March 2, 2009

Sample Research Proposal on Electronic Banking


Over thirty-five years have passed since academics began speculating on the impact that information technology (IT) would have on organizational structure. The debate is still on-going, and both researchers and managers continue to explore the relationship between IT and organizational structure. This relationship is becoming increasingly complicated by both the rapidly changing nature of IT and the increasing environmental turbulence faced by many organizations. As organizations need to process more information under these uncertain conditions, IT is one possible way for organizations to increase their information processing capability. However, other, more organizational tools are also at their disposal for processing more information. These include task forces, lateral relationships, self-contained work groups, and slack resources. Thus, the relationship between IT and organizational structures is not a simple one (Earl, 1998).


IT has a dramatic effect on both people's personal and professional lives. IT is also changing the nature of organizations by providing opportunities to make fundamental changes in the way they do business. Many of the opportunities are recognized and understood. Yet a tremendous number of issues and consequences are only vaguely perceived while other questions are just now being raised (Beard, 1996). The technology is changing rapidly, with computing speeds and the number of transistor equivalents available in a given area of a microprocessor chip both doubling approximately every 18 months. Organizations are acquiring more and more technology systems to assist in everything from manufacturing to the management of information to the provision and improvement of customer service. Harnessing and coordinating this computing power is the challenge. New tools and innovative perspectives with which to examine, interpret, and comprehend these rapidly evolving environments are always needed and sought (Beard, 1996).


IT is transforming the way that business is conducted. Computers prepare invoices, issue checks, keep track of the movement of stock, and store personnel and payroll records. Word processing and personal computers are changing the patterns of office work, and the spread of information technology is affecting the efficiency and competitiveness of business, the structure of the work force, and the overall growth of economic output. This transformation in the way in which information is managed in the economy constitutes a revolution that may have economic consequences as large as those brought about by the industrial revolution (Allen & Morton, 1994).  Many people believe that the primary driving force behind this information revolution is progress in microelectronic technology, particularly in the development of integrated circuits or chips.


Thus, the reason that computing power that used to fill a room and cost $1 million now stands on a desk and costs $5000 or that pocket calculators that used to cost $1000 now cost $10 is that society happens to have benefited from a series of spectacularly successful inventions in the field of electronics. But fewer people understand why the introduction of information technology occurred when it did or took the path that it did, why data processing came before word processing or why computers transformed the office environment before they transformed the factory environment. Because this technology oriented view of the causes of the information revolution offers little guidance to the direction that technological developments have taken thus far, it offers little insight into the direction that they will take in the future (Allen & Morton, 1994). 


Background of the study

Electronic banking is one of the first things that come to mind when one thinks about the future of banking. It is generally assumed that electronic banking is new and that it will replace or supplement many channels of delivery of retail banking services. The term electronic banking as used here refers to any banking activity 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 (Gup, 2003).Electronic banking can be used for retail banking and business-to-business (B2B) transactions, as well as for facilitating large-dollar transfers. Equally important, electronic banking is a worldwide phenomenon. As the term is used here, it involves transactions. Some institutions only offer web sites that provide information about services offered but do not allow for transactions. These would not be covered under the definition of electronic banking. However, web sites that are transactional are considered electronic banking. Electronic banking and the Internet in general are forcing a shift in the way banks and other businesses organize and the way they think of themselves.


A shift is taking place from vertical integration to virtual integration.  Banks and other financial intermediaries must realize that they are in the financial information industry. The Internet makes it possible to bring both customers and suppliers together to share critical business information (Gup, 2003). E-banking helps banks relay and show to their clients how good their services are and that the services they offer are of better standards. Through E-banking the company can show the clients that they are better than competitors and can give them satisfaction guaranteed.


Statement of the problem

The internet and the different things it can do to uplift business procedures, products and services is a current necessity for business. One of internet's products is Electronic banking. Electronic banking is a faster way for clients to transact with the banks personnel. Clients can still transact with banks while on the comfort and safety of their homes.  The main purpose of this proposed research is determine the advantages and disadvantages of E-banking to Hong Kong banks. This research will try to determine what are the effects of E-banking to certain kinds of banks.

 Objectives of the study

This study intends to find out the advantage and disadvantages of e-banking to Hong Kong banks like HSBC, Standard Chartered Bank (SCB) and Hang Seng Bank (HSB). The study also has other objectives it intends to reach that include:

1.      Acquiring data from personnel of the abovementioned banks on how E-banking affects them.

2.      Examining the strengths and weaknesses of the adoption and diffusion model of e-Banking service based on the based on the six product characteristics.

3.      Analyze the adoption and diffusion model to the knowledge of customer decision-making process.

4.      Define consumers under different adapters categories along the product life cycle and how they could affect the adoption and diffusion rate of Internet.


Purpose and Significance of the study

The study intends to get the appropriate data needed to give appropriate solution to the problem. The study also intends get the necessary information needs to create a good conclusion and recommendation. The study is important to the purpose of the study, and other researchers. With the establishment of the purpose given, this study may be of importance to the purpose that have been discussed By fulfilling the aims that were stated in the previous section, this study will be helpful for other researchers who may be focusing on the different customer orientated strategies, and innovation being ultimately destructive to the principles of sustainability or of other areas especially with regards to the method of gathering the information. Such data will hopefully be helpful for researchers in establishing their own means of conducting their study. As such, the notable significance of this study is the possibility that it may be able to use the findings for the other studies that may wish to analyze the factors for the success or demise of a particular study. The methods that this study will take must also be credible and help researchers in knowing how to look for particular information and know how to analyze them. It is through this that researchers will then be able to find out how they will be able to focus on their particular investigation and also know the possible methods that they may choose in the possible time that they may choose to already conduct their study. Thus, another significance of this study is to serve as a guide for researches that focus on the analysis of the advantages and disadvantage of E-banking on different banks in Hong Kong.


Review of related literature

Hong Kong Shanghai Banking Corporation Holdings

HSBC Holdings, a British financial holding company with origins in Hong Kong and Shanghai, where offices were opened in 1865 under a special charter which allowed Hong Kong rather than London as a headquarter location. The bank remained an eastern force until the 1950s, when overexposure to the crown colony and its textile industry pointed to a need for geographical diversification. A worldwide scan was made with rather disappointing results. Australia and Canada were protectionistic and so was the Continent, in addition to being over-regulated and well served by its own talent. Central West Africa was saturated by British banks and, after independence; the new countries gave priority to domestic banks. Only the USA was attractive because it offered dollar assets in a dollar-hungry world (Laulajainen, 2003).But before anything could be done about it, events elsewhere called attention. HSBC was in intense competition all over Asia with Chase Manhattan which showed interest in a small bank in India and Malaysia. HSBC pre-empted by purchasing the bank in 1959. In the same year another defensive acquisition became necessary, when an investor group tried to buy the British Bank of the Middle East, strip its assets and sell the branches to HSBC, which did the bulk of its Middle East business through the bank. For example, Kuwaiti authorities kept half of their money there. With the purchase came a chain of retail branches in Cyprus.


A few years later a banking crisis erupted in Hong Kong. HSBC was not seriously affected but Hang Seng Bank, the colony's second largest, was about to flounder in a run. Chase offered help but Hang Seng preferred HSBC, because of its local roots, and sold it a majority stake in 1965. These three deals illuminate the difference between corporate strategy and the realities of the marketplace (King, 1991).Diversification had taken a beating although it was only in 2000 when acquisitions in Asia became topical again, in a small way. Two of them were part of the private banking drive, PCIB Savings Bank in the Manila area and Taiwan's leading asset manager China Securities Investment Trust Corp. in 2001, to be followed by an 8 per cent stake in the Bank of Shanghai. HSBC had returned to its roots. Afterwards many more events unfolded including the turnover of Hong Kong to china this prompted HSBC to transfer headquarters to United Kingdom (Laulajainen, 2003).


HSBC sees the Internet as one of several exciting new media, to be incorporated as an integral part of its working. The bank has concluded that e-commerce will change the fabric of the financial services sector and sees it as a way of finding new customers all over the world and improving its services to existing customers. It intends to use e-commerce to reorganize the business so as to provide higher-quality customer services more efficiently. HSBC will be able to link its customers to the full range of international services and manage their processing wherever it chooses, which the bank sees as a considerable competitive advantage(Tansey, 2002). HSBC has adopted a clicks and mortar strategy. This requires that customer Internet offerings must meet three criteria: customer needs and preferences come first; they must fit HSBC's existing distribution channels; and they must be multinational in scope. Recently the group has been reorganizing its work for the e-age and putting in place some major components of such a strategy. In 2000, over US$2 billion was spent on technology, including a significant proportion on initiatives. HSBC aspires to be one of the first to provide customers with facilities through the Internet on a multi-geographical and multi-product, basis (Tansey, 2002).

Effectiveness of using web sites

Integrated marketing communications (IMC) is the major communications development of the last decade of the twentieth century Many organizations proclaim IMC to be a key competitive advantage of marketing. Integration of communications as with anything else, attempts to combine, integrate, and synergize different elements of the promotional mix, so to consumers, messages through a variety of different mechanisms look, sound, and feel alike. In the 1980s the concept of integrated marketing communications was unrecognized, embryonic, and emergent. Many practitioners and academic commentators saw each promotional tool as separate and distinct, managed differently, budgeted differently, certainly not integrated in the sense that drove into the 1990s. Yet, IMC was there, underlying the surface, but few were trying to patch the disparate and early reports together (De Pelsmacker & Kitchen, 2004).


Many academic commentators and practitioners started to jump on the IMC bandwagon. For ad agencies, it justified the move to becoming all singing, all dancing, integrated agencies. Moreover, clients seemed to want it. Clients themselves were driven by organizational exigency as previously discussed. IMC became more evident, but the emphasis was on making it work, not on what it was. A decade later, most firms are still there. In the 1990s, a wave of studies mainly with ad agencies showed that IMC Increased communications impact, made creative ideas more effective, provided greater communication consistency, and would improve client return on communication investment (De Pelsmacker & Kitchen, 2004).


There are different IMC tool that companies use to have a better understanding with clients. These range from the use of old and new technology and tried and tested techniques. One possible IMC tool is Internet Banking or Banking by the use of websites. Internet banking is effective since it provides different benefits that include ease for clients, lesser cost of operation, faster transactions, and lesser miscommunication and errors. Internet banking gives ease to clients. By internet banking clients don't have to go to banks to transact. They can just do it in the safety and comfort of their homes. Internet banking cost lesser to operate and maintain. It does not cost so much for a company to maintain and operate it. Through internet banking faster transactions can be made, there are lesser waiting time and no more lining up for clients. Lastly internet banking provides lesser miscommunications between banks and clients thus they have a better working relationship. Because of the lesser miscommunications that ensue there can be lesser errors committed by banking institutions personnel. 


Strengths and weaknesses of E-banking service

Relative Advantages

Relative advantage is the degree that the innovation is perceived as better than the idea or product it supercedes. Typically, this has been thought of as economic advantage; however, many innovations have appeal on a status dimension. Also, the relative advantage of an innovation can change over time. For example, a pocket, four-function calculator bought in 1975 cost about $150. Today, a more complex calculator can be bought for less than $10, or even come as part of a $15 digital watch. Relative advantage may be thought of as the rewards and punishments of an innovation. This is one reason why it is difficult to promote preventive innovations. The benefits are generally uncertain, and almost by definition, may occur sometime in the future (Winett, 1986). As mentioned earlier E-banking service provides different benefits that include ease for clients, lesser cost of operation, faster transactions, and lesser miscommunication and errors. These advantages provide the company with more reasons to give excellent service to clients; it also gives banks a better image than competitors.



Compatibility refers to the capacity of products to function in association with others. VHS cassettes are only compatible with VHS players; computer software may require a particular operating system, and the like. The process of ensuring product compatibility and policing aspects of quality has always entailed a mixture of public sector and private sector initiatives. Yet great variation exists across nations in the matters that have been left to the market and those that have been subjected to regulation, and debates continue both in political assemblies and in the academy as to the appropriate role of government in regulating product characteristics (Sykes, 1995). E-Banking is compatible with the current trends and current world situation. It relates to the changes whether it is technological or social that is continuously happening. E-banking gives a probable solution to these generations needs and the urgency of making people's lives easier. This kind of banking is a probable solution to organizational problems and a big help for different organizations to survive in the ever changing world environment.


Trialability and Observability

Trialability means the ability to experience an innovation on a limited basis. Numerous free samples received in the mail are an example of attempts to exploit this dimension. Observability means the results are visible to the adopter and to others. This can be thought of as a feedback dimension. For example, newer exercise equipment provides the user with continuous heart rate, caloric expenditure, and other performance-related information (Winett, 1986). E-Banking services are good for trials and by undergoing trials this service can be improved and perfected according to the clients needs.  E-banking also shows observability since initial results can be seen abruptly thus its effects can be known and changes can be made. 



Complexity means the perceived difficulty to understand or use an innovation and is negatively related to the rate of adoption. For example, personal computers (PC's) that appear to require extensive knowledge of computer languages should not have mass market appeal (Winett, 1986). E-banking in a way shows complexity since people who will use it must be knowledgeable of computers and the internet.


Perceived Risk

Risks are things companies think that they might encounter or the things they have to take and ignore to continue with the business undertaking. In E-banking service perceived risk can be easily identified. In e-banking the probable difficulties and problems that will be encountered can be predicted thus sparing a banking institution from having a hard time.


Overview of the Methodology

Type of research

This study will use the descriptive type of research. Descriptive method of research is to gather information about the present existing condition.  The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena (Creswell, 1994). The descriptive approach is also quick and more practical financially. Moreover, this method will allow for a flexible approach, thus, when important new issues and questions arise during the duration of the study, a further investigation may be allowed. The study opted to use this kind of research considering the goal of the study to obtain first hand data so as to formulate rational and sound conclusions and recommendations for the study. 

Research Strategy

For this research data will be gathered through collating published studies from different books, articles from different related journals and studies, and other literary instruments. Afterwards make a content analysis of the collected documentary and verbal material. The study will then summarize all the necessary information. The study will then make a conclusion based on the said information and provide insightful recommendations on how to solve the said problem.


Sample and Sampling Technique

            The respondents of the study came from the different banks mentioned from Hong Kong. Due to time constraint and also, for the convenience of the researcher, only thirty (30) respondents were considered for the study. The convenience sampling technique was imposed in the study to pick up the thirty respondents, mainly because the availability of the respondents from the different banks was considered. This part of the study is important because the most important data needed to fulfill the objectives and aims of this study will only be supplied by the respondents from Hong Kong banks like HSBC, Standard Chartered Bank (SCB) and Hang Seng Bank (HSB).


Primary and secondary data collection

The primary source of data will come from a survey using questionnaire and interviews that will be conducted by the researcher. The primary data frequently gives the detailed definitions of terms and statistical units used in the survey. These are usually broken down into finer classifications. The secondary source of data will come from research through the internet; books, journals, related studies and other sources of information. Acquiring secondary data are more convenient to use because they are already condensed and organized. Moreover, analysis and interpretation are done more easily.


Validation of the instrument

For validation purposes, the researcher pre-tested a sample of the set survey questionnaires. This was done by conducting an initial survey to at least five respondents from the different banks from Hong Kong. After the respondents answered, the researchers then asked them to cite the parts of the questionnaire that needs improvement. The researcher even asked for suggestions and corrections from the respondents to ensure that the survey-questionnaire is effective. Automatically, these five respondents were not included as respondents for the study.


Data analysis

            Data gathered will be analyzed through frequency distributions. These will give way to reviewing the data categories and the number of referrals in each category.  The data acquired will be analyzed according to the different categories and importance. The information that will be gathered and analyzed will be important to achieve the objectives desired by the study.

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