Effectiveness Of Online Banking To The Small Entrepreneurs In Malolos City, Bulacan.docx

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction Today’s world may be described as one with increasing online access to services. One part of this rapidly growing online services is online banking. Combined with online retailers there has been a lot of money changing hands, directed only by communication over the Internet. This is very convenient and made possible through the ready accessibility of Internet in all first-world countries. This thesis is a discussion of how effective online banking is to small entrepreneurs in Malolos City, Bulacan. The advancement of online banking or commonly known as e-banking, began with the use of automatic teller machines (ATMs) and included telephone banking, direct bill payment, electronic fund transfer, online banking and other electronic transactions. For many people, they believed that e-banking paved the way to the direction of mobile banking. Also, some people believed that online banking has become the most popular method of banking (Monilla, 2011). Online banking has sometimes been defined as the provision of retail and small value banking products and services through electronic channels either

1

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION through mobile devices, Automated Teller Machines (ATMs), or even the internet. Also it has been often used to describe processes in which customers could perform banking transactions without visiting a physical institution. In the Philippines, online banking made an auspicious debut when automated teller machines (ATMs) were introduced in the 1980s revolutionizing how people viewed the usual, brick-and-mortar bank structure. Today, ATMs has become a common customer delivery channel that could be found mainly in urban centres through sometimes, even in the countryside. Aside from ATMs, other innovations have taken place such as phone and internet banking which again provided customers with the ability to access banking services from various locations and at a 24-hour by 7- days basis. With these developments, customers are able to enjoy the many conveniences and lower costs of transaction that are offered by the said innovations. In the face of the conveniences offered by online banking, several major challenges and issues need to be addressed with regard to the growth of e-banking and the e-business in general. The researchers aimed to determine the problems that maybe encountered in e-banking. In this paper, the researchers covered issues on exactness, competitiveness, promptness and confidentiality of ebanking as well as its effect on small entrepreneurs in Malolos City. The study showed how online banking services was able to attract customers and discussed the requirements needed before e-banking services could be availed of by the customers. Online banking is one of the first things that

2

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION come to mind when thinking about the future of banking. It is generally assumed that online banking is relatively new and that it replaced or supplemented many channels of delivery of retail banking services. The term online banking as used here, refers to any banking activity that is accessed by electronic means. It includes automated teller machines (ATMs), automated call centers, digital cash, Internet banking, screen telephones, and so on. These channels of delivery can be used for presenting and paying bills, buying and selling securities, transferring funds, and providing other financial products and services. Banking has never been more important to our society than it is today. The advances in communication and computer technology and the availability of the Internet has made it possible for one can to conduct most banking transactions from a remote location even without stepping into a physical financial structure - that was how ebanking emerged. Online Banking has opened up a number of services both to the general public and the banking industry. It has resulted in the creation of a better enabling environment that supports growth, productivity and prosperity. Furthermore, Ebanking has helped banks in the better monitoring of their customer base. This has been a useful tool for banks to device suitable commercial packages that are in conformity with customer needs. As e-banking provides an opportunity to the banking sector to enlarge their customer base, this in turn increases the volume of credit creation which results in better economic condition. Apart from all this, Ebanking has also helped in the documentation of the economic activity of the

3

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

4

masses. The Internet makes it possible to bring both customers and suppliers together. Through online banking the company can show the clients that they are better than their competitors and can guarantee to give them satisfaction for their services. Filipinos have time and again basked in the distinction of being some of the most technology-savvy people in the world, readily snapping up and testing new ways of doing things. But the banking industry in the Philippines forms one of the most conservative sectors in society, treading only very carefully on new trends. Internet banking identifies a particular set of technological solutions for the development and the distribution of financial services, which rely upon the open architecture of the Internet. With the implementation of an Internet banking system, the banks maintain a direct relationship with the end users via the web and are able to provide a personal characterization to the

interface,

by offering additional customized services. The researchers were concerned about the issues of online banking affectivity presented in this study. This is because the researchers believe that these issues are very important and relevant today. A lot of people save money and entrust the banks with their hard-earned money. In addition, the researchers want this research paper to be read by many students who are not too familiar with certain issues about online banking. Lastly, the researcher provided and

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION recommended different solutions about the issues discussed regarding Online Banking.

Statement of the problem The study of the effectiveness of online banking to small entrepreneurs in Malolos City attempted to answer the major problem: How effective is online banking to small entrepreneurs in Malolos City? Specifically, the study attempted to answer the following questions: 1. What are the online services availed of by small entrepreneurs? 2. What is the satisfaction level of the small entrepreneurs in Malolos City in terms of a set of characteristics of online banking? 3. How will the effectiveness of online banking in Malolos City be rated in the terms of Exactness, Competitiveness, Promptness, and Confidentiality?

Significance of the study This study aimed to contribute information about online banking. The researchers intended to find out how effective bank services were to small entrepreneurs in terms of the service offered. This focused on exactness, competitiveness, promptness, accuracy, and confidentiality. To Customers or Small Entrepreneurs. They were becoming more sophisticated, and banks needed to respond to this growing use of technology to

5

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION keep up with the entrepreneurs’ requirements. A research base on electronic banking has been chosen because it was noted that while a considerable number were already aware of this technology, there remains a good number who were not that aware of electronic banking and its services, which was unfortunate considering the usefulness and importance of e-banking in this date and time. This paper would find out if entrepreneurial online banking was in any way related to some of the problems encountered by the small entrepreneurs, or if online banking contributes to the solution of some of their problems. To Banks. In the study, banks operationalized their Internet banking as a bundled centralized service rather than a distributed service. The researchers examined the factors that affected the adoption of online banking in Malolos. Perceived usefulness, perceived ease of use, trust, and government support were examined as the factors to the effectiveness of online banking adoption. To Government agencies. They had started to recognize the value of e-banking in improving the efficiency of revenue collection and other transactions with the public. Thru the internet, the Bureau of Internal Revenue (BIR) embarked on electronic tax filing and payment project that involved the electronic processing and transmission of tax return information and taxes due. The Bureau of Customs has also been a proactive innovator in this area as it moves to fully convert to electronic collection of duties at all ports of entry. The SEC has likewise embarked on an electronic corporate registration process linked to a local bank electronic

6

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION platform. Other government agencies are likewise moving in this direction to collect fees. To Future researchers. This work of knowledge can be used as reference of future researchers. They can also use this study as reference materials for replication in another location, or simply a relevant study to researcher aligned with this study.

Scope and Delimitation of the study The focus of this study was mainly based on determining on the effectiveness of online banking services to small entrepreneurs in terms of exactness, competitiveness, promptness, accuracy, and confidentiality. In this regard, a survey form was used to find out if the small entrepreneurs in Malolos City find online banking services effective to their business needs. The online banking services include payments of bills, account inquiry, fund transfer, reloading, processing payroll, payment to suppliers, and ATM checking. The study was conducted from June to September 2014. The researchers conducted the survey among selected small entrepreneurs in Malolos City that used online banking, particularly in highly commercialized location in McArthur Highway, Cabanas, Robinsons and Malolos Poblacion.

7

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

Chapter 2

THEORETICAL FRAMEWORK

Relevant Theories The Innovation Diffusion Theory (IDT) explains individuals’ intention to adopt a technology as a modality to perform a traditional activity. The states that the critical factors that determine the adoption of an innovation at the general level were the following: relative advantage, compatibility, complexity, trial ability and observability (Rogers, 1995). Several researchers tested the theory on e-banking adoption that resulted in nominalized factors of complexity, triability and observability (Tan and Teo, 2000; Gerrard and Cunniham, 2003; MdNor and Pearson, 2008). The Innovation Diffusion Theory has a bearing in the present study to explain the adaptation process in new technology such as e-banking. In the Theory of Reasoned Action (TRA) (Bein, 1980), a discussion on technology adoption research studies using this theory were enumerated. According to this theory, an individual’s intent to adopt an innovation was influenced by his attitude toward the behavior and subjective norm. Subsequently,

8

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION a person’s behavior was determined by his intention to perform the behavior. The attitude toward performing the behavior was an individual’s positive or negative belief about the performing the specific behavior. In fact, attitudes were comprised of the beliefs a person accumulates over his lifetime. These beliefs were created from experiences, outside information, or from within the self. Only a few of these beliefs, however, actually influence attitude. On the other hand, subjective norm are beliefs about what others thought about the behavior; in other words it is the perceived influences of social pressure on an individual to perform or not perform the behavior. “The person’s belief that specific individual or groups think he should or should not perform the behavior and his motivation to comply with the specific referents as proposed that variables not included in the model can affect intention and then behavior. This theory was related in the present study because online-banking consumers’ repetitive performance of any action such as using online-banking is based on the positivity or negativity on the performance of the said behavior. The Theory of Planned Behavior (TPB) was one of the most widely used models in explaining and predicting individual Behavioral Intention (BI) and acceptance of IT. The TPB proposed that an individual’s intention to perform an act was affected by his attitude toward the act, subjective norms and perceived behavioral control. According to TPB, an individual’s behavior was determined by BI and perceived behavioral control. And BI is determined by attitude toward behavior (A), subjective norm (SN) and perceived behavioral control (PBC).

9

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Attitudes toward behavior reflect one’s favorable or unfavorable feelings of performing a behavior. Subjective norm reflects one’s perception of others’ relevant opinions on whether or not he or she should perform a particular behavior. Perceived behavioral content reflects one’s perceptions of the availability of resources or opportunities necessary to perform a behavior (Sadeghi, 2011). Theory of Planned Behavior like Theory of Reasoned Action were used to explain one’s favorable and unfavorable feelings in using online banking. Some researchers and practitioners have widely used the Technology Acceptance Model (TAM) to help predict and make sense of user acceptance of information technologies. TAM, introduced by Davis (DATE), adapts the TRA model, specifically to model user acceptance of information technology (IT). The goal of TAM was to explain what determines computer acceptance capable of explaining user behavior across a broad range of end-user. TRA model was used to explain the evolution of banking and the acceptance of users on new technology. The Decomposed Theory of Planned Behavior (DTPB) postulates that the intention to use a certain technology was influenced by attitude, subjective norm and perceived behavioral control (Taylor and Todd, 1995). Starting from the research conducted by MdNor and Pearson (2008), Karahanna, Straub, and Chervany (1999), certain influencing factors were selected: the attitude toward behavior and the Perceived Behavioral Control.

10

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION This theory was used in order to explain that consumers prefer a technology that could be easily controlled such as e-banking, (which can be controlled even at home).

Related Literature The value of the uses, gratifications and categorization system, which provided a key platform to the study of e-service quality and offered e-banking providers a more effective system of serving individual customer e-service needs is discussed. Online banking providers can make the process of using e-banking more enjoyable by enhancing website interactivity and creating unique online experiences. Future e-banking penetration and the success of complex financial product adoption will be dependent on proactive online marketing campaigns coupled with increased website responsiveness (Loonam and O’Loughlin, 2008). Loyalty of e-banking customers is directly affected by satisfaction and trust in an online bank, which in turn are determined by Website quality and service quality (Floh, 2006). First, the quality of Web sites has a direct and an indirect impact on both satisfaction and trust. Companies has to redesign their Websites with a view to enhancing usability and usefulness. Amongst the many factors which account for the perceived quality of a Web site, the avoidance of downtimes seems to be extremely important to online banks.

11

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION The literature relating to various aspects associated with actual adoption and usage of e-banking/internet banking was reviewed. Within the Internet banking adoption context, researchers has indicated various determinants or drivers that had a positive effect on adoption decisions. For example usefulness, compatibility, self-efficacy, relative advantage, visibility and trial ability were a few. Many law firms manage their trust and regular bank accounts on the Internet. Some firms have the ability to initiate various banking transactions online, including account transfers and wiring funds. While the convenience and efficiency of online banking have huge benefits, the downside is that online banking exposes you to security risks (Pinnington, 2014). The steps outlined below was from an actual study that helped law firms understand, address and reduce online banking risks – for both your firm and personal accounts. In particular, make sure you were familiar with the notice requirements for unauthorized transactions, and who was responsible for unauthorized transactions. In most circumstances, unless in specified and usually narrow circumstances you give prompt notice to the bank. If hackers ever managed to get into your account, the ability to access multiple accounts or to initiate transfers or send wires could allow them to easily remove funds from your account. If you don’t intend to use your online banking facility for these types of transactions, has this functionality removed from your account. Check your online bank account every day by monitoring your daily account activity, you’ll be able to promptly identify any unauthorized transactions or other indications that your account has been hacked. Check the last login time and make

12

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION sure it was consistent with the last time someone from your office accessed the account. Immediately report suspicious or unexplained activity to your bank. New Information technology has taken an important place in the future development of financial services, especially banking sector, which transition were affected more than any other financial provider groups (Chavan, 2013). Increased use of mobile services and use of internet as a new distribution channel for banking transactions and international trading requires more attention towards e-banking security against fraudulent activities. The development and the increasing progress that was being experienced in the Information and Communication Technology has brought about a lot of changes in almost all facets of life. In the Banking Industry, it has been in the form of online banking, which was now replacing the traditional banking practice. Online banking has a lot of benefits which add value to customers’ satisfaction in terms of better quality of service offerings and at the same time enable the banks gain more competitive advantage over other competitors. There were not many inventions that had changed the business of banking as quickly as the e-banking revolution. World over banks were reorienting their business strategies towards new opportunities offered by ebanking. E-banking has enabled banks to scale borders, change strategic behavior and thus bring about new possibilities. The e-banking revolution has fundamentally changed the business of banking by scaling borders and bringing about new opportunities. It has strongly impacted the strategic business considerations for banks by significantly cutting down costs of delivery and transactions. One of the

13

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION benefits of the banks using online transaction was the customer satisfaction. This due to that customers may access their accounts whenever, from anywhere, and they get involved more, this creating relationships with banks. Banks should provide their customers with convenience, meaning offering service through several distribution channels (ATM, Internet, physical branches) and has more functions available online. Other benefits were expanded product offerings and extended geographic reach. With all these benefits banks can obtain success on the financial market. A bank which would not ensure that information pertaining to its customer's finances that should be kept secret would very soon acquire a bad reputation and would thus lose the public's trust (Alhosani, 2011). The second argument relates to the sensitive nature of business information. It was easy to imagine circumstances where a bank engaging in divulging confidential information would place the customer at risk from competitors. This was particularly so as information about a business has an intrinsic market value and of course the value increases where confidential information was concerned. Recently, economic factors had been given great attention with respect to policy considerations and in certain circumstances, the duty of secrecy has been treated as having less importance than the country's interests. In the internet age, the issue of secrecy has also been heightened, especially since bankers hold a considerable amount of personal information about a customer on their databases. Third parties can 'hack' into banks' computer databases, especially if a customer makes use of internet

14

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION banking and there was thus a real risk of third parties obtaining personal information. By using e-banking, SMEs can apply online for lines of credit, credit cards, loans and mortgages, hence, less visit was required to banks for doing banking transactions (Purcell and Toland, 2009). Han (2008) also found the favorable impact of the application of informational technology on SME finance. Adoption of Internet banking from consumers perspectives and found that Normative and coercive pressure significantly influence the attitude and intention to adopt of Internet banking avoiding to a study on the adoption of Internet Banking as perceived by consumers (Shi et al., 2008). Online banking allows both SMEs and financial institutions to lower transaction cost and save time to SMEs and creates more business and ensure better customer relationship management to financial institutions (Han, 2008). Therefore, pressure may come from banks to SMEs to adopt online financial services. In Bangladesh, SMEs owners had to visit on an average of 15 times to their lender for a single loan (Rikta, 2007). Customers are found to prefer e-banking for conveniences, speed, round the clock services and access to the account from any parts of the world. E-banking

15

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION offers benefits to banks as well. Banks can benefit from lower transaction costs as e-banking requires less paperwork, less staffs and physical branches (Chen et al., 2006). Online SME businesses are more profitable and produce higher revenues, than SMEs that use only traditional channel. Through Internet, SMEs can do research on banking products, interest rates, terms, and then choose lenders that best fulfill their expectations and needs (Wendell and Williams, 2004). E-banking leads higher-level of customers’ satisfaction and retention (Poatoglu and Ekin, 2004). Wang and Cheung (2004) found that coercive pressure has influence on travel agencies’ adoption of e-business. E-banking reduces loan processing time as borrowers loan application can be viewed by loan processing and loan approval authority simultaneously (Smith & Rupp, 2003). Typically, loan applications received at branch level and send to head office for approval. In technology diffusion, the role of institutional involvement has been described and acknowledged in various literatures (Tornatzky and Fleischer, 1990; King et al., 1994; Andersen et al., 2003).

16

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Andersen et al (2003) also acknowledged the role of information infrastructure (telecommunication, wireless and Internet infrastructure, technology acceptance) and roles of government and private sectors in technology adoption. Damsgaard and Lyytinen (2001) mentioned that institutional involvement was imperative in the technology adoption and such institution contains governmental agencies, national and global standardization organizations, local government, and nonprofit organization like industry association. King et al (1994) mentioned that six types of institutional intervention can stimulate IT adoption by firms. These were knowledge building, knowledge deployment, subsidy, mobilization, standard setting, and innovation directives. Institutions can influence in several ways in IT adoption, like through enacting rules and regulations or through creating demand for innovative product and processes.

Related Studies The review of the related studies is an essential part of any investigation. The survey of the related studies is a crucial aspect of the planning of the study. One such study said that banks had continuously pointed out that the lack of credit information has deterred them from lending to SMEs. Without the necessary credit information, it was difficult to determine creditworthiness of borrower firms. Banks were also concerned about the bankability of MSMEs and high risks involved in

17

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION MSME lending given that many MSMEs had limited management and financial capability (Aldaba, 2012). Another study found out that all of the participants using internet banking to make different transactions such as payments of utility bills. Participants were using this service by using different devices such as Personal Computer (PC), Laptop and Mobile phone i.e. iPhone etc. Among 13 participants there were 3 users who were using their smartphone (iPhone) to use this service, while remaining were using laptop and PC. So in order to discover variation in pattern of adoption of this service we decide to choose this service in our empirical study. Age and gender does matter a lot for making positive or negative attitude for technology. According to our analysis if people had positive attitude about technology they had less technology adoption hesitation and vice versa. This dissertation was so helpful for the researcher because they really had a lot of quantitative approach for the empirical study. The information helped them to identify the possible variable. The study also shows the usual transaction and scenarios for a specific customer which helps them to understand the situation in having a problem about the transaction in online banking (Bashir and Albarbarawi, 2011). Tools make it possible for the customers to create and maintain their own financial budgets via e-Banking facility. By using this tool, customers can share their financial information with bank advisor; this has help advisory service to make decisions based on actual fats while previously it was based on manual entries.

18

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Here were some of the Online module of e-Banking were to View Balance and entries, Make payments to creditors and order cheques, Accounts/payment types, Domestic Accounts, Domestic Payment, International payment, Connections, File Transfers, Flexible payment (Ahmed, 2009). The study shows the different online transaction of a bank can offer to their customers. The study was very informative because of the overview of transaction, localization of transactions, real time overview of liquidity position, and organizational activity. In accepting the internet and maximizing its potential, there were several stages that firms evolve through that involve different roles. These different stages of changes were reflected in the many levels that were present when firms go through the adaptation of new technology. These stages, whether for a matured firm or a firm in the introductory stage, would also apply to a bank adapting or using IB.A system that satisfies users‟ needs reinforces satisfaction with the system and was a perceptual or subjective measure of system success. Similarly, usage of a system can be an indicator of information system success and computer acceptance in some cases. Whether the system was regarded as good or bad depends on how the user feels about the system. Especially if the users do not rely on the system and its information, their behavior toward the system could be negative (Hosein, 2009).

19

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION According to Hemmasi, Graf and Winchell (2009), it is reasonable to expect that the differences in quality of service requirements among various types of businesses would be minimal and not nearly as pronounced as was the case regarding product/service needs. When the data is stratified based on industry type, the results did in fact support this expectation. Small businesses operating in different industries, with few exceptions identified virtually the same banking service attributes as the ones they would consider most important to them when selecting a bank to do business with. Specifically, confidentiality of client information topped the list for all businesses with the exception of manufacturing firms. The latter group rated "being a reliable source of credit" as the most important factor to them; confidentiality did not appear even in their top-five list. Also, having competitive service charges was included in the top-five list of all firms with the exception of construction companies. Further, while medical/dental offices were the only businesses that identified "consistency in credit decisions" as one of the five most important service attributes to them, "competitive loan rates and terms" was the item that was included only in the top-five list for wholesale/distribution companies. The results of this study helped banks better understand the true banking and financial needs of entrepreneurs and small firms. This should assist them to more effectively serve and meet the needs and concerns of this important segment of their banking market. Further, the study results provide financial institutions with the ammunition they need to better assess their own strategic strengths and weaknesses, identify positioning gaps in their

20

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION commercial markets, and seek and secure a stronger competitive position vis-avis their rivals in those markets. The related information provided in this study could go a long way in helping banks and financial institutions to not only do a more effective job of segmenting their small business market, but also more effectively differentiate and promote their products/services to their small business clients (Hemmasi, Graf and Winchell, 2009). The 1980s witnessed a marked shift in the banking services distribution channels due to the emergence of new technologies that simplified remote access to banks i.e. telephone banking, ATMs, debit cards, access via proprietary software installed on PCs, internet banking, and mobile banking. Given the information-intensive nature of its operations and services, the banking sector was relatively amenable to innovative technologies (Polasik and Wisniewski, 2009). With the development of asynchronous and secure transaction technologies, an increasing number of banks worldwide were broadening their service capabilities and reaching out to their customers by offering low-cost, self-service automated channels, i.e. Internet Banking (IB) as a transactional and informational medium. Although decisions about integration of technology in financial services delivery were made at corporate level, the availability of new and complex technology such as IB does not necessitate the level or magnitude of change. A critical aspect illustrating successful implementation was the acceptance of this technology at individual level i.e. customers‘adoption pattern. In order to be successfully adopted and utilized, IB must offer clear-cut benefits for users (e.g. how easy or useful it

21

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION was to use or how compatible it was with an individual‘s lifestyle and past experiences).Furthermore, benefits were seen as a necessary but alone were insufficient conditions toward understanding IB behavior. The following points characterize IB as a complex and innovative technology: (1) IB requires an interaction between an innovative medium of service delivery (Internet) and an intangible service (high in credence qualities); (2) IB relies on an advanced telecommunication infrastructure (PC, Internet, and Mobile phone), which creates dependencies with other components of the technological system availability and experience with such technologies; (3) The complexity of IB can create learning barriers; and (4) The successful implementation of IB requires a considerable user mass to be efficiently deployed.

Background of the Study Bank Institutions are now making it much more convenient for customers to transact business by providing easier and more extensive access to statements and transaction history online. The rise of smart phones has seen a new age of hand-held, on-the-fly banking emerge. Smart phones and, in particular, Apple iPhones, had made banking on-the-go a reality. The easy-to-use applications means being stuck at the checkout with money in the wrong account was a thing of the past. The technology was there to make it happen and most people were now used to banking online.

22

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

23

Making the process as simple and streamlined as possible was a win for the people in Bulacan. In Malolos City, Bulacan there are a lot of banks that uses online banking for the customer convenience and access. Whether you like it or not, there are a lot of situations that arise requiring one to go back over the banking transactions. Even though the online banking has many perceived advantages, there are still lots of businesses not availing of its services.

Conceptual Framework Figure 1 shows an Input-Process-Output Diagram showing the Inputs which was quality of online banking services. The researchers used survey, tally, and data processing and statistical treatment as their process in order to know the perceived output which was ease of online banking for small businesses. Input

Process

Survey Quality of Online Banking Services

Tally Data Processing and Statistical Treatment

Output

Ease of Online Banking on Small Businesses

Figure 1. Schematic Diagram of the Conceptual Framework

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Definition of Variables Accuracy. It refers to the quality or state of being correct or precise. ATM Checking. It refers to accessing ATM account through Automated Teller Machine either to withdraw or check savings. Checking of Balance. It refers to accessing account either online or by ATM to check savings. Competitiveness. It pertains to the ability and performance of a bank service in relation to the ability and performance of another bank’s service. Confidentiality. It means keeping information of online banking users safe and private. Exactness. It means the quality of being accurate or correct. Payment of Bills. It refers to payment of bills using online banking wherein there was no tangible change of cash; which was done online. Payment to Supplier. It refers to a payment method wherein payments to supplier were paid online and can be modified for automatic or regular transfer of funds. Payroll. It refers to payment for monthly salary in employees’ bank account. Small businesses. It refers to business with 10 – 99 employees or assets more than P3,000,000 but not more than P15,000,000. Transfer of Funds. It refers to transfer of funds without tangible exchange of account; actual transfer was done in the internet.

24

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

Chapter 3

RESEARCH METHODOLOGY

Methods and Techniques of the Study The researchers of this thesis used a quantitative method approach for achieving the purpose of the study. Quantitative research approach was based on the development of testable hypotheses and theory which can be generalized across settings. Quantitative investigations tend to measure “how often” or “how much”. This approach allows generalization of conclusions and flexibility in the treatment of data, in terms of comparative analysis, statistical analysis and repeatability of data collection in order to verify reliability. The study made use of descriptive research, it was used to obtain information concerning the current status of the phenomena to describe "what exists" with respect to variables or conditions in a situation. The methods involved the survey which describes the status quo. There were two approaches to a research, either the qualitative or quantitative approach. According to the British Library, quantitative research was a more logical and data-led approach which provides a measure of what people think from a statistical and numerical point of view. For example, if you wanted to know how many of your customers support a

25

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION proposed change in your products or service and how strongly (on a scale) they support it. Also, it can gather a large amount of data that can be easily organized and manipulated into reports for analysis. This form of research was very flexible in terms of how it’s carried out such as through the post, online or even over the phone. If you were carrying out research, make sure that you had a fair cross section of respondents and that you had enough of them to provide a greater range of reliable data.

Population, Sample size and Sampling Technique The respondents sought by the researchers were small businesses that made use of online banking in their business transactions such as fund transfer or online account checking. In order to identify the respondents, the researchers made use of purposive sampling. Purposive sampling, also known as judgmental, selective or subjective sampling where the units that were investigated were based on the judgment of the researchers (“Purposive sampling”). The researchers gathered information from twenty (20) small businesses using online banking in their business operations.

26

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Research Instruments The researchers used quantitative technique. They used the survey method due to its affordability and ability to gather multiple information at a short period of time. A survey was defined as a brief interview or discussion with individuals about a specific topic. The term survey was unfortunately a little vague, but was often used to mean collect information. The survey was comprised of three parts, the first part covers the type of online services that small businesses used. The second part covers the characteristics of online banking. Lastly, the last part covers the quality of availed online banking in terms of its promptness, exactness, confidentiality and competitiveness. The respondents made use of the following in order to rate the effectiveness of online banking based on its quality: Likert Scale of Effectiveness

5 - Very High effectiveness (4.20 – 5.00) 4 - Very low effectiveness (1.00 – 1.79) 3 - Low effectiveness (1.80 – 2.59) 2 - Moderate effectiveness (2.6 – 3.39) 1 - High effectiveness (3.40 – 4.19)

27

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Data Collection Procedure The data for this research were collected using a survey questionnaire. The survey was created using suitable questions modified from related research and individual questions formed by the researcher. The survey was comprised of three (3) parts, which was used to evaluate the effectiveness of online banking in small entrepreneurs in Malolos. Before initiating the data collection, researchers sought information from Business Permit Registration and Renewal (BPRR) on the City Hall of Malolos. They’ve asked about the list of small businesses that uses online banking in Malolos. The BPRR answered that there was no such list; the same response was given by Department of Trade and Industry (DTI) and Bulacan Chamber of Commerce (BCC). The researchers decided to look for respondents that were considered small entrepreneurs and uses online banking with hands-on knowledge in using it in the business and willing to answer all of the questions in the survey. They conduct the survey in highly commercialized places in Malolos: Malolos Crossing, Malolos Poblacion MacArthur Highway, Cabanas, Robinsons, Brgy. Catmon, Brgy. San Gabriel, Brgy. Guinhawa and Brgy. Caingin. The researchers stand-by while the respondents were answering, in case they needed to clarify certain information. After three days, the researchers only managed to survey 20 respondents and decided to ready it for data processing.

28

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Data Processing and Statistical Treatment For the presentation, analysis, and interpretation of the data, the researchers used appropriate statistical tools that gave meaning to the data. Frequency distribution was one of the most common graphical tools used to describe a single population. It was a tabulation of the frequencies of each value (or range of values). This was used to record, measure, and analyze the gathered data regarding the survey questionnaire. Percentage. This tool would be used to determine the ratio of the response out of total population. p = f x 100 N Where: p = percentage f = frequency N = total score

Rank. This tool would be used to determine the top three (3) between set of items.

29

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Another method that was used was weighted mean. The term weighted average usually referred to a weighted arithmetic mean, but weighted versions of other means can also be calculated, such as the weighted geometric mean and the weighted harmonic mean. It was an average computed by giving different weights to some of the individual values. The notion of weighted mean plays a role in descriptive statistics and also occurs in a more general form in several other areas of mathematics. This was computed using the formula below: x̄ = ∑x N Where: x̄ is the weighted mean ∑x is the summation of mean X is the number of respondents who answered excellent, very good, good, fair and poor N is the total number of respondents

30

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

31

Chapter 4

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

In this chapter, the data gathered from the respondents were presented, analyzed and interpreted. The chapter contains the results of the survey questionnaire answered by 20 respondents in the said study.

Table 1 Frequency Distribution of the respondents according to Online Services Frequency

Ranking

Payment of Bills

14

2

Account Inquiry

15

1

Fund Transfer

11

3

Reloading

3

Process Payroll

4

Payment to Supplier

8

ATM Checking

10

*multiple responses Table 1 presents the frequency distribution of the respondents to the different online services, its percentage and ranking.

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION The results show that majority of the small businesses using online banking use it for account inquiry, payment of bills and fund transfer. This was shown in Table 1 where 15 out of 20 respondents or 75 percent of the total number of respondents used online services for account inquiry, 14 out of 20 or 70 percent for payment of bills and 11 out of 20 or 55 percent for fund transfer. Modernization of the banking system affects business transactions, including even SMEs financial transaction. In fact, Purcell and Toland (2009) noted that SMEs can even apply online for lines of credit, credit cards, loans and mortgages, hence, less visitation to banks was needed in doing banking transactions. Businesses were now more comfortable in using this kind of system compared to when it was first introduced. The reason for this was explained in the Theory of Reasoned Action, wherein the attitude towards performing the behavior was an individual’s positive or negative belief about performing the specific behavior. In fact, attitudes were comprised of the beliefs a person accumulates over his lifetime. These beliefs were created from experiences, outside information, or from within the self. Only a few of these beliefs, however, actually influence attitude, and one of them was the attitude towards online banking.

32

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Table 2 Characteristic of Online Banking Characteristic Weighted Verbal Ranking Mean Interpretation Online banking makes it easier for me 3.75 Very Satisfied 1 to conduct my banking transaction Online banking gives greater control 3.35 Very Satisfied 3.5 over my finances Online banking allows me to manage 3.50 Very Satisfied 2 my finances more efficiently Online banking allows me to manage 3.35 Very Satisfied 3.5 my finance effectively. WEIGHTED MEAN 3.49 Very Satisfied

Table 2 presents the answer of the respondents to the query number 2 written in the survey questionnaire. It consists of the weighted mean of the responses of owners and employees of small businesses that answers the question on level of satisfaction on characteristics of online banking. The results show that most of the respondents were very satisfied in using online banking services in their business transactions. This was shown in the top answer that “online banking makes it easier for me to conduct my banking transaction” with a weighted mean of 3.75; “online banking allows me to manage my finances more efficiently” at 3.50; “online banking gives greater control over my finances” at 3.35 and “online banking allows me to manage my finance effectively” at 3.35. This result was supported by Cheng et al. (2006), who concluded that customers prefer e-banking for its conveniences, speed, round the clock services and access to the account from any parts of the world. Entrepreneurs’ acceptance

33

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

34

of the system was largely due to the adaptation of new technology and incorporating it in the system (Hosein, 2009). The critical factors that determine the adoption of an innovation at the general level were the following: relative advantage, compatibility, complexity, trial ability and observability (“Innovation Diffusion Theory”).

Table 3 Quality of Online Banking Services Characteristic PROMPTNESS The bank gives prompt responses to my request by email or other means When the bank promises to do something at a certain time, it does so. It is quick to complete a transaction through the bank’s website. Weighted Mean: Promptness EXACTNESS The bank’s site makes accurate promises about the services being delivered. Accuracy in the movement of funds in each transaction. No duplication in the payments of funds.

Weighted Mean

Verbal Interpretation

Ranking

4.20

Very High Effectiveness High Effectiveness

2

1

4.13

Very High Effectiveness High Effectiveness

4.15

High Effectiveness

3

4.55

Very High Effectiveness Very High Effectiveness Very High Effectiveness

1

Very High Effectiveness Very High Effectiveness High Effectiveness

1.5

3.95 4.25

4.20

Weighted Mean: Exactness

4.30

CONFIDENTIALITY The bank does not misuse my personal information.

4.60

Feel safe in the transacting with the bank.

4.60

ATM Services with a high degree of security and confidentiality contribute to attract new customers. Weighted Mean: Confidentiality

4.15

COMPETITIVENESS The organization and structure of online content is easy to follow. Online banking service in the payment of financial obligations around the clock contributed to increase customer loyalty. Competitive edge by using online banking because of the quick response. Weighted Mean: Competitiveness

3

2

1.5 3

4.45

Very High Effectiveness

4.30

Very High Effectiveness Very High Effectiveness

2

4.15

High Effectiveness

3

4.27

Very High Effectiveness

4.35

1

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Table 3 consists of the weighted mean, verbal interpretation and ranking of the respondents’ answers on the level of effectiveness of four (4) quality of online banking services: Promptness, Exactness, Confidentiality and Competitiveness. Quality for Online Banking Services were divided into four: Promptness, Exactness, Confidentiality and Competitiveness. Promptness was noted by the respondents with High Effectiveness (weighted mean of 4.13). Regarding the specific characteristics, the first was “It is quick to complete a transaction through the bank’s website” with 4.25 or Very High Effectiveness; followed by “The bank gives prompt responses to my request by email or other means” with 4.20 or Very High Effectiveness and finally, they gave 3.95 or High Effectiveness to “When the bank promises to do something at a certain time, it does so.” According to Pinnington (2014) many law firms manage their trust and regular bank accounts on the Internet. Some firms had the ability to initiate various banking transactions online, including account transfers and wiring funds. In the absence of E-banking, SMEs in Bangladesh had to visit an average of 15 times to their lender just for a single loan (Rikta, 2007). For exactness, the respondents rate it 4.30 (Very High Effectiveness). The respondents gave the highest rate in “Accuracy in the movement of funds in each transaction” with 4.55 or Very High Effectiveness. It was followed by “No duplication in the payments of funds” at 4.20 or Very High Effectiveness. Finally,

35

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION they gave 4.15 or High Effectiveness on “The bank’s site does not misuse my personal information.” Internet brought about different blessings with regards to online banking. Online banking reduces cost transactions while faced with problem on operations mainly regarding human errors. Still there were a growing number of users of ebanking which was explained in Decomposition Theory of Planned Behavior. It states that technology was used because of its influence to users’ attitude regarding the perceived control of it. Regarding online banking’s confidentiality, the respondents rated it 4.45 or Very High Effectiveness. The owners of small businesses put more importance in “The bank does not misuse my personal information” with 4.60 or Very High Effectiveness and “Feel safe in the transaction with the bank” also with rating of 4.60 or Very High Effectiveness. Finally, they gave 4.15 or High Effectiveness on “ATM services with a high degree of security and confidentiality contribute to attract new customers.” Hemmasi, Graf and Winchell (2009) in their study found out that confidentiality of client information topped the list for all businesses with the exception of manufacturing firms. E-banking users especially businesses would like their information to remain confidential since it contains business information that was sensitive and could put the business at risks with competitors (Alhosani, 2011).

36

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Lastly, the respondents rated online banking’s competitiveness at 4.27 or Very High Effectiveness. In terms of specific characteristics of banking competitiveness, the top answer was “Online banking service in the payment of financial obligations around the clock contributed to increase customer loyalty” with 4.35 or Very High Effectiveness. Second was “The organization and structure of online content is easy to follow” with rating of 4.30 or Very High Effectiveness. Lastly, they gave 4.15 or High Effectiveness on “Competitive edge by using online banking because of the quick response.” Online banking has a lot of benefits which add value to customers’ satisfaction in terms of better quality of service offerings (Chavan, 2013). Wendell and Williams (2004) mentioned that SME businesses were more profitable and produce higher revenues than SMEs that only use traditional channels.

37

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

Chapter 5

SUMMARY, CONCLUSION AND RECOMMENDATION

Summary of Findings The researchers were able to analyze and interpret the data collected through performing a survey to the small entrepreneurs in the City of Malolos. 1. Respondents used online services for “account inquiry,” “payment of bills,” and “fund transfer.” 2. In the characteristic of online banking, the respondents rated “online banking makes it easier for me to conduct my banking transaction” with the highest satisfaction and the result shows that they were “Very Satisfied.” 3. There were different kinds of quality of online banking: Promptness, Confidentiality, Exactness, and Competitiveness. In promptness, the statement “It is quick to complete a transaction through the bank’s website” got the highest rank with Very high effectiveness. While regarding online banking’s confidentiality, the owners of small businesses put more importance in “The bank does not misuse my personal information” with

38

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Very High Effectiveness. For exactness, the respondents gave the highest rate in “Accuracy in the movement of funds in each transaction” with Very High Effectiveness. Lastly, competitiveness the highest rank was “Online banking service in the payment of financial obligations around the clock contributed to increase customer loyalty” with Very High Effectiveness.

Conclusion The researchers made use of 20 respondents in order to collect all needed information that the study requires. Based on the data gathered through the questionnaires, the researchers came up with the following conclusions: 1. The study showed that most of the respondents used account inquiry in availing online services. Account inquiry was the simplest and most common online banking that the respondents practiced because they can do it at the comfort of their home or in an ATM. Also, they find it easy and efficient. 2. Based on the data gathered through the questionnaire, the researchers conclude that the respondents were very satisfied in the characteristic of online banking. It was easier for them to conduct their banking transaction of as the highest satisfaction. Compared to traditional banking, online banking was much easier and consumes way less time and money. 3. As to the result of the survey, it showed that the effectiveness of each qualities rate as very high according to the respondents. Moreover,

39

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION regarding

with

the

Promptness,

Confidentiality,

Exactness,

40

and

Competitiveness rate as “very high effectiveness”. Therefore, the small entrepreneurs were satisfied with the online banking transaction. According to the result of the survey each aspect such as the characteristics and quality of online banking, the respondent rate it very satisfied so the researchers conclude that using online banking was really effective especially for small businesses.

Recommendation The result below can help the researchers to particularize online banking transactions to improve the service quality and achieve customer’s high satisfaction. 1. The bank should focus more on each online banking services that small entrepreneurs were not too keen to use. They should have a teller or personnel to assists those who were technically new in online banking. 2. The bank should promote the advantages of internet banking over traditional banking such as convenience, cost saving, and quick response to the customer. 3. Businesses should consider using online banking as it's the safest, the most effective and the most efficient way of looking after their finances. Online banking gives you the facility to keep track of all your spending and income

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION and it allows you to check your bank as often as you like giving you a peace of mind. 4. The bank should improve tools, better awareness, and more effective processes that attract other small businesses. 5. Bank should expand services to cover all customers’ needs and should be adapted to be more compatible to the customers’ lifestyle.

41

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Bibliography

Journals Almeda, S. and Baysic-Pobre, I. (2013). Micro, small and medium enterpises (MSMEs) in the Philippines: What we know and what we don’t know. Asian Institute of Management Working Paper no. 13-022. DOI accessed on papers.ssrn.com: 2316569 Chavan, J. (2013) Internet banking-benefits and challenges in an emerging economy. International Journal of Research in Business 1(1) pp. 19-26 Chong, A. and Ooi, K. (2010). Online banking adoption: An empirical analysis. International Journal of Bank Marketing 28(4). DOI accessed on: www.emeraldinsight.com: 10.1108/02652321011054963 Han, L. (2008). Bricks vs. clicks: Entrepreneurial online banking behavior and relationship banking. International Journal of Entrepreneurial behavior and research 14(1) pp.47-60. DOI accessed on: www.emeraldinsight.com: 10.1108/13552550810852820 Liao, S. Yuan, S. Wang, H. and Chen, A. (n.d.). The adoption of virtual banking: An empirical study. International Journal of Information Management 19(1) pp.63-74.

DOI

4012(98)00047-4

accessed

on

sciencedirect.com:

10.1016/S0268-

42

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Sadeghi, T. (2011). The role of behavioral adoption theories in online banking services. Middle-East Journal of Scientific Research. Retrieved from www.idosi.org on July 12, 2014 Winter, G. (n.d.). A comparative discussion of the notion of validity in qualitative and quantitative research. The Qualitative Report, 4(3&4).

Thesis/Dissertation Ackah, J. and Vuvor, S. (2011). The challenges faced by small & medium enterprises (SMEs) in obtaining credit in Ghana. (Published Thesis). Blekinge Institute of Technology, Karlskrona, Sweden Ahmed, T. (2009). Electronic customer relationship management in online banking. (Published thesis). Lulea University of Technology, Sweden. DOI accessed on: epubl.Itu.se: LTU-PB-EX-09070-SE Anthony, G. (2011). Thesis proposal Bashier, M. and Albarbarawi, S. (2011). A study of attitudes towards SSTs (internet banking, online shopping and self check-in machine at the airports) and the influence of new technologies (smart phones and tablet computers). (Published thesis). UNEA University, Sweden. DOI accessed on academia.edu: 6611131

43

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

44

Bueno et al. (2012). Level of effects of flooding in aquaculture industry of Hagonoy, Bulacan. (Unpublished thesis). Bulacan State University, Malolos. Hemmasi, M., Graf, L., and Winchell, M. (n.d.). Banking services for small businesses: A study of entrepreneurs’ needs and expectations. (Published thesis). Dream Catchers Group, LLC, Arden, NC.

Electronic Resources Acaso, M., Cabudoy, E., Monilla, N. and Naval, A. Problems encountered in ebanking in selected banks in Quezon City. (Powerpoint presentation). Retrieved

from

www.slideshare.net/lilybethevearnel/problems-

encountered-in-ebanking-in-selected-bank-in-quezon-city on July 12, 2014. Albistos, M., Esperanze, M., Garcia, C., Malolos, P.G. and Manahan, A. (2008). Ebanking. Retrieved from www.pdfcoke.com/doc/135218471/E-BANKING July 12, 2014 Aldaba, R. (n.d.). Small and medium enterprises’ (SMEs) access to finance: Philippines.

Retrieved

from

p.pids.gov.ph/details.php?pid=5073fparam=Aldaba%2CtRafaellitatM July 12, 2014

serpon

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

45

Alhosani, W. (2011). Banking confidentiality versus disclosure. Retrieved from: durhamlawreview.uk/articles/25-banking-confidentiality-versusdisclosure.html on September 15, 2014 Baning services. (2014). Retrieved from www.marketest.co.uk/market-researchquestionnaire/91/baning-services on August 13, 2014 The British Library Board. (n.d.). Qualitative and quantitative research. Research from www.bl.uk/bipc/resmark/qualquantresearch. On August 6, 2014 Buenaventura, R. (2004). E-banking climate in the Philippines. Retrieved from www.bsp.gov.ph on July 12, 2014 Dela Peña, Z. (2014). BIR defines bank secrecy law. Philippines Star. Retrieved from

www.philstar.com/business/2014/08/13/1356866/bir-defines-limits-

bank-secrecy-law on August 13, 2014 Ellen, S. (n.d.). Slovin’s formula sampling techniques. Retrieved from http://ww.ehow.com/way_5475547_slovins-formula-samplingtechniques.html on August 13, 2014 Gemmel, D. (2010). How to practice safe online banking. Retrieved from www.entrepreneur.com/article/207234 on July 12, 2014 Good

to

know:

Philippine

web

statistics.

entrepreneurs.com.ph on July 12, 2014

(n.d.).

Retrieved

from

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

46

Keeton, W.R. (n.d.). The transformation of banking and its impact on consumers and small businesses. Retrieved from www.ke.frb.org on July 12, 2014. Lagua, B. (n.d.). SME characteristic and statistical needs of Philippines Mizner, W. (n.d.). Quota sampling. Retrieved from www.explorable.com/quotasampling on August 6, 2014 Moga, L. (2010). The adoption of e-banking: An application of theories and models for technologies. Retrieved from www.wseas.us/e-library on July 12, 2014 Ong,

H.

(2013).

Choosing

the

right

bank.

Retrieved

from

www.businessence.com.ph on July 12, 2014 Phem, L. (2010). A conceptual framework for e-banking service quality in Vietnam. Retrieved

from

www.academia.edu/4172242/A_CONCEPTUAL_FRAMEWORK_FOR_E_ BANKING_p119 on September 15, 2014 Riyadh, A., Akter, S. and Islam, N. (2009). The adoption of e-banking in developing countries: A theoretical model for SME. Retrieved from www.academia.edu on July 12, 2014 Salazar, M. (n.d.). Markets and market development for small-scale enterprises: The

experience

of

the

Philippines.

Retrieved

www.fao.org/docrap/s8380e/s8380e08.html on July 12, 2014

from:

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Sincero, S. (2013). Personal interview survey. Retrieved from Explorable.com on August 7, 2014 Trochim, W. (2006). Research method knowledge base. Retrieved from www.socialresearchmethods.net/kb/survtype.php

47

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

APPENDIX 1 COMMUNICATION LETTER

48

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

APPENDIX 2

49

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

50

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

51

APPENDIX 3 DATA MATRIX Part I. Online Services Legend: a = Payment of Bills b = Account Inquiry c = Fund Transfer d = Reloading e = Process Payroll f = Payment to Supplier g = ATM Checking 1 = Availed Services #

a

1

b

c

1

1 1

2

1

1

3

1

1

4

1

1

5

1

6

e

f

g 1

1

1

1

1 1

1

1

1

1

1

7

1

1

1

8

1

1

1

9

d

1 1

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION 10

1

11

1

1

1

12

1

1

1

52

1

13

1

14

1

1

1 1

1

15

1

1

1

1

16

1

1

1

1

17

1

1 1 1

18

1

19

1

1

1

20

1

1

1

1

1 1

Part II. Characteristic of Online Banking Legend: a = Online banking makes it easier for me to conduct my banking transaction. b = Online banking gives greater control over my finances. c = Online banking allows me to manage my finances more efficiently. d = Online banking allows me to manage my finance effectively. 4 = Very Satisfied 3 = Satisfied 2 = Quite Satisfied 1 = Not Satisfied

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

53

#

a

b

c

d

1

3

3

3

3

2

4

4

4

4

3

4

3

4

4

4

4

4

4

4

5

3

3

2

2

6

4

1

4

4

7

3

3

4

3

8

4

3

3

3

9

4

3

3

3

10

3

3

4

4

11

3

4

3

3

12

4

4

3

3

13

4

3

4

3

14

4

4

3

3

15

4

3

4

3

16

4

4

3

4

17

4

4

4

4

18

4

3

3

3

19

4

4

4

4

20

4

4

4

3

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION Part III. Perceive Quality of Online Banking Services

Legend: A = Promptness a = The bank gives prompt response to my request by email or other means b = When the bank promises to do something at a certain time, it does so. c = It is quick to complete a transaction through the bank’s website. B = Exactness a = The bank’s site makes accurate promises about the services being delivered. b = Accuracy in the movement of funds in each transaction. c = No duplication in the payments of funds. C = Confidentiality a = The bank does not misuse my personal information. b = Feel safe in the transacting with the bank. c = ATM services with a high degree of security and confidentiality contribute to attract new customers. D = Competitiveness a = The organization and structure of online content is easy to follow. b = Online banking service in the payment of financial obligations around the clock contributed to increase customer loyalty.

54

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

55

c = Competitive edge by using online banking because of the quick response. 5 = Very High Effectiveness 4 = High Effectiveness 3 = Moderate Effectiveness 2 = Low Effectiveness 1 = Very Low Effectiveness A

B

C

D

#

a

b

c

a

b

c

a

b

c

a

b

c

1

4

4

4

4

4

4

5

5

3

4

4

4

2

4

4

5

5

5

5

5

5

5

5

5

5

3

4

3

3

4

4

3

4

4

4

4

4

4

4

5

5

5

5

5

5

5

5

5

5

5

5

5

3

3

3

3

4

4

4

4

3

3

4

3

6

5

5

5

5

5

5

5

5

5

5

5

3

7

4

5

5

4

5

5

4

4

3

3

3

3

8

3

4

3

3

4

4

5

3

3

3

3

3

9

4

4

4

4

3

3

5

5

4

4

4

4

10

3

3

4

4

4

3

5

5

5

5

5

4

11

5

3

5

3

5

4

4

5

3

4

5

4

12

4

4

4

4

5

4

4

5

5

4

4

4

13

5

5

3

4

5

5

5

4

4

4

4

5

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

56

14

3

3

4

4

4

3

4

4

4

4

3

3

15

5

5

4

5

5

4

5

5

5

4

5

5

16

5

4

5

5

5

5

4

5

4

5

5

5

17

4

4

5

4

5

5

5

5

5

5

5

5

18

5

3

4

4

4

4

5

4

4

5

4

5

19

5

4

5

5

5

5

4

5

5

5

5

5

20

4

4

5

4

5

4

5

5

4

5

5

4

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION APPENDIX 4 CERTIFICATION

To whom it may concern,

This is to certify that the thesis entitled “EFFECTIVENESS OF ONLINE BANKING TO THE SMALL ENTREPRENEURS IN MALOLOS CITY, BULACAN” was edited and checked. This certification is being issued upon the request of the researchers namely Camille Joy DS. Sebastian, Desserie Jane F. Sunguad, Jenny Anne M. Eugenio, Racine D. Tapispisan, Wil Anne A. Hizon and RB D. Salvador.

_______________________ MS. LOURDES CASTILLO

57

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

JENNY ANNE M. EUGENIO #61 Maguinao, San Rafael, Bulacan Mobile Number: 09159388158 Email: [email protected]

Objectives: To obtain a job position in a respected company where I can be able to apply my gained knowledge and skills. PERSONAL BACKGROUND: Date of Birth Place of Birth Age Gender Civil Status Religion Citizenship Language/ Dialect spoken

: June 9, 1994 : Bustos, Bulacan : 20 Years old : Female : Single : Roman Catholic : Filipino : English, Filipino Dialect (Tagalog)

ACADEMIC RECORDS: Tertiary:

Secondary:

Bulacan State University Bachelor of Science in Business Administration major in Management Brgy.Guinhawa McArthur Highway Malolos City, Bulacan 2011 – Present Carlos F. Gonzales High School Maguinao, San Rafael, Bulacan 2007 – 2011

____________________ Jenny Anne M. Eugenio

58

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

WIL ANNE A. HIZON B23 L18 Dolmar Golden Hills Subdivision, Halang, San Vicente, Sta. Maria, Bulacan Mobile Number: 09067148300 Email: [email protected]

Objectives: To work for a company that will enhance the skills I already have as well as provide the opportunity for personal and professional growth and advancement opportunities. PERSONAL BACKGROUND: Date of Birth Place of Birth Age Gender Civil Status Height Weight Religion Citizenship Language/ Dialect spoken

: May 14, 1995 : Navotas City, Metro Manila : 19 Years old : Female : Single : 5’1” : 99 lbs. : Roman Catholic : Filipino : English, Filipino Dialect (Tagalog)

ACADEMIC RECORDS: Tertiary:

Bulacan State University Bachelor of Science in Business Administration major in Management Brgy. Guinhawa McArthur Highway Malolos City, Bulacan 2011 – Present ________________ Wil Anne A. Hizon

59

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

RB D. SALVADOR Santol, Balagtas, Bulacan Mobile Number: 09351254239/09428162902 Email: [email protected]

Objectives: To be part of a company, making all my skill applicable to the desired position as well as to gain experience and enhance my knowledge and communication skills. PERSONAL BACKGROUND: Date of Birth Place of Birth Age Gender Civil Status Height Weight Religion Citizenship Language/ Dialect spoken

: December 29, 1994 : Bunsuran 2nd, Pandi, Bulacan : 19 Years old : Female : Single : 5’ 5” : 110 lbs. : Roman Catholic : Filipino : English, Filipino Dialect (Tagalog)

ACADEMIC RECORDS: Tertiary:

Bulacan State University Bachelor of Science in Business Administration major in Management Brgy. Guinhawa McArthur Highway Malolos City, Bulacan 2011 – Present _____________ RB D. Salvador

60

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

CAMILLE JOY DELA SIERRA SEBASTIAN #11 Purok 1 San Nicolas Hagonoy, Bulacan Philippines

Mobile Number: 09059688351 Email: [email protected]

Objectives: To work for a company that will enhance the skills I already have as well as provide the opportunity for personal and professional growth and advancement opportunities. PERSONAL BACKGROUND: Date of Birth Place of Birth Age Gender Civil Status Height Weight Religion Citizenship Language/ Dialect spoken

: November 7, 1994 : San Roque Hospital, Malolos City, Bulacan : 19 Years old : Female : Single : 5’ 5” : 100 lbs. : Roman Catholic : Filipino : English, Filipino Dialect (Tagalog)

ACADEMIC RECORDS: Tertiary:

Bulacan State University Bachelor of Science in Business Administration major in Management Brgy. Guinhawa McArthur Highway Malolos City, Bulacan 2011 – Present _______________________ Camille Joy DS. Sebastian

61

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

DESSERIE JANE F. SUNGUAD 232 Pinagbakahan, City of Malolos, Bulacan Mobile Number: 09068387717 Email: [email protected]

Objectives: To gain a solid foundation in a private corporate environment where my experience in analysis would highly contribute to the company’s industry project’s success. To provide interpersonal skills in facilitating individual and group peak performance. PERSONAL BACKGROUND: Date of Birth Age Gender Civil Status Religion Citizenship Language/ Dialect spoken

: February 12, 1992 : 22 Years old : Female : Single : Roman Catholic : Filipino : English, Filipino Dialect (Tagalog)

ACADEMIC RECORDS: Tertiary:

Bulacan State University Bachelor of Science in Business Administration major in Management Brgy. Guinhawa McArthur Highway Malolos City, Bulacan 2012 – Present Bachelor of Science in Computer Engineering 2nd year undergraduate 2008 – 2010 _______________________ Desserie Jane F. Sunguad

62

BULACAN STATE UNIVERSITY COLLEGE OF BUSINESS ADMINISTRATION

RACINE D. TAPISPISAN 630 Violeta St., Saluysoy, Meycauayan, Bulacan Mobile Number: 09266006564 Email: [email protected]

Objectives: To work in an industry that offers great career opportunities and harnesses my potential to further develop my talent and skills that would highly contribute to the success of the company. PERSONAL BACKGROUND: Date of Birth Place of Birth Age Gender Civil Status Height Weight Religion Citizenship Language/ Dialect spoken

: April 24, 1993 : Meycauayan City, Bulacan : 21 Years old : Female : Single : 5’ 3” : 100 lbs. : Roman Catholic : Filipino : English, Filipino Dialect (Tagalog)

ACADEMIC RECORDS: Tertiary:

Bulacan State University Bachelor of Science in Business Administration major in Management Brgy.Guinhawa McArthur Highway Malolos City, Bulacan 2011 – Present

___________________ Racine D. Tapispisan

63