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MOBILE BANKING PROJECT IMPLEMENTATION AND SERVICE

DELIVERY IN ECOBANK RWANDA LIMITED

RUGERI NZIZA

MBA/0540/13

A Research Project Report Submitted in Partial Fulfillment of the Requirements for

the Award of the Degree of Master of Business Administration (Project

Management) of Mount Kenya University

OCTOBER 2016

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DECLARATION

This research project is my original work and has not been presented to any other

institution for any academic award. No part of this research project should be reproduced

without the author’s consent or that of Mount Kenya University.

Student’s Name: Rugeri Nziza Reg. No: MBA/0540/13

Signature…………………………… Date………………………………………

This research project has been submitted with my approval as Mount Kenya University

Supervisor.

Name of Supervisor: Onsoti Nyabera

Signature…………………………… Date………………………………………

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DEDICATION

Dedicated to my husband Mr. Eric Milenge and my beloved family Rugerinyange for

their love, upbringing and parental guidance.

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ACKNOWLEDGEMENT

This research project report could not have been completed without the assistance and

support of others. Firstly, I am grateful to the Almighty God, for His divine guidance

during my academic progress and the production of this research project report. I am

equally indebted to my supervisor Mr. Onsoti Nyabera, for the valuable time he has

sacrificed to guide me during the preparation of this research project report. Last but not

least, I extend my gratitude the management and staff Ecobank who granted me

permission to use their mobile banking project as a case study and also provided both

primary and secondary data during the writing of the final project.

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ABSTRACT

The study focuses on Mobile banking project implementation and service delivery in

banking institutions in Rwanda using Ecobank Rwanda Limited Main Branch as a case

study. The study was guided by their specific objectives which include: assessing the

usage of Mobile Banking services, establishing the factors that influence customer

adoption of mobile banking services, and determining the contribution of mobile banking

on service delivery. The researcher used a descriptive case study design because the study

aimed to establish the link between mobile banking project and service delivery using

Ecobank as a case study. The researcher selected a sample size of 167 who were selected

from a population of 258 people by use of random sampling. Primary data was collected

by use of the questionnaire and interview guide while secondary data was gathered from

review of secondary sources such as market reports, HR manuals, brochures, Ecobank

website, etc. Validity and reliability of research instruments was measured by use

standardized pilot tests and collecting data from people who had experience on mobile

banking. Before data was entered into the computer, the researcher coded and cross

checked responses to remove any errors. The data was then entered into the computer

using SPSS v16.0 which produced tables that were backed by frequency and percentage

presentation. The analysis and interpretation of findings was then done based on the

SPSS output. Narrative data from interviews and secondary sources was analyzed where

opinions, ideas, beliefs, attitudes, statements or arguments were classified into themes,

categorized and then discussed within the context of interpretation of findings. Findings

show that the most frequently used mobile banking services were payment of bills (99%),

checking account status (99%), funds transfer (98%), accessing bank statement (97%),

purchasing bank products (96%), changing password (90%) and requesting a loan (93%).

Additionally, factors related to perceived use which influenced customers to adopt

Ecobank mobile banking were attracted reliability (100%), efficiency (97%) and speed

(87%). In regard to perceived ease of use, customers were influenced by clear

instructional materials (93%), followed by ease to learn (83%) and presence of co-

operative staffs (62%). However, in terms of perceived risk and security, 99% felt not

legally protected, 98% felt they were vulnerable to MB signal failure, 89% felt that

fraudsters can access their accounts while 83% felt that Ecobank security policies did not

guarantee safety. Pertaining to its contribution in service delivery, the study finds that

MB is quick in providing services (100%), easy to access (100%), saves time (99%),

ensures physical safety (98%), saves money (97%) and provides customer comfort

(95%). The researcher also conducted a Pearson correlation test which showed that there

was a strong relationship between mobile banking and service delivery in Ecobank. The

strength of the relationship is shown by a positive correlation value of 0.892 with the

level of significance at P-value of 0.01. There is need to sensitize mobile banking

customers in Ecobank about the security measures available to protect their accounts

from unauthorized access, and continuously educate customers about new ways of

developing tight security for their accounts.

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TABLE OF CONTENTS

DECLARATION............................................................................................................... ii

DEDICATION.................................................................................................................. iii

ACKNOWLEDGEMENT ............................................................................................... iv

TABLE OF CONTENTS ................................................................................................ vi

LIST OF FIGURES ...........................................................................................................x

LIST OF TABLES ........................................................................................................... xi

LIST OF ACRONYMS AND ABBREVIATIONS ....................................................... xi

DEFINITIONS OF KEY TERMS ................................................................................ xiii

CHAPTER ONE: INTRODUCTION ..............................................................................1

1.0 Introduction ....................................................................................................................1

1.1 Background of the study ................................................................................................1

1.2 Problem Statement .........................................................................................................3

1.3 Objectives ......................................................................................................................4

1.3.1 General Objective .......................................................................................................4

1.3.2 Specific Objectives .....................................................................................................5

1.4 Research Questions ........................................................................................................5

1.5 Significance of the Study ...............................................................................................5

1.6 Limitations of the Study.................................................................................................6

1.7 Scope of the Study .........................................................................................................7

1.8 Organization of the Study ..............................................................................................8

CHAPTER TWO: REVIEW OF RELATED LITERATURE ......................................9

2.0 Introduction ....................................................................................................................9

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2.1 Theoretical Literature .....................................................................................................9

2.1.1 Mobile Banking Concept ............................................................................................9

2.1.2 Mobile Banking Tools/Devices ................................................................................10

2.1.3 Mobile Banking Services ..........................................................................................12

2.1.4 Factors that Influence Adoption of Mobile Banking ................................................13

2.1.5 Mobile Banking and Service Delivery in the Banking Sector ..................................15

2.2 Empirical Literature .....................................................................................................17

2.3 Critical Review and Research Gaps Identification ......................................................22

2.4 Theoretical Framework ................................................................................................24

2.4.1 Theory of Reasoned Action (TRA)...........................................................................24

2.4.2 Technology Acceptance Model (TAM) ....................................................................25

2.4.3 Diffusion of Innovation Theory (DIT) ......................................................................26

2.6 Summary ......................................................................................................................30

CHAPTER THREE: RESEARCH METHODOLOGY ..............................................31

3.0 Introduction ..................................................................................................................31

3.1 Research Design...........................................................................................................31

3.2 Target Population .........................................................................................................31

3.3 Sample Design .............................................................................................................32

3.3.1 Sample Size ...............................................................................................................32

3.3.2 Sampling Techniques ................................................................................................32

3.4 Data Collection Methods .............................................................................................33

3.4.1 Data Collection Instruments .....................................................................................33

3.4.2 Administration of Data Collection Instruments ........................................................34

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3.4.3 Validity and Reliability .............................................................................................34

3.5 Data Analysis Procedure ..............................................................................................35

3.6 Ethical Considerations .................................................................................................36

CHAPTER FOUR: RESULTS AND DISCUSSION ....................................................38

4.0 Introduction ..................................................................................................................38

4.1 Response Rate ..............................................................................................................38

4.2 Respondents’ Background Information .......................................................................39

4.3 Research Findings ........................................................................................................41

4.3.1 Ecobank Mobile Banking Accounts and Devices Used ...........................................41

4.3.2 Usage of Mobile Banking services in Ecobank ........................................................42

4.3.3 Factors that influence customer adoption of mobile banking in Ecobank ................46

4.3.4 Contribution of mobile banking project on service delivery ....................................52

4.3.5 Pearson Correlation ...................................................................................................55

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS ...57

5.0 Introduction ..................................................................................................................57

5.1 Summary of Findings ...................................................................................................57

5.1.1 Usage of Mobile Banking services in Ecobank ........................................................57

5.1.2 Contribution of mobile banking project on service delivery in Ecobank .................58

5.2 Conclusion ...................................................................................................................58

5.3 Recommendations ........................................................................................................59

5.4 Area for further research ..............................................................................................61

REFERENCES ..................................................................................................................62

APPENDIX 1: LETTER OF INTRODUCTION ..............................................................72

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APPENDIX 2: LETTER OF ACCEPTANCE ..................................................................73

APPENDIX 3: INTERVIEW GUIDE FOR BANK STAFFS ...........................................74

APPENDIX 4: QUESTIONNAIRE FOR BANK CUSTOMERS ....................................76

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LIST OF FIGURES

Figure 2.1: Technology Acceptance Model……………………………………………25

Figure 2.2: Conceptual Framework……………………………………………………30

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LIST OF TABLES

Table 3.1: Target Population……………………………………………………………..33

Table 3.2: Correlation Coefficient Guide………………………………………………..37

Table 4.1: Respondents’ Background Information………………………………………41

Table 4.2: Possession of Mobile Banking Accounts and Devices Used…………………42

Table 4.3: Frequency of Using Mobile Banking Services in Ecobank…………………44

Table 4.4: Perceived Usefulness…………………………………………………………48

Table 4.5: Perceived Ease of Use………………………………………………………..50

Table 4.6: Perceived Risk or Security……………………………………………………52

Table 4.7: Mobile Banking Project and Service Delivery……………………………….54

Table 4.8: Pearson Correlation…………………………………………………………56

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LIST OF ACRONYMS AND ABBREVIATIONS

ATMs Automatic Teller Machines

BK Bank of Kigali

DIT Diffusion of Innovation Theory

FSPs Financial Service Providers

GSMA Global System for Mobile Association

HR Human Resource

ICT Information and Communication Technology

MB Mobile Banking

M-Banking Mobile Banking

MKU Mount Kenya University

MM Mobile Money

MMS Mobile Messaging Service

MMT Mobile Money Transfer

PC Personal Computer

PDA Personal Digital Assistant

PIN Personal Identification Number

RURA Rwanda Utilities and Regulatory Agency

SIM Subscriber Identification Module

SMS Short Messaging Service

TAM Technology Acceptance Model

TRA Theory of Reasoned Action

WAP WAP Wireless Application Protocol

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DEFINITIONS OF KEY TERMS

Banking institution: A business organization registered and licensed to deal in lending

money obtained from depositors and the sale of bonds, securities or other obligations of

any kind.

Customer: A person, organization or group of people who make use of bank services or

products.

Mobile banking: An arrangement that allows customers of a financial institution to carry

out transactions by use of mobile devices such as a mobile phone, iPad or tablet.

Project: Planned set of interrelated activities that are executed by a banking institution

over a fixed period and within certain costs and other limitations.

Project implementation: The process of executing project activities to ensure that the

targets and plans are achieved.

Service delivery: The process of providing a service to customers in a banking

institution.

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CHAPTER ONE: INTRODUCTION

1.0 Introduction

This research focuses on Mobile Banking Project implementation and service delivery in

the banking sector by considering Ecobank Mobile Banking project as a case study. This

chapter therefore highlights the background, statement of the problem, research

objectives, scope and significance of the study.

1.1 Background of the study

Over the past 15 years technology has increasingly been employed in the delivery of

services. The adoption of technology into service industries is becoming a strong trend as

service providers are now being urged by industry bodies to invest in technology

(Kwashie, 2012) as a way of securing their future in the electronic age.

The role of technology in service organizations has been predominantly employed to

reduce costs and eliminate uncertainties. In the service sector, technology has been used

to standardize services by reducing the employee/customer interface (Gonzalez, 2008).

The majority of consumers now more than ever prefer to opt for a technology-based

service delivery over that of the employee.

In the banking sector, technological progress has tremendously improved service delivery

by ensuring convenience/accuracy, feedback/complaint management, efficiency, queue

management, accessibility, cost effectiveness and customization. Service delivery has

been defined by Adewoye (2013) as the distribution of services to meet customer needs,

demands and preferences.

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One of the most important technologies adopted by the banking sector to improve

effectiveness, convenience, efficiency and time management in service delivery has been

the adoption mobile banking. The technology emphasizes provision of banking services

anywhere, anytime to anybody with the sole objective of enhancing customer outreach

and flexibility in transactions (Carr, 2007).

Mobile banking is a system that allows customers of a financial institution to conduct a

number of financial transactions through a mobile device such as a mobile phone or

personal digital assistant (PDA). It also refers to provision and availment of banking and

financial services with the help of mobile telecommunication devices (Tiwari, Buse &

Herstatt, 2007). Services offered include mobile money transfers and payments, mini-

statements and checking account history, alerts on account activity, monitoring of term

deposits, access to loan statements, access to card statements, insurance policy

management (Tiwari & Buse, 2007).

The emergence of mobile banking projects in Africa was first implemented in Kenya in

2007 (Godoy, Tortora, Sonnenschein and Kendall, 2012). As the new wave sweeps

towards a cashless economy, Rwanda has equally kept pace. Telecom companies and

banks through mobile banking to create a platform for the introduction of the cashless

economy that will help to bring on board the unbanked. Banque Populaire, Eco Bank,

FINABANK, I&M Bank and Bank of Kigali (BK) among others have already embraced

the technology which enables clients to conduct banking transactions via their mobile

phone handsets thus curbing the long queues within the bank's premises.

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Ecobank Mobile Banking Project involves the delivery of financial services to bank

customers through various mobile channels. Mobile banking products include e-product

(such as e-statements, e-alerts, SMS banking) internet banking (such as online and real-

time account information (Sonko, 2011), account statements and history, term deposits,

loan/standing instruction enquiries, balance enquiry, transaction details), transfers and

payment services such as foreign exchange, western union and rapid transfer (Petrova,

2002), loans (personal loan, car and motor cycle loan, mortgages), Ecobank Mobile

money (deposit and withdraw money, send and receive money, purchase airtime, pay for

bills, goods and services and check account balance), ATM and VISA card (Rivari,

2005).

The focus of the study was to provide academicians with a fact base on the relevance and

frequency of usage of mobile banking services in Ecobank Rwanda Limited, Mobile

Banking devices used, factors influencing customer adoption of mobile banking services

in Ecobank Rwanda Limited and the contribution of mobile banking project on service

delivery.

1.2 Problem Statement

Mobile banking projects offer opportunities for improving service delivery and increasing

revenues in banking institutions. These include monetizing the value of customer

analytics, delivering greater real-time access to products and services, and conducting

targeted marketing campaigns based upon the knowledge of consumer preferences that

banks collect, promoting convenience, flexibility and speed of delivery (Delloitte and

Touche, 2010).

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Rwanda has been identified as one of the eight (8) fastest growing mobile banking

economies in the world (MTN/BK Joint Media Releases, June 28, 2012) because of her

commitment to financial sector reforms one of which is to speed up service delivery

through technological progress.

Amidst this technological revolution, Ecobank Rwanda implemented mobile banking

projects in order improve efficiency, flexibility and speed of service delivery so as to

compete favorably in the Rwandan financial sector.

However, there is no available academic research that has been conducted in Rwanda

using Ecobank as a case study to establish the role of mobile banking towards service

delivery. This means that there no academic data on whether mobile banking improves

service delivery in Ecobank. The research problem for this study therefore is: “what is the

role of mobile banking on service delivery in Ecobank Rwanda Limited between 2010

and 2015?”

1.3 Objectives

The study was guided by two types of objectives. Those included the general objective

and specific objectives as indicated below:

1.3.1 General Objective

The main objective of the study was to examine the contribution of mobile banking

project implementation on service delivery in the banking sector focusing on Ecobank

Rwanda Limited Main Branch, which is located in Nyarugenge District Kigali City.

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1.3.2 Specific Objectives

i. To assess the usage of Mobile Banking services in Ecobank Rwanda Limited

Main Branch in Kigali City.

ii. To examine the factors that influence customer adoption of mobile banking in

Ecobank Rwanda Limited - Main Branch in Kigali City.

iii. To determine the contribution of mobile banking project on service delivery in

Ecobank Rwanda Limited Main Branch in Kigali City.

1.4 Research Questions

i. To what extent are Mobile Banking services used in Ecobank Rwanda Limited -

Main Branch in Kigali City?

ii. What are the factors that have influenced customer adoption of mobile banking in

Ecobank Rwanda Limited - Main Branch in Kigali City?

iii. What is the contribution of mobile banking project on service delivery in Ecobank

Rwanda Limited - Main Branch in Kigali City?

1.5 Significance of the Study

To Ecobank Rwanda Limited: The findings will enable Ecobank Rwanda Limited to

come up with realistic policies for improving its mobile banking services since it is used

by many mobile phone subscribers. The findings especially on challenges are expected to

remind the technical staff about the implications of their technology in creating quality

mobile banking services.

Other banking institutions: The findings of this study will be seen as a contribution to

existing works on mobile banking and performance of banks. This will help to develop

the literature on mobile banking.

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To Mount Kenya University: Indeed, this will help other researchers and scholars in

building up academic knowledge in a wide range of issues about financial services

delivery. Therefore, the final project report will be put in the MKU library which will add

to the stock of academic resources.

To the Researcher: The study will also help the researcher to obtain a Masters of

Business Administration in Project Management from MKU. This is because the study

forms a partial requirement for the award.

Bank customers: The study will highlight the importance of mobile banking over brick

and mortar banks. This will encourage people to adopt this banking platform so as to

easily access bank services on the move.

Other research students and scholars: The final project report will act as a reference

manual for other research students and scholars. This will help to increase knowledge in

the academic field

1.6 Limitations of the Study

This research was limited by the following factors:

Due to lack of documented case study information of Mobile banking services in

Rwanda, the researcher lacked enough empirical data for complementing primary data.

As such the researcher was forced to rely solely on studies from other countries when

trying to compile empirical literature.

The study was limited to the role of mobile banking on service delivery in banks, yet

there are many other factors that influence service delivery in banks. Therefore, even if

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the relationship between the two variables was found out to be very significant, it remains

unfounded whether mobile banking has promoted service delivery in exclusion of other

factors.

Mobile banking is a new service that has been recently introduced in Rwanda. For that

matter, some respondents especially customers did not fully understand how it operates.

For this reason the researcher encountered some poor/irrelevant responses during

interviews. However, respondents were interviewed in the local language for easy

response.

1.7 Scope of the Study

The scope of this study refers to the limits or coverage of the study. It involves subject

scope, geographical scope and time scope.

Subject scope: The study focuses on mobile banking project and service delivery in

banks in Rwanda. Mobile banking is the independent variable for this study while service

delivery is the dependent variable. These variables were preferred because studies

indicate that banks in Rwanda provide better quality services than other sectors (Pamela

& Lakabamba, 2010). This improvement in service delivery coincided with the adoption

of mobile banking platforms. The focus on these variables was therefore intended to

examine whether the improvement in service delivery was brought about by mobile

banking.

Geographical scope: The study was conducted at Ecobank Rwanda Limited Main

Branch in Kigali City Nyarugenge district. This branch was preferred because it has a big

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number of customers and as such the data needed to accomplish the work was presumed

to be easy to collect.

Time scope: The study covered the period from 2010-2015. This period was preferred

because it is during this time that the financial sector registered rapid technological

revolution.

1.8 Organization of the Study

This research is divided into five chapters. The first chapter is the general introduction. It

covers the background of the study, statement of the problem, research objectives and

questions, limitations, scope and significance of the study.

Chapter two is the review of related literature and it covers the theoretical literature,

empirical literature, critical review and gaps identification, theoretical framework and

conceptual framework.

Chapter three is the methodology; it covers the research design, target population, sample

design, data collection methods, data analysis and ethical considerations.

Chapter four deals with the presentation, analysis and interpretation of results. It

specifically focuses on the mobile banking devices used, the frequency of usage of

mobile banking services, factors that influence customers to adopt mobile banking

services, contribution of mobile banking on service delivery, and the Pearson correlation

of mobile banking and service delivery in Ecobank Rwanda Limited.

Lastly, chapter five covers the summary of findings, conclusions and recommendations.

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CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.0 Introduction

In this chapter, the research discusses the related literature on mobile banking project

implementation and service delivery in the banking sector. The literature focuses on

theoretical and empirical literature, critical review and gap identification, theoretical and

conceptual frameworks.

2.1 Theoretical Literature Review

2.1.1 Mobile Banking Concept

Mobile Banking is a system of providing services to a customer to carry out banking

transactions on the devices especially the mobile phone through a cellular service-

provider. Banks have to provide facilities to their customers whenever they are in need

and wherever they are (Tiwari, et al., 2007b). This facility can rather be called,

“anywhere and any moment banking”, but it is restricted to only information about a

person‘s account and not the cash services. Mobile banking operates through short

messages and customers have to configure Short Message Service (SMS). They have to

activate Mobile Messaging Service (MMS) in the mobile phone (Puschel, et al., 2010).

Mobile banking is one of the important channels through which customers can be

migrated from front office operations to indirect channels, in order to save their valuable

time as also that of the executives working in the bank. The time saved can be effectively

utilized for business development and cost reduction.

Mobile devices, especially cellular phones have gained so much prominence in everyday

life that a person cannot survive without this communication channel (Senn, 2000). In

every country the number of consumers using cell phones has increased to unexpected

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levels. It is believed that at least 90% of these customers have bank accounts in various

banks which use technology and avail themselves of mobile banking services (Muisyo, et

al., 2014). Therefore, banks have chosen mobile banking as one of the best methods for

channel migration of customers to improve service delivery and customers are also

pleased to have these services.

2.1.2 Mobile Banking Tools/Devices

The provision of mobile banking relies on a mobile end-user device; currently there are in

fact two basic types of mobile end- user devices - the mobile (cellular, cell) phone and

the portable handheld computer known as Personal Digital Assistant (PDA).

Mobile Telephone Service

Mobile Telephone service is the most common device for m-banking as compared to

PDAs. Digital mobile telephone services offer voice communication and secure data

communication. Mobile phones are equipped with a smart card (Subscriber Identification

Module card, or SIM card). The SIM card can store user data; text messaging is enabled

trough a special stored application known as Short Message Service (SMS) (Petrova,

2002).

The basic functionality of the SIM card supports additional cervices. The extended

platform is called STK (SIM Application Toolkit Specification). It allows different

operators to load their own applications into the SIM, with full access to the keyboard,

the menus and the communications network.

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These applications can offer new value-added service to the owner of the mobile handset

– and among them, access to mobile transactions (mobile banking) based on SMS (Lule,

et al., 2012).

The installed mobile device base, the security offered by the platform and the level of

standardization achieved provide a reliable platform for personal financial services.

Currently, services offered to subscribers vary from checking an account balance to

making a bill payment, transferring funds. More innovative services include level alerts,

automatic payment, direct payment (e.g. a car wash). Current developments include

applications based on the standard for mobile devices known as WAP Wireless

Application Protocol (WAP), which allows full access to the Internet (Riivari, 2005).

Senn (2000) also agrees that mobile phones will continue to be an important and

significant part of the part of the underlying infrastructure for mobile commerce and will

be the device of choice for mobile transaction management, digital content delivery, and

telemetry services. Still there is another device which will play a role in transaction

banking applications - the PDA.

Personal Digital Assistant

A personal digital assistant (PDA), also known as a handheld PC, or personal data

assistant (Alexander, 2009) is a mobile device that functions as a personal information

manager. The term evolved from Personal Desktop Assistant, a software term for an

application that prompts or prods the user of a computer with suggestions or provides

quick reference to contacts and other lists.

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PDAs were largely discontinued in the early 2010s after the widespread adoption of

highly capable, in particular iOS and Android-based, smartphones (Smith & Wempen,

2011).

It must be recognized that nearly all PDAs have the ability to connect to the Internet

which allows the user to electronically connect with his/her bank account on the move. A

PDA has an electronic visual display, enabling it to include a web browser, all models

also have audio capabilities enabling use as a portable media player, and also enabling

most of them to be used as mobile phones (Suri & Jack, 2011).

2.1.3 Mobile Banking Services

Anguelov, et, al. (2004), Ovia (2001) and Chovanova (2006) have identified various

services that are provided by commercial banks through mobile banking. These services

include cash transfers, payment of bills, account statements, account opening, etc.

Cash transfers: This involves the transfer of money from one account to another by use

of mobile devices. It can involve transferring money from a bank account to a mobile

money account as well as transferring money from one physical location to another via

mobile devices. For example, people who live and work in foreign countries may transfer

money to their relatives and friends back home using mobile money.

Payment of bills: This involves effecting a payment for certain services by use of mobile

money. These services may include airtime, water, electricity, school fees, insurance,

purchase of securities on the stock exchange, etc.

Account statements: Through mobile money, a customer can access his/her account

statement and determine how much money balance is available, how many transactions

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were made on the account, the destination and dates of those transactions, etc. This saves

time from going to the physical ban branch.

Account opening: The prospective customer can also open up an account with the bank

using mobile banking devices after seeking guidance from his/her bank on the procedure.

Other mobile banking services: Other mobile banking services according to the authors,

include electronic check conversion, transfer funds, purchase bank products, change

passwords, request a credit/debit card or cheque book, request a loan and check status,

stock information, tax documents and information/tax payment, currency exchange.

2.1.4 Factors that Influence Adoption of Mobile Banking

There are various factors that can influence users’ adoption of mobile banking. These

factors include demographic characteristics, convenience prior internet knowledge,

security perception, perceived risk and level of awareness about mobile banking.

Demographic factors have also been found to be associated with adoption of different

banking channels, especially internet banking (Al-Ashban and Burney, 2001; Karjaluoto

et al., 2002). For instance, people with high educational attainment may have an aptitude

for computers and possess good information processing skills. These qualities are crucial

in the context of internet banking and therefore a relationship between formal education

and adoption is propounded.

Convenience has been identified as an important adoption factor of innovation

technologies (Pew, 2003).

The author defines convenience goods as a class of consumer products that were

intensively distributed and required minimal time and physical and mental effort to

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purchase. For example, the 24-hour service availability, home access, world wide access,

time savings, and wide variety of services accessible (Gerrard & Cunningham, 2003) are

seen as drivers of convenience in mobile banking.

Gerrard and Cunningham (2003) contend that convenience is one of the dominating

factors in transaction channel preferences and a key determinant of consumer satisfaction

with mobile banking. Kwashie (2012) also observes that another factor that influences the

consumer adoption of internet banking is the prior experience of technologies, especially

prior experience of computers. Thus, consumer's familiarity with technologies in general

facilitates her appreciation of the potential added value which is inherent in a technology.

The prior computer experience is associated with use of use of PC, the Internet and e-

mail.

Security is one of the very important factors in determining the decision of consumers to

use mobile banking. According to Polatoglu and Ekin, (2001), security comprises of three

dimensions: reliability, safety, and privacy. Consumers’ concerns about security, which

arise from the use of an open public network, have been emphasized as being the most

important factor inhibiting the adoption and use of internet banking (Hamlet and Strube,

2000).

The next factor that influences the adoption of internet banking by customers is the

perceived risk. Eastin (2002) argue that consumer risk perceptions to be a primary

obstacle to the future growth of mobile banking.

Perceived risk is defined in terms of uncertainty and negative consequences associated

with consumer’s actions. Perceived risk increases with uncertainty and/or the magnitude

15

of associated negative consequence (Akinci, et al., 2004). It should be stressed that

consumers are influenced by risks that they perceive whether or not such risk exists.

Consequently the lower the perception of risks involved in using Internet banking the

more likely an individual would be prepared to use it.

The important factor that consumers consider before adopting is the level of awareness

about mobile banking. In this context, Nassri (2011) identified it as a major factor

impacting the adoption. While the use of internet banking services is fairly new

experience to many people, low awareness of mobile banking is a major factor in causing

people not to adopt internet banking.

2.1.5 Mobile Banking and Service Delivery in the Banking Sector

According to Fiserv (2013) adoption of mobile banking service by financial institutions

has far reaching effects in many aspects. Mobile banking service adoption has the

potential of greatly improving the level of service delivery in any financial institution.

This happens as a result of the short time it takes a customer to complete a transaction

using a mobile phone than walking to the bank to have the payment effected. This

improvement in service delivery due to adoption of mobile banking has the potential of

capturing approximately 20% online customers who prefer better service delivery

through mobile banking.

An increase in the number of customers is also likely to lead to higher revenues and

increased profits for the bank. However, there are concerns from customers that although

service delivery greatly improves with adoption of mobile banking, security of mobile

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banking service still remains a challenge that needs to be addressed in order to enhance

service delivery.

Gonzalez (2008) is one of the scholars who assert that mobile banking has significantly

transformed traditional banking practices to the extent that it has created a pattern shift in

marketing practices resulting in positive performance in the banking sector. This is an

indication that efficient delivery of quality customer service in the banking industry is to

a greater extent facilitated by adoption of appropriate information technology.

Similarly, Christopher, et al. (2006) equally argues that mobile banking provides an

important channel through which commercial banks can market their products and

services and thus is more of a necessity for commercial banks that anticipate financial

and customer service delivery success. It is evident too that the quality and efficiency of

service delivery within the banking industry has improved significantly in the global

market as a result of integrating information communications technology into a number

of banking activities.

Stevens (2002) indicates that rapid changes in business activities in the form of

technological improvement require banks to serve their customers electronically. It has

therefore become more important for commercial banks to adopt information and

communication technology in order to cope with the complex business environment that

has more informed customers.

This drive to transform the operations of commercial banks may not be successful

without the adoption of appropriate ICT such as mobile banking since it affects quality of

products and services and the way they are delivered to customers (Gupta, 2008).

17

Information communication technology such as mobile banking service has been found

to lead to improvement in business efficiency and service quality and hence attract and

retain customers (Kannabiran & Narayan, 2005).

Mobile banking has experienced explosive growth and has transformed traditional

practices in banking (Gonzalez, 2008). As per prediction of Maholtra and Singh, (2007)

the m-banking is leading to a paradigm shift in marketing practices resulting in high

performance in the banking industry. Delivery of service in banking can be provided

efficiently only when the background operations are efficient. An efficient background

operation can be conducted only when it is integrated by an electronic system. The

components like data, hardware, software, network and people are the essential elements

of the system. Banking customers get satisfied with the system when it provides them

maximum convenience and comfort while transacting with the bank. Internet enabled

electronic system facilitate the operation to fetch these result.

According to Christopher, et al., (2006), m-banking has become an important channel to

sell the products and services and is perceived to be necessity in order to stay profitable

in successful. There is a growing interest in understanding the users’ experience (Pyun,

2002), as e-banking is observed to be a larger concept than user satisfaction. Customers

have therefore started evaluating the banks based on the convenience and comforts it

provides to them.

2.2 Empirical Literature

Various empirical studies have been conducted in regard to m-banking tools and services,

factors favoring adoption of m-banking and the impact of m-banking on service delivery

18

in banks. In regard to the mode of application, mobile banking is conducted through

mobile devices such as phones and other related tools.

A recent empirical study by Singh (2014) found that mobile phones and personal digital

assistants were the only available mobile devices for facilitating Mobile banking services

in the Capital Region of Delhi in India. The study further found out that with an

increasing mobile subscriber base in India, mobile banking has picked up steam in recent

years. The financial services that were conducted via m-banking account opening,

checking balance, changing PIN, payment of bills, purchasing airtime and tax payment

and documentation among others.

Regarding the factors that influence adoption of m-banking, perceived usefulness,

perceived ease of use, perceived risk and social influence have been identified as the

most significant factors. Perceived usefulness is the primary factor that determines the

behavioral aim to use a computer system (Venkatesh and Davis, 2000). According to

(Akturan and Tezcan, 2012), perceived usefulness directly affected attitudes towards

mobile banking, and that attitude was the major determinant of mobile banking adoption

among 435 university students of Turkey.

In a recent research by (Chitungo and Munongo, 2013) conducted on the adoption of

mobile banking services in rural districts of African country Zimbabwe, perceived ease

of use had significant effect on users’ attitude thus influenced the intention to adopt.

A study performed on the factors influencing the intention to adopt mobile banking

services in Kenya, perceived ease of use was one of the significant factors in usage

intention (Lule, Omwansa, and Waema, 2012).

19

The possible risk of illegal activities and fraud has always been a concern for both

consumer and service providers. According to (Dineshwar and Steven, 2013), perceived

risk and reliability were found to be the main obstacles to mobile banking usage in the

African country of Mauritius. Risk in mobile banking is perceived to be higher than

conventional banking because information exchange on wireless infrastructure, which

produced inherent doubts among consumers as hacking and other malicious attacks,

might cause financial and personal data loss (Yousafzai, et al, 2003).

Social influence has been revealed to have a positive effect on the intention to adopt

mobile banking services. The empirical research conducted by (Yu, 2012) in Taiwan by

sampling 441 respondents, the most significant predictor was social influence, in the

individual intention to adopt mobile banking.

In his study Eastin (2002) found that perceived convenience was the strongest predictor

of online banking usage. Finally, the same study also indicated that the perceived

convenience was the most influential variable of overall adoption of all four e-commerce

activities investigated. Karjaluoto, et al. (2002) showed that prior experience with

computers and technologies and attitudes towards computers influence both attitudes

towards online banking and actual behaviors.

In an empirical study of Tunisian consumers Nassri (2011) found that consumers were

unaware about the possibilities, advantages/disadvantages involved with mobile banking.

Guiltinan and Donnelly (1983; cited in Nasri, 2011) identify "information about the

benefits of using a product/service" as an essential service/product promotion strategy.

Hence, for adoption of internet banking, it is necessary that the banks offering this service

20

make the consumers aware about the availability of such a product and explain how it

adds value relative to other products of its own or that of the competitors.

In terms of its influence on service delivery in banks, a study carried out by Adewoye

(2013) impact of mobile banking on service delivery in the Nigerian commercial banks

reveals that mobile banking improves banks’ service delivery in many ways such as

transactional convenience, saving of time, quick transaction alert and save of service cost

which has recuperate customer’s relationship and satisfaction.

The study recommends that the management of commercial banks should create

awareness to inform the public about the benefits derived on the mobile banking service.

Collaboration among banks should perfectly maintain, skilled manpower and computer

wizard should be employed by every bank in order to prevent fraudulent personnel and

hackers from manipulating the banks’ data and stealing money from the banks’ accounts.

Adewoye (2013) further recommends that provision and maintenance of public network

system, such as telephone is fundamental to the efficient functioning of the mobile

banking service.

According to the findings of an investigation on electronic payments systems and mobile

banking in Nigeria carried out by Agboola (2006), it was established that that there has

been a very significant change from the use of cash to electronic payments. It was clear

from the study findings that the automation of payment systems had significantly reduced

the volume of cash transactions handle by commercial banks.

It was also evident that mobile banking has great potential of broadening the customer

relationship; improve customer service delivery which will result to high rate of customer

21

retention and customer loyalty. This will in turn enable commercial banks to gain a large

portion of market share. However this can only be possible if challenges such as such as,

ineffectiveness of telecommunications services, epileptic supply of power, high cost, fear

of fraudulent practices and lack of facilities necessary for their operation were taken care

of. Agboola (2006) further asserts that mobile banking has also changed service delivery

patterns of banks completely by radically reducing the volume of direct cash transactions.

Kwashie (2012) carried out a study on the impact of electronic banking on service

delivery to customers of Ghana commercial bank limited. The study findings showed a

positive correlation between electronic banking and service delivery which implies that

there is a positive impact of electronic banking on service delivery.

Okiro and Ndungu (2013) carried out a study on the impact of mobile and internet

banking on performance of financial institutions in Kenya. The study established that

these two technologies had not significantly affected the performance of the financial

institutions. In a study carried out by Aluoch (2012) on the adoption of mobile banking in

Kenya, it was revealed that customers are quickly adopting mobile banking technology

amid security concerns.

An exploratory study by Sonko (2011) on the status of mobile money services in Uganda

found out that most mobile banking subscribers reported easy access to financial services,

speed and reliability, reduced transaction costs and convenience as the major reforms in

financial service delivery that have been made easy by the introduction of mobile

financial services. However, 80% of the respondents reported lack of skills to operate the

mobile devices, fear of sending money on wrong accounts and financial cybercrimes as

the fears they still experience for possessing mobile money accounts.

22

2.3 Critical Review and Research Gaps Identification

Although mobile banking is an effective platform for improving service delivery in

banks, it still faces a challenge of limited user confidentiality and trust. This is due to the

fact that there are no clear financial regulations and legislation to standardize mobile

banking operations. Due to this challenge users find it unreliable to transact business via

this platform where large amounts of money are involved (Njenga, 2008).

Additionally, there is maximum amount of money that can be transacted on mobile

banking. For example, in Bank of Kigali, the maximum amount of money that can be sent

from the customer’s M-money account to the Bank account and vice versa is Rwf

500,000 per day (Bank of Kigali, 2015). This limits business transactions and hinders

service delivery.

Though not seriously impaired, the capacity of a wider population of Rwanda m-banking

users is fairly curtailed by not being fully conversant with all that they can accomplish

through the mobile financial platform. Deliberate interventions must be undertaken to

successfully ensure that the targeted persons particularly the rural residents are

empowered not only with technology but with skills and finance as well. To prevent these

communities from lagging behind they must be familiarized with the benefits and

opportunities of mobile banking.

Calculated strategies to overcome hindrances require exploration so that these groupings

can be converted into meaningful participants who will utilize this technology for

economic take off.

Furthermore, contrary to the great excitement about the potential for mobile banking in

improving efficiency and speed, there is limited scholarly research on empirical benefits

23

of mobile banking towards service delivery in the developing world (Donner and Tellez,

2008). With the exception of Uganda (Kakoza, 2008; Ssonko, 2011) and Kenya (USAID,

2011; Suri and Jack, 2011; Morawczynski, 2009), the majority of the studies conducted

on mobile banking application and service delivery (such as Donovan, 2012; Mas and

Radcliffe, 2010) have been conducted outside East Africa leaving the region especially

Rwanda with a dearth of scholarly research on mobile banking and its effect on service

delivery.

Yet it presents a potential market for the development of this financial service especially

in rural areas where the majority of unbanked populations live. In Rwanda, particularly,

the researcher finds no academic research that has been conducted on mobile banking. It

is towards this goal of analyzing mobile banking and service delivery on the local context

that this study aims to make a contribution.

Lastly, since most research studies are based on only TRA and TAM theories, which

consist of two constructs; perceived ease of use and perceived usefulness which are not

sufficient to explain factors affecting adoption of M-Banking and how it affects service

delivery. There is need to adopt more theories in this study in order to include more

variables namely; relative advantage, compatibility, complexity, trialability, and

observability. For that matter, the innovation diffusion theory has been incorporated in

this study. Lastly given that much of existing research relevant to this study are on online

banking, M-commerce and electronic commerce, this research study will shed light on

M-banking project in Rwanda and its effect on service delivery. Hence fill the research

gap in this regard.

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2.4 Theoretical Framework

Enormous theoretical work has been compiled in regard to mobile banking adoption and

service delivery. Among those, the Theory of Reasoned Action (TRA), Technology

Acceptance Model (TAM) and Diffusion of Innovation Theory (DIT) have been selected

as suitable and relevant for adoption in compiling the theoretical foundation of this study.

2.4.1 Theory of Reasoned Action (TRA)

Theory of Reasoned Action is a psychological theory that tries to explain an individual’s

action that is determined by his/ her behavioral intention to perform it (Ajzen and

Fishbein, 1975). It is one of the most important theories that are used to explain the

human behaviors (Puschel, et al., 2010) in regard to adopting new technology.

According to their theory, behavioral intention is explained by people's attitudes toward

that behavior and subjective norms. People's attitude toward a behavior includes

behavioral beliefs, assessment of the consequences of behavior, subjective norms,

normative beliefs and motivations that must be answered (Riivari, 2005). This theory, as

long as the behavior is voluntarily controlled by the individual, can accurately explain the

adoption of m-banking technology and its effect on service delivery in the banking sector

(Laukkanen and Cruz, 2009).

Therefore, TRA is a useful model that will be used to assess mobile banking project in

Rwanda and how it influences service delivery. In 1989 Davis took the same model and

extended it to the Technology Acceptance Model (TAM) and linked it to the user

acceptance of an information system.

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2.4.2 Technology Acceptance Model (TAM)

The Technology Acceptance Model (TAM) was originally proposed by Davies in 1986.

According to Davis (1989, cited in Park, 2009), TAM predicts user‘s acceptance of

Information Technology and usage in an organizational context. TAM focuses on the

attitude explanations of intention to use a specific technology or service and it has

become a widely applied model for user acceptance and usage (Davis, 1986; cited in

Lule, et al., 2012). Bertrand and Bouchard (2008) have also demonstrated that TAM is a

valid, robust and powerful model for predicting technology user acceptance. TAM was

also the first model that established external variables (such as geographical and social-

cultural factors) as key factors in studying and determining user’s behaviors and attitudes

in technology adoption (Davies, 1986; cited in Lule, et al., 2012). Figure 2.1 shows the

original illustrated Technology Acceptance Model.

Figure 2.1: Technology Acceptance Model

Source: Original TAM (Davies, 1989; cited in Park, 2009)

TAM model which deals with perceptions as opposed to real usage, suggests that when

users are presented with a new technology, two important factors influence their decision

about how and when they will use it (Davis, 1989; cited in Lule, et al., 2012). These key

factors are perceived usefulness of the technology and perceived ease-of technological

Perceived

Ease of

Use

Perceived

Usefulness

Attitude

Towards

Use

Actual Use

Behavioral

Intention

to Use

External

Variables

26

use. Perceived usefulness of technology is the degree to which a person believes that

using a particular system would enhance his or her job performance while perceived

ease-of-use is the degree to which a person believes that using a particular system would

be free from effort.

TAM posits that a user’s acceptance of information system is determined by that users’

intention to use the systems, while perceived usefulness and ease of use can predict the

usage intention, and perceived ease of use is hypothesized as a predictor of perceived

usefulness.

According to Fishbein and Ajzen (1975, cited in Lule, et al., 2012), users’ beliefs

influence their attitude, which in turn influence behavioral intention. Both perceived

usefulness and perceived ease of use are beliefs. Thus, they will affect users’ attitude. In

addition, TAM states that perceived ease of use will have a direct effect on perceived

usefulness.

Therefore, based on the above TAM analysis, it is worth to conclude that users’ attitude

to use of M-banking, perceived usefulness of M-banking and perceived ease of use of M-

banking have a significant effect on service delivery among banks that have adopted M-

banking platform.

2.4.3 Diffusion of Innovation Theory (DIT)

The Diffusion of Innovation Theory was first propounded by Rogers in 1983 (Rogers,

2003) and later elaborated by Mahajan and Rambocas in 2012. Accordingly, Rambocas

(2012) defines innovation as any idea, object or practice that is perceived as new by

members of the social system. Diffusion of innovation is the process by which the

27

innovation is communicated through certain channels over time among members of

social systems. Diffusion of innovation is dependent on the perceived characteristics of

an innovation.

Diffusion of innovation theory attempts to explain and describe the mechanisms of how

new inventions in this case mobile banking is adopted and becomes successful. Rogers

(1983, 2003) identified five critical attributes that greatly influence the rate of adoption of

an innovation. These include relative advantage, compatibility, complexity, triability and

observability. According to Rogers, the rate of adoption of new innovations will depend

on how an organization perceives its relative advantage, compatibility, triability,

observability and complexity (Rambocas, 2012).

In terms of relative advantage, the use of new technology is highly dependent on the

comparable benefits derived from its use. New technology is considered to possess a

relative advantage over existing technology based on its perceived usefulness or its

ability to enhance the user’s state of well being defined either economically, financially,

physically or socially (Taylor & Todd, 1995).

The ease of use refers to the extent to which the new system would require less physical

and mental effort in getting output and is based on subjective opinions of customers.

Compatibility is the second dimension of DIT and refers to the extent to which the

innovation is deemed to be aligned with customer values, past and potential wants and

needs (Rambocas, 2012).

28

Al-Majali and Nik Mat (2011) refer to compatibility as the extent to which the innovation

supersedes all other options in meeting the desires and needs of the adopter. It generally

refers to the ability of the technology to fit within the lifestyle of the customer.

The third dimension of DIT model is complexity which relates to the amount of physical

and mental effort require understanding the innovation. The level of complexity of

internet banking is a function of the level of skill and expertise the customer has with the

internet and computer. Trialability allows the adopter the opportunity to test the

innovation on a limited time scale before full adoption takes place.

Rogers (2003) argued that trial of innovation reassures the adopter and reduces risks and

uncertainty associated with adopting the technology. There is a positive correlation

between the likelihood of adopting innovative technology and the opportunity given to

customers to experiment with this technology prior to adoption.

The fifth and last component of the DIT model is observability, which is the extent to

which the technology is observable by others. Because of the nature of the service under

investigation, the relevance of this construct to the study’s purpose was deemed

redundant. In other words, most if not all banking transactions are done privately, not

observable or visible to others. Therefore, the construct of observability does not apply to

private purchases (Al-Majali & Nik Mat, 2011).

Therefore, with regard to the banking sector in Rwanda, bank customers will be

motivated to adopt mobile banking platform because of its relative advantages like

convenience, speed, availability of mobile banking tools, compatibility with their

financial needs such as effective mobile payments via mobile money.

29

However, Sevcik (2004) stated that not all innovations are adopted because, even if an

innovation is good, it may take a long time for it to be adopted by users. He further stated

that resistance to change may be a hindrance to diffusion of innovation which slows

down the adoption rate although it might not stop the innovation. This is relevant in

Rwanda especially rural areas where the majority rural folks lack the necessary mobile

tools and skills to use mobile banking platform.

2.5 Conceptual Framework

The conceptual framework in Figure 2.2 shows the link between mobile banking project

implementation and service delivery.

Figure 2.2: Conceptual Framework

Source: Researcher

According to the Figure 2.2, mobile banking as an independent variable adopted for this

study involves the use of mobile devices such as mobile telephone service, Automatic

Teller Machines and Personal Digital Assistants (see section 2.1.2) to execute mobile

banking transactions.

M-Banking Project

Mobile telephone

Automatic Teller Machines

Personal Digital Assistants

Service Delivery

Cash transfers

Payment of bills

Statements

Account opening

Government Regulations

Customers’ perceptions

Independent Variable Dependent Variable

Intervening Variables

30

Service delivery as a dependent variable for this study involves the ease of delivering

mobile banking services such as opening account, checking balance, requesting bank

statement, payments of bills, money transfer, payment of tax, changing account

password, etc (see section 2.1.3).

On the other hand, there are also intervening variables such as government regulations

and customers’ perceptions which affect the adoption and application of mobile banking.

For example, government regulations will determine the security and safety of mobile

banking while customer perceptions will encourage or discourage users to adopt m-

banking if they are positive or negative respectively.

2.6 Summary

Empirical and theoretical evidence in the literature has shown that mobile banking offers

various services which improve service delivery in banking institutions. This is also

supported by both the theoretical and conceptual frameworks which elaborate how each

variable influences the other in the mobile banking paradigm.

Particularly, Technology Acceptance Model (TAM) suggests that perceived usefulness of

the technology and perceived ease of use are the two important factors that influence user

adoption of m-banking. Perceived usefulness of technology shows the importance of the

technology which includes convenience, speed reduced transaction costs while perceived

ease of use shows that users are able to use the technology without technical hardships.

All these factors influence service delivery.

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CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction

This chapter focuses on the methodology of research; namely research design, target

population, sample design and size, sampling technique, data collection methods,

reliability and validity of data instruments, data analysis procedure and ethical

consideration.

3.1 Research Design

The researcher used a descriptive case study design. This research design was preferred

for this study because the researcher was interested in determining the link between two

variables (mobile banking and service delivery in the bank). This means to study whether

the introduction of m-banking was linked to change in service delivery of financial

services in Ecobank.

The researcher used Ecobank Rwanda Limited – Main Branch as a case study. Creswell

(2008) defines a case study as a detailed analysis of a single person, group or

geographical setting and its relationship to a phenomenon. The case study approach was

used because according to Lodico, et al. (2006), case studies allow the researcher to

collect in-depth data from a single phenomenon.

3.2 Target Population

The target population of this study was 698 people who included Ecobank staffs and

customers. According to Ecobank HR and customer database, there were 67 staffs in

Ecobank Main Branch and 631 customers as shown by Table 3.1.

32

Table 3.1: Target Population

Population Strata Target population

Ecobank staffs 67

Ecobank customers 631

Total 698

Source: Ecobank, HR Office/Customer Database (2015)

3.3 Sample Design

3.3.1 Sample Size

Since the total target population of this study was 698 people, the researcher was unable

to contact the entire population because of limited time. Therefore, the sample size was

determined based on Yamane’s 1967 simplified formula for calculating sample sizes

(Israel, 2013). This formula is stated as , where n is the sample size, N is

the population size (698), and e is the level of precision (0.05).

The sampling equation below shows the application of Yamane’s formula to the above

population size which gives the sample size of 258 respondents.

Therefore, the sample size was 258.

3.3.2 Sampling Techniques

The researcher used simple random sampling to select population samples for the study.

This method was applied in selecting both the bank customers and staffs.

33

To apply this technique, the rotary and number method was used, whereby the researcher

wrote numbers from 1 to 698 on pieces of paper which were folded and carried in a bag.

Before engaging the respondent, the researcher requested him/her to pick his/her lucky

number. People who randomly picked numbers 1 to 258 (which was the calculated

sample size) were selected to participate in the study.

3.4 Data Collection Methods

3.4.1 Data Collection Instruments

The researcher used three instruments or tools during the data collection process. These

included the questionnaire, interview guide and secondary documents (both published

and unpublished). The questionnaire (see appendix 2) was used during primary data

collection. The questionnaire was preferred because it collects information from many

respondents in a short time frame. All respondents were given the same sets of questions

except in technical circumstances. The questionnaire was composed of only close-ended

questions because they are easy to answer and score.

Both formal and informal interviews with selected Ecobank staffs and customers were

also conducted using the interview guide (appendix 1). Guiding questions were used for

the interviews but during the course, other questions were asked depending on the

responses by the respondents. The interview guide was composed of open-ended

questions and this was intended to give respondents a chance to support their opinions in

a free atmosphere in addition to predetermined choices. Results from interviews helped in

complementing information obtained from the questionnaire.

Documents such as market reports, mobile banking financial statements, newspapers,

magazines, brochures, etc were reviewed to establish the impact of mobile banking

34

project on service delivery. Documentary analysis was used because it enhances the

researcher’s overall understanding of the situations under study, by providing information

which cannot be obtained using other instruments.

3.4.2 Administration of Data Collection Instruments

After the approval of the proposal by Mount Kenya University (MKU), the researcher

sought a letter of introduction to Ecobank Rwanda Limited Main Branch. The researcher

then met the management and sought permission to administer the research instruments

to their staffs and customers. The major research instrument, the questionnaire was given

to technical staffs and experts to get their comments on where changes were needed.

This expanded the validity and consistency of questionnaire after their input. After

making some modifications, it was then re-administered. The researcher then

administered research instruments.

3.4.3 Validity and Reliability

Validity refers to how well a test measures what it is purported to measure (Cozby,

2001). Validity means the success of the scale in measuring what it sets out to measure.

The researcher pre-tested the questionnaire by using research experts at Mount Kenya

University. Those were requested to judge whether questions in the questionnaire were

relevant and able to collect valid data for the study. The lecturers, particularly the

research supervisor were requested to make some recommendations for improvement.

Where suggestions were made, the researcher made changes in line with the supervisor’s

suggestions.

Reliability is the degree to which an assessment tool produces stable and consistent

results (Colin & Julie, 2006). The researcher determined the reliability of the instruments

35

through retest reliability. This measure of reliability was obtained by administering the

questionnaire and interview guide to different groups of people (several times to each

group). The result scores were then correlated and it was found out that there was

stability and consistency of results over time across all sampled groups. The researcher

then proved that the tools were reliable

Besides, the researcher also believes that the tools were reliable since the respondents

were selected from M-banking project implementers and beneficiaries based on their past

experience in m-banking. Therefore, the researcher believes that their responses on which

the findings of this project report were credible and reliable.

3.5 Data Analysis Procedure

Before data was entered into the computer, the researcher coded and cross checked

responses to remove any errors. The data was then entered into the computer using SPSS

v16.0 which produced tables that were backed by frequency and percentage presentation.

The analysis and interpretation of findings was then done based on the SPSS output.

Narrative data from interviews and secondary sources was analyzed where opinions,

ideas, beliefs, attitudes, statements or arguments were classified into themes, categorized

and then discussed within the context of interpretation of findings.

Since this study is based on descriptive case study design, the researcher also used SPSS

version 16.0 to determine correlation between mobile banking and service delivery in

Ecobank using a correlation matrix in which each variable (mobile banking project and

service delivery) were numbered in a table to show correlations or association that exists

between the two. Asterisks were used to indicate correlations that are statistically

significant.

36

Correlational coefficients range from -1.00 to +1.00 with positive numbers used to

identify a positive relationship and negative numbers being used to identify a negative

relationship. A correlation coefficient of 0.00 indicates there is no linear association

between the variables. Thus, the closer a correlation coefficient is to 0.00, the weaker is

the relationship between variables (Creswell, 2008). The following table was used to

guide the researcher in determining the strength of a relationship using Pearson

Correlation Coefficient.

Table 3.2: Correlation Coefficient Guide

Correlation Coefficient Strength of Relationship

.70-1.00 Strong

.30-.69 Moderate

.00-.29 None (.00) to weak

Source: Creswell (2008)

As indicated in Table 4.8, the Pearson correlation test produced a correlation value of

0.892** with P-values of 0.01 which shows that there is a very strong relationship

between mobile banking and service delivery in Ecobank Rwanda Limited.

3.6 Ethical Considerations

While conducting the study, the researcher observed various research ethics such as

honesty, integrity, humility, confidentiality, etc.

The researcher first explained the purpose of the research to respondents and then sought

permission for conducting the study in their banking institution. The researcher then

respected human dignity and respected the respondents’ choice to answer/not answer the

37

questions presented in the questionnaire and interview guide. Confidentiality was then

observed and names of respondents were not published in final project report.

38

CHAPTER FOUR: RESULTS AND DISCUSSION

4.0 Introduction

The study focuses on Mobile banking project implementation and service delivery in

banking institutions in Rwanda using Ecobank as a case study. Therefore, the aim of this

chapter is to present real data from the field and establish real evidence on how mobile

banking affects service delivery in EcoBank.

Data analysis and interpretation helps to present enormous and ambiguous data in a

simple and straightforward form such that it can be easily understood by other readers.

The data is divided into sections based on the objectives of the study. These sections

include response rate, respondents’ relevant background data, the relevance of Mobile

Banking services in Ecobank, factors that influence customer adoption of mobile banking

in Ecobank and the contribution of mobile banking project on service delivery in

Ecobank.

4.1 Response Rate

In order to obtain primary data for presentation of research findings, the researcher

distributed questionnaires to 258 staffs and customers in Ecobank to clearly collect their

views of how M-banking has affected service delivery. However, 91 of the administered

questionnaires were returned blank as respondents reported that they lacked adequate

time to respond.

39

Therefore, out of the sample size of 258 people who were selected, data was collected

from 167 respondents, who constituted a response rate of 65%. This response rate is valid

since it exceeds Altman and Bland’s (2007) recommendation of at least 50%.

Altman and Bland (2007) indicate that obtaining a response rate that exceeds a half of the

selected samples is preferable because the missing data is always inevitable since some

respondents may decide not to respond to some items or the whole questionnaire.

4.2 Respondents’ Background Information

The study questionnaire was designed beginning with relevant background data on

gender, level of education, length of time spent using Ecobank m-banking services. This

section is very important as it helps the researcher to determine respondents’ backgrounds

which have implication on the relevancy, validity and reliability of data provided. Table

4.1 shows the findings.

40

Table 4.1: Respondents’ Background Information

Gender Frequency Percent

Male 87 52

Female 80 48

Total 167 100

Level of Education Frequency Percent

University/Postgraduate 67 40

Secondary 35 21

Tertiary, technical or vocational 65 39

Total 167 100

Time Using M-banking Frequency Percent

0-2 years 25 15

2-4 years 60 36

4-6 years 52 31

6+years 30 18

Total 167 100

Source: Primary Data

As Table 4.1 shows, 52% of the respondents were male while 48% were female. This

indicates that both sexes were equitably represented in the study which is an important

element since Rwandan communities have mainstreamed gender issues in all

development programs.

Concerning education, 40% were university and postgraduates, 39% had completed

tertiary, technical or vocational education while 21% had completed secondary school.

Since education enables people to widen knowledge, it can be argued that the respondents

have better understanding of the contribution of M-banking on service delivery and

therefore the data they provided was valid and relevant for the study.

41

Regarding the length of time spent using Ecobank m-banking, 85% had used Ecobank m-

banking services for a period of 2 or more years. This period is adequate to enable

respondents understand how the service has affected the way they receive financial

services from Ecobank.

4.3 Research Findings

4.3.1 Ecobank Mobile Banking Accounts and Devices Used

The study sought to determine the number of respondents who owned m-banking

accounts and the devices they used to carry out transactions. Table 4.2 shows the

findings.

Table 4.2: Possession of Mobile Banking Accounts and Devices Used

Registered with M-Banking Frequency Percent

Yes 156 93

Neutral 11 7

Total 167 100

M-banking Device Used Frequency Percent

Mobile phone 167 35

ATM 152 32

Ipad 87 18

Others 69 15

Total 475 100

Source: Primary Data

42

As shown in Table 4.2, 93% were registered with mobile banking while 7% remained

neutral. This indicates that majority respondents had experiences on the usage of m-

banking services.

Regarding the devices used, 35% used mobile phones, 32% used automatic teller

machines (ATM), 18% used I pads while 15% used other devices such as visa cards,

computers, etc. This signifies that the mobile phone, ATM and I pads are the mostly used

devices to carry out mobile banking transactions in Ecobank. This is attributed to the fact

that the mobile telephone in particular is on a positive penetration rate in Rwanda. For

example, as of January 2013, active mobile subscribers stood at 5,902,630 (penetration

rate of 55.1%) but this figure increased to 6,619,113 active mobile subscribers

representing a penetration rate of 62.8% as of July 2013 (RURA, 2013b).

Similarly, data from interviews revealed that the mobile telephone was the mostly used

device in transacting operations via mobile banking. One respondent said, “I always use a

smart phone whenever I want to access banking services such as account status, payment

of bills and money transfer because the mobile phone is always with me all the time”.

4.3.2 Usage of Mobile Banking services in Ecobank

The study also sought to investigate the frequency at which Ecobank customers used m-

banking services. Table 4.3 shows the findings.

43

Table 4.3: Usage of Mobile Banking Services in Ecobank

No. M-Banking Service Usage of Service

Always Sometimes Rarely Never

1 Open a bank account - 4(2%) 163 (98%) -

2 Check my account status 165 (99%) 2 (1%) - -

3 Pay bills 166(99%) 1 (1%) - -

4 File taxes and access tax

information

57(34%) - - 110(65%)

5 Electronic check conversion 9(5%) 12(7%) 3(2%) 143(86%)

6 Transfer funds 164(98%) 3(2%) - -

7 Bank statement 162(97%) 5(3%) -

8 Change passwords 150(90%) 2(1%) 4(2%) 11(7%)

9 Purchase m-banking

products/services

161(96%) 7 (4%) - -

10 Request a loan and check status 123(73%) 2(1%) - 42(26%)

11 Stock information 23(14%) 31(19%) 15(9%) 98(59%)

12 Currency exchange 8(5%) 13(8%) 5(3%) 141(84%)

Source: Primary Data

As Table 4.3 shows, respondents always used most mobile banking services available in

Ecobank.

Findings in item 3 show that 99% reported that they always used MB to check their

account status. This indicates that there is strong desire among customers to be constantly

updated about their accounts such as the balance and the transactions conducted.

44

Similarly, according to item 2, 99% said that they always used MB to pay bills. This

indicates that MB is the mostly used form of payment for bills such as water, electricity,

etc because of its convenience.

Thirdly, item 6 show that 98% always used MB to transfer funds. This can be attributed

to the fact that transferring funds from one mobile account to another is efficient and

effective in both time and financial cost.

Furthermore, item 7 show that 97% always used MB to access bank statements. Bank

statements are important in determining the customer’s financial position.

Additionally, 96% reported that they always used MB to purchase m-banking

products/services. These products included cheque books, airtime, standing orders, visa

cards, etc. This indicates that m-banking is dramatically changing bank transactions into

cashless form which encourages security.

Moreover, 90% also always used MB to change passwords. This indicates that m-banking

customers are cautious about the security of their mobile accounts.

It was also found out that 73% always used MB to request and apply for bank loans. This

indicates that customers can have the convenience of seeking loans without having to

travel to meet the bank manager.

However, 98% rarely used MB for account opening. This is attributed to the fact that

most customers open accounts once and find no need of opening other bank accounts in

the same bank.

45

Furthermore, 86% never used mobile banking service in electronic check conversion.

This can be attributed to the fact that the use of electronic checks as a mode of payment is

not common.

In item 12, it was found out that 84% also never used mobile banking in currency

exchange. This is attributed to the fact that majority customers conduct their transactions

in the local currency (Rwandan Francs). This explains limited usage of currency

exchange in mobile banking.

Additionally, 65% never used m-banking in filing taxes and accessing tax information.

This can be attributed to the fact that taxes are only paid by people who are engaged in

profit-making activities while others use third parties to do the job of tax filing on their

behalf.

Lastly, the majority (59%) also never used mobile banking to access stock information.

This may indicate that most of the respondents do not deal in shares trading on the stock

exchange.

In a related development, data from interviews produced similar results. Most

respondents said that they always used mobile banking services such as in checking

account status, payment of bills (water, electricity, internet, airtime, etc), transfer of

funds, accessing bank statement, changing account password and purchasing bank

products such as cheque books, visa cards, etc. One respondent said, “I always use m-

banking services because they help me to easily carry out transactions without having to

go and queue at the bank”.

46

Similarly, most respondents said they rarely used mobile banking service in opening bank

accounts. One respondent said, “I don’t really need to always open an account with

Ecobank. I only have one account with Ecobank, I opened that account once and it helps

me do all the transactions I do with the bank. I don’t need to open any other account with

the same bank”.

Majority also said that they never used m-banking in tax-related assignments because

they were not engaged in taxable activities. One respondents said, “I don’t do tax filing

because I am not engaged in any profit making business. So there is no need of using this

mobile banking service”. It was also revealed that majority did not use m-banking in

electronic cheque conversion because the usage of such cheques is rare. Most

respondents even said that they did not understand what an electronic cheque was or how

it is used.

4.3.3 Factors that influence customer adoption of mobile banking in Ecobank

The study also investigated the factors that influence customers’ adoption of mobile

banking in Ecobank. The factors were based on Technology Acceptance Model (TAM).

According to Davies (1989), TAM suggests that people will adopt a form of technology

based on some drivers which include perceived usefulness of the technology, perceived

ease of use and perceived risk or security of the technology.

Perceived Usefulness of Mobile Banking

Perceived usefulness is the extent to which a customer believes that using a particular

technology would enhance his or her job performance. Table 4.4 shows the findings in

regard to perceived usefulness of mobile banking.

47

Table 4.4: Perceived Usefulness

No. Perceived Usefulness Strongly

Agree

Agree Disagree Strongly

Disagree

1 I can complete my banking tasks more

easily with M-banking

118(71%) 18(11%) 20(12%) 11(7%)

2 MB allows me to transact business all

the time

167 (100%) - - -

3 MB increases my efficiency in utilizing

banking services

161(97%) 3(2%) 2(1%) -

4 MB allows me to know account status

faster

145(87%) 10(6%) 3(2%) 9(5%)

Source: Primary Data, May 2016

As Table 4.4 shows, in item 2, all respondents strongly agreed that they adopted MB

because it allows them to transact business all the time. This indicates that service

reliability is highly valued by customers.

Secondly, item 3 shows that 97% also strongly agreed that they were influenced by the

efficiency of mobile banking platform in utilizing banking services. This can be

attributed to the reduction in transactional costs brought by mobile banking.

Furthermore, 87% strongly agreed that MB allowed them to know their accounts’ status

faster. This can be attributed to the fact that use of mobile banking does not require the

customer to line up in the queue to receive services.

48

Lastly, in item 1, 71% revealed that they adopted MB platform because it allowed them

to complete banking tasks more easily. This can be attributed to the fact that people

always move with their mobile devices which allows them to easily access banking

services.

Data from interviews was also analyzed and it was consistent with the findings of the

questionnaire. Some interviewees said that they adopted m-banking because of its

simplicity in allowing access to financial services. One respondent said, “even if I am in a

foreign country, I can easily access financial services in Rwanda courtesy of mobile

banking platform”.

It was also revealed that customers adopted MB because of its fulltime reliability unlike

the brick and mortar banking platform. One respondent said, “I was so impressed with

mobile banking when Ecobank staffs told me that it operates all the time even at night.

Since there are times when I need financial services when the bank has already closed, I

found mobile banking platform very relevant to my financial needs”.

Perceived Ease of Using Mobile Banking

Perceived ease-of-use is the extent to which a bank customer believes that using mobile

banking technology would be free from effort. Table 4.5 shows the findings.

49

Table 4.5: Perceived Ease of Use

No. Perceived Ease of Use Strongly

Agree

Agree Disagree Strongly

Disagree

1 I can easily learn to use m-banking 139(83%) 12(7%) 11(7%) 5(3%)

2 Instructions on the m-banking system

are clear and understandable

156(93%) 5(3%) 4(2%) 2(1%)

3 There are co-operative staffs to teach

me how to use M-Banking

103(62%) 18(11%) 21(13%)

25(15%)

Source: Primary Data

As shown by Table 4.5, 93% strongly agreed that they were influenced to adopt m-

banking because instructions on the m-banking system are clear and understandable. This

indicates that customers can easily follow the MB instructions to carry out financial

transactions.

Secondly, item 1 shows that 83% were attracted to adopt m-banking because they could

easily learn to use the financial platform. This indicates that the ability to learn a

technology will influence users to easily adopt it.

Lastly, item 3 shows that 62% of the respondents also strongly agreed that they were

attracted to use MB because of the presence of co-operative staffs in Ecobank to teach

them how to use M-Banking. This indicates that customers adopt a service not because of

its attractiveness but also the availability of help in the use of such services.

Findings from interviews also produced similar results. Majority interviewees said that

mobile banking was easy to learn and use, had clear messages and that the staffs of

Ecobank were co-operative in helping customers understand how to conduct transactions

50

online and secure their accounts. One respondents said, “when am using m-banking, I

feel happy because it brings me various languages from which to choose from”.

Similarly, another interviewee said, “Ecobank staffs are very helpful to me whenever I

get a challenge in carrying out services via mobile money. They help and guide me how

to solve problems. Even at first, I was hesitant to operate a mobile banking account but

the staffs motivated me to operate it by telling me about the benefits”.

Form the above findings, it is very clear that ease of use is one of the important factors

that influence customers to adopt mobile banking platform.

Perceived Risk or Security

Perceived ease of risk or security is the degree to which customers feel that their accounts

will be vulnerable or free from financial risks or loss. The researcher investigated this

factor to determine how secure mobile banking customers felt they were. Table 4.6 shows

the findings.

51

Table 4.6: Perceived Risk or Security

No. Perceived Risk or Security Strongly

Agree

Agree Disagree Strongly

Disagree

1 I feel that MB will allow unauthorized

person to access my private information

149(89%) 3(2%) 6(4%) 9(5%)

2 MB is prone to signal failure and network

congestion

163(98%) 4(2%) - -

3 I feel that am not legally protected from

cyberspace fraud

166(99%) 1(1%) - -

4 The security policies of the bank give me a

feeling that money via MB will be safe

9(5%) 18(11%) 138(83%) 2(1%)

Source: Primary Data

With regard to perceived risk or security of the mobile banking platform, item 3 in Table

4.6 shows that 99% felt that they were not legally protected from cyberspace fraud. This

can be attributed to lack of awareness of the available laws that that protect e-commerce

and mobile banking.

Secondly, in item 2, 98% also strongly agreed that they perceived MB to be prone to

signal failure and network congestion. This was attributed to technical failure and poor

internet connection that may disrupt mobile banking transactions.

Furthermore, item 1 shows that 89% also felt that m-banking will allow unauthorized

person to access their private information. This was attributed to the increase in

technological know-how that has promoted fraud through account hacking.

52

Lastly, 83% also said that the security policies of the bank gave them feelings that money

transactions via MB were not safe. This can be attributed to the bank’s failure to assure

customers that they have anti-cyber crime policies which help to ensure security of

customers’ finances.

However, findings from interviews produced mixed results. Some interviews revealed

that they trusted that the Rwandan law was comprehensive and strict against cybercrimes

which gave them assurance that there were no chances of technological fraud in mobile

banking.

On the other hand other interviewees said that they were not sure of security. There was

general lack of understanding of Ecobank’s policies in regard to customer protection

from fraudulent practices via mobile banking.

Furthermore, it was also revealed by most interviewees trusted that unauthorized person

cannot access their financial secret information because the bank provides options for

password security.

4.3.4 Contribution of mobile banking project on service delivery

The study also sought to establish the contribution of mobile banking project on service

delivery in Ecobank. This was aimed at determining how MB influences customer

experiences. Table 4.7 shows the findings.

53

Table 4.7: Mobile Banking Project and Service Delivery

No. Importance

Very

Imp

orta

nt

Imp

orta

nt

Average

Not

Imp

orta

nt

1 It is cost saving/cost effective 162(97%) 2(1%) - 3 (2%)

2 Time saving (no need to go to bank or ATM) 166(99%) 1(1%) - -

3 Ease of access (can make transaction any

time)

167 (100%) - - -

4 Physical security 164(98%) - 3(2%) -

5 Customer comforts 159(95%) 4(2%) 3(2%) 1(1%)

6 Speed of service delivery 167(100%) - - -

Source: Primary Data

According to item 3 in the Table 4.7, the study finds that MB is very important to all the

surveyed customers in easing financial access (100%). This was attributed to the fact that

the customer can make transaction any time which increases convenience.

Similarly, item 6 indicates that 100% also rated MB as very important in speeding service

delivery. This is because electronic transactions that are executed in virtual space are

instantly completed.

Additionally, item 2 also shows that 99% of respondents rated MB’s role in service

delivery as time saving (no need to go to bank or ATM). This was attributed to the time

that the customer saves by carrying out transactions without having to abandon other

duties since it can be executed by the customer on the move.

54

In item 4 98% rated MB as very important in ensuring physical security. This was

attributed to the fact that MB does not require the customer to move with physical cash.

Furthermore, in item 1, 97% rated mobile banking as very important in saving costs. This

was attributed to the lower rates and lower transaction fees charged in addition to

transportation savings that would otherwise be spent going to the bank.

Item 5 also shows that MB platform was rated as very important in ensuring customer

comfort (95%). This was attributed to the fact that financial transactions can be executed

via the platform at any time without any need for the customer to move.

Data from interviewees was also analyzed to determine how mobile banking influences

service delivery and the analysis produced consistent results. It was revealed that mobile

banking platform speeds up service delivery to customers. One respondent described

mobile banking speed by saying, “conducting financial transactions using mobile banking

is very quick and takes the speed of light. For example, whenever am in the US, I easily

make transactions in Rwanda using mobile money and I get instant results and feedback”.

It was also revealed that mobile banking saves time for customers. For example, one

interview said, “conducting business by using mobile money does not require me to move

from office. I just use a click of mouth or my smart phone and the transaction gets

executed. This saves me time to engage in strategic planning for the business. It also

saves me the costs of using agents to do transactions on my behalf which sometimes has

been risky as some agents are financially untrustworthy”.

55

Form the above analysis, it can be concluded that mobile banking platform is an effective

element in the banking institutions that helps customers to receive quick services at lower

costs, in a short time and being secured from theft that usually result from carrying large

sums of physical cash.

4.3.5 Pearson Correlation

Having established the contribution of mobile banking on service delivery in Ecobank,

the researcher also ran a Pearson Correlation to determine the level of significance of the

relationship that exists between mobile banking and service delivery. Table 4.8 shows the

findings.

Table 4.8: Pearson Correlation for Mobile Banking and Service Delivery in Ecobank

Mobile Banking Service Delivery

Mobile Banking Pearson Correlation 1 .892**

Sig. (2-tailed) . .000

N 167 167

Service Delivery Pearson Correlation .892** 1

Sig. (2-tailed) .000 .

N 167 167

Source: Primary Data **Correlation is significant at the 0.01 level (2-tailed).

The study also conducted a statistical analysis of Pearson correlation which showed that

there was a strong relationship between mobile banking and service delivery in Ecobank.

The strength of the relationship is shown by a positive

56

Pearson correlation value (0.892**) with the level of significance (P=0.01). The

significance (P=0.01) shows that the relationship between mobile banking and service

delivery is very significant.

57

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

The study was conducted the Mobile banking project implementation and service

delivery in banking institutions in Rwanda using a case study of Ecobank. Its objectives

were to establish the relevance of Mobile Banking services in Ecobank, factors that

influence customer adoption of mobile banking in Ecobank and the contribution of

mobile banking project on service delivery in Ecobank. In this chapter, the researcher

presents the summary of findings, conclusion, recommendations and suggestions for

further research. The aim of this chapter is to present the findings in a brief format for

easy interpretation by other readers.

5.1 Summary of Findings

5.1.1 Usage of Mobile Banking services in Ecobank

Ninety three percent (93%) were registered with Ecobank mobile banking and were also

using the platform to transact business.

The mobile phone and automatic teller machine were the frequently used devices to carry

out mobile banking with 35% and 32% of the respondents respectively.

The most frequently used mobile banking services were payment of bills (99%), checking

account status (99%), funds transfer (98%), accessing bank statement (97%), purchasing

Bank products (96%), changing password (90%) and requesting a loan (93%).

58

5.1.2 Factors that influence customer adoption of mobile banking in Ecobank

Regarding perceived usefulness as a factor that influence customer adoption of mobile

Banking most customers were attracted by its reliability (100%), efficiency (97%) and

speed (87%).

In regard to perceived ease of use, 93% were attracted by clear instructional materials,

followed by ease to learn (83%) and presence of co-operative staffs (62%).

However, in terms of perceived risk and security, 99% felt not legally protected, 98% felt

they were vulnerable to MB signal failure, 89% felt that fraudsters can access their

accounts while 83% felt that Ecobank security policies did not guarantee safety.

5.1.2 Contribution of mobile banking project on service delivery in Ecobank

Pertaining to its contribution in service delivery, the study finds that MB is quick in

providing services (100%), easy to access (100%), saves time (99%), ensures physical

safety (98%), saves money (97%) and provides customer comfort (95%).

5.2 Conclusion

The study covers the contributions of mobile banking on service delivery in banking

Institutions in Rwanda using a case study of Ecobank Rwanda Limited, Main Branch in

Nyarugenge district.

The study covers and has fulfilled three objectives which include the usage frequency of

MB services, factors favoring the adoption of MB and contribution of MB in service

delivery.

59

It is recognized that most Ecobank customers frequently use MB services in the payment

of bills, checking account status, transferring funds, requesting bank statement,

purchasing bank products and changing password.

Ecobank customers have been influenced to use MB platform because of its usefulness

(cost reduction, speed, reliability, etc) as well as ease of use where customers can carry

out transactions by following clear instructions.

Mobile banking platform is important in promoting service delivery in Ecobank by

encouraging quick delivery of services, reducing transaction costs, saving time, physical

security and ensuring customers’ comfort.

However, users have some negative perceptions on MB platform, for example, they fear

technological fraud through access of their secret passwords, inadequate legal protection,

technical failure and loopholes within the bank’s policy that may be exploited by

Cybercriminals to steal their money from mobile banking accounts.

There is need to sensitize mobile banking customers in Ecobank about the security

measures available to protect their accounts from unauthorized access, and continuously

educate customers about new ways of developing tight security for their accounts.

5.3 Recommendations

Customers should be instructed on how to design tight security for their accounts by

opening passwords that are complicated for hackers to copy and defraud mobile banking

customers. This is because most customers feel that m-banking will allow unauthorized

person to access their private information.

60

Ecobank should ensure that its mobile banking platform is fully connected all the time

and free from technical faults. Customers should also be sensitized about this security

such that they become sure that they will access services anytime. This will remove their

feelings of doubt based on the fact that MB is prone to signal failure and network

congestion.

Ecobank management should familiarize themselves with the available cyberspace laws

such that they sensitize customers who have negative perception in regard to the

inadequacy of the available laws to protect their MB accounts.

This is because customer indicated that they felt they were not legally protected from

cyberspace fraud yet there are available laws that protect online businesses.

Ecobank should sensitize customers about the bank’s policies and how such policies

prevent cyberspace fraud. This is because most respondents said that security policies of

the bank gave them feelings that money transactions they conducted via MB were not

safe.

Ecobank should sensitize its customers about what an electronic cheque is, how to use it

and its benefits to the user. This is because most respondents seemed not to understand

what an electronic cheque was.

Electronic banking is not the only factor that improves service delivery in banking

institutions. However due to limited time, other factors were not covered by the study.

Therefore, future researchers should be encouraged to carry out studies on the factors that

help to improve service delivery in banking institutions.

61

5.4 Area for further research

Electronic banking is not the only factor that improves service delivery in banking

institutions. However due to limited time, other factors were not covered by the study.

Therefore, future researchers should be encouraged to carry out studies on the factors that

help to improve service delivery in banking institutions.

62

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APPENDIX 1: LETTER OF INTRODUCTION

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APPENDIX 2: LETTER OF ACCEPTANCE

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APPENDIX 3: INTERVIEW GUIDE FOR BANK STAFFS

Dear Respondent

I am a student of Mount Kenya University, pursuing a Masters Degree in Business

Administration (Project Planning and Management). I am currently conducting a study on

Mobile banking project implementation and service delivery in banking institutions in

Rwanda using Ecobank as a case study. The study is solely for academic purposes and

your m-banking project has been identified as one of the most effective due to your

international experience. You are hereby requested to please assist in completing the

attached questionnaire.

Section 1: Respondents’ background information

Request respondents to reveal their age, gender, level of education and length of time

working with Ecobank

Questions on Ecobank Mobile Banking

1. Explain the trend of mobile money usage (number/volume of transactions and value)

between 2010 and 2015

2. How do you describe the usage of mobile banking services by Ecobank customers?

(Use increasing, decreasing or constant)

3. The explain the devices that are used by your customers to carry out m-banking

transactions

……………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

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4. Explain the financial services that are supported by your m-banking platform

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

5. What factors that influence customer adoption of mobile banking services in Ecobank?

………………………………………………………………………………………………

………………………………………………………………………………………………

6. How has your mobile banking platform contributed to improvement in service

delivery?

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

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APPENDIX 4: QUESTIONNAIRE FOR BANK CUSTOMERS

Section 1: Respondents’ background information

1. Age (Tick one) 18-24 25-34 35-44 45-54 55-and above

2. Gender Male Female

3. Level of education attained (Tick one) University Secondary Tertiary

Primary

4. How long have you used Ecobank mobile banking services? 0-2 years 2-4 years

4-6 years 6+years

Questions on Ecobank Mobile Banking

1. Are you registered on mobile banking? Yes No

2. Which of the following devices do you mostly use to execute m-banking transactions?

Mobile phone ATM Debit Card Others (specify)

3. Mobile Banking services used by Ecobank

For each of the bank services in the table, select the M-banking service(s) that are

relevant to your banking needs in Ecobank and indicate how often you use that mobile

banking service (For each service you are required to select ONLY ONE code, e.g.

4=Always, 3=Sometimes, 2=Rarely, 1=Never).

4 3 2 1

Open a bank account

Check my account status

Pay bills

File taxes and access tax documents

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Electronic check conversion

Transfer funds

Bank statement

Change passwords

Purchase bank products

Request a credit/debit card or cheque book

Request a loan and check status

Stock information

Tax documents and information/tax payment

Currency exchange

4. Factors that influence customer adoption of mobile banking in Ecobank

For each of the statements in the table, tick below the codes of your choice in regard to

factors influencing customer adoption of mobile banking (For each factor you are

required to select ONLY ONE code, e.g. 4=Strongly Agree, 3=Agree, 2=Disagree,

1=Strongly Disagree)

Factors for customer adoption of m-banking 4 3 2 1

Perceived usefulness

I can complete my banking tasks more easily with M-banking

MB allows me to transact business 24hours

MB increases my effectiveness and efficiency in utilizing banking

services

MB allows me to know account status faster

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Perceived ease of use

I can easily learn to use m-banking

Instructions on the m-banking system are clear and understandable

The m-banking website is user-friendly

The m-banking system is easy to use

Perceived risk and security

I feel that m-banking will allow unauthorized person to access my

private information

MB is prone to signal failure and network congestion

I feel that am not legally protected from cyberspace fraud

The security policies of the bank give me a feeling that money

transactions via MB will be safe

5. Contribution of mobile banking project on service delivery

How would you rate the importance of Mobile Banking towards service delivery? (Use

codes where 4=Very important 3=Important 2=Average 1=Not important at all).

4 3 2 1

Cost saving (Lower rates, transaction fees)

Time saving (no need to go to bank or ATM)

Ease of access (can make transaction any time)

Physical security (no need to go out with Cash)

Customer comforts

Speed of service delivery