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Advances in Social Sciences Research Journal – Vol. 9, No. 5
Publication Date: May 25, 2022
DOI:10.14738/assrj.95.12121. Tahir, M., & Tummala, M. (2022). A Study of Factors Influencing Customers’ Adoption of Mobile Banking in Oman. Advances in
Social Sciences Research Journal, 9(5). 1-11.
Services for Science and Education – United Kingdom
A Study of Factors Influencing Customers’ Adoption of Mobile
Banking in Oman
Dr. Muhammad Tahir
Lecturer (HR), Business Studies Department
University of Technology & Applied Sciences, Nizwa, Oman
Dr. Mallesh Tummala
Lecturer (Marketing) Business Studies Department
University of Technology & Applied Sciences, Nizwa, Oman
ABSTRACT
The commercial banking sector in Oman is a dynamic sector with a large number of
banking service users. However, the customers’ adoption of technology in terms of
online banking and mobile banking remains less due to the various socio- demographic factors. Given the cost and operational benefits of mobile banking,
there is a need to understand how commercial banks can motivate non-mobile
banking users to adopt mobile banking in this context. Thus, the current study is
conducted with a view to understand customers’ adoption of mobile banking using
the Perceived Characteristics of Innovation model. The data is collected from the
commercial bank account holders who are non-users of mobile banking (n=80). The
key findings are that perceived ease of use (β=.487, P<.05); and observability
(β=.530, P<.05) positively and significantly influence customers intention to use
mobile banking; whereas, relative advantage (β=-.068, P>.05); compatibility (β=-
.413, P>.05); and trialabiltiy (β=.371, P>.05) exert insignificant influence on
customers intention to use mobile banking. Based on these findings, it can be
concluded that perceived ease of use and observability are key factors which
commercial banks need to focus to encourage customers to adopt mobile banking.
Keywords: Mobile Banking, Customers, Adoption, Online Banking, Ease of Use,
Observability, Intention, Oman.
INTRODUCTION
The advent of smart mobile phones has brought revolutionary changes in our life. The use of
smartphones is diverse from basic communication to the use of social media, conducting online
business, and availing of different services (Deloitte, 2012; Shaikh & Karjaluoto, 2015). One
such avenue which is changed significantly because of the smart mobile phone is the use of
banking services. The modern banking sector has invested heavily in mobile phone related- technologies to provide a variety of services to customers. The idea of mobile banking is that an
individual can access wide-ranging banking services using his/her smart mobile phone and a
bank application. Examples of such services include but are not limited to balance checking,
statement downloads, payment of utility bills, funds transfers, and so on. Mobile banking
accompanied by online banking offers greater flexibility for customers and cost reduction for
banks in terms of reduced staff requirements and physical infrastructure (Glavee-Geo, Shaikh,
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& Karjaluoto, 2017); therefore, the banking sector is persuading more customers to utilize
mobile-based banking. However, the adoption of mobile banking remains moderate in various
countries due to certain factors such as concern for privacy, security, and perceived risk
(Munoz-Leiva, Climent-Climent, & Liébana-Cabanillas, 2017). That’s why there is increased
interest in research about how banks can encourage customers to adopt mobile banking. In the
present study, this issue is investigated in the context of banking customers in Oman since there
is a scarcity of such studies in this context. Moreover, the country represents a setting where
almost all banks offer mobile banking facility and most proportion of the population has access
to mobile phone and internet services. Furthermore, a big proportion of citizens in Oman also
utilize various banking services either through a traditional bank or alternative channel.
Keeping in view this background and the literature gap, the objective of the study is to
investigate the factors influencing customers' adoption of mobile banking in the Omani context.
Our specific objectives are as follows;
• To measure the effects of relative advantage on the customer's adoption of mobile
banking
• To measure the effects of compatibility on the customer's adoption of mobile banking
• To measure the effects of the ease of use on the customer's adoption of mobile banking
• To measure the effects of trialability on the customer's adoption of mobile banking
• To measure the effects of observability on the customer's adoption of mobile banking
Significance of the Study
The significance of the study is that it fills the literature gap by investigating the adoption of
mobile banking in a new context i.e. Oman context. Second, it focuses on mobile banking which
is different from online banking which is mostly investigated in previous studies. Third, it uses
the perceived characteristics of the innovation model (Moore & Benbasat, 1991) which is
neglected in previous studies as most relevant studies used the TAM (Davis, 1989); or theory
of planned behavior (Ajzen, 1991) model. However, the limitation of such models is that it
rather focuses on behavioral aspect or technology aspects while the advantage of the perceived
characteristics innovation model is that it combines both types of factors thus having greater
flexibility and validity. The findings can be utilized by the banking sector to adjust its mobile
banking offering to attract more customers to adopt online banking. The findings can also be
utilized by future researchers, academic staff, and students.
LITERATURE REVIEW
Mobile Banking- an Introduction
Mobile banking refers to a channel whereby the customers interact with a bank via a mobile
device such as a smartphone or a personal digital assistant (Barnes & Corbitt, 2003). In other
words, mobile banking is about accessing banking services using a smart mobile phone or
similar device. Generally, mobile banking is considered an extension of online banking. A
customer can download mobile phone applications from a platform such as Google Playstore
or Apple Store and need some basic setup after which he/she can access banking services. The
benefit of mobile banking is flexibility as customers can access it at any time from anywhere
without the need to visit the bank branch. A customer only needs a smart mobile phone and
internet connection to access mobile banking services. However, due to the negative perception
and concern for security, many customers hesitate to adopt mobile banking (Lin, 2011).
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Tahir, M., & Tummala, M. (2022). A Study of Factors Influencing Customers’ Adoption of Mobile Banking in Oman. Advances in Social Sciences
Research Journal, 9(5). 1-11.
URL: http://dx.doi.org/10.14738/assrj.95.12121
Theoretical Aspects related to the Adoption of Mobile Banking
Various theories can be used to understand customers adoption of mobile banking such as the
theory of reasoned action (Ajzen & Fishbein, 1980); Diffusion of innovation model (Rogers,
2003); theory of planned behavior (Ajzen, 1991); technology acceptance model (Davis, 1989);
and perceived characteristics of innovation model (Moore & Benbasat, 1991). More specifically,
the TAM or technology acceptance model (Davis, 1989) focuses on two factors namely
perceived usefulness and perceived ease of use which together influence customers' adoption
of a technology or innovation. However, the model is criticized for its oversimplification and
ignorance of important factors such as the relevance of cost (Nysveen, Pedersen, &
Thorbjornsen, 2005). Another significant model which can be used for the adoption of mobile
banking is IDT which focuses on factors including relative advantage, observability, trialability,
compatibility, and complexity (Rogers, 2003). Since all models have their strengths and
limitations, therefore, no model adequately explains customers' adoption of mobile banking. In
the present study, we utilize the perceived characteristic of the innovation model which is an
extension of the diffusion of innovation model. It is based on five factors including relative
advantage, compatibility, ease of use, image, voluntariness, trialability, and observability.
Details are as follows;
Relative Advantage
Relative advantage refers to the convenience and saving of time and efforts for using a
particular technology (Moore & Benbasat, 1991). It is also about the perception that technology
or innovation is superior compare to the previous product or service from which it evolves
(Karjaluoto, Laukkanen, & Kiviniemi, 2010). In the mobile banking context, relative advantage
means customer ability to access their account details, ability to use a variety of services, and
easier execution of various tasks. Mobile banking can give a higher relative advantage to the
customers as customers can balance their work, family, and leisure time without the need to
visit a bank branch (Yu & Lo, 2007). Empirical work such as Payne, Peltier, and Barger (2018);
and Owusu, Bekoe, Addo-Yobo, and Otieku (2021) shows that relative advantage can exert a
significant influence on customers’ adoption of mobile banking.
Compatibility
Compatibility is about a match between a person's experience, way of doing, and technology
(Moore & Benbasat, 1991). If there is high compatibility between a person and a specific
technology, it will likely lead to the adoption of that technology by such individual; while, low
compatibility can be a barrier (Rogers, 2003). Compatibility is also found to be a significant
factor influencing customers' adoption of online banking in various contexts. For example, a
study by Lin (2011) reported that compatibility exerts a significant influence on customers'
adoption of mobile banking. Similarly, a study by Koenig-Lewis, Palmer, and Moll (2010) also
reported a significant influence of compatibility on customers' adoption of mobile banking.
Other studies also reported similar results (e.g. Sitorus, Govindaraju, Wiratmadja, & Sudirman,
2019; Mäenpää, Kale, Kuusela and Mesiranta, 2008)
Perceived Ease of Use
Ease of use refers to the degree to which a technology is perceived as easier or difficult to use
(Rogers, 2003). The perceived ease of use in the mobile banking context refers to the perceived
ease or difficulty regarding use of the online or mobile banking (Tan & Teo, 2000). If an
individual considers online banking easier, he/she will more likely to adopt compared to
someone who considers its usage as a difficult task. In this regard, a truly user-friendly website
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or mobile phone application is also important as it can shape the perception of ease or difficulty
of using mobile banking (Cyr, Head & Ivanoy, 2009). Previous studies such as Hanafizadeh,
Behboudi, Koshksaray, & Tabar (2014); and Sitorus et al. (2019) have shown that perceived
ease of use is an important factor in customers’ adoption of mobile banking.
Trialability
Trialability refers to the opportunity available to the users to test or trial a particular
technology before adopting it at full scale (Rogers, 2003). If users are given chance to test a
particular technology before adopting it at full scale, it increases the chances for its adoption as
it increases users' comfort with technology (Tan & Teo, 2000). In the mobile banking context,
it means a bank staff may provide a suitable demo to the prospect customers before customers
finally signup for mobile banking. Previous studies such as Changchun, Haider, & Akram (2017)
show that trialability exert a significant influence on customers' adoption of mobile banking.
Other studies also reported similar results (e.g. Elsaleh, 2020; Carmi & Drezner, 2019;
Makanyeza, 2017)
Observability
Observability refers to the chance to see the results or outcomes of using or adopting certain
technology (Rogers, 2003). Moore and Benbasat (1991) suggest that there are two sub- dimensions of observability including visibility and result demonstrability. Accordingly,
visibility is about the demonstration of the benefits of online banking using some sort of
advertisement or similar. Furthermore, result demonstrability is about results or outcomes of
using online banking which can be shown to customers with logical necessity. Previous studies
such as by Al-Jabri and Sohail (2012) reported a significant influence of observability on
customers' adoption of mobile banking. Other studies also reported similar results including
Iskandar, Hartoyo, and Hermadi, (2020); Odumeru (2013); and Iskandar et al., (2020)
Previous Studies on Adoption of Online Banking
Various studies used various models to understand the customer's adoption of online as well
as mobile banking in various contexts. For example, a study by Wu, Lin, Li, and Lin (2010) was
conducted a study about investigating factors influencing the adoption of online banking among
customers. The study reported that relative advantage, trust, and perceived ease of use exert a
significant influence on customers' adoption of online banking. In developing countries'
contexts, a study by Owusu et al., (2021) reported that perceived ease of use, perceived
usefulness, relative advantage, and complexity exert a significant influence on customers'
adoption of mobile banking. In the Middle Eastern context, a study by Al-Jabri and Sohail
(2012) investigated the adoption of mobile banking in the Saudi Arabian context. The study is
based on the diffusion of innovation theory to understand customers' adoption of online
banking. Key findings of the study are that relative advantage, compatibility, and observability
exert a significant positive influence on customers' adoption of mobile banking. Another study
conducted by Elsaleh (2020) in Lebanon shows that customers' adoption of mobile banking is
influenced by the ease of use, compatibility, and perceived usefulness. In the Oman context, a
study by Sulthana (2018) investigated the factors influencing customers' adoption of mobile
banking using the Unified Theory of Acceptance and Use of Technology (UTAUT) model. The
findings of the study are that factors such as social influence, facilitating conditions, personal
innovation, and effort expectancy influence customers' adoption of mobile banking. Another
study by Sharma, Govindaluri, Al-Muharrami, and Tarhini (2017) showed that trust, social
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Tahir, M., & Tummala, M. (2022). A Study of Factors Influencing Customers’ Adoption of Mobile Banking in Oman. Advances in Social Sciences
Research Journal, 9(5). 1-11.
URL: http://dx.doi.org/10.14738/assrj.95.12121
influence, compatibility, and perceived usefulness influence customers' adoption of mobile
banking in Oman. Another study by Imtiyaz and Molla (2004) mostly focused on online banking
shows that compatibility, usefulness, and ease of use are important factors for customers to
adopt online banking. Overall, there is a shortage of mobile banking and online banking
adoption-related studies in Oman, therefore, we investigate this issue. Based on the previous
studies and utilizing the perceived characteristic of the innovation model (Moore & Benbasat,
1991) we propose the following theoretical model and the relevant hypotheses.
Figure 1: Theoretical Framework of the Study
Hypotheses
H1: There is a significant effect of perceived relative advantage on customers' adoption of
mobile banking.
H2: There is a significant effect of perceived compatibility on customers' adoption of mobile
banking.
H3: There is a significant effect of perceived ease of use on customers' adoption of mobile
banking.
H4: There is a significant effect of perceived trialability on customers' adoption of mobile
banking.
H5: There is a significant effect of perceived observability on customers' adoption of mobile
banking.
RESEARCH METHODOLOGY
Research Design
The study is quantitative in nature and the design of the current study is cross-sectional and
explanatory. By cross-sectional means single-time data collection from the participants. By
explanatory design means we are explaining the relationship between independent and
dependent variables.
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Tahir, M., & Tummala, M. (2022). A Study of Factors Influencing Customers’ Adoption of Mobile Banking in Oman. Advances in Social Sciences
Research Journal, 9(5). 1-11.
URL: http://dx.doi.org/10.14738/assrj.95.12121
Shaikh, A. A., & Karjaluoto, H. (2015). Mobile banking adoption: A literature review. Telematics
and Informatics, 32(1), 129–142.
Sharma, S.K., Govindaluri, S.M., Al-Muharrami, S. and Tarhini, A. (2017). A multi-analytical model for mobile
banking adoption: a developing country perspective. Review of International Business and Strategy, 27(1), 133-
148. https://doi.org/10.1108/RIBS-11-2016-0074
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