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Consumer Awareness and Usage of E-banking

Austin Eccleton and Reece Cooper
Grand Valley State University

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Since the dawn of the 21st century the daily lives of all humans have changed
dramatically with the constant innovation of new and better technology. Like everything that
happens in life, humans are built to adjust and evolve with changes and with regards to banking
and technology we have done just that. It is quite astounding how in only a handful of years the
entire way people and businesses handle their most important asset, money, has changed to fit
the completely digital age. The research question that will be discussed and analyzed in these
following paragraphs is Due to the influx of new banking technology in our society, what have
been the effects of E-banking on people?
Like mentioned earlier, since the dawn of the digital age banking has transformed itself
from traditional bank teller/customer interaction to wireless internet services. E-banking is the
term that has been coined to describe this form of banking and is defined as customers of a
financial institution conducting fiscal transactions on the website of the said institutions website.
E-banking received its first splash onto the scene way before the digital age made its way to the
forefront. It all started in New York during 1981, the four major banks that occupied the large
monetary market of the city, CitiBank, Chase NY, Chemical and Hanover. These 4 banks started
what was called home banking, a way for their clients to analyze and tinker with their bank
accounts via a technology called VideoTex. VideoTex seemed to be the reason that this banking
never really flourished and by 1982 the idea of home banking was on the back burner for years to
come. With further development of the internet in the 1990s the back end of the decade had
banks wanting more opportunities to reach their clients outside of the normal 9-5 monday
through friday business hours. This brought banks to see the internet as the real tool to get the
strategic advantage that they desired for their customers. Banks were looking at the internet for
banking for a number of reasons, diminishing transaction costs, integration of services,

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marketing capabilities, and better profit margins to name a few. During the mid 1998 year there
were a series of large bank mergers which expanded the most powerful banks client base. Still
for the next few years internet banking was just a thought in the back of innovators minds,
especially with mistrust of the internet before Y2K and we failed to see any real advancements
until the early 2000s. Security has always been a huge part of the discussion with online
banking and has always dominated the conversation. Use of a secure website connection, single
word password protection, PIN codes, and electronic signature generation are a few of the
security protocols that banks have taken via their internet banking services. in 2008 US Federal
Deposit Insurance Corporation Technology Incident Report ran an analysis of 536 computer
intrusions to show the potential for fraud with online banking. The average loss of these 536 was
30,000 US dollars and 80% of these incidents were proven to be a result of fraudulent online
banking. As you can see online banking has made leaps and bounds to get to the forefront of this
countries fiscal operations and isnt going anywhere anytime soon.
To address the research question of due to the influx of new banking technology in our
society, what have been the effects of E-banking on people? We chose to focus our potential
research on a survey based methodology of research. The survey method seems to be the most
efficient way to analyze the effects that E-banking has on people. One of the first reasons that
surveys will work so well for this is because survey research is very inexpensive when
conducting and the total cost per respondent is generally very low. Another reason survey
research is so effective is because survey research can be administered to such a large population
which ensures a good list of results. One other reason that survey research was chosen for this
topic is because survey research is flexible, meaning we can administer this survey to large
groups of people through a variety of different mediums such as email, telephone or via website.

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The final reason we chose survey method research is because it is very reliable and with the
anonymity of the respondents should ensure honesty and accuracy.
The target group the we decided to focus on is the age group of 20-40 because these are
the people in our country that are most active on technology and the ones who are moving and
using banks the most. A list of the following Questions make up the 10 survey questions that we
would administer to the target group:
1. What percentage of your everyday banking is done online using electronic banking
services? (0-100%)
2. How long have you been using electronic banking services? (0-15 years)
3. Do you have and use a banking application on your smartphone or tablet? (yes/no)
4. Has the availability of banking apps made you more conscious of your personal fiscal
situation? (yes/no)
5. Do you trust the security measures taken by banks via their internet applications?
(yes/no)
6. Have you ever been a victim of banking fraud? (yes/no)
7. Online banking is a safe and fruitful relationship for both banks and customers. (1-5
disagree strongly-agree strongly)
8. E-Banking has changed my spending habits (1-5 disagree strongly-agree strongly)
9. Accessing my banking information is possible 24/7/365 (1-5 disagree strongly-agree
strongly)
10. If you were switching banks, would you switch to a completely online bank? (1-5
disagree-agree strongly)

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The next thing to discuss in the research project is if social media can or should be used
as a tool for analyzing this research. We feel that social media could be used completely and
effectively to help guide us researchers to answer this research question. One of the main
reasons that social media would be effective is because social media and online banking go hand
in hand, they are both part of the internet world so why not use them to help one another. There
even would be a possibility to use social media as the medium to administer this survey that we
have designed, the only thing that would change is that we would have to eliminate the target
audience. However this would make everything easier on the respondents and us as the
researchers because we could have people just take this survey anonymously via their favorite
social media. Social media is also a very cost effective way to administer this survey because it
is relatively without a cost, you would just have to post this survey and in turn you would have a
rush of results to analyze and then decide whether or not e-banking has an effect on people.
Overall this is would be a long process to administer, analyze and complete the research
because thats the nature of research, its a long painstaking process. However the way we have
laid out this potential survey and developed the questions we feel we have made a good attempt
at answering our research question. Obviously survey research needs much analysation and this
would be the longest part after receiving the surveys but one we have them all I think we would
be able to either come to a conclusion or find a way to further research this topic.

Consumer Awareness and Usage of E-Banking Annotated Bibliography

Button, K. (2013, October 7). Wire and Online Banking Fraud Continues to Spike for
Businesses. Retrieved April 7, 2015
This article is a case study about a specific online bank fraud that affected nearly 1.5
million dollars of an Efficient Services Escrow Groups bank account. The actual process of
stealing the 1.5 million dollars was a series of 3 wire transfers to undisclosed cities in China and
Russia, the total amount recovered is around 400,000 dollars resulting in the closure of the
company. The article later goes into explaining that there is a trending spike in online bank fraud
for businesss due to malware technology advancing. During this time the corporate online fraud
had reached such a large amount that the FBI even enacted a team to research and find the
culprits of these attacks. The article explains that the fraudsters are using malware that finds
customers credentials through keylogging software and other techniques. Following the
explanation of the way these criminals are finding the information to fraud and speaks to the
problem with Bank Website Applications and the easiness for the fraudsters to hack these via
personal devices.
Ezzi, S. (2014). A Theoretical Model for Internet Banking: Beyond Perceived Usefulness and
Ease of Use. Archives of Business Research, 2(2). Retrieved April 8, 2015
This article poses as a theoretical model for internet banking in comparison to other
advancements in banking technology such as ATMs, telephone banking and electronic fund
transfers. The article cites the advancements in internet banking is due to the increase in E

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commerce worldwide, e commerce is defined as business practices being done over the internet.
After describing the ins and outs of e banking this article proposes the model of IB or internet
banking where entire banks operate via the internet waves via banks like Ally. It cites that these
models are perfect banks for developing countries and allows people with money to be able to
bank from all surfaces of the globe. The article concludes with a discussion of the managerial
aspects and technological aspects in the advancements of internet banking.
Kaiserman, R. (2014). Is electronic banking killing bank branches. Retrieved from MiNTEL.
This article talks about how banks are closing at record rates and need to restructure and redesign
the bank branches if they are going to remain open. This can negatively affect banks because
they are losing the ability to cross-sell to clients by offering additional financial services to them
while they are in the bank. By restructuring banks can continue offering the consumer the
experience they desire by remaining cost efficient.
This is relevant to our topic because it explains how E-banking is adding convenience but at the
same time taking away the banks cross-selling ability and losing the banks money.
(November 15, 1999 Monday ). Customers yet to embrace e-banking; BANKING. The Age
(Melbourne, Australia), Retrieved from www.lexisnexis.com/hottopics/lnacademic
This article talks about how banks arent necessarily pushing all electronic banking services
as well as they should. They are gaining interest and usage but this is mainly only the cash
aspect such as ATMs.
This is relevant because it shows what the consumers are mostly interested in regarding Ebanking.

ONLINE BANKING; Blueprint for change; Not perfect: Electronic banking may be on the
cutting edge, but expect a few bugs if you decide to plunge in.. The Atlanta Journal and
Constitution, Retrieved from www.lexisnexis.com/hottopics/lnacademic

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This article talks about the how automation is going to be a huge step for the E-banking industry.
People will be able to automatically pay their bills online without having to do anything. Some
concerns are that your balances arent always 100% up to date.
This is relevant because it highlights some of the pros and cons of switching over to electronic
banking
Schaechter, A. (2002). Issues in Electronic Banking: An Overview. IMF Policy Discussion
Paper, 02(06), 2-23. Retrieved April 7, 2015, from
https://www.imf.org/external/pubs/ft/pdp/2002/pdp06.pdf
This article gives background of what banking life was like before the internet, since it
was published in 2002 internet banking was not near as popular as it is today in 2015. This
article gives predictions about the change from traditional 9am-5pm banking services to a form
of online banking we know call E-banking. The article plays with the benefits of the possible
transformation of the banking industry with chances to penetrate new markets and give
customers more access to their money. This article brings about major issues that could plague
this possible transformation, one being difficulty banking between other countries over borders
and problems with host (Bank) supervision. So far this article is the one with the most
information that I have come across and supplies sufficient information of the mindset of people
involved in finance before E-banking ever really became a thing. Another benefit of this article
is it clearly defines what E-banking is; the use of electronic delivery channels for banking
products and services, and is a subset of electronic finance.
Scott, S. (n.d.). The Effects of Online Banking. Retrieved April 7, 2015
In this article about online banking the author analyzes the effects of Online banking,
specifically looking at the convenience for banking customers. Scott believes that online

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banking has revolutionized the banking world by allowing customers to access their accounts
from the security and safety of their own homes at any time of the day. The article outlines the 4
most important factors that play into the success of E-banking, limits teller transactions, 24 hour
access, financial integration and an increase in criminal activity.
This article offers a basic overview of what online or E-banking really is and the
advantages and disadvantages. This article is a sufficient way for someone unfamiliar with Ebanking to understand and get a basic understanding for what it truly is. I think the nicest part of
this source is it is a great starting point for more research to go towards, it gives 4 main points for
someone to look at when looking further for information regarding online banking.
Shao, G. (2007). The Diffusion of Online Banking: Research Trends from 1998 to 2006. Journal
of Internet Banking and Commerce, 12(2), 2-13. Retrieved April 8, 2015, from
http://www.arraydev.com/commerce/JIBC/2007-08/Shao_final_PDF Ready.pdf
This paper takes a look at the detailed picture of research trends in online banking
research. This article focuses specifically on using content analysis which gives us as writers of
potential research an in depth look at a efficient way to research online banking. The findings of
this research shows a correlation between the characteristics of online banking with the
characteristics of its adopters. The findings of the paper also concluded that more diverse topical
coverage and better methodological are need in future online banking research. This paper is so
useful for the research that we are doing because it gives us a look at options for future research
and ways that more concise and efficient research in this field can be completed.
The Medium of Electronic Banking Is a Message of a New Environment. The American Banker,
Retrieved from www.lexisnexis.com/hottopics/lnacademic
In this article it talks about how electronic banking is creating a new world for the
banking industry. It discusses how the bank is being brought to the customer instead of the

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customer coming to the bank. Also, the branch as we know it is dying out. Electronic
banking is replacing many of the bank branches functions, which in turn will cause many of
them to close. Change is happening quickly, and this can cause shock or fright to those in
charge of the banking industry.
This is relevant to our project because we are trying to find out what effects Ebanking has had on the banking industry and its clients.

(April 25, 2013 Thursday ). Transformation of banking system from brick-and-mortar to clickand-mortar business. Business Recorder, Retrieved from
www.lexisnexis.com/hottopics/lnacademic
This article discusses the transformation of brick and mortar banks to click and mortar
banks. Click and mortar banks are one hundred percent online offering all of their services
without the customer ever having to enter a physical bank branch. It also talks about how
banks are being forced to restructure or redesign in order to stay profitable.
This is relevant to our topic because it shows how E-banking is having a direct cause
on closing down physical bank branches

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