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Review of International Business and Strategy

A multi-analytical model for mobile banking adoption: a developing country


perspective
Sujeet Kumar Sharma, Srikrishna Madhumohan Govindaluri, Saeed Al-Muharrami, Ali Tarhini,
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To cite this document:
Sujeet Kumar Sharma, Srikrishna Madhumohan Govindaluri, Saeed Al-Muharrami, Ali Tarhini, (2017)
"A multi-analytical model for mobile banking adoption: a developing country perspective", Review of
International Business and Strategy, Vol. 27 Issue: 1, pp.133-148, doi: 10.1108/RIBS-11-2016-0074
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A multi-analytical model for Mobile


banking
mobile banking adoption: adoption

a developing country perspective


Sujeet Kumar Sharma and Srikrishna Madhumohan Govindaluri 133
Operations Management and Business Statistics, Sultan Qaboos University,
Muscat, Oman Received 11 November 2016
Revised 23 December 2016
Saeed Al-Muharrami Accepted 23 December 2016
Economics and Finance, Sultan Qaboos University,
Muscat, Oman, and
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Ali Tarhini
Information Systems, Sultan Qaboos University, Al Khoud, Muscat, Oman

Abstract
Purpose Mobile banking (Mbanking) is one of the most widely used mobile technology applications in
recent times. This research aims to develop and test a research model by integrating social influence, trust and
compatibility along with demographic variables into the original technology acceptance model (TAM) for
Mbanking adoption which can be useful for understanding individual behaviours from an international
business perspective.
Design/methodology/approach Data were collected through a structured survey from 208 Omani
Mbanking users and analysed using a two-staged regression and neural network (NN) model.
Findings The results showed that perceived ease of use and demographic variables were not statistically
significant in the multiple linear regression model, whereas the importance of the aforementioned variables
was relatively high in the results obtained from the NN model. Furthermore, other predictors, namely, trust,
perceived usefulness, compatibility and social influence included in the proposed research model that were
established as significant by the regression model were assigned high relative importance by the NN model as
well.
Practical implications The study reflects the customers opinion from a developing country
perspective. In addition, the research makes a significant theoretical contribution by using predictive
modelling instead of causal or explanatory modelling for the development of a new and extended TAM model.
The findings can be gainfully used by international business to understand Omani customer- and
design-appropriate strategies for market penetration.
Originality/value This study offers deeper understanding about Mbanking adoption from a developing
country perspective and identifies and integrates important variables that influence the adoption in the
aforementioned context.
Keywords TAM, Developing country, Mobile banking, Predictive modelling
Paper type Research paper

1. Introduction
The diffusion of information and communication technologies (ICTs) in global banking
industry has witnessed rapid growth in the past decade. These technologies are increasingly Review of International Business
being implemented for achieving competitive advantage through economies of scale and Strategy
Vol. 27 No. 1, 2017
resulting from larger customer base, personalization of banking services and reductions in pp. 133-148
operational cost (Laukkanen, 2016; Sharma et al., 2015). ICT implementations involve Emerald Publishing Limited
2059-6014
considerable expenditure of financial and human resources. To achieve better returns on DOI 10.1108/RIBS-11-2016-0074
RIBS these technology investments, modern banks attract customers by providing enhanced
27,1 service using technology and strive to increase the level of technology use by existing and
potential customers. Mobile banking (Mbanking) supports customers to perform various
banking activities using mobile devices. The term Mbanking refers to the banking activities
conducted through mobile internet technologies (Chong, 2013). The penetration of mobile
technologies has been quite rapid as compared to internet technologies because of the
134 portability of the device and widely available mobile and 3G networks that render Mbanking
more flexible (Chong et al., 2012). The availability of 3G and 4G networks has made
Mbanking an attractive option in Oman. In addition to the development in mobile
communication technologies, the increased range of products and services made available
through Mbanking delivery channels by banking industry, and greater attention to ease of
use and interactivity, has provided a further boost to Mbanking services. Moreover,
advances in smartphone technologies have attracted the attention of banking and
telecommunication industries which are increasingly partnering to enhance the Mbanking
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experience compared to traditional delivery channels.


Banking portals provide a number of services including money transfer, bill payment,
trading, loans and deposits. Despite the widespread implementation of these technologies by
major banking players across the world, the acceptance of these technologies is quite lower
than expectations. Moreover, adoption of these technologies is key to the achievement of
primary objectives of implementing these Mbanking technologies (Chong, 2013). In
developing countries, the introduction of Mbanking services was delayed by a few years as
compared to their launch in developed countries. A large proportion of the banking service
providers in the Gulf Cooperation Council (GCC) countries has implemented mobile
technologies for improved service delivery and customization. Nevertheless, banks continue
to face a challenging environment with respect to the adoption of the Mbanking technologies
by users, and the resolution of these problems in the emerging economies may entail
considerable time and effort. When compared to developed economies, where the issues have
been addressed to a greater degree, the rapid adoption of these technologies by developing
countries following the footsteps of developed economies, has not allowed enough attention
to tackle problems concerning mBanking technology acceptance. Research studies are
lacking with respect to developing countries and are much needed at this juncture (Kim et al.,
2009; Lin, 2011).
A review of the recent literature on mBanking showed that the majority of the existing
researches have generally focused on the technological aspects of mBanking (Luarn and Lin,
2005; Gu et al., 2009; Wessels and Drennan, 2010; Hsu et al., 2011; Aboelmaged and Gebba,
2013; Hanafizadeh et al., 2014). The majority of these research studies that examine user
behaviours in connection with information systems are based on the technology acceptance
model (commonly referred to as TAM) (Davis, 1989). Often, the TAM-based models used for
modelling user behavior are effective in establishing the causal explanatory models for
understanding the relationships between the dependent and independent variables
concerned. Shmueli (2010) and Chong (2013) point out the need to exercise caution in using
these causal explanatory models for predictive purposes and highlight the need for
developing predictive modelling approach. Further, the non-compensatory and complex
nature of users decisions with respect to the adoption of mBanking technologies may often
necessitate the use of nonlinear statistical methods (Chong, 2013).
This study has three objectives. First, the study intends to investigate the key factors that
predict the use of Mbanking adoption by extending the TAM proposed by Davis (1989) from
a developing country perspective. The TAM is extended by integrating additional variables,
namely, trust, social influence, compatibility and demographic variables. Second, this study
investigates the relationship between the dependent variable, adoption and other variables Mobile
using two methods, regression and neural networks (NNs), and compares these explanatory banking
and predictive modelling methods (Chong, 2013; Shmueli 2010). A large majority of empirical
studies in information systems use explanatory methods, for example, multiple linear
adoption
regression (MLR) model and structural equation modelling. The research study compares
the performance of the non-linear NN model with an MLR in understanding and predicting
mBanking adoption. Finally, this study examines the Mbanking adoption from a developing
country perspective. Furthermore, the primary focus of this study is to use predictive 135
modelling for Mbanking adoption, so there is no need to develop and test research
hypotheses.
This study is divided into five sections. In Section 2, the key literature of Mbanking
adoption, TAM, MLR and NN models are discussed. Section 3 includes research
methodology followed by the discussion of results in Section 4. Finally, the managerial
implications, limitations and future work are discussed in Section 5.
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Oman is an important country within the GCC. As per the 2011 census, its population is
3.77 million (Omani Ministry of National Economy, 2010). The major part of the Omani
economy comes from its oil and gas exports. The country has witnessed a rapid growth in its
information technology infrastructure subsequent to the launch of internet services in 1990s.
The proportion of internet users has grown steeply at a compounded annual growth rate of
27 per cent between 2000 and 2010 (Sharma et al., 2015). Oman has recorded a substantial
increase of more than 20 per cent in the number of active mobile broadband subscribers up
to November 2016 as stated by the National Centre for Statistics and Information (NCSI,
Oman). As per the report published by NCSI December 2016, the post- and prepaid mobile
connections in Oman are 612,226 and 6.22 million, respectively. These figures about the
penetration of mobile technologies are significant in justifying the interest and investments
in Mbanking in Oman.

2. Literature review
2.1 TAM and Mbanking adoption studies
Technology acceptance by individual users is a result of complex interaction between social
factors, psychological factors and the perceived efficacy of the system. Technology
acceptance by the user can be a major determinant of the success of the any major technology
implementation initiative. Early research in this area included models that sought to the
explain the technology acceptance using intention-based models, namely, theory of reasoned
action (TRA) (Fishbein, 1979) and theory of planned behavior (TPB) (Ajzen, 1991). Whereas,
TRA and TPB are important models that model behavioural intention, the TAM by Davis
(1989) is a model specifically designed to understand user intentions with regard to
acceptance of a technology. TAM adapts the TRA to explain technology acceptance by
explaining the attitude variable using two constructs, perceived usefulness (PU ) and
perceived ease of use (PEOU). The definitions of these two constructs are as follows: PU is
the degree to which a person believes that using a particular system would enhance his or her
job performance and PEOU refers to the degree to which a person believes that using a
particular system would be free of effort. A sample of empirical studies that tested TAM or
proposed and tested a modified TAM includes studies by Thornton and White (2001), Luarn
and Lin (2005), Cheng et al. (2006), Gu et al. (2009), Wessels and Drennan (2010), Hsu et al.
(2011), Tarhini et al. (2013, 2014a, b), Sharma et al. (2014), Mansour et al. (2016). TAM was
further extended by Venkatesh et al. (2003) by proposing the unified theory for acceptance
and use of technology (UTAUT) by adding elements from expectancy theory to the
intention-based models. The UTAUT 2 model proposed in 2012 by Venkatesh et al. (2012)
RIBS includes three new variables, hedonic motivation, price value and habit, and the model seeks
27,1 to explain the relationship of these variables with behavioural intention and technology use.
Following the success of online and Mbanking in developed countries, a number of
developing economies in the GCC undertook major initiatives for the establishment of a
digital banking infrastructure based on internet and Mbanking. The banks in the GCC region
are significant contributors to the global banking industry and have effected large-scale
136 investments towards implementing mobile communication technologies in banking.
Nevertheless, the number of research studies that focus on user acceptance of Mbanking in
GCC in general, and Oman in particular, is quite limited. Further, some of these studies relate
to m-commerce and internet banking. One of the often-cited studies with respect to internet
banking in the GCC region is the study of acceptance behaviours by Saudi Arabian internet
banking users (Al-Somali et al., 2009). Two studies that specifically investigated the
acceptance of internet banking in Oman include works by Riffai et al. (2011) and Sharma et al.
(2015). As regards, mobile technologies Al-Hinai et al. (2010) proposed a framework for
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m-commerce activities by individuals in Oman.

2.2 Proposed model


In this section, the structure of the proposed model is discussed. The proposed model is based
on modifications to the TAM model by adding independent variables: social influence,
compatibility, trust and demographic variables.
2.2.1 Trust. Trust is one of the important factors that can affect user behavior with
respect to adoption of banking technology and it relates to the security aspects of the
technology. Pavlou (2003) had defined trust as a belief that customers entrust upon online
retailers after careful consideration of the characteristics of retailers. This is more important
in banking, as the financial and personal information of the user can be exposed to high-level
risk in case of a security breach. Al-Ajam and Nor (2013) found that trust plays an important
role in internet banking adoption. Trust may be a reason for greater use of internet banking
as compared to mBanking for transactions involving sensitive financial information. The
perception of inferior security of mBanking compared to internet banking can be attributed
to the following reasons: mBanking is quite new compared to internet banking, there is
greater availability and awareness of security systems for desktops compared to
smartphones and control over information sharing is lower in case of mobile phones. The
higher level of perceived risk associated with mBanking relative to ordinary banking is
mentioned by Kim et al. (2009) and underlines the importance of individual trust as a key
antecedent in predicting M-banking usage. Customer trust in the mBanking technology
needs to be developed and maintained through a deeper understanding and mitigation of the
actual and perceived risks. The degree to which the user is willing to trust in spite of the
security and privacy concerns can depend on a number of variables. Hanafizadeh et al. (2014)
found trust to be an important antecedent explaining the adoption of mBanking. In this
research, trust is incorporated into the model for predictive purposes.
2.2.2 Social influence. Social influence is the degree to which others influence an
individual within his or her social environment. Family, friends or individuals who belong to
the same social groups as the potential adopter can exert social pressure. The uncertainty
involved in the adoption of a new technology can drive an individual to seek opinion or
advice from their social groups. As a result, the individual may rely less on his or her own
opinion and beliefs and also consider the psychological and social risks arising from social
interaction when adopting a technology. Social influence has been considered as an
antecedent to technology adoption in several research studies concerning adoption of
technologies (Venkatesh and Davis 2000; Venkatesh et al., 2003) discuss the role of social
influence in predicting behavioural intentions using the construct subjective norm. In the Mobile
mobile services context, subjective norm has been found to influence the use of mobile banking
commerce (Pedersen, 2005).
2.2.3 Compatibility. The compatibility of the Mbanking systems with the users banking
adoption
preferences can influence the degree of adoption. Compatibility is the degree to which the
Mbanking technology is consistent with existing values, needs and past experiences of
potential adopters (Rogers, 1995). This determines whether the technology fits well with the
different aspects of individuals personal and professional life. Koenig-Lewis et al. (2010) 137
conducted an empirical study of young Mbanking users and found compatibility to be an
important antecedent in predicting behavioural intention. Compatibility can be a significant
factor in terms of predicting the intention to use mobile commerce (Wu and Wang, 2005).
Further, a positive relation between higher level of compatibility and adoption can be
attributed to the reduced uncertainty and perceived risk.
2.2.4 Demographic variables. Demographic variables including gender, age and
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education level have been discussed in the literature in connection with adoption of
information systems (Chong et al., 2012; Chong, 2013; Sharma, 2015). These studies show
that demographic variables can influence the adoption of information systems both as an
independent variable or a moderating variable. For example, Riffai et al. (2011) found that
demographic variables such as age, gender and education play the role of moderating
variables in the trust-adoption relationship. On the basis of the literature discussed above,
the following research diagram is proposed as shown in Figure 1 below.

2.3 Multiple linear regression model


The MLR model attempts to develop the linear relationship between two or more
independent variables and a dependent variable using empirical data. Furthermore,
regression helps researchers in quantifying the amount of change in the dependent variable
due to change in independent variables. The objective behind using the MLR model in this
study was to obtain a research objective of the comparison of performance of the MLR model
and with the NN model (Sharma et al., 2015).
The regression model for p independent variables is as follows:

Yi 0 1Xi1 2Xi2 p1Xi,p1 i (1)

where, 0, 1, , p1 are parameters; Xi1 , Xi,p1 are known constants; and i is a


statistically independent error term with N(0, 2).
The sample regression equation for the proposed model in this study is as follows:

mBankingAdoptioni 0 1 PUi 2 PEOUi 3 Trusti


4 SocialInfluencei 5 Compatibilityi
6 Gender 7 Age
8 Education i,

where, i n

2.4 Neural network


The NN models are primarily forecasting models which are based on the mathematical
modelling of human brain. The NN models facilitate researchers to model complex
relationship between independent variables and dependent variables. An artificial NN is
RIBS
27,1 Social
Influence

138 Trust

mBanking
Adoption
Compatibility
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Perceived
Usefulness
Gender, Age, and
Educaon

Perceived
Figure 1. Ease of use
Research diagram

usually defined as a network composed of a large number of simple processors that are
massively interconnected, operate in parallel, and learn from experience (Specht, 1991). The
computational model embedded in this complex network is similar to human brain, as the
structure of the network enables acquisition of knowledge through training or learning
processes. A hidden layer feed-forward network with x1,xn as the inputs and yk as the
output involves application of synaptic weights to each input which are then transferred to
the neurons in the hidden layer. The output of NN is dependent on the weighted sum of inputs
and the nonlinear activation function and is given as follows:

yk ( w v ) (v)
kn k

where wkn is the synaptic weight between output of neuron k and input of neuron n and
(v) is the nonlinear activation function. The activation function used in the NN model was
Hyperbolic tangent (Sharma et al., 2015).
NNs have been used in several fields including stock markets (Shen et al., 2011), fraud
detection (Lei and Ghorbani, 2012), m-commerce (Chong, 2013) and internet banking (Sharma
et al., 2015). The main reasons for the widespread use of NNs include their ability to learn and
handle all types of data. Further, these models can be applied without making restrictive
assumptions regarding the distribution of the input data. NNs have been preferred over
traditional regression methods, as they are able to capture linear and nonlinear relationships
(Sharma et al., 2015). Applications of NNs are increasing in business research because of its
computational power, flexibility and ease of use (SPSS, 2010).
3. Research methodology Mobile
This study uses a research methodology that involves the application of NNs and MLR for banking
analysing the empirical data and comparison of the results obtained from the two models
with regard to the prediction of Mbanking adoption (Chong, 2013; Sharma et al., 2015).
adoption

3.1 Sample and procedure


The user behavioural data in terms of trust, PEOU, PU, compatibility and social influence 139
was captured using a survey questionnaire. The survey was developed in English and
Arabic languages. First, a pilot study involving 25 Mbanking users and five information
systems experts was conducted and the inputs from this study were used to make
modifications to the survey. The first question in the survey was used to verify whether the
respondent is an Mbanking user. Owing to the difficulties in obtaining a sufficient sample
size, a convenient sampling technique was adopted to distribute survey. The survey
conducted in May 2015 resulted in 208 usable responses, of which 58 per cent were male, 20
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per cent were less than 25 years of age, 50 per cent were between ages 25 to 35 years and the
remaining were above 35 years. Education of respondents was as follows: 54 per cent
respondents (bachelor degree or less), masters degree 41 per cent and remaining were PhDs.
The percentage of Omanis among respondents is 57 per cent. Based on the recommendation
by Hair et al. (2010), a minimum sample size of ten samples was achieved for each
independent variable.

3.2 Variables and measurements


The variables for determining Mbanking adoption used in this study were selected from
existing literature. For example, social influence (Venkatesh and Davis, 2000), PEOU (Davis,
1989; Mansour et al., 2016), PU (Davis, 1989; Sharma et al., 2015; Mansour et al., 2016),
compatibility (Wu and Wang, 2005), trust (Kim et al., 2009) and demographic variables
(Chong, 2013; Sharma et al., 2015) of Mbanking users. Three demographic variables were
included in the study, namely, Age, Gender and Education. Except for demographic
variables, the remaining determinants were measured on a five-point Likert scale ranging
from 1 (strongly disagree) to 5 (strongly agree). The measurements were obtained using 20
indicators for independent variables and 3 indicators for the dependent variable mBanking
Adoption.

3.3 Scale reliability and factor analysis


Consistent with other studies, the reliability of constructs was measured using Cronbachs
alpha (Hair et al., 2010). The summary of values of Cronbach alpha for all constructs is
provided in Table I. In line with the recommendations by Hair et al., (2010), the Cronbachs
alpha value for all constructs was above 0.70. The principal component method was used for
factor analysis to explain indicators validity along with the grouping of indicators into
useful factors. Principal components analysis is used for explaining the maximum variance
using minimum number of factors (Sharma et al., 2016). The optimization of the number of
variables with higher loadings on a particular factor was achieved using orthogonal
Varimax rotation; this aids in better interpretation of the factor. Moreover, orthogonal
rotation results in uncorrelated factors, allowing for the generalization of research findings
(Sharma et al., 2016). The validity of constructs was established using Hair et al.s (2010)
recommendation that suggests factor loadings of higher than 0.5 (Hair et al., 2010). A total
number of five useful factors were extracted when a factor analysis was performed on 17
indicators. The total variance explained was 70.59 per cent. The important results obtained
from factor analysis are summarized in Table I.
RIBS 3.4 Multiple linear regression analysis
27,1 The MLR model is used to determine whether an independent variable is statistically
significant in predicting the adoption of Mbanking. The relatively low value of coefficient
determination (R2 0.37) resulting from MLR computations indicated weakness of the linear
model, as the predictors explain only 37 per cent of the variability in the dependent variable,
mBanking Adoption. Therefore, a computational model, NN model that can capture the
140 non-linear nature of relationship, was used for modelling the mBanking Adoption and
decision variables. The comparison of the results from these two methods, MLR and NN
model, is discussed in the following section and the summary of MLR results is presented in
Table II. The regression results were presented using a 1 per cent level of significance; this
shows that SocialInfluence (beta value 0.409, p-value 0.01) is the most important
predictor of the adoption of Mbanking in Oman, followed by Trust (beta value 0.353,
p-value 0.01), Compatibility (beta value 0.218, p-value 0.01) and PU (beta value
0.171, p-value 0.01). The variable PEOU (beta value 0.086, p-value 0.01) and other
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demographic variables (for all, p-value 0.01) are not statistically significant at the 1 per
cent level of significance in the proposed regression model in equation (1). Furthermore,
tolerance is used in the regression model to test the multicollinearity, which can be defined as
the proportion of variability of each independent variable which is not explained by its
linear relationship with other independent variables in the model. The range for tolerance
varies from 0 (low) to 1 (high). A low value of tolerance implies high multiple correlation and
the possibility of multicollinearity (Field, 2009). In Table II, all values of tolerance for
independent variables are greater than 0.7, indicating lower chances of multicollinearity in
the proposed regression model. Variance inflation factor (VIF) in the MLR model is used as a
sign of multicollinearity. VIF is the reciprocal of tolerance (Field, 2009). All VIF values
(Table II) are not greater than 1.3, implying lower probability of multicollinearity and hence
justifying appropriateness of the MLR model in the context of predicting adoption of
Mbanking.

Constructs Items Factor loadings range Eigenvalues % of variance Cronbach alpha

PEOU 4 0.788-0.907 2.95 17.33 0.841


Table I. SI 4 0.685-0.824 2.60 15.32 0.822
Results of reliability Compatibility 3 0.759-0.856 2.33 13.70 0.781
and principal Trust 3 0.709-0.858 2.12 12.49 0.829
components analysis PU 3 0.679-0.778 1.99 11.74 0.798

Collinearity
Statistics
Model Beta values t-values Significance Tolerance VIF

PEOU 0.086 1.477 0.141 0.917 1.091


Social Influence 0.409 7.208 0.000 0.978 1.023
Compatibility 0.218 3.796 0.000 0.952 1.051
Trust 0.353 6.075 0.000 0.929 1.077
PU 0.171 2.962 0.003 0.947 1.055
Gender 0.071 1.141 0.255 0.816 1.225
Table II. Age 0.093 1.446 0.150 0.767 1.304
Regression results Education 0.013 0.226 0.822 0.909 1.101
3.5 Neural network results Mobile
The development and training of the NN model for the purposes of this study were performed banking
using Tiberius predictive modelling software. The multilayer perceptron training algorithm
was used for training. Precautions were taken to avoid overfitting using cross validation.
adoption
Further, the lack of a mathematical model or heuristic to determine the exact number of
hidden nodes in an NN model was tackled by using recommendations of Wang and Elhag
(2007), Chong (2013) and Sharma et al. (2015). In line with these recommendations, the NN
model was run by changing the number of hidden nodes from one to ten. Root mean square 141
error (RMSE) was used to measure the accuracy of the network model. Consistent with other
studies (Chong, 2013; Sharma et al., 2015), tenfold cross validations were used where training
to testing data points was set in the ratio of 70:30.
Three variables Age, Gender and Education were included in the input layer of the
network model along with the five covariates SocialInfluence, PEOU, PU, Compatibility and
Trust. The dependent variable mBanking Adoption which refers to adoption of Mbanking is
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included in the output layer of the network model. The RMSE (Table III) of the training model
was 0.334 and that of the testing model was 0.342, and the RMSE of the regression model was
0.807. Thus, it can be seen from the results that the NN model is a better choice than the
regression model.
The higher value of RMSE in case of MLR indicates that the non-linear NN model is able to
obtain a better fit in comparison with MLR. Further, the improvement in RMSE value when using
NNs may be attributed to the ability of the NN model to capture non-linear relationship of
independent variables with the dependent variable, mBanking Adoption (Figure 2).
A sensitivity analysis was performed wherein the average importance of the input
variables (independent variables) in predicting the output was calculated. These values are
useful to understand the relative importance of independent variables. The results showing
normalized values of relative importance are presented in Table IV. Using the values from
Table IV, the most important independent variable in predicting mBanking Adoption was
SocialInfluence, followed by Compatibility, PEOU, Trust, PU, Age, Gender and Education.
The normalized importance SocialInfluence was the highest (100 per cent), and the
normalized importance of Compatibility and PEOU was 80.7 and 73.5 per cent, respectively,
compared with that of SocialInfluence. The importance of these variables is also shown in
terms of weights in Table IV. Trust and PU were found to be equally important with only a
slight difference. This shows the importance of trust in a developing economy. The
demographic variables that were ignored by the regression model showed up as important

Artificial NN Training Testing

1 0.324 0.395
2 0.301 0.345
3 0.323 0.341
4 0.325 0.337
5 0.329 0.334
6 0.353 0.358
7 0.309 0.336
8 0.312 0.315
9 0.392 0.312
10 0.373 0.346 Table III.
Mean 0.334 0.342 RMSE for neural
SD 0.029 0.023 network model
RIBS Input Layer Hidden Layer Output Layer
27,1

x1

142 x2

x3

x4
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mBanking
Adoption
x5

x6

x7

x8

Figure 2.
Proposed neural Notes: x1: Social Influence; x2: Trust; x3: Compatibility; x4:Perceived ease
network architecture of use; x5: Perceived usefulness; x6: Age x7: Gender x8: Education

Variables Importance Normalized importance (%)

Social influence 0.191 100.0


Compatibility 0.153 80.7
PEOU 0.140 73.5
Trust 0.131 65.8
PU 0.121 65.3
Age 0.111 58.2
Table IV. Gender 0.082 43.2
Sensitivity analysis Education 0.069 36.3

predictors in the NN model results. The relative importance of these variables Age, Gender
and Education in comparison to the SocialInfluence was 58.2, 43.2 and 36.3 per cent,
respectively.

4. Discussion
The primary aim of this research was to investigate the factors influencing Mbanking
adoption and predict adoption using the key determinants based on an extended TAM
proposed in the paper. The comparison of the two methods showed that the NN model Mobile
performed better than the MLR model with respect to the prediction of Mbanking adoption. banking
The percentage of variance in the Mbanking adoption explained by MLR was as low as 37
per cent. This lower percentage of variance may be attributed to the inability of MLR in
adoption
capturing nonlinear relationships.
The NN model was able to capture the nonlinear relationship between the independent
variables and Mbanking adoption and it minimized the squared error by more than 50 per
cent. The results obtained from the NN model show that all the eight determinants (e.g. social 143
influence, compatibility, trust, usefulness, ease of use, gender, age and education) are
significant predictors of Mbanking adoption in Oman. In terms of relative importance, social
influence was the most important predictor of the Mbanking adoption. Similar results were
obtained with regard to social influence by Al-Somali et al. (2009) in a study conducted on
internet banking adoption in Saudi Arabia in GCC. This implies that the influence of social
groups, including peers and relatives, tends to influence the usage of Mbanking by
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individual users. Society in the Arab World in general and in Oman in particular plays a
major influence in individual behavior. The social bond is very strong in Oman because of
tribal strong bond among the tribe members which influences the decision taken by
individuals. Families bond and friends and peers bonds are also very influential on
individuals decision.
The next determinant or predictor in terms of relative importance was compatibility. Wu
and Wang (2005) reported a similar finding in an m-commerce study in which compatibility
was found to have the most significant influence on the intention to use mobile commerce.
The third important predictor was PEOU, a primary construct of TAM. This is consistent
with the findings of the study by Hanafizadeh et al. (2014) which established that PEOU
significantly influences the adoption of Mbanking. Independent variables Trust and PU are
also significant predictors of adoption of Mbanking. Therefore, individuals in Oman adopt
Mbanking to reduce uncertainty and risk. They are looking for technology that fits well with
different individuals needs and fits well with other technology. Also, they are selecting
technology that is ease to use and perceived to be useful. These predictors are important in
the studies related to information systems research (Al-Somali et al., 2009; Chong et al., 2012).
Among the three demographic variables included in the study of gender, age and
education, age was the most important predictor of Mbanking adoption, followed by
gender and education. The results associated with these three variables were able to show
the efficacy of NN over MLR. MLR results failed to support none of these as significant
predictors of Mbanking adoption, whereas the NN model supported that the three
demographic variables are significant predictors of Mbanking adoption. This may be
attributed to the nonlinear relationship between these variables and the dependent variable
mBanking Adoption which MLR model was not able to capture.

5. Managerial implications, limitations and future work


The testing of the proposed model suggested that social influence, compatibility, trust,
PEOU and PU are significant predictors of the intention to adopt by Omani Mbanking users.
The NN model also showed that the demographic variables, age, gender and education are
significant predictors of Mbanking adoption in addition to the aforementioned variables.
The study has several implications from a managerial perspective. First, the important
demographic variables can assist managers in market segmentation and designing tailored
marketing strategies for promoting Mbanking services in different market segments. The
results pertaining to demographic variables are thus useful in determining personalized
promotional strategies based on varying preferences of different demographic groups. For
RIBS example, the results show that age is the most important predictor of Mbanking. Younger
27,1 people are more inclined towards adoption of Mbanking than older people. Therefore, more
efforts should be invested in educating older people about the usefulness of Mbanking
application. Also, the design of the mobile service should be more inclusive to accommodate
users of a higher age. Similar argument can also be extended with respect to the gender, as
results show that women are less willing to adopt Mbanking compared to men. Therefore,
144 developers of Mbanking applications should focus on designing application that can include
customization of application depending on the age and gender of the customer. The third
demographic variable education also shows an influence on adoption. Individuals with lower
education are less willing to adopt Mbanking. However, banking organizations cannot afford
to ignore these customers, as they play an important role in the economy of a developing
country like Oman. Hence, strategies to attract these customers and support them are
important to increase overall adoption rates.
Second, the study is conducted in a developing country, Oman, where service providers
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have implemented Mbanking technologies anticipating the user penetration to grow at an


accelerated rate in the coming years. Currently, the user adoption of Mbanking in Oman can
be considered to be in the early stages, and the findings can prove to be useful to Omani
banks seeking to exploit these technologies as the primary driver of competitive advantage.
Overall, this study can be helpful for Mbanking professionals to enhance adoption of
Mbanking in Oman.
From a technical standpoint, the application of NN models enables prediction of adoption
instead of merely establishing a causal relationship. Common methods such as regression
are useful merely to explain the causal relationship. The application of two-staged NN
regression approach is a relatively new approach and can serve as a useful tool for future
research in the area of Mbanking adoption.
This study has multiple managerial implications from the international business
perspective. The primary findings such as the strong impact of social influence can also be
useful for international business seeking to establish technology-based s services and other
services in Oman. Social influence can be used gainfully by international businesses to
promote services in Oman and to a larger scale in GCC, as many countries in GCC have
similar components. However, Oman is slightly different in terms of the proportion of
expatriate population. The expatriate populations are high as compared to Saudi Arabia but
less as compared to countries in the United Arab Emirates. The Omani local population
(around 50 per cent) is much stable, whereas the expatriate population is less permanent but
quite well connected which is common for expats in many foreign countries.

5.1 Limitations and future work


The study has a few limitations. One of the main limitations is associated with the sample
size used in the study. Therefore, the results of the study may not be generalized to the entire
country. Further, the respondents of the study belonged to urban parts of Oman. However,
Oman has a sizeable portion of its population in rural areas. Hence, an expanded study that
combines data from both rural and urban area users and can be used as a basis for a
comparative study can be useful for gaining insights into the rural dynamics related to
Mbanking adoption. Last but not the least, Mbanking is a less mature technology that is
rapidly evolving. This evolution is because of growth in number of users, growth in the types
of services and changing modes of delivery. The evolution can result in changes to
acceptance and use behaviours. Hence, the use of a cross-sectional study can have its own
limitations. Therefore, a longitudinal study that compares the adoption of Mbanking
technologies over multiple time periods can be rewarding.
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RIBS Appendix
27,1
Mean SD

Perceived Ease of Use (PEOU)


148 I find it easy to complete my tasks using mobile banking 3.84 1.07
I found it easy to learn commonly used tasks in mobile banking 3.91 0.85
I find the mobile banking website clear and easy to interact 3.58 1.02
I expect to become skilled at mobile banking 3.83 1.10
Perceived Usefulness (PU)
I save considerable time and effort using mobile banking 3.65 1.12
I manage my banking tasks more effectively using mobile banking 3.89 0.84
Overall, I find mobile banking very useful 3.76 1.01
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Compatibility
Mobile banking is close to my life style 3.31 1.14
Mobile banking is compatible with the way I manage transactions 3.42 1.07
Mobile banking is compatible with my work style 3.19 0.92
Social influence
I use mobile banking on the recommendation of my relatives 3.72 0.98
I use mobile banking on the recommendation of my peers 3.89 0.92
Most people influence my decisions thinks I should use mobile banking 3.91 1.18
The use of mobile banking improves my status in society 3.17 1.23
Trust
The mobile banking site is trustworthy 3.54 1.03
The mobile banking site keeps customers best interest in mind 3.61 1.05
The mobile banking sites do not disclose my personal information 3.90 0.87

Table AI. Adoption


Descriptive statistics I plan to use mobile banking in future 3.85 1.24
of measurement scale I am using mobile banking 3.97 1.09
items I recommend use of mobile banking among peers and relatives 3.76 1.19

Corresponding author
Sujeet Kumar Sharma can be contacted at: drsujeet@squ.edu.om

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