The rise of virtual banks: Factors influencing its adoption using TRUTAUT framework
Abstract
Background and Purpose: In 2022, the Malaysian central bank granted five licenses to run virtual banks. Despite the high online banking usage in Malaysia, virtual banking is still considered a new experience to potential users and may present challenges as individuals may exhibit resistance and hesitance to adopt. Hence, understanding the factors influencing the intention to adopt virtual banking is crucial for its successful implementation and widespread acceptance. The objective of this study is twofold: 1) to examine the current technology readiness of customers, and 2) to examine the factors influencing customers’ intention to adopt virtual banking in Malaysia.
Methodology: This study adopts a quantitative method where questionnaires were distributed to bank customers as the target population. Data gathered from 157 respondents was analysed using variance-based partial least squares structural equation modelling (PLS-SEM) method.
Findings: The findings of this study revealed that optimism and innovativeness are significant motivators to shape an individual’s positive perception of the use of technology. Meanwhile, bank reputation, performance expectancy, and facilitating conditions have a significant influence on the intention to adopt virtual banking.
Contributions: In light of the inaugural award of digital banking licenses by Bank Negara Malaysia, this study offers valuable insights to the virtual banks to effectively promote the adoption of virtual banking in Malaysia. By combining Technology Readiness (TR) and Unified Theory of Acceptance and Use of Technology (UTAUT) into one research framework, this study employs an integrated model (TRUTAUT) which will provide a more in-depth understanding of the factors influencing customers to adopt the new virtual banking phenomenon in Malaysia. This integrated model posits that both personality dimensions and system-specific dimensions, as represented by TR and UTAUT respectively, have a significant bearing on the customers’ propensity to adopt new technology. In addition, this study also introduces bank reputation construct, which is believed to be important in influencing customer intention to adopt virtual banking.
Keywords: Virtual bank, digital transformation, Technology Readiness (TR), Unified Theory of Acceptance and Use of Technology (UTAUT).
References
Alalwan, A. A., Dwivedi, Y. K., Rana, N. P., & Algharabat, R. (2018). Examining factors influencing Jordanian customers’ intentions and adoption of internet banking: Extending UTAUT2 with risk. Journal of Retailing and Consumer Services, 40(1), 125-138.
Al-Qeisi, K., Dennis, C., Alamanos, E., & Jayawardhena, C. (2014). Website design quality and usage behavior: Unified theory of acceptance and use of technology. Journal of Business Research, 67(11), 2282- 2290.
Alshari, H. A., & Lokhande, M. A. (2022). The impact of demographic factors of clients’ attitudes and their intentions to use FinTech services on the banking sector in the least developed countries. Cogent Business & Management, 9(1), 1-24.
Aparicio, G., Ramos, E., Casillas, J.-C., & Iturralde, T. (2021). Family business research in the last decade: A bibliometric review. European Journal of Family Business, 11(1), 33-44.
Boivie, S., Graffin, S. D., & Gentry, R. J. (2016). Understanding the direction, magnitude, and joint effects of reputation when multiple actors’ reputations collide. Academy of Management Journal, 59(1), 188-226.
Brown, S. A., & Venkatesh, V. (2005). A model of adoption of technology in the household: A baseline model test and extension incorporating household life cycle. Management Information Systems Quarterly, 29(3), 399-426.
Carranza, R., Díaz, E., Sánchez-Camacho, C., & Martín-Consuegra, D. (2021). e-Banking adoption: An opportunity for customer value co-creation. Frontiers in Psychology, 11(1), 621248.
Chan, F. K. Y., Thong, J. Y. L., Venkatesh, V., Brown, S. A., Hu, P. J. H., & Tam, K. Y. (2010). Modeling citizen satisfaction with mandatory adoption of an e-Government technology. Journal of the Association for Information Systems, 11(10), 519–549.
Chaouali, W., Yahia, I. B., & Souiden, N. (2016). The interplay of counter-conformity motivation, social influence, and trust in customers' intention to adopt internet banking services: The case of an emerging country. Journal of Retailing and Consumer
Services, 28(1), 209–218.
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Lawrence Erlbaum Associates.
Eke, V. I., & Singhry, H. B. (2020). An assessment of bank customers’ intention to use internet banking: The role of service quality. International Journal of Progressive Sciences and Technologies, 23(1), 424-434.
Farhoomand, A. F., Mak, V., & Miyai, Y. (2002). Japan Net Bank: Japan’s First internet-only bank – A Teaching Case. In eReality: constructing the economy (pp. 672-692). Moderna organizacija.
Fombrun, C. J. (1996). Reputation: Realizing value from the corporate image. Harvard Business School Press.
Godoe, P., & Johansen, T. S. (2012). Understanding adoption of new technologies: Technology readiness and technology acceptance as an integrated concept. Journal of European Psychology Students, 3(1), 38–52.
Gold, A., Malhotra, A., & Segars, A. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 18(1), 185-214.
Hair, J. F., Hult, G. T., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM). Sage.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24.
Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20(2), 195–204.
Hulland, J., Baumgartner, H., & Smith, K. M. (2018). Marketing survey research best practices: Evidence and recommendations from a review of JAMS articles. Journal of the Academy of Marketing Science, 46(1), 92-108.
Izogo, E. E., Nnaemeka, O. C., Onuha, O. A., & Ezema, K. S. (2012). Impact of demographic variables on consumers’ adoption of e-banking in Nigeria: An empirical investigation. European Journal of Business and Management, 4(17), 27-39.
Jeong, S. W., & Ha, S. (2020). Consumer acceptance of retail service robots. The Research Journal of the Costume Culture, 28(4), 409–419.
Keh, H. T., & Xie, Y. (2009). Corporate reputation and customer behavioral intentions: The roles of trust, identification and commitment. Industrial Marketing Management, 38(7), 732 - 742.
Khalilzadeh, J., Ozturk, A. B., & Bilgihan, A. (2017). Security-related factors in extended UTAUT model for NFC based mobile payment in the restaurant industry. Computers in Human Behaviour, 70(1), 460-474.
Kim, J., & Lennon, S. J. (2013). Effects of reputation and website quality on online consumers' emotion, perceived risk and purchase intention: Based on the stimulus‐organism‐response model. Journal of Research in Interactive Marketing, 7(1), 33-56.
Kline, R. B. (2011). Convergence of structural equation modeling and multilevel modeling. In M. Williams & W. P. Vogt (Eds.), Handbook of methodological innovation in social research methods (pp. 562-589). Sage.
Kock, N., & Lynn, G. S. (2012). Lateral collinearity and misleading results in variance-based SEM: An illustration and recommendations. Journal of the Association for Information Systems, 13(7), 546-580.
Kuberkar, S., & Singhal, T. K. (2020). Factors influencing adoption intention of AI powered chatbot for public transport services within a smart city. International Journal on Emerging Technologies, 11(3), 948-958.
Malaquias, R. F., & Hwang, Y. (2019). Mobile banking use: A comparative study with Brazilian and U.S. participants. International Journal of Information Management, 44(1), 132–140.
Martins, C., Oliveira, T., & Popovic, A. (2014). Understanding the internet banking adoption: A unified theory of acceptance and use of technology and perceived risk application. International Journal of Information Management, 34(1), 1-13.
Maruping, L. M., Bala, H., Venkatesh, V., & Brown, S. A. (2017). Going beyond intention: Integrating behavioral expectation into the unified theory of acceptance and use of technology. Journal of the Association for Information Science and Technology,
68(3), 623-637.
Memon, M. A., Ting, H., Ramayah, T., Chuah, F., & Cheah, J. H. (2017). A review of the methodological misconceptions and guidelines to the application of structural equation modeling: A Malaysian scenario. Journal of Applied Structural Equation
Modeling, 1(1), i–xiii.
Merhi, M., Hone, K., & Tarhini, A. (2019). A cross-cultural study of the intention to use mobile banking between Lebanese and British consumers: Extending UTAUT2 with security, privacy and trust. Technology in Society, 59(1), 101-151.
Napitupulu, D., Pamungkas, P. D. A., Sudarsono, B. G., Lestari, S. P., & Bani, A. U. (2020). Proposed TRUTAUT model of technology adoption for LAPOR! IOP Conference Series: Materials Science and Engineering, 725(1), 1-8.
Oliveira, T., Thomas, M., Baptista, G., & Campos, F. (2016). Mobile payment: Understanding the determinants of customer adoption and intention to recommend the technology. Computers in Human Behavior, 61(1), 404-414.
Panetta, F. (2018). 21st century cash: Central banking, technological innovation and digital currency. SUERF Policy Note, 40(1), 23-32.
Parasuraman, A., & Colby, C. L. (2015). An updated and streamlined technology readiness index: TRI 2.0. Journal of Service Research, 18(1), 59–74.
Parasuraman, A. (2000). Technology Readiness Index (TRI): A multiple-item scale to measure readiness to embrace new technologies. Journal of Service Research, 2(4), 307-320.
Parasuraman, A., & Colby, C. L. (2001). Techno-ready marketing: How and why customers adopt technology. The Free Press
Park, B., & Rogan, M. (2019). Capability reputation, character reputation, and exchange partners’ reactions to adverse events. Academy of Management Journal, 62(2), 553-578.
Pham, L., Nguyen, P. T. H., & Luse, D. (2018). Technology readiness and customer satisfaction in luxury hotels: A case study of Vietnam. International Journal of Entrepreneurship, 22(2), 1–23.
Ponzi, L. J., Fombrun, C. J., Gardberg, N. A., & RepTrak. (2011). Pulse: Conceptualizing and validating a short-form measure of corporate reputation. Corporate Reputation Review, 14(1), 15–35.
Qasem, Z. (2021). The effect of positive TRI traits on centennials adoption of try-on technology in the context of e-fashion retailing. International Journal of Information Management, 56(1), 1-11.
Rahi, S., Ghani, M., & Ngah, A. (2018). A structural equation model for evaluating user’s intention to adopt internet banking and intention to recommend technology. Accounting, 4(4), 139-152.
Saad, G. Y., & Ihab, A. E. (2018). Intention to use e-banking services in the Jordanian commercial banks. International Journal of Bank Marketing, 36(3), 557-571.
Seol, S. H., Ko, D. S., & Yeo, I. S. (2017). UX analysis based in TR and UTAUT of sports smart wearable devices. KSII Transactions on Internet and Information Systems, 11(8), 4162-4179.
Shaikh, I. M., & Amin, H. (2023). Consumers’ innovativeness and acceptance towards use of financial technology in Pakistan: Extension of the UTAUT model. Information Discovery and Delivery, 52(1), 114-122.
Sharma, R., Singh, G., & Sharma, S. (2020). Modelling internet banking adoption in Fiji: A developing country perspective. International Journal of Information Management, 53(1), 102-116.
Slade, E. L., Dwivedi, Y. K., Piercy, N. C., & Williams, M. D. (2007). Modeling consumers' adoption intentions of remote mobile payments in the United Kingdom: Extending UTAUT with innovativeness, risk, and trust. In Psychology, 32(8), 860–873.
Thomas, V. L., & Vinuales, G. (2017). Understanding the role of social influence in piquing curiosity and influencing attitudes and behaviors in a social network environment. In Psychology, 34(1), 884–893.
Turan, A., Tunç, A. Ö., & Zehir, C. (2015). A theoretical model proposal: Personal innovativeness and user involvement as antecedents of unified theory of acceptance and use of technology. Procedia - Social and Behavioral Sciences, 210(1), 43–51.
Venkatesh, V., Thong, J. Y. L., & Xu, X. (2016). Unified theory of acceptance and use of technology: A synthesis and the road ahead. Journal of the Association for Information Systems, 17(5), 328-376.
Venkatesh, V., Thong, J. Y. L., & Xu, X. (2012). Consumer acceptance and use of information technology. Management Information Systems Quarterly, 36(1), 157–178.
Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. Management Information Systems Quarterly, 27(3), 425–478.
Walczuch, R., Lemmink, J., & Streukens, S. (2007). The effect of service employees’ technology readiness on technology acceptance. Information & Management, 44(1), 206-215.
Wen Ni, T. (2020). Factors influencing behavioural intention towards adoption of digital banking services in Malaysia. International Journal of Asian Social Science, 10(8), 450–457.
Willis, K. (2005). Theories and practices of development. Routledge.
Yoon, S. J., & Oh, J. C. (2018). A comparative study on the influencing factors of continuous use intention of Korean and Chinese SNS users: Focused on the technology readiness and acceptance model. Asia-Pacific Journal of Business, 9(4), 181-199.
Al-Qeisi, K., Dennis, C., Alamanos, E., & Jayawardhena, C. (2014). Website design quality and usage behavior: Unified theory of acceptance and use of technology. Journal of Business Research, 67(11), 2282- 2290.
Alshari, H. A., & Lokhande, M. A. (2022). The impact of demographic factors of clients’ attitudes and their intentions to use FinTech services on the banking sector in the least developed countries. Cogent Business & Management, 9(1), 1-24.
Aparicio, G., Ramos, E., Casillas, J.-C., & Iturralde, T. (2021). Family business research in the last decade: A bibliometric review. European Journal of Family Business, 11(1), 33-44.
Boivie, S., Graffin, S. D., & Gentry, R. J. (2016). Understanding the direction, magnitude, and joint effects of reputation when multiple actors’ reputations collide. Academy of Management Journal, 59(1), 188-226.
Brown, S. A., & Venkatesh, V. (2005). A model of adoption of technology in the household: A baseline model test and extension incorporating household life cycle. Management Information Systems Quarterly, 29(3), 399-426.
Carranza, R., Díaz, E., Sánchez-Camacho, C., & Martín-Consuegra, D. (2021). e-Banking adoption: An opportunity for customer value co-creation. Frontiers in Psychology, 11(1), 621248.
Chan, F. K. Y., Thong, J. Y. L., Venkatesh, V., Brown, S. A., Hu, P. J. H., & Tam, K. Y. (2010). Modeling citizen satisfaction with mandatory adoption of an e-Government technology. Journal of the Association for Information Systems, 11(10), 519–549.
Chaouali, W., Yahia, I. B., & Souiden, N. (2016). The interplay of counter-conformity motivation, social influence, and trust in customers' intention to adopt internet banking services: The case of an emerging country. Journal of Retailing and Consumer
Services, 28(1), 209–218.
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Lawrence Erlbaum Associates.
Eke, V. I., & Singhry, H. B. (2020). An assessment of bank customers’ intention to use internet banking: The role of service quality. International Journal of Progressive Sciences and Technologies, 23(1), 424-434.
Farhoomand, A. F., Mak, V., & Miyai, Y. (2002). Japan Net Bank: Japan’s First internet-only bank – A Teaching Case. In eReality: constructing the economy (pp. 672-692). Moderna organizacija.
Fombrun, C. J. (1996). Reputation: Realizing value from the corporate image. Harvard Business School Press.
Godoe, P., & Johansen, T. S. (2012). Understanding adoption of new technologies: Technology readiness and technology acceptance as an integrated concept. Journal of European Psychology Students, 3(1), 38–52.
Gold, A., Malhotra, A., & Segars, A. (2001). Knowledge management: An organizational capabilities perspective. Journal of Management Information Systems, 18(1), 185-214.
Hair, J. F., Hult, G. T., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM). Sage.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24.
Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20(2), 195–204.
Hulland, J., Baumgartner, H., & Smith, K. M. (2018). Marketing survey research best practices: Evidence and recommendations from a review of JAMS articles. Journal of the Academy of Marketing Science, 46(1), 92-108.
Izogo, E. E., Nnaemeka, O. C., Onuha, O. A., & Ezema, K. S. (2012). Impact of demographic variables on consumers’ adoption of e-banking in Nigeria: An empirical investigation. European Journal of Business and Management, 4(17), 27-39.
Jeong, S. W., & Ha, S. (2020). Consumer acceptance of retail service robots. The Research Journal of the Costume Culture, 28(4), 409–419.
Keh, H. T., & Xie, Y. (2009). Corporate reputation and customer behavioral intentions: The roles of trust, identification and commitment. Industrial Marketing Management, 38(7), 732 - 742.
Khalilzadeh, J., Ozturk, A. B., & Bilgihan, A. (2017). Security-related factors in extended UTAUT model for NFC based mobile payment in the restaurant industry. Computers in Human Behaviour, 70(1), 460-474.
Kim, J., & Lennon, S. J. (2013). Effects of reputation and website quality on online consumers' emotion, perceived risk and purchase intention: Based on the stimulus‐organism‐response model. Journal of Research in Interactive Marketing, 7(1), 33-56.
Kline, R. B. (2011). Convergence of structural equation modeling and multilevel modeling. In M. Williams & W. P. Vogt (Eds.), Handbook of methodological innovation in social research methods (pp. 562-589). Sage.
Kock, N., & Lynn, G. S. (2012). Lateral collinearity and misleading results in variance-based SEM: An illustration and recommendations. Journal of the Association for Information Systems, 13(7), 546-580.
Kuberkar, S., & Singhal, T. K. (2020). Factors influencing adoption intention of AI powered chatbot for public transport services within a smart city. International Journal on Emerging Technologies, 11(3), 948-958.
Malaquias, R. F., & Hwang, Y. (2019). Mobile banking use: A comparative study with Brazilian and U.S. participants. International Journal of Information Management, 44(1), 132–140.
Martins, C., Oliveira, T., & Popovic, A. (2014). Understanding the internet banking adoption: A unified theory of acceptance and use of technology and perceived risk application. International Journal of Information Management, 34(1), 1-13.
Maruping, L. M., Bala, H., Venkatesh, V., & Brown, S. A. (2017). Going beyond intention: Integrating behavioral expectation into the unified theory of acceptance and use of technology. Journal of the Association for Information Science and Technology,
68(3), 623-637.
Memon, M. A., Ting, H., Ramayah, T., Chuah, F., & Cheah, J. H. (2017). A review of the methodological misconceptions and guidelines to the application of structural equation modeling: A Malaysian scenario. Journal of Applied Structural Equation
Modeling, 1(1), i–xiii.
Merhi, M., Hone, K., & Tarhini, A. (2019). A cross-cultural study of the intention to use mobile banking between Lebanese and British consumers: Extending UTAUT2 with security, privacy and trust. Technology in Society, 59(1), 101-151.
Napitupulu, D., Pamungkas, P. D. A., Sudarsono, B. G., Lestari, S. P., & Bani, A. U. (2020). Proposed TRUTAUT model of technology adoption for LAPOR! IOP Conference Series: Materials Science and Engineering, 725(1), 1-8.
Oliveira, T., Thomas, M., Baptista, G., & Campos, F. (2016). Mobile payment: Understanding the determinants of customer adoption and intention to recommend the technology. Computers in Human Behavior, 61(1), 404-414.
Panetta, F. (2018). 21st century cash: Central banking, technological innovation and digital currency. SUERF Policy Note, 40(1), 23-32.
Parasuraman, A., & Colby, C. L. (2015). An updated and streamlined technology readiness index: TRI 2.0. Journal of Service Research, 18(1), 59–74.
Parasuraman, A. (2000). Technology Readiness Index (TRI): A multiple-item scale to measure readiness to embrace new technologies. Journal of Service Research, 2(4), 307-320.
Parasuraman, A., & Colby, C. L. (2001). Techno-ready marketing: How and why customers adopt technology. The Free Press
Park, B., & Rogan, M. (2019). Capability reputation, character reputation, and exchange partners’ reactions to adverse events. Academy of Management Journal, 62(2), 553-578.
Pham, L., Nguyen, P. T. H., & Luse, D. (2018). Technology readiness and customer satisfaction in luxury hotels: A case study of Vietnam. International Journal of Entrepreneurship, 22(2), 1–23.
Ponzi, L. J., Fombrun, C. J., Gardberg, N. A., & RepTrak. (2011). Pulse: Conceptualizing and validating a short-form measure of corporate reputation. Corporate Reputation Review, 14(1), 15–35.
Qasem, Z. (2021). The effect of positive TRI traits on centennials adoption of try-on technology in the context of e-fashion retailing. International Journal of Information Management, 56(1), 1-11.
Rahi, S., Ghani, M., & Ngah, A. (2018). A structural equation model for evaluating user’s intention to adopt internet banking and intention to recommend technology. Accounting, 4(4), 139-152.
Saad, G. Y., & Ihab, A. E. (2018). Intention to use e-banking services in the Jordanian commercial banks. International Journal of Bank Marketing, 36(3), 557-571.
Seol, S. H., Ko, D. S., & Yeo, I. S. (2017). UX analysis based in TR and UTAUT of sports smart wearable devices. KSII Transactions on Internet and Information Systems, 11(8), 4162-4179.
Shaikh, I. M., & Amin, H. (2023). Consumers’ innovativeness and acceptance towards use of financial technology in Pakistan: Extension of the UTAUT model. Information Discovery and Delivery, 52(1), 114-122.
Sharma, R., Singh, G., & Sharma, S. (2020). Modelling internet banking adoption in Fiji: A developing country perspective. International Journal of Information Management, 53(1), 102-116.
Slade, E. L., Dwivedi, Y. K., Piercy, N. C., & Williams, M. D. (2007). Modeling consumers' adoption intentions of remote mobile payments in the United Kingdom: Extending UTAUT with innovativeness, risk, and trust. In Psychology, 32(8), 860–873.
Thomas, V. L., & Vinuales, G. (2017). Understanding the role of social influence in piquing curiosity and influencing attitudes and behaviors in a social network environment. In Psychology, 34(1), 884–893.
Turan, A., Tunç, A. Ö., & Zehir, C. (2015). A theoretical model proposal: Personal innovativeness and user involvement as antecedents of unified theory of acceptance and use of technology. Procedia - Social and Behavioral Sciences, 210(1), 43–51.
Venkatesh, V., Thong, J. Y. L., & Xu, X. (2016). Unified theory of acceptance and use of technology: A synthesis and the road ahead. Journal of the Association for Information Systems, 17(5), 328-376.
Venkatesh, V., Thong, J. Y. L., & Xu, X. (2012). Consumer acceptance and use of information technology. Management Information Systems Quarterly, 36(1), 157–178.
Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. Management Information Systems Quarterly, 27(3), 425–478.
Walczuch, R., Lemmink, J., & Streukens, S. (2007). The effect of service employees’ technology readiness on technology acceptance. Information & Management, 44(1), 206-215.
Wen Ni, T. (2020). Factors influencing behavioural intention towards adoption of digital banking services in Malaysia. International Journal of Asian Social Science, 10(8), 450–457.
Willis, K. (2005). Theories and practices of development. Routledge.
Yoon, S. J., & Oh, J. C. (2018). A comparative study on the influencing factors of continuous use intention of Korean and Chinese SNS users: Focused on the technology readiness and acceptance model. Asia-Pacific Journal of Business, 9(4), 181-199.
Published
2024-02-29
How to Cite
Mohamad Yusof, N. A., & Anthonysamy, L. (2024). The rise of virtual banks: Factors influencing its adoption using TRUTAUT framework. Journal of Nusantara Studies (JONUS), 9(1), 148-173. https://doi.org/10.24200/jonus.vol9iss1pp148-173
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Articles
