Thai Nguyen University
Socialist Republic of Vietnam Southern Luzon State University
Republic of the Philippines FACTORS AFFECTING THE USE OF MOBILE BANKING
SERVICES IN HANOI, VIETNAM A RESEARCH PROPOSAL PRESENTED
TO THE FACULTY OF GRADUATE SCHOOL
SOUTHERN LUZON STATE UNIVERSITY, PHILIPPINES
THAI NGUYEN UNIVERSITY, S.R. VIETNAM

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR IN BUSINESS ADMINISTRATION Name: VU MANH CUONG
English Name: CAMERON Adviser
Dr. Nelly Mendoza
(Southern Luzon State University)

The results of analysis indicated that in six factors studied, there are five
factors actually affect the use of mobile banking services in Hanoi area including
perceived usefulness, perceived easy of use, perceived risk of social and safety,
perceived risk of performance and finance, and trust of customers with statistically
significant at 1% level. The remaining factor "perceived cost" had no significant
relationship with the use of mobile banking services.
The coefficient R
2
adjusted = 0.331 showed that the explanation level of the
impact of independent variables on the dependent variable reached 33.1%, the
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iii
statistical value F = 71.832 was significant level at 1% (Sig. = .000), the multiple
regression assumptions were satisfied, the model was suitable to the study.
The main findings of the research included:
(1) There is not enough evident to conclude the difference of the use of mobile
banking services between central and suburban living areas, between male and
female, between level of education, between income and between occupation for the
customers in Hanoi.
(2) Most consumers in Hanoi use the mobile banking services to check bank
account and transfer money. In particular, the purpose of checking account is largest
up to 77.5%. The other purposes such as pay for monthly bills, pay for shopping,
money savings are modest. The rate of money savings purpose is only 34.6%.
(3) The major customer use the mobile banking services are people living in
urban areas, where people have a high awareness levels, accounted 71%. Female use
mobile banking services is higher than male, the rate of female accounted 52%.
Young people below the age of 35 represent a high proportion (76%) on the use of
mobile banking services.
(4) The most consumers use mobile banking services is high education. The

2.3 Mobile Financial Services 13!
2.4 Mobile Commerce Services 15!
2.5 Mobile banking technology 16!
2.6 Mobile Banking in Vietnam 20!
2.7 Consumer Behavior 22!
2.8 Expectancy-Value Theory 25!
2.9 The Theory of Reasoned Action 26!
2.10 The Theory of Planned Behavior 27!
2.11 Technology Acceptance Model 29!
2.12 The conceptual framework 36!
Chapter III.! RESEARCH METHODOLOGY 42!
3.1 Research design 42!
3.1.1 Pilot study 43!
3.1.2 Variable measurement 43!
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v
3.2 Determination of Sample size 46!
3.3 Sampling design and techniques 47!
3.4 Research Instrument 47!
3.5 Data gathering procedure 48!
3.5 Data processing method 49!
3.6 Statistical treatment 49!
3.6.1 Reliability Analysis of Scale 49!
3.6.2 Exploratory Factors Analysis 49!
3.6.3 Regression analysis 50!
3.6.4 Testing the hypothesis 50!
3.7 Evaluation of the reliability of scales 51!
Chapter IV.! RESULTS AND DISCUSSION 55!
4.1 Profile of the respondents 55!

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LIST OF TABLES

Table II.1 List of mobile banking services in Vietnam 21!
Table III.1 The measure indicators for customer behavior 44!
Table III.2 Sampling allocation 47!
Table III.3 Reliability analysis of scale 52!
Table IV.1 Profile of respondents 56!
Table IV.2 Time to the nearest bank branch 57!
Table IV.3 The use of mobile banking services 57!
Table IV.4 Purpose of use mobile banking services 58!
Table IV.5 Purpose of use mobile banking services by gender 59!
Table IV.6 Purpose of use mobile banking services by region 59!
Table IV.7 Purpose of use mobile banking services by age 59!
Table IV.8 Purpose of use mobile banking services by education level 60!
Table IV.9 Purpose of use mobile banking services by occupation 61!
Table IV.10 Purpose of use mobile banking services by income 61!
Table IV.11 Analysis of difference by living area 62!
Table IV.12 Analysis of difference by gender 63!
Table IV.13 Analysis of difference by age 64!
Table IV.14 Analysis of difference by education 65!
Table IV.15 Analysis of difference by occupation 66!
Table IV.16 Analysis of difference by income 66!
Table IV.17 Exploratory factor analysis results. 68!
Table IV.18 Extraction component result: TRUOVER 70!
Table IV.19 Components derived from results of EFA 70!
Table IV.20 Correlations matrix 73!

telecommunications, finance and banking. Online transactions, payment on Internet
as well as mobile network, etc. have become the development and competition trends
of integrated service providers in Vietnam.
Development of banking services based on mobile phone technology has
become the objective and inevitable trend during the international economic
integration more and more deeper in Vietnam. The development of mobile banking
services has brought significant benefits to customers as a convenient, fast and
accurate of the transaction. At the same time it also opens up new development
opportunities for the telecommunications providers, application and software
developers, e-commerce merchants, bankers, etc. in Vietnam.
Mobile banking services are tools that permits user to carry out transactions
with its bank via cell phone. The concept of this service had been raised since late 20
th

Century. Traditional payment methods such as bank transfer, credit card, debit card,
bank notes, etc. have been helping the payment-via-bank being convenience and
popular in several developed countries that buyers will not need being face-to-face
with seller, and cash becomes useless. Everything has its pros and cons. The
traditional payment methods have certain limitations. For examples, bank transfer and
notes transactions must be performed within work time and places; credit/debit cards
depend on sellers and the card itself.
From early 21
st
century, Internet banking has been emerging and serving
consumers with certain conveniences by mean of payment. Buyers can make payment
from anywhere and at anytime. However, some online security limitations lead to the
imposture of banking cards to thieve money in several countries. Consequently,
consumers have been hesitated to use Internet payment. In comparison with stated
payment methods, Mobile banking has been less risky by transaction process while
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providers (MIC, 2013). It should be a great potential market for the development the
high-tech financial services products, but mobile banking just stop at checking bank
account, paying for telephone fee (top-up) in a small set of customers, pay for
monthly bills (such as electric invoice) in restrict area, pay for purchase in simple
business (e.g. air-tickets). It is really not popular. The question is what issues or
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factors is affecting positive and what is negative to the use of mobile banking services
in Vietnam. Grasp deeply this problem can alter the behavior of consumers towards a
cashless society. At the same time, it is also a basic promoting robustly the
development of mobile banking services in Vietnam.
1.1 Background of the study
The study of consumer behavior is an important part of the research needs of
customers. To succeed in any business at all the fields, especially in fast-growing and
dynamic markets as today's, entrepreneurs, marketers need to know clearly about
customers such as the needs, convenience, the difficulty, suitable time, etc. from the
consumers' side. They need to understand absolutely the factors affecting to
consumers' decisions and how customer make a buying decisions.
Numerous theoretical models have been launched and continuous
improvement to serve the behavioral research, human behavior in general and then
applied to the study and interpretation of consumer behavior. Most notably, Theory of
Reasoned Action Models introduced Ajzen & Fishbein (1975), often referred to TRA
model, and then extended into TPB model (Ajzen, 1991). Davis (1989) has applied
this theory to build the Technology Acceptance Model (TAM), and then Venkatesh
& Davis (2000) has built Technology Acceptance Model 2 (TAM2).
Thousands of studies have applied TAM model to explain the behavior of
using integrated technology services on many different areas in many countries
around the world. In the technology service sector in general and mobile banking
services in particular, the choice and use of customer is also comply the basic

- Propose solutions to improve mobile banking services to increase the number
of users in Hanoi, Vietnam.
1.3 Hypothesis
Mobile banking services is still relatively new to many Vietnamese.
Awareness of the benefits that services bring them is not yet complete. The overall
objective of the thesis is to analyze the consumers' behavior in the use of mobile
banking services. Based on the theory of behavior, the theory of technology
acceptance model, related theories, and the results of previous studies, this research
focuses on some important aspects of the services for the consumers in Hanoi region.
With the research objectives, the hypothesis are stated as following:
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H1: The use of mobile banking services are affected by the geographical location
and demographic characteristics such as age, gender, education, area,
occupation and income.
H2. Perceived usefulness of mobile banking services has a positive impact on the
use of the services
H3: Perceived of ease of use of mobile banking services has a positive impact to
the use of the services
H4: Perceived costs to use mobile banking services have a negative impact to use
the service
H5: The trust of customers on mobile banking services has a positive impact to the
use of the services
H6: Perceived risks of customers for mobile banking services have a negative
impact to the use of the services
1.4 Significance of the study
Regarding scientific
First, the thesis systemized the basis of the theory of consumer behavior
generally and Theory of Technology Acceptance Model (TAM) in particular.

The measurement of factors affecting the use of mobile banking services is
mainly based on the model approach technology acceptance and theory of consumer
behavior. In addition, the time for survey is limited, the surveyed area is just the
central districts, some customers may not understand clearly the various functions of
mobile banking services. Hence the explanatory of variables in the model of the study
is not so high. Moreover, the research recommendations were suggested by the
approach through the quantitative analysis. In fact, there are many other methods and
more convincing approaches that may have a better suggestions.
In general, quantitative approach is necessary and useful, but it still is not
enough to generalize the whole picture of mobile banking services in whole Vietnam.
Therefore, a more long-term study will bring the better results and suggest more
details of recommendations.
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1.6 Definition of terms
The terms defined in this section is intended only to explain clearly the
meaning that is used in this document.
• Mobile banking refer to the systems that allows customers of a financial
organization to conduct the banking requests such as money transfer, account
checking, money savings, etc. by mobile device through mobile network instead
perform at transaction office or branch of bank.
• Mobile banking service refer to the type of services provide by cooperation
between bank, operators, providers and merchants that allows customers have the
bank account and mobile number to process the bank services such as managing
finance, paying for goods or services either at the point of sale or remotely,
transferring money, creating an investment, saving money, etc. at any time and
any where with mobile handsets or personal digital devices. In some context,
mobile banking service is also called "Mobile banking".
• SMS banking refer to the service or type of access the core banking system using

operators. Thence, they have capacity to provide mobile banking services to any
consumer with the same policy. Thus, service provider have to built the service
system, integrate with core banking system of all the bank to process the bank
requests, and connect with all the operators to give capacities use banking services
for any mobile subscriber via mobile networks.

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Chapter II. REVIEW OF RELATED LITERATURE
AND STUDIES

In this chapter, authors reviews the related literature and studies on banking in
Vietnam with updated data from Vietnam government (State Bank of Vietnam);
Mobile banking in Asia and some other countries, that also present the potential
market of mobile baking services; Mobile financial services has many point are the
same with mobile banking that is specify in some previous research and definition of
bankers, that are review in the next paragraphs. The theory of Consumer Behavior,
Theory of Reasoned Action – TRA, Theory of Planned Behavior – TPB, Expectancy-
Value Theories, the technology acceptance model (TAM) (Davis, 1989), related
theories and definition of Kotler & Armstrong on the factors affecting the consumer
behavior are reviewed. The theoretical and conceptual framework of the research is
presented in the last section.
2.1 Banking in Vietnam
According to State Bank of Vietnam (SBV), by the end of 2012 in Vietnam,
there are total 44 banks (excluding 1 Vietnam Development Bank, 1 Vietnam Bank
for Social Policies, Joint"venture Bank, Branches of Foreign Bank, Rep. Office of
Foreign Banks), including 5 Stated owned Banks (Agribank, BIDV, Vietinbank,
Vietcombank, and Mekong Housing Bank); 34 Commercial Banks (such as: ACB,
Eximbank, Techcombank, MBBank, Maritime, etc.); and 5 wholly Foreign-owned

the payment gateway and e-commerce portal (Nguyen Tu Anh, 2012).
2.2 Mobile Banking Services
The rapid growing of mobile service in Vietnam and Asia has created
opportunities for new and innovative mobile services. Some of the most promising is
Mobile finance service including mobile banking, mobile payment and mobile
commerce services. Simply, mobile banking allow end-users to get information from
its bank via SMS such as balances, transaction history, promotion information,
confirmation for direct payment (Niina M, Matti R, Virpi K.T, 2004). They also said
that mobile payments must become faster, easier, and more convenient to use when
3G mobile network and application and devices mature. Before that Niina, Varshney
and et. (2002) showed mobile payments are expected to become one of the most
important applications in m-commerce. In 2003 Jarvenpaa & et finding the other
aspect of mobile banking services are valued by users because of the inherent time
and place independence, and the overall effort-saving qualities.
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in other words, mobile banking service is the way to deliver the banking and
financial services via mobile equipment including cell phones, smart phones, and
personal digital assistants (Ann Ho, 2010).
Compare with traditional money transfer methods via Banks, the cost is saved
average 19% when using the mobile banking service for the same purpose (McKay,
Claudia and Mark Pickens, 2010). Consumers no need to transport to bank office in
the working time and wait to process paper. User can make the money transfer action
any when and any time.
Mobile banking is a subset of electronic banking which underlies not only the
determinants of the banking business but also the special conditions of mobile
commerce (Pousttchi K., 2004) In the broader sense, mobile banking as that type of
execution of financial services in the course of which the customer uses mobile
communication techniques in conjunction with mobile devices.

globally by 2013.
Mobile banking (Internet banking using mobile devices, also known as M-
Banking, SMS Banking etc.) can perform account balances and transaction history
inquiries, funds transfers, and bill payments via mobile devices (Laukkanen, 2007;
Turban, King, Viehland, & Lee, 2006).
Identifying and understanding the factors influencing attitude and behavioral
intention toward continuing to use the mobile banking is one of the fundamental
requisites for development of mobile banking services (Hsiu-Fen Lin, 2011). Mobile
banking was provided by three major mobile service providers in Taiwan. Chunghwa
Telecom, Far EasTone and Taiwan Mobile co-operated to 20 banks (Taiwan
Telecommunications Report, 2009). By January 2009, Taiwan had 1.55 million
mobile commerce (m-commerce) customers (approximately 7.77% of the total
population) (iThome, 2009). However, according to a report of MIC (Market
Intelligence Center, Taiwan’s leading IT industry analysis and consulting service
provider) states that less than 2.3% of banking transactions in Taiwan were conducted
through mobile devices (MIC, 2009). Moreover, mobile banking remains in its
infancy and international adoption rates are low (Datamonitor, 2009).
Mobile Payments has big opportunity in the future, as Juniper analysis report
Mobile Payments will grow from $170B in 2010 to almost $630B in 2014, Number of
mobile payment users will grow from 351 million to 1.06 billion, Mobile payment
transactions will grow from 37.4 billion to 1.13 trillion (Jorge Campos, 2011).
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Mobile Payments is transforming consumer behavior globally, Increasing
electronic transactions and network reach, Driving growth and preference for Bank
Cards (Vicky Bindra, 2011).
2.3 Mobile Financial Services
Mobile Financial Services where telecom and banking converge, using the
mobile device for formal financial services, Immediate, simple and convenient access

cash (still beware of fraud); reduce need to hold cash for change.
To Economy: new revenue stream from transaction fees; Monetize the float –
make more money off money that is kept in the ecosystem; Reduced customer churn;
Reduced airtime distribution costs; New customer acquisition; Increased voice and
SMS market share.
According to Niina & et, the key players of mobile financial services includes
banks and other financial organizations, the telecom operators, retailers, equipment
manufacturers (hand-set devices), and software vendors that enabling the services are
incremental in building the infrastructure progress. Financial institutions and
operators can cooperate and provide mobile payments together, dividing the
responsibilities according to their core competencies. Mobile operators aggregate the
payment data in mobile networks and banks are responsible for the actual financial
transactions. Operators act alone and develop solutions such as separate accounts or
their own clearinghouse or credit institution where banks are not involved.
This trend is most plausible for m-commerce micropayments and is possible if
different players cannot find a way to cooperate. Banks develop payment solutions
where operators are not involved. Bank based solutions may emerge especially in
POS and Internet payments and when the mobile network is used as a data carrier
only. The roles and tasks are necessarily fixed, but subject to change and evolution.
Currently the only successful and widely adopted payment applications have been
based on the operator’s billing and service infrastructure, but the emerging macro
payment applications could be the domain of the incumbents banks and credit card
companies.
The application developers choose which services to offer to the customers,
but the final decision to adopt depend on the end customer who initiates transactions
and pays for the services (Niina M. & et., 2004).
According to research of Hsiu-Fen Lin (2011) the attributes: perceived ease of
use, perceived compatibility, perceived competence, Trust in mobile banking,
Attitude and behavioral intention have the positive effects on attitude toward
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Shin (2010), defined mobile banking as an innovative method for accessing banking
services via a channel whereby the customer interacts with a bank using a mobile
device (e.g. mobile phone or personal digital assistant (PDA).
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There are challenges associated with m-commerce, and specifically mobile
banking. Mobile devices with a small screen size, limited screen resolution and
uncooperative keypad may make it difficult for the customer to use mobile banking
(Kim et al., 2009). Mobile banking is also vulnerable to information and transaction
eavesdropping risk, just like other e-commerce applications such as Internet banking
(Siau et al., 2003).
2.5 Mobile banking technology
Currently, mobile banking is implemented through three different technology
solutions: browser-based applications, messaging-based applications and client-based
applications (Kim et al., 2009; Tiwari & Buse, 2007, p. 84). The browser-based
application is essentially a Wireless Access Protocol (WAP)-based internet access
(Kim et al., 2009). This requires a compatible mobile phone which is WAP-enabled.
The mobile phone is used to access banking portals through the Internet.
On the messaging-based applications, the communication between the bank
and the customer is carried out via text messages. For example, by using a registered
mobile number, the customer sends a predefined command to the bank, then uses text
messages to conduct transactions with the bank. An example of messaging-based
applications is the Unstructured Supplementary Service Data (USSD), which has
compatibility with most mobile phones.
Existing mobile banking applications based on USSD includes WIZZIT in
South Africa (WIZZIT, 2005), M-PESA in Tanzania (Camner & Sjöblom, 2009), M-
PESA in South Africa (Nedbank, 2010b) and FNB mobile banking (FNB, 2010).
On client-based applications, special software is installed in the mobile phone.
An example of a client-based application is what is called the SIM Toolkit standard

App
NFC
USSD
STK
Mobile Client

Telco Mobile Banking Server
Module Client Interface

Module Enterprise Service Bus
Authenticate
Engine
Transation
Process Engine
Payment
Engine

Module Extenal Interface
Core Banking
Bank

Security (A)
Security (B)
Merchant