Toruń, 21 August 2017 Dr hab. Michał Polasik Financial Management Department Faculty of Economic Sciences and Management Nicolaus Copernicus University in Toruń Evaluation of the doctoral thesis of Laith Talal Khrais, Technology Acceptance Factors Determining Online Banking in a Developing Economy: The Case of Jordan Poznań 2016 The doctoral thesis was prepared in the Money and Banking Department at the Faculty of Economics of Poznań University of Economics and Business under the supervision of dr hab. Michał Jurek, prof. UEP. The dissertation has 160 pages and was written in English. 1. The doctoral thesis' subject matter The dissertation concerns an important problem of the use of online banking by consumers in Middle East countries. The issue is scientifically relevant because it touches upon two processes which are key for social and economic development: the spread of modern information technologies and inhabitants access to banking services. The use of Information and Communication Technologies (ICT) requires the simultaneous development of telecommunication infrastructure on the one hand, and proper consumer education coupled with inclining consumers to enjoy the benefits of digital economy on the other. In turn, limited access to banking services may result in severe consequences in the form of financial exclusion affecting large portions of society. One may state that online banking draws attention to both these matters, and therefore assessing its development levels and how it is used by customers in a given country says much of that state s economy. The issue of consumer acceptance for online banking has been repeatedly studied and presented in world literature. However, most of the studies considered highly-developed countries and relatively early development stages of online banking. Hence, the author justly ascertains that there is a knowledge gap regarding banking in developing countries, including Jordan, which may be marked by specific conditions. Therefore, there were good grounds for 1
the author to conduct new research on the acceptance of online banking. This results from the fact that technological advancements and the dynamic development of networking services, i.e. Facebook, bitcoin, Twitter or mobile banking, trigger changes in the behaviour of Internet users and their perception of the role of online banking in the entire scope of available e-services. The subject matter of the doctoral thesis is therefore fully justified in scientific terms. 2. The assumed research concept: objectives, hypotheses and research methods The objective stated in the thesis regards identifying and understanding factors affecting the adoption and acceptance (use) of online banking systems among users in Jordan. Further on, the author formulates three specific objectives, including two referring to the main objective and a methodological objective consisting in designing his own model describing the acceptance of online banking systems. An auxiliary role is played by three research questions reflecting the specific objectives, including three elements of the research model: Trust, Security/Privacy and Convenience/Accuracy, separated in one of these questions. Research objectives of the dissertation are formulated rather narrowly and they do not go beyond the scope of the theoretical model and the resulting survey study. The research presented in the thesis is based on the methodological framework of the Technology Acceptance Model (TAM). The TAM and its subsequent extensions and modifications were successfully applied in literature to explain the acceptance of many innovations, such as: mobile payments, online shopping, biometrics and, precisely, online banking. Hence, the author starts with a proven methodological base and makes a creative modification thereof, capitalising on the outcomes of prior research. The model proposed by the author is an extension of the TAM including a set of external variables: Trust, Security/Privacy, and Convenience/Accuracy. The author then provides and correctly formulates a number of research hypotheses referring to individual dependencies in the proposed model: H1: there is a positive relationship between trust and the perceived usefulness of an online banking system, H2: there is a positive relationship between security/privacy and the perceived usefulness of an online banking system, 2
H3: there is a positive relationship between convenience/accuracy and the perceived ease of use of an online banking system, H4: there is a positive relationship between perceived usefulness and intention to use the online banking system, H5a: there is a positive relationship between perceived ease of use and intention to use the online banking system, H5b: perceived ease of use has a significant positive effect on the user s perceived usefulness of an online banking system. A thorough literature query precedes the development of the research model. The author's empirical studies were carried out on the basis of source data collected from his own survey study conducted among the online banking users in Jordan. The analysis of the study results covered both descriptive statistics and a number of statistical tests. The results were used to verify the research hypotheses. 3. Evaluation of the arrangement and content of the thesis The thesis comprises six chapters, the first of which contains the introduction and the sixth conclusions. Three appendices include: (A) the questionnaire survey, (B) distributions of variables used in the empirical study and (C) distributions depicting the collinearity of variables. Moreover, the dissertation contains standard elements, such as: a list of tables, figures and charts, a literature list. The thesis is arranged in a logical manner adjusted to the adopted objectives and proposed hypotheses. The work is written in English in a comprehensible and accessible manner. Chapter one contains the introduction covering the research motivation as well as the thesis' objectives, and has an extended structure comprising six sub-chapters. Some of them summarise the key elements of the dissertation, e.g. the research model. It should be noted that the author also presents aspects of research ethics. The second chapter depicts the evolution and the state of progress of the online banking system relying on an in-depth literature review. He classifies the online banking system and presents the impact of this communication channel on the relationship between banks and their customers. Further on, he provides a list of critical factors for a proper design of a bank website and the benefits and drawbacks of an online banking system. The chapter 3
ends with an overview of selected research results regarding the issues related to the acceptance of online banking. The third chapter outlines and compares theoretical models applied to explain the process whereby new technologies are accepted. The author begins with analysing the Theory of Reasoned Action and the Theory of Planned Behaviour, and then extensively discusses the TAM model and around a dozen of its modifications. He then proposes his own research model which is an extension of the TAM concept. The remaining part of the chapter is devoted to a literature overview and a discussion concerning the significance of individual variables for the acceptance of online banking. Chapter four examines research methods. The author performed exhaustive deliberations on the philosophical and methodological aspects of different approaches to empirical studies. This chapter provides the grounds for individual methodological assumptions underlying questionnaire surveys, such as: the studied population, sample selection methods or the construction of the questionnaire survey and the questions. The last part of the chapter is devoted to presenting the results of the pilot study. Chapter five presents the results of the empirical studies carried out by the author. It contains information on the response rate of the survey study and descriptive statistics of its participants. Afterwards, it gives a detailed presentation of the reliability analysis and descriptive statistics of latent constructs. Variance analysis with the use of the ANOVA, MANOVA statistical tests is an essential part of the chapter. The final part of that chapter contains a series of tests for each of the research hypotheses and ends with a summary of the research results. The closing sixth chapter consists of conclusions concerning both the theoretical and empirical studies carried out in the thesis. 4. The main achievements of the dissertation 4.1. Contribution to scientific knowledge The thesis contributes to literature in the field of banking and human-system interactions in several aspects. The author's theoretical accomplishment consists in proposing a creative extension of the classic TAM model by fine-tuning it to the characteristic features of solutions applied in online banking. He introduced three external variables to the said model. In the proposed model, Trust and Security/Privacy variables affect Perceived Usefulness, and the Convenience/Accuracy variable on Perceived Ease of Use. It is worth 4
noting that the author convincingly justified, on the basis of prior literature, the need to complement the model with external variables and the manner in which research hypotheses were formulated. He also added a new aspect of empirical studies by extending research on the determinants for the acceptance of online banking to Middle East countries which have not yet been systematically analysed, with a particular emphasis on Jordan. This achievement gives rise to a general conclusion that the essential factors influencing the online banking acceptance process are profoundly similar in developing countries and in European countries. It also engenders practical conclusions which suggest that the highly uniform consumer behaviour will facilitate the offering of online services on a global scale. The second field where the author made an empirical contribution to literature encompasses the detailed testing of relations between individual factors and constructs in the theoretical model; the tests are systematic and comparable to other studies. A further scientific achievement of the author is the thesis extraordinarily ample overview of literature regarding the discussed subject matter. It comprises several hundred items, including journals with a high impact factor. The value of this review is only slightly diminished by the fact that it does not cover works published in the years 2013 2016. 4.2. Research methodology In terms of research methodology, a positive aspect of the dissertation is the adequate performance of the pilot study which is an important quality factor of the obtained results due to the verification of the internal consistency of the survey and research variables using Cronbach s alpha coefficients. Therefore, the questionnaire is consistent with the research model and the methodology for constructing latent variables. Moreover, the author pays much attention to the performance and a detailed presentation of statistical tests for successive stages of the research procedure. The main quantitative studies, based on the sample from the questionnaire survey, were carried out within the analysis of variation using the ANOVA and MANOVA statistical models. This is a holistic approach which enabled the author to explicitly indicate the significant effect of many demographic variables (Age, Education and Occupation) on external variables (Trust, Security/Privacy, Convenience/Accuracy) and endogenous variables (Perceived Usefulness, Perceived Ease of Use, Intention to Use). On the other hand, the Gender variable proved insignificant (as did the impact of Occupation on Security/Privacy). The results obtained are a good addition to literature regarding the subject. 5
The tests of research hypotheses in part 5.10 may not be assessed as unambiguously as above. The author obtained many fragmentary results by performing tests separately for different pairs of variables. During the tests, he carried out a multiple regression analysis for each of the studied relations between two variables in the theoretical model he proposed. All of them proved statistically significant and allowed him to calculate the Beta coefficient as a measure of the strength of influence. Taking into account all of the evidence, it may be assumed that the author had grounds to verify and accept all six of the formulated research hypotheses. However, a question may arise: would we obtain the same result if we applied a multi-equation model with exogenous variables indicated as significant in the MANOVA analysis? There are some doubts regarding sampling for the questionnaire survey as it was limited to online banking users. The author indicates the beneficial aspects of that strategy resulting from the fact that those who had a chance to verify the functioning of online banking themselves can give more reliable answers to detailed questions in the questionnaire designed to create constructs. Nonetheless, it seems that such sampling also brought about negative consequences, i.e. the factors impacting the Actual Use of online banking could not be analysed, and this variable would have a tremendous cognitive value. Moreover, restricting the measurement of Intention to Use only to online banking users hinders any attempts to analyse the difference between the assessment of that construct by users and non-users. As a result, barriers to becoming a user of online banking may not be determined, and such information would potentially be an important managerial implication. 4.3. Managerial implications A further notable achievement of the author consists in formulating interesting managerial implications. Firstly, the perceived ease of use is found to be the most important factor that has a strong impact on users intention towards acceptance of online banking systems. If we take into account that the construct is strongly related to Convenience/Accuracy, it provides precise guidance for the manner in which an online banking system should be designed. At the same time, the study confirms the strong impact of Perceived Usefulness, significantly influenced by Trust and Security/Privacy. This means that much effort has to be put in ensuring a high level of security of online banking systems. What is more, there is a need to educate users in the field of security and enter into dialogue with them in order to build trust. Therefore, the results presented in the dissertation point to highly comprehensive consumer requirements which are difficult to meet simultaneously. This 6
regards in particular an attempt to reconcile requirements regarding the convenience of use of any electronic banking system with high security levels that necessitate advanced authentication methods, such as tokens or one-time passwords. The abovementioned results also indicate that the challenges of modern banking are the same in the case of the Middle East, represented by Jordan, as in the European market, which is proven by similar dilemmas faced by managers in Polish banks. 4.4. Achievement of the thesis' objectives In my opinion, the author achieved most of the research objectives stated in the dissertation. In particular, he successfully developed and tested a research model which was an extension of the TAM. He also explained factors impacting the acceptance of the online banking system by Jordanian Internet users in the scope of the Intention to Use construct. On the other hand, he did not manage to fully explain the issue of adoption (or use) of an online banking system tackled in several of the research objectives. This is due to the fact that the sample for the questionnaire survey covered exclusively online banking users, what made it impossible to analyse the determinants of Adoption/Actual Use but only allowed the author to learn the determinants of the Intention to Use construct and solely for the group of online banking users. 5. Polemical aspects 1) Sadly, the author did not ground the analysed aspects of Web-based online banking in a broader context of all communication channels used by banks in electronic banking, i.e. telephone banking, payment cards/atms, and most importantly the dynamically developing app-based mobile banking. Maybe this stemmed from the scarce popularity of other electronic banking channels among the residents of Jordan? 2) The reviewer has remarks to the reasoning presented by the author in part 5.11: a. Firstly, in the case when the total mean score for the variable of intention to use is almost 4, it is impossible for the answers to be ranged between strongly agree and agree because in the Likert scale these answers have a value of 5 and 4, respectively (see p. 89). Therefore, there must have been many indications below 4. b. Notwithstanding the above, in the case when the sample comprised only persons using online banking, interpretations regarding the relation between this variable 7
and others should not be applied (e.g. p. 109: These findings suggest that the actual usage can be measured and replaced with an intention to use. ). c. It is then difficult to agree with the author that the original TAM model implied that Intention to Use was to be used rather than Actual Use to carry out empirical studies. Contrary to the assertion on p. 62 and p. 110, Perceived Usefulness and Perceived Ease of Use in the original TAM were directly related to Attitude and not to Intention to Use. I believe that the reason why the author applied such a model structure in the dissertation could rather be found in the fact that all respondents of the study were online banking users so Actual Use could not be applied in the empirical model. 3) The author also often uses the phrase: the adoption and acceptance (use) of online banking. However, in the case of studies based on the TAM model and its extensions the literature treats the words adoption and acceptance rather synonymously (adoption may also be treated as one of (specific) examples of acceptance). Therefore, they should not be used jontly. 6. Formal remarks 1) The methodology of the questionnaire survey was not presented in a sufficiently clear manner. Individual pieces of information regarding the population, sampling, construction and language of the questionnaire, manner of distribution of the questionnaire, sample size, etc. are scattered in different parts of the thesis between pages 68 and 85, and they were not summarised in any one place. In particular, the author provides an unclear description of the research sample. In my opinion, the most adequate description of the sample is made by the author in the conclusion of the thesis (p. 116), from which it is apparent that it is a purposive sample (and not a random one) based on data obtained from 504 online banking users from Jordan. The whole work also fails to provide information on the time when the study was carried out, apart from a minor suggestion in the conclusions that the Syrian civil war was already progressing at the time. 2) Certain statistical data presented in the thesis are somewhat outdated. For example, data regarding Internet users and Internet penetration around the world come from the year 2012. It is surprising as other data from the Internet World Statistics, e.g. on p. 87, come from the year 2014. 8
3) The author tends to explain the methodological background of individual elements of the research process in great detail. Some of these intricate descriptions are common knowledge for an academic-level reader, and their presentation was not necessary. Short information and references to literature would suffice. 4) The work contains numerous repetitions of the same trains of thought in different chapters. 7. Summary and final evaluation In conclusion, despite the polemical and formal remarks, I am of the opinion that the reviewed doctoral thesis of Mr Laith Talal Khrais, Technology Acceptance Factors Determining Online Banking in a Developing Economy: The Case of Jordan fulfils the formal statutory and customary requirements for doctoral dissertations. It contains an original solution of a correctly formulated research problem. The author boasts good theoretical knowledge and an understanding of the real processes taking place in the banking system and the digital economy of Middle East countries, and in Jordan in particular. Therefore, I hereby recommend that the Faculty of Economics of Poznań University of Economics and Business accept the doctoral thesis of Mr Laith Talal Khrais as fulfilling formal criteria and admit it to a public defence. Michał Polasik 9