DETERMINANTS OF CUSTOMERS’ CHOICE OF E-BANKING SERVICES IN THE ACCRA METROPOLIS

BY

MAJORINE DARKO

PG3056109

PROJECT PROPOSAL SUBMITTED TO THE KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF COMMONWEALTH EXECUTIVE MASTER OF BUSINESS ADMINISTRATION

JANUARY 2010

CHAPTER ONE

INTRODUCTION

1.1 Background

Access to information in the 21st century is very important. Information in this modern world is

powered by the ever increasing use of Information Communication Technology (I.C.T). The

impact of electronic technology is invariably and inevitably felt by everyone throughout the

world. The undeniable reality today is that individuals and organizations exist in a world of

electronic solutions. Today, much of human needs are met by the use of electronic goods and

services and this is evident in the numerous electronic products available and used by people in

their homes, offices, public places and also those they personally carry (Asgarali-Patel, 2007).

The recent years have witnessed phenomenal transformations in the operations of many

businesses due to the massive advances in information communication technology (Yeboah –

Asiamah, 2008). Banks have accordingly introduced a number of electronic products to serve its

customers; ranging from the use of Automated Teller Machines (Murphy, 2002), through

electronic payment and money transfer systems to internet and mobile banking using networked

computers and cellular phones. These technologies exist in different combinations in various

banks in Ghana.

Over the last decade, the Ghanaian government has made serious efforts to pursue a ‘knowledge-

based economy’ agenda to make Ghana a preferred information and communication technology

(ICT) destination. The use of the Internet in Ghana has also seen significant increases since the

liberalization of the telecommunication industry in 1990s. The country had 18.1 Internet users

per 1,000 people in 2005 as compared to 1 Internet user in 1999 (ITU, 2007). The number of PC

ownership doubled to 52 owners per 1,000 people between 1999 and 2005. A National ICT for

Accelerated Development policy was introduced in 2003 with the objective of engineering an

ICT-led socioeconomic development process. As a country which hitherto could clearly be

described as sitting at the disadvantaged end of the global digital divide, it becomes important to

ascertain how ICT is affecting the Ghanaian banking business, which also tends to contribute

substantially to Ghana’s service sector revenues (ISSER, 2005). With the promise of the Internet,

its application as the electronic and communication medium or channel for offering transactional

banking services.

E-banking offers the potential for improving the quality and timeliness of response from banks,

facilitating self-service and service customization, and improving customer communication and

relationship (Gurau, 2002). Research relating to e-banking has been conducted in a multiplicity

of contexts. E-banking research has been well conducted in Europe and Australia. Research

relating to the adoption of the Internet and other ICTs in banking has been discussed extensively

by different researchers (Hinson, Iddrisu and Boateng, 2008).

In recent times there have been upsurge of e-banking services in the banking industry of Ghana.

Banks are actually trying to make transactions as easy as possible using information

communication technology systems. The drawback is that most of these e-services are not well

used by customers as most of them patronize just one or two aspects of the e-banking services. In

cases where customers adopt the service, its usage is always limited. Averts and commercials on

e-banking services are put up with very catchy messages but few of the bank’s customers are

found using their services. Most studies in this area have focused on the banks’ adoption of e-

banking and neglect the rich aspects its development- factors influencing customers’ choice of

the e-banking services. This project is conducted to find out factors that determine the adoption

of e-banking services by customers.

1.2 Statement of the Problem

The banking industry has been constantly innovating and with the advent of technological

developments, particularly in the area of information and communication technology, one of the

latest innovations that have taken over is e-banking. This phenomenon has attracted a number of

empirical studies (Bielski, 2000; Booz, Allen & Hamilton, 1997; DeSourdy, 2001) that analyzed

the development of electronic banking and its operations. A general consensus exist that e-

banking enables banks to provide an inexpensive and direct way of doing banking business,

exchanging information and to sell or buy products and services. A number of studies have been

carried out relating to issues in the wider context of e-banking (Balachandher, Santha, Norhazlin,

& Prasad, 2000; Suganthi, Balachandher, & Balachandran, 2001), particularly in relation to the

rationales and benefits of internet banking, customer loyalty and service quality. However,

studies investigating the relative importance of factors influencing the adoption of e-banking and

other customer preferences, particularly for Ghana as a country have not come to the orbit of

knowledge. The potentials of e-banking have not been fully used by its target populations in the

banking industry. The study therefore seeks to answer the question: What are the factors that

determine choice of e-banking services among retail customers of commercial banks in Accra?

1.3 Purpose of Study

The purpose of the study is to find out factors that determine choice of e-banking services among

retail customers of commercial banks in Accra. It will also look at factors that encourage and/or

discourage customers from using e-banking services.

1.4 Objectives

The objectives of the study are to:

i. determine customers’ knowledge level of e-banking services.

ii. find out customers’ perception of e-banking services.

iii. identify factors that determine customers’ choice of e-banking services.

iv. identify the various e-banking products customers access.

v. find out the challenges customers face in using e-banking services.

1.5 Research Questions

The study seeks to answer the following questions:

i. What is the knowledge level of customers of e-banking?

ii. What are customers’ perceptions of e-banking services?

iii. What factors encourage traders to access e-banking services?

iv. Which e-banking services and products traders mostly use?

v. Which factors inhibit customers from accessing e-banking services?

1.6 Rationale for the Study

The result of the study will serve as a source document for policy makers in the banking sector.

Both private and public commercial banks can use the findings of the study to design

interventions for their customers. The central bank can use the findings of the study to structure

its policies on the development of the banking industry.

Financial institutions, both banking and non-banking, can design their products based the

findings of the study. Knowing the factors that determine adoption and use of e-banking will

enable financial institutions to structure their e-banking operations to encourage access. The

findings can serve as a great source of marketing information for financial institutions, as

campaign and advertising messages can be framed based the findings of the study.

Various associations and organizations (governmental and non-governmental) can formulate

program objectives based on the findings of the study. When they know about factors that will

motivate their clients or members to patronize e-banking services, they will design programs to

address them.

Finally, this research study would add to the pool of knowledge of the Kwame Nkrumah

University of Science and Technology (KNUST) as well as enhancing the knowledge of the

researcher in e-banking services and operations.

1.7 Scope of the Study

In order to make the study simple and understandable the following e-banking services were

used: Automated Teller Machines (ATMs), Internet Banking, Mobile Banking, Electronic Funds

Transfer Point of Sale (EFTPoS) and Telephone Banking.

1.8 Organization of the Study

The study was organized into five chapters. The chapter one covers the background and problem

statement of the study. The main purpose of the research, objectives and significance of the study

as well as definition of terms are found in chapter one. The review of related literature and

theoretical framework are located in chapter two. Chapter three contains a description of the

research methodology and procedure while presentation, analysis and discussion of results are

covered in chapter four. The chapter five covers summary of findings, conclusion and

recommendations.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 What is Electronic Banking

Use of computers and telecommunications to enable banking transactions rather than through

human interaction is e-banking. Its features include electronic funds transfer for retail purchases,

automatic teller machines (ATMs), and automatic payroll deposits and bill payments.

(Encyclopedia Britannica online). Electronic banking has vastly reduced the physical transfer of

paper money and coinage from one place to another or even from one person to another.

Electronic banking systems can be retail payment systems, such as Automated Teller Machine

(ATMs) networks and point-of-sale systems; and interbank payment systems. E-banking implies

exchange of banking products and services through electronic delivery channels. Electronic

banking has been around for quite some time in the form of automated teller machines and

telephone transactions (Nitsure 2003). In more recent times, it has been transformed by the

internet -a new delivery channel that has facilitated banking transactions for both customers and

banks. For customers, the internet offers faster access, is more convenient and available around

the clock irrespective of the customer's locution. For banks, it is a much more efficient and cost-

saving channel (Nitsure 2003). Banks today are becoming increasingly aware of both the threat

and the opportunity that the web represents. ICT- mediated services such as ATMs, electronic

fund transfer (EFT), electronic smart cards, cell phone banking among others, are evident in the

activities of current banks. Electronic banking in fact allows customers to perform a wide range

of banking transactions via the electronic media.

2.2 Information Communication Technology (ICT) and Banking

Information and Communication Technologies (ICTs) have become an essential part of our lives.

In the past decade, the use of ICT throughout society really took off with the introduction of the

Internet. Various electronic devices and media have been explored to the advantage of different

aspects of life. ICTs have swiftly developed many sectors of economies such as manufacturing,

selling, education, transport, leisure just to mention a few. Information Technology (IT) is a

man-made resource, embracing principally the electronic technologies of computers and

telecommunications (voice, data, and video), and comprising of both electronic hardware and

computer software. The significance of IT in today’s successful organization cannot be

underestimated. It plays a major role in the success of the organization in today’s highly

competitive world by providing easy and fast means of collecting, storing, retrieving, processing,

transmitting and distributing information. There can be various other factors that determine the

success of a firm, and a firm may use various strategies to pursue the path of success. However,

fast and easy access of information through the use of IT is very important to the firm because it

influences all the other success factors, and the competitive strategies cannot be practically

implemented without its support. Therefore, no business-firm that minimizes the use of IT can

attain the topmost position in its business. This is very much true in the case of financial

institutions, which include commercial banks. Today’s business environment is very dynamic

and undergoes rapid changes as a result of technological innovation, increased awareness and

demands from customers (Abdulazeez, 2010).

Business organisations, especially the banking industry of the 21st century operates in a complex

and competitive environment characterized by these changing conditions and highly

unpredictable economic climate. ICT products in use in the banking industry include Automated

Teller Machine, Smart Cards, Telephone Banking, Magnetic Ink Character Recognition (MICR),

Electronic Funds Transfer, Electronic Data Interchange, Electronic Home and Office Banking.

Information and Communication Technology (ICT) is at the centre of this global change curve.

The application of information and communication technology concepts, techniques, policies and

implementation strategies to banking services has become a subject of fundamental importance

and concerns to all banks and indeed a prerequisite for local and global competitiveness.

Harold and Jeff (1995) indicate that financial service providers should modify their traditional

operating practices to remain viable in the 1990s and the decades that follow. They claim that the

most significant shortcoming in the banking industry today is a wide spread failure on the part of

senior management in banks to grasp the importance of technology and incorporate it into their

strategic plans accordingly. The banking sector in Ghana has witnessed tremendous changes

linked with the developments in ICT over the years.

Many strides have been made by banks in the area of e-banking but one of the most crucial

factors linked to the success of their efforts is customers’ ability and willingness to use the

facilities. Most studies in this area have focused on the banks adoption of e-banking services

rather than customers’ acceptance. This study tries to find out factors that determine customers’

choice of e-banking services.

2.3 The Internet as an Important Facility in E-Banking

The Internet started mainly as a network for researchers that gave the opportunity to share

information and ideas. Internet banking which is also called online banking is an outgrowth of

computer supported banking. Internet banking uses the internet as the delivery channel by which

to conduct banking activity, for example, transferring funds, paying bills, viewing checking and

savings account balances, paying mortgages and purchasing financial instruments and

certificates of deposits (Haque et al, 2009). An important step in the commercialization of the

Internet was the announcement of the World Wide Web (www) in 1991 by Tim Bemers-Lee

(Kalakota and Whinston, 1996).

When first introduced, internet banking was used mainly as an information presentation medium

in which banks marketed their products and services on their websites. With the development of

asynchronous technologies and secured electronic transaction technologies, however, more

banks have come forward to use internet banking both as a transactional as well as an

informational medium. As a result, registered Internet banking users can now perform common

banking transactions such as writing checks, paying bills, transferring funds, printing statements,

and inquiring about account balances. Internet banking has evolved into a “one stop service and

information unit” that promises great benefits to both banks and consumers. Internet banking

services are crucial for long-term survival of banks in the world of electronic commerce

(Burnham 1996). The market for Internet banking is forecast to grow sharply in the next few

years, affecting the competitive advantage enjoyed by traditional branch banks (Duclaux 1996;

Liao et al. 1999). Indeed, it also was estimated that financial institutions that failed to respond to

the need for internet banking services would likely lose more than 10% of their customer base by

the year 2000 (Orr 1998; Tower Group 1996).

Internet banking would help banks present a potentially low cost alternative to brick and mortar

branch banking. Burnham found that the majority of banks with websites spent less than

US$25,000 to create a web presence, and less than US$25,000 a year maintaining it. He

suggested that even if these figures were to rise as banks began to offer Internet banking

services, they would still be less costly than the traditional branch banking. For example, it

requires US$1.5 million to US$2 million to set up a traditional brick and mortar branch and

US$350,000 to US$500,000 a year to operate it. It must be noted that Burnham’s figure of

US$25,000 is just for creating an electronic presence on the Web. A fully functional Internet

banking site is likely to cost US$1 million to US$2 million. From the consumers’ perspective,

internet banking provides a very convenient and effective approach to manage one’s finances as

it is easily accessible 24 hours a day, and seven days a week. Besides, the information is current.

For corporate customers, sophisticated cash management packages offered through Internet

banking provide them with up to the minute information, allowing for timely funds management

decisions (Kalakota and Whinston 1996).

As the economy of Ghana is picking up the service industry especially the banking industry are

extending their national and regional coverage to be able to provide the needed financial

services. In this development it is expected that the use of the internet would facilitate the

adoption of e-business in the Ghana banking industry as a means of offering fast, flexible, and

cost-effective ways of doing business as well as enhance their competitiveness. This state of

development will be important especially as volume of trade increases and Ghana and other

developed countries require fast transfers of monies, payments across continents, and many other

services that promote growth of business (Al-Mudimigh. 2007).

As with most developing countries that have pursued economic and structural reforms. Ghana

has been undergoing a process of financial sector restructuring and transformation as an integral

part of a comprehensive strategy for some time (Acquah. 2006). According to Bawumia (2007)

banks in Ghana will need to reinvent themselves in this new conducive but challenging

environment. This is important because electronic transactions will continue to grow and only

countries that make a move towards embracing e-Business will participate in this revenue

generation (Akoh. 2001). Banking in Ghana is one of the industries being radically transformed

by ICT (Frempong. 2007). For example most banks within the main cities of Ghana now employ

cutting edge technologies to roll out their products to Ghanaian customers. (Bawumia. 2007).

Banks today are becoming increasingly aware of both the threat and the opportunity that the

electronic media represents. ICT- mediated services such as automatic teller machines, electronic

fund transfer, electronic smart cards, cell phone banking among others, are transforming the

traditional ways of banking and providing competitive edge for banks that provide those services

(Frempong, 2007). But, to be competitive in the Internet economy, companies need to harness

the power of the Internet successfully (Al- Mudimigh, 2007) hence it is important to understand

the benefits, barriers and challenges related to companies' adoption of e-business.

Today, because the internet can facilitate the quick and efficient movement of information

among trading partners at a greatly reduced cost business via the internet or electronic commerce

(E-Commerce) has become one of the principal means of doing business.

2.4 E-banking in Ghana

Banking in Ghana has changed dramatically for the past ten years. An increasingly innovative

and aggressive financial services environment, as well as deregulation, has created more

competition and a seemingly endless variety of products (Tumdie 2010). These forces of change

have driven banks towards electronic-based channels. Electronic banking service becomes the

ultimate factor which differentiates banks and determines whether or not they survive.

This study attempts to analyze the factors that affect the choice of customers in choosing e-

banking services. E-banking provides enormous benefits to consumers in terms of cost of

transactions, either through internet, telephone or other electronic delivery channels. In terms of

service sophistication, e-banking services range from information push – mono-directional –

services where customers receive information about the bank, its products and services, to

information-download – bi-directional – services where customers can download (or ask in case

of telephone-banking) account information and forms to full-transaction – multi-directional –

services where customers can perform most banking transactions (such as transfer between

accounts, bill payment, third party payment, card and loan applications, etc.) electronically

(Boateng and Molla, 2006; Singh and Malhotra, 2004).

Today e-banking has far advanced in Ghana, although most of its services are concentrated in the

cities and some towns. Mobile banking is the peak of e-developments in the banking sector and

banks are trying all their best to develop along these lines.

2.5 Perception and Access to E-Banking Services

Inevitably, e-banking has sparked a lot of attention in the academic literature lately (such as Gan

et al., 2006; Pikkarainen et al., 2006; Shamdasani et al., 2008). Undoubtedly, electronic banking

(e-banking) has experienced explosive growth and has transformed traditional practices in

banking (Barwise and Farley, 2005; Gonzalez et al., 2008; Lichtenstein and Williamson, 2006).

Chuang, Chao Chao, Hu and Fu-Ling found out that checking account balance, the

information about foreign exchange rates, current interest rates and transferring money

between accounts are the most important online banking services features from the

customer point of view. On the contrary, customers generally pay less attention to the

following items, such as exchanging opinions with others, reading versatile daily news and

browsing the banking website .

Developments in information technology have provided people with information in an easily

accessible way. Numbers of financial institutions have their websites to convey their marketing

messages. Therefore, there has been growing competition among financial institutions to attract

and keep online consumers. Consequently, understanding customers' necessity is important to

evaluate e-banking service effectiveness. More and more preference for information and

convenience has caused financial services sector to restructure. Besides, the electronic media is

the highest in the finance and insurance sectors. The purpose of this study is to investigate

determinants of consumers' choice of e-banking service, which are deemed vital and valuable for

better e-service delivery.

E-banking has become increasingly important because it is one of the most popular delivery

channels for banking. The majority of consumers now prefer technology based service delivery

over that of the employee. Neha, Saroj and Datta (2010) for example found out that customers

perceive automated teller machines based how money is being transacted (functional benefit),

easy to use, less time, effectiveness and efficiency over the traditional systems.

IAMAI, 2006 puts across some advantages of online Banking. It is convenient, not bound by

operational timings, there are no geographical barriers and the services can be offered at

relatively lower cost. Electronic banking has experienced explosive growth and has transformed

traditional practices in banking (Gonzalez et al., 2008). 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 (Divya

Singhal and V. Padhmanabhan, 2008). The perception is formed as a result of interpreting the

experiences gained from interacting with the electronic service. This study aims at finding out

factors that motivate customers to adopt a e-banking services. Hiltunen et al., as cited in Singhal

and Padhmanabhan (2008) indicated that there is a growing interest in understanding the users’

experience as it is observed as a larger concept than user satisfaction. Singhal and

Padhmanabhan listed factors which contribute to the customers’ perception such as convenience,

flexible virtual banking system, reliability, time factor, real time access to information, saving

transaction cost, on-line bill payments, digital signature for security, faster transfer, easy to use,

user friendly, low transaction fees, anytime and anywhere banking facility, access to current and

historical transaction data and facility of fund transfer to third party.

Williamson, 2006 identifies convenience way of operating banking transactions as one of the

factors that determine choice of e-banking. Customers perceive e-banking as convenient and

flexible and can be provided at a lower cost than traditional banking.

Jun and Cai (2001) identified one of the very important service quality dimensions of e-banking

which is reliability. Of late, e-banking has been plagued by criminals and fraudsters attempting

to steal customer information. Phishing, pharming, and other types of attacks have become well

known and are widely used as a means for fraudsters to obtain information from customers and

access online banking accounts. As a result, reliability determines one’s choice of a particular e-

banking service.

In Ghana the banks started e-banking initially with simple functions such as real time access to

information about interest rates, checking account balances and computing loan eligibility. Then,

the services are extended to online bill payment, transfer of funds between accounts and cash

management services for corporate (Sadique et al, 2009). Other factors are the ability to save

transaction cost and time. The cost involved in using a particular e-banking service is crucial to

its adoption.

In a survey conducted by the Online Banking Association of India to protect customers’ privacy

and protect against fraud, the following were found: Digital signature is a precautionary measure

to prevent malpractices and tampering the information. It is a form of enhanced authentication to

ensure the security of electronic business users. Another important factor that contributes the

framework of the perception of e-banking services is the processing speed funds transfer. The

fundamental advantage of the internet banking is the transfer of the information about the

money’s worth to any place at any time with a mouse clicks distance.

Ease of use is another important determinant for the customer preferring the internet banking

(Beer, 2006). In a study conducted by Cooper (1997) it was found out that ease of use of

innovative product or service was one of the three important characteristics for adoption from the

customer’s perspective. The user friendliness of domain names as well as the navigation tools

available in the web-sites is an important determinant for ease of use and lastly access to current

and historical transaction data: According to IAMAI report’s – online banking ‘2006’, customers

prefer to view account balances, transaction history and updates get e-statements, credit card and

debit card transaction history and updates, checking the status of their credit card accounts,

viewing information regarding their account and information on their fixed deposits.

Most studies found out that reliability, ease of use, personality, accessibility accuracy, security

and efficiency could influence e-banking (Joseph et. al., 1999; Meuter et al., 2000; Yang & Jun,

2002; Zeithaml, 2002; Joseph & Sone, 2003;Long & McMellon, 2004 cited in Srivastava, 2007).

2.6 Theoretical Framework

Technology Acceptance Model

The main theory used is the Technological Acceptance Model (TAM) as developed by Davis

&Venkatesh (1996). The purpose of TAM is to predict and explain the tendency for users to

accept a particular technology. The attitudes or beliefs the user has towards a given technology

determine their tendency to adopt and apply such technology. These attitudes or beliefs are

measured by looking at the perceptions of the user in relation to perceived usefulness and

perceived ease of use of the technology. TAM is a theoretical model that was developed to

evaluate the effect of system characteristics on user acceptance. TAM assumes that a technology

user generally acts quite rationally and uses information in a systematic manner to decide

whether to adopt, or not to use it. It draws on the causal links between perceived usefulness,

perceived ease of use, attitude towards using technology and behavioural intention to explain

technology adoption. Customers perceptions of how useful a particular e-banking service can be

will cause them to use the service. Also it must be easy to use and user-friendly. Attitudes are

formed as result of experiences and information about something. When customers interact with

an e-banking service and they find it not user-friendly or effective, they will gradually develop

negative attitudes towards its usage.

The Diffusion of Innovations (DI)

The theory of Diffusion of Innovations as described by Rogers (1995) is well known. Rogers

describes diffusion of innovations as the process by which an innovation is communicated

through certain channels over time among the members of social systems. It is a special type of

communication, in that the messages are concerned with new ideas. A decision not to adopt an

innovation relates to the rejection of the available new idea. However, in order to explain the rate

of adoption of innovations Rogers suggests measurement of the following perceived

characteristics of innovations: (1) relative advantage (2) compatibility; (3) complexity; (4)

trialability; and (5) observability. Rogers (1995) postulated that the adoption of innovations is

influenced by these five characteristics, and that they can explain the rate of technology

adoption.

Relative Advantage: How improved an innovation is over the previous generation. In this case

the ability of the e-banking service to solve problems of traditional banking hall operations. For

example if captured ATM cards will have to be collected from the particular branch where it was

captured then customers will fill reluctant using it.

Compatibility: The level of compatibility that an innovation has to be assimilated into an

individual’s life; whether it relates to a previous one. Sometimes terms used in e-banking

softwares do not reflect the ones used in the conventional forms. This makes the services highly

incompatible and less likely to be adopted.

Complexity or Simplicity: If the innovation is too difficult to use an individual will not likely

adopt it. The steps and processes involved in accessing e-banking service should be as simple as

possible. It should mimic the real life situation, if possible with both signs and symbols to

facilitate simplicity.

Trialability: How easily an innovation may be experimented with as it is being adopted. If a

user has a hard time using and trying an innovation this individual will be less likely to adopt it.

Observability: The extent that an innovation is visible to others. An innovation that is more

visible will drive communication among the individual’s peers and personal networks and will in

turn create more positive or negative reactions.

CHAPTER THREE

Methodology

3.1 Study Area

The study was conducted with selected banks in the Accra Metropolis. The Accra Metropolitan

Assembly (AMA) is the hub of Ghana. The Assembly has full economic opportunities and

potentials that must be harnessed by its inhabitants. The Metropolis has great potential for the

development of eco-tourism, hospitality, commerce, sanitation and waste management, which is

a major challenge to the AMA due to the high density of the population in the city.

AMA has a total land size of 200 square kilometres and is made up of six sub metros namely

Okaikoi, Ashiedu Keteke, Ayawaso, Kpeshie, Osu Klotey and Ablekuma. The Southern

boundary of the Metropolis of Accra is the Gulf of Guinea from Gbegbegese to the Mukwe

Lagoon near Regional Maritime Academy. The boundary continues along the Maritime Road to

join the Accra-Tema road to Nungua Police Station Barrier.

It turns right to the Ashaiman Municipal road till the Railway overhead Bridge on the Motorway

and continues to Mile Post 91/2. From here the boundary continues to the road between the

Institute of Professional Studies ( IPS) and the Accra Teachers Training College (ATRACO),

westwards crossing the Accra-Aburi Road to the University of Ghana behind the great Hall to

Kisiseman and Christian Village to join the Accra Nsawam Road at the Achimota Brewery Road

Junction.

It turns left for 500m to the Aayeayeefee Street junction and through the Aayeayeefee Street to

the Bridge over the Achimota Stream, then turns right along the stream to the high tension lines

to the Achwilage Street and through Achwilage Street to the range of the Awoshie Hills and

turns left again along the hills to the boundary between Kokorko (Ga District) and Awoshie

(Accra Metropolis), from here it turns left along the swampy area and crossing the motorway

through the swampy area to the bridge on the Sakumono Stream on the Accra-Winneba road and

streatching along the stream till the starting point at Gbegbeyese. Currently, its estimated that 4.5

million people reside in the capital city and over 1 million visitors operate in the capital for

various businesses daily.

3.2 Population of the Study

The population of the study was male and female customers of selected banks in Accra.

3.3 Research Design

The research used the cross sectional survey method. It was therefore primarily quantitative. In

order to have a very good picture of the issues under study and increase validity and reliability

some aspects of the qualitative approach was used thus making it a mixed method.

3.4 Sampling Technique

As a banking environment, the purposive sampling method was ideal for selecting the sample for

the study. Purposive sampling allows the researcher to select the respondents who have the

information needed conveniently. Customers of a bank are such that their total number and

register cannot be easily ascertained, thus the purposive sampling can best be used. The random

sampling technique was however employed in some aspects of the sampling process.

3.5 Sampling Procedure

A list of commercial banks in the Accra Metropolis was used to randomly to select eight (8)

banks. The simple random sampling technique was further used to selects two (2) branches each

of the eight selected banks. From each selected branch, ten (10) customers were accidentally

selected during banking hours to answer the questionnaires. In all a sample of 80 respondents

was used for the study.

3.6 Tools / Instrumentation

The questionnaire was used as the main tool or instrument for the study. Questionnaires can be

used for a study on perceptions and overt behavior, hence adopted for the study. In addition to

the above, questionnaires and interview schedules are relatively cheaper in administering and

faster in distribution. Where a respondent cannot answer the questionnaire on his/her own the

questionnaire was used as interview schedule. The questionnaire contained both close and open-

ended questions and pre-coded for easy data analysis.

3.7 Data Collection Procedure

The researcher recruited and trained two research assistants who distributed the questionnaires

and administered the interviews where necessary. Introductory letter was collected from the

school and copies were made for the assistants. The banks were contacted for permission to

administer the questionnaires.

3.8 Pre-test of Research Instruments

The questionnaire was pre-tested on selected customers of a bank in the Ga West district. The

results were used to review the questions. Errors and mistakes were corrected. The result of the

pre-test was also used to design a dummy analysis.

3.9 Sources of Data Collection

Data was collected from primary sources. The primary data collection instruments were

questionnaires and interview schedules administered to a sample of customers of selected banks

in the Accra Metropolis.

3.10 Data Presentation and Analysis

The raw data was organized and edited using the SPSS computer software. Both descriptive and

inferential statistics was used for the analysis. Descriptive statistics such as mean, median range,

standard deviation and percentages was used to analyze descriptive data. The Chi Square

analysis will be used to determine possible relationships among the variables studied. Tables and

graphs was used to present quantitative data whiles qualitative information will be summarized

with narrations

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KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGYCOMMONWEALTH EXECUTIVE MASTER OF BUSINESS ADMINISTRATION

DETERMINANTS OF CUSTOMERS’ CHOICE OF E-BANKING SERVICES IN THE ACCRA METROPOLIS

QUESTIONNAIRE

This questionnaire is purely an academic exercise and as such information provided will be used

for that purpose. If you cannot read and answer on your, the research assistant will read in your

language of understanding so that you can answer.

Demographic Data

1. Age

1. [18-25]

2. [26-40]

3. [41-55]

4. [56+]

2. Sex

1. [Male]

2. [Female]

3. Educational Level

1. [No formal education]

2. [Basic education]

3. [Secondary education]

4. [Tertiary education]

5. Others please specify…………………………………………………………………

4. Monthly Income Level (GH¢)

1. [Below 100]

2. [101-500]

3. [501-1000]

4. [1001 -1500]

5. [1501 and above]

5. Which type(s) of account(s) do you operate?

1. Savings only

2. Current only

3. Both Savings and Current

4. Others……………………………………………………………………….

Knowledge of e-banking services

6. Which of the following e-banking products are you familiar with? Please use a scale of 1-3, to indicate the level of familiarity; where 1- very familiar, 2- less familiar, 3- not familiar

1. Automated Teller Machines (ATMs) [ ]

2. Internet Banking [ ]

3. Mobile Banking [ ]

4. Electronic Funds Transfer Point of Sale (EFTPoS) [ ]

5. Telephone Banking [ ]

7. How did you learn about the e-banking service selected above?

1. From friends

2. Self learning

3. By a bank staff

4. Television/Radio

5. Other................................................................................................................

Perceptions of e-banking services

8. Is e-banking important to you as a customer? Yes [ ] No [ ]

9. Would you accept it if your bank decide to register you free for internet and mobile banking?

Yes [ ] No [ ]

10. In your own view, what benefits will you get for using e-banking?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...

11. Why would you want to use them?

1. Speed of transactions2. Easy access of funds/money3. For security (to avoid thieves)

Others specify…………………………………………………………………………………

…………………………………………………………………………………………………

Use of e-banking services

12. Which of the e-banking services are offered by your bank?

1. Automated Teller Machines (ATMs) [ ]

2. Internet Banking [ ]

3. Mobile Banking [ ]

4. Electronic Funds Transfer Point of Sale (EFTPoS) [ ]

5. Telephone Banking [ ]

13. Which of the e-banking services do you use?

1. Automated Teller Machines (ATMs) [ ]

2. Internet Banking [ ]

3. Mobile Banking [ ]

4. Electronic Funds Transfer Point of Sale (EFTPoS) [ ]

5. Telephone Banking [ ]

14. Do you use ATM cards? 1. Yes [ ] 2. No [ ]

15. If yes, how times do you use ATMs in a month

1. once

2. twice

3. thrice

4. four or more

16. What do you normally use ATMs for? Please use a scale of 1-3 to show the rate of use; where 1 = very often, 2 = quite often and 3 = less often

1. Withdrawing money [ ]

2. Checking for balance [ ]

3. Ordering for Check book [ ]

4. Paying for Bills [ ]

5. Others specify…………………………………………………………………… [ ]

17. If no, kindly tell why you don’t use ATM cards.

………………………………………………………………………………………………………

………………………………………………………………………………………………………

Challenges faced in the use of e-banking services

18. What challenges will you face in using e-banking services?

1.ATMs:…………………………………………………………………………………………….

…………………………………………………………………………………………………….

2. Internet Banking: ……………………………………………………………………………….

3. Mobile Banking ………………………………………………………………………………..

4. Electronic Funds Transfer Point of Sale (EFTPoS)…………………………………………….

5. Telephone Banking ……………………………………………………………………………..

19. Rate yourself in terms of ability to use the e-banking services.

1. ATMs - 1. Very Difficult [ ] 2. Less Difficult [ ] 3. Not Difficult [ ]

2. Internet Banking - 1. Very Difficult [ ] 2. Less Difficult [ ] 3. Not Difficult [ ]

3. Mobile Banking - 1. Very Difficult [ ] 2. Less Difficult [ ] 3. Not Difficult [ ]

4. Electronic Funds Transfer Point of Sale (EFTPoS) - 1. Very Difficult [ ] 2. Less Difficult [ ] 3. Not Difficult [ ]

5. Telephone Banking - 1.Very Difficult [ ] 2. Less Difficult [ ] 3. Not Difficult [ ]