Global changes are penetrating all societies and communities around the world, bringing more innovations, competition, products, and services and introducing new trends, directions, and ways to do things differently. The Internet and the World Wide Web have introduced new ways for doing business (Kamel, 2001). This has created many challenges and opportunities in the global market-place to the main players of the business cycle; among which are financial institutions. Respectively, in order to face its increasing competitive pressures, they were required to recognize the need to perform a balancing act between achieving strategic goals and meeting the continuous changing customer needs and requirements. While strategic goals are usually corporate-specific and can be achieved in different ways, understanding and meeting customer needs may be studied and analyzed at the industry level. Today, the use of cutting-edge information and communication technology is becoming a cornerstone in dealing with the competitive pressure faced by different businesses around the world.

Over the last few decades, the banking industry has been highly affected by such technology evolution, with an emphasis on the way services are delivered to retail banking customers. For more than 200 years, banking was a simple branch-based operation. However, things started to change since the early 1980s, with the use of multiple technologies and applications that surfaced with the penetration of computing in various sectors and industries, including banking. Among such technologies were the growing number of technology-based remote access delivery channels and payment systems, such as automated teller machines that displaced cashier tellers; the telephone, represented by call centers that replaced the bank branch; the Internet that replaced snail mail; credit cards and electronic cash that replaced traditional cash transactions; and shortly, interactive television that will replace face-to-face transactions (Kamel & Assem, 2002).

In Egypt, in line with global trends, the retail banking business has been undergoing tremendous changes over the last two decades. As a result, the banking industry was always facing a significant uncertainty regarding the potential investments in advanced banking technologies required to implement the different electronic delivery channels and payment systems. Regardless of the return, currently, banks in Egypt are investing large amounts of money in technology, not only to maintain a competitive edge but also to remain in the business. In order to make better forecasts for business planning and decision-making, banks need to better understand the different factors influencing the Egyptian customer choice among traditional and electronic banking instruments (Kamel & Assem, 2002).

The success in the application of different information and communication technology in retail banking delivery channels and payment systems relies to a large extent on the ability of customers to accept and adopt such systems. In Egypt, most of the technology-related decisions are based on reactions to other decisions taken by the competition, without a real study of actual customer needs or perceptions, which leads to the creation of a high level of risk associated with such strategy. An overestimation of the level of customer acceptance of the technology can misguide decision-makers to get involved in investments, which are not ready to give return, while underestimation of the acceptance level can lead to the loss of substantial market share.

This case analyzes the banking sector in Egypt and the deployment of information and communication technology in the sector in terms of adoption, diffusion, and innovation, while providing an understanding of the acceptance level of consumers of different technology-based delivery channels and electronic payment systems and the extent to which various factors influence consumers' willingness to use different technologies. The case depends on the use of the Technology Acceptance Model (TAM) (shown in Figure 1), introduced by Davis in 1985 to study the level of customer acceptance to new banking technologies in Egypt. TAM, by definition, considers user perceptions of ease of use and usefulness as the main factors affecting the acceptance level of any technology. The case will also consider the role of trust as an external variable affecting consumer adoption of electronic banking delivery channels and payment systems, which is a factor that is much associated with the cultural aspect of the society in Egypt, which for a long time was not accustomed to the use of banking services and facilities (Kamel & Assem, 2002).

click to expand
Figure 1: Technology Acceptance Model (TAM)

The research variables tested that were directly extracted from TAM include perceived ease of use (PEOU), perceived usefulness (PU), and technology acceptance (TA). PEOU and PU were simultaneously acting as dependent and independent variables, while TA was merely a dependent variable that depended on PEOU and PU. Moreover, trust (T) was used as an independent variable, which was indirectly affected by TA through its direct effect on variables PU and PEOU, as shown in Table 1.

Table 1: Research Variables




Associated Data Type



Technology Acceptance



Discrete (0-7)

0: Accept, 7: Reject


Perceived Ease of Use



Discrete (0-7)

0: Easy, 7: Not Easy


Perceived Usefulness



Discrete (0-7)

0: Useful, 7: Not Useful





Discrete (0-7)

0: Trustful, 7: Trustless

In addition to TAM, the case used a PEST analysis to study the different environmental factors affecting the banking sector in Egypt and its deployment of different technology-based systems. The case study focused on a number of research issues, including the identification of the main environmental factors affecting the Egyptian banking sector in general, and the electronic retail banking delivery channels and payment systems in particular; the extent to which banks were encouraging their customers to use technology-based systems, and the degree of support provided to them; and the determination of the main patterns of customer usage of different electronic delivery channels and payment systems. A number of hypotheses were formulated and tested during the study that mainly describe the relationships between different research variables as proposed by TAM; such hypotheses are shown in Table 2.

Table 2: Research Hypotheses

Null Hypotheses

Alternative Hypotheses

PU has no significant effect on TA

PU has a significant effect on TA

PEOU has no significant effect on TA

PEOU has a significant effect on TA

PU has no significant effect on PEOU

PU has a significant effect on PEOU

T has no significant effect on PU

T has a significant effect on PU

T has no significant effect on PEOU

T has a significant effect on PEOU

Based on the analytical nature of the study, the methodology used in the research was based on a combination of quantitative and qualitative approaches, where a research questionnaire was distributed among a sample of different bank customers. The survey instrument is shown in Appendix 1. The objective of the questionnaire was to demonstrate and investigate the relationship between the research variables by measuring the salient beliefs and intentions of bank customers in Egypt toward technology-based delivery channels and electronic payment systems. Moreover, the questionnaire measured the level of awareness among customers, and how this awareness was built. The subjects chosen to respond to the questionnaire consisted of a random sample of bank customers with varying demographics and different professions. All questionnaires were sent by electronic mail, facsimile, and, in some cases, it was handed to the respondent in person in an interview session, to provide the opportunity to explain the purpose of the research and to guide the respondent through the questionnaire. Moreover, a number of interviews were conducted with top executives and managers working in the banking sector or in the field of information and communication technology to include policy makers, major players, and decision makers as part of the survey. Most of the results of the questions in the questionnaires and the interviews were of a quantitative nature, with the intent to measure each of the research variables extracted from TAM and to understand the relationships between them.

Technology Acceptance Model (TAM)

The complexity of adopting new technologies was first popularized by the theory of diffusion of innovations (Rogers, 1983), where Rogers summarized the key influences of user acceptance behavior as relative advantage, complexity, compatibility, trialability, and observability. Rogers stated that an individual's perceptions are the basis of a widely studied model from social psychology entitled the theory of reasoned action (TRA), which was first proposed by Ajzen and Fishbein (1980). TRA is a model that has demonstrated success in predicting and explaining behavior across a wide variety of domains (Davis, 1989). Addition-ally, an extension of TRA is the theory of planned behavior (TPB) (Ajzen, 1991), which accounts for conditions with which individuals do not have complete control over their behavior (Taylor & Todd, 1995). Based on the three above-mentioned user acceptance research areas, diffusion of innovation, TRA, and TPB, TRA has emerged as a prominent model that has served as a basis for expanding user acceptance research. Specifically, a modified TRA model defined in the F. D. Davis study (1985) resulted in a concise, complete, reliable, and valid model for predicting user acceptance, entitled the technology acceptance model (TAM), that has repeatedly shown viability in predicting user acceptance of new and different technologies (Adams, Nelson, & Todd, 1992; Taylor & Todd, 1995; Davis & Venkatesh, 1995; Doll et al., 1989).

The basic goal of TAM is to provide an explanation of the determinants of technology acceptance that are capable of explaining user behavior across a broad range of end-user technologies and user populations, while at the same time, being both parsimonious and theoretically justified (Davis et al., 1989). According to TAM, perceived usefulness and perceived ease of use are the fundamental determinants of attitude toward usage intentions and actual technology usage. In TAM, behavior in terms of technology usage has been explained by investigating the perceived usefulness and ease of use the individual experiences or expects when using a specific technology. According to TAM, the easier the technology is to use, and the more useful it is perceived to be, the more positive one's attitude and intention toward using the technology; therefore, technology use increases. During the last few years, TAM has offered researchers and practitioners a relatively simple and cost-effective way to predict the ultimate measure of system success, whether or not that system is actually used (Morris & Dillon, 1997). It has been used to explain the use of a number of technologies including databases, communication technologies, and electronic mail, among others. The empirical evidence indicates that increasing the PEOU of the system will increase PU and will translate into an increased behavioral intention (BI), resulting in a larger margin of TA. However, research also indicates that the influences of PEOU on PU diminish over time, as users become proficient with the target system (Chau, 1996; Davis et al., 1989). Therefore, the literature suggests that PEOU determinants will have the greatest contribution to user acceptance in the early stages of system deployment, when users have limited experience with a target system. This concept is significant to consumer acceptance of banking technologies, and as customers are offered use of an unfamiliar banking technology, they can quickly become discouraged if that specific technology is not easy to use, regardless of the technology usefulness. However, it is important to note that the cultural differences that exist between different countries may affect the adoption and diffusion of new technologies.

Trust in Banking Technologies

The level of uncertainty avoidance plays an important role in building trust. Therefore, the research considered the effect of trust on the adoption and usage of advanced banking technologies as an extension to the basic TAM. Within the literature, organization theory provides a cross-disciplinary definition of trust that applies to a large range of relationships among individuals and organizations. In that context, trust implies benevolence, integrity, and ability in an exchange relationship (Mayer et al., 1995).

In a study conducted in Egypt in 2001 on the delivery channels for retail banking products, focusing on measuring the satisfaction levels of customers of banks with the in-person bank branches and their possible shift to alternative delivery channels, results indicated high dissatisfaction levels due to lack of bank awareness of customer needs. The research showed low loyalty levels, where 62% of customers surveyed stated their willingness to change their banks if offered more convenient banking alternatives. Responsive service was found to be the major satisfaction driver, followed by a 24-hour accessibility feature. Moreover, 71% of surveyed customers showed interest in using e-banking, if their banks guaranteed its security. When customers were asked to rank the importance of the five delivery channels, automated teller machines (ATMs) came first. See Table 3 for the rest of the results.

Table 3: Customer Preferences for Different Delivery Channels

Delivery Channel

Extremely Important


Not Important

Bank Branches








Mobile Banking




Call Centers




Internet banking




click to expand
Figure 2: Effect of Trust as an External Variable

Annals of Cases on Information Technology
SQL Tips & Techniques (Miscellaneous)
EAN: 2147483647
Year: 2005
Pages: 367 © 2008-2017.
If you may any questions please contact us: