Alternative Structural Models for E-Banking Adoption in Vietnam ABSTRACT

Alternative Structural Models for E-Banking Adoption in Vietnam Long Pham, Minot State University, USA Nhi Y. Cao, National Economics University, Vietnam Thanh D. Nguyen, Ho Chi Minh City University of Technology, Vietnam Phong T. Tran, National Economics University, Vietnam ABSTRACT E-banking is seen as the newest delivery channel of banks in many developed countries and is believed to have a significant impact on the bank market. It is contended that e-banking is providing numerous opportunities for banks and non-bank financial institutions to add a low cost distribution channel to their existent distribution channels in order to better serve their customers by offering various products and services with high quality. Little research on factors influencing the adoption of e-banking has been implemented in countries that are emerging as new potential markets (such as Vietnam) with very high economic growth rates. Thus, this study has, based on an extensive review of literature on e-banking benefits for both banks and their customers and relevant theories on innovation adoption, proposed alternative models (including both moderator and mediating effects) of e-banking intention to use by customers in Vietnam. Furthermore, a set of model hypotheses presenting relationships among factors influencing e- banking intention to use have been set up. Practical implications and future studies were also discussed. Keywords: E-banking; E-banking Adoption; Theory of Reasoned Action; Theory of Planned Behavior; Decomposed of Theory of Planned Behavior; Technology Acceptance; Extension of Technology Acceptance; Diffusion of Innovation. Introduction Banking can be considered as an intensive information activity based on communication and information technologies for the purpose of gaining, processing and distributing information to users involved. Such technologies play an important role not only in the three stages of information, but also in making favorable conditions for banks to differentiate their products and services from their rivals. In order to be successful in a highly competitive banking market, banks are required to innovate and update their products/services offered in an attempt to retain their demanding and discerning customers. Facing challenges related to gaining a larger share of the banking market, a number of banks have been making significant investments in building more brick and mortar branches to expand their geographical penetration, while others have been utilizing a breakthrough approach to the distribution of banking products/services to customers through a new medium, namely, the Internet. Recently, the Internet has been rapidly gaining popularity as a potential medium for electronic commerce (Crede, 1995). Such a rapid growth of the Internet has brought about numerous new opportunities as well as threats to businesses. Today, the Internet is believed to be a full-fledged delivery and distribution channel supporting 64

consumer-oriented applications aimed at effectively and efficiently providing financial products and services to customers in the banking sector (Pham, 2010). In the US, banks have been offering their services/products to customers via the Internet and a number of Internet banks, such as Bank of Internet, have emerged. In addition, the Internet is viewed as a strategic weapon that is expected to bring about new comparative advantages for banks, especially when competitive advantages of traditional branch networks are rapidly eroding (Seitz & Stickel, 1998) and brick and mortar only banks may largely disappear. Indeed, the emergence of e-banking has induced many banks to rethink their information technology strategies in order to stay competitive. Customers are today increasingly demanding with respect to the quality of banking services. They want better levels of convenience and flexibility with banking products and services that traditional retail banking could not offer (Lagoutte, 1996). E-banking has made favorable conditions for banks and other financial institutions to offer such products and services by taking advantage of an extensive public network infrastructure (Ternullo, 1997). However, in spite of such potential benefits, there still exist a number of problems that need to be dealt with before e-banking can become widely adopted. Up to now, a great deal of literature has identified key factors influencing the adoption of e- banking in developed countries North America and Europe and to a lesser extent in other regions including a mix of developed and developing countries, such as Singapore, Taiwan, Malaysia, and Thailand. However, little research on factors influencing the adoption of e- banking has been implemented in countries that are emerging as new potential markets with very high economic growth rates. Among these countries is Vietnam where its average economic growth rate (GDP) was over 7% during the 1990s and early 2000s, and more than 8% in 2006, which made it one of the highest growing economies in the World (World Bank, 2006). Together with Vietnam s entry into the World Trade Organization dated on 7 November 2006, its banking sector is increasingly being deregulated in accordance with the requirements set up by the World Trade Organization. These moves suggest that fierce competition among local banks and foreign banks in the Vietnamese banking sector have been occurring, and Vietnamese banks may have to adopt the Internet as a primary service delivery channel in order to survive. Thus, the objectives of this study are as follows: 1. Investigate e-banking benefits for both banks and customers. 2. Conduct an extensive review of literature on relevant theories on adoption of an innovation; and 3. Construct alternative structural models based on integration of the innovation theories, trust, and perceived benefit for e-banking adoption in Vietnam. 65

Background E-Banking E-banking can be considered as a high-order construct comprising several distribution channels. E-banking is a larger concept than just banking conducted by the Internet. Nonetheless, the most popular kind of e-banking is today believed to be banking through the Internet - Internet banking. There are a number of ways to describe the e-banking term. In its simplest sense, it is viewed as the provision of information or services by a bank to its customers based on a computer, television, telephone, or mobile phone (Daniel, 1999). For instance, under the view of Jun and Cai (2001), Internet banking is seen as an electronic connection between banks and customers aimed at preparing, managing, and controlling numerous financial transactions. By utilizing e- banking, it is very convenient for consumers to access their banks and accounts to implement their banking transactions. At its sophisticated sense, e-banking is named transactional online banking due to the fact that it embeds the provision of facilities, such as accessing accounts, transfer of funds, and buying financial products or services online (Sathye, 1999). In this paper, without loss of generality, the term e-banking and online banking (or even Internet banking) are interchangeably utilized with the same meaning. E-banking is seen as the newest delivery channel of banks in many developed countries and is believed to have a significant impact on the banking market (Jayawardhena & Foley, 2000). Nehmzow (1997) contends that e-banking is providing numerous opportunities for banks and non-bank financial institutions to add a low cost distribution channel to their existent distribution channels in order to better serve their customers by offering various products and services with high quality. However, he further contends that e-banking also brings about challenges to traditional banks due to the fact that it neutralizes competitive advantages rooted in a traditional banking network. It is predicted that e-banking will continue mushrooming in the times to come. When e-banking is widely utilized and becomes more popular, it is very interesting to forecast the future of traditional banks operating based on their branches. According to Wah (1999), it is not reasonable to say that such traditional banks are likely to disappear in the near future. Rather, they will be placed on a new level of banking services/products with the support of new and modern distribution channel technologies. Furthermore, Wah (1999) argues that traditional banks can take advantage of new and modern technologies and they are very likely to effectively and efficiently serve their customers. Finally, Wah (1999) concludes that e-banking is really beneficial to customers and that e-banking and traditional banking can coexist. E-Banking s Benefits For Banks E-banking can bring about various benefits for banks and their customers. Cost savings, efficiency, gaining new segments of customers, improvement of the bank s reputation and better customer services and satisfaction are primary benefits to banks (Jayawardhena & Foley, 2000). 66

Booz-Allen and Hamilton (1997) argue, based on their global survey, that setting up a specialized e-banking infrastructure costs about US$1 2 million, which is much lower than setting up a banking branch. In addition, the authors conclude that costs for running a traditional bank account for 50% to 60% of its revenues. Under the view of Robinson (2000), relevant costs for conducting a banking transaction via online are much lower than via a brick and mortar branch. Moreover, Sheshunoff (2000) contends that one of the most important factors influencing the adoption of e-banking by banks is the need to build up strong barriers to customer exiting. Under the view of the author, once customers become familiar with the utilization of full service e-banking, it is unlikely that they will change to another financial institution. Such an argument can be supported by the consumer behavior theory that switching costs are often very high in terms of time and efforts by consumers. Finally, the author emphasizes that the implementation of e-banking can bring about many competitive advantages for banks in today s highly competitive banking market. Research on e-banking has been carried out in Denmark by Mols (1998). The author argues that e-banking can play an important role in enhancing cross-selling and price differentiation. E- banking can make favorable conditions for banks to provide customers numerous services 24 hours a day and 7 days a week. E-banking can improve customer satisfaction with the bank due to the fact that it makes customers less price sensitive, and improves their intention to repurchase, and more loyalty to the bank via providing more positive words of mouth about the bank. For Customers E-banking not only brings about benefits to banks but also to their customers. Thanks to the emergence of the Internet, banking transactions are no longer limited to time and geography. It is very easy for consumers throughout the world to have access to their bank accounts 24 hours per day and seven days a week. Customers can enjoy a variety of services, especially services which are not provided by traditional bank branches. It is argued that one of the greatest benefits that e- banking brings about is that it is not expensive or may even be free for customers to utilize e- banking products/services. However, some people believe that prices appear to be one factor that is impedimental to the diffusion of e-banking (Sathye, 1999). The price debates often revolve around geographical differences and disparities between costs of Internet connections and telephone call pricing. It has also been believed that e-banks have been changing to respond to customers increasingly changing demands (Jun & Cai, 2001). There has been a tendency that customers don t want to travel to or from a bank branch to conduct some banking transactions. In other words, they want to utilize e-banking to save time and money. E-banking can bring about convenience and accessibility, and have positive effects on customer satisfaction and loyalty (Karjauloto, Mattila, & Pento, 2002; Pham, 2010). It is possible for customers to manage their banking transactions whenever they want and to enjoy improved privacy in their interactions with the bank. In addition, customers can enjoy more benefits at lower cost levels by utilizing e- banking (Mols, 1998). It is contended by Turban, Lee, King and Chung (2000) that e-banking is really beneficial to customers in terms of cost savings, no limit on time and space, quick response to customer 67

complaints, and better services/products. Such benefits are believed to elevate customer satisfaction. In a word, e-banking offers many benefits to both banks and their customers (Pham, 2010). Alternative Structural Models for E-Banking Adoption in Vietnam International Studies of Consumer Adoption of E-Banking The banking market has become highly competitive along with the emergence of new banking technology which is believed to have strong effects on consumer behavior. Hence, banks implementing e-banking services are required to better understand their customers regarding attitudes of customers towards technology. If banks are successful in doing so, it makes favorable conditions for them to positively impact and even determine consumer behavior. Impacting and determining consumer behavior in an effective and efficient manner will, in turn, make a significant contribution to creating a competitive advantage for banks in the future. Interactions between the adoption and marketing of new electronic delivery channels through relationships between banks and their customers have been establishing new environments in which customers are better served (Mols, 1998). There have been so far a significant number of discussions in the literature about the adoption process of e-banking services. Appendix 1 summarizes the results of such studies. A Conceptual Model for E-Banking Adoption in Vietnam Figure 1. A Conceptual Model for E-banking Adoption in Vietnam Bank Image Perceived Risk Perceived Ease of Use Perceived Benefit Subjective Norms Intention to Use Trust Perceived Behavioral Control The following are theoretical support and resulting hypotheses that elicit causal relationships postulated in the model. 68

Corporate image refers to the extent to which reputational knowledge of an organization has been accumulated and developed by customers. Such a reputational knowledge is rooted in the minds of the customers. Specifically, reputational knowledge can be represented by a distinctive reputation by a firm in offering products/services with very high quality (Olavarrieta & Friedmann, 1999). Gronroos (1984) argues that corporate image is very likely to make significant contributions to the development of service quality. Image is believed to function well to overcome complexities generated by distinct attributes of service and when small problems occur from functional and technical aspects of quality. In addition, the results of a study conducted by Kang and James (2004) revealed that corporate image plays as a mediator between service quality dimensions and the overall service quality, and the overall service quality is positively related to customer loyalty. Furthermore, corporate image can be understood as customers affective preconceptions towards the service provider, accumulated and developed via continuous service experiences (Zins, 2001). Based on this definition, a bank image plays a vital role in the adoption of e-banking. Thus, under Vietnam s e-banking setting, we hypothesize that: H1. Bank image will have a positive direct relationship with intention to use e- banking. An e-banking transaction is considered as a mode of trusting behavior due to the fact that customers are themselves engaging in vulnerable situations regarding such e-banking transactions. Customers are willing to utilize e-banking as long as they believe that e-banking functions well and performs what they expect it to do. In e-settings, people from almost everywhere in the world are easily to get access to documents stored on computers and in the same vein, information is easily to be transferred through e- technologies with computer networks. That is why under the security perspective, e-banking is considered as being risky. In addition, e-banking is characterized by highly uncertain transactions since people who make such transactions very often come from different places in the world. The utilization of e-banking can be considered as a new information and communication technology and under the marketing perspective, it is also viewed as a new distribution channel technology based on which customers can easily contact with their bank. In the marketing field, a number of empirical studies have been conducted to show that perceived risk is a very important construct (Gefen, 2004). In such studies, perceived risk is shown to have significant effects on customer loyalty. Thus, under Vietnam s e-banking setting, we hypothesize that: H2. Perceived risk will have a negative direct relationship with intention to use e- banking. Perceived benefit is, in the literature of technology acceptance, defined as an individual s positive or negative evaluation of performing a type of behavior (Chau & Hu, 2001). Hansen, Jensen and Solgaard (2004) found that there is a significantly positive association between perceived benefit and behavioral intention to use online shopping for groceries. In a same vein, 69

other prior research has indicated that perceived benefit has strong impacts on behavioral intention to utilize an innovation, for example, word processing software (David, Bagozzi, & Warshaw, 1989) or spreadsheet software (Mathieson, 1991). If someone has a feeling that utilizing e-banking will bring about positive outcomes, then such a person will have more intention to adopt e-banking. In contrast, if someone has a negative feeling of outcomes resulting from utilizing e-banking, he or she will have a lower adoption intention. Thus, under Vietnam s e-banking setting, we hypothesize that: H3. Perceived benefit will have a positive direct relationship with intention to use e-banking. Subjective norms refer to the person s perception that most people who are important to him think that he should or should not perform the behavior in question (Ajzen & Fishbein, 1980). Several theories suggest that subjective norms are important in shaping user behavior. For example, TPB suggests that subjective norms influence a person s behavioral intention. Venkatesh and Davis (2000) explain the effect of subjective norms on behavioral intention to use in the way that potential users may choose to use the technology if the people who are important to them say that they should use it. Thus, under Vietnam s e-banking setting, we hypothesize that: H4. Subjective norms will have a positive direct relationship with intention to use e-banking. A person s sense of self-efficacy in terms of the utilization of an innovation is positively related to his or her behavioral intention to utilize such an innovation (Chau & Hu, 2001). That is why if people are confident in their ability to effectively utilize an innovation, their intention to use such an innovation will substantially increase since they will not feel timid about using the innovation. Perceived behavioral control can be defined as the general ability that a person feels that he or she has to participate in a certain behavior (Ajzen, 1985; Ajzen & Madden, 1986). Under the view of Chau and Hu (2001), perceived behavioral control is very likely to have strong impacts on behavioral intention. In a same vein, prior research (e.g., Benhan & Raymond, 1996; Riemenschneider, Harrison, & Mykytn, 2003) have found that there is a significantly positive relationship between perceived behavioral control and behavioral intention in a variety of settings. Thus, it can be inferred that under the e-banking setting, a person s behavioral intention to utilize e-banking is very likely to be influenced by the confidence that such a person has in his or her general ability to utilize e-banking. Thus, under Vietnam s e-banking setting, we hypothesize that: H5. Perceived behavioral control will have a positive direct relationship with intention to use e-banking. Trust has been shown to have a mediating role in IS adoption models (Gefen, Karahanna, & Straub, 2003; Ribbink, Liljander, & Streukens, 2004; Chen & Dhillon, 2003; Jarvenpaa, Tractinsky, & Vitale, 2000; Rotter, 1971). Trust plays an important role in many transactional 70

buyer-seller relationships, especially in settings containing risks (McKnight, Cummings, & Chervany, 1998). It is argued that trust has been serving as a critical role under online business settings at which it is almost impossible to have physical touching and interaction with staff. In general, trust can be defined as an expectation one chooses to trust in others who are believed to not behave opportunistically or trust can be defined as one s belief that others are going to behave in a dependable, ethical, and socially desirable manner (Rousseau, Sitkin, Burt, & Camerer, 1998). Moreover, trust can be conceptualized as a combination of such factors as trustworthiness, integrity, honesty, and benevolence of e-vendors that are expected to escalate behavioral intentions via reduced risks among potential but inexperienced customers (Jarvenpaa & Todd, 1996; Gefen, Karahanna, & Straub, 2003). Thus, under Vietnam s e-banking setting, we hypothesize that: H6. Trust will have a positive direct relationship with intention to use e-banking. The relationship between trust and perceived benefit has been widely discussed in a variety of contexts including online based business settings (Gefen, Karahanna, & Straub, 2003; Pavlou, 2003; Saeed, Hwang, & Yi, 2003; Gefen, 2004). Specifically, trust and TAM is well integrated in the online shopping setting (Gefen, Karahanna, & Straub, 2003). Such an integration showed that trust is an antecedent of perceived benefit. Trust is contended to serve as an important determinant of perceived benefit, especially in the online environment due in part to the guarantee that consumers expect the perceived benefit from the website with the sellers behind it. Furthermore, trust is strongly believed to have positive impacts on perceived benefit on the ground that trust make favorable conditions for consumers to be vulnerable to e-vendor to ensure that they achieve expected useful interactions and services (Pavlou, 2003). While consumers initially trust their e-vendors and have a feeling that online service adoption is efficient to their job performance, they intend to believe that such online services are useful (Gefen, Karahanna, & Straub, 2003). Thus, under Vietnam s e-banking setting, we hypothesize that: H7. Trust will have a positive direct relationship with perceived benefit Many studies have been conducted and found that there is a strongly positive correlation between users and IS units mutual trust and mutual influence (Nelson & Cooprider, 1996). Moreover, it is elicited by Decomposed TPB that users can be influenced by their peers and superiors in determining subjective norm towards the IS utilization (Taylor & Todd, 1995). To put it another way, it is very possible that trust in peers and superiors regarding their beliefs of the IS utilization plays an important role in determining subjective norm. In a similar vein, trust in e- vendors regarding their reputation, brand name, and service might have positive impacts on subjective norm over online transactions behavior. Additionally, aspects of reputation, brand name, and service might elicit certain relationships between trust in peers and superiors and trust in vendors. Hence, whatever types of trust are with direct and indirect impacts on subjective norm, they are all serving as important antecedents of subjective norm in the online setting. Thus, under Vietnam s e-banking setting, we hypothesize that: H8. Trust will have a positive direct relationship with subjective norms. 71

The relationship between trust and perceived behavioral control has been investigated with regards to numerous aspects where trust is found as a common antecedent of perceived behavioral control (Bandura, 1986; David, Bagozzi, & Warshaw, 1989; Hosmer, 1995; McKnight & Chervany, 2002; Pavlou, 2003). Trust is very likely to escalate perceived behavioral control over online transactions due to the fact that such virtual interactions between customers and e-vendors turn out to be more expectable (Pavlou, 2002). Specifically, trust has impacts on perceived behavioral control via factors such as self-efficacy and increased favorable conditions. Based on many psychological reports, self-efficacy in personal relationships is built on self-confidence and mutual trust (Matsushima & Shiomi, 2003). So, mutual trust embedded in such relationships between customers and e-vendors is expected to escalate customer self-efficacy and in turn escalate perceived behavioral control. In addition, trust is viewed as a perceptual resource that makes favorable conditions for customers to achieve their control over e-transactions (Pavlou, 2002). Thus, under Vietnam s e-banking setting, we hypothesize that: H9. Trust will have a positive direct relationship with perceived behavioral control. The relationship between perceived ease of use and perceived benefit can be explained in the manner that if other things are equal, the easier the technology is to use, the more beneficial it can be (Venkatesh & Davis, 2000). If using the technology is easy, potential users do not have to spend too much time to learn how to use the technology; this may influence the performance of the user. Besides, TAM has verified the effects of perceived ease of use on perceived benefit (Davis, 1989; David, Bagozzi, & Warshaw, 1989). Extensive research has shown significant effects of perceived ease of use on perceived benefit (e.g., Chan & Lu, 2004). Thus, under Vietnam s e-banking setting, we hypothesize that: H10. Perceived ease of use will have a positive direct relationship with perceived benefit Perceived ease of use is, in many studies, found to have positive impacts on trust since perceived ease of use is very likely to escalate customers favorable impressions towards e-vendors in the online service initial adoption and lead customers to be willing to make investments and commitments in buyer-seller relationships (Gefen, Karahanna, & Straub, 2003). Under the view of social cognitive theory, perceived ease of use is strongly contended to have positive impacts on an individual s favorable outcome expectation towards an innovative technology adoption (Bandura, 1986). Such a contention is based on the fact that cognition-based trust, as mentioned above, is primarily constructed on the first impression of the individual towards a certain behavior. Specifically, perceived ease of use under the online service setting is viewed as the first feeling or expectation set up for continued online transactions. Thus, under Vietnam s e- banking setting, we hypothesize that: H11. Perceived ease of use will have a positive direct relationship with trust 72

Theories of reasoned action (TRA) and planned behavior (TPB) and their derivatives have been utilized to predict possible adoption of information technology (Benbasat & Barki, 2007). While such studies have escalated our understanding of how the theories main contructs have effects on IT adoption, they ignore nonlinear relationships among the constructs. The fact that ignoring the nonlinear effects is very likely to either understate or overstate the main effects which might lead to erroneous, partial, or incomplete interpretations (Ping, 2002). That is the reason Ping (2002) strongly argue that investigating complicated and contingent relationships among the main constructs will bring about finer grained knowledge about determinants of individual IT adoption. Thus, under Vietnam s e-banking setting, we hypothesize that: H12. The relationship between perceived benefit and intention to use e-banking will be positively moderated by perceived ease of use. H13. The relationship between perceived benefit and intention to use e-banking will be positively moderated by trust. H14. The relationship between perceived benefit and intention to use e-banking will be positively moderated by subjective norm. H15. The relationship between perceived benefit and intention to use e-banking will be positively moderated by perceived behavioral control. Formal Representation of the Conceptual Model The research hypotheses can be integrated to form a set of structural equations. Since the moderator effects of perceived ease of use, trust, subjective norm, and perceived behavioral control on the relationship between perceived benefit on intention to use have not been clearly tested in the literature, we create five competing structural models from the conceptual model illustrated in Figure 1. Model A is without any moderator effects. Model B is Model A plus the moderator effect of perceived ease of use on the relationship between perceived benefit and intention to use. Model C is Model B plus the moderator effect of trust. Model D is Model C plus the moderator effect of subjective norm. Model E is Model D plus the moderator effect of perceived behavioral control. The following abbreviations are used for simplicity: bank image (BI), perceived risk (PR), perceived ease of use (PEU), perceived benefit (PB), trust (T), subjective norm (SN), perceived behavioral control (PBC), and intention to use (IU). Model A can be represented by Eqs. (1)-(5): IU = β 1 (BI) + β 2 (PR) + β 3 (PB) + β 4 (SN) + β 5 (PBC) + β 6 (T) + e 1 (1) PB = β 7 (PEU) + β 8 (T) + e 2 (2) T = β 9 (PEU) + e 3 (3) SN = β 10 (T) + e 4 (4) PBC = β 11 (T) + e 5 (5) 73

To represent Model B, we modify Eqs. (1): IU = β 1 (BI) + β 2 (PR) + β 3 (PB) + β 4 (SN) + β 5 (PBC) + β 6 (T) + α 1 (PEU*PB) + e 1 (6) Eqs. (2)-(5) are kept unchanged By the same token, Model C can be represented: IU = β 1 (BI) + β 2 (PR) + β 3 (PB) + β 4 (SN) + β 5 (PBC) + β 6 (T) + α 1 (PEU*PB) + α 2 (T*PB) + e 1 (7) Eqs. (2)-(5) are kept unchanged Model D can be represented: IU = β 1 (BI) + β 2 (PR) + β 3 (PB) + β 4 (SN) + β 5 (PBC) + β 6 (T) + α 1 (PEU*PB) + α 2 (T*PB) + α 3 (SN*PB) + e 1 (8) Eqs. (2)-(5) are kept unchanged Model E can be represented: IU = β 1 (BI) + β 2 (PR) + β 3 (PB) + β 4 (SN) + β 5 (PBC) + β 6 (T) + α 1 (PEU*PB) + α 2 (T*PB) + α 3 (SN*PB) + α 4 (PBC*PB) + e 1 (9) Eqs. (2)-(5) are kept unchanged We suggest that these alternative structural models (Model A, Model B, Model C, Model D, and Model E) need to be tested independently and their results need to be compared and contrasted. Conclusion and Directions for Future Research Up to now, a great deal of literature has identified key factors influencing the adoption of e- banking in developed countries North America and Europe and to a lesser extent in other regions including a mix of developed and developing countries, such as Singapore, Taiwan, Malaysia, and Thailand. To put it another way, little research on factors influencing the adoption of e-banking has been implemented in countries that are emerging as new potential markets with very high economic growth rates. Among these countries is Vietnam where its average economic growth rate (GDP) was over 7% during the 1990s and early 2000s, and especially more than 8% in 2006, which made it one of the highest growing economies in the World (World Bank, 2006). Together with Vietnam s entry into the World Trade Organization dated on 7 November 2006, its banking sector is increasingly being deregulated in accordance with the requirements set up by the World Trade Organization. These moves seem to indicate that fierce competition among local banks and foreign banks in the Vietnamese banking sector have been occurring, and Vietnamese banks have to adopt the Internet as a primary service delivery channel in order to survive. However, there are no comprehensive models or frameworks to explain the e-banking adoption by customers in Vietnam. 74

This study has, based on an extensive review of literature on e-banking benefits for both banks and their customers, trust, perceived risk, corporate image, and relevant theories on innovation adoption, proposed alternative structural models (including both moderator and mediating effects) for e-banking adoption in Vietnam. Furthermore, a set of model hypotheses presenting relationships among factors influencing e-banking adoption have been set up. The next step in the development of such models is to statistically test the aforementioned hypotheses in the Vietnamese setting. Each of the factors identified in the previous discussion will form the basis for analysis in the empirical study of e-banking adoption in such a new context. The models presented in this paper are unique as at present, there are no comprehensive theoretical and practical models for analyzing e-banking adoption in newly emerging countries such as Vietnam. None of the prior models have taken into account the interactions between innovation theories, trust, perceived risk, corporate image, intention to use, and actual use regarding e-banking. These models can provide an impetus for future research, structuring them along the lines of interactions between such above theories and factors that will expand the frontiers of knowledge in e-banking adoption. References Ajzen, I. (1985). From intentions to actions: a theory of planned behavior: in action control: From cognition to behavior. Kuhland, J., & Beckman, J. (Eds), Springer, Heidelberg, 11 39. Ajzen, I., & Fishbein, M. (1980). Understanding Attitudes and Predicting Social Behavior. Englewood Cliffs, New Jersey: Prentice-Hall. Ajzen, I., & Madden, T. (1986). Prediction of goal-directed behavior: attitudes, intentions, and perceived behavioral control. Journal of Experimental Social Psychology, 22, 453 474. Alhudaithy, A., & Kitchen, P. (2009). Rethinking models of technology adoption for Internet banking: the role of website features. Journal of Financial Services Marketing, 14(1), 56 69. Bandura, A. (1986). Social foundations of thought and action. Technology Studies, 2(2), 285 309. Benbasat, I., & Barki, H. (2007). Quo Vadis, TAM. Journal of the AIS, 8(4), 211-218. Benhan, H., & Raymond, B. (1996). Information technology adoption: evidence from a voice mail introduction. Computer Personnel, 13(3), 3 25. Black, N. J., Lockett, A., Winklhofer, H., & Ennew, C. (2001). The Adoption of Internet Financial Services: A Qualitative Study. International Journal of Retail & Distribution Management, 29(8), 390 398. 75

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Wang, Y., Lin, H., & Tang, T. (2003). Determinants of user acceptance of Internet banking: an empirical study. International Journal of Service and Industrial Management, 14(5), 501 519. World Bank. (2006). Vietnam Development Report 2007: Pillars of Development. Report No. 20018-VN, Washington, DC: World Bank. Yousafzai, S., Pallister, J., & Foxall, G. (2009). Multi-dimensional role of trust in Internet banking adoption. The Service Industries Journal, 29(5), 591 605. Zins, H. (2001). Relative attitudes and commitment in customer loyalty models: some experiences in the commercial airline industry. International Journal of Service Industry Management, 12(3), 269 294. APPENDIX 1 International studies on e-banking adoption Authors Name of study Models utilized Determinants Hussein and Zolait, 2010 An examination of the factors influencing Yemeni bank users behavioral intention to use Internet banking services TPB (theory of planned behavior) TRA (theory of reasoned action) + Attitude + Subjective norm +Perceived behavioral control + Ease of use + Awareness + Advantage + Media This study, based on a self-administered survey involving a convenience sample of 369 Yemeni bank customers, investigates the potential prominent factors relating to the adoption and use of the financial services of Internet banking in Yemen. The authors of this study show that the overall prominent predictors include Relative Advantage/Compatibility, User's Informational-Based Readiness, Attitude, Observability, Technology Facilitating Condition, Perceived Behavioural Control and Self-efficacy. The model accounted for 75 per cent of the variation of an individual's behavioural intention to use IB. Ozdemir and Trott, 2009 Exploring the adoption of a service innovation: a study of Internet banking adopters and non-adopters TAM (technology acceptance model) Diffusion of Innovation Theory of perceived Risk + Socioeconomic factors + Situational factors + Perception factors related to Internet banking use + Related experiences The authors show that Internet banking adopters and non-adopters have different perceptual, experience-related, socioeconomic and situational characteristics. In addition, 80

besides the perceptual factors related to Internet banking use, perceptual factors in relation to the banks in Turkey have significant impacts on Internet banking adoption. Alhudaithy and + Website features Kitchen, 2009 Rethinking models of technology adoption for Internet banking: the role of website features TAM TRA TPB The authors show that website features have significant impacts on technology adoption, and specifically Internet banking. Yousafzai, Pallister and Foxall, 2009 Multi-dimensional role of trust in Internet banking adoption Model of trust for Internet banking + Trust + Perceived risk The authors show that trust and perceived risk are direct antecedents of intention, and trust is a multi-dimensional construct with three antecedents: perceived trustworthiness, perceived security, and perceived privacy. Ndubisi and Sinti, 2006 Consumer attitudes, system s characteristics: an internet banking adoption in Malaysia Decomposed TPB + Banking needs + Compatibility + Complexity + Trainability + Risk + Utilitarian orientation + Hedonic orientation The authors show that attitudinal factors play an important role in explaining the e- banking adoption. In addition, utilitarian orientation of the website, not hedonic orientation, has significant impacts on adoption. Fink, Eriksson, Kerem and Nilsson, 2005 Internet banking adoption strategies for a developing country: the case of Thailand Decomposed TPB + Features of the web + Perceived usefulness + Risk and privacy + Personal preference + External environment + Culture The authors reveal that the attitudinal factors, such as features of the website and perceived usefulness, are very likely to have positive impacts on the e-banking adoption in Thailand, while the most salient impediment to the e-banking adoption is a perceived 81

behavioral control, or external environment. Besides such above factors, the important moderating factors are gender, educational level, income, internet experience and internet banking experience, but not age. Eriksson, Kerem and Nilsson, 2005 Customer acceptance of internet banking in Estonia TAM + Trust + Perceived usefulness + Ease of use + Use The authors indicate that the utilization of e-bank is very likely to elevate if customers perceive e-banking as useful. Specifically, the perceived usefulness is very important due to the fact that it determines if the perceived ease of use of e-bank results in increased use of e-bank. In other words, e-banking services which are well-designed and easy to use might not be realized if they are not perceived as useful. Hence, the authors conclude that the perceived usefulness of e-banking plays an important role in motivating customer usage. Moreover, the authors contend that technology acceptance models need to be redesigned with more emphasis placed on the importance of the services perceived usefulness offered by the technology. Pikkarainen, Pikkarainen, Karjaluoto and Pahnila, 2004 Consumer acceptance of online banking: an extension of technology acceptance model TAM and focus group + Perceived usefulness + Perceived ease of use + Perceived enjoyment + Information on online banking + Security and privacy + Quality of internet connection The authors conclude that perceived usefulness and information on online banking of the Website are viewed as the primary factors that are very likely to have impacts on the acceptance of online banking. Wang, Lin and Tang, 2003 Determinants of users acceptance of internet banking TAM + Trust/Perceived credibility + perceived usefulness + Ease of use + Computer selfefficacy + Intention Based on the results of the study, the authors conclude that individual difference variables such as computer self-efficacy have significant effects on behavioral intention via 82

perceived ease of use, perceived usefulness, and perceived credibility. In addition, the authors show that users with a higher computer-self efficacy are likely to have more positive usefulness and ease of use beliefs, but have more negative credibility beliefs in e-banking. Such results are in line with that of the prior studies which have indicated that there is a significant direct e-banking relationship between computer-self efficacy and perceived ease of use of e-banking. Finally, the authors show that computer-self efficacy has a negative impact on perceived credibility; however, its total impact on behavioral intention is positive. Shih and Fang, 2003 The use of decomposed theory of planned behavior to study internet banking in Taiwan TPB and Decomposed TPB + Behavior intention + Actual usage + Attitude + Subjective norms + Perceived advantage + Relative advantage + Compatibility + Complexity + Normative influences + Efficacy + Facilitating It is, based on the decomposed TPB model, shown in this study that only relative advantage and complexity are related to attitude, but compatibility is not related to attitude. In terms of subjective norm, the causal path starting from subjective norm to intention is not statistically significant. Nevertheless, self-efficacy is found to be a significant determinant of PBC. Finally, the authors show that facilitating conditions do not have impacts on perceived behavioral control. Suh and Han, 2002 Effects of trust on customer acceptance of internet banking TAM + Trust + Perceived usefulness + Ease of use + Attitude + Intention to use It is shown in this study that trust plays the most important role in explaining a customer s attitude towards utilizing e-banking. In line with TAM, in this study, customer perception of the usefulness and ease of use also have significant impacts on attitude. Moreover, behavioral intention to use e-banking is significantly related to attitude, perceived usefulness, and trust. Such findings elicit that trust is much emphasized by customers in e-environments with a lot of sensitive information. Karjaluoto, Mattila and Pento, 2002 Factors underlying attitude formation towards online TAM + Prior computer experience + Prior 83