Analysis of The Impact of Information Technologies on the Banks' Intermediary Business in China
Table of Contents
Chapter 1: Introduction3
Background of the study3
Problem Statement/Why topic chosen7
Purpose of The Research8
Aims and Objectives Of The Research9
Scope Of The Research Project9
Limitations Of The Work11
Outline Of The Dissertation/Project11
Chapter 2: Literature Review13
Chapter 3: Methodology48
Instrument48
Data collection and sampling50
Chapter 4: Results and discussion54
Chapter 5: Conclusion69
References/Bibliography79
Appendices105
Chapter 1: Introduction
Background of the study
Increasing competition in the financial services market requires banks to review and reconsider their marketing strategies for approaching customers (Daniel, 1999). In addition to physical branches, banks have to provide customers with alternative means of access to services and products - such as automatic teller machine, the telephone and the internet. These technologies are expected to bring, and in some cases have already had, profound effects to the market (Akinci et al., 2004; Lee et al., 2005; Lockett and Littler, 1997; Wan et al., 2005). They enable banks to increase efficiency and profitability and to address consumers' changing needs and lifestyles, improve customers' banking experiences and enhance interactivity. However, from the customers' perspective, alongside the potential benefits of using technology to deliver banking services, there can also be possible risks - resulting in resistance to adoption (Black et al., 2001).
Risk is a key construct in consumer decision making (Gabbott, 1991; Mitchell, 1998; Oglethorpe and Monroe, 1987). Consumers observe risk individually, handle risk differently, and respond accordingly (Ingene and Hughes, 1985). Much consumer decision making involves risks at different stages, e.g. before, during, or after purchase (Cunningham et al., 2005). Studying consumers from a perceived risk perspective not only helps understand their behaviour, but also highlights important marketing strategy implications.
In 1997, China Merchants Bank was first to launch the internet payment system in China and thereafter, the internet banking and telephone banking system spread rapidly within mainland China (Li, 2002).
Although the proficiency of using internet is relatively low and electronic banking is still in its infancy (AC Nielsen Consult, 2002), with the advantages of being convenient, safe, efficient and economical, Chinese domestic banks are confident that electronic banking benefits would outweigh traditional banking services in the future and therefore, are eager to implement the new technology and services in order to grasp, penetrate the market and gain competitive advantage (Li, 2002).
Most retail banks in China now provide online banking as add-on services to the existing branch activities while mobile banking is in the initial stage of implementation. According to the latter, the largest mobile banking network operator in China collaborated with three leading banks - Bank of China, Industrial and Commercial Bank of China and China Merchants Bank to implement this new service which has several advantages for customers - one, guarantee of safety of clients' funds. Two, the service can be accessed 24/7 and finally, a cheap going rate of 0.1 Yuan for every successful transaction plus no charges for unsuccessful transactions with the whole process taking a few seconds to complete after the user sends his message.
Since 1998, China's information technology developments including internet access ...