Chapter 3 Mobile Banking Technologies and Various Adoption Models

Transcription

1 Chapter 3 Mobile Banking Technologies and Various Adoption Models

2 CHAPTER - 3 MOBILE BANKING TECHNOLOGIES AND VARIOUS ADOPTION MODELS This chapter contains the Mobile banking technologies, Empirical and Theory based Mobile banking adoption models. These models like TAM,TRA, TPB, DTPB and IDT indicates were regularly engaged to examine all influences factors of Mobile banking adoption and other Mobile banking technologies like IVR, WAP, SMS, USSD,J2ME etc. originate core determinants to defines the adoption of Mobile banking facility and its chapter also contains the Components and Associates of Mobile banking and participations of Mobile banking services. 3.1 Mobile Banking Integration The Mobile banking technology is the most similar to the Web banking paradigm. It requires an application either a Browser based like Opera Mini, Firefox, Internet Explorer and a more advanced mobile phones to run it. A Smartphone is a Mobile device with more superior computing capability and internet access applications. A Smart device has a large display menu with internet facility and a highly version Operating system like android, capable of running general purpose applications. In Mobile banking services a lot of integration is involved in different activities. There are Four Primary Players involves in delivery of a Mobile banking services to the Customers. A Bank Organization A financial establishment a bank invests finance deposited by Customers, pays it out as per requirement and bank accept deposits, clear check/money and other financial transactions to customers.

3 Mobile Banking Technologies and The Customer The Bank Organizations and Mobile Network Operator appears as to have taken an interest and realized the potential value of exploring the Mobile device amongst their respective customer bases. Some private and public banks can realize the full potential of Mobile banking facility by offering customers experiences. The Mobile Network Operator The Customer is provided the Mobile Banking services through the Mobile Network Operator. The Mobile Banking Technologies Vendors The Mobile banking Technologies vendors to communicate with customers via SMS banking that are allowed by banks. The bank facilities like Credit limit alert, notification of transactions or other alert messages provided by Mobile banking. Mobile banking clients can withdraw money from authorized banks when an ATM machine is not available. They can use SMS to transfer money between accounts, pay various bills and also move money between private individuals. 3.2 Components of Mobile Banking Platform There are following four Components of Mobile Banking Platform. Application Development Environment(ADE) The Application Development Environment offers the actual service to the Customers, such like Banking Menus and Commands. The Application Development Environment promotes the intelligence delivered to the customers Handset, both side Client or Server Side. Network Bearer Channels(NBC) The Network Bearer Channels carries main data and other Services. The aim of the Network Bearer Channels is to carry the contents of the Bearer Channel visibly between the endpoints of the call. The Bearer Channel is the Channel that carries the main data and to facilitate the usage of the network s bearer channels and the mobile service would require integration into an MNO.

4 Mobile Banking Technologies and Data Repository Store (DRS) For the processing of financial transactions the data store has enough customer information like Customer Name, Account Number and Total Amount etc. The data repository would also have sufficient information to validate the Customer in each and every transaction. By housing transactional and Consumer data, the Repository would also facilitate Customer Care and the settlement of certain financial transactions that use the Application Development Environment to fulfill services. Financial Switch (FS) The Financial Switch would act as the mediator to the banking system. Directions composed by the Application Development Environment through the MNO interface and using data from the data repository are translated through the financial switch into a transaction format. Data Repository Network bearer Mobile Banking Components Application Development Financial Switch Figure: 3.1 Components of Mobile Banking Platform

5 Mobile Banking Technologies and Mobile Banking Technologies Mobile Banking Technologies can be categorized into two environments: Server Side Technology: Server-Side Technologies are those applications built on a server side away from the customers SIM or Mobile devices. In Server-Side Applications, customer data that enables the processing of transactions are typically stored in a highly secured environment, on a Server Side. Examples of Server-Side Technologies are Interactive Voice Response (IVR), Short Messaging Service (SMS), Wireless Access Protocol (WAP) and Unstructured Supplementary Service Data (USSD). Mobile Banking is being deployed using Mobile applications developed on one of the following six technologies. Interactive Voice Response(IVR) Interactive Voice Response is the conventional technology. This is the form of customer face to face interaction Mobile banking technology. Interactive Voice Response is an automated telephonic System that interacts with Callers; collect information and routes calls to the appropriate recipient. An IVR system takes a combination of voice telephone input and touch-tone keypad selection. IVR provides appropriate responses in the form of voice, fax, and through other media. IVR applications are programs that control and respond to calls on the IVR platform. IVR applications can either be developed by an enterprise, by an IVR development shop or by other IT companies that offers IVR applications. Interactive Voice Response have a pre specified numbers and IVR service operates through pre-specified numbers that banks advertise to their customers. Customer's make a call at the IVR pre specified number and are usually greeted by a stored electronic message followed by a menu of different options. Customers can choose any required options by pressing the corresponding number in their keypads and then interpret the corresponding information.

6 Mobile Banking Technologies and An IVR system consisting of telephonic device, Software applications, Backend servers, which include databases, mainframes, Java platform or other application servers, third Party information services and a supporting infrastructure. IVR includes some below information like: Banks and Stock account balances related information. Money transfers related information. Office calls routing, Call Center forwarding and Entry transactions information. Telephony infrastructure includes Telephone lines, Call switching tools and Call Center Automatic Distributors etc. Limitations of IVR IVR has some major limitations. IVR can be used only for Enquiry based services. IVR is more expensive as compared to other channels as it involves making a voice call which is generally more expensive than sending an SMS or making data transfer. Steps of Using IVR There are following steps of using IVR Technology: Firstly IVR allows a telephone caller, to select options from a voice menu of banking and interact with the mobile device. After that a pre-recorded voice menu is displayed and the caller presses a number for example Press 1 button for Yes, press 2 button for No indication" on a telephone keypad to select an option. Then Speech recognition machine can also understand the caller's simple spoken answer such as "Yes", "No" or a number as a valid response to the voice menu. After three steps IVR requires registered customers to make a call to a pressed telephone number and be answered by a pre-recorded voice that represent a various menu options to the bank customer.

7 Mobile Banking Technologies and After that The IVR system would then take the necessary directions from the customer by recording the tones of the customers enters on the key pad like Yes/No or through spoken commands and creates an instruction that is given to the service provider. The service provider would use the customer Mobile number forwarded by the network operator to identify as verification. Figure: 3.2 Interactive Voice Responses (IVR) Short Messaging Service(SMS) SMS Banking allows firstly access own bank accounts and then carry out various banking transactions and services. The SMS facility conducts the following operations using the messaging services of service provider. Balance Enquiry Last Few Transactions Cheque Paid Status Suspend ATM / Debit Card Loan Balance Enquiry Deposit Service SMS Banking sends many alert facilities to customers. There are two types of services available, SMS PUSH Alerts and SMS PULL Alerts.

8 Mobile Banking Technologies and A) SMS PUSH Alert Services: To send an alert message when the account balance goes above the maximum balance specified by the customers. To send an alert when the transaction amount credited is Rs. 5,000 and above or the amount specified by the customer, whichever is higher. To send reminding alert seven days before the maturity of the term deposit accounts and reminding alert seven days before the installment due date for the loan accounts. To send an alert when the transaction amount is debited and when a cheque is bounced. To send the end of day balance of the specified account given by the customer. B) SMS PULL Alert Services: Account Balance enquiry Mini Statement request Various E- Bill payments Foreign currency exchange rates enquiry Fixed deposit interest rates enquiry. Transfers between customers own accounts Requesting for an debit credit card to be suspended De-activating a credit or debit card when it is lost An SMS based service is hosted on a SMS gateway at further connects to the Mobile service providers SMS Centre. This Figure 3.3 shows the infrastructure of SMS Technology:

9 Mobile Banking Technologies and Figure: 3.3 Short Messaging Service (SMS) Wireless Access Protocol (WAP) Wireless Access Protocol uses a similar concept that used in Internet banking. Banks maintain WAP sites which customer's access using a WAP compatible browser like Google Chrome, Vista etc. on their Mobile phones. WAP sites offer the familiar form based interface and can also implement security quite effectively. WAP specifies an application framework and protocols for wireless devices. A WAP based service requires hosting a WAP gateway. Mobile Application users access the bank's site through the WAP gateway to carry out transactions much like Internet users access a web portal for accessing the banks services. The banks customers can now have an anytime, anywhere access to a secure reliable service that allows them to access all enquiries, transaction based services and also more complex transaction like trade in securities through their Mobile devices. WAP specifies an application framework and protocols for wireless devices. WAP is a kind of fusion of Mobile Networking Technologies and Internet Technologies. The key features of WAP including programming models and Wireless Markup Language. This language is especially for specifying and displaying content

10 Mobile Banking Technologies and on WAP devices.wml is part of the WAP application environment which requires the use of WML.WML works with the Wireless Access Protocol. This browser is cognizant of the limited capabilities of WAP devices like small displays, Limited processing power, Limited memory, Narrow bandwidth connection and Limited battery use without recharging. Wireless Telephony Application provides extensions for telephony services like call features control mechanisms, voice mail, messaging, phone-book management etc. The following figure 3.4 demonstrates the framework for enabling Mobile applications over WAP. The Mobile applications are stored on a WAP server. The WAP Gateway forms an access point to the internet from the Mobile service center. Figure: 3.4 Wireless Access Protocol (WAP) Unstructured Supplementary Service Data (USSD) USSD is a session based technique and can provide an interactive dialog between the users and a certain set of applications. USSD is a menu driven technique of SMS where a customer would receive a text menu on their Mobile phone. USSD is a data bearer channel in the GSM network like SMS, it transports small messages of upto 160 characters between the Mobile handset and the network. USSD is a standard based technique has same features like SMS technique. USSD requires no pre-configuration on the customer SIM or handset and it is already built into most GSM networks. Mobile Network Operators do, however,

11 Mobile Banking Technologies and need to commercialize the product by establishing the necessary bearer channel billing capability and promoting the use of USSD for value added services. Both sides of the dialogue happen during a session whereas an SMS based interaction is broken into each segment of communication between the client and the service. There are two types of communication allows in USSD Technique: USSD1 only allows one way communication to the network. The interaction between the user and the service would be broken into each communication segments, like SMS segments. USSD2 allows two way communications between the user and the network. It would be held in the same session and allow for a flowing conversation between the user and the service. This is similar to and instant messaging. waits for the recipient to read and respond while as instant messaging allows for immediate dialogue Client-Side Technology Client Side Technology is those applications, solutions and services offerings built or embedded on a consumer SIM or Mobile handset. Examples of Client-Side Applications are SIM Based Applications Toolkit (SAT) and Java 2 Micro Edition (J2ME). In Client-Side Applications, the customer data is typically stored on the application or entered by the customer side and encrypted by the application in the SIM. Most of Mobile banking services can be deployed using more than one technology or channel. SIM Based Applications Toolkit (SAT) The SIM Based Application Toolkit is a standard of the GSM system which enables the SIM to initiate actions which can be used for various value added services. The SIM Application Toolkit consists of a set of commands programmed into the SIM card which define how the SIM should interact directly with the customer and initiates commands independently of the handset and the network.

12 Mobile Banking Technologies and This enables the SIM to build up an interactive exchange between a network application and the end user. The SIM also gives commands to the handset, such as display menu. Java 2 Micro Edition(J2ME) Standalone Mobile application is a Java 2 Micro Edition (J2ME) Technique. It holds out the most promise as they are most suitable to implement complex banking transactions like trading in securities. If Mobile client wants to use Standalone Mobile Application on their Mobile device, which require to be downloaded on that device, which further requires the Mobile device to support one of the many development environments like J2ME or Qualcomm's BREW. J2ME is fast attractive technique to deploy the Mobile applications and requires the Mobile phone to support Java platform. They can be easily customized according to the user interface complexity supported by the Mobile. The Demerit of Mobile application clients is that the applications need to be customized to each Mobile phone on which it might finally run. J2ME connect together the Application Programming Interface for Mobile phones which have the similar functionalities. API Specify a set of functions that complete a specific task and allowed to interact with specific software components Merit of using a Mobile application client is that it can implement a very secure and reliable channel of communication with end-to end encryption. 3.4 Mobile Banking Adoption Models: The following Six Mobile Banking Adoption Models: The Theory of Reasoned Action (TRA) The Theory of Reasoned Action (TRA) proposed by Fishbein and Ajzen in 1975.This Model predict the people behavior in a specific situation. It is a wellknown model in the social psychology domain. According to TRA Model a person s

13 Mobile Banking Technologies and actual behavior is driven by the intention to perform the behavior. Individual attitude towards the behavior and subjective norms are the loading factors towards behavioral intention. Attitude is a person s positive or negative feeling and tendency towards an idea or behavior. Subjective norm is defined as an individual's perception of whether people important to the individual think the behavior should be performed. This below figure 3.5 represents the TRA Model structure. Figure: 3.5 Theory of Reasoned Action (TRA) Technology Acceptance Model (TAM) TAM Model is an adaptation of the Theory of Reasoned Action (TRA) Model to the field of IS. This TAM Model was proposed by Venkatesh et. al. in TAM posits that perceived usefulness and perceived ease of use determine an individual's intention to use a system with intention to use serving as a mediator of actual system use. Perceived usefulness is also seen as being directly impacted by perceived ease of use. Researchers have simplified TAM by removing the attitude construct found in TRA from the current specification. Attempts to extend TAM have generally taken one of three approaches: First approach is introducing factors from related models. Second approach is introducing additional or alternative belief factors And Third approach is examining antecedents and moderators of perceived usefulness and perceived ease of use (Wixom and Todd, 2005).

14 Mobile Banking Technologies and Both models TRA and TAM models have strong behavioral elements and assume that when someone forms an intention to act, that they will be free to act without limitation. In practice constraints such as limited ability, time, environmental or organizational limits and unconscious habits will limit the freedom to act. This below figure 3.6 shows the TAM Model. Figure: 3.6 Technology Acceptance Model (TAM) Improved Technology Acceptance Model 2 (TAM 2) A study of the adoption of telemedicine technology by physician using TAM has found relatively low explanation power of TAM of attitude and intention (Hu et al., 1999). The researchers suggested that integration of TAM with other IT acceptance models or incorporating additional factors could help to improve the specificity and explanatory utility in a specific area. Researchers have begun to use TAM to examine the possible antecedents of Perceived Usefulness and Perceived Ease of Use toward microcomputer usage (Igbaria, Guimaraes, Davis, Iivari, and Maragahh, 1995). In order to address this issue, Venkatesh and Davis (1996) used three experiments to investigate the determinants of Perceived Ease of Use. The results showed that general Computer Self-Efficacy significantly affects Perceived Ease of Use at all time, while Objective Usability of the system affects user s perception after they have direct experience with the system. However, one criticism of the current TAM studies is that there are

15 Mobile Banking Technologies and very few investigations target at the study of the factors (the external variables) that affect the PU and PEOU (Gefen and Keil, 1998). Venkatesh and Davis (2000) developed and tested a TAM2 model by including a number of determinants to Perceived Usefulness into the new model.it is a theoretical extension of the Technology Acceptance Model that explains Perceived Usefulness and Usage Intentions in terms of social influence processes (Subjective Norm, Voluntariness, and Image) and cognitive instrumental processes (Job Relevance, Output Quality, Result Demonstrability and Perceived Ease of Use). Longitudinal data were collected from four different organizations that spanned a range of industries, organizational contexts, functional areas (ranging from small accounting service firm, medium-sized manufacturing firm, to the personal financial services department of a large financial services firm) and types of system being introduced. The results showed that all the above-mentioned social influences and cognitive instrumental processes have significantly influenced user acceptance of the systems. This below Figure 3.7 shows the outline of TAM 2. Figure: 3.7 Improved Technology Acceptance Model 2 (TAM 2)

16 Mobile Banking Technologies and Diffusion of Innovations Theory (DIT) Next another well established theory research model for user adoption is DIT. It is proposed by Rogers in 1962, 1983, Innovation diffusion theory is achieved through user s acceptance and use of new innovative ideas or things (Zaltman and Stiff, 1973). The theory explains among many things such like the process of the innovation decision process, the determinants of rate of adoption and various categories of adopters. It helps predict the likelihood and the rate of an innovation being adopted. Rogers (1995) proposed an innovation s relative advantage, compatibility, complexity, trialability and observability were found to explain 49 to 87 percent of the variance in the rate of its adoption Theory of Planned Behavior Model (TPB) Theory of planned behavior is defined by Fishbein and Ajzen, Theory of planned behavior posits that individual behavior is driven by behavioral intentions where behavioral intentions are a function of an individual's attitude towards the behavior, the subjective norms surrounding the performance of the behavior and the individual perception of the ease of use with which the behavior can be performed. Attitude towards the behavior is defined as the individual's positive or negative feelings about performing a behavior of person. It is determined through an assessment of one's beliefs regarding the consequences arising from a behavior and an evaluation of the desirability of these consequences. Formally, overall attitude can be assessed as the sum of the individual consequence x desirability assessments for all expected consequences of the behavior. Subjective norm is defined as an individual's perception of whether people important to the individual think the behavior should be performed. The contribution of the opinion of any given referent is weighted by the motivation that an individual has to comply with the wishes of that referent. Hence, overall subjective norm can be expressed as the sum of the individual perception x motivation assessments for all relevant referents.

17 Mobile Banking Technologies and Behavioral control is defined as one's perception of the difficulty of performing a behavior. TPB views the control that people have over their behavior as lying on a continuum from behaviors that are easily performed to those requiring considerable effort, resources etc. The below figure 3.8 shows the TPB Model. Figure: 3.8 Theory of Planned Behavior Model (TPB) Unified Theory of Acceptance and Use of Technology (UTAUT) Venkatesh et al. (2003) proposed the Unified theory of acceptance and Use of technology (UTAUT) Model. This model is composition of eight famous models like - TRA, TAM, Motivational Model, TPB, Combined TAM-TPB, PC Utilization, IDT and Social Cognitive Theory models. The UTAUT aims to explain user intentions to use an information system and subsequent usage behavior. The theory holds that four key constructs such as Performance expectancy, effort expectancy, social influence and facilitating conditions are direct determinants of usage intention and behavior. Gender, Age, experience and voluntariness of use are posited to moderate the impact of the four key constructs on usage intention and behavior.

18 Mobile Banking Technologies and Figure: 3.9 The Unified Theory of Acceptance and Use of Technology (UTAUT)