The Impact of Mobile Banking on Enhancing Satisfaction of Bank Clients in

Barangay Manggahan, Pasig City During the COVID-19 Pandemic

A Research Study

Presented to

Pamantasan ng Lungsod ng Pasig

In partial fulfillment

of the Requirements for

Accounting Research and Methods

By:

Busaing, Ma. Christina A.

Dela Costa, Lorraine Jane T.

Galam, Marlyn P.

Hernandez, Flowny M.

Lazatin, Rose Ann E.

Submitted to:

Prof. Amor B. Sande

 CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter presents the review of local related literature, foreign literatures, foreign

studies, local studies, and research synthesis.

With the use of several articles, books, dissertations, and other relevant studies as

references, the researchers were able to conceptualize this study and make certain of the key

concepts involved thereto.

Foreign Literature

Due to the flexibility of the concept with regards to online banking, it has been described

in several ways. In example, a definition laid by Investorwords.com (2015) states that mobile

banking is a system that allows individuals to perform banking transactions and activities at

home, via the internet. It includes systems that allow bank customers, individuals or businesses,

to access accounts, transact business, or obtain information on financial products and services

through a public or private network, including the internet. He also claims that mobile banking

offers great autonomy to customers to supervise their own transactions and to benefit from

banking services over the internet, most obviously e-commerce, although many other services

such as e-government are increasingly possible over the internet.

Meanwhile, according to Krishnan (2014), mobile banking is like an automated teller

machine on steroids, which is a highly functional and cost-effective alternative to a branch

office. Mobile technology enables a bank to interact with customers in a variety of ways that are

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both practical and potentially profitable for both parties. Mobile banking is a great opportunity

that allows multiple transactions that allows a multitude of transactions. And can do much more

for financial institutions. Nicoletti (2014)

However, among the definitions for mobile banking, the definition described by Phuong

Lan (2020) appears to be quite more appropriate within the context of this study. According to

him, mobile banking refers to the use of a mobile device in the transaction of financial products

or services. The services are provided by banks, and clients are able to see their balances, bank

statements. Mobile-banking has been allowing customers to perform online transactions through

mobile phones or other personal assistive devices. Thereby, customers can access at any time in

the financial services or products without having to go to the bank. Customers who use e-

banking services implicitly trust financial institutions and perceive them to be safe and reliable

methods to undertake their financial transactions.

In line with the description provided, Kabir (2019) recreated a simpler and modernized

definition of what mobile banking means. He stated that banks have been traditionally in the

front of harnessing technology to improve their efficiency and services. They have, over a long

time, been using electronic and telecommunication networks for delivering a wide range of

services. Mobile banking used the internet communication pathway to facilitate banking

activities and to provide convenience to their customers.

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 Mobile banking is classified into two (2) distinct categories namely: attributes of

innovation (attributes of mode of payment transactions, features of mobile banking), and mobile

banking quality services.

Attributes of innovation in mobile banking refers to a set of actions, services, and

programs that features bank clients’ basic rights and engages them in a healthy environment. It is

undertaken in order to ensure bank clients and raise their trust levels in relation to the security,

convenience and reliability of mobile banking transactions. They are also categorized into two

types: attributes of mode of payment transactions and features of mobile banking.

Attributes of mode of payment transactions are those benefits given to the bank clients

with regards to the programs and services provided by the financial institutions, Agami and Du

(2017). Among the known attributes of mode of payment transactions were: accessibility, time-

processing, time-saving, health safety, and cost efficiency.

Features of mobile banking are those attributes that are provided by banking institutions

with compliance to the laws governing bank clients' health and safety (Gutierrez, 2014). These

features of mobile banking include different beneficial services in which clients could feel

satisfied and motivated with. This could be utilized in such ways that productive, reliability, and

efficient performance of financial institutions is generated among the clients. Among the known

features of mobile banking in the Philippines were: account alerts and notifications, investment,

bank Services, e-Loading, time-to-date account activity, and customer service support.

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 As stated in the article by Deloitte entitled “Digitalisation of banking: Will the move to

online banking continue after the COVID-19 pandemic?” reveals that the result of the pandemic

shift to online banking has accelerated, advancing the existing trend by several years.

Furthermore, this was not a one-time occurrence but is ongoing. In addition, the growing number

of customers who say they will continue to use online services at least some of the time after a

prolonged period of use during the pandemic indicates that online banking is likely to become a

permanent fixture in the range of services banks offer.

Overall, younger people are more open to online solutions, but the proportion of over-50-

year-olds who bank online has increased significantly.In relation with the article entitled

“Covid-19 has increased the adoption of online banking” by GlobalData Financial that The

pandemic has accelerated retail banks' adoption of online banking. Banks must improve their

platforms to ensure that employees can complete their tasks remotely to meet customer demands.

According to the article, as online banking becomes more popular, criminals are adapting to

these new payment methods and taking advantage of customers' vulnerability to defraud them.

Finally, because the shift to online banking is expected to continue long after the pandemic has

passed, banks will need to devise solutions to protect their customers' transactions and personal

information.

Foreign Studies

One thesis that has been recognized for its relevance to this study was a research

conducted by Akhisar and Tunay (2015) entitled: “The effects of Innovation on Bank

Performance: The Case of Electronic Banking Services”. The study targeted a population of

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1650 bank clients and out of this population, a sample size of only 450 bank clients were utilized

in this study with the use of random sampling. In addition, to perform interpretation and analysis,

the researchers made use of T-test statistics to the data that has been collected all throughout the

research process.

The researchers have revealed innovation on bank performance has a positive financial

impact on the profitability of banks. The study also revealed that the ease and benefits of using

online banking bring customers towards the adaptation of the banking. The innovation of online

banking services are very effective and has a high rate of accessibility that users can be ensured.

However, despite the good number of positive issues regarding online banking, security is still a

concern for many users and potential users of banking services.

Another study was also conducted by researchers Kahandawa and Wijayanake (2014) on

their paper entitled: “Impact of Mobile Banking Services on Customer Satisfaction: A Study on

Sri Lankan State Commercial Bank”. Researchers have found out that customer satisfaction is

influenced by the usefulness, ease of use, relative advantage, perception of risk and user lifestyle

and current needs of the customers. To which the financial institution should focus to improve on

their mobile banking services.

In addition, the study also revealed that mobile banking has been identified as one way

of expanding banking services. One factor that affects customer satisfaction is lifestyle and

needs of customers. Identifying the lifestyle and needs of customers would be a real challenge

to banks.

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 Furthermore, according to the studies of Khadka & Maharjan (2017) entitled “Customer

Satisfaction and Customer Loyalty” certain aspects of the business should be improved to

increase customer satisfaction. It is suggested that the company improve its service by

implementing a feedback system, implementing staff training, and conducting regular advertising

campaigns to attract new customers and inform existing customers about upcoming events.

In connection with the studies conducted by Lee Et. al (2016) entitled "An empirical

research on customer satisfaction study: a consideration of different levels of performance" that

customer satisfaction is a critical success factor that is heavily reliant on the behaviors of

frontline service providers. Customers should be managed as assets, and their needs, preferences,

and purchasing behavior vary. Moreover, the results show that perceived quality had the greatest

influence on the customer satisfaction for satisfied and dissatisfied customers.

As claimed in the research entitled “Impact of e-banking service quality on e-loyalty in

pandemic times through interplay of e-satisfaction” by Haq and Awan (2020) found out that the

findings show that reliability and website design increased e-banking loyalty, especially during

COVID-19. The relationship between e-banking privacy and security and e-banking loyalty was

found to be fully mediated by e-banking satisfaction; however, the indirect effect of reliability

and website design on e-banking loyalty was found to be partially mediated.

In a study conducted by Shrestha (2017) entitled “Mobile Banking and Customer

Satisfaction,” modern technology has rapidly changed the conventional ways of banking

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business. Through mobile banking, customers are able to check accounts, receive statements,

transfer funds by just a few major punches. The availability of various services such as ATMs

and mobile banking provided a large range of facilities to customers. Furthermore, the

improvement and initiation of electronic banking has made a lot of changes in service quality,

managerial choices, functional performance, profitability and productivity of the banking sectors.

Local Literature

Chiu, et al., (2017), states that at the end of 2012, every Filipino owned a mobile phone

regardless of economic status with 101.9 million subscribers exceeding the total population of

the country of 97.1 million. The deficiencies of fixed telephone lines in underserved and

unserved areas facilitated the adoption of mobile devices and short message services (SMS).

Financial institutions are attracted to reach a larger population by utilizing mobile phones to

bring financial services to undertake banking transactions such as account balance inquiries,

monitor checking account transactions, pay utility bills, pay loans, fund transfer, receive and

send remittances and payroll services.

However, to argue the claim of Chiu, et al., according to GMSA (2014), The adoption of

mobile banking in the Philippines has been slow despite being the “texting capital of the world”

or the “SMS-intensive country in the world” . The use of mobile phones in online banking

services is still in its infancy stage, and the mobile money services provided by the

telecommunication industry retains its position as the leading mobile financial channel for the

Filipino.

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 In support to the claim of GMSA, ITU (2016) denotes that despite the banks' expansion

and innovations through online banking, the use of mobile banking in the Philippines has yet to

reach a level of growth. Some are illiterate in using the internet and many are poor. The

population was reluctant to risk everything from financial loss by using new financial

innovations. In addition, there are four barriers to diffusion of online banking, namely,

infrastructures, costs, privacy and security

Local Studies

The most widely used bank in the Philippines in the late 21st century is the traditional-

based banks according to the study of Morales and Justiniano (2021) entitled “The Banking

Regulation Review: Philippines”. It states that individuals who desire to engage and are qualified

to perform any banking transaction such as transferring of funds, payment of bills, and other

transactions that need to be done must go to the physical place of the bank.

However, due to the arising of technology and innovation there are changes particularly

on how the Banks of the Philippines transact to their bank customers nowadays. As stated in the

research study of Alalwan, Dwivedi, & Rana (2017) entitled “Factors influencing behavioral

intention to use mobile banking among retail banking clients”, wherein it indicates due to

increasing competition, they are compelled to adapt to the new technological-based changes.

In support to the claim of what they have declared in their study in which technology is

the new changes adapted, based on the Internet World Status (2018) entitled “E-Finance in the

Philippines: Status and Prospects for Digital Financial Inclusion”, that the total number of

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individuals using internet banking in the part of Southeast Asia is approximately 415 million in

which they used their smartphones and internet data to access various online banking websites in

order to perform their banking transactions such as Fund payment, deposit, and withdrawal.

Meanwhile, despite the new technological-based approach used by the Banks in the

Philippines they encounter challenges towards it particularly on how bank clients utilize a feature

of mobile payments. According to the study of Deloritos (2021) entitled “Factors affecting the

adoption of mobile payments in the Philippines'' wherein it present the result of the survey

conducted by “The Nerve” (2019) in which they used the population within the area of Antipolo

through the sampling techniques. It resulted that there are 20.1% are doubting the security

offered of mobile banking payments, 17.7% of the respondents are worried about their private

informations, 17.6% indicated to the number of individuals does not see mobile banking

payment as efficient to use, 10.9% are the people response to the survey who are not aware

regarding the mobile banking payment, 10.6% decided to response but do not disclose the

reasons on how they foresee the mobile banking features, 9.1% individuals are having a mistrust

for the Companies that having a mobile banking, and lastly the remaining 5.9% are the

respondents that do not have any internet connection data to use for the mobile banking.

Nevertheless, mobile banking has a risk barrier to encounter mainly on the internet

connections and financial transactions risks pertaining to the preferences of bank clients. It can

be resolve based on the study of Atienza (2018) entitled “Resistance to Mobile and Internet

Banking Innovation in Ozamiz City, Philippines”, it recommends on how to overcome that

challenges, it stated that the Bank Companies here in the Philippines must take an effort to

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educate their bank clients and endorsed adequately to the potential bank clients about the

platform’s security they used. Furthermore, it is essential to recognize the socio-demographic

profile of the bank clients such as the age, gender, working status, and income. In the help of

those factors, it will ensure to increase the arising of technological-based approach of mobile

banking transactions to the bank clients and it will raise awareness on how it can be utilized

effectively and efficiently.

Synthesis

The literature and studies mentioned above are intended to provide more in-depth

knowledge based on how the Banks of the Philippines expand their approach in accommodating

the needs of their Bank Clients, notably with the commencement of the Covid-19 pandemic. The

opportunities of Mobile Banking have achieved a more significant financial inclusion wherein

they often engage and participate in digital banking transactions. Moreover, as it is continuously

demonstrated and explained how Mobile Banks began in the Philippines, the Platforms they

utilized, the Features they have in their website or application, and the recommendations for the

challenges that may arise. The Philippines is still recognized as one of the limited adoptions of

Mobile Banking.

However, it is not precisely stated the characteristics of the significant impact on

enhancing the satisfaction of Bank Clients. This research aims to address the particular

satisfaction preferences and standards to the Bank Client needs. Furthermore, it will also convey

the other issues and perhaps contribute to identifying the potential solutions to recommend to

satisfy the Mobile Banking Clients.

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Financial Services. https://books.google.com.ph/books?

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%20banking&pg=PR1#v=onepage&q=what%20is%20mobile%20banking&f=false

Nicoletti, B. (2014). Mobile Banking: Evolution or Revolution?.

https://books.google.com.ph/books?id=OdlCBAAAQBAJ&lpg=PP1&dq=what%20is%20mobile

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Kahawanda, K., & Wijayanayake, J. (2014). Impact of Mobile Banking Services on Customer

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