ADOPTION OF MOBILE BANKING IN SAUDI ARABIA: AN EMPIRICAL EVALUATION STUDY

Ayman N. Alkhaldi Management Information systems Department, Community College, University of Hail, Hail province, Kingdom of Saudi Arabia

ABSTRACT

This study explores the adoption of mobile banking practices in Saudi Arabia. It focuses on the existence of sufficient infrastructure, and the possible challenges that m-banking services may face. Also, discovers the potential opportunities in the country. A sample of banks in Saudi Arabia was surveyed via questionnaire, with a particular focus on the staff in the related IT departments. The findings demonstrate that although m-banking is believed to be important, there is a general lack of awareness, and it is still not widely accepted by the public. M-banking services provided should be easier to use and offer more security to its users. Furthermore, findings reveal that cooperation among the concerned parties is currently not extensive. From this, the researcher recommends that governing regulations and policies should be properly identified and put in place, and proposes that banking decision-makers in Saudi Arabia should reevaluate their bank’s strategic plans.

KEYWORDS

Information and Communication Technology, Banking Technology, Mobile Banking, Banking Services, Saudi Arabia

1. INTRODUCTION

Recent developments in the Information and Communication Technology (ICT) sector are spurring radical changes in banking institutions worldwide [1]. A number of electronic channels used in delivering banking services to consumers are becoming common, such as Automated Teller Machines (ATMs), e-wallets, Point of Sales (POSs), the Internet and mobile devices [2]. These electronic banking (e-banking) channels services offer the opportunity to banks' customers to perform banking transactions with excessive peace of mind and with the flexibility of time [3]. In addition, the adoption of Banking Technology (BT) has enabled banks to make the international market more truthful [4], with mobile devices becoming smarter and smaller. In software development, the development of mobile applications contributes to the largest innovation. At present, mobile channels and applications are considered as opportunities in ICT due to the diverse areas that could be applied to banking institutions [5]. In Saudi Arabia, the number of mobile internet users is increasing [6]. Whilst, Saudi Arabia is continually investing in telecommunications to develop telecommunications infrastructure, this supports the provision of various types of internet-enabled services [7]. For example, the subscriptions to mobile broadband were 14.27 million at the end of 2013 (contributing a 47.6% population mobile broadband penetration). In a different equation, from 2007 to 2012 the number of wireless connections in Saudi Arabia rose from 28.4 million to 53.0 million, which amounted to 1.82 connections for each resident. Furthermore, infrastructure mobility in Saudi Arabia is in the mature phase. Networks are new and continue to develop, with the high diffusion of internet- International Journal of Managing Information Technology (IJMIT) Vol.8, No.2, May 2016 2 enabled devices. As outlined by [8], 3G mobile devices are sufficient for the processing of banking transactions and were made existing since 2006 in Saudi Arabia. However, the diffusion rates of mobile devices are different in Saudi Arabia as compared to some other countries (e.g. Japan), which calls to be evaluated to increase the rate of the mobile devices usage for various banking services [9]. Furthermore, the regulations, rules, guidance, purposes and structures of mobile banking (m-banking) also vary from country to country [10]. Numerous empirical evaluation studies on consumers' adoption of m-banking have been conducted in developed countries, such as in Finland and South Korea. These studies are carried out in countries where cooperation between banks and electronic transaction service companies has been well established, and infrastructure is sufficiently developed. However, till now limited empirical evaluation studies were carried out in the Middle East, as well as, there being no empirically evaluated study conducted in Saudi Arabia [9]. It becomes clear that m-banking in Saudi Arabia requires further investigation [6]. Various studies have examined the potential factors affecting consumers' intention, adoption, acceptance and usage of m-banking services, and through the collection of data from consumers themselves. Despite this, no study has discovered the m-banking settings around those consumers through empirical evaluation of the availability of capable infrastructure to adopt m-banking services, so far. Likewise, evaluation of challenges related to consumer awareness, cooperation among relevant m-banking services parties, from IT bankers' perspective is also lacking. Therefore, this study serves to conduct an empirical evaluation of the obstacles in infrastructure capability for m-banking services. There is importance role of infrastructure capability, as ebanking measurement on choice and usage is oriented towards infrastructures more than users [11, 12]. [13] Discovered that different levels of mobile security awareness exist among consumers. In addition, there are differences in perception of wireless connection in mobile devices while on a public network, security protection among mobile users, security threat created by mobile devices and security threat awareness behaviour of users. The purpose of this research is to contribute to the literature of e-banking in general, and mbanking in specific. The research offers a report on the evolution of m-banking; evaluates the capability of its adoption; and discovers the possible opportunities in Saudi Arabia. These support decision makers in Saudi Arabian banks in finding and formulating the strategic plans for maintaining their competitive advantage through delivering m-banking services.

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