGE

2.1

List of Mobile Banking Services in Vietnam

33

2.2

Theory-Based Empirical Research in Mobile Banking

47

3.1

The Measure Indicators for Customer Behavior

65

3.2

Sampling Allocation

69

3.3


Reliability Analysis of Scale

76

4.1.1

Profile of the Respondents

80

4.1.2

Time Needed to Travel to the Nearest Bank

81

4.1.3

Usage Status of the Mobile Banking Services

82

4.2.1

The Purposes of the Use of Mobile Banking Services

83

4.2.2


The Purposes of Use Mobile Banking Services by Age

84

4.2.3

The Purposes of Use Mobile Banking Services by Gender

86

4.2.4

The Purposes of Use Mobile Banking Services by
Occupation

87

4.2.5

The Purposes of Use Mobile Banking Services by Income

88

4.2.6

The Purposes of Use Mobile Banking Services by
Educational Level

90


4.3.1

Test Results for the Differences of the Use

91

4.4.1

Factor Analysis Results

98

4.4.2

Correlations Matrix

102

4.5.1

Results of Regression Analysis

104

4.5.2

Nonparametric Correlations

111


ix


LIST OF FIGURES
FIGURE
1

PAGE
Electronic Business, Mobile Business and Mobile
Commerce

25

2

Mobile Banking Architecture

28

3

Mobile Banking Technology Model

30

4

Factors Affecting Consumer Behavior


36

5

Theory of Reasoned Action

40

6

Theory of Planned Behavior

41

7

Technology Acceptance Model

43

8

The Conceptual Framework

59

9

Map of Hanoi, Vietnam


62

10

Research Process

63

11

Adjusted Research Model

101

12

Chart of Standardized Residuals and Residual Predicted
Value

111

Chart of Residual Distribution

112

13

x



ABBREVIATIONS

AT

Austria

BE fr

Belgium/French Community

BE nl

Belgium/Flemish Community

BG

Bulgaria

BPNT

Basic Psychological Needs Theory

CET

Cognitive Evaluation Theory

CH

Switzerland


COT

Causality Orientations Theory

CY

Cyprus

CZ

Czech Republic

DE

Germany

DK

Denmark

EE

Estonia

ES

Spain

FI


Finland

FR

France

GCT

Goal Contents Theory

GDV

General Department of Vocational

GR

Greece

HNETO

Hanoi Education and Training Office

HR

Croatia

HRM

Human Recourse Management


HU

Hungary

IS

Iceland

IT

Italy

LT

Lithuania

LU

Luxembourg

LV

Latvia

MOET

Ministry of Education and Training

MOLISA


Ministry of Labour - Invalids - Social Affairs

MT

Malta

xi


NL

Netherlands

NO

Norway

OEI

Occupational Education Institution

OIT

Organism Integration Theory

PIED

Professional Intermediate Education Department

PIS


Professional Intermediate School

PL

Poland

PT

Portugal

RO

Romania

RS

Serbia

SDT

Self-Determination Theory

SE

Sweden

SI

Slovenia


SK

Slovak Republic

TR

Turkey

UK

United Kingdom

VC

Vocational College

VS

Vocational School

xii


LIST OF APPENDICES
APPENDIX

PAGE

1


Questionnaire

138

2

Descriptive Statistics

142

3

Reliability Analysis - Scale (Alpha)

144

4

Factor Analysis

150

5

Regression

155

6


The Difference Analysis

159

7

The Difference of Individual Elements

161

`

xiii


ABSTRACT
Title of Research

: FACTORS AFFECTING THE USE OF MOBILE

BANKING SERVICES IN HANOI, VIETNAM
Researcher

: VU MANH CUONG (CAMERON)

Degree Conferred

: DOCTOR OF BUSINESS ADMINISTRATION


Name and Address
of Institution

: Southern Luzon State University Lucban, Quezon,
Philippines and Thai Nguyen University, Socialist
Republic of Vietnam

Adviser

: Dr. Nelly I. Mendoza

Year Written
: 2013
______________________________________________________________

The dissertation aimed to investigate and assess the factors that
influence the use of mobile banking services in Hanoi by extending the
renowned framework of Technology Acceptance Model (TAM).
The survey was conducted in 9 districts of Hanoi with 800 respondents,
in which there were 717 useable responses which were comprised of 52%
female and 48% male. Five components of parameters were used to focus on
the aspects of usefulness, ease of use, cost, risks and trust in the use of
mobile banking services in Hanoi.Cronbach's Alpha was used to test the
reliability of the instrument. ANOVA, factor analysis, correlation and
regression analysis were used to test hypothesis and investigate the factors
affecting the use of mobile banking services. The analysis showed that Fstatistics was significant at 1 percent level presenting the fitness of the model.
The coefficient R2 adjusted was 0.331 indicates that 33.1 percent of the
changes in the use of mobile banking services can be explained by the
changes in the independent variables.
The results indicated that most consumers use mobile banking

xiv


services to check the bank account and transfer money. The other purposes
such as to pay monthly bills, pay for shopping, and saving money were
modest. There is no significant difference between age group, gender,
working areas, level of income and educational attainment in the use of
mobile banking services. But, for individual factors, significant differences
were found by demographic characteristics.
The study also revealed that in the six factors studied, there are five
factors affecting the use of mobile banking services which are statistically
significant at 1% level namely (i) trust of consumers, has the most powerful
positive influence, (ii) perceived ease of use, has the second powerful positive
influence, (iii) perceived usefulness, has the third positive influence, (iv)
perceived risks on safety and society, has the strongest negative influence,
(v) perceived risks on performance and finance, has the weakest negative
influence. However, perceived cost was found to have no significant
relationship on the use of mobile banking services.
The

research findings

provided

several important and

useful

implications for the mobile banking service providers with the in-depth
strategic insights to improve the present services to increase the number of

users in Hanoi particularly and Vietnam generally.

xv


1

Chapter I
INTRODUCTION

The rapid development of science and technology, particularly
information technology, has affected all aspects of life socio-economics of
Vietnam.This development process has changed the perception on the use of
high-tech services in many areas, many different economic sectors,
especially in the field of telecommunications, finance and banking. Online
transactions, payment on internet as well as mobile network, etc. have
become the development and competition trends of integrated service
providers in Vietnam.

Development of banking services based on mobile phone technology
has become the objective and inevitable trend during the international
economic integration progress more and more deeply in Vietnam. The
development of mobile banking services has brought about significant
benefits to customers as a convenient, fast and accurate of the transaction. At
the same time it also opens up new development opportunities for the
telecommunications providers, application and software developers, ecommerce merchants, bankers, etc. in Vietnam.

Mobile banking services are tools that permits the user to carry out
transactions with his bank via cell phone. Theconcept of this service had been
raisedsince late 20th Century. Traditional payment methods such as bank

transfer, credit card, debit card, bank notes, etc. have been helping the
payment-via-bank being convenient and popular in several developed


2

countries. Buyers will not need being face-to-face with seller, and cash
becomes useless. Everything has its pros and cons.The traditional payment
methods have certain limitations. For examples, bank transfer and notes
transactions must be performed within work time and places; credit/debit
cards depend on sellers and the card itself.

From early 21st century, internet banking has been emerging and
serving consumers with certain conveniences as a means of payment. Buyers
can make payment from anywhere and at any time. However, some online
security limitations lead to the imposture of banking cards to thieve money in
several countries. Consequently, consumers become hesitant to use internet
payment. In comparison with stated payment methods, mobile banking has
been less risky by transaction process while still providing users with
convenience and high security. However, this service is not yet popular in
Vietnam so far although a lot of banks are ready to make use of it.

According toThe State Bank of Vietnam, in front of the fast and strong
development of information technology and telecom, Vietnam Prime Minister
signed Decision No. 2453/QD-TTg approving the project to promote non-cash
payment period 2012-2015, in which, electronic payments are a key task of
the project. The purpose of the decision is to reduce the consumption of cash
and create consumer habits of non-cash transactions in large populations
(Tien, 2012). General Director of State Bank of Vietnam in HCMC said: many
people use mobile for payment as modern payment methods and targeting

high-tech is a perfect fit. The investment of banks to develop mobile payment
is a trend worth encouraging. With the same vision, Leaders of VietABank


3

said, developing money transaction services to a large extent through mobile
phone is a new trend of the banking sector, although some banks start to
provide the trial basic package but they have successfully implemented.

The

ubiquity

of

mobile

phones

is

changing

the

way

for


consumeraccess to financial services. Mobile banking is a developing feature
in some countries. Some new services allow consumers to get account
information and conduct a monetary transaction with the banks (named
“mobile banking”) and others allow consumers to make a payment for goods
and services (“mobile payments”).Since 2009, many banks in Vietnam have
invested very much on technological infrastructure, diversified banking
products and services, improved service quality, and built multi-channel
service systems (Tam, 2012). Mobile phones and mobile internet access are
in widely used in Vietnam. But, mobile banking is still not popular. Sometimes
it is ambiguous or expensive in the mind of many customers.

In brief, Vietnam has more than 90 million population (GSO,2013),
120.7 million are mobile subscribers, 15.5 million fixed subscribers, over 31%
rate of people use the internet regularly, 30.2 million mobile users and (MIC,
2012), 44 bankers with high-tech infrastructure (SBV,2013), and more than
400 value added service providers (MIC,2013).It should be a great
potentialmarket

for

the

development

of

high-tech

financial


services

products,but mobile banking just stop at checking bank account, paying for
telephone fee (top-up) in a small set of customers, pay for monthly bills (such


4

as electricinvoice) in some areas, and pay for purchase in simple business
transactions (e.g. air-tickets). It is really not popular in Hanoi, Vietnam.

Background of the Study
The study of consumer behavior is an important part of the research
needs of the customers. To succeed in any business at all the fields,
especially in fast growing and dynamic markets as today's, entrepreneurs and
marketers need to know clearly their customers’ needs, convenience,
difficulty, suitable time, etc. It needs to understand completely the factors
affecting the consumers' decisions and how customer makes a buying
decision.
Numerous theoretical models have been launched and continuous
improvement is being done to serve the behavioral research, human behavior
in general and then apply to the study and interpretation of consumer
behavior. Most notably is the Theory of Reasoned Action Models introduced
by Ajzen & Fishbein (1975), often referred to TRA modeland then extended
into TPB model (Ajzen, 1991). Davis (1989) has applied this theory to build
theTechnology Acceptance Model (TAM), and then Venkatesh & Davis
(2000) has built Technology Acceptance Model 2 (TAM2).
Thousands of studies have applied TAM model to explain the behavior
of using integrated technology services on many different areas in many
countries around the world. In the technology service sector in general and

mobile banking services in particular, the choice and use of customer also
comply the basic principles of psychology and behavior, but specific


5

expression of consumer behavior in these situations, conditions and
environment are totally different. This has made the line of research on
consumer behavior to continue incessantly.
In recent years, e-banking services have attracted the attention of
researchers, managers and leaders.There are a lot of studies insome
countries around the world, such as China, Philippines, Brazil, Mexico,
Malaysia, South Africa, Indonesia, Singapore, India, Latvia, Australia, United
Kingdom etc.,but in-depth studies of this field in Vietnam were very rare. So
far there is no research about the use of mobile banking services in the area
of Hanoi specifically.
Stemming from such pressing issues, this study was conducted to
explore the factors that influence the use of mobile banking services by
customers in Hanoi, Vietnam. The study will contribute to identify and propose
policy for the development of these services in the near future.

Statement of the Problem
Mobile banking servicebring the significant benefits directly to
customers as a convenient, fast and accurate transaction. It helps customer
perform the banking requests anywhere and anytime with a cell phone.This
servicesupportsbankers saving operation cost such as branchless, cashless,
paperless,

etc.


It

givesthe

chance

to

increase

the

number

of

customers,especially in the segmentation where people find difficultyto goto
the bank directly due to limitation of working time or geographical location.
Also, retailers can push the sale strongly by integrating mobile banking


6

services to the commercial activities. For the society, mobile banking services
can contribute to alter the consumer’sbehavior towards a cashless society in
the future.
Vietnam isa full potential marketfor the mobile banking services with
120.7 million mobile subscribers and 44 banks with high-tech infrastructure
(SBV, 2013).But,up to 2013, mobile banking service is considered primitive
and emerging in Vietnam (IDC, 2012).

Mobile banking service has been introduced quite late compared to
other countries in the region. There are 26 banks providing SMS banking that
attracted 4.1 million users.A total of19 banks stated that theyprovide mobile
banking, but there are not so many transactions performed through mobile
banking yet.Almost all consumers keep the purchase habits by cash (Son,
2013).
The researchinvestigated the factors affecting the use of mobile
banking services in Hanoi and providedsomeimportant and useful implications
for the mobile banking service providers with the in-depth strategic insights to
improve the mobile banking services to get more and more customer
acceptance in Hanoi, Vietnam, graspingcertain problemsthat can promote
robustly the development of mobile banking services in Vietnam.
For the past years, no study has been conducted to see what are the
factors affecting the use of mobile banking services in Hanoi.The research
was conducted to meet the objectives of the study and answer the following
questions:


7

Research Questions:
1. What are the demographic characteristics of the respondents in terms
of:
a) Age
b) Gender
c) Occupation
d) Income
e) Educational attainment
2. What are the purposes of the use of mobile banking services by
consumers in Hanoi?

3. What are differences in the use of mobile banking services by
demographic characteristics?
4. What are factors affecting the use of mobile banking services by
customers in Hanoi?
a) Does trust of consumer impact positively to the use of mobile
banking services in Hanoi?
b) Does perceived ease of use impact positively to the use of mobile
banking services in Hanoi?
c) Does perceived usefulness impact positively to the use of mobile
banking servicesin Hanoi?
d) Does perceived risks impact negatively to the use of mobile banking
services in Hanoi?
e) Does perceived costs impact negatively to the use of mobile
banking services in Hanoi?


8

5.

What are the level of influence of the different factors to the use of
mobile banking services by customers in Hanoi?
All above questions were answered in the section onfindings of this

dissertation. The research objectives are stated as follows:

Objectives of the Study
The overall objective of the research is to analyze the consumer
behavior in the use of mobile banking services in thearea of Hanoi, Vietnam.
The study specifically sought to:

1. determine the demographic characteristicsof the respondentsas to:
1.1 Age,
1.2 Gender,
1.3 Occupation,
1.4 Income, and
1.5 Educational attainment;
2. find out the purposes in the use of mobile banking services as to
demographic characteristics of consumers;
3. determine the differences on the use of mobile banking by
demographic characteristics;
4. ascertain the factors affecting the use of mobile banking services by
consumers as to:
4.1 Trust of customers,


9

4.2 Ease of use,
4.3 Usefulness,
4.4 Risk on Safety and Society,
4.5 Risk on Performance and Finance,
4.6 Cost; and
5. analyze thelevel of influence of the different factors.

Hyphothesis
Mobile

banking

services


is

still

relatively

new

to

many

Vietnamese.Awareness of the benefits that services bring them is not yet fully
complete.Basedon the theory of behavior, the theory of technology
acceptance model, related theories, and the results of previous studies,
thisresearch focuses on some important aspects of the mobile banking
services for the consumers in Hanoi as the research objectives, the
hypothesis are stated as following:
H1:

There is no significant difference in the use of mobile banking services
as to the demographic characteristics

H2:

Perceived usefulness of mobile banking services has a positive impact
to the use of the services

H3:


Perceived ease of use of mobile banking services has a positive impact
to the use of the services

H4:

Perceived costs to use mobile banking services have a negative impact
to use the service


10

H5:

The trust of customers on mobile banking services has a positive
impact to the use of the services

H6:

Perceived risks of customers for mobile banking services have a
negative impact to the use of the services

Significance of the Study
Regarding Scientific
First, the thesis systematized the basis of the theory of consumer
behavior particularly the Theory of Technology Acceptance Model (TAM).
Second, the thesis has built a research model of consumer's behavior
inthe use of mobile banking services in Hanoi.
Regarding Practice
First, the study enriched the practical research in the field using mobile

banking services in Hanoi, Vietnam.
Second, the study outlined a comprehensive picture of the use of
mobile banking services in Hanoi andidentified the major factors affecting the
use of the services by customer in the study area.
Third, the study provided recommendations onthe policy for the mobile
banking service providers in Hanoito improvemobile banking services in
Vietnam.
Fourth, the study can be a good reference material for managers,
service providers, researchers and practitioners, universities in Vietnam and
other concerned international agencies.